Speaker 1: Now look at that.
Speaker 2: Here we are gathered around on this Tuesday. Today is
the fifth day of August, year of our Lord, twenty
twenty five. My name is Tom Sullivan. We've got a
lot to talk about today. We've got the President was
giving kind of an open ended interview today to the
folks over at CNBC. We've got a number of things
about what's on the table with the President. We've got
an update on China and what going on with China
and trade. The Epstein story, No, won't, it won't go away.
I know Congress is gone for the month, but they're
still issuing subpoenas and things like that. You won't believe
who is on the list of the subpoenas issued by
the House Oversight Committee. And by the way, even though
James Comer runs the Oversight Committee, the subpoenas were pushed
by the Democrats. They think they're going to be oh, yeah,
they're going to get Donald Trump and his relationship with Epstein,
and it's going to be all terrible, that's what they're thinking.
And yet the Republicans have been doing this because they
want to find out who the Democrats were that were
involved with Epstein. So where do you want to start today,
boys and girls. Well, since I brought it up up
the House Oversight Committee, this is the one James Comer
is in charge of and is controlled by Republicans. But
it was the Democrats who pushed to move the subpoenas
from the to the Justice Department for the files on Epstein.
So the House Oversight is going to the DOJ in
saying turn over the files. So the Democrats pushed it.
They were joined by some Republicans and basically they got
this subpoena to go out there the people that they
have subpoenaed. Again, this is not a request, this is
not voluntary, This is a House subpoena. The list is
former President Bill Clinton, former Secretary of State Hillary Clinton,
former Attorney General Merrick Garland, former Attorney General Bill Barr,
former Attorney General Jeff Sessions, Attorney General Loretta Lynch, former
Attorney General Eric Holder, former Attorney General Alberto Gonzalez, former
FBI director James Comy, and former FBI Director Robert Mueller.
I don't know how he's doing. It didn't look like
he was healthy when he did the molar report. Well,
so that's where that goes. Like I said, they're not
in session, but these things have been put together by
staff and have been sent over to the DOJ. So
after we get Congress back to work in September, these
Oversight Committee hearings will commence and we'll see exactly how
this works.
Speaker 1: But what they're looking for are the.
Speaker 2: Files about sex trafficking part of the congressional probe that
they believe, the Democrats believe show links to President Trump.
Republicans think it shows links to former Democrat executives. It's
probably a number of names on there that are should
be prosecuted if they get there. And there's a number
of names on this list that just because they know
Epstein or went to Epstein's house or to his island
or flew on his plane, doesn't buy in large convict
the person. So it's just an update for you about
where all of this is going. So they got They've
got Yeah, the Clintons, both of them are on this
particular list. Committee actions show even when the stat when
the lawmakers are away, the staff is still working on
getting this, uh this done, and the Epstein story in
Washington has not died down. Obviously, Speaking of investigations, Russia
Gate is going wrong. And to explain exactly what's going
on with these investigations going back to the Obama years.
Trey Goudi, former congressman, former prosecutor. He explains what's the
latest with all of this.
Speaker 3: Well, it started with Hillary Clinton's email, and they needed
a distraction of diversion, so they concocted this idea that
Trump was colluding with Russia. I mean, that happens in politics.
What's different here is the Clinton campaign was acting in
concert with the CIA and the FBI and perhaps Barack Obama.
So you have all these groups that we give immense
power to that we're actively trying to help one political
candidate while hurting the other. And then when that failed,
they put a cloud over the Yellow one's presidency. I
mean he lost essentially his first tournament office. So that's
the politics of it. The legality of it is what's
the very criminal conspiracy, and the only way to determine
that is to investigate it using a grand jury. Look, Congress,
they can send subpoenas and they get turned into paper
airplanes and thrown back at you. That's not true. With
grand jury subpoenas, you have to comply with it. They
can make witnesses come and testify, or invocal privilege. They
can go you fill in the blank kind of documents,
phone records, text records, bank records. They don't have to
ask for it, they go get it. So it is
a powerful investigative tool. Whether or not there's a statue
that fits within the Statute of Limitations remains to be seen.
Speaker 2: That's one of the big questions is not only are
these investigations, whether it's Russiagate or Epstein, they're going back
years and are they going to just drag this out,
install it out for another three and a half years
and we never get any answers from it. But that
is where the focus is on a number of people
in DC. So Statute of limitations. Remember Obama is exempt
because he has immunity because he was president. The other
part of it, though, the Brennan's and Clappers and all
that crowd, Susan Rice, they may have liability if they
can show that they kept the cover up going within
the last I believe it's four years back to Trey
Goudia for him to explain.
Speaker 3: So let's imagine that you and I come up with
a three seventy one conspiracy to defraud the United States.
Can we find an act within the window within the
statute of limitations. Can we find an act that was
in furtherance of that conspiracy. You can argue that efforts
to conceal, efforts to lie, but we have to find
that act within the Statute of limitations, and then you
can bootstrap back and include things that happened even outside
of the Statute of limitations. It is true a grand jury,
a prosecutor can indict him Sandwick. But what is not
true is you can't convict him. So getting an indictment,
arresting someone is of no consequence if you can't get
a conviction. And prosecutors know that. So the standard for
charging someone is much lower than the standard for convicting.
So DOJ an indictment is not a win. A conviction
is a win.
Speaker 2: Then another investigation is Jack Smith, who was the prosecutor
on the four cases, going after three of the four cases,
going after Donald Trump before he was re elected and
going after him for federal law violations. And so now
the investigation has turned. DOJ is looking at a special
council to investigate the special council of Jack Smith. Here's
Tom Cotton, who's the head of the Intel Committee in
the Senate, talking about the investigation of Jack Smith.
Speaker 4: Anybody with two eyes to see could say that he
was simply racing the clock to try to get these
cases to a jury in Washington, d c. To convict
Donald Trump and imprison him before the American people could
elect him. There's no logical explanation for those decisions other
than a desire to rush these cases through the system.
Jack Smith even acknowledged that in his final result, that
he was driven in no small part by trying to
reach a verdict before the election.
Speaker 2: So Jack Smith was doing an old investigation on Donald Trump,
and now the DOJ is doing an old investigation on
Jack Smith and on Russia Gate. Trey Goudie reps in them.
Speaker 5: Yeah.
Speaker 3: Well, I mean, first of all, Tom Cotton is not
known for some right wing maga conspiracy theorists. I mean,
he's a pretty measured guy, so for him to make
a referral the allegation is that Jack Smith, as a
federal prosecutor, engaged in political activity to benefit a candidate
by trying to rush through these indictments and prosecutions. Now,
Jack Smith's response will be because I can't prosecute a
sitting president. Of course, I was moving faster. Tom Cotton's
response back would be, well, then why didn't you start sooner?
Why did you do this during an election year and
move at break neck speed, faster than you move against
carjackers and kidnappers.
Speaker 2: It's kind of where you need a scorecard to keep
track of all the investigations, because these are not about
investigations of some crime that took place last week. These
are all going back years, and whether it was Jack
Smith or whether it is Tom Cotton, or whether it
is the House Oversight Committee, they're trying to get to
the bottom of all of this, and I maybe it
will put a pall on future members of Congress or
current members of Congress from going on wild goose chases
to use the justice system to even the score politically
or to keep a candidate from having a fair shot
at being elected. And speaking of those people, there's nothing
new to report to you about the Texas Democrats that
have left the state. Most of them are in Chicago
somewhere in New York, but it is they're talking about
how this is war and they think this is the
most important thing going on in the whole wide world
because it does affect them. But for you and me,
don't you think they're working on anything to benefit you.
They are working on preserving their backside. That's what they're doing.
They're afraid that they will lose their jobs and they're
not going to do what. I understand the political fight
going back and forth between Democrats and Republicans. But to
leave the state. What's so bizarre. Two things that are
bizarre about this one is they went to Illinois, which
if you look at the congressional district map of the
state of Illinois, the congressional districts are little wiggly lines
drawn so weirdly because of jerry mandarin. That's what they
did to get more Democrats to be elected in Illinois,
other than just a plain old map with square lines
the other part behind it. So they went to the
state that is a classic a gerrymander state to complain
about the state of Texas wants to do jerrymandering. The
difference with Texas, which is different than most states. We
have all been witness witnesses to the rapid growth of
population and businesses moving to Texas. They don't have people
moving out, have mass in migration going, and so as
a result, even though the redistricting is supposed to take
place every ten years based upon the census every ten years,
they're doing a mid census redistricting because the state of
Texas has changed dramatically the number of people in Texas.
I still think they should wait for the every ten
years and keep that tradition going, but they're not going
to do it. And they do have an argument about
the fact that a lot of people have moved to
Texas and their politics they brought with them to Texas
from other states. The other strange part about all of
this is California went through this a number of times
and they kept redrawing whichever party was in power. And
this goes back twenty years when they're actually were sometimes
some Republicans elected. But what they have been able to
do is get the map drawn in California to where
the Democrats control everything. There are a handful of Republican
congress people in California, but most of most everything is Democrat.
The governor is the legislature is controlled both houses by
the Democrats. It's not good when you don't have a
competing chance by both parties. You need balance in politics
rather than have one party rule. Look at what they've
done to California. It's destroyed. Same with Illinois, same with
New York. One party rule. So as much as it's
interesting that Texas wants to do this, I understand why
they want to do it, I'm not so sure it's
good for the overall political system. And the other part
about California when they went they finally the people there
finally put a proposition which they can do in California
on the ballot and the people voted for it, which said,
we are not going to let you political parties draw
the congressional districts. No you're not. We're taking it away
from you, and we're going to have an independent panel,
I believe of judges, which you're never going to get
a perfect panel because everybody has a bias to the
left or to the right. But that's what they have
in California now is every ten years they have this
independent panel that will draw the legislative districts congressional districts
and not let the politicians do it. So that's what
they want to change, and Gavin Newsom is talking to
the legislature about putting it on the ballot this November
for the people of California to undo that rule and
give them the power once again to draw the congressional districts.
I hope the people have California, don't give it back
to them to draw the lines. China. What's going on
in China. They are cracking the whip in China. All
of the public employees in China have been told now
that they are not allowed to travel outside of China.
Gordon Chang has a comment about that and about the
fact that President she is facing some real political cliffs
coming up in this fall. Here's Gordon Chang.
Speaker 6: I think that they're just paranoia, but also they know
that they're in trouble. You know, when someone travels abroad,
they bring money out, and China has a cash problem.
The other thing is that I think that there's a
general concern that people in Beijing see that if people
travel abroad, Chinese travel abroad, they're going to get a
very different view of the world than recent Chinese propaganda.
The gap between what China says about itself and reality
is growing, and we've seen that over the last couple months.
I think Beijing is.
Speaker 1: Really really worried.
Speaker 6: Yeah, he certainly has problems, and we're going to know
by the end of October how true these rumors are.
There's two big events between now and then. One of
them is that there has traditionally been senior Chinese leaders
meet at a seaside resort Betaha, and they often hammer
out really important leadership decisions. The second thing is the
Communist Party is holding its fourth Plan in October. That's
going to deal with a lot of economic issues. We're
going to see how C. Jim Pain weathered these two months.
If he weathers, then then he's okay. But if not,
I think there's going to be a real change in
the leadership and we're all just waiting. It's criminology.
Speaker 2: The other thing going on in China that is similar
to what we are experiencing in this country is the
birth rate has fallen dramatically, and as a result, the
population of China is going to be falling rather precipitously.
Speaker 6: Back to Gordon, it's been falling for about three years.
It's now about one point four billion people, some say
one point three billion, but by the end of this
century it's going to be somewhere between three hundred and
thirty and seven hundred and seventy million. This is going
to be the biggest population fall in history in the
absence of war or disease. And essentially, China's total fertility
rate now is probably half of replacement. So you can
see why this population is going to collapse fairly soon.
China claims one point three, some Chinese demographers say it's
actually one point one. You'll see some say one point zero.
There's a lot of disagreement about fertility in China for
a number of reasons, but clearly it's around half of replacement.
It's a dependency ratio, and China's dependency ratio is worse
than almost every other countries. So it's not just a
shrinking population, it is who's in that population. And by
the way, China believes that it can get around this
with robots, but you can't do that. You can ameliorate
some of the effects of population declined by automation, but
not to the extent that China needs.
Speaker 2: And finally, what's the deal with China and the negotiations
for a trade deal. We've got the big deadline coming
up on Thursday, but what is the chance of us
cutting a deal with China within the next month.
Speaker 6: I don't think so, because I think both China and
the United States are stalling. China's stalling because of the
leadership turmoil we're in, stalling because President Trump is stitching
up all these trade deals that are isolating China. So
actually delay helps us, and I think that's what Trump
is doing.
Speaker 2: Speaking of trade, we got our trade deficit numbers in
for the month of June. Takes a while for them
to compile this. The trade deficit for the month of
June sixty six to zero billion dollars. That let's go
back a couple of months. Our trade deficit in April
was sixty billion. It went up in May to seventy
one billion. That was a lot of companies basically stepping
up their orders, pulling orders from they were going to
make later in the year to try to get around
the tariffs that are coming. So sixty billion in May,
I'm sorry, sixty billion in April, seventy one billion dollar
trade deficit in May, and now sixty billion dollars of
trade deficit in June. So it doesn't seem that even
though all the hubub about tariffs, it doesn't seem to
be having a significant impact on the trade deficit. We're
still buying much more of their stuff than they're buying
from US. Our exports in the month of June two
hundred and seventy seven billion, our imports three hundred and
thirty seven billion, still heavily buying from overseas. I don't
think that's going to change anytime. So even with the
tariffs may slow down our economy, may slow down the
supplies of products in this country, but I think when
it comes to the numbers, I don't think they're going
to dramatically drop, which brings up two previous Secretaries of
the Treasury. They're at the Aspen Institute meeting to boondoggle
in Aspen, Colorado, and Tim Geidner and Hank Paulson are
both there, and let's let's listen to what they were
asked about regarding the tariffs. We'll start with Hank Paulson.
Speaker 7: So I think the economy. You've got to start by saying,
our economy is amazingly resilient, amazingly resilient. It's been the
bright spot in the world since twenty twenty. So just
think about what we've been through, the financial crisis, multi
year pandemic, shifting economic policies. And yet you know, if
you go back to twenty twenty, we've grown three times
the rate of the rest of the G seven. We've
had output forty percent higher than Germany, Canada and so on,
and we have got the strongest private sector. So I
start there. Then, in terms of what's going on with
the economy, tariffs, etc. Let me tell you it's going
to take a while to determine that. It looks like
things have slowed down a lot, okay in terms of
manufacturing jobs and in terms of job creation, but there's
so much going on right Look at everything that's going
on right now. It is amazing, and it's going to
take a while the work its way through the system.
So we've got, as you said, we've got tariffs, we've
got tax cuts, we've got the impact of AI that's
going to take a while for us to determine.
Speaker 2: So will take a while to determine all of this,
and that's I think the part that concerns me the
most is that these are radical changes to the world's
trading system. And when radical changes come along, you're going
to have to wait to find out just exactly what
the results of those radical changes will be. Will they
be good or will they be bad? We don't know yet.
But that's Hank Paulson. Here's Timothy Geidner and his comment
about the economy and tariffs.
Speaker 5: Let mean, tariffs are a bad tax. They're like a
corrosive tax on American manufacturers. They're aggressive in their impact there,
and we don't know where they're going to settle out yet.
You still don't have you know where China's going to
settle out, where India's going to settle out, You know
what the relative changes are going to be. So you
don't know yet what the broad impact on supply change
is going to be. But it's a it's a it's
a shock. It's a hit that the US economy can withstand.
It'll be it'll be meaningful, but not not enough to
break this pretty strong economy. We're an economy is very
hard to break. And we've got a whole bunch of
things happen in American economy that are a source of
strong investment, demand, innovation and things like that. And so
it'll be hard to Hanks right, It'll be hard to
figure out how hard to see the ultimate effect until
we see where they settle out. But you know, it's
it's like it's like rust. It's corrosive, hard to reverse
because they tax, they raise the costs of inputs to manufacturers,
and they are a hit to real incomes of the
average American and you know, they they they have that
basic effect you can't you can't escape. And the you know,
the laun term challenge for us, of course, is yeah,
they will raise revenue. You don't know how much revenue
going to raise. And you know, we're a country living,
living on the future, borrowing from the future, huge unsustainable,
long term deficits, and that revenue is going to prove
to be a very valuable thing in our pinnaclesism as
we get through this, and heartfeel to give that up.
So you know, most most people would say it's a
bad form of tax, even though they know taxes need
to going to go up. And it's going to be
hard to get the political system to figure out a
way to clean up and reform that legacy of tarists
because they're gonna they're gonna find that revenue is so attractive.
Speaker 2: I don't know how you digested the last two people. Hey,
Paulson was all raw rab Everything's great, the economy is great. Well,
we don't know what the impact will be at but boy,
everything's great and we're a resilient economy. And Guidner's like,
e or, oh, I don't know. It looks like it's
a pretty big tax, and but we're still a strong economy.
So they're both saying its kind of the same thing.
One's positive, mister positive bouncing around. One's very negative. But
they're both saying it's going to take a while before
we can figure out the impact from this radical change
in the world's global trading system. And the part that
Tim Geitner came up with was a typical Democrat. He goes, Oh,
everybody knows the taxes are going to have to go up,
So this tariff is really a tax, and it's going
to be hard to get rid of that because politicians
are going to be relying upon that tax income and
they're not going to want to get rid of it anytime,
anytime soon down the road. And I think he's right.
Once the tariff money and it's already started coming in,
can you imagine Washington turning off a spigot of billions
of dollars? I don't think so either. So President Trump
weighed in this morning as well. He called into the
Morning Show on CNBC. I wanted to play just a
little bit of some of his comments here. They asked
him about the tariffs, and this is what he had
to say.
Speaker 8: Within the next week or so, we're going to be
announcing tariffs on specifically this is a you know, this
is a separate class, and the fifteen percent tariffs on
sort of everything. These are excluded classes, I call them.
I like to call them excluded, like steel aluminum. At
that time, we're going to be announcing on semiconductors and chips,
which is a separate category because we want them made
in the United States.
Speaker 2: So more tariffs are coming, and it keeps everybody on
edge because they don't know what the rules are or
what they're going to be because they keep moving around.
Then he was asked about the pick for the Federal
Reserve chairman. Is what do you had to say?
Speaker 1: He's very good.
Speaker 8: Sometimes they're over and good until you put them in
there and then they don't do so good.
Speaker 1: But a lot of them, I think he's a very
good guy. I think I say Kevin and Kevin both Kevin's.
Speaker 8: Are very good and I have two other people that
are doing well. You look, it's in the end. There
are numerous people that are qualified. Now I think that
it'll be one of four people. They're going to make
the decision soon.
Speaker 1: Well, I love Scott, but he wants to stay where
he is. I will.
Speaker 8: I'll take him off because I asked him just last night,
is this something you want?
Speaker 1: Nope, I want to stay where I am.
Speaker 2: So the Kevin and Kevin and Scott. Kevin has it
and Kevin warsh Hasss the head of the Economic Advisor's
Council for the President right now. I like him a lot.
Kevin Walsh has been on the FED a number of
years ago. He's also, I think, pretty impressive guy. And
Scott was Scott Bessant, who is the Treasury secretary who
basically told the President last night, now, I'd rather say
his Treasury secretary. Let's see talking about China earlier. Let's
see what Donald Trump had to say about this deal
with China. China's our biggest trading partner. What does the
President say, think is going to happen?
Speaker 1: In have a meeting.
Speaker 8: We have a very good relationship. But I didn't call
for the meeting. He called for the meeting, so the
fake news announced Donald Trump wants.
Speaker 1: A meeting with China. No, I didn't want it.
Speaker 8: No, he asked for a meeting, And I'll end up
having a meeting before the end of the year, most likely.
Speaker 1: If we make a deal. If we don't make a deal,
I'm not going to have a meeting.
Speaker 8: I mean, you know what, what's the purpose of meeting
if we're not going to make a deal.
Speaker 1: But we're getting very close to a deal. We're getting
along with China very well.
Speaker 8: We do very very little business with India because their
tariffs are so high.
Speaker 1: So India has not been a good trading partner.
Speaker 8: Because they do a lot of business with us, but
we don't do business with them. So we settled on
twenty five percent, but I think I'm going to raise
that very substantially over the next twenty four hours because
they're buying Russian oil, they're fueling the war machine, and
are they're going to do that?
Speaker 1: Then I'm not going to be happy.
Speaker 2: So he thinks that he can do a deal with China.
But India, if we told you yesterday, India has played
both sides of the aisle, been trying to be friends
with us. They're trying to be friends with Russia. They've
been buying oil from Russia, which gives Russia money for
the war machine. And we've asked India not to and
they told us to go pound sand because they're getting
they're getting oil at a super cheap price, and so
it's good for India. They get oil at a very
low price. But they're basically blowing us off and saying sorry,
we'd rather do business with Russia. And oh, by the way,
we're also being friendly with China. So India is an
important one to keep an eye on. Out of all
of this on Wall Street today, nothing much to write
home about. A lot of red arrows, but small ones.
Dow Jones Industrials down sixty two, the now close to
forty four one thousand and one eleven NASDA. I'm sorry,
S and B down thirty NASDAK down one hundred and
thirty seven. Price of gold up a little, up seven
dollars to thirty four thirty four. Oil down a dollar
to sixty five dollars for one barrel of oil. That's
it for today. Thanks for coming by. We'll try this
again tomorrow, and we hope again we'll see you then