Well listen, Rick, I mentioned that we were in Las Vegas. Go in and plug in those 30 or 40 Different for 20 3040 Different companies we already have the contact information for.
Absolutely. Who has the next slide now?
I have an old copy of it with me is one that we put out so often when they have which I received from years ago.
Awesome, right? Could you make a note to get that from and to please add it to this new document and make sure that everybody remember has access to this on the fly?
Sure, Kelly.
Okay, so that was that list. Stephanie Johnson had shared a basic plan document with me she's gonna send me a better copy of it. The copy I don't have isn't very good. I don't have it yet. I'll share it with you. Once I have it. The next VRM mastermind we've had two now. The first one was in Orlando MBA. We are now a member of MBA and that means you get discount registration. If you want to do on the the only book which is a member of MBA. We have an exhibit prepare every year in February in Orlando. The second one we just had in Las Vegas, piggybacking on the hypnotherapy and the third one, proposing it at the Ironman event. data points will have the mastermind needed ready first worked 4pm Pacific Time venue to be determined that it will be close to the IMM conference and the forum for June the first and second is the non QM and non agency mortgage. That's more related REO so we thought that would be appropriate and sent out an email two days and we intend on joining a mastermind and I hope you do in Dana Point please email me back let me know so we can accommodate you and we are trying to get through registration as well. And then while we were at the Vegas mastermind, which went very well to great attendance, about 16 members, there were some great pieces of information that were bandied back and forth. We'll send out more information on that shortly but because Steve, come on to keep this brief. Some of the things that came up during the meeting, were some books that we might recommend that you make read or the conversation got around now. Keeping your life balance is important, and it's important to keep your business on track. And so some of the books that will recommend it were atomic habits by James clear, an easy and proven way to build good habits and break bad ones getting things done by David Allen. The art of stress free productivity and the Power of Habit by Charles Duhigg why we do what we do in life. Wasn't so that those were some books that were recommended during the mastermind with Vegas. Harry Solomon recommends this ninja ninja selling podcasts of mindset of open houses. He says it's an excellent podcast What do you have to say about that podcast Harry
one of my agents is using it. I have yet to review it she just started but the first one she will watch what's about open houses and have a mindset that I'm gonna get a listing or I'm gonna get transaction and she got a listing to appointments and she was second choice on one of those appointments the list there but they actually said that very very difficult. So you can't argue with that because right. It's worth listening to I just haven't had an opportunity to.
Yeah, okay. Thanks for sharing that. Okay. And then just a reminder, every meeting, we're going to put the roster into the chat room. If it's not in their way please put it in there. The roster is always the members portal. If you don't have your login you do have definitely what it is aspiration. Password Reset. And this portal is a part of the Arn website and it contains previous recordings from all of our meetings. Agenda information, basic information and mastered the BRM guidelines, just all the information you may need for the group. Will most I put links for the referral list here of like at the time I'll get any information. So with that being said I'm actually the roster that we can put it in right but it's on the on the
membership forum. Members portal. Okay, it's just Steve here. You have to wait a couple of minutes for Steve are there Yes. Welcome, Steve. Thank you.
Thank you, sir. Yeah, thanks for being here. I'm gonna I'm gonna make you post if you want to share your screen. So go ahead. Steve is, as you know, he's a chief investment officer and economist at Washington Trust by giving us an outlet to the economy that we have stayed with.
Everybody see my experience?
Yes, yes, yes.
Thank you again for having me. I always enjoy talking. today to walk you to my thoughts with the economy. It's all about the consumer. Explain to me why. The first thing I wanted to touch on to most asked questions I get other times we will cover those topics first. Personal adverse being what's going on interest rates. What lies ahead for us. So what I'm going to give you feedback and I think they gave this to the last time I talked to you is that this is the Federal Reserve that you need to believe what they say. Pay attention directly because the financial market especially the bond market has consistently excuse me consistently last year I tried to defy the Feds cutting rates and then honestly it's time to get supplies and bounce up again. Similar to what we just saw. This week when Chairman Powell testified before Congress before Congress that given the strength that we've seen out of the economy for the first part of this year, that if they don't see the job market starting to loosen up more than they are going to have to raise rates higher than originally forecasts, and they'd be fast. So I think what that means to me is that originally they were talking around 5% is probably whether you're pausing. Now it looks like it's more like five and a half and potentially even five quarters and I don't think you're going to go out. I'm not saying it's a base case, but I think that if there's any errors, higher rates, lower results. Those are short term rates. So anybody who's got operating mines mind if you take Fed Funds five and a half to five quarters and use the reporter's financial institution that causes the borrower so that's clearly going to be having an impact on the borrowing costs go up like that. That really starts to make certain projects. Just saying Does this make sense? may not make sense, which is what the Fed wants, they want the economy to slow down. When it comes to term rates. What I tell you is I think that we're gonna see the 10 year Treasury fluctuating between four and a quarter. That means that we'll see mortgage rates for the performing mortgages between six and a half, seven and a half. In reality, check this morning rates very, very differential between performing really the same as well. So I think this is the reality that we need to all understand. Your message The Federal Reserve has given here is that there was too much fiscal stimulus, consumers have not slowed their spending enough. That they could say it over your message. Either slow your spending, or we're going to fortunately, wait too expensive to borrow. And I think that's really what their message is. So I don't think everybody in the bond market keeps saying that, well, as soon as the conversation we can decide. And I keep telling people, no, be careful about that process because the problem is so many people in the financial markets I've only been in the business but they weren't around like some of us. Made some of these this is really yummy. Maybe due to inflation, versus other types of things. And so, I think, Chairman Powell is a disciple of left mistakes, all voters in the late 70s and early 80s. And even though they raise rates aggressively at rates, as soon as the economy started to weaken, we had to come back and do it again. So that we had two sessions of whichever one you want. So this is the perspective on a give you go back and look at it in 1977 is when the Fed started raising rates during that cycle. For three quarters and maybe January of 1983 rate cycle. They add rates up to 14%. And the economy officially entered recession. So if you're using a logic the bond markets Chinese and so what I'm going to start cutting rates and what they actually did was the recession start January 19. At heavyweight ad, they raised rates from 14 and 15%. In March of 80, they raise rates from 15 to 20%. And that is when they finally started going that's when they started to raise rates. And that's just why I keep saying plan for the Fed to hold rates maybe pause and stop raising rates. But don't make the assumption that once they stop raising rates that the next move as well be that five and a half to five quarters for the rest of this year. Just to make sure that they don't make the mistake of the previous calculation and turn around and raise rates, right. So that's my perspective. I just rates when it comes to inflation. I think the main thing that I want to tell you there is there's a real difference between what I call Federal Reserve's inflation rate and the consumers inflation for the Federal Reserve says when they look at inflation, excludes food and energy, those involve the consumer in my view has always said the only things that matter the most food, energy shelter challenge. I just wanted to give you his perspective, that the feds corn price they look at has moved down to 4.7% and stomach the 2% the one that in the reality for that maybe the average worker their inflation rate. With the Appalachian consumer price index number. Food increased 10.1%. Year over year basis, energy was at 8.7%. The only benefit that consumers have recently is that for their car, gas prices around 1.9% to heat your home, then you see it on juicy prices almost 12% year over year, and natural gas prices almost 27% year over year, and then rent at 14% year over year. And then you throw in childcare if two people have to work. You see childcare up on a 6% consumer Say what 1.7% I'm seeing much worse than that. And the real problem for the consumer is that that 20 People said get where they're expensive, faster. So that's why I say it's all about the consumer, we want to talk to you about how are we headed for a recession. My feedback that I can give to my board and anybody else is that I believe the average consumer, not the high end consumer. And I would actually say the lower third of the income brackets for jobs probably already argued that they're separate so much. But the next thing in the middle is the one who's under stress now. And what I'm showing you here guys is talking about what we call real average. That's average average minus the inflation rate on a year over year basis. We have been negative for 22 years. And I suspect tomorrow's job market reality and I'm excited they're probably back in that four to four and a half percent range and inflation still 6.4 February number. It's not down to four and a half percent. So we're probably at this negative. And I think that really is what's causing the stress for the consumer is different than the US government. Consumer can't spend money they don't have. They've really got three reserve clothes and they can have their savings account. They can tap their credit cards so they can borrow now and they can tap the equity and if I look at what is going on. Let's look at the savings. You can see this big spike in the pandemic crisis. But after the pandemic and all the fiscal checks that were being sent consumers, the savings rate was almost 35% And you can see since steady coming down, servers having to use their savings to fill the gap between their expenses and their wage. So I wanted to give you that perspective of saying that the average savings rate before recession and started going back to the 1960s with a 9.4% savings. Recognize recognizing though that older time periods, population is much more of a saving. Spending classes who still support 4% And right now we're at 12.7. So my only point is consumer can only take your savings to zero unless they need it. And I'm not sure that they still need to have something for an emergency. So they've almost depleted that one reserve. So let's see what's going on with credit cards. Here you can see right
after the pandemic crisis was over, we bottomed out and then we've seen a steep rise in credit card balances. I think again, my view yes some of this will be related to people going on vacation or something like that. But think most of us are this is the unpaid balance. There's still a chunk of people, especially higher income to pay off the balance. But this is the people who aren't paying off the balance and the perspective I just wanted to give you that on the left hand side of the graph from April of 2000 February is almost 10 years. credit card balances are unpaid credit card balances rose from April of 21. February, which is only two years they present 2022. The consumer has borrowed more in two years than they did during the whole economic expansion. Because of course their jobs growth is fine and placing a job so they weren't having this negative wage. So I think that this is a case again that the consumer is wired to reach the point where they get credit cards. They can't borrow any financial institution very clearly, the Federal Reserve are tightening the standards quite a bit so they probably wouldn't be able to rebalance. The real problem for the consumer is that unpaid balance their minimum payment after at least cover the interest. And when that balance is growing every month because of this negative wage growth. We've got an average credit card and the Fed takes another full percentage, point two quarters and five. That means they'll be looking at a 20% credit card balances that on its own is a separate normal paycheck just to make money. So this is why I say that consumers under stress. That doesn't mean that they're on the verge of collapsing at this point. But I think that we're going to see especially with the Fed to raise rates, that the consumer will come under more and more stress. So that is when I look at reality. I'm trying to think of the average worker and I just said let's assume family three was the child of childhood whether or not worker I looked at those parts bases I talked to about food, energy, shelter, and childcare, core expenses if only one person is working so this spouse could stay home and take care of the child 60 60% of the paycheck just for this car expense. That doesn't cover medical that doesn't cover any other types of spending. If they say okay, well then both of you. Both of us need to go to work. But we have to take on childcare to do that. Well now those car expenses consumed 44% That's more palatable. But my concern from that is that's based on two in one of those incomes goes away because he was in recession and job losses. There on the rest of your stats are trying to figure out how to survive on a monthly basis. And within that I've tried to emphasize that this isn't homogenous, the same applies. It really isn't average worker. So I want to give you a perspective of the highest paid worker and the lowest paid worker based on that. And what I can show you there is the utility sector has the highest average leisure the hospital hospitality has the lowest. So if we apply that same process I was just talking about single agender no childcare but we still have food, energy and shelter. It would consume 30 People said we consume 136% And the reason for that says they have to have two people. And even if they have two people doing the work, now that taken on that childcare expense for the utility worker, they lower their expenses on 23% of their paycheck. But for the leisure hospitality worker, it's still 95% I think that explains why when other jobs we've seen more and more people taking on multiple jobs. They don't have any choice. They probably also have a downsized apartment they're in cut back on the type of food we're eating those types of things. And that's why I'd say that the lowest third of the Asian rapid in the US, the potty argued at the beginning of session. But even that the average wonder people are more in the middle. They're still under stress. So when I look at that, give me a nutshell picture. Are we heading for a recession? My answer is yes. I do believe we are and I think that's the risk of extremely high that you will be in recession by the end of this year. This is a dashboard. I'm not going to walk through basically, these have been leading indicators that have had a very good track record forecasting recessions and the recession is coming within the next 12 months. This dashboard you can see in August of last year, so we're saying why we created average. Now, that gets us in the second half of next year. And I think that's just I don't think it's really the magic. I think it's primarily the consumer agent is having more and more that each of us have other expenses, and they're going to be forced on spending. And then what you'll see as first businesses look at prices trying to sustain their sales. That doesn't work. As a consumer. That's when you start spending hours with employees. That doesn't work. jobs. And the sad reality is that the Federal Reserve fully understands they're going to have it happen cause recession has enough to slow the economy. down enough to actually bring that back down. So I think that's what I would tell you is that I think we are heading for a recession. I think that that doesn't necessarily mean that's a horrible thing. I'll give you some thoughts here as we move along. Recessions normally for people who prepared and are well run businesses, that's where they find opportunities. But that is my forecast to my users that are planning for the recession of an economic storm coming at us. By the end of this year. And if it doesn't, you always happy that they're ready to live as and you're not prepared. I just want to give you some quick perspectives, as well. How can we have a recession when we're still adding some new jobs? And so my feedback to you as I've tried to use this what is job talking your job jobs, everybody says we have labor shortage. And this is the perspective right? I go back to April 2020. last recession and 24 point 6 million jobs were added. April 2022, January 2020. By 2.6 million more people were holding multiple jobs. So that implies that 10 and a half percent of jobs didn't involve the people. So we may have created more jobs. Maybe part time jobs are at a pace that people are having to work two jobs to meet their bills. So that helps to explain how can we keep continue going jobs where they're having labor shows us this because there are people in that lower third bracket, three jobs, and that's filling those new jobs. So that's a prospective lie. And the question that I get from people that is, well, gee, what are you supposed to do first? What are strategies that we should and I'm going to give you two types. One, I'm going to just give one account basic strategies, and the others are maybe a little more insightful.
So when I talk about basic strategies, what I'm saying is that similar to what I told you that if you have an economic disaster recovery plan
together after the last time, then have that time ready to start seeing evidence of recession happening, but at least have it ready to go so that when you start to see the recession signs, you're reacting
to call it luck before I'll say it again. They want to have you watching their channel and that's how they get a new set. So
over and over again and I think that's a really good idea. The reality is
and how you're seeing life
changing behavior I also say and obviously, obviously, succession, most of you know through several recessions, password, recessions, this is gonna be a safe episode, but I don't think this will be a crisis. The problem I think a lot of people remember from the last few sessions you have a crisis, the financial housing crisis. I think this is going to be too much man prices. Now. Supply is starting to catch up with that, especially drop off and that's what these prices. I don't see the other prices. That's the case. What not what is the average length of the business cycle recession is about a month and the average. So neither of those are compares to the financial crisis was last week. And so that's what I'm trying to say is, I think this will be the business cycle has made you successful, will probably be the ones there's gonna be opportunities to more specific things that may or may not apply to you on potential strategies. I think one of the key mistakes that lots of businesses make in their marketing, that is mostly to see that continue to invest in marketing.
That's when he's president. Versus having this type of advertising also thinking to be realistic with your budget numbers. And once again, be cautious and discover that you need to do optimistic positions.
And also say, What makes you successful to your customers as valuable as possible versus just focusing on transactions.
Successful, real numbers they were counting five, seven, so that's it no different than when the pandemic crisis. We were one of the First Nations in northwest
to take legal classes for anybody and not disrupt customer value. And I would say continue to focus on that because that's what's made us successful. Maybe that line of credit, or
awkward MSA deserve a line of credit with one of these and I find that always exciting to see the party slow recession now's not the return on investment, marketing, non productive
investments Trump agenda is to make sure that people are facing that you have a high level you're gonna be able to get back. So those are my general suggestions about potential strategies. What I will tell you as interest rates today, I will tell you the facts
actually show that that isn't actually the case because when I look at the back to the 1970s The Federal Reserve has had nine writing those nine, not a single time
after they finished especially what the Federal Housing recession what we saw is out of those seven among those things, session seven, which was lower so that's just the reality of life
causing.
recessions are not too
Pleasant out there.
The one I just don't
know just want to listen Yes, yes. Yes. That's really important. And he's about
make us successful. And I remember the last recession while he was out to go back to the basics, I promised
myself that exactly what I was doing was not working. And I remember the first time I
did all this work was when I started getting to a value bet me often on the recession. So doing things that we are not willing to do. Those are the two things that kept me afloat in that time. And those are the things that I'm doing now. Right now to see me on the show because in doing those BPOS without me help me and by the value investment wouldn't make sense. So going back to those bases, as you mentioned, it make us successful. Find the opportunities. That's what helped me so what I like to hear from other agents have your eyes working be uploaded in the last recession, is that you did that with your flow like those two things that helped me see that some of the ways to make money. That's what we want to do. What kept me afloat during the last recession. That's my question.
That's a great question. I'll leave it to China.
Today, just just got it signed. So that's something I do, but I had to suck it up and do it. Because money would Legalist in place. That's what you say Harry? Just did a lease. I represented the police. We hate doing those are such a waste of time with the money but got to do it. So you may be listening, Slater. He has two daughters. We live near. We'll see.
Yeah, this is Joe. What I did. last recession. What I've been doing to gear up for this session is just saying no to any leaks or I don't. But I make sure I'm in all right. I got one from the source from it. Three, four months, but look at all the different angles. Right? I don't work by buyers are powerful right now because every before his friend that you get right the deal. I think having all your lead sources all out there keep them updated, being everywhere and not set point or to location
to put them in real estate is local and expired listings and for sale by owners. You go to where the motivated just like with bankruptcy. This was a small time that the web removed where all the consumers had bankruptcies and their properties or that need to be sold. So we understood bankruptcy that's that's a very late for the password and all that all that Deadwood although it doesn't exist for me. So looking at here each person to work and understand where the motivated I'd say that's really VI is the pushing for you admit that the recession last 11 months. You have any accumulation of negative GDP.
You know, the official determination of recession comes from the National Bureau of Economic Research. You have eight factors, two consecutive quarters of GDP is one of their factors. That was something that was always taught college classes and stuff like that. But now, if you have 11 months that's why you have at least three quarters
looks like it's not just interesting, probably with nothing to measure.
Whatever. Yeah, and I've always argued that saying that the recession is always going to happen. That's why I forget the official look at what's going on around. You sessions are open the same way. I think you guys will see that media arson
etc. So far, two quarters of negative GDP in the first half of last year, which is the positive and negative before it shows up. So I've always tell people, I try not to focus on the employment numbers. What's happening with our discussions
and we've got virtually none.
Watching on a relative basis, that's the first sign that
I think I would just advocate. Don't wait for some official records of recession. measured by what you see. What's really worse is
if you got a question for you listen with a special acid steam understand that these five special searchers foods that are very familiar with the top five.
I am not but I can talk I'm going to have to check on the house. That's just for our bed itself. They probably
were at a conference this last weekend and people come up with an emission especial acid in that there were five different companies that made up a majority of that so just looking to find out where these did give me insight with regards to me or committee supposed to be the foreclosure forbearance lifted. It looks like this consensus was that that would be extended. Do you think that would be extended because a lot of homeowners have equity and then there's still a lot of options for the government to have workout programs with with home.
I would help us I do have one place. Let me check and follow up with you on that. Use a stripe from a black knight
mortgage experiment
they have maybe a monthly thing where they show what's going on. Let me ping them and say what's their password standard something like the ISIS call it and say this
was a member told them to easy worship service like that. So to your point yeah, let me get that.
Well, he actually got the information update
thank you for the business news. problem there is that there's a lot of a lot of voters either economic disaster recovery plan. I've never been one of those I've never felt anything like that. What would that include and how didn't plan for disaster? I don't know what
happened. I don't think there's a magic answer for disaster recovery pharmacy. You know typically what I've done so we've got a dramatic drop in
you have an opportunity to say goodbye how much liquidity to say I didn't have to buy most businesses we talked about some businesses are selling. A lot of businesses are putting cash aside revenue in my mind.
I think it's the other key thing you need to have fast recovery businesses. So I'm having a discussion with your suppliers. And I think those are the three major checklists I say for businesses. Make sure that you're comfortable your supply chain identifier, supply chain make sure you have your
projections, what was your worst recessions? How am I setup now but that is not going to be accurate. So those are kind of the three quarters after that comes out
to some of our businesses and we try to talk about this concept please that I would really try to focus this time around
may be having internal discussions about traditionalism the opposite just like ours to get
more discussion on because we don't want to be rash. To say
that's very helpful.
want people
to have the conversation a little bit differently
so I'm going
to film some of this with other firms
more successful businesses while trying to override social media. I think the best advice we have you didn't have a TV yet right.
I mean, please follow that. I'm not sure why we should just focus on your work which stuff here.
Many of us making affordable. I think that's just reassuring your customers your sensitive
business the more they hear about
social media maybe.
They think that is as one gives you a lot of information. That is a lot less bias than other sources. And I think it's something that I would say that I do put out a public site, and that's part of the harvest. You want to disseminate information out to the populace. So that's something I would encourage you to take a look at. But I tried to focus on the real world stuff was going around what's going on and it's at least I've been told it's in plain English.
Our website you can sign up in our website.
He makes
absolute It's my pleasure. That's why I'm here.
Steve, thank you for talking. Thank you so much. I want to end the meeting. I have a bunch of.
email this morning, he sent it back for some time
and it's good
anything you wanted to discuss
just real quick. One of the things that I do, I take all the news and I send it to the press production so I can tell them
what do you do Jackie Say that again?
I said my update information on the market. Reports from realtors say sales are way down. I love the price correction. I use I look at all the realtors every report I can get if there's something in there I take a snippet out. We'll just put up a bunch of links
Could you send out
yes Kelly also that along with me
my domain back to my email. A tip. Tip Tip
READ IT guys but if you are not tracking MX toolbox and edit you can also email as well.
Sorry, my brain just don't remember it. I mean look it up.
MX toolbox which will tell you if your domain is blacklisted, it's expired. There's a free subscription and there's one that's like 130 a month all the technology that it needs right now. Making sure that your domain is protected the site that any user that you end with emails, they will make sure that nobody like for example my hosted my domain whose ultimate DNS on my on my server for my website. They also I didn't realize control my MLS distribution. And if your filters and authentication codes are not up to date, people could not your emails are blocked and you don't know so for example, no one with a Gmail account is getting ready to move to tracking this stuff. Send it in MX toolbox, a tools that can keep you ahead of that price. I just wanted to mention that. All right, well, we're past one. So have a great week. And we'll be in touch with you are intended to that's why a man in jail. Let me know what's making us let me know Have a great weekend.
