He's the ones that change.

This changes.

That's why you kept modifying it.

And then I thought, like, all the great YouTubers, like all the guys that are, like, you know, notable on YouTube, like the Mr.

Beast, they always talk about how they change YouTube covers and they micromanage details.

And I was like, all right, I've.

Seen them in real time.

Update them after releasing it an hour, like, later.

I've done it too.

And now you can a B test, which is interesting on the.

On the YouTube thumbnails, which I'm still trying to figure out, but.

But, you know, if it works, it works, baby.

We live.

Yeah, we're live.

Welcome back to the number one financial literacy podcast in the world.

This is the higher standard.

Wouldn't be the higher standard without a can pop.

Sitting in front of me is my partner in crime, Christopher Nahibi.

Sit across from me, my partner in time, the one, the only, the man, the myth, the guy who wears black shorts with sexy knees, who you never get to see.

You don't get to see it.

You don't know if it's true.

You don't know if he's lying.

Tight.

Omar, everybody.

Thank you, my man.

And sitting behind the desk in the production suite is nobody.

Camera cuts to nobody.

And we're back.

Yeah.

Today's podcast, episode 306.

Yeah, we're in the three hundreds.

Behind our back.

I was thinking about doing something behind.

Oh, really?

Because I feel like, you know, just behind yours.

But, you know, I.

Last episode, the one that's dropping tomorrow for us, for the listener.

Last week, 305, I was going to call the Miami edition and do like a 1980s like, vibe.

Okay, Vice, There you go.

And I thought, I'm not that creative.

What's the Miami Vice?

Okay, what was the.

The main guy's name?

Dean Johnson.

No, what's his name?

Don Johnson.

Don Johnson.

My father, one of my father in law's clients back in the day, would buy all his suits from him.

Okay.

Yeah.

Also hard.

Sure.

The story is relevant.

No, you said mommy.

Vice, come on, what are you talking about?

Today's episode and headlines are saying inflation is cooling.

Fed saying that they're ready to ease.

Probably because of insecurity in the job market.

Yeah.

But we're seeing a lot of signals of fear in the market.

Yeah.

And I think that one of the conversations that I've been having repeatedly with people has been, you know, Chris, look, the market's at an all time high.

People are investing in gold and all these good things are happening around us.

How can you feel so unsure of the market?

And on top of that, Fed signaling, everyone's saying that we're going to have more rate cuts.

What do, what do rate cuts normally do for growth stocks, like in tech that's been literally carrying the s and P500?

It's going to, they're probably going to continue to rise for the, for the short term.

Yeah.

Their borrowing costs go down.

Treasuries start to normalize.

Businesses start to make more money.

As businesses make more money, they trade at higher multiples and so on and so forth and ends up becoming this cascading benefit to circumstances, society.

Well, what I would tell people is there are some warning signs that are flashing very much red right now.

Warning signs that should not be ignored, but are oddly being spoken about in circumstances which don't necessarily align with fears of recession.

And I get it.

Lots of people on social media, on traditional media all talking about, oh my God, let's use fear as a way to get people to listen to our stories.

That's not what this is.

Okay.

I was going to say is, do you think that's what it is or is it people and networks trying to cover their bases and in case things do go south, they could revert back and look, we've been talking about this.

So let's play this out.

I want to deliver on the promise.

I want to talk a little bit about the FOMC meeting coming up because the probabilities are wild here.

End of the month.

Yep.

Yeah.

I want to talk about the original banking crisis.

For those of you who've probably heard, Zion's bank has had some issues.

I want to break that down from experienced bankers perspective.

And then I want to use that to get into some other parts.

There's some car defaults, delinquencies.

We've all heard little bits and pieces about in the media and on media.

But what does that really mean and what does it really look like?

Yeah, I want to talk a little bit about the housing market.

And then I'm going to use some other proxies for weakness in the economy, most notably the film industry.

Okay.

Been some weaknesses there.

And then gold.

Gold is a big one that I think people are overlooking because it seems like it's flashing positive tones, but I think there's an underlying negative rhetoric there.

Okay.

Yeah, let's do it.

So jumping right in, let's go right into the FOMC meeting.

Next Friday's Federal Reserve meeting is to decide on the interest rates once again scheduled for October 28th through 29th, 2025.

While the Fed's decision isn't guaranteed, market analysts are widely expecting a quarter percentage point rate cut.

And to give you an idea of how wide we're talking about, the probabilities of Getting to a 3.75 to 4% rate or 25 basis point cut are 99.4% of easing probability according to Chicago Mercantile exchange, and a 0.6 probability of holding rates still.

Okay, so that's pretty much their way of saying book it.

Yeah, that's happening.

The only real question is 25 or 50 basis points.

Given the rhetoric, 50 seems a little aggressive given that there hasn't been any major headline risks as of just yet.

I mean, there's still time between now and the end of the month.

Well, and then keep in mind, if you're the Fed now, you're playing into a darkness market.

Right.

You're not getting the same breadth of reports that you once got before from the federal government because we're in the middle of a government shutdown for I think, what's been 10 weeks now?

No, no, no, eight weeks.

What does that haven't been?

No, it's got to be four weeks before.

I have no idea.

It's still like an eternity.

Yeah.

How about that?

Yeah.

So it has it definitely.

And I'm sure for some people that have been furloughed, you know, they're sitting at home not getting paid.

It feels like a very long time.

Longest one in history was back in 2018.

It was the same executive branch.

And because of that, you saw a 35 day holdout period.

And the reason why I went 35 days was because typically speaking, if you're a furloughed worker and you're not getting paid until this whole thing resolves itself, that's when your first paycheck would have really gotten material and could have come through your full month behind.

Right, right.

So I think in around that point, people start having trouble paying bills.

It becomes a challenge.

People start to go apply to the jobs of the places and then you have to replace people.

Right.

The question is, is, do they want to replace these people and is this part of a, you know, efficiency, reduced size?

But there's really two ways.

This, this, ultimately this narrative gets controlled.

Right.

One way is starting to get to our target marks and we can, we can, there's optimism.

We can start to ease.

And I, I think this is the way that the Fed was hoping people could take this, not the other way where we're entering into a dark market.

And you know, the labor market is really starting to see some strains and we need to make sure we protect this because it can go south really quickly.

That's an interesting thing too.

Everybody that I know that's actively searching in the labor market for a job today.

Yeah.

Is not having a wildly successful time.

I mean and then.

And the numbers are showing it.

Right.

I mean we, we saw that.

I think job openings are at one point, not too long ago it was, there was two job postings for every one unemployed person.

Right now we're looking at I think a little bit over one.

Right.

One job posting.

And we know a good chunk of those are you're not getting full time employment.

It's a lot of partial employment and, and you're not getting paid the same.

Right.

And a lot of them are also ghost positions.

That's right.

So I think there is something to be said for the fact that you got a Fed that's going to be cautiously optimistic about cutting rates and continuing to do so.

They've talked about easing the liquidity policy as a part of this conversation.

So I think what you're largely going to see is 25 basis point rate cut.

No sensationalism.

It's going to be pretty much on schedule.

What everybody thinks that's what you're going to get for this FOMC meeting.

Now leading into this however, you've seen a regional bank crisis where you're seeing stocks sliding once again.

Lots of regional community bank stimulus.

And this all started from Zion's bank but I wanted to read something, it's a little bit long so bear with me here.

That I read on X and this was in and around the time that the Zion's bank situation started to begin.

Regional bank stocks are sliding again.

Show showing that the market is waking up to the underlying fragility in their balance sheets.

When the two year falls this fast it usually means investors see a shift from inflation risk to credit risk.

Remember that?

Inflation risk to credit risk.

What does credit risk mean for people out there?

So for inflation risk you're looking at okay, things are getting more expensive.

Because things are getting more expensive.

This could have a dramatic impact to banks financial position, credit.

And I'm watering it down a little bit for purposes that it's not so important because now we're seeing inflation come down.

It's not the primary concern.

Credit risk is have there been weak credit practices in the market that will lead to additional defaults and those defaults will mean that banks will have to cover Those losses, which means banks earnings will be weaker.

Yeah, yeah.

A great massive and the most obvious example of this, the great financial Crisis back in 2007.

I don't.

Lots of people defaulted on their home mortgages.

Yeah.

I don't think this time around if credit risk comes into light, it's not going to be viewed as the same credit risk as back then.

It'll be a different kind.

Maybe, maybe something like you have too high of a concentration in a specific sector or industry.

Right.

Versus your underwriting practices?

Well, that's the question right now.

A lot of that in the news right now is are the banks underwriting practices?

So we know that for single family, Dodd Frank came in and reformed that entire process.

And as a result of this process, what happened?

Well, banks got really tight around single family lending.

And if you try to get a single family loan in the last 10 years or so since Dodd Frank's been out, I think it's been that long.

You wind up in a situation where you realize that it's materially different than before Dodd Frank was passed.

It's not just black and white.

You really got to show the ability.

To repay, the ability to repay and the ability to repay rule specifically are really meaningful.

And banks hold a pretty hard line there.

But there's also a private credit market which we're going to hear a lot about in the future, where people are issuing credit outside of the bank ecosystem where they're getting cheap funds and they're loaning it out.

They don't have any rules.

It's the wild wild west.

We talked about private Equity on episode 304.

Yes.

And in that with AI and private equity, that could inherently be the catalyst for this.

That could be their credit defaults because private equity underwrites their investments the same way a bank underwrites their loans to you.

That's true.

All sorts of different vehicles, hedge funds, private equity, venture capital, banks.

It's all underwriting, baby.

It's true.

Yeah.

And you and I have an underwriting.

Background just a little bit.

So we can talk that a little bit.

We can talk that smack.

All right.

So the bad news for smaller and mid sized banks because they're heavily exposed to commercial real estate.

And that is something that we're going to have to carry on a conversation with throughout this dialogue tonight.

They carry a lot of the low yielding assets from zero rate era and have to fund themselves in a much tighter, better environment now that emergency facilities like the Fed's BTFP have expired.

Now I'll explain that in layman terms.

Yeah, break that down.

Community regional banks hold a majority of commercial real estate.

Not just multifamily, but office space.

I want to say industrial thing.

I looked, I looked at this today.

It was over $2 trillion of commercial real estate debt, which is makes up of approximately 80% of all the commercial real estate debt.

And there is a bigger conduit style market.

The larger massive loans think 25, 30 million plus all the way up to hundreds of millions of dollars where I think the larger bank play or some banks will share participations in these things.

But for the most part, a lot of the stuff you see driving up and down the freeways and streets, that's just your community regional bank backing a small business.

Okay.

And if it's owner occupied, that small business's cash flow is used to underwrite that property.

Right.

If it's not owner occupied and it's an investment property, then they're going to look at how much that property can make.

They're going to use something called the debt service coverage ratio.

What would this rent for in the open market to anybody who was an occupant for it?

And they're going to take out the expenses and they're going to go from there and come up with a dollar in profit for every dollar in expense.

And that ratio is the DSCR debt service coverage ratio.

There you go.

If you don't understand it, don't worry about it for the purposes of this conversation.

Just know that banks hold a lot of this risk.

And from the zero interest rate environment, here's the problem for most banks today is the last.

I used to say 14 years, but it's really, now it's closer to 16 years of artificial interest rate deflation.

You had rates held at near zero before the Fed started to raise rates and now are cutting them back down.

Banks were making loans on commercial real estate at 3% in some cases, at 3.5% in some cases.

And it used to be that multifamily apartment loans carried inherently lower risk than like for example, a retail strip building.

Because if one tenant leaves, you know, it's harder to rent that to one tenant versus if one tenant in a multifamily apartment complex leaves, you have several other tenants.

If it's people need somewhere to live.

Diversified risk, right?

Yeah.

So used to be the spread between the two of them were really high.

Meaning that you would have like a 1% or maybe 2% spread between the rates you would give somebody on a multifamily commercial real estate loan versus Retail or industrial, commercial real estate loan.

Well, during that same period of near interest rates, those rates got really close together.

Wow.

Matter of fact, people were so competitive for pricing that everybody was getting effectively the same pricing, no matter what the underlying relative risk was.

And then what happened when interest rates started to go up and values started to come down.

So now you have a market where you have that cash flow for these properties stays about the same.

But their, their expenses go up, insurance goes up, taxes goes up, some of the operational expenses relative to electricity and gas, utilities goes up.

R and M, the maintenance on these properties goes up.

Because guess what?

Wood cost more, steel costs more, contractors cost more, everything costs more, everything costs more.

And these properties for the most part did not have rental increases that kept up with that level of inflation.

No.

Remember inflation to you, the consumer was about 9% according to the headline number.

But we know that we really felt closer to 20%.

Well, business owners are no different.

They really felt it as well.

And the mom and pops can't pass that on to the consumer just as easily because they can't raise their prices fast enough to catch up.

So banks now have all these loans where they're going to effectively double the interest rate and a lot of them cannot be refinanced at the same leverage they were at a couple years ago.

No, they got to bring cash in.

And that in lies the, therein lies the problem.

If you're a small business owner, do you have the money to bring cash in?

Probably don't.

Probably not.

So what do you do?

You sell the property, you default on the property and try to figure out a solution.

If some of them have, and this isn't what it's made to be used for, but if some, if some of them have these lines of credits that they tend to use, like in case of emergencies like this, guess what, guess what's probably not getting renewed this time around.

Yeah, the revolving line of credit for businesses space is going to be an interesting narrative over the course of the next couple years.

A lot of these business owners, unless you have an accounts receivable, accounts payable line with agings and stuff like that, and a lot of people don't, they usually prefer ones that are, I would call are a little bit less structured, then you wind up in a situation that means that you've liberally used that however you see fit or however you need.

I would really like to go and do maybe in the future.

My idea of where we could take this podcast, right.

Is not only the full length episodes that we do, but short some shorter form con content where we show people how to.

How you can I guess, effectively manage a line of credit for a business using that type of model with agings and your accounts receivables and how like a proper business runs it.

Because how the aging process works.

Yeah.

Cuz I mean you.

A good, a properly run business would.

Will use that line to scale their company properly.

And for a lot of people who maybe have never taken a, a business course like this or had, you know, a mentor to help teach them, I mean, you're leaving money on the table.

You, you could use this to your benefit to help scale your business the right way.

There's also lots of different types.

There's like factoring, for example, which I'm not a big fan of.

There's lots of different types of line of credit, lines of credit available to businesses.

And if you're a small business owner like you just think I need the line of credit that I can just tap into and I need it.

You don't think about the infrastructure of what this looks like for you.

And most people rely on their community banker to teach them what's the best.

Well, the problem is some of these community makers aren't that talented and some of them get incentivized to sell you a different product.

Yes.

So you really have to know what you need.

And I think where a lot of them figure that out is they go to trade shows and similarly situated entrepreneurs in the business tell them what they have.

Yeah.

And they kind of triangulate what works.

Oh, I'll just do what they did.

Yeah.

Right, right.

Billy got this.

Yeah.

We got to be careful because you probably, you might not have the same business model.

That's right.

Or you know, they're not telling you the facts of exactly what's going on with them for competitive reasons.

So you never really know.

These banks are getting squeezed from both sides.

Deposit costs are rising while loan demand is slowing.

And the value of the securities portfolio is still underwater.

It's true.

You bought a ton of securities the last 10 years.

Those securities have unrealized losses in them.

That's the scary part.

And that's the part that I mean the three banks that went under.

Right.

New York Community Bank, First Republic Bank.

Silicon Valley bank and Signature bank too.

So for.

They had a lot of unrealized losses.

Right.

And when those started to get reported and they people were starting to go in, there's that contagion period that got built out.

Right?

That's right.

That's really, what freaked out the market?

And every bank was basically held hostage to headline risk.

And keep.

Keep that in mind.

So we're going to talk a little bit more about how much headline risk and freaking out the market really impacts a bank's balance sheet.

Because it's actually kind of shocking.

Yeah.

Because you see all these headlines and you go, oh, my God.

You see the market reaction.

And I'm going to pose the question now for a little bit later on in the show.

Is the reaction a rational reaction to the numbers that we heard?

And I'll break down the math and then you, the audience can decide.

Yeah.

So regulators are going to tighten around the banks, the lending standards, especially around office loans that need to be refinanced in a weaker property environment.

Add in the risk of deposit flight, higher yielding money market funds, and you get a recipe for shrinking margins and rising credit concerns.

This when banks just came off of a very economically prosperous, you know, earnings calls week.

Okay.

J.P. morgan, J.B. diamond came out and said, there's cockroaches in the system.

I saw that.

Interesting choice of words.

There's one.

There's likely more.

So now everybody freaked out about fraud risk.

Yeah.

And you haven't really.

With this narrative going around with there being, you know, a lot of regional banks potentially at risk here.

I'm not hearing much about these banks are, you know, too big to fail.

You know, like that conversation isn't coming around.

It doesn't sound like.

Okay, we'll walk this through.

Okay.

If you're.

If you're JP Morgan, you know, and.

And you're Jamie Dimon, you want these banks to fail because you're more than.

You're willing to be.

The.

The white knight.

Roll in.

Buy First Republic at a discount.

Get somebody at it.

Exactly.

You know, I don't want to do this, guys.

I'll help you guys out.

Yeah.

You know, if I have to.

Right.

You know, I just get more market share.

I don't want more market share.

But if you need me to serve the American people, I'm here for you.

Right.

Just.

Just tell me how much.

I don't need this.

But if you're going to sell it to me, sell it to me at a deep discount.

Yeah.

And make sure that offer.

You're right.

You come correct with that offer.

Because if you don't come correct, then.

Sorry, I mean, you can talk to Brian Moynihan over there, but we haven't.

Brought up old Brian in so long.

BOA CEO.

He hasn't been doing this wide under the radar, bro.

Yeah, he's been real quiet as of late.

I think he was.

They started realizing he was talking about, like, old data.

Oh, he was always talking about one, like, one quarter too late.

I'm like, that guy, right?

I'm like, bro, like, how do we have more updated data than you?

What pissed me off is all the talking heads on CNBC are like, oh, Brian, you know him.

He's just a statistical nerd.

I'm like, what?

Yeah, exactly one.

Hands like them.

Higher.

Stand up.

Boys are coming for me, right?

He was talking about, like, his.

Either a consumer bank, and he sees the savings accounts of his.

Of all the consumers in a great position.

Yeah, my bro.

What?

I'm like, what consumers are you looking at my guy?

Yeah.

I don't think we're seeing the same.

Boy in a hand.

Yeah.

Yeah.

Geez.

Brian, everybody on cnbc, which is Brian, statistical nerd.

They just want him because, like, yeah, Brian Moynihan.

All right, let's get into Zion's Bank.

Zion's Bank Corp. Lost $1 billion of their market value because the stock traded down.

Okay?

That's how much value their stock lost in response to what we now know.

So I want to break this down and I want to explain it, okay?

Because I think if you lose a billion dollars, it's probably something we should talk about.

It's a lot of money.

All right, So a single day this happened, it was Thursday last week.

We were recording this.

On October 20th, they disclosed a $60 million loss worth of based on loans that had made that were unlikely to be repaid.

What led to that point was a messy, tangled web of loans that Zion said were surreptitiously subordinated by the borrowers, all while collateral was effectively eliminated.

So, long story real short.

They made a loan to them secured by property, but on the mortgage notes.

Okay, so they didn't make a new loan on a property.

They made a loan on the loan.

Okay, Right.

I know it sounds cavalier, Right?

This happens all the time.

Let's say you make me say it.

Your side bank makes me, the consumer, a loan for $1 million.

Okay, but you say bank wants leverage on that.

Yeah.

What do you do?

You go get a loan for 500,000 on that.

You tell the bank, look, you got.

Right, 50% LTV to cover a little.

Bit of my risk.

Yeah.

The underlying property protects you because I made a 50% LTV.

So now the property's worth 2 million.

You got a loan to me for half a million, and I got.

They Got a loan to me for a million.

There you go.

Right.

It's 1.5 million all in.

Even if I don't pay you, they don't pay me.

You still can get $500 million in.

$500,000 in coverage.

Right?

Sounds beautiful.

Yeah, that's how banks work.

Sign me up.

Except when you do this in a world where that property, that property don't exist.

That loan on the property that I had for 2 million, that's not their poof.

Gone.

It's gone.

Sorry, Rejeel.

Just like him.

Cut to Rejeel.

Shout out my guy.

So because it's not there, the underlying collateral isn't there.

Which means your million dollar loan on this property which doesn't exist is not worth anything.

And I. Zion's bank gave you half a million dollars on a loan on a property which is not collateralized.

Scary hours, man.

Scary hours.

They're.

They're alleging fraud.

We don't know so.

Shares of the regional banks all tumbled that Thursday as fears mounted around the health of their lending businesses.

Are all banks like this?

Or similarly situated banks across the country.

Do they have this fraud risk?

Is this systemic?

Is this unique?

Is it what the headline talking heads were calling idiosyncratic risk?

Yeah.

Unique to this set of circumstances.

Zions lost 13% in their share price that $1 billion in that day.

Possible broader issues with lending for regional bank sector.

Well, we don't know.

Knocking the whole US stock market.

On Thursday, the Dow Jones industrial average finished lower by 300 points.

It didn't.

I mean not only was it across the banking sector, but it brought down the entire Dow Jones scary Zion subsidiary.

California bank and Trust is suing Andrew Stupin and Gerald Marcille.

Stupid.

And Marcil can't make it up.

So let that roast.

Yeah.

Until now, relatively unknown managers of several funds utilizing the name Cantor Group doing along with their association Deba Cheyenne or associate Debba Shyam.

I don't know.

There's also some local Orange county banks that are involved in this too.

From what I understand, these credit facilities were to be used by the funds to purchase distressed residential and commercial mortgage loans.

Let's pause there.

Okay.

You knew as Zions Bank Corp.

When you provided financing to these loans.

These loans that you were giving.

You say Zion's Bank Corp. Was giving me.

Right.

The stupid group was.

Yeah.

Was.

Was trouble debt.

I was buying trouble debt.

Loans that had either problem being repaid or there was some type of issue with that just carries inherently more risk in and of itself.

Right there.

Well why would you do it?

Well, probably because you can pay a lot of interest rate.

Probably.

Yeah.

But whatever the case may be, according to them, these guys lied to them about the mortgages that were there, and there weren't any liens.

They're actually going a step further saying that there were mortgages in place and they were appropriate, but they foreclosed them out and wiped out the mortgages in some circumstances.

Okay.

Or manipulated title reports to show there was.

This is really just a balance sheet thing.

Don't, don't look too deep into it.

It's just.

We moved it over here.

Yeah.

Yeah.

Well, it's a problem.

So Zion said they had an underwritten agreement guaranteeing them first priority interest, meaning the bank's claim on the collateral superior to other creditors claims in the event of default.

However, the deeds that were supposed to secure the loans were ultimately subordinated without CBNT's knowledge.

Zion said in the lawsuit those underlying properties were transferred to other entities or were in foreclosure, meaning the collateral was irretrievably lost.

Zions claimed this is the way that Zions found out about their.

Oh, I'm sorry.

The way that they found out about their situation was that another bank, Western alliance, already started a lawsuit for this.

So that's why Western alliance and Zion erupted in the same conversation.

But if two banks, two big banks, I would call them super community regionals, probably they wound up in the situation.

The question then remains, how many other banks across the country have this type of risk?

That's, that's the scary part, right?

And I mean, they're given, I mean, bankers a bad name.

I mean, we've said this, we've said on the show here, right?

Like the, the reason why you would go to a regional bank is that concierge service, right?

You build a true, a true relationship where you actually matter to them and as you continue to grow, it helps the bank and you should be serving a mutual benefit, right?

But hearing something like this, I mean, if I was somebody who was starting out a business, this would freak me out, right?

I mean, it's probably justified, right?

So it's like, I mean, how could, how could somebody, you know, vet this out or I guess be careful?

I mean, I don't even know if you could.

I don't think you can.

This type of credit risk is in the system.

You could look at banks, balance sheets, but we're not all banking experts.

That's what I mean.

I wouldn't expect people to do that.

Small business owner is not going to look at a bank's balance sheet.

Here's what I'll say, is that they issued an 8k in response to this.

And for those of you who don't know, it's a significant material event affecting the stock price.

And again, those who are technical.

I'm watering it down because I want to be vague here.

You file an AK to tell the general public something about the institution.

They're saying that they're taking a fifty million dollar loss now.

Ten million dollars is possibly going to be recouped of this sixty million dollar loan.

Right.

So they did that.

They were, they're honest and forthcoming.

They actually, today, October 20th, they released their earnings today.

And they're actually pretty strong.

Their, their stock price rebound a little bit.

They're really.

They're strong.

Their earnings are pretty strong.

Yeah.

So you saw a lot of that idiosyncratic risk conversation peak up.

So I don't know that this is systemic, a big issue per se.

Okay.

But I do think there are lots of underlying risks like that out there.

And which one of them becomes the issue, I don't know.

But I can bring up another possible scenario with which we could see one.

Yeah, please do.

Okay, well, endgame macro via X was the previous.

I want to make sure we cited that.

And it was regional.

Bank stock prices are sliding.

I went into Zion's Bank Corp thing because I thought it was important, but then I was like, okay, wait a minute.

What other sector could we hit?

Well, more Americans are falling behind on their auto loan payments.

Here's why.

According to CBS News, that's just an open right, in your face answer.

Right?

Right.

Have you seen the numbers in this?

Yes, I have because I read the show notes.

But yeah, go ahead.

Had you heard it before?

I mean, I'd heard the headline before.

Have you?

No, not this high.

Really?

Yeah, I've been hearing this on cnbc.

Other places they've been talking about it.

And I don't know why, I don't know why this is taking a back seat to the Zion stuff.

Maybe because the Zion had one transaction that was big.

Right.

I mean, we had.

I mean, on this show, we had suspected it for a long time, especially the subprime auto loan stuff.

Right.

I mean, and that, and this is.

I mean, let's, let's let you get into the article and we could dive into it.

So perspective here is if Zion's Bank Corp. Is taking this type of scrutiny for one loan, $50 million, that's nothing compared to the sector damage that could be Here.

No, nothing.

Right.

A recent study by VantageScore found that auto loan delinquency rates have increased by more than 50, 50% over the past 15 years.

The upward trend continues even as delinquency rates in other loan categories, including credit card loans, personal loans, home equity loans, have declined, according to the report.

Back in 2010, auto loans were the least risky of all products at that point in time, Ricard chief economist, Advantage Score, said in a recent video.

Now, as we look at 2025, it's actually excluding student loans, the riskiest credit product in the market.

Excluding student loans.

Yeah.

Student loans are.

Yeah.

A weird space right now that people banked on forbearance and I begged them to understand that that was not constitutional and not going to be universally applied.

Yeah.

And I know that people are saying, well, my friend got certain law enfor.

I don't know anybody who got it.

Okay.

I don't know how a single person.

So I.

It just strikes me as weird.

Now, the scary part about this, right.

Is typically speaking, when things start to go south for, for people in their finances.

Yeah.

Auto loans is one of the last things that goes.

Right.

Because you need your car to get to work presumptively.

You have a car because you need one.

Yeah, exactly.

You're not in a major metropolitan area where you have good, reliable transport.

I would think that if you're, if you're delinquent on your auto loan, you're delinquent on your credit card payments.

Right.

Maybe in the next couple paragraphs will explain.

I think the luxury vehicle market became a big problem.

Oh, the luxury vehicle.

I think people, and I'll use the student loan example, people said I don't have to pay my student loan, so I'm gonna buy a nicer car.

Yeah.

Yeah, right.

I've got a thousand dollars a month in student loans gone.

So now I can buy a 600amonth car versus what I would probably buy, you know, 400amonth car.

Yeah.

But I think that that's not even reasonable anymore.

I think the average price for a brand new car is.

I mean, people are probably out saying, I'm gonna go buy a brand new car when they should have probably been buying a used car.

Right.

I don't believe in new cars.

Although I bought a lot of.

Actually I bought it.

I can't say that anymore.

Yeah, I bought a lot of new.

Cars when I, when I was, when I was younger, I bought nothing but used cars.

But lately it's been nothing but new.

But I plan on like holding my cars for a long time.

I hold mine yeah, too.

At least starting with the Jeep.

Anyway.

Well, let's get into a little more details here.

One of the main factors hurting car owners is rapidly increasing monthly payments.

Data from the Federal Reserve shows that average monthly payments increased roughly $130 from January 2020 to January 2023 to $600 average.

Because interest rates rose.

Interest rates rose and the cost of cars went up.

Pausing here, corollary to the housing market.

Yeah.

This is something you should think about.

And you go, wait a minute.

All of this stuff is exactly the same for the housing market.

And honestly, I remember because I bought a car during that time.

Remember the wife got into a really bad car accident.

Oh, yeah, that's right.

It was, it was scary hours back then.

But I remember they were.

It felt intentional.

I know that there was a whole supply chain issue.

Was it really, though?

Honestly, I think that they saw that they had a brief window in time where they could capitalize on the low inventory and people, they started seeing.

People were buying cars in transit.

I was one of them.

Let's be real.

I bought, I bought a car that I hadn't even sat in.

Right.

Because granted, I knew the car.

I had.

I had friends that owned the car.

I get it.

I hear you.

Right.

This show has made me.

Because of the finance knowledge that we have.

Because we've done the show.

Yeah.

Not something we possess before we got here.

Just, we do this every single week.

No, I definitely learned way more just because just to stay up to date, which is fine.

And that, that was an anticipated.

Well, I did not expect was.

I am way, way, way more, less likely to believe like the headline.

And now I buy the conspiracy is in my head now.

Is it really?

Oh, yeah.

Because I look at these companies and I think to myself, okay, you're a major manufacturer of auto parts.

Right.

Or you're a major manufacturer of cars.

Yeah.

You guys have three months of product sitting on your shelves to supply.

You're not running month to month.

And yet these guys are jacking prices the next month going, hey guys, our prices are going to go up.

Yeah.

Did they really?

Yeah, I know there's some price gouging there for sure.

And I look at the companies, okay, all these companies went to the pandemic.

All these companies went through the stimulus.

All these companies were like, oh man, we're going to struggle.

They all jacked their prices up.

Another good example of this is I still see places to this day where I'm paying Higher prices to cover, quote, insurance for workers at servers and restaurants.

And don't be wrong.

I want the insurance for servers and workers at restaurants.

Why am I paying a separate Covid related charge for that?

Still.

Still raise your prices, my guy.

Yeah, don't add an extra tax to my stuff.

And I hate to be this guy, too, but when I start seeing stuff like that, I'm like, okay, well, I'm sorry.

I'm not coming back.

Yeah, no offense.

And tipping culture again.

I've said this for years in the show.

Wildly out of control.

Yeah.

And, yeah, I don't know.

Good for you.

You still do it.

Honestly, I can't.

I can't.

When I had my whole barber situation when they were.

When I.

They were raising prices on me.

Yeah.

I'm like, I mean, okay, raise the price.

You're just not getting a tip anymore.

Like, there's nothing I can do about that.

Stop.

Don't make me.

Don't make me the bad guy.

Don't make me the bad you Raise your price now.

I remember when it was like 8, 10, and 12.

I rarely see one that's not 15.

18, 20 now, bro, I don't see it.

I don't see anything below 15.

Honestly.

I see.

I think I see 18, 20, 22, even.

Yeah, I see that a lot from time to time.

What?

That 1 in 15, 18, 20.

I.

Then I look like the jerk looking for where's the other?

Or what?

You know, but where is it?

And I am quickly getting to the point where I want to go back to cash so I can intentionally not leave you.

I want you to see me not leaving you a tip.

No, yeah, I do.

But that's not.

But that's not the waiter wages.

No, no, no, no, no.

At a place where I get service.

That's not what I'm talking about.

I'm talking about places that don't give me service and still want me to tip.

No, no, no.

That's your fault.

Hold on.

That's your fault.

I had wife.

You listen, you're not expected to tip.

If.

If I'm just.

Why are y' all asking me for a tip, then?

Yeah, that's the point.

That's the point.

I know that's ridiculous.

And let's.

It's ridiculous since I'm here.

You postmates.

Okay, Postmates.

For some reason, not on Postmates.

$20.

I'm a DoorDash guy.

Same.

Same rules apply here.

Looks like it's $20.

Yeah.

Yeah.

And somehow when you go to check out, they don't give you pricing.

And then you hit check out.

I get.

I get the alert from my credit card and it winds up being like 45.

I'm like, what the hell happened?

What happened?

Yeah.

Sign up for this delivery fee.

Tax, taxes, tip.

You're paying as much for the meal, if not more in some cases for delivery than you are.

I'm like, what am I doing?

Yeah, I'm paying 45 for burritos now.

Yes.

You know, you're supporting another family and people are.

This is people's second third jobs.

And look, man, I had a conversation with somebody you and I both know really well who told me that he tried this at one point in time.

Yeah, he'd be like $12 in a night.

And then that's.

Yeah, that's.

So now I'm like, I can't be the guy who doesn't tip the guy who makes $12 in a night, because that's a good dude.

How are you gonna sleep at night?

I don't sleep very much, Saeed.

But at the same time, I'm like, fuck you.

Tips.

Yeah.

So I'm very conflicted about this.

So there are people that I absolutely will tip.

Job.

Your postmates.

Yeah.

Don't postmates.

Your job.

Never gonna go away.

Never has to stay forever.

All right, so.

Payments have continued to escalate.

One in five new car loans have monthly payments that exceed $1,000.

20% of car loans, according to auto researcher Edmonds.

Behind the ballooning payments are rising car prices and interest rates.

The average cost of a new vehicle is now more than $50,000.

I was gonna say I think a year ago is 48, 000.

Yeah.

Yeah.

It's gone up pretty, pretty, pretty high.

And it's really difficult to.

To ignore.

I mean, how am I gonna buy my.

My kid a car?

I'm already stressing out about this.

My kid's nine.

Yeah, I know.

That's not that far away from me.

I think most all the time too.

I'm not buying you a new car, dude.

I've actively been trading my son's trade account because I'm like, I need more.

Money for this kid, honestly.

No, you're gonna get.

I'm sending you on Uber.

Like wherever you gotta go get yourself an Uber.

You know the part that bothers me the most is having gone through a long analysis on the endowments for these schools.

They do not need your tuition.

Not anymore.

Yeah, no way.

They have multi billion dollar endowments and they're making more than your tuition.

Is not Doing a whole lot for them financially.

And really honestly, I can't remember who I heard say this.

Okay, forget about, forget about college and universities.

Okay.

But just think about the public education system.

At some point, I don't know how soon it might, it's probably, probably not gonna be this generation.

It might be in the generation or two from now.

Yeah.

But at some point it's going to get to the point where they realize, okay, this person teaches this subject very well.

We're gonna, we're gonna have them do it, we're gonna have them record it and we're gonna set it up.

This is what everyone's gonna learn.

Yeah.

Right.

There's.

And there's no reason why, why wouldn't you do that now?

Why would you.

First of all, why would you not use AI?

Yeah, you're gonna have a point.

We're gonna have an AI avatar.

Yeah.

And the AI avatar is going to sit in class and imagine this.

You ask your teacher question.

There is not a question your AI avatar teacher won't know the answer to.

Oh yeah, and you know how they're going to start selling it too?

They're going to start pushing down, you know, the parent sources, like, are you going, Kids gonna get more one on one attention?

Yeah.

They're not gonna get this 30 to 1 ratio.

But here's this works, right?

And this is the sad truth of it.

You're gonna say, okay, look, the AI avatar doesn't personalize lectures for you in person.

So you have to do it from home with your VR headset on.

But the only way this happens is remote work.

How are people gonna stay home?

Back in the day, maybe this could have worked.

When you had a traditional family where one person went to work, one person stayed home.

Right.

Nowadays we've talked about this.

The like a majority of families out there have three jobs between two people.

Yeah.

We know a guy from the last episode, episode 305 that can teach you how to get multiple jobs.

What a piece of.

Yeah, Multiple six figure jobs.

Multiple six figures.

I can optimize your work.

What do you call it?

Stacking them.

Yeah.

Job stacking.

Job stacking.

Yeah.

Pay me to help you job stack.

Jeez, come on, I'll send you a postcard when you're in prison, homie.

Yeah.

These guys just look for the craziest buzzwords.

They go, oh, that sounds good.

A, B and B, Airbnb, Arbitrage.

Have you heard about this new thing I'm doing?

I'm job stacking.

I'm job Stacking, what's that?

Oh, yeah.

This is where you get two jobs and you stack them on top of each other.

Yeah.

Now I'm making double the income, bro.

It's called being a scumbag.

Yeah, yeah.

There are ethical ways to do this.

Like I'm not saying don't do, like don't do extra work.

Yeah.

I'm just saying do it in an ethical, responsible, disclosed way.

Yeah.

Don't lie your way through an algorithmic interview.

Oh, do it.

Do it five to nine.

But you see these guys who, who do they have like the AI in the screen and they're doing a job interview where the job interviewers.

Oh, all the time.

It's just answering for them in real time and they're just reading it up.

Right.

Let me see your screen.

Show them the screen.

But the screen is the second screen.

It's just so stupid.

It's.

I know.

Are people like really getting away with that?

That's the job stacking guy for sure.

For sure.

Teaching for sure.

Just bothers me.

So it wasn't just, unfortunately it wasn't just cars that, that r rang the alarm for me.

The housing market has been notable.

It started with Lance Lambert calling US home prices as measured by Zillow.

The home price index fell.

This is from X basically said US home prices measured by Zillow home value index fell negative 0.2% between August 2025 and September 2025.

Reading.

I know it sounds like home prices are going down per se across the country, but on average it's actually just softening.

So I want to be clear here, a little bit of an asterisk year over year plus.01%.

So barely up but still up.

Yeah.

Last month was down negative 0.1%.

So kind of neutral there.

Since the 2022 peak, we're only up about 2.9%.

For a perspective, since March of 2020 to now we're up 45.

So we talked about at the top of the show that there's a 99 chance at a rate cut at the end of this month.

Over 99.

Yeah.

What do you think that does to the 10 year Treasury?

Is this rate cut already baked in?

Is it gonna, could it impact it at all or.

I mean we've talked about on the show where don't be surprised if you, if you even see the treasuries rise.

I know a lot of people think that it'll.

It, it follows suit.

So you, you know how this week there was in the part of last week there Was a bit of a rhetoric around how the mortgage rates had lowered out.

And everything's great.

And everything's amazing.

Oh yeah, that was anticipating to this.

This upgrade cut.

So that's it.

See that, that's.

That goes to show people that it's.

This is when it's already baked in.

It's already baked in.

So they were baking in this great probability of a rate cut.

Last week.

All the lenders were like, okay, hey, you know, Saeed lender, we could steal some extra market share by lowering our rates now because we know next week they're cut the fed funds rate.

Oh, yeah.

So we'll be ahead of the game.

We'll be ahead of the game.

So let's just drag in business because we're smart.

Yeah, right.

And everybody else around you, they're smart.

They cut rates.

Yeah.

But then what happens is they cut rates.

Everybody's like, oh, mortgage is gonna drop anymore.

And like, no, no, they dropped.

No, no, they're dropped more.

No, no, they drop.

Guys, they dropped.

It was baked in.

Cooked in.

Yeah, we already did it.

The cookies are inside, right?

Yeah.

And then what happens?

The ten year rises afterward.

Oops.

Yeah, should have, should have locked it in.

And mortgage, mortgage rates will creep up a little bit until such time as we close 45 days from now to the next fed funds.

Yeah.

So actually the next one's December, isn't it?

Yeah.

I think I saw, I think I saw your boy Matt post this too.

Who came?

Who came on the show?

Yeah, how do you pronounce his last name?

I don't know.

I just swung it.

He said, he said on the show, now's the time to lock it in now.

Yeah, because he said this like last week.

I like Matt a great deal.

Yeah, I like one lot too.

His fitness journey is crazy.

Yeah, man.

And he's gonna be a dad soon.

It's a whole thing.

Oh, speaking about being a dad soon, shout out to Ted.

Ted lifts.

Oh, yeah.

He's gonna be a dad too.

No.

Yeah.

Wow.

Those guys started listening to this show when they were like early babies.

Early.

Yeah, early man.

So shout out to Ted.

Him and his wife.

Are we that Jesus.

Expecting a baby girl?

You're not keeping up with the listeners, bro.

No, dude, I'm.

Because I'm sitting here trying to make content for us.

I'm over here micro obsessing over goddamn thumbnails like I'm a YouTuber.

No, you're doing a great job.

What would Mr.

Beast do?

I need more money logos.

Why.

The thumbnails are crushing, though, aren't they're not, no.

Yeah, they are.

The last episode.

In order to crush, you have to get more views.

Last episode.

Maybe.

Maybe someday.

Someday we.

We go down the rabbit hole of teaching everybody about all the stuff that we learned about what goes on on the back end.

There's a lot of corrupt stuff on the back.

That was.

That was not a euphemism.

Yeah.

Let me tell you right now, the back end is dirty.

It's the dirty back end.

Nobody watches the back end.

Right.

Yeah.

If you don't know what you're doing, you don't know how to navigate back there.

Listen up, America.

If you get messy speech, it gets messy.

You do not have free speech.

This algorithm is cooked.

You might have just cooked this again.

No, stop.

I didn't say the buzzwords.

You can't stop it.

Let me go there.

No, no, no buzzwords.

Cuss at you with somebody's name.

Ban this episode.

It took us a long time.

So I have been going down the rabbit hole in the algorithm, and it's been really fascinating because think about this podcast.

On traditional audio streaming platforms, you don't really advertise a market for it.

Those are entirely word of mouth.

Yeah.

Yeah.

So you go on somebody else's podcast.

That's word of mouth.

They like you.

The audience likes you, resonate with you.

So if you go listen.

So if you like us, the best thing you could do for us is not just like and comment on the videos, but honestly, it's referring it to a friend or a family member that you feel like could use the information that we're giving y'.

All.

Yeah.

But admittedly, on YouTube, it's a tough game in 2025.

It's not like it was even in 2023 and 2022.

Yeah.

For some reason in this year, it is just a really, really difficult game, honestly.

You know what it feels like?

It feels like playing a pickup game and spotting.

Playing a pickup game to 15.

You spotted somebody 10 points.

But there's all sorts of technicalities, weird things, things that don't.

People don't talk about, don't even know about.

And it's crazy.

When you talk to really experienced YouTubers, a lot of them don't even know this stuff.

Their channel is just so large at this point that the algorithm favors them anyway.

True.

And there's lots of things we could break down from a YouTube perspective.

If anybody wants to hear that, send us a DM I. I've got some really interesting business use case Experience from just me playing with the algorithm and some conversations you and I have had.

Plus, I've been talking to Logan, Jake, and Logan, Paul's boy, Caleb about, you know, our show and everything else, and learned a little bit there as well.

It's fascinating.

And we got some more stuff in the work too.

Stuff.

Stuffs.

Assuming it all goes through.

So we know that home prices are softening, but it's softening.

You say how much?

Where, what?

It's a lot, bro.

It's a lot.

We're not gonna hit all these because a lot of number names on this list, but if you want to take.

It down, say, Sunbelt states are feeling it a little bit.

Yeah, let's go.

Austin, Texas, top of the list.

You know, that was, that was a really hot spot for a long time.

They're down 23.4%.

Ouch.

Yeah.

You think they're the guys who listen to Dave Ramsey and go, he said, helen, probably supposed to go up every year for the next five years.

Yeah.

Yeah.

He sounded like my dad, Like I trusted him.

He acts like he's my dad.

I mean, he's a bald, old, rich dude.

He's gotta know.

He's gotta know.

Okay.

This one, for, for whatever reason will always, always, like, affect me.

I don't know.

I really love this city.

I love San Francisco too.

I love San Francisco, down 10.9%.

I try not to go there now.

It's too dangerous, bro.

It's.

Forget it.

I mean, it's always been a little sketch, but now it's like.

I mean, stabbings, like in, in broad daylight is wild.

Yeah, yeah.

I, I, Last time I was there, I saw somebody peeing and playing a video game at the same time on the street, on a, On a, On a television set.

They put on top of a car and broke into the car and hardwired the television set to the car and was peeing while he was playing it on top of the car in the street.

This is like in Union.

That's some Grand Theft Autos type stuff right now.

I drove by like, well, it's gonna be a short trip.

Where'd you get that idea from, though?

Honestly?

All right, we got Phoenix, Arizona, down 10.3%.

San Antonio, down 8.5%.

Denver, Colorado, 7.2%.

Sacramento, down 7.3%.

Tampa, 7.2%.

Now, now here's the thing.

We're going down and we're listing all these cities, right?

And you said the all in figure, year over year was up 0.01%.01% negligible.

So what does that mean?

As we're listing all these big markets, right?

These, you know, big metropolitan areas that are going down, but that also means in other parts of the country, it's.

It's flipping on the other side.

So.

And I attribute that to the most obvious answer.

Okay, tell me.

People exiting big, expensive cities to go to smaller cities where they can afford a home.

100 and a lot of people exited large cities to go to Austin, but then Austin got too expensive other places.

This is a really good conversation.

I. I had a conversation with somebody at work about this.

We'll remain nameless and we'll talk later in the show.

You'll probably figure it out as we're talking.

But we're like, man, our parents living here when they did and seeing what the real estate market was doing.

Yeah, right.

They should have known better.

You, you're setting us up for failure.

Granted, we got lucky.

We're in a home now.

But what is that going to do to my kids?

I can't.

If we.

My kids are not going to be able to afford to stay here.

You don't really mean that, do you?

Your parents can't have the foresight to know that this is going to happen to the.

Keep in mind what your parents live through.

Right?

So you got.

Let's see.

So you give an age here.

I'm just gonna go 1970s, 1980s, 1990s, all three of them had recessions.

No, this is, this is, this is.

This is what I. I mean, they should have noticed it and.

I mean, I should have noticed it, too.

What, 2001?

No, the fact that.

No, no.

The fact that, okay, at one point, at some point in time, it got to a point where both of them had to start working.

Yeah, well, I get that.

Just to be able to.

That's nationwide, though.

No, no, no, I. Yeah, no, not necessarily, bro.

No.

You don't have job stacking like that, guys.

I mean, come on.

You don't have like this nonsense going on because it's just isolated in major metropolitan areas where it's expensive.

It's happening all across the country.

Yeah, but half my rentals are in Oklahoma.

So then now.

Now am I doing my kids a disservice by staying?

No, I mean, they're not going to be able to stay, so either you're going to rent.

That's not true.

You don't know that.

Really?

Tell me why you don't know that.

Because, look, man, right now it does feel like the weight of the World is against people.

It's the hardest ever in history to buy a home.

And we're gonna go through some of the metrics too, which, which make it sound even more compelling.

I get that.

But the wealth reset is gonna help me out.

No, everybody else going forward is gonna help you.

I'm gonna try to say this in and eloquent ways that, that.

All right, so let me, let me take an approach here.

I'm going to try to say this without offending people because there is an underlying element here which may be offensive.

Blue collar versus white collar.

Yep.

Right.

White collar wasn't the hardworking.

It was the wealthy sons and daughters of wealthy people who came into affluence and didn't have to work.

Work.

Corporate jobs.

Corporate jobs and sweat.

And the reason why they wore blue collars, they didn't see the stains as much as the white collars did because you were, you weren't sweating in your clothes.

There you go.

Right.

You weren't the working prototype.

There is something to be said in corporate American history where once you.

I'm just going to say some stuff that might be a little bit charged here.

No, I mean, you're.

My mom and dad are not going to be able to leave me any assets.

I will not get an advanced start for my mom and dad.

I've been paying for my mom's mortgage for a number of years.

I bought her the house.

I, I certainly helped my dad and I am grateful in, elated that I'm in a position to be able to do so.

Sometimes I get a little salty about it, but, you know, it's just.

I'm sure you.

Yeah, because I mean, we've seen the, the trust fund babies come through our shops and they've been handed a lot.

But we shouldn't stigmatize that because that's where this is going.

No, I mean, if the, the fact of the matter is, is you, because of your parents decision and because of your decisions which gave you a home, you will have the ability to pass down assets to your children.

Yeah, yeah, yeah, yeah.

That you never had at.

Passed down to you.

True.

No, absolutely.

Right, right, right.

Now, I'm not saying they should wait and hope for you to die, but your parents will also have the ability, because they bought those homes when they did, to pass down assets, most likely not to you, but to your children.

Yeah, yeah, absolutely.

And we talked about this on the, on the great Wealth Transfer, how it was a bit of a farce and it was episode 303, but that's where that the great wealth transfer isn't going to you and me.

No, no.

It's going to our kids.

Right.

Which may help to ease some of the generational gap pain as the.

The world, particularly United States reevaluates the financial position.

Absolutely.

I mean, hopefully.

And look, I think there's something to be said here.

It will, to be clear, disproportionately benefit some people versus others.

There's no way.

No, no.

And it will.

And it all.

And it all.

It's all going to depend on.

Look, for some people, they're.

They're gonna.

Phil, they're gonna.

They're gonna be luckier because a lot of people are starting their families later in life too now because.

Because they're.

A lot of people tend to not start a family until they own their first home.

And now, you know, people who used to buy their first home used to be the age of 30.

Now we're looking at age 36, 37.

Right.

New reports came out.

I think it was older than that.

Even older than that.

Look.

So I think it was like 30 something.

So people are.

Yeah.

And we never know.

Life expectancy might.

Might go higher too.

And I hope so.

100 it is.

But you're seeing.

But there's something to be said.

And unfortunately, this is something that can't be measured.

Right.

But you, you also don't know, and I'm curious to get your take on this, how much of where you're at right now as far as like financial security is because you didn't have that.

Knowing that I'm going to get past.

Something down 100% of it.

So see, so there's.

There's also.

And to this day still fear being poor.

Mm.

Every single thing I do is.

Is fear of poverty because I grew up hyper.

So it's weird.

My dad acquired wealth later on and lost it all with bad decision making.

And you know, I love my dad to death, but no one taught him how to manage.

Meant well.

Yeah.

Yeah.

He meant well.

And people all think that they have money, but the problem is, is the money that you have has challenges that were not at all equipped.

And this show, I hope, neutralizes that for some people.

But some.

Most people who acquire money and wealth, if they haven't done it over time and it's not progressive load will lose that money.

Yeah.

Because they don't understand what it takes to keep it.

Getting there is only one part.

Keeping it and building it is a completely different animal.

And if you're not equipped for that different Animal.

You can always get it, but you'll lose it again.

Get it, but you'll lose it again.

And if you're caught in the lose it again cycle, when you're old enough to not get it again, then you wind up like most people in America, where you can talk about all the amazing times that you had, but you wind up like Johnny Depp on, like, in Blow at the end of the movie.

Right.

And it's not.

It's not a good situation.

So.

And I grew up hyper poor in.

In certain moments of my life, my mom grew up hyper poor.

I don't care about the luxury stuff.

I really don't.

I think I was telling you before the show started that I'm at this position in life now where I have so much clothes and so much stuff.

Yeah.

I want to narrow it down to, like, a minimalist wardrobe, minimalist stuff, and be very, very simple.

Just because it's one less decision to make.

Yeah, man, I know.

Decision fatigue is real, and it's real for me.

I'm feeling it as I'm getting.

As I'm getting older.

I'm.

I'm seeing, like, in some of the decisions that I'm having to make in real time is.

Are things that I didn't have to make before as the kids get older.

Dad, can you help me with this homework assignment?

I got to actively decide right now.

Like, yeah, I gotta.

I gotta cut out this time to help you, you know, with this homework assignment.

Yeah, it's wild, you know, and like, that's not a decision that had to make because it's not.

That's not just a quick decision.

I can make the decision and move on.

Is.

No, no, I got to be present.

Right.

I got to have the right attitude about it.

I got to make.

I got to think about all the things that I want to be as a parent and do it.

And that.

That's draining sometimes, you know, when middle of the day, like, you have other things you need to be focusing on.

100, man.

And I don't think you can take that away.

And yet most of America will.

Will be so caught up in the rat race that they don't take the time out to think.

It's easy to ignore these things because you're not faced with them right away.

It's a conversation that I've had with my brother a number of times over the years that he keeps, you know, getting frustrated that I keep bringing up.

When you're a dad, you'll know.

And the sad part is, is he sees me, his brother, telling him that, here's the reality.

I am your father.

And I don't mean that in a condescending, arrogant way.

My dad's 73.

Okay.

When my dad.

Okay, 73.

I'm 45.

So he had me when he was, what, 28, right?

Yeah, 60.

Yeah, 28.

So again, my.

My brother is about 28, and I'm about 45.

There you go.

Right.

So it's.

I'm closer in age and function and cognitive ability that.

Than my dad was to me than I am to you.

Especially when you factor in life experiences.

In life experiences.

But when you try to tell people that they see the older, wiser person as having wisdom, but they don't realize that.

God, the, the business of being financially savvy has an inflection point.

It's parabolic.

What do you mean?

Goes up and it goes down.

And there's a point where we all get to.

Where at some time, at some point at the top of the bell curve, we know enough to know about how much we don't know.

And you know enough to know that the decisions that you make that you thought you could handle when you were younger really do take something out of you.

And then you know that you have to start being more mindful of your time.

Who you spend your time with, what you spend your time doing, how you spend your time doing it.

And you also know that each one of those fleeting moments of memories with your kids are meaningful.

Yeah.

In a way that you cannot measure because you don't know which one of those moments is going to imprint on them.

Oh, I know.

That's the scary part.

That's the part that scares me the most.

And I think I was listening to an old interview of Peter Attia.

I can't remember who's.

It was either on Huberman or Rogan.

And he was talking about this.

I mean, like, I'm human at the end of the day, as much as I know.

I, I.

We joke about on the show that I try to portray this, like, great dad image.

Like, dude, I get frustrated a lot at home, too.

Me too.

Right?

It's like, it's.

I think it's.

I think it's.

And some of that, I feel like it's.

It's good for the kids to see.

It's not like, it's not gonna all be, like, rainbows and lollipops and they.

Don'T need a robot for a father.

Right.

Like, okay, you're gonna.

You're gonna see some real life Expression, too.

Yeah.

But what I.

What I've tried to adopt now, and I try to remind myself every time I'm in this moment.

It's really difficult is I imagine that you're 80 years old and you can come back to this moment right now and relive this one moment right now.

I wanted to replay.

Yeah, yeah, right.

And I'm like, okay.

Like, when I.

When I do do that, it's like, okay, I can be.

I can be a little bit more present.

I do something similar, but I do it in a bit of a different twist is I keep closing my eyes and thinking back to when I was a kid and the moments that imprinted on me.

Yeah, right.

And it's not like these big.

I mean, there are some big moments that are there, that are the ones you would think of, but there's some moments I lost a toy that I had outside of a mosque with my father when I was young.

And my grandfather was there before he passed away at the age of 63.

And my dad and my grandfather, before cell phones and everybody had lights in their pockets.

Spent an hour looking through rocks for this small little toy.

I remember it so vividly.

The compassion, the.

The joking that they were making.

They weren't angry.

Yeah.

You know, they were just like, you know, making fun of each other and having a good time, making light of it.

And they found it and we moved on with our night.

You remember that?

And I remember it.

But nobody lost their cool and everybody had a good time.

And it's.

It's such an innocuous moment.

Neither one of them remembered it before.

Before one pass.

And my dad, to this day doesn't remember, has no idea what I'm talking about.

Right.

But it left an impact on you.

It imprinted.

Yeah.

And those are the moments that if you're not there to do that.

Yeah, man.

You can't make that happen.

And it's not going to be the moments that you think of.

You are most likely not going to remember them as a dad.

110.

You're 100.

Right.

I know.

And for me, too.

One day maybe I'll get to the point where I'll share some stuff that I've been dealing with on the show in the past.

I'm not there yet.

Right.

But I've been dealing with some stuff with, With.

With my parents.

Me too, dude.

And they've all.

And they're.

And they're going through their stuff.

So over the last like two years or so, and a lot of times I'll catch myself.

And it resonates more.

It hits more when I'm with my son, just because it's my son versus my daughter.

But my, When I see my son, I see me looking at me.

Right?

I did.

Your son looks like my son looks like me.

I'm trying not to get emotional, but because you go through those times, you're like, oh, so, like, he's seeing what I saw back then.

I got to remember that that's me I'm imprinting on.

On me right now, you know?

And my daughter, for whatever reason, is different.

I, I, I love them both, obviously the same, but it's very easy for me to, like, snap into dad mode and just love her, show her the unconditional love, show her how much I love her mom, how I treat her mom.

I think for dads, and I don't have a daughter, but I've got three younger sisters, two of which were definitely more like daughters to me, and the third one is just more of a pain in the ass.

But I think for dads, when it comes to daughters, it's.

You see your wife in your daughter a little bit.

Oh, a lot.

Whereas you see your son in you a little bit.

You see yourself and your son a little bit.

Yeah, I see.

I definitely see that.

And for whatever reason, like, it's not that I don't try to.

I'm not putting, like, gender roles out there or anything.

No, no.

It's just your natural biologics.

Exactly.

And when I see, when I see my daughter, there's a, A wide range of things that I want to make sure that I teach her.

I want to teach her all the same stuff I teach my son, too.

Right.

But what I really want to make sure that I highlight is how I love her mom, my wife.

Right.

Because this is how a man should treat you, and this is what, this is what you should expect.

Yeah.

You know how you should expect a man to treat you?

And how I love and how I love her.

I never want her.

I raise my voice at my son in front of her all the time, and then I will intentionally not raise my voice on her.

And I say I.

And I'll tell her.

Why?

Because I don't want another man to ever raise their voice at you.

Boy, I know your wife.

You know what I say?

And then, and then in the same breath, I go, hey, mom's right around the corner, though.

And I'm about to go tell mom.

About to go get that mom about the latest smackdown girl.

I was a girl, too.

I know exactly what you're thinking.

I'm not, I'm not gonna go there.

All right, so I want to talk a little bit about gold before we end this show.

Not to have a hard turn here, but if I go a little longer.

So you're not going to start hugging across the table and it's going to be awkward for everybody.

Gold prices are really what the conversation was that set me down this path this weekend with somebody else.

And I said to them anecdotally, and I'll say exactly what I said to them, I was talking to my wife.

We had three days in a row where we had a babysitter.

It was really weird.

I mean, you won't go from none to three.

It's crazy.

What are you doing?

We literally did not know what to do with ourselves.

So we were walking through South Coast Plaza.

We were having a conversation where we were looking at really expensive, stupid stuff.

And I said, look, you know, gold prices going up means something.

Now, what that means, good, bad or ugly, is up for interpretation.

But to me, I have typically seen gold prices go up in and around recessionary economies.

Not all of them, but for a long time, people always found gold to be a natural and logical hedge against inflation.

Now we know the only true hedge against inflation is to keep investing into whatever it is that you're investing, to dollar cost averaging, if you will.

Because inflation goes up.

Inflation in theory comes down.

But over time, these things all tend to balance themselves out.

But I wanted to go down the path because gold is hitting and still at an all time high over 4, 500 bucks an ounce.

Right?

I think it's 4300.

It's pretty.

Yeah, it's.

Yeah, it's tearing.

So this from Reuters.

Gold climbs on rate cut bets.

Broader uncertainty investors eye US China trade talks.

Gold prices rose by over 2% on Monday, buoyed by expectations of further US interest rate cuts and sustained safe haven demand.

Safe haven demand.

Ironic.

And maybe it is, maybe it's not.

Maybe it's bitcoin these days.

And I don't mean that sarcastically, I mean that bitcoin has seemed to be a similar hedge against inflation.

Now who's right or who's wrong here?

Time will tell.

As investors awaited upcoming US China trade talks and inflation data out of the US this week, spot gold was up 2.3% at to sites point $4,346.39 per ounce as of 1:47pm Eastern Time.

In the US gold futures for December delivery settled at 3.5% higher at $4,359.40 per ounce.

Political and economic concerns are driving prices higher on Friday's sharp sell off, said CPM Group managing partner Jeffrey Christian.

Finally, a normal last name.

Thank the Lord baby Jesus.

Our expectation is that the price is going to rise higher over the next several weeks and several months, and we wouldn't be surprised at a 4,500an ounce soon, he added.

That's where I got the number from, so I wasn't crazy.

The US government shutdown stretched to its 20th day on Monday.

Ah, it wasn't far.

20th day.

20Th day.

I said 30.

You said 10.

No.

What?

Yeah, as you said, it was like.

No.

You said eight weeks, bro.

What are you talking about?

You know, math is not my strongest skill.

I don't know, man.

Yeah, I look at the TV some days, I swear to God, I have, like, deja vu.

You just feel like groundhog.

You're just seeing the expectations of how long it could go.

I think it'll go over 35 days.

That's my, that's my expectation.

And we're about two weeks away from that.

So maybe we rehash this on episode three or six, 308.

The shutdown is also delayed key economic data releases like we know and talk about top of the show, leaving investors and policy makers in data vacuums ahead of the Federal Reserve's policy meeting this week.

Now, I have comments that I added here in the show notes because I want to make sure I hit these.

So I actually did type these out.

Okay.

Gold typically performs well during recessions.

I firmly believe that there are some recessionary economies where it did not perform as well.

But certainly in my mind, it performs better during those times for all the reasons we've already talked about, often increasing in value as safe haven, as assets during times of economic uncertainty.

I would say right now, we are very uncertain about.

So what do you think?

Okay, so what are, what are people doing?

So are they actively selling off some of their securities, like a.

A percentage and going into putting that into gold instead?

Because typically speaking, I mean, what.

What would you say is considered a reasonable amount for someone to put away towards like gold and silver?

Well, I would think that, you know, diversify your portfolio like you would anything else.

If, if you want to go down this.

Precious metals in general, our conversation in rhetoric this week, you're gonna see that all over the news because the US doesn't really have a whole lot of precious metals.

So this is not to be confused with precious metals in this in this capacity.

Okay.

Gold is more of a currency conversation in my mind than it is a precious metal conversation.

Gold prices have been known to sell off just before recession begins, but they typically find solid support during recessions itself.

And many rally as the economy shifts start to recover.

And this is because they typically look at this as a fungible, real, tangible asset they can hold.

It's the same reason that property.

Real estate investors love property.

Yes.

And what you typically see with people in the property community, real estate community, is they never have any stock.

Like, I'm all in on this.

And why they love leverage.

So they keep a low liquidity portfolio position and they buy real estate.

Right.

Every time they get enough liquidity because.

They want their money making more money.

They want their money making more money.

Gold investors typically are not quite like that, but there are people who love gold.

They're in the love gold.

I love gold that are like that all year round, all the time.

That is not the people driving the price up.

In my mind, people driving the price up are the stock market investors.

I was going to say, I was thinking.

I was thinking like foreign countries even, that are no longer.

Maybe they're pulling out of U.S. treasuries.

Yeah.

And.

And dumping into gold.

There's a great website, and I have no idea who runs this, so I should be cautious before I say this.

I don't know what the political affiliation or what the Zeit guy says about this, but what happened in 1971 when we went off the gold standard and some of the things that happened.

We could do an entire show on just what happened when in 1971, when the US went off the gold standard.

And what's transpired from then to now, that has meaningfully shifted.

Yeah, that was under Nixon.

That was under Nixon.

That's right.

Yeah.

I am not a crook.

Yeah, yeah, that guy.

Yeah.

See, I know what I'm doing.

Exactly.

You know, I'm actually surprised at you for a little bit.

I noticed I have started to read more and more like Christopher Walken, the.

Older I get, and I haven't called it out.

You haven't called it out.

Well, I can appreciate Christopher Walken, and.

I don't do it intentionally, by the way.

No.

Yeah, you do.

No, I don't like.

I'll be reading and I'll go, so.

So the US Government shut down.

He's a gem.

It's a gem.

Reasons for gold's positive performance.

Safe Haven asset.

Obviously, during economic downturns, market uncertainty, people flock to stuff that they think that Might be able to help them against the devalue of currency.

This is gold.

Federal Reserve policy.

When this starts to happen, Federal Reserve lowers market rates.

People are like, okay, let's seek alternative investment.

Oh, I know gold.

Okay.

Right.

Yeah.

Investor confidence, gold, history of being stable helps them here.

It's.

It's kind of rode along with the s and P500s in some.

It's outperformed it.

If you look at the s and P500 and you're saying, okay, well, the top 10 of these stocks are carrying the market and, you know, the next 490.

Suck ass.

Yeah.

That's a technical term, by the way.

Essay.

Actually, I should probably like S ass.

Yeah.

Because I don't want to be confused with.

No, no, you can't do that.

You know what?

Just.

It's okay.

Leave it.

Leave it alone.

I'll figure out a better way to.

It's sass.

Yeah, you go, okay, well, I'm going to put my money in something that's going to rise along with the s and P500 or close to it, historically.

Well, that's gold.

Then obviously, portfolio diversification is another one.

Right.

If you're looking at the stock market right now and you're like, ah, it's feeling a little frothy.

I'm feeling like a little, you know, tactile.

I don't know, the market go down, I'm gonna go to something else.

I want to go into real estate.

I'm gonna go into gold.

It's an easy.

It's an easy logical jump.

Another safe bet, maybe.

But to me, the guy who does this podcast with you, I think this signals bubble.

Oh, this signals seasoned stock market investors in foreign countries going, okay, the market's a little frothy here.

Let's take some risk off the table and diversify into something else.

There you go.

We know the real estate markets, a little hyper frothy.

What do you go into?

You go into gold because you're like, you know what?

At least no matter what happens, I got a brick of that shit in my locker.

Yeah, well, a lot of times.

Well, people can buy it and own it and not have the brick.

Yeah, you'll buy it in the stock market.

So historical performance, to your point, outperformance.

Historically, gold has outperformed the s and P500 in most recessions.

So if you're in the stock market and you know that and you're buying it right now, you're saying to yourself, I wonder if I'm in a recession.

Yeah.

Because If I buy now and I drive this price up, it typically outperforms.

And the SB500 is not, not doing too bad right now.

Yeah.

So it goes to tell you that something from an investor mindset and I don't know who, I don't know where, but I know the price is going up.

I know there's a lot of people.

Yep.

It's driving that change with some analysts showing an average rally of about 28% in the six months before and after a recession.

Oh, wow.

Yeah, Let that sink in.

I'm going to repeat that in a moment.

Outperforming the S and P by 37% on average.

So, you know, so, because right now we had, we had, let's see, the last quarter we had negative GDP growth.

Right.

And then you would think that now this is, this is that portion, that six month portion prior to the recession that it could be going up.

And then if we have another quarter of negative GDP growth, what does that signal under the old definition that we're technically in a recession.

Yeah.

Certain members of certain government agencies are playing fafo.

Yeah, yeah, right.

Yeah.

Mess around and find out.

That's, you know, mafo.

Yeah, they are.

And, and I would tell you that having like the, the tariff conversation with China right now, if you were really worried about gdp, you'd be like, nah, I'll, I'll have that next quarter.

Let's gap it out by three months.

Yeah, I'm not saying anything political, I'm just saying.

No, no, no.

I'm just saying like, you know, there doesn't seem to be any concern about that happening.

No, there isn't.

Not right now there isn't.

But then again, I guess the question is, who's gonna put the data out anyway?

That one guy, I mean that one, that one essential employee at the Bureau of Labor Statistics.

There have been exceptions to this rise in gold, however, such as in 1981, in 1990, due to the unique circumstances like the Fed aggressively raising interest rates in 1981 or the global macroeconomic conditions causing the central banks to, to be net sellers of Gold in 1990.

Now banks don't hold in my mind the same amount of gold.

I have to go back and fact check that.

I didn't do it for the show.

I apologize.

So I don't see either one of those scenarios playing out.

We just went through the interest rate increases.

We're now in a cutting cycle and I don't see the bank selling off gold.

At least I think I'm selling off economic losses.

On other assets, sure, but not gold.

So I don't know.

This happens.

Value varies by phase.

Gold prices have been known to sell off just before recessions begin and again with that, six months.

Right.

So here's what typically happens and this is objectively, I'm being general here.

Okay.

Okay.

So nobody go, ah, ah, wait, there's this one event in history.

You're wrong.

If you're that guy.

My email is said at higher standard.

Podcast.Coms a I e D. Yeah.

S A I E D. Yeah.

Typically speaking, leading up and into a recession, people buy gold, they start selling off into the recession and before we get out of the recession and because the sell off prices will eventually again, parabolic curve goes up and starts coming down.

You start coming down as recession starts to, to peak up a little bit because people are arbitraging and bridging assets.

So right now, if we were entering a recession and gold price spiking up would be indicative of me that we are heading into a recession.

And you know, based on the data that I said before and again I said I was going to repeat it.

Here's that repetition with some analysts showing an average rally of 28% in the six months before and after a recession, outperforming the s and P500 by 37% on average.

Wow.

If you are somebody who makes money managing portfolios, whether you're a hedge fund or you're a wealth advisor, institutional money manager, you're going to look at that and you're going to think yourself, if I can make my client an extra 37 in the next year or two by buying gold now I'm going to buy some gold.

Yeah.

100.

If you have any inkling that we're on a recessionary economy, I think I've beaten the hell out of this horse.

But you get my point.

Yeah, yeah.

Now I want to spend a little.

We're a little bit long on the tooth, but I want to spend a little time going over movies.

I think movies are consumer discretionary spending.

Yeah, yeah.

Okay.

Yeah.

I, I just listened to the episode of Schultz on Rogan and they, and they briefly spoke about this because, you know, Schultz is in the new Street Fighter movie.

Oh yeah.

That's why he has a ridiculous hair.

He's got the, he had the ridiculous hair.

And Tyson is going to play ballrock.

I didn't know this, by the way.

Okay, so when Street Fighter originally came out.

Yeah.

It was supposed to be a fighting game position, like basically stealing Mike Tyson's likeness.

Oh, no, that character was.

Yeah, no, that.

No, no, no.

That character was.

And that character was supposed to be originally the final boss, hence why the final boss's name was M. Bison.

Oh, okay.

Yeah.

And then they just switched the name Mike Tyson.

Yeah.

And that guy was supposed to be.

I don't know if his name was supposed to be Balrog, but, yeah, Mike Balrog was supposed to be M. Bison, as in Mike Tyson.

Yeah.

But then.

Yeah, somebody told him to switch it around.

No, I'd heard that.

And there was a whole backstory.

I remember that I read it at one point in time.

Yeah.

The Street Fighter thing.

Just because I grew up and 50.

Is going to be Ballrock.

Yeah.

50s Ballrock.

Yeah.

So I can't wait.

Yeah.

It.

I hate to say it.

That's actually a movie I want to see, and that's actually a really good transition.

I don't think you did on purpose.

But I did this.

I do.

The nostalgia is what's going to take.

People back to the movie theaters, but.

It'S not the nostalgia of.

So I got to be careful of how I.

How I say this, because I want to make sure that articulates.

Well, it's not the nostalgia of your childhood that makes you see it.

It's a fear of missing out that makes you see it.

And this is the psychology that drives people of certain age demographics to movies.

Maybe a little bit of both, though.

If people around you are seeing it because they had this experience in their childhood, you too, want to go see it.

So that first row of people that go, that first, like, blush, that's the nostalgia people.

Yeah.

But if they don't recapture nostalgia and then give people the fear of missing out, bro, you got to see it.

Yeah, yeah.

Then you don't see it then.

Exactly.

And it's done.

And then on top of that, too, I know that the, like, the Dude Perfect guys just came out with the movie.

Yeah.

But I mean, you got to think, right, like, that's another.

Another way to get people back into the movie theaters.

Do you think?

I mean, they're.

They're essentially influencers, right?

Yeah, well, they are influencers.

Not essentially.

They are influencers.

Yeah, yeah, yeah, yeah.

I mean, they do.

They hired.

They hired some guy to be their CEO that used to work for, like, the NBA.

Yeah.

Also hard.

Yeah.

The hardest.

That's the appropriate answer.

Yeah, yeah, yeah.

So anyways.

Yeah, go ahead.

Disney needs one franchise to return after Tron Aries box office failure.

This according to Screen Rant for those you don't know.

I've got a close proximity nexus to Hollywood.

I spent a lot of time around it as a kid.

And in particular, my wife and I, on the first date night, went and saw Tron Aries.

I knew the reviews were good from the consumer, but bad for the general consensus.

And I knew going in and I just said every single movie.

I checked the box office before I go because I want to know how profitable the movie was and what the opening weekend was like.

That's just me being a movie nerd from back in the day.

I still love film.

Still love movies.

Will you go?

Will you watch a movie opening weekend?

Are you about, like.

It depends.

It depends for me.

It's scary.

It's great.

Yeah.

I. I generally will not do that anymore because I don't feel a need to.

Yeah, yeah, yeah.

But I will notably mark a movie and say I'm going to watch that in the theaters.

Tron was one of those movies because I. I was two when the first one came out in 1982.

But I saw that growing up, found it really, really cool.

Tron Legacy that came out, I thought was a really good movie.

And the fact they were pivoting to this version of it, I knew was gonna be an epic failure because they were essentially abandoning and rebooting the franchise with legacy characters.

Okay.

Jeff Bridges wasn't supposed to tell everybody he was in it, but then he leaked on accident and interview, and he's like, oh, damn, man.

And then like, they want to tell everybody he was in it.

Yeah.

But then I'm sure that drew people in to want to go see it too.

Not really, because.

No.

It alienated the rest of the franchise.

Oh, really?

Yeah, unfortunately.

And I understand why.

There's a whole, like.

I read the whole back.

I do this for every single movie I see.

I go.

And I always read the Wikipedia about the production development of the films.

Oh, wow.

So I do this for every movie I see.

It's just my old school habits.

But.

So Tronairs failed kickstarting a new area of Tron for Disney, the studio needs to bring back one of its most successful franchises.

It wants to regain a specific audience.

In August, Variety reported that Disney was searching for a new franchise that would win back Gen Z male audiences as they start to move away from Marvel because the Marvel franchise ran its course with End Game.

You don't have FOMO anymore.

If nobody else around you is seeing it, nobody's emotionally invested.

I get it.

The story continues to move on.

But speaking from someone that got Into Marvel late.

I don't understand how you're.

In my mind, you're not topping endgame.

There's nothing.

There's.

Yeah, there's you.

There's nothing you can do.

And in their defense, the problem for them franchise wise was that's.

That is the way the comic books went.

Yeah, yeah.

So they did follow that arc, but, man, did they have a cataclysmic arc.

Right.

You brought people through like a 10 year emotional journey.

Right, right.

You know, I mean, it was meaningful.

But back to the story.

Indiana Jones failed to attract large enough audiences in animated fare like Disney's Inside Out.

And Zootopia is too kid friendly to appeal to adult male audiences despite the box office draw because they do make a lot of money.

They do make a lot of.

So back to that Schultz and Rogan interview.

So Schultz said he had been talking to a lot of producers and he said Los Angeles and Hollywood doesn't even crack the top 10 of places that they want to even film.

That's right.

Cost too much money.

The tax, too much red tape.

The taxes are insane.

Right.

It's like they'd rather fly to Australia to record over there.

And there's lots of states in the country that have made this very, very convenient for them.

Harrison Ford gets a lot of shit for moving to a ranch with Kalista Flockhart to Wyoming.

Okay.

And people are like, oh, he's not.

Because in Hollywood, you're supposed to mingle with other people of your pedigree in Hollywood and stay connected, even if it's just in a, you know, an associated relationship.

It's not really like a, quote, friendship.

And everybody in Hollywood has this.

They have their people that they stay connected to.

They're not.

They're more colleagues than they are friends.

And they stay like this, like, fake friendship thing and they stay connected, but.

It'S part of the business.

Yeah, it's part of the business.

And Harrison Ford is like you.

So for like the Grammys.

It was the Grammys.

It was Emmys.

They led him to believe that he was going to win.

Win an Emmy.

So him and close to Flockhart flew out for it when they announced the Emmy went to somebody else.

Dirty work, bro.

He dipped him and his wife left.

I mean, rightfully, Rightfully so.

Wouldn't you.

He's like 80.

Yeah, yeah.

I mean, look, put some respect on his name.

Yeah.

Put some respect on my name.

Yeah.

Both of them are very introverted.

Leave Hollywood.

They feel that way.

But.

But I look at it like, okay, yeah, he may Be living in Wyoming.

But most of Hollywood isn't in Hollywood anymore.

No.

So a lot of these celebrities are in Texas, for example.

Right?

Yeah.

I know a lot of people like Danny McBride's in North Carolina.

Him and his whole crew moved out there.

Yeah.

Now, granted, isn't a whole lot of film as of late, but you get the point.

So you got a problem in the movie theaters.

Tron Aries could have been Disney's next big winner with young adult men, but it didn't draw enough interest, grossing only 60.2 million worldwide.

And it's opening weekend.

And for those of you who don't understand the movie business, that's the box office gross.

You still split usually 50% with the movie theater on that.

And then you got to pay everybody else in the marketing budget all the way down the chain.

Right.

So that isn't a lot of profit on 100, 200, $300 million movie.

And I will point out there are brands like A24, which we'll get into later on, which is Brad Pits production company.

Okay.

They do what I would call your lower budget indie films, and they're trying to creep up into the more expensive films.

Think 80 to 100 million.

Okay.

Typically, indies below that, well below that.

And they're taking bigger risks, bigger swings.

And recently one of them was a very big notable.

Miss.

We'll get into that.

According to Hollywood Reporter, Aries badly under indexed among adults age 18 and 24.

One Disney franchise that's a huge hit with young men is Pirates of the Caribbean.

I almost myself when I read that because I couldn't believe it.

But I was also happy because that means Johnny Depp's gonna come back for sure.

Oh, he's coming.

This is just business.

That's it.

You have to.

I mean, how do you.

How would you even bring that back without him?

There's.

Well, I'll tell you how.

There's two films in the works with Jerry Bruckheimer directing, and this is not in the show notes.

One is a reboot.

Right.

All right.

And the other is a Margot Robbie led production.

Oh, and I don't know the scripts on either one of them.

I'm pretty sure they're still in development, but they.

They're gonna have to bring him back into the fold for.

I'm presuming the Margot Robbie version of it because he led the franchise.

Yeah, yeah.

The question is, will he do it?

I don't know.

It's a hefty price tag.

He was pretty upset about it.

So Pirates of The Caribbean.

But there hasn't been any injury that in that franchise since 2017.

If Disney wants to win back Gen z Men After Tron 3 flopped, Pirates would be the best option.

I only say this.

You would, huh?

You'd go back, you'd watch that?

I would only go back if Johnny Depp was in the movie.

There you go.

And it's not because there's like any weird like male, female, never heard conversation.

It's just because he led that franchise.

Yeah.

I was emotionally invested with him as a leader.

And I think the same thing happened with Tron where you got rid of Sam Flynn, the Sun and Olivia Wilde as the, the female love interest in that story.

There was a whole storyline when they left in Tron Legacy that was completely abandoned.

And clearly Tron Aries was built to be a multiple part series with Jared Leto with the helm.

And I would argue Jared Leto's film career as of late has been in classic bomb after classic bomb.

Neither here nor there.

I bring all this up to say consumer discretionary spending is also flashing a warning sign.

People aren't going to the movie theaters because look at that saying out of their watch at home in a streaming service and save the money.

The last time we as a family went out to the movie theaters, it was over 100 bucks.

Yeah, I went with my wife to the movie theater.

Just me and my wife.

Yeah, just popcorn and like alone at the snack bar before we got in the movie theater was like 30 something bucks.

I mean how much we pay the tickets?

It's like 20 something ticket.

That's what I'm saying.

It was like 75, 80 for the two of us to watch a movie.

That's to watch a movie, dog.

That's.

I know, I know.

People like, Chris, you got a black card.

It's not for that.

It's not.

It's for.

That's not what that's for.

No, no, no, no.

I mean $80.

I mean people used to do that like at least like twice a month going to the movies.

Yeah.

Dude.

I remember when I was a kid.

Damn it.

You're that guy.

You're that guy now I'm the guy.

You're the guy.

It was $8.

Yeah.

50 cents.

You can go to matinees.

Remember those?

Oh yeah.

They even still do those anymore?

Yeah, they do.

Okay.

Yeah, I would know.

I don't go to see movies in the middle of the day.

No, we were during the, during the summer when the, the one or two days a week my, my kids would go to my in laws house during the summer.

It was like first showing at, on Tuesday.

It was like two or three bucks.

That's cool.

Yeah.

So then we would buy, we would.

And they, they'd play like older films, stuff that they would, would watch on the.

But okay.

Go to the movie theaters with grandma.

For like that imprints though.

I hope so.

Yeah.

I mean, yeah.

Never know man.

And it's easy for grandma to keep them occupied for like two hours.

You know, it imprinted on me.

We went to Disney World and we watched a movie that had a really weird political spin, but we watched it in Disney World.

My son and I was sitting next to him and just watching him watch the movie.

And I'll remember that, that image, it's burned in my brain.

Oh yeah, yeah.

I'll never, never let it go.

Like the way he looked at the screen was like, oh, I know.

We've been at Disney World all week long.

Yeah, yeah, yeah.

It was cool.

It was nice before he left.

Yeah, that's gonna leave an imprint.

All right, so I have one more movie related example of how I think that the market is pivoting and I don't think consumers are willing to spend money they don't have.

Okay, from Variety.

Why are many of the year's buzziest films failing to make a profit at the box office?

Every Monday morning, Virginia based cinema owner Mark o' Meara pours over grosses to see how the newest releases are playing in his area.

Last week didn't offer much to celebrate as some well received Oscar contenders collapse at the box office.

Asterisk here.

A lot of times Oscar contenders are not your highest producing like income films, right?

No, exactly.

They're meant to be artistic.

However, I would say this class of Oscar contenders is having a real kick in the ding ding as far as like profits go.

Okay.

And these are big names.

Well, that's why, right.

I mean you're paying these, you're paying these guys.

How are they.

So how are their contracts work for these like a list celebrities?

You're gonna take a reduced profit.

But like are they, they getting paid up front?

You're generally not gonna get a back end box office deal on some of this.

Oh, you can in some cases.

What I would say is a lot of them do films like this with studios like this so they can win awards, so they can make more one year win more recognition.

A classic example, this one we're talking about first A24 is the smashing Machine.

It's the Rock.

Dwayne Johnson, a sports biopic starring Dwayne D.J.

as an MMA farter.

Mike Kerr.

Mark Kerr died pretty quickly, Omera reports.

Meanwhile, nobody did really well with Roofman, a drama featuring Channing Tatum.

It's as I wanted to see that.

I really want to.

I really want to see it.

But like.

But doesn't spark my interest to go to the theater.

Okay, let's unpack that.

Why didn't you want to go?

Because I know I can see it at home and I hate that.

And it.

You didn't want to spend the money?

I didn't want to spend.

No.

Honestly, that.

That plays a huge part in it.

And I'd also be willing to add.

I bet you nobody else around you went and saw and told you was great.

And also.

Okay, I don't.

I'm fortunate enough to where I don't have to pay for a babysitter.

Right.

But the few times that I do get my in laws or somebody to watch my kids, I'm not going to waste it on.

What is it?

Roofman.

And that.

That my babysitter over this weekend.

See what I'm saying?

That was 150 bucks minimum.

Each time.

Like it's better be worth it.

That was 500 bucks this weekend just to be alone.

My wife.

Yeah.

In a public place, dressed fully.

That doesn't make any sense.

Yeah, it's not really cashing out the way I thought it was gonna cash out.

Do we get bathing suits at least?

I mean, Damn.

Yeah.

So D.C. metro area wasn't the only place where those films failed to connect.

Roofman debuted at a paltry $8 million while Smashing Machine endured a BR a 70 decline in its sophomore outing its second weekend bringing revenues to $18.8 million.

As for other films aimed at adults, Kiss of the Spider Woman, a 34 million dollar budgeted musical adaptation with Jennifer Lopez, fizzled out with 850, 000.

That's what you get for doing Ben Affleck.

Like, that's what you get.

That's what you get.

Nobody does Batman like that.

I think I saw a meme where it said over the.

Over the course of a certain number of years, Jennifer Lopez has more rings in LeBron.

I'm not doing this.

Nope.

Not going.

There had to be said, people.

It had to be said.

Even Paul Thomas Anderson's.

One battle after another.

Led by Leonardo DiCaprio.

The man the myth legend himself struggled to break but break out.

Despite being held as a generational masterpiece.

They were literally calling this the most amazing film of Leonardo DiCaprio's career.

And I'm like, huh?

The most amazing film, Leonardo DiCaprio's career that nobody saw.

Yeah, that's weird.

That's a little weird.

I didn't know he's in it.

They're really trying to pimp it out.

I mean, they were pimping hard.

They're like, it's.

It's Leo.

You need this, Saeed.

Yeah, you need this.

And everyone's like, nah, nah.

So let me paraphrase here.

If there, if there is one, a list celebrity that could probably try to get me to come out and see a movie, it would be Leo.

You ever seen the movie?

Don't look up.

They streamed on Netflix with Leonardo DiCaprio and damn it, J. J was big, got skinny.

Was big, got skinny.

Jonah Hill.

Okay, that could have been bad.

Save the day.

All right.

Description was not wrong.

Technically speaking, it was not wrong.

Let me paraphrase.

We're getting along the to the show here.

Regional banks are under pressure.

Real estate is quietly contracting gold is flashing fear.

Hollywood has a very broke negative consumer discretionary spending.

If you read between the lines.

And the Fed is playing defense with the rate cut coming up.

What else could there be?

What could there be, Chris?

Okay, these are not separate stories.

I know they sound like that.

That's the whole point of this show.

They are symptoms of some disease.

The illusion of stability being ignored when the cracks are coming up around you.

And there's still stuff in the CRE office space that are.

That is concerning.

Right.

Office has never recovered.

Post pandemic, we've already spoken about private equity.

Episode 304 titled the brutal honest truth about an AI bubble.

How private Equity will destroy the market.

Thank you very much for that working title, Chris.

You're welcome.

Yeah, you crushed that.

There's obviously the private credit credit market in shadow banking, which we can talk about on a future episode.

There's an entire.

Like we talked about the top of this show, there's an entire market of people making private loans in private credit issuance that underwrite however the hell they want to, which has got a massive bubble and a problem there as well.

Yeah, how do you get comfortable with that?

I mean, what are they taking as collateral?

Well, I'm glad you asked.

It is the fastest growing market in the past five years.

It's now showing its first sign of cracks.

We can get into a future show.

Some private credit funds are marking loans down quietly, especially those tied to CRE and leverage buyouts.

Think about this.

If a bank would not finance it, they went to private credit groups, which.

Is charging a wild interest rate.

And you did that taking on risk while that risk is coming due.

It's ringing the bell.

Yeah, it's a problem.

The refinancing wall in 2026 through 2027 is looming and many loans will need new capital that's now twice as expensive, which is what we talked about at top of the show with refinancing.

And if you need new capital, it's twice as expensive.

Expect there to be financial implications to the system.

Not maybe not speculative.

There will be.

It's happening.

That's going to happen.

And from my personal experience, the first wave was 2025 was moderate.

It was more than double the 2025 volume in 2026 and almost triple that in 2027.

So there's a.

There's a lot going on that's out there.

There's a ton that we can unpack in in future shows.

But suffice it to say, there are weakness signs in the economy, Weaknesses all around us that we choose just to take as merely tidbits of information, but we don't put them all together.

That was the aim of the show.

And what can people do to best prepare?

Well, don't go see bad movies.

That's.

That's good for your psyche.

All right.

The best thing you can do, best prepare.

Prepare now by being smart financially.

Try to lower your expenses to the extent that you can.

If you have any superfluous spending that you do not need to do, discretionary spending, I would say pull back and start using that money to go into investments.

If gold happens to be one of your preferred vehicles, there's plenty of ways to do that.

I think you could continue to dollar cost average through your traditional investments index, lower cost index funds.

We've talked about stock that you may believe in, but no, any stock you buy right now is probably at an all time high.

I bought Apple years and years and years ago.

I've stayed through multiple splits now.

I think two splits at this point in time.

They're at an all time high today.

Would I buy more Apple today?

No.

Do I believe in stock?

100%.

It's just really expensive today.

IPhone 17 was kind of a win for them.

But you buy companies that you believe in today for the value you'll see tomorrow.

If you're gonna buy companies individually, if you're gonna go into index funds, go into a low cost index fund like Voo Vio.

There's a number of them from Vanguard.

Fidelity has their own.

Look at those expenses index 500 fund and you ride it through, Are you going to see some impacts to yourself and your 401k in the coming months and year?

Probably, yeah.

And what I tell most people, and I had somebody call me over the weekend and asked me this question, they said, chris, I'm worried about the stock market.

I'm worried about my.

My 401k.

What am I going to do?

And my first question will, how old you.

I'm here.

She says, I'm 50.

I said, okay, great.

How much longer you think you're gonna work?

Oh, at least I'm 65.

I said, you got 15 years.

She goes, yeah, yeah.

I go back then I think you should ride this out and you should not look at it.

And you should continue to invest the same cadence and volume.

Cashing out now may be good near term, but maybe painful long term.

What are you going to cash out and do with it?

Yeah, I'm going to hold cash.

I don't think that's a good idea.

No.

So I think you just re ride this out.

And I know it says, hey, inaction is.

No, no, no.

I'm not saying the inaction is not smart.

I said, if you're worried about your.

Your 401k, I'm telling you, I'm worried about your daily spending habits now.

Now that's what you focus.

Yeah, that's what you focus on right now.

And I still think that there's still a little bit more upside to go between now and whatever happens.

Oh, for sure.

Yeah.

You know, the rate cuts are definitely going to help that.

They're going to help the growth stocks near term.

Yeah, near term.

Near term.

So, yeah, So, I mean, and hopefully that only, like, narrows down.

You know, it coming down.

Yeah.

So regil.

Take us out.

Take us out, bro.

Cut to rejoin.

All right.

We miss you, bro.

Can't wait to have you back on the next one.

All right.

You got anything else?

No, I think.

I think I talked way too much tonight.

No, you crushed it, bro.

The liquid death really got you going with death.

Yeah, a big 20 ounce.

Yeah, the 20 ounce.

My cans look small.

Yeah, petite cans.

I appreciate you.

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Good night, everybody.

Okay, bye.