Jerome Powell’s Last FOMC: Inflation, Recession Pain & the Fed’s Big Lie
In Episode 334 of The Higher Standard, Chris and Saied give Jerome “Transitory” Powell the only farewell THS knows how: part tribute, part roast, part macro autopsy. From his final FOMC press conference and the fight over Fed independence to inflation, oil shocks, AI job losses, recession-level consumer pain, credit card delinquencies, and an overcooked stock market, this episode breaks down why the economy feels broken even while the suits keep calling it “resilient.” Powell may be leaving the mic, but the money printer’s legacy is still sitting on America’s balance sheet.
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🔗 Resources:
FOMC Press Conference, April 29, 2026 (The Federal Reserve via YouTube)
Paul Tudor Jones says the US is more dependent on equity prices than ever… (Patrick OShaghnessy 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
You ain't shouting for two days.
Speaker A:You're like Kevin Durant, a saint.
Speaker B:Yeah.
Speaker A:I love.
Speaker A:I love that he openly owns the fact that he's got multiple burner accounts.
Speaker B:Dude, he's the dirtiest dude in the NBA, figuratively and literally.
Speaker B:Yeah.
Speaker B:Kevin Durant's the original webanyama.
Speaker B:If we was a g, what would Kevin Durant do?
Speaker A:If there wasn't the NBA, what would his job be?
Speaker B:Oh, homeless.
Speaker A:Homeless.
Speaker B:He looks like a homeless guy.
Speaker B:He looks like a taller homeless dude.
Speaker B:Please tell me what it would be.
Speaker A:I don't know what he'd be.
Speaker B:Train conductor.
Speaker B:Yeah.
Speaker B:You ready to do this?
Speaker A:You ain't ready, doc.
Speaker B:Yeah, I have my gorilla mind.
Speaker B:I'm good.
Speaker B:BlackBerry lemonade.
Speaker B:Hit me, baby, one more time.
Speaker A:Honestly, More plates, more dates.
Speaker A:Shout out.
Speaker A:This is amazing stuff.
Speaker B:Derek don't care about you, dog.
Speaker A:He's listening.
Speaker B:Why don't you tell him you called his can of dildo can.
Speaker B:What?
Speaker C:I did.
Speaker A:I.
Speaker A:You're on a hot mic, dog.
Speaker A:I did not.
Speaker A:That was smokey.
Speaker B:Now you're lying.
Speaker A:You're lying.
Speaker A:On the show now.
Speaker B:You said it felt like something you.
Speaker B:I mean, whatever.
Speaker B:That's fine.
Speaker B:Oh, boy.
Speaker A:All right, here we go.
Speaker B:Ready?
Speaker A:You ready?
Speaker A:I'm ready.
Speaker A:Welcome back to the number one financial literacy podcast in the world.
Speaker A:This is the higher standard.
Speaker A:Sitting in front of me in the Dodgers cap.
Speaker A:Is that fitted?
Speaker B:Yeah, yeah.
Speaker A:Fitted cap with no ths merch that you could find@thspod.com is my partner in crime, Christopher Nahibi.
Speaker B:Ah, yeah,.
Speaker A:But that's okay.
Speaker B:Yeah, take it in.
Speaker B:And of course, across from me, the quarter zip king.
Speaker B:The man, the myth, the legend, the guy who only rocks the quarter zips.
Speaker A:No matter what the weather is outside.
Speaker B:Hot, cold.
Speaker B:It don't matter.
Speaker A:It don't matter.
Speaker B:It's about the image of looking like you Golf.
Speaker A:But knowing you can I swear I.
Speaker B:Try my partner in time.
Speaker B:Side home, everybody.
Speaker A:Thank you, my man.
Speaker A:And sit behind the desk in the production suite, the fine Fijian Slim Rejeel.
Speaker A:What's up, my guy?
Speaker A:What's up, guys?
Speaker A:Let's go.
Speaker A:Hey, let's go, let's go.
Speaker A:We got a great show for everybody today.
Speaker A:We're going to do a little recap of what Chris did earlier on the day.
Speaker A:If you missed it on the live episode, but it was fed meeting day, baby.
Speaker A:It was.
Speaker A:It was pretty eventful.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:I was listening to a lot of boys to men leading up to it.
Speaker B:Were you?
Speaker B:Yeah.
Speaker A:Why?
Speaker B:Wow.
Speaker B:You should not do karaoke.
Speaker A:I'M great at karaoke.
Speaker A:Put on the DMX track.
Speaker B:I feel like that's not karaoke, bro.
Speaker A:Yeah, that's just yelling.
Speaker A:That's like Travis Scott.
Speaker B:Please, why don't you give me your favorite X song?
Speaker B:Go for it.
Speaker A:Your favorite X song.
Speaker B:Yeah.
Speaker A:Well, let's see X go and give it to you.
Speaker A:That's easy.
Speaker A:Yeah.
Speaker B:I feel like you should do the explicit version.
Speaker A:Yeah.
Speaker B:All right.
Speaker B:Well, yeah, Uncle Jerome Powell's last FOMC meeting was today.
Speaker B:Now, leading into it, there's a bit of setup that we need to do before we share this.
Speaker B:This is very special ths style send off episode, I think.
Speaker A:I think so.
Speaker A:Yeah.
Speaker A:It's very well deserved.
Speaker B:Very well deserved.
Speaker B:He went out like a legend.
Speaker B:Of course, there were some obvious answers that needed to be given, and he.
Speaker B:He went right out the gate with it.
Speaker B:Now, many people did not notice something that I caught, and I think it was interesting.
Speaker A:I caught it too.
Speaker B:Did you?
Speaker A:Yeah.
Speaker B:Okay, well, catch case.
Speaker B:Where'd you catch?
Speaker A:Well, I caught the fact that he opened up the floor to questions and he read a response.
Speaker A:He was reading his response.
Speaker B:And the question that he first took was his boy, Steve Liesman from cnbc, who has been open about.
Speaker B:They do have a friendly relationship, which is okay.
Speaker A:I mean, it's like.
Speaker B:But he went to his boy.
Speaker C:Yeah.
Speaker B:It's like me having a press conference and calling on you first.
Speaker B:Let's see.
Speaker B:Omar.
Speaker B:Yeah.
Speaker B:You.
Speaker A:Yeah, he knew.
Speaker A:He knew he was gonna get the.
Speaker A:The alley oop.
Speaker C:And.
Speaker A:Yeah.
Speaker B:And then he didn't even try to, like, fake it.
Speaker B:He, like, read it from a prepared remark.
Speaker B:He's.
Speaker A:All right, let me get.
Speaker B:Since we're here, Stephen, I'm glad you asked.
Speaker A:Yeah.
Speaker B:Let's talk about it.
Speaker A:It was good because, like, it was.
Speaker A:It was able.
Speaker A:It was able to, I guess, touch on everything that everybody wanted to know.
Speaker B:Yeah.
Speaker B:So obviously the first question was, are you going to stay the Fed chair?
Speaker B:The complexity in that was it, you know, was there.
Speaker B:The Trump and White House administration had said pretty unequivocally they were going to drop the case against drone Powell.
Speaker B:Now, you can always restart that.
Speaker B:You could go into an appellate process later on.
Speaker B:There's lots of reasons why he's cautious around that.
Speaker B:But the question I think the most will have in their mind was, okay, look, if he does stay, is he staying to protect Lisa Cook?
Speaker B:Because he's been such a huge safeguard of Fed independence?
Speaker B:Because if Lisa Cook and the Supreme Court's decision goes the other way, then the White House can name two people in the seat besides.
Speaker B:Right.
Speaker A:And as much as he's hasn't come out and he was even asked a question about his legacy and he's like, I'll leave that for, you know, another time.
Speaker A:Or for the powers that be that whoever want to write about my, my legacy, my time here at the FOMC to decide that that is a concern of his.
Speaker A:Right.
Speaker A:He, he made sure it was very clear to everyone that Fed independence is what he's most concerned about.
Speaker A:Because this comes at a time where credibility for the US Right as being the world reserve currency is starting to become a little shaky and questionable.
Speaker A:And he wants to make sure that if it does eventually break, it won't be at the hands at the f. At the fomc.
Speaker B:So look, I'm all for standing on business.
Speaker B:Ten toes down.
Speaker B:Oh, damn, look at you.
Speaker B:But I will say that as somebody who's done this show with you and the rest of the audience for a long time, it's been what, five, six years now?
Speaker A:Five years, yeah.
Speaker B:Yeah.
Speaker B:And I can say that I've seen enough FOMC meetings at this particular juncture to say that they're not dumb people, but they're not living the life of the majority of Americans.
Speaker B:And I think it's easy to get caught up in the idea that they're speaking words of wisdom and ignore that.
Speaker B:There seems to be some disconnects and we're going to cover some of those in the show today because I don't want to besmirch Jerome Powell on the way out, but I also wanted to cover some things that we've been covering on the show in real time that obviously if we, you know, the three geniuses that we are, have access to this kind of data with one Mac mini, then I would imagine the FOMC has got this access.
Speaker B:Matter of fact, I know they do because most of the data that I'm pulling is coming from the Fred, you know, API, which is their Federal Reserve API.
Speaker B:Yeah.
Speaker A: g at things in hindsight with: Speaker B:I'm playing Sunday night quarterback right now.
Speaker B:Fuck that.
Speaker B:Monday morning.
Speaker B:Really?
Speaker A:You're the night game?
Speaker B:Yeah, I'm the night game.
Speaker B:Let me tell you why.
Speaker A:Because, mean, you have been you from.
Speaker A:From the very beginning you said that, you know, they're too communicative.
Speaker B:Right.
Speaker A:And I think that the taking that tact as the, you know, the chair of the fomc, you know, with that comes great responsibility.
Speaker A:And honestly, you will get a lot more blame this way where if you're trying to.
Speaker A:All the data that they're getting is backward looking data, first of all.
Speaker A:Right.
Speaker A:A lot of it is.
Speaker A:Are lagging indicators.
Speaker A:So to try to be preventative and stop things from happening the way they've been trying to.
Speaker B:Right.
Speaker A:Versus you know, the new upcoming FOMC chair, Kevin Warsh, who said that we're not going to step in and prevent anything.
Speaker A:We'll come save the day once if something were to happen.
Speaker B:Well, let me argue that that's what the FOMC has always done, including this generation of the fomc is that they may think they're acting proactively, but I can tell you unequivocally based on stuff that we're going to look at today that that is not the case.
Speaker B:So I don't want anybody to get confused.
Speaker B:I don't think that wash is being revolutionary.
Speaker B:Yeah.
Speaker B:But let me set the stage a little bit before we start playing some audio from today.
Speaker B:Normally we don't do this on the show.
Speaker B:We just play like small brief clips.
Speaker B:We're gonna play a little bit longer clips.
Speaker B:Only about four or five segments from today's hour, hour and a half long conference and Q and A session.
Speaker B:And the reason why is this is a good farewell.
Speaker B:I think it's going to represent him well.
Speaker B:I think he handled this Jerome Powell, he like an absolute pro.
Speaker B:I mean he went out like a professional class act.
Speaker B:Yeah, class act, but no big but here.
Speaker B:There are some things we need to understand about the fomc.
Speaker B:Historically we are the only modern country to not provide a forecast, a forward looking projection of monetary policy.
Speaker B:Oh, okay.
Speaker A:Like a guidance, if you will.
Speaker B:Yeah, we do the scp.
Speaker B:Right?
Speaker D:Right.
Speaker B:It's our version of it.
Speaker B:And Jerome Powell's always had an excuse like you know, hey, we got 19, 20 people in a room and it's just really complex and we all disagree on a lot of things.
Speaker B:It's hard enough to do the sep.
Speaker B:Okay, fine.
Speaker B:And in the era leading up to Jerome Powell, we didn't do press conferences.
Speaker B:Every single rate cut, rate meeting.
Speaker B:They did their quarterly SCP conversation.
Speaker B:So they put out an SCP and they would have the press conference with that.
Speaker B:Right.
Speaker B:So now you're, you're.
Speaker A:Why.
Speaker A:Yeah.
Speaker A:Why subject yourself to that much more scrutiny?
Speaker B:You know, like it's kind of harkens back to my point that I've talked about a lot on the show where why are we being so communicative that now we're pontificating on things that you're going to say in the scp.
Speaker B:Let the SCP speak for itself.
Speaker B:And then if people have questions like, hey, I saw this in the summary of economic projections, what did you mean by it?
Speaker B:Like, that's a much more meaningful conversation.
Speaker B:You're giving people data points and your narrative and the dialogue, and you're saying, okay, this is where everybody wound up.
Speaker B:And then they go, okay, well, why did you wind up there as opposed to this, like, speculative conversations that you're having?
Speaker B:So.
Speaker B:And I think that Wash is going to try to put a little bit of that genie back in the bottle and looking at communication is warranted.
Speaker B:But you've got an FOMC that had to deal with some pretty dynamic rate cuts.
Speaker B:So I think there's a compelling case for Jerome Powell to say, hey, look, we had to be more communicative.
Speaker B:We were dealing with much more volume.
Speaker B:I mean, there were massive geopolitical events and stressors on macroeconomic policy.
Speaker B:You got the Ukraine war, you've got the Israel and Palestine war, you've got the contagion period.
Speaker B:I mean, there were so many things that happened.
Speaker A:Covid.
Speaker B:Yeah, Covid.
Speaker B:Well, pandemic area.
Speaker B:So, yeah.
Speaker B:So there's just a lot.
Speaker B:And because of that, I can see that there's a use case for having the dialogue as you're cutting rates and.
Speaker A:Increasing rates more frequently and at a much faster cadence.
Speaker A:Because for the.
Speaker A:Some of our newer listeners, what the FOMC did by raising rates back when they did at the cadence that they were doing it, they didn't give, let's just say one, one industry in particular, like the banks.
Speaker A:Right.
Speaker A:Didn't give them enough time to be able to prepare for what was to come.
Speaker A:Right.
Speaker A:The rates were being increased at such a fast cadence, that balance, in order for banks to shift and move their balance sheet to keep up with those rate increases at that time, a lot of banks, that contagion period was really like, it happened because of that, because there was a lot of unrealized losses on, on people's books, and they still are.
Speaker B:I mean, everybody who made a loan for the last 20 years now has a loan that's underwater.
Speaker B:Yeah, right.
Speaker B:I mean, if you have loans that are 3%, if they try to sell those things to create liquidity for their needs as a bank, well, those are gonna sell for less than a dollar, you know, 100.
Speaker B:So there'll be money.
Speaker B:Money's lost there, if you will.
Speaker B:But let's, let's get into original.
Speaker B:You ready?
Speaker B:You Teed up.
Speaker A:Yes, I'm ready.
Speaker B:Yes, I'm ready.
Speaker A:Yes.
Speaker B:Yes, sir.
Speaker A:Yeah.
Speaker B:All right.
Speaker B:We're gonna play this first part of the FOMC meeting.
Speaker B:And I do apologize if you're watching the video.
Speaker B:They only broadcast this in.
Speaker B: , not: Speaker B:And if I did play a different version of it from a different channel, there'd be all sorts of advertisements.
Speaker B:So we went with a pure.
Speaker B:Yeah, we want to give you Raw dog Drum.
Speaker A:Raw dog.
Speaker A:No iPad this time, too?
Speaker B:No, but paper.
Speaker B:Yeah.
Speaker B:All right, rajeel.
Speaker B:Thank you, Mr.
Speaker B:Chair.
Speaker B:Appreciate the kind words about the press often doesn't come from the podium in different places.
Speaker B:Appreciate that.
Speaker B:Can you talk about what is gone into your decision to remain on the board?
Speaker B:What kind of criteria are you weighing and how long might you stay?
Speaker B:Thank you.
Speaker C:Sure.
Speaker C:So, you know, my concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors.
Speaker C:And I want to note here, this has nothing whatever to do with verbal criticism by elected officials.
Speaker C:I've never suggested that such verbal criticism is a problem, and neither has anyone else here.
Speaker C:But these legal actions by the administration are unprecedented in our 113 year history, and there are ongoing threats of additional such actions.
Speaker C:I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors.
Speaker C:It is so important for our economy, for the people that we serve, that they can depend over time on a central bank that operates that way free of political influence.
Speaker C:It's part of the absolute foundation of this amazing economy that we have.
Speaker C:It's just one of the many reasons why.
Speaker C:Why the US Economy is the envy of the world.
Speaker C:That piece of institutional architecture separates successful countries from unsuccessful countries.
Speaker C:It is extremely important not for the people who work at the Fed at any given time, but for the people that we serve, that the Fed remain able to conduct monetary policy in a way that doesn't get pulled into politics, trying to help or hurt any particular politician or political party.
Speaker C:It's critical for the people that we serve in terms of when I would leave.
Speaker C:I will leave when I think it's appropriate to do so.
Speaker C:Was that all your questions or was that.
Speaker B:Well, I just have a follow up, which is, what would you say to the criticism that by remaining on the board, you're actually taking a political act and denying President Trump the majority of the board, which, as president, he would have if you left?
Speaker C:I don't see that at all.
Speaker C:As I mentioned, you know, I'm literally staying because of the actions that have been taken.
Speaker C:I had long planned to be retiring and you know, the things that have happened in really in the last three months have I think left me no choice but to stay until I see them through at least that long.
Speaker C:You know, in addition, I don't see how this will interfere.
Speaker C:My intention is not to interfere.
Speaker C:You know, I was a governor for almost six years and the tradition is at the Fed that governors who understand how difficult the role of chair is and as a, as a soon to be former chair, I do understand how hard it is to get consensus with 19 strong minded people.
Speaker C:You work with the chair, you, you try to, you try to be heard but also collaborate with the chair and try to support the chair when you can.
Speaker C:When you can't, you can't.
Speaker C:And I think that's the attitude that people generally take and that's the attitude that I'll take.
Speaker B:There you go.
Speaker B:So he, look, he.
Speaker B:As diplomatic as you can.
Speaker B:He came right, that was his first answered question right off the gate.
Speaker B:And you know, Uncle JP is wearing his nostalgic purple tie.
Speaker B:You know, he went, he came out the same way he always comes out and he addressed the, the biggest point of contention in the room, which took a little bit of the stigma out of it and didn't allow someone to prod him with a question.
Speaker B:So he basically delivered it the way he wanted.
Speaker B:Now what's interesting is that he's not given a definitive timeline for which he will leave and you know that his vote is going to say remain relatively the same.
Speaker B:The, the breaking news leading into the press conference today was that there were three dissenting members in addition to a fourth, which was Myron.
Speaker B:I discount Myron as a fourth separatist because he's always wanted rate cuts.
Speaker B:He wanted a 25 basis rate cut.
Speaker B:The other three which included Neel Kashkari.
Speaker B:Son of a bitch.
Speaker A:With his crayons.
Speaker B:With his crayons.
Speaker B:Yeah, they wanted, and actually I agree with him at this point, they wanted to change the narrative to be one in that there was a more level headed positioning of the fomc.
Speaker B:Effectively not saying there would be a forecasted rate cut or there would be a forecasted rate increase.
Speaker B: our dissenting opinions since: Speaker B:So it's very rare to have that level of dissent.
Speaker B:Now the dissents weren't to cut rates or to increase rates.
Speaker B:They were just to change the narrative to be less.
Speaker B:Less forecasting of one side or the other.
Speaker B:They wanted to be much more even keeled again, aside from Myron, who wanted a 25 basis point rate cut.
Speaker B:So I think that the dissension was interesting, but leading into this, the market was already in a sell off.
Speaker B:This, mind you all, as the time that we're in right now, the day and what was happening at the same time was you had four of the largest tech companies, including Alphabet and everybody and Amazon that were reporting.
Speaker B:Well, those four tech companies are 20% of the S&P 500 by market cap.
Speaker B:Mm.
Speaker B:And yet we still had a sell off.
Speaker B:You have yesterday, the uae, the Saudis saying that they're going to pull out a vopec.
Speaker B:And you woke up this morning and you've got Brent and crude oil spiking.
Speaker B:This was something that people were betting was going to stop because there's supposed to be some resolution in the Middle East.
Speaker B:Well, not only did it not happen, I think the Saudis and I really don't know the clarity behind this, but I think if you're them, you say you guys just let us get attacked.
Speaker B:Right?
Speaker B:Yeah.
Speaker B:Right.
Speaker B:So we don't have to be part of opec, we don't have to be part of this alliance.
Speaker B:We'll trade our own oil.
Speaker B:Yeah.
Speaker A:We'll make more money because of it.
Speaker A:Yeah.
Speaker B:And when you think about the context of how this factors into the macroeconomy of the United States, the US Is an oil exporter, not an oil importer.
Speaker B:Right.
Speaker B:So much of the Middle east and Asia and Europe for that matter, are getting slammed hard.
Speaker B:Now, I don't want to be cryptic, so I'll just come out and say it.
Speaker B:We may have done ourselves a disservice by handling some of the geopolitical conflicts the way that we have.
Speaker B:You, Russia and China were never bigger big supporters of the United States, but we had the European Union, we had the Middle east in a lot of ways.
Speaker B:Right.
Speaker B:We're buying a lot of their product.
Speaker B:We're a very prosperous economy.
Speaker B:The Middle east loves to invest here.
Speaker B:We export.
Speaker B:We're a net exporter, not a net importer.
Speaker B:And well, I think we've now aligned other people to have motivation and reason to work against us.
Speaker B:Right.
Speaker B:And to make matters even more explosive is now you've created this incendiary environment where they've physically been bombed.
Speaker B:It makes you question, even if the sentiment was we don't like the Americans,.
Speaker A:But, well, you Got to think, what does that do to their entire economy when, I mean, tourism plays a huge role Right.
Speaker A:In the Middle east, in, in those countries.
Speaker B:Right.
Speaker A:And you got to think, yeah, we're a lot, a lot of this trade off was to be you provide us also protection, but now they feel at risk.
Speaker B:Well, what protection were they provided when war actually happened?
Speaker B:Right.
Speaker A:None.
Speaker B:War broke out in their region and they were not protected.
Speaker B:Now, there could be conversations that happened behind cloak and dagger, but for me, from the optics, from the outside looking in, it doesn't feel very protected.
Speaker B:And then you got the White House saying, oh, we're going to come to the ceasefire, we're going to come to ceasefire, we're going to come to the ceasefire.
Speaker B:And I don't know about you guys, I haven't heard anything as far as bombings go in the last couple days.
Speaker B:Yeah, has there been bombing still?
Speaker B:Do we know?
Speaker A:No, I haven't seen or heard of much either.
Speaker A:But you know, I wouldn't say that the coverage on this has been perfect, you know, prior to this point anyways, either.
Speaker B:No.
Speaker B:So I look at all this stuff and I think to myself that, that we said that inflation was going to take a hit in an incremental bump, if you will, because of tariffs.
Speaker B:Oh, right, right.
Speaker B:But then now there's this program where you apply and it goes to this government agency and then you can possibly get your tariffs refunded if you're a company who paid them.
Speaker B:But yet we put tariffs back on.
Speaker B:But that rhetoric has seemed to have gone away.
Speaker B:But whatever inflation hit we're supposed to get from tariffs, I don't think we've really seen yet show up in the, in the actual inflation numbers.
Speaker B:That's inflation shock, number one.
Speaker B:Now you've got geopolitical conflict.
Speaker B:We've already covered ad nauseam on the show how this trickles down into travel prices, into food prices and even semiconductor prices with helium fertilizer prices, which has a trickle down effect in other places.
Speaker B:And those will eventually make their way to inflation.
Speaker B:So for anybody to go, well, oh, spot inflation is going to go up because of geopolitical conflict, I would say, okay, well then what about tariffs?
Speaker B:You know, so we haven't seen these things materialize.
Speaker B:And at the same time, one of the things that we're seeing in the news constantly is companies that are laying off meaningful amounts of people.
Speaker B:Yeah, I get that AI might be overhyped and I get the economics as to why it might be overhyped.
Speaker B:But at the same time, I am seeing Headlines.
Speaker B:You are seeing headlines.
Speaker B:Those headlines are pretty clear that there's been thousands of people being laid off every single quarter at some of the.
Speaker A:Top performers in the S&P 500 that have been propping up this economy.
Speaker B:Yeah.
Speaker B:Now, I can make a compelling argument that a lot of people are going to lay people off for AI that are going to need to hire some of those people back, because AI is going to be either hallucinating or ineffective or not as capable or the value proposition of service won't be there.
Speaker B:Unless you're Wells Fargo and your service sucks complete ass.
Speaker B:I'm still very upset about that.
Speaker B:They called.
Speaker B:They called me today.
Speaker B:I didn't ask them to call me.
Speaker B:They just called me again to tell me they weren't going to do it again.
Speaker A:I know.
Speaker A:I already went in.
Speaker B:I just want to open a checking account, guys.
Speaker A:They were probably like, hey, we heard you talk on the.
Speaker A:On the show.
Speaker B:She called me today, this girl from the executive escalations group, and was like, yeah, I got another complaint.
Speaker B:I'm like, well, it wasn't for me.
Speaker B:I'm like, maybe your own people internally are complaining.
Speaker A:Yeah.
Speaker B:Yeah.
Speaker B:She goes, well, I. I don't know what to say to you.
Speaker B:I'm like, then why'd you call?
Speaker A:Yeah, why are you wasting my time?
Speaker B:She's like, well, the answer is the same.
Speaker B:And I'm like, what answer?
Speaker B:You never give me an answer.
Speaker B:Yeah, yeah.
Speaker B:She's like, what do you mean?
Speaker B:I said, well, I want to open up a checking account with my company name.
Speaker B:And, oh, a little fun fact.
Speaker B:I actually have an account just like that right now.
Speaker A:I was.
Speaker A:I just want a duplicate one.
Speaker B:Yeah.
Speaker B:And she's like, no, you don't.
Speaker B:It has a dba.
Speaker B:I said, I was in the branch, I saw the screen.
Speaker B:It doesn't have a dba.
Speaker B:So she was like, well, we can't open it that way.
Speaker B:I'm like, do you know why?
Speaker B:She goes, nope, that's just the way I know it.
Speaker B:That's what I know to tell you.
Speaker B:And I'm like, did you ask like that?
Speaker B:She goes, yeah, they called you.
Speaker B:I'm like, no, they didn't.
Speaker B:She's like, yes, they did.
Speaker B:They called you on this day at this time.
Speaker B:And I'm like, no.
Speaker A:Being hard, man.
Speaker A:Just don't just go and go in there.
Speaker A:You're, like, standing on your business.
Speaker B:No, no, no, no.
Speaker B:The problem is, I went into the branch.
Speaker B:They can't.
Speaker B:They can't open.
Speaker B:They.
Speaker B:So they can't tell me if they can open the account.
Speaker B:They can just go to the system and see if it gets an error or not.
Speaker A:So how are you.
Speaker A:How are you supposed to get the account open?
Speaker B:Go to Chase.
Speaker B:Yeah, Literally right across the parking lot.
Speaker B:Yeah.
Speaker A:Thank you.
Speaker B:Yeah, dude, that's what I'm gonna do.
Speaker A:Yeah.
Speaker B:I'm walking and be like, hey, Uncle Jamie told me to come in.
Speaker B:What's up?
Speaker A:Yeah, Mr. Jamie Diamond.
Speaker B:Demone.
Speaker A:Yeah, Demone.
Speaker B:All right, Side's got some stuff you want to say.
Speaker B:Then we want to go to the next segment.
Speaker B:You want to go to the second one?
Speaker B:What are you gonna do?
Speaker A:No, no, we can.
Speaker A:We can go into the next segment.
Speaker A:I mean, I got.
Speaker A:I got a lot here, but it ties into it all.
Speaker B:Oh, we got a lot.
Speaker B:Yeah, a lot.
Speaker B:All right, this segment.
Speaker B:Number two on the day.
Speaker B:You ready, Rajille?
Speaker C:Ready when you are.
Speaker A:All right, hit it, Nick.
Speaker B:Yeah.
Speaker B:Everybody's hands up.
Speaker C:Yeah.
Speaker B:Front row seat, baby.
Speaker B:Chirpal.
Speaker B:If I could ask about the inflation outlook in March, you described the standard practice of.
Speaker B:Look.
Speaker A:Why is he.
Speaker A:Yeah, he looks like he's struggling.
Speaker B:Like, he doesn't get laid very often.
Speaker B:Right.
Speaker A:Let's call a spade a spade.
Speaker B:I'm just.
Speaker B:Yeah, he's Nick Tiramira.
Speaker B:Tiramos.
Speaker B:From the Wall Street Journal.
Speaker A:At the Wall Street Journal.
Speaker B:Yeah.
Speaker B:You need to loosen up, my guy.
Speaker B:Like, I. I get.
Speaker B:I get this is a serious thing, but just.
Speaker A:I mean, the second he.
Speaker A:He got.
Speaker A:He got the second question.
Speaker A:This is a big deal.
Speaker A:So it's like, everyone's looking at, like, you better not mess this up.
Speaker B:He doesn't.
Speaker B:He's.
Speaker B:He's actually a really good reporter.
Speaker B:But I'm just saying, like, in this case, like, just loosen up.
Speaker B:It's JP's last dance.
Speaker A:Yeah, but you gotta understand, like, for him, this is his.
Speaker A:This is his LeBron.
Speaker B:I don't think so.
Speaker A:Yeah.
Speaker A:What do you mean?
Speaker A:This is his moment to ask LeBron his question.
Speaker A:I mean, who else?
Speaker B:You can see how he fumbles back.
Speaker B:Go ahead, Rail.
Speaker B:Yeah.
Speaker B:Through energy shocks as conditional on inflation expectations.
Speaker B:Staying anchored.
Speaker B:Since that meeting, there has been very little progress reopening key energy trade corridors.
Speaker B:Can you help us understand how the inflation outlook has changed in the intervening period?
Speaker B:Beginning with the prospects for tariff pass through resolving on the timeline that you had outlined in March before getting to the energy shock that is now on top?
Speaker C:So, you know, I would look at it this way.
Speaker C:For a long time, we've been working on.
Speaker C:On the hypothesis, really, that tariff tariffs would.
Speaker C:Would lead to a one time Price increase and that that would go away over time.
Speaker C:In other words, that there would be no further change.
Speaker C:So measured inflation would reflect they were.
Speaker B:Working on the hypothesis.
Speaker B:Unproven theory for those who don't have SAT vocabulary.
Speaker A:Yeah, yeah.
Speaker B:That there would be a one time price increase hit because of the tariffs and then afterward it would go away.
Speaker B:Yeah, that's a terrible theory.
Speaker A:It's a terrible theory.
Speaker A:But how, but what else are you supposed to do?
Speaker A:What else are they supposed to expect?
Speaker A:A lot, a lot of price increases.
Speaker B:I don't want to be the guy who says this, but this isn't the way this works, right.
Speaker B:I don't go like, oh, this banana cost me an extra 5 cents to make.
Speaker B:Saeed, your price is now 5 cents higher.
Speaker B:And then all the fruits are also repriced at the same time.
Speaker B:That's not how this works.
Speaker B:Yeah.
Speaker B:You know how this happens?
Speaker B:I raise prices.
Speaker B:Virgil raises prices.
Speaker A:Yeah.
Speaker B:Somebody else raises price before me, somebody raises prices after me.
Speaker A:But this is the problem.
Speaker A:But this is the problem.
Speaker A:But this is the problem with the inflation reporting.
Speaker A:They don't measure it product by product.
Speaker A:They expect you to adjust your lifestyle.
Speaker A:So if bananas go up, they expect you to no longer buy bananas.
Speaker A:Go ahead and buy some kiwi.
Speaker A:Yeah, that's what they expect.
Speaker A:Nobody likes kiwi or just fame.
Speaker A:Honestly, it's so hard to prepare.
Speaker B:Nobody likes ugly fruit.
Speaker B:That's the rules.
Speaker B:Okay.
Speaker B:If it looks like a turd, people don't want to eat it.
Speaker A:Honestly.
Speaker A:Shout out to the guy though, that's decided to.
Speaker A:Let me give this a try.
Speaker B:Hey, this little hairy ball, let me cut this open, see what happens.
Speaker A:The last time I had a hairy.
Speaker B:Ball, it worked out pretty good for me.
Speaker B:Yeah.
Speaker B:Pineapple though.
Speaker B:Pineapples don't look sexy either.
Speaker B:They have a little, you know.
Speaker B:Yeah.
Speaker A:Who looked at a pine, who looked at a pineapple was like this, this got to be good.
Speaker B:I gotta try to make sure the gods inside that bad boy.
Speaker B:Right.
Speaker B:Anyway, I digress.
Speaker B:So here he is admitting to this being a theoretical position and saying, okay, well, it hasn't quite resolved yet.
Speaker B:Rajeel.
Speaker A:Yes, sir.
Speaker A:Let's do it.
Speaker C:At higher level.
Speaker C:Going up more and more and it's time for that to happen.
Speaker C:You know, we really do expect that to be happening in the next two quarters.
Speaker C:So we'll be watching very carefully to see that what we've thought all along would happen.
Speaker C:That's kind of critical part of the forecast.
Speaker C:We need to remember, really see that with, with energy.
Speaker C:It's, it's so hard to say.
Speaker C:I mentioned, you know, in, you know, sort of the textbook, you, you would look through it an oil shock because they tend to be short lived and they tend to revert and monetary policy works with long and variable lag.
Speaker C:So you know, you wouldn't necessarily react right away.
Speaker C:I think that is all the more true given that we're several years above 2% inflation and that we're already looking through, through the tariff shock.
Speaker C:So I think we're going to be very cautious about that.
Speaker C:But the question about, about looking through energy really is not, not in front of us right now.
Speaker C:It hasn't even peaked yet.
Speaker C:I think we'd want to see the backside of that and progress on tariffs before we even thought about, about reducing rates.
Speaker A:So if I could.
Speaker A:Father Jill.
Speaker A:So look, this oil shock that we're seeing now is not like any other, like a regular oil shock that we have seen in the past.
Speaker B:Oh, this is by far and away the most, the worst, most pronounced oil shock we've ever had.
Speaker A:So you gotta assume the absolute worst when it comes to this.
Speaker A:Right.
Speaker A:Like he's not.
Speaker A:Yeah, he's not typically not and neither is the rest of the FOMC members.
Speaker A:Right.
Speaker A:And, but we all know this, this is not a secret.
Speaker A:But like if you're gonna expect the worst, like we know oil doesn't just power our cars, it powers all the shipments.
Speaker A:It power it, it impacts plastics, it impacts fertilizer, it impacts all this, all the helium like we talked about on the show.
Speaker A:So it's like if you're going to expect the worst and inflation is already heading in the wrong direction as of the last print, I mean, and he's saying we're going to continue to work towards our 2% target.
Speaker A:No, you're not.
Speaker A:You're not, you're not going to get there.
Speaker B:Well, and let's not over, over understate or overstate this depending how you look at it.
Speaker B:We have undermined the inflationary position of every other country in Asia and Europe because we're making their relative costs go up more than our relative costs because we're a net exporter of oil.
Speaker B:Right, Right.
Speaker B:So because of this, what we did in Venezuela, which is oddly timed relative to this whole problem.
Speaker B:Right.
Speaker B:I just look at all this and I think to myself, okay, so we're not making friends.
Speaker B:Not only are we threatening their safety in Europe and in the Middle east, but now we're threatening their currency in Europe and the Middle East.
Speaker A:Yeah.
Speaker A:And then what, what they're going to Do.
Speaker A:Because this becomes existential for them.
Speaker A:Right.
Speaker A:Is if that's going to be the case, then we're going to threaten you and your world reserve currency.
Speaker A:And.
Speaker A:And we're going to start trading things in other forms of currency, whether that's, you know, Chinese currency or.
Speaker A:I still don't know how to pronounce it properly.
Speaker C:So I didn't want to.
Speaker A:You won.
Speaker A:Yeah, I didn't.
Speaker A:I didn't want to butcher it.
Speaker B:My Mandarin in Cantonese, I can tell.
Speaker A:Yeah, good.
Speaker A:Good job.
Speaker A:You won.
Speaker B:And just think about this.
Speaker B:What you won.
Speaker A:I was going to say that, but I didn't want it to be.
Speaker A:I don't.
Speaker A:I don't want to make it sound like I was making fun of it.
Speaker A:So, of course your mind goes.
Speaker B:Trying to phonetically get.
Speaker A:You want.
Speaker A:Yeah, you won.
Speaker A:Or whether.
Speaker A:Or whether that be even like something on the blockchain, like Bitcoin.
Speaker A:Right.
Speaker A:Like it's been.
Speaker A:It's been floated around and they're like, this has become such a problem for them that they're willing to go down that path and getting replaced as the world reserve currency.
Speaker A:But people really have to understand about this.
Speaker A:It's not an event in time.
Speaker A:This happens slowly over time.
Speaker B:This is what Ray Dalio is referring to his New World order positioning that he was talking about not only in his book Principles, but obviously in the.
Speaker B:In the post that he was making in the last couple months where he referenced that chapter from his book Principles.
Speaker B:And.
Speaker B:Yeah, this.
Speaker B:This is the change.
Speaker B:Right.
Speaker B:It starts with one thing and then it trickles down into what are clearly visible impacts.
Speaker B:And I get Jerome Powell's quandary here.
Speaker B:My job is not to worry about how this affects the Middle east and China.
Speaker A:That's right.
Speaker A:That's not my job.
Speaker B:That's not my job.
Speaker B:But at the same time, we are very clearly underestimating our impacts, too.
Speaker B:Throughout this entire conversation, he never uses the words AI.
Speaker A:How do you have.
Speaker A:If you're in charge of monetary policy?
Speaker A:Yeah, Right.
Speaker A:And you're telling me that part of your dual mandate.
Speaker A:So let's call it a 50, 50 mandate, is jobs.
Speaker B:Yeah.
Speaker A:The topic of conversation around jobs is AI.
Speaker A:How are you not talking about it?
Speaker B:Mind you, Kevin Warsh has already been questioned at the Senate in, in part specifically about his comments relative to AI.
Speaker B:Yeah, he has ran and he's, you know, I mean, wouldn't say running for office, but he has promoted himself in part that this is the.
Speaker B:One of the most cataclysmic and revolutionary parts of the economy.
Speaker B:And yet our current sitting FOMC and I just talking about Jerome Powell, all of them have been silent on this topic.
Speaker A:If I'm worth 100 million plus.
Speaker A:Kevin Marsh.
Speaker B:Right.
Speaker A:Why am I. I'm not taking this job.
Speaker B:Yeah, well, like why, why.
Speaker A:Why are you doing this?
Speaker B:Obviously, instead of trading no for no.
Speaker A:I mean, that's the logical question.
Speaker B:Right?
Speaker A:Like you're worth $100 million and this job is going to force you to divest in everything that you're investing in.
Speaker A:Right.
Speaker A:That could be a potential conflict.
Speaker A:And you're going to take this and go through this stress and get questions by this guy.
Speaker B:Yeah.
Speaker B:Three letters for you.
Speaker B:SEO.
Speaker B:Search Engine Optimization.
Speaker B:Okay.
Speaker B:Right now, you search Warsh, you get Epstein.
Speaker B:Bang, bang, bang, bang, pow, pow.
Speaker B:In a couple months from now, you get.
Speaker B:You search warsh, you get Fed Secretary the Honorable.
Speaker B:It moves Epstein down a couple notches on the search history.
Speaker A:Yeah.
Speaker A:This is his way of getting away.
Speaker B:Right.
Speaker B:He's guaranteed to be honorable for the rest of his career.
Speaker A:Yeah, that's right.
Speaker B:You.
Speaker A:You have to.
Speaker A:I'm an honorable person.
Speaker A:I'm not.
Speaker B:I wouldn't.
Speaker B:I am the Honorable War.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:As opposed to the non honorable.
Speaker A:If you ever.
Speaker A:You've seen.
Speaker A:We all seen the meme of put some respect on my name.
Speaker A:The fastest way to get some respect on your name is become the FOMC here.
Speaker B:Well, I mean anything where your job title is the honorable.
Speaker B:Anything.
Speaker B:Right, Right.
Speaker B:It's just.
Speaker B:I'm just saying, like no one has ever put that on my placard.
Speaker A:You're the Honorable Chris Nahifi.
Speaker B:Nobody buys that.
Speaker B:Stop, Stop.
Speaker B:This is the end of this clip.
Speaker B:Do we have longer this one to go?
Speaker B:I think I put the timestamps there.
Speaker A:Let's see.
Speaker B:It's.
Speaker A:Yeah, no, that's it.
Speaker B:Okay.
Speaker B:Yeah, let's go.
Speaker B:Let's go to the third one.
Speaker B:The third one.
Speaker B:This is where it gets a little.
Speaker B:A little sexy.
Speaker B:Okay.
Speaker A:Okay.
Speaker B:So I'm playing these in a specific order.
Speaker B:Not only was this the cadence with which the questions were answered, although I'm skipping some in between.
Speaker B:But this is also part of an increasing narrative that we're going to kind of display.
Speaker B:Because what we're going to do is distill this down into what I call the data gap.
Speaker A:Oh, yeah.
Speaker B:And we're going to show some data that we have from weeks leading into this.
Speaker B:Not just a couple days.
Speaker A:Weeks.
Speaker B:This is not a freshie.
Speaker B:This has been around for a while.
Speaker B:Right.
Speaker B:And I'm going to show you how some of the Statements that are being made here are disingenuous, at least in maliciously.
Speaker A:Why are you attacking JP on his final.
Speaker A:On his.
Speaker B:This is.
Speaker A:This is his farewell tour.
Speaker A:What are we doing?
Speaker B:I get it.
Speaker B:I get it.
Speaker B:But look, I was at the Watch the Throne concerts.
Speaker B:I watched Kanye and Jay Z. I would never admit to that publicly.
Speaker B:Why?
Speaker A:Back then it was okay.
Speaker B:Back then it was okay.
Speaker B:Yeah.
Speaker A:What do you mean?
Speaker A:So you can't admit to publicly.
Speaker B:Okay.
Speaker B:You want it?
Speaker B:You want to go down this path?
Speaker B:Chief, we can do this.
Speaker A:Why?
Speaker B:Yeah.
Speaker B:Let's say you went to Epstein Island.
Speaker B:Pre charges against Epstein.
Speaker B:Are you a bad person?
Speaker A:That's a bad.
Speaker A:Look, can't do this.
Speaker B:He wasn't charged until after you went there.
Speaker A:There's levels.
Speaker A:Hold on.
Speaker A:I was just saying there's levels to this.
Speaker B:He's a bad person.
Speaker A:They're terrible.
Speaker A:Not just bad.
Speaker A:Terrible.
Speaker B:He was a bad person before the charges.
Speaker A:You're.
Speaker A:You're a bad person.
Speaker A:He's a bad person.
Speaker A:We can't keep those bad persons.
Speaker B:I can't admit publicly to going to a Kanye, Jay Z watch Throne concert.
Speaker A:Okay, I see.
Speaker B:And if I did, it was amazing.
Speaker A:I see.
Speaker B:But I didn't go.
Speaker A:That's one of the conscious.
Speaker A:Going to a public stadium versus a private island.
Speaker B:If you're rich enough for Jill, you can and that.
Speaker B:And that's where the poverty in you gets.
Speaker B:Gets in the way.
Speaker B:Yeah.
Speaker A:Is this the normalcy in me?
Speaker B:I guess, yeah.
Speaker B:Yeah, if.
Speaker B:If you.
Speaker B:If you're rich enough, a private island might be your public transport.
Speaker B:You know what I mean?
Speaker A:Yeah, yeah, exactly.
Speaker B:I would like to go to the private island today.
Speaker A:You know Richard Branson.
Speaker D:Yeah.
Speaker A:It was Lifestyles Rich and Famous for the listeners.
Speaker A:I just came back from New York City.
Speaker B:I'm sorry, what?
Speaker A:Yeah, New York City.
Speaker B:No, part of New York City.
Speaker A:All the bureaus, Burrows.
Speaker A:The burrows.
Speaker B:The bureaus, bures.
Speaker A:I'm thinking about.
Speaker A:I'm thinking about the fmc.
Speaker A:All the burrows.
Speaker A:And I'm not going to lie.
Speaker A:Walking out of Central park and looking at billionaires row there, I'm like, there's some.
Speaker A:There's some dirty going on here.
Speaker B:Those brownstones.
Speaker B:Poor people status, bro.
Speaker B:Poor people status.
Speaker B:I think minimum buy in is like 20 million easy.
Speaker B:Yeah, they're nice.
Speaker B:They are nice.
Speaker A:Yeah.
Speaker A:Just.
Speaker A:It was.
Speaker A:It was fascinating just to see like we're living different lives, you and I.
Speaker A:And some of them are just hanging out downstairs just to be part of the people they want to see.
Speaker B:What are the people doing the crazy thing about New York.
Speaker B:You could live in New York in a cramped apartment and be like, the city's tough.
Speaker B:Or you could live in a brownstone looking over Central park and be like, man, life is good.
Speaker A:It's great.
Speaker B:Same city?
Speaker B:Yeah.
Speaker B:A couple blocks down, right?
Speaker B:You ain't, you ain't living the same life, right?
Speaker B:Yeah, yeah.
Speaker B:It's a dangerous place, man.
Speaker B:You can get caught up there.
Speaker A:It was, it was, yeah, it was a good time.
Speaker A:But let's head to the next clip.
Speaker B:Wow.
Speaker B:No personal information.
Speaker A:Okay.
Speaker B:Yeah.
Speaker A:Remember there was a time where I didn't want to relay any personal information.
Speaker B:Yeah, I remember vividly.
Speaker B:Brazil.
Speaker C:Meaningfully restrictive, maybe mildly restrictive or neutral.
Speaker C:I would say nice haircut.
Speaker B:And I want to follow up on.
Speaker C:Some of the other questions about your.
Speaker B:Future a little bit.
Speaker C:The, the first time we've seen four.
Speaker B: Dissents now since October of: Speaker C:Are you handing off a divided Fed chair?
Speaker C:Powell yout know, the thing to remember is we have always had vigorous debates and they're excellent debates.
Speaker C:I have to say.
Speaker C:They've been really good.
Speaker C:And we're in an unusually difficult situation.
Speaker C:So we've really, really had four supply shocks.
Speaker C:Actually, you can say more than four, but at a minimum, we've, we had the pandemic, we had the invasion of the, of Ukraine, we had tariffs and now we have Iran and the oil, you know, the oil spike.
Speaker C:So those, every, every supply shock has the capability of driving up.
Speaker A:And what do you do?
Speaker A:You know, this, it's, the central bank.
Speaker C:Has a really hard time knowing what to do.
Speaker C:So the right thing to do is to try to balance the achievement of those goals.
Speaker C:And that's what our framework calls for us to do.
Speaker C:But these are really tough, difficult judgments.
Speaker C:You've got to have a forecast for each variable.
Speaker C:You've got to think how long it's going to take to get back to target.
Speaker C:You got to think how restrictive or not is policy.
Speaker C:So it's only natural that you have a range of views on the committee.
Speaker C:You know, people are going to see it different ways.
Speaker C:They're going to have to different risk tolerances and that kind of thing.
Speaker C:I mean, if everybody agreed, that would be, that would be surprising.
Speaker C:And I think it's only, it's partly a function of the extraordinarily challenging set of supply shocks that we've been dealing with now for five, six years.
Speaker A:So positive.
Speaker A:This is his way of look when this thing comes crashing down, when Kevin Warsh comes in and he tries to point the finger at like this was Their fault, not my fault.
Speaker A:This is his way of distancing himself, being like, I had so many supply shocks.
Speaker A:What'd you want me to do?
Speaker A:I couldn't.
Speaker A:I couldn't control the situation.
Speaker B:So normally I would disagree with you because I think that Jerome Powell is a very upstanding dude.
Speaker B:Normally.
Speaker B:But there are some things that make me go.
Speaker B:The not mentioning AI specifically in so many conferences now, you just don't want to admit fault.
Speaker A:Yeah.
Speaker B:You know, you screw the pooch on that one a little bit.
Speaker B:You haven't acknowledged.
Speaker A:We talked about it recently.
Speaker A:The Challenger report.
Speaker B:Yeah.
Speaker A:Stated that the most recent, I guess, of the jobs that were recently lost, I believe 25% of it was due to AI, the highest amount.
Speaker A:And I just, like, just two years ago, it was at 1%.
Speaker A:How are we not talking about this?
Speaker B:Yeah.
Speaker A:It's the number one reason for job losses.
Speaker B:It's a problem.
Speaker B:It's a problem.
Speaker B:Is it the last clip before we get to the very last one at the end of the show, or is there.
Speaker B:Was there one more?
Speaker A:There's one.
Speaker B:One more, right?
Speaker B:Yeah.
Speaker B:All right, good.
Speaker B:There's last one more clip, and then we're going to play on the end of the show another clip.
Speaker B:But this is.
Speaker B:This is the last one from the press conference before.
Speaker B:Before you and I get into what I like to call a little bit of chart work.
Speaker A:Okay, but you and I talked about before the show, right?
Speaker A:Yes, he.
Speaker A:I guess it's a little negligent on his part and the rest of the FOMC members look, because it's not like he's the only one.
Speaker A:Other Fed presidents are doing Fed speak, like in between meetings.
Speaker B:Right.
Speaker A:And then they're getting asked questions, too, and they're not really addressing AI.
Speaker A:And if it's.
Speaker A:I mean, it's not on any of the articles or the headlines that we're reading, to talk about it now would be admitting fault that we didn't talk about it soon enough and we didn't foresee this happening.
Speaker B:Yeah.
Speaker B:But if you're taking Warsh's position, saying, I'm not here to be your savior, I'm here to be reactive.
Speaker A:Oh, that's.
Speaker B:Yeah, that's why.
Speaker A:Yeah.
Speaker B:Okay.
Speaker B:Because you shouldn't be trying to be proactive.
Speaker B:You should be saying, okay, AIs affected things.
Speaker B:We're going to pivot now.
Speaker B:Yeah.
Speaker B:And if you would have taken that stance in the very beginning, this narrative wouldn't be so weird.
Speaker B:But you've taken this proactive communication.
Speaker B:We're going to look at the data or data dependent route, but then you've chosen to just flatly ignore.
Speaker A:So let me ask you this.
Speaker A:So let me ask you.
Speaker A:So he would be.
Speaker A:The problem is he would be bringing him and the rest of the FOMC members would be bringing into question the credibility of the reports that they're relying on.
Speaker A:That's the problem here.
Speaker A:Yeah.
Speaker A:Because the reports that they're actually relying on and citing and him saying the number that we're looking at is the unemployment rate.
Speaker A:Right.
Speaker A:And the unemployment rate is not reflective of what's really going on in the labor market.
Speaker B:Well, and I would also argue there are other things you're looking at.
Speaker B:GDP has been propped up, and I use the word propped up very meaningfully by government spending.
Speaker A:Government spending and health care.
Speaker B:Right.
Speaker B:Yeah.
Speaker B:So because we're spending so much of the government, it makes.
Speaker B:And then you have a K shaped economy now where you've got the upper class spending and propping up much of the economy when the lower class, there's really only two, is not even a middle class anymore, is really, really struggling.
Speaker B:Right.
Speaker B:The overwhelming majority of Americans don't feel well.
Speaker B:And I mean overwhelming majority, but I mean 55 specifically.
Speaker B:And we're going to show you that survey here in a second.
Speaker B:It's a Gallup poll from April of every single year going back quite a long time.
Speaker B:And it's the worst it's ever been.
Speaker A:Yeah.
Speaker B:Ever been.
Speaker A:Ever been.
Speaker A:Yeah, exactly.
Speaker A:And if, if government spending and government jobs was propping up the jobs number and then the rare occasions when healthcare was really propping up.
Speaker A:Is.
Speaker A:Is that really the sign of a healthy labor market when you have health care jobs leading the way?
Speaker A:No, no, like that, that, that's a terrible sign, actually.
Speaker B:It's a terrible sign.
Speaker B:Goes to show that there's a pretty big disconnect just logically.
Speaker B:But even more so than that, I look at all this stuff and I think to myself, okay, wait a minute, I'm not saying that everybody should feel miserable.
Speaker B:Right.
Speaker B:Recessionary economy.
Speaker B:Some people do well, some people do bad.
Speaker B:I mean, it's just, it's kind of what it is.
Speaker B:But what I'm saying is, is I don't want to disrespect the people who don't feel good in this economy by ignoring how they feel.
Speaker B:Because there are some real material things that are happening.
Speaker B:And what bothers me is when the FOMC and these talking heads come out and they talk about how amazing and how strong the economy is and you go, wait a minute, People don't feel that way, dude.
Speaker B:Like, they're hurting.
Speaker B:And you're sitting here saying, like, oh, it's amazing.
Speaker B:Look at all the ratios.
Speaker B: om a gentleman who called the: Speaker B:And he is a macroeconomic genius in some levels, better than I am by far.
Speaker B:And certainly, you know, among some of the people who've got a reputation for calling things.
Speaker B:Again, a lot of people call negative things all the time.
Speaker B:But he makes a compelling case that the stock market's overvalued.
Speaker B:And we're going to spend some time looking at that as well.
Speaker B:And then we're going into some of these charts that I've brought up to show how the sentiment and the disconnect between what we're seeing and how it affects different classes are going to be measurably different, which is going to show you why you've got the talking heads who are arguably the upper class.
Speaker B:If you're on television these days and you're on cnbc, how much money you think you're making a year?
Speaker A:Yeah, that's a good question.
Speaker B:What do you think originally?
Speaker B:Let me see if we can look that up and see with what you can get.
Speaker B:What a CNBC on camera personality analysis.
Speaker A:Yeah.
Speaker B:Not analysis on screen personality.
Speaker B:Yeah, you know, call it.
Speaker B:Carl Quintanella.
Speaker B:How much?
Speaker B:How much I do make?
Speaker B:It got to be a million, right?
Speaker A:He's got cat.
Speaker A:Not a million is crazy.
Speaker B:No, for sure, dude.
Speaker A:CNBC on camera personalities framer.
Speaker A:Nine million for Carl.
Speaker B:Nine million for Carl.
Speaker A:And he must be hurting so bad.
Speaker B:Carl Quintilla, baby.
Speaker B:I'm telling you, one of the most underrated gangsters.
Speaker B:And he's still going hard on X.
Speaker A:Yeah, he's going hard.
Speaker A:We pulled him up on X. Yeah.
Speaker B:Carl Quintinella, baby.
Speaker B:Wow.
Speaker B:Well, how much?
Speaker B:Rick Santelli making?
Speaker B:2 To 8 million annually.
Speaker A:Hold on.
Speaker B:Sarah Eisen.
Speaker B:7 Million annually.
Speaker A:Wait, Rick Santelli, 2.
Speaker A:2 To 8 million.
Speaker A:That's a.
Speaker A:That's a wide range, though.
Speaker B:2 To 8.
Speaker B:Hey, man.
Speaker B:Hey, Rick.
Speaker B:Some of these, you know, FOMC press conferences, you'd be falling back.
Speaker B:You get 2 million of conference dog.
Speaker B:This is.
Speaker A:This is.
Speaker B:Wow.
Speaker A:Yeah, man.
Speaker B:Damn anchor.
Speaker A:So anchors and reporters are making, like, around 100 grand a year.
Speaker B:Look at that.
Speaker B:Wow.
Speaker B:Whoo.
Speaker A:Wow.
Speaker B:I'm letting that marinate.
Speaker B:God damn.
Speaker B:Everybody on the payroll out there making millions.
Speaker B:Can you imagine if I was doing that show with you?
Speaker B:It's like how many millions you make today?
Speaker B:How many millions you make?
Speaker B:Yeah.
Speaker B:Oh, the millions.
Speaker A:Let me tell you why I'm qualified to let you guys know how you should be feeling.
Speaker B:Yeah, they should change the network name Ball so hard.
Speaker A:Yeah.
Speaker B:Bsh.
Speaker A:Bsh and yeah.
Speaker B:Network Ball so hard.
Speaker B:Network.
Speaker B:You get to watch us talk about being rich.
Speaker A:I'm not going to lie.
Speaker A:That would sell.
Speaker B:See, you see what I'm talking about, though?
Speaker B:Like these talking heads who come on there and think about it.
Speaker B:They're interviewing some of the most prominent people in finance.
Speaker B:Do you really think these people know what it's like to struggle to make money?
Speaker A:No.
Speaker B:I guarantee you, you're pulling in $7 million a year as Sarah Eisen.
Speaker B:You're a celebrity.
Speaker B:You don't know what it's like on the front lines.
Speaker A:You don't know.
Speaker A:Maybe at one point they did, but.
Speaker B:Yeah, I'm sure you did at one point.
Speaker B:And let me tell you right now, you give me a couple million dollars a year, it'll be pretty easy to forget.
Speaker A:Right?
Speaker A:I mean, not too long ago, we had a stat where, like, I want to say it was like 50% of the population couldn't.
Speaker A:Couldn't cover a $400 emergency expense.
Speaker B:Yeah.
Speaker B:Their name is not Jim Cramer, it's not David Faber, it's not Carl Quintanelle, and it sure shit isn't Sarah Eisen.
Speaker B:Right.
Speaker A:And so you think of that, and then you think about what's going on just right now with gas prices alone.
Speaker A:If you're, if you're spending 25% more on gas prices monthly.
Speaker A:Right.
Speaker A:That's.
Speaker A:And you don't have enough to cover everything else, what is that going to do to consumer spending on everything else that just ate away 25 of your spending?
Speaker B:Yeah, yeah.
Speaker A:Damn, damn, damn.
Speaker A:Yeah, it's a problem.
Speaker A:I just filled gas up last week.
Speaker A:It was 132.48.
Speaker A:And what kind of car do you drive?
Speaker A:I drive a plug in hybrid Mazda CX90.
Speaker A:It's a plug in, too.
Speaker A:You spend $130?
Speaker A:Yep.
Speaker A:18 Gallons.
Speaker A:That's wild.
Speaker B:Yeah.
Speaker B:I mean, the Rivan, the crazy part about charging like an EV car or truck is that the time that you charge really changes it.
Speaker B:Some days I can charge, you know, almost all the way up for like 30 bucks.
Speaker B:Some days it's like 60.
Speaker A:You ever charge at home?
Speaker B:No, not the, not the Rivan.
Speaker A:Now at the Rivan.
Speaker B:Okay.
Speaker B:I'm not even allowed in the garage.
Speaker C:Garage.
Speaker B:Oh, yeah, yeah.
Speaker A:You're in there?
Speaker B:You're working out in the morning?
Speaker B:Well, I got the sauna in there now too, so.
Speaker B:Yeah, between the sauna God and the cold plunge, you know, I'm just.
Speaker B:I'm out here contrast therapy, you know, my life, you know, I've sent you pictures just like the cat I sent you pictures of that you completely ignored.
Speaker A:What's the.
Speaker A:What's your.
Speaker A:What's your new kitten's name?
Speaker B:First of all, don't say my new kid's name.
Speaker B:It's my son's new kitten.
Speaker A:Okay?
Speaker A:What's your son's new kid?
Speaker B:I don't feel like telling you, bro.
Speaker B:You're derogatory.
Speaker B:Hold on.
Speaker A:What?
Speaker A:What did I say?
Speaker B:You said they all look alike.
Speaker A:Hold on.
Speaker B:Said I don't.
Speaker B:Look at your cat stripes.
Speaker B:They all look alike to me.
Speaker A:I thought it was Misha.
Speaker A:What's wrong with that?
Speaker B:Got green eyes.
Speaker B:Cats.
Speaker A:You didn't even say, hey, guys.
Speaker A:You didn't say, hey, guys.
Speaker A:Look at the new kitten we got.
Speaker A:You just sent a photo with the kitten, bro.
Speaker B:I've been friends with you for 30 years, dog.
Speaker B:You don't know what my cat looks like.
Speaker B:I know.
Speaker A:I fed your cat many a time, sir.
Speaker A:I thought your cat lost some weight.
Speaker B:I thought you and my were close.
Speaker A:No, I'm not.
Speaker A:I can't even joke about this without.
Speaker B:It feeling like it's a kitten is the size of my hand.
Speaker B:You couldn't tell by the size of the cat?
Speaker A:No, I'm not.
Speaker A:I didn't put two and two together, man.
Speaker B:What?
Speaker B:You didn't put two and two together.
Speaker B:One's orange.
Speaker A:Okay, so what is.
Speaker A:So is.
Speaker A:Is.
Speaker A:Is it a boy?
Speaker A:Is it a girl?
Speaker B:It's a boy.
Speaker A:Okay, what's his name?
Speaker B:Cheeto.
Speaker A:That's a great name.
Speaker A:I love that.
Speaker A:Who chose.
Speaker A:Who chose the name?
Speaker B:It was named.
Speaker B:He was named Cheeto.
Speaker A:Oh.
Speaker B:When you picked him because he's gray with like black stripes, but he has like a small, like, tint of orange to him.
Speaker B:A bag of Cheetos.
Speaker A:So what's the story behind.
Speaker A:Why feel the.
Speaker A:The need to pick one new.
Speaker B:Oh, I got bamboozled.
Speaker B:I didn't have.
Speaker B:I didn't have a penny.
Speaker A:I had no part because I know Misha.
Speaker A:Misha was you.
Speaker A:You saved her, right?
Speaker B:Yeah.
Speaker B:So I. I saved Misha 20 years ago.
Speaker B:It's a 20 year old cat, right?
Speaker B:I was a dumbass, okay?
Speaker B:Because I know how this works.
Speaker B:My wife's like, hey, look, my friend had kittens.
Speaker B:Should have known right there.
Speaker B:But I didn't should we go visit?
Speaker B:No, no, no.
Speaker B:She, she, she Jedi.
Speaker B:Mind me, she's like, this is not the quiz you're looking for.
Speaker B:Right.
Speaker B:She, she, she Jedi my puppy.
Speaker B:So she said to me, she goes, oh, we're just gonna.
Speaker B:Carter and I are gonna go and we're gonna look at the kittens, but they're not mature enough to leave yet.
Speaker B:I'm like.
Speaker B:I said, babe, did you Google this and research?
Speaker B:Yeah, yeah.
Speaker B:Every single hit that I got said, do not take a super senior cat like, like Misha and bring in a kitten because she's just.
Speaker B:It's gonna cause her anxiety.
Speaker B:Right, Right.
Speaker B:So whatever.
Speaker B:I'm a devoutly loyal dude.
Speaker B:Like, I don't cheat on my wife.
Speaker B:Like, I don't lie to, like, people.
Speaker B:Like, I'm.
Speaker B:I'm loyal.
Speaker B:I'm committed to.
Speaker B:And I'll tell you how loyal I am.
Speaker A:Lies to me all the time.
Speaker B:You.
Speaker A:I'm sock puppet.
Speaker B:Yeah.
Speaker B:You suck puppet.
Speaker B:You gonna be Trump's sock puppet.
Speaker A:I know.
Speaker B:No, sir.
Speaker B:Yeah.
Speaker B:Hey, Mr. Wash. Yeah.
Speaker B:No one is ever in my adult life asks if I'd be someone's sock puppet.
Speaker A:That's wild.
Speaker B:I feel like it's a prison term.
Speaker A:If the price is right.
Speaker A:Hold on.
Speaker B:Hey, Bunky.
Speaker B:If the price is.
Speaker B:You gonna be my sock puppet.
Speaker A:Yeah.
Speaker B:Yeah.
Speaker A:But, you know, Sam Bankman, Frieda has been asked if he's going to be a sock puppet.
Speaker B:He's for sure pescatarian.
Speaker B:Sock puppet.
Speaker A:Pescatarian is crazy.
Speaker B:I need fish.
Speaker B:I'll give you some fish.
Speaker B:I'll give you some fish.
Speaker B:Just keep doing your sock puppet thing.
Speaker B:Yeah.
Speaker B:Hold my pocket sock puppet.
Speaker B:People haven't been to prison.
Speaker B:Be like, what?
Speaker B:Yeah, yeah, yeah, yeah.
Speaker B:So the wife goes, I call her, like, 20 minutes as she gets there, and she tells me she's going to Petco.
Speaker B:I already know you only go to Petco to get stuff for a pet, Right.
Speaker B:Why you going left?
Speaker A:We already have all of Misha's stuff out here.
Speaker A:We got it.
Speaker A:She's good.
Speaker B:She had it for 20 years.
Speaker B:We're good.
Speaker B:She's like, well, you know, we're gonna bring the cat home now.
Speaker B:The cat is really well trained, potty trained.
Speaker B:Misha added already.
Speaker B:I got me when she was like, two weeks old.
Speaker B:This cat's six weeks old, so.
Speaker B:And it knows how to, you know, use the litter box and all that stuff.
Speaker B:We have any problems.
Speaker B:Super affectionate little guy, super friendly.
Speaker A:Oh, that's awesome.
Speaker B:But because I'm so loyal, like, to me, this is tantamount.
Speaker B:To bring another woman home saying, baby, I know she younger, but this is about.
Speaker A:I mean, Misha has to be looking at you sideways now.
Speaker B:This is a little sideways, bro.
Speaker B:Like, no.
Speaker A:Are they not even staying in the same room?
Speaker B:No, no, the Cheetos in Carter's room.
Speaker B:And like, Joanna, like, walks around and takes places.
Speaker A:How do you.
Speaker A:How do you even make two cats bond?
Speaker B:You gotta.
Speaker B:Well, you can't make two.
Speaker B:Oh, bond.
Speaker A:No.
Speaker B:Oh, yeah.
Speaker B:You can't make two.
Speaker A:Can't bond together.
Speaker A:Is that what you're saying?
Speaker B:Wow.
Speaker B:Then you just said that.
Speaker B:Hey, regular, are you HR or my hr?
Speaker B:I can't remember which one of us.
Speaker A:When I say it's.
Speaker A:When I say it's offensive.
Speaker A:When I say it's offensive, and he.
Speaker B:Says that it's okay because I'm a connoisseur.
Speaker A:Oh, you're allowed to own.
Speaker B:You don't own.
Speaker A:Honestly, I'm allergic to that kind of pussy.
Speaker B:That's racist.
Speaker B:I gotta bleep that out now, too.
Speaker A:If I open my mouth, anything outside.
Speaker B:Of the fomc, I swear to God.
Speaker B:Yeah, that's right.
Speaker B:Outside the fomc, I stayed up all night long the first night worried about how this is affecting the stress level of my 20 year old cat.
Speaker A:Wait, hold on.
Speaker A:As you should, though.
Speaker B:I was a whole night.
Speaker B:I'm like, she okay?
Speaker B:She okay?
Speaker A:Yeah.
Speaker B:Meanwhile, the kitten didn't wake up.
Speaker B:It only woke up one time, made a couple meows, my wife went in there, pet the cat.
Speaker B:Cat went back to sleep and it sleeps next to my son every single night.
Speaker B:Okay, good.
Speaker B:So, I mean, but I just.
Speaker B:I got anxiety over it, man.
Speaker A:Rightfully so.
Speaker A:I mean, I get it.
Speaker A:I would too.
Speaker B:I feel like I owe the 20 year old senior cat who's been like my best friend through thick and thick.
Speaker B:No, no offense.
Speaker A:Thick and thick.
Speaker B:Thick and thick.
Speaker B:No, there's been no thin in my life.
Speaker B:It's been all thick.
Speaker B:It's all thick thickness.
Speaker B:The whole private equity chat is the extra thick.
Speaker B:But I feel like I owe that cat, like the best, like, possible life, and this is not the way to do it.
Speaker B:What?
Speaker A:No, this might.
Speaker A:This might be.
Speaker B:Everything I read online says that ain't the case.
Speaker B:Man.
Speaker B:I hope.
Speaker B:I hope that I'm wrong and I hope that everything I'm reading online, honestly.
Speaker A:Yeah, I've met.
Speaker A:I've been around Misha plenty of times.
Speaker A:She never adjusted to me.
Speaker A:She always took swipes.
Speaker B:Yeah, I mean, you're swipable.
Speaker A:Oh, so I left or right to the right.
Speaker B:Here's a real tactile guy right there.
Speaker B:Here's a real tactile problem.
Speaker B:Okay.
Speaker B:And this is an unfortunate thing, is my cat, who is a senior, who is, you know, obviously in pain, arthritis, all that stuff, and my vision's not as good.
Speaker B:She's 20.
Speaker B:Her being agitated all the time is much more apparent now that you got like a really pleasant kitten around all the time.
Speaker A:Yeah, this is.
Speaker A:This guy has to be a little odd for her, I just think, because I remember when I come over to feed Misha, if I just open the food, she would come running downstairs.
Speaker A:So now it's like, who are you opening food for me or.
Speaker A:Or him?
Speaker B:It's a problem.
Speaker A:That's a problem.
Speaker B:Yeah, that's a problem.
Speaker A:You're a terrible human being.
Speaker B:I am a terrible human being.
Speaker B:Rajeel, let's speaking.
Speaker B:Another terrible human being.
Speaker B:Let's play Austin Jerome.
Speaker B:Pal clip.
Speaker B:Sorry.
Speaker B:Energy drink.
Speaker A:He's going to look so much more energetic after this.
Speaker A:All right, here we go.
Speaker B:I don't know, man.
Speaker A:I don't know.
Speaker B:He's looking just like Kevin Washington.
Speaker B:How would you describe the economy outside of the misbehaving, inflation?
Speaker B:I mean, it's still awfully resilient, given all of the blows.
Speaker C:I don't know that you can be awfully resilient.
Speaker C:So it's actually quite resilient, I would say, because it's a positive thing.
Speaker C:If I can.
Speaker C:If I can have that amendment.
Speaker C:Yeah.
Speaker C:You know, growth is really solid across our economy.
Speaker C:Some of that is that consumer spending is hanging in pretty well.
Speaker C:The most recent data are good, and some of it is just the apparently insatiable demand for data centers all over the United States.
Speaker B:So we are going to reference AI.
Speaker C:Now, business investment going into building data centers.
Speaker C:Reason to think that that continues.
Speaker A:It's actually not true.
Speaker C:There's not an insatiable 2% or better PDF.
Speaker C:People are actually voting private domestic final purpose purchases that are like a better.
Speaker B:Signal of he's going to piss me off.
Speaker B:But let's, let's.
Speaker B:Let's get into the first couple charts.
Speaker A:Yeah, let's do it.
Speaker B:There's.
Speaker B:I think there's two charts related to employment that are next.
Speaker B:And then we're going to talk a little bit about one of the other links there.
Speaker B:The first chart on unemployment.
Speaker B:There you go.
Speaker B:US Job creation is slowed.
Speaker B:Stagnant population growth means fewer new jobs are needed in the economy.
Speaker B:Stagnant growth.
Speaker B:This is seasonally adjusted from the U.S. labor Department.
Speaker B:Okay.
Speaker B:And you can see here in this Chart pretty clearly that the amount in thousands of jobs, new jobs.
Speaker B:Right.
Speaker B:Has gone down and gone negative.
Speaker B:And we know because we covered in the show that there's been traumatic revisions down.
Speaker B:And I said traumatic, not dramatic traumatic because they are so incredibly high.
Speaker B:The revisions down.
Speaker B: e for the first time starting: Speaker B:You've seen 1, 2, 3, 4, 5, let's call it six times of negative growth in jobs.
Speaker B:Okay, so you're seeing a meaningful change.
Speaker B:Right.
Speaker B:This is not stagnant.
Speaker B:You've seen it.
Speaker B:Now go the other way.
Speaker A:Yeah.
Speaker B:The next chart coming up here is probably a little more analytical chart, but I think this one's a meaningful view.
Speaker B:And this one specifically targets white collar jobs.
Speaker B:The white collar job market is the worst in 87 years.
Speaker A:This is a problem because, you know, everyone coming out of college with their degrees, what are they looking for?
Speaker A:Yeah, White collar jobs.
Speaker B:And there is a very distinct note here that is going to be thematic for the rest of the show.
Speaker B:White collar jobs have contracted for 34 straight months every time.
Speaker B:This happened before the US was in a recession.
Speaker B:Not this time.
Speaker B:So we're going to look at metrics here that are in excess of where they've been in recessionary economies.
Speaker B:And yet we are not allegedly in a recession right now.
Speaker B:There's only two times that we've seen this type of growth be this bad before in history.
Speaker B: was the Great Recession from: Speaker B:And the dot com bubble burst.
Speaker B:Right.
Speaker B:57 Months and 53 months.
Speaker B:Now we're at 34 months with seemingly no recession.
Speaker B:If you.
Speaker B:This has never happened outside of recession, frankly.
Speaker B: ld War II demobilization, the: Speaker B:And there was a Covid recession are the three that just below that.
Speaker B:So we are way off the charts as far as white collar job markets go.
Speaker B:And really the professional unemployment rate according to this is 4.2%.
Speaker B:But manufacturing unemployment rate is 3.7%.
Speaker B:So those numbers don't align.
Speaker A:Yeah.
Speaker B:Right.
Speaker B:Yet somehow we have a pretty interesting position here also to note is that the last time this happened in just below this 25 months.
Speaker B:World War II demobilization was wartime and a recession.
Speaker B:Yeah.
Speaker B:So I would argue that the metrics suggest that we are at war.
Speaker B:Okay.
Speaker B:And that we are in a recession.
Speaker B:Yeah.
Speaker B:Okay.
Speaker B:I don't know if the next chart is next in the video or is the chart.
Speaker A:It's a Chart.
Speaker B:Okay, let's go to the chart.
Speaker B:Here is the bar chart.
Speaker B:Right, Right.
Speaker A:But I'll say the problem here, and this is one that we've talked about many a times on the show, is the US Right now and for the foreseeable future, cannot afford a recession.
Speaker A:They just absolutely can't afford it.
Speaker A:Because.
Speaker A:Because if they.
Speaker A:Here's the problem with the recession.
Speaker A:The US Economy gets hit on both ends.
Speaker B:There's a video, It's a little later on Rajille, that.
Speaker B:Cue that one up.
Speaker B:Because what he's saying right now is a perfect segue for that.
Speaker B:Now, you didn't know.
Speaker B:You didn't.
Speaker A:Did I?
Speaker B:You didn't know.
Speaker A:I've been doing it long enough.
Speaker B:All right.
Speaker A:Right.
Speaker A:Because when.
Speaker A:When we know, we talk.
Speaker A:We talked about this before.
Speaker A:The government makes their money off tax revenue.
Speaker A:Right.
Speaker A:So if there's a recession and, you know, corporations are earning less, their tax revenue goes down.
Speaker A:Individuals are earning less, tax revenue goes down.
Speaker A:Capital gains.
Speaker A:Right.
Speaker A:All those tax revenue that.
Speaker A:That goes down.
Speaker A:So when revenue goes down, spending has to go up.
Speaker B:Yep.
Speaker A:For them.
Speaker A:Right.
Speaker A:Just.
Speaker A:Just to continue to prop things up.
Speaker A:And if you're in a recession, there's only two ways to go to go about handling it.
Speaker A:You either rip the band aid off and you go into economic depression.
Speaker A:No center is going to allow that on their washer.
Speaker A:They're going to all agree to continue to spend more.
Speaker B:Right.
Speaker B:Raise that debt ceiling.
Speaker A:Raise that debt ceiling over and over and over again and kick the can down the road as far as you can and it'll be somebody else's problem later.
Speaker A:And that's just the way we've always handled it.
Speaker A:So nobody wants it to happen on their watch.
Speaker B:Yeah.
Speaker B:So this chart I'm showing here is going to be distinctive as part of, first of all, branded chart.
Speaker B:By the way, this is.
Speaker B:This is our agentic AI making the charts for us.
Speaker B:Yeah.
Speaker B:Not only branded, but shows our same grainy background.
Speaker B:It kept all the images here pretty static.
Speaker B:These are our colors.
Speaker B:Broadcast colors.
Speaker B:Broadcast white, broadcast black.
Speaker B:We have market amber.
Speaker B:Yeah.
Speaker B:We've got a whole vernacular here.
Speaker A:You're like Nike with your color.
Speaker B:Yeah.
Speaker B:There's a whole thing.
Speaker B:We have a whole, like, aesthetic style guide.
Speaker B:But this, the most important part of this is there's three different bar charts here.
Speaker B:One bar chart is 12 million households that got between 1 million and 2 million dollars in net worth.
Speaker B:Second one in the middle, 8.5 million households have between 2 million and 5 million dollars in net worth.
Speaker B:And 3.5 million households have above 5 million dollars in net worth.
Speaker B:Now what we're going to differentiate here is two really significant aspects.
Speaker B:The households, the 12 million households between 1 and 2 million dollars and those 3.5 million that have above 5 million dollars.
Speaker B:Yep.
Speaker B:The biggest difference differentiator here is that the 14% in business ownership that households above 5 million dollars have, whereas it's about 4% for households of between 1 and 2 million dollars.
Speaker B:So those who are the uber wealthy who have the $5 million, you know, twice as much, effectively net worth and up to minimum twice, if not up to five times as much, they own about 10% more business ownership now.
Speaker B:But most notably here, if you look at this chart, is that the retirement the same at 33%.
Speaker B:Their home exposure above 5 million is only 23% of their net worth versus those on the lower side of the wealthy spectrum.
Speaker B:Between 1 to 2 million dollars in net worth have about 39%.
Speaker B:Yeah, that home equity appreciation in recent years has been significant.
Speaker B:However, 24% of their assets are liquid assets which include cash and stock.
Speaker B:Cash and stock.
Speaker B:All right.
Speaker B:Right.
Speaker B:There are two charts we're gonna look at next.
Speaker B:One is the green line chart showing the S&P 500's performance over the last 100 years.
Speaker B:And I wanna show you why that net worth is such a difference here.
Speaker B:So this is the S&P's performance again branded chart over the last hundred years.
Speaker B:Okay.
Speaker B: icant lineup going from about: Speaker B:It just went on a straight vertical.
Speaker B:Right.
Speaker B:That's, that's a big number jump.
Speaker A:Yeah.
Speaker B:But again, we know that benefits those households having more than a $5 million net worth.
Speaker B:Yeah.
Speaker A:And if you, and if you believe in that, they're just going to continue to kick the can down the road.
Speaker A:Again, this is the exact conversation and what you're seeing is what they mean when there's going to be another asset melt up.
Speaker B:Show the next chart.
Speaker B:The American dream has always been the idea of homeownership, life, liberty, pursuit of happiness.
Speaker B:Pursuit of happiness meant ownership, real estate.
Speaker B:Well, this shows that exact Same S&P 500 curve relative to the median home price.
Speaker B:Using Case Shiller home index for the home price here.
Speaker B:So the portion of 12 million households that have between 1 and $2 million in net worth have 39% of their net worth, a greater percentage in their homes, and yet those have not increased anywhere near the value.
Speaker B:You're talking fractions of the value relative to the stock market.
Speaker B:And those with 5 million dollar net worth or higher have massive exposure relative to everybody else in.
Speaker B:In the stock market.
Speaker A:Some people.
Speaker A:To abort the mission of the American Dre investing.
Speaker B:No, I'm saying that it's clear that there's a disproportionate impact of the stock market staying high to those wealthy people who have the greater ability to influence it.
Speaker B:Right.
Speaker B:The wealthiest population in the United States has more of their net worth tied to the S&P 500.
Speaker B:Which may, comma, may.
Speaker B:Right.
Speaker B:Be part of the reason why we're seeing a slight home price correction.
Speaker B:But we're not seeing that in the stock market.
Speaker B:Right.
Speaker A:Yeah.
Speaker B:So, Jill, there is an audio clip to play here.
Speaker A:And by the way, I think Zillow just recently updated their forecast on price increases for the next year.
Speaker B:How's it look?
Speaker A:0.0%.
Speaker A:It's going to just stay stagnant.
Speaker A:That's pretty convenient though.
Speaker B:That's a convenient number.
Speaker B:Not negative.
Speaker A:Not.
Speaker A:It wouldn't go negative.
Speaker B:We don't want Dave Ramsey to be wrong.
Speaker A:Right.
Speaker B:House price is gonna go up every year for the next five years.
Speaker A:Bye now.
Speaker B:By now.
Speaker B:Gotta buy now.
Speaker B:Yeah.
Speaker B:You were wrong.
Speaker A:Is it the post by Patrick o' Shag Hennessy?
Speaker B:Yeah.
Speaker B:Oh, Shag Hennessy dog.
Speaker A:That's right.
Speaker B:Aaron as Ice Cube's nephew's cousins.
Speaker B:True sister o' Shea Hennessy.
Speaker A:True player for real.
Speaker B:True player for real.
Speaker B:This is just a video.
Speaker B:You don't have to worry about the post here.
Speaker B:Okay, so before we play this real quick, this is Paul Tudor Jones, one of the greatest macro economists of all times.
Speaker B:He called a number of recessions.
Speaker B:I referenced him earlier.
Speaker B:This is a three minute clip, but I think it's meaningful his perspective on the macro economy and the stock market and why this is getting such skepticism and values going down.
Speaker B:He's specifically talking about the price to earnings ratio in some cases.
Speaker B:Go ahead.
Speaker D:We're clearly so leveraged in equities in this country.
Speaker D:We're so dependent upon firm equity prices at this point in time.
Speaker D:And when I say leveraged, we're 252% of stock market cap to GDP.
Speaker D: So: Speaker D:And then in 87 we got to about 85 or 90%.
Speaker D: In: Speaker D:And now we're at 252.
Speaker D:So you can just imagine.
Speaker D: ignificant bear markets since: Speaker D:When I say mean reversion, let's say mean revert to the past 25 or 30 year PE.
Speaker D:So if we did that here, that would be, and again These are elevated P's one way elevated beyond the 20th century.
Speaker D:That would be a, say a 30, 35% decline.
Speaker D:Well, 35% on 250% of GDP is 89% of GDP.
Speaker D:The reverse wealth effect.
Speaker D:Oh my gosh, 10% of our tax revenues are capital gains.
Speaker B:They go to zero.
Speaker D:So you can see the budget deficit blowing up, you can see the bond market getting smoked.
Speaker D:You can see this kind of negative self reinforcing effect.
Speaker D:And so it's troubling.
Speaker D:We're clearly in a sovereign debt bubble in the stock market.
Speaker D:We're over equitized as a country, have the highest individual equity weightings in the history of the country.
Speaker D: you look at private equity in: Speaker D:Now it's about 16% of institutional portfolios.
Speaker D:Real estate's gone up, infrastructure bets have gone up.
Speaker D: h more liquid than we were in: Speaker D:So you have to be cognizant that fact when you think about how you have your money deployed.
Speaker D:I had a friend ask me, he said if you were investing for 20 years, what would you tell somebody?
Speaker D:Because he knows that I'm supposed to say you just buy the S and P. Close your eyes.
Speaker D:Well, the problem is that if you buy the S and P at this current valuation, the 10 year forward returns negative when you buy with the S and P of 22.
Speaker D:That's what history shows.
Speaker D:So yes, the S and P is a spectacular long term if you have 100 year view.
Speaker D:But that's because that's an average of 100 years including times when the S&P 500 PE was 6 and 7 and 8 or 1/3 of what it is right now.
Speaker D:So valuation matters a lot and the stock market's really high and it's going to be really hard to make money from here.
Speaker B:There you go.
Speaker B:So yeah, I mean that ties it all together with a nice little bow.
Speaker B:I got a couple more charts to show but yeah, but the, see the.
Speaker A:Problem with, the problem with that too is we, we did, we ran, we ran some figures a couple months ago where if you missed out on the five biggest days over the last 40 years, right, that erased like 30 of your gains.
Speaker A:I can't remember the number but it was meaningful.
Speaker A:Meaningful like 30, 40 of your gains.
Speaker A:So to miss out on that because you're like, I'm just gonna wait for this to continue to dip.
Speaker B:I'm not, I'm not saying that people should do that again.
Speaker B:First of all, you got to respect a guy whose last name and the words family office behind it or behind the glass behind him.
Speaker A:He's.
Speaker A:Yeah, you can tell he was very rich.
Speaker B:And while I'm being the.
Speaker B:That I'm being here, if you're ramp and you're sponsoring those guys, you sponsor tvpn.
Speaker B:The production quality of that was dog, he's got halogen lights in that room.
Speaker B:Nobody thought, hey, let's turn the lights off and light this dude.
Speaker B:Right?
Speaker D:Yeah.
Speaker B:The higher standard does that.
Speaker A:Those guys don't know.
Speaker A:They don't care.
Speaker A:Just like they feel good just having a microphone in front of their face.
Speaker B:No, no, no.
Speaker B:We do that in the, in the microphone.
Speaker B:It was all fuzzy, rubbing up against his shirt.
Speaker B:Nobody was like, let's get this guy a mic.
Speaker B:Let's get this guy a mic.
Speaker B:I'm not saying we're the world's best.
Speaker A:Production team, but rail audio engineer would have been like, dog, let's fix that.
Speaker B:Hey, shut up.
Speaker B:Paul Two Door Jones, right?
Speaker B:You say shut up.
Speaker B:Your family office.
Speaker A:He just had those numbers on the top of his.
Speaker B:He controlled his mic.
Speaker B:Cuz he, he literally called.
Speaker B:Yeah.
Speaker B:Bets in every one of those markets that he's in.
Speaker B:70 And 87.
Speaker B:He's been around the block.
Speaker A:Yeah.
Speaker A:He's like, I. I know what I'm talking about.
Speaker B:He's out here going like, oh, what.
Speaker C:Did I have for lunch?
Speaker B:1987.
Speaker B:Yeah, he's.
Speaker B:He's good.
Speaker B:All right, there's a couple more charts.
Speaker B:Let's take a look at those charts real quick.
Speaker B:What do you got here?
Speaker A:These are the five biggest days for gains.
Speaker A:Oh, yeah.
Speaker A:So was this the biggest single day?
Speaker A: ring the Great Depression and: Speaker A:So if you're waiting and waiting and waiting for it to come out of the crisis, you're probably going to miss out on those five days.
Speaker A:So.
Speaker B: ,: Speaker B:The day afterward.
Speaker B:I have, I talked about this before on the show.
Speaker B:I have.
Speaker B: ,: Speaker B:I have that newspaper from the New York Times on my wall at home, sealed and all sorts of nice chemicals to preserve it and away from the sunlight.
Speaker B:Because God forbid, the printed.
Speaker B: ,: Speaker B: ay after the worst day of the: Speaker B:That is literally on my wall at home.
Speaker B:And it's a good reminder that even the darkest days can be followed by the brightest days.
Speaker B:Right.
Speaker B:You know, so I know that people go, okay, these guys are being super negative.
Speaker B:But it's like, okay, that's also making you keenly aware of what could be around the corner.
Speaker B:Right.
Speaker B:Negativity breeds into opportunity if you're prepared for it.
Speaker B:So you can either choose to ignore this stuff and not be proactive, active.
Speaker B:Yeah.
Speaker B:And miss those opportunities.
Speaker B:Right.
Speaker B:Or you could listen to this stuff and say, okay, I'm going to keep investing, but I'm going to have like a nest egg ready for that to.
Speaker A:Deploy some cash when the opportunities.
Speaker B:Right.
Speaker A:Yeah.
Speaker A:And from all the research that I've done for this show over the last five years, just the, like, the recurring theme that I'm seeing and I'm reading is when there's a downturn, that just signals opportunity.
Speaker A:And that's how you have to look at it.
Speaker B:Every single one of my businesses, I've said this before on the show.
Speaker B:Has been started during recessionary economies.
Speaker B:This, this is the time, for reasons that I do not fully understand, where I seem to build best.
Speaker B:And I don't know if it's I'm focused or I'm afraid.
Speaker B:I'm definitely afraid of being poor again.
Speaker B:I always will be.
Speaker B:But for reasons that are unclear to me, these are the times where I build something.
Speaker B:I don't know why.
Speaker B:It just happens that way.
Speaker B:So I want to get through the charts and then play the last clip before.
Speaker B:So this chart was from my X account.
Speaker B:This is credit card delinquencies.
Speaker B:Right.
Speaker B: of: Speaker B: ,: Speaker B:So we are literally 1 percentage point below the great financial crisis peak.
Speaker B:How could that be?
Speaker A:Yeah.
Speaker B:We're not in a recessionary economy.
Speaker B:Right.
Speaker B:They're telling us the consumer is strong.
Speaker B:Yeah, but we are.
Speaker B:You know, we are.
Speaker B:Okay, well, let's keep going.
Speaker B:The next chart.
Speaker B:Rejoicing.
Speaker B:Rapid session, baby.
Speaker A:Escape.
Speaker B:Or you can just.
Speaker B:You pull the chart up in the notes, too.
Speaker B:There you go.
Speaker B:Perfect.
Speaker B:There you go.
Speaker B:Awesome share of Americans who say their financial situation is getting worse.
Speaker B:By the way, this is the finalized format for the new charts.
Speaker B:I went with a gradient from 70 to 50.
Speaker A:Glorious.
Speaker B:Yeah.
Speaker B:All coming from our AI, by the way.
Speaker B:Just prompt and ask for it.
Speaker B:Share of Americans who say their financial situation is getting worse.
Speaker B: , from: Speaker B:The 55% say finances are getting worse.
Speaker B: ce they started doing this in: Speaker A:That's got to be saying if you're, if you, if you're like us.
Speaker A:And you always looked at these, I guess, these, these pollings and these consumer sentiment polls.
Speaker A:Right?
Speaker A:These surveys.
Speaker A:And you looked at it with like, yeah, I'm not really a huge fan, but anytime you get a reading like this where it's the highest ever or the lowest sentiment ever, it's like, that's a, that's got to be alarming.
Speaker B:Well, this is just.
Speaker B:Okay, this is a limited poll.
Speaker B:1000 People every April for the last 25 years when they started it.
Speaker B:This is the worst reading since then.
Speaker B:But Brazil, the next chart might be a little more telling.
Speaker B:Okay.
Speaker B:Oh, there you go.
Speaker B:Index of consumer sentiment.
Speaker B:This is my earlier format chart.
Speaker B:I didn't like the, the color grading on this one.
Speaker B:This is the index of consumer sentiment.
Speaker B:I purposely left a lot of description off this one because let me tell you why.
Speaker B:It's the lowest it's ever been.
Speaker B:There's your, there's your subtitle kids from then.
Speaker A:This is the most cited one from the University of Michigan.
Speaker B:Yep.
Speaker B:Right.
Speaker B:University of Michigan.
Speaker B:By the way, I, I downloaded every single data point from that.
Speaker B:That's why this is so visceral here on the chart.
Speaker B:Right.
Speaker B: ing back to, I think that was: Speaker B:Something was that.
Speaker B:What is it?
Speaker A:1962.
Speaker B:Oh, 62.
Speaker B:Sorry.
Speaker B:And I literally went through every single piece of data.
Speaker B:Consumer sentiment is the worst it's ever been.
Speaker B:Think that.
Speaker B:Through wars, okay.
Speaker B:Yeah.
Speaker B:Pandemics.
Speaker B:Yeah, right.
Speaker B:The great financial crisis.
Speaker A:Yeah.
Speaker B:The dot com bubble burst.
Speaker B:Consumers felt better about the economy in those periods.
Speaker B:That was consumer sentiment.
Speaker B:This is the survey they always cite.
Speaker B:When they cite consumer sentiment.
Speaker B:This is not some small consumer, you know, survey.
Speaker A:This is the one.
Speaker B:This is the survey.
Speaker B:This is what University of Michigan does.
Speaker B:This is their survey.
Speaker B:Right.
Speaker A:And the reason why this time it's, it's different than every other time in history is because our debt to GDP ratio is at 122%.
Speaker A:Okay?
Speaker A:So, I mean, anything above 100% is, is scary.
Speaker A:Now, other countries around the world do have even higher debt to GDP ratios.
Speaker A:I'm not going to say that.
Speaker A:But we're also there.
Speaker A:They also don't hold the world reserve currency.
Speaker A:We're supposed to look like we're.
Speaker A:We're economically, like, stable.
Speaker A:Right.
Speaker B:Or responsible.
Speaker A:And responsible.
Speaker B:And.
Speaker A:But also none of those other countries appear to be thriving.
Speaker A:So the fact that we are.
Speaker A:We claim we are because right now I believe we're spending a trillion dollars on our interest payments due to our national debt.
Speaker A:When we do go into a recession and it's declared a recession and the consumer sentiment goes down even further.
Speaker A:Right.
Speaker A:GDP contracts, you know, consumer spending drops.
Speaker A:Right.
Speaker A:And the only way out of it is to borrow more.
Speaker B:Well, anecdotal food for thought.
Speaker B:Typically we don't get declared recessions until after the recessionary economy is over.
Speaker B:Yeah.
Speaker A:After the hard part's done.
Speaker B:And that, ironically, is when unemployment typically spikes.
Speaker B:Is after the end of a declared recession.
Speaker B:Is when unemployment typically spikes.
Speaker B:If you follow that logic, historically, we are literally on the classic cadence of a recessionary economy.
Speaker B:Now.
Speaker B:Now.
Speaker B:Right now.
Speaker B:Right now.
Speaker B:All right, Rajeel, there is one last video to play.
Speaker B:It is one last clip.
Speaker B:It is a final farewell to the man, the myth, the legend.
Speaker B:All of my joking and bullshit aside, I have a great deal of respect for the immense amount of pressure that Jerome Powell had on his shoulders.
Speaker B:I don't think I could have come anywhere near close to the job this man's done.
Speaker B:And I think I speak for both side and Regil when I say that I wish him well in the future endeavors.
Speaker B:And we're going to see him a little bit more, but not in front of the mic.
Speaker B:And he made that clear on the way out of this.
Speaker B:But let's say goodbye the way only Jerome Powell can.
Speaker B:So no goodbyes from us.
Speaker B:This will be the exit for the show.
Speaker C:I like that, Ben.
Speaker C:That's going to come out of other spending, but again, we don't see it yet.
Speaker C:One last thing you mentioned those economies in Southeast Asia that are particularly dependent on petroleum, they make a lot of the stuff that American consumers buy.
Speaker B:So was there any discussion today about.
Speaker C:Whether or not those costs getting passed along to consumers is a real concern.
Speaker B:And whether or not that might push up inflation?
Speaker C:So all of those things are in the models that we use to calculate inflation.
Speaker C:So, you know, they're just parts.
Speaker C:You can ask about anything like that.
Speaker C:And they are.
Speaker C:They have a place, the staff has a place where they're looking at that and pricing in what will happen with higher prices and that kind of thing.
Speaker C:So it's there.
Speaker C:The effects are not that big yet.
Speaker C:You know, we're a huge economy.
Speaker C:The import sector is only 10% of the economy.
Speaker C:So we're not like a European country where 50% of the external of GDP is in the external sector.
Speaker C:We're also, you know, you know, as I mentioned, we're an oil exporter, so we're not feeling the same kind of pain and we're not likely to feel the same kind of pain that economies in Western Europe and certainly in Asia are feeling.
Speaker C:Anyway, thank you very much, everyone.
Speaker C:I won't see you next time.
