The StoneZONE with Roger Stone - Barry Habib ｜ 04-09-25

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00:00:30.000 And you're back in the Stone Zone.

00:00:32.680 Joining us now, Barry Habib.

00:00:34.720 He is the chief executive officer of MBS Highway.

00:00:38.700 He's an American entrepreneur and a frequent media source when it comes to his expertise on mortgages and the housing market.

00:00:47.460 But I call him an economic guru because he is so much more than an expert on housing and mortgage.

00:00:55.200 He is a finger on the pulse of the economy and how it really works.

00:00:59.560 And what I love about Barry is he's able to make complicated things understandable to the average citizen.

00:01:05.760 So, Barry, welcome back into the Stone Zone.

00:01:09.660 Thanks, Roger.

00:01:10.560 It's always wonderful to be with you.

00:01:12.300 So, there's a lot of disinformation out there.

00:01:17.200 President Donald Trump moving ahead like the stalwart that he is on one of the prongs of his plan to revive the American middle class and return prosperity and jobs and opportunity to the country.

00:01:30.740 President Trump today announced he is temporarily lowering tariffs on every nation except for China, whose tariff he is raising.

00:01:38.880 How do you expect the American economy will respond to higher tariffs on China?

00:01:43.080 Well, if you go by the stock market as a gauge, the stock market really liked it.

00:01:50.780 We went from a stock market that was to the downside to finishing the day up on the Dow, you know, 2,962 points.

00:01:59.320 That's one of the biggest turnarounds and point changes that I can recall seeing.

00:02:06.840 So, it's being cheered on by the marketplace, I guess, feeling that the economy will do very well.

00:02:14.400 You know, Roger, these tariffs there, we've been seeing a lot of market movement back and forth as the headlines come out.

00:02:20.260 So, it's creating a lot of uncertainty, and that's the main thing right now is just people are uncertain, and the media plays checkers.

00:02:29.440 They don't play chess.

00:02:31.240 You know, what I'd like to do with you is take a deeper look at this stuff and maybe what could be driving some of the reasons and rationale as to how these tariffs have been implemented.

00:02:45.040 Okay, well, so, first off, when we take a look at tariffs, why are we doing this?

00:02:51.760 I think many people will agree that the path we were on was unsustainable.

00:02:57.520 To have the large amount of debts that we have, the large deficit that we have, over $2 trillion and $30 trillion plus in debt, greater than our GDP, more than 100% of GDP,

00:03:11.500 these things don't lead to good outcomes, and we could have made changes, but those days are gone.

00:03:19.620 The Biden administration, they put us in a pretty big hole.

00:03:24.020 Now, it's unfortunate that we're here, but the key is, is how do we fix it?

00:03:29.380 So, what are our options?

00:03:31.480 Option one, can we cut spending enough?

00:03:34.060 Well, when you think about the things that are kind of must-spends, like you have to spend on military, the interest on the debt, Social Security, Medicare, Medicaid,

00:03:45.140 when you take that, it's really the lion's share of what we spend.

00:03:49.800 The amount that's left for discretionary spending, while it is sizable, it's just you can't cut that much out of it to narrow the gap.

00:03:58.200 So, okay, what else can you do?

00:04:00.060 You can raise taxes.

00:04:01.720 But the top 10% are literally keeping our economy going right now.

00:04:06.340 They represent about 80% of economic activity, and therefore, if you tax them, you will send the economy into a tailspin.

00:04:15.140 However, even if you took 100% of what they earned, you still wouldn't close the gap on what the deficit is.

00:04:23.600 The deficit is just that big.

00:04:25.580 So, what else can you do?

00:04:27.000 Well, a VAT tax, like many people have in other countries, if you've traveled, you've experienced that called value-added tax, it's a tax on consumption.

00:04:36.500 When you buy something, it's like a sales tax, but to a greater extent.

00:04:40.660 Well, I don't think at this point in time have the appetite for it, but this is a form of that on imported goods.

00:04:47.940 So, in trying to do this, you're trying to raise revenue and take in revenue to reduce the deficit, and you can do it in a sizable manner without having to go to extremes on taxing people to hurt the economy

00:05:01.060 or cutting vital things that are things that we depend upon or cutting the military too thin.

00:05:08.200 So, it's understandable.

00:05:10.440 However, it does have a downside, because what happens now is imported goods could wind up costing more, but people don't understand how it works.

00:05:19.520 They see the headlines. 0.89

00:05:20.700 They hear all this crap, and the negative media bias and anything that Trump does, they want to criticize. 0.98

00:05:26.940 So, it's easy to take pot shots, but let's take a little bit of a dive where people don't understand it. 0.98

00:05:31.500 So, who pays this?

00:05:33.660 It is not paid by the country.

00:05:35.240 So, if you put an import tax on Vietnam, Vietnam doesn't pay it.

00:05:40.320 So, when they send something to us, it is the importer.

00:05:43.720 XYZ company wants to buy these shirts or clothing or dress or pants from Vietnam.

00:05:49.200 They buy it.

00:05:50.100 They pay the tax.

00:05:51.160 It's like when you go to a store and you pay a sales tax.

00:05:53.740 So, that's what happens.

00:05:54.780 You make that tax payment from the importer.

00:05:57.220 Now, the importer has a decision to make.

00:05:58.680 That item that used to cost $100, now might cost them, let's say it's a 20% tax, now costs

00:06:04.420 them $120.

00:06:05.480 Do they have the power to go ahead and send that $20 increase on to their wholesaler or

00:06:13.920 whomever they are selling it to?

00:06:16.160 Maybe they do.

00:06:17.380 But when they do now, that wholesaler makes a profit on top of it to the retail.

00:06:21.740 Maybe, I don't know, that's 20%.

00:06:23.800 And then, on top of that, the retailer might have 100% markup when they sell it.

00:06:29.100 So, the wholesaler's profit, the retailer's profit are not tariffed.

00:06:34.300 They don't get tariffed.

00:06:35.680 So, even if there's a 20% tariff, the consumer may only see something closer to 5%.

00:06:41.340 And I'm not saying 5% is insignificant, but it's important to understand this as to how

00:06:46.860 much it should be.

00:06:47.760 Is it inflationary?

00:06:49.420 Only one time.

00:06:50.580 It's not like normal inflation, which is persistent.

00:06:53.120 It's a one-time price adjustment.

00:06:55.240 So, now that we understand this, what's the idea here?

00:06:58.660 We did an analysis, Roger.

00:07:00.300 I sent it to you on every country's percentage of GDP that what they export to us.

00:07:06.460 And it is very significant.

00:07:08.920 So, that's why a lot of countries want to come and make deals with us.

00:07:12.440 Now, it takes a little time for them to feel the pain, which is why what President Trump

00:07:17.580 is trying to do is play tests here and not checkers.

00:07:22.320 Now, China is a different story.

00:07:24.100 And we are seeing an escalation in trade war come back and forth between the U.S. and China.

00:07:29.820 The one major card that could be played by the U.S. is what if you delisted Chinese stocks 0.95

00:07:36.260 and robbed them of the ability to have capital with their companies in China that comes from the U.S.?

00:07:44.440 That could be a major card.

00:07:46.260 Scott Besson, when asked about this, said everything is on the table.

00:07:51.160 So, that just kind of gives you an outline of where we are and what the mindset is.

00:07:56.420 And obviously, undertone of this is, of course, we want a level and more fair playing field of trade

00:08:02.740 because President Trump, and rightfully so, feels like there has not been fairness in trade.

00:08:09.500 So, you could say, hey, look, I don't want to rock the boat.

00:08:12.720 Even though I'm getting screwed here, I don't want to go through any pain.

00:08:16.360 But then you're on that unsustainable path. 0.84

00:08:18.300 Or you could say, let's make this more fair, let's raise some revenue.

00:08:21.840 It means we go under a little bit of pain here initially, but longer term, it's fixed.

00:08:26.100 Because if you don't do anything, it just gets worse, and then you could have a crisis.

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00:09:01.000 I watched Secretary Besant did a press stand-up outside the White House not long ago, a couple

00:09:09.000 hours ago.

00:09:09.600 I am really in awe at this guy's skills as a communicator.

00:09:16.280 I think he is a very reassuring voice of calm.

00:09:20.760 I mean, I know him.

00:09:22.600 I know him to be an outside-the-box thinker who is completely loyal to the president and

00:09:27.100 completely committed to this plan.

00:09:29.600 The New Republic ran a totally baseless article the other day saying he was so upset by the

00:09:35.280 president's economic plan that he was thinking of resigning.

00:09:38.600 I spoke to Besant myself Sunday night.

00:09:41.540 Whole cloth.

00:09:42.400 Nothing to it whatsoever.

00:09:43.500 He is deeply committed to the president's plan, and he gave me a number of reasons why

00:09:47.640 I thought, why he thought it would work in the long term.

00:09:51.880 But you're right.

00:09:53.280 Trump is playing the long game.

00:09:55.760 Now, I also saw Secretary of Commerce Lutnik on the Sunday shows last Sunday.

00:10:00.580 My takeaway was not candidly as positive.

00:10:04.880 He was entertaining, but he didn't have the reassuring calm and confidence.

00:10:11.480 And actually, Besant's more like you, Barry.

00:10:15.320 He takes complicated issues, and he makes them understandable to the average consumer

00:10:21.140 and the average American.

00:10:24.360 That's a very important key.

00:10:27.060 And I had the pleasure of spending about 15 minutes one-on-one with Scott Besant in no

00:10:33.200 small part thanks to the fact that he knows that you and I have a friendship and his high

00:10:39.520 regard and respect for you allowed him to give me the time to spend with him.

00:10:44.040 I found him to be absolutely brilliant and the best Treasury Secretary that I have ever

00:10:50.880 seen in the United States that has an understanding of the housing market, the mortgage market,

00:10:56.280 the spreads between 30-year fixed-rate mortgages and Treasuries, how to handle the Treasury

00:11:01.460 market issuance, which is very important.

00:11:03.680 He has a desire to bring long-term yields down, and I think he'll be very, very successful

00:11:08.540 in doing so.

00:11:10.000 I was in awe at his vast knowledge of not just the things that normal Treasury secretaries

00:11:17.820 are looking at, but even in other areas.

00:11:22.000 The guy, his history is one of brilliance as a fund manager.

00:11:26.280 He worked with Stanley Drunkenmiller.

00:11:29.300 He is someone who is extremely, extremely experienced and knowledgeable, and not just

00:11:38.200 having experience, but having successful experience.

00:11:40.740 You know, I had a conversation with him months ago about the housing market and the fact that

00:11:47.940 the lack of affordable housing is a gigantic problem in this country.

00:11:52.960 Robert F. Kennedy Jr., I think, serves credit for really raising this during the most recent

00:11:59.000 presidential campaign, and I hadn't realized it.

00:12:03.240 The extent to which it is a problem, it's not just a problem in any one section of the

00:12:07.540 country, it's a problem across the country.

00:12:10.420 I think that Bill Pulte, who the president appointed to the Federal Home Finance Administration,

00:12:17.440 like Besson, another superstar, a guy who comes from the housing industry.

00:12:21.640 Pulte Homes, people may be familiar with the name, one of the largest homebuilders in the

00:12:25.620 country.

00:12:26.480 Trump has an all-star team around him, particularly when it comes to the economy.

00:12:33.120 Now, the stock market shot up today, as you say, to a record high or a record gain.

00:12:39.820 Do you think, this may be an impossible question to answer, what do you expect the stock market

00:12:45.000 to do tomorrow?

00:12:47.600 I'm a little leery that these gains continue.

00:12:49.740 I think there could be some profit-taking that happens.

00:12:52.380 You know, the last couple of days, I know you get our commentary, we had thought that

00:12:56.720 the stock market would have a turning point two days ago.

00:12:59.540 It did.

00:12:59.940 And yesterday, with the stock market up, I did not feel it would hold its gains.

00:13:04.880 And it was up 1,500 points.

00:13:06.240 And our commentary was that it would close to the downside.

00:13:09.020 And it did.

00:13:10.220 And then this morning, quite honestly, what I said, I have no freaking clue what it's going

00:13:13.840 to do today, because there's just a lot of uncertainty out there, and we don't know which

00:13:20.260 way the headlines are going to go.

00:13:21.840 But I think the stock market at these levels had such a strong close that it's quite possible

00:13:29.320 that in the morning we see it open.

00:13:31.020 But I don't know if there is conviction, Roger, for this to continue throughout the day.

00:13:38.080 I'm looking at my charts here.

00:13:40.360 I think that we could see a little bit more of a move up in the morning, but it would not

00:13:44.980 surprise me to see some of those gains relinquished.

00:13:47.580 And then you have a lot of trading that says, OK, well, before we see another down day, I want

00:13:52.460 to get out.

00:13:52.880 And that's why you've seen so much momentum.

00:13:54.640 It happens so quickly, because now with all the program trading, as soon as you start to

00:13:58.820 see some profits gone, then it triggers selling and selling and selling, but it gets more

00:14:02.360 selling.

00:14:02.680 So I would not be surprised to see an upside open tomorrow, but I think that there is a

00:14:09.400 reasonably good chance that a lot of experienced traders will use that as an exit period and

00:14:15.860 get out while there's still so much uncertainty.

00:14:18.960 And therefore, I don't think we hold the gains.

00:14:21.280 In my book published several years ago, Stone's Rules, with a forward by my good friend Tucker

00:14:27.820 Carlson, I had two rules.

00:14:29.540 One was, what goes up must come down.

00:14:32.520 The other one, you'll like even more.

00:14:34.360 Whoever talks first loses.

00:14:36.780 And so it is, it's going to be interesting to see what happens.

00:14:40.000 What do you expect the European Union to do?

00:14:43.900 Will they make a substantial concession to the United States in light of the president's

00:14:47.760 strategy of isolating China?

00:14:49.440 Or is the EU going to work with China against American interests?

00:14:53.640 We have about two minutes here, and then we'll go to commercial break in return.

00:14:56.900 Well, as you know, the EU had just today voted to ratify their plan to come up with a plan

00:15:06.060 which would have some retaliatory tariffs against the U.S.

00:15:10.760 But in light of what happened today, where we dropped it to just the 10% baseline, I would

00:15:16.740 expect Europe to back off.

00:15:18.260 I don't think Europe wants to be in a situation where they're at odds with the U.S.

00:15:23.500 You know, whether or not they trust the U.S. completely or not, I think they trust the

00:15:29.000 U.S. more than they trust China.

00:15:31.700 And therefore, I don't see them trying to form alliances with China against the U.S.

00:15:37.980 I think that this move by President Trump today to reduce the tariffs to the 10% baseline

00:15:43.720 will bring the European Union closer to trying to cut deals with us in fairness rather than

00:15:48.860 move towards China.

00:15:49.620 Now, folks, if you're just tuning in, this is the Stone Zone on the Red Apple Audio Networks,

00:15:56.500 and we're talking to Barry Habib.

00:15:59.480 I call him an economic guru because to say that he's just an expert on housings and mortgage

00:16:05.620 would greatly understate his knowledge and his wisdom.

00:16:08.980 We're glad to have him because, well, as I think it was James Carville, my Democrat counterpart, 0.99

00:16:14.420 once said, it's the economy, stupid, and indeed, it is the economy. 0.99

00:16:20.000 Here's what we know. 1.00

00:16:20.980 What we were doing under Joe Biden and Barack Obama was not working, did not work.

00:16:27.500 We reversed that trend when Trump was president in his first term.

00:16:30.280 Then Biden returned us to the policies of Obama, and the economy suffered, particularly the middle

00:16:36.680 class working family and taxpayers.

00:16:39.660 Donald Trump has changed the political dynamic.

00:16:42.660 The Republican Party is now the party of working people, of the middle class, no longer the party 0.70

00:16:48.120 of the elites, no longer the party of Wall Street, no longer the party of the millionaires

00:16:52.200 and billionaires.

00:16:53.240 We'll be right back with more of Barry Habib.

00:16:55.840 So whatever you do, don't touch that dial.

00:16:58.700 And we're back in the Stone Zone here on the Red Apple Audio Networks.

00:17:03.820 We're talking to Barry Habib, the chief executive officer of MBS Highway.

00:17:09.580 We just call him economic guru.

00:17:10.960 Here's a question for you, Barry, just a little off topic.

00:17:14.640 But how do you feel about acquiring precious metals like gold and silver in a tumultuous

00:17:22.260 economic time like this?

00:17:24.780 Roger, we've talked about this several times.

00:17:27.400 And back about $800 in price ago in gold, you know, bullish in every time I've been giving

00:17:33.800 you the same thing.

00:17:34.480 Here we are at these extraordinarily higher levels.

00:17:38.060 So our thoughts on gold, I know you agree, have been on and people that have needed that

00:17:44.140 advice have done exceedingly well in there.

00:17:47.160 I do think that in times of uncertainty, gold is a place that you can certainly hide because

00:17:52.700 here's what would happen.

00:17:55.680 The way the mechanics of the market, I just want to try and explain this to people.

00:17:59.860 So we had some unusual circumstances.

00:18:02.740 You saw stock prices decline, you know, up this morning as well.

00:18:07.860 You saw at the same time, bond prices were selling off, stocks were selling off, and our

00:18:14.200 dollar was weakening.

00:18:15.340 So what was happening?

00:18:16.540 What did people decide to do?

00:18:18.300 They didn't put it in Bitcoin.

00:18:19.920 Where did they go?

00:18:20.860 They went to probably some in cash, but gold was soaring.

00:18:25.040 So a lot of people put their money in gold.

00:18:29.440 So during times of volatility and uncertainty, gold seems to be the place to be.

00:18:34.740 And it was very interesting because as stocks rallied and came back and the bond market came

00:18:40.840 back, so yields declined, so people bought bonds, they really bought stocks.

00:18:45.140 But what did they do?

00:18:46.920 They did not sell gold to do so.

00:18:49.560 They took it out of cash, which means that they said, hey, gold is a place I'm hiding.

00:18:54.140 If things get bad, but even though that's money I'm hiding, I'm not parking it there.

00:18:59.820 I'm keeping it there because I'm comfortable with gold.

00:19:02.540 All this to try and answer your question and say, I think gold has more room to run, Roger,

00:19:07.380 because I don't think that this move up in gold is temporary, because if it were, gold

00:19:12.120 would have lost its gains when the stock market rallied back and people said, okay, I'm going

00:19:16.180 to buy stocks with both fists.

00:19:18.240 Let me sell gold to do so.

00:19:19.840 No, they took it out of cash or they took it on margin.

00:19:22.580 And that's why.

00:19:23.260 Now, by the way, Roger, here's another thing that's very important about answering your

00:19:26.740 question on gold.

00:19:28.000 When the stock market takes a sudden drop like it did, it's not that it declined, but

00:19:32.980 that it declined suddenly.

00:19:34.920 That triggers margin calls.

00:19:37.120 So broker-dealers say, hey, you have this on margin.

00:19:39.520 You've now come underneath your margin requirements.

00:19:41.920 You've got to pay up, and you've got to pay up now.

00:19:44.100 So how do you raise cash?

00:19:46.020 One of the ways that they would do it is by selling other assets.

00:19:48.920 The old saying is, you don't sell what you want, you sell what you can.

00:19:53.600 And what you can sell are things that are valued, like from the bond market or gold.

00:19:57.640 They did not choose to sell gold.

00:20:01.020 They sold bonds.

00:20:02.360 They took it out in cash.

00:20:03.820 So what this tells you is that gold is someplace where people are investing money and they're

00:20:08.380 not letting it go.

00:20:09.340 So that's my reasoning as to why I think gold will continue to do well for us, Roger.

00:20:16.040 All right.

00:20:16.460 I appreciate it.

00:20:17.220 I think we are, unfortunately, out of time.

00:20:19.240 I want to thank my guest, Barry Habib, the chief executive officer of MBS Iowa.

00:20:25.280 But we just call him the guru, Barry, the economic guru.

00:20:29.380 Barry, thank you so much for joining us today in the Stone Zone.

00:20:31.980 And thanks.

00:20:32.540 And folks, until we meet again, God bless you and Godspeed.

The StoneZONE with Roger Stone - April 09, 2025

Barry Habib ｜ 04-09-25

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