Latest / The Financial Exchange Show / Labor Market Shifts, Housing Shortages, and What It Means for Growth

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Labor Market Shifts, Housing Shortages, and What It Means for Growth · The Financial Exchange Show

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Speaker 1: a donation today. This is the Financial Exchange with Chuck
1:06
Speaker 1: Zadath and Mike Armstraw.
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Speaker 2: Chuck, Mike and Tucker here. And as we kick things off,
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Speaker 2: we've got stocks basically stuck in neutral. The SMP is
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Speaker 2: off eight points, downs off one hundred and thirty four points,
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Speaker 2: Nasdacs off twenty five, so about a tenth of a
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Speaker 2: percent to three tenths of an percent decline cross major
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Speaker 2: US indecease today. Tenure Treasury selling off a touch as well,
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Speaker 2: up two point four basis points to four point three
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Speaker 2: one five percent. We got the dollar index down eighteen
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Speaker 2: basis points to ninety eight seven forty five. Gold is
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Speaker 2: up thirteen twenty and ounce to forty seven ninety and
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Speaker 2: forty cents. And we've got crude oil back on the
1:45
Speaker 2: move up West Texts Intermediate up seven point fifty four
1:48
Speaker 2: a barrel to one oh one ninety five, so back
1:50
Speaker 2: above one hundred dollars a barrel. This as we are
1:56
Speaker 2: now into day two of the ceasefire in the Middle
1:59
Speaker 2: East and meetings are scheduled to begin on Saturday in Islamabad.
2:05
Speaker 2: We'll see how things go. The next few days are
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Speaker 2: going to be pretty critical and determining, in my opinion,
2:10
Speaker 2: what happens through the region as far as a resumption
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Speaker 2: of transits and oil production. At the moment, you're getting
2:18
Speaker 2: all kinds of conflicting reports about, you know, what may
2:21
Speaker 2: or may not end up happen, what may or may
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Speaker 2: not end up happening. So again, like take it all
2:27
Speaker 2: with a grain of salt, see how things go. To
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Speaker 2: this point, we have not seen any meaningful uptick in
2:33
Speaker 2: ships heading through Hormus, but that can obviously change depending
2:38
Speaker 2: on how things go over the next several days. Both
2:40
Speaker 2: for the positive and for the negative. We just don't know,
2:43
Speaker 2: and we're gonna have to see how things evolve and
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Speaker 2: we'll take it from there. Fair.
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Speaker 3: Yeah, I don't have much else, Dad, Again, actions speak
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Speaker 3: louder than words. We will see where things go. Worst
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Speaker 3: case scenarios were taken off the table on Wednesday, and
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Speaker 3: I'll take that as a positive. But we have to
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Speaker 3: wait and see.
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Speaker 2: Let's talk about this piece of the New York Times.
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Speaker 2: It's interesting and I want to get a sense of
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Speaker 2: whether it's real or not. It's titled blue collar Work
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Speaker 2: is Plateaued narrowing options for young workers, And what it's
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Speaker 2: talking about is that the number of job openings in
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Speaker 2: manufacturing jobs have gone from about nine hundred thousand several
3:30
Speaker 2: years ago down to around four hundred thousand today. And
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Speaker 2: I think that yes, if you look at that just
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Speaker 2: in the abstract, you say, okay, like, yeah, clearly there
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Speaker 2: aren't just many job openings there. But the other piece
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Speaker 2: that I'll point out is the period that this is
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Speaker 2: being compared to had the highest number of manufacturing job
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Speaker 2: openings in the last twenty five years, basically since the
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Speaker 2: Jolts Report was created.
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Speaker 3: It was also a market that had the most number
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Speaker 3: of general job openings.
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Speaker 2: Yes, it was the most like the most pro worker
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Speaker 2: environment that we have seen, I would argue just about
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Speaker 2: ever in as far as like negotiating power for employees
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Speaker 2: versus employers, and as we sit here right now, other
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Speaker 2: than a brief period in twenty eighteen, we actually have
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Speaker 2: the highest level of manufacturing job openings in the last
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Speaker 2: twenty five years. Still, if you exclude that twenty twenty
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Speaker 2: one to twenty twenty two period, which I think we
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Speaker 2: all can say was kind of an outlier that's probably
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Speaker 2: unlikely to ever be repeated.
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Speaker 3: Yeah, So other pieces are cited here. Jobs and sectors
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Speaker 3: include the trades such as manufacturing and construction have racked
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Speaker 3: up roughly one hundred and fifty thousand net losses on
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Speaker 3: an annual basis as of March, which I find interesting.
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Speaker 3: But you do have to ask how much of that
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Speaker 3: is because of a lack of interest in hiring versus
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Speaker 3: how much of it is deportations and just you know,
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Speaker 3: general concern among that industry that is pretty heavily performed
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Speaker 3: by either first generation Americans or those without legal work
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Speaker 3: permits in the United States. So I'm just not willing
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Speaker 3: to jump to the conclusion that there's suddenly a lack
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Speaker 3: of need for skilled trades workers.
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Speaker 2: No. I can tell you, like I talk to anyone,
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Speaker 2: you know, again, like my level of handiness around the house,
5:27
Speaker 2: it's a three. I can paint, I can put shelves in,
5:30
Speaker 2: I can do dry wall, you know, like I can
5:33
Speaker 2: do some stuff. I could put a toilet in. Anything
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Speaker 2: like Beyond that, I'm like, nope, Like it's it's gonna
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Speaker 2: cost me more like to fix the house once I
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Speaker 2: break it than if I do it. So I I used,
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Speaker 2: you know, contractors for a lot of stuff that you know,
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Speaker 2: most a lot of people would probably be like, oh,
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Speaker 2: like Chuck, you can do that. It's like, no, like,
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Speaker 2: I know my limits. I can do some stuff, but
5:55
Speaker 2: as soon as I start getting into like electrical or
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Speaker 2: anything where there's you know, so plumbing more complicated than
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Speaker 2: a toilet involved, no, like we're we are not touching
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Speaker 2: it because I'm gonna break something. And I've yet to
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Speaker 2: find someone in the last few years who's been like, yeah,
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Speaker 2: you know what, it's really easy for me to find
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Speaker 2: the labor that I want. True, you know, like you
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Speaker 2: talk to any of them, and it's.
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Speaker 3: That skilled handyman is not easy to come by.
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Speaker 2: It's just like it is hard to find good help
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Speaker 2: in the trade still. And there can be a number
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Speaker 2: of different reasons for this, but I think that that
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Speaker 2: is still the message that I am hearing is, yeah,
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Speaker 2: I've got plenty of work and I just can't get
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Speaker 2: through all of it because I don't have enough help. Yeah.
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Speaker 3: I'll even say, like, I can't think of a single
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Speaker 3: instance where somebody's told me about a renovation they're planning
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Speaker 3: and come back and said, yeah, and I.
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Speaker 2: Was pleasantly surprised by the price, right, Like, oh, the
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Speaker 2: price was low when they finished ahead of time, ahead
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Speaker 2: of schedule. Maybe that's just never the case, but it
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Speaker 2: seems especially true today that every time I've heard of
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Speaker 2: any major or minor project that somebody wants to do
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Speaker 2: to their home, the almost universal response I got is,
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Speaker 2: dear God, it was so.
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Speaker 3: Much more expensive than I was anticipating.
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Speaker 2: So I think that this is a piece that doesn't
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Speaker 2: really capture the realities on the ground when it comes
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Speaker 2: to I think what we're seeing in this space. There's
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Speaker 2: it's entirely possible that I'm completely wrong, Mike. What's the
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Speaker 2: text line? Uh?
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Speaker 3: Six one seven three six two thirteen eighty five. So
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Speaker 3: if you feel that Chuck is wrong, or more realistically,
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Speaker 3: if you have indications that the labor market for skill
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Speaker 3: the tradesman is is slowing in some meaningful way, let
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Speaker 3: me know. I guess the one piece of evidence Chruck
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Speaker 3: that I'm comfortable pointing to is home construction. Sure, that
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Speaker 3: is clear that that has dropped off, but again, we're
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Speaker 3: talking about dropping off from a really fast pace of
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Speaker 3: labor market activity across the board, which was twenty twenty
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Speaker 3: two and twenty twenty three, And so we're just normalizing
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Speaker 3: here a little bit.
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Speaker 2: It's possible, Yeah, it could be a normalization that we
8:06
Speaker 2: are seeing. Let's take a quick break. When we come back,
8:09
Speaker 2: we've got trivia and then we'll talk about why black Rock,
8:13
Speaker 2: what what?
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Speaker 3: And we're joined by Jeff Ostrowski from bank Rate. He's
8:17
Speaker 3: going to be talking to us about actually kind of
8:19
Speaker 3: this subject, the housing shortage in what some states are
8:22
Speaker 3: doing to try and address it. That's next year on
8:24
Speaker 3: the Financial Exchange.
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Speaker 2: All right.
8:44
Speaker 4: Time for trivia here on the Financial Exchange, And on
8:47
Speaker 4: this day. In twenty twelve, the Lion King became the
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Speaker 4: highest grossing Broadway show of all time. The Lion King
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Speaker 4: our trivia question today, which Broadway show held the highest
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9:07
Speaker 2: Once again?
9:07
Speaker 4: Which Broadway show held the highest grossing title before The
9:11
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9:37
Speaker 2: Blackrock they have a chief investment officer for international markets
9:45
Speaker 2: by the name of Helen Jewel and uh. She has
9:49
Speaker 2: a quote in this piece from Bloomberg that reaz As follows.
9:53
Speaker 2: If you look at earnings forecast at the moment for
9:55
Speaker 2: the year, they're well into double digits fifteen sixteen, seventeen,
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Speaker 2: eighteen percent, So there's a bit of head for earnings
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Speaker 2: to come down a little bit. Forecast for stable earnings
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Speaker 2: in the consumer sector hard to reconcile, particularly if you
10:06
Speaker 2: think about interest rates in the inflationary impact of what
10:09
Speaker 2: we've seen in the Middle East. So look, here's the
10:11
Speaker 2: deal facts ed earnings insight does indeed confirm the count
10:15
Speaker 2: of your twenty twenty six earnings growth in the S
10:17
Speaker 2: and P five hundred is estimated seventeen point one percent.
10:19
Speaker 2: Right now, I have no idea if that's going to
10:23
Speaker 2: be right or not. I am not a bottom up analyst.
10:25
Speaker 2: I don't look at every company in the s and
10:27
Speaker 2: P five hundred and back into what it means for
10:29
Speaker 2: S and P five hundred earnings growth, So I have
10:31
Speaker 2: no idea if that is high, low, or just right.
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Speaker 2: As such, I can't really evaluate, you know, the statements
10:38
Speaker 2: by Helen. But yeah, like, there's obviously room for earnings
10:43
Speaker 2: to get worse if problems in the Middle East continue.
10:47
Speaker 2: There's room for earnings to get better if AI proves
10:51
Speaker 2: that we have all kinds of you know, productivity gains
10:54
Speaker 2: and the Middle East situation calms down. And I'm not
10:59
Speaker 2: in any position to be able to say these earnings
11:01
Speaker 2: estimates are too high, too low, or just right.
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Speaker 3: Yeah. I mean, look, it's interesting to play the sector
11:07
Speaker 3: bisector game and wonder about US energy companies and how
11:12
Speaker 3: much their earnings growth could increase compared to major tech
11:15
Speaker 3: companies and you know, potential slowdowns there. But in the aggregate,
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Speaker 3: I guess the most I'd be willing to say is
11:25
Speaker 3: if we're looking at earnings estimates from a quarter ago
11:28
Speaker 3: and holding them steady now, I would think that there's
11:32
Speaker 3: more downside to those estimates than there is upside. Given
11:35
Speaker 3: the disruptions in the Middle East. Yeah, and that's as
11:38
Speaker 3: far as I'm willing to go.
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Speaker 2: What I do have. So I've got the earnings estimates
11:42
Speaker 2: for this year. If you want to go through them, Okay,
11:44
Speaker 2: hit me.
11:45
Speaker 3: Do you want to start from the top of the bottom,
11:48
Speaker 3: meaning best or worst?
11:50
Speaker 2: Yeah, let's go with the worst. Okay, real estate at
11:53
Speaker 2: the beginning of the year. The good news. This compares
11:55
Speaker 2: the two estimates on December thirty first, so we can
11:57
Speaker 2: see how they evolved. Real Estate previously estimates were at
12:01
Speaker 2: five point two percent growth this year, now four to three.
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Speaker 3: Makes sense.
12:04
Speaker 2: Sure consumer staples from seven two to six to one. Okay, finely, yeah,
12:10
Speaker 2: you know, fine.
12:11
Speaker 3: Slightly less cash to spend, I guess yeah, Sure healthcare
12:14
Speaker 3: from eight four to six nine. I don't know, I've
12:17
Speaker 3: got no insight, fine, whatever, Industrials from fifteen one to
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Speaker 3: eighty six. Totally get an.
12:21
Speaker 2: Input cost going through the roof there, gotcha. Consumer discretionaire
12:25
Speaker 2: from eleven five to nine to one. Me, okay, maybe
12:30
Speaker 2: can get worse, like yeah, like Sure financials nine four
12:33
Speaker 2: to nine four. That one, I'll flag eight. I'll put
12:36
Speaker 2: a big red flag on and that Hey, that is
12:38
Speaker 2: not pricing in any private credit problems, big potential for
12:41
Speaker 2: things to get worse. Sure Utilities from eleven five to
12:44
Speaker 2: twelve three. Basically, I think the read is utility input
12:50
Speaker 2: costs are gonna go higher, but they're gonna be able
12:51
Speaker 2: to pass those through in higher rates. Sure Communication Services
12:57
Speaker 2: fourteen three to thirteen six. Okay, so you're telling me
13:01
Speaker 2: that either communications service again, you're telling me that like
13:05
Speaker 2: Google and Meta are going to make a little less money,
13:09
Speaker 2: or Netflix will or Verizon r T Mobile, Like I
13:12
Speaker 2: remember here, what a mess of a sector. I don't
13:14
Speaker 2: know what to do with it.
13:15
Speaker 3: Yeah, remember here, folks that everybody thinks of communication service
13:18
Speaker 3: as being AT and T and Verizon. It's not. It's
13:21
Speaker 3: they are in there, but what actually matters are, Like
13:24
Speaker 3: Chuck said, Google's parent company Alphabet and Facebook's parent company Meta.
13:28
Speaker 2: Energy has gone from six point four percent earnings growth
13:30
Speaker 2: this year to nineteen one. Yep, not unexpected, highly volatile.
13:34
Speaker 2: I'll still push comes to shove. I'll pound the over
13:39
Speaker 2: on that.
13:40
Speaker 3: Okay.
13:42
Speaker 2: Let's see. Materials went from twenty point six to twenty
13:47
Speaker 2: nine to four. I this one's tough, just because I
13:51
Speaker 2: do wonder how much earnings growth is restricted by a
13:54
Speaker 2: lack of inputs for materials companies. So I don't know
13:58
Speaker 2: what to do with it, but it's gone up and
14:00
Speaker 2: it makes sense intuitively. Technology has gone from twenty eight
14:04
Speaker 2: percent earnings wrote to thirty seven. Okay, like people are
14:08
Speaker 2: gonna buy the AI chips like sure? Like it's tough
14:13
Speaker 2: to fight that estimate right now based on what we're seeing,
14:16
Speaker 2: because there still hasn't been a meaningful inflection downward in
14:19
Speaker 2: the number of chipsuls.
14:20
Speaker 3: Yeah, the narrative did change, I think compared to end
14:23
Speaker 3: of last year in terms of the disruption, this disruptive
14:29
Speaker 3: nature of the technology. So I think that nerve definitely
14:32
Speaker 3: changed from where we were in the fourth quarter of
14:35
Speaker 3: last year compared to end of February before the war
14:38
Speaker 3: broke out. It went from oh, look at these valuations
14:41
Speaker 3: to oh, maybe I don't care about the evaluations because
14:45
Speaker 3: look how many companies this is going to disrupt. Yeah,
14:47
Speaker 3: we'll see.
14:49
Speaker 2: So that's what we've got going on earnings wise. Let's
14:52
Speaker 2: see what else do we want to touch on here?
14:56
Speaker 3: Amazon US postal Service reached a new deal on delivery
15:00
Speaker 3: after a few years of talk. So if you're not familiar,
15:03
Speaker 3: you probably are familiar. But the US Postal Service delivers
15:07
Speaker 3: a I think the term is metric crap ton of
15:11
Speaker 3: Amazon packages for a last mile delivery here, and they
15:15
Speaker 3: went over the last few years kind of bid this
15:18
Speaker 3: stuff out. Amazon has been across the board bringing more
15:21
Speaker 3: of their end mile deliveries and overall deliveries in house,
15:26
Speaker 3: taking away business from well FedEx. I think took it
15:30
Speaker 3: away from Amazon, not the other way around, but UPS
15:34
Speaker 3: and the US Postal Service. They landed on a place
15:37
Speaker 3: here where Amazon would ship twenty percent fewer packages through
15:41
Speaker 3: the Postal Service, which you know there was a thread
15:43
Speaker 3: of a sixty percent reduction, So I guess that's better there.
15:48
Speaker 3: And I don't claim to understand the financial complexities of
15:52
Speaker 3: this and the US Postal Service, and you know how
15:56
Speaker 3: USPS makes money here. But the plain simple explanation is,
16:01
Speaker 3: if the government is going to mandate this government agency
16:04
Speaker 3: to deliver packages to every end address anyway, then I
16:08
Speaker 3: think they look at it as why not carry some
16:10
Speaker 3: Amazon packages with us while we go?
16:13
Speaker 2: Makes sense? Mike, I want to talk about this piece
16:16
Speaker 2: that Tucker put it in the stack yesterday and then
16:19
Speaker 2: it showed back up in the stack today, and so
16:22
Speaker 2: whenever Tuk me with something. Whenever Tucker puts something in
16:24
Speaker 2: the stack for a second day that we didn't cover,
16:27
Speaker 2: it's like, Okay, we need to cover it, or he's
16:29
Speaker 2: gonna just keep putting it in the stack. No, I
16:31
Speaker 2: give it two days. I know. But so it's this
16:35
Speaker 2: piece from the Wall Street Journal, the economic divide behind
16:38
Speaker 2: that McDonald's ceo viral video. First question that I asked
16:44
Speaker 2: when I saw the headline, What viral video were we
16:47
Speaker 2: talking about?
16:48
Speaker 3: We're talking about the serious Yeah, oh man, every ceo
16:52
Speaker 3: copied this one. It was where the marathon running McDonald's
16:56
Speaker 3: CEO filmed himself taking a bite of the new big, big,
17:02
Speaker 3: big archburger and took the wimpiest bite that I have.
17:09
Speaker 3: My daughters take bigger bites. Then, yeah, it was like
17:12
Speaker 3: a nibble the nine. So I know, he was mercilessly
17:17
Speaker 3: mocked all over the Internet. And every CEO of any
17:20
Speaker 3: food company, including the Costco CEO, film themselves taking giant
17:24
Speaker 3: bites out of their own food problems.
17:25
Speaker 4: Yeah, like Burger King, Wendy's, go down the list.
17:28
Speaker 2: All the CEOs were just a little preoccupied with, like
17:32
Speaker 2: the Middle East. So I honestly this.
17:34
Speaker 3: Was the only other NA no idea this happened, I had.
17:37
Speaker 2: I had no idea this happened. This was like I
17:40
Speaker 2: know it was on March fourth, which was again kind
17:43
Speaker 2: of right as it was hit in the fane. I
17:46
Speaker 2: had no idea this happened until I read this piece.
17:49
Speaker 3: It was pretty big news, which also tells.
17:51
Speaker 2: You, like my my news feeds on Twitter don't really
17:59
Speaker 2: you're al circles. You know.
18:01
Speaker 3: It's like you heard of K pop demon Hunters I have, okay.
18:04
Speaker 2: But not on my Twitter feed.
18:06
Speaker 3: Yeah, you know.
18:06
Speaker 2: It's like, so this caught me off guard. Like just
18:10
Speaker 2: seeing this, I was like, okay, Like Tucker put this in,
18:13
Speaker 2: like what's actually going on here? And then this this
18:17
Speaker 2: piece though, is not actually about the video in any way,
18:23
Speaker 2: shape or form. It's more K shaped economy crap.
18:25
Speaker 3: Yeah, basically making the argument that, you know, the new
18:31
Speaker 3: products from McDonald's are too expensive and that's why the
18:36
Speaker 3: guy's getting backlash. I'm not so sure.
18:39
Speaker 2: No, he's getting backlash because he looked like a whimp.
18:41
Speaker 3: Yeah, he looked like a little schmiebe and he looked
18:45
Speaker 3: like he looked like the CEO of a burger chain
18:48
Speaker 3: who doesn't like burgers.
18:50
Speaker 2: Because he probably doesn't. Well, that isn't that kind of
18:53
Speaker 2: to be fair? Isn't that a problem?
18:55
Speaker 3: Yeah? I think I think all in it probably is
18:58
Speaker 3: a problem. But he was brought in a very specific
19:00
Speaker 3: reason because there was some shenanigans going on at the
19:03
Speaker 3: executive level of McDonald's and this the kind of cleaned
19:06
Speaker 3: house and brought in a guy that was not part
19:08
Speaker 3: of the shenanigans, and said guy happens to be a
19:12
Speaker 3: really health conscious marathon runner by all accounts, and maybe
19:15
Speaker 3: doesn't like uh, maybe genuinely doesn't like McDonald's food as
19:19
Speaker 3: much as he should, which.
19:20
Speaker 2: Would seem to be a problem if you have a
19:22
Speaker 2: disdain for your own product. Let's take a quick break.
19:26
Speaker 2: When we come back, we've got the Trivia Answer and
19:29
Speaker 2: Wall Street.
19:30
Speaker 1: Watch, bringing the latest financial news straight to your radio.
19:38
Speaker 1: Every day. It's the Financial Exchange on the Financial Exchange
19:42
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19:45
Speaker 2: Tell you out full.
19:46
Speaker 1: Wool Street Watch treking the stocks, the dato and the
19:49
Speaker 1: headlines driving markets so far today right here on the
19:52
Speaker 1: Financial Exchange Radio Network.
19:54
Speaker 4: Well, markets have shifted and are now edging higher with
19:57
Speaker 4: wild jumping again today after Iron accused the US of
20:01
Speaker 4: breaching their ceasefire agreement. Investors also radying for tomorrow's consumer
20:05
Speaker 4: price index for the month of March. Right now, the
20:08
Speaker 4: Dow is up just over a tenth of percent, SMP
20:10
Speaker 4: five hundred is now up about a quarter percent, NASDAK
20:14
Speaker 4: of three tenths of a percent, Russell two thousand is flat,
20:17
Speaker 4: Tenure Treasure reeled flat as well at four point two
20:20
Speaker 4: nine to five percent, and oil jumping seven percent higher,
20:23
Speaker 4: trading at one hundred and one.
20:25
Speaker 1: Dollars a barrel.
20:26
Speaker 4: Shares an AI computing company, Core Weaver now edging higher
20:29
Speaker 4: after earlier losses after the company announced a twenty one
20:32
Speaker 4: billion dollar expanded infrastructure deal with Meta MetaStock is now
20:36
Speaker 4: climbing over two percent higher. Meanwhile, The Wall Street Journal
20:39
Speaker 4: reported that Disney is planning to eliminate as many as
20:43
Speaker 4: many as one thousand positions in the coming weeks and
20:46
Speaker 4: one of the first significant moves under new CEO Josh Deamero.
20:49
Speaker 4: Disney now off by one percent, and shares in Modello
20:53
Speaker 4: and Corona beer maker Constellation Brands are rising six percent
20:57
Speaker 4: despite the company withdrawing its guidance due to uncertainty and
21:02
Speaker 4: reported subdued demand. I'm Tucker Silva and that is Wall
21:06
Speaker 4: Street Watch.
21:07
Speaker 3: Joining us now is Jeff Ostrowski from Bankrey talking to
21:11
Speaker 3: us about the national housing shortage and what states are
21:15
Speaker 3: doing to try and address it. Jeff, thanks so much
21:18
Speaker 3: for joining us. Appreciate it.
21:19
Speaker 5: Hey, good morning, Thanks for having me.
21:21
Speaker 3: So, I guess first things first, are there some policies
21:24
Speaker 3: that a lot of states seem to be agreeing on
21:26
Speaker 3: when it comes to more dense housing construction At the moment,
21:31
Speaker 3: I seem to see a lot more states, for instance,
21:34
Speaker 3: accepting ad us accessory dwelling units to be built.
21:40
Speaker 5: Yeah, yeah, that's true. So California the biggest state that
21:44
Speaker 5: has legalized ADUs, and so now you drive around in
21:48
Speaker 5: neighborhoods in southern California and it's not unusual to see
21:51
Speaker 5: that somebody has built a one bedroom apartment in their backyard.
21:55
Speaker 5: So yeah, ADUs or accessory dwelling dwelling units also known
21:58
Speaker 5: as mother in law suites or any flats, So that
22:01
Speaker 5: those have become more common, and that's you know that
22:05
Speaker 5: that does provide some supply. It's probably not a total solution,
22:10
Speaker 5: and I don't know that anything is a total solution,
22:14
Speaker 5: but there is this growing realization that you know that
22:19
Speaker 5: the days the decades of building huge subdivisions filled with
22:23
Speaker 5: starter homes are gone, and that if we want our kids,
22:28
Speaker 5: if we want young adults to to be able to
22:30
Speaker 5: live somewhere, we're going to have to figure out how
22:31
Speaker 5: to build more housing.
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Speaker 3: What other solutions are being talked about. We're broadcasting from
22:37
Speaker 3: here in Massachusetts, where I know they have made a
22:41
Speaker 3: to us more accessible. I know that there has been
22:44
Speaker 3: a law around building more dense construction around public transit.
22:49
Speaker 3: At the same time, there is a bill making its
22:53
Speaker 3: way to the House for rent control, and so I
22:56
Speaker 3: think clearly housing affordability is on folks' minds. But I'm
23:00
Speaker 3: wondering is there a way that Blue states versus Red
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Speaker 3: states are addressing it or is it not really that
23:05
Speaker 3: type of political issue today?
23:08
Speaker 5: Well, it is that you just mentioned one of those
23:10
Speaker 5: ideological flashpoints, which is rent control. I don't think there's
23:15
Speaker 5: a single red state that has rent control measures. There
23:19
Speaker 5: are a lot of Blue states that do, notably in
23:21
Speaker 5: New York and California, although the rent control seemed to
23:25
Speaker 5: happen more at the city level as opposed to the
23:27
Speaker 5: state wide level. But there's one interesting possible reform coming
23:34
Speaker 5: to Massachusetts. This is the move called legalized starter Homes,
23:38
Speaker 5: which is a ballot question proposed for later this year
23:42
Speaker 5: that would allow or essentially require municipalities to approve single
23:48
Speaker 5: family homes on much smaller lots. The idea would be
23:51
Speaker 5: that if this were to go through, the municipalities would
23:54
Speaker 5: be compelled to allow builders to build or to buy
24:00
Speaker 5: single family houses on lots as small as five thousand
24:03
Speaker 5: square feet. And just just for a perspective, it's you know,
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Speaker 5: some suburbs will have quarter acre you know, minimum lot size.
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Speaker 5: The quarter acre is just over ten thousand square feet,
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Speaker 5: so this would be like, you know, half the size,
24:18
Speaker 5: less than half the size of a of a standard
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Speaker 5: quarter acre lot.
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Speaker 3: Florida has obviously seen massive migration over the course of
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Speaker 3: the last five years during COVID, big beneficiary of migration
24:28
Speaker 3: down to that area. How are they addressing, you know,
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Speaker 3: in other real housing shortage there.
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Speaker 5: Yeah, so Florida definitely is not doing rent control as
24:38
Speaker 5: a red state. That's that's not on the table. If
24:41
Speaker 5: Florida has done something different. It's a state law called
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Speaker 5: live Local, and this allows developers of apartments to get
24:53
Speaker 5: a lot of permissions they wouldn't otherwise get so they
24:55
Speaker 5: can build more density, they can build higher, they can
24:58
Speaker 5: can get easier p without a whole lot of pushback
25:02
Speaker 5: from from the municipality, at least in theory. And the
25:06
Speaker 5: trade off is that some of those units have to
25:09
Speaker 5: be set aside for people making about the median income
25:14
Speaker 5: of the local area.
25:16
Speaker 2: And so that uh.
25:17
Speaker 5: There have been a few projects built under Florida's Live
25:20
Speaker 5: Local law. There have been many more proposed, but either
25:25
Speaker 5: not out of the ground because they just haven't started yet,
25:27
Speaker 5: or not out of the ground because the local municipality
25:29
Speaker 5: is suing and saying, hey, wait a minute, this is
25:33
Speaker 5: way too much for this area. So I the the
25:39
Speaker 5: acronym is Nimbiaism, not in my backyard, and that that's
25:42
Speaker 5: been sort of an ongoing drag on housing supply, and
25:45
Speaker 5: so that this is uh, you know, this live local
25:48
Speaker 5: law was trying to be an end run around Nimbiaism,
25:52
Speaker 5: but the you know, the Nimbias that still can have
25:54
Speaker 5: their day in court. So there's I think, as I
25:57
Speaker 5: mentioned earlier, there's no perfect or easy solution. So we've
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Speaker 5: local is adding some housing inventory in Florida, but it's
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Speaker 5: I think it's proponents wanted to add a lot more.
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Speaker 3: Jeff Ostrowski's from Bankreat joined us today talk about the
26:11
Speaker 3: housing shortage and how different states are addressing it and
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Speaker 3: trying to push back against the nimbiism that has partially
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Speaker 3: driven prices so much higher. Jeff, thanks so much for
26:20
Speaker 3: joining us. Appreciate it all right, Thanks a lot much.
26:22
Speaker 5: Appreciate it all right.
26:24
Speaker 4: We asked you the trivia question in the previous segment,
26:27
Speaker 4: which Broadway show held the highest grossing title before the
26:32
Speaker 4: Lion King surpassed it? Well, that would be The Phantom
26:34
Speaker 4: of the Opera. Neil and Madison, Connecticut is our winner
26:37
Speaker 4: today taking on the Financial Exchange Show t shirt. Congrats
26:40
Speaker 4: to Neil and we played trivia every day here on
26:43
Speaker 4: the Financial Exchange. See complete contest rules at Financial Exchange
26:47
Speaker 4: Show dot com.
26:49
Speaker 2: Let's see, Mike, do we want to talk about IRA
26:53
Speaker 2: contributions for twenty twenty five.
26:55
Speaker 3: Let's do a nuities real quick if you don't mind.
26:58
Speaker 3: So we've talked about four K changes and what might
27:02
Speaker 3: be coming there, and you know, private credit could be
27:05
Speaker 3: one of those things, but more close on the horizon
27:09
Speaker 3: seems to be annuities in your four oh one K,
27:11
Speaker 3: and I think this more than any other area is
27:17
Speaker 3: where implementation is going to be critical, because there's a
27:20
Speaker 3: few different ideas that are being talked about. One is
27:23
Speaker 3: a pretty straightforward process where as part of for instance,
27:28
Speaker 3: a default election to a target date fund, they would
27:32
Speaker 3: portion some of that into a guaranteed for life pension
27:37
Speaker 3: like payment, and so it would effectively allow you to
27:40
Speaker 3: have that within the four oh one K plan. Still
27:43
Speaker 3: have a lot of questions about practically how they would
27:45
Speaker 3: work with job switching and things, but I can at
27:47
Speaker 3: least understand where people are coming from. On the other hand,
27:51
Speaker 3: there is this discussion of, hey, just put a bunch
27:54
Speaker 3: of stuff out there and let people choose, and boy,
27:58
Speaker 3: that's already tough. With mutual I am here to say
28:01
Speaker 3: that I think it's going to be darn near impossible
28:03
Speaker 3: for the average consumer to navigate that when it comes
28:06
Speaker 3: to annuities.
28:07
Speaker 2: What makes it that much tougher in your opinion, so the.
28:12
Speaker 3: For those not familiar, annuities come in so many different
28:17
Speaker 3: flavors and with so many different complicated features and costs
28:23
Speaker 3: that even for like go talk to people that you
28:26
Speaker 3: consider a financial expert and ask them to explain to
28:30
Speaker 3: you the difference between a fixed indexed variable and immediate annuity,
28:34
Speaker 3: and they'll ask for probably an hour of your time
28:36
Speaker 3: if they can't explain the difference. Yes, it just takes
28:39
Speaker 3: that long to fully understand it. And that's from somebody
28:42
Speaker 3: that lives and breathes it. And so these things get
28:46
Speaker 3: so incredibly complicated that when put in as just a
28:50
Speaker 3: menu option of selections, I have some pretty big concerns.
28:54
Speaker 3: There already are annuities in some types of retirement plans,
28:58
Speaker 3: and I've seen the downsides to them firsthand when people
29:02
Speaker 3: just don't really understand what it is they have, and
29:04
Speaker 3: oh lo and behold, I can't get out of this
29:06
Speaker 3: thing for a decade now. If you have questions about
29:11
Speaker 3: insurance products and annuities, specifically, how do they work, What
29:15
Speaker 3: am I being sold? What exactly do I have here?
29:19
Speaker 3: And is it actually for me? Armstrong Advisor Group does
29:23
Speaker 3: not do a lot in this space, and specifically there
29:26
Speaker 3: are certain types of annuities that we actually can't and
29:29
Speaker 3: don't get involved with, but we have the knowledge and
29:32
Speaker 3: can talk to you about what the universe looks like
29:35
Speaker 3: these days for all sorts of insurance products, because guess what,
29:39
Speaker 3: they are always extremely complicated, and it's not to say
29:43
Speaker 3: that they are always bad, but it is to say
29:45
Speaker 3: that they're complicated, and you have to fully understand not
29:47
Speaker 3: only what you might be considering, but what you already have.
29:51
Speaker 3: If you have those questions, give us a ring eight
29:52
Speaker 3: hundred three nine three four zero zero one. Again, that's
29:56
Speaker 3: the number four the Armstrong Advisory Group eight hundred three
29:59
Speaker 3: nine three four zero zero one.
30:01
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
30:03
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30:09
Speaker 1: your own financial tax into state planning advisors before making
30:12
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30:15
Speaker 1: advisory services from FED Decisions to market moves. Watch the
30:19
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30:30
Speaker 4: Get your questions in for the Moneymatters mail bag tomorrow
30:34
Speaker 4: around this time on the show. If you got questions
30:37
Speaker 4: for a Chuck and Mike, just shoot us a voicemail
30:40
Speaker 4: to uh three three nine three nine nine four three
30:44
Speaker 4: three three. Once again, that number for the Money Matters
30:48
Speaker 4: mail bag is three three nine three nine nine four
30:51
Speaker 4: three three three, or you can email the Moneymatter's mail
30:57
Speaker 4: bag to TFE Show at gmail dot com. Again, then
31:00
Speaker 4: email is TFE Show at gmail dot com, and we
31:03
Speaker 4: may use it on the show.
31:05
Speaker 2: Mike, can I double dip for stack Rulette? To kick
31:08
Speaker 2: things off, I want to start first with this piece
31:12
Speaker 2: on Meta and their new AI model that they announced yesterday.
31:17
Speaker 2: Did you happen to catch the name of it?
31:19
Speaker 5: Uh?
31:20
Speaker 3: I did, and I already forgot it.
31:23
Speaker 2: It's called muse Spark, which is a bad name in
31:26
Speaker 2: and of itself, but now I want you to say
31:29
Speaker 2: it with the corporate name in front.
31:31
Speaker 3: Of it, as much's Mark Zuckerberg Meta or Facebook Metta
31:36
Speaker 3: metamuse Spark.
31:38
Speaker 2: They named the thing Metamucal.
31:41
Speaker 3: Yeah, I kind of did.
31:42
Speaker 2: What a bunch, Like, are you kidding me? You're trying
31:46
Speaker 2: to be like, oh, we're cutting edge and you are
31:49
Speaker 2: literally half a syllable away from naming your AI model
31:53
Speaker 2: Meta Musal.
31:55
Speaker 4: Be sure to catch your fiber.
31:59
Speaker 2: I mean, I'm I'm sorry, but you just can't do that. Now.
32:04
Speaker 2: Apparently the model's fine and this and that, but again,
32:07
Speaker 2: like models that are fine are commodities these days, and
32:11
Speaker 2: this continues to be something where I'm like, Okay, you
32:13
Speaker 2: guys keep saying you're gonna spend more on data centers.
32:15
Speaker 2: How are you going to actually make the money on this?
32:17
Speaker 3: Does it really seem to anybody else that since Cheryl
32:20
Speaker 3: Sandberg is Cheryl Sandberg, Yeah, since she left, there just
32:24
Speaker 3: don't seem to be any human adults left at that company.
32:29
Speaker 2: Metamuse spark Wow.
32:31
Speaker 3: I mean again, Zuck now is an adult. I just
32:33
Speaker 3: don't know that he's human.
32:35
Speaker 2: It's fair. Well, the new version of him is an upgrade.
32:39
Speaker 3: Yeah.
32:40
Speaker 2: Also, I want to talk about this Wall Street Journal
32:42
Speaker 2: exclusive that Tucker just pointed me towards. This just came
32:46
Speaker 2: out at ten thirty eight this morning. Justice Department opens
32:50
Speaker 2: investigation into NFL.
32:53
Speaker 3: We talked about this on the show earlier this week.
32:55
Speaker 3: I assume has to do with TV contracts.
32:57
Speaker 2: It does, And basically it's saying, you know, look, we
33:02
Speaker 2: don't have any specifics yet, but the Justice Department is
33:04
Speaker 2: opened an investigation into the NFL and whether it is
33:07
Speaker 2: engaged in anti competitive tactics that harm consumers, according to
33:10
Speaker 2: people familiar with the situation. Uh and specifically you know
33:15
Speaker 2: talking about how you know, expensive it is to get
33:18
Speaker 2: all of the platforms and this and that and it's
33:23
Speaker 2: hard to watch and blah blah blah, you got to
33:25
Speaker 2: use all these different apps, YadA YadA. So two things
33:28
Speaker 2: can be true at the same time. Number One, I
33:32
Speaker 2: freaking hate how hard it is to watch sports these days.
33:35
Speaker 2: If you want to watch anything, whether it's football, baseball, basketball, hockey,
33:40
Speaker 2: you've got to have six different apps on fourteen different
33:43
Speaker 2: TVs today, golf today, just golf today. Yes, what is it?
33:47
Speaker 2: You need like three apps to watch the.
33:49
Speaker 4: Master now and Amazon is airing it now, but then
33:51
Speaker 4: you got to go to Masters dot Com before three
33:54
Speaker 4: o'clock and then ESPN picks it up apparently ESPN plus
33:57
Speaker 4: this morning.
33:57
Speaker 2: Yes, I don't know. It's a mass so it's true.
34:00
Speaker 2: At the same time, it really sucks trying to figure
34:03
Speaker 2: out where all this stuff is and actually being able
34:07
Speaker 2: to view it. It's also not worthy of Congress's time,
34:12
Speaker 2: so I don't think so either. But what I was
34:16
Speaker 2: pointed to is the fact that the NFL was previously
34:19
Speaker 2: granted basically an anti trust exemption.
34:22
Speaker 3: Yes for the way that they negotiate.
34:24
Speaker 2: And.
34:26
Speaker 3: I mean, given that Congress had to step in initially,
34:29
Speaker 3: you don't think that maybe that should be looked at
34:31
Speaker 3: occasionally which part the anti trust exemption that was provided
34:35
Speaker 3: to them, Like, if.
34:38
Speaker 2: They are.
34:40
Speaker 3: Taking steps that you can point to that harm consumers,
34:43
Speaker 3: I'm with you, maybe it's not worth the time, but
34:46
Speaker 3: you exempted them from a bunch of laws in the
34:48
Speaker 3: first place, and if they are changing their practices that
34:51
Speaker 3: I don't have a lot of patience for that.
34:54
Speaker 2: I guess my, Like, what consumer harm is there? Like,
34:57
Speaker 2: you don't, it's the fell Yeah, you know, like it's.
35:03
Speaker 3: It's it's enterty, you know, it's I just I.
35:10
Speaker 2: Can't really get there. And ultimately, here's the other piece
35:14
Speaker 2: that I'll take you towards. Let's say there were no
35:18
Speaker 2: anti trust exemption for the NFL, which the way it
35:20
Speaker 2: works is all of the teams can act as one
35:24
Speaker 2: organization in order to negotiate rights deals that that's that's
35:30
Speaker 2: basically what the exemption allows for, and that they can
35:33
Speaker 2: share the revenue equally. It has nothing to do with
35:37
Speaker 2: labor between players and in the league. It has nothing
35:40
Speaker 2: to do with uh any franchise relocations, nothing to do
35:44
Speaker 2: with merchandise, ticket sales, or anything like that. The only
35:48
Speaker 2: thing that it's there for is it to try to
35:52
Speaker 2: allow for the negotiation of rights contracts across different platforms.
35:59
Speaker 2: Let's envision a world in which all thirty two teams say, okay, great,
36:02
Speaker 2: we have to negotiate these on our own. Do you
36:06
Speaker 2: think it's gonna be easier or harder to find those
36:09
Speaker 2: thirty two teams on TV? Yeah?
36:11
Speaker 3: Probably tough.
36:13
Speaker 2: Like that's where it's. It's not gonna make it easier.
36:16
Speaker 2: They're all just gonna be like, you know, what are
36:20
Speaker 2: you gonna do? They're all just gonna negotiate the same deal. No,
36:23
Speaker 2: you're gonna get you know, the Packers are gonna be like, well,
36:27
Speaker 2: we're owned by our season ticket holders, and so we
36:32
Speaker 2: think that the best thing is actually no TV, except
36:35
Speaker 2: for we're gonna we're gonna broadcast the games ourselves and
36:38
Speaker 2: you've got to pay us. And then the Jets are
36:42
Speaker 2: gonna be like, well, if you're outside the New York market,
36:45
Speaker 2: here's what you pay to watch Jets games, cause you know,
36:49
Speaker 2: we're the big Apple. And then the Jaguars are gonna
36:52
Speaker 2: be like, no one wants to watch our games, so
36:54
Speaker 2: we're gonna pay you to watch them. We're gonna pay
36:56
Speaker 2: you to watch our games. Like it's it's just something
37:00
Speaker 2: where it's not gonna make it easier in my opinion. Yeah, yeah, fair,
37:04
Speaker 2: And it's like broad scheme of things as annoying as
37:08
Speaker 2: it is trying to figure out where to watch sports.
37:10
Speaker 2: It's not in my top thousand list of problems that
37:14
Speaker 2: Congress should be dealing with.
37:15
Speaker 3: That part's fair. Yes, you know, like, go social Security.
37:20
Speaker 2: Go figure out social Security before you start telling me
37:23
Speaker 2: what channel the NFL is gonna be on.
37:25
Speaker 3: Yeah, we can agree on that.
37:27
Speaker 2: Taking a look at markets, we've got a little bit
37:29
Speaker 2: of a rally taking hold as markets now up about
37:32
Speaker 2: a third to way half percent over the course of
37:35
Speaker 2: the morning. We'll see where things go over the remainder
37:38
Speaker 2: of the day. We're gonna take a quick break for
37:40
Speaker 2: the rest of that day, but we're back here tomorrow
37:43
Speaker 2: and we'll finish up the week then