In this episode, Bruce Norris continues his conversation with Gil Figueroa, diving deep into the forces shaping interest rates and the broader economy. They explore how market psychology, global events, and government policy intersect to influence financial markets. Gil shares his perspective on using technical analysis, including Elliott Wave theory, to forecast trends across asset classes like treasuries, stocks, and Bitcoin. The discussion also touches on major macroeconomic challenges such as stagflation, rising national debt, and the limits of Federal Reserve policy. Additionally, they examine the disruptive impact of artificial intelligence on employment and how these shifts could reshape real estate demand, particularly in office spaces and emerging sectors like data centers.

Gil Figueroa is the President of First Commercial Capital, where he specializes in the origination, underwriting, and closing of multifamily and commercial real estate loans. With over three decades of experience as a licensed Real Estate Broker since 1993, Gil brings deep industry expertise and a comprehensive understanding of the apartment lending, commercial real estate, and mortgage sectors. He is also a seasoned financial analyst and wealth strategist, working with high-net-worth individuals to develop practical investment strategies aligned with long-term financial and retirement goals.

RADIO SHOW EPISODE

In this episode:

• Continuation of Bruce Norris’ conversation with Gil Figueroa on market trends and forecasting.

• Gil explains what determines interest rates, emphasizing supply, demand, fear, and greed.

• Discussion on using Elliott Wave analysis and proprietary formulas to predict markets.

• Bruce and Gil reflect on past market cycles, including the 2006–2008 housing downturn.

• Insights into stagflation, inflation, and the Federal Reserve’s limitations due to national debt.

• How global factors like war, oil prices, and currency dominance impact interest rates.

• The potential shift away from U.S. dollar dominance and implications for the economy.

• Discussion on Bitcoin trends and its divergence from traditional markets.

• The growing impact of AI on unemployment and economic stability.

• How rising unemployment could influence future interest rates and housing affordability.

• Concerns about declining demand if automation reduces the workforce.

• Real estate outlook: challenges in office space and opportunities in data centers.

  Episode

Narrator

Welcome to the Norris group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever changing real estate market, continuing the legacy that Bruce Norris created, sharing valuable knowledge and empowering you on your real estate journey, whether you're a seasoned pro or a newcomer, this is your go to source for insider tips, market trends and success strategies.

Joey Romero

Welcome back for part two of our interview with Gil Figueroa, president of first commercial capital. Let's get to it.

Bruce Norris

And in your experience and opinion, what? What determines the direction of rates, of interest rates?

Gil Figueroa

Here we go back to the chart. So,

Bruce Norris

so,

Gil Figueroa

in my opinion, now there's obviously, you know 20 different opinions and 20 different sciences that can go into this. But in my opinion, it's supply and demand, fear, greed and so forth. And the chart and its analysis, so to speak, of the wave count is is something that I've used to predict. It. In the last, I'm going to say, seven years I've developed a mathematical formula that is collaborating with the Elliott Wave, and that formula has been super accurate to the point where I'm trying to work on an algorithm now. So I'm trying to, I might, this might be a pitch deck right now. I'm working on an algorithm and looking for investors. So it's been very accurate. And it's not only accurate on the 10 year treasury, it's been accurate on the s, p, it's been accurate at Bitcoin. It's been accurate on different product line and between me and friends and maybe Twitter, I have put it out there as a forecast, and I have, I could say 2030, different forecasts that I've done different products that have come to nutrition, so I'm working on that now, and I'm excited, because, thanks to Chris and people like you, it really got me motivated to really get more in depth And and spend the 10,000 hours that I have looking at these charts, and my wife thinking I'm absolutely nuts looking at charts at three in the morning. So

Bruce Norris

isn't it? Isn't it cool when you have an aha moment where you've discovered something that you didn't know was true? I absolutely love that. Absolutely

Gil Figueroa

a matter of fact, I'm going to mention something you said to me, or you said in your, one of your meetings, you said that when the market hits a bottom, it usually rises three and a half percent, right? Didn't you say something like that? Three and a half times?

Bruce Norris

Oh, three and a half times. Well,

Gil Figueroa

three and a half times.

Bruce Norris

It certainly it did between that's scary. I think that's maybe close, because you do give up, if you really give up a lot of your price, you're down by 50% so yeah, that would make sense that you could have that going on. Yeah, that's to get to get that in to get away from the damage probably is the most important thing. I mean, if you, if you didn't get out in 2006 you know, we were flipping houses and we were, we had to say, okay, the price is going down 18% every six months. So we had to build that into our formula of buying so, man, if you didn't get out, you were, you were hurting for sure,

Gil Figueroa

yep, in 2007 we're doing a condo conversion in Glendale for 20 units.

Bruce Norris

No,

Gil Figueroa

and all I did was and I knew was coming, and what I did was just paper it. I just got it approved by the city engineering approved, got my cnrs and flipped it,

Bruce Norris

yeah, yeah, there would have been a happy taker, because that still was a viable thing.

Gil Figueroa

There was a happy taker and there was a happy giver too.

Bruce Norris

That's funny. Okay, so, all right, let's, let's go forward and say, Okay, we've got it. What's a 10 year table at today?

Gil Figueroa

I believe we're about 4.32 somewhere.

Bruce Norris

Okay, so what is the what are the charts that you look at as say, directionally, let's go to if we're headed to a recession, is that obviously going to bring the tenure down, or does that not always happen.

Gil Figueroa

No. I mean, right now, no one's saying it, but the truth is, when you have low GDP and high inflation, you have stagflation,

Bruce Norris

right?

Gil Figueroa

That's, that's really where we're at and and frankly, I don't see us getting out. Stagflation for quite a while because of our debt. So the feds are are stuck in a place where they can't raise rates to get out of inflation, because every 1% adds, what, $390 billion to the deficit.

Bruce Norris

Okay?

Gil Figueroa

So they can't raise us out like Volker did back in the age 79 so, right? You remember, right, the oldies here. So Volcker got us out, but he got us out when our jet the GDP was 26% right? Compared to 122% today,

Bruce Norris

right?

Gil Figueroa

So, and then, you know, 79 we had the baby boomer era, which was on fire. We had our petrol dollar. America was the greatest thing since sliced bread. We had, you know, the petrol dollars. In 74 we had the credit of the petrol dollar and and 100% of the world was using our dollar, that's a dominance in 23 we lost a fifth of that through the bricks, and now we still have the debt. So you can't lower rates, you can't raise them. It's, it's, it's an interesting dilemma. It's beyond my pay scale, and I couldn't really tell you, you know, where this ends up, but it's just interesting talk that you hear things you know, from the WHO about the reset, the great reset and so forth. It almost sounds like if the Monopoly game can't be played, somebody's going to have a temper tandem and just flip the board

Bruce Norris

Okay, and

Gil Figueroa

start again. I hope I'm wrong, but I'm just talking out loud,

Bruce Norris

yeah, no, I've had to think about all this, you know. Well, kind of have a war going on right now too. So that's an additional factor of uncertainty that you sort of go on. And last thing we needed, maybe right now is have that the Yeah, I was going to the other thing we talked about it on the panel, there seem to be various opinions of the impact of AI on unemployment. So let's go there for a minute. What do you think the impact is going to be on unemployment of AI? And then if you, in fact, start matching really high unemployment, like we did during covid. Will the interest rates follow? What happened then?

Gil Figueroa

Wow, that's a great question. I mean, I agree with your take on on AI affecting jobs. I think you're a little conservative. I think the damage is going to be much greater.

Bruce Norris

Well, the only reason I went to 15 is we had 15 when we had a two and a half percent mortgage rate. So I don't disagree with you. I just didn't state that because I think if that's if that event got us to two and a half, if you have 25% unemployment, then I'm not sure what the interest rate will be. But you, you kind of have a better feel and how that might not even be possible to do. You know, in other words, you feel like there's a there's a buyer that has to show up for the paper.

Gil Figueroa

Well, it's an option. The Treasuries are an option, supply and demand. Again, I'm going to go back to pay scale. I think it's beyond my pay scale for this conversation. But all we'll have, we'll have some fun. Our debt isn't gonna allow this, unless, unless, here's the caveat, that America regains its dominance of the dollar.

Bruce Norris

Okay,

Gil Figueroa

okay, with the dominance of the dollar, printing can happen. Okay? Because who's to say when the Fed is enough? Is enough? I don't, we don't know. I mean, it is, what is it? 40 trillion. Now, how do we know that 80 trillion isn't the max? I don't know. You know, I don't think anybody has that, but I'll tell you what gage we do have. We do have a gage on the dominance of the dollar. So we lost, just in a couple of years. We lost, you know, 1/5 of it right now during, you know, the What's that straight of?

Bruce Norris

Yeah,

Gil Figueroa

we they're trading in one they're not using dollars to go through there. And by the way, only 10 boats have gone through there in the last four weeks. Usually by this time, it's 130

Bruce Norris

Wow.

Gil Figueroa

So production is low. Our oil production is low. If, if we can up another hiccup, this can blow oil to another level. So, and and my charts are saying that right now, we do have potential to get oil back in the 60s and 70s. There is a a an alien wave format to get there. Unless, here's the caveat, unless we break the high that happened. You know, at 160 18 a barrel, if we break that high, well, and I don't mean crude, I mean futures.

Bruce Norris

Okay,

Gil Figueroa

it's a little different chart that I use. If we break that, we're headed for a new high, which is not going to be good for rates. There's no way it's good for rates. And right now, I had mentioned in our meeting, our recent meeting, that in 22 I believe? Yeah, actually, it was in 23 and April, 23 at one of the seminars, Chris' seminars, I said rates were going to go to five on the treasuries, which was, you know, almost a 7% seven quarter percent rate for the market. And it did that, that that that final wave is called a five wave. Then I said the next wave is going to be that was a five wave of three. So the next wave was going to be a formidable fourth wave. And the fourth wave has a sideways action, and it is the most difficult wave to analyze, because it's very erratic. It can take six different formats. So it's very erratic. My algo has somewhat solved it to an extent, but it does have a pivot right now. Our pivot is between four, six and three nine. So if we stay in this 4639, range, the fourth wave can be extended sideways until, you know, I don't know when, but the next wave is a final fifth wave going straight up and beyond the 5% treasury. So you ask me, what I look at. I look at my charts more than anything else. And then when there's collaboration of potentially a more inflationary situation, like oil and war, then it collaborates my charts. So it does collaborate my charts. Now, beyond that point, typically, after a fifth wave, the market will react and go in an ABC structure and drop 50% so that usually can happen with what we call, you know, a scarcity of demand. So if oil gets too high and everything stops, just like covid,

Bruce Norris

right,

Gil Figueroa

then we have a deflationary market.

Bruce Norris

Okay?

Gil Figueroa

We'll start a deflationary market. So my charts are kind of relating to what you have put out there, to a certain extent. It's just timing. So I think, you know, timing could be that we go up before we go down.

Bruce Norris

Yeah, I think, I think that's probably true. You know, I think, I think the AI is a progression. It might go faster. It seems like a lot of people are saying that's going to take some years, and all of a sudden it's down, you know, the way they're talking, it's like a year away or so. So that could be where it really takes an awful lot of jobs. And the reason I think it's it's going to happen at a fast clip is because your competitor is going to react in a positive way to save money, right? If you're an employer, that you have a lot of people that you could let go and have it be automated. And you do that, you become more profitable than your competitor. Well, they're going to try and keep up. That's how I feel. It's going to occur. And I feel the

Gil Figueroa

same.

Bruce Norris

I feel the same way about nations trying to get it solved to where they're the number one power. So I think safety sort of put on the sidelines to accomplish power and control and then figure out the safety later, and that might not be a good idea.

Gil Figueroa

Yeah. I mean, if everyone's after reducing employees and payroll, then who's going to buy your product? Ultimately, you're reducing your you're reducing your buyer pool, right? So,

Bruce Norris

absolutely.

Gil Figueroa

So the question is, how will the buyer buy your so called, more profitable product? So it becomes a conundrums in essence,

Bruce Norris

yeah, I think, well, you know, I think the companies may become more profitable, and they have money less employees, so they're doing it in an automated way. So I think, I think the company could be more profitable, but you might have pretty massive unemployment. So unemployment, if it goes up beyond 15% is the interest rate going to react to that and make and make debt be cheaper to hold on to or to obtain a house? Or is there a more dominant play that it's like, I wish we could do that, but we can't.

Gil Figueroa

Well again, we go back to debt, dominance and perception. So if the US dollar is still the king, then potentially, does the Fed have a cap? I would say I've never heard of one, right? I don't think you have so on paper. I would say that if we become, you know, the dominant player, continue to be, so to speak, and and it has that dominance, then yes, they can keep printing, you know, to win. I don't know, I don't know what the what the limit is, per se, but on paper, I'd say the answer is yes, it could happen. The other note, I think other countries are, are, are competing to be more of, you know, currency dominance, so there's competition, yes, competition, yeah.

Bruce Norris

Okay, let's think. I don't have any questions on this, but it's, it's kind of struck a chord when you think about trust. Okay, so us is the most trusted country in the world. I would think, I don't think China can take that over. I don't think that would be a true statement. So if you think that the China currency will be the next world currency. I just don't see how that's that's likely at all. And

Gil Figueroa

I agree with you,

Bruce Norris

and I know that their population is is headed way down, because their birth rate is under one. And so that's not not good for them. Japan's not good. They have way less people and a way less people coming up. So I'm not sure who the who the dominant is, but see now we get into something that's past my pay grade, which is why I kind of like to talk to you, because you probably have some feeling about this. Is there going to be some kind of stable coin, or Bitcoin world where that's the new dollar,

Gil Figueroa

the talk, the talk on the street is, is as such. And you know, the current administration is backing Bitcoin, you know, supporting crypto in every way. Unlike you know, it's never happened that's that's new, that's definitely new currently. Let's talk about Bitcoin a little bit. So Bitcoin hit a low of 60,000 just a few weeks, maybe a week before we got into this war.

Bruce Norris

Yeah,

Gil Figueroa

and I was at a dinner party with some friends who are investors, and they said, Oh, we're going to sell short Bitcoin now that we're in war. And I said, Be careful. We just hit a 50% retracement, and it's a perfect ABC structure I'm buying while you sell. So I'm just letting you know. And they know, I've been quoting them and busting their chops now for a few years. And they said, Oh, no, how can you say such a thing? It's going to follow the S P the S P's gotta drop. Well, they were right there. The S, P dropped, you know, nine, 10% almost, and Bitcoin went up to 75 now they're corrected in an ABC structure back down to 66 but yet held that 60 at 60, still holding

Bruce Norris

right.

Gil Figueroa

And I think we're going to see a pop soon, over 75 and maybe to brand new highs. So my point is, Bitcoin is showing a a breakout in not collaborating with the market.

Bruce Norris

Okay,

Gil Figueroa

it always has. So that's a pretty big statement. So, and I watched this very clearly, because I wanted to see where the market flow would be here with this inflationary fear. And to answer your question about rates, the rates can go down when the market realizes. Number one, we're still dominant. And number two, there's more fear of global political war and issues that it may cause, then inflation. So when that fear of a big war comes around and Treasury is still dominant, money should go into treasuries instead of away from Treasury, because of fear of inflation, right? So which fear is greater will win right now the fear of inflation is greater, but if this continues and evolves, that fear can change.

Bruce Norris

Can the Fed be the buyer?

Gil Figueroa

The Fed can do anything it wants, as long as it can sustain the, you know, the the deficit, I don't know, you know, the these are that's why everybody calls for an audit of the Fed. The question is, who's going to buy it outside of the Fed? If everyone else is selling, can the Fed buy enough to cover that sale and lower rates? That's another question way beyond my scope.

Bruce Norris

Okay, wouldn't

Gil Figueroa

answer that? Yeah. There's so many unknowns with the Fed, but I think the driving factor is, what is the market fear today inflation, but could it fear a greater war? More fear in a war than inflation? That can happen?

Bruce Norris

Okay,

Gil Figueroa

dominance will take over, and rates will come down.

Bruce Norris

So what is the name of the charts that you pay attention to?

Gil Figueroa

The chart is. Called T and X. It's, if you know, 10 year treasury, it's 10 year treasury futures market,

Bruce Norris

all right? It sounds simple, but you haven't expanded its meaning.

Gil Figueroa

Well, it's just a futures market of the 10 year treasury. So we have futures traders that trade the Treasury every day of auction,

Bruce Norris

right?

Gil Figueroa

And some auctions are 30 days, 15 days, so they have different auction call dates and and there's a bidding system, you know. And sometimes, you know, in the past, there's been no bidders, there's been only the Fed writing checks. So it's been an interesting time. I've never seen that before, either, but that's something that is happening. You know, before covid, that was definitely a problem, that there was no bidders at these markets. So things were getting a little scary

Bruce Norris

when you say there was no bidder, so the Fed bought,

Gil Figueroa

yes,

Bruce Norris

okay, well, that that kind of clears that up for me. I think that's possible. My good friend of mine and I sat down and discussed Bitcoin. Well, you know what? I didn't I didn't buy it because I've had an experience with penny stocks. I'll tell you a quick story. My dad was buying penny stocks at the end of 1999 I knew he didn't know anything about him, and I knew he couldn't lose money. And so I started paying attention to him, just protect him, and everything he touched went up 25% a month. I'm like, What the heck? And so right after Christmas or New Year's in 2000 I wrote a quarter million dollar check and put it into penny stocks. I even got a penny stock website and paid attention to a guy that was making very accurate calls. So turned 250 grand into 840 grand in 40 days. Being the educator, I started actually writing a penny stock course. I didn't finish it because my 800 grand or so went to 100 in about three weeks, and I sold it at 100 lost under 50 grand. And when I when, when I started looking at Bitcoin, one of the problems was, I can't hold one. You know, there's something about that. Can I hold one? No, it sort of reminded me of the penny stock experience, where I'd like to hold one, but I can't. Doesn't mean I'm right. I'm just saying, but you know, it's something you learn about yourself. You know, when I did the penny stocks, you know how many hours a day, I paid attention to the value of it. Every second the market was open, I was watching the green and how my money was moving. It was an addiction. And then we had a holiday one Monday that I didn't know was coming, and I waited for my fix, and my charts didn't change color. And then I found that was a holiday, and I actually got depressed, and I realized, man, you can't do this anymore.

Gil Figueroa

Wow, I've met few people that have had my Colombo. I've dealt with that many times.

Bruce Norris

Okay, yeah, so that's why I have boring rentals. I don't drive by and say, what's it worth today? It's like, I don't care if AI is going to really impact employment. Will it necessarily impact occupancy of buildings? Are you concerned about a lot of commercial buildings having a lot less occupancy, and maybe those going back to the bank.

Gil Figueroa

Well, I mean, we both know that office space has suffered since covid tremendously, and they have not recovered. Okay, not recovered. There's still a lot of default office space. Some office space has dropped 50, 60% of value. So I guess the question would be, would that enhance it, absolutely, right? So no question, office can't do well in AI. So outside of data centers being the premium real estate play in the future, that's a co opposite of office space, right, right? So if one computer server could do the work of 1000 people or more, yeah, I would say data centers are going to be the prominent, you know, real estate play in the future, as long as there's energy and water to support them. With that being said, I can't see office space doing better. Manufacturing could be different. You know, if we move more manufacturing on our soil. The question then will be, would it be robots or people working in this I don't know. So

Bruce Norris

that's

Gil Figueroa

a good source, yeah, so maybe manufacturing real estate still holds because of robotics, but that's not here yet. But.

Bruce Norris

It's on the books. Bruce, yeah, on the books. It's close coming forward, yeah. All right, well, Gil, thank you for taking time with us today. I really appreciate it. Enjoyed it. Thank you, Bruce. All right, always be my mentor, my friend. Thank you

Narrator

for more information on hard money loans, trust deed investing and upcoming events with the Norris group. Check out the Norris group.com for more information on passive investing through the DBL capital Real Estate Investment Fund, please visit DBL capital.com

Joey Romero

the Norris group originates in services loans in California and Florida under the California Dre license, 01219911, Florida mortgage lender, license 1577, and NMLS license 1623669, for more information on hard money lending, go to the Norris group com and click.