Bubble Territory? Why Investors Are Getting Nervous

We break down earnings, the AI boom, inflation trends, and how oil prices could impact inflation and markets ahead of the latest CPI data.

Plus, we dive into interest rates, what the Fed might do next, and the growing debate around taxes in NYC, including Zohran Mamdani and the possible shift away from New York.

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Transcript

SPEAKER_01 0:00

From Wall Street to managing hundreds of millions in client money, Nick and I used our alphabetic tube of credentials to discuss the investing and tax strategies that actually work. Oh, and we played Division I college football together. So strapped in. This one hits hard. Let's go.

SPEAKER_00 0:22

Alrighty, folks. I believe we are in the largest stock market bubble ever. This is according to, of course, the Warren Buffett indicator. We're going to talk about something Paul Tudor Jones said recently and Michael Burry. We will, of course, then jump into Mayor Mamdani and we will close out talking about inflation print tomorrow on Tuesday. It will be market moving. And I actually think there's a sneaky thing coming. But of course, we're going to have this conversation with Taylor from Life Goal Investments. How are you doing, buddy? I'm pumped. This is a stacked lineup today. Let's get into it. I'm not going to waste any time.

SPEAKER_01 0:56

Appreciate you having me. Let's do it.

unknown 0:58

Yeah.

SPEAKER_00 0:58

So the first thing I want to talk about, and really I want you to, I want you, frankly, to walk me back from the edge. Right. You know my story. I grew seven grand into 200 grand only to be wiped out by 80% of the stock market crash. I will freely admit I have PTSD uh from that, and I may be reliving it right now, and it may not be warranted. I may just be an old fuddy duddy who doesn't know stocks. And uh, but but I gotta tell you, when we got Paul Tudor Jones on Squawk Box saying current environment feels very similar to 1999, we got Michael Burry saying stocks no longer react to logical economic data, and of course, saying the stock market feels like the last few months of 09 and 2000. And of course, we got the buffet indicator, which I think today is at 245%. I think it peaked at 187 in the dot-com crash. So please tell me why I have PTSD and I shouldn't be concerned about this wild bubble in the stock market.

SPEAKER_01 1:57

That's that's that's the only stat you can come up with that we have to juggle with. I mean, you just tumbled me because I was like the ropes, man. Um, you know what? There is some some irrationality and there's some rationality, I think, playing out in the market right now. I'll start on kind of the irrationality side of just kind of headlines what's going on. So it does seem like the Iran war is certainly a topic that is rightfully so getting every headline right now. And it seems like the market is reacting to the positive side, but just not reacting to the negative side, right? So, what's going on with the blockade? And we were gonna allow ships to go through on both sides, the US and Iran, and now neither side are gonna let them go through, and the market doesn't care, right? And it does seem like what's interesting is that bad news seems to come out in the beginning of the week, and good news seems to come out towards the end of the week. And so the market, I think it's just kind of calling that on my channel every week.

SPEAKER_00 2:49

Yeah, yeah.

SPEAKER_01 2:50

I think it's just looking through the bad news and saying, listen, it's gonna come back around. We're gonna get some good news at the end of this week.

SPEAKER_00 2:56

So by by Wednesday afternoon, it'll be fine.

SPEAKER_01 2:59

Yeah, exactly. But it has been it has been an absolute euphoric run. So I think the date was March 20, uh, yeah, March 28th, where the market just decided that this war doesn't matter. Um, which kind of simultaneously led right into earnings season. So it was kind of twofold at once where the market said, okay, this thing doesn't matter. And from that March 28th date, we've now run up about 20% from that bottoming point. So it's been about 40 days, and you've seen just a gigantic, ginormous move off the bottom there. And so it there's there's no bad news that can seem to to to wrangle this market at all from a war standpoint, but really I think that's because the earnings that have come through have been so darn strong, to be honest. Um, when you look at the earnings numbers year over year, as of right now, we're about 80% through earnings season, you've got 28, 28 year over year earnings growth, which is the highest number we've had since 2021. And just for the record, 2021, you know, granted it's only five years ago, but the only reason why it happened in 2021 was because we were looking against the backdrop of 2020 during COVID. You have to go back long before that before you get another 28 handle. And so the companies are just really, really, really producing. And I think that that's why you look at some of these comments, like Paul Tudor Jones, and if you dig into his comment a little bit further, he said, Yeah, it's feeling like late 90s, but I also think these hyperscalers have another year or so to run. And so it's all dependent upon that capex. That capex on build out of AI is what's driving our entire economy, very literally.

SPEAKER_00 4:46

So let me just poke at that a little bit. Again, uh, I understand it. I mean, they're talking billion. The other thing about the hyperscalers I'm reading, and again, you're the stock guy, I'm not. But given these capital investments, they're essentially going to be cash flow neutral, right? For the longest time, these hyperscalers printed money, I mean, like real cash. Yep, they're taking on so much debt now, it's going to be a zero. There's no cash there anymore. Isn't that a burgeoning problem? Or am I just it's just overblown?

SPEAKER_01 5:15

No, no, it no, it can be a problem, right? If they don't have a clear line of sight. So, like you look at the biggies, right? And meta is is certainly separating in a negative way. And that is because one, they're spending more than anybody else. But more importantly than that, when they ask Zuckerberg, like, what are you spending this on? He is the only one that doesn't have a very clear definitive path as to what they're using that money for. And that's why Meta is just getting lambasted in the market relative to the other hyperscalers who now have gone back to nuclear in the positive direction. Zuckerberg doesn't really, he cannot articulate what he is doing with the build out of the large language models, et cetera. Um, and he really doesn't have a great dog in the fight at this point. The market can't perceive what it is that they're looking to do, and they've crushed him because of it.

SPEAKER_00 6:04

So the other thing I want to talk about with you is again, aren't we more than 20 tech companies? I don't know if the number's 20, but it's it's some finite number. Because I hear Whirlpool right talk about recession level consumption. We have the Heinz CEO catch up talking about consumers running out of money. And I don't get it. I I thought we were a 60% consumer economy. Are these guys just spending so much money that it just masks all that, or what's going on?

SPEAKER_01 6:34

Yes, that's the answer. It's just that simple. They are, yeah. Okay, so that's the answer. The other part of the answer is that it's a very K-shaped economy. Like, let's be clear the bottom half, bottom 80%, 60%, 70%, whatever that number is, whatever number, yeah, is really struggling. And this is this feels so disingenuous. This I grew up in a one red light town, like you know, about as blue-collar as it possibly could come. It doesn't matter what that part of the economy is doing from a stock market perspective. It really doesn't. It's so bad to say the stock market doesn't care because all the spending comes from the top half of the K. And so now you've got the economy not really sputtering as much as it could with the inflationary pressures that we've seen. So the bottom portion is certainly being impacted with having to spend too much on gasoline and things like that. But the top portion, as the stock market continues to go up every day that's open, we're up eight straight weeks now. Is the market up? Yeah, yes, if it's open, that's effectively what's going on right now. Is the market open? Oh, let's see. Yeah, it's up. Yeah, yeah, yeah, it's open. Yeah, so it's up. Um, yeah. And so everyone that has exposure to stocks in America is getting richer and richer by the day, it seems.

SPEAKER_00 7:42

And by no means do we have this is just the wealth, and then you have the wealth effect, right? That just spins off and they buy cruises on biking and right, they take trips and travel, and it's just it just own assets or you're left behind, I think.

SPEAKER_01 7:56

That's exactly right. Yeah, and it you don't the market hasn't made you be too awfully discerning, right? In what what assets that you own from a from a public stock perspective. Most things have worked, right? Some things have worked better if they're the hyperscaler, then software has been beaten up, but software had an incredible run for 15 years. So just being there and being present, staying around in the market, time in the market has really, really rewarded folks.

SPEAKER_00 8:23

Yeah, at the end of the day, I think I'm very much with Paul Tudor-Jones in that yes, this is uh stock market could be irrational for a long time. It could be, I think the old quote was the stock market can be irrational longer than you could be liquid, something like that.

SPEAKER_01 8:36

The stock market can be irrational longer than you can remain solvent. That's that's a warning against short. Yeah. Um so like there there does you when when everything is euphoric and everyone is optimist, uh optimistic, there certainly things can get ahead of themselves. So, like one of the headwinds that we're gonna face going forward right now is that the expectation for earnings for the entire tech sector for this year, earnings growth of 38%. 38% is what the average analyst is expecting tech earnings to grow at. Has it ever done that? I I don't know the answer to that. I'm I'm assuming probably back in like the the the 90s.

SPEAKER_00 9:20

Um at one point probably 2000s, yeah.

SPEAKER_01 9:23

Yeah, or any period where you come off.

SPEAKER_00 9:25

Not the last decade.

SPEAKER_01 9:26

No, no, and so yeah, at the end of the day, it's like it's it this is all an expectation game. I I did a uh a reel on Instagram. It's like, hey, you're expecting Jennifer Aniston to walk through the door, and when Sidney Sweeney comes in who's 1B, maybe you're disappointed. It's like tech can still have great earnings, but 38 is the hurdle.

SPEAKER_00 9:47

Right. I gotcha. I gotcha. So again, the other thing I've learned about the stock market, again, I'm the casual observer, this is where you live, is you never really know what the prick is gonna be for a bubble. And we have a number coming out tomorrow that could be a pinprick, and that is inflation. I saw your reel on this morning on in on IG really hammering people on core. Uh, I'm gonna actually take the headline number and throw something out here that uh, you know, the market is expecting three eight. I'm four. Yeah, a four handle on headline, you know. I I think it's gonna go up uh seven tenths, not five tenths. So uh, and that's gonna be a problem. And I do think core goes up a couple, not just one tenth.

SPEAKER_01 10:27

Yeah, and so maybe I was getting a little cute on my IG reel this morning, but I think that everyone knows headline is gonna suck, right? So whether it's whether it's a half a percent, three quarters of a percent, like it's gonna be brutal. And we all know it because we all have to fill up a gas tank at some point or heat our home or whatever it is. Some there is some exposure to direct gasoline, diesel, or oil at some point in all of our lives. But what I'm really concerned about is okay, we know that's gonna be bad. It's how much is that bleeding through into everything?

SPEAKER_00 11:01

So, how much that's why core is important, you're right.

SPEAKER_01 11:05

Yeah, so once we core is right, everyone knows this probably, but you're backing out energy out of that. So you're backing out the oil impact, you're basically backing out the real impact of this Iran war with the direct thing that it's affecting. How much is everything else being impacted negatively? Because everything is a byproduct of oil, plastics, rubbers, they're all functioning on oil. Uh, you know, the delivery of everything that last mile all comes from a truck or a van or an Amazon vehicle, etc. They're all using oil. So that's really the one that is that is concerning to me.

SPEAKER_00 11:40

Well, that and and you know, I think the other thing that's interesting, because again, earlier talking about Iran, do we have a blockade? Do we not have a blockade? Is it open? Is it closed? All of that is yeah, oil is is the most acute pain point, but very quickly, fertilizer is going to be a problem, helium is gonna be a problem, all these other inputs are gonna be a problem. And if we haven't learned anything from 9.1% inflation, yes, you know, growing M2 money supply was a problem, but the real problem is we fucked with our supply chain, right? And now we're potentially impacting our supply chain on lots of fronts. And I don't think the market is looking at it back to our earlier point, you know, it you know, stock markets open, it goes up. We we could have some sneaky supply problems, you know, coming. Is that reasonable?

SPEAKER_01 12:24

Oh, it's it's completely reasonable. It's and it's funny how many people, uh myself included, have hurts on like what goes into product or the production of a chip product and helium is involved in that. And apparently we're sourcing helium from from you know the Middle East. Like, I would have had never never known that, but it's good that people are doing good research and bubbling this stuff up because now we're all more aware of this. It is uh every time you have a big macro kind of um geopolitical event and tension, it's funny how the market can so easily overlook it. Like we're we're literally at war right now, and the market is hitting new highs every single day. And what it goes to show, I guess, at the end of the day, is like corporate America and the US consumer is really largely not impacted by all of this. And and and that's not to say that that that that is the uniqueness of our country, I think, because all the other countries around the world are getting massively more impacted by what we're doing in the Middle East than we are because they are so energy price sensitive, and we are not as much so.

SPEAKER_00 13:34

Yeah, I don't think we had this conversation because we missed last week. So, as you know, I was on a cruise in in Australia, and I kid you not, one of the sea days, um, there's a big there's a big screen outside by the pool, right? And they're showing an oil tanker pulling into some port in Japan that came from Louisiana, right? Because again, it you know, if you're in Japan, usually it comes through the strait. And this was such a big deal to Japan that they were blasting it on some news channel because I guess Japan was that short of oil. I mean, that's just you know how you know how telling it has to be that you're actually have a helicopter, you know, tracking an oil tanker to port.

SPEAKER_01 14:14

That's yeah, that's wild to me. And the prime minister of of India just came out today and and started encouraging people, you need to start cutting back, you need to voluntarily cut back. I saw that money of our country.

SPEAKER_00 14:26

Yeah, yeah, Lorenzo Modi, yeah. And their stock, yeah, Modi, and the stock market bled. I mean, that if they're saying cut consumption, do all these things, that's this to your point. We are insulated from what we're doing in the strait mainly, right? We're not we're gonna feel it last. And you know, Asia and Europe are in a bad spot.

SPEAKER_01 14:47

It's it's it's funny. Uh a client of mine reached out um recently and they were like, hey, if we're oil independent, we're actually exporting more than we're importing. Why is it that we're seeing gas prices jump as much? So they were basically asking the other end of the spectrum, like, hey, I'm hearing this news that like we got all the oil in the world and this shouldn't impact us. It's like, well, but at the same time, if you know the far east in Japan now is buying from Louisiana, whereas they might have been buying out of out of uh this is a global market, so it's it's a global market, they'll just sell it to somebody else, yeah. Correct, correct. And that's like a lot of people have become you know experts for the first time on Brent oil versus West Texas, myself included. Yeah, right. Um, so it's it's funny when you you start to think about how the the spotlight is shown on on certain things given certain pressures out there in the markets. Um but uh yeah, yeah, no, it's it's interesting to watch.

SPEAKER_00 15:39

Well, the other thing I wanted to ask you about AI, and we'll go to Mundani next. Um, is I'm hearing some people talk about this being very similar to the railroads, very similar to electricity, very similar to the DSL lines of the dot-com era. And what I mean by that is all of these AI investment dollars are coming fast and heavy. There's no real dollars or return on investment from them. And this is gonna lead to a debt explosion, especially since uh, unlike you know, railways and highways and all of that, these assets they don't last very long, right? Four, six years, depending on who you talk to. You gotta redeploy these things. Do we have a growing debt problem with all this financing?

SPEAKER_01 16:21

I think it's interesting right now because I think that we do not have a debt problem now. What we have is a little bit of a gamble being played. So these companies, these hyperscalers, are at a race. And I think the the the prevailing wisdom is that there are going to be a few winners in this. And if you're not a winner, you're gonna get obliterated. And so all these people are saying, hey, we'll spend on whatever it takes to be a leader in this space. And some of them, like Meta, like we talked about before, really don't even have a clear line as to what they're doing here, but they've got to participate because if they don't win this agentic AI and capabilities before everyone else, they think they're gonna be absolutely smashed, but they do not. So it's a bet that profits are going to come and it's gonna be narrow at the top. It's already narrow at the top. I think it's gonna get narrower at the top. And so as these people continue to fight for this predominance in this agentic AI that doesn't exist yet, the bet is long term, there's gonna be a few winners. And if you don't spend right now, you're not gonna be a winner and you're gonna get crushed on this. But that is a bet. An educated bet, maybe.

SPEAKER_00 17:27

Yeah, it it's interesting. Um, do you know a gentleman? Have you heard of a gentleman named Scott Galloway? He's written a couple books. He's you know, he's uh he's a rich, he's a billionaire, I think. He's he talks a lot about young men and all of that. That's where he I think he got his um his heyday. Anyways, uh, I saw a reel of him yesterday uh articulating how China can destroy the US economy. I'm like, oh, interesting. What's he think? So you probably know this, but for the audience, back in the day, uh China was dumping steel, which was really hurting the American steel manufacturers, right? And then we eventually had to create anti-dumping, but not until a lot of the pain had already been felt by the American steel industry. Does you remember this?

SPEAKER_01 18:12

Yeah, yeah, absolutely.

SPEAKER_00 18:13

Okay. So what Scott is saying is if China wanted to destroy the U.S. economy, all they had to do was basically release cheap LLMs, cheap cheap AI models, basically dump AI models into the US economy at such a price point that is ridiculous, thus making all of these other debts not, you know, you can't get a return if you're competing against zero or a penny or whatever, which I thought was interesting. Um, because again, I could see how that would be a problem, right? You have China's central government sort of managing a lost leader. You go out there and you destroy all of these LLMs, you got to compete on price, and then all this debt that you've racked up you can't pay for. That could be a problem.

SPEAKER_01 18:58

Yeah, that I mean that's that's deep seek, effectively what they're talking about there, right? Yeah, um, and and and it is interesting. What China China does really well is they prepare for long-term things that are around corners that we can't see, right? So, like their strategic petroleum reserve was four times as large as ours going into this. Yeah, so we are actually, I think, gonna fare better, even given that fact, because we have energy and they really don't for the most part, but nonetheless, they were prepared for this, right? And they think about things in decades, they don't think about things in four-year cycles, which is what we do, or even two-year cycles because of the midterms that we hear here in the States. So you are a hundred percent right. And they, I mean, I'm speaking out of out of turn here. I've never been to China, but so like let me be clear on this. It that they don't care as much about their citizens, right? So they are willing to cast pain down.

SPEAKER_00 19:49

Central planning is central planning, yeah.

SPEAKER_01 19:51

Right, right. So they're willing to cast pain down to become that world dominant leader. What would will it work in the fact that hey, they release these large language models, all of a sudden they are better or cheaper or a combination thereof versus all the big tech giants here in the United States. It's like, well, what cost did they have on their end that allowed them to do so that also needs to be explored? And and who knows what that is?

SPEAKER_00 20:14

I don't think they're gonna care. I mean, that's doing this. I just thought, yeah, I don't think that they're gonna care. I I just thought it was an interesting riddle that I had not thought of, right? Again, if if if if you are China and you're if you wanted to hurt America, it's take our largest current investment in debt cycle and this make it worthless or near zero. And that would be that would be problematic for sure. So again, we'll see where this goes. Well, let's turn to Mayor Mamdani. You were obviously in New York City, he is squarely coming after success, wealth, business owners. He stood outside Ken Griffin's apartment, which or penthouse, which I still can't believe he did in this environment. I mean, the UHG CEO was killed five blocks away. Total stupid thing to do. Put put Ken in that in that crosshairs like that. Um, but yeah, I'm I'm curious. Uh, you you obviously are on Wall Street, you got a lot of buddies on Wall Street, you got lots of buddies of buddies on Wall Street. How many folks do you think actually look at this and go, we out, we going to Florida, we're going to Nashville, we're going to Texas, or is that just talk?

SPEAKER_01 21:17

For some, it's talk, but I think that there is this naivety that people need New York City. It's like, well, you know, they're like, hey, you need that tie to Wall Street, you need that close nature, you need all those things so you get that insight and that insider information. It's like, well, the the best guy to ever do it was based in Omaha. So like he's in Omaha, right? He's a couple of states away. Yeah. So like, let's, let's, let's temper this, right? Information gets everywhere, unless you're a high frequency trader, which that's not what Ken's doing. Um, that's the only place where you absolutely have a necessity where you must be pinned to the the metro area of New York City. Um, what's what's an annoying or disappointing is just that listen, I I get that this K shaped economy it causes real pain and real. Strife. And I that that does not fall on deaf ears with me. But I think just to go out and fault the billionaires that are that are driving the jobs, that are driving a lot of the tax dollars. Ken said, listen, we're we're going to do this midtown Manhattan project that's going to generate 6,000 construction jobs and 15,000 permanent jobs. Now that's all up for debate because this guy went out and and went at him directly as a person, not at a nature or class of people. He stood literally outside his apartment, called him by name. Yeah. Yeah. And he said, Ken said, listen, I have no interaction with him. No, no former kind of back and forth that caused this, you know, to for me to be this political puppet, but that's where I wound up. So I mean, it's it's tough to look at and say, okay, if we think that we can just do whatever we want, call people whatever we want, say whatever we want with no retribution. And then by the way, you're gonna charge them more money after calling them idiots to their face, and they're just gonna be fine with it and not move their capital. Like the best thing about capitalism is money goes where it's best served, you know, where it's best treated. And that's that's just not right now in New York City.

SPEAKER_00 23:14

Oh, it's not. I mean, clearly not in New York City. One has to wonder if he's doing this on purpose and he's just a secret genius trying to destroy New York City, but that's a different discussion. So these are things that I've heard, and I want you to say, you know, fake news. So the first one I think is pretty true because I've actually saw Ken say this. Basically, the only good move we've made in the or the only move that feels right is you know, our move to Florida. And he's doubled down, he's building more office space in Florida. So again, you could translate that to more Citadel employees being in Florida in the next couple of years. Fair?

SPEAKER_01 23:49

Undoubtedly, 100%. Direct words from his mind.

SPEAKER_00 23:52

100%.

SPEAKER_01 23:53

All right.

SPEAKER_00 23:53

Yeah, direct words. The next ones I've heard, but I can never tell if it's fake news or not. Uh again, I think this one's true because I think I heard um JP Morgan, CEO, say this. I think he said something to the effect of when I started here, we had 40,000 people in New York, and now we have 32,000, so down 20%. Texas kind of the reverse of that. Um, is there any talk of Jamie Diamond, you know, doing that even more? Uh, or you know, just you know, current, current is as current goes.

SPEAKER_01 24:23

I I think as we get more of like, you know, listen, we've gotten more global from a landscape for the past 30 years, right? Now we're trying to get more towards the US. I get that. But nonetheless, information is disseminated so quickly. So to think that someone's ball and chain to a city because it has a New York stock exchange on it or it has Wall Street on it, like I don't understand where where any of that is. And I think that at some point too, young people that are going to be the high income earners that are going to be um, you know, employed by these people, they start to get less excited about making that pilgrimage to New York City for that 25 to 30 year old time frame of their life. And so the talent is is there now, but does it continue to be there now if they realize, hey, I go to a different state, I can save 15% of my income that I'm gonna get paid. You don't have to pay me as much.

SPEAKER_00 25:12

Yeah, right, no doubt. Uh, I believe Apollo was the next one that said, Hey, we're gonna find another, we're gonna have open a second headquarters, so Apollo's gonna be quickly moving employees out. That seems to be true as well.

SPEAKER_01 25:24

Yeah, yeah. I mean, listen, Ken Ken did this in Chicago, right? With Citadel.

SPEAKER_00 25:28

Yeah, oh no, there's yeah, yeah, he did.

SPEAKER_01 25:29

So this is this this this is nothing new. And he, you know, Florida doesn't suck. Yeah, no doubt. It doesn't, right? The weather's the weather's incredible. Like in New York, man, it's it it's a the the thing that people will miss about New York is is I think the culture. The culture is is pretty incredible. It's a cultural melting point, it is um an energetic environment, etc. But when that energetic environment and that stress of day-to-day life, like it's a tough place to live, let's call a spade a spade. I live in a town now outside of New York City that's a few hours north, and we get a lot of ex-New York City folks coming up here, and I lived in the metro area for a number of years too. And when they finally move up here, they're like, wow, this is so comfortable. And they're like, it was a rat race, and they think that they love it until they step outside and they're like, What were we doing for that 10, 20 year period that I live there?

SPEAKER_00 26:22

Yeah, yeah. So the other thing I think is interesting is I heard a number, something like the top 1% of New Yorkers pay, I don't know, 35, 38, 40 percent of total state taxes. What if that's true, it's and it's gonna be close, I think. Do you think half of those people, a third of those people, don't call New York City their home in a year? Because again, capital goes where it's treated best. I could not imagine being a top one percenter in New York and being public enemy number one. I'd be like, you know, the the last thing I'll say is is what's the point of having FU money if you never say F you?

SPEAKER_01 26:59

I mean, really totally, totally. I think it's a slow bleed. I don't think anything happens quickly when it comes to like major life decisions for folks. At the end of the day, like, do I if I could uproot myself, my family, my friends, etc., and all collectively move to Tennessee, I would do it in absolute heartbeat. But that's just not reality, right? And I'm not gonna move without my family coming along with me, and they're not all gonna be able to simultaneously move at once, etc. So I think it's a it's a slow bleed, but nonetheless, it's it it it it is a bleed. It it is something that there is no, if you just look at surface value, face value of New York State, what is it that makes it so great that that we're able to charge 10% more for people to live here? There's nothing you can say, yeah. This this is the reason why. There's nothing, there's nothing. It's it's that there's history here, and people live here, and that can't change quickly. That does change over time.

SPEAKER_00 27:55

Yeah. Didn't Kathy Holkel say one time a couple of years ago to the rich that are leaving, basically buy, and didn't she recently say, Hey, could you come back and bring a friend? Something like that.

SPEAKER_01 28:07

Well, Kathy Hokel is all of a sudden starting to look like this like right mega Trump hat wearer, uh, relative to mom Donnie on the other side. And mom Donnie, um, you know, I I don't want to say to his credit, because I I that again, I'm not right, I'm not left, I'm just not a socialist. And and so, like, maybe that makes me not like the furthest left ever, right? So maybe that's a fair uh assessment.

SPEAKER_00 28:32

Yeah, but you're not a socialist, that's fair.

SPEAKER_01 28:33

Yeah, yeah, yeah. So he came out and said, like, listen, um, we want everybody to be here in New York, even Ken Griffin, like afterwards. But it's like you can't go up any the way you went about it, you can't no see.

SPEAKER_00 28:45

I I want to push back on that because I read yeah, when he tapped the thing. I was like, I'm like, oh my god, you're doing things that you shouldn't be doing right now. Yeah, you shouldn't be doing that. But you know, so again, I I saw that kind of you know, I basically uh a quasi-apology to Ken Griffin video, but it wasn't. He basically said, I need people like Ken Griffin here, I need successful people here, I need them to pay more so everybody else could live here. He's still basically saying, I'm gonna reach into your back pocket and take your money. I don't, I don't get it.

SPEAKER_01 29:21

Where is the logic to that? There is no there is no law, there's no logic to that, and I'm gonna be an asshole to you in the meantime. Like, yes, I'm gonna call you. It's yeah, it's um and and and listen, at the end of the day, I get the lower shape of the K. Like one of the big arguments is like, hey, billionaires don't pay their fair share of taxes. One, when you look at the absolute dollar amounts, like obviously they're paying more than their share. But when you look at things and you hear Buffett say things like, hey, my secretary paid more in taxes than than I do, like, and people get mad at the billionaire. Don't get mad at the billionaire, get mad at the government, right? The government is the one that structures those underlying tax codes. Don't, don't, don't, don't be holier than thou and say if you were a billionaire, you would just go out and rightfully, willingly pay a full chunk of taxes. You're gonna look for every way you can save money as well. That's so the the the villain of the billionaire is is really a tough one for me to understand.

SPEAKER_00 30:21

Well, the other thing I I think that's come to light here in the last couple of years is just the amount of fraud, waste, and abuse in the system. And um, you know, until you have an honest review, and and I've seen estimates as low as 15% and as high as 40% for the amount of waste, fraud, and abuse in our current spending state and federal level. Until you have an honest assessment of that and start getting rid of these NGOs and all this other graft, why should we pay another penny? You're not using the money we give you now well. And until you prove that you could spend our money well, why would we give you another dime?

SPEAKER_01 30:55

Well, so I've long been working on just how to package this correctly and put out a video on comparing New York, where I live, to Florida. Um, because Florida, you pay 0% state income tax, and in New York, you pay 10 and upwards of 10 if you are, you know, a wealthy individual. And so what are the redeeming things that we are getting back for that additional 10%? And you look at the school systems and basically across the board, you have very comparable, if not Florida getting an edge in the public school system on their rankings. Yep. You look at things like poverty rates, poverty rates are higher in New York than they are in Florida. So the whole, hey, we have a social safety net and they don't higher, yeah. There's holes in the nets, apparently, because they have a lower poverty rate than we do. And so you go down there and it's not like hey, their their roads are decrepit, their their their state funding is is much better. They have a higher credit rating than New York does, even though they're not collecting that additional 10%.

SPEAKER_00 31:53

Public safety. Public safety is better.

SPEAKER_01 31:55

Yeah. There's nothing. There's nothing you go, okay. That is why I pay 10%. And that's frustrating for someone who lives here to state the obvious. You can tell them a little perturbed, yeah.

SPEAKER_00 32:06

Yeah, at the end of the day, it's just really interesting. So uh let's let's go back and we'll close on inflation because that's the big number of the week. It's really gonna be the big number for the next couple weeks. The jobs numbers came out last week, and I don't know about you, but they were fine, if not better than fine. Um so you know, no rate cuts in 26 seems to be more and more likely. Um, you know, how bad do you think inflation's got to get for the Fed to raise rates? Do you think a rate increase is even in the realm of possibilities in 26? It's started to become, yeah.

SPEAKER_01 32:37

It started to become. I I I don't think that it's reality, but the longer this thing persists and not zero. Yeah, yeah, it's becoming it's becoming not zero, right? And and Warsh coming in, he doesn't have the votes to cut. Like that that's obviously what Trump does not. He doesn't have the votes to cut, so that's not happening. What one of the things that I did see that was that was a little bit of good news recently is the Joltz report, so job openings, that number has basically been basically been flat. But what you're actually getting is a little bit more of the actual uh jobs being filled. So when you peel peel back a little bit there, that was that was a good number. But for all intents and purposes, the labor markets, meh, right? No hiring, no firing is basically it. You saw a little pickup in jobs being filled. Um, but we're in a steady as she goes where the big outlier right now is is inflation. And you're 100% right. We're gonna get a look through to that tomorrow. The headline number is gonna be ugly. You think it's gonna be really ugly, and the core number is the one I'm concerned with because we all know the headline number is gonna be ugly. It's how much is leaking through into everything else we buy on a day-to-day basis.

SPEAKER_00 33:42

Yeah, and then when I look forward, we have one more again. One of the reasons I think the number is gonna be so ugly is because of the the very small base effect, right? We're basically dropping off, I think, a 0.1. Yeah, uh next month is also small. Uh, then it gets a little bigger from there. But you know, the longer this strait stays closed and we're not essentially having 20% of the oil shipped through, this it eventually has to come through in a big way, even here in America. Um, so again, we've either got to get this thing open or you know, resolve this thing somehow, I think.

SPEAKER_01 34:14

It's just one of those things where, like, from a market standpoint, it's not gonna matter, it's not gonna matter, it's not gonna matter, it's gonna resolve itself, resolve itself, or it's not gonna matter, it's not gonna matter, it's not gonna matter. It doesn't resolve it's it matters all at once.

SPEAKER_00 34:28

Yeah, yeah, it's it's it's uh I forget the saying basically it's it's not a problem until it is a problem. Yeah, and uh exactly, you know. So I think I think I think that's where we are. I think this is gonna be the first month that we get we print a nasty number with a four on it. People are gonna then say that's the worst of it, blah, blah, blah. And then next month's gonna, you know, take us to four, two or four, three. And they're gonna have to look at that. So my long stance really for the last eight weeks is the Fed is gonna be put into a corner where they have to raise rates. That is gonna prove to be a problem, a mistake. Uh, and then they're gonna get on a rate cutting cycle because that will be the push into a recession. Much, I think, I think frankly, we're repeating 1998 in the Fed. And 1998 was not a fun year.

SPEAKER_01 35:12

So you're you're you're thinking they're gonna chase their tail, which to your point is not the first time that'll happen.

SPEAKER_00 35:18

No, it's not the first time. Yeah, I don't, yeah. Again, I think the Fed was, I mean, the eight to four vote, right? The last Fed meeting, the first time that happened since I forget 1998 or somewhere. And uh I think the I think the Fed talk since the Fed meeting is all basically telling Kevin Warsh we're not cutting no matter what you say. You're only one vote. I think you've heard lots of people come out, Hamcock, Kashkari, Logan, all basically saying, you know, a rate increase is on the table, not a cut. So yeah, I think I think the Fed's gonna be forced to raise probably after next month, and then that will be the the straw that breaks the back and problem happens from there.

SPEAKER_01 35:54

Yeah, and one of the things that every market pundit is saying these days is almost a direct quote of this the market tests every new Fed chair, and so something gets thrown at them that makes them react, and then the market starts to understand the way they react, like it, not like it, get used to it kind of thing for for a period of time. So we'll see what what what that might be.

SPEAKER_00 36:17

There you go. Well, Taylor, you're amazing. I appreciate you coming back each and every week to talk to us. Help me help me get away from the edge because I really was having PTSD from the stock market. It felt so much like the Doc Com era. I feel a little bit better, but uh I do appreciate Paul Tudor Jones telling us. Let me get the quote the current environment feels very similar to 1999. So, anyways, where can people find you?

SPEAKER_01 36:40

Yeah, find us on Instagram, find us on TikTok, find us on LinkedIn. We're at LifeGoal Investments.

SPEAKER_00 36:46

Awesome, buddy. Appreciate you guys. If you're not following him on uh Instagram, Life Goal Investments, you're missing out. He puts about five to ten minutes of value into a 60-second clip. I have no idea how he does it, but he is consistent. You're amazing. Take care.

SPEAKER_01 36:59

Thanks, man. Quick ask. If you're enjoying the show, hit the follow and drop a rating. It helps more folks find our podcast. Thanks so much. The information discussed in this video is for educational purposes only and should not be considered investment, tax, or financial advice. Investing involves risks, including possible loss principal. Always consult a qualified financial professional before making any investment decisions. Past performance is not indicative of future results.