The Higher Standard

In light of the recent midterm elections and the seemingly endless wave of negative economic news, Chris and Saied have chosen to turn today's episode of The Higher Standard into a more educational exercise, cutting through the rhetoric and spin to help you become more informed.

In today's episode Chris and Saied discuss the recent wave of layoffs from companies across the board, and attempt to determine when those layoffs may begin to slow as we enter the holiday season and year-end earnings reports.

They offer some insights as to why so many new businesses struggle or even fail in their early days, and why entrepreneurs often get in their own way when running their business.

Chris and Saied look at the process of trademarking your business identity, including the length of time it takes for a trademark application, and debunking some of the myths and misconceptions surrounding the process.

They also discuss different types of corporations and partnerships, such as limited or general partnerships, C-corps LLCs. They explore each type and offer some thoughts on the benefits and drawbacks of each type.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• Why the best time to start a business may be during a recession.
• The problems Chris sees on the horizon for the hospitality space.
• The concept of AirBnB arbitrage and the dangers of fake gurus.
• The problem with using hard money loans for flip opportunities.
• And so much more...

Stripe is laying off 14% of its staff. Lyft has cut 13% of its workforce, and Opendoor has slashed its team by 18% after posting a $1 billion dollar loss. Bad news for those companies, but they aren't alone. Many tech companies have been announcing layoffs and hiring freezes while moving to cut costs. Amazon, Google's parent company Alphabet and Facebook's owner Meta have all taken steps to rein in expenses. Companies including Netflix, Spotify, Coinbase and Shopify have also announced layoffs.

In today's episode of The Higher Standard, Chris and Saied dive into this new economic reality and offer some insights about where it came from, as well as where it may be leading.

They discuss Dave Ramsey's inexplicable shift in rhetoric from "home prices are not going down" to, "house prices are never going down" despite the fact that they are, in fact, going down as we speak.

Chris and Saied look at Nobel Prize-winning economist Milton Friedman's tremendously accurate (if slightly disturbing) analogy comparing inflation to alcoholism.

They also discuss why, with hiring on track for its second-strongest year since 1940, the economy looks healthy - however, appearances can be deceiving, and that can lead to trouble.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• Why tech companies are posting losses and shedding staff at an increasingly alarming rate.
• Why a letter to Fed Chair Jerome Powell from a coalition of Democratic lawmakers raising concerns warning of impending job losses as a result of the Fed's tighter monetary policy is going to accomplish nothing.
• The effects of mortgage applications falling 42% compared to the same time last year and what that means for lenders such as Wells Fargo.
• The reasons why so many very smart people were in denial for so long about the Fed's attempts to fight inflation (and why some still are.)
• And so much more...

Resources:

"Democrats slam 'dangerous' Fed rate hikes, warning of widespread job losses" (article from Fox News)

"All the economic experts are at a loss on the eve of the midterms: ‘The data is all over the map’" (article from Forbes)

"Stocks Sink as Hawkish Bets Revive Recession Fears: Markets Wrap" (article from Yahoo! Finance)

"Student debt headaches are about to return for millions of people despite Biden's plans" (Businessweek via Instagram)

"Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse" (article from CNBC)

"Opendoor slashes 18% of staff" (TheRealDeal via Instagram)

"Opendoor posts nearly $1 billion loss" (TheRealDeal viz Instagram)

"Opendoor lays off 18% of its workers in the wake of housing demand slowing down" (Businessweek via Instagram)

"Job openings surged in September despite Fed efforts to cool labor market" (article from CNBC)

"Musk Plans To Layoff 50% Of Twitter’s Workforce Ahead Of Verification Fee Roll Out Next Week, Reports Say" (article from Forbes)

"Stripe lays off 14% of workers" (article from CNBC)

"Lyft cuts 13% of its workforce" (article from CNBC)

"Labor costs show slower rise, while trade deficit widens and jobless claims nudge lower" (article from CNBC)

"Private payrolls rose 239,000 in October, better than expected, while wages increased 7.7%, ADP says" (article from CNBC)

Did you know that 45 years after his death, the King of Rock N' Roll is still an economic powerhouse? Elvis’ estate generated $110 million in income as of 2022. The lion’s share was made from box office and merchandise sales at Graceland, Presley’s Memphis home, while a paltry $5 million of that came from rights for 'Elvis,' the Baz Luhrmann-directed biopic.

In today's episode of The Higher Standard, Chris and Saied discuss a Forbes article on the the highest-paid (dead) celebrities of 2022. They also look at crashing house prices, inflation and other economic matters - things that affect those of us still among the living.

They discuss a recent report from the National Association of Realtors indicating that pending home sales suffered a worse decline than expected from August to September, as mortgage rates surged. Economists had predicted a 4% drop, however sales were down 31% year over year.

Chris and Saied look at recent comments from Janet Yellen, 15th chair for the Federal Reserve from 2014 to 2018, who admitted she had been wrong about the path inflation would take. Her comments are particularly surprising considering how rare it is for someone from Washington to admit they were wrong in such an honest, public way.

They also discuss a report from the Bureau of Economic Analysis stating that the core personal consumption expenditures price index - an economic gauge that the Federal Reserve follows closely - increased 0.5% in September from the previous month and 5.1% from a year ago.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• The reasons why pending home sales fell 10% in September, and why the drop is much worse than expected.
• Credit Suisse's bold new restructuring plan designed to begin repairing their reputation.
• Why the Federal Reserve really doesn't care about the economy.
• Elon Musk's plans to make Twitter's 'blue checkmark' more accessible to everyone.
• And so much more...

Resources:

Adam Schafer's Instagram

"Pending home sales fell 10% in September, much worse than expected" (article from CNBC)

"Homebuilders say they’re on the edge of a steeper downturn as buyers pull back" (article from CNBC)

"Moody’s: Home prices to crash 20% in Nashville—here’s the revised forecast for the nation’s 322 largest housing markets" (article from Fortune)

"Janet Yellen said she doesn’t see signs of a recession, but Nobel Laureate Paul Krugman argues the worst is yet to come" (article from Fortune)

Janet Yellen (via Wikipedia)

"Yellen's words on inflation won't end America's price hikes" (article from CNN)

"How Did They Get Inflation So Wrong?" (article from The Atlantic)

"The Highest-Paid Dead Celebrities Of 2022—A Writer Earns Half-A-Billion From The Great Beyond" (article from Forbes)

"These Are the World’s Richest Families" (article from Bloomberg)

"Key inflation gauge for the Fed rose 0.5% in September, in line with expectations" (article from CNBC)

Finally, some good news? Maybe. The Bureau of Economic Analysis reported on Thursday that the U.S. economy posted its first period of positive growth for 2022 in the third quarter, which may ease recession fears - at least temporarily. GDP from July through September increased at a 2.6% annualized pace for the period. That was above the Dow Jones forecast for 2.3%.

In today's episode of The Higher Standard, Chris and Saied explain why this so-called good news is really anything but, and what that means for the economy and the Fed's attempts to fight inflation.

They discuss why home prices are higher than they were a year ago, but gains are shrinking at the fastest pace on record, according to a report from S&P Case-Shiller.

Chris and Saied look at a report from Barron's stating that the yield on the 3-month Treasury has surpassed that of the 10-Year Treasury. An inversion like that is considered very rare, but it suggests that a recession is on the way or possibly even here already.

They also discuss comments from President Biden concerning actions being taken to eliminate junk fees - hidden fees found in many services from internet access to hotels. He claims that it will save Americans billions.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• Why people are getting confused by the GDP numbers and how they indicate the state of the economy.
• Why mortgage rates have topped 7% for the first time since 2002, and why we'll likely see 8% before the year is out.
• What an 'inverted yield curve' is, and why some believe it's an indicator of an incoming recession.
• Why President Biden's initiative to eliminate 'junk fees' sounds good, but is also a little too ambiguous to take seriously.
• And so much more...

Resources:

"U.S. GDP accelerated at 2.6% pace in Q3, better than expected as growth turns positive" (article from CNBC)

"Mortgage rates top 7% for the first time since 2002, chilling L.A. housing market" (article from the Los Angeles Times)

"The Recession Signal That Really Counts Just Flashed Bright Red" (article from Barron's)

"Zillow cuts 300 jobs, citing pivot to tech" (The Real Deal via Instagram)

"Home prices cooled at a record pace in August, S&P Case-Shiller says" (article from CNBC)

"Powell again is facing political pressure as worries mount over the economy" (article from CNBC)

We're headed for a financial crisis that's even worse than the 1970's, says 'Dr. Doom.' No, not the comic book character, economist Nouriel Roubini, known for his bearish prognostications. He believes that due to a rolling series of supply shocks, we'll have a severe downturn before we get relief from inflation.

In today's episode of The Higher Standard, Chris and Saied dive into this dire prediction and offer some of their own thoughts as well.

They discuss the debt crisis, which they refer to as an 'affordability crisis,' how it will continue to affect us all as consumers as we move deeper into the recession.

Chris and Saied look at a chart from Fortune magazine showing plunging house prices in 51 out of 60 major cities, such as San Jose, Boston and Seattle, with the west being hit hardest of all.

They discuss why the belief that rates will go down as fast as they went up is flawed, owing to banks attempting to protect their returns as rates drop.

Chris and Saied also look at a recent article from Bloomberg stating that rent gains are finally starting to slow in many parts of the US, cooling a years-long boom that sapped affordability from coast to coast. In other words, demand from tenants is suddenly sinking.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• 'Dr. Doom's prediction of the mother of all debt crises.
• Why mortgage bankers expect rates to drop to 5.4% in 2023.
• The reasons why student debt relief is not ideal for everyone.
• Why Intel's cost-cutting measures should help boost their stock price, at least in the short term.
• And so much more...

Resources:

"'Dr. Doom predicts a financial crisis that's 'worse' than the 1970's" (Bloomberg Business via Instagram)

"Housing: Existing home sales drop for 8th straight month in September" (article from Yahoo! Money)

"Housing’s stunning downfall in one chart: Prices have plunged in 51 of these 60 cities, and there’s much further to fall" (article from Fortune)

"Mortgage bankers expect rates to drop to 5.4% in 2023. Here's what means for home prices" (article from MarketWatch)

"U.S. weekly jobless claims fall" (article from Reuters)

"Starter Homes Are Only Affordable in Four Cities" (article from The Street)

A looming recession isn't slowing down luxury goods sales" (article from Business Week)

"Intel Layoffs: Will Intel Stock Keep Going Up By Cutting Costs?" (article from Forbes)

"Renters Hit Breaking Point in a Sudden Reversal for Landlords" (article from Bloomberg)

"Apple Hikes Music and TV+ Prices in First Increases Since Launch" (article from Bloomberg)

The seemingly inexorable march deeper into recession continues this week with more bad economic news from all sides. Bloomberg is reporting that, approximately 38% of workers have looked for a second job, while an additional 14% have plans to do so, according to a survey of more than 1,000 full-time US employees by Qualtrics. The combination of stubbornly high inflation and the approach of salary increase season will likely see this number increase.

In today's episode of The Higher Standard, Chris and Saied dive into this news along with many other topics in order to help you make sense of the immense amount of information (and disinformation) found out there.

They discuss a report from The Street indicating that 30-year fixed mortgage rates hit 7.22%, the highest in 20 years. However, that number has since jumped again to an average of 7.646%, making the prediction of rates rising to up to eight and a half percent all the more likely unless something changes.

Chris and Saied look at recent comments by JPMorgan Chase CEO Jamie Dimon, who said that investors should expect more blowups after a crash in U.K. government bonds last month nearly caused the collapse of hundreds of that country’s pension funds. He went on to suggest that markets will continue to be volatile so long as the Federal Reserve is boosting rates and shrinking its massive balance sheet.

They look at the IRS' announcement of higher federal tax brackets for 2023 to adjust for inflation. The standard deduction is increasing to $27,700 for married couples filing together and $13,850 for single taxpayers. There are also changes to the alternative minimum tax, estate tax exemption, earned income tax credit and flexible spending account limits.

Chris and Saied also discuss recent comments from Amazon founder Jeff Bezos, who has become the latest corporate leader to warn about the state of the economy, cautioning that rougher times are likely ahead, and why his comments feel like a weather forecast delivered two days late.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• What's happening to 30-year fixed mortgage rates, as well as the likelihood we could see 8.5%.
• Jamie Dimon's warning of more blowups ahead following the UK's government bond crash.
• The IRS' new tax bracket adjustments for 2023, and how that could affect you.
• Why Jeff Bezos' warning of economic troubles ahead is not really news (though it's being presented as such.)
• And so much more...

Resources:

"Inflation is Forcing Over Half of Americans to Consider Second Jobs" (Bloomberg Business via Instagram)

"US bank earnings revealed ominous clues about the future of the housing market" (article from CNBC Business)

"Why job openings data might not mean what we think it means" (article from Marketplace)

"IRS: Here are the new income tax brackets for 2023" (article from CNBC)

"Mortgage demand drops to a 25-year low, as interest rates climb" (article from CNBC)

"Jeff Bezos is the latest to warn on the economy, saying it’s time to ‘batten down the hatches’" (article from CNBC)

"Jamie Dimon says expect ‘other surprises’ from choppy markets after U.K. pensions nearly imploded" (article from CNBC)

This week several reports are being delivered, including the New York Fed's Empire State Manufacturing Survey, the National Association of Homebuilder's Housing Market Index, the Fed's industrial production data for September and the latest Beige Book on current economic conditions among its 12 districts, as well as the Census Bureau's new residential construction data for September. The predictions for these reports range from 'no change' to 'really bad.'

In today's episode of The Higher Standard, Chris and Saied discuss the one report that has already been released, the Federal Reserve Bank of New York's Empire State Manufacturing Survey, and the 'modest decline' being seen in manufacturing in the state.

They discuss a recent presentation by National Association of Realtors chief economist Lawrence Yun, who predicted that interest rates could be on their way to 8.5% if they pass a threshold of 7%, basing his forecast on key levels of resistance borrowing costs will face after a key inflation indicator hit a 40-year high.

Chris and Saied look at Bloomberg's prediction that a US recession is effectively certain in the next 12 months, representing a blow to President Joe Biden’s economic messaging ahead of the November midterms.

They discuss a new House Prices to National Average Wage Index created by CalculatedRisk to address the difficulties of comparing the ratio of house prices to incomes, when most income data is released with a significant lag.

Chris and Saied also explore Zillow's bold (and deeply flawed) prediction that the so-called pandemic housing boom would see U.S. home prices soar another 17.8% between February 2022 and February 2023.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• Why NAR's chief economist Lawrence Yun's prediction that interest rates could be on their way to 8.5% if they pass a threshold of 7% is more a statement of the obvious than a real look at the future.
• Bloomberg's prediction that a US recession is basically a done deal within the next 12 months, which is not what President Biden wants to hear this close to the midterms.
• The insights gained from CalculatdRisk's new House Prices to National Average Wage Index.
• Zillow's discombobulated reporting concerning house prices, and why there is likely a specific reason behind it.
• And so much more...

Resources:

"Forecast for US Recession Within Year Hits 100% in Blow to Biden" (article from Bloomberg)

"Mortgage rates could continue rise to 8.5%: NAR" (article from TheRealDeal)

"Stocks Poised to Open Higher on Monday" (article from Barron's)

"House Prices to National Average Wage Index" (article from CalculatedRisk)

"Empire State Manufacturing Survey" (article from the New York Federal Reserve)

"Where home prices in your local housing market are headed in 2023, according to Zillow’s revised forecast" (article from Fortune)

"Latest US inflation data raises questions about Fed’s interest rate hikes" (article from The Guardian)

"The newest Nobel-winning economist lays out 2 reasons the US is 'really exposed' to a financial crisis" (article from Insider)

"Cathie Wood's Ark Sends Open Letter to the Fed" (The Street via Instagram)

"Consumer spending was flat in September and below expectations as inflation takes toll" (article from CNBC)

"It’s bad enough mortgage rates are over 7% – now it’s harder to qualify for a home loan" (article from CNBC)

The Consumer Price Index (CPI) was released on Thursday, and while the increases are not large, they do fall in line with predictions. In June, the CPI was 9.1%, in July it dropped slightly to 8.5%, and in August 8.3%. Then in September, it was 8.2%. This doesn't seem bad, until you realize that in the last 12 months, gasoline has risen by 18.2%, household energy by 20.8% and airfare by an eye-watering 42.9%

In today's episode of The Higher Standard, Chris and Saied do a deep dive into these CPI numbers and what they mean for the ongoing fight against inflation.

They discuss the thinking from various pundits and talking heads, who mistakenly believe they recognize the mistakes being made by the Fed as well as what it should and should not do.

Chris and Saied look at recent comments by Ray Dalio, the founder, Co-Chairman and Co-Chief Investment Officer of Bridgewater Associates, in which he has warned of a "perfect storm" that will spread economic pain as the U.S. Federal Reserve raises interest rates. He also said that government stimulus programs during the pandemic have created a bubble.

They discuss a recent article from Forbes reporting that the International Monetary Fund (IMF) downgraded its forecast for the global economy next year and warned inflation will be worse than previously expected due largely to the ongoing disruptions spurred by the war on Ukraine.

Chris and Saied also explore another article claiming that, as home sales fall to the lowest level in years, a rash of industries tied to the housing market are starting to show signs of deterioration, with home builders, appliance makers and some retailers among those likely to take the biggest hit.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• The most recent PPI and CPI numbers and what that means for consumers in light of rising inflation.
• Why, for the Fed, the cost of doing too little to curb inflation outweighs the cost of doing too much.
• Why the IMF has downgraded its forecast for the global economy next year and what effects that will bring.
• What’s driving the current housing market correction in several major markets.
• And so much more...

Resources:

"Where Inflation Is... and Isn't" (Yahoo! Finance via Instagram)

"PepsiCo Raises Forecasts After Q3 Boosted by Higher Prices" (article from US News)

"Bridgewater's Dalio warns of a 'perfect storm' for economy" (article from Reuters)

"‘Ridiculously stupid’ economic policies have the U.S. hurtling toward a ‘perfect storm’ of economic pain, Ray Dalio says" (article from Fortune)

"Housing Market ‘Contagion’: Collapse Threatens Spillover Effects In These Major Industries" (article from Forbes)

"Home prices are falling fastest in these 10 U.S. cities" (article from CBS News)

"MBA: Mortgage Credit Availability was Never Excessive During the Recent Housing Boom" (article from CalculatedRISK)

"‘Worst Is Yet To Come’: IMF Cuts Economic Outlook And Warns Global Inflation Still Hasn’t Peaked" (article from Forbes)

"S.Korea delivers another big hike but offers dovish hints" (article from Reuters)

"Highest Availability Ever Reported for LA Office Space" (The Real Deal via Instagram)

"Strikes, possible blackouts and a plunging currency: Brits are being hit by a wave of bad news" (article from CNBC)

"It’s bad enough mortgage rates are over 7% – now it’s harder to qualify for a home loan" (article from CNBC)

"Wholesale prices rose 0.4% in September, more than expected as inflation persists" (article from CNBC)

"Inflation increased 0.4% in September, more than expected despite rate hikes" (article from CNBC)

"Social Security recipients get 8.7% cost-of-living increase, the highest in more than 40 years" (article from Invest Ahead)

On Monday, at JPMorgan Chase's Techstars conference in London, CEO Jamie Dimon said that a “very, very serious” mix of headwinds was likely to tip both the U.S. and global economy into recession by the middle of next year. Dimon said the U.S. economy was “actually still doing well” at present and consumers were likely to be in better shape compared with the 2008 global financial crisis. “But you can’t talk about the economy without talking about stuff in the future — and this is serious stuff.”

In today's episode of The Higher Standard, Chris and Saied take a closer look at this "serious stuff," as well as Dimon's warning that we could be looking at a recession in 6 to 9 months.

They discuss the recent Producer Price Index (PPI) report, including what exactly it is and how it acts as a kind of tertiary metric that provides insight into how inflation is likely to be reported.

Chris and Saied look at an open letter written by Cathie Wood, founder, CEO and CIO of Ark Invest in which she says that the Federal Reserve has been making a big mistake by over-hiking rates and using lagging indicators to make their decisions.

They discuss a recent article claiming that an NFT that YouTuber and social media personality Logan Paul purchased for $600,000 is now worth... $10.

Chris and Saied also explore the dichotomy between mortgage rates and homebuyer hesitation. The interest rate on the most popular home loan in America has fallen for the first time in seven weeks. Yet even with the decline, the average 30-year fixed mortgage rate is still more than double what it was last year.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• What exactly the PPI report is and how it acts as a kind of tertiary metric that provides insight into how inflation will be reported.
• Cathie Wood's open letter to the Fed criticizing ‘mistakes’ it has made with excessive rate increases and the reliance on lagging indicators.
• Logan Paul's $600,000 NFT investment, whose value has taken a nosedive to the tune of roughly $599,990.
• The reasons why mortgage rates are down for the first time in nearly two months, but hesitation remains high.
• And so much more...

Resources:

"The 15 Largest Banks in America" (article from Bankrate)

"Mortgage rates step back from the brink, but hesitation is still at a 25-year high" (article from MoneyWise)

"The NFT Logan Paul purchased for over 600K is now worth $10" (Jungleboys via Instagram)

"What Is Logan Paul’s $623,000 Azuki NFT Worth Today?" (article from BeInCrypto)

"Cathie Wood Warns Fed of Policy Error as Rate Hikes Hit ARK ETFs" (article from Bloomberg)

"‘This is serious’: JPMorgan’s Jamie Dimon warns U.S. likely to tip into recession in 6 to 9 months" (article from CNBC)

According to a report from CNN Business, the nation’s total public debt outstanding closed at $31.1 trillion on Monday, according to Treasury Department data published Tuesday. This particular milestone comes at a time of historically high inflation, rising interest rates and growing economic uncertainty. Incredibly, outstanding debt has climbed nearly $8 trillion since the beginning of 2020, and it's increased by $1 trillion since February of 2022.

In today's episode of The Higher Standard, Chris and Saied take a deeper look into this news and the reasons behind it (looking at you, Inflation Reduction Act).

They discuss the reasons why you shouldn’t buy real estate in some major markets unless you see a 10% drop in value from where you were.

Chris and Saied look at the issue of real estate numbers, such as home values, mortgage application volume, etc. and why the amount of interpretation involved means that the trends become more important than the specific numbers.

They also discuss an article stating that a recent report from KPMG shows that over 50% of American CEOs are considering workforce reductions over the next six months, possibly as a response to the increase of remote workers during the pandemic.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• Why the Inflation Reduction Act is one of the key factors that caused national debt to jump by over a trillion dollars in the last eight months.
• The reasons why homebuyers should hesitate to purchase in major markets, unless they see a 10% drop in value from where they were.
• Why the amount of interpretation involved in real estate market data aggregation means that trends become more useful than the specific numbers.
• How many companies are responding to the hybrid workforce that was born from the pandemic.
• And so much more...

Resources:

"Higher Interest Rates Will Raise Interest Costs on the National Debt" (article from Peter G. Peterson Foundation)

"U.S. Apartment Demand Plunges in 3rd Quarter as New Leasing Stalls More than Expected" (article from RealPage Analytics)

"US home prices are now posting their biggest monthly drops since 2009" (Bloomberg BusinessWeek via Instagram)

"High mortgage rates, tight supply and economic uncertainty: Here’s what’s happening with home prices" (article from CNBC)

"Mortgage applications plummet 14% as higher interest rates and Hurricane Ian crush demand" (article from CNBC)

"U.S. job openings drop sharply, labor market starting to loosen" (article from Reuters)

"Fed’s Bostic wants to pause after December rate hike" (article from MarketWatch)

"Over 50% of CEOs say they’re considering cutting jobs over the next 6 months — and remote workers may be the first go to" (article from MarketWatch)