Global Trade This Week – Episode 238
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Pete Mento 0:00
You're watching global trade this week with Pete mento and Doug Draper, Hello everyone, and welcome to Global Trade this week. I am Pete mento. With me is my venerable co host, Mr. Doug Draper, Doug, how's Colorado?
Doug Draper 0:19
Colorado's doing great. Love it back at home, traveling last week, but yeah, pretty chill. Nothing to really make a comment on. So that means no news is good news.
Pete Mento 0:31
DC is not chill, my friend, DC is we were talking about that ago. DC is pretty aggravated right now between the people who are involved in all the madness on the military side, with what's going on in the streets, the people are involved in the the the commercial side. It's just, it's a it's a rough time to be here in the district. It's a rough time.
Doug Draper 0:54
Yeah, well, as as I was saying before we jumped on the the local paper and steamboat runs five days a week. They don't they don't produce it on Sundays or Mondays, so any action that happens on Saturday you read on Tuesday. And I don't think there is one article about international engagement on any levels. There's a lot of articles about the kid that's the Super reader in the middle school and issues with wolves. And other than that, it's pretty easy going new. So it's my point. P is, you're in the swamp and over here, it's pretty easy to check out if, if you want to flip the switch off, I'm moving.
Pete Mento 1:35
It's about time. I just imagine your local papers like how to get the highest yield out of your bud plants, bro and and getting the maximum wax shine on your board like it would just be if spiccoli ran a newspaper, is kind
Doug Draper 1:51
of what I'm imagining. Yeah, not too bad if anybody from the show is, I don't even know if anybody from the show that listens to us from steamboat, but now people get mad if you said like that, it's local government affairs. It's highlighting kids and success stories every week. There's something about wolves and the weather. So that pretty much checks all the box, and they have one hell of an obituary section. As mundane as that sounds, there's some pretty cool people that have lived in this valley and and bringing so I really hone in on the obituary section, which is a horrible thing to say on a show like this.
Pete Mento 2:26
Oh, not at all. That's the reason they write it, right? You still get a physical paper. Doug, yeah.
Doug Draper 2:33
Every day it's free. It doesn't get delivered, but they have it distributed all over different parts of the town. I miss
Pete Mento 2:38
reading the paper. I miss having it in front of me and thumbing through it. Look at the pictures of the sports page. I love that. It's just disconnected now and there's I had a couple of sources of truth, right? Financial Times, Journal of Commerce, Wall Street, journal, Boston Globe, right? Those are my I love them. I miss them very much. But I'm not going to pay six bucks for the Boston Globe Sunday edition. I'll just read it online. Do it? Yeah? Well, you read the obituaries. I read the wedding notices. Okay, I love reading. You know who's pretentious daughter got married in Newport this weekend. And all the all the people in the wedding and where they're where they're going in their honeymoon, the couple will be honeymooning in st BARTs for 14 days. I love all that. I just think it's fascinating the golden age of wealth in America. But anyway, enough, you get to kick us off on our first topic this week. Doug, what
Doug Draper 3:35
do you got? Enough? All right, well, we're going to hit a DC topic here on the second half. So I'm going to go into this article I saw over the article I saw over the weekend about data centers the AI boom. And they say that a lot of these things, 50% the article that I read are either 50% of the data centers that are planned for 2026 and plan means either under construction or moving forward with financing and things that nature are delayed or at the risk of just being canceled. And a lot of it has to do with the electrical components, like Transformers. I'm not an electrician, right? But transformers, breakers, batteries, the guts that run this thing, right? Big transformers, 24 to 36 months out, right? So, yeah, we want to order like, 500 of these things. Okay, cool. We'll get it to you there, in, in, in three years, right? So the thing is, like you could, you could pour all the concrete that you want, right, but without a transformer, it's just like an expensive parking lot, right? The other piece is that you have to get these things from overseas, because it's multiple factories that are making. In these and they're not all domestically sourced, right? So then you got the factory, the port, all the connectors that we talked about, the ocean freight rail, you know, some of these things are massive. You get into project with just logistics and stuff like that. And so the different touch points that are happening that could impact this is, is astronomical. And then this is a piece that I didn't really think of, and the term that that I saw was lumpy imports, right? So you have all these things that need to come together on one roof, the guts of the data center to run it. And this piece comes from this part of the world. That piece comes from that part of the world, and they're coming in all over, and you have all the potential supply chain challenges, but you can't turn this widget until that one widgets in place. So the flow of the construction is a little little lumpy. Now, folks that are in construction and construction management, you're like, Yeah, no shit Draper, that happens everywhere. But I think it's important to know that it gets such hype, right? The AI and data centers and the energy use and all these other things. But just like in covid Pete, you can't virtually ship a box, right? You still have to have a human pick an order, put it in a box, and a transportation company to make that delivery. The same thing goes is, if you want magic to happen when you type in your keyboard, there's still infrastructure, which is tangible, that needs to run that thing. And there are substantial delays happening, from what I've seen. And it's going to continue to progress
Pete Mento 6:36
tails all this time. I want it now. You can't have it now. It's Veruca Salt man from from Willy Wonka. I want an Oopah loopa now. You know I want my AI now. I would love to know the adoption rate of chat, GBT and Claude and all the rest of them over the course of this past year, how much more is being drained down on it. And while we're all beginning to finally accept that this is part of our new world. We're unable to continue its expansion because of supply chain issues. It's demand of the use of the service is being outpaced by our ability to deliver it, which goes back to our inability to manufacture on our own shores. So it becomes a pretty good argument about the necessity of protectionism, I suppose. But at the same time, it's a great argument for the fact that demand planning isn't always the science we expect. So I wish I could say this surprises me, Doug, but it doesn't. Everybody wants to tickle me, Elmo, not everybody gets to have
Doug Draper 7:32
one, yeah. All right, tickle me. Elmo and Veruca Salt in one short take. Pete, good job.
Pete Mento 7:40
Good job, my friend. I hated that character on that show, but I wanted to, but now, oh, God, I don't know why I kept dating girls like brute assault. How'd that happen? For as much as I can all right, what do you got? Oh, look at you. Get me off the dating thing. So last Friday, of course, at like three o'clock in the afternoon on a Friday. Customs drops this this FAQ and background information on their new Cape system, which is what we're going to be using to process certain refunds. And they made it pretty darn clear that unless it's a pretty straightforward, normal, boring, vanilla import, you're probably not going to be able to use cape. But there was a piece in there that I think was important, and it said that the refunds could be held up for questions on compliance. Oh, you don't say so. I want to take this moment Doug, I wish you remember the church lady on Saturday Night Live. Yeah, when she was right, she would do the superiority dance. Want to do my little superiority dance right now, because I have had everyone from importers to trade attorneys to Customs House brokers saying, Oh, it's just going to be an upload of data. What's the big deal? Well, in your face. How about that? In your face. Customs has finally said what I've been saying for damn near six months now. They're going to be checking the background data. They're going to be looking at this information to figure out whether or not it's a substantiated claim. You go right ahead and just upload everything. You tell Uncle Pete how that works out for you. They've given you the signal. You better make sure that crap is right now for the good news side of things, they're saying, it's going to be ready on April the 20th. That's adorable. Maybe it'll be ready for the first testing on April the 20th, but if anything Customs has ever built is any indication, I'm expecting this thing to break like that. There's going to be a flood to get on ace like Taylor Swift. Tickets going on sale. Everybody's going to be pushing their information in there, and the system is going to be overloaded. So I'll just sit back and do my superiority dance again, when April 20 comes by, not everybody can get their crap in that system.
Doug Draper 9:46
Yeah, yeah, I did see that. I saw a post that you did on LinkedIn as well. And you know, here question for you on this one, right? So the complicated one, it's like taxes, right? Like my tax situation is incredible. Basic. I do it myself. You know, I'm pretty simple guy, and for the most part, I would think Americans are like that, right? Of course, there's a lot of other but percentage wise to simple, hey, I imported this sweater, and I wouldn't need to get my money back. There's going to be a lot of those that are going to go through and be pretty, pretty seamless. It's a question, that's my opinion, the question, or the question I have to your point, is just like Taylor Swift tickets right at 1201, on April 20, they got people ready to push the button, and we'll see what that looks like. So I think the first couple of weeks shed even the first week, maybe the first few days, we'll see how resilient this process is and and if, if computers start smoking there in DC because of overflow, it'll be interesting. But I think that if you're just a basic importer, maybe I'm pretty naive with that, it should be okay. We'll see what happens with the refund process, but first couple days, when that thing's up and running, we'll
Pete Mento 11:05
see, I think that for the simple importer doing the process will be fine, but in my experience, the less you do of importing, the less you realize what you're responsible for, and the government has incredible tools to identify people that are doing it Right. Tally ho, let's have some fun with it.
Doug Draper 11:23
Alright, cool. Well, quickly this show is moving right along. We're at halftime. Brought to us by CAP logistics. They put the show on every day, every week, for us, for you, and we appreciate them. Keenan, behind the bells and whistles there. So cap logistics, com, give him a check em out. Pete, halftime, what do you got?
Pete Mento 11:42
So I texted you boys about this yesterday, when I read the article for the first time, there's a gentleman who lives in Chicago who has gone to, either gone to or has access to 10,000 live recordings of music from the era between 1989 and around 2020 this guy just went to shows constantly, and then he had a little ecosystem of friends of his that did as well. And what started off is just him with a basic recorder. Ended up with him plugging in a machine to the soundboard when he got to know the guys, and he has amassed 50,000 different live recordings of amazing bands, and it runs the gamut. It's everything from hair metal to grunge to early punk rock, like bands like Fugazi, Minor Threat flipper from the early days of punk rock, and he has put them on a free server, and you can listen to them. He took this information, started telling people and sound engineers all over the world found out about this, and they started running it through their their different filters to take out background noise and to make it sound a little cleaner, but they didn't change the way the music sound. So yesterday, while I was cleaning my apartment, I listened to a Fugazi show from 1989 I believe it was when I was a senior in high school. I couldn't get to DC to see these guys, but there it was in my apartment, just I wait, I wait, I wait. Just scream at the top of my lungs with the rest of the crowd. The first ever Nirvana show, the first time they ever played together in public, first time Pearl Jam played. These are all on this particular database. And if you're into music, we need to thank this guy. It said the article that there's been a couple of bands that have reached out to him and asked that they take down, but for the most part, they've been cool about it. They've said this is a great way for us to memorialize what we did in our early years. We appreciate it. A few bands even took the recordings and put them out as as records or as add ons to records, you know, here's a here's a rare cut from when we played this cover back in 2001 we hope you like it. And it really does run the gamut, guys, there's country in there, there's electronic music, there's everything. So if you're into live music and you like recorded live music, which not everyone does, this is a treasure trove that I suggest all of you go take a look at
Doug Draper 14:02
great three words on that one. Pete, I don't care. It was an interesting text you sent yesterday, and I'm like, Okay, I don't know. I'm not into that thing.
Pete Mento 14:18
Each is on you. Like live music, Doug.
Doug Draper 14:24
No. I mean, I don't dislike it, but there's actually some decent concerts that come here to Steamboat events, some concerts, some speakers, things, comedians, and if I get this thing's over 80 bucks per ticket, that's 160 plus, plus. Got to go out to dinner. Maybe I'm just getting old. I'm like, I don't think it's worth 200 bucks to go see this guy for an hour and a half. So I'm kind of Debbie Downer as I get older. In that aspect,
Pete Mento 14:54
in 1993 I went to a show to Nirvana show. It was part of a larger festival, but that. That's really when they were, they were huge, and they had agreed to do this before they really got huge. And it was in Baltimore, outside in Maryland somewhere. And the feeling of being with, you know, maybe I don't know, 5000 people that were all there fired up to see the music blew me away. And the other one I like to tell people is we went to go see motley crew at Madison Square Garden, probably, I don't know. Now, 10 years ago, it was supposed to be their last tour. They've had two cents then, hell, I don't know. And we all went and being at Madison Square Garden with all those people who all had that connection to the music, hearing them play live, having them interact with the crowd, it was a really special moment for me, and it was worth 180 bucks. I paid for see them. There are bands that I will play, just like I'm going to the zoo. I want to go see them live in person, like I'm looking at an arrangement. And when we got to go see Black Sabbath, my friend Chris and I, that was one of those moments where I'm glad I got to see Aussie on stage, but I get it. Doug live music is not for everybody. Being in those giant crowds is not for everybody, but this is a way for you to get the feel of that raw music without having to actually. So yet again, Doug way to be the stick in the box.
Doug Draper 16:12
Fair enough. All right. So since people had a little insight into me, we're going to flip the script and get a little insight into you. So I thought this one when I was coming today, because this weekend it was nice here in Steamboat, and we're supposed to get three inches of snow tonight. So I started thinking about the seasons, and how I was out there mowing the yard and getting everything set, and then all of a sudden, hey, three inches of snow. Three inches snow isn't much, but it's mid April, so we're going to do a four seasons perspective, global trade this week. Style Robin, I got five questions for you all related to the seasons, and we start right now. So if you had to rank the seasons, each one rank one through four. One is the best one to you, and number four is the least. What are they? Number one is
Pete Mento 16:59
definitely fall. Number two is going to be spring, three, Summer, fourth, water.
Doug Draper 17:05
Okay, good. Who wins in a fight winter or summer?
Pete Mento 17:10
Like, like, a real fight, like, if they were, are we talking about the embodiment of the two of them? Which one is the more overpowering?
Speaker 1 17:16
Correct? That's more Yes, that's perfect.
Pete Mento 17:21
Correct? I think winter, summer, summer, depending on where you are and how you experience it. But I've lived in places where winter will straight up kill you without any there's nothing you can do about it. Living in where you live in Colorado, where you guys get mountains of snow and with drifts and wind chill, I think it's just easier to die think winter.
Doug Draper 17:42
Yeah, all right, so this would be a little bit more difficult, because they're more gentle fall and spring getting getting a brawl. Who's winning that one?
Pete Mento 17:50
Spring Rain, rain, unless you live on the Pacific, the Atlantic coast, South Coast, you got hurricanes. But I think spring is probably more the flooding and monsoons and all that, I think.
Doug Draper 18:03
Got it all right. This leads to the next one. If there was one season that got deleted, you had to get rid of it. Which one would
Unknown Speaker 18:10
it be? Hmm, winter, winter.
Speaker 1 18:14
Okay, gotcha All right,
Pete Mento 18:17
not like the rest of you guys out there wasting real estate by putting a ski slope on it. I can't care.
Doug Draper 18:22
Whoa, hold on there. Captain, all right. Two more. Here's the second to last one. Which season are you as a person? Which one do you embody?
Pete Mento 18:38
Summer? I'm I'm big, I'm out there, I'm overwhelming. Sometimes there's a lot of fun around me. Think I'd be a summer. That's surprising.
Doug Draper 18:49
And then if you could lock in one season, which one would it be, and
Pete Mento 18:55
why fall? And the reason for that is simple, I am a powerfully built man Doug. I sweat in Boston in February. I'm like a toad. I want my environment to be cool and a little moist. So I think fall and fall. To me, it's nostalgia. It's going back to school. It's football season starting. It's two of my favorite holidays, Halloween and Thanksgiving. It's, you know, getting the cooler stuff back out, kids being back in school. I just, I love it.
Doug Draper 19:25
Good one. All right. Well, thanks for your insight on four seasons. Pete mento style
Pete Mento 19:31
does is for Doug, is it just Winner, winner, winner, winner, winner, winner, like every
Doug Draper 19:34
single No, no, no, no, I would, I'm I would as crazy as it sounds, I would probably say summer would be for like, who winter would kill in a fight because of all the things that you said. But I would probably say summer, early summer, not crazy, August, summer. But yeah, even though I live in a mountain town lots of snow, I still am a summer guy. I. You are an
Pete Mento 20:00
outrageously active person, regardless of your age. Like you ski, you go out, you do a bunch of stuff. So where you live and what you do with your free time, it completely makes sense that you would love winter. Keenan, same thing. You know, Keenan loves boarding and skiing and all that stuff. So makes less sense to me. But the fall, the fall is when I get to go duck hunting. You know, the fall is the best time to go fishing in the fall is just good.
Unknown Speaker 20:23
All right. Well, that was a good one.
Pete Mento 20:28
Not bad, not bad for a half time for Doug, we didn't crap on drones or the post office yet.
Doug Draper 20:32
Yes, I know. I know. I know. I know. No so. All right, here's my second topic. It's related to where you were sitting right now, as I saw that the IMF and the World Bank Group are having their annual meeting during the cherry blossom season there and in the swamp, the global economic kind of outlook, when I looked at it online, they said there's actually some crisis coordination, which may be very relevant now. But I was like, who attends this thing, right? And they said, it's the financial ministers of the g20 obviously, US Secret, US Treasury and a lot of the big banks. So like a Jamie Dimon type of folks across the world, and the press release before it even started, Pete is global economic downgrade, right? And, you know, no shit, I could have figured that one out, right? And the three things that I pulled from it right is, one is energy volatility, Iran. What's going on right now. We're not getting into that political nature of things, but expense, fuel, movement things in our world, global trade related to transportation, international domestic trade lanes still softening a little bit right? Trans Pacific, transatlantic, we've seen some of that. It's not really new information, but it's continuous information. And the one thing they that this article indicated that money is still expensive, so slower infrastructure development in general and overall investment. So after I saw that Pete, I kind of, I was kind of talking to my kids this weekend, and I'm like, you know, when there's uncertainty in life, and I'm talking about you personally, not you just an individual, right? When stuff gets uncertain and you're not sure what's going on, people just hunker down, right? And you can quote me on that, hunker down, where you just you contract, you become very conservative. And you wait because you don't want to mess up what you have, what you've created, what you've been successful in life. And so I think the world is in a hunker down moment until we figure out what's happening, and then afterwards, you kind of maybe a little bit more trepidation as you decide to move and expand on or whatever uncertainty people just contract. I'm going to hold on to what I have. I'm going to hold on to what I've created, and I'm going to wait it out. And I think that the hunker down is pretty much the concert tour theme for this year.
Pete Mento 23:16
Yeah, I agree with you, man, like the whole, first of all, the whole idea of No kidding, that's, that's their job, right? Is to say the obvious out loud, someone with authority saying everything's broken. I think that's their job, you know. Second of all, just because it drives me crazy, stop coming here during cherry blossom season, please. I took my daughter to the zoo this weekend. And the number of people who are in BC, and they're the worst tourists to the app, they're just walking around with their phones and their cameras, just taking pictures of trees. I get it. They're beautiful. They really are beautiful. And they're an incredible historical reminder of our relationship with Japan. I get all of that, right, but for God's sakes, they're trees. Get over it, right? And then when you're when you're done, could you please leave as quickly as they they're just they're everywhere. They're in the metro, around the streets, and then they go like, Oh, just get out, right? That's the problem with living in DC. Is during these large tourist opportunities, it's overwhelming, too many damn people. But when you talk about people that come IMF meetings, you know, WTO meetings, Hans and his friends, once they go to Austria, these folks are there to really be movers and shakers and move the needle. And when you've got people that control that much money, that much policy, all getting in one room, there's going to be some stuff that's said and done, and there's going to be some movements on policy and money. And I think that's the real main reason why these are so important is what comes out of those meetings once it starts to get published, but during the meetings, man, you know, I think there's a lot of Captain Obvious stuff that comes out of it, but once they're over with, and we get the press releases and the drips and drabs of information, that's really the power of those meetings. I don't want to. Go. I don't ever want to go. That's not my scene, dude, it's not my scene.
Doug Draper 25:05
All right, what you got spring us home, brother,
Pete Mento 25:08
yeah, my last one is a little scary. I spend a lot of time thinking about this weekend. We've decided to blockade the Straits of four moves. The United States Navy has the President has said that he's putting together a coalition, but at this point, the Brits are out to a degree, and we don't know whose Navy is going to be working this year. The idea behind it is to stop vessels Iranian in particular. So at first I was worried that maybe a Chinese ship would come through with a Chinese naval escort. Doesn't appear to be the case. We're going to shop stop Iranian vessels in, vessels carrying Iranian oil out of the streets. That doesn't sound like as big a deal as I think people realize it is. If you cut off half of that, if you blockade their blockade, essentially what you're doing is you're closing down that particular waterway, but you're also stopping the movement of so much to all parts of the world, fertilizer, petrochemicals, all the oil, all the LNG, everything that's coming out of there comes to an abrupt halt. And over time, it doesn't take a lot of time, it begins to have a huge impact on the world's economy in a positive way. For the United States, there are super tankers just screaming towards the Atlantic Coast drink to get loaded up with whatever they can for American surplus of energy, which I can say maybe for us is a good thing, but for the rest of the world, it means that the closest most available energy is not going to be available. It also cuts off an important pathway between Europe and Asia. Becomes a real problem real quick. So by the time you hit around 60 days, people are considering alternative areas to produce from manufacturing, to gather goods from far beyond just energy. If this goes as long as 90 days, it's going to take years to repair.
Doug Draper 26:49
Yeah, yeah. Interesting. Interesting headline, yeah, blockading the blockade for sure. What do you think you would know more as a mariner, you're hearing things like 20,000 folks are still on boats, like they haven't been able to get to get off. So my take is, is that, what is this going to partially turn into humanitarian effort where here's a whole bunch of vessels where people need to get off, here's an American Tanker or destroyer sitting right there. I mean, who's going to help these people out? Because it's not going to get better, it's going to get worse. I mean, unless they start jumping ship and swimming to shore, they're still there. So do you think that's going to come into
Pete Mento 27:33
play at all? You know, great, great place for guys to get info on. This is G captain, of course. And g captain has had some really harrowing stories. Ships that are unable to make water anymore. They have the inability to really make water. So they're they're trying to find water. They're begging to come to shore so that they can refuel, get more water. Vessels that have had breakdowns on critical equipment that are really not seaworthy anymore, sailors that have been on for damn near a year at this point that are unable to get relief and go home, the inability for them to get food, food right? You can't just drop a fishing line off the side of the ship and catch a dinner. It's a lot more difficult than that. It's a real it's a humanitarian crisis done, and it's not being talked about because people don't care about truck drivers and sailors. They really don't, and those people are suffering, and something needs to be done about it. This is something where the Red Cross should step in, right where they should say, for the for the it's a humanitarian issue right now. These people come from all over the world. There are Iranian sailors, Russians, Americans, British, you name it, Filipino. They're they're on these ships, and we as a world community ought to be worried about their safety. We're not going to bring the ship in and load or discharge it. We're just going to maybe, you know, have have lightering vessels or bum boats come out there and get these guys what they need to, at least a healthy medical care. There are people who are suffering don't have medications that are on these it's a real problem. Doug, and I think it's only going to be exasperated by this current trauma that we're putting ourselves through.
Doug Draper 29:02
Yeah, interesting. Well, that's kind of a Debbie Downer note to end the show, but we do have to end it, because we've just spoke about global trade for this week, and we'll talk about it again next week, because maybe something crazy will happen in the next seven days.
Pete Mento 29:19
Okay, at the beginning of the show, what are these weeks? Used to say? Go straight to halftime, because nothing happened.
Doug Draper 29:24
What do you got? Yeah, that's but that's why we did it. Way back in the day we got this thing started. This is show 238 that's what Keenan was saying. So 238 weeks ago we started this, and we keep rocking. So I would imagine that we'll have something talk about next week. Yes, sir, yeah. And I appreciate everybody listening week after week, as Pete mentioned, if it's happening in global trade, we'll be talking about it. And thanks for the feedback and the support. Pete. Enjoy my friend. Take care. You. Br.
Transcribed by https://otter.ai