Fed Cuts Rates Markets Soar, Middle Class Squeezed & Side Hustles Surge
The Fed finally pulled the trigger on its first rate cut of the year, but before you pop champagne, let’s ask the real question: who actually benefits? Wall Street’s partying like it’s 1999, the top 10% are still swiping cards like money grows on trees, and Jerome Powell is out here trying to convince everyone the house isn’t on fire. Meanwhile, middle-class families are staring down credit card bills, mortgages, and a job market that feels more like musical chairs with fewer chairs every month.
➡️ We’re breaking down the “two-tier economy” McDonald’s CEO warned about, why mortgage refis just spiked harder than a college frat party, and how side hustles have gone from optional to survival gear for millions of Americans. This isn’t CNBC soundbites or sugar-coated headlines — it’s The Higher Standard, where we strip the spin, call out the nonsense, and give you the real story behind the Fed’s move.
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🔗 Resources:
Federal Reserve cuts interest rates for the first time this year (NBC News)
The top 10% of income earners in the US now account for nearly half of all consumer spending, a record high (Charlie Bilello via X)
Mortgage refinance demand spikes nearly 60%, as interest rates drop sharply (CNBC)
Recession risk remains uncomfortably high (Mark Zandi via X)
38% of Americans have taken on jobs to cover debts — how the rise of the reluctant hustler is rewiring careers (Money Wise)
⚠️ Disclaimer: Please note that the content shared on this show is solely for entertainment purposes and should not be considered legal or investment advice or attributed to any company. The views and opinions expressed are personal and not reflective of any entity. We do not guarantee the accuracy or completeness of the information provided, and listeners are urged to seek professional advice before making any legal or financial decisions. By listening to The Higher Standard podcast you agree to these terms, and the show, its hosts and employees are not liable for any consequences arising from your use of the content.
Transcript
Normal Wednesday, let.
Speaker A:Just another day, just another manic Monday.
Speaker B:We had a fed ray cut today a little bit.
Speaker A:I would like to point out before we do anything on the show tonight that it hurts me that we're always right somehow.
Speaker A:It's just.
Speaker A:I don't want to be correct all the time.
Speaker B:Not all the time.
Speaker A:They say that humans are fallible, just not this one.
Speaker B:Not over here.
Speaker A:Yeah, yeah.
Speaker A:These humans, right?
Speaker B:Yeah.
Speaker B:When I'm at home and I'm having disagreements with the wife, sometimes I'm wrong.
Speaker B:Sometimes I get it wrong.
Speaker A:Are you really, though?
Speaker B:No.
Speaker B:Welcome back to the number one financial literacy podcast in the world.
Speaker B:This is the higher standard.
Speaker B:Sitting in front of me is somebody that went live today.
Speaker A:Yeah.
Speaker B:Did the YouTube live today.
Speaker B:Christopher Nahibi, my partner in crime.
Speaker A:Thank you very much.
Speaker A:When you leave out the keynote stuff, it just hurts my feelings.
Speaker B:Sorry.
Speaker A:Sitting across from me, my partner in time, the one and only, the man, the myth, the legend side Omar, everybody.
Speaker B:Thank you.
Speaker B:My man.
Speaker B:And sitting behind the ones and twos, the fighting Fijian Regil.
Speaker A:There he is.
Speaker B:Like, you saw that.
Speaker A:I know you that can.
Speaker B:You saw all.
Speaker B:They go all over the keyboard splatter.
Speaker A:Yeah, yeah, I'm okay.
Speaker A:There's fluids all over the desk.
Speaker B:Impersonated Stone Cold right there.
Speaker A:Okay.
Speaker A:I. I was doing live from that desk earlier, and there was just fluid flying everywhere.
Speaker B:So there was a.
Speaker B:A key interview from back in the day that I remember, and I just noticed this now.
Speaker B:I'm not trying to do this live on camera.
Speaker A:It seems like you were doing.
Speaker B:No, no, I just noticed it right now.
Speaker B:You're sitting in front of me.
Speaker B:Kobe.
Speaker B:Kobe Bryant said, there's two types of friends in this world.
Speaker B:There's the friends that sit across from you at the dinner table that don't tell you when you got something in your teeth, and then there's the friends that tell you you got something in your teeth.
Speaker A:Do I really haven't eaten.
Speaker B:You got some of your teeth.
Speaker A:Yeah.
Speaker A:What is it?
Speaker B:Yeah.
Speaker B:I don't know what it is.
Speaker B:You tell me.
Speaker B:What did you have for lunch today?
Speaker A:Probably karma.
Speaker A:Yeah.
Speaker A:Oh, this guy right here.
Speaker B:This guy right there.
Speaker B:Yeah.
Speaker A:Look at that.
Speaker A:There we go.
Speaker B:I'm not like you, see, you would have sat through the whole show and then told me in the final minute, like, hey, by the way, you have to.
Speaker B:You.
Speaker A:You passed the test.
Speaker A:Congratulations.
Speaker A:I didn't really even.
Speaker A:You know, I just had a protein donut.
Speaker B:Protein donut.
Speaker A:They're just about as unsavory as they sound.
Speaker B:Yeah.
Speaker A:Yeah.
Speaker A:So first livestream today ever.
Speaker A:We want to do that for a.
Speaker B:Long time, you and I. I did.
Speaker B:I wanted to be a part of it, but it happened midday during normal business hours.
Speaker B:Couldn't make it happen.
Speaker A:So for future versions, I have.
Speaker A:I have the graphics, everything set up already so you, myself and Regil could all participate and then.
Speaker A:But Regil, it does require you to actively switch whenever we do it.
Speaker B:He hasn't done that before.
Speaker A:Yeah, he hasn't done that before.
Speaker A:We'll have to, you know, break.
Speaker A:Break in the switch fingers.
Speaker B:Yeah, it's all good.
Speaker B:Yeah, he's got the spirit.
Speaker B:Fingers already.
Speaker A:Yeah, yeah, There you go.
Speaker A:Give it to us.
Speaker B:Let my fingers do the walking.
Speaker A:Yeah, let it.
Speaker A:Other parts do the talking.
Speaker A:You know what I mean?
Speaker A:Yeah.
Speaker A:So once we get that figured out, it'll be interesting to see that in real time.
Speaker A:What I thought would be cool is because we have a TV in here, is we could watch on this screen in real time or we could watch on a different screen and then we'll have Virgil switch back and forth because we have commentary.
Speaker A:So I think it'd be much more engaging that way.
Speaker B:So in that live meeting you discussed today, the Fed decided to cut rates by 25 basis points.
Speaker A:Right.
Speaker B:So they lowered the fed funds rate.
Speaker B:So today we're going to talk about what happened at the FOMC meeting.
Speaker B:We're going to talk about what Jerome Powell said at the postgame press conference.
Speaker B:We'll get into the summary of economic projections and where they see things going.
Speaker A:Yeah.
Speaker B:And we're going to see how we can use all of this information so that everybody can make more informed decisions.
Speaker A:Yeah.
Speaker A:I don't know that there's enough data right now to really make an informed decision per se.
Speaker A:As much as I don't know, man, I feel like there's wide open decision.
Speaker B:I feel like there's a lot of changes in the rhetoric.
Speaker A:A lot.
Speaker A:Yeah.
Speaker A:And I caught some today.
Speaker A:And actually I think the guy from Bloomberg who commented just after I did called it out as well.
Speaker A:He did it.
Speaker A:He was perfect in.
Speaker A:In his delivery.
Speaker B:You got to get you the credentials, bro, to sit there.
Speaker A:Oh, you don't want me.
Speaker B:They don't want you in that room.
Speaker A:Hey, that's Jerome.
Speaker A:And you know that's bs, bro.
Speaker A:Yeah.
Speaker A:Let's see the red tie collection.
Speaker A:So I want to start off with an article today, Rejeel.
Speaker A:It's the first one from the show Notes.
Speaker A:I think it's important to start off with this particular article because it's going to set the stage.
Speaker A:If you did not watch the, the FOMC meeting, this is a great kind of primer for it.
Speaker A:The Federal Reserve cuts interest rates for the first time this year.
Speaker A:NBC News.
Speaker A:There's a couple graphics we'll go to later on, but I want to just give you kind of the narrative summary to start, set the stage because there's a couple parts of what I'm about to say that we're going to talk about as kind of resounding themes from this conference.
Speaker A:Okay.
Speaker A:So McDonald's CEO Chris can't say his last name.
Speaker A:Called it a two tier economy in, in an, in a CNBC interview this month.
Speaker A:While upper income households continue to spend freely, middle and lower income consumers, they're feeling under a lot of pressure right now.
Speaker A:And that is going to be thematic.
Speaker A:Of all the things we're seeing is we are seeing visible and vital signs of the middle class being squeezed out.
Speaker A:So if you are making a lot of money and you're going to your spouse or your family, you're going like, well, shit, man, I don't, I don't, I don't feel like I'm making that much money.
Speaker A:You're not alone.
Speaker A:We all kind of feel that way.
Speaker A:Right.
Speaker A:Several prominent economists aren't convinced a Fed cut is warranted at this point.
Speaker A:Joseph Garrett Gagnon, a senior fellow at the Peterson Institute for International Economics, noted last month that inflation was still lingering above the Fed's 2% target.
Speaker A:True.
Speaker A:Even before Trump's tariffs.
Speaker A:Also true.
Speaker A:Quote from him.
Speaker A:Price pressures are likely to pick up in coming months as businesses are forced to pass on higher tariff costs to protect their profit margins.
Speaker A:He said stock markets are thriving too.
Speaker A:I talked about that on the live stream and I think this is an important part to pause.
Speaker A:We have talked a lot about tariffs, but tariffs rolled out a couple of months ago.
Speaker A:A few months ago, maybe it was a 3.4ish.
Speaker B:Yeah, 4.
Speaker B:I'd say.
Speaker A:Okay.
Speaker A:The way public and even non public large companies that have boards and quarterly reporting, quarterly financials report up.
Speaker A:So you have January, February, March, that's Q1.
Speaker A:Then in April they review Q1's numbers and they usually have a board meeting review in Q1 and they report to the public on their earnings call if they're public and if they're not public, they go about their life.
Speaker A:Right?
Speaker A:Right.
Speaker A:And you have April, May, June, you do that again in July.
Speaker A:Right?
Speaker A:Right.
Speaker A:Then you have July, August, September, you do that again in October.
Speaker A:Right?
Speaker A:Right.
Speaker A:And then you have November, December and you do that again in January for the following year.
Speaker A:It's usually a wrap up of the whole year.
Speaker A:Right?
Speaker A:Of the whole year.
Speaker A:So really important to understand that it's the trailing month after the, the traditional fiscal quarter ends.
Speaker A:Because if we roll this, the, the tariffs out three months ago, that doesn't mean that these companies have looked at their financials and said are we more profitable or less profitable Yet a lot of them are saying, okay, we're going to see costs creep up.
Speaker A:They don't automatically pass on increased costs to you, the consumer.
Speaker A:It takes time to cycle through the system.
Speaker A:The small cap or the small business companies or the small cap stocks, they're more reactive because they got to protect their profit margins right away, but they have less corporate red tape in the way.
Speaker A:Okay, so for us to think that the tariff costs, which are still in place, these tariffs have been fully passed on to you, myself or Jill, everybody else in the world, and that inflation from those have already been absorbed by the economy, that's foolish.
Speaker B:That is foolish.
Speaker B:I agree.
Speaker B:And you got to also keep in mind that for some of these companies, they were made aware of the tariffs that were coming.
Speaker B:So they made sure that they stocked up on inventory ahead of time so that when they did have to take on more inventory, there wouldn't be this huge sticker shock to their consumers.
Speaker B:Right.
Speaker A:So there's a couple things at play there.
Speaker A:If they want strategically plan in advance.
Speaker A:Apple did that great example is they bought a ton of inventory, shipped it over on planes via air freight before the tariffs went into effect.
Speaker A:Their board is going to sit down and look at those financials for the quarter end in October and they're going to say, okay, how much have tariffs impact our bottom line?
Speaker A:I use a classic bank example come a former banker by trade.
Speaker A:Banks are getting a certain amount of interest on loans, they're paying a certain amount of interest on deposits.
Speaker A:They're going to the exact same thing.
Speaker A:Their products are loans and deposits.
Speaker A:They're going to say, okay, what's our profits?
Speaker A:What's our net interest margin?
Speaker A:What's the spread on these products for us?
Speaker A:Right.
Speaker A:How much can we lower deposit pricing and increase loan pricing to increase or widen our profitability?
Speaker A:If you're selling iPhones same thing.
Speaker A:How much does iPhone cost to make?
Speaker A:How much did tariffs impact that equation?
Speaker A:How much that are we willing to absorb and how much that would we have to pass on to the consumer so we keep our profits higher and.
Speaker B:How much can we get away with?
Speaker A:That's right, right.
Speaker B:Like we can't do it all at once.
Speaker B:Right?
Speaker A:Yeah.
Speaker A:And some people will say, okay, we'll do it in staggered, over time.
Speaker A:Some people will say, well, hey, we'll, we'll change pricing here and there.
Speaker A:Some people are going to ask can we supply in different countries?
Speaker A:But all of that conversation is generally not a unilateral CEO conversation.
Speaker A:Right?
Speaker A:Right.
Speaker A:Usually the board and the strategic vision and the profitability and the market reaction.
Speaker A:Because at a bank you have several different kind of masters, if you will.
Speaker A:You serve at the leisure of the regulators that you effectively run a charter from them.
Speaker A:But if you're publicly traded, you have to respond to the stock market, the secondary markets, capital markets.
Speaker A:There's all sorts of people who are invested in you.
Speaker A:Institutional investors are a great example of this.
Speaker A:Apple's no different.
Speaker A:Right.
Speaker A:You've got a lot of regulation from the government.
Speaker A:You're producing products that fall under a lot of different government's laws and restrictions and limitations.
Speaker A:Right.
Speaker A:Apple is one example.
Speaker A:You got Google, another example in the EU and some of the responsibilities they have there.
Speaker A:But they also have the capital markets, public markets.
Speaker A:They have large institutions which own large chunks of their stock.
Speaker A:They have to make sure that they're.
Speaker B:Make sure they're happy.
Speaker A:All this comes down to, all these people want to see, comes down to one common, just simple concept.
Speaker A:They want to see increased profits quarter after quarter, as reasonable, unreasonable as that may be.
Speaker B:Right, exactly.
Speaker B:That's true.
Speaker B:And they're like, to your point, it's not just the CEO involved, they're strategic with how they go about doing this.
Speaker B:I think we've all seen examples of this and I think Apple has benefited off this the most over the years.
Speaker B:When they have the multiple different models, right.
Speaker B:And you get a little bit more off of the next upgraded model and the next upgrade and they slowly increase the price more and you ultimately make up the mind like, okay, well it makes more sense for me to just spend an extra couple hundred bucks so I get this much more storage or this much bigger of a screen.
Speaker B:Right.
Speaker B:And that's how they get you.
Speaker A:I do it, I just buy the biggest one now.
Speaker A:I know, just give me, just give me the biggest.
Speaker B:Do you got the, the, they still do the one with the ultra like big screen because I, I get this, the medium sized one.
Speaker A:I get the, I have big ass hands.
Speaker A:But I, I have the Apple asterisk here.
Speaker A:I, if I were not a quote, content creator now.
Speaker A:Oh yeah.
Speaker A:It's just saying it's weird.
Speaker A:Tastes weird.
Speaker A:Yeah.
Speaker A:I probably would get a Normal sized iPhone because I don't like how large.
Speaker A:But I get an iPhone Pro Max.
Speaker A:Now I get Apple Pro Max.
Speaker A:Right, Right.
Speaker A:I get a new one every two years is.
Speaker A:My wife and I, we both get a new one every two years.
Speaker A:We get Apple watches when they come out with something new that we think is valuable.
Speaker A:It's been, I think we have the first series Apple Watch Ultra.
Speaker A:But mm.
Speaker A:That being said, all this to say, I think that the inflation and tariff conversation has been way underestimated and that further impacts are likely to come.
Speaker B:Well, what's interesting too, what came out in this meeting is the summary of economic projections.
Speaker A:Right.
Speaker B:That's the big one.
Speaker B:Right.
Speaker B:There's Fed meetings all throughout the year and every three meetings or so there's or every quarter, I should say, there's a summary of economic projections that comes out that's even more important than the actual meeting itself.
Speaker B:Yes, we all got excited over the, you know, 25 basis point cut.
Speaker B:But okay, we really want to know where do you guys see this thing going in the next year or by the end of this year and into next year.
Speaker B:Right.
Speaker B:So what came out with this one was, and it's really nice to compare it to the previous summary, particularly this sep, because they had projected that, okay, in June that by the end of the year PCE inflation would end at 3%.
Speaker A:Okay.
Speaker B:This time still projecting it to be 3%.
Speaker B:Mind you, currently we're sitting at 2.6%.
Speaker B:They're projecting it's going to go up because of the rate cuts that are to come.
Speaker A:Right.
Speaker B:Even with core inflation.
Speaker B:They projected at 3.1%.
Speaker B:They said we're going to keep it at 3.1% even though it's currently at 2.9%.
Speaker B:Unemployment, though they had, it's currently at 4.3%.
Speaker B:And the reason for the cut today was 25 basis points.
Speaker B:And they're projecting by the end of the year It'll be at 4.5%, which is a target, which is a chart.
Speaker B:They're saying.
Speaker B:But, but what they're also saying with that is we're expecting an even weaker labor force by the end of the year.
Speaker A:So he says something in the meeting that I want to get to a little bit later on.
Speaker A:But I thought there was some very contradictory statements that he made about jobs, about the labor force and how he responded.
Speaker A:And we'll get to that.
Speaker A:I want to finish this quote up in here and look at some charts because I think it'll help both conversations.
Speaker A:It's not unprecedented for the Fed to ease when stocks are at.
Speaker A:Are at or near all time highs.
Speaker A:JP Morgan Chase chief US Economist Michael Feroli said in early August.
Speaker A:It's rare when.
Speaker A:Rarer when stocks are at the highs and inflation is above target and inflecting higher.
Speaker A:The Fed meeting is also the first with Mirren.
Speaker A:He's the new FOMC member and Fed chair or not new Fed member, one of the 19.
Speaker A:Right.
Speaker A:Of the 19 members.
Speaker A:And he was a very vocal dissenting opinion today.
Speaker A:Clearly came in with aligned financial thoughts as to the President who recently named him a newly confirmed governor who joins the Fed under highly unusual circumstances because his predecessor resigned and retired midterm.
Speaker A:Which was strange.
Speaker A:Right.
Speaker A:Obviously, Lisa Cook is also under pressure at this particular juncture in time.
Speaker A:Members of the independent central banks historically haven't held other outside roles during the ten year Mirin is on unpaid leave from the Economic Advisors Council and could return to the White House when his Fed term concludes at the end of January.
Speaker A:The administration has sought to downplay the arrangement.
Speaker A:So here you have a group, the FOMC is supposed to be politically independent and you have an individual who serves as essentially an officer in the President's cabinet, if you will.
Speaker A:And maybe it's a little bit of a mischaracterization, but still true nonetheless, serving as a dual role with a Fed vote.
Speaker A:I mean that's, that's pretty wild.
Speaker B:Yeah.
Speaker A:And he's had a very strong dissenting opinion which is going to affect things like the SCP that you said today and that, that he was the one who made a.
Speaker A:So it was comical because we had Steve Liesman come out today from CNBC and he was commenting that, you know, before the actual press conference started about there was a dissenting opinion and somebody called for several more rate cuts.
Speaker A:And I think he's like, I think we all know who that is.
Speaker A:This is who he was referring to.
Speaker B:This is who's referring.
Speaker B:And it just so happens to be at the meeting where there's a SCP that's also going to be released with the dot plot that's also going to be released so he can like basically put his money where his mouth is and show the administration look what side.
Speaker B:Look, I'm playing ball, right?
Speaker A:So Rajeel, there's two charts I want to pull up.
Speaker A:This is the first.
Speaker A:Thank you so much.
Speaker A:U.S. fed funds rate.
Speaker A:This was leading into this rate cut where you saw the US Fed funds going down to zero and then effective or at, at or near zero, I should say 0.
Speaker A:To 0.25.
Speaker A: oday, that that increase from: Speaker A:It's been held and now you're in the rate cutting cycle.
Speaker A:And this rate cutting cycle that we're in has been held flat for a prolonged period of time.
Speaker A:But this is a significant one if we're dealing.
Speaker A:Go to the next slide here.
Speaker A:This is the Federal Reserve interest rate decisions.
Speaker A:September you saw 50 basis points down.
Speaker A:November, you saw 25 basis points down.
Speaker A:December, you saw 25 basis points down.
Speaker A:And pausing.
Speaker A:January, March, May, June, July.
Speaker A:Now September, after all those months of pausing, you got another 25 basis points down.
Speaker A:That has been a pretty heavy wait and see in my mind.
Speaker B:Wait exactly.
Speaker B:And up until this meeting, right before today's meeting, there was a 65 chance that there were going to be two rate cuts by the end of the year.
Speaker B:Okay.
Speaker B:Before this meeting, after this meeting and after the rate cut already, there is an 80 over an 80% chance that we're still going to see two more rate cuts by the end of the year.
Speaker B:Essentially alluding to there will be a cut in October and another one in December.
Speaker A:So here, here's what I think instantly think about is let's remove the politics in any rogue outside variables, right?
Speaker A:Because there's always things that could happen that could change everything.
Speaker A:You're not going to have enough data come in between now and October because the Fed meetings happen about every 45 days.
Speaker A:There you go.
Speaker A:You're not going to have enough meaningful data come in between now and October to change the direction.
Speaker A:So that's why that's a pretty safe bet.
Speaker A:The third one is where I go, I don't know, because you're going to get some meaningful data by that point in time on where things are going.
Speaker A:And I think you're going to see the tariff impacts push inflation a little quicker than people are thinking.
Speaker A:A little quicker, not, not huge.
Speaker A:But I think there's going to be some pop up there and the Fed's effectively calling for it with a 3% target rate that they're saying here, right, they're saying that it's going to go up.
Speaker A:I think that's a bit of an underestimate.
Speaker A:I think you can get there much quicker than the Fed thinks.
Speaker A:But I.
Speaker B:And they also acknowledged that they now are predicting, and this has always been the case, that they're not going to hit their 2% target rate for another Two years.
Speaker B: So they push it out to: Speaker A: r, in middle of the year, May: Speaker B:It's not my problem.
Speaker B:It's your guys's problem.
Speaker A:And that was one of the questions that came up today.
Speaker A:They were like, hey, man, you pushed this out two years two years ago.
Speaker B:Yeah.
Speaker A:You pushed it out two years last year.
Speaker A:And I don't want to be the guy who says this to you, but.
Speaker B:I got to be the guy that.
Speaker A:Says this to you because you're pushing it out two years now.
Speaker A:And by the way, your term ends in May of next year.
Speaker A:Yes.
Speaker B:Yeah.
Speaker B:How do you see this happening?
Speaker B:Yeah.
Speaker A:Let me do this a different way.
Speaker A:Okay.
Speaker A:Crude but effective example here.
Speaker A:So for those of you with baby ears, cover them.
Speaker A:All.
Speaker A:Right?
Speaker B:Like that side.
Speaker A:Let's say you and a beautiful woman, because you're not married in this example, go out on a date.
Speaker B:Okay.
Speaker A:I will be the beautiful woman for the purpose of this exam.
Speaker A:Much better.
Speaker A:Okay.
Speaker A:And we're.
Speaker B:This now makes it acceptable.
Speaker B:Now I can.
Speaker B:Now.
Speaker A:Now you can answer.
Speaker B:I can entertain.
Speaker B:Now I can entertain this.
Speaker A:Exactly.
Speaker B:Are you wearing a green thong?
Speaker A:Neon green, for those of you don't recall that episode.
Speaker A:There are some facts around that conversation.
Speaker A:Right.
Speaker A:Right.
Speaker A:So let's say we go on a date, and in doing so, we have a fantastic time.
Speaker A:It's amazing.
Speaker A:You think things.
Speaker A:You say things are going to a plan.
Speaker B:Okay.
Speaker A:I say things are going to my plan or your plan?
Speaker A:Your plan.
Speaker B:Okay.
Speaker A:You're very happy with the way this date is going.
Speaker B:Are our plans aligned?
Speaker B:Yeah.
Speaker A:Now, I'm not a 10.
Speaker A:You've lowered your standards to a seven and a half.
Speaker A:Because we've lowered our targets for inflation.
Speaker B:Okay.
Speaker A:We've changed our targets for unemployment.
Speaker A:All right.
Speaker A:Right.
Speaker A:So I'm not what you would normally go for.
Speaker B:Right.
Speaker A:But I'm close.
Speaker B:Exactly.
Speaker A:You know?
Speaker A:So you're happy, I'm happy.
Speaker A:We're all happy.
Speaker A:But I'm a Gemini.
Speaker A:I'm a little bipolar.
Speaker A:Some days I feel great, some days I don't.
Speaker B:Just lost a couple of people, but.
Speaker A:Okay.
Speaker A:Yeah, so people are like, I'm a Gemini.
Speaker A:Unsubscribe.
Speaker A:Yeah, I'm just.
Speaker A:I'm just going with astrological signs.
Speaker B:Right.
Speaker A:Okay.
Speaker A:You have a problem with this, go see your light healer.
Speaker A:Yeah.
Speaker A:I got a whole conversation with that we can get into later on.
Speaker A:Okay.
Speaker A:But let's just say it's fantastic.
Speaker A:We get back to the house.
Speaker A:Oh, I was.
Speaker B:I was able to hear that.
Speaker A:Back to the house.
Speaker A:I got you back.
Speaker B:Okay, let's go.
Speaker A:And you would like to hit a home run to knock it out the park, to.
Speaker A:To cross the finish line, seal the deal.
Speaker B:Yeah, got it.
Speaker A:And I say in two weeks.
Speaker A:Wow.
Speaker A:I have a.
Speaker B:Pushed it out.
Speaker A:I have a way.
Speaker B:I thought everything was going well, you know, it is.
Speaker A:It's fantastic.
Speaker B:But you.
Speaker B:But our plans were.
Speaker B:I thought they were aligned.
Speaker A:I like to wait and see, because sometimes things happen.
Speaker A:And you know what?
Speaker A:I would regret it later on if we did it too soon.
Speaker B:Oh, okay.
Speaker A:Okay.
Speaker B:Okay.
Speaker A:So I would like two weeks.
Speaker B:So your mind's telling you no, but my body.
Speaker B:There you go.
Speaker B:Careful.
Speaker B:Don't get canceled.
Speaker A:Yeah.
Speaker A:So that.
Speaker A:Oh, yeah.
Speaker A:Singer.
Speaker A:The problem is the singer, not the song.
Speaker B:I can't quote him.
Speaker A:We didn't quote him.
Speaker A:Yeah.
Speaker A:And then two weeks come back, we're still going on dates.
Speaker A:Still sensational, right?
Speaker B:You've seen some red flags, man.
Speaker B:I've stuck it through for another two weeks.
Speaker A:But you see some not stuck it through.
Speaker B:You.
Speaker A:You've written it out.
Speaker A:Come on.
Speaker B:I'm trying to pat myself on the back here.
Speaker A:Yeah.
Speaker A:Just yourself?
Speaker A:Yeah.
Speaker A:I can't help you.
Speaker B:I've stuck it out.
Speaker A:Yeah.
Speaker A:You didn't stick it in.
Speaker B:Yeah, Stuck it out.
Speaker A:Yeah.
Speaker A:Okay.
Speaker A:So two weeks later, okay.
Speaker A:There's been some green flags, some red flags, but now all your friends, your friend named Donald in particular, keeps running his mouth.
Speaker A:Talk about your relationships problem.
Speaker B:What's wrong with my.
Speaker B:Listen, everything's going fine.
Speaker B:Everything's going according to plan.
Speaker B:It's taking a little bit longer to get there, but we're gonna get there.
Speaker A:He's saying, bro, you need to smash and pass.
Speaker A:Which one's it gonna be?
Speaker B:Which one's it gonna be?
Speaker B:And then what?
Speaker B:And then what is it?
Speaker B:And then.
Speaker B:And then I come to find out it's gonna take another two weeks.
Speaker A:Yep.
Speaker A:So then what does he do?
Speaker A:He calls the homie up and says you're gonna go to his restaurant tonight.
Speaker A:Oh, yeah.
Speaker A:And he's gonna tell you what to order.
Speaker A:His name's Mirren.
Speaker A:Right.
Speaker A:So you go to Mirror's restaurant.
Speaker A:Everything's fantastic.
Speaker A:Right.
Speaker A:You say all the right things.
Speaker B:Okay.
Speaker A:We get back to the house.
Speaker B:Two more weeks.
Speaker A:Two more weeks.
Speaker B:Can't do it, chief.
Speaker A:And here's the best part.
Speaker B:Time start cutting these rates.
Speaker A:You tell me you're leaving to go back to your home country from wherever country you're from in a week, two More weeks.
Speaker B:Yeah, but I'm not gonna be here in two weeks.
Speaker B:That's not my problem.
Speaker A:I have to sleep with whoever's replacing you in two weeks.
Speaker B:Yeah, yeah, exactly.
Speaker B:If we end up even getting there.
Speaker A:But this is the nonsensicalness of the conversation.
Speaker A:When you break it down to something as simple as dating, people are like, that sounds stupid, but that's really what we're doing here.
Speaker B:Yeah, yeah.
Speaker B:And, and then we're all supposed to buy in, Expected to buy in.
Speaker B:Like, okay, this will, this will eventually happen.
Speaker B:This will eventually get here when it probably won't, honestly.
Speaker B:And he dug.
Speaker B:He.
Speaker B:He did this to himself.
Speaker B:And by he, I mean he spoke on behalf of the entire FOMC.
Speaker B:It was always a 2 to 3% range.
Speaker B:Why did you, why were you so adamant?
Speaker B:I think the reason why he, they were so adamant about making a 2% is because if he kept it at the range.
Speaker B:Look, we already hit the range.
Speaker B:He would have been forced to cut weight earlier.
Speaker A:But here's my problem with this.
Speaker A:Okay, I hear you.
Speaker A:I agree with that.
Speaker A:But fundamentally, here's the disconnect.
Speaker A:Okay?
Speaker A:And he did this today when it came out the jobs.
Speaker A:He said, he tried to say, and he didn't say this this way, but he tried to say based on the data we had at the time, the jobs information that we were getting, not cutting then was the right move.
Speaker A:But we also knew the job data we were getting was flawed and we did expect a revision down that was meaningful.
Speaker B:Exactly.
Speaker A:So I'm like, wait a minute, hold up.
Speaker A:And the guy from Bloomberg did ask this question, shout out to him, I remember his name.
Speaker A:But he was like, wait, if you knew there was going to be a big revision down and you knew the jobs numbers were wrong, then you should have cut then.
Speaker A:Right.
Speaker A:Why were you waiting to validate?
Speaker B:Exactly.
Speaker B:And on top of that, listen, you knew they were coming down.
Speaker B:And there was over 911,000 jobs that got revised down over a million added.
Speaker A:Together between two months of revision.
Speaker B:There you go.
Speaker B:Added.
Speaker B:Yeah.
Speaker B:Added together over a million.
Speaker A:Yep.
Speaker B:What has changed since then?
Speaker B:What makes you think that it's not going to be worse?
Speaker A:Well, and so he was very clear.
Speaker A:He's like, less company's reporting in.
Speaker A:The birth death rate model is flawed.
Speaker A:See, he basically co.
Speaker A:Signed the firing the, the BLS head.
Speaker B:Yeah.
Speaker A:He didn't say like, oh, I'm glad she fired.
Speaker A:But he basically said, well, let's talk about performance.
Speaker B:Yeah, yeah, exactly.
Speaker B:And then somebody went on to ask him if he believes that 0.25% rate cut will even make an impact to help the labor force.
Speaker B:And what they were citing was black unemployment rate in August was above 7%.
Speaker B:They were talked about declining work week, difficult among college graduates to find work higher, rising youth unemployment.
Speaker A:Right.
Speaker B:And this was his quote.
Speaker B:I didn't say a quarter point would make a huge difference to the economy.
Speaker B:But you have to look at the whole path of rates.
Speaker B:Understand that our markets work off expectations and that our policy path really does matter.
Speaker B:So what he's saying is like this.
Speaker B:Our policy path really matters.
Speaker B:Guys, look at the scp.
Speaker B:Two more cuts by the end of the year.
Speaker B:It's coming.
Speaker B:It's coming.
Speaker A:So he contradicted himself with the SCP report too.
Speaker A:He also wanted to make it.
Speaker A:I'm going to get back to that jobs commentary because there's extra color there.
Speaker A:But he also, he wanted to make it clear on the SCP report to the audience that he and the rest of the FOMC members really don't discuss their feelings, just put it down on paper.
Speaker A:They might discuss some topics, but generally put it down on paper.
Speaker A:We don't want to have a big discussion around.
Speaker A:I don't want to influence decisions.
Speaker A:Just put it on paper.
Speaker B:Yeah.
Speaker B:He said it's an accumulation of 19 different people.
Speaker B:And we just put it, we just put it all together.
Speaker B:We talked about some of these things.
Speaker A:But not just put it down on paper.
Speaker B:Yep.
Speaker A:Then why are you having a press conference, Dick?
Speaker A:Okay, we can read the scp.
Speaker A:That's supposed to be an unbiased, clear opinion of their individual commentary.
Speaker A:The whole point of this conference.
Speaker A:And I said this in the live stream.
Speaker A:And I said this, we said this in the last show.
Speaker A:We all knew.
Speaker A:There's over 96% probability that you're gonna get a 25 rate cut.
Speaker A:We got the 25.
Speaker A:I'm 25 basis points.
Speaker A:You got 25 basis point rate cut.
Speaker A:Okay.
Speaker A:We all knew that.
Speaker A:We all knew the meat of the conversation was in the color that you were getting afterwards.
Speaker B:So let me ask you a question.
Speaker B:So he said, he said in this response, he said our markets are really driven off of expectations.
Speaker B:Okay.
Speaker B:And given the social media climate that.
Speaker A:We'Re all living in, he's ignoring the speed with which expectations change in today's world.
Speaker B:Yeah, yeah.
Speaker B:No, but I think, I think, think, I think he's.
Speaker B:What they're trying to do is take that into account.
Speaker B:I'm not saying they're doing a good job of it.
Speaker B:And what they're doing and how they're doing it is the right way.
Speaker B:But what I think they're thinking is we need to get out in front and somebody needs to come out and speak to make sure we lay the groundwork for the expectations.
Speaker B:Because we don't expect everyday people to read into the scp.
Speaker B:They're going to need a face and somebody telling them what, what it is to expect.
Speaker A:Okay, agree, but disagree.
Speaker A:Okay, tell me why you're right and you're wrong.
Speaker B:Tell me.
Speaker A:Yes, average, every, average everyday people who are not the higher standard listeners.
Speaker A:Yeah.
Speaker A:Are not going to dive into the scp.
Speaker A:Okay.
Speaker A:But that's the media and the non traditional media and the traditional media's job to break that down and to tell the public what it says.
Speaker A:And that's where the media can live.
Speaker A:Right.
Speaker A:That ecosystem you don't need to feed that ecosystem with a press conference.
Speaker A:It's about you being in front of the press.
Speaker A:Let the SCP speak for itself and let the press read the document and dive in.
Speaker A:They're going to speculate on what.
Speaker A:You're right anyway.
Speaker A:Right.
Speaker A:You don't need to come out and provide this press conference.
Speaker A:If you're not politically motivated, why are you giving people opportunities to ask you politically motivated questions?
Speaker B:Yeah, I think the, the big mess misstep with them is why do the Q A portion?
Speaker A:You don't need it.
Speaker A:Why come out, make the statement.
Speaker B:Yeah, come out, make the statement.
Speaker B:Okay.
Speaker B:Give a little bit more color to really kind of drive home expectations and then walk off.
Speaker A:Yeah, you, you do.
Speaker A:You are not, you are not the President of the United States who's the CEO of the largest company in the world.
Speaker A:Right.
Speaker A:Okay.
Speaker A:You were not that person.
Speaker B:You were not nominated by the people.
Speaker B:Right.
Speaker A:God damn it.
Speaker A:I have to say this too.
Speaker A:I'm not co signing the President.
Speaker A:I'm just saying functionally.
Speaker A:All right, just, just to be clear, I'm looking at the camera man.
Speaker A:Okay.
Speaker A:I'm not co signing anybody.
Speaker B:Oh, we got to read that update review too.
Speaker A:We got to do.
Speaker A:You know, sometimes we got a peer pressure shout out CPT Engineer.
Speaker A:Yeah.
Speaker A:But no, he was very gracious.
Speaker A:I do want to go back to the jobs commentary and about the cutting.
Speaker A:I don't want to, I don't want to say that I disagree with the rate cut now.
Speaker A:Okay?
Speaker A:I don't.
Speaker A:I disagree with the data and the commentary around the data.
Speaker A:But like I said in the live stream, we, you and I said this before.
Speaker A:You can't stop the economy on a dime.
Speaker A:Okay?
Speaker A:If you're the Fed.
Speaker A:And you're really worried about inflation creeping up, which they said they were right.
Speaker A:Inflation will go up 3%, but we expect jobs to hit our target.
Speaker A:Okay, so then what you're trying to say is, is we're trying to curtail jobs falling higher, unemployment going higher than needed.
Speaker A:So they're saying we're prioritizing jobs.
Speaker A:And he effectively said that.
Speaker B:That's what he said.
Speaker B:Yeah.
Speaker B:The down, the downside risks are really starting to become apparent and they, and they cited jobs.
Speaker A:So I agree with.
Speaker A:You have to slow the cadence, the velocity with which the economy is moving by adding rate cuts now and seeing over time.
Speaker A:Right.
Speaker A:That's the right move.
Speaker A:I don't know that you're get enough responsive data in by October to do that.
Speaker A:That being said, a rate cut now to see how the economy and the market response is good.
Speaker A:But you also can't be afraid to re raise that rate.
Speaker A:I believe the unemployment numbers are flawed and frankly, so does the FOMC and so does Jerome Powell.
Speaker A:He made that very clear today.
Speaker B:The revisions speak for themselves.
Speaker B:And if there's not going to be a lot of new data that comes out, one piece of data that absolutely will come out are more revisions to jobs data.
Speaker A:Right.
Speaker B:And that's tertiary stuff and that's what they're going to lean on for their next rate cut.
Speaker A:But again, this is so frustrating because you get all this extra color.
Speaker A:How do you not have made those comments today?
Speaker A:They would not have been in the scp, right?
Speaker A:It would just would have been.
Speaker A:These are our thoughts is where we think the economy should go.
Speaker A:Where the 19 voting members.
Speaker A:This is our insights.
Speaker A:Here you go.
Speaker A:But he makes this extra commentary.
Speaker A:What happens?
Speaker A:Treasuries spiked a little bit afterward.
Speaker A:I knew they were going to go up because again, if you're, if you're trading the news, you're, you're trading too late.
Speaker A:Right?
Speaker A:By the time the news has it, it's too late.
Speaker A:Most of the market responded.
Speaker A:Leading into today, you saw mortgage rates drop about 15 to 20 basis points from the call at the mid-630s down to 6 13, 615 ish.
Speaker A:Right.
Speaker A:And everyone's like, oh, rate cut today we're gonna see rates drop.
Speaker A:No, no, no, no.
Speaker A:Rates already dropped the week leading into this.
Speaker A:Okay, so it was really a response today.
Speaker A:And what happened after the last rate cut?
Speaker A:Treasuries rose, Mortgage rates rose.
Speaker A:I believe you saw that today.
Speaker A:You saw treasuries rise.
Speaker A:Not because he was overly dovish or hawkish, which I think what people were looking for, but because his responsiveness to the questions just seemed really malaligned.
Speaker B:Yeah, that's, that's a good point.
Speaker B:I did feel like he was tap dancing a little bit.
Speaker A:Yeah, that's a lot of political questions though, which is justifiable to tap dance around that.
Speaker B:Yeah, yeah, exactly.
Speaker A:Yeah.
Speaker B:I don't, I think, I think the market spoke for itself today when the Chicago Mercantile Exchange came out when you looked at it post meeting and it showed that 80 chance of two more rate cuts by the end of the year.
Speaker A:Yeah.
Speaker A:Right.
Speaker B:So I think people, the market is buying into that rhetoric and where that ultimately like stays at over the next couple weeks will really determine how things go.
Speaker B:But at what point this, and this is a question I wanted to ask you today, but I figured let's leave it for the show.
Speaker B:At what point when the market speaks for itself and says expectations are, we believe that they're going to be cuts.
Speaker B:When does that price start to get baked in?
Speaker A:Good question.
Speaker A:So usually after.
Speaker A:So right now you've got this kind of this interim, call it inflection point period where the market's going to stabilize a little bit and absorb a little bit of what was said.
Speaker A:Everything else afterward is usually in response to the data and the reporting that comes out.
Speaker A:And people will go, okay, this is the data that came out.
Speaker A:The FOMC looks at this data.
Speaker A:So right now the smart people in the market, what they're going to do is they're going to sit down, they're going to go, what reports come out between now and the end of the year?
Speaker A:Oh, the screen turned off on us.
Speaker A:That was weird.
Speaker A:We're.
Speaker A:Jill, what are you doing back there, sugar bear?
Speaker A:He's not only man's so what data Martins, come out.
Speaker B:I'm trying to work on my second job here, guys.
Speaker A:Oh, are you really?
Speaker A:People are going to look at, they're going to go, they're going to plot down between now and the next FOMC meeting, the next 45 days, what are the reports that are coming out and when are they coming out.
Speaker A:And they're going to watch those reports the same way the FOMC would because they know the FOMC is going to look at them.
Speaker A:And based on the data that comes out, they're going to know how those should, that should be interpreted.
Speaker A:They're going to bet on the markets then.
Speaker A:So as the reports come out, Inflation cpi.
Speaker A:See if you can pull this up real quick.
Speaker A:Ask just Google or chat CBD if you want.
Speaker A:What are the key Economic reports that come out between now and the next FOMC meeting in October.
Speaker B:In October, yeah, yeah.
Speaker A:And I'm not sure which one.
Speaker A:I haven't done the whole list yet.
Speaker B:I usually definitely get a jobs report.
Speaker B:Right.
Speaker B:It's first Friday of every month.
Speaker A:Yep.
Speaker B:Probably get a CPI and a ppi.
Speaker B:Yeah, yeah.
Speaker A:Cpe, I think.
Speaker B:Gdp.
Speaker A:Yeah, you know me.
Speaker B:Yeah.
Speaker B: sed from now through December: Speaker B:Okay, that's December.
Speaker B:We want October.
Speaker B:October, yeah.
Speaker B:It was one of the burrs.
Speaker B:One of the burrs.
Speaker B:There you go.
Speaker B:Kia.
Speaker B: oming out now through October: Speaker B:Updates on GDP from the Bureau of Economic Analysis.
Speaker B:You can find these by visiting these websites.
Speaker B:Okay.
Speaker B:Can you click show more, please?
Speaker B:Yeah, there you go.
Speaker A:Okay.
Speaker B:So yeah, all the ones we just meant those are the big ones.
Speaker B:Right.
Speaker B:So PPI will, will be big because they'll be able to tell if the tariffs are, you know, getting passed on or, you know, some of the cost of the, you know, wholesale and then.
Speaker B:Yeah, CPI too.
Speaker B:But even though they like to reflect on PC.
Speaker A:So the smart, the smart people who watch the market are going to watch these reports as they come out and they're going to think about it in advance.
Speaker A:It's kind of like if, you know, it's a good example here, if you know that the cost of aluminum is going up.
Speaker A:Right.
Speaker A:And you're watching the commodities report and you see aluminum going up in an unusual way and you know that Apple iPhones are now produced in aluminum from titanium.
Speaker A:Again, you know, that's going to impact their earnings.
Speaker A:I know it sounds really simple and stupid, but that is exactly how major market players think.
Speaker A:Right.
Speaker A:It's.
Speaker A:You guys ever watch the movie Wall Street?
Speaker A:That's exactly the same concept that they were, you know.
Speaker A:Yeah, yeah, they, they knew.
Speaker A:Anybody's ever traded commodities trading places?
Speaker A:Eddie Murphy.
Speaker A:Right.
Speaker A:Because all, all of my financial advice comes from movies.
Speaker A:But yeah, commodity.
Speaker A:They were trading orange juice back then.
Speaker A:If you know that something is going to impact pricing in another market or impact that that market, that sphere, you trade on it.
Speaker A:It's very rare.
Speaker A:I think I've used this example before on previous shows.
Speaker A:Lululemon's predecessor, CEO, the.
Speaker A:I think the founder CEO.
Speaker B:Yeah.
Speaker A:Said they make clothes for, quote, fat people.
Speaker A:Yeah.
Speaker A:I knew that that dip was temporary because the product in and of itself was still good.
Speaker A:So you knew those events are rare.
Speaker A:Right.
Speaker A:They're right in front of you and you go, wait a minute.
Speaker A:That, that's a bit shocking.
Speaker B:Yeah.
Speaker A:Most people look for those small idiosyncratic details, like, hey, you know what, the inflation report came up a little bit.
Speaker A:The FOMC is going to look at the inflation report.
Speaker A:I bet you they're going to hold rates, not cut rates.
Speaker A:And this is why people say it's a lot like gambling.
Speaker A:If you walk up to a table in Vegas and you go, okay, huh, this roulette table has spun, you know, 13 black, 11 black.
Speaker A:Mm, you know, three black, I bet you the next one's red.
Speaker A:Yeah, just the, the odds, the statistical process, statistical probability here is heavy in the reds.
Speaker A:I'm gonna bet on the reds.
Speaker A:Yeah, right.
Speaker A:You're like, wait a minute, it's always landed in the upper third of the top tier, 3rd sec, middle third and last third sections.
Speaker A:I bet you it's gonna land in one of the lower two sections.
Speaker A:Yeah, you start betting based on the odds.
Speaker A:That's really what you do in the market based on, you know, commodities pricing went up and aluminum.
Speaker A:Right.
Speaker A:And that's going to impact Apple's pricing.
Speaker A:But you're also assuming a lot of things that are going to happen.
Speaker A:Did Apple not have a contract for aluminum that's in place and locked in?
Speaker A:Have they not pre purchased all the aluminum they need for iPhone production for the next six months to a year?
Speaker A:Do they have some type of hedge in place for economic loss around aluminum?
Speaker A:I mean, there's so many questions.
Speaker B:Some insider information really helps you.
Speaker A:Or this is why you have certain analysts which cover the companies specifically.
Speaker A:People always ask me, well, Chris, why does one analyst cover like five companies or one company in some cases?
Speaker A:Because the company's mechanisms are so goddamn big.
Speaker A:Those, those filings, they go through them with a fine tooth comb.
Speaker A:They know everything about them.
Speaker A:They know the suppliers are, they know the contracts, they know the European tax law, the, you know, so going to.
Speaker B:That, going to that relationship a little bit.
Speaker B:So if there's an analyst that is working with say five companies or even one company, because that company they're working with is so large.
Speaker B:Right.
Speaker B:What's the working relationship like with that analyst?
Speaker B:And is that analysts trying to make sure that they don't do the company dirty that they're covering, because clearly there's a working relationship that they've been covering them for quite some time.
Speaker A:Right.
Speaker B:I mean, I, I know they have a responsibility and a duty to make sure they report on things accurately, but I mean, is there, are they giving them like inside baseball a little bit of like, hey, you know, this is what I'm seeing.
Speaker A:And not supposed to, it's supposed to be they can't make forward, you know, moving statements.
Speaker A:They're supposed to very limited.
Speaker A:Right.
Speaker A:And a good analyst will try to walk the line and try to even kind of toe it a little bit and say, hey, don't tell me this.
Speaker A:But at the same time they're going to be able to read between the, the political that you tell them and say, okay, this is happening because of that.
Speaker A:Right.
Speaker A:Like in a highly regulated, regulated industry you might say I'm doing this, this and this and they're gonna go, okay.
Speaker A:That really means the regulators are forcing you to do that.
Speaker A:You know what I mean?
Speaker A:They're going to know that.
Speaker A:But the relationship is one where, where a good CEO in my mind and a lot of CEOs disagree with this.
Speaker A:Okay.
Speaker A:A good CEO in my mind, if you're publicly traded is going to have a good relationship with analyst, is going to constantly talk to the analyst and proactively reach out to them to get their opinion and insights on decisions that you're making as you're making them and as they're public.
Speaker A:Yeah.
Speaker B:Because that I feel like that analyst would be really, especially if you have a relationship with them, will be forthcoming and they've studied other like companies in the market and can tell you whether something's going to work or is not going to work.
Speaker A:Right now I've had analysts hate us.
Speaker A:You know, I've had analysts that didn't like anything we were doing and had a disagreement with a business model.
Speaker A:And you can't, it's just like people in relationships, you can't do anything about that.
Speaker A:But the, the idea if you can be transparent and authentic with the analyst and they can be transparent and authentic with you, it makes it easier for them to recommend buying your stock because they believe in you versus when they don't.
Speaker B:Yeah, that makes sense.
Speaker A:If they believe that you're ethical, they don't believe in your business plan.
Speaker A:They're going to, that's going to be reflected in their recommendation.
Speaker A:This is a stand up person.
Speaker A:He knows what he's doing.
Speaker A:I disagree on this or I don't see this growth here.
Speaker A:It's a very interesting kind of ecosystem when you get down to it.
Speaker A:There's lots of rules we can get into for a later date, but there's more I want to get into for tonight's show as it relates to some of the consumer impacts.
Speaker A:Yeah.
Speaker A:So I want to go to.
Speaker A:Oh, there you go.
Speaker A:Yeah, good Good call this from Charlie Belleo, via x.
Speaker A:The top 10% of income earners in the US now account for nearly half of all consumer spending, a record high.
Speaker A:This chart shows the impact here.
Speaker A:High income Americans are behind roughly half of the US Consumer spending, up from about a third in the early 90s.
Speaker A:That is a big, big, big time shift.
Speaker A:And I know that a lot of people will see that and go, well, Chris, you know, the rich people spend a lot of money.
Speaker A:They do, but they're usually not the ones propping up the economy almost entirely.
Speaker A:This to me reminded me a lot of how we're seeing the, the Mag 7 lead the way for the S P 500.
Speaker A:Yeah, these, these seven companies are leading the entire top 500 companies in too.
Speaker B:Much of a concentration in those 10, especially in one industry.
Speaker A:That's right.
Speaker A:Now, the wealth people are always going to typically continue to spend and prop the economy up.
Speaker A:But to me, this signaled a huge trend.
Speaker A:That, that scared me for quite some time.
Speaker A:That's a wealth disparity gap.
Speaker A:There's been a conversation point for decades.
Speaker A:It's not new to us.
Speaker A:We're not special for saying it.
Speaker A:But what I will say is if Americans cannot buy homes, right, and they cannot afford to buy this single largest source of wealth creation, which created a lot of wealth for most of the middle and upper middle class, and certainly the upper class, then you have the working class and the wealthy class.
Speaker A:And if the wealthy class are propping up 50% of the consumer spending in this country, can you really look at things like gdp?
Speaker A:Can you really look at things like consumer spending in and of itself?
Speaker B:That just really makes me question, like GDP figures, like the, the projections and the estimates that they have going forward.
Speaker B:I mean, if people are pulling back their spending that much, is, is GDP really that strong?
Speaker A:Rajeel?
Speaker A:I think another number, but I don't misquote.
Speaker A:Can you Google how much of GDP is consumer discretionary spending?
Speaker B:I want to say it's 50.
Speaker A:Yeah, yeah.
Speaker A:I think it's a little higher.
Speaker A:I think it's like 58%.
Speaker A:It's a good thing we didn't guess.
Speaker B:Yeah, yeah, it's a good thing.
Speaker B:We got Regill here.
Speaker A:Yeah.
Speaker B:But yeah, it there.
Speaker B:If there's 70%.
Speaker A:There you go.
Speaker A:Yeah, 70.
Speaker A:So 70% of GDP is made up on consumer spending, of which 10% of the US population is spending 50% of that.
Speaker A:So we have an artificial GDP number at this particular point in time.
Speaker A:Right.
Speaker A:And to me, that signals a very, very, very scary thing.
Speaker A:I'm trying to find a quote I saw earlier today.
Speaker B:Imagine how strong GDP would be if everybody was still out there spending.
Speaker A:Well, I mean that's the problem.
Speaker A:Right?
Speaker A:Like the stimmy money in addition to that kind of hid some of those things.
Speaker A:But the facts are that, that you wind up having a disproportionate amount of.
Speaker A:And some people will listen to this and clearly say, you know what Chris, it's always been that way.
Speaker A:No it hasn't.
Speaker A:It's actually, it shows it right here.
Speaker B: hart right here dates back to: Speaker B:Right when it was around.
Speaker B:Yeah, around 40%.
Speaker A:So I mean, so I mean you got the S and P at all time high.
Speaker A:Dow at an all time high.
Speaker A:Gold at an all time high.
Speaker A:Bitcoin just came off an all time high.
Speaker A:You've got housing affordability at at an all time low because home prices are at an all time high.
Speaker A:There was a question about housing today in the FOMC meeting and he basically kind of brushed it off and referred back to rates.
Speaker A:I was so pissed.
Speaker A:Yeah, I don't know if you saw me in the live stream.
Speaker B:He took a step back.
Speaker A:I literally had to leave, go to the bathroom for a little bit and come back.
Speaker A:I was pissed.
Speaker A:I was so mad and in on that topic.
Speaker A:Let's get into the next, the next section there with Jill.
Speaker A:I think this is a really important kind of kickoff here.
Speaker A:Mortgage refinance Demand spikes nearly 60% as interest rates dropped sharply.
Speaker A:This was leading in to the FOMC.
Speaker B:Meeting which I found so interesting.
Speaker A:Yeah, the average con, average contract interest rate for the 30 year fixed rate from mortgages with conforming loan balances of 8, 06, 500, 800, $6,500 or less decreased to 6.39% from 6.49%.
Speaker A:Not a meaningful drop.
Speaker A:It's 10 basis points.
Speaker A: plications, its highest since: Speaker A:People are saying you know what, the 30 year fixed pricing is still too high for me.
Speaker A:I'm going to go with an adjustable rate mortgage which typically has a lower teaser rate for 3, 5 or 7 years.
Speaker B:Dangerous game you're playing.
Speaker A:Yeah, but they houses are just that unaffordable and that they have to put the rate game to get it.
Speaker A:That's what they're doing.
Speaker B:Because if you're getting, if you're getting one of those adjustable rates you're probably having a, getting a five handle.
Speaker B:Right.
Speaker A:That's Right, Yeah.
Speaker A:The average.
Speaker A:In this economy, the average loan size on refinance has reached its highest level in the 35 year history of the Mortgage Banking Association's tracking.
Speaker A:That makes sense because you have home prices at their highest level in history.
Speaker A:Right.
Speaker A:So you're not too far off from that.
Speaker A:Mortgage rates last week dropped to the lowest level since October of last year.
Speaker A:That caused a massive run on refinances as consumers seek more savings in an uncertain economy.
Speaker B:What does that tell you?
Speaker B:What does that tell you?
Speaker B:You got normally people in this type of market when if they really believe that rates are on the way down, you're not going to lock in a rate if you think that you can just wait for the end of the year to refinance again.
Speaker B:Right.
Speaker B:Because you typically have to wait at least another six months before you can refinance again.
Speaker B:And even then you have to do the numbers to see if it makes sense for you to.
Speaker A:So I've got a different mechanism here removing the humanity from this.
Speaker A:I look at the market driven factors, I look at how these things actually play out in real time.
Speaker A:Having been on the mortgage side as a kid and work my way up to the banking business, I know this is what happens.
Speaker A:You're the, the loan officer, right?
Speaker A:Okay.
Speaker A:In a call center you could just have clients direct, whatever.
Speaker A:You get a rate sheet from your lender because Treasuries have come down showing that mortgage rates have dipped a little bit.
Speaker A:And this is a meaningful drop that you haven't seen in a little bit of time.
Speaker A:The lowest rate in the last year.
Speaker A:Right.
Speaker A:So literally a year ago, you start calling all of your clients or you have inbound leads, you start telling everybody the lowest rates you've seen in the last year.
Speaker A:Not a lie, it's true.
Speaker A:And you pump that up.
Speaker A:If you're the mortgage company, you say, hey look, we know the Fed's going to cut rates next week.
Speaker A:The probabilities are there.
Speaker A:CME is saying this.
Speaker A:The same thing I'm telling you that smart traders do is they're trying to predict that.
Speaker B:Get ready for my call.
Speaker A:So you start selling loans off and then you say, well, Chris.
Speaker A:Well, how does this make sense?
Speaker A:Number one, they know that rates are going to go down in the future.
Speaker A:So any loan they make today at a lower rate isn't going to hurt them.
Speaker A:Well, how does that not hurt them?
Speaker A:Well, they package these loans up and they sell them on the secondary market in, in the form of securitization.
Speaker A:If that securitization has a Weighted average interest rate of all the loans they originated this week that matches the current market rate next week.
Speaker A:And guess what?
Speaker A:They're gonna, they're gonna get paid par or a premium.
Speaker A:They're not gonna lose money on that trade.
Speaker A:That's what mortgage lenders are looking to not do.
Speaker A:They don't want to lose money in the trade because the way mortgage lenders typically make money, unless they're a bank and they hold it in portfolio, is they're going to sell it.
Speaker A:They're going to sell it to you, originate it.
Speaker A:They're going to charge the origination fee.
Speaker A:Right.
Speaker A:They're going to earn some interest in the carry until such time as they sell it to somebody else.
Speaker A:Right.
Speaker A:They're going to ultimately package it, pull it, sell it on the secondary market.
Speaker A:If they get par, meaning that they get paid every dollar they got into it.
Speaker A:So I'm making extra money.
Speaker A:Fine.
Speaker A:They can now redeploy that capital into new loans and make more origination fees.
Speaker A:In an ideal world, they'll securitize it, they'll retain a servicing.
Speaker A:Right.
Speaker A:Usually 25, 50 basis points on that loan, an annuity over time that they'll get on that loan no matter how it's additional income.
Speaker A:And they'll get like 1.01%, a 1% gain.
Speaker A:A 1% gain on a billion dollars of loans is a pretty meaningful add to your bottom line.
Speaker A:So made origination fees, an interest carry, a servicing fee, and now a gain on sale.
Speaker A:There you go.
Speaker A:And now they can also redeploy that capital minus that 1% gain on sale.
Speaker B:Keep the lights on, pay out some bonuses, everybody's happy.
Speaker A:Right.
Speaker A:So that ecosystem starts up because they have tre CFOs, strategic people, usually head of strategy or something to that effect in the company whose job it is to watch the markets, know the probability of rate cuts and get out in front of it and try to eke out as additional profits as they can.
Speaker A:Yeah, it's very easy to point at people and say, oh, you knew you were committing loan fraud.
Speaker A:Lisa Cook.
Speaker B:Yeah, right, right.
Speaker A:But in a company, you've got strategic people in place whose jobs it is solely to focus on that.
Speaker A:So for example, it's not uncommon for a bank to have like a capital manager, somebody whose sole job it is to manage your capital.
Speaker A:Can you imagine going home and you having a capital manager who manages all your cash, a treasurer who manages all your cash, everything.
Speaker B:Yeah, exactly Right.
Speaker A:And then you have somebody whose sole job it is to monitor your net worth.
Speaker A:Hey, Saeed, I was looking at your spending today, and I'm not really happy with how this is going with our net worth.
Speaker A:We're going to have to look at our budget and plan here and make sure that you're spending in line to get us to the net worth that you told the secondary market, AKA your wife, that we were going to get to.
Speaker A:Right.
Speaker A:Otherwise, you're gonna get traded down.
Speaker A:Yeah.
Speaker A:And you're not gonna be able to pay yourself an annual nighttime bonus, if you know what I'm talking about.
Speaker B:Well done, sir.
Speaker A:Yeah.
Speaker B:Well, the golf clap, dude.
Speaker A:Yeah.
Speaker B:Thank you.
Speaker B:That was good.
Speaker A:Annual bonus.
Speaker A:I'm talking quarterly.
Speaker A:Yeah.
Speaker A:Nothing is like, wow.
Speaker A:Regill, so stoic.
Speaker A:Yeah.
Speaker B:It flew right over these.
Speaker B:They're not trying to get in trouble, bro.
Speaker A:Yeah.
Speaker A:He's like, my wife listens to the show.
Speaker A:Keep it.
Speaker B:Yeah, Keep it.
Speaker A:Hush, bro.
Speaker A:Annual.
Speaker B:Daniel, she does listen to the show.
Speaker A:Really?
Speaker A:Every show.
Speaker B:Every show.
Speaker A:Every show.
Speaker B:Every show.
Speaker B:Shout out just to see how much.
Speaker B:How many times I talk.
Speaker A:All right, well, good, good.
Speaker A:I like that.
Speaker B:So do me a favor, Tabs.
Speaker B:Yeah.
Speaker A:Have your wife call my wife and tell her to start listening to shows again because she doesn't know what the hell we talk about anymore.
Speaker B:How was it?
Speaker B:On again, off again, all the time.
Speaker A:No.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:Especially with the kids.
Speaker A:Yeah.
Speaker A:There's no way she listens.
Speaker A:Like.
Speaker A:No, no, no, no.
Speaker B:Not full.
Speaker B:No.
Speaker B:She's on again, off again.
Speaker B:It always.
Speaker B:It'll random.
Speaker B:It'll start playing in her car.
Speaker A:What's the last episode you think she.
Speaker B:Legitimately listened to 300?
Speaker B:I know that for a fact.
Speaker B:Really?
Speaker A:Yeah.
Speaker B:Yeah, she's like, you guys did 300.
Speaker B:She was so, like, happy for us.
Speaker A:Yeah.
Speaker B:We gotta.
Speaker B:We gotta do a wives episode.
Speaker A:That's a dangerous proposition, man.
Speaker B:I. I wanna.
Speaker B:I. I like to flirt with danger.
Speaker A:Yeah, you're not flirting with it, dude.
Speaker A:You're.
Speaker A:You're taking on a date trying to close that deal.
Speaker B:Yeah.
Speaker A:And somebody's gonna get it, and it ain't gonna be you, right?
Speaker A:Oh, yeah.
Speaker A:Not.
Speaker A:Not a good situation.
Speaker A:But we can do it.
Speaker A:My only.
Speaker A:My only request would be fun.
Speaker A:Yeah.
Speaker A:You want to do, like, all three at the same time.
Speaker B:But I feel like there would need to be a moderator, someone to help guide and steer the ship.
Speaker B:Otherwise, they might get a little shy behind the microphones.
Speaker A:Or.
Speaker B:Or we just let them go.
Speaker B:Go for it.
Speaker B:And we go to Houston's.
Speaker B:There you go.
Speaker B:Or that.
Speaker B:See how well they do.
Speaker A:You know, I haven't had Hawaiian ribeye since last time.
Speaker A:You and I went.
Speaker A:Jill.
Speaker B:Yeah.
Speaker B:So selfish, bro.
Speaker B:No invite again.
Speaker B:First Hawaii, now Hawaiian ribeye.
Speaker B:What's going on here?
Speaker B:Aloha.
Speaker A:Aloha.
Speaker B:And then with the Hawaiian Punch, too.
Speaker B:Not.
Speaker B:And he's rubbing it in my face, this guy.
Speaker A:All right, we didn't want to tell you before, but you know how Jason Momoa has that show called, like, Something about War or something like that?
Speaker A:No.
Speaker A:Is it.
Speaker A:They all wear basically, like, these little leather thongs, and it's supposed to be traditional, like, Hawaiian attire art.
Speaker A:Is it.
Speaker A:What.
Speaker A:Is it something.
Speaker B:I thought that was God of War.
Speaker B:I thought that was the Charlie Sheen episode.
Speaker A:No, no.
Speaker A:Can we.
Speaker A:Can we just have.
Speaker A:Can we do this?
Speaker B:I tried to do it right.
Speaker A:Okay.
Speaker B:Like, why in Regil.
Speaker B:Shout out to you, he said, why is everybody trying to just normalize crack all of a sud.
Speaker A:Sudden?
Speaker B:This is unacceptable.
Speaker A:Unacceptable.
Speaker A:And then it's not only that.
Speaker A:It's like.
Speaker A:There's also, like, a normalization of, like.
Speaker B:Hey, we know you're.
Speaker B:We know you're never gonna get off the crack, so we're just gonna give you stuff that's less potent.
Speaker A:Did you listen to the Roganup interview?
Speaker B:No, I.
Speaker A:He was on testosterone cream and crack, so, you know, he's doing the tiger blood stuff and all that stuff, so apparently.
Speaker A:And I didn't know this.
Speaker A:I heard this on the.
Speaker A:On.
Speaker A:On the Rogan episode.
Speaker A:I.
Speaker A:The reason why they tell men to rub the.
Speaker A:Damn it.
Speaker A:Oh.
Speaker A:The reason they tell men to rub a testosterone cream on the inside of their thighs.
Speaker B:Okay.
Speaker A:Is because dudes were, like, literally putting on testosterone cream in their arms and then hugging, like, their wives and children, and they were getting inadvertent testosterone exposure.
Speaker A:So you had, like, young kids going through, like.
Speaker A:Yeah.
Speaker A:Maturation too quickly and having lifelong impacts because they were getting exposed to it.
Speaker A:But apparently, so Charlie Sheen, when he's going to that whole, like, crazy, like, cycle, he was doing a lot of drugs, I. E. Cocaine.
Speaker A:But he was also using, like, he said, completely unmeasured.
Speaker A:He's supposed to be like a dollop.
Speaker A:Like.
Speaker A:Like a small, like, dollop.
Speaker A:It can be, like, a nickel or quarter size.
Speaker A:You put on cream.
Speaker A:Right.
Speaker A:He was just, like, you know, in his hand, and he's, like, rubbing it.
Speaker B:I'm measuring it.
Speaker A:Yeah.
Speaker A:He's lathering it down.
Speaker A:Yeah, yeah, yeah.
Speaker A:And I know, because, you know, I'm on testosterone.
Speaker A:If you do high enough dosages, you just feel like.
Speaker A:Like Superman.
Speaker A:Yeah.
Speaker A:You just feel like I.
Speaker A:You're comp.
Speaker A:And it's such A weird thing, like chemically.
Speaker A:To have something chemically change your emotions.
Speaker A:I've never in a million years thought that I would say this.
Speaker A:I truly understand women now better.
Speaker A:Because of testosterone.
Speaker B:Because of testosterone?
Speaker A:Yes.
Speaker B:Wow.
Speaker A:Yes.
Speaker A:When you first get on testosterone, you have to really, really closely monitor your estrogen levels because everybody's body is going to get a kind of get to homeostasis on its own.
Speaker A:So your testosterone going up, everybody's body will try their.
Speaker A:Their estrogen levels will spike up to level out a little bit.
Speaker A:And depending on how responsive your body's in particular DNA in biology is, it may spike up more or less, which is why you get things like, you know, tits.
Speaker A:Right.
Speaker A:Like bodybuilders get that because the testosterone level goes up, but they get.
Speaker A:Estrogen goes up.
Speaker A:Yeah.
Speaker A:So typically you're getting.
Speaker B:So you see these actors who get on testosterone, you see, they get the surgery.
Speaker B:Look at the rock.
Speaker A:Right, right.
Speaker A:And a lot of that is the estrogen levels that have crept up over time, giving them, like, those feminine attributes.
Speaker A:So.
Speaker A:And I've told the story before on the show, and I know you've heard it, but I'll tell it for those who haven't heard it before.
Speaker A:So you get an astrodol at some point in time to.
Speaker A:It's a natural estrogen blocker.
Speaker A:Then you just take zinc as a supplement, use about 50 milligrams and Astrodol and zinc will work as a pretty healthy estrogen blocker for most men.
Speaker A:That's all you need.
Speaker B:Okay.
Speaker A:Right.
Speaker A:You don't even need an astrol in some cases.
Speaker A:You just take the zinc as a natural testosterone blocker.
Speaker A:You know when you hear about guys, like, really angry and like, rage roiding out.
Speaker A:Yeah, yeah.
Speaker A:That isn't testosterone.
Speaker A:That's their estrogen level spiking up too high.
Speaker B:That's.
Speaker B:Isn't that crazy?
Speaker A:Estrogen, Right.
Speaker B:That got that stigma, got put on testosterone for so long.
Speaker A:Exactly.
Speaker A:Everyone's like, oh, my God, testosterone is not I'll kill you.
Speaker A:It's the estrogen response that'll kill you.
Speaker A:That's where all the bad effects come from.
Speaker A:And then you sit there and you think to yourself, wait a minute, women naturally have volatile levels of estrogen.
Speaker A:And you're like, no wonder why.
Speaker A:But even then, I was.
Speaker A:I didn't fully appreciate it.
Speaker A:Peaky blinders.
Speaker A:You remember this conversation?
Speaker B:Yeah, yeah, yeah, yeah.
Speaker A:First shot of testosterone I get home that day, first night, I feel like this euphoria in my brain.
Speaker A:I feel like I'm high.
Speaker B:Yeah.
Speaker A:Like it Just.
Speaker A:It was just the dopamine, like, flowing to my brain in a way that I. I had not felt in so long because I had like a 369 testosterone level.
Speaker B:It felt good too, right?
Speaker A:It felt good, but it was scary good.
Speaker A:Like drug good.
Speaker A:Like, is my brain gonna explode Good.
Speaker A:Like, it was just like you.
Speaker A:It was a weird euphoria.
Speaker A:Wow.
Speaker A:Yeah.
Speaker A:Like, it was weird, but then.
Speaker B:And there's no controlling it.
Speaker A:No, I mean, the moment.
Speaker B:I don't know what's going on in men.
Speaker B:Did you put two and two together immediately?
Speaker B:This.
Speaker A:No.
Speaker B:Did they.
Speaker B:Did they warn you about it?
Speaker A:They.
Speaker A:They told me that I would have.
Speaker A:I would likely have to come back and get an astral at some point in time.
Speaker A:But they wanted to see how my body responded to testosterone, what my estrogen levels were at.
Speaker A:So I got tested pretty regularly when I first.
Speaker A:Now I get tested every quarter.
Speaker A:Oh, okay.
Speaker B:I remember you were doing.
Speaker A:I did it monthly.
Speaker A:I did it monthly for the first.
Speaker A:For the first three months and then the first.
Speaker A:So the first time I got.
Speaker A:I got it done.
Speaker A:I got tested a week afterward after the first injections, and then it was the month afterward.
Speaker A:And then a monthly from there.
Speaker B:Yeah.
Speaker A:And then I finally settled into a quarterly basis.
Speaker A:But I've actually been creeping down on dosages.
Speaker A:But then I started watching Peaky Blinders.
Speaker A:I was oddly emotional during a non emotional scene.
Speaker A:Like, I was bawling.
Speaker A:Yeah.
Speaker A:Like, I was like the whole like Adam's apple, like, flexing thing.
Speaker A:Like the eyes, like, you know, the lips, the whole thing.
Speaker A:Right.
Speaker A:My wife's like, what the fuck?
Speaker A:It's a gun shootout scene.
Speaker A:What's wrong with you?
Speaker A:Right.
Speaker B:Yeah.
Speaker A:And I'm going through it.
Speaker A:He's got kids.
Speaker A:But I'm like, I had to.
Speaker A:I stopped myself.
Speaker A:And I'm like, this is.
Speaker A:This is.
Speaker A:This is not.
Speaker A:No.
Speaker A:Wow.
Speaker A:This is not.
Speaker A:No, no, no, no, no.
Speaker A:I go upstairs, I'm having hot flashes.
Speaker A:Right.
Speaker B:I'm like, what the fuck am I. Yeah, be careful.
Speaker B:Guys out there that are listening to this and now feel like you have an explanation to.
Speaker B:I don't go.
Speaker B:Don't go home.
Speaker B:And the next argument, be like, honey, this is your estrogen speaking.
Speaker B:This isn't really.
Speaker A:Yeah, don't do that.
Speaker A:I've done that.
Speaker A:Yeah, baby, I know it.
Speaker A:I've been in.
Speaker A:I felt it.
Speaker B:I know what this is.
Speaker B:I know this really isn't you right now.
Speaker A:Yeah.
Speaker A:And then I wore it.
Speaker A:I knew that I had to go to the doctor the next day when I was Taking a shower and I was facing the water and I had nipple sensitivity and I couldn't take a shower facing the water.
Speaker A:My nipples hurt so damn much from the water hitting it.
Speaker A:I was like, ah, what the is?
Speaker A:I was at the doctor the next day and I explaining all these symptoms.
Speaker A:Imagine me as a man explaining this.
Speaker B:That's got to be hard.
Speaker A:It was awkward, dude.
Speaker A:It was super awkward.
Speaker A:And he's like, oh, why are you in today?
Speaker A:I'm like, I think I'm going through menopause.
Speaker A:That was.
Speaker A:That was a conversation.
Speaker A:But once you go through that once, it gives you an appreciation for how chemicals really do change how you think.
Speaker A:But this is where it gets really weird, right?
Speaker A:Men today carry less average testosterone than men from every previous generation.
Speaker A:It's kind of stepped down in a tiered way.
Speaker A:What do you think the biggest culprit.
Speaker B:Of that is, though?
Speaker A:I think our testosterone and chemicals are changing because the chemicals we put into our body and the chemicals we put into our body are food.
Speaker B:Yeah.
Speaker A:Our environment.
Speaker A:I think all the chemicals that are around.
Speaker A:So there's a.
Speaker A:Interesting book that came out.
Speaker A:It was also on the Rogan.
Speaker A:Guest and I went down the rabbit hole.
Speaker A:This woman who came from the Pacific Northwest tried to link serial killers to high exposure to lead, which is shown to make people more aggressive.
Speaker B:Oh, okay.
Speaker B:Yeah, I think I remember this.
Speaker A:And at the time when they were making unleaded gasoline, they could have done it with.
Speaker A:With other additives besides lead, but those would have fallen under patents and trademarks.
Speaker A:So they went under something that was more profitable for them.
Speaker A:And as a result, unleaded gasoline became what it is today.
Speaker B:Leave it to capitalism.
Speaker A:But they knew there was potential issues with lead causing more aggression in society.
Speaker A:Yeah.
Speaker A:So there's real impacts there.
Speaker A:How do we get this topic again?
Speaker A:How do we get here?
Speaker B:Yeah, how do we get here?
Speaker A:Oh, God of war.
Speaker A:So Rajeel and I were in Hawaii auditioning for God of War, and.
Speaker B:Yes, Hawaii.
Speaker A:We just thought that the two of us had a better chance about you being there.
Speaker A:I. I see.
Speaker B:Because we both slimming down.
Speaker B:He's withering away, bro.
Speaker A:Yeah, he's under 220 now.
Speaker A:218, baby.
Speaker B:Yeah, 218 now.
Speaker B:Good, man.
Speaker B:Dude.
Speaker B:Yeah.
Speaker A:Good work.
Speaker A:I don't know if you notice this, Virgil, but every time I see you, I feel you up.
Speaker B:Just.
Speaker B:Yeah, just get copper.
Speaker B:Feel.
Speaker A:I just want to know progress.
Speaker B:You lifting Regil?
Speaker B:Not yet, man.
Speaker B:Not yet.
Speaker A:This is where.
Speaker A:This is where you and I got a peer pressure in the healthy Way.
Speaker B:Okay.
Speaker A:Yeah, yeah.
Speaker A:I'm all about you testing it out and getting, getting straight, but you gotta lift weights if you're gonna be on a GLP1, you just gotta do it.
Speaker B:You have to.
Speaker B:Yeah, because I think what they said for the people that are, that lose their weight without lifting While being on GLP1, they say approximately 50 of the weight that you lose is muscle because.
Speaker A:You'Re not eating, number one.
Speaker A:If not, you're not eating a whole lot.
Speaker A:Number two, it slows down your metabolism, carbohydrates my understanding of it, and it just becomes such like a tertiary thing for you just not eating it.
Speaker A:When I first started on the, on the normal dose before we down to the microdose, it was really hard just to eat enough to like carry protein.
Speaker A:Yeah, yeah.
Speaker B:The mind, the mind pump.
Speaker B:Guys, do yourself a favor and go listen to them.
Speaker B:They did a full breakdown on this and how to send the right signals to your body to let your body know, hey, I need these muscles.
Speaker B:Keep these, don't lose these.
Speaker A:Yeah, I haven't figured that out yet.
Speaker A:Yeah, I'll get there eventually.
Speaker B:Yeah.
Speaker A:All right, we need to go on.
Speaker A:This is a financial literacy podcast and I feel like we're all pretty literate on how to lose weight.
Speaker A:Let's go to the applications on the refinance of home loan and then I'll finish this off and then what we'll do is we'll dive into my buddy Mark Zandy here.
Speaker A:Applications to refinance A home loan jumped 58 last week compared to the previous week and we're 70 higher than the same week one year ago.
Speaker A:According to the Mortgage Bankers association, seasonally adjusted index refinance share of mortgage activity increased to 59.8% of total applicants from 48.8% the previous week.
Speaker A:This as the average contract rate for the 30 year fixed rate mortgages with conforming loan balances of 806, 500 as we talked about earlier or less, decreased from 639 to 639 from 649 with points falling to 0.54 from 0.56.
Speaker A:People buying down the mortgage rates, including the origination fee for loans with a 20 down payment.
Speaker B:I think this is really telling, man.
Speaker B:I think this is telling a lot that people are like scratching and clawing for any bit of relief they can get.
Speaker B:Yeah, I, I think about that.
Speaker A:I'm very concerned.
Speaker A:I mean, when I, when I talk about those bubbles, I'm not even being sarcastic.
Speaker A:I mean, if you have.
Speaker B:A 10 basis point cut in rates and they're like, yeah, it ticks up.
Speaker A:Yeah.
Speaker A:And then I also think that the FOMC is being a little bit disconnected.
Speaker A:I'm all for.
Speaker A:You need younger people and I know someone's going to get pissed off.
Speaker A:I'm not an ageist, okay?
Speaker A:You need younger politicians, you need younger FOMC people.
Speaker A:Okay?
Speaker A:You need people with an understanding, protective.
Speaker A:Jerome pal today in the meeting said that AI hadn't taken meaningful jobs yet.
Speaker A:No shit, Sherlock.
Speaker A:Thank you for your words of wisdom.
Speaker B:Okay, but will it.
Speaker A:And that.
Speaker A:That's the disconnect if you've used AI.
Speaker A:Okay.
Speaker A:Nano Banana, baby.
Speaker B:What's the.
Speaker B:I have no idea.
Speaker B:Nano.
Speaker B:Nano banana.
Speaker B:You know Nano banana?
Speaker A:No, I don't know.
Speaker A:I know.
Speaker B:Chicken Banana.
Speaker B:Chicken Chicken banana.
Speaker A:Chicken banana.
Speaker A:Yeah.
Speaker A:And chicken jockey.
Speaker A:Google Nano.
Speaker A:Nano banana.
Speaker A:N A, N O.
Speaker A:Second word.
Speaker A:Banana.
Speaker B:Spelled banana.
Speaker B:Sorry.
Speaker B:Nano banana.
Speaker B:This is some.
Speaker A:What.
Speaker A:It's a new AI model for imaging.
Speaker B:Oh, for imaging?
Speaker A:Yeah, it's Google's model.
Speaker B:Oh, Google's model.
Speaker A:Okay, so Google's model for imaging, Nano Banana has been spectacular.
Speaker A:Now I have followed imaging models, video models.
Speaker B:Is this the one?
Speaker B:I saw some, some content online where they had.
Speaker A:Oh, this is Art list.
Speaker A:This is, this is my.
Speaker B:Like a movie playing and they drop an image in and it just takes that whatever product that is and incorporates, incorporates it into the video.
Speaker A:You can do that with veo, you can do that with Adobe Firefly.
Speaker A:You can do that with Nano Banana.
Speaker A:Nano Bananas are probably the most.
Speaker A:That's the newest one and probably what I would call the most technologically proficient one.
Speaker A:But what I.
Speaker A:What my whole point, bring these up is, is that chat GPT1 to chat GPT4 has not been that long.
Speaker A:Okay, but the leaps from chat GPT4 to chat GPT5, not super sensational, but the leaps from a learning language model to image creation and video editing models are huge.
Speaker A:Yeah, that happened really, honestly, in the course of less than a year.
Speaker A:It was released to the public in less than a year.
Speaker A:Can you can imagine how quickly it happened internally?
Speaker A:Yeah.
Speaker A:So I look at the scale of AI's growth and think to myself, it's like a hockey stick.
Speaker A:If you think that you haven't seen a lot of lost jobs.
Speaker A:Now, that's because you haven't seen the impact of AI yet.
Speaker A:Okay.
Speaker A:Once you get past regulation, you get past socks, control, Sarbanes, Oxy controls, and these large corporations for, you know, you got to have due diligence, sock.
Speaker A:You got to have controls in place for for monitoring.
Speaker A:But once you get past that, I.
Speaker B:Think companies and corporations out there really just want to see, you know, where they can start implementing these jobs in a way to where it's long term.
Speaker B:I'll make this easy.
Speaker B:It's effective.
Speaker A:Okay.
Speaker A:I'll make it super easy.
Speaker A:Okay.
Speaker A:You're gonna get to the point where you say, I have a call center of people, and I'm gonna come to you with an AI model and say, fire them all.
Speaker A:You're gonna be like, what?
Speaker A:Fire them all.
Speaker A:Your number will now call the AI model.
Speaker A:The AI model will respond.
Speaker A:What voice do you want it to have?
Speaker A:Do you want to have an accent?
Speaker A:You can already do much of this now, by the way, right?
Speaker B:Yeah, but I think that.
Speaker B:And my point is, I think companies and corporations out there are going to want to wait to see if other companies do it as well, because I don't know if anybody's like me.
Speaker B:I got to speak to a real person.
Speaker B:I'm not.
Speaker B:I don't want to speak to an AI.
Speaker A:No, no, no, no.
Speaker A:You're missing it.
Speaker A:I have learned.
Speaker A:I've used one of these.
Speaker A:So this is not me pontificating.
Speaker A:Okay.
Speaker A:I have used this model.
Speaker A:I did not know I was talking to AI And I'm talking.
Speaker A:Not a text chat bot, like a real conversation.
Speaker A:Talking back.
Speaker A:Conversation AI.
Speaker B:Really?
Speaker A:Yeah.
Speaker A:The only way I knew it wasn't AI is whoever.
Speaker A:I think they accessed Meta's database.
Speaker A:But, I mean, the only way you.
Speaker B:Knew it was AI.
Speaker A:Yeah.
Speaker A:No, I did not.
Speaker A:Yeah, I'm sorry.
Speaker A:The only way I knew it was AI was.
Speaker A:What's the guy's name from Keen?
Speaker A:Peel.
Speaker A:Not Jordan Peele.
Speaker A:The other one.
Speaker A:Oh, Keegan Michael Key.
Speaker A:It sounded like Keegan Michael Key.
Speaker A:Oh.
Speaker A:But it was a.
Speaker A:So I think they tapped into somehow Meta because Meta uses him as one of the voices.
Speaker B:Yeah.
Speaker A:Yeah, but it sounded.
Speaker A:I mean, I did not know I was talking AI.
Speaker A:I mean, it was that good.
Speaker A:It was responsive.
Speaker A:It was clear.
Speaker A:It was concise.
Speaker A:I mean, I was on a T1 connection.
Speaker A:I was.
Speaker A:I was pretty.
Speaker A:Pretty fast Internet.
Speaker A:But at some point in time, call centers go.
Speaker A:This whole India call center, Filipino call center.
Speaker A:All that stuff that some people get frustrated with, you know, My wife's Filipino, so I have no problems.
Speaker B:Do not read the gift cards.
Speaker A:Yeah, all that stuff, like any call center, that's all gone.
Speaker A:All gone overnight.
Speaker B:Yeah.
Speaker A:Yeah.
Speaker A:Right.
Speaker B:Problem solved.
Speaker A:You pay for one.
Speaker A:I'm going to keep in mind that there's a whole infrastructure cost to run this from an Energy perspective.
Speaker A:The question is, is how do you ensure that data is secure?
Speaker A:You know, how do you ensure that there's a consistency in how it responds?
Speaker A:Even now I get weird responses from AI.
Speaker B:That's it.
Speaker B:Right?
Speaker B:The consistency.
Speaker A:But you're, you, you are dangerously close to that.
Speaker A:And then when you think about that context, then it's not like, okay, this small department over here is gone.
Speaker A:A small department over there.
Speaker A:You're talking like loan servicing departments at banks, gone.
Speaker A:Your customer service call center for an automotive dealership, gone.
Speaker A:You're talking any place Apple tech support, gone.
Speaker B:Yeah.
Speaker A:And then you start going, okay, wait a minute, let's take this up the next notch.
Speaker A:Okay?
Speaker A:Now that those, those are all in place, right.
Speaker A:And the people that you don't normally see but you talk to on the phone.
Speaker A:Okay.
Speaker A:Right.
Speaker A:Then you go, okay, do I really need somebody in a physical store to sell a product?
Speaker A:What's your job at Apple site is?
Speaker A:Tell me how this product works.
Speaker B:Yeah.
Speaker A:If I can just ask AI how it works, what do I need you for?
Speaker B:True.
Speaker A:Right.
Speaker A:You've been to an Apple store.
Speaker A:They don't have much product on this.
Speaker A:You grab your product and even now you can walk in with your phone, scan the QR code, pay for it, not even talk to anybody.
Speaker A:I did that the other day.
Speaker B:Yeah.
Speaker B:So there's something about that, though, that I'm not willing to.
Speaker A:For you.
Speaker B:For me?
Speaker B:Yeah, yeah.
Speaker B:It's gonna take.
Speaker B:I just think it's.
Speaker B:Yeah.
Speaker B:My kids are different, right?
Speaker B:They're.
Speaker B:They're growing a different generation.
Speaker B:They could just become accustomed to it, which they are.
Speaker B:It's already being taught in school.
Speaker B:But for me, I get a.
Speaker B:If I'm talking to a machine, I don't know if I'm being sold.
Speaker B:Right.
Speaker B:Or what are the pitfalls.
Speaker A:I'm being sold.
Speaker A:Let me give you two scenarios right now, okay?
Speaker A:Assuming the AI could speak back to you clearly, right.
Speaker A:Which I think is a thing.
Speaker A:Yeah, yeah.
Speaker A:Two choices.
Speaker A:All right?
Speaker A:You walk into McDonald's, you have somebody behind the counter.
Speaker A:What would you like, sir?
Speaker A:Would you like fries with that?
Speaker A:Yeah, yeah.
Speaker A:Normally McDonald's experience.
Speaker A:Right, right.
Speaker A:Or you walk up to the AI register and say, hey, I would like X, Y and Z.
Speaker A:And they go, okay.
Speaker A:Would you like fries with that?
Speaker A:No, thank you.
Speaker A:Okay.
Speaker A:Scan your card.
Speaker B:Yeah, we're talking about entry level positions, right?
Speaker A:Look, call it what you will.
Speaker A:Yeah.
Speaker A:Is.
Speaker A:Is which experience do you prefer?
Speaker B:No, be honest.
Speaker B:No, but that.
Speaker B:In that model, they already have that.
Speaker B:Right.
Speaker B:Where they got the kiosk.
Speaker A:Yeah, but you come in, you push buttons.
Speaker A:The pushing buttons is the friction.
Speaker A:But if you could remove the friction and just say what you wanted to it done and you get a little bit of AI, like, you know, personality built into it.
Speaker A:Yeah, I mean, that's a game changer.
Speaker A:It's done.
Speaker B:Yeah, we already got the wife and I, a couple months ago, we went to a shabu shabu restaurant.
Speaker B:You got the little robots come back and forth with your meat.
Speaker B:Now imagine if you have a waiter, right, AI, I can get comfortable with that.
Speaker B:They're always coming at the worst time, asking you, how's your meal going?
Speaker B:As I'm like, food in my mouth.
Speaker B:I'm like, yeah, come on, man.
Speaker B:Time it better.
Speaker A:Yeah, it's a real thing.
Speaker A:I'm telling you that.
Speaker A:So I think all of this comes down to.
Speaker A:I think that writing off AI is not having much of an impact yet is wildly naive because.
Speaker A:Why is the mag 7 so high then, Chief?
Speaker B:Well, that was what the report from MIT said, right?
Speaker B:That we, we went over a couple episodes ago.
Speaker B:Like 95 of the companies that have invested in generative AI aren't really seeing a profit or return from it right now.
Speaker A:Yet.
Speaker B:Yet.
Speaker A:But I, I've seen what it's capable of doing.
Speaker A:I've seen Illustrator.
Speaker B:So you're, you're a believer that we're not in an AI bubble.
Speaker A:Wow.
Speaker A:Okay, so that's a loaded question.
Speaker B:I know.
Speaker A:I, I think there's always going to be hype around stuff like this.
Speaker A:There's always going to be people who are like, going to try to skirt the system.
Speaker A:Like the guy who had a Filipino call center, Philippines based call center for an AI company, and he was having people do all the work and calling it AI.
Speaker A:He got in trouble for that.
Speaker A:I get, I get all that.
Speaker A:There's always gonna be that element of it.
Speaker A:No, I do think that what scares me is, unfortunately, I don't think that it's all hype.
Speaker A:I think that the bubble is valid on some level, that it is that revolutionary of a technology.
Speaker A:Unlike the Internet.
Speaker A:The Internet was a revolutionary technology, but it just deployed.
Speaker A:It deployed better, but it took such a long progression.
Speaker A:The Internet.
Speaker A:So, for example, start off with email, but we had friction in that system that was meaningful.
Speaker A:Right.
Speaker A:Slow response time, dial up this.
Speaker A:I'm not sure I'm comfortable with this new technology.
Speaker A:It didn't feel the same.
Speaker A:It was, it was, it was changing everything.
Speaker A:Then everybody had to figure out how to deploy their product into these systems that people could access.
Speaker A:But there was all this hesitation.
Speaker A:Now we're all plugged into these ecosystems.
Speaker A:AI isn't a front.
Speaker A:It isn't an interface for me to work through.
Speaker A:If in a frictionless society, A.I.
Speaker A:i'm not even supposed to know A.I.
Speaker A:is there.
Speaker A:Yeah.
Speaker A:The websites, the social media, the companies I call, they're all the same.
Speaker A:It's the AI behind the scenes.
Speaker A:Which means my adoption is not my adoption.
Speaker A:It's your company's adoption that I just acclimate to.
Speaker A:Right.
Speaker A:So with the Internet, I had to be willing to go online.
Speaker A:I had to be willing to go into this new frontier.
Speaker A:This frontier is coming to you whether you want it to or not.
Speaker A:Right.
Speaker A:So I don't think that it's overhyped by people who have a deployment methodology.
Speaker A:Right.
Speaker A:If you're meta and you're going all in.
Speaker A:Yeah, I get it.
Speaker A:But if you work for meta and they're going all in, you should be going, shit, they're not paying dudes $100 million because they want to keep you at $250,000 a year.
Speaker B:Yeah, Facts.
Speaker A:Okay?
Speaker A:That's where that's coming from.
Speaker A:It's coming from you, Doc.
Speaker A:Right.
Speaker B:It's true.
Speaker B:That's a good point.
Speaker B:But it's interesting too, because we talked about it.
Speaker B:Like the Mag 7.
Speaker B:That's propping up the entire stock market right now.
Speaker A:Right.
Speaker B:And now you could say that.
Speaker B:I think values.
Speaker B:There.
Speaker B:There's an.
Speaker B:You know, there's is inflation in the.
Speaker B:In an asset bubble right now.
Speaker B:Right.
Speaker B:Overall, with a rate cut and more rate cuts to come, I can only see this melting up even higher.
Speaker A:Well, that's the problem.
Speaker A:If it does.
Speaker A:If it does continue to go up higher, the question remains.
Speaker A:Well, I don't think you even know.
Speaker A:That was a Segway, bro.
Speaker B:I know what I'm doing.
Speaker A:I don't think you know that was I.
Speaker B:300 episodes in.
Speaker B:You don't think I know what I'm doing?
Speaker A:You've been here for a minute.
Speaker B:300 episodes.
Speaker B:You don't think I know what I'm doing?
Speaker A:This from Mark Zandi, the Homie Zaddy.
Speaker A:There is an uncomfortably high 48% probability the U.S. economy will suffer a recession in the next 12 months.
Speaker A:I know that says 48%.
Speaker A:The.
Speaker A:The market bulls out there gonna be like, Chris, there's still a 52% probability there won't be.
Speaker A:Which is more than half.
Speaker B:Yeah.
Speaker A:That means my odds are better than worse.
Speaker B:It's a coin flip, bro.
Speaker A:It's a coin flip, but it's 2% better.
Speaker B:Yeah, yeah.
Speaker A: on't know why it sound like a: Speaker B:Yeah.
Speaker A:But.
Speaker A:And I'll tell you right now that that's patently false for the end of this statement.
Speaker A:So stay tuned to the end of what Mark Sandy.
Speaker A:He says here that's according to Moody's recently unveiled leading economic indicator derived using a machine learning algorithm on our extensive databases.
Speaker A:Okay.
Speaker A:Easy to say, Chris.
Speaker A:Now you're telling me there's a 52% probability there not being recession with a brand new model that hasn't been tested.
Speaker A:Kick rocks.
Speaker A:Okay, this is horseshit.
Speaker A:Yeah, yeah.
Speaker A:All the guys on X are going nuts on me in the DMs saying you're full of shit.
Speaker A:Why are you reposting Zaddy?
Speaker A:I bet you love him.
Speaker A:A, I do love him.
Speaker A:And B, let me go on.
Speaker A:Right.
Speaker A:Okay.
Speaker A:It's less than 50%.
Speaker A:Yes.
Speaker A:But historically the probability has never gotten this high and a recession have not occurred.
Speaker A:If you go back, take all the old data and pass it through this new model, that means this model has been used on all data they have going backwards.
Speaker A:A recession has never happened when this probability got this high.
Speaker A:Never happened.
Speaker B:But this is the problem I think most people have with stuff like this.
Speaker B:It's a.
Speaker B:This is all off a technicality.
Speaker A:Never not happened.
Speaker A:Never not happened.
Speaker B:This is all.
Speaker B:This is all off a technicality.
Speaker A:Right.
Speaker B:Whether you label it a recession or not, bro, I'm feeling it every month.
Speaker B:I feel like I'm in a recession.
Speaker B:Forget what the rest of the world's doing.
Speaker A:90% of people who spend money.
Speaker B:Yeah.
Speaker A:Aren't spending the money that they used to spend.
Speaker A:It's only 10% that are spending 50% of the money that's out there.
Speaker A:Right.
Speaker A:Propping up the economy.
Speaker B:Yeah, exactly.
Speaker B:So it's like, okay, let's just say Mr. Zandy's right.
Speaker B:You know, it's like, okay, please.
Speaker A:Zaddy.
Speaker B:Zaddy.
Speaker B:Yeah.
Speaker B:Zaddy.
Speaker B:Zaddy's right.
Speaker B:He's probably right.
Speaker B:You know, But I don't need for him to be right for me to feel like I felt.
Speaker B:I felt the pinch for the greater portion of the last year and a half, two years.
Speaker A:Right.
Speaker B:That we've been talking about.
Speaker B:So.
Speaker B:And I think.
Speaker B:I think we will see a recession.
Speaker A:Yeah.
Speaker A:But the thing that everybody keeps asking, and I don't have an answer for it, is what is the catalyst for that?
Speaker A:What is the catalyst for a session?
Speaker A:Housing pundits will sit here and tell you.
Speaker A:Logan over at Housing Wire will tell you all day long that this is A supply shortage.
Speaker A:This doesn't get fixed without additional supply coming on the market.
Speaker A:Right.
Speaker A:To which I would say, okay, then why is it cheaper to buy a new home now than an older pre existing built home?
Speaker A:Why is that happening?
Speaker B:Why is that happening?
Speaker A:He'd say, oh, shortage of supply.
Speaker A:And I would say, no, you got fundamentals in the market that are out of whack.
Speaker A:Doesn't make sense.
Speaker B:It really doesn't make sense.
Speaker A:Unless you're buying Ferrari.
Speaker A:And the Ferraris, the older one is classy.
Speaker B:Yeah.
Speaker A:Vintage, well kept.
Speaker B:Right.
Speaker A:Low mileage.
Speaker A:New ones.
Speaker A:Those are for show offs.
Speaker B:They are, right?
Speaker A:Yeah.
Speaker B:You got to be part of the club.
Speaker A:Yeah.
Speaker A:Fun fact.
Speaker A:We are at the widest delta between, between rental costs to cost to rent a home and the cost to buy a home.
Speaker A:We are at the widest gap ever in history.
Speaker A:It is way more expensive to buy than it's ever been in history compared to renting.
Speaker A:Wow.
Speaker A:Yeah, that's a fun one.
Speaker A:That's just top of the dome.
Speaker A:You just add that I got stats.
Speaker B:All day long and because what we always said, if it makes sense, when it makes sense to buy a home is when it's, you know, it's cheaper to buy.
Speaker A:So I, this entire series of conversations and frankly leading the FOMC meeting, it all came from this one money wise article that I want to spend some time talking about tonight.
Speaker A:I think this article is really reflective a lot of things that we've spoken about and I've got some, some excerpts from this that I think really tell the, the tale of, of how the consumer is feeling.
Speaker A:It's going to sound sensational and it's.
Speaker A:Because it is sensational.
Speaker A:This does mean that we were right.
Speaker A:Yeah, I want to throw that out there.
Speaker A:This is, this is me certainly patting me in the back and patting you in the back.
Speaker A:We're Jill, you in the butt and us celebrating the W. Okay.
Speaker A:Because, and I'm not saying this from an arrogant way, I know I'm being sarcastic here, but I'm saying this in the context of we've all felt a certain way financially that I think that the market tells us, oh, you're silly for feeling that way.
Speaker A:You know, it's, it's, it's crazy that you think that the economy's in a bad place because look at the Mag 7.
Speaker A:Look at the S P Gold's at all time high.
Speaker A:Bitcoin's at all time high.
Speaker A:Everybody's at all time high.
Speaker A:Chris, why are you feeling all salty about the economy?
Speaker A:Well, because according to money wise, 38 of Americans have taken on jobs to cover debts.
Speaker A:How the rise of the reluctant hustler is rewriting careers rewiring.
Speaker A:Yeah, yeah, I probably should be able.
Speaker A:You know what, that's hurtful.
Speaker A:No, no, no.
Speaker A:I was let that one go.
Speaker B:No, I couldn't.
Speaker B:It was going to be on the screen.
Speaker A:They.
Speaker A:I would have controlled the screen.
Speaker A:No, I would have literally whited it out.
Speaker A:Nobody would ever seen it.
Speaker A:Damn it, rail.
Speaker B:You don't like it.
Speaker B:You don't like it when I next.
Speaker A:Show you're in the seat.
Speaker B:Yeah.
Speaker B:You don't like when I correct him.
Speaker A:A new survey from an AI Powered career platform z.
Speaker A:Never heard of it.
Speaker A:Found that 38 of respondents have taken on side gigs or second jobs to make extra money and keep up with their debt.
Speaker A: The online poll of: Speaker A:Granted, a smaller poll was conducted by polefish.
Speaker B:Yeah, I know a lot of people that, that, this, that can relate to this.
Speaker A:I don't know anybody who doesn't have a side hustle in their family.
Speaker A:Yeah, right.
Speaker A:Yeah.
Speaker A:This trend also lines up with other data about the labor market.
Speaker A: jobs steadily increased from: Speaker A:Seems like a pretty good resource to me.
Speaker A:After a dip during the pandemic, those numbers have bounced back to record levels.
Speaker A:The dip was largely response to the fact that everybody got stemis.
Speaker A:They didn't feel the pressure to work.
Speaker A:Now they do.
Speaker A:And this rise inside hustles isn't slowing down.
Speaker A:A Harris poll for the American staffing association found that more than 6 in 10 employed U.S. adults say they're likely to pick up extra work in the next year.
Speaker A:Oh, yeah, 60%.
Speaker B:Yes, that's true.
Speaker B:And what I don't know if this article goes on to talk about, I wouldn't be surprised if a big portion of this has to do with.
Speaker B:For a long time, remember, student debt repayments were on pause.
Speaker A:Yeah, it's a good question.
Speaker B:I don't know, you know, and I'm sure and given the fact that we look at, you know, household debts and people kept putting it off, kept putting it off, kept putting it off.
Speaker B:And I'm sure they weren't planning to start making those payments again.
Speaker B:They were promised that it would be forgiven.
Speaker A:Right.
Speaker B:Don't worry, it'll be taken care of.
Speaker B:And then sure enough, it wasn't.
Speaker B:And now look, the whole time we.
Speaker A:Were telling people it was unconstitutional for a lot of reasons.
Speaker B:And during that time, how Many people.
Speaker B:Look, look like how many people were buying homes, Right?
Speaker B:Qualifying.
Speaker B:Because now that debt payment isn't used against them.
Speaker A:Yep.
Speaker B:Dangerous game, bro.
Speaker A:Dangerous game.
Speaker A:And you were betting on the government telling the truth.
Speaker B:I don't.
Speaker B:I don't know.
Speaker A:That's a good idea.
Speaker B:Yeah.
Speaker A:UFOs are real, bro.
Speaker B:None of this is going to matter in a couple of years.
Speaker A:We all going to die.
Speaker B:It's okay.
Speaker B:We'll die together.
Speaker A:Don't look up.
Speaker A:Three Eye Atlas is coming.
Speaker A:Yeah.
Speaker A:Z's survey also found that most respondents are shifting their financial habits to manage debt and prepare for potential fallout from U.S. policy changes, I. E. Government doing what governments do.
Speaker A:Nearly four in five, 78% believe tariffs will make it harder to repay or avoid debt.
Speaker A:Yet the FOMC is almost downplaying that shit in their conference today.
Speaker B:Yep.
Speaker A:Like, what the.
Speaker A:If 78 of people are smart enough financially, and this is where we label society as dumb financially, we all know if companies are paying more for something.
Speaker A:Yeah, they're not gonna foot the bill.
Speaker B:No, no, no, Exactly.
Speaker B:They got people they need to answer to.
Speaker A:And yet 78 of Americans who responded to this survey know that.
Speaker A:But the FOMC is like, well, we haven't seen it yet.
Speaker B:Yeah, right.
Speaker A:Really, bro.
Speaker B:And they're just kicking the can down the road.
Speaker A:Debt isn't just pushing Americans towards side hustles.
Speaker A:It's also influencing work and career choices.
Speaker A: cted for the ASA in August of: Speaker A:And 40% of them said that their debt is influencing their career choices.
Speaker B:100%.
Speaker B:That's always going to be the case, though.
Speaker A:And I believe that number has changed way up, I think.
Speaker B:I think, yeah, I think it's significantly higher all during the time, unfortunately, when it's becoming harder and harder for people to find jobs.
Speaker A:Right.
Speaker A:And the job numbers that we have are wrong, admittedly so by the fomc.
Speaker A:The birth death ratio, which was part of the calculation, which we should go back into again for another episode.
Speaker A:We haven't done that in a while.
Speaker A:Is flawed.
Speaker A:The number of reporting in companies that are public go went from 60% down to 43%.
Speaker A:The ADP numbers are unpredictable at best.
Speaker A:The data here is just wrong.
Speaker A:It's just wrong.
Speaker A:And I will.
Speaker A:You know, Zero Hedge has been calling this out for the greater portion of several years now, like three or four years.
Speaker A:Just literally diving into granular detail.
Speaker A:And at first I was like, ah, it's Zero Hedge or, you know, not.
Speaker B:The Most reliable source, but like kind of conspiracy theory.
Speaker A:But you know, honestly, they have not missed on this topic.
Speaker A:On this topic.
Speaker A:On this topic.
Speaker A:They have not missed on this topic.
Speaker A:Some of the other stuff I haven't read.
Speaker A:Yeah, but it's, it's a wild world out there.
Speaker A:There's a lot of uncertainty.
Speaker A:And the most questions I get days are around, Chris, what happens next?
Speaker A:What's the catalyst?
Speaker A:Do you see a recession?
Speaker A:I don't know what the catalyst is.
Speaker A:Nobody knows what happens next.
Speaker A:Yes, I see a recession and no, this is not sustainable.
Speaker B:Yeah, I think we, we had talked about what trying to be careful here.
Speaker A:Oh, you look at you.
Speaker B:Yeah, we had talked about what I believe and I saw a piece on breaking points, what they believe could be the catalyst for the, you know, upcoming recessionary economy.
Speaker B:And they believe it's in large part going to be due to private equity investing.
Speaker A:I've seen that article, I've seen that commentary.
Speaker B:And it's, look, it's.
Speaker B:There's no secret.
Speaker B:And private equity invest.
Speaker B:They like a return on their investment just like any other company.
Speaker A:Right.
Speaker B:But unfortunately, if it's coming around a time when they can't turn that investment, then what happens?
Speaker A:Yeah.
Speaker A:So I think that the American populace generally, and we could do an entire episode on this, does not understand how many companies are being purchased or partially owned by private equity.
Speaker A:Yeah.
Speaker A:It is a monumental amount.
Speaker A:And we really only have the publicly traded company data to support this, but we could do an entire episode alone on what that looks like.
Speaker A:And having lived through it, I can say there's certainly some positives.
Speaker A:Not all private equity companies are created the same, but their goals are always the same.
Speaker B:Exactly right.
Speaker A:And their goals are generally not aligned with culture.
Speaker A:They're aligned for a window of execution on a profitability model.
Speaker B:There you go.
Speaker A:And generally speaking, feelings and emotions right out.
Speaker A:It's efficiency.
Speaker B:Yeah.
Speaker A:It's speed to market and it's return on investment.
Speaker A:That's it.
Speaker A:Everything else is just noise.
Speaker B:Yeah.
Speaker A:You know, and let me tell you right now, if you're in a call center and private equity is in there, they're going, how do I get these guys out of here and get this AI model in asap?
Speaker A:Right.
Speaker A:I need that in efficiency, speed to market, return on investment, which lowers their.
Speaker B:Operational costs, which ultimately props a value.
Speaker A:Yeah.
Speaker A:Because if you make more money and you have less expenses, then guess what, your multiple on your EBITDA earnings before interest, taxes, depreciation, amortization is higher.
Speaker A:Because that number is higher.
Speaker B:Yeah.
Speaker B:It's Very simple.
Speaker A:It's just math.
Speaker B:The maths.
Speaker A:You don't need to be higher though.
Speaker A:Site.
Speaker A:The number of subscribers to this show.
Speaker B:Honestly, you.
Speaker B:If you haven't done so already, you need to leave us a review.
Speaker B:I mean, you stuck around for an hour and 22 minutes and if you.
Speaker A:Did leave us a review and it wasn't a five star review, you could do like my friend here, CPT Engineer, and come back.
Speaker B:Oh boy.
Speaker A:And do the righteous thing.
Speaker B:Yeah, let's get.
Speaker B:Let's get into it.
Speaker B:We gotta hear CPT Engineer.
Speaker B:Thank you, Regil.
Speaker B:Phoenix Rising five stars from CPT Engineer.
Speaker A:Previous two star review.
Speaker A:Thank you.
Speaker A:By the way.
Speaker B:We covered it on the show and honestly appreciate you.
Speaker B:We didn't mean to call you up, but we kind of did.
Speaker A:No, no, look, he had.
Speaker A:He had.
Speaker B:I just.
Speaker A:I just appreciate the voice.
Speaker B:I felt like you didn't want to.
Speaker B:Okay.
Speaker B:But I was like.
Speaker B:I felt like in we.
Speaker B:It deserved an explanation and I thought a little bit of it was unfair.
Speaker B:And clearly CPT Engineer and I are eye to eye.
Speaker B:Like we get each other.
Speaker B:Like there's, There's.
Speaker B:There's love there.
Speaker A:But he didn't know.
Speaker A:And 90 of people who listen to the show, he.
Speaker B:He didn't.
Speaker B:How do you know?
Speaker B:You just assumed a lot right there.
Speaker A:No, he.
Speaker A:I don't think anybody.
Speaker A:Well, I haven't told the story of what happened at work and why and where I'm at today and what we're doing today.
Speaker A:I haven't and I haven't told that story and I probably won't until the.
Speaker A:At least we get through December.
Speaker A:Ish.
Speaker A:But.
Speaker B:Oh, I didn't know that.
Speaker A:Okay.
Speaker A:Yeah, Yeah.
Speaker A:I don't have any contractual reasons not to share, but I did have an employment agreement which I walked away from.
Speaker A:Hundreds of thousands of dollars included in that.
Speaker A:That I walked away from.
Speaker A:And a lot of stock that I walked away from.
Speaker A:But that contract would have expired in December.
Speaker A:So I'm going to honor the contract that would have been in place by choosing not to say anything until such time as that would have been expired.
Speaker B:All right, so this from CBT Engineer Phoenix Rising, five stars.
Speaker B:Fine.
Speaker A:No, he meant like Chris, you fine.
Speaker A:You fine?
Speaker B:Yeah.
Speaker B:After Chris's midlife career pivot, we see a refreshing version of a man no longer bound by his fiduciary responsibilities.
Speaker B:See, he knows like a man visited by the ghosts of Christmas past.
Speaker A:Jingle, jingle.
Speaker B:We see the transformation of a scaling corporate CEO to a more present family husband and ex CEO who can see the corporate world for what it really is and what truly matters.
Speaker B:Loving this new version of Chris.
Speaker B:It's like we.
Speaker B:He was sprinkled with a pinch of said.
Speaker A:I see.
Speaker B:I need to make the sexual.
Speaker A:Don't make that sexual.
Speaker A:Just.
Speaker A:Just how much?
Speaker A:Yeah, Read the rest of the statement.
Speaker B:Got a sprinkle on you.
Speaker A:That's the way he's talking about.
Speaker B:It's all bae.
Speaker A:That's what you talking about.
Speaker A:The Pope and the stick.
Speaker B:You got seasoned, bro.
Speaker B:You got seasoned salt.
Speaker A:BAE is out of business, by the way.
Speaker B:Also a great charter on the show, seeing him transform from the shy and reserve co host to now being more vocal.
Speaker A:Yeah, you were shy and reserved.
Speaker B:I was.
Speaker B:Yeah.
Speaker B:It was, it was, it was.
Speaker A:Hello, Tim.
Speaker B:Hey, yeah, Hello, Tim.
Speaker B:Goodbye, Tim.
Speaker A:Yeah.
Speaker B:Bringing his own topics and ideas while challenging Chris on some viewpoints is a great contrast to the dialogue on the show.
Speaker B:And although ODUN is missed, I see another star rising in Reil.
Speaker B:Keep kicking facts and bring the passion for financial literacy, my guy.
Speaker B:Thank you.
Speaker B:Yeah, you got a shout out, bro.
Speaker A:He didn't say negative about you.
Speaker A:You were reserved and quiet.
Speaker A:I was a corporate terrible.
Speaker B:Yeah.
Speaker A:Jill, just over here living life.
Speaker B:Yeah, I could.
Speaker B:I could feel the love.
Speaker B:But he had to get, like, a little jab in there.
Speaker A:Is it too late to tell you guys my real screen name is CPT Engineer?
Speaker B:You're just creating.
Speaker A:Creating controversy.
Speaker B:You created content for the show.
Speaker A:I'm like Kardashian.
Speaker A:Sex tape next week.
Speaker B:Hilarious.
Speaker B:Why do I see that happening?
Speaker A:No, it's not.
Speaker A:If you haven't checked out the live stream, go back, check it out.
Speaker A:I need some feedback on things we could better.
Speaker A:Obviously, you know, it was our first one, but we want to.
Speaker A:We want to come out with quality content.
Speaker A:So for those of you who did check it out or spend any time with it, if you want to shoot us an email mediahirstandard podcast.com and let us know what.
Speaker A:What you think we could change and improve on.
Speaker B:We recently posted on the Instagram stories how much we appreciate everybody.
Speaker B:Honestly, the support that everybody gives us is the reason that keeps us going.
Speaker B:We're not getting paid for this.
Speaker A:Oh, the newsletter, by the way.
Speaker A:Way.
Speaker A:How good is that now?
Speaker B:Yeah, the news clutch, man.
Speaker B:And it's.
Speaker B:It's.
Speaker B:Your love and support is really felt and we appreciate you.
Speaker A:For the record, there's like, thousands of listeners, right?
Speaker A:We're across all platforms.
Speaker A:There's thousands and thousands of listeners, and.
Speaker B:We'Re doing huge numbers.
Speaker B:Real huge, huge, huge, huge numbers.
Speaker A:The biggest you've ever Seen, Yes.
Speaker B:Some would say the best.
Speaker B:Some would say the best numbers.
Speaker A:That is not an endorsement.
Speaker A:It's just me doing comedy.
Speaker A:Okay.
Speaker B:We use comedy as a coping mechanism on the show.
Speaker A:Yeah, yeah.
Speaker A:So there is not a lot of subscribers to the.
Speaker A:To the newsletter.
Speaker A:And I will tell you, there is some value there.
Speaker A:People are like, well, you just shut out the new episodes.
Speaker A:No.
Speaker A:We also do some updates, talk about the.
Speaker A:The behind the scenes stuff.
Speaker A:We also talk about things you may have missed through the week.
Speaker A:There's an entire ecosystem that we're building attached to it.
Speaker A:The lives are part of it.
Speaker A:The.
Speaker A:The.
Speaker A:The vlogging's part of it.
Speaker A:We're going to do guests on Thursdays when they come up now, so you'll always get a consistent Tuesday show.
Speaker A:So there is an entire ecosystem we're putting together for you all.
Speaker A:Yeah.
Speaker B:Yeah, man.
Speaker B:Big stuff.
Speaker A:Jill, you want to show them what shirt you're wearing?
Speaker B:Oh, yeah.
Speaker B:I was about to pull out right now, and since the inflation hasn't hit yet, you should.
Speaker B:Guys should go get your t shirts now.
Speaker B:$20, Russ.
Speaker B:Steal.
Speaker A:Well, I'm not really.
Speaker A:I mean, we're not making any money on.
Speaker B:That's what I'm saying.
Speaker B:That's why it's a steal.
Speaker B:Where are you gonna buy a 20t shirt these days?
Speaker A:No, that's actually just for the small.
Speaker A:If you go to the.
Speaker A:Yeah.
Speaker A:If you go to the larger sizes.
Speaker B:Yeah.
Speaker B:It went up like $4.
Speaker A:It went up $4.
Speaker A:Yeah.
Speaker A:So we charge by weight.
Speaker A:Yeah.
Speaker A:So all the reason you should be in shape.
Speaker A:Okay, so go over to mind pump 5 XL.
Speaker B:We're offering 5 XL T shirts just in that.
Speaker A:So in this and the one that I'm wearing tonight, the anti guru guru club, the money shirt.
Speaker A:This one goes up to 3XL, which I've not ordered, but I'm wearing a 2XL.
Speaker A:I like the quality of these better.
Speaker A:These are a little heavier than the one where Jill got on.
Speaker A:These are.
Speaker B:We still got the jean jacket up there?
Speaker A:No, it discontinued.
Speaker B:Yeah, just when I was about to place my order.
Speaker A:I guess I'll get one for you if you want.
Speaker B:The jean jacket was.
Speaker B:That's.
Speaker B:It was where it was at.
Speaker A:Yeah, they're discontinued.
Speaker B:I actually does aid.
Speaker B:Have good genes.
Speaker B:Yeah.
Speaker B:I mean, look, I Look, I'm naturally at a 700 testosterone level without getting.
Speaker B:I mean, you're.
Speaker A:Got it tested?
Speaker B:Yeah.
Speaker A:Yeah.
Speaker A:Have you really?
Speaker A:Oh, yeah.
Speaker B:My last blood work.
Speaker A:700 really good for you.
Speaker A:I mean, so you've got no excuse for being fat.
Speaker B:Some of us are just out here.
Speaker A:Some of us are just, you know, the problem is sight.
Speaker A:As we discussed earlier in the show, strictly from a biological standpoint, the estrogen levels are.
Speaker A:What's your estrogen?
Speaker B:Yeah, that part I didn't.
Speaker B:I didn't seem to tune in on.
Speaker A:Yeah, yeah, yeah.
Speaker A:Are you in titty section or are you in.
Speaker B:I need some estrogen blockers, bro.
Speaker A:Yeah.
Speaker A:Do you milk yourself at night?
Speaker A:Yeah, yeah.
Speaker A:I'm really proud of.
Speaker A:Go.
Speaker A:Click on the let's be friends.
Speaker A:So for those of you who haven't subscribed to the podcast, the easiest way to do so is you go to the ths.
Speaker A:There's a screen that'll pop up automatically if you click in the bottom right hand corner with Jill.
Speaker A:There you go.
Speaker A:That's actually what comes up.
Speaker A:It gives you an opportunity to put your name in, put your email in, hit submit.
Speaker A:Also in my link in bio and across all social platforms, click on that.
Speaker A:The very bottom of that, it's just drop your email in, hit submit.
Speaker A:That's it.
Speaker A:You don't have to go to any extra pages.
Speaker A:Stay in the same ecosystem.
Speaker A:You stay in Instagram or TikTok, wherever you're in and just launch it right from there.
Speaker A:There's plenty of places to subscribe to the newsletter.
Speaker A:Do it.
Speaker B:Come on, let's be friends.
Speaker B:Compound with us.
Speaker A:We'll wait.
Speaker B:Yeah, come on.
Speaker A:If you're driving, pull over.
Speaker A:Do it.
Speaker B:Yeah.
Speaker B:If you're on YouTube, make sure you subscribe.
Speaker B:Hit that, like, button.
Speaker B:Ring that notification bell.
Speaker B:It really helps out the show and we greatly appreciate it.
Speaker B:Leave us a comment over on Spotify.
Speaker B:Five star ratings all around.
Speaker B:Brigil, you got anything else?
Speaker B:That's it.
Speaker B:Just go ahead and buy the.
Speaker B:Buy the shirts, guys.
Speaker A:Yeah, buy the shirts.
Speaker B:Buy the shirts.
Speaker B:All the shirts.
Speaker A:All the shirts.
Speaker A:Yeah.
Speaker A:One of each.
Speaker B:That's the plan.
Speaker B:I got two already or three now.
Speaker B:Three.
Speaker A:Although he complained all day, every day.
Speaker B:It took a while, but then.
Speaker B:Just trust process, bro.
Speaker B:It came from Nicaragua.
Speaker B:Yeah, we're going to leave that comment alone.
Speaker A:Yeah.
Speaker A:All right.
Speaker B:We're no Theo Bonds here.
Speaker A:All right, good night, everybody.
