Global Trade This Week – September 27th, 2022
What’s going on in Global Trade this Week? Today Doug Draper of ACME Distribution and Pete Mento of Mento LLC cover:
4:24 -Amazon’s Latest Logistics Moves
10:20 -Explosion on the Nord Stream 2 Pipeline
14:42 -Halftime
24:00 -CHIPS Act - Acronym and Effect
30:18 -Upcoming Recession to be Deadlier Than Pandemic?
-
Keenan Brugh 0:00
You're watching Global Trade This Week with Pete Mento and Doug Draper.
Pete Mento 0:09
Hello, everyone, and welcome to what could be the greatest investment of your time all week. Global trade this week brought to you by good friends at CAP Logistics. I am Pete mento. And with me as always is the the trip in my gumbo, the sugar in my tea, the clotted cream to my scones. Don Draper Doug, how are you?
Doug Draper 0:37
I'm doing awesome. It's good to be back. And we we skipped a week, which is very unusual for us. We're usually diligent on the weeklies. So lots of stuff has transpired. But first you had a a trip in in Europe last week. So give us the lowdown give us the 32nd pros and cons and enjoying it. Yeah, I
Pete Mento 0:59
planned this trip back in December. And I had no idea how completely off the rails Europe was going to be this week. So we were in Europe, we got there. Before we were in London for a few days before the Queen's a funeral. But it was just days after she had passed. And then we were there the day after her funeral. But the I can send pictures, you know, just the miles and miles of floral tributes and the way the city had poured out its affection for her and you know, say whatever you want about, about the royal family that the fact that that the Queen was a person who devoted her life to public service for that long, I think is impressive. And that is the way that I chose to look at it. I mean, what an incredible act of sacrifice to spend your entire life essentially, living for the people that you loved. And I enjoyed that very much France was. But it was France and going to France with three people who don't speak French, when you're the only one that can manage is not fun, Doug, it is. It is a never ending attempt to explain to someone what the other person is saying when when the other person speaks English and you know, they speak English. They just don't want to talk to you in English. But it was wonderful. The weather was incredible, oldest got engaged, congratulations under Morgan. And then off to Stuttgart because, you know, my son could have gone anywhere in Germany in the middle of Oktoberfest, but decided, let's go to their version of Detroit. He is absolutely obsessed with Porsches. I've owned many of them. He loves them. So we went to the Porsche factory museum, we got to take the 911 tour. It was absolutely incredible. And then to go to the Porsche Museum, where I just drooled. I just drove buddy, I drove for three hours staring at these absolutely exquisite automobiles. It was amazing. And then back to London for five days, of me dragging these people from place to place to make sure they got some form of culture. It was. It was something done. I spent the last three days basically hammered because I'd had enough of being the tour guide between being the only person who spoke German and the other person spoke French, and the person who the hell we were going, I just finally had it. So that was the last couple of days.
Doug Draper 3:27
That's good. Well, what did you expect, right, going out there taking that crew.
Pete Mento 3:32
I expected that people in their early 20s could handle a little time alone, Doug, that's what you know, Google is here. You have to talk to anybody to go shopping at Louis Vuitton. So just do whatever you got to do. But I did drink all the wine and ate all the cheeses. It made me very sick because of the diet that I had been on. So I am a recovering as far as that goes. But I'm, I'm so happy to be back in the States. Middle of football season. And to be back on the show. Thank you for for asking.
Doug Draper 4:05
Yeah, yes. Well, it'll be a a momento remake of the Griswold family European vacation. So the good news is that Keenan can throw up some pics if you want to toss him up there. Well,
Pete Mento 4:17
I can't. I absolutely could. Yeah, that'd be a lot of fun, actually. Yeah. So. So what do you got for us, Doug, you're going first this week. What's first topic, pal?
Doug Draper 4:26
All right, man, we're gonna kick this thing off. And it was a topic that I popped up last week that I thought was still important enough to roll over. You know what, Pete? When I was looking at tarp, I'm like, Oh, my God, one week off. There's just a lot of stuff that is missed, right? I'm like, I've got to talk about this. I got to talk about that. I got to talk about this. And I'm gonna stick to to the plan from from last week and dribbling a little thing at halftime. But this is really about Amazon double downing on being a true logistics provider. Right and It caught my attention. So there's this group a company out in Europe called Vigo FEV. Geo Figo, it's a free shipping platform. And it's essentially gonna allow Amazon sellers the ability to shop rates from all carriers. So it's not a full blown WMS. But you want to get in there and shop and your rates, check rates, the two things there is number one, it's free. And number two, it's giving people access to carriers outside of the Amazon network. It also is going to integrate into eBay, Etsy, Shopify, which are all kind of rivals, if you look at a big picture of Amazon. So they're giving away free software that allows you access to other carriers that provide delivery services. And it's integrating into companies that basically are a marketplace exactly like Amazon. So that gives me pause, then they're going to be moving into from what I've done my research on is they are going to generate a WMS warehouse management system and order picking software. So it's empowering their focus not only on on their marketplace, to be more efficient, and how they how they move. Beyond that it's 450 million bucks, they invested into giving rate increases to their contract drivers, which is their delivery, delivery platform. And then they have this thing called next mile, which is essentially Academic Access and online classes that if you're employed by one of those delivery service providers, you can better yourself through education, and they will provide stipends and help you get that done. So I don't know, you know, Pete, you and I talk about here's what's going on. And this is why the forward lane that I'm trying to bring to this is that I don't understand why they're doing it. I truly don't. And if our audience out there has some suggestions. In this crazy day and age where ecommerce consumption is reducing, you saw some of the numbers from FedEx last week, related to what's going on. I don't understand why they're giving away free software to access their rivals, which dilute their share and market position. And they're providing an integrated software to get access to other market places like eBay and Etsy. So I haven't, I don't know, I can't figure it out. And I wanted to come to the program today Pete in the show and say, as crazy as it sounds, this is why it's happening. And I haven't been able to figure it out. And you know what, that's okay. We don't always have all the answers. And we're very forthright about that. So I'm not really sure how to take or digest all the things I just mentioned about Amazon.
Pete Mento 8:01
Just thinking about this before the show, but here's here's my here's my kind of half cocked take. You know, there's that great line that when you're not being charged for a service, the product is you. Yep. And I would imagine that if you have access to that information, and then you have access as the person who gave that customer entree into it as to who they pick and why and what they use, you're gathering an incredible amount of data. And as the largest platform on planet Earth at this point, it's going to allow you insights into the behavior of not only your suppliers, but of their customers, as well as their purchasing strategies. And you know, Amazon has had some issues in the past where they were accused of gathering data in order to make their own version of products or in order to get in front of a high selling product and make one of their own. This is just another instance where by employing the x, in my opinion, you know, the transparent opportunity of that information. What they're allowed to do, what they're going to be able to do is gather more information about the behaviors of their suppliers, and in doing so, put them in a better position to create forward looking products that are going to be more effective and probably have a bigger, stronger hold on them going forward. So yeah, in the short term, maybe they're opening up more competition, I would argue that Amazon may not believe they really have serious competition. But at the same time, they're also gathering more and more important data that can be used to develop better products. I'm with you, though. I'm not real comfortable. giving people an opportunity to find alternatives to what I think is the most profitable outcome when I'm when I'm a company like Amazon, but there's gotta be there's got to be gained to it somewhere. And that's the only game I can think of.
Doug Draper 9:55
Yeah, well, that's very astute and you're right if you're, if you're getting some for free You're probably the product. But yeah, it's just gives me pause, man, something's going on there. Amazon's a Smart Company. It just gives me pause. So anyway, much smarter
Pete Mento 10:09
than me, pal. I mean, you know, they've probably got like a decade of thought that something like this, and I know you and I've been thinking about it for a couple days.
Doug Draper 10:17
Yeah, for sure. All right, man, you got some heavy gas and some fire on your topics today. So let's, let's
Pete Mento 10:23
speak at a gas. So, you know, big, big news. We're recording this today, it's September the 27th. It is 1323 eastern standard time that a huge, huge news news story that came out is that there was an explosion on the Nord Stream two gas pipeline. And Russia saying we don't know anything about it. But at the same time, the engineers that are engaged in this pipeline are saying that the likelihood of an explosion of this type is one every 10,000 years. It's long story short, the Nordstrom to pipeline now has a leak in the middle of the, of the, of the of the transit process. And it's, it does not take much of a leap of faith to consider this was sabotage to consider to be what it really is which the English and the Germans are calling it, which is a legitimate terrorist attack on the pipeline, in order to cause even more economic pain to the countries that are backing up the Ukrainian regime in their fight against Russia. So you have to look at this long game, right? Like why why continue to do this? Why continue to tighten it up even more, make even uglier for them? And it's because these countries that are supporting them, are allowing Ukraine to have some degree of success, and the biggest one being the United States. So what does this have to do with us? We don't, we don't benefit from the Nord Stream pipeline. But we do. Because this is going to limit even more the amount of natural gas coming to Europe, or the likelihood it's going to come to you. Essentially, this is going to mean, the United States and Canada are going to export even more of our natural gas. We have only so much of this stuff to go around. And if we are exporting more of it than usual, that creates scarcity in North America. And everybody that took macro economics 101. Mine was with Dr. Shashi Kumar, one of my favorite professors ever. And he told us in our very first class, this is going to be nothing but 12 weeks of talking about how supply and demand make everyone's lives either great or awful. Okay. demand will continue where it's always been. But the supply is coming from a place where demand is also continued where it's always been. But our supply is going to go down, because we're exporting so much of it disappoint our strategic allies overseas. And that means the prices will go up. Like it or not, buddy. This puts pressure on us and makes people question whether or not we should continue to support Ukraine in their fight against the invaders. This was dastardly, scum beggary. And I'm willing to bet you all of my favorite saints jerseys, that it was done on purpose. This was an intentional act of sabotage. And it's definitely going to get noticed, I just got back from Europe, can't have a conversation without people talking to you about a winter is coming. I literally saw people stacking wood while I was in Germany, in their houses, preparing for winter. And ask them, Is this something you've always done? And they said, No, we've learned as much as we can. We've gone to our family's homes and bought wherever we could to bring it back in. We're going to do everything we can to avoid using natural gas electricity this year.
Doug Draper 13:56
Yeah. Well, I love the fact that you brought this up because literally, it's within hours. Right. So the beauty about this is that Kenyan will drop this this afternoon. No pressure, Kenan, and we'll be able to have some discussion, but the narrative has changed away from not Russia's invasion, but the ability for others to stave it off, right. And there's all kinds of news press about Putin's this. He's worried about this. He's worried about that. So without question, this was intentional and they're hidden you know, the spot that it impacts the immediate consumers but like you said, the macro piece of it, so yeah, it's interesting, man, it literally just happened. So we'll have to see how that shakes out. But excellent topic, and I agree with everything that you say.
Pete Mento 14:42
That's ugly, man. But let's get on to something a little more. Haha happy happy. Yeah. It's time for halftime. Brought to you by our good friends at CAP logistics. For one of our more about CAP logistics we we implore you please do check out their website at cap logistics.com They're the ones that make it possible for us to bring you this content every week and the 1000s of you who take time out to watch it. Listen to it. Continue to subscribe. Please continue to tell your friends. And with that, Doug, what's Topic number one for halftime?
Doug Draper 15:11
Yeah, like you said, we're pivoting. So this is the infamous US News and World Report. Best Colleges that dropped this fall every year happens. sucks about just exactly what that is the best colleges, it caught my attention because you and I both have kids that are in college, right? So it's irrelevant, it's irrelevant to me, it's irrelevant to you. And you dive in deeper. So a couple of fun statistics or maybe not fun. But but interesting that 19 of the top 20 schools on the list cost 55 grand or more per year to attend. Right. I don't think that's coincidental. SATs and AC T scores are becoming more and more irrelevant, you're seeing a lot of a lot of schools that are taking it as optional, you can always take it. But it's becoming optional, most of that was due to COVID. That's something that they talked about in the report, alumni donations in diving deeper are a big factor, right. And you look at the largest endowments of private institutions, I bet of the 19. At the top 20 I just mentioned, I bet 15 of those 19 have endowments that are astronomical in size, and that factors in and then this is something I didn't know 20% of the score is what they kind of defer is the popularity contest where they ask other academics, right to qualify in an academic environment, their peers. So it's basically saying, hey, what do you think a Harvard, hey, what do you think of of Yale or Princeton, and it's like a self fulfilling prophecy. And then here's the one that caught my attention, Pete is that Columbia was just recently called to the carpet, about outdated. I'm using air quotes here, outdated and incorrect methodologies submitting their data, which is a very PC way of saying that we haven't been telling you the truth. And over that period of time, they went from the eighth number 18 on on the report up to as high as number two just last year. So the whole thing is a farce. It gets a lot of a lot of press. But you know, the bottom line is, yeah, I guess it's interesting to know, but the whole idea of the traditional four year college and this is a whole nother show, Pete because you and I both have kids that are in the trenches involved with this is just going through a paradigm shift like nobody's business. So my point here is I wanted to bring it up, and just the absurdity of it. And that's about it. So here's the top five, Princeton, MIT, Harvard, your alma mater, Stanford and Yale. And I have to give a shout out to my university Kansas Jayhawks, where we came in as number 121. Well, we still have the best basketball team in the country. So anyway, I'm done. That's it.
Pete Mento 18:11
Well, if only having the best basketball team helped you to become employed once you graduated with a degree in engineering. Here's my quick take, Doug, because you know, this topic makes me crazy. The number I just checked it to make sure that the the number for school for best bang for the buck in America has made Maritime Academy number three, kings, point number five, mass Maritime Academy. Number six, Texas a&m Maritime Academy, and number nine, New York Maritime Academy. If you're not going to school to graduate immediately with skills, it's a waste of your time. According to this report, the average graduating salary for a student who graduates from Maritime Academy is $146,000. That's the average. What is the point? I have two kids in college right now. One goes to MIT. She wants to be a software programmer. She's brilliant. The other is basically a professional rugby player. It's no other way to put it go golden flyers big game this weekend. But you know, when you're gonna play a sport, just like you said with Kansas, a lot of the decisions that you're making are based on the coach the visibility to national and professional programs and your chance to play concise competition should be the same for academics. Are you getting the best possible bang for your buck with these professors? I don't know that you are any more powerful. I don't. I don't. Harvard is nothing but marketing. It's a complete waste of your time. There is nothing going on there other than making relationships you can't get anyplace else. If it's about meeting important people and building relationships good for you. But people are always impressed about where I went to college that not so impressive what I learned. Everything important. I know about global trade, everything I know that's about international relations I learned through doing an RS is a business of learning but Ideally, I'll tell you this what they don't teach how to do at Harvard. And that's silly airfreight. So don't get me started. All right, what you might have time for this week was my trip to Europe, man. So I got out of my, you know, like cabin on the shelves that was a and and I was about to walk across and there was a bike path there. And I almost done when I tell you that. I don't know how fast this guy was going on as the scooter. But there's, there's a good I mean, there's a physics question here about whether or not this 170 pound French dude. If he hit me doing about 30 You know that I'm 265 pounds right now, if he were to hit me, I don't know who would have won that physics competition. Me or him. Because he came barreling up this bike path that I admittedly did not realize was it was a bike path, right. And I was in the way it was my fault that he came to a screeching skidding stop in front of me. words were exchanged. Some things may have been said about our, you know, shared ethnic values. But it was not the first time through the course of my trip in Europe that I saw everywhere. E bikes, e scooters, every time you would go into Uber to try to go somewhere, the lime scooters, the bikes, they would pop up there, people taking the rental bikes, you know, you can throw in a couple of Euro and you can use a bike for the distance you want to go and then they charge it there. And so the embracing that people have taken their to using this as a means of transportation is until you see it. You won't get it. I've been in Boston a bit in New York, I've been in LA and in Chicago, blah, blah, blah, blah. It's nothing like it is in Europe, I watched an old lady in Germany, on one of these lime scooters, blasting past me. When I was stuck guard that on her back, she had all of her groceries, she had to be in her 70s done just going right past me like it was an f1 race. And she was hanging on it like Tony Hawk on a skateboard. She was ready to rock and roll. This was not her first rodeo. If it's any indication of what we're going to see in this country, that business, that whole platform of business is going to overtake so much we have all these kids who can't drive, but want to learn how to drive live in cities. And we don't have the kind of infrastructure they do buses and subways and light rails. This is going to go somewhere. These these electric bikes and these electric scooters are gonna go somewhere, unless you live in like Chicago, or Minneapolis and winter comes and then well, you might want to buy yourself a pickup, but I was blown away dogs everywhere. And I don't know why I was so surprised. But it really did get my attention.
Doug Draper 22:48
I think the key thing that you were two things. Number one is the infrastructure, by far and away is, you know, a set up more. And the other thing is that most people that may not know this who don't have kids in this area, but kids don't want to drive when you and I were growing up. I mean, if I can get my learner's permit 15 I had it 15 years in one day, right? Yeah, kids now just don't not have an interest in driving. And so but then you still need mobile and they want to get around, they want to do their thing. And you don't need a license to jump on a scooter. So I think that demographic is going to be but the challenge is the infrastructure is different. So talk about Tony Hawk, you got to know how to maneuver and where the hell you're going in these big cities. But I think those two things combined are going to make that industry continue to grow.
Pete Mento 23:36
Doug, you bring up a great point, the number of times I almost asked somebody just bite it, because they clearly were not. They weren't used to writing just like I'm sure if I jumped on one, I'd look like an idiot. But there are people who probably should not have been whizzing through the streets at that point that were just they were an accident waiting to happen. So I think the law will eventually catch up to the SEC, for the fascinating one for sure.
Doug Draper 24:01
So my topic too, is related to the chip, act chips, plural, creative. I love acronyms that the government comes up with because somebody back there is just cranking out stuff that they're trying to spin it so it has some relevance to what they're talking about. Here's chips, creative, helpful incentives to produce semiconductors. Now, the normal acronym guy must have been out to launch or on vacation because that's pretty weak. But anyway, the gist of it is it's federal aid to encourage construction of micro micro processor manufacturing facilities. So 93 Or excuse me 39 $40 billion in subsidies and tax incentives to build. And the one piece that's interesting here is that if if you do get those subsidies and tax incentives, there is a ban. So if you're a company that builds a plant in the Arizona and New Mexico, Ohio and Texas seem to be some pretty popular states. So you lay down the ground you take advantage of the the incentives and the subsidies is that you have a ban from producing chips that are more advanced than 28 nanometers in China and Russia. So I googled What the hell's a nanometre? I still understand that. But I said, What does it do for me as a consumer, and those are the microprocessor chips that deal with phones and automobiles, and electronics and entertainment, and kind of the internet of things. So most of the things that you and I would interact with, so 28 nanometers, and less you can still make in China and Russia anything more powerful. You cannot. So here's the deal. And I always try to have a forward lean peak as we talk about that. Number one, you don't just build a micro processing plant, like next month, right? So this stuff is years out. This is not a short term fix. I'm I'm glad that they're doing it in these in the states that I had mentioned. But this isn't a fix, that's going to happen anytime soon. The other thing is that the plan consists of government liaisons that helped facilitate the process. So that means you got a government guy going into Austin, Texas to try to facilitate local and state regulations. So it sounds good, but I don't know what a government liaison is going to do to expedite anything. And really, don't you think so this is the last piece on this one is don't you think everybody in the entire world is aware of a chip shortage. And if you already have a plant, and is already making chips, why don't you just amplify that and run these things, 24 hours a day, amp up the labor facility capacity, long term contracts to make sure you can keep things in place. So I love it, I think it's a great idea. It's not a quick fix. And everybody's aware of the shortage. And so those that are already making it are going to come up with some creative ideas to turn the jets on and help a flood the market and take care of those that need to consume. So here's my take on the chips act that just broke down.
Pete Mento 27:19
My first response buddy is boom, I got some feedback there. My first response buddy is you know that there's some junior staffer who they for the next 20 years. And in my in my in my version of this, it's a guy who went to like, Clemson and his dad who was like 11 car dealerships got him a job working for the Senator. Right. And he's gonna be like in every party. Well, you know, I'm the one that came up with the acronym for the chipset. Yeah, there's that guy, right? Or, or that that young staffer to man or woman or whatever in between. But, you know, there's a, there's a person who's going to get free drinks. And that is going to be their interesting topic of conversation. For the next 20 years. Oh, this is my friend, whatever it says my friend, Sierra, and he's the one that came up with the concept of the chips Act. The idea of it No, no, simply the man. Yes, he spent the entire weekend on making sure that it meant chips, as he put together you just say looking all smug and share was off? Yes, actually, that was me. So happy you brought that up, I'd love to talk to you about my process for getting there. And then you know, they they call this guy up, whenever they come up with another one, you probably parlay that into a six figure, consultant job. But I love this act for all the reasons that are diametrically opposed to who I am as a free trader. What we're basically saying is, we're building here, we're using federal money, and if you dare ship this stuff overseas, we will burn you to the ground, he will economically destroy you, right? Like, there's there's this antitheism sort of concept that we're being kind of Chinese buddy, where we're saying, like, we're gonna support this, we're gonna help you with this, but dammit, this is for America, and for the people we care about. And to make sure that we we don't have to depend on China before why stop the chips, man? Or stop the chips. We've got a whole list of crap that we need an Africa like shipbuilding as a great example. Okay. But as far as ramping up everything, you know, I don't know that I honestly don't know. But from what I understand, getting the raw materials to make chips isn't exactly easy. And, you know, we do have access to that. So it's just a question of, can they make them quick enough? Do they have access to raw materials, you know, quickly enough to get there? One way or the other? A time will come soon, when the market will be flooded with chips, and we're going to ask ourselves was doing this really necessary? Because we're making a crap ton more and we're selling them and you can only buy it from certain producers. I just I I just see this being economically. You know, regrettable somewhere down the road when we should be putting all this money into looking for a type of semiconductor that is not chip based. That makes a lot more sense.
Doug Draper 30:13
Yeah. Excellent points. All right, bring us on my man what you got?
Pete Mento 30:18
Yeah, so this topic sucks. This should be like a we do halftime and you talk about something super positive and I'm like, no everyone's gonna die. The WTO came out with a recent statements today, as a matter of fact saying, Hey, everyone, not sure if you've noticed, but we believe that there's going to be a global recession. So thanks, Captain Obvious, you know, none of us realize that. And the other half of this was, it's going to be worse than we ever thought. So rather than 4.7% growth, I think 4.6 That they were that they're expected to do the same three. So that is a huge drawdown that is normally these guys talk in terms of like a quarter or a half percent, but to go that big is pretty damn big. And they said that it was going to affect mostly developing economies. So not the kind of economies that, you know, we normally talk about on the show, not the China's the Western Europe's, the US MCA is of the world, but more the Sub Saharan Africa, parts of the Middle East, certainly the less financially stable parts of Asia. And, you know, to a degree Africa. So why do we care so much? I, I try very hard to explain to people, the complexities of economics and whether they can understand. So here's, here's the headline, more people, significantly more people are going to die, because of the economic conditions that our response to the pandemic caused the pandemic. And I can, I can hear people's heads blown up all over the internet right now. Well, I say that. Here's the fact of the matter. I'm looking at the stats right now, buddy, the, for every 1000 people in the world, you had roughly somewhere in the neighborhood of one that passed away from COVID, over a span of 24 months. And that number now is drastically decreasing. So So deaths from COVID, although people get COVID and makes them sick, and it takes down our our ability to be productive. But more importantly, you know, the didn't really affect child mortality. To economist, you might want to take some time to read about put out a report Nutan Doran Hoffman, and they put it very simply point eight, we get the number right here because I don't want to misquote them, point eight to six people per 1000, globally, will die because of this recession. So for every 1000 People 8.8 to six people, so less than a person will die. So like Well, that's less than one Pete, this global recession is going to last for five to eight years. And it's going to affect the developing economies worse than it's going to affect the developed economy. So although Western Europe and Asia and the United States may recover in 24 months, it could take as much as six to eight years for parts of Africa, Latin America and Asia to recover from what just happened from COVID. It's called the bullwhip effect. The really scary number is that for every 1000, we increase child mortality by four. So four more children are going to die per 1000, because of this recession, and these are, by the way, conservative numbers. And those numbers spike in developing economies. So that's a global number, the response to the COVID pandemic and what we did to our global economy to shut it down, and then not restart it very quickly, is going to kill significantly more people than COVID itself did. Now, I can also wrap in unemployment numbers, right. So you know, you have a lot of a lot of people don't realize this, but you have 1000s of people who died 40,000 people for every increase of one point of our unemployment in this country. And that along with, you know, access to people being sick reductions of productivity, that's a Western economy. Can you imagine what that's going to mean to developing economies that are not going to see any type of stability that are already facing famine that are already facing problems with food insecurity. The pictures that are coming back right now from Ethiopia, that are coming back from all over Africa right now are heartbreaking. It's not going to get any better. When we're worried about paying our own rent. And with gas prices rising and natural gas prices rising, keep our own family warm. I shudder to think about what it's going to like go into those countries. Doug, we have Have a very dark couple of years ahead of this dealing with the financial ramifications of what we did to keep our economies running during COVID.
Doug Draper 35:09
Yeah, well wouldn't be appropriate if you weren't, weren't wearing a black hat and a black T shirt with that kind of messaging Pete seems to happen frequently. But a couple of things. One is I think the roaring 20s are over. Right. We hype that, especially myself. When everything came out of post pandemic, I think we're seeing things from your first topic to this topic, to other recessionary discussions that we've had, I would say the roaring 20s are coming to an abrupt halt. The second piece is kind of goes to your macro economics comment earlier, is that it's a first world and a third world problem, right? Until the Third World numbers and implications that you described affect the first Worlds, it's not going to get the press, it's not going to get the needed assistance that it needs. And so it's, it'll be there. I truly believe I, I love the fact that you said 24 months for first world type of countries, and then you reference, you know, for five, six years, and unfortunately, in my opinion, that if unless it's directly impacting us, and there's some type of macro effect, what I'm doing on my day to day basis, it's not really going to matter. And I think that is a horrible statement that I just made. But part of what we do here, Pete is tell about the truth. And that's my personal opinion. It doesn't mean that it's right, doesn't mean it's wrong. It's just my interpretation of what you just said. And it's horrifying that I just made that comment.
Pete Mento 36:47
Now, well, you know, the two of us have always been a little bit on the side of all he is love on this show, you know, and I think if I can say anything, it's as the world begins to ask for help, we'd all do what we can to help. We all need to reach out in whatever ways that we can either through our timer, our treasure to help people in need, I just think is going to be a lot of people in need. But I put a statistic up today on LinkedIn, the single largest asset class on planet Earth is the Chinese real estate market far surpasses the US stock market far surpass so and they're in a 40% decline over last year, as far as the number of sales and new home builds all of it. And they're saying that the next year is going to be even worse. Nobody's talking about that. What's that going to mean? For the massive population of China that is not involved in high technology, middle class growth, China is still a relatively poor country. And these are the sorts of things that are going to affect that part of its culture. And that part of its economy will have a trickle down effect on the rest of their economy and their ability to be productive. I don't think we realize how fortunate we are here. And those of us that are fortunate have a responsibility to people who are not to do everything they can in their power to be helpful. You can disagree with me, but that's just how I feel personally. So although it was a doomsday kind of conversation today done, I think it gives us all an opportunity to pause and think about what we can do. Remembering how scary those times were to help people or in scary times.
Doug Draper 38:14
Agreed. I love your time and treasure, if more people would donate their time. That's where the personal connection is treasure is you just write a check and hope the problem goes away. So I love the fact that you ended up with that. And that is the end of this week's edition of global trade this week, as Pete mentioned a couple of times. Cap Logistics is the group and Keenan, part of the cap family makes this thing happen. We get off the rails time and again and we have personal opinions which I think cap logistics for letting us say and talk to our audience about so cap logistics.com Check them out your logistics supply chain needs. Pete That's it, my man. Great show. Appreciate it. I'm glad we're back in session and have an excellent week.
Pete Mento 39:01
Thanks, buddy. See you guys next week. Take care everyone