Yeah.

Oh, yeah.

Well, it's the end of 2024.

Oh, buddy.

It's.

If you could recap 20, 2024.

20, 2024.

You want to keep saying it wrong?

Or if you could recap 2024, how would you describe it?

How would I describe it?

Wow.

How would you describe it?

Pensive.

Oh, SAT vocabulary.

Yeah.

Had to come out swinging with the SAT vocabulary.

2024, for me, was a year where we started off the year, and the greater portion of it, we were just in this holding pattern waiting for the Fed to make a move.

I don't think the data ever got to where we felt comfortable enough with the moves, where we felt really strong that the data said, hey, it's time to cut, but we needed to, because there were other economic outliers.

And then at the same time, when they did start cutting rates, the markets were not normally reactive.

They didn't really know what to make of it.

Yeah, they.

There was a little bit of euphoria, a little bit of, you know, temporary market high.

And then the treasuries went the other way, and the market didn't really respond the way that I think most people tried traditionally thought it would.

And it just made everybody uncomfortable, nervous, anxious, hence pensive.

And we're going to get into all that on today's episode.

But first, welcome back to the number one financial literacy podcast in the world.

Sitting next to me on my left is my partner in crime, the one and only Chris Nahibi.

Sitting next to me on my right, the one and only Saeed Omar.

My partner in time.

Thank you, my man.

And sitting behind the ones and twos is a computer and AI Cutter.

AI Cutter.

Yeah, the cutter.

The AI.

Oh, yeah, you can tell.

I say you'd use that technology a lot, Otter.

Yeah, it's our AI replacement of a rune.

This one doesn't speak, doesn't actually ask us for anything.

Breathe into hot mics.

Yeah, he did that.

Dude, just between you and me, just.

Yeah, no one's listening.

Circle of trust.

There is.

I have a throat clearing issue.

So I'm not.

I'm not the pot calling the kettle big, kettle black.

Okay, okay.

I'm just saying he has some breathing issues, man.

Like, every episode I would listen to, because that's what I do, for those of you who don't know, is I mix and master the audio, and then I go over the video component and I try to layer in the audio as cleanly as possible into the video component.

I know it can be confusing, and when you look at us.

You think our voices are naturally this sexy.

But there is a little bit of mixing and mastering.

Yeah, I mean, I don't normally sound like a Spanish broadcast announcer.

Hola, gracias.

Yeah, it's but that being said, he, I, I, I've spent probably on average each episode 30 to 40 minutes just clearing out his coughing and throat clearing.

Wow.

I mean it is, it is, it is bad.

Then you throw in some of the episodes where he eats and I'm just like this guy, bro.

I just can't, I can' I can't do it.

Like all that background noise is there.

I mean, that's how much love we have for him.

That even with all that.

Yeah, part of me, it would have been easier if I just used like the, the mix.

So for, again, those of you don't listen to the show, all the stuff that you hear now is generally recorded in a single track without all that background noise.

But I go in and I mix and master Run's audio and I mix and master Saeed's audio.

Mix and master my audio separately.

So when we smush them all together.

Smush?

Yeah.

You get.

Yeah, like the smush room.

Sexy.

Yeah.

Do you do it in the smush room?

Yeah.

I mean, do you, do you don't.

You don't, you don't, you don't strike me as a Jersey Shore kind of guy.

Oh, I did watch the very first season of Jersey Shore.

So you want you committed to the whole season.

That's impressive.

Very first.

I thought you would watch the first episode like, oh, this trash tv.

No, no, I never watched it like linear.

Like I watched like an episode because like, you know, those were so stigmatized with overdramatic.

They just sucked you in from the, from the very beginning.

Oh, yeah, well, I've seen, I've heard executive producers talk about that show and like they would intentionally do stuff that they knew would irritate, you know, the people in the house to, to cause more drama, to cause more friction, like make them sleep in the same room as somebody else on a twin size bed.

Right.

Like, no one's comfortable on the twin size bed like that.

I mean, look, the same strategy is being deployed by the FOMC and Jerome Powell right now.

Right?

Oh, I like the correlation.

Yeah.

I mean, it's basically Jersey Shore out there.

Who's Pauly D?

Come on now.

Come on.

You know DJ Pauly D, the one that speaks for the group?

He does speak for the group, which is interesting.

Like when he speaks, it's like all Right.

Everybody listen.

Yeah, yeah, I know all their names anymore.

Oh, I got.

I got them.

Is he really?

It was so polarizing.

Oh, j.

Wow.

Oh, yeah, I remember her, Snooki.

They all look like the same now.

They all have the same show still going on.

What?

Oh, yeah.

Re upped.

Stop that.

Swear to God.

Really?

Oh, yeah.

I don't watch it, but yeah, allegedly.

Allegedly.

Allegedly.

Never went to Diddy's house either.

Well, I know you didn't get invited to that because there's only one way you'd wind up.

Yeah, exactly.

So.

But if you're listening to this episode on Apple or Spotify, Nice little segue game.

Please leave us.

An honest five star review does allow for the show.

We'll read it right here on this episode.

Or if you're watching us over on YouTube, please make sure you hit that, like button.

Subscribe.

Ring that notification bell.

Do all the moist goody good stuff.

We've been getting a lot of good comments and a lot of good reviews.

I got one the other day that I literally shared with my wife.

Right away, I was like, this has been one of my favorite ones.

Really?

Yeah.

I literally sat there for a couple of minutes after.

After I read it, and I was like, I appreciated this person taking the time to send this message and I wanted to read it on the show.

You've been doing a lot of coughing lately.

Okay.

I think it's something.

There's like, we gotta.

Why do you always play in the studio?

We gotta get the air filtration system in here.

I don't cough like this all day.

I don't have that issue.

So this from our guy, Ross Smith.

Oh, I like Ross.

Long time listener of the show.

Plus one for the name.

I like the name Ross.

Great name.

Because it harkens back to friends.

Or because you also have three first names.

Both.

Good job.

Yeah.

I have already maxed out ratings and reviews for y'all under the various platforms.

This is why he's one of my favorites.

He's maximum on all the black.

He really has.

Yeah, yeah, he has.

And feel free to share this on the podcast if you want.

Thank you, Ross.

Yeah, done.

But the value of the information you share cannot be measured.

Knowledge needs to be teachable.

And this is where you and Chris shine and others fall short.

You help people to understand, not just steamroll with them with the data and concepts.

Something you said in this episode really resonated with me about financial habits forming by the age of seven.

That was that study out of Purdue.

You all inspired Me to write My Little Nieces and Nephews, a series of children's books centered on financial literacy, hoping to help them get a head start.

I just wanted to say thanks again for.

For all the edutainment you both provide.

Keep it up and I'll keep listening regardless of the algorithm trying to hide you.

And, Ross, if you're selling those books or you have them on Amazon, send us a link.

We'll.

We'll definitely pick a couple of.

Up for our kids, too.

110%.

Yeah, I'll put it right here on the shelf, bro.

On my side.

On your side of the shelf.

Yeah.

He can.

He said that to me.

He did send it to you, and he did follow me before you.

I feel like he chose the side.

Well, it's extra special because Top of the show say he doesn't normally go into reviews, so it means that he was thinking about you in a very intimate and sexual way or he liked the review.

If I had a plus one to a certain white party, you'd be invited.

Yeah, well, there goes.

There goes advertising for that show.

I don't think you can say white party anymore on the Google's algorithm anymore.

You can't say that.

No, no, it wasn't even.

They didn't call it.

They called the All White party.

Are you dying?

I think so.

I think this is it for me, bro.

This is.

I've reached my peak, and now 2025 is all downhill, like a lot of things.

All right, so when the show comes out, if Saeed is still alive, it is New Year's Eve.

Please drink responsibly.

And if you are listening to the show, you are a nerd.

I love you for.

This is not what you should be doing on.

Oh, we had that other listener too, that reached out to us and said that I elected to listen to your guys episode before my final as a way to relax.

Oh, yeah, that was a good one.

That was a good one.

I was like, damn, plus one for you.

Way to relax.

Yeah.

He's talking about my voice, not yours.

Clearly.

You cause a lot of anxiety.

I do?

Yeah.

Dude, I'm the Vix.

Every time I talk to you, there's always a reference to your hands in a length, in a way that's really strange.

Yeah.

Yeah.

I mean, ever since the whole hand gestures in the last show.

Yeah.

I can't look at your fingers the same.

They're fuzzy.

They're referencing things.

Yeah, like the fuzzy three pointer fuzzy time.

It's just.

It's.

It's fuzzy.

Time, baby.

Is that how you and your wife have like a secret signal?

Hey, baby, baby, look at my knuckles.

Look what I'm pointing at.

Let's go, baby.

You know what time it is?

The good news is if you ever got lost somewhere, if you did, like, what did I show?

Lost and afraid or naked and afraid or something?

Naked and afraid, bro.

So you go out, you'd be able to survive by creating fires with static electricity from knuckles.

Can we have a rub your knuckles again?

Hold on, hold on.

It's end of the year.

We can have a little bit of fun.

Let's have.

Let's just be honest with each other.

If.

If you and I ended up on that show naked and afraid, I'd be.

Looking at you, Johnson, the entire time.

Obviously, I'd be staring at it.

Made you awkward.

Every time you talk to me, I wouldn't look at you in the eyes.

I'd be like, just looking at Johnson.

Yeah.

All right.

So listen.

I just stare at it.

So I'm just staring.

So that's it.

Hold on.

I'm gonna burn it in the back of my mind.

Hold on.

I know.

So you can describe it so I.

Can tell everybody how many times I saw it.

It's got a dimple right there.

Dimple?

Yeah.

Hell yeah.

I got dimples, bro.

All that surrounding fat.

So listen.

So listen, I'm definitely lasting longer than you on Naked and Afraid, right?

Yes.

Obviously you have no survival skill.

Like, I got all.

I got all that, bro.

You got.

Hold on.

You know what, bro?

I will admit that I would fall apart, but not for that reason.

Come on.

The problem is Boy Scouts, bro.

You were the boy Scouts.

No, but I know that makes a.

Lot of sense now.

I get it.

So, yeah, I.

I've always wanted wilderness skills and I consider myself to be a mildly intelligent person.

Yeah.

But I would die in a matter of 24 hours.

I would die.

Let me tell you.

Let me tell you how this goes.

It goes for me, okay?

I'm on trt.

That testosterone I'm.

I'm regressing back into.

Into my non masculine habits.

I would.

I would be so lost.

I wouldn't.

I'd be like, what's the first thing you do?

Do I.

I still have sunlight.

Do I go look for my food for later tonight or do I go build my tent where I'm going to sleep tonight?

You're already getting that deep into it?

Yeah, I'm thinking about how to get my peptides in my cold plunge.

It's out the window, bro.

And the sad part is, if you want to go to my.

I don't go on Tik Tok anymore, and I probably won't be around for much longer anyway.

Yeah.

But if you were to go to it, it's all these, like, wilderness survival shows.

This one guy, he looks like a total nerd.

That, that his.

He has, like, all these wonderful survival things.

He goes up to Alaska, and it's crazy stuff.

It's.

It's.

It's mentally intriguing to me.

Like, I dig it.

Yeah, it's really cool.

I don't think I would ever want to do it, though.

The dude Perfect guys, they.

They made a video.

And my, My kids are, by the way, are obsessed with, with this.

With these guys.

They're.

They're pretty amazing.

Are they?

Yeah, they're cool.

Why are they so amazing?

They, They've grown to such a point where they've now reached a new level to where they can do all these.

They.

They created.

They did this episode where they basically played Clue.

Oh, yeah, yeah.

Themselves in a house.

You saw that one?

I thought it was really, really interesting.

I was like, damn, it's fun stuff.

I will give them that.

It's pretty cool.

And it's clean.

You know, you could trust your kid watching it and not have to worry.

About anything that's like this podcast.

Yikes.

Yeah.

Yeah, seriously.

But, like, if you, if you listen to this episode with your kid, I, I respect you that much more.

There are some people who do.

I know.

And I always feel bad whenever I make references to your genitalia afterward.

Just saying, like, you know, it's probably not appropriate for the kids.

Yeah.

But they gotta understand that it could, it could be done in a very tasteful way.

That's inappropriate.

That's not, that's not.

Nope.

Come on.

Hey, guys.

Last show.

This is the last show, baby.

We're going out with a bang.

2024, son.

Oh, God.

This is.

I said my veins.

This is gonna get played.

This is gonna get played in court.

I don't miss.

I don't miss with the opportunity's there.

I dunk that.

Come on.

I swear to God.

We got a show for everybody.

We, we have, we have.

Hold on.

We have.

We got to start over, dude.

It's too bad.

No, no, we can't, we can't.

I'm crying.

All right.

I, I, I don't know how to pivot from that.

You're a terrible human being.

We have a structure.

Straight to hell.

All right, so it's the end of the year.

And despite the fact that we don't haven't talked about a single thing financially so far on the show, we are going to talk about the year in review.

And I swear to God it's gonna be serious at this point.

It's been a long week.

So we decided to divide.

Divide up the year in review into quarters because as you know from the show, most financial information is parsed out to you in quarterly doses.

You get some stuff in between, obviously, weekly reports on businesses and companies and some data points.

What?

Why are you laughing still?

We're gonna give, say, five minutes on his own.

You're in time out.

Yeah.

Take a break.

So we're going to talk specifically in each quarter of 2024 about the stock market, the real estate market, the Federal Reserve actions, and unfortunately, whether we like it or not, the political implications that have all brought this stuff together and coalesced because there has been some politics involved in the financial market this year more than any other year, I think that, that we've done the show.

So let's go quarter by quarter into those four headline topics and talk about the changes that we've seen.

Say, you breathing okay over there?

Yeah.

We're back, baby.

We're back.

Starting off with Q1 of 2024, the year kicks off with uncertainty, hence the pensive comment to start the show.

The stock market volatility started off as just as much as we ended the year the previous year, 2023, and we walked into 2024 the same.

The year started with the market uncertainty as investors debated the Fed's next moves.

Are they going to cut rates?

Were they?

We didn't know.

Wound up being quite a bit of time before they did.

The S P 500 of the Nasdaq showed moderate gains as AI and tech stocks continued to shine.

Everybody in their mother in Q1 of 2024 to start the year was talking about how AI is going to change lives.

And I gotta be honest, it's been beneficial.

I've been able to use it and improve my workload a little bit.

But has it revolutionized anything like tangibly yet?

I don't think so.

Okay.

We've obviously seen some mass improvements this year in AI from ChatGPT being very, very much in the headlines to the current version of 4.0, as well as their now video generating model, which I've played with.

So we've seen some pretty palpable growth in the AI space and some of the things that we know from a capability standpoint that it can do, but has it been earth shattering to the markets.

Has it justified all the stock price rises?

That remains to be seen.

Even at the end of the year, we had a January rally in Q1 of 2024.

There was an early optimism that led to a January effect rally, if you will.

But fears of inflation persisting for longer, the higher for longer rhetoric kept markets in check.

So we were so hyper concerned that the Fed would not be able to cut rates because inflation had not responded anywhere near down to the 2% target, that everybody was going, oh my God, we don't know what's going to happen next.

When, when, when are they going to cut rates?

Yeah, and the Fed was really trying to control the narrative, right.

They were trying to minimize the amount of optimism that was still around in the market.

So they were really coming out the gate swinging like we're going to hold rates higher for longer.

Remember that was the phrase that they were utilizing for a long time just to, you know, steer people in the right direction, that you need to stop being so optimistic.

And that there we saw behavioral economics really start to play a role here where people were, were choosing how they were going to impact the market instead of the market impacting them.

Okay.

There was a different perception, and I think if you look at Robert Schiller's emotional kind of band of where people's emotions naturally fall into.

There was a longer pattern of denial I think in the markets of what this all really meant to most consumers.

But it wasn't just the stock market, it was also the real estate market.

High mortgage rates were a big problem to start off the year.

In Q1 of 2024, 30 year mortgage rates remained above 6.5%.

That's where we started the year, above 6.5%, stalling home sales and prices out for first time buyers.

And that largely did not improve throughout the entire year.

We started off with first time homebuyers having a problem.

We ended off with first time homebuyers having a bigger problem because home prices did not go down on average across the country this year.

They went up.

So now home price unaffordability, end of the year, even worse than when we started it.

Low inventory was the talk of the town.

Excuse me, everybody in the real estate market, realtors, everybody, from an economist standpoint, they were really siding.

Housing supply was tight, keeping the prices elevated despite lower transactional volume.

So we saw transactional volumes creeping up, creeping down, but home prices creeping up.

And everybody was like, okay, well there's just not enough supply to meet the demand.

I Don't know about you, but certainly towards the end of the year, that rhetoric tapered off a great deal.

And then really, the supply side argument is almost like a background kind of noise, a little thing off the distance.

Yeah.

But it's not anywhere near as front and center of the argument for housing as when we started the year.

Absolutely.

You okay over there?

Yeah, I'm great.

We're back, baby.

You're back.

Yeah, in line.

That's pretty funny.

Yeah.

All right.

Federal reserve.

Well, in Q1, the Federal Reserve was all about two things.

A rate pause and inflation data.

So the Federal Reserve held rates steady after ending 2023 at a target range of 4.5 to 4.75%, signaling a cautious approach to cutting rates.

Inflation data, of course, was mixed.

There was mixed signals on inflation.

Core CPI remained steadily sticky and services inflation stayed high.

So there wasn't dramatic improvements in what the Fed was targeting to change.

Certainly we'd come down from 9.1% peak, but you had this really, really sticky CPI inflation print, and you had services inflation exceedingly above where it should have been otherwise.

And the flood was the flood.

The Fed was just perplexed at why this was happening.

So they stuck to the higher for longer narrative.

Higher.

Exactly.

And they had not.

At that point in time.

We had.

We were not sure whether they were done cutting rates or not.

Right.

So that was the.

The.

Done raising rates.

Yeah, done raising rates.

I'm sorry, done raising rates.

And that was, that was the talk that everyone, the thing that everyone kept talking about.

And there was real concern with, you know, how, how is this going to turn out?

Because there was a multiple phase approach to this.

Right.

The first phase to this was the raising of the rates to try to tame inflation.

The second phase of it was going to be, when is the Fed going to begin to admit that we're done raising and we're just going to pause and we're just going to hold here for a while.

And we were all waiting because we knew that that third phase of actually cutting rates, which we'll get into later in the show, which we've recently started experimenting or experiencing in September, that you fumble the bag.

Hold on, let me get it back, let me get it back.

And so we were still wondering, how much longer are we going to be in phase one or phase two?

Are we in phase two or are we in phase one?

And of course, in the political side of things, there was the old early warning signs of potential debt ceiling.

Oh, my God, the debt ceiling.

The standoff set the stage for political wrangling later in the year.

But it was all throughout the first quarter.

What are we going to do?

We hit the debt ceiling.

We're going to raise it.

That's what we're going to do.

And that's, in fact, what they did.

Yep.

The government raised the debt ceiling.

And that's where you started the beginning of the election noise.

Everybody started turning their perspective politically towards the November 5 election.

So what happened?

Presidential primaries began to heat up, adding to the market uncertainty.

And you also had Biden and his administration essentially foregoing a lot of the primary stuff and trying to push Kamala Harris in ultimately towards the end of the year.

But at that point in time, we didn't know that.

And Biden was insistent that he was gonna run.

And you weren't even so sure about Trump's position, given his own legal issues and history there at that point in time.

That's true.

It was still a very unclear beginning to the year, and nobody really knew who was going to be in power and who the leading candidates would even be at that point in time.

So there was a lot of speculation.

And then Q2 hit and things started to change.

But stay the same.

You ready for Q2?

Yeah, let's.

Hit me with it.

Hit me with your best shot.

Don't do this.

You can't keep throwing this out there.

You're making this.

You're making this too easy.

That I feel compelled at the end of the year.

We gotta have a little bit of fun, man.

We should be drinking.

Yeah, we should be.

I had a mocktail the other night.

I felt really strange ordering it.

You know why you felt strange?

Yeah, I can't even say it on the show.

I felt strange.

It was a.

It was strange is a very interesting way of putting it.

It's very zesty.

Yes, it was.

Yeah, it was very zesty.

But, you know, it was a good drink.

It was a Negroni.

I don't know what that is.

Negroni, Italian cocktail.

Very good.

Oh, what.

What is it?

No alcohol on it, though.

No, I get.

But okay.

What is the Italian cocktail?

Was it have vodka?

What is it supposed to have?

Oh, you know, I don't know.

I want to say it has.

Have you ordered one as a cocktail before?

Yeah.

I can't remember what the main alcohol is in it.

You know, I've gotten so distant from drinking alcohol, I've forgotten a lot of the stuff.

So my.

My go to cocktail of choice lately is Mexican Mule.

How long have you been having.

When do you have cocktails all the time.

You really?

Oh, yeah.

How often is all the time?

Once a month.

Negroni is a cocktail that is made with equal parts gin, Campari and sweet vermouth.

So this one just had no alcohol in it, but yeah, it was great music.

Pretty good.

Yeah.

All right.

Good.

Wasn't bad.

I actually ordered it because I thought it was a beer, a non alcoholic beer.

And then it wasn't.

Okay.

And then I was like, well, this kind of feels normal.

Good for you.

Yeah.

When was the last time you had this mule?

When was the last time I had this meal?

Oh, when Odun had that engagement party for his cousin at his house.

How many did you have?

Two.

How'd you feel?

Great.

Rockstar.

Next day, normal.

He only had two.

What do you mean?

I don't.

Dude, I have one on, like the next day, I'm like, hey, no.

Really?

Oh, yeah.

Wow.

Good.

Tolerance levels down.

When you get over 40.

It hits you.

Yeah, it hits a little different.

Yeah, yeah.

No, no, I.

I mean, I barely even felt it.

Yeah.

It's too easy.

Yeah.

Not taking that.

So to start off, Q2, 20, 24, well, markets in real estate begin to shift a little bit.

Not a lot.

Okay, a little bit.

In which way?

Well, in the stock market in particular, tech and AI dominate again.

Tech stocks, driven by AI innovation, once again lifted the nasdaq while the broader markets faced headwinds.

You started to see a real disparity between the Magnificent Seven and the rest of the market.

And you started to see the real implications of AI, and people started to go, oh, my God, is this a tech bubble?

Are we in another 2001 type scenario where all of this alleged benefit is never going to be realized and is the market going to take a hit as a result of it?

And I would say that largely it did not throughout the year.

But we didn't know at the time if that was the case because there has been a lot of earnings calls and a lot of people talking about AI and the implications of its institution improving efficiency and doing all these things that we have not still yet seen.

And it wound up being just like any other new industry.

Is that industry overvalued or is it undervalued, or is it valued correctly?

And unfortunately, the way you value this particular industry isn't through like a speculative new business type, like Uber when it launched, or Airbnb when it launched.

You value it by the implications to several of these companies that are making the underlying technology for it, like Nvidia.

Okay.

Or that are going to get a huge boost from the usage.

So, you know, like Google.

So those companies who were going to deploy it at a faster case than anybody else and working on their own technologies, they blew up.

And the Mag 7 really lifted the market up entirely.

Cutting out the Mag 7.

Even at this time, you could see that the rest of the market was not performing anywhere near as well as they should.

And otherwise healthy market would suggest that this was a market that was only benefiting one very narrowly tailored sector.

Yeah, exactly.

Those.

Those seven companies were really propping up the entire market.

I believe we actually ran some statistics back then where when we.

You actually removed those seven tech giants that they were barely seeing any gains.

The remainder, 493 companies.

Yeah.

And you know, earnings season wasn't terrible.

During Q2, you started to see corporate earnings showing resilience.

They were still, you know, making money, but there was definitely, definitely some margin compression as the higher input costs, the cost for these companies to manufacture their products, provide their services, started to increase.

Inflation started to have lagging impacts to how much it was costing businesses.

So what did business do?

They started to raise prices to offset during Q2, which then kind of in turn feeds back into inflation.

And part of the reason you had service costs that were so high in the previous quarter, people were trying to offset their cost of producing whatever it is they produced.

Meanwhile, in the real estate market, slight rate relief came.

Mortgage rates dipped briefly below 6.5%.

And every single real estate agent on the interwebs was like, hallelujah, Subway.

We're going, we're heading the right direction.

It's going back down.

It's going to be a refi boom.

Yeah.

And then it wasn't.

And then it wasn't.

And then it wasn't.

It was kind of anticlimactic.

There was a temporary uptick though, in refinancing and home purchases, which was great.

But it wasn't this tidal wave of activity that everybody thought was going to happen because there was a lock in effect.

So many mortgages were below 4%, below even 3% in some cases that it doesn't make economic sense for a lot of people to refinance even when rates dip below 6.5.

I think, I think the stat was 85% of homeowners that had a mortgage had a rate below 6%.

Yeah.

And then I heard recently a stat that was interesting.

I was talking to somebody from a very affluent neighborhood in Detroit and they were telling me that people who had mortgages, because it was an older community were very rare in the community.

Most people do not have mortgages, which is the first time I realized that statistic that we heard mid year, about 40% of people across the country having no mortgage in their property.

Right.

Was a real factor.

We live in Southern California, and in typically places with high land values, you're going to have less people who own their property in total in cash, versus, like, the Midwest or some other, you know, kind of more Midwestern region.

Focus.

You're going to see a lot more home zone.

Detroit is such an interesting city.

Yeah, great city.

When's the last time you've been out there?

It's been a long time.

It's been a long time.

Yeah.

I was out there, I'd say maybe like six years ago.

So, you know, quite some time ago, we were visiting a friend, and he was kind of giving.

Giving us the rundown of how the city operated and worked.

Right.

And he lived on a street where all the homes were occupied, and they were very well taken care of.

One street over, though, it changes.

Literally one street over, you have, you know, what they call trap houses.

Yeah, yeah.

And I'm like, man, how could you feel so comfortable living just one block away from that?

You know, it's.

It was.

It was polarizing.

And those.

Those houses had, like, the copper wire stripped out of them.

People were selling the copper wire and, you know, everything.

Yeah, it was pretty crazy.

But, yeah, you know, Detroit's had a big surgeon come back, though, so they're starting to come back really, really big.

I hope so.

Yeah.

A great city.

Commercial Real estate at the same time Q2 of 2024.

Well, they started to have some pretty notable challenges with office space vacancies surging, particularly as remote.

Remote work trends continue to persist long past where I think a lot of employers thought they would, and certainly short of where a lot of employees thought they would.

Right.

So a lot of that, hey, we're going to bring people back to work rhetoric really started in Q2.

Okay.

And there were some employees who were like, screw this.

The unemployment rate is below 4%.

I'm just gonna find another job.

Let's be working remote.

Yeah.

And then a lot of the rhetoric that we were hearing about that.

That period of time also involved people working two jobs, two remote jobs full time.

Yes.

And it became very, very difficult for companies who were not set up to try to recognize that behavior, to try to find it, because there were even tools being sold on Amazon and stories on TikTok showing people how to do it, and people got Very good at scheduling two jobs.

So given what you've seen, where you've seen us come from, from, you know, from the, the pandemic era.

Right.

To where now we're at this point in time in Q2, where the rhetoric of bringing everybody back to the office slowly but surely.

Right.

There's more hybrid.

Right.

And to where we are now.

You know, how do you see this playing out long term?

Do you see a full resurgence of everybody back in the office full time again down the road for the majority of people?

Because there is, I know we've talked about on this show, there's, there is a huge element to, you know, collaboration, work together as a team to get work done.

But you gotta think just as far as innovation goes and the way technology is going.

Yeah.

And where home affordability seems like it's an issue that's gonna persist and stay around for quite some time.

So are we really going to lose some of, you know, some great employees in the workforce because they have to move out elsewhere?

Do you see hybrid staying for longer or do you.

How do you see this playing out for the masses?

I mean, not for anything else, but just the majority of companies out there.

Yeah.

I think hybrid is going to be a part of popular American work culture for years to come.

I think there's been a notable and quantifiable shift in the expectations of life work balance for a lot of American workers.

But at the same time, we haven't seen the technology and the human side come up to date with the products and services that are needed to properly build teams and interact with one another.

A great example of this is, yes, you can deploy zoom meetings and have people on camera, but there are a lot of people who don't appear on camera.

There are a lot of people who aren't putting out the same amount of work product they were when they were in the office.

And it's really hard to hold people to the same standard.

You get different levels of performance from different levels of people.

So I think we're going to see more metric driven conversations.

But here's where I put most employees on their heels and I ask a question that's tough and I don't mean this to be polarizing or negative.

I mean it to be serious and a fair question.

But it doesn't come off that way.

If the trade off was you were watched and monitored more while you work, when you work from home, versus you had much more autonomy and flexibility while working in the office, which one would you choose?

Yeah, I think most People don't like the idea of somebody watching them under much more scrutiny.

And they feel that working from home allows them to work without interruption more.

But I feel that people are also somewhat in denial about the liberties they take when they are working from home.

From home.

I'll be the first person to say I don't like getting dressed anymore.

And I never thought I'd say that when I go to work, I should be able to wear sweats.

You should trust me that if I know that I'm going to see clients, that I'm going to get dressed.

But if I'm not going to see clients, it shouldn't matter what I wear.

But you got to have some baseline level of a dress code.

Right.

So I feel there's a happy medium.

Wear jeans, wear hoodies, wear tennis shoes if you want, dress when you're, when you should be appropriate.

But then if you're a company, like a bank, for example, and you've got tellers who are supposed to dress up.

You gotta, you gotta understand the role that, the job that you have and the role that you're playing.

Right.

And companies need to compensate those people for those inconveniences.

Okay, Right.

If you're inconvenienced to drive to work, you're inconvenienced to get childcare.

The counter argument from a company perspective is you had those costs before, but those costs have changed materially.

Oh, yeah, we've talked.

It's, it's in all the inflation numbers.

Right.

Well, and think about it too.

If you're, if you're paying for childcare, you know this.

But if that business had to raise costs like we saw happen in Q1 of 2024, you know they did.

Yeah.

Because their expenses went up.

Their rent, their utilities, their insurance, all the stuff went up for them.

And they're having less kids go into the program because more people, parents are working from home and keeping their kids home now they got less income and higher expenses.

They've got to raise costs on everybody and they just pass that on to you.

They're not going to absorb the economic loss.

Right.

They're going to try to keep the same amount of earnings.

So that winds up being inflationary.

Yep.

And this is a great example of how service costs stayed high for longer.

Yeah, we talked about, we talked about on the last episode.

Right.

It was that wage price spiral.

Right.

Where the, maybe that maybe they were dealing at.

There was a time where certain industries, certain sectors that I know for a fact that the, in the tech space the engineer space.

This was definitely the case where unemployment was too low to.

Where companies were paying ridiculous amount of money to some of these engineers just to make sure that they can get them on board.

That's pivoted hard right now, too.

Yeah, it's been a big pivot.

And I think a lot of these engineers are having this come to Jesus reality where they're not going to have the ability to command what they once did.

They would go into some of these companies commanding stock prices, you know, RSUs and grants, and it was just like, it was crazy.

They could command if they wanted.

Yeah, those days have come and gone.

But we did see in Q2 of 2024, we saw the first Federal Federal Reserve rate cut.

So the Fed made its first 25 basis point rate cut in June, bringing rates to 4.25 to 4.5%.

Dissent within the Fed highlighted ongoing inflationary concerns.

Is that right?

25 basis points of the first cut, is that right?

No, no, no.

So the first, the first rate cut was 50 basis points, and that was in.

Actually was in September.

So maybe it was.

It was still a pause or an increase.

It was still a pause at that time.

Yeah.

That's strange.

I don't know.

My notes are probably a little.

Huh?

Yeah, we remember that there was a pause during that time because the, the rhetoric was just starting to come out at that point.

It's very likely that the Fed was done raising rates even though they had.

They hadn't raised rates in quite some time.

Right.

I'm trying to.

Four points.

Yeah.

50 basis points.

Yeah.

Announced that day.

That's weird how my notes are all messed up.

I apologize.

But yeah, it was the first one.

50 basis points went from 4.75, 4.5 down to 4.25.

Right?

No, no, it went from.

It went from 5.5 down to 5.

That was the first one, remember?

And then they went another 25.

And then they went another 25, another 25 in November and then another 25 in December.

Yeah, I got to pay more attention whenever I write notes for shows.

It's late.

Yeah.

It's like, I blame you.

Yeah.

So we're here to fact check each other.

But the rhetoric was just now starting to become clear that although they hadn't come out the gate and said, we're officially done raising rates, that it was no longer an option on the table during those post game press conferences that Jerome Powell was coming out saying, and that that provided a little bit of relief to everybody because it had signaled officially that we had reached phase two of this approach where we're officially done with the raising of the rates.

We're now in this phase two where we're going to now just try to figure out how long are we going to stay in this period at this high interest rate.

Right, Yep.

Meanwhile, politically, we entered into June where the election year rhetoric really started to get cadence and pick up.

Because it had been relatively silent up until that point, people were more worried about the overall macro economy.

They worried about the political one.

Candidates started outlining their economic policies with debates around taxes, spending and regulation impacting market sentiment.

Obviously, the economic markets were a big point of conversation for all parties.

And at this point in time, you still had Biden running as your main presidential candidate and Trump was certainly on the rise.

Right.

When did, when was Trump shot in the ear?

Oh, that was like two months out, right?

Yeah, it was a little late in the year, so I'd say about like two months ago.

I have it right here.

Two months ago.

Right.

On July 13, 2024.

Donald Trump, the former President of the United States and the presumptive nominee of the Republican Party 2024 presidential election, survived an assassination attempt while speaking on an open air campaign near Butler, Pennsylvania.

On my birthday.

So literally it was your birthday.

Yeah.

I should know when your birthday is.

I don't, I don't remember that.

Yeah, yeah.

So literally the very, very beginning of Q3, that, that's when that happened.

That changed the narrative entirely as it relates to Trump, as far as I'm concerned.

Yeah.

So in Q3, 2024, the economy was on a bit of a tightrope with a focus on the presidential election starting to get real steam early in July.

As we just covered, volatility returned the VIX spike to its second largest one day increase in history.

Investor uncertainty grew amid mixed economic signals.

And then there was a market reaction.

Defensive sectors like utilities and healthcare gained ground as growth stocks cooled off a little bit.

So we started to see a bit of a paradigm shift.

In number one, fear in the market was started to rise.

And number two, you started seeing some sectors begin to cool off and in some ways signal that the Fed cycle had impacted them and may be working.

Right.

But we still weren't sure.

There was very incremental gains in around that time.

Meanwhile, housing, housing affordability crisis became front and center of the conversation, not only politically, but in all the conversations that relates to the Fed rate cuts at this point in time, you hadn't had one.

But housing affordability, you started to have the Narrative from the National Association Realtors kick up the solution to affordability crisis is rates go down.

That's.

Yeah, that's always their solution.

That's the only way this gets better, guys.

Rates go down.

Prices remained high and buyers faced increasingly increasing affordability challenges where the national association of Realtors and everybody else in the real estate real estate community said, don't worry, this will all get solved when they cut rates, rates will come down.

Well, that did not happen through 2024.

As a matter of fact, rates ended the year higher than they started the year, around six and a half.

They floated up and they floated down and they're ending the year at least it looks like as of right now when recording the show again.

We're recording the show a little bit early Wednesday the 18th, two weeks out, it appears to be ending around 7%.

And with today's sharp spike in the 10 year, I expect the rates to be a little higher.

I expect it to go up even a little bit higher than where they are now.

Yeah, yeah.

Rental prices were on the rise during Q3 of 2024, reflecting demand from those priced out of homeownership.

And obviously you had a flooding of high end luxury apartments coming to the market.

But those rents were wildly high but still cheaper than buying.

We found out in and around late of Q3 that buying actually costs approximately 42% more than renting.

Right.

And I think that was around the time too where we noticed that it officially costs more to rent than to buy in like all 50 states.

Right?

Yep.

And as we covered earlier, the Federal reserve finally cut 50 basis points.

Yes.

See my notes are right.

I just had to read them all.

Well, this rate cut in September aligned with their dual mandate goals.

This despite inflation stubbornness, they felt that they were on their way down to.

Prior to this though, they had said they weren't going to cut rates until they hit the 2% target.

This marked a very material and clear change in their stance and a long line of the FOMC saying they were going to do things specifically but being a little loose with the execution.

And I think that it, it provided a huge shock to everybody when they came out the gate with that 50 point cut right away.

It was not as if the economy needed a 50 basis point cut to really start stimulating the economy again.

The economy had been performing very well according to the Bureau of Labor Statistics.

And it seemed to be like a fear based reaction by the FOMC to cut that much that early, but they had increased rates at 75 basis points it increased rates at a pretty heavy cadence, you know, over the course of the previous year.

So it was almost like they knew some of the data points that they were relying on were skewed and were like, oh, shit, you know, we thought that the labor market was a lot stronger than it actually is.

Maybe we provide a little bit of relief.

But they almost immediately cut back that.

That rate cutting methodology where we've had, you know, now three.

Three meetings in a row.

Mm.

So is it September, October, December or September, November, November.

Yeah.

Yeah.

So September 20, 50 basis points.

November, December 25 each.

So we've cut a full point since that time.

And certainly a lot slower cadence than the way up.

Absolutely.

Which I think when the market first saw the 50 basis point cut in September, they're like, oh, here we go.

Right.

They're going to cut 75 basis points.

Going to cut 50 basis points.

Going to be big cuts.

Big cuts, big cuts.

Time to party.

Right.

Yeah.

Those didn't come and the party never started.

Right.

Unlike other parties.

Yeah.

Which never stopped.

Yeah.

So, you know, it's going to be a shocker.

But the political zeitgeist in and around the end of Q3, well, budget standoffs were once again rearing their ugly head.

The government shut down.

Threats added to uncertainty impacting markets and consumer confidence.

Oh, my God, they're going to shut down.

The market said, oh, my God, we're going to hit the.

We're going to hit the debt ceiling.

We're going to shut down.

We didn't.

We didn't.

Everything ended up being just fine.

Yeah.

Gummies and lollies.

Yeah, gummies.

Record numbers across the S&P.

500, the Dow.

Right.

Everything still was on the up and.

Up, as we say in the business.

Everybody was banging out, everybody was in the black, everybody was making that money.

So in a lot of ways, it's kind of still are.

Even today, we haven't seen.

We've seen a resilience in the economy that seems almost unjustifiable.

It doesn't really make a whole lot of sense.

Right.

It does.

You think so people really downplay the impacts of emotional responses to things, and people right now don't believe it.

You know, so because they don't believe it, they're going to continue to push through because they've been confident, they've got bravado, they got swagger.

I mean, some of this could also.

We gotta, we gotta give some of the, the CPAs out there, the accounting majors, a little bit of credit too.

There's Some accounting tricks up people's sleeves to make sure that the numbers look a little bit better than they actually are.

Right?

Yeah.

I mean, in some ways.

Yeah, in some ways, right.

For sure.

So they can buy themselves a little bit of time.

And that's what a good financially savvy person will do.

100%.

And you try to have belief in yourself and grow your business in good times and in bad times.

And a lot of people think they've lived through bad times when they haven't really lived through them, economically speaking.

And they're just now feeling that, that stress.

And I think they thought that, okay, if I can just get to the rate cutting cycle, that stress will be gone.

And in fact, it's gone the other way.

Just because the fed funds rate has cut does not mean that your interest rate on loans has been cut.

As a matter of fact, it's gone up.

Yeah, exactly.

So entering into 2024, a year of resilience and reckoning was upon us.

And as we end the year, there was a year end rally.

Santa Claus rally lifted markets, but gains were uneven with tech rebounding and energy lagging.

The S&P 500 performance was interesting.

The index closed the year with a modest gain reflecting resilience despite headwinds.

And we still got some more time to go, but certainly not a hyper well performing S&P 500 year outside of, you know, a couple stocks.

I mean, up year to date right now, up 23% on the year s and P500.

Yeah.

How did it do today?

How did it do today?

Yeah, it was down 3%.

Okay.

And of the S&P 500, how many of them are up 23%.

Right.

I mean, that's a whole nother conversation.

You're getting lifted by a minority.

Yeah, There needs to be an index on the S&P493.

Yeah, that's what we need to see.

Because the top seven are pretty much carrying everybody.

Oh yeah.

Oh yeah.

So, but let's, let's look into real estate.

You know, existing home sales have fallen.

The number of sales transactions hit a decade low as buyers struggle with the affordability they struggle with.

All year long transactions have largely stalled out.

Shrinkflation inflation.

Consumers continue to face rising costs of shrinkflation impacting holiday spending.

Can't believe you questioned me on this.

I just questioned you on the Doritos and toilet paper.

Toilet paper.

I just thought that was a strange reference to make.

At the same time, seems like you got some digestive issues.

You were trying to work clearly not paying attention to my gut health.

Yeah.

And I just didn't feel like calling you out on the show and blasting you for it.

So I just dismissed the conversation its entirety.

And then when I felt it was appropriate, I brought it back up and utilized your same references to make you sound.

Gave me credit.

Right?

I mean, you kind of took credit.

But I did, I took it.

It was mine.

It was mine for the taking.

Giving is an interesting choice.

Okay?

It's giving bullshit.

Federal Reserve rate cut to end the year.

We covered it last episode.

The December rate cut was interesting not because the 25 basis points was unexpected, but because they cut their forecasted projection from 4 cuts down to 2.

Leading people to believe that we're going to.

For the upcoming year.

Right.

Upcoming year 2025.

So leading a lot of people to believe that monetary policy is going to be stricter, tighter, more challenging for longer.

And some terms were thrown around the rate hikes.

I mean that term.

You hadn't heard that in quite some time.

We're, we're not, we're not yet thinking about rate hikes.

Then why'd you say it?

Yeah, there's certainly some, there's certainly some people out there that are saying that rake hikes cannot be ignored as a possibility, however small or remote, in 2025.

And we, I said this, I said this on the, on the show before and, and so have you that you didn't want to take a misstep.

And I think that this last rate cut that we just experienced, this could have been their first major misstep.

Right?

Major one.

The 50 basis points.

Fine.

25 still, eh.

But this one could have been a real big problem because the fear is you took something that was a four year problem and you may now have just made it a decade problem.

Yeah, I think that's probably a fair assessment.

I also think that there has been a lot of things politically which has worked against the fomc.

So I will give them a bit of a asterisk here in that.

I mean the Inflation Reduction act when they passed, that was known to actually increase inflation near term.

Well, government spending.

Exactly.

Yeah.

And government spending has been out of.

Control because anytime you, you do anything to create more jobs that pays people more and ultimately that all that money gets funneled back into the economy.

I think the last year, 2024 in particular, highlighted a need for a real hard look at how we get data, when we get data and where we get it from.

I think that there's been a pretty big gap in life and how things have changed from a technology perspective.

Okay.

I would say the home buying process 20, 30 years ago was a lot different than it is today.

Oh yeah.

There's a lot more technology, a lot more people have access to homes than they once did.

There's also a lot more different properties out there.

I think that the data and the way we report on these transactions hasn't kept up.

Any Realtor in your neighborhood can go check their local MLS and get an idea for number of listings, number of sold properties instantly in real time.

And I understand that's the national association of Realtors database, but if that's out there as a tool, why can't the federal government get access to that information at a faster cadence?

Why, why, why are we relying on things like owners rent equivalent?

So some of the data sources that we're looking at historically might not make sense anymore for today's world.

Technology, Infrastructure, social challenges.

It just seems to me that, that there are better sources.

We have a private payroll and we have a government Bureau of Labor Statistics payroll that comes out and they're very different reports.

Oh yeah.

Paints two completely different pictures.

And I understand how, how and why that could be, but we need to find ways to reconcile and be more efficient.

Shout out to Doge.

Yeah, Department of Government Efficiency on how to get this information and how to use it.

Because right now you've got too many sources of antiquated information coming in.

Too slow.

Yeah, it's just what it is.

At the same time, in the reference to Doge, you've got a presidential campaign that was successful for the incumbent, Donald Trump.

And well, he won.

And now he's talking about and has announced that he's making some pretty significant departures from traditional political choices, electing to choose people that he thinks are the best suited individual, not necessarily the best suited politician for jobs.

A lot of conversations around tariffs on day one, tariffs on Mexico, tariffs on China, out the gate.

He's shown a cadence in a history in the past of being more aggressive.

But what's going to be interesting to see is how Vivek Ramaswamy, Ramaswamy and Elon Musk handle the Department of Government Efficiency.

They've promised some pretty interesting and dynamic changes to the government as a whole.

I don't know if you saw it today, but Vivic came out after reading a 1500 page bill and just openly blasted it.

And then you had Elon getting on top of it.

And what I found was really interesting and I found fascinating was you had two non politicians read a bill.

And their take home was one, this bill was 1500 pages.

It could have been written in 20.

Number two, there were lots of things baked in and hidden into it.

And an artificial deadline created to get this done before the holiday break for Congress in the House so that they could pass it by getting these other issues not looked at with the screening that they probably deserved.

And then if that's your take home on this bill and that's your take, number one, it's not efficient.

Number two, you're playing manipulative games, you're manipulating time, and you're using a bill with a headline to get other things which include salary increases from some of these people.

Oh, yeah.

And, and it was just clear.

I mean, he.

Vivek clearly read the entire thing.

And now you've got Vivek and Elon Musk on X openly talking about their criticisms of this particular bill.

I can't remember the last time I got such a K.

I mean, I'm not, I'm not co signing.

I'm just saying it's kind of stunning to get an outside person who's intelligent, look at this, articulate it to you with no political spin like, this is just not efficient and inappropriate.

It's really interesting too, as you mentioned that it made me think about, okay, this.

One of the guys heading the Department of Government Efficiency is choosing to use one of his own platforms, his company, to relay some of these messages.

And he's benefiting a whole lot off of this.

Elon Musk.

Yeah, well, I mean, like it or not, social media has become the preferred news choice and source for, for most Americans.

You don't have just.

I'm just asking a question.

Right?

I don't, I don't have a horse in the race.

I don't know that that benefits him per se.

Come on, there's a benefit there.

Let's not act like there's no benefit.

That's his choice of communication.

Yeah, sure, I get it.

But, you know, is he gonna get more advertiser dollars on X because of it?

I doubt it.

I mean, Disney pulled out.

I mean, a lot of people pulled away from him.

I mean, him and Bob Iger had that wild, you know, go fuck yourself when he, you know that.

When he was referring to Bob Iger.

Remember that?

I forgot about referring to Disneyland.

Yeah, we, we forgot.

We got to mention that on the.

2024, Disney pulled their advertising when, when Elon Musk bought Twitter for $44 billion.

What the hell?

It was, hey, Bob.

And they asked him to Respond in an open public conference and his response was go fuck yourself.

Right.

And, and then it got silent.

He doubled down.

That's right, yeah.

He said go fuck yourself.

And I get it, he's you know, the rich man in the world.

He had, he had a net worth go over 400 billion I think it was recently.

Yeah, it was, it's the first time anybody's ever crossed that number.

Mainly through his SpaceX because guaranteed him some government contracts.

He caught a rocket that returned back to, to earth from the site that it launched.

As far as I'm concerned, it's worth every dollar.

Right.

That's wild.

That's impressive.

That's sci fi.

That is very impressive, but it's not fiction.

So something else that we neglected to mention by the way with, with the rate cuts is 2024, you began to see your high yield savings accounts start to come down.

Yeah, that's the first thing.

So whenever banks cut, whenever fed funds rate cut does come, the first thing it changes is not your loan rates going down, it's actually your loan rates in place stay the same and new loan rates will respond to the Treasuries which have not gone down.

So loan rates have gone up or stayed the same, but the cost benefit to you and your rates at your deposit accounts go down almost instantly.

Right.

Unless you're in a CD product where there's a contractual obligation to keep you.

Right, right.

For extended period of time.

So banks are going to maintain their profitability.

Right.

They're going to try to increase their net interest margin which is the difference between what they're paying you on your deposits and what they're getting on loans.

So with the, their borrowing costs becoming less, you shouldn't expect for to get better interest rates so soon.

No, the, the market is really driving that and banks are really being responsive to it.

But there is no right now banks are going to lower their cost of funds which is paying less on deposits to the extent that they can while keeping their return on their investments into loans as high as possible.

Right.

And you're not going to get this big letter message or pop up on when you log in online.

It's going to be anecdotally mentioned just on your statement.

They generally have a right to do so at any point in time and it's usually done automatically, which, you know, I get it.

Rates are one of those things that got really, really a lot of scrutiny in the last couple of years because for a long period of time you got almost nothing for your deposits.

They would Pay you nothing.

Yeah.

And then it was 1%.

People were like, ah, 1%.

You know, I should probably move my money around.

Yeah, 1%.

There was 2%.

People like, oh, yeah, that's good money.

There was 4%.

People like, I need to move my money now when he had 5%.

People are like, look like you're gonna be the best right here.

I'm gonna go across the street and get the best.

It's not right.

Because if, if, if you invest in the stock market and on average you can get somewhere between 7 to 8%, then, I mean, you get a guaranteed 5% over here in this high yield savings account.

Zero risk.

Zero risk, Right.

Not even like perceived risk or like incremental risk.

It was just no risk.

So right now you're technically not in the wrong if, if your bank drops your high yield savings account to somewhere around, you know, four and a quarter, right.

Even 4%.

You're not in the wrong if you wanted to continue to keep it there because you're still beating inflation, right?

Yeah.

And that's the name of the game, right, is beat inflation at all costs.

But that, that landscape is going to change pretty dynamically in the banking space over the next couple years.

I think banks in financial services businesses are, are now on the downside slope of a very difficult time.

But I think that, that other people will start to feel the pressure while banks are coming out of it.

Keep in mind, on the upward swinging cost of when they start to get more restrictive on fed funds and that goes up as fast as it does.

Banks are on the front line of that pain point.

Okay.

So banks experience at first, but then they get relief first as well.

Good.

So need that relief.

Yeah, well, you know, anything, the instant relief.

Anything to help you feel better about you.

Thank you, man.

We should do ayahuasca on the show.

You're not down.

I'm not down.

But if with a proper shaman, with.

The pro, who did I get to pick?

The shaman?

No.

Why?

Because you think shaman is toilet paper?

No, no, I'm gonna.

Neil Brennan.

Neil Brennan.

Come on.

This is the second time I brought him up on the show.

Who's Neil Brennan?

He's that comedian, the right hand to Dave Chappelle.

Why would he be the.

He's done it like 15 times.

That doesn't.

Okay.

The heroin addict is heroin.

I just feel like it would be an amazing trip.

I don't think so.

You know, there's an interesting thing that they're seeing happen with ayahuasca and like some People who've done some psychedelics is that there are some people who, and the answer here is unclear, who will have these experiences, come back from them and be a completely different person when they come back.

That happened to Neil.

So he literally was the same person for a majority of the time for like 13 of them, let's say.

And known agnostic person.

Right?

Yeah.

Came back, saw God.

He said, I don't.

I like very.

No, outspoken about being agnostic.

Right.

And after the 14th time he came back and it was like, I don't know what that was, but I was definitely in the presence of God.

Yeah.

And so there's two prevailing theories that I think are both very reasonable.

Is one, it, you know, you just have an experience and it changed the way you see things sometimes for better or for worse.

Some people come back just completely different, like in a bad way.

And then there's a good argument which I think makes sense.

They're locked in.

They stay, they stay that way.

Yeah.

Like you're not going to.

Oh, the chemicals are going to wear off.

No, no, you're, you're.

That, you're that person.

And that's.

For that reason I will never try it.

The other theory which is interesting is that you have a preexisting disposition already in place to being like depressed or having some type of psychological issue.

And all this does is it ultimately brings out that pre existing condition.

Right.

If you have trauma that you haven't really worked through.

Yeah.

This is not it for you that you got to work that out first?

Well, I think part of this is a trauma dealing experience, but so I was listening to.

I think it was Huberman or somebody talking about this.

They don't really know how this all works.

They fully don't understand how the psychedelics are so impactful to people.

But we, we've stigmatized a lot of drugs in this country in a way that's really strange.

So correct me if I'm wrong.

Have you look, gone down this path and looked into it?

No, no, I'm saying like read, read about it or.

Yeah.

So from my understanding, and I can't remember if it was ayahuasca or not, but there's a certain chemical release in the brain that generally only happens twice naturally in a human being's lifetime.

Yeah, once.

Once when you're born and once when you die.

Ayahuasca.

And then ayahuasca will give this same relief or same chemical release.

Huh?

Right.

So I think that's the euphoria that.

That is part so it's interesting, too.

I don't know if you ever seen how ayahuasca is made?

No, I haven't, but it's not one plant.

It's actually two plants combined.

Because if you were to have one of the plants that you used to make ayahuasca, your body would just digest it, it would pass it through, but the other plants you mix it with actually blocks the enzymes, which would just have you pass it through from a digestive point and allows it to get into your bloodstream.

So it's fascinating to me to see how this.

This chemical concoction of two plants mixed together and effectively cooked into this concoction.

Right.

Has been around for so long, but somebody at some point in time had to take one plant and the other plant and say these two things on their own or like, whatever.

But when you mix them together and they're amazing, like, who.

Who came up with that?

Yeah, it has been.

I know.

And it probably stemmed from a time and place where way before technology was even a thing.

Yeah.

I mean, there's.

I mean, if you.

If you follow.

Mind you, none of this is recommended.

By the Higher Standard podcast or it's all recommended.

You be the judge.

Yeah.

If you go back and look at Graham Hancock's series Ancient Apocalypse, where he talks about him believing that there was a.

A cataclysm that wiped out a previous version of humanity that to this day, we still don't fully understand.

Right.

He.

He goes back in pretty deep detail, talking, you know, in some cases, ruins that are 13,000 years old that suggest that ayahuasca is a big part of ceremonial culture that has similarities to other cultures all across the world.

So it's not like just the Mayan or, you know, these different tribes and cultures in, you know, Southeast Asia or in Turkey, in.

In the, you know, the Middle east, they all have similar parallels and they all seem to have the same imagery.

And some of these images relate to things like ayahuasca.

Wow.

What's really fascinating, too, is you also have, like, these stones that have, like, color mixed in with a type of natural occurring chemical which effectively crystallizes.

So these drawings inside of rocks have crystallized and stayed there for tens of thousands of years.

Wow.

And they've gone back and looks at some of these drawings that were just like squares.

And those drawings actually happen to be timing moon cycles over the course of not.

Not one year, not five years, not 10 years, thousands of years.

And people just assume that humans at that point in time were hunter gatherers well, right.

They seem to have a lot more going on.

Yeah, yeah.

That's the aspect of being in a digital world.

Now that, that scares me too.

Whereas like things like that aren't being implemented to where if, if a civilization were to be wiped out that I remember listening to, there was a botanist on the Rogan podcast.

Joe Rogan.

Joe Rogan.

Joe Rogan, right.

And he said that theoretically it would only take a thousand years for agriculture to take over and make it seem like we were never here.

Yeah, that's actually an interesting one.

So have you ever liked research like the Amazon?

No, not, I mean, not researched it, but I've heard, I mean I've listened to a few things.

So the Amazon they believe to be.

Now the prevailing theory is that it was manufactured, humans built it.

Oh there's, there's a type of.

That's the, the theory now.

Yeah.

So they've flown lidar technology, laser technology.

Now they can put it on drones.

It's small enough to fit on drones.

And they found lots of these monoliths, these large, you know, formations of geometric figures in the ground.

But they've also found entire cities that they believe supported millions of people.

When I say cities, I'm talking like sewers, roads, wow.

Interconnected cities.

In the Amazon they did not, they didn't even know were there.

These cities appear to date back thousands of years.

Wild to think that we're still discovering this stuff and.

Yeah, well, yeah, there's, it's fascinating when you get into the overall exploration of the country.

Like so back in the Sahara Desert, for example, prior to the cataclysms was a lush like garden tropical area.

It was not a desert exactly, but.

We'Ve only explored like a small percentage of it, like less than 10, I believe.

So there's obviously tons of possibilities of what is likely there, but we just don't know it.

I know there's something like that too.

Where with the Egyptian pyramids that right now it looks like around there there was, there was no agriculture but if you there they were able to track that was lidar.

So they use lidar to, to look at it.

And the Nile was closer to the pyramids and it shifted over away from the periods.

There you go.

And they figured out that there was agro, they had berries and whatnot.

You could tell that.

No, no, there was civilization living around here.

You know, there's a.

They found.

I don't know if you ever like follow the pyramids, but in, in Giza, the Great Pyramid, there's a Grand Gallery, which is.

I think it's just above the king's chamber.

Yeah, just above it.

They found another chamber above it which they haven't opened up.

And people are like, well, why haven't you opened it up?

Like, well, we don't want to, like, damage anything.

Like, why don't you just drill a hole and send a camera through just to see what's in there.

Right.

There's so many things like this, I could probably go on for hours on a different podcast.

But there's.

Wait, so you.

So I know you've done your research on this.

Yeah, I know that there's something to do with this.

I haven't gone into that guy's name that went on Rogan's podcast a whole bunch of times.

It talks about the pyramids all the time.

Hancock.

Some Graham Hancock does Hancock.

Right.

What's the.

What's the thing with all the points of the pyramids?

Oh, they.

Well, so the pyramids you've seen today don't have the.

Like, the limestone exterior.

They believe that were there.

So they believe the limestone exterior is polished.

I see.

So it almost had like a.

Like a mirror, like, reflection.

Oh, wow.

And one of the guys, not Grand Hancock, but another guy who.

Who thought.

He thought there was a mechanical purpose for the pyramids, basically, that if you start looking at some of the geometric shapes, some of the way the tunnels go through, he thought they produced energy using heat, like energy plants.

Okay.

Using, like, captured gases and, like, water.

That's why all these.

These pyramids are over water sources.

Okay.

He believes they're an ancient energy source, and that's why you typically see these over water every time you see these pyramids all across the country.

Like, they're always over water sources, natural occurring water sources.

Oh, interesting.

So his.

That's.

I mean, it's unsubstantiated, and I don't know how you ever substantiate it, but he's gone so far as to, like, take different types of gas and find the wavelength that we need to go through.

And the wavelength happens to match the actual width of the tunnels and the tubes going into the chambers and the different chambers that hold different levels of gas.

And it's interesting.

And there's one guy who went on.

I think it was on Rogan a while back.

I can't remember who it was, but he actually laid down in one of the.

The.

The sarcophagus, like, tombs that you lay down in it.

Okay.

And then he, like, got up out of it and felt this like euphoria, which is interesting.

I could just be like, you know, it's a cool place to sit.

But it was, you know.

Yes.

Who knows, right?

There's just so much about the world we don't understand.

And instead of like focusing on figuring out who we were and where we came from.

Yeah.

We soon our time obsessing about the markets and politics and numbers that really don't mean anything unless we make them mean something.

Yeah.

Weird year.

It was a very weird year.

Yeah.

But we have UFOs now, so that's good.

Yeah.

There's just one resounding theme for all of 2024.

Just be tasteful with what you say.

That's your resounding theme.

I've got a better closure of the year.

You ready for it?

You're holding your, your mic stand again.

Yeah, I'm ready to stroke.

Yeah, I can tell.

Take your time.

Put those fuzzy knuckles free, brother.

Stay fuzzy.

I think this year proved to me more than anything else that the speed of communication and the influence of social media is much more pervasive in the real world, in the economy, than we ever gave it before.

And that Elon Musk single handedly shown an ability to influence an election a great deal.

I'm not saying that they won it because of Elon Musk.

Certainly the assassination attempt and all these other things didn't hurt.

But communication moves at the speed of light.

Traditional media is dying.

And the way we are addicted to our phones means that influence, the quantifiable influence, is really, really, really changing.

And I believe the next leap forward with AI, with the way we rely on social media for news, the way we're addicted to our phones and the way we think of influence, I think most people don't follow other people anymore.

Okay.

I think following people is going to go away.

Follower counts is going to go away.

I think what comes next is the algorithm is going to decide what you see and it's going to be like a game of Thrones of content out there.

You like economic content.

You're going to see the higher standard if you engage with a higher standard.

If you don't, you're just going to see less of it.

I don't think following or unfollowing or being linked to people is ever going to matter.

I think AI is going to win this and AI is going to give us what it knows we like.

And I think that's a very dangerous thing that can be manipulated.

And if we don't start to get a better grasp of understanding and filter of parsing through what's real and what's not with AI being.

I played with Sora the other day from ChatGPT.

It's astonishing.

Well, I don't even know what it is.

Sora is their video creation model.

Oh, I see.

So you type in.

I want to see an image that looks like this.

And it can make a clip.

And there's a couple different versions.

If you have the paid version, you can make as many clips as you want, but it can come on 720p or 1080p.

Wow.

And you can make.

And I use one on one of the clips I did recently, you know, social media, one that we just did.

Yeah, yeah, that was AI generated.

I was playing with Sora.

I said, put a kid in a room who looks anxious playing on his phone, social media.

And zoom in and out from different angles, and that's what you got.

That was really cool.

And I layered in the social media images flying in the room.

But that was.

That was from Sora.

Wow.

And it's interesting.

So instead of searching stuff, now I just go to Sora and tell it what I want.

So I don't have to go to a website and say, hey, show me videos like this and then find the video.

I just go to Sora and say, give me a video that gives me this.

Right.

That portrays this image.

Yeah.

And that's the way of the world.

But he who controls AI will have an ability, in theory, and this is a little tinfoil hat, conspiracy theorists here, will have an ability to control what you, the consumer, think you want.

And that's where this gets dangerous.

It goes back to the same traditional media stance.

Right.

Media was corrupt.

Because of this, AI can be corrupted, too.

Oh, easily.

Yeah.

And you'll never know.

You'll never know.

I like it.

Well, fuzzy knuckles, let's call it a wrap for the year.

We hope you guys all have a happy, safe new year.

Hope you're spending it with your loved ones.

We appreciate you tuning in to another episode.

And get your.

Get your mocktail Negronis out there, kids.

There you go.

Love you, man.

Love you too, bro.

To 2025.

Another year of doing podcasts for all of you.

Good night, everybody.

Bye.