Epstein Bill Passes, Trump's 'Piggy' Slam & MBS Visit, Bitcoin Freefall + Tim Cook Steps Down? | PBD
Patrick Bet-David, Tom Ellsworth, and Brandon Aceto are joined by Jeff Snider as they break down Congress passing the Epstein bill, Trump calling reporter Catherine Lucey “Piggy,” MBS’s high-stakes U.S. visit, Bitcoin’s sudden freefall, and rumors that Apple CEO Tim Cook may be stepping down.
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TIME STAMPS:
00:00 - Show intro
02:42 - Topics coming up on today's podcast.
07:43 - 📕 REGISTER FOR BPW 2025: https://bit.ly/3IU2YWx
09:28 - Epstein files bill passes in the
26:36 - MBS meets Trump at the White House.
39:53 - Nvidia earnings expected to be HUGE.
59:16 - Trump pushes portable mortgages.
1:17:31 - Ford CEO claims employee crisis.
1:36:48 - Bitcoin price plummets.
1:51:29 - Americans living paycheck-to-paycheck.
2:03:00 - Blue Owl & the NEXT financial crisis.
2:11:59 - Tim Cook may step down from Apple.
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ABOUT US:
Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.
Did you ever think you were making it when you want to hustle on something second sweet with the know this life may afford me?
The future looks bright.
My handshake is better than any.
You are a one-on-one.
My son's right there.
I don't think I've ever said this before.
I don't.
I don't mind doing that.
I mean, we can have a place set up here.
Folks, we're having a very deep conversation with homeschooling, and Tom and I got into a big fight because Tom is saying sixth graders don't have enough homework.
I'm telling them, why are you giving these kids so much homework?
Tom, turn off your phone, please.
Turn off your phone, please.
Tom is obsessed with homework for sixth graders, and I don't think it's healthy.
Why do you want kids to do homework till one o'clock in the morning?
You tell me the positive of a sixth grader who don't homework till one o'clock in the morning.
How are we going to get them to go?
To be fair, wait, wait, wait.
It was 11 o'clock a couple of seconds ago.
How are we supposed to do that?
It's eventually going to be 2 o'clock.
Listen, we need seventh graders in factories making iPhones, 16-hour shifts.
How are we going to do it if we don't give them proper education?
We need trade schools so they can hit Ford mechanics.
That's exactly what I'm saying.
Anyways, guys, please.
Manual dexterity tests.
Let us get back to our fights here.
But I am surrounded right now by three geniuses.
These guys are brilliant.
Literally, like Brandon, you know, he's the only guy I met in my life that's got two degrees.
He's got a bachelor's and a master's in national security.
We got Jeff Snyder here who does some of the best work when it comes down to the technicalities of the market.
You're going to hear when he starts speaking, you're going to get smarter by the end of this podcast.
And then obviously, in my opinion, Tom's one of the sharpest guys I met in my entire life.
And I'm going to do my best to try to moderate today's discussion on what's going on with the markets.
Last night, we got home at 10.45 from Dallas.
We were at the annual Goldman Sachs Founders Family Founders meeting.
Phenomenal meeting to see what's going on.
The vice chair of Goldman Sachs was the Rob Kaplan talking about what he thinks is going to happen with the marketplace.
Emmett Smith gave a talk.
I can't even tell.
I couldn't believe it.
I went to him afterwards.
I'm like, brother, you gave an incredible message.
Ross Perot sold Dallas.
Ross Perot Jr. sold Dallas and the role he plays as the chairman of the Chamber of Commerce, Tom, if I'm not mistaken.
He has managed a lot of the family.
He was governor Chamber of Commerce the whole enchilada.
It was phenomenal.
Yeah.
And then the government of Governor Oklahoma City, Oklahoma was there.
Bunch of different guys.
But it's a very good conversation.
We'll share some of the stuff with you guys here today.
Let me get into the stories and then I'll tell you what has happened on December 12th and we'll get right into it.
Tim Cook, the man who took Apple from the day Steve Jobs died, was worth $100 billion to now $3, maybe $4 trillion, depending on the month, is deciding to step down beginning of early next year.
Some are happy.
Some are concerned.
We'll definitely talk about that.
Trump is considering portable mortgages.
Here's how they work.
Yesterday, Rob Kaplan even openly said, I'd like to know what these portable mortgages are.
This is kind of like some of the people that are not selling their homes.
They got a home loan that was on three and a quarter or something like that, and they're worried about selling it to give up the three and a quarter for five and a half or six.
They're trying to find a way to, you can literally transfer that rate to a new loan.
Everyone's trying to know how they're going to do it.
Maybe we'll get some of our brains here to break that down for us.
Time mortgages.
We'll bring that up.
Bitcoin prices and free-for-all.
Weeks after hitting all-time low, people are panicking.
Some are worried.
Tom is saying there's nothing to worry about.
We will cover that as well.
Trump scraps tariffs and beef, coffee, and tropical fruit and push to lower grocery store prices.
Trump is considering Ford CEO Jim Farley says he can't fill 5,000 mechanic jobs, paying $120,000 a year.
And this is the part, Jeff, I think, that you talk about the labor recession and some of the other people talk about labor recession.
Brandon, I know you got some thoughts on this as well.
People are having AI children.
You ready?
Are you ready for an AI children?
You want to have an AI child, a perfect AI child that does nothing wrong, but people are having AI children with their AI partners, according to futurism.
Sounds boring.
Yeah.
Sounds like the movie Her, by the way, which was, in my opinion, one of the worst movies I've seen in my life.
Most Americans think 63 is the perfect age to retire, but they're dead wrong.
Wait till you hear, according to MoneyWise, what the new age should be for retirement.
Some of you, I'm telling you, earmuffs when we go through it.
You're going to want to leave the podcast.
You're going to be so upset with us, but it's not us.
It's this guy talking about the story.
Omaha Steak CEO warns American families will soon face a $10 a pound reality for beef.
Jake and I were talking about the other day I took the kids to have ice cream.
Five kids had a scoop of ice cream.
Brooklyn had her gummy bears.
I think she had MMs.
One of them had gummy bears and one of them had marshmallow.
Five scoops of ice cream on Waffle Cone.
Each had one scoop.
Was $64.
I asked myself, what average family can pay $64 for ice cream?
I was blown away, but apparently that's the price today.
Number of new foreign students in the U.S. falls 17% over visa worries.
This is probably the H-1B visa conversation that people are afraid of having, but I think we need to be having.
Toyota opens a massive North Carolina battery plan, confirms $10 billion U.S. investment.
Oil and gas demand could grow until 2050, according to Wall Street Journal.
The number of households living paycheck to paycheck have risen.
Why?
It's a USA Today story.
How building affordable housing became hottest game in LA.
Electric Florida Boomtown is now America's foreclosure ground zero.
Wait till you find out what city that is.
Trump is going to, we're talking about that.
Record property tax increases.
Slam Chicago homeowners as downtown owners see cuts.
Wasn't this guy not supposed to raise taxes or do anything?
This incredible mayor guy that is destroying a once great city.
And then we got a couple other stories we'll get into with AI boom is fueling a memory chip shortage that could hit cars and phones.
Google is looking at $40 billion for Texas data center and Tropic to spend $50 billion on U.S. AI infrastructure.
And then we got a couple stories that I think Jeff and Tom both want to talk about.
The blue owl plunges to 2023 low after blocking exit from fund.
And there's two stories that will address both of them as well.
And then, folks, there was a clip yesterday with what do you call it? Epstein.
They voted for it.
I want to say it was 427 to 1, if I'm not mistaken.
And one guy that voted against it is famous now because you probably had never heard of him before.
And if he wanted to get famous, this was one of the ways of doing it.
Clay Higgins is officially the only guy that voted against releasing the Epstein files.
And he actually tweeted about it, explaining why he didn't.
And maybe we'll get into that as well.
And some guy who works, he works on this street's name, Pennsylvania.
I want to say this streets name.
He told somebody to do quiet piggy.
He told someone, quiet piggy.
I don't know if you guys have seen that clip or not.
Have you seen that quiet piggy clip yet?
Maybe we'll address the quiet piggy clip as well.
Gang, if you got big plans for 2026, I am telling you right now, I can't tell you how many conversations we're having about business planning.
There's a reason why we went less than 22 hours to Dallas and come back because we want to see exactly what's happening with 2026.
We're planning for our family, for our businesses ourselves.
And if 2026 is a big year for you as well, I want you to watch this clip.
Rob, can you go to the clip with the Jenga to show them what happens when it comes on to business plan and how all of these things are necessary?
Go ahead, Rob.
Business is a lot like Jenga.
Every piece matters.
You need a vision.
Do this carefully.
Oof-foo-foo.
You need capital.
You definitely need capital.
Let's put this here.
Ooh, listen.
Hanging on on one piece here, by the way.
You need the right team.
For sure.
This almost fell off, by the way.
You need sales.
As good as this looks, if your foundation isn't built on a good business plan, you know what happens?
The whole thing crumbles.
If you have big plans for 2026, on December 12th, I'm hosting an event called the Business Planning Workshop, where all day we go through the 12 building blocks of writing an effective business plan.
So this doesn't happen to you.
If you have to get registered, click on the link below.
Let's spend an entire day together on December 12th.
Looking forward to seeing you there.
Folks, click on a link below, get registered.
You can watch it with your friends, family, and this is going to be people watching this from 100 plus countries.
And you can find a way to just get registered at the lowest level, or you can find a way to be on the screen so everybody can see each other.
And at the end, we'll do a Q ⁇ A for 90 minutes.
All right.
Having said that, let's get right into it.
Rob, what is the audience saying is the first story they want us to get into?
Let me guess.
Okay, I don't even have to guess.
All right, so let's go through that story.
So they voted for it, and it ended up being what, 427 to 1 on releasing the Epstein files.
And a lot has been released since there.
Is this the breakdown, Rob?
Yep, go for it.
We begin with Congress approving a bill to force the release of the government's files related to convicted sex offender Jeffrey Epstein.
CBS News reporter Erica Brown joins us now from Capitol Hill.
Erica, can you explain what happened in the Senate?
Yeah, Lindsay, just a short time ago, Senate Minority Leader Chuck Schumer took to the Senate floor to get unanimous consent that would deem this bill automatically.
Rob, it's okay.
We don't need to watch this.
I thought it's like a little bit different breakdown.
It's like two people sending it to each other.
So it's Senate and House, Rob, right, that both said they're passing it.
And then as we're going through this, the only guy that didn't, Rob, if you can pull him up, Clay Higgins, he's the only person that didn't do it.
Representative, Republican representative.
I want to say he's out of where?
Why do I think it was Oklahoma?
I don't know if it's Oklahoma.
Louisiana.
Louisiana.
Okay.
And if you don't mind going to his Twitter account for us to just let him give his argument why he didn't do it, on Twitter, he explains, this is why I voted no.
And I've been a principled no on this bill from the beginning.
What was wrong with the bill three months ago is still wrong today.
It abandons 250 years of criminal justice procedure in America.
It's written.
This bill reveals and injures thousands of innocent people, witnesses, people who provided alibis, family members, et cetera, if enacted in its current form.
This type of broad reveal of criminal investigation files released to a rabid media will absolutely result in innocent people being hurt.
Anyways, that's his reasoning behind it.
Go a little bit low, Rob, to see what it says because there's a community notes.
Rebuilding is a claims misrepresent the H.R. 44805.
The bill includes redactions from victims and uninvolved individuals.
Massey explained victims can't release names due to lawsuits forcing them to homelessness.
Okay, so maybe there's a little bit of contradiction there.
Tom, your thoughts with what was released yesterday?
Are we going to learn anything?
Are we going to see anything?
Or is this just another one of those, you know, they're going to release it just to say they did?
Well, always be concerned if your government does something unanimously because it's technically a mathematical and a statistical, you know, not impossibility, but it's highly improbable.
Like if they're voting on raises for themselves, all of a sudden you say, hey, Senate and Senate, everybody was like, what is it?
You know, you take all the congressmen, all the senators, boom, done.
So what has happened here is they're all voting to release it, but there's two asterisks in it.
The Attorney General Pam Bondi can elect to redact it, I think, for matters of national security, A, or B, if it would interfere with an ongoing investigation.
Help me out here, you know, guys.
I think those were the two exceptions, which means that Pam Bondi can swing by the CIA and get all those groovy black highlighters out and go through the whole thing and basically have the same situation as they had when they handed those binders to the social media people and they walked out with the binders that says Epstein files.
This isn't that.
Yeah.
No, no.
Supposedly that was that.
This is now, but that had a bunch of stuff that was already released.
But that didn't go through House and that didn't go through Senate.
That was just more like a marketing stunt that they did.
It turned out to be a marketing stunt.
Exactly right.
But now the government's saying, it's going to end up being a marketing stunt again because Bondi's going to go over there.
She's going to redact a bunch of stuff.
With all those CIA black highlighters.
Exactly.
Do you think it's going to be a public?
Oh, of course it is.
I mean, why did both parties agree to this?
Exactly.
Yeah, that's what you're saying.
The logic of building right back to that.
She's going to redact a bunch of stuff, which will allow the Democrats to say, you're still not showing us everything that's in the files.
And then the Republicans can say, no, we released the files, but we had to protect names.
And the political theater goes on and on and on.
Got it.
So you don't, you don't.
Brent, are you in a different position here?
No, I'm not.
I'm so, unfortunately, I'm so burnt out by this one because we've been kind of let down and misled and manipulated so many times.
Like I'm never going to expect to get a satisfying answer with this in terms of like learning new information.
And like they said, there's no way that 427 people would vote in favor of it if it's going to do anything damaging to powerful people in a big way.
Okay, so I'm curious, Jeff, we've had a lot of different theories why we believe they haven't released it yet.
We have our own theories.
Why some of the information is that, well, you know what?
It's because there's so many Democrats that are on there.
No, it's because so many donors that gave money to Trump are on there.
Oh my God, Elamos, when he tweeted that there was a big falling out.
No, it's because of maybe Trump's relationship with Epstein.
Why do you think all the information is not being released?
Why isn't it not being released?
I think a lot of it has to do.
I mean, why is it that this is such a mainstream topic that everybody wants to get into?
I mean, like you said, this is the number one number one news.
The audience is the only thing that's going to be the same.
Yeah, exactly.
Why is that, though?
Because people believe that there is a two-tier structure, at least two tiers in the country.
Right.
And that the elite people have their own set of rules and benefits.
And if you're in the club, you're in the club.
And therefore, the rules don't really apply to you.
And so I think that's why everybody is really taken to the story.
And you get into the idea of the establishment versus regular folks, the uniparty.
I think that's exactly what we're saying.
What I'm trying to ask you is, you're a smart guy.
What are you speculating is the reason why both parties have held back from releasing it?
That's exactly, because people are right.
Because people are right.
Because both of them have guys on the list.
There's this idea that the American public is a bunch of stupid idiots who don't know anything.
But you look at survey after survey for something like consumer confidence on the economy.
Americans know better about the economy than every economist that has ever lived.
Same thing with politics.
In a big data sort of way, in a big crowd sort of way.
American people have an idea of what's really going on here.
And the reason why this story won't go away is because people sense.
And every time something happens.
So what's more likely to happen?
It going away or the truth coming out?
It going away.
Oh, you think it's going to go away venture?
Too much incentive to not to just continue to dangle the carrot as much as necessary and then just like this sleight of hand magician.
What I do like about it is that we're learning a few new things where you know Hakeem Jeffries, you saw that email that reached out to Epstein to want to ask him for money.
And then when he did, he says he'd like to set up a meeting with Obama.
And then here, I don't know if you have the clip, Rob, with Rokano is being asked about it.
And he just got out.
He has no clue.
And look at his reaction.
He doesn't even know what to say.
Go ahead, Rob.
On Hakeem Jeffries' campaign soliciting money from Jeffrey Epstein himself back in 2013.
It's the first time hearing about it, obviously.
Homer said it on the floor.
Well, I don't know if it's true.
I mean, you're just saying it, but obviously anyone who took money from him should return the money.
Didn't donate the money when I don't.
Step down as a leader.
I have to look at what you say as the first time.
He's a reasonable guy.
And he's a little bit returned the money.
But don't you see that as mutually assured destruction?
What a great way to put it.
You want to take out Trump or one of the Republicans?
We got the dirt on you, too.
So let's just bury this thing.
Let's get together, hold hands, and bury this thing and just move on with it.
Yesterday, a reporter was asking a president about Epstein, and I've never seen him use this phrase before, but he told her quiet piggy.
Rob, can you pull this up, Rob?
I don't know if you have it or not.
I watched it multiple times because I'm not going to lie to you.
I thought it was AI and I had to verify it.
Go ahead, Rob.
So he dictated a couple of memos to himself.
I'll go back a little bit again With the finger in her face.
Yeah, but it's also the smile in his face, right?
The way he delivers those lines.
Do it again.
He looks her right in the eye.
What do you think about this?
What do you think about this quiet piggy?
He's a great politician.
He connects with people.
I think a lot of people, just regular folks, would say, I'd love to be able to do that to some of these reporters.
You know what that says?
You know what?
You just said something there.
I'm going to give you a high five.
This is like the first 10 minutes here.
I'll tell you because you struck it.
Because you know why so many people let the troller in chief because sometimes he's the troller in the chief, and that's exactly what I voted for.
You know, I voted for a guy that's going to get in the face of the media.
I voted for a guy that's going to be here.
But everybody, doesn't everybody sit back?
I wish I could say that to my boss.
I'm in Dallas.
I'm in the hotel room.
It's a hidden thing.
I want to do it.
I want to do it.
And he's doing it for me.
I'm in the bathroom.
I come to Jen.
I said, babe, the president just said this.
Her instant reaction is she couldn't stop laughing.
The fact that a president told a reporter, quiet piggy.
Who says that?
I mean, you can say, F, you, you can say, you motherfucker.
No, no, what's worse?
I'd rather be told that than be called a piggy.
Be quiet piggy.
And they're all searching for how that it's suffered racial or sexually or is this right away?
Wait.
According to reports, this is the reporter that the president called Piggy.
Has anybody asked him why he called her piggy?
Not that I'm aware.
Although what is the like there has to be a backstory?
She doesn't look super.
There has to be a backstory.
There's got to be some other pigs as a pet.
No, I'm actually curious.
Like, is there like a little fetish?
This little piggy, this little piggy did this, and this little piggy.
By the way, while this is happening, you know what happened yesterday?
Larry Summers to his 30 students, he got up to his, did you see this, Tom?
Larry Summers gets in front of his 30 students and one of the students recorded it and posted it.
Rob, do you have this one or do you want me to send it to you?
Yeah, in front of his students, he apologizes.
He apologizes and says, hey, because of what happened right there.
Rob, go ahead.
Watch this.
I'm going to regret expressing my shame with respect to what I did in communication with Mr. Epstein and that I've said that I'm going to step back on public television for a time.
But I think it's very important because there you have it.
So Larry Summers comes out, apologizes.
Some lady is called Little Piggy.
You know, you got another story from New York Post comes out where they're talking about what some of the girls said about Epstein, which we'll cover that on Friday because that's Vinny's favorite story.
We won't cover that today.
More of an Adam story.
Well, listen, it is what it is, but we'll cover that on Friday.
Rob, what are the new things that we learn?
What are the new things that we learn?
Because there was a, is this the one with Johnson?
Yes, this is where Mike Johnson talks about it being a security issue to release, a national security issue to release the Epstein files unredacted.
Go ahead.
All right.
Number five, national security concerns, okay?
The discharge requires the Attorney General to release within 30 days, quote, classified information to the maximum extent possible.
This ignores the principle that declassification should always rest and always has rested with the agency that originated the intelligence.
Why?
So that they can protect their critical sources and methods.
It is incredibly dangerous to demand that officials or employees of the DOJ declassify materials that originated in other agencies and intelligence agencies.
Okay, so this goes back to kind of what you're talking about, the fact that nothing's going to be released.
Yeah.
Do you, if there's one thing that Glumbeck was talking about this, I think it was yesterday, maybe even a few days ago, he was talking about this, where there was a specific part that they were leaving out.
Part where it said they're trying to get Trump that I want you to realize that the dog hasn't barked.
The dog that hasn't barked is Trump.
This is an email exchange between Epstein, I want to say, and the dog that has embarked was Trump.
And they hid the name of the individual, which was Virginia.
That's the one, Rob.
If you want to zoom in a little bit.
So this is email correspondence of Jeffrey Epstein.
Who is he sending it to, G-Max?
I want you to realize that the dog that has embarked is Trump.
Victim they hid.
So you wouldn't know who that person is.
This is what the Democrats were using for many years.
Spent hours at my house with him.
He has never once been mentioned.
Police chief, et cetera.
I'm 75% there.
Meaning he hasn't prompted to do anything with her, apparently.
Zoom in, going a little bit more.
And then the direct correspondence.
Victim, Mar-Lago, Trump said he asked me to resign.
Never a member ever.
Of course he knew about the girls as he asked Jelaine to stop.
Okay.
So who is the victim?
The victim is Virginia Juffray.
Okay.
And when Virginia was asked about the relationship with the president, and the question was asked, Donald Trump was also a good friend of Epstein and this questioner going back and forth.
I don't know if you have that one or not, Rob.
And she responded, he didn't partake in any of the sex with any of us is what was said in there, right?
But he flirted with me.
So this is some of the stuff that is coming out.
I think it's good that it's being released, even though if it's a little bit, we're still getting more than we had the day before.
I don't mind if more and more information is being released and being talked about.
But the reality of it is, I'm convinced there's guys on both sides, and I think a lot of people are probably in the same place as well.
They just don't want the world to know who these names are.
They think it's a much better place to keep it to themselves.
Tom, I'll give you the last word and we'll go to the next story.
If anybody thinks that this is, first of all, Vinny's not here, but I will speak up for the horrifying effect that happened to the victims.
And I'm not equivocating the two things I'm about to say.
But there's a reason why they all say they're in favor of campaign finance reform and they pass resolutions that do nothing.
There's a reason they're all in favor of the line item veto and then they don't pass any resolutions because that is the uniparty.
That is the establishment.
And that is what the American voter can see in the clear light of day and is pissed off about.
And it's getting worse and worse and worse.
And now you have something as volatile as pedophilia and the victims.
And it just has pushed Americans over the top.
An answer.
Can I add one more thing?
Of course.
One thing that we've learned from all this, especially the Larry Summers thing, it's true, right?
That there is this other story.
I think there is some progress with information.
That's what I'm saying.
It's not specific, but it does confirm everybody's gut feeling.
Larry Summers apologizing, Jeff.
That's a pretty big deal.
But it goes along.
People are right.
They know that there's something there.
So I'm more of the thought of, I'm more optimistic that a more is going to come out.
It's never going to fill the appetite of the audience because they want 100%.
But I'm coming from a place of I think there's going to be some progress and more information coming out.
Not 100% of it, but more of it coming out for us to get smarter with what happened here.
Because the more and more stories you see with these girls, that's devastating.
That's someone's daughter.
That's someone's niece.
That's someone's today their wife.
That's someone's sister that experienced something like this.
And you can only imagine as a younger brother, you know, my sister's a few years older than me.
I was always extremely protective to the levels of that even somebody, there was a guy, she had an ex-boyfriend one time.
This poor guy, I get out of the military.
He is 10 years older than me.
We're at the church, and he walks by.
I'm in my uniform.
I'm 18 years old.
My dad is begging me to not do anything because we did something to the guy when he left the gym one time when I was 15 years old, 16.
I don't know what it was.
It was a long time ago.
That level of protection that you have for the people around you.
So I'm sure a lot of families want to see justice with this.
So we'll see what happened here with the story.
Let's go to the next one.
Now, more things yesterday.
MBS is in town yesterday.
Okay.
When he's in town, Ronaldo's there.
Musk is there.
And while MBS comes in, Trump is going to say hello to him.
He slaps Elon Musk in the butt.
Rob, you know which one I'm talking about?
Yep.
Yeah, he slaps Elon Musk in the butt, like Vinny was saying earlier, as if, hey, welcome back.
You know, as long as you apologize, you're welcome back here.
I don't know if you have the clip or not.
Is that the one?
Okay, right there.
Go ahead, Rob.
It's a little tap in the belly.
Checking his six-pack.
Okay.
And then if you want to show Rob the exchange with the media, there's a couple of them.
That's one of them.
And then we'll go to the other one as well while they're having fun together with the investment that he's making.
Is this the whole exchange?
Oh, this is the one, Rob.
Is this the whole exchange?
Two minutes?
Yep.
Yeah, let's watch this.
Go ahead, Rob.
Watch this, folks.
Appropriate, Mr. President, for your family to be doing business in Saudi Arabia while you're president.
Is that a conflict of interest?
And Your Royal Highness, the U.S. intelligence concluded that you orchestrated the brutal murder of a journalist.
9-11 families are furious that you are here in the Oval Office.
Why should Americans know?
Who are you with?
And the same to you, Mr. President.
Now, who are you with?
I'm with ABC News, sir.
You're with who?
ABC News, sir.
Fake news.
ABC fake news.
One of the worst in the business.
But I'll answer your question.
I have nothing to do with the family business.
I have left, and I've devoted 100% of my energy.
What my family does is fine.
They do business all over.
They've done very little with Saudi Arabia, actually.
I'm sure they could do a lot.
As far as this gentleman is concerned, he's done a phenomenal job.
You're mentioning somebody that was extremely controversial.
A lot of people didn't like that gentleman that you're talking about.
Whether you like him or didn't like him, things happened, but he knew nothing about it.
And we can leave it at that.
You don't have to embarrass our guests by asking a question like that.
Just you ask, Mr. President.
Allow me to answer.
You know, I feel painful about the families of 911 in America.
But we have to focus on reality.
Reality, based in CIA documents and based on lots of documents, that Osama bin Laden used Saudi people in that event for one main purpose, is to destroy this relation, to destroy the American-Saudi relation.
That's the purpose of my private.
About the journalists, it's really painful to hear anyone that's been losing his life for no real purpose or nothing illegal way.
And it's been painful for us in Saudi Arabia.
We've did all the right steps of investigation, et cetera, in Saudi Arabia, and we've improved the system to be sure that nothing happened like that.
And it's painful in the Saudi Arabia.
There's another one that happens as well with the investment of $600 billion, if you want to find that.
Jeff, what do you think about that exchange?
The reporter asked, and then MBS actually wanting to answer it, not wanting president to defend them, protect them.
Yeah, there's a lot going on here.
I think the Saudis are in a lot more trouble than people realize, given oil prices and the oil economy over in Saudi Arabia.
And I think there's a huge incentive for the United States to offer support, but also Saudi Arabia to give them something as well.
So I think there's it's not really about these political distractions.
It's more about, hey, we've got some real trouble going on here, and we need to get along really well.
Brandon, what do you think?
Yeah, I 100% agree.
I think it's like 80% of their GEP is from oil, and they're putting a huge initiative into building things to make it more of a desirable vacation destination.
So, I mean, it's a weird place to take that conversation for 9-11 questions and Jamal Khashoggi questions when there's a lot more interesting things to talk about than that, and there's very little information about that stuff.
So, yeah, I think that the main reason that we're doing a lot of work with them is because we need them, and they need our investment to make it a more desirable vacation destination.
Well, here's, Rob, I don't know if you have the other clip where he says ABC should lose their license.
Is this the one Rob?
No, because he was so unhappy with the question that he comes back explaining to her on how many different news companies lost lawsuits to him, and then he came back and said this about ABC.
Go for it.
People are wise to your hoax.
And ABC is your company, your crappy company, is one of the perpetrators.
And I'll tell you something.
I'll tell you something.
So why not just sign it out?
I think the license should be taken away from ABC because your news is so fake and it's so wrong.
97% is going to sit here.
And we have a great commissioner, the chairman, who should look at that because.
I wish he would let it finish because the next thing he says right there is about the fact that there's a reason because the average audience, if they hear that, they're going to say you can't just go take a license out.
There's a part where he says, when 97% of your news was attacking me, is that the part, Rob?
Did you find it?
I'm listening to it right now.
Yeah, he gets to it where he says 97%.
So, yeah, so he's obviously not happy with what's going on with these guys.
I don't know if you can find it, Rob.
I mean, we can come back to it.
Tom, what are your thoughts here?
I'll tell you what my thoughts are.
He campaigned on energy, not independence, not isolationists, but he campaigned on drill, baby, drill.
He came right out and he said it, and it's going to be drill, baby, drill.
We were there in Washington on the inauguration day where it was a key part of his speech there.
He waving to the crowd and he said, and drill, baby, drill.
And guess what?
It's having an effect.
And Saudis have a Rubik's Cube they have to solve.
They need to cooperate with the United States with regard to Gaza, but they don't want to be seen as patronizing the United States to the other members of OPEC, who are also other Arabic and Muslim countries.
They don't want that, but they need it.
The price of oil is coming down, which is actually going to help certain things.
It's already helping gasoline and then coming up heating well in the United States.
Electricity is expensive for other reasons.
But then the Saudis have this arms merchant service that they run, and they get a lot of support and arms from us.
So they got to kind of, it's like they have to.
Here's what I think is going on right now with Saudis.
The Saudis have to drive a toaster through the car wash and get to the other side without getting electrocuted.
And right now, there are so many things from economic pressure to political pressure to the war.
They got to take their steps.
There is a reason that you take a look at MBS.
You've seen him many times.
He was not stammering, but he was really searching for words and stuff.
He was not the normal MBS.
Hello, I hope the oil and everything is going good.
There's times you can see MBS looking so confident.
That guy looked, did he look confident to you?
I think he is.
The question about the toaster analogy, Tom, is if the toaster's plugged in, you're in trouble.
But if it's not plugged in, you will make it through the car wash.
So you know that's the problem.
Oil prices plugged in the toaster.
I think that's exactly right.
That's exactly right.
But I do think Trump is using the leverage to get what he wants.
Exactly.
I do think he's using the leverage to get what he wants.
Rob, if you want to play that clip of that.
That's where his comment comes in.
He's defending.
I know he is because he's trying to get that $600 billion to a trillion dollars because he knows.
The Saudis don't have it.
That's the thing.
They're already out there borrowing dollars.
Last year, for the first time in a long time, the Saudi Arabian economy had to borrow external funds.
They actually borrowed more in dollars outside of Saudi Arabia than they were.
How much did they borrow?
I don't know exactly the number of people.
Wow, Saudi, the government borrowed more money.
Yeah, because with oil prices down, with so many of those internal projects sucking up resources in Saudi Arabia, they actually have some of a cash shortage in Saudi Arabia.
You're right.
Last year they borrowed $23 billion.
Government planned to borrow about $23 billion for $22.
So net asset acquisition in 2024 was actually negative, which means they're borrowing more outside the country than they're bringing in.
The total national government that increased to an estimated $319 billion.
They're scaling back all those mega projects.
The fiscal deficit is off the charts.
So you're saying that they may not even have the $600 billion to invest here.
No, no.
They need $80 oil.
They need $80.
Okay, so then let me ask you this minimum.
Let me ask you this question.
So your analogy, the toaster to the car wash, exactly right.
So let me ask this question here.
So then if that's the case, does the president know that?
Don't you think the president knows that?
So then if he knows that, is this just one?
What can I give you to cushion the blow?
Because I don't want $80 oil.
What can I give you to help you in transition so that Saudi Arabia doesn't fall apart if oil continues to go lower?
I thought I said they're buying, they're selling them jets.
Yeah.
Right.
I don't know what the number was.
I thought I saw $100 million a pop.
That was something that had been never even on the table before.
They're never going to sell you the 35s.
I think Trump's doing a great job.
And what you're seeing there is the guy that we elected to use tariffs and other tools to get people to negotiate.
He's got Saudis playing ball.
And I'll tell you, here's the card that the Saudis have.
The Saudis want destabilization of Venezuela.
They want to disrupt the supply of Venezuelan oil because right now Venezuela is selling oil to China.
If China is buying oil on the backside of the Panama Canal from Venezuela, and they are, then who are they not buying it from?
Saudis.
And so therefore, a destabilized, a military action that interrupts the flow of oil in Venezuela will cause the price of oil to go up and Saudis sell to other people.
The other way to make money is if prices won't go up, how do you make more money?
Sell more stuff.
2x the volume at 70.
Exactly.
So if Venezuela is off the table, then they could sell it for 70.
And then they can live with $50 oil.
Got it.
So this is a little Rubik's Cube, but I think the guy that's in the chair there, look at that.
He was very kind.
Look at his body language.
Look at how he was.
Forget the reaction to the question from ABC.
That pissed him off and it should have.
But look at the confidence he has and look at this.
This is the part, Rob.
This is the clip I want you to play.
This is the guy we voted for.
I think it is $100 million per F-35.
And if they were to buy, say, roughly 48 of them, which is the number that they're talking about, a Saudi requested for 48 of them, that'd be $4.8 billion for the F-35.
But here's a $600 billion investment.
Go ahead, Rob.
Thank you because you've agreed to invest $600 billion into the United States.
And because he's my friend, he might make it a trillion, but I'm going to have to work on him.
But it's $600.
We can count on $600 billion.
But I just want to say it's an honor to be your friend and it's an honor that you're here.
And if you'd like to say a few words, but thank you very much.
Thank you, Mr. President.
We believe in the future of Institute for America.
We believe in what you're doing, Mr. President.
It's really creating a lot of good things and good foundation to create more economical growth, more business in America.
And also your work for the world peace.
I believe, Mr. President, and today and tomorrow we're going to announce that we are going to increase that $600 billion to almost $1 trillion for investment, real investment and real opportunity by details in many areas.
And the agreement that we are signing today in many areas in technology and AI and materials, magnet, et cetera, that would create a lot of investment opportunities for you.
So you are doing that now.
You're saying to me now that the $600 billion will be one trip.
Definitely, because what we are signing it to a facilitate data.
I like that.
You can pause that rubber.
So you're picking up the dinner check and dessert.
Look, you're getting the guy, like you said, Tom.
You know, when we were talking about who to have as a president, you want to vote for somebody that negotiates on your behalf?
That's what he's doing.
Rob, is this another clip he got?
This is one more.
This is where President Trump shakes MBS's hand and then they make fun of Joe Biden.
Go ahead.
It's not about me, Mr. President.
And Trump doesn't give a fist pump.
I grab that hand.
I don't give a hell where that hand's been.
I grabbed that hand.
I told you.
Good damn, where that hand's been.
So you little piggy in the nose.
I don't give a damn where the hand's been.
Brandon, what are you thinking?
Yeah, no, I agree with a lot of what these guys are saying.
I think that Saudi has been in a tough spot for a long time.
They're very much anticipating that the demand for oils, or their reliance on oil is going to be a problem for them one day.
So they're trying to just make it a destination that people want to go to.
So I think that's why the subsidy here is that the U.S. is investing in, I guess, property or like vacation type of real estate.
So they're trying to make it like an attractive destination for rich people to go to to offset some of that blow.
Why are you pointing at me when you said that for rich people to go to?
I was waving my hands around.
Okay, I got it.
We're in the waving hand moment.
So NVIDIA said, there's a major call going on today.
Okay.
That everybody is waiting for.
Okay.
The forecast of NVIDIA.
What is it going to be?
Okay.
Today or tomorrow, it's either going to be a bloodbath, it could be a very, very interesting day.
Rob, if you want to play this clip, go forward with NVIDIA's earnings.
How big are NVIDIA's earnings on Wednesday night?
It's a super bull, not just for tech earnings, but I think this market, right?
I mean, the reality is that there's only one godfather of AI, and that's Jensen.
And NVIDIA, look, it's the foundation in terms of what demand looks like in terms of what we're seeing.
And Gene and I talk about it often.
I think it's going to be actually a huge positive growth catalyst that we see, not just for NVIDIA, but for tech stocks.
But it all comes down to on Wednesday night, you're going to be able to hear a pin drop on trading for around the world.
I just don't know, Gene, how you even plan for this.
Normally, you know, you've got the analyst estimates, you've got a little bit of a whisper number.
If they kind of come in a little bit above it, it's good news.
Everybody knows NVIDIA's numbers are going to be gigantic.
Is that a fair statement?
Yeah, it's not only a fair statement.
Back on the 28th, Jensen went at the GTC.
He basically gave us the playbook through the end of next year.
He said this $500 billion in Blackwell and Rubin revenue.
If you take that for his word that they're going to be able to do that now, if they can get supply, that implies a 54% revenue growth rate for next year.
The street's at 41%.
Now it's come up from 34 to 41.
But that's the gap.
As I think about this, Brian, that's the gap between where they've set the bar in the 28th.
He gave us 54% revenue growth.
I don't know a lot about Wall Street, except I do know this.
54% ain't going to do it when it comes to the stock, is it?
It's going to have to be better than 54%, isn't it?
I don't think it needs to be better than 54 this week.
I think it needs to be better than the 41 where the street's at.
And to Gene's point, look, we get back from Asia being there three weeks.
Demand to supply for NVIDIA chips is 12 to 1.
So it comes down to there's one chip.
12 people want to order for every one potential chip that exists to order.
So there's one chip in the world fueling the AI revolution.
And that's why it speaks to our view that anyone that talks, and Gene and I talk about it all the time, anyone talks about an AI bubble here, we are in the third inning of where this is all playing at.
And I think that's why this is an inflection point.
You're going to see ultimately what the demand looks like from Jensen himself.
And I view it as a bullish.
I mean, I was going to say, what do you think about this ping good?
What do you think about Jeff, what they're saying here?
I think, you know, it's a lot of words to basically say we have no freaking clue what's going to happen.
And what happens in all of these disruptive technological cycles is that, yes, the numbers look good until they don't, right?
Yeah.
This is a 12 to 1 demand to supply.
Well, one of these days, it'll be 11 to 1, and then it'll be 10 to 1 as all these companies reassess the numbers that are being thrown around, the amount of revenue that's just required to even have a prayer breaking even.
And then let's talk about the products themselves.
It doesn't live up to the hype.
So where are you going to get the demand from to maintain that type of growth rate?
So the danger isn't necessarily that it's, you know, NVIDIA's earnings today won't be 61% or 62%.
It's whether or not we're actually seeing tangible results that actually match expectations.
Tom, your thoughts?
There's a lot of forward that's built into NVIDIA.
And what Jeff just said is correct.
But I'll tell you, it's something else that people are looking at right now.
Rob, if you could really quick go find Cisco and go Max.
Cisco Max.
Yep, the chart.
You go to the Cisco and Max.
And then pull up NVIDIA Max.
No, Cisco's earning chart, Cisco stock chart.
Yep.
And yep, and go to Max.
All right, let's see if you can find the dot-com bubble, CCC.
It's, you know, it's right there.
Now let's go take a look at NVIDIA and go to NVIDIA stock chart and go Max.
There you have it.
Yep.
NVIDIA is on the front end of Cisco.
What was Cisco?
Cisco had 70.
Go back to Cisco.
Cisco had 70% market share in 1999 of routers, 7-0.
And then they bought, they were given all the IBM patents and IBM said, screw it, I'm out of the router business, as the story goes.
And they were at 84% market share of routers at the beginning of 2000.
Oh, March 2000, first quarter.
Go right there, right there, right there.
Yep.
Yep, yep, yep.
There you go.
First quarter 2000.
That's what 80% market share in a brand new market.
Well, we need routers.
Routers have to be everywhere.
It's going to power the internet.
They have to interconnect each other.
That's correct.
That's very, very correct.
Now go to NVIDIA.
And you have here the one guy with the Blackwell chips that's got massive market share.
This is what people are looking at when they say AI bubble.
These are not a bunch of bears running around like Elizabeth Warren, hoping the sky will fall on capitalists.
These are people really looking at it and saying, wow, could this be an AI bubble the same way we had an infrastructure bubble for the internet?
And if so, that's kind of tough.
What I look for after hours today is do we head for an adjustment?
Not a crash, but do we come to an adjustment where PEs come back into a line with a little bit of reality?
And the way you do that is forward forecast.
And if forward forecast doesn't say, and we have demand, what's demand?
They're going to ask, what is demand?
12 to 1, 13 to 1, 11 to 1.
If the demand's coming back, they'll say, well, demand's softening.
Maybe now we've got all the chips ordered that we need for the data centers, even though you still have to make them.
But we priced in all the profit making those chips into that spike right here.
And what's their PE?
52?
That's not horrible.
Yeah, it was 52 yesterday.
But if you listen to CNBC, they'll tell you it's cheap.
Yeah, exactly right.
So what I think about NVIDIA today, take a breath.
It's going to be okay.
There could be, and by the way, the option volume is suggesting that there could be a 7% downward swing today in the price.
If that happens, how?
How will the market react?
The market react badly because what was NVIDIA's peak three weeks ago?
208 or 210?
208, 207.
I think inner day there was like a 208.
And now we're down at 186.
So we're 20 points down, 10% down.
Another 7% would be 17%.
That is a very typical correction.
Yesterday at Goldman Sachs event, people talked about you get 15% correction in a hot, frothy market is not unusual.
And then they say you grow into your pants, right?
Now your pants are kind of baggy because the price has come down.
But now through sales, dominance, market share, you grow back into your pants.
And so it's a really big thing, just like they said today.
It is the Super Bowl and it's going to determine whether we have like a Merry Christmas or where we have a managed Christmas.
And what I mean by that is, does the market begin to make a little bit of adjustment?
And then people have to say, okay, maybe I'm a little more cash for the fourth quarter.
Maybe I'm this will be normal things that happen.
But there'll be a lot of, look, the liberal media wants to see an adjustment so they can say, I told you it was a bubble.
All these Wall Street bastards, you know, now they're taking it.
And these guys just lost $2 billion.
They didn't.
They lost out on paper on net worth and stuff.
And so one way you're going to have, I think, a flat, slightly up response.
And the other way, you have a down response.
But I don't see that we have NVIDIA saves the world like it did last summer.
Yeah.
So I have a whole follow-up question, but I'm going to come to you to see if you have a different take on this.
And I got a follow-up for you guys.
Go ahead, Brandon.
Yeah, I think the entirety of not only just the stock market, but the entire U.S. economy looks well on the outside looking in because of the AI, I guess, bubble, because of the national flywheel that has all these giant seven companies spending money hand over fist on these chips from NVIDIA.
And probably because they're competing to create the best AI product, and that's what the data centers are for.
But that's the sole reason that the economy looks good right now.
I think that the actual Main Street is doing much worse than the stock market.
But I think that if NVIDIA takes a dive, the entire market takes a dive because it's probably what, like 8% or 9% of the S ⁇ P right now.
Yeah.
And what is 8% or 9%?
NVIDIA.
Oh, so NVIDIA is 8% or 9%.
But the question I was going to ask all three of you guys is this year S ⁇ P 500 rate of return is roughly 13 to 14%, give or take, right?
Do you know what percentage of the S ⁇ P 500 is in MAC 7 companies?
And it's kind of Mac 28.
28.
35 to 37%.
Seven companies represent nearly 40%.
That's why they talk about it being the Super Bowl because it's the only team playing.
Well, but this is the scary part, though, right there.
If you look at it at 35 to 38%, the seven companies, Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA, and Nancy.
So the question is, are these stocks representative of the question?
Yeah, the overall system or are they representative of just a lot of people?
So a fellow on Manectas asked me a question yesterday, and I told him, I said, we're going to talk about it on the podcast.
So he's getting the preview on this.
So S ⁇ P's up 13%, 14%.
Market's doing great.
You take seven out.
It's a very different story, right?
So what is the market doing?
How is the market doing?
What's the market looking like when it comes down to wanting to buy properties, other industries, hotels?
You're seeing some data coming out that just doesn't make any sense in certain other industries.
So how bad are things outside of Mac 7?
Jeff, I'll come to first.
Yeah, the market you want to look at is not stocks.
Stocks are somewhat their own reality.
The market you want to look at for economic fundamentals is bonds, interest rates, shapes of curves and things like that.
Esoteric indications.
But I will say for the stock market, I know we want to get into this a little bit later.
Bitcoin, cryptocurrencies, is sort of a proxy for general risk-taking.
And with Bitcoin being crushed over the last couple of weeks, it suggests that there is a growing anxiety about a whole bunch of topics I think we'll get into here that's not just related to NVIDIA and what their demand versus supply numbers are.
It's the overall environment.
Has the AI bubble gone too far?
And what will that do to the overall economy if it does start to falter here?
What are the underlying mechanics in the economy itself?
And does that actually, does that lead to the marketplace, the financial marketplace looking to take more risks in things like buying stocks or investing in real economy projects?
Because I know we were talking about this a little bit.
You're right.
The mainstream situation is not like it is like you see in NVIDIA and AI.
You just look at the consumer staple stocks, for example.
They are huge laggards to the rest of the market.
Yes, they're up, but they're not up nearly as much.
So the overall, that's why I think Bitcoin in particular is useful as a proxy for the marginal risk taker in the marketplace.
And that one has turned decisively ugly over the last couple of weeks.
Okay.
So when I look at UBS, UBS just comes out and puts, I guess this is the word we're going to be using today.
UBS comes out and Rob, if you want to pull this up, puts U.S. recession odds at 93% is what they said.
Not 50%, not 40%, 93%.
Some may even ask, if you were to take the MAC 7 out, are we in a recession, but nobody knows it?
That's market breadth, right?
I say UBS currently assigns a 93% probability of U.S. recession based on its analysis on hard data such as employment, industrial production, income and consumption.
Well, you look at the macroeconomic statistics heading into the summer, I mean, before the government shut down, look at the labor report.
I mean, there's a negative payroll number on the board for June.
So we're already job shedding, and that's been confirmed by ADP and a number of other surveys, including the Federal Reserve Zone surveys.
Consumers, we talked about this earlier, consumer sentiment has been decisively negative all year because consumers realize there are no jobs.
So the situation on mainstream is far more dire than people who are only focused on the stock market are really getting a sense of.
Tom.
So I'm about to get slaughtered on both sides.
On one side, you hear me talk about the market.
The market is managing itself to the benefit of the shareholders.
That's what the market is doing.
So as you said, Wall Street is its own world.
It's a very big world.
And by the way, Mag 7, they talk about Mag 7.
Mag 7 is bigger than all of the European stock markets.
All.
A-L-L.
So MAG 7 is bigger than the entire continent of Europe on an investment basis.
So it is.
That's a huge red flag.
That's the right thing.
That's right.
They should have their own flag, their own blue flag with seven stars on it and be like, we got your EU right here.
500, wow.
Yep.
And so now then, so they are managing to manage profits, which includes layoffs, which includes active use of AI and a lot of things like that because they're trying to manage profits.
That's stock market.
I'm going to call it right here.
I have felt for the last two months that we should be using the phrase labor recession because I believe we are in a labor recession.
And I think that there are numbers that the government under Biden has been, that they haven't fully fixed the way they were doing.
Let me say why, Pat.
If you overstate actual labor, because they use average incomes and a percent of income for tax and then a percent of income for spending, you're overstating GDP estimates.
Make sense?
Oh, you didn't have that many people working.
So you can't take 20%.
I think that's 17%.
Take 17% out for taxes and the rest is what they spend in the economy on this, that, and the other.
And they overspend.
Here's some facts going on right now.
Credit cards have hit $1.25 trillion.
We're back into that territory again.
So number one, number two, car repos are going to be the highest this year since, you ready for this number, Pat?
2009.
Car repos this year will be highest since 2009.
It's almost there right now.
And all it has to have is a little bit of trend in November, December, and it beats 2009.
The fastest grown delinquency.
By the way, people like Cox Automotive, they cover repos.
They like to say, oh, no, no, you're just talking about subprime.
Subprime borrowers got into trouble because interest rates were so high and they had 9% and 10 and 11% loans.
No, Would you like to know right now today, going into fourth quarter, the fastest growth in delinquencies in car loans is prime borrowers, not super prime, prime.
And prime that are age between 30 and 39.
So prime working age borrowers.
Correct.
That's exactly right.
Thank you very much.
Huge red flag.
We're on that.
Also, what you have, that's just that.
You now also have people talking about mortgage delinquencies.
And by the way, Rob, would you pull this up?
The chart I sent you, it's the one on the refi denials.
Look what is happening to mortgage refi denials.
It's not that one.
It's the other one I sent you.
I sent you just the these are the two that were sent.
No, Down in my email, there's a couple of them.
The mortgage charts, denials are up in red.
Yep.
Tom, while he's looking for this, I just looked this up.
So here's, and I'm going to bring you back to you because with MAC 7, S ⁇ P is up 15 to 16% year-to-date.
Without it, it's still up 12 or 13%.
That's correct.
They're successfully managing it.
How much of it is MAC 7 driving everybody else?
So if MAX 7 clients, everybody else follows.
Yeah.
Well, it gives you protection.
If you have the Mag 7 stocks that are rising, then you can buy everything else and justify it as the market is going higher.
Yeah.
Is this the go to refinance, the next one down on the left column, left column, right there?
Go take a look at that, Pat.
Holy moly.
This is the denials and refis.
These are all the people that coming out of COVID.
Remember when they came out of COVID and some people got seven and a half and seven, three quarters and some eighths.
Remember that?
Yeah.
Well, guess what's happened?
The rates now have down to six and a quarter, six and an eighth, or pay a point and get five and seven eighths, but they're getting denied by the bank.
Why?
Because you're late on your car loan and your credit card is $1.25 trillion.
That's what's happening right now.
If you look at this here, the blue is application rate, which is the lowest it's been in 10 years, the last 24 months, the higher one, just first quarter.
None of that is higher interest rates.
Some of that is due to higher interest rates.
Okay, which is fine.
Which is fine because we see the decline coming from Q2 of 2021 when they started increasing rates and that just kind of came down, right?
And in the last 12 and a half, you know, 18 months, it's been flat.
But for rejection to be at 45.7.
All-time high since they've been measuring it.
Stop it.
That's the banking sector.
All time high since they've been measuring it.
Are you kidding me?
I am not kidding.
That's the banking sector saying that the economy is measuring it, though.
When did they start measuring it, though?
2010, 2012.
And so that statistic, I think, goes back to 2003.
Well, that's a good ample enough of inventory of data.
There's enough events that's happened since then.
Okay, so you said something while I interrupted.
I was speaking.
Both of us were speaking at the same time.
I want to make sure the audience hears what you said.
That is the way of banks saying what?
The economy sucks.
That's banks saying we have all of the fundamental information when somebody fills out a credit application.
We've got their jobs, we've got their income, we've got their credit score.
Underwriting.
Well, when they actually do it.
Well, then let me get into it.
So the banks are saying, I have your information here, and the stuff on here doesn't qualify for you.
Can we add one more thing to put in perspective?
Meta two weeks ago had 11% decline.
Remember the stock, Facebook, Meta had a big decline.
A week later, they sold to the street $25 billion in bonds.
How many times oversubscribed was it?
Because you know when they say oversubscribe, more people want it than can get it?
Not many.
5X.
There was $125 billion at the door willing to trying to get in.
Because they want to put the money to work.
And because they're going to get a fixed interest rate from Facebook.
Facebook's got to sell the bond at a rate.
So what they're saying is they trust more of the bond right now than they trust the actual stock price.
But that's why.
That number is why.
So it drops 11%, but Facebook is able to sell it.
But let me get to this.
I don't want to confuse the two.
I don't want to confuse you.
I want to stay here.
I'm going to stay here.
But it's all the same.
I understand it.
But we're talking about mortgage applications specifically.
So I want to get to the story here because this was a topic yesterday also when we were at the Goldman Sachs meeting when they asked the vice chair Rob Kaplan on what the thoughts are on 50-year mortgages as well as this mortgage, portable mortgages.
So Trump is considering portable mortgages.
This is New York Post.
Here's how it works.
Federal Housing Agency Director Bill Paulty said the government agency is actively evaluating portable mortgages, which would allow homeowner to transfer their loan from their current home to a new home when they move.
With portable mortgages, the homeowner would effectively be able to keep their existing interest rate in terms instead of paying off the loan and getting a new one.
It's a strategy designed to inject movement into a stagnant housing market.
Many homeowners would be buyers, have remained on the sidelines because they are reluctant to trade their sub 3% mortgage rates for today's loans hovering around 6.5%.
Realtor.com senior economist Jimmy Kimmel told Fox Business that these types of mortgages aren't compatible with the architecture of U.S. mortgage finance, nor would they fix the broader affordability problems facing the housing market if they were.
So the question is what?
I have a million dollar home, but I have a million dollar home.
I'm paying 3.5%.
Now, if I want to go sell this, yes, I bought the house at $700,000.
I will get $300,000 of equity out.
So if I get the $300,000 equity out and I go buy a different house, I'm going to have to go from a $3.5 to a $6.50.
So I'm better off staying in this and not having to remove that $3.5% I have.
This is a way of saying you can actually keep that interest rate and take that loan into a new house, sell your house and buy another one, and you won't lose that interest rate.
But how do they do that, Jeff?
Yeah, how do you do that?
How do you do it?
The question is, I mean, what bank is going to prove that?
You have a collateral swap.
You have to look at what is this house going to be a collateral for the new loan?
I mean, the logistics of that are pretty close to nightmarish.
The logistics to me would be who's going to entertain that?
Who's going to prove that?
And if they did, of course, you know how this is going to work.
What they're going to say is the government's going to come in and say, we'll guarantee.
We'll guarantee something about this to get banks to do it.
We'll cover you in case you thought you had this one house that you lent against.
Now the buyer swaps to another house.
If there's any problem with that house, the second house that the mortgage ports to, we'll cover the difference.
That's what's going to have to happen.
And I think that's the way that they're moving.
That would be a trillion-dollar solution, though.
I don't think it'll work, but I think that's what the government is aiming to do.
Okay, I take you back to 1982.
And in 1982, the Garn-St. Germain Depository Institution Act.
Rob will find it.
I'm sure he will.
And what happened is they sat there and they said, they came to Congress and they said, hey, it's 1982.
What were interest rates starting to do?
This is post-Carter.
Yep.
The interest rates were in trouble.
And so at that time, you could have an assumable loan.
When you bought my house, Pat, you could assume my loan and its competitively low interest rate as long as Jeff, my friendly banker, said, oh, let me check out Pat.
Yes.
Not only you, you determine the price yourself, but as long as he has the difference between the loan that you have and the price, you guys do it.
But you know what?
He's a perfectly fine consumer to me.
I will approve him to assume your loan.
And you got my 5% loan or my 3.5% loan.
And you were happy and you bought my house in 1982 until the entire financial sector ran to Congress and said, we need the Garn-St. Germain Depository Institution Act.
You have to make it legal for us to call all mortgages to full payment upon sale or transfer.
You have to make it legal for us to do that.
Here, here's your act.
You can do it.
Great.
And they all ran back.
And guess what?
Every mortgage in America had to be paid on sale of the house.
It wasn't that way before 1982.
And that way, the banks got to put the new prevailing interest rate on your house.
And that's how it worked.
And now they're looking to go back to that.
Not at all.
The banks are going to say, no, We're not doing this.
We're not doing this.
Because the banks would have to manage money differently.
If you had locked in fair and square for a 6% mortgage and the rates are at 9%, prime rate is.
I want to show you something, though.
Watch this.
Rob, can you go to the poll you just ran?
Just watch what the audience is saying.
He ran a poll.
The question is, are you in favor of Trump's administration plan of portable mortgages?
Okay.
Look what the audience is saying.
56% is saying yes, right?
Meaning, most people I talk to, they don't know how it works.
They don't even know how you're going to do it.
But guess what they're for?
Man, if you're going to do it, I'm for, you know, allow me to keep my rate.
Allow me to keep my rate.
To me, the sequencing of challenges you face with this is you have to go to the banks and say, guys, just transfer the rate to a new loan.
What's the big deal?
You already have the risk on there anyways.
Just transfer it.
No, I gave that rate four years ago.
I don't want to do it to a new loan.
The rates are now this.
I'm losing money on that.
Well, do it anyways.
It's okay.
Just do it anyways because you're better off having a client paying the mortgage instead of them defaulting on it.
And it's going to create more activity.
No, no, no.
We don't want that.
We're not even approving this the lowest, highest rate of us rejecting applications.
But you gave it to grandma for 30 years.
Stay with me, Tom.
Stay.
Please, let me just go through this flow real quick and then interrupt me.
So, and then so, but no, we're lowering, we're rejecting 47% of people with mortgages today.
We don't even want the application.
And they're going to go, yeah, but you have to do it because people are not buying homes because they can't afford it.
Yep, but I have to stay in business.
I understand you have to stay in business.
But we got to find a way to make money.
And then it's going to go to Jeff's thing, which the only solution is going to be what?
Okay, listen, wink, wink.
Just do it.
you know we'll give you the protection we'll come and protect for this you see where this is going i mean We aren't even talking about the real problem here.
Everybody talks about affordability.
It's the number one political issue across the spectrum.
It's the reason why that poll is like it is.
You cannot blame people for saying, I want this, because affordability is a problem.
But what are we really saying when we say affordability?
What we're saying is when we went through the pandemic, prices rose much faster than incomes did.
Housing prices rose much faster.
Car prices rose much faster.
People fell behind because of the pandemic and the lockdowns and the supply squeeze and prices going higher.
That's what people are saying.
What they're saying is, I don't have enough income.
I don't have a job that pays me enough to pay for all these higher prices, whether it be houses, cars, or even food.
We're going to talk about beef.
So we're not even talking about the major problem here, which is a macroeconomic problem of the Main Street labor recession.
We don't have enough income.
Now you said it.
I said it.
Now you said it.
Well, I like that term.
I think it fits really well.
I'm not calling the market.
I'm calling labor.
Me too.
Macroeconomic fund.
I don't care about the stock market.
Can you do me a favor, both of you guys?
Explain this to the audience that's watching this right now based on numbers data, which you mean by it.
So what is the difference between a labor recession?
What's the difference between other types of consumer recession?
What's the difference between other types of recessions that we have?
I don't think there's any real difference because to me, the macroeconomy has to be a labor economy.
It's not if we're seeing labor market that is actually shedding jobs, which means it's no longer growing.
It's no longer adding jobs.
It's actually subtracting jobs because companies are cutting back.
And why are they cutting back?
Because they don't have enough profitability.
There's not enough business coming in.
Generalized downturn.
If you have an economy that's shedding jobs, it's in a recession.
I don't care what you want to call it.
I don't care if the NBER, which is the group of economists that get together and decide what is a recession, what isn't.
We don't care what they say.
This is, again, like I said, this is the reason why people are so pissed off and angry is because they fell farther behind after the pandemic.
And with the labor market going into this recessionary condition, they're falling further and further behind.
They're not even making up the ground that they lost several years ago.
So people, this is what when they talk about affordability crisis, this is what we're talking about.
Always goes back to the labor market, jobs, and incomes.
There are not enough jobs.
There is not enough income that's enough to pay for even just the price changes from several years ago, let alone any additional price changes that come about this year and moving forward.
So, I mean, labor recession, that's a pretty descriptive term.
So let me come to you guys.
Here's a question.
And how do you address the affordability challenge right now going into 2028?
Both parties have to address the affordability issue, right?
Midterms is around the corner.
With midterms being around the corner, we're 12 months away from the midterms is where we are.
I want to say Calci and Calci is saying, give or take, I want to say it's Calci that said this, that's 70% likelihood that the Democrats are going to win the midterms next year.
It's going to be a plus minus more Democrats than it is going to be with Republicans.
That's what the numbers are at.
It could change right now where it's at, but the last time I saw it was at 70%.
So if it's going right now, yeah, there you go.
72% Calci has Democrats winning versus, and by the way, the closest it got was when, a couple of weeks ago, what was the number?
55, 50.
Okay, but it's pretty much Democrats.
All right.
So you guys are consultants to both political parties.
They want to find out how do you fix the affordability issue.
How do you do it, Jeff?
Well, one thing you got to stop doing is to make them same mistake that politicians have been making since the pandemic hit.
And really going back further than that, is to say the economy is booming.
This thing, the sucker's great.
Just look at the stock market.
That just pisses people off more than anything else.
You want to know why there's a socialist as mayor of New York City?
That's why.
Because people don't have jobs.
They don't have enough income to pay for things.
And here you are telling them how great everything is.
Well, if this is great, sign me up for socialism.
That's one thing you got to stop.
We got to stop saying the economy is booming.
And this tracks with political parties all over the planet.
You look at countries around the rest of the world.
You look at Germany.
Germany just changed governments.
It's already incredibly unpopular because they said, well, we're going to do this major fiscal spending push.
We'll call it a bazooka.
Massive, huge $500 billion Euro fiscal stimulus.
Not going to do anything.
It's all theater.
You got to stop with the theater and start attacking the band-aids.
Give me two more.
Two more.
Give me three more.
So stop talking.
Start the consultant.
Stop the government.
Start being honest.
Okay, start being honest, which is going to be hard, but what's the next one?
The next thing is to get the hell out of the way of the private economy.
We have way too much government interference.
One of the biggest problems that we've had since 2008 to 2009, what they call nowadays fiscal dominance, it's simply that every time the economy stumbles, what happens?
We need a stimulus package.
We need the government to come in and do tax cuts and massive spending.
TARP, we'll fix it.
That's where it started.
That unleashed the debt monster.
And that's what we need to stop government creeping into every aspect of not just economic life, but the bigger the government gets, the more it gets involved into your social life, too.
So we need the government to get the hell out of the way of the private sector and stop thinking that's going to fix every problem with this law or this band-aid or that band-aid.
We actually need the government to do what it was supposed to do when it came into office and say, get the hell out of the way.
Well, I mean, it looks like what could be happening here is it could be that they want to take the interest rates back to zero, lowering it, which we talked about it off camera when Tom was talking about every time they lower the rates to zero and it stays at that for two quarters, the whole quantitative easing.
If you keep it at two quarters, seniors who are reliant on the money that they're getting as interest rate cost them $70 billion.
So for instance, if I got $2 million in an account and I'm 72 years old and I'm getting 4% income off of that, I'm just making up a number here.
2 million, 4%, 80 grand every year, babe.
We're not tapping to our savings.
We're just living off the interest.
$2,800 a year, as long as their lifestyle is $6,600 a month, we're going to be okay.
We're going to be, oh, that's perfect, babe.
And then they do quantitative easing and then they go to zero.
And then that 4% that was given me 80 grand a year now goes to zero.
I'm getting zero.
So now my $2 million becomes $1.92.
Well, 9.2 becomes $1.84.
And the next thing you know, you took $70 billion away, $71 billion away, give or take from the seniors.
But Tom, going back to you, how do you fix the affordability issue?
Okay, I like what he said.
He said, number one, messaging with truth.
Number two, theater.
Couldn't you fake it?
Number three, get out of the way, you know, on regulation.
So that is, those are more broad.
Let me go more narrow so that we kind of complement each other here.
Right now, Americans are feeling a pinch for two simple reasons.
Inflation jumped under Biden because he printed all the money.
Number one, and those prices never came back down, especially cost of housing.
What can you do to help right now?
I believe what I'm seeing in the labor market and things, the Fed, who's been looking at these figures and right now doing a head fake on people.
And by the way, I looked it up today on some of the markets.
The Cauchy market today, it says it's only 50-50 to even get a 0.25 cut.
And by the way, economists, the CME Watch Group, just go to CME Watch, Fed Watch.
Yep, CME Watch tool.
Take a look at this.
These are everybody listening, watching the Fed.
They're at 50-50.
They only believe there's a 50% chance of a 0.25 cut by Powell in December.
There needs to be a half a rate cut and then hold, hold, and let that help people.
Also, you know who that helps?
That helps Estados Uniros, who has a great big giant refi of T-bills coming in the first quarter and the first quarter, I believe.
It's a giant stack of T-bills have to refi in the first quarter.
If you move the interest rate down, now Trump's government budget can refi those at a more moderated rate.
Now, let's go to the consumer.
Power and food.
What he just did is taking off the tariffs on fruit products, fresh fruit, and some things last week.
Very important, very important.
Now he's got to go to protein, chicken, pork, and beef.
You got to figure out how we help those prices come down for the consumer.
And the next one is power.
Right now, data centers, are I'm going to get pissed off.
Data centers are being built not with profits, but with bonds.
I looked at it last night.
It was up to 1 a.m. and I realized just how much of this data center build out is being bonds.
And they said, oh, we're making so much money on this and so much money AI services.
They are, but they're doing it.
And what they're doing is they're creating excess demand for a limited supply of electricity.
So the price is going up.
You take a simple stroke of the pen.
All it takes is Trump to do this.
Part of your bond has to be a two-year subsidy on the excess electricity that you're using so that the communities that are getting the benefit of jobs, there's a few jobs for construction and people that will actually work at the data centers, that their local electricity prices don't go up.
But don't do it as a government subsidy.
Don't do it as a tax credit.
Say, look, you want to build the data center?
Then you either have to do what Google did and what Oracle did, where they built the small nukes.
You know, they got the permits for the small nukes right next to data center.
So that's Google and Oracle saying, well, I'll just build my own power right here because there's not enough power for me to buy and I'm going to build my data center.
The other way I build the data center, power is right over there.
Fantastic.
Chesapeake will give me the power.
I think Chesapeake operates Three Mile Island.
Right now, how much percent of their Chesapeake's output for the restarted Three Mile Island has Microsoft bought for the next five years?
100%.
They're buying 100% of the output of the Three Mile Island power plant.
Microsoft is doing it.
So food, electricity, and interest rates right now and interest rates will help the credit card balances, but the power be very simple saying, hey, if you're building these data centers, you either have to build your own power or you need, as part of the bonds, you need to do a two-year prepay on Brandon.
How about you?
All right.
So easy.
You got to create a national gold rush around the idea of building homes.
Like, I don't want to hear anything about the 50-year mortgage or the portable mortgages or anything like that.
Like, cut taxes to zero for home builders, subsidize people who want to do it.
Create incentive programs where you can apply for a low-interest government loan to build a home, and then you don't get taxed on it once you sell it.
But these homes have to be protected from the acquisition of companies like Blackstone and BlackRock because that's another thing pushing the price up.
So I don't want to go all communist or whatever and say you can't buy houses, but the new houses, like from this point on, like maybe for the next five years under this program, can't be bought by a company because there's like a 4 million home shortage in America for these types of homes.
Cut zoning laws, remove regulations around lumber.
Like we have the second most lumber of any country in the world.
And we have a lumber shortage somehow for building homes.
And then we only produce 2% of the world's cement.
So the government couldn't invest and subsidize in companies that want to become a cement company.
It costs like $500 million to become a cement company.
We used to produce 80% of the world's cement.
Now today it's 2%.
China produces 50%.
So that's for housing.
And then I would say for food, why not invest in stuff like vertical farming and not be so reliant on the traditional farms?
Why not subsidize the ranchers who are getting crushed by the big four beef companies and investigate these big four beef companies who are kind of sketchy, by the way?
I think two of them aren't even domestic companies.
So they like low ball the hell out of these ranchers.
And that's why there's such a shrinking supply of beef.
So here's what I want to do.
While you guys are talking about this with labor shortage, there's two stories I want to read to you.
And you tell me what direction we should go with this.
So one story, Ford comes out, CEO for Jim Farley, says he can't fill 5,000 mechanic jobs at $125,000 a year salary, $120,000 a year salary.
We're in trouble in our country.
Rob, if you want to play this clip, go for it.
As of this morning, we had 5,000 openings, a bay with a lift and tools, and no one to work in it.
Are you kidding me?
Nope.
$120,000 a job a year, but it takes you five years to learn it.
Take a diesel out of a super duty.
It takes a lot of skill.
You need to know what you're doing.
And God forbid we ever get in a war.
Google's not going to be able to make, you know, the tanks and the planes.
So this is a self-defense for a country issue.
But how I think about it is, pause them right there, by the way.
Did you just hear what he just said?
He said, if we go to war, who are they going to go to to say, can you build this XYZ for me?
They're not going to go to Google.
They're not going to go to Apple.
They're going to go to these guys.
And it takes how many years, he said, to train to take a diesel.
That's it, right?
Master years training.
Master mechanic.
And by the way, he said it earlier when you said about education early on in the first three minutes.
But go ahead.
You were going to say something like that.
That is the whole problem right there.
What he's saying is that if somebody has to invest five years of their time and likely huge expense to become a master mechanic.
So yes, they're promising a $120,000 a year job, but somebody has to invest their time, effort, and money to become qualified.
And people do not want to take that risk.
Okay.
So this is coming to my next question, okay?
And I want to know what the solution is.
So if we have a labor shortage, if we have companies like Ford that are sitting there saying, hey, man, I need 5,000 people at 120.
I'm having a hard time.
If we go to war, how the hell am I going to build this stuff for you when the U.S. government comes knocking on the door saying, hey, guys, we need it right now.
We need you to build this for us right now.
Then a story comes out of Financial Times.
Number of new foreign students in U.S. falls 17% over Wii's visa worries.
And Jeff, I want to know what you're going to say about this.
You sound like a pretty reasonable guy.
So American universities, Rob, I think, got a clip on this one here.
Is this she's just giving the report on it?
Yeah, she's just giving the news.
I'm just going to read this here.
It's fine.
American universities have suffered one of the sharpest ever declines in foreign enrollments in the face of tough policies from President Trump with the number of new international students falling 17% this year.
A survey of 825 U.S. higher education institutions showed 57% report falling new enrollments by students, while only 29% recorded an increase, any increase.
The result raised concerns over the impact on universities of declining tuition revenue, along with the less tangible effect that having fewer foreign students will have an innovation and economic growth.
The data provided by the International Institute of Education and sponsored by the State Department compounds a drop of 7% in new international enrollments in 24-25, including a fall of 15% among graduates who make up the largest short.
This is a significant decline, which shows that government policies have implications, particularly at the graduate level, where the U.S. benefits the most, says Fenta, the chief executive of NAFSA, the Association of International Educators.
So when we're looking at this here, okay, and we're looking at labor shortage, Ford's having a hard time placing, companies are laying off, the debate about allowing others to come from other countries.
And President Trump says, we're going to have 600,000 Chinese students come in here to become students.
He gets pushed back by Laura Ingram, says, why not 300,000?
Well, you know, we want 300,000 more.
It's better to get the brains here.
You know, the colleges need students.
The colleges need money.
So labor shortage.
How do you solve it?
There is no such thing as a labor shortage.
The problem with Ford is $120,000 salary is not high enough.
You want to fill those bays?
Pay the market rate, the rate that will get people off of the couch to invest in their time and effort and become those mechanics.
You think that would be the change?
Yes.
There's no such thing as a labor shortage.
The only labor shortage comes about when companies are refusing to pay the market clarity.
Okay, so then who, if he's choosing those numbers, if you go to salary.com, his dad tells him it's not working.
I don't have the mechanics at $120,000.
Then you need to pay $250,000.
It's that simple.
You think at $250,000 he gets that?
I don't know what the number is, but it's higher.
So you think that's simple?
That's the solution.
This is the solution for any time of the year.
And then the other thing about the visas.
Does anybody here really think the number of students in college correlates with anything that has to do with economic advance?
We've had more people in college over the last 40 years, and it hasn't contributed much to what's supposed to, the advancement of the working stock of the United States.
You put more people in college, all it does is make money for the colleges.
And you said that to yourself when you read the article.
You said that's more money with the Chinese students coming in.
Does that actually advance American interests, whether it be economic or national interests?
Or is it just more money for the colleges to expand whatever it is colleges do these days?
Does it change if they're studying productive things, though, versus things that are not productive?
How do we know?
I mean, how do we know?
I guess what the economy needs, like if there's like people who are unqualified for needed jobs and then people start going to school for those jobs, is that more productive than people going to school for like gender studies?
But that's the thing.
Do the Chinese students come in and what are they actually studying?
They're not studying gender studies.
No, they're not sure.
A lot of Americans are, though.
But that's what I'm saying.
More people in college doesn't necessarily solve the problem here.
Yeah, Rob, can you do me a favor?
I don't know about that.
Can we debate that?
Can we debate that argument and take the opposing position?
Are you comfortable?
Take the opposing position.
Go with that.
The colleges do make the country more productive?
Yeah, no, but no, no, two things.
Not just colleges.
It's, okay, so if we are not willing to bring the best and the brightest in here.
The other day, I'm in Goldman Sachs, okay?
They had their orientation class.
I don't know if you caught what happened, Tom.
They had the orientation class.
I walked up to see who's at the orientation class.
Obviously, I'm not supposed to go there.
I walk up and I'm just sizing everybody up.
You know what I'm sizing up?
What do you think I'm looking at?
What do you think I'm looking at?
That's their new orientation.
It's a new orientation higher.
But what do you think I'm looking for?
Their eyes, like what their eyes look like?
I want to know ethnicity.
I want to know age.
And then I want to know attire.
Because I want to know what's the dress code expected when you're going through orientation.
I want to know ethnicity.
I want to see patterns.
I walk up.
Or something like that.
It's young male Asians.
Well, it's interesting.
Then I walk within.
They put a security right in front of the door immediately when we came back out, Tom.
I don't know if you noticed that part or not.
So you know what you notice?
You go on a floor, one of the biggest insurance companies in America, 300 engineers, 80% all Indians, okay, who are there.
Of the 80% that are Indians, some of them came to us from IIT Institute, which in many cases, IIT Institute crushes MIT when they put them against each other on education.
It's very hard.
One out of every 40,000 applicant gets accepted to IIT Institute.
Some weird number like that, Rob, if you can't verify, so I'm pretty accurate on what percentage of folks make it to IIT Institute, not MIT, IIT Institute.
So should we not entertain taking the smartest, the brightest of other countries to come here and help us out?
Or should we do it the other way around and make the investment here?
That's also the debate.
And I know we've had this debate, and it's something most people are not comfortable with.
But what would you say about that?
I think we could do both.
I think that we could be very selective of who we take here.
And, yeah, of course we want phenoms and people who are, like, excellent.
But, no, we don't want to get into a situation where we're deciding to choose somebody from overseas because it's cheaper and because the employer here – That's cheaper.
I'm not worried about cheap.
I'm willing to pay market, whatever the market price is, and even a little bit more.
I'm not saying 25% Tao.
I'm saying 50, 75% Tao.
Like you actually are willing to pay the money to get the best of the best.
Yeah.
And if it's the best of the best, that's fine.
Like that's a net positive.
If it's a small number of people, you're very selective with it, then that's one thing.
But I think it kind of bleeds into the wage thing where people, there are companies feel like they could pay less or people who come from overseas.
No, that's not what I'm thinking.
I'm just thinking the competition of if we have certain jobs that maybe we're not doing a good job training in, should we not put some competition for others to come in and compete for those jobs?
Or should we wait?
Now, his solution is there's 5,000 jobs at 120.
If he offered it 250, he didn't, you're just making up a number.
Like you're just spitballing here.
If it's 250, he's going to get those jobs placed.
Okay.
Maybe there's a point to it where you can.
But is that the solution?
Do I pay 80% above what the market is paying for me to hire whatever the person is?
Do I compete and bring some other people that want those jobs?
I don't know.
I'm asking.
I'm debating to see.
Think about this.
Like 93% of all student loans come from the government.
So why are we giving loans to people who are majoring in unproductive things?
Like if we need certain jobs.
I love that idea.
If we need certain jobs, why not just give loans for the majors that we need?
Then we'd have a bunch of engineers and AI people or whatever the thing in mechanics, whatever we need are.
We could flood the market with that if we only give loans for that for a couple of years for college students.
But we still have a whole mix of some useless jobs, some useless degrees, some important degrees.
So I think we could steer the future education in whichever direction we want to if we use the power of the student loans.
What do you think?
One of the problems with that is that, you know, like you said, the government gets involved in the business and then it becomes a price thing because the price of education goes way up, which means that people are spending inordinate amount of money on degrees that don't ever pay back.
That's what we're saying when they're unproductive.
Unproductive is you're not really creating value there and the value proposition is all screwed up by the government's interference.
So you don't have a labor market that's actually elastic enough to meet the match needs.
People are confused about which direction we go.
And this, again, gets back to the Ford thing.
With Ford not paying the market rate for mechanics, that skews where people go.
We want more people in trade schools to be able to do that, but yet they see the wage rate is $120,000.
That's not really enough because I'm going to have to make major expense to educate myself.
But if they were paying $250,000, that would draw more people into trade schools.
So there is screwed up market signals all throughout the educational system because of the government's interference.
And it's not really about deciding which jobs are going to be productive.
It's the fact that we flooded these colleges with just students.
I mean, we tell kids from the very beginning, you need to go to college.
You need to go to college.
You need to go to college.
And half the people should never go to college.
But because they go to college, the price of college goes way up, and it screws up the market signal for the entire labor market.
I agree with Brandon then.
The point I'm making is that maybe we don't need to keep pushing people to college, whether they be U.S. or foreign-born.
But check this out.
Here's a question.
So what if we go his route?
You know, you're at the meeting yesterday, and all these guys are talking about, I'm a G5, I'm a G3, I'm a G2, I'm a G4, fifth generation wealth, first generation wealth, second generation wealth.
And then the one thing, one of the families, they did a family reunion annually.
90 people show up, and it's getting more and more complicated.
The family had the biggest G Cheese company in Wisconsin, Sargento, am I saying correctly?
Sargento, yes.
Sargento, yes.
$1.7, $1.8 billion in revenue.
And one of the kids was talking about, you know, where it said, a lot of people, people, oh my God, so $1.7 billion.
Every kid must be a billionaire in their family.
That's not the case because you have to share that with 200, 300 people eventually, you know, 100 people who eventually got grandkids, all this stuff.
But if you don't hit certain numbers, the family doesn't fund your education.
If you don't go through certain criteria, I actually love the most basic concept of if you're not getting a degree in XYZ, why are taxpayers funding it?
No.
By the way, you're a taxpayer watching this.
I'm talking to you.
You're watching this podcast.
Just a very honest, can you guys just flood the comment section?
And if you do a super chat on this topic, I will read.
I don't care what the dollar amount is.
What would you say are jobs that if the government is funding to get a degree, let's just say some of these folks that we're paying for, what positions would you be okay with?
What type of degrees?
What would you say?
I'm okay with that.
I'm okay with this.
What would you for sure be against you funding?
You're the taxpayer.
What would you be against you funding?
There's no way in the world I want to pay for that.
What would it be?
Think like a parent, your kids.
If they say, Daddy, you have money.
I want you to pay for my college tuition.
What wouldn't you pay for?
You'd be like, you're out of your flipping mind.
I'm not paying for that, right?
What would it be?
Can you guys comment below?
Rob, can you read off some of the stuff that people are saying?
You know, okay, so engineering they pay for trade schools.
I'm seeing multiple trade schools.
Trade, trade.
By the way, Amir, trade school.
Timbo, trade, trade, trade.
Abraham Peters, he just gave a super chat, but not an answer.
So trade school, social studies, not paying for that.
Trade school, engineering.
By the way, 50% of 30% of the answers here are trade.
Engineering, okay?
Fashion design, not paying for it.
Plumbers, against all of it, against paying anybody.
Please remember that.
Political science from the list, too.
Of course, political science.
I mean, why would you get that, right?
Well, you know, Tom, what do you think about what Brandon is saying?
Because I kind of agree with them.
As a parent, I'm willing, you told your daughters, right, you had certain things that you're not paying for college degrees.
How come we're not doing that?
That's a very easy, common sense decision to make.
Well, I'm going to add a word to the debate here.
Underwriting.
We were talking about insurance.
I basically taught my daughters what the word underwriting meant.
Underwriting is the process by which a life insurance or an insurance will put a price on your policy based on risk.
How old are you?
Do you smoke?
Have you had cancer?
What kind of a car do you have?
Is it in a garage?
Underwriting is all around us.
And I expose to them underwriting.
I will cover your education and do things based on the usability and the value of the major.
You don't have to go into venture capital or that line like I did or something like that.
You don't.
But find something that matches your heart.
But let's go find something that's applicable.
And they completely understood it.
I gave them facts and data.
So I think we cause student loans.
If they're going to be independent student loans, go sign for your kid.
Let your kid get whatever you want.
But you co-sign for that loan the same way that you co-signed for their first checking account when they were 16 years old.
I had to do that for Bailey to get her the checking account, Pat.
I had to stand good for a $500 visa that's attached to her checking account.
You know where I'm going?
The government didn't help me.
But if the government would say, well, look, if you want to co-sign for your kid to have gender studies at Brown and you want to co-sign on that, go to your bank and get whatever student loans for your kid and co-sign for it.
But if you want the federal effing government to stand behind that and then to put one of their horrifying loan processors, these predatory loan processors on student loans, then wait a minute, wait a minute.
The underwriting standard for the United States would be this.
Now, the second, I'm going to give you another fact.
$44 billion comes into the economy because foreign students, by and large, don't get loans.
They come with money from those countries.
$44 billion comes in because they pay the tuition, they pay for books, they pay for room and board, they pay for food.
And once they pay for food, they pay for toilet paper.
So they're here out in the United States spending $44 billion on that.
And so they come back.
Now, here's the next part I go to.
You force the universities to use their endowments to subsidize everything from professor salaries to the tuition.
The purpose of the endowment used to be that, hey, I want to get a scholarship.
Hey, Pat, you're trying to, by the way, I talked to friends that did this.
They're holding a letter from Stanford and a letter from USC.
This is a real case study.
And they're looking at who's going to give you the best financial aid because you're an exemplary student from Glendale.
And they're looking at it and says, you know what?
I'm going to USC because I can get an engineering degree both places.
I can get a business degree both places.
But guess what?
I get a little bit better deal from USC.
I'm going.
Guess where that came from?
Their interest in their profits and their endowment.
How much did you say, Tom?
$44 billion?
$44 billion comes into the U.S. economy in tuition and other spending from foreign students.
So what do you do with that?
You're the president.
You're an advisor.
Do you say no?
If you say no, that means that that money doesn't come in.
And so the schools are going to screen.
Which would you rather have, the money coming in or the government financing a fine arts degree, taxpayers paying for it?
I step on the arrow hose at the federal government.
Which one of the two are you against more?
Because there's an audience that's going to say, I don't want neither.
I would turn down the foreign student visas, not to zero.
Some comes in.
And then I would adjust what the U.S. taxpayer is going to underwrite on those student loans.
And I think you're going to get there.
Okay.
Let me read some of these super chats because I rarely ask for this.
So limit federal student loans to those technical skills and jobs that need, that this nation needs to grow.
No student loans for gender studies.
This is OFD 56.
Okay, next one.
Trade skills and STEM careers.
This is Blake Castillo.
Okay.
Next one, elevate to the unknown.
Management information systems.
Okay, next one.
From Razor 3INITE, fund technical engineers STEM with a contingency of commitment, aka they work for the government for two to four years.
This also provides a return on investment and gives experience for private sector.
Interesting.
Next one.
Next one.
Abraham.
The answer to Ford is hiring from high school shop class as interns and train them up to master mechanics.
Now, I don't know if that's, but I like the fact that you're seeing what everybody else is saying.
Common sense.
Why are we paying for this stuff?
Doesn't make any sense to me that we're funding this stuff.
I think you've got a very good point that you're making, Brandon.
Thanks.
Jeff, I think you want to say something.
I was going to say that's not what government does.
Government doesn't do common sense.
Well, that's a good point.
Let's go to the next one.
Next one to me, I want to get into is Bitcoin.
You hear a lot of people right now saying Bitcoin free fall.
It's a, you know, this is it.
This is horrible.
Bitcoin price in free fall weeks after hitting all-time high.
Let me read this story to you.
So we got almost exactly one year after rising to above 90,000 for the first time in its history, Bitcoin has fallen back to its level, suffering a severe price crash.
A record-breaking rally took the cryptocurrency to an all-time high above $125,000 last month with some market analysis, fearing the student the sudden drop could be a beginning of a more sustained bear market.
Bitcoin was trading on $93,000 on Monday morning, marking a 25% decrease over the last six weeks.
Previous price cycles have seen Bitcoin lose around 75% of its value after hitting record high.
Here's what Michael Saylor had to say about it.
Go ahead, Rob.
Last time our next guest was on CNBC, he was expecting Bitcoin to be $150,000 by the end of the year.
Want to find out if he's changed his tune since late October, given the recent move in the crypto space.
You're looking at Bitcoin right now at $94,632.
Michael Saylor is here, strategy founder and executive chairman.
Good morning to you.
What do you think?
150 by the end of the year?
What do you think is happening here?
You know, I think we all want to go to the moon, but if you want to ride the rocket, you got to be prepared to pull the Gs.
Over the five years, Bitcoin's had like six brutal drawdowns.
If you roll the clock back 13 months, we were sitting around 68,000.
And then after the Trump election, we had this incredible rally from 68 to 106,000 in five weeks.
If you go back 14 months, we were about 55,000.
And so if you'd said we're going to go from 55,000 to 94,000 in 14 months, that would have exceeded any reasonable investor's expectations.
Over five years, Bitcoin's up about 50% a year on average for the five years.
Gold and S ⁇ P are setting the cost capital to 14%.
My company's strategy is up 71%, equivalent to NVIDIA.
There's no other stock in the S ⁇ P that's done any better.
So I think the volatility comes with the territory.
If you're going to be a Bitcoin investor, you need a four-year time horizon and you need to be prepared to handle the volatility in this market.
So population.
Okay, so what do you think?
What do you think is going on right now with Bitcoin, Jeff?
Like I said, I think it's a barometer of short-run risk taking.
I think what he just said is absolutely true.
If you're going to buy Bitcoin at least.
I mean, Bitcoin is a long-term thing.
It's not a competing currency.
It's a risk asset.
It's a store value.
It's not going to be replacing the dollar because we don't even use the dollar.
So Bitcoin is simply just a barometer of people's short-run risk taking.
So the price decline now doesn't mean Bitcoin's going to be wiped out or it's going to go to zero.
It just means that right now, there's a lack of demand for risky assets in the marketplace, which I think we can use as a gauge for overall short-run risk aversion about some of these other factors that have nothing really to do with Bitcoin.
It's not really about Bitcoin here.
It's about the market psychology.
Brando, where are you at?
Yeah, that makes sense that Bitcoin would be the first one to go, but I think it's super dramatic that you're saying it's falling off a cliff and this and that.
I mean, like you said in the video, like right before Trump got elected, it was in the 60s.
And just because Trump gets elected and they're expecting all kinds of favorable things for crypto, it shoots up to over 100,000.
And that's been kind of baked into the market since Trump got elected, like the AI hype and the AI buzz and that, like the AI narrative is like really the story that's been carrying not just crypto, but the whole market like since Trump got elected.
So I think it's normal.
I mean, I'm still, call me crazy, I'm still sketched out by Bitcoin because the creator's name means central intelligence when you translate it to English.
You'll never convince me that's not weird and we've never seen them before.
But yeah, in terms of just looking at like a chart, I don't think it's like a concerning crazy thing.
I think people are just getting shaken out.
Tom, where are you at?
So where I'm at is I see two major things happen.
First of all, all this macro, all the market uncertainty doesn't help.
Specifically, if interest rates are going to be higher, then I can get higher rates on cash and I don't have to go to riskier things like Bitcoin to get my return.
Higher rates means that those are less appealing.
Well, now we're seeing 50-50 for just a 0.25 rate cut and I'm now waving my flag for a 0.5 rate cut, as many others are for December.
I don't want to impact retirement fixed income.
So the first thing is macro market uncertainty is out there, made everybody nervous.
Then what happened this week is I call it the liquidation dominoes.
The liquidation dominoes, there is massive profit taking by the crypto proxies.
And the crypto proxies are the companies like Michael Saylor who basically have a product they're selling and they make profits, but basically they pile all this Bitcoin onto their balance sheet.
And so they're a crypto proxy.
The crypto proxies took profits because where we are right now, I believe we are ten dollars under where we were on January 1st.
Am I correct?
On a full, on a year-to-date basis.
I think it was right there, right?
That we're back where we started.
Did you enjoy 2025?
You're back where you started.
Well, then you have what also the leverage positions.
You know, investors that have a lot of cash may not have to do this, but investors with not a lot of cash read all the Reddit things.
It says, Hey, use 10 grand to buy Bitcoin and get another five grand of it because you can borrow against the 10 grand at 50%.
You follow that.
Yes.
They're all over the red.
You look at the Reddit logs and the Reddit chats.
Oh, do it this way.
Do it this way.
Well, guess what happens when the price comes down?
You get auto-traded.
What's auto-traded?
You have a margin account.
Hey, for your convenience, we automatically traded out because that asset was going down.
Your margin was different than 50%.
So we auto-traded and they happen.
I heard that in the last two trading days, $917 million in Bitcoin was sold on liquidation auto trades.
So guess what?
There's the other domino.
And then lastly, profit taking by the independent investors, where you saw the first part of this two weeks ago, when it started, people jumped out and said, well, I've made enough this year.
And those are the part-timers that aren't the long-termers.
So the short-term sold out.
You know, auto-trades took away people that were under margin.
Crypto proxies, you know, took some profit out.
And then everybody doesn't like the fact that the interest rates aren't going to go down, which makes a risky currency like Bitcoin more valuable.
Yeah.
So, okay, again, I think the best thing I took away from everything with this, if you're going to get into Bitcoin, have a minimum of a four-year way of looking at it.
If not, it's not worth it.
Almost like buying a house.
If you're buying a house for three months, it's a bad investment.
If you're buying a house for 10 years, five, 10 years, you should be fine.
So if you're buying a Bitcoin, look at it the same exact way as well.
Not day trading like some of these guys are doing.
Let's go to the next story.
Next story is the following.
Retirement age.
Okay.
Most Americans think 63 is the perfect age to retire, but they're dead wrong.
Here's the big number to bet on.
You ready, folks?
Earmuffs.
If you're that age, 63 or higher, and you're thinking retirement, you're probably not going to like this story.
So I want you to brace for impact on what number they're giving away here.
It doesn't start with the number six.
Okay, so let's go through it.
According to 2024 Mass Mutual Retirement Happiness Study, most Americans, retirees, pre-retirees, consider 63 to be the ideal age for retirement with an average retirement age of 62, which coincides with the earliest age for claiming Social Security benefits.
Today's retirees are coming close to that mark, but future retirees may find it difficult to retire in their early 60s.
More than a third of pre-retirees, 35% report that their retirement savings are short of where they would need to be to completely retire at an ideal age, according to Mass Mutual study.
Meanwhile, 34% of pre-retirees believe that there's a decent chance they would outlive their savings with 20, 20%, 22% of retirees sharing the same concern.
Put simply, retiring 62 or 63 may be popular, but this may not be ideal when you consider all the factors that are in place.
Your Social Security benefits would roughly be 30% lower for you to tire at 62 versus full retirement at 67, depending on where you were born, according to new Social Security Administration.
Another factor to consider is longevity.
As of 2023, overall life expectancy in the U.S. is 78 years old, according to Center's CDC.
However, typical Americans' life expectancy can stretch into 80s and even 90s depending on their gender, date of birth, and state according to the Yale School of Public Health.
In other words, if you retire at 62, you may need to ensure that your nest stake is big enough to keep you afloat for up to three decades when you consider all the data and eligibility.
It may seem the ideal window for retirement may be around 67 years old.
Okay, so what do you think about this, Jeff?
You got to work as long as you can.
I mean, it's a simple truth.
I know, like you said, people don't want to hear that, but it's the actual truth.
I mean, not only are we living longer, the cost of living longer continues to go up.
I mean, healthcare prices continue to spiral.
We haven't fixed those yet.
So you got to factor that in.
You got to work as long as you can.
Tom, thoughts?
I'm looking for a statistic here, Rob.
Maybe you can help me.
I read that 30% of your lifetime medical costs will happen in the last 18 months of your life.
And so you need to be ready for that so that you're not wiped out prematurely.
Number one.
Number two is I look at a lot of people that I know, they want to work and they want to stay active.
Now, do they want the same job they did if they were a mechanic at Ford with the arthritis?
Can they continue to be a mechanic at Ford?
No.
Could they be a tutor or a teacher part-time?
Sure, they could.
I know a lot of people that want to stay active.
And you look at them, and I'm serious.
I look around the people I know, they say, I'd like to keep doing something, but I'd like to keep doing something that I enjoy doing.
And it's not walking up and down a Florida beach with a metal detector.
I really want to do something I enjoy, but I'm not going to work that much.
But I want the social aspect of it and I want to feel productive.
People that talk about, also, I think there's an average lifespan for people that take permanent retirement and actually do nothing, not even community service or volunteering.
It's shocking that how much shorter the lifespan is versus the people that do something in terms of community service or keeping their 30% of your lifetime medical hitting your final 18 months.
Yep, there it is.
So you better be ready for that so that number one, you can pay for it.
What's a good way to do that?
Get some basic benefits from a company that's willing to pay you part-time and do something you really love doing and stay active.
Makes sense.
Brandon.
Yeah, so remember we talked about that time that if you, for 40 years, you make $60,000 a year, you give 10% of that to the SP every year, you end up with 2.3 million after 40 years.
So that's one thing.
We've conditioned people to not save like that because of the stupid FDR social security stuff that like got people into the state of not having to save money.
And like we just create this mindset of, okay, Social Security, 401k, you're going to be good.
Don't worry about it.
But nobody's good for it.
It's like, I think that $5 million is probably the number that you need to retire if you retire at 70 to not be stressed out.
But it's offensive to think that people will still want to retire in their 60s.
That was the age in the 1930s.
So, you know, I would make fun of anybody who tried to make the case for retirement in their 60s.
If you can do it and you chose to do it, it is what it is.
If you set yourself up, you know, if you, if you say, well, I'm going to retire whatever age I want.
You know, listen, if that's what you want to do, what I've noticed is people who retire early, they're typically miserable.
Okay.
And I'm not talking about everybody.
The happiest people I know, my dad's one of the happiest people I met in my life.
He's 83 years old.
He's still working.
And I have relatives that stop working in their 40s.
They're the most miserable people I've met in my life ever because they stopped working.
So it's not even about the money.
And oh my God, life is not all about work.
And life is, no, it's not about that.
It's about contributing.
It's about constantly being seen as that person is needed.
My dad till today is needed.
We need him.
Do you know what I'm saying?
Like we need him.
There's a value for the individual to say, this family needs me.
Dad, we need you to go pick up the kids.
We need you to go drop off the kids.
Man, I am still needed to exist and live and serve and give.
We need this to have that element of being there.
But for some people, like Rob ran a poll right now, if you look at the poll, it's interesting what it looks like.
If you can pull this up, you know, what age do you plan on retiring?
Look at this.
Some people put before 60, 22%.
Early 60s, 25%.
Late 60s, 24%.
70 plus, 29%.
Our audience, 29% are planning on working.
to past 70.
The people that want to work past 70, I want to have dinner with you.
I want to meet you.
I respect you.
Everybody, like all of you guys that you're watching this, but the people that are 70 plus, we should have dinner with all the people that are in the 70 plus category.
And we should do it later on when we're 70 plus and everybody's got a job or a business.
We sit down and talk to each other.
Well, in my experience, one of the reasons why people, early retirees are, as you said, miserable, because a lot of them are, is because they continuously fret about having enough savings.
They're always a slave to the market.
Am I going to make enough in the stock market?
Like you said, the idea that the government's going to cover you, that has been embedded in the national psyche, and that needs to go away completely.
But even those who realize that the government's not going to be there, is the market up today?
Is it going to be up next week?
Oh my God, if the market goes down, what if we go into a recession?
What am I going to do?
That's why they're miserable.
So if you work as long as you can and get to earned income or save, God forbid, what you actually need for retirement, that's where the happiness is.
Okay, so this next story, though, Jeff, is the number of households living paycheck to paycheck has risen.
Why?
This is a USA Today story.
Why?
Labor recession.
We're going to come back to it here.
Why?
Why is this happening, folks?
So Rob, if you want to play this clip, go for it.
New Bank of America analysis shows one in four U.S. households is living paycheck to paycheck with almost nothing left after the basics.
Researchers track spending on groceries, housing, gas, childcare, and utilities.
They found many families are using 95% of their income just to cover those necessities.
The report highlights a K-shaped economy where higher income Americans are doing far better than those at the bottom.
President Trump has dismissed affordability concerns as a con job pushed by Democrats.
Okay, so before we get into those stats, quick feedback to USA Today, editor, turn the music down.
Can you forward this to the editor of USA Today, please, if you're watching this?
Why do you have the level so high?
Lower it.
And I like your taste for music because it was like they're trying to find that blade.
Remember Blade, the movie back in the day, like the opening of the movie?
I like the taste for music, but just lower the temperature a little bit on that, Wesley Snipes.
Tom, your thoughts on this?
Well, this is kind of what we've talked about today.
And so I won't be repetitive, but this is the statistics proving what we're saying is true.
The Biden recession raised the price on things.
And right now, people are $1.25 trillion in credit card debt that they're actually using for gasoline and food.
So that doesn't mean that they're using that and paying it off at the end of the month.
They're not.
And so they've got some problems here.
And this is why I was saying that I feel that if the president took immediate steps on energy and what was the two things they talked about, energy and groceries, and take steps on those two things to help Americans with affordability.
Because guess what?
There are jobs coming.
Is there a panacea coming?
No.
But there's just Toyota announcing a battery plant in what, Tennessee or something that's going to have 5,100 jobs at that battery manufacturing plant.
So in other words, jobs are coming.
Things are happening.
But we have a gap between the this is the time where we're in the hospital bed and we're waiting to get better.
And so there's a lot of things we have to do for Americans.
And this is what they are.
The other side of it is, and I'm going to put this just as 10% of it.
You know, there's an awful lot of consumption spending in the United States that the average consumer could pull back on.
I mean, how many subscriptions do you need for, you know, for cable and digital media?
Do you need Netflix and Hulu and Dan and Dan?
You know, when you look at some of those things.
You know, there's an opportunity for people to be a little bit more efficient with the dollar.
And they'll say, no, because, you know, when I'm feeling down, I really need those things.
But right now, we could do things for the American household, Pat, if we want to as a country.
And Trump could start with a stroke of the pen.
And then I think he should be waving this flag is saying, this is what I inherited.
This is now coming home to roost, but I'm the guy that's going to fix it.
I'm going to start today with some energy things and some food things, and I'm going to help.
But he is right.
Every about the media wants to take everything and turn it into affordability and beat the crap out of him with it.
So the president is correct that the Democrats want to cause everything to be that and to blame you for that.
Oh, it was colder today in Nebraska.
That's an affordability thing that's the fault of President Trump, right?
You know, missile found in Cuba footlocker.
You know what?
If American affordability had been different, that missile wouldn't be there.
They can't play that freaking game.
And that's where the president has got really thin skin and he should have.
But right now, he's got the pen.
He's got the pulpit.
He's had really effective policies that he's put in.
He's negotiating with people like the Saudis we saw.
He's got the power.
He's got decision momentum.
Go after food and energy right now and show America what leadership is all about on affordability.
Jeff.
Hey, Rob, can you pull up, go to St. Louis Fred, real personal income excluding transfer receipts.
This is an income stat.
It's a broad income stack that shows you the aggregate level of private income in the economy.
It's one of my favorite databases.
Yeah.
What do you want?
One of the few things the Fed actually does.
Fred, Fred, St. Louis, Fed, Fred, and then real personal income excluding transfer receipts.
So this is just private income and it's adjusted for prices.
There we go.
So you got real disposable income and real personal income.
And you notice, first of all, in 2008, that series fell off and it never came back.
We've been living in an economy for the last almost 20 years where you don't have enough income.
And then you look at 2020, just after the spike in 2021 and 2022, it levels off again.
So what I'm saying is American income has been falling further and further behind, further and further behind, and people know it.
That's why they're all upset to voters.
The voters are upset.
That's why they're set up politicians.
They keep falling further and further and further behind.
So the statistic that we were talking about here, was it one in four living paycheck to paycheck?
I actually think it's higher than that.
I think it's probably closer to a third.
Well, let me tell you what's interesting, what you're saying, because, Rob, can you pull up the poll?
Our audience.
Our audience is like, it's not like they're watching a show that's socialism, that rich people are bad and capitalism is horrible.
Our audience, Poland, living paycheck to paycheck.
Zoom in.
Okay.
3,000 people voted 59%.
It's more like it.
Again, it's not a, you know, labor market, whatever you want to call it.
I don't want to, who cares what we call it?
It's an economy that doesn't work.
And I hate the term K-shaped economy, by the way, because every economy in existence is K-shaped.
You go back to the Great Depression.
Rich people are doing well in the Great Depression.
An economy is doing well when there are few people in the bottom part of the K.
The statistic we just went over for real personal income shows that there are way too many people in the bottom part of the K.
It's lack of income, lack of jobs, lack of labor market mobility and growth.
That's why people are living paycheck to paycheck.
And one of the drivers in 2008 was shortly thereafter, was a dramatic change to the cost of healthcare in America driven by ACA.
And so when you all save money on health insurance, did you get the message?
And if you, if you want, you like your doctor?
No.
Yeah.
I kept, no, I didn't keep mine.
You keep your doctor.
But, Pat, right there, if you go, if you could also look, and that wasn't the only thing, but it was a major impact on the American household.
The truth about what happened to the cost of health insurance for everybody else except the 30 million people that supposedly got Obamacare and got benefits.
And look, that we never recovered from that.
So we created the gap.
You see how the lines stay together remarkably?
It's getting wider, Tom.
That's a concern.
But now at the top.
The last two years.
This is why people are so upset about the 2008 bailouts.
Because that was a watershed moment because they think, well, the bankers got bailed out.
I've been falling further and further behind for 20 friggin years.
I don't blame them.
No, I don't either.
I mean, you have to look at that.
You have to look at that.
You should have let some of those companies go and this too big to fail concept.
The idea was, play a little bit of devil's advocate.
The idea was if we bail out those firms, that wouldn't happen.
But it did.
But it did.
Yeah.
And nobody's ever accounted for it.
Who's the gentleman that we bring the economist that we've had on a few times?
Spencer Richard Warner?
Richard Warner.
Richard Warner that we bring on, and he breaks this down.
They call him the godfather of quantitative easing.
I think that's the nickname that's been.
Quantitative easing didn't work.
It didn't.
It did not work.
Have you guys done anything together or no?
You and him?
No.
Never have.
No.
Yeah.
Brandon, where are you at with this?
Yeah.
Trump's got to stop acting like inflation is gone because it's kind of like gaslighting everybody when you're saying something that's different than the reality.
Like he's going to lose a lot of people if he keeps saying this.
Like we would respect a plan of action if he came out and said like, okay, this is this way because of this, but to act like it doesn't exist, to act like, no, the stock market's great.
So the economy is great.
And that's disregarding probably 80% of the population.
So I don't know if he actually thinks that that's the case, what he's saying, or if he's trying to.
Well, this is what they're saying.
A year ago, Thanksgiving to today.
Classic holiday feast, down 3%.
Dinner rolls, down 22%.
National brand frozen vegetables, down 15%.
Stuffing, gravy mix, fresh cranberries, down 3% to 4%.
National brand pumpkin pie, down 3%.
Prepared mashed potatoes, down 1.5%.
So they're sharing some of these numbers on what's going on that groceries is down a year over year.
That doesn't mean it's not lower, period, but they're giving a date on what's happened since Biden was in versus him.
Well, have you ever seen the way that the government measures the CPI where if one thing gets too expensive, they change the things in the basket so they can make you play with the number?
So I don't think the vast majority of our government data is complete BS.
So when they give us a number, I don't trust it that much.
Yeah, I think CPI.
Look at this year.
Look at this year.
Look at this year, Tom.
Change from 2024, 16 pound, is that 16 pound?
Frozen turkey is down 16.3%.
I don't think that's poundo, Rob.
Is that a?
No, it is.
It's a 14-pound, I think is what they call a Tom Turkey.
So 14 to 16.
It's like a 10-person thanks to it.
Okay, got it.
So down 16.3%.
14-ounce cube stuffing makes down 9.
Dinner roll, you saw the one, 3-pound sweet potatoes down 37%.
One pound of veggie tray, carrots and celery down up.
So I'm sorry, up 37, up 63, up 17 frozen peas.
Up a gallon of milk is up 16.3.
That's big.
And then miscellaneous ingredients down.
Canned pumpkin pie, about the same.
Two frozen pie crusts down 0.8, half pint whipping cream up 3.2.
So some up, some down.
But listen, if 60% of our audience is saying they're living a paycheck to paycheck.
And by the way, for some of you guys that also said, can I challenge you a little bit?
So 60% of you guys that said, are you also part of that camp that said you want to retire before 60?
Are you also part of that camp that said you want to retire?
you know, early 60s or late 60s?
You think that mindset is serving you financially?
Don't get me wrong.
I understand what's going on with the economy.
Totally get it.
I understand what's going on with challenging things are living paycheck to paycheck.
But maybe we can also have an adjustment in our mindset, not saying they don't need to do their things, but also for us to have real managing of expectations of what it's going to look like.
The odds are, most of you watching this, if you're below 40, you're probably going to touch 90.
Okay?
You're probably going to touch 90.
85, 88, 87, life expectancy with the way things are going to be, who knows where we're going.
So we need to be also managing expectations better with how things are moving forward.
Let me do one other story here before we wrap up.
Here's a story I'm going to go to.
Blue Owl, okay, plunges to 2023 low after blocking exit from fund.
Okay, so let me read this to you.
I know, Jeff, you and Tom both have a lot to say about this.
I'm going to come to you and we'll wrap up the podcast with this here.
So Blue Owl Capital Inc., shares have fallen to their low since 2023 December.
After the alternative asset manager restricted investors from redeeming capital from one of its oldest private credit funds, shares dropped almost 6% on Monday, closing at 13.78.
The firm announced earlier this month that it would merge its $1.8 billion non-traded business development company, Blue Owl Capital Corporation II, with its $17.6 billion publicly listed vehicle, Blue Owl Capital Corps or OBDC.
But investors in non-traded fund won't be able to redeem their capital until the merger closes, which is expected to happen early next year.
Invested in the acquired vehicle will swap their holdings for OBDC stock.
That means they could see paper losses as much as 20% if the deal closes that current share price, given that OBDC shares are trading at much higher of a discount compared to the value of the fund business.
Jeff, thoughts on the story?
There is a growing problem in what's called private credit or shadow banking, whatever term you want to talk about it.
It is potentially, it could, if it continues to go in this direction, it could turn into a financial crisis.
And the reason is because a lot of this private credit, without getting into really the deep weeds here, it's just a source of re-lending in the economy.
So you have these investment funds that borrow, they get seeded by wealthy investors, a lot of hedge funds, things like that.
They borrow in wholesale markets like Repo to leverage up the returns.
And it's basically these investment funds, these private credit shadow bank funds are blank balance sheets.
They've been heavily involved, huge volumes over the last several years because the regulated banks haven't been lending in risky sectors of the economy.
So private credit funds have been absolutely banging the table on volume, volume, volume, and credit growth without really paying a whole lot of attention to the fundamentals, to the underwriting.
Underwriting has gone by the wayside here.
There's that word again.
Yeah, exactly.
And it's a very important word.
We see this in every credit cycle in human history.
Greed takes a hold of everybody.
You rationalize away the risk.
All the kind of stuff of bubble, all the bubble behaviors that we associated in 2008.
We're seeing it again here in 2025 in private credit.
So what that could potentially lead, what's really happening is there's a lot of losses because there was a lot of dumb lending that took place over the last several years as they were voluming up and growing and whatnot.
We don't know how because it's sort of in the shadows, we don't have a real idea of what those losses might actually end up being.
And of course, that feeds into mistrust in the marketplace, and it could from there potentially spill over into something bigger.
So what we're trying to figure out is how many losses there are and who has them.
And if there are enough of them, who is going to end up paying the bill?
The problem with that process of a downside of a credit cycle is that it can spill over into the general marketplace, where if there's not enough information, and believe me, there is not, then people just say, screw this.
I want my money back.
This is what happened in the earliest stages of the 2008 crisis.
And I don't want to get, I mean, I'm not making a comparison to 2008 in any other way, then that's just the process it takes.
What you had is you had a bunch of hedge fund investors that were earlier exposed to subprime mortgages and really subprime mortgages that looked a lot like this, securitized structures and whatnot.
You had hedge funds investors that said, I don't know what's going on here.
I'm not getting any answers from my fund managers.
They're not telling me the truth.
All I know is that there's fun guys over here that are losing tons of money.
I don't want to be one of those.
Give me my money back.
So what you had was a bunch of hedge fund redemptions hit the marketplace, which then created a cascade of selling that became the 2008 crisis.
So what we're seeing here with the Blue Owl story is the latest in a series of escalations moving in that same direction.
It started with Tricolor, then it was First Brands, then it was a couple of small regional banks that were exposed to First Brands, and it was Primalend.
Then we started getting notice from UBS.
UBS said we're shutting down a couple of our hedge funds.
Why?
They started getting hit with redemptions.
And so this Blue Owl story is, again, the same thing.
Hedge fund investors are saying, give me my money back.
And these funds are not even, they're not even exposed to the bankruptcies that we see so far.
And so what that potentially tells us is that the investors in these institutional spaces are getting cold feet about the entire space.
And if that's the case, then you have what started out as potentially a credit crisis starts to become a liquidity crisis.
Well, exactly.
And now for everybody that was listening to that, I'll give you an easy visual.
In the movie The Big Short, you have the wealthy individual, I forget what his name was, comes in and sits down with Michael Burry and says, we want to take our money out.
You can't do that right now.
I'm freezing all withdrawals.
He says, Michael, you can't do this.
I want my money back.
I'm calling my attorney.
Remember that whole interchange?
That is exactly what we're talking about here.
And Blue Owl was trying to merge things together.
They were literally trying to build the Jenga that was built on the table in the big short where they talked about all this because they were trying to take Blue Owl 1 and Blue Owl 2, put them together so that they could have diversified risk.
And they said, you can't do a redemption while we're putting this together.
Well, then, guess what?
Then the merger broke.
They couldn't get it together.
They couldn't get all the approvals they needed, so it stopped.
Meanwhile, we covered Tricolor last week on used cars, where they found that the asset value of all the used cars that were out there was less than the value of the subprime auto loans here, which is why everybody was saying, oh, it's all subprime, subprime, but it's not.
Now you have this happening.
And by the way, U.S. regulators have fired the first shot, and it's called HPS Partners.
HPS Investment Partners, they're a private credit arm of a company called BlackRock.
And they're responsible for running highly leveraged but high returns.
So their charter, go find things that maybe might be untenable for other people, will be smarter.
So they put 400 million back by receivables.
The receivables of the companies, Pat, appear to be fake future sales.
Wow.
So now BlackRock's got HPS going, wait a minute, these guys lied to us.
The telecom guys lied to us.
You never checked.
So now BlackRock is like, and BlackRock's saying, it's not us.
It was a division of us at arm's length that we call HPS.
Bologna!
It was you.
It was HPS.
You knew them, but you've deliberately set it up to keep some distance there.
But now the federal investigators are coming in here going, hey, you 18-year-old college boys got beer in there.
Are you having a party you shouldn't be?
And so that's the knock at the door.
So what we're seeing here is some things out there.
When times get good too long, Pat, what happens?
People get sloppy.
You've talked about it.
You've talked about it so many times in the businesses that you've ran that I've watched you and that I've sat next to you and watched you run them.
When things get really good, sometimes that's when people get sloppy or get a little careless or cut corners.
Ladies and gentlemen, your private capital market and it's coming.
The problem is that the private capital market is huge.
It gotten to be really huge.
So it actually can impact a lot more than why in 24 did BlackRock agree to acquire it.
They wanted the return.
So you guys have figured out European telco and you figured out how to get some of the bonds on the equipment building they have there and you've done this.
Yeah, I'll give you $12 billion for that whole stack.
That's what they did.
Now U.S. investigators are going back going, wait, You're telling me some of this was fake receivables and sales that didn't exist.
So BlackRock's a bad underwriter.
Nobody wanted to underwrite.
Everybody wanted to do its bubble behavior.
Everybody just wants to return.
I want the $12 billion because I need the return.
I don't care about that.
I've got the red light on diligence.
We know personally, we know a company that is at that seven-year mark of having raised a ton of money.
And those guys are coming saying, hey, we need that money back.
We need that money back.
We don't care how you get it.
We need that money back.
You've reached that moment here.
Did you have any thoughts on this?
I'm going to go to the Tim Cook story first.
Just quickly, I think we're like, it's crazy to me that nothing's happened in the last 15 years where there's been this like great growth in like the stock market asset prices.
So like I'd be shocked if something didn't give eventually.
So just like you saying.
Yeah, last one here is Tim Cook.
I know this is one you wanted to talk about.
Tim Cook may step down as Apple CEO as early as next year.
Says reports.
This is from Entrepreneur Magazine.
Rob, is this him speaking or is this his Reuters report on the success?
Go for it.
Go forward.
Apple is stepping up its succession plans as it prepares for CEO Tim Cook to step down as soon as next year.
That's according to a report in the Financial Times, which cited several people familiar with discussions.
The report said that John Turnis, Apple's senior vice president of hardware engineering, is widely seen as Cook's most likely successor.
Apple insiders were quoted as saying the company's board and senior executives had recently intensified plans for Cook to hand over the reins after more than 14 years at the helm.
The report also said that Apple is unlikely to name a new CEO before its next earnings report in late January, which covers the critical holiday period.
Cook became CEO in 2011 after Silicon Valley legend Steve Jobs resigned, ending his reign at the tech giant he co-founded in 1976 in his parents' garage.
Brandon thoughts.
Yeah, so I guess you could take the approach with us of Apple wouldn't be what it is today without Tim Cook.
But also you could take the approach of saying that Tim Cook was just like this conservative guy who inherited the creations that Steve Jobs already created and played it safe and maybe, you know, was the right fit at the right time where he just did the conservative things instead of the overly aggressive things.
And they blossomed into like the $4 trillion company because of the conservative nature of him.
But also, people are criticizing Apple for not being innovative enough and not doing anything with AI, not creating a lot of new products over the last couple of years.
So I think it's kind of like a debate between those two things.
Like, I wonder what would have happened if Steve Jobs had not died and wasn't CEO from until today instead of Tim Cook.
Maybe Apple wouldn't be the same.
Maybe he'd be much bigger.
But I don't know.
I think that's something interesting to consider.
I don't think it'll be, like, I think it's probably time for him to step down.
And it could be a good thing because I kind of have a point where they haven't done anything.
That's the criticism.
The criticism right there, what you said.
What is the new product?
So, versus if Steve was there, maybe they would have new products.
To me, I'm 50-50.
I think sometimes crisis happens, and nobody expected him to help.
You know, when he got his cancer, he started doing his walks, and everybody's wondering who are you going to get?
And he brought the finance guy on, bit of a guy that's the safer guy.
And he came in and he did a decent job.
He took it from where it was at.
And right there, if you look at it, from October 5th, 2011, which is when Steve Jobs died, to today, actually, was it October 11th when he died?
October 5th, 2011, yeah, when he died, to today, 2,280% return.
And you know what I did?
I ran 14 years prior to that to see how that compares against Steve Jobs.
Steve Jobs was at the previous 14 years, he had a rate of return of 8,600.
So he 86X the business, where Tim Cook 23X.
But that makes sense.
The company was newer.
The company was, you know, had newer announcements that was being made.
A lot of the products were made under jobs.
So you would expect that uptick.
But Tom, where are you at with this here?
So a couple things.
First of all, I think he did a good job making a very nimble, profitable, driving Apple.
But the succession plan that they needed, they needed five years ago, and it's the product succession plan.
It's to diversify that.
I'll give you a very interesting stat here.
At its peak, Apple had 18% global phone market share.
Because remember, once you get outside the United States, Android's everywhere.
That's right.
And now it's 17%.
Now, the smartphone marketplace is bigger.
So the 17% is of a bigger pie.
However, the pie is now looking to slowly shrink for two reasons.
One, most everybody has a phone.
Phone penetration isn't going to be the magic push.
Get one for mom, get one for your kid.
We've played that game, right?
In Europe, in the United States, and in developed Asia, which is Korea and Japan.
All of that's there.
However, the other part of it is they're making phones too good.
People are not replacing their phones the way Apple wants experienced.
So people are keeping phones longer.
And if the economy is not so good and the phone's working just fine, you don't replace it here in the U.S.
And so they need a new, they need more product, they need more push.
And I think the next CEO is going to have to inherit an Apple that just like under Tim Cook needs to kind of find its way forward.
Jeff.
I think what you said exactly right.
I mean, the criticism is, why didn't Apple reinvent itself to a certain extent 10 years ago?
Were they just happy just, you know, the business that they had built, the jobs had built, and just managing the mature life cycle of the business?
And why weren't they pioneering new fields and technology?
Did you see who's replacing Tim, though?
The VP of product, right?
The SVP of product.
Did they get the message a little bit too late?
To your point, did they get a little bit too late?
Yeah.
But guess what?
Listen, they're making a move.
We're going to learn.
This guy here, you're going to hear a lot of his name if this guy ends up replacing him because he's reporting to Tim Cook.
So he's been a hardware engineer since 2021.
We'll see.
We'll see what's going to happen.
University Penn guy, what else do we know about him?
He began his career as a mechanical engineer designing virtual reality, et cetera, virtual research systems.
Joined Apple in 01 as a member of the product design team working first on Apple Cinema Display in 2013.
He was appointed Vice President of Hardware Engineer under Dan Rizzio, and he overseed the product of AirPods, Mac, and iPad.
All right.
I mean, sounds like a qualified guy for them, but we'll see what happened.
Having said that, folks, we are at the end of the podcast.
Jeff Snyder.
Really enjoyed having you on.
Jeff's got a YouTube channel as well called the Euro Dollar University.
If you haven't yet subscribed, Rob, can we put the link below for them to go follow?
