Gary Friedman, CEO of RH, formerly known as restoration hardware, went a bit off script when asked about the current macroeconomic environment. He made comparisons between today’s economy and the Great Recession, warned about the threat of rising inflation, and even referenced a scene involving the now-defunct investment bank Bear Stearns in the subprime mortgage crisis movie The Big Short.

RH has seen a significant deceleration in demand from customers since the invasion of Ukraine began in late February, sparking concerns the retailer could be a canary in coal mine for U.S. economic demand as recession fears continue to spread.

While some have questioned whether Freidman might be playing off market fears to avoid responsibility for internal business issues, the call was undeniably a stark departure from the typical by-the-book corporate earnings announcement.

Friedman’s brutally honest responses to analyst questions and apocalyptic tone have investors fearing the worst. RH’s stock was down over 12% by mid-day on Wednesday.

From his criticism of Fed officials to his comments about supply chain chaos, Friedman’s Tuesday earnings call is definitely worth a listen. 

Here are five of the best quotes from the ominous announcement:

A Bear Stearns moment?

One of the standout moments from Tuesday’s earnings call was Friedman’s reference to The Big Short, a film that dramatized the collapse of the subprime mortgage market that helped precipitate the Great Recession in 2008. 

Friedman compared current supply chain chaos and softening demand after Russia’s invasion of Ukraine to a scene in the movie where everyone is learning about Bear Stearns’ collapse.

“I don’t want to scare everybody. But I talk about, like there’s the scene in The Big Short, where everybody is in that ballroom and the guy thinks it’s the guy from Bear Stearns or someone is up there…and he’s saying how they are going to buy back $1 billion of their stock…and then one guy on his BlackBerry, goes, can I ask the question, sir? In the 20 minutes that you’ve been talking, your stock is down like 55%. And everybody ran out of the room. I just think—we tend to just try to be transparent and honest. And look, maybe our stock is going to take a big hit because of this and people are going to think Gary Friedman wasn’t excited. I’ve never…I’ve never been in my 22 years here, I’ve never been more excited. I’ve also never been more uncertain.”

The most difficult time since the Great Recession

Friedman told investors rising uncertainty due to geopolitical tensions, persistent inflation, and rising interest rates have made issuing future guidance on RH’s earnings the most difficult proposition since the Great Recession era. 

“I mean it’s probably one of the most difficult guides since 2008 and ’09, because we—we’re right in the middle of this disruption from Ukraine and Russia,” he said.

The CEO also questioned whether the housing market’s current state was sustainable, a theme echoed by top housing market analytics and intelligence firms.

“You’ve got housing prices at all-time highs. I mean, is it sustainable? I don’t know for how long the math doesn’t make sense on kind of what’s happening in the housing sector and other places.”

A canary in the coal mine for U.S. economic demand?

With RH being one of the last companies to report in this earnings season, management was able to paint a picture of what demand could look like after Russia’s invasion of Ukraine that other firms simply couldn’t. 

While supply side challenges have been a consistent theme of this earnings season, demand has largely remained strong, Friedman’s comments may indicate that’s changing.

“We have experienced softening demand in the first quarter that coincided with Russia’s invasion of Ukraine in late February and the market volatility that followed. We believe it is prudent to remain conservative until demand trends return to normal,” the CEO said.

Runaway inflation

Inflation was another key theme of RH’s Tuesday earnings call.

Time and again, Friedman criticized Fed officials for their miscalculations on rising consumer prices over the past year. Below, the CEO rebukes Treasury Secretary Janet Yellen for her comments about inflation moving back to 2% this year, and follows other Wall Street leaders in warning of potential runaway inflation ahead. 

“You’ve got inflation like I’ve never seen. Now I was telling people, when Yellen said, we’re going back to 2%, we were just signing our new freight contracts, ocean freight contracts. I just, I wonder if anybody at the Fed has picked up the phone and called a business person and said, hi, what do you think is happening with inflation? How are ocean rates? How is this? How is that? I mean I think — I don’t think anybody really understands what’s coming from an inflation point of view, because either businesses are going to make a lot less money or they’re going to raise their prices…I think it’s going to outrun the consumer.”

The shipping rate dilemma

While the Fed is predicting the rate of inflation will fall back to 2.7% by 2023, Friedman isn’t so sure. The CEO notes that companies all over the world have signed shipping contracts at record high rates, and those can’t just be renegotiated overnight. Inflation isn’t going away anytime soon, in Friedman’s view.

“If the war in Ukraine ends and inflation slows down some miraculous way, I don’t know, everybody can sign new freight contracts? Because, I mean, most of the world all signed new freight contracts. Two years ago, the price of a container for us, went from $2,400 to $4,800. Yes, yes, it’s doubled. I’m not going to tell you what it just went to. But just let’s say that looked like a nice increase. So—and it’s not just us, it’s everybody.”