And then once they move

up, you're flat.

then you're flat.

That's all I'm saying.

I'm just reminding people of mathematics.

So even if oil stays up, it will become non-inflationary, okay? And much less if some reasonable solution occurs and it falls.

Now, why is that relevant? What do I think happens when it stops being inflationary? The Fed will at some point lower the rate.

What canary scares you the most right now?

Here we are at interesting times, which would be an understatement of the 10-year history is just north of five there all of a sudden you know multi-family is really starting to take a hit these aren't necessarily directly correlated per se but just in general what's going on today

Let's take a couple of things and then I'll let you jump in.

I know what's not happening to the interest rate.

One of the popular narratives is what I call the Rip Van Winkle narrative.

Like all the investors were asleep for 40 years.

They woke up and found that suddenly we had a big deficit and that we had a big outstanding federal debt problem.

And they all panicked and said, oh, you got to pay me more to buy the debt.

China?

Warsh might look at taking out owner's equivalent.

I think there's a chance.

I think there's a chance.

But my comment is take out everything that consumers don't pay for.

Oh, there's only one thing.

But why would you put in something they don't pay for into a consumer price index, right? So take out what they don't pay for.

And then for a very different reason, take out energy.

next quarter you're going to get even more if the president- I

relatively secure, is it a surprise

that it does well almost all the time? No, it's not.

When you throw in, oh, yeah, and by the way, we can pick up some trade business over there.

That's good.

Some trade business over there.

Some pick up some arbitrage.

in producing more cheaply there, of course, right? But this is a powerful, powerful beast in and of itself.

How does that affect office space going forward? Curious your thoughts on commercial real estate.

Sure.

And I think that's the nature of a young person.

I mean, the job market, I'll give you a variant of that.

I get asked, I stay in touch with a lot of former students and I talk to them about their career.

Alumni weekend was this last weekend.

So I had several drop by and so forth.

And, you know, irrespective of their age, it's the worst age to find a job.

I want to just dig in for a second about what are you spending your time doing? How are you thinking about what it is that you want Lineman & Associates focused on and what the direction is for the team there?

How concerned should they be as us being in a stagflation economy right now with no job growth and no opportunity?

So y'all should just commit suicide.

Robots and AI are going to take everything.

Look, all of history, and we don't have a lot else to go on other than history and intuition, all of history says The more technology we have, the more employment we have.

And every time, and this is true for 125 years, and every time everybody says, but this time is going to be different.

And it's not different.

And it's not different for a fundamental reason.

And so just for a moment, if you would, talk about the $175 trillion of net wealth in America and why, because of that number, you're not concerned about our $37 trillion of gross debt, $28 trillion of net debt.

But let's park that to the side and not go there.

And I'm not taking off all the unbooked liabilities that are out there.

So I'm just saying, let's say those two wash.

And I'm just focusing on something I can cleanly make.

So we've gone from, as you say, half trillion.

And that same number, that same calculation is $150 trillion today.

That's a 9.6% CAGR.

And therefore my bet goes there versus going to somewhere where there's just a supply and demand imbalance today.

So talk for a moment about that offset of $65 a barrel if it stays there to your loss of GDP due to tariffs.

So just on the tariff loss, we're not going to lose as much as he originally came out with.

We're going to lose.

I think it's going to go from about an average tariff of about $3 per $100 actually imported to maybe $5.

And that's detrimental.

It could be $6.

So that's harmful.

Are there the top 1% of the US population and not even the top 1% of the US population, like the top million people who benefited from that growth in GDP and the other 360 million people are sitting there watching that number go, but it doesn't come back to them?

Will you walk through your math?

Well, let me... set it up.

When I wrote that, it looked like it was before revolution, right? And it looked like it was going to be about a 3% increase in tariffs from about $2 to $3 per $100 of imports to $5 to $6 of tariffs on $100 of imports.

The new math that came out right after we went to press says it's right now closer to $20.

of tariffs on $100 we import on average.

That's the weighted average.

Well, that's obviously a lot bigger.

But do you think that that's what made the market do what it did last week?

So debt expense, you have a great analysis in the letter that talks about taking GDP and doing the PV of GDP, which gets you to some type of value for the US economy between four and $600 trillion.

Okay, so I finally am able, I've come up with what, because Musk is so much in the news.

I think I've come up with the simplest analogy why our outstanding federal debt and deficits have no notable impact on interest rates, which by the way is what all the empirical studies show for the United States.

You can imagine a lot of PhDs have studied that, okay? No shortage of studies on the impact of deficits and outstanding federal debt on interest rate.

In fact, two people at the Fed just put out a meta study.

And they found that essentially if you raise by, I'm doing this from memory, 500 basis points, so five percentage points.

So that's a pretty hefty deficit increase, right? It has something like seven basis points or 10 basis points on the long-term rate, which is to say you couldn't tell.

From 92 billion to 142 billion over a 10-year period on average to last year, okay? So people sit there and say, can you rebuild a house in Palisades and get insurance for it? Can you build in Southern Florida and get insurance for it? And what does that do to the cost of living in those markets for both renters as well as homeowners?