1929 Crash AGAIN? Wall Street Whisperer DIRE WARNING

Turning now to the economy, a blockbuster new interview with Andrew Rastorkin, who's got a new book out, 1929 says a crash could happen again, referencing the great crash that caused the Great

Depression. Let's take a listen. And in the 1920s, people were saying stocks were going to go up

because the entire world was buying into the US. I think that's very true. I would actually

specifically point actually to a technology story back then, which was- Radio. Radio. The ticker symbol was radio. The company was RCA.

They also, by the way, not only had the technology for radio, they had the patents for television. And that was the NVIDIA. I mean, that was the meme stock of that era because people were buying into this future

that we were all going to experience. And they wouldn't have been wrong, by the way. The conundrum is, I think the stock split adjusted at the peak was like, got to 530 some odd dollars, and by 1932, it was like $3.

So, there you go. He's making some parallels there about the parallels between today's market and the 1920s. Obviously, you could probably say that at any time about some stock. People have been talking about crashes

and all of that for some time, but it's looking a little bubbly, I think, if you ask me. I spoke to a friend recently who said, if you really wanna be scared, it's not March of 2000, it's January of 1999. So we're still at the early part

of where things might go for the dot-com crash. I think the parallels, I think what scares me the most are those insular deals that I haven't stopped talking about here on the show. Because that's the type of stuff where you're like,

yo man, this stuff is not just fake, it's fake beyond fake, and everybody knows it's fake. Like a self-licking ice cream cone in front of a deal. Right, so it's like OpenAI announces a deal with a company. That company gets 10% of its stock to OpenAI. Then the stock goes up, and then the amount that they're paying is covered by the overall value.

And this happens over and over and over again, which AMD, Nvidia did it with another company. OpenAI just announced a deal with Broadcom. It's like they have figured out their secret sauce, is that investors are so bullish on the promise of AI that even when they put cash out the door, as the cash out the door is enough for a requisite rise in the stock,

that if they take the stock, the value goes up and it's effectively nothing there. When in reality, nothing has happened. It's a five-year deal.

Who knows?

Chips is a hard business. Can they really make them? It's not that easy, as we've all figured out. It's been a few years since the CHIPS Act. How's that going? Not particularly well in terms of our production. It's literally probably the hardest manufacturing business in the world. And yet, it's all premised on, oh, we eventually are going to get to a place of AGI and the profits and all that are going gonna be so extraordinary and so unbelievable.

And right now, the reality, it just doesn't exist. I was telling you guys yesterday, as the audience knows, I've been watching some more NFL. It's pretty crazy and weird to watch Microsoft Copilot and ChatGPT running consumer ads on the various networks. So for example, Microsoft Copilot is running ads right now

about that dumb animation, like turning a photo of yourselves into anime. And they're like, Microsoft Copilot, where you can free image generation for everybody. I'm like, really? That's what you're selling to people?

That's the promise of Copilot? Same with Chat GPT. They're like, use it to plan a vacation or something. And it's like two brother and a sister driving through the mountains. And I was like, so that's what all the data centers and all

this shit is for?

Is for this?

It's for glorified Google, basically.

Right, like Google+, right? Gemini, right? I mean, if you look at the ads for these, it's not impressive. was sold as, now is it a good research tool? Sure, does it help some efficiency a little bit and all that? Yeah, but that's not worth the hundreds and hundreds, trillions of dollars of market cap

of where we are. So that's why I'm starting, I'm just getting very nervous. But you know what my cope is and why the market can't crash? The whole economy is fake. This shit is way more fake than 1999. Back in 1999, we actually had, we made shit in this country, like actual stuff. We had a lot more fundamentals.

All of the bonanzas and all that, a Wall Street subprime and all that hadn't happened yet. A lot of the fakeries and terms of accounting, et cetera. This is pre-Enron. So it's like, when I start to think about where things are today versus then,

I think we've actually gotten much more sophisticated at washing all this together. At building the house of cards and keeping it going. So maybe it can't crash. Yeah, I think we put the superglow down. And now it's not as easy to crash anymore. I could be totally wrong, but that's my cope.

I don't know. And here's the thing, there isn't a lot of indication that that is happening yet. And we know that the vast majority of AI applications are not profitable, like these companies that keep spending, spending, spending more money and acquiring different other companies, and their stock keeps going up and up and up. It's not like they're making money on any of these investments.

So that's a bit of a red flag. So on the one hand there's the risk of this technology doesn't really pan out to be as you know transformational as it was supposed to be. And at some point there's a reckoning with that and that creates a crash.

The other possibility is that it is as transformational as being promised and it creates a mass like layoffs. And societal tumult so it's kind of a distressing story, either way you cut it.

You know, the other piece of this is that with, Emily and I covered this yesterday, so I wanna get your take on it too, with the China trade war stuff. China really holds our fate in their hands right now. If they wanna pull the pin on us

with regard to rare earths, they can do it. Now they have vulnerabilities as well, right? We're very interconnected in terms of our economies. But that's why on Friday, when they were like, oh, we're going to up the export controls on export restrictions on rare earth minerals, why there was such an instant market freak out, because they, I was just looking, China controls about 70% of global rare earths mining, 90% of refining capacity,

that's a really important piece, and 92% of these type of magnet production that are critical for motors and EVs, wind turbines and defense tech. All of this is very critical also for AI. So if our entire economy is a bet on AI,

and we're deeply, deeply reliant on this country that Trump is set on antagonizing, that's a really dicey situation to be in as well.

I don't know, with the China thing, yeah, you're absolutely right about the rare earth minerals. I just don't know how much of the trade fight is fake. It's like one day it's 100% tariff, the next day it says it's not going to happen. By the way, as we are speaking, the Dow is falling, the expectations, because of US-China

tensions resurged, even though it went up over 1% yesterday when it looked like China tensions were cooling. All I know, broadly, is that, yes, we have serious fundamental and strategic risk whenever it comes to China. And there were a lot of easy ways to get away from that. As in, not just chips, but even this, I mean, look at the, every tax bill, every time you touch the US tax code, it's a massive missed opportunity. It's a zero-sum game. We only open

up the tax code every five years. So every five years, you have a bite at the apple to actually do something. And in this particular case, they didn't really do much to boast any American manufacturing in the critical sectors that we need it the most. And our trade policy is so schizophrenic. Are we really prioritizing rare earth minerals or not? Not really, right? It's all just scattershot. It's not serious. And in the interim, at every year, China continues to go exponential. Now, I've seen a lot of criticism about, oh, you're glazing, listen,

we can acknowledge all of their problems. Authoritarian government, bureaucracy, you know, a lot of it is for show in some cases, like the bridge, for example. There was some criticism of people who covered the bridge, like, oh, you're buying into Chinese propaganda.

I'm like, well, you know, even if it is a bridge to nowhere, it's still a remarkable engineering accomplishment. And the truth is, is that that's the way that they get the rural population on their side. I encourage people to read Dan Wang's book. People who live in rural China have watched in 20 years

a literal exponential increase in their life. Now, compare that to Appalachia, or to this, I was just looking this morning at a graph of life expectancy. Southeastern United States has life expectancy 20 years lower than the rest of the country.

Who is doing anything about that? Is anybody doing anything about that?

No, okay?

And so I look at that, I look at the housing price. At the very least, the CCP pretends to give a shit about your problems. Sometimes they're actually really good at it, at solving them, sometimes not. They give you a lot of propaganda, but they don't even pretend here.

What I admire is the level of seriousness for the critical industry and for their long-term thinking. I mean, people laughed, including me, at Made in China 2025. I remember when I came out, I said, this is a joke. It's true, it worked. I would say the vast majority, if you go back to 2015 and read the documents, most of what they set out to do,

which is declaring independence in batteries, critical minerals, in airplane production, and in high-tech manufacturing, I wouldn't say they won entirely, they haven't achieved total autonomy, but they made a lot of progress.

Now compare the same rhetoric of 2015 in the United States about the pivot to Asia. Where are we today? How's the pivot to Asia going? It's literally 2025. What's the lead block of this show? Israel Palestine.

Who's Trump meeting with on Friday? Fucking Zelensky. About you, like, oh, what? That's literally two conflicts of no importance in the grand scheme of things to the USA. And that's what everything is focused on,

not to mention all the dollars, all of the attention in Washington. So it's like, that's what I'm talking about, is you have to zoom out. And I've seen this stuff from afar, you know, literally here in the city

for the entire period of 2015 now to 2025. And I think we've actually made less progress if you look at manufacturing, if you look at the level of seriousness, divided politics, life expectancy, even COVID. We criticize them for zero COVID.

I certainly did. I thought it was incredibly stupid, but it turned out, you know, what they were able to do was actually exert even more control over their population. People predicted that that would lead to rise up in the,

hasn't happened, literally hasn't happened. So we have to stop putting our own values or expectations on this other country, and we need to live in ours. And the truth is we live in a financialized bubble where the cost of living is unbelievably high for the vast majority of people

who make under $100,000. That's just, that's the truth.

And that's not the truth over there. The life expectancy thing doesn't get talked about enough. Oh no. It's such a basic metric of how your society is doing. And when you see life expectancy, like, not just flatline, but actually falling, and you, you know, like,

that is such an indictment of a society, and it is also such a clear indicator that you're gonna have some fucked up politics too. That is like. Russia, 1990, there you go. Almost 100% certainty.

How do you think Putin came to power? People are like, oh, he's so authoritarian. He just came out of nowhere and he tricked the Russians. I'm like, oh, he tricked them? Or they were massively alcoholic, they got their economy destroyed,

their population decimated, their empire was torn apart by the West, then the West created NATO and started marching it forward. Now this stuff doesn't just happen in a vacuum. That's the exact, and not excusing Putin, we can sociologically understand why that might be traumatic for a population.

You're exactly right here in the US. You have almost 10 years now of declining life expectancy, massive obesity, pre-diabetic. Yeah, what do you think is going to happen? Where do you think Maha and all of that comes from? People are so furious.

And then urinized health insurance premiums are about to go double, all right? People are gonna go radical. People are gonna go crazy when you start paying. I'm already paying like $9,000 a year for health insurance for me, my wife, and my daughter, one kid. All right, so $9,000. I have a $14,000 deductible. $14,000. That will wipe out any average person in this country. Wipe out one

medical emergency, you're dead from a bankruptcy perspective. So put that on everybody else.

Yeah.

And just think about where that's going to go.

You know who has something to say about that? Marjorie Taylor Greene. Yes, that's gonna go. And yeah. You know who has something to say about that? Marjorie Taylor Greene. Sounding off on prices and has been sounding the alarm about the spiking health insurance premiums that are on the horizon. Let's go ahead and listen to that.

Costs have not come down. I myself can tell you my apartment here in Washington DC, the electricity bill is $100 more than it was last year. because you can look at your own bill and look at costs. Prices have not come down. That is a reality. People's wages have not gone up. That's another reality.

And so Americans are continuing to have a very difficult time.

The thing that's amazing to me, Zagar, is this is so basic. Like, it's so basic and so obvious, and everybody knows it, and yet for her to say it is like really remarkable.

It feels really remarkable. Because Trump demands, because Trump and the Republican Party demand fealty. You're not supposed to talk about it when he's in office, the tariffs, the economy, and all of that is booming, and she's like, no, this is the reality. I think what I give her credit for is she always speaks, at least more recently, from from a point of view as a mother and as a congressman of this district. She talks about her children and about their economic, I mean, I think that is the only way

that a healthy society can look at the political problems, or not only how does this affect me, how does this affect the next generation? Looking at you, boomers, looking directly in the camera at you, it would be nice if you guys started

to think a little bit more like that. But that's the issue. You know, I see a recent clip, I don't know if you did, of Ron DeSantis talking about when you buy a TV, you don't have to pay taxes on it every year, comparing it to property tax. That's what he said about a TV.

Yeah, that's the same thing. You know, the TV, apparently, you need roads and all of that to operate a TV. I'm gonna lose it when I watch this stuff happen because, let's put this Wall Street Journal piece, please, stronger growth, weaker hiring. Forecaster C, a split screen economy. And what is the split screen?

It's exactly what we keep hammering home here, is at the top 10%, things seem fine. At the rest, below 100,000, yeah, it's not fine. And the split-screen economy is one where, without AI, we would be in a recession. Without all of this AI fakery, we would not only have a top and bottom recession, we would be in a full-blown GDP recession. It's the only thing that is propping up the economy right now. And it's the only

reason that rich people aren't beating the drum because their stock valuations and portfolios are sky high. But everything right now is weird. Gold, all time high, we covered that. Bitcoin is near all time high. Stock market, near all time high.

That's not supposed to happen. Like those are supposed to be countervailing, right? So I don't know, the whole thing, it's making me crazy because it's just every day a stupidity marches on and that's one more day that we're not doing anything about it. She's the only politician on the right right now

which is actually trying to elevate that in the discussion and she's getting blown to hell for it, from Israel to prices. I saw someone calling her a California liberal. I was like, okay. If that's the standard now, we are cooked, like cooked.

If that's how it's going to be.

MTG is lib.

Yeah.

Yeah. Last piece here, just this is what I was referencing before about, okay, well, how is AI? How is it doing? How's it going? How's it impacting the workforce? Because part of the bet is that

all of these companies are going to invest in AI, that's going to be where a lot of the revenue for these AI companies come from, that it's going to increase worker productivity. We can put this last one up on the screen. There's just not a lot of evidence that this has really come through yet.

Now, it might. It's still early days, and not just in terms of the technological development, but in terms of companies and workers figuring out how to use the tech. There are some early indications that in coding effectively, which is a huge irony since we're all told learn to code. This is the technology of the future. That's like the one place where you can look

new college graduates coming out who have computer science degrees are struggling to find work because that is the place where AI has been the most disruptive in terms of replacing entry level workers. But outside of that, there isn't a lot of indication that the promise is bearing fruits

as of yet. So some massive mind boggling amounts of money have been spent on this. The amount of resources that are being sucked up, your electricity bill likely going up, as Marjorie Taylor Greene was talking about, as a result of these data centers sucking up so much power. Water usage, you've got wells that have gone dry when these data centers have located nearby, which is actually something I'm concerned about, where I live, where they're planning to

locate a data facility. Rise up, Crystal, be a Karen. Rise up at city council and say no. I'm on well water, so yeah. I'm a little concerned about that myself, but in any case, all of these massive bets being placed, and as of yet, the promise, and certainly the profit, to go along with those massive bets

has not come to fruition.

Bingo, yeah, everyone watch it, and it will, it's like I said, it'll either come true, like what they're claiming, there's three options. It'll either come true with AGI and what they're claiming, which is going to lead to a massive surveillance oligarchical state. You guys covered that yesterday, the whole Peter Thiel thing.

Number two is it won't come true, but because the economy is so financialized and so fake, is that we'll have like a modest period, but we'll have no crash. And option three is a full blown crash. So I really honestly don't know which is worse because the status quo was bad, the alternative is bad, and the victory scenario was also bad.

There's a fourth, even more dystopian option, which is that one company achieves AGI and has all the dystopian results we're concerned about, but because all the other companies lose the race, there's still a dramatic crash because it's only that one company that succeeds. And by the way, almost a certainty out of all of this is that more wealth, more wealth

and more power is going to be consolidated in the hands of a few. How do you think that's going to go for all of us? How do you think that's going to go for our society? I mean, already, I think the massive wealth and income inequality gap is part of what's fueling, you know, all of the turmoil that I see in our politics. So, we're going to consolidate that even more,

and we're, you know, handed to Peter Thiel, Elon Musk, Mark Zuckerberg, whoever else. And it's not even, like, I good or bad people. Like that much wealth and power consolidated, concentrated in the hands of one or a handful of individuals is just a very dangerous situation and with potential dire consequences.

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