Epstein Bill Passes, Trump's 'Piggy' Slam & MBS Visit, Bitcoin Freefall + Tim Cook Steps Down? | PBD

I don't I don't 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 her why are you giving these kids so much homework turn off your phone please 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 until 1 o'clock in the morning? You tell me the positive of a sixth grader doing homework until 1 o'clock in the morning.

How are we going to get them to be fair?

Wait, wait, wait. It was 11 o'clock a couple of seconds ago. How are we supposed to get-

We mentioned it was going to be 2 o'clock.

Listen, we need 7th graders in factories making iPhones, 16 hour shifts. How are we going to do it if we don't give them proper education in 6th grade?

We need trade schools so they can have Ford mechanics.

That's exactly it.

Anyways guys, please. Manual dexterity tests. Let us get back to our fights here, but we have, we have, I am surrounded right now by three geniuses. Okay, these guys are brilliant. Like, 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 podcast. And then obviously in my opinion, Tom's one of the sharpest guys I've 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 1045 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 there, Rob Kaplan, talking about what he thinks is going to happen with the marketplace. Emmett Smith gave a talk.

I can't even, 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.

Exactly right.

He was governor of Chamber of Commerce, the whole enchilada.

He was phenomenal. Yeah, and then the governor of Oklahoma City, Oklahoma was there. A bunch of different guys. But it was 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.

Some of the mortgages, 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 on 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've got some thoughts on this as well. People are having AI children. Are you ready for an AI children? You want to have an AI child, a perfect AI child that does nothing wrong, but people

don't have any 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 Money Wise, 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 Steaks 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 m&ms 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 US falls

17% over visa worries

This is probably the h1b visa conversation that people are afraid of heaven But I think we need to be having Toyota opens massive North Carolina battery plant confirms 10 billion out of US investment Oil and the gas demand could grow until 2050, according to Wall Street Journal. The number of households living paycheck to paycheck have risen. Why? This is a USA Today story. How building affordable housing became hottest game in L.A.

Electric Florida boomtown is now America's foreclosure ground zero. Wait till you find out what city that is? Trumpets gonna be 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 US 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 to 1 if I'm not mistaken and a one guy that voted against it is

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 streets name, Pennsylvania I want to say is the streets name. He told somebody to do quiet piggy.

He told someone quiet piggy. I don't know if you guys 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 say 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

It's carefully Oof-oof-oof you need capital. You definitely need capital Let's put this you listen hanging on one piece here. By the way, you need capital. You definitely need capital. Let's put this here. Ooh, listen, hanging on one piece here, by the way. You need the right team for sure. It's 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 the link below, get registered. You can watch it with your friends, family, and this is gonna 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. Alright, 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. Alright, 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 Hillrika, 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 passed

as soon as- 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 did I think it was Oklahoma? I don't know if it's Oklahoma. Louisiana. Louisiana.

Okay. 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 still wrong today It abandons 250 years of criminal justice Procedure in America has written this bill reveals and injures thousands of innocent people, witnesses, people who provided the alibis, family members, etc. If enacted in this 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 lower up to see what it says because there's community notes. Revenuers claims misrepresent the HR 4405. 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 gonna learn anything? Are we gonna see anything? Or is this just another one of those, you know, they're gonna 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, oh, what is it? You know, you take all the congressmen, all the Senate, 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, you 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 said 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 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,

they put this out. It's gonna end up being a marketing stunt again because Bondi's gonna go over there. She's gonna redact a bunch of stuff.

With all those CIA black highlighters.

You think it's gonna be a publicist stunt? did both parties agree to this? That's the logic I'm 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, Bren, are you in a different position here?

No I'm not. Unfortunately, I'm so burnt out by this one because we've been kind of let down and misled and manipulated so many times. I'm never going to expect to get a satisfying answer with this thing in terms of learning new information. 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.

OK, 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 we you know what is because there's so many Democrats that are on that. No, it's because so many donors that gave money to Trump around.

Oh my god, he lost when he tweeted that and it was a big falling out. Maybe Trump's relationship would have seen 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 one number one the audience. Yeah, exactly Why is that though? Because people believe that there is a two-tier structure at least two tiers in this country. Right. And that the elite people have their own set of, you know, rules and benefits. And if you're in the club, you're in the club.

And therefore, you know, the rules don't really apply to you. Right. So I think that's why everybody is, is, is, um, is really taken to the story. And you get into the idea of the establishment versus regular folks, the unit party. I think that's exactly what we're seeing. But flip it though, what I'm trying to ask you is, you're a smart guy, why do you, 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, you know, American public is a bunch of stupid idiots who don't Look at time, 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- Collectively.

Yeah, collectively.

That makes sense. They 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- 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 eventually.

There's too much incentive to not to just continue to dangle the carrot as much as necessary and then just like the 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 Ro Khanna 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. Comment on Hakeem Jeffries' campaign soliciting money from Jeffrey Epstein himself back in

2013.

It's the first time hearing about it, obviously.

Comer said it on the floor.

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, or didn't donate the money.

Should he step down as leader

Return the money don't you see that is mutually assured destruction? Mm-hmm

So let's just bury this thing. Let's beat let's get together Hold hands and bury this thing and just move on yesterday a a reporter was asking a president

About Epstein and I've never seen him use this phrase before but he told her quiet piggy Robbie Can you can you pull this up Rob? I don't know if you have it or not I watched it multiple times because that I'm not gonna lie to you I thought it was AI and I had to verify it because go ahead Rob I know a bloody JP Morgan shoes. Yeah, Jennifer Garner got it. I've been playing with...

Quiet, quiet, begin.

I've been playing with...

I've been playing with...

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.

Quiet, quiet, begin.

He looked 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 why.

We're already doing good.

Because you struck it. Because you know why so many people let the troller in chief? Because sometimes he's the troller and 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 who'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. She watched 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 mother, none of 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 racial

or sexually or, they're trying to find a way, 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, I'll look.

What is the, like- There has to be a backstory.

Yeah, she doesn't look super hot.

There has to be a backstory. There's gotta be some other- Does she have pigs as a pet? I was all nursery rhyme to finish this little piggy had this little piggy did this and yeah I'm by the way crying all the way home 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 the students recorded it and Posted it Rob. Do you have this one? I'm gonna 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

regrets expressing my shame with respect to what I did communication with Mr. Epstein and that I've said that I'm going to step back from public and hold, but for a time, but I think it's very important because you know I'm teaching online.

So 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.

Yeah, 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 file redacted

Go ahead 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.

OK, 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 Glombeck was talking about this, I think it was yesterday, maybe even a few that glumback 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 hasn't barked 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 as 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, etc. I'm 75% there. Meaning, he hasn't prompted to do anything with her, apparently. Zoom in a little bit more and then the direct correspondence. Victim Marla Ago, 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 Jufre. 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 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 the that is the unit party. 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 the Americans over the top one. And answer.

Yeah. I had one more thing. Of course. push Americans over the top and answer. Can I add one more thing? One thing that we've learned from all this, especially the Larry Summers thing, it's true, that there is this other set of... I think there is some progress with information. 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 yeah. 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 a hundred percent. But I'm coming from a place of, I think there's going to be some progress and more information coming up. Not a hundred percent 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 someone's daughter that someone's niece that someone's today their wife that 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 a 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 that 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, I'm sure a lot of families want to see justice with this. So we'll see what happens here with the story. Let's go to the next one. Now, more things yesterday. MBS is in town yesterday.

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? 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. I don't know if you have the clip or not. Is that the one? Okay, right there.

Go ahead, Rob.

Just a little tap on 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? Yeah. Yeah, let's watch this.

Go ahead, Rob.

Watch this, folks. Mr. President, for your family to be doing business in Saudi Arabia while you're president, The U.S. intelligence concluded that you've orchestrated the brutal murder of a journalist. Nine-eleven families are furious that you are here

in the Oval Office.

Why should Americans trust you?

The President.

And the same to you, Mr. President.

The President.

The President.

I'm with ABC News, sir.

The President.

You're with who?

The Press.

ABC News, sir. The President. Fake news. I have nothing to do with the family business. I have left, and when I — I've devoted 100 percent of my energy. What my family does is fine. They do business all over. They've done very little with Saudi Arabia, actually.

They could — 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.

The Press. Please, go ahead.

The Press.

You allow me to answer? You know, I feel painful about, you know, the families of 90-11 in America, but we have to focus on reality. Reality based on CIA documents and based on a lot of documents that Osama Bin Laden, he 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 9-11. About the journalists, it's really painful to hear anyone that been losing his life for no real purpose or not in a legal 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 our system to be sure

that nothing happened like that. And it's painful. You should pause that part, Rob. investigation, et cetera, in Saudi Arabia, and we've improved our system to be sure that

nothing happened like that.

There's another one that happens as well with the investment of 600 billion a trillion. If you want to find that Jeff, what do you think about that exchange? Well, what the report asking and 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, you know, 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 the, you know, 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 GDP 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, like 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 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, 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, I could he was so unhappy with the question that he comes back Explaining to her on how many different news, you know companies lost Lawsuits to him and then he came back and said this about ABC go for it

People are wise to you hoax and ABC's is your company your crappy company is one of the Perpetrators and I'll tell you something. I'll tell you something. I Think the license should be taken away from ABC Because your news is so fake and it's so wrong 97% and we have a great commissioner the chairman who should look at that because I

Wish it 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, 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 isolationist, but he campaigned on drill, baby, drill. He came right out and he said it, and it's gonna be drill, baby, drill. We were there in Washington on the inauguration day where it was a key part of his speech there.

He was 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 but they, 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 while the United States Electricity is expensive for other reasons, but then the Saudis have this arms merchant Service that they they run and they get a lot of support and arms from us So they got a 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 gotta 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. Here's times you can see MBS looking so confident.

That guy looked, did he of confident to you. I

Think I think he is the question about the toaster analogy Tom is that if the toasters plugged in you're in trouble But if it's not plugged in you will make it through the car one. So, you know that

Oil prices plugged in the toaster. I think that's exactly right exactly, right?

And but I do think Trump is using the leverage to get what he wants Exactly. He's using the leverage to get what he wants Rob if you want to play that clip

But that's where his comment comes in. He's defending I know I know he is because he's trying to get that six hundred billion to a trillion dollars because he knows don't have it That's the thing They're already out there borrowing dollars last year for the first time a long time the Saudi Arabia Saudi Arabian economy had to borrow external funds. They actually borrowed more in dollars outside of Saudi Arabia than they had. How much did they borrow? I don't know exactly the number. 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 those cash shortage in Saudi Arabia. You're right last year they borrowed 23 billion dollars. Yes. Government planned to borrow about 23 billion dollars for... So net equity 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 debt increased to an estimated 319 billion dollars. They're scaling back all those mega projects, they're scaling the fiscal deficit

is off the charts. So you're saying... Saudi trouble They may not even have the 600 billion to invest here. No, no, they're they need They need 80. Okay, let me ask you this minimum. Let me ask you your analogy the toaster to the car wash exactly

So let me ask this question here. So then if that's the case Does does the president know that don't you think the president knows that? So then if he knows that, is this just

marketing? 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 a hundred million dollars a pop. And that was something that had that had been never even on the table before. They

said, we're never going to sell you the 35. 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 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's 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, it will cause the price of oil to go up and Saudi will 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 a barrel.

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. and then they can live with $50 oil. 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, 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've, but look at the confidence he has, and look at the-

This is the part, Rob, this is the clip I want you to play. This is the guy we voted. Yeah, I think it is a hundred million dollars 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 be 48 billion 4.8 billion dollars for the for the f-35s, but here's a 600 billion dollar investment. Go ahead Rob

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.

President Kibari, thank you, Mr. President. We believe in the future of the United States of America. We believe in what you're doing, Mr. President, 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, today and tomorrow,

we're going to announce that we are going to increase that $600 billion to almost $1 trillion of investment real investment and real opportunity by details in many areas. And the agreement that we are signing today in many

areas and technology and AI and bare materials, magnet, et cetera, that will create a lot of investment opportunities.

The President So you are doing that now.

You're saying to me now that the $600 will be one trip definitely because what we are signing it will facilitate that

You can pause that rough so so you so you're picking up the dinner check Yeah, and dessert look you getting the guy that 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 could be gone. This is one more 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 you got?

This is one more. This is where President Trump shakes MBS's hand, and then they make fun of Joe Biden.

Go ahead. Mm-hmm.

It's not about me, Mr. President.

Thank you.

Mr. President, is there another clip? I grabbed that hand, I don't give a hell where that hand's been. I grabbed that hand.

I don't give a damn where that hand's been. So you little piggy and now 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 like Saudi has been in a tough spot for a long time. Like they're very much anticipating that the demand for oil or their reliance on oil is going to be a problem for them one day. So they're trying to make it a destination

that people want to go to. So I think that's why the subsidy here is that the US is investing in, I guess, property or 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, got it. We're in the waving hand moment. Yeah, hand movement. 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 gonna be a bloodbath it could be a very very interesting day Rob if you want to play this clip go for it with Nvidia's earnings how big are

Nvidia's earnings on Wednesday night it's just super bowl not 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 you know, 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 floors

around the world. I just don't know, Gene, how you even plan for this. Normally, 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 streets at 41%

That'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 so the bar on the 28. He gave us 54% revenue growth I don't know a lot about Wall Street except I do know this 54% ain't gonna 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.

To Gene's point, look, we're just getting back from Asia, being there three weeks, demand to supply for Nvidia chips is 12 to 1. It comes down to this one chip.

12 people in 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 about, and Gene and I talk about it all the time, anyone that talks about an AI bubble here, we are in the third inning of where this is all pointed 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, the view is a bullish.

I mean, I was going to say, what do you think about his pink jacket? But what do you think about the Jeff, what they're saying here?

I think the, 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. Is the 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 of 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.

It's easy to see. 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. NVIDIA's chart and go max. There you have it. 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, seven zero. 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 to 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 gonna ask, what is demand? 12 to one, 13 to one, 11 to one. If the demand's coming back, they'll say, well, demand 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 of 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 OK. There could be, and by the way, the option volume is suggesting that there could be a 7% downward swing today in the price. And it's already...

If that happens, how will the market react?

The market will react badly because what was Nvidia's peak three weeks ago? 208 or 210? 208. 207. I think interday there was like a 208 and everything. And now we're down at 186. So we're 20 points down, 10% down, another 7%, it 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 the prices come down but now through sales dominance market share you grow back into your pants. So it's a really big thing just like 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 that on paper, on net worth and stuff. And so one way you're gonna 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.

Yeah.

And I've got a follow-up for you guys. Go ahead, Brandon.

Yeah, I think the entirety 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 streets 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%. three of you guys is this year S&P 500 rate of return is roughly 13 to 14 percent, give or take, right? Do you know what percentage of the S&P 500 is a max seven companies?

And it's kind of magnificent.

26 to 28.

Huh?

28. 35 to 37 percent. Oh, wow. Yep. Seven companies represent nearly 40%

That's why they talk about it being a Super Bowl because it's the only team playing it. But this is the scary part though, right there. If you look at it, 35-38% The 7 companies, Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla. So the question is, are these stocks representative of the economy, the overall system, or are they representative of justice in your segment. So a fellow on MNECT is asking 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 SMP's up 13, 14 percent. 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? How is the market doing? What's the market looking like when it comes down to wanting to, you know, buy properties,

you know, other industries, hotels, you know, 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 MACS 7? Jeff, I'll come to first. Yeah, that's 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. 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 in, 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 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 US recession odds at 93% is what they said. Not 50%, not 40%, 93%. Some may even ask, if you were to take the max 7 out, are we in a recession but nobody knows it?

That's market breadth, right?

I'll say, UBS currently assigns a 93% probability of US 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, you 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's own surveys. 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 seven they talk about mag seven mag seven is bigger than all of the European stock markets all ALL so max heaven is bigger than the entire continent of Europe on an investment basis. So it is a huge red flag

They should have their own flag their own blue flag with seven stars on it and be like, we got your EU right here.

700, 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 nine and ten and eleven Percent loans no no no no 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 aged 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, 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, no, no, no, no. Down in my email there's a couple of them. The mortgage charts denials are up in red.

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 percent.

That's correct. They're successfully managing it.

How much of it is Mag 7 driving everybody else? So if Mag 7 climbs, everybody else follows.

Yeah, and by the way...

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, and it's just 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 gotquarters and some eights, 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.

This is, 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 of 2024.

That's 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 is 18 months. It's been flat but for

Rejection to be at forty five point seven all-time highs. I've been measuring it stop it That's the banking sector all-time high since they've been are you kidding me? I am NOT kidding

That's the banking sector saying the economy though. When did they start measuring it though? 2010 2012 and that's a thing. I think goes back to 2003. Well that's a good ample enough of an inventory of data. There's enough events that's happened since then. So okay, so you said something while I interrupted you. 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 universal credit. 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? Cause you know when they say oversubscribed

more people want it than can get it. Not many. Five X. There was five billion dollars at the door willing to trying to get in because they want to put The money to work and because they're gonna 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

That's why that number is why.

So it drops 11% but Facebook is able to sell.

But let me get to this. I don't want to confuse the two. I don't want to confuse. I want to stay here. I want to stay here. But it's all the same.

I understand that. But we're talking about mortgage, mortgage applications specifically. 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 Paltis said the government agency is actively evaluating portable mortgages which would allow homeowners 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 US 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, 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 6.5, 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? How do you do it? The question is, I mean, what bank is going to prove that you have to, you have a collateral swap. You have to look at what, what, what is this house going to be a collateral for the new loan? I mean, the logistics of that are, are pretty close to nightmarish.

Look, the logistics to me would be, who's going to entertain that?

Who's going to prove that. And if they did, of course, this is... 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,

the mortgage ports to, we'll cover the difference. That's what's gonna have to happen and that I think that's the exact the way that they're moving. That would be a

trillion dollar solution though I mean it's not and 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 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 three and a half percent 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 garden st Germain Depository Institution Act you make it 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 all the banks are gonna say,

no, no, no, no, no, no, no, no, no, no, 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 up.

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 it. 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 directing 47% of people with mortgages today. We don't even want the application. And they're gonna go yeah but you have to do it because people are not buying homes because they can't afford it. Yep but but I have to stay in business.

I understand you have to stay in business. But but we got it we got to find a way to make money. And it's gonna go to Jeff's thing, which the only solution is going to be what? OK, listen, wink, wink. Just do it.

We'll give you the protection. We'll come and protect for you. You see where this is going. I mean, you're-

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 to pay for the prices.

Now you said it.

I said it, now you said it. 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 you know, 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 macro economy has to be a labor economy. It's not if, if the, 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, 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 we, 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's 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.

Okay, 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. That's where we are. I want to say Cal-She and

Cal-She is saying give or take I want to say it's Cal, she and Cal, she is saying, give or take, I want to say it's Cal, she that said this, that 70% likelihood that the Democrats are going to win the midterms next year. It's going to be a plus minus more Democrats and 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 was at 70%. So if it's going right now, yeah, there you go, 72% Cal, she has Democrats winning versus and by the way, the closest it got was when a couple weeks ago, what was the number? 55, 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 gotta stop doing is to make the same mistake that politicians have been making since the pandemic hit. And really going back further than that is to say the economy's booming. This thing, this sucker's great. Just look at the stock market.

That just pisses people off more than anything else. You wanna know why there's a socialist as mayor of New York City? That's why. 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 is this is this tracks with political parties all over

the planet. You look at countries around the rest of the world, you look at the 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 euros, fiscal stimulus, not going to do anything. It's all theater. You got to stop with the theater and start attacking the mandate.

Give me two more, two more. Give me three ways. So start talking to consultants, start the government.

I'll 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 or 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, 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 it's gonna 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, 2,004,080 grand every year, babe, we're not tapping to our savings, we're just living off the interest, 2,080 grand 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 4% that was giving me eight 80 grand a year and now it goes to zero. I'm getting zero. So now my 2 million becomes 1.92. Well, my 9.2 becomes 1.84 then. 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 when you fake it number three get out of the way, you know on regulation I 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 the markets the Kaoshi

market today it says it's only 50-50 to even get a 0.25 cut the 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 and 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 Unidos, 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 gotta go to protein. Chicken, pork, and beef.

You gotta figure out how we help those prices come down for the consumer. And the next one is power. Right now, data centers, I'm gonna 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 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 build the small nukes. They got the permits for the small nukes right next to the data center. So that's Google and Oracle saying, well, I'll build my own power right here because there's not enough power for me to buy and I'm gonna 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 would 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 prepayment.

I got you. 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, 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, you know, 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 type of homes. Cut zoning laws, remove regulations around lumber. Like we have like the second most lumber out of any country in the world. And we have a lumber shortage somehow for building homes.

And then like we only produce 2% of the world's cement so the government couldn't invest in subsidizing companies that want to become a cement company cost like 500 million to become a cement company we used to produce like 80% of the world's cement now today it's 2% China produces 50% you know so that's for housing and I would say for food you know why not like 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 lobe all 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'm going to read to you. And you tell me what direction we should go with this. So one story, Ford comes out, CO Ford, 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 the lift and tools and no one working it Are you kidding me? Nope hundred twenty thousand dollar 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 gonna be able to bake make, you know, the tanks and the planes

Self-defense for a country issue, but how I think about it is Wow

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? Five.

That's it right there.

Five years training.

Master mechanic. minutes, but go ahead, you were going to say something. 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 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 gonna build this stuff for you? When the US 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 US falls

17% over 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 you got a clip on this one here. Is this, 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 US higher education institutions showed 57% report falling new enrollments by students while only 29% recorded 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

economic growth. The data provided by the International Institute of Education 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 the US benefits the most is Fanta, 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, President Trump says we're gonna have 600,000 Chinese students coming 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

That's labor shortage. Mm-hmm. How do you solve it?

There is no such thing as a labor shortage. The problem with Ford is the $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.

So then who, if he's choosing those numbers, if you go to salary.com.

His data 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 5,000?

I don't know what the number is, but it's higher.

So you think that's it?

That's the solution? This is the solution for any time. So that's four.

Then go on the other one.

With the visas, does anybody here really We've had more people in college over the last 40 years, and it hasn't contributed much to what's supposed to be 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. You said that to yourself when you read the article. You said it's more money with the Chinese students coming in. Does that actually advance American interest, whether it be economic or national interest,

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.

That's not what they're doing.

Are we sure?

A lot of Americans are though.

Yeah. 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 taking... take the opposing position. Go with that.

The colleges do make the country more productive, so...

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 their 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 the new orientation. I can't, 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. Okay. 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... For something like that, it's young male Asians. Well, it's interesting. Then I walk with them, they put a security right in front of the door immediately when we came back. 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 applicants gets accepted to IIT Institute. Some weird number like that, Rob, if you can 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...

Not 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 percentile. I'm saying 50-75 percentile. 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 who are very selective with it, then that's one thing. But I think it kind of bleeds into the wage thing where companies feel like they could pay less for 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 was 5,000 jobs at 120, if he offered a 250, he didn't,

he's just making up a number, like you're just spitballing here. If it's 250, he's gonna 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.

Yeah, 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 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, 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 gonna have to make a major expense to educate myself. But if they were paying 250,000, that would have 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. 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.

The point I'm making is that maybe we don't need to keep pushing people to college, whether they be US or foreign born.

But check this out. Here's a question. So what if we go his route, you know, you're at the 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 You know fifth generation wealth first generation wealth second generation wealth and then the one thing one of the families They they did a family reunion annually 90 people show up and it's getting more and more complicated. The family had the biggest cheese company in Wisconsin, Sargento, am I saying it correctly?

Sargento, yes. Sargento, yes. 1.7, $1.8 billion in revenue. And one of the kids was talking about, you know, where it's at. A lot of people, people, oh my God, it's on 1.7 billion. Every kid must be a billionaire in their family That's not the case because you have to share that with

Two three hundred people eventually, you know, you're a hundred people 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, you know, 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 it. 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? 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. What would it be? Can you guys comment below?

Rob, can you read off some of the stuff that people are saying? 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%, 30% of the answers here are trade. Engineering, okay, fashion design, not paying for it. Plumbers, against all of it, against paying anybody.

Can we remove political science from the list too? Of course political science, I mean why would you get that, right? 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 a certain things that you're not paying for college degrees

How come we're not doing that? That's very easy common-sense decision to make well, I'm gonna 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 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 gonna be independent student loans, co-sign for your kid. Let your kid get whatever you want. But you co-sign for that loan the same way

that you co-sign 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 cosign for your kid to have gender studies at Brown, and you want to cosign on that, go to your bank and get whatever student loan for your kid and go 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 will be this. Now the second, let me 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 give Pat a scholarship. Hey Pat, you're trying to, and 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 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 what that came from their interest in their profits and our endowment. Did you say Tom 44 billion? 44 billion comes in the US 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 scream that they need it.

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 air hose at the federal government level. Which one of the two are you against more? I there's an audience that's gonna 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 US taxpayer is going to underwrite on those student loans, and I think you're gonna and I think you're gonna 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 this nation needs to grow. No student loans for gender studies. This is OFD56. 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, elevate to the unknown. Management information systems. Okay, next one.

From Razor3inite, fun technical engineers stand 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, next one. I agree. 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? It doesn't make any sense to me that we're funding this stuff. I think you've got a very good point there. 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.

Yeah, 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 freefall. It's, you 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 thearing the sudden drop could be the beginning of a more sustained bear market, Bitcoin was trading at $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's happening here?

You know, I think we all wanna go to the moon, but if you wanna ride the rocket, you gotta be prepared to pull the Gs. Over 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 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 gonna go from 55,000 and 94,000 in 14 months that would have exceeded any reasonable investors expectations over five years Bitcoins up about 50% a year on average for the five years gold and S&P are studying the cost capital to 14%

My company's strategies 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 what do you think? What do you think is going on right now with Bitcoin, Jeff?

I think it's a barometer of short-run risk. I think what he just said is absolutely true. If you're going to buy Bitcoin for years, 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.

Brandon, 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 fallen off a cliff and this and that. I mean, like he said in the video, 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 the AI narrative is really the story that's been carrying not just crypto, but the whole market since Trump got elected. So I think it's normal.

I mean, 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 before.

But yeah, in terms of just looking at a chart, I don't think it's 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 5050 for just a point to five rate cut and I'm now waving my flag for a point five rate

Cut as many others are for December. I don't want to impact retire me fixed income And 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 was 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 on 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 $10 under where we were on January 1st. Am I correct? 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 that 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, the, the, the the the 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.

Auto trades took away people that were under margin. Crypto proxies 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 gonna 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 ten years, 5-10 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. 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 to 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 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 if you retire 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 Centers 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 egg 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, that'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 gotta factor that in.

You gotta 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 have happened 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 floor at a beach with a metal detector. I really wanna do something I enjoy,

but I'm not gonna work that much, but I want the social aspect of it, and I wanna feel productive. People that talk about, also, I think there's a 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 hit in 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 S&P 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 and Social Security stuff that got people into the state of not having to save money.

And they just create this mindset of, OK, Social Security, 401k, you're going to be good, don't worry about it. But nobody's good for it. I think 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. Like, that was the age in the 1930s.

So 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. If you say, well, I'm going to retire at 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. Okay. 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 not about that. It's about contributing. It's about constantly being seen as that person is needed. My dad, until today, is needed. We need him. Do you know what I'm saying?

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 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 till 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.

I 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, they used to, 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 the earned income or save, God forbid, what you actually need for retirement, that's where the happiness comes in.

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 gonna 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 US households is living paycheck to paycheck with almost nothing left after the basics. Researchers track spending on groceries, housing, gas, child care, 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. What was, like, 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. 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? Dun, dun, dun, dun, dun, dun, dun, dun, dun,

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 about 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 gonna 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, and, and, and, and?

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 say, no, no, no, no, 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, 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 it coming home to roost, but I'm the guy that's gonna fix it.

I'm gonna start today with some energy things and some food things and I'm gonna 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 a 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 frickin 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, you go to St. Louis Fred, real personal income excluding transfer receipts. This is an income stat. It's a broad income stat that shows you the aggregate level of private income in the economy.

It's one of my favorite databases.

Yeah. What are you on? One of the few things the Fed actually does. Fred.

Fred.

Fred. You have to type in the full thing. St. Louis, Fred, 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 fed 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 socialism, that, you know, rich people are bad and capitalism's horrible, our audience, Poland, living paycheck to paycheck, zoom in, okay?

3,000 people voted, 59%? That'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. That 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 ACA-

We all save money on health insurance.

Did you get the message?

And if you, you like your doctor?

No, yeah, I kept, 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.

Like at the last two years?

This is why people are so upset about the 2008 bailout. 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, you should

have let them go. The idea was, to 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. 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, uh,

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, he's been calling it. Quantitative eas did not work. It didn't work. Have you guys done anything together or no? You and him? No.

Never have? No.

Yeah. Brandon, what do you have with this? Oh yeah, Trump's gotta stop acting like inflation's gone, because it's kind of like gaslighting everybody when you're saying something that's different than the reality. Like, he's gonna lose a lot of people if 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, 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 percent, national brand frozen vegetables down 15 percent, stuffing, gravy mix, fresh cranberries down 3 to 4 percent, national brand pumpkin pie down 3 percent, prepared mashed potatoes down 1.5 percent.

So they're sharing some of these numbers on what's going on, that groceries is down a year over a year. That doesn't mean it's not a lower period, but they're giving 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 given a date on what's happened since Biden was in versus him.

have you ever seen the way that the government measures the CPI where if like one thing gets too expensive, they change the things that's in the basket so they can make the play with the number. Like, 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 is complete BS.

But look at this here, look at this here, look at this here, Tom. Changed from 2024, 16 pound, is that 16 pound? Frozen turkey is down 16.3%. I don't think that's pound, though, Rob.

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% Thanksgiving.

Okay, got it. So down 16.3. 14 ounce cube stuffing mix, down nine. Dinner roll, you saw the one. Three 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 63, that's big. And then miscellaneous ingredients down, canned pumpkin pie, about the same, two frozen pie crusts down 0.8, half pine 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, it 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? Hmm. 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. 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 gonna go to. Blue Owl, okay, plunges to 23 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 him and wrap up the podcast with this here. So Blue Isle Capital Inc. shares have fallen to their lowest since 2023, December. After all, alternative asset managers 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, to with its $17.6 billion publicly listed vehicle, Blue Owl Capital Corp., or OBDC. But investors in non-traded funds won't be able to redeem their capital until the merger closes, which is expected to happen early next year. Investors 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 at 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 the really the deep weeds here, it's just a source of relending 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 bank, 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 in 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,

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. I don't want to get, I mean, I'm not making a comparison to 2008 in any other way than 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 fund 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 escalations moving in that same direction. It started with Tricolor, then it was First Brands, then it was, you

know, a couple of small regional banks that were exposed to First Brands, then 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.

Tom.

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 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, US 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 company's path 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.

And they 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.

Baloney!

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.

And-

Yeah, the problem is that the private capital market is huge. It's gotten to be really huge, so it actually can impact a lot more than just-

And 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 US investigators are going back going,

wait, wait, wait, wait, wait.

You're telling me some of this was fake receivables and sales that didn't exist? So BlackRock's gonna say, I didn't know that. You were a bad underwriter. Everybody wanted to underwrite, everybody wanted to do, it's bubble behavior, everybody just wants to get the deal done. I want the 12 billion because I need the return and I ran 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. No, just quickly.

I think it's crazy to me that nothing's happened in the last 15 years where there's been this great growth in the stock market and asset prices. I'd be shocked if something didn't give eventually. It's just like you said. Yeah.

Last one here is Tim Cook. CEO as early as next year says reports this is from Entrepreneur Magazine.

Rob is this him speaking or is this a Reuters report on this? Okay go for it

go for it. 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 Ternes, 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 or he 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. I wonder what would have happened if Steve Jobs had not

died and wasn't CEO until today, instead of Tim Cook. Maybe Apple wouldn't be the same. Maybe it'd be much bigger. But I don't know. I think that's probably time for him to step down and it could be a good thing because they're, I kind of have a point where they haven't done anything exciting.

That's the criticism. The criticism is 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, me. When he got his cancer, he started doing his walks, and everybody's wondering, who are you gonna 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'd the business where Tim Cook 23X'd, 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 Was made under job so you would expect that uptick but Tom where you are 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 once experienced. So people are keeping phones longer. And if the economy's not so good and the phone's working just fine, you don't replace it here in the US.

And so they need a new, they need more product, they need more push, and I think the next CEO is gonna 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, there's the criticism is that 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, new fields and technology?

And 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? Like to your point, did they get a little bit too late?

Yeah. But guess what? Listen, they're making a move. We're gonna learn. This guy here, you're gonna hear a lot of his name if this guy ends up replacing him because he's reporting to Tim Cook. So he's been hardware engineer since 2021. We'll see. We'll see what's gonna happen. Universal, the pen 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

It was appointed vice president of hardware engineer under Dan Rissio and He oversees the product of AirPods Mac and iPad All right. I mean sounds like a qualified guy for them, but we'll see what happened there 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 Eurodollar University. If you haven't yet subscribed, Rob, can we put the link below for them to go follow? Jeff, it was great having you on, man.

My pleasure. This was awesome. My pleasure. This was awesome.

Yeah, really enjoyed having you on. Take care, everybody. God bless.