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Welcome back to Problems to Profit. Want to give you guys your May 15th market updates. We'll try to get this thing aired as soon as possible. Guys, I want to talk about several things. I'll get to the end with what's next. What are my predictions? Not that you should ever trust an economist's predictions. You trust but verify is a great way to look at it. But I want to go through what's changed, what we're seeing, what we were right about anything. We were wrong about all of that. So one, it looks like the trade deals were a big nothing burger. The well not nothing burger. I don't want to say that because I'm going to trigger half the population, make half happy. They were we accurately predicted that the whole tariff thing was about negotiations. Okay? There's, there is no way in hell that the ers, the External Revenue Service is ever going to replace the irs. Now one thing I will say that it appears Trump was right about was China. I don't know that he did it in the most efficient way but China caved in harder than the US Caved in. Trade deals hurt all countries or tariffs hurt all countries and embargoes hurt all countries. And that is effectively what we had. But the end result of the China US trade situation was a 10% tariff and a 30% tariff. And the 30% tariff was on Chinese goods. And you do have the Chinese working on how do they mitigate the fentanyl problem to get rid of the 30% and bring it down to 10%. Okay, so they're charging us 10, we're charging them 30 by the numbers. I'd call that a win for us. Okay, we have 3x the tariff that they do. Now, that being said, they also do some currency manipulation. They manipulate their products. There are trade surpluses and trade deficits that are in one or another country's favors on every country, like across the earth that we're actually talking about. Like, you know, with China, we have a huge deficit. Like we sell them far less than they sell us. With England, the first company country that we got to deal with. Like, actually it's the exact opposite. Like we actually sell them more than they sell us. So it's, you know, rebalancing and leveraging tariffs for the purpose of negotiation is what we predicted that the Trump administration was gonna do. And it looks like what they're doing. I hope that you guys took our advice, bought some stock, held some cash for potential opportunities, because the stock that you bought would have gone back up. Right now if we look at the stock market, the, the stock market is showing that it is back to where it was before we started this whole tariff craze. And it looks like we're continuing to grow. Now what we are seeing with regards to the stock market going up is a flight from bonds. And we also see that the Fed, even though they've cut selling treasury bonds, quantitative tightening on treasury bonds down to 5 billion a month, they still are selling up to 35 billion a month of mortgage backed securities. So there's still a tremendous amount of pressure on housing. There's very high rates on housing. We're seeing an aggressive slowdown with housing, which is a significant contributor to inflation. Now, I think some of that is planned and some of that is the goal of the Fed to keep inflation low. But it's also, you know, depending on how long they wait, going to be the narrative that actually really hurts the Fed and causes a disproportionate acceleration that'll cause another bubble and another cycle if they wait too long to cut rates and, or slow their quantitative tightening or stop it. I think the next move we're gonna see from the Fed is to stop their quantitative tightening. So anyway, it looks like Trump was right with China. It looks like Trump did things the wrong way because he alienated a lot of people on the way to being right with China. And he probably could have corralled Everybody against China and gotten the same benefit that he was able to get without alienating the European Union. Without alienating. I mean, he had a lot of leverage with the Ukraine war and the EU and their position on where they're at with Russia and everything else, which we'll get into in a second. Regarding Trump as the peacemaker, I do not see Trump right now as a significant peacemaker. He claimed victory over the Houthis and the next day after he claimed victory, they launched rockets at American ships. So I mean, you can find that on Indian news media. It's not being reported in American news media probably because news media is getting thrown out of, you know, rooms they want to be in to get the story from the Trump administration if they don't report what the narrative is. We saw far more of that under the Biden administration, but it sounds like we're seeing some of that under the Trump administration just as a result of they haven't covered it. And there's enough toxic media to Trump that I think they should have covered it. And so the Houthis are still shooting. Maybe they're shooting less. So I don't think stopping the bombing on them was necessarily the right move. If they're gonna continue shooting at our ships now, I think it's less, but who knows? We'll see how that develops over the next 30 days. Cuz they all also could be looked at as well. Maybe Trump talked to the high ups in this organization and or whatever negotiator talked to the high ups in that organization and they said they'd stop, but they haven't been able to disseminate the information down. Maybe we'll see it over 30 days, maybe not. I don't know. I'm just saying a rocket was fire an American ship the day after that was announced, which may look a little embarrassing. So next thing, the Ukraine war. Putin suggested direct talks with Ukraine. Europe, of course, very quickly got on board with that. Trump, of course. And the Trump administration was even kind of having conversations about whether they should fly out and meet. Let's look at this because there is a lot of news media on Putin bad. Trump bad. This guy bad. That guy bad. Like, let's, let's. You can't watch how a politician's lips move. You have to watch how their feet move. And there is zero reason, as I understand it, like, and zero motivation for Putin to stop the war. Okay? Ukraine should have looked for a ceasefire back in the early days of the war when Boris Johnson from England flew out and convinced Vladimir Zelensky, Volodymyr Zelenskyy, that he shouldn't do a ceasefire at that point in time. That was the time that the little country, Ukraine, should have said, okay, cool, let's not do this. They had a ceasefire, agreed to, it was going to stop. They were going to lose a few small regions. But now a lot of Russians and a lot of Ukrainians have died. And if Putin were to stop a war that he was absolutely winning in almost every sense and way, he would alienate a substantial amount of his population that has either lost loved ones in the war, knows people that lost loved ones in the war. And. And they. I mean, they're a very nationalist country, so they need to feel that there is a pride of ownership and accomplishment that Russia did something right, that their child, their loved one's sacrifice was for the right reason. So if Putin were to stop his war on Ukraine right now because of pressure from the eu, who has effectively been very inconsequential in the entire situation, then he would look weak, and he's not going to look weak on a world stage. I do not see that Putin has any motivation to stop the war unless the terms are in his favor. So if we see Putin saying, hey, I'd like to meet with Vladimir Zelensky, and then we see the next article, vladimir Zelinsky dares Putin to meet him in Turkey, Putin's not going to meet him. The only reason that Putin would meet Vladimir Zelinsky is on his own terms to accept a very conditional surrender. Okay? It's not going to be like, hey, borders go back to normal, or everything goes back to normal. And if you're triggered by that, I'm sorry, but Putin has no motivation to do that. The biggest threat to any leader is their own people, and Putin is not going to lose face with his own people by bowing down to political pressure from a bunch of countries and leaders that frankly threw everything and then the kitchen sink at him for the last few years and lost. This was a proxy war with the west and the US and basically everybody pumping money, weapons, and everything else into Ukraine to fight Russia. This is a proxy war that we funded, and our guy lost the war. Putin looks like a badass right now on a world stage. His economy is doing well. He's basically won the war. Trump and the Americans are getting sick of backing Zelensky, and it's probably a matter of time before we cease aid or make aid so expensive so that Zelensky can't afford it. Plus, we're focused on other bigger deals like trade and this and that, and rebalancing America, you know, it's. It's a foregone conclusion that Ukraine is lost. So unless Zelinsky and the west get a little more humble in the way that they're trying to bake that pie, Putin ain't going to eat it. Okay? So I do not see an end to the Ukraine war in the short term. And if there is one in the short term, it's going to be on Putin's terms. India and Pakistan is a new thing, guys. I think this was directly linked to China. Like, India and Pakistan are both nuclear nations. Pakistan is effectively a proxy state of China. Pakistan is and has been an enemy of India. Yes, Americans are friendly with both India and Pakistan. However, this all happened right as there was a trade embargo between America and China. This all happened right as India. India was saying, yeah, we can onshore a lot of your factories, we can take on a lot of your trade. We can do this. And all of a sudden, immediately as that's going on, China realizes, oh, shoot, there's a more populated country that doesn't have a population decline that is rising up. China was rising up and they kind of balanced out, and now they're teeter tottering. We don't know whether they're gonna keep going up or whether they're gonna start falling. And it looks kind of like they're gonna start falling, similar to what Japan did many years ago, back when they were out manufacturing us, out producing us, and then all of a su fell off. Why do they all keep falling off? Because they're not going to create a monetary system where they can take away the American reserve currency. China will not do that. China will never go and get a Federal Reserve bank that is separate from their government. They have too much desire for control. The only way for China to win a trade war with America is to open their markets and allow people to sell to their consumers and to open and create a separate entity that is a Federal Reserve bank similar to ours that is not directly controlled by the ccp, the Chinese Communist Party. They're not willing to do that. So they're not gonna win a trade war, at least not in the long term. Chinese factories were shuttered. China got hurt. China realized that India was gonna take a lot. China probably encouraged Pakistan, a major buyer of Chinese weapons, to do something with India. Amazingly, there was a terrorist action immediately, which is one of those covert things that would probably happen. I don't wanna be a conspiracy theory theorist. Here, but it just kind of makes sense immediately. What does India do? They flexed. They shut down the Indus River. They basically froze farming in Pakistan. They said terrorism is over. They out militaried Pakistan in days. Yes. Trump claimed credit for the peace talks. We'll see what that means in the next 90 days. Like, if Trump had that much authority over there, we have to understand Prime Minister Modi over there. He's a sophisticated politician, he's a gangster, and apparently his military is badass. It looks like there are media reports coming out that India hit China or not China. Maybe China, but Pakistan's nuclear sites. Okay. China's air. Or I keep saying China. It's funny because Pakistan is a. Effectively a vassal of China, if you want to look at it. But Pakistan's air force was outpaced when Pakistan launched their Chinese rockets at India. Those rockets failed and fell out of the sky and India was able to shoot them down. India's rockets did not fail. They hit their targets. So right now, Pakistan is looking weak on a world stage and India is looking strong. The key to what's going to really happen there is going to be that Indus River. If we see them reopening the Indus river, then we know there was significant pressure from the Trump administration and others, and it will probably have something to do with trade. But I think that's going to take a little longer to develop. Right now there's a ceasefire. I don't think there's peace. And when the water starts flowing, water is life for countries because of farming, because of food, because of everything else. And if you have an economy as weak as Pakistan's, they're going to need that to reopen. So the only way that happens is if there's a capitulation that India would have to make and, or a significant amount of pressure around trade for India, which we'll see. Like, they're supposed to be one of the trade deals that's coming in. In other words, all of these things interact and affect one another. The stock market's booming, the real estate market suffering. I believe the real estate market's suffering because people need, like, and I say people, the powers that be. Those people need to not have a lagging inflation indicator speed up because it will create a bubble. Now, should they cut rates? Yeah, they should cut rates. We see very high profile bankruptcies happening in the market. We see layoffs happening in the market. We're losing about 100,000 private sector jobs, you know, monthly, if you were to average it. And none of that bodes well. For the employment rate, like, right now, the numbers that we're looking at are, you know, questionable at best. Although there is some good news. Trump's inflation rates have continued climbing down. I mean, the last inflation numbers we just got were, you know, the lowest since 2021, when basically Biden took over. So it's, it's looking like Trump might have something to talk about, especially if the tariff stuff and the trade deals were a big nothing burger on. He may know more than Powell, because every economist out there, it seems that the Fed was predicting, oh, transitory inflation. Oh, this. Oh, it may not be transitory. Like, remember, these guys are the ones that got transitory wrong last time. Could it be that they got transitory wrong this time as well and they should be cutting at least some? And the answer might be yes, but only time will tell. It looks to me like there is a significant divide between Trump and Powell and, and it looks like it's personal, which would make sense, unfortunately, because Trump has said a bunch of things that were unnecessary if you wanted to deal with a bureaucrat and an attorney like Powell. Attorneys love language, attorneys love rules, attorneys love structure. And when you come out calling a guy a loser, calling a guy names, especially a guy that believes everything should be in a box and structured the right way, that's the guy that you're going to offend to a level that maybe you're forcing him into a situation where he's not gonna work with you. Trump should have called him, he should have met him, they should have shared data, and we should see a 50 to 100 basis point drop. That's one of the things that I was predicting would happen, is about 100 basis point drop this year. I think I was actually wrong on that. And I'm talking 100 basis points with the Fed. I think we may still get 50. I'm hoping we'll still get 100. But they've been able to push this long regardless of the soft data being bad. So where we were right on tariffs being a nothing burger, we. We were wrong on the 100 basis point cut, or at least that's what it looks like so far. We'll see where that goes, though. I mean, we still have some time. There could be a reversal if the soft data turns hard, if the inflation numbers continue coming in good, as they did in January, February and March, then we'll see what happens. And April, frankly. So you could see potentially some more cuts there. But either way, the guy that's looking like he might replace Powell is coming out and saying, hey, if the Fed can't get this right, like, what's the point of the Fed? Like, he's already speaking Trump's language. Powell will be replaced in May of 2026. What does that mean for you? If you're looking at real estate, that means that between now and next year, you have one more year of a fight between the Fed and the President. The new Fed chair will be aligned to the president, Trump will appoint him and that person will bring down interest rates. So if you're looking to buy real estate, I would not wait for the market to accelerate because you want to marry the property date the rate, guess what, you're in that last year. And the way markets work, people are going to go ahead and get ahead of it within six months of them knowing it's going to happen. So what's the best time to buy between now and the next six to nine months? And after that you're probably going to lose your opportunity to get the best bottom dollar deal. We are seeing builders slow down. That also means we're seeing lumber prices come down. So, you know, if you're a producer that's always producing, it's a great time to buy. If you're a custom guy, like, yeah, it's probably a struggle for you. Tax cuts is another major thing that we see on the forefront. I think this would be a major economic boom. I'm actually becoming a little more bullish than I was. Like, I mean, I made some very good money in the stock market, but I also kept some good cash on the sidelines just, just in case. So, you know, got dry powder and then I got some damp powder if you want. I think if they pull their tax cuts off and we continue to see more trade deals coming in, I think that you're going to see a boom in the stock market, more suffering in the bond market. I think that will force. So we're talking the what's next right now and what you should look at that will force the Fed to at least slow down quantitative tightening on mortgage backed securities because it's going to squeeze the real estate market. You can look at that by what's going on if you follow random links, which is basically the publicly traded data of the lumber market and what builders are doing producing to try to build out of our housing shortage, which has only gotten deeper in the last few years, not better. So that's it for what I think is coming. What I see going on, where am I putting my money? Still stacking real estate, keeping some Money in interest rate sensitive stocks I buy every time The S&P 500 goes down. I did incredibly well when Meta dropped and wrote it back up. I loved some Tesla when It was at 225, I was able to buy twice. I bought once and exited at 250. And then I bought again and I'm still riding it. And I just, I love that stock. I mean, never bet against Elon. I love that Elon is no longer going to be fully involved in Doge and that he's coming out. I know that there was some kind of coup to try to take him out of Tesla, but don't bet against him, then he'll just take SpaceX public. I mean, you got to remember this guy is a commodity. He is needed by every government in the world. He puts up more satellites than everyone. So, you know, while you may not like his politics, while you may not like some of how the guy talks, well, you may think his family dynamic is weird. He's also a genius and he is a commodity to Earth right now. So, you know, the fact that he's a need, the fact that he's a commodity, if he were to get out of Tesla, I don't think I'd short Tesla because I think it's on an amazing trajectory. But I would go and invest in anything else that he's going to do, where he puts his focus. And what did we see? Even though he is more out of Doge than he was, we saw cybertrucks escorting Trump the other day. I think that was an indication that still friendly, still friends. Maybe not just, you know, as much proximity to government anymore. Hopefully he learned his lesson. You get too close to the sun, you're going to get burned. Just like Icarus, right? All right, so that's it for me today, guys. I hope you got some value out of this economic update. I love you. Have an amazing day on purpose. Put your money where it's going to work for you. The main place, your business, the second place, real estate. The third place, anything you can invest in to get out of taxes. Okay? After that, like, you know, have fun. You can get into bitcoin, you can get into gold, you can get into stocks, bonds, this, that and the other, the everything else. All right, guys, you all have an amazing day on purpose.