Global Trade This Week – Episode 113 - Live from Casa Bonita
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Keenan Brugh 0:00
You're watching Global Trade This Week with Pete Mento and Doug Draper.
Keenan Brugh 0:10
Global trade this week, we need a special episode 113
Pete Mento 0:16
Hey, everybody, and welcome to another edition of gold trade this week. Unlike editions of the past, though, we're live. And we told you we do it from Castle bonita. And we were kidding. Here we are Castle Bonita adjacent. And we want to thank the wonderful people at West facts brewery for letting us do it here. God bless him. The beer is absolutely fantastic. If you have a chance, and you make it to Denver, you got to come. I'm not going to tell you how many of these have already had. Because I think technically I am still at work. But I'm not going to disclose just how many later on in the show today, we are going to prove once and for all dammit, that Keenan and Doug are not the same person. There's no way that you and I are the same person because physics. And I just want to mention a couple of things right off the bat. Doug brought notes. Yes. Because much like Ron Jeremy, whatever you put on paper, he's gonna say it. I also have to mention Keenan shoes. He stole them from a garden gnome. I think they're like a women's size 17. And he's telling us that they ground him to the earth. It's just too much for me, honestly. So we're at altitude I'm, I'm getting about 40% of the oxygen that I need to survive. I could pass out at any moment if I do. Doug has been told all of my topics. He'll be picking it up from there, Doug, how are you?
Doug Draper 1:46
I'm good. Pete, I'm good. The interesting thing about this live show is that we are sharing a microphone. So the off kilter banter may not be quite as robust as as previous episodes. It's, and I'm certainly I'm not holding the mic to your face. We'll have to grab it. But yes, yes, yes. So who's who's let's let this thing rip? Who's going first? All right. Well, one thing I heard about. So Topic number one is natural and green energy may not be as green as we think Pete because there is more coal being consumed and harvested and exported in different countries than ever before. So the thing with this one guys, is that the world is like interconnected, and the atmosphere it touches all of us. And so even though America in particular is driving natural and green energy, the rest of the world is not so much. So there's some statistics out there that we've talked about. But consumption is global. It's going up consumptions up and here in the US. People got to make money and the consumption of coal has gone down in the US. And so the exports have gone up. So it's not like it's just being repositioned. Right, which you know, when you talk about global warming, which is the first word that's always brought into the piece, Pete is it is a global perspective. And just because the coal is not being consumed the US doesn't mean the problem is over. So keep track of that, keep notice that coal is on the rise, and it's being consumed everywhere. And that's problematic for the global trade, and the global economy and the global environment. Any take on that one, Pete?
Pete Mento 3:38
A lot of takes on it. So first of all, coal is good for politics. And we can't discount that, particularly when you have conservatives running for president, and a lot of very powerful people in coal states. So that's my first big take on it. Second of all, you have China, who has been absolutely positively ramping up coal consumption, and importing it from any place that they can find it. Building coal production in the US and around the world and importing as much as they can. I just gonna mention, so the music here that you're hearing in the background, there wasn't a whole lot we could do about it. But man, could they have picked a better song for me, Jimmy Buffett, Have I ever told you about when I got to hang out with Jimmy Buffett and why?
Doug Draper 4:28
No, Pete, you have not but I have a feeling right now. We're going to hear about it. So I'm passing the mic back.
Pete Mento 4:34
So a really good friend of mine, Christopher yaki was the music director on the buffet musical, which was the meanest thing that ever happened to me because Chris, life just works out for him and buffets, one of my favorite artists because I'm a sailor, so of course, this guy who never even knew any Jimmy's music gets the job. And I end up telling him all about Buffett's music. He learns everything about it. And he calls Anyone Danny's like, can you make it down to Qs? Because Jimmy is going to play this tiny show. And there was like 30 people in this little bar. I end up going and hanging out with Jimmy and hanging out this little tiny bar and all Murata and he plays for a couple hours, and I get to hang out with Jimmy Buffett. Me, and I have tons of videos of it. And he's like taking requests. He's like, Hey, Pete, what do you want to hear? Not? Hey, crowd, what do you want to hear? Hey, Pete, what do you want to hear? And I'm asking for all these like, really esoteric songs. And Jimmy's just like, hey, like, go ahead and play it. So it was possibly one of the best nights of my entire life. But over the course of the next couple of years, I ended up meeting him a whole bunch of times. It never got old. Like it never got old. And they tell you don't meet your heroes. Not definitely. If Jimmy Buffett's one of the heroes. Meet me, Jimmy Buffett. It was positively incredible. So anyway, back on the coal thing. It goes back to the whole Evie thing. And we as we all know, here we are in Colorado. So this is going to sting. Doug hates EVs. You've got that problem that you run into with Evie use is where does the electricity come to run the EVS? Probably coal plant? Yeah, coal plants and a lot of and renewable energy. And this is still part of the shame that comes from Evie use.
Doug Draper 6:20
Yeah. Yeah, that's spot on. I mean, it makes a good cover story. But the reality is, if you look behind the curtain, there's still a lot of it being generated. And the one thing that when I looked at my notes, just like Ron Jeremy did in the in Anchorman, because that's incredibly important. And I'm not going to make any inappropriate comments like Ron Jeremy. But as I'm getting the thumbs up from the backstage crew, 75% of all the coal being consumed is in India, China, and, and Southeast Asia. And all of those coal plants are less than 20 years old. And they have a life expectancy of around 40. So they're consuming and gobbling and those are brand new facilities that are cranking it out. So interesting topic for sure. Pete tossing it back to you. What's your number one?
Pete Mento 7:09
You're my number one, Doug. I, we have to do more of these. Kenan? We absolutely. Right, so my first topic this week. If we could have just gotten a Christmas song for this. So okay, so the holiday season is quickly approaching, anybody who works in fording has been talking a lot about the lack of the massive ramp up that we always get ready for this time of year, between the back to school ramp up, and then the ensuing holiday ramp up. And the expectations that we all have of our customers just beaten, the phones looking for space was not happening did not happen. And it was pretty ugly. We have this double whammy right now of inflation. And consumers who have really started to tighten the purse strings, this year's holiday increase, a 1.3 trillion is what we're expecting to see. And about a five to 5.3% ish increase in holiday spending, which Hey, you know what, it's an increase? Well, it's not a good increase. So, holiday spending this year is probably going to be a bit of a Wawa, you know, go home increase. And what's really got people worried in retail, is that when that that those numbers come in, what we're probably going to see is American consumers at the holiday period, waiting for that big sale to come. But holiday consumers are going to be inundated with retailers saying no, no, no, this is the big sale. Don't wait. Because this is the big sale. No, seriously, come in now. Because this is the big sale. And we're all gonna say I don't I don't I don't I don't believe you. I'm gonna I'm gonna wait till like, the week before Christmas, and then I'll spend my money because inflation is just whipping my ass. I'm gonna wait for the big sale. No, no, this is the big sale seriously come in now. And I'm thinking it might actually be worse than that 5% pill. And that would be absolutely disastrous for those retailers. I don't know, Doug, what do you think?
Doug Draper 9:35
Well, I think it's gonna be one of those Christmases that everybody in the holiday season, excuse me, that is going to be easily forgotten. Right? It's going to be like, Well, how was mom's meatloaf? was okay. Right? How was holiday season? 2023 I guess it was okay. Because you're right. There is no imports coming in. There is no peak season. Retailers are trying to burn through again. Just in inventory and like you said, it's going to dribble out. And I love your your comments about No, this is the really good sale and then you wait a little bit longer. So I think that you know what little Johnny or the Christmas tree is going to get a, you know, a toy that's one year old, and he's going to be like, All right, and then three months, it's going to be broken, and nobody really cares about it. So I think this is going to be kind of a Christmas and holiday season and everybody will will soon forget based on those reasons.
Pete Mento 10:28
And that's a terrifying notion for the American economy. It's not it's not good for the US economy and it's really bad for our industry. This is a time of year that we tend to really wait on with that cyber five, the freight forwarders and also small package as well. And ecommerce man, ecommerce is desperate for one last good pump at the end of the year. Now will 2024 Bring something better Will 2024 be the year this all starts to roll back? It might not. Inflation might finally be starting to bring all the chickens back home to roost and honestly, Madam, I'm sincerely worried. I'm sincerely worried. And I think that all the doom and gloom that I've been expecting for that balloon to burst and telling you that q4 2024. This is everything starting to really point to a pretty gloomy, January, February and March. And again, we don't give investment advice on the show. I would never I would never go that far. But I'm beginning to really, really get nervous for the first quarter of 2014 for Buddy.
Doug Draper 11:33
Well, Pete, I think they just crank the music up because I pretty much just been listening to the song. Got really loud really quick. So anyway, we're rolling into halftime here and it's brought to us by CAP logistics. If you guys could see behind the camera, the setup that they have, we are literally on a patio with Cassie Bonita behind us. And they're making it all happen. And you know, it's all about Mr. Brightside. So those of you that know if you know, you know, that's the song that's cranking in the background. So cap logistics, thank you so much for putting all together we're having a heck of a good time. So I know Pete's passionate about this one. So I did not bring a halftime topic because Pete is so giddy like a little schoolgirl about what he did last night and the upcoming season that is called the National Football League. So I'm going to make some commentary, but I'm gonna kick the mic over to Pete. He's just sitting here kicking me under the table so we can get started. So standby Pete give us your lowdown.
Pete Mento 12:32
So again, we want to thank West facts brewery here in Colorado and especially their DJ, DJ, screw your show, DJ DJ if your podcast for the music. Really fantastic. So I flew into Denver a little early yesterday because I could not miss the draft for my fantasy leagues. And I love fantasy football, as we know, old Ebenezer Scrooge here grandpa fussy britches does not care about fantasy football. He's He's outgrown that. And as you can see, he came dressed for today like he always does. Miss mister no fun, right? But brunch a couple of fantasy today. The NFL season is upon us. And I wanted to make my predictions. So here are my predictions. My first prediction is you may not know this, but YouTube television is going to be doing this Sunday Ticket this year. So here's my first prediction. It's going to be a disaster. My first prediction is that the number of people calling YouTube television to deal with the fact that it is going to be an absolute train wreck. And abomination is going to be incredible week one. Number two the over under on the number of NFL players who are arrested for a felony before before the playoffs. I'm going to set that at six. So I'm gonna go with the over on that. Yep, so six with the over quarter quarterbacks that are not playing by the starting quarterbacks that are not playing by the by the playoffs to. Okay, more than more than that. Okay, next. I'm making a prediction right now. Tom Brady is not coming back this year. I've seen him he looks super happy to not be playing football. All right. And then my last prediction is pretty big one. Jacksonville Jaguars make the Super Bowl. Wow. What do you got duck?
Doug Draper 14:48
Well, a lot of stuff to digest there my friend. First of all, the over under on broken quarterbacks by the playoffs is going to be closer to four or five. You're going to see a lot of backups that rolling And then some of them are going to crush it. Who was the guy from San Francisco last year party? Yeah, he made a name for himself for sure. But there's going to be a couple of busts. And there's going to be a couple of amazing opportunities out there. The run and gun style and you get some beasts out there that can handle a hit LIKE to a guy got knocked out two weeks in a row right last year. And that's just the style of the NFL, you know, how mahomes gets away with it and gets through it is a credit to him as an athlete, for sure. But I think that there's going to be the running gun quarterbacks of this year are gonna get destroyed. And you're gonna see a handful. So I'm going to say four, I got a little aggressive, there's going to be four starting q by q bees that didn't get it replaced midseason or later that are going to have some pretty good backup. So that's my only two cents on it. I'm not in a fantasy league. I make fun of people in fantasy leagues. I wouldn't put fantasy leagues in the drone category, but it's in the same sphere of influence. And what is it? What is it? Is it the killers that does Mr. Bright sides? Okay, that's what I thought that was the band and the song that was just cranking for the last five minutes that I had trouble focusing. So Pete, I'm giving it back to you for a retort.
Pete Mento 16:15
So for those of you who aren't aware, Doug's idea of a really fun night on a weekend is making sure he gets back from the early bird dinner special at Denny's about 435 o'clock to watch some Matlock and his slippers with a shawl on and drinking some warm milk and getting to bed before seven. You know, making sure that he reads the Saturday morning was Saturday Evening Post. Was that what it is maybe doing some Sudoku? And you know, if he's lucky, if he's lucky. He has a dream of Truman being president again. That's, that's about where he's at. I think, you know, that's, that's his idea of of hope. Yeah.
Doug Draper 17:01
All right. So my comment on this been, it's good. It's gonna validate your statement. So yesterday, we had had a Sunday dinner around 330 In the afternoon, right? We didn't have lunch. We didn't have much for breakfast. So we just fired up some burgers and decided to make it happen. But it was a weekend. So what's legit, and we watched a shoot 'em up movie last night. So we're good. But your comments are not too far off base, my friend. But what's your what's your next thought? Alright, so next topic, we talked about being the year of the labor right and, and negotiating. So we had ups come through with a potential strike and some pretty flamboyant leadership there that came out from from Boston, Massachusetts to make some pretty memorable comments. So UPS got through it. And then the next go around was yellow freight, they kind of didn't make it through. That's a whole nother show and a whole nother conversation about the fallout. But it it's been quite interesting that other than the day or two after they filed for bankruptcy, you haven't heard a whole lot about the the organization of the company, which means things just got absorbed into into the marketplace. But the next one that's coming around is the United Auto Workers, right? They gotta get their feel in it here for the man to 2023. So I have some notes. This is why it's important to take down notes, because I'm going to read some statistics. And then I think I'm going to move to Detroit and join the union. So the first one is they want a 46% wage increase, right? Can you see that on my notes here. They want to restore traditional pension. Now, I'm not sure what that means. I'm sure there's a lot of rigor more in there, but they want to restore traditional pensions. They want an ongoing cost of living increase. So give me 46% out of the gate, and then make sure you take care of me year over a year. And we know the cost of living has really been quite, quite astronomical. My my wife who's a teacher got a cost of living increase, it was pretty, pretty impressive for this year, again, union negotiated. This one blew my mind. And I tried to double check out before we came here, Pete So we may need to validate this, but they want to reduce the number of hours they work from 40 down to 32. So give me a 46% rating or not a rate increase, give me a 46% wage increase. And oh, by the way, I just want to work 32 hours. Well, that kind of makes sense. If you want to have the same income to bump up the wages, and then obviously improving retiree benefits. So some of those are nebulous, but it just my whole point in this one Pete Is it just goes that the big unions are back at the table this year for for negotiations. We saw it at UPS we had saw it attempted at yellow, and now it's the United Auto Workers attempt at it so we'll see how that goes. They've already voted to approve a strike if need be. So the leveraging starts my Friend, what's your take on that?
Pete Mento 20:03
Well, if you have the leverage do it. And given the last couple of years with the way that these car prices have gone up, and the inability of the automotive companies to actually produce the vehicles, we might be in a position to get away with it. But if you want to reduce the hours that you're actually producing, maybe that's the tactic. Maybe that's the tactic. Or maybe you say, you're gonna do eight hours less work to get eight hours more vacation? I don't know, that's the first negotiation taught the move, right? You say you asked for the outrageous to hope for the, you know, hope for the possible. But my gosh, this is almost French in its request, right? This is this is this is almost a European, we're in the middle of the at the end of the middle of August, right end of August right now. And in our business, you're when you go over to Europe, and you ask someone to help you out. I can't tell you how many times they get an email back saying I'll be gone until September the third in this these negotiations feel almost European in their, their requests. I'm jealous. But given the way things have been going in these negotiations, we might get some of this stuff, buddy. Yeah. So I have a feeling we're gonna come back in a month or two and hear that they've actually pulled some of the stuff off.
Doug Draper 21:23
Alright, so the most important thing that you just said Pete was the word oh my gosh, I don't think I've ever heard you use that phrase before. Usually, usually it's f this and after that, but it is impactful for sure.
Pete Mento 21:37
I'm actually thinking they might pull some of this stuff off man, given given the way that negotiations have gone with unions these past couple of years, the political climate, where young people particularly are leaning more left leaning more pro union, pro labor, and younger people coming out of COVID in particular, and seeing the way things went, they've got a shot at this duck. They really do. All right. So should I go to my last one? All right. So first topic, and then I think we might have to prove the Kenan is a real person. My fourth topic is kind of a bummer, man. Couple of weeks ago, there was a news report that American credit card debt has surpassed $1,000,000,000,000.09 billion, a trillion, which is 1000 billion dollars. And that's, that's revolting. And then this week, somebody brought up another great point, the amount of Americans who are taking out personal debt to consolidate their credit, has also gone stratospheric. So something that was brought up recently, is most Americans that are taking out personal loans to consolidate that debt, roughly 30 to 40%, it's hard to get your hands on this are back to the point that they were in personal debt within four to five months on that credit card debt. And the level of interest on that debt is substantially higher than it was two or three years ago because of interest rates. So we are far beyond any debt crisis this country has ever seen before. And it's just getting higher, and higher and higher. We are in a contagion like atmosphere. And we always tell them, we always talk about the future here, man. This is not getting better. And if it continues on this path, young people are going to be in a situation where homeownership, honestly, it's just a dream.
Doug Draper 23:47
Yeah, two comments on that one. Second one. First is we both have kids in that in that age group, you know, my son just graduated from college, my daughter's a senior, and the talk of hey, what's the next stage in life so you can have some financial security as homeownership doesn't exist, not even in their vocabulary, because of this. And I mean, unless you want to move to a small town in the middle of Iowa, which if you live in a small town in the middle of Iowa, it's nothing against that. I'm just saying, maybe a little bit against that. But I'm just saying that home prices are just unattainable. Right. So the other piece of that Pete is that the the haves and the have nots is going to continue to grow with this debt crisis. Because if you have there's no need to take out loans to consolidate your debt. And if you're taking out loans, like you said, it's just going to continue to spiral so it's interesting to see how far is Jay Powell gonna push and push because I just heard the other day they were going to potentially go up again, right at some point, at some point it I mean, it's, it's going to be catastrophic, but the ones that are insulated that won't be impacted as much is the you know, the upper 20 Pretend percent. and it's just gonna make that, that that space dichotomy I can't think of the right word continued to, to grow.
Pete Mento 25:09
At what point to well educated American, young people move to other countries to start a life. At what point do you think I'm gonna move to Latvia or Romania or South America because it's more likely you'll be able to raise a child and be able to own a home there. You think I'm crazy for saying that, but it's not unlikely. So it is terrifying to think about the record levels of debt that people are entering into, and what that's going to mean for trade. If you're unable to continue the consumption economy of this country, it will eventually get to a point where we cannot continue to feed the beast and continuing to feed the beast is what keeps the rest of the global economy roaring. So that's a crappy way to end our very happy Casa Bonita special. So I think we ought to ask Keenan and his really ridiculous gnome shoes to come over here. Luckily, his beard is just gorgeous. Right? So yeah, so Keenan is a real person. He has not done we can't get his shoes in the shot. I really, I don't know about that. I really think they might have been like you're gonna dry handcrafted by my pixie somewhere in Iceland. But they are magical. So Kate is not the shot. Can you get the shot? Yeah. All right. So can we get kicked in the shot? Yeah. All right. So say something nice people can Alright.
Keenan Brugh 26:38
Thanks for watching this week of global trade this week. You can catch us again next week on YouTube, Apple, Spotify, anywhere you find your podcast choice.
Pete Mento 26:48
And again, we want to thank the nice people at West West facts brewery. But again, we don't want to thank the DJ.
Doug Draper 27:00
Well, I'll say that if you're interested in the soundtrack of this, this today's show, just come back and ask them the show and the sounds that they played in the afternoon of August 28. Because I give the soundtrack what would you give our first soundtrack beat I'd give it a seven out of 10.
Pete Mento 27:16
Yeah, about a two out of 10 and I will never listen to Mr. Brightside ever again with the same joy. We want to greet people at CAP logistics. We want to thank the boys in the booth. I want to thank Keenan and certainly, Tim. Thank you, Doug. And thank everyone who kept logistics. We'll see everyone again for another edition of global trade this week. And that's a wrap
Transcribed by https://otter.ai