1 00:00:00,120 --> 00:00:05,080 Spending growth asked to Inflation is not as strong as it was, but it's 2 00:00:05,120 --> 00:00:09,279 still there. You know, it's still growing and it's growing at rates of 3 00:00:09,400 --> 00:00:15,320 worth similarly before the pandemic. And yeah, so the consumers hanging in there 4 00:00:15,320 --> 00:00:19,640 though it's other parts of the economy that are hiving will problems. You're listening 5 00:00:19,640 --> 00:00:25,399 to Carrie Letts's Financial Survival Network where you get valuable information you just can't find 6 00:00:25,440 --> 00:00:31,519 anywhere else to thrive in today's trying times. You need the Financial Survival Network 7 00:00:31,839 --> 00:00:36,759 now more than ever. Go to Financial Survival Network dot com and get your 8 00:00:36,840 --> 00:00:47,159 free newsletter and gift. Financial Survival Network now more than ever. And welcome. 9 00:00:47,359 --> 00:00:51,200 You are listening to watching the Financial Survival Network. I'm your host, 10 00:00:51,320 --> 00:00:55,920 Carrie Lutts. Well, hey, economy, it looks like it's imploding, 11 00:00:56,079 --> 00:01:02,119 or maybe it's a slow ocean implosion right before area is housing down in many 12 00:01:02,159 --> 00:01:06,840 areas, auto sales, economy, interest rates. We got Wolf Richter with 13 00:01:06,959 --> 00:01:11,280 us now from wolf street dot com. Wolf great to have you back on. 14 00:01:11,519 --> 00:01:15,640 So what do you make of the economy now? Hi, Kerry, 15 00:01:15,719 --> 00:01:19,920 Yeah, I mean it's it's an interesting economy. Economy and um, I've 16 00:01:19,959 --> 00:01:25,120 never seen anything like this. Yeah, the consumer is still hanging in there 17 00:01:25,560 --> 00:01:29,079 like a server, is still swimming in money, and uh so they're still 18 00:01:29,079 --> 00:01:32,439 spending, which is a problem for the fit because you know, they're trying 19 00:01:32,439 --> 00:01:37,040 to get inflation down and so they're raising interest rates and the consumers are not 20 00:01:37,079 --> 00:01:41,280 cooperating. So now we've got high interest rates that are really harding the banks. 21 00:01:42,200 --> 00:01:45,480 Uh we've got you know, we've got there. We already had a 22 00:01:45,519 --> 00:01:49,159 handful of them inpload and and there's stressed many other banks of stress. So 23 00:01:49,280 --> 00:01:56,120 that's that's an issue we've got. Uh And so that's the financial system that 24 00:01:56,239 --> 00:02:00,319 is now struggling. And then on top of that, of course, we 25 00:02:00,319 --> 00:02:05,760 we have this uncertainty about the US default. So meanwhile the consumers just blowing 26 00:02:05,840 --> 00:02:09,639 it all off and just spending money handle a fast. So that's the Alfred 27 00:02:09,680 --> 00:02:15,719 E. Newman economy, remember him, what me worry? That's that's that. 28 00:02:16,280 --> 00:02:21,479 Yeah. Yeah, So how long does this go on for it till 29 00:02:22,240 --> 00:02:27,639 till the consumer starts, uh facing reality. Well, we we've seen some 30 00:02:27,800 --> 00:02:31,280 layoffs, but these people that have gotten layoff laid off in the techn social 31 00:02:31,400 --> 00:02:38,400 media uh sector, stuff got to rehigh end pretty quickly and uh, sometimes 32 00:02:38,439 --> 00:02:43,479 outside of tech and social media and lots of other companies that look for talenter 33 00:02:43,520 --> 00:02:50,479 this type. And so we really haven't seen, uh in the big increases 34 00:02:50,639 --> 00:02:53,840 and unemployed people, you know, so that that's not happening yet, and 35 00:02:53,879 --> 00:02:58,240 it's going to eventually happen maybe you know, but it's not. It hasn't 36 00:02:58,240 --> 00:03:02,520 happened yet. So that's the incomes stream of many Americans and that's still holding 37 00:03:02,560 --> 00:03:07,960 up. They've gotten the biggest pay raises in for decades and they're working and 38 00:03:07,479 --> 00:03:12,879 so you know, that's that's doing pretty good. And then you know, 39 00:03:12,960 --> 00:03:15,479 you have all these other people, the retirees and others that live off their 40 00:03:15,479 --> 00:03:22,639 fixed incomes and yeah, you're talking about twenty twllion dollars in in UH treasury 41 00:03:22,719 --> 00:03:27,120 bills and money market funds and in savings products and they're now making five percent 42 00:03:27,360 --> 00:03:30,240 income yet on their money and they made zero but send essentially a year and 43 00:03:30,240 --> 00:03:35,479 a half ago. So they're starting to spend this money and this is propping 44 00:03:35,599 --> 00:03:38,919 up spending. Two. So we've got all the stuff going on on the 45 00:03:38,960 --> 00:03:44,400 spending side, uh in terms of consumers, and we haven't seen any disruption 46 00:03:44,439 --> 00:03:47,879 to that yet. Yeah, that's it's it's i mean, spending growth after 47 00:03:47,960 --> 00:03:53,439 inflation is not as strong as it was, but it's still there. You 48 00:03:53,439 --> 00:03:58,319 know, it's still growing and uh it's growing at rates and worth similar before 49 00:03:58,400 --> 00:04:01,719 the pandemic. And um, yeah, so the consumers hanging in there. 50 00:04:01,719 --> 00:04:05,439 There's other parts of the economy that that are having real problems. Yeah, 51 00:04:05,479 --> 00:04:09,919 the banks, we're talking about that from a minute ago. Companies are having 52 00:04:09,960 --> 00:04:14,520 trouble, uh, you know, with with risk here, companies are having 53 00:04:14,520 --> 00:04:18,040 trouble refinancing their loans. We've got the whole sect of commercial real estate, 54 00:04:18,040 --> 00:04:21,959 particularly office and now apartments and some other parts. You know, they're getting 55 00:04:21,959 --> 00:04:28,079 into serious trouble. Retail and commercial real estate has been in trouble for years. 56 00:04:28,639 --> 00:04:31,759 So yeah, there's other parts of the economy they're really struggling. Yeah, 57 00:04:31,800 --> 00:04:38,079 so it's kind of interesting phenomena. And then there's sections of the country 58 00:04:38,120 --> 00:04:41,879 that are struggling more than others, right, Yeah, And it's it really 59 00:04:41,920 --> 00:04:46,279 depends on where you are and uh, and the economy is always local and 60 00:04:46,600 --> 00:04:50,839 and uh, real estate is always local, and small businesses are always local. 61 00:04:51,000 --> 00:04:55,839 So I mean the big companies are global, you know, so when 62 00:04:55,879 --> 00:04:58,879 they talk about the layoffs they're talking about global layoffs. A lot of them 63 00:04:58,920 --> 00:05:01,000 don't even happen. Then, I it states that definitely impact us here. 64 00:05:01,639 --> 00:05:06,319 Uh yeah, so that's a global thing. And but your small businesses, 65 00:05:06,360 --> 00:05:12,160 you know, they're local and they have local customers and restaurants at local customers 66 00:05:12,160 --> 00:05:16,720 and and so they're depending on the local economies and and on some places. 67 00:05:17,000 --> 00:05:19,920 When I live in San Francisco and the place is hopping, you know, 68 00:05:19,959 --> 00:05:25,040 I just find it all the layout announcements and all the empty offices and all 69 00:05:25,079 --> 00:05:29,560 the stuff. You know, people are spending a disillion tons of money here, 70 00:05:30,120 --> 00:05:33,720 and it's tourists and from all over the place, and and uh so 71 00:05:33,920 --> 00:05:39,360 you know that part is still there. And in other parts of the country 72 00:05:39,519 --> 00:05:44,680 you see some bigger weakness. This car cropping up. Some places never had 73 00:05:44,720 --> 00:05:48,480 any growth to begin with. I mean that that's just how it is. 74 00:05:49,199 --> 00:05:54,439 Right Well, in Miami, in Florida, it's exactly the same. It's 75 00:05:54,480 --> 00:06:00,720 blooming. Houses are still selling, but housing is definitely taking a hit in 76 00:06:00,000 --> 00:06:04,360 large swaths of the economy. And what's your take on that. Yeah, 77 00:06:04,399 --> 00:06:06,959 it's regional to you. I mean, like you said, Miami, Uh, 78 00:06:08,759 --> 00:06:13,199 it's probably that in Florida, generally probably much better shape in terms of 79 00:06:13,199 --> 00:06:15,759 housing, are further behind, let's say, uh than the West Coast, 80 00:06:16,079 --> 00:06:21,040 the entire West Coast, particularly California and Seattle, Portland. Yeah, big 81 00:06:21,040 --> 00:06:29,240 coastal cities there are gating hit very hard on housing and they've been overpriced for 82 00:06:29,360 --> 00:06:31,959 years. Uh. Here in San Francisco, we've lost a good part of 83 00:06:31,959 --> 00:06:35,800 the population, and uh, there's all kinds of stuff on the market. 84 00:06:35,839 --> 00:06:41,959 Now. Prices have come down substantially in the entire Bay Area. They're starting 85 00:06:41,959 --> 00:06:45,040 to come down inside in California that have come down a lot. In Seattle, 86 00:06:45,439 --> 00:06:47,480 Oh, these are big price declines. We're looking at double digit price 87 00:06:47,519 --> 00:06:51,920 declines. Um. And now I've got spring selling seas at the moment, 88 00:06:51,959 --> 00:06:57,360 and everybody's got into this. Okay, Uh, prices are going up, 89 00:06:57,399 --> 00:07:00,360 but they're going up seasonally. Yeah, they always go up. They'll wind 90 00:07:00,439 --> 00:07:04,120 up during housing Dutch one during this time of the year, and so the 91 00:07:04,199 --> 00:07:09,439 other parts. Yeah, some other markets have gotten hit pretty hard too, 92 00:07:09,680 --> 00:07:13,839 and so we're and it's just sort of spreading from there. I mean, 93 00:07:14,759 --> 00:07:20,079 mortgage trades on Friday or so, the daily measures we have for backhouse to 94 00:07:20,279 --> 00:07:25,079 seven percent, so for the average thirty you fixed. That's six point nine 95 00:07:25,079 --> 00:07:29,800 percent. And yeah, these home prices in a lot of places don't don't 96 00:07:29,839 --> 00:07:32,519 make sense at six point nine percent. It's just, yeah, it's just 97 00:07:32,800 --> 00:07:38,639 too expensive and for details to happen. Yeah, the prices have to come 98 00:07:38,680 --> 00:07:44,600 down. Hey what about the commercial real estate. You got empty skyscrapers all 99 00:07:44,639 --> 00:07:49,160 over the country. I mean, my kids have embraced at the hybrid workplace. 100 00:07:49,519 --> 00:07:53,560 They go to work two three days a week. The rest of the 101 00:07:53,560 --> 00:07:57,600 time they work from home. If you're raising a family and you're a single 102 00:07:57,759 --> 00:08:03,360 mom or father or to working parents, this is the greatest thing that ever 103 00:08:03,439 --> 00:08:07,639 happened to you. But but not so much for commercial real estate. It 104 00:08:07,680 --> 00:08:11,639 looks like we're looking at trillions of dollars of commercial real estate that will have 105 00:08:11,720 --> 00:08:16,959 to be repurposed in some way or form. Perhaps they'll will become tesla factories. 106 00:08:20,120 --> 00:08:24,600 Yeah, that will be interesting. You know, I'm kind of long 107 00:08:24,720 --> 00:08:30,759 term. You know, I'm pretty positive about this because these uh downtowns that 108 00:08:30,839 --> 00:08:35,559 are full of business buildings that you know, they're empty out after hours and 109 00:08:35,919 --> 00:08:41,960 then it become yeah, just devoid of people and they're not fund to be 110 00:08:41,120 --> 00:08:45,759 in the end, doesn't matter, war or when Yeah, these these financial 111 00:08:45,840 --> 00:08:50,240 centers are really not a good place, uh in a sense. And uh 112 00:08:50,399 --> 00:08:56,600 so cities that have embraced mixing office buildings with residential buildings. Yeah, these 113 00:08:56,720 --> 00:09:01,679 these central business districts that would become pretty lively and uh and so I think 114 00:09:01,720 --> 00:09:05,039 that that's the future. You know, they're going to have to convert some 115 00:09:05,080 --> 00:09:07,279 of those office towers that can be converted, you know, talking to older 116 00:09:07,320 --> 00:09:11,240 buildings, a lot of them cannot be converted. You know, there will 117 00:09:11,320 --> 00:09:16,279 be sold in the foreclosure sale for land value essentially and be torn down and 118 00:09:16,759 --> 00:09:22,840 replaced by residential tower. And yeah, this is is all very slow moving. 119 00:09:22,879 --> 00:09:24,759 And we were talking years, you know, and so this is not 120 00:09:24,799 --> 00:09:30,480 happening today. I mean they're talking about it, they're starting some some conversions, 121 00:09:30,480 --> 00:09:33,240 and they've conversion has been going on for years. But it's just hard 122 00:09:33,279 --> 00:09:37,159 to convert a nineteen eighties office tower into residential. It's almost impossible. It's 123 00:09:37,159 --> 00:09:41,240 just cheap but to tear it down. But there's some buildings where that works. 124 00:09:41,240 --> 00:09:43,320 And so but it's you know, tearing down the building and building a 125 00:09:43,360 --> 00:09:46,360 new one that's good for the economy. Yeah, it's a lot of investment, 126 00:09:46,360 --> 00:09:50,000 a lot of spending and so that that when that starts to happen, 127 00:09:50,000 --> 00:09:54,159 that would be a good thing. Meanwhile, we've got investors or equity investors 128 00:09:54,200 --> 00:09:58,879 in these buildings, and we've got lenders in these buildings, and they're going 129 00:09:58,919 --> 00:10:01,159 to lose their shirts. And there's just no way around it. It is 130 00:10:01,159 --> 00:10:05,320 spread all over the places. Uh. So far the big defaults that we 131 00:10:05,360 --> 00:10:09,960 have that I've looked at that these big towers, you know, there will 132 00:10:09,000 --> 00:10:13,080 all investors in banks that we're on the hooks and these a commercial war dispatch 133 00:10:13,120 --> 00:10:20,200 securities, mortgage speeds and private equity farms and other especially unders life insurance companies 134 00:10:20,240 --> 00:10:24,879 you know that that are on the hook for them so far, and um, 135 00:10:24,000 --> 00:10:28,279 yeah, that and the investors, equity investors lose their their portion first. 136 00:10:28,799 --> 00:10:33,200 So then so far that too has gotten hidden. It's spread all around. 137 00:10:33,200 --> 00:10:37,080 It's global on these a global investment funds, he's a global bond continential 138 00:10:37,159 --> 00:10:41,480 funds that that have invested in the equity and in the depth of these uh, 139 00:10:41,519 --> 00:10:46,120 these office towers, and you know, there's just no way around it. 140 00:10:46,399 --> 00:10:50,600 These an old office tower is worth the land value essentially. You know. 141 00:10:50,720 --> 00:10:54,200 That's that's what we're learning and one of them solding in San Francisco. 142 00:10:54,279 --> 00:10:58,879 You know, we finally had the first post pandemic sale going through of an 143 00:11:00,000 --> 00:11:03,279 office tower, and I cut the prize by seventy five percent. And it's 144 00:11:03,279 --> 00:11:05,840 old. You know, that's that's what you have to do. You know, 145 00:11:05,960 --> 00:11:09,639 this out on an old office down. It was a usable office down. 146 00:11:09,759 --> 00:11:13,840 It had an attended that's Albna. It was at least after the arrangement 147 00:11:13,879 --> 00:11:16,320 the bank sold. There was no lenders involved. They didn't involve any losses 148 00:11:16,399 --> 00:11:22,919 for Lendus. And in that kind of set of market price, seventy five 149 00:11:22,919 --> 00:11:28,559 percent off and and uh you know, and that will probably uh I would 150 00:11:28,559 --> 00:11:33,200 be working model and going forward. Okay, so you know I can see 151 00:11:33,240 --> 00:11:41,720 that. I remember reading the story of the of Massachusetts Mutual for closing on 152 00:11:41,759 --> 00:11:46,080 the Chrysler building. I don't remember the exact dates, and they sold it 153 00:11:46,120 --> 00:11:50,559 for hundreds of millions of dollars at some point in the future. I was 154 00:11:50,600 --> 00:11:56,200 in an office building in Manhattan that they foreclosed on and I never saw it 155 00:11:56,200 --> 00:12:00,399 if they sold it again, but they foreclosed for like twelve million. Building 156 00:12:00,519 --> 00:12:05,159 is probably worth a couple hundred million. It was a historic high rise. 157 00:12:05,639 --> 00:12:11,960 So definitely opportunities are there. They found that, like in Lower Manhattan, 158 00:12:11,440 --> 00:12:16,679 a lot of these older buildings that were office buildings were actually really perfect for 159 00:12:16,799 --> 00:12:24,240 conversion because of the dimensions or so than new buildings because they were a set 160 00:12:24,320 --> 00:12:28,480 number of feet from the elevator corps, so there was very little internal space. 161 00:12:28,559 --> 00:12:33,120 And these buildings, the newer ones that have like hundred thousand square foot 162 00:12:33,200 --> 00:12:39,759 floors, not really that suitable for or residential because you've got all this interior 163 00:12:39,840 --> 00:12:45,360 space that won't have windows, and that just it's good if you're an artist 164 00:12:45,399 --> 00:12:50,200 an art studio, or you have a sound studio in your house like me, 165 00:12:50,679 --> 00:12:56,159 but otherwise not so good. But I guess it's going to get digested. 166 00:12:56,200 --> 00:13:01,120 As your point, a lot of institutional investors hold them orgages and they'll 167 00:13:01,159 --> 00:13:05,559 be the proud owners of this property at some point or another. What about 168 00:13:05,559 --> 00:13:11,879 the auto industry now, it looks like sales have been heading downward for everybody 169 00:13:11,919 --> 00:13:20,320 but Tesla and a few ev makers in in China. But one analyst I 170 00:13:20,360 --> 00:13:26,679 talked to recently forecast that the Tesla will not be able to withstand the flood 171 00:13:26,679 --> 00:13:31,080 of Chinese imports. I'm not buying it being a Tesla owner myself, I 172 00:13:31,159 --> 00:13:37,159 just don't see the driving experience being equal in the Chinese cars. I could 173 00:13:37,159 --> 00:13:43,240 be wrong. What's your take on what's happening there and and interest rates and 174 00:13:43,879 --> 00:13:48,519 repos and all of that. Yeah, so in terms of the thing, 175 00:13:48,600 --> 00:13:54,120 yeah, we have Ford come out today and say that prices will have to 176 00:13:54,120 --> 00:13:58,080 come down by about five percent in part because of Tesla's price cuts. And 177 00:13:58,440 --> 00:14:03,480 Tesla has is very uncommon in the auto industry. You know, Tesla has 178 00:14:05,360 --> 00:14:11,279 build and it's continuing to build production capacity and in large amounts. I mean, 179 00:14:11,320 --> 00:14:15,679 they're just opened plant in Texas, they opened one in Europe. They're 180 00:14:15,720 --> 00:14:18,080 looking at new plants that have got this huge plant in China and got the 181 00:14:18,120 --> 00:14:24,399 plant in California. They're looking at opening new plants in Mexico and in other 182 00:14:24,440 --> 00:14:28,639 places in Asia. And so they're continuing to ramp up the capacity. And 183 00:14:28,679 --> 00:14:33,399 in order to make the work, they have to sell a lot of vehicles 184 00:14:33,480 --> 00:14:39,840 and uh and they had the largest profit margin of the main automakers, you 185 00:14:39,879 --> 00:14:43,600 know, so they can't afford to cut prices. And they're going out there 186 00:14:43,600 --> 00:14:46,960 and they're trampling all over these legacy automakers. And I think that's great. 187 00:14:46,039 --> 00:14:50,559 Now I'm not a huge fan of Tesla, but but I think the strategy 188 00:14:50,759 --> 00:14:54,720 is just amazing. I have come to hate the legacy automakers for the stupid 189 00:14:54,799 --> 00:14:58,480 decisions they have made over the years, and you know, they have ignored 190 00:14:58,559 --> 00:15:01,720 e for decades. So now Tesla it's a decade ahead of them. They 191 00:15:01,799 --> 00:15:05,679 can't get the supply chains together, you know. For it's got a couple 192 00:15:05,679 --> 00:15:09,519 of models out, but you can't build them in large quantities because it doesn't 193 00:15:09,559 --> 00:15:13,200 have the supply chains to do that. And yeah, they're going through all 194 00:15:13,240 --> 00:15:16,320 the problems Tesla went through ten years ago, five years ago, you know, 195 00:15:16,440 --> 00:15:20,240 So now they're trying to catch up. GM doesn't have anything really, 196 00:15:20,279 --> 00:15:22,120 you know, it's talking about what it's gonna have, and the one vehicle 197 00:15:22,120 --> 00:15:28,039 that had the boat it's it's shutting down. So there are other eb meakers 198 00:15:28,080 --> 00:15:31,159 out there, like Volkswagen and the Koreans you know, that are doing a 199 00:15:31,240 --> 00:15:35,639 much better job, and they're providing some pretty stifferent competition. Of course, 200 00:15:35,639 --> 00:15:39,200 in challenge that, Like you said, there are hundreds of eBay because and 201 00:15:39,279 --> 00:15:43,200 some of the big ones, some of the big companies are are being very 202 00:15:43,240 --> 00:15:46,559 competitive and they have to compete on price, So they cannot compete on cool 203 00:15:46,639 --> 00:15:50,480 factor with Tesla, and they'll have to compete on the price. And that's 204 00:15:50,519 --> 00:15:54,159 what it comes down to. The United States. Now we have this for 205 00:15:54,279 --> 00:15:56,759 the first time in many, many years. We've got a new entrant, 206 00:15:56,879 --> 00:16:03,120 essentially a Tesla shaking ogopulistic behavior of the legacy automakers. And I think that 207 00:16:03,279 --> 00:16:07,919 is great. And the auto prices have gone up so much, so fast 208 00:16:07,000 --> 00:16:11,240 that the average American came no longer a forty V a new vehicle, So 209 00:16:11,639 --> 00:16:17,200 that's something seriously wrong with that strategy. Everybody has gone up scale. Uh 210 00:16:17,279 --> 00:16:21,559 that the average Sun's actual prices for new vehicle is now forty seven thousand dollars, 211 00:16:21,600 --> 00:16:23,759 which is just ridiculous, you know when you look at average incomes. 212 00:16:23,840 --> 00:16:27,559 Yeah, and so uh yeah, something needs to happen. It. Tesla 213 00:16:27,639 --> 00:16:30,559 came along and it is now shaking them up and that it's good and it's 214 00:16:30,600 --> 00:16:34,120 having a big impact. Um. You know, that's why EV says and 215 00:16:34,240 --> 00:16:38,200 a lot of other ev evmakers have followed suit. So they've cut their prices 216 00:16:38,279 --> 00:16:42,679 and in California and we're looking already at an EV market share of twenty percent. 217 00:16:44,039 --> 00:16:47,440 So I mean Nasi from I don't know or really you know, And 218 00:16:47,519 --> 00:16:51,440 it's not just destolating more now it does forty models on the market. And 219 00:16:51,440 --> 00:16:56,320 and so even though Tesla is number one and the model of hy and Model 220 00:16:56,320 --> 00:16:59,879 of three are now the number one and number of best sellers in the statement 221 00:17:00,360 --> 00:17:06,640 blowing away Camry and other models. And uh, you know, so the 222 00:17:06,680 --> 00:17:08,839 automakers are going to have to react after this story that doesn't have anything really 223 00:17:08,839 --> 00:17:12,799 to speak off from the EV field completely drop the ball. And so that's 224 00:17:12,920 --> 00:17:17,279 that's the biggest movement in the auto industry I've ever seen. It's a shake 225 00:17:17,400 --> 00:17:19,440 up. You know. It's really good for industrial America, I think because 226 00:17:19,440 --> 00:17:23,480 a lot of these evs and the technology is is being built in the United 227 00:17:23,480 --> 00:17:26,599 States. Uh. Yeah, I think this is a great thing to happen 228 00:17:26,960 --> 00:17:30,319 from an industrial point of view, from an American industrial point of view. 229 00:17:30,640 --> 00:17:34,319 And uh and I think the price cuts are a great thing to happen. 230 00:17:34,440 --> 00:17:38,640 From a consumer point of view. I think it will be tough going for 231 00:17:38,640 --> 00:17:42,079 for the legacy automakers. You know, a fight like that, it's it's 232 00:17:42,160 --> 00:17:48,160 tough to deal with. And so that's that's one aspect that's really working and 233 00:17:48,200 --> 00:17:52,240 I'm I'm I'm surprised with how suddenly it took off, you know, and 234 00:17:52,559 --> 00:17:57,440 it was just gradually going and now starting we've got this this sort of massive 235 00:17:59,039 --> 00:18:03,160 momentum behind and that we're going to get some imports from China that we're going 236 00:18:03,200 --> 00:18:06,920 to shake up the pricing situation further. So I think that's a good thing. 237 00:18:06,960 --> 00:18:10,759 The bad thing is for consumers. Interest rates have doubled for autos. 238 00:18:11,400 --> 00:18:14,799 You know, that's just that's just how it is. And and uh so 239 00:18:14,799 --> 00:18:18,519 that's getting a lot more expensive to type with these expensive vehicles and uh you 240 00:18:18,559 --> 00:18:22,920 know, there's a huge amount of paint up supply out there. There's like 241 00:18:23,039 --> 00:18:26,759 four or five six million vehicles that haven't been bought over the last three years 242 00:18:26,759 --> 00:18:30,279 because of the supply s religious people have inventory. Now we've got inventory. 243 00:18:30,359 --> 00:18:36,240 Now there's pickups, and there's SUVs and alternids of stuff everywhere. Uh except 244 00:18:36,279 --> 00:18:38,279 some of the import makers don't have a lot of ivagory. But the domestic 245 00:18:38,279 --> 00:18:42,759 brands all have a plenty inventory and deals are being made. Uh yeah. 246 00:18:42,759 --> 00:18:48,079 Automaxis subsidizing the interest rates on the car loans, so for credit offering three 247 00:18:48,160 --> 00:18:52,039 point nine percent of pickups and that kind of stuff. So, uh, 248 00:18:52,119 --> 00:18:56,200 yeah, they're they're going to they're going to have to fight to get get 249 00:18:56,240 --> 00:19:02,519 their internal compulsion engine vehicle sales up the way down the levels of the nineteen 250 00:19:02,519 --> 00:19:06,519 seventies. You know, we we haven't seen those kinds of sales figures and 251 00:19:06,640 --> 00:19:12,200 in many decades except during the peak of the financial crisis and and uh during 252 00:19:12,240 --> 00:19:17,240 the lockdown. Yeah, so these are really bad sales figures on on ice 253 00:19:17,400 --> 00:19:22,960 vehicles and uh, you know it market just being eaten up by these evs. 254 00:19:22,160 --> 00:19:26,079 So you know, the industry hands is being really shaken up by business, 255 00:19:26,680 --> 00:19:33,160 right, So yeah, I just see it. They're totally caught flat 256 00:19:33,240 --> 00:19:40,680 footed, like merry embarrassment there over who runs a gm uh saying that they're 257 00:19:40,720 --> 00:19:45,960 going to overtake Tesla by two twenty five. And you know she said that 258 00:19:45,000 --> 00:19:49,920 a couple of years ago and everyone left. But it was ridiculous on its 259 00:19:49,960 --> 00:19:57,599 face. The charging infrastructure that Tesla has constructed, they just opened one literally 260 00:19:57,960 --> 00:20:03,160 down the street from house here. That's the demand. Like I don't use 261 00:20:03,200 --> 00:20:07,240 it that much because I charge at home, which is another nice thing. 262 00:20:07,839 --> 00:20:12,759 Whether the grid can handle the increased demands of the evs at something I guess 263 00:20:12,759 --> 00:20:17,400 we'll find out in the next few years they'll have to build. So when 264 00:20:17,440 --> 00:20:21,079 you charge up your vehicle, I charge it in my garage, you know, 265 00:20:21,160 --> 00:20:23,839 a midnight right, yeah, And so to see that's the thing. 266 00:20:23,920 --> 00:20:27,200 You know, most people that own evs charge at midnight. That's when the 267 00:20:27,240 --> 00:20:30,880 electricity is cheaper if you have time of use building. And that's one of 268 00:20:30,880 --> 00:20:37,480 those huge excess capacity in the grid. And so these evs that are being 269 00:20:37,559 --> 00:20:41,119 charged at home at night are just using up excess capacity, you know, 270 00:20:41,200 --> 00:20:45,200 and and idle capacity. You know, that's just sitting there and it's expensive. 271 00:20:45,599 --> 00:20:48,839 And the electric utilities they're loving you it's they're absolutely exciting about this because 272 00:20:48,839 --> 00:20:52,160 now they can sell electricity at night, but when the really people hadn't been 273 00:20:52,160 --> 00:20:56,440 buying electricity, And so I think the strain on the grid will be a 274 00:20:56,480 --> 00:21:02,000 lot worse because of that, because it's just it will it will even out 275 00:21:02,039 --> 00:21:06,160 the loan and uh, it won't be all yeah, it won't be in 276 00:21:06,440 --> 00:21:08,920 dcvs won't be charging in the middle of the afternoon when the acis kicking, 277 00:21:10,039 --> 00:21:11,599 you know, they'll be charging when the electricity is cheaper, which is in 278 00:21:11,640 --> 00:21:15,359 the middle of the night. Moost of them and so um, you know, 279 00:21:15,680 --> 00:21:19,480 I think the strength on the grid will be manageable. Also, all 280 00:21:19,519 --> 00:21:22,680 the electric utilities, when they see that they have growth in revenue, that 281 00:21:22,759 --> 00:21:27,119 can invest in the equipment and infrastructure in which yeah, which they really couldn't 282 00:21:27,519 --> 00:21:33,319 before because they couldn't justify to investors because the sales weren't going up. And 283 00:21:33,559 --> 00:21:37,799 so now that sales are going up electricity sales, you know that they can 284 00:21:37,920 --> 00:21:41,480 invest if she long term bonds to build equipment. That's how the model works. 285 00:21:41,519 --> 00:21:45,240 And they're back on the growth models. And I think, I mean 286 00:21:45,279 --> 00:21:48,240 twenty twenty two was the first year in the United States broke out of its 287 00:21:48,680 --> 00:21:52,519 electricity consumption pattern. It's stuck in for fifteen years. So for the first 288 00:21:52,599 --> 00:21:57,359 time we have a nature increases in electricity sales in fifteen years, you know, 289 00:21:57,440 --> 00:22:00,319 and that's that's a good day in anyway. Yeah, for utilities, 290 00:22:00,480 --> 00:22:06,960 they're not scared of that. Well, the fact is that a kilowat to 291 00:22:07,279 --> 00:22:14,240 produced at high and noon pass the electric company about five times more than a 292 00:22:14,359 --> 00:22:21,440 kilowat produced at midnight, assuming it's not air conditioning season and you don't have 293 00:22:21,559 --> 00:22:26,400 this massive heat wave going on. And the fact is that when you're in 294 00:22:26,480 --> 00:22:30,440 time of use billing, they charge you five times more for that day kilowater. 295 00:22:30,839 --> 00:22:37,079 Maybe in Florida it's four times more, and they don't you know, 296 00:22:37,480 --> 00:22:42,240 it costs them three cents to produce a kilowat at midnight and they charge you 297 00:22:44,000 --> 00:22:48,240 seven or eight cents, So they're really like not passing that savings on to 298 00:22:48,359 --> 00:22:52,799 the consumer. I mean one thing, having an EV, I've learned to 299 00:22:52,880 --> 00:22:59,799 geek out over my electric bill to figure out like how I do things as 300 00:23:00,039 --> 00:23:07,160 cheap as possible using time of use billing. But so summing up, things 301 00:23:07,160 --> 00:23:11,599 are bleak for the legacy auto of manufacturers, but for the up and coming 302 00:23:11,680 --> 00:23:17,319 ones Tesla in particular, a select few of the Chinese, because they're not 303 00:23:17,519 --> 00:23:22,480 going to be able to build service organizations. Globally, only a few will 304 00:23:22,519 --> 00:23:26,519 be able to do that. You know, your x y Z electric car 305 00:23:26,640 --> 00:23:33,440 company that's in the you know, shen Zen province is just not going to 306 00:23:33,519 --> 00:23:40,920 be able to have a service network. Cars regardless still require a lot of 307 00:23:41,039 --> 00:23:45,640 service, so only certain companies can really do that right, right, But 308 00:23:45,799 --> 00:23:52,200 there's also hancidentia among American consumers to buy unknown brands with little representations. She 309 00:23:52,440 --> 00:23:57,920 ended up with a vehicle or the carmaker then pulls out and eat retail value 310 00:23:59,039 --> 00:24:02,720 crash value crashes, and you can't get it sort of, you can't get 311 00:24:02,799 --> 00:24:04,079 parts of stuff, you know. So, I mean that's a problem a 312 00:24:04,119 --> 00:24:07,799 lot of startups have once a cool factor vanishes. You know, most people, 313 00:24:07,880 --> 00:24:11,960 like they look at a vehicle as transportation that needs to be reliable, 314 00:24:12,039 --> 00:24:15,640 and they need to be able to sell it when they want to, and 315 00:24:15,680 --> 00:24:17,920 they need to be able to get it fixed when they need to, and 316 00:24:18,480 --> 00:24:21,960 and and so I think a lot of these startups will just not make it. 317 00:24:22,119 --> 00:24:25,599 Yeah, there'll be a big shakeout and a lot of these smaller companies 318 00:24:25,640 --> 00:24:29,799 will vanish, and the big legacy automakers will eventually get the stuff together. 319 00:24:29,920 --> 00:24:33,599 But yeah, they're just ds behind and they just handed Tesla the market and 320 00:24:33,720 --> 00:24:38,960 say, oh go go run with it. Yeah, it's like basically owning 321 00:24:40,079 --> 00:24:44,799 one of these Chinese no name, we used to call them bastard brand cars 322 00:24:45,319 --> 00:24:48,880 will be like owning a Saab. After they shut the company down, you're 323 00:24:49,119 --> 00:24:53,400 out a few years there, maybe if nothing bad goes wrong, and you 324 00:24:53,519 --> 00:24:59,680 hope that you'll be able to find the parts from a scrapyard, but it's 325 00:24:59,759 --> 00:25:04,119 not exactly confidence inspiring for sure. So and Tesla says they're going to build 326 00:25:04,440 --> 00:25:08,119 by the end of the decade twenty million cars a year, which is a 327 00:25:08,200 --> 00:25:12,440 feat that has never been accomplished even by the lakes of GM or Toyota. 328 00:25:14,039 --> 00:25:17,359 That's going to be interesting to see. Yeah, it'll be interesting to see 329 00:25:17,359 --> 00:25:19,119 if they can actually sell them. I'm pretty sure they can build them, 330 00:25:19,400 --> 00:25:22,279 but selling them that's another thing. You know, once you get to these 331 00:25:22,400 --> 00:25:27,079 numbers and a few Ustan glod, you know that there are some automakers that 332 00:25:27,119 --> 00:25:30,559 are starting to make a lot of progress, you know, like like Kia 333 00:25:30,880 --> 00:25:36,960 and yeah and die in one and another she has some Europeans and um, 334 00:25:37,359 --> 00:25:40,880 yeah, they're going to eventually fight back, and so then it will come 335 00:25:40,920 --> 00:25:42,200 down to price. Now, I mean, this is this is why I'm 336 00:25:42,200 --> 00:25:48,599 so excited the Buddy beans, because we finally have a disruptively company here that 337 00:25:48,720 --> 00:25:52,119 will shake up that pricing on Agapuli we've had, yeah, and they've just 338 00:25:52,200 --> 00:25:56,599 been screwing us, you know, the guaranteed price. Look what they did 339 00:25:56,799 --> 00:26:02,759 during the pandemic. Prices of pickup trucks or one hundred thousand dollars and more 340 00:26:03,279 --> 00:26:07,000 and they didn't get that much better in the maybe even a little worse during 341 00:26:07,039 --> 00:26:12,079 the pandemic. You know what about this full autonomy. I mean, I 342 00:26:12,559 --> 00:26:18,519 love the FST, but it's like, basically, you're driving with your sixteen 343 00:26:18,599 --> 00:26:22,759 year old who just got their license, except that Tesla has a lot more 344 00:26:22,880 --> 00:26:27,079 confidence than that sixteen year old. And I'm telling you, if you just 345 00:26:27,359 --> 00:26:32,319 let it steer you in the direction it wants all the time, you'll be 346 00:26:32,400 --> 00:26:36,200 in an accident, there's no question. On the other hand, I've had 347 00:26:36,279 --> 00:26:41,160 two instances. One where it's pitch black at night. I'm going on the 348 00:26:41,279 --> 00:26:45,960 road. There's street lights, but not very they're really spread apart, and 349 00:26:45,079 --> 00:26:49,359 it's a divided highway. The car hits the brakes and I'm thinking, oh, 350 00:26:49,480 --> 00:26:55,960 okay, great phantom breaking again. And then I see a bicycle shoot 351 00:26:56,000 --> 00:27:00,359 across right across where I was going, basically save that person's life. The 352 00:27:00,480 --> 00:27:07,000 other time it happened almost the exact same situation, but pedestrians in an unlighted 353 00:27:07,079 --> 00:27:12,000 area ran across the street. The car hit the brakes like not quite panic 354 00:27:12,119 --> 00:27:18,480 stop, but it hit it well before I even recognize those pedestrians were crossing. 355 00:27:18,039 --> 00:27:25,799 Do you think this is like the the unobtainable full self driving automated autonomous 356 00:27:25,880 --> 00:27:30,559 driving. Yeah, so the things that you mentioned are widely available now and 357 00:27:30,720 --> 00:27:36,559 they I mean even heavy trucks have those emergency braking systems now and they're working. 358 00:27:36,720 --> 00:27:38,559 You know, you have adaptive cruise control, you have all kinds of 359 00:27:38,640 --> 00:27:47,279 things that regular cars and I have that are actually far from driverless autonomous driving. 360 00:27:47,400 --> 00:27:55,680 You know. And we in San Francisco half now cars driving around robotax 361 00:27:55,839 --> 00:28:00,960 is driving around with out drive or picking up people. Yeah, and on 362 00:28:00,039 --> 00:28:07,599 an experimental basis by by the automakers, and um, you know, and 363 00:28:07,680 --> 00:28:11,200 you know there's yeah, there's a fun stories to read where where you know, 364 00:28:11,839 --> 00:28:17,039 a bunch of these crews rubbo taxes suddenly passed up into an intersection stop 365 00:28:17,200 --> 00:28:21,519 and pop traffic for hours, you know, and and um, those kinds 366 00:28:21,559 --> 00:28:23,640 of things. You know, I'm a base how well they are doing. 367 00:28:25,160 --> 00:28:30,119 I'm a what amazed that anybody can come up with a vehicle that that drives 368 00:28:30,160 --> 00:28:33,880 on its own to the chaotic traffic of San Francisco and uh, and they're 369 00:28:33,920 --> 00:28:37,880 doing it. Yeah, So this come a long way. Obviously we're like 370 00:28:37,039 --> 00:28:44,440 ten years behind schedule, but um uh eventually this technology will probably work and 371 00:28:44,720 --> 00:28:48,160 I I am personally looking forward to having you know, not even holding a 372 00:28:48,240 --> 00:28:52,119 vehicle anymore, just just subscribing to something that that that picks me up when 373 00:28:52,160 --> 00:28:56,200 I needs, you know, right, you know, And um, uh 374 00:28:56,559 --> 00:29:00,119 yeah, I've been looking forward to this forever and it's going to be many 375 00:29:00,200 --> 00:29:06,480 more years probably before this is a functional technology that's widely available by the reasonable 376 00:29:06,559 --> 00:29:11,720 price. Uh yeah. Human drivers are really bad and so you know it 377 00:29:11,880 --> 00:29:17,759 the thing you know that robot drivers only have to be better than human drivers, 378 00:29:17,839 --> 00:29:21,000 but that's not how the human equation works. We think the first person 379 00:29:21,079 --> 00:29:26,640 that gets killed by a robotaxis like the natural catastrophe and we're killing thirty five 380 00:29:26,720 --> 00:29:33,160 thousand people and traffic mentality here, So you know, human drivers are horrible 381 00:29:33,359 --> 00:29:40,440 and yet you know or h self driving photonos driving to take off commercially, 382 00:29:40,440 --> 00:29:45,160 it needs to be near perfect. That's a high bar to pass. And 383 00:29:45,799 --> 00:29:48,039 and um and I agree with that. You know, I don't want to 384 00:29:48,039 --> 00:29:52,359 get run over by a driver list vehicual who would just be really embarrassing. 385 00:29:53,039 --> 00:29:57,160 Who are you going to sue? That's right exactly, that's a problem. 386 00:29:57,359 --> 00:30:03,359 So but interest thing I mean Yeah. Every time there's a Tesla crash with 387 00:30:03,480 --> 00:30:07,920 the autopilot, which is amazing. I have to tell you there is. 388 00:30:07,279 --> 00:30:14,599 It's adaptive cruise control on steroids, steers the car. It really it's like 389 00:30:14,960 --> 00:30:18,400 nothing. You get to a place, you're relaxed. It takes a lot 390 00:30:18,480 --> 00:30:22,839 of the burden of driving off. I have to say, you know, 391 00:30:23,000 --> 00:30:29,240 drive to Miami, they're relaxed, eighty miles away, relaxed. So I 392 00:30:29,400 --> 00:30:33,240 think it's it's going to take a while though, because we're aways from fully 393 00:30:33,319 --> 00:30:37,839 autonomous, because the thing has to be programmed to recognize a situation. It 394 00:30:38,039 --> 00:30:44,759 doesn't think ahead, like hopefully if you're a if you're a defensive driver, 395 00:30:44,920 --> 00:30:48,440 you're always thinking ahead. What's going to happen here? All autonomous can do 396 00:30:48,559 --> 00:30:53,880 at this point is react, right, It doesn't predict. Yeah, I'm 397 00:30:55,880 --> 00:31:00,000 doomed to look forward to the technology where many more years probably before wildly available 398 00:31:00,200 --> 00:31:06,519 available. All right, So hey, interest rates in the economy in general, 399 00:31:06,920 --> 00:31:10,400 like you said, it's a tale of two cities, if you will. 400 00:31:11,039 --> 00:31:15,519 But as the Federal Reserve gotten to the point now where the system's broken 401 00:31:15,599 --> 00:31:18,319 and they're going to have to cut rates, and if that's the case, 402 00:31:18,400 --> 00:31:22,640 how much impact will it have. Yeah, so the system, meaning the 403 00:31:22,759 --> 00:31:26,440 financial system, it's struggling with these higher rates, and it's struggling with them 404 00:31:26,559 --> 00:31:33,119 because these managers back then made some really stupid decisions in buying these long term 405 00:31:33,599 --> 00:31:37,319 pressure securities and mortgage backed securities going to rate too really low, and you 406 00:31:37,440 --> 00:31:41,279 know, they the bond market was in complete denial about this, and they 407 00:31:41,799 --> 00:31:47,160 know we started getting bigger inflation in late two twenty early twenty twenty one. 408 00:31:47,200 --> 00:31:51,440 I kept buying these long eagest right securities. And so now they've got the 409 00:31:51,559 --> 00:31:56,839 stuff that you know who whose market value has now dropped and then that will 410 00:31:56,839 --> 00:32:00,680 be that'll be worth face value and they mature. But until that, let's 411 00:32:00,960 --> 00:32:05,240 yeah, maybe ten years or twenty years from now, until then they have 412 00:32:05,319 --> 00:32:07,640 to deal with market value and then has dropped a lot. And so for 413 00:32:07,799 --> 00:32:10,599 banks, you know, this is a tough environment. There was a long 414 00:32:10,759 --> 00:32:14,799 time, you know, there's this notion that are asking interest rates would be 415 00:32:14,880 --> 00:32:19,640 good for banks because they the banks would still not paying any interest on the 416 00:32:19,799 --> 00:32:22,359 deposits, so they would get this free money and they could charge higher interest 417 00:32:22,440 --> 00:32:28,039 rates on their loans, so their their interest rate margin would would become wider 418 00:32:28,119 --> 00:32:30,920 and that would make more money, and that has turned out to be a 419 00:32:30,039 --> 00:32:34,880 fallacy that has turned out to be complete bs that's been been been spreading, 420 00:32:35,039 --> 00:32:38,680 resuing spread for years. That in fact, deposits are leaving when banks are 421 00:32:38,720 --> 00:32:42,640 not paying any interest on right, they're leaving to money market funds, they're 422 00:32:42,680 --> 00:32:45,880 leaving to treasury security, they're going somewhere else. And when the deposits are 423 00:32:45,960 --> 00:32:50,200 leaving, uh, you know, banks run out of funding and they collapse, 424 00:32:50,759 --> 00:32:54,079 and so you know that part of the equation has turned out to be 425 00:32:54,200 --> 00:33:00,039 wrong and the other part got misjudged, and you know that's so now we've 426 00:33:00,079 --> 00:33:02,559 got this issue and the banks are going to get it through it, uh 427 00:33:04,200 --> 00:33:09,000 mostly, and it'll be something that won't and they'll have crime earnings, Yeah, 428 00:33:09,079 --> 00:33:13,720 because the interest rate margin will be squeezed as the deposits are leaving, 429 00:33:13,839 --> 00:33:17,279 and especially the regional banks and the smaller banks, they have to offer I 430 00:33:17,720 --> 00:33:23,640 two strakes on their deposits and that that brings the costs up and uh so 431 00:33:23,960 --> 00:33:28,319 the earnings will be squeezed. There will be bad for investors, you know, 432 00:33:28,440 --> 00:33:30,880 and they'll be we always lost some banks, but every year, yes, 433 00:33:30,960 --> 00:33:35,680 and it's not unusual for for the piece of bank collapses. Um, 434 00:33:36,200 --> 00:33:38,319 and there will be more. Uh. In terms of the rest of the 435 00:33:38,400 --> 00:33:43,400 system being arts, it's really doing fine, you know. I mean they're 436 00:33:43,400 --> 00:33:45,359 economy being a little with five percent interest rations. That's fine. We'll see 437 00:33:45,400 --> 00:33:47,960 that, you know, we'll see inflation come down a little bit. Maybe 438 00:33:47,960 --> 00:33:51,720 it has come out a little bit, but it's getting st key around that, 439 00:33:51,960 --> 00:33:54,880 right and uh, you know consumers are still spending. Business are some 440 00:33:55,000 --> 00:33:58,640 of the risks you alone will start to pick up again, you know. 441 00:33:58,759 --> 00:34:01,839 So I after period of adjustment to five percent interest rates, you know, 442 00:34:02,799 --> 00:34:07,519 uh, the economy will model through it this this, and and that's a 443 00:34:07,599 --> 00:34:10,800 bad time for inflation, yeah, because now we've got this inflation that said 444 00:34:10,840 --> 00:34:15,800 in that column is still generating demands and that's still you know, feeling inflation, 445 00:34:15,920 --> 00:34:20,519 and there's the excess money. Ut. So I don't see I just 446 00:34:20,679 --> 00:34:24,639 don't see a rate cut right this year, you know the short term bond 447 00:34:24,719 --> 00:34:28,280 markets. I'm not saying it either. You know, when you look at 448 00:34:28,320 --> 00:34:32,280 the six month yield, it's it's figuring in another rate height. Uh. 449 00:34:32,400 --> 00:34:37,239 And no rate cut is yeah the majority of the year, and um, 450 00:34:38,159 --> 00:34:45,480 you know that would have to be a significant decline in an inflation before the 451 00:34:45,559 --> 00:34:47,840 FED would cut of interest rates. So it also this gets completely out of 452 00:34:47,880 --> 00:34:52,000 control, you know, and then there were that we went through that in 453 00:34:52,039 --> 00:34:54,599 the seventies and eighties were it completely got out of control and you know, 454 00:34:54,719 --> 00:35:00,280 the dollar got hammered and all connects of problems. We're going and nobody wants 455 00:35:00,320 --> 00:35:07,440 to think about the housing market with eighteen percent mortgage rates. So uh so, 456 00:35:07,800 --> 00:35:10,440 I think the economy right now is adjusted, is adjusting to these higher 457 00:35:10,480 --> 00:35:15,039 interest rates, and um, you know, in terms of stocks, in 458 00:35:15,119 --> 00:35:19,400 terms of bank stocks particularly, I think this is tough sledding real estate stocks. 459 00:35:19,440 --> 00:35:21,360 I think it's really bad. I mean, there's a lot of other 460 00:35:21,440 --> 00:35:24,400 stocks out there that they're going to have a problem. But the financial markets 461 00:35:24,480 --> 00:35:29,360 really are in the economic system, you know, they're they're just kind of 462 00:35:29,519 --> 00:35:34,599 doing the own thing. And we've had really crummy economies with moving stock markets. 463 00:35:34,639 --> 00:35:37,599 And we can get you know, a pretty you know model through economy 464 00:35:37,800 --> 00:35:40,639 with a stock market that's a really bad shape, and that that could burn 465 00:35:40,679 --> 00:35:45,800 will be a possibility given the valuations we now have. All Right, Well, 466 00:35:45,920 --> 00:35:52,440 I think it's interesting what we're going through here and hopefully we're not going 467 00:35:52,480 --> 00:35:58,280 to see double digit interest rates again in the near future, perhaps with Europe's 468 00:35:58,599 --> 00:36:02,320 Europe's banks are in worshiped in the US as banks. One thing I find 469 00:36:02,440 --> 00:36:07,719 interesting is Jamie Diamond said, we're not taking over these failing banks, and 470 00:36:08,440 --> 00:36:13,519 that's going to last about five minutes till the next one comes, because it's 471 00:36:13,559 --> 00:36:16,679 going to be like Merrill Lynch and Bank of America, where Ken Lewis said, 472 00:36:17,360 --> 00:36:24,440 we don't want Merrill Lynch and the Treasury the FED say hey, mister 473 00:36:24,599 --> 00:36:28,800 Lewis, you are now the proud owner of Merrill Lynch, but we don't 474 00:36:28,800 --> 00:36:30,360 want it. No, you didn't hear us, right, you're a now 475 00:36:30,880 --> 00:36:35,360 owner. And that's what's going to happen. The big banks will have these 476 00:36:36,119 --> 00:36:38,679 failing regionals cram down their throats, whether they like it or not. On 477 00:36:38,840 --> 00:36:43,639 a very attractive terms, I might add, they're gonna wind up with them, 478 00:36:43,760 --> 00:36:47,119 so they might as well just bite the bullet now whichever one's fail. 479 00:36:47,639 --> 00:36:52,360 Further consolidation, right, yeah, and I think there will be some pressure 480 00:36:52,519 --> 00:36:57,840 on the other big bank. Bigger banks, I mean, even some regional 481 00:36:57,920 --> 00:37:00,400 banks steps orb another regional bank. If it's not that big, you out. 482 00:37:00,840 --> 00:37:07,480 There's some pressure on the banks that are not JP mortgage, you know, 483 00:37:07,639 --> 00:37:13,000 to provide competitive bits, and they just you know, and they have 484 00:37:13,159 --> 00:37:16,639 to provide competitive bits and and uh and then they get the bank, you 485 00:37:16,719 --> 00:37:22,320 know. And but it's you know, I mean looking at a bank or 486 00:37:22,440 --> 00:37:24,280 a weekend and deciding whether you want to buy it or not. I mean 487 00:37:24,360 --> 00:37:30,320 that's a gamble. Well, yeah, they always get a backstop though, 488 00:37:30,480 --> 00:37:34,000 from the Fed and from the Treasury. We take all the bad stuff, 489 00:37:34,280 --> 00:37:38,159 you get all the good stuff as of this cutoff date. And you're off 490 00:37:38,199 --> 00:37:43,719 to the races, but going to be interesting. So hey, go over 491 00:37:43,880 --> 00:37:49,239 to Wolf's site, wolf street dot com. It's must reading. You get 492 00:37:49,440 --> 00:37:53,320 insights into these types of issues you're just not gonna find anywhere else. And 493 00:37:54,079 --> 00:37:58,559 Hey, you've got a question for Wolf or myself, shoot me an email 494 00:37:58,840 --> 00:38:04,519 k l at carry Lutz dot com and you can click right through to wolf 495 00:38:04,639 --> 00:38:08,960 site on the show notes to this interview at Financial Survival Network dot com. 496 00:38:09,199 --> 00:38:14,519 Just click sign up for a free newsletter WELF. Always a pleasure. We'll 497 00:38:14,559 --> 00:38:16,800 talk to you again soon. Thank you, Kerry, thanks for listening to 498 00:38:16,960 --> 00:38:23,480 carry Lutz's Financial Survival Network. Your solution to today's trying times For the latest, 499 00:38:23,599 --> 00:38:30,000 go to Financial Survival Network dot com. Financial Survival Network now more than ever