Dear Reader,
Today is our National Day of Prayer.
I didn’t know we had one, but the U.S. Congress designated the first Thursday in May, asking people to “turn to God in prayer and meditation.”
When I was younger, I used to say, “how do you find God? How do you find God? How do you find God?”
And an old friend of mine said to me, “you don’t have to keep looking on the outside for God. You have God inside of you. You don’t have to let him in, just let him out.”
So I will meditate on that today, and for now talk to you about recession.
Gene Seroka who runs the Port of Los Angeles announced shipping volumes will plummet 35% next week.
We’ll finally see China tariffs start to bite.
The Port of Los Angeles handles almost 50% of ALL Chinese imports to America.
This is a big deal. We are seeing the real effects of these tariffs taking hold.
Up until now, everything has just been conversation.
Now, it’s real.
This news follows a report released Monday by money management firm Apollo Global.
In a private presentation for clients, Apollo’s Chief Economist laid out what he calls “a tariff-to-recession timeline” for the next 90 days.
Here’s how it goes:
April 2, 2025: Tariffs announced. Container ship departures from China to U.S. slow down.
Early-to-mid May: Container ships to U.S. ports come to a stop.
Mid-to-late May: Trucking demand comes to a halt, leading to empty shelves and lower sales for companies.
Remember, shipping containers go from China to Los Angeles.
People unload them.
Truckers come and pick up the supplies and bring them to stores across the country – gas stations, Walmarts, etc.
Trucking demand will come to a halt because they’re not going to be needed to pull those containers down and drive them around the country to destinations.
Late May to early June: layoffs in trucking and retail industries.
Summer, 2025: Recession.
This is his prediction – his “tariff to recession” timeline.
I see it very much the same way.
I don’t see a logical argument that tells me this isn’t going to happen.
Even if we cut a trade deal with India.
I hear U.S. Secretary of Commerce Howard Lutnick running around saying we’re going to have a trade deal with India.
President Trump said something about that at his 100-day rally in Michigan Tuesday.
You might get a trade deal, but who knows how long it takes to get that done through India’s political system and to actually begin to see the benefits.
You can announce five great trade deals a day, but at the end of the day, ships still aren’t coming to Los Angeles.
Truckers still aren’t picking up packages and driving them to stores across the country.
So yes, I don’t know how we don’t see a massive decline in economic activity and probably a recession.
Now, recession is a scary word.
I always remember Reagan saying, “recession is when your neighbor loses his job. Depression is when you lose yours.”
Recessions are scary because you see a decline in economic activity… layoffs start to spike… and of course the stock market gets hammered.
We’ve been talking about this every week – preparing for a recession.
Because if you’re a predatory investor, an opportunistic investor, when recessions come you build up as much cash as you can before they hit (right now, if you haven’t already).
We’ve already seen that institutional investors, sophisticated investors, have been selling into these rallies, trying to raise as much cash as possible so that when this market cracks – bang!
We get to go in there and buy great companies at cheap prices.
This is something I feel very good about.
Remember, recessions happen once every four or five years on average.
When they come, we like to take great advantage of them.
I invite you to join us in this.
“The Buck Stops Here,”
