Latest / The Financial Exchange Show / Consumers Feel Worse Than the Data Says & USVI’s Economic Bet

Transcript

Consumers Feel Worse Than the Data Says & USVI’s Economic Bet · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:03
Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
0:05
Speaker 1: registered investment advisor. All opinions expressed are solely those of
0:08
Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
0:11
Speaker 1: or anyone else. Investments can lose money. This program does
0:14
Speaker 1: not offer any specific financial or investment advice. Please consult
0:17
Speaker 1: your own financial, tax, and estate planning advisors before making
0:20
Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
Speaker 1: this program do not endorse each other or their services.
0:26
Speaker 1: Armstrong and Money Matters Radio do not compensate each other
0:28
Speaker 1: for referrals and are not affiliated. This is the Financial
0:34
Speaker 1: Exchange with Mike Armstrong and Paul Lane, your exclusive look
0:39
Speaker 1: at business and financial news affecting your day, your city,
0:43
Speaker 1: your world. Stay informed and up to date about economic
0:46
Speaker 1: and market trends plus breaking business news every day. The
0:50
Speaker 1: Financial Exchange is a proud partner of the Disabled American
0:53
Speaker 1: Veterans Department of Massachusetts. Help us support our great American
0:58
Speaker 1: heroes by visiting dav five Hey Do Boston and making
1:01
Speaker 1: a donation today. This is the Financial Exchange with Mike Armstrong,
1:06
Speaker 1: and Paul Lane.
1:11
Speaker 2: Good morning, Welcome back to the Financial Exchange. We've got
1:15
Speaker 2: stocks in mixed territory as we open up the show today.
1:18
Speaker 2: The Dow is barely hanging on to some gains, up
1:20
Speaker 2: sixty eight points, the S and P five hundred down
1:23
Speaker 2: twenty nine points or four tenths of a percent, and
1:25
Speaker 2: the Nasdaq down almost a full percentage points in early trading. Interestingly,
1:29
Speaker 2: the Russell two thousand holding onto some gains as well,
1:32
Speaker 2: up about six tenths of a percent. That's been pretty
1:34
Speaker 2: consistent over the last few days. The interesting stuff happening
1:38
Speaker 2: in markets at the moment, though, continues to be in commodities, silver,
1:42
Speaker 2: which specifically sold off some thirty odd percent on Friday
1:46
Speaker 2: of last week, moving up today about fifteen percent in
1:50
Speaker 2: early trading. On all that new news about silver, right, Paul, Oh, no, nothing,
1:57
Speaker 2: A lot of developments on no real inform news. A
2:02
Speaker 2: lot of hypotheses out there as to what might be
2:05
Speaker 2: sparking some of the movements in one direction or another.
2:07
Speaker 2: There was talk about new FED chairperson Kevin Warsh being
2:11
Speaker 2: a bigger inflation hawk, and maybe interest rates stay higher
2:15
Speaker 2: for longer, maybe that stabilizes the US dollar concerns that
2:19
Speaker 2: have been out there. I think while any of those
2:22
Speaker 2: are interesting theories as to what could spark a movement
2:25
Speaker 2: in one direction or another, they're all woefully unsatisfactory in
2:29
Speaker 2: terms of explaining the magnitude of these moves that are
2:32
Speaker 2: swinging in one direction or another. By the way, normally
2:36
Speaker 2: we would be talking about the fact that gold is
2:38
Speaker 2: moving up by six and a half percent in a
2:40
Speaker 2: single day, which is also a massive move, but it
2:43
Speaker 2: just isn't even close to what we are seeing there
2:47
Speaker 2: with silver, which again up eleven bucks an ounce or
2:50
Speaker 2: nearly fifteen percent in early trading. We will continue to
2:54
Speaker 2: hear from many companies in terms of their earnings for
2:56
Speaker 2: the most recent quarter. Next up will be sorry I
3:02
Speaker 2: had my schedule on this other screen. Alphabet is up tomorrow,
3:10
Speaker 2: Amazon on Thursday, I believe both after the bell. Yes, yes,
3:14
Speaker 2: so we'll get both of those. There are plenty others
3:16
Speaker 2: again for those who are interested in stocks. You know Eli,
3:19
Speaker 2: Lilly a massive company reporting as well, and others too.
3:23
Speaker 2: But the real market movers here, Alphabet and Amazon, who
3:27
Speaker 2: can tell you a little something about the data center
3:29
Speaker 2: build out and robust consumer demand, will be front and center.
3:34
Speaker 2: But The next potential economic mover that people have pointed
3:40
Speaker 2: to is tax filing season. Not usually pointed at as
3:44
Speaker 2: a you know, major market or consumer spending season, but
3:50
Speaker 2: this year a lot more focus has been on it,
3:53
Speaker 2: and we ourselves have talked a bit about how this
3:55
Speaker 2: could kind of, I guess, push some spending to the
4:00
Speaker 2: markets when fact tax returns in fact get filed. Bloomberg
4:04
Speaker 2: kind of arguing the opposite point that hey, this is
4:07
Speaker 2: not going to be as much an impact as it's
4:09
Speaker 2: been sold by those like Scott Bessen and Frankly that
4:12
Speaker 2: I'm kind of anticipating what do they lay out in
4:15
Speaker 2: terms of their reasoning, because well, I guess let's set
4:17
Speaker 2: the groundwork first, which is, why are people receiving expected
4:21
Speaker 2: to receive big tax refunds this year?
4:23
Speaker 3: Many of them will experience an increase in terms of
4:26
Speaker 3: deductions that they're eligible for filing. You've got the deduction
4:30
Speaker 3: out there for those who are over the age of
4:32
Speaker 3: sixty five because they were unable to make solid security
4:35
Speaker 3: tax free. They increase the standard deduction for married couples
4:38
Speaker 3: who are over the age of sixty five or just
4:40
Speaker 3: individuals too, so that could add an additional six thousand
4:44
Speaker 3: or twelve thousand dollars deduction to people's standard deduction, which
4:48
Speaker 3: is I believe thirty one thousand, five hundred for twenty
4:52
Speaker 3: twenty fifties.
4:52
Speaker 2: Also up seven hundred and fifty bucks per person for.
4:56
Speaker 3: Those people living in York, Connecticut, and New Jersey massive Chusetts.
5:00
Speaker 3: They were previously capped by the salt cap, which was
5:05
Speaker 3: state in local taxes that was at ten thousand for
5:10
Speaker 3: many years prior. That has been increased to forty thousand.
5:13
Speaker 2: So for most taxpayer there is some cohort. If you
5:16
Speaker 2: make too much, it's still ten thousand. I don't remember
5:18
Speaker 2: where it starts to face that, but for most of
5:20
Speaker 2: us it will be at that new forty thousand dollars level.
5:23
Speaker 2: And you bring up those states in particular because they
5:25
Speaker 2: are higher tax states. They might have an income tax,
5:27
Speaker 2: they might have high property tax rates, et.
5:29
Speaker 3: Cetera exactly, And then I mean, those are probably the
5:32
Speaker 3: biggest two ones to point out as to why there
5:36
Speaker 3: will be more tax refunds, because likely what's occurred is
5:40
Speaker 3: over the course of the year for employees out there,
5:43
Speaker 3: their employers have been withholding their taxes at a rate
5:47
Speaker 3: that was probably presuming the not as high of a
5:50
Speaker 3: standard deduction.
5:51
Speaker 2: In fact, it almost certainly was. The IRS guidelines did
5:55
Speaker 2: not change here, They kept them in place intentionally so
5:57
Speaker 2: that the refunds would be a little bit bigger when
5:59
Speaker 2: you go. So unless you in particular adjusted your withholdings intentionally,
6:05
Speaker 2: then you are likely to receive a bigger refund or
6:10
Speaker 2: oh less in the way of taxes if you fall
6:13
Speaker 2: into any of those categories, which pretty much all of
6:15
Speaker 2: us do. Right, the standard deduction piece is going up
6:17
Speaker 2: for everybody, right, and even if you didn't work overtime
6:20
Speaker 2: in twenty twenty five, if you're over sixty five, you're
6:23
Speaker 2: still getting a boatload of additional deduction. So I see
6:27
Speaker 2: why people would be getting tax refunds. Why does Bloomberg
6:30
Speaker 2: argue that we're just not going to see it move
6:32
Speaker 2: forward into the economy.
6:33
Speaker 3: Basically what Day point out as well, some people will
6:36
Speaker 3: get it. It's really not as significant as you would think.
6:40
Speaker 3: Their estimates are for anywhere from a ninety billion to
6:43
Speaker 3: one hundred billion increase in refunds, which only equates to
6:47
Speaker 3: about zero point three percent of annual GDP. And really
6:51
Speaker 3: who these are are targeted at is sort of more
6:55
Speaker 3: of the people in that middle income sort of tier
6:59
Speaker 3: where the bottomn forty percent won't really see a tremendous
7:04
Speaker 3: amount of refund stimuli not stimulus or refunds you know,
7:08
Speaker 3: paid to them.
7:08
Speaker 2: So basically the argument seems to be that, hey, these
7:11
Speaker 2: these refunds are not going to go to the very
7:14
Speaker 2: high highest income earners, right, but nor are they going
7:17
Speaker 2: to be their deductions by and large. And so if
7:21
Speaker 2: you already don't pay taxes, you happen to be the
7:24
Speaker 2: demographic that is most likely to spend new cash that
7:27
Speaker 2: you receive.
7:27
Speaker 1: Yep.
7:28
Speaker 2: And you're not likely to get a larger tax refund
7:30
Speaker 2: because all that happened is you got a larger deduction.
7:33
Speaker 2: If you don't have enough income to use the deduction,
7:35
Speaker 2: you don't get any extra money. The question will be, yeah,
7:38
Speaker 2: do sixty five plus year olds who are getting much
7:41
Speaker 2: more in the way of tax room? Will those middle
7:45
Speaker 2: income Americans whose households are earning one hundred to two
7:48
Speaker 2: hundred and fifty thousand dollars, which is I think kind
7:51
Speaker 2: of the core demo that will be receiving a lot
7:53
Speaker 2: of tax benefit here, what do they do with the money?
7:56
Speaker 4: Do they spend it?
7:57
Speaker 3: And the argument has been the lower, like you said,
7:59
Speaker 3: you move down the income to your threshold, the heavier
8:03
Speaker 3: percentage of a dollar that is saved or in this
8:05
Speaker 3: case refunded to them get spent. When you start to
8:08
Speaker 3: look at that middle income tier that you mentioned, the
8:10
Speaker 3: one hundred to two hundred and fifty thousand, it's not
8:13
Speaker 3: a pure one to one sort of ratio where a
8:17
Speaker 3: dollar put back in their pocket gets me to spent.
8:19
Speaker 4: A lot of it will get saved.
8:21
Speaker 3: So it's inconclusive how much of a bump this will
8:26
Speaker 3: really have on economic activity.
8:28
Speaker 2: I suppose time will tell. I don't know. Whenever somebody
8:31
Speaker 2: tells me that Americans are going to save their money,
8:33
Speaker 2: I start it did happen in twenty twenty. Like to
8:36
Speaker 2: be clear, people paid down debt and saved a lot
8:38
Speaker 2: of their stimulus money in twenty twenty. So I'm not
8:40
Speaker 2: going to say it's impossible, But remember that you couldn't
8:43
Speaker 2: really spend your money in twenty twenty very easily either, right, Like, yeah,
8:47
Speaker 2: you could buy a solo stove, it took six months
8:49
Speaker 2: for it to get there, and other than that, there
8:52
Speaker 2: weren't a lot of vacations to go on or trips
8:54
Speaker 2: to plan, and so a lot of people did save things.
8:56
Speaker 2: I tend to believe that people get refunds. They're going
8:59
Speaker 2: to spend it like wild fire this time around. But
9:01
Speaker 2: we will see. Tax filing season is now open inspite
9:05
Speaker 2: of the government being shut down. They are allegedly still
9:07
Speaker 2: going to be processing returns at least through Saturday of
9:10
Speaker 2: this weekend if the government shutdown does not get worked out,
9:15
Speaker 2: but we will see that could also result in DeLay's
9:17
Speaker 2: for tax filings as well, if this government shutdown actually
9:21
Speaker 2: turns into something. Let's take a quick break when we
9:23
Speaker 2: come back. I'm going to be a play a little
9:26
Speaker 2: bit of trivia here next on the Financial Exchange.
9:28
Speaker 1: Tekst us six one, seven, three, six, two thirteen eighty
9:31
Speaker 1: five with your comments and questions about today's show and
9:35
Speaker 1: let us know what you think about the stories we
9:37
Speaker 1: are covering. This is the Financial Exchange Radio Network. Here
9:42
Speaker 1: the Financial Exchange every day from eleven to noon non
9:45
Speaker 1: Serious XMS Business Radio Channel one thirty two. Keep it
9:48
Speaker 1: here for the latest business and financial news and the
9:51
Speaker 1: trends on Wall Street. The Financial Exchange is now life
9:54
Speaker 1: on Serious XM's Business Radio Channel one thirty two. This
9:58
Speaker 1: is the Financial Exchange Radio network.
10:03
Speaker 5: The Financial Exchange is a proud partner of the Disabled
10:06
Speaker 5: American Veterans Department of Massachusetts. The DAV five K raised
10:10
Speaker 5: over one hundred and fifty thousand dollars last year, but
10:14
Speaker 5: we still need your help. You can support our great
10:16
Speaker 5: American heroes by visiting DAV fivek dot Boston and making
10:20
Speaker 5: a donation today. Your participation helped provide vital services like
10:25
Speaker 5: free transportation to medical appointments and safe housing for single
10:29
Speaker 5: veterans and their families. Donate today at DAV fivek dot Boston.
10:34
Speaker 5: That's DAV five k dot Boston. Time for trivia here
10:39
Speaker 5: on the Financial Exchange. And Nintendo announced that their gaming console,
10:43
Speaker 5: the Switch, is now Nintendo's best selling video game console
10:47
Speaker 5: of all time, selling over one hundred and fifty five
10:51
Speaker 5: million units. The Switch is now the second most sold
10:55
Speaker 5: game console of all time. So our tribute question today,
10:59
Speaker 5: what is the best selling video game console of all time?
11:02
Speaker 5: Once again, what is the best selling video game console
11:06
Speaker 5: of all time? Be the fourth person today to text
11:09
Speaker 5: us at six one seven three six two thirteen eighty
11:11
Speaker 5: five with the correct answer along with the keyword trivia,
11:15
Speaker 5: and you win a Financial Exchange show t shirt once again.
11:17
Speaker 5: The fourth correct response to text us to the number
11:20
Speaker 5: six one seven, three six two thirteen eighty five with
11:24
Speaker 5: the correct answer along with keyword trivia will win that
11:27
Speaker 5: T shirt. See complete contest rules at Financial exchange show
11:31
Speaker 5: dot com.
11:32
Speaker 2: Paul most recent readings on inflation and unemployment, which I
11:37
Speaker 2: guess it is good a number to look at for
11:40
Speaker 2: a read on the economy, as you can. Two point
11:43
Speaker 2: seven to two point eight on the inflation side of
11:45
Speaker 2: things year over year is what we are now looking
11:47
Speaker 2: at in terms of the rate of price increases, unemployment
11:50
Speaker 2: rate at four point four percent by all normal and
11:56
Speaker 2: stocks at all time highs GDP growth pretty solid, and
11:58
Speaker 2: productivity some of the best that we have seen in decades. Right, Like,
12:01
Speaker 2: if I'm going to round out the economic statistics that
12:04
Speaker 2: I think really matter, that would be a lot of them. Nonetheless,
12:09
Speaker 2: we've talked about this divergence before. We look at the
12:13
Speaker 2: data points like inflation, like unemployment, like stock market growth
12:16
Speaker 2: or productivity and look pretty good, and then you ask
12:19
Speaker 2: people how they're feeling about the economy and their answer
12:22
Speaker 2: is so terrible that they the numbers to compare to
12:27
Speaker 2: have only been seen in times of recession, and that
12:31
Speaker 2: is what has researchers a bit confounded. And you know,
12:35
Speaker 2: there's problems with Michigan, but there are other consumer sentiment
12:38
Speaker 2: surveys out there that are all echoing the same thing that,
12:40
Speaker 2: in spite of the numbers that we see out there,
12:44
Speaker 2: how people feel about the economy diverges significantly from those numbers,
12:49
Speaker 2: and diverges in a way that we have not seen
12:51
Speaker 2: in the history of these surveys existence. And I don't
12:54
Speaker 2: think we're any closer to a real answer on why
12:56
Speaker 2: that is the case.
12:57
Speaker 1: Now.
12:57
Speaker 3: There's some factors that are mentioned here in this pe
13:00
Speaker 3: one of them that's just interesting to note, and I
13:02
Speaker 3: don't know how much weight you can necessarily throw behind it,
13:05
Speaker 3: but there is certainly a more prevalent negative news cycle
13:11
Speaker 3: wherever you tend to get your information from. It just
13:14
Speaker 3: feels like you are being fed more negativity in general,
13:18
Speaker 3: and it's harder to take an objective look specific to
13:23
Speaker 3: economics as to what is really going on. I feel
13:26
Speaker 3: as if you were to pull many people on some
13:29
Speaker 3: of those indicators that you mentioned, whether it be inflation
13:33
Speaker 3: or the labor market, I feel as if they would
13:36
Speaker 3: have negative sentiment and the polling sort of reflects these
13:39
Speaker 3: numbers when they wouldn't be aware of actually where the
13:42
Speaker 3: numbers are from a statistical standpoint. You also have that
13:46
Speaker 3: case shaped economy diversions that we've talked about a lot
13:49
Speaker 3: that only seems to get more and more exacerbated heading
13:52
Speaker 3: into this year, as they've kind of revisited those numbers
13:55
Speaker 3: where the people at the top who are making a
13:58
Speaker 3: lot of money are spent and are doing well, but
14:01
Speaker 3: those people who are in that lower income tiers have
14:04
Speaker 3: been more negatively impact by inflation. I think that still
14:08
Speaker 3: looms large when we look at this survey data here
14:11
Speaker 3: as it comes out.
14:12
Speaker 2: Yeah, so again, I don't know that these are going
14:14
Speaker 2: to diverge, but I since twenty twenty, it's really broken,
14:18
Speaker 2: and I'm now wondering is it even useful to measure
14:21
Speaker 2: consumer sentiment to anytime pre twenty twenty. I think reality
14:26
Speaker 2: is we might have hit some new level and now
14:30
Speaker 2: the only useful comparison is post twenty twenty and on.
14:32
Speaker 2: And that's kind of how I'm reading these sentiment surveys
14:35
Speaker 2: going forward. Is okay, tell me how this compares to
14:38
Speaker 2: anytime post COVID, because something flipped at that point in time.
14:41
Speaker 2: Maybe it's our views on politics, Maybe it's the way
14:44
Speaker 2: we respond to surveys. Maybe it is something else that
14:47
Speaker 2: I'm not considering. But I just don't think that measuring
14:50
Speaker 2: consumer sentiment, which is a shame because the data is
14:52
Speaker 2: consistent since the nineteen sixties, I don't think it's a
14:56
Speaker 2: useful exercise to compare to any time pre twenty twenty now,
14:58
Speaker 2: which is to but I guess how the data oftentimes
15:02
Speaker 2: does change. Paul the Portland Free what is it? The
15:06
Speaker 2: Portland Free Press Herald is reporting today that a couple
15:12
Speaker 2: out of Falmouth, Maine. Oh boy, this is just hard
15:16
Speaker 2: to cover. A main couple was scammed out of one
15:19
Speaker 2: point three million dollars recently. They are suing their financial
15:23
Speaker 2: advisor to try and recover some of that. But what
15:27
Speaker 2: it looks like to me is something that we have
15:30
Speaker 2: talked about on the program before, which is individuals being
15:34
Speaker 2: convinced that they are potential investors in some sort of
15:41
Speaker 2: exciting new thing, and the returns that are being promised
15:46
Speaker 2: are substantial, and what they could get convinced to do
15:50
Speaker 2: is to liquidate their accounts, oftentimes retirement accounts iras or
15:55
Speaker 2: four oh one k's that come with substantial taxes for
16:00
Speaker 2: liquidating them. They're made all sorts of promises by people
16:05
Speaker 2: that seem like trustable institutions, only to find out that
16:10
Speaker 2: the places that they put their money are not legitimate.
16:13
Speaker 2: The money disappears, and then not only are they out
16:17
Speaker 2: their life savings, which this couple seems to be, but
16:20
Speaker 2: they're also out all the taxes that they owe the
16:22
Speaker 2: IRS on the scam that they took, because losing money
16:26
Speaker 2: on a scam is not some sort of magical tax
16:28
Speaker 2: deduction that you get to avoid the taxes due. And
16:33
Speaker 2: unfortunately now one point three million dollars to this specific
16:37
Speaker 2: type of scam where they allegedly transferred the money to
16:39
Speaker 2: scammers via bitcoin. I have personally not seen one that
16:43
Speaker 2: substantial recently, but this stuff is occurring almost every single day.
16:49
Speaker 2: I think that is the one that rings true to
16:52
Speaker 2: me is people, not necessarily people with Alzheimer's or dementia,
16:58
Speaker 2: not necessarily all eighty five year olds, although you know
17:02
Speaker 2: very much they are the targets of this stuff because
17:04
Speaker 2: they're the ones who are most likely to take money
17:07
Speaker 2: out of their iras anyway, are being targeted for this
17:10
Speaker 2: stuff daily and it's becoming more and more difficult to detect.
17:13
Speaker 4: Yeah, we talked about it earlier in the program.
17:15
Speaker 3: How there has been over the course of the last
17:18
Speaker 3: four or five years, whether it be the Meme investment
17:22
Speaker 3: sort of period or some the trading that we're seeing
17:25
Speaker 3: with commodities, there's a lot more. There's a lot of
17:27
Speaker 3: speculation in the market, and I feel like these scammers,
17:30
Speaker 3: Mike are praying off of that demand to make out,
17:34
Speaker 3: to promise outside returns and to promise all this wealth creation,
17:38
Speaker 3: and it's created this unfortunate recipe that has lured some
17:43
Speaker 3: sort of uneducated into these traps. And they can be
17:48
Speaker 3: really sophisticated nature.
17:49
Speaker 2: So you mean even the educated. I've seen police officers
17:52
Speaker 2: and FBI agents following if retired FBI agents, falling for
17:55
Speaker 2: this stuff. If you have concerns about a loved one's
17:59
Speaker 2: ability to detect this sort of thing, if you yourself
18:01
Speaker 2: are concerned about the types of scams that are out there.
18:04
Speaker 2: We've got a guide from the Armstrong Advisory Group all
18:07
Speaker 2: about understanding elder financial abuse, which this is a form
18:11
Speaker 2: of give us a call it Armstrong Advisor Group. There
18:13
Speaker 2: are several steps you can take, but this is one
18:15
Speaker 2: of them eight hundred three nine three for zero zero
18:19
Speaker 2: one to request your free copy of our Understanding Elder
18:21
Speaker 2: Financial Abuse eight hundred three nine three for zero zero one.
18:25
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
18:27
Speaker 1: registered investment advisor. Nothing in the ad or in any
18:30
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
18:33
Speaker 1: your own financial tax into state planning advisors before making
18:36
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
18:39
Speaker 1: advisory services.
18:40
Speaker 2: Taking a look again here at markets, we've got gold
18:45
Speaker 2: up about seven percent, silver up fifteen and a half percent.
18:49
Speaker 2: Oil markets have been on the move over the last
18:51
Speaker 2: few weeks as well. Oil prices today on the West
18:54
Speaker 2: Texas crewed up about one percent. And then here in
18:58
Speaker 2: US markets, we have now flipped to the negative on
19:01
Speaker 2: all three major indices than Nasdaq, Dow and SMP five hundred.
19:06
Speaker 2: Later this week we will be getting earnings updates from
19:09
Speaker 2: Alphabet tomorrow, Eli, Lilly, Avi, Novartis, Nova, NORDESK, Uberant. Then
19:14
Speaker 2: Thursday we'll be getting a big earnings update from Amazon,
19:18
Speaker 2: the behemoth in the market these days, so we'll be
19:22
Speaker 2: right back Wall Street watches next and then We're joined
19:25
Speaker 2: by Governor Albert Bryan of the United States Virgin Islands.
19:40
Speaker 1: Bringing the latest financial news straight to your radio. Every day.
19:44
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:50
Speaker 1: Time now for Wall Street. Watch a complete look at
19:53
Speaker 1: what's moving markets so far today right here on the
19:57
Speaker 1: Financial Exchange Radio Network.
20:00
Speaker 5: Negative territory as traders react to a new flurry of
20:03
Speaker 5: earnings with mixed results. Right now, the Dow is down
20:06
Speaker 5: by over a tenth of a percent, SMP five hundreds
20:09
Speaker 5: down two thirds of a percent, Nasdaq down one point
20:12
Speaker 5: three percent, selling off three hundred and six points, Russell
20:15
Speaker 5: two thousands up six tenths of a percent, ten year
20:17
Speaker 5: treasurel at four point two to eighty five percent flat
20:20
Speaker 5: on the day, and crude oil up over one percent higher,
20:23
Speaker 5: trading just below sixty three dollars. A barrel breaking news
20:27
Speaker 5: from Disney to this morning, where the entertainment Giant officially
20:30
Speaker 5: nicknamed Josh Demero as its new CEO, succeeding Bob Iger. Meanwhile,
20:35
Speaker 5: Pallenteer stock jumping four percent after the AI software company
20:39
Speaker 5: b fourth quarter earnings and revenue forecasts. Elsewhere, Pepsi logged
20:43
Speaker 5: a higher quarterly profit in revenue, where the food and
20:45
Speaker 5: beverage maker said it aims to spur sales in the
20:48
Speaker 5: coming year. PEPSI up by over three percent, and with
20:52
Speaker 5: today's gains of two percent, Walmart has officially crossed the
20:56
Speaker 5: one trillion dollar market cap threshold. I'm talking and that
21:01
Speaker 5: is Wall Street Watch.
21:02
Speaker 2: Joining us now on the line is Governor Albert Bryan Junior.
21:06
Speaker 2: He's governor of the United States Virgin Islands and just
21:09
Speaker 2: delivered his State of the Territory address. And so, Governor,
21:13
Speaker 2: I promise I will give you the opportunity to boast
21:16
Speaker 2: about your areas weather, but I will say that here
21:19
Speaker 2: in New England it finally popped into the twenties this week,
21:22
Speaker 2: So you know, New Englanders are wearing shorts around and
21:25
Speaker 2: we're we're not all that impressed by your beautiful seventy
21:29
Speaker 2: and eighty degree whether I'm sure. But Governor, before you
21:33
Speaker 2: boast about the beautiful leisure vacations that people can take,
21:37
Speaker 2: you did just deliver this State of the Territory address.
21:40
Speaker 2: We have a business and economic news show here and
21:43
Speaker 2: I'm interested to hear from you as to what you view.
21:47
Speaker 2: You know, the major themes of your address that you
21:51
Speaker 2: recently delivered on the state of the Virgin Islands.
21:55
Speaker 6: Well, well, good morning and go actually good afternoon. I
21:58
Speaker 6: mean the major theme there was was anchored in progress,
22:02
Speaker 6: and we're talking about all the things that are going
22:04
Speaker 6: on in the Virgin Islands and the parket and as
22:06
Speaker 6: well as the public sector. We are just at the
22:09
Speaker 6: beginning of a twenty five billion dollar remake. Our recovery
22:15
Speaker 6: includes our hospitals, our schools, all our undergrounding, water, sewer,
22:21
Speaker 6: our power plants. Everything is being redone. And at the
22:23
Speaker 6: same time we're really doing well in the private sector market.
22:28
Speaker 6: All we're at three point six percent three point six
22:32
Speaker 6: percent unemployment in the last in the last six years,
22:36
Speaker 6: seven years of my tenure, we've grown our GDP by
22:40
Speaker 6: twenty five percent.
22:42
Speaker 7: We're really on fire.
22:43
Speaker 6: The problem is is that, you know, much like the
22:46
Speaker 6: rest of the nation, inflation is doing a real good
22:50
Speaker 6: job on us here. Last year we experienced seven percent.
22:53
Speaker 6: In some of the years we experienced nine percent inflation,
22:57
Speaker 6: especially on the smaller island of Saint John. So lots
23:01
Speaker 6: of the stories to tell. We're converting our whole grid system.
23:05
Speaker 6: Now we're almost we say we have the most solar
23:08
Speaker 6: per capita, and we're adding more or about sixty percent
23:12
Speaker 6: of our daytime running power on Saint Croix now solar,
23:17
Speaker 6: and we're expanding that in Saint Thomas and Saint John
23:19
Speaker 6: district as well too, So doing really well economically, but
23:24
Speaker 6: we're feeling the pinch of that inflation.
23:25
Speaker 7: Every single dollar counts.
23:27
Speaker 2: I was going to ask about that. The complaints that
23:29
Speaker 2: you hear across the country right now, a lot of
23:32
Speaker 2: them do stem from the cost of electricity and utility
23:35
Speaker 2: bills that people are seeing. Given you know, given your territory,
23:40
Speaker 2: the fact that you're a series of small islands, I
23:42
Speaker 2: would imagine the ability to produce energy there. Is it
23:46
Speaker 2: heavily Obviously solar is a big piece of it. Otherwise
23:49
Speaker 2: is it heavily reliant on burning oil?
23:51
Speaker 7: Oh?
23:52
Speaker 6: Yeah, absolutely we were. I mean before these solar fields,
23:55
Speaker 6: we were probably like ninety percent on fossil fuel. And
24:01
Speaker 6: you know, one of the things that we boast about
24:03
Speaker 6: that we were able to keep the light build the
24:06
Speaker 6: percentage the cost of energy the same over the last
24:09
Speaker 6: seven years. But our energy is forty three cents per kiloat.
24:14
Speaker 6: Most places are paying like ten or twelve, so it's
24:17
Speaker 6: four times that of the national average. And I had
24:22
Speaker 6: to do that in order to you know, keep the
24:24
Speaker 6: economy going because we've had fifty three cents, like you
24:29
Speaker 6: imagine it going up to five times in national average,
24:32
Speaker 6: and that really crippled us in terms of our small
24:35
Speaker 6: businesses and whatnot.
24:36
Speaker 7: Here.
24:36
Speaker 6: But you know, tourism is up. We're from one point
24:39
Speaker 6: sixty two point five million people. We're adding a new berth,
24:42
Speaker 6: we're building to brand new airports. The thing that we're
24:46
Speaker 6: worried about, especially now in this immigration climate that we're in,
24:50
Speaker 6: is workers, right, we need people to build we have.
24:55
Speaker 6: Last year alone, we issued eleven billion dollars in contracts.
24:59
Speaker 6: We're talking about economy that's only five billion dollars. So
25:02
Speaker 6: the government alone issued twice the size of the economy
25:06
Speaker 6: in government contracts and that is going to continue this year,
25:10
Speaker 6: adding at least another two or three billion. And so
25:14
Speaker 6: where do all those workers come from? That's that's really
25:17
Speaker 6: the challenge. Now, this is my last year's office, but
25:20
Speaker 6: I expect the way the Northeast weather it's going, our
25:24
Speaker 6: tourism system season will remain strong.
25:28
Speaker 2: I expect.
25:28
Speaker 6: So yeah, well, if it would make you feel a
25:32
Speaker 6: little better today.
25:33
Speaker 7: You know, we're feeling a cold front. It's down to
25:35
Speaker 7: like eighty or something like that.
25:37
Speaker 6: I was on the beach this weekend talking to some
25:40
Speaker 6: people from Boston and they were smiling so hard their
25:43
Speaker 6: face almost broke.
25:44
Speaker 2: I mean, yeah, it might have been a personal friend
25:47
Speaker 2: of mine. A friend of mine just got back from
25:49
Speaker 2: a week on Saint John and was and was, you know,
25:51
Speaker 2: all smiles when he returned. You talked a lot about
25:55
Speaker 2: economic stability, and I know, especially the unemployment rate substantially
25:58
Speaker 2: lower than the mainland United States unemployment rate, which it
26:04
Speaker 2: speaks to a strong economy, also speaks just challenges obviously
26:07
Speaker 2: hiring workers. But it does seem to lead into something
26:12
Speaker 2: that you've talked to us about before, which are the
26:14
Speaker 2: benefits for US state side businesses relocating to the Virgin Islands.
26:20
Speaker 2: And again, Saint Thomas, Saint John, Saint Croix, can you
26:23
Speaker 2: speak a little bit to some of those benefits that
26:26
Speaker 2: you see major businesses getting where they relocate.
26:30
Speaker 6: Well more than ever now, I think things are really
26:33
Speaker 6: looking up for us. One of the little known foxes
26:36
Speaker 6: that the Virgin Islands sits outside the US custom zone.
26:39
Speaker 7: So all of the.
26:40
Speaker 6: Trump tarifs that have been imposed do not count for US,
26:44
Speaker 6: so you can bring in a foreign made good into
26:47
Speaker 6: the Virgin Islands at a one percent customs duty after
26:51
Speaker 6: thirty percent value, and it goes back to the mainland
26:54
Speaker 6: as a US made products. So we've been talking to
26:56
Speaker 6: a lot of people who are facing type tower.
27:01
Speaker 7: Hurdles as a result of the new changes.
27:04
Speaker 6: But then even after that, then you know, as a
27:07
Speaker 6: corporation operating in the Virginal that has an export product
27:11
Speaker 6: anything from hotels to finance, you get a one hundred
27:17
Speaker 6: percent tax break on your state taxes, and then you
27:20
Speaker 6: get a ninety percent tax break on your federal income taxes.
27:24
Speaker 6: So your effective tax rate is somewhere around one point
27:27
Speaker 6: seventy three to two point three percent annually, and that
27:31
Speaker 6: has really enabled people to grow their businesses with using
27:36
Speaker 6: the same US currency and then being able to do that.
27:40
Speaker 7: Like.
27:41
Speaker 6: The other thing that we have to is we have
27:42
Speaker 6: private banks that enjoy the same they're the same privileges,
27:47
Speaker 6: the same benefit package. You can have a non depository
27:51
Speaker 6: bank financing your projects other places, and that bank doesn't
27:54
Speaker 6: pay any taxes except that ten percent of the going rate.
27:59
Speaker 6: So it's a great kept secret. I recently just came
28:03
Speaker 6: from Ghana speaking to people about West African exports and
28:08
Speaker 6: how other Virginias can be a gateway into the mainland
28:12
Speaker 6: USA because we're tax exempt of a tariff examp on
28:18
Speaker 6: all products and we make the determination of what our
28:21
Speaker 6: towers should be.
28:22
Speaker 7: So it's a good place to be right now.
28:24
Speaker 6: The other thing that's going really well for us is
28:27
Speaker 6: you know now that Maduro or the President Maduro has
28:31
Speaker 6: been removed from Venezuela. We have the third largest refinery
28:36
Speaker 6: in the Western Hemisphere and it was built to refine
28:40
Speaker 6: Venezuela and crude. So we're getting a lot of people
28:43
Speaker 6: calling now that refinery is we're trying to get it open.
28:46
Speaker 6: It was closed during the Biden era and the Trump
28:50
Speaker 6: berra is looking very positive for us in terms of
28:52
Speaker 6: getting it open. So if we really start getting all
28:56
Speaker 6: that Venezuela and crude back into the US refineries one
29:00
Speaker 6: of them that we expect to be started up, which
29:03
Speaker 6: will add to our growing economy. Once again, we need
29:06
Speaker 6: employed employment, employment need workers.
29:10
Speaker 2: Governor, you pointed out that this most recent State of
29:13
Speaker 2: the Territories address was your final Is there anything you
29:16
Speaker 2: would highlight or like to highlight as your most proud
29:19
Speaker 2: accomplishments during your time in office in the territories.
29:23
Speaker 6: For us, you know, the one thing that I'm extreme
29:25
Speaker 6: two things I'm extremely proud of about. You know, COVID
29:29
Speaker 6: crippled a lot of the Caribbean and a lot of
29:31
Speaker 6: the world in terms of their tourism product, and we've
29:34
Speaker 6: never made so much money as COVID. We've managed that
29:36
Speaker 6: real well and brought in a lot our numbers actually
29:38
Speaker 6: down from COVID in terms of getting people in here.
29:43
Speaker 6: And then we figured out a way to keep our retirements.
29:47
Speaker 6: Government retirement system solve it and it's the worst retirement
29:49
Speaker 6: system in the world, in the most insolvent retirement system
29:55
Speaker 6: in the world. Rather and we were managed to say
29:57
Speaker 6: that and put a little life into it. Particularly proud
30:00
Speaker 6: about that. Just so many people depending on up on
30:02
Speaker 6: that here. But we've been open for business. We hung
30:05
Speaker 6: our shingles seven years ago and we've seen the first
30:08
Speaker 6: hotel in thirty years built in the Virgin On's. We
30:11
Speaker 6: got two or three coming along and other projects that
30:14
Speaker 6: we've just been able to say yes, yes, yes to business.
30:16
Speaker 6: What can we do? And uh, it has been it
30:19
Speaker 6: worked out really well for us. These pesky term limits
30:23
Speaker 6: really got it. We got to get rid of them.
30:25
Speaker 2: That's Governor Albert Brian Junior, who joins us today talk
30:29
Speaker 2: about his recent State of the Territory address. Governor, thank
30:33
Speaker 2: you so much for joining us. Appreciate it, and I'm
30:35
Speaker 2: sure we'll talk again soon.
30:37
Speaker 7: Thank you, Stay warm, thank you.
30:39
Speaker 2: Let's take a quick break here. When we come back.
30:43
Speaker 2: Stack Roulette is next.
30:44
Speaker 1: The Financial Exchange streams live on YouTube. Subscribe to our
30:48
Speaker 1: page and stay up to date on breaking business news
30:51
Speaker 1: all morning. Long Face is the Financial Exchange Radio Network.
30:55
Speaker 1: The Financial Exchange is now a real boy. Every day
30:58
Speaker 1: from eleven to noon, Non Serious XM's Business Radio Channel
31:01
Speaker 1: one thirty two. Stay informed about the latest from Wall Street,
31:04
Speaker 1: fiscal policy, and breaking business news. Every day, The Financial
31:08
Speaker 1: Exchange is live. I Serious XM's Business Radio Channel one
31:12
Speaker 1: thirty two. This is the Financial Exchange Radio Network.
31:25
Speaker 5: Subscribe out your phone. Yeah yeah, yeah, yeah, nobody knew
31:29
Speaker 5: that until you pointed out. Subscribe now to our YouTube
31:32
Speaker 5: commit stupid headphones are broken a Subscribe now to our
31:35
Speaker 5: YouTube page, where you find daily interviews and full shows
31:39
Speaker 5: of the Financial Exchange. You'll get caught up on anything
31:41
Speaker 5: and everything you might have missed right here on the
31:44
Speaker 5: Financial Exchange Radio network. Just search the Financial Exchange on
31:47
Speaker 5: YouTube and hit that subscribe button. We got to pay
31:51
Speaker 5: off our trivia question today, which was what is the
31:54
Speaker 5: best selling video game console of all time? Well, that
31:57
Speaker 5: would be the PlayStation two. Hollis from Seabrook, New Hampshire
32:01
Speaker 5: is our winner today taking on my Financial Exchange Show
32:03
Speaker 5: t shirt and we play trivia every day here in
32:06
Speaker 5: the Financial ex Change. See complete contest rules at Financial
32:09
Speaker 5: Exchange Show dot com.
32:10
Speaker 2: What was like the major PlayStation two game? Is that
32:13
Speaker 2: like Twisted Metal Stage?
32:15
Speaker 5: I think so? I wasn't I was an Xbox guy?
32:18
Speaker 4: Oh that was specific to just PS two, like Resident.
32:23
Speaker 4: Try to remember like why Auto?
32:25
Speaker 2: Oh yeah, that may be the biggest one. Try to
32:28
Speaker 2: remember one Solid? Okay, yeah, those are all big one.
32:34
Speaker 4: Kingdom Hearts.
32:35
Speaker 5: Wasn't that another one?
32:36
Speaker 2: Never heard of that? Okay? I have a uh, well,
32:41
Speaker 2: if it ain't broke, don't fix it argument. I guess
32:44
Speaker 2: I would go out there with. So you're both familiar
32:47
Speaker 2: with the hidden door handles in sure Tesla's specifically, I
32:51
Speaker 2: think they were the first ones out there to really
32:53
Speaker 2: push this concept of a door handle that you know,
32:56
Speaker 2: could not be grasped unless the car is unlocked, at
32:59
Speaker 2: which point it pops out or you pop it out physically.
33:02
Speaker 2: China has now banned those hidden door handles in a
33:07
Speaker 2: safety rule that they say, you know, may have caused
33:10
Speaker 2: deaths from people unable to exit the car or you know,
33:15
Speaker 2: rescue personnel unable to open the car because of the
33:18
Speaker 2: stupid designed door handle. And I have to say, this
33:21
Speaker 2: is one of my least favorite design features that I've
33:24
Speaker 2: ever experienced. It does give me concern about the ability
33:28
Speaker 2: for the door to be actually opened in the event
33:30
Speaker 2: of an emergency. My new car, in fact, does not
33:34
Speaker 2: do this. Instead, there's a tiny little electronic button where
33:37
Speaker 2: to open the car door. There is no handle anywhere.
33:39
Speaker 2: There's just a circle button that you press to open it.
33:42
Speaker 2: On the inside there's a lever, but on the outside
33:44
Speaker 2: it's just a button. And I have those same concerns.
33:47
Speaker 2: The other piece, though, that beyond a safety issue. On
33:50
Speaker 2: both Tesla's and a Hyundai that I have driven here
33:56
Speaker 2: in the Northeast, when you get cold temperatures with snow
33:59
Speaker 2: and rain, these things literally freeze shut. This is not
34:04
Speaker 2: unique to one of these auto manufacturers. This is unique
34:07
Speaker 2: to the stupid concept of a hidden door handle, And
34:10
Speaker 2: I think, again, what was wrong other than maybe it
34:14
Speaker 2: wasn't sexy enough with the old concept of a door
34:17
Speaker 2: handle where you're stuck your dond in there. If it
34:19
Speaker 2: ain't broke, don't fix it. And this new design, I
34:23
Speaker 2: think needs to be be killed because it's apparently, at
34:27
Speaker 2: least in China, causing safety problems. I haven't heard about
34:30
Speaker 2: those allegations of safety issues with Tesla's, so maybe it's
34:32
Speaker 2: a different design. But moreover, it's an annoyance if you
34:36
Speaker 2: live anywhere north of Washington, d C. Where once a
34:40
Speaker 2: year or a couple times a year, if your car's outside,
34:43
Speaker 2: the door handle literally gets frozen shut and you have
34:47
Speaker 2: no option for something.
34:48
Speaker 4: You know what rusts me creevy. Kind Of along those
34:49
Speaker 4: lines with.
34:50
Speaker 3: New gadgets is how now all keys for vehicles have
34:54
Speaker 3: the battery, the button battery power behind them, And I
34:57
Speaker 3: get that it somehow is beneficial like it, So now
35:02
Speaker 3: all the keys have like a button battery in your
35:04
Speaker 3: fob that is basically powering your your car remote and
35:09
Speaker 3: you turn on your car, and.
35:10
Speaker 2: If that battery dies, then you're just sol You're you're
35:14
Speaker 2: a creek without a paddle.
35:15
Speaker 5: The fobs that I have have a key on it,
35:17
Speaker 5: so I have averse.
35:19
Speaker 3: My traverse is that scenario where I can still get
35:22
Speaker 3: by when the battery is dead on the remote. However,
35:24
Speaker 3: the newer vehicle, the Suburban that we have twenty twenty
35:28
Speaker 3: four vintage, is once you once it's done, you're done
35:33
Speaker 3: with it, like you have no experience. Yes, yeah we have.
35:36
Speaker 3: We have dealt with it now. To be fair, on
35:39
Speaker 3: the traverse, I had the battery just die on me
35:41
Speaker 3: without any warning, but I was able to start it
35:44
Speaker 3: manually just by having the key there the suburban to
35:48
Speaker 3: give them a little they warn you, hey, your battery
35:50
Speaker 3: is getting low on the key, you might want to
35:53
Speaker 3: change it. So we were able to get ahead of
35:56
Speaker 3: it because we were giving the heads up.
35:57
Speaker 4: But I guess or if you're.
35:58
Speaker 2: Going to go do that where there is no backup,
36:01
Speaker 2: then you need to have an app on your phone
36:04
Speaker 2: like Ford and Tesla have where your phone can be
36:06
Speaker 2: your key as well.
36:08
Speaker 3: That's my issue with it, is that why where twenty
36:13
Speaker 3: nineteen or twenty twenty the traverse the Suburban is a
36:15
Speaker 3: twenty four.
36:17
Speaker 2: That's the one that is the fob, that's the one
36:19
Speaker 2: that's fobre on Star.
36:20
Speaker 5: Probably I'm seeing it does have a hidden mechanical key
36:25
Speaker 5: in yours.
36:27
Speaker 4: To open the door.
36:28
Speaker 2: Don't prove them wrong right on air.
36:30
Speaker 4: That's I I am no.
36:31
Speaker 3: But there's no there's no that can actually unlock the
36:35
Speaker 3: door from the other side.
36:36
Speaker 4: Yeah, let's do it after the show, all right.
36:39
Speaker 2: I like this. Well, we'll be broadcasting tomorrow from the basement.
36:44
Speaker 2: No financial change.
36:45
Speaker 4: No one send this to UH. No one said this
36:47
Speaker 4: to GM for that's.
36:50
Speaker 5: What AI is talking.
36:51
Speaker 4: Hate these damn keys.
36:54
Speaker 2: Maybe you man yells at Cloud financially.
36:57
Speaker 3: Maybe it's just user error. I'll briefly gloss on it
37:01
Speaker 3: because we're toured on time here. SpaceX and Xai are
37:04
Speaker 3: tying up to create a one point two five trillion
37:08
Speaker 3: dollar company Elon Musk.
37:10
Speaker 2: We'll see once it's publicly traded, by the way.
37:12
Speaker 3: Right, I don't know. It's gonna get a lot of
37:15
Speaker 3: high behind it. Elon must They are setting up for
37:17
Speaker 3: a summer IPO they're targeting, I believe for SpaceX, But
37:21
Speaker 3: in more recent news they have merged with his Ai
37:23
Speaker 3: company Xai, which has been roughly valued around two hundred
37:27
Speaker 3: and fifty billion dollars in recent raises.
37:30
Speaker 2: Which is also not Twitter, right it.
37:33
Speaker 3: Is not actually no Twitter is part of Itai. Yes, okay,
37:37
Speaker 3: So this is similar to must playbook of sort of
37:41
Speaker 3: rolling up both good companies and bad companies into his
37:45
Speaker 3: existing companies.
37:46
Speaker 4: Think Solar City.
37:47
Speaker 2: Which was which is a space exploration company interested Twitter
37:52
Speaker 2: not so much.
37:53
Speaker 3: No Xai is up against some real big boys of
37:57
Speaker 3: you know, Open Ai Anthropic as well as Gemini, so
38:00
Speaker 3: perhaps putting it in with SpaceX gives it a little
38:04
Speaker 3: bit more legs and runway from a funding perspective.
38:07
Speaker 2: Markets are selling off. Naszac's down one and a quarter percent,
38:10
Speaker 2: SMP down two thirds of percent. That's all the time
38:12
Speaker 2: we have today, though we'll be right back at a
38:14
Speaker 2: tier tomorrow on the Financial Exchange