Understanding the Looming Recession: Why Only the Paranoid Survive in Today's Market

[Music] remember a couple years ago how everybody was talking about that a

market crash was coming everybody's like oh my God what if it happens what if it doesn't now everybody's talking about

it's going to be soft Landing there's not going to be any recession and there's one thing that people forgot

about the saying only the paranoid survive this is coming soon that starts this month a month before election there

should be a recession in America so people are now it's totally fine look at the market it's near all-time Highs but

is it really if you were to pull out the top seven stocks when you see the numbers on this it's staggering and on

top of that there is an indicator of when a recession actually hits and it isn't while we're raising interest rates

the FED it happens after we stop raising rates and wait till you see how long it takes for the market to crash and by the

way I got a bunch of other data to share with you but uh I've learned one thing for sure having been in the financial

industry since the day before 9/11 only the paranoid survive and those who are way too confident are typically wrong

and those who are way too cocky are are also typically wrong so here's us interest rate hikes in the history of

America when we raise rates we have never raised 4.88 percentage points as quickly as we

did in the state nothing comes closer to 22 to 23 of 4.88 but what does this really mean so if we look at the balance

sheet of this is pretty much the quantitative easing balance sheet that shows how much bonds the FED is buying

the M2 money supply shows how much money is circulating in the economy so you notice look how historically it's

gradually climbing climbing climbing but it's nothing that's sudden then all of a sudden boom we feed the economy the

market with trillions of dollars we're not accustomed to and we don't have another case study for somebody to say

well here's what's going to happen well it's totally okay well don't worry about it based on what based on what case

study can you speak so confidently saying nothing's going to happen everybody is almost protecting whatever

business they're part of investment they have they're trying to sell why they're right and maybe don't worry about it or

do worry about it but the reality of it is nobody knows 100% what's going on cuz we've never been here before so let's

continue so then 2024 projections what's next for the US economy they did a survey to find out who thinks a

recession is coming the FED staff says 0% there's not going to be a recession I remember they're in the business so

they're supposed to be saying that because that is Wall Street right yield curve says 61% chance of recessions

coming next 12 months economists are at 48% consumers are at 69% that's Main Street you and I Goldman Sachs is saying

only 15% Bank of America 35 to 40% but look at CEO 84% Okay Sea SES are saying 84% now what would cosos know that rest

of them don't know maybe they know their debt payment maybe they know when their debt payment interest rates that they

got was lowerer that if they have to renew the debt that they got it's going to go up here how the hell are we going

to make those payments maybe we got look at what some of these cosos are talking about you'll notice the percentage of

S&P 500 companies citing keywords on earning calls what words they're using fewer times inflation has decreased

material costs decreased economical slowdown decreased job Cuts went up but it's also decreased so could this be a

sign that everything's going to be okay if yes why are CEOs at 84% saying a recession is coming are

they Houdini are they Nostradamus are they somebody that can predict the future what do they know that the rest

of the people don't know now when it comes on to S&P 500 these are the 500 biggest companies in America something

very interesting is happening there are seven companies that make up 28% of the S&P 500 let me break this

down for you 500 biggest companies seven companies make up 28% in the history of S&P 500 never has there been a time

where seven companies make up 28% we''ve never had seven companies you know too big to fill what are these companies you

got meta Facebook Nvidia Apple Microsoft alphabet Amazon and Tesla so why is this important here's why if you look at the

S&P 500 year to- dat returns you will notice a number roughly around 12% could be higher could be lower but it's around

12% you know what magnificent 7's return is for the year so far roughly 92% so what happens if you take the seven

stocks out and there there's only 493 stocks left how's the S&P 500 doing it's down so the seven are pulling the rest

of the market and it looks like everything else is okay but is it really so we decided to break it down to see

how small cap companies were doing midcap companies were doing versus large cap companies and you will notice a

trend here watch this if you look at this chart you'll notice three different funds here one is the Spy which is the

S&P 500 the other one is the Russell 2000 then you have the micro cap ETF so if you look at these the S&P 500's

companies valued roughly at 12.7 billion or higher top 500 biggest companies in America Russell 2000 is company size is

$300 million to $2 billion market cap and then the micro cap is from 50 million to 300 million so if you look at

this what do you notice you'll notice spy is up 18.66% the rich get richer the big get

bigger the stronger get stronger great Russell 2000 is only up 7% but look at the micro cap micro cap companies are

down 1.85% so why is that is it the bigger guys can afford to go through a season

like this they can weather the storm and it can kind of handle because the amount of cash they have and capital they have

and the smaller guys cannot possibly but we cannot fool ourselves thinking the market is up just because these seven

magnificent companies are carrying the weight so so far the reason why the market hasn't crashed is one magnificent

7 is holding the S&P 500 high so people are like it's going to be okay number two unemployment is super low 50e low so

people have jobs they're paying their bills they're not really that worried about it they are worried but not that

worried about it to the point that the market has to think about maybe a crash or recession coming around the corner

however number three is something to be concerned about because the US consumer credit card debt tops a trillion dollars

so you may say Pat credit card debt trillion dollars I get it it's the highest it's ever been in the history of

America it's not like that's that big of a deal we've been spending money on credit cards for a while fine no problem

but look at this chart tell me if this concerns you a little bit this is the credit card interest r rate this shows

you let me explain what the differences are blue is the credit card rate orange is the 5year US Treasury the gray is the

difference between the two so look at credit card interest rates is the highest it's ever been because as rates

go higher your interest rate on your credit card goes higher and then it makes you mis payments more so if you

had a $33,000 credit card total debt and it keeps going higher and higher and higher your payments are getting bigger

and bigger and bigger the average person is like look I can afford to pay 300 bucks a month I can't afford to pay $420

a month all of a sudden it went up or a bigger number than that $420 now it's $580 but this is not a good sign of

what's taking place because people's interest payments are officially higher than they've ever been before now for

some of you guys that are watching this I don't want to break it to you I got some bad news for you you know the 30 40

million students or Americans who were paying their debt for their student loan remember that whole where the government

said yeah during Co don't worry about making a payments we're going to defer this in October those things are coming

back so think about 30 to 40 million people having to pay another $300 per month that starts this month so put that

on top of everything else that's going on another 300 bucks a month now this next one's going to be crazy because

this next one some people could say p this is why the market is not going to crash and I'll give you the argument

currently mortgage rates are well over 7% in some cases at 8% about 4% or 5% higher than the lowest mortgage rates we

have in 2022 we're around 3% today we're at say 7 and 1/2 8% despite the sharp increase in interest rates the weighted

average rate has barely ticked up only those buying houses are affected by no mortgage rates and there aren't many

home buyers so what this means is the weighted if you take everybody's mortgage loan everybody's loan together

and you average it weighted rate that they have it hasn't increased cuz people are not refinancing the refi business is

dead today right only the people that buying a new house are paying these new high rates and people are not buying as

many houses as they did before because people are not selling cuz those who are not wanting to sell they don't want to

go from a 3% loan to an 8% loan you get the idea how long this can last no one knows but they're still hanging on to

that loan saying I'm not giving up this 3% loan okay so that was a breather I gave you some bad news that's a student

loan you got to PID reminded you were kind of said then I give you some good news this is the real news you want to

know about why the market hasn't tanked it when you look at this chart this is the Fed funds and the lag effect the lag

the delay the graph below shows the FED fund rate and the time as measured in months from the last in a series of rate

hikes preceding each recession since 1981 so meaning they're increasing the rates increasing increasing increasing

increasing increasing boom they stop raising how long did it take until recession hit if you look at these

numbers you'll see a six a 15 months 8 months 17 months 10 months you know what that means takes roughly 11 months from

the moment we stop raising interest rates that recession appears again if this data is real a month before

election there should be a recession in America based on this chart that's what should happen some people may say well

Pat how come more corporations are not filing bankruptcy how come all this stuff that happened in 2008 is not

happening today because these corporations if you look at this chart what they were doing is the money they

took companies were taking millions and billions from Banks saying go get some more money from the bank cuz it's so

cheap what do we do with the money just set it aside who cares well go get the money yeah but the rates are only locked

for 3 years or two years or four go get 50 million go get a billion go get 100 million and they did so what did these

corporations do they took that $50 million at 3% and they bought bonds so the difference let's just say the bonds

paying 6% the 6% 3% the 3% they're making on top of us okay we're making 3% on 50 million bucks we were making

million and a half in interest this is awesome we should have borrowed more money however if you look at this chart

you know what's coming up here's what's coming up when that expires and it matures and then it goes from 3% to 8%

they're going to be in deep trouble cuz they have to make those payments they can no longer make money on that so what

do they do that's when they have to say hey we don't want this loan anymore Let me give it back to you if they have the

money or two bank's going to say we're expecting a payment do you have it can we wait another month can we wait

another two months this this is why a company called weor that was valued at $47 billion in 2017 where soft Bank gave

it $18.9 billion investment defaulted on a $95 million payment we haven't seen a

lot of this yet this is coming soon so let me unpack this lag effect of these corporations having to pay their

interest on the loan that they took take a look at this chart if you look at this chart this is Corporate debt maturing in

billions of dollars to the left roughly 700 90 billion matures how much does it mature in 25 1.1 trillion and then it

goes to roughly 1.2 trillion give or take 2027 stays at a trillion 2028 goes closer to 1.3 trillion how are they

going to go all of a sudden from 2 3 4500 billion to a trillion to 1.4 trillion 1.5 trillion and this is why

when we ask the question at the beginning who is the least optimistic about recession 84%

CEOs maybe they know something that others don't because they know that debt is coming so so far we've talked about

imagine the average individual is like look dude you might school loan I got to pay for now that credit card debt went

up all of a sudden to the highest it's ever been DED I can't afford these payments and you're noticing the

defaults right now you know commercial real estate companies are defaulting on their payments subprime Auto Finance so

those people that don't have good credit that bought a car they're starting to default with their payments cuz their

interest rates are going out their default and they can't afford a pay right now but who else is experiencing

this these were all small things we're talking about right you know who else owes a lot of money what Corporation in

the world owes the most money you know what that Corporation is called the Great United States of America you know

what's going to happen to them every time interest rates go up let's break it down for you so us roughly owes $33

trillion of national debt math would tell you and I that each 1% increase in interest rates pushes the government's

interest expense up by you know how much $320 billion each per each 3% is a trillion dollar just interest increase

not total an increase of an additional $3 trillion at each 3% so just to kind of put that in context if you look at

this chart look what it shows you this is the interest expense we've had in us from 1970 till today you know how it's

gradually gone up gone up gone up but it's nothing anything crazy then look at Co boom boom Skyrocket it how are we

going to make these payments I have no clue but they're going to come to you and I cuz it's really our debt the

government is we the people you and I are running you know we hired these people to run this Corporation but they

come to you and I to fund it so guess who they're coming to very soon you and I you now there's

certain things you look at to be motivated and excited about the future take a look at this chart here so again

remember this Corporation we're talking about called the United States of America here's what this is the green is

the tax revenue our government gets every Year from you and I the Orange is our GDP the blue is our interest payment

and the red is our debt the $33 trillion debt look how many many years ago in 1980 everything was right next to each

other just 43 years ago they're neck and neck all of a sudden Boom the red goes off to the roof it just skyrockets all

the way to the top GDP is a gradual growth and guess what all of a sudden caught up to being the second highest

now it's our interest expense this is not good news this is why every time these guys don't want to go balance

their budget except they want to spend money and people say well it's okay well it's okay well it's okay you're just

telling them don't do your job it's okay keep spending money I'm okay with that this is our doing cuz we voted these

people in you and I voted these people in and they're managing Us's finances in a reckless way a lot happened yesterday

one First Rate cut in God knows March of 2020 4 and 1/2 years since March of 2020 there's a rate cut cut however

everybody's asking why is the market tanking why did the market tank in the opposite react in opposite way not tank

interest rates 11 times in 6 months we raised the rates never in the history of America have we done this we haven't

touched the rates for over a year and a last time we lowered the rates was 4 and A2 years ago March of 2020 Jerome pal

making this announcement he comes out everybody's expecting a court of a point it's not going to be anything it's only

going to be a qut of a point we're even talking about it you said 50/50 I said said 50/50 for a half a point yeah and

then all of a sudden he says nope we're going to a half a point Tom I have a chart I want to show after you're done

but I want to hear your reaction when you saw this so I was 50 so was I super surprised no but was I somewhat

surprised sure cuz I was 50/50 and what everyone had been looking at all the FED Watchers and I get away from all the

chaff and I try to Signal the noise ratio I try to get the signal and cut out the noise of a lot of that chatter

and what was in the signal was that there's a lot of these Labor Statistics and unemployment the fed's going to go

faster on rate Cuts if it's worried about unemployment or a stagnating economy like slowing down so recession

unemployment whoops got to drop the rates well recession everybody's been thinking it's recession or thinking

we're in a structural recession right now but it's light and the labor numbers keep getting revised so everybody

including the FED had been saying you know some of these labor statistics it's troubling to see them revised and we've

even covered it here they were missing 100,000 jobs they came back a week later oh yeah we're sorry really was 100,000

different sorry meanwhile the White House took credit for creating all these jobs and they revised it a week later so

with all that jobs data and the potential recession that was a 50% of me that said you know what he may go to

half a point there to protect the economy I get that Tom but what's the average person right now so the stock

market dipped after historic Fed rate cut here's what experts think here's fortune and what they think why this is

taking place so Federal Reserve cut the rates by half a point calling it a move to demonstrate officials confidence that

the labor market can stay strong with appropriate recalibration despite the Dow dropped quar of a basis point and

Robert fright corporate Economist at nav Federal Credit Union noted that half a point cut is an admission the fit is

behind the curve the market reaction saying the market has priced in a rate path that looks more like what an

impending recession would require rather than the fed's less aggressive recalibration the fed's Outlook of two

more quar of a basis point Cuts this year that's a full-on under basis points by 2025 disappointed investors Powell

insisted that the US economy is in good shape but his comment that we're not going back to near zero rate cause unees

watch this every time we've cut rates the first time I just kind of want you to think about this historically when

there's been these climbs of rate increases and then there's the First Rate cut how much does the stock market

drop at after the First Rate cut historically the market usually reacts down because the market is usually

talking about what it needs and the economy is showing what it needs and when the FED finally responds usually

the fs there's two theories fed Chase and fed ahead fed usually chases because fed looks at history the FED reacts to

history so the FED is chasing its tail where's the stock market is always speculating it's always aead yes exactly

the federal fund rate has increased 10 times in 14 months I think it's 11 time in 16 months so if you look at that

that's the cycle that we've been going bam we went up stock market valuation and performance after fed's First Rate

cut so the First Rate cut happens and then it shows the average of how much the decline is

20.5% wow that's the average not after the first dates 94 days or 20 days or 437 days but after the first rate cut

the market tanks 27.6% in 1980 it dropped 2% 1981 dropped 22 .6 84 dropped 1 89 dropped 8 95 dropped half 2001

dropped 42% okay after the First Rate cut which is what a year and 9 months the first

one is a 3 months the third one is a year and 2 months and then the 55.5% that's how many years that's a

year and a half and the 24.2 that we went through just four years ago was in roughly 7 months right give or take that

it dropped 24.2 so if on average if we go based on this there's going to be a 202 Market correction within 3 months to

18 months based on history that's what this is telling us the question then becomes the following how different is

this than others the average person is going to ask how does this affect the housing market number one mortgage rates

may not drop much further a lot of people are thinking it's going to drop it says no although mortgage rates have

decreased to 6.2 they're lowest since February 23 further drops will likely be marginal as the rate cut may already be

priced in well farward Economist predicts that rates remain around 6.2 by the end of the year and could fall to

5.5 by 2025 still above pre-pandemic levels number two lower rates could drive higher home prices which we know

that lower mortgage rates might attract more buyers increase competition and a limited housing Supply the first time

buyers are especially impacted and many regret not buying earlier that's what they're saying that's sounds like a

realtor though you have keep in mind number three droing rates may spur more housing Supply makes sense and number

four affordability remains a major challenge even with the lower mortgage rates affordability issue persist as

home prices have surged by 50% since 2020 far outpacing income growth which is what the federal guy was talking

about so what is different Tom about this rate drop that we have half a basis point versus what we've had in the

previous time we looked at well the last three that we've had so 2019 it was Co we had dramatic economic impact go down

to 20072 2008 the housing market crashed dramatic economic impact we have not had a dramatic economic impact have we had

an oil shortage no an oil embargo and oil goes to 140 no now we had the recession of 2001 remember that was

talking uh 644 days so that was almost 2 years 2000 to 200 and2 was the recession that was in there hasn't been a dramatic

economic impact this time like Co caused havoc and 2008 the housing market caused havoc and what's interesting is they are

saying that there's another half Point coming this year a quarter point in the first week of November and another

quarter point I think they meet against on December 18th I believe so November 2nd December 18th the FED meets again

takes a quarter quarter so it's a point down when the FED also signaled that it actually made this worse because that

tells oh not only you taking a half you're telling us quarter quarter so you're going bang bang bang the market

is reacting oh so the FED is believing the recession story everybody's looking for the economic impact where is it are

we going to admit that we're having a recession right now check this out when they say refi are up 35% you have to

remember the number of houses available to refi look how low it is compared to the 20 million houses available to repi

in 2021 why because there's been no transactions so when they say they won't

say numbers the real estate St industry won't say numbers Pat they're only saying refi are up 35% 35% over last

year is still up over nothing from April of 2022 to August of 2024 that's 28 months how many Realtors and loan

officers didn't make it only 8mon period so many I would imagine you have to have dramatic shift in the part-time because

Realtors are 1099s they get a license and then they just disappear you know what I mean there's not a layoff so

that's the interesting thing that whenever you're looking to see layoffs if Wells Fargo lays off mortgage

administrators like a mortgage officer loan officer you can see the layoffs Pat you can't really see what happens

because they're 1099s and they just kind of go to a side hustle or disappear because you don't lay off Realtors they

just stop producing 47% of Realtors didn't do a single deal last year 47% didn't sell one house last year I

believe that not because it comes down to the Paro principle the 820 Ru the median number of sales was two how do

you live on two sales a year insane you don't you do it part time or you're pretending to be a realtor when you're

not really want I've seen all this in Miami it's you got the fakers and you got the doers the rates are now down to

six but take a look the last time it was six in 22 to get activity we really got to get back down into the fives cuz

we've been above six the guy from Wells Fargo is right but he's not right cuz take a look at what's happened already

he was saying 6.2 Pat take a look at this nothing right but the 20e is 5.9 and a 30-year fixed VA and a 30-year fix

62 and this is 760 so we're not doing anything crazy here you know what I mean I'm looking at this report since the new

commission structure is changing with real estate agents and loan officers it suggest that the agent count in the US

could theoretically decline approximately 3 to 600,000 people okay which is roughly 60 to 80% of current n

membership of 1.6 million could leave the industry and by the way this is one of the ways I saw it with real estate

and Loans if you can stick around the Market's not going to stop selling you know million homes $5 million home $10

million home $20 million homes half a million it's not going away but a chunk of them that 28% of people the 28 months

of not making money and selling homes and refi that filtered out a lot of people I don't know if there's a

profession out there where you need to look the part and fake it till you make it more than being a realtor you have to

drive a nice car you're driving clients around how are you as a new realtor going to compete with the big dog out

there that's listing $20 million properties while you're trying to do a rental for a $2,500 property you got to

drive a nice car you got to have a nice watch it's literally smoking mirrors in this business but the people that deal

with the UPS the Downs the left and rights the people that I've been seeing realtor since 05 06 in that world for

the last 20 years the same people the guys and the girls that stick it out that basically save their money reinvest

in the business and are not just using all their proceeds to look cool they stick it out you don't have money you

can't buy that because it's a cash deal yep everything right now to all the people that made fun of people that are

saving money if you don't like I said to this guy I said the first four Tom remembers what I was making you know

what I Wasing pay myself the first 2 three years of starting insurance company I didn't pay myself anything Jen

and I lived in an apartment at The Summit in Woodland Hills literally regular apartment at the summon in

Woodland Hills right truth yeah and then by the third year I'm paying myself $80 $100,000 a year that's nothing I can't

my expenses I'm barely making it right and then we start going and going and going I start paying myself a little bit

I've never been the highest paid guy in the company but we always had cash so we need to invest into bamboo we had cash

we need to go raise money we didn't give down much Equity because we had cash every time we had cash to reinvest the

mistake in every business but it's so common in the real estate side is they don't value cash it's all go go go go go

not realizing every 5 to 10 years happens to the real estate industry for 2 years so if you do it right you can

really end up building something like Keller Williams did but it's only if you're thinking long term treat the

company's money like it's your own oh okay cool like just cuz this guy's got hundreds of millions I I shut the lights

off in the bathroom you better buddy or else you'll be sweeping the bathroom Flo there's a reason for that but there's

also things like you know cash is King save that money you never know what's around the corner When the tide goes out

we're going to see who's actually being smart with their money so it starts from the top whether it's an organization

whether it's the head of the household if you sort of set the tone this is how we handle money here guys we're not

going to be just be lavishly spending when we can be saving cuz when the time is right we're going to have this

opportunity to buy something very unique for the company that pet will announce soon but at the end of the day you have

the pretenders and you have the Professionals in everything you have the people that want to look rich and you

actually have for the people that actually want to be wealthy or are wealthy and there's a significant

difference the bottom line is this for me you have sprinters and you have marathon runners

the people who are playing the long game and are the marathon runners Like Pat they know what is you said time and

proof test of time 5 10 20 50 years you're going to figure out who actually was good with their money or good with

their morals and their values the sprinters they're going to look good for a year for two for three but at the end

of the day when the market shuts down or they basically run out of money or the economy tanks Boom the marathon runners

are actually going to show who actually save that money Tom this rate cut had something to do with unemployment the

FED uses rate Cuts if inflation is high what you do is you raise the value of the US dollar by raising interest rates

when unemployment starts getting too high you lower rates so that businesses can get loans for sensible purchases

building a new Factory building a building adding equipment you see what I mean sensible and they're supposed to

delicately turn the dial kind of like have you ever been in a hotel where if you turn that shower just one in it's

way too hot and you turn it another half in that is think of that's the way that a

sensible fed is controlling interest rates on our economy just think of it that way the FED Jerome pal he's got one

main job control the economy he has two basically things that he does to control the economy number one he has to deal

with employment and unemployment he has to manage that yeah and the other thing is managing inflation the point I was

going to make back is he just came out yesterday I think right Robbie and he blamed the migrant crisis for this

growing unemployment he said if you're having millions of people come into the labor force then you're creating 100,000

jobs you're going to see unemployment go up he was saying so it really depends on what the trend underlining the

volatility of people coming into the country so this whole every time I hear kamla and then brag about Pat how

amazing the economy is doing they're full of crap because it's been steadily going up since spring of last year and

after starting the year at 3.7 it stood at 4.2 in August the US has slowed down in adding jobs in recent months with a

disappointing 142,000 in August that fell short by 20,000 jobs so every time I hear

is saying Pat she keeps coming up and she keeps going you just made the best point should I be stressed out someone

just shared this video with me and I'm sitting here saying the hell is this all about am I supposed to now lock it up

and just not spend any money not do anything here's all I'm saying to you is I subscribe to the concept of only the

paranoid survival I'll give you a story and wrap it up last night Sunday night I'm playing Monopoly with my two sons

and my daughter one of my sons decides to play very conservative and he's keeping and hanging out to all the cash

he's not buying any property like no no no so he's got the most cash one of my sons every time he gets cash he's

building a house I'm going to build three houses on Indiana Kentucky and this I'm going to build three houses on

Vermont this and this and this and we're like dude this guy's down to $200 and then we land on it oh you owe me 320

okay hope you owe me 320 it's my turn I'm going to buy two more houses and I want to build on this one okay boom well

you owe me$ 550 I thought it was 320 I build two more houses I'm going to go build now three hotels okay how much is

it oh you owe me 900 damn and guess what you don't have any money I'll take that Parkplace from you but that's not fair

or you can do it so all of a sudden he's got Parkplace Boardwalk he's got all everything going on right now I want to

be Parkplace and guess who lands on Boardwalk Daddy I land on Boardwalk you know how much Boardwalk is $2,000 that I

don't have so I got to give him four railroads and luckily I was able to negotiate a good deal I give him

electricity I give him all this stuff and I got to give him a couple you know properties that I have and next thing

you know you know who ends up winning the guy that took a little bit more risks than my other son did and he wins

the game of Monopoly what does this mean does it mean go spend all your money right now no all it means is if your

tolerance for risk isn't High don't take it but don't expect to make a lot of money if you're going to be super

conservative but if you have some tolerance for risk this may be a good time for you to be shopping certain

things because the next 3 6 12 month people may be very scared and FYI don't let the arrogance of people saying

everything's going to be okay the Market's not going to crash it's going to be a recession soft Landing whenever

anybody says that including myself just kind of say I don't think anybody knows what they're talking about I'm just

willing to listen to everybody all I know is only the paranoid survive