Breaking Points with Krystal and Saagar - Stories of Week 6/12: Inflation Numbers, Gun Legislation, Market Crash, Ukraine Intel, Fed Rate Hike, & More!

Episode Date: June 17, 2022

Krystal and Saagar discuss May inflation numbers, gun legislation, market crash, crypto black Monday, Ukraine military intel, Fed rate hike, media attitudes, & more!To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/To listen to Breaking Points as a podcast, check them out on Apple and SpotifyApple: https://podcasts.apple.com/us/podcast/breaking-points-with-krystal-and-saagar/id1570045623 Spotify: https://open.spotify.com/show/4Kbsy61zJSzPxNZZ3PKbXl Merch: https://breaking-points.myshopify.com/New Yorker Feature: https://www.newyorker.com/culture/culture-desk/the-rise-of-the-internets-creative-middle-class  Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

This is an iHeart Podcast. trustworthy mainstream by becoming a Breaking Points premium member today at BreakingPoints.com. Your hard-earned money is going to help us build for the midterms and the upcoming presidential election so we can provide unparalleled coverage of what is sure to be one of the most pivotal moments in American history. So what are you waiting for? Go to BreakingPoints.com to help us out. Good morning, everybody. Happy Monday. We have an amazing show for everybody today. What do we have, Crystal? Indeed we do. As you guys know, the big January 6th committee hearings have commenced. We will break down for you what happened last week and what is expected for today, as well as Sagar and I both have our takes on our sort of macro view of the whole thing. Sagar causing a lot of trouble online.

That's right. I'm sorry, Crystal. I always get in trouble. And me getting the blowback from it. Anyway, we'll get into all of that. Also, potentially, a deal on guns. Yes. Chris Murphy, who has been leading the bipartisan negotiations

with 10 Republicans, so that's how many you need in the Senate to actually get something passed. They have come up with a framework. We will tell you what is in that

and what the likelihood of that actually becoming law is. We also have some grave new numbers on inflation with the Federal Reserve board meeting this week. Very, very dire economic indicators there that we will get into. We've also got sort of both sides of the coin in terms of 2024. Increasingly alarmed Democrats questioning whether Biden's going to be too old and whether he is really the best candidate to take on potentially Trump and also some indications on the Republican side of the aisle that Trump is also not clearing the field and that especially Ron DeSantis is considering taking a run at this thing as well. Color me skeptical, but we will

give you those, uh, indicators as well. We've also got the very latest from the whole WAPO in disarray, um, both in terms of Taylor Lorenz and that column she wrote that was filled with lies, and then they had to put it on the editor's note, and the editor's note was still not correct. Their own media columnist taking aim at that column in the Washington Post handling of it. Also, Felicia Samnez, who was the reporter

at the center of the whole Dave Weigel situation, has now officially been fired. So we will tell you about all of that as well. But we wanted to start with your pocketbook and the extraordinarily dire numbers that came out the end of last week on inflation. Yeah, most important issue in the country. There's just no way around it. So we're filming this before the stock market opens. But right now, all indications of the S&P 500 is poised to drop at least by 2.5%, possibly up to 3.2%, which the Wall Street Journal says

would officially put it into bear market territory. So it doesn't, I mean, look, these are all semantics. They have technical definitions to exactly how much is down. Means 20% down from a recent high. That's right. So 20% down from a recent high. But look, even if it's down 17, it's not great. And all of it is spurred by the most recent inflation numbers, which, look, no way of getting around it. Complete and total disaster. Let's put this up there on the screen,

which is that we now know that the year-over-year inflation is now up to 8.6% in May. That is the highest in the United States since 1981 and the new post-pandemic record. So that includes gas prices, food prices, and shelter costs, which drove the majority of the May increase. And there is no sign of a slowdown. In May alone, inflation was still up by a whopping 1%. And I think that driving into some of the other major indicators that show you how inflation is just nuking Americans'

pocketbooks, Let's put this up there on the screen, the next one, please, which just shows you groceries are up 11.9% year over year. That's the biggest increase in take-home food since 1979. Chicken is up 17.4%. Some very interesting stuff on the chicken supply chain. Restaurants up 9%. Fuel oil, 107%. So if you're in a rural area and you have to pay for fuel oil based on contracts, you're getting absolutely nuked this winter. Electricity is up 12%. That's the largest increase since 2006. Rent is up 5.2.

I do want to say that is the national average. From what I'm hearing, the urban averages can be up to 15% to 20%. So that is just the national average in like Podunk, wherever, where if you include where the largest renter areas are, it's actually much, much higher for the majority of the population. Now, airfare is actually up 37.8%. That, again, is purely both pandemic demand-driven and jet fuel. I mean, jet fuel, if you think gas is expensive, jet fuel is even more expensive.

And then finally, and this is also extraordinarily troubling, is that services are up by 5.7. So the fact that the service economy is also jacking up prices just shows you that inflation really is, even at the most modest level, like 6% there. But in many, many critical areas, you're seeing double-digit inflation in the most critical areas of life, Crystal. I just want to piggyback on what you're saying there about why the services disrupted supply chains, anything that required inputs, consumer goods, cars, all those sorts of things, those were going up because they're having trouble shipping the goods and, you know, seamlessly around the world because we've set up such a sort of fragile supply chain. That is all still true. But now you're seeing that inflation hit every single sector, including services, which don't require those

global inputs. Yeah, absolutely. So you conclude all of that. And we have a big mess on our hands. What's the White House's response? President Biden, he was actually at the port of Los Angeles, which is the genesis of some of these issues. Who do you think he's putting the blame on? Name is Putin. Let's take a listen. Well, he's labor from forehead to the tip of his toes. He used to run the laborers out of the union. Look, folks, today I'd like to speak about my top economic priority, fighting inflation. I understand Americans are anxious, and their anxious is a good reason. I was raised in a household when the price of gasoline rose precipitously. It was the discussion at the table.

It made a difference when food prices went up. But we've never seen anything like Putin's tax on both food and gas. Well, did you know, Crystal, that Putin personally is taxing food and gas? You know, it's funny. I've been seeing comments like, man, Putin is raising rent prices. It's like Ames, Iowa. You know, who knew the reach of the Russians? All powerful, all knowing. Just be honest with people. I mean, just be honest, which is we have a supply chain crisis. Look, obviously we had crazy demand inflation as a result of both stimulus, but also just cooped up people going out and then spending. We have the summer driving season. And beyond that, beyond what went wrong, what are you going to do about it? Like, really try and give a plan to the American people.

But they just have, it just mystifies me that they continue to think that this is the one area, which is the area of the public, which we have some polling we'll show later in the show, that they least blame inflation on. The public knows actually what's going on. Yeah. Well, and there are all these pieces out now that are like, Biden is so frustrated that, you know, they want to do everything they can about inflation, but there's just not that much they can do. And all the quoting all these economists like, ah, what are you going to do? I mean, okay, let's take the Putin price hike thing at face value,

because it is very silly to think that's all the entirety of what's going on. But there's no doubt that that is a piece of it, especially when it comes to food prices and gas prices. Because of, by the way, our own actions and deciding to embargo Russian oil. Okay, well, it's not like we're totally hands off from that conflict and we have nothing to do about it and there's nothing we can do about it. In fact, we could be putting pressure on both sides to come to the table and negotiate a compromise so that that war ends and that Putin's price hike goes away. So even that is extremely disingenuous,

like, oh, it's out of our hands, the war in Ukraine. We're shipping tens of billions of dollars in aid to Ukraine. We are deeply involved in this thing at every single level. We could be putting that pressure on, but we're not. So even on that front, even if you take the Putin's price hike thing at face value, like there are things that we could do. Even beyond that, and let's put this next piece up on the screen here from Jeff Stein about who Americans blame for inflation. And they're not wrong about this, by the way. The number one place they area they place the blame on is actually corporations trying to increase profits. That's not 100 percent of what's going on either. But yeah, that's a lot. And that is an area

where the White House, again, could have a direct impact. And I think it was Jeff who did the reporting about how there were, you know, there were some people in the White House who were saying, listen, go out and go after the corporate price gouging, call them out, use your power as the presidency with executive action to take aim at these corporations and the way that they're hiking profits above and beyond their own increase in costs. And we know that's the case because their profit margins went up extraordinarily last year. But they were, they didn't want to do it. They were nervous about doing it.

They weren't sure that was the right thing to do. So, you know, the obvious things they could do that are in their hands, they have taken off the table entirely. And unfortunately, Kristen, I did that whole monologue on this. A lot of the corporate price gouging, they got most of what they could already. And this is another issue with the Biden administration. By not acting a year earlier, he actually could have tamped down on the profit maximization that was happening in the stock market in 2021. But already, the reason that stocks are down and the reason that corporations can't hike prices even more is they've basically gone to their full extent. And now they're losing money.

That's part of the reason why the Dow has dropped. By the way, if anybody wants a deal, go to Target. Target has a disaster right now because there's way too much inventory on its hand. And it's slashing its prices by like 40%. Might be good for you in the short term, but Target stock is dramatically down and it's indicative of consumer prices. But the point that I'm making is that Biden, by acting or not acting or even not even floating action until now, makes it so that many of the things that were on the table to stem some of the tides of inflation when it was 3%, 4% are almost impossible whenever

you're talking about 12%. Here's the other issue. Is anybody really going to give Joe Biden credit from dropping from 12 to 8? I mean, 8 is still a disaster. So by not getting out ahead of it, he's screwed himself politically and actually resigned us really all to pretty much runaway inflation. And I think my scariest thing that I saw this morning, which is from Bloomberg, which is that this is a headline, Federal Reserve Chairman Jerome Powell is facing an increasingly grim calculus. He probably has to push the economy into recession in order to regain control of prices. And look, this is Biden's fault. I mean, to allow things to get so bad and to have the political system essentially break down that now all we have left is the Fed. Well, the Fed has, it's a blunt tool. You know, it has one instrument.

They, has always been the knowledge. They can push us into recession. That will certainly drive demand down and sure, it'll take care of inflation, but then we're going to have unemployment to 7%, 7.5. I mean, it's a disaster. And it's not like, you know, even by pushing the economy into recession, let's say that we do drive price demand of gasoline. Okay. I mean, now it's right now it's $5. What are they going to push it to? $4.50? $4? That's still very high. I mean, by not dealing with the supply problems, which is the job of Congress and of the president, they're truly, I mean, we could have a stagflation type scenario. I think we really are back in the 1970s. Yeah. And again, just one more point on there are things that the Biden administration could do.

All right. He's already, you know, war in Ukraine, pushing to end that. We didn't have to embargo Russia's oil, but we made that choice. Biden made that choice. You didn't make that choice. Biden made that choice. Okay, that's one thing. They've already flipped on their Saudi policy, so they're now bending the knee to MBS to try to convince OPEC to increase. Please, please. Yeah, to increase oil because Saudi oil is so much more humane and so much more humanitarian than Russian oil.

All right, there's that one. You know, it wouldn't fix the whole problem, but you could do the Iranian nuclear deal and also have, you know, access to Iranian oil. But then the Saudis won't pump oil. You could. That's true. Then you have the Venezuelans that you also. So it's not like there's nothing that you could do that's on the table. But it is gas is probably one of the more difficult things ultimately for them to deal with. And if you look at the numbers, Biden's approval rating goes slides down and down and down as the gas price goes up and up and up. about all of the various things that are going on in our politics, you would be hard-pressed to find a more direct indicator of how Biden's doing than what the gas price ultimately is. With regards to the Fed, the Fed meets this week. We will have an announcement later this week as to what their next move will be. Prior to this report, the expectation was that they would

hike interest rates by another half percent. And now there are a number of analysts who are saying because of this report, their expectation is that we will have a 0.75% rate increase. So that's part of why it's actually a big part of why the markets are kind of in freefall right now is because they recognize that those inflation numbers will push the Fed towards more aggressive action, which, I mean, that's what it, the whole point of that is to tighten the supply, to make money, you know, to make it so that people have less money, are less able to purchase, less able to take out loans, to slow the economy, and to ultimately, I mean, it is looking increasingly likely that it is going to be impossible to have a soft landing and we are headed to a recession.

There's no soft landing. They're going to have to destroy the housing market and they're going to have to do something called demand destruction, which is basically raise rates and make it so impossible for capital in order to borrow that they can't have any investment. And I honestly think that is the worst possible outcome because we're going to destroy our housing market. I'm not saying that it didn't need to cool down, but capital expenditure is going to go way down. What happens in the middle of recession? People don't invest in anything. They just start cutting costs. So we're going to be pushing businesses back to the incentive of just-in-time delivery, just at a moment where we shouldn't have just-in-time delivery. We actually need to make it cheaper for corporations in order to indulge in inventory. Because part of the issue

that we all fell into in the pandemic was that inventory became a nasty word, having it on your books. So corporations did just in time. And then the supply chain crisis hits and boom, we all get hit with a massive price increase. So we're actually reverting away from where we should be. We're going to be in a much more precarious economy. And ultimately consumers, you know, I was just reading this morning, food at home cost, as in grocery store food, is somehow higher than restaurant food. Somebody needs to explain that to me. It's 11% inflation for food at home, and it's only 7% in a restaurant. I don't know what's going on. I think the government should investigate that. But beyond that, you know, I was reading some 35%, 40% of customers are now engaging in different price and price sensitivity for grocery stores.

They're not shopping in the way that they normally were. They're buying half gallons of milk instead of gallons of milk. People are pouring water into – I mean this is 1930s Great Depression level, and this is like little kids. Oh, here's the other thing. Shrinkflation is happening. Cereal boxes are now 17% less than what they were like two years ago. So you're getting less cereal for the money. Now you're having less milk to give to your kids. That stuff leaves real scars on families for a long time.

Kids grow up with that, remembering how their parents had to scrimp and save. It's not good in the richest country. Well, we talked about how since the expiration of the child tax credit, half of families, half, say they're struggling to feed their families and feed their kids. And it's, you know, a large part of that is loss of the child tax credit, which, you know, the foolish calculation there was, oh, Republicans will definitely join us to reauthorize this, or it'll be a great issue for us in the midterms. None of that worked out. But, you know, families are really struggling because of its expiration. And then the other part, obviously, is prices going up. And so the money that you do have

is just not going as far as it used to or anywhere close to that. And as we were just saying, I mean, the gas price piece is so extraordinarily difficult. And what you're seeing is all of the things that make up the largest percentage of working class people's budgets. Gas, rent, food are some of the highest levels of inflation across those categories. And it's just brutal. I mean, there's no other way to put it. Let's go ahead and put the gas price piece up on the screen so you can see. Hit that $5 mark. I mean, it really is.

I'm actually surprised that we aren't seeing more direct unrest from $5 a gallon gasoline. And I think it's just so baked into people now that, well, this is the landscape. This is what we're facing. Well, it shouldn't be. I mean, you guys know how to track this very closely. So the average American consumer is going to be spending somewhere like $400 a month just on gas. $400 a month in outlays just on gas, which is up over 100% from what they were spending about a year and a half ago.

So really consider just how much that is going to impact the bottom line. California right now is at $6.43 a gallon, okay? There are 40 million people who live in California. That's 12 percent of the U.S. population. And we have multiple states now that are pushing $5 a gallon. You can see there who are just watching, the West Coast is getting destroyed, Oregon at $5.50, Washington $5.50, New Mexico $5.30, Nevada $5.60, Alaska and Hawaii are both pushing $5.50 as well. Now, there's a state called Illinois, somebody may want to tell me if it's politically important, at $5.50 a gallon. Indiana pushing $5 a gallon as well. And you can see there are multiple states in the Midwest. Michigan at $5.20. Ohio is pushing $5. Pennsylvania, where they have some very important elections, is over $5 a gallon. New York is at $5 a gallon. Massachusetts. So the Midwest,

cheapest gas in the country remains in the state of Georgia. I still have not been able to figure out exactly why, but kind of interesting there. And the Sunbelt in the South, below $5, but still even in my own home state, Texas, with a ton of oil refineries, they're at $4.66. So this is a national story. Everybody in the country can feel the crunch that is happening with the gas price, and it is just demolishing folks. I mean, to their credit, actually, the Today Show over at NBC News just went and interviewed normal people at the gas pump. And they were like, hey, like, how is this affecting your life? Let's take a listen to what some of those people had to say. The average price for a gallon of gas has now hit $5, according to AAA,

the most expensive in history. It's totally insane. I was actually dreading coming to the gas station because I know it's going to be $100 once I pump. Stock markets down on the news that inflation is up 8.6% year over year, worse than the previous month, now hitting the highest levels in 40 years. I think it's really strangling to people. And Americans are feeling the squeeze at every turn. Even in that report, they talked to, these are the guys I really feel for, the owner-operators of these truck rigs. These guys have, you know, they were already floating on razor-thin margins. And actually, you know, even right now, there's, the diesel price is much higher. It's actually

$5.70 a gallon. And diesel futures, I've explained before how middle distillates, diesel and jet fuel, and all of them have been separating from gas in price, which is actually making the supply chain worse because that stuff is baked into your food. That stuff is baked into all of your logistical costs. And I mean, their margins are dead. I mean, these guys are bare. I doubt they're even breaking even at this point. Or if they are, I mean, they're just having to charge more and more and more, and that's just contributing even more so to runaway inflation. So gas and diesel are destroying a lot of the pocketbooks of Americans. If you include food, people are substantially poorer today than they were two years ago.

I mean, to the tune of almost like 16 or 17 percent. Well, and then we also wonder why, oh, why don't we have enough truck drivers? Oh, yeah. Because they're losing, literally losing money, you know, in the contracts on those, a lot of, for those, a lot of those owner operators extremely exploitative to start with. And then you add in the gas crunch. It's just completely intolerable. I don't know how we get out of this one. Like you said, I'm honestly kind of surprised. You know, California is one. I cannot imagine paying $6.50 a gallon. And in the city of Los Angeles, some of those people are paying near seven. Like I said, Mendocino County, and there are counties in California where the average price of gas is $7, which is nuts. I mean, when you start to dig out, I think it's, yeah, Mono County, California. Is it $7.20 a gallon?

I mean, up in Northern California, like Humboldt and, well, I'm not even going to try and say that. But some $6.70. So, look, you're pushing $7, you know, even $7.80 in some places, like the Alpine County, California. $7.79 a gallon. This, like I said, there's a lot of people there. And California, in a lot of ways, has been over five. It really is the future. But also, we're not seeing demand destruction in California.

People are still driving. They still have a lot of stuff that they have to do. They've been cooped up there for two years. Well, they have no choice. Yeah, well, especially there. Yeah, and then you couple this with, you know, a lot of bosses who are like, get your asses back in the office for the white collar workers. She's not helping things either. And yeah, I mean, we, our public transit in almost all of the country is complete shit. So people don't have

any other option. What else are you going to do? You have no other choice. So it's a dire situation and we'll be watching closely what the Fed does this week, as everyone else will, because ultimately, in a lot of ways, our fate is in their hands, too. 100%. So everybody stay tuned. Okay, guys, a big announcement from Senator Chris Murphy on a potential bipartisan deal to address the mass shooting epidemic that we've been suffering in this country for a long time now. Let's go ahead and put Chris Murphy's thread here up on the screen.

I'm going to read through all of this so you get all the details. He says, we have a deal. Bipartisan group of 20 senators, 10D and 10R, announcing a breakthrough agreement on gun violence. So the first piece here is major funding to help states pass and implement crisis intervention orders. Those are the so-called red flag laws. Billions in new funding for mental health and school safety, a Republican, you know, priority there, including money for the national build-on of community mental health clinics. Next piece, and this one directly relates to guns, closed the, quote, boyfriend loophole so that no

domestic abuser, a spouse, or a serious dating partner can buy a gun if they're convicted of abuse against their partner. First ever federal law against gun trafficking and straw purchasing should make a difference to stop the flow of illegal guns into cities. Enhanced background check, this one is kind of a key part, for under 21 gun buyers and a short pause to conduct the check. Young buyers can get the gun only after the enhanced check is completed. So they're not lifting the age that you can buy the gun, but they are instituting a more sort of intensive background check process for buyers under 21. And there will be a pause there. So I guess that means you can't just like,

it's not the instantaneous background check that exists now for those who are under 21. They also mention clarification of the laws regarding who needs to register as a licensed gun dealer to make sure all truly commercial sellers are doing background checks. That's something they looked at last time around with the Manchin-Toomey bill as well. He closes by saying, well, this bill do everything we need to end our nation's gun violence epidemic. No, but it's real meaningful progress. It breaks the 30-year logjam demonstrating Democrats and Republicans can work together in a way that truly saves lives. The Republicans who are involved in this, just so you know the names, are Cornyn, Tillis, Blunt, Burr, Cassidy, Collins, Graham, Portman, Romney, and Toomey. So those are the 10 Republicans that have signed on. Obviously, that's a key number because if you get the 50 Democrats, which we assume they'd all be on board,

plus the 10 Republicans, you're able to break the filibuster and actually get this thing through the Senate. Biden reacted. He issued a positive statement. He says, each day that passes, more children are killed in this country. The sooner this comes to my desk, the sooner I can sign it, the sooner we can use these this next piece up. He says he supports gun proposal negotiations. And again, reiterated sort of his priorities there, that it addresses key issues like mental health, school safety, respects the Second Amendment, and earns broad support in the Senate. So, I mean, what's being proposed here on guns

is extremely limited. It's, you know, basically the enhanced background checks for those who are purchasing and are under the age of 21, closing the so-called number of stores that sell the overwhelming majority of guns that are ultimately used in violent crime. So that does actually matter. Listen, I said before, is this like everything that I would want it to be? No, of course not. But I feel it's so important just to get something done so the American people have some sense of like, oh, we actually are able to react and enact legislation after something horrible happens where there's overwhelming public support in favor of doing something. So from that perspective, I certainly support it. There's still, though, Sagar, a lot of question marks whether it will actually get through. This is not, the legislation hasn't been drafted. This is a framework. And the other piece here is Republicans want the money for mental health, these community clinics, to be offset by other budget cuts. Where will that come from? So that's a big question mark as well.

We always have to play deficit fakery, but not whenever we ship arms to Ukraine, of course. Of course, yeah. That's totally different. We love Americans' priorities here, of course. Look, like I said, I mean, I've voiced my own concerns about red flag laws. That being said, it's not a terrible bill because what it does is it provides funding to states if they want to pass a red flag law. So it's not forcing a national red flag law. It says that they will implement crisis intervention orders and fund those centers if the states choose to do so. So look, you know, I'm generally a supporter of federalism. So if that's what they want to do, then I think that's fine. You know, it's up to the states like Connecticut, New York, or others, or Florida, and how they want to have enforcement. And ultimately, that has to be litigated at the

state level. The rest of it, I mean, beyond the, and that's, if this thing falls apart, it will almost certainly be on the red flag provisions because they actually write in the provision that it has to be contingent with civil liberties. I looked into this a little bit. It's kind of wonky and all over the place, which is that the standard is different state by state on different red flag laws. So some have much stronger civil liberties due process provisions within the state. I think Colorado is one. But there's actually a much higher barrier to proof on mental health commitment than there is on the red flag. Due process part in states like New Mexico. So anyway, that is going to be a point of contention.

That's what the NRA always points to, by the way, whenever they come out against these things. I do actually think that this one about the juvenile background checks, that one's great because even though it doesn't raise the age to 21, it makes it so that you're allowed to look at juvenile records and have a more further investigation for people who are buying under 21. Given that we have these limited number of instances with the Nicholas Cruises of the world and the guy who shot up the Uvalde school, and they both had some past instances, brief whatevers with law enforcement, and were known having some sort of investigative period, you know, without also infringing on people's rights to buy a gun. Overall, I think it's like not a terrible piece of legislation, like I said, you know, as long as it leaves it up to the states to be able to do

what they want. And I actually do think it's going to pass, Crystal. I do. Even though it is these 10 Republicans and it has some possibility to fall apart, the weakest link in the chain is going to be John Cornyn, given that he's from the state of Texas, and Texas does not support red flag law whatsoever. So he is probably the most likely to fold there, given political pressure. The rest of them are either retiring or they're very much in like kind of a, you know, more centrist position, like a Lindsey Graham or, you know, Bill Cassidy or even a Tom Tillis in North Carolina. He comes from a more conservative state, but the rest of them, actually Susan Collins could have some shake up there. Maine is a very pro-gun state actually, because it's more rural. So we'll see, like I said. But overall,

I mean, I think that NRA and gun orgs will probably come out against it, given the red flag provision. But I don't think they're going to fight as hard. It doesn't ban anything. Right. I mean, NRA is against literally everything. So, I mean, they're not a constructive partner

in any of these talks or discussions. I also, I'm interested in seeing the details of the mental health provision because, you know, I do think that's extremely important. People having access to mental health resources. We know that mental health is a massive and growing challenge in America because of a whole host and range of issues. And the fact that we don't have universal health care obviously makes it so you've got a lot of people who are completely disconnected from the medical system altogether, who certainly don't have universal health care obviously makes it so you've got a lot of people who are completely disconnected from the medical system altogether, who certainly don't have coverage for any sort of mental health care. So expanding, you know, a network of community mental health clinics

and that could be, you know, so the details there matter. How much money is put towards that? How significant will that be in terms of getting people the help that they ultimately need. So again, listen, there are a lot of other things I would like to do. But if you can even take a few positive steps forward to curb some of the deaths from suicide, domestic abuse, homicides, and mass shootings, if you can even curb them by a small percentage, given how high the number here is in America, I think that's worth engaging in and worth taking that step forward. Let me read Matthew McConaughey's reaction, the most McConaughey reaction of all time from his Instagram. Is it all right, all right, all right? It's even better. It's very poetic.

What's the best change you can imagine, I asked the senator the course of my 30 bipartisan meetings. Something, he replied. I laughed. He didn't. For the first time in 30 years, something has happened. The Senate has agreed on a bipartisan framework. Something has been done in an effort to stop some of the deranged individuals. With every horrific act, abuse and hijack the Second Amendment, something has moved that we can hope we can deliver on our shared effort to make a loss for So Many Lives Matter. I do offer a firm handshake and a sincere thank you to the members of both sides who came together. Camilla and I would like to specifically thank the Republican senators. Let's recognize that today's announcement doesn't mean that we have a solution,

but it does support more responsible gun ownership. Just keep living, McConaughey. It's longer, but it's written also in like, I don't know, it's not iambic pentate. I forget what it's even called, but it's written like in center script, almost literally like in prose, like a poem. So go to his Instagram. It's on his Instagram story. I mean, that does kind of capture how I feel about it. Like, just show the country that you're able to do something in response to just unconscionable, horrific tragedy. That alone, I get it, that bar is very, very low,

but that alone I think is worth taking the step forward for. So I guess I have a little bit more skepticism than you that ultimately it comes to pass just because of how many times I've been burned getting my hopes up about legislation here in D.C. before. There could always be some sort of fly in the ointment that dooms the whole thing. But this is a very positive sign of rare bipartisan progress in Washington. Yeah, I mean, I think it would be the first gun legislation to pass since 1998, which is pretty nuts. That's right. Think about it. That's more than 20 years. Well, there's been lots of movement in the other direction, especially at the state level, you know, loosening gun restrictions. So,

this would be the first time that we're saying, all right, let's take a step more towards making sure that these weapons are ending up in the right hands. I mean, that's ultimately what this is about. So, this has at its core kind of the principle, it really matters who, it's not so much what the weapon is, but whose hands it ends up into. And I think that that is a, I think that's a wise approach ultimately. Good morning, everybody. Happy Tuesday. We have an amazing show for everybody today.

What do we have, Crystal? Indeed, we do. A lot going on this week. As you know, the January 6th hearings continue. There were some interesting nuggets there. Yeah, there's some good stuff. We've actually been covering before about the way that Trump raised money and completely fleeced his supporters. So we got some

more details there. We'll break down for you. Also, a massive market crash yesterday ended in bear territory. Lots of speculation about what the Fed is going to do this week. Not to mention, I mean, crypto falling off a cliff. The hashtag Black Monday trending on Twitter. It's hard times out here for us, folks. Not good. Not good for those who have invested in any sort of crypto asset. We also have some big developments in Ukraine.

Some new indications that this is really pretty stunning. I mean, you all know how much we're sending in terms of millions of dollars worth of weapons and aids to the Ukrainians. And it turns out we really have no idea what they're up to. They're not giving us the full picture of how things are going or what their plans are or any of that. Apparently, we're not really pressing them for that. This all comes as there are new indications that they are really struggling with Russia in the eastern part of that state. So we'll tell you about that. Also, a big day for the Amazon labor union yesterday as Amazon is trying to pull their own little stop the steal situation and overturn those rightful election results. We also have, you knew this was going to happen, the most cringe possible presidential candidate floated, floated by a supposed progressive, Liz Cheney for president. Yeah. So we've got that for you as well. Also very excited to talk to James Lee this morning. You guys know he's one of our partners of Breaking Points. He's been doing some incredible videos

that I know you guys have really been enjoying. So we're going to have him as a guest in the show to preview his very latest. But we wanted to start with the markets falling off a cliff yesterday and what this means going forward. Let's go ahead and put that CNBC tear sheet up on the screen. The S&P 500 tumbles nearly 4% to a new low for the year, closes in bear market territory. Listen, the last time we have seen a stock market collapse like this, it was right before the COVID crash when, of course, Congress acted and injected a lot of money into consumers' pockets. But even more overwhelmingly, the Fed acted, injecting trillions to backstop the stock and the bond markets. Here are the details. We

have the S&P 500 falling 3.88%, bringing its losses from its January record to more than 21 percent. That, of course, means we are now in an official bear market. Some people apparently only count it when it ends for the day at the bear market. So this is the first time we have been in that territory. We have the Dow Jones dropping 2.79 percent. We have the Nasdaq tumbling 4.6868%. At one point during the trading day saga, every single stock in the S&P 500 was down. Only five stocks in the benchmark closed the day in the green. So that is what we're facing right now. It's really such a disaster. You think about people's retirement portfolios or 401ks. I mean, the most thing that people are invested in are these index funds, which they always tell you like, hey, S&P 500 returns 14% on average. It's like, well,

yeah, it's certainly true. It was true for a while, but a lot of people are looking at this and they're just watching their retirement savings just fade away. Remember, we have an increasingly aged population. So this actually could increase the amount of time that they even have to continue to work. Or honestly, what's even worse is it could force early retirement. People say, screw it. And they tap into Social Security at this two-thirds benefit at an early time. It has all sorts of screwy effects whenever these things start to happen. And what is our great president saying about this big market crash, this drop, this pain that Americans are feeling? Well, he's telling you that none of

it's actually real. Let's take a listen. The job market is the strongest it's been since World War II, notwithstanding the inflation. We added another 390,000 jobs last month, 8,700,000 new jobs since I took office. An all-time record. Never that many jobs in that period of time. Unemployment rate is near historic lows. Millions of Americans are moving up to better jobs and better pay. And since I took office, families are carrying less debt, on average, in America.

They have more savings than they've had. And we're doing it all while cutting the federal deficit by $1.7 trillion this year and $320 billion last. I don't know how they're still selling this. What are you smoking when you think that that is a compelling sell? Yeah, you know what? He's right. People are employed. That's great. Here's the problem. Their wages went up by 2%. Inflation, depending on where you look at it and what the people are most affected by, well, that's like 17%. So you're hosed. I mean, you're substantially poorer today than you were two years ago. I did some back of the envelope math yesterday, Crystal. And so get this. The average American nets $2,700 per month after taxes. So at

$5 a gallon, the average American consumes somewhere around $250 to $300 worth of gas, depending on where you live as of right now with the current driving standard. That means just 10% of after-tax income is going to gas. 10. That used to be two to five percent. And obviously, that money has to come from somewhere. Then you include food and housing, both of which have double-digit inflation. So you are watching the slow erosion of all of the ability for people to have consumer spending. I don't know why the president cannot speak to that and continues to try and gaslight people. This is Obama 2.0. I remember it so vividly. You know, 2011, Obama's like, the economy's great. We're coming out. We have the, you know, they had all these fake charts, just like Biden. And meanwhile, people lost their

homes and they were working two jobs and they were underemployed. I mean, if anybody other than idiot like Mitt Romney had run against Obama in 2000, he was eminently beatable. I read George Packer's book. It's called The Unwinding. It was actually written in 2013. And it was a real precursor to all of the problems that we have now. And he specifically spends time all across the country, like in Obama's America at the time. And it tells the same story. He's like, man, a lot of blue collar people, they're just getting, they have all this credit card debt, housing debt. Even they lost their homes. They have no ability in order to climb out. A lot of them tapped into that Social Security, like I'm talking about previously.

Same exact situation. And the president is gaslighting all of us. He's living in parallel realities. Credit card debt has reached an all-time high. Yeah, that's right. As of last month. That is a flashing red warning sign. And, I mean, just look at, you ask people how things are going, they tell you it's not going well. Country's on the wrong track. My economic situation is

going backwards. Things feel worse now than they did before. People are not stupid. And so Democrats keep going back to this notion of like, oh, the media is just not really telling you how great the economy, you don't really understand how good the economy is and how much we've done for you. Not going to work, guys. Not going to work. And it just makes you seem, because you are, completely disconnected from the stress and the pain that people are feeling right now. And, you know, with regards to the stock market, of course, you know, it's a relatively small slice of America that really benefits from the stock market when it goes up. But these sorts of things, you know, bear market doesn't always precede a recession,

but it oftentimes does. Like I just said, the last two that we had, one was before the COVID crash, which ended up being brief because of all of the trillions of dollars that the Fed and Congress injected into the economy. The other was before the housing crash. That's the territory that we're looking at right now. And on the way down, you end up with this sort of like mutually reinforcing negative cycle where those people who do depend on or have significant retirement savings, they start to get nervous. They start to pull back. Everybody starts to pull back in terms of their spending. They start to save more, have a lot less liquidity. You add on top of that, of course, the inflation that is already squeezing people and making it so that they have less and less and less that they can spend just in discretionary spending. You've got a very, very dire picture. And those signs are being picked up by anyone who's really

paying attention, the very latest that we have. This is from Morgan Stanley, CEO James Gorman, who now says there's 50-50 odds of a recession ahead. We've had other bankers who are looking at this and saying that it looks very dire as well. You also have, as we talked to you about yesterday, the Fed meeting this week. And previously, the expectation would be had been, all right, we'll have another half a point interest rate increase, which is, again, significant, but not crazy. Now they're talking about, OK, probably the baseline is point seven five. And some are even projecting we may have a full hundred basis point Fed hike. Go ahead and put this Bloomberg report up on the screen. Well, this is the JP Morgan Morning Trading Note. CPI changed

the narrative of recession as inflation accelerates. Again, go ahead and put the next piece up from Bloomberg. Pockets of Wall Street raising the possibility that the Federal Reserve could go to extreme lengths on Wednesday in an attempt to control the hottest U.S. inflation in four decades. Consensus expectation still half a percentage point, but you have two banks revising their calls for the potential of 75 basis points as well. And you do have some outliers who are saying they may go all the way to 100 basis points. Stephen Englander, global head of G10FX research at Standard Chartered Bank. He says 50 was the big round number six months ago. Meanwhile, 75 is a very middling type of hike. So the Fed might say, look, if we want to show commitment, let's just do 100. So when you see the market reacting the

way it is this week, this all comes on the heels of that dramatic inflation report we had last week and their expectations of what the Fed is going to do to significantly tighten the economy and probably ultimately they're going to trigger a recession. I mean, it's just hard to see how they avoid that at this point. And the problem with these interest rate increases, as you know, is it takes something like nine months

to a year to actually see the full effect of what they're doing now. So when you see these inflation reports coming in, they're acting right now and they're making these dramatic moves, potentially a full point. Well, you don't actually feel the impact of that till a year from now

to see what that actually does to the economy. That's why this is such a blunt tool. That's why it's so difficult to gauge this appropriately and not go too far and trigger a really, really painful recession. And that's what we're facing down right now. And the other kind of wildcard piece of this, too, is it's not just the interest rate hikes. It's also what they do with their balance sheet.

As you guys know, because we've talked about a number of other times on this show, the Fed, in order to backstop the stock in the bond market, they bought a lot of assets. They have a huge, unprecedented, huge balance sheet. They're allowing those assets to roll up. At what pace they do that, well, that's like adding on another maybe half a point interest rate hike on top of what they're already doing. And there's very little precedent for how the markets actually respond to that, what that actually does to the economy, because this is really sort of uncharted territory. Yeah, absolutely. I think people should realize, remember when we were talking a couple of weeks ago about how there was this one Fed governor who

was saying, hey, maybe we should hike it. He was only talking about a 0.75 basis point bump. And people were like, wow, that would be crazy. It would be really nudging the market in a different direction. Well, now 100 is on the table. And now look, I know basis point sounds mysterious. It's not. A basis point is basically like it's a percentage. So 100 basis points is 1%. So 75 basis points is 0.75. So remember though, just what is it? Didn't you tell me this? Just a couple of interest increases in the mortgage rate alone accounts for double the price of your mortgage. Yes, that's right. You know, this is a very real, very real effect whenever it comes to not only your mortgage loan, which is the vast majority of loans outside of credit card that most Americans will experience,

but they also mean car loans. I mean, if you take a look at the car price right now, the financing rates that people are getting used to be 2% or 3%, not even four or five months ago. Now you're looking at like 5% if you have great credit, 9%, 10% if you don't have it. So consider then what that means for you and how much more you're going to be paying in a cash basis for all of these new assets that you might have to finance on top of existing credit card debt, which we already know is sky high. And it already has ridiculous interest rates. So to have a 100 basis point increase, even on the table, is insanity, because it will almost certainly trigger a massive sell-off on the Dow and on the S&P 500. And like I said, it dramatically decreases the available capital to these businesses, which means they can't invest, which means they have to cut costs in order to maintain profitability and even try to keep their stock where it is.

So all of this means, at the end of the day, less power for you, both in your wallet and in your ability to really have gainful opportunity and employment. This stuff bleeds through the economy like a virus. And unfortunately, the real issue to me is it's not really going to do anything except put us into recession. I was just reading this morning, the complex market conditions which led to cheap gas over basically the last 10 years, that's never going to happen again. We were all basically being subsidized by Wall Street traders who were pouring hundreds of billions of dollars into these oil companies so they could drill and drill and drill. Well, now they're fed up. They're done. They want profit. So there's not a lot you can do there. On top of that, we have a massive supply crunch given what's happening with the Russian oil embargo by the Europeans. So the complex

market conditions that existed for cheap gas are now gone. I was talking with Peter Zaihan recently. He said something which has really struck with me, which is that the globalization of the last 1990s have basically made it for the last 30 years. That's why inflation was so low, because we adjusted to just-in-time delivery. We stopped having inventory. We made it a much more efficient economy, but less resilient. So the higher efficiency meant that we had low inflation. But all of the supply-side factors are disappearing overnight on top of an over-financialization of the economy. And that leads to where we are today.

So it's a real tragedy. I don't see a way out of this for, I don't know, five, ten years. I mean it takes hundreds of billions of dollars to crawl out of this hole. Here's the thing. Because we basically live in a failed state where the president and Congress are unable or unwilling to act, and the Fed is left as the only thing that we're like, well, you guys do what you can do, that means either way you get screwed. I mean, if they hike interest rates to curb inflation and they spark a recession, you get screwed.

If they don't do that and inflation continues to run a recession, you get screwed. If they don't do that and inflation continues to run rampant, you get screwed. I mean, it's just completely, the whole thing is, it's a disaster. And the Fed's policies up to this point have also helped to fuel that inflation. I mean, the reason we had all these asset bubbles to start with was because of the trillions that the Fed injected into the economy. They helped to fuel this massive inequality that we have as well. So, you know, since we don't have any other mechanisms at our disposal, the only thing the Fed can do is make it so you have less money to spend, so that to curb demand from you, that's the only thing that they can really do to deal with the situation. Dealing with the supply chain issues,

dealing with gas price. They don't have any control over any of that. All they can do is curb stomp demand. That's it. And so that's why this landscape is so dire and why, you know, I mean, this is something we've been looking at and predicting and worrying about for quite a while, but the moment has kind of arrived. It's here. Yeah, it's very, you know, it just shows you that the supply side stuff that's on this is just not going to get dealt with. Instead, you know, policymakers are very likely to adopt a fiscal crunch at the same time that you have a major crunch. So you're basically going to get squeezed from both ends. And unfortunately, I think we're headed in for very hard times.

Let's move on to the crypto part of this. Just basically, people are calling it Black Monday as to what happened yesterday. Let's put this on the screen. Did a decent job of just summarizing this. This is from the Indian press. But Bitcoin and Ethereum crashing over 70% from their peaks, with investors losing over $2 trillion in eight months. So the price of Bitcoin, even right now, is trading at a low that we haven't seen in a long time, $21,000. I believe that that is the lowest price since 2020. So almost two years of gains erased in those markets. Ethereum also as well. Bitcoin, obviously the original kind of cryptocurrency that absolutely took off. But Ethereum was one which had been used quite a bit

in the NFT marketplace, and others kind of became a secondary asset. It has much more ability in order to have faster transactions and these things. That obviously also crashed. And if you consider that, let's go to the next one, which we are seeing chaos in the crypto trading exchanges themselves. So Celsius, which was one of the largest crypto trading networks, actually banned trading for a long time yesterday. Freezing withdrawals as all of those assets began to plunge. Here's what they said, quote, due to extreme market conditions today, we are announcing Celsius is pausing all withdrawals,

swap and transfer between the accounts. Quote, we are taking this action to put Celsius in a better position to honor over time its withdrawal obligations. So anytime that you have a bank or a quasi financial institution say, you can't take out money and you can't do anything about it, people are obviously going to panic. And Celsius definitely took it on the chin.

It reminds me also of a filing. I believe it was an SEC filing by Coinbase, which put out and they said, look, we're not in a position right now where we have to stop trading or we have to do anything. But it is possible that one day, should market conditions arise, that you won't be able to withdraw your Bitcoin. So it's like, wait, hold on a second, what? And that was buried in one of their SEC filings. This has always been, and I always warn people whenever they get into this, I'm like, listen, there ain't no FDIC that's coming to save you in terms of $100,000. If you have crypto, it is not insured whatsoever. You're basically putting your faith in that financial institution. And we've now had several instances, not only Celsius, but we'll

remember that stablecoin story that we talked about here, TerraUSD, which basically just stopped floating one-to-one to the US dollar. There's major, major problems that are happening. And like I said, let's put the final one up there, which is that they're referring to this as Black Monday. I mean, look, the reason why it's going down, I think there's a lot of cope that people are talking about. I think the basic fact is that Bitcoin, and look, I love Bitcoin, but let's be honest here, Bitcoin people, which is that it's basically trading as an asset that tracks with the S&P 500. Same with a lot of these places. And with the ability and the crunch in cash in particular, lack of liquidity, people are pulling out of all assets. And that also includes Bitcoin, Ethereum, and the crypto market. So it's actually an interesting

theory that I'd seen floated by a couple of friends of mine before that loose monetary policy actually was juicing the crypto markets, which- Oh, there's zero doubt about it. Zero doubt about that. Seems to be true. Yeah, no, there's absolutely zero doubt about that. I mean, ultimately, crypto is not used very much at all for as like actual money mode of exchange. It's something to bet on.

I mean, it's a highly speculative asset a highly speculative asset with nothing really hard backing it, and certainly no government institutions like the FDIC backstopping your losses and preventing bank runs. The thing with Celsius is this is just basically a bank run with no government protection around it. There's all this language and lingo around crypto like this is just basically a bank run with no government protection around it. So there's all this language and lingo around crypto, like this is something totally new and totally different. And in some of these instances, it's like nothing really new, just you as the consumer are less protected. Like that's the innovation.

I mean, they have a quote here actually from someone whose name is Corey Clips, and he's a CEO of a different, of Swan Bitcoin. So he's like a pro-crypto guy. But with regard to Celsius specifically, he says, this was yet another bank run. You're not reinventing anything here. They were promoting their services as a better savings account. In the end, you're just another unsecured lender. So that's the reality.

And a lot of that sort of like, you know, shaky underpinnings is being exposed right now as, you know, the markets fall and crypto sort of leads the charge. Because, of course, when the markets drop, the very first thing to drop the furthest and the fastest are the most speculative assets. That's crypto. That's NFTs. I also just want to say one other thing. The chief executive of Celsius, this is how disgusting some of these people are. This guy's a scum. Hours before they suspended withdrawals, totally screwing over the people who had trusted them. He hit out at critics

on Twitter, denying users were having trouble withdrawing funds and accusing them of spreading FUD, a popular crypto acronym for fear, uncertainty, and doubt hours before they pulled the plug. That's how scummy and sleazy some of these actors ultimately are, how they will directly lie to the people who have like trusted them and enriched them the most. And that's why all of this, you know, it does really upset me because I think there are a lot of people who are going to be beside themselves, who really believed and put their life savings into it, really risked it all thinking they were getting in on the new big thing. And now that everybody expects a recession,

you see the market's dropping and the writing is on the wall, but it was not that long ago that the sort of conventional wisdom was this mania of the stock market only goes up. It will only go up. There's no risk. No matter where you get in, it's just going to keep going up and up and up. And crypto is the safe hedge against inflation and all of these things. Total fairy tale. And that's what really disgusts me the most here is the people who are involved in these pump and dump schemes and just really took people for a ride and in many instances totally destroyed their lives. NFT one is where I'm particularly sense because I'm not

going to call out anyone in particular, but there are a lot of people on YouTube and online who have been pushing younger men mostly in order to invest a lot of their life save or even take out loans in some cases in order to invest in NFTs. They're like, you're getting in on the next big. And look, we all know, you know, Beeple and all those guys, yeah, they made $100 million. But a lot of these people got really left holding the bag. And considering also that we just had that story a couple of weeks ago about the OpenSea head of product getting indicted for insider trading, that was a rife amount of fraud.

That was pretty obvious, I think, to a lot of people within this. I do think that people who are in the crypto space and others have a duty in order to try and push back against this. And unfortunately, I've been kind of in the space since 2017, and I watched it all get taken over by a lot of scammers. Really?

Oh, yeah, absolutely. I mean, if you go back to the ethos of kind of the original Bitcoiners, it really, look, I know you may not agree, but it was very, it was a utopian kind of ideal of like, we're going to hedge against inflation. Yeah. And it was like, look, we know the financial crisis, it shook our faith in the markets of federal reserve and quantitative easing. We're going to have this asset, which will allow free flow of money that the government can't crack down on in some cases. And there was a lot of utopian ideals about like Bitcoin nation and like re-imagining government. And then frankly, I think the Winklevii kind of coming in and starting the Gemini trading exchange, trying to start, well, what they did is they tried

to normalize it on wall street. So what they did is they came in, they started the Gemini trading exchange and they kind of tried to start like a Bitcoin ETF and try to get certified by the market and push financial institutions into Bitcoin. And then from there, you saw the explosion of not just Ethereum, because the Ethereum currency had been around for a while, but building stuff on the Ethereum platform. And from there, and I'm sorry for those who are getting a bit wonky, something called DeFi kind of came on the scene, decentralized financial instruments and currencies. That's where we started seeing the US dollars and some of the scummiest kind of behavior. Because I would see people who are giving out basically high interest loans on these things that have no, imagine this, it's almost like mortgage-backed securities. You have a speculative asset like

Bitcoin or Ethereum, and then you take out like actual cash loans at a 20% interest on that. Well, you know, it works until it doesn't work. Right. No, that's really where we're at now. So I've seen in the last five years an explosion, very much moving away from the kind of screw the man ideals in the crypto space. Maybe it'll return to that.

I don't know. I mean, you know, I'd be happy if it did. There'd have to be some like dramatic reform because now it's just- I mean, it's down to 21,000. Here's the thing. When you don't have money, a lot of stuff just falls to the waste.

I just saw Coinbase. They just put out this morning, just came across the wire. They're going to cut 18% of their staff. So, I mean, that company just went public to a multi-billion dollar valuation. I know that probably your impression of me, people out there, is that I'm just a crypto hater and always have been. That's not actually the case.

I was open to it. I was kind of crypto agnostic. And I do actually think what really turned me was the advent of NFTs. Because then I was like, oh, this is just bullshit. This is just bullshit. Like, this is just bullshit. And that was kind of my window into seeing how the original promise of crypto, which again, like the initial, you know, manifesto about what it was all going to be about. It's cool. It wasn't about like, this is going to be a new casino that we can all bet on and get, you know,

you know, and get yours. It was about, this is going to be an alternative mode of exchange, that this was going to be like practical and pragmatic. It was actually going to ease transaction. That just has not happened. Instead, it has just become a casino. And it has, of course, attracted some of the like scummiest promoters who the only they

don't care about any sort of like idealistic values, whatever they say to sort of lure you in. They just care about getting theirs. And they care about being, you know, up higher on the pyramid scheme and fooling, finding the next greater fool. So it really does. It really does upset me because like you said, it's a lot of young men who, you know, their whole life is going to be set back if they invested significantly in this, if they bet their future on this,

they thought this was going to be their way to be one of the players in the game instead of always getting played and always getting screwed. And instead, they just ended up being another mark. It really is sad. Hold fast, gentlemen. That's the lesson I've learned over several years. Don't sell it just yet. Okay, let's move on to Ukraine.

Obviously a lot going on there. Crystal, you flagged this particular story. Yeah, so let's go ahead and throw this up on the screen. U.S. lacks a clear picture of Ukraine's war strategy, officials say. The subhead here is intelligence agencies know far more about Russia's military, even as the United States ships billions of dollars in weapons to the Ukrainians. And this is not just like some random analyst's opinion. Avril Haines, who's the DNI, the Director of National Intelligence, testified at a Senate hearing that, quote, it was very hard to tell how much additional aid Ukraine could absorb. She went on to say, we have, in fact, more insight probably on the Russian side

than we do on the Ukrainian side. They go on to note in this article that, of course, the United States, and we've covered this probably more here than almost anywhere else, has been providing regular, real-time intelligence updates to the Ukrainians, helping them to target incredibly significant individuals and assets like that warship that we talked about. And yet, in high-level conversations, U.S. military intelligence officials are not getting that reciprocity from the Ukrainians, of course, since they've been quote-unquote friend of ours. We didn't develop any sort of intelligence capabilities to spy on them and figure out what they're doing. But we do, of course, have the capability with the Russians.

That's why we understand more about what the Russians are doing and what their losses are. So it really is an extraordinary situation. I mean, and the thing that boggles my mind to hear Sagar is we have a lot of leverage in this situation. So if we just said to them, look, we're not sending you any more until we actually know how you're doing, what your plan is, what are the tactics? What does it look like? Where are these weapons going to? Um, we could very easily say that, but apparently we are completely comfortable just flying blind here and crossing our fingers and basically like trusting that ukrainians who have every incentive to you know i'm not blaming them or researching them for this they're in a fight for their survival they have every incentive to lie and

manipulate us in whatever way is convenient for their war effort we're just accepting that as fine look i mean this is it's always so difficult to have these conversations outside and callous nobody's saying the uk the Ukrainian cause is unjust. I think that they're better actors in this situation. But they have their own incentive. They're fighting, like you said, for the literal survival of their country. And let's also be honest, they would not be even around both today and, well, both in the past and today if it weren't for the United States and for the West and NATO countries. So I think that given the fact that we basically saved them from complete ruin,

we deserve a hell of a lot of say into actually what goes on on the battlefield. And instead, it seems that the Ukrainians don't really want to tell us anything. And I guess in a way, you shouldn't blame them. I don't blame them. I blame our officials for not demanding it. Keep it coming.

They're like, keep the checks rolling and all of these tanks and bullets. Oh, it's going great. Don't worry about it. Keep it coming. They're like, keep the checks rolling and all of these tanks. Oh, it's going great. Don't worry about it. But don't you dare stop it because we need it. And yet the current indications that are coming out are actually not great, which also raises a question to me, which is what the hell was the point of all this $44 billion if it's not even actually making as much of a difference as we were originally promised? So let's put this up there on the screen. Ukraine is now telling specifically both NATO and the West that they fear defeat in the East without a surge in military aid. And actually, the new information

that we're getting is that this is according to the Ukrainian government, is losing between 100 to 200 soldiers, KIA, killed in action every day. That is with about five times that number that are injured daily. This is not a joke. 100 to 200 casualties, or sorry, 500 or 600 casualties per day on the battlefield. And when they point to the amount of Russian firepower that is being brought to bear, it is genuinely stunning. I mean, they are talking here about Russia, despite the fact that, and this is what we warned about, yes, they have lost a significant amount of materiel. They've lost a lot of lives. They have lost prestige on the world stage, all of that.

They are still a great power in their own right. They have a tremendous amount of military capability. And the Ukrainians talk here about being outgunned at a pretty significant level. And that also raises the question, it's like, well, where did all this $40 billion go? So according to this, President Biden has released 700 million in these new weapons deliveries to Ukraine.

That's the first slice of the $40 billion aid package. Well, what are we doing with the rest of the 39 billion? What's happening here? Was it just, you know, and again, I mean, I really have no idea. And the Ukrainians are actually begging the European Union to also pass some new measures and to deliver new weapon systems. I mean, have we not already delivered a bunch of weapons systems? Like, are they telling us that we're so incompetent that we can't even give them the material that they need? This is where it matters for our government to actually understand how things are going on the ground. Yeah. Because that really changes what the smart move is. I mean, you know, for a while when Russia really faltered and flailed to start with. And basically, I mean, this is also the military analysts, the defense intelligence

analysts, they completely overestimated Russia's capabilities, just as they completely overestimated also the Afghan government's capabilities. They don't have a great track record here. So Russia dramatically underperforms. Then there starts to be this heady idea of like, oh, maybe Ukraine can win. So let's flood them with everything that maybe will get the maximalist outcome. They'll be able to completely win. They'll be able to push Russia even out of the territory that they had occupied prior to this invasion and this war. Well, now that situation has very much shifted, and the Ukrainians are even being forced to admit at least part of the reality that they are suffering significant losses in the eastern part of the state. So all of these dynamics have a

dramatic bearing on whether it makes sense for us to continue the flood of weapons into the state, whether it makes sense for us to, this is what I've been pushing for the whole time, to really put pressure on for both sides to come to the table and try to negotiate a settlement, which is going to include pain and significant concessions on both sides of that equation. But if you don't actually really know what's going on in the battlefield, what the plan is, how many losses are being suffered, what kind of equipment they have remaining, you can't make that calculus in any sort of an intelligent way. I'll also say this. When is enough? What's enough? Because if $40 billion ain't going to cut it,

how much more do you need? $500 billion? $600 billion? I mean, look, the conflict has now, let's put this next one on the screen, which is that things are not going well for the Ukrainians. The Russian forces have apparently cut the last, I'm not even going to try and say this. Severodonetsk. Severodonetsk escape route in the Donbass region. And the fighting in the Donbass, the Ukrainians are not going to give up anytime soon. So the front line is basically where the front line was eight years ago.

And now you have a long, grinding war. Both sides have lost tens of thousands of people, both in killed in action and in wounded. There's no giving up on site. We have basically committed ourselves to giving the Ukrainians whatever they want to accomplish, whatever they want. So are we just signing up for an annual appropriation of 40 to 50 billion for the Ukrainian military? Well, an annual appropriation, that lasted apparently like a month. Well, this is my question. I don't understand. I don't understand what exactly is going on in terms of our government policy, because there was a promise, you know, kind of in the beginning, you're like, oh, this is it. You know, this is the final

push, but you know, they're going to need more. They're already the 40 billion they say is not enough. They're begging the Europeans and them to send more. And look, I think you Europeans should be sending the bulk of the weapons and that we should then be sending, you know, relative to our own security situation. But the real question I think think, for the US is at a certain point, we actually do need to make a choice and say, okay, enough is enough. We've given you as much as we possibly can. And yet, there is no discussion of that here in Washington whatsoever. And I also really do question, given what I talked about in our earlier block, which is that all of the structural factors that led to cheap gas prices, they're gone. And one of the biggest ones that you actually could fix

is the Russian oil embargo. So the West, we have an extraordinary financial incentive, literally, in order to try and get this thing to some sort of close and negotiate towards a position where we can actually have Russian oil reenter the market. But unfortunately, for political reasons, I don't think that that is the case. I also want to say this, which is that there's been a perverse incentive where, you know, all these Russian sanctions, you know, Russia's actually doing okay right now. They have an account surplus of $110 billion for the first four months of this year from $32 billion in the same period last year. Why do you think?

Because oil prices are sky high. And because the West aren't the only players in the game, India, China, many other countries. You think they're not gonna buy discounted Russian oil if they can in an overall hot market? They'd be idiots not to. So Russia's actually making a boatload of money. Their IMF says that their economy might shrink by about 8.5%. Now, listen, that is devastating. I don't want to

downplay that. But Ukraine is going to shrivel by 35% as a result of this war. That's a disaster. It's so easy, too, to ignore. Of course, the most pain is in Ukraine with the people who are being slaughtered and their towns destroyed and their lives upended. No doubt about it. Partly because of this war, we now have almost 50 million people facing famine around the world. Yeah, that's also true. And so, I mean, you have not only the oil prices, gas prices going up and up and up, food prices going up and up and up. food prices going up and up and up. I mean, these are real consequences for people around the globe, especially the most vulnerable people around the globe who were already struggling. It's all exacerbated by, you know, rising climate droughts and extreme weather events

that have also caused crops to fail in significant places that are contributing to the catastrophe. So these are not costless decisions. I know sometimes it feels like when Congress strokes a check for $40 billion, oh, it's now, you know, what difference does it really make? But it's really not even about that as the austerity that is being imposed around the globe. And again, in a lot of instances and 50 million instances with absolutely dire and devastating consequences. So there's no end game inside here. I mean, to be honest with you, probably the window for negotiations where the Ukrainians would have been in the strongest position is after they had pushed the Russians back

out of a number of cities. And it seemed like they were on the march, and it seemed like, oh, maybe they have the upper hand. Maybe they can actually win this war. That was when they were in the strongest negotiating position. Now that they're having to admit to these significant losses, you know, the Wall Street Journal piece that we had up before, Ukrainian officials are saying that this is, and this is, keep in mind, this is their spin, and this is an attempt to get more weapons funding from us and from the Europeans.

But they say, without a broad and rapid increase in military assistance, Ukraine faces a defeat in the eastern Donbass region. But that's not all. They say that would pave the way for Russia to pursue its offensive to Odessa, Kharkiv, after regrouping in coming months, they say, potentially all the way back to the capital, Kyiv, after that. So the fact that Ukrainians were able to push them out of some of these places, that's not set in stone. Those gains can be reversed, especially if Ukraine is outright defeated in the eastern Donbass region. And right now, from what we can tell, it is not going well. Yeah, it's just all about political pressure, you know, on Putin, which is right now, from what we can tell, it is not going well. Yeah, it's just all about political pressure on Putin, which is right now he doesn't have a lot of incentive, obviously, in order to – especially with the high oil prices. Right. That's not going away anytime soon.

Yeah, that's floating his economy. It's okay. So he's going to be able to float the economy and bankroll a lot of what's happening here. So, look, yeah, I mean, the fact that we have given them so much and this is the end result, look, they obviously are heroic. They've been able to push back and more. But the more and longer this grinds on, the worse I think it is going to be for the Ukrainians just because that's how it works when you fight a superpower. And that is the longer and more likely that we get pulled into this thing in the long term because the longer that conflicts run, the more likely that things can go wrong. All it takes is one new advanced weapon system that the Ukrainian guy barely knows how to use, and that is open source.

That's been out there that we have to train these guys how to use these weapons because they literally have no idea and have never had any training on them before. Yeah, it's a different plot. They're complex, highly technical. I'm not denigrating them. It just is what it is. And so, look, all it takes is one of those to get fired into the wrong place, one commander, and that's it. And then now we're in a whole other diplomatic snafu. And also remember, this is the other kind of chauvinistic mindset for a lot of Americans. We're not the only player in this game. There are

the Lithuanians and the Estonians and the Romanians and the Brits and the Germans. I mean, in France, these are all NATO countries. So we also have to trust that they are doing the right thing in terms of what they're helping the Ukrainians with, because an attack on them is also going to eventually bring us into this. And we have a massive alliance. Now Finland and Sweden are apparently going to be in this thing as well. So the potential for a massive escalation,

which is completely accidental, remains. And everybody continues to say like, oh, well, none of that has happened yet. It's been four months. It's been 100 days. The idea that you can evaluate the efficacy of your policy after 100 days is insanity. 100 days after the invasion of Iraq, we would have said there was an explosion of freedom in Baghdad. And then the invasion of Iraq. 100 days after the invasion of Iraq, we would have said there was an explosion of freedom in Baghdad. And then the invasion of Iraq. 100 days after knocking Gaddafi off, you could have made a case. You're like, hey, Libya, look at this. People are choosing freedom. All of this. Call me in five years and we'll figure out exactly how this thing all worked out. Big news coming out of the Fed yesterday. Let's go ahead and put this up on the screen here. So the Fed approved a 75 basis point increase. Again, 75 basis points, that just means 0.75 of a percent,

for some reason they like to say it that way, on Wednesday. That is the largest rate rise since 1994. All officials at that meeting projected rates rising to 3%. And I do think we should reflect for a moment on how much the Fed has moved in terms of the lengths they are willing to go to tighten the economy. When you say tighten the economy, that means taking money out of your bank account. I mean, that's what they're trying to do here and very, very likely to trigger a recession at this point because what they have done so far hasn't worked. I mean, we just got this extraordinary inflation report last week that led them to move from increasing 50 basis points to 75 basis points. Some analysts were even saying we might get 100 basis points. It looks very likely that we'll be at 0.75 for the next meeting as well. And that's a very different landscape than we were looking at just very recently with the Fed. Let's go ahead and listen to Fed Chair Jerome Powell gave a little

bit of a presser afterwards explaining their thinking. Let's take a listen to that. I will begin with one overarching message. We at the Fed understand the hardship that high inflation is causing. We're strongly committed to bringing inflation back down, and we're moving expeditiously to do so. We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses. The economy and the country have been through a lot over the past two and a half years and have proved resilient. It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all. They are also projecting unemployment is likely to go up.

They are projecting economic growth is set to slow. So the specifics here are officials projected 1.7% GDP growth this year and next. That's down from March projections just from March of 2.8% and 2.2% respectively. The unemployment rate projected by all but one official to rise over the next two years. And, I mean, ultimately when you are lifting the rates, that's basically their goal. I mean, that's the goal of this type of action. Yeah, I just wish they would be honest. Right, that's the only thing that this is gonna ultimately lead to

is they want to make it so you have less money to spend and that's their only tool for ultimately getting inflation under control. You're screwed either way. I saw this elitist take on this. So like, just so you know, when the Fed raises interest rates, they're paying you to save.

Oh yeah, I'm gonna take my 0.75% increase. By the way, what are the savings rate interest rates right now? Like 0.05 or something like that? Credit card debt is the highest it's ever been in history. I'm going to take the interest on that, and then I'll spend it on my gas, which is up 25%. And we'll see. So I've saved 24.5.

Thank you, Fed. Congratulations. This has real implications for the housing market. Let's put this on the screen. We've been tracking this closely. The mortgage rate is now up to 6.3%, up from 5.5 just a week ago. Remember, as we said, forget the exact math, but every increase in a single percentage or so means that your mortgage actual payment is double the next month. So as we continue to see this happen, 6.28% versus the three or so percent, which was just six months ago, versus the one something percent that was a year ago, you are going to have a total freezing of the housing

market. Just as this morning, the market hasn't opened yet. The Dow is down 600 points on the futures. And for the very first time, housing permits have collapsed in the month of May. So that's the latest data that we have. And when I say collapsed, I mean one of the most precipitous drops we have seen in over two and a half years, just looking at that data that just broke this morning. So why do you think that is? Who's going to build a house when the mortgage is at 6.3%? Now, you could say it's too hot. I completely agree. But there needs to be a level of balance. They're going to push us into a recession. Recessions mean that people die. There's no way to just, it's not just people lose their jobs. A lot of people kill themselves during

depressions or recessions, a lot. A lot of people do not pursue healthcare that they actually need, life-changing surgery. A lot of people continue to work, which leads to stress, which leads to death. I mean, the after effects and follow-on that we saw, I mean, I personally think that one of the reasons we even had the opioid crisis is because of the Great Recession. There's a decent amount of data

in order to link those two things. Yeah, no, that's right. That is very, very true. Now, just to give a little bit of math behind what you were saying, from that article, they say on a $400,000 home, which is now crazy to me, like actually less than the median house price, $400,000 with a 20% down payment, the monthly mortgage payment went from $1,400 at the start of January to basically $2,000 now. Wow. So effectively a $600 increase on your mortgage payment over the course of just a few months.

That doesn't include homeowners insurance nor property taxes. Megan McArdle made an interesting point as well, which is that, you know, people are going to be very reluctant also to sell their homes because they don't want to jump from like, you know, let's say a 1.75 percent mortgage to a 6 percent one. Go ahead and put this tweet up on the screen. She writes, if mortgage rates stay high, one thing I expect we'll see is a collapse in willingness to sell homes. It would take a lot to get me to trade my 1.75 percent mortgage for a 6 percenter because, yeah, it makes a massive, massive difference over the long haul. And, you know, I feel like we've been beating a dead horse with this, but it is so important and so central to people's lives. Because you have a president and a Congress and, you know, two parties that are unable, unwilling to act, the Fed is the only game. And part of how we ended up in this situation with high inflation to start with was because the Fed is the only game. And part of how we ended up in this situation with

high inflation to start with was because the Fed was the only game. I mean, their action during the coronavirus crash, pumping trillions of dollars into these markets, backstopping, inflating all of these bubbles. I mean, that was the start of how we ended up with inflation across the board. So they are, in fact, partly culpable for where we end up today. And certainly they're culpable both from their actions there and also during the 2008 recession for massively inflating inequality as well. And, you know, we've got a lot of problems that are causing inflation. I think we should all be troubled by the fact, too, that what the Fed has already done hasn't worked because there's also no guarantee that these increases in rates are

going to fully address the inflation issues that we even have because they're not not. I mean, look, part of it was demand. But honestly, a lot of the demand part has already burned off, has burned off, save credit card debt sky high savings way down. So a lot of that is already burned off. And yet that's the only lever that they're willing to pull. And that lever is the one that destroys you and your finances rather than dealing with, oh, hey, it's their supply chain issue. Oh, hey, we have a war in Ukraine that's causing

massive price spikes as well. Not to say that's the only thing going on, but the Fed has nothing to do with the Ukraine war. The Fed has nothing to do with supply chain issues. Those all continue to go undealt with and unresolved. And you are unlikely to get inflation under control anytime soon. I mean, look, even if you crash demand, OK, let's say we crash demand. We induce a recession. I mean, people still need to drive. Yes, some extra driving might come down, but the gas price is still probably going to remain above $4 a gallon.

That's not a victory, in my opinion, right? If you look at the housing market, the same thing. Okay, you've slowed it down. You've basically frozen up the elite housing market. Well, number one, a lot of people who are very wealthy are still going to buy houses. Permanent capital, they don't care about a 6% mortgage rate if they can earn a 25% profit. So that only even continues to keep you frozen out of the game. Food. I mean, look, we've talked here endlessly. I've got a piece in my monologue about how natural gas markets in Europe are seizing up

because the Russians are cutting off natural gas to both Germany and to Italy. That is going to drive fertilizer prices sky high. We are already watching a massive fertilizer crunch here in the U.S. That's going to continue to increase the amount of food. China is opening up to a big degree, transitioning away from COVID zero. Guess what? That means the demand for gas is going to go up. And China, currently, it seems all indications President Biden is actually going to lift tariffs on U.S. consumer or on U.S. goods that actually could conversely spike Chinese imports from the United States, which would only continue to drive up inflation. Everybody says you could

save money. They don't consider that the demand of these products could increase. Soybean markets, agricultural markets. It's very likely, actually, that lifting Chinese tariffs will almost certainly increase the price of food here in the United States. So from the supply side problem, we have major issues which are not even being addressed. The White House press secretary asked the gas companies to be patriots and to lower the price of gas because that's how capital markets work. Congratulations. I just can't even like with them. They are so incompetent, foolish, impotent, just the picturesque of the worst possible people that you would want. Well, I mean, here's the reality. Neither of these parties under a sort of like Wall Street centric market

obsessed economic approach have any answers to this outside of the Fed taking a sledgehammer to your bank account? And so I think that's really where the handcuffs come in is Biden's whole sort of economic orthodoxy, always positioning himself in the center. This is what my monologue is on and never wanting to stray outside, like color outside of the lines and get creative here. So, yeah, if you're stuck in this like, oh, we just got to let the markets work themselves out mindset, then you believe, oh, what can we do? We can't really do anything. We can do these little things around the margin. Maybe we'll deal with the tariffs. Maybe we'll take the tariffs off, which even the people who are pushing that don't expect it to have much of a positive impact. So even in the best case scenario, let's say you're wrong about it

fueling inflation. Even the best case scenario, no one is saying this is going to have like a significant impact. Biden himself, they did this whole, let's go to Iowa, let's boost ethanol production. Let's make the case that that's going to lower gas prices. Biden himself went back to the White House and was chewing out Ron Klain, like this is basically bullshit. I don't believe that this is going to have any impact whatsoever. So they know that the things that they're doing are impotent. The best they can do is send a strongly worded letter to the oil and gas companies. Give me a break and say to like the Fed, go do, we're not, we're not going to interfere, but go do your thing. And basically, you know, crush working class people and trigger a recession. Yeah. That's all these parties really have to offer.

Listen, that ethanol thing especially pisses me off because part of the reason that we have lower refining capacity is because of conversion over to biofuel. So it's like these people really, at a very basic level, they don't understand what is going on. And it's bad for the climate too, by the way. It's like incredibly. It's horrific. Beyond that, it doesn't work in terms of emissions and in terms of what it even means in order to buy. It's a bullshit. It's not even correct. It's a terrible policy and has been pushed for a long time by big interests, ag interests far more than anything else. Well, it's the fact that Iowa comes first in the presidential primaries. I mean, that's that's the whole reason we have that gigantic corn subsidy.

So, yeah, I'm really glad that we have it so that we can all pay more for gas. Let's talk about journalism. Journalism is important, right? Let's put this up there on the screen, or at least the journalists tell us that it is. 65% of journalists surveyed in a new Pew Research survey say that news organizations do a quote, very or somewhat good job of reporting the news accurately. Do Americans agree? No, it's actually 35% of Americans who say that they do, while 43%, the majority, say that journalists do a bad job of reporting the news accurately. I also just love the serving as watchdog over elected leaders. If you look at the split, a majority of Democrats, or sorry, a majority of journalists, I guess somewhat interchangeable, of journalists say that they do a very or somewhat good job of

serving as a watchdog over elected leaders. Only 29% of Americans agree. In fact, 44% the majority say that they don't. Same thing on giving a voice to the underrepresented. 46% of journalists say they do a good job. Only 24% say that they do. Americans overwhelmingly agree at 45% that they don't do a good job, a very or somewhat bad job of doing so. Same thing on managing or correcting misinformation. 43% of journalists say they do a good job. 25% of Americans say they do a good job. 51% say they do a somewhat or a very bad job of doing so. So what is the overwhelming trend that emerges from this? Journalists think very highly of themselves. Americans, not so much. They pretty much are reverse on the question of every single issue. Let's put this up there on the screen too. 55% of journalists say that every side does not

always deserve equal coverage, greater than their share, who say that journalists should always strive to give every side equal coverage. So I really think that that is also revealing, which is that journalists say you should always strive to give every side equal coverage, but every side does not always deserve equal coverage. That's according to Americans. I'm somewhat torn on that because I can understand what the American people mean whenever they say every side does not deserve equal coverage. But when it gets put into practice, that's when it becomes a problem. Okay. That's a complicated one because it's like, what do you mean by that? Because if you're talking about facts or for the classic example is climate. Okay. You should not give equal weight to the

three people out there who still deny that the climate crisis is real versus, you know, the 99% of scientists who are on the other side of that. So you shouldn't give equal weight to a side or like election denial, right? You shouldn't give equal, equal side to like Dinesh D'Souza's 2000 mules to the actual facts and reality. So when it comes to a factual issue, and I know that this is fraught because sometimes even the facts are very much in dispute. But when there's a clear factual issue, no, I don't think that Dinesh D'Souza deserves like equal coverage or an equal hearing to the reality of the election was not stolen. When it comes to things that are a matter of values and opinion, that's a different deal.

Yeah, 100%. And I think that's, you know, and I also, you know, I also don't have an issue with, I really actually don't have an issue with partisan coverage. What I have an issue with is when people pretend like they're neutral and they're actual partisans and they hide the ball. That's my issue. So that, to me, that one is a little more complicated. And,

you know, the question, it's hard in a poll question to get at some of the complexities of how you think about that new news coverage. I actually thought one of the more notable numbers here that you pointed to is the lowest marks given by the public, were for giving voice to underrepresented groups of people. And I think that that stem, that failure, clearly manifested and understood by the American people. And also, journalists didn't even give themselves great marks on this one either. I mean, this comes directly out of the fact that they hire from this elite monoclass. Oh, yeah, it's a complete class bias. And so, yeah, so if you want to give voice to other people and viewpoints that aren't typically reflected in elite media, hire from different parts of the country. Hire from different education backgrounds.

Hire from different class statuses. And you'll have a much better shot at having a much broader and more representative view of what actually is going on in the country and how people feel about it. This was also interesting to me among the journalists, more say that misinformation is a problem than that press freedom is a problem. So 71% say misinformation is a problem and only 57% say press freedom is a problem. The other thing that was interesting to me is that many more of the journos said that basically like fake news and misinformation is an issue than U.S. adults. So 71% say misinformation a problem for the journos, only 50% of adults, still a lot of people, but only considerably fewer

adults feel like misinformation is the big problem. So you also see a disconnect in terms of even their assessment of what are the problems and the threats to good journalism. The journalists see that threat very differently than the American people do. Yeah. The Americans are like, you're the fake news. You're the misinformation. That's the problem. I don't know. I mean, look, this is just data, which is just so transparently obvious. If anything, I think it probably overstates the support for a lot of these things. Yeah, true. I mean, if you really looked at it also in partisan breakdown, I think the most telling is whenever you look at it in terms of the number of primary Democrats who trust the news media versus Republicans. Because Republicans don't even

trust Fox News. But let's just be honest, a lot of older Democrats in this country love and deeply trust the New York Times and MSNBC and CNN, which is part of the problem. You have a deep institutional capture of what exactly they are, the lens in which they're going to coverage, and no wonder they're not going to have class coverage. And then that bleeds into everything. That's how they use the word Latinx in their coverage. And yet actual Latinos are like, hey, we don't say that and we don't like it. So this bleeds into everything. It has major partisan ramifications. Obviously, I mean, this is why I think our show is even successful is because these idiots have been doing the game this way for so long. And I honestly don't think it's going to

change. I think it's just so captured by this insanity that it can't reverse. Look at the Washington Post. We covered it. That woman, Felicia Samnez, had outwardly flamed her colleagues, outwardly defied her bosses, and it took a week for her to be fired. Taylor Lorenz is a liar, has materially lied in the pages of their paper, and they even basically admit to it, and she's not fired. So that's where the industry is trending. They have these people completely at hostage, and even the ones who don't agree are held silent because they're too afraid in order to fall under the gun and be harassed publicly on social media. So I just think it's going to get worse, and I have no problem with that. There was something else interesting in this data, which was a age divide between how journalists themselves feel about their jobs. So three quarters of journalists, 65 and older, feel that their job has a very or somewhat positive impact on their own emotional well-being.

Only 29 percent of journalists under 30 feel the same. So older journalists feel like they feel good about what they're doing. They feel like this job is positive and the atmosphere is generally good. Young journalists do not feel that way at all. And I do think part of that is these culture war battles that are overwhelmingly coming from younger demographics. And you also have a split on like older journalists are much more worried about press freedom versus the younger journalists, which are much more worried about like the misinformation thing. So you do have like a transition happening within news organizations to about the way that these people are approaching

their jobs. Absolutely. Some little announcements that we're excited about here at Breaking Point. So first of all, I don't know if you guys saw this, but we actually got some favorable press coverage here at Breaking Point. Very nice write up at the New Yorker. Go ahead and throw this up on the screen. This is from Cal Newport. And he uses this kind of a case study for what he describes as the rise of the internet's creative middle class. And he's talking about there was this sort of theory of a thousand true fans. Yeah, Kevin Kelly. This came from Kevin Kelly being able to support this sort of middle tier of creators.

And so he actually came into the studio and saw our operation. And he does a good job in this piece of capturing the day-to-day vibe of the show and the overall ethos. So it's always a little nerve-wracking when you engage with journalists and engage with the mainstream press. But this actually came out really, really well, and we're very pleased with it. When I first saw the email and it said New Yorker profile breaking points, I was like, hell. But then I was like, oh, it's Cal. So I know Calport and Cal Newport a little bit. I read his books actually for years.

Actually, right before I started Rising with you, I was on vacation and I read Cal Newport's book, Deep Work, which is one of the best books I've ever read. He wrote another book called, what is it, The War on Email or Why We Shouldn't Be Using Email. He famously is completely offline. I don't know what his argument was, but I already am on board with it. Actually, we had him on the show. I think you were not here for that segment. I think Marshall was in at that time, but we interviewed him.

He was here on Breaking Point. So he was vaguely familiar with the concept. And so anyway, so he's the one who emailed. And I knew Cal was a good guy. I'd read some of his previous work. I trusted some of his stuff. So we invited him here to the studio and he kind of profiled us in the context of this.

And I think what we're proud of, me in particular, is that this just does show you a way of an alternative funding model, which can work, can scale. It's funny, too, because while he was here, he was like, well, you guys are going to expand. And we were really weighing it. We didn't know at the time. But we really did strike gold with our subscriber partnership model, which is we don't own your content. You do whatever you want. We'll pay you and we support you. We put it on our channel.

You promote whatever the hell you like. Oh, you have a sub stack? Great, grow it. It's all win-win. You have a channel like James Lee? Subscribe, please. I want you to go and watch him. Max Alvarez, Ryan, all of these people,

Marshall's interviews, like these just enhance the product. Everything kind of grows up together. So really considering and discovering that model even after he was here, which was several months ago, and then watching it in the context of this, I think it just does show you the future. And look, I'm still really excited. And I know I said we were going to have a big announcement, but paperwork got involved. We will have tickets on sale for our road show as soon as the lawyers will allow me to announce it so there you go yeah there was a moment when cal was here when he asked

us like so what's like your exit strategy yeah and we're we both were sort of like what yeah well because he was like oh why don't you just build it up and take some cash and sell it and we were like i don't really have any interest in doing that yeah we're like not we were doing. Yeah, we were like. That's not why we're here. That's not at all why we're here. I hope that comes through to you guys, that really, genuinely, we love doing the show. We love hearing from you. We love trying to come up with new ways

to deliver a better product and, you know, a broader product and have on the ground. That's what really motivates us here. And so it was cool to see, you know, that captured in this piece a little bit. Yeah, he got it. Yeah, he did. It came through in the piece that he sort of that he sort of got what we were doing here. This is an iHeart podcast.