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You've had a dynamic where money has become freer than free.

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You talk about a Fed just gone nuts.

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All the central banks going nuts.

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So it's all acting like safe haven.

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I believe that in a world where central bankers are tripping over themselves to devalue their currency,

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Bitcoin wins.

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In the world of fiat currencies, Bitcoin is the victor.

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I mean, that's part of the bull case for Bitcoin.

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If you're not paying attention, you probably should be.

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Melody Wright, welcome to the show. Thank you for joining me.

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Well, thank you so much for having me. It's my pleasure.

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As I was saying before we hit record, I was on Michael Ferris' show Coffee and Mike last week.

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And after our conversation off the record, he said you have to reach out to Melody.

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I was telling him I'm in the market to buy a house where I live in the Northeast in the Philadelphia area.

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And you've been on his show.

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I've since my conversation with Michael, watched a few of the podcasts you've been on in recent months.

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And I think this is a conversation that I'm not only going to get value out of, but we have a lot of millennials, Gen Xers in the audience who are probably in a similar position than I am.

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So I'm really happy to jump in and talk about the real estate market with you.

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Awesome. Looking forward to it.

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Yeah. And like I said, I wanted to open with a chart.

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You come with a bunch of quantitative, hard data.

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Something I like to follow, not only in real estate, but just generally is Google Trends.

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And if we look at Google Trends right now, particularly for the search help with mortgage,

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we are at uh we have reached uh march 2009 levels yeah yes indeed uh this is not surprising at all

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um and you know what's crazy about this though marty is if you think about it we have seen

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unprecedented uh intervention already and low modifications and workouts that you know so many

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people took forbearances during COVID. And once those forbearances were over, you know, you could

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go up to 18 months of not making payments, you had to have some sort of workout to deal with those

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forborne payments. And so what many people did was a payment deferral, if you had a Fannie or Freddie

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loan, or a partial claim, if you had an FHA, and they put it at the back of the loan to be paid off

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when you sell the home or pay off the mortgage. And then many people did modifications as well,

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reducing their payments. So this is quite shocking because we've had intervention that far outweighs what we saw after the last housing crisis.

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And yet people need help with their mortgage.

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And what is driving this specifically?

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You think it's the labor market, people becoming unemployed, not being able to afford it?

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is it mainly homeowners who got committed to adjustable rate mortgages and with the mortgage

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rate being above 6%, their payments just became too much as a combination of things.

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It's a combination of things. And based, but, you know, a lot of it is, yes, the labor market is

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weak. You know, we have kind of the highest folks working two jobs and those are part-time jobs

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right now that we've ever seen. And so, you know, I think the labor market has been weak for some

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time, but people got into mortgages they couldn't afford. What a lot of people don't understand

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about this market is that after 2008, the banks really stepped back out of the mortgage market.

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This was because of Basel III requirements, the supplementary leverage ratio, things like that.

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And the non-banks stepped in, but they did, they're funded basically by the government-sponsored

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enterprises and agencies. And so what you have now is a largely government market.

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And the FHA program specifically kind of stepped in where private was last time with subprime.

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People getting mortgages with credit scores of 580. If you have a big down payment, for instance,

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you only have to have three and a half percent down. And so that share of the market right now

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is around 13 percent, which is about the share of what subprime was the last time things started

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falling apart. And so people just simply can't afford it. And something I said years ago is that

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we wouldn't even have to have a deteriorating labor market to see a crisis because property

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taxes and insurance have risen so much that people simply what, you know, they were already

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taking out too much leverage that they really couldn't afford, you know, based on these loans

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they were getting from these government agencies. But then you tack on property taxes and insurance.

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And I've seen, you know, your mortgage servicer pays those and they put it into your payment.

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And I've seen escrow notices go out saying, we're sorry.

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Well, they don't even really say we're sorry.

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But, you know, hey, your payment has just increased.

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It's just doubled because like if you're in California, for instance, because of that insurance increase after the fires and property taxes.

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So I think it's just a real affordability crisis at this point.

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Yeah.

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Yeah.

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Property taxes are interesting.

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They've been a topic of conversation the last couple of podcasts, particularly after Ron DeSantis started on his campaign trail of eliminating property taxes in Florida specifically.

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And I think I forget who it was, but basically described property taxes as unrealized cap gains taxes that are really pushing people out of the market.

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And I imagine they are affecting the boomers the most in retirement age.

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They thought they had their nest egg in their retirement accounts.

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They're looking at their average mortgage payment and say, OK, we need to hit this level.

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We can sustain these payments and buy food and go on trips and whatever.

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And then you see inflation across the board and the triple whammy, I guess, with property taxes going up as well.

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Yep. When I was in Miami in July of 2023, there was actually seniors stormed a condo administration building because they got notices that their HOA fees were going up.

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And this is, you know, I think this is what the whole country has forgotten.

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Places like Las Vegas, Florida, here in East Tennessee, Gatlinburg, is that these were middle class people that were coming and moving.

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And, you know, they weren't the super rich, right, Californians.

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and ultimately they're being priced out so this was a very it was in pembroke pines a very middle

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class or even blue collar um condo big condo development um and they just got to notice hey

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your property tax your hoa fees are going up like 500 because of insurance and different things like

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that and they stormed the police had to be called like a an old man was like pushed to the ground it

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was terrible. I mean, so what you've seen since then is inventory just fly onto the market in

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Florida. And I think that's a big question is what's going to get first is going to be mortgage

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rates or the prices of these homes? Because I think that's what, again, putting my millennial

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perspective home buyer hat on, I'm looking at the prices of the houses in my area. I'm like,

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yeah, they've dropped a bit. They certainly haven't risen in the last six to eight months,

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but they're still relatively elevated, especially when you factor in the mortgage costs. And I've

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been saying on this show, it's two parts of the equation of housing affordability,

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of the cost of the house and the mortgage. And if rates aren't going to fall, we need to see

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the people that currently own the houses just stomach the fact that they're going to sell them

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at lower costs than they expected.

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Correct.

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And even if rates do go lower, Marty,

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it's not going to be enough

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to really juice the housing market again.

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And so I think that, you know,

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because of those existing lower interest rates

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and for rates to really go lower,

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you would have to have the Fed buying

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mortgage box securities again

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or somebody buying mortgage box securities again.

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That could be one of the things on the table

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is Fannie Mae and Freddie Mac doing that.

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um and so that's the only way those rates go lower but even then if you i can remember 2010

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uh that was everybody's great hope as that rates would go low and they could refi and we did have

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a mini refi boom back then but it did not stop home prices from uh correcting and i feel that

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because of where we are the other thing you asked about affordability but also people can't access

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credit right now you know what's happened with those student loans now that they're reporting

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and this is important, of course, for your millennial and even Gen X, you know, is now that those are credit reporting, we've seen massive impacts to credit scores, you know, and the Fed had a study in February where 40, almost 42 percent of mortgage refinance applications were rejected.

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I mean, that was the highest they'd ever seen in their series.

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And so people can't access credit anymore.

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Klarna, you know, these places that are now reporting or I think it's actually only a firm that's now reporting to credit.

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But now that they're reporting to credit, they can't do buy now, pay later anymore.

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And so the doors are just closing all around.

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And so even if rates go lower, you're not going to have a lot of people who are going to be able to qualify.

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And the fact of the matter is, is we had the lowest first time homebuyers on record last year since they started tracking in the 80s.

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And I think a lot of people fundamentally misunderstand this housing market.

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It's about investment and speculation and not really homebuyers.

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And such you got to think about what's going to happen in a speculative environment.

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Yeah, well, that's a great point to bring up, considering the fact that this is a Bitcoin podcast.

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I'd love to get your thoughts on this and sort of thrusting this on you because we didn't talk about it in prep.

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But that's one of my strong beliefs is that the fact that real estate has become the store value asset and investment vehicle that individuals and institutions use to attempt to outpace inflation when one can make a strong argument that real estate is not really fine tuned for a store value asset.

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It's a consumable good.

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It's a depreciating asset.

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It's a depreciating asset.

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One of my big

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thesis and many Bitcoiners

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thesis is that you're going to see a value

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leak in terms of

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from real estate to Bitcoin as

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people begin to wake up that you don't

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need to use your house as

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a savings vehicle. You can use this

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digital scarce asset

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in Bitcoin which has far

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superior properties in the fact that it's

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scarce, visible. You can send it

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The internet has no maintenance costs, no property taxes.

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And that seems to me over the course of many decades moving forward that it's going to become obvious to people.

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But I think right now the big problem is, again, going back to the boomers, is that this is what they were taught their whole lives and their whole careers growing up.

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It's like you get a job, you funnel it into real estate and financial assets, and you're going to be good.

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but we've gotten to this cross point societally where it just doesn't work because

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you're driving this affordability crisis, which is getting out of hand. You mentioned

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the new home buyers number being the lowest on record last year, but then

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you also have like the median age of a homeowner or a new homeowner, even with it being

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the lowest point in history, the median age was 56.

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You know, it's insanity. And so, you know, what's happening right now, people don't understand.

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I mean, there's so much data you need to look at when you're looking at the housing market.

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And most people look at like two factors, you know, inventory and price, and that's it.

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But what people don't understand is that, you know, the municipalities got drunk on the American Rescue Act money.

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Like they got all this. They were infused with money.

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And so they did all kinds of programs like, you know, down payment assistance programs, housing affordability programs.

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But they just they got used to it and they didn't think, oh, how can we how is this how we're going to reproduce this?

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You know, as I was taught when I was little, money doesn't grow on trees. Right.

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But they just kept spinning and spinning. And so unfortunately, people are going to think, well, home prices are going to come down.

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maybe my property taxes are. In reality, those municipalities are going to be after you. And so

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I think this whole Florida DeSantis thing is kind of funny. Let's see where it ends up.

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Because you look at somewhere like Boston, who, because they have lost tax revenue from commercial

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real estate, they are putting that bill out to homeowners. And it's, I mean, that's crazy. And so

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unfortunately, I think that this is going to be uglier than most people think. And those property

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taxes are really going to weigh in that leakage that you're talking about.

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Because if you think about a house that costs that much to maintain, then that value, that's

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not the value just continues to erode.

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Yeah.

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And how much of a, I mean, you mentioned institutional buyers, how much of an effect do they have

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on the market?

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Because I've seen headlines and data coming out that like the Blackstones, Black Rocks,

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Berkshire Hathaway's of the world have been buying up single family real estate or multifamily real estate to use as an investment vehicle, buy it, rent it out.

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It seems like they're underwater on a lot of the properties across the country.

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They are. And it's so it's people.

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This is a huge debate of how how how much how big are they really?

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What's the percentage? But it just it really you don't even need an aggregate percentage.

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It's just very it matters locally, like in San Antonio, Atlanta, these places where they did go big.

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You're definitely seeing prices fall much faster because they're underwater.

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They can't they don't have a homestead exemption.

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They so they're getting hit with property taxes, insurance at the same time, their cost of funds for the borrowings that they have to keep that Ponzi scheme going is higher and higher.

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And so they're underwater and they're selling what they did in 23 and 24.

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a lot of what they did was trade amongst themselves so that they could sell it off to like,

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like Americans Home for Rent would buy some of Lennar's new builds neighborhood. But they,

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and at that price, they could turn around and refinance and get more borrowings. And so they

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were kind of all in the family trading so that they could continue to access credit. But we're

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hitting the point now where they're going to have to distress sell. And you're seeing it has massive

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impact on neighborhoods and you don't even know usually if you have one of these next to you.

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00:17:06,775 --> 00:17:12,935
pal papati i've been like beating the proverbial desk on x every time they talk about the real

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estate market because they're like we just need more supply we need deregulation we need to take

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the federal lands and just build housing on uh on federal lands we need more supply and it's just

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abundantly clear to me that's not the solution to this problem if anything you're going to

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exacerbate it and you're going to end up building low quality housing that really doesn't have any

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value at the end of the day, particularly in the long run. And it is mind boggling to me that

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some in the financial cognoscenti really can't see that the problem to me seems like a financial

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engineering problem where again, going back to we're using housing as a savings vehicle and

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more supplies not going to solve the problem. Right. No. And in fact, I would, I'll take them

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on a tour if they would like to go see what I have seen on the road. And everybody, here's the

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thing about permits. They think that they can track this by the permits. Well, they can't. Number one,

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we've seen reduced participation in those surveys. And that's how you find out how many permits. It's

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a survey. And then secondly, in unincorporated areas and places around me, Tennessee, Texas,

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you don't have to file permits. And so I could, if I took people to see what I have seen, Marty,

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there there's no way and that low quality you talk about it's already out there and it was as

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if they were building army barracks marty i mean all over florida texas i mean a tennessee it is

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it's actually insane how much inventory is out there raleigh outside of raleigh north carolina

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i mean all over the country and so i'd love to take them on a tour to show them all of the supply

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as well as all the vacancy all over this country.

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There's vacancy because we've had a lot of foreign buyers use the market for money laundering

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or just, you know, parking their cash there.

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But a lot of it is money laundering.

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And so there's just a misunderstanding of what's going on out there because most people

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can't wrap their heads around the fact that this became a casino.

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And how it happened is essentially they saw Wall Street buy up those homes at the end of the last crisis.

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I was there at the auctions and the banks were just begging them, please, because it's not profitable to foreclose, no matter what anybody says, just the way the machine works.

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And so the banks were begging.

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They came in and bought them.

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And then everybody got hooked on that whole idea of fixing and flipping, renting out a house.

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I mean, it was a national obsession.

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But for whatever reason, people just can't admit that that's what's happening.

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I have a you you probably if you listen to that podcast, you know that I asked Adam this question.

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It's like most people think the average household size in the United States is around three or four.

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And in reality, it's at like two point five.

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And that's because of all of the second homes and all of the investment that's happened.

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And, you know, I have a friend who says, do we really want to get down to one house per person?

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I mean, is that what we want American life to be?

241
00:20:19,235 --> 00:20:22,935
But there's just a huge misunderstanding of what's happened in real estate.

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And they just they and I don't know, sometimes it feels willful, like like, you know, that actually they do understand what's happening.

243
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So who knows?

244
00:20:32,975 --> 00:20:38,855
Yeah. Well, let's expand on your offer to take anyone on a tour.

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00:20:38,955 --> 00:20:42,555
Because from what I understand, this is part of what's opened your eyes.

246
00:20:42,615 --> 00:20:45,055
You literally traveled around the country to see this.

247
00:20:45,055 --> 00:20:50,015
And I mean, you alluded to the experience, but let's expand on that experience.

248
00:20:50,215 --> 00:20:54,995
What drove you to get in the car, hop on planes and travel the country?

249
00:20:55,475 --> 00:21:03,175
Like one morning Bloomberg edition just in January of 23 just infuriated me because they

250
00:21:03,175 --> 00:21:05,655
were talking about the housing market was coming back.

251
00:21:05,675 --> 00:21:07,555
And I was like, are you guys on crack?

252
00:21:07,615 --> 00:21:09,035
Like, how could you pop?

253
00:21:09,035 --> 00:21:13,795
And at the time I was looking all around, looking at all the analysts that, you know,

254
00:21:13,795 --> 00:21:19,675
I had previously followed people like Ivy Zellman, who kind of called, you know, was poison Ivy last time we called it.

255
00:21:20,215 --> 00:21:22,555
She was talking about demographics at the time.

256
00:21:22,615 --> 00:21:23,875
She was one of the only ones.

257
00:21:24,395 --> 00:21:27,375
But people just were putting the whole all of the pieces together.

258
00:21:27,375 --> 00:21:34,995
They weren't putting that, you know, we're as Harvard says, 15.6 million boomers are going to age out between now and 2035.

259
00:21:34,995 --> 00:21:36,495
And they own the majority of homes.

260
00:21:36,615 --> 00:21:43,355
People weren't putting together that we had all this built for rent, single family residence like you were just talking, being built for rent.

261
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all this new home development, all this multifamily. And so, and then, you know,

262
00:21:48,235 --> 00:21:53,955
and then I also come from mortgage credit. And so I also understood there just wasn't enough

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people out there that could afford. So I read this article and just decided at that moment,

264
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I had no pre plans of this, that I was going to get in my car and I was going to, I was going to

265
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go to Austin. But, you know, I stopped in Nashville was my very first city on the way.

266
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and I got to Austin and I mean, I will never forget standing in my first mega site in Austin

267
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and just going, I mean, I was physically nauseous, Marty. I was just like, what is happening? This

268
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can't be happening again. Because as someone who lived through the last crisis, I swore up in debt.

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We swore as an industry, this would never happen again. We would never, the builders swore this

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would never happen again. You know, they got, Lenar got a tax bill out last time and swore it

271
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would never happen again. And they were swearing on earnings calls. They weren't doing it. And I

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was standing in that mega. And what is a mega site? People might not know. It's where all the

273
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builders build in the same site. And so you have like Toll Brothers, Ryan Holmes, regional builders,

274
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and they just have this massive development and they were just building up into the hills and

275
00:22:58,775 --> 00:23:05,395
with all the homes were empty. And I was just like, what is going on? And then I saw that over

276
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and over all over the country. Florida is it's depressing, Marty. I mean, again, a lot of them

277
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look like army barracks and I just it was insane. And that's because I I track data religiously,

278
00:23:18,815 --> 00:23:24,215
you know, 85 markets. I look at them every week. But you you have to at some point you have to

279
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get out and go look for yourself because and that's what I tell people, just take a left turn

280
00:23:29,255 --> 00:23:33,235
on your commute instead of a right and you will see what I'm talking about.

281
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That's funny.

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00:23:35,115 --> 00:23:39,675
You bring up Austin because I just moved back to the Philadelphia area where I was born and raised from Austin.

283
00:23:39,835 --> 00:23:45,535
We did a four-year stint in Austin, moved there in 2021 when the real estate market was screaming.

284
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And we luckily, and I like to think, very smartly decided to rent.

285
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And we rented the whole four years.

286
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Very smart.

287
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And our rent never went up.

288
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And I think that was because right after 21, things started cooling off.

289
00:24:01,515 --> 00:24:03,715
And it's not only on the residential side.

290
00:24:03,815 --> 00:24:08,455
If you were in South Austin, if you look north to downtown, there was, I think.

291
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All the multifamily.

292
00:24:09,355 --> 00:24:13,935
There was 10 trains in the sky the whole four years that we lived there.

293
00:24:14,115 --> 00:24:16,355
And you talk about, that's one thing I worry about.

294
00:24:16,915 --> 00:24:26,855
My commercial real estate friends in Austin specifically is because there's a ton of inventory coming on market, both in residential and commercial real estate.

295
00:24:27,135 --> 00:24:30,235
I used to rank a city on how many cranes I'd have.

296
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I call it like five crane sand, even though Austin, I would argue there were probably like 30 cranes when I was there.

297
00:24:37,555 --> 00:24:40,775
You know, I often wonder where the crane's going to go to die.

298
00:24:40,935 --> 00:24:44,275
You know, these are usually individual operators, a lot of them.

299
00:24:44,775 --> 00:24:46,475
And so Nashville was the same.

300
00:24:46,695 --> 00:24:49,775
You know, Nashville, I think, was the first to really get started.

301
00:24:49,895 --> 00:24:51,635
They started really around 2018.

302
00:24:52,575 --> 00:24:54,735
But yeah, it was that multifamily.

303
00:24:54,815 --> 00:24:56,775
And this is the thing, Marty, it's all luxury.

304
00:24:56,775 --> 00:25:00,175
It's like everybody forgot who lives in this country.

305
00:25:00,235 --> 00:25:05,455
Like, and I think that this, because we saw wages going up, you know, for that brief moment

306
00:25:05,455 --> 00:25:09,075
and, you know, and it was like, oh, we're all getting rich.

307
00:25:09,075 --> 00:25:10,215
We're all going to be rich.

308
00:25:10,375 --> 00:25:14,375
We're all going to get fairly paid and life is going to be golden.

309
00:25:14,895 --> 00:25:17,915
And, you know, because you had a handful, this is what's so funny.

310
00:25:17,955 --> 00:25:23,695
You had a handful of Californians and people like this move into certain areas and people

311
00:25:23,695 --> 00:25:27,895
are like, they're all moving to my city and then built for that Californian.

312
00:25:27,895 --> 00:25:32,915
Well, the fact is there's a limited number of those Californians that are going to come.

313
00:25:33,155 --> 00:25:35,195
And this luxury, nobody can afford.

314
00:25:35,315 --> 00:25:43,515
And Austin has all, I mean, the vacancy and multifamily there is just staggering because they all built these luxury high rises in downtown that are empty.

315
00:25:44,155 --> 00:25:44,635
Yeah.

316
00:25:45,315 --> 00:25:45,755
The luxury.

317
00:25:45,835 --> 00:25:48,475
And then they had the California white boxes that they were building.

318
00:25:48,555 --> 00:25:54,275
We were in the Zilker Park neighborhood and there was the California box style house that sat for sale.

319
00:25:54,495 --> 00:25:55,295
The black houses.

320
00:25:55,615 --> 00:25:56,515
Did you see those?

321
00:25:56,515 --> 00:26:00,195
And I was like, what, what is this? This is what, what was that?

322
00:26:00,575 --> 00:26:02,495
It's not really aesthetically pleasing either.

323
00:26:03,675 --> 00:26:10,035
And then I saw what's that movie series despicable me. Is he the one?

324
00:26:10,135 --> 00:26:13,155
Yeah. He has the black house. I was like, is this what this is?

325
00:26:13,155 --> 00:26:15,815
Like I just, it made no sense, but anyway. Okay.

326
00:26:16,075 --> 00:26:18,155
Building for grew. You don't want to do that.

327
00:26:18,355 --> 00:26:22,775
As a father of young children, very familiar with the despicable me series.

328
00:26:22,775 --> 00:26:23,395
That's right.

329
00:26:25,795 --> 00:26:35,235
No, that's, I mean, I'm not sure if you're a fan of urbanism or like Chuck Maroon's strong towns concept, but that's something that I pay very much attention to.

330
00:26:35,335 --> 00:26:43,295
And it's the reason why we moved to the section of the Philadelphia area that we did is because you have houses that are literally 100 years old that were built well.

331
00:26:43,715 --> 00:26:44,195
I love that.

332
00:26:44,195 --> 00:26:57,315
I think that's one thing that really disheartens me in today's day and age is literally taught to get on the hamster wheel of competing and outpacing, competing with and outpacing inflation.

333
00:26:57,315 --> 00:27:06,355
And that just leads to completely misaligned incentives in terms of the quality of builds and what you're getting to market at the end of the day.

334
00:27:06,935 --> 00:27:06,955
Right.

335
00:27:07,435 --> 00:27:09,075
I think that's going to be a massive problem.

336
00:27:09,075 --> 00:27:10,855
We have to deal with decades from now.

337
00:27:10,935 --> 00:27:17,295
It's like during these periods of the mega sites that you're mentioning, what are we going to do when nobody buys these houses?

338
00:27:17,895 --> 00:27:20,675
We bulldozed it last time.

339
00:27:20,735 --> 00:27:22,375
We bulldozed it in the 30s.

340
00:27:22,635 --> 00:27:23,995
Like, we'll bulldoze it.

341
00:27:24,195 --> 00:27:29,515
I mean, actually, there's a book called Swamp Peddlers, also another book called Bubble in the Sun about Florida.

342
00:27:29,995 --> 00:27:31,255
They take you through this history.

343
00:27:31,375 --> 00:27:33,635
This is something that happens over and over.

344
00:27:33,635 --> 00:27:40,715
and there's a picture of a guy on a bulldozer in a subdivision from back, you know, in the 30s.

345
00:27:40,715 --> 00:27:47,055
And so and now what was crazy for me, because I did manage to fault at the end of the last crisis

346
00:27:47,055 --> 00:27:54,455
and spent most of my time in Florida and I would go and look and they were building on the same

347
00:27:54,455 --> 00:27:59,615
subdivision that had been bulldozed before. I mean, that that was just like that is when I knew

348
00:27:59,615 --> 00:28:06,175
in the middle of Florida, flooding everywhere, low cell service, 21 of these mega sites. I was

349
00:28:06,175 --> 00:28:11,835
just like, whoa, that's Lakewood Ranch. That will go down in history and not a good way.

350
00:28:12,395 --> 00:28:16,255
And so that's what we're going to have to do. And I often say I'm bullish bulldozers,

351
00:28:16,495 --> 00:28:18,995
although John Deere's having a little bit of trouble right now.

352
00:28:19,335 --> 00:28:20,935
So, bye.

353
00:28:21,335 --> 00:28:23,755
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That's a good question. As you described earlier, it seems like the dynamics of the debt markets, the credit markets and real estate are different than they were in 2008 with the banks sort of fading real estate due to reserve requirements and Basel III. What's the other one? Oxley. What's the first word there?

386
00:30:56,370 --> 00:30:57,030
Oh, socks.

387
00:30:57,490 --> 00:30:57,630
Yeah.

388
00:30:57,890 --> 00:30:58,410
Sarbanes socks.

389
00:30:58,630 --> 00:30:59,630
Sarbanes socks.

390
00:30:59,730 --> 00:31:00,530
Oh, I'll never forget.

391
00:31:00,670 --> 00:31:01,370
Socks, yes.

392
00:31:02,030 --> 00:31:04,670
Most of my mid-30s.

393
00:31:04,810 --> 00:31:04,870
Yeah.

394
00:31:04,930 --> 00:31:11,870
So how do you think this deleveraging plays out and how does it differentiate from 2008 if it is upon us?

395
00:31:12,630 --> 00:31:20,950
Oh, you know, I think that private equity, private credit, like this is one big mess and it's going to be ugly.

396
00:31:20,950 --> 00:31:26,610
Um, I, I have a theory and this is, I often talk, think way into the future, Marty, and

397
00:31:26,610 --> 00:31:28,390
you know, I'll lose a lot of people that way.

398
00:31:28,390 --> 00:31:35,550
Um, but, uh, I have a theory we might see a, uh, bailout in the form of Fannie and Freddie,

399
00:31:35,650 --> 00:31:42,750
a government agency buying back the homes from private equity because I, and you know,

400
00:31:42,770 --> 00:31:47,890
under the ruse, the ruse, it will be a ruse under the ruse of affordable housing.

401
00:31:47,890 --> 00:31:51,510
because these guys are so over their skis

402
00:31:51,510 --> 00:31:54,030
and the banks are exposed here as well

403
00:31:54,030 --> 00:31:56,930
because they've lent to these private credit.

404
00:31:57,430 --> 00:31:59,870
And it's just like what we're just now seeing

405
00:31:59,870 --> 00:32:03,010
with Tricolor, this subprime auto dealer

406
00:32:03,010 --> 00:32:06,530
that just blew up claims of fraud.

407
00:32:06,690 --> 00:32:09,730
And we're seeing Fifth Third had to make a huge write down,

408
00:32:09,970 --> 00:32:12,790
almost 10% of their existing reserves.

409
00:32:12,790 --> 00:32:21,190
um so you know this is for one one one one loan guys one loan so if if you're not paying attention

410
00:32:21,190 --> 00:32:26,990
you need to pay attention to this tricolor start because it's going to be ironic um i used to so

411
00:32:26,990 --> 00:32:33,570
my company was originally owned by my former company by gm back during the crisis okay so

412
00:32:33,570 --> 00:32:40,130
we were very closely aligned with our auto partners we were the mortgage arm and you know

413
00:32:40,130 --> 00:32:46,130
back then it was all you bad, bad mortgage people. How could you ever, you know, get like,

414
00:32:46,230 --> 00:32:52,710
get us in this position. And then of course we, we got TARP money and it became Ally Bank.

415
00:32:53,510 --> 00:33:01,350
Who gets, guess what they've done in auto. They went whole hog into subprime. And so it's so,

416
00:33:01,430 --> 00:33:06,170
it's just, it's for someone who is, you know, in a corporate culture where we were the redheaded

417
00:33:06,170 --> 00:33:13,050
stepchild like this is actually kind of funny but um they're they're impacted and so this i think

418
00:33:13,050 --> 00:33:18,790
auto is going to be the first place we see the fires um and then it's going to have a contagion

419
00:33:18,790 --> 00:33:24,770
effect um but the abs is uh in bad shape again it's the same thing it's like people have been

420
00:33:24,770 --> 00:33:31,130
sharing the meme of georgia from the big short you know she's got uh the dark glasses and at s&p

421
00:33:31,130 --> 00:33:32,250
I think it's S&P.

422
00:33:33,030 --> 00:33:33,770
They don't.

423
00:33:33,910 --> 00:33:39,170
I mean, again, they're asleep at the wheel or or or, you know, they actually know and they just don't care.

424
00:33:40,510 --> 00:33:45,970
Well, that's it's interesting you bring that up, as I mentioned before we hit record, just had our third child.

425
00:33:46,050 --> 00:33:52,130
So we I mean, we're very, very conservative with household finances as Bitcoiners.

426
00:33:52,850 --> 00:33:53,590
We save in Bitcoin.

427
00:33:53,590 --> 00:33:58,090
We try to spend less than we weigh less than we make.

428
00:33:58,090 --> 00:34:03,950
but we had to upsize and get a second car due to the fact that we need a third row now,

429
00:34:04,030 --> 00:34:05,010
which is a good thing.

430
00:34:05,230 --> 00:34:07,730
But the financing of the car was very interesting.

431
00:34:07,870 --> 00:34:13,450
I have a very good credit score and I got ping-ponged around by different financers

432
00:34:13,450 --> 00:34:14,310
and had to pay.

433
00:34:14,530 --> 00:34:18,290
I'm paying a crazy rate on it that I'm hoping to refi at some point next year.

434
00:34:19,990 --> 00:34:20,870
That's wild.

435
00:34:21,070 --> 00:34:21,450
Really?

436
00:34:21,890 --> 00:34:22,090
Yeah.

437
00:34:22,230 --> 00:34:23,590
Oh, so that, wow.

438
00:34:23,750 --> 00:34:25,510
So that tells you what's happening.

439
00:34:25,510 --> 00:34:29,610
Yeah, like me knowing sort of following what's happening.

440
00:34:29,730 --> 00:34:32,270
I'm like, oh, wow, they're really desperate for yield here.

441
00:34:32,950 --> 00:34:33,790
Yeah, yeah.

442
00:34:33,970 --> 00:34:39,530
And I mean, but that's that's how these games go, like auto origination, mortgage origination.

443
00:34:39,790 --> 00:34:46,510
Like they always forget there's going to be a cycle where they've brought everybody in they can possibly bring in.

444
00:34:46,610 --> 00:34:49,230
And then but but it is a Ponzi.

445
00:34:49,350 --> 00:34:52,270
You need the way the securitization markets work.

446
00:34:52,790 --> 00:34:53,850
It's a drug.

447
00:34:53,850 --> 00:35:01,810
You need that gain on sale. You need that to originate that loan so you can sell it into the capital markets and get that hit.

448
00:35:01,950 --> 00:35:09,590
And it becomes very addictive. And when you get in these down cycles, they simply cannot cover their cost of funds like they can't, you know.

449
00:35:09,670 --> 00:35:15,330
And so you're there that that is very telling, actually, Marty. Thank you for sharing that with me.

450
00:35:15,390 --> 00:35:18,070
I mean, I could feel it. I could see it. But that's that's wow.

451
00:35:18,070 --> 00:35:27,310
So, yeah, I think let's watch auto. I think that is, you know, it behaved rather well during the last crisis because people did.

452
00:35:27,430 --> 00:35:34,450
They chose their house over there. I'm sorry. They chose their car over their houses because they needed to get to work.

453
00:35:34,490 --> 00:35:44,670
But this time around, I think because of all this crazy lending, we could really see fires in auto and it could cause quite a disruption in the credit markets.

454
00:35:44,670 --> 00:35:45,670
Yeah.

455
00:35:46,670 --> 00:36:03,890
I mean, since you mentioned the Fannie Freddie bailout, potential bailout theory to just buy up the houses from these credit funds and PE firms using the guise of housing affordability.

456
00:36:03,890 --> 00:36:16,270
I mean, it seems like if there are sort of if there's an order of operations to this on the front order of operations beginning to signal to the market as an administration that this is what you want to do.

457
00:36:16,310 --> 00:36:26,130
And it seems like Scott Bissett, Bill Pulte and Donald Trump have explicitly been more explicit in recent months about housing affordability, housing emergency.

458
00:36:26,550 --> 00:36:29,330
Yes. Housing, a housing crisis, housing emergency.

459
00:36:29,330 --> 00:36:46,450
And there's much talk about the Trump administration spinning out Fannie Mae and Freddie Mac as a private company to sort of allow them to get out of the Obama era bailout and feeding their profits into the federal government.

460
00:36:47,550 --> 00:36:49,550
I have a theory on that as well.

461
00:36:50,130 --> 00:36:50,770
Let's hear it.

462
00:36:51,690 --> 00:36:53,630
I think the banks want this.

463
00:36:53,850 --> 00:36:56,130
I think the banks want them out of mortgage.

464
00:36:56,130 --> 00:37:02,910
I they they really you know the banks really mortgage is a great product when it's working

465
00:37:02,910 --> 00:37:08,290
well and you can make a lot of there's not much you can make this much money on and because of

466
00:37:08,290 --> 00:37:13,650
those requirements they had to scale back and and I can tell you that nobody back then nobody wanted

467
00:37:13,650 --> 00:37:20,310
to be a government lender because of the just the red tape all of it it's crazy and then they they

468
00:37:20,310 --> 00:37:27,170
always, Marty, find a way to make you pay. It's never as good as like, oh, your FHA loan is fully

469
00:37:27,170 --> 00:37:33,410
backed. Oh, no, it's not. I've never seen one claim, like a full claim payout. And I managed

470
00:37:33,410 --> 00:37:38,590
a claims department because they will nickel and dime you. They'll also charge you fees for things

471
00:37:38,590 --> 00:37:42,390
that you can't control. They'll also make you repurchase. Anyway, working with them is a

472
00:37:42,390 --> 00:37:49,730
nightmare. So I have a theory that the banks want them out. And by privatizing, I think that Fannie

473
00:37:49,730 --> 00:37:55,730
and Freddie would suicide themselves. And so I think that this could be actually one of those

474
00:37:55,730 --> 00:38:00,790
things where on the surface, it looks like one thing, but it's really about another. And I'll

475
00:38:00,790 --> 00:38:07,290
tell you why I believe this. So recently, our Congress somehow passed the trigger ban. I mean,

476
00:38:07,310 --> 00:38:12,210
they can't do anything else. Trigger lead ban. What is this? This is where when you go to get

477
00:38:12,210 --> 00:38:19,330
credit for a mortgage, the credit agencies will sell that you're actually, you just got a hard

478
00:38:19,330 --> 00:38:25,110
pull for credit to all of these non-bank originators. And they'll buy, so those non-banks

479
00:38:25,110 --> 00:38:30,130
will buy up those leads and then they'll call you and you will get like, if you do this, you will

480
00:38:30,130 --> 00:38:37,930
get hammered. Okay. And so essentially this is, this is very beneficial to the non-banks out of

481
00:38:37,930 --> 00:38:42,130
nowhere. And I talked to a lot of people in the industry. I was like, did you see this coming?

482
00:38:42,210 --> 00:38:47,190
And typically when you get some type of legislation and mortgage, the Mortgage Bankers Association,

483
00:38:47,190 --> 00:38:48,570
They're at the front lines.

484
00:38:48,810 --> 00:38:52,490
Everybody was taken by surprise that now you cannot.

485
00:38:52,730 --> 00:38:54,870
They've done a trigger lead ban.

486
00:38:55,290 --> 00:38:57,150
And this benefits the banks.

487
00:38:57,630 --> 00:39:02,090
And it benefits companies that do own both their origination and servicing.

488
00:39:02,270 --> 00:39:05,270
But in reality, I think it benefits the banks the most.

489
00:39:05,390 --> 00:39:08,730
And it's a way to start pushing out the non-banks again.

490
00:39:08,930 --> 00:39:14,970
So I think there's more afoot here than all the noise around this.

491
00:39:14,970 --> 00:39:29,930
And it's funny, you know, you heard that the banks came down to talk to Trump about this privatization plan. And that's partly, I think, as well, why they got the SLR, why they've been lobbying hard to get those requirements reduced.

492
00:39:29,930 --> 00:39:35,210
Sup freaks, guess what? We launched a browser extension. It's called Opportunity Cost and it

493
00:39:35,210 --> 00:39:39,230
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494
00:39:39,230 --> 00:39:44,810
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495
00:39:44,810 --> 00:39:52,450
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496
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497
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498
00:40:04,710 --> 00:40:11,190
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499
00:40:11,350 --> 00:40:17,810
That's opportunitycost.app. That's very, very interesting times because I have a lot of

500
00:40:17,810 --> 00:40:24,230
conversations on this show with analysts with very different theses about where we're going.

501
00:40:24,230 --> 00:40:32,950
And I think the predominant thesis that's been expressed on the show over the last month is that we're going to get lower rates.

502
00:40:33,750 --> 00:40:45,970
The Trump administration is going to do anything they can to make sure that the market keeps screaming and it's all systems go moving forward, which I could definitely see happening.

503
00:40:45,970 --> 00:40:52,010
But then you look at all this anecdotal data, like the chart I showed to open the episode.

504
00:40:52,210 --> 00:40:58,910
You look at delinquency rates, the amount of credit card debt that exists, where stocks are training their PE levels at dot com.

505
00:41:00,510 --> 00:41:15,810
Historic highs. And it's just like a squint at situations like, OK, how can they really keep continue doing this without first saving the middle class or making making life?

506
00:41:15,970 --> 00:41:21,210
better for the middle class, more affordable for the middle class. Right. And I think the train has

507
00:41:21,210 --> 00:41:25,970
left the station. And what I've been trying to tell people is like, you know, you've got to

508
00:41:25,970 --> 00:41:31,670
really somehow figure out how to reduce the noise and look at the real signals. And it's increasingly

509
00:41:31,670 --> 00:41:38,030
hard to tell what is a real signal, especially when they're screaming about the national

510
00:41:38,030 --> 00:41:45,250
emergency on housing. But, you know, the Senate did a very interesting op-ed that not many people

511
00:41:45,250 --> 00:41:51,830
talked about. It was really weird in the Wall Street Journal. And everything that I've seen

512
00:41:51,830 --> 00:41:58,190
action wise, action, not words out of this administration, as they they may perform

513
00:41:58,190 --> 00:42:05,790
some sort of bail out or whatever, but they're they're leaving it alone. And, you know, they put

514
00:42:05,790 --> 00:42:11,330
the guardrails on this FHA program, which could single handedly take down this market, actually.

515
00:42:11,330 --> 00:42:27,310
And so maybe they don't understand what they did. But I if if so, my former CEO or actually he wasn't a CEO at the time, my former he was a boss of mine at my former company is the CFO at Freddie Mac.

516
00:42:27,750 --> 00:42:34,890
And he was the only one left standing, you know, because you remember Pulte went in there and just like cut everybody out.

517
00:42:34,890 --> 00:42:38,010
And I have to believe that he understands.

518
00:42:38,430 --> 00:42:41,830
And immediately following that, Fannie and Freddie took nine.

519
00:42:42,010 --> 00:42:47,030
Well, so Fannie took a nine hundred million, almost a billion dollars in provision for loan loss.

520
00:42:47,710 --> 00:42:52,970
And so I think there is awareness and I think there will be some performance.

521
00:42:52,970 --> 00:42:56,970
But right now it feels as if they're going to let this thing loose.

522
00:42:57,070 --> 00:42:59,510
They're going to let it go. So we'll see.

523
00:42:59,510 --> 00:43:04,610
You have to keep, you know, again, it's kind of like we also heard from them in April, you know, Main Street.

524
00:43:04,610 --> 00:43:09,970
over Wall Street. And then we got a few stock market losses. And you could tell, you know,

525
00:43:09,990 --> 00:43:14,390
it was like, oh, the big freak out. And so you never know. Once we get into the situation,

526
00:43:15,050 --> 00:43:20,130
they might put the brakes on. But what will probably happen is the state AGs will get involved,

527
00:43:20,230 --> 00:43:23,530
especially if we get into another foreclosure crisis to slow it down.

528
00:43:25,230 --> 00:43:28,970
What do you think is the best path forward? Do you think we just need to

529
00:43:28,970 --> 00:43:34,150
take the hard medicine of stomaching this deleveraging and let it fall back to

530
00:43:34,150 --> 00:43:40,910
prices that are probably more representative of what these properties are actually worth.

531
00:43:41,430 --> 00:43:47,910
Is it as existential as we were made to believe it was in 2008,

532
00:43:47,910 --> 00:43:51,590
where the housing market is a cornerstone of the American economy,

533
00:43:51,750 --> 00:43:55,750
and you simply can't let it fall, so you have to come in and bail out at all costs.

534
00:43:56,050 --> 00:44:00,550
Somebody who's been through a couple of these cycles now, at least,

535
00:44:00,550 --> 00:44:07,290
what what do you think is the best course of action despite what may or may not happen

536
00:44:07,290 --> 00:44:13,790
if we don't give our younger generation something to hope for soon marty i don't think anybody's

537
00:44:13,790 --> 00:44:19,630
going to want to live in this country i mean it's i think we're i think it is somewhat so i think

538
00:44:19,630 --> 00:44:26,650
it's existential in the other way like right it's like we had to save uh the housing market last time

539
00:44:26,650 --> 00:44:33,750
you know, the boomers. I mean, I don't like getting into the generational wars or whatever,

540
00:44:33,930 --> 00:44:39,330
but, you know, I think this time around, if we don't give our younger generation something to

541
00:44:39,330 --> 00:44:44,790
hope for, we're going to see more of what we have been seeing. And it's just the nihilism,

542
00:44:45,450 --> 00:44:51,510
you know, the depression, the deaths of despair. Like, I think we're reaching a point where we have

543
00:44:51,510 --> 00:44:58,330
to have young people who can dream again, dream about the things that really are important to us

544
00:44:58,330 --> 00:45:03,890
as Americans. And so I think, yes, I think they need to let it. I think housing has to become

545
00:45:03,890 --> 00:45:08,970
boring again. And, you know, this happened before the Great Depression as well. Everybody was a

546
00:45:08,970 --> 00:45:14,290
landlord. Everybody thought that was the way to get rich. And then you suddenly realize, oh my gosh,

547
00:45:14,370 --> 00:45:19,630
you know, I'm getting phone calls at midnight on Friday. I don't have a weekend anymore. My property

548
00:45:19,630 --> 00:45:21,810
tax and insurance are going through the roof.

549
00:45:22,250 --> 00:45:24,750
I can't find tenants who can pay.

550
00:45:24,910 --> 00:45:28,790
Like if I'm in California, I can't evict them, you know, or New York or whatever.

551
00:45:29,410 --> 00:45:33,570
And so I think that the landlord class, and you kind of mentioned this earlier in the

552
00:45:33,570 --> 00:45:48,765
show you know there now a house coin and I often get people well I got a huge crypto community now that kind of every time I post something negative about housing they come in you know saying many of the things that you said

553
00:45:48,825 --> 00:45:50,445
And so I think this is taking hold.

554
00:45:50,445 --> 00:46:01,965
And I think the reason the sentiment changed is with these natural disasters that we had last year with Helene, with Milton, with the fires, you know, that it changed.

555
00:46:02,125 --> 00:46:08,405
That was in huge areas where people had gone in Bigley for Airbnbs, short term rentals.

556
00:46:08,525 --> 00:46:12,425
And all of a sudden overnight, you have this massive nightmare and losses.

557
00:46:12,425 --> 00:46:16,665
And, you know, the Palisades, I mean, that that destruction was insane.

558
00:46:16,665 --> 00:46:22,625
And so I think this is the sentiment has been changing for some time, but being a landlord is not going to be cool.

559
00:46:22,705 --> 00:46:30,065
It's not cool. And so I think that housing could become boring again if they stop intervening and they can continue to try, Marty.

560
00:46:30,185 --> 00:46:39,445
I mean, they're going to try something. Right. But I think that we've we've reached the point that whatever they try to do to help the boomers is going to crush the younger generations.

561
00:46:39,445 --> 00:46:47,805
And I think as you can, I think that some of our recent events that have occurred, we can see how much anger is really out there.

562
00:46:48,005 --> 00:46:55,885
And we're going to have to contend with that. And when people talk about UBI or things like that, I just look at them and say, who's going to be giving out the houses?

563
00:46:55,885 --> 00:47:01,445
Because that person is probably I mean, they're going to need significant security detail.

564
00:47:01,445 --> 00:47:06,345
And in fact, it won't be enough, you know, so there's just I think that everybody's saying lower rates.

565
00:47:06,345 --> 00:47:09,465
Well, OK, that's up to the bond market.

566
00:47:10,785 --> 00:47:15,445
I mean, what has been is not necessarily going to be so, you know, for the past 40 years.

567
00:47:15,585 --> 00:47:23,565
And I think, OK, well, you've got a globally synchronized economy that so many are facing some sort of trouble.

568
00:47:23,985 --> 00:47:27,585
You're going to have people are going to have to get like, you know, tribal.

569
00:47:27,725 --> 00:47:29,525
They're going to have to defend their currencies.

570
00:47:29,845 --> 00:47:31,225
They're going to have to do things.

571
00:47:31,345 --> 00:47:36,165
And it might mean selling off the 10 year and we won't get the lower rates.

572
00:47:36,165 --> 00:47:41,605
I mean, but since been saying that since what December and we'd have not gotten there.

573
00:47:41,705 --> 00:47:48,325
And so we can't get below four. Like you and I were just talking. I was like, oh, where's the tenure? Are we below four yet? Are we below four yet?

574
00:47:48,405 --> 00:47:53,525
We haven't gotten there. We might get there. But will we stay there? I'm not sure.

575
00:47:53,525 --> 00:48:03,025
no and that's i think that's the collective market has amnesia in terms of this idea that

576
00:48:03,025 --> 00:48:10,285
if you lower the fed funds rate the 10 and 30 year will follow exactly exactly a year ago

577
00:48:10,285 --> 00:48:17,745
exactly a year ago like what's i are we all this silly i mean i i don't understand so it's like

578
00:48:17,745 --> 00:48:23,745
this time i mean marty for three years because i well really honest to god it's been uh five years

579
00:48:23,745 --> 00:48:29,585
um you know it's just my entire industry it's like oh light rates are gonna go so low so low

580
00:48:29,585 --> 00:48:36,205
you know um and and then when we got the hikes um you know people just couldn't believe and they

581
00:48:36,205 --> 00:48:41,965
just that's all they've been selling for the last three years you know so it's it's crazy yeah

582
00:48:41,965 --> 00:48:59,205
Yeah. No, it's your point about the existential crisis being in the other direction this time around. That's my biggest worry, too, is if you think about who are the largest donors, who are the most politically active, who is the most representative in the political class, it's the boomers.

583
00:48:59,205 --> 00:49:13,585
And so if we do get to the precipice of if and when we do get to the precipice of a real estate and broader economic crisis, I do fear just not even fear.

584
00:49:13,705 --> 00:49:16,385
It's just like what is the most likely outcome if you're looking at incentives?

585
00:49:16,385 --> 00:49:27,905
It's the people funding the campaigns who are the most politically active and from an age perspective, most representative in Congress and the Senate.

586
00:49:27,905 --> 00:49:30,845
it's probably most likely that they're going to get another bailout.

587
00:49:31,545 --> 00:49:35,765
I think they're going to try, but I don't know if you follow Russell Napier at all.

588
00:49:36,485 --> 00:49:37,285
I do. I do.

589
00:49:37,625 --> 00:49:43,205
And I think that, you know, what I have learned from Russell and just talking to other people,

590
00:49:43,205 --> 00:49:48,845
it's like thinking about what they have to do versus what they, you know, want to do.

591
00:49:49,285 --> 00:49:54,625
And at some point, Marty, like, you know, they've gotten rid of a lot of the SNAP benefits

592
00:49:54,625 --> 00:50:01,285
through the BBB, Medicare, they've done what they can to like the lower middle class.

593
00:50:01,585 --> 00:50:03,885
They're going to have to go where the money is.

594
00:50:03,885 --> 00:50:07,205
And the money is not, you know, in the middle class anymore.

595
00:50:07,205 --> 00:50:08,605
And it's not in the lower class.

596
00:50:08,605 --> 00:50:10,385
And they're squeezing that as much as possible.

597
00:50:10,385 --> 00:50:12,345
And so I think they're going to you're right.

598
00:50:12,425 --> 00:50:15,085
They're going to try everything they possibly can.

599
00:50:15,185 --> 00:50:17,765
But I just don't think it's going to work this time.

600
00:50:18,505 --> 00:50:22,705
Because and, you know, they're going to ultimately we're going to have to go where the money is.

601
00:50:22,705 --> 00:50:30,645
yeah it's a crazy time to be alive it really is because i'm just thinking through it like

602
00:50:30,645 --> 00:50:38,305
because i don't like if even if we do have an asset price deflation and correction

603
00:50:38,305 --> 00:50:43,365
like the amount of money that's going to be printed in reaction is going to be inflationary and

604
00:50:43,365 --> 00:50:49,625
um just to think that people living off of retirement can continue to assist on that

605
00:50:49,625 --> 00:50:55,705
sustainably is very hard to believe. And I think we put ourselves in a rock and a hard place again.

606
00:50:56,225 --> 00:51:02,025
Bitcoin podcast, I think this is all derived from the money itself and the corruption of how money

607
00:51:02,025 --> 00:51:08,905
works and the cost of money by manipulating interest rates. And I think part of the solution

608
00:51:08,905 --> 00:51:15,745
is not going to be mechanical in terms of the different policy decisions and where you decide

609
00:51:15,745 --> 00:51:19,925
to inject liquidity, I think it's going to be philosophical and more human where I think

610
00:51:19,925 --> 00:51:26,265
there's going to be, there's going to have to be a moment where individual individuals

611
00:51:26,265 --> 00:51:29,125
realize like, Hey, my parents are retired.

612
00:51:29,405 --> 00:51:31,125
They're not gonna be able to live off their retirement.

613
00:51:31,365 --> 00:51:37,305
We may need to get back to multi-generational housing instead of the son living in their

614
00:51:37,305 --> 00:51:41,125
parents' basements, the parent hopefully living in the child's home.

615
00:51:41,125 --> 00:51:45,425
I moved my mom in with me a year and a half ago.

616
00:51:45,745 --> 00:51:49,325
Um, and you know, before that I had just considered buying her house.

617
00:51:49,705 --> 00:51:51,785
It just, it just didn't make sense.

618
00:51:51,785 --> 00:51:53,445
You know, it's like, okay.

619
00:51:53,445 --> 00:51:55,385
And you know, Gen X, I'm a Gen Xer.

620
00:51:55,765 --> 00:51:57,585
Gen Xers were so independent.

621
00:51:57,585 --> 00:51:59,105
We're so into it, you know?

622
00:51:59,145 --> 00:52:01,565
And so the whole, the idea of it was just insane.

623
00:52:01,765 --> 00:52:05,905
But in reality, I just looked at the money and I was like, this is not, and also knowing,

624
00:52:05,905 --> 00:52:10,385
you know, I was studying macro at the time and thinking, no, we need to bat down the

625
00:52:10,385 --> 00:52:10,965
hatches.

626
00:52:11,125 --> 00:52:14,845
Um, and because I think the worst thing you can be in right now is in debt.

627
00:52:14,845 --> 00:52:21,725
I mean, I think that those that are in debt are just going to get crushed by those higher interest rates on credit cards.

628
00:52:21,965 --> 00:52:31,465
You know, it's just I always say say no to debt slavery because in these hard times, those are the people that just get absolutely crushed.

629
00:52:32,085 --> 00:52:34,145
So but yeah, it's already happening.

630
00:52:34,405 --> 00:52:37,385
That's we saw household formation slow last year.

631
00:52:37,885 --> 00:52:39,205
People are consolidating.

632
00:52:39,205 --> 00:52:47,545
Some of the most active construction projects are adding on like your mother-in-law apartment or an ADU on your property.

633
00:52:47,965 --> 00:52:50,445
But like you say, it's going to it's going to shift.

634
00:52:50,525 --> 00:52:58,265
It's going to be the kids that have to take the parents in because actually the boomers are the largest increase to the homeless population right now.

635
00:52:58,345 --> 00:53:02,985
Now, of course, there's the largest group of people, but still not every boomer is rich.

636
00:53:03,105 --> 00:53:07,825
Many of them got wiped out during the GFC, you know, and don't have savings.

637
00:53:07,825 --> 00:53:11,965
In fact, my family got wiped out during our last bout of inflation.

638
00:53:12,545 --> 00:53:17,505
We lost my home to foreclosure when I was nine and a part of my family never recovered.

639
00:53:17,765 --> 00:53:34,765
And I think this is what happens in these huge cycles is you kind of take out massive swaths of the population that just you you take away their future, their financial freedom and their future to be able to be in a position to have enough money to live.

640
00:53:35,105 --> 00:53:35,545
Yeah.

641
00:53:35,545 --> 00:53:38,585
I want to get your thoughts on potential solution.

642
00:53:40,105 --> 00:53:46,545
Selfishly, because outside of this show, I'm a managing partner at a fund that invests in Bitcoin infrastructure.

643
00:53:47,245 --> 00:53:47,905
It's called 1031.

644
00:53:48,645 --> 00:53:53,525
And we've invested and actually entered in a joint venture with a company called Battery Finance.

645
00:53:54,225 --> 00:53:58,785
They spun out a new market capital, which is a traditional structured credit fund with their founder.

646
00:53:59,705 --> 00:54:05,125
And CEO Andrew Hones and their CIO really caught the Bitcoin bug in 2020.

647
00:54:05,125 --> 00:54:23,145
And they're looking out at this problem that we're describing today, particularly with a focus on commercial real estate right now, but ambitions to get into residential real estate and saying we've got a mismatch in terms of the quality of the assets that are sitting within these structured credit products and the reality of the economy.

648
00:54:23,145 --> 00:54:42,445
What they're doing is combining Bitcoin and these assets to try to make it easier to underwrite from a credit perspective because you have sort of uncorrelated, highly liquid, fungible collateral sitting alongside the real estate.

649
00:54:42,445 --> 00:54:48,145
And so they underwrote their first project last year here in Philadelphia, actually,

650
00:54:48,845 --> 00:54:55,445
this commercial real estate, multi-purpose building down in Center City, Philadelphia.

651
00:54:55,945 --> 00:55:01,545
And they basically refied, I believe it was a $12.5 million loan.

652
00:55:02,285 --> 00:55:05,865
Nine was used to pay off the existing mortgage.

653
00:55:05,865 --> 00:55:13,685
two was set aside to do repairs and maintenance and upgrades to the property.

654
00:55:13,785 --> 00:55:19,165
And then one to one and a half, I believe, was used to buy Bitcoin to sit in the loan structure

655
00:55:19,165 --> 00:55:22,325
with the idea that this is a 10-year loan.

656
00:55:23,105 --> 00:55:27,205
We'll offer you a lower rate and maybe a longer amortization schedule.

657
00:55:29,045 --> 00:55:31,725
But we're going to both participate in the upside of the Bitcoin.

658
00:55:31,725 --> 00:55:35,285
The bet they're taking is, hey, we're going to de-risk our exposure.

659
00:55:35,865 --> 00:55:43,845
um to this real estate by adding bitcoin to the collateral package and you know we uh we're

660
00:55:43,845 --> 00:55:48,225
backing battery and very confident and passionate about it because i think when you're looking out

661
00:55:48,225 --> 00:55:51,325
at the world you're thinking of ways to fix this problem i think you have to get creative

662
00:55:51,325 --> 00:55:56,305
yeah and bold i think this is a bold creative solution and one of the big memes the last five

663
00:55:56,305 --> 00:56:00,925
years was the soft landing um that the fed and the treasury have been trying to manufacture and

664
00:56:00,925 --> 00:56:02,345
I don't think they can manufacture it.

665
00:56:02,405 --> 00:56:11,125
I think you need to begin to wean people off of real estate as a savings vehicle by introducing what should actually be the savings vehicle to these credit structures.

666
00:56:11,765 --> 00:56:12,645
Right. Right.

667
00:56:13,365 --> 00:56:22,965
Yeah. I mean, solutions, I think we have to we I would love if they just let the market, they'd leave it alone.

668
00:56:22,965 --> 00:56:29,385
And we did actually get the GSEs out of, you know, or at least a reduced presence.

669
00:56:29,385 --> 00:56:49,265
But I think that the solutions lie within us, Marty, and that we have to start caring locally again. And I think this is I love that you actually are investing where you live, you know, and I think this is important because we're we don't like you say, all the Congress folks are bought and paid for.

670
00:56:49,265 --> 00:56:56,225
Right. And they're there. And they're also of an age that don't they don't have a lot in common with us.

671
00:56:56,225 --> 00:56:59,205
And so but we can't do anything about that, really.

672
00:56:59,405 --> 00:57:03,145
I mean, we can vote, of course, but they're all bought and paid for.

673
00:57:03,365 --> 00:57:09,865
And so what I say is we have to vote with our dollars and we can't, you know, spend stupid money on stupid things.

674
00:57:09,965 --> 00:57:13,465
And we have to start caring locally like you have to start caring.

675
00:57:13,465 --> 00:57:18,205
Like if people had cared in Austin, that city council sold them down the river.

676
00:57:18,205 --> 00:57:27,385
I mean, like just sold them out. And so that's where I think the solutions start is let's do city planning again.

677
00:57:27,705 --> 00:57:33,225
Let's sit down and talk about these empty buildings as a community. What are we going to do about it?

678
00:57:33,305 --> 00:57:39,225
Perhaps there are people that do like you that want to come in and invest and help us revitalize our neighborhood,

679
00:57:39,385 --> 00:57:43,605
take back our cities from these speculators, because that's the everything.

680
00:57:43,605 --> 00:57:47,025
none of these speculators live in these cities, Marty. I mean, they're, you know, they're,

681
00:57:47,025 --> 00:57:54,105
they're either overseas or they're in California or New York. And so they're, they're not living

682
00:57:54,105 --> 00:58:00,505
there. They have no allegiance. And so in reality, what I'd love to see is government gets out of

683
00:58:00,505 --> 00:58:07,765
housing altogether. And that, I think the market will take hold because supply people are going to

684
00:58:07,765 --> 00:58:13,545
be so surprised by the amount of supply we're going to see in the next five years. And so

685
00:58:13,545 --> 00:58:15,985
the supply is going to drown out any,

686
00:58:16,205 --> 00:58:18,965
any other narrative or anything like that.

687
00:58:18,985 --> 00:58:22,945
And so I just wish we could actually sit down and talk about it so that we

688
00:58:22,945 --> 00:58:26,825
could come up with solutions, but I think it has to start loco.

689
00:58:28,025 --> 00:58:31,705
Yeah, I completely agree with that. And again, I mentioned it earlier,

690
00:58:32,045 --> 00:58:35,825
but have you read strong towns by Charles Maroon, Chuck Maroon?

691
00:58:36,245 --> 00:58:39,565
I haven't, I don't think I've read the book. Don't they have a newsletter?

692
00:58:40,185 --> 00:58:42,905
They have a newsletter. Okay. Yeah. I get that. Yeah.

693
00:58:42,905 --> 00:58:47,865
I believe they just did something with Pensacola or some town down in Florida.

694
00:58:48,065 --> 00:58:52,745
But anybody who's listened to this podcast for long enough is like, Marty, why are you mentioning strong towns again?

695
00:58:52,805 --> 00:59:01,285
Because I'm passionate about it and because I think Chuck is really tuned into what makes a strong town and is really focusing locally.

696
00:59:01,485 --> 00:59:01,845
I'll read that.

697
00:59:02,525 --> 00:59:10,845
And most importantly, the metric that he hones in on for a local economy is revenue per square foot for the small businesses.

698
00:59:10,845 --> 00:59:14,805
So like utilizing the space, that wasted space that you're describing.

699
00:59:15,245 --> 00:59:18,905
And I think it's actually something we do well here in Philadelphia.

700
00:59:18,905 --> 00:59:20,645
At least we did to a certain point.

701
00:59:20,685 --> 00:59:22,905
I just moved back, so I haven't been paying as much attention.

702
00:59:23,005 --> 00:59:27,445
But my cousin worked for the Horticultural Society for a long time.

703
00:59:27,605 --> 00:59:30,065
And it was probably about 10 years ago.

704
00:59:30,105 --> 00:59:36,405
But in the summer, they would go to vacant lots and activate them, like have food trucks and stand up beer gardens.

705
00:59:36,405 --> 00:59:42,885
and really good people invigorating and most importantly monetizing those spaces was what we

706
00:59:42,885 --> 00:59:49,885
need much more of small businesses and that's the great shame of particularly the political reaction

707
00:59:49,885 --> 00:59:55,385
and the policy reaction to COVID specifically to decimated small businesses in the middle class.

708
00:59:56,145 --> 01:00:03,285
Yeah it's so depressing and Marty when you drive as much as I do across the country it is just

709
01:00:03,285 --> 01:00:06,925
it's heart wrenching. It is just, you know, it,

710
01:00:07,205 --> 01:00:10,865
we are not living in the America that we remember. And, um,

711
01:00:11,045 --> 01:00:14,085
it, our cities have just, I mean,

712
01:00:14,185 --> 01:00:19,145
I've seen people OD in front of me, like in San Antonio. I mean, I, I, you know,

713
01:00:19,345 --> 01:00:23,905
I recently went out to California to skid row. I mean, I was that,

714
01:00:23,905 --> 01:00:26,865
I've thought I was in South Africa. I thought I was in Cape town. I mean,

715
01:00:26,865 --> 01:00:31,105
it was, it was insane. And this is all over the country, every downtown,

716
01:00:31,105 --> 01:00:39,725
Even my little city, Johnson City, Tennessee, this little city in the mountains, kind of like Asheville, is full of homeless people.

717
01:00:40,025 --> 01:00:44,285
You know, they come here for the Veterans Hospital, but it's one of the best in the country.

718
01:00:44,745 --> 01:00:47,305
It's just we are not living in the country we remember.

719
01:00:47,505 --> 01:00:52,245
And so many of us really don't get outside of our little circle and don't understand that.

720
01:00:52,245 --> 01:00:54,045
And that's why I just think.

721
01:00:54,072 --> 01:00:59,252
we have to one of my I'm so passionate about people just talking we have to be able to talk

722
01:00:59,252 --> 01:01:04,112
to each other and and even if we don't agree on anything we have to be able to talk about what's

723
01:01:04,112 --> 01:01:09,372
best for our communities and our families and I think most of us share a lot of the same ideals

724
01:01:09,372 --> 01:01:15,552
but a lot of what's programmed out there the bots want us to be yelling at each other and and so I

725
01:01:15,552 --> 01:01:22,452
just feel like we have to get back to that small town type understanding our culture where we can

726
01:01:22,452 --> 01:01:27,392
we can recognize and appreciate difference, but it's not everything we talk about. Like we just

727
01:01:27,392 --> 01:01:31,872
talk, it's just tolerance. Like we all love each other because we're working for the same thing.

728
01:01:32,032 --> 01:01:37,932
We want to provide our families a future. We want to provide, you know, um, our kids hope.

729
01:01:38,112 --> 01:01:44,672
And so, and you know, a lot of that in America is that dream of home ownership. And so I just feel,

730
01:01:44,672 --> 01:01:52,592
So we as a nation, we have just completely let sort of social media take us apart.

731
01:01:52,592 --> 01:01:59,332
And we just have to start fighting back, in my opinion, and getting involved locally and doing things probably nobody wants to do.

732
01:01:59,412 --> 01:02:02,252
Talk to other people. You have to talk to other people.

733
01:02:02,772 --> 01:02:11,552
Agreed. It's incredibly ironic because the state of discourse that you're describing is just feeding the negative feedback loop.

734
01:02:11,552 --> 01:02:18,352
And the state of discourse is driven by the problems that the underlying systemic problems that exist.

735
01:02:18,452 --> 01:02:26,332
So people, no matter if they're red or blue or MAGA or democratic socialist, whatever it is,

736
01:02:26,332 --> 01:02:35,772
they're suffering from the same economic, systemic economic problems that have very unique and specific problems at their core.

737
01:02:36,212 --> 01:02:41,412
And the discourse is just driving a wedge between everybody and exacerbating those problems.

738
01:02:41,412 --> 01:02:48,792
because you find that you actually never talk about solutions with other people.

739
01:02:49,512 --> 01:02:50,032
Ever.

740
01:02:50,612 --> 01:02:51,052
Ever.

741
01:02:51,532 --> 01:02:56,152
It's been what's most frustrating to me is that I just kept thinking like a dodo bird.

742
01:02:56,692 --> 01:02:58,692
Like we would get to that point.

743
01:02:59,052 --> 01:03:04,152
Like people would be more aware by now because they would just drive and look and see what's happening.

744
01:03:04,932 --> 01:03:07,632
And that we could start talking about solutions.

745
01:03:08,012 --> 01:03:10,532
And I mean, we just, we're not there yet.

746
01:03:10,532 --> 01:03:15,312
I mean, it does feel like, though, things have started to accelerate recently.

747
01:03:15,752 --> 01:03:20,072
I often talk about because, you know, people say, oh, you've been saying this for two years.

748
01:03:20,092 --> 01:03:23,292
I've been saying what the path is, like where we're headed.

749
01:03:23,932 --> 01:03:27,932
And basically, I say we've either sped up or we've slowed down.

750
01:03:28,072 --> 01:03:31,532
And we are we this summer, we started to speed up again.

751
01:03:31,532 --> 01:03:36,292
And and actually, we're at September 16th today.

752
01:03:36,512 --> 01:03:40,452
That FHA program gets its guardrails at the end of this month.

753
01:03:40,452 --> 01:03:44,472
starting in October and it will take time. This is not something that's overnight, but

754
01:03:44,472 --> 01:03:50,012
this is going to have a massive impact on the housing market. And most people are not

755
01:03:50,012 --> 01:04:04,437
paying attention I was on site at a very large mortgage servicer two weeks ago and they said Melody you the only client that started talking about this We just had one other person bring it up But I was like I mean I was screaming when I found out

756
01:04:04,437 --> 01:04:11,797
about it because this is going to double their work almost overnight. And so most people though

757
01:04:11,797 --> 01:04:15,737
in the industry that are left in the industry don't remember what happened last time.

758
01:04:16,137 --> 01:04:21,177
They have no, they don't understand a fault. And so the whole industry is asleep as well.

759
01:04:21,177 --> 01:04:25,897
So, I mean, it's, you know, this is going, like you say, these are very interesting times.

760
01:04:25,897 --> 01:04:30,657
And I just, the people that say like they've got the script and they know exactly what's going to happen.

761
01:04:30,777 --> 01:04:32,157
I call total BS.

762
01:04:32,557 --> 01:04:35,697
I mean, I think we are in the wild west right now.

763
01:04:36,057 --> 01:04:39,297
And people just want to believe they understand what's about to happen.

764
01:04:39,297 --> 01:04:44,157
But I think, I think we are, we are living in the moment, Marty, right now.

765
01:04:44,257 --> 01:04:46,337
And it's going to be kind of crazy.

766
01:04:46,337 --> 01:04:54,477
Yeah. And could could we just reiterate what those FHA guardrails are?

767
01:04:54,477 --> 01:05:19,637
Yeah. So this is this program was crazy. And there was a recent Wall Street Journal article. So it kind of got exposed in April because of a Wall Street Journal article. But it was nuts. So basically what the Biden administration did is, you know, back during the after the crisis, we had to re underwrite you if you were going to get a loan modification. We actually cared. Could you actually pay this modification if we give it to you?

768
01:05:19,637 --> 01:05:25,497
We modify your note. And some people could not. And so we we did not give them a modification.

769
01:05:26,197 --> 01:05:34,577
But what happened this time around because of covid and the stress of covid, people didn't have to send in financials anymore.

770
01:05:34,797 --> 01:05:39,637
In fact, they didn't even have to call their mortgage servicer to become to be put on a forbearance.

771
01:05:39,637 --> 01:05:42,997
You just automatically kept putting on it, getting put on it.

772
01:05:42,997 --> 01:05:52,637
And so then that wasn't enough, Marty. We saw in June of 23 people going into delinquency in the FHA.

773
01:05:52,957 --> 01:05:59,077
And we knew the administration knew that there was going to be an election and that was just not what they couldn't have it.

774
01:05:59,137 --> 01:06:07,997
And so they came up with this this like partial claim supplement modification where you essentially could go and say, you know what, I can't pay.

775
01:06:07,997 --> 01:06:12,837
I didn't pay for three months. And they say, no problem. Let me take those three months, put it at the back of your loan.

776
01:06:12,997 --> 01:06:17,737
and then you didn't pay for three more months and then you just went back again and then you went

777
01:06:17,737 --> 01:06:22,937
back again i have a colleague who has done he dives into the mortgage box security data

778
01:06:22,937 --> 01:06:29,417
and it has these partial claims and the partial claims if you've had one you are five to seven

779
01:06:29,417 --> 01:06:35,057
more times more likely to go into default again so these things are not they're just that you keep

780
01:06:35,057 --> 01:06:40,677
going back to the till and in fact you've got whole rings of originators that know this and

781
01:06:40,677 --> 01:06:44,277
they tell investors, Hey, you don't even have to pay your mortgage for 12 months.

782
01:06:44,277 --> 01:06:47,977
Like don't even, so go get this mortgage, go into early payment default.

783
01:06:48,157 --> 01:06:49,657
You'll be able to get this partial claim.

784
01:06:49,857 --> 01:06:52,437
And so, I mean, this is, this is insanity.

785
01:06:52,437 --> 01:06:58,557
And so what they did, um, many of us in the industry lobbied against this, uh, is they

786
01:06:58,557 --> 01:07:14,542
put guardrails on that You can only get one of these every 24 months People could go back You could take out up to 30 of your unpaid principal ballots 30 That is insanity Well now you can only do this

787
01:07:14,542 --> 01:07:18,962
every two months. You also have to pay trial payments to be eligible. Now, what is that?

788
01:07:19,122 --> 01:07:24,422
This is every workout. You have to pay at least three payments. So they know it's skin in the game.

789
01:07:24,522 --> 01:07:28,242
This is something we understood back then. You have to have some skin. So you have to make those

790
01:07:28,242 --> 01:07:33,922
three successful payments now starting in October. That was not even a requirement before.

791
01:07:34,822 --> 01:07:38,902
And then the other big thing that people don't get is if you have delinquent student loans,

792
01:07:39,062 --> 01:07:43,762
you will not be eligible for a workout. Now, Marty, I can tell you that every mortgage borrower

793
01:07:43,762 --> 01:07:49,582
out there is used to calling in and saying, no problem. You're going to, you'll get the hearing

794
01:07:49,582 --> 01:07:54,742
that you'll be getting some help. There's some kind of workout. We're just now starting to see

795
01:07:54,742 --> 01:08:02,042
people run out of all those options. Well, this accelerates that for FHA. And pretty soon, a lot

796
01:08:02,042 --> 01:08:06,022
of people that thought, okay, I'll be fine, because they're going to work something out with

797
01:08:06,022 --> 01:08:10,002
me are going to be told you have no option, because if you have delinquency loans, you will

798
01:08:10,002 --> 01:08:17,222
not be eligible. So this will all take time. And delinquency, you have to wait 120 days to foreclose,

799
01:08:17,222 --> 01:08:22,682
you have to wait for them to miss all three trial payments, things like this. But we will start to

800
01:08:22,682 --> 01:08:27,602
see this have a massive impact. We are going to see increasing foreclosures from here regardless,

801
01:08:27,982 --> 01:08:35,202
but we will see material foreclosures in Q2 of 2026. Yeah. And this is only residential, right?

802
01:08:35,362 --> 01:08:39,382
We're not even talking about commercial. I mean, we're not even, that's what's so crazy, right?

803
01:08:39,422 --> 01:08:44,202
And we see that every day. Oh, this went into special servicing. This went into foreclosure.

804
01:08:44,202 --> 01:08:50,242
And you're getting no bid auctions, like nobody's buying. So they've done a lot of great

805
01:08:50,242 --> 01:08:54,222
extending and pretending. I don't know if you saw the show with Bill Moreland and Jack Farley,

806
01:08:54,342 --> 01:09:00,142
but if you have not, highly recommend it. He goes through the bank balance sheets. It's bank reg

807
01:09:00,142 --> 01:09:09,422
data is his newsletter. And oh my, did he teach young Jack some facts, but it's just on these

808
01:09:09,422 --> 01:09:14,362
modifications because they changed the way you have to report the modifications now. So all the books

809
01:09:14,362 --> 01:09:19,242
look better than they actually are. So it's all these little tricks to make it look a little bit

810
01:09:19,242 --> 01:09:23,822
rosier for a little bit longer should i get him i should probably get him on the show oh yes

811
01:09:23,822 --> 01:09:30,042
he is a gem i mean he's a he's a credit nerd like me like i mean and he he went through it

812
01:09:30,042 --> 01:09:35,362
and that was my job was watching credit you know and i watched people don't understand 2006

813
01:09:35,362 --> 01:09:42,882
a lot of our prime borrowers looked just fine by 2009 they did not because these factors of

814
01:09:42,882 --> 01:09:48,642
now you're not getting home price appreciation now you can't access for a refi the credit

815
01:09:48,642 --> 01:09:53,022
market anymore. It just changes everything, but it takes some time to really show up.

816
01:09:53,502 --> 01:10:02,122
Yeah. All right. Stay frosty out there, everybody. Stay aware. Make sure you follow Melody because

817
01:10:02,122 --> 01:10:15,047
I think again I joking right now but I think there a facade on the economy right now with government data

818
01:10:15,287 --> 01:10:18,727
I mean, obviously, the last jobs report, it looks like they're trying to clean it up at the BLS,

819
01:10:18,727 --> 01:10:24,247
but what the financial pundits on CNBC and others are telling you,

820
01:10:24,307 --> 01:10:30,687
particularly as it pertains to the strength of the middle class and the economy overall,

821
01:10:30,827 --> 01:10:33,327
I think if you just look at data, particularly in housing,

822
01:10:33,327 --> 01:10:35,167
It's becoming very obvious.

823
01:10:35,307 --> 01:10:47,847
Like, again, going back to the first chart, the only chart I showed in the beginning of the episode, like qualitatively, if people are searching help with mortgage, people are struggling out there.

824
01:10:48,187 --> 01:10:48,627
And absolutely.

825
01:10:49,247 --> 01:10:50,487
I think we're getting a triple whammy.

826
01:10:50,667 --> 01:10:55,507
And obviously, this AI build out is pushing up electricity prices.

827
01:10:55,507 --> 01:11:13,807
In a lot of places, I don't think that's another thing that is being swept under the rug by mainstream pundits and the administration is the average cost per kilowatt hour price per kilowatt hour of electricity in major U.S. cities is approaching 20 cents, which is insane.

828
01:11:14,207 --> 01:11:17,207
And energy is the raw input of everything we do in the economy.

829
01:11:17,527 --> 01:11:21,407
Absolutely. It's happened to us here in Tennessee. I mean, just shot up overnight.

830
01:11:21,407 --> 01:11:24,647
I mean, and again, yeah, we didn't even really talk about that.

831
01:11:24,987 --> 01:11:27,347
The taxes, insurance and your electricity bills.

832
01:11:27,507 --> 01:11:30,707
I mean, and this is another headache for landlords, obviously.

833
01:11:31,547 --> 01:11:33,527
So, yeah, it's nuts.

834
01:11:35,047 --> 01:11:37,587
Well, we should do this again at some point.

835
01:11:37,687 --> 01:11:38,087
Absolutely.

836
01:11:38,367 --> 01:11:39,527
Thank you so much.

837
01:11:39,787 --> 01:11:43,387
In a few months when or maybe in the beginning of next year, see where things are.

838
01:11:44,047 --> 01:11:44,207
Yeah.

839
01:11:45,307 --> 01:11:49,967
Where can anybody who's so inclined find out more about your work and what you're doing?

840
01:11:49,967 --> 01:11:51,967
If I haven't depressed them to death, right?

841
01:11:53,007 --> 01:11:59,007
M3 underscore Melody on X Twitter, M3 Melody Substack and M3 Melody YouTube.

842
01:11:59,747 --> 01:12:00,047
Awesome.

843
01:12:00,287 --> 01:12:03,927
Well, Melody, thank you for joining us today and thank you for the incredible work.

844
01:12:04,067 --> 01:12:07,447
And like I said, hopefully we do this again at some point next year.

845
01:12:07,807 --> 01:12:08,107
Hopefully.

846
01:12:08,247 --> 01:12:08,627
Absolutely.

847
01:12:08,887 --> 01:12:09,847
And thank you for having me.

848
01:12:09,867 --> 01:12:10,567
It's been my pleasure.

849
01:12:11,067 --> 01:12:11,387
All right.

850
01:12:11,767 --> 01:12:12,447
Peace and love, freaks.

851
01:12:12,707 --> 01:12:15,447
Thank you for listening to this episode of TFTC.

852
01:12:15,927 --> 01:12:19,507
If you've made it this far, I imagine you got some value out of the episode.

853
01:12:19,967 --> 01:12:23,867
If so, please share it far and wide with your friends and family.

854
01:12:23,967 --> 01:12:25,327
We're looking to get the word out there.

855
01:12:26,147 --> 01:12:30,147
Also, wherever you're listening, whether that's YouTube, Apple, Spotify,

856
01:12:30,907 --> 01:12:33,427
make sure you like and subscribe to the show.

857
01:12:33,827 --> 01:12:38,167
And if you can leave a rating on the podcasting platforms, that goes a long way.

858
01:12:38,687 --> 01:12:43,147
Last but not least, if you want to get these episodes a day early and ad-free,

859
01:12:43,447 --> 01:12:46,247
make sure you download the Fountain podcasting app.

860
01:12:46,727 --> 01:12:48,987
You can go to fountain.fm to find that.

861
01:12:48,987 --> 01:12:50,667
$5 a month

862
01:12:50,667 --> 01:12:51,767
gets you every episode

863
01:12:51,767 --> 01:12:52,647
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864
01:12:52,647 --> 01:12:53,507
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865
01:12:53,507 --> 01:12:55,067
helps the show

866
01:12:55,067 --> 01:12:56,587
gives you incredible value

867
01:12:56,587 --> 01:12:58,587
so please consider

868
01:12:58,587 --> 01:13:00,187
subscribing via fountain

869
01:13:00,187 --> 01:13:00,827
as well

870
01:13:00,827 --> 01:13:02,287
thank you for your time

871
01:13:02,287 --> 01:13:03,707
and until next time

872
01:13:03,707 --> 01:13:04,587
tiki