The Higher Standard

During the early days of the pandemic, Americans were receiving stimulus checks from the government, and as a result were able to save quite a bit of money. However, according to data from the Federal Reserve Bank of St. Louis, the personal savings of Americans is only $520 billion as of November 2022, marking a substantial drop from the $4.85 trillion in 2020. Savings are now below even pre-pandemic levels and with the national stockpile shrinking by $100 billion since October. Thanks to persistent inflation, sluggish economic growth and major layoffs, living paycheck to paycheck has become the norm.In this episode of The Higher Standard, Chris and Saied examine this worrying trend and what it means for the economy as we move into 2023.They discuss comments from Goldman Sachs CEO David Solomon, in his traditional end-of-year message to staff, that layoffs will happen in the first half of January.Chris and Saied look at a Washington Examiner article stating that recently unearthed emails show that disgraced FTX CEO Sam Bankman-Fried attempted to 'wine and dine' someone who, at the time, was a commissioner for the U.S. Commodity Futures Trading Commission, one of several agencies that regulate cryptocurrency.They also offer some thoughts on what might happen if the Federal Reserve hadn't pursued a policy of quantitative tightening.Join Chris and Saied for this fascinating and informative conversation.Enjoy!What You’ll Learn in this Show:Why consumer credit card debt is up by nearly $40 billion.Why MarketWatch claims there's a better recession indicator than the yield curve... and why that's nonsense.Why Grant Cardone is a syndicator, not a 'crowdfunding maestro' (and why he's now in hot water.)How Sam Bankman-Fried was able to get access to a commissioner for the U.S. Commodity Futures Trading Commission.And so much more...Resources:"Americans' personal savings have plunged to a staggering $520 billion — from $4.85 trillion in 2020. Here are 3 easy ways to buck that dangerous downtrend" (article from Moneywise)"Goldman Sachs will lay off staff in a matter of weeks, says CEO David Solomon" (Bloomberg via Instagram)"Consumer Spending Is About to Get Slammed. Here’s How to Prepare." (article from Barron's)"Home Prices Fell in October for Fourth Straight Month" (article from Wall Street Journal)"There’s a better recession indicator than the yield curve and it is not flashing danger (yet)" (article from MarketWatch)"This crypto engineer bought an NFT for $2.9 million, expected to sell for $48 million, and was only offered a few dollars" (Entrepreneur via Instagram)"Man who paid $2.9m for NFT of Jack Dorsey’s first tweet set to lose almost $2.9m" (article from the Guardian)"Sam Bankman-Fried told crypto regulator FTX was 'natural choice' to be 'umpires' of industry, emails show" (article from the Washington Examiner)"Grant Cardone is back on the hook in a class action suit" (TheRealDeal via Instagram)"401(k) ‘hardship’ withdrawals hit record high, Vanguard says — another sign households feel the pinch of inflation" (article from CNBC)"Jobless benefits rolls grow but U.S. labor market remains resilient" (article from Reuters)"Defense Spending Reaches Record High as Pentagon Fails Its Audit – For Fifth Time" (article from The Equation)

The listeners have questions, and Chris and Saied are here with answers! This time out, the boys are answering burning questions submitted by the audience. At the end of the show, Chris and Saied choose their favourite question out of the ones submitted and award the lucky listener a $100 prize!In this episode, Chris and Saied examine the continuing aftermath of the FTX collapse, speculating as to why disgraced CEO Sam Bankman-Fried was allowed to return to his parent's home.They discuss the pros and cons of replacing the antiquated title system used in real estate with modern web3 technology, such as the blockchain, making the information more accessible.Chris and Saied look at the reasons why a recession has only been hinted at or predicted, but not "officially" announced, despite evidence seemingly supporting the existence of one.They also offer opinions on the tech sector and whether or not they think it will underperform compared to energy and finance in the next decade.Join Chris and Saied for this fascinating and informative conversation.Enjoy!What You’ll Learn in this Show:Why the antiquated title system should be replaced with blockchain technology.The possibility of the FTX scandal leading to larger scandals within the US government.Chris and Saied's short and long term goals.Why a recessionary declaration is normally made 10, usually 12 months, at least, after the period is done.And so much more...

The FTX drama continues. Co-founder Gary Wang and former Alameda Research co-CEO Caroline Ellison have both pleaded guilty to federal charges. Wang pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud and conspiracy to commit securities fraud. Ellison pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering. Ellison and Wang become the second and third individuals to be charged in connection with FTX's multibillion-dollar collapse. Sam Bankman-Fried has already been indicted.In this episode Chris and Saied examine these latest developments as well as Sam Bankman-Fried's recent release on $250 million dollar bail.They discuss an article from Bloomberg Business claiming that inflation reports are so important, staff were once instructed to have no facial expressions when walking them into the West Wing of the White House.Chris and Saied look at a seemingly skewed chart from Keeping Current Matters revealing home price forecasts for 2023, with Realtor.com predicting a 5.4% increase and Zelman going the other way with a -5.1% decrease.They also discuss a report stating that Mortgage applications to refinance a home jumped 6% last week as interest rates hit their lowest level since September, according to the Mortgage Bankers Association’s seasonally adjusted index.Join Chris and Saied for this fascinating and informative conversation.Enjoy!What You’ll Learn in this Show:Caroline Ellison and Gary Wangs's plea bargain deal and what that means for Sam Bankman-Fried.Why economists are now predicting a 7-in-10 likelihood that the US economy will sink into a recession next year.A report from the NAR stating that sales of existing homes fell 7.7% in November compared with October.Why a new Bloomberg Economics model projection predicts that a recession by late-2023 is a '100%' likelihood.And so much more...Resources:"Caroline Ellison, Associate of FTX Founder Sam Bankman-Fried, Pleads Guilty to Criminal Charges" (article from The Wall Street Journal)"It takes a lot to keep inflation data secret, including NDAs" (Bloomberg Business via Instagram)"There is a 70% risk of recession in 2023, economists say" (Bloomberg business via Instagram)"Brace for Recession Next Year. But the Outlook Isn’t All Doom and Gloom" (article from Barron's)"Home price forecasts for 2023" (Keeping Current Matters via Instagram)"Home sales tumbled more than 7% in November, the 10th straight month of declines" (article from CNBC)"Homebuilder sentiment drops for the 12th straight month, but a bottom may be near" (article from CNBC)"Mortgage refinance demand surged 6%, as rates dropped to the lowest level since September" (article from CNBC)"With new mortgages down 47%, US lenders are starting to go bankrupt — could this one factor trigger the worst surge of failures since 2008?" (article from Yahoo! Finance)"FTX’s Gary Wang, Alameda’s Caroline Ellison plead guilty to federal charges, cooperating with prosecutors" (article from CNBC)"FTX founder Sam Bankman-Fried to be released on $250 million bail, will live with his parents" (article from CNBC)"Forecast for US Recession Within Year Hits 100% in Blow to Biden" (article from Bloomberg)

Cisco is the latest tech company to implement mass layoffs, specifically 4100 employees, nearly 5% of its workforce. These layoffs were anticipated, but which employees would be affected was unknown. Even though these tech layoffs are massive for the industry, they’re not representative of the job market at large. Instead, they’re symptomatic of the strange circumstances present in our current economy. At the same time, Cisco has been actively hiring for new roles. The company says this is part of a restructuring, and workers it cannot place internally will receive severance packages.Today marks the 100th episode of The Higher Standard, and Chris and Saied are celebrating by doing what they do best - diving into this news and what it means for the tech sector as a whole in the coming year.They discuss the ongoing drama at Twitter, as the social media platform tries to redefine its policies in light of the recent purchase by Elon Musk. The most recent policy shift involves an abrupt ban of all links to Instagram, Mastodon, and other competitors.Chris and Saied look at the deterioration of affordability in housing across the US, which is happening at the fastest pace in history. The problem is that home prices are still rising while interest rates on mortgages are surging higher, which is highly unusual.They also discuss an investigation by the DEA, which alleges that a methamphetamine and cocaine gang operating across the U.S., Mexico, Europe and Australia used the world’s biggest cryptocurrency exchange Binance to launder tens of millions in drug proceeds.Join Chris and Saied for this fascinating and informative conversation and help them celebrate episode 100!Enjoy!What You’ll Learn in this Show:The two primary methods for measuring housing prices: Month over month and year over year.Why US agencies are now moving to track illegal use of cryptocurrency.Why the ideology of free speech has become very murky in recent years.Why Chris believes there will be a significant amount of layoffs in Q1 across many sectors.And so much more...Resources:"Morgan Stanley warns that housing affordability is deteriorating faster than at any point in its data history — here are 2 easy ways to buck the worrisome trend" (article from Moneywise)"Are housing prices going up or down?" (TheDataDeli via Instagram)"Tech Layoffs: Cisco Announces Mass Layoffs - 4,100 Employees Cut" (article from Forbes)"Twitter abruptly bans all links to Instagram, Mastodon, and other competitors" (article from The Verge)"International drug conspiracy used Binance to launder millions, DEA investigation finds" (Forbes via Instagram)"Goldman Sachs is planning to cut up to 8% of its employees in January" (article from CNBC)"Homebuilder sentiment drops for the 12th straight month, but a bottom may be near" (article from CNBC)"Roughly 1 in 3 workers is worried about a layoff — here’s where anxiety is highest" (article from CNBC)"Twitter Reverses Ban to Accounts That Boost Competitors" (article from TheStreet)"Washington Post chief announces job cuts – and refuses to answer questions" (article from the Guardian)

The Federal Reserve has raised its target federal funds rate by 0.5 percentage points in a continued effort to cool inflation. While this is a more typical hike compared to the 0.75 percentage point moves at each of the last four meetings, the central bank is far from finished, at least according to Greg McBride, chief financial analyst at Bankrate.com. Whether directly or indirectly, higher Fed rates influence borrowing costs for consumers and, to a lesser extent, the rates they earn on savings accounts.In today's episode of The Higher Standard, Chris and Saied explore this latest rate hike and try to determine what it will mean for the economy, and for you.They discuss a mystery rally in stock futures that spontaneously appeared in the seconds before the better-than-expected inflation number hit the Labor Department’s website, resulting in a 1% spike in stock futures as well as a surge in Treasury futures, pushing benchmark yields lower by about 4 basis points.Chris and Saied look at a new report from Black Knight stating that approximately 270,000 homebuyers who bought during the red-hot housing market this year already owe more than their house is worth. Among the 450,000 embattled borrowers in the third quarter, nearly 60% had mortgages originated in the first nine months of 2022.They also discuss a Commerce Department report indicating that consumers pulled back on spending in November, failing to keep up with even a muted level of inflation for the month.Join Chris and Saied for this eye-opening conversation.Enjoy!What You’ll Learn in this Show:Why the NAR believes that existing-home sales will slide to 11-year low in 2023.What’s going to happen to homebuyers with Federal Housing Administration (FHA) loans.The real differences between Paul Volcker and Jerome Powell.Why the new FTX CEO will get paid before its allegedly defrauded customers will.And so much more...Resources:"Here’s what the Federal Reserve’s half-point rate hike means for you" (article from CNBC)"In 60 seconds before CPI hit, heavy trading drove a mystery rally" (Bloomberg Businessweek via Instagram)"The last time the Fed curbed inflation without crashing the economy, explained" (article from Vox)"New FTX CEO is getting paid $1,300 an hour, and customers will foot the bill" (article from CNBC)"U.S. existing-home sales to slide to 11-year low in 2023, NAR says" (article from Reuters)"270,000 homebuyers who bought in 2022 are underwater on their mortgage" (article from Yahoo! Money)"Fed raises interest rates half a point to highest level in 15 years" (article from CNBC)Principle of the Day (Ray Dalio via Instagram)Principle of the Day (Ray Dalio via Instagram)"Consumer prices rose less than expected in November, up 7.1% from a year ago" (article from CNBC)“This is a sleeping giant. Many people are surprised at how much they are going to pay the city.” (TheRealDeal via Instagram)"Retail sales fell 0.6% in November as consumers feel the pressure from inflation" (article from CNBC)"For most American businesses, new Fed rate means loans now start at 10%-plus interest" (article from CNBC)"Home flipping profits drop at the fastest pace in over a decade" (article from CNBC)

The FTX drama continues. The crypto business' founder, Sam Bankman-Fried, has been arrested by Bahamian authorities after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, setting the stage for extradition and U.S. trial for the one time crypto billionaire at the heart of the cryptocurrency exchange’s collapse. His arrest is being called the first concrete move by regulators to hold individuals accountable for the multibillion-dollar implosion of FTX last month.In today's episode of The Higher Standard, Chris and Saied dig into this news, and speculate as to whether or not this move could signal the beginning of regulation for the crypto space.They discuss the possible upcoming pivots for the Fed in it's ongoing battle against inflation. Will they raise rates again? Will they hold? For how long?Chris and Saied look at Meta's $3 billion plan to decrease its office footprint, which includes unloading up to 544,000 square feet of offices in the Bay Area.⁠They also discuss a New York Federal Reserve survey indicating that consumers grew more optimistic about inflation in November amid expectations that both food and energy price increases would be less severe in the coming year.Join Chris and Saied for this eye-opening conversation.Enjoy!What You’ll Learn in this Show:The arrest of former FTX CEO Sam Bankman-Fried and what that means for the future cryptocurrency.Cross-collateralized cross-default loans - what they are, and why you should care.Why Redfin predicts that 2023 will bring the slowest housing market in a dozen years.Why affordability in the real estate space is going to continue to be an issue in the years to come.And so much more...Resources:"FTX founder Sam Bankman-Fried arrested in the Bahamas after U.S. files criminal charges" (article from CNBC)"November PPI a bit hotter than expected" (article from Reuters)"Housing market to sink to a 12-year low in 2023, Redfin says" (TheRealDeal via Instagram)"Lennar offers to sell 5000 homes to big landlords" (TheRealDeal via Instagram)"Economists like Nouriel Roubini are starting to fret about a US debt crisis as interest rates rise – here's why it's the latest issue rattling markets" (article from Markets Insider)"Total Household Debt Reaches $16.51 trillion in Q3 2022; Mortgage and Auto Loan Originations Decline" (press release from the Federal Reserve Bank of New York)"Top economist Mohamed El-Erian says the Fed will face these two ‘unpleasant choices’ next year" (article from Fortune)"Meta to ditch up to 544K sf of office space in Bay Area" (TheRealDeal via Instagram)"Consumers see inflation easing considerably in the next year, New York Fed survey shows" (article from CNBC)

American consumers are slowing their spending as the Federal Reserve’s interest rate increases reverberate throughout the economy, according to the CEOs of two of the largest American banks. After two years of pandemic-fueled, double-digit growth in Bank of America card volume, “the rate of growth is slowing,” CEO Brian Moynihan said at a financial conference. While retail payments surged 11% so far this year to nearly $4 trillion, that increase obscures a slowdown that began in recent weeks: November spending rose just 5%, he said.In today's episode of The Higher Standard, Chris and Saied have done something a little different and invited their brothers, Ariya and Haroon, to join them in the discussion as they attempt to dissect this and many other pieces of economic news.They discuss what's likely to happen in the crypto space, and why the lack of regulation will remain a turn off for many investors.Chris and Saied look at the sudden reversal in home prices that began this spring, which has now affected every one of America’s major metros with declines from their recent all-time peaks.They also discuss a recent report stating that Morgan Stanley has cut about 2% of its workforce, affecting about 1,600 positions and following workforce reductions at Goldman Sachs and Citigroup.Join Chris and Saied (as well as Ariya and Haroon) for this fascinating conversation.Enjoy!What You’ll Learn in this Show:Why JPMorgan CEO Jamie Dimon has compared crypto tokens to 'pet rocks.'Why every major financial institution has crypto within its organization.What home appraisals are and how they work.Why the only true hedge against inflation is to keep doing what you're doing when inflation isn't there to keep buying.And so much more...Resources:"Crypto is a complete sideshow, tokens are like 'pet rocks,' says JPMorgan CEO Jamie Dimon" (via YouTube)"Goldman CEO says small bonuses, job cuts shouldn't be a surprise." (Bloomberg via Instagram)"Home prices are down in every one of the top 58 metros according to the latest AEI data. But cities in this region have taken the biggest hit so far" (article from Fortune)"Wisconsin Man Indicted for $35 Million Bank Fraud Scheme" (press release from the Department of Justice)"‘There is a slowdown happening’ – Wells Fargo, BofA CEOs point to cooling consumer amid Fed hikes" (article from CNBC)"A key indicator of a coming economic downturn is pricing in nearly 100% chance of a 'Powell recession' in 2023" (article from Yahoo! Finance)"Morgan Stanley cuts about 2% of its workforce - source" (article from Reuters)

According to Jim Cramer, host of CNBC's "Mad Money," there are four reasons why the Federal Reserve can’t stop tightening the economy just yet. He cites not enough people reentering the workforce, a mismatch between job openings and job seekers, too many people working in customer relations management, data analysis and advertising, and the creation of too many new companies in the past two years. “This market’s hostage to the Federal Reserve, and the Fed’s not going to stop tightening until they see more evidence of real economic pain. Unfortunately, we’re not there yet,” he said.In today's episode of The Higher Standard, Chris and Saied explore why Cramer is, in fact, wrong in this assertion (and a good deal more).They discuss a report from real estate brokerage Redfin saying that a record number of homes are being delisted as sellers face a sharp drop in demand. On average, 2% of homes for sale were delisted without being sold each week during the three months ended Nov. 20 compared to 1.6% a year earlier.Chris and Saied offer some insights into the belief by traders that the Federal Reserve will drive its policy rate above 5% by May, following a report showing little sign of a cooling job market. This is in spite of the central bank's aggressive interest-rate increases so far.They also discuss recent comments from Bank of America, which is expecting nonfarm payroll gains to be cut in half in Q4 of 2022 and turn negative in 2023. During the first quarter of 2023, the bank projects that the U.S. will be losing roughly 175,000 jobs a month.Join Chris and Saied for this fascinating conversation.Enjoy!What You’ll Learn in this Show:Why Jim Cramer is wrong 100% of the time.A Labor Department report stating that nonfarm payrolls increased 263,000 for the month while the unemployment rate was 3.7%.Why BofA believes that the US economy will start to lose 175,000 jobs per month during Q1 of 2023.The storm surrounding the so-called "Liver King" and his recent (and very carefully crafted) apology video.And so much more...Resources:"Strong Job Numbers Throw Cold Water on Hopes for an End to Interest-Rate Rises" (article from Barron's)"Traders now see Fed policy rate hitting 5% next year" (article from Reuters)"The Fed can’t stop raising interest rates due to these 4 factors, Jim Cramer says" (article from CNBC)"Home Sellers Are Pulling Properties off the Market at Record Pace" (article from Bloomberg)"Payrolls and wages blow past expectations, flying in the face of Fed rate hikes" (article from CNBC)"BofA warns that the US economy will start to lose 175,000 jobs per month during Q1 of 2023, expects a ‘harder landing’ rather than a softer one — here’s why" (article from Yahoo! Finance)"The Liver King Lie" (via YouTube)"Liver King Confession... I lied." (via YouTube)

Consumers spent a record $9.12 billion online shopping during Black Friday this year, according to Adobe, which tracks sales on retailers' websites. Overall online sales for the day after Thanksgiving were up 2.3% year over year, and electronics were a major contributor, as online sales surged 221% over an average day in October. Toys were another popular category for shoppers, up 285%, as was exercise equipment, up 218%. Buy Now Pay Later payments increased by 78% compared with the past week, beginning Nov. 19, as consumers continue to grapple with high prices and inflation.In today's episode of The Higher Standard, Chris and Saied dig into these numbers and attempt to make sense of them.They discuss a recent story indicating that Airbnb is recruiting multifamily landlords for short-term rentals at properties, as well as the problems that surround mutifamily properties.Chris and Saied offer some insights into how blockchain companies like BlockFi work in light of the company's recent Chapter 11 bankruptcy listing.They also discuss the reasons why the fanfare and sensationalism surrounding cryptocurrency has now vanished, and why crypto will never be the same.Join Chris and Saied for this fascinating conversation.Enjoy!What You’ll Learn in this Show:How and why the S&P jumped over 700 points in just a week.Why S&P Global Ratings economist Beth Ann Bovino is telling people to brace for  a recession in 2023.Why private hiring has slowed sharply in November.'Dr Doom' Nouriel Roubini's seven Cs of crypto: Concealed, corrupt, crooks, criminals, con men, carnival barkers and CZ.And so much more...Resources:"Black Friday online sales top $9 billion in new record" (article from CNBC)"Americans are spending $433 more a MONTH for the same products due to crippling inflation as consumer prices rocket 8% to nearly highest level in 40 years" (article from The Daily Mail)"Collapse" in home prices is coming, experts say" (article from Axios)"Home sales could plunge in 2023. These cities could see the biggest dips." (article from CBS News)"Airbnb recruits multifamily landlords for sublets" (The Real Deal via Instagram)"A Recession Akin to 1969-1970 Awaits U.S. Next Year, Economist Warns" (article from Barron's)"30 under 30" (Forbes via Instagram)"Fed officials see smaller rate hikes coming ‘soon,’ minutes show" (article from CNBC)"Retiring baby boomers are getting wiped out by inflation and a volatile stock market: ‘It’s extremely scary’" (article from Yahoo! Finance)"BlockFi lawyer tells bankruptcy court that the priority is to ‘maximize client recoveries’" (article from CNBC)"Private hiring increased by just 127,000 jobs in November, well below estimate, ADP reports" (article from CNBC)

According to the National Association of Realtors (NAR), sales of previously owned homes declined 5.9% in October from the prior month to a seasonally adjusted annual rate of 4.43 million, the weakest rate since May 2020. October sales fell 28.4% from a year earlier, the biggest annual decline since February 2008. Home sales have been dropping each month since February. From their recent peak in January, existing-home sales have dropped about 32%. The slowdown is due to a rapid increase in borrowing rates. The average rate on a 30-year fixed-rate mortgage began to climb rapidly in the first quarter and rose above 7% earlier this month. Mortgage rates eased this week but are still more than double where they stood a year ago.In today's episode of The Higher Standard, Chris and Saied dive into these numbers to help you understand what they mean for the economy and the fight against inflation.They play a game of 'What if?', trying to determine the effect on the market, both short and long term, if the Fed funds rate were to reach 10%.Chris and Saied discuss the concept of a yield curve inversion and why it matters to the economy.They also discuss a recent report indicating that the city of San Francisco could lose up to $200 million in property tax revenue by 2028 as record office vacancies, fueled by remote work and uncertainty in the tech industry.Join Chris and Saied for this fascinating conversation.Enjoy!What You’ll Learn in this Show:Why banks are pulling back on lending to both households and businesses.Why the yield curve inversion is an indicator of a future recession.How long it actually takes to get a real estate license.The reasons why US home sales have fallen for the ninth straight month.And so much more...Resources:"Did Bullard Undershoot? Stifel Economists Say Fed Funds Rate May Need to Go to 8% or Even 9%." (article from Barron's)"U.S. Home Sales Fell for Ninth Straight Month in October" (article from The Wall Street Journal)"37% of real estate agents in the US couldn't afford to pay their rent in October — another bad sign for the housing market. Here are 3 key takeaways for sellers right now" (article from Yahoo! Finance)"SF could lose up to $200M in property tax revenue" (The Real Deal via Instagram)"Bob Iger returns as Disney CEO, replacing Bob Chapek after a brief, tumultuous tenure" (article from CNBC)