In the first part of the show, Jason Hartman talks about Silicon Valley banks and how they’re offering new hires 100% mortgages in just 24 hours. He also answers a question from a listener about the practice of Refi’ Til Ya Die. Afterward, he interviews Christian Stadler, a Professor of Strategic Management at the Warwick School of Business, strategy contributor to Forbes magazine and is author of the book Enduring Success: What We Can Learn from the History of Outstanding Corporations. They talk about Brexit, battling terrorism with open borders, immigration, and self-driving car.
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Jason Hartman 1:03
Welcome listeners from around the world. This is your host, Jason Hartman, thank you so much for joining me today as we dive into Episode 708 700. Nate, gosh, is the mortgage meltdown going to come back? Are we going to have another one? Are the banks getting too crazy or the is it getting too frothy? Are they lending too much money has good common sense and prudent decision making has it gone out the door? While I want to thank you to our former investment counselor, and listener, Patrick Perry, good friend of the company who sent me this article on how Silicon Valley banks basically are offering new hires of these tech companies get this you’re not going to believe it. 100% mortgages on just 24 hours notice Hmm. You know, I remember back in 2000 to 2003 2004, as we were leading right up to the financial crisis, getting emails saying one day out of bankruptcy one day out of foreclosure, one day out of prison. No, they actually didn’t do that last one was a joke. Okay, you know, I say a lot of the stuff I say on this show is for entertainment value. Actually, though, I bet they would have made the loan to someone one day out of prison as well. FICO score 560 and above. We can finance you for 95 or 100%, loan to value ratio. And, you know, we’re seeing some inklings of this craziness again, aren’t we? Yes, we are. So yeah, Silicon Valley Bank will give you a 100% mortgage. cheerfully, they will supply it on 24 hours notice, with all the white glove service trappings you could ask for. And that’s what this article says this article is in. Gosh, what publication is this? boing boing dotnet? Maybe that’s a Silicon Valley publication? I don’t know. Never heard of it before. But anyway, yeah. So it says, you know, you want to go to get a job at one of these big tech companies in Silicon Valley and you’re maybe you’re getting relocated and, and you need a 100% mortgage on your massively overpriced, multi million dollar, two bedroom, one bath, Silicon Valley home and you need to know in 24 hours if you can have that mortgage. Well, that’s back again. So Patrick, thank you so much for sending me that article. It is mind boggling. What is going on out there. It’s really mind boggling. Well, we’re getting Today is going to talk a little bit about, yes, you have it, great companies, and the Brexit, what it means to real estate investors. We’re probably done with this Brexit subject, I think for a while, but you know, it’s somewhat recent. So we got to talk about it a little bit, because there’s still some, still some important things. But we did have one of our clients and listeners that sent over a note about refi till you die. You know, we recently ran a show on that. And I just want everybody to understand, of course, when you refi till you die if you’re taking cash out of the property, yes, you’re increasing your loan balance, and potentially, but not for sure, just potentially, but I will say probably increasing your mortgage payments on a monthly basis as well. But as you do that on these may be 12 years cycles remember rule of 70 two’s property doubles in value every 12 years it just a modest 6% appreciation, nothing crazy. Just kind of add? Well, what many experts would say is the national average? Now why do I have to say that way? Why can’t I just say, that’s the national average? Well, because everything is more complicated than it looks on the on the face, right? You have to slice and dice that into which index you’re using. What markets does that index consider is that the silly Case Shiller index that only does 20 markets and 14 or 15 of those, I wouldn’t touch with a 10 foot pole because they’re places like Silicon Valley that are way too expensive and way too cyclical. Remember, we like the good, prudent, conservative, linear markets that just chug along and do their thing. You know, that old story of the tortoise and the hare well You might also compare it to something like an airplane versus a cruise ship, right? Everyone knows an airplane is gonna get you there a lot faster most of the time, but that cruise ship, it just chugs along at 20 knots, and it just does its thing. And as you relax and you have a pina colada, maybe you go and do a little dancing in the nightclub on the cruise ship, you go to sleep you wake up the next morning, comfortable, no TSA, no big hassles. And guess what you’re there your new port of call, because it’s so consistent. It is moves along, like the tortoise, and it just gets there. And it does it over and over again, very reliably, with a much lower cost per passenger. Much less complexity than that airplane, and hey, I like airplanes too. But I’m just saying it’s that old metaphor. The tortoise and the hare. So yes, you refi your property, and your payment goes up. But your rents are going up all those years, at least historically. Of course, we all know, rents go up. Remember that funny guy, he was actually running for office? Was he running for president? You know, there’s a whole bunch of people that have run for president you’ve probably never heard of. In fact, I remember a friend of mine years ago, saying that there was actually a book with everyone’s name that has ever been written on the ballot in this book, and I’m sure it’s in a database that ran for president. So if you don’t know who to vote for, and you don’t want to vote for the criminal known as Hillary Clinton, and you don’t like the guy that just says silly things like, you know, very politically incorrect. If you don’t want to vote for him, either. That would be Trump, the good old trumpster then you can just write your own name and on the ballot and you’ll be in that database. Every one that was ever written in, it’s actually not everyone that ever ran. It’s every one that was ever written in. That’s got to be a pretty big list nowadays, right? Thank you should write in some fake names. Well, you can always do that. But look, just understand that the idea of Rifai till you die is that your rents will go up to meet that new mortgage obligation and certainly, historically they have, because remember, everything responds to the pressure of the marketplace through time. You have people in the marketplace that are thinking of doing things that are always faced with choices. So if they’re an owner occupant or not an owner occupant, just an occupant, they need a place to live, they need a house. They have to answer one of three questions. Should I buy? Should I rent? Should I be homeless? They don’t want to be homeless. So the two remaining questions are buy or rent and They are bound by the pressures of the marketplace. What is the cost of buy our interest rates a lot higher? Well, that’s gonna make my mortgage payment higher. So then maybe I’ll rent? Well, what if a new investor is thinking of entering into the investment market and renting out a house to a third party? They’re going to look around and say, how much does financing cost? What are current rents? Does it make sense to invest? And if they decide No, it doesn’t make sense to invest, then that limits the supply of rental housing stock? So all of these questions constantly, every player, every actor in the marketplace, whether they’re buying or renting, or investing, they always have to answer these fundamental questions. And if the questions don’t make sense, theoretically, they will make a decision. That is the sensible, logical decision as things go. So I just want you to know In the refi, to die scenario that I’ve outlined many times on the on past episodes, nobody ever said the properties would be free and clear. That’s not the idea. That’s a bad strategy. We don’t want free and clear properties. We like leverage. We want the money out of the property, we want to get engaged in equity stripping, so we have the cash out, because there’s no tax on borrowed money. This is the most tax efficient way and the most wealth efficient way in the most asset protection efficient way to extract the wealth from your properties through my refi till you die plan. So please, I beg you, go back and listen to that again. And if you don’t want to listen to the last episode, where I covered that, go to Jason hartman.com and type refi till ya ya you know slaying Rifai till you die and listen to some of the old Older episodes where I’ve talked about this as well. And I think you’ll really enjoy them and get a lot out of them. And with that in mind, remember, we did not, I repeat, we did not change the date on our upcoming event which by the way, I’m so happy to see so many of you are registering for tickets are selling like hotcakes. And folks, you shouldn’t eat hotcakes, because they’re not good for you. But this event will be good for you. And that is our income property software and Buying Event. It looks like we’re going to have four Yes, four local market specialists. They’re talking about properties in their areas. You’re going to learn how to analyze Real Estate Investments like a pro. And we’re going to do some case studies firsthand case studies some role playing on whether or not you should make a go or no go decision on a property live stuff. It’s gonna be great event. This is a totally new event for us a two day event in Phoenix on September 10, and 11th and early bird pricing right now pricing will go up where tickets are selling like hotcakes. So get your tickets fast before that event fills up and before the price goes up, as it fills up, go to Jason Hartman calm and click on the Events tab or you can just go directly Jason Hartman comm slash events and join us for that. Also our venture Alliance event coming up. We’ve got a few guests that have registered for that as well. Remember, you can do that right there in that same event section come as a one time a guest for just $2,000 Hey, these venture Alliance events these are first class events that are high end, okay, these are for really serious people. So check that out. Also in the events section at Jason Hartman calm. For more information, just go to venture Alliance mastermind calm without further ado Let’s get to our guest and dive in to this topic in more details we talked about real estate, Brexit, how investors are affected and great companies.
It’s my pleasure to welcome Christian Stadler to the show. He is a professor of strategic management at Warwick Business School strategy contributor to Forbes magazine and author of enduring success, what we can learn from the history of outstanding corporations. He was against the Brexit, he wanted Britain to stay in the EU. So we’re going to talk about that and get some of his thoughts on the economy as a whole. And some of these sharing economy types of businesses, which I think you’ll find very interesting as well. Christian, welcome. How are you?
Christian Stadler 13:48
I’m fine. Thanks for having me on your show.
Jason Hartman 13:50
It’s good to have you and you’re coming to us from where are you located? I’m located in Bob’s
Christian Stadler 13:53
small beautiful town in the South East of England. Fantastic.
Jason Hartman 13:58
Well, first of all, The Brexit that’s the big thing in the news, Britain has exited the EU they’ve gained their independence. You were not in favor of this. Tell us why?
Christian Stadler 14:09
Well, Poppy, I’m Austrian myself. So living in England, obviously I will, for very personal reasons would prefer if we would stay in the European Union here. But also for pure economic reasons. I think virtually, whenever everyone I think is too strong statement, yeah, but most experts have agreed and the vast majority of economists that this is not a good thing from an economic perspective. In the short run, it creates a lot of uncertainty. The markets don’t liked it. And we have seen the effects immediately with the pound dropping to its lowest value since 1985. With the markets reacting strongly after Brexit in a negative way, in the long run, it depends a lot on what the outcomes will be, but it’s a very hard task for the new Government to find a deal that is favorable for the United Kingdom
Jason Hartman 15:04
to find a deal, what do you mean a trade deal? Or what are you talking about?
Christian Stadler 15:08
Yes, I mean, there’s various options on the on the table. The problem is partly the way that negotiations are structured. Once, you might have heard of these famous article 50, which means essentially that you trigger the official negotiations with the European Union. And once that is triggered, there is only a two year period until you’re out of the European Union. Now, the European Union has made it clear that they will not engage in any informal discussions prior to the triggering of this article 50. Now two years is an extremely short period to renegotiate relationships with the European Union. So in practice, you probably have only two options in these two years. One option would be that you will copy a model that is very similar to Norway. Now the Norway model is in essence that you have all the duties as the members of the European Union, including making payments to the European Union that are similar to the ones that are members with not having any say, in decisions that are being taken by the European Union. So obviously, that’s not something that is particularly advantageous for the United Kingdom. The other option is that you fall back on the regulations of the World Trade Organization. And that is something that is is not at all desirable for the United Kingdom because it would give them a much harder time to access the European Union and the types of deals Yeah, like the one that is currently in debate with, with America, the one which is close to being finished with Canada. I’d like to take 10 years or potentially even longer, so not something that is possible to be achieved in such a short time. That’s why it’s really Such a big problem for the United Kingdom to find a way out of this self inflicted crisis.
Jason Hartman 17:06
Do you think that other countries will leave the EU now? Well, is this a trend? Is this an anti establishment, anti bureaucracy, anti big government, anti globalism trend.
Christian Stadler 17:19
I mean, these trends are certainly there. Whether these trends are so strong that countries leave is really hard to say. Partly, it will depend also on what happens with the United Kingdom, which means that the European Union will try to well maybe not quite quite punished, but make it a difficult pirate bargain for the United Kingdom so that it doesn’t give the impression that everyone you know, you can just pick and choose and get those things that you want because ideally, where the United Kingdom would like to have full access to the market, having possibly even a say in banking regulation, which is particularly important for United Kingdom but Being able to limit immigration in a way that the country seems to be fit doesn’t mean no immigration, but basically having a you know the last word and who is allowed to come in and who is not.
Jason Hartman 18:10
I have a good friend of mine who lives in Vienna, you’re in your own country in Austria. You know, she is very, very concerned. And she says everybody there is very concerned about the possibility of another terrorist attack. Of course, to give a time perspective, just yesterday, an Islamic terrorist ran over and killed about 80 people in France and injured another hundred people. He had guns and grenades in his truck. Of course, France has very strict gun control, but I guess I guess the terrorists don’t respect the laws. Imagine that. This is an immigration problem, don’t you think? You know, people people in Europe are very concerned about this stuff. And, and and the EU seemingly, and I’m not an expert on this has has forced these European countries to let their to let their countries be overrun with immigrants that have questionable backgrounds. from third world countries are having is this is this right that they do this?
Christian Stadler 19:04
So this is a difference between perception and what is happening as well in this context. So first about the security issues. In fact, one of the potential mores for the UK is that they will not have such an easy way to coordinate with security services with secret services, which are part of other countries in the European Union. Yeah, there’s various regulations that make these coordination easier when you’re part of the European Union. So in fact, you know, as you say, terrorists do not respect borders. Being not able to coordinate so easily and so straight forward makes it more difficult to battle terror, terrorism.
Christian Stadler 19:47
The fact that you have I
Jason Hartman 19:51
just kind of don’t understand why countries would relinquish their sovereignty to this globalist organization. Like the EU, I mean, when I saw the Brexit happen, I predicted there would be short term pain, but long term, I thought it would be better for England. And, you know, that all remains to be seen. It just seems like they’re relinquishing their sovereignty. I mean, why should they do that
Christian Stadler 20:13
yet? Let me just, you know, before I go to this, let me one more make one more point on the terrorism story. Yeah. So, you know, open borders means open borders within the European Union. The European Union doesn’t have open borders do the outside world and right, but
Jason Hartman 20:28
they they do by default. I mean, look at Greece, look at all these countries have just been forced to take all of these Syrian refugees. And, you know, if they if they weren’t part of the EU, they could all do their own thing, but they can’t be you pressures them
Christian Stadler 20:43
well, in the European Union has been, you know, tough on this since the heydays, about a year ago. Now, specifically for the United Kingdom. One of the kind of gentlemen’s agreements they have is that France keeps mining On the French side, rather than letting them through to England is a big camp in Calais and not being part of the European Union. It would be surprising if the French continued to do that and just let them through. So in fact, you know, it enhances this particular issue for, for England. On your other question about the silver entity? Yeah, one has to be a bit careful, you’re all the big decisions are not taken by some supernatural body, but they are taken by the member states. So there’s a council of ministers where the respective leaders of the various countries come together and be able to take decisions on what’s happening and what’s not happening. So a lot of things are blamed on the European Union, but they actually, you know, come from the various member states. You simply it’s simply not true that you give a silver entity by being part of the European Union. It’s not the same as being part of one country. There’s still a very distinct difference.
Jason Hartman 21:57
Yeah, yeah. No, I know. It’s a different model than that. Being annexed by a country for example, you know, it’s it’s not that but it, you know it, you give up some of your sovereignty would be the more proper way to put it. Because, you know, if you’re giving up tax revenue, that’s some of your sovereignty or you know, the money, right. It’s just money. So that’s, that’s part of it. So what does this mean for the overall global economy? And particularly, we have a lot of listeners who are real estate investors. I’d love to hear I know it’s not your specialty. But if you have any thoughts on it, please feel free to share them. And tell us about all that.
Christian Stadler 22:35
Well, you know, it might not affect the wider world, it certainly has effects for Europe is had effects for the United Kingdom. But how big the waves are in the United States, in Asia, in Africa? That’s really hard to predict. Yeah, it’s possibly that they have some issues with him with exporting goods. to Europe to the UK, because their currencies are both currencies are likely to go down, which makes it more expensive to buy products that are produced in the United States. Over here. It could mean on the other hand, if you are a real estate investor and you want to invest in the UK, in London, for example, as a market that right now is a cheap pound, you have opportunities, and I think we saw a little bit
Jason Hartman 23:27
of that let me just chime in on that, even though the pound is down and you know, so on the currency conversion, you’re better off, the prices are still insane and it makes no sense at all for real estate investors. You know, it’s it’s that that that is the kind of cyclical market that is just absurdly price, and the rental value ratios are awful. So you know, anyway,
Christian Stadler 23:49
but go ahead. Yeah, I mean, one of the the mores if you’re an investor in London is that if a lot of the big companies decide to partially move staff to you Did you notice less need offices office space? And that there is less people who need housing and prices go down? So you could have that effect as well? Absolutely.
Jason Hartman 24:11
Yeah. Okay. All right. What else as far as the global economy, real estate markets around the world, it does seem like one of the results is that it will give the US Central Bank, the Federal Reserve, a lot of excuse to keep rates low, which there are many critics of the low rates, of course, because it’s not like it’s all good. There are negative side effects of low rates for sure, especially for older people. And it gives the Fed an excuse to keep the rates low, because, you know, instability, so on and so forth. We got to keep rates low. And so for real estate investors investing in us real estate, I mean, that’s a fantastic opportunity, I believe, because it means higher prices in the future likely, it means very low rates, you can lock in 30 year three decade long fixed rate loans at incredibly low prices. There are many Any aspects to this? So please, what are what are your thoughts?
Christian Stadler 25:02
No, I mean fully agree I there is for nowadays an excuse, and this excuse will last at least one other couple of years where there’s a lot of uncertainty. Once it becomes clear what the solution will be over here, and there’s more certainty, dancing that will be carried harder to sustain, but at least for a couple of years, I see this trend absolutely playing out exactly the way you describe it.
Jason Hartman 25:23
What else should we know? I mean, what questions have I not asked you that we should talk about here? There are many political ramifications. Of course, the politicians are all trying to scramble to, you know, hold their power and do their thing. Of course, there are immigration issues, both legal and illegal. What do you think about some of these issues?
Christian Stadler 25:45
I mean, at the moment is is really key as when you look at the politicians here. Yeah, it is painfully clear that no one expected the result that we got here and as a result, no one was prepared. So either Even those who were, were the leaders of the leaf campaign had never thought this seems to happen. Yeah. And they have no idea how they actually go forward. Yeah, that’s pretty worrying. For companies. I think one thing that that we see is that they all take a wait and see positioner they are preparing potential exit plans for part of desktop part of their business, if it becomes harder to do business, from the UK, for the rest of Europe. You see, for example, a lot of the American banks have their headquarters for Europe in the UK was a perfect entry market. Yeah. Now should it become tedious to do business with Europe from the UK, they might move to Amsterdam, they might move to Frankfurt. They might move to Dublin. So one of the we talked about real estate a minute ago. Yeah, one of the things that we’ve heard is that there’s expectations that the Frankfort real estate market is heating up. Because banks might move some of the activities from from London over there. Now as this is happening, that could mean, you know, job losses over here. Maybe not dramatic, yeah, but sort of slow missing of additional investments, less new jobs created. So that’s really a big worry for, for varasi in the UK at the moment.
Jason Hartman 27:27
What do you think about the direction of the political climate in England now? Will it become more conservative or is this a vote for conservatism or will it become more liberal?
Christian Stadler 27:39
I mean, in the short run, certainly more conservative Yeah, we have had most of the cabinet positions for new governor government announced by now and they are decisively to the right of the former government. So absolutely true. In the short run now, I guess it depends how well this government fares whether they will be In another election, a new trend towards liberalism. In the long run, I think one thing that we have seen in England, and we see across across Europe, Europe, this is not just a vote about immigration, it’s also a vote about the law of the working class, having had a tough lot. Since the 1970s, things seem to get a little worse every year and they feel forgotten. And they really wanted to also show that to the establishment, which is Brexit word. Now, at the moment in most European countries, that’s a trend towards the right in some places like Spain, and Greece. It is a is a move towards the left. Yeah, but it is a it is a strengthening of populist parties that sit on the more extreme spectrums of the political scale.
Jason Hartman 28:53
Yeah. Okay. So when it comes to the issue of immigration is is immigration Good for an economy or is it bad for an economy? Of course this debate rages on everywhere. But what are your thoughts?
Christian Stadler 29:08
It does? Yeah. If you look at various studies that are trying to see whether they take more or give more, they all overwhelmingly come out with a resulted from a pure contribution to government coffers. Immigration is a good thing. Now, where we need to make a distinction is when you look from an individual perspective, it depends a lot in which type of job you are in, if we talking about unqualified, blue collar workers, who are finding competition from people who come from other countries where they are prepared to take lower salaries. That’s you know, from an individual perspective can be a negative point of view, but overall, the strong evidence now the reason for that is twofold on the one Him, it has to do with demographics, most of the immigrants tend to be younger and younger people are more likely to contribute, rather than take out from the social system. That’s one reason why immigration tends to work out positively. The second one is what we would call as an economist that the our self selected, group self selected, in the sense, it takes initiative for you to leave your country or even you know, if you look at a terrible place, like Syria, you can stay there long, the less or you can just move to your neighboring country in Libya and see and hope that things go somehow become better to make that journey which is difficult and dangerous across the Mediterranean many diet or whatever it takes that sort of initiatives and people with initiative tend to be more successful, ie they tend to then contribute more to an economy. That’s
Jason Hartman 30:52
just that’s interesting. You say that, and that’s a good point, and I can definitely see what you’re saying. However, I just want to tell you, I was reading An article about that, that was really saying like the opposite of what you’re saying it was saying that the people who leave are the are the traders. They’re the people who bailed out. They’re the people who are the, like, the lowest quality because they wouldn’t stay and stand with their country. You know, the idea of you hear this American idea, or you see these American flags whenever there’s a big troop movement, you know, on on the back of a car that says, you know, it’s got a picture of the American flag, and it says, these colors don’t run, you know, right. So the idea is, they’re saying that these people are the runners, they’re the chickens. They’re the people who just bail out when things get tough. Now, granted, listen, this is a warzone. So this is not like, in a minor problem. Obviously, I would probably be leaving too. But I’m just I’m just wanted to point out that CounterPoint.
Christian Stadler 31:48
So I mean, from the from the perspective of the countries which are losing the immigrants, that’s, that’s true. Yeah. But from the ones that receive it, it’s a positive one. Yeah, there’s this term brain drain, which I guess We haven’t heard in a while. But in the 90s, this was something mentioned a lot. Yeah. Where you have a lot of smart people moving to New countries and the countries that receive them, they benefit from that the ones who lose them for them. Yes, it’s a negative calculation. And United States as a young, long history of immigration that has been tremendously positive for the country. You look at the largest companies in the United States, the fortune 500 companies here. Now 22% of them were founded by children and immigrants and 18% were founded by immigrants. So that’s, you know, a considerable proportion of the largest organization in the United States were founded by immigrants now considering that only about 10%
Jason Hartman 32:49
of companies right, so you’re saying, I mean, you’re talking about all of the the dry cleaners, the liquor store, and
Christian Stadler 32:55
I’m talking about the fortune 500 companies. Oh, really, you know, the most successfully, but But what do you know? Is it? I mean, it’s
Jason Hartman 33:02
interesting in this, is it fair to classify white immigrants as though they’re one generic thing? isn’t an immigrant who’s highly educated from Europe or India or Asia, different than an immigrant who’s uneducated, from Mexico, for example. You know that I mean, is it fair to say immigrants and immigrant the world around? Or, you know, are they all the same? Of course, they’re not, you know, some come with money. Some come with education, and you’re welcome to argue which one’s better or worse, but I’m just saying they’re not the same, right?
Christian Stadler 33:33
No, truly, I didn’t. They’re not the same. Yeah, absolutely. Yeah.
Jason Hartman 33:36
I mean, you get these really highly educated engineers from India and Asia, versus refugees from you know, a dead backward country literally, where everybody’s just destroying each other. I mean, is that that’s not the same thing is it? And now granted, certainly many of those people, most of them want to leave they’re there. They hate those monsters that are destroying their country, of course, but you know, they certainly Haven’t been educated in the top schools in the world and, and they don’t have money. And you know that I mean, you can argue those are the things that an immigrant would contribute to an economy other than just working hard. Right. So
Christian Stadler 34:11
that’s true that that’s a difference. Yeah. But what they all have in common is his early argument about being a self selected group. Yeah, those who actually decide to leave and start. So also those guys, you know, who come without education, they are more likely to, you know, start in a corner shop and make a living out of rice. Yeah.
Jason Hartman 34:30
And they’re more likely mostly to appreciate what they have and the people who take it for granted. Right. You know, we Americans have all seen this. And of course, we realize it, you know, where the family you know, that was the Japanese immigrant that got out and, you know, World War Two, for example, came to the US opened a liquor store started investing in real estate, and then through the generations, each successive generation just upgraded and upgraded and upgraded and now they’re rich and successful and You know, contributing huge tax dollars to the country. So
Christian Stadler 35:03
yeah, what do you have sometimes you have with, with poor immigrants, they might understand markets that others don’t even find attractive at that point in time, but then it becomes attractive over time. Yeah. For example, Bank of America was found by a ponytail an immigrant who understood that his fellow countrymen can’t get loans, the usual way. So I start is his bank to make that possible? And now, I mean, look what became over time of his bank.
Jason Hartman 35:30
Yeah, right. Right. Yeah, that bank became a really crooked enterprise that could cause the banking crisis in the financial meltdown around the world and bought Merrill Lynch and other crooked company but anyway, that’s another discussion. Just Do you notice how I just want to pick up everything you say?
Christian Stadler 35:50
I, I guess
Jason Hartman 35:52
this is for entertainment value. Okay, so don’t be offended. But yeah, absolutely. Well, what would you like to see With our audience that maybe I haven’t asked you yet, Kristen, as we’re wrapping up, I mean, there are some talking points here, I’ve noticed about fuel efficient cars coming to the forefront. And there’s some talks about ride sharing, like Lyft and Uber, things like that. Any anything you want to share there?
Christian Stadler 36:15
Well, I’ve had recently, an interview, which was, I think, was New York Times, if I remember correctly, talking about this competition between on the one hand, you have Google, you have Apple, and on the other hand, you have the OEMs. And a lot of people expect that, well, you know, who can compete with Google who can compete with Apple, the established car companies, it’s just a question of time until the out of business. Now I take a very different view on this one. Because the question here is whether these technologies around self driving cars around batteries whether they are a destructive, disruptive innovation or a more sort of continuous step by step innovation, and In in evolution versus secondly, and I think it’s more of the later Yeah, there’s some real barriers that make it almost impossible to, to flip over overnight. Yeah, regulation is usually complicated United States. Yeah, in order for you to have the self driving cars on the road, you need to bring the federal government on board, you need to bring the state government on board, and you need to bring the local communities on board. Now, this, you know, is a regulatory jungle, which is not going to be solved overnight. And therefore, you know, this complete new solution doesn’t work. In one go, is also peak technology problems when you come to solutions that, like Google or Android, you use the web, etc. On the other hand, established car companies go more step by step. They have a census which they build into cars. So my dad, for example, as a carbon, he drives on the highway then he can just You know, press a button, and the car will drive after the car that is in front of him, and we’ll keep the distance that is appropriate here. And it slows down if we get slower, but he doesn’t drive entirely economist, this is something that is possible as allowed at a moment. This is also something that most people have been more comfortable. So I think he’s, you know, going to be a step by step adoption. And that’s where the car companies have an advantage. That’s why I think really, they’re gonna win this particular battle.
Jason Hartman 38:27
Yeah, it’s very interesting. And I’ve talked many times before Krishna about how the self driving car I purchased the Tesla a few months ago, just for this reason, I you know, I think it’s going to just be such a game changer for the entire world for the real estate business because real estate has always been predicated on three basic rules, location, location, location, and geography is less meaningful than it’s ever been in human history. It still matters, but it just doesn’t matter like it used to. I mean, people travel around the world around, you know, the city around the state. very easily. You know, that’s that’s a beautiful thing because that that commute becomes much less impactful if you can get in your car and, and work on your laptop or read or take a nap or you know, it’s just not that big a deal. Now we’re not we’re not quite there yet, but it’s right around the corner, obviously.
Christian Stadler 39:17
Yeah, but also interesting opportunities in here for real estate. Yeah. What do you think at the moment, you need a parking spot as well? Yeah. Now in future people might not need parking spots. So a I have, you know, more space where I can develop. Also, I could partially possibly cut some deals with companies that have a fleet of cars. So that actually part of your apartment, you also purchase some sort of deal that can give you mobility, as well. So you know, there’s also opportunities,
Jason Hartman 39:44
I don’t even think you need that. I think it’ll just be done by the companies like Lyft and Uber, because you’ll just summon a car when you need it. One estimate I saw from Peter Diamandis was that 40% of the typical city is covered by parking spaces. Can you imagine if Free that up credits in totally animal. I mean a car doesn’t need to sleep, it can just run all the time. I mean, if it’s electric, it’s got to charge for a little while but, you know, by and large cars can run a lot more we the typical driver uses their car 4% of the time 96% of that the time the car is just sitting there depreciating. Why should we own one? It’s absurd. It’s really a crazy idea. Yeah, so, so very interesting. It’s, I always say it’s an amazing time to be alive. It really is an amazing, you know, and I’m I do hope, though, that they’re gonna knock down the parking house and not just refurbish them, right. We we shall see. We shall see how that’s all used. But just know listeners, a lot of that 40% is not developable for anything. I mean, of course, you can take a whole parking lot and turn it into an apartment complex or a shopping center or whatever, but you can’t take the driveway in your house and do much with it. You know, maybe you can make it a yard, you know, that that won’t change that much. So that’s part of the 40%. Just understand that, you know, it’s not a Instantly something you can turn into another development.
Christian Stadler 41:03
You could you could put an extension. Oh, yeah, the UK has very strict regulation about buildings in Boston, which is a World Heritage Site, it’s virtually impossible to get land converted to new to the new building. So the only way that space is expanding through extensions, yeah. And then you can definitely do with your driveway as well
Jason Hartman 41:20
add on. So you could add a bedroom or something like that. Yeah, that’s that’s certainly an idea. Yeah. Good point. Christian. It has been a pleasure speaking with you. Please give out your website and tell our listeners where they can find you.
Christian Stadler 41:31
Well, Christian started org. So quite, quite easy. Just my name.org.
Jason Hartman 41:35
Fantastic. Thank you so much for joining us. Thanks for having me again.
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