About this Video

• Video Title: The Tariffs Just Broke The Economy (And It's About To Get Worse)
• Channel: Marko - WhiteBoard Finance
• Speakers: Marko
• Duration: 00:16:52

Introduction

This video analyzes the economic impact of tariffs, arguing that they've negatively affected the US economy and are poised to worsen the situation. The speaker uses data from Apollo Global Management's report to illustrate the consequences across various sectors, from businesses to consumers.

Key Takeaways

• Tariffs create a domino effect: Tariffs lead to slower shipping, decreased trucking demand, layoffs, empty shelves, and ultimately, a consumer recession. This isn't a natural business cycle but a direct result of intentional policy.
• CEOs are acknowledging the recession: Several CEOs from various companies (Southwest, Chipotle, Pepsi) are openly stating that their industries are experiencing recessionary conditions. Consumers are cutting back on spending.
• Businesses are cutting spending: Companies are reducing spending, cancelling projects, and stockpiling goods in anticipation of further tariff increases. Earnings forecasts are significantly down, and new orders are collapsing.
• Consumer sentiment is plummeting: Consumer confidence is declining across all income levels, and anxieties about job loss are rising sharply. People are falling behind on credit card payments, and even tourism in places like Las Vegas is decreasing.
• US companies heavily reliant on China: US businesses generate over $1 trillion in revenue from China, highlighting the significant impact of trade wars on American corporations.

The video mentions the following CEOs and their statements regarding recessionary conditions:

• Southwest CEO: Stated, "I don't care if you call it a recession or not, in this industry it's a recession."
• Chipotle CFO: Said customers are skipping burritos to save cash.
• Pepsi: Reported that consumer strength is weakening, referencing hesitation on purchases of guacamole and soda.

The video highlights several key indicators of declining business activity:

• Earnings forecasts: The sharpest drop since the pandemic.
• New orders: Collapsing across various sectors, indicated by data from the ISM new orders index and individual regional Federal Reserve surveys (New York, Philly, Dallas, Richmond, and Kansas City).
• Capex (capital expenditure) spending: Being slashed significantly as businesses reduce investment in growth due to anticipated economic downturn.