WEBVTT - EYL #28 Billions 0:00:00.040 --> 0:00:03.600 An illegal alien from Guatemala charged with raping a child 0:00:03.680 --> 0:00:07.480 in Massachusetts. An MS thirteen gang member from Al Salvador 0:00:07.720 --> 0:00:11.840 accused of murdering a Texas man of Venezuelan charged with 0:00:11.920 --> 0:00:15.840 filming and selling child pornography in Michigan. These are just 0:00:15.920 --> 0:00:19.680 some of the heinous migrant criminals caught because of President 0:00:19.720 --> 0:00:23.320 Donald J. Trump's leadership. I'm Christy nom the United States 0:00:23.320 --> 0:00:28.120 Secretary of Homeland Security. Under President Trump, attempted illegal border 0:00:28.160 --> 0:00:31.680 crossings are at the lowest levels ever recorded, and over 0:00:31.760 --> 0:00:34.960 one hundred thousand illegal aliens have been arrested. If you 0:00:35.040 --> 0:00:38.920 are here illegally, your next you will be fined nearly 0:00:39.000 --> 0:00:43.000 one thousand dollars a day, imprisoned, and deported. You will 0:00:43.040 --> 0:00:46.680 never return. But if you register using our CBP home 0:00:46.720 --> 0:00:50.120 app and leave now, you could be allowed to return legally. 0:00:50.479 --> 0:00:55.240 Do what's right. Leave now. Under President Trump, America's laws, 0:00:55.400 --> 0:00:57.840 border and families will be protected. 0:00:57.920 --> 0:01:00.000 Sponsored by the United States Department of Homeland Security. 0:01:00.240 --> 0:01:04.240 All right, guys, welcome back EYL Episode. 0:01:03.720 --> 0:01:05.479 Twenty eight, twenty eight weeks and. 0:01:05.560 --> 0:01:08.160 Twenty eight monumental. First and foremost, we have to think 0:01:08.600 --> 0:01:12.120 Black Enterprise sure for featuring us that that was a 0:01:12.240 --> 0:01:15.520 very that was a good, gracious article that they did 0:01:15.560 --> 0:01:15.800 for us. 0:01:16.000 --> 0:01:18.160 It was a number one share story last week. 0:01:18.200 --> 0:01:20.560 I saw that almost about that three thousand shiar So 0:01:20.680 --> 0:01:22.520 shout out to everybody for sharing it and all of 0:01:22.520 --> 0:01:25.240 the response that we've gotten for that. It's very encouraging, 0:01:25.760 --> 0:01:28.319 very encouraging. So thank you, Thank you for Black Enterprise. 0:01:28.360 --> 0:01:31.080 We appreciate you, Nicole Webb, thank you for writing the story. 0:01:31.120 --> 0:01:32.479 We appreciate you. Well done. 0:01:32.920 --> 0:01:36.080 And then we also have to shout out curl Fest amazing. 0:01:36.319 --> 0:01:39.360 Shout out to older girls, a curly Girl collective. We 0:01:39.440 --> 0:01:40.960 actually attended for the first time. 0:01:41.120 --> 0:01:43.560 It definitely won't be our last time. Yeah, it was 0:01:44.280 --> 0:01:44.959 just beautiful to. 0:01:44.959 --> 0:01:47.920 See melan and celebrated and everybody come and have a 0:01:47.920 --> 0:01:50.360 good time, and I was in all of it. 0:01:50.760 --> 0:01:53.000 Yeah, for sure. Episode twenty five. If you haven't listened 0:01:53.000 --> 0:01:55.080 to episode twenty five, that's what Samone Marris. She's one 0:01:55.120 --> 0:01:56.880 of the co founders of curl Fest. Curl Fest is 0:01:56.920 --> 0:02:00.280 the largest natural heir festival in the world, So that 0:02:00.720 --> 0:02:02.760 check that episode out. It's a good one. She dropped 0:02:02.760 --> 0:02:07.800 a lot of gems on women here and also on 0:02:07.840 --> 0:02:10.160 the festival industry, so we actually went. This is our 0:02:10.200 --> 0:02:13.600 first year actually going and attended. It was twenty thousand 0:02:13.600 --> 0:02:15.880 and thirty thousand people there and it was it was dope, 0:02:16.080 --> 0:02:16.880 just crazy, really good. 0:02:16.919 --> 0:02:18.560 And they're not done that. They're gonna be doing Atlanta. 0:02:18.560 --> 0:02:21.079 So Atlanta, get ready they come in your way out 0:02:21.080 --> 0:02:21.440 to them. 0:02:21.360 --> 0:02:23.880 For sure, for sure, but we're gonna jump right until. 0:02:23.880 --> 0:02:27.600 We got a very very special show. We actually we're 0:02:27.639 --> 0:02:29.839 doing a little different this week. We got so much 0:02:29.880 --> 0:02:31.880 information that we want to give out to the public 0:02:32.200 --> 0:02:35.120 that we're gonna release two shows this week. We're gonna 0:02:35.120 --> 0:02:37.840 do our show what you're listening to right now Tuesday, 0:02:37.840 --> 0:02:40.120 five pm, and then we're also going to drop on Friday. 0:02:40.160 --> 0:02:42.000 We did that before episode twenty four. 0:02:42.000 --> 0:02:43.560 We did episode twenty four, but this is just gonna 0:02:43.560 --> 0:02:47.320 be two different episodes. And we got some information for 0:02:47.360 --> 0:02:50.240 our international listeners as well on this on the episode 0:02:50.240 --> 0:02:53.160 that's coming out Friday, because we get a lot of feedback. 0:02:53.200 --> 0:02:55.600 We get a lot of positive feedback from from people 0:02:55.639 --> 0:02:58.920 all over, from Africa, from Europe, from Asia, and they're like, 0:02:58.960 --> 0:03:00.680 you know, we want to have a little bit more 0:03:00.680 --> 0:03:01.760 of an international field. 0:03:01.880 --> 0:03:03.960 So they love the content, but sometimes it doesn't relate 0:03:03.960 --> 0:03:04.519 to their country. 0:03:04.560 --> 0:03:06.919 Yeah, so we got some international information as well as 0:03:07.000 --> 0:03:09.280 information for the globe. And I always say even for 0:03:09.280 --> 0:03:12.000 people that live in America, don't limit yourself to America. 0:03:12.360 --> 0:03:15.440 Like the world is big, right, So the international information 0:03:15.520 --> 0:03:18.200 isn't just for international listeners, for you too, because we 0:03:18.240 --> 0:03:19.880 need to give money every single way in the world, 0:03:19.960 --> 0:03:21.919 and we need to educate ourselves everywhere in the world 0:03:22.280 --> 0:03:24.919 that the world is flat, not literally like Kyrie IRV. 0:03:27.600 --> 0:03:31.000 It's flat as far as information information is the same. 0:03:31.240 --> 0:03:34.359 This is why we we can be on the charts 0:03:34.680 --> 0:03:39.160 in Dubai being the charts, in Botswana being in charts, 0:03:39.160 --> 0:03:44.880 and and Trinidad, Jamaica all of these different places, is 0:03:44.920 --> 0:03:47.880 because we receiving information at the same time right now. 0:03:48.040 --> 0:03:49.760 So it's a level playing field. So we need to 0:03:49.880 --> 0:03:51.800 educate ourselves on what's going on all over the world, 0:03:51.880 --> 0:03:55.280 not just what's happening in America, for sure. So a 0:03:55.400 --> 0:03:59.520 very special guest today, Fritz Charles, thank you for joining us. 0:03:59.640 --> 0:04:01.240 Thanks a legend in his own right. 0:04:02.440 --> 0:04:05.760 Appreciate that for sure, for sure. So he's going to 0:04:05.840 --> 0:04:07.840 tell the story, but very interesting story. You got a 0:04:07.840 --> 0:04:10.720 lot to talk about from Wall Street to Crypto and 0:04:10.760 --> 0:04:13.600 one of the things that we've been getting requested to 0:04:13.720 --> 0:04:15.560 cover the most is cryptocurrency. 0:04:15.640 --> 0:04:16.679 Right, we got some stories. 0:04:16.800 --> 0:04:18.599 Yeah, so we got our own personal story, but we 0:04:18.640 --> 0:04:20.520 wanted to bring an expert in the fielding as well. 0:04:20.600 --> 0:04:23.200 So he's an expert in the field as well as 0:04:23.240 --> 0:04:25.120 a bunch of other things as well. So we're going 0:04:25.160 --> 0:04:28.160 to get into crypto. But before we start, we want 0:04:28.440 --> 0:04:31.160 can we get a backstory on how you got here 0:04:31.200 --> 0:04:33.960 because your story is really interested as far as working 0:04:33.960 --> 0:04:38.120 in Wall Street and you were with the infamous Lehman Brothers. Right, 0:04:38.160 --> 0:04:42.280 that's right, all right, so yeah, all right, can you 0:04:42.320 --> 0:04:45.760 explain that because that's that's that's an interesting story now 0:04:45.800 --> 0:04:46.159 for sure. 0:04:46.200 --> 0:04:48.040 For sure, I try to make it as concise as 0:04:48.040 --> 0:04:50.320 it could be because it's it's pretty long. But I think, 0:04:50.400 --> 0:04:53.320 first off, thanks for having me. But yeah, like you said, 0:04:53.920 --> 0:04:56.000 you know, it's kind of the personal background is a 0:04:56.040 --> 0:05:00.240 group in Queens, born in Queens, New York. Ten college 0:05:00.279 --> 0:05:03.320 at Brew College in New York, study finance. And my 0:05:03.360 --> 0:05:06.040 first job out of school was at Leman Brothers. But 0:05:06.279 --> 0:05:09.599 is not common. Yeah, yeah, I went hard for that job. 0:05:09.680 --> 0:05:11.960 It was definitely a job that it's a dream job. 0:05:12.720 --> 0:05:15.200 Leman Brothers at the time, this is two thousand and six. 0:05:15.640 --> 0:05:17.919 You know, I would say, you know, probably you know, 0:05:17.920 --> 0:05:20.520 it's Goldman Sacks and like Leman Brothers, Morgan Stanley wille 0:05:20.520 --> 0:05:21.120 On that next. 0:05:20.960 --> 0:05:23.560 Level investment bank. Ifnybody's not familiar, Leanan Brothers was one 0:05:23.560 --> 0:05:26.719 of the biggest investment banks in the world. Yeap on 0:05:26.839 --> 0:05:29.120 Wall Street like Goldman Sacks, same. 0:05:29.040 --> 0:05:32.440 Level as exactly. And so I got a job there 0:05:32.520 --> 0:05:35.720 as a as a trader. So I traded equity derivatives 0:05:35.960 --> 0:05:39.560 mean equity swaps, equity options, and my clients were hedge 0:05:39.600 --> 0:05:44.600 funds and crazy fun job, you know, really intense. I 0:05:44.640 --> 0:05:47.560 was twenty two years old, kind of doing transactions that 0:05:47.600 --> 0:05:51.840 were in the billions. Yeah, yeah, yeah, you know, the 0:05:51.880 --> 0:05:54.960 intention of billion six digits six digits as as a 0:05:54.960 --> 0:05:57.599 as a twenty two year old out of Queens is major. 0:05:58.480 --> 0:06:01.600 And then I, you know, did my thing got you know, 0:06:01.640 --> 0:06:04.279 you kind of the way you're hired as an analyst. 0:06:04.320 --> 0:06:06.080 So you do two years as an analyst and they 0:06:06.360 --> 0:06:09.359 decide what to do with you, and I got promoted 0:06:09.360 --> 0:06:12.839 to associate. And this is two thousand and eight, you know, 0:06:12.960 --> 0:06:16.039 two thousand and eight. Obviously the financial crisis happened and 0:06:16.360 --> 0:06:21.200 about three months after got promoted, we went bankrupt and 0:06:21.240 --> 0:06:24.320 so and then what happened was it was like three 0:06:24.400 --> 0:06:27.440 days where people didn't know what was going on as 0:06:27.440 --> 0:06:29.240 far as like whether it was a you know, whether 0:06:29.279 --> 0:06:32.680 the building will be open, whether we had insurance. You 0:06:32.720 --> 0:06:36.039 were just basically working for bankrupt entity. And then we 0:06:36.080 --> 0:06:39.039 got word that Barcleys brought us, and then there was 0:06:39.160 --> 0:06:40.760 like a whole lot of hoopla as far as like 0:06:40.800 --> 0:06:43.880 who who's going to be left with Barkleys, Who's going 0:06:43.920 --> 0:06:45.800 to get laid off? And I was one of the 0:06:45.800 --> 0:06:48.479 fortunate people to keep my job, so I ended up 0:06:48.480 --> 0:06:50.800 working at Barcleys. This is before the Barking Center, so 0:06:50.839 --> 0:06:51.760 I didn't get any tickets. 0:06:53.440 --> 0:06:55.800 So that's all right. So the financial crisis of two 0:06:55.839 --> 0:06:59.440 thousand and eight, when banks were closing left and right, 0:06:59.480 --> 0:07:01.840 Wall Street was in a mess, and you were trading 0:07:02.040 --> 0:07:06.320 very complicated swap derivatives. Can you give eleventh grade explanation 0:07:06.480 --> 0:07:08.280 on what swapped derivatives? 0:07:08.440 --> 0:07:13.200 Yeah? Yeah, So basically what it is is basically it's 0:07:13.200 --> 0:07:17.080 a it's a contract that says I traded equity swaps 0:07:17.080 --> 0:07:21.000 on basically equity indexes. So the most popular equity index 0:07:21.120 --> 0:07:23.239 is the S and P five hundred. So you always 0:07:23.280 --> 0:07:25.679 hear about if you watch CNBC or even watch any news, 0:07:25.720 --> 0:07:28.320 they say, oh the market, we're up five percent nine 0:07:28.360 --> 0:07:29.680 times out of ten. They're talking about the S and 0:07:29.680 --> 0:07:31.960 P five hundred, and so the s P five hundred 0:07:32.120 --> 0:07:35.280 is five hundred stocks, right, so to trade it, to 0:07:35.360 --> 0:07:37.640 trade five hundred stocks, especially if you you know, you're 0:07:37.680 --> 0:07:40.080 not the hugest hedge fune or hugest client, like that's 0:07:40.160 --> 0:07:42.800 really complicated. But what you can do with us is, 0:07:42.800 --> 0:07:44.760 all right, well, we'll give you a contract that gives 0:07:44.800 --> 0:07:48.280 you the same return of the five hundred stocks, will 0:07:48.280 --> 0:07:50.600 take care of like buying all of them. And then 0:07:50.600 --> 0:07:52.480 what you have to do with us is you give 0:07:52.520 --> 0:07:54.760 us an interest rate. So we're going to say, all right, 0:07:54.760 --> 0:07:58.280 well you pay us three percent. What we used to 0:07:58.360 --> 0:08:01.040 quote it as is LIB or library is a London 0:08:01.120 --> 0:08:04.880 Interbig offering rate, which is basically like it's almost like 0:08:05.240 --> 0:08:08.200 the international Federal funds rate. It's like the set rate. 0:08:08.360 --> 0:08:10.560 Like sometimes you hear about people talking about all the 0:08:10.600 --> 0:08:12.440 Feds going to raise rates or whatever. This is like 0:08:12.480 --> 0:08:16.040 the international version of that. So you so the hedge fund, says, 0:08:16.160 --> 0:08:17.840 I say, the hedge fund all right, Well you want 0:08:17.920 --> 0:08:21.240 the return on SMP over a year, I'll give you that, 0:08:21.520 --> 0:08:24.400 but you got to go and pay me, you know, 0:08:24.680 --> 0:08:27.040 five percent something like that for that. So if the 0:08:27.080 --> 0:08:30.800 SMP goes up above five percent, let's say the SMP 0:08:30.880 --> 0:08:34.640 goes up seven percent seven minus two seven seven minus 0:08:34.640 --> 0:08:39.040 five is too they're doing well. The SMP is below 0:08:39.120 --> 0:08:42.080 five percent, then they're out of money, right, So it's 0:08:42.160 --> 0:08:44.040 kind of like this weird it's almost like a bet, 0:08:44.080 --> 0:08:44.600 so to speak. 0:08:44.679 --> 0:08:47.800 How much money was being traded on that. 0:08:48.280 --> 0:08:52.040 So yeah, I mean normal transaction with these clients would 0:08:52.080 --> 0:08:58.160 be five hundred million, one billion, Yeah, and so they'll 0:08:58.160 --> 0:09:00.200 call us up like I want to move five to 0:09:00.240 --> 0:09:02.760 move a billion dollars worth of investment B five hundred 0:09:03.000 --> 0:09:05.040 and we would take that trade for them. And you're 0:09:05.040 --> 0:09:06.360 doing that at twenty two years. 0:09:06.240 --> 0:09:08.760 Old, yes, and you're doing that every every day, every day. 0:09:08.840 --> 0:09:11.600 So he was traded from thirty to four straight billion 0:09:11.600 --> 0:09:13.040 dollars every day basically. 0:09:13.200 --> 0:09:13.760 Yeah. 0:09:13.800 --> 0:09:16.199 So the reason why I say that is even if 0:09:16.240 --> 0:09:19.000 the average person probably will never invest in this type 0:09:19.000 --> 0:09:22.560 of investment, it's important to understand and know. Right, we 0:09:22.600 --> 0:09:24.719 had ashcash showing. It was a great interview for US, 0:09:25.080 --> 0:09:27.559 and he spoke about when he worked in a bank. 0:09:27.600 --> 0:09:29.080 He used to be the CEO of a credit union, 0:09:29.160 --> 0:09:30.760 and he spoke about when he was on behind the 0:09:30.760 --> 0:09:32.959 scenes of a bank, and he started to see that 0:09:33.080 --> 0:09:35.320 wealthy people had a team of people that was working 0:09:35.360 --> 0:09:38.199 for him, right in so much stuff that the average 0:09:38.240 --> 0:09:41.920 person black, white, Chinese, the average person has no idea 0:09:42.000 --> 0:09:46.240 what happens. Right, But these things affect the world, right, 0:09:46.440 --> 0:09:49.080 and so it's like a small group of people that 0:09:49.200 --> 0:09:51.640 really affect the whole world. Right, So that ties into it, 0:09:51.760 --> 0:09:55.880 the Lehman Brothers going bankrupt. So people I don't think 0:09:55.920 --> 0:09:58.160 people fully understand, or maybe they forgot because we have 0:09:58.160 --> 0:10:02.920 short term memories about two thous Right, how did how 0:10:02.920 --> 0:10:04.120 did two thousand and eight happen? 0:10:04.160 --> 0:10:04.360 When? 0:10:04.360 --> 0:10:06.280 If you're not familiar, if you're too young, that's when 0:10:06.280 --> 0:10:09.000 the financial crisis hit. We had the worst recession since 0:10:09.040 --> 0:10:13.960 the Great the Propression. Stock market was down like forty percent, 0:10:14.000 --> 0:10:16.480 the housing market crashed, Everything just fell apart, right, the 0:10:16.480 --> 0:10:19.120 perfect storm. And then the banks, big banks had to 0:10:19.120 --> 0:10:22.000 get bailed out, of course. So but this all started 0:10:22.120 --> 0:10:25.280 because it was in England. It was it was a 0:10:25.360 --> 0:10:29.640 trading block in England, right that was doing prime mortgages, 0:10:29.679 --> 0:10:30.720 some prime mortgage. 0:10:30.480 --> 0:10:33.160 Now is US. It was England, Yeah, that was England. 0:10:33.160 --> 0:10:37.439 It was a US. So you know, the investment bank 0:10:37.520 --> 0:10:39.800 is split in between a couple of different divisions. So 0:10:39.800 --> 0:10:43.320 there's investment banks that kind of helps people go public 0:10:43.400 --> 0:10:46.040 like IPO and stuff like that. Then you have the 0:10:46.120 --> 0:10:48.360 capital market side, which was I was in and you 0:10:48.400 --> 0:10:51.760 split that between fixed income and equities. Equities just mean stock. 0:10:52.160 --> 0:10:54.760 So my style was talking about was doing stock. But 0:10:54.760 --> 0:10:58.240 the other side is where they focused on bonds, mortgages, 0:10:58.600 --> 0:11:00.960 a bunch of other things. And so what they would 0:11:01.080 --> 0:11:03.400 so the way that mortgages happen, if I go get 0:11:03.400 --> 0:11:05.559 a mortgage from like Bank of America or something like that, 0:11:05.679 --> 0:11:09.560 or local credit Union, they give me a mortgage and 0:11:09.600 --> 0:11:13.079 then now they have they're basically accredited to me, right, 0:11:13.600 --> 0:11:15.920 and they take that, but they take like a thousand 0:11:15.920 --> 0:11:18.280 of me and they put the mortgages together and then 0:11:18.280 --> 0:11:20.480 they go to Lian Brothers or some other bank and 0:11:20.520 --> 0:11:23.320 they're like yo packages together and sell it for me. 0:11:23.679 --> 0:11:25.560 And so what Leman Brothers does is they give you 0:11:25.600 --> 0:11:28.280 the upfront money. Let's say let's say he does a 0:11:28.520 --> 0:11:29.959 I'll give you a mortgage for a house that's like 0:11:30.000 --> 0:11:33.320 two hundred grand whatever, and over time people they pay 0:11:33.360 --> 0:11:34.880 interests and stuff like that. Maybe I don't want to 0:11:34.880 --> 0:11:37.520 wait thirty years to give my money back. I'll go 0:11:37.559 --> 0:11:39.320 to Lian Brothers. I was like, you know what, there's 0:11:39.320 --> 0:11:42.040 two hundred grand, there's two hundred grand mortgage. I'll sell 0:11:42.080 --> 0:11:43.920 it to you for like two hundred and ten grand. 0:11:44.080 --> 0:11:45.600 And by the way, I got one hundred of those. 0:11:45.920 --> 0:11:49.000 Put it all together. And then what Lehman Brothers does, 0:11:49.120 --> 0:11:51.480 or all the investment banks, they take it, put it together, 0:11:51.720 --> 0:11:54.360 they chop it up, and they sell it to different people. Right, 0:11:54.960 --> 0:11:58.640 but if the mortgage it so, but the way that 0:11:58.640 --> 0:12:00.600 they price it is the risk. Right. So there's people 0:12:00.640 --> 0:12:02.840 that put five percent in their homes. These people got 0:12:02.880 --> 0:12:06.840 five to twenty credit you know credit scores. Some people 0:12:06.880 --> 0:12:10.480 have seven hundred credit scores. Those things based the market says, 0:12:10.600 --> 0:12:12.640 you know what, I'll pay you a premium for the 0:12:12.920 --> 0:12:16.320 good credit people. I'll pay you a discount for the 0:12:16.400 --> 0:12:19.040 bad credit people. But if the people in the middle 0:12:19.320 --> 0:12:24.200 are not communicating straight what the underlying assets are, right, 0:12:24.600 --> 0:12:27.080 or what was happening at the time you had you 0:12:27.120 --> 0:12:28.800 had a real estate market with that was going up 0:12:28.840 --> 0:12:31.640 for so long, so that people people that people with 0:12:31.880 --> 0:12:35.000 like five hundred six hundred credit scores and making only 0:12:35.000 --> 0:12:38.640 fifty ks stated income, Right, we're getting houses that were 0:12:38.760 --> 0:12:39.960 like half a million dollars. 0:12:40.400 --> 0:12:42.800 We not to cut you off, but we covered stated incoming. 0:12:42.800 --> 0:12:44.600 We didn't really talk about stated income, so people might 0:12:44.760 --> 0:12:48.240 have the income. Stated income was a policy in the 0:12:48.280 --> 0:12:51.040 mid two thousands where you can state your income. So 0:12:51.080 --> 0:12:53.520 if anybody is familiar with the process to get a mortgage, 0:12:53.520 --> 0:12:55.480 you got to jump through hula hoops to get a mortgage, right, 0:12:55.520 --> 0:12:58.439 you got to like bring your tax documents for the 0:12:58.520 --> 0:13:01.160 last two years, and you gotta bring all kinds of stuff. 0:13:01.160 --> 0:13:03.000 They gotta check your credit all at But in the 0:13:03.000 --> 0:13:05.120 mid two thousands, it was you just walking to the 0:13:05.160 --> 0:13:07.680 bank and you state your income and whatever you stated 0:13:07.720 --> 0:13:09.080 your income, that's what they said. 0:13:09.280 --> 0:13:10.800 So you can say I made one hundred fifty thousand, 0:13:10.840 --> 0:13:12.600 You could say I made a half a million, half 0:13:12.600 --> 0:13:12.959 a million. 0:13:13.040 --> 0:13:16.600 You can be a gardener and make fifteen dollars an 0:13:16.600 --> 0:13:18.800 hour and going to a bank and say I make 0:13:18.800 --> 0:13:21.320 five hundred thousand dollars a year. They take your word 0:13:21.360 --> 0:13:23.720 for it, and they give you a mortgage based on 0:13:24.800 --> 0:13:28.079 a million dollar home and people was doing that. It 0:13:28.200 --> 0:13:30.199 was crazy. Yeah, one hundred percent. 0:13:30.240 --> 0:13:32.240 And that's and the only reason people were doing that 0:13:32.400 --> 0:13:34.640 is because they didn't have to hold the bag right 0:13:34.960 --> 0:13:36.800 like they were like, all right, because if you're a 0:13:36.840 --> 0:13:39.160 bank and I give you, I mean just thinking about anybody. 0:13:39.160 --> 0:13:42.559 If I give you, know that person my homeboy alone, 0:13:42.760 --> 0:13:44.480 and I know he doesn't have a job, No, he 0:13:44.520 --> 0:13:46.720 can't pay me back, but I have to wait for 0:13:46.760 --> 0:13:48.760 that person to pay me back. I'm not gonna probably 0:13:48.800 --> 0:13:50.720 give my homeboyd a loan, right, But if I knew, 0:13:50.760 --> 0:13:52.959 I could take my homeboys loan and pass it to 0:13:53.040 --> 0:13:56.000 somebody else and they they are unhooked for and they 0:13:56.000 --> 0:13:58.120 got to worry about collecting from him. Somebody left holding 0:13:58.160 --> 0:14:00.760 the back. So that's what happened. Because of the cap 0:14:00.840 --> 0:14:02.920 of markets, you were able to do that super efficiently. 0:14:03.320 --> 0:14:06.079 And that worked for a few years because all the 0:14:06.120 --> 0:14:08.560 real estate prices are going up and up. Right, Because 0:14:08.600 --> 0:14:10.720 even if if I have a loan against the house 0:14:10.760 --> 0:14:12.840 and a person can't pay and the house goes up, 0:14:13.280 --> 0:14:16.400 I'm good. So I'm okay with that, right, or that 0:14:16.440 --> 0:14:18.440 person is okay because they're more likely to pay me. 0:14:19.080 --> 0:14:22.720 But until that stops. It's like musical chairs, right. So anyway, 0:14:22.760 --> 0:14:25.520 Lian Brothers was a leader in that. Basically they took 0:14:25.960 --> 0:14:29.400 those packaged mortgages and sold them out. But what happened 0:14:29.520 --> 0:14:31.320 was it's good when you could just pass them out, 0:14:31.320 --> 0:14:34.880 but then when you can't liquidate them as quickly, and 0:14:34.880 --> 0:14:37.080 then now you hold them the bag, and then real 0:14:37.160 --> 0:14:40.960 estate prices go down. Then people default, they're not paying 0:14:40.960 --> 0:14:45.240 their mortgages. The houses that are behind the mortgages are 0:14:45.320 --> 0:14:49.200 not as valuable. Right, it becomes this cycle. And then 0:14:49.320 --> 0:14:52.880 now Lien Brothers, now Lim Brothers has bad credit on 0:14:52.920 --> 0:14:55.600 their books from the people they give credit to. Then 0:14:55.800 --> 0:14:58.440 people don't give Lian Brothers credit. Right then the stock 0:14:58.480 --> 0:15:00.600 market it's like yo, I heard Lim Bros can get credit. 0:15:00.800 --> 0:15:04.520 Then it becomes this spiral, and then Lim Brothers has 0:15:04.560 --> 0:15:07.080 a transaction with bes Terns and best Sterns a transact 0:15:07.120 --> 0:15:09.440 with Javin Morgan. Now people are like, oh, actually I 0:15:09.480 --> 0:15:12.640 know you. I know Lian Brothers, lim Brows can't pay 0:15:12.680 --> 0:15:15.080 the money, and I know Lim Brouh's owes you, so 0:15:15.200 --> 0:15:18.200 now you screw too, and now I'm not gonna buy 0:15:18.200 --> 0:15:20.480 your stock. And then everything kind of just went in 0:15:20.520 --> 0:15:22.000 a cycle so that you. 0:15:22.000 --> 0:15:23.080 Know what it sounds like to cut you off. You 0:15:23.080 --> 0:15:28.360 know what it sounds like. So it almost a Ponzi scheme, right, 0:15:28.440 --> 0:15:32.120 And if you understand how Ponzi schemes work, you only 0:15:32.160 --> 0:15:35.080 really get screwed in the Ponzi scheme when things go bad. 0:15:35.320 --> 0:15:36.840 It's not a lot of people make money in the 0:15:36.880 --> 0:15:38.520 Ponzi scheme like Bernie Madoff. 0:15:38.560 --> 0:15:39.080 Right. 0:15:39.120 --> 0:15:41.000 If you invested early with Bernie maydof, you made a 0:15:41.040 --> 0:15:43.040 lot of money, right, because the thing about it is 0:15:43.040 --> 0:15:45.920 he's taking new money and he's paying the old investors, 0:15:45.960 --> 0:15:47.680 and then he's just kind of repeating the process. Right. 0:15:47.840 --> 0:15:50.520 It only goes bad when people ask for their money 0:15:50.520 --> 0:15:52.840 back in bulk. You don't have enough to cover it. 0:15:53.360 --> 0:15:55.240 But as long as nobody really acts for their money 0:15:55.240 --> 0:15:57.400 in bulk, you can keep that thing going. He kept it. 0:15:57.400 --> 0:16:00.360 He kept the scam going for thirty years because it's 0:16:00.360 --> 0:16:03.480 nobody really asks for anything. You're giving people twelve percent 0:16:03.560 --> 0:16:06.080 a year, why would you ask for your money back. 0:16:06.360 --> 0:16:07.680 You can kill a recession. Haapens. 0:16:07.720 --> 0:16:09.880 Well, that's what I'm saying. So it's all good when 0:16:09.880 --> 0:16:13.160 you when you hedge these kind of bets, until it's 0:16:13.200 --> 0:16:14.040 not all good anymore. 0:16:14.120 --> 0:16:17.240 It's all good till it's not. Exactly, it's like it's 0:16:17.320 --> 0:16:19.240 all good till it's not good. So then, so how 0:16:19.320 --> 0:16:22.800 how quickly did did these guys go under? Like? 0:16:22.840 --> 0:16:25.480 How I could that happened like in a couple of months, right, Like. 0:16:25.560 --> 0:16:27.680 Well, it happened a couple of months. But like I 0:16:27.720 --> 0:16:30.520 guess O seven is when things got a little bit hairy. 0:16:31.520 --> 0:16:35.920 But then like things stabilized in early O eight. So 0:16:36.000 --> 0:16:37.800 bear Stearns was the world want to go down? So 0:16:37.840 --> 0:16:39.880 bear Stearns going down probably like the first quarter of 0:16:39.920 --> 0:16:43.520 O eight, Lean Brothers was you know, people, the stock 0:16:43.680 --> 0:16:45.960 just started going down. So stock stock probably was trading 0:16:45.960 --> 0:16:48.960 in the one hundred and twenty and forties and like 0:16:49.080 --> 0:16:51.800 throughout the year just kind of kept going down. And 0:16:52.040 --> 0:16:53.920 I don't know if you you guys covered this on 0:16:53.960 --> 0:16:56.920 your podcast previously, but basically there's these people that called 0:16:56.960 --> 0:16:59.760 short sellers. You could basically bet that the stock's going 0:17:00.080 --> 0:17:01.520 You haven't covered that, can you talk about it? So 0:17:01.560 --> 0:17:05.439 basically short selling is like it's weird, but basically what 0:17:05.480 --> 0:17:07.960 you do is you say, all right, I think this 0:17:08.080 --> 0:17:10.159 stock is gonna I think this company sucks, I think 0:17:10.200 --> 0:17:12.480 this stock's gonna go down. I'm gonna go to my 0:17:12.520 --> 0:17:15.120 broker or to a bank and say, let me bow 0:17:15.240 --> 0:17:18.359 that stock. I'm gonna sell it, and then I'm gonna 0:17:18.600 --> 0:17:21.199 buy it back later on at lower price. So the 0:17:21.240 --> 0:17:23.480 stock is at fifty and you know, you know the 0:17:23.520 --> 0:17:26.080 company is not making money, or you think the company's 0:17:26.119 --> 0:17:28.000 not making money, you say, all right, I'm gonna buy 0:17:28.000 --> 0:17:29.880 it back later. I might buy it back at twenty five. 0:17:30.440 --> 0:17:32.640 I bought it, I barred, I sold it at fifty, 0:17:33.000 --> 0:17:36.600 bought it back at twenty five. That's twenty five dollars profit, right, 0:17:36.840 --> 0:17:39.199 And so it's actually reversed because obviously usually what you 0:17:39.240 --> 0:17:41.040 do is you buy and you sell. In this case, 0:17:41.080 --> 0:17:43.560 you sell then you buy. And the way you're able 0:17:43.600 --> 0:17:46.840 to do it is because these firms will take other 0:17:46.880 --> 0:17:50.600 people's assets, like other people's stock, and lend it to you. 0:17:50.680 --> 0:17:53.639 It's similar to how people take people's savings account and 0:17:53.760 --> 0:17:56.399 use those as loans. Right. And the question is like, 0:17:56.400 --> 0:17:58.399 why would a bank do that? You actually pay an 0:17:58.400 --> 0:18:02.920 interest rate on that money through while you have it short? Yeah, 0:18:02.960 --> 0:18:05.920 because that's the big short you ever read that book? Yep, 0:18:06.080 --> 0:18:10.000 big short movie that that movie's powerful, and that's what 0:18:10.040 --> 0:18:10.840 these guys. 0:18:10.560 --> 0:18:14.000 Did they made a bunch of a bunch of money, 0:18:14.000 --> 0:18:16.000 a boatload of money from shortened. 0:18:16.200 --> 0:18:19.960 Yeah, they were shortened. That there's shortened, there's mortgage access. 0:18:20.200 --> 0:18:22.240 They predicted that this happened. Yeah, exactly. 0:18:22.280 --> 0:18:24.080 And you went to war in school of business, right, 0:18:24.160 --> 0:18:26.240