The signing was canceled by the president (~30 min before recording) until the SAFE Act passes. Erin shifted from optimistic to skeptical. On the SAFE Act: not a huge win, but the MBA removed several harmful provisions — the 7-year limit on selling build-to-rent homes (which would have frozen that construction market) and a cut to the FHA multifamily limit. Erin's favorite item: the ban on central bank digital currencies (CBDCs) through 2030. Other points: a boost to manufactured housing and an expanded appraiser pool (licensed-but-not-certified appraisers can now do FHA appraisals).
The vote: Senate 85-5, House 358-32 (41 not voting). Dan Crenshaw didn't show up to vote. Shout-out to French Hill (House Financial Services Chair) for working with Maxine Waters and defending the House's fixes — they'll likely lose Hill as chair after the midterms.
Private equity: Bloomberg reported a workaround to the 350 single-family-home cap. Big firms (e.g., BlackRock) took an initial hit, but "there's always a way around these things."
The Fed under Warsh — first meeting
Very positive reaction. Discussion of how Greenspan and then Bernanke (with the dot plot) gave too much forward guidance — which, per Chris Whalen, pulls the market away from seeking information and raises black-swan risk. Excitement about the new task forces, especially the balance sheet composition one — Erin thinks it could significantly impact long-term rates and isn't being discussed enough. Main concern: groupthink inside the Fed (24,500 employees, "ivory tower" and progressive profile). They hope Warsh brings in outside experts.
Economy — warning signs
- Danielle DiMartino Booth: 38.4% year-over-year surge in bankruptcies → leading indicator of trouble; a liquidity crisis; the NBER has been derelict in not declaring a recession (they believe one already happened).
- Inflation: Gundlach (DoubleLine) predicts CPI around 3–3.5% in 6 months; Whalen warns of possible double-digit inflation. The hosts land in the middle but lean pessimistic.
- Drivers: Iran war (JCPOA took 2 years; they gave themselves 60 days), Strategic Petroleum Reserve at historic lows, structural damage (fertilizer tied to gas/oil → food prices), growing national debt.
- Jobs: they criticize the labor data — new jobs are temporary/low-skill; layoffs are hitting high-paid roles; WARN numbers look bad.
Why aren't mortgage rates dropping?
Even though oil fell (~mid-$70s from a ~$119 Brent peak), rates won't budge because of: exploding national debt and uncertainty/volatility around the Iran situation. The bond market dislikes both debt and volatility. Whalen's point: the Fed has effectively already raised rates — it's baked into the market. Looming pressure: $8 trillion in debt to refinance this year (at higher levels), plus SpaceX's IPO followed by a big debt issuance.
Real estate side note (WSJ)
Agents are quitting amid the slow market — now in the fourth year of the slowest stretch, with ~4 million single-family homes needed to reach break-even supply. AI is letting some buyers skip realtors entirely, which the hosts are wary of. Erin pushes back on the WSJ's use of a Veterans United study (small sample, tech-savvy vets), citing a Totality study showing more people want a human in the loop than last year. Their take: AI is fine for experienced buyers who've done 30 transactions, but first-time buyers need a good realtor's guidance (water pressure tests, negotiation tactics, neighborhood-specific concessions).
22 mins