Breaking Points with Krystal and Saagar - Stories of Week 9/18: Housing Market, Putin's Escalation, Nuclear Threats, & More!

Episode Date: September 24, 2022

Krystal and Saagar's segments on Biden's Taiwan comments, Patagonia billionaire, housing market, China's economy, Putin's escalation, nuclear threats, & home depot workers!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/Chicago Tickets: https://www.axs.com/events/449151/breaking-points-live-tickets  Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

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Listen to VoiceOver on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Cable news is ripping us apart, dividing the nation, making it impossible to function as a society and to know what is true and what is false. The good news is that they're failing and they know it. That is why we're building something new. Be part of creating a new,

better, healthier, and more 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. On the Biden front, though, this is very, very important news, which is that President Biden, for what, the fifth time now in his presidency? I want to say, or at least third major high-profile time, has said now definitively that he as the American president would militarily defend Taiwan with U.S. troops. And then the White

House changing their response or changing and contradicting the president after he has said that now publicly. So let's take a listen to exactly what he said, and I'll tell you what the White House said after. But would U.S. forces defend the island? Yes, if in fact there was an unprecedented attack. After our interview, a White House official told us U.S. policy has not changed. Officially, the U.S. will not say whether American forces would defend Taiwan. But the commander-in-chief had a view of his own. So unlike Ukraine, to be clear, sir, U.S. forces, U.S. men and women would defend Taiwan in the event of a Chinese invasion. Yes. He said it as clear as day. He said it. He said it now three times. He did not leave himself

any wiggle room, right? Because the first response was like, in the event of, what are you saying, unprecedented attack. Okay, well, maybe you could spin that as like, oh, well, this attack didn't meet the standard of unprecedented. But at the end, he's like, so let's be clear. Unlike Ukraine, where we didn't commit this on the ground, with Taiwan, you would. And he says flat out, yes. Right. Then the White House, once once against oh no policy hasn't changed so let's reiterate ambiguity all of this the u.s maintains strategic this is from the u.s

from the state department and from the white house quote the u.s maintains strategic ambiguity on whether american forces would defend taiwan the taiwan relations act obligates the u.s to help equip taiwan to defend itself that's not congruent with what he said. This is like whenever he did the, by God, this man cannot remain in power. And the White House is like, oh no, this is not a declaration of regime change in Russia. We're like, yeah, but he's the president. Like he's the one who gets to decide the policy. As far as I'm concerned, President Biden now has made it very clear exactly what he's going to do in Taiwan. And the reason why this is so dangerous is mixed signals when you're dealing with nuclear powers is the exact opposite of what you want to do. Okay, you said you're going to defend Taiwan. Stick to it then.

That's now the policy of the U.S. government. Now you should maintain that. And at the very least, let's get the possible deterrent effect that that may have in the future. But now if you're Xi Jinping, you're like, what is the policy? Who is running the government? Because if I go, is Biden going to do it? Does he even run the government? Is it the White House? Like, you know, I mean, to them too, the idea that the American president can say something and then be contradicted by his own government, that makes no sense to the Chinese. So they're like, I don't know what the hell is happening here. I was actually, after I read that piece about like Biden war and we don't want World War III and all this stuff, I was like, okay, like I've got some disagreements, but at least these things.

And then I saw this and I was like, what the hell is going on here? I mean, this is insane. China is not Russia. Like the people who think we could do the same thing to China that we've done to Russia and like cut ourselves off economically, you're smoking something because the level of economic interdependence between us and China, forget about it. I mean, did we not learn this lesson during the pandemic when it was like, oh, guess what? We don't have masks. Guess what? We don't have like enough like materials for the shots. We rely on them for everything, for gowns, for PPE, for everything. And you think that we're anywhere close to being able to have the same response with China that we have with Russia?

That is bananas. Not to mention, how many Americans are out there clamoring for a war with China? Like, you want to talk about World War III? Let's talk about a direct military conflict with China, which is exactly what he is floating, not just floating here, saying definitively that he is on board for. So this is insane. And then you add to it the total contradiction between what he's saying and what the White House is trying to spin and what, it's a disaster. My thing is, is like, look, if that's a policy, then you need to orient all U.S US forces towards that. But this might, you know, Bridge Colby, who we've had on the show has

discussed this. He's like, look, if that's actually the policy is like you have to change literally everything about the US military, about the US alliance, about our economy, you need to prepare like all of this, because otherwise, if you stick by this policy, exactly for the reasons that you're saying, you could both possibly lose a war with China, and you could suffer complete economic catastrophe. I mean, it would be an economic catastrophe regardless, just because of interdependence with Taiwan. Absolutely. The other problem, too, is that the spokesperson for the Chinese government, obviously, they

see this and they're immediately saying that this is severely jeopardizing China-U.S. relations, stability in the Taiwan Strait. China is firmly opposed to this. And another problem is that I was reading actually very recently that ever since the Pelosi visit to Taiwan, once again, the Chinese government does not believe that the U.S. government had nothing to do with that visit. They're like, I don't believe that President Biden didn't want her to go. I don't really believe it either. I don't really know it. I mean, I think that she is enough of a narcissist to go.

I certainly don't blame China for reading it that way because I'm not convinced that Biden didn't green light it either. Right. So, like, I don't know. Anyway, if I'm the Chinese and I grew up in an authoritarian system, I'm like, I straight up just don't believe, like, so-called co-equal branches of government. So I get it from their perspective. And at the end of the day, their perspective, you know, matters equally as much as ours does. Well, there has apparently been almost a near total diplomatic cutoff between Beijing and Washington ever since then. You know, remember when they fired those missiles into around the Taiwan Strait after the Pelosi visit, there was no military deconfliction pickup by the Chinese military. So once again, like if you want that policy, I think that's fine, but then you need to be 100% committed to that.

And then we should at very least get the deterrent effect and prepare the U.S. armed forces and the U.S. military and the U.S. population for you know democratic buy-in if such thing were going to happen but you can't just offhand say these things like you did with regime change and then also have the White House directly contradict you it's incredibly dangerous for the future I really I really think it's it's so it's more destabilizing as if he wouldn't as if he didn't just commit to it in the first place. And I mean, I don't think it's fine in any regard, even if we were like aggressively preparing our military economy or whatever. We have taken some small, tepid steps like the CHIPS Act towards being more economically independent.

That's good. But we are nowhere there. And I don't want a war with China. I don't want World War III. That would be a disaster. That's the. But we are nowhere there. And I don't want a war with China. I don't want World War III. That would be a disaster. That's the bottom line here. And, you know, even the policy that we've sort of ramped up weapons shipments to Taiwan. I mean, now they feel like, okay, we've got a playbook with what we did in Ukraine.

Which, again, even that, thinking that is insane. Because China and Russia, totally different situation. But that seems to be what they're thinking. So they've ramped up weapons shipments to Taiwan. And even that is a really double-edged sword. Like I understand the impulse of like, let's arm them so that they are really prepared in case there is some sort of invasion.

But the other thing that can happen here, which may have been what happened with Ukraine, is that China feels like, oh, since we're arming them and we're shipping them all these weapons, making it more difficult for them. It's's like we got to go now or never or else it's going to be more difficult. Because that's what some people think happened basically with Ukraine. When we started arming them, when we started training them, there was a sense of Putin of like, I've got to act now before they get further down this road and it becomes impossible to take over this country ultimately. I think it's possible. I actually think it probably would have much less to do with us

and a lot more to do with China and domestic political conditions there. I don't really think it would have as much to do with U.S. I mean, we've been arming the Taiwanese since like 1973. So nothing we're doing right now is unprecedented. More what it would be is if they genuinely believe that their moment is now and they have no other choice, and also to stick with the 2025 plan and the 100-year anniversary of like the CCP and Mao's, you know, revolution or whatever. I think it would have a lot more to

do with that. And it's also if he especially had economic collapse and they needed the population in China to be united around something. I mean, people forget this. Like the Chinese population actually does really agree with the Chinese government on Taiwan. It's an uncomfortable truth, but it's true. It's like kind of the way that Russians believe that Ukraine really is an independent country. Most Russians believe that. Most Chinese also believe that about Taiwan. The idea that they don't have domestic political support on this is very, very misguided. So they have their own domestic political concerns. I think that would probably fuel their thinking more than anything. Look, I honestly have no idea. I do think they

probably had to learn something from Ukraine. I mean, they have to learn that it wouldn't be costless, that they couldn't just, quote unquote, get away with it. So anyway, I have no idea. Troubling. Troubling situation. We'll leave it at that. Next piece that we wanted to get to here. So last week, there was a big report in the New York Times. They got the scoop about how the founder of Patagonia, who's this kind of like hippie-ish guy who's like a rock climber and sort of, you know, accidentally. He always seemed like a cool dude. Yeah, I mean, this is not like to smear him. This is to smear the New York Times to tell you that they're bad at their job.

So this guy decides he's getting older and he's trying to figure out what he wants to do with his company. And he ultimately decides that through a series of mechanisms I'll get into in a moment, his family is going to keep basically control of it. And it's a private company. It's not a public company. And all of the proceeds are going to be donated to this nonprofit, which is meant to fight climate change and to support the environment. I think he cares a lot about, like, conservation of wild spaces and things like that as well, which makes sense as his background as a rock climber. So New York Times writes up this glowing article. Again, this is nothing against this guy who I have no reason to believe that he has ill intentions here

or whatever, but there was a really explicit effort to pretend that there were no tax benefits to him or the family from handling the company in this way. Go ahead and put the article up on the screen here. It says, billionaire no more, Patagonia founder gives away the company. Here is the technical specifics and how they describe it of how this is all happening. They say in August, the family irrevocably transferred all the company's voting stock into a newly established entity known as the Patagonia Purpose Trust. So that's the company and the voting stock goes there. Then the trust, which is going to be overseen by members of the family and their close advisors, is intended to ensure Patagonia makes good on its commitment to run a socially responsible business and to give away its profits. The Tweenards, I think is how you say it, I don't know, donated their shares to a trust. The family will pay about $17.5 million in taxes on the gift. Then they donated the other 98% of Patagonia's common shares to a non-profit called the Hold

Fast Collective. It's a 501c4, which they say allows it to make unlimited political contributions, but the family received no tax benefit for its donation. Okay, remember that line. Then they go on to very explicitly draw a contrast with another big company gifting for political causes that they had previously covered, but that one came from a right-wing billionaire. So then they say, Barry Seed, a Republican donor, is the only other

example in recent memory of a wealthy business owner who gave away his company for philanthropic and political causes, but he took a different approach in giving 100% of his company to a nonprofit, reaping an enormous personal tax windfall as he made a $1.6 billion gift to fund conservative causes, including efforts to stop action on climate change. Now, the reality is that that Republican donor, whatever you think, and I don't like the use that he is intending to put his funds to, it was the same basic structure as what the Patagonia did do. So the tax benefits that are accruing to the Republican donor are the same ones that are accruing to the Patagonia founder, namely the fact that because he used this mechanism, they don't have to recognize any

of the capital gains on this company. So the appreciation of know, appreciation of value, all of that, that would be a huge tax hit. That is all foregone and they're able to transfer it over with paying like very minimal taxes. Now it is true for both of these men, by the way, that because it's not going to a 501c3 where you could get a charitable tax deduction, it is true that they are not maximizing their tax benefits. But that's also true for the right-wing donor. So it's pretty, pretty remarkable. And, you know, they went out of their way to get, like, quotes from people in this Patagonia article saying, like, oh, it's so amazing and it's incredible that they're not benefiting from this and all of this. Again, I don't have an issue personally with saying, like, I support what this money is going to

and I don't support what that money is going to. But the fact that they just got the story blatantly wrong is a real disservice to everyone. Oh, it's completely ridiculous because everyone's like, oh, this is the good, you know, this is exactly also just shows you why it's very dangerous to play the good billionaire,

bad billionaire game. It's like, no, they actually all exploit the exact same loopholes in the tax code in order to just benefit whatever cause that they want. So once again, you can think, yeah, it's great that he avoided taxes in order to support climate change stuff. But if you support that, then you also are supporting the underlying mechanism through which the right-wing billionaire gives a billion six to the Federalist Society guy. So, well, as long as that loophole exists in the tax code,

it is going to be used for dueling political purposes. That's right. And then you have to just be okay with the fact that right-wingers exist too amongst the ultra-wealthy. Well, and here's the thing. Bloomberg actually accurately

covered this story. Let's put that up on the screen because I think it's important. And they go into the details and the parallels between what the Patagonian dude and the other dude did. And that it basically, with some small details, was the same structure and they got the same tax benefits. And, in fact, this allows the Patagonia billionaire to skirt $700 million in taxes. And they had some good quotes in this article from, you know, an analyst and expert on

sort of, I want to see an expert in like taxation and billionaires, I guess. But I thought he put it well. He said, we're letting people opt out of supporting all the expenses of government to do whatever they want with their money. This is a highly problematic from the point of view of democracy, and it can mean a higher tax burden for the rest of Americans. Using a 501c foreign trust lets him and his family continue to effectively control the company. And they say, if someone wanted to leave their votes behind after they died, we don't let people do that. But through these organizations, they're doing something similar, and their money is so much more powerful than a single vote. So again, I'm not saying that these guys have like ill intent or nefarious or

whatever, but the bottom line is rather than allowing their assets and their estates to be taxed when they pass. And for those massive 700 billion dollars in this case, million dollars, sorry, not billion, 700 million dollars in this case to go into government coffers where there's a democratic process where we all get to have a say in terms of what this money goes towards, whether it's roads or bridges or schools or war or whatever. Instead, they get to keep control over how this money ultimately is used. And we've talked a lot on the show about how, you know, the billionaires controlling these social causes and relying on the benevolent

billionaire to fund your causes is ultimately very problematic and leads to all sorts of other issues. You see this with Bill Gates and the public health sector as one example. Yeah, of course. Exactly. Bill Gates and the public health sector. I mean, so many of these guys, the Waltons and water rights in Montana. There's all kinds of insanity that's happening around this country. And this is exactly the issue, which is that if you want to defend this, okay, be my guest. But then just understand the exact tax mechanism, which is going to be used by everyone, every billionaire in the United States in order to dodge taxes. Yeah. To just basically donate to whatever cause they believe in.

Also, this is the more important one to me. He's actually avoiding the 40% gift tax on if he was going to give this money to his heirs because the man is 83 years old. Right. So his heirs now have to pay nothing. And they didn't build Patagonia, okay? They were just there along there for the ride. So now they get the social cachet of being a big spender in the Democratic Party and they don't have to pay any taxes. That's crazy. And I was reading an article this morning about the LA Times. This billionaire guy buys the LA Times. His daughter is like some crazy social justice lib and is literally making the LA Times like change its style guide language.

And they don't know what to do because they're like, yeah, I mean, it's the owner's daughter. Like, do we listen? And this is a huge paper like in Los Angeles. So, and at the time everyone hailed it. They're like, oh, Patrick, I forget. I don't know how to pronounce his last name.

Like he's bailing out the LA Times. He's coming in as a... It was like, this is the price that we pay for this total control. Do you want that guy's daughter to be controlling the style guide for a city,

the second largest city in America? That's nuts. Same thing with this guy and whoever his kids are. I don't know his kids. Well, the way you put it is really good. Just stay out of the business

of playing the good billionaire and the bad billionaire game. Just understand that all of these mostly men, with this large amount of money, it distorts democracy. Okay, Mackenzie Bezos, though, is a good example. Oh, absolutely. She gets all this money from this divorce. She rules left-wing women. She is the single largest donor.

The amount of money, given the way our system is structured, is incredibly distortive and incredibly—you don't want to talk about threats to democracy. Like, the fact that they can create this whole separate ecosystem that none of us has any say in whatsoever, like, that is a real threat to democracy. So, yeah, not the New York Times' finest moment in how they covered these things. And it really is funny. I encourage you to go and read the article that I think was actually a very good article written by Ken Vogel about the right-wing dude. Yes. Compare it to the fawning, not critical at all, didn't raise any of these questions article about the Patagonia dude. Go and compare them side to side. The types of quotes that they got on the one hand versus the other hand and the way they presented everything, it is like the definition of propaganda. And you can see it.

This is an actual, like one of the most perfect, glaring examples of fake news. I think it's important that you set it up too because everybody in the left-wing media just doesn't want to talk about it. They're like, well, we support the cause. It's like, it doesn't matter. You reported something that was actually factually incorrect. I actually, the person I reached out to, I don't think he would mind me saying this, but because he had done a lot of reporting on the right-wing donation to David Sirota with the lever. And I was like, is this, because this looks like the same structure.

So are they just getting this wrong? And he checked in with, you know, the people that he relies on to understand the complicated tax mechanics. He's like, no, they just blatantly got it wrong. So, like, even putting, like, the biased cover, just, like, this just factually incorrect the way they present it. Pretty astonishing. Just another reminder, these people are bad at their jobs. Yeah.

Bottom line. Exactly. It's actually shocking. Let's get to the housing market in particular and put this first piece up on the screen. So, some brand new numbers underscoring just how expensive it is getting for people to buy homes. Why? Because mortgage interest rates are skyrocketing along with the Fed's actions. This tweet says the average 30-year fixed mortgage rate jumps to 6.42%. That is the highest reading since 2008. Let's take a look at this next piece, which is similar. The average monthly mortgage payment in the U.S. has shot up thanks to the Fed. This is from our friend

Joe Weisenthal. He says, that might push more people into renting. If I were a landlord, I might be tempted to raise the rent even more. By the way, when you look at these numbers, so the monthly mortgage payment for someone who's buying a home is now over $2,000. That has more than doubled since March 2020. So just two years ago, less than two years ago, if you were buying a house, the average monthly mortgage payment for someone buying a home was $1,000. Now it's $2,000. I mean, that is insane, the escalation there. Calculations based on the median, existing home price, average 30-year mortgage rate, and assuming a 20% down payment. And at the same time, you can see the way that housing becoming so expensive means that more people are forced to rent. Let's go ahead and

put this next piece up on the screen. Guess what? Rising rent prices are keeping inflation high. So we covered this when we got the last inflation numbers. That is a significant part of why we continue to see rising inflation numbers is because rents continue to escalate. Shelter prices rose 0.7% in August. That is the biggest monthly jump since 91. So huge numbers there. One of the biggest drivers of inflation, they say, has been higher rent prices, according to data from Zillow. The typical U.S. monthly rent was $2,090 in August. That is up 12.3% from just a year before. That is much higher than it was before the pandemic in February 2020. The nation's average rent was $1,660.

So even though big picture in a majority of markets that are being tracked now, these sort of like, you know, housing price, like the sticker price of houses is going down, the costs are going up because mortgage interest rates are so incredibly high. Also, we haven't seen that great of a decline in these markets. Why? Because people who are in their homes now, they likely have a low mortgage interest rate. So they don't want to move right now. They're not going to sell it.

They don't want to sell. They don't want to move because they know they're going to then get hit with these high mortgage interest rate costs, and that'll screw them over. So a lot of people are holding on to their houses, even though they might in other conditions sell. That's limiting the inventory that's available. So even though we have seen some price decline, it's not like this huge crash in the prices that makes it compensate for the fact that mortgage interest rates are now

so, so high. Yeah, exactly. So once again, just to explain it, whenever the housing market is more inaccessible, even to higher bidders, people who would have bought otherwise, they're going to rent. Whenever they rent, that pushes out other customers down to a lower tier, so they get lower quality housing, roughly at the same price because rents are rising, and we have a housing squeeze. At the same time that we already have a major housing shortage, what's happening is that the home builders themselves are going to either delay construction or they're not going to bring their full houses to market because they don't want to sell in the middle of the downturn because they can't recoup their investment. And they know that it would be

much better either to hold it, they can pause construction, they can work on other projects and other things. So that means that the available housing stock goes down. So you almost have a squeeze of rental markets. And once again, you know, it's the poor, the working class, and frankly, even the middle class at this point, who are all basically renting. I mean, it's almost nearly impossible to buy a house. Otherwise, high mortgage also makes it so that buying is not at the same value proposition, even if you do somehow miraculously have the cash in order to save and to buy a house. So it's a very, very bad situation all the way around. And finally, just to bring it back to inflation,

I mean, you could say like if rent right now is only up by 0.5%, quote unquote, over last month, here's the issue. Because it went up so high in 2021, so many people are locked into these astronomically high rates. And because the rate of rent has not gone down, whenever they have to re-sign, they still have to re-sign at a very, very high rate compared to previously. So this really is all in the favor of capital and the ownership class. Because the ownership class, like if you're a landlord,

you don't care if the washing machine is broken. I recently heard a story of somebody who had to rent a house and had to bring their own washer and dryer. Have you ever heard of such a thing? No. And the dryer, the renter was like, what are you going to do? I've rented plenty of apartments that just don't have washer and dryer in them. And that's certainly in New York City, very common. But to be like, bring your BYO washer and dryer. This is not New York. They're like, you got to buy your own washer dryer. And they're like, are you serious? And it's one of those things where it's like, okay, well, I can find somebody

else who'll do it. So, you know, they have all the power and they don't have to fix anything. You also think about the fact that, okay, so if prices come down and they have come down in a majority of markets, housing prices have come down, but mortgage interest rates are so high that it's not like your monthly payment is going to be any lower. In fact, as we're seeing, it's like double what it used to be. Who does that ultimately benefit? Well, it benefits rich people who have cash that they can just, you know, pay a house in cash. And it benefits primarily permanent capital because they can take advantage of the lower prices and not have to deal with the higher

financing costs because, again, they have the cash up front. Those are the people who benefit most from a market like this. So in a lot of ways, the Fed's policy, which let's be clear, is really aimed very directly at the housing market. I mean, Jerome Powell said flat out, he said, I'd say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again and mortgage rates are low again. So he's saying very directly, like, we are targeting the housing market with our actions. What they have created thus far

is the worst of all possible worlds. You still have low inventory, both because of the phenomenon I talked about, home buyers holding onto their houses because they don't wanna get hit with these high mortgage interest rates. You have home builders not having new housing starts because their financing rates are also higher.

So you have a low inventory, which is keeping prices relatively high. So we are seeing somewhat of a downward turn in terms of that. And then the costs are so high because of mortgage interest rates. And then that trickles down to the rental market. So people there are getting screwed as well. So it really is a bad situation for everyone. And if you're an existing homeowner, I mean, you're in a better position than anybody else. But also because the prices are declining, you're seeing your equity being eaten away. You're just locked in. Yeah, you're stuck. You're stuck. Like, you're not going anywhere. I saw a story of somebody who had like a 1.5% mortgage rate. By the way, I don't even know how that exists, but apparently they grabbed it. They must have

got it at the exact same time. And they're like, I'm not going anywhere. They're like, they're like my house. They're like, every house around me could burn down and I still wouldn't move because I have to stay here. They're like, I have no other options. I will never achieve this deal again. Right. I mean, they're not wrong. It's not a bad problem to have in that case.

Yeah, obviously. This is somebody who, I think this person I'm talking about is a Washington Post columnist, so they're doing fine in life. But the point being that that's, they're like, behavioral incentives are real. The market is now constructed such that rent is probably either going to rise for the foreseeable future if rates don't come down. Yes, it's nice that the sticker price on the home goes down. It's bad that the mortgage rate goes up.

And that generally, without any more access to capital for normal folks, that means that you're still even more out of the league whenever you're trying to buy a house. Yeah, I really, you know, wanted to do this segment with the people in mind who say overwhelmingly they're actually rooting for a housing crash because they see the way that prices have just escalated like crazy and the way that they've been priced down on the market and how insane it's been where it's like,

oh, I have to have, you know, 80% cash down in order to even compete in this market. And we were covering those stories of remember that house here? Yeah, here in DMV. It was unlivable. I mean, it was a total in shambles and it still sparked this bidding war of, do you remember how it was like? Sold for a million bucks. It sold for a million dollars

and had some insane bidding war of like 86 people or whatever. I'm making these numbers up, but it was crazy. There's one in Virginia that had squatters inside of it. They're like sold as is squatters in the basement. Squatters included? And you have to deal with it. Like, yeah, they're like,

we haven't resolved this. And somebody bought it. I understand people who are looking at the housing market and saying like, crash, baby, crash, because I want at some point in my life to be able to be a homeowner,

especially when that is the most like critical dividing class dividing line at this point in this country is like people who are asset owners and people who aren't. And homes are obviously the primary asset that most like ordinary Americans own. I just want to say it doesn't look like we're headed in that direction. I mean, even as prices do come down somewhat, it is not nearly enough to make up for the increase in mortgage interest costs. Fortune had a good piece sort of breaking down how this will all go, the different phases, they say, of the housing market downturn. Let's go ahead and put this up on the screen.

So they say they have, we now have clear evidence the housing market downturn has moved beyond the first stage, which is a drop in housing activity, that's like people buying homes, and into the second stage, which is falling home prices. So they say the home price correction is spreading. This is what I was talking about. Out of 148 regional housing markets that are tracked by some real estate consulting firm, 98 out of 148 have seen home values fall. Only 50 markets remain at their peak. Now, to give you a sense of how much they've fallen and that it's nowhere near the home price decline that we saw back in the housing crash in 2008. So at that time, we saw a peak to trough U.S. home price decline of 27%.

Right now, they're estimating that significantly overvalued housing markets, so places like San Francisco that have been just completely insane, they might see a drop in the 5% to 10% range. So nowhere close to the massive drops we saw during the housing crisis. Not that the housing crisis was ultimately good for anyone. It was another instance where it was great for permanent capital who bought up all these distressed properties and now are making money hand over fist on them. They also say that the housing downturn, and this is very intentional from the Fed, will soon spread beyond housing because you've got massive declines in home sales,

both new home sales and existing home sales. They've fallen by 30% in terms of new home sales, 20% in terms of existing home sales. You've got all these home builders and places like Zillow and Opendoor, whatever, struggling financially. And so as home shoppers put a pause on their searches, that means you see decreased demand for all sorts of other things. I mean, think of all the inputs that go into a house, the washer and dryer, like you were talking about, the refrigerators, the appliances, lumber, everything

that goes into a house, you see a decline in demand for those things. So that's why when there's a housing market downturn, it spreads throughout the economy. Now, again, that's actually what the Fed is hoping for because this is apparently the only way that our political class can figure out how to deal with the rising inflation. It's like let's screw regular people over and make it so that they're able to purchase less things. So that will be the next phase is basically the housing market downturn spreads to other sectors of the market. And then you've also got some details here. Let's put this last piece up on the screen of some of the housing sort of companies, housing adjacent or affiliated companies that are really struggling in this market. This home flipper company called Opendoor, which I actually never really heard of, but their whole idea was facilitating home flipping.

They're having big problems. They lost money on 42% of their August resales. They've seen median home prices because they've declined. That's really screwed them over. But instead of canceling contracts, they decided to make good on the offers they'd already put out there. So they have seen a huge hit and they're not alone in terms of other companies that are in the home buying and selling business. Yeah, I think it's important. I mean, really what's being underscored on all of this is just how precarious all of the market is. And there's a lot of downstream effects. So I'm glad that you put it the way you did, which is that, yeah, you may wish for a housing collapse, but there's a lot of

other stuff going on. So let's all just be very mindful about what's happening. Yeah. Unfortunately, it's not likely to benefit those people who are just hoping to get their foot in the door, no pun intended. All right, let's go ahead and put this up there on the screen. You alluded to this, and of course, this is probably going to have the single biggest impact on our economic future, not just us, but the entire economy, which is that right now, this is written in Bloomberg. It's a fascinating history, which is that China, this is according again to their analysis, is that going through a financial crisis today, quote, I believe is much more serious than even the global financial crisis in the United States. So they talk specifically about how their housing market and other direct indicators

are showing massive slowdown in China, specifically because of housing. Quote, the economy is sputtering under COVID lockdowns. The People's Bank of China has cut interest rates as central bank worldwide increased them, giving investors even more incentive to shift their money abroad. Together, these forces have pushed the yuan down by 8% against the dollar this year, putting it on course for the biggest annual drop since 1994. Here's what this analyst who's predicting a bigger financial crisis says. Quote, China is going through that financial crisis. For us, the play, he's talking about how to make money, is in currency. But he's talking about an imminent and possible Chinese currency collapse.

Part of the issue is that, as they actually point out in the pushback, is everybody's always saying that Yuan is going to collapse. Well, this guy's been betting on the collapse since 2014. Right. So he's like, this time it's going to pay off. So keep that in mind. I mean, he could be one of these big, short geniuses, or he could just be one of those people who's always saying that China's going to collapse.

But the underlying dynamic he's discussing of the slowdown in housing is absolutely correct. I weirdly have a reference to Evergrande in my monologue, which is about lab leak. But the Evergrande collapse was actually a catastrophic event. And to have all of these ripple effects where I remember before they even stopped trading on the Hong Kong Stock Exchange and more, you were seeing some real estate companies, multi-billion dollar behemoths backed by the CCP declined by 75, 80% in value overnight.

And that explodes, like bonds, it explodes the ability of people. Because remember, you know, if we take it back to that quote unquote crisis, people had put down cash and were waiting for their apartments. And this is a high status symbol in Chinese society. So the ripple effects were that there were riots, people were upset. And then you combine that with zero COVID and dramatically lower economic activity. Things are a powder keg right now in China domestically. I have read a report, even in Western China, like in the Uyghurs, and obviously they're already being horrifically treated right now. I mean, their level of lockdown is like make Shanghai look like a vacation home. Right, and so that's the whole country, no matter where the flare-up happens or not. And they're also not betting on vaccination at all. They are continuing to bet on zero COVID, which is insanity in the age, especially, it was always stupid, but in the age of Omicron, it's like especially stupid, like orders of magnitude. Yeah, very, very true. That is very true. Yeah. I mean, just to put some numbers to

what you're saying here about the housing market, there was a 40% drop in home sales this year in China. 40%. You have people who are demanding their money back over unfinished projects. You have a massive pullback. Now, some of this was actually orchestrated by the government because they saw, okay, we can't continue to have this housing market escalate and escalate and escalate and escalate. We have to pare things back at some point. But can they navigate that in a way that doesn't trigger a gigantic crash? That is a major, you know, that's a huge question. And so you have the housing market, massive pullback. You have those COVID zero policies.

And you also have had extreme heat waves that have really impact their, you know, crop yields and also their power supplies. So they're being hit from all directions right now. To give you some more numbers about the housing market, this is from a different article that I was reading. They were saying that the housing market has really driven growth in China for the past two decades. The Chinese housing market is the largest asset class in the world. So that gives you a sense of how central and how critical this is to the Chinese economy, not to mention the global economy. Now developers are going bust after being deprived of easy credit. Prices are falling. Homeowners are refusing to

pay mortgages on unfinished homes. The slump in properties being sold in construction is crippling local governments. This is a really important part because they rely on land sales for income. So the way they fund local governments fund themselves is by selling off land. Now they're unable to do that. So they're going bankrupt and having extreme financial issues. The other thing that they pointed to in this article is they say that the next shoe to drop for China could be falling external demand. So basically, I mean, these things all feed on each other, right? If we have a downturn here, if there's a downturn in Europe, obviously energy costs are high. So it's very much expected

that people will have less money to buy cheap crap from China. They'll be focused on like, let me pay my rent and let me have food on the table and let me not freeze to death. That's a huge issue for the Chinese economy, which obviously depends on being able to export their goods and make a lot of money around the world. So that's the picture as best as we can, you know, as best as we can decipher it of the Chinese economy right now. And again, obviously, these things all very interconnected and have a lot of feedback loops that can lead to global contagion, essentially. Good morning, everybody. Happy Thursday. We have an amazing show for everybody today. What do we have, Crystal? Indeed we do. I know I always say lots of big stories to dig into, but today it is like extra, super, really true. Lots of stuff going on with Russia and Ukraine, Putin going ahead and calling up somewhere around 300,000 Russian citizens.

That mobilization has begun. Protests and reaction to that are happening. Plus, he's made new threats regarding potential nuclear weapons. So, dig into that. We'll dig into Biden's big speech at the UN. We've also got a massive new legal developments for the former president, including some rulings that are going against him with regard to the special master and the classified documents. And also also Letitia James, the attorney general of New York, announcing a new civil suit against Trump, Trump Jr., Ivanka, and Eric. So we have all those details for you. We also have big economic news. We have new indications about the housing market. We have the Fed going ahead and moving forward with that 75 basis point rate hike. And actually, I just saw the Bank of England

is moving forward with a rate hike as well. So I just thought the Bank of England is moving forward with a rate hike as well. So that's that global tightening that we were talking about. New comments from the White House. President Biden got a lot of attention, I guess I would say, some support, some flack for saying that COVID is over. Now they're kind of trying to clarify those comments. So we'll dig into that debate. Saugers looking at gas prices. I'm looking at the case of Adnan Syed, who, of course, was the subject of the Blockbuster podcast, Serial. It was literally the first podcast I ever listened to. Same.

I would not be the person I am today without Sarah Koenig. Shout out to her. No, literally. I listened to Serial, and at the top was an ad, one of the only ads that's ever worked. MailChimp. It was for Audible. Oh, it was for Audible. It was always MailChimp when I was listening to it.

At the beginning, I guess in 2014, it was Audible. And it was like, hey, if It was Audible. It was always MailChimp when I was listening to it. At the beginning, I guess in 2014, it was Audible. And it was like, hey, if you like this, check out audiobooks. And I was like, oh, okay.

And I've probably since listened to like over a thousand audiobooks as a result of that. It was funny because I went back, I talk about this in the monologue,

but I went back and re-listened to not every episode because there's 12 of them and that would be a lot, but maybe like four episodes of sort of key ones, the ones about Jay, the ones about like that lay out the whole case, et cetera.

And there were so many parts of it that were so nostalgic, like the phone call coming in from the penitentiary and like Adnan Syed. Adnan Syed. Yeah. Anyway, Adnan is free. Is he innocent? I'm going to dig into what we know. Also, I'm super excited to talk about to our guest today. So this guy is the lead worker organizer for a new effort to unionize a Home Depot outside of Philadelphia.

He also happens to be a big Breaking Points fan. He's a big Breaking Points fan. So it's pretty cool. I'm excited to talk about to him. Home Depot is like the fifth largest employer in the whole country. It's huge, yeah. So if they were able to succeed there, you know, that could be a potentially, you know, a really significant moment in terms of the growing grassroots labor movement. He actually said in an interview, he was like, listen, if Chris

Smalls could do it with an Amazon warehouse, I thought, you know, certainly I could do it with the 300 people here at Home Depot. So we'll see how that effort is going. Let's start with Putin. Obviously, this is the biggest news. Not only what Putin announced late Tuesday, well, I guess, you know, Tuesday to Wednesday, very early in the morning, but all of the geopolitical reaction. We're going to start very first with what Putin had to say. Let's put this up there on the screen. Putin declares partial mobilization of the Russian defense forces. The decree was signed that says, quote, this is a translation, only citizens who are currently in the reserved and above all, those who served in the armed forces have certain

military specialties and relevant experience will be subject to conscription. It's effectively the same as the United States calling up like the National Guard or the U.S. Army Reserve. So not going fully to the general population, like drafting them into basic training, but people who have already previous military experience. So let me say, though, that that's what they're saying and that's how they're selling it. But the order that he signed does not actually specify those limitations. So it's actually just in his speech, not actually in his order. Yes. So in terms of how they're implementing it now, it appears that that's the direction

they're going in. But the order actually is a much broader potential mobilization. So important thing to keep in mind. Very important one. And look, this gives us a lot of insight to the state of the Russian military. It's like how many of the best people have already been called up? How many have they churned through? There's a lot of so-called refuse-nics, people who are just refusing not to serve in the quote-unquote special operations zone because they're like, we don't want to go to war with Ukraine. I don't want anything to do with this. Well, there's reports of huge lineups at the border of Russian men trying to get out of the country before this comes for them. There were reports that I think were kind of unconfirmed that the airlines had been told to stop selling tickets. There's a lot of rumors going out of Russia. Yeah. So I don't know if that one is accurate or not, but there certainly is a lot of video floating around of, you know, big lineups at the border of people like, I'm getting the hell out of here before I have to go and fight in this stupid war that I didn't want anything to do with. People are freaking out. And, you know, immediately after the Putin speech, let's put this up there, the Russian defense minister, Sergei Shogun, he came out and said that Russia is going to draft 300,000 reservists to support

the military campaign in Ukraine. He also gave us one of the most laughable statistics yet, that only 5,937 Russian soldiers have been killed since the start of the conflict. That is ludicrous. I mean, look, nobody knows the actual number, but it's probably more along the lines of like 10,000 to 20,000 than it is 6,000. And we know that based on actual open source stuff coming out of Russia of people who are posting and mourning their loved ones. This is just like what happened to the Soviets in Afghanistan. They always tried to cover up their death toll. And in the end, people knew the truth because at the end of the day, you got to notify somebody's family when they die. And then people start talking, going to funerals.

It's like, hey, there's all these funerals now all of a sudden. And you weren't even supposed to grieve. It was one of the biggest – it's one of the factors actually that led to the decline of the Soviet Union, especially in terms of a lack of confidence in the state. So what does all of this mean? Well, there's a lot of different ways in order to read it. But I think let's focus first on Russian society because Putin, this is a big loss for him. He sold this war as, you know, I was thinking about it recently in the context of the Iraq war. We were sold the Iraq war, light footprint, 150,000 guys go in, lightning, come out. We're out. That's it. And Eric Shinseki

and a lot of other guys told the US public and. public and the U.S. Congress, like, no, you're probably going to need like 400,000 people. Otherwise, you're going to have a massive insurgency on your hand. The Bush administration didn't want to listen. In this case, that's the Putin. And so Putin thought, I can do this with a couple hundred thousand guys, all this military equipment. We have one of the world's great power militaries. It's going to be over in like two weeks. Well, six months into this thing, obviously, they've now also suffered a humiliating defeat. So this is kind of like the quote unquote surge for Putin. He's doubling down on the war in Ukraine and saying, okay, fine. My initial sell to the Russian population that this wasn't going to really affect your life. And I wouldn't have to call up reserves, a quote unquote

special operation, not a war. This is a big domestic loss. I think no matter which way that you want to spin it. Another fascinating thing, you loss, I think, no matter which way that you want to spin it. Another fascinating thing, you know, I found, Crystal, he cited nationalist criticism of him on Russian television, which really makes me think that it was all a Kremlin plot in the beginning. To manufacture dissent, coming from the right, saying, why aren't you doing more? Why aren't you calling up? He acknowledged them in his speech and was like, I have heard you. I have listened to you. And that has led me to this decision. I mean, it's possible because you also saw like, we covered here the amount of criticism that was

coming on state TV and from these bloggers that, you know, normally isn't really allowed. So the fact that it was allowed, that's possible. I mean, it's also possible that look, genuinely, the place he feels pressure from is from his right, from the harder core nationalists. And so after this, you know, what has been a series of stunning advances by the Ukrainian military and stunning setbacks for Russia, he kind of had to do something. And so the bulk of the political pressure was coming from that more nationalist front. And he certainly, you know, for him, this is existential. Like if they just lose, that's going to be a disaster for him. He cannot allow that to happen.

It probably would be the end of his presidency. So to me, nothing lays out the sort of context here better than that image of the day that they're suffering these humiliating defeats in Ukraine, Putin is there inaugurating a new Ferris wheel. Like they were still trying to hold on to this idea that the bulk of the public could be isolated, insulated from this conflict and that it wouldn't have to impact their lives. It became, you know, this was just like a total defeat of that original strategy that, okay, we can do a little bit of war over here and the public won't even notice. So I guess the more hopeful spin is that he is trying to find a way, I've seen some analysts saying he's trying to find a way ultimately to get out of this, but save enough

face so that he's able to hold on to his presidency. So you have to strengthen your hand because the Ukrainians certainly aren't going to agree to a ceasefire or peace deal right now when they see total victory in sight. So that was one analysis that I saw that this is an attempt to sort of strengthen the hand so that he might be in a position to negotiate for some sort of ceasefire that wouldn't just be utter and total humiliation. But there's no doubt about it. From the beginning, how he thought this would go, it has not gone anything like that. From hoping that it could just be this sort of limited effort that the public was protected from, from thinking they could just roll right into Kiev, every step

of the way, it has been a disaster for them and has not gone according to plan. Now, I think it's also important to ask, like, this is a lot of people they're calling, 300,000 people is a lot of people. Now, a lot of them don't have much, if any, training. This is certainly, you know, they're not sending their best, so to speak. They've lost a lot of their sort of most skilled military, well-trained folks, soldiers already. So how much of the difference is this going to make? Are they really prepared and are they organized enough to have this kind of surge into the field, into Ukraine? I think those are all big, big questions to ask. And it seems to me like this winter, for a variety of reasons, is really going to be

determinative. Not only because we'll see whether this surge of personnel makes a difference for Russia, helps them to turn the tide and regain the upper hand. That's number one. Number two, and we'll get to this more when we talk about Biden's UN speech, it'll also be a question politically how the U.S. population is still responding to this war. Are we still all in the European populations? How does it go with energy prices? What, you know, how much austerity and pain does this winter bring to European populations? So I think a lot will be determined over the course of this winter. Yeah, I think that's right. And, you know, we also have to acknowledge some of the heroes across Russia. I mean, let's put this up there on the screen. Spontaneous protests broke out all across the country. Here's a video just from Moscow. I'm not going to say this is the

entire Russian population, but that's a lot of people that I'm looking at. There's clearly an organic pushback on some percentage. Yeah, right. Exactly. I mean, even if it's 10%. And remember, look, to live in an authoritarian country like Russia, and it's not like these people can easily leave, and to risk your literal life in imprisonment, to do this takes some serious, serious courage. So we want to acknowledge those people. In terms of the military, let's put this up there. Michael Kaufman, he's that military analyst that we relied on several times throughout this invasion.

I think he put it in a very measured and important way. He's like, look, first and foremost, of course, we don't know. So we should not make any deterministic or definitive claims. But here's what he says. I would not suggest that this can turn around Russia's fortunes in the war, as in, are they going to be immediately on the offensive? Probably not. However, and here's what he says, I would take care of being dismissive, especially looking towards the medium term of this winter in 2023, because force availability and manpower matters. Hence, the implications can vary. What he essentially comes to and arrives at in this thread in his analysis is that the Russian military can use these forces to plug up their weak defenses like those that folded

in the Ukrainian offensive and just make it into much more of a war of attrition and make it, frankly, far more difficult for the Ukrainians to try and advance. Are they capable enough to go on the offense? What Kaufman points out is that the Russians have bled through some of their best generals, some of their best fighting forces. Their logistical challenges are obviously terrible. And it would take probably more than the quote-unquote partial mobilization to actually, they would have to basically fully mobilize their entire society and army in order to wage war, which was not supposed to be the case for a great power military fighting a quote-unquote third-rate army. Well, they've proven themselves that when you're fighting for your life, you're going to fight very differently

on top of the weapons that we have supplied to the Ukrainians. This is going to actually probably bring it even more balance to the conflict, which does unfortunately mean that everybody's kind of locked in at this point. The Ukrainians, now they've really only got, I don't know, let's say what, eight to 10 weeks left of these people. Obviously they're not called up yet. They're not yet on the front line. They've really not that got much time before winter strikes and in which they can still continue to capitalize on it. That's why they're begging for weapons right now harder than they ever have in a long time. So it's a very mixed bag in terms of what it tells us. Is it overly deterministic? No, probably not. This does not mean the end of Ukraine. Does it mean, though, that Putin is on

his very last legs? Also no. This is somewhere in the middle, which is why it's hard to describe to people. Yeah, I think it's important to have a lot of humility about what this will actually mean in the battlefield. Because first of all, all the analysts have gotten things wrong, like dramatically every step of the way. You know, in Afghanistan, they were dramatically wrong. So I just like at this point, I'm just, you know, it might mean something, it might mean nothing. We'll see how it all unfolds in terms of what happens on the battlefield. You know, I do want to say with regards to those protests, there are credible reports that those who are being arrested are being immediately conscripted. So like taken into custody and immediately conscripted. So just to underscore how courageous it is to actually go out there

in the streets and make your voice heard. I mean, that is incredible. Yegor shared with me this morning, there were actually 130 Chechen women arrested in Chechnya for protesting, which again, I mean. That takes some serious. Real, real courage. So we have no insight into how widespread these protests are. We really have very little insight into how much of a societal backlash there is. But I would say, I mean, just logically thinking about this, the way that Putin sold this to the public as this isn't even a war, it's not going to affect you. Here I am, like, you know, inaugurating this Ferris wheel. Don't worry about what's happening over here.

To go from that to we're going to mobilize, we're going to send in 300,000 more conscripts. You know, the order, like, they're not stupid. They can see that the order is actually for a full mobilization. So no one is feeling particularly safe right now. So anyway, I could certainly imagine that there is significant deep concern and backlash to the movement in this direction. So we'll see how all of that plays out. Yeah, absolutely. Let's move on then next to the most, frankly, important one, which is nuclear. We opened one of our shows on Biden's response to Putin on nuclear weapons, and Putin has issued a new and very troubling taunt, both to President Biden and to the entire

West. So let's put this up there on the screen. This is analysis from Andrei Baklatisky. So he is specifically a nuclear analyst and he breaks down President Putin. What seemed like an offhand comment about nuclear weapons actually was a change in Russian nuclear doctrine and why it is just so important in order to break it down. Here's what he said. He said that, quote, some high-level representatives of key NATO states made statements about the possibility and admissibility of use of WMD nuclear weapons against Russia. First of all, I don't know what he's talking about, and that seems to be complete bullshit. So just let's all be clear about what exactly Putin is saying. However, in response to said fake comments, here's what he says. He reminds those people Russia has different, quote,

means of destruction, meaning nuclear weapons. And he continues by saying, quote, if the territorial integrity of our country is threatened, we will certainly use all the means at our disposal to protect Russia and our people. It's not a bluff. He continues, the citizens of Russia can be sure the territorial integrity of our motherland, our independence and freedom will be ensured. I emphasize this again with all the means at our disposal. So why does this matter? Two fronts. Number one, because at the same time those partial mobilizations were announced, Crystal, they also announced those fake referendums that are going to occur in four separate regions across Ukraine. We don't know the full date, all of that.

All of those referendums will be much like the Crimea referendum, a fake pretext in order to fully annex these territories into Russia and officially as part of Russian law would be part of the Russian Federation. Why does that matter? Because then, if we are talking about fighting in those areas, in Crimea, in Kursk, in the Donbass, in Luhansk, in these regions, they could claim a part of this new nuclear doctrine that this violates their, quote, territorial integrity with weapons used by the West. This is the real nightmare scenario in terms of we obviously are not going to accept even Crimea as part of Russia, but if they think that is, and then as part of their new doctrine say that it is, it would open the gates to a new higher level of warfare. So the fact that he added territorial integrity is

very important because previously Russian doctrine said that first use in a conventional war when the existence of the state is threatened, not territorial integrity. That was one of the first things. And the quote-unquote abstract protection of people, independence, and freedom. So nuclear doctrine is very important to understand. We have very, very laid out first use cases as to when we would use a first use strike of a nuclear weapon. So do the Russians. Theirs has generally been like the integrity of the regime, the integrity of the state. To add territorial integrity, again, and you know, this is what Andre says, coming from the person who has the sole decision-making power regarding nukes, this should be taken very, very seriously. You

combine the referendum with this new addition to Putin's nuclear doctrine, and look, we have no choice in this country but to take it seriously. Is he lying? Is he bluffing? I don't know. He says he's not. He's bluffed in the past. He is obviously a liar. This pretext of all this is completely fake, but that doesn't mean that you can't take it seriously whenever he says these things. That's 100% correct. Zelensky's response was basically like, nah, he's bluffing. Maybe. You% correct. Zelensky's response was basically like, nah, he's bluffing. Maybe. You might be right and you might not. But the reporting is the White House and the Pentagon do take this possibility relatively seriously. And that's what we covered

before when Biden was asked in that 60 Minutes interview, you know, what would you say to Putin about his use of nuclear, potential use of nuclear weapons? And he was like, don't. And then he was pushed about, okay, well, what would the response be? And ultimately his answer was, well, obviously, I'm not going to tell you right now, but it also would depend on what the nature of it was. So, one scenario they've been considering is, would there be some sort of a test or tactical detonation as sort of like a warning. Those sorts of things are very, very scary, even as oftentimes the way the media covers it is like, oh, this would be no big deal. But make no mistake, it would be a huge deal. It's also no accident that these referendums are going forward.

Are they referenda when it's plural? Anyway, referendums are going forward. Are they referenda when it's plural? Anyway, referendums are going forward at the same time that he makes this comment. I mean, those two things are definitely linked. There's no question about it. So that he's saying at the same time, we are claiming this as this is Russia, this is our territory. And he's shifting the line as to when and how they would potentially use nuclear weapons and saying we will use them to defend our territorial integrity, not just when we see an existential threat to Russia.

Those things are incredibly significant. In terms of the territories that they're trying to lay claim to here, the latest reporting is that they're going to run polls there for five days starting tomorrow. There's four regions that they're going to conduct polls there for five days starting tomorrow. There's four regions that they're going to conduct these like fake polls and elections in. And those four regions represent about 15 percent of Ukrainian territory. So it's a very significant part of the state. Yeah, this look, it's a lot of parts of Ukraine. And these is the most contested parts where a lot of fighting is happening. It also overlays something that we talked about in one of our

previous shows, which is that President Biden very much considering the exact type of weapon systems that we're sending over there because the Ukrainians are like, hey, we need these long range weapon systems to hit Crimea. And he's like, I don't know if I want you to hit Crimea with directly U.S. provided systems. Well, if this territory now goes the direction of Crimea in that, now we have to consider the Russian responses, what that means with the update of the doctrine. And look, I mean, this is why the nightmare is whenever authoritarian countries have nukes, because they can just wave their finger in your face. And I mean, there's not a lot you can do about it without really upping the ante all the way. And we're starting to get close

to that line. Anytime one of the world's great powers calls up 300,000 people and then changes its nuclear doctrine and then threatens nukes in the middle of an active conflict that you're semi-involved in. It says, I am not bluffing. It says, I'm not bluffing. Pay attention, people. So this is a new phase of the war. Who the hell knows what's going to happen? Joining us now is Vince Kielas.

As I just said, he is the lead worker organizer at that effort to unionize a Home Depot outside of Philly. Great to see you, Vince. Hey, good to see you, Vince. Thank you guys so much for having me. I really appreciate your guys' coverage. Yeah, of course. Absolutely. We're grateful to have you here today. I know you must be very busy. More Perfect Union, our friend Jonah Furman over there had a good write-up of your effort. Let's go ahead and put this up on the screen. They say, new inside the historic Union Drive at Home Depot, over 100 workers at the Philly store signed on in five weeks. Managers were immediately flown in to hold captive audience meetings. And here's a quote from you.

You say that it is backfiring. Another quote you had in this piece that I loved, Vince, was you said, listen, if Chris Smalls could do that at a warehouse of over 8,000 people, we can do it in our store of 300. So Vince, just tell us a little bit about what gave you the idea and how the effort is going so far. I mean, it's kind of a multifaceted thing. I also have to give a huge shout out to you guys. You know, a lot of like the coverage that you guys gave and honestly, too, just you guys making the move to breaking points, to being independent and, you know, challenging yourselves to step out into a new field and to do something different was extremely inspiring, you know. And taking that in conjunction with just some of the circumstances in the store, we felt that this was the best move for us. You know, I tried having conversations over the last like month and a half with people in various, you know, parts of Home Depot, trying to let them know

the concerns of the store. And it just felt like, honestly, we were getting a lot of spin. We weren't really getting the answers that we were looking for. And so, you know, kind of just taking a temperature in the store, we felt like, Hey, this is, this is going to be the best move for us. And myself and some other individuals within the store felt that, you know what, we have the courage and we have the capacity to be able to get this done. That's so incredible to hear, Vince, you know, very much to us in terms of the impact of our work, but important, let's focus on you and your store. Talk to us, like, why is this a step that you're considering making? What are you guys looking for? Like, what can make your lives better at your workplace? So, I mean, we're

kind of focused in on, you know, various things like wages, staffing in the So, I mean, we're kind of focused in on various things like wages, staffing in the store, proper training, and overall just wanting a say in how things operate in our store. Home Depot has a tendency to kind of make blanket decisions that go across all stores and look, we're $110 million a year store. We have very high volume. It's not going to work out the same that it does in a $30 million a year store, you know. And we just felt decisions that were being made, you know, things that were being told to us were just not true. You know, some of the, I guess some of the things that I was able to kind of pull people's attention with was to just speak on, you know, some of the value that that store in particular was generating. You know, over 2020 and 2021, throughout the course of the pandemic, that store made $58 million in profit.

But only, I don't know an exact estimate, but about like $2 million was actually invested into the people that work in the store. And it's just, when you see those large levels of disparity, like I was just dumbfounded. Particularly when you would look at conversations where we would tell people like, hey, we're being overworked. We've, we've got a lot going on. People are freaking out at us because they're not getting enough help. We're getting thrown all across the store. We're being asked to do all of these additional tasks.

And then when it comes time to, you know, be paid in order to, you know, say thank you for the work that we're putting in. It was, oh, well, the company can't afford it. The investments that they've made in compensation over the last couple of years, you know, has kind of expended them a bit.

And it's like, well, you guys had $15 billion to spend on stock buybacks last year. Maybe spend a little bit less on your stocks and spend a little bit more on us. You know, at the end of the day, you wouldn't have that money on the work that we're doing. I think that is an excellent point, one that I believe will resonate with our audience. It also strikes me, I mean, part of why this is significant is, first of all, Home Depot is a company that did extraordinarily well during the pandemic. People were stuck at home. They decided to, you know, invest in their space and making their space better and all kinds of DIY projects and making sourdough bread and whatever, like that was all happening during the pandemic. So I'm sure you all were completely swamped. I know they were making huge profits. So the opportunity to be

able to reward the workers who helped them to make those profits is certainly available to them. Is that big picture? Are you hearing that from your coworkers? Like that big picture, is that a concern for them? Do you think that the impact of the pandemic and the way they were treated, do you think that was kind of an eye-opening experience? Because that seems to be a similar thread throughout a lot of these efforts. And even through a lot of the things we're seeing throughout the workforce, including, you know, white collar service sector and blue collar workers, is it just changed the way they were thinking about their job? Yeah, absolutely. I mean, I think one of my co-workers said it perfectly when our district

HR person came to the store to see us. And she said, honestly, we felt abandoned. You know, they didn't come into the store for about a year. And an interesting tidbit for us, and I'm sure it can probably resonate at other stores, district didn't walk in for about a year. And when we had our first walk, when they came back, we got ripped to shreds. We got, you know, criticism on everything that was wrong with the store. And it's like, you know, is this what you guys really think? People were getting threatened. People were like, there's a guy that got beat up and carjacked out in the parking lot like you know somebody had to go get checked mental hospital for

working a 32-hour shift straight like there there are some serious issues and some serious concerns that are happening in this building and again like i tried my best to be fair you know i'm not i'm not somebody when when i'm trying to get something done i don't want to be like super combative i don't want to you know try and come with people's personal character but i tried to give them the opportunity to say like hey hey, like, we know the numbers. We know how you guys are doing. And we're just not seeing the effort. Right.

You know, one of the things that they're trying to kind of do right now in the statements that they're making is, oh, well, you know, I'm uninformed when it comes to the idea of a union and what it is that they can get done. But if you guys were to walk into my store right now, they've literally doubled or tripled the payroll with all of the salaried managers in there with all the help they're getting in. So it's like you guys can go and you can invest all of this, you know, to prevent a union. But you can't, you know, invest this, you know, in a proactive manner to take care of the people that took care of you. Right. Because you want to you want to brand yourselves as, oh, we're taking care of our essential workers.

We're we're looking out for our people. Where is it? We don't feel it. You know, it wasn't a petition was filed that I could see the hope in people's eyes in that store. You know, before then life sucked out of them. Sorry, go ahead. I was just going to say, it does remind me so much of some of the things that Chris Smalls told us about when he was fighting for the Amazon union is they tried to paint him as like, oh, he was stupid. I remember the famous, like, oh, he's inarticulate. He's not smart. And they really tried to persuade people like, this guy doesn't really know what he's doing.

And I actually think some of the large unions here, too, I think that's why there was a reluctance among some progressive politicians even to back them. Because it was like, oh, this guy, he'd never done this before. He doesn't really know what he's up to. But talk to us about, my understanding is you are going a similar path. You're forming a Home Depot specific grassroots workers union. What made you decide to go in that direction rather than going to one of the larger, more established unions that could, you know, give you that support, give you that guidance and give you that funding up front?

So again, like, I mean, look, shout out to Chris Maltz, you know, watching a lot of interviews with him, whether it was with you guys, you know, Breakfast Club, a bunch of different places, you know. That was kind of the framework that I tried to follow just because I was like, all right, like, look, this is about organizing, right? The point of it is to garner the faith of the people, you know, and I was like, look, these are people that I've worked with for five and a half years. You know, I was a supervisor in that store and, you know, I did my best to try and help people however I could. And that that carried me a lot of favor and a lot of trust. So it was a matter of how do we deliver on that trust? And, you know, there had been attempts to unionize in my store before that had been unsuccessful. You know, a lot of people kind of looking around saying, oh, we're a little

bit skeptical of any outsiders coming in saying, hey, we're here to help you. So I said, look, you know, honestly, I feel that I have the wherewithal and the capacity to get this done. You know, it takes a firm resolve and it takes remembering that, hey, you're fighting for your people. And again, as I could see, you know, in the conversations that would be had with the different associates there, whenever corporate will come through and they'd be talking to individuals and you would say, oh yeah, we care about you. We really respect you. And it's like, you're not showing it. You know, at the end of the day, I could sit here and I could say a bunch of nice things to my colleagues and to the employees that work with me, you know, but it's,

it's up to me to show them, right. Not just to say things, but to actually do things. And you guys are a $300 billion company. Like you have the capacity to, it's just a matter of if you choose to, you know, and that's just what I saw was, was that there was no choice to. Right. You know, there's half a million people who work at Home Depot. It's one of the largest employers in the country. So I think that your experience probably resonates with a lot of them. Hopefully they watch this show. So we really appreciate you joining us, Vince.

It means a lot to hear what you said about us. And we wish you the best of luck. Keep us updated. And we're happy to have you back on. Honored to talk to you, Vince. Thanks for taking the time. Yeah, thank you guys so much. And just again, thank you guys for caring. Our store really appreciates all the coverage we're getting. Thank you, sir. Thanks for taking the time. Yeah, thank you guys so much. And just again, thank you guys for caring.

Our store really appreciates all the coverage we're getting. Thank you, sir. Yeah, it's truly our pleasure. It's the least we can do. Absolutely. Thank you guys so much for watching. We really appreciate it.

As we said, live show, Chicago. It's here. You can watch the clips. I think it was awesome and it's going to be even more awesome in Chicago. We learned a couple of lessons.

And then number two, we've got the discount going on. You can help support our work. It's interviews like that, Crystal, that make it all work. I can't tell you when they reached out. Actually, Jonah Berman reached out and was like, you know, Vince is a fan of Breaking Points. And like, you guys were part of what gave him this. I mean, that's like, I can't tell you how much it means to me. It really is like everything. You improved my relationship with my dad. Those two, I'm like, wow. We do that with even three people.

It's way more than we ever could have imagined. So thank you guys so much for making it possible. We are so incredibly grateful to you. Enjoy CounterPoints. Tomorrow.

Tomorrow. Enjoy CounterPoints. We got the discount going on right now if you want to help support them, help support continued expansion.

It means so much to us. Link is down in the description for all that stuff. We'll see you all next week. Love y'all. See you next week. Camp Shane, one of America's longest running weight loss camps for kids, promised extraordinary results. But there were some dark truths behind Camp Shane's facade of happy, transformed children. Nothing about that camp was right. It was really actually like a horror movie. Enter Camp Shame, an eight-part series examining the rise and fall of Camp Shane and the culture that fueled its decades-long success. You can listen to all episodes of Camp Shame one week early and totally ad-free on iHeart True Crime Plus.

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