Jason Hartman is joined by investor Naresh to talk about the devastation Hurricane Harvey caused in Houston. He explains how the government will be offering low-interest loans for those without flood insurance. The two illustrate some reasons why inflation happens. The conversation goes into technological advances and automation and how its impacting jobs.
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Jason Hartman 1:04
Welcome to the creating wealth show. This is episode number 878 878. This your host, Jason Hartman, thank you so much for joining me today, as our heart goes out to all the people affected by the devastation in Houston and meet Louisiana and other surrounding areas. It’s just terrible to see what’s happened there. Of course, we talked about it on the show last week, entitled Houston we have a problem or an opportunity and we talked about kind of both sides of the equation, the disaster capitalists that will undoubtedly and already are rushing into that market. First, there’s a lot of people doing a lot of great charity work, and I’ve donated some money to a few different charities in that area. that are that are part of the relief effort and encourage you to do the same. I’m not gonna say a specific charity because I you know, I don’t know you got to check out which are the good ones. By the way. There are some good websites you can use. One is called, I believe I use this app on my phone Charity Navigator. And I think the other one is maybe GuideStar. I’ve used both of those to just learn a little bit more about the charities and how effective they are and so forth. They do some rankings and ratings on that kind of stuff. So anyway, keep that in mind as we move forward. And I have with me today, a returning guest host but if you will, also a Houston native, and that is nourish, nourish. Welcome back. How are you?
Naresh 2:30
doing? All right, Jason, and my prayers go out also to my hometown, Houston, which is where I was born and raised him
Jason Hartman 2:39
good stuff. And you live in Tampa, Florida. Now, as most of our listeners know. Do you still have family in Houston? Yes, they living there. Yeah. So tell us about it. What’s going on?
Naresh 2:49
Yeah, my parents still live in Houston. My father will really the reason why I grew up there is because my father has been in the oil and gas industry. He’s a veteran and I I know you’ve done several shows about that and how the low oil prices have affected the real estate market there. But that’s why I’m born and raised my parents are sold there. My brother is sold there working also in the in the energy commodities industry. And fortunately for us, our home was not the home but the driveway and the roads and the neighborhood were remodeled about 10 years ago. I want to say they were remodeled to be flood proof, but let’s just say at the time they were remodeled to be state of the art and as a result, my family did not experience even an inch of rain. So their home kind of became a safe haven. But places
Jason Hartman 3:47
that you You didn’t mean to you kind of misspoke there. They experienced rain they did not experience an inch of flooding.
Naresh 3:53
Sorry, yeah, right. Wrong term. So yeah, an intial flooding and but places as close as two miles from their home where I want to say completely destroyed but they experienced massive, massive flooding. So they were very, very close to the turmoil and the floods and we had a lot of close friends a lot. I’m talking like, at least 100 people we know friends, my brother’s friends, cars destroyed or just completely even some half flooded and some you know water got into the engines and they don’t work anymore. homes destroyed. We know a couple of people who had to basically hang out on the roofs of their of their homes and get to get to safety or get help. So it’s it was definitely the north side and the South sides of Houston. Experienced just a lot of a lot of flooding even after the storm ended. There’s the release of the water and the reservoirs and so even you know two days two days ago, we’re recording right now but two days ago is when the the water or the rain stopped and two days later the the reservoirs release water in more areas got flooded. So it’s almost like a never ending. Just never ending bad news, but
Jason Hartman 5:26
it is just shocking to me how this can even happen Really? How can the government have screwed up so bad? Number one, I’m not doing an evacuation. Okay. And I’m not you know, I haven’t followed what the government’s done or hasn’t done to be critical but to be a good critic at least right? But I will say how come they they didn’t plan better in terms of like flood control and things like that. Now granted, you know, nothing is ever flood proof or anything proof for that matter, you know, disaster kind of Anything no matter how well you plan, but it seems like there was just not nearly enough planning here. And as bad as it looks, some people will actually benefit from this. And I told the story on the episode last week I did with Sarah, about how during Katrina, some people got more money than their property was worth with the insurance payouts and some land developer came along and you know, real estate is always about this concept of what’s called highest and best years, okay, highest and best use, and a lot of properties are underused, meaning that there might be some little crappy houses there right but they’re someone’s houses and they’re meaningful to someone I understand that but I’m just talking as an economist here now, okay, not not, you know, any sentiment or emotion that goes with that, that that needs to but I’m just strictly talking the money side right? At the moment, you know, there’ll be a little crappy house there and you know, that land would be better use for a tract of new homes or a high rise, condo or some different, better use right to have the highest and best use. So during Katrina, we saw a lot of that years ago when when Katrina happened, where people had their homes basically destroyed. And then a developer came along and did the highest and best use for that piece of land and paid more money for it, and they actually profited from it. So, you know, it’s never over till it’s over. Or As the old saying goes, it’s not over until the fat lady sings, right. I don’t know where that came from. But you know, you just never really know what this will mean until it works out. Right. And it takes some time for that to happen. One of these articles that we have in our content group with which you know, your interaction, and the venture Alliance members are in as well. Is USA Today article that some of our listeners may have seen about 80% Hurricane Harvey victims do not have flood insurance. Wow, that is just shocking. And I read another article the other day talking about the the projected mortgage defaults and loan losses for Fannie Mae and Freddie Mac, they’re going to be exorbitant because people will just simply walk away from their mortgage obligations. And they have a good excuse a good reason to right. So as I always say the best insurance is a high loan balance in in multiple ways that’s not just in one way. And we can dive into that a little more than a rash. But yet Tell us more that you know, from local people and you know, any other any other stories about people you know, that have been affected? Well, fortunately, those close to me do have flood insurance and car insurance too, because so many cars were, well, it’s not just about the houses so good.
Naresh 8:57
It’s about the houses. So you had tonight I mean, 10s of thousands of cars that were destroyed as a result of this. And one thing, Jason, you brought up the government earlier. I want to note that the it’s just, I mean, it’s not funny, but it’s a little strange that we’ve had in various cities since Katrina, I guess you can say close calls. But you know, nothing really happened in Houston. They had a couple of close calls, you know, some rain here and there same where I live in Tampa, Florida, and the mayors or the government officials will come out and they’ll say, you know, evacuate, evacuate immediately. It’s going to get bad. And you know, a lot of the times are really recently most of the time almost nothing happened. Maybe some, some rains, a little bit of flooding, but not a whole lot there. In this case, the Houston Mayor came out and said there’s no need to evacuate everyone can just stay here. You know what this is gonna happen? And he said this about two days before the storm or the hurricane hit. And he’s now getting a lot of even tweeted this. So it was public. It’s not like he said it in passing, it was public record. His people tweeted it. And now it’s making him look like a complete fool. My question though, Jason to you is because you brought up the whole government issue, despite him saying that people didn’t need to evacuate. If he had he said, Okay, everybody evacuated time to panic. Don’t you think that the roads would have been completely clogged up people would have run out of gas?
Jason Hartman 10:40
Of course, hey, but you know, there are ways to deal with and manage that too. I mean, you know, it’s, it’s, it’s a mess, but look at the mess you have now. I mean, this is a difficult thing to do, right? Because you’re damned if you do, you’re damned if you don’t, and you just never know how bad it’s going to get. You know, but in You know, I’m looking at this article, I mean, and, and just watching the news coverage the past few days, it’s just, it’s just shocking. I mean, I I’m amazed. And this this is just a this is a, this is a once in a lifetime, if not once in several lifetime type of
Naresh 11:17
event that. I also want to mention speaking of government, so the government does offer assistance and this is taken from the article that you’re referring to from USA Today. The government does offer assistance to people who don’t have flood insurance, but But of course, there’s always going to be a caveat. These are essentially loans there, they’re low interest loans. So there’s still interest on them. And they’re only allowed to take out loans on a certain amount of dollars based on you know, their income and a few other things. And that’s kind of a problem because already, they probably take it to be the a lot of these folks have taken out loans on their mortgage. And now they would have to take out more loans from the government to either fix up the the home or to pay off the mortgage or whatever it might be. There’s, there’s gonna be a whole bunch of loan modifications, I’ll just bet you and there’s going to be a moratorium on mortgage payments. People are just gonna walk away in droves. I mean, they estimate the the flood damage cost alone from the storm to be $35 billion.
Jason Hartman 12:30
Okay $35 billion, and they say that’s about what Katrina cost back in 2005. So, you know, I mean, this is the commodity prices are going to skyrocket in you know, with with the demand for all the commodities needed to rebuild all of the ingredients of the houses that the lumber the concrete, the copper wire, the tile, the carpeting, you know, the petroleum products, the labor cost is going Gonna go up? I mean, it’s just mind boggling. what’s what’s going to happen here?
Naresh 13:05
Well, these homeowners Jason, if you correct me if I’m wrong, but I would assume that many of them are going to be forced to sell their homes, of course, they can just walk away, but they’re going to be a lot of homes for sale. I’m not sure what their value would be if there’s mold and water and destruction, but I don’t really know what other choice they have. Yeah, well,
Jason Hartman 13:26
a lot of them will just walk, the bank will end up taking them back and the bank will have to resell them. And, you know, this will take many years to work its way through the system. You know, we’re going to hear a lot of stories as to how this all goes in the months to come and years to come even. But this is true. This is just a giant, giant situation. You know, it’s every bit as big as Katrina, we’ll see. Maybe it’ll end up being bigger in terms of dollars. By the way, one thing just as a little side note, you know, in Al Gore’s movie with all All kinds of leaps and logic, his first one Inconvenient Truth, which doesn’t tell a lot of the truth. But, you know, I noticed some little tricky thing. I just had to bring this up now, because when we compare this to Katrina, right, Katrina was now 12 years ago, right? And all, you know, pretty much to the day, just a couple days ago, it was the anniversary. But you’ve got to always, I mean, look, listeners, you know, what I’m gonna say, right? You know, you know, you’re, you’re smart, you’re attuned to this, right? You’ve got to always adjust for inflation, right? That it’s exactly what you have to do. You have to adjust for inflation. So if they say that, you know, this cost $30 billion, and that cost $30 billion. Well, you got to take 12 years of inflation, and adjust for inflation and and, you know, I just remembered Al Gore’s movie because he wasn’t adjusting for inflation. He was throwing out these ridiculous charts saying, Well, you know, 50 years ago, the damage due to Hurricane And natural disasters was x. And today it’s x but you didn’t adjust for inflation. those dollars are worth a lot less money today as well. So, you know, just convenient, convenient little lapse in logic there, right but nobody noticed that except astute people like coasters. So, yeah, it’s interesting. One thing I want to say in this article though, it quotes Wells Fargo, the disgusting unethical criminals at Wells Fargo, right? Just a disgusting pathetic criminal organization. I mean, scandals galore. I I hate Wells Fargo. They are scum of the earth. Okay, Wells Fargo is just scum.
Naresh 15:43
Have you ever been with them?
Jason Hartman 15:44
Oh, yeah. For years. They’re disgusting. Pathetic scumbags. Okay, so it says Wells Fargo, the late nation’s largest mortgage lender said Monday that it was suspending all negative reporting to credit bureaus, suspending collection calls and foreclosure procedures Against consumers in the impacted communities, at least through the end of September, well, they’re going to be extending it a lot longer. Customers who contact Wells Fargo can get disaster relief for 60 to 90 days, and you can postpone payments. So, further relief will be offered case by case the bank said, but the relief is going to be way bigger than that, okay? In fact, the government may literally tell the lenders that they have to do that same thing. So whether it be chase or BFA, or the crooks at Wells, or whatever bank is involved, they’re just going to say you, you have to let these people off the hook, the government’s just going to step in and do that. And then the government’s will probably end up suing insurance companies for bad faith. And the lawyers will all get rich Of course, as they always do. And, you know, this will just go on and on. It’s quite, it’s, you know, there’s just we’re kind of like the news media on the day, something happened. Or the days following something happens. We’re going to be talking in circles here because again, nobody knows yet. So we will continue to discuss this stuff as things unfold. Okay but nourished, let’s wrap up the Harvey stuff and talk about a couple other things. Okay. Anything else to comment though before we do that?
Naresh 17:19
With Harvey, I think we we covered a good amount. So just we wish everybody the best and the whole Houston has a very speedy speedy recovery. Let’s make Houston great again. Yeah,
Jason Hartman 17:31
absolutely. That’s a good thing and it transitions right into the next thing we want to discuss, which is our embattled president. It’s poor Trump. He just can’t get a break. I’m not saying he’s doing a great job because I don’t know that he is. But I mean, man, the media is tough on this guy, like tougher than any president. I it’s just wow. And so here is Business Insider, totally left wing or organization from what I can tell because during the election, I mean the coverage It was like, I’d looked down my feet on Business Insider and was like, you know, Trump sucks. Trump’s bad, Trump’s evil, you know, just one after another. It’s like God, can you just give me some more balanced reporting, please? But anyway, this article is about how the dollar is struggling. And it’s a direct reflection of the prospects for Trump’s economic agenda and a rash. What did you want to talk about here?
Naresh 18:27
Jason, I’m not really sure this article in Business Insider is entirely accurate, and I know that to come as a huge surprise to you. They’re basically equating Trump, really the Trump brand and his name to a weaker dollar. And a big chunk of their support is his proposed economic agenda. So if you’re a member, we’re supposed to be seeing more deregulation, infrastructure spending, tax cuts, especially for the wealthy. Those have not been implemented. And so Business Insider is blaming the president saying you haven’t been able to get your policies passed through Congress. And as a result, the dollar has become weaker, which I find just kind of ridiculous.
Jason Hartman 19:16
Well, okay, so here’s the first thing about this is that if, you know, in talking about Trump and the way he talks about trade, I wouldn’t be surprised if Trump wants a weaker dollar. And the reason for that is that obviously, when the dollar is weaker, American companies get an influx of business from other countries, and they they make money off exports. And Trump is always talking about like, how the trade is so imbalanced and how it’s so unfair, that we’re buying all this stuff from other countries if they’re not buying enough stuff from us. Right. And, you know, there’s that’s a complicated issue. We’ve discussed it in detail. It’s what’s called the current Accounts deficit. Right. And, and that’s about trade. And so, you know, Trump wants countries to buy more stuff from us. So if our dollar is weaker, then that encourages more spending with American companies more traveled to the US more tourism. It brings money to the US, right. But it also makes it more expensive for us to buy products elsewhere. And I’ve said many times that I think Trump is inflationary. I think Trump is good for employment. I think Trump’s good for American jobs. I think, you know, there’s a lot more money’s gonna flow into real estate. Trump just gave a speech yesterday, where he talked about his tax plan to reduce corporate tax rates. And my and Joan who’s been on the show, of course, you know, and Joan with her real estate Empire. She called me up yesterday and she said, Jason, turn on the news. Don’t you have a corporation? You Yeah, Sam, Joe and I have several corporations, many LLC, he’s in them. And she says, Well, your taxes would go from, you know this to that. And I’m like, if that happens if that actually happens, does anybody realize the massive economic boom that will ensue? You know, there’s all this stuff about corporate welfare and cutting taxes on the rich and all this stuff. Look at nobody ever gets a job from a poor person. Poor people do not employ anybody. Okay, so if poor people want a job, guess what? They’re going to get a job from a rich person or at least a richer person. Okay? This is trickle down economics and it works no matter what bullshit you hear on NPR. Okay. By the way, comment about NPR. Okay, you know, listen, I listen to these various government run radio shows and NPR and all this stuff. And it’s, you know, it’s, it’s sort of pretty good until you start actually thinking a little bit And you realize how you can’t hear the dogs that don’t bark. They just leave so much of the story out. It’s just shocking how there’s like these huge leaps in logic that you have to make. And so if you just listen to NPR or you know, whatever Public Radio type of program you’re listening to, you, you, you don’t hear the whole story because they just leave stuff out. They, you know, it’s like, they’ll say, this and that and and then you if you’re not a thinking person, and you don’t ask a question, you’ll think, Oh, yeah, they’re exactly right. They made the case against trickle down economics. I was hearing a show they were doing on that on marketplace the other day, and, you know, it’s just mind boggling how people just, if they think they could never listen to this, I you know, I want to throw stuff at the, at my lousy crappy Tesla that only plays these NPR shows. That’s all I can listen to in that studio. car, and my Tesla is such a piece of crap. I can’t even begin to tell you how disappointed I am with that car. It’s just it’s just a total lemon. Terrible car. Terrible company. I just have nothing good to say about Tesla anymore. I liked the first one pretty well. And I like the self driving aspect. That’s the only reason I bought Tesla is number one and two, but pathetic, terrible, terrible company. Terrible car. just disgusting. almost as bad as well as Fargo. I’m gonna put them in Calgary. So that’s pretty low. Tesla sucks. Okay, Tesla’s sucks. I am so incredibly disappointed. And by the way, if you want to hear your illustrious host cussing and swearing a lot, just go to Tesla scam, calm, Tesla scam calm. You can see some videos of me cussing at my car. So anyway, you might enjoy that. Everybody thinks I’m such a meek, mild mannered person. Not all the time. Tesla scam.com Tesla scam comm check it out. You’ll have a laugh. And you might view me in a whole different light. Yes, I am human folks. I get mad like everybody else. Okay. Okay. Anyway, back to the subject at hand. Yeah, so so I wouldn’t be surprised at all if Trump wants a weaker dollar, because that would improve the current account deficit. And it’d be what he talks about, you know, how he thinks these countries should buy stuff from us for a change, right? So a weaker dollar. Even if you put some tariffs on things, and you’re protectionist, like Trump, if the dollar is weak, the stuff will still look cheap, and Trump could make his agenda look like a successful one. If that happens, so not all bad. But you had some other thoughts on this article nourish Well, before
Naresh 24:53
you brought up earlier, the publisher of the article, I’m not sure if you’re aware, Jason But Business Insider is owned by a large German media and publishing Corporation. And so they’re like one of the leading companies in Germany. So I’m sure
Jason Hartman 25:12
that there’s no liver. There’s no liberals in Germany. Germany’s a very right wing country. They’re a bunch of Nazis over there, right? Yeah, right. exact opposite. Now Germany and Angela Merkel has like, let her company become overrun by you know, refugees. I mean, it’s just, and Germany is the least worst country in Europe. Hey, listen, folks. I was born in Germany is a mess. But comparatively to the rest of Europe. Germany is like incredible. Okay. You know, it’s the strongest economy in the country in this continent. But it’s still a disaster. I mean, Europe is Europe’s a mess. China’s a mess. It’s just all a mess. The whole world. Yeah,
Naresh 25:57
yeah. finishing up the article. A couple of things. So number one is the Fed is continuing to tighten. Jason. So we’re looking at a minor rate hike before the end of the year. And yeah,
Jason Hartman 26:13
and interestingly Neeraj, just another sorry, interrupt you on that one, but, you know, I don’t know, I think Harvey is gonna have some influence on the Fed. It’s got to okay. And the the disaster that’s going on and then golf. Now, I wouldn’t be surprised if the Fed doesn’t tighten as much now,
Naresh 26:35
but we’ll see. Yeah, we’ll see. So do you think the Harvey impact is going to affect the entire country as a whole? Or?
Jason Hartman 26:42
Oh, of course, it affects the entire world. Because all these commodities, for the rebuilding our source from all over the world, it affects everything I mean, it’s a it’s a big, big, big deal. And of course, it affects the entire country, of course, and so we we shall see we shall see You know, I mean, it’s just it’s just word. This is all speculation, but we know the basic idea of how things will react. And that was really covered on last Wednesday’s show. So check that out the one I did with Sarah, where we really covered this stuff in a little more detail. And I don’t want to repeat too much so. But yes, to answer your question,
Naresh 27:18
yes, yes, absolutely. Yep. And finally, to wrap up the article, Trump is threatening to shut down the at least the legislative branch of the government, if he does not get the necessary funding for this wall with Mexico. And so that is playing a role surprisingly, this political speculation is playing a role in the weaker dollar.
Jason Hartman 27:45
Yeah, yeah, we shall see. We shall see you know, shutting down the government isn’t all bad. I mean, I don’t know when the government isn’t operating. And you know, when they say shutting down the government, that’s a misnomer. Obviously, a lot of the government does never know never shuts down, okay, even when they have these shutdowns, but all of the over entitled politicians that are basically on the public feeding off the trough of the public, that’s us, the taxpayers. You know, they’re making laws to restrict our freedom. They almost never repeal any law, they just make more laws and more laws mean more government burden and the bigger the government, the smaller the citizen. That’s just a fact of life. So, yeah, it’s, you know, I, I have no stress of the government shutting down I think, just be probably okay. Although it’s, you know, it’s disorganized, right. It’s, it’s kind of anarchist, and I don’t really want that, but, you know, it’s, it’s just a mess. So, if Trump, if Trump wants to use the bully pulpit for that, hey, you know, oh, it’s okay with me. I’m not, I’m not gonna have a big fit about it. Let’s talk about automation for a moment. So we’ve talked about this quite a bit. And I was just hearing the folks that NPR talked about Again this morning, as they were put on their little geeky propeller hats and, you know, sit in their ivory towers and discuss theory when they have very little practical knowledge. But, but they were doing their thing as they usually do automation this time. I don’t know maybe this time is different. One of the interesting things they said was they cited a census study from I don’t know, maybe 50 years ago or something like that. And some of our listeners might have heard this story. And of the I think it was 271 or whatever job classifications they had on the census from decades ago. Only one has become extinct due to automation. Naresh, would you take care to take a guess of what that might be? I bet you won’t guess this. And he guesses I’ll tell ya, but
Naresh 29:53
man, this is I’ll tell you
Jason Hartman 29:55
let me just make it easy for you because our listeners might be wondering to elevate operator.
Naresh 30:02
Never,
Jason Hartman 30:03
ever. There have been there have been just a few times in my life when I’ve gotten into an old fashioned elevator where there was actually an elevator operator that push the buttons for you. But yes, we do not need elevator operators anymore. That has been automated away that profession by people being able to push their own buttons. So yes, no more ups and downs of elevator operator business. But every other job, interestingly, has not been automated away. But I don’t know. I don’t know if that that kind of concept is gonna hold this time around. I think some jobs really will be automated away. Of course, transportation, self driving cars, self driving boats, buses. And by the way, when I was in, you know, I’ve been to 81 countries when I was in Estonia just a few weeks ago, okay, I didn’t. I didn’t increase my country count on this last Europe trip. But I was back in Estonia, and they had the self driving bus going up and down the street. I don’t think I even mentioned this on the show, I took some video of it. And it was going up and down the street. It did like a little one or two kilometer run, where you just got in there was a person in there in attendance, but they weren’t doing anything. And the little self driving bus, people might have seen this thing, you know, would drive up and down the street. And it was it was pretty cool. You know, we’ll, we’ll see. One of our listeners, Kathy thinks the self driving car is a myth and it will never happen. I don’t know, Kathy, I got a I don’t think so. I think that’s gonna happen. You know? Well, I’m crazy
Naresh 31:40
to know why she would think that.
Jason Hartman 31:44
Well, I don’t know when she won’t come on the show. She’s very private person. She’s a client of ours. Great client. But yeah, she probably won’t come on the show to talk about it. So I don’t know. You know, it’s complicated. But I will tell you one of the biggest industries in the world is the train exportation industry, and when that is automated, there will be a lot of job loss. Now granted, those people might become rocket scientists. Probably not. But they will find something to do eventually, I’m sure. But yeah, automation will change the buildings we live in. That’s what this article is about. And what the first subhead there is one that I’ve talked about extensively is it will increase longevity. And, you know, our site or society is aging, right, the graying of America, they call this as a result, people in the industrialized world and beyond might, on average, reach their 90th birthday. And I don’t know, I think it’s going to be a lot better than that, or worse, because as society ages that has wide ranging impact on the economy. It has wide ranging impact on government entitlement programs like so. Security, etc. And a lot of people might say, well, Jason, that’s not an entitlement program because we paid into it. Okay, fine. Just a distinction, but it’s a government program, right? Yeah, it’ll it’ll change a lot of stuff
Naresh 33:12
will also state that. One thing people don’t see are the jobs that are created because of the automation. So to give you an example, Jason, when these ATM machines came out it really I think they hit the mainstream in the 90s. Previously, to get cash, you have to go into the bank and show your ID
Jason Hartman 33:34
rash. You’re you’re young, so you don’t know this. But they had ATM machines long before the 90s. Okay.
Naresh 33:42
Well, I’m saying mainstream when they went mainstream, I’m sure they were around. But but the economists, you know, the Keynesian economists were saying all this is horrible for the economy is horrible for jobs. But there was a study that I read recently that the agent Machines actually lead to more jobs because with more ATMs came more security people and manager like bank branch managers to manage all these ATMs and then came more customers to where they could cross promote, hey, you want to use this atm? Like why don’t just stop by and we can show you our other suite of products. And there was actually more banking jobs created as a result of ATMs.
Jason Hartman 34:28
That’s pretty interesting. You know, my driver yesterday in the lift car, his he said, he just got off work. And his full time job is being an armored car delivery guy, right? And I said, Oh, boy, you must have some interesting stories. And he said, Yeah, some. Some guy tried to snatch his bag of money, you know, one day and he just thumped them on the he drew his gun, and he thumped the guy in the chest with a gun. He didn’t shoot him. That’s true. You know, there’s a lot more people that have to pick up and deliver cash to ATMs now. And those are highly educated people. jobs, right? They don’t take computer technicians. And so that’s true. There’s no question about it. And in the case of the cars, if you think about it, Jason already, and you would probably know more about the airline industry, but pilots are really necessary for takeoff and for landing, but once we’re up in the air, the planks all automated
Naresh 35:24
it’s all automated but we still need you know, two pilots at the front of the plane who are there and basically supervising and the way I see it with with automated cars, we individuals I know Jason, you have a semi autonomous Tesla and some junk.
Jason Hartman 35:46
Yes, as a total lemon that the company will not and cannot seem to fix. Junk trash $117,000 lemon.
Naresh 35:57
Go ahead. That’s that that’s a huge scam right there.
Naresh 36:01
But anyway, when it comes to the truck drivers when it comes to really any of the automated transportation you’re gonna have to have, you don’t have to have drivers but you’re gonna have to have some kind of supervisor whether it’s before the ride or after the ride, who is making sure that the, you know, the car is maintained well that it’s going from place a to place B good point in a rush.
Jason Hartman 36:26
So here’s the thing about that, okay, as this influences the economy in the real estate market, I’ve already talked about why real estate is a big deal because obviously, since the beginning of time, the three primary roles of real estate have always been location, location, location, right? Those are the three primary value drivers. But geography is less meaningful than it’s ever been in human history. And with self driving technology and autonomous vehicles, it’s going to be even less meaningful than it is now. Okay, but here is one thing to understand john Nesbitt, who by the way Getting up there in age Naresh, I’d really like you to book him on my show. He’s a futurist. He wrote the mega trends books. I followed his work for many years years ago. He’s not active. Now. He’s retired as far as I know. But he lives in Telluride, Colorado. And he talked about this concept called high tech, high touch, okay. And this applies to what we’re talking about. And he says that the advancement of jet airplanes, the technology, right has only led to more meetings more in person meetings. So the high tech has lead to high touch right? And, and that’s the thing that people tend to forget when they think about automation and how it might hurt them, right, because automation simply creates more fulfillment to the endless number of human wants and desires, right. So You know, there the concept of more pneus? Okay, more. Um, did I make up a word more ness? Okay, this morning this morning. Okay, yeah. Maybe that’s just a word I made up I think I did. Anyway more or less concept is that when you have easy transportation, there will just be more demand for transportation. Right. So there will be an I don’t I didn’t say more cars necessarily I said more rides. So that means the cars will have more wear and tear on them. That means more tires more this more that more maintenance more, whatever, right? Because when transportation becomes cheaper and easier, there will just be people will just move around more. Right. The High Tech High touch that john Nesbitt and megatrends talked about how the high technology of jet airlines and jet engines has only lead to more meetings right? Whereas before people just stayed, but they all move around more. And so all this automation will simply create more demand. My friend Christina was here last week, and she went into my closet. And she said, You have so many clothes? How do you ever wear all those clothes? And I thought, you know, I keep giving clothes away to Goodwill, I give away tons every year to salvation army and goodwill, right? I just put them in shop in big garbage bags and take them in. And you know, I just buy more stuff. I don’t know, you know, people just buy more stuff. We’ve got so much stuff in our lives right now. I’m not the only one. Okay, that will just use more stuff. And I’m not saying that’s good to be a consumer. And, you know, it’s not good for the environment. I’m just saying it is the way it is. I do it. Everybody does it. We just have a lot more stuff. There’s an endless number of human desires. And every time something becomes automated, it makes things less expensive, more accessible to a wider range of people. And there’s just more demand. for it. So do will it kill jobs? I don’t know, this is a very complicated equation.
Naresh 40:06
Yeah, I’m on the other side of I guess the mainstream. I do not think it’s going to, of course, many jobs will be killed, but many jobs will be created as well. We’ve seen it throughout history through the Industrial Revolution through the tech boom of the 90s. I mean, Jason, this podcast, wouldn’t this podcast that didn’t exist 20 years ago, the the medium The, the, the ability to connect with hundreds of thousands of listeners and 164 countries was not possible 20 years ago, and the point I’m making is innovation leads to more innovation and more opportunities. Your venture Alliance group would not be around if it weren’t for, you know, the podcasts coming out or it weren’t for the 90s on the tech boom, and one thing leads
Jason Hartman 40:57
to another no question about it. But what’s Interesting in this article is value through data, the real estate business model of the future, right? And it talks about how people in North America and Britain spend more than 80% of their life inside buildings. Okay? And that statistic is likely to be the same in most industrialized countries, or developing countries are moving inside as well. Right? The less developed a country the more time people spend outside, right. So it says, hence real estate is the modern environment of a human being in the industrialized world. I think they don’t mean real estate, they mean buildings, right? Well, this is worrying in the context of health. It is a trend that will likely continue okay. We will see more online retail in the future increasing number of people working in their home office, and individuals completely immersed in virtual realities. So, you know, real estate, is actually a lot of real estate is about data. So here’s a kind of a maybe a bit of a leap I want to make as we’re talking about real estate, look at how much more efficient the real estate market became way back in the day whenever it was invented. And I don’t know when this was invented, but from some research I did a long time ago. I think it was in the early 60s, the idea of the MLS or the multiple listing service, right. That was when brokers started cooperating with each other, and the whole real estate market was open to any buyer, rather than just each broker having a set of their own listings to show to buyers. Now take a look at something like the short term rental market and let’s talk about something like VR Bo and Airbnb for a moment. the sharing economy which is what that is, and what Lyft and Uber are and, and dog vaycay or now a rover, rover COMM The Airbnb for dogs that I use by the way for my dog when she doesn’t go with me on a trip, all of this sharing economy stuff, or Turo for car rental or whatever, right? There’s lots of these sites out there that do all this stuff. They’ve taken all this capacity that was unused in the world. And they’ve made it efficient, and they’ve made it produce revenue, and they put it into use. So there’s a lot less downtime for all of these things than there ever was before in history. And it’s made things a lot more efficient, right? So that really, the real estate business has a huge component of it. That is about data. Data is real estate, right? So this article goes on to say some interesting things, okay. And the rest, just look at this part of it with me, right, because we’re obviously in different places. But if there is not an external shock or massive behavior change in society, we will spend more than 90% of our time in properties on average. Since these are increasingly equipped with sensors, and our connected granular data sets about our daily life will soon be readily available. devices like Amazon’s Echo Dot Okay, now I don’t know why they say the.we just gave away an echo in our contest. Okay, an Amazon Echo, our listener Jake won that and we just sent it out. So connected home appliances, surveillance technology and sensors, helping people create adaptive working and living environments will aggregate data about our consumption, our sleeping, our arguing our love making scary, okay, and working patterns, right? So this data is going to become extremely meaningful in the world of what’s called IoT, the Internet of Things. Okay, so there’s a lot more coming down the pike that we can’t even imagine yet. We can’t even imagine this rash It’s an amazing time to be alive. Good way to leave it. Absolutely. Yeah. Well, hey, I’m not ready to leave it yet, because I got a couple things I want to talk about. First of all, don’t forget our short term rental Council. Many of you have already applied for this. We appreciate it. We only announced it on one show a few episodes ago. But I want you to go to Jason Hartman comm slash str. Jason Hartman, I’m going to go to that myself. Make sure I got the link right. Jason hartman.com slash str. And apply to be a member of our short term rental Council. If you have experience in the short term rental business. We love the comments we’re getting from some of you and the rest of you, Jason Hartman, calm slash str if you have experience in the short term rental, VR, Bo, Airbnb type rental properties, or corporate housing, we want to hear from you. And we want to put this council together and learn from you. Also go to Jason Hartman comm slash vents and sign up for meet the masters. We have a beautiful venue in La Jolla, California. For our January event, ticket sales are going selling like hotcakes, quite literally. This is the earliest we’ve had so many people apply. nourish, it looks like we’re gonna have some big time speaker announcements real soon, where you and I had a conference call about that. So what would say? I said big. These are going to be some very big big speakers for your listeners. It’s going to be an amazing conference for sure. Yeah, I only wish we could drop some names right now but we can’t do that yet. But I really want to tell you but I can’t tell you yet listeners. So you’ll just have to wait for our speaker announcements coming up for meet the Masters in January. By the way, we have decided we are not going to have another event this fall. So our next event is meet the Masters in January other than venture Alliance. Venture Alliance is in Palm Springs California in October and if you are a member, we’re looking Looking forward to seeing you. We’re gonna have some really cool events for that. And if you are not a member join, go check out venture Alliance mastermind comm apply to become a member or get a guest ticket for just $2,000. For our high end, venture Alliance mastermind weekend’s that’ll be fantastic weekend in October in Palm Springs, California. I guess there is another Palm Springs. So I need to say that’s in Southern California. Palm Springs for venture Alliance. Yeah, I think that does it for now. That’s all my announcements. So thank you, everybody for listening. Our thoughts and prayers are with the folks affected by Hurricane Harvey, and no rash. Thank you for joining me, and happy investing to all of our listeners.
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