The Pomp Podcast - #1409 Polina & Anthony Pompliano | Federal Reserve Will EXPLODE Bitcoin & Stocks

Episode Date: September 17, 2024

Polina Pompliano, Author of ‘Hidden Genius’ and Founder of The Profile, and Anthony Pompliano, CEO of Professional Capital Management, discuss the economy, upcoming interest rate cuts, what that means for the average American, mortgages, Amazon employees required to be back in office, and recent assassination attempt of President Trump.  ======================= Wondering where to go for financial advice? Domain Money makes financial planning simple. No hidden fees and no sales pitches - you get a personalized roadmap to your goals, from dream vacations to retirement. Flat-fee advisors create a plan tailored to you, with zero pressure to invest. Don’t be like most people who’ve never had a real conversation about their financial plan. Book a free strategy session today at ⁠⁠https://www.domainmoney.com/pomp⁠⁠While I'm not a Domain Money client and they are paying me, I've seen first hand the value of their service through the free plan they did for one of my brothers. Yes, I might have an interest in promoting Domain Money, so just like any major financial decision, it's important you understand what the service is and if it's right for you so make sure to see important disclaimer at ⁠⁠https://www.domainmoney.com/t/legal⁠⁠ ======================= Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit ⁠⁠⁠⁠https://www.xapobank.com/pomp⁠⁠⁠⁠ to join. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up, guys? Today's episode is with Polina Pompliano. She's the author of the book Hidden Genius, and she's my wife, and we have a fire conversation for you. Today, we talk about

what's going on in the economy. Will the Fed cut interest rates by 25 or 50 basis points? How the heck taxes work, and what that means for you as an everyday American. We then get into what's going on with mortgages, and why 40% of American homeowners don't pay a mortgage anymore. Why Andy Jassy, the CEO of Amazon, is requiring everyone to come back, and why it's going to be a good thing for Amazon. And then we also get into the recent assassination attempt of former President Donald Trump. This episode is packed with tons of insights and a lot of questions. We pose them to you. We'd love to hear your feedback. Here is my latest conversation with Polina Pompliano. Anthony Pompliano runs Pomp Investments. All views of him and the guests

on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by Domain Money. I love talking about money,

but I'm not a financial professional, so I don't offer one-on-one coaching or advising. But in order to get ahead, you need someone with expertise to work with you, one-on-one, and provide personalized advice. The decisions you're making now will significantly impact the rest of your life. The more time you waste not taking the steps

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Don't get left behind and head over to domainmoney.com slash POM to book your free strategy session to help you get started. That's domainmoney.com slash POM to get started with a CFP now. Go check them out And just like any other major financial decision, it's important you understand what the service is

and if it's right for you. So make sure to go see the important disclaimers at domainmoney.com slash legal. That's what the lawyers told me to say. Now go check them out, domainmoney.com slash pom. Today's episode is brought to you by Zappo Bank. Let this sink in for a moment. Over a half a trillion dollars in Bitcoin has been lost or stolen. Whether that is misplaced hardware wallets or an exchange that went bust, the risks are very real. That's why I think where and how you store your Bitcoin is absolutely critical. Now meet Zappo Bank, the world's first fully licensed and regulated Bitcoin-enabled bank. They're known as the Fort Knox of Bitcoin. With over a decade of expertise in Bitcoin custody, they blend no holdback security,

including military-grade Swiss bunkers, cutting-edge digital protocols, and strict regulatory oversight. This comprehensive approach ensures your funds are always protected no matter what. With Zappobank, you can grow your wealth with interest paid out daily in Bitcoin. You can spend anywhere with zero FX fees using their global card, or you can make instant payments with the Lightning Network. Head over to Zappobank.com forward slash Pomp to join. That's X-A-P-O-B-A-N-K.com forward slash Pomp. Go check out Zappobank today. All right, Polina, what's the first topic? All right. The Federal Reserve meeting is tomorrow, And there is great speculation and debate in the market about whether the Fed will cut interest rates by a quarter point or a half point tomorrow.

Why are we arguing over a quarter point and a half point? Tell us why that's important. The actual numbers are less important. What is more important is the statement that they're making. And really, the statement is if they cut by 25 basis points, hey, we're going to start to cut interest rates, but we're going to kind of be steady Eddie. we're going to be nice and slow here. If they do a 50 basis point cut, it means we're going to be hyper-aggressive and we are sending a message to the market that we're serious, we're here, and we're going to stimulate the economy. Now, if you go back and you look at stock performance

over the last, call it 40 years or so, since we have had the first cut in an interest rate cut cycle, the average return of the S&P over the next 12 months is about 5%. There have been times where over a 12-month period after the first rate cut, we have seen S&P go up 25%. And we've also seen one time where the stocks went down 24%. So there's a wide range, plus 25, minus 24%, but the average is 5%. The reason why that's important is because we are now entering a cycle where they are going to stimulate the economy, which means that asset prices and namely stocks are going to go up. What is to me most interesting is that we are getting a slowness in the economic data. And if you had had this conversation two or three weeks ago, the consensus was 25

basis point cut. Now, there have been enough people who have looked at the data and said, hey, wait, this is slowing a little bit faster than we thought. And also, in a weird way, because this is human-led monetary policy, there have been enough op-eds in the Wall Street Journal and other publications calling for a 50 basis point cut that people now are building consensus around it being a 50 basis point cut instead of 25. Now, of course, politicians can't help themselves. It's like a big circus and they got to be the clowns that get all the attention.

And so we have seen multiple politicians, including Elizabeth Warren, come out and write letters and say, I want a 75 basis point cut. A 75 basis point cut would be insane here. That would shock the market. Asset prices would fly. And actually that would be an ill-advised move

from the Federal Reserve. And hold on. now, is our politicians pushing for that sort of extreme cut because they think it could help certain politicians in the election? Well, that's the big critique is if you cut interest rates in September, when you have an election in November, obviously it is going to stimulate the economy. It is going to stimulate the stock market. That's literally what it is called. It's called stimulus. And so not only do we have the interest rate cuts happening, but M2 money supply is now growing as well expanding so think about just uh there's two things that the uh kind of central

bank can really control with both monetary policy and then also we have the politicians with fiscal policy you can change the cost of capital so you can raise or lower the interest rate and then you can choose to increase expand the money supply or you can decrease and drain it over the last two years or so we have been increasing the cost of capital making it more expensive and we also have been trying to decrease the amount of assets in the economy. And so you've seen the Federal Reserve, for example, sell off almost $2 trillion off their balance sheet. Now, that's the central bank. They're increasing costs and they're draining liquidity. They're tightening financial conditions. When things get tight, then people are less likely to go in to invest, to spend,

and kind of add to the inflationary pressure. But during this entire time, the politicians never got the memo. The politicians have been spending like absolute drunken sailors. They had the Inflation Reduction Act, the Inflation Reduction Act. They had the CHIPS Act. They had a number of other policies that they put forward. They have printed trillions of dollars, even though the central bank was trying to go ahead and actually drain liquidity. And so now what we have is we have an expanding monetary kind of base. We have capital that's about to become a lot cheaper. So a lot of capital is going to come in the market and it's going to be cheaper, which means people are going to take that capital and they're going to invest. They are

going to spend. They are going to go and stimulate this economy. If you're the current incumbent, even though Vice President Harris is not the president, she is seen as the incumbent and she's going to get credit for wherever this economy ends up. This is very helpful for them. And so the Republicans have been critiquing the central bank saying, hey, do not do this. Now, what I find most fascinating is that the central bank is supposed to be an independent organization. It's supposed to govern regardless of who is in office, what the election cycle or the political landscape is. But now you have both sides of the aisle over the last couple of years, and especially right now, advocating for certain monetary policy. And so I find it fascinating that

Donald Trump and his administration has come out and said, we actually think the president should just be involved because to a degree they already are involved. They're all trying to, you know, kind of influence monetary policy in different ways. Donald Trump may go and tweet directly at Jerome Powell and tell him to weaken the dollar. At the same time, we have Elizabeth Warren writing a letter in a much more formal way saying, I think that we should get a 75 basis point cut. The truth is that human led monetary policy is always going to be wrong. They're always going to be behind the curve because they're looking at backwards data to make a decision today to try to predict the future. And it's a very, very hard thing to do. Okay. So M2 money supply is

basically the nation's supply that estimates all of the cash that everyone has on hand or in short term bank deposits. It's the money supply. If you expand that, there's more money chasing the same amount of goods. If you drain that, if there's less money in the system, then naturally you have less money chasing the same amount of goods and therefore prices have to come down. Free market economics works. If there is an imbalance in supply and demand, the market moves to eventually find equilibrium. It may not happen immediately, but over a long enough time period, the market will find that equilibrium. And what we're watching occur, think about all of the change from 2020 to today.

We're talking about 2020, 2021, 22, 23, 24, five years, even though it seems like four. It's five years. And so in 2020, what you got was a public health crisis. Everyone gets locked in their home. Liquidity gets drained from the system. Nobody wants to spend. Everyone's selling their assets to raise cash. So the government and the central bank steps in and says, we're going to print trillions

of dollars and we're going to suppress interest rates. Asset prices take off. Everyone gains confidence. Everyone goes and spends. All of a sudden, that leads to an inflationary pressure. So then the Fed steps in and says, oh, hold on a second. This is a problem. Let's go drain liquidity.

Let's raise interest rates and let's start selling assets off our balance sheet so that we can pull in this inflation. Let's break the back of inflation. When that occurred, you now are getting this oscillation. You're getting volatility in inflation, in spending, in monetary policy. Now we're saying, wait a second, all of the economic data is slowing down. We're risking pushing ourselves into a recession. Let's go and stimulate the economy again.

And so that's where this conversation about cutting rates and printing money comes in. How can the average American family plan their life if they don't know what the monetary policy is going to be two years from now? If I don't know if mortgage rates are going to be at 6%, 4%, 8%, or 2%, how am I supposed to plan my life? How am I supposed to plan my life if I don't know how much liquidity I'm going to have? How am I supposed to plan my life if I don't know if stocks are going to go up or down over the next two years? This is the problem with human-led monetary policy is that we constantly are reactive

to whatever the economic situation is. There are positives to it. We can mute downturns as we've seen over the last 20 or 30 years, but it creates incredible pain on a day-to-day basis for the average family. That's why you see the wealth inequality gap going up. That's why you see home affordability so bad. And that's why you see so many people who are saying, I don't even understand economics. I just know my life is not better than it was four years ago.

And that is ultimately what we really should be trying to solve is how do you improve the lives of the average American rather than how do we go and try to be the smartest people in the room and use very minute control of monetary policy to be reactive to whatever's happening in the world. Interesting. Off camera, you told me something about Social Security tax. Do you want to share that? Donald Trump recently came out and said that he is not going to tax Social Security payments. I think that this is very interesting because now both candidates agree that they're going to give tax cuts to Americans. The public narrative is that Donald Trump is going to give tax cuts and Kamala Harris is not. She's going to raise taxes. The nuance is actually Donald

Trump is going to give tax cuts and he's going to give very large tax cuts. He wants to cut the corporate tax rate down to 15 percent. He wants to do no tax on tips. He wants to do no tax on overtime. And when asked why, he says, I want to I want to incentivize hard work. What an incredible concept. And then on top of that, he said he's not going to tax Social Security payments. Now, the hilarious kind of perspective on Social Security is the way Social Security works is you and I pay into the Social Security program. The government is supposed to take that money, invest that capital to grow, and then later they will pay us back our money. We gave them the money. They right now tax those payments. So the government takes a tax on a payment from

the government, which really is just the money that we gave them to start. It's insane. And it goes back to we do not have a revenue problem in this country we have a spending problem and so him coming in and saying we're not going to tax tips we're not going to tax overtime we're not going to tax social security at this rate his trajectory is he may suggest we're going to have no income tax before we get to the november election he's just slashing all of these things now what is he actually going to be able to pull off if he becomes the president nobody knows harris on the other hand is got her her brain is like in a blender at the moment because on one hand, she is saying, I'm going to give a $50,000 tax cut to entrepreneurs and small business

owners. I'm going to give a $6,000 tax break to first-time parents, right? She's saying all these things that are actually inflationary and are going to cut taxes. On the other hand, she's saying, but I'm going to increase capital gains tax. I'm going to increase or want to implement potentially taxes on unrealized capital gains. Those things are counterintuitive to the approach of cutting taxes in other areas. So the way I look at this is Donald Trump is saying, hey, I'm gonna have a very wide approach to tax cuts. More people are going to get tax cuts under his plan.

Vice President Harris is saying, I'm gonna give tax cuts in some very targeted areas, but then I'm actually gonna raise taxes for the majority of people because of the capital gains, et cetera. The short answer always goes back to one thing. they are trying to address the national debt and the federal budget or the deficit on a given year that's the only reason why they need tax revenue we do not have an income problem even though from

2010 so i think it was 2022 the federal government increased the amount of tax revenue every single year. They set a new record for how much income they got. In the intro year, every year, the deficit got bigger. So they took in $100, the deficit was $110. They took in $110, the next year was $120. They took in $150, the next year was $200 was the deficit. It doesn't matter how much money that we give them. They are going to only solve the problem when they stop spending. And until politicians admit that on both sides of the aisle, we are going to have a massive national debt. We're going to have an intra-year deficit that continues to widen.

We're going to have to debase the currency. 50% of the Americans who don't have investments are going to lose their purchasing power, fall further behind. The wealth inequality gap will widen. And the only people who benefit in this system are the people who hold assets, real estate, stocks, crypto, et cetera, because all of those assets are denominated in dollars. The dollar gets weaker. The asset prices go up.

The rich get richer. And those without investments end up actually suffering. And so this whole game that is being played, it's like somebody trying to win the high school, you know, like government presidency. I'll give you a lollipop if you vote for me. The lollipop sounds great. You eat it. And then you're like, what am I left with?

But they got their vote. And so none of what we are talking about here matters other than will they stop spending? And neither candidate in this race is talking about balancing the annual budget or getting the national debt down. And that tells you that the political class in our country has given up. They're waving the white flag. They are not even trying to balance the budget anymore. And until somebody has the courage to stand up and say, no matter what it takes, we're

going to tighten our belt. We are going to slash government spending. We're going to balance the budget. Now I'm going to hang my hat on it and people will talk about for decades that president balanced the budget. We're going to continue to have these problems and politicians are going to promise all kinds of nonsense that ultimately doesn't solve the root cause. Yeah, just wildly undisciplined financial allocators. Wouldn't you be if you were spending someone else's money and the negative impact of what you were doing, you wouldn't be around for?

Yeah, that's a good point. That's basically what they're doing, right? If you're a politician, here's what you do. You know, you got a money printer. You know that the citizens are going to bear the burden. And you know that likely the negative impact of your decisions today, you're not going to be around. It'll be felt years later.

And so what you're really doing is you're saying, I'm spending money that's not mine for things that aren't mine and the impact isn't mine either. And so naturally the incentives are not aligned to have people think long-term, to have people who are going to be prudent and who are ultimately going to try to do the things that will lead to a more prosperous country and a stronger financial health in the future. Compare that to the private sector where if you are the CEO or a shareholder of a business, that's your money that's getting spent. That is your stock that is going to be hurt or helped based on the decisions you make today.

And so there is this misalignment that is inherent in the public sector versus the private sector. But leadership matters, top-down kind of tone setting, I think really matters. And we need a president to come into office and say, we are going to slash spending.

All the tax talk and everything else is all noise. We are going to stop spending money on dumb things. There are reports that are now coming out that fraud in government spending, the government being defrauded, is estimated, depending on the year, between $500 billion and $1 trillion. Wow. Those numbers don't even mean anything anymore. When you say to someone, oh, the government's spending $1 trillion, it's just like another Tuesday. You don't even care anymore because we've become desensitized to how big these numbers are. where they go and they approve two, $3 trillion plans.

And during COVID, I mean, that was insane. They literally just like, we have an excuse to print as much money as we want. Yeah. And guess what? The people are going to cheer us on because the people who hold the assets, we got to get them going the other direction.

And so I think that's what we're about to see here is the Federal Reserve is going to start cutting. We're going to keep expanding the monetary supply. We're going to get a new president, whether it is Harris or Trump, is going to come in. people like to, you know, they get something new. When you buy a new business, a lot of people, they want to, they want to meddle in the operations. Usually when a new president comes in, they immediately start working on what's the legislation that's going to be the

thing that I do. Right. Well, guess what the government does. Anything that they do usually involves spending money. Almost never does a politician come in and say, I'm going to save us money. It's all about spending. It's all about stimulating. It's all about, you know, creating things. And so the same way that the government employee base continues to grow. When have you ever heard that we have less federal employees rather than more federal employees over four or five years? Never. Because it's just how can we build more things, spend more money? And so I do think that that is the thing we got to try to solve, but it's going to take the right person to go into office to be able to do it. Yeah. Speaking of getting desensitized to certain

news. Trump, somebody tried to assassinate him again. I'm not going to share the guy's name because I don't want to give him more attention. But a man allegedly attempted to assassinate former President Donald Trump at his golf course. So he was arrested Sunday near the golf course in West Palm Beach, and he was charged with two federal gun crimes. He faces one count of possession of a firearm by a convicted felon and one count of possession of a firearm with an obliterated serial number. The two charges carry a combined

maximum penalty of 20 years in prison and a $500,000 total fine. I read this and I read it twice because I was like if you try to assassinate the president that's it. That's the I would think. Well part of what is unique about this

situation is he did not shoot. Right. he definitely looks like he was preparing to shoot intent was probably there but it is very hard in a court of law to prove you're guilty of something that you didn't actually do that is his defense lawyer stands up and says did he pull the trigger did he do that right and you get into this whole like legalese thing so he broke the law i mean just a felon having control of a gun right and the many other things that you outlaid. If he had shot, he would be charged with way more

attempted murder, you know, all these different things. And so I think that that is kind of a unique detail there is that actually by the Secret Service stopping him, it probably significantly reduced the trouble that he is in. Wow. Although I think in the court of public opinion, this guy, you know, not a good guy. Now, I do think there's a couple of maybe ancillary things that people are not talking about as much as they should be the first is um in butler pennsylvania there's a lot of people critiquing the secret service how could this happen right whether it was local law enforcement secret service there's a bunch of kind of finger pointing all this was the first you're talking about the very first uh assassination attempt where donald trump was shot in the ear

regardless of whose fault it is the republican candidate for president and the former president in the United States was shot in the ear. That can't happen if you are mandated with protecting that individual. Right. There are, I know, a number of people in the Secret Service and various other organizations. There are some of the most incredible people that serve this country. They literally are willing, when gunfire erupts, to put themselves in between the person firing the gun and their protectee.

Yeah. They will put their life on the line to protect another human being. Isn't it that like you were willing to take a bullet for the president? That's part of your job description. You have to be an incredibly courageous person to want to do that job, right? So you can't take that away from anyone in that organization. Now, fast forward to the situation in Palm Beach. The Secret Service did their job.

The Secret Service was able to create a security apparatus around Donald Trump that was able to sniff out a potential assassination attempt, and not only were they able to locate it before that individual was able to fire on the former president, but they were able to offensively fire at the individual, scare them away so that the former president was not under threat, and then they were able to work with local law enforcement and go and apprehend that individual. and so although the headlines read you know attempted assassination and kind of all the things that we all are like how is it possible in 2024 that people are trying to kill the former president united states and it seems like they're getting good attempts at it but the story that's not told is the secret service did their job the secret service was able to sniff this out and they were able to actually uh kind of go through this whole situation and they were able to mitigate a threat before the person ever got a shot off, right? That is the job of the Secret Service. And the same people who are critiquing them in Butler, Pennsylvania should be the ones

who are saying great job in Palm Beach. And so I do think that that part of the story is not necessarily being told. The second part of this is. It is one thing if you are a political candidate anywhere, even if you are, you know, Taylor Swift recently had a concert canceled because of a terrorist organization was supposedly plotting to cause harm to people at the event. If you're a public figure, let's take the politicians again, and somebody shoots at you at a rally, the next time you go on stage, in the back of your head, you got to be thinking to yourself, man, it could happen again. I hope the Secret Service and law enforcement have put the right kind of processes and standard

operating procedures in place to be able to protect me. But the courage it takes to get on stage the second time is drastically understated. But that's not a political rally. You can almost think of that for a politician in a weird way, like they're going to play in the football game on Sunday. They're driving to the arena. They're sitting in a green room. They're mentally preparing.

They're going over what they're going to say. They walk out on stage. They're surrounded by all these people. They're kind of in the moment. They're in the game at that time. And so they've been able to prepare themselves for something bad could happen, but also I'm going here to do my job. It's a completely different situation when you're on your golf course and all of a sudden you now know this is not only I am under threat when I am in the arena for the rally, but now literally people may try to kill me at any point in my life. that's a whole different mental game and that's gonna do something to you like psychologically right what did i ask you what i was like uh do you think that he's like secretly scared

that he could get killed in my experience um people who lived through these scenarios when i was in iraq um uh there were organizations that had bounties on every american soldier's head and we knew what the bounties were and we knew what they would do to us if they were able to somehow grab one of us, hurt one of us, whatever. And there's this balance between you want to be aware of it. You want to understand what are these people, what are their intentions? What are their goals? What is the financial incentive that they're giving to random people on the street? All that stuff. You want to be informed, but you also at some point got to put it out of your head and say, listen, I'm not going to live my life in fear. I'm going to go on the offense.

I got to go and I got to do my job. And so I do think that somebody like a Donald Trump and also, you know, look, Vice President Harris, President Joe Biden, all of these people, although no one has tried to take the life of the other two, they're all living in some degree of threat because of who they are. And so you can't live your life constantly every time you walk outside being like, I hope there's nobody in the bushes, right? That is why they delegate that task to people who are much better skilled in terms of the Secret Service, law enforcement, etc. And they have to say to themselves, those men and women are going to do their job, and I'm going to go do my job. But I do think that there's a big difference between the threat being

at a political rally, and literally, I'm on my golf course. Yeah, that's a whole new ball game mentally, in terms of what the actual threat potentially could be. Yeah. And I unfortunately think that because there's young kids who are growing up seeing this right now, I do think that it might discourage some people from seeking political office. I think you'll get two responses. I think there's people who will say to themselves, I don't want to put myself or my family in danger. And so I may have wanted to run for a political office, but I'm not going to do it now because I saw what happened to, you know, name your incident. There's a whole nother group of people who are going to say to themselves,

this is so important that I'd be willing to give my life in pursuit of being able to affect change. And if you look at the military, the police officers, fire departments, first responders, you can just go down the line of all these Americans who every single day go to their job and say, I am willing, whether implicitly or explicitly, to put my life on the line to accomplish the thing that I've been tasked with doing. And there's a difference between being the president, being the local cop who's responding to a traffic accident,

being on the SWAT team to go in when somebody's barricaded themselves in their house in your local community, and being in a war zone. They all have different risks. They all have different mitigations to those risks, but every single one of those people is experiencing some degree of risk. And so there are more Americans

that are willing to be courageous and to put their lives on the line than people realize. Because if you just look at the number of policemen, firemen, first responders, politicians, soldiers, et cetera, it is measured in the millions. And so when you think about millions of Americans every day are willing to put their life on the line,

we need political leaders who say, well, if the men and women of our country are willing to go do their job every day in their local community or abroad, I probably should get up and I should go to work. And I've got to trust that the Secret Service is going to protect me. Yeah.

But that means that the people who aspire to have those opportunities, they're actually going to be drawn to them. They're going to say, you know what? I'm going to go serve my country, including if it means giving my life. And so in a weird way, the same calling that brings people to the military,

to be a police officer, et cetera, There will be some group of people, if it becomes dangerous to be a politician in the United States, that will be drawn to it because their brain is wired in a way that says, I'll go. Everyone else, don't worry. And that is just a, you know, there's only a certain portion of the population that signs up for that. But the majority of people, they ain't going to go. Yeah. The next topic is Amazon tells employees to return to the office five days a week. So it's been, what, four and a half years since the pandemic when a lot of companies said, stay home.

No need to come to the office. A lot of people kind of took that to an extreme and said, I don't want to go to an office. Why should I go to an office when I can stay home, do my job? Some of them have other jobs on the side. So now Andy Jassy, who's the CEO of Amazon, told his corporate staffers to spend five days a week in the office. The decision marks a significant shift from Amazon's earlier return to work stance, which required corporate workers to be in the office at least three days a week. Now the company is giving them until January 2nd, so it's not even immediate,

January 2nd to start adhering to the new policy. What do we think about this? I think that Andy Jassy has watched his stock go sideways. He's saying to himself, we got to get this together. What did you call it? Quiet? Well, during the pandemic, there was this trend of quiet quitting where people basically were sitting at home and they basically weren't doing their job. And so they called it quiet quitting because they're still getting a paycheck, but they

essentially quit their job from a productivity standpoint. Now, Andy Jassy is conducting quiet firing, which he basically is saying everyone's got to be in the office five days a week. And there's some group of people who are not going to be happy about that. They're not going to come back to the office. They're going to quit. And so Amazon actually needs to lay off some employees. Their expenses have gotten a little too high.

They've been talking about layoffs. This is a great way to have your own employees weed themselves out. Because the people who don't want to go in the office five days a week are the exact people Amazon wants to fire. They just don't know which group that is. And so if they say,

everyone's got to be back in the office five days a week, whatever portion of people say, I don't want to do that. They say, great, you quit. And so the employee quit. Amazon didn't fire them, right? And so it's a whole different ball game in terms of severance and various activities.

Now, what I will say is this is something that I've even dealt with, right? And across many of our companies, we have some companies that are completely remote. We have some companies that are in office. The in-office companies are drastically faster in terms of their productivity and their movement. They are much better in terms of performance.

The individuals who work at those companies are furthering their career at an accelerated pace. and those people are happier, which is an underrated component of this. Do you think it's because they're more engaged in person? Humans are built to be around other humans. We have a society where people, because of digital technology,

are interacting with each other less and less. Yeah. There are young people who work for us who their lives literally are the following. They work remote. They wake up. They walk over to their computer. They play on their computer all day. They then get done with their work. They then play on their computer talking to their friends or consuming television, movies, social media, whatever. They go to sleep. They've eaten in between there, but they never left their apartment. They went the entire day and they never verbally spoke to another human being. It's not every day, but that is a crazy concept for people of a certain age and older to consider. But that

is the reality of some of these people's lives. And so they may say to themselves, I like this. But what I've noticed is a lot of the people in their 20s, when we set up an office and we said, you got to come in the office, they showed up and they were like, wait, so we all just like come here and we like hang out and work. And it was like, oh, wait a second. I like this. I, yeah. And I remember there was a lot of rhetoric around the pandemic when people were saying, oh, I love it so much. I can work from home. We had so much more done. There's no excessive like a water cooler talk. Like people aren't wasting time. It's more efficient. But then like you're at home, you lost the human contact of it all.

There are very few people in the world who can hold a bar of excellence up to themselves. True. How do you hold yourself to the standard of excellence? By yourself. When no one is there to hold you to that standard. Yeah. There are people who work in our office at times will hold me to that standard. And they'll say, hey, I need you to do X.

I don't do it. And then they'll say, hey, I needed you to do that. And I'll say, that's your job. Hold me to the bar, right? I hold other people to that bar of excellence. And so you need a team to be able to do that. There are very, very few people who are able to hold that. And people will point and say, well, what about Kobe Bryant?

If Kobe Bryant was able to hold himself to a standard of excellence without anyone else, he wouldn't have a trainer. He wouldn't have a nutritionist. He wouldn't have somebody who helped him work out. But also, not all of us are Kobe Bryant. Let's remember that. Of course, there's only one Kobe Bryant. And so everyone else, if Kobe Bryant needs a team,

If Kobe Bryant needs someone to hold him accountable, if Kobe Bryant needs someone to help him implement and kind of stick to a standard of excellence, so does everybody else. And my conclusion on the remote work versus in-office is that remote work is amazing for the employees. No shit. People love the idea of I do a little work. I play with my kids. I do a little work. I go take my laundry. I do a little work.

I go outside. I do a little work. Of course, that's way better as an individual in terms of going to an office and working there for a prolonged period of time. For an organization, in-office work is undefeated. Nothing is better. Nothing is more serious. Nothing instills a standard of excellence. And because of also like, if you're working in an office, even if other people are working on different things, there's this like notion of cross-pollination of ideas where you say something, someone else hears you says, oh, actually I'm working on something similar. And then you have

something else. Of course. And look, we have an office where we have empty desks. People will come and work out of the office after having worked remotely for a while. And they all say the exact same thing. I missed this. This is awesome. I love being able to come here and talk to people and learn and engage with people and see other people working hard. And so again, does that mean that every company has to be in office? No, there will be companies that are built with remote first and kind of asynchronous communication, all that stuff.

There are many ways up the mountain, but the highest probability of success is going to be in office. And so if you're Amazon and you're competing with Google and Google's in office and Amazon is remote, who do you think is gonna win? Well, and then if you read the letter that Jassy wrote to his team, he's very much trying to kind of foster this entrepreneurial

spirit. He's like, if we want to be the world's largest startup, we got to act nimble and flexible. But he's trying to tell them, hey, you don't come to Amazon to kick your legs back and retire. You're here to work like you would at a startup. And I think this definitely will turn off some people. But I want to know, like you said, it's kind of like quiet firing because the company grew its headcount so quickly around the pandemic. Jassy, when he took the helm, he instituted widespread cost cuts across Amazon, including the largest layoffs in its 27 years as a public company. I mean, if you are the leader of a large business, you have two levers to pull. we can make more revenue or we can save more in expenses. And I think the return to five days a

week, again, going back to monetary policy and the interest rate cut is going to be a tone setter. It's going to send a message. This letter and this stance is sending a message. It's saying to their employee base, we're serious. And if you want to be serious, this is a place for you. If you don't want to be serious, then you're probably going to not show up to the office. You're probably going to quit and we won't be that upset about it. And this is the last thing I'll say about it. But I do think that loose monetary policy and a lot of money kind of being injected into the market has a psychological effect on people beyond just the economic consequences.

So I think a lot of people from 2020 to like 2023, maybe even 2024, were kind of frivolous. Like, I think the mentality was wherever I go, whatever I invest in, I'll make money somehow. And I think now people are starting to become more disciplined and more serious, like you said, versus when there was money everywhere. It's just human nature to become more frivolous. One of the things that I have told my friends and we now joke about is for the future to be prosperous, safe, and bright, we need to make America serious again. And if you think about that across politics, if you think about that across economics, if you think about that across social conditions, if we return back to a seriousness, what you will find is that we will return back to a system of merit. We will return back to a system where results matter. We will return back to a system where costs matter. And we will actually return back to a system where individuals are inspired to be a high agency human and actually create change.

But if we live in a world where everyone just says, eh, whatever, we're on this path of progress. The government will print more. yeah and it's kind of like you can be as not serious as possible and still work at amazon i mean just think about this for a second there are people who that is their dream job is to work at amazon and then there are people inside that organization who are literally just off wait sorry how is that how are those two things true if you want is somebody who thinks of themselves as

a journalist and who went to journalism school and worked at a journalistic organization. If you want to look at not serious, look at the demands that the New York Times Union has put forward. It's mind boggling. It's the tech team. I think it's the New York

Times tech team. Whoever it is, whoever works at the New York Times. Can we go over the demands? I would love to talk about them. One of the demands is that they want a four day work week. That's a That's a serious demand. No, the one that.

It's a four-day work week. The one that for me. They want to work four days instead of five. That's the first one. Another demand is that they want non-performance-based bonuses. The whole idea of a bonus. Who doesn't want a non-performance? If you do a good job, you get a bonus.

If you don't do a good job, you don't get a bonus. They're saying, no, you're just going to give us the money regardless of whether we do a good job or not. Yeah. This is crazy. The one that I found particularly disturbing was the trigger warnings in news meetings around news events that may trigger some people. You work at a news organization. You may have to cover bombings. You may have to cover all sorts of carnage. You cannot leave. Don't work in news. It's so upsetting to me. I can't even. I think my old journalism professor is like, how can you be a serious professional and you're not even mentally tough enough to read the news? That's but you work at a news organization.

How is that possible? I honestly cannot tell you, by the way, I think that the New York Times over the last three years has had a number of tech stories that I would say were groundbreaking, were incredibly important. I read I'm a subscriber to the New York Times. I am, too. They do great work. And so I always wonder when you see these headlines of like such and such group, is it like two loud people who are just drowning out the silent majority? Or is it like the entire team gets together and they're like, you know what? We need a four day work week. But also, it's not even just that. The things that they are putting forth, some of them are actually illegal. Some of them would actually require the New York Times to break the law in order to give them that. Two of those things.

Are you saying that they're making racist demands? Two of those things are more money for non-white staff to attend conferences, which is illegal, and language that would prioritize non-citizens in the U.S. on visas in the case of layoffs, which is also, I don't think, legal. Well, again, it goes back to, I think a lot of ESG, DEI, et cetera, programs, which is these programs come from groups or people who I think in their mind, they actually think they're doing a good thing. They're thinking about how do we help this group? How do we do this thing? Right.

And so what they don't see. What is it? The road to hell is paved with good intentions. Of course. And so I always say to myself, are they rational? If somebody goes to them and says, hey, do you understand that 0.7 that you're suggesting is illegal? Let me explain why.

There's two responses to that. One person would say, oh, I didn't know that. That makes sense. Thanks for explaining it. This thing that we're trying to accomplish, let's see if there's another way we can accomplish it without triggering a violation of the law. and then there's what most of the responses are in my experience when you see these debates which is then people just start screaming you're racist you're you're mean you hate these people

and it becomes just like divisive you know that's an immature response that i think is becoming more and more common well unfortunately does the new york times have the courage well they'll have to they're not going to break the law to fire the people who are making these demands it's tough because it's a union. I think there's some sort of- Again, I don't know all the details, but like that's where you get a very big clashing of kind of what I would consider

historic business culture versus like this new age stuff. Imagine going and working at a company in name your time period and going to your boss and saying, we collectively have come together and we believe that we should have a four-day work week. But that's the least egregious, honestly, in my opinion.

The mandatory trigger warnings for news events, we were talking about courage earlier. If you are not a courageous person, step out. You do not belong in the news industry. Step away. Go work at Amazon. I'm kidding. Why does this never happen? Why does nobody ever make these suggestions at SpaceX? No, because again, it's a culture. And I think this is what, it's not the New York Times and we're going to fire these people. I think what the New York Times needs to do is they need to make a stance,

like say where you stand, say what you stand for and tell people who you like, who you want to employ. Do you remember when, who was it? Was it Coinbase, Brian? Yes. Yeah.

Brian Armstrong. Armstrong. He said, we're not going to talk about political things in the workplace. I am like, this is my stance. it was wildly unpopular when he said it in 2020. It is now the standard. Now people are like lauding him and applauding him for this. So it's like, you have to stand for something. And I think now the New York Times has gone so far off the cliff that now it's like biting it in the butt.

And let's see what happens. By the way, all the suggestions that they are making minus the potentially illegal ones would cost the New York Times over 100 million over three years. These people who are suggesting this have no concept of money and like no concept of what this means it's just so disgusting honestly i think that uh to me i think that management has a uh a pickle on their hands they're in a pickle it's a big pickle because if you hire enough people who think that these are good ideas now you're a workforce it's the workforce versus the management Yeah. You've been infiltrated by people who have a certain worldview, who have a certain perspective on what is appropriate, what's not. This is the New York Times' fault. That's what I'm saying, is you continue to hire people in a specific way.

I want to end on 39.8% of all U.S. homeowners are now mortgage free. This is according to data from Resi Club in a chart by Megan, who works at Resi Club. Excellent chart. Go look at it. So this is interesting. All time high. What do we think about this? I unfortunately saw it was not broken down by age. 39.8% of all homeowners in the United States. have age breakdown? Are mortgage-free, all-time high level. This is good. This means that almost 40% of homeowners don't have the debt on their property. Now, the reason why you keep asking about the age breakdown is because one of the drivers of this is the people who own the homes are just getting older. And so they've had more time to pay off the mortgage. And so if you had

people who bought their homes when they were 20 and now they're 70, that means that they've had 50 years to pay off the mortgage. And so there's more and more people just floating into the bucket of, I don't have a mortgage anymore because I'm so old that I've been paying it off for 30 years. Right. And so now the question becomes, can we get the younger population to become mortgage or debt free? That is harder to do because they're signing 30 year mortgages. And so this is probably more a point about the demographics of America than it is something in the economy. But it's still awesome that 40% of homeowners don't have the mortgage. And so there will be actually at some point, that number will start coming down. So it's been going up. But as those

people in the cohort of kind of the baby boomers roll out of the data set, die, then you're going to have smaller populations, they're still going to be locked in their mortgages or they'll be renters. And so that number will start to plummet. And so the question becomes, are there things that we can do to increase the younger cohorts rather than just look at the aggregate number? Right now, no, there's no clear answer. I was looking at some people who had responded to your tweet. And one tweet said, so 39.8% pay property taxes on property that they fully paid for and outright own. Not a scam at all. I mean, they don't. I mean, it's a usage tax though. Yeah, yeah, yeah. I know. It's not there. Anyway. All right, guys. I hope you guys enjoyed this

episode. I would love to hear your thoughts. What do you agree with? What do you disagree with? Please leave comments. I read every single one of them. They're incredibly valuable because it's feedback. Uh, if you have questions for us to answer next episode, make sure that you leave those as well. Uh, Polina also reads everyone. And then she tells me, Oh, look what somebody said. Look what somebody said. So, uh, if you leave a comment, you'll get at least two reads me and her. Uh, so we always appreciate that. And, uh, we will talk to you guys next week. All right, guys, I hope you enjoyed that episode. That was one of my favorites. Now we got a lot of things to talk about because I spent a lot of time making this podcast or these

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