Prof G Markets — "Government Shutdown Ends — But the Damage Doesn’t"

Date: November 13, 2025
Host: Ed Elson
Featured Guests: Ramit Sethi, Dylan Cardin, Robert Sockin

Episode Overview

This episode of Prof G Markets dives into the end of the longest U.S. government shutdown in history, unpacking not only its direct and indirect economic damage but also systemic issues in housing and the athletic apparel sector. Host Ed Elson, with guests Ramit Sethi (personal finance expert), Dylan Cardin (equity analyst), and Robert Sockin (economist), provides pointed, often blunt analysis of recent market moves and policy news, all in the show’s signature “no mercy, no malice” tone.

Key Topics & Discussions

1. Market Update & New 50-Year Mortgage Proposal

[02:07–11:19]

Market Recap

• Dow at a record ahead of shutdown vote
• S&P 500 flat, Nasdaq down
• 10-year Treasury yield fell
• Bitcoin trending towards $100,000
• Gold up

The Trump Administration's 50-Year Mortgage Proposal

Guest: Ramit Sethi (personal finance author & podcaster)

• Aim: Make monthly payments lower for new buyers.
• Critique: “It’s one of the worst policies I’ve heard in recent years.” (Ramit Sethi, 04:19)
• The "Grift": The plan saves ~$300/month but costs an extra ~$500,000 in interest for a typical $500,000 home.

  “...they're going to pay an extra half a million dollars in interest.”
  — Ramit Sethi, 05:01

• American Mortgage Math Illiteracy: Most buyers base decisions on monthly payment, not total cost.

  “The American consumer typically does not understand how mortgages work. That's why they are so profitable.”
  — Ramit Sethi, 05:14

The "Religion of Homeownership"

• Americans treat homeownership as dogma, relying on clichés like “You’re throwing money away on rent.”
• Fewer than 3% of buyers run true buy-vs-rent calculations.
• Most don’t grasp basic math of amortization or principal vs. interest.

Effects of a 50-Year Mortgage

• Likely further inflation of home prices.
• Most people “...will not understand why they cannot seem to afford their day-to-day.” (Ramit Sethi, 09:07)
• Neglect of other ownership costs.

Core Problem & Solution

• Problem: Not enough supply, due to NIMBYism.

  “Housing is virtually... illegal to build.”
  — Ramit Sethi, 10:07

• Solution: “There is only one solution and that is to build more housing.”
  — Ramit Sethi, 10:03
• Good news: Some progress in CA & NY; still a long way to go.

2. Earnings Spotlight: On Running and Athletic Wear Market

[11:24–18:47]

Guest: Dylan Cardin, Senior Analyst at William Blair

• On Running (ON) Stock Surge:

  • Crushed expectations; stock up 20%
  • Full-year sales guidance raised to $3.7B
  • Net income nearly quadrupled YoY

• Market Context:

  • Athletic wear stocks struggling (Nike -15%, Adidas -30%, Hoka’s parent -60%)
  • ON outperforming despite trend headwinds

Trends in Athletic Footwear

• Pandemic winners (ON, Hoka, Saucony, Allbirds) now facing deceleration.

  “You get about six years of the trend. And from a stock perspective, you really want to only own the first three...”
  — Dylan Cardin, 13:51

• Previous Nike withdrawal from wholesale allowed new brands shelf space.
• Nike: Growth is limited by size; recent ‘return to channel’ is more about recapture than real acceleration.

What's Required to Be "The Next Nike"?

• Key: Reinvention, “stacking up” product hype cycles

  “Beware any narrative that is the next anything, in my view. But the real... fundamental... is just reinvention.”
  — Dylan Cardin, 16:05

• ON’s path: Extension into tennis, hiking, training, capitalizing on lifestyle shifts.

ON’s Premium Positioning

• ON targets a $150/shoe space (“premium, not luxury”).

  “I think the risk is that there’s not as much white space there... Just given that higher price point.”
  — Dylan Cardin, 18:16

• Skepticism around the actual size of this market segment.

3. Deep Dive: Economic Impact of the Government Shutdown

[22:00–30:33]

Guest: Robert Sockin, Senior Global Economist at Citi

Historic Scope

• 43 days: Longest U.S. shutdown ever.

  "I think this is going to be remembered as a very challenging period politically and economically."
  — Robert Sockin, 23:05

Economic Effects

• Direct: Furloughed workers, paused SNAP benefits, halted procurements—most recoverable.
• Indirect: Private sector spillover in DC-area businesses, some losses likely permanent.

  “The private sector spillovers are much harder to measure in real time...”
  — Robert Sockin, 24:36

Data Blackout

• Key Reports Delayed or Missed: Jobs, inflation, GDP—leaving economists “flying blind.”

  “It's created a really challenging backdrop. And I think [it] is going to continue... over the next few months.”
  — Robert Sockin, 26:12

• Even upcoming data (Nov-Dec) will be low quality due to collection gaps.

Why This Shutdown is Uniquely Damaging

• Prior shutdown losses typically recouped.
• Length triggers “nonlinear” risk of growing private sector damages over time.

  “The longer a shutdown goes on, the higher risk that the economic effects become nonlinear and you get bigger effects later on.”
  — Robert Sockin, 28:15

Future Fear

• Expect shutdown frequency to rise due to political gridlock.

  “...that means shutdowns are more likely going forward.”
  — Robert Sockin, 29:34

4. Host Commentary: “This is a Huge Deal”

[30:33–End]

Ed Elson’s Closing Reflection:

• Shutdown was unprecedented—a week longer than the previous record.

• 1.5 million direct federal employees affected; programs like SNAP (used by 40M Americans) interrupted.

• 6% of flights canceled due to lack of air traffic controllers.

• Loss of crucial federal data has made tracking the actual economic impacts nearly impossible.

• "We can try to put a number on it. The current estimates say that the cost to the economy were nearly $100 billion. But even that is probably an understatement because the other problem we have here is we're not getting any proper data."
  — Ed Elson, 31:45

• Argues that news coverage fails to capture the shutdown’s true harm because of headline fatigue.

• Raises call to not “normalize” this scale of government dysfunction.

  “The least we should expect is a government that is operational. And for 43 days, the longest period in history, this government couldn't even meet that standard.”
  — Ed Elson, 32:54

Notable Quotes & Timestamps

• Ramit Sethi on 50-Year Mortgages:
  “It’s one of the worst policies I’ve heard in recent years.” (04:19)

• Ramit Sethi on American mortgage illiteracy:
  “The American consumer typically does not understand how mortgages work. That’s why they are so profitable.” (05:14)

• Ramit Sethi on housing policy:
  “There is only one solution and that is to build more housing.” (10:03)

• Dylan Cardin on sneaker trends:
  “You get about six years of the trend. And from a stock perspective, you really want to only own the first three...” (13:51)

• Dylan Cardin on hype cycles:
  “Beware any narrative that is the next anything, in my view. But the real... fundamental... is just reinvention.” (16:05)

• Robert Sockin on economic recovery after the shutdown:
  “The private sector spillovers are much harder to measure in real time...” (24:36)

• Robert Sockin on the shutdown’s lasting risk:
  “The longer a shutdown goes on, the higher risk that the economic effects become nonlinear and you get bigger effects later on.” (28:15)

• Ed Elson (host) on significance:
  “It is all a distraction from what a disaster this really was... the least we should expect is a government that is operational.” (32:42–32:54)

Important Timestamps

• 00:00–02:07 — Ad reads and show open
• 02:07–11:19 — 50-year mortgage policy & homeownership debate with Ramit Sethi
• 11:24–18:47 — On Running earnings, market cycles, and Nike context with Dylan Cardin
• 22:00–30:33 — Government shutdown analysis and economic impact with Robert Sockin
• 30:33–End — Ed Elson’s commentary on the true significance of the shutdown

Key Takeaways

• The government shutdown, though ending, may inflict lasting economic wounds, especially outside direct federal activity—losses extend to data quality, local businesses, and future political stability.
• Housing policy “fixes” like the 50-year mortgage are largely seen by experts as predatory and miss the real solution: vastly increasing housing supply.
• Athletic wear sector trends are fickle; ON succeeds via reinvention, but skepticism remains about how much runway "premium" brands truly have.
• The episode urges listeners not to lose sight of the unprecedented dysfunction represented by the shutdown—even if “headline fatigue” makes it easy to look away.