WEBVTT 00:00:00.000 --> 00:00:02.299 Welcome to the deep dive. This is where we take 00:00:02.299 --> 00:00:04.860 the information you give us and really try to 00:00:04.860 --> 00:00:07.139 pull out the most important insights so you can 00:00:07.139 --> 00:00:09.650 get up to speed. Exactly. And today we've got 00:00:09.650 --> 00:00:11.830 a really interesting pairing you sent over. Yeah, 00:00:11.830 --> 00:00:14.250 we do. We have a news commentary piece from April 00:00:14.250 --> 00:00:17.750 15th, 2025, and also a schwa market briefing 00:00:17.750 --> 00:00:21.129 from the exact same day. So the goal today really 00:00:21.129 --> 00:00:23.469 is to synthesize these. They seem quite different 00:00:23.469 --> 00:00:25.769 on the surface, but we want to see how the political 00:00:25.769 --> 00:00:28.070 story and the economic picture from that specific 00:00:28.070 --> 00:00:30.510 day connect. Right. What's the bigger picture? 00:00:30.609 --> 00:00:32.390 What are the key takeaways, maybe some surprising 00:00:32.390 --> 00:00:35.289 links between the political climate and what 00:00:35.289 --> 00:00:37.390 was happening in the markets? It's definitely 00:00:37.390 --> 00:00:39.450 valuable looking at them together like this. 00:00:39.710 --> 00:00:42.409 One source is giving a very, you know, specific 00:00:42.409 --> 00:00:45.530 viewpoint on political events, while the other 00:00:45.530 --> 00:00:47.909 is all about the hard data from the financial 00:00:47.909 --> 00:00:50.630 markets. So putting them side by side, hopefully 00:00:50.630 --> 00:00:53.570 we can uncover some deeper truths about, well, 00:00:53.630 --> 00:00:56.090 the general atmosphere back then. Okay, let's 00:00:56.090 --> 00:01:00.509 dive right in then. The electoral vote news commentary. 00:01:00.789 --> 00:01:04.069 It starts pretty intensely. Section 1 is titled, 00:01:04.430 --> 00:01:08.340 Fascism Watch Part 1. the war on the citizenry. 00:01:08.659 --> 00:01:11.200 Yeah, grim is the word they use. And it focuses 00:01:11.200 --> 00:01:14.340 straight away on this really strange case of 00:01:14.340 --> 00:01:16.980 Kimar Bricco Garcia. Right. This man in Maryland. 00:01:17.659 --> 00:01:20.099 The commentary says he was, quote, accidentally 00:01:20.099 --> 00:01:22.799 deported to El Salvador. But the really crucial 00:01:22.799 --> 00:01:25.319 part is that a U .S. immigration judge had actually 00:01:25.319 --> 00:01:28.260 granted him withholding of removal status way 00:01:28.260 --> 00:01:31.519 back in 2019, which. legally speaking, should 00:01:31.519 --> 00:01:34.019 have stopped the deportation. Exactly. That's 00:01:34.019 --> 00:01:35.760 my understanding. It legally prevented him from 00:01:35.760 --> 00:01:38.040 being sent back. But what jumps out immediately 00:01:38.040 --> 00:01:40.719 from the commentary is this sort of, well, they 00:01:40.719 --> 00:01:43.120 call it a circus -like display of buck passing. 00:01:43.680 --> 00:01:46.579 Between Trump and the AG, Pam Bondi. Yeah. They 00:01:46.579 --> 00:01:48.599 both basically said, look, once Garcia was in 00:01:48.599 --> 00:01:50.700 El Salvador's hands, well, the US couldn't do 00:01:50.700 --> 00:01:52.299 anything, even though the US sent him there, 00:01:52.359 --> 00:01:54.359 apparently paid for his detention too, according 00:01:54.359 --> 00:01:56.500 to the source. It seems like a key point the 00:01:56.500 --> 00:01:58.760 commentary is making is this potential for the 00:01:58.760 --> 00:02:01.799 administration to act first and then just claim 00:02:01.799 --> 00:02:04.099 their hands are tied regarding the results of 00:02:04.099 --> 00:02:05.900 their own actions. Precisely. And the commentary 00:02:05.900 --> 00:02:08.039 really pushes this with that hypothetical, doesn't 00:02:08.039 --> 00:02:10.620 it? Yeah, the Steve Bannon one. Like if he got 00:02:10.620 --> 00:02:12.460 accidentally deported with the White House, just 00:02:12.460 --> 00:02:15.379 shrug and say, oops, too bad, it seems unlikely. 00:02:15.550 --> 00:02:18.069 And they mentioned El Salvador's President Bukele 00:02:18.069 --> 00:02:20.669 was actually in D .C. around then meeting with 00:02:20.669 --> 00:02:23.110 people, which strongly implies the U .S. did 00:02:23.110 --> 00:02:25.530 have leverage if they chose to use it. Bukele's 00:02:25.530 --> 00:02:28.270 response quoted in the piece about not having 00:02:28.270 --> 00:02:30.830 authority and joking about smuggling Garcia back. 00:02:32.030 --> 00:02:34.469 It just adds to this feeling of, I don't know, 00:02:34.789 --> 00:02:37.810 almost performative denial. It really raises 00:02:37.810 --> 00:02:40.629 the question of why then? Why did this happen? 00:02:41.310 --> 00:02:43.550 The commentary touches on some speculation and, 00:02:43.650 --> 00:02:46.530 you know, was Garcia a spy? Was he dead, just 00:02:46.530 --> 00:02:49.250 lost in the shuffle? But then it pivots to what 00:02:49.250 --> 00:02:51.909 the authors think is the more probable and frankly 00:02:51.909 --> 00:02:54.150 more disturbing reason. And this is where it 00:02:54.150 --> 00:02:56.069 gets really unsettling, I think, the theory they 00:02:56.069 --> 00:02:59.289 put forward. Right. They suggest the administration 00:02:59.289 --> 00:03:01.909 might have been deliberately testing the boundaries, 00:03:02.289 --> 00:03:04.550 exploiting a kind of legal gray area from a Supreme 00:03:04.550 --> 00:03:06.430 Court decision. Seeing how far they could push 00:03:06.430 --> 00:03:10.500 things in immigration and the implication. It's 00:03:10.500 --> 00:03:12.360 pretty chilling that they might be trying to 00:03:12.360 --> 00:03:14.639 set things up so they could basically disappear 00:03:14.639 --> 00:03:17.280 literally anyone. Yeah. Even someone with legal 00:03:17.280 --> 00:03:19.860 protection. And the commentary connects this 00:03:19.860 --> 00:03:22.439 idea to other things, like Trump saying he was 00:03:22.439 --> 00:03:25.139 open to deporting homegrown criminals. Right. 00:03:25.620 --> 00:03:28.360 And Bondi refusing to say if sending US citizens 00:03:28.360 --> 00:03:31.219 to foreign prisons was legal. It paints this 00:03:31.219 --> 00:03:33.439 picture, doesn't it? When you put the Garcia 00:03:33.439 --> 00:03:36.520 case next to these statements. a potential pattern 00:03:36.520 --> 00:03:39.000 of overreach. Definitely a disturbing picture. 00:03:39.460 --> 00:03:41.740 And it keeps going. The commentary then talks 00:03:41.740 --> 00:03:44.460 about setting up a holding area for undocumented 00:03:44.460 --> 00:03:46.780 immigrants down on the Mexican border. And the 00:03:46.780 --> 00:03:49.719 comparison they draw there is just stark. Yeah, 00:03:49.860 --> 00:03:51.819 comparing it directly to the early stages of 00:03:51.819 --> 00:03:54.599 the Nazi program, you know, rounding up political 00:03:54.599 --> 00:03:57.580 opponents and other undesirables, that's a really 00:03:57.580 --> 00:04:00.000 heavy comparison. It shows how alarmed the authors 00:04:00.000 --> 00:04:02.689 were. It absolutely does. It highlights their 00:04:02.689 --> 00:04:05.590 deep concerns. And they end that section basically 00:04:05.590 --> 00:04:08.009 calling on the judiciary judge, Paula Sheenis, 00:04:08.110 --> 00:04:10.349 and Chief Justice John Roberts to step in and 00:04:10.349 --> 00:04:12.250 address what they see as serious violations. 00:04:12.610 --> 00:04:14.530 So the takeaway seems to be that the commentary 00:04:14.530 --> 00:04:18.009 isn't seeing these as isolated mistakes, but 00:04:18.009 --> 00:04:20.970 as part of a bigger, potentially dangerous trend. 00:04:21.790 --> 00:04:24.629 A systematic push, potentially. OK, let's shift 00:04:24.629 --> 00:04:27.569 gears slightly to their part two, the war on 00:04:27.569 --> 00:04:29.980 the media. Still under the fascism watch heading. 00:04:30.420 --> 00:04:32.379 Right. Another piece of the playbook, according 00:04:32.379 --> 00:04:35.139 to the commentary, going after critical media. 00:04:35.300 --> 00:04:37.860 And here the focus is squarely on CBS, particularly 00:04:37.860 --> 00:04:41.139 60 minutes. And the attacks described sound incredibly 00:04:41.139 --> 00:04:44.029 direct. Trump wasn't just criticizing, the commentary 00:04:44.029 --> 00:04:46.509 says he was repeatedly calling for CBS to actually 00:04:46.509 --> 00:04:49.050 lose its broadcast license. Yeah, and they include 00:04:49.050 --> 00:04:51.029 parts of his social media posts, which really 00:04:51.029 --> 00:04:53.629 gives you the flavor of it, his specific complaints, 00:04:53.670 --> 00:04:56.750 and just the anger behind it. Absolutely. He's 00:04:56.750 --> 00:04:59.449 talking about alleged fraud in a 60 minutes interview 00:04:59.449 --> 00:05:02.370 with Kamala Harris about the 2024 election. He's 00:05:02.370 --> 00:05:04.810 mad about Ukraine coverage, even Greenland coverage. 00:05:05.149 --> 00:05:07.490 Greenland, right. Let me just read a bit of that 00:05:07.490 --> 00:05:10.509 quote they included. Almost every week, 60 minutes. 00:05:10.829 --> 00:05:14.850 mentions the name Trump in a derogatory and defamatory 00:05:14.850 --> 00:05:18.310 way. They are not a news show, but a dishonest 00:05:18.310 --> 00:05:20.850 political operative simply disguised as news 00:05:20.850 --> 00:05:23.689 and must be responsible. They should lose their 00:05:23.689 --> 00:05:27.519 license. The personal nature of it is really 00:05:27.519 --> 00:05:29.920 striking. It feels like a key insight here is 00:05:29.920 --> 00:05:32.740 just how willing the administration was, according 00:05:32.740 --> 00:05:35.519 to the source, to use its platform to try and 00:05:35.519 --> 00:05:38.560 delegitimize media outlets it didn't like. To 00:05:38.560 --> 00:05:41.759 punish them. Yeah. But the commentary also makes 00:05:41.759 --> 00:05:44.000 a really important practical point. About the 00:05:44.000 --> 00:05:46.620 license. Exactly. How much leverage does threatening 00:05:46.620 --> 00:05:48.879 the broadcast license actually give them anymore? 00:05:49.259 --> 00:05:51.579 Most people watch via cable or streaming now, 00:05:51.579 --> 00:05:53.360 which that license doesn't cover. Good point. 00:05:53.560 --> 00:05:55.439 And they mention the NFL factor, too. Right. 00:05:55.600 --> 00:05:58.620 Taking Sunday AFC games away from millions of 00:05:58.620 --> 00:06:00.720 fans. Probably not a politically winning move. 00:06:01.519 --> 00:06:04.540 So the rhetoric is loud, but the actual power 00:06:04.540 --> 00:06:06.720 might be less than it seems. That's an interesting 00:06:06.720 --> 00:06:09.399 insight. Then there's that little side note about 00:06:09.399 --> 00:06:12.279 the Paramount Skydance merger potentially involving 00:06:12.279 --> 00:06:15.439 Trump and the David Ellison connection. Laurie 00:06:15.439 --> 00:06:19.180 Ellison's son. As another little layer of complexity 00:06:19.180 --> 00:06:22.220 maybe. It does suggest potential friction points, 00:06:22.500 --> 00:06:26.019 even within generally aligned circles. And the 00:06:26.019 --> 00:06:28.160 commentary also brings up the Associated Press 00:06:28.160 --> 00:06:29.980 still being blocked from the White House, even 00:06:29.980 --> 00:06:31.759 after a court said they shouldn't be excluded 00:06:31.759 --> 00:06:34.600 if others were let in. Yeah, that seems to underline 00:06:34.600 --> 00:06:36.660 the commentary's point about the administration 00:06:36.660 --> 00:06:39.759 expecting the media and maybe even the courts 00:06:39.759 --> 00:06:43.060 to just fall in line. It suggests a disregard 00:06:43.060 --> 00:06:45.240 for the traditional checks and balances, the 00:06:45.240 --> 00:06:47.379 role of a free press, the independence of the 00:06:47.379 --> 00:06:49.819 judiciary. That's the core takeaway they seem 00:06:49.819 --> 00:06:51.560 to be driving at. And they make that interesting 00:06:51.560 --> 00:06:54.540 point, too, about the potential long term consequence 00:06:54.540 --> 00:06:58.399 if you ignore court rulings now. You might undermine 00:06:58.399 --> 00:07:00.279 the whole system you might need later, right? 00:07:00.300 --> 00:07:02.060 Kind of shooting yourself in the foot regarding 00:07:02.060 --> 00:07:04.759 the rule of law. Exactly. It erodes that fundamental 00:07:04.759 --> 00:07:07.680 acceptance that court orders matter. OK, so moving 00:07:07.680 --> 00:07:12.240 on to Fascism Watch. Part three, the war on universities. 00:07:12.839 --> 00:07:15.759 Right. Another source of perceived wrong think 00:07:15.759 --> 00:07:17.819 that the administration was targeting, according 00:07:17.819 --> 00:07:20.060 to this commentary. And they focus specifically 00:07:20.060 --> 00:07:22.939 on Harvard. Framing it as a potential Joseph 00:07:22.939 --> 00:07:25.339 Welch moment, you know, that point where someone 00:07:25.339 --> 00:07:28.699 with credibility finally says, have you no sense 00:07:28.699 --> 00:07:32.040 of decency, sir? Drawing a line. And Harvard, 00:07:32.259 --> 00:07:34.300 as the commentary notes, is a pretty significant 00:07:34.300 --> 00:07:37.680 target. It's prestige, the powerful alumni network 00:07:37.680 --> 00:07:40.920 Obama, Bloomberg mentioned. Huge endowment, major 00:07:40.920 --> 00:07:44.079 legal firepower. Right. All things that could 00:07:44.079 --> 00:07:46.939 potentially allow it to push back against pressure 00:07:46.939 --> 00:07:49.680 from the administration. So a confrontation with 00:07:49.680 --> 00:07:52.290 Harvard would be, well, a big deal. And the commentary 00:07:52.290 --> 00:07:54.689 pulls no punches describing this reported five 00:07:54.689 --> 00:07:57.050 page letter sent to Harvard, calls it a fascist 00:07:57.050 --> 00:08:00.069 wet dream. Strong language. But then they list 00:08:00.069 --> 00:08:02.449 some of the alleged demands. Well, you can see 00:08:02.449 --> 00:08:04.329 why they use that phrase. It's quite something 00:08:04.329 --> 00:08:06.509 if this description is accurate. They reportedly 00:08:06.509 --> 00:08:08.810 wanted Harvard to reduce the power of anyone 00:08:08.810 --> 00:08:12.569 involved in wrong think, OK, but also eliminate 00:08:12.569 --> 00:08:15.389 DEI programs entirely. Which is one thing, but 00:08:15.389 --> 00:08:18.889 then. Then the flip side. Mandating that 50 % 00:08:18.889 --> 00:08:22.060 half. of the student body, the faculty, every 00:08:22.060 --> 00:08:25.500 single academic unit, had to be Magier Republicans. 00:08:25.779 --> 00:08:29.319 In the name of ideological diversity, overseen 00:08:29.319 --> 00:08:32.659 by administration -approved commissars. Let me 00:08:32.659 --> 00:08:34.440 just read that quote again, because it's just, 00:08:35.120 --> 00:08:37.720 at the same time, making a point to populate 00:08:37.720 --> 00:08:40.480 the student body, the faculty, and every academic 00:08:40.480 --> 00:08:43.299 unit with 50 % Magier Republicans in the name 00:08:43.299 --> 00:08:45.879 of ideological diversity. The audacity of trying 00:08:45.879 --> 00:08:47.960 to dictate the political makeup of a private 00:08:47.960 --> 00:08:50.870 university like that. It's just staggering. It 00:08:50.870 --> 00:08:52.789 feels like blatant interference. And the list 00:08:52.789 --> 00:08:54.769 goes on, according to the commentary, big cuts 00:08:54.769 --> 00:08:57.450 to foreign student admissions. Reforming specific 00:08:57.450 --> 00:09:00.389 schools and programs, the Divinity School, education, 00:09:00.549 --> 00:09:03.169 public health, the med school, programs focused 00:09:03.169 --> 00:09:05.970 on religion, human rights, Middle Eastern studies. 00:09:06.110 --> 00:09:08.649 The law school's human rights clinic. It seems 00:09:08.649 --> 00:09:10.649 like a really targeted list of places likely 00:09:10.649 --> 00:09:12.850 to produce critical fodder research. Designed 00:09:12.850 --> 00:09:16.230 to enforce conformity, it seems. And then immediate 00:09:16.230 --> 00:09:18.669 crackdowns on student protests by campus police. 00:09:18.889 --> 00:09:22.210 And that weirdly specific ban on surgical masks. 00:09:22.570 --> 00:09:24.990 What's that even about? Besides maybe discouraging 00:09:24.990 --> 00:09:28.730 protests. Yes. And then this deadline. Full compliance 00:09:28.730 --> 00:09:32.090 by June 30th, plus quarterly reports to the administration. 00:09:32.830 --> 00:09:34.750 It really does feel like an attempt at total 00:09:34.750 --> 00:09:37.129 control. The commentary floats a really interesting 00:09:37.129 --> 00:09:39.029 idea here, though. About Harvard's strategy. 00:09:39.210 --> 00:09:42.389 Yeah. That maybe Harvard, being run by, quote, 00:09:42.889 --> 00:09:46.360 really shrewd sobs, actually wanted these demands 00:09:46.360 --> 00:09:49.259 in writing, played along just enough to get documented 00:09:49.259 --> 00:09:51.159 proof for lawsuits. That actually makes a lot 00:09:51.159 --> 00:09:53.419 of sense, doesn't it? Strategically. Right. Get 00:09:53.419 --> 00:09:55.759 the crazy demands on paper. Because the commentary 00:09:55.759 --> 00:09:58.279 argues complying would be disastrous for Harvard 00:09:58.279 --> 00:10:01.039 anyway. Losing donations, faculty, students. 00:10:01.679 --> 00:10:03.659 Maybe fighting back is actually the smarter move 00:10:03.659 --> 00:10:06.279 economically and reputationally. Right. Stand 00:10:06.279 --> 00:10:08.419 firm, protect your integrity, and maybe inspire 00:10:08.419 --> 00:10:10.480 other universities to that whole Joseph Welch 00:10:10.480 --> 00:10:13.320 idea again. Okay, one last Fascism Watch section, 00:10:13.399 --> 00:10:16.659 part four. Generalissimo Donald Trump is still 00:10:16.659 --> 00:10:19.440 alive. This one shifts focus a bit to that tendency 00:10:19.440 --> 00:10:22.139 of, well, authoritarian style leaders to really 00:10:22.139 --> 00:10:24.320 emphasize their strength, their health, their 00:10:24.320 --> 00:10:27.000 vitality. Which leads right into the commentary's 00:10:27.000 --> 00:10:29.779 take on the latest annual health report for Trump 00:10:29.779 --> 00:10:31.779 that had just come out. And they immediately 00:10:31.779 --> 00:10:34.200 jump on the reported height and weight. Six foot 00:10:34.200 --> 00:10:37.179 three. 224 pounds. Yeah. The commentary just 00:10:37.179 --> 00:10:39.740 doesn't buy it. They point to photos next to 00:10:39.740 --> 00:10:41.679 Obama and Trudeau, who are listed as shorter, 00:10:42.179 --> 00:10:44.700 and basically say, Trump's six foot one, tops. 00:10:45.240 --> 00:10:47.559 And they question the weight, too. Maybe if they 00:10:47.559 --> 00:10:49.659 don't count his legs is the quote, I think. A 00:10:49.659 --> 00:10:51.980 bit snarky, but it highlights their skepticism 00:10:51.980 --> 00:10:54.139 about official info clashing with what people 00:10:54.139 --> 00:10:56.740 can see. They mentioned the online memes comparing 00:10:56.740 --> 00:10:59.320 him to NFL players. And then the more realistic. 00:10:59.519 --> 00:11:03.200 Andre the giant comparison. Yeah, but the real 00:11:03.200 --> 00:11:05.539 focus is on that summary passage in the report 00:11:05.539 --> 00:11:07.620 Right the part that includes frequent victories 00:11:07.620 --> 00:11:10.220 in golf events as proof of excellent cognitive 00:11:10.220 --> 00:11:13.240 and physical health. Let me read that bit President 00:11:13.240 --> 00:11:15.360 Trump remains in excellent health his active 00:11:15.360 --> 00:11:17.379 lifestyle continues to contribute significantly 00:11:17.379 --> 00:11:20.080 to his well -being President Trump stays include 00:11:20.080 --> 00:11:23.139 participation in multiple meetings public appearances 00:11:23.139 --> 00:11:25.840 press availability and frequent victories in 00:11:25.840 --> 00:11:28.360 golf events The commentary basically calls this 00:11:28.360 --> 00:11:30.299 bregadot shoe. You know, is playing golf a few 00:11:30.299 --> 00:11:32.759 times a week really an active lifestyle in this 00:11:32.759 --> 00:11:35.600 context? And does winning at your own golf course 00:11:35.600 --> 00:11:37.960 mean anything about your health? It feels less 00:11:37.960 --> 00:11:40.539 like a medical assessment and more like, well... 00:11:40.269 --> 00:11:43.309 PR projecting vigor. Exactly. So the commentary 00:11:43.309 --> 00:11:45.690 concludes it's either another case of a physician 00:11:45.690 --> 00:11:48.990 as folklorist just telling stories or the White 00:11:48.990 --> 00:11:51.750 House edited it heavily. Either way, they argue 00:11:51.750 --> 00:11:54.350 it damages the report's credibility. The takeaway 00:11:54.350 --> 00:11:56.529 seems to be an erosion of trust when official 00:11:56.529 --> 00:11:59.190 statements seem kind of unbelievable or self 00:11:59.190 --> 00:12:02.700 -serving. It fits that theme of a carefully managed, 00:12:02.899 --> 00:12:05.019 maybe misleading public image they were exploring 00:12:05.019 --> 00:12:07.919 earlier. OK. Now let's completely change gears 00:12:07.919 --> 00:12:09.820 and look at the other document from that same 00:12:09.820 --> 00:12:13.480 day, April 15th, 2025, the Schwab Market Report, 00:12:14.100 --> 00:12:16.639 Trump -era instability and market volatility. 00:12:16.899 --> 00:12:19.740 Right. A totally different lens, finance, economics, 00:12:19.740 --> 00:12:22.120 but looking at the same general time frame and 00:12:22.120 --> 00:12:24.120 climate. And what's striking right away is how 00:12:24.120 --> 00:12:27.379 this report, using market language, seems to 00:12:27.379 --> 00:12:29.539 echo the instability vibes from the news commentary. 00:12:29.720 --> 00:12:32.279 It really does. It talks about the wild ride 00:12:32.279 --> 00:12:35.299 markets we're on, and it explicitly links the 00:12:35.299 --> 00:12:38.840 volatility to chaotic, tariff -related news. 00:12:39.360 --> 00:12:41.679 So Schwerob is drawing a direct line from political 00:12:41.679 --> 00:12:44.620 actions, specifically trade policy, to market 00:12:44.620 --> 00:12:46.960 reactions. That's a key insight. And they put 00:12:46.960 --> 00:12:48.879 a number on it. They estimated the U .S. weighted 00:12:48.879 --> 00:12:51.259 average tariff rate was nearly 25 percent by 00:12:51.259 --> 00:12:53.340 then. Which, as they point out, is the highest 00:12:53.340 --> 00:12:56.000 in over 100 years. That's a huge policy -driven 00:12:56.000 --> 00:12:59.220 disruption to the economy. Huge. The report also 00:12:59.080 --> 00:13:01.759 mentions this idea of a Trump put suggesting 00:13:01.759 --> 00:13:04.200 maybe the administration was quicker to react 00:13:04.200 --> 00:13:06.059 to weakness in the bond market than the stock 00:13:06.059 --> 00:13:08.899 market interesting implying maybe they were more 00:13:08.899 --> 00:13:11.220 sensitive to certain kinds of economic signals 00:13:11.220 --> 00:13:14.080 perhaps ones with bigger political fallout potential 00:13:14.080 --> 00:13:16.320 that could be an insight there but Schwab says 00:13:16.320 --> 00:13:18.379 the underlying driver for all the market swings 00:13:18.379 --> 00:13:21.779 was just sheer policy uncertainty yeah tears 00:13:21.779 --> 00:13:24.059 are on then they're off then they're partly on 00:13:24.059 --> 00:13:27.200 but with exceptions. Every time that happens, 00:13:27.379 --> 00:13:30.059 the market has to rapidly recalculate expectations 00:13:30.059 --> 00:13:33.139 for growth, for inflation. Rapid policy changes 00:13:33.139 --> 00:13:35.820 mean rapid changes in bond yields, stock prices. 00:13:36.399 --> 00:13:38.480 And they point to something particularly worrying 00:13:38.480 --> 00:13:41.019 they saw. The divergence, yeah. Between the US 00:13:41.019 --> 00:13:43.039 dollar falling sharply while interest rates were 00:13:43.039 --> 00:13:45.120 rising sharply. Which is usually not what happens, 00:13:45.279 --> 00:13:47.639 right? A strong economy often has a strong dollar 00:13:47.639 --> 00:13:51.139 and rising rates. Exactly. So this divergence, 00:13:51.460 --> 00:13:53.679 Schwab suggests, might indicate foreign investors 00:13:53.840 --> 00:13:57.179 selling U .S. assets and maybe, more worryingly, 00:13:57.440 --> 00:14:00.059 a potential loss of confidence in the United 00:14:00.059 --> 00:14:03.919 States as a perceived safe haven. That's not 00:14:03.919 --> 00:14:05.840 good for the world's reserve currency, as they 00:14:05.840 --> 00:14:08.720 say. A serious warning sign about international 00:14:08.720 --> 00:14:10.879 trust in the U .S. economy. Definitely a key 00:14:10.879 --> 00:14:13.840 point. They also noted big spikes in volatility 00:14:13.840 --> 00:14:16.679 measures, the VIX for stocks, the movie index 00:14:16.679 --> 00:14:19.519 for bonds, and that bond volatility wasn't really 00:14:19.519 --> 00:14:23.029 settling down. And the stock market itself. The 00:14:23.029 --> 00:14:25.610 S &P 500 had almost hit bear market territory, 00:14:26.149 --> 00:14:28.610 then had this huge one -day jump. Right, and 00:14:28.610 --> 00:14:30.929 they make the point that big single -day surges 00:14:30.929 --> 00:14:33.149 like that are often more typical during bear 00:14:33.149 --> 00:14:35.450 markets, not necessarily signs of a healthy recovery. 00:14:35.669 --> 00:14:37.889 Another technical thing they mentioned was this 00:14:37.889 --> 00:14:40.690 parabolic increase in intra -index correlation. 00:14:40.789 --> 00:14:43.169 What does that mean, basically? It means most 00:14:43.169 --> 00:14:46.289 stocks within an index, like the S &P 500, We're 00:14:46.289 --> 00:14:49.309 just moving together up or down driven by the 00:14:49.309 --> 00:14:52.350 big picture, the policy news. It makes it really 00:14:52.350 --> 00:14:54.710 hard for investors to pick individual winners 00:14:54.710 --> 00:14:57.750 or losers based on company fundamentals because 00:14:57.750 --> 00:15:00.149 everything's getting swept along. So traditional 00:15:00.149 --> 00:15:03.279 stock picking gets much harder. Very difficult. 00:15:03.500 --> 00:15:07.100 They also talked about a washout in market breath, 00:15:07.299 --> 00:15:09.299 meaning the selling pressure was really widespread, 00:15:09.399 --> 00:15:12.039 not just isolated pockets. And they felt the 00:15:12.039 --> 00:15:15.279 market needed some kind of clear positive catalyst 00:15:15.279 --> 00:15:18.100 to really turn around. And sector -wise. Defensive 00:15:18.100 --> 00:15:20.259 sectors were doing better, consumer staples, 00:15:20.419 --> 00:15:22.519 utilities, health care, the stuff people need 00:15:22.519 --> 00:15:25.179 regardless of the economy. Growth areas were 00:15:25.179 --> 00:15:27.299 lagging. Makes sense in an uncertain environment. 00:15:27.460 --> 00:15:30.200 And because the uncertainty was so extreme, Schwab 00:15:30.200 --> 00:15:32.500 did something pretty unusual. neutralized all 00:15:32.500 --> 00:15:35.259 their sector ratings to market perform, basically 00:15:35.259 --> 00:15:37.840 saying, we don't have enough conviction to recommend 00:15:37.840 --> 00:15:40.379 overweighting any sector right now. Wow. And 00:15:40.379 --> 00:15:43.059 they compared that move to? To the peak of the 00:15:43.059 --> 00:15:46.539 COVID -19 pandemic uncertainty. So that really 00:15:46.539 --> 00:15:49.080 tells you how unstable they perceive the situation 00:15:49.080 --> 00:15:52.679 to be in April 2025, driven by policy this time. 00:15:53.340 --> 00:15:54.960 So what were they recommending for investors 00:15:54.960 --> 00:15:58.379 then? A factor -based approach. Focusing on quality 00:15:58.379 --> 00:16:01.519 companies with low volatility, low beta, meaning 00:16:01.519 --> 00:16:03.600 they move less dramatically than the overall 00:16:03.600 --> 00:16:06.940 market, and high interest coverage, meaning they 00:16:06.940 --> 00:16:10.059 can easily pay their debts. Basically, play defense, 00:16:10.940 --> 00:16:13.659 hunker down. And they explicitly blame the economic 00:16:13.659 --> 00:16:16.750 conditions on. Man -made supply shocks resulting 00:16:16.750 --> 00:16:19.090 directly from government policy, not your typical 00:16:19.090 --> 00:16:21.429 economic cycle stuff. They're pointing the finger 00:16:21.429 --> 00:16:23.590 squarely at the tariff policies and the resulting 00:16:23.590 --> 00:16:25.669 uncertainty. And a final caution not to read 00:16:25.669 --> 00:16:28.049 too much into any single day's market moves. 00:16:28.269 --> 00:16:30.669 Yeah, warning that technical factors like forced 00:16:30.669 --> 00:16:33.490 selling from leveraged traders could be driving 00:16:33.490 --> 00:16:36.210 short -term noise. The big picture, though, from 00:16:36.210 --> 00:16:39.269 Schwab. Significant market disruption, instability 00:16:39.269 --> 00:16:42.049 directly linked to administration policies, especially 00:16:42.049 --> 00:16:45.000 on trade. So... Thinking about this for you, 00:16:45.080 --> 00:16:47.879 our listener. Putting these two documents side 00:16:47.879 --> 00:16:50.220 by side, the news commentary and the market report 00:16:50.220 --> 00:16:54.960 from the same day, April 15, 2025. It really 00:16:54.960 --> 00:16:57.519 gives a much richer picture, doesn't it? And 00:16:57.519 --> 00:16:59.639 maybe a more unsettling one. It really does. 00:16:59.679 --> 00:17:02.360 You have the electoral vote news source sounding 00:17:02.360 --> 00:17:05.400 these loud alarms about democratic norms potentially 00:17:05.400 --> 00:17:08.539 eroding authoritarian tendencies. And then you 00:17:08.539 --> 00:17:11.029 have the Schwab report. providing the hard economic 00:17:11.029 --> 00:17:13.450 data showing major instability, declining investor 00:17:13.450 --> 00:17:16.289 confidence. And Schwab is explicitly linking 00:17:16.289 --> 00:17:18.430 that to the kinds of policies the other sources 00:17:18.430 --> 00:17:21.049 critiquing. The alignment is pretty stark. It 00:17:21.049 --> 00:17:23.450 really connects the political actions to tangible 00:17:23.450 --> 00:17:26.470 economic anxiety. So thinking about that day, 00:17:26.589 --> 00:17:30.440 April 15th, 2025. What questions does this deep 00:17:30.440 --> 00:17:33.039 dive raise for you personally? About the country's 00:17:33.039 --> 00:17:35.779 direction, its stability long -term. Yeah, what 00:17:35.779 --> 00:17:37.660 are the connections you see now between those 00:17:37.660 --> 00:17:39.759 political moves described in the commentary and 00:17:39.759 --> 00:17:42.079 the economic turbulence laid out by Schwab? As 00:17:42.079 --> 00:17:43.859 always, this is really just scratching the surface. 00:17:44.119 --> 00:17:46.420 We hope it gives you a solid foundation and maybe 00:17:46.420 --> 00:17:48.200 sparks some further thought or exploration on 00:17:48.200 --> 00:17:50.160 your own. Absolutely. There's always more to 00:17:50.160 --> 00:17:50.519 dig into.