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How 3% inflation became the new normal · The Financial Exchange Show

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Speaker 2: we had a nice rally to start the day off. Today,
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Speaker 2: SMP was up as many as eighty two points. It's
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Speaker 2: about one to a third percent. So again it's it's
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Speaker 2: tech that is kind of in the driver's seat here
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Speaker 2: And so that is what is going on in equity markets,
2:26
Speaker 2: in the bond market to the ten year Treasury up
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Speaker 2: one point seven basis points to four point one one percent.
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Speaker 2: We got the US dollar index up point one percent
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Speaker 2: to ninety nine point five seven and gold on the
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Speaker 2: back of this. We can talk about this later if
2:42
Speaker 2: we if we want to, gold up about two percent,
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Speaker 2: eighty two dollars and thirty cents to four thousand, ninety
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Speaker 2: two and ten cents, and we got crude oil down
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Speaker 2: sixteen cents a barrel to fifty nine to fifty nine,
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Speaker 2: the triple A national average for gas prices up one
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Speaker 2: tenth of a cent overnight to three oh seven and
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Speaker 2: one tenth. Paul, we got a piece here today. It's
3:03
Speaker 2: from Barons. It's titled how three percent inflation became the
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Speaker 2: new normal? And I think that the well outlined to
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Speaker 2: me what this piece says.
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Speaker 3: Basically, what this piece covers is the FED has a
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Speaker 3: long term target for inflation to sit at two percent.
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Speaker 3: Many listeners out there will recall, back in twenty twenty two,
3:25
Speaker 3: we peaked out as high as nine percent on the
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Speaker 3: inflationary front. Since then, there's been tremendous progress made to
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Speaker 3: get us to the three percent that we sit at today. However,
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Speaker 3: we have plateaued at that three percent level for quite
3:36
Speaker 3: a period of time here, and there hasn't been meaningful
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Speaker 3: progress towards driving it down to two percent. And what
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Speaker 3: this piece cites is many expectations for inflation moving forward,
3:46
Speaker 3: whether it be from the Federal Open Market Committee or
3:49
Speaker 3: others who sort of do projections as to where they
3:52
Speaker 3: think inflation is going to go. Surveys seem to be
3:55
Speaker 3: indicating that we're moving further and further away from that
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Speaker 3: two percent anchor target that the FED has has targeted.
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Speaker 3: And really where this is interesting to me, and I'm
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Speaker 3: sure you have commentary on it two is you know,
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Speaker 3: this is this is a target that the FED has.
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Speaker 3: It's not ironclad that it has to be two percent,
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Speaker 3: but it's something they're shooting for. And what I continually
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Speaker 3: debate is whether or not it has to be at
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Speaker 3: this level. You know, is it problematic for it to
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Speaker 3: be at three percent? I think you and I can
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Speaker 3: kind of debate the You can have really two sides
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Speaker 3: to the argument to that. Some people could say that, hey,
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Speaker 3: if it is anchored in at three percent, then you
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Speaker 3: can kind of create this spiral impact where if I
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Speaker 3: think prices are going to rise by three percent every year,
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Speaker 3: I'm going to turn to my employer more quickly and
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Speaker 3: more readily and say, gee, if prices are going to
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Speaker 3: continue to go up, you need to pay me more.
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Speaker 3: And as a result of that, if the employer, you know,
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Speaker 3: follows that move lockstep, they have to increase prices, and
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Speaker 3: so there's this psychological impact it can have that if
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Speaker 3: it is anchored at three percent, that's problematic because it
4:59
Speaker 3: leads to that spo On the other end, you could
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Speaker 3: kind of say that, you know, three percent still allows
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Speaker 3: some flexibility for the Federal Reserve to move interest rates
5:09
Speaker 3: around a little bit more if you're sitting at that level, sure,
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Speaker 3: and that it could kind of be eroded away over
5:15
Speaker 3: time some of the debt that people have if inflation
5:17
Speaker 3: is march at the level. So I'm always interested and
5:20
Speaker 3: I don't know where you sit on that side of
5:22
Speaker 3: the argument, but it's it's something that I don't think
5:24
Speaker 3: you can have a clear cut winner on but there's
5:26
Speaker 3: differing views out there.
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Speaker 2: Yeah, and and Mark Fandetti, it was a great summary
5:30
Speaker 2: there by the way Paul and Mark Fandetti has talked
5:32
Speaker 2: about this and that if you look at a lot
5:33
Speaker 2: of the academic literature on this failure, there's no thank you,
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Speaker 2: there's no consensus as to like, this is the right
5:42
Speaker 2: rate of inflation. Academics are generally, hey, you can be
5:46
Speaker 2: anywhere from like one to five percent inflation, and as
5:51
Speaker 2: long as you're again kind of anchored there, there's beliefs
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Speaker 2: that you can be okay in those areas. I generally
5:57
Speaker 2: tend to err on the lower side of things, just
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Speaker 2: because people really just don't like inflation. Like even if
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Speaker 2: you make four percent more this year and your stuff
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Speaker 2: costs four percent more, you're like, oh, I'm making more,
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Speaker 2: but like it feels bad high.
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Speaker 4: Or on the price is going up.
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Speaker 2: Correct, So I think I generally err towards Yeah, like
6:20
Speaker 2: I'd prefer lower, all else being equal. But we've had
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Speaker 2: good economies with three percent inflation, we've had bad ones
6:27
Speaker 2: with one. There's nothing to say this is the right
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Speaker 2: inflation rate. And remember when we're talking about inflation, folks,
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Speaker 2: what we talk about is the rate of inflation. We're
6:37
Speaker 2: not talking about what prices are because prices basically never
6:40
Speaker 2: go down like in the aggregate. You never see that. Yes,
6:43
Speaker 2: you can see the price of eggs go down, but
6:45
Speaker 2: it happens as the price of beef's going up and
6:47
Speaker 2: so your grocery cost. You know, this is just how
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Speaker 2: it ends up working. So I don't believe that there's
6:54
Speaker 2: any right rate of inflation, because I think it would
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Speaker 2: be pretty I'd have to have an awful lot of
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Speaker 2: hubris to be like, thou shalt run at two percent inflation?
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Speaker 2: Like like, I don't think any human being can say
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Speaker 2: this is the right rate of inflation exactly.
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Speaker 3: The key word that you mentioned is anchored. You know,
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Speaker 3: it has to be at a steady level inflation. Whether
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Speaker 3: it's four percent, you could maybe argue it's too high,
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Speaker 3: but whether it's two percent or three percent, as long
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Speaker 3: as it's marching along on that trend steadily, then it
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Speaker 3: makes for a more palatable economic environment. If it starts
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Speaker 3: swinging between one and four, that's when you're gonna have problems,
7:35
Speaker 3: and it's going to be more challenging to operate.
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Speaker 2: And those problems, by the way, are numerous. Number One,
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Speaker 2: if you have inflation that's consistently moving, you know, having
7:46
Speaker 2: large swings, your banking sector is going to say, hey,
7:49
Speaker 2: because we don't know where inflation is going to be
7:51
Speaker 2: in the future, we need to charge you higher interest
7:54
Speaker 2: rates in order to give us more cushion. Yep. So
7:58
Speaker 2: you see stuff like that develop. You see businesses saying, hey,
8:01
Speaker 2: we don't know what the cost of our goods are
8:04
Speaker 2: going to be, of our inputs are going to be
8:06
Speaker 2: next year, so we're going to raise our prices preemptively.
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Speaker 2: And this is how you get more consistent higher inflation
8:12
Speaker 2: and higher prices. So those are the things that you
8:15
Speaker 2: worry about then. And the other place that I worry
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Speaker 2: about it is in the context of we're not very
8:23
Speaker 2: responsible when it comes to anything fiscal nationally these days
8:30
Speaker 2: haven't been for about twenty five years.
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Speaker 4: You know, this.
8:33
Speaker 2: SPAN's one, two, three, four, This spans five different presidencies
8:38
Speaker 2: from both parties. You got to go back to again
8:41
Speaker 2: the nineteen eighties and nineteen nineties to find the last
8:43
Speaker 2: time that we cared about this stuff. Because the problem
8:46
Speaker 2: is if you have three percent inflation at a time
8:50
Speaker 2: where you don't really seem to care what your deficits are,
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Speaker 2: and you're willing to push as much spending as possible
8:55
Speaker 2: to juice the economy, which is pretty much what we've
8:57
Speaker 2: been doing for twenty five years now. It creates the
9:01
Speaker 2: conditions for that inflation to move higher and become more
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Speaker 2: entrenched at a higher level, and that's that's potentially dangerous.
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Speaker 2: So three percent inflation not necessarily bad. It's again, I'm
9:14
Speaker 2: not saying this to let the Fed off the hook
9:17
Speaker 2: or anything, but the late nineteen nineties, you know, you
9:20
Speaker 2: had three percent inflation through the nineteen nineties. I think
9:24
Speaker 2: a lot of us will look back and be like, yeah,
9:25
Speaker 2: it's a pretty good, darn good period. You know, things
9:29
Speaker 2: were pretty okay then. Granted, then you had you know,
9:31
Speaker 2: the tech bubble bursting and you're like, okay, this is
9:33
Speaker 2: not okay. And then the housing bubble burst and you're like,
9:35
Speaker 2: this still is okay. And then you had you know,
9:38
Speaker 2: high inflation and shutdowns and this and that, and you're like,
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Speaker 2: this still is okay. But for a little brief period
9:43
Speaker 2: in time, you're like, yeah, this is pretty cool. Take
9:46
Speaker 2: a quick break when we come back, Let's do a
9:49
Speaker 2: little bit of trivia and then we'll talk about meta
9:51
Speaker 2: how much of their revenue comes from ads for fake
9:55
Speaker 2: websites that sell you fraudulent products.
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12:10
Speaker 2: Meta the company behind such blockbuster products as Facebook and
12:16
Speaker 2: Instagram in fact, that they used to be called Facebook.
12:19
Speaker 4: Didn't they.
12:20
Speaker 2: Yes, what a odd concept for them to be named
12:23
Speaker 2: after something that people actually like think about instead of
12:26
Speaker 2: the metaverse, which no one thinks about. Uh So Reuters
12:31
Speaker 2: found some internal or not found I guess somehow they
12:34
Speaker 2: received a report that Meta published internally that they project
12:42
Speaker 2: ten percent of their twenty twenty four revenue would come
12:45
Speaker 2: from ads from scams and banned goods, which seems bad specifically,
12:52
Speaker 2: and like the numbers are.
12:54
Speaker 4: Just mind boggling.
12:55
Speaker 2: Meta estimates that its users are shown fifteen billion scam
13:00
Speaker 2: ads per day. Now, these can take a couple different forms.
13:04
Speaker 2: The two that are most common are well, there's there's
13:07
Speaker 2: really three that are most common. The first is hey
13:10
Speaker 2: company that says that they are selling products from you know,
13:15
Speaker 2: product X, Y, and Z, and instead they're selling a
13:18
Speaker 2: cheap knockoff or something like that. Number two is companies
13:21
Speaker 2: that claim to be company X, but then you get
13:24
Speaker 2: redirected to a website that looks just like company XES,
13:28
Speaker 2: and then you enter your credit card information. They don't
13:30
Speaker 2: actually take your they don't actually send you anything, and
13:32
Speaker 2: they steal your credit card information, which is kind of bad.
13:36
Speaker 2: And the third one is, hey, we're selling this product
13:38
Speaker 2: and it's not allowed because of you know, safety concerns
13:42
Speaker 2: or a recall or this and that, and they take
13:43
Speaker 2: your money and send you the product that could hurt you,
13:46
Speaker 2: which is bad. So Meta estimates that again ten percent
13:51
Speaker 2: of their ads that they serve are scam ads, and
13:54
Speaker 2: the reason why is that they don't go through and
13:57
Speaker 2: manually deal with this. Instead, they have and basically a
14:01
Speaker 2: software program that tries to identify if an AD is
14:05
Speaker 2: fraudulent or not, and only takes the AD down in
14:09
Speaker 2: the event that there is a ninety five percent probability
14:13
Speaker 2: or higher that the AD is fraudulent. Now, I've actually
14:17
Speaker 2: been on the bad side of this, believe it or not.
14:20
Speaker 2: Really it was I can't remember if it was an
14:23
Speaker 2: AD or just a post, but this was like ten
14:27
Speaker 2: twelve years ago something like that. I can't even remember
14:30
Speaker 2: exactly when, but it was specifically something about iras, which,
14:37
Speaker 2: you know, being someone who's you know, interested and involved
14:40
Speaker 2: in finance, like iras come up quite often. Sure Meta
14:44
Speaker 2: decided that they were going to take either the AD
14:46
Speaker 2: or the post down. Again, I can't remember what it
14:48
Speaker 2: was because they thought it was a reference to a
14:52
Speaker 2: different IRA Oh sure, you know the one one, Yes,
14:56
Speaker 2: the Irish one, And so they were like, no, you
14:59
Speaker 2: can't post this because it's like terrorist insightful content. And
15:05
Speaker 2: I'm like, guys, like, did you actually read this? It
15:08
Speaker 2: never ended up actually being allowed to be Like I
15:09
Speaker 2: went back and forth with like an algorithm or some
15:11
Speaker 2: fake human or something forever and basically like couldn't make
15:15
Speaker 2: heads or tails of this.
15:16
Speaker 4: Wow.
15:17
Speaker 2: So like I've been on the other side where it's like, oh,
15:19
Speaker 2: like they're they're.
15:20
Speaker 4: Two or hypervisuals and stuff.
15:22
Speaker 2: But the idea that Met is just like cool with
15:25
Speaker 2: this and no one cares about it is kind of wild.
15:29
Speaker 3: Well, not only that they up the price for those
15:32
Speaker 3: scam ads so that they theoretically make more money on
15:36
Speaker 3: those ads, but also their caveat is that's to act
15:40
Speaker 3: as a deterrent from them being posted. But oh, by
15:42
Speaker 3: the way, they're charging a higher rate for those type
15:45
Speaker 3: of ads than a normal ad would be charged.
15:48
Speaker 2: Meta spokesman Andy Stone, so the document seen by Ruters
15:51
Speaker 2: quote present a selective view that distorts Meta's approach to
15:55
Speaker 2: fraud and scams. The company's internal estimate that it would
15:58
Speaker 2: earn ten point one percent it's twenty twenty four. Revenue
16:01
Speaker 2: from scams and other prohibited ads was rough and overly inclusive,
16:05
Speaker 2: and the company had later determined the true number was
16:07
Speaker 2: lower because the estimates included many legitimate ads as well,
16:10
Speaker 2: but declined to provide an updated figure. Okay, so again,
16:16
Speaker 2: these are the people that are trying to become our
16:20
Speaker 2: new AI overlords, and they're cool with serving up. Again,
16:26
Speaker 2: even if it's not fifteen billion, let's say that's it's
16:28
Speaker 2: five billion a day fraudulent ads, they're cool with that
16:32
Speaker 2: because it helps their bottom line. That sucks.
16:38
Speaker 4: Like that. That's hard to put a positive spin.
16:40
Speaker 2: It's just not and no one seems to care about this.
16:44
Speaker 2: There's no congressional hearings into this, there's no new legislation
16:47
Speaker 2: to penalize companies that do this stuff.
16:52
Speaker 3: It's just because you know that Meta could have the
16:54
Speaker 3: technology in place to be more aggressive with or they
16:57
Speaker 3: could peel back their percentage from nine five to eighty
17:01
Speaker 3: five and all of a sudden, that would weed out
17:02
Speaker 3: a significant amount of those You would think.
17:04
Speaker 2: These are not dumb people. Yeah, you know, like they're
17:07
Speaker 2: here's the thing about Meta. I might not like them,
17:10
Speaker 2: but they're really smart Yeah, they're just choosing to use
17:13
Speaker 2: their smartness to serve fifteen billion scam ads a day
17:16
Speaker 2: because it benefits their bottom line. I understand the financial
17:19
Speaker 2: incentive for them. Number go up, got it. It just
17:23
Speaker 2: kind of sucks for the rest of us that have
17:25
Speaker 2: to be served the scam ads, thinking that we're buying
17:28
Speaker 2: McCormick spices when in fact we're being redirected to like
17:33
Speaker 2: someplace that turns me into cinnamon or something like that.
17:37
Speaker 3: Like, I just I don't think that was the case
17:43
Speaker 3: in that one, But I will say very much admitcing
17:45
Speaker 3: ad set up.
17:47
Speaker 4: It looks very it does. It looks wise.
17:50
Speaker 3: Some of these other ones in the front of this article, Yeah,
17:53
Speaker 3: I can't see the scamminess, but I will say they
17:55
Speaker 3: did McCormick's pretty well.
17:57
Speaker 2: I don't want to be cinnamon, more of a prekod
18:01
Speaker 2: guy personally, but hey, your mileage may vary. Taking a
18:05
Speaker 2: look at markets as we head towards the bottom of
18:09
Speaker 2: the hour, the Dow is down fifteen points right now,
18:12
Speaker 2: the S and P is up forty eight nasdak can
18:14
Speaker 2: Posite up three hundred and fifteen, so market's still mixed here.
18:19
Speaker 2: And big thing that you know, we're continuing to see you.
18:22
Speaker 2: Look at kind of your leaders out there, pallunteers up,
18:25
Speaker 2: AMD's up, Tesla and video. The stuff that was selling
18:28
Speaker 2: off last week coming back. The stuff that was trying
18:31
Speaker 2: to keep markets afloat last week is kind of getting
18:34
Speaker 2: whacked here. And so it's something where this tug of
18:38
Speaker 2: war is still going on and it's still is a
18:41
Speaker 2: market that doesn't have a clear direction for the last
18:44
Speaker 2: month and a half. Now it's just kind of chopping around.
18:47
Speaker 2: And again, generally markets correct in two ways. They correct
18:52
Speaker 2: their time or price. You can have a market that
18:55
Speaker 2: pauses for two or three months and then decides to
18:57
Speaker 2: carry on its merry way after its concerns are addressed.
19:00
Speaker 2: You can have a market that says, oh, things are
19:02
Speaker 2: getting worse and then it moves down. But right now
19:05
Speaker 2: no clear direction at all. A little bit up, a
19:07
Speaker 2: little down, and you're just kind of chopping around here
19:10
Speaker 2: as we go through November. Let's take a quick break
19:14
Speaker 2: when we return. We got the trivia answer and we
19:18
Speaker 2: are doing Wall Street Watch after.
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Speaker 1: Radio Network. Time now for Wall Street Watch a complete
19:47
Speaker 1: look at what's moving market so far today right here
19:50
Speaker 1: on the Financial Exchange Radio Network.
19:52
Speaker 5: Market's rebounding after the tech having NASDAC log its worst
19:56
Speaker 5: week since April. Sentiment was lifted last night after Senate
20:00
Speaker 5: lawmakers clear a major hurdle toward ending the historic government shutdown.
20:05
Speaker 5: Right now, the Dow is up merely three points, completely flat,
20:09
Speaker 5: SMP five hundred up over three quarters of a percent,
20:12
Speaker 5: or fifty two points, Nasdaq up one point four percent
20:16
Speaker 5: or three hundred and twenty five points. RUSSED two thousand
20:19
Speaker 5: is up just over half a percent. Tenure treas revealed
20:22
Speaker 5: up two basis points at four point one point one
20:24
Speaker 5: four percent. In crude oil down about a third of
20:28
Speaker 5: a percent, rating of fifty nine dollars in fifty seven
20:30
Speaker 5: cents a barrel after initially opening the day higher. Airline stocks,
20:35
Speaker 5: including American Airlines, United, and Delta, are now down about
20:40
Speaker 5: one percent. Meanwhile, Taiwan Semiconductor saw at sales climb last
20:45
Speaker 5: month at the slowest pace since February twenty twenty four,
20:48
Speaker 5: but remained in double digits. That stock is up about
20:51
Speaker 5: two percent. Elsewhere, a drug maker Pfizer agreed to buy
20:54
Speaker 5: weight loss startup met Sarah in a deal that could
20:56
Speaker 5: be worth more than ten billion dollars. Met Sarah down
20:59
Speaker 5: by fifty percent, while Pfizer shares now down over one percent.
21:04
Speaker 5: Video sharing platform Rumble is seeing its stock jump nearly
21:08
Speaker 5: seven percent after the company security one hundred million dollar
21:11
Speaker 5: advertising commitment from Tether. Instacart up about two percent after
21:16
Speaker 5: the grocery delivery company posted stronger than expected quarterly results
21:20
Speaker 5: after if It's eleven percent tumble last week over high
21:24
Speaker 5: valuation concerns. Pallenteer shares rebounding six percent today and after
21:28
Speaker 5: today's close, we'll see more earnings from core weave in
21:31
Speaker 5: Occidental Petroleum. I'm Tucker Silva and that is Wall Street Watch.
21:35
Speaker 5: And in the previous segment, we asked you the trivia
21:37
Speaker 5: question which American actor and singer performed his hit song
21:41
Speaker 5: looking for Freedom at the New Year's Eve concert at
21:44
Speaker 5: the demolished Berlin Wall. That would be the Hoff, of course.
21:48
Speaker 5: David Hasselhoff from Nita Mass is our winner today, taking
21:52
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21:55
Speaker 5: We played trivia every day here in the Financial Exchange.
21:58
Speaker 5: See complete contest rules at Financial Exchange show dot com.
22:02
Speaker 2: Paul, do you want to talk about AI fueled layoffs
22:05
Speaker 2: or buying a home?
22:07
Speaker 4: I like the buying the home piece. Let's stick with
22:10
Speaker 4: that one.
22:10
Speaker 2: All right, talk to me about it.
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Speaker 4: So a couple different.
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Speaker 3: Things going on in the housing market, I mean, not
22:16
Speaker 3: major changes from a trend standpoint, but this particular piece
22:20
Speaker 3: by Alson Scheger here out of Bloomberg, talks about the
22:24
Speaker 3: rise in the median age of homeowners of the first
22:28
Speaker 3: time home buyers in the United States, where it is
22:31
Speaker 3: now up to the age of forty. That is the
22:33
Speaker 3: average age of a first time home buyer. That was
22:37
Speaker 3: just thirty three a few years ago, and I believe
22:40
Speaker 3: twenty twenty one, and if you go back to nineteen
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Speaker 3: eighty one, it was at twenty nine. And obviously many
22:46
Speaker 3: of us know. The major culprit for that, of course,
22:49
Speaker 3: is that the affordability of homes has increased quite a bit.
22:52
Speaker 3: You also have household formation being delayed a lot longer
22:56
Speaker 3: than it was in the eighties. And the piece it
22:58
Speaker 3: goes on to talk about how while it is the
23:01
Speaker 3: American dream to own a home, it doesn't always make
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Speaker 3: sense for most people. There is still a lot of
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Speaker 3: value that can be gained from the rental market, and
23:10
Speaker 3: certainly I see both sides of it. Sometimes I don't
23:13
Speaker 3: know if you feel the same way, but around the
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Speaker 3: house a million different things are breaking or you're having
23:18
Speaker 3: issues with it, and you just look and say, geez,
23:21
Speaker 3: it seems like this is a NonStop battle to sort
23:23
Speaker 3: of suppress all these different things that are going on.
23:26
Speaker 3: Once that comes with home ownership, and I look back
23:28
Speaker 3: to my rental days and say, wow, it was a
23:30
Speaker 3: lot simpler just to kind of show up and not
23:32
Speaker 3: have to deal with these type of things. But this
23:35
Speaker 3: is the conundrum that many people find themselves in, just
23:38
Speaker 3: really difficult to find a house. And it's it comes
23:41
Speaker 3: all back to the supply issues here.
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Speaker 2: It does. It's it's supplying demand, and I I also
23:51
Speaker 2: I also don't love just that home ownership has just
23:58
Speaker 2: in it's always been this way to wish certain extent,
24:00
Speaker 2: but it's it's more evidence that hey, you're gonna be
24:06
Speaker 2: able to make it further financially by buying assets than
24:11
Speaker 2: by doing work. You know. It's like you would get
24:15
Speaker 2: millennials who were able to buy homes back in the
24:17
Speaker 2: twenty tens. I was fortunate enough to be one of them. Again.
24:20
Speaker 2: I had an FHA mortgage on a three and a
24:23
Speaker 2: half percent down payment because I didn't have any money
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Speaker 2: save for a down payment. Like anytime that someone like
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Speaker 2: tells you, like, oh, I just like save for it,
24:29
Speaker 2: like when you're like twenty five twenty six years old.
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Speaker 2: It's not easy to save that money for the down payment.
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Speaker 2: And the only way I could do it, quite honestly,
24:38
Speaker 2: like you talk about things that are not great financial sense,
24:41
Speaker 2: I pulled a bunch of money out of a retirement
24:43
Speaker 2: account in order to be able to do it, actually,
24:45
Speaker 2: because I didn't have other savings, so I get I'm
24:48
Speaker 2: not one of these people was like, oh, I'd never
24:50
Speaker 2: do this. No, Like, I had an adjustable rate mortgage
24:53
Speaker 2: with three and a half percent down, pulling money out
24:56
Speaker 2: of my retirement account.
24:57
Speaker 4: To do so.
24:58
Speaker 2: It's the only way I could figure it out. And
25:00
Speaker 2: it was still kind of like really overwhelming for the
25:06
Speaker 2: first year or so, just the idea. It's like some
25:08
Speaker 2: bank lent me hundreds of thousands of dollars and now
25:11
Speaker 2: I need to pay that back. So it does take
25:15
Speaker 2: a lot to get there, and it's not always going
25:17
Speaker 2: to be easy and everything, but I think quite Honestly,
25:21
Speaker 2: it's kind of it's tough for me to see that,
25:25
Speaker 2: like so many people can't get to that point because
25:29
Speaker 2: it is something where, hey, if you have a good
25:31
Speaker 2: housing market and you've been able to buy with a
25:34
Speaker 2: relatively small down payment, that leverage can work wonders for
25:37
Speaker 2: you and give you a huge kickstart to buy that
25:39
Speaker 2: second home.
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Speaker 3: Then that twenty percent down is so difficult, particularly around
25:42
Speaker 3: the Greater Boston area, to say that, where your averaging
25:46
Speaker 3: homes that are close to a million bucks in a
25:48
Speaker 3: lot of these communities, it's challenging. The other piece here
25:51
Speaker 3: in the Boston Globe just talks about kind of a
25:53
Speaker 3: conundrum that I found myself in too. Just you buy
25:56
Speaker 3: the first home and sort of the being stuck in
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Speaker 3: it necessarily but stuck with a low mortgage rate and
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Speaker 3: trying to figure out what the next move is to
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Speaker 3: that second home. Eerily kind of reflects some of the
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Speaker 3: things that I've dealt with where we have one and
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Speaker 3: a half bathrooms in our home, and another homeowner in
26:12
Speaker 3: this Boston Globe piece mentioned the same thing where with
26:15
Speaker 3: three young kids, you start to look to the future, say, hey,
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Speaker 3: at some point in time, it's going to be time
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Speaker 3: to move. But it's hard when you're locked in at
26:23
Speaker 3: these lower mortgage rates of yesteryear of the twenty twenties
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Speaker 3: to say, all right, it's time to buy the next
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Speaker 3: home at twice the mortgage rate, or you're looking at
26:32
Speaker 3: renovating which is not cheap either. That's what a lot
26:36
Speaker 3: of homeowners find and that rings true for me as well.
26:39
Speaker 2: Yeah, folks. The Armstrong Advisory Group does have a guide
26:43
Speaker 2: available this month specifically focused on real estate. It's titled
26:48
Speaker 2: owning Real Estate in Retirement. Talks about considerations for owning
26:53
Speaker 2: a primary residence in retirement, or, as we're starting to
26:57
Speaker 2: see in increasing numbers, does it make more sense to
26:59
Speaker 2: be renting in retirement? Beyond that, Hey, if you own
27:03
Speaker 2: a second home, what are the considerations for maybe when
27:06
Speaker 2: you decide to move on from that and consolidate down
27:09
Speaker 2: to just one property that you own. Even beyond that, hey,
27:13
Speaker 2: what about if you own rental property? What are some
27:15
Speaker 2: of the considerations for that in retirement as well? Again,
27:19
Speaker 2: the guide is titled Owning Real Estate in Retirement, and
27:23
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Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
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Speaker 1: registered investment advisor. Nothing in the ad or in any
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Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
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Speaker 1: your own financial tax into state planning advisors before making
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Speaker 1: any investment decisions. Armstrong make contact you to offer investment
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Speaker 1: advisory services.
28:07
Speaker 2: Let's see what do we want to talk about now?
28:11
Speaker 2: Vet bills, No, not really feeling the VET bills.
28:17
Speaker 4: They're high, they're high.
28:19
Speaker 2: Wendy's closing hundreds of restaurants.
28:21
Speaker 4: Yeah, why not?
28:23
Speaker 2: People not liking the junior bacon cheeseburgers anymore. What's going on, Paul?
28:26
Speaker 3: A little bit of a little bit of a turnaround
28:29
Speaker 3: planned here, Chuck. They've got about six thousand US locations
28:33
Speaker 3: that they they could close. But wait, that's worded weirdly.
28:40
Speaker 3: Here to two hundred to three hundred fifty restaurants mid
28:44
Speaker 3: single digits would be closed out of their six thousand
28:48
Speaker 3: locations here and they are just looking at the ones
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Speaker 3: that are underperforming and dragging down the chains overall performance.
28:56
Speaker 3: It's interesting the fast food sector in general. McDonald's has
28:59
Speaker 3: been dealing with us trying to find the value focused
29:02
Speaker 3: customer out there. There had been sort of a split there.
29:05
Speaker 3: You're seeing fast casual lose some momentum and perhaps Wendy's,
29:10
Speaker 3: you know, catching some of that in the fast food
29:12
Speaker 3: space as well, not performing.
29:14
Speaker 2: How does it work the restaurants that they may consider closing,
29:17
Speaker 2: are those all corporate owned or like, let's say that
29:20
Speaker 2: you're a franchise that owns a Wendy's franchise, what happens
29:24
Speaker 2: to you.
29:25
Speaker 4: That's a great question.
29:26
Speaker 3: I've seen it similarly with dunkin Donuts locations. I don't
29:30
Speaker 3: know if you've ever bumped into this, but there's a
29:32
Speaker 3: lot of them in gas stations around my area that
29:34
Speaker 3: I would hit, and several of them have closed recently.
29:37
Speaker 3: I just kind of wonder who's behind that decision. Is
29:41
Speaker 3: it dunkin Donuts corporal corporate that's saying you're underperforming so
29:45
Speaker 3: you need to go, or is it something that is
29:49
Speaker 3: a mutual decision between the franchise e in the franchise
29:53
Speaker 3: are like Wendy's.
29:54
Speaker 2: Yeah, I don't know enough about the franchise business model
29:57
Speaker 2: to say to be able to say like, here's what
29:59
Speaker 2: happened in that event, because oftentimes, like hey, you pay
30:03
Speaker 2: for that franchise for a certain amount, right, and then
30:06
Speaker 2: there's certain revenue that you have to kick back to
30:08
Speaker 2: the company. There are certain expenses that you have to
30:11
Speaker 2: pay for that the company says, you know, physical improvements
30:14
Speaker 2: and things like that. But I've never look, I've never
30:19
Speaker 2: even seen a franchise agreement, so I don't know like
30:21
Speaker 2: what it says, like, hey, if corporate decides you're closing,
30:25
Speaker 2: they must have some certain term. There has to be
30:27
Speaker 2: something in there. I just don't know what it is.
30:30
Speaker 3: I'd be interested in Texas if anyone's a franchise e
30:32
Speaker 3: owner six one seven three six two one three eight five.
30:36
Speaker 2: Otherwise I'll have to ask chat GPT and just accept
30:39
Speaker 2: whatever it tells me. So what they're going to franchise
30:41
Speaker 2: owners of fast food restaurants, Yes, please text us at
30:44
Speaker 2: six one seven three six two thirteen eighty five. Uh,
30:47
Speaker 2: and also let us know what your favorite Wendy's order
30:49
Speaker 2: is as well quick break here, stack, rule out is next.
30:53
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32:12
Speaker 2: Paul, what do you got for stack roulette? Chuck?
32:15
Speaker 3: As an Italian yourself, I don't know if you're concerned
32:17
Speaker 3: about this, but Italian pasta is poised to disappear from
32:22
Speaker 3: American grocery shells perhaps come January, as the Trump administration
32:27
Speaker 3: is set to impose duties of one hundred and seven
32:30
Speaker 3: percent on Italian pasta imports, one of the most punitive
32:35
Speaker 3: of the terifs that they have levy this far. It
32:38
Speaker 3: is a portion of it ninety two percent of it
32:41
Speaker 3: an anti dumping duty on pasta made in Italy, and
32:45
Speaker 3: then there is also the additional fifteen percent tariff on
32:48
Speaker 3: imports from the EU. Having feedback here from one of
32:53
Speaker 3: the executives of an Italian pasta manufacturing company saying that
32:58
Speaker 3: it's an incredibly important mart market for US, but no
33:01
Speaker 3: one can maintain of course, those type of margins they
33:03
Speaker 3: would have to pull from the shelves in twenty twenty
33:06
Speaker 3: six if this were to actually go into effect concerning
33:10
Speaker 3: news here for pasta.
33:11
Speaker 2: You're saying we're gonna have a pasta shortage from if.
33:15
Speaker 4: You like your Italian pasta.
33:16
Speaker 3: You might plenty of other American choices out there, but
33:19
Speaker 3: we all know that not as not as good as
33:21
Speaker 3: the Italians do it.
33:22
Speaker 2: No, we can't. We can't be having any of this year.
33:24
Speaker 2: We can't have a pasta shortage heading into the Christmas season.
33:28
Speaker 4: That's true.
33:28
Speaker 2: My goodness, those seven fishes aren't going to feed themselves.
33:32
Speaker 4: Huh no, they're not. Not.
33:34
Speaker 2: You got a favorite pasta, Paul.
33:37
Speaker 4: Typically Linguini guy.
33:39
Speaker 2: You're a Linguini guy. Yeah, okay, no surprise there, rock
33:41
Speaker 2: What about you? I'm a little surprised.
33:44
Speaker 4: Why what'd you think? It's like the most basic choice.
33:48
Speaker 2: I don't think Linguini's the most basic choice.
33:50
Speaker 5: The most basic choice is probably elbows, or I would
33:53
Speaker 5: have we would have even said spaghetti in a long format.
33:58
Speaker 4: If i'm if I'm being a it's it's probably spaghetti. Yeah.
34:03
Speaker 2: I like a nice Oh sure, I'm a short pasta
34:09
Speaker 2: guy myself, so a little fussili does a little nice work.
34:14
Speaker 2: I also a little far folly. If you like a
34:16
Speaker 2: little bow tie, that kind of action can do. Well,
34:19
Speaker 2: it's too cute. What about a little rotee the little
34:22
Speaker 2: wagon wheels? Not a rote fan?
34:25
Speaker 5: Silly?
34:26
Speaker 2: What do you mean, silly?
34:27
Speaker 5: It's just a wheel.
34:28
Speaker 2: You know what I got to say. Used to be great.
34:30
Speaker 2: There was a there's a restaurant in Milton that used
34:34
Speaker 2: to do uh rigatoni, but they did it with the
34:38
Speaker 2: wagon wheel the full length, so it was like a
34:41
Speaker 2: long wagon wheel. Spectacular just because you get the sauce
34:45
Speaker 2: sticking to the entire inside of that thing. Oh, I
34:48
Speaker 2: know what you're talking about. Okay, yeah, uh huh. Now
34:51
Speaker 2: you're cooking the other things. Actually, if I'm going my
34:55
Speaker 2: favorite long pasta bucatini, Yeah, God to love because that
35:02
Speaker 2: way you get that sauce just coming right up the
35:05
Speaker 2: middle there, and it's just outstanding. I'm want to talk
35:10
Speaker 2: a little bit about this uh Major League Baseball uh
35:14
Speaker 2: gambling scandal.
35:16
Speaker 4: Uh.
35:17
Speaker 2: You've got a couple new charges here, not new, it's
35:21
Speaker 2: obviously new. You got a couple of charges in this scandal.
35:25
Speaker 2: So remember a couple of weeks ago you had this
35:26
Speaker 2: NBA one. Now you've got Cleveland Guardians pitchers Luis Ortiz
35:31
Speaker 2: and Emmanuel Casse who have been charged with fraud basically
35:36
Speaker 2: for manipulating pitches to try to get bets to pay
35:39
Speaker 2: off on different betting platforms, and all of these different
35:46
Speaker 2: sports leagues old you know, tell you, oh, you know,
35:48
Speaker 2: this is a horrible thing and this can't be happening.
35:51
Speaker 2: And then here's the parlay of the day, brought to
35:54
Speaker 2: you by and I honestly, at this point, here's where
36:01
Speaker 2: I've gotten to. I've said this before, I'll say it again.
36:04
Speaker 2: I think it's totally fine if you want sports gambling
36:06
Speaker 2: to be legal. I don't think it should be allowed
36:09
Speaker 2: on phones because it is becoming a scorge on society
36:14
Speaker 2: and it's too easy to make these bets on phones.
36:17
Speaker 2: You can't police it appropriately, and it threatens the integrity
36:21
Speaker 2: of these games, which quite honestly, like look their sports,
36:27
Speaker 2: Like I'm a huge sports fan, but ultimately, like even
36:30
Speaker 2: I realize sports is kind of dumb. It's literally like, hey,
36:33
Speaker 2: let's take this oblong shaped ball and try to get
36:35
Speaker 2: it across that line there, and these guys can tackle
36:38
Speaker 2: us to stop. I love football. I watched the entire
36:40
Speaker 2: Patriots game yesterday. It was fantastic. Sorry to our you know,
36:44
Speaker 2: Tampa Bay listeners. But ultimately sports are like I realized
36:49
Speaker 2: that they're dumb. It's hey, let me take this like
36:50
Speaker 2: golf club out and see how far I can hit
36:52
Speaker 2: this ball. It's it's dumb. When we're getting to the
36:56
Speaker 2: point now where professionals are changing how they play the
37:01
Speaker 2: game because of you know, extra money that can come
37:04
Speaker 2: their way that you know, makes the game not be
37:07
Speaker 2: legitimate anymore. When you've got professional athletes across major sports
37:11
Speaker 2: that are saying they're being threatened on social media because
37:13
Speaker 2: they didn't hit this better, that bet we've gone too
37:17
Speaker 2: far and we're starting to lose like the fact that
37:20
Speaker 2: we're human beings and are supposed to have souls.
37:23
Speaker 3: I'll push back on some of it here where some
37:26
Speaker 3: of these issues on gambling, there's definitely gonna be more
37:28
Speaker 3: of them to come out, to be clear, But this
37:30
Speaker 3: goes back one hundred years. I mean, if you go
37:32
Speaker 3: back to like the Black Sucks, it's always been not always,
37:34
Speaker 3: there's always an under seedling of this kind of stuff
37:37
Speaker 3: that goes on. I would argue you're right, it probably
37:40
Speaker 3: is more prevalent now just because of how just it's
37:43
Speaker 3: really become pronounced in terms of how many platforms are
37:46
Speaker 3: out there, and there are gonna be more bad actors,
37:49
Speaker 3: I'm sure, over the course of the next few years
37:52
Speaker 3: or so, but but ultimately hopefully they can get into
37:56
Speaker 3: a better place. There are some pros and cons that
37:58
Speaker 3: come with it, that's for sure.
38:00
Speaker 2: Make a quick break for the rest of the day.
38:02
Speaker 2: We're gonna see you tomorrow on the financial exchange. We're
38:05
Speaker 2: looking forward to and hopefully you are too. Thanks for listening.
38:09
Speaker 2: We'll catch you then.