hey everybody welcome to the sense of

things and it is our 100th show Ron and

I have been doing this for two years

almost to the day when we started a

couple years ago and just felt like we

needed to start telling the story of the

markets the economy and everything else

So on today’s show we’re going to take a

look back at our market predictions from

December and look at some of the market

predictions that have been out there Uh

we’re going to talk a little bit about

the the CPI report that came out this

morning inflation report We’ll talk a

little bit about the dollar oil and

bonds because bonds have been a major

story over the last week And of course

with all the tariff stuff the markets

have been all over the place We had the

most amazing day yesterday and we’re

losing most of that back today pretty

quickly I think it’s just a lot of

trading going on in the markets So stay

tuned We’ll be right back on in just a

minute

[Music]

[Applause]

[Music]

Hello everybody Welcome to the show Ron

how are you doing my friend good morning

Happy 100th Happy 100th We had a couple

weeks off during the market craziness

and the tariff craziness It’s It’ll be

fun to have a little bit of a

conversation today I don’t think we’re

going to squeeze it all in one podcast

but we’ll do our best We’ll be quick

about it so that they don’t Yeah they’ve

already been through the ringer over the

last couple weeks So you had a couple

trivia questions to get us started Yeah

we got to continue the trivia and then

get into a couple of interesting

headlines because this market is

headline driven It is not news driven

and there is a difference And then we’re

going to have a revisit of market

forecast four months later They’re

already revising and it’s always a

comical situation Yeah Let’s start out

with some of our trivia and we’ll go

from there

So what is the most frequently ordered

item of food in the US french fries

One more guess Popcorn I don’t know

Fried chicken Fried chicken Okay I get

that I got to tell you fried chicken but

my body does not like fried chicken Yeah

we we’re exporting that around the world

because I know in China they actually

Kentucky Fried Chicken People actually

get married in Kentucky Fried Chickens

which I think is hilarious But wouldn’t

you oh of course I That smell of grease

is an aphrodis You want to remember that

that muscle memory in your brain for the

rest of your life 100% How much does the

average Thanksgiving turkey weigh i

actually got this right I’m gonna

say nine pounds

Oh yeah I know I It’s definitely 15 15

Okay Now

right many times at the supermarket they

have the deals I’ve gotten like a free

turkey every year It’s always like I the

average has always been like 18 19 20

pounds but 15 is the average That’s what

I figured I’ve never seen a nine pound

turkey That’s a tiny bird Yeah it’s like

just above a chicken But yeah if it’s

only nine pounds it probably isn’t a

Thanksgiving turkey Probably not Yeah we

we typically just the two of us we’ll do

like a 20 22 pounder and then we live

off of that for months

different meals Quickly what’s the only

state that has only one syllable ohio Oh

no I guess that would be two That’s

three Oh Yeah Four letters three

syllables Okay One more Come on Get be

quick Alaska Damn I don’t even know

Delaware is more Yeah I don’t even know

It’s an easy It’s an East Coast state

Okay Vermont Start from the top to the

bottom Ma Maine

Come on I had to feed you there Oh I

know you had to because I’m like “Okay

I’m going through all the ones like the

That’s why I said start from the top

versus the bottom.” Got it Got it All

right Here we go I I I love that I hate

headlines because being a headline

driven market that’s what’s been going

on And this Wall Street Journal page was

from last week This wasn’t even from the

insanity this week and looking at the

charts and I’m I was telling my people I

said since Thursday to now right we’re

only talking five trading days Today

we’re down So six trading days Really

what it comes down to is we’re going to

be talking about these trading days and

maybe the next week’s worth of trading

days for years Yep In four trading days

actually three trading days we took out

one year’s worth of upward movement in

the market Three trading days Yeah And

that was one year’s worth But if you

look at it from the top of this year

from the peak of this year down I mean

it was like a 25

27% decline from top to bottom Yeah And

it was self-inflicted It could have been

presented differently Some of the things

we needed to do but everything’s about

packaging and presentation and it could

have been done differently Let’s leave

that aside But I thought the other

interesting thing because this has been

inching up over the last year or two I

remember when it was four and a half

then it was five five and a half six I

remember when it hit 6.7 people were

like “Oh my god.” All right So now money

market balances are now over 7%

Now think about the market’s been going

up Still have money market balances Yep

Now weren’t people getting weren’t

people getting FOMO fear of missing out

and adding money to the market in the

last year and basically all of one

year’s gains were gone Yeah So I thought

this was interesting that it keeps

piling up and then of course our boy

Warren Buffett the smartest man in the

world he’s got over 300 billion sitting

in cash Yep Which tells me Yeah Which

tells me that we’re at a point where we

get some of this trade stuff out of the

way Whatever you think about President

Trump and he sometimes is a bull in the

China shop It he played China like a

fiddle and we’ve got 75 countries that

are like “Hey we want to work with you.”

Yeah but it’s not the four main ones

Jeff Until we get the European Union the

entity China Canada and Mexico Honestly

I could care less about the rest of them

Yeah The funny thing is the biggest one

that we really need to get in place is

Japan Um and China you know what china

is going to just get forced into a

corner and they’re not going to have a

choice When we have the whole rest of

the world or at least the main ones

China is really not going to be that big

of a player And for our goods we sell

one thing for every $5 that they bring

into our country at that point So it’s

going to hurt them way more than us I I

like the way it work and it worked out

interestingly because everybody’s “Oh my

god the market’s up It’s so great

because the tariffs are removed.” No the

pressure is still on because the we’re

at that headline Nothing’s been agreed

to and we’re at that 10% level So it

still keeps the pressure on a lot of

these countries because we were only

tariffing two and a half% Now we’re at

10 So it’s going to keep the pressure on

to get these countries to deal And I

hope in the next 90 days we get a few

resolved It sounds like there’s 15 that

have made proposals to us at this point

So we’re going to have to get that

worked out And I think once the once

they get a few of these worked out

they’ll have a model for what they want

to do going forward and it should get

through these a lot faster I hope you’re

right I am not I am not as

optimistic and I know you in your voice

you don’t sound that optimistic I I just

know optimistic I just know that we’re

the yesterday everybody’s oh my god it

was the greatest upward movement in one

day ever percentage wise and all that

And I’m like “Yep.” And then it right

again this morning Boom Comes out

Yesterday was more I think a short

squeeze than any than anything else Yeah

Yeah It was a headline First we were way

oversold and between the short squeeze

Yeah I would have expected something

like that announcement to be up 5% just

on headline news Yeah Yeah Like I said I

mean yeah we’re still we’ve got a long

way to go They’re going to have to get a

few wins under their belt As I go

through the Treasury section of this

podcast you I think you’ll I think

people will understand why they made

that announcement yesterday From what I

understand President Trump made that one

where it was like “Okay we were going to

announce things slowly We’re going to do

a big one to calm down the bond market a

little bit because it was that that the

bond market is behind the scenes what

keeps money flowing bond market’s five

to 10 times bigger than the equity

market and it keeps money flowing in the

indo out there So that that’s the

important part All right So what do we

got from so here we go I know we gave

this again since but I thought it was

interesting that the S&P was at 5800 you

know it went to got to 61 and change And

we were talking all right hey next

year’s going to be a good year good

policies all this stuff And all the

market strategists which we’ll get to on

the next slide all looking for at least

a 10 to a 12% upside We’ll get to it in

a second And we had our 2024 market

forecast which I was way off And then we

look at the 2025 And I remember I I was

telling people about my numbers that I

was putting together down here at 51 to

5200 saying if we’re going to go down

we’re really going to go down Meanwhile

we were under 5,000 We were under 5,000

So

And actually that I got the wrong date

there I apologize That’s supposed to be

April I don’t think we’ve hit December

yet So it’s supposed to be April 8th of

the last Yeah So my my point is that we

are way off And now when we’re looking

at the adjustments for this year this is

insane Oppenheimer that’s a 15 almost

13% reduction There’s Goldman Sachs

didn’t reduce it but they came out and

said 47 40% chance of recession Then

they came out the next day and basically

said it’s not base case is a recession I

did some of these are just ridiculous

your your Denny who’s just a permable

when TC stress and mentions it but here

he reduced it 900 basis points 900 I

stand by my numbers at this point and

this is not even three and a half three

and a half months into the year they’re

going to change it again so this is what

it comes down to and actually I just was

quoted in an article that came out

yesterday and they had asked me this a

month ago I totally had forgotten about

it about what do you think about market

forecasts and The funny thing was I

stand by it a a year ago I stand by it

in December I stand by it a month ago

when I was quoted The whole thing is

that this is for conversation only You

cannot plan your portfolio or absolutely

about market forecast Yep Yeah I

personally think we’re going to be above

mine again Last year I came the closest

but we’re still honestly we blew that

out of the water I think the back half

of the year is gonna be just absolutely

unfreaking real If at least three of

those four entities I talked about make

deals I would agree with you Yep I want

to be optimistic but I got to be

realistic I don’t like to be pessimistic

but we’ll have to see where things go

because here’s the big thing If these

countries decide to collude collude in a

way where hey we need to dig in our

heels and stand our ground Yep this

could get prolonged and I don’t care

what anybody thinks Yeah But I think the

interesting part of all of this is you

know you’ve seen even the EU which is

probably one of the bigger ones we deal

with really more of their goods than

ours going into their markets once again

But I I I don’t see them colluding with

China at this point I think China’s

burned a lot of damn bridges over the

years with their belt and road

initiative and stuff like that I’ve

heard interviews with the Italian prime

minister and she is just absolutely she

cannot stand the Chinese because of what

they did in their country Here’s the

problem with the EU over China China are

proud people They’re going to dig in I

think as long as they can The only

reason why I think the EU may take

longer you’re dealing with a lot more

chefs in the kitchen Yeah that’s exactly

right Make a decision Yeah we’ll see But

I think you know I think we’re going to

get Great Britain We’ll get them on our

side pretty quick They want a deal Japan

wants a deal A lot of the Asian

countries want a deal It I I think in

the end it’s going to be good for

everybody It’s just going to take a

little bit of time Let me let me share

my screen here real quick and I

will Okay that just has that one screen

on here right yeah Okay So a couple

things economic wise there’s really not

a whole lot of economics going on this

week at all The big one this morning was

CPI consumer price index which came in

at

2.4% year-over-year which the estimate

had been 2.6 prior one 2.8 So that means

that we’re seeing inflation cooling down

continually which is great That doesn’t

mean that it’s good for prices because

we’re still super elevated from years

ago but it’s slowing down a little bit

Of course I’ve read all the the pundits

this morning and oh yeah but the tariffs

haven’t come into place yet and then

we’re going to see all this I don’t

think so Quite frankly I think it’s

going to stay pretty stable I don’t

think it’s going to go down dramatically

from here I personally don’t think we’re

going to see a recession this year I may

be wrong but but I think it’s slowing

down a little bit which helps when it

comes from that So what are some of the

things that might be affecting this

let’s first look at the dollar So this

is the dollar to the basket of

currencies Here’s

2025 President Trump came in right about

here Um that was January 23rd Somewhere

in between there is when we had our when

he came into place The dollar has been

on a slide I think a lot of that is a

lot of countries have been buoying up

their currencies So they’ve been selling

out of treasuries and booing up their

currencies during this time period So

the dollar’s been on a decline Not

necessarily a bad thing because a weaker

dollar means that foreign currencies

when they buy our stuff means they can

buy more of our stuff So getting some of

this trade stuff worked out is a good

thing Yeah It’s good for exports Yeah

Great for exports And that’s what we’re

trying to get into We don’t want to be a

complete weak dollar like we were during

during the Bush administration but we

want to pull that back because it was

really at a massive high over here All

right So let’s talk a little bit about

oil Now once again Ron and I both tell

you I we don’t like investing directly

in oil I don’t like investing in oil

companies Now I will invest in stuff

that’s close to the wellhead pipelines

and drillers and stuff like that because

those guys when there’s more production

they make more money or when they’re a

toll booth they make more money Here is

the price of oil over that same time

period And if you’ll notice it follows

this Why because oil is denominated in

dollars So part of this is oil’s been

coming down because of increased

production but that hasn’t really ramped

up yet This is largely a dollar story

and you see the dollar dropping off

massively Oil dropped off massively over

this last few days That said one of the

things that’s interesting to me is

watching the Oh by the way I have no

idea I always ask people always ask me

where’s the oil price going I have no

idea No idea Why is it going down so

they’re pumping more oil out But here’s

the interesting thing The average cost

to get a barrel of oil out of the ground

in the US is over 50 bucks Yeah Saudi

Arabia is in the

teens or something like that Yeah And

that’s compressed their margins a little

bit I I don’t I honestly don’t think

production’s up and they’re just now

granting leases on federal lands and

stuff like that So we’re not going to

see anything from a production

standpoint for two three years down the

road at this point So part I think it’s

largely just a dollar story that’s

pulled that down Now the interesting

thing is gas prices have been steadily

on a rise during this time period which

always frustrates me because I’m like

how can this happen and then this happen

at the same time i don’t know It it

might be that downstream production it’s

just taken time for that to work out and

with lower oil prices we might see gas

prices start to dip off here But it’s

just frustrating and that’s why I don’t

like investing in any of this stuff

because I can’t I don’t understand it Um

one thing I do want to cover though is

looking at the strategic petroleum

reserve So when we look at strategic

petroleum reserve over the last three

years and actually if we go out five

years we were way up here

656 million barrels or billion barrels I

think the max capacity of that world

there or the max capacity of our

strategic petroleum reserve is like up

in the 700 billion barrel range So this

I think I think it is mill it is million

Okay Yeah I guess it is million Yeah So

600 million barrels and then during the

Biden White House they to try and push

oil prices down They kept dumping out of

the strategic reserve just down to

346 at the bottom end and then slowly

started to rebuild from there Of course

buying into the highest oil prices ever

which is just completely stupid But if

you notice what’s been going on with the

Trump White House Okay Go back 10 years

I can’t That’s I don’t have Okay The

subscription Yeah Five year Go back five

years Yeah So that’s where we were Okay

That this is the high point from what I

can see We were up there We were almost

at max capacity and then it then they

whittleled it down Gotcha Now if we

start to look at it six months out the

Trump White House as they came in

they’re continuing to do it but I don’t

think they’re buying at a very rapid

clip for the simple fact that I think if

they were buying at a rapid clip they

would push oil prices back up and that’s

not a good thing at that point I think

this nice steady stable there’s going to

be a new company managing the strategic

petroleum reserve but they won’t be in

place until like late May So this is

just you know Department of Energy doing

their normal thing of saying “Okay we’re

just going to slowly rebuild this over

time but we got a long ways to go to get

it anywhere close to where it should

be.” So now let’s talk a little bit

about treasuries That’s the oil story

and I thought it was just an interesting

piece Let’s look a little bit at

treasuries So these are three and I’ll

go over three ETFs that I will say I

personally use in portfolios for clients

but there are three sleeves basically of

ETFs the one to threeyear Treasury which

is the SHY If you look at it here over

the last month or so it’s been on a nice

steady stable up and then it pulled back

pretty dramatically here or it got super

volatile over the last few days Massive

amounts of trading in the SHY

uh because bond prices started to move

the TLH were there This is where the

most volatility has been and I think

that’s the normal place for a lot of

volatility there in the center We saw a

big pullback And then this is the TLTW

which is the 20-year Treasury 20 plus

year Treasury buy strategy which is

something I use for yield and portfolios

You look at all of these we had this

massive drop off here over the last few

days And of course I’ve had clients

reaching out to me What’s going on tough

to manage risk with that volatility Say

what the banks and the institutions

Tough to manage risk Yeah it is And

that’s the problem When you think banks

insurance companies all that It’s a

massive amount of risk So the

explanation that I’ve heard was all

these countries got together and they

started selling treasuries so that they

could buy their currencies and all that

Yeah I’m sure that was going on

But it didn’t happen over just a few

days So what is this and what was the

cause of some of this this is absolutely

hedge funds and large asset managers

deleveraging their portfolios using it’s

what’s called a carry trade and there

are not carry trade but a base trade

where they’re buying treasuries on

margin Treasury margins are much much

higher than let’s say if you were

margining a stock A stock you can only

margin like 50% A treasury you can lever

up like 10 times So something happened

last week where all of a sudden these

guys deleveraged super fast because they

might have seen some additional selling

from countries and stuff like that But

this I think it was China and Japan and

some of the other countries dumping

their treasuries No doubt Yeah And I

think that was part of it But you don’t

get this They don’t just go out there

and go “Oh we’re just going to dump all

this and sell it in the market This is

delevering from hedge funds What do I

see happening i think we’re going to

stabilize here a little bit now and

we’ll be back on the on a trend again.”

We buy them for safety and to clip

coupons uh from that point So last but

not least I wanted to cover the our good

old friend the Treasury yield curve

because it was interesting to watch this

We actually are move yesterday Yeah back

to where we were or where we should be

at this point But if you watch it over

the last week here it’s been interesting

to watch how we were in this kind of

weird barbell here where short-term

rates and long-term rates were kind in

parody and then all of a sudden you go

back now to where we’re at

today and we’re back to what I would

suggest we should be at Although this

short-term part of the curve I still

don’t get at this point No that that’s

because people still see fear Yeah If

they didn’t see fear that would be in

the 35 to 38 range And this the little

blue it’s something I didn’t notice

about this chart before And this is a if

you don’t want to know what this is US

Treasury yieldcurve.com is where I get

this from This blue band in the center

is actually the Fed funds upper and

lower target rates So that that explains

a lot of why the short-term market is

there because that’s where the Feds put

their range in at So it’s going to keep

those up at this point But what I would

say is with the way the yields are today

that’s not necessarily indicating an

inverted yield curve which would

indicate a recession at this point So

it’s why I based my decision on I I

don’t think we’re going to see a

recession this year Could be wrong but I

don’t think we’ll see a recession Let’s

Let’s revisit that conversation in June

Exactly July Hey July 4th man

Independence Day baby Well liberation

day was liberating people from their

money from the market Well that’s true

Yeah We’ll see what happens at

Independence Day On Independence Day

here you know you just got to hang out

You got to be in the market Yes we’ll

make adjustments and moves around what

we’re invested in but you can’t go run

and hide and sit in cash

at this point Just keep adding to the

quality

positions on the back end Yeah And I

think the biggest thing is we’ve seen

that massive rise money markets If

you’re sitting there making 4% on a

money market why would you make a move

at this point until Right And the last

point to wrap up is that we were

expecting two to three cuts this year

Now they’re looking at five or six If we

get that far high yield accounts will be

in the 2527 range Yeah At that point you

got to put your money in the market

which is Yeah Then it’s going to shift

gears and that money is going to slide

back into the markets and it’s probably

going to go more towards risk assets at

that point which high yields dividends

stuff like that to to get a little bit

better yield on your money I hear you

All right guys See happy 100th again

Happy 100th Thank y’all for being with

us this whole time period We really

appreciate you listening every week Love

the comments y’all make It’s been fun

having back and forth with a lot of you

on YouTube Make sure that you subscribe

to the channel and certainly we’re

continuing to do these shows for you so

that we can kind of share with you where

it’s at And Ron and I are sticking with

our numbers We’re not adjusting anything

We’re going to ride it out for the rest

of the year So thanks a lot and we’ll

see you guys back here the very next

time