Stock Market Falls as Treasury Yields Surge and Rate Hike Fears Grow

[00:03] Well, well, well, well, here we go. Here

[00:07] we go. Another day, another down way to

[00:12] lose money in the stock market. It is

[00:15] disappointing. It is depressing.

[00:18] But this is like the perfect time to

[00:20] shamelessly shill real estate. It not

[00:23] that I'm selling you real estate or

[00:24] anything, but I I do want people to just

[00:27] for a moment

[00:28] think about real estate and a benefit

[00:30] for a moment for real estate.

[00:33] One thing that real estate, especially

[00:35] low debt real estate does for you in

[00:37] this environment we're in.

[00:40] Lower debt the better, okay? Cuz debts

[00:42] obviously, you know, mortgage rates are

[00:44] up right now. They've they've been up

[00:45] for I mean, since this war started, it's

[00:47] been like straight up. Totally the

[00:49] opposite of what Donald Trump wanted.

[00:51] But one thing that real estate does is

[00:53] it diversifies you away from the

[00:55] short-term insanity, geopolitical hits,

[00:58] oil, you get the short-term

[01:01] you you get insulated away from that.

[01:03] And in the event this lasts long enough

[01:06] to where we trigger some form of a

[01:07] recession,

[01:08] you end up having a piggy bank that you

[01:10] could pull money out of.

[01:12] Money that you've allocated to real

[01:14] estate, which makes it hard for it to

[01:17] evaporate in the stock market. Uh but it

[01:19] makes it easy to leverage against

[01:22] in a recession when rates go to zero,

[01:25] because that's what they will do. Rates

[01:27] will go to zero.

[01:28] That'll be one of the first things the

[01:30] Fed does

[01:31] in the event we end up striking some

[01:33] form of recession, depending on how

[01:34] obviously long this this conflict lasts.

[01:37] So, there is a a desirability of

[01:39] diversifying real estate. Even though

[01:40] real estate has kind of like,

[01:42] you know, it's it it's in some areas is

[01:46] actually up since 2022, which is great.

[01:48] You know, especially those lower built

[01:50] areas. But something that you have to

[01:52] think about with real estate is

[01:54] nobody's really cared about real estate

[01:56] the last 4 years because rates have been

[01:58] high.

[01:59] It's it I think it's been this perfect

[02:02] opportunity to accumulate. And I think

[02:05] that will continue until rates come

[02:06] down. Now, my

[02:08] base case is that rates will be lower

[02:10] than they've ever been before by 2032.

[02:13] I don't know if that's going to be

[02:15] because of a recession or just because

[02:18] of the deflation of artificial

[02:19] intelligence that ends up arriving along

[02:22] with, you know, getting through a

[02:23] transitory transitory transitory

[02:25] transitory.

[02:26] Uh it will probably take a lot longer

[02:28] than the

[02:29] 5-year game we've played so far.

[02:31] It will probably take in in the order of

[02:34] a decade, which is why I made the

[02:36] estimate

[02:38] in 2032. I've been saying it for the

[02:39] last 4 years. Those of you have been

[02:42] here for the last 4 years, you know I've

[02:44] been saying this.

[02:45] Uh but the last 4 years, my call has

[02:48] been rates will be lower by 2032.

[02:52] Um could be before that, but you know,

[02:54] the call is buy.

[02:56] Uh which which which which in my opinion

[02:59] creates this sort of 10-year window

[03:02] to buy real estate between 2022 and

[03:06] 2032.

[03:07] Because then you go refinance

[03:10] you know, super low rates, lower than

[03:12] obviously your your cap rates, what

[03:14] you're earning on rent. You know, so

[03:17] house hack is knocking on the door of

[03:19] about 100 in assets.

[03:22] And if you end up taking that and

[03:25] refinancing it, let's say you had to

[03:27] refinance it tomorrow, uh and that

[03:29] represented 35%.

[03:31] You know, you could you could basically

[03:33] leverage a portfolio up to almost $300

[03:36] million.

[03:36] Which is crazy. Uh so creates a lot of a

[03:41] lot of buying power is is the point.

[03:44] Uh real estate's easy to leverage

[03:46] against

[03:47] and harder to it takes more time, you

[03:50] know, it's certainly easier to leverage

[03:51] against than um

[03:53] than stocks. Or sorry, harder to

[03:55] leverage against the stocks. But um

[03:59] in my opinion it contains less So,

[04:03] I'm now getting a a read here that

[04:04] there's now some pricing of a rate hike

[04:09] by October.

[04:10] Uh let's go take a look at that.

[04:13] The

[04:14] Treasury market is really selling off

[04:18] leading bonds to really rocket today on

[04:21] a yield basis, which is very very

[04:24] bearish for the stock market. The bear

[04:26] flattener is continuing. I've got 9.3

[04:30] basis points on the two-year. The

[04:32] two-year is almost at 4%.

[04:36] And if you look at the 10-year Treasury,

[04:38] we're up about 69 basis points here or

[04:41] 6.9 basis points. We're up at 4.35,

[04:46] which is really high. Here, let me show

[04:49] you you know, something you know,

[04:50] attractive in the meantime just to try

[04:52] to like to like relax the pain of what

[04:55] you just saw. You just saw the 10-year

[04:57] at 4.35.

[04:59] That's painful to the eyes. You need

[05:01] something better. All right, good. So,

[05:04] um it's not a surprise that as

[05:08] yields on bonds have risen over the last

[05:12] 33 minutes that the market has been

[05:14] open, then the market's been selling

[05:16] off. In fact, that's as usual, but I

[05:19] mean, we're not always right, but that's

[05:21] exactly what we flagged in the Alpha

[05:23] report this morning. That this canary in

[05:25] the coal mine today is not oil, it's

[05:27] actually the Treasury market. And sure

[05:30] enough, that's exactly what happened.

[05:33] The canary in the coal mine said, "No,

[05:35] no, no, no. Don't trust the bounce

[05:37] because the Qs had a little bounce right

[05:39] here, right?" But look, there is no

[05:42] bounce

[05:43] in the bond market at all. And then the

[05:46] bond market fell off a cliff,

[05:48] uh which suggested this was not a

[05:50] durable bounce.

[05:51] And so you really need yields to come

[05:53] down.

[05:54] Unfortunately, as as yields continue to

[05:56] rise, you are seeing Tesla come under

[05:58] pressure. Tesla is considered a

[06:00] rate-sensitive stock.

[06:02] Uh that is because people finance

[06:04] vehicles with you know, with Tesla. Now,

[06:07] Tesla also buys down loans, but the more

[06:10] yields go up, the more they have to pay

[06:13] to buy down loans to, you know, levels

[06:16] that are attractive.

[06:19] If we go to

[06:22] let's see what we got here. Model 3,

[06:24] Model Y,

[06:26] Cybertruck. And they're phasing out

[06:28] obviously the three or the S and the X,

[06:30] which is disappointing. But

[06:33] here they're pitching lease. What if I

[06:36] go to buy? Let's just take a peek. So,

[06:38] if I go to finance,

[06:41] they're doing 6.29

[06:43] on a Model 3. That's not attractive.

[06:46] Uh okay, what about over here? Let's

[06:48] just load all the order now pages.

[06:52] Ah, on the ones they're deprecating,

[06:55] they're only buying you down to 3.99 on

[06:58] the S and X. Since rates are going up,

[07:01] it's getting expensive, right? On the

[07:03] Cybertruck,

[07:05] they are also getting you down to 3.99.

[07:09] And on the Model Y, they're pulling you

[07:11] to actually 0%. Wow. Uh probably more

[07:15] inventory build-up over here on the Y or

[07:18] they're just trying to,

[07:19] you know, encourage Model 3 buyers to

[07:22] get the Model Y instead because there's

[07:24] more profit in the Model Y than there is

[07:26] in the Model 3.

[07:28] That sounds reasonable to me. Uh but

[07:31] again, as yields go up, it it's going to

[07:33] get more expensive for Tesla as well,

[07:35] which is unfortunate.

[07:37] Uh it gets more expensive for everyone,

[07:39] whether it's private credit or or what

[07:41] it what it could be. So, okay.

[07:45] Great. So, let's go take a peek well,

[07:48] how much of Tesla's valuation is based

[07:50] on the car? Yeah, well, that's but

[07:51] that's the problem. You know, it's maybe

[07:56] 150 bucks of the company's valuation is

[07:59] actually the car business, probably even

[08:01] less.

[08:03] Uh so, what you're really talking about

[08:05] is

[08:06] enthusiasm around robo-taxi and Optimus.

[08:11] But the problem is anytime a company

[08:13] trades off of, you know, a large portion

[08:16] of the business trades off of enthusiasm

[08:18] for a future product,

[08:20] that future product invariably takes

[08:22] longer to create or to provide updates

[08:25] on or to make progress on because that's

[08:28] that's just the nature of building. The

[08:30] things take longer than you anticipate.

[08:33] And so as, you know, new future updates

[08:36] are further uh and fewer between, you

[08:39] end up with uh

[08:41] you know, more bearishness in in the

[08:44] asset. So, it's unfortunate,

[08:48] but we'll see. Hopefully we can settle

[08:50] out here.

[08:52] I'm still not seeing the Treasury market

[08:53] bounce, but I am seeing about a 5-minute

[08:55] green candle set here on the Qs, which

[08:58] is good. Uh but let's see how durable it

[09:00] is given that again, we're we're not

[09:02] seeing any kind of move on the Treasury

[09:05] market to indicate that yields are

[09:07] relaxing. Instead, you know, there's now

[09:10] talk that markets are slowly starting to

[09:14] price in an interest rate uh hike, which

[09:17] is exactly what I warned about on

[09:19] Tuesday, and people made fun of me for

[09:21] that. They're like, "Oh, this is

[09:23] ridiculous, Kevin. This is ridiculous,

[09:25] Kevin." And then sure enough, you know,

[09:26] they hinted at a hike.

[09:28] You know, really, and we're talking with

[09:30] course members about this earlier, but

[09:32] this signals that markets are pricing in

[09:35] at least a 25 basis point hike, maybe

[09:38] even a 50.

[09:40] Let's go Oh, here we go. Here is the

[09:43] Reuters headline. Wow, that came in like

[09:46] substantially later than than I've seen

[09:48] at other sources here, but US to deploy

[09:50] thousands of additional troops to the

[09:52] Middle East, three US officials tell

[09:54] Reuters.

[09:57] 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.

[1:00:04] Okay.

[1:00:07] "We firmly believe in strengthening the

[1:00:09] relationship with our neighbor

[1:00:10] countries", says the Iranian leader.

[1:00:12] Yeah, how's that going? By attacking

[1:00:14] everyone.

[1:00:16] More attacks reported in the Middle

[1:00:18] East. Of course, they're still attacking

[1:00:20] each other.

[1:00:26] US military ramps up to clear the

[1:00:27] strait.

[1:00:29] Yeah, we'll see how that goes.

[1:00:41] Mhm.

[1:00:45] Iran executes three men.

[1:00:48] Including star teenage wrestler.

[1:00:51] I wonder why they got executed.

[1:01:01] Uh, we talked about the Fed. Okay, let's

[1:01:03] go see.

[1:01:05] So here

[1:01:08] Oh, what? Protest? Three men were

[1:01:09] executed by hanging in Iran on Thursday

[1:01:11] as they were convicted of killing two

[1:01:13] police officers during government

[1:01:14] protest.

[1:01:16] Yikes.

[1:01:17] One of the men was a decorated

[1:01:19] 19-year-old wrestler.

[1:01:21] The groups raised concerns about his

[1:01:22] execution pointing to the fast track

[1:01:25] trial

[1:01:27] uh, and a forced confession.

[1:01:29] Wow.

[1:01:36] They were convicted of waging war

[1:01:37] against God. A charge that is punishable

[1:01:40] by death. And they uh, what the Iranians

[1:01:43] usually use to punish dissidents.

[1:01:50] Uh, Iranian authorities regularly

[1:01:52] extract forced confessions from

[1:01:54] defendants through pressure tactics

[1:01:55] including solitary confinement, threats

[1:01:57] against family members, and torture.

[1:01:59] Wow.

[1:02:00] Yikes.

[1:02:02] Iran executed more than 2,000 people in

[1:02:04] 2025, the most since 1989.

[1:02:09] That's a stat.

[1:02:10] So,

[1:02:12] Iran executions.

[1:02:14] 2,000.

[1:02:16] More than more than 2,000 Iranians

[1:02:19] executed most since 1989.

[1:02:27] Uh, and then of course, I mean you had

[1:02:29] even more people die during the protest.

[1:02:35] Wow.

[1:02:40] Okay. Then, US military ramps up to

[1:02:43] clear Hormuz. We saw that.

[1:02:46] This is Oh, this is just the A-10 and

[1:02:48] Apache talk.

[1:02:50] Okay, so that's nothing new.

[1:02:52] Biggest thing today is that 10-year just

[1:02:54] keeps going.

[1:02:56] Almost at 4.38 now.

[1:03:00] Private credit

[1:03:02] risk cycle has not been repealed. What

[1:03:04] is this?

[1:03:07] Concerns about private credit in recent

[1:03:09] weeks should serve as a reminder to

[1:03:10] investors that the credit cycle has not

[1:03:12] been repealed.

[1:03:14] What does that mean? The unusually long

[1:03:15] period of cheap borrowing

[1:03:17] following this 2008

[1:03:19] financial crisis. But worries about the

[1:03:21] credit cycle could

[1:03:23] be about to turn to the

[1:03:27] due for about to turn due to the private

[1:03:29] credit's exposure to tech companies.

[1:03:31] Uh-huh.

[1:03:32] Uh, in his annual letter, Solomon said

[1:03:34] the investment bank was optimistic about

[1:03:35] the operating environment but cautioned

[1:03:37] that it was not hard to come up with

[1:03:39] scenarios where risks are a lot more

[1:03:41] pronounced.

[1:03:43] Okay.

[1:03:46] In recent weeks, for example, concerns

[1:03:47] about private credit including

[1:03:48] underwriting quality or exposure to

[1:03:50] software companies

[1:03:52] that may be adversely affected by AI are

[1:03:53] a reminder that the credit cycle has not

[1:03:55] been repealed. So, in other words, like

[1:03:58] a down cycle is still possible.

[1:04:01] And then of course, Iran has the

[1:04:02] potential

[1:04:04] uh, let's see here.

[1:04:09] Oh, despite concerns, there's still the

[1:04:11] potential for a more constructive

[1:04:13] environment. Yeah, okay, whatever. This

[1:04:15] is boring.

[1:04:17] Okey-dokey. Crazy yields right there.

[1:04:20] So, what do we get over here?

[1:04:23] Could the US release more of its

[1:04:25] strategic oil?

[1:04:27] Let's see.

[1:04:31] Basson also pointed to 400 billion

[1:04:33] release of the strategic oil reserve

[1:04:36] approved last week.

[1:04:39] Largest coordinated release in history.

[1:04:48] Huh. The US oil reserve is a series of

[1:04:52] vast subterranean salt caverns

[1:04:56] in four different sites in Louisiana and

[1:04:57] Texas. Oh, that's very interesting.

[1:05:01] The average cavern holds 10 million

[1:05:03] barrels. Wow.

[1:05:05] That's crazy.

[1:05:13] Huh.

[1:05:18] All right. What else?

[1:05:20] US could declare an emergency.

[1:05:23] Blah blah blah.

[1:05:25] Drawdown of the strategic oil reserve.

[1:05:27] Blahdy, blahdy, blahdy. Okay. Well, it

[1:05:29] seems like we should have probably

[1:05:31] filled that up before going to war.

[1:05:34] Sometimes I wonder

[1:05:36] if they just kind of forget about it for

[1:05:37] a moment.

[1:05:42] Okay, IEA is now warning

[1:05:45] that it could take 6 months or longer to

[1:05:46] fully restore oil supplies.

[1:05:49] Well, that's not great.

[1:05:55] So, that's the IEA.

[1:06:00] Warns

[1:06:02] it could take 6 months or more

[1:06:05] to fully restore

[1:06:07] oil and gas

[1:06:09] flows.

[1:06:11] That is not good.

[1:06:15] Let's see uh

[1:06:17] Okay.

[1:06:24] Take a listen to it over here for a

[1:06:25] moment. Yeah, this is definitely a

[1:06:27] refined products product story because

[1:06:29] you could have all the oil in the world,

[1:06:30] but if you can't turn it into the end

[1:06:31] product you need, it is useless. And we

[1:06:34] talked about how some of those uh oil

[1:06:36] fields may not come fully back online.

[1:06:37] If you shut down a refinery, it takes,

[1:06:40] you know, we're talking about months to

[1:06:41] get that back online.

[1:06:42] >> exactly what the IEA is talking about in

[1:06:44] in this article here.

[1:06:45] >> That's what a refinery complex is. And

[1:06:47] the fact is that as they start reducing

[1:06:50] runs, those markets are going to get

[1:06:51] even tighter. And we look at things

[1:06:53] like, you know, production being uh

[1:06:55] diverted to Yanbu and Fujairah. That's

[1:06:57] not the oil we need. That is Arab light

[1:06:59] oil. What we really need is medium and

[1:07:01] sour grade oil. This is really a a kind

[1:07:04] of a crisis for the middle of the

[1:07:05] barrel. That's why we're seeing diesel

[1:07:07] prices, jet fuel both hitting records

[1:07:09] over in Europe. In the US, we produce

[1:07:11] jet fuel A which can't be used in Europe

[1:07:13] because of uh uh carbon restrictions.

[1:07:15] And so, this is really a refined product

[1:07:17] story. And these these uh these these

[1:07:19] supply chains are so global and so

[1:07:21] intricate. And so, each passing day is

[1:07:23] making those product markets even

[1:07:24] tighter.

[1:07:25] Wow, that was that was a lesson. So, we

[1:07:27] need medium and light.

[1:07:28] We we need medium and sour. We have a

[1:07:30] lot of

[1:07:31] Yeah, yeah. So, the Arab light is being

[1:07:33] what's with Boring. Okay. Axios. Let's

[1:07:36] see if there's anything new in this

[1:07:37] piece.

[1:07:38] So, Axios here says Trump will's Kharg

[1:07:41] Island takeover.

[1:07:43] We we heard this yesterday, but I want

[1:07:45] to see if there was any

[1:07:46] additional information here.

[1:07:50] Process is 90% of Iran's crude.

[1:07:54] Could put troops in the line of fire.

[1:07:59] Within a month We need about a month to

[1:08:01] weaken the Iranians more with strikes to

[1:08:03] take the island and then get them by the

[1:08:05] balls and use it for negotiations. A

[1:08:07] source with knowledge of White House

[1:08:09] thinking.

[1:08:10] Ugh.

[1:08:11] You need an additional month.

[1:08:14] You know, that's that's exactly what uh

[1:08:17] Saudi Arabia Yeah, Saudi Arabia was

[1:08:19] concerned about if we look at

[1:08:23] this. Saudi Arabia sees a spike to $180

[1:08:27] a um

[1:08:28] a barrel of oil.

[1:08:33] President is going to do what's right.

[1:08:35] No decision has been made.

[1:08:38] We want Hormuz open.

[1:08:42] Tom Cotton says Trump has been prudent

[1:08:44] to not rule out

[1:08:47] a ground invasion. Oh.

[1:08:49] Okay.

[1:08:55] Mhm.

[1:08:57] Says Trump's mission could expose US

[1:08:59] troops to a degree of risk.

[1:09:05] Behind the scenes.

[1:09:06] Sources said an occupation of the island

[1:09:08] by ground troops is under serious

[1:09:10] consideration. Another option is to

[1:09:12] impose a naval blockade.

[1:09:18] Hey, so you could do both.

[1:09:20] Geez.

[1:09:22] All right.

[1:09:25] How are we doing over here?

[1:09:27] So, nope. Qs keep selling down.

[1:09:31] So lower lower lower.

[1:09:33] Painful.

[1:09:35] Yeah, down what? What Tesla's down 1.8,

[1:09:37] Meta's down 2.2.

[1:09:41] Just the bleed continues.

[1:09:46] All right, let's do a little bit of uh

[1:09:49] a recap of some of the uh info that

[1:09:51] we've got so far, especially with this

[1:09:52] uh

[1:09:53] troop deployment.

[1:09:55] Uh hold on. What is Let me see if

[1:09:56] they've got anything here for a moment.

[1:09:58] Things like know your customer, sales

[1:10:00] processes, and the like. They didn't

[1:10:02] mention anything in terms of like the

[1:10:04] kind of bread-and-butter investment

[1:10:05] banking and how that's going to really

[1:10:06] reshape what you envision as an employee

[1:10:08] of Goldman Sachs at this point in time.

[1:10:10] Right now, it's more of back at Okay,

[1:10:12] that's boring.

[1:10:14] Let's try over here.

[1:10:19] or ongoing, depending on your point of

[1:10:20] view, uh chip and AI war between the

[1:10:23] United States and China. This is a

[1:10:24] multi- front This is in part probably

[1:10:26] about Super Micro, which has been

[1:10:28] selling off because of the risk that,

[1:10:30] you know, somebody who owns like 25% of

[1:10:32] the shares of Super Micro

[1:10:34] was involved in selling Nvidia chips to

[1:10:37] China uh against the law. like whether

[1:10:39] or not it was a single actor. The point

[1:10:41] is this is one of

[1:10:43] you know, several cases um where we've

[1:10:45] had to have a good hard look at at, you

[1:10:48] know, chips between the US and and

[1:10:49] China.

[1:10:51] Amy, this past weekend you gave a

[1:10:52] keynote at South by Southwest and you

[1:10:55] announced that after 18 years you're

[1:10:58] killing your tech trends report and

[1:11:00] you've basically uh and I

[1:11:02] correct me in my my summary said that

[1:11:04] there's no point uh in in looking at

[1:11:07] backward uh looking data and trends. You

[1:11:09] now have a convergence outlook uh in the

[1:11:13] time we have left, about 60 seconds,

[1:11:15] explain it to us.

[1:11:17] Sure, we we did throw a funeral this

[1:11:19] weekend for the thing that we were most

[1:11:20] famous for. Uh look, executives are very

[1:11:23] caught up in what is trendy versus what

[1:11:25] are the longitudinal changes impacting

[1:11:28] their organizations, their the market,

[1:11:30] their ability to compete. Rather than

[1:11:32] tracking individual trends, it's

[1:11:34] incredibly important that they start

[1:11:36] looking at the intersection between

[1:11:38] trends and uncertainties and catalysts.

[1:11:40] Those are called convergences. Every

[1:11:43] boardroom, every leader needs to start

[1:11:45] tracking those seriously because the

[1:11:47] fate of their ability to survive and

[1:11:49] weather the storms that are ahead are

[1:11:51] dependent on having that information at

[1:11:52] their fingertips.

[1:11:54] Amy Webb, CEO of Future Today's

[1:11:56] >> Yeah, that was also kind of boring. All

[1:11:58] right, let's go through this.

[1:12:02] Uh okay.

[1:12:10] All right.

[1:12:15] Well, Donald Trump is now sending more

[1:12:17] troops to the Middle East uh literally a

[1:12:19] day after yesterday Well, yesterday

[1:12:21] Donald Trump said, "We're not going to

[1:12:23] put troops on the ground, though maybe

[1:12:25] we won't tell you because uh you know,

[1:12:27] it could be part of the element of

[1:12:29] surprise."

[1:12:30] Keep in mind, numbers-wise, last week we

[1:12:33] initiated the sending of 2,200 Marines

[1:12:36] and 2,500 sailors to the Middle East

[1:12:38] from Japan. It's the USS Tripoli and the

[1:12:41] 31st Marine Expeditionary Unit. They're

[1:12:44] expected to show up at the end of next

[1:12:46] week, so around Friday, Saturday,

[1:12:48] Sunday, that's the 27th, 28th, 29th.

[1:12:51] Uh however, today we just announced that

[1:12:54] we were sending an additional 2,200 to

[1:12:56] 2,500 troops uh well, Marines via the

[1:12:59] USS Boxer Amphibious Ready Group and the

[1:13:02] 11th MEU to Central Command.

[1:13:06] This is coming at the same time as we're

[1:13:10] hearing rumors that the Trump

[1:13:12] administration might want to take over

[1:13:14] Kharg Island. We'll talk about that in

[1:13:15] just a moment. But, before we could do

[1:13:18] that, there are expectations that it

[1:13:20] could take upwards of a month to be

[1:13:23] ready to actually take over the island,

[1:13:25] which creates other problems, including

[1:13:28] Fed rate hikes. See, Saudi Arabia argues

[1:13:32] that if this oil shock goes into the

[1:13:34] middle of April, we'll probably see oil

[1:13:37] at $150 per barrel, which Goldman Sachs

[1:13:40] says is recessionary. If we end up

[1:13:43] getting towards the end of April, they

[1:13:45] see oil getting to $180

[1:13:48] per barrel. And unfortunately, these

[1:13:51] inflationary impetuses impetuses

[1:13:54] impetuses, whatever. Uh they are leading

[1:13:57] uh

[1:13:57] the broader bond market to now start

[1:14:00] pricing in rate hikes. Now, on Tuesday I

[1:14:04] made a video saying prepare for the

[1:14:06] potential of rate hikes, that Jerome

[1:14:08] Powell and the ECB would start talking

[1:14:10] about rate hikes.

[1:14:11] Unfortunately, both of them did in the

[1:14:15] days afterwards. The ECB yesterday

[1:14:18] talking about their uh base case seeing

[1:14:21] inflation up 0.7% above their previous

[1:14:24] 1.9 estimate, moving it up to about 2

[1:14:26] and 1/2%, which isn't great, somewhat

[1:14:29] leading to a potential for rate hikes.

[1:14:32] In fact, the European Central Bank said

[1:14:35] that they're going to start discussing

[1:14:36] rate hikes in their April meeting, but

[1:14:39] they probably wouldn't hike until in

[1:14:41] April. They'd probably wait until June,

[1:14:43] but that is now on the radar. So, the

[1:14:45] ECB is putting on the radar rate hikes.

[1:14:48] And now we have our futures markets

[1:14:50] indicating an over 30 Well, let's

[1:14:53] actually see here. Okay, well, it's

[1:14:55] gotten even worse here uh since I last

[1:14:57] updated this. October 28th, 2026

[1:15:01] is now showing about a 47%

[1:15:03] chance of rate hikes. Actually, if I

[1:15:06] could just add this together here, it'd

[1:15:07] be about 48.4% chance of rate hikes. All

[1:15:10] this on the right over here would be one

[1:15:12] rate hike and this right here would be a

[1:15:14] 10% chance of two rate hikes, so 50

[1:15:16] basis points of hikes by October.

[1:15:19] So again, this is what we warned about

[1:15:22] on Tuesday. And then a bunch of people

[1:15:24] got mad at me in the comments. They

[1:15:25] said, "No way, Kevin. There's no way."

[1:15:28] And I'm like, "Come on, folks. I like I

[1:15:30] study this a lot." Uh and unfortunately,

[1:15:33] and now the futures market is starting

[1:15:35] to price that in. Uh one place that

[1:15:37] you're seeing this manifest is actually

[1:15:39] a place that in the Alpha report this

[1:15:41] morning we said, "Listen,

[1:15:44] the only way the only way we go bullish

[1:15:47] on the Qs today." And this was blunt uh

[1:15:49] in the Alpha report, "is if Treasury

[1:15:51] yields come down because they were

[1:15:54] rising this morning." And I'm like,

[1:15:55] "This isn't good." Unfortunately,

[1:15:57] exactly the opposite happened in the

[1:16:00] Treasury market. Rather than yields

[1:16:01] coming down, we saw yields rise as the

[1:16:05] market is starting to price in rate

[1:16:06] hikes. That led the Nasdaq 100 to sell

[1:16:11] down off our opening at about 592 down

[1:16:14] to about 586. The S&P 500 uh not looking

[1:16:18] at the Qs there, but just looking at the

[1:16:20] S&P 500, uh is now trading below its

[1:16:24] 200-day moving average. Uh and JP Morgan

[1:16:28] warns that if we have any kind of

[1:16:31] sell-off below that 200-day moving

[1:16:33] average, which is what we're seeing

[1:16:35] right now, so in other words, we need to

[1:16:36] rebound to prevent this.

[1:16:38] JP Morgan says the S&P 500 is likely to

[1:16:42] not find support until the lower 6,000

[1:16:45] range. You can see that document right

[1:16:47] here that I was sent.

[1:16:49] If the S&P 500 sell-off gains momentum

[1:16:51] below the 200-day moving average at

[1:16:53] $6,600,

[1:16:55] strong support may not materialize until

[1:16:57] essentially an additional 10% correction

[1:16:59] down to the low 6,000 range.

[1:17:02] They're lowering their S&P 500 outlook

[1:17:04] for the rest of the year. They believe

[1:17:06] that higher oil prices can lead to

[1:17:08] demand destruction and ultimately

[1:17:11] increase the odds of recession, which is

[1:17:14] that R word that we don't want to hear

[1:17:16] about. Now, obviously, the concern is

[1:17:19] the longer this goes on, the greater the

[1:17:22] risk to the economy. Saudi Arabia, just

[1:17:26] to

[1:17:27] dive into this for a moment here,

[1:17:29] keeping also in mind that the oil shock

[1:17:31] that we've seen so far is already worse

[1:17:36] than what we saw in 2022

[1:17:39] when Russia invaded Ukraine. Obviously,

[1:17:41] the Gulf is more important for oil, is

[1:17:44] the previous all-time high for oil was

[1:17:46] $146

[1:17:48] per barrel in July of 2008, which

[1:17:51] happened right before the recession as

[1:17:53] Lehman Brothers collapsed in September

[1:17:56] thanks to the excesses related to the

[1:17:58] real estate market. Now, some people are

[1:18:00] saying history may not repeat, but it

[1:18:02] might rhyme that you could have excesses

[1:18:05] in private credit coincide with

[1:18:07] potentially new all-time highs for oil,

[1:18:10] highs that we've never seen before.

[1:18:12] There's an energy consulting firm here

[1:18:14] that says $200 a barrel is not out of

[1:18:17] the realm of possibility.

[1:18:19] Gulf futures tied to Oman crude, which

[1:18:23] are less liquid, are currently shooting

[1:18:25] past $166

[1:18:28] per barrel uh in futures pricing.

[1:18:31] Uh and we're starting to see options

[1:18:34] uh

[1:18:34] indicate more bullish bets on oil

[1:18:37] getting to about 130 to 140, which we

[1:18:40] weren't seeing uh about 2 weeks ago.

[1:18:43] Saudi officials say they expect that oil

[1:18:46] prices could hit $150

[1:18:49] if we get into the second week of April

[1:18:52] and the Strait of Hormuz is still

[1:18:53] closed.

[1:18:54] The problem is, in order to actually get

[1:18:57] the Strait of Hormuz to reopen, we're

[1:18:59] going to need more Marines. And that's

[1:19:02] exactly why the Pentagon is sending more

[1:19:04] Marines.

[1:19:05] Issue is, we're not expecting the first

[1:19:07] batch to show up until the end of next

[1:19:09] week, and the next batch, which is

[1:19:11] coming from uh California, could take

[1:19:13] even longer to show up, probably closer

[1:19:16] to that April 3rd, 4th, 5th weekend,

[1:19:18] which is after we get the next set of

[1:19:20] jobs data.

[1:19:21] Now, Trump is also thinking about taking

[1:19:24] over Kharg Island to force Iran as a

[1:19:27] leverage point to open up the strait

[1:19:28] because 90% of Iran's crude oil goes

[1:19:31] through here.

[1:19:32] However, military intelligence suggests,

[1:19:34] quote, "We need about 1 month to weaken

[1:19:38] the Iranians more with strikes to take

[1:19:40] the island and then get them by the

[1:19:42] balls and use it for negotiations." A

[1:19:45] source with knowledge of the White House

[1:19:47] thinking said.

[1:19:49] Now, the Wall Street Journal had a whole

[1:19:50] piece about how we could potentially

[1:19:53] escort tankers through

[1:19:56] the Strait of Hormuz, but the big risk

[1:19:59] that we face are that in this sort of

[1:20:01] fish bowl that you're in going through

[1:20:03] the strait where you've got these cliffs

[1:20:04] around you,

[1:20:06] the risk is that small ribs or smaller

[1:20:09] boats laden with explosives can just

[1:20:12] run out essentially or overwhelm by

[1:20:15] using multiple of them, overwhelm

[1:20:18] destroyers or escort ships that we use

[1:20:20] in the region, which is exactly why the

[1:20:23] Marine Expeditionary Unit is likely

[1:20:25] being sent to the region so you could

[1:20:26] line troops along the shore while ships

[1:20:30] pass through.

[1:20:32] Problem, obviously, with this is it

[1:20:34] really puts your troops under the risk

[1:20:36] of Iranian fire since Iran knows the

[1:20:39] more and longer they can keep this war

[1:20:40] going on, the more likely Iran spikes

[1:20:44] oil prices

[1:20:46] and as a result, the greater chance of a

[1:20:48] global recession, which unfortunately is

[1:20:51] exactly what Iran wants. They would love

[1:20:54] nothing more than to damage the global

[1:20:56] economy and then they could essentially

[1:20:58] take credit and say, "Hey,

[1:20:59] this is why you should never attack

[1:21:02] Iran." Now, Iran has sometimes also a

[1:21:05] self-destructing sort of ammo.

[1:21:08] The

[1:21:09] Iranian regime has executed more than

[1:21:11] 2,000 Iranians in 2025. That's the most

[1:21:14] that they've executed since 1989 and

[1:21:17] that's in addition to like the 6,000

[1:21:19] people that were killed in protests in

[1:21:21] December and January.

[1:21:23] Wall Street Journal is reporting that

[1:21:24] Hormuz escorts may begin once those

[1:21:28] amphibious units are in the region, but

[1:21:29] again, that's going to take 2 to 4 weeks

[1:21:32] to happen,

[1:21:33] which unfortunately aligns with this

[1:21:37] Saudi Arabia article in the Journal that

[1:21:40] indicates we're probably looking at 150

[1:21:43] to 180 a barrel

[1:21:46] not being out of the question and Brent

[1:21:49] futures that's currently hitting the

[1:21:51] 130, 40 and 150 level for April as it

[1:21:54] doesn't look like the war is coming

[1:21:56] anywhere close to to an end. This is

[1:21:58] obviously inflationary and it's exactly

[1:22:00] why we're starting to see markets price

[1:22:02] in rate hikes rather than cuts.

[1:22:06] Now, what you really ought to focus on

[1:22:08] today is not just the fact that Brent

[1:22:11] has now moved up another $2 up to about

[1:22:13] $110 per barrel from about the 108 where

[1:22:16] we started the day, but the real concern

[1:22:18] is the fact that the 10-year Treasury

[1:22:20] yield has moved from about 4.34%,

[1:22:23] which is like 10 basis points higher

[1:22:25] than what we had yesterday, up to now

[1:22:27] almost 4.4. We're sitting at 4.39.

[1:22:31] And the more pressure we see on the

[1:22:33] 10-year or the 2-year and the more of

[1:22:35] this sort of bearish yield curve

[1:22:37] flattening that we're getting, more

[1:22:39] pressure on private credit, which is

[1:22:41] that very similar rhyming ticking time

[1:22:43] bomb that we saw in 2008, except then

[1:22:46] again, it was real estate. Now, it's

[1:22:48] private credit. I actually think real

[1:22:50] estate is a unique hedge because my base

[1:22:53] case is that by 2032, whether it's

[1:22:56] because we have a recession in the near

[1:22:57] term or in the longer term, by 2032, I

[1:22:59] think rates will be lower than they've

[1:23:01] ever been before.

[1:23:02] I actually think we'll have lower

[1:23:04] mortgage rates than we had in 2020,

[1:23:07] which seems remarkable because during

[1:23:08] that panic, we cut rates to zero and

[1:23:10] people were, you know, including myself,

[1:23:12] were were getting loans at like 2.75%.

[1:23:15] I actually think by 2032, we'll see even

[1:23:17] lower rates, but that's just my opinion.

[1:23:19] That's just my speculation. It's one of

[1:23:20] the reasons why I think hedging by

[1:23:22] exposing yourself to real estate right

[1:23:23] now is is such a strong bet because

[1:23:26] that's not where the bubble sits now.

[1:23:29] Bubble sits elsewhere, but it's

[1:23:30] triggered potentially by again, rising

[1:23:33] inflationary concerns, rate hikes. This

[1:23:36] increase in the 10-year

[1:23:37] accelerates the pain in private credit,

[1:23:40] especially since a lot of businesses are

[1:23:42] zombie businesses that probably deserve

[1:23:45] to go bankrupt, but they're drowning in

[1:23:48] debt and rates are going up and not

[1:23:50] down. Now, just so you can understand

[1:23:52] what a bear flattening is, a bear

[1:23:54] flattening is when yields on both the

[1:23:56] 10-year and the 2-year are rising,

[1:23:59] which they are. The 2-year is up about

[1:24:01] 9.1%, the 10-year is up about or basis

[1:24:03] points, the 10-year is up about 10.7.

[1:24:06] We're almost at a four handle on the

[1:24:07] 2-year.

[1:24:09] That has been leading the 10-2 spread

[1:24:12] over the last few weeks to flatten down.

[1:24:15] You can see this sort of let's go to

[1:24:17] like the 3-month chart over here. You

[1:24:18] can see this fall over here from about

[1:24:20] .72 on that yield spread down.

[1:24:23] Usually, that going down is less of a

[1:24:25] sign of a recession risk, but it's

[1:24:27] bearish for the economy when it's

[1:24:29] occurring because rates are going up

[1:24:31] rather than down. You'd rather have a

[1:24:33] bull flattening where rates are going

[1:24:35] down because inflation concerns are

[1:24:36] going down and then you can actually

[1:24:38] encourage, ship and encourage

[1:24:40] risk-taking in the stock market or

[1:24:42] otherwise.

[1:24:45] Unfortunately, because that's the

[1:24:47] opposite of what's happening right now,

[1:24:49] we are seeing the Qs suffer, which is

[1:24:51] exactly what we expected in the Alpha

[1:24:52] report this morning. I hate to say it,

[1:24:54] but I gave a very blunt warning in the

[1:24:56] Alpha report this morning and I said

[1:24:58] that you should watch TLT. If TLT goes

[1:25:01] down, don't make an upside bet on the

[1:25:03] Qs. In fact, when we saw the Qs move up

[1:25:07] right here and we were live in our

[1:25:08] course member live stream, I said, "This

[1:25:11] may not be stable because we're not

[1:25:14] actually seeing yields

[1:25:16] come down. When yields go down, this

[1:25:18] line goes up." And so, we were able to

[1:25:20] use this as a canary to indicate,

[1:25:22] "Oopsie doopsies, not great."

[1:25:25] So, we've got a confluence of problems

[1:25:27] here.

[1:25:28] Troops are going to take time to show

[1:25:30] up. They create risk for American lives,

[1:25:33] but what we're indicating is even though

[1:25:35] Trump is saying, "Oh, yeah, we're not

[1:25:36] going to tell you if we put troops on

[1:25:38] the ground. Maybe we will, maybe we

[1:25:39] won't, but we're not going to tell you."

[1:25:41] And the timing elements that it's going

[1:25:44] to take two, probably to four weeks to

[1:25:46] actually get the situation,

[1:25:48] well, to get troops in the region,

[1:25:50] we're in a bit of a poopy-doopy place

[1:25:53] where we could actually see Brent crude,

[1:25:56] as Saudi Arabia puts it or UBS or

[1:25:59] others, that if this war continues into

[1:26:01] April, we're probably looking at

[1:26:03] substantially higher oil prices and that

[1:26:05] they've been suppressed so far under the

[1:26:07] belief that this war will end or this

[1:26:09] incursion will end much like Operation

[1:26:11] Midnight Hammer last year, 12-day war,

[1:26:14] will end in a short period of time, less

[1:26:17] than 30 days.

[1:26:18] Well, we're coming up on our 30-day

[1:26:20] anniversary next week of this war

[1:26:22] already and so far, there's no end in

[1:26:25] sight, which is bearish. If we get into

[1:26:29] April and this war is still going on,

[1:26:30] which at this point is likely, oil

[1:26:32] prices and Treasury yields continue to

[1:26:34] rise, we continue to price in rate

[1:26:35] hikes.

[1:26:36] Our bear-bull scale is going to continue

[1:26:38] to decline and the odds of recession,

[1:26:40] unfortunately, continue to rise. This is

[1:26:43] not ideal, but it is the latest of

[1:26:46] what's going on. Now, is it possible

[1:26:48] that the takeover of Kharg Island

[1:26:51] will end up forcing Iran to negotiate?

[1:26:55] Maybe. That's the hope. We take over the

[1:26:58] island, it squeezes 90% of their, you

[1:27:00] know, their oil production and hopefully

[1:27:03] that encourages Iran to negotiate. The

[1:27:05] problem is

[1:27:06] not only is it hard to do this, whether

[1:27:09] you commando raid the island or you have

[1:27:11] a naval blockade or whatever,

[1:27:13] the problem is not just the American

[1:27:15] lives that could be lost in this, but

[1:27:17] the problem is also that it may not

[1:27:19] work. You could take over Kharg Island.

[1:27:21] You could destroy Kharg Island and Iran

[1:27:24] may not want to negotiate and enable the

[1:27:26] reopening of the strait

[1:27:28] because Iran knows the longer this war

[1:27:29] goes on, the more the global economy is

[1:27:32] damaged.

[1:27:33] And if we end up triggering a nasty

[1:27:35] recession that Iran can claim claim

[1:27:37] credit for and say, "Look, you might

[1:27:39] have better bombs and a better military,

[1:27:41] but we destroyed your economy.

[1:27:44] Don't mess with Iran in the future."

[1:27:46] that Iran

[1:27:48] takes home a pretty big win.

[1:27:50] It hurts the global economy, so it's

[1:27:52] sort of like, you know, ripping off your

[1:27:53] nose despite your face because, you

[1:27:55] know, Iran will have a nasty recession

[1:27:56] as well. But,

[1:27:59] it sucks for everyone.

[1:28:01] Anyway, that's my take today. Appreciate

[1:28:03] you all watching and we'll see you all

[1:28:05] in the next time. Goodbye and good luck.