Man, trying to keep up with everything going
on these days, it's like drinking from a fire
hose, isn't it? It really is. You finally feel
like you've wrapped your head around one story,
and boom, five more just explode onto the scene.
And they all seem so urgent, demanding your attention
right now. That's why we do this. Absolutely.
Welcome to the deep dive. We're going to take
a breath together, and we're really going to
try to dig into what matters most. That's the
goal. And today, well, you've... It's certainly
given us a lot to work with. I have. Oh, yeah.
This stack of sources you've provided, it's fascinating.
It covers everything from the current political
landscape right through a really deep analysis
of what the Federal Reserve is up to and then
a crucial investor's guide to all these tariffs
that are just around the corner. OK, wow. Sounds
like we have our work cut out for us. We do.
But that's what we're here for. We're going to
pull out the really essential insights from all
of this material, give you the information that's
going to make you say, aha, now I understand,
and maybe even surprise you a little along the
way. And don't worry, we're not going to get
bogged down in the weeds. Perfect. Well, why
don't we start with trying to untangle some of
the, well, to put a mildly, strange happenings
in Washington. Let's jump right into the political
arena then. OK. One of the sources you flagged.
uses a rather colorful term, I have to say, to
describe what's been going on with the U .S.
defense establishment. They call it a clown show.
Oh, wow. And that's all stemming from this really,
really eyebrow -raising security lapse that you
highlighted in your note. Eyebrow -raising might
be putting it a little too politely, honestly.
So here's the picture that emerges from these
sources. You've got these top -ranking Trump
administration officials using the Signal app,
which, for our listeners who might not be familiar,
is designed for encrypted messaging. And they're
using this app to have conversations about incredibly
sensitive stuff, like the bombing of Houthi fighters
in Yemen. You would think that would be about
as secure a communications you could get. You
would think. Right. That's what end -to -end
encryption is supposed to do, theoretically.
Right. And you see that reflected in these sources.
You've got figures like JD Vance, who you'd expect
to be aware of and maybe even advocating for
this kind of security measure, actively participating
in these chats. But here's where it takes this
truly bizarre turn. Oh, boy. Hold onto your hats.
OK. Jeffrey Goldberg, the editor -in -chief of
The Atlantic, no less, ends up being accidentally
added to this very signal group chat. So here
he is, witnessing real -time discussions about
a planned military operation. Wow. It's almost
unbelievable when you think about it. It is.
And I love this quote from one of the sources.
They call it, and I quote, unbelievably stupid
and careless. It really is hard to find a more
apt description. I know, right? So what's the
lesson here? Is Signal not as secure as we all
thought? I think one of the key takeaways is
that while an app like Signal can offer a layer
of security through its encryption, it doesn't
actually address vulnerabilities at the device
level. If a phone itself is compromised, then
all that encryption becomes useless. It's like
having a super high -tech lock on your front
door, but leaving all your windows wide open.
That's a really good analogy. It really highlights
the weak point in the chain. It does. And speaking
of weaknesses, I mean the sheer lack of, what
did the source call it? Message hygiene? Yes,
message hygiene. It's staggering. 18 people in
this group chat. We're talking NSA official Mike
Waltz, Defense Secretary Pete Hagseth, then CIA
Director John Ratcliffe, Secretary of State Marco
Rubio, Stephen Miller for goodness sake. I mean,
the more people you add to a conversation like
that, the higher the chances of something going
wrong. It's simple math, almost. Every new participant
increases the attack surface. That just means
more potential points of vulnerability. And look,
it doesn't even have to be malicious. It can
be a simple mistake, a misclick, an autocorrect,
gone rogue. But the fact that they didn't realize
a journalist, of all people, was in their midst
until his story went live, it just shows a complete
lack of attention to the basics. It really does.
And then you layer on top of all of this, this
incredible hypocrisy. Remember all the scrutiny,
all the criticism around. Hillary Clinton's emails,
the whole potential for classified information
being exposed. Right. And it was all about the
potential risk, the hypothetical. If we connect
that to what we're seeing here, it's almost a
mirror image, but reversed. In this case, you
have high ranking officials in the Trump administration
actually exposing the details of an active military
operation. So it's not a potential risk anymore.
It's an actual leak. It's a real leak happening
in real time. And this wasn't just scheduling
details or some logistical minutiae. This was
sensitive information. I mean, we're talking
about details that, if leaked, could have had
severe consequences. Fatal consequences, even.
Exactly. That's a point that really comes through
in the reporting. Absolutely. I mean, when the
details of a planned military action become known
outside of the proper channels before they're
supposed to, it can jeopardize the entire mission,
put lives at risk, and seriously damage national
security. It's not something to be taken lightly.
And the irony here is just so thick you could
cut it with a knife. Remember Mike waltz one
of the signal group chat participants. Yes. Yeah,
he was actually one of the people who was most
vocal in Criticizing Jake Sullivan, you know
for how he handled classified information during
the previous administration All right, and there's
this quote from waltz in one of the articles
last We checked Sullivan never leaked plans for
an imminent military strike to some random magazine
editor I mean, come on talk about a foot -in
-mouth moment, right? The hypocrisy is just mind
blowing. It really highlights how the standards
seem to shift, depending on who's in power. Exactly.
So what was the official response from the Trump
cap when all of this came out? Well, pretty much
what you'd expect. Trump himself completely dismissed
the Atlantic, called it fake news, of course.
bizarrely, tried to claim it was a hoax, even
though there's clear evidence. And you have Speaker
Johnson offering a vague promise that, oh, it
won't happen again, you know, that kind of thing.
There's a pattern there, isn't there? Oh, yeah.
It's interesting how the response often focuses
on discrediting the source or downplaying the
significance of the issue rather than actually
addressing the core problem. Right. Like in this
case, the core problem is a serious breach of
operational security. Exactly. But instead of
grappling with that, they deflect and distract.
Absolutely. It's classic political maneuvering.
Yeah. And Holly, he seemed more upset about who
was in the text message chain than the fact that
highly sensitive information was being discussed
so carelessly. Then you have Will Kane, who actually
tried to spin this as a positive example of transparency.
That's an interesting tape. Right. It's almost
Orwellian. And then, of course, Ingerham and
Hannity, they just went after the messenger,
as you'd expect. Predictable, perhaps, but still
concerning. It suggests a reluctance to engage
with legitimate criticism and a tendency to circle
the wagons rather than address the underlying
issues. Exactly. And the thing is this whole
signal situation, it reveals more than just incompetence
and hypocrisy. It also gives us a peek behind
the curtain, you know, a glimpse into some of
the internal dynamics within the Trump administration.
Oh, right. Like. It turns out JD Vance was actually
a dissenting voice in all of this. He wasn't
really on board with bombing Yemen politically,
strategically. He just didn't think it was a
good idea. Interesting. And apparently, he also
suspected that Trump himself didn't really fully
grasp the potential ramifications of the decision.
Which suggests a level of, shall we say, skepticism
about the president's understanding of these
really complex foreign policy issues. And from
what the reporting indicates, this wasn't an
isolated sentiment. That kind of skepticism was
pretty widespread among those who worked closely
with Trump. Yeah, and they didn't always use
the most flattering terms to describe him in
private. Like nitwit, for example. Exactly. And
it wasn't just about Trump. Vance and Hegseth,
they apparently weren't too fond of our European
allies either, calling them freeloading gold
-brickers. Yeah. So that gives you a sense of
their approach to international relations. Not
exactly the language of diplomacy. No. But here's
the really key point. While they were ostensibly
discussing national security, it seems the main
focus of this signal chat was actually the messaging
surrounding the Yemen attacks. how we'd play
with the public, how it would affect the voting
base. Which speaks to this constant political
calculus that seems to drive decision -making
at the highest levels. And sometimes it feels
like those political considerations might overshadow
other crucial factors. Right, like the actual
effectiveness of the policy or, you know, the
ethical implications. Absolutely. And then there's
this final detail, this little tidbit that really
stood out to me. It's Mike Waltz's reaction.
to the Yemen bombings. Oh, right. The bombings
that resulted in at least 50 deaths, by the way.
And how did he react? Let me guess. With a celebratory
fist emoji, an American flag emoji, and fire
emojis. Oh, wow. While other participants were
responding with praying hands emojis. That's
a pretty stark contrast. It is. It really speaks
volumes, doesn't it? It does make you wonder
about the different perspectives and priorities
within that group. Absolutely. So the big takeaway
from this whole signal saga, I think, is this.
It's a master class in how not to handle sensitive
information, a huge dose of hypocrisy, and a
pretty revealing look at the internal culture
and priorities of the Trump administration. I
think that's a fair assessment. But let's move
on now to another, let's call it unconventional
policy proposal from the same administration,
these secondary tariffs on Venezuelan oil. Ah,
yes, tariffs. Back in the news again. And this
time, it's not your typical straightforward bilateral
trade measure. What we're looking at here is
a proposed 25 % tariff on all goods imported
from any country that decides to do business
with Venezuelan oil. So not just goods from Venezuela
itself. No, that's the twist. It's an attempt
to indirectly influence Venezuela's economy by
targeting its trading partners. One of the sources
calls this a trilateral tariff. A new invention,
apparently. It's certainly creative, I'll give
them that, but whether it's effective, that's
another question altogether. And the expert analysis
we have here expresses, shall we say, a healthy
degree of skepticism about how this is going
to be received globally. I mean, it makes sense,
right? It's basically saying to other countries,
hey, if you want to access the lucrative US market,
You better fall in line with our foreign policy
on Venezuela. Exactly. I can't imagine that's
going to go over well with everyone. I think
the risk of retaliatory tariffs from the countries
affected is pretty high. Yeah, it feels like
it would just escalate tensions and hurt everyone
in the end. It might. And there's this other
question that keeps coming up in the reporting.
Oh. Why this? laser focus on Venezuela specifically
I mean the article points out that there are
plenty of other countries in Latin America even
Africa that share some of the same Characteristics
the administration attributes to Venezuela around
populations histories of corruption governments
with socialist leanings But for some reason it's
Venezuela that's being singled out It does make
you wonder about the underlying motivations and
strategic goals, doesn't it? It does. One of
the sources even makes this kind of tongue -in
-cheek observation about the axis of evil maybe
being updated to include Venezuela. Oh, wow.
It highlights the sense that the administration's
focus on Venezuela might be a little bit disproportionate.
Interesting. OK, well, let's shift gears now
from international intrigue to something a bit
closer to home. And I have to say... This is
refreshing. We have a Republican senator, John
Curtis from Utah, who's been surprisingly candid
about the challenges facing Social Security.
That's encouraging to hear. Honesty is a rare
commodity in politics these days. It really is.
And he's not just paying lip service to the issue.
He's actually acknowledging the elephant in the
room. He said, and I quote, We're not being honest
when we look people in the eye and say we're
not going to touch it. If we don't touch it,
it touches itself. You know that, right? That's
not being honest with the American people, and
I think that's one of the things that makes them
not trust us when we say something that they
just know is not true. Wow. That's pretty blunt,
right? It's incredibly blunt for a politician,
especially when it comes to entitlement programs.
I know. It's not something you hear every day.
So what's his proposed solution? Well, he didn't
really offer specific solutions, but he did emphasize
the need for an open and honest conversation
about the future of the program. especially for
younger generations. He acknowledged that current
retirees are probably okay, but there needs to
be a plan for the long term. And that's the crucial
point, isn't it? Acknowledging the problem is
the first step towards finding a solution. Exactly.
And this kind of candor from a Republican senator,
it's really refreshing. In fact, one of the sources
we have positions Curtis as a potential leader
for the Republican Party in a post Trump world.
Interesting. So maybe a glimmer of hope for a
more honest and pragmatic approach to policymaking.
We can only hope. Now, speaking of the future
of the Republican Party, there are those two
special elections coming up in Florida to fill
the House seats vacated by Matt Gaetz and, ironically,
Mike Waltz. You know, this signal guy. Oh, right.
So what's interesting here is the significant
fundraising advantage that Democratic candidates
have, even in districts that are generally considered
to lean Republican. In Florida's first congressional
district, the Democrat, Gaye Valamond, has raised
a whopping $6 .5 million. That's a lot of money
for a House race. It is. And in the sixth district,
which is a bit less solidly Republican, the Democrat,
Josh Weil, has raised almost $10 million. That's
even more impressive. It is. And on the Republican
side, in the sixth district, you have Randy Fine,
who has raised considerably less, under $600
,000, in fact. Wow. That's a huge discrepancy.
It is. And it could be a sign that Republican
donors aren't feeling particularly enthusiastic
about fines chances. It's certainly possible.
I mean, that kind of financial disadvantage can
be really difficult to overcome in an election.
It can be, especially when it comes to things
like advertising and get out the vote efforts.
Exactly. Yeah. Now, the Democrats are probably
looking back at that special election upset.
in Pennsylvania's 18th congressional district
in 2018 as a reason for some optimism. Right.
That was a district with a similar Republican
lean where the Democrat managed to win. Yeah.
But it's definitely an uphill battle in Florida.
It always is in those kinds of districts. But
with that level of financial firepower, maybe
we'll can pull off an upset. Well, it's a reminder
that in politics, especially in special elections,
anything can happen. True. Okay, last but not
least in our political roundup, we have this
really interesting look at the potential Democratic
field for the 2028 presidential election. Oh,
that's a long way off. I know. But the Washington
Post has already started putting together a list
of potential contenders, and the analysis you
shared is fascinating. So who's on the list?
Well, there are a lot of familiar names, mostly
governors and senators. You've got Tim Walz,
Josh Stein, Andy Beshear, Gavin Newsom, Wes Moore,
Gretchen Whitmer, Josh Shapiro. And then on the
Senate side, you have Raphael Warnock and Ruben
Gallego. And then there's John Fetterman, of
course, Kamala Harris and Pete Buttigieg. A pretty
diverse group. It is. And the analysis really
digs into their strengths and weaknesses. Like,
for example, Beshear is seen as a real asset
because he proven he could win in a deeply conservative
state like Kentucky. But then you have Newsom,
who's perceived as maybe too progressive to California
to appeal to a broader national electorate. Right.
And then there's Gallego, who, with his background
as a Latino Marine veteran representing a swing
state, is seen as a really intriguing prospect.
Makes sense. He ticks a lot of boxes. He does.
And the analysis also highlights some potential
challenges for certain individuals. Right. There
are still lingering concerns about Federman's
health after his stroke. And there are questions
about Buttigieg's ability to connect with certain
demographics. Interesting. It really feels like
the Democrats are already starting to strategize
for the post -Trump era. It's never too early
to start thinking about the next election cycle.
I guess not. But here's the real curveball. There's
this speculation about Mark Cuban. the billionaire,
potentially making a run for the presidency.
Mark Cuban, really? Yeah. And get this, he'd
be running on an anti -billionaire platform.
That's a bold strategy. I know. He's talking
about radical tax reforms, like a 91 % top marginal
tax rate, a 95 % estate tax on fortunes over
a billion dollars. I mean, it's pretty wild.
It's certainly a different kind of populism.
It is. But it's fascinating to think about. It
is. OK, well, that's quite a tour of the current
political landscape. A lot to digest there. There
is. But now let's turn our attention to the economic
front and let's really dive into the Federal
Reserve's latest moves and the potential fallout
from these new tariffs. Sounds good. And I think
the theme that really ties all of this economic
analysis together is uncertainty. Uncertainty.
Yeah, it's a word that comes up again and again
in the sources you provided. Interesting. Well,
the Fed just wrapped up its latest meeting and
they decided to hold interest rates steady, which
was pretty much what everyone expected. But it's
the changes to their economic projections that
are really raising eyebrows. What kind of changes?
Well, they're now forecasting higher inflation
than they were previously. And at the same time,
they've lowered their projections for economic
growth. So they're basically saying we're going
to have slower growth and higher prices. Yeah,
essential. And not a good combination. It's not.
It has led some people to start talking about
the possibility of stagflation. Stagflation,
that's a pretty scary word. It is. And for our
listeners who might not be familiar with the
term, stagflation is basically a situation where
you have slow or stagnant economic growth happening
at the same time as high inflation. It's a recipe
for economic pain. I see. So are we headed for
stagflation? Well, the analysis we've reviewed
suggests that the Fed isn't predicting full -blown
stagflation just yet, but it's definitely a possibility
they're taking seriously. I understand. And how
about the Fed Chairman Jerome Powell? What did
he have to say about all of this? Well, his main
message was pretty clear. uncertainty. In fact,
he actually said, I didn't know anybody who is
confident in their forecast. Wow, that's pretty
blunt coming from the head of the central bank.
It is. Yes. And he even went on to point to specific
policies from the current administration as major
contributors to this uncertainty. Like what?
He specifically mentioned immigration restrictions,
tariffs and the future of tax policy as factors
that are making it really difficult to predict
where the economy is headed. So he's basically
saying the government is making his job harder.
Yeah. Pretty much. It highlights the interconnectedness
of government policy and the financial markets.
It does. The Fed can't just operate in a vacuum.
They have to react to what's happening in the
broader political and economic landscape. And
that landscape is looking pretty unpredictable
right now. It is. So how is the Fed reacting
to all of this uncertainty? Well, they're taking
a cautious approach. They're holding interest
rates steady for now, not because they're super
confident in the economy, but more because they
want to wait and see how things play out. Makes
sense. There's also been some interesting movement
in the dot plot, which basically shows where
individual members of the Federal Open Market
Committee expect interest rates to be in the
future. What kind of movement? Fewer members
now anticipate two interest rate cuts in 2025,
and more of them are projecting only one cut.
So they're becoming a bit more hawkish on inflation?
Yeah, it seems like it. They're concerned that
inflation might be stickier than they initially
thought. And that's not good news for consumers.
It's not. So what's the bottom line? The bottom
line is that the Fed is in a wait -and -see mode.
They're watching the data closely, and they're
ready to adjust their policies if necessary.
Sounds like a prudent approach. It does. But
now, on top of all of this uncertainty from the
Fed, we have the added wrinkle of these new tariffs
that are expected to be announced any day now.
Ah, yes, the tariffs. Always a hot topic. They
are. And we have an investor's guide here that
gives us a little bit of insight into what we
might expect. Play it on me. Well, first of all,
the announcement is expected to come on April
2nd, which also happens to be the day a previous
temporary suspension of tariffs on certain goods
from Canada and Mexico expires. Those were the
tariffs related to the USMCA, right? Exactly.
So it looks like we're headed for a pretty significant
shakeup in the trade landscape. Interesting.
And what's the scope of these new tariffs? Who
are they targeting? Well, the expectation is
that they'll be quite broad in scope. They're
being framed as reciprocal tariffs, which basically
means they're aimed at various countries or trade
blocs that the U .S. sees as having unfair trade
practices. I see. So not just one country, but
potentially a whole range of them. Exactly. And
there's also talk of industry specific tariffs
with the automotive sector, semiconductors and
pharmaceuticals being mentioned as potential
targets. So it could affect a lot of different
companies and consumers. It could. The estimates
suggest that these tariffs could be applied to
as many as 17000 different product categories
from 193 countries. That's a lot of tariffs.
It is. And it gets a little bit complicated because
they're talking about this concept of tariff
rate reciprocity. But what that really means
in practice is that the US isn't necessarily
going to match the exact tariff rates that other
countries impose on us. So they have some leeway
in how they apply these tariffs. Yeah, it seems
like it. They're taking a more flexible approach,
setting their own tariff levels based on their
own assessment of the situation. And that assessment
probably includes a lot of non -economic factors,
right? Oh, absolutely. There are definitely geopolitical
considerations at play here. Well, for example,
there are indications that the U .S. might be
willing to offer lower tariff rates to countries
that cooperate with them on other issues, like
immigration control, drug trafficking, defense
spending. So it's not just about trade anymore.
It's about using tariffs as leverage to achieve
broader foreign policy objectives. It's a pretty
blunt instrument though, isn't it? It is. And
there's a lot of debate about how effective it
actually is. And how about the economic impact
of all of this? Well, the analysis we have suggests
that these new tariffs are unlikely to have a
significant positive impact on the U .S. economy.
So if it's not about boosting the economy, then
what is it about? It seems like the main goal
is geopolitical. It's about using tariffs as
a tool of statecraft, a way to punish or pressure
other countries. I see. So it's more about politics
than economics. It seems that way. So what's
the potential fallout from all of this? How will
it affect different countries and regions? Well,
let's start with the European Union. It's a bit
unclear right now exactly how these reciprocal
tariffs would be applied to the EU. But the U
.S. has expressed concerns about their value
added tax or VAT in the past. So that could be
a point of contention. It could. And the analysis
suggests that if the U .S. were to impose a 25
% tariff on all goods from the EU, it could potentially
reduce the EU's GDP by about 0 .8 % in the short
term. That's a significant impact. It is. However,
there are some factors that could potentially
mitigate that impact. Like what? Well, Germany,
for example, is investing heavily in defense
and infrastructure right now. And the European
Central Bank is likely to continue cutting interest
rates. So those measures could potentially offset
some of the negative effects of the tariffs.
Interesting. So the EU might be able to weather
the storm. They might, but it's still a risk.
And how about North America? Well, that's where
things get a little bit complicated. How so?
Because of the USMCA. Remember, those tariffs
on certain goods from Canada and Mexico are set
to expire on April 2nd. So it's unclear whether
those tariffs will be renewed or whether they'll
be replaced by these new reciprocal tariffs.
I see. So it depends on how the U .S. decides
to proceed. Exactly. But either way, Mexico is
particularly vulnerable because they're so reliant
on exports to the U .S. They could potentially
face a recession if those tariffs are implemented.
And Canada. Canada could also be hit pretty hard.
They're also a major exporter to the U .S. So
it's not looking good for North America. No it's
not. And what about China. Well China is a bit
of a different story. How so. The U .S. has already
imposed significant tariffs on a large percentage
of Chinese goods and it doesn't seem like they're
backing down anytime soon. So the trade war continues.
It does. And China has retaliated with its own
tariffs and they're also trying to reduce their
reliance on exports to the U .S. by boosting
their domestic consumer demand. So they're trying
to become more self -sufficient. Exactly. So
what's the overall global economic impact of
all of this? It's hard to say for sure, but the
analysis suggests that it could be mildly negative
overall. Not catastrophic, but not good either.
Right. And it's important to remember that the
U .S. already has relatively high import tariffs
compared to historical norms. So we're already
in a bit of a protectionist environment. We are.
So if we zoom out and look at the big picture,
what are the key takeaways from all of this?
I think the main thing is that we're living in
a time of great uncertainty, both politically
and economically. I agree. And that uncertainty
is being driven by a number of factors, including
unconventional policy decisions, geopolitical
tensions, and a global economic slowdown. Exactly.
And for our listeners, the key message is that
these developments are going to have a real impact
on their lives. Absolutely. They're going to
affect everything from the prices they pay at
the store to the stability of their investments.
So it's important to stay informed and to be
prepared for whatever comes next. I couldn't
agree more. And that leads me to a final thought
for our listeners to consider. Given all of this
uncertainty and the potential for significant
shifts in the global economic order, What assumptions
about international trade and economic stability
might we need to reevaluate? That's a great question.
I think we're entering a new era and the old
rules might not apply anymore. It's definitely
a time for deep thinking and careful planning.
It is. Thanks for joining us for the Deep Dive.
My pleasure. We'll see you next time. See you
then.