Ask A Genius 1564: Cheap Homes, Credit Arbitrage & AI Media

Author(s): Scott Douglas Jacobsen and Rick Rosner

Publication (Outlet/Website): Ask A Genius

Publication Date (yyyy/mm/dd): 2025/11/07

How do cheap U.S. homes, credit card arbitrage, and AI media convergence reshape consumer choices?

Rick Rosner and Scott Douglas Jacobsen discuss bargain housing from the Oklahoma Panhandle to Raton and St. Louis, contrasting sub-$100k fixers with Los Angeles’s high per-square-foot prices. Rosner explains credit card arbitrage —rolling 0% balance transfers, modest fees, and HELOC backups —while warning about post-teaser rates near 19%. They shift to media’s future as TV, games, VR, and AR converge, with AI generating personalized, believable content—think Is It Cake? Realism on demand. Rosner notes rising debt, stagnant wages, and how apps raise dating standards and shrink connections. Jacobsen frames a culture of immersive “second lives” monetized through subscriptions within favourite franchises.

Keywords: AI media, Credit arbitrage, Housing bargains, Media convergence, VR immersion

Rick Rosner: I like looking for houses where prices are cheap, such as in the Oklahoma Panhandle. Is that actually a place? The Panhandle is a place. 

Oklahoma is roughly—not exactly—rectangular. It has a jagged southern edge along Texas, and then a narrow western projection called the Panhandle. That strip is about 34 miles north to south and roughly 166 miles east to west. It borders Texas to the south, Kansas to the north, New Mexico to the far west, and even a short stretch with Colorado at the northwest corner. It’s called the Panhandle because it looks like you could pick up the state by that narrow extension.

If you look for houses in small towns around there—not just the Panhandle itself, but also southeastern Colorado, northern Texas, and northeastern New Mexico—you’ll find some serious bargains. For example, I was looking at Raton, New Mexico, right at the northern border of the state. We had friends there for years when I was growing up. It’s a sweet little town, and the population these days is around six thousand, not ten. You can buy a lovely little house in a beautiful little village for about two hundred thousand dollars. You can buy a rundown house in some of those towns for under a hundred thousand. I just saw a really dilapidated house in St. Louis—about 1,150 square feet, completely torn up. 

The roof and ceiling had collapsed, the floorboards were buckled, and the plumbing had been ripped out. It was listed for $22,000, which works out to about $19 per square foot. In Los Angeles, the price per square foot is often several hundred dollars, frequently in the $700–$1,000 range in many neighbourhoods. You can sometimes find a reasonably intact, move-in-ready house in St. Louis for well under a hundred thousand dollars. Compared to Los Angeles, where even the cheapest houses are typically several hundred thousand dollars, it makes you wonder: how much worse could life really be in St. Louis or Raton? Why wouldn’t you move there and get essentially the same kind of house for a fraction of the price—and then do something else with the money from selling your home?

I even saw a wrecked house in Laredo, Texas—a total fixer-upper. Some lunatic had painted all the walls and even the floors bright red. It was creepy, like it might be haunted—priced under ten dollars a square foot. You can find cheap, rundown houses like that in a lot of places, probably near where you live, too. Drive out into the countryside—some small town twenty miles away—and you can often find a lovely little house at a relatively low price. And in many Canadian cities, you’re a short drive from a Tim Hortons. What else do you really need besides Tim Hortons and the internet? 

Rosner: Have we ever talked about credit card arbitrage?

Jacobsen: No, we haven’t.

Rosner: In the United States, you sometimes get offers for balance transfers at a teaser rate. I don’t know how it works in Canada or what your financial setup is like, but we get a steady trickle of these offers. I just took advantage of one recently. Before the 2008 economic crash, you could put your money in the bank and make four or five percent interest. Credit was so easy back then—it was part of what caused the crash. Lenders were throwing money around and selling the debt to others. If you looked at all creditworthy, you’d get offers like, “Sign up for this credit card and we’ll give you a $10,000 limit at 0% interest for 10 to 15 months.” At that time, you could earn around five percent interest on savings.

So I decided to take all these offers, borrow at zero percent, and put the money in the bank to earn interest. I also used it to pay down our mortgage. Some offers had no transfer fee, others had a one-percent fee. It was crazy how loose credit was. At my peak, I had borrowed about $262,000 across 17 credit cards, most of it at 0%, and used it to pay off our mortgage. The remaining cash I put in the bank.

The idea was simple: borrow at 0% for a year, and when the teaser period ended—when the rate jumped to 14%, 18%, or 19%—you’d pay it off before the higher rate kicked in. You could keep the cycle going by accepting new offers and rolling over the balances. We eventually took out a HELOC—a home equity line of credit—with a teaser rate of around 2.5%. That meant if we ever ran out of 0% offers, we could move the balance to the HELOC, which worked like a flexible, low-interest mortgage.

So we’d go from paying 0% on borrowed money sitting in the bank earning interest, to paying 2.5% through the HELOC if needed—still a solid arbitrage. It was a strange time, and that kind of easy credit helped crash the U.S. economy in 2008.

In the past couple of years, interest rates on savings have risen again, to around 5% for a while, now closer to 4%. That means credit card arbitrage is still possible, though not as lucrative. We recently got an offer: transfer a balance from another card at 0% interest for a year with a 3% transfer fee. I took the offer and transferred $5,500 from a card we usually pay off every month. That means we don’t have to repay the $5,500 until next year, and there’s no interest—just a $165 transfer fee.

Meanwhile, that same $5,500 remains in our savings account, earning 4%, or about $220 over the year.

Maybe we make a little bit, perhaps we don’t, because there’s tax on the interest we earn. After taxes, this $5,500 loan for a year might cost us around $20. Once you add the $165 transaction fee and subtract the $220 in earned interest, the net result is small—but we get the psychological benefit of having an extra $5,500 available for a year. That’s credit card arbitrage: you borrow money at 0%. But don’t do it if you can’t pay it back, because if you can’t handle the balloon payment at the end, you’ll be stuck. Most cards require a minimum monthly fee of 1%, so after a year, that $5,500 might be down to about $4,800. If you can’t pay off the $4,800 when the 0% rate expires, don’t take the deal, because then you’ll be hit with a 19% interest rate—roughly $900 a year in interest on that remaining balance. You’ll get crushed.

But if you can manage your money, it’s a fun and easy way to break even or come out slightly ahead—essentially borrowing free money.

That being said, personal debt in America has never been higher. As a nation, people owe more on credit cards than ever before because the economy is precarious and middle-class wages have been stagnant for roughly 50 years. Meanwhile, the ultra-wealthy have taken nearly all the gains in productivity. For instance, Tesla shareholders recently approved a potential $56 billion compensation package for Elon Musk—the largest in corporate history—if the company meets certain performance milestones by 2030. It’s absurd. For comedic effect, I like to say that for him to get the money, Tesla needs to sell a million humanoid helper robots, lease 250,000 “robot girlfriends” with “Vibra-hole technology,” and sell at least one Cybertruck to someone who isn’t a jerk. I don’t know if he can do it.

Anyway, people like Musk have absorbed most of the wealth from productivity increases, while the middle class keeps struggling. Most Americans can’t play credit card arbitrage games—they’re using credit to survive, and many fail to avoid the 19% interest trap.

Jacobsen: What about the future of film? When will film itself become irrelevant?

Rosner: I’ve been thinking about that. My guess is that the boundaries among TV, video games, movies, VR, and AR—augmented reality—will keep dissolving. They’ll all start blending together as technology becomes more immersive and AI lets people generate endless, personalized content. Say you’re a pervert and want every character in what you watch to be naked—AI will be able to do that for you soon enough.

I saw something funny on Twitter: someone posted clips from a show called Is It Cake?—or something like that.

Is It Cake? is different—it’s a show where they’ll display something like a can of 7UP, and contestants have to guess whether it’s real or actually a cake. Then they take a knife to it—if it’s a real can, the knife bounces off; if it’s cake, they slice through it and reveal frosting inside. These bakers can make a frosted cake look precisely like a beverage can, complete with the metallic sheen.

So, on Twitter, I saw a compilation of videos featuring people who had made ultra-realistic cat cakes. In each clip, a live cat is sitting next to its cake version on the counter. The baker takes a big knife and cuts the “cat” in half. Then you see the real cat’s reaction. In one clip, the cat jumps straight up in the air, falls to the floor, skids across it, slams into a wall, and bolts out of the room as if it just witnessed feline murder. In another, when the baker cuts the cake’s head off, the real cat leaps onto her in attack mode.

There were about six of these clips—each showing different cat reactions: fear, anger, confusion—and they were all hilarious because they looked so real. But here’s the kicker: it was all AI-generated. The animations were flawless. The one with the cat leaping two feet in the air, skittering, losing traction, crashing into the wall—it looked genuine. Whatever model generated it clearly learned from tens of thousands of real videos of cats slipping, jumping, and reacting to sudden shocks.

That’s how far AI realism has come—it knows how a cat should look and move in specific situations. And we’re not far from being able to “naked-ize” every actor in a show, or make ridiculous edits—like making everyone in a sitcom suddenly soil themselves—just because you can.

Basically, anything you can imagine, you’ll be able to generate, customized precisely to your taste. We’ve already had early examples. A couple of years ago, there was a site that generated endless Seinfeld episodes—you’d tell it to make a new one, and it would produce a complete thirty-minute script. By now, you could probably generate short Seinfeld video clips that never existed, fully animated, fully voiced, and believable.

Rosner: With AI able to generate endless material set in whatever entertainment universe you love, people will be able to live inside those worlds. I don’t know why anyone would want to live in Seinfeld’s world. Still, many people would like to live among hobbits, inside Star Wars, or in any other fictional universe. With VR and AR, that’ll be possible—and of course, someone will be monetizing it. You’ll probably pay a monthly fee to have a “second life” inside your favourite movies or shows.

Eventually, stories might still start as a TV series, film, or game, but they’ll spread out across mediums. Look at Star Trek—it premiered in 1966, almost 60 years ago, and since then we’ve had more than 10 TV series, about 13 feature films, countless novels, comics, and video games. It’s become a living universe. The same thing will happen to other franchises—James Bond, for instance. You’ll be able to go on simulated missions with Bond or as your own secret agent in that world.

When that happens, the boundaries between different kinds of intellectual property—“IP,” as everyone calls it—will blur completely. Everything will merge into one massive entertainment ecosystem.

I don’t know exactly what the future will look like, except that we’re already living in an entertainment jungle. People are getting lost in it—especially young people. I just read an article saying Gen Z spends about 25% less time with friends than previous generations. Everyone’s increasingly isolated.

People are coupling up less, partly because dating apps make everyone pickier. You can browse endlessly, which raises expectations. A considerable percentage of women, for instance, set filters to exclude men under six feet tall—even though only about 15% of men reach that height. So people get pickier, connect less, and have fewer kids.

As entertainment becomes more immersive and personalized, it’s only going to get worse—people will live more in fantasy than in reality.

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