Welcome to Free Thoughts. I'm Trevor Burris. And I'm Matthew Feeney. Joining us today is John Glazer, the director of foreign policy studies at the Cato Institute. Welcome back to Free Thoughts, John. Thanks. You say that the U.S., despite being in a state of security, at least since the war, I guess, has nevertheless pursued a, quote, grand strategy of primacy. What is primacy? It seems like you're using it as a, there's a technical term in the literature of foreign foreign policy. But in both technical and then just sort of overall, what does primacy mean in that? Primacy is the name for a grand strategy, which is a sort of broad set of ideas about how a state achieves security for itself, from which, you know, narrower foreign policies flow. Primacy borrows from what's called hegemonic realism, that there should be one major power in the world that can tamp down on conflict spirals and kind of police the world, that pacifies the international system, allows for the freer flow of sort of trade and open economies, and that's what makes the world much more peaceful. Is this, is the term kind of mostly just about America since the war, or does it, would it also include the British Empire and Habsburg, or the theory all kind of develop with America's hegemonic status? Yeah, the term of art primacy is more relevant to what the United States has pursued. It emphasizes military predominance. So we have to have the biggest military. We engage in all these security guarantees with far-off countries to take care of their security, deter allies, deter adversaries, reassure allies, make sure people don't get into conflict spirals and arms races. We claim to keep the high seas open for freedom of navigation and vital trade routes and this kind of thing. So, yeah, primacy itself, the term is recent invention, but hegemonic realism is the sort of theoretical basis for it. And when you're analyzing this, the question, I guess, that you're dealing with in this paper, which we'll put a link up to in the show notes, is why, like, why has America pursued primacy? And it seems that the obvious example is because it keeps the world safe and it's important for there to be such a hegemonic thing, very pro-America answer, but I think a lot of people would give that answer, but you give a different answer. Yeah, that's an answer that's extremely popular, I think, with some parts of the American people, but definitely in the policy community in Washington, D.C. It's not an answer that has a lot of support in academia. There's certainly leading theorists, John Eikenberry and William Woolforth and Stephen Brooks, who have laid out the case for primacy and why it works this way, but they're definitely in the minority, at least in the academic community. And this has been a source of debate and conversation among foreign policy experts. Why doesn't the policy realm more reflect the consensus views in academia? But I think there are several problems with it. First of all, there are other explanations for why we live in a relative state of peace and calm. First of all, this period also coincides with the inauguration of nuclear weapons. So once great powers and some not-so-great powers have nuclear weapons, it means the prospect of great power war, which used to be the most destructive form of warfare in the past, is the costs are just too high to engage in that kind of thing. And so that leads to mutually assured destruction and lots of deterrence. There's also explanations for just conventional deterrence, what's called defense dominance. The conventional power of modern industrialized militaries is so destructive that we saw in the first and second World War can upend entire empires and just destroy societies. And that alone, some people say, is leaving aside nuclear weapons enough to deter general warfare. There's also explanations originating from economic interdependence. So states these days have become so rich and we're more globalized and economically interdependent these days that they just decided we can better serve our interests by just staying at peace and trading with the world. Some people also argue there's been a dramatic normative shift over the past, say, hundred years. You go back to around the time of World War I and before you can find leaders in America and Europe talking about war as something to aspire to. It's a kind of cleansing national experience that made us manly and virtuous. And these days, even the war mongers among us talk about war as something of a last resort. And that might go some way to explaining why war is no longer as prevalent. And then there's democracies have proliferated in this period. And for some reason, democracies tend not to go to war with each other. And so there's a lot of trend lines for why the international system is more peaceful and more stable these days. And the evidence just doesn't weigh, I think, in the favor of primacy. So is it possible to be a critic of U.S. primacy while also accepting the fact that absent a U.S. hegemony that someone's going to fill that space? Wouldn't a critic say, well, it's all fine in the abstract to say that the U.S. shouldn't be the primal or the hegemon. But if we withdraw, then China or Russia will just step into the fold. And isn't that something worth avoiding? So the argument that Russia would step into the fold to fill a hegemonic role in the world, I'm deeply skeptical of. Their economy is roughly the size of Spain's. They don't have power projection capabilities in their convention of military that can hold a candle to what the United States can. China may get there one day, but that's still, I think, many years, perhaps many decades away. And from what I know about the Chinese conception of its role in the world, at least right now, they're not they're not looking to replace the United States as the kind of policeman of the world. They're very reluctant to get too deeply involved in the internal affairs of other countries. They have a history, what they call the century of humiliation. Where they were taken advantage of by U.S. and European meddling. And so they have this strong culture of non-intervention in the affairs of other countries. And they might even, you know, if they do one day come to supplant the United States, it might not look that much different. The order that they prefer, the international order they try to set up from what the United States does. And if it's the case that other countries want to step in and fill that role, they should go ahead. To me, the role of primacy has been a net cost on the United States. It's entangled us in wars that we never needed to fight in the first place. It's required enormous sums of taxpayer dollars to sustain this kind of thing. It also has contributed to this ballooning effect of our national security state, which has problems for civil liberties and, you know, checks and balances on war powers. And so I'm happy to forfeit all of those dastardly costs if somebody else wants to come in and, you know, unnecessarily get dragged into unwinnable wars in the Middle East or guarantee the security of other rich and powerful nations that can and should defend themselves. So when it comes to pursuing primacy, if we take aside those traditional explanations that it works and it creates a peaceful world, as you just discussed, you argue that sometimes it's a little bit more, I don't know if that means if it's mundane or just sort of primal that just status and prestige drive this general grand strategy of primacy more than people generally argue, as opposed to real strategic goals that make sense. It's just people saying we need to be the best nation or a better nation. How does that kind of work out?  Yeah, it's an accumulation of those things. Before we get into status, I might want to just say that there are other explanations for why we haven't retrenched in this era of peace. There are other explanations for why we continue to have an excessively interventionist foreign policy, despite the fact that it's really costly and tends to be counter to our interests. And sometimes, like, unpopular as it is, seems to be now, yes. So there are what are called structural explanations. That's to say that the United States is the most powerful country in the world. We're what's the unipolar power and the structure of the international system is unipolar. And so when you don't have external constraints on your power like we did in multi-polar settings or the bipolar setting of the Cold War, you're kind of free to roam. No one can stop you. The costs of making really reckless interventionist decisions are less because no other power that can hold a candle to the power that you have can make it really costly for you and deter you from doing that. And that's one explanation. Another explanation is more parochial interests drive interventionism and primacy and prevent retrenchment. So there's private interests that have an interest in making sure our defense budget stays really big. The military and gestural complex is also bureaucratic interests. You know, in the post war era, the size of our national security state has gotten so big. Truman set up the National Security Council. It used to be this small team of advisors that helped the president make foreign policy decisions. And it's ballooned into this mini think tank within the executive branch of three or four hundred people. There's also huge bureaucracies like the CIA and the NSA and the intelligence community. The Defense Department is ballooned to be so big. And nobody at the end of each fiscal year goes up to their superior and says, you know what, I think we're really safe. We don't face that many threats. Why don't you fire half of my staff and demote me and cut the budget significantly? You know, bureaucracies tend to grow. And then the last explanation is this hegemonic stability theory that policymakers believe that the state of the world is because of American authorship of the order and policing of the world. And therefore we don't retrench. And my status argument, essentially I try to unpack what is a relatively small but growing pocket of the international relations literature that focuses on status and prestige motivations that states fall into. And most of the work has been done on rising powers or former great power. So there's a lot of work on how Russia thinks status is really important to driver of its actions because they're but hurt from their failure in the defeat in the Cold War in China. Also, it's a rising power. It's eager to gain respect and recognition. You know, I argue that status and prestige drives us to primacy and prevents retrenchment. Now, status, what is it, right? We pursue status in a multitude of ways, building up nuclear stockpiles for some countries as a point of status. The space race that the United States and the Soviet Union engaged in during the Cold War had a lot of status motivations behind it. Club membership is really important in international relations. So being a part of the G7 used to be the G8 is really important to make countries feel involved. Sometimes states engage in what's called conspicuous waste in the same way that individuals will buy a designer pocketbook or a high end watch or a luxury car. You know, even the crappier versions of those things do the job, but it's a high status symbol if you buy the high end ones.  In world affairs. And in our current era, the United States has been really obsessed over the past 30 years in particular with its status as the indispensable nation, the policeman of the world. And this kind of stuff, it's this period where I think status has played the biggest role in our foreign policy. And it's also this period that we've been the most interventionist. I mean, just over the past 30 years, roughly since the end of the Cold War, we've been at war for two out of every three years since the end of the Cold War. Forty-six percent of Americans have lived the majority of their lives in a state of war in the past 30 years in the history of America or currently currently. Oh, OK. People that are alive in America right now, 46 percent of them and 21 percent have lived their entire lives with the United States at war. Over the past 30 years, we've engaged in more individual military interventions than we had in the preceding 190 years of our existence as a nation. So it's been extremely activist this period. And I think status and prestige motivations have a lot to do with that. So I guess two points on that. Well, one point on that and then a separate thing. So the first would be, couldn't someone just argue that's purely because the nature of the conflict has changed, right? That it used to be wars would be against governments and there would be flags taken down. And surrender ceremonies and we would call an end to it, whereas something like the ongoing war on terror is a slightly different thing, where it's not clear when we'll be able to finally close the book on that. And the second, I suppose, somewhat related to something you said earlier was this imagine a world in which actually American politics does change and Pentagon officials do offer to fire themselves and to cut budgets. And there's a big change domestically. But isn't there also a risk of there being outside pressure that other countries will still seek American intervention and help even in a world where America is undergoing some sort of political change at home, especially when there's humanitarian crises and interventions like Bosnia, things like that. Yeah. So on the first question, does the new era of conflict, which is mostly focused on non-state actors, influence this status argument that I'm making? I argue that it's still pretty relevant. For example, I see a lot of parallel for why we didn't pull out of Vietnam much earlier, for why we're not pulling out of Afghanistan right now. So the security argument for why we're still in Afghanistan is that if we withdraw, the Taliban will take over and it'll become a territorial safe haven for non-state actors, terrorist groups to conduct transnational terrorist attacks. Scholars refer to this as the safe haven myth. It's just not all that true that territorial safe havens have any operational utility for the success of terrorist attacks. You know, there's a lot of talk about al-Qaeda's presence with the Taliban in Afghanistan prior to 9-11 and how that helped a successful 9-11 attack. The attacks were planned in Afghanistan, but they were also planned in Hamburg, Germany, and Florida, and Boston, and Malaysia. Territorial safe havens in the realm of instant communications and kind of borderless, immediate communications is just not all that important. In fact, there's an argument that the reason bin Laden was in Afghanistan prior to 9-11 was to draw the United States in there, because he learned from the 80s that the Soviet Union bled itself dry in its war in Afghanistan. He wanted to do the same for the United States. But we're still in Afghanistan, and I think that security argument is kind of baloney, and so the question is, why are we still there? And I think it's largely so we can avoid the humiliation of defeat, in other words, a loss to our prestige. And that was an argument for why we didn't withdraw from Vietnam much earlier as well. It wasn't a public argument. Nobody made that argument publicly. But in internal discussions, documents that were released in the Pentagon Papers, for example, officials were talking about withdrawal being hit to our prestige. And we wanted to avoid that. 70%, I think they said, was the justification for us avoiding the humiliation of defeat in Vietnam. Yeah, the 1965 Internal Defense Department memo described U.S. Ames in Vietnam as 70% to avoid a humiliating U.S. defeat. And I think that's still relevant for Afghanistan. There's also an argument that although there was a lot of security and norm-oriented justifications for Iraq, the Iraq War, some people, I think, argued that it was more of an expression of rage because we were so... 9-11 was such a hit to our honor and our prestige and our status as a kind of impenetrable fortress in the world that we needed to show our strength and show our supremacy by engaging in a war that had kind of been on the menu prior to 9-11. But now we needed to do it to show that we weren't defeated. So status still drives a lot of what we do. And it's not the case, I think, that most of the problem of U.S. foreign policy has to do with terrorism. It's a big problem, but it's still the case that we have to spend lots of money and have forward-deployed forces to defend Europe, for example, from threats that somebody can tell me what they're threatened with. I'm not quite sure. Same with rich and powerful countries in Asia. We're defending them even though they're rich and powerful enough to defend themselves. That kind of stuff still involves... It would be psychologically deflating to us if we were to retrench from that role. And that's part of the big problem, I think, with primacy. So there's clearly pressure internally for the U.S. to maintain primacy, and that might be because of the current state of affairs and government and the military-industrial complex. But what about pressure from the outside where other countries want a primal... I think specifically if Europeans might look at this and be like, no, I want America to be the hegemon in the world, means we're spending less on the military and it's good to know that there's someone out there who has our back, especially when there are crimes against humanity like we saw in the Balkans. But that's the sort of thing I was asking about. So definitely there's pressure from the outside for us to continue to serve in this role as policemen of the world and have the grand strategy of primacy. And why wouldn't they want us to take care of their responsibilities for them? At least until they're afraid of us. And that might be happening to some extent among our European allies. It might be more costly to them and more trouble than it's worth to have the United States lord over them with security guarantees and try to influence their policy. I mean, right now we're threatening to sanction European countries and companies for doing business in Iran despite the fact that less than a year ago we were a little bit more than a year ago we engaged in an agreement that was working with under the Obama administration and Iran that said, yes, you can now do business. And we're putting European companies at risk. That's just one example. There's also trade war stuff. I mean, they just might think that this is time for a change. So yeah, I think there is outside pressure. But I think that we should focus on tangible threats to our security and our own national interests and our own economic interests to inform what kind of foreign policy we should have and not what other countries want from us. How much do you think Americans, either just the average American citizen and also people in the military, overestimate the capabilities of our military in a way that goes with the status prestige argument that if America comes in there and really puts it down, like no one can beat our technology or any of that stuff. And then something like Vietnam was kind of shattering, it would seem, was like, okay, well maybe they actually can do that.  If we can fight any war with one hand tied behind our back, it still seems to be almost an animating privilege. Not only can we defeat anyone, but we can do it with one hand tied behind our back. And that seems to be a part of your thesis, too, and an ongoing problem. So it's definitely a driver of our heavily militaristic foreign policy. But we're also in an age right now kind of like what we were in the aftermath of Vietnam where I think most of the American public thinks that these wars that we engage in, I don't see what benefit we've got from them. It doesn't seem like we won any of them in the post-911 era. Why are we continuing to do this? And I think that actually goes some way to explain why Obama won in 2008 and at least partially why Trump might have won in 2016. There is a kind of public fatigue with this role of being the policeman of the world. What I think in a related sense, though, is more prevalent these days is the fact that when all you have is a hammer, every problem looks like a nail. And it seems like we use the military and military force to solve lots of problems in the world, simply because we have no better ideas. So for example, if you think about the Syrian Civil War, Trump administration engaged in two symbolic military attacks against the Assad regime in 2017 and again in April 2018. And the attacks didn't achieve anything tactically. They didn't achieve anything strategically. They didn't alter the reality on the ground. They didn't deter the Assad regime from further attacking its own citizens. The prompt for each of those was chemical weapons attacks, but chemical weapons are far less lethal than bombs and bullets. And hundreds of thousands of people have died in the conflict as a result of conventional means and a small sliver of died from chemical weapons. And what do we do about the problem? And there's frustration in America and the rest of the world about how to solve such a terrible civil war that's killed so many people and seems to be known in sight. And so when you don't have sensible, viable diplomatic options or humanitarian options, it just seems like, well, let's bomb them because that's a low-cost way to make us feel like we're doing something. And it also goes a long way to explain this is about status and prestige. We can bomb another country because we are the indispensable nation. It doesn't matter that it has no tangible impact, but we're showing the world that we're doing something and that is really boosting our own psychology about ourselves. It might not just be, of course, defeat on the battlefield that people are worried about. So the fact that the U.S. Navy maintains a presence in the Southern Pacific reassures allies and is noticed to others in the world that we help guarantee maritime trade and that without that, it's not as if China is going to be necessarily invading countries or starting wars, but they're going to be flexing their muscles in that part of the world. And I suppose the question will have to be, is that a price worth paying for retrenchment? So I think we should look for evidence of claims of terrible ifs. I don't see any evidence that China wants to shut off sea lanes. It relies on the South China Sea, where it has been flexing its muscles, as you say, for about 40% of its imports and exports. It's roughly $1.5 trillion per year at this point. More likely it's flexing its muscles in the South China Sea, not to close off vital sea lanes, but to keep them open because it fears the United States potentially interdicting shipping lanes. All of their energy comes from the Malacca Strait. If we really wanted to contain China, which they sometimes feel like we are, since we're allied with all of their neighboring rivals along the Asian Latoral with a guarantor of the status quo in Taiwan, we engage in lots of rhetoric about the rise of China, where domestic politics right now are in the process of attacking Confucius Institutes on campuses, this can seem terribly threatening. They view their interests as keeping sea lanes open, and so do we. I think even if the worst were to happen, and I think the chances are so infinitesimally small that you don't need to worry about them at this moment in time, but even if the worst were to happen and China tried to shut down sea lanes in the South China Sea, Cato published a paper last year that calculated how much it would cost, additionally, to just avoid that route, and it actually wouldn't be that bad. But that's even the worst case scenario. It doesn't require us to boost our naval presence in the Asia Pacific. That'll just cause greater fear in China and potentially lock us into a new Cold War in the 21st century. So one of the, I thought, very interesting parts of your paper was citing a 2010 study by Richard Ned Lebo, who's at the International Political Theory, sorry, a professor of International Political Theory in the Department of War Studies at King's College London. So he found that of the 94 interstate wars between 1648 and 2008, 58% were fought for status and prestige, which is higher than I would have guessed, I suppose. You gotta finish the rest that quite. Another 10% for revenge while 25% were motivated purely for security or economic interest. That's an interesting stat overall, too. Yeah, no, it's a fascinating piece of data. And looking at American history, what would a good example of an American war of, say, revenge or security be? So we've spoken a lot about ones that are of prestige and status. Oh, security. So definitely, I think our intervention in World War II was about security. We were terribly fearful of a German hegemon in Europe. We were also attacked by Japan. That was definitely for security reasons that we declared war. And so, yeah, that's definitely an example about security and economic interests. Revenge is kind of a tough one, although Iraq might fit in it, because it was less about the existing security issues. I mean, frankly, if Saddam had nuclear weapons as Dick Cheney claimed that he had them, he wasn't about to incinerate himself by using them on us or our allies. Nuclear weapons are kind of useless.  And it was the fact that he didn't have nuclear weapons.  They're useful to people from attacking. They're useful for one single thing, and that's deterrence. They don't add coercive leverage to states in getting their way. They don't prompt states to engage in more low-level conflict. There's a minor amount of disagreement about that in the academic literature, but there's a good book on that that we featured at the K-2 Institute last year called Nuclear Weapons and Coercive Diplomacy that I recommend. So it's more that he didn't have nuclear weapons that we went in. He was a rogue state. He was an easy target. It was a long-standing thing that we had on our menu of foreign policy demands prior to 9-11, but we were so in a new world of threats and so deflated from 9-11 that we needed to show our supremacy and show our force and show that we could... So that might be an argument for revenge. One of the wars I point to in the paper for more in the status realm is the Spanish-American War. This was more about our status in the hemisphere pushing back against European imperialism, and then once we won and we got involved in this, we got many colonial assets that McKinley said would be dishonorable to seek escape from these obligations now, and that's kind of what we're facing now. So there's a lot of honor and rage and glory and status and prestige in many of our wars that we fought. So where do you see American entry into World War I in this rubric of security revenge? I feel like, dude, it's like lightning round. We'll go through every war. No, I'm not criticizing that. The Mexican War is next. 1812 is total status, the Mexican War is territory. I agree with Matthew's question. World War I. Yeah, I think the security argument was basically out of a difficulty of remaining neutral given German submarine warfare, but I can see a historical counterfactual where we don't intervene in World War I and the European powers kind of batter themselves into submission on all sides and the kind of roughly equivalent end to it comes about. I don't think it was for our security. We could have maintained neutrality for an extended period of time and been able to stay out of it, but... There was an idea of also wanting to be part of, I mean, this idea of looking to Europe and being part of their wars and helping out Britain and establishing status for Woodrow Wilson and the League of Nations and being part of that discussion in the post-war world. The role of America to create the world safe for democracy was, I think, a huge status motivation of Wilson and Americans at that time. We were coming to save Europe from self-destruction and that definitely did give us a psychological boost. Which I think is interesting and like I mentioned the War of 1812, which I kept thinking of when I was reading your paper because it's one of these that I think that...  I guess according to Trump. It's one of these where I think that it puts a little bit of a wrinkle in the thesis of whether or not it's... Is it always bad for nations to pursue status and prestige and things that could be spillovers of status or prestige? I think the generally accepted explanation for why we fought that war is that after we won our freedom, our freedom from British Empire, they just spent about 20 years not respecting us whatsoever, conscripting our soldiers, never paying attention, trying to get us involved in the French and this whole thing and at some point the American state was just like, we're just sick of you guys treating us like not a real country and we're gonna fight because we are a real country and that was an important status war. I mean, you could argue if you have so little status that people don't even recognize that your seamen are not gonna be conscripted into the British military, then maybe sometimes you should fight wars for status or prestige. Yeah, the War of 1812 seems like a good candidate for an honor war. I just recently read a history of the War of 1812 and given the war in Europe at the time, the French were messing with our ships on the high seas more than the British were at the time. But it was more relevant to us coming out of the Revolutionary War that Britain was doing this to us and it was definitely more of a psychological thing. Did we need to fight the War of 1812? I don't know if I can answer that question. I think I would need another decade of looking into it, but I'll sort of plead ignorance on whether it was worth fighting. There was lots of failures on the battlefield on the part of the United States and it was kind of embarrassing and we got our White House burned down and that kind of sucks. But it certainly I think put Britain on its heels with regard to messing with us anymore and they had their hands tied in Europe at the time as well. But I guess the question is more about if you spill over effects of status or not having status or prestige that sometimes if you think about very much developing nations and if they feel that they're being messed with, I mean just think about if America doesn't, let's say America is out there in the world interfering in a bunch of different countries, foreign affairs and maybe one reason we're doing that is because we just don't respect them enough or their sovereignty enough or whatever and maybe they need more status or prestige if you are a comparatively weak country that trying to achieve status and prestige as a nation is not obviously wrong in all instances. Sure, but my preference would be that we try to seek status and prestige in ways that are peaceful. So Switzerland has a lot of status as a center of European civilization and diplomacy and peace and neutrality and it has its own kind of set of status indications. But they don't have a foreign policy like ours. Actually, one of my favorite Kato blog posts ever is from Trevor Thrall last year and he said the Switzerland test. In other words, he would prefer the United States to apply the Switzerland test to any foreign policy proposal. Does Switzerland do it? Then the United States probably shouldn't. Yeah, exactly, yeah. Is that the question? But okay, well on that point though, Switzerland's test, they didn't get involved World War II. Would that have made any sense for us to not get involved? I mean, even if we hadn't been directly attacked by the Japanese in Europe at least, we should have probably been involved with World War II. It would seem most people agreed on that. I don't know if you do or not, but you said there was actual security concerns and not wanting Hitler to take over. Switzerland did not get involved and also maybe sometimes it's not WWSD. Sure. But I think the point is that there are other ways to gain status other than wielding a big stick and ruling the world and going to war a lot. And status can be important, but we can gain status by trying to be a leader in diplomacy. We can gain status by promoting human rights. We can gain status by what John Quincy Adams said, which was being an example to the world as opposed to imposing our will on others, being the well-wisher of freedom to the world but the champion and vindicator only of our own. That's a way to gain status too. At the end of the day, I think status, John Mercer, one of the people who's written about this, calls it an illusion. It's extremely hard to measure. Mostly it seems like status is just a reflection of how the people in that country and its leaders feel about themselves. And oftentimes that status doesn't translate to other countries. So for example, one of the paradoxes of, say, the Vietnam War is that we stayed in for status reasons. We were too unwilling to pull out of a lost war because it would hurt our prestige. But it actually damaged our status around the world. You know, opinions of the United States sunk. Same thing with the Iraq War. Opinions around the world of the United States sunk as a result of those things that arguably had a lot to do with status. And so I think we should deemphasize the role and importance and value of status in general and especially if you're someone who prefers limited government with a limited role in society and therefore a limited role in the world, you ought to just focus on tangible economic and security interests to justify and inform your foreign policy. So how does this look in the age of Trump? I mean, I do think what was quite noticeable during the president's campaign was his, I suppose, unapologetic pro-American militarism, right, that we're not going to apologize for America anymore. A lot of his supporters would claim that Obama had humiliated us on the world stage and that the Obama administration had given concessions that really, really shouldn't. So it looks like primacy is here to stay for the moment. And I'd be interested to get your takes on the recent meetings between Trump and Kim Jong-un because those seem to be two players that are very interested in maintaining status and prestige. What is your take on that and the hope of Trump dialing down his primacy rhetoric? A man who has cared about status his whole life. So I started to research this paper long before I thought Trump could ever win the presidency, but it's been interesting to see how it intersects with the rise of Trump during the campaign and his presidency. Cards on the table for a moment. One of the problems with my argument is that sometimes it approaches unfalsifiability. That is to say, exactly contradictory policies can both be described as status-motivated. So Trump's America first sort of argument that we shouldn't, during the campaign, criticized our free-riding allies and we shouldn't guarantee their security anymore. We should think of ourselves. We shouldn't engage in all these multilateral institutions and this kind of thing. Now the foreign policy commentary at DC thinks of that as a huge problem because it's a forfeit of our role as the leader of the liberal international order. And I would argue that what they're really arguing is that this is a harm to our status or prestige as the world's sole hegemon and kind of order-builder. At the same time, I think Trump's approach is also status-driven. It's more individualistic and less nationalistic. It's about his own status. And here's another problem. Prior to Trump's opening to North Korea, and this was published prior to that, there's an argument to be made not talking to your enemies is a status motivation. You don't want to give them the legitimacy or prestige that they're then afforded if you meet face-to-face with them and setting preconditions on negotiations which has a long history in U.S. diplomacy, making sure the other side capitulates to some extent before you give them the favor of meeting them face-to-face and giving them legitimacy of talking. That's all status. On the other hand, Trump's opening to North Korea is hugely about status because he's convinced that he can make a deal that his predecessors didn't and he'll be in the history books forever and possibly win the Nobel Prize as South Korean President Moon Jae-in has been eager to flatter him with that prospect in order to kind of juice, grease the wheels for diplomacy. But yes, the pageantry of high-stakes diplomacy all about status, especially when you consider this latest summit. I don't think there was much tangible that was achieved at that summit. The four or five hundred word joint communique is really vague. It's about aspirations. The details will have to be hashed out in the coming months and years. But it was very much about here these two leaders coming together, lots of analysis about their body language and what this means for America's place in the world and North Korea's place in the world, entry into the community of nations and so on. So yeah, it's a lot about status. Given that it seems that the role of status and procedures, we pointed out it's historic in many ways. You pointed out that before World War I, war was honorable and Winston Churchill was the quote about bullets whizzing by his ears. Nothing more exhilarating than to be shot at without result. Yeah, that's the quote. And you had a shift away from that. At least war is not necessarily a good thing, but you still have countries wanting status and individual people wanting status and a pretty big agreement in Washington D.C. that it's important that America maintains that's World Policeman role. So do you see any realistic way of trying to mitigate the effects of the sort of very human nature drive and especially America, a very American drive to be the best, trying to mitigate the effects that the driver status and prestige has on our foreign policy? Well, it's a tough thing to try to overcome since these are so embedded in, I think, human psychology, but also in foreign policy tradition. It's a very challenging thing to try to overcome. The best way I know how is to do what I did in this article, which is to point out that the intangible image maintenance that drives us to engage in really costly wars or massive defense budgets that are really costly and so on, you don't want intangible symbolism to have really tangible costs to no greater effect. What we want is to serve our own interests and to have our foreign policy improve our situation or at least keep it the same as opposed to draw from it and make things worse and counterproductive and so on. I hope one day the tangible impact of our economic and security situation will have a greater play than the intangible image maintenance and symbolism behind status and prestige. I think the right way forward is to just think about foreign policy in a more rational way as opposed to the illusion of prestige. Thank you.


Okay, it's five o'clock on my clock, so why don't we start the second half? Okay, great. Wonderful. So I want to now go to Monk Rules, which is the main point of this paper with Tom. So let's first review for the Schubert case, how I want to think of them. So in the Schubert case, I have my polynomial ring and it has a basis, a special basis, which we want to focus on, which is these Schubert polynomials. And now this polynomial ring has favorite generators also. So these x1, x2 generate the polynomial ring. So just from that perspective, you have a desire to compute, you feel like you'll understand your ring if you compute the generator times the favorite basis element and re-expand it in terms of your favorite basis. So whatever you feel like your favorite generators are and your favorite basis, you want to compute this. And that's the point of view I want to take for the McDonnell case, is that now I'm working with Laplace polynomials, x and inverse. And I have my favorite basis, which is this basis of electronic McDonnell polynomials. And of course, if I think about this ring, then x1, x2, up to xn, and x1 inverse, x2 inverse, up to xn inverse, they might be my favorite generators. So the question then is, can you compute xj times emu and xj inverse times emu and get re-expand in terms of your favorite basis. And so that's the way we took it. Now, of course, there are several choice, different people may have different choices of favorite generators. So another favorite choice in this classical setting is to take the Schubert polynomial corresponding to a simple reflection. You could use that set of generators and compute. And the same is true in McDonnell polynomial theory is that there are other possible choices for favorite generators, like you can take the e epsilon j's times emu and the e minus epsilon j's times the emu. And in the paper, we did several cases of choices of generators, but for today for the talk, I'm just going to do one. And the idea is the same for all the natural choices that we chose, but somebody else may have other natural choices. So how do we do this? So I want to go back to those operators. So xj be the operator on polynomials given by multiplication by xj. So I want to really think of this operator that when I act on a polynomial, what it returns for me is just little xj times that original polynomial. And then the theorem is that we prove is that this operator acting on polynomials, I can rewrite that operator in terms of things. So I should have copied, let me go back here and copy the action of my favorite operators. So we've got that on the screen. So these are the things that act well on McDonnell polynomials. The tau i checks, they act nicely. The tau pi checks, they act nicely. And the yi's, they act nicely. I can track combinatorially the action of these operators on McDonnell polynomials. So my job is somehow clear from that perspective is I've got to take this operator, which doesn't act so nicely, and I have to rewrite it in terms of these tau checks. And so that's what we did is we rewrote that and the answer is you sum over subsets of one through N. And here the condition is that that subset must contain J. So if I'm trying to multiply by xj, then the subset I choose must contain J.  I mean, I walk through slowly through these things once I get them written down. And then there's a factor which I call fcj, which is a function of y's, which depends only on mu and not on J, which is a function of y's. But the philosophical point is that these parts depend on y and over here I know how y acts on my McDonnell polynomials. And these parts depend on tau and points one and three over here they tell me how the tau is act on McDonnell polynomials. So once you prove this, you get corollary, which is xj acting on emu is equal to the sum over subsets of one through N, such that subset contains J. And then there's a factor fmu cj, which is a constant, it's going to depend on qt. There's a factor weight mu of c, mu of c.  And so this is, this is my basis element here, basis element. And these, these guys will be functions of q and t. And so that'll give an expansion of xj and emu. All right, so let's copy this because we're going to have to refer to these. Let me explain the combinatorics, just getting busy. Okay. So, so let me explain how I think about this we'll just do an example. So I'm going to do N is 11 and J is seven. And so one term in this sum depends on a subset of one through 11. So I'm going to choose for my subset two, three, five, seven, nine and 10. And very important is going to be the complement of that subset, which in this case is one, four. Let's see, is that what I wanted? I'll better do the same example I had in my, oh, so no. Two, five, seven, nine, 11, one, three, four, or six, eight, and 11. Okay, did I get the compliment? Correct. Okay. All right, so, so how do I think about this? So I think about a circle like this. And at the top.  And then I've got me one. So I'm drawing now a picture of me, because I'm thinking about the action of XJ on email.  And I've got me three, me, me one, me three, me four, me six, me eight, and me 11, and the other ones are my subset. So this is me two, me five, me seven, me nine, and me 10. So that's the, and over here is my, this is, this is my J. So this is me J in this example. So that's a special point because that's telling me which XJ I'm trying to multiply by. All right. So, now I want to tell you what this wrote me was, because this is the somehow the first thing when you start doing computations is okay how do you classify these, these terms that actually appear in the, in the expansion. And so wrote me is this guy. So this is wrote me see. And what I do is I draw the same picture again. That's my, my first marker should have done that dotted. And then I've got me one. This is before me three, me four, me six, me eight, and me 11. So the, the compliment set this compliment set just stays the same in wrote, wrote. But then these guys that are these other spokes of this wheel. So the way I think about it is I think about these red muse as the runners. And there's a relay race, right. And so what happens is that the new to runs to the next spot before hands off the baton, the, and then the new five runs to the next spot. And then the, the new to the next player, the runners to the next runner. So what happens is that the new to ends up down here, and the new five ends up over here, and the new seven ends up over here, and the new nine just ran one spot only. And the new 10 did so the new 10 did something interesting, because the new 10 ran past this. But kept running all the way to the new to so so so what happens is that when the new 10 runs past the finish line, it gets a prize, it gets augmented by what. Right. So, so you got these runners that are running and the one that runs past the, this, this blue guy. The one that runs. What did it do. How do I get rid of that. It's down here. The one that runs past this blue guy, someone know what I did. I think you did some kind of like, like, focusing in on a little region so there's probably like a little axe at the bottom somewhere to get out of this. Oh, fantastic. You're genius wonderful. Okay, so that. So, when you run past that little blue guy you get the rotation, and that describes which basis elements appear in this factor here. When you expand. Now, what happens in the towel I need to tell you how CJ check is. And how CJ check is the complement of C. So it's going to be these guys. And it's the power. So it's going to be tau six, tau four, and I this tau CJ check started. So I'm taking tau six, tau four, three, one. Tau pie check, because when I go past this starting point I get a tau pie check, and then tau 11 minus one check and tau eight minus one check so. So this is the sequence of operators that contribute to this rope. So the way that we got this wrote to me, the rotate me is that we applied these towels that are appearing up here, and this sequence of towels that produces the road. Okay, so the next way that I'll tell you about is. Is this f CJ. So in this case we're looking at FC seven of why. That's this factor in this box over here, and that is why why seven inverse minus why. To why five inverse. So the seven and the five are this seven, which is my J and the one that comes before it. And the two is the first red one. It's the first one in my sequence of those. And that when you convert that f C seven J C seven why you get F mu C seven so this factor in the corollary is going to be Q to the mu seven minus mu. To minus times T to the V mu seven minus V mu to minus Q to the mu five minus mu to T to the V mu five minus V mu. So, this four down here, and this tells me how the wise act, and the cues pick up the parts of me and the tease pick up this V mu factor. And that's what we're seeing here is that the wise have turned into you with the part of me and T with V mu factor. So those conversions are easy once you once you prove the operator formula, which is top one, then getting this FCJ for the bottom one is easy. Okay, now I want to.  Which I think is really cool. And so I want to take that. And there's still time right. So, so this some extra factor weight mu of C. So that's the last factor in the corollary. And I tell you what that looks like. So that is product of several, several pieces. So it's first piece is T to the minus the number of eyes, such that mu I is bigger than mu I plus one. So that you can just compute that's like a descent statistic. Take your composition and just count how many. And then there's a factor that depends on the elements of C. Remember I have my blue spokes and my red spokes. And so now I'm going to look at the, the red spokes. And I get to there are two cases that naturally appear. There's the case where K is not equal to a one. There's an extra factor that comes from K equal to a one. This is the K equal to a one factor. Those are the a one is the first. This is a mu a one. It's the first read the first element of that subset C.  And that the garbage always looks like this kind of exponents. I'm not going to write it out because it's not instructive, but then there's one more factor. There's the product over the case not in C. And this one I find really cool. So this one is, is built from factors I call weight C mu Q, weight mu C, C K. So let's think about what is, what is a K that's not in C, a K that's not in C is one of the red spokes. No, okay, this not in C is one of the black spokes. So these are for me the, the spectators, the red spokes are the runners who run around. And then there are the spectators. And what happens if you're a spectator in one iteration is that you see a runner running by. A runner has some value, because that's mu seven or mu nine or something, and you have some value because you're mu six or mu four. Right. And so what happens is there are several cases here. But if that runner running by let me put it in red so it looks like a runner. So the value of the runner mu K that's the runner that runs by the spectator at position K. If, if that runner has exactly the same value as you do, then your blood brothers or something and you say oh this is great to see you I haven't seen you for years, and the whole race stops and everything is zero. Right. The busts. You just get a factor of zero. If the runner who runs by is bigger than you. Then they just run by you get a factor of one. But if the runner that runs by is smaller than you. Well then they have to pay for that.  And the toll factor is looks like T. So it's got a one minus Q to the something T to the something plus one one minus Q to the something T to the something minus one divided by one minus Q to the something T to the something squared. So it's a it's a messy factor which you can look up in the paper for the exact way to compute it. But somehow I found this, this business when we were trying to trying to figure out these weights, and we finally got these runners running past the spectators, then we could actually sort of compute them by hand. And so I think that's, that's what I have to say is hopefully it gives you a picture of what these monkeys look like and how we got them where we came. Nice. Let's thank the speakers.


The following is a presentation of TFNN The morning market kickoff With your host Tommy O'Brien Tommy O'Brien and good morning everybody. I'm Tommy O'Brien How many alive from TFNN Friday morning just after 9 a.m. Eastern time We got about 24 minutes to go until the start of trading and you got markets in positive territory quite a lift from where We were just a week ago. You're talking about almost 200 S&P points pretty remarkable. You back things up to where we were last Friday spike low on Friday coming into the long weekend 36 39 you make it up to 38 34 overnight. We're just off of those eyes 3829 that's eight tenths percent of the green in the S&Ps Nasdaq 100 you're positive by nine tenths Nasdaq you take a look at where we were last Friday. You're talking about 750 points just like that quite a week as you get a little bit of a bounce across the board the Dow We were at 29,600. How about almost getting 31,000? That's about 1500 points You're talking about on the Dow. We're currently up 207 points. That's two-thirds percent and even the Russell Pretty decent gains. You're talking about almost 80 points in an index last Friday that was trading at 1649 You're up about seven tenths in the Russell So all the indices between about seven tenths and nine tenths nine tenths percent in the green Russell seven tenths Dow seven tenths Nasdaq 109 tenths S&Ps up eight tenths broad rally crude up $2 right now That's 2% up to 106 36 and you see crude just been chopping around since that low of Wednesday now crude You talk about a reversal in the market The S&P almost 200 points higher crude $10 lower from where it was last Friday That's not even cherry-picking the low $10 right now from where it was last Friday the high 1658 gold contract given back some of the gains it had had gold was it 1861 last week you're training 1822 You got the silver contract down 31 pennies of 2073 and no 10 bonds Excuse me. We got a little bit of a reprieve From the higher price and lower yield you I was talking about on my program yesterday. Let's see what time this is at Yeah, that's what was happening. Check out that charge higher And I don't think we got to a two-handle, but it was close man We were at about three point zero three I think three point zero two maybe we did get down there I'm not sure if anybody knows what the exact low yield was when you had that spike on the tenure to 1808 yesterday, but nonetheless the tenure right now trading at three point zero nine percent You back things up to where we were 1407 you're almost three and a half points off of that low But man all you're doing is you're coming right back into the lows of May 6 We'll see how the market reacts Already you see a couple tails getting into that low that price point basically where we're sitting right now zoom in on the Action the exact low on May 9th 1708 the low of the body there in terms of the opening where are we? 1720 so you're talking about only a couple ticks from where we're trading at right now in the tenure and we jump over to the VIX volatility index Looks like we're waning a bit. Maybe that's the the spike I mean you see the trend right we get these spikes and usually when you get a pause you get a reprieve the VIX will start to wane Looks like we have some waiting numbers there as you're talking about check that out This would be the sixth consecutive red bar in the VIX after having a four-day top in the VIX pushing 34 35 We're now training at 28 76 in the volatility index. All right, jump it back to the S&P So we're up 30 points. I was talking about in my program yesterday gonna start it off right now man With it because it's pretty cool when you take a look at this folks We're gonna do two different Fibonacci numbers. Okay, maybe you saw this if you're watching the program yesterday But longer longer term, okay taking the whole run we had from the lows of 2009 665 75 Just a remarkable number considering what we're sitting at up to 4808 Okay, we're currently sitting at about the 236 line in that retracement a 382 of the entire bull run from the lows of 2009 to where we kicked off the year about 4800 You're talking about a 382 number that sits basically at 3200. All right We're 10 20 points away from that price level the cool part about that is 3200 is the price level that basically is the beginning of 2020 And that is also the 618 of the retracement from the COVID lows to the highs So what you have is you have a nice area of confidence folks I mean I've if you're looking for an area for this market to pull back I would keep 3200 as an area that maybe you start putting some risk horn on you would be 1600 points off of the high And again, that doesn't mean that that's the end. We'll talk about it. There's a lot of Wall Street talk now about X percentage even further from here if such and such happens. It's definitely possible. We're gonna see if it plays out in the next 3612 months gonna be a very volatile time potentially if inflation rages and does not come under control Crude oil probably a good week for everything considered that we have crude down about $10. That's something that's gonna have a huge impact on this economy crude prices just absolutely Raging recently Okay, back to the shorter term timeframe on a five-minute chart We just been chopping around the S&P's right at this price level since about midnight Eastern time You were trading at 3825 you've been chopping around at that price level Let's jump around to some of the headlines and here's some of the percentage. I was talking about so S&P 500 may have a another 24 to percent to fall That's quote-unquote 150 years of market history Showing well as the disclaimer likes to say folks if you're in the finance world past performance not Necessarily indicative of future results doesn't mean that's what's gonna happen this time This time is a very different scenario from many scenarios in the past in terms of what is shaping the inflationary pressures That we're dealing with right now Bottoms should be as much as 46 percent below the January peak. That's what they're talking about here Society general which calculates the benchmark gauge may need to tumble as much as 40 percent from the peak that number 2,900 now the reason why I say 3200. It's a lot more comfortable. It's because it's a pretty dire prediction right 2,900 I'd feel a lot more comfortable taking heat down to 2,900 if I was putting more money at risk at 3,200 Then if I was at 3,800 Risking another 900 points from where you're trading at right now Now I also talked about in my program yesterday just for some context here because 2,900 seems like the world is ending folks But if you back things up on a monthly That's a weekly excuse me. There we go. I mean you got to remind yourself that You know, we've had some volatility in the past But I'm not even cherry-picking the year 2000 and the two the year 2007 the 2008 pullback where the market Literally got cut in half. So that was a 50% pullback. Okay, that was I mean it was one of that It was from 1,500 to 665 right and in 2000 it went from 50 and 53 down to 868 in 2000 you had companies that had absolutely no revenue even and just had a dream that were valued at Ridiculous numbers not necessarily what's happening right now. Okay, we're going through a tremendously volatile period But we get some strong companies that just the multiples got a little bit out of whack But they make a lot of money in the long run in 2008. We had just an obscene real estate collapse fueled by a Bubble of all bubbles people just taking out loans left and right kind of a game of hot potato with real estate Barely flipping it and then people caught in that bind when they barely have the equity and they go negative And that cascading effect blows up in credit markets Okay, but taking just where we were when trump got elected, which I believe is somewhere right here. Yeah, 2100 That was in 2016. It's not even six years ago. We were at 2100 and the economy was rocking At 2100 remember the feeling In november of 2016 the economy was rocking. We were at 2100 from 600 We're still at 3800 2900 wouldn't even be the end of the world Context is important. Stay tuned folks. 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We've got about 12 minutes to go until the opening bell You got the s&p's up 30 points. We'll see if we can hold here After today you're talking about only four trading days left in the month when we come back next week July 1st a week from today And of course we got another long weekend coming up next weekend not bad That's two out of three. We'll have long weekends. I can get used to that for sure Bitcoin taking a look at bitcoin on a daily basis. You break lower On june 13th. That was the weekend. So we're talking about two weekends ago Right was when bitcoin accelerates Through that number you come back on monday and bitcoin goes from 27,000 down to a close of 23,150 We've just been chopping around on that floor 20,000 kind of a dicey area to say the least now What's interesting is you back things up for bitcoin, man You talk about an important area. This is when futures started trading folks remarkable that you're talking about almost five years ago Remember that I can't even believe that that's the date december of 2017 almost five years ago because I remember at the time all the discussion was Hey Bitcoin's at 20,000 and for the first time ever you're going to be able to short bitcoin in a regulated environment with futures On I think the cme, right? Is that where they trade? Uh, nonetheless, what happens? Hindsight 2020 but seemed like an easy short and it sure was you write it up for the year You go from 20,000 down to 3000 You reset the market then things really accelerate higher We break through 30,000 that's been an area it had held basically since the beginning of 2021 And just like that you break below 20,000 and we're kind of in no man's land here for bitcoin currently trading 21,175 You jump over to ethereum ethereum Not as long going back. You only go back to february of 21 Excuse me, but ethereum at 1207. That's a monthly pretty scary chart If you're talking about an a to b c to d, let's just put it back even on a weekly Since we're going to get all the action anyway from 4900 would be the a point your b point Somewhere around you could take the exact low of 2100. That would be a b leg of what 20 a to b leg of what? 2700 2650 Yeah, 2650 and you're talking about off of about 3600.  It was really 2650 maybe But 2750 2750 to be exact. Yeah 21 58 so about 2750 That would take us to about 850 would be the exact low. Maybe it has to get to 850 We got to 1010 on ethereum Checking in on cryptos. All right back to equities We jump over to fedx. They had their numbers strong numbers last night drifting higher in the overnight as well They had a conference call that began last night Uh spike to 242. We're at 235. That's $9 higher They had an $11 move priced into that equity for their earnings So just under the expected move to the upside for fedex and we'll jump back to some of the companies that are moving today 687 to share they beat by one penny shipment volumes declined interesting right But we're offset by increased shipping rates and fuel surcharges man So fedex is shipping less items And they're charging more for shipping and they're charging you more for fuel on top of it They're able to transfer those costs Forward to their customers. They beat by a penny. They come in And the market likes that man in a big way Uh car max They were higher as well So they beat estimates by seven cents with the buck 56 revenue beat analyst estimates I made the company called a challenging used vehicle market This is going to be an interesting one to see how this plays out even from just a cpi cost perspective There's your action on car max. You're at 91 bucks. Now this thing has had quite a pullback from 155 back in november Let alone there's your five-year weekly you got car max barely above where you were trading at in 2017 Let's see if we can go back further I mean that's quite a run for this equity you pull back to where it was basically coming into 2020 before the sell-off For the pandemic, uh, but you're gonna open and look at that They've actually given up some of those gains to 91 bucks for car max But that's going to be an interesting one as used vehicles were out of whack in a big way We're still seeing some shortages for cars. How is that going to play out as potentially you have less consumers buying cars I mean one thing that you may see folks if things really wane Right if you're trying to buy a house that payment going up dramatically So maybe you're going to ease a new car purchase if you got to pay, um mortgage rate at 6.2 percent, etc These things will matter. Um, a car if you can put it off Maybe you're going to put it off right now with the slowdown some layoffs Uh, we'll see how that plays out car max a little bit lower today.  Yeah, you had a low of 162 But you put this thing and that's just a weekly folks You're basically chopping around to where you were at low as a 181 for netflix shares Is this market just drifting a little bit higher coming into the open you get the nasdaq now up 1% Now let's see out of curiosity. Does this go back? I don't know if the nasdaq goes back far enough. Yes, it sure does So I was talking about that we have confidence in a nice area of about 3200 in the s&p's And let's see where that lines up actually for the nasdaq In terms of where we are So the nasdaq a 382 retracement in the entire move higher gets you to 10 747 interesting you're a lot closer already to 382 of the entire run higher in the nasdaq Whereas a 382 in the s&p brings you back to 3200 So think about that for all the run that the nasdaq has had that pullback has gotten you almost to a 382 of the entire bull market run folks from 2009 to the highs coming into this year And meanwhile if we just do just something like that You will see the s&p sitting at about 3200 and if you get that type of action You're probably looking at a nasdaq 100 or maybe 9 000 And you know what folks? That shouldn't be too crazy because all that is is right before the pandemic and if you remember correctly Things were really really really good before the pandemic. The market was bustling. We had almost record unemployment, right? It's tough to remember because the market has risen so much during that time Man if that happens, okay, if we get that type of pullback You are going to see some pullbacks in the leaders, man Because you can't get that type of a pullback without seeing it happen in apple Apple already basically sitting pretty similarly just above the 382 or where it was and let's back up apple here for a second Look at this run that apples has Yes, so they started Look at this They start split adjusted in 2009 At $2 and 47 cents a 382 and apple brings you down to about 113 dollars Not out of the realm when you think we've already dropped almost $50 where we're sitting at right now What is the recent low on apple 129 and all i'm talking about is 113 get you back to the 382 That would be a $25 drop from where you're trading at right now though quite a number Can you believe that apple split adjusted? What is it? $2 and 79 cents and you're trading at 138 Just remarkable the runs now. There's some context for you. Okay There's some context for you. What is apple trading at when trump came into office? It just relates the human mind in terms of what was going on then apple is trading at 28 bucks in 2016 Right market was rocking already folks apple had a little bit of pullback It's important to remember some of those numbers when you think about where we may pull back to And things will be okay So make sure you have Your risk adjusted to tolerate Maybe possible in this market stay tuned folks. We got the opening bell coming up. 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Sign up today TFNN has just launched their new trading room the tiger zen hosted at discord TFNN has been educating traders for more than 20 years with live programming hosted by a variety of professional traders during market hours And now they are expanding their reach with the tiger's den available to all tigers and tiger's for just one dollar for the year There's no catch or added costs when you join our community of traders in the tiger's den You can look over the shoulders of tom o bryan and the other tfnn hosts while they analyze charts during their live tiger tv programs And join an interactive trading community with hundreds of members exchanging ideas Interact with other tigers and tigers as they share trading ideas news analysis and discuss the market action all trading day Even at night and on the weekends the tiger's den at discord is accessible on mobile or tablets as well So it's always at your reach to sign up today and become a part of this educational community of traders Just visit the front page of tfnn.com TFNN is excited about our new software charting program the art of timing the trade charts In collaboration with tom o bryan and using his best-selling book the art of timing the trade your ultimate trading mastery system David white has programmed an outstanding piece of software that will complement any trader's methodology Using this first of its kind program the art of timing the trade charts allows you to scan thousands of stocks for Fibonacci formation setups including guardleafs abc's butterflies and much more the art of timing the trade charts is designed to help you When scouring the market for stocks just beginning to form the trading patterns that many investors spend days weeks or even months Searching to find and right now we're offering licenses available at only $79 a month We are so confident that you're going to love this new charting software that will even give you a 30 day Unconditional money back guarantee don't miss out on this incredible new piece of software Get your copy of the art of timing the trade charts today by visiting tfnn.com This segment is brought to you by think or swim for more information Just click the think or swim banner on the front page of tfnn.com Welcome back folks We got markets open and you got a market drifting a little bit higher s and p's right now up 34 points back to a Five-minute chart you see an acceleration. We just made a high above anything that we were trading at pre-market in the s and p's You get the nasdaq up 126 right now you have the dow up 255 Let's check in on some of the companies that had their numbers last night fedex catching a pop You're up about 10 dollars and 29 cents expected move is about 11 dollars So it catches the lift to the upside uh fedex up 4.4 percent car max had their numbers last night Down about 1.2 for car max Let's see how carvana is trading uh down about 2.7 for carvana Maybe uh something in those car max numbers not too beneficial for carvana Maybe as they come out with theirs in the future this stock talk about a pullback man 376 to 28 Remarkable all right, let's check around on some of the growth stocks roku Up about 1 that thing's gotten quite a lift recently i've been talking about but the growth stocks They've gotten some lifts for sure draft kinks has been battered a bit Catching the lift off the lows, but these stocks they got to catch more a little more A more of a lift than this is what i was trying to get out there Draft kinks up 1.8 percent. Let's check around some of the fag stocks What's going on amazon they're down 8 10th percent right now Why are they trading lower right everything should be higher on a day like today microsoft up 1.7 percent right now You got google shares up 1.3 apple up 1.3 as well We jump over to tesla shares up about eight tenths percent some of the chip makers navidia I mean look how close we are to the lows still though folks getting some of these bounces navidia up 1.1 percent amd shares right now up 1.6 percent right now all right Jumping around to what else we have going on some of the other stocks that we were looking at we looked at fedex we looked at car max So city named microsoft to top pick that's why they're catching a little bit of a bit out there Lending tree lower by almost eight percent. We'll see how they're doing they cut the current current quarter guidance Recession fears higher interest rates and inflation factors for the revision lending tree right rates going through the roof in a big way You jump over to their chart Yeah, down seven percent man to 51 as this market catches a lift to the upside with the s and p now up 40 points All right, we love Fibonacci numbers folks I spent the beginning of the show talking about a nice area of confidence at 3200 so then you say okay Well, how high are we going? Well, let's see what we got in terms of Fibonacci numbers I'm gonna take these numbers off. Whoops. Excuse me. Let me take that number off Take these Fibonacci numbers off for some clarity Whoops We're moved drawing and let's see what possible areas we have for a bounce coming in from this trend and the most recent All right, we're basically there 38 49. It's going to be the 3a2 from where we are right now You're trading at 36 39. We'll see how we come into that area And if you back things up a little bit further, we got three different moves, right? You have the most recent acceleration lower pretty remarkable that you've already got almost a 3a2 retracement of the entire move Lower from 41 75 Down to 36 39 We have the larger trend that began on march 29th Now it's not a clean move, but I still want to see what type of retracements are possible here You're talking about a 3a2 of that retracement. You're basically sitting at 4 000 on the dot, which is interesting Let's take that off for a moment And let's see where we go if we're talking about from a full number If we get a bounce from the entire move pullback, where are we talking about? Keep these in mind folks because we have A decent duration of time left before these markets are really able to gain some low volatile low volatility times For the next Three months at least The market's going to be hanging on those cpi numbers Which is then going to have it hanging on the fed decisions Depending on how those cpi numbers react come in and the fed reacts So it's not a landish to think that We could get good data for a month The market may accelerate higher only to reverberate to the downside or vice versa, right? We could get another bad couple months before things really reverse in dramatic fashion There are all possibilities out there So don't discount the fact that you can get an extreme bounce here when we just traded from 4800 to 3600 ballparking A 3a2 of that area gets you back to 4 000 We're almost at 3850 right now. That's only 150 points to the upside and meanwhile we just bounce 200 points in a week So of course you can get 150 point rides if you get up to 4 000 or 4100 be very careful folks Okay, realize the risks in this market are ever present at least for the next x amount of months I'm ballparking. I'm generalizing But you got to realize That things are not sorting themselves out this month next month or the month after that This is going to take three six twelve months at least until we get some real clarity Number one what's happening to inflation and i'm going fundamental here along with technical Okay, but it's going to take a while to have some real clarity that the longer term trends in inflation Are now with us versus against us And after that happens or during that happening over the course of that happening What is happening to the economy? What is happening to The odds of a recession? Are we in a recession? How deep is that recession going to go? What type of a pullback are we going to be dealing with as the economy tries to get inflation under control? And we have rates at 6.2 for the 30 year now I think you'll see that 30 year ease a bit With the 10 year coming back to about 3.1 percent, but it may not ease that much And that is a real-term impact. We still have crude trading at a price level of 106 Can you believe we're talking about crude levels easing at the pump and we got crude at 106? It's a new normal folks Okay, and that's going to be ever present for at least a few months and i'm being best case Best case possible the bull case as they would say on wall street Is that within a few months you get some clarity that inflation is behind us and maybe the economy is not getting wrecked But that's a pretty hopeful scenario And there's not a lot of data that points to within a few months inflation being under control and the economy not being on its way to a recession I would say the other way around if anything it points to within a few months inflation still being an ever present issue Even if it may be waning And at the same time we have economic indicators pointing to the fact that we probably have a recession coming If things are going as they go right now, you know, maybe we get some easing oil prices doesn't look to be the case We've already eased Maybe we get some easing rates, but how are we going to get easing rates folks with inflation at 8 percent? That's not what's going to cause inflation to wane Money becoming free again It's a tough one All right, let's jump around and see what other articles I had up here. I want to talk about SPACs real quick The SPAC era comes to a whimpering and some interesting stats here Just talking about some of the companies that went public then they went private back again Stay away from all the SPAC folks the most notable probably digital world acquisition corporation president trump that thing Just a disaster on its way to 10 i'm sure from this chart it looks like folks You spiked to 175 you were at 100 as recently as march this thing's a one-way trip You're sitting at 28 dollars right now Uh, not sure truth social is going to be the juggernaut that it was labeled to be And one of the reasons why people love SPACs is because you did not have the regulatory handcuffs that news Usually usually come with an IPO you can basically Say a lot more than you would normally be able to say in an IPO when it comes to your expectations your forecasts and your plans etc and meanwhile None of it is held to fruition if it goes wrong now Check out some of these companies SPAC healthcare merger corp combined with the telemedicine provider saw SOC telemed to bring that company into the nasdaq in november of 2020 In the first day of trading it closed at nine dollars a share They were a public company less than a year and a half in april It boomeramed back into private hands when it was bought out for just three dollars a share by patient square capital Imagine this right? You're back in companies that are private You push them out to the public in a SPAC You let the market pull all that money back to a realistic value even more so than you buy it back They probably would have done it again if this market didn't get exposed to what a scam usually is We're gonna talk about a couple other companies when we come back folks. Stay tuned Are you in the market for buying or selling real estate in the bay area? 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That's 727 329 83 22 call us today The technology around us is changing every day with so much happening can seem impossible to keep up with all the information David white's investment newsletter the technology insider is designed to give you all the information You need to understand the technology that shapes today's markets and tomorrow's future David white has made his living staying on the cutting edge of technology His weekly newsletter will give you specific recommendations for value tech stocks As well as entry prices target prices and stops to set free trade Dave delivers his weekly newsletters every friday with updates throughout the week You can get the technology insider at tfnn.com for only 37 in 50 cents Sign up for david's newsletter the technology insider and get an inside look at everything the technology sector has to offer Try it risk-free today with our 30 day money back guarantee tfnn educating investors Will the s&p 500 continue to climb for bold trades on us large cap stocks in either direction trade spxl spu u or spxs Directions daily s&p 500 bull and bear leveraged etfs Direction leveraged etfs an investor should carefully consider a fund's investment objective risks charges and expenses before investing A fund's prospectus and summary prospectus contain this and other information about direction shares To obtain a fund's prospectus and summary prospectus call<PHONE_NUMBER> or visit directioninvestments.com A fund's prospectus and summary prospectus should be read carefully before investing An investment in the funds is subject to risk including the possible loss of principal The funds are designed to be utilized only by sophisticated investors such as traders and active investors distributor four-side fund services lc This program is brought to you by vista gold traded on the nyse american and tsx under the symbol vgz Welcome back folks. We have the s&p's right now. You're talking about a futures up 48 points at 38 47 How about the nasdaq 100? We're gonna get a 12 000 print. We just might folks You're talking about a thousand points off of the low that we were at eight trading days ago Yeah, that's last thursday and last friday. We had a low of 11,119 You might see a thousand points by the end of the today We'll see where we go now the nasdaq 100 if you talk about the pullback we had Let's reset this because we are below that level now. Let's take that off for some clarity. Let's take that one off too Back this out and I just wanted to see from where we were on june 3rd because we're catching quite a bounce here That's not going to be the exact point But yeah, you're now well above the 382 retracement of that entire pop the 50 percent said about 12,000 the 618 to 12,249 On that number you back up the nasdaq 100 because that is such a small bounce there What if we just talk about the move that really we've had? 12,685 That's an area I look in the nasdaq 100 because you're talking about an area right where we consolidated in the beginning of june Before you sold off again that would bring you right back to the 382 12,685. That's a good 700 points above where we're at right now In the nasdaq all right finishing the conversation about SPACs real quickly a couple other cases that they highlight here just in terms of how absolutely Unfortunate this whole event were for in terms of the money that they're taken from individual investors you had an auto insurer Had taken a buyout offer from a publicly trading insurance company lemonade ink and Metro mile which is that auto insurer is currently trading for less than a dollar a share far below the 14 it traded at after that acquisition corp Blankcheap company finished merging with it earlier last year and then they talk about red box Now this one's definitely an interesting one red box The company famous for renting DVDs from vending machines So it accepted an offer to be purchased by chicken soup for the sole entertainment In a deal that assessed its total equity at 31 Million dollars less than five percent of the value when seaport global Global acquisition court gotta love all the names of these chicken soup for the sole seaport global acquisition corp Help them go public So less than five percent of the value from when they went public bought In in a flashback to the meme traders as they say here They've sent that stock soaring far above the price shareholders will get if the deal goes through and there's a chart red box. Whoops That's not it. Let's pull up red box here rdbx is their symbol Uh, you know if you like trading meme stocks that have nothing to do with the fundamentals Underlying the company in our complete momentum play of hot potato Don't end up with the stock or it might be worthless then this stock might be for you You're down four percent today to 948 on their shares Uh, we're as high as 18 recently just recently 11 days ago But red box another spack deal going bad to going good as we have the s&p is continuing to drift right now up 52 points All right, what else do I have pulled up here? Talking about the spacks We got our biggest movers. Yeah, we talked about netflix. So they're laying off 300 more employees NASDAQ united airlines their pilots getting raises not surprising in terms of the battle to get pilots right now in the air Right, we just what were the stories yesterday and united was cutting flights to new work I think one of the airlines was cutting flights to small cities I think united was cutting a new work as well Maybe it's american netflix laying off 300 more employees as revenue growth slows Not what you want to see from a big growth company Uh a month after the company eliminated 150 positions in the wake of first subscriber losses in a decade They warned investors a couple months ago that it would be pulling back on some of its spending growth over the next two years That's what you should be doing if you're not going to be taking in the same revenue that you were thinking You can't be spending the same money that you had planned when the revenue is not going to be there Especially in this market, uh, the market is going to punish you if you're losing way too much money right now in an environment Where growth numbers are coming down in a big way, but The chief financial officer said during the earnings call in april that netflix is trying to be prudent about pulling back to reflect the realities of the business However, they're not going to do it with content.  I think it was or the week before so disney's up 3.1 right now quite a low 90 201 Disney was battling with Some of the biggest streaming companies out there. They got the tv rights To some sports going on in india. I think it was cricket But they did not get the streaming rights and each of those independently going for like 6.7 billion dollars I'll try and find that article, uh at the next break And I believe it was amazon that even pulled out amazon Bezos One of the wealthiest guys if not the wealthiest guy in the whole world right now said, you know what? I would love to be in streaming in india For for cricket. I think that's what it is. I'll pull it up But i'm not going to spend 7 billion dollars to do it because i'm not going to get that money back Especially for their company probably where you're not really making that money back It's just kind of one perk that's coming with the prime Contingent, uh, but nonetheless they weren't even in the bidding. I think at the end to illustrate How expensive some of this stuff is going to be and that's where the growth is going to come from Some of the most viewed Programs on television folks. I think they're all live sports and they're you know, the super bowl is the number one I'm pretty sure and they go down the line But live sports is nothing like it right now and that's going to be the most expensive thing out there These companies aren't even paying for that right now So that's been a battle for disney Uh, if you're looking at disney and netflix though folks I would say disney a million fold over that company because netflix They're changing their business plan. They're trying to create a new business plan for that company disney has their business plan Folks, there's only one disney the the ip that that company has in the long run You can't match it and they're going to be putting out hit after hit folks as the years go forward And uh, they have a business model. I mean you think about the merchandise, right? I got two young kids 1511 11 year olds in my house And the merchandising that disney does there's nothing like it I mean, maybe some of the shows like coco melon and some of the spin-offs I've talked about that company before private company Maybe But name me one doll that netflix has ever put out or merchandised Yeah, i'm sure you have stranger things dolls, right? You have merchandise that flies with some of their programs But compare that in your mind to the ability of disney to merchandise brands like Mickey mouse to merchandise brands like star wars marvel etc There's nothing like it on netflix folks Uh, and then you add the parks into it disney parks are going to be packed for two or three years The world has changed. We got a backlog of people that want to attend disney right now where things are literally sold out That's going to be a big factor to weather Some of the money that they need to spend in streaming as well And they do need to up their ante because on the adult spectrum Uh, disney's lacking, man And maybe they don't need that as much when you got a stranglehold over the children no pun intended But you got the kids Because man, I tell you we watched lion king lion king was already going this morning folks in my house It was going at about seven in the eight in the morning Frozen gets played all the time um A bunch of other good ones that they just put out as well Can't cancel that on the kids. I can cancel something that I watch hbo Maybe I'll cycle through those eventually although i'm watching the succession right now, which is pretty good as well Uh, but stay tuned folks I'm gonna find the article that I was talking about for those streaming numbers I think it was within the last couple weeks it happened amazon not even participating And you're talking about six to seven billion dollars for streaming rights That's india though one of the world's biggest markets as they're trying to make a hold into that company Stay tuned folks. 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You need to act on at any time First time subscribers also get a 30 day money back guarantee If you're not satisfied, let us know and you'll get a full refund within 30 days of signing up Subscribe to the fibonacci 24 7 newsletter today tfnn.com educating investors This segment is brought to you by think or swim for more information Just click the think or swim banner on the front page of tfnn.com Welcome back folks quite a rise we got going on the market right now We talked about the fibonacci levels 38 49 was the 3a 2 retracement of the entire move lower from june 3rd You're talking about from 41 89 about 36 80 36 39 And we're going through that level right now with the s&p is up a solid 1.55 percent the nasdaq now greater than 2 percent In the positive dow up 1.2 percent the russell up 1.8 percent So back to disney streaming the money that they're spending right now and here is the article. Okay so disney and reliance bid 6.2 billion dollars combined So reliance wins the streaming rights disney gets the tv option and this was 10 days ago is when this came out I think the actual auction took place june 12. So this news out june 14 The total value is 6.2 billion dollars that is now over the english premier league as global firms vie for subscribers on the subcontinent I would say so India I think they talk about it 1.4 billion people I think it's the number for the first time ever you had streaming rights Beating out traditional broadcast so you have reliance winning the streaming rights at 238 billion rupees that comes in At what probably half of that I guess about 3.1 billion right And you have disney winning the television rights for 236 billion rupees the ip l learned more than 600 million viewers this year 600 million In a market with almost 1.4 billion people at 15.1 million dollars per match They take over the english football league and so to jump through it. Okay This is a big tournament takes place in india The four contracts started in 2020 were up for grabs broadly covering television and digital rights in the indian some continent and overseas Now amazon they pulled out at the last second Part of the reason they're just not willing to spend the money. They were thinking it might get up to 7.7 billion. They took in 6.2 amazon Probably changing their plans a little bit when they get a little bit of a pullback folks You've seen the pullback amazon has in their shares Not able to spend that type of money recklessly anymore as the market punishing them for losing money dramatically, man Just this year alone amazon today up 1.3 percent Keeping in mind those companies folks. They got a lot of money to spend this market. It's catching a bit Stay tuned folks. We got live programming coming up. Have a great friday