The Housing Market Is Getting DESTROYED, The Fed’s Fake Data & Nvidia’s Fall
In this episode, Chris and Saied break down one of the strangest weeks in economic news we’ve ever covered: missing jobs data thanks to the government shutdown, a Fed that suddenly sounds like it forgot what “data-dependent” means, and a housing market showing cracks big enough to drive a mortgage banker through. From Zillow quietly admitting half of America’s home values slipped, to builders slashing prices at record levels, to foreclosures quietly creeping up while mortgage lock-ins freeze the market solid — the guys dig into why the “everything is fine” narrative just isn’t matching the numbers.
➡️ But chaos wasn’t limited to housing. Billionaires started bailing on Nvidia like they saw the ending of the AI movie early, Michael Burry essentially rage-quit public filings, and Peter Thiel unloaded his entire stake while VC money keeps ping-ponging between the same five tech giants in the most incestuous loop imaginable. And because this is The Higher Standard, the episode somehow ends with a heated, physics-based debate about whether men should sit or stand when they pee — complete with splash-radius analysis, public-restroom trauma, and a shocking confession about portable butt-gaskets. Peak THS.
💥 Have you left your "honest ⭐️⭐️⭐️⭐️⭐️" review?
📩 NEWSLETTER: https://tr.ee/O6FWkv
👕 THS MERCH: http://www.thspod.com
🔗 Resources:
The Fed raises alarm over 'deterioration' in the US housing market (Money Wise)
More than half of US homes lost value in the past year (Yahoo! Finance)
Home values always go up, right? (Nick Gerli via X)
Bill Ackman to unveil plan for mortgage giants Fannie Mae and Freddie Mac (Fox Business)
Peter Thiel's fund offloaded Nvidia stake in third quarter, filing shows (Reuters)
Why some elite investors are turning on the darling of the AI rally (CNN Business)
⚠️ Disclaimer: Please note that the content shared on this show is solely for entertainment purposes and should not be considered legal or investment advice or attributed to any company. The views and opinions expressed are personal and not reflective of any entity. We do not guarantee the accuracy or completeness of the information provided, and listeners are urged to seek professional advice before making any legal or financial decisions. By listening to The Higher Standard podcast you agree to these terms, and the show, its hosts and employees are not liable for any consequences arising from your use of the content.
Transcript
Yeah, I'm not a huge fan.
Speaker A:Other than me send the text at a specific time.
Speaker A:I do that.
Speaker A:I use it every day.
Speaker B:I've been sending you dirty technology in advance for like a week now.
Speaker A:You know, I've been sending you dirty text messages 30 years from now in advance.
Speaker B:The problem is.
Speaker B:So I. I have used the new Apple feature where you can send a text in the future.
Speaker B:Yeah.
Speaker B:The problem is, is you forget.
Speaker A:Oh, yeah.
Speaker B:Like people will respond a message that you sent and you don't remember.
Speaker B:No, I'm sending it.
Speaker A:I've only used it.
Speaker A:I've only used it for my wife.
Speaker B:That's it doesn't mean you won't forget.
Speaker B:I said, and I love you.
Speaker B:And my wife's like, I love you too.
Speaker B:I'm like, who you sending this to?
Speaker A:Seriously, what you doing, woman?
Speaker A:You ready?
Speaker B:About as ready as I'm going to be tonight.
Speaker A:Welcome back to the number one financial literacy podcast in the world can pop.
Speaker A:This is the higher standard.
Speaker A:Sitting in front of me is my partner in time, Christopher Nahibi with the Ghost.
Speaker A:Yeah, Ghost Energy.
Speaker B:For the record, before I introduce very.
Speaker A:Gym bro of you.
Speaker B:It is a little gym bro of me, but I believe Andy Frisella from first Form.
Speaker A:Oh, yeah, we're waiting.
Speaker B:He.
Speaker B:He is sending us a care package.
Speaker A:Cases on the way.
Speaker B:Because we did.
Speaker B:We did say that we.
Speaker B:We preferred his juice.
Speaker A:Yeah, we did prefer his juice.
Speaker B:And as a result of said preference, I think we are getting like a pseudo sponsorship.
Speaker A:Yeah, right, right.
Speaker B:Like we're not paying for the beverages.
Speaker A:Yeah.
Speaker A:Staying caffeinated.
Speaker B:So sitting across from me, my partner in time, the one, the only Saito Marvel.
Speaker A:Thank you, my man.
Speaker A:And sitting behind the desk in the production suite, if you will.
Speaker A:Nobody cut to it.
Speaker B:Hey, there he is.
Speaker A:Nobody there.
Speaker A:He's not Regil out on PTO again.
Speaker B:Yeah, yeah.
Speaker A:It's all right, though.
Speaker A:Listen, we got a great episode for everybody today.
Speaker A:We're going to talk about deterioration in the housing market.
Speaker A:We're going to talk about everyone and their mama offloading Nvidia stock.
Speaker A:But first, what we're going to get into are the Fed and Epstein.
Speaker A:No, we're not.
Speaker B:No.
Speaker A:Flag the video four minutes in.
Speaker A:We're not getting into the Epstein files.
Speaker B:Release the tapes or the files.
Speaker A:Not the tapes.
Speaker A:Say, Diddy.
Speaker B:Did you see the cash, Patel?
Speaker A:It's terrible.
Speaker B:Oh, my God.
Speaker A:Pressed.
Speaker B:He was getting pressed, but he was pressing a whole, whole lot back.
Speaker B:I was like, this is the best reality TV show I have seen.
Speaker B:Cory Booker and him going at it.
Speaker A:The Cory Booker one where he was just like, you know, this is not long term.
Speaker B:You're not going to be here very long.
Speaker A:You don't got your job for much longer, my friend.
Speaker A:You might as well stand up and do the right thing for the American people.
Speaker B:His response, it's my turn.
Speaker B:It's my turn.
Speaker A:Yeah.
Speaker A:Those are so uncomfortable to watch.
Speaker A:Like, so good.
Speaker A:I feel like my younger self would take out a bag, a bag of popcorn and just enjoy it.
Speaker A:But, but it's, I'm literally cringing at the TV now.
Speaker A:I can't watch it.
Speaker B:You know, the crazy part is, and I mean this with all sincerity, I know people be like, oh, that's a political stance.
Speaker B:It's not.
Speaker B:I have no idea who's right in the equation.
Speaker B:Like, I really don't know.
Speaker B:Like, is it a Democrat thing?
Speaker B:Is it Cash Patel being an a hole thing?
Speaker B:Like, I don't know what it is.
Speaker A:I don't know what's going on.
Speaker A:And yeah, if we're going to, if we're going to just touch on it, it's like, okay, release the files.
Speaker A:Everything's redacted anyways.
Speaker A:Good luck, have fun.
Speaker A:That's what it's going to be like.
Speaker B:I don't even care what that.
Speaker B:I just care about, like the, I don't really have an opinion one way or the other.
Speaker B:All I care about is like the, the political nuance in between where people are fighting like children.
Speaker B:No, you're stupid.
Speaker B:No, you're stupid.
Speaker A:Answer my question.
Speaker B:Oh, my God, it's just so contentious.
Speaker A:He's like, answer my question.
Speaker A:I don't have to answer your question.
Speaker B:And you can like cut through the tension in these, you know, hearings in, in Congress and you're just like, this.
Speaker A:Is, this is the way it's supposed to be.
Speaker B:Yeah, I don't, I don't remember it being.
Speaker A:I know, it's so wild.
Speaker A:It's terrible.
Speaker B:All right, so the Fed minutes came out today as we record this.
Speaker B:This is Wednesday, November 19th.
Speaker B:The Fed minutes showed that only a few participants supported further rate cuts.
Speaker B:And for those of you who go, wait a minute, that sounds different.
Speaker B:Yeah, the market thought it was different too.
Speaker B:I think a lot of people set the stage here, right?
Speaker B:The, A lot of the American people and people who are economists and cover this stuff left the last FOMC meeting with a high probability of a rate cut coming into December.
Speaker A:Yes, there was.
Speaker B:And I don't want to pat ourselves in the back, so I'll pat you in the back.
Speaker B:You can Pat me in the back.
Speaker B:So therefore technically we're not complimenting ourselves.
Speaker B:But we did say that we thought the December 10th meeting would be the most controversial meeting of the year.
Speaker A:Yeah.
Speaker A:Because we basically said, told everyone, hold your horses.
Speaker A:Yeah, listen, don't buy into this.
Speaker A:There's a lot of time between now and then, especially with the government shutdown and certain reports not being released in time, if at all.
Speaker B:Yeah, we found that out today too.
Speaker B:We'll get to that.
Speaker B:Yeah, so it's shaping up to be that.
Speaker B:So a lot of the Fed governors since the last FOMC meeting have come out and they've all sounded really soft around the idea for the rate cuts.
Speaker B:And then these minutes come out today.
Speaker B:Meanwhile, the the world and straight probability, Bloomberg's World Trade probability, Chicago Mercantile Exchange, they're down below 50% as a probability when they were once well over 90%.
Speaker B:So you've seen about half of that gone because we've seen a continued softening.
Speaker B:And this isn't because there's been a lot of data that's come out.
Speaker B:This is just because the Fed governors come out.
Speaker B:And then today these minutes come out.
Speaker B:Progress for inflation has stalled and or that inflation may rise again.
Speaker B:That's the quote from the minutes.
Speaker B:Huge debate over December needed a lot needed a rate cut at all.
Speaker B:But it sounds like most of the FOMC participants will not be supporting a rate cut.
Speaker B:That is a general kind of consensus from the minutes.
Speaker B:I, I paraphrased because let's be honest, nobody cares about what Neel Kashkari's got to say.
Speaker B:Specifically.
Speaker B:No.
Speaker A:Yeah, absolutely not.
Speaker B:So then I'm watching the screen today.
Speaker B:I'm listening to cnbc and then I see Steve Leesman.
Speaker B:Come on, Steve Leesman, ball headed gangster.
Speaker B:He's always in the room when Jerome Powell is presenting.
Speaker B:Below him is a little red bar.
Speaker B:It's breaking news.
Speaker B:Breaking.
Speaker B:Always important.
Speaker A:It's always breaking.
Speaker B:And then I see the ubiquitous red screen flash, the words breaking news spills over the screen and I'm like, oh my God, what happened?
Speaker B:Yeah, did Cory Booker and Cash Patel get into a fight?
Speaker B:Like did somebody get into it?
Speaker B:Right.
Speaker B: s it will not publish October: Speaker A:Right.
Speaker A:So that was the one that should have came out the beginning of the month in November, but we had a government shutdown.
Speaker A:Yeah.
Speaker A:Right.
Speaker A:So there was only one essential employee, literally one essential employee left, one at the Bureau of Labor Statistics.
Speaker B:Right.
Speaker A:So they couldn't report on it.
Speaker A:Now I saw you post this and you said the next jobs report.
Speaker A:Right.
Speaker A:And the reason why this is so important, not only because the data is important.
Speaker A:The Fed has the entire time leaned heavy on the fact that we are going to be data dependent.
Speaker A:Whatever the data says, then, then we will make our move.
Speaker A:Now, if there's no data, you can see a world where they say, oh, let's just hold off for now.
Speaker B:Why would you feel comfortable?
Speaker B:Yeah.
Speaker B:If you're them.
Speaker B:If you're them, you got the perfect excuse to not make a move.
Speaker A:But.
Speaker A:But you and I know better.
Speaker B:There's private payrolls.
Speaker A:There's private payrolls.
Speaker B:I will say so the next jobs report that's supposed to come out is November's job report that won't be out until December.
Speaker A:There's also the Challenger report.
Speaker B:Yeah, but there are.
Speaker B:So the Fed typically relies heavily on the Jolts report, which is not going to come out.
Speaker B:That just kind of got anecdotally passed over by the news.
Speaker B:But that's not coming out either.
Speaker B:The next jobs report that comes out will be December 16th.
Speaker A:Joel.
Speaker A:Support for everybody.
Speaker A:Job openings, labor turnover survey.
Speaker B:Yeah.
Speaker B:Terrible name.
Speaker B:Jolts.
Speaker B:Yeah.
Speaker A:Always trying to make it sound sexy.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:It's just a terrible report.
Speaker A:How many openings are there?
Speaker B:Yeah.
Speaker B:You know, how many were revised down?
Speaker A:Right.
Speaker B:But your argument on a previous show.
Speaker B:Not that I'm holding on to the things you say to prove you wrong later on.
Speaker B:I would never do that.
Speaker A:Hold on.
Speaker A:Things change.
Speaker A:It's weekly over here.
Speaker B:Hold on.
Speaker B:But you said, and I quote, yes, the date is going to come in, Chris.
Speaker B:So it's not like they're not going to put out the report.
Speaker A:So that's the part that I don't understand.
Speaker A:Okay.
Speaker A:The next meeting is the 10th.
Speaker B:Yeah.
Speaker A:Okay.
Speaker A:The first Friday in December is when the.
Speaker A:Is the.
Speaker A:No, is when the November's jobs report should be coming out.
Speaker A:So I didn't know this, that now that jobs report for November is also not going to be coming out because those employees are back in office now.
Speaker B:Yep.
Speaker A:So I don't understand why.
Speaker A:Why is that report not being released?
Speaker B:I got to be real ginger around the way I answer this because I love me a lot of people.
Speaker B:Right.
Speaker B:Like, I'm not trying to be disrespectful to anybody.
Speaker B:I will say, however, there is a.
Speaker B:A certain sentiment when it comes to government workers.
Speaker B:Right.
Speaker B:And generally speaking, the government does not have what I would call people who are taking on a massive workload.
Speaker B:Right.
Speaker A:I see.
Speaker B:So I knew that a lot of government workers are gonna come in There they're gonna say, look, we need to move on and focus on the next jobs report because we're already X, Y and Z days behind.
Speaker B:There's a backlog of work.
Speaker B:We can either do that backlog or we can move forward and not do double the work.
Speaker B:Okay.
Speaker B:I mean, think about it from their perspective.
Speaker B:Right.
Speaker B:I'm working a government job because I'm not getting paid as high as the private sector would pay.
Speaker B:Fair.
Speaker B:But you do get a pension, but your quality of life is not going to be that of like upper middle class making a ton of money.
Speaker B:Right.
Speaker B:You're, you're a government employee, so why would you.
Speaker B:Who just got screwed for about 30 plus days.
Speaker B:Yeah.
Speaker B:Out of a salary, dealt with the pressure, maybe losing your job, not losing your job.
Speaker B:You're caught in the middle of this political back and forth.
Speaker B:Why would you come back to the office and then do double the work?
Speaker B:You wouldn't, you would say, look, I'm starting today, we'll work on the next round of numbers that comes out the next month.
Speaker B:You just ain't getting this report that's on you.
Speaker A:But yeah, depending on who you're upset with, it does benefit one party over the other.
Speaker B:I don't know that it's political as much.
Speaker B:It does.
Speaker B:It does have a benefit, but I don't know that it's political.
Speaker B:I think it's just logistics.
Speaker B:I think you put people who you kind of gave the shaft to back in the work and they're not going to bend over backwards to accommodate you or anybody.
Speaker A:Now this is.
Speaker A:Yeah, this is really interesting.
Speaker A:Right.
Speaker A:Because the, the sole reason why the Fed up until now has decided to begin the rate cutting cycle is because the labor market has weakened.
Speaker A:It softened.
Speaker B:Yeah.
Speaker A:Okay.
Speaker A:So now it's really, it's going to be really interesting if they don't cut.
Speaker A:And this administration.
Speaker A:Right.
Speaker A:Comes out and says, we would be in a much better position if they cut.
Speaker A:The reason why we're suffering is because the Fed can't cut because they kept us from producing the data.
Speaker A:Right.
Speaker A:The jobs report.
Speaker A:But that's also admitting to having a weak labor force.
Speaker A:So I don't.
Speaker B:Only if people follow the narrative down and most people don't.
Speaker B:They read the headline.
Speaker B:Yeah.
Speaker B:That's why you saw the White House, White House press secretary come out and say, because of the Democrats, we've had irrevocable.
Speaker B:Irrevocable.
Speaker B:I never can say that word.
Speaker B:Yeah, Irrevocable.
Speaker A:Irrevocable.
Speaker A:I naturally want to go to irrevocable.
Speaker B:Yeah, me too.
Speaker B:We work in the business.
Speaker B:Your vocal trust.
Speaker A:Yeah.
Speaker B:We've had these consequences that you just can't recover from.
Speaker B:And they, she, I mean, she's already pasted that narrative down.
Speaker B:And most people are just going to read the headline.
Speaker B:They're not going to look deeper into it and go, you know, hey, there's other reasons for this, there's other motivations.
Speaker B:They just take the headlines.
Speaker A:Yeah.
Speaker B:So I think that as much as is.
Speaker B:Yeah.
Speaker B:If you, if you read into it, you go, wait a minute, okay.
Speaker B:This is only the case because it's not true is irrelevant for most people.
Speaker B:And I think that's a problem.
Speaker B:But let's not stop here.
Speaker B:There was actually a separate headline later in the day that got an equally as big red flashing breaking news sign.
Speaker B:They had a pretty interesting conference in the Middle east today.
Speaker B:I don't know if you knew about this, but it's in the Middle East.
Speaker B:Yeah.
Speaker B: The Saudi Investment Forum,: Speaker B:Okay.
Speaker B:You had Elon Musk and Jensen Huang.
Speaker B:Huang, whatever.
Speaker B:Huang were on stage at this conference.
Speaker A:I didn't know.
Speaker A:No.
Speaker B:Yeah, it was a big deal.
Speaker A:I saw that somebody from Saudi Arabia was in the White House.
Speaker B:Yeah, well, that was a couple days ago.
Speaker B:This is here.
Speaker B:So President Trump actually wound up at this conference.
Speaker B:And this is a picture of him.
Speaker B:And I'll put this up later on the screen, even though we don't have Virgil here because it's just worth a share.
Speaker B:President Trump on Fed Chair Powell.
Speaker B:And this is a direct quote.
Speaker B:And they're showing him in front of, on a stage.
Speaker B:Yeah, I'd love to fire his ass.
Speaker A:That's a quote.
Speaker B:I mean, can you imagine?
Speaker A:What is it exactly that you were hoping for him to do?
Speaker A:Honestly, though, I. I don't know.
Speaker B:I really don't know.
Speaker B:And I'm not criticizing one or the other because I've been on the receiving end of somebody making comments like that that was really just political.
Speaker B:So I get, I get that there's, there's reasons for both, but can you imagine that?
Speaker B:You're Jerome, pal.
Speaker B:You're at home.
Speaker B:Yeah.
Speaker B:Where your purple tie on.
Speaker A:You're inching closer to retirement, going, you.
Speaker B:Know, next May, I'm.
Speaker B:I'm out, done.
Speaker A:You know, I gotta answer nobody anymore.
Speaker B:I gotta deal with this.
Speaker A:Yeah.
Speaker B:Then you go, huh?
Speaker B:Everybody's out of the country right now.
Speaker B:They're at that Saudi forum like, no one's gonna mess with me today.
Speaker B:Yeah.
Speaker A:It's gonna be a light week.
Speaker B:You, you know, he's watching cnbc.
Speaker B:In the background.
Speaker B:Because if I'm watching, he's watching it.
Speaker B:I'd love to fire his ass.
Speaker A:He's got to be laughing, right?
Speaker A:Like he knows that he can't be touched.
Speaker B:You.
Speaker B:Well, you knew he felt that way anyway, you know, but it's just seeing it on a screen, it doesn't make you feel any better about it.
Speaker A:No.
Speaker A:I mean, everybody that is a high ranking official, I feel like at this point just knows that that gentleman really knows how to control the narrative.
Speaker A:His own narrative.
Speaker A:He knows how to control it and he's gonna.
Speaker A:He's gonna grab the bulls by the horn and he's just gonna control that thing.
Speaker B:Well, it was.
Speaker B:It was certainly a strange day for.
Speaker B:For a guy like me who, who likes to watch cnbc.
Speaker B:And there was definitely weird clips.
Speaker B:But in between all of this, there was a reoccurring theme around housing that really caught my eye that I thought was valuable to talk about on the show.
Speaker A:Mm.
Speaker B:And before we go down this path, I want to give a bit of a disclaimer.
Speaker B:A listener who listens to the show reached out to me and said that I sound like a perma bear.
Speaker A:Perma bear.
Speaker B:Yeah.
Speaker B:And for those of you who are unfair with the term, there are a lot of people who are economists or in the financial sector who kind of always are on the cusp of saying the economy is going down.
Speaker B:And the last thing I want to do is have people think that of me.
Speaker B:But I can see why they think that of me given the context of the shows, particularly last year.
Speaker B:And I think that that's reasonable because there's a lot of people saying the economy's got to go down, it's got to go down, it's got to go down.
Speaker B:But you got houses at an all time high, stock market at an all time high.
Speaker B:Bitcoin just coming off of an all time high.
Speaker B:Right.
Speaker A:And then the claim from the.
Speaker A:From that side.
Speaker A:Right.
Speaker A:Is a broken clock is right two times a day.
Speaker A:You keep saying it enough, eventually it's going to happen.
Speaker A:You're going to pat yourself on the back.
Speaker A:Look, I told you so.
Speaker B:Yeah.
Speaker B:Peter Schiff is one of those people who, you know, he's been a perma bear, if you will.
Speaker B:Always concerned about things.
Speaker A:Noriel Norreal Robini.
Speaker B:Definitely a perma.
Speaker B:There's a lot of people that are in that space that are still very well respected from an economist perspective, from just an overall finance perspective.
Speaker B:But what I will say is you start talking to people who feel that way, and one of the reoccurring themes that I see is that they are typically in their mid-30s or late-30s, maybe even early-40s.
Speaker B:And people go, well, Chris, what, What does that have to do with it?
Speaker B:Well, they've lived through probably 20 years of what is arguably the most economically prosperous times in American history.
Speaker B:And every time people have said this for the last several years, they have been wrong.
Speaker B:So I get why anybody listening to the show would go, okay, you guys are just wrong like everybody else before you.
Speaker B:And I would say the data that we're going to share tonight is not based on my opinion or Saeed's opinion.
Speaker B:The data that we're going to share tonight about real estate is meaningful data which says that the market narrative that you're hearing is not what you're being told.
Speaker B:And I actually didn't include articles where I've seen Zillow and the national association of Realtors put out data that contradict this.
Speaker B:But then Zillow, in the case of Zillow, their own data contradicts their own, like rosy perception projections.
Speaker B:Right?
Speaker B:Yeah, it's really strange.
Speaker B:And Redfin obviously comes out as a winner here.
Speaker B:There's some other places too, from a data resource perspective that we'll go over.
Speaker B:But what I will tell you is the housing market is in my mind in a recession already.
Speaker B:People go, okay, well Chris, that means you don't believe in housing.
Speaker B:No, I do believe in housing.
Speaker B:I think housing long term is still a great idea, but I do think we have short term pain ahead.
Speaker B:Do.
Speaker B:If you asked me today, Chris, is still good to buy a house?
Speaker B:Yeah.
Speaker B:It's still good to buy stock.
Speaker B:Yeah.
Speaker B:But you should never be buying it if you're buying it for the next six months to a year.
Speaker B:I would say that's foolish if you're buying it for a long term, like play or you're buying a house because you need one and the rent situation versus cash flow makes sense for you.
Speaker B:Do it never hold off because we're here?
Speaker A:No, absolutely.
Speaker A:And we've all we've said, look, at the end of the day, We've gone through 14 years of artificial interest rate deflation.
Speaker B:Right.
Speaker A:And in order for that pendulum to swing back in the other direction, usually a healthy cycle lasts every, what, seven years, right?
Speaker B:Seven to 10 years.
Speaker B:Peak to peak, trough trough.
Speaker A:Peak to peak, trough to trough.
Speaker A:There you go.
Speaker A:So this is now just taking longer for the pendulum to swing back the other way.
Speaker A:And at the end of the day, we were basing everything we've said off of the data that we've been seeing.
Speaker B:Is it so shocking that it's taking longer to swing back the other way?
Speaker B:I think people, people forget this.
Speaker B:If we live through the longest prosperous economy in American history, fact, not opinion.
Speaker B:And it was largely propped up by stimmy checks and artificial interest rate deflation.
Speaker B:Why is it a surprise to anybody that it's taking a lot longer to correct?
Speaker B:Yeah.
Speaker B:Why does that surprise anybody?
Speaker A:Right.
Speaker A:I know.
Speaker A:And just look no further than the S P500 being super top heavy by the max 7.
Speaker A:Right.
Speaker A:Look no further than the top 10 earners are making up 50 of all the consumption.
Speaker A:Right.
Speaker A:These, these things are literally propping up the, the economy as a whole.
Speaker A:Right.
Speaker A:It's only a matter of time when that continues to dwindle down and eventually it will.
Speaker A:Correct.
Speaker A:But let's get into this housing data as a reminder.
Speaker B: Dave Ramsey said in: Speaker B:I'd like you to send a message to Dave Ramsey courtesy of the higher standard saying he was wrong after you hear these notes.
Speaker B:The Fed raises alarm over deterioration in the U S housing market.
Speaker B:Here's what that means for hopeful buyers.
Speaker B:The U.
Speaker B:S Housing market is in a slump and the Federal Reserve has taken notice.
Speaker B:This according to money wise notes from the Fed meeting in September highlighted concerns about a weakening job market alongside potential housing market deterioration.
Speaker B:Despite the slowdown in housing activity, Fed chair Jerome Powell reiterated on October 13 that the Central bank won't directly intervene in the mortgage market.
Speaker B:And to explain that that is not their mandate.
Speaker B:So he's not saying we're not intervening because he has like an ability to and is not.
Speaker B:He's saying their mandate is not to protect home prices.
Speaker B:Right, Right.
Speaker B:It's a part of the data they look at for things like inflation, but it's certainly not their primary core responsibility.
Speaker B:So there is not a need for them to intervene.
Speaker B:I wish you would say that a little bit more clearly than we are not going to intervene because to the American people who don't understand the mandate, it sounds like he doesn't care.
Speaker B:Yeah, right.
Speaker B:Many homeowners are struggling, according to ADAM data and I love ADAM data, they're really big in the housing market.
Speaker B:And as of September, foreclosure filings were 20% higher than a year ago.
Speaker B:Right.
Speaker B:On a national scale, one in every 3,997 housing units had a foreclosure filing.
Speaker B:Yeah.
Speaker B:Look at that little pretty screen behind us.
Speaker B:Screen SARS on Yeah, I'll figure that out later.
Speaker A:So I got, I got the stats.
Speaker A:A deeper dive on that too.
Speaker A:From the Atom data.
Speaker A:Data, right.
Speaker A:Top 10 states.
Speaker B:You give it to me, I'm going to fix the screen.
Speaker A:Yeah, there you go.
Speaker A: off number one, one in every: Speaker A:A lot of that has to do with the higher insurance premiums that a lot of people are having a really hard time getting insurance out in Florida, obviously because of natural disasters.
Speaker A:And a lot of the properties that are owned out there are investment properties due to the influx of the buyers during the, the recent boom that they've experienced.
Speaker A:Rounding off the list, that number two on the list was South Carolina, then Illinois.
Speaker A:Number four was Delaware, Nevada, Ohio, Iowa, Maryland, Utah.
Speaker A:And last to round off the top 10 was California, which was one in every 3,400 housing units experienced foreclosures.
Speaker A:Chris is fixing the screen, but he's.
Speaker A:He's struggling back there.
Speaker A:What's that?
Speaker A:No, I do know what I'm doing.
Speaker A:What's interesting, though, is the median sale price of homes right now, this is based on Redfin data of a home in the US is $440,000.
Speaker A:Right.
Speaker A:That's up 1.4% year over year.
Speaker A:Right.
Speaker A:You say what's going on here?
Speaker A:You're telling me that on one hand, you're telling me foreclosures are up 20%, but on the, on the other hand, housing as a whole is up 1% year over year.
Speaker A:That's because.
Speaker A:That's because it's regional.
Speaker A:Right.
Speaker B:I'm pretty sure I'm never going to fix that screen.
Speaker A:So.
Speaker A:But it should also tell you that the foreclosures that we've seen.
Speaker A:So what I was just telling the listeners and I don't know if you were tuning in.
Speaker B:I could listen anything you have here in the next room.
Speaker A:So housing is up 1.4% year over year, which is kind of.
Speaker B:Again, that's such a misrepresentation.
Speaker B:And for the full disclosure for everybody listening to the show, Apple changed the way their lock screen feature works.
Speaker B:And now I don't know what the screensaver thing is.
Speaker B:So it's just going to change.
Speaker A:It's going to change.
Speaker B:Yeah, yeah.
Speaker B:It's just going to.
Speaker B:We're going have to kick that thing over.
Speaker B:Actually, I should bring the mouse with me.
Speaker B:I can fix that problem.
Speaker B:So the problem that I have with this metric, and I'm going to grab the mouse in a second, is that that is an average nationally, but there are massive corrections taking place and a slowdown in transactions.
Speaker B:So those two things combined, you've got a theoretical problem that's, that's being unaddressed.
Speaker B:Problem number one is that with a slowdown of transactions, the volume of transactions, you have less comparable sales with which you can look at to say, okay, more houses are trading, so we're seeing prices go up or down.
Speaker B:That means any price increase or decrease is just going to take longer because there's less transactions to move the needle, number one.
Speaker B:And number two, that average across the country doesn't take into effect that there are housing markets that are massively slumping.
Speaker B:Austin, San Jose, Los Angeles, San Francisco, these markets are impacted dramatically and their prices are actually moving down.
Speaker B:Right.
Speaker A:So I mean, I guess it begs the question, if we're experiencing tough times right now, if we're experiencing a labor market that's clearly weakening, if, if home prices are too high and mortgage interest rates are way too high, why haven't foreclosures spiked even more?
Speaker A:Because as of right now, Only half of 1% of all mortgages are under foreclosure.
Speaker A:When you look back at the great financial crisis, right, 4% of all mortgages were under foreclosure.
Speaker A:And I know we're ways away from there.
Speaker B:See, I don't think that's a barometer of a good healthy housing market though either.
Speaker B:I think that that's.
Speaker B:So again, we're getting a little bit more in the theoretical space, but I think it's worth a conversation.
Speaker B:If you can't look at the great financial crisis and say that's normal, that's your baseline.
Speaker B:Yeah.
Speaker B:That's not that.
Speaker B:That was a two and a half plus standard deviation black swan event.
Speaker B:Okay.
Speaker B:And yeah, housing was massively impacted by that.
Speaker B:But I don't think you see the same cracks in the housing market today due in large part to Dodd Frank reform and underwriting, due in large part to this equity that people have, the housing lock in effect that's happening now.
Speaker B:Yeah.
Speaker B:Do I think that if you have, if you're behind on your mortgage and you have equity, and a lot of people do, some don't, but a lot of people do, what do you do?
Speaker B:Well, you, you refinance if you can, and if you can't, then you sell.
Speaker B:Yeah.
Speaker B:Right.
Speaker B:So for their people, people being in foreclosure now, am I like highly worried about it?
Speaker B:No, but there are some things in the industry which are a great concern to me and I'll great example of this.
Speaker B:You're now seeing people.
Speaker B:So you Know how like.
Speaker B:And I don't be respectful, so I'm gonna try to mine my words here so I don't sound derogatory.
Speaker B:During the great financial crisis, there was a subprime boom.
Speaker B:A lot of loan officers got rich.
Speaker B:There is a similar boom right now happening with loan officers providing line of credit products.
Speaker A:Yes.
Speaker B:And it's particularly attractive to the loan officers selling them because some of them can get approval and turnaround cash in their accounts in three business days.
Speaker B:So you get a loan application on a home equity line of credit, three days later, you as a mortgage loan officer can get paid on that.
Speaker B:So you're highly incentivized to sell versus waiting how long versus a traditional mortgage refinance.
Speaker B:If you go fast, you know, two to three weeks.
Speaker B:Okay.
Speaker A:Yeah, it's really fast.
Speaker B:And not including a purchase transaction that's typically take you longer.
Speaker B:Yeah.
Speaker B:You know, call it 30 days.
Speaker A:Yeah.
Speaker B:So it's a little bit longer life cycle there.
Speaker B:So, yeah, there's, there's some material differences in how they can get paid.
Speaker B:If you think about it from their perspective, a lot of people have equity upside in their home right now because they bought when homes were value a lot less and rates were lower.
Speaker B:So they tap into that, that line of credit mortgage.
Speaker B:What are you doing?
Speaker B:You're, you're eating away that equity.
Speaker B:Right.
Speaker A:It's not ideal.
Speaker B:It's not ideal, but it's also what it's there for.
Speaker B:But then what happens when that equity gets tapped into and all your debts, you know, come due?
Speaker A:I mean, rates adjust.
Speaker B:Yeah, it's.
Speaker B:It's a problem.
Speaker A:It's a problem.
Speaker A:They put things into perspective for people.
Speaker A:So real quick, first, what Chris mentioned earlier was the lock in effect.
Speaker A:20% of the mortgages out there right now are below 3%, 32% are locked in somewhere between 3 to 4% and 72% of all mortgages out there are locked in 5% or below.
Speaker B:So naturally, a line of credit is attractive to people who are locked into that.
Speaker B:They don't want to lose that super low rate.
Speaker B:They've got this equity, they've got a bunch of debt from all this consumer discretionary spending they spent when times were good.
Speaker B:Inflation is crept up and their dollar doesn't go as far as it used to.
Speaker B:So you try to keep the same standard of living.
Speaker B:But what happens, that standard of living that once was easy for you to maintain now becomes cash flow negative for you.
Speaker A:Right.
Speaker B:So.
Speaker A:And to put things into a greater perspective for everyone, why none of us should use the great financial crisis as a baseline or a barometer for the next housing, you know, correction or adjustment.
Speaker A: million foreclosures in: Speaker A: Just: Speaker A: Not: Speaker A: ion foreclosures last year in: Speaker B:Yeah.
Speaker A:Just put things into perspective.
Speaker A:I don't think you can bank on another event like that happening.
Speaker A:Hopefully for everyone that doesn't happen.
Speaker A:Right.
Speaker B:But that should show you nobody knows.
Speaker B:Yeah, nobody knows.
Speaker B:And nobody knows what comes next.
Speaker B:I think there's a lot of concern as to where.
Speaker B:I mean, we talked about private credit markets, we've talked about private equity, we've talked about the AI bubble, we've talked about housing market.
Speaker B:I don't know if any one of these things are big enough to cause an event, but there's certainly little things that can happen.
Speaker B:And some people might be saying, okay, well, Chris, why are there foreclosures happening now and why are you focusing on this?
Speaker B:Well, according to Yahoo Finance, more than half of US homes lost value in the past year.
Speaker B:Yeah.
Speaker B:Okay, this is why you're seeing it.
Speaker B:Let's break this down.
Speaker B:Home values are falling for more than half of the nation.
Speaker B:So you just heard from.
Speaker B:You said while I was in the other room and I was paying attention to you, believe it or not, so handsome.
Speaker A:I carried that pretty well, you know.
Speaker B:Oh, you burnt.
Speaker B:Smell that?
Speaker A:I did not.
Speaker B:Oh, God.
Speaker B:You.
Speaker B:That was regenerative dirty.
Speaker B:This is why you don't drink.
Speaker B:Did you say it was?
Speaker B:Regina?
Speaker B:Is it that protein?
Speaker B:This is.
Speaker B:This is why you don't drink protein.
Speaker B:Sparkling water, bro.
Speaker A:This is unbelievable.
Speaker B:That was gnarly.
Speaker B:I was feeling bad because I had salmon for dinner, and then that happened.
Speaker A:I had salmon for dinner, too.
Speaker B:Did you really?
Speaker B:I can tell.
Speaker B:Okay.
Speaker A:The same thing.
Speaker B:Wasabi salmon.
Speaker B:Nasty.
Speaker A:Well, the fact that you called it out, too.
Speaker A:I've never called out one of your farts on the show.
Speaker B:First of all, I don't fart on the show.
Speaker B:Okay.
Speaker A:Now you're superhuman.
Speaker B:If it's not audible, it didn't happen.
Speaker A:Now you're superhuman.
Speaker B:You know, I'm not superhuman.
Speaker B:I just don't fart on the show.
Speaker B:Damn.
Speaker B:You respect me that much?
Speaker B:No, man.
Speaker B:I've had colorectal surgery.
Speaker B:I can't hold it anymore.
Speaker A:What does that mean?
Speaker B:You don't know what might come out?
Speaker A:Can't trust this thing.
Speaker B:Yeah, you don't know.
Speaker B:Can't tell what's going on down there.
Speaker B:It's better Better not to try and see.
Speaker B:So if more than half the nation, the biggest share in more than a decade, lost value in their home when the US Was still struggling to claw out of the Great Recession, that's the last time this happened.
Speaker B:2010.
Speaker B:That's to your point.
Speaker B:As of October, 53 of homes in the country had lost value in the past year, according to Zillow's data.
Speaker B:Zillow, Nationally, home price appreciation has been roughly flat to the.
Speaker B:I think it was point.
Speaker B:1.4%, you said, or is 0.4.
Speaker B:What was it?
Speaker A:1.4% up year over year.
Speaker B:Yeah.
Speaker B:Okay.
Speaker B:Based on Redfin, that's year over year, not necessarily last year.
Speaker B:But that figure masks large regional disparities, which you and I have already talked about.
Speaker B:Home prices are falling in much of the Southeast, in parts of the west, while they're rising in many cities in the Midwest and Northeast.
Speaker B:Now, I have a theory about this that I've long believed in, and I want to get into why I believe this is to be the case in a very normal course of action.
Speaker B:Okay.
Speaker B:Prices have been cooling in much of the country this year as inventory levels have climbed, but buyer demand hasn't materialized.
Speaker B:Many would be.
Speaker B:Buyers have remained on the sidelines in economic uncertainty, mortgage rates above 6%, and ongoing price standoff with sellers to put.
Speaker A:A number, to put a number on that.
Speaker A:How many buyers are waiting on the sideline?
Speaker A:Freddie Mac has projected that there's 3.7 million.
Speaker A:Home shortage.
Speaker A:Right.
Speaker A:JP Morgan's is estimated somewhere between 3 to 4 million.
Speaker A:The Fed Reserve is saying somewhere around 3 million.
Speaker A: u know, building starts after: Speaker A:Right.
Speaker B:Yeah.
Speaker A:I mean, they, everybody, all the, all the work, all the construction companies you.
Speaker B:Have, they pulled back, but you also have construction companies right now offering massive incentives to try to get.
Speaker B:We covered that in previous shows.
Speaker B:There's a little bit of that in the show notes tonight that I just skipped over.
Speaker B:But they're, they're, they're seeing the, the weak demand, too.
Speaker B:Yeah.
Speaker B:So even though there is a home shortage, why would they build more when they're offering massive incentives to sell the product they already have?
Speaker A:Right.
Speaker A:It's kind of, it's like another version of what we all experience or the people out there that experience trying to buy a car during the pandemic.
Speaker B:Oh, yeah, right.
Speaker A:Why would we bring an entire warehouse of cars to fill our lots when we're just going to sell a few off at a time?
Speaker A:Yeah, right.
Speaker A:And why they're literally going to control the market.
Speaker B:So my theory on this historically has been that house price appreciation starts in the coasts and it works their way into the Midwest.
Speaker B:And house price depreciation typically starts in the Midwest and works their way out to the coasts.
Speaker B:But this time I'm not seeing that.
Speaker B:I'm seeing the opposite happen where it started on the coast and worked its way inland.
Speaker B:And now it's the regional areas that grew fastest that are probably a little more overblown.
Speaker B:We saw Austin, for example, blow up.
Speaker B:I blame Joe Rogan.
Speaker B:We saw parts of the Pacific Northwest blow up.
Speaker B:We saw a lot of that Sunbelt region, Miami, those places blow up and prices are starting to correct in those areas.
Speaker B:I think that's the beginning.
Speaker B:And then I think what happens is you start to see it in the Midwest and then it taps back out to the coast again.
Speaker A:So yeah, there's an article out and I'll have to find it again to plug it into the show notes.
Speaker A:But with potential looser zoning and permitting rules, the, the south thinks that they can supply the shortage of homes and maybe correct the problem over there within the next three years.
Speaker A:That's their estimate.
Speaker A:Probably not going to happen.
Speaker A:Probably a little overzealous if you ask me.
Speaker A:Right?
Speaker B:Yeah.
Speaker B:Demand there.
Speaker A:But also the west believes, because we talk about regions.
Speaker A:Right.
Speaker A:South, West, Midwest and Northeast.
Speaker A:Right.
Speaker A:The Midwest and Northeast are saying they're not even touching it.
Speaker A:They don't even, they don't even think that there's a solution.
Speaker A:Right.
Speaker A:As far as adding more supply and new construction.
Speaker B:That's the Midwest and Northeast.
Speaker A:Yeah, that, that based on the article, the west and the south feel like they can correct the problem somewhere between three to seven years.
Speaker A:Right.
Speaker B:I would say so.
Speaker B:I'll use Miami as a proxy.
Speaker B:The last time I flew into Miami, which was about a year ago, the level of high end luxury multi family apartments being built as you leave the city.
Speaker B:And I was going from there to the Everglades, the drive from there to Naples or Fort Myers and Naples and that's, I mean it's pretty healthy drive.
Speaker B:But when you leave the city, you leave the airport and you go towards the Everglades.
Speaker B:It was just massive high end luxury apartment building complex after another, all under construction.
Speaker B:I look at that and think to myself, okay, you think that you can meet demand and affordability, but you're not really building homes, you're building rentals.
Speaker B:Those rentals are commanding a high price.
Speaker B:Okay.
Speaker B:But home values aren't declining fast enough to make A mortgage payment more affordable than even the high rental price.
Speaker A:There you go.
Speaker B:But the rental price is so high you really can't save.
Speaker B:So I think, I think this all comes back to like one prevailing theory.
Speaker B:Every time I have this conversation.
Speaker B:I had it today with a gentleman who referred to me as a perma bear.
Speaker B:And I get where he came from.
Speaker B:Is what scares me the most is not that all these things are happening and that we're going to have a recession.
Speaker B:Okay.
Speaker B:That doesn't scare me the most.
Speaker B:These things are healthy fixes.
Speaker B:Right.
Speaker B:What scares me the most is that I don't see a way that wages keep up.
Speaker A:No, right.
Speaker A:That's the scary part.
Speaker B:Unless something changes, I would say in a good proxy for this is CEO compensation.
Speaker B:Executive compensation at publicly traded companies versus people that are working lower levels has grown significantly over the years.
Speaker B:You want to know why inflation has grown significantly compounded by compound interest.
Speaker B:But you're not seeing the same level of increases is interesting.
Speaker A:So a lot of times the reason why athletes love their contracts being exposed and being public.
Speaker A:Right.
Speaker A:You can compare statistically.
Speaker A:It's a comp.
Speaker A:Apple to Apple.
Speaker A:He this is how much he produce.
Speaker A:I can produce.
Speaker A:That CEO is no different.
Speaker A:Their comps are public.
Speaker A:Right.
Speaker A:Because when they a certain number of the top paid executives or top paid people at a company, they, their salaries get reported.
Speaker B:The CEO, CFO and the president, if it's applicable in the industry.
Speaker B:But you're typically your top three highest paid and two other for like five in and around.
Speaker B:I'm watering down SEC rules.
Speaker B:So most institutions, it's like your top five highest paid executives.
Speaker A:Yeah.
Speaker B:And if, if your cfo, which is rare, isn't one of those and your CEO isn't one of those, then then those two too.
Speaker A:Right.
Speaker A:And then I'm sure you should probably have more experience with this than I do.
Speaker A:But I'm just thinking of, okay, you got the comps, what's the market cap of the company?
Speaker A:How big is it?
Speaker A:How many employees is it is nationwide.
Speaker A:Right.
Speaker A:Like all these things get factored in and you find a comparable comp.
Speaker A:Right.
Speaker B:Oh, dude.
Speaker B:This is why I pushed so aggressively for years with my comp was I knew that I was underpaid relative to my position.
Speaker B:But I knew if I set the barometer for my comp, anybody who ever hired me again, if I wanted to do that, and it's funny, don't want to do that anymore, if I wanted to do that, would have to look at that as my most recent comp.
Speaker B:It's one thing when somebody comes into your office and says, hey, I want half a million dollars.
Speaker A:Right.
Speaker B:It's another thing when somebody comes into your office and goes, you.
Speaker B:We all know that I made a million last year.
Speaker A:Yeah.
Speaker A:And we know you want me.
Speaker A:So, you know, the bare minimum, like, that's.
Speaker B:That's what I was getting made.
Speaker B:Even if it's not the bare minimum, you know, that's where I was at.
Speaker B:So, you know, your target needs to be in and around there.
Speaker B:Yeah, right.
Speaker A:Yeah.
Speaker A:Makes sense.
Speaker B:And then you also know, like, how much of it was cash, how much stock compensation.
Speaker B:I will say where it gets weird with executive compensation is they also get paid a base salary, which is your W2 wages.
Speaker B:But then they also typically get a waterfall of stock, which is.
Speaker B:Usually you get a stock award every single year.
Speaker A:Yeah.
Speaker B:But you get one third of that upfront that year, another third the next year, another third the next year.
Speaker B:So after you've been at the company for three years, you're getting three waterfalls from the three previous years.
Speaker B:That one for that year, and then two from the previous two years that you had coming to you.
Speaker B:And you kind of have like this staggered payout over time.
Speaker A:Yeah.
Speaker A:So.
Speaker A:And then for.
Speaker A:For employees out there.
Speaker A:Right.
Speaker A:They're where they live, cost of living there, all that gets factored into their pay.
Speaker A:Whereas if everybody's salaries were exposed, now, I'm not.
Speaker A:I'm sure there's pitfalls to this too.
Speaker A:Okay.
Speaker A:But if all this was exposed, then now you could, you know, maybe have more room to negotiate.
Speaker A:Well, so and so is getting paid this much at this so and so company.
Speaker B:So California tried to put in law which made talking about your salary something that could not be prohibited because companies try to prohibit it.
Speaker B:Right.
Speaker A:And the postings now have to post the.
Speaker B:The range.
Speaker A:The range, yeah.
Speaker A:Yeah.
Speaker B:And I get a little bit of a logic behind that, but I would say it's an effort and futility because the human complex is a challenge here.
Speaker B:We have been raised to believe, particularly men and some, in some cases, there's.
Speaker B:There's females that are now fitting this mold as well.
Speaker B:And I see more and more of it, and I get it.
Speaker B:We tie our ego to how much money we make.
Speaker B:We make.
Speaker B:And the last thing you want to do is have your ego challenge.
Speaker B:So most people still very much keep this private.
Speaker B:One of the things that I routinely do when I talk to people is I will talk about how much money I make.
Speaker B:One, it's available on Google.
Speaker B:So, you know, it's it's not like I'm giving away the house, but two, it's one of those things where I like, I like to be transparent.
Speaker B:Why is it so funny?
Speaker B:It's just a terrible.
Speaker B:Right.
Speaker B:It's on Google.
Speaker A:Yeah.
Speaker A:If it was private, maybe I wouldn't tell you.
Speaker A:But it's public, so I'll tell you.
Speaker B:It is a problem with Google too is also wrong.
Speaker A:The net worth thing is wildly wrong.
Speaker B:The network, do I say I'm worth $50,000?
Speaker B:Yeah.
Speaker B:And it's because it's taking my style.
Speaker A:Well, it can go both ways.
Speaker A:Sometimes it could, it could over inflated too.
Speaker B:Yeah, I haven't had that experience yet.
Speaker B:I'd like to have that experience someday, but I have not had that experience.
Speaker A:Yeah, usually those things only have to do with like public filings, right?
Speaker B:Yeah.
Speaker B:They're just taking the stock.
Speaker B:Public filings and kind of reverse engineering what your worth would be based off those filings.
Speaker B:But yeah, it's whatever.
Speaker B:But you know, I look at all that stuff and I think to myself, like I, I like to have the conversation with people and I know that I'm not the highest paid guy in the room especially, especially now.
Speaker B:But I think it sets like this candor where like, look, like I don't have an ego tied to this.
Speaker B:Like you're not going to impress me with how much money you make.
Speaker B:Right.
Speaker B:You know, and the other question is, is, well, okay, you.
Speaker B:There's a lot of people I know who don't make a lot of money, but they're worth a whole lot of real estate, you know, for example.
Speaker B:So neither here nor there, but I think it's, it's a meaningful conversation because the pay gap disparity between what I would call most of your workers and the people who run these companies or the people who own these companies has gotten bigger.
Speaker B:And it scares me a great deal to think that we are creating this barbell shaped economy with the workers and.
Speaker A:The wealthy and the situation's only getting worse, man.
Speaker B:Well, that's the problem.
Speaker A:I mean we're going to get into later on the show again about people dumping their Nvidia stock.
Speaker A:Right.
Speaker A:But you think about, it's not just these companies like Nvidia Open AI anyone that's in the AI space.
Speaker A:It's our own government.
Speaker B:Yeah.
Speaker A:Saying that and pushing for it, saying that, oh, this will replace tens of millions of jobs.
Speaker A:What are we going to do with those people that have jobs?
Speaker B:Yeah.
Speaker A:Right.
Speaker A:And it's like we're not, we're just not gonna Address this issue.
Speaker A:So what is it?
Speaker A:Are you, are you, are they suggesting, are they starting to get ready for the idea of get ready for Universal Basic Income?
Speaker A:Because where are you gonna get, where are you gonna come up with that money?
Speaker B:And see, that narrative bothers me a great deal too, because I've spent a lot of time reading about history.
Speaker B:So history and archaeology are kind of like my nighttime, I can't sleep reading.
Speaker B:Right.
Speaker B:That and sending you really inappropriate text messages and scheduled intervals over the next day.
Speaker B:Right.
Speaker B:To make you feel like I'm actually engaged in how you feel and I'm not.
Speaker A:But by the way, if you, if you.
Speaker A:My scheduled interval text messages are always at an off time, so it can never come off as being.
Speaker A:So it'll be like 8:37am oh yeah, me too.
Speaker B:I do the same.
Speaker B:It's, it's never like 8:30.
Speaker B:No, no, no, no, no, no, no.
Speaker B:That's scheduled.
Speaker B:But look, I, I, I think there's a great deal of consternation in the economy with people saying, well, Universal Basic Income sounds like a great thing for me.
Speaker B:I'm, I'm guaranteed to make money.
Speaker B:I don't have to work in as hard as I am.
Speaker B:I'm not, I'm not downplaying how hard people feel like they're working.
Speaker B:If you don't believe that capitalism is working for you, that concept sounds great, right?
Speaker B:If you, if you believe, and there's a lot of people in this category sounds great.
Speaker B:It sounds great.
Speaker B:I am not aware of an example where socialism has ever worked.
Speaker B:And unfortunately, Universal Basic Income is a socialist concept.
Speaker A:Imagine getting Universal Basic Income and then them controlling what data points come out on inflation saying your cost of living has only gone up 2.9%.
Speaker A:This is how much you're going to get in addition next year.
Speaker A:And you're like, bro, inflation was like 19%.
Speaker A:What are we talking about?
Speaker B:Yeah, well, I mean, can you imagine?
Speaker A:It's Social Security.
Speaker A:This is Social Security that we're talking about.
Speaker B:But you also remember when inflation was 9.1%, all the companies were like, ah, it comes back down.
Speaker A:How convenient.
Speaker B:It comes back down.
Speaker B:And you're like, does it what?
Speaker B:I don't remember disinflation happening of 9.1%.
Speaker B:No, matter of fact, that never happened.
Speaker A:Yeah.
Speaker B:And most of that year, if you're lucky, you got a pay raise of 5%.
Speaker B:Most people got 3%.
Speaker B:Some people didn't get any.
Speaker B:Let's finish on the housing stuff.
Speaker B:I got a lot here.
Speaker B:Nick Gurley via X Home Values Always go up, right?
Speaker B: Always not in: Speaker B:Zillow just reported that over 50% of houses in the US experienced a declining Z estimate over the last 12 months.
Speaker B:Zillow, a big backer, says that 50% of houses saw their Z estimate go down.
Speaker A:And so those are, those are probably happening in major metropolitan areas right now.
Speaker A:Think of the people that have bought in those areas, dude, if they're first time home buyers, they put three and a half percent down.
Speaker A:Are they underwater?
Speaker B:They likely are.
Speaker B:If you buy it in this economy recently, yeah.
Speaker A:Scary, man.
Speaker B:This is why I tell people I worry about the near term.
Speaker B:I'm not worried long term.
Speaker B:If you bought recently and you're you, your ZSA means nothing to you.
Speaker B:Those are the unrealized losses.
Speaker A:Those are the people that I'm worried about that took the advice that real estate's always going to go up.
Speaker A:It's always going to go buy, buy, buy, buy.
Speaker B:I believe Danger Ramsey, that's all his fault.
Speaker B:I blame him.
Speaker B:Yeah.
Speaker B: most widespread decline since: Speaker B:That's a pretty massive decline.
Speaker B: the great financial crisis in: Speaker B:There's tons of REO real estate owned that banks own.
Speaker B:They were trying to liquidate the market slowly over time as to not impact their balance sheet and cash flow.
Speaker A: rices didn't bottom out until: Speaker B:That's right.
Speaker B:The main issue right now is that house prices are too high.
Speaker B:It's a simple concept.
Speaker B:Inflation income, rent adjusted prices are all near their highest level on record.
Speaker B: re in a bigger bubble than in: Speaker B:Now Nick Gurley gets a lot of heat for this online.
Speaker B:The housing pundits love to poke holes for this inflation adjusted rent adjusted calculation, but I've always seen his data.
Speaker B: This goes from: Speaker B:Inflation adjusted home prices.
Speaker B:That's a pretty standard metric, right?
Speaker B:You adjust home prices for inflation.
Speaker B:Okay.
Speaker B: We're in a bigger bubble than: Speaker B:It doesn't take a rocket scientist, but let's just spell it out for the kids in the back.
Speaker B:Okay, to go.
Speaker B: ded in this calculation since: Speaker A:So.
Speaker B:That means that you're not accounting for wage increases.
Speaker B:Do you really think we had at one point in time in a single two year span home prices that went up 45% in some regions.
Speaker B:Do you really think wages went up 45% in two years?
Speaker B:Because if so, somebody forgot to write my check.
Speaker B:Right.
Speaker B:I'm just saying.
Speaker A:Well, also, that means nothing to you unless you, unless you cash in.
Speaker B:That's right.
Speaker B:So you look at, you look at some of this stuff and you think, okay, what are we doing?
Speaker B:Why are we so against the idea of we are in a housing correction of some type?
Speaker B:I won't say recession because it's got a negative connotation to it, but a housing correction, why is that so stigmatized?
Speaker B:Why is that so bad?
Speaker B:If you're in a house and you're paying your mortgage right now and you got the lock in effect, what do you care?
Speaker B:Right?
Speaker B:You're losing money you weren't going to get because you weren't going to sell anyway because you're locked into that rate.
Speaker A:Well, for, because a lot of people aren't.
Speaker A:I mean, we've, we've covered this on the show.
Speaker A:This is the bulk of their net worth.
Speaker A:This, they, they're banking on this so they don't want to see it ever go down.
Speaker B:I, I get that.
Speaker B:But you can't always win in life, right?
Speaker B:Okay.
Speaker B:You got to take some L's to appreciate the W's.
Speaker B:You know what I mean?
Speaker B:If our sons were in the room, we'd have the conversation with them about sometimes you got to lose to enjoy the win 100.
Speaker B:And yet we as humans want to sit here and say, ah, housing prices go up every year.
Speaker B:They're go up every year for the next five years.
Speaker B:And we're just going to ignore the data?
Speaker B:50% of the country is going to say that isn't true.
Speaker B:My home price went down this year.
Speaker B:Now, not granted, I didn't sell.
Speaker B:But here's the other thing we just talked about.
Speaker B:The trans.
Speaker B:The, the, the transactional volume being so low.
Speaker B:Okay, well, if the transaction volume were higher, I guarantee you prices would be decelerating or going down at a faster rate.
Speaker B:But we're not seeing that because of the mortgage lock in effect.
Speaker B:But you can't ignore that.
Speaker B:The valuation impact is real and it's not a bad thing.
Speaker B:You never want to be absolutely at the top because there's only one, one direction to go and we're going that direction now in the housing market.
Speaker B:And honestly, I don't see it as a terrible thing.
Speaker B:I really don't.
Speaker A:Y flowers need water to grow.
Speaker A:They need rain.
Speaker A:Joy wouldn't feel so good if it wasn't for pain.
Speaker A:Shout out 50 did you just off the dome 50 said he's.
Speaker A:He's always welcome on the show.
Speaker A:He's.
Speaker A:We love him.
Speaker A:He's the number one troll on the Internet.
Speaker B:If you're.
Speaker B:If you're driving right now or you're in the gym, you're welcome.
Speaker B:You're thinking to yourself, he really put that in the show notes.
Speaker A:No, no, no, that's in there.
Speaker A:Flowers need water to grow.
Speaker A:They need rain.
Speaker B:That was taking up a couple gigabytes of his memory banks.
Speaker B:Like that was in there locked in.
Speaker A:Come on, you got some lyrics in the memory banks?
Speaker B:I'm tapped out.
Speaker B:No lyrics, no sports data, nothing.
Speaker A:That's a lie.
Speaker B:I don't even know how tall Wembley is.
Speaker B:I think he's just tall.
Speaker B:Wemby Wembley.
Speaker A:Wemby Yama.
Speaker B:Yeah, that's it.
Speaker B:See, that's extra memory I don't need.
Speaker A:Okay, for.
Speaker A:We're 49 minutes into the show.
Speaker A:You know, this man grew two inches.
Speaker B:This summer, so no one's going to mention anything about a pituitary problem now.
Speaker A:2 inches.
Speaker B:How old is this guy?
Speaker A:I'm looking at my son like, you really want to play this?
Speaker A:This is what you want to do?
Speaker B:How old is this guy?
Speaker A:20, 21.
Speaker A:I don't know.
Speaker B:Okay, so I guess he's still in the grow.
Speaker B:And how tall is he?
Speaker A:Seven five.
Speaker B:Seven five shooting.
Speaker A:Step back, threes with the handle.
Speaker B:He was seven three before.
Speaker A:Yeah, he makes.
Speaker A:He makes centers look small.
Speaker B:He's got a pituitary problem.
Speaker B:Right.
Speaker A:This is crazy.
Speaker B:I mean, like.
Speaker A:But he just got injured again.
Speaker B:So I told you, remember, like a previous show, It's a problem who's got to do is not get injured.
Speaker B:But at that height.
Speaker B:Yeah, that.
Speaker B:That's not.
Speaker A:I know.
Speaker B:That's not good.
Speaker A:He's impressive.
Speaker A:I want to watch him play.
Speaker B:I want to go.
Speaker A:I just want to see it in person.
Speaker A:Sponsored.
Speaker B:According to Yahoo Finance, a record of 41% of home builders, 41% are cutting prices this month, topping 40% for the first time on record.
Speaker B:Home builders live through the financial crisis.
Speaker B:Yeah, we're seeing more of them cutting prices this month than we saw ever before in history.
Speaker B:Is that not concerning?
Speaker A:Well, then, yeah, they need to get rid of their inventory.
Speaker B:Right?
Speaker B:I mean, but here's my problem again.
Speaker B:This is.
Speaker B:They got bills to pay, the housing bill.
Speaker B:The builders know there's an inventory shortage, which is keeping housing prices high.
Speaker A:What makes you think that they're going to start building more?
Speaker B:Why would you want to.
Speaker B:You want house prices to stay high.
Speaker A:Especially because material and cost of labor.
Speaker A:Right, labor, materials and the costs are going up.
Speaker B:Okay, but, but if 41%, the highest on record are cutting values of new homes they have just built, what do you want to bet they're still making money on those homes even with the cut price?
Speaker A:No.
Speaker A:They have to.
Speaker A:Right, okay, but how much of this, how much of this is, is, you know, the big dogs.
Speaker A:Lenard, Dr. Horton.
Speaker A:Right.
Speaker A:What's the other one?
Speaker A:Toll Brothers.
Speaker B:Tolles.
Speaker A:Tolls, Right, Toll Brothers.
Speaker A:How much of this is them being like, all right, let's weed out some of these like other builders, let's lower our prices.
Speaker A:Right.
Speaker A:And then those other guys, they're going to get shafted.
Speaker B:Yeah, that was the.
Speaker A:I mean that's a good business play by them.
Speaker B:Lending Tree model back in the day, Doug loved to May rest in Peace and Anthony Shea did that in the mortgage markets.
Speaker A:What's the model?
Speaker B:So when they launched Lending Tree and Home Loan center was their lending arm, Lending, Lending Tree was the lead aggregator.
Speaker B:Like the online platform is owned by Interactive Court.
Speaker B:Barry Diller, whose then CFO was Dara, who's now the CEO of Uber.
Speaker B:They would.
Speaker B:Their model was based on we're going to make loans at pretty much an economic loss or as close to par as we could and cut out all the brokers in the space when times are tough because they're going to sell their loans back on the secondary market, make a small gain on sale and they're going to make some money on that.
Speaker B:But they were trying to just do such massive volume, get money in the backside.
Speaker B:Right.
Speaker B:Because they had a lead aggregator in the front side.
Speaker B:So they were selling leads to other people as well.
Speaker B:In LendingTree, they were making money in the backside, selling into the market on Home Loan center, they didn't need to make the money up front.
Speaker B:Once they shrunk the market small enough, they could then start charging fees because there weren't so many independent brokerages and mortgage brokers in the way because they had all gotten shrank out of the system.
Speaker A:Got it.
Speaker B:So.
Speaker B:And that's exactly what happened.
Speaker B:Then Anthony Shea did what he typically does, he pulled out and got out of the market with magical timing, as per usual.
Speaker B:Left the market, literally went fishing, became a sports fisherman, bought the biggest home in Newport beach on the water there so we could park his big ass sports fishing boat and then got back in and started Loan Depot.
Speaker B:Built that up.
Speaker B:This time he didn't exit quite the same way.
Speaker B:I think he stayed.
Speaker B:His chairman left, now he's back in the company, running the company a little bit.
Speaker B:But that man has been able to dip his toe in and out of the, the market Timing in exceptional ways, man.
Speaker B:Like it's, it's incredible.
Speaker A:Okay, so.
Speaker A:Well, timing is something that actually you and I haven't spoken about and I would.
Speaker A:I just want to get your take on this.
Speaker A:I understand how difficult this would be from a policymaker standpoint on how this could ever even get done.
Speaker A:But you're starting to hear, okay, the, the option for a 50 year mortgage, dumb idea.
Speaker A:Everyone agreed, everybody hated it.
Speaker A:But everybody was like, that's terrible.
Speaker B:The only people who I saw like co signing were like realtors.
Speaker B:Like, we're like, this is a great idea.
Speaker B:Nobody keeps a house for a long term.
Speaker B:You can do this.
Speaker A:Right.
Speaker B:I'm like, yeah, but the new one.
Speaker A:That they're floating now is portable mortgages.
Speaker B:Yeah.
Speaker A:Right.
Speaker A:The reason why that's not possible.
Speaker A:Right.
Speaker B:Well, it just doesn't make any sense.
Speaker A:It doesn't make any sense is okay, these loans are sold off into the secondary market.
Speaker A:How would you, how would you make everybody whole?
Speaker B:Or plus you're changing the underlying collateral out.
Speaker A:Yeah.
Speaker B:There's an inherent risk, like, so how do I know as a lender that I don't finance a beautiful property?
Speaker B:And then you transfer that to a terrible property.
Speaker A:Exactly.
Speaker B:I mean it's got fraud written all over it.
Speaker B:It has to be re.
Speaker B:Underwritten again.
Speaker A:Right.
Speaker B:So you're going to carry the same debt.
Speaker B:I mean it makes no, it makes no sense.
Speaker A:I don't know how, I don't know how they could even get this done.
Speaker B:You can't.
Speaker B:Right.
Speaker B:You would have to restructure banks, the secondary market, I mean, there's just no world where that makes any sense at all.
Speaker B:Yeah.
Speaker B:So yeah, the whole, I saw that come up in a, in like a late night, like posting that I was reading, my wife was already sleeping and then she's like, what?
Speaker B:I'm like, nothing.
Speaker B:Yeah, she thought it was sexy time or something.
Speaker A:Right, right.
Speaker A:Well, the whole, the whole 50 year mortgage thing was such a bad idea because everyone saw out the gate, you're not really saving a whole lot of money.
Speaker A:You're actually spending four times the amount of money in interest.
Speaker A:So terrible idea out the gate.
Speaker B:Terrible.
Speaker A:But they see headline, you know, transferable mortgage.
Speaker A:Right.
Speaker A:And people are like, that sounds like a great idea.
Speaker A:Find a way to do that.
Speaker B:Yeah, sure, I'd love to, I'd love to see somebody suggest an idea that actually works.
Speaker B:Because I don't, I don't see it.
Speaker B:The other thing I'm seeing too recently, which is another one of those ideas, we were like, oh, my God, it's so sensational.
Speaker B:It's a brilliant idea.
Speaker B:People are like, oh, why would you want a credit card, say, and pay all that high mortgage, high interest on your credit?
Speaker B:I don't want it.
Speaker A:Yeah, tell me.
Speaker B:I don't want that.
Speaker A:I hate this.
Speaker B:How about I give you a credit card and I only charge you 6 or 7% interest?
Speaker A:Really?
Speaker B:Yeah.
Speaker B:When you want that.
Speaker A:That sounds.
Speaker A:I'm paying 22 over here.
Speaker B:Yeah, this is a great credit card for you.
Speaker B:It's.
Speaker B:It's a really interesting concept.
Speaker B:I'm going to give you the credit card, but it's going to be secured by the equity in your home.
Speaker B:And I'm like, so what, you've given people home equity lines of credit now.
Speaker A:Just to use to buy groceries, but.
Speaker B:Instead of giving them access to their bank account where they can normally use it, you're giving them the credit card and just say, come on here.
Speaker B:And people are literally eating this up, going like, oh, my God, this is an amazing concept.
Speaker A:This is already, in fact, this is already in place.
Speaker B:The thing.
Speaker B:No company that does this.
Speaker B:Right now.
Speaker A:Right now.
Speaker A:Right now people are signing up for this.
Speaker B:I think it's the build card or whatever it's called.
Speaker B:I can't remember what it's called.
Speaker A:Yeah, the build card is the one that a lot of renters use to.
Speaker A:To gain, to get points.
Speaker B:Different company, but there's a company who literally is like.
Speaker B:And I can just see like some guy, like a VC guy sitting in his office in San Francisco, and then he gets like this deck.
Speaker A:And a lot of people got a lot of equity.
Speaker A:How can we tap into this?
Speaker B:And these kids come in, hey, man, we've got this brilliant idea.
Speaker B:Really?
Speaker A:What is it?
Speaker B:We're going to give people a credit card secured by their house.
Speaker B:The VC guy goes, yeah, isn't that a home equity line of credit?
Speaker B:No, no, it's not.
Speaker B:It's a secured credit card.
Speaker A:Boom.
Speaker B:Why is it a secured credit card?
Speaker B:Good question.
Speaker B:See, clearly you're astute.
Speaker B:The reason why it's a secured credit card is because we're going to give them a credit card.
Speaker B:That's how they access it.
Speaker A:It's secured with their house.
Speaker A:It's all marketing.
Speaker A:It's mad men.
Speaker B:But can I just use a home equity line of credit and use it with my bank account like that anyway?
Speaker B:But you don't have a credit card.
Speaker A:Yeah, yeah, yeah.
Speaker A:Okay, see?
Speaker B:And now we can sell it to everybody who owns homes, tap into the equity, and that guy gets like a hundred million dollars for a capital raise.
Speaker B:And I'm sitting here going like, yo, we can't get a podcast sponsor.
Speaker A:I'm one.
Speaker B:I'm just saying.
Speaker A:Come on, y'.
Speaker A:All.
Speaker B:Actually, that's not true.
Speaker A:Shout out to Tushy.
Speaker B:Tushy hooked us up.
Speaker B:Yeah.
Speaker B:I'm gonna make some videos.
Speaker B:I'm telling you right now, it's gonna happen, right?
Speaker A:Look, this is gonna happen.
Speaker B:It's got a butt warmer on it.
Speaker A:Well, who doesn't want butt warmers?
Speaker B:It's got an anti deodorant.
Speaker A:Like, honestly, you wake up at 2 o' clock in the morning, you got to use the restroom in my house.
Speaker B:The bowl's lit.
Speaker B:It's lit.
Speaker B:Lit.
Speaker B:It's lit.
Speaker B:Literally.
Speaker B:And bathroom too.
Speaker B:I felt bad for you.
Speaker B:I'm like, damn, damn.
Speaker A:Let's go change out the seat cover.
Speaker B:Till she come into the game time late.
Speaker B:Right, but listen, did you put a plug in the wall behind the back?
Speaker B:Behind the toilet?
Speaker A:No, but there's one next to the toilet.
Speaker B:Like, where?
Speaker B:Like how far?
Speaker A:Oh, like right here.
Speaker A:But it's high.
Speaker A:It's not low.
Speaker B:You gotta have your guy come back and put it low.
Speaker A:Yeah, put it low.
Speaker A:You wake up at 2 o' clock in the morning, use the restroom.
Speaker A:My house, you gotta sit down.
Speaker A:That's the rule.
Speaker A:Everybody sits down when using the restroom.
Speaker A:Who wants to sit down on a cold seat?
Speaker A:Nobody.
Speaker B:I'm sorry, that's a rule in your house?
Speaker A:Yeah, you gotta sit down when you use the restroom.
Speaker A:100.
Speaker B:Why?
Speaker A:Come on, man.
Speaker B:What do you mean this?
Speaker A:What do you mean?
Speaker A:What do you mean, what do I mean?
Speaker B:You don't stand to go, like, number one, never.
Speaker A:Not in my house.
Speaker A:No way.
Speaker A:And at, like, close people, close friends house, it's like I find it disrespectful to stand in somebody else's house too, man.
Speaker B:I don't know how to tell you this, bro, but I've student got number one at your house.
Speaker A:That's terrible.
Speaker B:Why is it terrible, bro?
Speaker A:The splash.
Speaker B:Are you kidding me?
Speaker B:I lift his seat up.
Speaker A:Come on, man.
Speaker A:You haven't seen any of the videos online about this.
Speaker A:I'm gonna have.
Speaker A:Oh, man.
Speaker A:This is.
Speaker B:Who watches videos online about standing up and going pee, how to be clean.
Speaker A:It's not about cleanliness.
Speaker B:What do you mean, cleanliness?
Speaker B:That's the whole point.
Speaker A:It literally splashes out if you stand up.
Speaker B:Okay, I don't Want to be the bearer of bad news here, chief?
Speaker B:But urine is sterile.
Speaker A:No, man.
Speaker A:In my house.
Speaker A:In my house, you're sitting down.
Speaker A:Sitting down, using the restroom.
Speaker A:And if you're not the type that doesn't sit down, we're gonna have problems.
Speaker B:Okay, so you ever use a urinal when you go out in public?
Speaker A:That's not my house.
Speaker A:That's.
Speaker B:Do you use a year?
Speaker A:Yeah, yeah, yeah, 100?
Speaker B:You do.
Speaker B:Okay, cool.
Speaker A:Yeah, the stadium, for sure.
Speaker B:Great.
Speaker B:I'm glad you said power.
Speaker A:Wash it down.
Speaker A:Yeah.
Speaker B:And you don't think that splatters on your legs?
Speaker A:What?
Speaker A:What am I, bro?
Speaker A:You.
Speaker B:You on your shoes.
Speaker A:Yeah, that's why you got to take your shoes off when you come into my house.
Speaker B:I'm sorry.
Speaker B:The top of your shoes are dirty.
Speaker A:What are you talking about?
Speaker A:It's.
Speaker A:What do you.
Speaker A:What do you think it is?
Speaker A:It's splattering.
Speaker A:It's on the top of your shoes.
Speaker A:I can't believe we're having this conversation.
Speaker B:I can't believe we have this conversation.
Speaker B:This is disgusting.
Speaker B:This is terror.
Speaker A:This is terrible.
Speaker A:Chris.
Speaker B:What do you mean?
Speaker B:Chris, everybody stands up.
Speaker A:Think of.
Speaker A:Think about Misha.
Speaker B:Wait, my cat?
Speaker B:Yeah, her.
Speaker A:Bro.
Speaker A:Her bed is right next to the toilet.
Speaker B:I'm not saying that I don't sit down to pee.
Speaker B:I just still have to pee in your house.
Speaker A:I want to make it very clear.
Speaker A:No, that is not what you have insinuated.
Speaker A:You stand up and pee in your own house.
Speaker B:I. I do stand up.
Speaker B:Be my house.
Speaker B:Yeah.
Speaker A:That's disgusting.
Speaker B:If you get up 2 o' clock in the morning to go pee.
Speaker A:That's gross.
Speaker B:You're gonna sit down and go pee.
Speaker A:Sit down, bro.
Speaker A:Sit down and sit down.
Speaker A:And honestly, if.
Speaker A:If, like, someone comes out the restroom and, like, they're willing to shake your hand because they're not afraid that their hands aren't wet.
Speaker A:Come on, bro.
Speaker B:So do you still believe that wax paper ass gaskets protect you from disease?
Speaker A:It protects you more than not.
Speaker B:Come on, man.
Speaker B:Hold on.
Speaker A:It doesn't.
Speaker A:You're gonna tell me.
Speaker A:You're gonna tell me a cover.
Speaker A:Does it protect you a little bit?
Speaker A:More than not.
Speaker B:There is no wax paper gasket in the world doing anybody any.
Speaker B:Go to China.
Speaker B:I believe those.
Speaker B:The ones that have, like, little plastic rings, that rope right back around, bro.
Speaker A:What is that?
Speaker A:No, hold on.
Speaker A:That.
Speaker A:It, like, it comes.
Speaker A:It puts it on it for you.
Speaker B:Yeah.
Speaker A:Hold on.
Speaker B:We.
Speaker A:We were at.
Speaker A:Where we go.
Speaker A:We went to.
Speaker A:We went to Pachanga, right?
Speaker A:And the Women's bathroom had this.
Speaker A:The men's bathroom didn't.
Speaker B:Yeah.
Speaker B:When you flush, the little plastic ring literally wraps around.
Speaker A:I've never seen one in person in Japan.
Speaker B:It's amazing.
Speaker A:Really.
Speaker B:And they're warm seats, too.
Speaker A:They got tushy out there.
Speaker B:Well, I mean, yeah, Pre tushy.
Speaker B:Tushy.
Speaker A:Got it.
Speaker B:If I could say tushy in Japanese, I would, but I don't know how to say tushing.
Speaker B:Japanese.
Speaker A:You do know how to speak Japanese, though.
Speaker B:I don't know how to say tushy in Japanese.
Speaker B:I'm sorry.
Speaker A:You know, to say a lot, though, huh?
Speaker B:What do you know?
Speaker A:It's respectful.
Speaker B:Yeah.
Speaker A:What does that mean?
Speaker B:It means you're hairy.
Speaker B:Yeah.
Speaker A:Factual.
Speaker B:All right.
Speaker B:I have a lot more to go over in their housing market, but why don't we want to skip to Michael Burry, man.
Speaker A:So he had to close shop.
Speaker A:What happened, Michael?
Speaker B:Well, it's not just Michael.
Speaker B:Okay, so Bill Ackman to unveil a plan for mortgage giant Fannie Mae and Freddie Mac this week.
Speaker B:He basically came out and said that he had a plan to kick these GSEs and make them, you know, work.
Speaker B:But I'm gonna cut to the chase here because we're gonna get to this Michael burry stuff.
Speaker B:Little fun fact about billionaire hedge fund Bill Ackman said he would unveil his new propose proposal next week, which was actually this week.
Speaker B: deral conservative ship since: Speaker B:Well, the problem with this great grand plan is that he owns a company called Pershing square.
Speaker B:Ever heard of it?
Speaker B:Yeah.
Speaker B:You have?
Speaker B:Good.
Speaker B:Well, he has a pretty significant stake in both companies.
Speaker B:As a matter of fact, it's his largest holding at Pershing Square.
Speaker B:Okay.
Speaker B:So for him to come out to say that he has a way to make these economically viable for the government and it's a great plan for everybody.
Speaker B:He should probably over emphasize the fact that he has a vested interest in the outcome because that is his largest holding.
Speaker B:Yeah.
Speaker A:So I'm pretty sure everybody knows when.
Speaker B:A billionaire speaks, they.
Speaker B:I'm pretty sure everybody didn't know.
Speaker B:Yeah.
Speaker B:So there's that.
Speaker B:His strategy I broke down.
Speaker B:I can provide in the show notes if anybody really wants it.
Speaker B:But let's talk about Peter Thiel.
Speaker A:Peter Thiel.
Speaker B:Peter Thiel or Thiel, depending on how you say it.
Speaker B:I've heard it both ways.
Speaker A:What's he most famous for?
Speaker B:Well, so there's this little company called Palantir that he helped.
Speaker A:Company kind Of a big deal kind of.
Speaker B:Kind of big deal.
Speaker B:Michael Burry recently, however, took almost a billion dollars and bet the stock price is going down.
Speaker A:Okay.
Speaker A:So he's got a lot of puts out there, a lot of puties.
Speaker A:Okay.
Speaker A:So when we've.
Speaker A:We've covered what those are on the show before now, you're betting the stock.
Speaker B:Price and go down.
Speaker A:You're betting that the stock price is going to go down.
Speaker A:And if it does, in fact go down, you make a lot of money.
Speaker A:Right?
Speaker B:Yeah.
Speaker B:Putties, baby.
Speaker A:Yeah, the puts.
Speaker A:Now, how long does he have or do.
Speaker A:Do when you do.
Speaker A:When people.
Speaker B:Even durations, you can buy them for short duration, you buy them for longer duration.
Speaker B:I don't know what his durations are.
Speaker A:So whatever his durations are, he.
Speaker A:He made those puts and then seemingly, I want to say, like two weeks later.
Speaker A:Right.
Speaker A:Three weeks later, he decided to close down shop.
Speaker B:Yeah.
Speaker B:So he had Zion claiming, management so.
Speaker A:Upset, saying, I. I no longer understand this market in this economy based on everything that he thought he knew.
Speaker A:It should have tanked.
Speaker B:It was no longer based on fundamentals, that it was based largely on emotion.
Speaker B:And I get that.
Speaker B:And I. I feel the people who, who are concerned about my rhetoric about, you know, the perma bear comments.
Speaker B:I feel exactly the way he does.
Speaker B:Like, I'm looking at the market, and it.
Speaker B:It looks like it's based on hype and emotion.
Speaker B:And as somebody who tries to be an objectively logical investor, I look at the fundamentals, the metrics in the market, and I say, this doesn't make any sense.
Speaker B:And if you're Michael Burry and you're managing other people's money, you say, okay, I. I can't bet in this market.
Speaker B:I can't make decisions here.
Speaker B:Now he isn't getting out of the market.
Speaker B:That's a warped message.
Speaker A:Yeah.
Speaker B:What he's doing is he's deregistering Zion Asset Management, which requires him to disclose on a quarterly basis what his trade activity is.
Speaker A:Okay.
Speaker B:And by doing that, he's going to continue to run his family office and continue investing.
Speaker B:So you will no longer see his trades.
Speaker B:Which is actually brilliant because him disclosing his trades moves the market.
Speaker B:It does.
Speaker B:And a great example of that is Peter Thiel, or Thiel, whatever you want to say.
Speaker B:Tech billionaire Peter Thiel Hedge fund has sold off its entire stake in Nvidia.
Speaker B:Yikes.
Speaker A:Good.
Speaker B:During the third quarter, a regulatory filing showed intensifying worries of an artificial intelligence bubble.
Speaker B:Yeah, I'm pausing for episodes.
Speaker B:Yeah.
Speaker B:And I'm Burping salmon in your face.
Speaker B:The fund, Theo macro, sold about 537,742 shares in in the AI chip front runner in the quarter, the filing showed on Friday.
Speaker B:The stake would have been worth around $100 million as of the company's closing price on September 30th.
Speaker B:And of course, he ain't the only one.
Speaker B:This, according to CNN Business, why some elite investors are turning on the.
Speaker B:The darling of the AI rally.
Speaker B:Turning on.
Speaker B:Maybe like.
Speaker B:Wait a minute, turning on.
Speaker B:Turning on isn't like turning on.
Speaker B:It's turning.
Speaker B:I'm going.
Speaker B:Turning against it.
Speaker B:Yeah, I know that.
Speaker B:Some of, some of you listening are perverts.
Speaker A:They like it.
Speaker B:These prominent investors with almost nothing in common are dumping their shares of Nvidia, the computer chip juggernaut that went from relative obscurity to the world's first $5 trillion valuation in just three years.
Speaker B:It's hard to overstate Nvidia's superlatives on its own.
Speaker B:It makes up 8% of the total value of the S&P 500.
Speaker B:Wow.
Speaker B: % between: Speaker B:And just to remind everybody out there in video made gaming chips.
Speaker A:Yeah.
Speaker B:It just so happened that gaming chips were the most ideal proximate usage for AI.
Speaker B:Yeah.
Speaker B:So they could modify those chips and go into this area.
Speaker B:So Nvidia's share prices propped up because of what I like to call proximity.
Speaker A:Yeah.
Speaker A:And with all.
Speaker A:With all this rhetoric going around about the AI bubble that we covered on episode after episode after episode.
Speaker A:And now we.
Speaker A:It's coming out on Michael Burry cashing out, Peter Thiel cashing out, all these other people cashing out of their, you know, AI stocks.
Speaker A:It's got me thinking, and it's got a lot of people talking about how you're starting to see the diagrams.
Speaker A:Right.
Speaker A:On how open AI putting money into so and so company, another tech company, other tech.
Speaker A:And it's all funneling back and they're all propping each other up.
Speaker B:Oh, there's a lot of nepotism built in here.
Speaker A:A lot of nepotism.
Speaker A:And it, and it feels, it feels like in five years from now, we're going to be watching a documentary on, like, how did we all not see this coming?
Speaker B:And then I'm going to be the crazy guy with, you know, that weird bubble, the clown hair, balding pattern going like I told everybody back then.
Speaker B:That was crazy.
Speaker A:Yeah.
Speaker A:I told you.
Speaker A:Pull up the tapes.
Speaker A:It's all posted on YouTube.
Speaker B:Yeah, it's a problem.
Speaker B:And, well, Japanese conglomerate SoftBank said it had sold all of its Nvidia shares for 5, $8 billion.
Speaker A:Why is that a big deal?
Speaker B:Well, I mean, it's $5.8 billion.
Speaker B:That's probably a good place to start.
Speaker B:I mean, that's, that, that, that's a lot of dollars.
Speaker A:No, well, SoftBank known for, you know, placing a large bet on these, like future AI tech stocks.
Speaker B:Yeah.
Speaker B:Well, Michael Burry did it and he shorted them.
Speaker B:I will say that SoftBank didn't do that.
Speaker B:So hit their CEO Masayoshi Son remained fully abroad aboard the AI hype wagon.
Speaker B:And they already needed to gin up a bunch of cash soon to complete some transactions with $23 billion in investments in open AI.
Speaker B:So he's basically cashing one out to go into open AI is his pitch.
Speaker B:But I'm looking at this going like, wait a minute, wait a minute, wait a minute.
Speaker B:So you're going to generate 5.8 billion to go into 23 billion in open AI.
Speaker B:But open AI uses the chips for this company sells like it's, it's just, it's incestual, man.
Speaker A:Yeah.
Speaker A:It doesn't give me the warmth.
Speaker B:Like, I don't know if I should feel good about that or bad about that.
Speaker B:And then I see Peter Thiel and I see, I see Michael Burry.
Speaker B:Michael Burry's betting against the market.
Speaker B:Peter's pulling out of the market.
Speaker B:And mind you, Peter co founded Palantir.
Speaker B:Michael burry had a 4x bigger bet on Palantir stock going down.
Speaker A:Yeah.
Speaker B:Than he did on Nvidia stock going down.
Speaker B:He had 187 million, I think he had in, in, in Nvidia.
Speaker A:So I think, I think Michael bur.
Speaker A:I think Michael Burry's biggest frustration with this too is something I can't remember.
Speaker A:Maybe if I say enough of the buzzwords, you'll, you'll be able to pick up on it.
Speaker A:He was saying how something that gets overused in the stock market by these companies is how they do their capital improvements.
Speaker A:Right?
Speaker B:Oh, yeah.
Speaker B:So the capital improvement network, the, the.
Speaker A:Depreciating it over time and how they carry it over.
Speaker A:Right.
Speaker A:Ultimately propping up the stock is, is the biggest misconception.
Speaker A:And it's basically an accounting issue.
Speaker A:This is a big accounting issue.
Speaker A:Right.
Speaker A:Maybe you could explain that, man.
Speaker A:It's so, it's very complex.
Speaker B:Yeah.
Speaker B:Whenever you build in capital improvements, the way you can depreciate them over time follows a schedule.
Speaker B:And you know how you See all those Instagram influencers going like, oh, I bought this car, and it's over £6,000.
Speaker B:And I was able to write off all my taxes and had depreciated it automatically in year one, so the next year I can buy another car and appreciate that all in one year, you know?
Speaker B:And it's like, okay, well, that's kind of what these companies are trying to do, okay?
Speaker B:But with them, if you don't continue to build out capital improvements, you can't keep depreciating.
Speaker B:So you get caught up in this perpetual cycle of continuing to have to spend, to have to depreciate, and then you have this artificial feedback loop where you're building, building, building, building, building.
Speaker B:But once that merry go round stops, you wind up just destroying your income.
Speaker A:Oh, yeah.
Speaker A:And that's why there's.
Speaker A:There's this big old controversy with the data centers.
Speaker A:Right.
Speaker A:They got to keep building on the data centers.
Speaker A:Right.
Speaker A:And keep potentially building new ones after other ones have been complete.
Speaker A:Right.
Speaker A:To keep the train going.
Speaker A:Right.
Speaker B:Well, in.
Speaker B:In most of their defense, I will say that we are so deficient.
Speaker B:Again, I don't give out stock advice in the show, but what I will continue to say, and I've been ringing this alarm for a while, I don't think the real money is in chippies.
Speaker B:Chips are nice.
Speaker B:It's cute.
Speaker B:I think the real money is in charge.
Speaker A:Chippies are gonna be floppy disks.
Speaker B:Chippies are.
Speaker B:They come and go, man.
Speaker B:I mean, let's be honest.
Speaker B:You're gonna have someone come along and build out a quantum chip, and then that quantum chip's gonna just poop on all the rest of this stuff.
Speaker B:And people are like, why are you investing in quantum chips?
Speaker B:I don't know.
Speaker B:Why are you investing in Nvidia?
Speaker B:Well, there you were invested in Nvidia, and then it's just.
Speaker B:It's a whole thing, Right.
Speaker B:And then, you know, but no matter how this goes, the sure bet is you need more power.
Speaker B:Yeah.
Speaker B:Okay.
Speaker B:You cannot provide enough power to get enough compute, and you can't make the compute efficient enough, fast enough.
Speaker B:There's never been a court, of course, of history.
Speaker B:We've gone from, like, needing a little bit of power to needing a lot of power.
Speaker B:We were gone back, okay?
Speaker B:Yep.
Speaker B:It's always.
Speaker B:It's always uphill.
Speaker B:Like, we've never gone, like, you know what?
Speaker B:I can function with less power this month.
Speaker A:Yeah.
Speaker A:We had horses.
Speaker A:We got cars.
Speaker A:We never went back to horses.
Speaker B:You need to bet on power.
Speaker B:That's where the money Investing should go right now.
Speaker B:You had cryptocurrency miners, bitcoin miners.
Speaker B:You got this in the AI piece.
Speaker B:You got quantum computing.
Speaker B:And here's a little fun fact.
Speaker B:For quantum computing to come mainstream, you need to find a way to have efficient cooling to make these things work at normal room temperature.
Speaker A:I don't think most people know about that.
Speaker A:This requires power, a lot of power.
Speaker B:Yeah.
Speaker B:So if you know anybody who's selling Thanos stones or something like that out there, then invest in that.
Speaker B:But until such time, you need to find a way to invest in a electrical power plants and, and companies that build those out or supply material that build those out.
Speaker B:That's where the money's going to be.
Speaker B:The, the chip technology, all that stuff's going to change dynamically.
Speaker B:But no matter how you change this, they're going to need power.
Speaker B:And I don't see anybody tapping into Star Trek's anti matter like power cores, stuff like that anytime soon.
Speaker A:Some of the time they, they tried to, you know what happened?
Speaker A:They tried to power into Three Eye Atlas and that thing exploded.
Speaker B:You know, there was supposed to be this rhetoric about NASA releasing the most detailed photos that anybody ever had.
Speaker B:And I've seen like post after post after posts on different shows.
Speaker A:I've seen other from certain social platforms and I'm like, is this the real one or is somebody make this up?
Speaker B:And are we knocking?
Speaker B:Are we just going to ignore the fact that everybody, the mother was like, aliens are coming.
Speaker B:They're coming on November, whatever day it was.
Speaker B:And then nothing.
Speaker A:Nothing.
Speaker B:I mean, silence.
Speaker B:I mean, I'm just like, what, what happened?
Speaker B:And then I saw a post that allegedly it broke up into like 16 pieces.
Speaker B:Yeah.
Speaker B:Why?
Speaker B:I'll be honest.
Speaker B:Have you seen any photos recently?
Speaker A:No.
Speaker A:Which went away.
Speaker B:It's like somebody washed the Internet.
Speaker B:Yeah, right.
Speaker B:Have you seen anything?
Speaker A:No.
Speaker B:You're telling me it's closer now than ever before.
Speaker B:And I know it's supposed to go behind the sun at some point, whatever.
Speaker B:It allegedly broke up, right?
Speaker B:What?
Speaker B:Nothing.
Speaker A:Did you see how before it broke up they had, they had it pictured like it going like next to the sun and it did.
Speaker A:And it was just withstanding the heat.
Speaker B:Yeah.
Speaker B:It's curved.
Speaker A:What?
Speaker A:Yeah, a temple hat, baby.
Speaker A:Like this is all this.
Speaker A:I'm about this.
Speaker B:I'm just saying, man, like you look at this stuff and you think to yourself, like, okay, wait a minute, wait, hold on.
Speaker B:We were all talking about it when it's far away, when it got close, we all just were like this release Was Epstein files.
Speaker A:And it's.
Speaker A:And it's weird.
Speaker A:It slowed down its pace at one point.
Speaker B:Yeah.
Speaker A:Like, things don't.
Speaker A:This was about somebody explaining really funny on the Internet.
Speaker A:They were like, things don't slow down in space unless they were intended to slow down.
Speaker B:Yeah.
Speaker B:That is the way it works.
Speaker B:That's not the way physics works.
Speaker A:That's not the way.
Speaker B:Exactly, Matt.
Speaker B:Stephen Hawking be like, what's wrong with you people?
Speaker B:Yeah.
Speaker A:Come on.
Speaker B:I mean, try to explain that to him.
Speaker B:It slowed down on its own.
Speaker B:No, it didn't.
Speaker A:No.
Speaker B:That's not how this works.
Speaker B:There is no gravity.
Speaker B:You know why I think it's float in space?
Speaker B:Because it keeps going.
Speaker B:Yeah.
Speaker B:It speeds up.
Speaker B:It doesn't slow down.
Speaker A:Right.
Speaker B:That's how that works.
Speaker B:Okay.
Speaker B:Unless there's thrust or something pulling it, I. E. Gravitational pull of a planet or something, it keeps going faster.
Speaker A:Yeah, yeah, yeah.
Speaker B:And that's why you tune into the higher standard folks, for lessons in physics.
Speaker A:Yeah.
Speaker A:If you like that, you like anything you heard on the show, please subscribe.
Speaker A:Hit that notification bell.
Speaker A:Hit that like button.
Speaker B:I had so much better stuff, honestly.
Speaker A:It'll do a lot for the show.
Speaker A:Send the video to a friend if you think that they'll like it.
Speaker A:It'll do a lot for the show.
Speaker A:Leave us an honest five star review.
Speaker A:If you do leave us an honest five star review, it will be read on the show.
Speaker B:Did we go so far off the rails tonight that we didn't cover like 75 of what?
Speaker A:Bro, you stand up when you pee.
Speaker A:What do you want from me?
Speaker A:That's what you did that you.
Speaker A:You did that you're gonna get.
Speaker A:If for the listeners out there that stayed this long, leave a comment down below.
Speaker A:If Chris is crazy or if I'm crazy.
Speaker B:You're crazy.
Speaker A:I'm definitely.
Speaker B:Tell you right now, you're crazy.
Speaker A:I'm telling you right now, I'm not crazy.
Speaker B:I'm pretty sure that everybody listening to the show would stand up and pee in your house.
Speaker A:No, no.
Speaker A:Yeah, they will, because they're disrespectful.
Speaker A:That's why they're not.
Speaker A:That's why they're not invited to the house, bro.
Speaker B:Okay.
Speaker A:Hey, listen, let me ask you just a question.
Speaker B:Just, just.
Speaker B:I want to break into science because I fully.
Speaker B:I truly don't understand.
Speaker A:You want to break into the science.
Speaker B:I want to bring this.
Speaker A:There's a force going down into the bowl and.
Speaker B:Okay, no, I get.
Speaker B:I get the physics of what you're talking about.
Speaker A:Okay.
Speaker B:Okay.
Speaker B:So let's just say you go to a real.
Speaker B:What's a nice, clean restaurant that you go to?
Speaker A:No, no, no.
Speaker A:What do you mean?
Speaker B:Just pick a clean restaurant.
Speaker B:Hear me out.
Speaker A:Any clean restaurant.
Speaker B:Pick.
Speaker B:Pick your.
Speaker B:What?
Speaker B:You think it's got an immaculate bathroom?
Speaker B:What place do you go that's got an immaculate bathroom?
Speaker A:I don't go regularly.
Speaker B:What place has a nice bathroom?
Speaker B:Just ask the question.
Speaker A:Why don't you just pick up trash.
Speaker B:Patel, Right now just tell me, which place do you go that has a nice bathroom?
Speaker A:I go to nice restaurants.
Speaker B:Okay.
Speaker B:What nice restaurant do you go to that's got.
Speaker A:I go to plenty of nice restaurants with nice bathrooms.
Speaker A:Okay.
Speaker B:Okay.
Speaker B:Pick one.
Speaker A:This is what Cash Patel is doing.
Speaker B:Yeah.
Speaker B:Pick one.
Speaker A:Let's go.
Speaker A:Javier's.
Speaker B:Okay.
Speaker B:You go to Javier's?
Speaker A:Yeah.
Speaker B:As a guy in there, he's going to clean up, he's going to ask for a tip, give you some chick fil A, whatever.
Speaker A:You got to tip him.
Speaker B:Yeah, yeah.
Speaker B:That's always awkward.
Speaker B:But he's in the bathroom, so he.
Speaker B:His responsibility to clean it up.
Speaker B:He cleans it up nice.
Speaker A:Part of the reason why I don't go there.
Speaker B:Okay.
Speaker A:Make me tiff him.
Speaker B:Come on.
Speaker B:Are you gonna sit down and go number two in there?
Speaker A:No.
Speaker B:What?
Speaker B:You're not gonna go number two at a.
Speaker B:@ a restaurant?
Speaker A:No, I told.
Speaker A:We've.
Speaker A:We've had this conversation.
Speaker A:I'm Bro.
Speaker A:My cycle is clean, pure, first thing in the morning, every day.
Speaker A:Done.
Speaker B:See, I don't have that level of comfort in consistency at all, really, just to be clear.
Speaker B:But let's just.
Speaker A:Very weak stomach.
Speaker A:But let's just say digestive issues.
Speaker B:Let's just say I do have.
Speaker B:Clearly.
Speaker B:I had colorectal surgery.
Speaker B:Do I need to say it's one of the hills.
Speaker B:Everything's all messed up in there, bro.
Speaker B:I don't even know what's going on half the time.
Speaker B:He has his own personality, so.
Speaker B:All right, hear me out.
Speaker B:In a worst case of incenara, you had to go to the bathroom in this place, Would you sit down without your wax paper asking?
Speaker A:No.
Speaker A:If there wasn't any, I would.
Speaker A:Yeah, of course.
Speaker A:I have to.
Speaker B:You would sit down without one?
Speaker A:Yeah.
Speaker A:If I didn't have a choice.
Speaker A:If there's a choice.
Speaker B:Okay.
Speaker B:I'm.
Speaker A:I'm protecting myself.
Speaker B:All right, cool.
Speaker B:So you're putting it down.
Speaker B:You're sitting on it.
Speaker B:You're going number two.
Speaker B:If you had a choice.
Speaker A:If I had to, yeah.
Speaker B:All right.
Speaker A:Hasn't had to happen in a very, very Long.
Speaker B:Would you stand up and pee in that situation?
Speaker A:What I sent.
Speaker A:Yes.
Speaker B:Because you disrespect the restaurant.
Speaker A:No, no, it's not my restaurant.
Speaker A:It gets cleaned every night.
Speaker B:But it's still disrespectful, is it not?
Speaker A:No, no, no.
Speaker A:This is not somebody's home.
Speaker B:Okay?
Speaker A:Hey, going to somebody's home is not the same thing as going to a restaurant.
Speaker B:Fine.
Speaker A:First of all, I will always use a urine.
Speaker A:I would never.
Speaker A:I. I would never stand up.
Speaker A:No, no.
Speaker A:At a toilet.
Speaker B:Okay, I'm good with this.
Speaker B:So then you're live.
Speaker A:I've gone.
Speaker A:I've gone as far to say, like, if I've gone to the restroom and I've seen like urine on the toilet seat and I've used the urinal, I'll come out and somebody's waiting.
Speaker A:I'll be like, hey, that wasn't me, bro.
Speaker B:Okay?
Speaker A:And I'm not cleaning it.
Speaker B:I hear you.
Speaker B:I hear you.
Speaker B:So just to paraphrase what you said, if available, you would use the wax paper.
Speaker A:Yes.
Speaker B:You would stand up and pee at a public restaurant.
Speaker B:At a public restaurant, but you would not sit down and pee there because it's not.
Speaker B:Someone's going to clean the floors because it's probably.
Speaker A:It might be dirty.
Speaker B:However, if you were to come to my house, you wouldn't want to disrespect my house by.
Speaker A:I expect.
Speaker A:I expect your bathroom is clean.
Speaker A:You clean your bathroom.
Speaker B:But you would sit down on my toilet seat even though you know that I don't.
Speaker B:What if I went to the toilet seat before you lifted.
Speaker A:You lift the toilet seat?
Speaker B:No, no.
Speaker B:What if I sat on the toilet, I went to the bathroom, and then you came in and sat on the toilet.
Speaker B:Okay, yeah, that.
Speaker A:Then we basically disgusting.
Speaker B:We rub butts.
Speaker A:That would be disgusting.
Speaker A:But this is what you're saying.
Speaker B:You prefer me to rub my butt against your butt in your house?
Speaker A:I expect.
Speaker A:I expect there's nothing.
Speaker A:There's nothing worse.
Speaker B:You just paint yourself into a dark picture.
Speaker B:No, I did.
Speaker A:I absolutely did not.
Speaker A:I expect your house to be clean.
Speaker A:The toilet to be clean before I go and use it.
Speaker B:What if I use it before you went in and I sat down on it?
Speaker B:What do you mean my butt has touched this.
Speaker B:You don't have an ass gasket.
Speaker B:Your butt has touched my butt.
Speaker A:Yeah, that's.
Speaker A:I'm okay with that.
Speaker B:You're okay with that?
Speaker A:I'm okay with that.
Speaker A:You're not okay with that.
Speaker B:But you're not okay.
Speaker B:But you're not okay with sterile urine.
Speaker A:You're no e. Sterile urine.
Speaker A:Well, you're.
Speaker A:What?
Speaker A:You're in a sterile.
Speaker B:There's nothing bad in urine.
Speaker A:No, that's not true.
Speaker B:That's true.
Speaker A:That's absolutely not true.
Speaker B:If you have something bad in urine, you've got health problems.
Speaker A:There's a lot of people in this country that have health problems, my friend.
Speaker B:So basically you're saying you rather have my butt rubbed against your butt than being peed on.
Speaker A:Yes.
Speaker B:Good to know.
Speaker B:Now I know where our friendship sits.
Speaker A:You and I are close.
Speaker A:And if I don't use your bathroom inside your house is because I don't, like, I don't trust you.
Speaker A:I don't trust you dirty behind.
Speaker B:So if I ever come into the bathroom and I see that there's.
Speaker B:There's toilet paper on the toilet seat, I'm bringing.
Speaker A:I'm bringing toilet paper with me for that one.
Speaker B:I'm going to get you portable ass gaskets.
Speaker A:I'll be honest.
Speaker A:We bring them everywhere for the.
Speaker A:The kids.
Speaker B:Stop it.
Speaker A:We did.
Speaker A:Yeah.
Speaker B:Stop it.
Speaker A:I swear.
Speaker A:Especially for ar.
Speaker A:Yeah, cuz she has to sit down for everything.
Speaker A:Dude, theirs are so sick.
Speaker A:You put.
Speaker A:You put the gasket on and it covers all the whole toilet.
Speaker A:So like even like her thighs don't have to touch it.
Speaker A:Her calves don't have to touch it.
Speaker A:Yeah, bro, this.
Speaker B:This is how you create, like, psychological problems.
Speaker A:What are you talking about?
Speaker A:She's.
Speaker A:I want them to.
Speaker A:I want to promote cleanliness.
Speaker B:No, I get that, but at the same time, I don't know a single person.
Speaker B:Maybe you do.
Speaker B:I've never met a single person in my entire life.
Speaker A:What are you talking about?
Speaker A:You haven't met a single person.
Speaker A:Let me show you.
Speaker A:Let me read the reviews.
Speaker B:Let me finish the statement.
Speaker B:I don't understand the reviews.
Speaker B:Let me finish.
Speaker A:Okay.
Speaker B:I've never met a single person in my entire life who came back from the doctor and had a conversation with anybody and goes, you know, Chris, if it wasn't for that toilet that I sat on.
Speaker A:Because it's a.
Speaker A:No, it's a known fact, dog.
Speaker B:There is no hypothetical.
Speaker B:You are holding on to like old wives tales, like myths, old wives tales.
Speaker B:What.
Speaker A:What are you gonna get?
Speaker B:Okay, it might be dirty.
Speaker B:You know anybody who's ever gotten definitively sick from sitting on a toilet?
Speaker A:Dog.
Speaker A:9,000 reviews on Amazon.
Speaker B:That's for the product.
Speaker B:Yeah, because there's 9,000 people out there with psychological problems like you do, okay?
Speaker B:And half those are probably bots.
Speaker A:That's not true.
Speaker B:Yeah, they are.
Speaker B:Come on.
Speaker B:You can never trust Amazon reviews for start out right out the gate, okay?
Speaker B:Unless they come with a photo and have a human in it.
Speaker B:You cannot trust those reviews.
Speaker B:All right.
Speaker A:Trust the reviews of the Higher Standard.
Speaker B:Podcast because it's like four of them, but what I'm telling you.
Speaker B:Name one.
Speaker A:277.
Speaker B:I'm not counting.
Speaker B:217.
Speaker B:Name one person.
Speaker B:One person.
Speaker B:Oh, yeah, that, you know, that's ever definitively gotten sick from sitting on a toilet seat.
Speaker A:But no one's admitting that, bro.
Speaker A:Who's admitting that?
Speaker B:You wouldn't know, bro.
Speaker A:Staph infections for sure from that.
Speaker B:There is no one.
Speaker B:If you got a staph infection sitting on a toilet seat, I want to shake your hand.
Speaker A:Oh, yeah.
Speaker B:Okay.
Speaker B:What's left?
Speaker A:That's it.
Speaker B:We're.
Speaker A:We're an hour 22 in.
Speaker A:Let's go chat.
Speaker A:Let's do this.
Speaker B:Oh, my God.
Speaker A:Let's go.
Speaker A:Let's go.
Speaker A:Let's go.
Speaker A:Straight to chat.
Speaker B:I want to.
Speaker B:No, no, no.
Speaker B:If you're going to do this, I'm going to help you tailor the question because I don't trust our toilet seat.
Speaker A:Covers considered a value add.
Speaker B:No, no, no, no, no, no, no.
Speaker B:You're prompting.
Speaker B:Oh, no, no.
Speaker B:Are they?
Speaker B:What?
Speaker B:Just type in.
Speaker B:What's the probability of getting sick from sitting on a toilet seat without a public restroom.
Speaker B:Fine.
Speaker A:Okay.
Speaker A:What's the probability.
Speaker B:Yeah.
Speaker B:Of getting sick from sitting on a toilet seat in a public restroom without.
Speaker B:Ask gasket protection.
Speaker A:What's.
Speaker A:I wrote profitability sitting down.
Speaker B:Or you just type in raw dogging and toilet seat.
Speaker A:What's.
Speaker A:What's the probability of getting sick to any degree.
Speaker B:Fine.
Speaker B:If you rot down your toilet seat.
Speaker A:To any degree.
Speaker B:For sure.
Speaker B:This is going on your profile.
Speaker A:Sitting on a toilet seat without a cover.
Speaker B:Ten years from now, you're going to ask Chat GB to tell you about yourself.
Speaker B:It's going to tell you that you're a psychopath.
Speaker A:The probability of getting sick from sitting on a toilet seat without a cover, whether in a public or home, is low.
Speaker A:It's nearly negligible for most people.
Speaker A:Boom.
Speaker A:Hey, so listen, all I'm saying is this.
Speaker A:It said low, right?
Speaker B:Nearly negligible.
Speaker A:We've all watched.
Speaker A:We've all watched Dumb and Dumber nearly.
Speaker A:So you're telling me there's a chance.
Speaker B:No, come on, man.
Speaker A:You're telling me there's a chance?
Speaker B:I would go so far as to say you touching a handrail at an airport.
Speaker B:Oh, that's ten times worse.
Speaker B:Oh, oh.
Speaker A:And some.
Speaker A:Something I do for.
Speaker A:This is.
Speaker A:This is proven fact.
Speaker A:Never use the air dryer hand thing.
Speaker B:Oh, that's real.
Speaker A:That's absolutely disgusting.
Speaker B:Yeah, but see, that's moisture, heat.
Speaker B:It's recycling the air, all that stuff.
Speaker B:Yeah, your butt doesn't have that problem.
Speaker A:But that's it.
Speaker A:That's on the toilet seat too, because.
Speaker B:You don't touch your hands to your butt into your face.
Speaker A:Come on.
Speaker B:That's why you wash your hands.
Speaker A:Some people do.
Speaker A:That's disgusting.
Speaker B:Okay, let me.
Speaker B:Well, okay, let's just go with another hypothetical.
Speaker B:If you sit down on a toilet, use your ass gasket.
Speaker B:You're comfortable with life.
Speaker B:Okay.
Speaker B:Do you touch anything else?
Speaker B:How do you flush toilet?
Speaker A:I have to go home and take a shower right away.
Speaker B:How do you flush toilet?
Speaker B:It's got to be a sauna, 200 degrees.
Speaker B:Gotta kill the bacteria.
Speaker B:All the bacteria.
Speaker A:I gotta steam it.
Speaker A:Yeah.
Speaker B:I gotta use bleach.
Speaker A:Exactly.
Speaker A:I gotta jump in the pool first.
Speaker A:Chlorine, kill that bitch.
Speaker B:Yeah, man, I had a messed up comment.
Speaker B:I'm not gonna do it.
Speaker A:Don't do it.
Speaker B:After all this, if it's still messed up by comparison, you know it's bad.
Speaker A:Yeah, exactly.
Speaker B:Get me out of this show.
Speaker A:All right.
Speaker A:I love you, man.
Speaker A:I love you too.
Speaker A:Rail come back next time.
Speaker B:We missed you, I'm pretty sure you'd be on my side of the ass casket territory.
Speaker A:No.
Speaker B:Oh, for sure.
Speaker A:Oh, he's okay.
Speaker A:We're asking.
Speaker A:Top of the show next show.
Speaker B:I know.
Speaker B:He Raw Dogs.
Speaker B:I know.
Speaker A:I've seen him.
Speaker B:I've seen it.
Speaker B:I always look over.
Speaker A:I can.
Speaker B:I'm tall.
Speaker B:I see over the toilet stalls.
Speaker B:That's disturbing.
Speaker B:Yeah.
Speaker B:Hey, buddy.
Speaker A:All right, good night, everybody.
Speaker A:Okay, bye.
