The Fed's Latest Move: Why Markets Are About to Get Wild
In this episode, Chris and Saied break down the Federal Reserve’s latest rate cut, and let’s just say, it’s got everyone—from Wall Street to your wallet—feeling some kind of way. With a 25 basis point cut to the Fed Funds rate, inflation still refusing to play nice, and the bond market throwing a full-on tantrum, it’s clear: the Fed’s decisions are anything but boring. Oh, and don’t miss Chris’s hot take on how housing affordability has officially hit “you-can’t-make-this-up” levels of absurdity. Spoiler alert: the 10-year Treasury and your dreams of a lower mortgage rate aren’t on speaking terms.
➡️ From the VIX spiking a jaw-dropping 74% to why shrinkflation has you paying more for less Doritos, the duo dives into why markets have gone wild. Is the Fed’s “data dependency” just another way of saying “we’re winging it”? And what does this all mean for you, dear listener? Whether you’re a seasoned investor or someone just trying to figure out why eggs are still so damn expensive, Chris and Saied deliver insights with their signature blend of smarts and sass. Tune in for all the juicy details, and remember, it’s not the size of the rate cut—it’s how you use it!
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🧊 Get 12% off any purchase at Ice Barrel (Excludes chillers)
🔗 Resources:
Fed cuts rates by quarter point, scales back cuts for 2025 (Yahoo! Finance)
Summary of Economic Projections (Q4 2024) (The Federal Reserve)
The $VIX spiked 74% higher today (Charlie Bilello via X)
Where inflation is and isn't (Q4 2024) (Yahoo! Finance via Instagram)
Jerome Powell doesn't see the stag or the flation (The Kobeissi Letter via X)
⚠️ 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
All that stuff that was going around about the Jamie Foxx special on how he said in the special, he says.
Speaker B:That, oh, that was just him riding the wave.
Speaker A:That was literally him piggybacking off of the Diddy stuff.
Speaker B:Yeah.
Speaker B:Give everybody a reason to.
Speaker A:To tune in.
Speaker B:Yeah.
Speaker A:By the way, I tuned in.
Speaker A:It was great.
Speaker A:It was so good.
Speaker B:So wait, you just said that he did this so people would tune in.
Speaker B:I tuned in, and then you tuned.
Speaker A:In, and it was great.
Speaker B:And it was great.
Speaker A:It was great.
Speaker B:So you're endorsing.
Speaker A:I'm endorsing the Jamie Foxx special, yes.
Speaker A:I'm used to Jamie Foxx being funny all the time, and this took me on a roller coaster.
Speaker A:Wave of emotions.
Speaker A:It was so good.
Speaker B:Did he pay you for this promo?
Speaker B:Promo?
Speaker A:No, man, I love.
Speaker A:I just love Jamie.
Speaker B:No, I do, too.
Speaker B:He's a very talented man.
Speaker B:I mean, his musical skills, his acting skills, his comedic talent.
Speaker B:It's impressive.
Speaker A:It's impressive how he's able to be arrogant in an acceptable way where you're like, it's okay because he's Jimmy Foxx.
Speaker B:I mean, he has the talent to be arrogant, right?
Speaker A:No, but it's.
Speaker A:It's.
Speaker A:It's acceptable.
Speaker B:So as an example, I can't play volleyball for.
Speaker A:You can't say volleyball.
Speaker B:It's bad.
Speaker A:You can't say volleyball.
Speaker B:I can't.
Speaker B:I mean, I just.
Speaker B:The sport and I do not get along.
Speaker A:Right.
Speaker B:I cannot be arrogant about it.
Speaker B:Like, I'm tall, I'm athletic.
Speaker B:I should be able to do that.
Speaker A:You should be really good at it.
Speaker B:Yeah, I can't do it.
Speaker A:What do you think it is?
Speaker B:I just don't have the coordination.
Speaker B:I'm actually not a good basketball player either.
Speaker B:It's like an inherently learned skill over time.
Speaker A:What, you.
Speaker A:You think you developed that skill?
Speaker B:Apparently not.
Speaker B:I guess that's why I host a podcast now.
Speaker A:Welcome back to the number one financial literacy podcast in the world.
Speaker B:Not hard when there's only two of.
Speaker A:Them sitting next to me on my left.
Speaker A:Some may know him as the Jeff Goldblum of podcasting.
Speaker B:We're going old school.
Speaker A:Old school.
Speaker A:Yeah.
Speaker A:For the listeners that have been around long enough, they know.
Speaker A:Yeah.
Speaker A:Chris Nahibi.
Speaker B:That was on the very first episodes I did by myself.
Speaker A:You called yourself the Jeff.
Speaker B:The backstory here was, is that Ben Yang, AKA Ben Baller.
Speaker A:I can't get no introduction.
Speaker A:That's cool.
Speaker B:Sitting next to him.
Speaker B:All right, partner, in time, the one and only side, Omar, AKA the Fat Albert, podcasting.
Speaker A:Come on, man.
Speaker A:That's.
Speaker A:That was that guy you forgot.
Speaker B:He's not here anymore.
Speaker B:He's on paternity league.
Speaker B:Indefinite paternity league.
Speaker A:The Barry White of podcasting.
Speaker A:Also known aka Mr.
Speaker A:Uchi.
Speaker A:Wally.
Speaker A:Wally.
Speaker B:Mr.
Speaker B:Uchi.
Speaker B:Bang Bang.
Speaker A:Mr.
Speaker A:Uchi Bang Bang.
Speaker A:Thank you.
Speaker A:Yeah, thank you.
Speaker A:Out of the way and no one behind the ones and twos.
Speaker B:Yeah, he's not there anymore.
Speaker A:Yeah.
Speaker B:What's his name again?
Speaker A:We don't know.
Speaker B:I don't know.
Speaker A:It's here.
Speaker A:That one guy, the guy that was.
Speaker A:That used to be here, wasn't he.
Speaker B:On Fiverr that we got him.
Speaker B:He not only.
Speaker B:Not only does he not listen to the show, but like, when I like tag him on stuff now as a collaborator, he doesn't respond.
Speaker B:He doesn't.
Speaker B:He's.
Speaker B:He hasn't accepted one.
Speaker B:He.
Speaker A:Oh, he really.
Speaker B:Oh, yeah.
Speaker B:He doesn't repost our content.
Speaker B:Nothing.
Speaker A:Oh, bro, he wants a clean break.
Speaker B:He just.
Speaker B:He's like that.
Speaker B:It's.
Speaker B:No, no, it's not a breakup.
Speaker B:I just, I need some space.
Speaker B:And then he just went dark on you.
Speaker B:We've been ghosted.
Speaker B:The relationship's over.
Speaker A:It's over.
Speaker B:Yeah.
Speaker B:He doesn't.
Speaker A:Do we work him too hard maybe, but it's okay.
Speaker B:Anyway, so Ben Ballard used to do that on the show and he said, you know, have an intro and I was like, my homage to him because, you know, we pay homage to like.
Speaker A:You know, the mind pump guys with the panels.
Speaker B:Yeah.
Speaker B:So, you know, more than the panels.
Speaker B:The entire studio set up.
Speaker A:Oh, yeah, yeah.
Speaker B:The entire show.
Speaker B:Pretty much everything here belongs to Mind Farm.
Speaker B:Yeah, you get the point.
Speaker B:Right, so that came from that.
Speaker B:But okay, so wild day in the markets.
Speaker B:We'll get to that.
Speaker A:Big day.
Speaker A:It was Fed Day.
Speaker B:Yeah.
Speaker B:It was FOMC giving you the FFOMC today.
Speaker B:Ffom.
Speaker B:I can't spell.
Speaker B:Yeah, I've had a lot of caffeine.
Speaker A:Right.
Speaker A:They.
Speaker A:Big day for the fomc.
Speaker A:They had their meeting and they, they.
Speaker A:They made some decisions today.
Speaker B:So to give you perspective of the week, today is Wednesday the 18th.
Speaker B:On the first day of the week.
Speaker B:On Monday, we had S and P Global services.
Speaker B:PMI data came out.
Speaker B:Right.
Speaker B:Then on November, after our little apparatif there.
Speaker B:I'm sorry.
Speaker B:Then on Tuesday, we had the November retail sales data come out.
Speaker B:And then yesterday, Wednesday, the FOMC had the first day of the Fed interest rate discussion.
Speaker B:And then of course, obviously the decision came out today.
Speaker A:Right.
Speaker B:And the decision came.
Speaker B:As much as you and I were critical of it, you.
Speaker B:You felt that it was going to happen.
Speaker B:And I was very concerned that this was the first time I felt very uncomfortable.
Speaker A:Well, to your point, to give you a little bit of credit here, the question that we were actually discussing.
Speaker B:Oh, yeah, give it to me.
Speaker A:Give it to you.
Speaker A:Was whether it would have been appropriate or not.
Speaker B:Slower.
Speaker B:Yeah, slower.
Speaker A:Yeah.
Speaker A:There's a difference between whether if the decision was made based on whether it was appropriate or not, vers warranted or not versus, versus what they actually did.
Speaker B:It's not the size of the cut site.
Speaker A:Yes.
Speaker B:How you use it.
Speaker B:It's.
Speaker B:Right.
Speaker A:Exactly.
Speaker B:And this one may have been used poorly.
Speaker A:I mean, we'll never know.
Speaker A:I think of that Kanye West.
Speaker B:Right.
Speaker A:Everybody, everybody, everybody wants to know what I would have done if I didn't win.
Speaker B:I guess we'll never know.
Speaker A:I guess we'll never know.
Speaker B:So just to shore up the rest of the week, Tomorrow will be Q3 GDP data.
Speaker B:Then you'll also have actually tomorrow, on Thursday as well, you'll have existing home sale data.
Speaker B:And then finally on Friday, you'll have PCE inflation, which is a big print that I'm sure the FOMC would have liked to have had before their decision, but they didn't.
Speaker B:So let's give you some color.
Speaker B:Let's, let's walk you in slowly because it's not the size of the cut, it's how you use it.
Speaker B:Let's ease it in there.
Speaker A:Okay.
Speaker B:Today the Fed funds rate was dropped 25 basis points, or 0.25% if you're uninitiated.
Speaker B:Dropping the fed funds rate from 4.25 to 4.5%.
Speaker B:But the big news, the talk of the town, the savory little tidbits that you soak up with the bread of the meal was the rhetoric that the FOMC dropped in addition to this rate cut because the rate cut, as you said on the previous show, was largely expected.
Speaker B:Chicago Mercantile Exchange World interest rate probability.
Speaker B:Everybody had predicted this to almost 100%.
Speaker A:Probability because the Fed and all the FOMC members had laid the groundwork and left all the tea leaves for everybody to read.
Speaker A:So the Fed, the market was baking in at a, at a 94%, you know, expectation that they were going to cut.
Speaker B:Yeah, it's, it's a big change.
Speaker B:So we saw the FOMC go from four expected potential cuts down to two next year.
Speaker A:Oh, yeah.
Speaker B:So a big, big pivot in what they think the market needs as far as easing of Fed monetary policy.
Speaker A:Right.
Speaker A:So what Chris is talking about here is this was one of those meetings where in addition to the meeting the Fed releases their summary of economic projections where in that report it lists out, you know, how many of the FOMC members believe the rate should be where it is today, known as the dot plot.
Speaker A:And it also lays the groundwork and the expectation of what you can expect to see down the road.
Speaker A:And that just means what they expect to see as of today for next year and the following year.
Speaker A:Prior to today the expectation was that by the end of next year the Fed funds rate would come down to three and a half percent just for everyone.
Speaker A:As like high level, that would be a full percentage point lower than where we are today.
Speaker A:So at the, at the most four potential rate cuts out of eight meetings.
Speaker B:25 basis points each.
Speaker A:Right.
Speaker A:There's only eight meetings a year.
Speaker A:Right.
Speaker A:So that would mean at least four half of those meetings there'd be cuts.
Speaker A:Now they've now adjusted that expectation to.
Speaker B:Only 2 for a total of 50 basis points.
Speaker B:Most likely.
Speaker A:Most likely.
Speaker A:And now theoretically they could do all 50 basis points at once.
Speaker A:But given the rhetoric that we heard today, that's probably not going to happen and you shouldn't expect it to happen till later on in the year.
Speaker B: ility of rate cuts going into: Speaker B:This is a very special Christmas episode.
Speaker B:So Merry Christmas to all of you.
Speaker B: probability of a rate cut in: Speaker A:Not happening, Chief.
Speaker B:Yeah, pretty low.
Speaker B:That's, that's as close to.
Speaker B:You're never going to get this as they could possibly get right.
Speaker B:March, it does go up to 42%.
Speaker B:The May meeting has a 49% probability of a rate cut.
Speaker B: And in June, six months into: Speaker B:It's only for 25 basis points by the way.
Speaker B:And in December of next year, one year from now, 37 probability of a rate cut.
Speaker B:So the market is very uncertain and.
Speaker A:It was very unhappy with his decision.
Speaker A:And I actually wanted to ask you this live on the show.
Speaker A:I little bait me question intentionally.
Speaker A:No, because I'm actually curious because if the Chicago Mercantile Exchange and the world's interest rate probability from Bloomberg.
Speaker B:Yeah.
Speaker A:All had expected at a 90 plus 90%, 94, 95% chance that there was going to be a rate cut and then the, the Fed decides to in fact cut rates by 25 basis points.
Speaker B:Right.
Speaker A:How.
Speaker A:How does the market then?
Speaker A:Why is there that they were signaling to everyone we will be cutting rates.
Speaker A: today where the dow went down: Speaker B:Yeah.
Speaker B:And so which is.
Speaker A:Which is massive for everybody out there.
Speaker B:It's a.
Speaker B:It was a massive swing day.
Speaker B:And if you look at the stock market ticker, I like to think of the stock market as red and green.
Speaker B:Right.
Speaker B:Red bad day, green, good day.
Speaker B:There really is no in between.
Speaker A:There you go.
Speaker B:And you can see mostly red or mostly green if you want to try to find an intermediary position.
Speaker B:But today was definitely a red day.
Speaker B:Definitely.
Speaker B:Definitely a day that'll go down as a memorable one.
Speaker B:And we'll get into some of the statistics as to why a little bit later on in the show.
Speaker B:But to answer your question, it goes back to what we said on the previous episode.
Speaker B:I think it was 260 where we talked about my concerns over the potential for a rate cut not being necessary right now.
Speaker B:And the reason why is you looked at so much of the data that was out there and I don't know if you follow me on.
Speaker B:On X.
Speaker B:You don't.
Speaker B:You don't have an X account, do you?
Speaker A:I don't have an X account, but I saw the post that you made that you posted on the gram on the Grammys.
Speaker A:Because if it doesn't come onto the gram, then it didn't really happen, you.
Speaker B:Know, so I'm actually using my laptop today.
Speaker B:We're trying a little bit of a different setting and plus site and I want to be a little more professional every once in a while.
Speaker B:I mean, we could fake professionalism.
Speaker A:I mean, let us know in the comment section below if you'd like us to keep it a little bit more professional or you like the like.
Speaker A:Like the shows that the way they go.
Speaker A:Because, you know, right now they're.
Speaker A:YouTube's not playing that game with us, chief.
Speaker B:You know, it's because we're very inflammatory.
Speaker B:We are YouTube's kryptonite, right?
Speaker B:We say things that we shouldn't be saying and those words that we shouldn't be saying prevent us from advertising or getting pushed in the algorithm.
Speaker A:We're gluten, bro.
Speaker A:That's what we are.
Speaker A:We're inflammatory.
Speaker A:We're gluten.
Speaker B:The only way you're going to see us consistently come up in your feed is if you like and subscribe.
Speaker B:And you gotta subscribe.
Speaker A:Have to.
Speaker A:There's a huge percentage of the people that actually Tune into the show that aren't subscribed.
Speaker A:So we understand that it's hard to get crossover, but we're on Apple or Spotify.
Speaker A:If you're listening to us on Spotify, I hope you're enjoying, enjoying the viewing option that we've laid out for you there.
Speaker A:Chris has done a lot of work to make sure that we're up to date.
Speaker A:They've done some really cool things over there.
Speaker B:I think they're going for YouTube, brother.
Speaker A:We believe Spotify is making a play to go after YouTube.
Speaker B:Yeah, I'm here for it.
Speaker B:Yeah, yeah, I'm here for it.
Speaker B:Yeah.
Speaker A:I'll be honest, I love me some YouTube up until they're like, you know, they're affecting the show.
Speaker B:They're just wildly difficult there.
Speaker B:Believe it or not, despite all the contents on YouTube, they have a lot of guardrails and restrictions that mess with their algorithm.
Speaker B:Whereas you can say whatever you want on Spotify and no one's going to say anything.
Speaker A:No one's flagging you.
Speaker A:Yep.
Speaker A:Yeah.
Speaker A:Or if you're watching us over on YouTube, please make sure you subscribe.
Speaker A:Hit that like button, ring that notification bell, do all the moist goody good stuff.
Speaker B:Yeah.
Speaker B:So on X this morning I want to set the tone, right.
Speaker B:I got, I get up in the mornings, I do my 20 minutes of cardio on the bike.
Speaker B:Right.
Speaker B:That's usually my me time to think about stuffs.
Speaker B:Right.
Speaker B:And today's stuffs was I knew the FOMC meeting was, was happening so I decided to put down some thoughts, which I do on X quite a bit.
Speaker B:The 10 year yield is 85 basis points up since the Fed's rate cut cycle began.
Speaker B:The average rate on the 30 year mortgage is up from 6% to 7% in the last three months.
Speaker B:So we're seeing things go in a very different direction than a lot of people had thought they were going to go.
Speaker B:All the models show a 25 basis point rate cut today.
Speaker B:But is it warranted, is my question.
Speaker B:Cpi, PPI and pce, all three are the metrics that the Fed, the FOMC tracks.
Speaker B:Is, is inflation under control?
Speaker B:They're all rising as the job market softens.
Speaker B:And now we get information about the job market being artificially inflated from the government hiring 50,000 employees a month.
Speaker B:Remember when the Inflation Reduction act came out, like I think it was two years ago, we were still in the garage.
Speaker A:Yep.
Speaker B:And you and I do that episode over it.
Speaker B:We're like 87,000 IRS workers.
Speaker B:God damn.
Speaker B:There's a lot of IRS workers, they.
Speaker A:Come to audit your ass.
Speaker B:They were basically doing that a month across all the government agencies.
Speaker B:And it doesn't sound so.
Speaker B:So huge.
Speaker A:So.
Speaker A:Yeah.
Speaker A:So if you, if you believe in it, if that's the case, and that is what in fact the Fed is leaning on for their decision to cut 25 basis points today.
Speaker A:Right.
Speaker A:Because inflation has not gone under control.
Speaker B:Nope.
Speaker A:So giving them more of a reason to hold rates where they are.
Speaker A:The economy has not been suffering based on GDP print.
Speaker A:So you don't need to cut there.
Speaker B:I believe GDP is artificially inflated by government spending.
Speaker A:Absolutely.
Speaker A:That could be the case.
Speaker A:But.
Speaker A:But if they're basing it off of what's being reported, the reports are showing positive numbers.
Speaker A:The economy.
Speaker A:It's showing that the economy is healthy, even though you and I both know that it's not.
Speaker B:It's not.
Speaker B:You got to be quote, data dependent.
Speaker B:But are they though?
Speaker A:They're not though.
Speaker A:So if they're actually buying into the rhetoric of, you know, these job numbers have been inflated by government jobs, then they actually know that unemployment or employment is actually softening, the labor market is softening, and there's could be real trouble around the corner here.
Speaker A:My issue with the decision that they made today is unfortunately there are a lot of people out there that are not financially literate.
Speaker A:Right.
Speaker A:And a cut, not only a cut today, but the last three meetings there have been cuts.
Speaker A:Right.
Speaker A:What does it do?
Speaker A:It almost justifies and encourages people that better times are ahead.
Speaker B:They believe that narrative too.
Speaker A:They believe.
Speaker B:That's the crazy thing.
Speaker A:That's the thing.
Speaker A:Right.
Speaker A:So.
Speaker A:And it was that it's quantitative easing makes it easier to borrow money.
Speaker A:Big corporations, mid cap companies.
Speaker A:Right.
Speaker A:What does that ultimately do?
Speaker A:They'll borrow more money to grow the economy more.
Speaker A:And that's ultimately going to have a resurgence in inflation.
Speaker A:Not solving their inflation problem.
Speaker B:Yeah.
Speaker B:And I think that that's why you saw the pivot and what they think's gonna happen next year.
Speaker B:So I also, after I do my 20 minutes cardio, I get into the cold plunge.
Speaker B:And I know how you love it when I talk about cold plunging on the show.
Speaker A:I know you're back to cold plunging.
Speaker B:I'm back in, man.
Speaker A:They sent you the replacement and it.
Speaker B:Works so much better than the previous one did.
Speaker A:Oh really?
Speaker B:I think the previous one had some kind of mechanical defect coming from.
Speaker B:I had one of the first out of the factory, like they hooked me up.
Speaker B:So I think there was something there that, that just didn't work.
Speaker B:This one works spectacular the water's cleaner where it runs better.
Speaker B:So maybe I just had a bootleg version.
Speaker A:There you go.
Speaker B:Yeah.
Speaker B:All right, so I get in the cold plunge.
Speaker B:I like doing it nude.
Speaker B:So for those of you driving, close your eyes, you're in an accident, imagine might be worth it.
Speaker B:Subject matter, you know, subjective.
Speaker B:Okay, so I also posted a second tweet or X posted the language there is still confusing.
Speaker A:Yeah.
Speaker B:Today is a bigger day for the future of our economy than people realize.
Speaker B:A 25 basis point rate cut is a near certainty based on world and Trade probability and Chicago Mercantile Exchange.
Speaker B:But is it the appropriate move?
Speaker B:What's more important, the FOMC following through or the data dependent approach?
Speaker B:We are watching history unfold.
Speaker A:Okay, what do you think about that?
Speaker A:Why, why is history unfolding?
Speaker B:I think you're at a pivotal moment where the FOMC was forced to recognize number one, that they'd over committed to next year based on the data that they'd already had.
Speaker B:And if you want to be data dependent, you can say we're going to pivot then you shouldn't have cut rates now.
Speaker B:So they wanted to save face and cut in my mind in the face of inflationary trends going possibly the wrong way.
Speaker B:But they also were at least savvy enough to revise expectations to be a lot more restrictive in the future.
Speaker B: ntire landscape in my mind of: Speaker B:A lot of people in the real estate profession were telling one another, oh my God, Billy, you're not going to believe this, but rates are going to go down next year significantly and mortgage rates are going to be so much more affordable.
Speaker B:Right, right.
Speaker B:But they're not though.
Speaker A:They're not though.
Speaker A:We knew you called it.
Speaker B:I did, I did on this show.
Speaker A:Because it tracks the tenure.
Speaker A:Right.
Speaker A:And what has the tenure been doing?
Speaker A:Like you said at the top of the show, it's been going up the last three months.
Speaker A:Right.
Speaker B:And the 10 year, my friends, it, it popped a little.
Speaker B:Uchi, Wally.
Speaker A:Wally, Uchi.
Speaker A:Bang, bang.
Speaker B:Today it, it spiked up quite a bit.
Speaker B:So let's get into the meat of the show, shall we?
Speaker A:Let's do it.
Speaker B:Should we get into that?
Speaker B:The beef stuff?
Speaker B:The beefies, yeah.
Speaker A:Beefy stuff.
Speaker B:Beefy stuff.
Speaker B: point, scales back, cuts for: Speaker B:This is gonna be a resounding reoccurring theme throughout the whole show.
Speaker B:We talk about the Fed's actions.
Speaker B:Everybody was like, oh yeah, yeah, they Cut rates.
Speaker B: But they revised: Speaker B:It's gonna be a big part.
Speaker B: third consecutive rate cut in: Speaker B:Inflation not entirely going away was what caused me a great deal of concern in my question whether this was really justifiable time to continue to cut rates.
Speaker B:Newly appointed Cleveland Fed president Beth Hammock, which said loves, she's new.
Speaker B:She, she objected.
Speaker B:She's like, no, no, no, no, no, no.
Speaker A:Oh, she come out the gate, she's like, I'm gonna make a name for myself.
Speaker B:Yeah.
Speaker B:How do I get myself in most.
Speaker B:The most press releases possible.
Speaker A:Meeting number one, right?
Speaker A:She replaced Mester.
Speaker B:Yeah, Mester.
Speaker B:And she preferred not to cut rates at all.
Speaker B:Her descent marked the second against a policy decision since the Fed started its late latest interest rate cutting cycle in September.
Speaker B:Consensus among Fed officials is for two rate cuts next year, down from four previously forecasted in September.
Speaker B:And I'm quoting here, today was a closer call, but we decided it was the right call.
Speaker B:Powell told reporters at a press conference on Wednesday.
Speaker B:Again quoting.
Speaker B:It was the best decision to foster achievement of both our goals.
Speaker B:Referring to price instability and maximum employment.
Speaker B:Okay.
Speaker B:Questionable, but okay.
Speaker A:No, I mean, you have every right to question that because price stability is still a major issue.
Speaker A:Has not been solved.
Speaker A:To his own point.
Speaker A:We will get inflation down to 2%.
Speaker B:Yeah, I don't think you will anytime soon.
Speaker A:I really don't think you are the number.
Speaker A:The number.
Speaker A:Top two things that are fighting against that figure are shelter.
Speaker A:Right.
Speaker A:And actually transportation services.
Speaker A:That's actually crazy.
Speaker B:The two things that everybody kind of needs to live.
Speaker A:Yeah, exactly.
Speaker A:I think transportation services is up 7% year over year, you know, and I mean shelters up over 4%.
Speaker A:So that's really going to.
Speaker A:If, if both of those are above the target of two, mind you, all of these need to be down to 2%.
Speaker A:They got a real problem on their.
Speaker B:Hands and a real problem amongst their own opinions on how to get there.
Speaker B:So the dissent continued.
Speaker B: till still on track to cut in: Speaker B: A rate hike in: Speaker A:The fact that they're even mentioning a rate cut.
Speaker A:A rate hike, I'm sorry, right Is like, oh, it's now back on the table.
Speaker A:It's in the conversation.
Speaker B:Yeah.
Speaker B:Say I'm not planning on firing you.
Speaker A:Okay, well, then why even mention that?
Speaker B:I just want you to know that I'm.
Speaker B:I'm not planning on firing you.
Speaker A:But.
Speaker A:But it could come into your plan later.
Speaker B:I'm not planning on it now.
Speaker A:Why are you thinking about not firing me?
Speaker B:You have.
Speaker B:You have a large degree of hair on your hands and it's.
Speaker A:It's just.
Speaker B:It's very distracting.
Speaker A:Very distracting.
Speaker A:I gotta sit on my hands.
Speaker B:And as somebody who.
Speaker A:My diamond hands.
Speaker B:Yeah.
Speaker B:Those are not diamond hands.
Speaker A:These diamonds.
Speaker B:Those are fluffy hands.
Speaker B:Okay.
Speaker B:And as somebody who edits the show a lot, you talk a lot with your hands.
Speaker B:You're a hand gesture guy.
Speaker A:Yeah.
Speaker B:You're the I like to eat popcorn and make the gesture towards your face guy.
Speaker B:But the problem is I see knuckle hair.
Speaker A:Yeah.
Speaker B:Every week for hours when I edit the show.
Speaker B:I'm going to need you to tamp that down for our relationship.
Speaker A:Right.
Speaker B:But I'm not planning on firing you.
Speaker A:Okay.
Speaker B:Okay.
Speaker A:All right.
Speaker A:Oh, man.
Speaker A:Speaking of hand gestures.
Speaker A:So the boys learning all the basketball celebrations right now with.
Speaker A:That has to do with hand gestures.
Speaker A:There's so many.
Speaker A:Right?
Speaker A:All the players out there.
Speaker A:You got Damien Lillard.
Speaker A:Dame time.
Speaker A:He points to his watch.
Speaker B:I never did any of this.
Speaker A:Oh, all the kids are doing that.
Speaker A:And I have to really like.
Speaker A:He does it at home when we're together.
Speaker A:But I say, you're not doing this in the game.
Speaker A:I'm not standing for it.
Speaker B:It's so I will make like a last minute shot.
Speaker B:And then you tap your.
Speaker B:Your watch, bro.
Speaker A:I wish, I wish.
Speaker A:These kids are doing it.
Speaker A:First play of the game.
Speaker A:They score.
Speaker A:They're celebrating.
Speaker A:Like they're doing all.
Speaker B:Every bucket counts.
Speaker A:Every bucket counts.
Speaker B:What was that mouth thing you just said?
Speaker A:So the shoe, they go.
Speaker B:What is that?
Speaker A:It's like a three.
Speaker A:Like just a hit of three.
Speaker A:But they're not even shooting three points.
Speaker B:Why is it in your mouth?
Speaker A:I don't know.
Speaker A:Why.
Speaker B:Why you keep doing it.
Speaker B:Like it's going to get less.
Speaker A:Like that's what they do.
Speaker A:I'm just saying that's.
Speaker A:I don't even want to tell you the names of the guys that do it anyways.
Speaker B:So I want to know who they are.
Speaker B:So time.
Speaker A:I know.
Speaker A:So Adam's got algebra homework that he's working on.
Speaker A:Okay.
Speaker A:And I'm asking him.
Speaker A:You got to show your steps.
Speaker A:Okay.
Speaker A:The teacher needs you to show your Steps.
Speaker A:He's.
Speaker A:I don't want to.
Speaker A:I don't need to.
Speaker A:I, I.
Speaker A:I got the right answer.
Speaker B:X equals 3.
Speaker B:That.
Speaker A:Yeah, he already knows.
Speaker A:He already know.
Speaker A:Like, this is what it is.
Speaker A:I got the right answer, right?
Speaker A:I'm like, I know, but she's going to have a problem if you don't show your steps.
Speaker B:Yeah.
Speaker A:So he'll do his home.
Speaker A:He'll do his homework, and he.
Speaker A:He's fighting me on not showing his steps because he just do it in his head, and he'll get the right answer.
Speaker A:He's walking away and like, Adam, hold on.
Speaker A:I got to check your homework.
Speaker A:Don't go upstairs yet.
Speaker A:You know?
Speaker A:He's like, they're all right.
Speaker A:And I check them like, yeah, you're right.
Speaker A:They're all right.
Speaker A:And then, boom, Hand gesture, like, come on, man.
Speaker B:I got to touch you.
Speaker B:Then the board meetings.
Speaker A:This one was good.
Speaker A:This one.
Speaker A:This one was actually really good.
Speaker A:Ice in my veins.
Speaker A:Oh, it's what that means.
Speaker A:Yeah.
Speaker B:I always said that was a penis reference.
Speaker B:I swear to God I did.
Speaker B:I'm not even being sarcastic.
Speaker B:I literally thought that meant that you had a large phallic tool.
Speaker B:No, that's not what that ice in your.
Speaker B:Why is that.
Speaker B:Why is that?
Speaker B:The.
Speaker A:The ice.
Speaker A:Do they.
Speaker A:So he's mixing two.
Speaker A:The.
Speaker A:The three, and then the here like this.
Speaker A:And they're pointing to ice in my veins.
Speaker A:Yeah.
Speaker B:I totally misread what that meant.
Speaker B:That was so new to me.
Speaker A:And I'm not gonna lie, that's one of the coolest celebrations.
Speaker A:Like, ah, I got ice in my veins.
Speaker A:That's so good.
Speaker B:I think I've used that inappropriately before.
Speaker B:Jesus.
Speaker B:I legitimately.
Speaker B:I am out of touch.
Speaker B:I did not know that.
Speaker A:Oh, yeah.
Speaker B:I thought it meant, like, you know, it's this big.
Speaker A:No, no, no, no.
Speaker A:That.
Speaker A:No, the bad phallic reference is another one.
Speaker A:That's the one where they.
Speaker A:Where they go like this down the court.
Speaker B:Like, that's a reference they do in basketball.
Speaker A:Now.
Speaker B:How do you do that after you make a shot?
Speaker A:You make it.
Speaker A:You turn, and then they.
Speaker A:They, like, they go like this, suggesting that they're elephant.
Speaker A:Like elephant elephantitis.
Speaker A:Yeah.
Speaker B:Giant testicles.
Speaker A:Yeah.
Speaker A:I got.
Speaker B:I got.
Speaker A:I got big kahones.
Speaker A:I could take the big boy shots.
Speaker B:Maybe I should start watching basketball again.
Speaker B:This sounds a lot more involved.
Speaker A:This is way more fun now.
Speaker A:You don't understand.
Speaker A:I was another technical foul for and the best.
Speaker A:Oh, the refs let some of us, like, because they understand for entertainment purposes.
Speaker B:They Let gigantic testicles slide?
Speaker A:No, no.
Speaker A:It depends on who does it, right?
Speaker A:If LeBron does it, it's cool.
Speaker B:If somebody seems unfair.
Speaker A:I mean, come on, what are you gonna do?
Speaker B:You're gonna.
Speaker A:You're gonna throw LeBron out the game?
Speaker B:Yeah.
Speaker B:LeBron don't make giant testicle like references.
Speaker A:On national television, okay, bro?
Speaker A:He did.
Speaker A:He did it, like, once.
Speaker A:But Kobe did it.
Speaker A:Sam Cassell did it.
Speaker B:Oh, he did not do that.
Speaker B:Oh, yeah, Sam Cassell did.
Speaker A:Kobe didn't.
Speaker A:He didn't even get teed up.
Speaker B:At least Sam Cassell know he's ugly.
Speaker A:LeBron.
Speaker A:LeBron got teed up for it.
Speaker B:You should get teed after that.
Speaker B:You shouldn't be able to make anything.
Speaker A:Colby can get away with it.
Speaker B:You can't make genital references on national television.
Speaker A:Oh, the other one.
Speaker A:Oh, there's so many.
Speaker A:We won't get into it, but they're good.
Speaker B:I didn't realize you had, like, an Encyclopedia Britannica of, like, inappropriate.
Speaker A:I'll get you up to speed after the show.
Speaker B:I don't want to see any of that stuff.
Speaker B:But if that's on camera, I can't explain to my wife what you're doing.
Speaker B:It's gonna be awkward for everybody.
Speaker A:So now every time.
Speaker A:Every time we guess the Fed decision, right?
Speaker A:I'm just gonna.
Speaker B:Yeah, I see your veins.
Speaker B:I did not know that, baby.
Speaker B:I mean.
Speaker B:Okay.
Speaker A:All right.
Speaker B:Yeah.
Speaker B:Well, the Fed officials estimated that two cuts next year, three predicted one.
Speaker B:I'm sorry, this again.
Speaker B:I'm still thinking about sides hand in wrong places.
Speaker B:Ten Fed officials estimated two cuts next year.
Speaker B:Three predicted one, and three said three cuts, and one saw four cuts.
Speaker B:Neel Kashkari.
Speaker A:He saw four cuts.
Speaker A:That's not happening, chief.
Speaker B:That's not happening.
Speaker B:So, again, look, all the numbers being what they are, the real story was in the dot plot chart, the summary of economic projections.
Speaker B:Which side has talked about and done a very good job educating us all about on previous shows.
Speaker B:Came out as.
Speaker B:As part of this meeting, the last meeting of the year.
Speaker B:It's very common to get a summary of economic projections to see where everybody's head is at.
Speaker B:And, well, I've got an actual quote from the very first page of the SCP report, which I thought would be valuable to read.
Speaker B:Okay, the question is, can I read it without thinking about ice in my veins?
Speaker B: th of: Speaker B: inflation for each year from: Speaker B:And over the longer run, each participant's projections were based on information available at the time of the meeting.
Speaker B:So they can't just, you know, pull information from future meetings or things that come up later on.
Speaker B:And obviously this is subject to change together with her or his assessment of appropriate monetary policy, including a path for the fed funds rate and its longer run value and assumptions about other factors likely to affect economic outcomes.
Speaker B:That's always been strange to me.
Speaker B:So you can assume other factors that may affect economic outcomes, but you can't assume future data that might be prevalent.
Speaker B:And the reason why this is important, if you know that shelter is the biggest lag on inflation and it's likely what's keeping inflation above 2%.
Speaker B:And you know, that's a huge piece of this puzzle here.
Speaker B:If you say, hey, you know what, I don't think shelter price is going to go down anytime soon because there's an inventory shortage.
Speaker B:You're not allowed to pick that as a speculative data point whenever you make this decision.
Speaker A:Oh, interesting.
Speaker B:Which is weird to me, but, you know, whatever.
Speaker B:I don't make the rules.
Speaker B:The longer run projections represent each participant's assessment of the value to which each variable would be expected to converge over time under appropriate monetary policy and in the absence of further shocks to the economy.
Speaker B:Quoting appropriate monetary policy, end quote, is defined as the future path of policy that each participant deems most likely to foster outcomes.
Speaker B:Does it sound like a lot of bullshit?
Speaker B:Because that's what I'm getting at.
Speaker B:Yeah.
Speaker B:Okay.
Speaker A:Yeah, they're really, really stretching here.
Speaker B:Yeah.
Speaker B:For economic activity and inflation that best satisfy his or her individual interpretation of the statutory mandate to promote maximum employment and price stability.
Speaker B:Long story short, they give these assholes a chart that's blank and say, put a dot where you think the rates are going to be in each particular.
Speaker A:Year, impossible for them to get right that far out.
Speaker A:And because they're, they can make adjustments to it and they're not held to anything.
Speaker A:Right.
Speaker A:There's no consequences or repercussions for them being wrong.
Speaker A:Yeah, right.
Speaker A:So it's just this is where we think it's going to go, you know, and you got some that are a little bit too high, some that are a little too low, and a bulk of them that are in the middle.
Speaker A:And just think of it as like a bunch of friends, like, all right, you go high on this one, I'll go low on this one, and we'll all kind of just group up in the middle.
Speaker B:Yeah.
Speaker B:So basically what I'm trying to get at is whenever, whenever side.
Speaker B:And I tell you what we think the terminal rate is going to be.
Speaker B:We're basically giving the exact same thing.
Speaker B:It's true we're not on the FOMC, but we're not not on the FOMC.
Speaker B:You know what I mean?
Speaker A:100.
Speaker A:We're basically there.
Speaker A:Yeah.
Speaker B:I mean, you're kind of Neel Kashkari, come on.
Speaker A:I'm not in the back with crayons, bro.
Speaker B:You can be the hammock chick.
Speaker A:The hammock chick, I'm good with that.
Speaker B:I mean, she's, she's a dissenter.
Speaker B:That's probably you.
Speaker A:Yeah, I mean, well, we agree with her.
Speaker A:That's where we should have been.
Speaker B:Yeah, she's not wrong.
Speaker A:She's definitely not wrong.
Speaker B:She came in swinging the hammer.
Speaker A:She did.
Speaker B:And now I, now I know that she can appropriately do ice in her veins.
Speaker A:She should.
Speaker B:Because it didn't mean something else.
Speaker A:Right now she is doing the ice in my veins because of the way the stock market reacted.
Speaker B:Were you the one who came to my office today and said, hey, look at the only thing that's green today.
Speaker B:Was that you?
Speaker A:Yeah.
Speaker B:Okay, well, because of you, I added this to the show.
Speaker B:Oh, we did a lovely show not too long ago on that.
Speaker B:Covered the vix, the volatility index.
Speaker B:I think it was your idea too.
Speaker A:No, it was actually your idea, but I went into maybe a deeper breakdown of it than you were anticipating because I also knew that we were going to get into it.
Speaker A:And basically what that does is it measures people's, not just people's investors expectations.
Speaker A:And why that matters is because these investors are putting their money where their mouth is.
Speaker A:Right.
Speaker A:Their head.
Speaker A:They could be hedging.
Speaker A:Right.
Speaker A:But it's out of potential real economic financial fear or potential upside.
Speaker A:So you could be putting in options or you could be putting in.
Speaker A:Putting in.
Speaker A:Puts pudding.
Speaker A:Yeah.
Speaker A:Meaning if you expect there to be a downturn, you hedge your bet by putting in puts.
Speaker A:There's another way of saying this, that that doesn't flow out correctly.
Speaker B:I like it when you sound like you don't flow.
Speaker A:Yeah, I flow, though.
Speaker B:So you put a lot.
Speaker A:I, I flow, though.
Speaker B:No, you don't.
Speaker A:I got good flow.
Speaker B:Like hustle and flow flow.
Speaker A:No, not hustle and flow, but yeah.
Speaker A:Anyways, it basically it tracks what investors are doing and it gives you real insight to what people, where people are putting their money, what site is trying.
Speaker B:To Say it's a volatility index.
Speaker B:It's fear gauge.
Speaker B:And if people are afraid, well it rises.
Speaker B:People are not afraid.
Speaker B:It goes down.
Speaker A:There you go.
Speaker A:Simple.
Speaker B:See that's why I'm on the show.
Speaker A:Keep it very simple.
Speaker B:Let me tell you what Saeed said in a not smart way.
Speaker B:Well, the vix, the fear gauge.
Speaker B:Well, little thing, it spiked today.
Speaker B:Okay.
Speaker A:Shocker.
Speaker B:Spiked as in the vertical?
Speaker B:Yeah.
Speaker B:As in straight up.
Speaker B:Yeah.
Speaker B:74.
Speaker A:Erected.
Speaker B:Yeah, erected it, it had a 74% higher close today in its erection.
Speaker B:The second biggest one day percentage increase in history.
Speaker A:Wow.
Speaker B:Volatility is back, baby.
Speaker A:People are scared, man.
Speaker B:As they should be.
Speaker A:They don't know what's going to happen next year.
Speaker B:So for those of you curious, well, Chris, hey, when was the, the highest change in a single day to the Vix?
Speaker B:It was a 115.6% increase where the Vix started at 17.31 and ended at 37.32.
Speaker B: ,: Speaker A:Oh, interesting.
Speaker B: ,: Speaker B:Yeah, pretty, pretty notable.
Speaker B:But there's been some, I will point out there's been some pretty healthy spikes over time in the Vix.
Speaker B: ,: Speaker B: ,: Speaker B:December.
Speaker B: ,: Speaker B:So there's been a lot of, there's a pretty healthy cadence of spikes like that now.
Speaker B:I mean what that means I don't know.
Speaker B:But I'll tell you right now that it typically means that people are going, I am scared out of my damn mind today.
Speaker A:So how much of that fear do you think has to do with the fact that the rhetoric after the, the decision to cut rates was really them going back to holding higher for longer now?
Speaker A:Higher not being five and a half percent where it was.
Speaker A:The rates were at their peak.
Speaker A:But okay, still relatively speaking, four and a half percent compared to what we had been dealing with for the last 14, 15 years.
Speaker B:Yeah.
Speaker A:What is still a lot higher.
Speaker A:And the rhetoric is we're going to be holding this here.
Speaker A:Whereas the expectation all along, especially based on the last summary of economic projections was that they were going to cut rates by a full, you know, 1 percentage point, you know, by some time by the end of next year.
Speaker A:Now it's like wait a minute, at best case, 50 basis points do you think?
Speaker A:Because what I'm thinking is if the, the VIX went up.
Speaker A:Right.
Speaker B:Yeah.
Speaker A:Borrowing costs just became cheaper.
Speaker A:That should.
Speaker B:They didn't.
Speaker A:They didn't.
Speaker B:The borrowing cost.
Speaker B:The Fed, the cost of a bank to borrow became cheaper.
Speaker A:Okay.
Speaker B:But the cost to the consumer is.
Speaker A:Not getting cheaper, has not changed yet.
Speaker B:It's not changing and it's actually gone the other way.
Speaker B:It's gotten more expensive.
Speaker A:Okay.
Speaker A:How so?
Speaker B:So this influences the Treasuries.
Speaker B:All the uncertainty, the volatility, the fear gauge the VIX is measuring really equates back to, in some ways the.
Speaker B:Directly to the bond markets.
Speaker B:Right.
Speaker B:If people have less confidence, near term, less confidence, long term, Treasuries rise.
Speaker B:Right.
Speaker B:And as they start to kind of change and pivot, you would expect the 10 year to drop and mortgage rates to drop.
Speaker B:But the opposite has happened.
Speaker B:The Treasuries are clearly not cooperating with what the Fed is saying and doing.
Speaker B:And as a response to all these things, mortgage rates have gone the other way in the past three months.
Speaker B:It went from 6% to 7% handles.
Speaker B:So you're seeing a pretty different change than what people expected.
Speaker B:So I don't think that borrowing costs are getting cheaper and I don't think that they will.
Speaker B:And there's a big disconnect between what the.
Speaker B:Wow.
Speaker B:That rang through to my.
Speaker B:That's weird.
Speaker B:There's a big disconnect in what the market is seeing and what the Fed is telling the market.
Speaker A:Okay.
Speaker B:So because of that, borrowing costs are not getting cheaper at all.
Speaker B:And I think that over the long run something will break.
Speaker B:And my, my belief has long been that that'll be in the bond market.
Speaker A:Okay.
Speaker B:I truly believe the bond market is going to be a place where, where we have to have a come to Jesus realization that all of this overbearing information, all this stuff that we're.
Speaker B:The behavioral economics that normally trade into recessionary economies.
Speaker B:We've got to find a way to come to a reality of stability and calmness that social media's generation is not allowing us to have.
Speaker A:Oh, that's a good point.
Speaker B:In the last show I talked about how there's kind of a curve that Robert Shiller pointed out and he won a Nobel Laureate for this, right?
Speaker A:Yes.
Speaker B:Where he kind of mapped out the emotions that go along with recessionary economies, the behavioral economics behind it.
Speaker B:I think a lot of that is magnified by the flow of information at the cadence that you're seeing on social media.
Speaker B:And I don't know how we reconcile it.
Speaker B:I don't know how we get from where we are today to home prices coming down and the bond market normalizing, but clearly Fed policy in and of itself is not going to be enough to get us there.
Speaker A:Right.
Speaker A:I know that in the housing market right now, homes are staying online for a little bit longer.
Speaker A:Some of that could be seasonal.
Speaker A:Right.
Speaker A:We are around the holidays and I do know that the number of homes that are being sold above listing price has come down somewhat.
Speaker A:Right.
Speaker A:But there needs to be even more of a change in order for it to be reflected on these inflation reports for the Fed to, you know, feel comfortable.
Speaker B:And maybe I'm wrong, you know, maybe, maybe there's, maybe the Fed's policy is going to take a little bit longer to get there.
Speaker B:I don't know.
Speaker B:I don't have the definitive answer to it.
Speaker B:But as of right now, we have been in a pretty steady rate cutting cycle this year.
Speaker B:We've seen three consecutive rate cuts at three consecutive meetings, which should have released a lot of pressure.
Speaker B:And keep in mind, the first one was 50 basis points.
Speaker B:They come up with 25 basis points.
Speaker B:Swinging, swinging 25 basis points.
Speaker B:We were a full point below, a full 1% below where we started.
Speaker B:If I would have told myself that a year ago, I'd been like, oh, the pressure would be off, we'd be cruising towards normalization.
Speaker B:And instead we don't seem to be.
Speaker B:I mean, we've got a very uncertain market with numbers that.
Speaker B:And I have this conversation and I'm gonna, I'm using my brother as a proxy.
Speaker B:There's just no way around it.
Speaker B:I have this conversation with my brother.
Speaker B:My brother is in the mortgage business.
Speaker B:He's on the lending side.
Speaker B:Love my brother to death.
Speaker B:This is not a knock on him.
Speaker B:It's just, he's a very, he's a very good example of, of the.
Speaker B:What I'm constantly hearing.
Speaker B:And maybe he is right at the end of the day, I don't feel that he is about what I'll get there.
Speaker B:But there is a, there is, there's only two sides of this argument that I typically see.
Speaker B:He believes that if the Fed cuts rates like they did today, that ultimately this leads to lower rates for the consumer, lower mortgage rates and the business is going to pick back up again when rates lower again.
Speaker B:I do not believe that to be the case.
Speaker B:I think that home values are a problem and I don't know if we've covered, I don't think we have covered in the show.
Speaker B:Home prices today, adjusted for inflation are now officially at the most unaffordable they've ever been in history for a brief period of time.
Speaker B:There were other periods in history where home prices were a lot lower but mortgage rates were at 18 plus percent.
Speaker B:We are now at an inflection point where even at 7%, given that home affordability has gotten so bad, from a valuation perspective, we are now at the all time highest housing unaffordability in history.
Speaker B:You don't have to be a mathematician, a Nobel laureate, you don't have to be Robert Shiller or even sayed Omar to know that if something's going straight up, it has to come down a little bit.
Speaker B:That's just how every graph and every chart of economic data you've ever seen operates.
Speaker A:Even if it continues to go up again after that.
Speaker A:Right?
Speaker A:It does have to come down a little bit.
Speaker B:Yeah.
Speaker A:There has to be a little bit of an adjustment.
Speaker B:And if we're at all time housing affordability unaffordability, the next generation can't build wealth traditionally in the way they did their home.
Speaker B:You've got an entire generation starting later to build wealth and maybe they have cryptocurrency holdings, good for them.
Speaker B:But we've got an entire generation that can't afford to buy homes.
Speaker B:A wide swath of American culture that can't do it.
Speaker B:Now, sure their parents might be able to give them some money, sure their parents might have home equity, you know, in their property that they can use tap into.
Speaker B:But there has to be an inflection point where something breaks to change that narrative.
Speaker B:And the problem that I have for my brother and everybody else is this weird sense of optimism in spite of so many things being red flags.
Speaker B:The case.
Speaker B:Shiller's the case.
Speaker B:Shiller, the case index.
Speaker B:Right?
Speaker A:Kitchell index.
Speaker B:Yeah, yeah, that's, that's signaling recessionary economy.
Speaker B:We had two successive quarters of negative GDP growth, but the federal government came out and said no, no, no, no.
Speaker B:It was two negative quarters of GDI growth in addition to that.
Speaker B:That was never the definition.
Speaker B:They tried to change it.
Speaker B:We know at some point after that they started hiring at a cadence of 50,000 employees a month.
Speaker B:In government, we know that GDP is propped up in part by spending on geopolitical conflict outside of the country.
Speaker A:Government spending just came out of the inverted yield curve.
Speaker B:Everybody on X is posting about, oh my God, these drones are aliens.
Speaker B:They're looking for nuclear weapons.
Speaker B:They're looking for all.
Speaker B:And I'm sitting here going like, I'm just trying to get some better home prices, bro.
Speaker B:I know like the aliens can't live here.
Speaker B:We don't have space for them.
Speaker A:Right.
Speaker B:But you know, I mean, I say sarcastically, tongue in cheek, but I'm like, why are we all focused on the wrong thing?
Speaker B:Like, we, we all want to believe the economy is great, but every time we see a drone are like, it's aliens.
Speaker B:Why is the conspiracy theory okay to be over there?
Speaker A:Yes.
Speaker B:But you can't have it over here where clearly the people in power have a reason to manipulate the economy to stay in power.
Speaker B:They don't have a reason to show you fake aliens, bro.
Speaker A:Absolutely.
Speaker B:That's all I'm saying.
Speaker B:Like, it doesn't.
Speaker B:Like we're so hyper focused on things that traditionally have been the case that we, we lose sight of like the bigger perspective.
Speaker B:And I, I think that a lot of people in the mortgage business, a lot of people in the lending business, they absolutely inherently believe that this is going to all improve for them because they don't understand things like the VIX signaling fear and volatility.
Speaker A:Right.
Speaker B:These signals are there.
Speaker B:And then there's always that guy.
Speaker B:Chris, you're just like Peter Schiff.
Speaker B:A broken clock is right twice a day.
Speaker A:Okay, that's true.
Speaker A:Something that I wanted to get into with you and I actually wanted to get your take on this is.
Speaker A:I know that.
Speaker A:So we talked, we talk about at great lengths all the time, that the Fed has a dual mandate.
Speaker B:Mm.
Speaker A:Right.
Speaker A:Manage inflation.
Speaker B:Yeah.
Speaker A:And manage employment.
Speaker A:Right.
Speaker A:Provide maximum employment for everybody.
Speaker A:How much of what we are dealing with, as far as an inflation standpoint goes, has to do with what economists call the wage price spiral.
Speaker A:Okay.
Speaker A:This is basically a time where I get it.
Speaker A:Not for, it's not going to hit for a lot of people.
Speaker A:But when we're talking about shelter inventory being at record lows and certain people are basically what wage price spiral is.
Speaker A:Right.
Speaker A:Is when unemployment is too low and certain employers are out there having to pay more for certain employees to come over.
Speaker A:Right.
Speaker A:They have to pay more than what I guess the going rate normally would be.
Speaker A:And then now they have to up their production costs, which ultimately gets passed down to the consumer.
Speaker A:Right.
Speaker A:And then it just, It's a, it's a cycle.
Speaker B:Yeah.
Speaker B:It's a vicious cycle.
Speaker A:It's a vicious cycle.
Speaker A:Now these, now these wage earners that are making more can come out and ask whoever to, for, for their family members to tap into their equity or afford higher paying home or higher cost homes.
Speaker A:Right.
Speaker A:And now the inventory was so low that it's impacting this shelter component.
Speaker A:So maybe what we had been dealing with was a time period where the Fed let unemployment get too low.
Speaker A:That's a conversation that has not really been had.
Speaker B:No, it isn't.
Speaker B:In transitory migration, a certain amount of changing jobs between jobs is healthy, which is why healthy unemployment is closer to 5%.
Speaker B:Although they're trying to reframe that right now and say it's four and a half percent.
Speaker B:Yeah, I don't know that I really buy that.
Speaker A:We were on with a three handle for some time.
Speaker B:Yeah, for a long time.
Speaker B:And people got very comfortable.
Speaker B:Plus there were stimulus checks in around the same time.
Speaker B:And it got, it got kind of wild, man.
Speaker B:I think that a lot of the traditional indicators from a data perspective.
Speaker B:So let's be clear here.
Speaker B:The government aggregates most of this data.
Speaker B:There are some private companies, like private payroll, that report, but almost all of it comes from government data.
Speaker A:Yeah, the bls.
Speaker A:Right.
Speaker B:Can I just be an asshole for a little bit?
Speaker B:Like I don't want any government employees to be like in my DMs.
Speaker B:Like, I don't, I'm not trying to be that guy.
Speaker B:I'm just throwing something out there.
Speaker A:Throw it out there.
Speaker B:When was the last time you're like, damn, that government agency is really efficient.
Speaker A:Oh, here we go.
Speaker A:That's why we got Doge, baby.
Speaker B:You know, like the Department of Government Efficiency.
Speaker B:But I'm just saying that, I mean, I know it sounds sarcastic and like malicious, but I'm not trying to be that.
Speaker B:I'm just, I'm saying like government agencies are known for not being efficient.
Speaker A:I mean, listen here guys.
Speaker A:If the number one thing that's holding inflation back from getting down to 2%.
Speaker A:Right.
Speaker A:Is shelter and how we aggregate this data is on a six month lag.
Speaker B:Yeah.
Speaker A: Are we in: Speaker A:What are we talking about here?
Speaker B:Well, why are we the last large country in the world to not use owner's rent equivalent?
Speaker B:Yeah, we're still using something nobody else in the world uses.
Speaker A:That doesn't make any sense.
Speaker B:And yet we're using, going like, oh, that's a good proxy for home values.
Speaker B:And it's really not.
Speaker A:And then don't act like you haven't changed the way you calculate this data.
Speaker A:They've literally changed the way they've calculated inflation CPI 20 times over 20 times.
Speaker A:And not by like little details like large swings.
Speaker B:Yeah.
Speaker A:So things can change.
Speaker A:I think it, it fits their narrative.
Speaker A:It gives them an extra tool in their, you know, in their back pocket that they can pull out and use if they ever wanted to.
Speaker B:Yeah, but see, this is a problem, so.
Speaker B:And I'm not going to.
Speaker B:Tinfoil hat time.
Speaker A:Let's do it.
Speaker B:Let's put it on.
Speaker B:The FOMC is not supposed to be influenced by the government.
Speaker B:So nobody from government can be like, hey, Jerome, my guy, my ace.
Speaker B:I saw you with that diddy party last week.
Speaker B:I'm going to go ahead and need you to change the interest rates to this, okay?
Speaker B:Otherwise you're going to be like Lebron and be out for some personal reasons for a while.
Speaker B:Okay?
Speaker A:Look at you with the poppy culture.
Speaker B:I got someone's got a feeling for.
Speaker B:Yeah, that was his name.
Speaker B:Maroon.
Speaker A:But listen, hold on.
Speaker A:There is that rhetoric that was going around.
Speaker A:I mean, the guy's name that we can't say because then we can't promote the show.
Speaker A:Okay?
Speaker A:That guy came in and said, oh, when I.
Speaker A:When I come in, I'm going to.
Speaker A:I'm going to let him go.
Speaker B:Yeah.
Speaker A:And by him, he means J.P.
Speaker A:yeah.
Speaker B:So you're talking about our president elect.
Speaker A:Yes.
Speaker B:Yeah.
Speaker A:There you go.
Speaker A:We just got flagged.
Speaker B:Yeah.
Speaker B:Damn it, John.
Speaker B:Not that YouTube trigger.
Speaker B:Yeah, I hear you, but so here's the thing is that still isn't him telling him what to do.
Speaker B:That's him making passive aggressive threats.
Speaker B:But here's what the government does.
Speaker B:Control all the data inputs that they know they look at.
Speaker B:True.
Speaker B:Right?
Speaker B:If I tell you, Saeed, Omar, my wife, that you can control our finances.
Speaker A:Okay, cool.
Speaker A:I love that.
Speaker A:I love this.
Speaker B:You control all the finances, baby.
Speaker B:Really?
Speaker A:I get to decide where we spend our money?
Speaker A:Cool, cool, cool.
Speaker B:Yeah, yeah.
Speaker B:But I'm only gonna let you look at the money that I show you.
Speaker A:Wait a minute.
Speaker A:What?
Speaker A:Yeah, but I get to control the.
Speaker B:Spending of the money that I show you.
Speaker B:You can control it all.
Speaker A:That's the right.
Speaker B:No, that's totally appropriate.
Speaker A:Yeah.
Speaker B:You think that you run everything, wifey.
Speaker A:Yeah, but I'm really running the show behind the scenes.
Speaker B:But all the decision making you're making is based off the information I'm giving you, right?
Speaker B:So if I want you to spend less this month, I just show you less money in the accounts and that's.
Speaker A:All I made, honey.
Speaker B:If I want you to spend more, I show you we're flush with cash.
Speaker A:Oh, it's a good.
Speaker A:It's been a good month.
Speaker B:Yeah.
Speaker B:Go get that Birkin, boo.
Speaker A:Yeah, that Birkin.
Speaker B:Yeah, you'd be twerking for it.
Speaker A:You know how much money you got to make to let your wife buy.
Speaker B:A Birkin you don't even know how this process works, do you?
Speaker A:Oh, no, I do.
Speaker A:You can't.
Speaker A:You got to get on a list.
Speaker A:You got to get on the list.
Speaker B:You got to know somebody.
Speaker A:But I mean, let's just say.
Speaker A:Let's just say.
Speaker A:Let's just say that all that checks out.
Speaker B:30 grand for a bag.
Speaker B:It's not bad.
Speaker A:Wait, why the shoulders are shrugging like.
Speaker A:Oh, I got that.
Speaker A:That's the.
Speaker A:That's no biggie.
Speaker B:Because I look at it like this.
Speaker B:Like they go from like 30 to 100, right?
Speaker A:Oh, don't, don't.
Speaker B:Maybe more.
Speaker B:I don't, I don't know.
Speaker A:Don't give me the.
Speaker A:Don't give me this.
Speaker B:I don't know.
Speaker B:I'm.
Speaker A:It appreciates.
Speaker B:It's an approximation.
Speaker A:Don't give me this.
Speaker B:I think on a low end, that's.
Speaker B:You know what?
Speaker B:This is a question for the Googles.
Speaker B:How much does a Birkin cost?
Speaker B:That I can't afford, I can't place in my search history.
Speaker B:My wife sees it.
Speaker A:Yeah, 30.
Speaker B:How much?
Speaker A:30 to 50 does.
Speaker B:No, they go out, they go up much higher.
Speaker B:They have really like luxury.
Speaker A:No, like starting right?
Speaker B:I think so.
Speaker B:Yeah.
Speaker A:They're like, they're like Ferrari though.
Speaker A:You can't just sell.
Speaker B:There we go.
Speaker B:Use pre owned Hermes Birkin bag being sold from Walmart for $33,000.
Speaker A:Walmart.
Speaker B:I'm not making this up.
Speaker B:Walmart sells used Birkin bags.
Speaker B:I have so many questions.
Speaker B:So here's one.
Speaker B:225,000.
Speaker B:Okay, I think this, this proves my point, so I'm gonna play it out here.
Speaker B:Okay?
Speaker B:Hermes Birkin Togo bag, 25.
Speaker B:33,000.
Speaker B:Hermes crocodile bag, 350,000.
Speaker B:Here's one on eBay for 470,000.
Speaker B:Here's.
Speaker B:Oh, the, the Hermes.
Speaker B:I can't even say that back.
Speaker B:400,000.
Speaker B:But basically they're, they're all like the same, just in different aesthetic.
Speaker B:Right.
Speaker B:And different materials.
Speaker A:Cut it.
Speaker B:So somewhere, let's just say 30 to hundreds of thousands, that's equivalent to a man's Rolex, right?
Speaker B:Depending on which one you get, it can be as cheap as like 15 grand.
Speaker B:Or it can be hundreds of thousands.
Speaker A:No, but the problem.
Speaker A:But there's a difference.
Speaker A:That's.
Speaker A:There's a difference.
Speaker A:Why, here's the difference.
Speaker A:Here, hear me out.
Speaker B:This is gonna be sexist.
Speaker B:I apologize to all of our fans.
Speaker A:No, no, you correct me if I'm wrong.
Speaker A:You're wrong.
Speaker A:Just on a, on a, on a style basis, right?
Speaker A:The Rolex that you wear Right.
Speaker A:Depending on who you are, could be an everyday watch for you.
Speaker B:Yeah.
Speaker A:Okay.
Speaker A:The Birkin bag is not an everyday bag.
Speaker B:It can 100% be an everyday bag for me.
Speaker A:No.
Speaker A:Hell no.
Speaker B:Yes, it can.
Speaker B:If you.
Speaker B:If you.
Speaker B:If you're making millions of dollars a year as a female and you've got a $33,000 bag, that's not an everyday bag.
Speaker B:It's an everyday bag for you.
Speaker B:No, you can have an everyday bag.
Speaker A:No, bags are.
Speaker A:Bags are not used the same way as watches are used, man.
Speaker A:Come on.
Speaker A:That's.
Speaker A:They're not the same.
Speaker B:Okay, well, so fine.
Speaker B:So a lot of people wear a Rolex as a daily beater watch, but they have, like, an ap.
Speaker B:Royal Oak is the one they wear out, like, nice occasions.
Speaker A:Right.
Speaker B:You know, that is.
Speaker B:Huh.
Speaker B:I'm basically talking to you.
Speaker B:Basketball.
Speaker A:No, I love the.
Speaker A:That's one of my favorite watches, the Royal Oak.
Speaker B:Is it really?
Speaker A:Yeah.
Speaker B:I don't like it.
Speaker A:I like it.
Speaker A:I like how flat it is.
Speaker A:I like the.
Speaker A:The shape.
Speaker A:Yeah.
Speaker A:I love.
Speaker A:That was a hexagon shape.
Speaker B:Yeah.
Speaker A:Yeah, it is.
Speaker B:Yeah.
Speaker B:I'm a Rolex guy through and through.
Speaker B:Rolex Presidential day date sold.
Speaker A:Really?
Speaker A:I'm a.
Speaker A:I'm a Rolex guy, but if I could afford one or an Omega guy.
Speaker A:Gotta go with the Bond.
Speaker B:I've got a vintage Omega.
Speaker A:Yeah.
Speaker B:Very nice.
Speaker B:Vintage Omega.
Speaker B:It's really nice.
Speaker B:It's one of the few.
Speaker B:I sold all my watches.
Speaker B:That was the only watch that I kept over.
Speaker A:Do you want to be like James Bond?
Speaker B:No, no, it's vintage.
Speaker B: Like a: Speaker B:Very thin.
Speaker B:Classy.
Speaker B:Classic class.
Speaker A:Classy.
Speaker B:It's broken.
Speaker A:We had this conversation earlier today.
Speaker A:When somebody calls you classy, that just means they're calling you boring.
Speaker B:That would be an accurate description of me.
Speaker B:Say.
Speaker A:I don't.
Speaker B:I don't know how to put it.
Speaker B:My exciting nights out.
Speaker B:Avoid spicy food and alcohol.
Speaker A:That's an exciting night out.
Speaker B:Yeah.
Speaker B:I'm at the point of my.
Speaker B:My adult digestive system journey where I've got to be very thoughtful about what I put in my body.
Speaker A:Otherwise, you have bad time.
Speaker B:It's not just a bad time.
Speaker B:It's.
Speaker B:I just don't feel great the next day, you know, like.
Speaker B:Plus, you know, you got to digest it.
Speaker B:It's not so good.
Speaker A:Right.
Speaker B:Plus, I'm trying to look, you know, young forever.
Speaker A:Of course.
Speaker B:This beard color ain't working for me, though.
Speaker A:You're coloring your beard.
Speaker B:No.
Speaker B:I should.
Speaker A:Would you ever?
Speaker B:No.
Speaker A:At this point, you can.
Speaker B:Right I would.
Speaker A:That'd be a hard left.
Speaker B:First of all, I'm on a podcast with you.
Speaker B:It's on camera 4K.
Speaker A:I would never let you live that.
Speaker B:I would never let me live that down either.
Speaker B:Good for you.
Speaker A:We should do it.
Speaker A:We should.
Speaker A:We should.
Speaker A:With everybody one day and just come.
Speaker B:In with, like, full black beards.
Speaker A:Can we do it one time?
Speaker B:We look like pirates.
Speaker A:Let's do it, though, huh?
Speaker A:Let's do it.
Speaker B:No, you can't do it, like, for one day.
Speaker B:No, I gotta go to work next day.
Speaker A:No, I don't know.
Speaker A:That's true.
Speaker A:Who cares, though?
Speaker B:Can't be going to work, like, ah, give me your money.
Speaker B:You know, it's just not.
Speaker B:I look back at photos of me when I had, like, a full, like, dark beard.
Speaker B:I'm like, damn.
Speaker B:Yeah, that didn't look very good, did it?
Speaker B:So we have some inflation data.
Speaker B:You want to cover that, too?
Speaker A:No, I don't have it.
Speaker A:You have it.
Speaker B:Well, tell me you don't read the show notes.
Speaker A:I'll.
Speaker B:Tell me you don't really.
Speaker A:No, no, I'm saying I don't have it.
Speaker B:Yeah, you have it in the show notes.
Speaker B:Man.
Speaker B:See this?
Speaker B:I'm sorry, everybody.
Speaker B:Only one of us doing all the work over here, you know?
Speaker B:And then I got.
Speaker A:We do have inflation data here.
Speaker B:Don't.
Speaker B:Don't act surprised after I told you to look there.
Speaker B:According to Yahoo.
Speaker B:Finance, where inflation is and where it isn't.
Speaker B:I've got some interesting inflation cost of living data at the bottom of this that I put in to make Saeed sound interesting, because otherwise he would sound very boring.
Speaker A:Mm.
Speaker A:The Shrinkflation.
Speaker B:Yeah.
Speaker B:And then I've got.
Speaker B:And this is why my phone rang in the middle of the show is I actually have my phone hooked up to Bluetooth so that I could play a clip of Jerome Powell lying his ass off.
Speaker A:Lying his ass off and trying to.
Speaker A:Trying to be funny on a time where this.
Speaker A:Yeah, this is not a time to be funny.
Speaker B:I'm gonna say that I'm an inappropriate person.
Speaker B:That's an inappropriate time to be inappropriate.
Speaker B:Okay?
Speaker A:So you can appreciate it.
Speaker B:I appreciate it.
Speaker B:But at the same time.
Speaker B:Now, I know you listen to Snoop and Dre when you're pulling up, right?
Speaker A:Look, he shot a shot, and he missed.
Speaker A:Yeah, he missed, but it's fine.
Speaker A:I can appreciate it.
Speaker A:Yeah, I liked it.
Speaker B:He's for sure listening to snoop 100%.
Speaker B:Well, give me the inflation quote from Yahoo.
Speaker B:Finance, please.
Speaker A:All right, so this from Yahoo.
Speaker A:Finance.
Speaker A:Grocery prices are up Again just in time for holiday baking and cooking.
Speaker A:According to the Bureau of Labor Statistics latest inflation numbers.
Speaker A:Eggs led the way in all too familiar refrain.
Speaker A:The price of new and used cars and medical care also pushed higher in November.
Speaker A:While overall increase in the CPI matched economists expectations rising 2.7% compared to last year and 0.3% over the previous month.
Speaker A:There was little relief for consumers buying everyday goods.
Speaker A:So this actually came in at expectations.
Speaker A:Small little problem.
Speaker A:The expectation was for it to increase.
Speaker B:Yeah.
Speaker B:And another small problem is, you know, it's all cute that some of these things have gone down.
Speaker A:Like what?
Speaker B:Well, I mean look, okay, gasoline and rental cars went down, went down by a little over 8%.
Speaker A:So that affects the headline figure, which is why we're at 2.7%.
Speaker A:But we know that core inflation is at 3.3%.
Speaker B:Yeah.
Speaker B:So auto insurance 12.7% up.
Speaker B:Yikes.
Speaker A:Yeah, I feel it too, man.
Speaker A:I felt that last because you know, they make you pay, I have a six month policies and then what they do is they, they highlight all your monthly payments going to be X.
Speaker B:They're making you do this thing now where you pay two months in advance.
Speaker A:These motherfuckers, bro.
Speaker B:What the fuck is that bullshit about?
Speaker A:That's, that's what caught me off guard.
Speaker B:So bills like way more than it otherwise would be.
Speaker A:So.
Speaker A:So they, they highlight, they do what Tesla did.
Speaker A:Yeah, right.
Speaker A:That's a go.
Speaker A:This is your monthly payment.
Speaker A:This, this is how much your monthly payment is.
Speaker A:But they're really calculating your gas savings too.
Speaker B:Yeah.
Speaker B:And like we're going to bill you on this though, right.
Speaker B:And you're like, wait, what?
Speaker A:So it's like this is your monthly payment, but the first payment, we collect 25 of the entire bill.
Speaker A:I'm like the.
Speaker A:Is this.
Speaker B:Yeah, I don't like that.
Speaker A:What do you mean?
Speaker A:No, no, no, Just spread it out evenly.
Speaker A:I just want to spread it out even.
Speaker A:Nah, that's just the way we do things.
Speaker B:We had a policy change.
Speaker B:What?
Speaker A:Yeah, what is that?
Speaker B:I had a policy change.
Speaker B:You?
Speaker A:Yeah, because I was, I was going over the bill and I asked, I was like, I asked my wife, I'm like, didn't they say it was going to cost this?
Speaker B:And they're like, this was like a three month headache for me.
Speaker B:I got the bill, I didn't understand it.
Speaker B:Waited the next day.
Speaker A:Yeah.
Speaker B:Called them, they explained it to me.
Speaker B:I'm like, that'll make sense.
Speaker B:Did some research on it, didn't understand it, called them back.
Speaker B:Yeah, like bro can break this down to me.
Speaker B:They explained to me again, I still don't understand it.
Speaker A:Right.
Speaker B:But I am not a stupid person.
Speaker B:Okay?
Speaker A:I could be like, trust me, I got numbers.
Speaker B:Stupid.
Speaker B:Yeah.
Speaker A:Numbers are my thing.
Speaker B:Yeah.
Speaker B:Like, I know this.
Speaker B:I will fudgeing out you on my podcast.
Speaker B:God damn it.
Speaker A:But so.
Speaker A:So I was like.
Speaker A:I even called later, like, what you guys are doing.
Speaker A:Since when you guys doing that?
Speaker A:Oh, we've been doing that since last year.
Speaker B:I'm like, no, you didn't.
Speaker A:I'm like, no, that's not true.
Speaker A:That's not true.
Speaker A:And then I'm like, okay, fine.
Speaker A:You know, if that's the case, then I'm going to have to start shopping around for other policies.
Speaker B:And they're like, you go ahead.
Speaker A:Yeah, yeah.
Speaker A:Literally.
Speaker A:She goes, well, if that's what you have to do, sir.
Speaker B:Yeah.
Speaker B:I'm like, you got to do.
Speaker B:By the way.
Speaker B:Let's just have this conversation now.
Speaker B:I get this out of my chest.
Speaker B:Anytime someone says to you.
Speaker B:This has happened to me a lot lately.
Speaker B:Okay, okay.
Speaker B:They say to you, well, side, you got to do what's best for you.
Speaker A:Oh, man.
Speaker A:See what you're doing there?
Speaker A:I know what you're doing.
Speaker A:You're trying to get me to overreact.
Speaker B:You got to do what's best for you.
Speaker A:Yeah.
Speaker A:What is that?
Speaker A:What are they.
Speaker B:I don't want to tell you what to do because you need to do what's best for you.
Speaker B:But, you know, it is what it is.
Speaker A:Yeah.
Speaker A:I'm not gonna give you what you wanted, so you might have to do what's best for you.
Speaker B:No, you.
Speaker B:You've got to do what's best for you.
Speaker B:You got to prioritize.
Speaker B:You okay.
Speaker A:Yeah.
Speaker A:We want you to take care of you.
Speaker B:Yeah.
Speaker B:Make sure you're good.
Speaker A:Yeah.
Speaker B:Because this right here ain't working in your favor.
Speaker A:So you know what?
Speaker A:I did?
Speaker A:Shopped around a little bit, finding out that all these are doing this.
Speaker B:Yeah.
Speaker B:It was a policy change.
Speaker B:California, not a state policy change.
Speaker A:I believe we got.
Speaker B:I don't even know if it's national or not.
Speaker B:I have no idea.
Speaker B:I know California's doing it.
Speaker A:We got to take our California asses and move to a state and ruin that state, too.
Speaker B:Let's go to Alaska.
Speaker A:They probably have a good time out there.
Speaker B:They probably have a real good time.
Speaker B:All those days of sunshine and all those days of winter.
Speaker A:Well, we could be tour guides, bro.
Speaker A:Imagine you.
Speaker A:You and I as tour guides.
Speaker A:We would crush.
Speaker B:I don't think so.
Speaker A:Oh, yeah.
Speaker A:Come on.
Speaker A:We would attract a certain demographic.
Speaker B:I don't think you need a cold plunge if you live there, right?
Speaker B:Like, you're just cold.
Speaker A:You're just sleeping in cold, bro.
Speaker B:They have those blankets to keep your car warm.
Speaker B:So when you started it, when, like, all the fluids aren't pre frozen in it.
Speaker A:I've always wanted to go into an igloo.
Speaker A:They got igloos out there, right?
Speaker B:You're not the kind of.
Speaker B:You're not the igloo type.
Speaker A:What do you mean?
Speaker A:Hold on.
Speaker A:I didn't say.
Speaker A:Wait.
Speaker A:I didn't say I'd sleep there.
Speaker A:I'd say.
Speaker B:You got.
Speaker B:You got a Christian for it.
Speaker A:I gotta visit.
Speaker A:I gotta visit.
Speaker A:I gotta see it one time.
Speaker A:One time for the one time.
Speaker B:I do.
Speaker B:Look, I.
Speaker B:I'm all for cold therapy, but I like to get into it and get out.
Speaker B:That's the whole point.
Speaker B:Yeah, yeah.
Speaker A:Quick.
Speaker B:Not quick.
Speaker B:I'll be in there for a couple minutes.
Speaker A:That's quick.
Speaker B:Live there.
Speaker A:No, see, I don't do a couple minutes.
Speaker A:That's.
Speaker A:For me, a couple minutes is quick.
Speaker A:That's not.
Speaker A:I'm not a quick guy.
Speaker A:I want to be in there for a long time.
Speaker B:The igloo.
Speaker A:The igloo.
Speaker A:Right, right, exactly.
Speaker A:You see what I'm doing?
Speaker B:Yeah, no, I get it.
Speaker B:You're trying to show me how much.
Speaker A:Ice is in your veins.
Speaker A:Way to bring it back full circle, bro.
Speaker A:You're a professional.
Speaker B:I've been doing this for a little bit.
Speaker B:You know what I mean?
Speaker B:So I thought that I would go down the egg route because anytime, eg, number one source of inflation, I thought, let's talk about some egg price inflation, shall we?
Speaker A:Okay.
Speaker B: In: Speaker B:God damn avian flu.
Speaker A:I was buying those eggs too.
Speaker B:But you were.
Speaker B:The current trend, despite slight relief earlier this year, egg prices remain volatile.
Speaker B:It's not a vix for egg prices, by the way.
Speaker A:I know, right?
Speaker B:Making holiday baking more expensive.
Speaker B:Of course.
Speaker B:I'm a sick bastard who thinks about holiday baking because.
Speaker B:Love baking.
Speaker A:So fucked up.
Speaker B:Car prices are out of control.
Speaker B:Little fun fact there.
Speaker B:The average price of a new car in the US is now over $48,000.
Speaker A:Yeah, average makes you.
Speaker A:Makes you think about what you're gonna have to buy Carter.
Speaker A:Huh?
Speaker B:Oh, I know I don't buy him.
Speaker A:For his first car.
Speaker B:Yeah, I know.
Speaker A:I'm buying already for his first car.
Speaker B:But by that time, you're gonna buy.
Speaker A:Him a beater first, right?
Speaker A:Tesla, his first car is gonna be.
Speaker B:It's gonna be autonomous driving.
Speaker B:Tesla.
Speaker B:I can tell it where to go, when to come back.
Speaker A:I'm driving.
Speaker A:I'm driving your car from my phone, son.
Speaker B:No, no, no car.
Speaker B:Your son's cut.
Speaker B: n, your car is coming home at: Speaker B:Be in it.
Speaker B:I'm ready for you, dog.
Speaker A:Yeah.
Speaker A:You summon the car to pick him up.
Speaker B:You're playing checkers, I'm over here playing chess.
Speaker A:That's great.
Speaker A:I love that.
Speaker A:Yeah, I love that.
Speaker B:It's gonna be out front, wherever you're at.
Speaker B:Yeah.
Speaker A:It's gonna be there for five minutes.
Speaker B:Yeah.
Speaker B: If you're not in the car by: Speaker A:Yeah, exactly.
Speaker A:Good luck.
Speaker B:By then, I'll probably call it drone Uber.
Speaker B:Go pick them up, fly in the aliens, be picking them up.
Speaker B:If you're in New Jersey, you know what I'm talking about.
Speaker B:The average age of cars in the road has hit a record 12.5 years because people just can't afford new ones.
Speaker B:I didn't realize that 12.5 years old is the average age of a car on the road.
Speaker A:Yeah.
Speaker B:That's a lot of older cars on the road.
Speaker B:So I don't know how they come.
Speaker A:With that, but yeah, that's going.
Speaker A:And that's.
Speaker A:That's.
Speaker A:Man, those people, those cars eventually.
Speaker A:Right.
Speaker A:Are gonna need to get replaced.
Speaker A:And people that don't have car payments.
Speaker A:I'm like, God, you're so fortunate.
Speaker A:I love that.
Speaker A:I need to get there again.
Speaker A:I had that for a little bit.
Speaker A:Short window of time.
Speaker B:I had it for a while too.
Speaker B:It was amazing.
Speaker A:Just pontificate a little bit.
Speaker A:Let's reminisce.
Speaker B:The Jeep is good.
Speaker B:I still.
Speaker B:I still owe some money in the Rivian.
Speaker B:I gotta pay it off.
Speaker B:I haven't done it yet.
Speaker B:I gotta do it.
Speaker A:Yeah.
Speaker B:The problem is I don't.
Speaker B:I don't like, know where the economy's going.
Speaker B:So, you know, I don't wanna dump.
Speaker A:All that cash right now.
Speaker A:Right now.
Speaker A:The message still is hold on to the cash.
Speaker B:Yeah.
Speaker B:Adam hit me up from my pump.
Speaker B:He's like.
Speaker B:By now I'm like, no, no, stop.
Speaker B:No.
Speaker A:Yeah.
Speaker A:Hold, hold, hold.
Speaker B:I'm just gonna get a water bottle and spray him.
Speaker B:Next time he asked, we should.
Speaker A:We should have like a little signal here.
Speaker A:Should move one of the bottles.
Speaker A:Until this bottle moves from here, you hold.
Speaker B:Do they Dave Ramsey or Brad Pitt?
Speaker B:You can guess which one means by right.
Speaker A:Exactly.
Speaker B:When this picture changes, when it's got hair and it's attractive.
Speaker A:My gods.
Speaker A:I was on.
Speaker A:I was.
Speaker A:I gotta.
Speaker A:I have to say this.
Speaker A:I was scrolling through YouTube.
Speaker B:You see, you don't talk about my hand gestures.
Speaker A:Look, I'm not doing this.
Speaker B:Yeah.
Speaker A:Last time I did this, you made fun of me.
Speaker B:Yeah, but.
Speaker A:So I had to do this.
Speaker B:Isn't it better, bro?
Speaker B:It looks like you're playing a very small violin, if you know what I mean.
Speaker A:Right.
Speaker A:And one of your boy Ramsey's shorts came on.
Speaker A:He's got like, the whole collar when they call in asking for advice.
Speaker B:Very arrogant.
Speaker B:Very arrogant, very arrogant.
Speaker A:The guy calls in, is like, so I just got a windfall of money and I don't know what to do with it.
Speaker A:And goes, okay, well, let's talk about it.
Speaker B:There's a thing called pink cocaine.
Speaker A:It's great for you.
Speaker A:Yeah.
Speaker A:You have a lot of fun.
Speaker B:It's designer.
Speaker A:Yeah.
Speaker A:And the guy calls in, he goes, so I just inherited $50 million.
Speaker B:$50 million, right.
Speaker A:That was it.
Speaker A:That was.
Speaker B:Came out swinging.
Speaker A:Right.
Speaker B:So Ramsay goes, no, you didn't.
Speaker A:They was like, what?
Speaker A:Like you didn't know you were going to get this?
Speaker A:He's like, no, I had no idea.
Speaker A:My uncle gave it to me, left it for me after he passed away.
Speaker A:I'm like, God damn, where my uncle's at?
Speaker A:Come on.
Speaker A:You know?
Speaker A:Like, I wish I.
Speaker A:Let me get some of that.
Speaker B:Yeah, I don't have an uncle like that.
Speaker A:But I'm just like, also, what is this?
Speaker B:You don't need financial.
Speaker B:You know, you need.
Speaker B:At that point.
Speaker B:Yeah.
Speaker B:You don't need Dave Ramsey.
Speaker B:You need a financial advisor.
Speaker B:Yeah, just go get somebody who's going to manage it for you.
Speaker A:Right?
Speaker A:So he's like.
Speaker A:He's like, let me put you in contact with somebody.
Speaker B:Yeah.
Speaker B:Dave Ramsey is probably like, how can I get money off this guy?
Speaker B:Yeah, he's stupid.
Speaker A:Yeah.
Speaker B:That's how he treats people.
Speaker A:How can I collect these fees?
Speaker B:Yeah.
Speaker B:He's a terrible human being.
Speaker B:The guys at my pump hate that because they have their connections and friends over there.
Speaker A:Yeah, I know.
Speaker B:Yeah.
Speaker B:So not everyone.
Speaker A:Not everyone's terrible.
Speaker B:Just.
Speaker A:Just him.
Speaker B:I mean, he isn't the worst human alive.
Speaker A:There's worse.
Speaker B:Yeah.
Speaker B:So the guy who shot the UnitedHealthcare CEO, he's probably worse.
Speaker A:Oh, Luigi.
Speaker A:Yeah, he's allegedly.
Speaker A:Right.
Speaker A:We don't know.
Speaker A:Allegedly.
Speaker B:Allegedly did.
Speaker B:He's worse.
Speaker A:Allegedly.
Speaker B:Allegedly.
Speaker B:Sam Bankman Fry is worse.
Speaker A:Yeah.
Speaker A:There's a lot of people.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:There's a few little worries.
Speaker B:I mean, you know?
Speaker B:Right, right, right.
Speaker B:I don't want him to think he's the only one.
Speaker B:So to cap the show here, anytime there is an economic term which makes me think of phallic jokes, I have to exploit it.
Speaker B:So let's talk about shrinkflation, shall we?
Speaker B:Shrink.
Speaker A:This is a term.
Speaker A:We did not make this up.
Speaker B:No, I mean it.
Speaker B:And surprisingly, it has nothing to do.
Speaker A:With cold showers or plunges.
Speaker A:Right?
Speaker B:Yeah, surprisingly, it doesn't come out during a cold plunge.
Speaker B:And when it does, it hurts.
Speaker B:Yeah.
Speaker B:Like, you know how your fingers get numb because.
Speaker B:Less circulation.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker A:Okay.
Speaker B:It's a thing.
Speaker A:That's.
Speaker A:Okay.
Speaker A:It's painful.
Speaker B:Yeah.
Speaker A:All right.
Speaker B:Should we get into that?
Speaker A:No, we don't need to.
Speaker A:Yeah, sure.
Speaker B:It's real time.
Speaker A:Let's get into.
Speaker A:Let's get into your shrinkflation.
Speaker B:Okay.
Speaker B:Shrinkflation, or getting less product for the same price, is becoming a problem in America.
Speaker B:So if inflation in and of itself wasn't an issue, let's say you go and bag a.
Speaker B:Buy a bag of Doritos, okay?
Speaker B:It's rampant.
Speaker B:And I don't really.
Speaker B:I don't think most people realize this, bro.
Speaker A:I said this to you.
Speaker A:Hold on.
Speaker A:I'm gonna take my shot against you here right now.
Speaker A:The fact that you put this in the show notes.
Speaker B:It's in my show notes, bro.
Speaker A:Bro, hold on.
Speaker A:I said this to you over a year and a half ago, and you made fun of me for it.
Speaker B:There's no written proof.
Speaker A:I said, bro, people are paying the same amount for their toilet rolls of paper.
Speaker B:Yeah.
Speaker A:And they're not getting the same amount of paper.
Speaker A:You're like, who's counting the paper toilet rolls, bro?
Speaker A:I'm like.
Speaker A:I'm telling you, it's happening.
Speaker A:It's happening To Doritos.
Speaker A:I even said Doritos.
Speaker A:God damn.
Speaker A:The fact that you saying this shit now is pissing me off.
Speaker B:You.
Speaker A:You didn't want to listen to me then.
Speaker A:Yeah, you're.
Speaker B:Because you're the guy who sees like a drone.
Speaker B:You're like, oh, my God.
Speaker B:UFOs.
Speaker A:UFOs.
Speaker A:You're a piece of work, bro.
Speaker B:Piece of work.
Speaker B:Talk about it.
Speaker A:Piece of work, Bro.
Speaker B:This isn't about you.
Speaker B:This is about Jerome.
Speaker B:Okay, calm down.
Speaker A:I'm gonna let you get to Jerome.
Speaker B:But he'll make me feel better.
Speaker B:According to Saeed, a family sized bag of Doritos shrank from 17 ounces to 15.5 ounces.
Speaker B:You happy now?
Speaker A:Yeah, Saeed.
Speaker A:Yes, Me.
Speaker B:Yeah.
Speaker A:Green jacket.
Speaker B:Get a fucking laureate for Doritos bags.
Speaker A:God damn.
Speaker B:Toilet paper rolls.
Speaker B:The second one.
Speaker A:I told you, bro, I nailed this shit.
Speaker B:I just put them in reverse order.
Speaker B:Toilet paper rolls, well, they often have fewer sheets, but prices remain the same.
Speaker A:I don't miss, bro.
Speaker A:I see my veins.
Speaker A:I don't miss.
Speaker B:That's not what that means.
Speaker B:Okay, well, you may have been slightly accurate.
Speaker B:I don't know.
Speaker B:But the person who doesn't believe that shrinkflation is real isn't you or me.
Speaker B:It's actually Jerome Powell.
Speaker A:JP doesn't believe in shrinkflation.
Speaker B:He does not believe in shrinkflation.
Speaker B: letter, as we said in May of: Speaker B:It's transitory, right?
Speaker B:If you recall, when the Fed came out swinging, they said that inflation is transitory.
Speaker B:It goes up and it goes down.
Speaker B:It's having a real time going hard time going down, but it goes up and it goes down.
Speaker B:It comes in, it goes, it comes and it goes.
Speaker B:It's inflationary, it's transitory.
Speaker A:This was, this was their explanation to not raising rates initially when we started to experience inflation out the gate.
Speaker B:So Fed chair Jerome Powell was asked about stagflation and he said that he doesn't see the stag or the flation.
Speaker A:The stag or the shit.
Speaker B:I guess now we're seeing the stag and inflation, huh?
Speaker B:So let.
Speaker B:But you know what, don't take it from us.
Speaker B:Who are we to tell you stuff like this?
Speaker B:It doesn't do us any good.
Speaker A:Just as a reminder for everyone, what is stagflation?
Speaker A:Right?
Speaker A:That's when GDP is going down, when unemployment is going up.
Speaker B:That's right.
Speaker A:Demand what people go out there and what they're willing to buy.
Speaker A:That also goes down.
Speaker A:But inflation is still going up.
Speaker B:Yeah.
Speaker B:And just in case you need some humor for today.
Speaker B:Ready?
Speaker A:Let's do it.
Speaker B:I'm.
Speaker B:I'm going to give you some good old school JP from the hood.
Speaker A:From the hood, yeah.
Speaker B:In addition, I would say, you know, most forecasters, including our forecasting, was that last year's level of growth was very high, 3.4% in I guess the fourth quarter, you know, and probably not going to be sustained and would come down, but that would be, that would be our forecast.
Speaker B:That wouldn't be stagflation.
Speaker B:That would still be to a very healthy level of growth.
Speaker B:And of course with inflation, you know, our.
Speaker B:We will return inflation to 2% and that won't be So I don't see the stag or deflation.
Speaker B:Actually.
Speaker A:The pity.
Speaker A:Laughs that he got to.
Speaker A:Come on, man.
Speaker B:I don't see the stag or the flashing stags.
Speaker B:Right here, Jerome.
Speaker B:That's me dog.
Speaker A:Yeah, Come on.
Speaker B:I'm very inflationed right now.
Speaker A:They should have.
Speaker A:Should have walked off the podium right after he said, I don't see the stag or inflation.
Speaker A:I'm out.
Speaker B:Yeah, it's just.
Speaker B:It's.
Speaker B:It's not.
Speaker B:It's not good.
Speaker A:See y'all in January.
Speaker A:Yeah.
Speaker B:And here's the problem.
Speaker B:Transition.
Speaker B:Transitioning from that to.
Speaker B:To anything he says afterward, all you're going to do is look at him and go, stagflation, stag.
Speaker A:Yeah.
Speaker B:Stag or deflation.
Speaker B:Like that's your best joke.
Speaker A:That's.
Speaker A:I don't see the stag or the flation.
Speaker B:I thought your best joke was inflation was transitory.
Speaker A:Well, it's.
Speaker A:It's really convenient, right, when you don't see the stagflation.
Speaker A:When we actually said, this is what we've been most fearful of all along, that that's where we were headed.
Speaker A:Right?
Speaker A:Because we knew that hyperinflation, that.
Speaker A:That's going to take a long time to get to.
Speaker A:If something like that were to happen and inflation to get out of control, that's like probably a decade, two decade problem.
Speaker A:Okay.
Speaker B:Yeah.
Speaker A:Something like stagflation, Very, very possible.
Speaker B:We're in it, man.
Speaker A:Yeah, we're definitely in it.
Speaker A:But that won't show up when the Bureau of Labor Statistics, they're the ones curating, showing the data, making the data to prove their point, Right?
Speaker B:And I'm pretty sure everybody.
Speaker B:The National Bureau of Economic Research is dead.
Speaker B:No one really works there anymore.
Speaker B:Have you heard a single thing from them?
Speaker A:Think about it.
Speaker A:Who goes to them for anything else other than are we in a recession or not?
Speaker B:Yeah.
Speaker A:Did we experience a recession, bro?
Speaker B:Like, you know how that.
Speaker A:What else do y'all do over there?
Speaker B:In every single movie about aliens, every single movie, when they first get to Earth, there's always that guy in some place where there's some kind of telescope or like radar technology, and he's just sitting there kind of nerding out, usually reading a Playboy or something, and it's really boring and mundane, and he's kind of, as, you know, whatever, chilling out.
Speaker B:It's always late at night and nothing's going on.
Speaker B:And all of a sudden you hear bleep, blip, blip.
Speaker B:And he, like, frantically goes over the screen.
Speaker B:He taps it.
Speaker A:Yeah.
Speaker B:Oh, Something's wrong with the equipment.
Speaker B:And the next thing you know, it's like, oh, my God, there's UFOs everywhere.
Speaker B:Yeah.
Speaker B:That's what we're dealing here.
Speaker A:Yeah.
Speaker A:Late to the game.
Speaker B:Yeah.
Speaker B:National Bureau of Economic Research is sitting in a room somewhere just chilling.
Speaker A:Who's the director over there?
Speaker B:I don't know.
Speaker A:I need to hear from the Director of marketing.
Speaker B:Probably laid off.
Speaker A:No one's figured it out yet.
Speaker B:Yeah.
Speaker B:I'm sure it's.
Speaker A:They put him in the closet with the red stapler.
Speaker B:Yeah.
Speaker B:Or it's AI driven now.
Speaker B:It's like, get rid of them all.
Speaker A:Not yet.
Speaker A:They will be, though.
Speaker B:Yeah.
Speaker A:Doge is going there first.
Speaker B:Yeah.
Speaker B:First point of authority.
Speaker B:All right.
Speaker B:We're going to place the National Bureau of Economic Research with an algorithm, and it's going to say, if you've had two successive quarters of negative GDP growth equals recession.
Speaker A:That's it.
Speaker B:And every time they see that data come in, it's going to go, recession.
Speaker A:There you go.
Speaker A:Yeah.
Speaker A:The light turns on.
Speaker B:Yeah.
Speaker B:And then when you have, you know, the recession go away, it's going to go recession over.
Speaker A:Yeah.
Speaker A:It's so simple.
Speaker B:And why do you need a national bureau for that?
Speaker B:Why can't you just have one person.
Speaker A:You know, they're doing.
Speaker A:They got to be doing a lot.
Speaker A:I know they do studies and research on a bunch of that.
Speaker A:We're.
Speaker B:Are you fucking serious?
Speaker B:You're playing politically correct now?
Speaker A:No, no, no.
Speaker B:You've been doing this show for years.
Speaker A:I'm not saying.
Speaker B:Name one report you've ever heard come out of the National Bureau of Economic.
Speaker A:None.
Speaker A:I'm not.
Speaker A:I'm not saying.
Speaker A:But hold on.
Speaker A:They're doing some.
Speaker A:Are they?
Speaker B:Yeah.
Speaker B:You don't know.
Speaker B:Let's go ahead.
Speaker A:I'm on the website.
Speaker A:Yeah, I'm on the website.
Speaker A:What they do the National Bureau of Economic Research.
Speaker A:Okay.
Speaker A:They're conducting.
Speaker B:Oh, it's a bad start.
Speaker A:Nonpartisan economic research.
Speaker A:Okay.
Speaker B:Not political economic research.
Speaker B:Great.
Speaker B:Thank you for that.
Speaker A:Business cycle data information.
Speaker A:New this week.
Speaker A:Oh, new this week.
Speaker B:Okay.
Speaker B:What is it?
Speaker A:Working papers.
Speaker A:Oh, let's go explore working pages.
Speaker A:Here's the first one.
Speaker A:Toward an understanding of the political economy using field experiments in policy making.
Speaker B:What the.
Speaker B:Does that happen?
Speaker A:What the.
Speaker A:Are y'all doing over there?
Speaker B:Recession or no recession?
Speaker A:Next one.
Speaker A:Beyond somebody's name.
Speaker A:Can firearm training replace local discretion in concealed carry permitting?
Speaker B:Why is that?
Speaker A:Why?
Speaker A:What are you guys doing?
Speaker A:Why are you dabbling into this?
Speaker B:National Bureau of Economic Research.
Speaker A:Firearm training replace local discretion in Concealed carry permitting.
Speaker B:Why is that?
Speaker B:Economic research.
Speaker A:What are y'all doing?
Speaker A:We're not.
Speaker A:I'm not making this up.
Speaker A:This is straight off the website.
Speaker B:They doing something else.
Speaker A:And right here, look.
Speaker B:New.
Speaker A:All these are new.
Speaker A:This is a new study.
Speaker A:A new new research.
Speaker A:Point.
Speaker A:Knowledge suppression and resilience under censorship.
Speaker A:Three century book publications in China.
Speaker B:Who needs that research?
Speaker A:What the fuck, man?
Speaker B:Who want, like.
Speaker B:Who's like.
Speaker B:Oh, my God.
Speaker B:I.
Speaker B:I needed this research.
Speaker B:Thank you so much.
Speaker A:I need.
Speaker A:Yeah, you know what?
Speaker A:Elon and Ramaswamy, that's the first group.
Speaker B:You cut right there.
Speaker A:They got to go here first.
Speaker B:You don't even AI for this.
Speaker A:This is easy work.
Speaker B:Yeah.
Speaker B:GDP negative.
Speaker B:Great.
Speaker B:GDP negative great equals recession.
Speaker A:Done.
Speaker B:Done.
Speaker A:Yeah.
Speaker B:All the rest is firearm.
Speaker B:Nobody cares not.
Speaker B:I can guarantee you three people have read that report.
Speaker A:Why aren't they reviewing?
Speaker A:Cpi, ppi, all that?
Speaker A:Like, they should be producing their own SCP every single month.
Speaker B:Yeah, easy.
Speaker B:Yeah, but we don't.
Speaker A:We don't waste.
Speaker B:We don't.
Speaker B:Well, that's a show, kids.
Speaker A:That is a show.
Speaker A:Good job, man.
Speaker A:Yeah.
Speaker B:You got ice in your veins.
Speaker B:Yeah.
Speaker A:This is the mellow.
Speaker B:What the.
Speaker B:What is.
Speaker B:What does that mean?
Speaker A:Three to the dome.
Speaker A:Oh, it's so good.
Speaker A:You can't see me.
Speaker A:You know they can't see me.
Speaker A:It was another good one.
Speaker A:You know, the one that they.
Speaker A:All the kids.
Speaker A:Adam.
Speaker A:Adam does this to be in the backyard.
Speaker A:Sometimes they'll score and he'll put his hand, like, down.
Speaker A:Like, too little.
Speaker A:You're too little.
Speaker B:But he's little.
Speaker A:I know, but it's like, I just need to insult you that you are not big enough.
Speaker A:You need to be bigger.
Speaker B:I want to make small.
Speaker B:Yeah.
Speaker A:No, like, I know that I'm small, but, like, in order for you to guard me, you need to be way bigger.
Speaker B:What if they didn't go to the post then?
Speaker A:That's the thing.
Speaker A:No, you drive past somebody and you laid, and the guy tries to block it.
Speaker A:And you couldn't block it because he got it over you.
Speaker A:He's like, you're too.
Speaker B:So basically, in order to watch basketball, you learn sign language.
Speaker B:You.
Speaker A:Exactly.
Speaker B:That's too much.
Speaker A:There's all kinds.
Speaker A:Yeah.
Speaker B:I don't have the energy anymore.
Speaker A:Steph's a good one.
Speaker A:Steph has a really good one.
Speaker B:I don't want to know it.
Speaker A:It's good.
Speaker A:No, he didn't.
Speaker A:He did in the Olympics.
Speaker B:What?
Speaker A:Really?
Speaker A:When he makes, like, the game clinching ceiling 3.
Speaker B:He does a good night.
Speaker A:He does a good night.
Speaker A:Go to sleep.
Speaker A:I put you to bed.
Speaker B:Why can't you just make a shot?
Speaker B:Like, why?
Speaker A:Why?
Speaker B:With all the extra gestures.
Speaker A:Yeah, exactly.
Speaker B:It's like every rapper's got to be like, when they start.
Speaker A:They need the hype, man.
Speaker B:They need that.
Speaker B:No, they need to intro themselves.
Speaker B:Everybody makes a weird sound when they start.
Speaker A:Huh?
Speaker B:Yeah.
Speaker B:Huh.
Speaker B:We shot every podcast like that.
Speaker B:Yeah, yeah.
Speaker B:Huh.
Speaker A:Huh.
Speaker B:Jp, DJ Khaled.
Speaker A:Yeah, and another one.
Speaker B:Yeah, See, they all have their thing.
Speaker A:We got it.
Speaker A:Yeah, we did our own thing.
Speaker B:When did that become a thing where everybody's got to have, like, their own sound when they start?
Speaker A:I found some.
Speaker A:There's some really cool stuff with this, by the way.
Speaker A:So go back and do yourself a favor.
Speaker A:This is actually kind of cool.
Speaker B:I don't want to do this already.
Speaker A:So you know every DJ has their own intro, right?
Speaker A:You got back in the day, was who, kid?
Speaker A:It's like.
Speaker A:Or DJ Khaled is.
Speaker A:And another one.
Speaker B:Right?
Speaker A:All these DJs have their own thing.
Speaker A:DJ Mustard, all that, right?
Speaker B:I don't know who DJ Mustard is.
Speaker A:Come on, man.
Speaker A:He's like.
Speaker A:He's in on the whole Kendrick, Drake.
Speaker A:Okay.
Speaker A:Anyways, you don't know.
Speaker B:Okay, sure.
Speaker A:So Pharrell, which I know you like.
Speaker B:Yeah, I do.
Speaker B:All right.
Speaker A:Okay.
Speaker A:Cool guy, right?
Speaker B:Got a little weird.
Speaker B:Yeah, yeah, yeah.
Speaker A:I mean, I don't vibe with all the stuff, but you get what I mean.
Speaker A:I don't know.
Speaker A:We can.
Speaker A:We can't co sign.
Speaker B:I don't know if he's creative.
Speaker A:I don't know if he's been to diddy parties.
Speaker A:I can't co sign yet.
Speaker B:I don't think that he has.
Speaker A:Come on, Come on.
Speaker B:He didn't strike me as a diddy party guy.
Speaker B:I feel like if he went to a diddy party, like, you know, Right.
Speaker A:He's out early.
Speaker B:Yeah, yeah.
Speaker A:He's getting his.
Speaker B:His beauty sleep, kids, he seems.
Speaker A:But his thing is because, you know, he.
Speaker A:He raps, but he also known for making beats.
Speaker B:As part of the Neptunes.
Speaker A:As part of the Neptunes.
Speaker B:Right.
Speaker A:So when he produces beats, there's a very clear cut, four beat distinction.
Speaker A:If it's the same beat in a row four times, that's his signal.
Speaker A:So it's not a.
Speaker A:A lyric or something that he says to signal.
Speaker A:This is mine.
Speaker A:But it's always like a dun, dun, dun, dun, and then it goes in or whatever the beat is.
Speaker A:And I thought it was really cool when somebody told me that.
Speaker A:I went back and listened to all the Pharrell songs I have on my itunes, and I was like, God damn, he does do that.
Speaker B:Yeah.
Speaker B:Every single one of them has that.
Speaker A:Every single one has, like, a 4B progression.
Speaker A:And then it goes right into the song.
Speaker B:Yeah.
Speaker B:You know, song happy.
Speaker A:Yeah.
Speaker A:Yep, That's.
Speaker A:Yeah, he does that.
Speaker A:And that one too.
Speaker A:Yeah, that was one of the ones I checked.
Speaker B:Yeah.
Speaker B:Every single one of his songs was like, that way.
Speaker A:The one with.
Speaker A:The one with Snoop Dogg where he just drop it like it's hot.
Speaker A:Yeah, that one.
Speaker A:He does it in that one too.
Speaker A:Yeah.
Speaker B:And then there's a Lego movie coming out with him about his life.
Speaker A:That's coming out about his life.
Speaker B:Yeah.
Speaker B:It was weird.
Speaker B:He.
Speaker A:So he is a lego movie about his life.
Speaker B:Yeah.
Speaker B:So all lego characters.
Speaker B:Lego characters.
Speaker B:All him and people around him in his ecosystem, but it's a movie.
Speaker B:It's a lego movie about Pharrell's life.
Speaker A:This sounds like the coolest thing ever.
Speaker B:And it's coming out, and it's got a whole pharrell based soundtrack.
Speaker B:And it starts off with the same four beats.
Speaker A:No way.
Speaker B:I don't know how that deal got brokered.
Speaker B:Can you imagine?
Speaker B:Like, he's like, oh, yeah.
Speaker A:That's brilliant, though.
Speaker B:Creative director of.
Speaker B:I mean, talk about a weird, like, life arc.
Speaker B:I'm creative director of Louis Vuitton.
Speaker B:I'm now embracing country western as part of my style aesthetic.
Speaker B:And I'm chopping it up in Paris and Milan and, you know, I'm in this ecosystem.
Speaker A:Right.
Speaker B:I'm a very popular producer, rapper.
Speaker B:I'm in tight with that space.
Speaker B:I'm very much into fashion.
Speaker B:Obviously.
Speaker B:I feel like a lego movie comes next for me.
Speaker B:Like, how did that plug happen?
Speaker B:Yeah.
Speaker A:You know, he's just gonna sit back.
Speaker A:Yeah.
Speaker A:Oh, that's.
Speaker A:That's pretty cool.
Speaker B:When your brand's that big, where this is what you're touching.
Speaker B:Like, come on.
Speaker A:Yeah.
Speaker B:He made it like you did.
Speaker B:You did something right.
Speaker A:He won.
Speaker A:Yeah, he won.
Speaker B:It's just.
Speaker B:It's incredible.
Speaker B:Yeah.
Speaker A:All right, well, you know, anything else?
Speaker B:Speaking of losing, shall we call it her out?
Speaker A:Good night, everybody.
Speaker A:Okay, bye.
Speaker B:Oh, good job, old school.
Speaker A:Goodbye.
