The SpaceX IPO is Here, Oil Falls as Jawboning Intensifies

[00:00:04]All right, good morning everybody.

[00:00:13]Good morning and happy Friday everybody.

[00:00:15]Today is June 12th, 2026 and our top story this morning, the SpaceX IPO is finally here. Today is the day SpaceX is expected to start trading sometime after the opening bell at $135 a share. The largest IPO in history. And even that doesn't quite do it justice at $75 billion.

[00:00:42]SpaceX's IPO will be more than double the second largest IPO in history, which was Saudi Aramco in 2019, which was just 29.4 billion. So more than double the prior record for largest IPOs here. Now the IPO was four times overs subscribed which means basically four people committed to buying four times as many shares as they were offering. That sounds great. It's it's not great. It's good. It's not great. IPOs are typically two to 10x overs subscribed. So this number at four, you know, kind of right in the middle of that band. Um, again, it's not great, but considering the size of the IPO at 75 billion, it is pretty impressive that it's still 4x overs subscribed. The question on everybody's mind, will Elon Musk become the world's first trillionaire?

[00:01:31]He's currently worth about $970 billion, which means a a modest move upwards in SpaceX today would make Elon Musk a trillionaire. Uh, yeah, apparently that's going to be a thing. Now, um, also late breaking yesterday, apparently the allocation to retail investors has been lowered to 20% down from 30%. Which would suggest stronger institutional demand for SpaceX shares. So, uh, you know, look, I'm I'm sitting this one out. I'm I'm not participating. It's probably going to do pretty well just because of the rule changes for index inclusions. Um, but I will be making some popcorn and watching this thing because history is in the making today.

[00:02:15]Also going on this morning, the oil jawboning is intensifying. Midday yesterday, President Trump called off the planned surprise attack that he had telegraphed on Car Island. Um, that's this is now like the 38th time that we've been minutes away from a peace deal. Apparently both sides have agreed in principle to a framework of a memorandum of hopefully one day not killing each other. Um Iranian state media is releasing their version of this agreement which includes all the things that they want which we've never agreed to like giving them all their frozen assets back and they get to maintain a toll booth in the straight of Hormuz US pulling forces out of the region.

[00:02:59]that's never going to happen. So, the fact that the two sides are still releasing their very different versions of the deal that are still miles apart tells me this is just more more jawbon, but it's working. You know, people keep saying, "Why are they doing this? Why why is President Trump saying these things that we all know are obviously about being close to a peace deal?" Because the market is trading it, right? I don't think anybody is looking at this news and saying, "Oh, yay, a deal, and I believe that, therefore, sell oil." I think people are looking at the announcement and saying, "I don't believe this, but sell oil anyway." I don't really get it, but it's working.

[00:03:39]Oil is at $85 now, down from the high yesterday of 93. So, I mean, eight bucks a barrel in oil on this story that everybody knows is fake. The ceasefire has no close. Um supposedly there's going to be a signing ceremony at during the G7. Uh the ceremon the signing would happen in Switzerland next week. So you know just like that through jaw boning they managed to buy themselves another week of relatively stable oil prices here in the high 80s maybe low 90s.

[00:04:12]Uh, meanwhile, we've got Michael Sailor was making waves yesterday for comments that he made, claiming he never said they would never sell Bitcoin. Michael Sailor is saying, "I told you never sell your Bitcoin. I never said we wouldn't sell our Bitcoin at Micro Strategy." Um, okay.

[00:04:35]I I'm I'm not going to go peruse every comment Michael Sailor has made looking for sound bites here. But even if what Michael Sailor is right and that he never said Micro Strategy would never sell and he just told you not to sell, well, what is he really saying? He's like, you're my exit liquidity, hodlers out there. And like, look, I I like Bitcoin. I own a lot of Bitcoin. Uh but Michael Sailor is a degenerate gambler who is a wild man taking risk with other people's money. massive un unjustified risk with other people's money and he kicked off a blood bath in Bitcoin last week with a sale that he maybe he didn't outright say it or maybe he did but he certainly suggested they would never do it and Bitcoin crashed because of it and now he's trying to walk that back and you know of course Sailor's like no I never I never said I would never sell I told you never sell cuz cuz I need money to have a titanium rod installed along my spine from my pelvis up to my cranial base. That makes me physically unable to move my neck in any direction. And so I could also buy more Bitcoin. Uh just stop listening to Michael Sailor. And and by the way, I posted this last night just telling people to stop listening to Michael Sailor. And I've got all these people who have BTC in their Twitter ID making all these nasty comments like all these stupid sailor bots. I I tell you again, I own Bitcoin and I like Bitcoin long term, but I Bitcoin maxis are worse than strangers in an elevator who talk about the weather. That's all I can say.

[00:06:10]They're just awful people.

[00:06:13]All right, also going on this morning, Korean pension funds are in the news.

[00:06:17]This story had me kind of grinding my mers this morning. Apparently, Korea's state pension fund has suspended its portfolio rebalancing balancing rules this year. Uh why would they do that?

[00:06:29]because most Korean stocks have gone vertical as the memory chip craze has taken over and so they suspended their own rules so they didn't have to sell and rebalance their portfolio, sell stocks and buy more bonds or just take profits. And why is this so awful?

[00:06:48]Because those rules are there for a reason. Rebalancing is done so that you manage to capture gains during irrational market moves up before they move back down. And everybody knows these memory stocks are coming back down to earth like they do every freaking time. It's a largely commoditized space.

[00:07:05]And this demand for for memory chips is being driven by this insatiable hunger for hardware and the AI space which is financed by venture capital that's not going to be there forever. Hence the special purpose vehicle debt and the stock issuance that all these companies are doing. And so the Korean pension fund suspended their rules so that their pensioners didn't actually realize any of those gains and they inadvertently caused a currency crisis because the suspension of this rules which took away selling pressure that would otherwise have been there caused the stocks to rally even more triggering rebalancing requirements for overseas hedge funds and global institutions. And when they sold, they got their Korean Juan and they converted them to dollars. And whoops, there's so many people selling Korean stocks now that they're actually causing the South Korean wand to decline in value. So, Korean pension funds changing their rules in order to keep this stupid AI bubble inflated actually caused a little bit of a currency crisis.

[00:08:04]And this is not the only example of changing rules for for the sake of the AI bubble. See also the SpaceX IPO.

[00:08:11]They're changing the rules for inclusion in the NASDAQ to force portfolios to buy it.

[00:08:17]Uh we also got some inflation news in India this morning. Inflation uh in India hit 3.93%.

[00:08:25]That's up from 3.48%. A pretty sizable increase in one month, a half a percent.

[00:08:31]But only to 3.93. That's that might seem kind of low, but there's a reason for that. And the big increase despite that reason is actually has me pretty worried. Worried about core inflation.

[00:08:44]And uh if you're worried about core inflation, you should also see this article in Bloomberg this morning talking about more inflation on the horizon. One word, plastics. I just I love I love using that line and it's rare I get an opportunity. But yeah, plastics.

[00:09:00]Also going on this morning, India's big national airline, Air India. They are downsizing due to higher jet fuels, uh, expenses related to a fatal crash that happened last year. Pakistani airspace being closed after the war with Pakistan last year, and the rupee crisis, which is largely being driven by what's happening with oil. That may actually translate to a slowdown in orders for Boeing and Airbus jets that could actually hit US GDP.

[00:09:27]You've got Sleep Number, the uh we we'll say luxury mattress maker has filed for bankruptcy sale to Sleep Country Canada after a big decline in mattress sales last year. And uh that is a story about the housing market, guys, because people aren't moving. They're not buying houses. They don't need new mattresses.

[00:09:46]They're not getting extra bedrooms. And so 16% decline in sales for sleep number last year. And now the country is kaput.

[00:09:53]They are bankrupt.

[00:09:56]And last but not least, we've got to talk about something we haven't talked about in a while. Student loans. Now, that's interesting. Student loans were all the rage last year when student loan payments came back, right? All the CO era forbearance programs went away and people had to start paying their student loans again and we saw delinquencies rose shot right back up because those CO error programs went away. What did they got this article on CNBC this morning that says 7 million people remain on the now defunct Biden era SAFE plan that allows them to not make payments on their student loans. 7 million people.

[00:10:34]That's 1 in six student loan borrowers are still not making payments even though delinquencies have already risen to pre-COVID levels. And I have to ask myself why why is this happening? Well, apparently the Trump administration fought in court to strike down get rid of the SAFE plan and when they won in court, they left it there. They're still leaving people on the rolls of this program even though they fought in court to get rid of it. What the hell? Well, that just tells me that was a silly political posturing move and that they were actually afraid of those delinquencies rising and maybe the effect it would have on consumption in the economy. And so despite facing the cameras and talking about what a terrible program this is, they left it in place anyway after they won in court.

[00:11:20]And now 7 million people are still not making their payments. And supposedly they have a couple of months to make other arrangements now. Can't make this stuff up. Guys, we got a lot to talk about this morning. Why don't we shrink my big melon of a head and let's see what's going on in the world of finance.

[00:11:35]And don't forget that like button and that subscribe button so you can come back on Monday and have your coffee with the melon heads cuz we do this every business day. And right now the S&P 500 is pretty much unchanged this morning. 7 points higher.1% in the green. The Dow is higher by 183 points, up about a third of a percent though off its highs from the morning.

[00:11:59]And the NASDAQ is higher by 89 points or.3% higher. Um, again, pretty good morning for stocks here. Up a little bit, but not making any big moves.

[00:12:10]Looking over at the DXY, the dollar's a little bit stronger here at 99.77, higher by seven basis points. The bond market is also a little quiet this morning. We got the 30-year yield is higher by two points in change at 4.976.

[00:12:24]The 10-year yield at 4.483 is also higher by two points in change. The 2-year yield is up by one point in change at 4.083%.

[00:12:33]And the one month is at 3.666.

[00:12:37]Unlucky number there. Higher by a fraction of one point.

[00:12:44]Looking over at Bitcoin this morning.

[00:12:46]Bitcoin had a pretty good day yesterday.

[00:12:48]$63,378 is priced on Coinbase. A couple of bucks off yesterday's highs here. But all things considered, Bitcoin did pretty well. Uh except for this this story here. We've gotten crypto potato about Michael Sailor here and uh I I encourage you guys to check out this video. It's going around on X right now. Michael Sailor says, "I never said the company wouldn't sell." Micros Michael Sailor fires back after Bitcoin dropped. Sailor defended strategy's controversial Bitcoin sale at Bitcoin Prague as backlash intensified across the crypto industry this week. Bitcoin has fallen nearly 15% since Saturday, since Strategy disclosed on June 1st. That had sold a laughably low 32 Bitcoin between May 26th and May 31st for about $2.5 million. Remember, they sold that to pay for the dividends on Stretch Sailor's silly infinite money glitch that's rapidly becoming a doom loop. Micro Strategy stock on the other hand had lost 24% of its value during the same period. But the company chairman Michael Sailor has now defended the sale and pushed back against criticism.

[00:14:00]Speaking at the Bitcoin Prague conference, Sailor said he only advised individuals not to sell their Bitcoin and never claimed the company itself would avoid doing so. In other words, do as I say, not as I do. He added that Strategy has consistently disclosed over the past 5 years that it could sell Bitcoin if necessary.

[00:14:18]By the way, I said to you, never sell your Bitcoin. I never said the company wouldn't sell Bitcoin. And anybody who's listening to our earnings call or reading our disclosure or has half a brain knows for the last 5 years, we've been very clear that of course we sell the Bitcoin if we have to.

[00:14:37]Yes, but anybody with half a brain did know that, Michael. But we're talking about Micro Strategy shareholders, not people with half brains.

[00:14:46]Strategy Bitcoin sale was its first in years. The units were sold at an average of $77,135 each, slightly above the firm's acquisition cost of $75,699 per Bitcoin. Although Sailor had previously hinted at the possibility of a sale in early May, the move still rattled parts of the crypto market.

[00:15:05]Strategy's previous Bitcoin sale took place in December of 2022 during a severe bare market that followed aggressive interest rate hikes, the collapse of FTX, and broader contagion across the crypto lenders and hedge funds. Contagion, which I expect will return over the summer, guys. I think it's going to be a rough summer for crypto as a whole and by extension Bitcoin. It's all part of the having cycle. It's not surprising to me. What is surprising to me is that people believe anything this guy says. Again, Michael Sailor is a degenerate gambler who is taking unnecessary risk with other people's money where he stands to make all the gains. And well, if if if they lose, well, it's not his money. He doesn't care.

[00:15:47]Looking over at the commodities board this morning, we've got spot gold at $4,190.

[00:15:52]That's off by about 20 bucks or 49%.

[00:15:55]Gold did stage a rally yesterday on that oil jaw boning, which is why we're a little higher than we were a day ago here. spot. Silver is at 6650, lower by 80 91 cents here, 1.35% in the red, but I still like the shiny. Copper is higher by 1.38%. Platinum is higher by 2%.

[00:16:15]Palladium is higher by almost 2 and a.5% and WTI crude lower again even after yesterday's fall. It's down by $2.52, 2.87% lower at $8522.

[00:16:29]Looking over at some uh daily candles on the WTI crude oil chart here. You can see big move down yesterday on what? On more silly jawbon. And uh look, it's it's worked and that's why they keep doing it because it's working. US and Iran edge toward interim deal signing close to G7 next week. Again, how many times have we seen this headline? How many times? And yet it keeps 38 actually. This is the 38th time. Uh but it keeps working. The US and Iran may sign an agreement to reopen the Straight of Hormuz on the sidelines of the G7 summit next week, according to senior officials. A senior Iranian official indicated overnight that a deal is likely, said a G7 official and a diplomat from outside the group. All right. Who both asked to be not to be named discussing sensitive matters. So a guy said that a guy said and neither of those guys will use their names and oil dumps $8 on this. All right, it's the 2020. Stranger things have happened.

[00:17:29]This year's G7 summit takes place in Evian in the French Alps from June 15th to June 17th. Geneva in Switzerland is nearby and being floated as a potential location for the signing as soon as Sunday. According to people familiar with the plans, President Trump indicated that his vice president JD Vance and Steve Woodco, a special envoy, would represent him at any signing. The terms of the so-called memorandum of understanding still need to be approved by Iran's Supreme Leader Mashtaba Kenya.

[00:17:56]According to a European official familiar with the matter, he's been in hiding since the conflict erupted with US and Israeli strikes on Iran and the main mediators Qatar and Pakistan have found communicating with him can take days. An Iranian foreign ministry spokesman on Friday said, "We have not yet reached a conclusion on any deal with the US." Still, he signaled that there had been progress in recent days.

[00:18:18]The Islam Islamic Republic news agency reports separately citing a foreign ministry spokesman as saying that a draft is nearly finalized and awaiting a final decision from Iran's decision-making bodies. And again, the the version that's being floated in Iranian state media right now is uh basically a a wish list of everything the Iranians have been demanding this whole time, completely unchanged, completely unrealistic, which tells me we're not really anywhere near a deal, that this is just more jaw bony.

[00:18:49]Meanwhile, the biggest IPO in history, here it comes. SpaceX prepares for debut after $75 billion IPO breaks record.

[00:18:58]SpaceX made history with a $75 billion IPO that instantly turned it into one of the biggest public public companies in the world. Now it has to win over the market. Friday's trading will be a critical test for the $ 1.8 trillion rocket satellite and AI company and Elon Musk, its founder. Even after raising the largest ever amount in IPO, SpaceX still needs the market's validation of its ambition to dominate AI and carry humans to the moon and Mars, as well as the company's controversial governance regime that promises Musk near total control. Scaling is very expensive.

[00:19:32]SpaceX President Gwen Shotwell told CNBC, "The things that we're doing cost a lot to do, even as public company SpaceX will focus on long-term horizons and less on quarterly performance."

[00:19:43]Shotwell said. Indications where SpaceX shares could open could open are expected to start flowing at some point after the market opens at 9:30. In New York, shadow markets are pricing a blockbuster debut, indicating a pop of at least 35% from the 135 offering price. The IPO was more than four times overs subscribed on Thursday. Bloomberg reported the company's unusual move to set a fixed price and size left bankers unable to capture surging interest, leaving a vast group of wouldbe buyers jockeying for whatever they can get and potentially setting up a roaring first day for the stock. Still, the unprecedented size of SpaceX's debut makes the market mechanics more complicated. And the fear of unexpected glitches like the ones that derailed Facebook's IPO in 2012 is guaranteed to keep executives on edge. The first trading day will not only set the tone for future sessions, it will affect the prospects for a pair of potential giant IPOs from SpaceX rivals Anthropic and Open AI.

[00:20:43]And uh I saw a pretty funny post here on X this morning. This was uh from my friends at Macroedge sent me this one.

[00:20:50]This post is from Mallister Higgins who says, "I'm at the bottom of a multi-layer SPV and I'm looking forward to the SpaceX IPO in much the same way a golden retriever looks forward to a car ride. Thrilled to be involved. No clue how the car works. Unsure if we're going to the park or if I'm getting neutered."

[00:21:09]And well, that pretty much captures the the spirit of the SpaceX IPO. I'm sitting this one out, guys. In my opinion, SpaceX is an AI company that does cool rockets on the side. Not willing to put my money into something like that. That being said, all the rule changes combined with the idiocy of the current speculative nature of this market tells me it's probably going to be a pretty good first day for SpaceX.

[00:21:32]But who knows? Markets are unpredictable.

[00:21:37]All right, let's talk about this one here. Korea's pension fund pivot amplified stock swings. Barkley says again, "They keep changing the freaking rules in order to keep this AI bubble inflated. Why were these rules put there in the first place?" Oh, that's right.

[00:21:52]To protect investors.

[00:21:54]A move by the National Pension Service to temporarily suspend portfolio rebalancing has fueled volatility in South Korea's stock market and added pressure to the Juan. According to Barclays, while the rebalancing waiver contributed to superior returns for the NPS and the Cosby, we believe the key trade-off was really the increased volatility, said Boom Kissan, an economist at Barclays, who wrote in a note. Pensions are typically considered a stabilizer in the financial markets.

[00:22:22]However, we believe the NPS tweak of its operations became an amplifier instead.

[00:22:28]The NP NPS or National Pension System, Korea's biggest pension fund and also the largest holder of stocks in January temporarily waved rules requiring it to realign its portfolio when asset allocations drifted beyond preset limits. Continued adjustments amid heightened volatility, especially when domestic equities exceed their target range, could have an outsized impact on local stock and foreign exchange markets, the MPS management committee warned at that time. While optimism over AI in the ensuing demand for memory chips have spurred an unprecedented gains in Korea's stock market, a buildup of margin debt and developments in the Iran war have triggered bouts of intense volatility. Investors paid the highest ever premiums to hedge against market swings after the Cosby soared 24% in January. A record monthly advance that was eclipsed by 31% rally in April.

[00:23:20]Guys, just a reminder, if you never sell, you never make any money. At some point, you got to sell. You got to realize gains and these rules are in place so that pensioners are forced to realize gains when markets become irrational like this. And they threw away those rules in order to inflate this bubble, taking away regular selling pressure that committed to this cockami crazy volatility that we've seen in South Korea. As the Cosby extended its 2026 rally as the world's hottest benchmark, the NPS last month sharply ramped up its allocation target for local stocks while cutting back its target for foreign equities. The pension fund posted a return of 21.7% on domestic equities during the first quarter, official data shows, which oversaw over $1 trillion in total assets. But again, they never sold, they never rebalanced, so they never realized any of those gains. We ran a counterfactual analysis on what if the NPS had continued normal rebalancing and estimate that the return would have been smaller at 11.1% by the end of May. Son wrote, "Despite superior returns, the portfolio's volatility was much higher without the rebalancing," he noted, adding that the waiver also increased the Cosby's market volatility as the NPS did not sell during the overheating nor buy during the dips in March or even in June monthto date.

[00:24:40]Sun also wrote that while the MPS pointed to FX market pressures as one of the reasons when it waved rebalancing, the decision instead turned out to place significant pressure on the FX market.

[00:24:50]It actually caused the wand to decline here. We believe the NPS rebalancing waiver arguably transferred its rebalancing needs to foreign investors which translated into outsized US dollar demand driven by out equity outflows from the Korean FX market. In other words, foreign hedge funds made those gains instead of Korean pensioners. And now all that money is leaving the country, causing their currency to decline. Global hedge funds have sold a net 78.7 billion from the local stock market this year. In Korea, analysts have attributed the bulk of those outflows to forced selling after sharp gains in market leaders like Samsung and SKH Heinix pushed holdings above mandated portfolio limits. And when those funds take those gains, they convert those JAN into dollars and that drives the WAN lower. So look, those rules are there for a reason, to protect pension funds, to protect the investments of pensioners, and they set them aside because my AI stocks, and now foreigners are getting those gains instead, and it's causing a currency crisis in Korea. Well, isn't that just great?

[00:25:55]Meanwhile, get ready for more inflation, folks. Higher costs for plastics used everywhere are becoming the next inflation headache.

[00:26:03]US plastic suppliers say they're running out of room to absorb higher cost of raw materials, raising the prospect of price increases for consumer goods, ranging from groceries to cars later this year.

[00:26:14]And we've been talking about this for a couple of days now that the PPI has been significantly higher than CPI, indicating profit margins are getting squeezed, that consumer prices will rise further from here in order to reset that. And they're talking about just this with plastic suppliers today. A gauge of wholesale prices of plastic, resins, and materials jumped by 14% to an almost four-year high last month as the Iran war choked off supplies of key components. For producers like Shawn Gross, whose Cory, Pennsylvania based company supplied molded parts used in automotive and heating systems, the squeeze is reaching a breaking point.

[00:26:50]We're going to need to pursue the price increases with our customers more aggressively, said Gross, CEO of Viking Plastics. What the world needs to understand is there's going to be real impact that is not even yet felt.

[00:27:02]Plastics are everywhere from snack packaging to refrigerator parts and about 98% of it is made from fossil fuels. One reason why US consumers haven't felt the full impact of the wardriven price increases is prochemicals like polyethylene that are used in everyday products is because cost moves slowly through that supply chain. Which means that increased cost is currently working its way through the supply chain and it is heading towards you eventually. Gross whose suppliers include DAO and clients include Ford is at the center of it all. Prices for some polyethylene inputs by Viking have risen more than 40% this year. He said again guys that's why I think we're seeing core inflation is rising faster or is rising here. I think that's why PPI is rising faster than CPI. And that's why I think headline CPI is probably going to head higher here. When when energy prices go higher, eventually it filters through into everything.

[00:28:02]Even in India, you can see it in India.

[00:28:04]Indian inflation stays below target backing RBI rate hold. Okay, they're saying it's below their target, but their target is 4% which is twice what ours is. India's inflation came in slightly lower than expected in May despite high fuel costs supporting the central bank's recent decision to keep interest rates unchanged. The consumer price index rose to 3.93% in May from a year earlier below economist expectations of 4.02 and under the Reserve Bank of India's 4% target. All right, just barely under that 4% target. That's according to official data released on Friday.

[00:28:41]Inflation was 3.48% 48% in April. All right, so this seems like a rosy headline here. Oh, below target, lower than expected. Why do I think this is a big deal? Well, remember we've been talking a lot about how all the hoops that India is jumping through to offset the higher energy prices. India has de facto price controls on gasoline and LPG and and and energy in their country.

[00:29:03]They don't have outright price controls, but 90% of the market is dominated by state-run oil companies that sell their products at a loss in order to stimulate consumption, all while basically nationalizing those losses. IN OTHER WORDS, THEY HAVE price controls. And so, even though the government is eating the higher cost of energy, you're still seeing their inflation rise by half a percent in just one month to 3.93.

[00:29:29]And again that tells me that higher inflation will filter through to everything else. India is no exception here. Again I mean Bloomberg is making this sound oh great below target. Okay lower than expected. Yeah your inflation jumped by a half a percent because of energy prices when you have price controls on energy. That's not a good thing.

[00:29:49]And you can see it translating into problems for Air India who now plans to downsize with their owner Tata bing at losses.

[00:29:58]Air India is looking to defer aircraft deliveries, cut flights and postpone expansion planes plans after majority owner Tata Group instructed the carrier to focus on reducing its record losses.

[00:30:09]According to people familiar with the matter, the change in strategy is an abrupt pivot from an ambitious growth plan. It reflects the loss of confidence in an airline that suffered a fatal crash a year ago and has since incurred an annual loss equivalent to about $3 billion. The downsizing will invol involve a variety of efforts to reduce costs. Air India is in discussions with Airbus and Boeing to slow down deliveries of as many as 500 planes previously ordered said the people who asked not to be identified because the talks are private. Doing so would able would enable Air India to push back the large payments due to the plane makers upon delivery. The carrier is also re-evaluating plans to fly to new domestic and international destinations, pruning some routes and postponing launches at some airports. Air India's cout ambitions follow a series of challenges that have pushed deep into the red. The deadly crash last June, Pakistan closing its airspace to Indian carriers and the war in Iran have disrupted flights, forced costly rerouting and driven up fuel expenses.

[00:31:09]And the weak Indian rupee has also added to its financial wos since much of the airlines costs are in dollars. So not good. This could potentially hit Boeing here. Boeing isn't really reacting to this one today, but again inflation causing problems in India even though it came in below target.

[00:31:27]Meanwhile, we've got Sleep Number files for bankruptcy sale to Sleep Country Canada. The mattress maker is going to mattresses. Mattress maker Sleep Number Corp. has agreed to merge with Sleep Country Canada through a court supervised process after years of weak demand and mounting financial pressure.

[00:31:44]The company filed for a voluntary chapter 11 sale process to facilitate the transaction and said in a statement on Friday listed assets between 500 million and a billion dollars and liabilities of between$1 and 10 billion according to court documents. Sleep Number expects to secure up to $260 million of debtor in possession financing as part of the deal including up to 65 million in new financing. The cash is expected to support the business during the court supervised process, including paying wages and suppliers, it added. Sleep Number is known for its customizable beds and has been crushed by declining store traffic, tariffs, and broader industry pressures. It said it would continue to review its footprint with the aim of retaining as many retail locations as possible. The company slashed its adjusted operating expenses by $136 million last year. That was not enough to compensate for a 16% drop in sales. Uh guys, this is the housing market is what's doing this. People aren't buying mattresses because they're not moving. They're not moving because the housing market is frozen in place and now you got sleep number going bankrupt. Sooner or later, something's going to give in the housing market. And my guess is it's going to be prices that give, not interest rates.

[00:32:55]Meanwhile, this story is really amazes me. Uh nearly 7 million student loan borrowers remain in defunct Biden era payment plan according to a Trump official. 7 million. All right. There's 42 million student loan borrowers in the United States. So 1 in6 is still in this forbearance program that the Trump administration fought to get rid of in court.

[00:33:18]Nearly 7 million federal student loan borrowers remain enrolled in a defunct Biden admin era repayment plan. Nichols Kent, a top official at the US Department of Education, told CNBC on Thursday, "By staying in the saving on a valuable education or save plan, these borrowers debts are growing and they're not making progress towards student loan forgiveness," said Kent, the under secretary of education at the agency.

[00:33:40]"It's a problem for borrowers. They're not recognizing the benefit of making their payments." "In recent weeks, just around 300,000 student loan borrowers have left SAFE. The millions of borrowers who've lingered in the plan are at risk of getting build unaffordable payments once the plan disappears or eventually falling into default. Over 42 million Americans hold student loans and the outstanding debt exceeds 1.6 trillion according to congressional research. The Biden administration introduced SAVE in 2023, billing it as the most affordable repayment plan ever created. Under the program, many borrowers expected their monthly bills to be cut in half, but Republican le legal challenges quickly put the plan on ice. Starting in July 2024, millions of student loan borrowers were placed in forbearance while the legal challenges played out, meaning they didn't owe monthly payments. A federal appeals court order finally ordered the end of the safe plan earlier this year. But the Trump administration has allowed borrowers to remain in the payment pause until recently. officials said in late March that save enrollies will get roughly 90 days from July 1st to exit and select a new repayment option. And that just blows my mind.

[00:34:50]They fought this thing in court and they won. And then after they won, they left six, seven million people in this program.

[00:35:00]I don't understand why you would do that unless it was just silly political theater and they never intended to force these people to make their payments which means they've been artificially increasing consumption because if I don't have to make payments on my safe plan or my student loans I might as well eat out more. I might as well buy a car.

[00:35:18]I might as well do other things. You know, hey, life is better when you don't have to pay your debts back. But you have to pay your debts back. That's why they're called debt and not gift. and they fought this in court and then left 7 million people on the rolls. Now look, this chart is showing delinquencies, 90 days delinquent by loan type. This is data collected by the New York Fed. Look at the red line. That's student loan delinquencies. All right, it went off a cliff when the safe plan went into place. And when all these people went into forbearance, they went down to almost nothing. And then they shot right back up to almost precoid levels here at about 11% 90 days delinquent. Keep in mind, 90 days, they're making a payment in three months. You're not talking about someone who's a few days late.

[00:36:02]These are people who are just outright defaulted. Meanwhile, 16% of people are still not making plans and aren't even included in this, which means this line should be closer to 27% right now. And the chart only goes up to 15 at the top, which means this thing would be going up through the top of your monitor up to the ceiling in the room or maybe the roof of your car if you're watching this on your phone, which you shouldn't be doing while driving. But I digress.

[00:36:29]Yeah, they they're still artificially keeping student loan delinquencies suppressed. And all while this is going on, student loan delinquencies are back to precoid levels. Meanwhile, credit card delinquencies are almost up to post GFC highs and auto delinquencies are already higher than post GFC highs. The only things that haven't really skyrocketed here are home equity and mortgage, which they are rising as my friend Melody Wright often points out, but they're not skyrocketing yet, but everything else is. And we're we're still artificially suppressing these levels. Guys, there's price discovery coming. It's not going to look good when it gets here, but really amazing that you would fight this thing in court and win and then leave millions of people on the rolls anyway.

[00:37:17]Well, I just want to say thank you everybody for having your coffee with the millon heads this morning. Don't forget that like button and that subscribe button. Have fun watching the SpaceX IPO today. I really don't know what's going to happen, but it's going to be interesting. May not be fun, but it certainly won't be dope. Thank you very much to my magnanimous melon heads on YouTube, Patreon, and buy me a coffee for supporting the channel. Links are down below should you feel so inclined.

[00:37:39]Hi mom. Hi dad. Love you guys. Till next time, live small and dream big.