WEBVTT 00:00:00.000 --> 00:00:03.919 OK, let's unpack this. So today, we've got quite 00:00:03.919 --> 00:00:06.599 a stack of sources, really fascinating stuff 00:00:06.599 --> 00:00:09.580 that takes us right into, well, institutional 00:00:09.580 --> 00:00:12.320 tension and some pretty high stakes risks. Yeah, 00:00:12.439 --> 00:00:15.320 definitely. Our deep dive is covering a lot of 00:00:15.320 --> 00:00:17.780 ground. You know, from cabinet controversy, we're 00:00:17.780 --> 00:00:21.519 talking impounded funds, luxury jets. right through 00:00:21.519 --> 00:00:25.079 to political corruption, these extreme financial 00:00:25.079 --> 00:00:28.480 instruments, and even a surprisingly tight local 00:00:28.480 --> 00:00:31.559 election battle. That's right. And our goal, 00:00:31.620 --> 00:00:33.939 really, is to try and connect these dots for 00:00:33.939 --> 00:00:36.240 you. These things might seem separate, but we're 00:00:36.240 --> 00:00:38.340 looking for that common thread. Often it's about 00:00:38.340 --> 00:00:40.560 accountability or maybe the lack of it. Right. 00:00:40.619 --> 00:00:42.640 We want to distill the, well, the surprising 00:00:42.640 --> 00:00:45.600 facts so you get a quick but still thorough understanding 00:00:45.600 --> 00:00:48.020 of what's driving things right now. Get you up 00:00:48.020 --> 00:00:50.100 to speed efficiently. OK, let's start with that 00:00:50.100 --> 00:00:53.579 cabinet drama, specifically DHS Secretary Kristi 00:00:53.579 --> 00:00:56.719 Noem. Yeah, and to really get the weight of this, 00:00:56.719 --> 00:00:58.240 it helps to look back a bit, you know, the sort 00:00:58.240 --> 00:01:00.820 of the historical benchmark for cabinet trouble. 00:01:00.979 --> 00:01:03.780 The gold standard of scandal. Maybe the tarnished 00:01:03.780 --> 00:01:06.540 gold standard. That's long been Albert Fall. 00:01:07.060 --> 00:01:09.260 Teapot Dome scandal. Right. The first cabinet 00:01:09.260 --> 00:01:11.439 secretary actually jailed for stuff he did in 00:01:11.439 --> 00:01:15.439 office. That name always comes up. Exactly. The 00:01:15.439 --> 00:01:18.909 platonic ideal of corrupt cabinetry. as the sources 00:01:18.909 --> 00:01:22.670 put it, sets it pretty high or maybe low bar. 00:01:23.230 --> 00:01:25.409 And the reporting we're looking at suggests Secretary 00:01:25.409 --> 00:01:27.950 Noem is, well, making a pretty strong run at 00:01:27.950 --> 00:01:30.890 that title. Especially in the current political 00:01:30.890 --> 00:01:34.010 climate. The sources mentioned an executive branch 00:01:34.010 --> 00:01:37.730 feeling, let's say, less constrained in appointing 00:01:37.730 --> 00:01:40.760 what they call them loyal lackeys. That's the 00:01:40.760 --> 00:01:43.280 phrase. And her actions are apparently causing 00:01:43.280 --> 00:01:45.680 real friction even within her own party on Capitol 00:01:45.680 --> 00:01:48.459 Hill. Oh, definitely. The sources say she's actively 00:01:48.459 --> 00:01:51.120 irritating Republican members. Slow -walking 00:01:51.120 --> 00:01:52.920 contracts, being hard to get a hold of, that 00:01:52.920 --> 00:01:54.620 kind of thing. Political to work with. Exactly. 00:01:55.040 --> 00:01:56.959 And there's this quote in there from an anonymous 00:01:56.959 --> 00:01:59.819 GEO Key member, pretty raw. It says, uh, you 00:01:59.819 --> 00:02:01.599 would think a former member of Congress would 00:02:01.599 --> 00:02:03.480 have more fewing respect for the institution 00:02:03.480 --> 00:02:06.200 she used to serve in. Wow. OK. That's blunt. 00:02:06.579 --> 00:02:08.479 Shows the level of frustration. High friction. 00:02:08.580 --> 00:02:11.439 Absolutely. But the real issue here, the structural 00:02:11.439 --> 00:02:14.280 one, seems to be about money that Congress already 00:02:14.280 --> 00:02:16.699 approved. Right. That's the core of it. The sources 00:02:16.699 --> 00:02:19.219 detail that she basically put out an order. Requiring 00:02:19.219 --> 00:02:21.500 her personal sign off. For everything over $100 00:02:21.500 --> 00:02:26.539 ,000. Even funds Congress specifically appropriated, 00:02:26.860 --> 00:02:28.580 meaning they already directed where that money 00:02:28.580 --> 00:02:31.000 should go. OK. That sounds like a big deal. The 00:02:31.000 --> 00:02:34.919 term used is cabinet -level impoundment. What 00:02:34.919 --> 00:02:38.340 exactly is that and why is it such a legal flashpoint? 00:02:38.840 --> 00:02:40.879 Well, it's essentially the executive branch trying 00:02:40.879 --> 00:02:45.479 to exercise a kind of financial veto after the 00:02:45.479 --> 00:02:48.340 fact. Congress allocates funds, says spend this 00:02:48.340 --> 00:02:51.110 money on Project X. Right. Empowerment is when 00:02:51.110 --> 00:02:52.990 the executive says, actually, no, I'm just going 00:02:52.990 --> 00:02:55.669 to hold on to it. Or in this case, put such a 00:02:55.669 --> 00:02:57.610 tight bottleneck on it with personal approval 00:02:57.610 --> 00:03:00.050 that it amounts to the same thing. So it challenges 00:03:00.050 --> 00:03:02.729 Congress's power of the purse directly. Exactly. 00:03:02.810 --> 00:03:05.370 It's a massive power struggle, really. A direct 00:03:05.370 --> 00:03:07.270 challenge to that fundamental constitutional 00:03:07.270 --> 00:03:09.590 authority. And this isn't just theoretical. It's 00:03:09.590 --> 00:03:13.319 having real world effects. Oh, absolutely. Tangible, 00:03:13.479 --> 00:03:15.860 devastating consequences, according to the sources. 00:03:16.659 --> 00:03:18.979 Senator Ted Butt, Republican from North Carolina, 00:03:19.259 --> 00:03:22.340 he's reportedly furious. Why is that? Because 00:03:22.340 --> 00:03:25.560 billions, billions with a B in Hurricane Helene 00:03:25.560 --> 00:03:28.560 rebuild aid for Western North Carolina are apparently 00:03:28.560 --> 00:03:32.639 stuck, held up by this 100K approval rule. Billions 00:03:32.639 --> 00:03:35.539 for hurricane relief. just sitting there waiting 00:03:35.539 --> 00:03:38.439 for her signature effectively. And Bud's response 00:03:38.439 --> 00:03:40.319 has been equally aggressive. He's put a hold 00:03:40.319 --> 00:03:44.099 on all DHS nominations, everything. So using 00:03:44.099 --> 00:03:47.000 the leverage he has classic Washington hardball 00:03:47.000 --> 00:03:49.520 is how the game is played. Yeah. And it's not 00:03:49.520 --> 00:03:51.780 just North Carolina feeling the pain. The sources 00:03:51.780 --> 00:03:53.939 mentioned grants for projects in West Virginia, 00:03:54.639 --> 00:03:56.500 a crucial flood aid for the Texas Hill country 00:03:56.500 --> 00:03:59.400 also stuck in the same bureaucratic jam. All 00:03:59.400 --> 00:04:01.439 because of this personal approval bottleneck? 00:04:01.520 --> 00:04:04.060 Seems that way. Now, DHS has a response, right? 00:04:04.300 --> 00:04:06.520 Their spokesperson says she's just rooting out 00:04:06.520 --> 00:04:09.719 waste, fraud, and abuse. Sounds reasonable on 00:04:09.719 --> 00:04:11.439 the surface. It sounds reasonable, sure. But 00:04:11.439 --> 00:04:13.479 the legal reality, as the sources emphasize, 00:04:13.520 --> 00:04:15.879 is pretty clear. The law generally requires her 00:04:15.879 --> 00:04:18.160 to spend the money as Congress -directed. She 00:04:18.160 --> 00:04:21.139 can't just decide not to spend appropriated funds 00:04:21.139 --> 00:04:24.100 because she feels like it. Not really, no. There 00:04:24.100 --> 00:04:27.100 are very limited exceptions, but this... broad 00:04:27.100 --> 00:04:30.759 $100K approval requirement seems to go way beyond 00:04:30.759 --> 00:04:34.180 rooting out waste. It looks like policymaking 00:04:34.180 --> 00:04:36.639 through administrative hurdles, which isn't her 00:04:36.639 --> 00:04:38.839 constitutional role regarding appropriations. 00:04:39.339 --> 00:04:41.819 Meanwhile, where are her priorities, according 00:04:41.819 --> 00:04:44.379 to these sources? Is she focused on fixing this? 00:04:44.920 --> 00:04:47.850 Well, the reporting suggests maybe not. It notes 00:04:47.850 --> 00:04:50.829 she skips some pretty high -level routine duties 00:04:50.829 --> 00:04:53.189 like the annual worldwide threats assessment 00:04:53.189 --> 00:04:54.550 hearing. That's a big one. That's skipping the 00:04:54.550 --> 00:04:57.910 threats hearing. Yeah. And there's a quote from 00:04:57.910 --> 00:05:01.009 a senior GOPA that kind of sums up the feeling 00:05:01.009 --> 00:05:03.290 inside the party or at least parts of it. What's 00:05:03.290 --> 00:05:05.889 that? That she's less interested in doing the 00:05:05.889 --> 00:05:08.410 blocking and tackling of her day job than she 00:05:08.410 --> 00:05:10.569 is with promoting herself in taxpayer -funded 00:05:10.569 --> 00:05:13.689 TV commercials. Oh, okay. Self -promotion. And 00:05:13.689 --> 00:05:16.790 apparently that requires traveling in... Quite 00:05:16.790 --> 00:05:19.209 some style. That brings us to the jets. This 00:05:19.209 --> 00:05:21.949 is where the optics get. Yeah, pretty staggering 00:05:21.949 --> 00:05:23.970 as you said. What are we talking about? The U 00:05:23.970 --> 00:05:26.689 .S. Coast Guard, which is part of DHS, recently 00:05:26.689 --> 00:05:30.670 purchased two top -of -line Gulfstream G700 jets. 00:05:30.889 --> 00:05:33.430 Two? For how much? The reported price tag is 00:05:33.430 --> 00:05:39.170 $172 million. $172 million. For two planes? Yep. 00:05:39.389 --> 00:05:41.750 Ostensibly for her use, you know, when visiting 00:05:41.750 --> 00:05:44.050 disaster sites under FEMA, which is also DHS. 00:05:44.290 --> 00:05:48.649 Okay, wait. $172 million. Plus, I assume, huge 00:05:48.649 --> 00:05:51.810 ongoing costs for a maintenance fuel crew. Absolutely. 00:05:52.009 --> 00:05:54.209 Those costs add up fast. And look, the Coast 00:05:54.209 --> 00:05:55.930 Guard certainly needs aircraft for its missions. 00:05:56.149 --> 00:05:58.350 Nobody disputes that. But the sources really 00:05:58.350 --> 00:06:00.930 focus on the judgment here. Buying these specific 00:06:00.930 --> 00:06:03.629 ultra -luxury top -tier jets, especially when 00:06:03.629 --> 00:06:06.500 budgets are tight and scrutiny is high. It raises 00:06:06.500 --> 00:06:09.420 questions. So question is need versus want. Is 00:06:09.420 --> 00:06:12.360 there a specific security reason or some high 00:06:12.360 --> 00:06:14.639 level operational justification cited for needing 00:06:14.639 --> 00:06:17.639 these particular $86 million planes? Did the 00:06:17.639 --> 00:06:19.819 sources address that? They did, primarily by 00:06:19.819 --> 00:06:21.620 highlighting the cost contrast, which is pretty 00:06:21.620 --> 00:06:23.839 stark. This is the aha moment that congressional 00:06:23.839 --> 00:06:26.259 critics jumped on. Lay it out for us. OK, so 00:06:26.259 --> 00:06:30.100 if the secretary flew, say, first class commercially 00:06:30.100 --> 00:06:33.959 from DC to LA round trip, most expensive refundable 00:06:33.959 --> 00:06:37.189 ticket. Maybe $2 ,100, give or take. Even if 00:06:37.189 --> 00:06:39.329 she chartered a private jet, a nice light jet, 00:06:39.689 --> 00:06:42.449 maybe $75 ,000 for that round trip. Let's say 00:06:42.449 --> 00:06:45.910 she did that 12 times a year. That's $900 ,000 00:06:45.910 --> 00:06:50.230 annually. Over 10 years, it's $9 million. Now, 00:06:50.230 --> 00:06:53.490 compare that $9 million for a decade of flexible 00:06:53.490 --> 00:06:57.800 travel. To the $172 million. upfront purchase 00:06:57.800 --> 00:07:00.339 price for just the two Gulf Streams before fuel 00:07:00.339 --> 00:07:03.199 maintenance crew. Exactly. That enormous difference 00:07:03.199 --> 00:07:05.639 is why representatives Delaro and Underwood wrote 00:07:05.639 --> 00:07:08.259 that letter, expressing deep concern, questioning 00:07:08.259 --> 00:07:10.019 her judgment. And they used some pretty strong 00:07:10.019 --> 00:07:12.000 language, didn't they? Something about priorities. 00:07:12.319 --> 00:07:14.160 Yeah, they suggested the procurement implied 00:07:14.160 --> 00:07:16.459 the Coast Guard was told to prioritize your own 00:07:16.459 --> 00:07:18.920 comfort over actual operational needs. And this 00:07:18.920 --> 00:07:20.680 was happening even during a government shutdown 00:07:20.680 --> 00:07:23.579 period, which makes the optics even worse. Prioritizing 00:07:23.579 --> 00:07:26.079 comfort over mission needs. During a shutdown. 00:07:26.220 --> 00:07:28.500 Wow. And then there's one final detail that the 00:07:28.500 --> 00:07:30.139 sources highlight, kind of the cherry on top 00:07:30.139 --> 00:07:33.040 of this image of prioritizing perks. What's that? 00:07:33.220 --> 00:07:35.959 She's apparently living rent free in the house 00:07:35.959 --> 00:07:38.000 that's actually intended for the commandant of 00:07:38.000 --> 00:07:41.379 the Coast Guard. Really? Yeah. It all pains a 00:07:41.379 --> 00:07:44.100 picture, doesn't it? Circling back to that theme 00:07:44.100 --> 00:07:47.399 of personal convenience, potentially trumping 00:07:47.399 --> 00:07:49.879 institutional responsibility. OK, so that's the 00:07:49.879 --> 00:07:51.800 personal angle, the administrative overreach. 00:07:52.110 --> 00:07:55.370 But the sources pivot pretty quickly from there 00:07:55.370 --> 00:07:58.709 to something maybe even more fundamental, institutional 00:07:58.709 --> 00:08:01.189 failure at the highest level. Let's talk about 00:08:01.189 --> 00:08:02.670 the White House construction. This is where it 00:08:02.670 --> 00:08:04.870 gets really interesting. Yeah, this is quite 00:08:04.870 --> 00:08:07.790 something. The sources detail immediate demolition 00:08:07.790 --> 00:08:09.889 work starting in parts of the East Wing. Which 00:08:09.889 --> 00:08:12.649 parts? We're talking about areas with real historical 00:08:12.649 --> 00:08:15.750 weight. Former offices used by Eleanor Roosevelt. 00:08:16.000 --> 00:08:18.980 actual bunkers dating back to World War II, even 00:08:18.980 --> 00:08:22.220 the public tour entrance area. Gone. Why? To 00:08:22.220 --> 00:08:24.980 make way for a new ballroom. A ballroom. They 00:08:24.980 --> 00:08:28.300 tore out WWII bunkers for a ballroom. That's 00:08:28.300 --> 00:08:30.439 what the sources report. Yeah. And it's not just 00:08:30.439 --> 00:08:32.580 like, you know, knocking down a non -load -bearing 00:08:32.580 --> 00:08:35.460 wall. This involves restructuring a national 00:08:35.460 --> 00:08:38.860 landmark, erasing historical fabric. And the 00:08:38.860 --> 00:08:42.200 legality of this, was it all approved? That's 00:08:42.200 --> 00:08:44.600 the critical point. The sources are very clear. 00:08:44.960 --> 00:08:48.019 The construction started without the required 00:08:48.019 --> 00:08:50.460 federal approval without approvals. Yep, the 00:08:50.460 --> 00:08:53.279 sources flat -out call the move Certainly illegal 00:08:53.279 --> 00:08:56.500 certainly illegal, but is anything happening 00:08:56.500 --> 00:08:59.059 about it accountability? Well, that's the thing 00:08:59.059 --> 00:09:01.940 the sources suggest. There's very little expectation 00:09:01.940 --> 00:09:04.259 of any real accountability right now Why not 00:09:04.259 --> 00:09:06.539 because as they point out the entities that would 00:09:06.539 --> 00:09:09.120 normally provide oversight or enforce those rules 00:09:09.639 --> 00:09:11.740 Well, they don't seem to have the ability or 00:09:11.740 --> 00:09:14.480 perhaps the interest to intervene effectively 00:09:14.480 --> 00:09:17.240 in this climate. The checks and balances seem 00:09:17.240 --> 00:09:21.200 paused. Functionally paused. And the funding 00:09:21.200 --> 00:09:25.080 for this unapproved, possibly illegal ballroom. 00:09:25.179 --> 00:09:27.620 Ah, yes. The sources describe the funding aspect 00:09:27.620 --> 00:09:30.759 as grifty. Grifty. So? Apparently the president 00:09:30.759 --> 00:09:33.399 hosted a big dinner. A shakedown fundraiser is 00:09:33.399 --> 00:09:36.139 the term used. Yeah. Wealthy donors. But there's 00:09:36.139 --> 00:09:39.429 reportedly zero transparency. Who's paying? How 00:09:39.429 --> 00:09:41.029 much are they kicking in for this? What sounds 00:09:41.029 --> 00:09:44.389 like an eight figure project? And maybe most 00:09:44.389 --> 00:09:46.769 importantly, what are these donors getting or 00:09:46.769 --> 00:09:49.350 expecting to get in return for such a massive 00:09:49.350 --> 00:09:52.889 contribution? So huge potential for influence 00:09:52.889 --> 00:09:55.429 peddling right there. It raises major questions 00:09:55.429 --> 00:09:58.350 and it leads to some interesting speculation 00:09:58.350 --> 00:10:01.149 in the sources about the future. Like what? Like 00:10:01.149 --> 00:10:03.250 what happens when there's eventually a changed 00:10:03.250 --> 00:10:06.730 administration? How might the next Democratic 00:10:06.730 --> 00:10:09.850 president handle this new ballroom built under 00:10:09.850 --> 00:10:12.090 these circumstances? What do they suggest? One 00:10:12.090 --> 00:10:15.789 idea floated is maybe turn that huge space into 00:10:15.789 --> 00:10:17.610 something like the White House Office of Diversity, 00:10:17.710 --> 00:10:19.809 Equity and Inclusion. You know, make a statement 00:10:19.809 --> 00:10:22.750 by repurposing a structure that erased historical 00:10:22.750 --> 00:10:25.379 precedent. That would be... A statement, all 00:10:25.379 --> 00:10:27.899 right? This theme of disregarding rules, norms, 00:10:28.259 --> 00:10:31.059 it seems to extend into nominations, too. Tragically 00:10:31.059 --> 00:10:33.360 so, yes. We saw that very dramatically with Paul 00:10:33.360 --> 00:10:35.240 Ingrasio's nomination. He was tapped to lead 00:10:35.240 --> 00:10:38.039 the Office of Special Counsel. Right. OSC. Important 00:10:38.039 --> 00:10:41.500 watchdog role. Crucial role. But his nomination 00:10:41.500 --> 00:10:44.620 just imploded, fell apart almost instantly. What 00:10:44.620 --> 00:10:47.059 happened? Politico got hold of some text messages 00:10:47.059 --> 00:10:50.240 he'd sent, and they published them right before... 00:10:50.299 --> 00:10:52.840 He was due to appear before the Senate Judiciary 00:10:52.840 --> 00:10:55.620 Committee. And the texts were bad. Bad doesn't 00:10:55.620 --> 00:10:58.100 begin to cover it. The sources describe them 00:10:58.100 --> 00:11:01.899 as absolutely jaw -dropping, truly extreme stuff. 00:11:02.100 --> 00:11:03.940 Like what? Can you give us the specifics, just 00:11:03.940 --> 00:11:07.039 reporting what the sources found? Sure. So impartially 00:11:07.039 --> 00:11:10.200 reporting the content, the messages included 00:11:10.200 --> 00:11:12.399 statements like Martin Luther King Jr. should 00:11:12.399 --> 00:11:16.019 be tossed into the seventh circle of hell, demands 00:11:16.019 --> 00:11:19.830 to eliminate Juneteenth, and also Kwanzaa, which 00:11:19.830 --> 00:11:22.769 he apparently spelled Kwanzaa. Wow. OK. Anything 00:11:22.769 --> 00:11:25.610 else? Yes. He reportedly used an extremely offensive 00:11:25.610 --> 00:11:28.370 Italian slur, Moulinan holidays, referring to 00:11:28.370 --> 00:11:30.669 black people. And he reiterated the sentiment 00:11:30.669 --> 00:11:32.889 that African countries are shoal cult countries. 00:11:33.149 --> 00:11:36.190 Just vile stuff. It's shocking language. And 00:11:36.190 --> 00:11:37.990 then maybe the most damning part, there was an 00:11:37.990 --> 00:11:40.370 exchange reported where someone texted him kind 00:11:40.370 --> 00:11:42.809 of linking him to the Hitler youth. And his response? 00:11:43.230 --> 00:11:46.519 According to the sources, Ingrassi replied, I 00:11:46.519 --> 00:11:48.580 do have a Nazi streak in me from time to time. 00:11:48.679 --> 00:11:51.259 I will admit it. He admitted to having a Nazi 00:11:51.259 --> 00:11:54.059 streak. In writing. That's what the sources report 00:11:54.059 --> 00:11:56.500 was in the texts. It's almost unbelievable that 00:11:56.500 --> 00:11:59.100 someone with those views would even be considered, 00:11:59.299 --> 00:12:02.200 let alone nominated for OSC. Did the vetting 00:12:02.200 --> 00:12:04.799 process just completely miss this? That's the 00:12:04.799 --> 00:12:07.080 question everyone was asking. How did this get 00:12:07.080 --> 00:12:10.059 through? The sheer intensity and volume of the 00:12:10.059 --> 00:12:12.659 bigotry. Yeah. It's stunning. And the Senate's 00:12:12.659 --> 00:12:15.580 reaction. Swift and decisive. Even conservative 00:12:15.580 --> 00:12:18.940 Republicans couldn't stomach it. Three GOP senators, 00:12:19.259 --> 00:12:22.019 Rick Scott, James Langford, Ron Johnson, immediately 00:12:22.019 --> 00:12:24.700 came out as no votes. They specifically cited 00:12:24.700 --> 00:12:27.179 the anti -Semitism present in the text alongside 00:12:27.179 --> 00:12:30.460 the other bigotry. So bipartisan rejection. Completely. 00:12:31.039 --> 00:12:33.019 Senate Majority Leader John Thune. basically 00:12:33.019 --> 00:12:35.299 pulled the plug publicly, told reporters he hoped 00:12:35.299 --> 00:12:36.799 the White House would withdraw the nomination 00:12:36.799 --> 00:12:39.100 and flatly stated he's not going to pass. Game 00:12:39.100 --> 00:12:41.840 over. Absolutely. The material was just too toxic, 00:12:41.980 --> 00:12:44.419 too indefensible. Even allies had to draw a line. 00:12:44.940 --> 00:12:47.360 The prediction now is withdrawal, maybe followed 00:12:47.360 --> 00:12:49.279 by an attempt to appoint him to a non -Senate 00:12:49.279 --> 00:12:51.539 confirmed role later. We'll see. Sadly, that 00:12:51.539 --> 00:12:54.679 kind of rhetoric isn't limited to nominees sitting 00:12:54.679 --> 00:12:58.080 senators, too. Unfortunately, yes. The sources 00:12:58.080 --> 00:13:00.379 point to an appearance by Senator Tommy Tuberville 00:13:00.379 --> 00:13:02.940 on Fox. What did he say? He was talking about 00:13:02.940 --> 00:13:05.440 Zoran Mamdani, who, it's important to note, is 00:13:05.440 --> 00:13:09.120 a legal U .S. citizen running for mayor. Tuberville 00:13:09.120 --> 00:13:11.480 suggested Mamdani ought to be, quote, packed 00:13:11.480 --> 00:13:13.580 him up and send him home. Send a U .S. citizen 00:13:13.580 --> 00:13:16.899 home? Why? Simply because he's Muslim. Tuberville 00:13:16.899 --> 00:13:20.200 explicitly linked Mamdani's candidacy to what 00:13:20.200 --> 00:13:23.100 he called a huge problem with Sharia law and 00:13:23.100 --> 00:13:25.019 the Muslims trying to take over all the areas 00:13:25.019 --> 00:13:27.460 in our country. Wow. Yeah. The sources frame 00:13:27.460 --> 00:13:30.740 this as just open declaration that a legal citizen 00:13:30.740 --> 00:13:33.320 should be deported based on his religion. Indulging 00:13:33.320 --> 00:13:35.759 in these really vile generalizations, blatant 00:13:35.759 --> 00:13:38.799 Islamophobia, it runs counter to, well, everything 00:13:38.799 --> 00:13:41.019 civic engagement is supposed to be about. It's 00:13:41.019 --> 00:13:44.009 a disturbing pattern. Ignoring rules, pushing 00:13:44.009 --> 00:13:46.830 boundaries, using inflammatory rhetoric, which 00:13:46.830 --> 00:13:49.250 actually leads us pretty neatly into the financial 00:13:49.250 --> 00:13:52.330 world because some players there seem to be exploiting 00:13:52.330 --> 00:13:55.350 loopholes too. Exactly. Exploiting a technicality 00:13:55.350 --> 00:13:57.850 created by the government shutdown specifically 00:13:57.850 --> 00:14:00.330 to push some truly extreme financial products 00:14:00.330 --> 00:14:02.450 onto the market. OK, let's pivot to financial 00:14:02.450 --> 00:14:04.769 risk. What's going on? Well, first, there's this 00:14:04.769 --> 00:14:07.070 broader cultural shift the sources highlight. 00:14:07.789 --> 00:14:10.029 A move towards what they call investor short 00:14:10.029 --> 00:14:13.139 -termism. Meaning? Meaning retail traders, everyday 00:14:13.139 --> 00:14:15.059 investors are increasingly trying to beat the 00:14:15.059 --> 00:14:18.759 market not over years or decades, but in hours 00:14:18.759 --> 00:14:21.940 or days. It's a very different mindset from traditional 00:14:21.940 --> 00:14:24.940 investing. More like gambling. It certainly fuels 00:14:24.940 --> 00:14:27.759 demand for more speculative products. Which brings 00:14:27.759 --> 00:14:29.960 us to the filing. What filing? A company called 00:14:29.960 --> 00:14:33.120 Volatility Shares file papers with the SEC. They 00:14:33.120 --> 00:14:35.620 want to launch a whole suite of fives X leveraged 00:14:35.620 --> 00:14:38.460 ETFs. Five times leverage? What does that even 00:14:38.460 --> 00:14:41.549 mean? It means for every 1 % the underlying asset 00:14:41.549 --> 00:14:43.690 like a single stock or cryptocurrency moves, 00:14:44.129 --> 00:14:47.330 the ETS aims to move 5 % up or down. So huge 00:14:47.330 --> 00:14:49.889 potential gains, but also huge potential losses. 00:14:50.250 --> 00:14:52.649 What's the current limit on leverage for these 00:14:52.649 --> 00:14:55.769 things? Right now, the max is generally 2x. So 00:14:55.769 --> 00:14:59.870 jumping to 5x is a massive leap in risk. OK, 00:15:00.110 --> 00:15:03.409 a huge jump in risk. Why now? And how does the 00:15:03.409 --> 00:15:06.929 shutdown play into this? Ah, the timing. That's 00:15:06.929 --> 00:15:09.750 the crucial opportunistic part. because the government 00:15:09.750 --> 00:15:12.889 is shut down, the SEC isn't fully operational. 00:15:13.070 --> 00:15:15.509 Right. There's a provision, Section A, of the 00:15:15.509 --> 00:15:18.350 relevant act that says if the SEC doesn't object 00:15:18.350 --> 00:15:20.350 to a filing within a certain time frame in this 00:15:20.350 --> 00:15:23.409 case, 20 days, it can become effective automatically. 00:15:23.649 --> 00:15:25.830 Wait, so they're trying to get these super risky 00:15:25.830 --> 00:15:29.629 5X ETFs approved by default just because the 00:15:29.629 --> 00:15:31.850 regulators are sidelined by the shutdown. That 00:15:31.850 --> 00:15:33.809 appears to be the strategy. They're banked on 00:15:33.809 --> 00:15:36.200 this regulatory loophole. using the shutdown 00:15:36.200 --> 00:15:38.360 to push through something that might face much 00:15:38.360 --> 00:15:40.379 tougher scrutiny under normal circumstances. 00:15:40.899 --> 00:15:43.860 That seems incredibly cynical, but okay, 5x leverage, 00:15:44.019 --> 00:15:45.779 if the market rockets up, you make a fortune, 00:15:45.940 --> 00:15:47.960 right? What's the catch? What's a risk the experts 00:15:47.960 --> 00:15:49.620 are worried about? The catch is something called 00:15:49.620 --> 00:15:52.840 decay, and it's severe with leveraged ETFs, especially 00:15:52.840 --> 00:15:56.519 at 5x. Decay. Yeah, because these products reset 00:15:56.519 --> 00:15:58.879 their leverage daily. They don't track the long 00:15:58.879 --> 00:16:00.980 -term performance of the underlying asset. They 00:16:00.980 --> 00:16:03.440 track the daily percentage change. Magnified. 00:16:03.700 --> 00:16:06.419 How does that cause decay? OK, think about it 00:16:06.419 --> 00:16:09.580 this way. Market goes up 10 % one day, down 10 00:16:09.580 --> 00:16:13.799 % the next, then up 10 % again. A regular ETF 00:16:13.799 --> 00:16:16.399 holding the asset would be roughly flat, maybe 00:16:16.399 --> 00:16:18.940 slightly down. Makes sense. But a 5X leveraged 00:16:18.940 --> 00:16:23.500 ETF, on day one, it's up 50%. Great. Day two, 00:16:23.559 --> 00:16:26.779 the market drops 10%, so the ETF drops 50 % from 00:16:26.779 --> 00:16:29.139 its new higher value. That wipes out a huge chunk. 00:16:29.539 --> 00:16:33.139 Day three, market's up 10%, ETF's up 50 % again, 00:16:33.399 --> 00:16:35.259 but from a much lower base. So the volatility 00:16:35.259 --> 00:16:37.620 chews it up, even if the underlying asset ends 00:16:37.620 --> 00:16:40.279 up flat. Exactly. The daily resetting in a volatile 00:16:40.279 --> 00:16:42.860 market just erodes the value incredibly quickly. 00:16:43.320 --> 00:16:45.639 The sources cite historical data. Something like 00:16:45.639 --> 00:16:48.399 17 percent of leverage ETS launched just three 00:16:48.399 --> 00:16:50.700 years ago have already lost over 98 percent of 00:16:50.700 --> 00:16:52.840 their value. 98 percent loss. So they basically 00:16:52.840 --> 00:16:55.460 evaporate. They can. Yeah. Which is why many 00:16:55.460 --> 00:16:57.320 experts say these aren't really investment vehicles 00:16:57.320 --> 00:16:59.360 at all. They're short term trading tools almost 00:16:59.360 --> 00:17:01.919 like casino chips. And this kind of speculation 00:17:01.919 --> 00:17:05.400 is growing. Significantly. The sources note nearly 00:17:05.400 --> 00:17:08.519 a third of all equity ETFs launched this year 00:17:08.519 --> 00:17:11.079 in corporate leverage. It's a booming niche. 00:17:11.240 --> 00:17:13.240 What are the big financial commentators saying? 00:17:13.380 --> 00:17:16.059 They're definitely raising alarms. Lizanne Saunders, 00:17:16.059 --> 00:17:18.240 for example, pointed out that while leverage 00:17:18.240 --> 00:17:21.960 ETFs are still only about 1 % of total ETF assets 00:17:21.960 --> 00:17:24.599 under management. OK, small slice overall. Right. 00:17:24.900 --> 00:17:27.119 But they account for something like 12 % of recent 00:17:27.119 --> 00:17:30.099 creating activity and an even higher share of 00:17:30.099 --> 00:17:33.460 new ETF offerings. So the activity and the new 00:17:33.460 --> 00:17:36.559 product focus are way out of proportion. Suggests 00:17:36.559 --> 00:17:39.140 frothiness. Exactly. She said it directly. This 00:17:39.140 --> 00:17:41.680 kind of speculation does concern me. And is there 00:17:41.680 --> 00:17:44.250 a counter -argument? A recommended alternative? 00:17:44.630 --> 00:17:46.450 Well, firms like Hedgeye, quoted in the sources, 00:17:46.569 --> 00:17:48.529 are pretty blunt. They call this kind of hyper 00:17:48.529 --> 00:17:51.910 -leveraged short -term play the antithesis of 00:17:51.910 --> 00:17:54.230 safe wealth compounding. The opposite of what 00:17:54.230 --> 00:17:56.869 you should do for long -term wealth. Precisely. 00:17:57.049 --> 00:17:59.210 Their recommendation, and that of many traditional 00:17:59.210 --> 00:18:01.990 advisors, is what they call the better way. Build 00:18:01.990 --> 00:18:05.329 a diversified, global, maybe actively managed 00:18:05.329 --> 00:18:07.769 portfolio. Something designed to endure market 00:18:07.769 --> 00:18:10.640 cycles and build lasting wealth. not something 00:18:10.640 --> 00:18:12.700 designed for a quick thrill that could instantly 00:18:12.700 --> 00:18:15.200 vaporize. A very different philosophy. Okay, 00:18:15.240 --> 00:18:17.480 let's shift gears dramatically now from high 00:18:17.480 --> 00:18:20.099 finance back to politics, but this time very 00:18:20.099 --> 00:18:23.859 local, the NYC mayoral race. Yeah, and it's turned 00:18:23.859 --> 00:18:26.720 into a really interesting and surprisingly tight 00:18:26.720 --> 00:18:29.359 three -way contest or potentially two -way. Who 00:18:29.359 --> 00:18:31.900 are the main players now? We've got Zoran Mumdani, 00:18:32.019 --> 00:18:34.799 the Democrat, Andrew Cuomo running as an independent, 00:18:35.400 --> 00:18:38.019 and Curtis Sluwa, the Republican. Okay. And the 00:18:38.019 --> 00:18:39.819 polling, what does it show? Well, consistently, 00:18:39.960 --> 00:18:41.940 Mavdoni has been holding a pretty significant 00:18:41.940 --> 00:18:44.940 lead. The polling aggregators, those groups that 00:18:44.940 --> 00:18:47.359 average different polls, put his lead somewhere 00:18:47.359 --> 00:18:50.619 between 13 percent and 17 .6 percent. That's 00:18:50.619 --> 00:18:52.920 a solid double -digit advantage. A progressive 00:18:52.920 --> 00:18:55.559 Democrat with a strong lead in NYC, what's driving 00:18:55.559 --> 00:18:57.720 that? The dynamic seems pretty clear from the 00:18:57.720 --> 00:19:01.079 sources. When the previous incumbent, Eric Adams, 00:19:01.440 --> 00:19:04.720 dropped out or his support collapsed, most of 00:19:04.720 --> 00:19:06.920 that support went to Andrew Cuomo. Right, the 00:19:06.920 --> 00:19:10.160 former governor trying a comeback. Exactly. But 00:19:10.160 --> 00:19:13.200 crucially, not enough support migrated to Cuomo 00:19:13.200 --> 00:19:16.079 to close the gap with Mamdani. So Mamdani is 00:19:16.079 --> 00:19:19.079 holding onto his base and the anti -Mamdani vote 00:19:19.079 --> 00:19:23.150 is split. That seems to be the key factor. Momdadi 00:19:23.150 --> 00:19:25.190 has apparently unified the city's progressive 00:19:25.190 --> 00:19:28.230 base very effectively, and the opposition is 00:19:28.230 --> 00:19:30.789 divided between Cuomo and Sliwa. Which means 00:19:30.789 --> 00:19:33.769 Cuomo needs Sliwa out of the race. That's Cuomo's 00:19:33.769 --> 00:19:35.750 only realistic path to victory, according to 00:19:35.750 --> 00:19:38.150 the analysis. He and his supporters, including 00:19:38.150 --> 00:19:39.930 outlets like Fox News and the New York Post, 00:19:40.170 --> 00:19:42.250 which the sources note are owned by Rupert Murdoch, 00:19:42.529 --> 00:19:44.950 are basically openly pleading for Sliwa to drop 00:19:44.950 --> 00:19:47.509 out. Arguing he's playing spoiler. Explicitly. 00:19:47.640 --> 00:19:49.819 saying he's splitting the anti -Mamdani vote 00:19:49.819 --> 00:19:51.720 and effectively guaranteeing a progressive win 00:19:51.720 --> 00:19:53.859 if he stays in. Is there polling on what happens 00:19:53.859 --> 00:19:57.119 if Salewa does drop out? Yes. There's one specific 00:19:57.119 --> 00:19:59.440 poll cited from Gotham Polling and Analytics 00:19:59.440 --> 00:20:02.839 along with AARP. It suggests that in a head -to 00:20:02.839 --> 00:20:05.720 -head race, Mamdani's lead shrinks dramatically. 00:20:05.900 --> 00:20:09.200 How much? You would put Mamdani at 45 % and Cuomo 00:20:09.200 --> 00:20:12.819 at 41%. Still a Mamdani lead, but suddenly it's 00:20:12.819 --> 00:20:15.940 within the margin of error. A real race, as the 00:20:15.940 --> 00:20:18.299 source puts it, with a decent chunk of undecideds 00:20:18.299 --> 00:20:20.759 potentially swinging it either way. So Sliwa 00:20:20.759 --> 00:20:23.900 holds the key. Is he going to drop out? All indications 00:20:23.900 --> 00:20:27.660 are no. Sliwa is refusing. Why? Well, it's perfectly 00:20:27.660 --> 00:20:29.700 consistent with his entire political brand, isn't 00:20:29.700 --> 00:20:31.740 it? He's always been the iconic laugh, the outsider, 00:20:31.920 --> 00:20:34.700 the gadfly. Running, even if he can't win, is 00:20:34.700 --> 00:20:36.920 sort of his thing. Backing down isn't really 00:20:36.920 --> 00:20:39.140 in his playbook. The perpetual disruptor? Yeah, 00:20:39.140 --> 00:20:40.819 actually. And his refusal is significant. He's 00:20:40.819 --> 00:20:43.440 a known factor in NYC politics. By staying in, 00:20:43.519 --> 00:20:46.160 he ensures that Republican and maybe some conservative 00:20:46.160 --> 00:20:48.980 independent votes stay with him, preventing Cuomo 00:20:48.980 --> 00:20:51.480 from consolidating that block. So ironically, 00:20:51.740 --> 00:20:53.660 The Republican candidates staying in the race 00:20:53.660 --> 00:20:55.920 might be the biggest factor helping the progressive 00:20:55.920 --> 00:20:58.420 Democrat win. It certainly looks that way based 00:20:58.420 --> 00:21:01.420 on the current polling and analysis. The divisions 00:21:01.420 --> 00:21:03.579 on the center right or perhaps just the anti 00:21:03.579 --> 00:21:06.660 -Mamdani side are proving more decisive than 00:21:06.660 --> 00:21:09.900 any single candidate's strength right now. Fascinating 00:21:09.900 --> 00:21:13.400 local dynamics. OK, we've covered a lot of ground 00:21:13.400 --> 00:21:16.559 cabinet overreach. White House construction questions, 00:21:16.940 --> 00:21:20.240 nomination fights, extreme financial risk, local 00:21:20.240 --> 00:21:22.940 politics? A diverse stack, for sure. So what 00:21:22.940 --> 00:21:25.079 does this all mean? When you step back and look 00:21:25.079 --> 00:21:27.559 at all these sources together, is there a connecting 00:21:27.559 --> 00:21:31.400 thread? I think there is. What we've seen woven 00:21:31.400 --> 00:21:34.279 through almost all these reports is a consistent 00:21:34.279 --> 00:21:37.150 pattern. actors, whether they're government officials, 00:21:37.809 --> 00:21:39.509 political figures, financial companies trying 00:21:39.509 --> 00:21:42.869 to circumvent or ignore or sometimes exploit 00:21:42.869 --> 00:21:45.230 the established rules and systems. Right, like 00:21:45.230 --> 00:21:47.349 no one with the appropriated funds and procurement 00:21:47.349 --> 00:21:49.690 rules. Or the president with the East Wing demolition 00:21:49.690 --> 00:21:52.269 needing federal approvals. Or volatility shares 00:21:52.269 --> 00:21:55.170 using the shutdown loophole for the 5X ETFs. 00:21:55.309 --> 00:21:57.930 Exactly. It's a recurring theme of trying to 00:21:57.930 --> 00:22:00.410 sidestep the normal checks and balances, whether 00:22:00.410 --> 00:22:02.970 it's legal requirements for spending money Congress 00:22:02.970 --> 00:22:05.970 allocated or getting building permits or following 00:22:05.970 --> 00:22:08.190 financial regulations. It feels like the rules 00:22:08.190 --> 00:22:11.359 are becoming... optional for some? That's the 00:22:11.359 --> 00:22:13.400 critical takeaway, I think. The source material 00:22:13.400 --> 00:22:16.599 really hammers this point, implicitly and explicitly, 00:22:16.599 --> 00:22:19.880 and it raises a really important, maybe unsettling 00:22:19.880 --> 00:22:22.400 question for you, the listener, to think about. 00:22:22.519 --> 00:22:24.900 What's that? When these formal checks and balances, 00:22:25.079 --> 00:22:27.619 the laws, the regulations, the approval processes, 00:22:27.940 --> 00:22:31.180 even just the political norms, are ignored or 00:22:31.180 --> 00:22:34.160 deliberately sidestepped like this, how quickly 00:22:34.160 --> 00:22:37.240 does accountability erode? Both political accountability 00:22:37.240 --> 00:22:39.660 and financial accountability. And what are the 00:22:39.660 --> 00:22:42.460 consequences of that erosion? Exactly. Who ultimately 00:22:42.460 --> 00:22:44.960 pays the highest cost when the rules don't seem 00:22:44.960 --> 00:22:47.700 to apply equally or when they can be bypassed 00:22:47.700 --> 00:22:50.519 through loopholes or sheer force of will? That's 00:22:50.519 --> 00:22:53.059 something to mull over. Crucial question indeed. 00:22:53.640 --> 00:22:55.279 Well, thank you for joining us for this deep 00:22:55.279 --> 00:22:56.720 dive. A lot to think about there.