Banking Crisis In America - How It Affects YOU
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Summary
The S&P 500, Dow, Dow Jones, and Nasdaq all hit new all-time lows on Tuesday. Some are predicting a 10% decline over the next 3-9 months, and it's important to know what to do in a situation like this and how it affects you. In this webinar, I'll be sharing with you the mindset and attitude needed in order to capitalize on the wealth transfer that will be taking place. It's not the kind of wealth transfer you and I think about that boomers are getting rich, they're transferring their money over to the next generation. This is a different kind of a transfer.
Transcript
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Some are saying S&P is going to go from, you know, 4,000, it's around 3950, 3980 to 35.
00:00:07.260
There's a small community that says it could go as low as 32, which would be a 20% drop
00:00:14.280
But for the most part, a lot of people are saying there's going to be a 10% decline over
00:00:19.600
And it's important to know what to do in a situation like this and how it affects you.
00:00:24.360
So in this webinar, I'll be sharing with you the mindset and the attitude needed in order
00:00:28.620
to capitalize on the wealth transfer that will be taking place.
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It's not the kind of wealth transfer that you and I think about that boomers are getting
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They're transferring their money over to the next generation and that's a wealth transfer.
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This is going to be a different kind of a transfer.
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Silicon Valley Bank, what really happened there?
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If you look at this chart, if you look at this chart, you'll see the blue, the light blue,
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not the dark blue on the bottom, the blue, light blue is showing assets.
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And just five years ago, Silicon Valley Bank was a $50 billion company in assets.
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And it was $50 billion in 17, in 18, in 19, in 20 it went up, and then all of a sudden
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it went from being a $50 billion bank to 2022 being a $200 billion bank.
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But the number you want to look at there is that orange color that all of a sudden goes
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What is the orange graph that we're looking at?
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What is the orange color that we're looking at?
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Silicon Valley Bank buys a $100 billion three-year bond at an average of 1.7% interest rate.
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They buy a $100 billion bond from the government.
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They're thinking they're doing great because everything is a lot lower than that.
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We'll be selling it back to customers that are coming to us.
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All of a sudden it goes to 2.7%, 2.5%, you know, 3%, 4%, 5% because we can't do this.
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So next thing you know, the chart right here is loan assets and deposits in 2022, but look
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what happens here with their interest rates of the bonds that they bought.
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That's the bonds that they bought at $100 billion in 2022.
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Next thing you know, Fed rapidly and unexpectedly raises rates to 5% in one year.
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We're going to look at history on how many times this has ever happened in our economy.
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Two, cash inflows slow down and withdrawals increase as tech startups are crushed by higher rates.
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Suddenly, people are running to Silicon Valley Bank.
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Word spreads about Silicon Valley Bank vulnerable position.
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When deposits withdrawals escalate, they're forced to sell $21 billion of bonds at a $1.8 billion loss to meet withdrawals.
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Once they sell the loss, this becomes realized, it's official, and then the FDIC is forced to intervene.
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The next thing you know is when we hear about Silicon Valley Bank is about to go out of business.
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One of the 27 regional banks that we have in America.
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And then that fear starts going into people saying, could it happen to me?
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And next thing you know, people lose their minds on Twitter.
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The government needs to come and bail them out.
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Next thing you know, Chase, JPMorgan Chase is coming.
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And those clients from Silicon Valley banks are moving their billions of dollars of money to Chase.
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Everybody's trying to get these clients at the same time.
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But what people are thinking about is these families are sitting there saying, if they only save, you know, protect up to a quarter million dollars,
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babe, maybe we need to save, move some of our money.
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One day, Silicon Valley Bank runs the run biggest in more than a decade when this happened.
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$42 billion went out in one day, most in a decade.
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This whole, you know, $1,000 a month, $1,400 a month, this is great.
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We printed around $6 trillion in the last three years, the Federal Reserve and the government.
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The last time our national debt, GDP to national debt ratio, when you look at this year, was 100%, was 1945, right after World War II.
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That's catastrophic when you go back and have to go to that number to see when's the last time we were there.
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So the government is sitting, there's like a car driving at an 8,000 RPM, and boom, engine blows up.
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So we're looking at this saying, wait a minute, 98.2% during COVID 2020?
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And if this thing continues with the debt to GDP ratio, look what it can go to next in 2030, 2040.
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Everybody's sitting there concerned saying, how are we going to handle this?
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Fracking permits cut and oil pipelines canceled.
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Cancellation of Keystone pipelines resulted in thousands of construction jobs lost.
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Then you got the Russia-Ukraine war, created additional supply issues.
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Some said oil, you know, the North Stream pipeline.
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Bottom line, money supply went up and available goods went down.
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People have money, but we don't have available goods.
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The Fed held 0% interest rates and purchased $120 billion per month of treasuries and mortgage-backed securities, which is called quantitative easing.
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Instead of taking money out, they're putting money in, right?
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Man, the rich are getting richer and the poor are getting poorer.
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And no matter how much money you print and put into the economy, guess what the rich know how to do?
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And when they spend and waste their money, who does it go to?
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So, as much as it was a noble thing to do, the disparity between the rich and the poor got wider and wider and wider.
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Even though the intentions were noble, it became catastrophic.
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Jerome Powell says, well, you know, we believe inflation is going to be transitory and nobody's worried about it.
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Suddenly pivots and starts aggressively raising rates like never before.
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Zero percent interest rate hikes for two years.
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If you look at the bottom left, it says July 2020.
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Then all of a sudden we raise five percent in one year.
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What happens when you raise rates five percent in one year?
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Well, let's see how many times we've done this before, but before we do so, what happens here?
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So, Fed hiking rates achieved price stability, caused a shock to the banking sector, like ways we've never seen before.
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You don't see it, but behind closed doors, it's like, oh, my God.
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On the inside, this heart is having to pump so hard and it can't keep up.
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Normally, FDIC only insures deposits up to 250.
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Government guaranteed all Silicon Valley bank depositors.
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Ninety percent of Silicon Valley bank deposits were over a quarter of a million dollars.
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This is Silicon Valley, so the clientele is slightly different.
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So, it's not like it's, everybody's going to be fine.
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No, 90% is not going to be fine because they have more than a quarter of a million dollars in it.
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Biden said the taxpayers are not going to pay for it, but did not explain how the taxpayers are not going to pay for it.
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Are you going to print some more money and not tell us about it and just put it on the balance sheet?
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This is the question everybody's been asking the last two weeks, okay?
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You know, if companies like this, well, they've been bad for four years.
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And I'm not just telling you Schwab's one of them.
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There's a lot of lists that people are talking about behind closed doors.
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When the moment everybody looked at Silicon Valley Bank to see what percentage of their
00:11:11.360
asset under management was under bonds, was allocated to bonds, everybody started looking
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So, Silicon Valley Bank, 63% of their assets was in bonds.
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You know how they bought a $100 billion bond over a three-year period at 1.7%?
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So, that $100 billion, and they're worth $200 billion, including on another $30 billion,
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and they have about 63% of all their assets is tied to bonds.
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JPMorgan Chase is the safest bank out there, what everybody started talking about.
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And then you got Morgan Stanley, Private, at 63%.
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But then some of the other names, they're like, wait a minute, I know these banks.
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Odds are, if you're watching this, one of those is your bank that you're banking with.
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Odds are, if you're watching this, one of those is a bank you're banking with.
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If some of you are saying, nope, I don't bank with any of those, you may be banking with a community bank.
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And a community bank is for cities with less than 50,000 people of population.
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But everybody started looking at banks to the right of Silicon Valley.
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Well, if it can happen to them, it can happen to others as well.
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So then, all of the stuff they're talking about, the FDIC says, no, you don't need to worry about it.
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And then some people became curious and they said, well, how much is the FDIC insuring?
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All the stuff that says up to $250,000 of deposits insured at the banks, how much are you trying to insure?
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How much do you currently have available to you that in case something were to happen, can you cover the $9.9 trillion?
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So some people post this on Twitter and it went viral to protect the $9.9 trillion.
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How are you going to protect everybody with only $125 billion at $9.9 trillion?
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What if they start all of a sudden taking their monies out of banks and we cannot.
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What people are learning now, a little bit of the FDIC situation.
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So then, you know the money, the stimulus that we did in COVID?
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In 2008, the TARP program that they did, which was roughly $800 billion.
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Do you see when you zoom in where it says January 2009, between January 2009?
00:15:00.100
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00:15:14.560
And in January 2008, in that the glass that it's had that's looking at where we're at, that's $800 billion.
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Look at the angle, what it looks like, okay, when we did this.
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So now, this man here has got a tough job, okay?
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Because what he's going through today, no Fed chair has ever gone through because the current climate is very unique.
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He can take the Ben Bernanke route and be dovish.
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Or he can take the Paul Volcker route and be hawkish.
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So Ben Bernanke was a Fed chair from 2006 to 2014.
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And the biggest problem he was facing was the 2008 crisis during his eight years of being in office.
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So Powell, if you had the job, you would say, I want to see the data of what the guys before me did and how they handled this.
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Powell, Powell used Bernanke's strategy in 2020, 2021.
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But Powell used Volcker's strategy in 2022 to now.
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So on the left, the Bernanke strategy was trading comfort today for paying tomorrow.
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But, man, the next generation, our kids and grandkids will pay a price for it.
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But, come on, let's at least us be good right now.
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We can't lose all our money right now versus the Paul Volcker style.
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It's like, no, no, we can't give this inheritance to our kids.
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We got to take a hit in the economy now so we can have a better economy for them.
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It's unfair for us to give them our screw up of what we did, which is kind of noble.
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So then Bernanke, middle and lower class priced out of real estate, can't afford it.
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2006, houses, I can't afford to buy a million dollars.
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I was just talking to my guy about buying commercial real estate.
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I'm looking at this building that we're wanting to make an offer on from $89 million to $69 million to $59 million to $46 million.
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And to $46 million, the people that are in it right now that we were talking to, we had a meeting with them two, three months ago, they can't get the financing completed.
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So the funding, the interest rates, all of a sudden, all the loans that they got on short-term interest rates, we can get it.
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The Paul Walker route is asset prices goes down.
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Either way, this one pain is a different kind of a pain than this.
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Powell has used both strategies, which is kind of off and a little bit weird.
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So when you look at this here, this tells you a story here.
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The Volcker years, you see from 79 to 87, this is what he was dealing with.
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And if you go to the bottom, you don't see anything below 6% pretty much.
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Not unemployment interest rates is what you see.
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These numbers today, people would panic if we got to 19%.
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And then he brought it down and kept it less than half a point for 128 months.
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That's why they call it the 128-month economic expansion.
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Let me get another $10 million line at such and such interest rate.
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What they don't realize is they screwed it up for their kids and grandkids because it
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We're going to have to pay price 10 years from now.
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A little bit more, a little bit more, a little bit more.
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Powell used the old strategy the last two years.
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And now he's using the new strategy the last 12 months.
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Bernanke had a crisis with low inflation, 2% to 4%.
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Volcker had inflation with a low debt to GDP ratio, 30% to 40% debt to GDP ratio.
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Powell is dealing with high inflation and high debt to GDP.
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He's got both of their problems at the same time happening.
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6% to 9% inflation and 100% to 130% debt to GDP ratio.
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One minute, everyone's telling him, hey, let's go to Bernanke route.
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Rather than sticking to his guns, to one philosophy, people behind closed doors are constantly
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influencing him to change his approach and watch what just recently happened, which a
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The Fed made a huge move last week that no one is talking about.
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That magnifying glass shows you a small little tick up above that 8 million.
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The Fed just decided to add $300 billion to their balance sheet in one day.
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Let me kind of undo this to show you what he did for the last six months.
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If you look at this, look at the chart of where it went, where it says 8.639.
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So if you look at that $300 billion they just added to now 8.69 trillion.
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You go back five months ago or six months ago to November, we were the same.
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So whatever he's done the last five or six months, they just undid.
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All of these increasing the rates, increasing the rates, increasing the rates, they just undid
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And, you know, the bigger bank CEOs are coming out and saying, yo, you know, we got $2 trillion.
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If we're not going to let these regional banks go out of business in the communities, they're
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And they got another $2 trillion added into it that in case something happens, I know my
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friends at the big five banks, they're not going to tap into that.
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It's going to be the regional and the community ones.
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We're not going to let these banks go out of business.
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That money's going to roll back to them is what's going to happen.
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The bigger banks benefit from something like this.
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But you and I, we kind of have to pay for this.
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And matter of fact, low and middle income, they pay the biggest price because that whole
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concept, these guys get up on stage, sound so noble, like Robin Hood.
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You know, it's like, let me tell you, it's not fair that the rich getting richer and the
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You just added $300 billion to the balance sheet that if you have to build these guys that
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If you decide to bail out these other regional and communities, where's that money going
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Is that money going to go in the hands of the small guy?
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And all of a sudden, we got a new guy that's rich.
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And look at all this money that they're making.
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Powell was this close of going through what he was going through.
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Maybe that was a little bit too dramatic because when you see what happens here next, it'll
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But we were so close in taking the Volcker route, which was the Reagan side, to come out of what
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After Silicon Valley, the Fed set up a program to prevent another event like it from happening.
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Silicon Valley Bank lost money selling bonds before maturity.
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The Fed has guaranteed credit for bank bonds at 100% of the bond value.
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We'll bail you out at 100%, at 100% of your bond value.
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Because it's like the kid that no matter every time he gets in trouble, mommy and daddy bail
00:25:38.820
So that kid becomes a spoiled, rotten kid.
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And in this situation, mommy and daddy is the government and the Fed.
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And these bankers at the top become spoiled because every time they go out of their way
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to bail these guys out, and they become spoiled little brats without letting any one of these
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Some of it took me a year to recover from my mistake.
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Some of it took me five years to recover from a mistake.
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One of it took me seven years to recover from my mistake.
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When you take a risk and you're reckless and you're not responsible, there's a price to
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And a lot of people are sitting around saying, are we going to be okay with this?
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They're going to protect the banks no matter what it is with the bonds.
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We're going to protect that at 100% of par value.
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I mean, if the average investor is like going to the casino, playing roulette, playing any
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game you want to play, and the boss of the casino comes to you and says, listen, don't
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The risk is for you, but there is no risk for these guys.
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A lot of people are saying, well, inflation is going down.
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We are below what we were before and from a year ago.
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Have we always measured success of inflation going down on a 12-month marker or a 24-month
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Meaning, isn't it supposed to be where inflation is at today versus two years ago to say if
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Because if that's the case, inflation is still very high.
00:28:07.440
But they're not selling it that way because I think they just changed something.
00:28:13.720
Every year on February 14th, there is a celebration of love.
00:28:18.620
This February, BLS, which is the U.S. Bureau of Labor Statistics, Government, the Consumer
00:28:24.040
Price Index, which we hope you will love, beginning with January 2023 index, scheduled for publication
00:28:32.020
of February 14th, 2023, BLS plans to update the spending weights in the calculation of CPI
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And that's how we're going to fix the economy by us staying positive.
00:29:06.080
The typical way we've always measured inflation is two years, meaning where is inflation at today
00:29:14.120
If we measure where inflation is at today versus two years ago, which is 1.7%, the numbers are real scary
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versus if you measure where inflation is at today versus where inflation was at a year ago, 7.9%,
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CPI February was 2021 and 2021 was 1.7, new way.
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Let's go back to February of 2022, it was 7.9%.
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Do you see how this whole, by the way, everything I'm sharing with you, go do your own due diligence
00:30:07.740
We're just giving you stuff off the government website.
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This is off the Bureau of Labor Statistics website, stuff that you can go look up yourself as well.
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The Fed also just raised interest rates, quarter of a basis point, which, by the way,
00:30:25.340
Some people were afraid he was going to do half a point, but he went up only a quarter of a basis point.
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Everyone's wondering what he's going to do next.
00:30:36.560
Obviously, we will see what happens because if there is another bank or two or three that this happens to, like Silicon Valley Bank,
00:30:42.860
they may not do anything for a couple months and go back to the Bernanke way of managing the crisis that we have today.
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So this is all new, and the outcome is very uncertain.
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Nobody really knows what they're talking about, including myself.
00:30:56.880
I'm just stating you what's going on today in the marketplace.
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Everybody I talk to at Goldman, at Morgan, you watch the guys on television.
00:31:04.280
Everybody's telling you, nobody's been here before.
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We're all playing it by ears to see what's going to happen.
00:31:16.620
Part of it is there are certain things we have zero control over.
00:31:19.860
Remember, if your name's not Yellen, if your name's not Powell, if your name's not Biden, if your name's not one of the five CEOs of major banks in America,
00:31:27.280
Jamie Dimon and some of these other guys, you're probably not going to be involved in much of this decision-making process.
00:31:34.800
This is what is going on today, and they're all trying to learn how to get out of this mess while they're learning and they're doing,
00:31:43.200
and they have to sound confident and optimistic with you and I.
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So now, remember how I told you we increased 5% in one year?
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In 2008, 2004 to 2008, they raised interest rates 4%, but they did it in two years.
00:32:09.040
This is kind of why we're facing what we're facing right now with banks sitting there saying,
00:32:16.060
If you look at this, unemployment will skyrocket, is what a lot of people are talking about.
00:32:20.940
In 2005 to 2010, if you look at this, 2005 to 2019, unemployment was below 6%.
00:32:30.520
And then all of a sudden went up to 6%, 7.5%, 9%, 10%.
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Because when this happened in 2008, and we haven't experienced, by the way, COVID has got nothing to do with this.
00:32:43.020
Well, COVID kind of, COVID had nothing to do with the economy.
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This is the real economy we're talking about here.
00:32:50.800
The last time when this happened in 2008, when unemployment went the race that it went,
00:32:56.460
here's what happened to suicide rate in America.
00:33:15.300
That's what they're doing to the economy right now.
0.91
00:33:18.040
So, for me, I make a lot of calls and I talk to a lot of business owners, small business owners, entrepreneurs.
00:33:22.900
Two years ago, when I'm talking to them, they were afraid of what COVID is going to do to their business.
00:33:28.620
In 2021, a lot of them are making more money than ever before.
00:33:34.400
People I'm talking to right now who are sitting on a few million dollars, they're not as confident as they were a year ago.
00:33:40.160
I'm having different kind of conversations with people today.
00:33:45.680
New startups vanished in 2008 when they took this approach.
00:33:51.560
Look what happened with the number of startups.
00:33:53.340
It went all the way down to numbers we had in 1994, even lower than the numbers we had in 1994.
00:33:58.680
We all know small business owners employ nearly 49% of people in America have a job because of a small business owner.
00:34:09.000
Because, you know, the banks tighten and they don't lend the way that they typically do.
00:34:14.480
So, now here is the number of births and debts after 2008.
00:34:28.180
We're having babies, babies, babies, babies, babies.
00:34:40.700
Now, I'm not trying to scare the crap out of you right now.
00:34:44.920
I got involved in this business in the 2001 economy, 9-11.
00:34:51.760
I started off being scared about this industry and having to be paranoid because I was in
00:34:58.660
I never thought this thing was going to work out for me.
00:35:00.880
I thought I was going to go back to the military because I didn't think this was going to happen
00:35:06.320
Got involved by possibly the worst time you could have gotten involved in the financial
00:35:16.100
If you're going through it right now, a couple of things I want you to be thinking about.
00:35:18.920
Don't make any irresponsible decisions right now.
00:35:23.340
I'm talking a lot of weird decisions right now people want to make.
00:35:27.660
Just because you're in this place right now doesn't mean it'll remain like this forever,
00:35:33.100
Keep yourself busy with as many positive distractions as possible and avoid having too much time on your
00:35:39.940
Let me give you a couple of things here about this message I'm giving to you.
00:35:47.540
Any kind of sleep medication, any of that stuff.
00:35:51.980
I'm just telling you like you see a lot of this stuff happening to people right now and
00:35:56.160
they kind of want to numb themselves to not go through this pain.
00:35:59.260
You were a real estate guy making 100 grand a month.
00:36:01.800
You're making 7 grand a month and you and your wife and family are going through a lot of issues.
00:36:05.960
You had to give away that car of yours, the Lambo, the Rolls.
00:36:09.860
Now you're eating at Chipotle and you're eating the Chipotle bowls is what you're doing with
00:36:21.000
It ain't that sushi spot you were going to and having Sea Urchin anymore.
00:36:24.400
Now you're going back to ghetto California Roll out of Kroger's or Publix or Albertson's or
1.00
00:36:33.000
And it's embarrassing because you went from the rock star going to parties with a nice
00:36:37.460
three-piece suit on and a nice watch and now you're going out there and it's the same clothes
00:36:42.160
and you're kind of embarrassed and afraid because people are looking at you and people can sense
00:36:46.440
If you're thinking about getting a divorce, wait two years.
00:36:51.000
If you still feel like getting a divorce in two years, do it.
00:36:54.120
If you're thinking about throwing the towel in right now, wait two years.
00:36:57.380
If you feel like that, then consider it then, but not right now.
00:37:06.800
Just go through this season and a couple of things that I'll share with you here to help
00:37:12.660
Scary right now if you've got too much idle time.
00:37:20.960
Anytime I've ever done anything stupid in my life, I had too much time on my hand.
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00:37:28.740
My hair color was orange because it had peroxide in it and I was going to Zuma Beach in LA,
00:37:36.480
If you know what I'm talking about, you know what I'm talking about.
00:37:37.860
If you don't know what I'm talking about, why would you put peroxide in this hair?
00:37:40.160
Trust me, don't go try this at home and go put peroxide in here saying,
00:37:47.720
I was doing the dumbest things at that time because I had too much time on my hands.
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00:37:52.420
Number two, purge your mind of all aimless and idle thoughts, especially those that pry into
00:38:06.720
I hope that don't even let your mind consume any of those thoughts.
00:38:09.500
I had somebody come to our house the other day, and this person was talking about, let
00:38:13.560
me tell you, those people are evil, and that person is this, and that person is this, and
0.76
00:38:18.200
I'm like, I don't even want to put those thoughts in my head right now.
00:38:32.720
I want everybody to have a good life, and I want everybody to do their parts and have
00:38:36.140
their dreams become a reality, because my focus is really my life and doing what I can
00:38:40.700
Don't be thinking about hoping other things, you know, bad things happen to other people.
00:38:45.000
They got to also go through it just like you're going through it right now.
00:38:47.720
Trouble springs from idleness and grievous toil from needless ease.
00:38:57.560
No person will have occasion to complain of the want of time who never loses any.
00:39:03.180
It is wonderful how much can be done if we are always doing.
00:39:12.940
This is by far the worst time to be sitting around, not doing, in idle time, worried about
00:39:19.600
So, things to keep in mind during turbulent times.
00:39:22.640
First, you need to write emotional response, especially if you're in a leadership position.
00:39:28.860
You're a father, you're a parent, you're a CEO, you're a boss, you're a sales leader,
00:39:40.680
But they're leaning on you to be able to hold yourself together and stay strong.
00:39:45.000
You need to write strategies at a time like this.
00:39:47.860
When I went through this, I was not the best salesperson.
00:39:52.360
Every time I was working on Morgan Stanley Dean Witter and I was doing what I was doing,
00:39:56.180
not knowing if I'm going to make it or not, every day, all I kept telling myself,
00:40:00.240
Pat, why are you putting yourself through this?
00:40:05.820
You were 63 Bravo, Hummer Mechanic, Fort Campbell, Kentucky.
00:40:22.780
You'll have a pension to pay you for the rest of your life, maybe 50%.
00:40:25.700
If you do 30 years, maybe you'll get 75% or 100%.
00:40:33.800
Okay, while I'm going through 9-11, I'm like, dude, this is the worst position I could have
00:40:36.680
been in, getting my Series 7 license right after 9-11 takes place.
00:40:41.920
You wouldn't have made some kind of money, at least without some in savings.
00:40:46.380
So I needed the right strategies because I was not making it in selling.
00:40:49.320
I was not a good salesperson in the high-ticket items.
00:40:52.860
I could sell $5, $10 products, maybe $100 products, maybe even $1,000 products.
00:40:57.180
I did not know how to sit down with millionaires at Morgan Stanley selling a million-dollar fund
00:41:07.740
This is very valuable right now, to be able to stay poised in a time like this, okay?
00:41:17.300
And if you're not, if you are a regular guy, you're not a leader.
00:41:22.420
You're a person that may be a potential future superstar.
00:41:27.580
Let me tell you, I'm really impressed by that guy.
00:41:35.560
You show signs of future leadership in seasons like this.
00:41:40.840
Unfortunately, times of crisis is a great filtering system to identify who's a real leader and who's not.
00:41:46.680
You can never tell who's a real leader in good times.
00:41:49.040
You can only tell who's a real leader with poise during bad times only.
00:41:58.880
You need to have the right level of urgency to find a solution.
00:42:01.260
It's not a time to sit around and be thinking about what about this and what about that and what about this.
00:42:04.460
Buffett said something very powerful years ago.
00:42:08.060
He says, it takes 20 years to build a reputation and five minutes to ruin it.
00:42:10.900
If you think about what, you'll do things differently.
00:42:13.960
If you think about that, you'll do things differently, right?
00:42:19.100
That's why I said if you're about to make a bad decision, marriage, kids, finances, all this stuff, take two years before you make a big decision.
00:42:27.080
Because even though times may be hard, if you were good at what you were doing a year ago, two years ago, three years ago, you've learned a lot.
00:42:35.520
And it's a time that none of us have ever experienced in the history of America before that all things are hitting at the same time to the economy.
00:42:45.620
Okay, and partially you're not at fault, but it is your responsibility and my responsibility to do the best with whatever hands that we've been dealt right now.
00:42:55.680
You and I, especially if you consider yourself a leader.
00:42:58.300
And by the way, if you're on a podcast like this, you're on a show like this, you're watching this webinar right now, a lot of people are not on this.
00:43:05.220
Think about how many people could have been on this.
00:43:17.440
They're sitting around worried, stressed out, idle time, checking Instagram stories, checking TikTok stories.
00:43:23.180
You chose to take the time to get on something like this.
00:43:25.680
This means you're showing leadership qualities yourself.
00:43:31.720
They're trying to go through this in a way to eliminate the pressure and what's really going on.
00:43:37.800
But you're saying, I want to face the reality and I want to get some strategies that can work for me.
00:43:51.800
What's the worst thing that's going to happen here?
00:43:53.400
Really, let's think about what's the worst thing that's going to happen here.
00:44:04.900
Can it get very bad to the point that it could cause me to lose my job, lose my clients?
00:44:10.700
Am I the first person that's going through this?
00:44:21.640
I can kind of go through that, but I want to come out of it a winner.
00:44:24.980
I don't want to just come out worse than what I am today.
00:44:27.420
I want to be able to come out with a higher market value than before.
00:44:31.640
Three, confront the crisis with the right level of urgency.
00:44:35.500
Sometimes when issues happen in our lives, we're kind of like, ah, I got time.
00:44:45.060
You cannot afford to not have urgency in bad times like this.
00:44:50.580
Find the roots of the crisis to eliminate future repetition of the event.
00:45:00.600
Maybe you didn't take advantage of the market when it was doing very good and you sat on
00:45:04.660
You're like, man, I didn't even make any money, Pat.
00:45:10.980
Maybe you need to stop sitting on the sidelines.
00:45:17.480
Try Dove Men plus Care Aluminum Free Deodorant.
00:45:21.040
All it takes is a small change to your routine to lift your mood.
00:45:24.320
And it can be as simple as starting your day with the mood-boosting scents of Dove Men
00:45:29.960
It'll keep you feeling fresh for up to 72 hours.
00:45:39.440
With all of the stuff that's going on in the marketplace right now, making six figures
00:45:44.200
today, you got to get your income to a whole different level.
00:45:46.760
You got to position yourself in a place with a company that upside is big long-term for you.
00:45:51.440
You have to be starting to think about those thoughts depending on your age.
00:45:54.340
You may be 35 right now with two kids saying, hey, man, I got to kind of start thinking about
00:45:59.940
But find the roots of the crisis to eliminate future repetition of the event.
00:46:04.520
Create a battle plan, both defensive and offensive.
00:46:12.460
Don't turn a issue that you need to resolve in an hour and let it last a day.
00:46:17.980
Don't let an issue that's supposed to last only a day and let it linger for a week.
00:46:23.520
Don't let a crisis that a one-week-long crisis take a month of your life.
00:46:35.020
Learn to condense timeframes in times like this while you're going through this crisis.
00:46:45.440
You know what's the book I recommended this last podcast that we talked about?
00:46:50.480
The book's title, the book's entire premise was around how to make decisive decisions now in this climate.
00:47:00.260
That's a very valuable skill set today to make.
00:47:05.220
Kai, we came out with this chart, what, two years ago, three years ago?
00:47:12.600
The last 20-some years, ever since I got out of the military and I've been working in free market, free enterprise, financial industry,
00:47:19.080
I've watched a lot of my peers and my competitors, and here's what I noticed.
00:47:22.760
If you look at the bottom right, the red represents the 1%.
00:47:27.340
The orange represents the 10% of your industry.
00:47:33.720
And the green represents 80% of people in your field.
00:47:41.400
I learned that almost everybody can work just as hard as anybody on any given day.
00:47:49.860
Almost everybody can work as hard as anybody on any given week.
00:47:55.840
But they can't do it over a month's span, over a quarter, over a year, over a decade.
00:48:03.080
See, if you look at the difference between the red, it's all the way at the top.
00:48:06.240
When they're running and gunning, they're running at 9.5.
00:48:14.040
If you look at the top 10%, when they're running and gunning, they can compete with the 1% at 9.5.
00:48:19.620
But when they're cruising, they drop all the way down to 6.
00:48:22.320
When you look at the top 20%, at the top, they can compete with the 1% at 9.5.
00:48:28.540
But when they're chilling, their low drops to 4.
00:48:31.780
And if you look at the green, the green will get to an 8.5.
00:48:36.880
But with their bottom, when they're cruising, when times are hard, man, they truly disappear.
00:48:44.820
Just by being on this here, I'm assuming you're automatically probably in the 20% or higher.
00:48:50.480
But whichever one you are, remember when people lap you or they get past you or they beat you.
00:48:58.460
It's typically during scary times while a lot of people are in idle, not doing anything.
00:49:06.300
It's just kind of like, well, you know, my God, you know, the times are very hard.
00:49:13.540
Do not be the person that you use a bad season like this to say,
00:49:18.160
this is why I'm not working as hard because there's just not any business out there.
00:49:23.660
There's plenty of business out there to do for the people that are going above and beyond
00:49:30.960
Next, skills dictates your value in the marketplace today.
00:49:36.560
In this building right now, we have, what is the number?
00:49:46.280
So we went from 8 to 25 to now 65, and we can't fit in this building.
00:49:52.680
If I open that door and you come into this building, people are sitting on top of each other, literally.
00:49:57.000
We bought another building that we turned into a comedy club and a cigar lounge.
00:50:00.540
Now, people are going to be working at it there.
00:50:02.160
We've made multiple offers to buy different buildings and community because we need more space.
00:50:10.680
We currently have 18 job openings today, positions right now, whether it's sales, editor-in-chief, VP of studios, president of studios.
00:50:18.580
We have so many different, managing director of our consulting firm.
00:50:21.160
We got so many job openings today that we're looking, okay, ourselves.
00:50:29.480
I did a training this week just to talk to my guys to see how good they are at sales and negotiation because my job is to train the trainers to make sure all my guys know how to negotiate.
00:50:44.760
How good are the people you're working with at negotiating?
00:50:47.520
What skill sets are you adding in an economy like this to separate yourself from everybody else in the marketplace?
00:50:56.160
In the picture to the right, if you look, it says 2001.
00:51:02.340
The girl in the back right behind that white flash, that's a girl named Soul.
1.00
00:51:07.820
We were sharing the same desk at Morgan Stanley Dean Witter Building in Glendale.
00:51:18.240
The picture to the left, I'm in my office in Northridge.
00:51:21.720
I'm sitting on my computer looking at what's going on with those old earpieces.
00:51:26.520
Before Apple came out with their earpiece, the earpod, what did they call it?
00:51:29.740
Earpods? Is that what it's called, the earpods?
00:51:32.480
I don't even know what they called it back in the days, but that's what the Nextel combination.
00:51:40.840
I'm constantly trying to figure out ways to improve with that camel hair jacket of mine who was so hot,
1.00
00:51:47.700
I'm wearing it in LA while it's 100 degrees, right?
00:52:01.180
But at the same time, I am so optimistic because I'm smelling opportunity.
00:52:14.180
He sees an opportunity and he knows this is his chance to become the hero to his family.
00:52:24.260
I look at this right now and I say thank you to both of them because the guy on the right, 22 years old, he was a little too good at partying.
00:52:30.420
So the fact that he kind of put it on pause, I'm proud of him.
00:52:32.700
And the guy right there, while he was having some success, he did not slow down to celebrate, oh my God, look how special you are.
00:52:41.240
He kept saying, I can do a little bit more at the next phase because I'm going to be able to have my family's dreams become a reality.
00:52:49.900
Because what recreation mode is to tell yourself, I'm not good enough for the next phase.
00:52:58.180
By the way, learning how to be a sales leader, this helps you in everything you do in life.
00:53:01.540
Just so you know, Trump is a salesperson and he's a sales leader.
00:53:10.900
Bill Clinton, for sure, he's a salesperson and a sales leader.
00:53:18.600
Again, these guys learned how to sell and how to drive people.
00:53:26.000
I knew how to sell, but I hadn't learned how to drive salespeople myself.
00:53:33.880
Each time I learned new skill set that increased my market value.
00:53:38.420
I was a business owner, but I was not a good CEO.
00:53:40.360
I spent $50,000 and went and lived in Boston for three weeks at Harvard Business School at their OPM program to learn how to become a CEO.
00:53:56.480
Just like this iPhone, which system are we on right now?
00:54:01.460
Just like this thing has upgrades, you need to have your own upgrades.
00:54:05.100
Maybe you were good for the last level, but you ain't good for the next level.
00:54:08.400
So what are you doing to recreate yourself in a season like this?
00:54:14.380
If you got value out of this video, give it a thumbs up.
00:54:17.120
I got two other things I want you to think about as well.
00:54:19.180
One, if you want to know what drives you, your personality, during a time like this, are you scared?
00:54:27.000
We created this quiz for you to learn about yourself.
00:54:29.260
If you've never taken this quiz before to see which one of the four you fall under, click here, take the quiz.
00:54:37.060
If you've never seen it, click here to watch it.