Liberation Day 2.0 Is Here — When Will We See the Tariff Fallout?

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Today's number 70.

That's the percentage decrease in time young people spend attending or or throwing parties today compared to 20 years ago.

Ed, the truth is when I was 19, I was nothing more than a sad virgin.

And now, last month, I turned 60.

Ed, how are you?

I'm doing well, Scott.

Where are you?

I am at my second home.

You look like you're in a hotel.

So let me just get, can I just guess guess what your second home is i assume this is like a regular are you at the beverly hills hotel it's so rewarding when it's obvious you're investing in our relationship yes i'm at the beverly hills hotel so you're in la oh that's right you're you're there for the for the thumb light the read i'm going into the writer's room today not that i even know what that means uh with uh for the for the netflix show and then i'm having dinner with my

Showrunner, who's this really thoughtful, talented, nice man at San Vicente Bungalows, which I'm super excited about.

I'm hoping I get some cred walking through with him.

It'll be like walking in with a super hot woman.

He's the equivalent of a super hot woman in L.A.

in New York.

The producers falling over him.

Well, everyone's going to be like, ooh,

who's that old professor that's with, his name's Scott Burns.

He's a really lovely guy.

Anyway, so I'm excited to be here, and it's spectacularly beautiful.

It's just, oh, wow.

I would live in L.A.

if it wasn't so far from everything.

I've got a question for you.

What do you do about, because you're just traveling all the time.

What do you do about clothes?

Because you've been away for maybe like a month what are you doing to be blunt money solves all problems okay okay new wardrobe for each locale yesterday i called a woman i know at the james purr store here and i said can you send me three new t-shirts and

and a couple pairs of cool shorts so glad i asked this question yeah it's just uh so yeah i buy shit on the road i and it's important as you're on the road to like throw stuff off and keep cycling i mean look at me now look i'm in a i'm in it helps when you dress like an aging skateboarder because you can kind of throw on anything and it just fits your brand.

This is very interesting to hear because

I think it's great how much you travel and it sounds pretty fun and exciting.

But the one thing I'm not jealous of you at all about is the routine,

just the lack of routine and the fact that you have to keep on packing and getting all these clothes ready.

I mean, I depend on having my routine.

That's sort of what keeps me sane.

Yeah, but there's, I mean, just there's a big difference.

When I was your age, I'd started my first company, Profit.

And I'm not exaggerating.

Audi would say, hey, we've heard of your firm and we'd like you to come talk to us at a meeting.

And they'd be like, can you get here?

And I'm like, sure.

Travel then,

I think travel took 10 years off my life.

Alcohol is right up there.

Alcohol and travel just took a lot because you eat like shit.

If you're working hard and trying to build a company, you take red eyes.

But now when I travel,

I travel really well.

I stay at beautiful places.

I show up a day early.

I leave a day late.

Showing up a a day early,

that is a good innovation there.

I make a conscious effort to maintain friendship.

So I'll go out.

By the way, if Sam Harris is listening to this,

I meant to reach out and see if you're busy for dinner Friday night.

And that's my way of name-dropping.

So Sam, if you're in town, I'd like to see you.

Let me know if he reaches out.

I want to know if Sam Harris listens to this podcast.

Oh, Sam digs me.

Sam is like, I think he sees me as his.

He digs you, but does he dig me?

That's what I'm wondering.

He sees me.

as his younger brother, even though I'm much older than him.

He's been raising me through my 50s.

But the bummer is in LA.

i'm usually with my friend mike baruch who's in a like a 40 year arrested adolescence phase which you can do really well in la

and he'll dial me in immediately to like great parties and he's not here so it's basically me down at the at the diner polo lounge bar but i did meet a nice ukrainian woman who took a special interest in me found me just charming just charming ed um Anyways, that's what I'm doing today.

But I mean,

it is spectacularly beautiful here today.

It is just

gorgeous.

What are you doing?

You can't match that?

I'm recording.

I don't think I can match that.

I think I'm recording podcasts.

Let's see.

Yesterday I recorded podcasts, recording some podcasts today.

Tomorrow I'm going to record some podcasts.

And I'm going to go on TV.

Oh, you know what?

I'm going on TV this weekend.

That'll be fun.

Well, let me guess with someone named something that rhymes with Katie Tour and MSNBC.

Actually, not Katie Tour this time.

We're going with Catherine Rampel.

Oh, I love Catherine Rampel.

I think she's a great talent i think you and her

um i think you and her will be a really good mix but msnbc by having you on is trying to reduce their average age diversify well they're trying to reduce their average age from 70 to 69 and 15 16

of viewership you'll you'll literally bring in their 11th viewer under the age of 40 in 20 years can't wait to shift to uh tv from podcasts because that's what you're kind of encouraging me to do right especially ad-supported cable news there's a big future in that That's absolutely where you want to allocate your capital.

But more behind the music here, I got a call from Catherine, who is both our, both of our boss.

And she's like, I'm worried about Ed and Claire.

Claire, by the way, is like the substance behind all of this Joey Bagadonitz operation.

That's exactly right.

And she said,

since markets went daily, by the way, you guys are killing it.

And she said, I'm worried about these guys.

I think they're going to get burnt out.

I'm like, that's what you're supposed to do in your 20s.

You're supposed to get burnt out and hate your job and hate your life.

I'm like, they're exactly where they should be.

Do you feel burnt out?

Let's, I'm being serious.

Do you feel burnt out right now?

Not at all.

Full of life.

Yeah, I think you're lying to me.

I think you're lying to me.

No,

I'm loving it.

I'm loving it.

So long as things are going well, which they are.

As soon as things start to fall off a cliff, that's when I'll start to really feel the burnout.

80% of our viewers are under the age are in the quote-unquote core demographic.

You're getting more people in the core demographic who are stupid and buy high margin products or advertisers love them than I would say every CNBC but MSNBC show, except for maybe two or three.

So, yeah, you're doing you're doing well.

And as I said to you, if you continue this good, good work, I'm going to be able to buy my second Ferrari.

So, number two.

I'm very excited about this.

Anyways, as you can tell, I'm over caffeinated.

Should we get to the headlines?

Yeah, let's get into our episode longest,

longest banter section of all time.

But you know what?

It's been a while.

It's been a while.

So, I forgive us.

Good.

Now is the time to buy.

I hope you have plenty of the wherewithal.

Trump has launched a new wave of tariffs.

So here's what we know so far.

Last week, he extended his tariff pause from July 9th to August 1st, citing slow progress on trade negotiations.

He followed that announcement with a barrage of letters posted to social media, laying out a fresh round of tariff threats, including a 50% tariff on copper imports.

Late Thursday night, Trump also announced a 35% tariff on Canadian goods, claiming that they had, quote, financially retaliated to earlier levies.

Additionally, he floated the idea of 15 to 20% blanket tariffs.

In total, Trump has notified at least 23 countries that their exports will face tariffs of up to 50% unless they strike new trade deals with the US.

So, Scott, let's just go through some of the tariffs here.

We've got 25% on Japan, 25% on South Korea, 30%

on South Africa.

We've got 35%

on Canada, 50% on Brazil.

A ton of tariffs this week.

And then, of course, we also got that 50% tariff on copper.

So we haven't really gotten your tariff take yet.

So let's just hear your reactions to what has been going on in terms of tariffs this week.

So

When I was growing up, I can literally remember a sum total of three vacations.

One,

my dad and his third wife took me to Hawaii because he got some gold circle.

Like he sold more shit, literally shit.

My dad sold fertilizer for Ram Scott than anyone in the West Coast.

So as a reward, he got to bring his family.

to Maui where he disappeared and played golf, 36 holes of golf, and I hung out at a resort.

And that is the closest my dad has ever come to violence as against me because I'd never had, and we talked about this, I had never seen something called a mini bar before.

And it was full of amazing drinks and food.

And I decided one night that I should try everything.

So I just opened every bottle and took a sip, unwrapped everything and took a bite.

And when my dad walked in and saw that everything in the mini bar had been sampled, I'd never seen him that enraged.

So that was vacation number one.

Vacation number two

was

my mom's boyfriend took us to La Paz and it was amazing.

He had a boat.

And I went deep sea fishing and he had like a plane, not a jet, but a prop plane.

I'm like, oh my God, this is the most impressive man ever.

Unfortunately, he had a family in Arizona and failed to tell my mom that.

So that relationship ended.

And then my third vacation that I remember was my mom took me to Niagara Falls to visit a friend of hers.

And we stayed at this camp that had these little cabins.

And it was a ton of fun because I think it was like 14 or 15 because there was a bunch of kids there.

And I met this girl from Alberta and we spent some time together.

So as soon as I got back to high school, I told everyone that I had a really hot Canadian girlfriend.

My hot Canadian girlfriend was much more real than these tariffs.

I mean, he announces 20 and 25 percent tariffs against Japan and Korea, and their markets go up because deep in the weeds of these tariffs, they all said, Oh, by the way, we're excluding X, Y, and Z products.

And they calculated that the actual tariff increase, if this goes through, which it won't, was from 15.6 to 16.6%.

And this guy is literally, no one, the markets and countries no longer take this guy seriously

and the markets have yawned uh basically they've done a sum total of two kind of non-deal deals with vietnam and the uk which aren't even deals they're agreements to discuss a new construct they're not deals we need to be really rigid i think about have the deals happen it's not a deal it's these are letters that are being posted online that's not a deal you have to sign something you have to have something actually agreed upon that changes things.

And we don't have that yet.

So I just want to say that because I just want to be very careful with tracking the deals because we're going to see all these deals this year and this week.

We haven't seen any.

To just go more meta, NVIDIA hit, for the first time, hit $4 trillion in market cap.

First company to hit $4 trillion.

An incredible, an incredible feat.

And let's look at a great American company, NVIDIA.

By the way, started by a guy who's a Taiwanese immigrant who went to Oregon State or the University of Oregon.

I can't forget, forget, I forget which one.

Oregon State.

Oregon State.

And then to,

is that the Beavers or the Ducks, bitch?

Which is it?

Which is it?

Beavers or Ducks?

Do you know?

I'm going to go Beavers.

Is that right?

Oregon State is the Beavers, yeah.

Let's go.

Nice.

Yeah, Oregon's the Ducks.

By the way, both great universities.

Pact Town University is Rhode Island, both of them.

Anyway.

Okay, so we have, let's take another amazing European company.

Let's take Mercedes.

Amazing products.

$100,000 Mercedes that comes into the U.S.

I'm making a point about global trade here and how it has massively accreted benefits to the U.S.

disproportionately versus other nations who Trump believes have taken advantage of us.

Say they sell $100,000 S-Class into the U.S.

The operating margins on Mercedes are about 10%.

So they get about $10,000 in operating profit.

They traded a multiple on EBITDA, I think, of about eight.

So it creates $80,000 in stakeholder value for a great German company that's spread across investors, employees, in the community in Germany, and obviously their global network.

When we sell $100,000 worth of NVIDIA chips,

NVIDIA has 60 points of operating margin.

So we get $60,000 to the bottom line.

It trades now at a PE of about 40.

So we get $2.4 million.

They get $80,000 in stakeholder value.

We get $2.4 million.

And we are fucking with that relationship.

I mean, it is just, we've decided, okay,

we're threatening a construct and relationships here that we disproportionately benefit from.

And on every metric of prosperity, with the exception of some unemployment in certain sectors that have been hit hard in the U.S.,

global trade has been nothing but accretes disproportionate advantage to the higher margin, more innovative, more IP-driven nation that is the U.S.

So what's going to happen here?

You know what's going to happen here.

A bunch of empty threats, a bunch of extended deadlines, and we're about to go into what I call the ultimate jazz hands phase.

And that is you'll have Scott Besant go on CNBC and announce a breakthrough trade agreement with Paraguay, who someone will do the announcement, the analysis and go, okay, they've agreed to sell us cop or talk to us about copper imports.

And they'll announce that that's a big, a big victory.

In the remnant of this,

the real

outcome here is that this will inspire massive dealmaking.

I'll give Trump that.

Unfortunately, the massive deal making is being made between countries that aren't the U.S.

to reroute their supply chain and relationships around us.

And likely involve China.

I just want to go back to the market reactions there.

You're saying he's not going to go through with this, which you might be right.

I just want to present a different possibility.

Sure.

As you said, we barely saw a reaction from the markets last week.

I mean, we saw the increase in copper.

but aside from that, so it seems like the market takes the copper tariff seriously.

Aside from that, the major indices, they barely reacted.

They kind of retreated a little bit and then they ripped back up.

And then the NASDAQ goes and hits a record high, all in the same week of announcing these insane tariffs that, if they were to go through, should have a seriously significant impact on American corporations.

So, in other words, the taco trade was hard at work this week.

Okay,

there might be an interesting dynamic here where that taco trade actually backfires because you remember the reason that Trump rescinded all of these insane tariff policies is because of how the market reacted.

Liberation Day happened.

The stock market tanked.

Bond markets went into turmoil.

And then he suddenly rescinded all of the tariffs.

And he said, oh, this was my independent decision.

We all know the reason he rescinded is because the markets went crazy.

He got freaked out.

That was when he chickened out.

That was where taco really came from.

But now that the taco trade is so systemic to the markets, it's almost like we've lost the adult in the room.

The markets aren't reacting to the crazy tariff policies, which might actually embolden him to think, oh, this is okay.

I'm going to go through with it now because the markets agree with me.

The markets are fine.

So,

what do you think of that possibility that actually the taco trade backfires because we don't see any reaction?

He says, okay, the tariffs are fine.

And he plows ahead and he goes through with it.

Okay, so let's talk specifically about whether this shit's going to go through.

Trade agreements take on average 18 months to hammer out.

They just don't call the bad phone in at Mar-a-Lago and go 17%.

He goes, no, come down for golf.

I want 19%.

And they settle at 18% and he thinks he's gotten a deal.

It doesn't work that way.

They are so fucking complicated and involve so much nuance around enforcement and what qualifies for a tariff industry.

So on average, they take 18 months just to hammer out.

And then beyond that, they take 48 months to implement.

Because how do you even track and identify what's supposed to be tariff?

How do you notify your border operations?

And how do you even figure out, remember how the United States Postal Service basically called the president and said, if you want to implement immediate taxation on Shein and Timu, you got to delay it because we don't even know how to do this right now.

So what's going to happen in less than,

I don't know what it is now,

15 or 13 months?

We're going to, I believe, have a democratically controlled Congress.

And a lot of the shit he's doing is illegal.

It's Congress that is supposed to ratify or amend trade agreements, which we have agreed to sign these global trade agreements where the president can unilaterally change them.

So what do we have?

Based on what we know, based on movements you've seen, so no one's taking him seriously anymore, except the copper market took him seriously.

So where potentially is the alpha here right now, Ed?

I'm not sure.

I'm not sure where you're headed.

Copper markets spiked.

The price of copper skyrocketed.

What's the trade right now?

You want to go short copper?

Is that where you're headed?

100%.

If every piece of data so far around one,

this guy is all bark, no bite, and is playing with a hand that he doesn't even control.

He doesn't even, I'm not even saying he doesn't have a good hand.

I'm saying he doesn't even have the fucking cards.

He can't,

even if people agree to these agreements, I'm not sure he's going to be able to ram them through or get them through in time before a democratically controlled Congress goes, bitch, you're not even allowed to do this without congressional approval.

Every market is slowly but surely learning this is all jazz hands.

The copper market freaked out and spiked.

So the trade is to go short copper right now.

And here's, we'll just make this prediction for fun and we should see what the price is.

Copper will be down again in the next week as people realize when they look at the mechanism of these tariffs and how to enforce them, they realize this guy is neutered.

He is so flaccid.

He's literally, what is he?

He's a, he's your drunk uncle at the family barbecue without a shirt on, trying to show off practicing karate moves and threatening to kick people's ass.

And all the family have decided to start a WhatsApp group and not include him.

And they're talking to each other.

Every nation is

talking to each other and doing deals.

And they're just saying, wow, uncle fucking crazy.

That's really cool.

Can you show us that movie?

Well, you got your purple belt?

Wow.

Can you show us that move again?

And then they all look at each other and say, all right, let's talk about getting actual deals done.

The two remnant things here that come out of this bullshit will be one, a huge erosion in our credibility.

Some inflation, because a lot of these nations will decide not to trade with us, which will take our inflation up.

And two, you are going to see a flurry of global deals inspired by the crazy uncle.

It's hard to understand where we are in terms of tariffs right now, but where we are right now is basically 10% reciprocals on kind of everyone.

And that exists right now.

Yes, there is a possibility, as you say, that it could be rescinded at some point.

We have these lawsuits that are happening saying that Trump isn't even allowed to do this.

And, you know, maybe when we

get to the midterms, everything will start being rescinded.

But that's where we're at right now.

We've got the 25% on the steel and aluminum.

And then

supposedly on August 1st,

all of those numbers, that 10% is going to spike up

in the 20s, 30s, and 40s for most of these nations.

Let's say six months from now.

Where do you think the tariffs are?

Are we at zero?

Are we at 10?

Or are we at like Liberation Day 20, 30, 40?

Look at what it is now.

10.

There have been really talented people in our Commerce Department and our State Department that have figured out these deals over years, some of which, by the way, are bad.

We have an asymmetric trade relationship with China.

They steal our IP and then they sell ship back to us for less money.

And it has gutted many U.S.

industries.

It is unfair.

It is stupid.

He was right to put on those tariffs.

And not only did Biden keep those tariffs, he increased them.

President Trump deserves some some credit for recognizing and calling out the asymmetric trade relationship with China.

But if he was serious about bringing that asymmetry in line, he would have partnered with other nations to present a united front against China.

But to believe that every nation in the world has taken advantage of us does not mean a total naivete and ignorance of the benefits we have accreted from global trade.

And also,

he's acting as if he can just sort of show up and say,

I'd love to bring this back to me.

I show up to the board at Gateway Computer and say, we need to sell the company tomorrow.

I'm smarter than you.

Here's why we need to sell it.

They listen patiently and they go, Scott, we've been trying to sell the company for two years.

And we also have certain bond covenants.

Great analogy.

If we sell the company and we sell the company, there's a change of control, this incredible debt we have goes from 4% to 10%, which has effectively created a poison pill where we can't be acquired.

You know, I swoop in like a fucking hero thinking that because I'm the largest shareholder, I'm now in charge and can dictate terms without actually looking at how this business operates.

And he has brought in a bunch of business people who haven't taken the time to understand this is how global trade and tariffs and trade agreements actually work.

Because here's the thing: it's really boring and hard work and requires talented, thoughtful people who decide that they don't want to be a managing director at Allen and Company or at JPMorgan, and they want to serve their country and they're willing to spend two years doing ridiculously hard, boring work figuring out a trade relationship with Ecuador.

He thinks he can just kind of come in with a magic wand and say, oh, have Scott Bassent go on CNBC and say, 90 deals in 90 days.

Okay, good luck with that.

Good luck with that.

And by the way, Ed, my Canadian girlfriend is so hot.

Oh my God.

Wait till you guys meet her.

Wait till you guys meet her.

That highlights what is kind of amazing about what is happening right now with his tariff policy, which is he thinks that going in and being the strong man and just stiff arming all these people.

I mean,

it's not that...

It's not that the problem with doing that isn't that it's like mean and that we don't like that he's being a jerk to everyone.

That's a different problem.

The real problem is, and that what we're seeing right now, it doesn't work.

Like he's trying to do the whole strongman thing and he's literally gotten nothing done nothing he's only put put up these 10 tariffs which is just going to shave away uh revenues for for for americans i mean we're the ones who are paying paying that tax we have zero deals he thinks he's being this great negotiator he's got nothing done so i mean that that's what's pretty i find kind of remarkable about what we're witnessing right now in terms of this policy and the fact that he keeps on extending it like he's he's actually a terrible negotiator, is what we're seeing.

I'm serious now.

I'm really serious.

Okay, we'll extend it another 30 days, but this is it.

This is it.

We'll be right back after the break with a look at the push to make America healthy again.

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Vivimos paralleled a lugar in the play con alberca cascada tina y una regader encreible.

Expedia, Vivimos para bijar.

There is a lot to talk about when we talk about Donald Trump and Jimmy Kimmel.

One big question I've got is: why in 2025 are late night TV shows like Jimmy Kimmel's show still on TV?

Even in our diminished times, Jimmy Kimmel, Stephen Colbert, they're just some of the biggest faces of their networks.

If you start taking the biggest faces off your networks, you might save some nickels and dimes.

But what are you even anymore?

What even is your brand anymore?

I'm Peter Kafka, the host of Channels.

And that was James Ponowosek, the TV critic for the New York Times.

And this week we're talking about Trump and Kimmel, free speech, and a TV format that's remained surprisingly durable for now.

That's this week on Channels, wherever you get your favorite podcasts.

We're back with Prof G Markets.

There is a growing push for health and wellness sweeping across the country, and consumers, corporations, and the government are all getting on board.

Starbucks just announced it is switching from canola oil to avocado oil, snack sales are down, alcohol consumption is falling, and RFK Jr.

is leaning into the movement with his Make America Healthy Again campaign, which takes aim at everything from processed foods to artificial food dyes.

So it is clear that Americans are thinking more about their health.

And Scott, I just want to start here with some key data that sort of prompted us to want to cover this story.

This is from Nielsen IQ.

It just came out this week.

You look at total...

This is tracking total sales at checkout across the country.

Total salty snack sales over the past year have declined 1.2%.

Total chocolate candy sales have declined 6%.

Sweet treat sales have declined 6.1%.

We are also seeing alcohol sales in decline.

Constellation brands, they just saw a 14% drop in their sales in wines and spirits.

Let's look at the stock performance of all of these snack companies, these food companies.

JM Smucker, year to date, down 5%.

Hershey, down 11%.

PepsiCo, down 17%,

Campbell's down 33%.

So basically, what we are seeing is the junk food industry is in structural decline.

And it's not just the stocks.

I mean, clearly, people are less bullish on big snack stocks than they used to be, but it's the fundamentals too.

What we are seeing across the country is people are eating less bad food,

which makes a lot of sense when you see what's happening in terms of GLP1s.

And then also, as I mentioned, in terms of just this general interest in the Maha campaign, Make America Healthy Again.

So

a lot to get into there, but Scott, just your initial reactions to what is happening to junk food.

Well, so let's take a victory lap.

I think it was two years ago when we were making our doing our predictions deck and we talked about, we said that the most seminal technology wasn't AI, it was glp1

i think this is going to have all sorts of impact and the diabetes or the obesity economy is 1.7 trillion dollars it's i mean

what is that that's like eight percent of the economy and if you look at mcdonald's pepsi code general foods if you look at coca-cola They're literally obesity indices.

As obesity has gone from 30% to 40%, as morbid obesity has gone from 5% to 10%

in the last 10 years.

These companies' stocks are up 7, 10, 20 fold.

And when you see a decline in obesity and morbid obesity, I think you're going to see the same type of deceleration in these stock prices.

I don't think we've even scratched the surface in terms of companies that are

kidney dialysis companies, medical equipment manufacturers.

I think it's just going to be enormous and there's going to be all sorts of benefits and weirdness in we're going to see from these drugs, tech of the the year, GLP1 drugs.

I think the biggest thing we could do to bring down cost, death, disease and disability in the United States would be two things.

One,

figure out a way to put more money in the pockets of the lowest quartile of households, whether it's for universal child care,

increased food stamps, Medicare.

If you want America to be healthier again, give them the ability not to have a second job.

Give them the ability to eat well, figure out where there are food deserts, create incentives around taxation, around sugary, shitty food and fast food, such that people make better health choices.

And then two, give everyone that needs it access to GLP-1 drugs.

I think these things are just a phenomenon.

And I'm also open to the fact that there's no free lunch and that at some point, you know, we might find that there's some downside.

There isn't a free lunch, right?

But these things do seem to be remarkable.

And if you look at the fact that America, 70% of America is obese or overweight and 40% are actually obese versus 4% in Japan.

And you look at the fact that our

health care costs are $13,000 per person versus 6,500.

I mean,

there's just such a huge opportunity here.

Now, the Make America Healthy,

again,

I like the notion.

I think RFK Jr.

gets some things right.

Our industrial food complex is not there to make us healthier.

It's there to make, you know, to get people addicted to sugary, shitty, fatty food so they can hand them over to the diabetes industrial complex.

And they spend $10,000 to $20,000 a year on statins, dialysis, and knee and hip replacements.

So there is, he does get that right.

What he gets wrong is this notion that somehow vaccines or you shouldn't trust the experts or it's all about certain oils or certain dyes.

No,

that's not the problem.

If you are really serious about health, more money in the pockets of people who don't have money to be healthy.

And two, I think universal distribution of GLP-1 drugs would be an absolute game changer for us.

And I just hope, I think you're going to see a direct correlation between the decline in costs of GLP-1 drugs and accessibility and a longer term, and this is what the government's supposed to do over the next one, two, three decades, and healthcare costs based on the penetration of GLP-1 drugs and things like

better free lunch and more nutritional incentives and education amongst young people.

But the Maha movement is,

it's sort of like, let's set up conspiracy theory.

Let's create a bunch of influencers talking about how this oil is bad for you and you can buy, you know, I don't know if you've seen these TikTokers, these housewives going into Home Depot saying, finding some sort of wax or all over my social media.

Saying, this is in your food right now.

And it's like, well, you're, you're, A, the only thing I know about you is you clearly aren't a doctor or don't know what you're talking about.

You're trying to scare people.

And at the end of this ad, you're going to try and sell me something stupid.

So, and by the way, we're not going to make good decisions on Make America Healthy Again by firing anyone who has a degree or expertise.

One of the scariest things that RFK Jr.

said is we need to stop trusting the experts.

Okay, boss.

So get your mechanic to do your heart transplant.

Of course we want to trust experts here.

So I find the Maha movement more about conspiracy and creating fear where there doesn't need to be any and also,

again, allocating capital to the wrong things that won't move the needle.

It's definitely born out of an anti-expert class feeling.

And I think that's why it's become so politicized for no real reason at all.

Like, why on earth is canola oil and seed oil?

Why is that a political subject right now?

It's kind of ridiculous.

But, I mean, irrespective of the politics, I think that there are two main ways that the junk food industry is under attack right now.

And the first is GLP-1s, just some data.

More than 4% of the nation is using GLP-1 drugs today.

The usage rate has increased 600% in the past six years.

One study found that GLP-1s have already caused U.S.

grocery volume losses of 3%.

And households with at least one GLP-1 user cut their grocery spending by approximately 5%

in the first six months of starting medication.

So that's the one thing that the junk food industry has to deal with is suddenly there's this drug where

it means

you don't want to eat junk food anymore.

And that's a problem.

The second is the Make America Healthy Again thing.

And the reality is

artificial food dyes and processed foods and seed oils, et cetera, et cetera, they are under attack by the government.

So, you know, you look at Pepsi, for example, 40% of their products use artificial food dyes.

So now these companies kind of need to scramble to get rid of those products.

General Mills, Craft Heinz, they're trying to get rid of artificial food dyes.

Starbucks is getting rid of canola oil.

As I said, that they're replacing with avocado oil.

That is the reality of the junk food industry right now.

Now, the question that I would pose to you:

you've been a consultant, you've been an activist.

If you were speaking with, let's say, the board of Pepsi right now,

one,

what do you do about the the business how do you respond to it um and two

what do you do about the comms and this is something i've been very interested in because you know i've been looking at how these junk food companies have been talking about glp ones and their strategy right now is they just don't talk about it Like, you know, you look at JM Smucker's earnings, their most recent earnings call, where,

you know, they own Hostess and GIF.

All of their crappy foods just fell off a cliff and they didn't mention GLP1s once, not a single time in the earnings call, which seems a little crazy.

And then you look at the stock and it's down.

So I guess a two-pronged question.

What do you do about the business if you're in the fast food industry?

And two, how do you talk about this from an investor relations perspective?

So PepsiCo was a client and

they're smart people.

They have been slowly but surely investing in more healthy drinks and food products.

They're not dumb.

They see the future.

You know, they do a lot of work.

But the reality is, Pepsi will go where the puck is.

And what I mean by that is where they can make the most money.

That's their job.

And if it's figuring out a way to encourage fast food restaurants to have a 48-ounce barrel of Pepsi that is more calories than most people eat in three days in emerging nations, they'll go there because their job is to make money.

It's our job to price sugar and wheat and corn and soy to the actual actual outcomes and externalities and to create subsidies around a plant-based diet, which we have not done.

I think the point is they're not making money off of selling the barrels of Coca-Cola to the fast food restaurant anymore.

Oh, they're making, no, no, no, no.

The way I would describe it, they're making a shit ton of money.

It's just not growing.

It's falling is what's happening.

The sales are in decline.

And so...

Yeah, and so

they need to figure out some way to pivot to something else.

And as you point out,

they are pivoting to some healthier products, like they just acquired Poppy, which is that probiotic drink.

And it's funny, when you look at the financials of all of these food companies, it's always a decline in the processed, sugary, bad food.

And then you see a massive growth, a big double-digit percentage increase in the healthier options.

Oftentimes, it's like water or coffee that is growing for these companies.

So there's a possibility that, you know,

they are doing their job of pivoting, but perhaps they should have done it earlier.

Perhaps they should have done it quicker.

And perhaps they should have invested more in this pivot.

Because what is happening right now, those stocks are, they're not just underperforming.

They're literally falling off of a cliff right now.

I mean, the SP is up, what, six, seven percent this year.

You got Campbell's soup down 33%.

Incredible.

I mean,

credit to them for, you know, making the pivot, but I think you could also make the argument like, this is a little bit late.

I think you probably could have gotten to this a little bit earlier, and maybe you should have been taking these GLP-1

innovations a little bit more seriously.

But just as we wrap up here, I just want to

give you some data on just this question of like, what would a healthier America look like?

Because that is...

where we're headed right now.

Just a study here that showed that improving public health could add $3 trillion to the US GDP by 2040.

Corporate profits could rise by 763 billion dollars due to a more productive and a more present workforce up to 5 million fewer people would exit the workforce early due to illness or due to premature death i mean all of the numbers basically say if you make americans healthier if you if their bodies aren't ailed by diabetes and obesity you generally speaking have more productive citizens who can live and work longer, which means that the economy does better.

So, I mean, I just think of this story as it's

great for

many reasons.

And one of them is also the economic reasons, too.

So the only way you can treat an illness is to diagnose it.

And I'm just going to try and summarize an enormous, arguably the biggest industry in the world, the U.S.

healthcare industry.

Essentially, America hasn't lost its health.

It's sold it, right?

Everything here is about money.

America is about shareholder value.

Post-World War II,

you know, essentially the Industrial Food Complex recognized that shelf life equals profits and enter-processed garbage.

Essentially, you add sugar, call it breakfast,

cue the obesity crisis, and Uncle Sam

essentially helped by subsidizing

soy and high-fructose corn syrup, became essentially a food group.

And then healthcare followed the money.

We pay doctors to treat sickness, not prevent it.

And

you're worth more with stents

and

a prescription than with running shoes and broccoli.

And then pharma, you know, built to medicate, not to heal.

One pill for cholesterol, another for sleep, and a third for the side effects from the first two.

You know, the opioid epidemic is capitalism doing what it does when it's at scale and unchecked.

And then tech was kind of the final nail in that is they monetize your time and attention by keeping you sedentary, addicted, and isolated.

And the result is we spend more on health care than anyone and the younger,

you know, fatter and sadder America.

Bad health isn't, it's not a failure of the system.

It is the system, and it's a reflection of our values.

And that is we've decided to monetize the health of America.

And even our election system doesn't pay people to say, all right, the electorate, we need you to focus on the long term.

We need you to implement incentives and constructs such that in 20 or 30 years, a kid was never obese, was never depressed, never got a knee replacement, never had a stent, never had a bypass, never had dialysis, never had statins.

That is what the government is supposed to do.

The government is here to like save a shit ton of money that they never get thanked for.

We've essentially said, okay,

let's monetize U.S.

Health.

There's a way to monetize it.

We'll be right back after the break with our second quarter earnings preview.

If you're enjoying the show so far, hit follow and leave us a review on Profit G Markets.

We're back with Prof G Markets.

Second quarter earnings season kicks off next week.

So let's take a look at some of the key reports to watch.

Major banks like JP Morgan, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs are all reporting.

And we'll also get results from Netflix, TSMC, and ASML.

So,

Scott, this is basically the moment where we're finally going to see what on earth has been happening in the past quarter.

And we've seen just wild swings in the stock market.

We saw what happened in April.

I mean, it feels like it was years ago, but it was literally in this quarter.

And then it came back up.

We've seen all this tariff stuff.

And now we're going to see the earnings.

And I think one of the big questions here is, are we going to see

an impact from the tariffs or from just Trump's policies more generally?

There's been some preliminary data that would suggest we might.

According to this survey in May, nearly 60% of U.S.

firms reported a decrease in gross margins due to tariffs, with roughly a quarter seeing drops greater than 6% to 10%.

But then you've also got the stock market kind of telling you a different story where you've got the NASDAQ hitting a record high, and Wall Street says, no, we're

okay.

So, just any general broad reaction as to what we can expect

for Q2 earnings, which kicks off next week and which we will be covering over the next several weeks.

The companies that drive the market now are global companies, and they have such incredible points of differentiation that they continue to churn on.

And that

on the whole, you're going to see more outstanding earnings.

The one I'm most interested in is Netflix.

And that is, I think Netflix has baked into its stock price now so much growth.

And I can't help but wonder when the rise of YouTube and TikTok begins to take a toll and also the DOPA culture where my kids are now incapable of watching a 90-minute or two-hour movie of when all of these people,

I came back from Spain yesterday, five kids on the plane, and they're all laying down on their sides like those opiomatics in those Chinese dens.

in the last century, just on their sides, just watching TikTok.

And I wonder when at some point that starts to take a toll on Netflix.

So I'm just very curious to see the Netflix earnings.

I wonder, and I think they'll continue to announce subscriber growth, but I'm now of the mind that Netflix needs to, and my theory is that Reed Hastings going on the board of Anthropic is going to lead to some sort of TikTok-like offering.

And one of the takeaways for me, at least, and I don't know if you feel this way, is that the President of the United States, especially President Trump, essentially the whole world is saying, put the fat, ugly kid in the corner and ignore him.

I mean, they're just

and just keep on keeping on.

And it feels like the economy is doing that.

And these companies are so exceptionally well run, have such strong IP.

I just don't see any reason why,

you know, it's like they say two-thirds of the mass of an iceberg is below the surface.

I kind of believe right at this point, 98% of our economy is below the insanity and as nine threats of the administration now.

I have been shocked at how resilient the economy seems, not only to the president, but also to like wars.

And shock.

It just feels like the economy has become so productive and technology has become so

resilient that it just continues to churn on.

I mean, you said the economy has been extremely resilient to what's been happening.

I would amend that to the stock market has been extremely resilient

to what has been happening.

And I think what we're about to see, and I guess the thing I can't really wrap my head around is, are we going to see the impacts of what I'll just generally call turmoil, both in terms of geopolitical turmoil and also tariff policy turmoil?

I think that's a fair thing to say.

Are we going to see that reflected in the fundamentals of the economy and in the fundamentals of the financials that are going to be reported in this next week or so.

Is that going to be reflected?

And, you know, the stock market would tell you no, but the reality is we just don't, we actually don't really know yet.

And so I think, you know, it'll be interesting to see how certain companies do on an individual level.

But I think the bigger question is like, how is corporate America doing?

How is the consumer doing?

And for that, we're going to have to look at the retail earnings.

We're going to look at Walmart, Target, Amazon, and that's going to come a little bit later.

We also might want to look at Netflix as an indication of that.

One of the most interesting things that I found is that everyone seemed to agree with those last Netflix earnings, that Netflix is inflation resistant.

That people love Netflix so much that even if inflation happens, they're not going to cancel their Netflix subscription.

Or at the very least, maybe they'll just downgrade to the ad supporter tier.

And that'll be an interesting thing to see as well.

Is Netflix inflation resistant?

And also,

meanwhile, is all of America inflation resistant?

You know,

in other words, did this policy that has been so insane, did it have an effect on the bottom line of America?

And that's what we're going to find out.

But what you said resonated.

You said, I think in an episode a couple of weeks ago, that All of these shocks, whether it's an inability to plan your business or tariffs deciding,

encouraging nations not to or to reroute supply chains, not to be as dependent on the U.S.,

that the ramification of that, the ramifications of that wouldn't takes a while.

Yeah, it wouldn't gestate or come to fruition or have an impact for a good three to six months.

So, and I believe your prediction was we would see a slowdown in some inflation, but it probably wouldn't hit until Q3 or Q4.

That's right.

And so we're talking late summer, fall is when we would expect to see somewhat of a slowdown.

My prediction for this,

based on that, is I think these earnings are going to be fine because I don't think we're going to see any impact yet.

And I think that what we'll probably see is that everyone's going to get super optimistic because they're going to take the Q2 earnings as the total evidence that everything's going swimmingly, when in reality, we should actually be waiting for Q3 and then maybe even Q4.

But what you said about Netflix is really interesting.

And that is, I don't know know if you remember this, but when I was a graduate student instructor in economics, we used to talk about this concept called a giffen good.

Do you know what a giffen good is?

No.

So in Ireland during the potato famine or in nations that were struggling with food insecurity, when the economy went into the shitter, the sales of potatoes, when the price of potatoes went up, so many people were dependent upon potatoes.

And when the price went up, they had less money.

And they ended up buying more potatoes because it cut into their discretionary budget for every other type of foodstuff, like meat or fish.

Wow.

So as the economy got worse, they were not only recession proof, but it actually benefited them.

And I wonder if to a certain extent, you know,

is Netflix a gif and good?

And that is, if you start feeling insecure about the economy, like, you know, honey, we're not going to eat out as much.

We're not going to go to Disneyland this year.

But for God's sakes, we can't give up Netflix because we're spending more time at home and we need cheap entertainment.

It would really be a give and good if they said, you know, we can't go to Disney World, we can't go on vacation, vacation, but we can upgrade from the ad-supported tier of Netflix to Netflix Premium.

That would be like the perfect gift and good scenario.

But we can watch Umbrella Academy over and over.

That is really interesting.

I could totally see that happening.

But

we'll see that.

We'll also see, we're going to have the CPI, which will be out

on Monday.

It'll be right out immediately at the start of the week.

And then we've also got these bank earnings this week.

And I'd be interested to hear what you think is going to happen there.

I mean, I think most people agree that the earnings are going to be pretty subdued just because you've got still a very slow M ⁇ A market, IPO market also very slow, IPO listings down 40%

from the first six months of last year.

One thing I think I was thinking we could probably expect also is massive trading revenues again.

Yeah, I think that's right.

Because of just the insane volatility that we've seen in the stock market, which basically just means a ton of people were trading stocks.

Again, you've got to remember Liberation Day happened in this past quarter.

So I was thinking we'd probably see massive trading revenues, and that'll probably balance out a kind of

a slow quarter for banking and investment banking.

Not a very bold prediction because that's basically what we saw last quarter, too.

But I guess I would assume that what's going to happen is it's just going to continue on.

I think that's right.

I don't think there's any reason why it would, in an elevated interest rate environment, plays to their strengths because

the increase in rates that they offer to depositors lags what they're able to charge their clients.

So I think you have additional margin there.

The trading volatility plays to that.

I think you're exactly right.

I think we're going to see more of the same.

I don't see any reason why

it wouldn't, you know, earnings don't continue to chug on and be strong.

So we'll have JP Morgan, Wells Fargo, City on Tuesday.

Then we'll see on Wednesday, Bank of America, Morgan Stanley, Goldman Sachs.

And then I guess the final thing is, you know, inflation out 8.30 a.m.

Monday morning.

And

it's expected that it's going to rise, but,

you know,

I'm not going to make any predictions about the CPI, but it will have a pretty significant impact on the interest rate environment and what's going to happen with the interest rate decision.

And just before we wrap up here, I just want to give you this

hilarious post from Donald Trump that he posted on Truth Social that I'm just going to read out to you because I think it kind of just describes the current moment quite well.

He said, quote, tech stocks, industrial stocks, and NASDAQ hit all-time record highs.

Crypto through the roof.

Nvidia up 47% since Trump tariffs.

USA is taking in hundreds of billions of dollars in tariffs.

Country is now back.

A great credit.

Fed should rapidly lower rate to reflect this strength.

USA should be at the top of the list.

No inflation.

In other words, Trump is basically saying,

because crypto and tech stocks are at record highs, we saw Bitcoin, it hit, it breached 112,000 last week.

Because we're at record highs in all these extremely risk on assets, we should now lower the interest rates.

That's now the time to do it.

It's just baffling to me that this guy who runs the country has no understanding of how interest rates work.

Like Nasdaq and crypto record high.

Okay, maintain rates.

That's your indication or even raise them.

Jamie Dimon was talking about maybe we should even raise rates.

I just want to get your reaction to that because I just found that pretty remarkable.

I'm where Jerome Powell is.

Jerome Powell, who I chairman Powell, who I just admire so much, said at a recent conference, he's like, we got to wait and see how the inflation data comes in.

We don't know if we're going to cut rates.

I don't think he's planning to raise them, but we're supposed to be in a rate-cutting cycle, which would have decreased the costs across every household, credit cards, student loans, auto loans, mortgage payments.

And he said, we would be in a rate-cutting cycle right now if it wasn't the insecurity and the lack of information around the impact tariffs are having.

And if the guy with access, Chairman Powell has access to more information than any individual on the planet.

And if he doesn't know where this shit is headed, I'm not comfortable making a prediction.

He's basically said, we don't know.

He's like, I need to see, we need to see where the data takes us.

It's hard for us.

It's hard for us to know where this is going, and we need more information, and then we'll decide where we're going from there.

All humans have an ego, or most?

Not all of them do.

I think Chairman Powell's just loving sticking up the middle finger to Trump.

I think he's, if it's a coin flip on whether to raise or lower rates, when you shitpost someone of that credibility who's worked so fucking hard for you instead of being chairman of Bridgewater and making $20 million a year and instead is like cleaning up your fucking soiled diapers everywhere, and you try to start intimidating that person, if it's a coin flip on whether or not he should cut rates, if I'm chairman Pong, yeah, I'll just leave them where they are.

Yeah, Robert made a great point last week where it's like, we're all worried about the independence of the Fed.

And in a pretty funny way, this has actually underscored and emphasized the independence of the the Fed.

How important it is.

Exactly.

And how strong it is because we've got this guy who just will not let up.

Okay, let's take a look at the week ahead.

We'll see the consumer price index and the producer price index for June.

And we'll also see earnings from banks, as I said, and also from Netflix and from some of those chip stocks, TSMC and ASML.

Scott, any general predictions as we wrap this up?

My Canadian girlfriend, we're going to read on on this show

a bunch of press releases from the administration over the next 30 days, and we're going to find them and read them on the show that basically create the illusion of victory, the illusion trying to impress people with something that doesn't exist.

We are going to see the mother of all Canadian girlfriend press releases.

out of the administration over the next 30 days, and we are going to find them and read them on this show.

By the way, she's super hot and has an amazing body and is really into me and really into me and she's definitely coming down and i'm going to bring her to prom

super into me we talk every night she sounds lovely

this episode was produced by claire miller and engineered by benjamin spencer our associate producer is allison weiss mir silverio is our research lead our research associates are isabella kinsel and dad shallon drew burrows is our technical director and catherine dillon is our executive producer thank you for listening to property markets from the vox media podcast Network.

Tune in tomorrow for a fresh take on the markets.

You have

in kind

reunion

as the warmth

and let them fly

in love.