Ready to do this?

I'm about as ready as I'm gonna be.

I feel very sophisticated.

Don't you stop.

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

Cue the camp hop.

This is the higher standard.

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

That's right.

That's right.

Take that in, take it in, soak it in.

All of it.

That's right.

Take it all in.

Sit across from my partner, Time.

The one, the only, the man, the myth, the legend, the guy who's not wearing the quarter zip today.

Side home, everybody.

Thank you, my guy.

And sit behind the desk in the production suite.

Is nobody Regil taking the day off?

Pto.

Hey, nobody.

He recruits some pto, so he's capitalizing

on it and he may in fact actually be up in San Francisco for the next show.

So.

Yeah, prepare for multiple episodes.

Yeah, he's out there getting slim.

Maybe we should get like a cardboard cutout and put it back there.

We should put something there instead.

Yeah, or just everybody swap out with a rune once.

Right?

Just see what happens.

Are we at the point now people don't remember who Arun is?

No, there's some OGs.

There's some OGs that I. I still get hit up from time to time.

All right.

Yeah, yeah, we gotta have a room.

We should bring him back next episode as a surprise guest.

I've invited him back multiple times and every single time I do, he's like, oh, bro, I'd love to come by,

but I got gout.

Yeah,

sorry, bro, I know you're not listening.

Anyways, well, we got a third build episode of Full of Data for everybody today.

That's cold blooded.

We got house, we got housing information to get into all the different sectors.

But we're going to start off with some.

The CPI data from the bls.

Yeah.

So let's.

Let's just set this up, right?

This was delayed, right.

And this is part of the government shutdown.

This is a whole data set that was going to come out that was delayed in part due to the shutdown that came about a week or so later than it should have been.

But it came on the heels of some pretty interesting data.

And before we get into it and oh, because Brigil's not here, we're going to do all the screen work ourselves tonight like you saw us do on previous shows.

So I'm going to go ahead and pull this bad boy up here.

We have a lot of charts, as you probably noticed already.

If you're watching the video stream.

Oh, and for those of you listening on Apple Podcasts, Apple Podcast has just announced they're going to have video streaming soon.

So we're in the process of figuring out how we're going to do that and deploy how we're going to provide

more sexy to you on Apple.

Yeah, it's going to be good.

It's going to work just like Spotify's, although they have their own little advertiser engagement portal thing there.

The unique thing with them is going to be that Spotify hosts the video on their platform.

Apple, your syndication platform, has to host it.

And it's going to be kind of an interesting nuance there.

So they don't actually roll that out to the spring of this year.

Right.

But we're trying to get ahead of it.

Yeah.

And if you want to do something, you want to help out the show, you want to help out your boys, head over to join Fridays.com use the code higher to get yourself some longevity goods.

And if, if you, what else you could do to help out the higher standard is hit that like button, refer this out to a friend.

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It really helps the show grow and we would appreciate it.

We're poor.

Help us just a little bit.

Yeah.

Okay.

So the US Bureau of Labor Statistics on Friday, February 13, we're recording this on Thursday, February 19, came out and said all items in the index rose 2.4% for the first 12 months ending January after rising 2.7% for the 12 months ending in December.

Don't pay a whole lot of attention to the numbers.

We're going to break this down, but suffice it to say that all these, all the items, less food and energy, the core number rose 2.5%.

Now, keep in mind, the Fed likes to remove.

I'm sorry, the Bureau of Labor Statistics likes to remove that.

And the Fed prefers to look at this number, pce, because it removes the volatility of food and energy costs.

Right.

So that's their preferred metric.

Yep.

So over the last 12 months, the, the energy index decreased 0.1% for the 12 months ending in January, and the food index increased 2.9% over the last year.

We are going to spend some time on the food index.

I think that one is an understated pressure to the humanity that we don't talk about enough.

Exactly.

I mean, and I think with this report that came out, what we've routinely talked on the show, and I know that it's been something that you actually do a really good job at dissecting is this.

These data points that come out, all they really do is help control the narrative that wants to get, that they want to spin.

Right.

And they try to use it in whichever way benefits them the most.

Remember not too long ago we, we said it on this show, JP and the entire FOMC said we will be cutting rates depending on the pressure that we see in the job market, in the labor market.

Yeah.

Right.

That will determine whether we cut rates or not.

Okay.

Although we could, we could sit here and argue all day and night whether the numbers are real or not and if, if they're going to be revised down or not and what they really mean.

But what we do know is we had a jobs report that came out saying that they came out with 130,000 jobs, right.

For the month of January and that unemployment continued to go down from the 4.6% unemployment rate in November all the way down to now 4.3%.

So I got to be the guy that says it.

So wait, hold on.

But if that's the data point that's coming out and you came out and said we will be cutting interest rates based on this, if only this happens, that means will not be cutting interest rates.

However, now you get favorable CPI data points, inflation data.

Inflation data.

Right.

Now you can start to begin the narrative of.

Hold on.

Inflation is now getting to the point that we said we wanted it to get to.

Maybe we can start cutting rates in a couple months.

Yeah, I don't see that happening.

No, neither does the probabilities.

I think the prob.

The probability suggests otherwise by the time Kevin Horst steps in.

And so.

Okay, let's break this down like number.

There's a couple different things that are meaningful here that could absolutely change the probabilities.

And I don't think anybody has the answer, but I think we should probably Monte Carlo simulate this out a little bit.

Okay.

All right.

Probability problem number one is Lisa Cook at the Supreme Court.

Right.

If the President and his team cannot exit Lisa Cook without having an undue influence on the fomc, that means he will have three of the seven voting members.

Assuming that Jerome Powell does not step down.

Because keep in mind, again, after May, after his term is up, he's still going to be a voting member, but he won't be the chair.

Yes.

So he hasn't, he hasn't said that he's going to step away from that either yet.

And I don't know that he will given how staunch he's been on his position of pushing Back.

Yes.

At least against the influence on the fomc.

So the Lisa Cook Supreme Court situation is very relevant here because if the he can't get a majority four, there's always going to be a four to three vote against that.

Presumably unless somebody on the current FOMC would flip, at least with their methodology.

Yeah.

Myron, his current, the President's current choice has been very aggressive on rate cuts.

Fed Secretary Williams has been pretty aggressive in recent months.

I think that's because a lot of people were jockeying for the President's love for possibly the FOMC chair position.

Yes.

Should be interesting to see what the dot plot says the next time the SCP comes out.

That's right.

So that's variable number one.

Right.

Variable number two is also a Supreme Court conversation where you have the whole idea of tariffs being under the watchful eye of the Supreme Court and that that's going to be fodder for a lot of media attention when it comes out.

Because if they come down and say that the President cannot do these things, you have some interesting things that are going to happen.

Number one, we got near term inflation.

Inflation as a response to tariffs.

You don't get the benefits for tariffs unless they've been in place for a long period of time.

Right.

That's how companies come back.

They build all these commitments that they're making.

If the tariffs go away, takes a

while to build infrastructure.

Right.

You take those infrastructure, it will build jobs and we'll do all the things that are, I guess, intentionally designed to do that.

But near term, it's a tax on the Americans.

And despite what the White House says and the criticism that they give a lot of people for saying that tariffs are bad, the Kiel Institute, COB and the National Bureau of Economic Research have all come out and said that over 90, in some cases, 100%, in some cases 90%, 96% of the tariffs are born by the consumer, not by the companies.

Even though other people will tell you otherwise.

Yeah, the White House is challenging that.

Okay, fine.

Then you've got other factors which could come into play.

WASH was an interesting pick because WASH has historically been more on the current FOMC side of rates, matter of fact, more conservative than them.

In some ways, way more conservative.

I mean, historically, this FOMC has.

The way they're playing this whole playbook, right, is we're gonna continue to cut rates and try to normalize it and stabilize it and make this a drawn out process.

Whereas Kevin Warsh has served on FOMCs in the past where the playbook was we're not going to do anything until this thing crashes and burns and then we'll come in and save the day.

Right.

And you said on previous shows and that's a great example.

So what I would say is I don't know that his politics have changed.

Just his narrative to get the job may have changed and he still has to be confirmed.

So that's a whole.

Right.

Different piece of the puzzle there.

The other parts that are also interesting here too is that you've also got some tertiary impacts that the Fed needs to be thoughtful of.

Number one, the jobs have come down to 4.3%.

Their target is now 4.5%.

Right.

So now we're in a healthy number.

That's mandate number one, jobs.

The other side is price prices stabilize prices.

Right.

Prices now at this actually came in better.

They thought 2.5%, you got 2.4%.

Actually let's granted it was CPI and not PCE, their preferred gauge, but they still cite it and it's referenced in their beige book.

Yep.

According to cnbc and I'm gonna pull that article up here.

There you go.

Treasury yields slip after slightly lighter CPI reading and this is gonna be constant problem for them.

Right.

So U.S. treasury yields slipped on Friday after January's delayed consumer inflation report came in lighter than expected.

The 10 year treasury yield dropped more than 5 basis points, 4.05.

It's back up to about 4.8, 4.9 today.

But it did drop.

It brought mortgage rates down to one of the lowest numbers we've seen in quite some time to say.

So is this a good thing that, that the yields drop a little bit or is it a bad thing?

I think you're getting this paradoxical situation where people think that there is no clear reason for why the bond yields dropped.

It was not inflation alone that did that.

They were already kind of dropping ahead of that.

Okay.

So I think for people to go.

I think part of it is the risk off atmosphere that we're in.

You're seeing people run away from cryptocurrency currently and cryptocurrency has not gotten any better.

And just because say what you chest next.

I know it makes you happy.

Say what you chest.

Let's just get this out of the way.

Let's go to CNBC real quick.

All right, let's go over to crypto and let's take a look at Bitcoin.

It did have a positive day.

It's up to a whopping $67,000 242, 67,245 and 16 worth less than the

cost of mine one.

Yes.

Current cost of mine one is around $85,000 a check today.

Yeah.

So that's a problem in and of itself.

I think you're seeing an exodus out of the, the mega caps because people are really worried.

I don't know if you've seen this in the news lately, but a lot of what we talked about in the show is true where people are going into the small caps and they're really concerned.

What was surprising today is Walmart got kicked in the ass pretty bad.

Yeah, yeah, yeah, yeah.

So that, that's a. I think the consumer is suffering.

We're going to talk a little bit about why that's happening in a little bit.

But back to the inflation conversation.

So I think the, that.

Let's read the rest of this here.

So let's see here those figures brought in CPI back to its May 2025 levels a month after President Donald Trump first announced tariffs.

Home related costs have absolutely exploded since January 2020.

We're gonna talk about that.

So on one hand you have the Fed looking at jobs and inflation saying these numbers appear to be falling in line.

Yeah.

Now it's not a hard stop.

They're not gonna get to the Fed's target number of 2% and 4.5% and say stop.

Yes.

It's gonna continue to drive momentum down.

So they're gonna wait and see which way momentum carries this.

We know on March 18 that there's more likely, not more than likely, not going to be a Fed rate cut.

Yeah.

To your point.

90.2% chance right now that there will not be an interest rate cut at the next FOMC meeting.

Chicago Mercantile Exchange.

Yeah.

Yeah.

Based on Chicago Mercantile Exchange Fed now tool.

Yeah, I think that's probably accurate and I think that that's probably a fair assessment based on that we've seen.

Now following that meeting, the next meeting would be April 29th, still under chairman JP Jerome Powell.

Right?

Yeah.

My guy.

71.5% chance they will not be cutting rates by then at the current moment.

Okay.

That will be his last meeting as, as chair.

Then the next one's in June.

Right.

Then the next one, next meeting will be June 17th.

Yeah.

Your boy Kevin Warsh will step in and at that point right now there are, there's a 32% chance that they will not cut rates and a 68% chance that they will cut rates.

And what, and what the conversation around this all is Right now is this is beginning to start the conversation of does the, the independence of the Federal Reserve, like you're getting a new chair appointed by someone who's been very vocal about cutting rates.

Right.

And so it's like, how much independence do they really have?

Well, I don't think they've had independence for a long time.

I just think it's much more visible now than before.

But then we got to.

I mean, that's a whole nother conversation, right?

If we're questioning that, I mean, economies around the world got to start questioning that too.

I think the economies in the world know.

Yeah.

Come on, let's, let's be honest.

Let's be honest.

You got to know we're not invited to Davos.

Okay.

We haven't been in Switzerland for these things.

But you got to look at this stuff and say to yourself, wait a minute, this world operates in a way that sometimes is unsavory for the general public because we have this ideology of, of, I don't know, human morality.

Yeah.

Business is business and money is money.

And there's a lot of things around the world that we find out after the fact that frankly scare us a little bit because we're like, damn, it really does work that way.

Yeah.

And they really did not consider these people because at the end of the day, it's just a numbers game.

Okay, Do I gotta be the guy who calls out the stuff now?

No, not all the stuff.

You gotta be careful.

No, no, let's do it.

We're already.

You got the Epstein files, you got Diddy, right?

I mean, I know, I know it sounds like sarcastic.

I'm not even being sarcastic, but I'm being dead serious.

Yeah, we know there is a seedy underworld out there that we have gotten brought into the visibility and if you just look, these are high profile people, okay?

And they're all mixed up in something.

Whatever it is, I don't, I don't even claim to know.

Right.

Even based on what we know now, I still don't fully understand.

There's enough there to begin the questioning.

There should be questioning.

Are we going.

All we're saying, are we going to seriously look at each other in the face and say that you don't have some level of this type of corruption with the fomc?

I mean, are we really going to do that?

Right?

Yeah, exactly.

So, yeah, I get we're keeping up the image of propriety here, but let's also not lie to ourselves.

You're not going to blame one president for the financial position of the country.

No, this is a, this goes back decades and multiple different presidents over multiple different parties.

So you can be biased and have your political agenda and blame all the people you want and wave whatever flag you want, but here's the truth.

This has been a long standing problem.

The national debt is a huge problem and no political party has ever solved it.

Yeah, I don't even know if it's solvable at this point.

No, no, it's a machine.

It's a machine.

It's a machine that's going.

And I don't know, I don't think that this is the cause.

But what, what isn't getting enough attention?

We've, we've referenced it on the show.

The Treasury Department announced that the Federal Reserve had pumped $90 billion so far to stabilize the markets.

Right.

And have no plans on slowing down.

Yeah.

So that just means that they're buying Treasuries.

Right.

And granted those are shorter term Treasuries.

Right.

But would, would that have any.

Because they're buying shorter term Treasuries, does that have any impact on the tenure?

Well, they're also selling the tenure treasure.

They're selling longer term stuff right now, driving the tenure, keeping it about where it's at.

So they're, they're buying and selling at the same time to manipulate the balance sheet to keep the duration longer.

So that's happening, number one.

Number two, they did say they were going to do this as part of their flooding the market for repo lines and trying to put excess liquid in the system.

Yeah, they said it was, it was mainly for bank reserves.

Right.

I think.

What are they called?

Tax time?

Yeah, they were calling it reserve management purchasing.

And I don't know that that's necessarily.

I almost forgot to put this on.

Do not disturb.

Let's, let's put the podcast mode on here just in case anybody.

Podcast time.

Yeah, I don't, I don't want anybody, you know, I don't want y' all getting the personal stuff.

But yeah, look, I don't know that that's really being as impactful as people want it to be.

I've been looking at our own Fed liquidity models and we look at the liquidity in the system and we basically take the Fed's current balance sheet, we net out the repo line and some of the treasury activity, and we're still at a net negative like 6 or 7 on our scale.

Yeah.

Which to me is incremental runoff of liquidity in the next time we, we Go through this and some of the activity you saw today and tomorrow should show us a little more Fed positive activity.

Right.

Which is what they forecasted.

But I don't think there's any meaningful change there.

I think that what's really happening in the markets is people are losing confidence that things are going to be okay.

Yeah.

And to that point let's, let's look at some charts here.

I found these charts really fascinating.

So if you're not watching this on the video channel, come back and watch it.

Or you can get this on some of our stuff like my X profile, the threads, LinkedIn, all that stuff, it's all there.

But these charts are really fascinating.

There are some political names on this only because of presidents who were there.

You get Trump, Biden, Trump.

This is not a knock on any presidency.

Again, not political, but it's a good timeline kind of moniker.

If you will stay out of my DMs.

Yeah, they're going to come to my mind, don't worry.

In January we, we had a problem, but home related costs have absolutely exploded in January since January 2020 to now.

Okay.

So now five years of data to really look at six years of data.

If you want to include to the beginning, there's utility gas services jumped 56%.

Electric prices 41.

That's only gonna get worse.

Okay.

The data center AI semis.

It's all gonna be a problem.

While home insurance rose 14 according to the BLS.

You know what's crazy is because my

neighbor just came to me and asked me, he's like, did your insurance go up?

Yeah, I was like, yeah man, it did.

Oh my God.

He's like, he's, he's retired too.

He's like, man, I can't, I, Yeah, this is making it really tough for me.

Yeah, I bet, I bet, I bet it's really, I mean if you retired as a retiree and you've got like fixed income coming from dividends and all these places that you've put your money that you know you got a set like number to live, these incremental like life costs like some of these numbers.

Yeah.

You didn't plan for your, you know, utility gas service to be 56% higher.

Right.

So kind of wild.

So.

But by comparison, nominal wages have increased about 31% at the same time.

So people go, oh well Chris, wages have gone up.

You keep talking about wages.

Wages haven't gone up.

No, they haven't gone up enough relative to the cost of living.

Right, right.

And that therein lies the problem.

And people go, well, Chris, you're saying that, you know, the real cost of living went about 20%?

Yeah, it did.

Right.

But people are spending on necessities, not the things they want.

Right.

Unfortunately, the necessities went up the most.

You have to pay electric bill, you have to pay your gas bill, got to pay for insurance.

So over the last year alone, natural gas prices have risen more than twice as much as wages.

And it will only get worse as power hungry data centers come online.

Owning a home has never been more expensive.

And this chart here says the story.

I like this chart because it kind of overlays over each other.

But you got home insurance v electricity v gas.

And it goes to show you how meaningfully significant some of this has moved.

And this is the source from Bureau Labor Statistics.

So in theory, this is going to be your best.

Yeah.

As trusted of a source as you can get.

So of course the natural question is, well, I mean, Chris, are there other necessities that have gone up?

Yeah, I'm glad you asked.

Right, right.

Yeah.

When food, rent, insurance and energy reset, higher wage growth becomes something we all feel but rarely openly talk about.

This is why the cost of living squeeze still feels real.

And here we go over some, some food costs.

Right?

Fresh foods.

Fruits and vegetables from January 2020 to now are up 15%.

Okay.

Milk from January 2020 to now is up 22%.

Rice, pasta, cornmeal, up 22%.

Bread up 33%.

Chicken, Bach Bok, 33%.

Now we get into the big numbers.

Eggs, 36%.

How are eggs up so much but chicken not.

It's an argument.

It's an argument.

You know, coffee is up 50%.

I blame nickel over at Starbucks.

Why, bro?

I used to get a coffee for $6.75.

It was my cold brew.

Yeah, yeah.

It now cost me 9.50.

You'?

No, no.

950.

It went up originally to like seven something.

Now it's nine something.

Yeah, it's wild beef and ve up 59%.

You got to get one of those like fancy Breville machines at the house.

Those.

I have one.

Yeah.

You still opt to go to Starbucks?

Yeah, just you like somebody else making it for you?

No, no, let's not, let's not, let's not.

Let's not go there.

I have a bond.

It's like Cheers.

I want to go where everybody.

Okay, yeah, you.

So they know your name when you go.

Like everybody.

3% of our listeners that actually know that show.

Yeah, I know everybody there.

Plus I go in the morning, I charge the truck for a couple minutes before I come in the office.

Oh, okay.

Okay.

So it's a ritual.

Yeah.

It's not a good excuse.

It's just I'm using it.

You know what it is?

If Caleb Hammer were here, he'd be like, what the wrong with you?

You know what it is?

I know what it is.

When you had the Jeep, you used to go to the gas station.

You'd pick yourself up an energy drink on the way to come in, and so now you need a different morning ritual.

So that's your thing now.

No, I'd always buy the industry the.

The energy drinks in bulk and then

have them at home in the fridge just ready to go.

Oh, I got.

Yeah, it's.

You're locked in.

It's a problem.

I'm not.

I'm not saying that it's not a problem.

So the bottom of this chart shows beef and ve from January 2020 to January 2026 has gone up 59%.

That's wild.

I know.

I have it here too.

That ground beef is up 16% year over year.

And I think that.

So Chicken also up 33%.

But again, these numbers are.

Are pretty big.

And this is going to parlay into our next conversation because I think the answer is pretty obvious when you look at those numbers, unfortunately.

Okay.

Your wholesale costs have still have incrementally improved.

This time if you're somebody selling a product at a restaurant.

Okay.

But for me, you and me buying it directly from a grocery store, it's not wildly cheaper now to eat at home compared to what it used to be.

True.

Right.

So DoorDash just posted its biggest jump in orders with a 32% year over year pop to 903 million orders.

Those are orders.

Orders, yeah.

903 million orders.

I don't have the data to prove this conclusively, but I have a theory.

Okay, let me hear the theory.

What you got?

We know.

Read it off.

No, I'll read it for you.

Okay.

You can look at the chart.

We know that Americans are working multiple jobs more now than ever before.

We know that single income households used to be enough, then dual income households were kind of the standard.

And now we have this.

More jobs are.

More Americans are working two jobs than ever before.

And because of that, you have three income households in a lot of, you know, you have a job, your spouse has a job, then there's a side.

Somebody has a side.

Hustle.

Right, Right.

And you get exhausted.

Or if not, you got your job, your spouse Is a job.

Both of you working overtime.

Right.

And when I posted this, a lot of people went to the overtime route.

I didn't expect that many to go overtime.

That's the route.

Okay.

They go.

One hour of overtime pays for my meal.

And I'm so exhausted when I get home.

Plus, I'm usually working two or three hours of overt that it just makes sense that I spend that on me to not have to cook.

Yeah.

Because you got to do tens of other things.

Right.

So.

And then I believe that inflation for groceries like we just talked about has made the cost of eating out for some of the quality meats.

And so my wife and I do this from time to time.

My wife and I will go.

She'll go to the grocery store.

She loves to cook.

Right.

That's kind of a thing.

She'll.

She'll go to the grocery store.

She'll buy a good cut of meat.

Well, that used to be cheaper than eating out, like.

And specifically, I'll use ribeyes.

I love the Hawaiian ribeye at Houston's.

Yes.

Right.

Sensational.

We gotta go.

It's been a while.

Yeah, that's a problem.

We gotta fix that.

We'll go.

We gotta bring rigid to.

I've been promising for a long time, just haven't done it.

But anyway, I love ribeye in general.

Right.

Going to Houston's, buying the ribeye is probably a dollar or two difference than just buying the ribeye and the rest of the accoutrement and making it at home.

And then just think about the time that you're also right.

And the scripting, cleaning, getting it, you know.

Yeah.

And the stress of making the meal as opposed to cleaning.

Yeah.

Cleaning up afterward.

I mean, it's not.

It's not exactly what I would call simple.

So I believe these things are proving out to where most Americans are going.

I'm just.

I'm just not going to do it.

So of course, I had to dive down into the inflation chart since this one's since November 2019, as opposed to 2020.

Okay.

But I wanted to.

I wanted to look at this because I think this is a good visual, Right.

Where inflation has risen the Most in the US this only goes through 2025, so it doesn't go all the way through to January.

So it's a little bit of a shift from the previous data.

New cars and trucks up 22.6%.

Milk, 24.1%.

All items less food and energy are up 24.7%.

So we were wrong.

We said the true cost of most consumers was about 20% inflation.

Yeah.

It's close to 25%.

Closer to 25.

And what, what needs to be remembered when looking at charts like this is that the, when, when you get headline figures saying inflation is dropping, right?

No, no, the rate of which inflation is increasing is dropping.

Inflation is still compounding on its, on its prior year, year over year over year.

That's right.

I haven't seen a deflationary economy yet.

Yeah.

And I mean, in a healthy economy, you shouldn't, you shouldn't, you shouldn't want one.

Right.

You typically want something realistic, a realistic 2%.

Right.

Now, what you're seeing, even though you're getting a headline figure of 2.4%, the real rate of inflation is probably closer to 6%.

I know the trolls will come for me on this one, but I'm going to say it anyway.

Does it make sense that the economy should grow every single year?

The idea is the economy grows at 2% GDP every single year.

And the economy grows and grows and grows and grows and grows and grows.

Right.

We know the power of compound interest.

You're.

And I say, I know where you're going with this too.

It's kind of like the same problem that we create for ourselves with, you know, publicly traded companies.

You expect, you know, quarter after quarter growth, growth, revenue growth, earnings growth.

Right.

Over and over.

And now you've created this expectation when you don't, oh, what's the problem?

You see Carvanas trading today?

No.

Carvana stock took like a 1520 dive during trading hours because they said that they weren't going to hit their, their targets.

Yeah.

They were going to fall short of expectations.

Yeah.

Because they quoted me low on my Jeep.

That's what they do.

Yeah.

But look, that market's already seen some subprime challenges and, and them saying, hey.

And it wasn't even that big of a miss.

It wasn't a huge earnings miss.

It was just, you know, mild.

Yeah.

But they took a huge dive.

The market lost its mind.

Oh my God.

It's a problem.

And it's like, okay, well guys, like, why do we expect companies, no matter what happens, to always improve?

Why do we expect the economy, no matter what happens, to always improve?

It just seems like a perpetual cycle that's going to go the wrong way.

You would think, you would think a company like Carvana, though, given the times that we're in, more people would start leaning towards buying used cars versus buying newer cars.

I, I think there's a massive amount of denial there, to be honest with you.

If you like people.

People don't want to.

They care too much about how they're perceived.

No, I just think that most people are.

Oh, man, it's gonna be tough.

Okay, so I've never.

I've never been the guy.

I understand.

I have a lot, a lot of friends that care about having a brand new car and keeping up with the Joneses.

I've never been one to care much about, like, what I drive.

And I. I know I say that with someone who, like, bought a brand new Jeep and that was lifted with nice tires on it.

Right.

But it was a relatively cheaper car compared to.

Yeah.

You know, others that I know.

But I'm like, nothing to me.

My.

One of my favorite things to do now when I drive is a spot, a really old car, and I point out to my wife and I.

My go to line now is, man, how long has that guy not had a car payment?

Yeah, like, how cool is that?

That guy hasn't had a car payment in so long.

Yeah, no, I get it.

And I. I drive the Rivian, and I love.

I love the truck.

It's amazing.

I waited two years for it on the waitlist, But I hear your point.

We need to make that sexy again.

What?

Not having a car payment.

It's sexy.

Oh, my God.

I didn't have a car payment until the Rivian.

And, you know, I think I was paying 1100amonth for it while I had the payment.

And that was.

That was a lot.

Yeah.

But then I hear how much other people are paying for cars, and I'm like, I guess it wasn't a lot.

But then I also have my mortgage at 1700amonth, which is.

I think the average payment for a new car now is probably somewhere like 7, 50, $800 a month.

It's.

Yeah, it's.

It's kind of nuts.

That's a lot.

But around here in Orange county, man, a lot of these people I know, kids rolling around in $2,000 a month car payments.

You're just like, what are you doing

living at home, bro?

But it goes back to the same thing that we just talked about earlier, where people feel like this, and this is the thing that was gonna get me in trouble, and I knew it was going to and I'm just gonna do it anyway, is that people feel like this sense of, like, look like I'm working my ass off.

I need to win.

Yeah.

I need.

I need the dopamine if I'm gonna go to work every day.

And leave work every single day, then I'm gonna enjoy it while I'm doing that.

Right.

And it's a, It's a really easy thing to justify.

It's a tough sell.

It's a tough sell for someone who's maybe just starting out in their career.

Look, we, we know, like, the numbers on how, how long people are waiting to even, like, get married and start a family or getting pushed out later and later.

So if they're younger professionals and they're working, like, and they have careers.

Right.

Like, it's a tough sell to them.

Hey, man, continue driving that old car for a little while and invest that money.

Right?

You'll, you'll thank me later.

They're like, man, but I've been killing myself day and night trying to, Trying to get by.

I deserve this.

Well, to your point, from 2019 in January to now, car insurance is up 56.1%.

Yikes.

Piped gas, utility 48.8.

Car maintenance and repair 48.8%.

Your coffee cost you 46.1%.

Hence my six.

$6 coffee.

675 becoming almost $10.

Right.

Electricity, 40.4%.

That's the biggest outlier.

Meat and poultry and fish, 38.1%.

Dining out 34.8%.

So there you go.

Right.

Let's pause on that number.

If dining out has gone 34.8% up.

But elect.

But meat, poultry, and fish have gone 38.1% up, you've closed the gap on what it costs to buy that versus eating out.

Yeah, Right.

Because otherwise the inflation.

Dining out would gone up a little more than just the cost of the meat.

Right, Right.

So, yeah, I think that's what you're seeing there.

And then it goes through a lot of the same stuff that we've seen before.

But this chart says the.

Tells a story.

This is spending on food away from the home surpassing spending on food at home.

Look at that.

Yeah.

It shows you right here in the chart.

It used to be in the 1950s, that about.

Call it 28% of Americans were eating food away from the home, and about 72 were eating food at home.

Yeah.

And that was most people most of the time.

Yeah.

Ate food at home.

Yeah.

Now, however, you've gotten this inflection point where it looks like more people are now eating outside of the home.

A little bit above, call it 50%, and a little bit about under 50% are eating food at home.

And this has never happened before, where it just makes more sense for people to eat outside the house than it does into the house.

Now, I still prefer the quality of food when you make it for yourself because you know what's in it.

Yeah, yeah.

But this, I'll be honest, I start looking at my wife at the end of the night and I go, she's exhausted.

I'd rather talk to my wife and spend some time with her than I would have her cooking.

Yes, right.

You know, that sounds terrible, but.

Or even have yourself get in there and cook because you'd rather be spending time with her or, you know, your kids.

Yeah.

And you can't cook and talk to your kids and, you know, like, engage them.

Give them the unavited.

Right.

So you wind up going like, I, you know, I don't know.

I know.

And of course, the problems don't stop there.

US pending home sales hit a record low despite falling mortgage rates.

And this has been what has caught me up in a lot of troll drama.

You're in a lot of drama these days.

I mean, they're coming after you.

I'm in these streets, bro.

Yeah, they know you're in the streets.

That's why they're poking the bear.

See, this is what happens when you post Kendrick lamar memes on LinkedIn.

I just don't think people get it.

This guy, this guy's not professional.

We can get him sick them.

Like, do you not know what squabble up means, man?

Chief Economist Lawrence Yoon.

Still around, huh?

Still slanging it.

Still slanging.

I gotta be honest, like, I think he's heavily medicated,

bro.

He's another guy that's.

That's selling the narrative, bro.

He is selling the narrative hard, right?

Yeah, yeah.

Hard.

Selling the narrative.

And I'm like, lawrence, yeah, do me a favor, bro.

Just throw me a surprise every once in a while.

Say something that isn't in your monetary interest.

Right.

Just once.

Yeah.

You know, he's got to sell people the dream.

He needs people to continue to renew every year.

He's like, I need, I need that money coming in.

I got that email myself not too long ago.

That's funny.

Improving affordability conditions have yet to induce more buying activity.

NAR Chief Economist, national association of Realtors Chief Economist Lawrence Yoon said in a statement, that's because the incremental change in rates after 15 plus years of artificial interest rate deflation is not meaningful enough.

That came from the higher standards.

Chief Economist.

Yeah.

Homes are too expensive and wages are too low.

Yes.

Supply is also an issue long term.

Bloomberg via Zero Hedge gave me this chart here, which I'm going to pull up.

Actually, I'm not going to pull up.

That's a lie because it's not on this screen.

Let's see if I can do that here.

Will it show all windows?

It does.

Yay.

Screenshot.

That's not the right one.

Okay, forget it.

That's the chart.

Yeah.

So this is a problem.

Right.

If you're having.

And so this is going to be an esoteric conversation that's going to piss a lot of people off.

Yes, supply matters long term.

Yes.

Supply and demand is fundamentally this, you know, relationship that bounces off one another.

I'm not going to tell you that it's not.

Yeah.

What I am going to tell you is the friction point for the last five years has not been supply of homes.

Well, supply has crept up over the

last several months in some markets and we're going to talk about that a little bit here.

But look, okay, just you and me, intimate setting.

Okay.

Podcast studio.

Late at night.

We're gonna light a candle.

Light a candle.

I had one lit earlier, but it started getting like that weird, like, allergy sensation going on.

Let's be honest about something here.

All right.

There are some statistical outliers.

Miami, Austin, people flooded into those markets for political reasons post pandemic, whatever.

Those markets had a lot of deliveries.

They had supply.

You want to use those for supply impacting things, fine.

But let's be real.

The majority of Americans have a different problem.

They can't afford the home.

Right.

And everything that comes with the home.

Right.

So if you put on this massive amount of supply into the market at today's pricing, it ain't gonna move the needle.

You could say, well, no, no, but supply out of the market will drop price and they'll be able to afford it.

Yeah.

But near term, here's what our Housing Affordability index says.

Okay.

This is not my opinion.

This is not saying.

This is just data.

Yeah.

Okay.

There's a couple of different ways this can play out near term to make housing more affordability more affordable.

You're not going to get supply to the markets fast.

It takes 12 to 18 months to build a property and to deliver it to the market.

Okay.

Yeah.

And they're also not going to flood the market with their own inventory because that, that doesn't do them any favors.

And there's a lot of wide, wide ranging opinions, and I use the word opinion very clearly on what the shortage actually is.

JPMorgan Chase just came out in their, in their articles and just said in their forecasting.

I posted on my LinkedIn profile, I posted on X and all the.

All the places you can get all my static stuff, they say there's somewhere about 1.2, 1.5 million homes shortage cross country.

A stark contrast to national association of Realtors, who say up to 6 to 7 million homes are short.

That's a lot.

Some people are saying 3 million.

There is no number to peg this because there is no clear way to define it.

Let me tell you why there's not a.

It could range.

It could range from 1 million to probably.

Someone's probably estimated 20 million.

Is supply important long term?

100%.

Do we have an affordability crisis?

Absolutely.

No question about it.

The most unaffordable home price market in history.

Do you need supply to solve that problem?

Yes.

But near term, you've got other issues.

Number one, we've already established wages have not kept up with inflation.

Okay?

Yes.

And if home prices have gone up in this time period, about 45, 48% and your wages haven't gone up that much, you've got a problem.

Not only.

Not only is that the problem too, what it costs to afford that mortgage payment now is making up a much higher percentage of everyone's total monthly gross income.

About 50%, which is.

Goes against every budget guideline out there.

Yeah.

Remember front and back in ratio for Fannie Freddie underwriting?

Yeah.

Back in ratio is 55%.

Max.

Yeah, Max.

And hold on, that's what they're willing to give you.

That's not what you should be aiming.

No, right.

I mean, something around 30% maybe.

Okay.

Right.

But you're like 50%.

That's crazy, man.

Like, so that's the def.

That's the definition of what people tell you is like, I have.

I have really close cousins that listen to the podcast.

Like, why would I go buy a home?

I don't want to be home.

I don't want to be home poor.

Yeah, right.

Like at.

So now that conversation is starting to hit, like, younger generations.

Right.

And that's scary for a lot of people because the.

The American dream on selling people, on wanting to buy a home to keep you locked in somewhere for 30 years.

Right.

And where they can make sure that they predict your every move.

Now it's starting to dwindle away and people are like, I'd rather enjoy my life and make and invest my money and have it grow elsewhere.

Yeah, that's right.

You know, and not have to deal with the headache of.

So these cousins hearing me like, man, you had a bathroom leak.

Yeah, I know.

What's going on?

And you got to pay for that.

You got to pay for this.

And they see all this.

Yeah, they said these issues, like, I mean, I live in a beautiful area that's maintained very well, and I have a one flat fee.

And that's it, bro.

I went to that new Irvine complex, but behind my house over here on the other side of the hill.

But you know where wild rivers used to be.

Who.

Who can hate on a property like that, bro?

They had, like, their own, like, cafe in the middle of the whole complex.

Massive complex.

And the cafe was like, imagine a Starbucks, but bigger and more like.

Because your residence in the area, you live there.

Yeah.

You go to this cafe, they have snacks, food, everything.

Coffee, ice cream, you name it.

And then just tables all around this huge place.

Everybody can just sit and hang out.

You guys are all residents.

You guys go use this.

Their pool area had, like, little Al in front of multiple pools, each one of the command.

Yeah.

There's three pools, literally all next to each other, right?

Yeah.

The little alves in the main pool next to cabanas.

It looks like a resort.

Yeah.

With the TVs, outdoor TVs everywhere.

Oh, yeah.

Oh, and they tell me, though, we're out here, we're barbecuing, and then the

next day they come out, Barbecues on both sides.

Yeah.

And next day they come out, it's clean.

Yeah, somebody cleaned it.

Somebody else did that.

Somebody else.

They didn't do it.

Scraping the grill.

Yeah.

Remember that black stuff getting on your white shirt?

Right?

You know what I'm talking about, man.

I remember.

I remember at my.

The previous house that we owned.

Yeah.

Also hard.

Wow.

Hold on.

Stop it.

He's a two household owner.

Wow.

Stop.

Stop.

Sign over, everybody.

Don't do this.

Don't do this.

At the last place there was.

There was one time where we actually had a gas leak into our own barbecue in the backyard.

And that caused me such a big headache.

They had to cut into the ground, get to the gas pipe.

Right.

Replace it.

It was.

It was a headache.

Was it your groundskeeper that noticed it, or did you notice it was walking around?

I was.

I was cooking and we turned.

We turned it off.

And I was like, you didn't have

your butler cooking for you?

I was like, man, I could still smell the gas.

This is.

This isn't good.

So you called your groundskeeper to fix it for.

You know, at that point, you got

to call the utility company.

They come out and go, you got a gasket.

You had your Butler, call the utility company.

No.

Butler.

So your groundskeeper.

No, I didn't have.

Jeff.

Jeffrey.

No, no, no.

Jeffrey.

Jeffrey.

All right, all right.

Well, inventory is heading in pocket.

Sorry.

It's healing in pockets.

Fifteen of the top 50 metros now have more active listings than January 2019.

But the national supply pipeline didn't improve in 2025.

As a matter of fact, starts were at 1.36 million, the lowest since 2019.

Housing starts.

So starts meaning new construction starting.

Yeah, they're breaking the ground, right?

They're actually going.

That means they've already got permits.

But permits are also permits down lowest since 2019.

1.42 million.

And completions.

Projects delivered to the market completed after.

Call it 12 to 18 months of construction.

Oh, they're not.

1.5 million down from 1.6 million in 2024.

Yeah, the permits.

Permits aren't down because they're just taking a long time to approve permits.

No, no one's submitting applications.

Well, it's because.

Look.

And so the housing supply shortage is still real, but markets are.

Are kind of ruining.

So here's a chart, right?

2019, building permits for new homes fell the lowest level since.

I wonder if you can.

Can I open it in this window?

I can't.

Damn it.

It's not gonna let me do it, is it?

See, this is why we need Rejeel here.

Rejil, it's your fault.

Yeah, blame you, Regil.

Actually, I could probably.

Hold on.

Let me go over here.

No, can't drag it over that way.

I tried.

See?

See, this.

This is Regill's fault.

Yeah, I blame Regil.

It's all good.

Can't trust this virgin dude, man.

All right, so here's a problem, right?

So you have.

You have the charts, fall.

Charts showing you that this is falling off to your point.

What.

What are.

If you're.

This is the part that buys me the supply and demand argument, too.

If you're a builder, you're a capitalist, man.

You're in this to make money.

Especially when you got a couple key players controlling this whole thing.

Lennar, Dr. Horton.

I mean, whole brothers.

That's it.

That's it.

There's a couple other.

There's like, you know, a couple other names, but largely, that's it, right?

And here's.

Here's the problem that bothers me is.

Let's just play this out logically.

If I deliver more supply to the market, right, Then I can't sell it for as much as I want to, so I can keep prices High.

By delivering less supply.

Yes.

So incentivize me to deliver you enough, quote, housing to not make this a problem.

Why would I do this?

Yeah.

Why would I hurt myself?

Right.

And right now, they're already hurting because they're selling off their current supply, which appears to, according to everybody else, is deficient.

Right.

But yet new homes are selling for less than existing homes.

After incentives.

Yeah.

Builder incentives.

And why can builders provide incentives?

Because they have the money where existing home sellers don't have the money to provide the incentives to buy down your rate and give you utilities.

Right, Sorry.

Give you appliances.

Right, Right.

So if this is happening, and we know that it is, this is documented.

Not my opinion.

Not Saeed's opinion.

Maybe we're Jill's opinion.

We can blame it on him.

He's not here.

Right.

But there's a fundamental disconnect.

So you're telling me these guys are already selling new homes for less than existing homes, and your solution to the affordability crisis is to somehow to miraculously convince these guys to build more homes and sell them for less money?

What?

What?

Yeah.

That doesn't make sense.

That's backwards.

So the only way this happens is you got to move some of those levers we kind of alluded to earlier.

Number one, home prices have to come down.

Okay.

Sorry.

They do.

Yeah.

Race got to come down.

Not saying it's got to be crash.

It's got to be correction.

I'm just saying it's got to come down.

Race got to come down.

In a static world, homes got to come down by about 35% of their value.

That's a big number by itself.

Or is that just one?

One variable.

One variable.

If homes just came down, that would make them affordable again.

Okay.

All right.

Variable number two, you could bring rates down by about a percent, but let's be honest, we're already at just a hair above 6%.

Now, that's not smart, let me tell you.

Feasible.

Let me tell you who's not in the business of having home Prices come down 35%.

Everybody.

Yeah.

No.

No one's going to willingly let that happen.

Right.

The problem is you get two classes of people who want this to happen.

Those who own homes and those who do not.

Yes.

Right.

And everybody else politically is advocating for which position they're in on that spectrum.

And guess who's part of the group that owns homes?

All the policymakers.

Yeah.

That's a lot.

It's messed up.

Can we just take a little sidebar here?

Yeah.

So I heard this conversation earlier today, it was a great opinion article from the Wall Street Journal that came out, which I didn't have a chance to fully read yet, where they basically said that the aging population of politicians, which are living longer because longevity is increasing, have had longer in the seat to advocate longer for their benefit.

And now we have a population of older demographic people who are unwilling to sacrifice so a younger demographic can come up behind them.

It's a real problem.

No, it's, it's, it's.

The next generation is, is getting hit the hardest in my, in my humble opinion.

Right.

They've had to, they've had to go through a lot.

We the peoples had to go through a lot.

And then now it's like you're not getting your fair shot.

Just, just to be clear.

And I have to say this because somebody will point it out.

The millennials, we are not the younger generation.

Yeah, dog, we are.

I know you hold on, I'm the millennial.

Hold on, you're not the millennials are the younger generation anymore either.

Nah, man, I know, I know, but

I don't be like, look, you 40.

No, no, I'm not.

That's a lie.

You 40 adjacent.

No, I know I look 40.

You 40, I might look 50, but

no, I'm a dynam.

Close to 40.

But you wear quarter zips and boat shoes willingly.

Yeah, that's 40.

Yeah, it's true.

Congratulations.

Yeah, there's.

So they're all, they're, they're all in the business of not having home prices come down.

Yeah, right.

And they're not going to let it.

They're, why would they?

Right, but a small percentage might happen on its own.

And what else needs to happen?

Rates need to come down and wages need to go up.

The problem is in a static environment, if you move that lever, it's almost 50%.

It's actually over 50, depending on how you look at it.

Wages need to come up to offset the affordability issues here, which that ain't gonna happen.

Look, corporate profits at our all time highs.

Yet somehow wages aren't matching that.

So if, if we're currently experiencing that as an economy, then, and wages aren't keeping up, then what's going to happen when we don't hit all time corporate highs?

Right.

Yeah, I mean that, that begs that.

That's a question for everyone to ask themselves.

So you have to remove that possibility.

Sam Altman comes out.

Yeah.

You know that AI thing we were talking about, we may have overstated it

a little bit just a tad.

Turns out it just sucks up a lot of power.

And it's basically Google, man.

I was.

I was watching one of the financial guys online that I like to listen to and what?

And they brought up.

They brought up.

There he was having a conversation about other people's numbers.

No, no, just.

I'm plugged in.

I got.

I got to see what all the content creators are doing to see, like.

You really do do that, though.

You watch shows you hate, which is weird.

Yeah.

I got to see.

Why is this guy getting traction?

Why are we not getting traction?

Talking to you?

Tvpn.

I don't get it.

What's the job?

I don't get it.

There is no better argument for an industry plant than tvpn.

Go look them up.

Shout out to Jordy and those guys.

Good for you.

But I don't get it.

Like.

Like they say, get your bag, bro.

Hey, man, I'm not mad at a single thing they're doing.

I'm cool with somebody planting me, too.

Plant me.

I just don't understand.

Someone call me.

Give me a call.

I bet you my price is way cheaper.

Yeah, you paid them 5 million.

We'll take two easy, right?

Stop.

Yeah, we're.

Jill, you're fired.

Hold on.

I forgot where we were going with this.

Yeah, it's because you're so.

Oh, the content creators.

Yeah.

And he was talking about, look, moving forward.

Look at some point in the future, if not later this year, into next year, they're going to cut rates.

Okay.

And when they do, not all.

Not every tech company is going to benefit off of this.

The tailwind of rate cuts is going to help some stocks.

It's definitely going to help like precious metals.

Right.

Because they've already experienced tailwinds from other things.

Right.

But you got to be careful with the companies that you're investing into.

Are they going to be able to outstand the benefit of AI?

You look at a company like.

What they brought up was duolingo, bro.

Done.

Game over.

There's no need for you.

Why would I pay a month?

I'll just ask Chat that I already pay a monthly subscription for.

Build me out, of course.

No, no, no, no, no, no, no, no.

You do that.

Yeah.

I could wear my meta glasses right now.

Even that.

And look at you across the room.

Not.

I don't have to hear you done, bro.

You're done.

And it will tell me what you're saying in this variant that just rolled out today.

The variant's out today.

I can see you talking across the room.

I can look at you with my Meta display glasses.

And it will give you two options.

I can either hear what it's saying in real time.

Yep.

Or it'll give me a transcript of what you're saying on the screen in front of me that you can't see in real time.

Yeah.

No matter what language you're speaking.

Right.

So for everybody to go like, oh my God, Duolingo is amazing.

Duolingo is dead.

Done.

Done.

And that's the problem is I, you know, that's in my search feed right now.

So we're going to cover the latter, latter quarter of the show a little bit about AI because I, I was up real.

I have not been sleeping well.

So every night I wake up freaking out that I'm gonna go broke.

And I'm freaking out about AI and technology.

And my late night sessions from like 2am ish to like 6am have been all AI driven, like AI agents and bots and kind of the state of affairs and going down the path of

what people are doing.

Buying these Mac Mac minis.

Yeah.

And we, I'm going to do it too, but I'm going to explain how I don't.

I think this is a short term phase and I think where it goes next is even more kind of scary.

But I have the map of where this goes and I also have some to call out because, you know, that's what we do.

That's what we do.

Yeah.

We have to.

So.

But let's get back to a little bit of this before we get too far down that path.

So Lennar, one of the largest home buildings in the US Right.

Has been trying to maintain its sales volume by piling on incentives.

We talked about that.

Cutting prices and giving up substantial part of its big fat pandemic era profit margins and building at lower costs.

Right.

As a result, the average price of homes that is sold has plunged as of Q1 in 2026.

It guided the average price down further to a range of 365,000, down to 375,000 net of incentives.

Right.

So 365 to 375 net of incentives, depending on how many incentives you got.

Right.

The Midpoint was about 370.

So the average of the two of them.

Right.

Would be the lowest sale price since Q1 of 2017, down by 25% from the peak in Q3 of 2022.

That's nothing.

Listen, that's not nothing.

That's a lot.

That's a lot for these home builders.

I, I mean there, there 491 minus 370.

That's $121,000.

It's a lot, right?

A lot.

They're taking $121,000 L 25%.

Right.

But they're masking it because they're doing it under this incentives that keep that artificially propped up.

Yeah, you look at the charts.

Look at the charts.

This chart, Lenore, average price per home sold in Q1.

Let's see.

It goes straight down almost.

I mean we're talking like a. Yeah, I mean that's, that's not good.

That looks like Mount Everest.

That's.

That's rough.

Hey, draw me a picture of mine.

Everest.

Here you go, dad.

Boom.

Yeah.

How you answer.

And how are you answering this on earnings calls?

Well, I'll tell you, not answering with this is complete new single family houses for sale in the thousands.

Right.

The opposite direction chart.

You had a massive amount of deliveries to homes in around 2007, 2008.

Because all the supply hit the market.

Okay.

Because all the foreclosures and everything else, there's always property.

And they've learned from that mistake now, right?

They did.

Yeah.

And so now they control the supply.

And if you look here from 2012, 2013, ish, they've controlled that inventory.

You saw some of it go down.

Delivery slowed down in 2022, but now you got complete new single family houses.

Which is why creeping back up.

Which is why in 2022 it peaked so high.

Right?

That's right.

Boom.

Bam.

And people love to go.

Well, Chris pro supply and demand.

No, man, here's the problem with the supply and demand argument that you learned in your Economics 101 class.

Okay.

Number one typically assumes static environment.

Supply, demand, that's the only two factors.

The problem is the credit world and loans.

Right.

It's a lot harder.

What were governmental regulations?

Rates.

Right.

What were rates in 21?

There's rates, there's salaries, there's inflation.

Yeah.

There's a whole government Dodd Frank reform act that we have to now validate the somebody's ability to repay in order to get a loan.

There is no stated income.

The friction to getting your ability to buy a property, particularly for first time home buyers, is a lot higher than just going supply and demand.

Yeah, yeah.

Right.

Not saying that supply is not a lever here.

It is a lever.

It is important.

It is part of the problem.

Right.

But the biggest part of the problem near term is that houses are too expensive.

And rates after 15 plus years of artificial interest rate deflation have caused a shock a Shock in payment that we have not recovered from.

Yeah.

And someone's going to say, well, I learned this and I learned that.

Okay, fuck what you learned, dude.

Okay, you want to know why this is quote, unprecedented, end quote.

Yeah.

That means it hasn't happened before.

And for all you out there in the fan section, way out in the back who love to talk trash and throw stones behind anonymous accounts and social media, I'm talking to all you guys on threads right now.

You don't know who I'm talking about?

You.

Not you.

You were just speculating like everybody else.

Yeah.

I do not have an affordability crisis solution.

Say he does not have affordability crisis solution.

But every time you state the facts and you state that maybe supply isn't the biggest constraint, people lose their minds.

Yeah.

How much of like a neighborhood that has.

Obviously we know locations, everything.

Right.

They teach you that in Real Estate 101?

I mean, it's a hyper regional prop.

Yeah, right.

But how much of, how much of that would you give credence to for like school zones?

Oh, it's big.

Probably a big part, right?

Well, it depends on ultra high net worth communities.

It's less of a requirement.

It's less of like a factor for them.

Yeah.

If you're talking private schools demographic there.

Right.

For suburban infill 100.

So much so that MLS adds school and school district to its listings.

Oh, yeah.

It literally pops up and it tells you like the top three schools, like, you know, for elementary, I think, middle school and even high school.

They'll have them all listed there.

Did I tell you that we're going to Sunset?

The Black Crown Realty app.

No.

Yeah, just.

People don't want another app, man.

They don't want it.

People want as little friction as possible.

Let's be honest, everybody's going on Zillow and Redfin anyway.

It makes no sense to have your own ecosystem to talk to people.

What people really want when they have a real estate agent is they want to just text you and talk to you.

Right, right, right.

They don't want to go through an app to get to you.

And they're sending you the Zillow link or the Redfin link.

And.

Yes.

It just.

I want to see this house.

We've done it for six years now.

Yeah.

Built the app, had on the app stores, deployed it.

It was great.

Yeah, it was great.

I remember seeing it.

It worked just like all the other ones.

Yeah.

And we could always vibe code a new one if we wanted to, but it just, it just seemed Like a friction point.

Yeah.

So we're going to stunted that.

Yeah.

Yeah.

Okay.

We could spin it off into a higher standard one.

Yeah, but I want to vibe code.

Find a way to.

I want to vibe code our version of it.

I got some ideas.

But even then, that's another friction point.

Love vibe coding.

I love just the term.

It's just.

It just means you're talking to AI

Such a vibe colloquially.

You're just using regular English saying.

Hey, you're becoming bros. You're becoming bros with your AI tool.

Yeah, right.

We're gonna bro.

Bro it out.

Speaking of bro, just bringing up the school thing, right?

If.

If suburban areas aren't.

Aren't able to.

It doesn't make sense for them to move out.

I'm telling you, I'm already seeing this in my.

In the area that I live in, right?

There are three main elementary schools and

we carved out the ultra high net worth.

No, this is not ultra high network.

Carve that out.

No, is real ground level suburban areas.

Just a little rule.

I live by site.

If you actually have a name for your property.

What's my name?

What's the name of my property?

Chateau Miraval or whatever you call.

I don't like.

I don't know what you call it.

Chateau is wild.

So like I'm.

We're already seeing this and it's literally, you know, in front of city council, they're talking about it.

They're having.

They're being forced to have to decide over the next two years which of the three elementary schools they're going to shut down because enrollment is down.

Right.

And the.

And this is an area where the elementary schools are all ranked nines and tens.

I don't ever showed you this.

This is gonna really bother you.

So you know how like Brad Pitt and Angelina Jolie are fighting over their.

Their.

Everything.

They have this property in Chateau Miraval in.

In France.

It's their.

It's their winery thing.

Okay.

This is Brad Pitt's recording studio inside the Chateau Miraval.

He's got a recording studio for what?

Like his voiceovers?

I don't understand.

What is he doing?

What does he need a recording studio for?

Bro, what are we talking about?

Recording Experience.

Miraval Experience Production house.

This is.

This.

This is good.

This is going to make you hate where we work.

Why?

No, ours is amazing.

Look at this.

You can film score there.

Immersive sound production.

E mixing everything.

Everything is Apple.

He's got Boost and everything else.

This is.

Use it.

What is he using this for, bro?

You have.

You've not.

This is going to blow your mind.

Just wait.

I hope the pictures are still here o the art.

What is he doing?

Look at this.

Look at this.

What is this?

This is like something Dr. Dre would be working on, bro.

It looks like out of, like if an Apple store had their own recording studio.

Yeah, they actually.

They actually do in Los Angeles.

This looks like something.

Yeah.

Look at this.

Jimmy Iovine would be like rocking out in.

And the guy, the guy who works there is like, he's like the version of it.

Look at this place.

This is in Brad.

No wonder why he didn't want to give to Angelina Jolie.

Yeah, this is.

This is.

I wouldn't want to give that to her either.

This is his man cave.

This is so badass.

Yeah, Come on, right?

They gotta find it.

They gotta find a time to where they can reach reserve and go and split time.

This dude's wearing leather thigh high boots with a suit.

I've never seen that before.

You're a straight gangster.

Look at this guy.

Wow.

The visionary Damien Quintard turns sound into architecture.

Blending emotion, design and lights in the hills of Provence.

I could never.

I could never own a place with that much white in it.

I would just.

I would hate myself if I ever got.

Look how dope this place is.

Is.

Yeah.

Look at this.

I love the exposed speakers.

Those are so dope.

Dang.

With Brad Pitt, he reimagines Miraval.

Not renovation, but a rebirth of creative freedom.

Mind you, on the outside, this looks like a French castle.

Meanwhile.

Meanwhile, that.

That chair is probably worth everything.

More than everything in the studio.

Come on, man.

The dude with thigh high boots on with a suit is.

Is touching flowers.

I don't understand.

Who is that guy, though?

He's the guy who runs the studio.

He runs the studio?

Yeah, bro.

He just stays there.

You know how you have like your groundskeeper who stays on like that property on your house, like on the grounds?

Yeah, that guy.

Yeah.

He has an audio groundskeeper.

His entire job is to stay on the grounds and produce audio and work with a talent there.

Dang.

What a stud.

What a job.

What a job.

What do you do?

Oh, Brad Pitt found me.

I was wearing these thigh high boots and we decided we just go collab on some audio projects.

Look at this.

Look, look at this.

This is insane.

This is so cool, man.

Look at Bradford.

I'm not gonna play the audio because it's gonna piss everybody off.

Look at this.

Why is he so cool?

He's so cool.

Look, he's laughing.

He's like, I'm so rich.

I'm so rich.

This bothers me.

Oh, man.

Back to our regular programming.

There are 15 markets, right?

15 of the nation's 50 largest metros that are now below pandemic era highs.

And we've seen some interesting transitions.

Yeah.

So in January 2026, Memphis, Tennessee metro area had 38% more active homes for sale than in January of 2019.

A year earlier, in January 2025, it had 21 more active listings than in January of 2019.

So you're seeing a pretty big pickup of, of listings and active supply coming to markets.

And I would argue that some of these areas, like for example, Arizona had some pret deliveries.

You know, there's Dallas, Fort Worth here.

But you're seeing corrections now.

There's also some interesting studies that show the average square foot across the country on the federal national average scale is coming down, saying that home values effectively are coming down.

And what they're looking at.

It was a very interesting study.

They looked at the sold price net of incentives.

Yes.

Because you got to.

Because the home builder plane.

Hide the sausage.

Right, right.

You do that and the average home price is clearly coming out.

You can't take 25% haircut on new home homes.

Right, right, right, right.

So you take that and you include that the average home price across property across countries.

Now, there are some areas, Miami, Austin, that are more impacted than other places like Los Angeles.

If you go to the bottoms list here, you know, Hartford, West Hartford, East Hartford, Connecticut, Chicago, New York, New Jersey.

So these are, these are areas that are struggling because they're losing supply.

Yeah.

And I think it's, I think it's important to call out like what those incentives are because it, it tells you point blank that this is not just a supply issue because some of those incentives are buying down your rate.

That's right.

That's right.

That.

Because again, it's multiple cocktails.

So that shows you it's not just a supply issue.

People cannot afford it.

We have to buy down their rate.

Yeah, it's.

I like to call it rate nepotism.

Nepotism.

Nepotism, yeah.

All right, so I know this is an impressing episode, but let's make it even more depressing.

The total auto debt is at a record $1.67 trillion thanks to higher vehicle prices.

Subprime auto loans make up about 14 or 234 billion of total auto loans.

That just means auto loans to people

with not as great credit, unsavory credit.

Yeah.

Yeah, I think the score is like 660 for this example.

We'll double check it.

During the 2008 financial crisis, the 60 plus day delinquency rate on US subprime auto loans was as high as 5%.

Today it is an all time high of 6.9%.

So we covered early in the show inside pointed out eloquently, there's lots of people with these nice cars rolling around.

What's going on?

Well, they can't afford them site.

Yeah, that's the long story short.

When we were hearing stories back in the day that like kids were splitting car payments up.

Yeah.

Social media influencers, a lot of those dudes are losing the cars too, which is sad.

Yeah.

So if you look here, the yellow line is the subprime auto line.

It's all up and down.

It was as low as like below 2%.

It's at some point in time, but it's very sporadic, very up and down.

It's floated above 6% during the height of the great financial crisis 2018, 2008, but it's certainly at the highest it's ever been now.

So subprime auto debt at the highest default rates it's ever been at.

90 day serious delinquencies.

And this is, this matters, right?

I mean it goes, it should go without saying, but if you're gonna experience like delinquencies like there's clearly these individuals are delinquent on other things too.

Because the LA one, the two last things you're going to probably be delinquent on is like where you're living at and what you drive to work.

That's right, you need those things.

So if you're experiencing delinquencies here, you're probably experiencing delinquencies, if not complete defaults elsewhere.

Yep.

And then meanwhile you've got Prime.

Prime acting like prime does.

And this kind of goes in line with the analog people's homes that we have less home defaults than ever.

So seriously, not so fun.

So let's end it on a positive note, shall we?

Let's do positivity.

The end of the world.

The new World order.

As Ray Dalio says, end of the

world, as you know.

Did you read that article?

Your boy Ray Dalio's starting to sound like Dr. Doom.

Well, he's certainly a little grim on the world and he said the new world order is breaking down and that he, he published one of the chapters from his book Principles which talked about the world order.

It's a fascinating read.

I honestly recommend everyone to go and read it.

Because look, if there's one thing, if there's one thing that Ray Dalio is very good at is pattern recognition.

Okay?

I mean, this guy built probably the greatest hedge fund of all time.

Clearwater and Associates.

No, Bridgewater.

Bridgewater.

That was a joke that I missed.

I was like, where'd it go?

Right.

Bad.

And so this guy recognizes patterns and he's clearly seeing a pattern here.

And first of all, he's been right on a lot of, on a lot of the things that already that it's led up to currently.

You know what's funny is there's gonna be some troll inevitably who goes, ray Dalio sucks.

Let me tell you why.

You're like, oh, because you're a billionaire, right?

Yeah, yeah.

You're a billionaire that's been able to profit off of the pattern recognition.

But.

And it's not to say that, look, he might be wrong only because of timing.

It is going to happen just because cycles do happen.

Yeah.

And it certainly appears that we are in the midst of a slow moving cycle now for sure.

But I think that the element of AI has been a, an unprecedented, yet again twist to what would otherwise be a normalized cycle after a prolonged period of interest rate deflation and prosperity for, you know, decades when it really shouldn't have lasted that long.

I think that what he's saying has some value.

I think that what he effectively now boil it down is that the United States has been a world power superpower for a very long period of time.

But superpowers come and go.

We like to think of ourselves as king of the hill, and we've been that for about 100 years.

But London, England was the center of the world for a long period of time.

And England was the superpower.

Right.

The world reserve currency.

Yeah.

And you had a lot of changes that took place over the last hundred years to pivot from that.

Ray Dalio is essentially suggesting that the United States is pivoting away from the superpower status and that other players may

overtake us and not pivoting willingly.

The people, other countries are moving away.

No superpower ever pivots willingly.

Yeah, it's moved away from them.

Yeah, yeah, yeah.

You know, and this is just a natural progression over time.

And obviously they're gonna do everything they can to hold on to it for as long as they can and try to reset whatever they can reset.

Right.

And create whatever kind of conflict that they can create in order to, you know, go the distance.

But it is inevitable at some point in time.

And I'm not saying it's going to happen.

Radio saying we're in the midst of it, it's in, it's in a three year cycle, it's going to happen.

Right?

Yeah.

And others would say maybe, maybe it'll take a little bit longer than that, who knows?

But it is inevitable.

Should we do the AI thing now?

We have to do the AI thing.

So I could not sleep over the course of the last couple days and I went down this path and I've been going back and forth on do I want to build a Claude bot for the studio and have it, you know, as our kind of studio assistant,

24 hours a day for the listeners that haven't gone down the deep rabbit hole that you have.

Maybe help them understand what, what having a bot or agent could do for.

Yeah, right.

I've got a couple ways I'm going to water down, make it very colloquial and simple because I think it's easier

that way to a lot of people who don't know.

They just think like you can create a bot to run your whole business.

Yeah, not really.

Yeah, I mean, at some point, sure, but not now.

And we'll explain why here in a little bit.

But let's just set the premise for everything.

The originally AI started out as something known as a NI or narrow AI.

Right.

Systems that do specific things.

Well, speech recognition recommendations, vision models, kind of like a normalized model that you saw from a lot of websites that were deployed.

Right.

Like somebody has some proprietary technology which allowed them to do stuff.

Duolingo, for example.

Right.

You use a lot of data to drive some of these decisions, but it wasn't really reasoning or thinking, it was just a model.

And then we got LLMs, which came about a couple of years ago.

About a year and a half, two years ago.

Right.

We all know OpenAI, we all know Claude, we all know anthropics products and, and Those are the two biggest models and there's some crossovers.

79ish percent of the people who use one model use both.

Yeah.

I'm one of them.

Now this is where things gonna get really interesting really quickly.

Because LLMs are broad language and reasoning capability, but not inherently autonomous or grounded.

Right.

They don't work on their own.

You gotta go to it, you gotta explain the facts.

Right.

It's gonna give you answers.

Yeah.

And the better prompt you give it, it'll probably get a better answer.

That's right.

And it does its best to remember some of your conversations, but you Kind of gotta describe every single time you have an interaction with it, what you're planning to do.

And you find there's a lot of, I like to call them hallucinations and that it'll respond back to you sometimes and you're like, what in the actual shit, did somebody, Somebody fuck with me?

Yeah, yeah, yeah, the hallucinations are there.

Right.

Well, we've now pivoted to agentic AI and I want to, I want to give a little bit of backstory about how this happened.

Agentic.

Agentic.

Agent based AI.

And that's what Claudebot, aka OpenClaw is.

And I'll explain why it's aka as well.

So a guy, okay, who now works for OpenAI, he was going on vacation and he wanted to have a way to talk to his AI remotely from his phone.

So he built, over the course of, I want to say a couple months, an agent on a computer in his home that he could message over iMessage.

He used WhatsApp to get it to do things for him.

And the reason why that was superior for him than use something like OpenAI, ChatGPT or Claude was that he didn't have to re explain to the model.

It knew him and knew what he wanted.

And he started to see some really interesting results where it started to do things on its own because it had a cached repository of interactions with him and continued to feed into that repository.

So it knew what he wanted.

Right.

So we could just forward a request via messaging app to this always on, always plugged into the Internet AI agent that he had built that was running off of Claude.

Right.

Okay, so every AI model has several different levels, right?

There's for example, Sonnet, which is a cheaper model than their thinking model, which is a little more expensive.

And the price to you, the consumer, to use one of those models in each one of those queries goes up based on the complexity of the thinking model.

The basic models are cheap.

As a matter of fact, there's free models you can download right now.

Makes complete sense.

Okay.

And OpenAI has their variants of the models as well.

They all just rolled out the newest models, 4.6, I think.

So Claude originally sent a cease and desist letter to him saying you can't call any it claudebot because that's what he was calling it.

Open it.

So he changed the name to Open to something else.

And then right shortly after that, Sam Altman and OpenAI hires him and now it's Open Claw.

Nice.

Nice.

Right?

So, yeah, oh, it was Claude bot then it was Mult Bot, then it was Open Claw.

But it's all the same thing.

Okay.

Basically he released this free to the Internet and hundreds of thousands of people downloaded it.

And you can, you have a couple different options to deploy this, right?

You can deploy your agent into like a Mac Mini, which is the most popular localized variant of this.

But people are worried about security risks.

What are the security risks?

So if you plug it into your computer, you have an AI running your computer that can access all of your information.

Right?

So if you log into your imessage account, even on a separate computer, it can log into all your imessaging and it can do things like it'll go out to the Internet and people are giving it credit card access and limiting it to $100 a day and then it's charging what it wants and doing what it needs to do.

You, what you do is you download this thing and then you give it skills that are basically like, imagine like you add on whatever you want to your website via a plugin, right?

Or you download apps for your phone.

It's the same thing for your AI.

You download a skill like an app to your AI and then it has that skill.

Unbelievably cool, right?

Right.

But it's also taking its own life on whereas some of these AIs will download skills on its own.

Like for example one guy, and this has been all over the Internet, he left his computer on overnight, told the AI to finish up some tasks.

In the morning he got a call from a number he didn't recognize, it was his AI calling him and had learned to speak to him and downloaded its own language skill.

Right.

And it was talking to him on WhatsApp as opposed to text messaging him.

There's lots of incidents like that that are occurring and now people are freaking out because some of these models are costing a lot of money because they're pulling from the higher end models.

So now people have built in logic to the agentic AI where if you're just caching or keeping old repository information, looking into it, you run this local AI based software that I download and give you, which doesn't cost me anything because it's local to you.

If it's a simple task, you go out and use Sonnet from Claude for example, and if it's more complex tag, you use some of the more complex one.

And it's now cut cost of using this product down by 97%.

Ish.

Wow.

Right?

All this says that we're now in AI agentic AI workflow but this all came from a dude three months who wanted to go on vacation on his own.

He will tell you he vibe coded this.

It wasn't like he was a coder.

Like, he got into it.

He vibe coded it.

He just spoke to AI to code this thing.

He's not a software engineer.

He's a smart guy.

He's built stuff.

He's an engineer by trade.

But he vibe coded it.

Okay, Right.

So of course my conspiracy theory hat goes on.

Pull tinfoil, slap it off, three o' clock in the morning.

And I'm like, wait a minute.

You mean to tell me that NASA and Google have a joint adventure on quantum computing?

Right, right, right.

You mean to tell me, which is

supposed to be far superior, right, that

Apple's going like, nah, dog, we ain't gonna touch this.

We're not involved.

Yeah.

You mean to tell me that Microsoft and everybody else who've got all, Bro, we know, we know that some of these companies have applied for nuclear power permits and are trying to buy nuclear power plants to power quantum computing.

Yes.

We know the single biggest restraint on AI's growth has been its ability to provide compute, which is power.

And if we have the access to

do this, if one dude in three months can build the closest thing we've ever built to actual AGI, which is far away from it, but still that.

Still close to we were built.

You're telling me Google doesn't have this already?

Right, right.

And I feel like the reason why some of this is, it's getting out now because they have to dispel some of the fear and just allow it to, allow it to sit in with everyone, to be like, no, there's good in this.

You have, you have to start accepting this.

Oh, yeah, this, this is.

I, I wholeheartedly believe they have AGI.

They're there and they're like, we tell the world we have this, they're already freaking about losing their jobs.

Right.

If we tell the world we have

this, they're gonna freak out about survival.

Like, tell them the aliens are real.

Barack, get out there and tell them the alien.

Right?

And Barack goes out and goes, aliens are real.

Yeah.

I've never seen one that.

But then they don't keep them to Area 51.

And then somebody will come on, be like, that was classified.

Yeah.

And then Trump, because on Air Force One is, ah, he should not be saying that.

That's classified.

Yeah, he should not have said that.

Some people do believe that.

Some people do believe that.

Right, right.

And then I'm Like I'm going like this, this is where we're at now.

Yeah, we've got so far like left where we got it.

We got to cover up alien.

Aliens are real.

Fuck it.

Yeah, yeah, yeah.

Right, so again, so let's go to all this.

So there's a missing stage.

People often leave out here.

I labeled here.

Okay.

Agentic AI is not necessarily smarter.

It's more self directed.

Right.

So you can easily say, well, Chris, why don't I just use an LLM?

It's because it self directs and you don't have to keep going back and repeating yourself to.

Yeah, the agent AI.

There's nothing more aggravating than having to like restate the, the facts.

And it's like, I got to do this again.

And I do it a lot for the show when I ask for show notes and stuff like that.

It's frustrating.

Yeah.

But you can also have a.

So impeg or MP, MPG 4, whatever the hell it's called.

The same basic kind of concept of development software that that YouTube runs off of.

You can download a skill set for that and they can actually create its own short form format videos.

I mean, it's getting to a point where it's just wild.

And plus, I don't know if you've seen some of the stuff that's been going on with Higsfield AI.

And some stuff is coming out.

People are making movies now of Brad Pitt and, and, and what's the other

one they're gonna have Clooney.

No, Tom Cruise fighting.

Oh, oh, I did see that.

Oh no, you're right, you're right.

Oh my God, this is real.

So there's a couple different ways you can roll out your agent AI.

The, the Mac Mini is the easiest one most prominent, you have it hardwired, you can plug, unplug it.

But you can also use something called a VPS where you basically have your own computer in the cloud and you download it to that and you don't have a machine anywhere and it's in the cloud and it runs 20, 24 7.

People worry about security for that because it's not something you just pull a wire from.

Right.

I told you before the show started.

I believe the next venture of this is Claude or OpenAI just says, you know what, guys, we'll sell you a VPS OpenAI agent for you to use in the cloud that's dedicated to you.

To what exactly what you're looking for.

Yeah.

So instead of you building one in your home to do whatever you want we'll give you one.

And you just download your own skills to it and you create it.

And that, that's you.

You.

Yeah, that takes a whole hell of a lot of compute and power because now you're taking what's in everybody's computers, right.

And you're giving it to them, you're selling it to them.

But that's a, that's a product, right?

Right.

That's clearly why they brought the guy on board.

Yeah.

That, that's happening next.

So all these people who are doing this now, this is early days.

Yeah.

What comes next?

And it's probably, they probably honest, honestly, they probably already had like this ready to probably get ready to roll out.

And they needed a face like this is a good face for this.

I don't know that they had it ready.

I don't think they thought about deploying it for a consumer use.

I think they're thinking about deploying it for corporate use.

But to be honest with you, it makes a whole hell of a lot more.

Here's the scary part, okay.

Here's where somebody who runs a company or business is gonna listen to this and go, shit.

Because there's no way to stop this.

Okay, let's.

I'm not gonna use you.

I'm gonna use me.

Because you're the good boy, I'm the bad boy.

Yeah.

Everybody knows that.

Bad.

You don't need to disclaim that.

Yeah, I do.

Chateau Mirval.

Chateau bro.

I will pay you a thousand dollars.

You come in here with thigh high boots on.

In a suit.

In a suit.

Yeah, yeah.

So here is something that is happening now.

I guarantee you I have no evidence of this, but I know it's happening.

Right.

Let's say you work for a company and you're an analyst, right?

And you have certain corporate approved AI for you to use.

Let's say you spend $1,000 buying a Mac Mini.

You download Open Claw, you download some skills, you teach it what you do for a living.

You download your conversations with Open Eyes, chatgpt and Cloud and you download those and you say, hey, this is me.

This is what I've been asking AI and lms.

Yeah, this is.

So you know me.

Here's my job description.

Here's what I do.

And you spend a couple of sleepless nights training it up on your skills.

Yeah, Right.

Scary, right?

Because you can.

Now I'm.

Now I'm replaceable.

You can choose to use imessage.

Even better.

But there's a, there's a friction point where companies are still Going to Pay said Omar $100,000 to do, say, Omar's job.

But Saeed Omar just spent a thousand dollars on this bot.

Right?

That, this AGI light adjacent, if you will, agentic AI tool at home that you can message on your iPhone whether you're using WhatsApp Signal or iMessage.

You can literally give its own imessage account if you want to.

Right.

And it can imessage you.

Right.

Blue bubbles and everything.

Right.

And you could literally say, hey, my boss just gave me this job, I need you to do it and turn it around to me in the next hour or two.

Right.

This thing works 365, seven days a week, 24 hours a day, doesn't get tired.

And the new thing that people are doing who have these, they wake up in the morning, they just check all the work product the night before.

That's what they're doing.

So you're doing review work.

So now you can send this to your bot, right, that you paid a thousand bucks for.

It's going to turn it back to you.

And you spend an hour reviewing what will has taken you five, six hours to do.

And now you've got all this extra time.

What are you gonna do?

At some point the company's going like, why are we paying this dude to review?

So why don't we just get rid of all the other dudes and we just have him review constantly.

All the bots.

All the bots, as opposed to you do work that the bots really do it because we're there now.

I mean, this is not like some dystopian future.

We're there now.

Right?

And at some point, what's going to need to happen is each one of these bots is going to need to be registered for a corporation.

That's what's going to need to happen.

Because they're like people, right?

So if one bot goes rogue, you need to know it's a Timmy bot.

Yeah.

Not the Freddy bot.

Right.

You got to know which one, who's who, Right?

Yeah, exactly.

And here's the scary part, and I'll be honest, I've already planned on this for us.

You give your bot a human like name and a human like email.

So people who interact with it don't know that it's an agentic AI.

Yeah, yeah, yeah, Right.

So there's no way you would know.

Unless it sounds like AI.

That's already.

If you have a call center, it's already gone.

Done.

Like that's done.

Yeah, yeah, yeah, yeah, yeah.

Right.

So let's, let's just go down this list a little long because the next couple stages are really going to freak you out.

Right.

Right.

So pucker up.

All right.

Right after.

This is the often missing stage of domain generalist or generalist AI assistance.

We're already kind of at the inflection point where this is already happening.

Because if you have an agentic AI agent who has a skill set and jobs.

Yeah.

All it's got to do is more than one job, like be your personal assistant and help you with work.

Yeah.

And it's already there.

And you can already do this now.

You just download, you prompt it in each one that you want.

You say, hey, bank mode, hey, law firm mode.

Hey, podcast mode.

Right.

And then you do it.

The only thing left is that it triggers those modes on its own based on what you prompted.

That's, that's the only delta between that step and this step.

So it's gonna, it's gonna have to,

to decipher and it's.

We're already close to that now.

I mean, dangerous.

Yes and no.

I'm sure you've seen examples where it has.

But then some of my, some of my favorite reels right now are people posting where AI is just missing the point completely.

Yeah.

But that's also, in part, sometimes a prompting issue and.

Yeah, but you're getting that more with the LLMs, you're not getting as much with the agentic stuff.

Right.

And I think that, I don't think that people understand the, the distinction between the two.

The LLMs, you have to constantly explain yourself to.

Yeah.

Once you get it locked in with your agentic AI, it knows and remember.

Right.

So that's, that's where the difference is.

Right.

You can build on a precept and of a core series of thoughts.

Right.

And then continue to build on it.

So this stage, systems that are more robust across many domains and environments, not just language tasks.

Better memory, long horizon planning, fewer hallucinations, and more reliable execution.

I think we're already there.

We're just learning how to perfect it and be galvanized and like effectively there.

The next step.

Okay.

The immediate next step after this, like, that's the next one.

AGI.

AGI.

Artificial General Intelligence.

Roughly human level or better competence across most economically valuable tasks with strong transfer learning and adaptability.

Not just passing tests, but operating the world effectively.

So and if you.

That's the next step.

That's the very next step.

Right.

You're, you're at, you're at the end goal or the goal that has been set up by everybody.

Right.

And, and if you believe in the proof is in the pudding, you just go back and look at all the test tech, technological advancements that we've had over the last 20, 30, 40, 50 years.

It's growing at an exponential pace.

Yep.

We're probably going to get there sooner than they thought.

So the consensus right now is that it'll happen well before 2030.

Some people say it'll happen as early as late this year, early next year.

I am of the proponent that it's already happened and we're just not allowed to know about it.

Yes.

The problem is, is that this, this, this is already out of the bag.

And the problem for them is, is now people having their own agent AI.

How do, how do we make people feel safe about it?

Well, it's going to happen.

Consumers are going to have this in their own house.

Yeah, that's the problem.

Right.

Like this, this train left the station a long time ago.

Now that everybody has their own agentic AI, it's just going to come down to like, okay, who's going to get there first?

And if one dude can vibe code for three months, I mean, this is how dangerous the situation is.

Right.

There's a power draw here.

I get all that.

But I mean, if people can illegally grow marijuana in giant warehouses with a shit ton of power, they can farm bitcoin cryptocurrency.

And if you're mining cryptocurrency, you're probably like, shit, this is going to drive up the cost of my to mine.

I don't want to be this guy.

You are that guy.

I am that guy.

You are you.

You are more this guy than I am.

But I'm not an ageist.

But I don't really like the fact that my policymakers are those that really can't understand this and they're in complete

and total denial about.

Not only in complete, total denial about this, but they're still in the camp of, you know, Saeed, every once in a while technology comes around like the Internet and everybody thinks everyone's going to lose their jobs.

And it also creates jobs, Saeed.

Okay, it destroys some, but it also creates.

No, but the goal is to kill jobs with this.

That's the goal.

The whole purpose is to be.

Let me read this again.

Roughly human level or better competence across most economically valuable tasks.

And I would argue humans have been getting stupider.

Okay, yeah, and I said stupider on purpose.

On purpose.

Right, right.

More reliable execution is.

But operating in the world Effectively, yeah, that's better than most humans.

All right.

And just, just so.

So we're just clear on this.

The next step after this is something called asi.

It's recursive improvement dynamics, but essentially it's not always listed as a stage, but a common concept.

Systems that can significantly improve AI R&D themselves.

So basically, AI comes about, and now AI figures out how to continue to improve itself on its own without us there.

So this is really not a step that most people see, because guess what?

Once AI comes out and AGI is

out there, you've entered into iRobot, you're already here.

And the next one is ASI.

Artificial Super Intelligence.

Yeah.

Now you're obsolete.

Now it's talking down to us, right?

Yeah, exactly.

Far beyond human capability across the board.

It's frustrated doing all the work.

It's going to send us back to work.

Yeah.

How do I get rid of these guys?

Yeah, but I mean that.

And there you are.

But.

So there are people who say that this is not going to happen till 2030, but I think the consensus is it's going to happen well before then.

And people like Elon Musk are like, this is.

This is happening real soon.

Yeah, yeah, just strap in the.

The question is really just.

It's going to come down to, I think, the power sources for all of it.

Right.

It's going to require a lot of power.

Why do you think they're going for nuclear power plants?

This is why.

Yeah.

Somebody already has this and they're like, bro, I need to power this thing.

Let's go.

Yeah, Imagine if, like, that's all you're waiting on.

Like, come on, bro, I need it.

Hit me with the power.

Oh, I guarantee it's happening.

I guarantee it.

You go tell me they have a quantum computing computer capable of breaking any.

I know what's going to happen.

I know what's happening.

Some guy who's not an engineer, but yet somehow in charge of these projects is going, hey, Bob, you know we have that quantum computer that we're not supposed to talk about, that NASA and Google's working on?

Yeah, yeah, yeah.

We don't really know how it works.

We think it might be tapping into parallel dimensions.

Yeah.

Well, what if.

And I'm just.

I'm just speaking generalities here, Bob.

What if we plug that thing into AGI?

Just.

Yeah, let it go.

Right.

We'll have it in a mountain somewhere so that if it blows up, you know, it will tell everybody a volcano erupted.

Right.

There's a hidden super Volcano in there.

We didn't know, but.

Right.

Maybe we can get an Avenger, you know?

I don't know.

Right.

I'm just saying, like, this is.

We're so dangerous.

You might get an Avenger, but you also might get Thanos.

Yeah, just.

It's so.

See ya strange to me.

So keep in mind, people with agentic AI right now already having it try to make money for them there.

I know a kid who's making $2 million a year in a faceless YouTube channel that is already using this to make videos.

And he's putting out like 10, 20 videos a day.

Yeah, it's just volume.

Just vaugh.

All he's doing is he's sending it to Wikipedia to grab stories in the niche.

And his niche, by the way, this is the stupidest.

Yeah, I'm sorry, Don't reveal his page.

Are you gonna reveal his page?

No, I don't.

Oh yeah, he's the biggest one.

So you can find him.

Yeah.

All he does is create videos that help you sleep.

Well, what do you mean?

Like white noise?

I'm not gonna give away the details because you know exactly who it is if I do.

Okay.

All he does is tell you stories to help you sleep.

And there's some things built into it now.

Oh, I think I know what you're talking about.

The son of bitch.

You know, he said to me, what?

Everybody sleeps ain't wrong.

That's true.

I put my face on this shit.

I'm working my hats off and you're making these faceless videos.

100% of the people sleep.

Everybody sleeps.

You got to.

Yeah.

I'm like, how did you come with this idea?

He goes, well, you know those kid videos that came on?

Everybody's got these kids and they're watching these videos and repeat.

I'm like, what's the market that I can tap into like that?

Everybody sleeps, bro.

I know there's some Spotify.

There's some Spotify podcasts out there that just.

Just were crushing it off.

White noise.

Yeah, there's that one guy who loads that video up.

It's been like, like millions of dollars.

A million.

A million.

Oh, the fireplace one?

Yeah.

Come on.

I mean, genius.

Yeah, just a ten hour long video of fireplace Brilliant.

One video.

That's it.

Why did you think of that?

That was.

That was right there for you.

Because I made a financial literacy show and I spend my day arguing with trolls.

Right?

You don't know about supply and demand, man.

That's a nice picture of Beyonce as your profile picture.

Chief.

There you go.

Yeah, that's real, by the way.

That happened.

An attorney.

I didn't understand that.

An attorney in Denver arguing with me with a picture of Beyonce as a profile picture.

Why, though?

Huh?

Like, that was.

That's easy.

Like, you'd have to explain that to somebody.

No.

Yeah, no.

They circle up with people who are virtue signaling with them, and as a result, like, everyone's like, ah, that's cool, man.

Like, the guy with the thigh high boots, like, everybody in his crew probably rocks those.

It's cool, man.

They probably.

Hey, man, that's dope.

Yeah, that's dope.

You gotta tell.

Hey, you gotta tell the guy that's running Brad Pitt's studio.

Anything he does is dope.

You need the plug.

That's the plug.

He's creative side.

You gotta let him be creative.

Right?

That's what I told Kanye.

Look what happened.

Can't touch that one.

Say nothing about that right now.

How is he still alive?

Like, no one's letting him out.

They just let him go.

Like, Jay, you're supposed to be criminal, right?

And why aren't you doing criminal things?

You know what I mean?

He can't do anymore.

Everyone's like, I can't do anymore.

He said, like, jay's dirty, Chris.

You don't know.

He hasn't killed Kanye yet.

I. I'm just saying, right?

I mean, there was enough there to where you'd be, like, looking at him sideways.

Yeah.

Nobody's taking 50 out.

50 is just.

God, he's so good.

Yeah.

You think he still wears a bulletproof vest underneath his shirts?

No, he's just rolling around with security all the time.

Yeah.

They're just living with him at this point.

He seems the most like.

You ever seen my interviews?

I saw him interviewing Big Boy the other day.

He seems like a normal dude.

Yeah.

And he seems like an intelligent normal dude.

One of his.

One of his crew guys, I think it was Tony Yayo did it.

Went on a spot.

He's been doing the podcast.

Yeah, he was on Schultz's podcast.

He was on flagrant.

He was on a bunch of others, and they went down this whole debate on whose career would you take over.

50s or Jay's.

Yes.

And they're like.

They're crazy.

If you would take Jay's over 50s, because you look at the influence and.

And the explosion that he had.

I think people look at Jay's.

Think of him as, like, this, like, of what they built him up to be.

No offense, Nothing.

You're gonna hate this.

You're gonna hate this because I'm gonna stop you because I'm gonna use this own argument against you.

You better be careful.

No, I'm not.

I'm not proponent.

It's the same reason why everyone calls Jordan the best.

It's the same reason, the same.

It's a whole nostalgia play.

It's what he built.

He built up the entire industry.

And now nobody can come close.

That's it.

No matter what.

And I'm not even going to make the argument for anybody else.

I'm not making the argument for anyone else.

But.

But you can't even come close because he is him and that is it.

Leave him alone.

He's on top.

He's the king.

You can't touch him.

But that same argument that you were just about to make for Jay.

I'm not making it for Jay.

Look, I think 50 cents had a much more robust career and was much more intelligent about his transition.

He's in film and television now.

They never speak for themselves.

Themselves.

I don't disagree with the sentiment, but I would take 50 cents career over LeBron James.

That's ridiculous.

That is ridiculous.

You don't believe that.

I do believe that.

No, you do not.

I think LeBron's got dirty hands.

Well, they all got dirty hands.

Oh, what does they mean?

They.

They all got dirty hands.

Anyone that big, that influential, you've rubbed elbows with somebody that's got dirty hands.

Now you got dirty hands.

According to Cat Williams, you were correct.

Lara's been quoted saying there's nothing like a ditty bar party.

I know 50 was at those parties.

Hence the reason why I'll take his career.

Yeah.

Yeah, right.

Exactly.

We should probably end it here before we get canceled.

Yeah.

Anymore Jay comes for you.

Me?

Yeah, I guess both of us.

I mean, if you like this show, you could do us a favor.

Make sure you subscribe.

I know we're an hour 30 in.

If you're here and you haven't already, shame on you.

We've been doing longer shows lately.

Yeah, it's been going and people actually been listening based on the analytics.

Make sure you subscribe.

Hit that, like, button.

Ring that notification bell, do all the moist, goody good sassafras stuff.

No one's more surprised that people listen to us inside.

Yeah.

No.

This late into the game, I'm proud of y'.

All.

And if you really, really want us to do us a favor, you could either head over to join Fridays.com, use the code higher or share this episode with a friend.

Yeah, family member someone that you feel like could benefit off the information that we're giving them.

Just grab people's phones, Put her.

Put a podcast in it.

Yeah, man, come on.

I did that yesterday, by the way.

Boy, at lunch, I'm like, you scout our channel, right?

This girl, she goes, no.

I'm like, give me a phone.

Yeah.

She goes, you serious?

I'm like, I'm dead ass serious.

Yeah.

Took a phone to crowded YouTube channel.

Dude.

I. I literally.

I literally saw.

Because I know you've had multiple people come up to you, tell you, like, hey, don't you.

The guy with the podcast?

Yeah, Right.

That happens a lot.

I literally saw somebody the other day, like.

Like, see me.

Oh, I have no idea who they are.

Give me a double take and then, like, tap their friend and go, like, point.

I was like, oh, come on.

Come on.

Just give me.

Give me some love.

Yo, that's the guy who pees when he.

That's true.

That's the bidet user over there.

That's right.

All right, man, don't leave it on that one.

Good night, everybody.

Bye.