Speaker 1: And hello, welcome one or all do the Big podcast
on this Tuesday. Today's the twenty first day of July.
Year of our Ward, twenty twenty six. My name is
Tom Sullivan. We have a lot to cover. Also, I
got to give you an update. I told you that
we couldn't do the Financial Friday podcast because of a
long story. Guy who was supposed to watch contracts and
everything was fired and nobody picked up the duties that
he had, so my ability to record comment line calls
was put on ice. So it's back. I've got it back.
It's the same phone number. Everything works again. So if
you have money questions, investment questions, anything to do financial
the Financial Friday Podcast, the phone number is eight five
five two nine five sixty six hundred eighty five five
two nine five sixty six hundred. You can also find
that number on my website, tomsulliban dot com. I apologize
profusely for we just got it up and running. I
think we did three or four of them and all
of a sudden everything technically went kaboom. So we got
that fixed and look forward to doing a Financial Friday
podcast this Friday. In the meantime, Uh, there's a few
things to catch up on. This this we had a
lot of it here in New York and it's past now.
In fact, we're having a big storm today, rainstorm win
tornadoes in the area. But the Canadian smoke. And it's
interesting because when the California wildfires were going, I mean,
there was more smoke in California than we've had here
on the East Coast. But it's very, very smoking. It's
not healthy and all that sort of stuff. But President
Trump got all upset about it, was going to threaten tariffs.
I don't know why, he just that's his go to
card I guess, But anyway, he's going to threaten tariffs
about the smoke. Like the Prime Minister of Canada can
actually control where the smoke goes. It's called the wind.
But and Doug Ford, remember him, the Ontario Premiere, the
Province of Ontario, Ontario, and he's willing to fight like
tooth and nails. So anyway, those smoke looks like it's
moved out for now, so maybe that will pass. But
we've also got a whole bunch of new tariffs that
the President has put on Canada. And for the life
of me, I don't understand it. It was interesting watching
the President at the World Cup on Sunday and there
he was in the same booth with and on the
stage to present the medals and all that with Claudia
Shinbaum who's the President of Mexico, and Mark Carney, the
Prime Minister of Canada, and they seem to be having
a wonderful time. Obviously that was phony or awkward or whatever,
because after that the President said, I'm going after Canada
with a whole bunch more of tariffs and I don't know.
There are biggest trading partner Mexico and Canada. We're tougher
on them than we are on China, which is a
head scratcher for me. In military news, there was hearing
today in Congress and they had the Chairman of the
Joint Chiefs Dan Cain, and also the Defense Secretary Pete
Hegseth testified. This is the first time that they have
actually given any sort of update, if you will. They
used to have remember back in back in the Bagdad
days when we were going after a rock that General
Schwartz Cough. I think he had like weekly, if not
multiple multiple weekly news Congress. We always would break and
take them for the show and everything else. But the
last military briefing that was held for the public was
back on May fifth, so they're not being very forthcoming.
But today they had to answer a bunch of questions
before Congress, and it was a typical thing. The Democrats
asking hardballs, Republicans were asking softballs. So it was interesting
to watch at the very least. So let's dig into
it today. Let's get into this iron business, because it
really is one of those where you look and it's
getting bigger, but they're still not full blown major military conflict.
It may look like it, but all the military people
are saying it's not. It's not full blown. Let's start
with Kurt Folker, the former NATO commander or NATO ambassador.
Speaker 2: Yes, absolutely, there's no reason not to hit targets like that.
We said all along, they cannot have a nuclear program.
They're never going to acknowledge that they're seeking to build
a nuclear weapon. We should just take it out. There's
nothing wrong with that.
Speaker 1: I agree with him. The man knows that area of
that part of the world, and he says, you're not
going to you're not going to negotiate with him anyway,
So just do what you need to do militarily. But
he's not alone. A lot of a lot of people
that are in the international affairs business says, the one
thing we haven't done is we haven't put down really
our goals and objectives, and that is where you kind
of need to start.
Speaker 2: What we really need is a clear goal and strategy
to achieve the goal. Opening the Strait could be that,
but that's a very difficult military lift and it's going
to require permanent American military engagement.
Speaker 1: I don't think we want that.
Speaker 2: I think as long as this regime stays in place,
we're going to have a problem. They're going to attack shipping,
they're going to attack their neighbors, they're going to threaten Israel.
They're going to support the proxies. They're going to try
to get a nuclear weapon. So I'd like to see
a strategy for how we actually get a different regime.
Speaker 1: In are At. Oh, finally another one that agrees with me,
get a different regime in Iraq. Yeah, because you can't
trust these people, you can't work with him, you can't
negotiate with them, So basically take them out. That really
is what it all comes down to. Rich Goldberg, former
National Security NSA director. I believe he was. He weighs
in on this, This is Rich Goldberg.
Speaker 3: Well, I don't think we're in an escalation trap. The
question for escalation is what does Admiral Cooper at Central
Command need to complete the mission he's on right now.
It does not appear that we are launching operations to
bring down the regime. We have economic tools that are
underway to do that, a strangulation via the blockade and
other measures. What we are seeing is Project Freedom underway
ten nights in and so the question the President will
have to Admiral Cooper is where are you on the
target set that you had developed for Project Freedom, that's
to get shipping going through the strait of war moves.
Are we actually seeing shippers continue to move? Can we
protect them? Have we degraded their ability? What else do
you need to degrade that capability to hit the straight
I think that's the President's focus because that's what we
need for the oil markets, and that's what we would
need to bag all the wins of Operation Epic Fury.
Speaker 1: Again, sounds like you lay out your game plan. I
know the military does, I'm not sure the White House does.
The question really is how politically driven is the decision
making at the White House because they don't have any
political problems in Tehran.
Speaker 3: Well, obviously the regime does not have political constraints. They
don't worry about the oil market, they don't worry about
prices for their people. So in that respect we are
always handcuffed politically as a democracy compared to a ruthless
dictatorship in Iran. Now, I would say it was probably
a mistake to allow people like Ahmad Vahidi, the head
of the IRGC, who's behind all of these attacks, to
walk freely for the Supreme Leader's funeral. Hopefully the Mosad
others have tracked his movements other senior IRGC leaders as well,
and if they are the key impediments here to getting
the Strait of Hormuz moving, you'd have to imagine that's
also part of the escalation options that we have in
front of us, if we think we can get to them.
But again, I think the core focus here is not
to play the game of disinformation and mind games with
this regime. This is about barrels moving through this trade
of war moves. It's about who controls the trade of
war moves. And then understand that if there are other
big ticket items like Pickax Mountain that we can't leave alone,
that we're not going to get dismantled via negotiation with
a regime like this. We are going to have to
find a military solution to ensure they don't ever get
a nuclear weapon.
Speaker 1: So you hear what he said. He's talking about you
may need to Actually, I know we've taken out round
one of the leadership, round two of the leadership. He's
basically saying, let's take these out too. Keep taking out
the regime leadership. I mean literally go after them and
then if you have to go through another few rounds
in order to get them to throw out, finally throw
in the towel. But right now we're not really doing that. Apparently,
maybe we can't find them, but I think Mossad probably
knows where that leadership team is. But what about this
Pickaxe Mountain that apparently is a site where we think
that they have centrifuges and maybe store a bunch of
their enriched uranium. It's still a question mark about have
we really taken out Pickaxe Mountain.
Speaker 3: So I've talked about this site for a long time
as of some of my colleagues. This has been under
construction for years now. The Biden administration did nothing about it.
In fact, was part of the appeasement problem that let
them continue construction of this facility. This is buried deep
underground near the Ton's, deeper underground than Florida was. It's
supposed to be more hardened of a facility to withstand
military strike. It was not hit last year during Midnight Hammer.
It was not hit this year during Epic Fury, which
has raised questions of whether or not it can be
hit by air or sea. So the question now is
have we develop solutions, even if they're short term band
aid solutions, to bury it, to deny access to it.
Because this is definitely the nuclear breakout facility that Aron wants.
They can't allow that facility to continue.
Speaker 1: Meantime, we're all focused on the Strait of Horror moves.
But on the other side there is the Red Sea,
which obviously goes up through the Suez Canal and into
the Mediterranean. But Saudi Arabia is alongside the Red Sea
and they send a lot of their oil to Asia.
Well to go that route, to go south through the
Red Sea, you've got to run past what the who
theies in Yemen control and they're talking about blocking that
What kind of impact would that have?
Speaker 4: Kareem Sajiporn would have an enormous impact because, as has
also talked about before, Saudi Arabia was getting its oil
out of the Strait. Now it's gone through the Red
Sea and the bulk of that energy is bound for Asia.
So that's why this is kind of a convenient route
to Asia. If the Houthis end up blocking that route,
that's we're talking about six seven eight percent of global
oil traffic being blocked. So it will have a significant
impact on prices now.
Speaker 1: It will and if you think prices have jumped up
in the last week, just stand by if the Hoothi's
blocked that Red Sea. Meantime, who are these Hoothies and
how what's their beef with Saudi Arabia.
Speaker 4: So up until now, the Houthis are the dog who
haven't barked. They are Iran's proxiason for a couple months now,
but they've been threatening to close the street. There is
a perception that the Hoothy salaries were being paid by
the government of Saudi Arabia, and that's why they haven't
yet interceded, but the Iranians have been trying to rile
them up. And you know what happened was when Iran
Supreme leader died, there was hoothy representation at his funeral,
and so there is a perception that link has grown
strong and recent.
Speaker 1: It is right, So keep both eyes on the hooties
down in Yemen the Red Sea. But back to Iran,
what are they thinking?
Speaker 4: So Iran's strategy is twofold. They, as we talked about,
they want to block the flow of global energy, spike
the price of oil, impact American public opinion. The other
way they want to impact American public opinion is by
going after US basis and not only the Persian Gulf
is you talked about Bahraan Kuwait, but also Jordan where
they just killed a couple of US service members. And
the reality is that even though Iran has been diminished militarily,
it still is able to produce thousands of drones and
missiles per per month, and those missiles and drones are
still very impactful and deadly.
Speaker 1: Yeah, that's the problem. The President keeps saying, oh, no,
we've decimated the Iranian military, and we haven't because they
keep they keep killing people, they keep sending missiles, they
keep sending drones, and again we don't even know what
is in Pickaxe Mountain.
Speaker 4: So that is one of Iran's nuclear facilities. There's a
perception that that is where some of their highly enriched
uranium is. Up until now, unfortunately, none of these military
attacks on Iran have really altered their calculations. And you know,
it's a regime which has been diminished, as I said, militarily,
but psychologically it has been boosted because it feels like
it has prevailed in this war. And although we're more
than thirty days past the sixty day window of the
memorandum of understanding, there are no signs that Iran is
preparing to compromise on its nuclear program or over the
control over the street of Homost.
Speaker 1: McGirk, who also has worked in for four different presidents.
He negotiates deals with people in the Middle East. This
is his latest basically observations.
Speaker 5: That's deeply, deeply concerning this is this site is called
Pickaxe mountainous near Naton's and it is you remember Fodoh
from last summer, which US military force is very effectively struck.
Pickax Mountain is deeper and kind of more complex. We
saw them building this site when I was in my
position in the White House, obviously raise a lot of
questions about it. Very clear what it's for. It's for
just this enriching uranium and getting the threshold of weaponization.
If they were able to move cascades of centrifuges into
that site, and if those centrifugis are spinning, that's deeply concerning.
It would be a new element that we didn't fully
know about because one assumption has been to the operation
last June that the nuclear program more or less has
been set back significantly. So I'd want to learn more.
But this site, Pickax Mountain, is grown very extremely difficult.
Speaker 1: You hear all these experts that know the ins and
outs of everybody in the Middle East, and they keep
talking about what Iran is doing is deeply concerning. I've
heard deeply concerning being used in number times. Maybe that's
just a diplomatic crutch. Essentially, what it says to me
is we don't know what Iran has or what they
have been doing. Meantime, yesterday I told you about let's
switch back to the US Mayor. Mom, Donnie made a proclamation.
He's a Democrat socialist, and he's sounding not as as
brilliant as he did during the campaign. At least people
thought he was brilliant. They voted for him. It wasn't
a big turnout, though, I keep going back to that,
so it wasn't like an overwhelming mandate. But yesterday he
came out and said, yeah, if benjaminette ya who sets
foot in New York City, I'm going to have him arrested.
And well, he comes every September for the United Nations
General Assembly meeting. And Elie Honig, who's a former federal
prosecutor of the Southern District of New York, was pretty
blunt about the fact that Man Donnie doesn't have a
single power to arrest anybody. Absolutely not.
Speaker 6: It is utterly ridiculous for the Mayor of New York
City to even suggest that he might have the authority
to order the arrest of Benjamin Netnyahu or any visiting
foreign head of state. First of all, the Mayor of
New York City has zero law enforcement authority. He does
not tell the Manhattanda the NYPD who to arrest, who
to indict. Second of all, this warrant that we're talking
about here was issued by the ICC, the International Criminal Court,
which we are not signatories to here in the United States,
So that warrant issued by the ICC has zero legal
effect here in the United States. In fact, we have
a federal law here in the US past twenty four
years ago that says, if necessary, the President can send
military troops to pull our people and our allies out
of the ICC, so that warrant has zero impact. And third,
and finally, the Constitution is quite clear that the conduct
of foreign diplomacy foreign affairs entirely up to the federal government.
It's certainly not up to local and county governments in
New York City or elsewhere. So I know the mayor
is having his best lawyers look at this right now.
Speaker 1: Let me save them.
Speaker 6: Sometimes you do not have the authority to do this.
Speaker 1: You're laughing. I mean, the mayor actually is laughable. And
so many of the things that he wants to do,
he's dreaming about all kinds of things that are just
not not in his purview, not under his control. And
speaking of the Democrat Socialists of America, John Fetterman was
asked once again about them.
Speaker 7: Humbly yourself, Bernie, you know, you just push an accused
rapist and imploded up in Maine. And how you're pushing
you know, essentially a Prohamas candidate.
Speaker 1: Know how Vetterman feels. I told you yesterday. Van Jones
is all upset about the Democrat socialists, thinking it's they're
going to hurt the Democrat Party for which he belongs.
Same with Bill Maher. Bill Maher's a lefty, he doesn't
like them either.
Speaker 8: Every day I read about a new person in some
Colorado and Wisconsin, somebody who was saying some variation of
not defund the police, abolish the police. What world did
they think we could possibly live in under these conditions?
Speaker 1: So it's going to be interesting to see how they
do when you get a bigger turnout for the midterms
than you do for the primaries. But in any case,
there's still a lot of pushback on all of that. Oh,
air Force one also the latest update. David Urban, who
talks for the Republicans all the time, he came up
with something today I never heard of before. I never
heard that airport. The new fancy guitar gold laden air
Force one was going to be limited to just flying
around the United States. But Urban says that was the plan.
Speaker 9: Yeah, listen, when I read about this initially, way back
in the way back machine, you know, I was under
the impression that the plane would only be used for
domestic travel to begin with, right, because the threat is,
as you I'm sure well aware, domestically is far significantly
less than it is when you're leaving Turkey, which you
know borders Iranian airspace.
Speaker 1: Right, So.
Speaker 9: I thought originally the plane was only gonna be used domestically,
and then I was surprised to see the President take
it all the way to Turkey. I do think that
there are obviously significant capabilities in a you know, the
plane itself. The new planes are about five billion dollars
a copy at this point, right, So there are significant
enhancements and upgrades that are made to these seven forty
sevens to keep the President incredibly safe under a wide
range of circumstances. And clearly they didn't have all the
bells and whistles on this plane, you know, the Air
Force has bought just to be so people are aware.
The Air Force has also purchased a few seven forty
sevens from Luftanza actually to help bridge the gap until
they get the new ones done. So there's gonna be
a little bit of time here. There's gonna be some glitches,
but we want the president safe. We want the next
president safe. So I'd like to see you think it
maxed out before he gets back on it again.
Speaker 1: That's new too. I had no idea they bought a
couple of Lethon's at seven forty sevens. It's just stay
with the just stay with the one. You've got the
blue and white one that Jackie Kennedy did delivery. It's
got everything. It's got all the defensive mechanisms on it.
So in any case, that still is going. And meantime,
the White House is now demanding bone records of New
York Times reporters that reported the fact that the fancy
new Air Force one did not have the proper defensive
systems on it. That's why the President did not take
it back from Turkey. And the White House is well.
The President, i should say, is mad about that. He's
got a lot of other things to be mad about,
but anyway, that's what he's mad about. It's making a
politicians and politics, Carl Rove, we got the primary and
era Zona today. Andy Biggs is one of the Freedom
Caucus guys is running for governor and the primary he's
expected to win the Republican nomination. Then he will go
up against Governor hobb what's your name, Katie Hobbes, the
Democrat in November. So Andy Biggs is going to be
probably successful at the Arizona primaries today. But let's check
in with Carl Rove about all the people that are
still out there waiting to be elected.
Speaker 10: Well, I think you're absolutely right. There's a couple of
important distinctions, however, and the Republican seats that are up
for grabs. Three of the four seats were won by
Donald Trump in twenty twenty four by double digits Alaska, Iowa,
and Ohio. Maine was won by Kamala Harris and is
historically Democrat. The Republican there, Susan Collins is enormously strongly
last time around. She didn't lead in any significant polls.
She was down by six in the average going into
the election, and.
Speaker 1: One by eight.
Speaker 10: So she's strong as an acre of garlic if they
grow garlic in Maine.
Speaker 1: I don't know.
Speaker 10: But the Democrat ones are all in race in states
that were one narrowly by one side or the other
Georgia and North Carolina won by the Republicans. The other
states won by the Democrats. But what's interesting to me
is Michigan is going to be a close contest. But
the Democrats have a big decision to make in their primary.
Are they going to go with a more traditional Democrat
or are they going to go with the Democratic socialist
in the form.
Speaker 1: Of Abdul Lsaid?
Speaker 10: And if he is the nominee, then Mike Rogers, who
came within two tenths of one percent of winning the
seat two years ago, might pick up this seat.
Speaker 1: So apparently this is the Democrats are now trying to
decide what the Democrat Party is all about. Are they
the new Democrat Socialists or will the establishment Democrats be
the winners? Remember what happened with Mega The establishment Republicans
were pushed out and the Mega Republicans were elected. So
is that is that split going to happen in the
Democrat Party.
Speaker 10: Well, if it had been a couple of weeks ago,
I'd say, al said is it would have been the favorite.
But here at the end of a third candidate pulled
out and giving a boost to stevens Uh and everybody
is climbing into the state, and uh, you know the
establishment types and the and some of the unions are
going for Stevens. And then of course you know Bernie
Sanders and AOC and Elizabeth Warrener going for al said,
this is a battle for, if you will, for the
future of the Democratic Party. And if he does win
the nomination in this in this very critical battleground state,
it could, it could, it could have huge ramifications for
their few to the party. If he wins in November,
then gives a big boost to the Democratic Socialist movement.
If he loses, it will be a commentary on how
the far left of the Democratic Party is unable to
win in battleground states in general.
Speaker 1: Like you want to talk gas prices. With everything hitting
up in the Middle East again, gas prices are back
on the rise. The triple A average for the cheap
stuff regular gas four dollars and two cents. That's up
seventeen cents in one week. That's faster than we saw
it before this run up. Diesel five fourteen is the
national average, that's up twenty six cents, twenty six cents
from a week ago. Patrick Dehan from gas Buddy, the
Guy keeps track of all this has these observations. It's historic.
It's never happened before.
Speaker 11: We've seen gas prises at four dollars back in twenty
eight and twenty twenty two, but normally it's one fell swoop.
Prices go above the four dollars gallon mark can eventually
fall back below it. Never in the same year have
we seen the national average go up above four, than
back below, and then back up again. And that's true
not just for gasoline, but diesel. Diesel prices also for
the first time ever, have rereached the five dollars gallon mark.
In fact, diesel the story of inflation, which was just
being cheerleaded a couple of weeks ago in the inflation report,
diesel has jumped back above the five dollars gallon mark.
In fact, thirty two of the nation's fifty states have
seen diesel prices going up by over twenty five cents
a gallon in the last seven days alone, with Colorado's
diesel prices up and astonishing sixty cents a gallon in
the last week. So consumers are going to feel the
pinch of the pump, not only in gasoline prices that
have gone up virtually in every state from a week ago,
but now diesel price is adding to that as well.
Speaker 1: Well.
Speaker 11: It's really an unfolding story here, not so much just
the Strait of Horror moves. A lot of Americans have
been tracking that for what it's been doing to oil markets.
But the bigger story here is not just oil but
refined products that are also getting choked through the strait
of WARMUS. It's major refineries in the Middle East that
can't get their gas lane diesel and jet fuelot to
the global economy, but more so Ukrainian attacks on Russian
oil refineries in the last few weeks. Over the last
three days, even over the weekend, we saw another Ukrainian attack,
this time on a refinery of about three hundred thousand
barrels a day. That's larger than the average US refinery.
In fact, it would probably be in the top third
of refining. And it's simply refinery attacks are simply making
it much more difficult for Russia to be able to
export diesel, something that they've now banned until the end
of the month because their refineries simply are being attacked
and there's no output. So that's the other element here.
It's not just a price of oil, but global refining
capacity has been reduced. China is really throttling down its
refineries and now Ukrainian attacks on Russian refineries. That is
why there's a bit in a disconnect between the price
of oil, still relatively low at eighty four dollars a barrel,
and the price of gasoline and diesel, which is now
four and five dollars a gall in, respectively.
Speaker 1: So I was thinking, we just keep an eye on
what's going on with Iran and the US and Israel
in that war. But yeah, I forgot. You got a
pencil in Russia and Ukraine, and Ukraine is having great
success attacking all kinds of different energy sites in the
heart of Russia. So that's also having an impact. Wall
Street two day. Let's see, nice positive day, started off positive,
kept on going. DAL finished up three hundred and eighty
five to fifty two thousand and two, twenty four, SMP
up sixty six, the price to the Nasdaq up three
hundred and twenty nine. Nice big gain for the nasdak
today goal up sixty six dollars to four thousand and
eighty two, and oil continuing to climb up another almost
two dollars at eighty five dollars for one barrel of
West Texas Intermediate. That's it for today. Thank you for
coming by. We will be back again tomorrow, and don't forget.
If you have money questions financial Friday, call them in
now and we will answer them on Friday eight five
five two nine five sixty six hundred. You can also
find that number on my website, which is Tomsullivan dot com.
Thanks for coming by today. We'll see you back here
tomorrow