You Won't Believe This…New Report Shows DEFLATION!!
Summary
Rental Deflation: Apartment rents show outright monthly declines due to elevated supply, with implications for CPI via the lagging owner's equivalent rent component.
Regional Banks Risk: Multifamily borrowers financed by regional banks face pressure from declining rents and higher vacancies, raising concerns for bank balance sheets and liquidity.
Real Estate Dynamics: Oversupply in Sunbelt and Mountain West markets is pushing vacancies higher, challenging multifamily owners and potentially Residential REITs.
AI Spillovers: Rent strength in San Francisco/San Jose is tied to the AI boom and data center expansion, but a potential AI bubble burst could reverse rent growth and dampen CPI.
US Treasuries: The guest favors being long the 2-year Treasury, arguing markets are pricing too hawkish a Fed path and that softer CPI and a weakening labor market support lower yields.
Fed Policy Outlook: Falling rent measures and base effects may pull headline CPI toward or below 2.5%, increasing the odds of earlier and deeper rate cuts than currently priced.
Liquidity & Shadow Banking: Continued rent declines could expose more credit “cockroaches,” stressing shadow banking channels and repo-driven liquidity.
Portfolio Implications: Emphasis on macro sensitivity over personal views, positioning for potential dovish shifts as inflation decelerates and growth risks rise.
Transcript
Hello fellow Rebel Capitals. Hope you're well. So the big news of the day, we have actual deflation. That is right. Deflation not in the CPI but the over or not in the overall economy but in a very very important component of the economy. So, we have to dive into the details saying what prices are actually going down because that sounds weird. And then we have to connect the dots and say, okay, what does this mean for the CPI moving forward? What does this mean for the Fed's interest rate decision? And then what does it tell us about the overall economy and maybe even some risks unfortunately with private credit or at least the regional banks the shadow banking system and with liquidity more broadly. So let's dive into it guys. Drum roll please. What on deflation? What George? Have you been to the grocery store lately? Yes, I get it. prices are going up, but in this very important category, looks like they're actually going down. Here we are. US. Actually, let me zoom in. I've got this highlighted for everyone so we can kind of get through this a little more efficiently. Let's zoom in. There we go. Okay, let's bump it up to 150. US apartment rent apartment rent seeepest October decline. Not disinflation, deflation in more than 15 years. Now, check this out. Elevated supply weighs down rent growth. Why is that important? Because the regional banks, think about who has a lot of this debt on their balance sheet. So, okay, let's back up. So, why do we have elevated supply? Because in 2021 and 2022, we had the bullwhip effect where all of these multif family guys and gals went out there and were building all of these apartment complexes because remember short on housing, short we have a supply shortage in housing. That was the narrative and it's going to last forever. So, we just can't build enough homes or we just can't build enough apartment complexes. And what they did is they got over their skis from a standpoint. They're borrowing all of this money a at low interest rates because they thought interest rates would be that uh low for eternity. And then additionally they started all these deals got bit up. All these apartment complexes were being purchased or built but they are doing so on proforma result or proforma numbers. That's what we used to call them. I don't know if they called them something different now or maybe that was just the guys that I used to hang out with. That's what we used to call it. But what that is is basically projecting out into the future rents that will increase and that's the only way that the numbers work. So that's not really the definition. It's just kind of projecting out into the future for numbers. But the numbers they would project would mean rent increases of like 10% per year. Because remember when that was actually a thing? I mean rents have gone up a lot. I know. But remember in 2021 and 2022 they were going up like probably double digits a year. I mean it was absolutely insane. So what these guys and gals did that were building or these uh multif family investors by the way not Kitty Mroy is he was warning about this is they were sitting there saying okay right now if I buy this apartment complex for x amount of dollars I'm going to be cash flow negative with let's just say a 2% interest rate but when when rents increase at 10% per year for the next 20 years. Well, then this thing will pencil and I'll make a ton of money. So, let's just go ahead and bid more than it's worth worth based on the fact that we will likely have negative cash flow for the next year or the next two years. But what they didn't anticipate is that rent growth would not only go from double digits down to single digits, but now might even decline. So, think about where they got all this money. Okay? Okay, it might have been through equity, but it's a combin Usually it's a combination of both. Equity and debt. Okay, who are they borrowing the money from? That would be the regional banks. So, you see how this is all interconnected, right? And what does that do to liquidity? What does that do to the repo market? What does that do to more cockroaches? What does that do to the tide continuing to go out uh continuing to go out? You see, that's why you got to think through this stuff. There's multiple layers here. But anyway, getting back to this, the national average rent fell to 1708, a 3%, excuse me, 3% decrease from September's revised figure. 1713 $1,713. That marks the fourth consecutive month of no change or negative change in monthly rent. Now, the first thing that came to my mind when I was reading this is, oh, maybe it's seasonal. It definitely is. It definitely is. But what they say, well, we'll get on we'll get into it here in a moment. So, this blue line is the annual growth rate. So, annually it is still growing. But look at the trend. And then look at what we've done. July, we're flat. And then August, we're starting to come in with actual deflation. Deflation. And when you look at these and you see in these months you usually have a that's seasonal effect. But let's keep going here because here we go. This is the part that's really important because we got to look at the trend here, right? It's all about the rate of change. Apartment rent growth typically follows the seasonal pattern with expiration in the spring and slowdown in late summer and fall. Okay. So that's what we see here and that's what we're seeing here. So this is expected but it's it but the deflation the prices going down is not expected. Usually you just have slower rent growth month overmonth. Let's keep going. So this according to apartments.com since 2022 elevated supply levels nationally have turned that deceleration into outright decline. each fall. And we're seeing that accelerate. That's the point here. All US regions posted declines in rent in October. I'm sure that's probably new. With the West leading the country with 0.53% month- over-month decrease, followed by 28 slide in South.24 northeast. According to apartments.com, rents in the Midwest declined.18 in October. Now, let's think about this through the lens of the CPI. Remember guys, the CPI is like 33% owner's equivalent rent. Now, notice I said owner's equivalent rent. It It's not really unfortunate. I don't know why they don't just take real time data. I Why are we doing this with the government BL and the BLS? Why do we need 9,000 economists to sit there and try to figure out what owner's equivalent rent is when we could just go and get real-time data from apartments.com? I mean, anyway, I don't want to get off on a tangent. So, like 33% is this owner's equivalent rent and and it's and it notoriously has a huge lag. So, if rents in the real world are actually going down, then you could have owner's equivalent rent. that is that key metric in the CPI going up and then finally it rolls over and then starts to follow the actual rents in the real world. And so if you look at the owner's equivalent rent as far as that metric comp that component of the overall CPI that is not showing declines like the real-time data. So, if this continues, which the trend would lead us to believe it likely will, then you should see that owner's equivalent rent component of the CPI start to the growth rate start to go down and we could see an even an actual outright decline. And if we see an outright decline, then it's going to be very very difficult for the CPI overall to increase because again it's 33% that housing component 33% of the overall equation. So this is something we really got to pay attention to because then let's assume that we I think the CPI right now is 3%. And so what happens if this force takes it down to 2.5 or it starts decreasing pretty substantially month over month? What does that do for the Fed's rate cut decision? And oh, by the way, I want to point out that right here, let's look at Fed Watch. The odds of a December cut are 65%. The odds of a pause, 34.6. So basically 35% of a pause. So, you start getting rents going down and and let's go back to the uh to this chart. If you start seeing these seasonal months that are usually going up quite substantially, let's just say uh December, January, February. So, that's what we're heading into here in 2026, you know. So, next month is December. So, this will be really interesting because it looks like that's usually when you start even if you have lower growth rates in the end of the summer fall, it seems like it picks back up in December and then heading into the spring, which makes a lot of sense. So, I mean, if this December 2025, we still see a decline. And by the way, this is interesting, too. Check this out. Back in October of 2024, we had a negative.2%. But in November, we had a.1. So we had a little less of a decline in November. So, I'll be really interested to see what the November and then the December results are because if we get a steeper negative this year, excuse me, this November, then uh we saw well, how should I say this? I'm not saying this correctly. If we see a uh steeper negative this November than the preceding October, that would tell us that we've had a a a paradigm shift in what is happening here. Because again, the reason I'm saying that is because we had a steeper decline in October last year than we had November. So if that switches, and by the way, remember last November was 0.2. This excuse me, last October was 0.2. this October is 31. So if we have a steeper November negative, so let's just say.35 or 041, then this is a total gamecher like total gamecher in my view in terms of what is likely to play out in the CPI over the next few months especially when you consider the base effects. Remember what we do is we lose one month and we gain the the the the next month, right? So if we because it's just a 12-month time period and then they adjust it somehow as well. But if we're losing months of 0.5 and we're gaining months of zero or 0.1, then that's also going to bring down the overall CPI, the annual CPI, even though the month over month is still positive. So, a lot of moving parts here as you can tell. But this is something we really, really, really have to pay attention to if we care about what the Fed's going to do with interest rates. Um, which unfortunately I don't think it matters that much, but the market really does. And at the end of the day, it's not about what I think. It's not about what you think. It's really only about what the market thinks when you're setting up a portfolio. But let's go over to the BLS and I want to highlight the overall trend even in their housing price um and I think it's a survey actually but even in their numbers here we focus on shelter and you can see that's going straight down and that has been going down for quite some time but it's just still right here you see that it's going up based on September data their metric was increasing 3.6%. So, we have to And you say, George, but that's not housing prices, right? But remember, they don't calculate housing prices. They calculate owner's equivalent rents. So, it's all about the rent. It's all about the rent. So if we see the real time data, let's just say go negative um even into the winter and spring, then this likely starts heading straight down to zero. And if this starts heading down to zero, it's going to be almost impossible for the CPI to stay above, let's just say even 2%. And I'm I'm talking over the next six months, like not next month. And if that's the case, then what does the Fed do? And I'm I assure you these numbers will change quite substantially. Maybe not for the next Fed meeting, but the when we look out into actually, let's do that. I'm curious. What does March look like? So March, you're looking at where are we right now? We're 37. Are you kidding me? So right now we're at 375 to 4% on Fed funds. So there's an 11% chance that the Fed does nothing from now until March. Uh I'll take the under on that one. What? Wow. Oh well, glad I own the two-year. My goodness gracious. So, if you're not following my my sporadic law logic there, [laughter] I'm looking at this saying, okay, there's a 12% bet that the Fed's going to pause all the way through March of next year. And the reason they're doing this is because they're looking at the labor market. It's tanking. But then they're looking at inflation and they're like, "Well, it's kind of sticky." So, this is kind of the balancing act, right? But if they look at the inflation data and it's no longer sticky, it's going down. And I know the CPI understates inflation, but again, we're just looking at this through their lens, right? Trying to figure out what the decision-m is going to be here. So if the stickiness of the inflation starts to go down to where that's not an issue, that's not a concern, then all you've got left is a labor market and that's really a concern. And so if let's just say there's a 50/50 chance that the CPI the annual the headline number is let's just say 2.5%. and heading kind of down, declining even month over month in March of 2026. You combine that with the what is likely a continued trend and a deterioration of the labor market and you're telling me you're pegging a 11 12% chance they're going to be paused? Like like there's no way. Um my view would be there's probably I mean, I'd say like a 3% chance that they'll be paused. So, I would be way more dovish here than what the market is pricing in, which is why I like owning the two-year. This isn't investing advice, but I'm just telling you what I do. Why I like being long the two-year Treasury because the two-year Treasury right now at let's say 3.56 is pricing in this. [laughter] And if it's pricing in this, I think it's pricing in something that's way way too hawkish, which would be a tailwind for Whoops. a tailwind for yields in the two-year Treasury going down uh a lot further. Okay, so let's get back to the article here. Now, here's some details, guys. Kind of we went over the regional stuff, but let's go over let's see, they break it down even further to Mountain West and Sunb Belt markets continue to face elevated vacancies with aggressive new supply. aggressive new supply that doesn't sound too good for guys and gals who own multif family properties. And if it's not good for the guys that own multif family properties, then it ain't good for the banks. And if it ain't good for the banks, then it ain't good for liquidity. And if it ain't good for liquidity, then it's really good for the tide continuing to go out. And it's really good for seeing more and more cockroaches. You see, that's how you really have to connect the dots. So, they say the steepest monthly rent decline occurred in Denver, down 1.3% just for the month. Wow. Followed by Austin, which fell 1.1. Seattle.9 and Salt Lake Phoenix dropped by8. Says Amazon recent job cuts in Seattle are kind of weighing on demand based on this report. But think about that. So, okay. Actually, let me include this next component and then we'll uh go ahead and connect these thoughts. In terms of annual rent growth, San Francisco led the nation followed by by San Jose. Why? Why is that AI? It's just it's the AI insanity. It's the AI bubble. So, and by the way, I thought this was interesting that um 3 point, excuse me, the third looks like Chicago was second and then third was Norfolk, Virginia, which if I'm not mistaken is the largest data center hub in the United States. Don't don't quote me on that, but I'm like 75% sure that's the biggest area of this data center boom. So you've got the data centers and then you have the AI bubble that's fueling that. So then you see San Jose, you see um San Francisco and you have to ask yourself if that AI bubble bursts, what happens to rent growth there? It's going to completely collapse and then it's going to be right in line with what we're seeing in the Mountain West and Sunb Belt. And if that happens, then what does that do to the CPI? What does that do to the odds of an interest rate cut or pause from the Federal Reserve? Okay guys, definitely a story we'll have to watch closely there on that bombshell. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism. We'll see you on the next video.
You Won't Believe This…New Report Shows DEFLATION!!
Summary
Transcript
Hello fellow Rebel Capitals. Hope you're well. So the big news of the day, we have actual deflation. That is right. Deflation not in the CPI but the over or not in the overall economy but in a very very important component of the economy. So, we have to dive into the details saying what prices are actually going down because that sounds weird. And then we have to connect the dots and say, okay, what does this mean for the CPI moving forward? What does this mean for the Fed's interest rate decision? And then what does it tell us about the overall economy and maybe even some risks unfortunately with private credit or at least the regional banks the shadow banking system and with liquidity more broadly. So let's dive into it guys. Drum roll please. What on deflation? What George? Have you been to the grocery store lately? Yes, I get it. prices are going up, but in this very important category, looks like they're actually going down. Here we are. US. Actually, let me zoom in. I've got this highlighted for everyone so we can kind of get through this a little more efficiently. Let's zoom in. There we go. Okay, let's bump it up to 150. US apartment rent apartment rent seeepest October decline. Not disinflation, deflation in more than 15 years. Now, check this out. Elevated supply weighs down rent growth. Why is that important? Because the regional banks, think about who has a lot of this debt on their balance sheet. So, okay, let's back up. So, why do we have elevated supply? Because in 2021 and 2022, we had the bullwhip effect where all of these multif family guys and gals went out there and were building all of these apartment complexes because remember short on housing, short we have a supply shortage in housing. That was the narrative and it's going to last forever. So, we just can't build enough homes or we just can't build enough apartment complexes. And what they did is they got over their skis from a standpoint. They're borrowing all of this money a at low interest rates because they thought interest rates would be that uh low for eternity. And then additionally they started all these deals got bit up. All these apartment complexes were being purchased or built but they are doing so on proforma result or proforma numbers. That's what we used to call them. I don't know if they called them something different now or maybe that was just the guys that I used to hang out with. That's what we used to call it. But what that is is basically projecting out into the future rents that will increase and that's the only way that the numbers work. So that's not really the definition. It's just kind of projecting out into the future for numbers. But the numbers they would project would mean rent increases of like 10% per year. Because remember when that was actually a thing? I mean rents have gone up a lot. I know. But remember in 2021 and 2022 they were going up like probably double digits a year. I mean it was absolutely insane. So what these guys and gals did that were building or these uh multif family investors by the way not Kitty Mroy is he was warning about this is they were sitting there saying okay right now if I buy this apartment complex for x amount of dollars I'm going to be cash flow negative with let's just say a 2% interest rate but when when rents increase at 10% per year for the next 20 years. Well, then this thing will pencil and I'll make a ton of money. So, let's just go ahead and bid more than it's worth worth based on the fact that we will likely have negative cash flow for the next year or the next two years. But what they didn't anticipate is that rent growth would not only go from double digits down to single digits, but now might even decline. So, think about where they got all this money. Okay? Okay, it might have been through equity, but it's a combin Usually it's a combination of both. Equity and debt. Okay, who are they borrowing the money from? That would be the regional banks. So, you see how this is all interconnected, right? And what does that do to liquidity? What does that do to the repo market? What does that do to more cockroaches? What does that do to the tide continuing to go out uh continuing to go out? You see, that's why you got to think through this stuff. There's multiple layers here. But anyway, getting back to this, the national average rent fell to 1708, a 3%, excuse me, 3% decrease from September's revised figure. 1713 $1,713. That marks the fourth consecutive month of no change or negative change in monthly rent. Now, the first thing that came to my mind when I was reading this is, oh, maybe it's seasonal. It definitely is. It definitely is. But what they say, well, we'll get on we'll get into it here in a moment. So, this blue line is the annual growth rate. So, annually it is still growing. But look at the trend. And then look at what we've done. July, we're flat. And then August, we're starting to come in with actual deflation. Deflation. And when you look at these and you see in these months you usually have a that's seasonal effect. But let's keep going here because here we go. This is the part that's really important because we got to look at the trend here, right? It's all about the rate of change. Apartment rent growth typically follows the seasonal pattern with expiration in the spring and slowdown in late summer and fall. Okay. So that's what we see here and that's what we're seeing here. So this is expected but it's it but the deflation the prices going down is not expected. Usually you just have slower rent growth month overmonth. Let's keep going. So this according to apartments.com since 2022 elevated supply levels nationally have turned that deceleration into outright decline. each fall. And we're seeing that accelerate. That's the point here. All US regions posted declines in rent in October. I'm sure that's probably new. With the West leading the country with 0.53% month- over-month decrease, followed by 28 slide in South.24 northeast. According to apartments.com, rents in the Midwest declined.18 in October. Now, let's think about this through the lens of the CPI. Remember guys, the CPI is like 33% owner's equivalent rent. Now, notice I said owner's equivalent rent. It It's not really unfortunate. I don't know why they don't just take real time data. I Why are we doing this with the government BL and the BLS? Why do we need 9,000 economists to sit there and try to figure out what owner's equivalent rent is when we could just go and get real-time data from apartments.com? I mean, anyway, I don't want to get off on a tangent. So, like 33% is this owner's equivalent rent and and it's and it notoriously has a huge lag. So, if rents in the real world are actually going down, then you could have owner's equivalent rent. that is that key metric in the CPI going up and then finally it rolls over and then starts to follow the actual rents in the real world. And so if you look at the owner's equivalent rent as far as that metric comp that component of the overall CPI that is not showing declines like the real-time data. So, if this continues, which the trend would lead us to believe it likely will, then you should see that owner's equivalent rent component of the CPI start to the growth rate start to go down and we could see an even an actual outright decline. And if we see an outright decline, then it's going to be very very difficult for the CPI overall to increase because again it's 33% that housing component 33% of the overall equation. So this is something we really got to pay attention to because then let's assume that we I think the CPI right now is 3%. And so what happens if this force takes it down to 2.5 or it starts decreasing pretty substantially month over month? What does that do for the Fed's rate cut decision? And oh, by the way, I want to point out that right here, let's look at Fed Watch. The odds of a December cut are 65%. The odds of a pause, 34.6. So basically 35% of a pause. So, you start getting rents going down and and let's go back to the uh to this chart. If you start seeing these seasonal months that are usually going up quite substantially, let's just say uh December, January, February. So, that's what we're heading into here in 2026, you know. So, next month is December. So, this will be really interesting because it looks like that's usually when you start even if you have lower growth rates in the end of the summer fall, it seems like it picks back up in December and then heading into the spring, which makes a lot of sense. So, I mean, if this December 2025, we still see a decline. And by the way, this is interesting, too. Check this out. Back in October of 2024, we had a negative.2%. But in November, we had a.1. So we had a little less of a decline in November. So, I'll be really interested to see what the November and then the December results are because if we get a steeper negative this year, excuse me, this November, then uh we saw well, how should I say this? I'm not saying this correctly. If we see a uh steeper negative this November than the preceding October, that would tell us that we've had a a a paradigm shift in what is happening here. Because again, the reason I'm saying that is because we had a steeper decline in October last year than we had November. So if that switches, and by the way, remember last November was 0.2. This excuse me, last October was 0.2. this October is 31. So if we have a steeper November negative, so let's just say.35 or 041, then this is a total gamecher like total gamecher in my view in terms of what is likely to play out in the CPI over the next few months especially when you consider the base effects. Remember what we do is we lose one month and we gain the the the the next month, right? So if we because it's just a 12-month time period and then they adjust it somehow as well. But if we're losing months of 0.5 and we're gaining months of zero or 0.1, then that's also going to bring down the overall CPI, the annual CPI, even though the month over month is still positive. So, a lot of moving parts here as you can tell. But this is something we really, really, really have to pay attention to if we care about what the Fed's going to do with interest rates. Um, which unfortunately I don't think it matters that much, but the market really does. And at the end of the day, it's not about what I think. It's not about what you think. It's really only about what the market thinks when you're setting up a portfolio. But let's go over to the BLS and I want to highlight the overall trend even in their housing price um and I think it's a survey actually but even in their numbers here we focus on shelter and you can see that's going straight down and that has been going down for quite some time but it's just still right here you see that it's going up based on September data their metric was increasing 3.6%. So, we have to And you say, George, but that's not housing prices, right? But remember, they don't calculate housing prices. They calculate owner's equivalent rents. So, it's all about the rent. It's all about the rent. So if we see the real time data, let's just say go negative um even into the winter and spring, then this likely starts heading straight down to zero. And if this starts heading down to zero, it's going to be almost impossible for the CPI to stay above, let's just say even 2%. And I'm I'm talking over the next six months, like not next month. And if that's the case, then what does the Fed do? And I'm I assure you these numbers will change quite substantially. Maybe not for the next Fed meeting, but the when we look out into actually, let's do that. I'm curious. What does March look like? So March, you're looking at where are we right now? We're 37. Are you kidding me? So right now we're at 375 to 4% on Fed funds. So there's an 11% chance that the Fed does nothing from now until March. Uh I'll take the under on that one. What? Wow. Oh well, glad I own the two-year. My goodness gracious. So, if you're not following my my sporadic law logic there, [laughter] I'm looking at this saying, okay, there's a 12% bet that the Fed's going to pause all the way through March of next year. And the reason they're doing this is because they're looking at the labor market. It's tanking. But then they're looking at inflation and they're like, "Well, it's kind of sticky." So, this is kind of the balancing act, right? But if they look at the inflation data and it's no longer sticky, it's going down. And I know the CPI understates inflation, but again, we're just looking at this through their lens, right? Trying to figure out what the decision-m is going to be here. So if the stickiness of the inflation starts to go down to where that's not an issue, that's not a concern, then all you've got left is a labor market and that's really a concern. And so if let's just say there's a 50/50 chance that the CPI the annual the headline number is let's just say 2.5%. and heading kind of down, declining even month over month in March of 2026. You combine that with the what is likely a continued trend and a deterioration of the labor market and you're telling me you're pegging a 11 12% chance they're going to be paused? Like like there's no way. Um my view would be there's probably I mean, I'd say like a 3% chance that they'll be paused. So, I would be way more dovish here than what the market is pricing in, which is why I like owning the two-year. This isn't investing advice, but I'm just telling you what I do. Why I like being long the two-year Treasury because the two-year Treasury right now at let's say 3.56 is pricing in this. [laughter] And if it's pricing in this, I think it's pricing in something that's way way too hawkish, which would be a tailwind for Whoops. a tailwind for yields in the two-year Treasury going down uh a lot further. Okay, so let's get back to the article here. Now, here's some details, guys. Kind of we went over the regional stuff, but let's go over let's see, they break it down even further to Mountain West and Sunb Belt markets continue to face elevated vacancies with aggressive new supply. aggressive new supply that doesn't sound too good for guys and gals who own multif family properties. And if it's not good for the guys that own multif family properties, then it ain't good for the banks. And if it ain't good for the banks, then it ain't good for liquidity. And if it ain't good for liquidity, then it's really good for the tide continuing to go out. And it's really good for seeing more and more cockroaches. You see, that's how you really have to connect the dots. So, they say the steepest monthly rent decline occurred in Denver, down 1.3% just for the month. Wow. Followed by Austin, which fell 1.1. Seattle.9 and Salt Lake Phoenix dropped by8. Says Amazon recent job cuts in Seattle are kind of weighing on demand based on this report. But think about that. So, okay. Actually, let me include this next component and then we'll uh go ahead and connect these thoughts. In terms of annual rent growth, San Francisco led the nation followed by by San Jose. Why? Why is that AI? It's just it's the AI insanity. It's the AI bubble. So, and by the way, I thought this was interesting that um 3 point, excuse me, the third looks like Chicago was second and then third was Norfolk, Virginia, which if I'm not mistaken is the largest data center hub in the United States. Don't don't quote me on that, but I'm like 75% sure that's the biggest area of this data center boom. So you've got the data centers and then you have the AI bubble that's fueling that. So then you see San Jose, you see um San Francisco and you have to ask yourself if that AI bubble bursts, what happens to rent growth there? It's going to completely collapse and then it's going to be right in line with what we're seeing in the Mountain West and Sunb Belt. And if that happens, then what does that do to the CPI? What does that do to the odds of an interest rate cut or pause from the Federal Reserve? Okay guys, definitely a story we'll have to watch closely there on that bombshell. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism. We'll see you on the next video.