Mamdani WINS, NYC Residents PANIC, Prop 50 PASSES + Will The AI Bubble BURST? | PBD Podcast | Ep 679

Summary

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PBD Podcast Ep. 679 Summary

Episode Title: Mamdani WINS, NYC Residents PANIC, Prop 50 PASSES + Will The AI Bubble BURST?
Date: November 5, 2025
Host: Patrick Bet-David (Pat/PBD), with Home Team: Tom, Barry Habib (real estate guru), and Brandon

Overview

The episode dives into the aftermath of the New York City mayoral election, examining what Zoran Mamdani’s win means for the city and the broader national landscape. They also analyze the potential economic fallout—including trends in migration, real estate, and investments—while addressing other hot topics: the AI investment bubble, US-China chip wars, Federal Reserve policies, California’s Prop 50 redistricting, and the ongoing impact of tariffs.

Pat and his panel bring a business-savvy, at times provocative lens to national and local political events, discussing how political changes ripple into markets, housing, and even national security.

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Key Discussion Points & Insights

1. NYC Mayoral Election & Mamdani’s Victory

Main Segments: [00:19]–[28:17], [91:03]–[108:46]

• Election Recap & Reactions:

  • Mamdani wins with ~50% of the vote, Cuomo second, Sliwa third. The hosts question whether this is a real mandate given the split opposition (“I’m not so sure this is a mandate that New York City totally got behind,” Barry, [11:03]).
  • Cuomo congratulated Mamdani; Sliwa vowed continued activism.
  • Mamdani’s victory speech—quoting socialist Eugene Debs, attacking the old guard—surprised media and even allies like Van Jones (“Where is your unifying wonderful guy? What happened?” Pat, [09:48]).
  • Speech called ‘divisive’ and ‘authoritarian’ in tone ([12:10], Tom likens rhetoric to “dog whistle back to the Mussolini days”).

• Cultural & Political Analysis:

  • Panel notes open religious and ideological assertions, even referencing an intern's “jihad” remarks ([15:05]):
    “The true believer knows…this is all jihad, this is all Ibadah, and this is all counted for by Allah.”
  • Pat frames this as a symbolic victory for Islam and socialism in America’s financial/cultural capital ([18:54]):
    “If you’re a Muslim, how massive of a victory this is for them? It’s massive.”
  • Discussion about NYC as a global prize; whether this signals a broader “case study” on urban governance and ideological shifts.

• Migration and Economic Fears:

  • Reports that up to 9% of NYC residents would “definitely move” if Mamdani won ([18:54], citing polls).
  • Panelists debate: will NYC see a population exodus or influx? (“It’s about who’s coming to New York City,” Pat, [18:54]).
  • Who will come? Possible increase in criminal, immigrant, and (their words) “worst types” of elements due to policy signals.

Notable Quotes

• Tom ([12:10]): “This is authoritarian speech…a dog whistle back to the Mussolini days.”
• Pat ([18:54]): “If the Islam religion comes to you and they hire you as a consultant…what is the number one city on that list? New York City. Bo, we got victory. They just won and they took over that city.”
• Barry ([11:29]): “It’s not a unifying speech…a very divisive speech.”

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2. Real Estate & Financial Fallout—Should You Buy, Sell, or Move?

Main Segments: [01:23]–[53:40]

• Could NYC Lose Its Wealth Base?

  • Miami/Florida realtors anticipate significant wealth migration (“Isaac Toledano joked that a lot of Floridians are going to give Mamdani an award for being the best broker of the year,” [33:42]).
  • Panel expects new taxes and safety concerns to drive residents and businesses south ([35:15] Tom: “He’s really doing things… immediate economic impact.”)
  • Discussion of Florida’s market: real estate experts say price increases will benefit homeowners but strain those trying to buy.

• Homeownership Advice:

  • Barry asserts buying remains a key to wealth: “It is very hard to create wealth without being in the real estate game. The average homeowner’s net worth is 44 times that of a renter.” ([41:49])
  • On interest rates, Barry says “it’s an excellent time” to refinance if it brings significant savings, even with rates uncertain ([47:02]).
  • Risky Loans Return?
    • Adjustable Rate Mortgages (ARMs) are back but not ‘07 style; Barry encourages their consideration, dismisses media panic ([49:21]):
      “She’s got it all wrong…Adjustables, the only reason they went out of favor is…we had an inverted yield curve.”
  • Affordability remains a problem, with median buyer age rising—Barry suggests only lower rates, rising incomes, or time can fix this ([42:54]).

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3. Is the AI Bubble About to Burst? Michael Burry’s Big Short 2.0

Main Segments: [66:40]–[82:49]

• Michael Burry vs. The Market:
  • Burry’s revealed short positions on Nvidia and Palantir spark debate; Palantir CEO reacts angrily.
  • Tom compares Nvidia’s current parabolic run to Cisco’s pre-dot-com crash ([79:21]–[81:42]).
    “Take a look at Nvidia. Could we be due for the correction in AI?… Cisco had this on the engine of routers.”
  • Panelists cite extreme P/E ratios (Palantir >400, Tesla, Amazon historically >1,000), echoing historic bubbles.
  • Some skepticism on Burry’s call: “I’m scared for Michael Burry…he’s on kind of a losing streak.” (Brandon, [74:04])

Notable Quotes

• Pat ([75:29]): “So Amazon during the 90s had like a 500 to 3,000 PE ratio…and Tesla in 2020 at 1,000. When people see that a company can be a monster, they’ll get way ahead.”
• Barry ([41:49]): “Home price appreciation is a magical elixir because what it does is it creates wealth, it creates equity…”
• Tom ([79:32]): “At that point in 1999, Cisco had 75% market share of routers…now take a look at Nvidia…look at Nvidia. Could we be due for the correction in AI?”

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4. Tariffs, US-China Tech War, and Fed Policy

Main Segments: [83:44]–[103:29], [45:53]–[56:01]

• Chips to China?

  • Trump blocks sale of Nvidia’s most advanced chips to China, balancing national security with business interests ([83:44]–[88:55]).
  • Panel supports the restriction: “This is a nuclear arms race. I don’t know why people don’t see it that way…literally the nuclear weapons of the day.” (Brandon, [88:55])

• Are Trump’s Tariffs Working?

  • Tariffs are now generating much more revenue ($223B YTD, up $142B), but still well behind income tax as a federal funding source ([92:39]–[96:00]).
  • Supreme Court challenge: Chamber of Commerce and others want to strike down executive tariff powers; panel is relieved by the current 6–3 conservative majority, worried about leverage if powers are removed ([98:17]–[103:29]).
  • Notable: Both the “strategic tool” and the main source of trade leverage.

• Interest Rates, Recession, and the Fed

  • Discussion on whether the Fed ought to cut rates, with panelists arguing current inflation data is overstated and labor market is weak ([54:21]–[56:01], Barry: “We have a very big concern in the labor market… They have to lower rates.”)
  • Critique of how inflation is calculated and the effect on monetary policy.

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5. California’s Prop 50: The End of GOP in CA?

Main Segments: [110:47]–[117:50]

• Prop 50 Passes:

  • Ballot measure lets California Dems redraw congressional lines, possibly netting 5 new seats and reducing GOP seats from 9 to 4.
  • Massive gerrymandering; the panel likens it to “game over” for GOP in California ([112:48] Tom: “F you. They obliterated all the northern farmers and the area around Sacramento.”)

• National Redistricting Chess Match:

  • Republicans have locked in Texas; Dems, California—implication: both parties playing for keeps in core states ([114:00]).

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Notable Quotes & Moments

• Pat ([18:54]): “If the Islam religion comes to you and they hire you as a consultant…what is the number one city on that list? New York City. Bo, we got victory. They just won and they took over that city.”
• Barry ([11:29]): “It’s not a unifying speech…a very divisive speech.”
• Tom ([12:10]): “This is authoritarian speech…a dog whistle back to the Mussolini days.”
• Brandon ([35:15]): “He’s really doing things…immediate economic impact on New York. The taxes are coming, things are happening.”
• Barry ([41:49]): “It is very hard to create wealth without being in the real estate game. The average homeowner’s net worth is 44 times that of a renter.”
• Pat ([75:29]): “So Amazon during the 90s had like a 500 to 3,000 PE ratio…and Tesla in 2020 at 1,000.”
• Brandon ([88:55]): “This is a nuclear arms race. I don’t know why people don’t see it that way…literally the nuclear weapons of the day.”
• Tom ([112:48]): “F you. They obliterated all the northern farmers and the area around Sacramento.”
• Barry ([105:48]): (On NYC rent freeze idea) “Who’s going to provide that type of housing and what quality of housing would it be?”

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Timestamps Cheat-Sheet for Important Segments

• NYC Election Recap & Reaction: [00:19]–[28:17], [91:03]–[108:46]
• Mamdani’s Victory Speech Analysis: [09:26]–[14:43]
• Wealth Exodus from NYC, Miami Realtor Reaction: [33:08]–[39:21]
• Real Estate Ownership & Advice: [41:49]–[44:36]
• Rates, Refinancing, and ARMs: [45:53]–[53:40]
• Burry, AI Bubble, P/E Ratio Mania: [66:40]–[82:49]
• Tariffs, Chips to China, Supreme Court Fight: [83:44]–[103:29]
• California Prop 50 & Redistricting: [110:47]–[117:50]

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Episode Tone & Energy

• High-energy, often polemical business and political analysis.
• Panel is unapologetically opinionated and outspoken, sometimes provocative.
• Mix of humor, insider business talk, political strategy, and market wonkery.

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Closing Remarks

Barry underscores the episode’s takeaway: economic consequences will follow political change (“there’s work to do, but I’m a bull…the future looks bright,” [127:52]), but warns of misread data and misguided policy. The episode signs off inviting listeners to the December business planning workshop.

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Want more depth? Refer to the timestamps above or jump into the transcript to catch particular moments discussed here.

Transcript

[Tom]

Did you ever think you were made.

[Barry]

Again.

[Pat]

Adam, what's your point? The future looks bright. My handshake is better than anything I ever saw. It's right here. You are a one of one.

[Tom]

My son's right about it.

[Pat]

I don't think I've ever said this before. All right, gang, lots going on. New York City got a new mayor yesterday. Congratulations to you guys. I know you're so excited about it. Those of you guys that voted for him and those of you that just didn't show up, you helped them become the mayor. And I'm happy for you because that's what you wanted. I like to celebrate other people's victories and it was a very weird day yesterday because a lot of lot of Democrats won yesterday. New Jersey, we got a list of them. Rob, we're going to go through on Virginia. The only guy that had a rough night yesterday was this our Somalian friend who said the future is bright, but it just today's future, it wasn't bright for him. He's the only guy that didn't. I think they're still counting the numbers, Rob, if I'm not mistaken with the Jacob Frey. But everything else was a great night for the Democrats. We got a lot of things to talk about. What does this really mean to New Yorkers when it comes down to homeownership? If you're sitting there wondering about buying a house, we got the four time Crystal Ball winner for real estate, Barry Habib in the house here. Barry, great to see you, buddy.

[Barry]

I have to tell you, I'm so, so happy to be here with you.

[Pat]

We're happy to have you as well. And what we want to know is the younger audience wants to know, should I buy a house? Should I wait? What's going on with the interest rates? I know you got a bunch of numbers to share with guys. There's a reason why you win not once, not twice, not three times, but four times. Because he historically keeps making better predictions than his peers does to the point where he is now a board member of, I think Fannie Mae. Fannie Mae, Fannie Mae. Okay, so let's go through some of these stories. Trump officials torpedoed Nvidia's push to export AI chips to China. Then you have risky loans from housing bust eras making a comeback. Is this a good thing or bad thing? According to Wall Street Journal, Miami Realtors pitch safe spaces for millionaires fleeing Mamdani's New York. Are Trump's tariffs making money? Watch this chart. This is from Politico. We'll talk about it. How the economy has defied doomsday predictions and tariffs. Brandon's got some thoughts on that. Businesses press Supreme Court to strike down Donald Trump's emergency tariff power says from Financial Times. What do you mean? Businesses are pushing Supreme Court to not allow the president to use tariffs. Can you imagine that? Supreme Court cannot stop all Trump tariffs. Deal with it. Officials say U.S. has only scratched the surface of its oil potential as emerging technology strengthens energy outlook. Federal Reserve's Lisa Cook signals December rate cuts is not a foregone conclusion. Powell kind of hinted that they're not going to do it, but she's saying there may be. The question becomes is it going to be another quarter? Could it be a half? We'll see what's going to happen there. We'll follow up on that.

[Tom]

When she being deposed, what's she commenting on?

[Pat]

More home purchases are falling through in an uncertain economy. Is now a good time to refinance your mortgage for a fraudulent rental application? Surge nationwide as housing cost remains elevated. If you're in the mode to have a decision, you're trying to make a decision of buying a house. Today is going to be a good podcast for you. Big Tech. Big Tech is spending more than ever on AI and it's still not enough. Professors catch dozens of students Guys, this is a phenomenal story. Please hear me out. When I'm reading this story too, I'm going to read it slow. Ready? Professors catch dozens of students using AI to write apology letters for using the same tools to cheat on class. Professor Johnson, I sincerely apologize for my misconduct. And you see that line that always chat GPT has. Wait a minute. Why is everybody using the same letter? MIT report 95% of generative AI pilots are at companies are failing. That's a Fortune magazine story. Michael Burry comes out of nowhere and pisses off Palantir CEO. Did you see his reaction by the way?

[Brandon]

He's freaking out.

[Pat]

Do you have that video? He is free. How dare you Michael Burry. Aren't you supposed to stick to water after big short? Didn't you say at the end of the movie big short, the next big investment I'm going to go after is water. Why are you coming after Nvidia? You guys have to see this guy's position and he publicly posted to everybody. Here's what he thinks going to happen to these companies Nvidia and Palantir. And the last time he did that he was right last time he did that. So after bubble warning with fewer safety nets robbed gen X is facing a retirement crisis. Top Advisor says Netflix hires investment bank to explore a bit for Warner Brothers Discovery Report. We talked about Disney last time. We give you an update from my perspective of what I think is going on with Disney. Maybe I'll send some of those numbers to Rob to show you guys. Spotify gains subscribers as app offering expands. And last but not least, YouTube TV denies Disney bid to restore ABC for Election Day. Let me read it to you one more time. YouTube TV denies bid to restore ABC for Election Day. So Disney comes to YouTube. Look, I know we're kind of like thinking about taking all our stuff off your app, but can you please restore ABC for election day? And YouTube says, Nope, we're not doing it. What? Yep, you're trying to screw us. We're not going to let you have it. Move on. That's. I mean, listen, it doesn't look like they're going to do a deal because if there was going to be a deal, YouTube probably would have said yes, but apparently nothing's going to be happening there, which is kind of what we talked about last week. And then, of course, we have to talk about yesterday, the election, all the stuff that happened. People are freaking out. We got some things. Couple clips to show you. Mamdani's victory speech. Everybody thought it was going to be a unifying speech. And then even Van Jones is like, whoa, I wasn't expecting this kind of a speech sound a little bit venomous. And Scott Jennings, like, where is your unifying wonderful guy? What happened? I keep track of. So you got to see this clip. Obviously, the CEO of cnn, Scott Jennings, did a great job saying what he's saying. Now let's go into one thing before we get into our stories. 2026 is around the corner. Craziness is going on for some of you guys that have big plans for 2026. I will remind you, whatever you do, do not go into 2026 without a business plan. It'll be a big mistake you're making. There are way too many moving parts. You know, every year when we do the business planning workshop, I openly talk about what threats and events we're concerned about happening the next year. We openly share with you. Here's what we're looking at. Here's what we're seeing as possible enemy, and here's what we're seeing as an operator, the opportunities that exist for us, and we openly share it with you. We share with you how we're growing our YouTube channel and our media company, what our consulting firm is going we're sharing our strategies with you. If you're somebody watching and saying, I'm sick and tired of playing small, I want to take my life and my business to the next level. The business planning workshop on December 12th is for you. But number two, if you're somebody that's running a business and you are already a millionaire, we have a lot of people that watch this content. You're doing 10 million a year, 100 million a year. Maybe you're doing, you know, billion a year. You got a couple thousand employees, but you've gotten to a point where you're bored and it's repetitive and it's just kind of like you're doing the same thing over and over and over again. This is a very, very good event to even wake you up as a leader of the company. So quietly, you can kind of get on the business planning workshop. It's not something that you have to be physically here from anywhere in the world. So if you haven't yet registered yet, click on a link below. Get registered. December 12th. Let's spend an entire day together. We go through a 200 page manual together, which everybody will get. Or you can go to bpw.betdavidconsulting.com Again, bpw.bitdavid consulting.com Looking forward to seeing you guys there on December 12th. With that being said, I say we start off with New York City, because the top of the line story, what happened yesterday, Rob, can we start off with the numbers? So yesterday, New York City, everybody's wondering, is Curtis Lewa going to be the reason why, you know, Cuomo doesn't win? And you look at the numbers, multiple charts. Mamdani, roughly. I mean, you're showing this, Rob, but there's another one to show for that's exact, because this is not the exact one. There's one that you look at where it shows you, you know, without him, if, if Mamdani was in the race, you know, if he was not in the race, what would have happened? Mamdani wins. Cuomo seconds. Lee was third. Cuomo gives a very nice speech. Hey, congratulations to Mamdani. Incredible job campaigning. One of the best campaigns ever put together the groundwork. He was very complimentary of what he had to say about him. Sliva was very angry. SLA did the Sliver thing. He went out there and said, if you guys do anything to the streets, we're going to mobilize, we're going to unify, we're going to mobilize. He gave that kind of a message but at the same time, while everyone was thinking Mamdani could be a unifier, this was a speech that he gave yesterday. This was his victory speech. And when you hear this victory speech, he sings a song. Not Frank Sinatra, not an English song, you know, born in the usa. Not any of that stuff. A very different song. But I want you to watch this. He still maintains a smile, but tell me if he sounds excited, unified, or angry. Go ahead, Rob.

[Tom]

If anyone can show a nation betrayed.

[Brandon]

By Donald Trump how to defeat him, it is the city that gave rise to him.

[Tom]

And if there is any way to terrify a despot, it is by dismantling.

[Brandon]

The very conditions that allowed him to accumulate power.

[Pat]

How many people are in that room? What does it sound like? This is not how we stop Trump. What do you think? It's how we stop the next one.

[Brandon]

Yeah, a couple thousand.

[Pat]

So, Donald Trump, since I know you're watching, I have four words for you. Turn the volume up. Can you. Can you put the clip, Rob, of what he said about Cuomo, where he said, this is the last time I will ever say the Cuomo name again. Listen to this one, folks.

[Brandon]

My friends, we have toppled a political dynasty.

[Tom]

I wish Andrew Cuomo only the best in private life. But let tonight be the final time I utter his name as we turn the page on a politics that abandons.

[Brandon]

The many and answers only to the few.

[Tom]

After all, if anyone can show a.

[Brandon]

Nation betrayed by Donald Trump how to defeat him, it is the city that.

[Tom]

Gave rise to him.

[Pat]

Yeah, you can pause it right there. All right, so what are your thoughts on what happened last summer, New York City? Barry?

[Barry]

Well, first of all, when you look at the numbers, pretty good chance that he would not have won if. Let's just say it was either Sliwa or Cuomo had backed out. So that's one. So I'm not so sure this is a mandate that New York City totally got behind and wanted his speech. I think it pretty much speaks for itself. You know, it's not a unifying speech. It's not something that. That is.

[Pat]

We're going to.

[Barry]

We're going to work together. This is a very divisive speech. And I. I don't think that that portends good things when you are. When you're being divisive.

[Pat]

Yeah. If you look at this here, Tom, this is the numbers. Mamdani, 50%. Million. 6,000 votes. Como. 831,000 votes. Sleeve of 143. If you combine the two together, puts it at 9.75ish. So would have lost by 30,000 votes. I don't know what the rest is, if there's a couple other things on the bottom. But some other charts said that there was a chance of Sleeva would have stepped out from Hamdani to win. Having said that, Tom, what do you think about what happened last night? How big of a victory is this? Because I got a lot of thoughts about this, which I'll share here in a minute. But what are you thinking, Tom?

[Tom]

Well, if I just look at the numbers, the numbers were tightening up over the last two weeks and they were tightening up because finally Andrew Cuomo was running a campaign that was sort of had been a little tone deaf and a little bit stale. I think as youth have felt the same way. We were calling for him to do it and he tightened it up and it was an 8. This was supposed to be a 14 to 16 point spread. It's an 8 point spread right now. So this tightened up significantly. So, number one, I agree with Barry, this is not a mandate. But number two, what really worries me, this is. Listen to his speech. This is authoritarian speech. This is. This is the kind of call and response. It's a dog whistle back to the kind of the Mussolini days and the kind of things that he promised to the people there. Now, he was a terrible, terrible despot. But listen to how he gained power and what he promised to the people. Free this and make the train join on time, very famous and all that. And you know what really was alarming to me, and there's a lot of these out there. Rob, I just sent it to you. Look at this, Pat, this is an intern. And this is confirmed. She is an intern. And this is current. So by all sources that we looked at, this is not AI and this is not something from time gone by, but look at this. This is all jihad. This is abada. This is all counted by Allah. How committed I am to this. What am I willing to sacrifice for the noble cause? What they're saying is she is saying this is the start of holy war in jihad in America. I'm not making that up. That's what she said in her language, her words. And so they see. Now listen to Mandami. He's not there to unify. He's not there to reach across the aisle. He is telling people exactly what they're doing. Dismantle, turn the page. Listen to the verb words. This is kind of. This is scary. This is the same wave that happened in Minneapolis outside of the view of so many Americans and What's happening there? This is heavy, Pat. This is not just about the mayor of New York City and how Cuomo should have started the campaign differently and sooner. This is that people in New York City were realizing it. It was tightening up, but it was too late, and now they got it. And you listen to what they're saying, that they're coming. They're saying, we're coming. We're not here to unify with you. We are coming. And there is a higher calling and a jihad. And what. We're coming to change you.

[Barry]

We're here to take it down.

[Tom]

Right? And they're. They're being very open. And again, from everything we've been able to find, Rob and I. Look, she is the intern. Those were her words. And that was last night.

[Pat]

She said that last night, Rob?

[Tom]

Yeah, I believe so. Yeah. Because this came out 15 hours ago.

[Pat]

Let me. Let me hear. Let me just hear what she says.

[Barry]

And the true believer knows that none of this is in vain, that this.

[Brandon]

Is all jihad, that this is all.

[Barry]

Ibadah, and this is all counted for by Allah. Subhanahu wa ta'.

[Tom]

Ala. And so the conversation of doxing.

[Barry]

The conversation of getting arrested and suspended.

[Tom]

I think it's time for Muslims to.

[Barry]

Start to say, all right, all right, so what? Do what you want. I'm going to do what I got to do, because that's. It's about time to do that. And I know everybody has their own families and has an education and everything. Just a question. We don't want to get doxed, and we don't want to get suspended, and we don't want to get arrested.

[Pat]

Pause that. I have so much to say, Brandon. I'll come to you and I'll give the thoughts, and then we'll move on.

[Barry]

Go ahead.

[Brandon]

I mean, like, what do we expect? I mean, I'm honestly wondering if the powers that be put Cuomo in place just to put a candidate they knew was going to lose, because he's. I mean, if you want to think of a guy who's universally hated in New York by both Democrats and Republicans, like, who better than Cuomo? It's like when they got Woodrow Wilson elected. They got. Was. They put, like, three candidates in the race just so that he would win. He won with, like, 30% of the margin. So I wonder if this is an intentional attempt to destroy the city, because. Yeah, now they officially let a wolf in the hen house, where, you know, this city. As much hate as. We give New York a lot of time for the things that they we disagree with it is the, like the pillar of America. It's the biggest GDP. It's 5% of the US GDP. It's the biggest city in the country by a lot. It's like $2 trillion in GDP. The next biggest is a trillion. I mean, they already lost a trillion dollars of wealth from 2020 to 2023. So this is going to drive job creators out and bring in the worst types of people. So, yeah, it's going to look like Gotham City. And I hope that they could survive long enough for people to learn how to actually who to vote for, what kind of policies they should have.

[Barry]

You know, to your point, I agree with you. And to your point, there's a lot of people that would never vote for Cuomo because of what happened during COVID and they lost people. There's a lot of women that are going to resent Cuomo because of allegations and situations where he was disrespectful, to say the least. So he had a lot of the decks stacked against him from voters that he would normally need. So I agree with you. Why, why run somebody like that who doesn't really, you know, doesn't really have support that's needed to win this thing?

[Pat]

Yeah, you know what I would say? Here's what I would say. And I want to watch a couple of these clips. Van Jones. And remember, guys, Wednesdays is all business. So how does this relate to you, business wise? Because here's how I look at it from the business standpoint. On Wednesdays, let's talk strategy. If Christians in the world were in the business of going and converting everybody else and they started targeting, like Muslims may be targeting the Western ideology. What if we targeted their ideology? What city would you go after? What's the number one city? When you think about Muslims, what is the number one city in the world? Think about the number one city in the world for Muslims. Where is it? Tell me the city. What do you think? I'm asking, is it Mecca? Is it? What would you say is the number one city? Would you say pick it? Is it Mecca? Is it Saudi? Is it Tehran? Is it? Where do you go to whatever that city is? Imagine if you go and you take that city over and the leader of that city is officially a Christian, what's the likelihood of this happening? What's the likelihood of a Christian capitalist taking over Mecca? What is it? You know what the likelihood is? Zero.

[Tom]

Right?

[Pat]

So check this out. Flip it. If the Islam religion comes to you and they hire you as a consultant, you are the consulting firm, you.inc. right. You're incorporated. We are hiring you. We want to impose our ideology on Western cities. What is the number one city for us to go to to be able to share this ideology with? What do you think is the number one city on that list?

[Barry]

New York.

[Tom]

New York.

[Pat]

New York City. Bo, we got victory. They just won and they took over that city. Congratulations to you. Do you know, if you're a Muslim, how massive of a victory this is for them? It's massive. Here's a question. Do Americans, who the founding fathers built the greatest country in the world ever that did in 249 years what a couple countries couldn't do in thousands of years? Will they protect it? Or will they be walking on eggshells and saying, it's not a big deal? No one's going to be leaving New York City. Here's the reality. To all the people that are saying no one's leaving New York City, to all the people that saw that, what is it? Unusual whales or whatever that account is that says, yeah, 756,000 New Yorkers will definitely, key word, Are definitely moving out of New York City. If Mamdani WINS, this is 9% of New York City residents saying they definitely would move out of New York City. If he WINS, an additional 2.12 New Yorkers, million New Yorkers said he would consider leaving should he take office. Here's the reality of it. Let's flip it. Forget about who's moving out of New York City. Here's my question for you. Who's moving to New York City? You ready? Let's talk about who. It's a good climate for now. There's a video clip of him saying, why are we putting people in jail? He wants to release them. If you're a criminal, hello, I'm moving to New York City. Number two, if you're an illegal immigrant, are you kidding me? I'm moving to New York City. What if you're a Muslim? I got Dearborn. I got a Muslim mayor in the biggest number one city in America. I'm moving to New York City. So guess what? To all the people that said nobody will leave New York City, it's about who's coming to New York City. You're welcome. And they're going to come in a bunches. You know how I know this? I would ask, why did Armenians move to Glendale? Why do Assyrians go to Torlok? Why do Assyrians go to Chicago? Why do Persians go to Beverly Hills? Because the first Armenian influencer moved To Glendale. Then their families moved. Then everybody else moved. Then the world moved to Glendale because the first Assyrian influencer moved to Torlock. Everybody else moved to Detroit. Everybody else moved because the first Persian Middle Eastern moved to Beverly Hills. Everybody else moved. What do you think is going to happen right now to New York City? You voted for this, folks. You voted for this, and you are welcome. And your population is about to increase. Everybody else saying it's going to decrease. I think it's going to go up. My opinion, I hope I'm wrong. I'm a minority owner of the Yankees. Trust me, I hope I'm wrong. But for the people that are like, how dare you say such a thing like this? And you're, shame on you. You should not be an owner of this. No, no. If I lived in New York City, I would be more vocal than sitting on the sidelines saying this will never happen and not going out there rallying other people to vote. You got what? I was vocal in 2024 because I knew I didn't want Kamala. I was vocal in 2020. I risked it. Even though I hadn't sold, I was vocal in 2016. We risked it. You know what it was like to talk pro Trump in 2016. Everybody was walking on eggshells doing that. Everybody was walking on eggshells in 2020, and then nobody else was walking on eggshells in 2024. So my concern, him and I were talking earlier saying, don't you think this is what America needs? Don't you think we almost need this case study to be able to show that work, what works and what doesn't work? And I said, look, I get it. I went on Jubilee and I said, I hope Mamdani wins. For us to come back and do this four years later so you can see exactly what the stats are. But here's what I will tell you. Do you think if you want your kids to know how bad drugs are, would you say, why don't you try a little bit of fentanyl, see how bad it is? Would you do that? Would you say, why don't you try a little bit of cocaine? You know what the only place is? I had a friend of mine who was so addicted to drugs, it got to a point that he was trying everything. Guess what we could do at that time? Nothing. I took him to rehab. I took him to all these other things that we would. I took him to Bible study in Pasadena. Every Friday night. I would pick him up, take him. So he's in the car with Me and I would see him go in his car and. And his black car and he would take the pills and he would take him. I would take the pill out of my. His hand. He's fighting me and another guy at the back of Shaky's Shakers in Glendo saying give it back to him. Not giving back to you. Done. Couple months later he dies. Young age. 27 years old, he passes away. Till today, I think about it, this guy was a phenomenal. He's a fun guy to be around. I liked him a lot. There are certain things in America you shouldn't flirt with. This is one of them. Don't ever second guess why America became the greatest country in the world. I'm an immigrant. I wasn't born here. I was born in Iran and then I went to Germany. Then I came here. There's no place like America. Nothing. I'm grateful to be here and I'm going to do my part. I don't need to do this. I don't need another sponsor to pay my bills. I live a very good life. The only reason we're doing this and being this vocal is because I know they're not going to slow down. I know they're not. And I know America's worth it. I know the right policies are worth it. I know what we have right now as the greatest country in the world. We have to do our part. But if you think this is it, this isn't it. By the way, here's Van Jones watches a speech of Mamdani and then Van Jones reacts this way. Here's what Van Jones had to say. Is this Van? Yeah, this is Van Jones. Watch this one here. Go ahead.

[Barry]

Scott.

[Tom]

Oh, are you saying he didn't.

[Brandon]

He wasn't the unifying voice of a generation that you predicted mere moments ago?

[Pat]

He doesn't know what to say.

[Brandon]

Where was the.

[Tom]

The man that you predicted would not.

[Brandon]

Slice and dice the. Look, guys. He started his speech by quoting Eugene Debs, who ran for President of the.

[Pat]

United States five times as the Socialist.

[Brandon]

Party of America candidate. He repeatedly attacked people in this. I know my socialist. I keep a close eye on.

[Tom]

So.

[Pat]

So here's the thing.

[Brandon]

He went after everybody that he thinks is a problem. People who own things, people who have businesses. He said an interesting quote.

[Tom]

No problem too large for government to solve or too small important.

[Brandon]

And so when you think of the.

[Pat]

World that way, that every problem, no.

[Barry]

Matter how small or how large, is.

[Brandon]

Something for government to do. Let me just decipher this for you. Tax increases as far as the eye can see. Which means the people who need to provide jobs to the young people that you say need jobs are going to flee as quickly as they possibly can. I think this was a divisive speech and he clearly sees the world in terms of the people who are oppressing you and the oppressed. And he said the oppressed are now in city hall.

[Pat]

Okay, go ahead.

[Brandon]

Yeah, so to play devil's advocate to what you were saying, I think that potentially sometimes with the drug acts, people who are addicted to drugs, the biggest life changing experience could be when a near death experience with an overdose. And I think that this is going to be an overdose moment. And I think even you said the other day that you think that Republicans going to win the mayor or the governor.

[Pat]

Yeah, and the Republicans said that first with Stefanik. So yes, we talked about it and.

[Brandon]

I do think that that could happen because it was only a five point victory last time when Lee Zeldin ran against Kathy Hochul. So I do think that that could be the best case SC scenarios.

[Pat]

Let me ask you a question. Let me ask you a question. Yeah, sincerely. Would you rather have a Republican of New York City or Republican of the state?

[Brandon]

So governor or mayor?

[Pat]

Would you rather have governor or mayor?

[Brandon]

Well, people in New York say that the mayor has much more influence over the city. But I think the governor couldn't have more power over the city than the mayor if it got to like a power.

[Pat]

I agree. But if we were to go right now, the last 40 years and ask you to list out the mayors the last 40 years, are you more likely to be able to name the last 40 year mayors or governors? Mayors. So to me there are certain states you want governor. Florida you want governor. Texas, you want governor. Okay, there's a lot of states you want. But there's only one state where you want the city and that's New York City. Trust me, I'm giving Muslims a. This is the greatest victory they've had. This is a massive victory. I would be celebrating off the top of my lungs. If I'm a Muslim and I'm an Islamist celebrating off the top of my lungs. What they just got. I'm celebrating. If I'm a socialist, I'm so I took down the city that was built on capitalism with socialism. These idiots voted for us. That's what I would be saying privately. We got these idiots. They don't understand. New York City was built on capitalists and we took it away from them. These guys have such a short memory, don't worry. They will not be grateful for the people that built the buildings. They will not be grateful for the people that build the bridges. We're going to come in and tell them rich people are bad and they're going to side with us. Trust me, I'm going to be able to do that. And he did. This is a, this is such a massive, monumental victory. Why am I, why am I saying this? This is too much. Hey, man, you better wake the hell up. Only the paranoid survives.

[Tom]

You know, it's basically, use their freedoms in our advantage, use their open elections to our advantage and make yourself a victim and line up with these guys over here. That's our path to victory. That's how it worked. By the way, I'm quoting the Omar playbook. They have said these things. This is not my speculations. This is what they've said. We will use their open elections against them. We will use their freedoms to walk in and then we call out the oppressed and the dog whistle is heard by the Democrats that will support us. And now they're turning around and looking at it. You better be careful what you're looking at because there's a lot of things that you believe in that if they want to invoke the tenets of their laws and their systems, don't play well with a lot of Democrat positions at all. And what you don't realize is the puppy grows up and it becomes a Rottweiler and it forgets that you raised it because that's the way it's bred.

[Barry]

Yeah. I'd like to get your thoughts to see from a business perspective. I know we saw there was significant amount of people who either said they'll definitely leave or consider leaving. So people say things, they don't always follow through. What do you think realistically would be the fallout? And then how does that affect the states that they go to? How does that affect the economy? If they're the upper income earners, generators, job providers, do they move their businesses, that they move themselves? What do you think the real percentages of people that actually leave?

[Pat]

Well, you know, to me, it's no different than people, people who said, if Trump gets elected, I'm leaving the country. What percentage of people actually did that? That's what I'm saying.

[Tom]

Honestly, that's what Hollywood, like, four people.

[Pat]

What I'm trying to say is it's a small percentage. So when they say 756,000 is going to leave, definitely leave, what do you think is actually going to leave?

[Barry]

That's what I'm saying maybe what, 5,000 people?

[Pat]

Maybe. What do you think that you think the number is? 5,000 people?

[Tom]

No, no, it's. It's like Hollywood. They're. They're in Santa Monica having their lattes, quietly talking to each other that they enjoy the tax break.

[Pat]

What do you think the number is of the 750? Yeah.

[Tom]

I'll go with 10%. Do I think 75,000 people? Okay, so I do.

[Pat]

But here's a question.

[Tom]

I look at. I look at realtor stats down here in south Florida. I look at the license plates. I look at what's happening. Although we're in season right now, it's hard to measure the Canadian, the new New York and the Pennsylvania plates that are informal polling measure of South Florida.

[Barry]

Correct.

[Tom]

But I believe there's 75 to 100 coming down. There's a lot of realtors that will support the fact that they're not that number. But there's a wave.

[Brandon]

Remember the move from 2020, 2023 though. A trillion dollars of wealth left New York just because of that in California. Yeah. So if it gets. I send Rob those charts if you want to show them. But if it gets worse than that, then it could be very.

[Barry]

What's really going to be critical is are they the job creators and job providers? Because if they move their businesses down here and now, you know, you could. It's different than. Than things were previous to Covid, where work from anywhere was not as easy to be accomplished or is not as popular or accepted. With that being much more accepted, you can shift your business down here and. And that's a big deal. Let's face it. Florida is going to have a lot more attractive tax situations. Texas a lot more attractive tax situations. There's many states that can be more attractive than New York. From a cost perspective, maybe this is the excuse you were waiting for to move your business to move your residence out.

[Tom]

You make a really good point. We don't need people just to come drop 15 on a new place in Manala plan and then have your advisor now on Worth Avenue.

[Barry]

Yes.

[Tom]

That's what we need. We need people that are going to come down here and say, wow, what a great place. Let me build down here and let me bring. And let me create the jobs down here.

[Pat]

Yeah, yeah. Listen, the reality of it is it's already happened. He's in. We're going to see what's going to happen next. The story comes up Financial Times. Miami realtors pitch safe spaces for millionaires fleeing Momdani's new York. I'm coming to you with this one. Bob's Barry so if you want to pull up this video. Rob, I think you got a video on this one here. Let me go to this one. I'll read it and then we can turn over to the video. So a few days before mayoral election, luxury real estate developers Isaac Toledano joked that a lot of Floridians are going to give Mamdani an award for being the best broker of the year. Toledano is one of several Miami based developers hoping to cash in on what they anticipate will be an influx of high net worth New Yorkers escaping to the Sunshine State if Democratic socialist Mamdani wins the city's mayoral race this week. Fears that Mamdani's left wing policies will drive the wealthy. Rob, you have a video on this one. Will leave fear that Mandani's upcoming some of the wealthy New Yorkers have circulated since the 34 year politician unexpectedly clinched the Democratic primary. Billionaire hedge fund manager Bill Ackman who has poured cash into opposing Madani's campaign predicted an exodus of companies and individuals to New York. Go ahead Rob.

[Tom]

All new at 6. Some here in South Florida have their.

[Pat]

Eyes on the race for mayor in New York City.

[Tom]

That was an interesting point.

[Barry]

South Florida Realtors say they've been contacted.

[Pat]

By New Yorkers already looking to move to the Sunshine State if self described Democratic socialist Zoran Mondami is elected mayor of New York City. CBS News Miami's Bree Buckley looks into it.

[Tom]

A lot of people are worried. Isaac Toledano is the CEO and founder.

[Brandon]

Of BH Group Miami, a high end.

[Tom]

Real estate development firm. He says the race for mayor in New York City could impact South Florida.

[Pat]

We already see a lot of New York buyers and their brokers and agents and representatives already looking to buy real estate and getting information.

[Barry]

His clients say they're worried if self.

[Tom]

Described Democratic socialist Zahran Mamdani is elected mayor that crime will rise as well as taxes. He campaigned to lower the cost of living for the working class, proposing a rent freeze and free bus service partially funded by raising taxes 2% for top earners.

[Pat]

Mamdani has been leading the polls against the stop because it's official now. So what do you think? You think it's going to be a big net positive for South Florida and Florida in real estate?

[Barry]

I think it will have an influence because of the two things that they were mentioned there. One is obviously taxes do have an impact. We know that right in Florida is zero state income tax and then when you look at the crime, you talked about it earlier, if crime rises and if there's extraordinarily lenient laws towards criminals and you invite more criminals in because of that incentive, there's only so much that people could take because you worry about your safety. I think that that could be those two items could be big influencers. And if you have people move down here right now, we have a bit more supply in Florida. So I don't think it would have a big influence on prices immediately. I think it would just stabilize things, maybe some modest gains. But if, if the trend continued, it could push prices higher here. There's also a lot of development, too. So we have to weigh the two against each other.

[Pat]

Tom, what do you think so?

[Tom]

Well, I think there's two things. There's the emotional response on the surveys you see now, and then there's the. The reality of it. And the reality of it is that what he's doing is going to have an immediate economic impact on New York. The taxes are coming, things are happening. He's really doing things. So it's not just the guy got elected that I don't like. Okay. And he's stalemated because the city council's over here and these guys are over here. And then, you know, they get stalemated just like a president gets stuck. So nothing really changes in your life yet. But what he's talking about is about to change. And I think when people see what's coming to New York and people see the tax rates and they feel the change and they see the businesses that did move out, remember, elections swing on four points in the middle. And right now there's a swing that's going to happen and people are going to feel it. So I think they're going to be going now. Are they going to be. Is it going to be like we saw from. And remember, we've seen this story. We saw it in the stats from U Haul. U Haul that was paying college students, I think it was $2,000 for two college students to drive a U Haul from Dallas back to. To California during spring break. They were saying, hey, spring break job from U Haul because they had too many trucks that had come to Texas. And so when you start seeing that, I think it's going to be very, very real. But I think he's going to start doing things on day one. He can't wait. And that along with that's was left. That's why I think you're going to see that first wave come and they're going to. They're going to come down here. But back to Barry's point, a very good point. I want them. Come down here with your roofing business. Come down here with your heating, air conditioning business. We have a shortage. Come down here with your home services businesses. We have shortages. Come down here with your. Your window retrofit businesses. We have shortages of people available to do those jobs and find affordable housing outside the city areas for your. For your people. That's. That's what I want. But I think they're going to move. I think. I think it's going to move because he's really going to do stuff.

[Barry]

I think the safety issue. The safety issue is a big one. That's a big one.

[Pat]

Here's a clip of him talking about letting out prisoners. Go ahead, Rob.

[Brandon]

Oftentimes, we've even found as legislators, when.

[Pat]

We go into these courts, the term.

[Brandon]

Violent crime is even used when people are stealing packages. Violent crime is even used when people.

[Pat]

Are accused of burglary.

[Brandon]

And there happens to be a housing unit in that same dwelling. So violence is an artificial construction. And we have to be very clear that what is happening here with these district attorneys, that is violence.

[Tom]

So the guy. So the guy that broke into your house, a home invasion to rob you, that's artificial?

[Barry]

Yeah, that's why, I mean, the safety issue, I think that's what really speaks to people that would drive them to. Money is important, but your safety, that can be a very visceral response that. We gotta get out of here.

[Pat]

Yeah. I mean, look at. With COVID What was the reason. Covid. We had such a reaction to it.

[Tom]

It.

[Pat]

You stay home and don't take your kids to school. Excuse me, I'm out of here. Right, so was it that. Was it the vaccine? Was it the force? Probably a lot of it was combined, but one of it was, you know, your kids can't go to school. Let me go to a place where my kids can't go to school. I'm gonna go to Florida. I'll go to a different place.

[Barry]

And by the way, the number of votes that Cuomo got, I'm not saying that people are going to the polls saying, oh, Cuomo. Yeah, I think it was, hold my nose. And it's not a vote for Cuomo, It's a vote that I can't. I can't risk having one day.

[Brandon]

Yeah, yeah, Brandon, this is gonna be bad for Florida. I mean, there's only220,000 open homes for sale right now. And then there's 385000 millionaires in New York like right now. It's insane. Like look at a million dollar house down the street from here or any like any average looking house, it's like a million dollars and then for 500, 000 you get a concrete box. So no, I think this, like between cutting rates and this, it's going to be a bad situation in Florida. Florida for real estate?

[Pat]

Yeah. So you think cutting rates. So what you're saying is, yeah, the market's going to go up, valuation is going to go up.

[Brandon]

How could it not? I mean it's like every single time we cut rates, price of houses and asset prices go up. I mean it's like a law of nature.

[Pat]

Okay, so how do you feel about that? What do you think? What would he say?

[Barry]

I see it differently. I think that across the United States you have about 67% of people own homes. So prices going up is a good thing. And of the remaining 33%, at least half of those are not in a position where they're going to be truly in the even the market to buy a home. The 16 year old working at Wendy's, God bless them, but they're not truly in the market to purchase a home. And there's many people that would not be in that position. So how much does home price increases impact those adversely? I think it's, you know, look, it's a zero sum game. Some people it benefits, some people it doesn't, but I think it benefits many more people, it benefits the economy. Look, home price appreciation is a magical elixir because what it does is it creates wealth, it creates equity. In fact, there's a chart that you could see that I brought with me that shows that if you took a look at net worth and what it takes to be in the net worth category, it's probably near the end there, Rob. And you'll see for net worth there's a couple of things I'd love to show the last slide, Rob. If you pull that up, you can see what it takes to be in the top tier. In the United states you need one top 1% as big number 11.6 million. And you can see the tiers, but the real key factor is 2/3 of all net worth come from home equity. It is very hard to create wealth without being in the real estate game. And the average homeowner's net worth is 44 times that of a renter. Now let me tell you, as somebody who's lived through downturns in real estate. I know people wish for it and people say, oh, we need prices to come down. That is a very, very difficult scenario to go through because from a mortgage side you can't get a mortgage easily because the appraisers put something called the negative time adjustment. So you say, okay, I could do it with 5% down or 10% down. But the appraiser says this property is going to decline because home prices are coming down. So you need to put 15%, 18%, 20% down because we're anticipating the price to decline. Makes it very, very difficult. Lenders tighten up, the whole market seizes and then people don't want to buy a home if they see prices coming down. They're afraid. It's just like the stock market. People buy more stocks as it's going up. People should be buying when it comes down. They don't. Right. It's the only things that when they go on sale, people don't want them is real estate and stocks.

[Tom]

Right.

[Barry]

So what happens is that psychology, it materializes through the economy in general and it slows the economy dramatically. And then think about home equity. Home equity is something that is also magical. You could pull on it, you could pay off your debt burden. You can invest with that money when you sell your home, it could be your retirement plan. So look, while I completely get what you're saying and you're 100% right, we don't want runaway appreciation. But I think to see prices come down we want would probably be worse than that.

[Brandon]

But we're not in a sustainable place right now where it's like, you know, we talk about all the time. In the seventies it was two and a half years of an average salary to buy an average priced house. Today it's like eight or nine years of an average salary to buy an average priced house. And I see what you're saying about the 65% that own houses in the country, but I think you're overlooking like the core part of the economy, people ages maybe like 20 to 40 who are looking to buy a house. Who? I mean it's a stretch to buy an average priced house right now for a lot of those people. So are we, is that a healthy place to be in where the core of your economy, like the young to mid age people can't afford to buy a house.

[Barry]

It's clearly a problem because what has happened. So you're right there, that is, it's clearly a problem because it used to be the median age of a first time home buyer. Was between 32 and 33 years old. Today that's gone to 40. However, there's only three levers you could pull for affordability. Right? This is not a magic formula. Prices come down, which I just explained why that's not good. The second is interest rates come down. And remember, we have had quite the shock going from very low rates at around three up to eight. Now back in this, let's call it six and a half ish range, six and a quarter. So there's been quite the shock there along with prices rising. The third is time. And the reason why time is because incomes do rise over time. You don't need all of your income.

[Brandon]

At the same pace though.

[Barry]

You don't need it at the same pace because you don't use 100% of your income. You can't do the simple mathematical equation and say, okay, so incomes are rising at 4.6% or 4.7%. We just got these numbers this morning from ADP. And home prices are rising at the same level. So you're not gaining ground. You are gaining ground because you only use a third of your income. So that additional disposable income actually helps you gain traction. The math is in a one for one, if you get, for example, 2% rise in income, you can withstand a 4% price rise and still be neutral because of the relative difference.

[Brandon]

And you don't usually like the time decay of the mortgage where you're paying less.

[Barry]

No, no, it's just that you don't. When you, when you figure out your allocation of your income, you're only using, let's call 30% of your income to purchase a home on your mortgage or home payment. So you don't need, you get 5% gain on overall income. That's more than what you need for the increase in home value.

[Brandon]

Yeah, but I mean, how do you apply that to back in the day though, where like I said, it's two and a half times your income versus eight times your income. Okay, you don't get as much house.

[Barry]

As you used to, but you always have to be careful when dealing with medians. Medians is a very dangerous game to play because once again, if you look at median income of everyone, that's one thing. But if you say of those who are actually able to buy a home, let's exclude the 16 year olds, let's exclude the 19 year olds, then the median income becomes much greater. When you say those who are actually qualified, I'm completely in agreement that affordability has gotten worse. What I'M saying is there's a lot of click bait out there that make the picture look a lot worse than it truly is.

[Pat]

All right, so let me, let me go maybe to this question here that we got from Yahoo. Personal Finance. Is now a good time to refinance your mortgage, Right. With everything that's going on with interest rates, you're hearing Lisa, who is coming out saying Lisa Cook signals that rate cut is not a foregone conclusion, whether they're going to do it or not. ROB, I think you got this clip as well to play by Lisa, but in regards to refinancing your mortgage today, I'm gonna read this story to you and then I'm gonna come. So come to this is from Yahoo. Personal Finance. Is this a video, ROB?

[Tom]

Yes.

[Pat]

Okay, Play this clip. Then I'll read the story. Then I'll go to Barry.

[Tom]

Go ahead. All right, we got some breaking news from Washington. Fed Governor Lisa Cook, who is speaking in D.C. steve Leishman has those headlines. Steve. Thanks, Brian. The outlook for Fed policy continues to be somewhat confusing, with Fed officials offering different forecasts from each other and even some officials taking both sides of the argument. Lisa Cook, speaking in Washington, said she supported the decision to cut rates last week, but says downside risks to employment are greater than upside risks to inflation. However, she says the current restrictive policy is appropriate given inflation above the 2% target.

[Barry]

Every meeting she says, including a December.

[Pat]

Meeting, is a live meeting.

[Tom]

Meanwhile, San Francisco Fed President Mary Daly said the Fed needs to bring down both inflation and support the job market. We need to continue to put downward pressure on inflation and keep our policy modestly restrictive, but not hold the reins so tight that we injure the labor market unnecessarily and give people lower inflation but fewer jobs.

[Pat]

Okay, so is this I thought it was going to be just going straight to the clip. Is this a good time for me to refinance my mortgage today?

[Barry]

Yeah, it's an excellent time, if it makes sense from a rate perspective. For the last three years, two things have happened. People have taken out mortgages at higher rates, but also approximately 59% of them, when they purchased a home, they use something called mortgage insurance because they put less than 20% down. Now, thankfully, we've had home price appreciation. One of the great things about it is now you could refinance your home to a lower rate. You could save the delta and rate, and then you could either reduce or remove the mortgage insurance, which means that you can actually save hundreds of dollars. Most people don't look at the mortgage insurance savings that they can get also in conjunction with rate. So yeah, I think it makes an enormous benefit if you could save 3, 4, $500 a month to refinance now. It's real money. And for those people who say, well, maybe I'll wait because rates will come down now, I do think rates come down as well. Okay. Nobody knows for sure, but I think there's reason to believe we will see lower rates on mortgages. But if you wait to get that extra 30 or $40 a month, it means you're losing the 3, 4, $500 a month savings you could be taking advantage of now.

[Tom]

Got it.

[Pat]

Okay, so and then the other question I'm going to come to you is this one risky loan from housing bust era is making a comeback. Okay, if you rob, is this a clip that goes into it? What's this clip about? Rob, if we.

[Tom]

This is another Yahoo Finance clip.

[Pat]

Is it immediately getting into it? Okay, go ahead and play this clip. Yeah, this is good.

[Tom]

Well, adjustable rate mortgages, which fell out of favor in the aftermath of the financial crisis, are catching on again. Here with the story is senior housing reporter Claire Boston. So, Claire, to start here, what exactly is an adjustable rate mortgage?

[Brandon]

Hi, Ali.

[Pat]

So as the name suggests, an adjustable.

[Tom]

Rate mortgage, the interest rate can change over time.

[Pat]

Typically these days you get either a.

[Brandon]

5, 7 or 10 year period where.

[Tom]

You have a fixed rate on your.

[Brandon]

Mortgage and then after that period expires, if you're still holding that mortgage, the.

[Pat]

Rate will start to adjust based on.

[Tom]

The prevailing market rate.

[Brandon]

So that means it could go higher, it could go lower.

[Tom]

In exchange for taking on that extra.

[Brandon]

Interest rate risk, you can often get.

[Tom]

A lower rate than what is available.

[Pat]

With a 30 year fixed.

[Brandon]

Right now, 30 year fixed rates are 6.3, 6.4%. Adjustable rate mortgages will be around 5.8% for that 7 or 10 year period. So there's savings there if you're willing.

[Tom]

To kind of stomach that risk.

[Pat]

Okay, so if you want to pause it right there now, this is not the, this is not no income, no assets.

[Barry]

No, she's got it.

[Pat]

All right, okay, tell us.

[Barry]

She's got it all wrong. So she's thinking about negative a.m. like you said, those are the risky types of loans. And then the risky underwriting guidelines are exactly what you said. We're not verifying income asset down payment. So she's got it wrong. Adjustables, the only reason they went out of favor is because we had an inverted yield curve. The Fed raised rates so much that now you have an inverted yield curve where shorter term rates were above long term rates. Now that the Fed's been cutting, longer term rates have come down, but now you have a spread between them. So the reason why we've seen a doubling in the amount of applications on adjustable rate mortgages is because they make sense. As she said, you do have a savings right now, half a percent, five eighths of a percent for seven years, a seven year fixed period. That amount of savings, if you consider that it's significant, for example, pat on a $500,000 mortgage, you'd save about 18,000 bucks, 17,000 bucks in the first seven years guaranteed. But what nobody looks at is this is something that people should look into is a lower interest rate mortgage like an adjustable would have compared to a fixed. It amortizes more rapidly in the first few years. So you pick up another $5,000 in equity amortization. So now you've got a significant sum of money, let's call it $22,000 guaranteed in the first seven years. What happens after that is what people worry about. And everybody looks at worst case scenario. But that's like, that's betting against something that is very, very improbable. Could it happen? It could. However, what's more probable is that you look at let's say a 40 year history and let's say that rate goes to somewhere around 7%. 6.96% is the 40 year history of where a fully indexed meaning what it would adjust to rate goes to in that particular case, you would never eat into the savings of the first seven years. So I believe it's a very good option to look at and it shouldn't be something that is vilified like she say, oh, risky mortgages. If you could stomach it. This is something that really can make sense and get somebody into that home help that affordability issue, because that's the key. Get there so you can create some of that wealth.

[Pat]

Tom, where are you at with this?

[Tom]

Well, I, I'm a Barry right now and it's actually a little bit wider. So I'm glad he was a little conservative in his five eighths of a point. It's actually three quarters of a point to a point right now. Five and one. What that means is you have one interest rate for five years and one time at the end of the fifth year, you have to now reconcile and your bank will send you a notice and you change your interest once. Not negative amortization, not any of the negatives that go with it or Seven and one. You have seven years and one time it adjusts. Those are adjustable rates. Really. I've always felt that, you know, you, you need to make clear. But they're looking for clickbait, they're looking for views, they're looking for their news. Oh, the arm is back. The terrible arm is back. No, it's not. And right now we are looking at a 70% chance and bye bye. You know, Lisa Cook, when she took time away from defending herself for having three primary residences, you know, in a little action that she's got with the federal government, is sitting there talking about this. The dot plot right now, which is one of the measurements of the intent of the Fed, has us at a quarter point for December. And there's the CME Fed watch tool this morning was all the way up to 70% chance, up from 61% chance one week ago at the time that the Fed spoke. And so it looks like we're going to get another quarter point. So right now, Pat, people could be looking at the opportunity to get a 5.0%, 5 year ARM, 1 time adjustment mortgage that makes getting into a house much easier. And if you have the discipline to say, hey, I would have been paying about another 700 more, I'm going to save that. Now you're saving.

[Barry]

Or apply it towards principal. Or apply towards principal or, or make.

[Tom]

The payment anyway, you can do that. Hey, set it up for my payment and take another 500, apply it to principal. This is how people can now look at homeownership. Not just through what can I barely afford and get into, but a sensible thing. Now, I agree about pricing and one of the things on pricing is supply. And we need regulation to come down so that builders can build more because the supply was also what will bring prices down.

[Barry]

So a couple of things, Lisa Cook, she, she pretty much echoed Chairman Powell's thoughts on the. It's not a foregone conclusion. Monetary policy is not preset. So we understand she's just echoing that. But what she also said was that the job market is solid, which I don't know how in the world she could possibly say that. We got the ADP numbers today and the ADP numbers, if you look at it for this month, it was pretty dismal at 42,000 job creations. However, if you look at the last three months in aggregate and you say, what have we constructed in aggregate? Because the last two months were negative.

[Tom]

Numbers, there's a grand revise yet again.

[Barry]

Yes, a grand total of 10,000 jobs in three months. In the United States that were created. That is not a healthy or solid economy. People that are on unemployment benefit. We got a bunch of charts if you just want to roll through them just real quick, just to one second on each. So if you go to the. Yeah, go to the. Go to the second one there, right there. Okay. These are job openings. You could see where the charts headed on job openings. Then you take a look at the next.

[Pat]

What do you mean by that? Jobs.

[Barry]

This is job openings and job openings.

[Pat]

So people are getting jobs, they're getting hired.

[Barry]

Ads for jobs. Okay. Now another thing, Pat, that people don't realize is that the way that this report is constructed is. It's not. The US Government does it in one shot across the board. They go to each state and they say, how many job openings do you have? The reason that's important is because before work, from anywhere, if you put an ad in, it'd be a local ad. But now I could put six different states where I want an employee. So this is a grossly overstated number. And even while it's overstated at the 7.2 million, it is. Look at the trajectory. Pretty clear. Next chart shows you. Once you get let go, look at what's happening, it is harder to find a job. So people are staying on unemployment benefits longer. And remember, in most cases, you fall off after six months. So the number is even much worse than this. The next chart shows the ADP report which we just got today. So you could see the last two months were below the red line, negative. Today's was above. But when you take the three combined, the three combined gives you a grand total of 10,000 job creations in the United States. That's unacceptable. We have a very big concern in the labor market.

[Pat]

You're making the argument to say lower the rates.

[Barry]

They have to lower rates because we.

[Tom]

Are so by how much?

[Pat]

By a point or two.

[Barry]

So there's a formula for it. There's a formula that says you take the rate of inflation and then you take something that's a little artistic. It's called R Star. Tom knows exactly what I'm talking about in R Star. Stephen Myron, who is a Fed governor appointed by Trump, he thinks r star is 0.1. You take John Williams, the New York Fed president, He says it's 3/4 most people in the middle. So even if you said it was a half a percent, okay, so that means that the neutral rate for the Fed funds rate would be at 3.4. So we're roughly a half a percent above Neutral. But I think the way that you started at 2.9 is fictitious and here's why. I think when everybody says we're obsessed with inflation, it's too high, I believe that they're absolutely wrong. They don't understand how to read it. Some quick things. Rob, would you mind possibly pulling up the very first chart? And here's the rate of inflation as measured by the Fed. They look at personal consumption, expenditure, PC they look at the core rate, they say it's 2.9. We need it to be 2. It is too darn high. Right? But when you take a look, even Chairman Powell says tariffs, they're not inflation. It's a one time price adjustment. Now Chairman Powell thinks it could be up to 0.5%. I'm being conservative, 0.3%. So that's an overstatement. Even the Fed Chairman agrees that there's an overstatement. OER stands for owner's equivalent rent. Pat, this is the most ridiculous thing out there. And Tom, you know how this works. This is a survey. So a survey. And here's the literal question. If you own a home, the question is how much could you rent your home for today, unfurnished and without utilities? Pat, I don't know how much I could lend my home for. Okay. I don't know who does? Okay. And then measure the change monthly to month. It's insane, but yet this makes up one third by far the largest component in CPI and 14% of PCE, the.

[Tom]

Number that people use Zillow estimates. And Zillow will tell you that, that, that they cannot describe how they do the rent conversion because you look at a house, this house for sale would rent for this. They can't describe how they do that.

[Barry]

But they, but they do have good data. So for example, the survey that the Fed looks at and uses and the BLS uses says rents are going up at 4% a year. This methodology has been in place since 1985 without a change. Now, 1985 you didn't have Zillow, you didn't have apartment list, you didn't have totality, you didn't have the data from Fannie Mae. All those things say it's actually sub 2%. But if you take 2%, the difference between 2 and 4, it's enormous because that means that on PCE were overstated by 3, 10 of a percent. It's just a BS number. And then the worst one is portfolio management. And nobody looks at this thing, portfolio management. If you put your money in with a mutual fund or with a broker, dealer, whatever it is, let's say they charge you 1%. Now, if they went from 1% to 2%, clearly that's inflationary. But if the stock market's going up and you're making more money, but as a result, their 1% is a greater amount, the BLS says that's inflation. How could they possibly say that? Think about it in reverse, Pat. Think about it. If we had really bad inflation in the supermarket. Here I am, I go shopping and I look, oh my gosh, all this inflation. And then I come home and I open up my mail and I see my statement. And let's just say in this case, the stock market's tanking. And because the stock market's tanking, my portfolio management fee is less. Now the Fed comes out and says, you know what? There is no inflation because we got the offset from portfolio management fee. I mean, think about the ridiculousness of this. So inflation right now is really at 2%, that's where. And it's, that's at the Fed's target. So the Fed should get off their obsessiveness with this silly idea that inflation's too high and they should worry about the job market, which affects most Americans.

[Tom]

Correct?

[Brandon]

Yeah, But I wonder what percent of this is attributed to the Fed's rates being too high? I mean, don't get me wrong, I think that it's crazy the way the Fed does things. I think they're politicized right now. But I also, we saw this chart that Umberto show us the other day that shows a deviation. Normally, jobs, job openings track the s and P500, but since 2022, they deviated. If you could sense that chart, it shows like half of it shows the job openings that you show, but the other half, it shows for the first time that the stock market's going up while job openings are going down. Since Chachi BT was created. So do you think some of this with the job openings being less and less could be because of automation?

[Barry]

Well, clearly AI is definitely going to continue to have a big impact. We all know all the big headlines, right? So we know that we're going to see AI replace a lot of jobs. And obviously there's going to be some individuals are going to be impacted by that, unfortunately. Right.

[Brandon]

So would a simple rate cut fix the job opening problem? I guess is what I'm asking.

[Barry]

What it does is this. It can improve economic conditions. The reason it does that is because if you bring interest rates up, people slow down their, their buying because that People buy with monthly payment and less month. You know, a higher monthly payment, I'm going to buy less of it. Lower monthly payment, I'll buy more of it. If you stimulate the economy to a greater degree, you may create more jobs, potentially to offset some of the losses from AI. So will it stop the AI losses directly? No, but will it offset by economic conditions improving and allowing jobs to be created? But. Yes.

[Pat]

But what is your solution, though? Okay, yeah. So I'm curious, when you look at this chart yourself, that shows S and P is climbing, but jobs, job openings is decreasing. How do you process this?

[Brandon]

I think, I think we're in uncharted territory here. I think that, like, I'm not a big fan of government intervention, but I'm also not a libertarian because I think there are some useful cases for the government. I think this is something that is going to require a lot of thought and attention to avoid like a, A UBI situation being necessary. Because, like, how do you get around this? Like, jobs are becoming more useless. There are a lot of jobs that are bs, jobs that are going to be automated. Like, I think companies, rather than aggressively hiring, are going to be aggressively automating. So like I said, I, I don't think there's like a clear, easy fix for that, but I think eventually we'll get to a place where new jobs are being created.

[Pat]

But the way I process what you're saying is ubi, right. You're suggesting that the government intervention. Government's got to come in and get involved. He's suggesting a different way of doing it.

[Brandon]

No, I'm suggesting that, like, that's, it's a problem that a lot of thought and efforts and we have to put into, to avoid ubi.

[Pat]

I fully agree with you, but what can you put into it to avoid ubi?

[Brandon]

No, yeah, that's difficult question. And I, I don't even think that we're, we're. I don't even think we have load inflation right now because if you look at the core spending of people, energy, housing and food, those. All, all three of those are still going up. So I don't know if inflation is necessarily.

[Pat]

I want to go to that, I want to go to that, to talk about that as well, because the, the. Where's that story about beef? Oh, you had it as separate, right? Is, Is there a story you have, Rob from.

[Tom]

I can pull one up.

[Pat]

Supermarket sticker shock, beef and coffee prices. Brandon, go ahead, because I know you wanted to talk about that.

[Brandon]

Yeah. And, and when after you do that, Rob I send three charts to those three things, but yeah, so I think Trump is seeing this problem the wrong way because he's telling the ranchers to lower the price of beef. He thinks it's the ranchers that are overcharging. But I, I looked into what the ranchers themselves are saying and a lot of them are saying that the problem is there's only four major meat providers that keep lowballing them when they, when they buy the meat from them. Two of which by the way, aren't even domestic. They're international meat providers. So it's like a consolidation thing. And you know, this is I think a matter of national security. Like the same way that energy or pharmaceuticals would be. If we're talking about beef and this is like you hear a lot of the stuff about oh, stop eating meat. Like the WEF talks about that and whatnot. There's even weird things where environmentalists have advocated to have wolves released in areas where there's like a ranchers and they've been. And they kill the cows. So it seems like a, like a weird thing making conditions for ranchers more difficult. Wolves being released, like in areas like the protected species being released.

[Pat]

What areas?

[Brandon]

Colorado I saw specifically.

[Pat]

Rob, can you pull this story up about Colorado with wolves being released to.

[Brandon]

Not like they say, for like environmental reasons. But.

[Pat]

Who said that?

[Brandon]

The people who put the wolves in that area.

[Tom]

But who's. Whose cows are they attacking Ranchers. Okay, well, why aren't the ranchers putting up fences or contacting the authorities that says that I've got basically feral wolves attacking my calves.

[Brandon]

I mean, they're trying, they're putting a lot of effort into stopping.

[Tom]

Where do they come from?

[Pat]

But this is. So here we go. Colorado voters in November 2020 approved Proposition 114, which directed a couple Colorado Parks and Wildlife Commission to develop a plan to introduce and manage gray wolves west of continental divide. By December 2023, the agency completed a wolf restoration and management plan and sought a federal designation under the Endangered Species act to classify and introduce wolves as non essential experimental population. Given more flexible management tools, CPW released 10 wolves captured Oregon and 2 grand and summit counties on western slopes. So, okay, so this is a one off story that you're talking about, right, for Colorado.

[Brandon]

Yeah. And it's been talked about in other places too. But there is a problem with like the big forward beef providers like lowballing these ranchers. Like the ranchers have drastically gone out of business over the last 40 years. Like there's a lot of charts that show the amount of beef providers or ranchers and it's like a terrible business to be in. So there, there is a, like a big problem with like the, I guess, profitability or survivability with the people who provide.

[Pat]

A guy on the podcast four year, four or five years ago, his name was Chad and he was a rancher, talking about how difficult things were for him. And, and most of these guys, it's business that's been passed down generation to generation to their families. But let me, let me transition to a different story with this one here. I'm going to go to the story. Michael Burry, right? Michael Burry, who we know at the end of the movie Big Short, he says, water is what I'm going to be going into, right? I don't know, Rob, if you have the clip at the end of Big Short, if you type in Big Short, end of Big Short, movie water on Twitter, it should come up. However, all of a sudden, quietly, he comes out and he announces something and he pisses off Palantir. How dare you, Michael Burry, say such a thing. Burry reveals Nvidia and Palantir puts after bubble warning. What you mean to tell Me in video, $5 trillion company is not going to be a $10 trillion company in the next couple weeks? Michael. Michael says no. All right, so let's read this. Michael Burry's scion asset management disclosed bearish wagers on Nvidia and Palantir technologies just days after hedge fund manager posted a cryptic warning to retail investors about market exuberance. Rob, I think you have this up there.

[Tom]

So I have two clips that Brandon sent from Alex Carr.

[Pat]

Can you start off with the first one of showing what he shorted? Why don't you show what Michael Burry put up that he's shorting? You know which one I'm talking about? Brandon?

[Tom]

Yeah, it's the second one where he's talking about the shorting, right?

[Brandon]

Yeah, both of them. He's complaining about the shorting. Yet you could. It doesn't matter which one.

[Pat]

No, what I'm trying to say is there is actually a, an. A tweet from Michael Burry which prompted all of this. We have to start there first.

[Brandon]

Oh, the charts that he posted.

[Barry]

Yeah.

[Pat]

He puts it up there saying this is what he's going to be doing and it's freaked a lot of people out. Okay. He puts a chart showing the fact that they're going to be doing. I don't know if he found it or not.

[Brandon]

The charts that he Posted it showed that he's basically thinks that the cloud storage and all. Yeah, there you go.

[Barry]

And the reason why it's got. It's gotten out of play because he was on an island and he was proven correct when it came to the bubble in the mortgage environment. So that's why people are looking at this now. Every CEO is going to get pissed off when you short them. So that's a normal reaction, but this is something that the reason why people are paying such close attention is because this guy's kind of gone quiet for a long time and now suddenly another. Could this be a. You know, could he be two for two?

[Pat]

Yeah. So go ahead, Rob. Can you go to the second one? Is this him breaking down what he foresees happening with him?

[Brandon]

He's comparing it to the tech bubble, saying that there's like, correlation with the charts and everything. And then he show shows the flywheel of the US Economy right now, how everything's like, you know, they're saying like 80% of GDP growth has been because of data center building.

[Pat]

Okay, and then go to the Palantir guy. Alex, go ahead.

[Tom]

Super triggering. Because these people, they could pick on any company in the world. They have to pick on the one that actually helps people that actually, actually made money. For the average person that is actually supporting our war fighters, why do they have to go after us? And I'll tell you what, though, it's crazy motivating because I'll tell you why the short sellers are constantly getting screwed by Palantir, because every time they short us, we just are, like, tripling down on getting the better numbers.

[Pat]

Okay, go to the next one. Go ahead, rap.

[Barry]

He's actually putting a short on AI.

[Tom]

So the way I read it was.

[Barry]

Us and Nvidia, and it's like the biggest position.

[Tom]

Okay, so. And then, by the way, with the shorts is very complex. It's not even clear that, honestly, I think what is going on here is market manipulation. We delivered the best results everyone anyone's ever seen. It's not even clear. He's not doing this to get out of his position. I mean, these people, they claim to be ethical, but, you know, like, they're.

[Barry]

They're actually shorting one of the great businesses of the world.

[Tom]

And I'm not against shorting as a.

[Barry]

Matter of theory, but I'm just saying.

[Tom]

Pick something that is not doing a.

[Barry]

Noble task and just not his company.

[Pat]

Just not his company.

[Barry]

Tom, look at the chart. I mean, it's gone parabolic.

[Tom]

It has? Yeah.

[Pat]

There's no question about.

[Tom]

Let's not talk about the leadership of Palantir. And people give this guy a lot of credit for being crazy genius. And let's not talk about the products of Palantir. Let's just talk about the stock market which can be over enthusiastic at time. And Palantir at 207 was the stock price when the fund started is a PE of over 620. It's like, wait a minute. That's like your grandfather says, hey, my blood pressure is 410. They say it's the greatest of all time. They say, grandpa, you're about to die. That's the wrong stat to set a record on. And it went down 10%. 20.7. And now it's hovering this morning. 182. 182.7. Oh, here it is. 184 5. Is that live?

[Barry]

Nice bounce.

[Tom]

Okay, so that's a little bitty bounce, but that means it's down 10%. But now the PE. That means the PE should be 4:40. 430. Can you scroll down? What's PE?

[Brandon]

Yeah, 430.

[Tom]

430. There we go. So now the PE is down to a. A not completely unconscious alcohol poisoning.

[Pat]

430 is not unconscious. Six bottles of tequila.

[Tom]

Six hundred and twenty is a blood alcohol of. Of you know. 0.4.1. You get arrested for drinking before you're dead. Can you just go to this is still 25. You're still drunk.

[Pat]

Apple ratio. Go look at what is Apple. Do me a favor. Go to chat GBT and ask Chad GBT what is I'm going to give you several companies what is Apple while.

[Tom]

We'Re looking those up yet Alphabet still 400.

[Pat]

Give me another Walmart. Okay, go to give me another one outside of the not in go do Nvidia then you can do it. You can do Nvidia do a Palantir which we just saw. Who else you want to put on that list? Give me some reasonable companies.

[Brandon]

Microsoft.

[Tom]

Why don't you put AMD making chips.

[Pat]

Put Tesla.

[Tom]

Intel had a note.

[Pat]

I have that put intel and put Oracle. Okay. Go with those and let's see what it shows. Go ahead. You know what I generally ratio P E ratio. Yeah.

[Brandon]

Yesterday I asked chat GPT would have been the most ridiculous P ratios of all time. I sent Rob that chart so you'll like that.

[Pat]

Who was at the top?

[Brandon]

Was it so every there's been some that have been in the thousands.

[Pat]

I want to know who that and.

[Barry]

Some can be infinite if they're actually have losses.

[Brandon]

Yeah.

[Pat]

So is it showing PE ratios? Let's see. The PE ratio does 30.

[Tom]

That first one there. Apple PE.

[Pat]

Okay, we, by the way, by the way, by the way, by the way, let's do this. Apple market cap has shown what? Right there. Three trillion. Let me put it to you this way. If Apple's PE ratio was the same as Nvidia, Apple today would be a 50 trillion dollar company. That's what? Not Nvidia. What do you call a Palantir? Okay, so Apple is 30p ratio. Solid. Keep going lower. Rob, if you could. Okay, next one is Microsoft 36, 37. Okay, keep going.

[Tom]

And 3.8 trillion.

[Pat]

Alphabet 24. At $3 trillion. Keep going lower. You got Walmart. Wow. I don't see Walmart's P ratio. Rob, do you have it?

[Tom]

It doesn't have it.

[Pat]

Okay, we'll pull it up separately. Keep going. So Nvidia is what, 212? Keep going. Rob Palantir. 207. Which does not. That's not it, Rob, because it's not showing it now for some reason.

[Tom]

It stops, yeah, it stops showing.

[Barry]

By the way, I'll give you another one. Netflix is at 46.

[Pat]

Netflix is at 46. What are we talking about here? And the guy is saying at $182.

[Tom]

He's still at 430.

[Pat]

But by the way, do you know what this means though? If Nvidia's P ratio. What's Nvidia's P ratio? 45.

[Brandon]

No, that's Netflix 60 right now.

[Barry]

But, but there's big implications of this, Pat, because if indeed, you know, we've known the stock market is at expensive levels, but if indeed there is a change where these prices start to come down to much more, let's call it normalized levels of pe, we know that the drive up in the stock market and you just showed the chart before when you saw that rise in the S and P primarily driven by the Mag 7. If the Mag 7 comes down to more normalized PE, that could have very big implications on the overall stock market.

[Pat]

True, true. When you're looking at this kind of stuff. So, so Michael Burry announces that. How, how, how much? Brandon, maybe let me ask you this. Do you agree with him that Palantir and Nvidia are about to have a market correction?

[Brandon]

No, I, I mean, I, I, I'm scared for Michael Burry because I wonder if he's a little bit like the guy, Jesse Livermore that I think a lot of traders know about. You ever hear that guy Reminiscent of a stock operator. So he, this guy, he's famous for making like what people call the greatest stock market bet ever. He made $100 million during the great Depression. He was like a famous short seller. But he, he made a fortune, lost a fortune several times. So I wonder if bur is almost chasing that high because I, I asked Chachi PT yesterday what's his record on trades and like he's on kind of a losing streak. He, he did the housing bubble well. He did the GME well. But he, he got some stuff wrong the last couple of years. He got the, the bond bet wrong. He got, he did the Tesla bet wrong. So I almost wonder if he's chasing the dragon with this. And so I sent Rob this chart that shows. So that's Burry's bets right there. So he's on kind of a losing streak. You know, he had a few wins out of the gate, but he hasn't had like a clear definitive one the last couple years.

[Pat]

Show, what are the companies that had a thousand P ratio.

[Brandon]

Which one? Yeah, I sent you that one also, Rob. So just to show this is an example of how companies who, people see a lot of potential and could be debased from reality. So Amazon during the 90s had like a 500 to 3000 PE ratio. And Tesla in 2020 at a 1000 PE ratio. Yeah, Rob, right now, 55.

[Pat]

Say that again.

[Tom]

Video this morning. Right now is 55 PE ratio. 55.

[Pat]

Okay. By the way, I'll buy that.

[Tom]

So sizzling versus 30 for Apple, but not insane.

[Brandon]

So look at this. So Apple or Amazon, 500 to 3,000 in 1999. Google 100 to 200 in 2006.

[Pat]

Netflix was 3 to 600, Tesla was 1,000 plus.

[Brandon]

Yeah.

[Pat]

What's Tesla today? What's Tesla's P E ratio?

[Brandon]

200, I think.

[Pat]

Is it still at 200?

[Brandon]

200, yeah. So I think my read on this is when people see that a company has a potential to be a monster, they'll get way ahead of it like that. And I mean, Palantir, as much as I am fearful of what it does and dislike a lot of things about it, is a great, perfect product for right now. They're kind of like the Standard Oil of today, where Standard Oil is the first company that started refining oil in a big way. And that's what Palantir does. They're the first company that's really refining data in a big way. People call data the new oil. So that's why I think people see so much Potential in it.

[Tom]

Well, people also see. Go ahead.

[Barry]

No, I was going to talk about. Look, if you look at things like the Fear Greed Index, it's off the chart. It's. And it's literally off the chart. The, the Euphoria index that Citibank does, it is if you go above 0.41, it's called, you know, Euphoria, Extreme Fear. It's. Yes, if you. But the. This is a current one.

[Tom]

Yep.

[Barry]

Okay.

[Brandon]

Weird.

[Barry]

Yeah, that's, that's really weird. How about Citibank's?

[Pat]

That is extremely weird.

[Barry]

Yeah, yeah, yeah.

[Brandon]

What does greed look like?

[Tom]

If that was updated to today at 10:20am wow.

[Brandon]

We're nowhere.

[Tom]

Pre market reacted badly to the New York election, but check this.

[Pat]

I agree. That's why. Because a week ago was at 40, so 40 is here. And a month ago was neutral at 53. Yes, but, but we haven't been at greedy.

[Brandon]

I mean the markets are all time highs every week.

[Pat]

Yeah.

[Barry]

How about if we look at the Euphoria Index from Citibank, if you can possibly pull that up. So there's an old saying that the market tends to inflict the most pain on the most people at the worst time and you just kind of worry at these levels. Are we at a point where there is at least a correction of significance coming? I'm not saying that it's a crash or bear, but are we at those levels and are there things out there that just provide the excuse for it?

[Tom]

Can we look at two charts, Pat?

[Barry]

Yeah, look at that. You could see the euphoria index there, 0.41. You're in euphoria. You're well, well above that.

[Tom]

Yeah.

[Brandon]

And I wonder if.

[Tom]

Rob, I texted you.

[Brandon]

Are we past the point of the Fed even allowing a correction? Because what does a correction look like at this point with everything so built up? And I think a lot of it too has a lot to do with index funds because the last 15 years the vast majority of investing has been passive investing from like BlackRock and Vanguard index funds. So I think that's a lot of an effect on it too.

[Barry]

Absolutely. Which is why it's so important because these leaders are so heavily weighted within these funds that they can have a material influence if they come down. Alex Garman used to say, look, the generals in the market, they drive the market. If you shoot the generals, the market really topples. So I'm not saying that this is going to happen, but if you see that the fact of your point, which is a really good point, so much is Indexing, if the indices drop, it has a very wide based effect.

[Brandon]

Yeah.

[Barry]

As far as the Fed goes, just to tell you this, and people aren't looking at this and I know that the point, the 70% chance of a cut there will be, and Powell was very emphatic about this, but you kind of have to read between the lines. There will not be a Fed rate cut without the data. Which means if the government doesn't open up in time for the data to be collected, the Fed will not make a cut based upon not having the data. You have to kind of read and watch his speech carefully. But there won't be a cut if we don't see the government open in the data. That there.

[Tom]

Very interesting. So people talk about the bubble. Pat, look at this. This is Cisco. This is historical chart. Let's see if the eagle eyed observer can find the dot com crash.

[Brandon]

Yeah.

[Tom]

At that point in 1999, Cisco had 75% market share of routers. And in 2000 at the moment of crash, Cisco had 86% market share of routers. And everybody's learning what a router was. You needed a bunch of routers to plug in a bunch of things so you could get websites to talk to each other. You needed lots and lots and lots of routers. Well, this was Cisco. Now take a look at that. Now take a look at their history before 1995. Pat, look at it. We're making routers. Making routers. Making routers for about five years go like 91, 95 and then whammo. Now let's go take a look at Nvidia. Oh my God, look at Nvidia. Now compare them back and forth. Just flip back and forth. Could we be due for the correction in AI? Because you look at the market share that Nvidia has on the engine of AI. Cisco had this on the engine of routers. I don't want to crash. I don't want the madness that comes with the crash. I don't want a sudden correction where average investors can't move their funds quick enough. I don't want that. But I'm looking at both of these and it makes me wonder, especially when I see palantir with those PEs. Because we have to remember the Tesla and the Amazon PE came with both CEOs telling us to ignore the PE. And even Elon Musk saying, well, it's a little bit ridiculous because you know, I've even begun to sell the next model car, so I hardly have any profit. So they're completely valuing me on the future of these cars. He was right. And so it was 1000 p. E by arithmetic, but it wasn't a bad stock price by value of the company by market cap. Amazon was the same way. So I look at this and I'm like, wow, maybe Michael Burry's right now, he's been wrong about a lot of things, but you can't. There's my two proxies. 89% market share of routers for Cisco. I don't know what Nvidia's market share is, but they are the overwhelming market share. Owner of the biggest, fastest multithreaded chips that are needed for AI.

[Pat]

So you think there's going to be a correction? You think there could be a correction with Nvidia?

[Tom]

I think there's going to be a correction. I don't think it's going to be like 2000, 2001, which is referred to the quick recession or the nuclear winter. It went like that and I lived through it. We actually raised a round of fundraising for JAMDAT during that. Miraculously enough, we actually got it done. But it was terrible. But it was a fast, terrible year. It wasn't like Covid, where it was like year one, year two, year three, bounce out. It was a. You remember that year? Of course it was a fast, terrible year.

[Barry]

But you had that. You had that back in April where you had a correction that was a 20% correction. You had a bear market and then you had that big bounce back. So these things can happen. It can correct and go back up. That's the thing about these PE ratios. The market will allow it if you have favorable overall conditions, if you have an accommodative fed, and if it appears you could grow profits into those PE multiples. So to the extent that right now maybe Nvidia and Palantir look like they can grow their way into these multiples, then the market's going to be pretty lenient on them. Unless there's an exogenous shock.

[Tom]

Your fear is my fear. The government doesn't open, numbers can't come out, they don't cut the rate, and then they have to chase the rate in January. And that's bad.

[Pat]

So let me go to the story. Trump officials torpedoed Nvidia's push to export AI chips to China. Rob, I think got a clip on this one as well. Shortly before President Trump met with Xi in South Korea, an urgent issue emerged. Trump wanted to discuss a request by Nvidia's chief executive office CEO to allow sales of new generation of artificial intelligence chips to China. Current and former administration officials said green lighting the export of Nvidia's Blackwell chips would be a seismic policy shift, potentially giving China, the US Biggest geopolitical competitor, a technological accelerant. Huang, the CEO who speaks to Trump often, has lobbied relentlessly to maintain access to the Chinese market. Go ahead, Rob, if you can play this.

[Brandon]

President Donald Trump on Sunday said he will allow Nvidia and Beijing to make deals on AI chips, but said he will not allow Nvidia, Nvidia's most advanced semiconductors, to be sold to China. This announcement follows earlier indications from Trump that he was open to discussing export controls on Nvidia's leading Blackwell chips. In a 60 Minutes interview that aired on CBS on Sunday night, Trump was asked about China's interest in buying the world's most advanced semiconductors, especially Nvidia's flagship Blackwell AI chips. Interview A. Noro O' Donnell asked Trump if he would allow Nvidia to sell their most advanced chips to China, and the President replied, no, we won't do that. However, Trump said he will let Beijing deal with Nvidia, noting that the American AI chip maker is the prime company in the world for that, and added, we will let them deal with Nvidia, but not in terms of the most advanced. After the two leaders met face to face in South Korea, Trump told reporters that there were no talks about Blackwell's president. Trump said, quote, we did discuss chips and they are going to be talking to Nvidia and others about taking chips and we make great chips. The president added that he will have a word with Nvidia CEO Jensen Huang and said further discussions will be between China and.

[Pat]

You can posit with the US Brandon, where you have with this. Does this concern you? No.

[Brandon]

I mean, I'm glad that he's saying we can't to the better chips. Yeah, they're not gonna send the black watches, but I am concerned that they're still going to end up there because I remember in the, in Biden's administration, he also put a ban on sending Nvidia chips to China, but they still ended up there. So I don't know if that's on part of the company because I know Jensen was advocating to send these chips to China, but I, I don't know. I think that's it's common sense to the highest magnitude to not send them to China. Like all the most advanced and important things of the future economy are going to be done with these chips. So, and I hear people on TV saying oh yeah, we should probably send them there so they aren't forced to go out on their own and make their own in like a hostile way. But no, I completely disagree with the notion or the argument of sending the most advanced chips to China for sure.

[Tom]

Well, there's two ways to look at it, right? The H20 chip is the slightly lesser chip that they're allowed to send to China. Now what does that mean? That means China builds its own data centers with the chips inside China. Now you take a look at deals that have been struck. Like what? OpenAI struck the deal with Amazon because they wanted access to Amazon's data center through the cloud so that they could take advantage of 200,000 Blackwells running or H20 Blackwells running on Amazon's data center. So how China gets access to it is two ways. One, they build their own data center and they want the, the good chips to build it. The second is they're using proxy locations to do their, their intelligence resource. And if you don't think they're using proxy locations in other parts of the country of the, of the world to get to the cloud to do some of the work, then you're not paying attention. So it's got to be bigger than just the chip shipping to China. One of the things that was pointed out, they said, ex quote, exports of Blackwell chips to China are worth tens of billions of dollars into Nvidia and could keep Chinese companies hooked on Nvidia's technology. Nvidia a buy. That's an analyst saying, wow, wouldn't it be great if Nvidia's hot chips could be in China? Because now China has to depend on Nvidia and they'll keep buying them from Nvidia and so Nvidia is still a stock buy. Whoa. So that's what you see, that greed.

[Pat]

Is just the logic instead of long term thinking.

[Tom]

That's exactly, that's greed on that. Where the strategic part of it is, wait, we got to keep China, America first and anybody from operating the big data centers, from giving access to China by proxy to the processing power.

[Pat]

But let me ask you a question. If you're play China real quick, if I'm China right now, and how bad do you think the President and his administration would like to get the victory done? Pre 4th of July, pre Q2 of next year. Pre you know, celebrating the 250 year.

[Tom]

A ton of optics.

[Pat]

Okay, so then if I'm China and I'm on their side, guess what I'm doing. What do you think I'm doing delay, delay, delay, delay, delay, delay, delay. And in the last week, I said.

[Tom]

We make a deal for Lithium.

[Pat]

If you give me those chips, the better chips of Nvidia, I will agree to this. But I need those better chips from Nvidia. And then what do you do?

[Brandon]

No way, huh? No way.

[Tom]

But, but, but if you cut the deal and say, well, they're going to get them anyway somehow.

[Barry]

The other thing you have to think of is how long are they, the better chips before, you know, technology is very difficult to slow down. They might be the better chips right now, but there's going to be something better that eventually for sure.

[Pat]

But who is going to be making a better chips then? It's probably still going to be Nvidia. It's not like it's going to be that. Changing that dramatically. No matter what the new chips are.

[Tom]

Going to be behind. Intel is limping, getting loan guarantees from.

[Pat]

The federal government or even teaming up together. Like they're investing into each other right now to create like a flywheel of three competitors giving each other money, saying, listen, one of us is going to get this right. And if you do, I'm going to rely on the 50 billion I've given you.

[Brandon]

Yeah, no, we have, we have a huge head start, and we have to maintain that and keep the gap growing instead of shrinking. Like the gap starts shrinking for a bit of time. There's that chart that shows China versus America's AI development. And they started closing the gap a little bit. But stuff like this will keep us. Like this is a nuclear arms race. I don't know why people don't see it that way. It's literally the nuclear weapons of the day. So that chart right there, see, China starts narrowing the gap, but that's a little bit of an old chart.

[Pat]

So do you do it? This is what I'm trying to ask you guys. You're the deal maker, okay? You're noticing their delaying. They want the chips, okay? They want the better chips from those guys. Do you. Your us that deal is not done. Do you go into 4th of July without a China deal done? If they're asking for those chips. Tariff deal, yes, the tariff deal is not done. Do you go, or do you give the chips and tell Huang to say, you know what, you can sell some of those chips in for the next two or three years, what do you do?

[Tom]

No, no, I don't let it. If the deal doesn't get done, it doesn't get done. But I don't let them do it, because, look, we are the top dog on technology. This also relates to defense. You know, why does Ukraine, why does Ukraine have, have a jones for Tomahawk missiles? Because they can fly all the way to areas around Moscow. It's a power plants and Russian targets deep. And they're accurate, very accurate missiles. That's why they want them. Why did Israel want a lot of our more advanced nuclear stuff? Why did they want support with that? Why did they want the more advanced aircraft? This happens in the defense world, Pat, and people need to understand that this chip is a Tomahawk missile. In the war on AI, 100%.

[Barry]

There's, there's probably. Pat, there's probably other areas that China really needs us for. Their economy is not in the greatest shape right now. So there are things that the tariff does inflict pain on them for. So we may have leverage in other areas so we don't have to. Even if they delay, concede on the chips, we may be able to use other levers to pull to put a deal together. And I agree with you optically, it would be really important to get that done sooner than later.

[Tom]

Yeah, I agree with that. What price?

[Pat]

Yes, for sure. No question about it. There's this event that's coming up this week with the America business firm that started today. Witkoff's gonna be there. I was with, we were with Witkoff last night in Miami. Mayor Suarez, you know, this event. A lot of interesting people are coming at this event. And I'll be, we'll be there on Thursday. But you got Messi, you got Jamie Dimon, you got Mario Corino, Machado, a bunch of different guys. And topic of discussion, I think, at this event, Tom, what are the odds that they're going to be talking about New York City mayoral race? What happened there?

[Tom]

A thousand percent. It's going to be on. I think Brett Baer is one of the moderators. How can this not be, hey, what is the change and what is New York City leadership going to mean for this? And just fill in the blank. Everybody could be asked that question.

[Pat]

Yeah. Anyways, I'm asking that because this is all leading to the big 20, 26, 4th of July world Cup. America's gotta be like top shape when the World cup comes because we have to have every. Because President Trump knows optics better than anybody else we've had in the White House. I don't think anybody's understood optics better than him. That deal with China's got to get done for us to be able to, you know, sell that victory in the World cup on the big stage. We'll see. We'll see what's going to happen. I do think this is going to be a deal that both parties will use the leverage. I wonder who is more patient. Typically, China is more patient in these types of situations, but we'll find out. Next story I want to get into.

[Tom]

Is.

[Pat]

Which one should I go to here? Are Trump's tariffs making money? Check this out, folks. When you look at this chart, okay, Are Trump's tariffs making money? Besant gave a number of what he thinks is going to be making money. Okay. Betson says it could make us a trillion dollars. It could make us a lot of money. Rob, how much money have we made so far? Do you have the number on how much money we made so far?

[Tom]

It says 1.42.2 billion more than this time last year. Two point.

[Pat]

It doesn't say 142 billion more than it made last year. And a growth of 174%. But is it enough to replace the income tax as a main source of funding for the federal government, as Trump administration officials argued? Treasury Department data shows that would be a massive stretch. Tariff revenue has grown for months. And the latest showing that the US has collected $223 billion. It's pretty wild as of October 31, 142 billion more than last year, but it's still short of the $2.4 trillion federal income tax brought in last year. You can tell when you're reading this article, it's kind of like, yes, it did bring $142 billion more, but there's no way you can get $2.4 trillion. Tom, your thoughts on the story?

[Tom]

Oh, yeah, like you're comparing it to one full year of income tax. It's like, we're really, really proud that Brooklyn bet David has reached three foot tall, but that's still far short of six. Shaquille o' Neal's seven foot two. It's like, what the hell? Really? He just got started. This is this comparison. Oh, it's far short of look, I think you look at what it's brought in. Number one, it brought in more $142 billion more. Number two. Number two is that it is not showing up as 5, 6, 7, 10% inflation with the inflation algebra. That's tortured numbers anyway, which isn't really what it's supposed to be. And so I look at it and I'm like, this is a success, but they will take any opportunity. And this is Politico fun with Charts with people that don't normally play with spreadsheets. And it's very aggravating to me because this is good. This is good because inflation didn't happen yet. World concessions to equalize the trade that we have have happened. So why can't we look at that and say, wow, we're just getting warmed up. Can we do more?

[Barry]

Yeah, but what people don't look at is that that's 142 billion. That is less treasuries that have to be issued. So the fact that you're issuing less Treasuries means that you can actually. You don't have to incent people to buy them with a higher interest rate. It actually helps interest rates improve. So while you could look at just the negatives, right? I'm with you 100%. People just look at the negatives, right? The negatives say, okay, well, you know, a third of it's being paid by the country that the goods are coming from. Great. But the consumers here are bearing some of the burden, as are some of the distributors channels here. So it's spread out. However, if we didn't have that, we'd probably be looking at higher interest rates than we would have currently.

[Tom]

And when you say Treasuries, that's us printing treasury bills that we sell around the world to get cash to pay our own bills. And it's people such as who and who that are buying those. Who's number one?

[Barry]

Well, you're seeing right now we're probably buying more of them domestically because we don't.

[Tom]

The number one international buyer typically last.

[Barry]

Three years is Japan, number one. But they have really slowed down to almost neutral now as far as what's rolling.

[Pat]

Why don't you see this chart? Rob, can you pull up this chart here? Watch this. The spike.

[Tom]

No.

[Pat]

1. You don't need to understand tariffs or numbers to not understand this chart. This chart tells you what's happened. Not this one, Rob. The tariff revenue. That one right there. You got it. Look at that. That's 2022 monthly. We're average around $10 billion of revenue coming in for the last few years. Three years. 10, 10, 10, 10, 10,. 10, 10, 10, 10. 10, 10, 10, 8, 8, 8, 9, 9, 9, 8, 8. Boom. 25, 27, 29, 30, 30, 30. October is going to end up being 34, 32 to 34 billion in a single month. That's nearly 4xing some months combined. Okay, you take four months combined. We did that in one month. So you know the sustainability of that and Then now there are some companies and Tom, I'm going to come to you with this one as well. Businesses press Supreme Court to strike down Donald Trump's emergency tariff power. Rob, I think you do have a clip on this one from Financial Times. Businesses, lawmakers and former U.S. officials are pressing U.S. supreme Court to rule against Donald Trump's use of emergency tariffs powers ahead of the showpiece hearing this week. About 40 legal briefs have been filed by groups raging ranging from U.S. chamber of Commerce to former national security officials in opposition to the signature policy of US President has relied on to wage his trade wars. Go ahead, Rob.

[Tom]

This is Trump from 60 Minutes explaining the importance of tariffs.

[Pat]

Okay, go for it.

[Tom]

Economy. The signature part of your economic plan is tariffs. The Supreme Court is going to hear arguments this week on whether you have the authority to impose these sweeping tariffs without congressional approval. The lower courts have ruled against you.

[Pat]

That's why it's at the Supreme Court right now. Very close rulings. Yeah.

[Tom]

What happens to your economic plan if.

[Pat]

The Supreme Court invalidates your tariffs? I think our country will be immeasurably hurt.

[Barry]

I think our economy will go to hell.

[Tom]

Look, because of tariffs, we have the highest stock market we've ever had because of tariffs.

[Brandon]

401Ks at the highest level.

[Barry]

That, and this is millions and millions.

[Brandon]

Of people that we've ever had 401ks.

[Pat]

I think it's the most important, important subject discussed by the Supreme Court in a hundred years. Okay.

[Tom]

So Tom, thoughts Businesses press Supreme Court. I'd like to see some CEOs talking right now. We've got the US Chamber of Commerce reputable group, and you've got former national security officials in opposition. Go take a look at what happens when people that work in defense or national security go back to the private sector. They end up on the boards of international multinational companies, often lobbying against us to help those companies profit wildly with trade deals that are tilted the other way. I mean, let's be real about it. The, you know, because those, through the miracle of, you know, cross listings, sometimes those companies also are traded on our stock market. It's amazing to me to see this. I want to know if someone's willing to put their head up above the water and say, me, this company, me. No one's doing that. These are groups of people. And the Financial Times says businesses, without naming a single.

[Barry]

There's three businesses. They're not large businesses either. That's what it is. So, so they, they, they say it, but it's three. And what's being challenged Is, does the president have the authority under this ipa, this emergency protection under the fact that the President would have authority if it's national security. So when he first did it, it was because of fentanyl, which you could argue is national security. But now what they also have is the point that you made the chips with China. So that is also something that he's using tariffs to protect us from having to give this technology to China by using leverage over Nvidia. So these are potentially arguments that should win with national security. I believe that he has appointed three members of the Supreme Court, and I believe that the Supreme Court does. What is the number of the Supreme Court that is Republican versus six three right now.

[Tom]

Six three, yes. Porcious, Comey and Comey Barrett. And then he also always can rely on Clarence. So, yeah, it's six three right now.

[Barry]

So I think there's a reasonable chance that this is upheld, that the tariffs are. It would be awful to think about if we had to unwind him. And then how much egg do we have on our face as a nation?

[Brandon]

Yeah, and all of his leverage goes away, too. There is a point. Rob, I sent you a chart. There's a point in time where tariffs were 90% of the national revenue. I love this chart here. Pat, you made a great video that has over a million views about how we could replace the entire national income or the federal budget with a combination of tariffs and claiming money that other countries owe us. So I mean, look at this. Like, this shows everything with. Look at what the big dips go down when we have wars. You know, the first one civil war, then World War I, then World War II. That's when percentage of tariffs as national revenue goes way down. And today, like since the 50s, it's went to like less than 1%. But, you know, it could get up to a trillion dollars. We're only at like 7% right now for an average of tariffs across the board. So, like with a combination of deals and rates, we get to a trillion dollars. It's funny, they're trying to take a, like a jab at this as if we're like not in a successful place of 300 billion. Like, you know, we sent 300 billion to Ukraine, so it's a whole Ukraine payment.

[Barry]

But what would happen? Think about it. If it is struck down, then the chart that you showed with all that revenue, we'd have to give that back. How do you even unwind that?

[Brandon]

Well, can the executive order that saying it is a matter of national security, if they strike it down no, it's not a zero.

[Tom]

I'm saying, where's the money come from? You'd have to issue Treasuries.

[Brandon]

Oh, for the tariff revenue.

[Tom]

Yes. Right. Yeah, yeah, the money got spent.

[Brandon]

Right. No, I don't think they'll do that. I don't think they would tie his hands behind his back like that. Because that's what I do. Like, that's the leveraging forever.

[Tom]

Terrible.

[Pat]

You know what that's like? That's like calling you and telling you, hey, we want you to be the CEO of Apple, but you can't make any changes to the comp. You can't make any changes to culture, you can't make any changes to anything. But we just want you to be a figurehead. Can I do anything? The board keeps shutting you down. No, no, no, no. Well, the stock, you know, shareholders voted me in, but no, no, no. Thank God it's six, three right now. Because if it was the other way around, imagine you become president. What we did learn during Biden's administration is that the single greatest thing that happened the last 60 years in politics is President Trump flipping three seats. That's what we learned. Look at that. Look at Neil, Brett and Amy. All of them have what name next to it? Trump, Trump, Trump. 17, 18, 20. I don't think it's ever happened.

[Brandon]

When you flip three seats in four years, too.

[Pat]

In four years and Obama flipped one and eight. Think about that. Rob, can you verify how many times Obama flipped? I think Obama flipped two and eight, if I'm not mistaken. One in first, one in second. I don't know what the number was on one of them, but I don't know what it could be. One in eight. The single greatest thing happened. People don't realize if that number, those three don't flip. When Colorado decided to remove, it was two of them, right, Rob? Yep. Yeah. When Colorado decided to remove President Trump on the ballot, if it was 6, 3, even 5, 4. This is a very different America we're living in today. Very, very different America we're living in today. By the way, Poly Market just came up. So, going back to real estate with Mamdani, here's Mamdani's Polymarket. They just literally tweeted this an hour and a half ago. Of what, Rob? I don't know if you saw this one with Humberto that he sended in. You know which one I'm saying? Polymarket came up with, saying the fact that Mamdani's ratio of what he's going to be doing with renfreeze. Okay. His rent freeze. The bet if you want to make it is 65% likely. There you go. 60.

[Barry]

Okay.

[Pat]

Change. 63% chance he delivers on his promise of rent freeze. Okay. Will Mamdani freeze New York city rent before 2027? 63 says yes, he's going to pull that off. What do you think? How terrible of an idea is this? How great of an idea is this, Barry?

[Barry]

Well, just go to where you have current rent freezes. It usually doesn't provide the best conditions. Landlords don't have incentives. Real estate values are harmed. You don't have people that want to purchase those because you can't make money on those properties. You have to give incentives for investment and you have to give incentives for good conditions.

[Pat]

And why is this a bad thing?

[Barry]

I think rent freezes.

[Pat]

Who turn, who's turned off by this? Who does this hurt? Isn't this a noble thing? Isn't this, isn't this helping out people that don't want their rents to increase? Isn't it fair for them to not have their rents being increased? Because he's saying it's a great idea and people voted for this.

[Barry]

So who's going to provide the housing for that?

[Tom]

Correct.

[Barry]

You know that. I mean who's going to provide that type of housing and what quality of housing would it be? It's got to, you've got to figure out the finances on that one way or another.

[Brandon]

Think about how bad just rent controls are. Like some of the most expensive areas in the world to live in are places that have rent controls, which is New York and California already. But it's the same thing that you said, but just to a smaller magnitude of not wanting to build or not having an incentive to own. But it's that times 10.

[Pat]

Tom thoughts?

[Tom]

The single family homeowner stops putting small homes as inventory out to rent. Large corporations and guys that own a lot of multi dwelling units, MDUs, apartment buildings, they're still out there but now their, their level of improvement, the level of investment in the property is lower. So the condition is lower. You know, heating, air conditioning systems, they choose to stretch them out and don't repeat place them as soon. But the single family homeowner that retires often looks at it and says, you know, if I can't do this, why take the risk on it? I'm not going to put that, I'm not going to put that on the market. So that inventory never comes on the market. And they sometimes they just decide, okay, we're going to Sell it. And so what could have been a collection of other rentable units for the renting population is not there. So the quality goes down, but also the supply goes down. Milton Friedman is right.

[Brandon]

He also said he wants to build 200,000 units somehow. So I don't know who's gonna be doing all that building. Mom, dummy.

[Barry]

If you can't make money on them.

[Brandon]

Right?

[Tom]

Yeah. Satellite photos tend to show that, you know, the land area in New York is pretty built out and there's water in the way. So unless you're gonna drain the east river and get a bunch of rocks from New Jersey and, you know, find a way to make more land, I mean, we'll agree that maybe he could talk to the Saudis. They built this offshore area that looked like palm trees and put very expensive apartment buildings on it. Maybe he could do something like that. But where, I want to know where. Where is he going to build these 200,000? Is he going to. Is this going to be eminent domain? Is he going to claim warehousing areas that are, you know, what's he going.

[Pat]

To do, by the way? Let's go to. He may do it in the middle of Central Park. What's more important?

[Tom]

No, but eminent domain, you know, eminent domain is. Is the right of a city to buy your house from you to make the off ramp for the freeway. They can do that. By the way, that happened in San Fernando valley for the 101. There were homes that were right next to the 101, homes that were at the end of streets. It was eminent domain. You were paid market rate. Is he going to take and seize commercial property or other things to make. To have land space for stuff? That is the socialist tool, my friends.

[Brandon]

Don't rule it out.

[Tom]

Remember, eminent domain is your city's ability to steal from you and then just pay you. Allegedly pay you market rate, but basically a victory.

[Pat]

You think he's capable of doing that?

[Tom]

Do I think he's capable of doing that? It's happened in America in the name of freeways, in the name of highways.

[Pat]

Do you think he's capable of doing that?

[Tom]

Do I think he. I think he's capable of that and more.

[Barry]

Just think of the heart of where it's changed and the brilliant job they've done in marketing. Because used to be that that was the victim. The victim was the big bad government took it away from you, but now somehow they've flipped the script to say, you're no longer the victim, you're the bad guy, because you have something that you own and the government by taking it away is the good guy. Right?

[Pat]

Yeah. I want to go to the next story. Let me tell you another guy that's claiming to be a good guy. Patrick. You know who Patrick Bateman is? Do you guys know the name Patrick Bateman? Rob, who's Patrick Bateman?

[Tom]

From Psycho.

[Pat]

From Psycho, Exactly. Good memory, Rob. So can you play this clip? Interviewer is asking Newsom, rob, do you have this or no?

[Tom]

Yes. Was it in your notes?

[Pat]

It was in my notes. Yes. Interviewers asking Newsom that. Your friends are even comparing you. Watch this one. You're zooming a little bit, Rob, Go ahead.

[Barry]

Patrick Bateman talk.

[Pat]

I don't know, but, I mean, people.

[Barry]

People say that you are like American Psycho.

[Pat]

Yeah, Like I said, new scum.

[Tom]

I mean, look. But even your friends, like, say this.

[Barry]

Oh, do they?

[Tom]

Yeah.

[Pat]

I'm gonna reevaluate my guest list.

[Barry]

I mean.

[Pat]

I mean, there was. There was a comedian that said a.

[Barry]

Literal comic book villain from central casting, Patrick Bateman vibes.

[Pat]

He definitely had someone killed or made. Watch his hand gesture. I'm glad I still have some humor left.

[Barry]

I mean, this is a rough business.

[Tom]

Yeah, it is.

[Pat]

This is a rough. Particularly if you're willing to fight. There's many.

[Tom]

I'm just a camper, rocking and rolling. You make of all the.

[Brandon]

Patrick.

[Pat]

Okay, so new California.

[Tom]

That was nervous laughter.

[Pat]

Yes. California voters allowed Democrats to redraw congressional map. Rob, is this it?

[Brandon]

Yes.

[Barry]

This is Fox News coverage, guys.

[Pat]

It's officially four on 52, I believe. Four on 50, I think. Go ahead, Rob.

[Tom]

The yes vote in particular with Prop 50.

[Brandon]

The reason voters said they voted yes on Prop 50, 82% of the case.

[Tom]

Eight out of 10 voters say it was to counter the GOP changes, not because they saw it was the best way to draw those district lines. Now, if you go back and look at those who said no to the vote, they said their reasoning to do so is that they saw this as.

[Brandon]

Not the best way to draw those district lines, while only 34% said it.

[Tom]

Was to stop the Democrats from adding seats in Congress. A couple other things we're taking away from what voters said there in California. We asked the voters and how they would actually like to see these lines drawn. The irony of this trace is that.

[Brandon]

9 out of 10 voters, even more.

[Tom]

So, said they'd see it.

[Brandon]

Like to see this done by a nonpartisan commission, not the party in power.

[Tom]

Well, that was preempted with the outcome of this vote.

[Brandon]

Wow.

[Tom]

This is crazy. Rob, do you have the chart.

[Pat]

There is a chart on this. Yes. You have to show this on how they did it and what corner they went to.

[Tom]

Okay.

[Pat]

Because once. Once this was done, the. You know, let me read this. And then while Tom is finding this. Once this was done, California's done, done when it comes down to ever becoming Republican, especially on the House side. But let me read this to you. California voters have easily approved a ballot measure to redraw the state's congressional map to favor Democrats according to a race called by ap marking the party's biggest victory to date in national battle of redistricting ahead of 2026 midterms. The measure, called Prop 50, will replace lines drawn by an independent commission with a map that could net Democrats as many as five new seats next year's House elections. Look at this number here. Look at that.

[Tom]

That's what happened.

[Pat]

California. Holy.

[Tom]

See what they did, they took up Northern California and they took the liberal coast and they see those lines and they took so the coastal weight. They obliterated all the northern farmers and they obliterated the area around Sacramento. And then down in San Diego, they basically made sure that the. The gains that were made by the Republicans down in San Diego, boom, they do it. And then you look at the rate change that was in Orange County.

[Barry]

Look at that.

[Tom]

There you go.

[Barry]

Wow.

[Tom]

F you.

[Brandon]

They need somebody who's a Republican to run as a Democrat and kind of fake everybody out like a trojan horse. I think that's only the only way to do it.

[Pat]

The only way to do it?

[Brandon]

Yeah. It's for like a fake. A fake Democratic.

[Pat]

So you come in, then what do you do?

[Brandon]

You start doing Republican things.

[Pat]

No, I get that. But what I'm saying, how are you going to pass them? You know, your House, you know what it's going to be. Do you know the numbers?

[Brandon]

Yeah, yeah. No, the House is like a super majority.

[Pat]

So how are you going to pass anything even if you act like a Democrat? You get in, but you're a Republican and you flip and say, all right, I'm a Republican.

[Tom]

I want to pass the following results by county.

[Pat]

I want to follow. I want to pass these following things. How are you going to do it?

[Brandon]

Yeah, there's going to be a limited amount of things you could do, but I think across the board, to people who are upset with this, they could run for Congress and like the local Congress and Senate and do the same thing. Like, you have to run for anything as a Democrat, even if you are a Republican. So across the board, from Governor To House, to Senate, within the state, to judges. Like it's the same thing you're saying. Yeah.

[Pat]

What are you gonna. Okay, go ahead, act. Trust me, I have.

[Tom]

Scroll up.

[Pat]

Tom, do you want to just text them? Tom, you just text them. You got your phone with them. Tell them what we want them to do. So do you realize when you think about what's going on right now, here's how I think they thought about it. Okay. I think, Tom, they did the following. I think Republicans sat there. Do you think phone call was made for Greg Abbott to redistrict Texas? Do you think that was an accidental. One day Greg Abbott woke up and said, let's redistrict Texas? What do you think?

[Barry]

No.

[Pat]

You think there was a phone call made and was strategic?

[Tom]

Every state.

[Barry]

Absolutely.

[Pat]

I agree.

[Tom]

Every state does it.

[Pat]

Okay. So here's a question, though.

[Brandon]

Watch.

[Pat]

The most important question I believe I'd be asking if I'm behind closed doors. You ready? All right, go. Five years ago, what is more likely to flip to the opposite side? Is it more likely for California to go from Democrat to Republican, or is it more likely for Texas to go from Republican to Democrat? Exactly.

[Tom]

It started in Austin.

[Pat]

Exactly. So you know what you do? You're like, guys, if I lock in Texas, and then they force. We were never gonna have California in first place anyways, so who cares? Do it. I think that's the way they looked at it. Let's lock in our biggest chip, which is what? Texas, and let them have California. I think that's truly how it was thought about, Tom, because if you understand what I'm saying, right?

[Brandon]

Yeah. Because Texas was vulnerable.

[Pat]

Yeah. It's not. Well, you know, we were gonna do. They were gonna do it anyways. Now Texas was. Was vulnerable. A lot of weird things was happening in Texas. So in a way, I'm willing to bet even people who live in Texas that were former California people. Listen, you know, how many. Tom, how many people would we run into in Texas that were from California? How often would we run into people?

[Tom]

Completely regular thing.

[Pat]

It was such a weird thing. Oh, yeah, we're from San Jose.

[Tom]

Oh, yeah.

[Pat]

We're from San Diego. Oh, yeah, we're from Northridge. Oh, yeah, we're from Pasadena. Seriously? Yeah. Why'd you move here? Same reason you moved here. Totally get it.

[Barry]

Guess where we saw most of Nevada is the other one that's.

[Pat]

Nevada is the other one that's. That's grown.

[Tom]

Remember where we saw most of them at our schools. Other parents.

[Pat]

That's right.

[Tom]

And oh, we brought our kids here and we're living here and we would meet them right at our schools.

[Pat]

Yeah. So. So to me, I think this redistricting thing that they did. Rob, can you flip on how many of them? Republic? I think it's 48 to 4. Rob, if you can find that one chart on what it looks like California. On. On representative. California representative. 48 to 4. No, by tomorrow. Midterms. By next year's midterms, I believe, because the ratio is what I'm looking at. There you go. That's the one. That's the one. California currently has 52 represent. 43 of them are Democrats, nine of them are Republicans. By next year, which Prop 50 passed, it'd be 48 to 4. By the way, do you know who had energy last night? Like, I haven't seen him have energy in a while. Who. Who is. Who is like, kind of like, all right, we're getting some momentum. Do you know who is kind of a newsome? Oh, let me tell you. Let me tell you how he sounded. He sounded looser. He sounded looser. You know who that is? Obama. Look at this clip here from Obama. Rob, if you want to play this, he see, he's smelling. He's like, okay, maybe this is a chance for me to come back. Maybe this is a chance where nobody. You got to realize they had a good night last night.

[Brandon]

Yeah.

[Pat]

If you're a Democrat, it was a phenomenal night for you last night.

[Barry]

But not necessarily totally unexpected either.

[Pat]

No, it was not necessarily unexpected. You're right. It's not like. Because everybody is saying, well, now, you know, it's going to be a blue wave for midterms. We don't know yet. We don't know yet. The reality of it is Crockett's going to be kicked out in Texas.

[Brandon]

Right.

[Pat]

And I believe, Tom, who is that guy's? Name? Is it from Fresno? Issa. Isa Derelict Derrolysa. I think he's going to be out, and he's a stud. So I think he's going to be out. I think Crockett's going to be out. I think they're both. Next move is going to be, maybe we go Senate, maybe we go play different roles. So it's going to be, go ahead and play this club. Rob, a year ago, I remember talking to folks who would tell me, this election doesn't matter. These are some well educated, bright, you know, people. They say, whoever the next president ends up being, it's not going to affect me. That's what they would say, if nothing.

[Brandon]

Else.

[Pat]

The last nine months should have cured us of that idea because the stakes are now clear. We don't need to speculate about the dangers to our democracy. They're here. We don't need to wonder if harm's gonna be done to. You can pause it right here. So. But look at his eyes, though. Look at his eyes, though. Yep. Go back one second, Rob, and look at his eyes. Play. I'll tell you exactly when to pause. Press play. Look at those eyes. Look at those eyes. You see those eyes. You've never seen Obama's eyes like that.

[Tom]

They kind of focused again.

[Pat]

They're focused. But I seek vengeance. I seek revenge and anger. I feel like he is been humiliated. Remember, the worst day of his life was November 4th of last year.

[Tom]

Oh my gosh.

[Pat]

I'm not saying mom, losing family, all this stuff, but the worst day of his life.

[Tom]

Political life.

[Pat]

Political life was November 4th of last year. Worst day. Because it proved he didn't have a voice. He has gone back, recreated himself, trying to find a way to come back. I don't know how much of that weight he's going to carry or not. I'm just saying he probably had a good night last night. He had a little bit more to be able to say. I told you. You know what, I was right. I think he's kind of going through it right now, Tom.

[Tom]

You know, it's really interesting. You know, you have, you have liberals and liberal headline writers. Democrats dent Trump's coalition with three big election victories. The Democrats had a very good night last night, a very good night. But I went and I looked at it and I said, well, how good? Let's look and say how good and what do we have to do in response? So I went and looked at, let's just take a look at the governor as they all talked about, hey, we got Democrat governors in New Jersey and Virginia. So I went in and I looked and I said, okay, Mickey versus Jack in New Jersey and Jack Ciatarelli, you know, he got a lot of support from Trump, a lot of support from Maga and some money. So Mickey Sherrill beat him 57, 42. Okay, so how did Trump do during the election? Well, Trump only got 46 during the election and Kamala Harris got 52. So 52, 46. So it's about a four point difference toward the Democrats. Do you see what I'm talking about, Pat? But guess what? In New Jersey over the last 30 years, only Chris Christie was the Republican governor. Only Chris Christie And Phil Murphy's been since 2018. So coming up on nine years. So, okay, so you dented Trump's coalition. We've never had a Republican governor in New Jersey, with the exception of Chris Christie over the last 32 years.

[Barry]

Before that, married Todd Whitman.

[Tom]

But, yeah, yeah, but now you're going back how many presidents?

[Barry]

Five of them.

[Tom]

Right. Christine Todd Whitman, 94 to 2000. Now you go back 40 years, almost 50. So then it went to Virginia. I said, okay, how bad was this in Virginia? Virginia, Listen to these numbers. They're almost the same. Spanberger defeated winsome Sears, 57 to 43. Almost the same, like within a half a point. And during the election, it was 46, Kamala Harris and 52 Trump, almost the same. So it's five points different. Four and a half points, actually, for Trump right now, which shows you. And by the way, only, only Glenn Youngkin, who became governor and then term limited out, he's termed out right now, term limits. And he came there because Terry McAuliffe tried to come back and be governor again and opened his mouth and said, parents shouldn't control their kids. We will control them from the schools. And he said that two weeks before the election. And then everybody who goes, wait a minute, that's. That's your plan? And they voted. And Glenn Youngkin beat him by a whisker. He was the only Republican. And it took parents flipping out and a horrible gaffe by Terry McAuliffe to do it, because you now you have to go all the way back to 2002. Mark Warner, only a guy named Bob McDonald for six years was a Republican governor. So these have always been, with a couple small exceptions, Democrat governor seats going back 30 years. So. And the margin wasn't that far off from the presidential election. So what it tells me is this is still tight. But the Republicans did not put up a good candidate in Virginia. Not at all. And the MAGA and president support didn't get you over the line in New Jersey, which means, Pat, we've got work to do. And you know what? The number one a thing that the voters talked about. Echo the raging Cajun. They said it was life affordability, led by housing. Life affordability was number one. So we need the president's jobs to happen. We need that $1.5 trillion that's being spent by companies to build factories and give opportunity here in America to happen, so the jobs can, can come out of that. That's what we need. And I think 26 is going to be good. But I'm not spinning it. The Republicans have got work to do, conservatives have got work to do. And we can't just sit back and say, oh boy, I can't wait to see what happens in New York. Everybody's going to not like that and then we're going to get a Republican governor. I think that will happen. But there's a lot of work to be done here. But it's not, this was not the bloodbath. People are saying, but no spin. There's work to do.

[Barry]

Well, make a great point. And that's why the President's so focused on bringing interest rates down. And that's why it's so dangerous that the Fed is.

[Tom]

Makes it cheaper to build.

[Barry]

That's correct. And not only that, but cheaper to take out a mortgage. I mean, cheaper to buy things. So that's why it's so dangerous that the Fed is so obsessed with inflation incorrectly. Not just those points, but there's something else that influences the Fed that they completely got it wrong on. And I don't even know if the Fed knows this. The University of Michigan, as you know, is considered to be one of the gold standards on surveys. And the Fed looks at this, it's influenced by it. So they do a survey on inflation and the most recent University of Michigan survey on inflation showed that they see the future expectation at 4.6%, which is really, really high compared to even if you look at the 2.9, which is overstated now, we know this country may be 50, 50 Democrat Republicans. So you should survey 50, 50. And in the past they have, however, in the most recent survey that showed 4.6, they took 65% of the respondents.

[Pat]

Can they do that?

[Barry]

I guess they could do whatever they want. Especially 65% was Democrats, 65% Democrat, 35% Republican. But here's the key. Republicans see inflation future expectation as 1.5. Democrats see it as 5.0.1%. It's a huge difference right now. When you, when, if you were to say, okay, let's just split the difference. Representative, where the country, oh, by the way, 4% of those Democratic respondents said inflation is going to be 30%. So it really skewed the numbers higher.

[Tom]

So when you currently vacationing here from.

[Brandon]

Argentina, both those numbers are the 4.6 and the 1.5, I think are both ridiculous.

[Barry]

Yeah, yeah. So, so when you, when you look at what it would be if we took a 5050 representation, it'd be 3.3%. But then the Fed would be saying, okay, well, 3.3, not that far off. But if they see 4.6, that's why you get people being obsessed. Inflation's too high, inflation's too high, inflation's too high. This is what influences monetary policy and unfortunately makes it expensive for us, unduly expensive for us in the way we pay for things.

[Brandon]

What do you think the rate would be if the Fed had no input at all, if it was just treated like the 10 year Treasury? Because I often wonder what would happen if the market was the one that determined the rate of borrowing.

[Barry]

Well, you could make an argument that we don't need a Fed.

[Brandon]

I don't think we do.

[Barry]

If you go back to 1913 when the Fed was created, is because I guess the government kept getting tired of going to people like JP Morgan to save us and bail us out.

[Brandon]

Who was the one causing the problem in the first place?

[Barry]

You could be exactly right. But I believe that that was the purpose of why we have that. And at times the Fed has really done a good thing for keeping stability for us. Certainly during COVID that was probably a good thing to have the Fed, but they have done a lot of damage post Covid, keeping rates too low, creating being complicit in causing inflation to rise further than it should have, keeping rates too high.

[Brandon]

Now I think you could track every bubble and crash to them though because like look at 2008, they cut to try to rebuild from 2001 and they led to that. So they tried and then they baby the extra economy from post 08 to.

[Barry]

2020 analogous to driving down the freeway. But looking in the rearview mirror, it's dangerous because they just look at old data. They do not do a good job of looking through the windshield and seeing what's coming.

[Tom]

Well, I'm a bull, not a bear. I think the future looks bright and it's got to unfold, but there's work to do.

[Pat]

Yeah, I'm with you as well. Well, there's a lot of politics covered today on Wednesday, business Wednesday, simply because the election was won last night and it was done so we couldn't skip it and go till Friday because a lot of people wanted us to talk about it. But having said that, Barry, great having you on, buddy. This was great. Appreciate your insight.

[Barry]

It's been wonderful.

[Pat]

You're great. And gang, everybody else, if you haven't yet registered for business planning workshop, please do so. Make sure to go to the link below that we have. And everybody else, we are back on. Rob, do we have anything going on tomorrow? Is it Friday? Friday we'll be back on again on Friday. Home team. Take care, everybody. God bless. Bye, bye. Bye, bye.