[0:03] Well, well, well, well, here we go. Here
[0:07] we go. Another day, another down way to
[0:12] lose money in the stock market. It is
[0:15] disappointing. It is depressing.
[0:18] But this is like the perfect time to
[0:20] shamelessly shill real estate. It not
[0:23] that I'm selling you real estate or
[0:24] anything, but I I do want people to just
[0:27] for a moment
[0:28] think about real estate and a benefit
[0:30] for a moment for real estate.
[0:33] One thing that real estate, especially
[0:35] low debt real estate does for you in
[0:37] this environment we're in.
[0:40] Lower debt the better, okay? Cuz debts
[0:42] obviously, you know, mortgage rates are
[0:44] up right now. They've they've been up
[0:45] for I mean, since this war started, it's
[0:47] been like straight up. Totally the
[0:49] opposite of what Donald Trump wanted.
[0:51] But one thing that real estate does is
[0:53] it diversifies you away from the
[0:55] short-term insanity, geopolitical hits,
[0:58] oil, you get the short-term
[1:01] you you get insulated away from that.
[1:03] And in the event this lasts long enough
[1:06] to where we trigger some form of a
[1:07] recession,
[1:08] you end up having a piggy bank that you
[1:10] could pull money out of.
[1:12] Money that you've allocated to real
[1:14] estate, which makes it hard for it to
[1:17] evaporate in the stock market. Uh but it
[1:19] makes it easy to leverage against
[1:22] in a recession when rates go to zero,
[1:25] because that's what they will do. Rates
[1:27] will go to zero.
[1:28] That'll be one of the first things the
[1:30] Fed does
[1:31] in the event we end up striking some
[1:33] form of recession, depending on how
[1:34] obviously long this this conflict lasts.
[1:37] So, there is a a desirability of
[1:39] diversifying real estate. Even though
[1:40] real estate has kind of like,
[1:42] you know, it's it it's in some areas is
[1:46] actually up since 2022, which is great.
[1:48] You know, especially those lower built
[1:50] areas. But something that you have to
[1:52] think about with real estate is
[1:54] nobody's really cared about real estate
[1:56] the last 4 years because rates have been
[1:58] high.
[1:59] It's it I think it's been this perfect
[2:02] opportunity to accumulate. And I think
[2:05] that will continue until rates come
[2:06] down. Now, my
[2:08] base case is that rates will be lower
[2:10] than they've ever been before by 2032.
[2:13] I don't know if that's going to be
[2:15] because of a recession or just because
[2:18] of the deflation of artificial
[2:19] intelligence that ends up arriving along
[2:22] with, you know, getting through a
[2:23] transitory transitory transitory
[2:25] transitory.
[2:26] Uh it will probably take a lot longer
[2:28] than the
[2:29] 5-year game we've played so far.
[2:31] It will probably take in in the order of
[2:34] a decade, which is why I made the
[2:36] estimate
[2:38] in 2032. I've been saying it for the
[2:39] last 4 years. Those of you have been
[2:42] here for the last 4 years, you know I've
[2:44] been saying this.
[2:45] Uh but the last 4 years, my call has
[2:48] been rates will be lower by 2032.
[2:52] Um could be before that, but you know,
[2:54] the call is buy.
[2:56] Uh which which which which in my opinion
[2:59] creates this sort of 10-year window
[3:02] to buy real estate between 2022 and
[3:06] 2032.
[3:07] Because then you go refinance
[3:10] you know, super low rates, lower than
[3:12] obviously your your cap rates, what
[3:14] you're earning on rent. You know, so
[3:17] house hack is knocking on the door of
[3:19] about 100 in assets.
[3:22] And if you end up taking that and
[3:25] refinancing it, let's say you had to
[3:27] refinance it tomorrow, uh and that
[3:29] represented 35%.
[3:31] You know, you could you could basically
[3:33] leverage a portfolio up to almost $300
[3:36] million.
[3:36] Which is crazy. Uh so creates a lot of a
[3:41] lot of buying power is is the point.
[3:44] Uh real estate's easy to leverage
[3:46] against
[3:47] and harder to it takes more time, you
[3:50] know, it's certainly easier to leverage
[3:51] against than um
[3:53] than stocks. Or sorry, harder to
[3:55] leverage against the stocks. But um
[3:59] in my opinion it contains less So,
[4:03] I'm now getting a a read here that
[4:04] there's now some pricing of a rate hike
[4:09] by October.
[4:10] Uh let's go take a look at that.
[4:13] The
[4:14] Treasury market is really selling off
[4:18] leading bonds to really rocket today on
[4:21] a yield basis, which is very very
[4:24] bearish for the stock market. The bear
[4:26] flattener is continuing. I've got 9.3
[4:30] basis points on the two-year. The
[4:32] two-year is almost at 4%.
[4:36] And if you look at the 10-year Treasury,
[4:38] we're up about 69 basis points here or
[4:41] 6.9 basis points. We're up at 4.35,
[4:46] which is really high. Here, let me show
[4:49] you you know, something you know,
[4:50] attractive in the meantime just to try
[4:52] to like to like relax the pain of what
[4:55] you just saw. You just saw the 10-year
[4:57] at 4.35.
[4:59] That's painful to the eyes. You need
[5:01] something better. All right, good. So,
[5:04] um it's not a surprise that as
[5:08] yields on bonds have risen over the last
[5:12] 33 minutes that the market has been
[5:14] open, then the market's been selling
[5:16] off. In fact, that's as usual, but I
[5:19] mean, we're not always right, but that's
[5:21] exactly what we flagged in the Alpha
[5:23] report this morning. That this canary in
[5:25] the coal mine today is not oil, it's
[5:27] actually the Treasury market. And sure
[5:30] enough, that's exactly what happened.
[5:33] The canary in the coal mine said, "No,
[5:35] no, no, no. Don't trust the bounce
[5:37] because the Qs had a little bounce right
[5:39] here, right?" But look, there is no
[5:42] bounce
[5:43] in the bond market at all. And then the
[5:46] bond market fell off a cliff,
[5:48] uh which suggested this was not a
[5:50] durable bounce.
[5:51] And so you really need yields to come
[5:53] down.
[5:54] Unfortunately, as as yields continue to
[5:56] rise, you are seeing Tesla come under
[5:58] pressure. Tesla is considered a
[6:00] rate-sensitive stock.
[6:02] Uh that is because people finance
[6:04] vehicles with you know, with Tesla. Now,
[6:07] Tesla also buys down loans, but the more
[6:10] yields go up, the more they have to pay
[6:13] to buy down loans to, you know, levels
[6:16] that are attractive.
[6:19] If we go to
[6:22] let's see what we got here. Model 3,
[6:24] Model Y,
[6:26] Cybertruck. And they're phasing out
[6:28] obviously the three or the S and the X,
[6:30] which is disappointing. But
[6:33] here they're pitching lease. What if I
[6:36] go to buy? Let's just take a peek. So,
[6:38] if I go to finance,
[6:41] they're doing 6.29
[6:43] on a Model 3. That's not attractive.
[6:46] Uh okay, what about over here? Let's
[6:48] just load all the order now pages.
[6:52] Ah, on the ones they're deprecating,
[6:55] they're only buying you down to 3.99 on
[6:58] the S and X. Since rates are going up,
[7:01] it's getting expensive, right? On the
[7:03] Cybertruck,
[7:05] they are also getting you down to 3.99.
[7:09] And on the Model Y, they're pulling you
[7:11] to actually 0%. Wow. Uh probably more
[7:15] inventory build-up over here on the Y or
[7:18] they're just trying to,
[7:19] you know, encourage Model 3 buyers to
[7:22] get the Model Y instead because there's
[7:24] more profit in the Model Y than there is
[7:26] in the Model 3.
[7:28] That sounds reasonable to me. Uh but
[7:31] again, as yields go up, it it's going to
[7:33] get more expensive for Tesla as well,
[7:35] which is unfortunate.
[7:37] Uh it gets more expensive for everyone,
[7:39] whether it's private credit or or what
[7:41] it what it could be. So, okay.
[7:45] Great. So, let's go take a peek well,
[7:48] how much of Tesla's valuation is based
[7:50] on the car? Yeah, well, that's but
[7:51] that's the problem. You know, it's maybe
[7:56] 150 bucks of the company's valuation is
[7:59] actually the car business, probably even
[8:01] less.
[8:03] Uh so, what you're really talking about
[8:05] is
[8:06] enthusiasm around robo-taxi and Optimus.
[8:11] But the problem is anytime a company
[8:13] trades off of, you know, a large portion
[8:16] of the business trades off of enthusiasm
[8:18] for a future product,
[8:20] that future product invariably takes
[8:22] longer to create or to provide updates
[8:25] on or to make progress on because that's
[8:28] that's just the nature of building. The
[8:30] things take longer than you anticipate.
[8:33] And so as, you know, new future updates
[8:36] are further uh and fewer between, you
[8:39] end up with uh
[8:41] you know, more bearishness in in the
[8:44] asset. So, it's unfortunate,
[8:48] but we'll see. Hopefully we can settle
[8:50] out here.
[8:52] I'm still not seeing the Treasury market
[8:53] bounce, but I am seeing about a 5-minute
[8:55] green candle set here on the Qs, which
[8:58] is good. Uh but let's see how durable it
[9:00] is given that again, we're we're not
[9:02] seeing any kind of move on the Treasury
[9:05] market to indicate that yields are
[9:07] relaxing. Instead, you know, there's now
[9:10] talk that markets are slowly starting to
[9:14] price in an interest rate uh hike, which
[9:17] is exactly what I warned about on
[9:19] Tuesday, and people made fun of me for
[9:21] that. They're like, "Oh, this is
[9:23] ridiculous, Kevin. This is ridiculous,
[9:25] Kevin." And then sure enough, you know,
[9:26] they hinted at a hike.
[9:28] You know, really, and we're talking with
[9:30] course members about this earlier, but
[9:32] this signals that markets are pricing in
[9:35] at least a 25 basis point hike, maybe
[9:38] even a 50.
[9:40] Let's go Oh, here we go. Here is the
[9:43] Reuters headline. Wow, that came in like
[9:46] substantially later than than I've seen
[9:48] at other sources here, but US to deploy
[9:50] thousands of additional troops to the
[9:52] Middle East, three US officials tell
[9:54] Reuters.
[9:57] Uh but that that has been now known for
[10:01] about 20 minutes.
[10:03] Uh, but I'm just now seeing it come
[10:05] across the wire services.
[10:07] Uh, all right. So, if I go out to
[10:09] October of 2026,
[10:13] you can actually see that we are now
[10:15] pricing in
[10:16] a 33% chance
[10:19] of higher interest rates, not lower.
[10:23] Markets are now pricing in an interest
[10:25] rate hike. Uh, about a 30% chance, so
[10:28] it's it's not massive, but a 30% chance
[10:31] of a hike by October.
[10:33] If we go to December,
[10:37] you can see that falls to about 31%.
[10:41] Uh,
[10:43] that's not great. You know, rate cut
[10:45] bets have evaporated so quickly that
[10:48] you've actually now seen uh, rate hikes
[10:51] begin to get priced into markets. This
[10:54] is exactly why the Treasury market is
[10:58] uh, moving. Oh my gosh. Yeah, look at
[11:00] that. Again. Now we're up again. We're
[11:02] up 7.7 basis points now at 4.36.
[11:07] Uh unfortunately
[11:09] and and oil's not much of a mover today.
[11:11] It's it's mostly yields, which uh, you
[11:13] know, is what we were focused on and
[11:15] focusing on and and today is a uh,
[11:17] triple witching day.
[11:18] Not that that matters for a long-term
[11:20] investor, but shorter term it's going to
[11:22] create more volatility. But, um,
[11:26] let me let me get in here. I want to see
[11:27] if there's more insight on this troop
[11:28] deployment.
[11:30] But uh
[11:32] you this also creates more burden
[11:36] for people who are borrowing.
[11:38] Uh, private credit, uh, buy now, pay
[11:41] later,
[11:42] whatever. Uh, it it all gets more
[11:45] burdened and a little more poopy doopy.
[11:52] So, it's not great. Uh, and it's why
[11:54] today I've really been watching the
[11:56] treasures.
[11:57] All right.
[11:58] So, interesting. There's an article here
[12:01] that's called the Strait is also a
[12:03] credit story. China oil industry CDSs
[12:06] are pushing higher on supply route
[12:08] vulnerabilities.
[12:10] Uh, let me see if I can
[12:13] get any more insight on that.
[12:15] And then I'll share that.
[12:17] Uh, oh, Chuck Norris died? No way, dude.
[12:23] Uh, that was not on the bingo board
[12:24] today. We Dude, we nailed it. Chuck
[12:26] Norris in the Strait of Hormuz.
[12:29] Come on, man.
[12:32] Come on.
[12:34] That's a bummer.
[12:36] Um,
[12:38] all right.
[12:42] So,
[12:43] let me see this here. Okay. Credit
[12:45] default swaps. Let me see if I can get a
[12:48] screenshot here that's interesting. Um,
[12:52] yeah, it's not that exciting. Credit
[12:55] default swaps are slowly moving up, but
[12:58] there's nothing like
[12:59] really scary on these, you know, Chinese
[13:02] CDSs.
[13:03] Petroleum or whatever. There there is a
[13:05] little movement up, but there's there's
[13:06] nothing crazy here.
[13:08] All right, what else we have here? Uh,
[13:10] let me go into
[13:14] commentary here. So, stir market pricing
[13:17] shows significant P&L loss. One can
[13:19] conjure up many different definitions of
[13:20] the word crisis, but a practical one for
[13:22] portfolio
[13:25] Yeah, see, look at that. Told you, it's
[13:26] not durable. If yields keep going up,
[13:29] the
[13:30] little bounces are not playable. They're
[13:32] not durable. That is like 100% what we
[13:35] warned this morning in the alpha report.
[13:36] I even said oil doesn't even matter as
[13:38] much today. It's the Treasury market
[13:40] right matters today.
[13:42] Nobody wanted to hear it. Well, I mean,
[13:43] course members want to hear it, but uh,
[13:46] usually when when I talk about
[13:47] Treasuries, people are like, "No, that's
[13:49] boring Kevin."
[13:50] Like uh
[13:51] it's your canary. You know, I can't I
[13:53] talk so much about canaries, I want to I
[13:55] I almost feel like I should put a canary
[13:56] in this room.
[13:58] Uh,
[13:59] you know, then we can hold
[14:01] uh,
[14:02] hold up the canary.
[14:05] Anyway. All right. One can conjure many
[14:07] different definitions of the word
[14:08] crisis, but a practical one from
[14:10] portfolio management perspective is when
[14:11] the price becomes the ultimate
[14:13] fundamental. In other words, when you
[14:14] have to liquidate portfolio risk in mass
[14:16] because of adverse price action, you're
[14:17] effectively experiencing a crisis
[14:19] regardless of what's going on. Um,
[14:22] so,
[14:24] what are what's their point here?
[14:26] CFTC data suggests speculators are short
[14:28] so for futures.
[14:31] Blah blah blah, blah blah blah.
[14:36] Some bets on forced liquidation.
[14:39] All right, fine.
[14:41] What else?
[14:42] Commodity prices are signaling further
[14:44] downside risk for risk assets.
[14:47] Markets are underpricing the supply
[14:49] shock stemming from the interruption of
[14:51] oil flows through the Strait of Hormuz.
[14:53] To gauge expected market moves from the
[14:55] conflict in Iran,
[14:58] we looked at the relationship between
[15:00] prices and commodities
[15:02] across four different shocks. US break
[15:04] evens and precious metals appear too low
[15:07] relative to their moves.
[15:09] Uh, equities in most regions outside the
[15:11] US
[15:13] and Latin America look insufficiently
[15:15] priced for downside with greatest
[15:17] vulnerability in emerging markets from
[15:20] uh,
[15:20] from the sell-off in commodities,
[15:22] basically. Yeah, I mean, we've been
[15:23] watching copper as well. Uh, and
[15:26] copper's really fallen off. Uh, I mean,
[15:28] you're year-to-date negative now, and
[15:30] the anticipation is that this this might
[15:32] continue.
[15:33] Uh,
[15:34] as far as
[15:37] let me see. I'm still trying to get Oh,
[15:38] yeah, here it is. Pentagon sending
[15:40] additional Marines.
[15:44] Okay, this is now just coming through.
[15:47] Pentagon is sending three warships with
[15:49] thousands of additional Marines to the
[15:50] Middle East. Roughly, yeah, but that's
[15:53] old This is old news, isn't it? Roughly
[15:54] 2,200 to 2,500 Marines from California,
[15:57] USS Boxer Amphibious Ready Group
[16:01] are heading to Central Command.
[16:04] Second massive No, it is. Second massive
[16:06] deployment of Marines in the past week.
[16:08] Right, because the Japan-based group was
[16:10] sent uh,
[16:12] last week, and they're expected to
[16:14] arrive at the end of this upcoming week.
[16:16] This is just a day after Donald Trump
[16:18] says no, you know, no plans to put
[16:20] troops on the ground, but then again, he
[16:22] also wouldn't uh,
[16:23] you know, rule it out or or want to tell
[16:25] anybody about it. So, let's write that
[16:27] down.
[16:30] So,
[16:33] let's see here.
[16:38] Okay.
[16:40] Let's pull this up here.
[16:44] Come on, Mr. Mouse.
[16:46] Mr. Mouse doesn't want to cooperate
[16:48] today. It's okay, I have a backup mouse.
[16:50] Oh,
[16:51] that's why it's not cooperating.
[16:53] Stand by.
[16:55] Stand down and stand by.
[17:00] And Mr. Mouse is working.
[17:02] All right.
[17:04] Let's write this down.
[17:06] So geopolitics.
[17:10] All right.
[17:13] Uh Iran.
[17:15] Last week,
[17:18] last week we sent uh, 2,200
[17:22] Marines
[17:24] and about 2,500 sailors
[17:27] to the Middle East
[17:31] from Japan.
[17:33] These included
[17:35] USS Tripoli and 31st MEU.
[17:40] Uh, and that is the um,
[17:42] Marine Expeditionary
[17:45] Unit. Okay?
[17:47] Uh, this week,
[17:50] oops.
[17:53] Okay.
[17:55] This week,
[17:56] USS Boxer
[17:59] uh Amphibious
[18:01] uh, Ready Group,
[18:03] and
[18:06] 11th Marine
[18:08] uh, or MEU.
[18:14] 2,200
[18:16] to 2,500 Marines via
[18:20] There we go.
[18:21] Uh,
[18:23] this uh, signals
[18:27] the desire
[18:29] to take uh, Kharg Island
[18:33] as a negotiation
[18:36] ploy to open the Strait
[18:39] uh,
[18:41] is becoming more likely.
[18:44] It also suggests,
[18:46] you know, casualties could rise here.
[18:50] US casualties
[18:53] uh, could rise and does not imply this
[18:57] war
[18:58] is close to over.
[19:00] You know, that as we mentioned
[19:02] yesterday,
[19:03] these folks are expected to show up
[19:09] uh by
[19:10] Friday Saturday Sunday.
[19:12] Expected to show up Friday, Saturday,
[19:16] Sunday
[19:17] of next week. So, that'd be around 27,
[19:21] 28 29
[19:23] of March.
[19:26] It's unclear how long it'll take these
[19:28] folks, but if they're going from
[19:29] California,
[19:31] uh, it's probably going to be
[19:34] uh,
[19:35] you know, this I I would guess this is
[19:37] probably going to take uh, about 15
[19:40] days, maybe even a little longer.
[19:42] Probably closer to April 3 before this
[19:47] group shows up. Uh, I'd expect uh, Trump
[19:51] would
[19:52] uh wait until both assets are in the
[19:56] region to make any moves, right? Just
[19:59] basically have more people there.
[20:02] Uh this does delay
[20:06] uh some of that uh
[20:08] delays, you know, straight reopening
[20:12] um somewhat
[20:14] resets the clock
[20:17] on troop arrival
[20:19] if you will.
[20:22] Okay, not ideal.
[20:25] Oh, man. Yeah, 4. Okay. Yeah, 4.37 now
[20:29] up 8.7 basis points.
[20:31] It's a skyrocketing over here. See,
[20:33] oil's done nothing.
[20:35] Nothing. It's all in the treasures
[20:37] today.
[20:38] And uh
[20:42] take a peek here. Qs can't really get
[20:44] anywhere. I've got MP material
[20:48] uh coming down just under its 55 line.
[20:51] Still think this one's slowly heading to
[20:53] 30, although it's it's taking quite a
[20:54] while. Uh calling the top
[20:57] uh was was easier because it happened
[20:59] faster.
[21:01] But anyway,
[21:02] Intuit's actually green today.
[21:05] Yeah, some software plays even even
[21:07] DocuSign's green uh today. Adobe's green
[21:10] today.
[21:11] Uh Nvidia has come down
[21:15] a little bit, but it's been in the
[21:16] sideways range for a while. How's Oracle
[21:18] doing?
[21:19] Just to pay attention to Oracle.
[21:21] It's
[21:22] it seems like it's trying to build some
[21:25] kind of bottom here.
[21:28] Let's see.
[21:37] See that?
[21:38] It seems like it's trying.
[21:41] But we'll see if that can even hold on.
[21:44] And then how are we doing on the spy?
[21:48] If we just go SPX.
[21:51] We're losing the 100-day moving average.
[21:53] No, that's the week. Yeah, we are.
[21:56] Sorry, we lost the 100-day moving
[21:59] average is the one I'm referring to. We
[22:01] have not lost the 100-day moving average
[22:03] on the spy since liberation. Well,
[22:05] actually right before liberation. Here's
[22:07] where we got liberated.
[22:10] That's interesting.
[22:12] Uh it's been quite a time quite a bit of
[22:15] time here sideways at all-time highs.
[22:21] Mhm.
[22:24] Bitcoin falls under 70 back to about
[22:26] 694, which is better than where it had
[22:29] been. Now, it's it's off the floor.
[22:34] And then we've got
[22:37] let's look at Owl, Blue Owl.
[22:43] Owl wow.
[22:45] Still still under 10.
[22:48] Sitting right about nine bucks over here
[22:50] on Blue Owl. And I think Restoration
[22:52] Hardware's at uh not quite. Not quite at
[22:55] liberation day lows. Liberation day lows
[22:58] were 123.
[23:02] All right.
[23:04] Let's uh
[23:05] see what else we got here.
[23:07] Wall Street Journal.
[23:10] So, we saw this yesterday. These are the
[23:13] uh
[23:13] A-10s and the Apaches
[23:17] >> [snorts]
[23:17] >> trying to reopen Hormuz.
[23:22] South Pars gas field's biggest is Iran's
[23:25] biggest economic safety net. We'll take
[23:27] a look at that.
[23:30] Avoid overheated assets, says uh
[23:34] the Wall Street Journal.
[23:36] Battlefield map of critical energy.
[23:39] Saudi Arabia
[23:41] 180 if this keeps going.
[23:46] Uh Tesla finally has its first semi
[23:49] truck and it's already a hit. Oh, that's
[23:51] awesome. Take a look at that.
[23:55] Some mass deportation policies went too
[23:57] far, Trump told his inner circle. Oh,
[23:59] interesting.
[24:01] Trump sues Harvard over civil rights.
[24:04] OpenAI plans to launch a desktop super
[24:06] app.
[24:08] Oh, to try to compete with Open Cloud.
[24:11] >> [snorts]
[24:13] >> Supermicro got whacked on the uh
[24:15] smuggling story.
[24:21] All right, I want to see the Cybertruck
[24:22] thing.
[24:23] Let's see what we got over here.
[24:26] Anything else here? No.
[24:31] Okay.
[24:33] Let's take a look at this.
[24:35] Tesla.
[24:40] All right.
[24:48] All right, surrounded by screens, backed
[24:50] out of the their no problem. Pilot model
[24:52] of the semi
[24:55] This summer after years of delays, Tesla
[24:57] began shipping mass-produced
[25:00] semis from its Nevada Gigafactory. The
[25:02] company's expecting to deliver between
[25:03] 5,000 and 15 before ramping to 50,000 a
[25:06] year. Wow.
[25:09] Surprisingly, Tesla's winning over a
[25:12] hard-to-please influential group of
[25:13] truckers. Truckers who drove it in pilot
[25:16] test say they love the features
[25:18] including a centered driving position,
[25:21] faster charging, and longer range for
[25:23] about $100,000 less than other battery
[25:26] electric trucks. That's great.
[25:30] Uh Tesla's focused on cyber cabs and
[25:32] Optimus, bladdy bladdy bladdy.
[25:35] Swapped out a 13-gear diesel truck
[25:38] which is automatic for a 1-month pilot
[25:40] test. It's easier on your body. It's
[25:43] less stressful because you're not having
[25:45] to engage the clutch
[25:47] uh and the stick shift, but I thought it
[25:49] was automatic. But whatever.
[25:51] You've got Tesla says the semi can
[25:53] charge four times faster than other
[25:55] battery electric trucks reaching 60% in
[25:57] 30 minutes. Wow.
[25:59] That's actually pretty impressive.
[26:01] Uh slower than filling up with diesel,
[26:04] but not bad for an EV. I think the thing
[26:05] looks really cool.
[26:10] So,
[26:12] are these just people comparing other
[26:14] battery trucks?
[26:19] California uh ground zero for zero
[26:21] emission, freight downturn.
[26:24] Trucking companies
[26:26] are securing grants for trucks. Tesla
[26:28] produces two semi models, 325 miles and
[26:31] 500.
[26:33] Haven't talked about price yet.
[26:36] People familiar with the orders say they
[26:37] come in at under $300,000 or double the
[26:39] cost of a diesel truck. Wow.
[26:44] Fewer moving parts, don't need regular
[26:45] servicing.
[26:48] The servicing aspect is a big win with
[26:51] EVs.
[26:53] You know, substantially
[26:55] uh less.
[26:57] That's cool. See what people are saying
[26:59] here.
[27:02] Now, let's see the Roadster. Haha.
[27:06] Okay.
[27:08] Yeah, cool. All right, great. So, that's
[27:11] great for Tesla.
[27:13] Let's go take a peek over here.
[27:17] That's the deportation policy one. Let's
[27:18] look at this.
[27:20] Latest attacks on oil and gas
[27:21] infrastructure mark the dangerous new
[27:23] phase
[27:25] worsening the energy crisis. Israel on
[27:27] Wednesday struck
[27:29] Iran's South Pars, which we remember
[27:32] talking about that. So, South Pars is
[27:35] over here.
[27:38] Here's the Strait of Hormuz.
[27:41] Okay.
[27:46] And then of course we had the
[27:47] retaliation. We had attacks continuing
[27:50] Thursday.
[27:56] Brent crude prices move up.
[27:58] Oil markets open
[28:00] after initial attacks.
[28:03] Fuel tanks, Kharg Island. Well, now
[28:05] there are the threats of the takeover of
[28:07] Kharg Island. That's going to be
[28:08] interesting to see how markets react
[28:12] to that if that ends up occurring.
[28:14] Let's take a look at CME Sizzl just to
[28:16] see the rate change here.
[28:21] And we still sit at on bonds. Well,
[28:25] 4.37. It's just a
[28:27] massive uh increase in in the 10-year. I
[28:32] mean, we were under four there for a
[28:33] minute. Look at that. We were at 3.96
[28:38] about a month ago.
[28:41] It's incredible.
[28:44] And uh you know, now we've gone up about
[28:47] 46 basis almost half a percent of an
[28:50] increase on the 10-year.
[28:52] So, you know, that just drives mortgage
[28:53] rates straight up, too.
[28:55] Not great.
[28:57] Okay, what do we have here? Saudi
[28:59] Arabia's oil officials are working to
[29:00] frantically project how much how high
[29:03] oil prices might go if the Iran war and
[29:05] its disruption doesn't end soon.
[29:08] And they don't like what they're seeing.
[29:10] Uh yeah.
[29:12] Okay.
[29:14] Base case, several oil officials in the
[29:16] Gulf
[29:17] said the prices could surpass 180
[29:21] if disruptions last until late April.
[29:25] That would sound like a bonanza for the
[29:26] kingdom still heavily leveraged oil
[29:28] revenly revenue, but it's deeply
[29:30] concerning because it could push
[29:32] consumers into slashing oil use or
[29:35] trigger a recession that hurts demand.
[29:38] Right.
[29:40] Uh
[29:41] they would also risk casting Saudi
[29:43] Arabia as the role of profiteer in a war
[29:46] it didn't start. Saudi Arabia generally
[29:48] doesn't like too rapid increases of oil
[29:50] because it creates longer-term market
[29:51] instability.
[29:52] Right, you have a lot more volatility.
[29:57] 180, that'd be wild. You know, the rise
[30:00] that we've seen in oil prices has
[30:01] already been substantially worse than
[30:03] what we saw when Russia invaded Ukraine.
[30:06] So, it's it's been pretty aggressive
[30:09] this this oil movement.
[30:12] Let's take a peek here at the Qs.
[30:15] Yeah, cuz see Qs can't get anywhere
[30:17] until those yields come down. What's the
[30:20] the meta today?
[30:22] 2% on Tesla despite that semi-truck
[30:24] news huh?
[30:26] The semi-truck news is interesting. It's
[30:28] all going to come down to ultimately,
[30:29] you know, how much does that actually
[30:30] drive any kind of profitability.
[30:34] Anyway.
[30:35] Okay.
[30:37] Uh let's see here. 200 200 per barrel is
[30:42] not outside.
[30:43] Contracts release reached an all-time
[30:45] high in July of 2008 at 146.
[30:50] Somebody here in the chat writes
[30:51] Turbinio
[30:53] writes Russia produces about 10% of
[30:55] global oil. Straight produces about 20%.
[30:58] Well, there you go.
[31:01] Uh let's see here. Oman is
[31:05] benchmark tankers of physical crude
[31:07] priced at a fixed spread to the
[31:09] benchmark.
[31:11] Saudi customers are balking at using the
[31:13] benchmark. Wars have removed millions of
[31:15] barrels from global supply.
[31:17] Price is up about 50% already since the
[31:19] conflict began.
[31:23] Saudi Arabia and light crude is being
[31:25] sold to Asian buyers via the Red Sea
[31:27] port for around $125 a barrel.
[31:33] As extra oil in storage, some of which
[31:36] was shipped out of the Gulf ahead of the
[31:37] war,
[31:38] uses up physical storage.
[31:42] Physical shortages will bite more deeply
[31:44] next week causing prices to close in to
[31:45] 138 to 140, the official said.
[31:49] Interesting. So, as physical storage
[31:53] is used up,
[31:55] prices are likely to go even higher on
[31:58] oil as soon as next week.
[32:06] Someone in the chat says Reddit's on the
[32:08] move today.
[32:10] Let's go take a peek.
[32:11] Yeah, look at that.
[32:13] Some enthusiasm there on Reddit. Looks
[32:16] like Reddit has a pretty big support
[32:19] line at 133.
[32:21] We didn't quite bounce off that today.
[32:26] But, you're right. There's some some
[32:28] real volume coming in.
[32:30] This is on the 5-minute volume chart.
[32:35] Man, just right off a cliff here.
[32:37] Uh which means yields up.
[32:40] And Qs are getting their first 5-minute
[32:42] green over here
[32:44] that we've seen in the last about 30
[32:46] minutes, 40 minutes.
[32:49] Okay.
[32:50] Average pump prices have rocketed. We
[32:53] are at the highest level since right
[32:55] after the Russia-Ukraine invasion.
[33:01] By the second week of April, Saudi
[33:04] officials expect prices to hit $150
[33:06] before stepping up to 180 in the weeks
[33:08] after that. Wow.
[33:10] And and remember, it's going to take
[33:13] >> [snorts]
[33:13] >> you know,
[33:14] 10 to 15 days to get those troops to the
[33:16] region that Trump is sending.
[33:18] Uh and and you know, people aren't
[33:21] heavily enthused by that.
[33:29] Wagers that Brent futures will hit
[33:32] 130, 140, 150 next month were popular
[33:34] positions as of Wednesday.
[33:37] Great. So, now we're getting
[33:39] you know, those call options that call
[33:41] option betting is starting to move up in
[33:43] price.
[33:45] Market is not acting like this is an end
[33:48] of March thing anymore.
[33:50] I don't think 150 is out of the
[33:51] question.
[33:53] More variables could get prices to move.
[33:55] Okay, Russia is contributing to supply.
[33:59] Demand could fall, which would bring
[34:00] prices down, but that potentially only
[34:02] in tandem with a recession.
[34:04] Right, cuz then people are pulling back,
[34:06] driving, going to the mall, flying,
[34:08] whatever.
[34:13] 150 is where people really start to put
[34:15] their pencils down and do the math.
[34:17] Americans might start working from home,
[34:19] rethinking vacations,
[34:22] driving less.
[34:26] Price at the pump.
[34:29] Gasoline demand tends to start declining
[34:31] once gas prices exceed 350 a gallon.
[34:35] Uh that's interesting.
[34:37] For many, that price is already here.
[34:39] Average retail price of gasoline is 388
[34:41] on Thursday.
[34:42] A lot higher in California.
[34:48] Diesel is already hitting
[34:50] uh companies that rely on the fuel.
[34:55] Mhm.
[35:01] Let's see here.
[35:04] Uh
[35:07] Saudi Aramco is also weighing a scenario
[35:09] where the rapid rise in oil cost puts
[35:13] downward pressure on other countries'
[35:14] currencies, raising their effective cost
[35:18] of energy even more, driving inflation
[35:20] and rates up, and slowing their
[35:22] economies.
[35:24] >> [snorts]
[35:25] >> This run-up could eventually hit the US.
[35:29] Well, that's why you're now seeing uh
[35:31] the Fed market pricing in
[35:33] um
[35:35] a potential rate hike by October.
[35:39] You know, this is uh
[35:41] no bueno.
[35:43] Okay. There it is. Now, the Wall Street
[35:46] Journal is covering it.
[35:48] See if they have any more insight here.
[35:52] Okay, Box Rampageous Group.
[36:00] Nope.
[36:02] >> [snorts]
[36:03] >> Uh Trump called NATO a paper tiger and
[36:06] cowards. Um
[36:10] Over 100 arrested in UAE for videos and
[36:13] misinformation.
[36:15] Apparently.
[36:17] Wow.
[36:18] Cracking down.
[36:21] Pentagon sending thousands of more
[36:22] warships
[36:24] thousands of more soldiers.
[36:28] Second massive deployment in the past
[36:30] week.
[36:32] Yeah.
[36:35] Iranian man arrested for trying to enter
[36:38] UK nuclear base.
[36:40] What?
[36:42] British police arrested an Iranian man
[36:44] who attempted to enter a nuclear base in
[36:46] Scotland.
[36:48] What?
[36:49] The 34-year-old was detained along with
[36:51] a 31-year-old woman.
[36:55] Faslane houses UK's nuclear-armed
[36:58] submarines.
[37:01] Unsuccessful attempt to enter the base.
[37:04] Wow.
[37:05] Wonder if they got any weapons with
[37:06] them.
[37:13] All right.
[37:20] Uh deportation, some policies went a
[37:23] little too far.
[37:25] Yeah.
[37:27] I think that's fair for him to admit.
[37:30] Talk Tesla.
[37:32] We saw them more troops.
[37:36] Saudi Arabia.
[37:41] South Pars.
[37:47] Oh, ABC pulls The Bachelorette after
[37:50] video showing the star's alleged violent
[37:52] behavior towards ex. Yeah, doesn't she
[37:54] have a domestic violence case or I think
[37:56] the the prior ex has a domestic violence
[37:59] case against her.
[38:05] Taylor Frankie Paul being violent
[38:08] towards her former partner. In light of
[38:09] the newly released video that would
[38:11] surface, we've made the decision not to
[38:12] move forward with the new season.
[38:14] Wow.
[38:17] That sucks
[38:18] for her.
[38:20] Imagine being Well, I mean, imagine
[38:22] like, "Yeah, I'm going to be the
[38:23] Bachelorette or whatever." And uh
[38:29] and then you get rugged.
[38:30] Well,
[38:31] don't beat people, I guess, huh?
[38:36] Interesting.
[38:37] Okay.
[38:39] Let's keep going here.
[38:45] Is is the video benign or is it bad?
[38:48] As somebody just I don't I don't really
[38:49] care to go look for it right now. But,
[38:51] uh look at this. Now, we're at 4.38.
[38:54] It's even worse.
[38:56] She was throwing chairs? The video was
[38:58] wild? Are you serious?
[39:01] All right. All right. All right. All
[39:02] right. I got to look. I got to look.
[39:05] Ah.
[39:07] Supposed to be doing work.
[39:10] Uh
[39:12] uh
[39:13] uh Bachelorette.
[39:20] Uh
[39:22] TMZ.
[39:25] Uh
[39:27] trigger warning.
[39:31] Near a child.
[39:33] Oh, great. I really hate this kind of
[39:36] stuff.
[39:41] And then, of course, TMZ's banners are
[39:42] something else.
[39:44] But hold on, let's actually get this to
[39:46] where the audio function.
[39:49] There we go.
[39:58] Oh, she's pulling her his hair.
[40:01] He's documenting.
[40:02] [clears throat and cough]
[40:16] Oh my god.
[40:20] Oh my [laughter] gosh.
[40:23] Wow.
[40:24] I like I like the classic
[40:27] TMZ. Oh by the way, did you see the
[40:29] child?
[40:30] >> [laughter]
[40:31] >> With the ding. OH MY GOSH.
[40:40] I THINK those chairs are from Target.
[40:42] Ah,
[40:43] that's pretty crazy.
[40:45] That's pretty wild.
[40:47] All right.
[40:49] Let's see here.
[40:53] Okay.
[40:55] Amazon acquires a robotics startup. What
[40:57] for deliveries?
[41:00] Uh
[41:01] Ri- River River. It's a
[41:05] Let's see, based in Zurich.
[41:09] Valued at 110 mil previously.
[41:13] Huh.
[41:15] All right.
[41:17] After a courier completes a drop-off,
[41:20] Rivi- River's delivery robots can
[41:22] shuttle other packages from the car to
[41:24] separate locations nearby.
[41:27] Wow. Robots are going to be delivering
[41:29] our packages.
[41:33] All right.
[41:37] Uber self-driving quest as CC idea that
[41:40] could jolt the IPO market.
[41:43] Like get more people to IPO.
[41:46] I don't know. I mean the market needs to
[41:48] actually perform better for more
[41:50] companies to IPO because people don't
[41:52] want to, you know, Figma or Gemini.
[41:55] I know I was looking at Gemini this
[41:57] morning. The thing's down like 88%.
[42:00] Something like Gemini space station.
[42:03] The crypto company, right? And look at
[42:06] this. This is horrible. You know, they
[42:07] were up like 6% in after hours yesterday
[42:10] because they said they were laying off
[42:12] like 15% of their staff.
[42:15] But
[42:16] that got eradicated real fast.
[42:20] But this is the
[42:23] Yeah. Okay, only requiring
[42:26] twice a week.
[42:27] Or sorry, uh twice a year financials.
[42:32] I I don't think it has as much to do
[42:34] with the financials as it does
[42:38] you know, is this the kind of market
[42:40] that you want to risk your stock like
[42:42] plummeting in?
[42:48] All right, what else?
[42:52] Cal-She raises $1 billion at a $22
[42:55] billion valuation. That's wild.
[42:59] Yeah, you you always see like they're
[43:01] running all these ads now. Bet on
[43:03] anything. Bet on anything. That's the
[43:04] point. They want you to bet on anything
[43:06] because the spreads are horrible and
[43:08] that's how the brokers make way more
[43:10] money. There's way more money to be made
[43:12] in in betting than there is on like
[43:16] selling, you know, having people invest
[43:18] in stocks like with Robinhood uh just on
[43:20] the stock side. That's why Robinhood
[43:23] encourages options. That's why Robinhood
[43:25] encourages crypto and margin because
[43:27] that's where they actually make most of
[43:29] their money. Now, betting markets,
[43:31] that's even
[43:33] there's even a higher spread in betting
[43:35] markets. It's super juicy uh for
[43:38] brokers.
[43:43] Iran war threat is the greatest Iran war
[43:46] is the greatest threat to global energy
[43:47] in history, warns the IEA. Wow.
[43:54] Desperation, thy name is Scott Bessent.
[43:57] The perils of the Hormuz escort plan.
[43:59] Yeah, let's take a look at that.
[44:05] Oh, JP Morgan is now also going to
[44:07] monitor keystrokes of their junior
[44:09] bankers.
[44:11] Which like how awkward is that?
[44:13] I they said if I s- command F this, I
[44:16] should find keystrokes. Yeah, there.
[44:18] Look at this.
[44:19] They're going to estimate employees
[44:21] weekly digital footprint including how
[44:24] many video calls they do, how many
[44:26] desktop keystrokes they make, and how
[44:27] many scheduled meetings they have. They
[44:29] talk about a miserable job. Now how many
[44:32] times you push a button on a keyboard is
[44:34] going to get monitored?
[44:36] Ah.
[44:38] Man. Talk about a big brother crap.
[44:41] Gross.
[44:43] No faith anymore in humanity here
[44:45] apparently JP Morgan. But it doesn't
[44:47] surprise me. I hate JP Morgan.
[44:49] USS Samuel Roberts was returning from
[44:51] the Strait of Hormuz escort run when an
[44:54] Iranian contact mine exploded ripping a
[44:57] 9-ft
[44:59] hole into its hull.
[45:01] Wow.
[45:05] Uh when was this? Almost four decades
[45:07] on, the Gulf incident in 1988 is a stark
[45:10] reminder of the perils of Trump's plan
[45:12] to restart traffic.
[45:15] World economy is reeling, political
[45:17] pressure building.
[45:19] US military chiefs must calculate what
[45:21] level of threat is available.
[45:25] US military planners consider the risk
[45:27] too high. US warships built with a
[45:30] single hi- a hull
[45:32] are particularly vulnerable from mines
[45:34] and fast boats
[45:36] which the Iranians have armed with small
[45:38] missiles and rockets.
[45:40] Right. It's the ribs.
[45:43] Rigid inflatable boat or um
[45:48] Uh and there what's the other one? The
[45:50] one that's just rigid all around. Ah,
[45:52] whatever.
[45:53] Uh any convoy could also be targeted by
[45:56] unmanned surface vessels, ballistic and
[45:58] cruise missiles, and drones. The drone
[46:00] threat's a problem.
[46:02] Big problem. You can just pop out of a
[46:03] cave and launch them pretty fast.
[46:07] And and then you'd be pretty close to
[46:09] your target, too. So interception time
[46:11] frames would plummet.
[46:17] Man, the 10-year does keep going. That's
[46:20] crazy.
[46:25] Uh supreme leader to issue message for
[46:27] start of Iranian New Year within
[46:29] minutes. Uh okay.
[46:39] Let's see here.
[46:41] Uh US would likely start an escort
[46:44] operation with a small convoy. This
[46:46] could be two destroyers, each with about
[46:48] 310 sailors. A commercial tanker would
[46:50] probably lead the line of ships
[46:53] because they have double hulls and could
[46:54] absorb a hit from a mine without
[46:55] sinking. Oh, really?
[46:58] Uh the destroyers protect against
[46:59] missiles and drones. They also have
[47:01] anti-submarine and some limited
[47:03] anti-mine technology. Ships would be
[47:05] spra- spaced out 1.5 to 2 miles.
[47:09] Exact formation would likely change
[47:11] between runs to bit- prevent radar
[47:14] missile blind spots.
[47:16] You'd mix them up.
[47:20] The aim would be that no commercial
[47:22] vessel stands between Iran and a US
[47:24] warship. Right, so that way you can
[47:25] intercept.
[47:29] But you'd travel through the strait
[47:30] single file. Wow.
[47:38] Anywhere between eight to 12 destroyers
[47:40] would probably be needed for the whole
[47:41] operation. 10 is a good number.
[47:46] Kevin, you must look at long-range
[47:48] strategic business plan that Elon Musk
[47:50] posted. I see you have another plan.
[47:56] Let's go see.
[47:59] Uh
[48:02] And then we'll come back to this.
[48:07] He posts so much. It's so hard to find.
[48:12] Uh his stuff.
[48:18] Yeah, I don't
[48:20] I'll just try to Google it.
[48:22] Elon Musk long-range strategic plan.
[48:34] Mm.
[48:37] That's just a nice nap.
[48:39] Did I miss it?
[48:40] Did I scroll past it?
[48:43] Elon Musk master plan equals keep
[48:44] changing the plan. Yeah, I mean that's
[48:47] that's exactly right.
[48:50] Uh
[48:52] Somebody says did a fighter jet get
[48:54] taken down? Well, a couple days ago a
[48:56] fighter jet did get hit
[48:58] uh by Iranian fire.
[49:00] We're not sure if that was
[49:03] you know, a missile
[49:04] or uh or what, but but yes.
[49:11] Tesla terrifies
[49:13] Is it the chip manufacturing project?
[49:20] It's a picture. What's it a picture of?
[49:23] I don't know.
[49:24] Oh, there it is.
[49:28] >> [laughter]
[49:30] >> All right, yeah, that's a decent meme.
[49:31] Okay.
[49:33] >> [snorts]
[49:35] >> It's all on the peg of the Strait of
[49:37] Hormuz.
[49:38] >> [laughter]
[49:39] >> Okay. Okay. All right. It's It's It's a
[49:41] good uh
[49:44] It's a good uh It's a good meme.
[49:47] Oh, and then somebody Oh.
[49:52] Oh.
[49:55] All right. I had to bring it right back
[49:57] to the Epstein files.
[50:00] Escort would require aircraft so they
[50:04] could tackle a swarm of drones.
[50:07] Any escort operation is not expected to
[50:09] start until uh the US Tripoli
[50:13] reaches the region from Japan.
[50:16] Not expected to arrive until the
[50:18] end of next week.
[50:20] Interesting. All right, so let's write
[50:22] down some of this. So, basically
[50:29] uh escort plans.
[50:35] Wall Street Journal reports
[50:37] uh escort
[50:39] uh how should we put it? Um
[50:41] Hormuz escorts uh may begin once
[50:46] uh amp-
[50:48] phibious units enter region.
[50:54] >> [snorts]
[50:55] >> Uh but it will be hard, obviously.
[51:01] Fast boats, which are hundreds if not
[51:03] thousands, are a particular concern.
[51:05] Hidden along the coastline, they could
[51:07] be loaded with explosives.
[51:09] Uh
[51:10] Iranian fast boats
[51:14] uh and drones
[51:18] loaded with explosives and drones are
[51:21] the risk.
[51:24] US is using A-10 Warthog Warthog
[51:27] aircraft in a hunt for Iranian vessels.
[51:31] Would not be easy to determine whether
[51:33] enough fast boats have been destroyed to
[51:35] keep the convoy safe.
[51:37] Because they are small and numerous,
[51:38] they could be distributed widely and are
[51:40] probably in tunnels, large garages,
[51:42] hangars, and parking lots.
[51:46] Yeah, cuz you just throw them in the
[51:47] water pretty quickly.
[51:52] They're all over the place. Creeks,
[51:54] inlets, you've got to find where they're
[51:56] hiring or hiding.
[51:58] Minesweeper would also need to pass.
[52:02] US has been striking mine-laying ships.
[52:04] Yeah, but some are already probably
[52:06] laid, the mines.
[52:09] We're going to have to literally test
[52:11] the waters a little bit.
[52:13] Testing the waters.
[52:19] No longer need or desire NATO's
[52:21] assistance, says Trump. Right. It's We
[52:24] don't need your help. Now we need your
[52:26] help. Now we don't need your help.
[52:30] What a mess.
[52:31] What a mess.
[52:33] Let's see what people are saying in the
[52:34] comments on this one.
[52:36] Uh
[52:38] let's see.
[52:40] Iran knows this long-term strategy will
[52:41] do the most harm to opponents. Sure.
[52:46] Blah, blah, blah. Okay.
[52:48] Let's keep uh keep an eye on here. Yeah,
[52:51] see? Qs can't get anywhere. Not with the
[52:54] 10-year Treasury doing this.
[52:56] I'm just looking at the longer-term
[52:57] proxy here, TLT, just as a little easy
[53:00] tool to watch it.
[53:05] Okay.
[53:08] Not great.
[53:10] Let's keep going. So, FT
[53:19] uh
[53:21] Okay.
[53:23] Also have Where was that?
[53:26] There was a piece yesterday that is Oh,
[53:27] yeah, the JP Morgan piece. We'll take a
[53:29] peek at that and TS.
[53:32] Uh
[53:36] Okay.
[53:38] So, let's take a peek at this.
[53:45] Mhm.
[53:50] One sec.
[53:56] Okay.
[53:57] What do we have here? Iran oil war shock
[53:59] shift towards a reprise of 22 clear
[54:02] facts. Trump does not want energy prices
[54:04] to remain high in an election year.
[54:07] Yeah, that's true.
[54:09] Iranian goal is regime survival seen as
[54:14] victory in this war.
[54:16] Right. Two conditions.
[54:19] Okay.
[54:21] Uh let's see what they say. Overall,
[54:24] the change overall in our view boils
[54:26] down to a bearish shift in
[54:27] probabilities.
[54:29] Okay.
[54:30] Karg wild card war taco
[54:34] limited Iran agreement that all Gulf
[54:37] shipping will be unmolested
[54:40] theory.
[54:41] Iran has no incentive until its exports
[54:44] are squeezed.
[54:48] And then military solution, the non-taco
[54:51] boots on the ground
[54:53] Hormuz operation takes months.
[54:58] And you prepare for some kind of
[55:00] invasion.
[55:01] Mhm.
[55:05] It takes two to taco. Well, yeah, now it
[55:07] takes BB to taco as well.
[55:13] Karg could be part of the go-for-broke
[55:15] approach. It would involve complete
[55:16] destruction of the island's oil
[55:18] infrastructure to starve the Iranian
[55:20] regime.
[55:21] Carpet bombs
[55:23] of Karg might be accompanied by an inva-
[55:26] invasion.
[55:28] Nothing to lose retaliation from Iran
[55:31] after that, though.
[55:32] Also true.
[55:34] Commando raid on Karg
[55:39] uh Trump
[55:41] let's see here.
[55:43] More probable version per TS Lombard.
[55:47] Commando raid of Karg
[55:49] taking control of it, basically.
[55:57] Okay.
[56:01] And then I also saw
[56:05] Trump says Iran is not going to have
[56:07] nuclear weapons or is he yapping
[56:08] somewhere?
[56:09] Probably.
[56:13] See if I can find it. But in the
[56:15] meantime,
[56:16] No, nobody's covering it right now as
[56:18] far as I can see.
[56:20] But that's all right. Cuz I want to keep
[56:22] looking at this stuff anyway.
[56:24] So, the JP Morgan piece
[56:27] that I was sent
[56:31] uh let's pop that open.
[56:35] Mhm.
[56:39] Apparently,
[56:41] can't get the darn thing open.
[56:43] All right, there we go. That'll work.
[56:45] All right, here's the JP Morgan piece,
[56:47] which is
[56:51] Trump commented that Israel will not
[56:54] have this misspelled Israel will not
[56:55] conduct further attacks on Iran's main
[56:57] natural gas facility.
[56:59] That's fine.
[57:02] Narrative. We talked about the Qatar
[57:04] image.
[57:09] Market is pricing in a quick end to the
[57:11] Middle East conflict and reopening the
[57:12] Strait.
[57:13] High-risk assumption giving
[57:16] S&P and oil correlations typically turn
[57:18] increasingly more negative after a 30%
[57:20] spike.
[57:22] Yeah.
[57:23] Much of the market's attention has been
[57:24] focused on the inflationary impact from
[57:26] higher oil prices. But in our view, the
[57:28] bigger and more consequential question
[57:29] is the potential negative transmission
[57:31] if the Strait does not reopen.
[57:34] After energy rationing and substitution
[57:35] effects are exhausted, one could expect
[57:38] a negative impact to GDP.
[57:41] If oil demand destruction occurs, we
[57:44] expect equities as well as prediction
[57:46] markets to start pricing in slower
[57:47] growth and the higher odds of a
[57:48] recession.
[57:52] Uh without
[57:54] a the washout investor sentiment
[57:57] could ultimately prove to be a clearing
[57:59] event. The S&P If the S&P 500 sell-off
[58:02] gains momentum below the 200-day moving
[58:04] average, strong support may not
[58:06] materialize until 6,000 or 6,200. Okay.
[58:11] Let's see where we sit right now on the
[58:13] SPX.
[58:18] Well,
[58:21] here's the day chart.
[58:23] And so far, we're getting momentum under
[58:25] that 200-day moving average.
[58:27] Obviously, today's been, you know, an
[58:29] additional rough day as uh
[58:33] you know, we've got this what's it
[58:35] called? Um
[58:41] Uh let's see here.
[58:45] This Treasury rally yield rally, rather.
[58:48] It's It's not really a bond market
[58:50] rally. It's a yield rally.
[58:52] Which means the bond market's actually
[58:53] selling off.
[58:55] Oh, wow. Yeah, look at that. Now you're
[58:57] up 10.3
[58:59] basis points right here. That's just
[59:01] nuts.
[59:02] Okay. So,
[59:08] mhm
[59:10] Okay.
[59:15] Okay, this is a little bit on the Fed,
[59:17] but there's nothing new there.
[59:23] Too soon to know the scope Middle East
[59:25] conflict uh Tancey
[59:29] extensive true Okay, excerpts.
[59:34] Blah, blah, blah. All right. And the
[59:35] most interesting comment out of this is
[59:37] basically just the S&P 500 losing
[59:41] or accelerating a sell-off under the
[59:43] 200-day moving average could bring the
[59:45] S&P 500 down another
[59:47] 10%.
[59:50] And they're lowering their year-end
[59:52] price target because of the war.
[59:56] What a mess.
[59:58] All right, let's see what the times have
[59:59] for us.
[60:04] Okay.
[60:07] "We firmly believe in strengthening the
[60:09] relationship with our neighbor
[60:10] countries", says the Iranian leader.
[60:12] Yeah, how's that going? By attacking
[60:14] everyone.
[60:16] More attacks reported in the Middle
[60:18] East. Of course, they're still attacking
[60:20] each other.
[60:26] US military ramps up to clear the
[60:27] strait.
[60:29] Yeah, we'll see how that goes.
[60:41] Mhm.
[60:45] Iran executes three men.
[60:48] Including star teenage wrestler.
[60:51] I wonder why they got executed.
[61:01] Uh, we talked about the Fed. Okay, let's
[61:03] go see.
[61:05] So here
[61:08] Oh, what? Protest? Three men were
[61:09] executed by hanging in Iran on Thursday
[61:11] as they were convicted of killing two
[61:13] police officers during government
[61:14] protest.
[61:16] Yikes.
[61:17] One of the men was a decorated
[61:19] 19-year-old wrestler.
[61:21] The groups raised concerns about his
[61:22] execution pointing to the fast track
[61:25] trial
[61:27] uh, and a forced confession.
[61:29] Wow.
[61:36] They were convicted of waging war
[61:37] against God. A charge that is punishable
[61:40] by death. And they uh, what the Iranians
[61:43] usually use to punish dissidents.
[61:50] Uh, Iranian authorities regularly
[61:52] extract forced confessions from
[61:54] defendants through pressure tactics
[61:55] including solitary confinement, threats
[61:57] against family members, and torture.
[61:59] Wow.
[62:00] Yikes.
[62:02] Iran executed more than 2,000 people in
[62:04] 2025, the most since 1989.
[62:09] That's a stat.
[62:10] So,
[62:12] Iran executions.
[62:14] 2,000.
[62:16] More than more than 2,000 Iranians
[62:19] executed most since 1989.
[62:27] Uh, and then of course, I mean you had
[62:29] even more people die during the protest.
[62:35] Wow.
[62:40] Okay. Then, US military ramps up to
[62:43] clear Hormuz. We saw that.
[62:46] This is Oh, this is just the A-10 and
[62:48] Apache talk.
[62:50] Okay, so that's nothing new.
[62:52] Biggest thing today is that 10-year just
[62:54] keeps going.
[62:56] Almost at 4.38 now.
[63:00] Private credit
[63:02] risk cycle has not been repealed. What
[63:04] is this?
[63:07] Concerns about private credit in recent
[63:09] weeks should serve as a reminder to
[63:10] investors that the credit cycle has not
[63:12] been repealed.
[63:14] What does that mean? The unusually long
[63:15] period of cheap borrowing
[63:17] following this 2008
[63:19] financial crisis. But worries about the
[63:21] credit cycle could
[63:23] be about to turn to the
[63:27] due for about to turn due to the private
[63:29] credit's exposure to tech companies.
[63:31] Uh-huh.
[63:32] Uh, in his annual letter, Solomon said
[63:34] the investment bank was optimistic about
[63:35] the operating environment but cautioned
[63:37] that it was not hard to come up with
[63:39] scenarios where risks are a lot more
[63:41] pronounced.
[63:43] Okay.
[63:46] In recent weeks, for example, concerns
[63:47] about private credit including
[63:48] underwriting quality or exposure to
[63:50] software companies
[63:52] that may be adversely affected by AI are
[63:53] a reminder that the credit cycle has not
[63:55] been repealed. So, in other words, like
[63:58] a down cycle is still possible.
[64:01] And then of course, Iran has the
[64:02] potential
[64:04] uh, let's see here.
[64:09] Oh, despite concerns, there's still the
[64:11] potential for a more constructive
[64:13] environment. Yeah, okay, whatever. This
[64:15] is boring.
[64:17] Okey-dokey. Crazy yields right there.
[64:20] So, what do we get over here?
[64:23] Could the US release more of its
[64:25] strategic oil?
[64:27] Let's see.
[64:31] Basson also pointed to 400 billion
[64:33] release of the strategic oil reserve
[64:36] approved last week.
[64:39] Largest coordinated release in history.
[64:48] Huh. The US oil reserve is a series of
[64:52] vast subterranean salt caverns
[64:56] in four different sites in Louisiana and
[64:57] Texas. Oh, that's very interesting.
[65:01] The average cavern holds 10 million
[65:03] barrels. Wow.
[65:05] That's crazy.
[65:13] Huh.
[65:18] All right. What else?
[65:20] US could declare an emergency.
[65:23] Blah blah blah.
[65:25] Drawdown of the strategic oil reserve.
[65:27] Blahdy, blahdy, blahdy. Okay. Well, it
[65:29] seems like we should have probably
[65:31] filled that up before going to war.
[65:34] Sometimes I wonder
[65:36] if they just kind of forget about it for
[65:37] a moment.
[65:42] Okay, IEA is now warning
[65:45] that it could take 6 months or longer to
[65:46] fully restore oil supplies.
[65:49] Well, that's not great.
[65:55] So, that's the IEA.
[66:00] Warns
[66:02] it could take 6 months or more
[66:05] to fully restore
[66:07] oil and gas
[66:09] flows.
[66:11] That is not good.
[66:15] Let's see uh
[66:17] Okay.
[66:24] Take a listen to it over here for a
[66:25] moment. Yeah, this is definitely a
[66:27] refined products product story because
[66:29] you could have all the oil in the world,
[66:30] but if you can't turn it into the end
[66:31] product you need, it is useless. And we
[66:34] talked about how some of those uh oil
[66:36] fields may not come fully back online.
[66:37] If you shut down a refinery, it takes,
[66:40] you know, we're talking about months to
[66:41] get that back online.
[66:42] >> exactly what the IEA is talking about in
[66:44] in this article here.
[66:45] >> That's what a refinery complex is. And
[66:47] the fact is that as they start reducing
[66:50] runs, those markets are going to get
[66:51] even tighter. And we look at things
[66:53] like, you know, production being uh
[66:55] diverted to Yanbu and Fujairah. That's
[66:57] not the oil we need. That is Arab light
[66:59] oil. What we really need is medium and
[67:01] sour grade oil. This is really a a kind
[67:04] of a crisis for the middle of the
[67:05] barrel. That's why we're seeing diesel
[67:07] prices, jet fuel both hitting records
[67:09] over in Europe. In the US, we produce
[67:11] jet fuel A which can't be used in Europe
[67:13] because of uh uh carbon restrictions.
[67:15] And so, this is really a refined product
[67:17] story. And these these uh these these
[67:19] supply chains are so global and so
[67:21] intricate. And so, each passing day is
[67:23] making those product markets even
[67:24] tighter.
[67:25] Wow, that was that was a lesson. So, we
[67:27] need medium and light.
[67:28] We we need medium and sour. We have a
[67:30] lot of
[67:31] Yeah, yeah. So, the Arab light is being
[67:33] what's with Boring. Okay. Axios. Let's
[67:36] see if there's anything new in this
[67:37] piece.
[67:38] So, Axios here says Trump will's Kharg
[67:41] Island takeover.
[67:43] We we heard this yesterday, but I want
[67:45] to see if there was any
[67:46] additional information here.
[67:50] Process is 90% of Iran's crude.
[67:54] Could put troops in the line of fire.
[67:59] Within a month We need about a month to
[68:01] weaken the Iranians more with strikes to
[68:03] take the island and then get them by the
[68:05] balls and use it for negotiations. A
[68:07] source with knowledge of White House
[68:09] thinking.
[68:10] Ugh.
[68:11] You need an additional month.
[68:14] You know, that's that's exactly what uh
[68:17] Saudi Arabia Yeah, Saudi Arabia was
[68:19] concerned about if we look at
[68:23] this. Saudi Arabia sees a spike to $180
[68:27] a um
[68:28] a barrel of oil.
[68:33] President is going to do what's right.
[68:35] No decision has been made.
[68:38] We want Hormuz open.
[68:42] Tom Cotton says Trump has been prudent
[68:44] to not rule out
[68:47] a ground invasion. Oh.
[68:49] Okay.
[68:55] Mhm.
[68:57] Says Trump's mission could expose US
[68:59] troops to a degree of risk.
[69:05] Behind the scenes.
[69:06] Sources said an occupation of the island
[69:08] by ground troops is under serious
[69:10] consideration. Another option is to
[69:12] impose a naval blockade.
[69:18] Hey, so you could do both.
[69:20] Geez.
[69:22] All right.
[69:25] How are we doing over here?
[69:27] So, nope. Qs keep selling down.
[69:31] So lower lower lower.
[69:33] Painful.
[69:35] Yeah, down what? What Tesla's down 1.8,
[69:37] Meta's down 2.2.
[69:41] Just the bleed continues.
[69:46] All right, let's do a little bit of uh
[69:49] a recap of some of the uh info that
[69:51] we've got so far, especially with this
[69:52] uh
[69:53] troop deployment.
[69:55] Uh hold on. What is Let me see if
[69:56] they've got anything here for a moment.
[69:58] Things like know your customer, sales
[70:00] processes, and the like. They didn't
[70:02] mention anything in terms of like the
[70:04] kind of bread-and-butter investment
[70:05] banking and how that's going to really
[70:06] reshape what you envision as an employee
[70:08] of Goldman Sachs at this point in time.
[70:10] Right now, it's more of back at Okay,
[70:12] that's boring.
[70:14] Let's try over here.
[70:19] or ongoing, depending on your point of
[70:20] view, uh chip and AI war between the
[70:23] United States and China. This is a
[70:24] multi- front This is in part probably
[70:26] about Super Micro, which has been
[70:28] selling off because of the risk that,
[70:30] you know, somebody who owns like 25% of
[70:32] the shares of Super Micro
[70:34] was involved in selling Nvidia chips to
[70:37] China uh against the law. like whether
[70:39] or not it was a single actor. The point
[70:41] is this is one of
[70:43] you know, several cases um where we've
[70:45] had to have a good hard look at at, you
[70:48] know, chips between the US and and
[70:49] China.
[70:51] Amy, this past weekend you gave a
[70:52] keynote at South by Southwest and you
[70:55] announced that after 18 years you're
[70:58] killing your tech trends report and
[71:00] you've basically uh and I
[71:02] correct me in my my summary said that
[71:04] there's no point uh in in looking at
[71:07] backward uh looking data and trends. You
[71:09] now have a convergence outlook uh in the
[71:13] time we have left, about 60 seconds,
[71:15] explain it to us.
[71:17] Sure, we we did throw a funeral this
[71:19] weekend for the thing that we were most
[71:20] famous for. Uh look, executives are very
[71:23] caught up in what is trendy versus what
[71:25] are the longitudinal changes impacting
[71:28] their organizations, their the market,
[71:30] their ability to compete. Rather than
[71:32] tracking individual trends, it's
[71:34] incredibly important that they start
[71:36] looking at the intersection between
[71:38] trends and uncertainties and catalysts.
[71:40] Those are called convergences. Every
[71:43] boardroom, every leader needs to start
[71:45] tracking those seriously because the
[71:47] fate of their ability to survive and
[71:49] weather the storms that are ahead are
[71:51] dependent on having that information at
[71:52] their fingertips.
[71:54] Amy Webb, CEO of Future Today's
[71:56] >> Yeah, that was also kind of boring. All
[71:58] right, let's go through this.
[72:02] Uh okay.
[72:10] All right.
[72:15] Well, Donald Trump is now sending more
[72:17] troops to the Middle East uh literally a
[72:19] day after yesterday Well, yesterday
[72:21] Donald Trump said, "We're not going to
[72:23] put troops on the ground, though maybe
[72:25] we won't tell you because uh you know,
[72:27] it could be part of the element of
[72:29] surprise."
[72:30] Keep in mind, numbers-wise, last week we
[72:33] initiated the sending of 2,200 Marines
[72:36] and 2,500 sailors to the Middle East
[72:38] from Japan. It's the USS Tripoli and the
[72:41] 31st Marine Expeditionary Unit. They're
[72:44] expected to show up at the end of next
[72:46] week, so around Friday, Saturday,
[72:48] Sunday, that's the 27th, 28th, 29th.
[72:51] Uh however, today we just announced that
[72:54] we were sending an additional 2,200 to
[72:56] 2,500 troops uh well, Marines via the
[72:59] USS Boxer Amphibious Ready Group and the
[73:02] 11th MEU to Central Command.
[73:06] This is coming at the same time as we're
[73:10] hearing rumors that the Trump
[73:12] administration might want to take over
[73:14] Kharg Island. We'll talk about that in
[73:15] just a moment. But, before we could do
[73:18] that, there are expectations that it
[73:20] could take upwards of a month to be
[73:23] ready to actually take over the island,
[73:25] which creates other problems, including
[73:28] Fed rate hikes. See, Saudi Arabia argues
[73:32] that if this oil shock goes into the
[73:34] middle of April, we'll probably see oil
[73:37] at $150 per barrel, which Goldman Sachs
[73:40] says is recessionary. If we end up
[73:43] getting towards the end of April, they
[73:45] see oil getting to $180
[73:48] per barrel. And unfortunately, these
[73:51] inflationary impetuses impetuses
[73:54] impetuses, whatever. Uh they are leading
[73:57] uh
[73:57] the broader bond market to now start
[74:00] pricing in rate hikes. Now, on Tuesday I
[74:04] made a video saying prepare for the
[74:06] potential of rate hikes, that Jerome
[74:08] Powell and the ECB would start talking
[74:10] about rate hikes.
[74:11] Unfortunately, both of them did in the
[74:15] days afterwards. The ECB yesterday
[74:18] talking about their uh base case seeing
[74:21] inflation up 0.7% above their previous
[74:24] 1.9 estimate, moving it up to about 2
[74:26] and 1/2%, which isn't great, somewhat
[74:29] leading to a potential for rate hikes.
[74:32] In fact, the European Central Bank said
[74:35] that they're going to start discussing
[74:36] rate hikes in their April meeting, but
[74:39] they probably wouldn't hike until in
[74:41] April. They'd probably wait until June,
[74:43] but that is now on the radar. So, the
[74:45] ECB is putting on the radar rate hikes.
[74:48] And now we have our futures markets
[74:50] indicating an over 30 Well, let's
[74:53] actually see here. Okay, well, it's
[74:55] gotten even worse here uh since I last
[74:57] updated this. October 28th, 2026
[75:01] is now showing about a 47%
[75:03] chance of rate hikes. Actually, if I
[75:06] could just add this together here, it'd
[75:07] be about 48.4% chance of rate hikes. All
[75:10] this on the right over here would be one
[75:12] rate hike and this right here would be a
[75:14] 10% chance of two rate hikes, so 50
[75:16] basis points of hikes by October.
[75:19] So again, this is what we warned about
[75:22] on Tuesday. And then a bunch of people
[75:24] got mad at me in the comments. They
[75:25] said, "No way, Kevin. There's no way."
[75:28] And I'm like, "Come on, folks. I like I
[75:30] study this a lot." Uh and unfortunately,
[75:33] and now the futures market is starting
[75:35] to price that in. Uh one place that
[75:37] you're seeing this manifest is actually
[75:39] a place that in the Alpha report this
[75:41] morning we said, "Listen,
[75:44] the only way the only way we go bullish
[75:47] on the Qs today." And this was blunt uh
[75:49] in the Alpha report, "is if Treasury
[75:51] yields come down because they were
[75:54] rising this morning." And I'm like,
[75:55] "This isn't good." Unfortunately,
[75:57] exactly the opposite happened in the
[76:00] Treasury market. Rather than yields
[76:01] coming down, we saw yields rise as the
[76:05] market is starting to price in rate
[76:06] hikes. That led the Nasdaq 100 to sell
[76:11] down off our opening at about 592 down
[76:14] to about 586. The S&P 500 uh not looking
[76:18] at the Qs there, but just looking at the
[76:20] S&P 500, uh is now trading below its
[76:24] 200-day moving average. Uh and JP Morgan
[76:28] warns that if we have any kind of
[76:31] sell-off below that 200-day moving
[76:33] average, which is what we're seeing
[76:35] right now, so in other words, we need to
[76:36] rebound to prevent this.
[76:38] JP Morgan says the S&P 500 is likely to
[76:42] not find support until the lower 6,000
[76:45] range. You can see that document right
[76:47] here that I was sent.
[76:49] If the S&P 500 sell-off gains momentum
[76:51] below the 200-day moving average at
[76:53] $6,600,
[76:55] strong support may not materialize until
[76:57] essentially an additional 10% correction
[76:59] down to the low 6,000 range.
[77:02] They're lowering their S&P 500 outlook
[77:04] for the rest of the year. They believe
[77:06] that higher oil prices can lead to
[77:08] demand destruction and ultimately
[77:11] increase the odds of recession, which is
[77:14] that R word that we don't want to hear
[77:16] about. Now, obviously, the concern is
[77:19] the longer this goes on, the greater the
[77:22] risk to the economy. Saudi Arabia, just
[77:26] to
[77:27] dive into this for a moment here,
[77:29] keeping also in mind that the oil shock
[77:31] that we've seen so far is already worse
[77:36] than what we saw in 2022
[77:39] when Russia invaded Ukraine. Obviously,
[77:41] the Gulf is more important for oil, is
[77:44] the previous all-time high for oil was
[77:46] $146
[77:48] per barrel in July of 2008, which
[77:51] happened right before the recession as
[77:53] Lehman Brothers collapsed in September
[77:56] thanks to the excesses related to the
[77:58] real estate market. Now, some people are
[78:00] saying history may not repeat, but it
[78:02] might rhyme that you could have excesses
[78:05] in private credit coincide with
[78:07] potentially new all-time highs for oil,
[78:10] highs that we've never seen before.
[78:12] There's an energy consulting firm here
[78:14] that says $200 a barrel is not out of
[78:17] the realm of possibility.
[78:19] Gulf futures tied to Oman crude, which
[78:23] are less liquid, are currently shooting
[78:25] past $166
[78:28] per barrel uh in futures pricing.
[78:31] Uh and we're starting to see options
[78:34] uh
[78:34] indicate more bullish bets on oil
[78:37] getting to about 130 to 140, which we
[78:40] weren't seeing uh about 2 weeks ago.
[78:43] Saudi officials say they expect that oil
[78:46] prices could hit $150
[78:49] if we get into the second week of April
[78:52] and the Strait of Hormuz is still
[78:53] closed.
[78:54] The problem is, in order to actually get
[78:57] the Strait of Hormuz to reopen, we're
[78:59] going to need more Marines. And that's
[79:02] exactly why the Pentagon is sending more
[79:04] Marines.
[79:05] Issue is, we're not expecting the first
[79:07] batch to show up until the end of next
[79:09] week, and the next batch, which is
[79:11] coming from uh California, could take
[79:13] even longer to show up, probably closer
[79:16] to that April 3rd, 4th, 5th weekend,
[79:18] which is after we get the next set of
[79:20] jobs data.
[79:21] Now, Trump is also thinking about taking
[79:24] over Kharg Island to force Iran as a
[79:27] leverage point to open up the strait
[79:28] because 90% of Iran's crude oil goes
[79:31] through here.
[79:32] However, military intelligence suggests,
[79:34] quote, "We need about 1 month to weaken
[79:38] the Iranians more with strikes to take
[79:40] the island and then get them by the
[79:42] balls and use it for negotiations." A
[79:45] source with knowledge of the White House
[79:47] thinking said.
[79:49] Now, the Wall Street Journal had a whole
[79:50] piece about how we could potentially
[79:53] escort tankers through
[79:56] the Strait of Hormuz, but the big risk
[79:59] that we face are that in this sort of
[80:01] fish bowl that you're in going through
[80:03] the strait where you've got these cliffs
[80:04] around you,
[80:06] the risk is that small ribs or smaller
[80:09] boats laden with explosives can just
[80:12] run out essentially or overwhelm by
[80:15] using multiple of them, overwhelm
[80:18] destroyers or escort ships that we use
[80:20] in the region, which is exactly why the
[80:23] Marine Expeditionary Unit is likely
[80:25] being sent to the region so you could
[80:26] line troops along the shore while ships
[80:30] pass through.
[80:32] Problem, obviously, with this is it
[80:34] really puts your troops under the risk
[80:36] of Iranian fire since Iran knows the
[80:39] more and longer they can keep this war
[80:40] going on, the more likely Iran spikes
[80:44] oil prices
[80:46] and as a result, the greater chance of a
[80:48] global recession, which unfortunately is
[80:51] exactly what Iran wants. They would love
[80:54] nothing more than to damage the global
[80:56] economy and then they could essentially
[80:58] take credit and say, "Hey,
[80:59] this is why you should never attack
[81:02] Iran." Now, Iran has sometimes also a
[81:05] self-destructing sort of ammo.
[81:08] The
[81:09] Iranian regime has executed more than
[81:11] 2,000 Iranians in 2025. That's the most
[81:14] that they've executed since 1989 and
[81:17] that's in addition to like the 6,000
[81:19] people that were killed in protests in
[81:21] December and January.
[81:23] Wall Street Journal is reporting that
[81:24] Hormuz escorts may begin once those
[81:28] amphibious units are in the region, but
[81:29] again, that's going to take 2 to 4 weeks
[81:32] to happen,
[81:33] which unfortunately aligns with this
[81:37] Saudi Arabia article in the Journal that
[81:40] indicates we're probably looking at 150
[81:43] to 180 a barrel
[81:46] not being out of the question and Brent
[81:49] futures that's currently hitting the
[81:51] 130, 40 and 150 level for April as it
[81:54] doesn't look like the war is coming
[81:56] anywhere close to to an end. This is
[81:58] obviously inflationary and it's exactly
[82:00] why we're starting to see markets price
[82:02] in rate hikes rather than cuts.
[82:06] Now, what you really ought to focus on
[82:08] today is not just the fact that Brent
[82:11] has now moved up another $2 up to about
[82:13] $110 per barrel from about the 108 where
[82:16] we started the day, but the real concern
[82:18] is the fact that the 10-year Treasury
[82:20] yield has moved from about 4.34%,
[82:23] which is like 10 basis points higher
[82:25] than what we had yesterday, up to now
[82:27] almost 4.4. We're sitting at 4.39.
[82:31] And the more pressure we see on the
[82:33] 10-year or the 2-year and the more of
[82:35] this sort of bearish yield curve
[82:37] flattening that we're getting, more
[82:39] pressure on private credit, which is
[82:41] that very similar rhyming ticking time
[82:43] bomb that we saw in 2008, except then
[82:46] again, it was real estate. Now, it's
[82:48] private credit. I actually think real
[82:50] estate is a unique hedge because my base
[82:53] case is that by 2032, whether it's
[82:56] because we have a recession in the near
[82:57] term or in the longer term, by 2032, I
[82:59] think rates will be lower than they've
[83:01] ever been before.
[83:02] I actually think we'll have lower
[83:04] mortgage rates than we had in 2020,
[83:07] which seems remarkable because during
[83:08] that panic, we cut rates to zero and
[83:10] people were, you know, including myself,
[83:12] were were getting loans at like 2.75%.
[83:15] I actually think by 2032, we'll see even
[83:17] lower rates, but that's just my opinion.
[83:19] That's just my speculation. It's one of
[83:20] the reasons why I think hedging by
[83:22] exposing yourself to real estate right
[83:23] now is is such a strong bet because
[83:26] that's not where the bubble sits now.
[83:29] Bubble sits elsewhere, but it's
[83:30] triggered potentially by again, rising
[83:33] inflationary concerns, rate hikes. This
[83:36] increase in the 10-year
[83:37] accelerates the pain in private credit,
[83:40] especially since a lot of businesses are
[83:42] zombie businesses that probably deserve
[83:45] to go bankrupt, but they're drowning in
[83:48] debt and rates are going up and not
[83:50] down. Now, just so you can understand
[83:52] what a bear flattening is, a bear
[83:54] flattening is when yields on both the
[83:56] 10-year and the 2-year are rising,
[83:59] which they are. The 2-year is up about
[84:01] 9.1%, the 10-year is up about or basis
[84:03] points, the 10-year is up about 10.7.
[84:06] We're almost at a four handle on the
[84:07] 2-year.
[84:09] That has been leading the 10-2 spread
[84:12] over the last few weeks to flatten down.
[84:15] You can see this sort of let's go to
[84:17] like the 3-month chart over here. You
[84:18] can see this fall over here from about
[84:20] .72 on that yield spread down.
[84:23] Usually, that going down is less of a
[84:25] sign of a recession risk, but it's
[84:27] bearish for the economy when it's
[84:29] occurring because rates are going up
[84:31] rather than down. You'd rather have a
[84:33] bull flattening where rates are going
[84:35] down because inflation concerns are
[84:36] going down and then you can actually
[84:38] encourage, ship and encourage
[84:40] risk-taking in the stock market or
[84:42] otherwise.
[84:45] Unfortunately, because that's the
[84:47] opposite of what's happening right now,
[84:49] we are seeing the Qs suffer, which is
[84:51] exactly what we expected in the Alpha
[84:52] report this morning. I hate to say it,
[84:54] but I gave a very blunt warning in the
[84:56] Alpha report this morning and I said
[84:58] that you should watch TLT. If TLT goes
[85:01] down, don't make an upside bet on the
[85:03] Qs. In fact, when we saw the Qs move up
[85:07] right here and we were live in our
[85:08] course member live stream, I said, "This
[85:11] may not be stable because we're not
[85:14] actually seeing yields
[85:16] come down. When yields go down, this
[85:18] line goes up." And so, we were able to
[85:20] use this as a canary to indicate,
[85:22] "Oopsie doopsies, not great."
[85:25] So, we've got a confluence of problems
[85:27] here.
[85:28] Troops are going to take time to show
[85:30] up. They create risk for American lives,
[85:33] but what we're indicating is even though
[85:35] Trump is saying, "Oh, yeah, we're not
[85:36] going to tell you if we put troops on
[85:38] the ground. Maybe we will, maybe we
[85:39] won't, but we're not going to tell you."
[85:41] And the timing elements that it's going
[85:44] to take two, probably to four weeks to
[85:46] actually get the situation,
[85:48] well, to get troops in the region,
[85:50] we're in a bit of a poopy-doopy place
[85:53] where we could actually see Brent crude,
[85:56] as Saudi Arabia puts it or UBS or
[85:59] others, that if this war continues into
[86:01] April, we're probably looking at
[86:03] substantially higher oil prices and that
[86:05] they've been suppressed so far under the
[86:07] belief that this war will end or this
[86:09] incursion will end much like Operation
[86:11] Midnight Hammer last year, 12-day war,
[86:14] will end in a short period of time, less
[86:17] than 30 days.
[86:18] Well, we're coming up on our 30-day
[86:20] anniversary next week of this war
[86:22] already and so far, there's no end in
[86:25] sight, which is bearish. If we get into
[86:29] April and this war is still going on,
[86:30] which at this point is likely, oil
[86:32] prices and Treasury yields continue to
[86:34] rise, we continue to price in rate
[86:35] hikes.
[86:36] Our bear-bull scale is going to continue
[86:38] to decline and the odds of recession,
[86:40] unfortunately, continue to rise. This is
[86:43] not ideal, but it is the latest of
[86:46] what's going on. Now, is it possible
[86:48] that the takeover of Kharg Island
[86:51] will end up forcing Iran to negotiate?
[86:55] Maybe. That's the hope. We take over the
[86:58] island, it squeezes 90% of their, you
[87:00] know, their oil production and hopefully
[87:03] that encourages Iran to negotiate. The
[87:05] problem is
[87:06] not only is it hard to do this, whether
[87:09] you commando raid the island or you have
[87:11] a naval blockade or whatever,
[87:13] the problem is not just the American
[87:15] lives that could be lost in this, but
[87:17] the problem is also that it may not
[87:19] work. You could take over Kharg Island.
[87:21] You could destroy Kharg Island and Iran
[87:24] may not want to negotiate and enable the
[87:26] reopening of the strait
[87:28] because Iran knows the longer this war
[87:29] goes on, the more the global economy is
[87:32] damaged.
[87:33] And if we end up triggering a nasty
[87:35] recession that Iran can claim claim
[87:37] credit for and say, "Look, you might
[87:39] have better bombs and a better military,
[87:41] but we destroyed your economy.
[87:44] Don't mess with Iran in the future."
[87:46] that Iran
[87:48] takes home a pretty big win.
[87:50] It hurts the global economy, so it's
[87:52] sort of like, you know, ripping off your
[87:53] nose despite your face because, you
[87:55] know, Iran will have a nasty recession
[87:56] as well. But,
[87:59] it sucks for everyone.
[88:01] Anyway, that's my take today. Appreciate
[88:03] you all watching and we'll see you all
[88:05] in the next time. Goodbye and good luck.