1 00:00:01,360 --> 00:00:03,520 Ladies and gentlemen, welcome to the business Brew. 2 00:00:03,600 --> 00:00:07,120 I am your host, Bill Brewster. As always, thank you for tuning 3 00:00:07,120 --> 00:00:10,080 in. This episode features Stewart 4 00:00:10,080 --> 00:00:12,440 Lauren of Fort Sheridan Advisors. 5 00:00:12,520 --> 00:00:16,920 Stewart was on the pod previously, though we talked 6 00:00:16,920 --> 00:00:22,720 about non financial things, so I had reached out to him after I 7 00:00:22,720 --> 00:00:24,320 said I really enjoyed speaking with you. 8 00:00:24,920 --> 00:00:28,920 And if you ever want to come on the pod, hit me up. 9 00:00:29,200 --> 00:00:32,520 I'd love to talk to you about financial related stuff next 10 00:00:32,520 --> 00:00:38,480 time. So Stew Stewart put together a 11 00:00:38,480 --> 00:00:43,640 deck that he's been very involved in Chicago politics 12 00:00:43,800 --> 00:00:47,960 recently. And I think, I mean, you'll hear 13 00:00:47,960 --> 00:00:52,360 it in the episode, but it's got him thinking about the evolving 14 00:00:52,840 --> 00:00:58,920 social dynamics in society and and how there might be 15 00:00:58,920 --> 00:01:01,760 investable themes to go along with that. 16 00:01:01,760 --> 00:01:04,760 So I will link to his deck in the show notes. 17 00:01:05,360 --> 00:01:08,880 And I hope you like what you see or hear. 18 00:01:08,880 --> 00:01:11,000 I think it's a very interesting conversation. 19 00:01:11,200 --> 00:01:14,680 Not the most uplifting, but it is very data-driven and there's 20 00:01:14,680 --> 00:01:17,120 not, you know, it's just kind of it is what it is. 21 00:01:17,520 --> 00:01:21,280 So anyway, I hope you enjoy the episode. 22 00:01:21,280 --> 00:01:23,800 As always, none of this is financial advice. 23 00:01:23,800 --> 00:01:27,280 Everything in this program is for entertainment purposes only. 24 00:01:27,600 --> 00:01:30,120 Please consult your financial advisor before making any 25 00:01:30,120 --> 00:01:32,520 investment decisions and do your own due diligence. 26 00:01:32,680 --> 00:02:05,340 Enjoy the show. Ladies and gentlemen, Stewart 27 00:02:05,340 --> 00:02:09,340 Lauren back for the second time. More investment focus this time. 28 00:02:09,340 --> 00:02:12,140 He and I have been in touch for a while and he sent me over a 29 00:02:12,140 --> 00:02:15,100 deck that he said, you know, I'm kind of working on hooking up 30 00:02:15,100 --> 00:02:17,320 some themes. Would you want to talk about? 31 00:02:17,320 --> 00:02:20,760 I said, I like this very much. So here is the episode. 32 00:02:20,760 --> 00:02:22,440 So, Stuart, thank you for stopping by. 33 00:02:22,440 --> 00:02:25,040 You want to give people some background in case they don't 34 00:02:25,040 --> 00:02:26,840 know. Sure, absolutely. 35 00:02:27,040 --> 00:02:28,320 And thanks Phil for having me on. 36 00:02:28,320 --> 00:02:30,960 So my name is Stuart, I'm in Chicago. 37 00:02:30,960 --> 00:02:33,560 I'm at a firm called Fort Sheridan Advisors. 38 00:02:33,960 --> 00:02:37,280 We are about a billion dollar asset manager. 39 00:02:37,640 --> 00:02:41,240 We manage accounts for ultra high net worth, high net worth 40 00:02:41,240 --> 00:02:46,360 individuals and institutions and also do some advisory work. 41 00:02:47,080 --> 00:02:49,920 We've done some thematic funds in the past. 42 00:02:50,000 --> 00:02:54,840 And I had an idea sort of born out of my experience in Chicago 43 00:02:56,000 --> 00:02:59,160 that that I call the age of social disruption. 44 00:02:59,360 --> 00:03:02,760 And the gist of it is that I think we're going through a 45 00:03:02,760 --> 00:03:06,280 period where economic disaffection, social 46 00:03:06,280 --> 00:03:11,280 disaffection, political disaffection leads to more 47 00:03:11,280 --> 00:03:15,600 populist type politics. It leads to consumers looking 48 00:03:15,600 --> 00:03:18,360 for escapism. And it could be potentially A 49 00:03:18,360 --> 00:03:22,560 regime shift in markets in terms of in investment opportunities 50 00:03:22,560 --> 00:03:25,080 and risks. I'm a history major by 51 00:03:25,080 --> 00:03:28,040 background and I think the American experience has some 52 00:03:28,040 --> 00:03:32,200 central tenets to it, many of which are fraying at the seams, 53 00:03:32,600 --> 00:03:39,400 and we can get into that. But the the main thesis and 54 00:03:39,400 --> 00:03:41,480 we've seen it play out of the last couple years in terms of 55 00:03:41,480 --> 00:03:44,640 political results is that we're probably in a socio 56 00:03:44,640 --> 00:03:48,200 economically, socio politically bit more of a turbulent time 57 00:03:48,200 --> 00:03:50,400 period than we've experienced in the past. 58 00:03:51,600 --> 00:03:56,600 What, what historical periods would this remind you of? 59 00:03:57,200 --> 00:03:59,080 You know, when you're, when you're thinking about this, are 60 00:03:59,080 --> 00:04:02,320 there other countries, are there different periods or is this 61 00:04:02,320 --> 00:04:08,000 sort of a unique time? You know, I think it's sort of 62 00:04:08,000 --> 00:04:10,600 unique in the American experience and, and I can get 63 00:04:10,600 --> 00:04:16,600 into why, but I, I think key to the American experience has been 64 00:04:16,600 --> 00:04:22,040 this idea that we have sort of unlimited geographic mobility 65 00:04:22,079 --> 00:04:28,000 and economic mobility. And for various reasons and, and 66 00:04:28,000 --> 00:04:32,120 it's really been a process over the last century, but more so 67 00:04:32,120 --> 00:04:35,480 in, in recent years, geographic mobility is really difficult. 68 00:04:36,200 --> 00:04:39,160 I was surprised by this. By this slide in your deck, I 69 00:04:39,160 --> 00:04:43,480 was surprised how I was surprised a how how many people 70 00:04:43,480 --> 00:04:48,880 used to move and then I was surprised how the how drastic 71 00:04:48,880 --> 00:04:53,080 these the drop off has been you you don't even see many inner 72 00:04:53,080 --> 00:04:54,640 county moves anymore right that's. 73 00:04:55,120 --> 00:04:59,440 Right in in the 1950s, geographic mobility defined by 74 00:04:59,440 --> 00:05:03,400 people just moving was about 20% of the population. 75 00:05:04,640 --> 00:05:08,240 For different county moves that was about reached a peak of 76 00:05:08,240 --> 00:05:12,280 about 7 1/2%. Different state moves was about 77 00:05:12,280 --> 00:05:16,120 3% and the the total geographic mobility has dropped from about 78 00:05:16,120 --> 00:05:22,120 20% to 7 1/2%. In 2023, which was the last 79 00:05:22,120 --> 00:05:25,560 census data. Different county and state moves 80 00:05:25,560 --> 00:05:30,160 have plummeted and, and we all know the reasons why housing has 81 00:05:30,160 --> 00:05:36,600 become unaffordable for many. And that leads to a sense of 82 00:05:36,600 --> 00:05:38,880 people just feeling stuck. And when you pair that with 83 00:05:38,880 --> 00:05:44,960 declining economic mobility, it, it's not a really great melting 84 00:05:44,960 --> 00:05:48,320 pot. And what do you do when you're 85 00:05:48,320 --> 00:05:51,080 stuck physically and you're stuck economically? 86 00:05:51,240 --> 00:05:53,720 You know, if you're going to seek to move, I think you might 87 00:05:53,720 --> 00:05:57,120 seek to move ideologically, psychologically. 88 00:05:57,400 --> 00:06:00,840 And we, we can get into some of the implications of that. 89 00:06:01,760 --> 00:06:02,880 Yeah. Now. 90 00:06:03,760 --> 00:06:06,800 Yeah, I guess it would be interesting to see cohorts of 91 00:06:06,800 --> 00:06:09,600 people that are happily stuck first, those that are miserably 92 00:06:09,600 --> 00:06:11,400 stuck, right, That would be it. That's true. 93 00:06:11,440 --> 00:06:15,880 Interesting thing because because some of, I mean some of 94 00:06:15,880 --> 00:06:18,400 it obviously some people have like mortgages on homes that 95 00:06:18,400 --> 00:06:20,440 they like or a lot of these homes I guess are actually paid 96 00:06:20,440 --> 00:06:24,000 off, which is wild to me. But that is neither here nor. 97 00:06:24,000 --> 00:06:27,360 There, it's just the sense I think of opportunities being 98 00:06:27,360 --> 00:06:31,760 foreclosed and I think that resonates with some people 99 00:06:31,760 --> 00:06:34,280 obviously more than others. You know, you talk about people 100 00:06:34,280 --> 00:06:38,160 in our age bracket. I'm going to be 40 in a couple 101 00:06:38,160 --> 00:06:40,280 weeks. You know it's a. 102 00:06:40,960 --> 00:06:44,160 Great decade of your life. Hopefully. 103 00:06:44,880 --> 00:06:46,560 It'll be good. You know. 104 00:06:46,680 --> 00:06:49,200 Although the midlife crisis may come, but that we'll get through 105 00:06:49,200 --> 00:06:52,040 that, don't worry about it. Pretend you did the right thing. 106 00:06:52,240 --> 00:06:56,840 Pretend that you know you you went to college because that's 107 00:06:56,840 --> 00:06:58,000 what everyone said you should do. 108 00:06:58,000 --> 00:07:04,840 You took out debt to do so and you graduate into a job market 109 00:07:04,960 --> 00:07:10,560 around 2008. And the opportunity set is not 110 00:07:10,640 --> 00:07:13,640 perhaps what you expected. The recovery is slow. 111 00:07:13,960 --> 00:07:17,800 You got to be in your mid late 30s. 112 00:07:17,840 --> 00:07:21,240 Maybe you have kids. The world shuts down if you have 113 00:07:21,240 --> 00:07:22,520 kids. You don't know what to do with 114 00:07:22,520 --> 00:07:24,120 them. And then maybe when you're 115 00:07:24,120 --> 00:07:28,640 finally ready to buy a house, housing costs have exploded 50%. 116 00:07:28,840 --> 00:07:33,640 So, you know, fortunately that that doesn't describe everyone 117 00:07:33,680 --> 00:07:36,640 in our peer group, but for a lot of people that's been that their 118 00:07:36,640 --> 00:07:40,280 experience. And it's unsurprising that 119 00:07:40,280 --> 00:07:45,360 politically the the exit valve for that is on the left, 120 00:07:46,440 --> 00:07:49,640 arguably quasi socialism. And you're, you're seeing 121 00:07:49,640 --> 00:07:51,920 candidates like that went across the country. 122 00:07:52,600 --> 00:07:55,040 I'm in Chicago, we we have one as our mayor. 123 00:07:55,040 --> 00:07:56,920 New York might have one seen, too. 124 00:07:57,880 --> 00:08:01,560 And on the right, you're seeing a surge in populism, and it's 125 00:08:01,960 --> 00:08:05,000 just at a very base level, people want a more responsive 126 00:08:05,000 --> 00:08:09,680 politics, regardless of whether the policies behind it have any 127 00:08:09,680 --> 00:08:12,440 merit. Yeah, yeah. 128 00:08:12,440 --> 00:08:15,400 The wild thing, too, is not only is the New York candidate 129 00:08:16,400 --> 00:08:18,320 potentially going to win, you're starting to see some national 130 00:08:18,320 --> 00:08:23,320 support behind them. Yeah, it's a a very different 131 00:08:23,320 --> 00:08:28,880 type of politics, I think resonates with the base of each 132 00:08:28,880 --> 00:08:32,520 party who's who's fired up by all of these issues. 133 00:08:34,240 --> 00:08:38,640 And I I just am not sure what the catalyst would be for 134 00:08:38,640 --> 00:08:42,360 everyone to take a step back and maybe think more rationally 135 00:08:42,360 --> 00:08:46,560 through this. Yeah, Well, one of the one of 136 00:08:46,560 --> 00:08:52,080 the charts that you had, you know, laid out like Republicans, 137 00:08:52,080 --> 00:08:55,080 how they describe Democrats, how Democrats describe Republicans. 138 00:08:55,080 --> 00:08:58,280 Maybe it would help if we all just kind of dropped our labels 139 00:08:58,280 --> 00:09:01,200 and stop being football fans for a little bit, started being 140 00:09:01,200 --> 00:09:02,920 Americans, but that's not going to happen. 141 00:09:03,160 --> 00:09:06,160 That would certainly help. But maybe what what I should do 142 00:09:06,160 --> 00:09:09,040 is just go through the the main tenets of this thesis that I 143 00:09:09,040 --> 00:09:10,760 have. Yeah, I would like. 144 00:09:10,760 --> 00:09:15,160 To real quick before you do that, I'd be curious just to get 145 00:09:15,160 --> 00:09:17,920 briefly into your experience in Chicago because I know that 146 00:09:17,920 --> 00:09:20,600 you've inserted yourself into local politics and like what 147 00:09:20,600 --> 00:09:25,000 have you, what have you seen that sort of got you pulling on 148 00:09:25,000 --> 00:09:29,600 this thread? Well, I never thought I'd be 149 00:09:29,600 --> 00:09:33,720 politically active. I became so in the last four 150 00:09:33,720 --> 00:09:40,120 years because the the policies in Chicago started affecting my 151 00:09:40,120 --> 00:09:46,200 family life. We we had some close calls with 152 00:09:46,200 --> 00:09:49,240 public safety right around our house, which isn't the most 153 00:09:49,240 --> 00:09:51,400 exciting thing to have happen when you have little kids. 154 00:09:51,840 --> 00:09:54,160 I had. 3 when I was like. Yeah. 155 00:09:54,680 --> 00:09:57,640 Two armed robberies at gunpoint in my alley. 156 00:09:58,760 --> 00:10:01,880 Not not what you sort of expect when you move into those types 157 00:10:01,880 --> 00:10:05,160 of neighborhoods. So I, I became a bit more 158 00:10:05,160 --> 00:10:10,240 politically active when our current mayor, Brandon Johnson 159 00:10:10,240 --> 00:10:17,600 was campaigning, I was very active in warning about the the 160 00:10:18,360 --> 00:10:23,320 implications of him winning, particularly for the the city's 161 00:10:23,320 --> 00:10:27,320 economic and financial future. He won, credit to him. 162 00:10:28,800 --> 00:10:33,600 But since he's been in office, I've been working with some of 163 00:10:33,600 --> 00:10:38,640 the, for lack of a better term, more rational officials, elected 164 00:10:38,640 --> 00:10:43,240 officials in in city government and in the state government 165 00:10:43,640 --> 00:10:51,000 trying to prevent sort sort of the, the worst of their policies 166 00:10:51,000 --> 00:10:55,880 from a finance perspective from coming into action. 167 00:10:56,880 --> 00:11:00,360 I've I've testified in City Hall about finance issues, I've 168 00:11:00,360 --> 00:11:03,760 worked behind the scenes and preventing some disastrous terms 169 00:11:03,760 --> 00:11:07,200 of bond issuances from from getting implemented. 170 00:11:08,760 --> 00:11:11,520 So it's sort of like blocking and tackling until the next 171 00:11:11,520 --> 00:11:15,400 election. But I tried to take a step back 172 00:11:15,760 --> 00:11:19,040 a year or so ago and, you know, it's, it's one thing to sort of 173 00:11:19,040 --> 00:11:22,960 complain all the time about how are people like this winning and 174 00:11:22,960 --> 00:11:24,200 they're going to destroy the city. 175 00:11:25,360 --> 00:11:30,120 It's, it's another to think, OK, well, what propelled someone 176 00:11:30,120 --> 00:11:31,760 with this set of views to victory? 177 00:11:32,040 --> 00:11:35,520 Obviously some people needed to support it for him to get as far 178 00:11:35,520 --> 00:11:38,360 as he did. And you're you're seeing 179 00:11:38,360 --> 00:11:44,000 candidates like him resonate across the country on New York 180 00:11:44,000 --> 00:11:49,640 being the primary example. It's it's more constructive to 181 00:11:49,640 --> 00:11:54,520 think how did we get here and what does it mean, especially if 182 00:11:54,560 --> 00:11:58,480 if you want to change the the political landscape. 183 00:11:58,680 --> 00:12:01,280 But as an investor, I think it's really important to think, all 184 00:12:01,280 --> 00:12:05,520 right, what does this mean? What, what does this mean for 185 00:12:05,520 --> 00:12:08,560 now in the future? And how does that change the 186 00:12:08,560 --> 00:12:10,720 risk environment potentially in the opportunity set? 187 00:12:11,360 --> 00:12:12,920 Yeah. Yeah, I agree. 188 00:12:13,480 --> 00:12:14,760 All right. So do you want to go, do you 189 00:12:14,760 --> 00:12:19,000 want to go through like sort of the age of social disruption, 190 00:12:19,000 --> 00:12:20,880 for lack of a better term? And we'll kind of see. 191 00:12:20,880 --> 00:12:24,000 How it goes, I'll, I'll, I'll do a brief run through my thesis. 192 00:12:24,000 --> 00:12:32,520 So again, the, the, the main point is that people who are 193 00:12:32,520 --> 00:12:35,040 experiencing economic challenges, people who are 194 00:12:35,040 --> 00:12:39,720 experiencing social frustration, political frustration, the, the 195 00:12:39,720 --> 00:12:42,880 combination of all that will lead to a more populist type of 196 00:12:42,880 --> 00:12:45,200 politics on the left and the right. 197 00:12:45,520 --> 00:12:51,240 And it's going to lead to people looking for an escape valve in 198 00:12:51,240 --> 00:12:55,000 their personal lives. And I think that gives us just a 199 00:12:55,000 --> 00:12:58,400 different type of risk and investment environment than 200 00:12:58,400 --> 00:13:07,040 perhaps we're used to. I think looking back in history, 201 00:13:07,120 --> 00:13:10,440 reading some of the foundational texts in, in, in the US 202 00:13:10,440 --> 00:13:13,160 experience are really helpful for framing about how we think 203 00:13:13,160 --> 00:13:15,760 about the country. One of those to me is 204 00:13:16,040 --> 00:13:17,760 Tocqueville's Democracy in America. 205 00:13:18,080 --> 00:13:21,520 And, and the commentary that he had, you know, 200 years ago 206 00:13:21,520 --> 00:13:26,800 almost still is important for how we conceive ourselves today. 207 00:13:26,800 --> 00:13:28,840 And I would argue we're we're getting away from that. 208 00:13:30,040 --> 00:13:34,520 So one of the things that he remarked back when he he wrote 209 00:13:34,520 --> 00:13:38,440 his volumes is that when, when all the privileges of birth and 210 00:13:38,440 --> 00:13:41,520 fortune are abolished, when all professions are accessible to 211 00:13:41,520 --> 00:13:44,760 all and a man's own energies may place them at the top of any one 212 00:13:44,760 --> 00:13:47,840 of them, and easy and unbounded career seems open to his 213 00:13:47,840 --> 00:13:49,640 ambition. There's been there's been this 214 00:13:49,640 --> 00:13:53,200 idea in the American experience that, you know, basically we all 215 00:13:53,200 --> 00:13:55,280 start as equals. We, we can accomplish 216 00:13:55,280 --> 00:13:57,920 everything. Obviously, you know, that's not 217 00:13:57,920 --> 00:14:00,160 how history is played out for everyone, but that that's a 218 00:14:00,160 --> 00:14:04,840 really important concept in terms of how we view ourselves 219 00:14:04,840 --> 00:14:06,840 and view the country. And to the extent we get away 220 00:14:06,840 --> 00:14:10,840 from that, that's leading to to a lot of turbulence. 221 00:14:11,200 --> 00:14:15,080 So we already talked about declining geographic mobility 222 00:14:16,520 --> 00:14:19,600 and, and, and to a smaller extent economic mobility. 223 00:14:19,840 --> 00:14:22,200 But just keep point at the outset. 224 00:14:23,680 --> 00:14:27,840 If we have this sort of break in the unwritten social contract, 225 00:14:28,480 --> 00:14:34,880 which is that this this is basically a land of opportunity 226 00:14:34,880 --> 00:14:38,880 where if you work hard, you can have a good outcome that's going 227 00:14:38,880 --> 00:14:42,240 to lead to a break in the status quo in politics and the economy 228 00:14:42,240 --> 00:14:44,760 and consumer behavior. And, and I think what it means 229 00:14:45,200 --> 00:14:49,680 is that individuals are likely to be more self focused and more 230 00:14:49,680 --> 00:14:52,200 short term oriented. And the government, importantly, 231 00:14:52,400 --> 00:14:57,040 is likely to be more responsive to popular needs to maintain its 232 00:14:57,040 --> 00:15:01,600 support and legitimacy. And we can get into all that. 233 00:15:01,600 --> 00:15:04,560 So. And you and you get your your 234 00:15:04,560 --> 00:15:08,480 idea of individuals are more short term focused is is based 235 00:15:08,480 --> 00:15:14,360 on the premise that if you are less optimistic about the future 236 00:15:14,360 --> 00:15:17,360 and your mobility than thinking long term. 237 00:15:17,440 --> 00:15:20,320 Absolutely. Why even plan for the why even 238 00:15:20,320 --> 00:15:23,320 plan for the long term? Yeah, if if it seems 239 00:15:23,320 --> 00:15:24,640 unattainable. Yeah. 240 00:15:24,840 --> 00:15:27,400 And and I think for a lot of people in our peer group, like 241 00:15:27,400 --> 00:15:30,880 that's their mindset. And you know, you, you either 242 00:15:30,880 --> 00:15:33,760 just spend all of your disposable income or you know, 243 00:15:33,800 --> 00:15:38,200 you, you trade zero data expiry options and, and hope for a home 244 00:15:38,200 --> 00:15:42,120 run. So we, we don't need to get into 245 00:15:42,320 --> 00:15:44,560 all the data on housing. I think everyone listening to 246 00:15:44,560 --> 00:15:47,360 this realizes that housing has become a lot of it a lot more 247 00:15:47,360 --> 00:15:50,240 expensive in many markets and we don't build enough of it. 248 00:15:51,400 --> 00:15:55,080 About 1/3 of the country lives in stressed housing markets, 249 00:15:55,800 --> 00:16:01,560 which, which means that their, their housing expenses to income 250 00:16:01,560 --> 00:16:05,160 is over 30%. For a lot of people in big 251 00:16:05,160 --> 00:16:11,160 cities, it's more than that. And the the great news, and I 252 00:16:11,160 --> 00:16:14,360 say great in a very sarcastic way, is should you not be able 253 00:16:14,360 --> 00:16:17,880 to afford housing? Rents have outpaced wages since 254 00:16:17,880 --> 00:16:20,280 the GFC. So your rent is going and. 255 00:16:20,520 --> 00:16:22,320 Even more so the last couple years now. 256 00:16:22,360 --> 00:16:24,400 Now my landlord friends really like that. 257 00:16:24,400 --> 00:16:28,000 But that's probably not good for social stability. 258 00:16:29,440 --> 00:16:31,840 First time buyers are are being priced out. 259 00:16:33,360 --> 00:16:38,680 The the average age of home buyers was 33 six years ago. 260 00:16:38,680 --> 00:16:45,000 Now it's 38. You have more adults and who are 261 00:16:45,000 --> 00:16:47,400 25 to 34 living with their parents. 262 00:16:48,720 --> 00:16:54,240 So in in the 1960s that that was about 10% of that age group 263 00:16:54,240 --> 00:16:57,240 lived with their parents. Today it's closer to 20%. 264 00:16:57,760 --> 00:17:00,240 I'd be curious to know those that don't. 265 00:17:00,240 --> 00:17:02,920 I'd be curious to know how much of their housing is subsidized 266 00:17:02,920 --> 00:17:07,520 by their parents. Yeah, they're, well, I keep 267 00:17:07,520 --> 00:17:11,440 reading about how everyone in your marketing is getting 268 00:17:11,560 --> 00:17:15,079 parental handouts. Yeah, it's, but, but just think 269 00:17:15,079 --> 00:17:18,960 about that like if, if you're living with your parents still 270 00:17:18,960 --> 00:17:23,560 as a young adult, you're, you're just, you're not going to be 271 00:17:23,560 --> 00:17:26,640 able to start your career or family life the the way you 272 00:17:26,640 --> 00:17:30,320 probably want it to. And I I would think that leads 273 00:17:30,320 --> 00:17:34,040 to a lot of frustration. There was a study done by some 274 00:17:34,040 --> 00:17:43,120 Stanford statisticians in 2017 on the number of children who 275 00:17:43,120 --> 00:17:47,600 are out earning their parents. And every 10 year cohort from 276 00:17:47,600 --> 00:17:50,920 the 40s through the 80s, that number keeps dropping and 277 00:17:50,920 --> 00:17:54,240 dropping to the point where people born up until the mid 278 00:17:54,240 --> 00:17:59,440 1980s, only 50% of that cohort was out earning their parents. 279 00:17:59,440 --> 00:18:05,000 It used to be in prior decades, sixty, 7080%. 280 00:18:06,800 --> 00:18:10,200 So the, the presumption that you'll be more successful than 281 00:18:10,200 --> 00:18:13,080 the prior generation, you know, that's that's in question. 282 00:18:13,080 --> 00:18:17,640 And I would guess that the data from kids born in the 1990s 283 00:18:18,400 --> 00:18:23,840 substantiates that. If that study's updated, it 284 00:18:23,840 --> 00:18:26,400 would be odd if it. Doesn't I mean to your point, 285 00:18:26,400 --> 00:18:32,040 like on that chart, 194050607080 goes down reliably. 286 00:18:32,120 --> 00:18:34,920 So the 1990's, the probability it it. 287 00:18:35,720 --> 00:18:39,240 Yeah, I would agree with you. It'd be interesting to see. 288 00:18:39,720 --> 00:18:44,120 So, so economic social mobility or excuse me, economic and 289 00:18:44,120 --> 00:18:51,320 geographic mobility that that's foreclosed to to many and 290 00:18:51,600 --> 00:18:54,440 compared to the past. From the financial standpoint, 291 00:18:54,440 --> 00:18:57,800 from a personal finance standpoint, a lot of people are 292 00:18:57,800 --> 00:19:00,240 having difficulty out there. About 1/3 of Americans have 293 00:19:00,240 --> 00:19:06,440 difficulty paying their bills. There was a survey done earlier 294 00:19:06,440 --> 00:19:11,000 this year by Bankrate that asked if you, if you have an, an 295 00:19:11,000 --> 00:19:13,240 emergency savings account, how much do you have? 296 00:19:14,480 --> 00:19:20,160 About 70% has less than five months of expenses covered, 50% 297 00:19:20,160 --> 00:19:25,480 plus has less than 3. Wages are not keeping up with 298 00:19:25,480 --> 00:19:29,640 corporate profits. You know, we, we, we hear this 299 00:19:29,640 --> 00:19:33,280 all the time. The top 10% is doing better than 300 00:19:33,280 --> 00:19:38,040 than the rest And, and it's more extreme the, the higher up you 301 00:19:38,040 --> 00:19:41,400 go on those percentiles. But the top 10% has over 50% of 302 00:19:41,400 --> 00:19:45,240 the wealth. The bottom 90% has over 50% of 303 00:19:45,240 --> 00:19:51,640 the debt. I, I think what adds gasoline to 304 00:19:51,640 --> 00:19:56,880 all of this and, and sets it further on fire is people are on 305 00:19:56,880 --> 00:20:00,040 their phones all day long on, you know, Instagram or whatever, 306 00:20:00,240 --> 00:20:04,000 looking at all these influencers who are portraying amazing 307 00:20:04,000 --> 00:20:07,760 lifestyles and, and you think, you know, why can't I have that? 308 00:20:07,880 --> 00:20:10,400 There's actually a term for that called money dysmorphia. 309 00:20:11,320 --> 00:20:15,640 And about 45% of Gen. Z and millennials are 310 00:20:15,640 --> 00:20:21,440 categorized as exhibiting that. And it again it just. 311 00:20:22,760 --> 00:20:25,640 Leads to a lot of frustration. And the question is, what's the 312 00:20:25,680 --> 00:20:30,800 outlet for that frustration? And it's, it's a unfortunately, 313 00:20:32,040 --> 00:20:36,160 in my view at least, it's a type of politics that doesn't 314 00:20:37,680 --> 00:20:40,800 probably stand the chance of accomplishing the, the, the 315 00:20:40,800 --> 00:20:44,720 goals it purports. So again, quasi socialism and 316 00:20:44,720 --> 00:20:48,040 populism, which I think will lead to a lot more instability. 317 00:20:48,640 --> 00:20:50,640 Driven by a lot of resentment, I would think. 318 00:20:50,640 --> 00:20:51,720 Right? Like, yeah. 319 00:20:52,720 --> 00:20:55,640 And, and again, I'm not judging anyone for that, you know, I, 320 00:20:56,200 --> 00:20:58,760 it's, it just sort of is what it is when we're trying to 321 00:20:58,760 --> 00:21:03,800 understand it. We have all these younger kids 322 00:21:03,800 --> 00:21:08,040 graduating from college now with tons of debt. 323 00:21:08,040 --> 00:21:12,160 There's a question, you know, they, they had a couple years 324 00:21:12,160 --> 00:21:15,880 where debt repayments were were paused that started to resume. 325 00:21:16,720 --> 00:21:17,960 How are they going to repay that? 326 00:21:17,960 --> 00:21:22,080 That the delinquency rate on student loans for being 90 days 327 00:21:22,080 --> 00:21:27,600 behind is about 30% right now. And if you look at some of the 328 00:21:27,600 --> 00:21:31,360 employment numbers for recent college grads, it's not looking 329 00:21:31,360 --> 00:21:35,080 great. There's a question is that AI 330 00:21:35,080 --> 00:21:39,040 taking those entry level jobs? If so, how are these kids ever 331 00:21:39,040 --> 00:21:42,120 going to repay that debt? I, I have some strong views on 332 00:21:42,120 --> 00:21:46,720 that as my, my wife and I repaid a lot of student loans and that 333 00:21:46,720 --> 00:21:51,360 was not a fun experience. But if if you're 20 something 334 00:21:51,360 --> 00:21:55,000 years old with six figures of debt and your employment 335 00:21:55,000 --> 00:21:58,120 prospects are not what you thought they were, you're, 336 00:21:58,120 --> 00:22:00,800 you're going to vote for someone who says, hey, let's cancel 337 00:22:00,800 --> 00:22:06,680 student debt, sign me up. Labor market. 338 00:22:06,680 --> 00:22:09,560 You know, we've all seen the statistics about, about the 339 00:22:09,560 --> 00:22:15,320 decline in manufacturing jobs over the years that's affected a 340 00:22:15,320 --> 00:22:17,760 lot of blue collar communities across the country. 341 00:22:18,080 --> 00:22:22,880 And the, the question is, what's going to happen to white collar 342 00:22:22,880 --> 00:22:27,920 work? I use AI all the time and I, I 343 00:22:28,200 --> 00:22:32,720 think it, it allows me to be extremely more productive. 344 00:22:33,520 --> 00:22:37,000 But if, if you're a junior person in the labor force and 345 00:22:37,000 --> 00:22:40,160 firms are trying to protect their profit margins, you know, 346 00:22:41,240 --> 00:22:43,240 there's a cost to hiring someone new. 347 00:22:43,240 --> 00:22:46,880 Are you going to hire someone new or are you going to use 348 00:22:47,000 --> 00:22:51,960 Chachi Petito 3 model? So longer term, I'm really 349 00:22:51,960 --> 00:22:54,720 bullish about what AI means for productivity, but shorter term, 350 00:22:54,720 --> 00:22:56,640 it's probably going to be quite disruptive. 351 00:22:57,400 --> 00:22:59,680 And white collar workers have never really needed to deal with 352 00:22:59,680 --> 00:23:04,480 that type of disruption. So on for, for the blue collar 353 00:23:04,480 --> 00:23:09,160 workers, I, I think most data shows that disaffected people in 354 00:23:09,160 --> 00:23:11,960 the Midwest who lost their manufacturing jobs over the last 355 00:23:11,960 --> 00:23:15,600 20 or 30 years that they've supported more populist type 356 00:23:15,600 --> 00:23:18,880 candidates, which, you know, it's part of Trump space. 357 00:23:19,160 --> 00:23:26,160 And I think to the extent white collar workers are affected, a 358 00:23:26,160 --> 00:23:30,160 lot of them go for sort of a different flavor on the the 359 00:23:30,160 --> 00:23:36,840 other side, social institutions. You know, Tocqueville said in 360 00:23:36,840 --> 00:23:40,840 his Democracy in America that Americans of all ages, all 361 00:23:40,840 --> 00:23:44,240 conditions, all dispositions constantly form associations, 362 00:23:44,960 --> 00:23:48,080 associations of 1000 times religious, moral, feudal, 363 00:23:48,080 --> 00:23:51,600 general, restricted, enormous or diminutive. 364 00:23:52,560 --> 00:23:59,960 We're social preachers in in America and something changed 365 00:23:59,960 --> 00:24:05,000 where a lot of those social connections are just becoming 366 00:24:05,000 --> 00:24:08,800 more afraid. So anyway, you look at it merit, 367 00:24:09,320 --> 00:24:12,840 there was a popular chart shared on Twitter the other day about 368 00:24:12,840 --> 00:24:16,520 30 year olds who are married and have a home and just showing 369 00:24:16,520 --> 00:24:19,640 severe decline. But if you look at marriage 370 00:24:19,640 --> 00:24:23,360 across the board, not as many people are getting married, not 371 00:24:23,360 --> 00:24:26,800 as many people are having kids. That the total number of 372 00:24:26,800 --> 00:24:30,920 families with kids under 18 peaked in about 2006, about 36 373 00:24:30,920 --> 00:24:34,000 million. We're now back down to about 33 374 00:24:34,000 --> 00:24:37,160 million. Those are 1995 levels, despite 375 00:24:37,160 --> 00:24:38,840 the population being quite larger. 376 00:24:42,760 --> 00:24:46,560 There's a survey done by Pew across different countries asked 377 00:24:46,560 --> 00:24:49,680 me how close do you feel to people in your community and 378 00:24:49,680 --> 00:24:52,440 country? the US ranked just about dead 379 00:24:52,440 --> 00:24:55,720 last compared to 24 other countries. 380 00:24:55,720 --> 00:24:59,360 In those surveys, only 66% of people felt close to other 381 00:24:59,360 --> 00:25:03,560 Americans. 54% of respondents said they're close to people in 382 00:25:03,560 --> 00:25:07,880 their communities. In 1990, the average American 383 00:25:08,040 --> 00:25:18,360 had at least three friends. Today those numbers are are 384 00:25:19,080 --> 00:25:22,120 about half. So 50% of people in the 1990s 385 00:25:22,120 --> 00:25:23,760 said they had more than three friends. 386 00:25:23,920 --> 00:25:28,360 Now it's closer to to 25%. Yeah dude, in the amount of 387 00:25:28,360 --> 00:25:31,520 people that say that they have no friends is 12%. 388 00:25:31,520 --> 00:25:35,880 That's crazy. It's sad and. 389 00:25:36,520 --> 00:25:40,720 It used to be 3 for context. Yep, we're we're spending more 390 00:25:40,720 --> 00:25:44,000 time alone. Particularly like after COVID, 391 00:25:44,840 --> 00:25:47,480 younger Americans are spending a lot more time alone. 392 00:25:47,920 --> 00:25:50,560 The crazy thing about this that keeps going off in my head and 393 00:25:50,560 --> 00:25:55,360 it's, it's probably not correct, but I think so much of it and, 394 00:25:55,360 --> 00:25:58,120 and maybe I'm putting a square peg into a round hole here, but 395 00:25:58,440 --> 00:26:01,280 I really feel like a lot of it is phone addiction and social 396 00:26:01,280 --> 00:26:04,360 media. And meanwhile, the market caps 397 00:26:04,360 --> 00:26:08,360 of those companies are the highest, right that out of the 398 00:26:08,400 --> 00:26:12,040 entire market. You know, it's just wild to me 399 00:26:12,040 --> 00:26:15,400 that I think that, like, a big component of what is driving 400 00:26:15,400 --> 00:26:18,800 loneliness is also apparently the most lucrative. 401 00:26:19,200 --> 00:26:20,880 It's kind of messed up if I'm right, yeah. 402 00:26:21,560 --> 00:26:24,360 There, there used to be a book not used to there was a book 403 00:26:24,360 --> 00:26:28,520 called Bowling Alone, which sort of predicted much of this maybe 404 00:26:28,520 --> 00:26:30,720 20 years ago. The the sequel could be 405 00:26:30,720 --> 00:26:33,240 scrolling alone. Yeah, that's right. 406 00:26:34,360 --> 00:26:37,160 It's and it's not like when you're doing some of these 407 00:26:37,160 --> 00:26:39,840 activities that you're, you know, if we're on the phone 408 00:26:39,840 --> 00:26:41,840 texting your friends, you know, that's, that's a way of 409 00:26:41,840 --> 00:26:47,760 engagement. But, but I think for many, the, 410 00:26:47,760 --> 00:26:52,760 the fact that so many Americans say they have 0 or only 1-2 or 411 00:26:52,760 --> 00:26:56,720 three friends at least says to me that a lot of that time spent 412 00:26:56,720 --> 00:26:59,720 alone, if it's on the phone, it's not social time. 413 00:27:01,720 --> 00:27:05,760 Religious affiliation is declining. 414 00:27:05,760 --> 00:27:10,760 In 1900, almost every single American was part of a religious 415 00:27:10,760 --> 00:27:13,720 community. We're down to about 70% 416 00:27:13,720 --> 00:27:16,000 religious affiliation out of that group. 417 00:27:16,040 --> 00:27:23,360 You know, most people are not serious devotees and and 418 00:27:23,360 --> 00:27:26,240 religion, you know, for some is really important, for others 419 00:27:26,240 --> 00:27:28,440 it's not. But what it does provide is a 420 00:27:28,440 --> 00:27:32,760 sense of community. And if if you have no sense of a 421 00:27:32,760 --> 00:27:35,560 local community, if you have no sense of a religious community, 422 00:27:35,560 --> 00:27:38,200 if you have no sense of a friend community, like you're going to 423 00:27:38,200 --> 00:27:40,840 try and find something. And I think for a lot of people, 424 00:27:40,840 --> 00:27:44,800 unfortunately, the community that they do find is a political 425 00:27:44,800 --> 00:27:47,440 1. And that's great, but it just 426 00:27:47,440 --> 00:27:50,320 leads to like, hyper bipartisanship. 427 00:27:51,480 --> 00:27:54,960 And I don't think that's the healthiest thing for the 428 00:27:54,960 --> 00:27:59,760 American experience there. There was actually a study done 429 00:28:01,120 --> 00:28:04,120 earlier this year published in a journal called Political 430 00:28:04,120 --> 00:28:10,600 Psychology. It said basically that political 431 00:28:10,600 --> 00:28:13,920 identity now outweighs all other social identities. 432 00:28:14,520 --> 00:28:16,760 That's crazy. That's not good. 433 00:28:18,040 --> 00:28:21,880 No, and and it goes into how ideology is driving 434 00:28:21,880 --> 00:28:23,720 polarization, which isn't surprising. 435 00:28:24,000 --> 00:28:30,080 Like if, you know, people need some purpose in life and for 436 00:28:30,080 --> 00:28:33,280 money, like the outlet is politics and it's sort of an all 437 00:28:33,280 --> 00:28:37,640 or nothing thing and. Well, that, yeah, the the 438 00:28:37,640 --> 00:28:45,040 problem as I see it is if people are, if the primary identity is 439 00:28:45,600 --> 00:28:52,040 politics and the way that people describe the other party is so 440 00:28:52,040 --> 00:28:56,320 unfavorably now, it's like, how can you have a sense of 441 00:28:56,320 --> 00:29:01,040 community if you think half of the country is complete morons 442 00:29:01,400 --> 00:29:05,280 that are like brainwashed or hateful or whatever, right. 443 00:29:05,280 --> 00:29:07,960 Like that? That is not a good place to be. 444 00:29:09,040 --> 00:29:12,200 No, it, it makes it tough. I mean, there's been surveys 445 00:29:12,360 --> 00:29:15,320 about like wouldn't if, if you're a Democrat or Republican, 446 00:29:15,320 --> 00:29:18,720 would you let your child date or marry someone from the other 447 00:29:18,720 --> 00:29:22,040 party? And, and like the, the answers 448 00:29:22,640 --> 00:29:25,200 are basically no, which, which to me is crazy. 449 00:29:25,200 --> 00:29:29,360 Like, it's the last thing I'd care about, but a lot of people 450 00:29:29,360 --> 00:29:32,080 really care about this. Well this could be total fake 451 00:29:32,080 --> 00:29:35,480 news, but I saw today that that there was something floated on 452 00:29:35,480 --> 00:29:38,120 Twitter so take it for a huge grain of salt. 453 00:29:38,120 --> 00:29:41,840 But 43% of Republicans would support Trump if he was in the 454 00:29:41,840 --> 00:29:43,480 Epstein files. Like what? 455 00:29:43,520 --> 00:29:46,840 What are we talking about? I didn't see that. 456 00:29:47,200 --> 00:29:50,200 I just saw it this morning. I was like, this is insanity. 457 00:29:51,120 --> 00:29:52,680 I don't know if it's real, right? 458 00:29:52,680 --> 00:29:56,800 But like the fact, the fact is I actually kind of believe that it 459 00:29:56,800 --> 00:29:59,160 could be real and that's kind of. 460 00:29:59,160 --> 00:30:02,360 Sick people derive a lot of meaning, but like, if you're not 461 00:30:02,360 --> 00:30:05,280 deriving meaning out of other aspects of your life, if you're 462 00:30:05,280 --> 00:30:07,280 not deriving professional meeting, if, if you're not 463 00:30:07,280 --> 00:30:10,280 deriving family meaning, community meaning, you got to 464 00:30:10,280 --> 00:30:11,760 find something that's meaningful. 465 00:30:11,880 --> 00:30:16,000 And if it's politics, you know, you're, you're going to support 466 00:30:16,000 --> 00:30:20,120 your candidate and your party. And no matter what, I know. 467 00:30:20,280 --> 00:30:23,280 I say this is I say this to people, but like, I supported 468 00:30:23,280 --> 00:30:27,520 Jay Cutler as a Bears fan. I hope Jay Cutler is super, you 469 00:30:27,520 --> 00:30:29,520 know, happy. But that was the wrong decision. 470 00:30:29,520 --> 00:30:31,840 And it's like the Pledge of Allegiance to the Bears had me 471 00:30:31,840 --> 00:30:34,160 defending, you know, my guy, Jay. 472 00:30:34,200 --> 00:30:36,120 And people were like, you're blind. 473 00:30:36,120 --> 00:30:40,680 And they were right. No comment on that. 474 00:30:40,680 --> 00:30:42,680 Poor Jay, he could sling the ball. 475 00:30:42,680 --> 00:30:45,720 That was fun. Oh well, it should have been a 476 00:30:45,720 --> 00:30:49,440 different outcome. Anyway, I digress. 477 00:30:49,800 --> 00:30:52,320 Anyways, if you don't. Think it's that different than 478 00:30:52,320 --> 00:30:54,960 politics, for the record. No, it's not like people. 479 00:30:55,160 --> 00:30:57,960 It's it's the same. I, you know, sports is a much 480 00:30:57,960 --> 00:31:01,800 healthier outlet in my opinion than politics. 481 00:31:01,800 --> 00:31:06,720 But people care about their political group candidates 482 00:31:06,720 --> 00:31:09,560 inside, just like you care about your sports team. 483 00:31:09,560 --> 00:31:13,280 Well, and dude, to your point, if your, if your identity in 484 00:31:13,560 --> 00:31:19,200 communities that you used to get, you know that your identity 485 00:31:19,200 --> 00:31:23,160 and community that from is gone and all of a sudden people are 486 00:31:23,160 --> 00:31:26,240 shifting more to politics. Like it's, it's a natural sort 487 00:31:26,240 --> 00:31:28,480 of conclusion that people would be more dug in. 488 00:31:28,480 --> 00:31:30,640 But man, that's that's a scary place to be. 489 00:31:31,040 --> 00:31:33,880 So, so not only are we shifting more to politics, but like we're 490 00:31:33,880 --> 00:31:36,840 more frustrated by our political institutions at the same time. 491 00:31:37,200 --> 00:31:40,920 So probably no surprise. Trust in the government is at 492 00:31:41,000 --> 00:31:45,320 basically 70 year lows per per surveys. 493 00:31:45,640 --> 00:31:49,520 Only 22% of people say that they trust in the federal government, 494 00:31:49,520 --> 00:31:53,240 down from post World War 2 numbers in the mid 70%. 495 00:31:54,840 --> 00:32:00,520 There was a survey by Gallup of confidence in various US 496 00:32:00,520 --> 00:32:04,920 institutions. Congress pulls the last with sub 497 00:32:04,920 --> 00:32:09,560 10% confidence. Probably not a surprise. 498 00:32:09,560 --> 00:32:12,000 Small business actually pulls the highest. 499 00:32:13,040 --> 00:32:16,320 Yeah. We've talked about the growing 500 00:32:16,320 --> 00:32:19,600 sense of partisan division. There's intensely competing 501 00:32:19,600 --> 00:32:25,680 cultural values on each side. And to no surprise, like we're 502 00:32:25,680 --> 00:32:29,000 we're, we're getting candidates emerging on each side who are 503 00:32:29,000 --> 00:32:32,440 tapping into this frustration. And they are not the 504 00:32:32,440 --> 00:32:35,080 establishment type candidates that we grew up with. 505 00:32:35,480 --> 00:32:39,520 I think on the Republican side, it's pretty much been overtaken 506 00:32:40,360 --> 00:32:43,560 by the, the Trump version of populist politics. 507 00:32:43,560 --> 00:32:49,400 And on the left side, the, the establishment Democrat Party, 508 00:32:49,520 --> 00:32:54,840 you know, of the Clinton, Obama years, they, they don't have 509 00:32:54,840 --> 00:32:57,520 anywhere near the same kind of sway that they once did. 510 00:32:57,800 --> 00:33:02,600 All the energy is on the farther left of the spectrum and it's 511 00:33:02,600 --> 00:33:06,640 with candidates like AOC or or candidates like Mandani and 512 00:33:06,920 --> 00:33:12,000 representatives like AOC. That's, you know, where where 513 00:33:12,000 --> 00:33:18,400 all the popular support is. Really interesting surveys and 514 00:33:18,400 --> 00:33:22,280 this is starting to get more into topical discussion for 515 00:33:22,280 --> 00:33:27,120 markets. But young Democrats in a survey 516 00:33:27,120 --> 00:33:34,480 a couple years ago for respondents age 49 and younger, 517 00:33:35,920 --> 00:33:41,760 socialism is far more popular than than capitalism. 60% of 518 00:33:41,760 --> 00:33:46,840 respondents under 49 support socialism over capitalism. 519 00:33:46,840 --> 00:33:48,640 Now there's a question, do they know what that means? 520 00:33:49,080 --> 00:33:52,840 I'm not so sure, but I think they support the concept of just 521 00:33:52,840 --> 00:33:59,040 the government providing a lot more services and redistributing 522 00:33:59,600 --> 00:34:03,600 wealth and not having free market competition. 523 00:34:05,000 --> 00:34:08,760 Totally opposite skew on the Republican side. 524 00:34:10,280 --> 00:34:16,000 And another interesting note on that survey is that it it 525 00:34:16,000 --> 00:34:21,080 actually on the left, socialism pulled higher with upper and 526 00:34:21,080 --> 00:34:23,840 middle income respondents than than lower income. 527 00:34:24,199 --> 00:34:28,880 And, and I think that speaks to maybe the experience that people 528 00:34:29,120 --> 00:34:33,320 in our cohort have had where, you know, you graduate college 529 00:34:33,320 --> 00:34:37,639 with a lot of debt, you're making, let's say, low to mid 6 530 00:34:37,639 --> 00:34:39,800 figures. You're in a big city, you know, 531 00:34:39,800 --> 00:34:42,239 you feel like you maybe should be doing better than you are. 532 00:34:42,440 --> 00:34:45,440 And things just seem more unaffordable. 533 00:34:45,440 --> 00:34:49,679 And you're, you're on your phone all day seeing the, the lives of 534 00:34:49,679 --> 00:34:51,639 the rich and famous and thinking, you know, I should 535 00:34:51,639 --> 00:34:57,080 have that. And it's I think the mindset of 536 00:34:57,080 --> 00:35:01,520 people who respond this way and support candidates who propose 537 00:35:01,520 --> 00:35:05,440 socialist type policies is understandable. 538 00:35:05,440 --> 00:35:09,000 Even if I don't agree with it. I, I just, it's important to to 539 00:35:09,000 --> 00:35:13,680 get the the impetus behind why so many are feeling that way on 540 00:35:13,680 --> 00:35:18,560 the right survey show that the populist support is growing. 541 00:35:19,200 --> 00:35:25,040 Both parties surprisingly would support strong men leaders and, 542 00:35:25,040 --> 00:35:30,240 and, and I think that speaks to just people being fed off on 543 00:35:30,240 --> 00:35:33,320 each side and wanting someone to take charge and get their, their 544 00:35:33,320 --> 00:35:38,640 lives better for them. What worries me just in terms of 545 00:35:38,800 --> 00:35:41,720 the, the institutions that I think have worked so well for 546 00:35:42,480 --> 00:35:49,880 the, the country and, and for just capitalism is that the far 547 00:35:49,880 --> 00:35:54,400 left and far right, the populace right and, and the very 548 00:35:54,400 --> 00:35:59,920 progressive left, both are in pretty strong agreement that the 549 00:36:00,000 --> 00:36:03,680 economic system in the country is not working. 550 00:36:05,920 --> 00:36:08,600 You know, they, they have different approaches maybe for, 551 00:36:08,600 --> 00:36:15,800 for how they fix that, but the institutions are only so strong 552 00:36:15,800 --> 00:36:18,920 as the, the, the people who support them. 553 00:36:18,920 --> 00:36:23,680 And if, if we're seeing just an erosion and institutional trust 554 00:36:23,680 --> 00:36:28,360 and capitalism and, and our economic system itself, I, I 555 00:36:28,360 --> 00:36:32,920 think that's something investors need to take into account so we, 556 00:36:32,920 --> 00:36:35,400 we can get into now more of the, the macro and market 557 00:36:35,400 --> 00:36:42,200 implications. But fertility rates down, you 558 00:36:42,200 --> 00:36:45,640 know, is, is people have more expensive lives and have started 559 00:36:45,640 --> 00:36:48,760 their adulthood later in terms of just having their own house 560 00:36:48,760 --> 00:36:52,880 and, and being married. Birth rates are falling. 561 00:36:52,920 --> 00:36:56,520 And perhaps it's not, I mean, that's not just AUS phenomenon. 562 00:36:56,520 --> 00:37:00,680 It's, it's a Western global phenomenon. 563 00:37:01,400 --> 00:37:04,880 But because we have so many healthy older people, it's, it's 564 00:37:04,880 --> 00:37:10,480 really a challenge in, in the US because our dependency ratio is, 565 00:37:10,680 --> 00:37:15,720 has gone from about 15% in the 60s to now close to 30% today. 566 00:37:16,840 --> 00:37:23,160 So it, it's really going to start pressuring the entitlement 567 00:37:23,160 --> 00:37:24,880 system. We have Social Security and and 568 00:37:24,880 --> 00:37:27,120 Medicare there. There's a question, how do you 569 00:37:27,120 --> 00:37:31,560 get around that? Maybe AI rescues today, maybe 570 00:37:31,560 --> 00:37:33,760 robotics can help to some extent. 571 00:37:34,760 --> 00:37:42,720 But the the key thing I think is across the board, I think 572 00:37:43,000 --> 00:37:49,240 Americans see some of our budget deficit and go, whoa, those 573 00:37:49,240 --> 00:37:53,080 numbers don't seem sustainable. We need to cut spending. 574 00:37:53,080 --> 00:37:58,000 And actually, for polling, most Americans, regardless of 575 00:37:58,000 --> 00:38:01,040 political affiliation, do think the government spends too much. 576 00:38:01,640 --> 00:38:03,880 Yeah, and misallocates the resources, right? 577 00:38:03,880 --> 00:38:07,000 Yeah. Well, the same polling also 578 00:38:07,000 --> 00:38:10,760 asks, do you think the government spends enough in XYZ 579 00:38:10,760 --> 00:38:15,040 area? So for almost every single area, 580 00:38:15,240 --> 00:38:17,120 the response is we spend too little. 581 00:38:17,960 --> 00:38:24,600 So again, overall 16% of people, only 16% of respondents think we 582 00:38:24,600 --> 00:38:29,600 spend too little, 60% of people think we spend too much, 22 just 583 00:38:29,600 --> 00:38:32,640 about right. So, so 60% of people think we, 584 00:38:32,640 --> 00:38:37,400 we spend too much on various government programs, but 60% of 585 00:38:37,400 --> 00:38:40,320 people think we spend too little on healthcare, on Social 586 00:38:40,320 --> 00:38:45,200 Security, on infrastructure, on Medicare, on education, on 587 00:38:45,200 --> 00:38:47,760 environmental issues like like name your issue. 588 00:38:47,960 --> 00:38:49,960 Yeah, that's right. People don't think you spend the 589 00:38:50,040 --> 00:38:53,640 environment. So I, I, I think what, what it 590 00:38:53,640 --> 00:38:57,800 comes down to it is that if, if you are benefiting personally 591 00:38:57,880 --> 00:39:03,200 from government spending or, or you're in a difficult spot in 592 00:39:03,200 --> 00:39:07,200 your own personal life, which I think many are, you don't want 593 00:39:07,200 --> 00:39:09,160 to see the government pull back from spending. 594 00:39:09,320 --> 00:39:13,840 So, so we have this conundrum where we, we see the deficit 595 00:39:13,840 --> 00:39:16,880 numbers just growing and growing, But if the government's 596 00:39:16,880 --> 00:39:21,080 going to maintain its popular support, you know, each party at 597 00:39:21,080 --> 00:39:25,120 this, there's no consensus anymore for cutting the deficit. 598 00:39:25,120 --> 00:39:31,360 Like, the the doge thing was a cute little experiment, but at 599 00:39:31,360 --> 00:39:36,560 the end of the day that there's just no support on the left or 600 00:39:36,560 --> 00:39:41,200 the right to really pull back from social assistance spending. 601 00:39:41,720 --> 00:39:43,280 It's too important for too many people. 602 00:39:44,880 --> 00:39:49,440 Yeah. So, you know, we're in markets. 603 00:39:49,440 --> 00:39:52,920 We, I think we can talk about what that means for rates, but 604 00:39:52,920 --> 00:39:56,480 my view is regardless whether we're going to go on a cutting 605 00:39:56,480 --> 00:40:00,360 cycle and in the next couple months like I, I, I think the, 606 00:40:00,440 --> 00:40:05,040 the, the longer end of the Treasury curve probably has some 607 00:40:05,040 --> 00:40:09,440 upward pressure to it. That's what I've been trying to 608 00:40:09,440 --> 00:40:11,280 figure out. I've been trying to figure out 609 00:40:12,080 --> 00:40:18,600 why would a cutting cycle reduce the long end outside of term 610 00:40:18,600 --> 00:40:22,200 premium right like but. I I don't think it would like 611 00:40:22,200 --> 00:40:24,920 what would reduce the long run is if the economy slows some 612 00:40:24,920 --> 00:40:29,680 somewhat or if you know, people's views on longer term 613 00:40:29,680 --> 00:40:33,520 inflation change, but. So I think this might be dumb, 614 00:40:33,520 --> 00:40:38,040 but if the economy slows doesn't the doesn't that the probability 615 00:40:38,040 --> 00:40:44,240 of a budget like deficit to GDP problem expand even further? 616 00:40:45,080 --> 00:40:48,360 It could in in in the short term, you know, typically the 10 617 00:40:48,360 --> 00:40:51,400 year treasury. Tracks is a place, not nominal. 618 00:40:51,400 --> 00:40:56,480 GDP and you know, just look at what the 10 years done the last 619 00:40:56,480 --> 00:40:59,280 couple days as we've got some mixed economic data. 620 00:40:59,440 --> 00:41:03,960 But I do think longer term the the look at the Treasury term 621 00:41:03,960 --> 00:41:06,640 premium, you know, it was negative a couple years ago and 622 00:41:06,640 --> 00:41:13,280 it is now very positive again. I think that was wild about this 623 00:41:13,280 --> 00:41:16,640 and I, you know, I mean, I should know this, but seeing it 624 00:41:16,640 --> 00:41:20,120 is different. But in 1984 it was 5% was the 625 00:41:20,120 --> 00:41:25,680 treasury term premium. That's, that's it's .68% right 626 00:41:25,680 --> 00:41:26,400 now, right? Very. 627 00:41:26,480 --> 00:41:28,800 Positive real interest rates back then. 628 00:41:30,200 --> 00:41:32,960 You know, another question is, are we really going to get that 629 00:41:32,960 --> 00:41:35,400 serious about tackling inflation? 630 00:41:37,480 --> 00:41:40,760 I think there is a strategic benefit probably to letting it 631 00:41:40,760 --> 00:41:43,760 run at 3%. Everyone hates inflation. 632 00:41:43,760 --> 00:41:46,400 Like I, I certainly don't like it and politically it was a 633 00:41:46,400 --> 00:41:48,200 loser. But there's a difference between 634 00:41:48,200 --> 00:41:54,640 having 6 or 7% inflation and let's say 2 3/4 to 3% inflation. 635 00:41:55,000 --> 00:41:59,520 And that could be very helpful over time and sort of eroding 636 00:41:59,520 --> 00:42:06,360 away our our debt problem. It certainly seems like whoever 637 00:42:06,360 --> 00:42:09,880 is appointed next for the Fed chair will not have a very 638 00:42:09,880 --> 00:42:13,880 strong inflation fighting mandate from the administration. 639 00:42:16,840 --> 00:42:19,800 And again, the the other way, potentially out of the 640 00:42:19,800 --> 00:42:24,600 predicament which the the government finds itself in of 641 00:42:24,600 --> 00:42:27,840 having to probably spend a lot to maintain popular support. 642 00:42:27,840 --> 00:42:32,800 But also not letting the the finance situation of the country 643 00:42:32,800 --> 00:42:37,680 just blow out of proportions would be productivity unlocking 644 00:42:37,720 --> 00:42:41,400 AI. If if AI can increase economic 645 00:42:41,400 --> 00:42:44,480 productivity and we can get higher GDP growth, you know, 646 00:42:44,480 --> 00:42:47,920 that does wonders for our debt ratios in in future years. 647 00:42:47,920 --> 00:42:51,600 So I do think as, as part of this thesis, I have the 648 00:42:51,600 --> 00:42:54,640 government's going to double down on investments that support 649 00:42:54,640 --> 00:42:57,680 productivity enhancements, whether that's an AI, energy, 650 00:42:57,960 --> 00:43:03,000 manufacturing, health. I, I don't think we're going to 651 00:43:03,000 --> 00:43:06,280 tackle deficits the traditional way by cutting spending. 652 00:43:06,280 --> 00:43:14,160 It will have to be. We really turbocharged GDP and, 653 00:43:14,160 --> 00:43:16,960 and on the consumer side, you know, we've talked about 654 00:43:17,480 --> 00:43:21,200 everyone feels, not everyone, many people are feeling 655 00:43:21,200 --> 00:43:24,280 frustrated in their own lives, whether that's economic, social, 656 00:43:24,280 --> 00:43:26,480 political frustration. What's your outlet? 657 00:43:27,600 --> 00:43:29,360 We're spending more time in social media. 658 00:43:29,360 --> 00:43:32,160 We're spending more time doing video games, streaming. 659 00:43:33,720 --> 00:43:38,960 We're, we're spending a lot more time in the digital world 660 00:43:38,960 --> 00:43:43,080 forming relationships, which very well could be meaningful 661 00:43:43,560 --> 00:43:45,800 than we are in the physical world. 662 00:43:47,280 --> 00:43:55,160 We are if, if you're looking to get out of your financial 663 00:43:55,160 --> 00:43:59,000 situation, you know, maybe you're, you're trading options 664 00:43:59,000 --> 00:44:02,800 or, or levered ETFs retail, which didn't really used to be 665 00:44:02,800 --> 00:44:09,640 the main driver in markets. It is now a huge component that 666 00:44:09,640 --> 00:44:15,360 there's data showing that net retail purchases, it basically 667 00:44:15,360 --> 00:44:19,400 quadrupled in 2020 when everyone was at home trading their 668 00:44:19,400 --> 00:44:24,360 stimulus money, but they, they stayed at that really elevated 669 00:44:24,360 --> 00:44:28,320 level. And I, I think retail volumes, 670 00:44:28,320 --> 00:44:32,560 the latest JP Morgan data shows that for large and midcap 671 00:44:32,560 --> 00:44:38,320 stocks, retail volumes are in, in excess of 20%. 672 00:44:38,360 --> 00:44:41,360 You know, there's been periods when it's got as high as 40% of 673 00:44:41,360 --> 00:44:47,880 trading and you can look at the option volume. 674 00:44:48,080 --> 00:44:55,080 It's just absolutely exploded the the daily volume for for 675 00:44:55,080 --> 00:45:01,160 calls and puts now about 80 million or so. 676 00:45:01,360 --> 00:45:05,880 You know, 10 years ago it it was 1/3 of that. 677 00:45:06,200 --> 00:45:09,200 And and that's not all retail, obviously, but I think it's 678 00:45:09,200 --> 00:45:12,240 probably a good chunk, especially when you look at, you 679 00:45:12,240 --> 00:45:14,000 know, the zero day to expiry options. 680 00:45:15,400 --> 00:45:18,320 It's it's the Reddit Wall Street bets crowd. 681 00:45:21,280 --> 00:45:24,040 You know, more people are turning to crypto is a financial 682 00:45:24,040 --> 00:45:28,280 alternative. I don't think that's shocking 683 00:45:28,280 --> 00:45:32,360 news to anyone listening to this get gambling. 684 00:45:33,000 --> 00:45:35,800 The the casinos in Vegas are having a tough time right now. 685 00:45:36,000 --> 00:45:40,360 But gambling across the board, whether that's in person or 686 00:45:40,360 --> 00:45:47,480 sports betting has gone way off. It's it's almost doubled. 687 00:45:47,840 --> 00:45:52,000 We've gone from a we've gone from a world where ESPN wouldn't 688 00:45:52,000 --> 00:45:55,360 touch gambling because it was affiliated to Disney to a world 689 00:45:55,360 --> 00:45:59,240 where ESPN is has dedicated gambling feeds. 690 00:46:03,440 --> 00:46:05,720 That's my opinion. Hey, if you want to gamble on 691 00:46:05,720 --> 00:46:09,720 sports, more power to you. I will say one of the best, one 692 00:46:09,720 --> 00:46:13,200 of the best golf events that I watched was ESPN and and it was 693 00:46:13,200 --> 00:46:17,240 literally 2 guys betting whether or not people would hit the 694 00:46:17,240 --> 00:46:19,960 greens on their next shot. It was incredibly entertaining. 695 00:46:19,960 --> 00:46:23,680 And then I was thinking, how the hell am I going to teach my kids 696 00:46:23,680 --> 00:46:28,880 how to do this in a healthy way? Or like introduce the concept to 697 00:46:28,880 --> 00:46:31,800 them so that they're not, you know, I mean, I don't know. 698 00:46:31,800 --> 00:46:33,760 The 18 year old male is such an idiot. 699 00:46:37,680 --> 00:46:43,800 Well, whether that's a smart thing to do or not aside, more 700 00:46:43,800 --> 00:46:49,280 people definitely are doing it. And there's this mindset that, 701 00:46:49,360 --> 00:46:52,560 you know, why do you need to plan for the future? 702 00:46:54,040 --> 00:46:56,160 It's just going to be unattainable anyways. 703 00:46:56,560 --> 00:46:58,960 Spend every discretionary dollar you have. 704 00:46:58,960 --> 00:47:04,000 So credit card balance are going up. 705 00:47:04,000 --> 00:47:07,200 Credit card limits are going up by now. 706 00:47:07,200 --> 00:47:10,040 Pay later volumes are are going way up. 707 00:47:11,200 --> 00:47:18,000 It's about $100 billion gross merchandise volume in in BNPLII. 708 00:47:18,000 --> 00:47:23,800 Personally am suspect of that business model because I don't 709 00:47:23,800 --> 00:47:26,520 know what happens to those companies if we ever get a 710 00:47:26,520 --> 00:47:30,560 recession, but more and more consumers are financed the NPL, 711 00:47:31,160 --> 00:47:34,120 yeah. Oh, the loss rates on completely 712 00:47:34,120 --> 00:47:37,320 discretionary items will be 0. Don't worry about it, there 713 00:47:37,320 --> 00:47:43,800 won't be any problems. But you know, if you want a big 714 00:47:43,800 --> 00:47:45,960 ticket item, like that's the way you're going to do it. 715 00:47:45,960 --> 00:47:50,400 If if you don't have the money, you look at travel, you look at 716 00:47:50,400 --> 00:47:53,920 dining, you look at live entertainment, like spending in 717 00:47:53,920 --> 00:47:55,760 all those categories is going way up. 718 00:47:56,320 --> 00:47:58,120 Spending on personal care is way up. 719 00:47:59,520 --> 00:48:02,080 I I have a dog, I also have two kids. 720 00:48:02,360 --> 00:48:06,840 But for a lot of people with without kids like pets are the 721 00:48:06,840 --> 00:48:11,440 new kids. And the number of cats and dogs 722 00:48:11,440 --> 00:48:15,600 in the country has gone up about 50% from 20 years ago. 723 00:48:16,440 --> 00:48:18,000 And people spend a lot on their pets. 724 00:48:19,480 --> 00:48:25,760 US spending on pet industry is about 140 billion last year, 725 00:48:25,760 --> 00:48:28,880 which is up from 60 billion in 2016. 726 00:48:29,600 --> 00:48:32,400 So that's an another category that that could see some 727 00:48:32,400 --> 00:48:34,760 benefits. So what what I tried to do and 728 00:48:34,760 --> 00:48:37,480 for anyone interested, I can make this deck available. 729 00:48:37,480 --> 00:48:41,160 It's it's a fairly lengthy one, but come up with different 730 00:48:41,160 --> 00:48:45,920 categories that are positively exposed to these trends for 731 00:48:45,920 --> 00:48:50,560 investing. And, and the idea is that this 732 00:48:50,560 --> 00:48:53,440 could be how you allocate part of your portfolio or, or you 733 00:48:53,440 --> 00:48:57,360 could build a thematic fund fund around it. 734 00:48:58,200 --> 00:49:01,760 Because I do think these trends are going to be with us for some 735 00:49:01,760 --> 00:49:05,080 time. And, and I've seen it first hand 736 00:49:05,360 --> 00:49:10,200 from living in Chicago that when people get really frustrated 737 00:49:10,200 --> 00:49:13,920 with the status quo, you know, they don't go for the candidate 738 00:49:14,160 --> 00:49:19,120 who will make a very reasoned pitch about what policies you 739 00:49:19,120 --> 00:49:21,720 need to implement to improve things. 740 00:49:21,880 --> 00:49:28,040 They'll go for someone who says I can fix everything and they 741 00:49:28,040 --> 00:49:32,160 don't go into any details, but they are charismatic and 742 00:49:32,960 --> 00:49:37,560 telegenic, so how? Much of Chicago's problem is you 743 00:49:37,560 --> 00:49:41,720 can't get through the machine enough to get on the ticket. 744 00:49:42,560 --> 00:49:46,400 Like, like, do we think that the mayor that's there today is 745 00:49:46,400 --> 00:49:50,360 there in a truly open election, or is it that the political 746 00:49:50,360 --> 00:49:53,000 machine sort of lifted him to get elected? 747 00:49:53,520 --> 00:49:57,320 I Well, one of the problems we have is that no one votes. 748 00:49:58,080 --> 00:50:02,440 I think we had only 30% or so people turn out in the last 749 00:50:02,440 --> 00:50:07,000 mayoral election and you don't need to win a lot of votes to 750 00:50:07,000 --> 00:50:10,680 become mayor of the city if that's the turn out. 751 00:50:11,720 --> 00:50:15,120 Another problem and, and I think it looks to be a problem in New 752 00:50:15,120 --> 00:50:21,760 York, is that the pragmatic voters don't rally around one 753 00:50:21,760 --> 00:50:26,720 candidate in, in Chicago, there was a dozen or so people who ran 754 00:50:26,720 --> 00:50:33,320 for mayor. And it, it gives a pathway for 755 00:50:33,320 --> 00:50:38,560 someone who, you know, maybe only has 2030% support to, to 756 00:50:38,560 --> 00:50:43,200 make it to the, the final round. And then, you know, once a 757 00:50:43,200 --> 00:50:46,760 candidate is on the final ballot, they have a really good 758 00:50:46,760 --> 00:50:48,200 shot. Yeah. 759 00:50:48,880 --> 00:50:52,040 So I, I don't think this is just a Chicago problem. 760 00:50:52,040 --> 00:50:53,720 I don't think it's just a New York City problem. 761 00:50:53,760 --> 00:50:58,600 I would expect across the country, especially in cities 762 00:50:58,600 --> 00:51:04,280 that have these cost of living issues and have highly educated 763 00:51:04,280 --> 00:51:10,360 workforces where maybe a, a lot of the, the people don't feel 764 00:51:10,360 --> 00:51:13,240 like they've achieved what they should have in life. 765 00:51:13,320 --> 00:51:17,440 Yet you're, you're going to get at least on the left, more 766 00:51:17,440 --> 00:51:22,680 candidates in the Brandon Johnson Sohran Mamdani style. 767 00:51:24,040 --> 00:51:29,880 And it's, you know, I just think it's reality we we need to live 768 00:51:29,880 --> 00:51:34,320 with on the right. I do think you got the type of 769 00:51:34,320 --> 00:51:38,680 populism that we've seen the, the, the last, you know, 770 00:51:38,920 --> 00:51:46,600 arguably 8 years, nine years. And it's I think we're a long 771 00:51:46,600 --> 00:51:52,760 way away from bipartisanship and candidates like we had in the 772 00:51:52,760 --> 00:52:00,400 1990s emerging. Yeah, it's, I don't know, It's 773 00:52:00,400 --> 00:52:02,320 going to be interesting to see how it all plays out. 774 00:52:02,880 --> 00:52:05,760 I will. I will say at the federal level, 775 00:52:05,960 --> 00:52:10,560 like the, the government, you know, can print all the money it 776 00:52:10,560 --> 00:52:13,600 wants to that there are obviously repercussions from 777 00:52:13,600 --> 00:52:16,760 doing that, whether that's for the dollar or for interest 778 00:52:16,760 --> 00:52:21,480 rates. But like, there are ways to 779 00:52:21,480 --> 00:52:28,680 tackle some of these social problems and just for lack of a 780 00:52:28,680 --> 00:52:35,200 better term, give money to, to people who are struggling or 781 00:52:35,200 --> 00:52:38,160 just need extra assistance at the local level. 782 00:52:38,440 --> 00:52:43,200 Like I, I don't know what a lot of States and cities will do. 783 00:52:44,240 --> 00:52:49,120 The more that the the government gives money for or the 784 00:52:49,120 --> 00:52:52,640 government diverts its finances for Social Security and Medicare 785 00:52:53,680 --> 00:52:58,200 and federal programs, the less that's going to flow into state 786 00:52:58,240 --> 00:53:04,200 and city coffers. And for States and cities, at 787 00:53:04,200 --> 00:53:08,280 least in many of the blue States and cities, the finances just 788 00:53:08,280 --> 00:53:12,120 are horrendous. And it's not clear how that gets 789 00:53:12,120 --> 00:53:14,000 improved. And you have all the same sort 790 00:53:14,000 --> 00:53:19,800 of social pressures at a local level, but without any fiscal 791 00:53:19,800 --> 00:53:23,280 flexibility to tackle them. And for a lot of, you know, in 792 00:53:23,280 --> 00:53:27,920 Chicago and New York and California, it's, it's not like 793 00:53:27,920 --> 00:53:30,240 tax rates are low and you have scope to increase them. 794 00:53:32,080 --> 00:53:38,240 It's, it's going to be a very challenging environment for, for 795 00:53:38,240 --> 00:53:43,480 those States and cities, unfortunately, to, to get their 796 00:53:43,520 --> 00:53:50,080 economies and finances in shape. It's, it's something I spend a 797 00:53:50,080 --> 00:53:54,000 lot of time, a lot of headache thinking about for Chicago, 798 00:53:54,280 --> 00:53:56,600 because we probably have the worst finances of any major 799 00:53:56,600 --> 00:53:59,920 city. We have a lot of these social 800 00:53:59,920 --> 00:54:02,640 pressures. The mayor wants to tackle all of 801 00:54:02,640 --> 00:54:03,920 them. He wants to build housing. 802 00:54:03,920 --> 00:54:07,120 He wants to provide assistance to lower income residents. 803 00:54:07,120 --> 00:54:10,640 And I'm not saying those are bad goals, but like if you have no 804 00:54:10,640 --> 00:54:12,760 way to pay for them and you promise people them, you're 805 00:54:12,760 --> 00:54:16,320 going to really upset a lot of your supporters, which he has. 806 00:54:17,200 --> 00:54:20,240 And you're you're just not going to be able to accomplish 807 00:54:20,240 --> 00:54:23,440 anything that you want to do. And you're not going to work on 808 00:54:23,440 --> 00:54:26,480 tackling like the underlying challenges that the city has. 809 00:54:27,040 --> 00:54:30,360 I, I sort of view cities and states as being engaged in 0 sum 810 00:54:30,360 --> 00:54:32,320 competition. You know, the federal level, 811 00:54:32,320 --> 00:54:35,680 everything's positive. Some like the, the economy grows 812 00:54:35,680 --> 00:54:37,240 fantastic, like more for everyone. 813 00:54:37,640 --> 00:54:40,240 States and cities are competing with each other for talent, for 814 00:54:40,240 --> 00:54:42,960 capital, for resources, for, for investment. 815 00:54:43,760 --> 00:54:47,400 And if you have a set of policies that is responsive to 816 00:54:47,400 --> 00:54:51,760 these social pressures, which diverts money away or diverts 817 00:54:51,760 --> 00:54:57,040 resources away and policies away from just creating an 818 00:54:57,040 --> 00:55:01,520 environment where you can have sustainable economic growth and 819 00:55:01,920 --> 00:55:04,840 tax rates so high that they frighten businesses and 820 00:55:04,840 --> 00:55:08,040 residents with the ability to go elsewhere away. 821 00:55:09,400 --> 00:55:13,040 It's sort of the self perpetuating cycle and you need 822 00:55:13,040 --> 00:55:15,080 to break out of it. I'm a little more optimistic 823 00:55:15,080 --> 00:55:24,800 about Chicago just because we've seen how incompetent this type 824 00:55:24,800 --> 00:55:32,000 of policy set is, especially with with the current people we 825 00:55:32,000 --> 00:55:33,480 have in place trying to implement it. 826 00:55:33,480 --> 00:55:36,320 So I don't think the appetite for trying this again is there. 827 00:55:36,520 --> 00:55:40,040 But for a lot of cities, like, you know, the the worst thing 828 00:55:40,040 --> 00:55:44,400 that could happen to New York is that a guy like Mandani gets 829 00:55:44,400 --> 00:55:51,400 elected and he's confident. So it's, I don't think anyone 830 00:55:51,400 --> 00:55:56,200 should be surprised that you see these younger charismatic 831 00:55:56,200 --> 00:56:01,280 candidates start emerging whose politics maybe we personally 832 00:56:01,280 --> 00:56:05,880 find outrageous. But they're resonating with a 833 00:56:05,880 --> 00:56:08,280 lot of people who feel disaffected. 834 00:56:08,280 --> 00:56:12,760 And I don't think it's a fair presumption that, you know, we 835 00:56:12,760 --> 00:56:20,040 revert back to some sort of normal set of some normal 836 00:56:20,040 --> 00:56:22,000 operating environment, just like it's probably not a fair 837 00:56:22,000 --> 00:56:24,120 assumption for interest rates that you're going to revert back 838 00:56:24,120 --> 00:56:27,360 to like, you know, 2% ten year and 3% mortgages. 839 00:56:27,360 --> 00:56:29,240 Like we're we're in a structurally different regime 840 00:56:29,640 --> 00:56:33,360 for for the markets and we're in a structurally different regime 841 00:56:33,360 --> 00:56:40,800 for maybe society as well. And it, it just sort of is what 842 00:56:40,800 --> 00:56:43,040 it is. If you're an investor, your job 843 00:56:43,040 --> 00:56:47,480 is not to just complain all the time saying, you know, things 844 00:56:47,480 --> 00:56:49,160 need to go back to how they used to be. 845 00:56:49,160 --> 00:56:52,080 It was so much better. I think your job is to say 846 00:56:53,080 --> 00:56:55,440 what's the environment we're operating in? 847 00:56:55,480 --> 00:56:59,120 How might it change over time? What are the implications and 848 00:56:59,120 --> 00:57:04,400 how do I position for that? Yeah, a lot of this makes me 849 00:57:04,400 --> 00:57:09,240 want to have more assets outside the US like exposure. 850 00:57:09,240 --> 00:57:12,080 I mean, I know that that may not be the right conclusion, but 851 00:57:12,080 --> 00:57:15,320 it's the one I have. I don't know about that because 852 00:57:15,320 --> 00:57:18,840 I'm not sure other Yeah. I mean, it's always good to 853 00:57:18,840 --> 00:57:23,000 diversify. But like, longer term, like we, 854 00:57:23,000 --> 00:57:25,720 we still have the world's most important companies doing the 855 00:57:25,720 --> 00:57:28,680 most important things. You just hope politics doesn't 856 00:57:28,680 --> 00:57:30,240 get in the way of it. Yeah. 857 00:57:31,000 --> 00:57:38,520 My, my guess is that economic growth is the way out of all of 858 00:57:38,520 --> 00:57:42,160 this. And if you could get just a 859 00:57:43,040 --> 00:57:48,840 stretch of three, 4% GDP growth with low inflation, you know, 860 00:57:48,880 --> 00:57:51,480 that solves a lot of problems. And if you're at the city level, 861 00:57:51,720 --> 00:57:54,680 if you can, if you're Chicago and you can pull in Austin, TX 862 00:57:55,400 --> 00:58:00,360 and, and get 5 or 6% growth for a decade plus, you know, that 863 00:58:01,120 --> 00:58:05,840 really does a better job of solving having 20% funded 864 00:58:05,840 --> 00:58:11,280 pensions than raising taxes to an astronomical level and 865 00:58:11,280 --> 00:58:13,560 pushing businesses out of the city. 866 00:58:14,000 --> 00:58:16,680 Yeah. Well, Chicago, I mean, I 867 00:58:16,680 --> 00:58:21,080 obviously have endowment bias to that city, but it always made 868 00:58:21,080 --> 00:58:24,440 sense to me because the cost of living is very palatable. 869 00:58:24,440 --> 00:58:27,640 I mean, the only, the only form of population control that I 870 00:58:27,640 --> 00:58:29,960 understand that Chicago has is the winter. 871 00:58:30,880 --> 00:58:34,760 But outside of that, outside of that, it's an incredible place. 872 00:58:34,800 --> 00:58:36,000 As long as. It was great. 873 00:58:36,200 --> 00:58:40,760 I I like it. I I'm much more involved than 874 00:58:40,760 --> 00:58:43,240 I'd ever thought I'd be in city governance. 875 00:58:44,000 --> 00:58:48,040 I I think we have a lot of great things going for us. 876 00:58:48,040 --> 00:58:50,160 It's cheaper to live here than the coasts. 877 00:58:50,920 --> 00:58:55,800 There is a diverse economy. It's got dynamic culture. 878 00:58:56,360 --> 00:59:02,760 People are nice. We also have 25% funded pensions 879 00:59:03,080 --> 00:59:09,560 and we have the highest combined property sales tax regime in the 880 00:59:09,560 --> 00:59:13,080 country. And we have a mayor who says 881 00:59:13,080 --> 00:59:19,320 that people aren't paying enough and he he wants it higher. 882 00:59:19,320 --> 00:59:22,840 Now, thankfully state law prevents him from doing that, 883 00:59:24,840 --> 00:59:30,480 but he he's not exactly the biggest selling point businesses 884 00:59:30,920 --> 00:59:33,960 in, in terms of trying to generate some economic growth. 885 00:59:34,640 --> 00:59:36,840 Yeah. Well, especially when you have 886 00:59:36,840 --> 00:59:39,320 somebody like Wisconsin not that far away. 887 00:59:40,160 --> 00:59:40,600 Right. No. 888 00:59:40,720 --> 00:59:43,680 And like, I, I don't know how much you want to delve into 889 00:59:43,680 --> 00:59:53,240 Midwest politics, but like, Illinois as a whole has probably 890 00:59:53,240 --> 00:59:56,080 the, the worst funded pension system across the country. 891 00:59:56,080 --> 00:59:59,720 Can Kentucky, the percentages are slightly worse, but 892 00:59:59,720 --> 01:00:01,920 Illinois, the numbers are astronomically worse. 893 01:00:02,160 --> 01:00:05,680 We, we have as a state like 145 billion of unfunded pension 894 01:00:05,680 --> 01:00:08,040 liabilities. And then you had Chicago having 895 01:00:08,040 --> 01:00:10,200 40 billion. The governor just signed a bill 896 01:00:10,200 --> 01:00:14,640 that will increase the benefits going to pension recipients. 897 01:00:16,360 --> 01:00:21,720 And there's no. Easy way out of it because the 898 01:00:21,720 --> 01:00:26,760 state constitution protects pension benefits, making reform 899 01:00:26,760 --> 01:00:29,920 exceedingly difficult. Yeah, Rauner tried to get it 900 01:00:29,920 --> 01:00:32,800 done, didn't he? Yeah, and he put 60. 6% of the 901 01:00:32,800 --> 01:00:35,320 votes. The the courts wouldn't allow 902 01:00:35,320 --> 01:00:39,520 it, He couldn't do it. So my own personal feeling is 903 01:00:39,520 --> 01:00:46,400 that legal protections aside, at some point, like the, the lack 904 01:00:46,400 --> 01:00:51,280 of money, the, the reality that there's no money to to pay these 905 01:00:51,280 --> 01:00:56,280 obligations down the line will matter more than the, the, the 906 01:00:56,280 --> 01:00:57,960 legal constructs. Like I'm, I'm a lawyer by 907 01:00:57,960 --> 01:00:59,280 background. I got this stuff. 908 01:01:01,000 --> 01:01:06,640 But financial reality, Trump's legal reality, I think it not, 909 01:01:06,640 --> 01:01:14,040 not in that you can ignore the law, but that it will create a 910 01:01:14,040 --> 01:01:19,200 lot of pressure down the line on these pensions to to negotiate 911 01:01:20,160 --> 01:01:25,600 some sort of haircut. Because eventually there's going 912 01:01:25,600 --> 01:01:27,400 to be popular support for reform. 913 01:01:27,400 --> 01:01:28,840 And it could be pretty draconian. 914 01:01:29,200 --> 01:01:32,760 And they're probably better off coming to the table to make an 915 01:01:32,760 --> 01:01:37,400 agreement before everyone in the entire state is so fed up with 916 01:01:37,400 --> 01:01:41,240 rising taxes to pay people who retire at 55 at 90% of their 917 01:01:41,240 --> 01:01:46,760 salary and demands of, you know, 50% haircuts. 918 01:01:46,760 --> 01:01:49,880 So I think it will get resolved somehow. 919 01:01:50,080 --> 01:01:52,840 I think the easiest way to resolve that is economic growth, 920 01:01:52,840 --> 01:01:54,960 Ian. But for the problem for Chicago 921 01:01:54,960 --> 01:01:59,840 is that, and the state of Illinois frankly, is that we're 922 01:01:59,840 --> 01:02:05,920 surrounded by other states who have a lot more probusiness 923 01:02:05,920 --> 01:02:08,800 labor laws, who have a lot more probusiness energy laws. 924 01:02:09,000 --> 01:02:11,920 You know, Illinois has 6 nuclear reactors in operation, which is 925 01:02:11,920 --> 01:02:14,280 the most in the country. But we also have a law that 926 01:02:14,280 --> 01:02:18,920 prevents any new nuclear large scale reactors from being built 927 01:02:18,920 --> 01:02:23,640 because the governor's friendly with the Sierra Club people and 928 01:02:24,400 --> 01:02:27,000 thinks that nuclear waste is going to cause, you know, 929 01:02:27,000 --> 01:02:31,240 another Chernobyl or something. Like it's crazy. 930 01:02:31,280 --> 01:02:35,080 It's very clear if you're trying to attract data center 931 01:02:35,080 --> 01:02:38,600 investment, which we are, but you're not building any more 932 01:02:38,600 --> 01:02:43,000 power generation and you're curtailing gas and coal because 933 01:02:43,000 --> 01:02:47,360 we have a 2050 net zero policy. Like at some point pretty soon 934 01:02:47,520 --> 01:02:51,800 you're gonna run out of power. And no surprise, industry is 935 01:02:51,800 --> 01:02:54,840 really reluctant to make major investments here because they 936 01:02:54,840 --> 01:02:58,520 can see 5 to 10 years down the line and understand the power 937 01:02:58,520 --> 01:03:01,280 tightness that we'll have across the state and don't want to pay 938 01:03:01,280 --> 01:03:04,320 exorbitant electricity costs. So Indiana doesn't have that 939 01:03:04,320 --> 01:03:05,760 problem. Wisconsin doesn't have that 940 01:03:05,760 --> 01:03:09,000 problem, surrounding states in the Midwest don't. 941 01:03:09,000 --> 01:03:13,200 And consequently, like we've lagged in economic growth. 942 01:03:13,280 --> 01:03:18,040 And I think over the last 10 years, Illinois grown just north 943 01:03:18,040 --> 01:03:22,840 of maybe 1% annually. During Governor Pritzker's six 944 01:03:22,840 --> 01:03:28,400 years, we've increased our GDP by about 5% versus I think with 945 01:03:28,400 --> 01:03:31,560 the last six years, the USGDP is up closer to 16%. 946 01:03:31,560 --> 01:03:37,840 So like policies matter. And again, if you, you have a 947 01:03:37,840 --> 01:03:44,280 population who is frustrated across all these various 948 01:03:44,280 --> 01:03:48,600 different things we've talked about, they're, they're going 949 01:03:48,600 --> 01:03:53,040 to, they're not going to vote for someone who is explaining 950 01:03:53,040 --> 01:03:56,440 that the, the policy insurance and outs like, like you and I 951 01:03:56,440 --> 01:04:00,160 can, you're going to vote for someone who says, you know, I'm 952 01:04:00,160 --> 01:04:04,440 going to make your life better in these three easy ways and 953 01:04:04,440 --> 01:04:11,280 everything will be fine. And it's at the federal level, 954 01:04:11,280 --> 01:04:14,400 again, like there are ways out of this that that I think aren't 955 01:04:15,680 --> 01:04:19,800 horrible longer term, but for, for States and cities, like it 956 01:04:19,800 --> 01:04:26,360 really is a 0 sum competition and you just hope that your, 957 01:04:26,360 --> 01:04:31,560 your local policy makers understand that and are more 958 01:04:31,560 --> 01:04:33,320 pragmatic than they are ideological. 959 01:04:34,360 --> 01:04:37,720 I mean, I've seen, I've seen Gavin Newsom recently talk about 960 01:04:37,720 --> 01:04:41,440 how the fact that like, you know, California is a net donor 961 01:04:41,920 --> 01:04:45,240 to the federal government. I mean, do you see any of this 962 01:04:45,240 --> 01:04:47,800 playing out where the cities say like, well, we're going to not 963 01:04:47,800 --> 01:04:49,720 send as much money to the federal government? 964 01:04:49,720 --> 01:04:53,720 Like, I don't even know how that would be possible in in in sort 965 01:04:53,720 --> 01:04:57,040 of the mechanics of it, but. Seems to me like. 966 01:04:58,160 --> 01:05:00,680 I don't think like politics. What? 967 01:05:01,440 --> 01:05:03,440 I, I don't think that's possible, but like politics is 968 01:05:03,440 --> 01:05:05,200 getting more extreme and outrageous. 969 01:05:05,320 --> 01:05:07,520 Like it's just, it's like a sports game. 970 01:05:07,600 --> 01:05:10,160 Every side. It's, I don't know if sports 971 01:05:10,160 --> 01:05:13,360 game or reality TV shows that the the better term, but like 972 01:05:14,680 --> 01:05:16,760 these people are just aren't being serious. 973 01:05:17,960 --> 01:05:21,560 And, and As for California, you know, I, I don't know how those 974 01:05:21,560 --> 01:05:26,280 figures look when you take into account disaster relief funds 975 01:05:26,280 --> 01:05:31,600 that are sent their way because they're, they're in a part of 976 01:05:31,600 --> 01:05:34,720 the country where you're prone to drought and wildfires. 977 01:05:34,720 --> 01:05:41,600 And it's my guess is it's a bit more nuanced than the governor 978 01:05:41,600 --> 01:05:46,760 there is letting on. Yeah, well, that's if I were not 979 01:05:46,760 --> 01:05:50,760 sitting in Florida, that's what I would be complaining about 980 01:05:50,760 --> 01:05:54,760 Florida, right. We have we, we, we do take a lot 981 01:05:54,760 --> 01:05:58,920 and and I think a lot of the policies down here arbitrage 982 01:05:58,920 --> 01:06:00,640 some of what we're talking about. 983 01:06:00,640 --> 01:06:04,280 And meanwhile, we're also accepting of the hurricane funds 984 01:06:04,560 --> 01:06:06,400 when we. You have natural disasters. 985 01:06:06,400 --> 01:06:10,320 We have man made ones here. Well, we might have some man 986 01:06:10,320 --> 01:06:11,640 made ones too. I thought. 987 01:06:11,960 --> 01:06:15,640 I thought something that was pretty interesting was the you 988 01:06:15,640 --> 01:06:20,320 share a map of the of the United States and it's like the 989 01:06:20,320 --> 01:06:26,480 percentage of people that are what have difficulty playing 990 01:06:26,480 --> 01:06:29,480 paying bills. And it's not shocking to me that 991 01:06:29,480 --> 01:06:33,440 the Southeast like dominates relative to the rest of the 992 01:06:33,440 --> 01:06:35,840 country. But it is sort of surprising 993 01:06:35,840 --> 01:06:40,760 that the Southeast lean so conservative given that all 994 01:06:40,760 --> 01:06:46,120 these states look like they're four to five points north of the 995 01:06:46,120 --> 01:06:48,840 general average. And I mean Mississippi and 996 01:06:48,840 --> 01:06:57,200 Alabama are like way out there. Alabama that's 49.6% and 45.5% 997 01:06:57,200 --> 01:07:01,080 respectively. Have over 1/3 of the state have 998 01:07:01,080 --> 01:07:03,280 difficulty paying bills. That's wild. 999 01:07:03,920 --> 01:07:07,840 I would guess some of that's a cultural thing. 1000 01:07:08,360 --> 01:07:10,200 Why they no doubt the way they do. 1001 01:07:10,320 --> 01:07:14,200 So some of it is, you know who who do they blame for that 1002 01:07:14,200 --> 01:07:18,920 predicament right now? Inflation really balloon, you 1003 01:07:18,920 --> 01:07:21,200 know, during the Biden administration. 1004 01:07:21,200 --> 01:07:28,880 And I think that's in large part why the 2024 election turned out 1005 01:07:28,880 --> 01:07:33,240 the way it did. I'm not surprised that part of 1006 01:07:33,240 --> 01:07:34,960 the country voted the way they did. 1007 01:07:37,680 --> 01:07:46,760 Yeah, it's and, and again, in large cities just the, the the 1008 01:07:46,760 --> 01:07:54,640 numbers are even more extreme. And there are things you could 1009 01:07:54,640 --> 01:07:58,800 do to improve that like like Ezra Klein, Derek Thompson with 1010 01:07:58,800 --> 01:08:00,520 their abundance book. I don't know if you read it, but 1011 01:08:00,520 --> 01:08:03,520 I I thought it. Was I kind of want to, I've 1012 01:08:03,520 --> 01:08:06,680 listened to a number of their interviews and I, I, I find it 1013 01:08:06,680 --> 01:08:08,840 interesting when they get talking, I'm like, yeah, but you 1014 01:08:08,840 --> 01:08:11,400 guys are kind of pointing out like the structural problems of 1015 01:08:11,400 --> 01:08:14,240 implementing your ideas. But I do want to read the book. 1016 01:08:14,760 --> 01:08:19,359 It's, you know, there are pretty basic things you you could do to 1017 01:08:19,760 --> 01:08:23,560 relieve some of these cost pressures, but for various 1018 01:08:23,560 --> 01:08:25,680 vested interest reasons, like they're really hard to do. 1019 01:08:27,600 --> 01:08:33,359 And instead of people voting for those who would implement those 1020 01:08:33,359 --> 01:08:36,359 changes, which would improve their lives, they end up voting 1021 01:08:36,359 --> 01:08:39,800 for people who double down on the way things are and are just 1022 01:08:39,800 --> 01:08:41,840 going to make things worse. You think rent control in New 1023 01:08:41,840 --> 01:08:46,600 York City is going to lead to more affordable housing? 1024 01:08:47,600 --> 01:08:53,080 Like no, we don't need to get into what the why, but like it's 1025 01:08:53,080 --> 01:08:58,439 just not how it works. Government run grocery stores. 1026 01:08:58,439 --> 01:09:00,640 You know, the mayor here wanted to do that too. 1027 01:09:01,160 --> 01:09:05,640 Good luck like. Why now, Why do you not like 1028 01:09:05,640 --> 01:09:09,040 that idea that that idea I'm a little curious about. 1029 01:09:09,040 --> 01:09:11,720 I don't think that they would out compete capitalism, but I do 1030 01:09:11,720 --> 01:09:13,920 think it would be kind of interesting to see them try. 1031 01:09:14,120 --> 01:09:16,560 I think that they would end up losing the competition. 1032 01:09:16,720 --> 01:09:20,840 If you had a very confident operator doing it, that's one 1033 01:09:20,840 --> 01:09:25,960 thing. If you have a mayor who has been 1034 01:09:26,120 --> 01:09:30,279 unable to balance the budget within like a billion dollars of 1035 01:09:30,279 --> 01:09:35,560 where it should be operating a store with two or three percent 1036 01:09:35,560 --> 01:09:38,760 margins, margins, yeah. That's like a strap, Yeah, no 1037 01:09:38,760 --> 01:09:43,200 doubt, yeah. And you're going to be sub scale 1038 01:09:43,200 --> 01:09:45,840 to acquire the stuff that you need to acquire, right like 1039 01:09:45,840 --> 01:09:48,160 that. That is a tough, tough business. 1040 01:09:49,680 --> 01:09:52,600 You know, for, for this theme, it's something that I've written 1041 01:09:52,600 --> 01:09:54,600 about over the last couple years. 1042 01:09:54,760 --> 01:09:57,720 I never really put it together. And I felt, you know, you've 1043 01:09:57,720 --> 01:10:02,040 heard people speak, I think very intelligently about it, like 1044 01:10:02,040 --> 01:10:05,880 Peter Thiel going back even in a couple years before me. 1045 01:10:08,680 --> 01:10:11,280 And it just felt like if I'm ever going to put something 1046 01:10:11,280 --> 01:10:14,000 together, now's the time because you're starting to see elections 1047 01:10:14,800 --> 01:10:17,240 turn out the way I would expect them to. 1048 01:10:18,800 --> 01:10:28,240 And I, I think this way of viewing American Society has 1049 01:10:28,240 --> 01:10:34,880 some predictive value to it, which is valuable as citizens of 1050 01:10:34,880 --> 01:10:38,960 the country. And I I think is valuable as 1051 01:10:38,960 --> 01:10:42,000 investors like it. It matters what the political 1052 01:10:42,000 --> 01:10:48,160 regime that you're investing in is it it matters if there's just 1053 01:10:48,160 --> 01:10:53,920 a fundamental level of support for just basic capitalist 1054 01:10:55,520 --> 01:11:00,960 precepts like it. We'd like to think that longer 1055 01:11:00,960 --> 01:11:05,960 term, you know, everyone will come to their senses and will 1056 01:11:05,960 --> 01:11:09,400 allow the economy to operate the way it's basically always 1057 01:11:09,400 --> 01:11:13,480 operated in the country. But, you know, ultimately 1058 01:11:14,320 --> 01:11:17,480 popular support matters. And if the system is just not 1059 01:11:17,480 --> 01:11:21,120 working for enough people, you should probably expect some 1060 01:11:21,120 --> 01:11:24,880 systemic change. I'm really focused locally on 1061 01:11:24,880 --> 01:11:29,480 making sure that the systemic changes don't wipe Chicago's 1062 01:11:29,480 --> 01:11:33,120 future off the map. Because I think just for 1063 01:11:33,120 --> 01:11:35,600 Chicago, like, we're in a really precarious position where it 1064 01:11:35,600 --> 01:11:41,120 really does matter who our next leaders are because the the 1065 01:11:41,120 --> 01:11:44,760 state of just the the economy has changed so much, where 1066 01:11:44,760 --> 01:11:46,880 businesses and people and capital are mobile. 1067 01:11:47,120 --> 01:11:50,240 And if you're not attracting it, you're really falling behind. 1068 01:11:50,920 --> 01:11:55,040 But for for the rest of the country at the federal level, 1069 01:11:56,520 --> 01:11:59,600 you know, I think you need to think through like what what 1070 01:11:59,600 --> 01:12:06,880 does the investment regime going forward look like? 1071 01:12:06,880 --> 01:12:08,680 Does it look like the one we're all accustomed to? 1072 01:12:08,680 --> 01:12:10,560 Or is it going to look dramatically different based on 1073 01:12:10,560 --> 01:12:13,200 the type of people we elect? Are we going to have a type of 1074 01:12:13,200 --> 01:12:22,960 politics that is more populist in the sense where you have one 1075 01:12:22,960 --> 01:12:26,120 person saying, you know what, like, I don't, I don't like 1076 01:12:26,120 --> 01:12:28,320 your, the, the way your sector's operating. 1077 01:12:28,320 --> 01:12:34,160 I'm going to mandate that you lower prices or, or you, you 1078 01:12:34,160 --> 01:12:36,040 know, you're subject to tariffs or, or whatever. 1079 01:12:36,040 --> 01:12:37,960 Like, it could be Trump, it could be someone else in the 1080 01:12:37,960 --> 01:12:45,440 future. The the political institutions 1081 01:12:45,440 --> 01:12:50,480 that we have are strong and the legal institutions we have are 1082 01:12:50,480 --> 01:12:54,080 strong. But there's a lot of scope for a 1083 01:12:54,080 --> 01:12:56,600 strong federal government to operate differently. 1084 01:12:56,880 --> 01:13:02,480 And I do think it matters, again, if you're a long term 1085 01:13:02,480 --> 01:13:07,480 investor thinking through the type of regime you're in, what's 1086 01:13:07,520 --> 01:13:09,560 your view? I'm not a Dumor, by the way. 1087 01:13:10,160 --> 01:13:12,240 Yeah, I know. I know you made that clear 1088 01:13:12,240 --> 01:13:14,720 before the contest, before the discussion. 1089 01:13:14,720 --> 01:13:18,280 I said, I said this is not the happiest of discussions, but 1090 01:13:18,680 --> 01:13:23,000 there could be, there could be a, you know, a, a good outcome 1091 01:13:23,000 --> 01:13:24,720 to your point, we could grow our way out of it. 1092 01:13:25,000 --> 01:13:30,240 Do you have a view on the current, you know, tariff policy 1093 01:13:30,240 --> 01:13:33,960 versus the court cases that have sort of appear to have ruled 1094 01:13:33,960 --> 01:13:38,320 against it? I. 1095 01:13:43,480 --> 01:13:50,560 And has it resolved itself? I think so, but just really 1096 01:13:50,560 --> 01:13:52,720 quickly, by way of background, I went to Harvard Law. 1097 01:13:52,720 --> 01:13:54,360 I was a corporate lawyer for a couple years. 1098 01:13:54,360 --> 01:13:57,760 I'm not a practicing lawyer. I haven't touched like a legal 1099 01:13:57,760 --> 01:14:00,480 document and. We don't have to talk about this 1100 01:14:00,480 --> 01:14:02,600 if you. Don't want to, but I do think 1101 01:14:02,600 --> 01:14:07,640 that it's pretty clear in the Constitution, like who's 1102 01:14:07,640 --> 01:14:13,000 supposed to be in charge of trade and implementing tariffs. 1103 01:14:13,000 --> 01:14:18,520 And it's not the executive they're arguing that it's, you 1104 01:14:18,520 --> 01:14:21,680 know, part of various national security exemptions. 1105 01:14:22,000 --> 01:14:29,360 I think that's questionable. But the longer this goes on, you 1106 01:14:29,360 --> 01:14:36,280 know, the more support it probably garners amongst at 1107 01:14:36,280 --> 01:14:39,840 least the Republican side. And even if courts decide that, 1108 01:14:39,840 --> 01:14:44,760 you know, this, this regime isn't workable, they'll, they'll 1109 01:14:44,760 --> 01:14:48,880 try various other exemptions or the Congress will just pass an X 1110 01:14:48,880 --> 01:14:51,000 saying, Hey, we're implementing these tariffs. 1111 01:14:51,280 --> 01:14:54,680 And if they get implemented, do you really think that the 1112 01:14:54,680 --> 01:14:58,520 Democrats are going to say, we just found some hidden source 1113 01:14:58,520 --> 01:15:02,200 of, you know, 500 billion ish in tax revenue? 1114 01:15:02,200 --> 01:15:06,480 We're, we're going to make that go away, you know, the next time 1115 01:15:06,480 --> 01:15:08,760 we're elected? No, like they they could have 1116 01:15:08,760 --> 01:15:13,040 taken off Trump's tariffs during Biden's term and they let them 1117 01:15:13,040 --> 01:15:14,520 stay. So it's. 1118 01:15:16,040 --> 01:15:19,280 I was surprised. I was surprised procedurally 1119 01:15:19,400 --> 01:15:23,520 that day one when Trump had like a mandate that he didn't ask 1120 01:15:23,520 --> 01:15:25,280 Congress for the authority to do this. 1121 01:15:25,280 --> 01:15:28,680 But I also have a theory that every president's got an 1122 01:15:28,680 --> 01:15:32,000 Achilles heel and his his, he doesn't care very much for 1123 01:15:32,000 --> 01:15:36,960 process and that may be his. It'll be interesting to watch. 1124 01:15:37,640 --> 01:15:45,200 Think that's a fair comment in, in in any event, I do think 1125 01:15:45,200 --> 01:15:51,160 we're for lack of a better term, in a bit more turbulent socio 1126 01:15:51,160 --> 01:15:53,120 economic, socio political regime. 1127 01:15:53,400 --> 01:15:57,880 And you know, we, we can decry that or we can try and figure it 1128 01:15:57,880 --> 01:16:02,480 out and think what are the ramifications for, for 1129 01:16:02,480 --> 01:16:05,000 investing. And if you care about local 1130 01:16:05,000 --> 01:16:08,880 policy to the degree I do, you know, how do you try and improve 1131 01:16:08,880 --> 01:16:11,600 the system from within? It's a lot easier to do at the 1132 01:16:11,600 --> 01:16:13,600 local level than it is at the federal level. 1133 01:16:14,280 --> 01:16:17,200 Yeah, yeah, I agree. I've I've enjoyed, I've enjoyed 1134 01:16:17,200 --> 01:16:18,800 watching your journey, getting involved. 1135 01:16:18,800 --> 01:16:22,800 So I I look forward to seeing where it where it leads to. 1136 01:16:23,920 --> 01:16:29,840 I appreciate that I I recently was invited to City Hall to 1137 01:16:30,000 --> 01:16:34,560 testify about some of our finance and credit issues, and 1138 01:16:34,560 --> 01:16:38,680 safe to say I don't think I'll be receiving a return invite now 1139 01:16:38,680 --> 01:16:40,880 that anytime people realize who I am. 1140 01:16:43,440 --> 01:16:45,040 They didn't. They didn't exactly get what 1141 01:16:45,040 --> 01:16:46,000 they wanted out of you. Huh. 1142 01:16:47,480 --> 01:16:50,280 No. Well, good for you for doing it. 1143 01:16:50,280 --> 01:16:58,240 They need to hear it. Well, if anyone's interested in 1144 01:16:58,240 --> 01:17:02,360 following up with me about any of these topics, please feel 1145 01:17:02,360 --> 01:17:04,920 free to reach out. I have a deck I can send you. 1146 01:17:04,960 --> 01:17:10,240 I can go over specifics of in terms of how we're structuring 1147 01:17:10,240 --> 01:17:15,320 portfolios around these ideas. Again, I worked with a firm 1148 01:17:15,320 --> 01:17:16,920 called Fort Sheeran and Advisors. 1149 01:17:16,920 --> 01:17:19,120 We're located outside of Chicago. 1150 01:17:20,240 --> 01:17:25,080 I've been there about 10 years, about a billion dollars of AUM 1151 01:17:25,360 --> 01:17:36,360 and we we like structuring portfolios that are for lack of 1152 01:17:36,360 --> 01:17:39,200 a better term different. You know, our clients expect us 1153 01:17:39,480 --> 01:17:44,960 to to perform well, but we really do try and work hard with 1154 01:17:45,000 --> 01:17:48,880 our clients, whether they be institutions or or family 1155 01:17:48,880 --> 01:17:55,880 offices or or individuals to create unique portfolios that 1156 01:17:58,120 --> 01:18:01,000 achieve their objectives. So, so we're not A1 size fits 1157 01:18:01,000 --> 01:18:05,920 all type of investment manager and and we're active allocators. 1158 01:18:06,960 --> 01:18:08,360 Awesome. Well, thank you very much for 1159 01:18:08,360 --> 01:18:11,200 coming on. We'll link to how to how to get 1160 01:18:11,200 --> 01:18:12,520 in touch with you in the show notes. 1161 01:18:12,520 --> 01:18:16,080 And I appreciate your time, man. Yeah, any time discussion. 1162 01:18:16,640 --> 01:18:17,920 I enjoyed it. I enjoyed it. 1163 01:18:18,080 --> 01:18:19,160 Have a good one Have. A good one. 1164 01:18:19,280 --> 01:18:20,840 Thanks so much. Take care. 1165 01:18:47,480 --> 01:19:20,920 None. Music.