Good morning folks. Welcome to another episode of the sense of things and another week. Lots of things going on,

lots of things in the economy. We are still actively in conflict in the Middle East and it’s a new thing every day it

seems. On today’s show, Ron’s got some really good stuff about in different industrial revolutions throughout time.

So, he’s got a great slide on that. He’s also got some in investments in industrial decline which I think is

really interesting industries that have gone down and then look at consumer confidence and some expectations there.

On my side I really had some interest in seeing how like different Middle Eastern or just middle just conflicts in general

have affected oil prices and how this one kind of fits into that whole mix. So I’ve got a chart on that. got some look

at different economic things. Everything from new home sales to to retail sales to PPI and an interesting look at the

wonderful world of economics and the Philly Fed Manufacturing Index this week. So stay tuned. We’ll be right back on with you in just a second.

Hey everybody, welcome to the show. Ron, how are you my friend?

Good morning. Doing well. Straight over to Moose is closed. I actually found yesterday there’s a couple of good

websites that give pretty darn close to real time movement ships in the port. I thought it was pretty interesting. I

can’t believe this is the chokeold for the world. Apparently, it has been for decades. We’ve all known that. But how

we haven’t done something about it? How come they haven’t built like a Panama Canal through Saudi Arabia? They have the money.

They have the money. God Panama Canal just right through the center just completely.

Yeah. Just completely. Yeah. Because it is a massive chokeold. The thing that was interesting is the talk now in

especially Saudi Arabia and some of the other countries is just running pipelines out to the Red Sea and stuff

like that and blow those up too.

Yeah. But at least if you run them someplace where they can’t Yes, they can blow them up and get to them, but I think within an within a few more weeks,

they’re only down to I think down to like 150 missile launchers at this point. a few more numbers.

Yeah,

I think I’m just saying they wouldn’t announce the real numbers, whatever they No, I think it’s our estimates of what’s there at this point. There was like 480

is what we the last I heard was the at the top of it and we’ve wiped out close to about 70% of those. So, they should

be down around 120 to 130. They’re down to a few barges a day firing off at this

point, lashing out at everybody around them. So, they’ve managed to just piss off every single country around them at this.

Yeah.

It’ll be interesting. It’ll be interesting to see what they do with the Marines that are that are on their way there if they’re going to take over Car

Island and some of those places to see if they can get some control of the oil facility. Yeah. I don’t know. But I think there’s enough other going on

in the world. We we’ve got plenty to talk about. What What’s happened this week in history?

Fairly lighter week, although there are some interesting things. 1905, Franklin Roosevelt marries Eleanor Roosevelt. And by the way,

it’s a second cousin.

I always had a a joke because I’m a trivia guy going up to, hey, what was Elanar Roosevelt’s maiden name?

Roosevelt. Yeah. second cousin.

I’m surprised she didn’t hyphenate though. Ros 1933 Stud Baker goes bankrupt through

the depression is when it really weeded out all those really good unfortunately car manufacturers

that weren’t in mass production like Ford. But yeah, a lot of these really good car manufacturers went under in the

30s and 40s because they didn’t have the the assembly line and the mass production.

Yeah, I don’t even know when like Duesenberg went out of business and stuff like that. And Tucker that was that was late 40s early Yeah, I

think it was late during the war and coming out. It was coming out of the war late 40s early 50s possibly one of the best cars of its

generation built and it was more of a the best ideas. Yeah, some of the best ideas, the first car with seat belts and

the lights that now just now are actually being used in other cars, which is funny.

I had that on my car, an SUV, and it freaked me out the first time that I drove at night and I went to make a turn, I’m like, “Oh my god, are my lights broken?” And then all of a

sudden, as I straightened out, the lights drained out. I’m like, “All right, that’s Oh, freaking cool.

I had no idea.” Right. 1933, President Roosevelt legalizes sale of beer and wine, repealing essentially prohibition,

which was basically the thing that got him elected because Hoover, in addition to just a horrific economy, obviously

would never commit to that. And then 1932 is when the market hit the bottom. Yeah.

And they basically knew that Roosevelt there was going to be a change of presidency and beer and wine were to be sold again. The market hit bottom and

then it went up until 37. We had another recession near a depression and then of course World War II pulled us. Yep.

1942 a dark point in our history. War it was called I didn’t know this the war relocation authority is established.

That was the Japanese internment camps.

I didn’t realize I thought we always refer to it as Japanese internment. I never knew that they actually had a group apartment set up as war relocation

authority and literally anybody that had Japanese descent was rounded up.

Yeah. Yeah. I think it was 300,000 people. It was basically everybody of Japanese descent on the west coast of

the United States largely in in California. But yeah, it was just bored.

great book that I just read for those of you that want to learn a little bit about this time in history. It’s called The Ghosts of Pearl Harbor by Mark

Harmon of NCIS fame. And it’s actually about the beginnings of what’s called the NIS at that time, Naval

Investigative Service, that the first Japanese American who was part of that group. It’s all about him. But it’s an

fascinating to hear the behind the scenes of how all that fell together and how it played out. It was interesting

that in the west coast of the United States,

everybody was rounded up. It wasn’t that way in Hawaii, which there were a lot more percentage- wise of Japanese. And that the reason that they didn’t take

them to the internment camps is they felt that it would just literally destroy the economy of Hawaii at the time. Think about it. following 911. This would have

been equivalent of rounding up all Muslims and Islamics in the United Absolutely.

By the way, I know we did bring this up once before in a prior podcast, but who was one of the most famous people that

was a child during the Japanese internment? We did George Teai.

George Teay one manita. It was Pat Marita. I didn’t know that.

Yeah. Yeah. He was he was a little kid back then, but yeah,

I didn’t know about Pat Marita. Okay, so 1949, East Germany approves new constitution.

And if you think about it, it lasted what? 31 years essentially before they brought down the wall. Yeah.

1957. I love this one. Elvis Presley puts a $1,000 down payment on Graceland.

The sale price was $102,500. Nice.

What is it? I know it’s a historic place now and forget about it people the visitation what is that place what’s the

estate worth a billion half a billion I don’t million couple yeah it’s several hundred million you know and it’s

pretty good return on its investment yeah I think definitely by the way you see this bathroom this is

where Elvis died on the toilet check it out here’s the throne room right here where Elvis died.

1963, Alcatraz closes its doors and becomes a tourist attraction.

One of my favorite is The Rock. One of my I know exactly where you’re going with this. All time movies. It was a great or look,

every movie is got bits and pieces that it took from some. But if you just think about the originality of that movie,

great actors, great script, Ed Harris,

Nicholas Cage, Sean Conory, what a great movie that was.

The and the greatest line in the entire movie, The Rock has become a tourist attraction.

I’ve been here longer than Nelson Mandel. Yeah.

And then somebody else said, “What in Zeus’s blind ball of your cell?” kind of comes out and says, “Oh, shoot. What did he say?

Secrets my out.” Great flick. Just a great flick. All right. 1980, another dark moment. Unfortunately, President

Carter announces boycott of the Olympics. And then the Russians boycotted our Olympics in 1984.

Yeah. 2008. I not that I forgot about this,

but I forgot. I knew it was funny. I guess it was right. I knew it was around Easter 2008. Bear because I remember

talking about it that weekend. Bear’s collapses sold to JP Morgan Chase who also ended up buying or they were forced to buy Washington Mutual, the first

major catalyst to the great financial crisis. The interesting thing about this is that I wonder if Bear Sterns was bailed out,

what would have happened? Because this was March, everything collapsed six months later. But I think AIG and Lehman were in much worse shape than Barristers.

Oh yeah, hands down.

And I think they were doubling down over the next six months. I There’s still a lot of shady stuff that we’ll never know about.

Yeah. And some of that stuff like in the in August when there was those meetings literally, okay, who’s going to take what at this point? It was just That was September 15th.

Yeah. September. Yeah.

Yeah. Okay. Getting into some fun information. We’ve talked about this before. Oh, AI is gonna kill jobs and this and that. Guess what? They’ll learn something else. They’ll learn AI.

They’ll move on to something else. AI is already killing programming jobs. Okay?

So, they’re going to learn something else. They have skills that transferable. So, I thought this was fun and interesting because the industrial

revolution in the 1800s gave boost and burst to a lot of things. The rails. So

we always talk about how the rails dominated the stock market. The next slide will show you how rails still

prevailed. But back I mean look at the chunk of the economy that the rails had because think about it. They had to do

the infrastructure. They had to build not just the locomotives but the cars.

They had to build the infrastructure of the stations. everything with being a part of and you think

these other industries fed and a lot of these other industries needed the rails to sell their goods.

Yeah. But you think of it too there was no other transportation at that time.

Mass transportation at that time. There was no airplanes that could carry anything. There was no trucks that could carry anything.

you that rails were the only game in town for a long time and ships but interior to let’s say our country there

was no other means of transportation besides a horse cart to get across the country of course they were massively

dominant and fast forward 30 years in the future from there the rails were literally going bankrupt left and right

because we now had airplanes we had trucks we had other alternatives to just the rails

Yeah, I saw a chart a couple of years ago. Train passenger volume peaked in the early mid 1950s and has steadily

gone down ever since because the move out to the suburbs obviously roads, cars and trucks as we had just mentioned. But

but the interesting thing is you’ll see on the next slide, just fast forwarding started 1900. So let’s fast forward 126

years later. Technology is dominating everything. industrial still there obviously healthcare think about back

then you they were drinking brown water they didn’t have they weren’t hydrating throughout the day that’s why by the

time they were 40 the face looked like a road map just crazy but then let’s fast forward to this even if you just look out

since 1900 essentially rails have still outperformed trucking and airlines over the years we’re still transporting because even If

you fly it, you got to get it. How do you go from the airport to somewhere else?

Yeah, you got to put it on a truck, but many times you’re going to Chicago, you got to now put it on a rail because of how heavy it is. You’re going to need 30

trucks. You put it on rail, then the trucks pick it up as they drop it off.

So, the it was interesting I saw with this is that the rail still outperformed all the years. And then if you take a

look since 1996 obviously this was the dotcom bubble but looking at it right

you just put money into technology you outperform the rest of the market which essentially you could look at if you just put money into the cues.

Yeah. Yeah. And when you think about the trade the rail lines and stuff they’re still such a major part today because of

interotal transportation. You bring all these containers in on ships and what is yes there are some out of the ports

trucks taking stuff out mainly to that area. So maybe it’s California or Texas or whatever but a vast majority of those

interotal containers are taken off put onto a train and then you know the train takes it into the center of the country

and then gets to an interotal lot that they pull those off and then put them on trucks and take them out to wherever. So they’re still a major part of the world.

But yeah, I mean really intriguing though.

Cross country twice, west twice. And I think we’ve talked about this like there are parts of the country for hours.

There’s nothing. But you do see freight lines, right? They’re traveling where nobody else is traveling.

And it is rails are still a humongous part of how we’re doing it. And here’s the other thing, too. Probably, right?

They’re going to get driverless trains,

fake conductorless trains. But but trucks will be driverless. I heard I remember talking to somebody 10 years ago and he very involved in the

trucking. You’re always going to need someone to drive a truck at some point.

Actually, not right.

So, it’s just one it’s just one of those things.

But it’s driverless vehicles are coming and that’s the most logical spot is they can’t get enough truck drivers. our our

need for them is increasing and you can’t get enough of them to get there. I can see driverless trucks in the future

and I if we can ever get past the massive amount of union opposition to it, we should have operatorless ports

and things like that like they are in other parts of the world.

I know I think Austin is a test city. I know Phoenix has been for a couple of years with Whimo. They just approved Amazon coming in with their Zuks car which looks There’s no steering wheel.

There’s It just looks like it’s a cab. I think four people get in it and it’s like a little shuttle. Yeah. So, they’re looking to do that. So,

the reality Whimo’s all around. I’ve It was funny because I was downtown because they’re not up in the area where I live,

but downtown I just happened to be downtown on an appointment and I pulled up to a stop sign and then next thing I

I saw something come up next to me and I you can just tell when something’s moving in your peripheral vision. and I looked over and it is the Whimo and

they’ve got those lightars that are running on the sides of them and so that’s what I caught out of the corner of my eye. So, it’s the first one I had

ever seen in person. I’ve seen them on the news every night just about. But yeah, people are using them everywhere here. So, it’s intriguing to me to see that’s the future.

So, here we are. The conference board always has great numbers but horrible predictions. But they called the recession. You and I thought there was

going to be a recession in 23 or 24. It never happened. Um didn’t say that we didn’t have pockets of bad spots in the economy. But I thought that this was

interesting. If we take a look at the last 20 years, right? If you’re following expectations were trending down, right? So coming out of the great

financial crisis, even though the market and a lot of the economy was still lagging behind, the expectations were things are going to get better. Now,

since then, other than COVID, the present situation has been better than expectations. Just people are just bearish. And on the right chart, I’ll

let you comment in a second here. I thought this was interesting just going back since co checking out where consumer confidence is. And our

generation right now is has the least amount of confidence in what’s going on the economy. And I think that’s because a lot of the people we’re dealing with

are within 10 or 15 years of retirement and they’re not happy about what we see over the next 5 to 10 years.

Yeah. I think that the interesting thing to me about this is I think with the prevailance of

social media, the overabundance of media that we have in this country that is just by nature just negative. They the negativity sells. positivity doesn’t.

So, it’s just negative. The old adage with the news, if it bleeds, it leads.

It It’s this almost just constantly negative view of everything that’s out there,

I think is leading to this lack of consumer confidence. But if you look at like retail sales and other things,

that’s not it’s not translating into behavior, buyer behavior. People are spending more money as a result of that.

Yes, they may be more negative, but they’re still spending more money. So, I you like I said, we’re probably the most overly social media country in the

world. I’d venture to say I was loving the this this morning they talked about the happiness index and once again

Finland is the happiest country in the world. We are like number 23. Take them over. Yeah. Exact.

The one thing that gets me is do you know what is the silent generation is

silent generation was they so silent generation is the ones that are right before the baby boomers. So they’re that

ones that 1946.

Yeah. Yeah. So they were not they’re right after the ones who fought World War II. The greatest generation. So they’re a really small

generation in there in between the greatest generation and the baby boomers. Okay. What do you got?

Yeah, they’re sometimes called shadow boomers, too.

Shadow boomers. Okay. I haven’t heard that one.

Yeah. So that’s I’ve got a little chart on my wall that shows these different generations, but yeah, they’re and they call them the silent generation because they’re the ones that just put their nose to the grindstoneone and worked.

And they’re very much like the silent gener the greatest generation of just be patriotic, work, do your stuff, and don’t say anything.

All right, let’s let me quickly crank into mine here and I’ll share some of the economic data that we have for this

week. First off, once again, the government shutdown that keeps on giving. We’re still we’re still PPI information from February at this point.

So, we’re at least catching up. And I think this is the final PPI report from the government shutdown era. So we got

two of them this month. So this should be the last one unless we have some other kind of idiotic government

shutdown that affects this. So this kind of spooked the market earlier this week.

PPI was expected to be down to.3%. It was.5 prior came in at 7. Everybody got

spooked. But then the reality is I started looking at it and I’m like okay everybody says that it’s X food and

energy that’s the important part and X food and energy it was only up 0.5 it was within the consensus range and it

was less than the prior month so you take out the volatile stuff if that’s what the Fed wants to work with we are a

little bit higher X food and energy year-over-year at 3.9% so it’s not anything that the world needs to be ending about but we just need to be

aware of it and it’s very likely that PPI will go up a little bit especially on the the energy side with the conflict

that’s going on and we’ll talk about that talk about oil prices in a minute retail sales once again delayed for the

government shutdown came in a little lighter than expected 2% x vehicles and gas month over month it was up.3 so

vehicles have been down really especially Used vehicles have been down quite a bit, which quite frankly is not necessarily a bad thing because they

were just ridiculously high prior. New home sales. This one was a I don’t think the news really made much of a deal of it, but this actually was not good.

Prior 745 that was revised down to 712,

which is pretty light to begin with. The consensus this time was 728, came in at 587. So this is the one that dominated the headlines this morning.

Yeah. And this is a not good because this is what really drives our economy is the trickle down effect. If you don’t

buy if you don’t build new homes then you know the cost of housing goes up. If you if you don’t have new homes being bought, the Home Depots of the world,

everybody struggles because there’s so much of a trickle down effect there. Not to mention realtors and everybody else.

This is a not good trend that we want to see flip around a little bit. Jobless claims this week.

I just looked it up because they were talking about how mortgage rates ticked up and I hadn’t looked at it in a little while. It’s ranging between 610 and 635.

It’s not that is not good for housing. Now, it really needs to be in the fives.

Even if it’s 5.99, it’s over six is a number that people just they get it in their head and it’s even though it’s not

talking about cancellations, mortgages on the trending up again because they think prices are coming down. Not good. Not good.

And a lot of this is that fear of inflation is pressing into the 10-year Treasury which is pushing that up and that affects mortgage rates and once

again trickle down effect. So something that we need to really get our hands around. Jobless claims came in way less

than what was expected or not way less but less this week. Once again trending in a good direction. Hopefully it’s been

hovering around this 213 to 215 range for a month and a half, two months now.

So not seeing any big spike ups on the jobless side, which is good. This one I thought was hilarious because I was

looking at the consensus outlook below and this is the read from Monday from all the geniuses in the economics world

as Empire manufacturing which Empire Empire State Manufacturing was down a little bit slower growth seen in the

index barely positive at 5.5 in March versus 16.3 in February came in at 18.1

so you guys don’t know what the heck you’re talking about. And I think it’s actually I think it’s more because if you look at some of the other feds,

Empire State’s been trending down for quite a while or it’s been just barely there. And that’s more just what I think

is more policy in the state of New York than anything that’s systematic of problems with manufacturing in general.

The other manufacturing reports have actually been very good. Richmond’s been really good. Everything else, you know,

once again, I we’ve said it multiple times about economists.

They can be wrong half the time or more and still keep a job, which is amazing to me.

All right, last but not least, I wanted to because I was trying to get my head around, okay, what with the bounce up

from 60 to 100 or 60 to 90 with oil prices, how is this kind of in relation to other oil price shocks in the past?

So looking at some over the last 60 years, the worst of which was 1973 Arab oil embargo. The price of oil went up 300%.

Interestingly enough, the price of oil was like $8 and it went up to $18 or

something like that or it was like $5 went up to $18 which we would laugh at today. We see a move of that much in a

day here. The Iranian revolution 1979 oil prices went up 130 to 165%. During

the Gulf War, 100 to 170. 2022 Russia Ukraine oil prices went up 30 to 60%.

We’re hovering at 40 to 70%. Right now,

in relation, yes, it’s a big number because we’re talking 90s and hundreds,

but it’s not really gone up as much as we would have expected. And if you watched last week’s show, we talked

about where even where the Gulf right now, the Persian Gulf and the Straits of

Hormuz, that’s 20% of oil production and ships are getting through at this point. They’re starting to trickle through.

Yes, it’s 20%, but I think that’s going to start to change as we go a little bit farther into this. But you’re seeing

prices not spike through the roof, which you know,

you got to look at the difference in the standard of living. Back then, healthc care was more reasonable. You didn’t

have to pay for Wi-Fi and cell phones and all the other stuff that we have today that we didn’t have back then.

Cable, streaming, add all that into the budget. You didn’t have that back. Yeah.

And obviously, what was the average salary? 15 $20,000 a year the average see that’s well below p poverty line

today I think 3200 grand yeah you can buy a house for 30 grand and it was a really nice house

at that we didn’t Yeah have McMansions back then you had normal average yeah no mansion

bothers me a lot last week we talked about all the the delinquencies car loans and in credit cards and mortgages.

Look, we’ve been saying it for a while. Just another brick on cracked ice here. Yeah.

And I don’t know if the catalyst is going to be this war or not, but I was looking at the debt clock. One of my favorite sites. I looked at it for the

first time in a long time last week. I think we’re about to breach 38 trillion.

I’ll see if I can bring it up real quick. It’s just Here it comes. 39 trillion. I’m sorry.

Holy crap. 30 that we just breached 39 trillion. 39008. Yeah.

It’s unsustainable.

Where does it stop? Yeah. I mean, and they say the debt per citizen is 113,000

and change. The debt per taxpayer is 357. Good. How do we cut this in half? Yeah. How do we just stop it going up?

And as far as cutting it in half, how do we just stop it from going up? I just want to stay at stop. Just if you watch

that debt clock, it’s just literally you watch numbers just ripping off nonstop as you go. I’m looking at it. I’m getting dizzy.

Yeah. Me drama me.

Yeah. Yeah. And it’s it I it’s just where does it stop? I at some point and honestly it’s not any better around the

world. That’s the thing. I wish I could say it’s a unique a US problem, but it’s promise watering down our dollar that we

will lose reserve currency at some point, especially if we can’t forget about slow it down, reverse trend.

Yeah. But the scary thing is it’s been interesting this year. The dollar has strengthened really significantly

this year. It’s what’s hurt gold prices and stuff like that. It’s that’s because some European countries,

including France, are not buying oil in US dollars. They’re pegging it to the one. Yeah. Not good.

Yeah. Nope. Totally agree. All right. I’m going to tell you what.

I’ll make a deal with you. Between now and next podcast, we’re going to solve all these problems.

There we go. Yep. I’ll start on half of it. You start on the other half, and we’ll get done. I’ll tell you what, you work off the debt problem because I’ve

had no luck with that in the last couple of years.

Let me take that. You figure out how we’re going to make $39 trillion to offset. You There’s only two ways to do it. One,

cut spending and increase taxes. There’s the only two ways to reduce it. That’s it. That’s it. Yes, we could ship out more,

create more taxation. What happened to tariffs will help bring that? No. No.

Yeah. You got to decrease spending and increase taxes. That’s it.

But the problem is with the laugher curve, when you do that, you actually come in with less revenue in the long run.

Okay? So, we have less revenue. How else are we going to reduce and get rid of this debt?

All you can do is grow. All you can do is one, stop spending like maniacs, but two, you’ve got to man you’ve got to

balance out your taxes and build an economy based on growth. Like I said this six months ago, no,

they need a mandate in the Congress. You have to have a balanced budget every year. Never going to happen.

Absolutely. Every state Yeah. Every state in the country or Yeah. Every single state has a balanced budget

amendment. the federal government just we do whatever we want until they till they get their feet put to the fire and

the problem is where do you cut money because you cut money from anything then it’s okay these are they’re taking money away from us it’s got to come from

somewhere they have to give up something the mandate for a balanced budget has about as much substance as a fart in the wig yes

doesn’t mean anything and it has about as much chance of passing as term limits in the Congress Yeah,

forget it. All right. All right. We will we’ll solve that by next week.

So, you know what you’re working on. I know what I’m working on. Folks, we’ll see you guys back here the next week.

And thanks for joining us. Have a fantastic week.