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Trump's Credit Card CAP, Musk's Iran Move, 50% OnlyFans Tax + Efran Soltani Execution | PBD Podcast | Ep. 718
02:04:21
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- [00:01]
Tom
Did you ever think you were made? I feel I'm supposed I could take sweet victory. I know this life for me.
- [00:09]
Pat
Adam, what's your point? The future looks bright.
- [00:13]
Mark
My handshake is better than anything I ever saw.
- [00:16]
Tom
It's right here.
- [00:18]
Pat
You are a one of one.
- [00:18]
Tom
My son's right about I think I said this.
- [00:26]
Pat
Okay, gang, great to be with you guys. Business Wednesdays today. A lot of stories to cover. A number was dropped on bnpl. How catastrophic it's looking right now for BNPL and specifically Gen Z. Tom's got an entire report on it. We got a special guest with us here, Mark, who has a YouTube channel himself. Mark, you got about what you got a million subscribers Almost.
- [00:48]
Mark
We're getting there.
- [00:49]
Pat
Million subscribers.
- [00:49]
Mark
Maybe this will help.
- [00:50]
Pat
Yeah, well, listen, you, you are helping yourself, you know, as a guy that's doing a great job. We've been watching you for, for a while. Brandon always would rave about you. And we met at the Manective and at Soho House. So we're excited about Mark Moss's views today on, on different things.
- [01:05]
Mark
Thank you.
- [01:05]
Pat
But let's go through some of the stories, some of the stories that we got. So NPR reports yesterday, 2500 people, Iranians, civilians killed by the government. CBS says 12,500. We'll definitely get into that. Trump says any country doing business with Iran will face a 25% U.S. tariff. Last time they did this, Iran was suffocating. They're already suffocating the government. It's about to get even worse. Google co founder Sergey Brin joins California Exodus. And he's another one of those billionaires that left as well. And remember Chamat said there's about a half a trillion dollars of net worth of business owners in the state of California that are leaving. So he's one of those half a trillion dollar guys that he was talking about. And then there's nothing we can do. The great millennial career crisis has workers given up on ever owning homes or paying off their student loans. You know, this is Brandon's story. He wants to talk about this because, you know, he's not happy with affordability. We'll definitely cover that. Probably the best story that I have here is what Argentina did with the two and a half billion dollars. If you guys remember, America's going to bail out Argentina. I told you these capitalistic ideas are not going to work. It's a bunch of bs. Well, guess what, he just returned the two and a half billion dollars yesterday. I'm like, wait, what? He returned it? We'll cover that as well today on the Argentina story. This next one is a little bit disappointing because I, I want to see this happen. Nissan cancels the Versa, America's last new car for under $20,000 as automakers lean toward wealthier buyers. Trump vows to slash mortgage rates, revive American dream while blaming Biden housing failures. And a truth post will address that. Trump to bring Musk in for key Iran mission. I believe they're starting to realize that Elon's got a tool that everybody needs. He's becoming a linchpin with his Starlink technology that he has. And then Trump floats 1 year 10% credit card interest rate cap. What could that mean for your money? Last night we're having dinner, Tom and I with four investment bankers and advisors from JPMorgan Chase. And this was one of the topic of discussion of what happens if you cap credit card rates at 10%. Does it help the people you want to help or does it hurt the people you want to help and help the people that don't need help? I don't know if that makes sense. We're going to talk about this whole credit card situation. Bill Ackman didn't think it's a good idea. He tweeted about it. Then apparently what Tom was sharing with me is he took the tweet down. Nobody knows why Wall street on edge after Trump takes aim at credit cards, home buying and then how American high schools are teaching capitalism. This is a little bit of a serious issue to be talking about because if kids are coming out of high school, spending all this time with their teachers. Last night my health and guidance teacher from 14 years old wrote me a letter. Every three months I get a letter. We're pen pals. Today she wrote me a letter. Everything politically, if she only knew how complete opposite sides we're in. But we absolutely love each other when we have this relationship. But how American high schools are teaching capitalism. Do you really think school teachers are sitting out there teaching kids how awesome capitalism is, or do you think they're bashing it? This is the lowest percentage of support we've had from Young Gen Z on capitalism ever in the history of America. The percentage isn't high. You'll see the numbers there as we get into it. Canadian trips to U.S. plunge 28%. That's a real number in 2025amid Trump's tariffs. 51st state jobs. I know, Mark, you talk about tariffs a lot, so we'll come to you on that as well. Americans just spent a record $20 billion with buy now, pay later. Here's what to do if you overdid it. By the way, this is a real, real issue that we need to talk about because again, affordability. Wait till you see the numbers on what percentage of Gen Z's are making even the first payment after they bought something from the holiday season. The number is scary to say the least. Tom's got some charts to show you guys. Their escrow payments rising nationwide. With homeownership less attainable the dream of a Florida retirement is fading for the middle class. Paramount plows proxy fight to push hostile War Warner bid and it doesn't look like those guys want to sell to Paramount. I don't know if they want Ellison as a buyer. They keep lobbying for Netflix to buy them. Something's going on behind closed doors there we don't know about. Gold Silver hit record high as inflation data cements fed rate cut bets Mark, this is your specialty. We'll come to you with that as well. Mike Tomlin I just, I just put this out there. We got to say this. I mean for a guy that loves Mike Tomlin, I think he's a phenomenal coach. Hasn't won a playoff game in the last nine years. So he's being criticized ending 19 year run with the Steelers which some are happy about it, some are not. I think the guy's going to pick up a job within half a second. Whether he chooses to be a coach or goes and becomes one of these commentators, I think he's going to do a great job. What the US withdrawal from the 66 international bodies means for American business. And last but not least, Meta cuts more than a thousand in bay area tech. First big tech layoff of 2026. For those of you that run small businesses this is one thing that most people are not aware of. We run a consulting firm ourself called Bet David Consulting where we do engagements with around 10,000 businesses from 60 plus countries around the world. And this is 75% of our business. It's one of the best kept secrets we have in our company that no one knows about. If you come to our office and you see how we grew nine employees just a couple years ago to now 165 full time employees. And if you go downstairs on where bed David Consulting is at, the energy there is electrifying if you're a small business owner yourself, anywhere between 10 million plus half a billion dollar revenue. If you're on that range and you want to find a way to get strategies because each phase of a company goes through five phases and each phase you have five challenges you face. If you want to know what those things are, go to bitdavid.com all the way to the bottom. Fill out the information. We'll give you that 18 minute breakdown of what those five by five are and then if there's a way we can help you take your business to the next level. Whether you're raising capital, whether you have a compensation plan that needs to be readjusted. We just had the most incredible meeting last week with our firm on Tuesday and on Thursday. Whether it's comp, whether it's LTIP equity, whether it's expanding in a new market. Regulation marketing podcast, different ways of getting your story out there. You want to learn more about how we can help you out, go to bitdavid.com fill out your information. One of our consultants at the firm will get a hold of you. Having said that, Mark, if you don't mind taking a minute share with the audience your background. That'd be great.
- [08:02]
Mark
Yeah, thanks. I'm from Southern California like you and I cut my teeth buying bank owned reposition right out of high school bank in the, in the mid-90s the banks were sitting on a glut of, of repos after the housing crash in California from like 89 to 92 and they were giving away zero down and so I was fixing and flipping them and up in a young white boy up in south central Compton, Watts and yeah, that, that's what we did. That's, that's what we did and stayed out of Compton. I built up two different tech companies, A high tech medical equipment company, Internet company that I started in 2001 after the dot com crash, got laughed out of two big exits. But then 2008 came and when I got knocked over the head, let's just say right, I was all in Cal, Southern California real estate, which is one of the worst markets in the world. It made me go shoot, I'm pretty good at business. I made a lot of money. I've had some big exits, I've built some big companies. But what is this global financial system that just has all this power over my life and I'm not even paying attention to it. So after dusting myself off and vowing to my wife that this would never happen to us again, then I've spent the last, whatever now 12, 15 years digging into macroeconomics and understand the financial system and I quickly understood that it's fiat currency and the over leverage in the debt system and I became a gold bug and Then I became a bitcoin guy and now I'm a sound money advocate and I've been now talking about bitcoin and, and macroeconomics, you know, on YouTube, as you mentioned earlier, for about seven, eight years now, speaking on big conferences. I have a venture capital fund, we fund bitcoin companies. I sit on the board of two publicly traded bitcoin companies and just trying to spread wealth and respect. Yeah.
- [09:40]
Pat
And more importantly, married 22.
- [09:42]
Mark
Married 22 years, had 22, beautiful respect.
- [09:45]
Pat
So all around winner. It's great to have you on, buddy. Very good to have you on. Okay, let's get right into it. Argentina is the first one I want to get into. And Tom, I'm coming to you with this one. Argentina folks has repaid US for currency swap deal. If you remember when this was first taking place, everybody was saying you guys got behind me lay you thought this was a good idea. It's a horrible idea. There's no way this is going to work. Where me came out and repaid the United States for currency swap framework it provided to the South American country last year to stabilize the economy. The US Treasury, Scott Besant and Argentina Central bank said on Friday. Rob, is that the tweet that you have? I am pleased to announce that reflecting its strengthened financial position, Argentina has both quickly and fully repaid its limit limited draw on the swap facility with the US Such that the Exchange Stabilization Stabilization Fund currently does not hold any pesos. Besant said in a post on X. We look forward to continuing our enthusiastic support of President Milei and Argentina. He added. Again, this is Scott Besant. In a separate post, Argentina Central bank added that it had settled the swap line in December, two months after it was announced. According to local newspaper La Nancy on two and a half billion dollars of a possible $20 billion had been used in that time. A source with knowledge of the matter told Reuters that the agreement remained in force under the agreed terms. Tom, what happened here? Why is this such a big deal?
- [11:19]
Tom
This is a big deal because do you remember when all the banks were being asked, oh yeah, would you like to do this deal with Argentina? And Trump opened it up to the US Banks and all the US Banks says, well, we would want a backstop. Well, what a backstop is is someone's gonna stand good for the loan. And so all these US banks were really asking you, me, all of us, US taxpayer in the form of the US government to be the backstop for this $20 billion for Argentina. Meanwhile, Milei was down there, got inflation under Control. You remember him with the chainsaw and the whole thing running? Well, he went from the chainsaw to the pen and it was ofuera like I'm getting, which I think means kill it off, take it up. And it was like, okay, Department of Nothingness and Trees. Afuera. Remember he took all those labels off the board and said, this is the government we need. We need defense, we need police, we need fire, we need pension for our people. We need a working government. All the rest of this stuff afuera. Well, then he went to the US Government and says, hey, getting this under control, to float the peso, you know, we need a little bit of liquidity. We need several billion dollars of liquidity. We. So this was a currency support line that the US banks didn't want to do. And so instead it got done through IMF and the US government. And guess what? They only needed two and a half billion of the 20 billion line, number one. And number two, they stabilized the peso with the IMF, International Monetary Fund. And now Besant comes out and says, by the way, all of you who doubted, it's working. So what Bessen is really saying, it's working. Inflation is down. They've stabilized the peso. They want to make a fund where the peso will peg with the dollar on a more consistent basis. And Bessen is saying, and by the way, ladies and gentlemen, the American taxpayer made tens of millions of dollars in interest on the two and a half billion over the amount of time that the loan was dating back to the election they had end of last year in Argentina. So this is a big deal, Pat. This is the kind intervention that's good. You're not your intervention. Hey, I need a loan to help myself and I need this. And you find great leaders with a reliable risk and you do it. And then the taxpayer gets paid back. So this isn't just foreign aid going into a bucket somewhere and never to be seen again. And so this is no less than Scott Besant saying, hey, it worked. It worked for Argentina, it worked for Malay, and it's worked for the American taxpayer. And we've been paid back.
- [13:59]
Pat
Let me tell you why I think this is a big deal. And Mark, I'm gonna come to you, I wanna hear your thoughts on this. You know why this is a big deal? When I looked into it is imagine you go to a guy. Do you have that one person that every time they borrow money from you, they've never paid? Think about that person. Everybody has that friend, right? You may be that Friend to somebody. But we all have somebody that never pays back the debt. Right. You're watching and say, man, I'm kind of that person. Or it's Johnny, my cousin, my brother, whatever. Argentina was that person. They came, they got debt 82, they never paid it back. They defaulted. 89 defaulted, never paid back. All one defaulted, didn't pay back. And it happened two more times. So the entire world looks at Argentina and says, this is the one country that if you give them money, guess what, never expected back to. And then all of a sudden, boom, here's your money back. Wait, what? To pay it back, the two and a half billion portion of it. And to do it this fast, their credibility went to the roof. He gets in inflation, I think is at 200%. Now it's at 31 and a half percent. He's telling the entire country we're not going to be printing money. I think as an operator, the world is now looking around, looking at countries that if you can lend them some money to make interest and expect that money to be back. I think Argentina officially moved from one bucket to that. Nobody trusted to give money over here. And I think that's a very, very big thing that's happening to Melee. Mark, your thoughts on this?
- [15:19]
Mark
Yeah, I can see the initial pushback on this with it's just more government intervention. And so there's a knee jerk reaction to that. And I understand that. But to the point that you made about Melee and what he's done in Argentina, I mean, a complete turnaround. I mean, what he's been able to do in a short period of time is nothing short of a miracle. But really what I think is when I look at this is I just look at the absolute competence in the Trump administration. Scott Besant is a complete surgeon. He understands rates, he understands currencies, he understands swaps. And think about the competence that we have in the administration compared to previous administrations that we've had. And for him to be able, with his expertise, Right. Helping George Soros break currencies, he understands currencies, he was able to help a country out, a country that needs the help, benefit the United States taxpayer, the United States citizens. And so, you know, all in all, I think it's a really good deal.
- [16:09]
Pat
Yeah. By the way, what a great hire. Right? At first, when everybody heard Scott Besant, you're like, wait, what? Who is this guy? And the more and more you listen to him, you're like, this is a very qualified guy. He's been the right guy on my list. Of guys, the executive that's been hired, he's probably number two or number one on the list of doing a great job so far. Brandon, your thoughts on this?
- [16:31]
Brandon
Yeah, it's like the concept of good debt versus bad debt. It's not like we're just giving them money just because they need it. Like it's an emergency situation. We don't know what they're going to do with it. It's like a credit line for a business. There's a reason that most businesses will take out a line of credit so they could operate and then pay their expenses and then they'll make enough money to pay it back quickly. So it's, it's like the concept of taking out line of credit to do something productive rather than taking out a loan where you don't know what's. If it's going to be used for something productive. So yeah, no, I'm all for it. That's what the swap lines are created for in the first place. I believe like after 2008, we set up those swap lines so we could inject money into Europe or other places around the world if need be. So yeah, I think it's really important that we keep this anti or counter socialism movement going in South America. Like so, you know, we got Argentina now, now we got so important Venezuela. Right. So one by one, hopefully we de socialize or de socialism. South America.
- [17:21]
Pat
Yeah. You know, you know what's crazy when you, when you think about this? Taxes were supposed to be this way in 1860 something. 1861, when Civil War comes to an end and Lincoln needs money, we're in debt. We're in debt a lot. He goes to the American people and says, listen guys, we need to create a tax. You guys got to pay us and help us out. So he creates a progressive tax. Rob, can you pull up? Was it a flat tax? It was a. I thought it was three tiers or something like that. The 1861 tax was a flat tax, 3% on incomes over $800. And then the later modified. Okay, there you go. Later modified to progressive tax. You know what happened with this? They said we need to pay this off and we're going to put this tax until we pay off the debt. How long do you think that tax lasted? Seven years. Seven years later, after it was paid off, they eliminated the taxes. This is how taxes were before. Today, God forbid they launch a new tax. It is never going away. They're just going to raise it. This is why a lot of billionaires from California are Escaping? No, in California just wants to tax people to death. Let me go to the next one here. Something that's happening that is not necessarily taxes but it's really hurting a lot of different people. Is this BNPL concept Buy Now Pay later concept that is hurting a lot of people? This one story I want to read to you Rob, what page is that BNPL on? There it is. It's on page 11. Americans just spent a record $20 billion with buy now Pay Later. Here's what to do if you overdid overdid it yourself. Now I'll read this story. I'm going to give you the quick tips he gives in the article. This is a Market watch story. As 2026 gets underway, some consumers are facing overwhelming debt. This is especially true for those who took out multiple Buy now pay later loans to cover their holiday shop in a move known as stacking. And more people are using the loans and than ever before, shoppers use the Buy now pay later spend a record $20 billion from November 1 to December 31. According to Adobe 2025 holiday shopping trend reports 9.8% increase from 2024. BNPL typically comes in a form of pay in four loans that don't charge traditional interest, although the late fees can be charged if a payment is missed. Lenders say the option expands access to people who are underserved by traditional credit. But critics say it can lead to worrisome debt accumulation. Tom, why is this so concerning? I know you have some charts on how late people are on payments, but why is it so concerning to you?
- [19:58]
Tom
So you have to go and kind of go upstream a minute and look at it in the middle of the COVID crisis. I don't know if we have this chart. The credit card debt in America reached $777 billion as people paid off a lot of it. And I think that was right. Q2. There it is. Q2, 2021 we hit 777. The sharp drop down was because A we weren't shopping. We were locked in our homes. We had lockdowns and everything going. B people took 1400, 1500, seventeen hundred dollar payments from the government pat and paid down their credit cards. So all of a sudden here we are Q1, 2021. We are at $777 billion that has gone up since we were all allowed to go back outside and play. We are now at an all time high of $1.26 billion as we have.
- [20:56]
Pat
The first trillion dollars trillion.
- [20:58]
Tom
1.6 trillion as we are in the first week of 2026. So that's what's going on with credit card debt.
- [21:05]
Pat
That's a scary sight just looking at that.
- [21:07]
Tom
Correct. But now here's what happens. Along comes bnpl. And BNPL isn't on your credit report. Well, it wasn't on your credit report. Whenever you have your credit report run, the industry uses what's called FICO 8. That's how they look at your credit report. And if you're parent paying Lifelock or somebody, they say hey, there's been an inquiry on your credit report. Boom. Meanwhile, over the same amount of time, while America is maxing out its credit card Pat, look what happens to growth of bnpl. So people's credit cards were maxed out, but they still.
- [21:42]
Pat
This is a number of users because I can barely read it says number of users on the left, right?
- [21:46]
Tom
Correct. Okay, so this is basically the number of users of BNPL shoots up like a rocket. At the same time, credit card debt is going up to 1.26 trillion where it is today. And there was calls in Washington that says hey, BNPL needs to be put on people's credit reports because we want to kind of protect some consumers need to be protected from themselves. And the only one, a firm said okay, I will let you know what my pay in four statistics are pay in four months. A firm agreed to do it. FICO created what's called the FICO score 10 which includes BMPL. Affirm was good Klarna and afterpay said no, we don't want to report it. The reason they don't want to report it is because if there's a FICO score out there and there's a way to regulate it, then all of a sudden people wouldn't use it. And Klarna and afterpay wanted people to keep using it. Well, what happens? Guess what? Credit cards are maxed. This isn't on your credit report. You go into Best Buy, you want to buy that 4K TV for 1000 bucks, they'll say hey, just put on Klarna. Sign here, do Klarna. Well guess what? 63% of BNPL users over the last 24 months, PAT now have multiple BNPL accounts. Number one, 41% of BNPL users missed at least one on time payment last year. 41%, 41% of all BNPL users.
- [23:19]
Pat
This is not the youth. This is anybody and everybody that uses everybody.
- [23:22]
Tom
Everybody last year missed at least one payment. And it gets worse when we go to the youth. Gen Z, the reporting on Gen z is horrifying. 50% of Gen Z BNPO users missed one payment since holiday spending. That's three months ago. November, December, January. In the last 90 days, 50% of Gen Z have missed one payment.
- [23:48]
Pat
So now what is the. There is a concept that when you miss a payment, doesn't it like the interest goes to the roof or the fee is an extremely high fee.
- [23:58]
Tom
You miss a payment, it's wham bam and this thing becomes. Your foot is in the bear trap.
- [24:04]
Pat
Yeah, but what does that mean? Wham bam? I want to know exactly what wham bam means.
- [24:07]
Tom
My understanding is that suddenly you're on an equivalent of a 30% a year.
- [24:11]
Pat
That's exactly what I was thinking about. So I was thinking, Rob, can you pull up on ChatGPT what happens to BMPLs when you miss the first payment? What happens to the results?
- [24:22]
Tom
They'll say oh it's just 2% of balance, but you got to multiply that times 24.
- [24:26]
Pat
Yeah, 12.
- [24:26]
Brandon
It ends up being worse than credit cards if you miss a balance and they make it really sneaky. I remember we uncovered that before you're.
- [24:33]
Pat
Usually charged a late fee. Okay so at after pay Klarna zip late fee kicks in quickly after a few days. Some cap total late fees per order. Affirm. No late fee. Your account is often frozen instantly block you from making new purchases. Your credit profile may be impacted. Providers that report to credit bureaus in many cases affirm. Oh, they're now reporting now Klarna affirm.
- [24:57]
Tom
And so some plans they report see that affirm reports Klarna is not reporting across the board and not reporting to all agencies.
- [25:04]
Pat
So why don't they though?
- [25:07]
Tom
Hey, if I'm Klarna I don't really want this on the credit report because I'm plan B and I want people to take the risk on plan B of their own free will.
- [25:17]
Pat
Yeah, it's. It's a funny business model. Mark, where are you at with this?
- [25:21]
Mark
Well, a couple things. So first of all, when we look at the credit card debt going up, we have to take into account consideration of the inflation and not just the CPI inflation, but the increase in the money supply. So I see here it's gone up by 9.87 or 9.8% since 2024. BNPL B BNP BNPL use so 9.8 since 2024 but the money supply has increased faster than that. So when we look at sheer numbers we have to take that into consideration first of all. But what I would say to this is it Sort of kind of goes back to two things. Number one, we, you, you reference some of the news. We're going to talk about one, Trump capping rates. And so when lending restrictions get tightened, people will turn to options like this. So you cut out, you cut rates at 10% on credit cards, people are going to go to loan sharks, number one. Number two, the way I think about it is you also mention credit balance. What's that?
- [26:08]
Tom
Or they run out of credit balance or credit balance.
- [26:10]
Mark
But the other thing I want to go back to, as you referenced earlier, a new story to get to later, the education system and capitalism. And if people were taught how to use debt in a good way. You mentioned good debt versus bad debt. And so we are in a debt based system, we're in a credit based system. And so we use debt to grow. Donald Trump was the king of debt before becoming the president. But if you don't learn how to use it properly, it can become extremely dangerous. If you use it properly, it's extremely powerful. So I just see a failure in the education system, first of all, I see a failure in the banking system and people are turning to this, but overall, yeah, it can end up bad.
- [26:50]
Pat
Brandon, where are you at with this?
- [26:51]
Brandon
You know, it's amazing how it's so much more difficult a lot of times to get something as simple as a small business loan with a solid plan versus being able to have access to, you know, 20 to $50,000 worth of credit card debt to, you know, do frivolous shopping with. I mean, I never really thought of it like that, but it's crazy. Like, it is a much more complicated process to take out a small business loan than to get a few credit cards. But it's unfortunate like that. Like, I always complain about government regulation, but now here, this is an example of what happens like, and why the government sometimes has to get involved and protect people because of the, I guess, like incompetence of some people and like the predatory nature of certain companies to put people in a situation like this. Because, yeah, these, these are credit cards or loan sharks or they're probably more expensive than paying off a credit card. When you really boil it down, I remember the rates you get up to like 50 sometimes if you miss a few payments. So, so, yeah, it's a, it's a disaster. And.
- [27:50]
Mark
But is it the government's job to protect people or are they.
- [27:52]
Brandon
No.
- [27:53]
Mark
To read the paperwork and understand what they're signing?
- [27:55]
Brandon
I guess you could say that. Survival of the fist to a degree.
- [27:58]
Pat
But I agree With Mark. Yeah, I agree with Mark, but please, Mark, finish it.
- [28:02]
Mark
Because if they're not going to get this, they're not going to read the paperwork and they're not going to read the fine print that's on them. And if they don't get it there, the government protects them from getting it. They'll go to the back alley and they're going to get it from the loan shark and they're going to get their legs broken. So it's like they're going to take the risk either way. At least it's disclosed and it's transparent. And like again, it should be on them to be smart enough to understand what they're signing. They can take that contract and run through ChatGPT right today. I mean, there is no excuse for the ignorance of that.
- [28:27]
Tom
No, I agree with that. And I think the, one of the good things of the Consumer Protection Bureau is to ensure that there is fine print.
- [28:33]
Mark
Right?
- [28:34]
Tom
But I think fine print needs to be regulated because there's what's called plain talk. Fine print and plain talk summaries I believe in, where you have to pat right there at the top the plain talk summary. Like when you get a car loan, plain talk, you're getting this much loan, you will pay this much interest. The vehicle will ultimately cause this, it costs this, and this will be your payment for these many months. Boom. And here's your interest rate. I believe in those plain talk summaries, but it should be on the consumer to read it. But I like the fact that we force companies to, hey, put the plain talk at the top and then the consumer makes the decision.
- [29:05]
Pat
Make the decision for yourself. Yeah, I like that part. But tomorrow, you know, it's the weirdest thing I'm looking at. So, Rob, can you do me a favor? Go on chat gbt, ask this question. What is the market cap of top BMPO companies the last five years? Okay. Now I want to know if they're going up or if they're going down because I want to know what patterns will notice if to me, what it says. Here is a firm which is one of them. They went public since January of 2021. Look at this. January 2021, $28 billion is early 2021 peak. Look at 2022 post pandemic drop, it drops to $2.8 billion market cap.
- [29:46]
Tom
Nobody was shopping.
- [29:47]
Pat
Yeah, nobody was shopping. Then it goes to 14.8 and 20 billion, then 25 billion. It is still not back up to the 28 billion it was when they went out in 2021. So then if you go a little bit lower, that's affirm. Go to the next one. After pay. 2025 block. Overall market cap has been reported around 49, $42 billion. Okay. Pre 2022after pay, market cap was initially 30 billion. Okay, so it's gone up, say 40%, right? Exactly 40%. From 30 billion to 42 billion. Go a little bit lower. Klarna went from $45 billion valuation in 2021 peak. This is when they were private. 2022, still private. They go to 6.7 billion IPO, 2025, 15.1 billion. And now it's roughly 11 to $12 billion. Now here, here's the. What this makes me think about. Do I think this is something that's going to be around 20 years from now? Maybe, maybe not. I don't know. And the reason why I'm asking this is. Remember when everybody was looking at how fast Groupon was blowing up and there was another company, Living Social? Yeah, Living Social. Like Living Social, Tom. We even had a meeting one time in Woodland hills, California, in 2011, 2012, that we were gonna launch our own Groupon Living Social. Do you remember the name of it? Let me see if you remember the name of it. Do you remember the name of it? If you remember the name of it. Dinners on me towns.
- [31:16]
Tom
I do not remember that.
- [31:17]
Pat
It was called Goody Squad.
- [31:18]
Tom
Oh, Goody Squad.
- [31:19]
Pat
It's called Goody Squad Squad. We had all these, you know, personalities and this. Remember I had this meeting, I brought all of you guys in. It was like a CEO of a massive insurance company. Yes, yes. So we had this thing we're going to do, Goody Squad. And everybody's looking at me saying, yeah, I don't know about it. We never ended up doing anything with it. But. But the point is, is this a Groupon, you know, hype that it's coming out? It's going to be great, and then it's going to go away? I don't know. All I can tell you is parents, wherever you are, okay, parents, talk to your kids. They're going off to college. They're 18 years old. They can apply to this stuff. It's horrible for them. Horrible. If you can't afford to buy it, do not buy it. Sometimes the most basic principles are making a comeback. Yeah, look at this. This is Groupon. Look what Groupon was at at one point. What is that date, Rob?
- [32:08]
Tom
November 2011.
- [32:09]
Pat
Oh, that's the date. I just said 11. 2012. November two the guy's on the COVID of Fortune magazine, Forbes magazine, everybody. He was offered for someone to buy his company for $6 billion. He turned it down.
- [32:24]
Tom
Google offered it and they wanted the consumer data.
- [32:27]
Pat
Google offered IT to buy at 6 billion. What is the market cap of right there. Look at that. Go back to that article. Go back to that article. Ten years ago, Groupon turned down Google $6 billion offer. Here's what happened ever since. They have a nice little conference room now. Go a little bit lower, Rob. Go a little bit low. What happened to them since? Zoom in.
- [32:45]
Tom
Half a billion dollars right now.
- [32:46]
Pat
What is the market cap? The rejection came during head heady times for Groupon which launched in 08 with a 241-pizza deal at Chicago bar, quickly became Chicago's tech darling. By 2010 it had grown to 1500 Chicago area employees. Go a little bit low. Ramp what? I want to know what the market cap of Groupon is today. What is the market cap? What does it say? Mark? 654. $6 billion opportunity. Oh my. To 6:54, Rob. What is their revenue? Just type their revenue. What is Groupon's 2025 revenue? Is what I care about. I want to know actually what kind of numbers they're bringing in today. 2025 revenue. Can you, can you do me a favor also run a poll. Still not a bad revenue. By the way, Half a billion, it's not bad revenue. They're still pulling in a half a billion dollars. Can you do me a favor, Rob? Ask a question on run this poll. Who still, who has used Groupon in the last 12 months? Ask the question. In a poll, who has used Groupon? Groupon. Has anybody here used Groupon last 12 months? Have you used Groupon, Mike? Have you touched Groupon? You have? Where was it at? Massage parlor. Used Groupon. Wow. Okay. Well I guess that makes sense. By the way, this is brought to you by that massage parlor. We're gonna put the link to their website.
- [34:13]
Mark
I know my wife used to use it all the time and I never hear it. A lot of people use more and I think what I, what I've heard is the retailers really found out that it wasn't really a way to get good long term business. So they were selling all the lost leaders. But then they never recoup the difference of the lost leaders.
- [34:28]
Pat
The business owner. The business owner.
- [34:30]
Mark
So I think the appetite went down from the business owners and I think that was a big drawdown on that.
- [34:35]
Pat
So it benefited the customer but it didn't benefit the Business owner, but even.
- [34:39]
Mark
From the customer, they didn't really establish relationships with the retail establishment. So for example, they went to the massage or whatever, they went to get the Botox, but they would just chase the best deal and they wouldn't actually develop a relationship with that provider. And so I don't think either party really benefited. Didn't turn into a long term plan. But back to the bnpl, I think it will have staying power because people are always going to need to borrow money.
- [35:01]
Pat
That's my worry.
- [35:03]
Mark
The need to borrow money will always be. There's always going to people who have money that want to loan it.
- [35:07]
Pat
Yeah.
- [35:07]
Mark
And there's always going to be people that need to borrow it.
- [35:09]
Pat
I think you're right. I hate to say it, but I think you're right and, but I think it's going to mess a lot of people up and we got to get educated with it. Okay, so this leads me to the credit card 10% that the president is proposing. Let's see, what page is that on? Here we go. Trump floats 1 year 10% credit card interest rate cap. What that could mean for your money. Rob, I think you got a clip on this one if you want to pull it up. I'll read the story and then I'll come to you. Here we go. Effective January 20th. Is this when he's saying that, by the way, or is that he wrote.
- [35:44]
Mark
It on Truth Social credit card company?
- [35:46]
Pat
Okay, go ahead, play the clip. Can you go back a little bit, Rob? We missed it. Well, then they, that they're in violation of the law. Very severe things. No, I want a cap on credit card interest rates because, you know, some of them are 28, almost 30% and that people don't know they're paying 30%. The people out there, you know, they're working, they have no idea that they're paying 30%. No way. We're putting a one year cap at 10% and that's it. They know it. They've really abused the public. The credit card companies have totally abused. I'm not going to let it happen. All right, so abuser, let me read this to you. Effective January 20, 2026, I President Trump, this is untruth social. I'm calling for a one year cap on credit card rates at 10%. A credit card rate cap is enormously popular with Americans, said Matt Schultz, chief credit card analyst at LendingTree. That's why we've seen big names on both sides of the aisle proposed credit card rate caps in recent years, including President Trump who also floated the idea on the campaign trail. 2024, currently about 175 million people in the US credit card, according to the Federal Reserve bank of New York. While some pay off the balance each month, roughly 60% of credit card users have revolving debt. The New York Fed said that means they pay interest changes charges on the balances they carry from month to month. About 61% of credit card holders with credit card balance have been in debt for at least one year, up from 53% late 2024, according to bank Rate Survey. The average credit card interest rate in the US fell to 23.79% in January, marketing the lowest level since March of 2023. Mark, I'll come to you. First thoughts on the story?
- [37:40]
Mark
Yeah, I think when I, when I hear this, I just think about the late stage fiat system that we're in. It's systemic to that. It's, it's, it's the same reason why Trump and Powell are openly fighting right now. We have inflation that's raging. People can't afford to live. And at the end, what the leaders always try to do is try to appease the people by price fixing. It always comes down to that. We can't stop prices going up because we can't stop printing money. So how about we'll just cap prices? And so whether that's rent controls, Elizabeth Warren wants to cap the price of turkeys for Thanksgiving, or it's credit card rates. The problem with price controls is we have a thousand cases of it not working. And just from philosophical level you can understand why. So for example, credit cards, banks is a very competitive industry. Credit cards are very competitive. And they're trying to get as many customers as they can. And they're constantly trying to undercut each other in order to get more customers. Who cares what credit card you have? You think about the rate. And so it's very, very competitive. And so they want to get as many customers as they can without blowing themselves up. And so they're already trying to get rates down as low as possible. They understand that people can just change balances from one card to the next. And so if they could lower rates, they certainly would. The problem is when you cap it at 10%. First of all, he said it's illegal. So there are already caps. Right? There are usury laws, so there are already caps. But he wants to lower it to 10%.
- [39:00]
Pat
What is it right now, by the way? Mark? You know what it is right now?
- [39:03]
Mark
I was a California finance lender, I should know it was in the high 20s.
- [39:07]
Pat
It was in the high 20s, yeah. Rob, can you pull up what the numbers are right now, what the current cap is right now? Mark, finish your thought. I just want.
- [39:15]
Mark
So what I was saying is that it's already competitive. Credit card companies are already competing to bring the rates as low as possible. What happens is if you cut the rate to 10% or 8% or 18%, whatever that number is, everybody that wouldn't qualify for that rate is then left without credit. And that will then drive people either to the BNPL or drive them to their back alley, you know, neighborhood loan shark. And so people need money. Especially, like I said, with this fiat system as we have today, people are falling further behind. They're using credit to augment their lifestyle. And yeah, if you cut them off at 18% or 15 or 10% as Trump is floating out, it just cuts off a huge segment of the population that needs it.
- [39:51]
Pat
It's an interesting route. Is it really saying there's no existing cap right now on credit cards? No existing cap.
- [39:59]
Tom
That.
- [40:00]
Pat
That's really what it says. So there's no cap right now on credit cards.
- [40:02]
Mark
Usury laws don't apply to credit cards is what it says.
- [40:04]
Pat
Is that what it's saying? What do you see, though? State usury laws generally don't apply to credit cards because made most major issuers locate themselves in states like Delaware, South Dakota or Missouri that exempt credit card debt from strict caps. Wow. Okay, Tom, go for it. Thoughts on this?
- [40:21]
Tom
So there's a couple things here that we can go back and look at real case studies. In 2000, late 2021, early 2022, credit card companies reduced people's credit limits across the board because the economy was tough. And so they were handicapping the fact that, you know, a lot of people are probably going to go for cash advances because money was tight, but they were going to have issues paying it back. So during the COVID crisis, credit card companies across the board went in and adjusted down caps on the lowest third of consumers. It happened. And guess what? What that means is we've seen the playbook. We know how they respond to stress. So that wasn't the government telling them. That was all of us in the boardroom, a visa saying, hey, the lowest third is starting to take a lot of cash advances. Guys, should we lower. I mean, these people have a $25,000 limit. Should we lower it to 20? Just send out the notice. Lower it right now? Yes, let's do it. Because they were mitigating risk. So we've seen that happen. Point one. Point two is what you have right now is the credit card companies are competing with each other. The reason the rates are coming down a little bit is because the federal rate was cut a little teeny bit. So the rates are coming down because they're trying to compete with each other. This is why Capital One has spent billions of dollars in the last five years on consumer advertising. What's in your wallet? They want it to be the Capital One card. So they're competing with each other very, very stridently. What's going to happen if you put the cap? It's just like Covid. They're going to lower the limits and people are going to turn to BNPL or other things. Now, this is well intended by the president during a time of affordability, but I think right now the credit card companies operate in states that are most favorable to them. Sure. But also they're competing with each other. If one of them could get more customers by going to 19.99%, you'd see one of them do it tomorrow morning and be shouting from the rooftops, hey, your alternative to Capital One is me. Get Tom's credit card. Maximum 19%. They would be competing with each other. There is a active market and it's working well. And I don't think it needs this control on top of them. Like, they haven't discovered this is lead based paint.
- [42:49]
Pat
I wonder whose idea this was. Like, I wonder if Scott, where Scott Bessem lies with this idea. I really wonder where Scott said with this. Brandon, go ahead. Because I got a bunch of. I got one number I just pulled up right now that when I share with you guys, you're going to be blown away when I share this number with you in a minute. But go ahead, Brandon.
- [43:08]
Brandon
Yeah, it's funny you say, because I was just thinking it's as if they're sitting in a room saying, all right, this cost of living thing is becoming a problem. Everybody's still talking about it. What's something we could. What's a bone that we could throw at the public and appease them a little bit, make them feel like we're doing something. And this is a good start to that. I think it's a good idea. I mean, I think maybe student loans would be a better place to either cap or remove interest rates because I think they've already been paid back a lot of time in, in terms of like without, without the interest. Like, I think that just paying back the loan would be enough. But yeah, like this, it's an example of lobbying. The reason that I don't think there's a, a limit on it. That's, that's probably why. Because it's like the same thing as loan sharking. It's just like legalized loan shark in a lot of cases. But I, I don't, I think it's good for inflation because, you know, like more debt equals a higher cost of goods and services. So like, it would create probably a crash type situation. Like the Great Depression is like the biggest example of deflation. But that's the thing that's unfortunate is like you have to like way like an economic downturn versus the cost of living. You can't really have both of them. Be ideal.
- [44:11]
Pat
Yeah. So affordability, like there's a story that came out that the President reached out to Elizabeth Warren about the. Did you see that story this morning, Rob? I thought I saw it correctly. Can you type up Trump Elizabeth Warren affordability. I may be wrong, but I thought I just saw it early this morning. Is that it? Yeah. There's stories today about warning on affordability. Okay, so they had a conversation this morning and keep in mind this 10% idea. Do you know whose idea this was? If I tell you right now, who proposed this idea last February 2025, who do you think it was?
- [44:41]
Brandon
Was it Warren?
- [44:42]
Pat
Nope. But a person like that, who do you think it was?
- [44:44]
Tom
Bernie.
- [44:45]
Pat
Bernie Sanders. Bernie proposed this idea last year. He put this on the table, I think. Can you type in Bernie Sanders 10% credit card? There it is. Sanders. Hawley introduced Bill Camp and credit card interest rates at 10%. Now, both of those are heavyweights on each side. Hawley's a heavyweight. Sanders is a heavyweight. For a socialist slash communist to agree with a capitalist conservative on the 10%, this is where the independent in the middle will look at this and say, well, if both of these guys are on it, I'm willing to entertain it. So libertarian, independent, independent will say, maybe this is not a bad idea, but here's what you got to be thinking about. So if you lower it to 10%, the banks are going to sit there and say, our profits got hit. This is what the gentleman was saying last night to us. And then they lend less. If they lend less, the small business owner takes a hit because who will they always lend to? They're always going to lend to the guy that doesn't need money. They're over how much you need? $100 million, 50 years a year. Take it, take it. Whatever you want. Right. Because they know that guy's going to pay the money back. But this is the number where I do believe there's an argument there. And some people may say, well, Pat, if you really believe in free market capitalism, what's wrong with this? Here's a question for you. What is, what is an average business's EBITDA restaurants? EBITDA is what? What's a restaurant's EBITDA?
- [46:11]
Brandon
10%.
- [46:12]
Mark
Yeah.
- [46:12]
Pat
Lucky if you're there, 5 to 10% they get their asses handed to them restaurants. Right. Okay. What is a healthy business as EBITDA? What do you think it is?
- [46:21]
Mark
10 to 20?
- [46:22]
Pat
10 to 20 would say pretty healthy right now if you're running a software technology difference. So let's set those aside. The 30, 40%, like I'm talking salesforce. What do you think is the, what do you think is the profit margin of what these credit card companies are making? What do you think it is if you don't pull it up yet? Because, Rob, I want to see what they're going to say before you ask the question. What are profit margins at credit card companies such as Visa, MasterCard and American Express? But don't press Enter yet. What do you think the number is? 30%. That's a lot. Yeah. Okay.
- [46:55]
Mark
I'm going to go more in line with restaurants.
- [46:57]
Pat
5 to 10%. Where are you going to be, Tom?
- [47:00]
Tom
Well, they're charging interest rates on one hand at the rates we're seeing. But on the other hand, they're only making two and a half percent on the actual transaction. So I'm going to blend it and go four.
- [47:13]
Pat
You're about to be shell shocked. Go ahead, Rob, ask the question and show them what it is. Net profits for visas, 47 to 52%. MasterCard is 45%. Amex is 14 to 20%. So to me. Are you flipping kidding me? Yeah, they, they're printing money like every single year. I remember I bought visa stock like 10 years ago and all you had to do was keep it.
- [47:41]
Mark
But, but are you getting a credit card with Visa or are you getting with Capital One? So are we looking at the wrong number? Because Visa is making the money for processing transactions. So their fee, their net profit is very high. American Express is the card issuer. And so see how much?
- [47:54]
Pat
14 to 20.
- [47:55]
Mark
So I think really we have to look at Capital One, not Visa. Right.
- [47:59]
Pat
You, you're thinking, you're thinking more, but you think they're targeting Capital One. I don't think they're targeting.
- [48:04]
Mark
Visa is making all the money from processing the Transactions, they don't have the cost, overhead, the risk. They're not making the slim margins on the spread. So I think you'd have to go to the actual card issuer like a.
- [48:13]
Pat
Capital that is given the debt to the clients.
- [48:15]
Mark
Given the debt because they're the ones that are making spread the Visa net.
- [48:17]
Pat
So, so why don't we do this then? Let's ask the question with those guys. What is the profit margin? What are the five credit card companies we want to put. We saw Amex.
- [48:27]
Mark
Scroll back up a second where it said Amex.
- [48:28]
Pat
So see where it said 14 to 20%.
- [48:31]
Mark
See what it says right there? Amex also acts as a credit issuer and bears credit risk.
- [48:35]
Pat
So see, he makes a slightly different.
- [48:36]
Mark
So MasterCard and Visa don't. They're not issuers. They don't bear credit risk.
- [48:40]
Pat
Well, why don't you give the companies what are the top five credit card companies? Give the names. Capital One. Okay, so let's say what are the profit margin? Perfect. So why don't we do Discover City, Capital One, maybe let's ask the question this way. What the top five credit card companies in America. What are the top five credit card companies in America? So to me it says the top five credit card companies in America are. It says Visa Global Payment System 55. It says MasterCard. So I'm trying to see what are the credit card companies. Citibank, you see, goes back to Chase B of A. So why don't you ask.
- [49:26]
Mark
I would exclude the banks because obviously they're going to have profits from other areas. But I think Amex, I think Capital.
- [49:31]
Pat
One, City's also bank though, right? So if you put City.
- [49:34]
Mark
Right, that's why I said Capital One.
- [49:36]
Pat
So let's look at Capital One. Rob, if you want to do this.
- [49:39]
Mark
Maybe Discover that you call it, why.
- [49:41]
Pat
Don'T you do that? Do Capital One, do Discover. And what was the other one you said? Capital One, Discover and add one more. Was there one other one that we wanted to add?
- [49:52]
Tom
Capital One swallowed Discover.
- [49:54]
Pat
But anyway, okay, let's just see what is their profit margins, what kind of money they're making. What is their margins here, man?
- [50:04]
Mark
Well, we're waiting for that to come up. I mean just price.
- [50:07]
Pat
Price is 101 for Amex. We saw that one.
- [50:11]
Mark
Look at Capital One right there.
- [50:12]
Pat
Barely making any negative 8.8. What is Discover 25 -25% based on recent trade off.
- [50:20]
Mark
That's not a minus, that's an approximate. But again, Discover 25.
- [50:23]
Pat
So Discover makes 25%. Capital One makes 5%. Amex makes 14%. More traditional bank with significant loan book margin varies with credit cycle. Discover pre merger performance showed solid profitability, stronger than many. What does that say? Rob banks.
- [50:45]
Tom
Bank issuers.
- [50:46]
Pat
Bank issuers, yeah. Okay, how do you process this?
- [50:48]
Mark
If you go up and read Discover, if you scroll up just a tad right there, you'll see Discover also has additional income that's sort of like a Visa MasterCard network. So really the best proxies for this I think are American Express and, and Capital One because they're like the credit issuers. They don't benefit from people using.
- [51:06]
Pat
So. So then let me ask you, if they're doing this and if they remove the interest rate from what it is to 10%, how do these guys make money if that's the case? Because Visa and MasterCard, they're printing money.
- [51:18]
Tom
They'll make money on the top half, you and me, and they'll start to bleed on the bottom half. And they will have to reduce, you know, credit available balances, credit limits. They'll have to reduce them. This is what he was saying last night. They'll go wham and stop everything at the bottom and then leave everything at the top.
- [51:40]
Mark
Well, what they'll do is they're going to call you and they're going to triple your credit line because you're going to pay it back and then everyone else are going to cut theirs.
- [51:46]
Pat
How do you make money off me though? Well, you.
- [51:48]
Mark
Because you'll use your credit card and you'll pay it back.
- [51:50]
Tom
Transaction fees.
- [51:51]
Mark
Transaction fees.
- [51:52]
Pat
But how much is that though, Tom? I'm going to pay back and I pay back on a monthly basis every.
- [51:57]
Tom
Time you use it.
- [51:59]
Pat
So it's really the 3% of usage.
- [52:01]
Tom
Correct.
- [52:04]
Pat
You now want to lower it to 10 points. I don't know what I like the fact that Holly and Sanders are both entertaining it. Do you think this is a net, Net good thing for low middle income families?
- [52:19]
Tom
Yeah. Does the, does the product market need scrutiny? Yes. Does it need to maybe tighten some things up? Plain talk disclosures and things like that? Sure. It can always benefit. Does it need the government to put a cap on how much profit it can make? No.
- [52:40]
Mark
Business 101. If there is a fat margin to be made, competition will come and eat the margin. That's just the way it works.
- [52:47]
Pat
How is Visa and MasterCard not had anybody else that come in? Well, that's because they're making 45 to 55%.
- [52:53]
Mark
But they did have Amex come in. They did Have Discover come in, but now they've also had PayPal, BNPL. So they are having lots of competition now. And now we're seeing stablecoins that will start taking over. So I think they do have some competition, but they have the benefit of owning the network. And, you know, owning a network is.
- [53:09]
Pat
Where you make the big money. It has to flow through you.
- [53:12]
Mark
The network effect, would you say, Tom.
- [53:13]
Tom
The toll booth, they own the.
- [53:15]
Pat
To. What a business to be in, though, if you think about it, right? Well, yeah.
- [53:18]
Tom
Is.
- [53:19]
Pat
What is the biggest crypto credit card? Is there a bitcoin? Is there anything like that right now, where it's a competitor of what a visa and a MasterCard would be?
- [53:29]
Mark
I mean, there are, but they're through the banks. So they're credit card banks because the credit card banks still need them. Yeah, it's still credit. It's still a credit product. So like Gemini, for example, released one, right? Or Coinbase released one, but it's with a major issuer, I think Coinbase is through Amex, I believe, so they use a credit issuer for that.
- [53:48]
Pat
Rob, can you do me a favor? Just go to Visa. Go to Visa. Market cap. Go, Max. Go Visa, market cap. Go, Max. Yeah, go Max. All the way to the right. Look at that. Zoom in. Look at that. It's like, how do you lose money with this? Yeah, this is one of those things. $625 billion market cap. What was it. What was it in 2011? Go to 2011 market cap.
- [54:14]
Mark
2011, Rob, this is a Warren Buffett efficient capital business.
- [54:18]
Pat
It really is. If you look at it, they own the network.
- [54:21]
Mark
They own. They own the. There's like Coca Cola, right? They own the patent on the syrup, but they don't even make the bottles.
- [54:26]
Pat
Look at this. Market cap in 2011, 67 billion market cap. Today, 650 billion. It's, you know, this is not a recommendation to you guys, but if some of you guys are conservative and you want something long term, you almost have to go through this network. Visa Master. Okay, let's go to the next story. Trump says any country doing business with Iran will face a 25% US tariff. 25% US tariff. President Trump said on Monday any country doing business with Iran will face a 25% tariff on any and all business being done in the US that new turf on imports from Iran's trading partner is effective immediately. Trump said in a true social. The order disorder is final and conclusive. Thank you for your attention to this matter. Further details about the tariff announcement were not immediately clear. A White House official declined to answer. This apparent effort by Trump to economically isolate Iran comes as in as the. That was good. As the oil rich Middle Eastern country struggles to suppress an ongoing swell of massive anti government protests. Dozens of those protesters have been. Well, it's not dozens anymore. The report was 2500 and CBS reported allegedly 12,500 killed. Tom. 25% tariff on people doing business with Iran as if they're not already suffocating. With inflation being 55%. Water issues. Right. Unemployment issues. The average worker making less than a gram of gold per month. $110 a month. How bad is this when he puts this on them?
- [56:08]
Tom
Okay, so it goes like this. My dad got really upset with me and grounded me. So I have to go to my room when I get home from school and I'm sitting in my room, then he gets home the next night and my mom says, hey, the report card just came in the mail. The report card sucks too. He knocks on the door to my room and he says, you're not grounded for one week, you're grounded for two weeks. Well, I'm already grounded. So really, I looked at this when it came out and I said, really? What's he saying? He's saying, anybody that's doing business with people that I'm already punishing and remember India is part of this, he said, then, okay, we'll put another 25% on anybody doing business. So in other words, I already have China tariffs, I've already got sanctions on Russia and I've already got sanctions on Iran. But if anybody wants to even look like they're doing a backdoor deal with Iran for, I mean, Russia's buying drones, there's some black market oil being sold. So anybody caught doing that, now it's another 25%. So really I think that what really happens here is that he wants to cause what few customers that Iran has to even lower what they're buying, which points to China because China's trying to buy, they buy black market oil. So he's like saying, okay, we're going to put another 25% on China. So this is really like hitting again a dog you've already been hitting for a month.
- [57:39]
Pat
Brandon, your thoughts on this?
- [57:40]
Brandon
Yeah, no, it's, I think they're at the breaking point where something could happen here, like where the, you know, leadership change could happen. And this is, you know, you just gotta keep like piling like layers on top of it to see what breaks. And I don't think a organic revolution Leadership change has ever happened without the assistance of an outside powerful force. So, you know, I think he. He's in favor of a leadership change. I think he's trying to do whatever he can without putting boots on the ground to make that happen. I think it's close to happening. But, yeah, I. It's interesting, like, we were talking about last week how China's real power, their edge in geopolitics, is getting cheap oil from Russia and Iran. So, you know, we're kind of putting them in a situation, too, where it's more difficult to get that cheap oil from Russia and Iran. So maybe China could be helpful here, I don't know.
- [58:23]
Pat
And do what?
- [58:24]
Brandon
And, you know, go somewhere else for oil in the meantime and stuff.
- [58:27]
Pat
Why would they. They're getting it at a massively discounted rate.
- [58:30]
Brandon
Yeah, well, that's where negotiation comes in. Like, it's like, what do we care.
- [58:33]
Pat
About more for us to say, stop doing business with them.
- [58:36]
Tom
Yeah.
- [58:36]
Brandon
Take a pause.
- [58:37]
Pat
You realize this 25% is really. Who's he talking to with the 25%? I think countries.
- [58:43]
Brandon
Yeah. China and India.
- [58:44]
Pat
Yeah. So China is going to sit there and say, yeah, I'm pretty much getting it for free. I'm not paying anything for it. And you think. You think he's really going to come through with this 25%? I.
- [58:54]
Brandon
No, I think it's a good threat. But, you know, now we have Venezuela oil that we get. We get put on the table.
- [59:00]
Pat
Just imagine if you're the accountant, like, you're the comptroller General of the U.S. who the hell is the Comptroller General of U.S. right now, Rob? It used to be a guy named David Walker 20 years ago who. Whom I interviewed one time. Who is the comptroller general of the US Today? We're not even talking about this guy. This poor CFO must be having. There's no way this person is sleeping. Can you. This is the CFO of America, folks. Let's give him some credit. Can you pull up his picture? Rob, who are you?
- [59:30]
Tom
Or.
- [59:31]
Pat
No one's even talking about you. Yeah, she's the Comptroller General of the US Go to her. Is she really the comp.
- [59:38]
Tom
I think there's a better picture than that one on the American flag there. She looks kind of crazy, doesn't she?
- [59:42]
Pat
No, no, but I'm actually being serious. Is this truly the comptroller general of the US today? Is she the comptroller general of the.
- [59:50]
Brandon
US or a state began December 2025.
- [59:53]
Tom
She's the acting Comptroller, who sat in the chair following the retirement of Gene Dorado, who retired just a couple weeks ago on December 29th.
- [60:02]
Pat
So who's the new one?
- [60:04]
Tom
She's acting and it hasn't been named.
- [60:06]
Pat
So they haven't announced a new one yet.
- [60:08]
Tom
Right.
- [60:08]
Pat
And this is just a couple of weeks ago. Well, go to Jean Dodaro, who is. So Gene Dodaro was the one that was doing all the stuff in 2025.
- [60:16]
Tom
Correct.
- [60:17]
Pat
Can you go to Gene, please?
- [60:18]
Tom
He was official.
- [60:19]
Pat
Who is Gene Dodaro? Funny that we don't even know who this person is. This guy's probably aged more in the last 12 months than the last 40 years. The amount of. Every day, 25%. It's like. It's like working for a sales company and the CEO keeps changing account plan every day. Change it here. Change your commissions to this here. Change your commission to.
- [60:39]
Tom
There's a.
- [60:40]
Pat
It's like this constant. You know what I'm saying? Like that. That's. That's what it is, working in that environment. But the threat is you're suffocating Iran to have no choice but for everybody to stop doing business, to eventually give up. He's trying to get these guys to quit and give up. Do you think it'll happen, Mark? Iran?
- [61:02]
Mark
I think there's a bigger problem at play here. And so while I certainly hate what's happening there and I hate to see the people getting slaughtered, I mean, it's just absolutely insane, the think that people still live like that in today's day and age is insane to me. But the bigger problem that we have is, is China. And so what China is doing is they're setting up a. A new parallel financial system. The dollar is the reserve currency of the world. The US Dollar is the payment network of the world. Back to Visa and MasterCard, the US dollar is the payment network of the world. And so the US Is able to. Sanctions, sanctions, sanctions, sanctions. But eventually you kick so many out of that payment network, that financial system, and they go find a new one. And China is setting up a parallel system through Hong Kong that's being settled in gold. And the. And they've now set up swap lines with 32 countries, almost every country except the United States. And so now all of these countries can do business with themselves using the rmb, being settled in gold in real time, and they don't have to use the dollar network. And so this is happening, and it's happening very, very quickly. And the more that we weaponize the dollar and the more that we Slap sanctions, the more it drives people to that network. And so what happens is this has diminishing returns. And so while I certainly would love to help the people in Iran and I would love to see the United States somehow change, as you said, it needs an outside power to affect this. The problem is, is that it's accelerating the demise of the dollar.
- [62:28]
Pat
Very good point. Because behind closed doors, this is getting people to say, well, I want to independently do it, so let me lean on China to help me out with this. If that ends up actually happening. You know who behind closed doors is celebrating right now with Iran getting hit left and right, and they're hoping Iran doesn't have a revolution. You know what's the one country that is hoping Iran doesn't have a revolution? Iranian people don't become free. Iran doesn't become a democracy. Humberto said it in the back. And you know who it is?
- [62:56]
Brandon
Saudi.
- [62:56]
Pat
Saudi Arabia. Saudi is sitting there saying, no, man, like, let him stay like this. Let the sanctions stay on. Let people not do business. Keep it like that. This is more business for us. Yeah. Saudi is quietly sitting there saying, please stay chaotic. Please don't get rid of irgc. There's no other country in the world that is probably quietly supportive of IRGC than Saudi. Quietly in their own way. Not in a way that they're helping them out in their own way. Brandon, you look like you want to say something.
- [63:30]
Brandon
Yeah, no, I do agree with you saying with the demise of the dollar, but the renminbi, I've never thought of that as, like something the rest of the world would rely on.
- [63:37]
Mark
Like, they're not relying on it. They're not relying on it. It's only used as liquidity, and it's all settled in gold.
- [63:43]
Brandon
They're relying on gold held in China, though.
- [63:46]
Mark
It's not, they're, they're, they're settling it. And so it's not fully functional yet, but it's rapidly accelerating. It's all happening through Hong Kong. So the Shanghai Gold Exchange is working or partnering with the Hong Kong board. And so it's all being used only as liquidity, but again, settled in gold. And so we're seeing the reserve currency of the world, the US treasury, has been dropping right, at from 60% down to just under 50% in just like the last decade. But we've seen gold now rise to about 30%. It's happening very, very quickly and behind.
- [64:17]
Pat
Closed doors, isn't it? Isn't it? If you, if you rob, type up what country has been buying up the most gold the last five years or four years. I think China's at the time.
- [64:25]
Mark
Well, China doesn't report it all, so we don't really know. But to answer your question, nobody's gonna trust Chinese currency. It is not a free. Oh, it's not an open capital market. Nobody will trust it. They don't have to. All they're using it is for the liquidity and then the gold is, is what's settling it.
- [64:40]
Brandon
Yeah, so. So you're not saying that the, the China's a threat to be the next reserve currency at all, right?
- [64:46]
Mark
No, gold, yeah. That's why gold's 46 standard.
- [64:49]
Brandon
Really interesting.
- [64:54]
Mark
That's a whole conversation. But yes, I mean that's what's happening. We've seen, like I said, U S Treasuries have dropped below 50, gold's up over 30% in reserves right now.
- [65:04]
Pat
Let me get to the next story. Next story here is Trump to bring Elon Musk in for key Iran mission. Rob, I think you have a clip on this one, Rob. I'm going to read it, then I'll come to you. So President Trump indicated on Sunday that he planned to reach out to Musk to speak about Starlink asking. Asked during a Sunday gaggle aboard Air Force One whether he is going to send Starlink service to Iran amid the Internet blackout imposed by the Islamic regime. President Trump indicated that he planned to reach to Elon Musk. We may get the Internet going if that's possible. We may. Do you have that clip, Rob?
- [65:40]
Tom
I have Caroline Levitt. Let me look for the Trump clip.
- [65:43]
Pat
We may speak to Elon because as you know, he's very good at that kind of thing. He's got a very good company. So we may speak to Elon. I'm going to call him as soon as I'm finished with you. There has been an Internet blackout in Iran regime brutally cracked down amid protest. Starlink is apparently providing some connectivity in the region. Brandon?
- [66:03]
Tom
Yeah.
- [66:04]
Brandon
So for Starlink.
- [66:05]
Pat
Yeah, yeah. Starting.
- [66:06]
Brandon
Yeah, no, I mean this is a, it's a game changer. I mean like the fact that Elon said what he said about Trump and Trump is like publicly comfortable reaching out to him and asking for help. It shows the power of Starlink and you know, it's literally going to like change the way that everything works in terms of like telecom networks and cell phone networks. Like when you're in a plane right now, you can literally connect to Starlink. So like I think this could single handedly cause an aid revolutions and get information out that is was formerly incapable getting out. Like imagine what we could learn from what's happening inside Iran right now. Like if, if they hook up to Starlink versus what we were able to have access to before that. So I think it's a total game changer in the, the revolution space and like helping countries that try to cut off their population from the world to have access to the rest of the world.
- [66:48]
Pat
Who else, who else is a competitor to Starlink?
- [66:50]
Brandon
Nobody.
- [66:51]
Pat
Is there another Starlink? Like who else is building a Starlink outside of Elon?
- [66:57]
Brandon
What a linchpin big barrier to entry to like put a bunch of satellites in outer space.
- [67:02]
Pat
I mean I get it's a big barrier to entry, but it's gotta be somebody because the reason for it is if only one person controls it and says no, I don't want to turn it on, what are you gonna do? Yeah, how much control does that individual have? I don't like the fact that there's only. So there is. Yeah, there's somebody that's building another competitor. Major current and emerging competitors. Starlink, Amazon. How do you pronounce that? Cooper. Amazon. LEO is one of the biggest direct competitors to Starlink and deployed thousands of LEO satellites to provide broadband Internet globally. Okay, that's good. One Web is a UK based LEO satellite. No one's going to trust the UK. One Chinese mega mega Stelli inches Guang and Q fan.
- [67:44]
Mark
That's firewalls. No one's going to use that.
- [67:46]
Pat
So no one's going to use that. Go a little bit lower up to see if there's any one of them. And then Iris is European Union satellite Internet secure communications constellation planned with hundreds of satellites in Leon medium earth orbit. Is there any other ones that they're doing? Okay, I like the fact that there is some competition here because I don't like the fact that only one person.
- [68:05]
Mark
Don'T you still have the, the Hughes net. You still like DirecTV, right? You can still get right.
- [68:09]
Tom
Those are, those are olders. When you see the Leos, that's the modern technology. That's where they can launch 16 of those in a single rocket. Leo stands for low Earth orbit. And baby Arthur C. Clarke, Remember him wrote 2001, he defined the Clark Belt which is I think 23,200 miles above Earth where if you throw a baseball, it stays there. Gravity won't pull it to Earth, but it can't get away from Earth. It'll just spin forever. So that's the Clark Belt where all the major satellites the big TV satellites, high power go LEO's are the small satellites that are up there lower. And there's not very many. Utilsat came out of Europe, they had one that was built, but it never got commercial viability. Viasat build one. It gave you very moderate, as you recall, Internet on aircraft and so. And then Hughesnet, that was the one you would see the girl advertising to get you Internet in the middle of nowhere. Right? But it wasn't very, very fast. Starlink is newest, fastest in leo. And then Amazon's billing a leo. The LEO networks are what is important and we need three of them. You gotta have three competitors in my view. Otherwise you do have the problem of what if, what if Elon's not in a good mood?
- [69:22]
Pat
I don't like that at all. I don't like that at all. I don't like the fact that I only have one phone call to make. Because you have a monopoly. You're begging the individual.
- [69:29]
Tom
Sorry for the lesson on all this.
- [69:31]
Pat
Imagine if you're living here. I will do it. If you give that $7,500 thing back on the table and you're like, no, well then I'm not giving it. He doesn't. I don't like only one option. Mark, thoughts?
- [69:41]
Mark
Yeah. Well, I mean, first of all, I think Elon is not the controlling interest. I think he has a minority shareholder of Starlink. So it's not like he's a dictator of the company.
- [69:50]
Pat
So can he, can, can, can Starlink be approved without needing to call Elon?
- [69:55]
Mark
I don't know. I don't know.
- [69:56]
Pat
See that?
- [69:57]
Mark
I don't know the corporate board, governance. But I believe Elon because I remember when in Brazil they went to sanction Starlink and thinking about how can they sanction an American company in American. But, but he is a minority owner of Starlink. I believe so. I don't think he runs it like a dictator at the top of the board. I think there's a board there. Number one, it's not a separate division of SpaceX. Probably.
- [70:19]
Pat
Oh, okay, short answer. Yes. Mostly because most of the caveats, how Starlink's structured, not a separate public company. It is a division of SpaceX which is privately held, controlled by Elon.
- [70:29]
Mark
Not 40% of voting control.
- [70:31]
Pat
40% of voting control and even more through super vote. Oh, then it's over. It's 90%, 80%.
- [70:37]
Mark
Okay.
- [70:37]
Pat
He's probably got a set up in delaw. Where, where 2x is it? You know which one I'm talking about, Tom? The So then that means founders Elon has de facto control over SpaceX and therefore Starlink. So.
- [70:50]
Mark
Yes, well, I stand, I stand corrected. And, and I absolutely agree with you. I mean, I, I'm all for competition. And to your point, we need, we need. Competition always brings better products, better services, better prices, but it also prevents somebody running away, getting crazy and trying to do something that could be detrimental.
- [71:07]
Pat
So I don't know about something like this, Mark, that, you know, like, if you think about, for you to have that kind of control. But the President has to say, I'm going to call Elon to get it.
- [71:19]
Brandon
He's more powerful than the President especially. And wait till the robots come online with the, you know, the robots. The robots come out and they're actually.
- [71:25]
Pat
But at least the robots were going to have competition. There's a difference between the robot and Internet. Yeah. Internet is. People don't know how many people are being massacred in Iran right now. Yeah, we don't know. It's off. Right. So for us to not be able to see the media, CNN is reporting, you know, it's, you know, nothing's really going on and they're giving their own reporting in this. So the mainstream media is not covering it. What is the great equalizer to mainstream media? What does the mainstream media hate the most? What completely disrupted mainstream media? So what, the podcasting? YouTube, independent. Like right now, just think about today's conversation, democratization of the conversation. How many people here have been, you know, held, stand corrected? How many people here? Me, Visa, MasterCard, him, just right now, Everybody. So that is, that is where it keeps you honest. Before, if this was cnn, Fox, just three or four, NBC, guess what? People are going to be like, well, that's what the truth is. That's what the truth is. No, we need more starlink. I'm glad a couple of these other guys are doing it as well. As much as I love innovators at the highest level, I like competition more than I love innovators.
- [72:38]
Mark
Yeah.
- [72:38]
Pat
Because an innovator without competition is control.
- [72:41]
Mark
Right.
- [72:41]
Brandon
It's gonna be tough to compete with those rockets, with how good he is with the, like, the rockets are the, the thing that allows him to put so many Starlinks up there.
- [72:47]
Pat
Yeah, yeah. No question about it. Okay, let's get to the next story. Next story I want to get to is. Let me see which one of these I want to go to, because we got quite a few good ones here. Let me go. Boom, boom, boom, boom. Let's go to this. Where's the where's the house and what they're doing with the loan? Tom, what page is that on? You know which one I'm talking about. Rob Page. There it is. Trump vows to slash mortgage rates to revive the American dream while blaming Biden housing failures. In truth, social. This is a FOX story. So let's go to this. President Trump said he is directing representatives to buy $200 billion in mortgage bonds to drive down rates, blaming former President Biden for what he called a broken economy marked by inflation, crime in an American dream he says his administration is restoring. Biden ignored the housing market and instead was immersed with high crime, open borders, runaway inflation, the Afghanistan disaster and military that he left in chaos and confusion. Trump wrote on Social Everything was broken, but I as the president of the United States have already fixed it. Now I'm giving special attention to the housing market because I choose not to sell Fannie Mae and Freddie Mac in my first term. A truly great decision. And against the advice of the experts, it is now worth many times that amount, an absolute fortune. And as $200 billion in cash, you continue to because of this, I'm instructing my representatives to buy $200 billion of mortgage bonds. This will drive mortgage rates down, monthly payments down, and make the cost of owning a home affordable.
- [74:21]
Tom
Again, Tom, this is only one part of the puzzle. So he's obviously working with Bill Pulte, Fannie and Freddie. We assume that Bill Pulte isn't mentioned, but Bill Pulte runs Fannie and Freddie. And so they're going to put $200 billion in mortgage bonds that is available liquidity for FHA compliant mortgages, basically. Right. So it's a stack of money. However, those houses still cost the same if housing prices don't moderate. And we have a limited supply of new building because building from Toll Brothers, Pulte, Lanaire, there's like four of them that they're the majority haven't had a chance to capture catch up with building yet. So you need supply to catch up. So the price of the houses will come down a little bit. And then yes, you've got a mortgage that's a more affordable rate. However, a related story is escrow balances are going up and that's where people are being asked to have set asides your payment plus a small escrow balance. That balance is like a little savings account to pay your property tax at the end of the year. And escrow balances have been going up. Why? Because the value of the home went up. We crossed 12, 31 and certain municipalities, depending where you live, reassess you based on 1231 and give you a new property tax. So this is a little bit artificial to take all that cash to go put the bonds out there so there's money available to lend. The bigger issue is still that the homes are expensive. There's not a big supply of new homes as alternative to purchase and the insurance and property tax are linked to the current value of the home, which is still high. So this is a good start, but it's not a magic elixir to fix the whole market.
- [76:09]
Brandon
Brandon yeah, I think it's just another name for qe. So you know, if you're artificially pushing down the price of interest rate or the, yeah, the, the level of interest rates, then that's quantity of easing and it's going to, you know, make it more appealing for people with extra money to buy houses because the rate's lower. So it's going to ultimately push up the price of houses. Like that's, that's when housing prices went up like crazy is when we dropped rates to zero. It went up from like an average of 350,000 to an average of 475 nationally from 2022 today. So yeah, I, I don't think it's a long term good idea. Like maybe it's a short term sounds good, looks good type of thing, but no, it's not, it's not a good long term strategic plan. The only thing that's going to fix it is if we build a ton of houses at a much more rapid pace than ever. Like maybe if the government subsidizes or like if they're going to drop rates or anything, it should be loans for home builders so they could build houses faster.
- [77:02]
Mark
Mark yeah, I think that sort of misses what's happening here. I think building more homes isn't necessarily the answer because it's not just more homes. We have supply and demand in key areas. People need to live near city centers, they need to live by airports, they need to live by business centers. And so we can build more homes in the middle of America, but what good does that do? We can't build more homes where we actually need the homes. I think on top of that, the price, the mortgage payment is only one piece of it. So we've seen insurance rates. I mean, you're in the insurance business in California. In some areas it's impossible to get insurance on homes. I have a place in Texas, in Austin, and rates are up like five times.
- [77:40]
Pat
Rates are up five Times, Yeah.
- [77:41]
Mark
I mean, my insurance, we have a ranch property there, and my insurance rates went up like crazy. And so that's really affecting the homebuilding market. On top of that, you have all the regulations that have piled up. So the cost to build a home, not just the hard cost of lumber and steel, etc. But the regulatory costs and stuff have gone up so much. So there's a lot of problems that are, that are holding the price of homes up as well. If you look at the US Median average of homes, it's like a perfect proxy for inflation. It rises with M2, rises with the Fed balance sheet. So I think inflation is in the seat here. Sure, we can lower rates a little bit and that helps a little bit. But at the end of the day, the last thing I'll say is that nobody really buys the price of the home. They buy the payment.
- [78:24]
Pat
Correct.
- [78:24]
Mark
Right. And so even if I can bring the rate down, I'm still going to buy the max amount I can afford to buy based off of my income. And so the price of homes is just going to go up when rates come back down.
- [78:37]
Tom
Rob, go back to the story you had just a second ago so we can see the, the, the escrow effect and what it said is the property tax. You were just there 30 seconds ago.
- [78:49]
Mark
And if, and if we could look at the insurance rates.
- [78:53]
Tom
Yeah, they were right together. You had them right together just one screen ago. Close it out. Hang on one second. No, it was. Anyway, it showed that since 2019, how much the property tax rates were up in the escrow. And then right below it, it had the insurance. You were, you were just on one of the other tabs. It was like only one. There we go.
- [79:19]
Mark
45 to 62.
- [79:21]
Tom
Yeah.
- [79:22]
Pat
Escrow payment for homes in the US has increased approximately 45.
- [79:25]
Tom
He had it a minute ago. It was just one page back on one of those.
- [79:27]
Pat
What was it, what was it saying?
- [79:29]
Tom
It was saying that over five years that the, the pressure on property taxes had gone up 27% over five years. Just property tax.
- [79:41]
Pat
Go to each page you're on and just go back one page on each of those pages.
- [79:45]
Tom
I already closed, I had closed it out.
- [79:46]
Brandon
That's why.
- [79:47]
Tom
So when I go back.
- [79:47]
Pat
That's what I'm saying. If you go back, that could. Okay, I got it, but.
- [79:50]
Tom
And then it also talked to exactly what Mark was talking about, the insurance costs. Because the insurance cost chases rebuild cost number one, and then changes loss costs. So if your house becomes more valuable, then your insurance goes up in a Static market because of rebuild costs. However, then you have lost costs, disasters and insurance raising cost of capital and loss risk. Suddenly it all goes up and you end up even in.
- [80:20]
Mark
But then, but then it's 5x. But then it gets worse because then you have the state of California, we had the wildfires and then you have regulatory problems where they've driven the insurance companies out of California. So now many homeowners in my area, you know where I live in Orange County, I'm considered a high fire zone. I live on the beach, but I'm a high fire zone. And many of the people I know in my area, they can't get insurance. So now they have to buy into like a state funded insurance. It's the only way they can get it. And the rates are enormous. There's competition.
- [80:50]
Pat
Is state funded insurance. It only covers the two and a half million or something.
- [80:53]
Mark
Friends of mine that are in the insurance business, many times they have customers and they can't get them insurance.
- [80:59]
Tom
They're not even able to get hysterically named Fair plan.
- [81:02]
Pat
Fair plan.
- [81:02]
Mark
A lot of the brokers have been driven out because insurance companies had to cut brokers because they can't even afford to pay.
- [81:07]
Pat
Are you at a point that you, you guys are talking about leaving or not yet?
- [81:11]
Mark
No, not yet.
- [81:11]
Pat
You're not yet.
- [81:12]
Mark
Mike Tyson told me it's expensive to live in heaven.
- [81:18]
Pat
Is that what it is?
- [81:19]
Mark
That's what it is.
- [81:20]
Pat
Yeah. So that's the. So can anything ever happen that you would leave the state?
- [81:24]
Mark
Sure.
- [81:24]
Pat
What's the turning point that you would say?
- [81:26]
Mark
I mean. Sure. I mean during the pandemic, Newsom wanted to be, you know, the most strict state for as far as lockdowns. I won't live lockdown for sure. I left the state in 2021. That's why I bought my ranch in, in Texas. But you know, I don't eat top ramen in McDonald's every day either. I pay a little bit more for food. I could pay a little bit more for a quality of life. But yeah, what would change would be something that would restrict my daily life. Like restrict my freedoms. That would be something. The other thing is back to this billionaire tax that are seeing this mass exodus. I do have friends that are now working on moving out of the state. And so at some point that could potentially drive me out. We'll see.
- [82:01]
Pat
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- [82:33]
Tom
Well, if it gets passed, remember, they only have to move one letter. Change the B to an M. Yeah. Now it comes after the rest of you.
- [82:40]
Mark
No, I know, I know. And then, and then, you know, they floated the idea of having it retroactive. Right.
- [82:45]
Tom
So January 1, 2026, right now.
- [82:48]
Mark
Right. So, you know, but they floated ideas in the years past of it even going back longer.
- [82:55]
Tom
This is a scam. We've talked about it before, but people need to hear this. You know, Ro Khanna says, oh, you know, this is a ballot initiative. You know, Gavin Newsom says, oh, this is a ballot initiative. Wait a minute. Seiu, Service Employees International Union, which is a giant union in Nevada that happens to have a very high membership in the state of California with government employees, is the sponsor of the ballot initiative. So all the politicians are saying, oh, this isn't a bill. This isn't a tax that we're putting in. It's a ballot initiative and the people are putting it up. The union blue collar workers are putting it up. Yeah, but who's putting the union up to do this? And the answer is the politicians are. And at the end of the day, people believe, and accusations have been made that at the end of the day, we're going to find Gavin Newsom and Ro Khanna's fingerprints on this somewhere. But right now it's a ballot initiative, which means that the emotion of the voter, driven by half a million of these union workers, and then the lower half, it's going to pass by 55. It can't. That you can't get less than 55% of the vote on this. And so it's going to pass, which is why everybody is handicapping, saying, well, this is a ballot initiative, it's gonna pass because there's no way for it not to pass. How do you find 51% of the people in California that don't are not in favor of, hey, you make 50 grand a year. Tax the rich. Yeah. Okay, Proposition X, I'm in.
- [84:26]
Mark
Right?
- [84:26]
Tom
That's what's going to happen. And so people are out. You read the bill and you gotta go in and build. You Read the ballot initiative and there's a scary part at the bottom of it. They call it the billionaire tax, but it's like giving the government a knob. And they, what do they do with a knob? They just turn it and it's going to extend to others. With one click that's inside the ballot initiative, you can go down to half a billion net worth. So what does this mean?
- [84:52]
Mark
Every homeowner in California.
- [84:53]
Tom
The more which means, the more in trouble California is. This becomes a tool they're going to use.
- [84:59]
Pat
Tom, let me tell you how, let me tell you how I view it.
- [85:01]
Tom
It's not a billionaire tax. It's an asset seizure, progressive over time for bankrupt California.
- [85:07]
Pat
Let me tell you how I viewed this.
- [85:10]
Mark
I appreciate that. I appreciate the color on that.
- [85:12]
Pat
Somebody sends me a minute this morning about decision making, developing, you know, building people, all this other stuff. And this one guy, hey, you know what? If I don't want to do this because of this, I said, listen, the way I make decisions is long term, okay? Parenting long term, you know, finance, long term business investments. We're going on a 40 year run. We got 38 and a half more years left on our 40 year run. Long term, right? So if you sit there and you're playing the long term game, you have to ask yourself, do you think California is more likely to be more business friendly? Do you think they're going to be more likely to be less woke or more woke? Do you think they're going to be a safer environment for your kids? Do you think they're going to be make better decisions for fires, for earthquakes? How do you think they're going to manage crisis? If your level of confidence and optimism says I think long term they're going to be fine, go for it. If it's not, you have to start really thinking about long term. This guy who is running for governor, I met him a couple years ago at a debate. He was, I believe, working with Vivek. Young guy, I want to say he's 31 years old. This guy right here, he proposed a crazy idea, okay, for state of Florida governor that he's running for. And he, I'll let you listen to it. And then I want you to see who got pissed off at him. A girl named Sophie, Sophie Rain brand, am I saying it correctly?
- [86:31]
Brandon
Yes.
- [86:33]
Pat
Responds to him. I'm asking Brandon because. So if you want to.
- [86:36]
Mark
Why Brandon?
- [86:39]
Pat
Rob, go ahead and play this clip.
- [86:40]
Mark
You can tell me later.
- [86:42]
Pat
Here's a guy who's running for governor. Look what he wants to do with Only Fans. Go ahead, Rob.
- [86:46]
Mark
And so if I'm governor of Florida, if I'm elected on August 18, 2026, as the Republican candidate to succeed Ron DeSantis, we're passing a 50% tax on all Only Fans income. And guess what? For Sophie Rain, who is a proud resident of Florida, that means she's going to have to pay $42 million. $42 million, Charles, to the state of Florida, which I'm going to use for two purposes. We're going to increase public school teacher.
- [87:10]
Pat
Pay and we're going to improve school.
- [87:11]
Mark
Lunches, something that Michelle Obama promised and never got around to. And so if I'm.
- [87:16]
Pat
So guess what? This gets out there and guess who responds to it. Rob, I send you the tweet. So she responds, go, go to the next one. She responds, on the top right. Go a little bit closer to the top right. Sounds like you subscribed and got buyer's remorse after dropping your annual salary on an Only Fans girl. He responds, sophie, pay your taxes or quit Only Fans. Those are your choices. I'm running for governor, California governor of Florida, to stop smart and capable woman like you from being exploited by that disgusting platform. What do you think about this, Mark? How do you process this?
- [87:49]
Mark
Well, as a father of two daughters, it makes me sad to think that these girls, that's the only value they can provide to the world. That's what I think. Like, they have so much more capability. Why is that all you can provide towards? But, but, but, but that's how I feel as a father if I zoom out. Only Fans is a platform for content creators. Now, I'm big in the action sports world. We were just at Anaheim one the big Supercross kickoff. And Only Fans is sponsoring Supercross riders where they're having sponsors come on and help them offset their cost of their motocross racing. And they have subscribers that way. So there are other people than just girls that get naked or whatever they're doing on there. Right? So I don't like that girls do this. I think it's sad. I think it's also systemic for the end of a fiat currency where people can't afford to live anymore and they turn to, unfortunately, whatever. They call that the oldest, you know, job in the world. But I don't like that. This is a Bernie Sanders type. This is a socialist type. I'm going to take 50% of your incomes. I don't like what you're doing, and that's wrong.
- [88:49]
Pat
Got it. By the way, apparently the Sophie rain girl made $95 million plus gross earnings through late 2025. That's why he says 50%, you would pay 40 some million bucks. She's shown allegedly that her annual profits, annual earnings is around 40 to $50 million per year. Based on one of her own screenshots. Okay, one of her own screenshots. Tom, your thoughts on this story. This idea of 50% tax on OnlyFans.
- [89:19]
Tom
So I believe the government should step into markets when lead based paint is discovered to cause birth defects and cancer in young kids. So we can't have lead based paint in households when tobacco was discovered for what it is, carcinogenic. However, if free markets are operating with services that are legal and are operating legally, I am deeply against the federal government interfering with those markets.
- [89:50]
Mark
Or even state government.
- [89:51]
Tom
Huh? Or state governments or a state government, I'm against that. Now if we don't like what a business is and we discover what we discover about lead based paint, we discover what we discover about dioxin, we discover what we discover about Roundup weed killer and we scientifically come back and we say, hey, this is no good, this is no good. We can't, we can't. We, you know, we can't be doing this. Then now for the greater good, we're doing it. But if this is a legal industry, then the problem that we have basically is the morality of the populace and we need a better moral compass. And if you're upset about the moral compass, then let's work on that. But if it is legal and you're going out there and you're attacking a mark market, I'm against it. Because remember, one man's demon is another man's saint. So one governor says, I want to take 50% of Sophie Ran's only tax earnings. The next governor says, you know what's even worse than Onlyfans? Social media creating cutting and depression in young girls. I want 50% of Mark Zuckerberg's earnings. You can't do it. If you want to go out and you want to, that's the wrong way to do it. And I'm against it and I'll defend it. But if we come together and say this industry has a problem, it's here, it's here. Hold congressional hearings and then put regulation right, then do that and don't let paint factories dump the, you know, byproduct of slurries into the river. That's good government coming out saying, we can't do this. This is populist positions. And the only difference between him on this position and the ballot industry in California is two different states. You're going after something, you know in the name of something else, and you're interfering with the market that's operating on businesses that are legal, even if you don't like those businesses. Said the father of two girls.
- [91:38]
Mark
I might say this is worse because at least in California, they're bankrupt and they need the money. And let's get it from the billionaires here. He says it right in that last line. I refuse to let smart and capable young women like Sophie Rain be exploited. So this is a moral framing. This is not like, we're bankrupt. We need the money. Let's get it from the billionaires. This is like, I'm going to use lawfare or I'm going to use taxes to try to change the moral compass of the people. I mean, it's a terrible take.
- [92:02]
Tom
Take.
- [92:03]
Pat
It's a terrible take. By the way, this is James Fishback. Brandon, where are you at with this?
- [92:07]
Brandon
Yeah, I, I think it'd be.
- [92:09]
Pat
You look like you're 50. 50.
- [92:11]
Brandon
No, no, no, I, I, I respect the hustle, I guess, in one sense, like, it is reflective of where society is, like, for both men and women. Like, it's sad that you see situations like this with like, the outliers where somebody like her can make $90 million, then probably a couple thousand girls try it, don't make any money, but ruin the reputation. So that is sad. But, but also this guy, I'm calling bs, I think he's just trying to act like Trump and be outrageous and say like a, a big, you know, audacious claim and get some attention that way. But no, it's ridiculous. You can't just like, weaponize the government against things or ways people are making money that you don't like. And by the way, it would be a massive waste of money, probably even more of a waste of money than spending money on only fans to give it to public school teachers. Because, you know, no offense to public school teachers, I'm sure there are some great ones, but, but, you know, they're a part of society. That's a big problem too with like the unions and everything. So, yeah, that's a bad idea.
- [93:05]
Pat
Well, listen, according to what Adam tells us, if this were to pass, Miami would change. Yeah, the nightlife of Miami would change. You would see a lot of school teachers at nightclubs instead of, It'd be a very, very different climate. And, you know, he would definitely not support this. He'd be very disappointed with us.
- [93:23]
Tom
Parting shot you make a good point about the moral compass. Remember, if we as a country just valued life above all else, Roe v. Wade wouldn't matter because we wouldn't. We would ignore that because we would say, no, no, no, we value life. That, that law doesn't matter. The moral compass trumps laws because people will behave by their moral compass.
- [93:42]
Mark
You cannot regulate morality.
- [93:44]
Tom
Exactly.
- [93:45]
Pat
No, you cannot. You cannot. I will tell you, though, I like that a person like him is running, proposing wild ideas and allowing the market to agree or disagree. You as a candidate have to be willing to put some crazy things out there and then see how the market reacts to it. Like last night, I was saying this to the folks we were with, with, we were with at Casa d' Angelo is, look at how Trump works. Here's how Trump works. Yeah, we're going to cap credit cards at 10%, let the market hash it out, debate. No, we're not going to do it. We'll move on. Yeah, we're probably going to be, we're thinking about coming out with a 50 year loan, mortgage loans, what we're going to be doing. Yeah, yeah. And then Bill Pulte comes out this week. Yeah, we're not doing it. Why? Market, you know, you have to almost like pressure test the idea with the market and see and it's, it's such a great way because you know, James is going to watch it. James and I were talking last night on X and I, you know, this is a smart guy, but you got to be willing to test out ideas like this and have smart, fair, reasonable people rip it apart or support it based on their reasoning. And they say, all right, good. Let's move on to the next idea. I don't mind Canada being risky and coming up with some crazy ideas every once in a while. All right, next one here. There's nothing we can do. The great millennial career crisis has given. Has workers given up on ever owning homes or paying off their student loan. This is a Market Watch story. Rob, I don't think you have a video on this one here, but I will, I will go to the store if you got the article you want to bring up. There you go. Christopher Drake, 39, has made a nice career for himself as a process engineer, but he isn't where he'd like to be at this point in his life and career due to what he says are broken promises from growing up as a millennial. It sucks. There's nothing we can do. Drake from Corning, New York, told Market Watch our age bracket was Told you have to go to college, get a degree to be successful. But he found out that even those who worked hard instead of partying during their college years got a serious reality check after graduation. And in the years since then, the jobs aren't there. Drake left college a decade ago with $120,000 in student loan debt, which he says sits at around 150 today, despite years of payments due to high interest rates on his loans. A lot of my friends and I discuss how there are a lot of people our age that have just given up. Drake is going through what many of his peers online are calling the great millennial career crisis, a generational struggle defined by burnout, financial insecurity and a lack of stability by adults ages 29 to 44. Videos of these frustrated 3040 something Americans discussing their personal traits have garnered hundreds of thousands of views on social media, particularly on TikTok. Brandon, your thoughts on this?
- [96:32]
Brandon
Yeah, so I mean it's a victim mindset for him to say this, but it is true that you definitely have to approach life differently today. I think then you did 20, 30 years ago because of the way that things are going with the inflation, the devaluation of money. I do think that it is like a bad situation for you if you just rely on a salary, if you're starting your career off now. Like I don't think that a hundred or two hundred thousand, it's gonna, you know, take care of yourself and the family. So I think that if you don't start a business or if you're not like in a commission based job where there is like uncapped upside for you, you're in a tough situation but it's a victim mindset to say that it's helpless and you're giving up. I think you just have to be more exceptional than ever today as a young person. And that doesn't happen overnight. You know, it's a rigorous thing that you have to be as obsessive about and not everybody's going to do it because it's probably like an 80, 20 thing with people who are ot willing to do what it takes to be exceptional. But that's my opinion on it.
- [97:27]
Pat
How do you feel about it, Mark? Because you know, you, you have two daughters, married 22 years. So this is something where you know, you probably talk to your girls about, you know, their friends probably come over and say, hey Mark, what do you think I should do? All this other stuff, how does this language make you feel and do you agree with them?
- [97:42]
Mark
Yep. So he says Here that due to broken promises. The broken promises are that he went to university. And the problem is that the university gave him a. He, he was, went to a industrial era university that gave him an industrial era lens and equipped him for an industrial era world. And he's now graduated and find out that he's no longer in an industrial era and we've left the information age and we're now in the intelligence age. So they're unequipped, they don't have the right tools, they don't know how to look at the world. And so now the broken promise is that the world that they were equipped for and trained for no longer exists. That's the problem. The paradox is this. It's never been harder to survive right now with a college degree because wages haven't kept up with prices, which is true. But the paradox is that it's never been easier to make money than it is today. We have $20 trillion that was printed in the last five years that's sloshing around in the economy. And with a laptop and some AI you could go make a hundred grand or a million or 10 million very quickly. So it's never been harder with industrial air lens. It's never been easier. If you could realize that the world has changed. So how do I answer this as a father of two? Neither of my daughters are going to college.
- [98:51]
Pat
Really?
- [98:52]
Mark
No, no way. No way.
- [98:54]
Pat
The number, what grade are they in right now?
- [98:56]
Mark
I have a 21 year old daughter and a 16 year old daughter. So one's a junior, one's out.
- [98:59]
Pat
So the one that's out, what does she do?
- [99:02]
Mark
She's learning how to make money.
- [99:04]
Pat
Is she having a hard time doing it?
- [99:05]
Mark
No, she's making money. She's making money very easily. So she's, she went, she went to a trade school. Okay, she went to a trade school, she became a, a holistic health coach. Okay, so she spent $10,000. 5,000 plus another 5,000 a trade school. Right. She's holistic health coach, she's doing holistic chefing. She just got her Pilates certification. She has built up a decent audience. She's selling diet plans and like she's making money. She's not looking for a job. My kids never look for a job, they just learned how to make money.
- [99:37]
Pat
How was she in school? Like what was her GPA? Was she.
- [99:41]
Mark
Yeah, she was, yeah. 4.0 all the way.
- [99:43]
Pat
So no problem with grade?
- [99:44]
Mark
Sort of like me. She was, didn't have to try. She, she did very well. But there was no university for her. I believe in the intelligence age, even the information age, the single most important skill is creativity. Because now we have technical workers at our disposal. So now I have to see a problem, have a creative way to solve the problem and I have to organize the orchestra to play the song that I want. Right. And so school is specifically designed to remove creativity. That is the intended purpose, to remove creativity and keep people in a box. The number one thing we need today. That's why people like this get out. And they can't see all the opportunity because they have zero creativity.
- [100:19]
Pat
Okay, so this is a great folks. This is phenomenal for you. Let me explain to you why you have two girls, 21 and 16, neither one of them, you're saying are going to college. Tom, you have two girls, 19 and 14. Right? Am I saying it correctly?
- [100:34]
Tom
That's exactly right.
- [100:35]
Pat
So that means. Exactly. Your girls are two years apart. The oldest, they're five years apart. Five years apart, right. So he's behind you by two. Your oldest goes to a very well known school. She got a 1560 on her SATs and she's going to the college route. How different is your position than the one Mark just gave?
- [100:54]
Tom
Well, my oldest is majoring in two stem. She's a double major, statistics and analytics. And she is spending herself looking over my shoulder at startups and the engine of new business. So I would not have sent her simply to be a chemical engineer and.
- [101:16]
Mark
Come back with you or a liberal arts degree.
- [101:18]
Tom
Oh yeah, well that's off the table. We had a joke at our house and went like this. If you want to go study European art history at the Sorbonne in France, I hope your boyfriend has wealthy parents that love you more than I do. They're willing to pay that bill. So that was always off the table. So she has a mentality of. Right now she's coding in R, she's coding in Python, she's in statistics and in five years she will have a double major and a master's of stats.
- [101:44]
Mark
Amazing.
- [101:44]
Tom
However, our focus on this is that weaponizes you to do what you want or to engage with a startup. Last year, her freshman to sophomore summer break, she did six weeks with a startup working with them. And before that her break between senior year and freshman year, she did nine weeks with a startup. That one was remote. But I'm putting her in the river of creativity of people are doing things for the future. But if that wasn't available, she wouldn't her funny we bring this up. Her little sister, we often talk now Because I talk more to the little one than the older one. Because the little one's now an only child.
- [102:30]
Mark
Right.
- [102:31]
Tom
Because her five year older sister is at school. Right. And so we've had these conversations recently. You know, if you, if you think of something, maybe you're Mark Zuckerberg, maybe you don't go to college.
- [102:41]
Mark
Yeah.
- [102:42]
Tom
But I want to put you in the river of creativity so you can see what new businesses are doing and what they're thinking.
- [102:47]
Mark
Yeah.
- [102:47]
Tom
Because she has a non blood uncle that's sitting right over here and she knows his educational background and what he built and where he went and what he did. And she has seen the conventions and the result of it. So we're a split household right now.
- [103:04]
Mark
Here's where we align. I believe that college is an important path for many people. I certainly want my heart surgeon to have gone to college if I were to have heart surgery. But college was never meant for the masses. So college was for elite people to get elite training to get elite jobs. It was never for the masses.
- [103:20]
Tom
Now cardiologists are nuclear physicists.
- [103:22]
Mark
Right. And now you have the masses that are in there. And it's a supply demand thing. There's not enough elite level jobs, jobs. So the old days was go to school, get a good job. But, but that, that's passed. It's not, it's not mass number two. What I would say to that is that if you need that specialty training like the stem and follow her dad, that's great. Most people don't. A trade school like my daughter went to I think is good enough. And I would just also reframe what I think trade schools are today. So I think trades, if you break it down, is a specialty skill. So we typically think of it as like a blue collar skill, welding, plumbing, framing, something like that. And if I wanted to build a house or a building, I would call in trades. Right. But today we have digital trades, we have soft trades. So if I want to build a business, I also call in trades. A social media person, an accountant, a bookkeeper, a video editor. And those are also trades as well today. And so I think a lot of people could just go to school or learn how to be a video editor, or learn how to be a social media manager, or learn how to be a copywriter. And they could make a lot of money applying those trades to multiple businesses. I think the world's changed and most people just need to capture.
- [104:26]
Pat
I like what both of you guys said because the way I judge people's kids is in the following way. And I'll test them all the time and they don't even know I'm doing it. We'll go to dinner and I'll just ask pointed questions. So, Bailey, what do you think about this? What do you think about that? Brooke, what do you think about it? What happens with kids with this? What are kids in school right now saying about what happened with Charlie Kirk? What are they saying about what's going on with Iran? What are they saying about this person that's a content creator? What do they think about this? And I'll do this with Grace. I'll do this for my niece. You know, she asked me questions about Israel, she'll ask me questions about Iran. Like controversial topics. I want to ask them to see how if their brain is creative enough to process the issue. And then I'll ask someone. I'm like, yeah, I don't know. Yeah, yeah. Who? No, I don't know. I don't care. I don't. This, that's a lazy way of thinking. And your parents made you think that way.
- [105:17]
Mark
Yeah.
- [105:17]
Pat
So you can have two parents. One goes the university route, one goes the, you know, no college route. And they can both end up being successful because the parents are teaching critical thinking. There's too many empty conversations. Like yesterday, Dylan and I are sitting and he's doing homework. It's another one of those nights. Time to 11:30 is doing homework. Now here's the part. He had basketball game and practice yesterday. And he had a three hour soccer practice. So the guy leaves school at 3O'. Clock, basketball till 4:30, soccer till 9:30, comes home, showers 10:15, sitting with me. We're there till midnight doing homework together. And you know, I'm stuck on this thing. Why are you stuck on it? Well, if the area of the triangle is 15.3 and the base is four and a half, I'm giving you the exact numbers, four and a half. And the formula is area equals half times base versus height. What is the height? Well, okay. What is half of, you know, 4.5, 2.25. Okay, what is 15.3 divided by 2.25? I don't know how to do that. Yes, you do. What's 1530 divided by 225? Well, I can do that. Well then just move a couple decimal points. Go ahead and do that. What's the number? Comes out with 6.8. That's exactly the number I run to. What happened here? I got the number right?
- [106:31]
Mark
Yeah.
- [106:31]
Pat
You know how to do this stuff like you Got to push critical thinking. You got to push for them to come up with a solution. And sometimes I think we waste too much time talking nonsense. Like, even if you're watching football, ask the question, do you think that was the right play? Do you think they did the right thing? Do you think they should have called the timeout? You think that the timeout was at the right time? Should he have, you know, what do you call intentional grounding? Or should I have done that to save the timeout? That would have taken six seconds. Why did they call a timeout? These are moments to use the brain to do critical thinking. I don't know what percentage of parents do that. If you're in our environment, and I bet it's probably the same with you as well. We're always asking stuff like this, and it's strategic. Tom, I think you want to say.
- [107:10]
Tom
Something because what you just said was so funny, because Bailey and I spent time watching NFL playoff game that had teams that we didn't really care one way or the other about. We're just waiting for the Niner games so mom can go crazy. None of us, the rest of us are Niner fans. And we were talking about coaching decision making, and Bailey came to conclusion at the end, says, well, no wonder they're talking about firing that guy, even if they win this game. Because we're talking about decision making. We weren't talking about football. What a great play. What an athlete. No, it's like, why would he make that decision like that? Why would he risk that? Why would they do that? I said, well, maybe the guy's hurt. Maybe he's here. Well, it certainly didn't turn out well. And he owns a decision, doesn't he? I said, he sure does. Well, no wonder people want to fire him.
- [107:51]
Pat
Yeah, yeah. And I just think that's the muscle, that if parents are watching this and they're kind of like, well, I'm part of Mark's camp now. I'm part of Tom's camp. As long as you're part of the critical thinking camp, your kids are going to be fine. Long term. If you're not having these types of questions you're posing to them, you're going to have your kids that don't know how to think for themselves and make arguments, present your argument why you believe this is the case.
- [108:16]
Mark
If I could just add on to that, just real quickly, I would just frame this as that I am not against education. I'm 100% pro voracious education. But education is something that you're interested in that helps you solve the problem to take you to the path that you want to go down.
- [108:31]
Pat
I agree. Brandon, you're say something or can we move on?
- [108:34]
Brandon
You can move on.
- [108:34]
Pat
Okay, let's get to the next story. Brandon, when you have two girls that are five years apart, I'll come back to you.
- [108:40]
Brandon
Okay.
- [108:44]
Pat
All right, next story, which I have some opinions on and some creativity. I want to know what you guys think about that. This. Nissan cancels the Versa. Rob, can you pull up what the Versa was supposed to look like? Nissan Versa, America's last new car for under $20,000. As automakers lean towards wealthier buyers. Okay, so the sub twenty thousand dollar car is dead. Nissan has canceled last new car for sale that was supposed to be under 20K. In a statement, the company said in line with Nissan's product strategy, the Nissan Versa ended up production in December for 2025. For the US market, Versa sedans under $20,000 were already a near myth. Only the bare bones base model, the Versa s qualified and few dealers stock them. Trim stock that trim. Its formal cancellation, however, means you can't order a new car under warranty for less than $20,000. The VERSA joins a long list of subcomp compact model cars that were canceled in the recent years. The Chevy Spark. Can we see what the Chevy Spark looks like, Rob? The Chevy Spark, America's latest least expensive new car for several years left the market in 22. So did the Hyundai. Wow. So did the Hyundai Accent. Let's see what the Hyundai Accent looks like.
- [109:59]
Tom
These all look like European city cars, don't they?
- [110:01]
Pat
Right. Then the Kia Rio and the Mitsubishi mirage followed in 22. That looks like a good car could start a car. And then the Mitsubishi Mirage if you want to pull it up. KBB research showed that the Versa s virtually impossible to find. The last sub $20,000 car in 2017, they built 61 models priced at $60,000 or more. By the end of 2025, they built 114 at the other end of the market in 2017, they offered 36 models priced at 25k or less. So is this a good move? Is this just a new reality? Mark your thoughts on this.
- [110:38]
Mark
Well, again, we kind of have been talking quite a bit about free markets and so if there was a demand for that and they could produce that car at a good profit, they would obviously they would continue to do that. The profit margins of automobile manufacturers are extremely thin. We've talked about this. I believe they're single digits. Right. So they're extremely thin. Most of the cars. A lot of the cars that they sell specifically around the hybrid and evs are. Are losses for them. Right. And so they're. They're dealing with government forcing them to build certain types of cars. They take losses on those. Ford makes money back on their F150s. They can even it out. But, yeah, I would say back to the free market. Right. If they could produce these cars at a good profit, they probably would. The reason why they can't is, again, because of the regulations. On Twitter, maybe in my echo chamber, I see quite a bit in other countries. They have these, like, Toyota trucks that are like, everybody wishes they could get in the US they're like $15,000, and they're really cool.
- [111:30]
Pat
And like, is this the one Humberto talks about? Can. Can we pull up which ones you're talking Toyota trucks.
- [111:34]
Mark
Yeah, it's like a. It's like a Toyota truck. It's sort of like a military vehicle. Yeah, like $15,000, the Hilux. And. And these are in other countries, and people are like, why can't we get this in the United States for 15 grand? Or whatever. Right, but they don't pass safety. They don't pass epa. Yes, whatever. Whatever. Whatever. Right. And so, unfortunately, because of the regulations that we have here, just like we talked about with homes earlier, the cost to produce a car in the United States is just too expensive. And so it cuts out this bottom part of the market. Not because I'm sure there's demand for a cheap car, but they can't produce it at a good margin.
- [112:07]
Pat
Tom, thoughts?
- [112:08]
Tom
Yeah, I think I agree with that, and I won't repeat it, but I'll bring something else up, is that the modern generation is increasingly getting to be a rental generation on vehicles.
- [112:17]
Pat
That, too.
- [112:18]
Tom
You see, kids are getting trained. I'll give you an example where Bailey goes to college. The campus is in a large US City. However, there's not enough parking. So until you're a junior, you can't get a parking permit on campus because there's simply not enough space.
- [112:33]
Mark
Yeah.
- [112:34]
Tom
And so what most of the students do is they're. They go Uber, and Bailey's got a credit card. I can see what's going on on there. She's very good, Keeps a very tight allowance, Very responsible. But I see where she goes, oh, they went down and saw the Astros. Why the hell would you go to the Astros? But, okay, but she took. Obviously she went with some friends, and again, guess what? Then I see her checking account, and I see, oh, 20 bucks from this person, 15 bucks for this person. Looks like Bailey paid, but got paid back. Okay. And I'm seeing the way Pat, the youth and the new generation consumes automobiles and they are increasingly permanent renters. We had a highly compensated woman that was here that was leading a technology project. She didn't own a car and she had a high end degree from a high end school and was a high end performer, but she was Uber, Uber here, Uber back, Uber to, Uber to lunch. And so you, you also have the increasing with cost of insurance and need a garage, need a place to store it. People turning to the Waymos which are going to be more rather than less and Uber and Lyft and they just, they will just pay for the portion of the car they need, which is a trip to work, trip back. And so that takes demand also away from the low end cars.
- [113:55]
Mark
I live in a rural beach community, so not in a city. And I'm also seeing the same thing. So my friends or my daughter's friends who are teenagers, a lot of them are delaying getting their license. They're 18, they're 19, they're 20. Because they're just using Uber and Lyft.
- [114:08]
Pat
Yeah, that's becoming a norm. A lot of people are talking about that. We got it. We got a 46 year old that's going through that right now. I don't want to give him any shout outs right now, but Brandon, go ahead.
- [114:19]
Brandon
That's funny.
- [114:20]
Tom
Now something who still lives at home sits on the couch.
- [114:24]
Brandon
Something's deeply wrong here where like normally the, the laws of business or manufacturing or creating a product is that it gets cheaper and easier to make over time. So you know, something's fundamentally wrong here with like the structure of things or something like one piece of it where it's somehow getting more and more expensive to manufacture because you're supposed to be able to make it cheaper and then have better margins on it. So the, like you said, the fact that there's all these regulations involved, you know, it also goes down to the cost of materials and like those are like a whole nother thing. Why that's expensive like steel and components and copper and all that. But yeah, like this is a core function of, of the cost of living, like the food, housing, transportation. Always say those three things, like that's what creates poverty and non poverty. Like if people could afford those things reasonably with an average salary, it becomes.
- [115:15]
Pat
What do you do? I mean to me like when I'm thinking about if we put a room together of 10 people to debate, maybe seven people to debate this on cars, what to do to bring affordability. Would we leave it to free market or if there's a place for the government to intervene? Remember when EV companies were getting the $7,500 rebate and it was kind of a thing that drove it? The rebate went away. It's kind of like, yeah, maybe I'm not doing it right. What if you gave a $5,000 rebate for a company that produces a car less than $20,000? What if you put that there? What if you create that incentive now? I want you to tear it apart.
- [115:53]
Mark
We can get the Toyota truck in here for 15 grand right now.
- [115:55]
Pat
But, but, but the part of it is, you know, why the cars. The average truck size 40 years ago was 14ft, you know, now the average truck size is 22ft. We have 22 foot trucks. You know what 22ft is, by the way? 22ft. That's not the average truck size, but that's the big ones that they make. 22ft is three of me plus three more feet. That's insane for a truck to be that big. So they created regulations for trucks to be bigger. But what I'm saying is they sit in a room, they limited some of this nonsense regulation that they have in place. And then the automaker problem that they have, Mark, is there is federal regulation, there is state regulation. So these automakers are sitting there saying, I'm not going to produce this car. Why, forget about federal. Whatever your laws are, California is the one that screw me over, right? So, yeah, I'll produce the car. But for what? Kansas, for what? Idaho? I need to be in la. I need to be in New York, I need to be in Illinois. And these are the places that are overregulating. So then does the president come over, executive order, and no state can do this. So it's a little bit complicated. But if they were able to sit down kind of like the Sanders and Hawley, and they're trying to figure out this 10% thing and debate it out, if we created incentives for companies to create, you know, less than $20,000 cars. Now I'm going buying a $19,000 car. Say the company gets a $5,000 bonus on the back end for producing a car like that. Now kids coming out of college can buy a $19,000 car. I don't know. I think, I think there's creative ways of doing it. The problem with automakers is not federal regulation. It's state by state. That's Preventing a lot of guys from getting involved.
- [117:35]
Brandon
Brandon, should it be like the AI thing where they did the federal AI bill and I'm not saying that's a good idea, I'm just tossing it out there. You think that'd be helpful if there was like a federal emissions standard, like in Connecticut and in California, New York, you have to pass the emissions test every year. They have to build a car to emit a certain amount of emissions or limited to a certain amount of emissions. Would it be beneficial, do you think, from a light regulatory standpoint if we did had a federal laws like that?
- [117:58]
Mark
No, no. The reason why I'd say is we need less laws, we need less regulations. So the problem is we just continue to add more and more and more and more and more and it gets too many. So I believe in Trump's first term, for every new regulation, I think three were removed. I think he's way outpacing that right now. And so really it's not more laws, it's reducing the laws that we have.
- [118:18]
Brandon
Take away the ability for a state to put a mission mandate, maybe then.
- [118:22]
Mark
I mean, I'm not an auto expert, so I don't know all the different costs, but, like, we can certainly understand a lot of those. Why Toyota can't sell that truck in the United States. Yeah, like, that would be the, that would be the question. But it's why can't Toyota?
- [118:34]
Pat
You're right.
- [118:34]
Mark
Who sells in the US Why can't Toyota sell that car here?
- [118:37]
Pat
I agree, but it's, it's truly, we've done this. You and I put this case study to you. It's purely regulation by state. State, not federal. He controls federal, he doesn't control state. So even if he deregulates federal regulation, he can't deregulate state regulation. Newsom's gonna sit in front of him and says, no, I wanna keep this regulation here. If Newsom was okay losing musk, you think he gives a shit about losing like a couple of these? No, he doesn't care about that kind of stuff. Tom, I'll give you final thoughts and I'll do one story and we'll wrap up.
- [119:07]
Tom
No, I agree with him. You take a look at what's happening with AI. The states are coming out with AI regulations on their own, which are complicating it. But some of the AI regulation has got nothing to do with AI, has to do with data centers increasing the cost of electricities for average communities. Because they put a data center here. It sucked all the.
- [119:25]
Pat
Oh, Tom, can You talk about what Trump did with Microsoft. Oh, I just real quick, give that one minute. On the way he managed that project with Microsoft.
- [119:35]
Tom
Microsoft, he negotiated with Microsoft. And Microsoft has agreed that they will not build data centers that put the burden of energy demand into a price increase on the consumer. That if they're building the data center that they will figure out power. Either they'll self subsidize or they will build their small nuke Generation 5, Generation 6, I believe they're called small nuclear reactors. That's there to provide electricity for the data center. So that what happens is good expansion and creation of jobs. A data center people say, well it only creates so many jobs. Yeah, I've heard it creates 300 jobs to build it and then 30 jobs to live there. Okay, but it's jobs. But data centers use a lot of power. And when you use too much power, the surrounding area, the price of power will go up because there's a shortage. So Trump negotiated with Microsoft and said, hey, I want you to pay for the electricity so that you don't impact the affordability of the community. And guess what? They agreed. So this is good leadership without regulation, because they came to an agreement on this without a law, without a regulation.
- [120:45]
Pat
I agree.
- [120:46]
Mark
What I would say though is they would love to do that, but the regulations prohibit them from building the smart nuclear reactors. I think of a quote from Ayn Rand. She said that when you have to ask permission to produce from men who produce nothing. Oh, that's where we're at.
- [121:03]
Pat
Man. Where's Ayn Rand? We need her today. Going back and watching her interview with Phil Donahue and all the other stuff. But anyways, let me wrap up with the story here. FYI, you guys heard number the second company that just crossed $4 trillion in valuation is officially Google. Not Apple, not Microsoft, is officially Google is not the number two.4 trillion auto company. And the two founders both moved to Florida. One bought 174 million dollar. He bought two homes at 174. And I think the other one's buying something as well. I don't know what it is. I think the other one moved to Florida and I think one of the guys moved 46 LLCs, which is really the big one that Tom was talking about. But let me tell you a story, Rob, if you want to pull this up, this is why Iranians around the world are talking about bringing back freedom to Iran. Look at the story here. This is Irfan Sultani. The Islamic Republic is set to execute Irrfan Sultani Today he was arrested last week during Iran's 2026 uprising. His only crime is calling for freedom for Iran. And while you go a little bit deeper into understanding how Iran works, all this guy did is he says, hey, I just don't want this current regime. I don't want the irgc, okay? And so Iranian authorities have charged him with waging war against God. Can you imagine if you can have that in a country you live in? You choose that God is not happy with you. Did God text you? Did God email you? Did your God send a notice? Did you get a package from him that came from heaven? How did you know that God? Or did you just decide who your God is and what your God thinks about? It's kind of like pastors that they'll read scripture and they'll say based on the scripture. I have a feeling what God was telling me last night that you need to give 40%. You know, these preachers, that they're doing all these interviews that the guys that are using their scripture to get money out of people, that's what Iran is doing today. So we're praying for IRFAN SULTANI, this 26 year old man, for the people that are out there that the mainstream media maybe is not covering this enough. These are stories that need to be out there because this 26 year old boy, all he's saying is, he's saying, let us be free. And we are hoping this noise of the people that they're making around the world gets to Iran, gets to them realizing what's going on with the fear that President Trump is imposing on them to realize, leave these people alone. This is why people don't want your regime anymore in Iran. We're praying for them. I'm about to jump on. I think I'm about to jump on the truck is outside. I'm about to jump on one of the shows and I'll be talking about what's going on with Iran here in a minute. But Mark actually really enjoyed having you on, man. This was great. Really. Like, I like your very. The way you process issues and the way you answered is in a very structured way of me being able to consume what you're thinking about. No wonder your YouTube channel is blowing up and you're growing the way you have in six or seven years of doing what you're doing. Folks, if you're watching this, you like what Mark had to say. Here's his channel. He's not only smart, but he's also kind of Hollywood. He's got that Hollywood look. Can you just tell when you look at him? He's a Hollywood look. Listen, maybe Mike Tyson was right with Mark. I don't know. It's expensive to live in heaven. I can't live in the heaven. He lives in California. But aside from that, we'll forgive him with the California stuff. Everything else. Go support this man. His channel is right there. Wealth is not earned. It's engineered. Go to Mark Moss. Rob, let's put the link below so people can subscribe to his channel. With that being said, we have a podcast on Friday. We may do a couple other things the next couple days, but we definitely have a podcast on Friday. Take care, everybody. God bless. Bye, bye. Bye, bye.