WEBVTT 00:00:00.000 --> 00:00:02.620 Welcome back to The Deep Dive. Today we are tackling 00:00:02.620 --> 00:00:06.400 a single listener stack of sources, and it's 00:00:06.400 --> 00:00:08.400 a collection that gives you whiplash, frankly. 00:00:08.599 --> 00:00:11.179 It really does. So we're going to perform a kind 00:00:11.179 --> 00:00:14.560 of intellectual shortcut. We are jumping from 00:00:14.560 --> 00:00:17.280 allegations of war crimes at the very highest 00:00:17.280 --> 00:00:20.660 levels of the Pentagon. all the way to a surprisingly 00:00:20.660 --> 00:00:23.899 resilient corporate earnings season. Yeah, one 00:00:23.899 --> 00:00:27.440 that seems totally determined to just ignore 00:00:27.440 --> 00:00:29.839 all the political chaos. It's a real study in 00:00:29.839 --> 00:00:31.920 institutional stress tests. Right. Our mission 00:00:31.920 --> 00:00:34.420 today is to really pull out the key nuggets from 00:00:34.420 --> 00:00:37.600 these very different fields. We have to understand 00:00:37.600 --> 00:00:40.799 the systemic breakdown that's implied when powerful 00:00:40.799 --> 00:00:43.539 figures just circumvent norms. Whether that's 00:00:43.539 --> 00:00:46.359 in military command or, say, judicial appointments. 00:00:46.560 --> 00:00:48.759 Exactly. And then we have to contrast that with 00:00:48.759 --> 00:00:50.759 the signals corporate America is sending about 00:00:50.759 --> 00:00:53.600 economic stability heading into 2026. That's 00:00:53.600 --> 00:00:55.619 the core tension. And I mean, we have to start 00:00:55.619 --> 00:00:58.340 with the most dramatic and pretty disturbing 00:00:58.340 --> 00:01:01.380 headline in the sources. This all centers on 00:01:01.380 --> 00:01:04.099 Secretary of Defense Pete Hegseth and a military 00:01:04.099 --> 00:01:06.599 operation back in September. OK, let's unpack 00:01:06.599 --> 00:01:09.400 this. The Washington Post reported a specific 00:01:09.400 --> 00:01:12.900 incident where Hegseth allegedly told Admiral 00:01:12.900 --> 00:01:16.739 Frank Bradley to, and this is a quote, kill everybody 00:01:16.739 --> 00:01:20.019 during an attack on what were apparently unarmed 00:01:20.019 --> 00:01:22.200 boats. And this is where the legal gravity just 00:01:22.200 --> 00:01:24.819 hits you immediately. The reporting suggests 00:01:24.819 --> 00:01:28.760 the first assault, it left two survivors, and 00:01:28.760 --> 00:01:31.939 then following Hegseth's alleged command, Bradley 00:01:31.939 --> 00:01:34.989 ordered a second volley. Specifically, targeting 00:01:34.989 --> 00:01:37.810 those two people who were then killed. And if 00:01:37.810 --> 00:01:40.250 that's true, the sources are. I mean, they couldn't 00:01:40.250 --> 00:01:43.689 be clearer. Executing shipwrecked survivors or 00:01:43.689 --> 00:01:46.890 anyone who has surrendered is a direct, undeniable 00:01:46.890 --> 00:01:49.129 violation of the Geneva Conventions. It's essentially 00:01:49.129 --> 00:01:52.269 giving no quarter. And the expert legal commentary 00:01:52.269 --> 00:01:54.329 we have in our sources, it gives zero wiggle 00:01:54.329 --> 00:01:56.930 room on this. We have former Secretary of Defense 00:01:56.930 --> 00:01:59.129 Leon Panetta on the record. What did he say? 00:01:59.230 --> 00:02:01.170 He said, I don't think there's any trust in that 00:02:01.170 --> 00:02:03.310 that's a war crime if it happened in that way. 00:02:03.650 --> 00:02:05.769 And that sentiment is just echoed everywhere. 00:02:06.310 --> 00:02:08.520 Ryan Goodman. the former general counsel at the 00:02:08.520 --> 00:02:11.360 DOD, he points out that the Pentagon's own law 00:02:11.360 --> 00:02:13.599 of war manual. Their own manual? Their own manual, 00:02:13.659 --> 00:02:16.659 yeah. It explicitly lists attacking shipwreck 00:02:16.659 --> 00:02:20.039 survivors as a textbook example of an illegal 00:02:20.039 --> 00:02:23.599 order, an order that, you know, by military procedure, 00:02:24.039 --> 00:02:26.560 service members are supposed to refuse. The implication 00:02:26.560 --> 00:02:29.400 there is enormous. It is. We're talking about 00:02:29.400 --> 00:02:32.159 allegations of an order from the absolute highest 00:02:32.159 --> 00:02:35.719 civilian level that is flagrantly illegal. So 00:02:35.719 --> 00:02:37.780 what has the administration's response been? 00:02:37.960 --> 00:02:40.560 The source material calls it dancing around the 00:02:40.560 --> 00:02:42.939 facts. Which is putting it mildly. It's been 00:02:42.939 --> 00:02:45.319 chaotic. First, Hegsiff complimented the admiral. 00:02:45.539 --> 00:02:47.460 Then he called the whole story fake news. And 00:02:47.460 --> 00:02:49.599 now? And now he's trying to throw Bradley under 00:02:49.599 --> 00:02:52.500 the bus, as they say, suggesting the second volley 00:02:52.500 --> 00:02:55.659 was all the admiral's call, independently. This 00:02:55.659 --> 00:02:58.080 attempt to shift blame, it really points to a 00:02:58.080 --> 00:03:00.199 systemic problem, right? Yeah. Accountability 00:03:00.199 --> 00:03:02.360 is being dodged and the chain of command seems 00:03:02.360 --> 00:03:05.180 to be destabilized from the very top. Absolutely. 00:03:05.819 --> 00:03:07.800 And when Donald Trump was asked about it, he 00:03:07.800 --> 00:03:09.919 admitted he agreed with the first military assault. 00:03:09.919 --> 00:03:12.319 Okay. But didn't support the second one that 00:03:12.319 --> 00:03:15.139 killed the survivors. So this just confirms that 00:03:15.139 --> 00:03:17.979 Hegsif may be acting as a kind of rogue agent, 00:03:18.139 --> 00:03:20.539 you know, making his own law. It reminds me of 00:03:20.539 --> 00:03:22.879 that... That bizarre pep talk he gave earlier 00:03:22.879 --> 00:03:25.419 this year. Exactly. And the political fallout 00:03:25.419 --> 00:03:28.219 is growing. This isn't just about Hegseth's legal 00:03:28.219 --> 00:03:30.860 fate anymore. It's about the security implications 00:03:30.860 --> 00:03:33.699 of his behavior. Right. Senator Mark Kelly from 00:03:33.699 --> 00:03:36.120 Arizona, a former astronaut and military guy, 00:03:36.199 --> 00:03:39.819 he's been really forceful. He called Hegseth's 00:03:39.819 --> 00:03:42.680 conduct embarrassing and said he runs around 00:03:42.680 --> 00:03:45.419 like a 12 year old playing army. And the context 00:03:45.419 --> 00:03:48.400 for that criticism is so important. Kelly highlighted 00:03:48.400 --> 00:03:50.569 that Hegseth is in the national command authority 00:03:50.569 --> 00:03:53.349 for nuclear weapons. Which is terrifying. It 00:03:53.349 --> 00:03:55.650 is. When you have a figure who allegedly shows 00:03:55.650 --> 00:03:58.509 this, this kind of instability, this willingness 00:03:58.509 --> 00:04:01.610 to bypass the law, it raises fundamental questions 00:04:01.610 --> 00:04:03.550 about his judgment in a real crisis. And that's 00:04:03.550 --> 00:04:06.349 why we're seeing investigations now. That's why. 00:04:06.810 --> 00:04:09.189 Both the Senate and House Armed Services committees 00:04:09.189 --> 00:04:11.930 have launched full investigations. It's a perfect 00:04:11.930 --> 00:04:14.110 example of the Streisand effect. OK, so this. 00:04:14.509 --> 00:04:16.949 This chaos in the military chain of command, 00:04:16.949 --> 00:04:19.370 it leads us right into the second major theme 00:04:19.370 --> 00:04:23.250 from the sources. This pattern of operating outside 00:04:23.250 --> 00:04:25.730 of, let's call it, normal order. Mm -hmm, in 00:04:25.730 --> 00:04:27.930 political and judicial appointments. Exactly. 00:04:28.350 --> 00:04:31.569 Let's look at this fascinating and honestly highly 00:04:31.569 --> 00:04:35.949 technical saga of Alina Haba. She was just as 00:04:35.949 --> 00:04:37.949 qualified as the U .S. attorney in New Jersey. 00:04:38.029 --> 00:04:40.410 This is a wild one. It's truly a high stakes 00:04:40.410 --> 00:04:43.040 legal shell game. all designed to bypass the 00:04:43.040 --> 00:04:45.740 Senate. So set the stage for us. Okay, so Habba 00:04:45.740 --> 00:04:48.100 was nominated, but she couldn't get confirmed 00:04:48.100 --> 00:04:50.420 because the New Jersey Democrats withheld their 00:04:50.420 --> 00:04:52.199 blue slips, which is a custom that lets them 00:04:52.199 --> 00:04:54.959 veto nominations. Right. So she served as interim 00:04:54.959 --> 00:04:57.579 U .S. attorney. But there's a law, the Federal 00:04:57.579 --> 00:05:00.379 Vacancies Reform Act, that says after 120 days 00:05:00.379 --> 00:05:03.139 with no confirmation, the job automatically goes 00:05:03.139 --> 00:05:06.019 to the top career prosecutor. In this case, Desiree 00:05:06.019 --> 00:05:08.920 Grace. So Grace takes over as she's supposed 00:05:08.920 --> 00:05:11.459 to. And that's when Attorney General Pam Bondi 00:05:11.459 --> 00:05:14.240 attempts this, this incredibly sophisticated 00:05:14.240 --> 00:05:16.639 maneuver to get around the law. It was something 00:05:16.639 --> 00:05:19.939 else. Bondi first fired Grace. Fired her. Fired 00:05:19.939 --> 00:05:23.420 her. Then she yanked Haba's nomination. And then 00:05:23.420 --> 00:05:26.720 in this really rapid fire sequence, she installed 00:05:26.720 --> 00:05:28.939 Haba as the first assistant U .S. attorney and 00:05:28.939 --> 00:05:31.829 then immediately elevated her to acting U .S. 00:05:32.089 --> 00:05:34.230 attorney. The goal being to reset the clock and 00:05:34.230 --> 00:05:36.610 put HABA back in charge without any Senate approval. 00:05:36.889 --> 00:05:38.769 Exactly. They thought they'd found a clever little 00:05:38.769 --> 00:05:41.170 loophole. But a federal appeals panel, and it's 00:05:41.170 --> 00:05:43.589 worth noting, this included two George W. Bush 00:05:43.589 --> 00:05:46.589 appointees. They shut it down cold. What was 00:05:46.589 --> 00:05:48.649 the ruling? The court basically said the law 00:05:48.649 --> 00:05:51.170 isn't that easy to get around. It states that 00:05:51.170 --> 00:05:53.269 only the first assistant who was already in the 00:05:53.269 --> 00:05:55.949 role when the vacancy happens can be elevated. 00:05:56.120 --> 00:05:59.060 Ah, so Habba was shoehorned in after the fact. 00:05:59.480 --> 00:06:01.800 Precisely. After the 120 -day limit had already 00:06:01.800 --> 00:06:04.319 passed. So the court ruled she was unqualified, 00:06:04.579 --> 00:06:06.839 unauthorized, and she lacked the authority to 00:06:06.839 --> 00:06:10.939 even initiate cases. And the immediate real -world 00:06:10.939 --> 00:06:14.370 cost of this is... It's huge. We saw a similar 00:06:14.370 --> 00:06:16.069 thing with Lindsay Halligan in Virginia, right? 00:06:16.149 --> 00:06:18.490 We did. And that led to cases being dismissed, 00:06:18.829 --> 00:06:21.310 including these major indictments against figures 00:06:21.310 --> 00:06:23.810 like James Comey and Letitia James. Wow. The 00:06:23.810 --> 00:06:25.790 sources say the administration is thinking about 00:06:25.790 --> 00:06:29.029 re -inditing both of them. But this whole pattern 00:06:29.029 --> 00:06:31.970 has created what John Day, the president of the 00:06:31.970 --> 00:06:34.029 American College of Trial Lawyers, he called 00:06:34.029 --> 00:06:37.329 it a procedural morass. It sounds like it. The 00:06:37.329 --> 00:06:40.939 uncertainty is just. It's deeply alarming. Because 00:06:40.939 --> 00:06:43.079 when the administration chooses to act like, 00:06:43.079 --> 00:06:45.959 and this is his quote, toddlers in charge, the 00:06:45.959 --> 00:06:48.240 integrity of the whole justice system is undermined. 00:06:48.519 --> 00:06:50.759 So if that's the chaos in the judicial and military 00:06:50.759 --> 00:06:53.560 worlds, let's turn to how that instability is 00:06:53.560 --> 00:06:55.740 playing out on the political map. Gerrymandering. 00:06:56.120 --> 00:06:58.920 Specifically, the high stakes push in Indiana. 00:06:59.459 --> 00:07:01.519 Trump is focused on turning the state's seven 00:07:01.519 --> 00:07:04.199 Republican, two Democrat delegation into a perfect 00:07:04.199 --> 00:07:06.500 nine hour delegation. And the map they've unveiled 00:07:06.500 --> 00:07:09.480 is just. It's extraordinarily aggressive. They're 00:07:09.480 --> 00:07:12.980 taking Indianapolis' bluest district, IN07, which 00:07:12.980 --> 00:07:15.779 is currently D plus 21. The very safe Democratic 00:07:15.779 --> 00:07:18.720 seat. Very safe. And they're chopping into four 00:07:18.720 --> 00:07:21.139 separate districts. The goal isn't just to dilute 00:07:21.139 --> 00:07:23.660 the vote. It's to make the bluest district that's 00:07:23.660 --> 00:07:26.579 left R plus 10. It's a targeted effort to wipe 00:07:26.579 --> 00:07:29.240 out every single Democratic seat. And State House 00:07:29.240 --> 00:07:31.920 Speaker Todd Houston, he apparently has the votes 00:07:31.920 --> 00:07:34.579 to push it through. But here's the fascinating 00:07:34.579 --> 00:07:37.170 part, right? The Republican -dominated state 00:07:37.170 --> 00:07:39.709 Senate is pushing back. Yeah, they're resisting 00:07:39.709 --> 00:07:42.410 Trump's pressure. Which you have to ask, why 00:07:42.410 --> 00:07:45.170 fight a sure thing? So why? It comes down to 00:07:45.170 --> 00:07:47.889 local survival instincts. State senators are 00:07:47.889 --> 00:07:49.870 worried they'll be thrown out on their ear by 00:07:49.870 --> 00:07:52.149 moderate voters if they go along with what they 00:07:52.149 --> 00:07:54.850 see as a radical stunt. So it's a fracture line 00:07:54.850 --> 00:07:57.870 within the GOP itself. It is. And it's not about 00:07:57.870 --> 00:08:00.589 policy. It's about cultural optics and, you know, 00:08:00.769 --> 00:08:03.009 political survival. And we have a specific example 00:08:03.009 --> 00:08:05.750 of that resistance. State Senator Michael Bochak, 00:08:05.990 --> 00:08:08.889 a Republican. He's a firm no vote. Right. And 00:08:08.889 --> 00:08:12.350 his reasoning is really revealing. He cited Trump's 00:08:12.350 --> 00:08:16.209 recent use of the word retarded as a slur. He 00:08:16.209 --> 00:08:18.610 said that specific language was a bridge too 00:08:18.610 --> 00:08:21.490 far. So he's not resisting based on the map itself. 00:08:21.709 --> 00:08:25.189 Not at all. He's resisting based on the toxicity 00:08:25.189 --> 00:08:27.629 of the national brand that's pressuring him to 00:08:27.629 --> 00:08:30.170 pass it. The vote is set for a special session 00:08:30.170 --> 00:08:32.809 on December 8th. And if the state Senate holds 00:08:32.809 --> 00:08:35.529 firm, I mean, it shows that even in these supermajorities, 00:08:35.789 --> 00:08:38.230 there are limits. Let's move quickly from that 00:08:38.230 --> 00:08:40.470 to another headline that always gets attention. 00:08:40.850 --> 00:08:43.269 Donald Trump's health. We have sources talking 00:08:43.269 --> 00:08:46.070 about his recent preventative MRI at Walter Reed. 00:08:46.299 --> 00:08:50.120 Yeah, and the official results say normal, but 00:08:50.120 --> 00:08:52.500 the skepticism from medical experts and the source 00:08:52.500 --> 00:08:56.100 material is pretty much universal. Dr. Jonathan 00:08:56.100 --> 00:08:58.539 Reiner, who is Dick Cheney's long -time cardiologist, 00:08:59.100 --> 00:09:01.720 he said flatly that the letter doesn't pass the 00:09:01.720 --> 00:09:04.490 smell test. So why so much skepticism if the 00:09:04.490 --> 00:09:06.730 official letter says everything's normal? Because, 00:09:07.090 --> 00:09:09.789 as Dr. Reiner and others explain, there really 00:09:09.789 --> 00:09:12.549 is no preventative cardiac MRI. It's just not 00:09:12.549 --> 00:09:14.730 a standard routine test for an 80 -year -old 00:09:14.730 --> 00:09:16.909 man. So it's not like getting a regular checkup. 00:09:17.250 --> 00:09:20.179 Yes. Not at all. Advanced imaging like that is 00:09:20.179 --> 00:09:21.799 typically only ordered when there's a reason. 00:09:22.240 --> 00:09:25.759 A clinical event, a weird symptom, a bad result 00:09:25.759 --> 00:09:28.460 on an earlier test. So calling it preventative 00:09:28.460 --> 00:09:30.940 just suggests they're hiding the real reason 00:09:30.940 --> 00:09:33.360 for the test. The vagueness is the point. The 00:09:33.360 --> 00:09:35.879 vagueness is the political shield. OK, let's 00:09:35.879 --> 00:09:37.740 shift gears and look ahead. If that's the current 00:09:37.740 --> 00:09:40.379 political landscape, what are the stress tests 00:09:40.379 --> 00:09:43.159 coming up on the calendar before the full 2026 00:09:43.159 --> 00:09:45.799 cycle really heats up? We have a few early House 00:09:45.799 --> 00:09:49.440 special elections to watch. TX 18 has a runoff 00:09:49.440 --> 00:09:52.559 on January 31st. It's Dem versus Dem, so not 00:09:52.559 --> 00:09:54.559 that exciting politically. But it highlights 00:09:54.559 --> 00:09:57.000 a problem for Governor Greg Abbott. That seat's 00:09:57.000 --> 00:10:00.100 been vacant for almost a year. It's a black mark 00:10:00.100 --> 00:10:02.340 on his administration's efficiency. OK, what 00:10:02.340 --> 00:10:05.379 else is interesting? NJ 11. The primary is February 00:10:05.379 --> 00:10:08.500 5th. It's a D plus five seat. And the Democrats 00:10:08.500 --> 00:10:12.500 have 13 candidates fighting for it. 13. Wow. 00:10:12.779 --> 00:10:15.039 Yeah. And if the eventual Democratic winner takes 00:10:15.039 --> 00:10:16.659 the general election by a really big margin, 00:10:17.059 --> 00:10:19.179 that's going to be an early strong signal of 00:10:19.179 --> 00:10:21.480 some serious national headwinds for the GOP. 00:10:21.679 --> 00:10:23.519 And then there's Marjorie Taylor Greene's seat. 00:10:23.740 --> 00:10:26.600 Then there's GA 14. Her resignation isn't official 00:10:26.600 --> 00:10:29.399 until January 5th, which is, you know, just two 00:10:29.399 --> 00:10:31.500 days after she qualifies for her lifetime pension 00:10:31.500 --> 00:10:34.080 in health care. A detail I'm sure is just a coincidence. 00:10:34.200 --> 00:10:37.419 Of course. The district is R plus 19, so it's 00:10:37.419 --> 00:10:40.159 safe. But if the Republican candidate only wins 00:10:40.159 --> 00:10:42.940 that special election by, say, single digits, 00:10:43.580 --> 00:10:45.879 that would be the real harbinger of trouble for 00:10:45.879 --> 00:10:48.220 the party. For the real politics junkies, you 00:10:48.220 --> 00:10:51.059 have to mark March 3rd on the calendar. Texas 00:10:51.059 --> 00:10:54.159 AG Ken Paxton is running for Senate. Yeah, and 00:10:54.159 --> 00:10:56.820 he's facing so much legal trouble and internal 00:10:56.820 --> 00:10:59.659 party dissent. The analysis suggests that if 00:10:59.659 --> 00:11:02.039 he actually gets the nomination, he might be 00:11:02.039 --> 00:11:04.340 vulnerable enough to lose that seat. which is 00:11:04.340 --> 00:11:06.299 a huge concern for Republicans. But you're saying 00:11:06.299 --> 00:11:08.159 the race with the biggest long -term impact is 00:11:08.159 --> 00:11:10.340 in Wisconsin. Without a doubt. The state's Supreme 00:11:10.340 --> 00:11:13.480 Court election on April 7th, it's an open seat, 00:11:13.899 --> 00:11:16.440 technically nonpartisan, but the stakes just 00:11:16.440 --> 00:11:18.980 could not be higher. So explain for our listeners 00:11:18.980 --> 00:11:21.879 why this one court race is so critical. It's 00:11:21.879 --> 00:11:24.659 all about control. If the Democrats win this 00:11:24.659 --> 00:11:27.720 seat, they secure a five to two liberal majority 00:11:27.720 --> 00:11:29.879 on the court. And with that majority, they could. 00:11:30.320 --> 00:11:33.600 What? They could dictate all future legislative 00:11:33.600 --> 00:11:35.899 maps in the state, the maps that will govern 00:11:35.899 --> 00:11:38.700 politics there for the next decade. Plus, they 00:11:38.700 --> 00:11:41.059 control rulings on election rules, abortion laws, 00:11:41.120 --> 00:11:43.879 you name it. For a swing state like Wisconsin, 00:11:44.419 --> 00:11:47.360 that 5 -2 majority is absolutely critical for 00:11:47.360 --> 00:11:50.519 any potential 2028 presidential fight. And the 00:11:50.519 --> 00:11:53.139 Republican candidate Maria Lazar is already signaling 00:11:53.139 --> 00:11:56.419 how tough this is. She is. She is actively trying 00:11:56.419 --> 00:11:58.940 to distance herself from Trump. She said, quote, 00:11:59.200 --> 00:12:01.919 I am through and through and all the way a judge, 00:12:02.259 --> 00:12:04.460 not a politician. That's not exactly hugging 00:12:04.460 --> 00:12:06.960 the standard bearer close. Not even close. It 00:12:06.960 --> 00:12:09.620 just shows you how hard it is to win those nonpartisan 00:12:09.620 --> 00:12:12.340 races when the national party's brand is so volatile. 00:12:12.519 --> 00:12:15.389 OK. We have detailed institutional breakdown, 00:12:15.769 --> 00:12:18.009 political chaos, I mean at every level. And now 00:12:18.009 --> 00:12:20.250 for our final shift, we dive into the economic 00:12:20.250 --> 00:12:23.250 side of things. Right, the Q3 S &P 500 earnings. 00:12:23.629 --> 00:12:25.909 The big question is, does any of this political 00:12:25.909 --> 00:12:28.669 chaos even register on the corporate level? The 00:12:28.669 --> 00:12:32.649 answer, astonishingly, is no. The headline is 00:12:32.649 --> 00:12:36.169 that corporate fundamentals are still incredibly 00:12:36.169 --> 00:12:40.350 firm, just showing profound resilience. What 00:12:40.350 --> 00:12:42.830 are the numbers? The Q3 blended earnings growth 00:12:42.830 --> 00:12:46.029 rate is nearly 17 percent year over year. And 00:12:46.029 --> 00:12:48.090 what's crucial is that that's more than double 00:12:48.090 --> 00:12:50.350 what analysts originally projected. And that's 00:12:50.350 --> 00:12:52.850 expected to continue. It is. They're forecasting 00:12:52.850 --> 00:12:55.809 strong growth, close to 14 percent, to persist 00:12:55.809 --> 00:12:58.889 right into 2026. So let's break that down. Where 00:12:58.889 --> 00:13:01.230 is that leadership coming from? Well, predictably, 00:13:01.409 --> 00:13:03.570 technology is leading the charge. A lot of that 00:13:03.570 --> 00:13:06.549 is the AI loam. But financials and industrials 00:13:06.549 --> 00:13:08.389 are also showing some surprising strength. And 00:13:08.389 --> 00:13:10.919 what's lagging? The traditionally defensive sector, 00:13:11.179 --> 00:13:13.559 so energy and consumer staples. The sources also 00:13:13.559 --> 00:13:15.700 talk about these historic beat rates this quarter. 00:13:15.919 --> 00:13:18.299 The earnings beat rate is almost 83%. And the 00:13:18.299 --> 00:13:21.279 revenue beat rate is over 78%. That level of 00:13:21.279 --> 00:13:23.940 outperformance is just, it's tremendous. But 00:13:23.940 --> 00:13:25.980 we do need to talk about this earnings hook concept. 00:13:26.179 --> 00:13:28.320 Okay, explain that. So in the first half of the 00:13:28.320 --> 00:13:31.580 year, Q1 and Q2, the beat rates were high. But 00:13:31.580 --> 00:13:33.740 it was partly because analysts had been lowering 00:13:33.740 --> 00:13:35.820 their estimates beforehand. So companies were 00:13:35.820 --> 00:13:38.539 just clearing a lowered bar. Exactly. But for 00:13:38.539 --> 00:13:41.720 Q3 and what we're seeing for Q4, the estimates 00:13:41.720 --> 00:13:44.200 were either flat or even rising a little bit 00:13:44.200 --> 00:13:46.159 before the reports came out. That means this 00:13:46.159 --> 00:13:49.679 current strong beat rate, it's high quality performance, 00:13:50.000 --> 00:13:53.419 it's real pricing power, real efficiency. So 00:13:53.419 --> 00:13:56.620 solid fundamentals, high quality beats. And yet 00:13:56.620 --> 00:13:59.539 the sources note that investors are being, quote, 00:13:59.799 --> 00:14:02.470 stingy. They're not rewarding these massive beats. 00:14:02.690 --> 00:14:05.070 Right. But they are severely punishing any misses. 00:14:05.450 --> 00:14:08.669 So why the hesitation? Why isn't the market fully 00:14:08.669 --> 00:14:11.350 celebrating this strength? That is the big disconnect. 00:14:11.629 --> 00:14:13.350 I think investors are showing a lot of anxiety. 00:14:13.509 --> 00:14:15.289 They're hedging. They see the earnings strength, 00:14:15.509 --> 00:14:17.509 but they're also very wary of all the external 00:14:17.509 --> 00:14:19.889 factors. Geopolitical instability, interest rates. 00:14:20.169 --> 00:14:22.970 And. Frankly, the administrative and political 00:14:22.970 --> 00:14:25.450 chaos we spent the last, what, 12 minutes detailing. 00:14:25.909 --> 00:14:28.649 The bull case for 2026 really hinges on this 00:14:28.649 --> 00:14:31.070 profit growth broadening out across the whole 00:14:31.070 --> 00:14:33.909 S &P 500, not just staying in a few big tech 00:14:33.909 --> 00:14:36.629 names. We have covered an incredible range today 00:14:36.629 --> 00:14:40.029 from, I mean, serious allegations of war crimes 00:14:40.029 --> 00:14:42.250 and systemic attempts to get around the law, 00:14:43.009 --> 00:14:45.409 through pivotal state elections, and finally 00:14:45.409 --> 00:14:48.889 to record high earnings. Our sources clearly 00:14:48.889 --> 00:14:50.850 show these administrative structures are being 00:14:50.850 --> 00:14:54.470 broken by design across the board. And yet you 00:14:54.470 --> 00:14:56.730 have this corporate economic engine that is just 00:14:56.730 --> 00:14:58.990 running efficiently, posting resilient results, 00:14:59.330 --> 00:15:00.909 almost totally disconnected from the instability 00:15:00.909 --> 00:15:03.529 in Washington. So here is the final provocative 00:15:03.529 --> 00:15:05.799 thought we want to leave you with. Given that 00:15:05.799 --> 00:15:08.100 corporate fundamentals seem so strong and forward 00:15:08.100 --> 00:15:10.500 earnings are still rising, does the market's 00:15:10.500 --> 00:15:13.480 current resilience represent a calculated rational 00:15:13.480 --> 00:15:16.440 hedge against all this chaos? Or is it maybe 00:15:16.440 --> 00:15:18.919 a fundamental blind spot, a refusal to see the 00:15:18.919 --> 00:15:21.460 widespread instability and this rejection of 00:15:21.460 --> 00:15:23.539 normal order that we're seeing everywhere else? 00:15:23.620 --> 00:15:25.419 What stands out to you? A lot to think about 00:15:25.419 --> 00:15:28.240 there. Thanks for diving deep with us. Until 00:15:28.240 --> 00:15:28.720 next time.