The 10 Year Note Just Hit This Level: What It Means for Economy

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1:00What is going to break in the economy, man? I can't believe you've been calling it the 10-year note, 30-year mortgages, the bond market, the Fed. What the heck is going on, Michael? Well, it's interesting because last time we spoke, I'd read an article that made reference to the last 16 times the 10-year note rose 50 basis points above the 200 day moving average all the way back to 1970. And I didn't really have any context about what those things were. Well, earlier this week, I think it was on Wednesday. I gave everybody the entire list. From October 1974 to 2020, 23, there were 16 times that this happened. And every single time. So it is a perfect score. Something broke. Sometimes it was big banks failing. Sometimes like Orange County. Remember when Orange County went bankrupt, that was one of them 1987 flash crash tech bubble, you know, GFC, S&P bear market, SNL crisis.

2:05All of these could be blamed back to a consistent theme of the 10-year note rising rapidly, rising in a significant matter over 50 basis points above its 200 day moving average, which means it's moving quickly. And significantly. And it just happened for the 17th time. So I think it's pretty certain something is going to break. We may not see it coming, right? It could be another flash crash like 1987. It could be banks. It could be emerging markets. It could be the, you know, one of the times with the was Southeast Asia another time was Mexico. It could hurt currencies. I think it's, I think it's fair to say tie something big is going to break. I said this last week. You got my attention. You got my attention, man. You got my attention. I am, I said this jokingly. I said I'm now I'm scared, Michael.

3:08I'm, yeah, but I'm used to being scared now. So I'm used to know it's good though. I mean, hey, keep your head down, keep working. Keep your head down, keep working. We'll talk more about how to adapt and what to do. Let's talk about the 10-year note. What a wild ride. The 10-year. When we're recording this Wednesday, I have some travel this week, but this will drop Friday. So who knows where the 10-year note will be by Friday morning when this goes live. But as of Wednesday recording it hit 5-3. Yeah, not 5.03. It hit 5.3. Yeah. So what does it mean? It means in like eight days, it's gone up 30 basis points. And I talked to Taylor from Life Goal Investments. He's like Michael. That's like a 10 to 12% move in the stock market. This move is violent. It is sudden. And say that again about the stock market because I want everybody to really hear this just like hit that. I asked Taylor to give me a comparison to the S&P 500.

4:08So when we hear the bond movement move 30 basis points, only the geekiest of all of us, maybe not even myself understand really what that means. But if you translate that violent move to the stock market, Taylor is like that's a 10 to 12% move. Down. Right. Because of interest rates go up, bonds go down. Right. It's an inverse relationship. So he's like this move is significant. It's sudden. It's almost unprecedented. Again, it happens 16 times before, which over the course of 75 years is not very often. So he's also in Taylor did some research and he found these 16 instances. If you want to see the full list, look at him on Instagram. It's Life Goal Investments. He has a full post on the 16 occurrences. So yeah, dude, something's going to break Instagram Life Goal Investments. Life goal investments, life goal investments on Instagram Taylor. Will something break last time talk about last time it was the banks. It was like first Republic. It was Silicon Valley bank.

5:13Talk about like mark to market. Now that people have assets, they're probably impaired. Worthless. I was going to say zero. Yeah. Yeah. You know, one of the things that I think again in hindsight that will go down is multi family. I'm hearing from more and more people that their lenders are not extending and pretending anymore. There was a hope. You know, the Fed was supposed to cut three times in 2026 and so far they've raised once and likely to do that again. Okay. And that's impacting the short end. And they're not playing around. So they're going to be foreclosing in greater numbers. They're going to be marked to market and greater numbers. And I think multi family will be, you know, there was this whole survive to 25, you know, stand to 26. And I think there's going to be a lot of recognized pain and losses in 27. It also could be the AI trade. I mean, the AI trade. I mean, there's, you know, anthropics, you know, going public in their S1, I think was leaked.

6:23And it doesn't look great. It's like 47 billion in revenue and 200 billion in expenses or something like that. So, you know, and they owe all of that in 2027. So it's like that's a lot of short term debt. So I don't know. This is, it certainly got me on the lookout for what's going to break. We once so last week I text you, we didn't, we've never talked about it on the show. I had been, I tried to not read anything because I just figure I'll get scared on Friday and then by, you know, I Monday, I'll sober up and I'll be, you know, like to work, act to work and whatever. But point being is that I try not to read the headlines. I try not to read the news. I only want to listen to what, and again, only because you summarize 15 hours into 30 minutes or 20 hours and 50 years of experience. So one of the things I read, it talked about the AI bubble and I text you and said, everybody talks about there's a bubble for sure. And some companies will win most will not.

7:31And then I use the baseball analogy saying, you know, what any are we in? Are we in the ninth inning? Are we in the first inning? Have we still not even thrown the first pitch? Where are we in the AI bubble? It just is a guess and I want to hold it. When you, I also read this week, again, I'm not looking for the news, but it just popped up and it said it talked about corporate bonds and it talked about this massive amount that in the topic, I think what you led to what you just said, that's the corporate bonds that are coming due in 2027 that also ties to the bond market. A lot of people just think stocks. It's just stocks, trades and venture capital and all private equity. But there's a whole entire bond market that's tied to AI. Can you, this is not in the show notes, by the way, this is tie just trying to like figure out where what Michael's heads at. Yeah. When we talk about something, we'll break, talk about the AI, what any nor we in, or just your best guest, to me, talk a little bit more about those corporate bonds.

8:33So I've been, I've been thinking about this long. I mean, I've been thinking about private credit for a year. And it's becoming a problem. We're still seeing funds like Apollo and other gate exits, which always tells you their stress. I think Apollo had 14% request for redemptions and they they gated it at 5%. So that's still going on in private credit. And there are others. Apollo is the only one I remember. But I think what's interesting here, Michael Burry, who's a noted bear, Michael Burry is always scared of his shadow. He's always thinks the next crash is coming. But Michael Burry put up some significant dollars here recently about the AI bubble going short. And he actually repositioned it to even go shorter. So he thinks the AI bubble is getting really close based on his bets with shorts and puts and things of that nature. I, I always think it could go on longer than is logical. So I think making a short term bet short term being, you know, rest of 2026, you know, we're in Q4 now.

9:37So, you know, there's three months left to go. I think it survives. I think it survives. Anthropic going public. I think anthropic does everything they can to go public. They need the money. They need to sucker retail investors. And, you know, that's what they're going to do. They're going to suck or retail out of $2 trillion. And they're going to smile all the way to the bank. But I don't know. I think I think by the second half or, yeah, so I think by July of 27, so call that nine months from today. You're going to start to see the AI pain to your point. There will be some massive winners. And there'll be lots of losers. So I think I think it's less than a year away. Okay, well, that's good. That's refreshing. I'm glad it's not happening in the next. So, okay, we'll keep our Christmas plans. And yeah, you can keep it. Okay. All right. Okay. There will be a Halloween candy. Yeah, you could definitely have Halloween. I'm going to improve my wife to buy the bag of. She get the whole big pound. Costco. Yeah. Okay. All right. Cool. I was worried about Halloween. All right. So let's talk about PCE.

10:43Let's talk about Joel. Let's what's going on with PC. Let's talk about inflation. Oh, no, oh, no. Yeah. How do I say this without? Oh, shit. I never see you ever pausing. I've never heard you cough in six years. What the hell? So you know how people blame the government for always changing inflation. Guess what happened on Wednesday. Okay. They changed the calculation. I might have big pause. Yeah. So they they changed and I've done some research, right? Because you know, that's what I do. I enjoy reading this puzzle. So specifically inside PCE, they changed three big things. There there might be others, but these are the three things that I caught. Legal services, computer software and accessories and portfolio management slash investment advice. Okay. So why is it important to understand the model changed? Well, PCE this week, if you don't know that came out really good.

11:52PCE headline last month was three seven. It came in at three four core was even better. It was three three now it's three. Wow. So if you're hungry to say inflation is falling, the Fed should get out of the way yada yada yada. This number at the headline is amazing for you. However, if you dig in and understand that simply the model changed. Guaranteed point two of the point three. It's not that rosy a picture. Right. Two thirds of the drop was the model being changed. That has nothing to do with inflation getting better. That's the model changing. Did we break trend though? I mean, because would you technically say that I mean based on the report you're saying it may not be as accurate because they changed the model. It's a it's a best a dirty number.

12:52It's a it's not a number that you could I would have any faith in. I can't. The bond market won't really well, you could look at you look at Wednesdays go back to the chart because again, this will report Friday. Look at the 10 year note Friday. It opened lower. So the 10 year note rate open lower by noon. It was screaming higher. Okay. People were calling bullshit on this number. Got it. And we're recording this just that we're recording this at 1 p.m. It's 114 p.m. on Wednesday. You're going to watch this video on Friday because Michael traveling. And we'll have close a market here in another 15 minutes. So I'm going to turn on CNBC. I guess there's nothing. I guess I'm already scared with what the heck. Why not? Okay. All right. So let's keep going. Wow. Okay. Lot going on. Let's talk about Joltz. The jobs. What's going on with Joltz? So this week is big. We get three reports. We have two of them now. So we'll talk about actuals and then we'll paint the picture for Friday.

13:55Because again, we're recording Wednesday and that number drops Friday morning. So we got Joltz. What is Joltz? To me, it's a sign of businesses being aggressive or pulling back. It's job openings. And you know, we were sitting at 7.3 expectation, 7.3 million expectations were for a small drop to 7.2. It came in below 7.1. Like it came in at 7.069 or something like that. So below 7.1. So significant mist to the downside, which frankly makes sense. Oils up, diesels up, rates are up, barring costs are up. It's all bad. So Joltz, very bad significant disappointment, ugly. Now ADP, private payroll came out this morning Wednesday, the day we're recording. It was a big beat last month was 38,000. It was expected to be 68,000. Came in at 90,000. So again, you know, a big beat to the upside. So we got two dirty numbers or we got two different stories.

15:04The Joltz report saying businesses are slowing. ADP report saying business hiring is picking up significantly. So the biggest number of the week is Friday. Again, it's BLS expectations are for 84,000. That would be a significant drop from last month's 162. And it Friday is a big number Friday has the potential to guarantee a rate hike or make it a coin toss. What does that look like? Well, again, the expectations are 84. Anything over 100,000. You can pretty much guarantee a rate hike. It's kind of the good news is bad news. If we get a significant revision to last month, so 162 becomes 62. So we lose 100,000. And this month comes in at 37. So a miss to the downside. Yeah. A rate hike is certainly not guaranteed in October. But probably still likely in my opinion. So the BLS number is important CPI the following week is going to be really important.

16:11But yeah, the jobs numbers important. There's, you know, there's lots of science tie surprisingly. The economy is picking up and we'll talk about some of that later when we talk about GDP. But it's pretty wild to think about how good the economy is doing at least at the macro. So you know, $9 diesel and 7.5% mortgage rates. It's crazy. Six and a quarter unleaded just right then the unleaded is like six and a quarter. But I was like, what's that? Yeah. Geez, geez. Okay. All right. Anything else on ADP or anything else on BLS and just. Will you will you do can you do from your phone just do a quick little. Yeah, I probably will do something on BLS. Yeah, I'll probably do something Friday morning. I should. Okay. I want to record this so I know there's something there. Yeah. No, that would be good. Okay. So also folks look for Michael or some day at some point today when you're watching this on Friday. Post something even just a little short a little 30 second snippet even on IG or whatever. So. Okay. Love it. Let's talk about savings rate.

17:18Yeah. Again, I'm always trying to figure out what when I say mom and dad, I think the consumer right what's going on with mom and dad and on Wednesday. We had a pretty horrible print on savings, which kind of makes sense. Everything's unaffordable unleaded gas diesel. You know, credit card rates, you know, all this shit's getting more expensive and saving rates is that like a five year low. It's like 4%. And that's, you know, to me, that's the cushion. How much cushion does the average person have? And if savings rates are collapsing at or near the bottom. That does not give me the warm and fuzzies that, you know, we could survive a small blip. So just another, I'll call that a yellow flag. But I'm definitely watching the American consumer in, you know, savings rate. So it's it's at a cycle low. Here we go. Pretty wild. So as we're finishing, we're recording this on the last day of September, last day of the quarter. Let's talk about Q2, Q3 GDP. What are you seeing? How do you feel about it? What is your thoughts on GDP and where we're at?

18:28Yeah, so we'll give the numbers, but I'm hearing more and more people think the second half of 26 is going to be better than the first half. Which is, which means the economy is growing. It's expanding. And again, if you watch the talk track, it's hard to believe, frankly. It's like, how does that happen? But here are the facts. We got the third and final revision to Q2. Last report was 1.5. It was revised up to 2.2, which is a, it's a solid number. Nothing, nothing crazy. But 2.2 is also not bad, right? We would, we take 2.2. But when we talk about Q3, which we won't get their first report, official report on Q3 for about three weeks. And again, we get three revision. So again, it'll be a dirty number, but it'll be a swag. GDP now by the Atlanta Fed had Q3 GDP up until September 25. So five days ago at 5%.

19:36It's, it's, it's had a significant dip in the last five days. It's now only at 3.7. So, you know, it's a, like heck, do not have a rate hike. Yeah, no shit, right? But no, it's, yeah, GDP at 3.7, even 3.5. That's an expanding economy. Right? So confused. Exactly. Right. So how can we have growing GDP? We got a consumer that's tapped out on savings. We got diesel. And it's just, it's, it's, it's so much fun playing with this puzzle. But yeah, Q3, watch out. Q3 could be a book. Like if we get a prince of 3% or more in Q3, you, there's no way you can have a recession in 26. It's just not enough time. So it's just how the games played. It's wild. The whole idea that, you know, we look back on the 50 year, 53 year spreadsheet. And we say, okay, well, history doesn't necessarily repeat itself, but it definitely runs. Well, I'll tell you what, we're out doing ourselves in 2026 because we're going to make 81. Look, we're going to make 79 to 8, like, we're going to even though hopefully when we don't go to double digit, more traits.

20:50But it'll be like, hold my beer. Let me show you what AI and this, you talk about by for a catat in case. Yeah, I mean, interest rates as of today are the highest they've been 7.58. But I, if we go back to 2023 Morgan spreads tie, there were a whisper short of nine. Yeah, nine percent more. That would be wild. Are we going to, I'm going to save it to the end to talk to Morgan. Right. So I'm going to save this and then we got other, we got fun. Stay folks. You're going to learn a lot. But also we got some goodies at the end. So stay to the very end. Talk about case, Schiller. Yeah, it's a case, Schiller. You know, the, you know, the year, you know, the report on housing. It's one of the industry standards. It is backward looking because it's always two months behind. But it's what we have to use when we're fighting tumors, right. Dumer's talk about median home prices falling. They've talking about 38% crash. And we just posted another record high, right. Case Schiller. I think was up 1.7 F H F a another housing report was up 2.4. So while you certainly can find locales or buy boxes that are down.

22:03The people calling for a 38 or a 50% housing crash. Either have PTSD or they're stupid because it's not coming in 2026. Must feel good for you to be right. Sometimes it does. Oh, yeah, not a housing crash. Some markets are soft. Some markets are strong. It's bifurcated. It's, you know, I want to push back because we again, you know this. We have already had the housing crash. Yes. It was in transactions. If you are in the real estate industry, you have suffered a depression. You guys have lost 70% of your competitors because they can't pay their rent. They are now Starbucks baristas. Real estate agents gone mortgage brokers gone flippers gone wholesalers gone. Because you can't pay the rent. There's nothing moving. So we have had a crash. It was just in transactions, not price. Not value. Very interesting. Very 1980s to like going to absolutely the way to that what's to come next. I mean, that'll be that'll be fun when we start talking about what's going to happen.

23:12When the wind is at our back in the sun, that's going to be amazing. That's going to be way more fun. Right. It's coming. It's coming. It's coming. Keep doing the work. Fed speak. Yeah. This week was interesting. We had three or four, probably even five Fed presidents basically come out and say. We gave you a dose and you're going to get another dose in October. Right. This week, I think I've read seven or eight different Fed presidents and all of them except one. We're like buckle up buttercup. You got another rate coming. Another rate increase coming in October. And then we had Fed president Williams. Fed president Williams. He's an influential voice. He came out and said the Fed should not be in a rush. And that one line that one sentence from that one guy took the odds of an October rate increase from 72% to 50. Wow. So, you know, we got a lot of data still to come. So that could change. But just to tell you how I think there's two things. One is how consequential his voices.

24:22More importantly, I think it's how desperate the market was to have any hope that there wasn't an October rating. Like they're just they're holding on to like one voice, even though he only has one vote. But yeah, he single handedly brought the odds of a rate hike from 72 to 50. 50. That's a market. That's a move. That's a mover. Yeah, for sure. What is your. I'm on I'm on the table. Yeah, October is coming. Hi, hi, it's a hike. Okay. Yeah, here's those. We're going to get a second dose. You're going to get a dose. You're going to get a second dose. Here's the rook. Can Jerome Powell go out to like a nice restaurant and can you go to the country club and play around a golf or is he still just like I can't even be out in public. You know what I mean? I think Jerome Powell is all he's doing now is smiling. Yeah, he's like this is awesome. I did a pretty good job considering what I had and like, yeah, like considering. I think he is I think he's smiling. That's what I think he's doing. All of these guys navigating man, talk about big.

25:31I don't want that pressure. No, thank you. Oh, pressure. Wow. Okay. All right. Right, Ike. It's coming. Okay. So school. Talk about we've got the best school community on the planet. It's $20 folks. If you're not involved in it, if you like this show, if you like the work that Michael does, how would you not want to be in the room on Sundays to hang out with them, ask them questions, be with Jason Pritchard and all of the wonderful people. Talk about what's going on in school. Yeah, so I had a question for my community. And they're they're like, you know, Michael, we obviously we have 550 members. We have a 95% retention. Just to give you how solid the community is like people come and they don't leave. In the street. Hi, no, no other community has that, by the way, yeah, 95% retention. I have a dashboard that shows it. And they basically ask me for a favor. They're like, Michael, you know, we're happy to pay the 20 bucks a month.

26:34Right, 67 pennies a day. But would you consider creating a yearly option and giving us a discount? And honestly, my answer was no. It was I told them know the first time because I personally liked knowing that I only asked for $20. Yeah. And I like month to month, right, because not everybody's going to gel with me. So you come in for 20 bucks, you get some free stuff. You talk to me a couple times. You don't like me. You're out for 20 bucks. It cost you two Starbucks coffees. Yeah. The $200 is 10X that. And I for whatever reason was very uncomfortable asking for that. And they correctly came back and pushed and pushed and pushed. And they basically got me to agree that I could offer $20 a month, month to month or or $200. So it was not a one or the other decision. So a school apparently is flexible enough where you can do both. I didn't know that in the beginning.

27:37Yeah. And then what finally got me to say yes is the following math. I like saying that school costs 67 pennies a day. I like that. The fact that you can save 40 bucks now and only pay $200 a month means you could get you know an hour of my time 45 weeks out of the year. So 45 hours of my time. You can get no the $1000 mentorship in the 10 week bootcamp all the stuff that's there for 55 pennies a day. 200 bucks not a month 200 bucks for an annual for your membership for one year for 20 bucks turns out to 55 pennies a day. And that's what finally got me to say okay I'll give a discount of 40 bucks again I think everybody should sign up for 20 bucks. If you don't like me you can leave it doesn't cost you much. But if you've been with me for a while and you're paying it all the time what the heck save some money. You know go do the $200 option and pay once a year. So I will probably lose 20,000 bucks because again 40 bucks times 300 or 400 people that do that.

28:45I'll lose money doing this but it's the right thing to do. Yeah I have one that I'm a member of and it was 1500 bucks for the year. Oh wow. So to give you an idea. Yeah that and you know so. So 20 dollars a month pay as you go or if you really like it for there's probably several of you that are big fans of the community everything that we're doing pay the $200 and you take the discount take the 40. I love though 55 cents. That's what I like to say that's what finally did the math for me I'm like oh I could say 55 cents a day that's cheaper. Yeah 55 right. I love it. Oh I love it. I love it. Okay I'm going to save the question for the last part. I'm going to ask you about mortgage rates. And we're going to talk about opportunity but before we do talk about Vegas talk about Vegas. Yeah Vegas is roughly a hundred days away I think it's 105 like 103 the day this post. And it's all about what's working today. You got lots of headlines you got lots of surprises coming. You got a podcast room which you could be a lot we're going to do live podcast 21 people in the room.

29:47Socialize take pictures ask questions. The VIP room is going to be stacked it's only place you're going to get Q&A with the speakers. Do yeah it's it's coming. I got to start doing my awards and stuff but yeah the my next task is bigger pockets which is why we can't do this on Friday. And then when I come back to the bigger pockets it's it's all about our event which at that point it'll be almost exactly a hundred days away. And I need to buckle up and really start focus and spending some money so yeah it's coming. I'm excited I'm excited I'm definitely going to stay the night I'm not sure Friday or Saturday night or how the night. But what I want to do is I want to do a happy hour with some of the people in the school community and all of that. Yeah figure out something for a happy hour. I'm not sure that'll be Saturday or Friday or how we'll or even Sunday. Let me figure that out so that's exciting. Let's talk about I want to talk about 30 year mortgages and then I want to talk about opportunity as we always do we always finish an opportunity.

30:50What do you see so with the bond market with the 10 year screaming with all of the uncertainty everything that's going on. I mean I can only imagine if you're the guy that works for the team that works in a mortgage bank and you've got to figure out what the margin and how to put your put out price sheets. Are we going to 8% mortgages in the next couple of weeks couple of days couple of months or well investors were already there. Sure right owner ock is 7.58 today which means investor loans are already in the eight. Will owner ock loans go to eight. Dude I certainly hope not. But gun to head probably feels like it right feels like it yeah yeah I mean there's two ways we can get there obviously the 10 year can go higher. But I think what's happening is the mortgage spread will eventually go the other way again I said I think I said this earlier. If we had the worst of the mortgage spreads we we wouldn't be talking about 8% we'd be talking about 9%

31:51down the mortgage spread quickly because I know we're at about 1.7. I think it's near the historic lows it might even be 1.6 as of this 10 morning for this afternoon. So historically speaking roughly speaking how is a mortgage rate calculated you take the 10 year note and you add a spread. Historically speaking that spread has always been between 170 basis points and 190 basis points. There have been times where it's below and above that. The most obvious example of being above that was 2022 where it was 307 basis points above the 10 year. So if you take the 10 year today at 5.57 or whatever it is and you add 308 you're almost at 9% mortgage rates. So you know we need to hug a mortgage spread if you're in the if you're a real estate agent or you're a mortgage broker you need to hug the mortgage spread because it's gone from 308 or 307 to 160. But there's no guarantee it stays there right it could the thing could blow out to 200 easily which adds 40 points even if the 10 year does nothing.

32:58Talk about opportunity because that's why we're all here talk about in what should people be doing if you're transactional loan officer realtor, escrow title, home inspection talk about I know the answer what is the answer what what should we be doing and where's the opportunity. So I'm going to give you two examples and I recorded content on this already that should post by the time this is out one with the mortgage broker and one with Adrian your buddy Adrian Hernandez as an investor and I'm going to give you both answers will do the mortgage broker first. If I was a mortgage broker or real estate agent and you had buyers that were scared and nervous and pulling back. I would do the following exercise and again I did this with math the mortgage guy you can find the video on the channel but I basically ran through the following scenario let's assume a home costs $400,000. Let's assume you put 10% down and I and at 8% I asked them what the mortgage payment was he said $3,200 I just recorded it so I have the numbers in front of me.

33:59And I said okay great 3,200 bucks write that down and then I said Matt what happens if you buy the same house $400,000 same 10% down but mortgage rates were 5.5% what's the payment there and he said Michael the payment there's $2,600 and this is including taxes insurance. So the delta between those two numbers is $600 so I said okay great if I was a real estate agent today or a mortgage broker today in my buyer wanted a $400,000 but he can't afford it here she can't afford it or they can't afford it at 8%. I would ask them could they afford it at 5.5 which equals $2,600 and in most cases they would say they would kill people would kill for a 5.5% mortgage rate today now that's hopefully a slight exaggeration but with mortgage rates at 8.5 is really good hopefully you understand that I didn't really mean they'd kill somebody but they really want 5.5.

35:00They would they would write the offer at 5.5. Of course. So what I told them to do was okay great so what you're telling me is you can afford $2,600. But Michael we're not in a we're not in that world it's 3,200 well guess what it's fall it's winter sellers are scared. So your mortgage broker should go back and calculate what home you could buy with 10% down and 8% mortgage and have a $2,600 payment in the answer with today's example was 325 grand if you wrote an offer at 325 had 8% mortgages your payment would be $2,600. And guess what in today's market you could write that offer and you will get a response. Yeah but more importantly if you're working with a good mortgage provider they will give you dozens of options you could do because the seller's going to come back to you and go I can't do 325 but maybe maybe I'll give you 12 grand in and buy down.

36:10So you're not paying 8 you're going to have a 7% mortgage and then I'll give you $25,000 discount and this that and the other thing and pretty soon your payments $2,600. Congratulations you have just turned the buyers market into the deal of a lifetime you got the house you wanted and you got the payment you want that's opportunity so that's example one. I love it I love it and I would just say that also this time of year people that are on the market a lot of people are going to de list. Ones that are on the market are ones that need to sell and I'll say even as an operator as you know some wholesale we buy houses as well as just as a broker. I'm getting more inbound calls of people that hey I had your postcard from a year ago from whatever and now they need somebody that's serious versus anybody can get this done so I think the media the way that the media cycle shifted about the economy interest rates higher for longer I think now people want somebody who's going to be a hard work in straight forward somebody with some experience so I just think our value as operators also goes up if you're in the distress and providing some money.

37:21Solutions absolutely so let me give the example age and I talked about and this example really goes back to the dooms they have convinced people that are 20% housing crashes coming even though it's mathematically almost impossible in a single year to have 20% crash it's just the worst year ever was 9% so but that doesn't mean if you ever ever if you think of 20% housing crashes coming why wait. What I tell you to do in but you won't but I want you to think about is go create your own housing crash go right offers 20% below list create your own housing crash find your one unicorn motivated seller that will sell to you because guess what folks there are home sellers that think a 20% housing crash is coming there are home sellers that believe a 50% housing crash is coming so go find them. And go create your housing crash today that's what I want people that's the opportunity go make it happen.

38:23Dude I still love that I love instead of disrespectful offers you'll do the housing crash protection offers yeah that unicorn offers or whatever you want to change the marketing I need to change the marketing on that but yeah it's not it's not a disrespectful offer it's a disrespectful list price you're just creating a realistic you're just too high yeah you're just too high. Yeah so good Michael so good dude thank you for all that you do Michael so when you're watching this Michael will be in Florida he'll be speaking at the bigger pockets conference what did you speak it I think I speak Saturday at one I think okay so if you're at bigger pockets go find him go say hi take a picture posted on IG tag him say hello find him he'll be in the room I love it Michael thank you for all that you do all right Ty thanks again. Nikki Glazer this stunning tour the thoughts of death I don't like to dwell on them for longer than like 10 or 15 hours a day so November 19 Yama Vaughe Theater no wonder women rush to have kids were being trained for it since we were kids they're like here's a baby doll here's an easy bake oven I got one of those I stuck my head in it I was like I want out of this narrative tickets on sale now at Yama Vaughe Theater dot com don't miss Nikki Glazer Yama Vaughe Theater

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