Speaker 1: And hello, Welcome to the Big Podcast. It is Wednesday.
Today is the tenth day of June, Year of Our Lord,
twenty twenty six. My name is Tom Sullivan. And back
to war we go, maybe kind of. No, it's not
going to be some big barrage of military attacks on Iran,
but the President is authorizing some military action. We've got that,
we've got California. Some of the some of the comments
that are being made by Democrats about Bisera and they're
not good. These are democrats. No, they don't like him.
Inflation numbers came out this morning and they're higher, but
it's not as bad as as the headlines suggest. But
let's start with Iran and the war. And we told
you yesterday that an Apache helicopter was shot down over
in the area of the of the Strait of Horn
Moves and landed in the water off of the coast
of Oman. Was picked up by a drone boat, twenty
four foot boat. It's pretty cool remote control. So, I mean,
that story is interesting, but what it did was it
triggered the President to say, that's it, that's it. We're
going to have to go back, and we're going to
have We're going to have to respond to this, and
so we did last night. There were a number of
they shot at us, We shot at them, They shot
into a bahrain, So, to put it bluntly, we are
doing some firing at them, but not it's very strategic
on very particular targets that have been unleashed, but it's
not the big attack that we did when this whole
thing started back on February twenty eighth. Let me play
for you some of the things that the President has
said he's been holding. I mean, he holds these powwows
in the Oval Office with the media and a lot
of them. So I want to get some of those.
But I also want to get Brett mcgirkin here, who
has been very involved in negotiating with the Middle Eastern
countries for prior for prior presidents. So let's see what
he says about what the latest is on kinetic action
between the US and Iran.
Speaker 2: I think, as I've been looking this, a deal is
not I don't think a deal is eminent. I've been
watching very closely on baths is. In my experience of
negotiating with Iranians, they don't seem to be ready to
do a deal, at least on the terms that President
Trump has been talking about. And in the last week
in the Gulf and in the straight up her moves,
you've had repeated incidents of Iran attacking ships, attacking Kuwait, Bahrain,
and then of course is very serious incident against our
pastre helicopter. We're so fortunate that the pilot and the
airmen are safe, which looks like it could have been
a deliberate attack. I mean that tells you where the
decision makers in Iran, the Revolutionary Guard, where they are.
They are not in deal making mode. Perhaps Abas Sarachi,
the President Pajeskian, they might be in a different place.
But the people hold power in Tehran as I see it,
they are not ready for a deal, and they're preparing
for renewed conflict. It's what I see Iran doing. And
I'll get to the options because I what Iran does
to collapse the power equation, which were the far more
powerful country. They focus on poession, taking something that we want.
That's why they've used hostages for so many years. And
now this is like the ultimate hostage negotiation because they
have the straight up for Moose. They have it, they
know we want it, and they'll set the price and
then they'll sit. That's what I think, that's their negotiating tactic.
That's what I see them doing. So what are the
options for the US. We can concede to their demands.
Their demands are massive upfront relief of funds about twenty
four billion dollars, that's one, and to concede to Iran's
sovereign control of the straight up for Moose. They want
us to kind of recognize that, and unless you can
fudge that, there's not going to be a path. The
second options, you just sit. That means that we keep
our blockade. Economic pressure compounds inside Iran, but also the
global macroeconomic pressure compounds, so that that's kind of the
default option. The third option of fight is SYCOM could
do an operation to try to seize control of the strait. Now,
what's happening behind the scenes, and the President alluded to
it today, is that ships are at night, they're turning
off their transponders and kind of hugging the coast, and
US military assets are protecting those ships. That's what I
think that Apache helicopter is doing, and Iran is trying
to target those ships that's kind of the nightly activity
in the Strait. So that's kind of where things sit now.
I think the best option is probably Option B. Just sit,
keep the pressure on, you know, try to continue with
the diplomacy. But I don't see a near turn path
to a deal, and a deal in which we did
pay that money up front, and if we were to
ever accede to the principle that Iran controls this space,
I think that is just setting conditions for an even
worse possible conflict down the road. It's a very difficult
predicament for us, and maybe we should have thought about
this might be where we would end up. But where
we are we are now, and I think you got
to sit, keep the pressure on, but be ready because
Iran's going to challenge us, and then you got to
hit back.
Speaker 1: I think he's right. I think the Iranians are not
in any mood for any deal, and they are playing us,
They're playing President Trump, and they're just they're just not
going to do anything. They're not going to agree to anything. Meantime,
the President has become now infamous for his it's going
to be just a couple of days. He keeps saying
that here's some examples just within the last twenty four hours, said.
Speaker 3: And now they will have to pay the price. Yeah,
what do you mean by necessariat.
Speaker 4: Well, we're going to be attacking the attacking them very hot.
Speaker 3: Its long.
Speaker 4: Yeah, well, the Eastern the helicopter. I guess we have
the right to do that. I've been working with around
for a number of months and nation with it signed
the NEIL. It's a good deal. It doesn't give them
the right to have a nuclear weapon.
Speaker 1: He says, they have to pay the price. But then
he also talks about well kind of vague about it,
but the fact that he wants to use the military
to some extent limited.
Speaker 4: We have the strongest military anywhere in the world, and
sometimes you'll have to use it. And we have to
remember and when people hear this, Iran very simply cannot
have a nuclear weapon and they won't and they've agreed
to that. All they have to do is they have
to start signing a paper. It's fully negotiated. We have
a fully negotiated But they're tapping and tapping, and I said,
I must give him a couple more days. They're tapping
because it's a meaningful paper. They know when they sign
that paper, it's meaningful. The Obama deal JCPOA one of
the worst, one of the dumbest documents I've ever seen yet.
Speaker 1: So he's still going back to the Obama document. But
he keeps saying that we have the strongest military ever
and up until now hasn't used them. Until last night.
He says he's going to strike again today, which I
don't know. I didn't think you were supposed to telegraph
that sort of stuff, but he did. So we'll see
what he comes up with today. And he keeps talking
about this agreement. It's all laid out and everybody's agreed
to everything. All they got to do is sign it.
Here's the President talking about the fact that we have
total victory.
Speaker 3: We're negotiating now and they.
Speaker 5: Want to make a very good deal. They're willing to
give us everything. They're willing to give us no nuclear weapon.
I think we are winning that battle, but you're really
going to win it over the next two weeks. When
we declare total victory, it'll be a total victory. It'll
happen very soon, and oil prices will come tumbling down.
Speaker 6: We have ongoing negotiations and Iran and with Iran that
hasn't supped, and we could have at least an idea
by one or two days from now. But I think
it's going well. The blockade continues to hold one.
Speaker 1: It's kind of confusing. It's very confusing because he keeps
saying that we've got this deal. But he's been saying
that now thirty seven times over the last forty days,
that we've got this deal and all they got to
do sign it, and they've agreed to everything, and so
far it hasn't produced any results other than Iron keeps
coming after us, and they're still firing at our allies
or at us. The Wall Street Journal raises some eyebrows.
Their reporting is is that they the president, even though
the helicopter was shot down, did not want to do anything.
Wall Street Journal says that the President hadn't been convinced
of the need to retaliate earlier in the day. In
a phone call yesterday with the Wall Street Journal, he
played down the incident, repeatedly saying it wasn't a big
deal and stressed that the pilots were not seriously injured. Apparently,
he changed his mind after Hegseth and the Joint Chairman
Joint Chief Chairman, General Dan Kin recommended military action. At
a military briefing in the White House, haig Zepn Kane
provided Trump with updated information about the drone that struck
the US helicopter. I want asked for comment, The Pentagon
said in his statement it did not discuss internal deliberations.
But the President told the Wallsbridge Journal it wasn't a
big deal. He had to be talked into some sort
of military use. He's really reluctant to use kinetic action.
The latest former high ranking military officer who is still
pushing for using the military Admiral Fozzi Miller. This is
his response.
Speaker 7: What needs to happen is the United States needs to
take control of the escalation ladder. And if you look
at what's just transpired over the last twenty four hours,
the Aranians shootdown in a Pasche helicopter. We respond to
this Iranian aggression. We respond in a very measured, non
escalatory way to make sure that it doesn't impact the ceasefire.
And then we wait for the Iranian response, which we
got and there was missiles into Kuwait, into Bahrain and
into Jordan. So suddenly the Iranians are controlling the escalation ladder.
That's not how we're going to win in negotiation. We
need to have control that escalation ladder. The Iranian regime
needs to understand if they conduct any kinetic strikes anywhere
in the Gulf, that is a broach of the ceasefire
and they'll pay a serious consequence for that. So there
needs to be a cost imposition that they're currently not feeling.
Speaker 1: Yeah, they're not doing it. The part of the strategy
is to use diplomatic pressure, economic pressure, and military pressure,
but we're not doing that. Back to the Admiral, Well, we've.
Speaker 7: Been hearing for the entire length of the ceasefire pieces
at hand that the Iranians are desperate to make a deal.
The deal's coming at any moment. The Iranians are desperate
to stay in power, and that's never going to change.
So if we want that to change, there needs to
be constant pressure on them. That's military pressure, diplomatic pressure,
economic pressure. Anytime we ease off on any of that,
the Iranians are going to see it as a victory.
They're going to see it as an opening, and this
conflict is going to continue on and on.
Speaker 1: I fully agree with them again, you've got to use economic,
diplomatic and military pressure. Otherwise the enemy is not going
to make any changes. They're just going to wait us out.
Speaker 7: Well, the President's been extraordinarily patient thus far, maybe more
patient than many of the rest of us would be
or think that maybe he should be.
Speaker 1: So.
Speaker 7: In his true social posts this morning, he indicated that
the Iranians had missed their opportunity and that they should
stand by. I don't know that we need to go
back to four or five hundred strikes a day, but
certainly we need an active military effort that's aimed at
getting the straight open. So when we talk about bombing
radar sites and other infrastry ructure that's in place in
the Straight of horm Moose, all of that should be gone.
DDE regime's ability to close the Straight of Hormus needs
to be shut down. We need to put that pressure
on them. Eventually, we may need to put more pressure
on them, and that includes lines of communication. How are
they communicating from Tehran down to the strait. How are
they moving weapons around the country, Whether that's interdicting roads
or bridges, that remains to be seen, but all of
those things need to be on the table, and the
regime needs to understand they are in fact on the table.
Speaker 1: Well, I think the regime does understand that they're not
on the table. The President is holding back and saying
so out loud. He's telling the enemy what we won't do.
We won't use our military. So now we're using very limited,
limited military response just because the President said he was
you have to. And what we find out from the
Wall Street Journal was he wasn't willing to even do that.
So let's wait and see what the President has ordered
up for the next round. He says he's going to
do more today, and again I haven't seen anything as
of the moment that we're recording this podcast. As far
as your pocketbook is concerned. Pretty amazing to watch, even
though things are fluttering back up again atage. This average
gas price across the country for the cheap stuff four
dollars fifteen cents. That is down a penny from yesterday.
It's down eleven cents from a week ago. It's down
thirty seven cents a gallon from a month ago. And
the same sort of results are coming from Diesel. Diesel's
now five dollars thirty cents, but that's down from yesterday.
It's down from a week ago, it's down thirty four
cents from a month ago. So gas prices are going lower.
But there is a concern about the fact that we
are going to run out of backup patrol. A number
of countries, there's strategic petroleum reserves, including ours, keep dropping.
We are taking oil out. So let me bring in
David Road, who does reporting on what's going on with
the war with Iran, and he's got a couple things.
First of all, the fact that the ceasefire, of course
is more obviously unraveling. But in addition to that, he
gets into how, well, what the what the guy from
the American Petroleum Institute told us yesterday is that the
world is getting dangerously low on oil and gas reserves,
and if it keeps going that direction, we're going to
have a severe increase in the cost of energy. Here's
David Road.
Speaker 3: Basically, the ceasefire is unraveling. I think we can't.
Speaker 8: You know, we said, well, there was a you know,
a clash in Lebanon and Israel and Uran, we're firing
each other. Now you've got repeated attacks between the US
and Iran. And again there's this this idea of some
called escalation dominance, where one side sort of backs down
and won't escalate back.
Speaker 3: Iran continues to not back down.
Speaker 8: They have escalation dominance over the United States that would
have been unimaginable when this war start on February twenty eighth.
Speaker 3: So they just keep pushing back on what the US does.
Speaker 8: That's what they did by firing in all these countries,
and the US can't stop.
Speaker 3: I talked to military experts.
Speaker 8: Every drone that they fire into Kuwait or the UAE
or Saudi Arabia, they just don't have the kind of
coverage Ukraine has to stop a drone.
Speaker 3: So that's the sort of Achilles heel of the situation
for the US.
Speaker 1: But to the point about energy, oil and gas and
the reserves getting lower, so David touches on not only
the lower reserves, but also we got our inflation numbers
out this morning. I'll get into the details, but they
were the highest we've seen in three years. You're data
absolutely due to the war. There's no other economic dynamic
that's causing this. And you know, even if there's a
truce tomorrow, it's going to take months for all these facilities,
some of them damage, but basically to try to restore
the flow of oil globally. So there's going to be
no drop in oil, and we are approaching and it
keeps shifting. Experts have said we were going to hit this,
you know, a month ago or right now. There is
a more dangerous precipice where the sort of supply of oil.
There's a lot of countries that have used their reserves
at this point. When those are spent, you could have
a very very large increase in cost that could come
within weeks or months. It's not really clear at this point.
So this is going to become more and more of
an issue that the US really needs the straight to reopen.
And you know, the Iranian leaders know that, and they're
keeping track of the world's oil reserves and they know
exactly what's going to happen when those prices start skyrocketing.
That's going to give them one more upper hand as
they control the strait of horror moves unless that's taken
away from them. So let's talk about these inflation numbers, because,
like I said at the beginning of they are high,
but they it's not as bad as the headline. The
inflation numbers, the CPI, the Consumer Price Index, it was
up four point two percent. That is above four percent
for the first time in three years. Inflation is going higher.
But when you look at the parts of the inflation report,
what makes up this inflation, most of it is, as
David Roady was talking about, is from oil. The core inflation.
When you take out food and energy. I know, you
got to eat and you need energy, but when you
look at everything else, the inflation rate is actually okay,
two point nine percent. It's not down to the two
percent that the FED wants. And by the way, the
FED is meeting one week next Tuesday and Wednesday. We'll
get the result of the first meeting that Kevin Warsh
is the head of in one week. But in the meantime,
core inflation is above what they want. But it's not
it's not it's not as bad as the headline rate,
which is four point two percent highest in three years.
When you look at real average hourly earnings, they have
dropped by seven tenths of one percent. That's the biggest
drop in three years. And when we when we say
real average hourly earnings, we're talking about whatever pay increases
you're getting minus the inflation rate, and so they went backwards,
you lost purchasing power. The one tenth of one percent
decline in core goods for such decline since Liberation Day,
that's because of the tariffs, which have been called illegal
by the Supreme Court. And that's why now, without the
tariffs being collected, all of a sudden, the prices for
core goods went down, not lot, but they did not
go up. Another example of how the tariffs have been
not helpful. They have actually hurt our economy. Kelly Richard,
she is with groundwork, she is an economist. Let's listen
to her take on this inflation report.
Speaker 3: Yeah, I think that's right.
Speaker 9: And you know, earlier we were talking about not just
the inflation number, but we also got real wages, and
real wages are negative the last couple of months, and
that's a real speez on families. And I know that
when we're thinking about FED policy, we talk a lot
about core inflation. But Americans are paying that headline inflation number.
They're paying it at the pump when they fill out
their car to get to work. They're paying it in
airfare for their summer travel. They're paying it in food
prices which are also stripped out of core, and so
I think we're seeing American families really squeezed by this inflation.
Their wages aren't keeping pace. The cost of everything is
going up, and that's on top of several years of inflation,
and so this is a really big problem for Americans pocketbooks.
Speaker 1: It's a problem for our pocketbooks, but it's also a
problem she describes for Kevin Warsh and his first meeting
as the FED chairman.
Speaker 9: I think the FED is actually in a really difficult
position here because we were talking earlier about this key
shaped economy, We're now in a situation where about half
of consumer expenditure is actually coming from just the top
ten percent, and that creates really strange inflation dynamics. I
think it's a problem that we tend to think about
inflation only becoming entrenched when it starts to show up
in higher wages, because that top ten percent number is
not primarily being driven by the increases in wages for
the bottom or even the middle class. And so we
have to ask what's really driving that expenditure, that additional demand,
and one of the things is asset price inflation. And
so the FED isn't a position where they're trying to
fine tune the macroeconomy to keep the unemployment rate low
and keep inflation low. But having lower interest rates would
help typical Americans afford car loans and credit card debt
and mortgage interest, but it also drives up asset prices,
which increases the wealth of the wealthiest and increases their
ability to spend. And so it's a really tough position.
And when you add onto that the sort of chaos
created by tariff policy, by the war in the Middle East,
we're really seeing a really difficult situation for American families.
Speaker 1: So did you hear what she pointed out? Tariffs and
the war, those are the two culprits that are driving
the cost up for American families. But she's also talking
about the fact that you hear what she said, fifty
percent of the purchases of goods are by ten percent
the top ten percent of people in the cony. So
what about the other ninety percent? How are they doing?
The top ten percent are out there spending wonderfully and
they're driving the economy along, but it's a lot worse
than that for the for the ninety percent that are
not out there making the purchases that she's talking about.
So again next Wednesday, a week from today, we'll get
the first results in what the Fed will do. Will
they drop interestrates? She's betting they won't because it will
drive asset prices up. It'll make it cheaper for you
to get a car loan or whatever. But she's not
the only one. Most people are saying next week. It
looks like Richard Fisher, former Dallas FED president. He came
out today too and said if he was on the
Fed today, he would vote for just not raising, not
lowering interest ratess holding. So that's the early prediction for
next week. There was I told you the President keep
holding these powwows for the media in the Oval office,
and one of the reporters today asked him about this
inflation report and said, what do you think? And it
was the weirdest answer because he said he loves inflation
and then got distracted and went off on something else. Here.
Let me play it for you, well, you can serve.
Speaker 2: Us to president about the latest inflation number which came
out this morning.
Speaker 5: Could that be it?
Speaker 4: No? I love it the numbers.
Speaker 1: Ready, you know what I really lost.
Speaker 4: I love the inflation.
Speaker 3: You know why because as soon as this war was over.
Speaker 4: You know, I can say it now something it innut.
Speaker 3: You know, we've been taking out.
Speaker 4: Millions of barrels of oil. Nobody knows that, you know,
who doesn't know about it Iran until right now.
Speaker 1: So it was an extremely confusing answer. They said, what
do you think about the inflation rate? And he said,
I love inflation. I think it's great. You know why,
because well, I haven't been able to say this, and
I've been chomping at the bit to be able to
But we are now pushing out millions of barrels of
oil at in the middle of the night from the
Strait of Horror Moves, and apparently there's been I don't
know why he disclosed it. He says, nobody knew about it,
and I Ron didn't know about it until now. But
he's been chomping at the bit to say something about
the fact that we are in the middle of the
night helping ships turn off their transponders and helped them
come out somehow through the port through the Strait of
Horror Moves, and those ships are out bringing oil to
wherever they're going to be bringing oil. But it was
a I don't know, he was talking about inflation and
how he loves inflation. Then got into the moving of
oil out of the strait of horm moves and no,
everybody just kind of scratched their head and went on,
I know it was kind of hard to hear, but
that's what he said he loves. He repeated it, I
love inflation. Talk about California. I said yesterday the whole
thing about, oh my gosh, the election was rigged in
California because Spencer Platt did not get into the top
two runoff positions for the mayor of Los Angeles. And
I told you yesterday that doesn't surprise me because the
number of Republicans registered voters in Los Angeles that are
Republicans fifteen percent. So I don't know how even if
he picked up double that, he still wasn't going to
be able to get enough to be able to be
in the top two. So I looked at it and said,
I thought that if he was in the top two,
I think it would have been rigged, because that's almost
impossible for a Republican to get elected to a citywide
office in Los Angeles, but for the state of California.
Steve Hilton officially now number two behind Javier Besserra, but
they're right on top of each other. It's just less
than a percent, I believe, between number one and number two.
The thing about Besserah is he is not liked by
Democrats and he was the Secretary of Health and Human
Services in the Biden administration. But that was during COVID.
Did you see one news conference, did you see one publication?
Did you see one announcement from Besserah's offices? The head
of Health and Human Services during COVID at its peak,
you never saw him, You never heard from him. He
apparently just went to his office and kept his head down.
So if he's elected governor of California, he's not going
to do anything. Maybe people will vote for him because
he's just going to be a quiet placeholder sitting in Sacramento.
But it's fascinating. I mean, let me play a couple
of things for you. Here. This is a woman, so
she'llus I believe it's the way pronounce her name. He's
a Joe. She is uh was in the in the
Biden administration. She's a big Democrat spokeswoman, and she was
on one of the CNN shows the other night and
was blasting Bessarah as ineffective.
Speaker 10: Whoever is going to be governor will have to stand
up to Donald Trump? Can I tell you, after working
in Joe Biden's administration, I do not trust have you ever.
Speaker 3: Set up to do that? Can I? Can I just
say WHOA, I don't trust.
Speaker 10: That he would be able to do that because and
that is the feeling I'll.
Speaker 3: Be able to stand up to Trump.
Speaker 10: I don't think they can be able to stand up
to drop end lead. And the reason why stake before
she gets I can I ask you why? Because when
I saw him in the administration, and I think a
lot of people didn't that. It's it's people understand this.
It's he was not effective in governmenting. And I think
that a lot of people in the Biden administration are
talking about this because they realized that he was not
an effective HHS secretary. And if you ask any cabinet secretary,
they would tell you the same thing. And so I
think that there is a I think people recognize this,
and I think this is why Tom Steyer has gone
to the top.
Speaker 1: Okay that was from I guess a week or so ago,
and Tom Steyer was at the top at one point.
But that was a panel of a bunch of Democrats,
and the Democrats were going, whoa, whoa, whoa, What are
the times? She says, I was there, I was in
the Biden administration. You ask any cabinet member that he
was the dead would he was absolutely ineffective. Not only that,
but Susan Rice, who is very powerful Democrat and in
a lot of administration. She been reported today that Susan Rice,
who served as President Biden's domestic policy advisor, privately criticized
Besserah from her time in the administration, and subsequent books
revealed the following about her relationship with him. Rice privately
called Besserah an idiot and used derogatory language regarding his
handling of the migrant crisis at the southern border. They
clashed also in twenty twenty one over the processing of
unaccompanied migrant children, when Rice pressed Besera to loosen rules
to create more bedspace. Besera demanded a written order from
the president. Rice sharply shot this down, stating that that
was not how the president operated. She was number two
in the administration, and so during a tense meeting where
President Biden vented his frustration at Passera. Biden didn't like
him either. Rice reportedly he passed a note to Homeland
Security Secretary Alejandro Majorcus that said, don't help him, don't
save him. So she has no use. There's apparently a
number of Democrats that are biding their lip, going, oh
my gosh, is he is he being? Is he failing
up to become the governor of California? So all this
has to come out. But still California is twice as
many Democrats as Republicans. So it's up up uphill battle
for Steve Hilton. But if they start finding out that
Pisera is a dud, will they vote for him? Will
they go party over getting somebody who can fix the
state of Californy, Because I think most people in California
just want the mess that's been created there to be fixed,
all right, So speaking the message, we had a real
mess on on Wall Street today. I've listened. Let's what
have we talked about? Talked about inflation at a four
year high, even though it was most oil, and that's
being caused by the war, and the war is being escalated.
The President said he would hit Iran hard today. So
Wall Street said Okay, you just go ahead and do that.
We're just going to check out here. So down she went,
almost to Kazoo Territory. The down nine hundred and fifty three,
back below fifty thousand, closed at forty nine thousand and
nine eighteen, the S and P down one hundred nineteen,
the Nasdaq down five hundred and nine. The price of
gold fell one hundred eighty seven, down to four thousand
and ninety nine, barely hanging on to a four. And
oil prices, of course, they went higher by just about
three dollars ninety one dollars for a barrel of oil.
So that's it for today. Thank you for coming by.
We will be back again tomorrow and I hope to
see you then