Speaker 1: And hello, welcome to the Wednesday edition of The Big Podcast.
My name is Tom Sullivan. Glad you could come along
on this twentieth day of August, year of Our Lord,
twenty twenty five. We got a lot today. I left
the program yesterday talking about Intel, and I mean, this
is a huge deal in the financial markets, and they're
all buzzing about it on Wall Street. That is about
the fact that the government is proposing converting the grants
that were given to Intel under the Chips Act, which
was passed a couple of years ago. Billions of dollars
being handed out to tech companies here in the US,
companies in the US to help them become big and powerful,
and it hasn't helped one iota. Ninety nine percent of
the important ships are made in Taiwan. But Intel is hurting.
They need money, and I don't know how you can
go in and say, here's the money we gave you,
and now we're going to change the terms on it
later and we're not going to call it a grant anymore.
Grant is we just give you money and you do
with it what you want. But now the Trump administration,
President Trump is looking at this and saying, wait a minute,
why don't we convert that to ownership of the company
ten percent of ownership. It's one hundred billion dollar company. No,
they don't have one hundred billion in cash. They wish
they did they have. If you add up all the
stock what all the stockholders own in Intel, it adds
up to one hundred billion dollars worth of talk if
you will. That's their capital. But they don't have one
hundred million dollars of cash on hand. They need money.
And it goes back. This is what Donald Trump did
in Trump one point, oh was he was looking at
Iraq and he said, hey, we spent all this money,
blood and treasure, and so why don't we put a
claim in to get the benefits of selling a rocky oil?
And that went nowhere. That's kind of what this is
is saying, well, wait a minute, the government's giving out
all this money, we should have some ownership in this.
The problem with the government owning a company is that
it's unfair to the marketplace. It's unfair because the government
can do financing that no private sector company can do.
The stockholders in Intel, all of a sudden their stock
is well, it's our weigh down probably for most of them,
but it will dilute their ownership. There's nothing good about this.
CNBC anchors were talking this morning as they started their
programming about the government wanting to buy a piece of
Intel for the money that they've already given them.
Speaker 2: You know which, Let's begin with the US government reportedly
considering taking Stakes and other chip makers besides Intel. We
talked to the Commerce Secretary about this yesterday. A lot
of ongoing churn, a debate about what it means when
the government starts literally picking stocks.
Speaker 3: In the case of Intel, of course, they need money.
Speaker 4: Yeah, I mean that's what it really comes back to
in terms of just specific to Intel.
Speaker 3: In the conversation, they need money. What they need are customers. Well, no,
first they need money.
Speaker 4: You need money because they need money to build whatever
it is that the customers may actually ultimately want. And
having the chip sacked money which is free so to speak,
no strings attached, have become equity is not helpful then,
because it's the looting. But I can tell you as well,
it's not a soft bank. They've been talking to other
large investors as well about an equity infusion, obviously at
a discounted price. So we'll see whether they are successful
in raising more equity at Intel apart and aside from
what may be the conversion of the government's stake.
Speaker 1: Yeah, so there's no question Intel needs money and they're
going soft bank announced yesterday. I think they're going to
put two billion dollars in, but they need a lot
more than that. And it's it's again, they're they're way
way way behind on technology. It will take them at
least three to five years to even begin to try
and be competitive. That comes from the Intel people themselves.
So and what the news is today on Wall Street
is that the president is thinking about doing this with
other companies that got money from the Chips Act. So
he the thing. The thing about Donald Trump is he
is a business guy and he looks at these deals
and he's having a hard time separating himself from his
role as a businessman most of his life to the
role of the executive of the US government. And the
government should not be putting money into the private sector
in the form of ownership. Can they subsidize him?
Speaker 5: Yes?
Speaker 1: Still not great. I remember Obama and Solindra. That's what
Obama did, was he invested in Soleindra one hundred million
dollars and we lost every penny of it because the
government was picking winners and losers and they're not very
good at it. And besides that, if Intel isn't good
enough to survive, then they should die. If they're good
enough to come up with a product that is successful,
then they should be successful. But it's not in the
private sector. Is private is the first word. It should
not be the government. So they did talk to Howard
Lutton makes the Commerce Secretary, and this is what Howard
had to say.
Speaker 4: Miss Secretary, how do you view them? The chipsacked funds
that have yet to be committed but have been promised,
and the idea that that might be then converted to
an equity stake, is that how we should view it
that ultimately, that's what you're talking to Intel about right now.
Speaker 6: Yes, yes, I mean the president is out that we
should get Americas should get the benefit of the bargain.
I mean that is exactly Donald Trump's perspective, which is,
why are we giving a company worth one hundred billion
dollars this kind of money? What are in it for
the American taxpayer? And the answer Donald Trump has is
we should get an equity state for our money. So
we'll deliver the money which was already committed under the
Biden administration. We'll get equity in return for it and
get a good return for the America can taxpayer instead
of just giving grants away.
Speaker 3: Do you get governance here, by the way, once you're
in for ten percent?
Speaker 6: No no, no, no, no, no, no no no no come on,
no no no what no, no, stop that stuff. It's
not governance, right, We're just converting what was at grant
under Biden into equity for the Trumpet administration.
Speaker 3: I get that. I get that. I just asked, you're
gonna get governance percent of the company? You don't why
why wouldn't she want voting?
Speaker 7: Non voting?
Speaker 6: No?
Speaker 3: Stop stop, don't do it.
Speaker 1: Howard is Uh, he knows better. Uh, And he's pointing
the Donald Trump. If you own ten percent of the company,
of course you get governance. You get to say, hey,
who's the CEO? How's the CEO doing? I think we
should fire the CEO, or we should give the CEO
a pay raise because he or she's doing so great.
We should change the board of directors. We should instead
of looking at this kind of ship, we should be
investing in that kind of chip. Of course you get
governance if you own ten percent. And Howard knows better too,
He said, God, he has one hundred billion dollars. No
they don't. That's the capital networth. Like I said, if
you add up all the stockholders stock adds up to
one hundred billion dollars. They are hurting for cash. They
don't have one hundred billion dollars in cash. So they
go on the anchors over at CNBC, let's catch up
with their chat about what a lot of people on
Wall Street are chatting about right meantime.
Speaker 2: And we assembled this with a conversation with the Commerce Secretary,
golden shares and x revenue kickbacks with Nvidia and AMD
calling for the firing of a CEO at Intel, along
with the sequity stake firing the heads of data collection bureaus.
It's all adding up to what some are calling a
Chinese model.
Speaker 4: Rare earths also don't and that was one of the
first with the four hundred million dollar investment there. But
again something that is very much a national security concern
for the US, and therefore the making sure that you
have a champion, so to speak, and somebody who's going
to be able to deliver on that rarer promise for
and domestically for our military and the like. I mean,
the guys on the squat this morning, we're asking Sarah Fire,
the CFO of Open Ai, whether they could imagine a
point in which the US government came and ask them
for an equity stake. Now, she had no answers. I
would expect that to be the case, but that's kind
of where we are.
Speaker 3: Yeah, and you also wonder if it came down to it,
if other shareholders would try to sue, or I mean,
how it would all play out. I don't, or if
it's just going to be kind of maybe it'll be
a limited case and we'll move on.
Speaker 1: Yeah, yeah, this is kind of unheard of. But at
the same time, the balancing question on this is, well,
wait a minute, we want companies that will be providing
their product for the US, which is a national security issue.
We're not going to invest in Wrigley's bubblegum, but are
we going to invest in chips and rare earth and
a number of things that we need for our national security?
Should the government take ownership or maybe just subsidize him.
That's really the Chinese model is the subsidy. So Andrew Fourman,
the former Well, he's a Harvard Economics professor, PhD in economics.
He was on the National Economics Council back in the
Obama administration. But he seems to be a pretty balanced guy.
And he was talking being quizzed by the anchors this
morning about this Intel deal.
Speaker 8: Okay, No, I remember Joe would give you a hard
time when you were in the Obama administration about Selindra.
I don't know if you remember that you remember this,
So I want to know what you think of the
industrial policy. Some of the news we're learning even this
morning that the administrations think of taking equity stakes in
all of these companies Chip companies that have taken money
as part of the Chips Act.
Speaker 7: I mean this administration's enthusiasm for involving itself in American
businesses who their CEOs should be.
Speaker 8: But the strike, Bedfellows is, should you be saying, raw, raw, raw,
this is fabulous.
Speaker 3: We used to do this and this is great.
Speaker 8: Or do you say the lesson of your own experience
was that Joe was right the whole time.
Speaker 7: Joe, Joe is always right, But Joe is always always
on the right, I think one should be very very
uncomfortable about industrial policy.
Speaker 3: Uncomfortable. So that's what he would say. I'm now, I'm.
Speaker 7: Thought that was small amounts of money for something highly speculative.
When you're talking about a large amount of money for
something very established, I think you have to be more
nervous about it.
Speaker 1: So it's a great debate question about should our government
be taking ownership in companies that we want to do
to have in the US, to be making things in
the US that we I mean, where's it go from here?
Do you buy a pharmaceutical company because we need pharmaceuticals
made in the US, et cetera, et cetera. So it's
quite the buzz on. Well, don't know yet if Intel's
going to agree to this. They already got the money
from the Biden administration. Now the question is will they
convert it over to ownership. If you owned a company
and the government gave you money and they came back
later and said, oh, yeah, we forgot to ask you,
we want ownership in your company. I don't know what's
going to happen here, but I'm I'm fascinated by it. Yeah,
And they made a reference there to the chief financial
officer for open AI. The name is Sarah Fryar. It
was interesting they were talking to her and say, well,
what if the government comes along wants to have an
ownership piece and open AI, I mean AI is really
critical and she dodged that question. Man, she she would
not answer. So since we're talking about the government, they
do have a big role. The president gets to pick
the chairman of the Federal Reserve Board, and that is
coming up quickly. Scott Best at the Treasury Secretary, was
talking about what's coming up Labor Day weekend.
Speaker 9: In terms of the interview process. We've announced eleven very
strong candidates. I'm going to be meeting with them probably
right before right after Labor Day, and to start bringing
down the list to present to President Trump.
Speaker 1: Jason Furman, the Harvard economist, was asked about the whole
part process of picking the FED chair.
Speaker 7: I mean, I'm worried. There's only one thing I'm looking
for in a FED chair. You know, be nice if
they understand the economy, be nice, if they know how
to manage. But the only important thing to but the
only really important thing to me is that they think
the FED should be independent. And I worry that the
main thing the administration is looking for in the candidate
is the exact opposite of that.
Speaker 1: Well, a couple of things. First of all, I agree
with the fact that the FED should be independent. The
reality is it's almost like the Attorney General should be independent,
the Justice Department be independent. But who selects the attorney
general the president, So there is a political element to it.
Who selects the chairman of the Federal Reserve Board the president,
So there's always a political element to it. Now, if
you want a FED that is independent, I as much
as I disagree with Jay Powell, I think he's been
too late, But talk about independent, I mean he is
absolutely turning a cold shoulder to what President Trump would
like him to do, which is drop interest rates, which
will probably take place in September at the mid September meeting.
And when that happens, it will probably be a quarter
of a percent, and the President will probably come out
and say something like, why didn't you do more than that?
A lot of economists want it to be more than that,
but I don't think it's going to happen. But yeah,
it's been a long time since the FED has been
truly an independent They were created by Congress, so they
do have an arm to the government, or the government
has an arm on them. Another head scratcher to me
is this business about sanctuary cities and sanctuary states. I've
never understood how a subdivision of a government can tell
the main government to go pound sand And that is
what sanctuary cities and sanctuary states do. Is that we
are part of the United States of America, but we
have chosen to not enforce certain federal laws that we
feel we don't like. And I just don't think you
can do that. We all are subject to the federal
and state and city laws where we live. You don't
get to pick and choose which ones you don't lie.
There's a lot of laws I don't like, but if
I'm going to violate them, I better be prepared for
some sort of accountability. So the latest is Boston and Boston.
The mayor in Boston has been given a five pm
deadline by Pam Bondy, the Attorney General, to stop ignoring
the federal law and put away this nonsense about your
sanctuary city status. Here's the mayor of Boston earlier today.
Speaker 5: Attacking our cities to hide your administration's failures. Unlike the
Trump administration, Boston follows the law, and Boston will not
back down from who we are and what we stand for.
Boston will never back down from being a beacon of
freedom and a home for everyone.
Speaker 1: So the showdown is on, and I guess I'm still
scratching my head about the process because they get mad
at ICE if they come in and chase people around
home depot parking lots. But they won't cooperate with ICE
when they have people that have committed crimes that are
in their jails, and all they have to do is
have the ICE people come into the jail and switch custody,
give them, give the criminal over to ICE, and ICE
will take them out and put them in their vehicles
and bring them to a detention center and deport them.
There won't be any riots, there won't be anybody hurt,
there won't be anything. It's all going to be very calm.
It's called the police are going to be showing up
at the jail and taking transfer of the prisoner that
the Boston Police have already rested for some kind of crime.
This is the kind of people that have been released
by Boston. Here's a guy, Julio Soto Uretta. He's forty
four years old, Dominican national. He was arrested for fenanyl
trafficking and possession of a firearm. Okay, they led him
out of jail. Here's another Daniel in Karnan Sanchez. He's twenty.
He's a Dominican national. He was arrested for drug trafficking
and also for assaulting a police officer. Okay, he was
let out. Here's another so Stenis Perez Lopez fifty nine,
Guatemala national. Indecent assault, two counts. I'm not quite sure
what that involved. And battery on a child. Isn't this
a special guy? And they let him out, So he's
still in some Boston neighborhood. And this Boston mayor is saying,
we're here for freedom. Give you another one. Here's Luis
Adolpho Guera Perez. He's nineteen. He was picked up for
drug and weapons crimes. Is that one?
Speaker 3: More?
Speaker 1: Blal carri Yiggot from Turkey. He was arrested for raping
a Massachusetts resident. And the Boston mayor is saying, no,
we're a city that protects freedom. And I'm thinking, as
if you were a Boston citizen, if you are a
Boston citizen. You want these people just wandering around when
it could have easily been handled over to ICE and
they would be on a Boston to an airport and
out of this country. The woman who is the head
of ICE in Boston is Patricia Hyde, and she is
doing our best.
Speaker 10: Boston has plenty more of those characters. Unfortunately, this is
every day in Boston. The amount of criminals who are
unlawfully here, who are at leased by the City of
Boston and the state of Massachusetts is unprecedented, and it's
a public safety crisis. Sanctuary policies don't make anyone safer.
They don't make the community safer. And as far as
the City of Boston and Mayor wo not backing down,
the men and women of ICE are not backing down.
Unlike Mayor Wu, I was born and raised in Massachusetts.
I grew up in Boston, and I know what a
safe Boston looks like, and this isn't it. I know
what a Boston looked like before sanctuary policies in the
last four years under the previous administration. This is a
public safety crisis. Sanctuary policies don't make anyone safer. It's
just common sense. If you're here illegally, you've already shown
a predisposition to not respect the laws of the country.
And when you're here and you commit a crime, you
should be turned over to ICE. That's common sense, and
returned back to where he came from. I prefer to say,
we like to work smarter, not harder, but we.
Speaker 3: Find ways to.
Speaker 7: Work around it.
Speaker 10: And the men and women of ICE, unlike Mayor Wu,
we took an oath and we swore to uphold our
oath to protect the cities and the communities in where
we work and where we live. And that's what we're
going to do despite the obstacles. The men and women
of ICE Boston and women of ICE in the whole
entire country.
Speaker 3: That's what they do every day.
Speaker 10: While Mayor Wu is up having a press conference in
talking about not working with ICE, the men and women
of ICE are out working getting her community safer.
Speaker 1: That's the part that puzzles me, is the mayor a
same now. They want to make the city of Boston safe,
and yet they're letting these people out of jail when
they could have handed them over to another law enforcement
agency called ICE, and they would have been taken into
custom and then deported. So I mean, who do you
think keeping you safer ice or the sanctuary city policies
of your city. I doubt the mayor is going to
back down. So five o'clock is the deadline, and then
I presume it will go to the courts, and the
courts are going to have to basically rule on this
whole nonsense about sanctuary cities. You cannot say you can't,
I can't not anybody can say, are there's certain laws
that I just don't want to follow that would be wonderful?
When did a cafeteria of laws that you will and
will not follow? And that's what sanctuary cities and states
are doing. We won't follow federal law. Federal law was
not made up by Donald Trump. Federal law was made
up by Congress and signed into law by a president.
And since we're on the topic of cities and crime,
the whole DC crime story is getting to be more
fascinating by the day. Washington d C. Apparently an investigation
is underway by the federal government into the fact that
a lot of the crime statistics have been manipulated or
have been forged by city officials to make it look
like crime is not as bad as it is the
whole idea about military. Now there's I think five states
that are sending their National Guard. I understand what they're doing.
They're trying to make a shock and awe into the
criminal part of Washington, d C. They're never going to
eliminate crime one hundred percent. You can knock it down,
and I think that's what they're trying to do. But
what really is going to need to be taken in
for DC or any other city, is you can't keep
the National Guard there forever. And they're really not law
enforcement people and they're basically a show of force. So
what needs to be done is if you want to
help Washington get their crime rate down, is start helping
them recruit police officers and hire more police. I mean
hundreds more police officers the National Guard has. We're up
to us somewhere around one thousand National card that are
either there or being committed to DC. It's kind of
an Yes, it's an overkill. I don't know if it's
going to work. It might tamper down the crime for
a week or two that they're going to have to
come up with a permanent solution to this. Hire more
police officers. They have another problem with the judges there.
I don't know how you get a judge they have
a recall. I'm not sure what the laws are there,
but the judges are letting people out with no bail.
And the DC City Council, again, this is up to
the people of d C, who have a these people
who have made the laws so that there really isn't
any punishment for committing a crime. So it's much more.
It's much deeper than just policing and National Guard and
running around on the streets of DC. They've got to
focus on more police, figure out how to get judges
in there who are going to be more common sense,
and then the same with the city council. That's up
to the people. And that's also another area that I've
always crashed my head on is why do people keep
electing people that do nothing but harm them? And that's
what's happened in DC. So Todd Blanche who's the Deputy
Attorney General of the United States, he was asked about
this DC fudging of the numbers.
Speaker 11: We know that DC has been an incredibly unsafe place
to live for a very long time, and so in
some ways it's not surprising that we that we hear
about reports of this of this type of conduct that
suggests that DC is safer than everybody that lives here
knows to be true. So we're investigating it and hopefully
we'll get to the bottom of it at some point soon.
Speaker 1: Josh Holmes, who is a political guy, lives in Washington.
This is his take on how the city's doing.
Speaker 12: I think the vast majority of people who live in
Washington work in Washington are grateful for the effort to
try to clean up the streets. This wouldn't be a
problem if a Maria done heer job in the first place.
And I think that the story that you're covering here
is critically important. Obviously, a huge component of knowing how
to keep a community safe is having good data and
understanding what's going on there. You need law enforcement to
be prepared accurately to try to tackle a criminal problem
within city limits.
Speaker 3: This seems to be a big problem.
Speaker 12: I think we're all used to a leftist sort of
manipulation of data that compares a current situation to something
short of mad Max style lawlessness to suggest everything's fine.
This seems much more concerning, much more pernicious and that
data could have been manipulated in and of itself. According
to the DC Union Police Chief, it's just not what
the DC Union Police Chief has to say. They say
that it's a frequent practice of higher ups suggesting that
people file lesser incident reports for criminal activity when they
arrive onto the scene.
Speaker 3: We're going to find out whether that's true or not.
Speaker 12: Thank goodness, the DOJ is taking the step to try
to figure that out, because it's not just about making
your city look safer than it is, which we know
that's a common practice with this crew. It's about making
sure that law enforcement has the tools to tackle the
problem in front of them. I mean, we were like
a year or two remove from this DC City Council
suggesting that it's the kind of car you drivel that's
the fault of the stealing of your car, or they
can give you air chips to try to track your
stolen vehicles so you can track it down more quickly.
This is not law enforcement hasn't been for a very
long time, and so I think most people are grateful
this is happening.
Speaker 1: No, that's certainly not law enforcement. It's your fault that
your car was carjacked because you have a nice car,
or here, but one of these little finders, these apple finders,
and we'll give you that so that you can find
your stolen car if it's one piece. So we'll see
what happens with DC. But if it's happening in the
nation's capital, is it happening in your city? If you
have a crime wave where they are the police or
the mayor or somebody higher up? Was the accusation in DC?
Are they fudging the numbers to make it look like
things aren't all that bad. I would think that they
would want to do it the other way and make
crime look even worse so that they can get more
funding to fight crime. But that's just my math and
the bottom line is, again I'm repeating myself, that they
need to hire more police, figure out of way to
get judges that will actually hold people responsible, and get
the city council to do away with those laws that
have basically turned felonies into misdemeanors and no cash bail.
They've got to get not even tough on crime, just
a little bit tougher on crime, and I'll bet you
you'll actually see the numbers go down and one more here.
This is a lady who lives in the District of Columbia.
Not quite sure what her role is there, but she's
very familiar with juvenile crime, which seems to be out
of control. And this was her observation, which I thought
was kind of interesting.
Speaker 13: So when I was a kid, a juvenile is somebody
under the age of eighteen, makes sense, right, But according
to the DC Council, a juvenile is somebody under the
age of twenty four. So they were saying, hey, you're
a juvenile until you're twenty four. You could have kids,
but you yourself are a juvenile and we're not going to
consider you, know, you fully developed, that you will be
fully accountable for your crimes. And I remember going to
Charles Allen at the time, who's the word six council
and everything?
Speaker 3: Charles, what are you doing dude?
Speaker 1: What are you doing? Dude? So the city Council in
d C raised the age of being a minor all
the way up to twenty four, so that you will
be pampered and not be actually committed, you know, sent
to jail or being held responsible for crimes that you commit.
No wonder they've got they've got the problems in DC
are very deep. It's much deeper than law enforcement in
that city. I can't imagine how a police officer working
in that environment can even get up and go to
work every day. Let's check out Wall Street today. Not
much movement on the Dow, but the Nasdaq took another
big well, a lot of the big tech rally that's
been going on for the last few months, huge profits,
and the profit takers are taking their profits, so they're
selling a lot of the big tech names that were
leading the charge up the hill. But the Dow did okay,
was up sixteen. The Dow at forty four nine thirty
eight Simpede down fifteen, the NASDAK down one hundred and
forty two. Like I said, tech's leading the way up,
deck is now leading the way down. Gold price is
up thirty three dollars to thirty three ninety one. Oil
price is up almost a dollar to sixty three dollars
for a barrel of oil. Thanks for coming by, Happy
rest of your Wednesday to you. We'll try this again tomorrow.
Hope to see you then.