Latest / The Financial Exchange Show / Car prices are pushing Americans to the limit

Transcript

Car prices are pushing Americans to the limit · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:03
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:05
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:08
  Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:11
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:14
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:17
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 0:20
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:23
  Speaker 1: this program do not endorse each other or their services.
• 0:26
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:28
  Speaker 1: for referrals and are not affiliated. This is the Financial
• 0:34
  Speaker 1: Exchange with Mike Armstrong and Mark Vandetti. Your exclusive look
• 0:39
  Speaker 1: at business and financial news affecting your day, your city,
• 0:43
  Speaker 1: your world. Stay informed and up to date about economic
• 0:47
  Speaker 1: and market trends, plus breaking business news every day. The
• 0:51
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:54
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:58
  Speaker 1: heroes by visiting das V five K dot Boston and
• 1:02
  Speaker 1: making a donation Today. Face is the Financial Exchange with
• 1:06
  Speaker 1: Mike Armstrong and Mark Vandetti.
• 1:11
  Speaker 2: More than welcome back here at the Financial Exchange. We've
• 1:14
  Speaker 2: got markets in mixed territory. As we close in on
• 1:17
  Speaker 2: tomorrow's jobs report, we've got a shortened trading day. Tomorrow
• 1:22
  Speaker 2: market's closing at one pm and then obviously closed on Friday. Mark.
• 1:26
  Speaker 2: I tend to think that people get a bit confused
• 1:28
  Speaker 2: by all of the different jobs reports that we talk
• 1:32
  Speaker 2: about here on the show, because I do. There are
• 1:35
  Speaker 2: a lot of them, so and some of them don't
• 1:38
  Speaker 2: really don't really matter that much.
• 1:41
  Speaker 3: But it's also it's also like misleading headlines, if you
• 1:44
  Speaker 3: want to put it that way, to yeah, people like,
• 1:46
  Speaker 3: oh you catch that jaw sports, Like, well it's not.
• 1:48
  Speaker 2: Out yet, Yeah, it's it's not really the relevant one.
• 1:51
  Speaker 2: So here's what we are getting, or have already gotten
• 1:54
  Speaker 2: this week, and we get every single month, we get
• 1:58
  Speaker 2: a Jolts report, which does not give you an unemployment rate.
• 2:02
  Speaker 2: It gives you some information on what some describes as
• 2:06
  Speaker 2: the tightness of the labor market. They can sees, yeah,
• 2:10
  Speaker 2: a whole bunch of those statistics which are interesting because
• 2:12
  Speaker 2: it tells you, like, hey, are people confident enough to
• 2:14
  Speaker 2: quit their job and go find a different one. Our
• 2:16
  Speaker 2: employers looking for employees at what pace, So it's interesting,
• 2:21
  Speaker 2: but not the monthly jobs report. The same week that
• 2:25
  Speaker 2: the monthly Jobs report comes out, private payroll company ADP
• 2:29
  Speaker 2: publishes their own data and estimates on the state of
• 2:32
  Speaker 2: the labor market, and they do this by looking at
• 2:35
  Speaker 2: their own data on hey, how many more or fewer
• 2:39
  Speaker 2: paychecks are we producing in the most previous in the
• 2:42
  Speaker 2: most recent month, and that came out this morning did
• 2:45
  Speaker 2: indicate a pretty weak number. Thirty three thousand fewer jobs
• 2:48
  Speaker 2: than the month before is what that data indicated. Normally,
• 2:52
  Speaker 2: on the first Friday of the month, we get the
• 2:54
  Speaker 2: Bureau of Labor Statistics Monthly Jobs Report. That's where we
• 2:57
  Speaker 2: get the unemployment report, as well as data on age
• 3:00
  Speaker 2: gains sector by sector, eventually state by state, and then
• 3:03
  Speaker 2: every month we get a weekly reading on unemployment claims,
• 3:08
  Speaker 2: which is a completely different stat that is actually provided
• 3:11
  Speaker 2: to us by the states, who then send the data
• 3:13
  Speaker 2: to the federal government on a how many people signed
• 3:16
  Speaker 2: up for unemployment this week, how many fewer are or
• 3:19
  Speaker 2: more are still collecting unemployment. So it is a lot
• 3:23
  Speaker 2: of data, which one would you say mark is most
• 3:27
  Speaker 2: important for Forecasting the state of the labor market by
• 3:31
  Speaker 2: most economists.
• 3:32
  Speaker 4: Depends on the period right now, And when you say
• 3:35
  Speaker 4: forecasting the state of the labor market.
• 3:37
  Speaker 2: That can mean a lot of things.
• 3:38
  Speaker 5: I know, yeah, I.
• 3:40
  Speaker 4: Would use it either the unemployment rate or the vacancy
• 3:45
  Speaker 4: the number of the number of job openings relative to
• 3:47
  Speaker 4: the number of unemployed people. Vacancies to unemployed jobs demand,
• 3:54
  Speaker 4: job demand versus supply of labor. YEP, that particular ratio
• 3:58
  Speaker 4: did a good job of helping to forecast inflation during
• 4:01
  Speaker 4: the recent run up. For example, It's done a decent
• 4:03
  Speaker 4: job roughly for the past twenty years, which is why
• 4:06
  Speaker 4: it's become more popularized or more popular or more widely followed.
• 4:10
  Speaker 4: The general point I want to make is each one
• 4:12
  Speaker 4: of these surveys serves a different purpose. They're not all
• 4:15
  Speaker 4: meant to answer the same question we sometimes take. And
• 4:19
  Speaker 4: some of them are produced privately, some of them are
• 4:21
  Speaker 4: produced by the federal government. As you pointed out, sometimes
• 4:25
  Speaker 4: we use these things in ways that weren't intended and
• 4:29
  Speaker 4: that can lead to misleading conclusions.
• 4:31
  Speaker 2: So, for example, ADP reported this morning that there were
• 4:35
  Speaker 2: thirty three thousand fewer jobs created than the previous month.
• 4:39
  Speaker 2: We're generally looking for more jobs to get created every month, and.
• 4:43
  Speaker 5: That's not an estimate.
• 4:44
  Speaker 4: That's just what there but people on their platform told
• 4:48
  Speaker 4: them on net happened to hiring. That's unlike sorry, my gud,
• 4:52
  Speaker 4: I know you fine. Unlike payrolls, which is estimated by
• 4:56
  Speaker 4: the federal government's the Unemployment report that we're going to
• 4:58
  Speaker 4: talk about tomorrow, that is an est So when we
• 5:00
  Speaker 4: say one hundred thousand new jobs were created, that's plus
• 5:03
  Speaker 4: or minus one hundred and thirty thousand is the so
• 5:06
  Speaker 4: called confidence interval. The actual number could be less than zero.
• 5:09
  Speaker 4: The real number could indicate, on the conversely, quite a
• 5:15
  Speaker 4: very healthy labor market.
• 5:16
  Speaker 2: So in your view, does what we heard this morning
• 5:18
  Speaker 2: from ADP indicate anything to us about what we're going
• 5:20
  Speaker 2: to hear tomorrow from the Bureau li.
• 5:22
  Speaker 4: This survey is not designed to do that. It used
• 5:24
  Speaker 4: to try to anticipate the payrolls number that we're going
• 5:29
  Speaker 4: to get tomorrow. It's not designed to do that anymore.
• 5:31
  Speaker 4: That's not to say if I put it in my
• 5:34
  Speaker 4: little forecasting model, it might not help to pin down
• 5:37
  Speaker 4: what payrolls are going to do month over month, But
• 5:41
  Speaker 4: it's not really designed for that purpose. Mike that said,
• 5:45
  Speaker 4: a reported loss of jobs by ADP surely is not
• 5:49
  Speaker 4: great news. No, but that doesn't follow that it's terrible news.
• 5:54
  Speaker 2: In terms of the expectations for tomorrow, we're looking for
• 5:57
  Speaker 2: total job creation of one hundred and ten thousand, and
• 6:00
  Speaker 2: according to MarketWatch and their average survey of economists, the
• 6:05
  Speaker 2: unemployment rate to tick up very slightly from four point
• 6:10
  Speaker 2: close to four point two and a half up to
• 6:12
  Speaker 2: four point three percent is what's being estimated here. The
• 6:15
  Speaker 2: previous month was one hundred and thirty nine thousand jobs created,
• 6:18
  Speaker 2: So we will see where that one comes in tomorrow
• 6:20
  Speaker 2: at eight thirty.
• 6:21
  Speaker 4: Okay, So if we come in at that, let's talk
• 6:24
  Speaker 4: about how these numbers could be used. We were talking
• 6:26
  Speaker 4: a little bit on air, a little bit off air
• 6:28
  Speaker 4: about what level of payrolls is necessary to keep the
• 6:30
  Speaker 4: unemployment rate constant. And you can't do this in your head.
• 6:33
  Speaker 4: You can't just do it on paper. You need to
• 6:36
  Speaker 4: model this and then use a statistical approach. The answer
• 6:39
  Speaker 4: right now appears to be somewhere in the load to
• 6:42
  Speaker 4: mid one hundreds, and so the actual number, if you're interested,
• 6:46
  Speaker 4: over the past couple of years, the change in payrolls
• 6:49
  Speaker 4: associated with a no with zero change in the unemployment
• 6:52
  Speaker 4: rate is about one hundred and forty k. That's just
• 6:54
  Speaker 4: statistical though there's nothing there's no iron law behind that.
• 6:58
  Speaker 4: The FED knows this. I calculate they're better than me.
• 7:02
  Speaker 4: They know this as well. Their estimate might even be
• 7:05
  Speaker 4: more precise if we do indeed get But I'm pretty
• 7:08
  Speaker 4: confident minds in the ballpark. If we do indeed get
• 7:10
  Speaker 4: one hundred thousand new jobs created tomorrow, and the unemployment
• 7:13
  Speaker 4: rate does indeed tick up, let's put aside why it
• 7:16
  Speaker 4: goes up. It could go up because the bunch of
• 7:19
  Speaker 4: people went into the labor force.
• 7:20
  Speaker 5: That's a good thing.
• 7:21
  Speaker 4: But they didn't all get jobs immediately, so the unemployment
• 7:24
  Speaker 4: rate went up, So you have to ask why. But
• 7:26
  Speaker 4: let's just take it all at face value. That makes
• 7:28
  Speaker 4: it more likely and this is where the rubber meets
• 7:30
  Speaker 4: the road for everybody. I think this is why we
• 7:32
  Speaker 4: talk about these things. That makes it more likely that
• 7:34
  Speaker 4: the FED will ease when it meets at the end
• 7:36
  Speaker 4: of this month, which has implications for asset prices.
• 7:40
  Speaker 2: Let's take a quick break when we come back. Joseph
• 7:44
  Speaker 2: Hewn from Edmonds is gonna be joining us next talking
• 7:47
  Speaker 2: about the state of car purchases. Importantly, with these very
• 7:51
  Speaker 2: high car prices combined with higher interest rates, what is
• 7:54
  Speaker 2: it meaning for the average American buying a car and
• 7:57
  Speaker 2: the monthly payments that they're making. That's next here on
• 8:00
  Speaker 2: the Financial Exchange.
• 8:01
  Speaker 1: The Financial Exchange Show podcast drops every day on Apple, Spotify,
• 8:05
  Speaker 1: and iHeartRadio. Hit that subscribe button and leave us a
• 8:09
  Speaker 1: five star review. You're listening to the Financial Exchange Radio Network.
• 8:15
  Speaker 1: The Financial Exchange is life on series XM's Business Radio
• 8:18
  Speaker 1: Channel one thirty two weekdays from eleven to noon. Get
• 8:21
  Speaker 1: the latest business and financial news from across the country
• 8:24
  Speaker 1: and around the world, and keep up to date on
• 8:27
  Speaker 1: how it might affect your wallet. That's the Financial Exchange
• 8:30
  Speaker 1: weekdays from eleven to noon on a series XM's Business
• 8:33
  Speaker 1: Radio Channel one thirty two. He's the Financial Exchange Radio Network.
• 8:47
  Speaker 2: Joining us now is Joseph Youwen from Edmunds. Talk a
• 8:50
  Speaker 2: little bit about consumer behavior in the car industry. Jo
• 8:54
  Speaker 2: thanks for joining us. Appreciate it, Yes, of course. How
• 8:57
  Speaker 2: are you guys doing very well? So, I don't think
• 9:00
  Speaker 2: it's any surprise to anyone that's bought a car anytime
• 9:04
  Speaker 2: in the last few years that prices have been increasing dramatically,
• 9:09
  Speaker 2: But what is reported on a little bit less is
• 9:12
  Speaker 2: just kind of the state of how we buy these cars.
• 9:14
  Speaker 2: So can you talk to me about what most people
• 9:17
  Speaker 2: are doing for financing options these days?
• 9:21
  Speaker 6: Well, most people are taking out longer and longer loan
• 9:26
  Speaker 6: terms to be able to afford these ever increasing prices.
• 9:30
  Speaker 6: And I think one of the biggest things that we're
• 9:33
  Speaker 6: seeing is that interest rates have been historically high, especially
• 9:38
  Speaker 6: I think the highest of ben since about two thousand
• 9:40
  Speaker 6: and eight or so, since the Great Recession, And when
• 9:43
  Speaker 6: we're in an environment where borrowing costs are high and
• 9:47
  Speaker 6: the price of the vehicles are high, we're finding more
• 9:50
  Speaker 6: and more people that are getting into seven year loans,
• 9:53
  Speaker 6: eight year loans, some even you know, nine year loans.
• 9:56
  Speaker 6: And we're also seeing a lot of consumers paying up to,
• 10:00
  Speaker 6: you know, over one thousand dollars a month for a
• 10:02
  Speaker 6: monthly payment.
• 10:04
  Speaker 2: I recently bought a new car because we had totaled
• 10:08
  Speaker 2: our previously previous minivan needed a new minivan, and I
• 10:11
  Speaker 2: was very surprised by the method that you talk about
• 10:15
  Speaker 2: financing a car these days. So we walked in and
• 10:19
  Speaker 2: you know, settled on a price, and they came in
• 10:22
  Speaker 2: with the financing options. There was no mention of the
• 10:24
  Speaker 2: interest rate. It was really, hey, here's the monthly payment,
• 10:29
  Speaker 2: you know, for someone with good credit, depending on if
• 10:31
  Speaker 2: you want a forty eight, sixty or seventy two month loan.
• 10:34
  Speaker 2: No mention of, hey, this is the interest rate for
• 10:36
  Speaker 2: that term, or how much needs to put down to
• 10:39
  Speaker 2: accomplish all of this. It was purely just focused on
• 10:41
  Speaker 2: how can we get that monthly payment in a place
• 10:44
  Speaker 2: that you feel comfortable. That's got to be a lot
• 10:47
  Speaker 2: more difficult to get into that comfortable monthly payment amount.
• 10:50
  Speaker 2: Given what we're seeing with car prices. What are the
• 10:53
  Speaker 2: average interest rates that are actually charged on car loans?
• 10:57
  Speaker 6: Sure, the average new vehicle interest rate this past quarter
• 11:01
  Speaker 6: was seven point two percent, And so you know, I
• 11:04
  Speaker 6: think my personal bank, which is Chase, I think, for me,
• 11:08
  Speaker 6: a quote unquote well qualified buyer, they're like, come in
• 11:12
  Speaker 6: and beat those dealer rates and it's like six point
• 11:15
  Speaker 6: nine percent. So I'm not really getting down much of
• 11:18
  Speaker 6: a break either. And I think that might be one
• 11:20
  Speaker 6: of the reasons why dealers are shying away from showing
• 11:23
  Speaker 6: that number, because you know, you walk in their confident
• 11:27
  Speaker 6: with your seven fifty plus seven to sixty plus credit
• 11:29
  Speaker 6: score and they offer you seven percent, You're going to
• 11:32
  Speaker 6: be pretty upset. And I think, you know, if for
• 11:36
  Speaker 6: our sales team that's trying to make the sale, they
• 11:38
  Speaker 6: don't want to, you know, especially given how much these
• 11:41
  Speaker 6: cars cost. The last thing they want to do is
• 11:44
  Speaker 6: to potentially have the customer walk because they think that
• 11:49
  Speaker 6: these rates are offensive, which I mean they kind of are,
• 11:54
  Speaker 6: but it is the reality of the marketplace right now.
• 11:56
  Speaker 2: No, I mean a line of credit or any anything
• 11:58
  Speaker 2: else you get to borrow, way, it's going to be
• 12:00
  Speaker 2: in the same general range. I'm not surprised by these
• 12:03
  Speaker 2: rates at all. We talk a lot about new car market,
• 12:06
  Speaker 2: but let's be honest, a lot of folks, probably the
• 12:09
  Speaker 2: majority of people, are buying used cars when they go
• 12:11
  Speaker 2: to markets. What are rates looking like when you're buying
• 12:14
  Speaker 2: that used vehicle.
• 12:16
  Speaker 6: Yeah, so for you think, you know, you might be
• 12:19
  Speaker 6: getting a deal getting a CPO car or something, But
• 12:22
  Speaker 6: for a lot of people, the use car rates are
• 12:25
  Speaker 6: are around eleven percent, and so yes, you might be
• 12:30
  Speaker 6: getting a break in price, but over the life of
• 12:32
  Speaker 6: the loan, because you know, because used cars have also
• 12:36
  Speaker 6: gotten expensive with the new car costs going up. You know,
• 12:41
  Speaker 6: they're the highest ever been too. So yes, you may
• 12:44
  Speaker 6: be getting a break, But if you take out another
• 12:46
  Speaker 6: six year loan, seven year own loan on your used
• 12:50
  Speaker 6: car at eleven percent, that's I'm not very good at math,
• 12:54
  Speaker 6: but that's like tens of Thus it's an interest.
• 12:56
  Speaker 2: Alone, Joseph, any strategies out there that you're seeing people
• 13:01
  Speaker 2: successfully employ or that that Edmund suggests to people for hey,
• 13:05
  Speaker 2: where can you find a deal? Is there any still
• 13:08
  Speaker 2: zero percent financing deals out there for you know, car
• 13:11
  Speaker 2: inventories that they're just trying to move along.
• 13:15
  Speaker 6: I think the toughest thing about zero percent deals right
• 13:18
  Speaker 6: now for a lot of consumers is that it's typically
• 13:23
  Speaker 6: tied to a shorter loan term. And you know, one
• 13:28
  Speaker 6: of the things that we're finding is that most consumers
• 13:30
  Speaker 6: can afford that.
• 13:31
  Speaker 2: Yep.
• 13:32
  Speaker 6: You know, typically if you if you were to go
• 13:34
  Speaker 6: from a seventy two month loan, which is kind of
• 13:36
  Speaker 6: the standard right now, to a thirty six or forty
• 13:40
  Speaker 6: eight month loan, even with the reduced interest rate, you're
• 13:43
  Speaker 6: looking at close to you know, doubling up one's monthly payment.
• 13:46
  Speaker 6: And when the average monthly payment is into seven hundreds.
• 13:51
  Speaker 6: The average family trying to get into their you know,
• 13:54
  Speaker 6: compact or mid sized suv while worrying about daycare or
• 13:58
  Speaker 6: while you're worrying about you know, childcare cost, they're not
• 14:00
  Speaker 6: going to be like, oh, yeah, I can definitely do
• 14:02
  Speaker 6: a zero percent loan by doing thirteen hundred dollars a
• 14:05
  Speaker 6: month on my traverse or something comfortable. So that's kind
• 14:11
  Speaker 6: of tough. So the biggest strategy, or the most important
• 14:15
  Speaker 6: thing that we try to tell consumers to focus on
• 14:17
  Speaker 6: is to really rethink how much car you actually need.
• 14:22
  Speaker 6: You know, a lot of people, especially American consumers, tend
• 14:26
  Speaker 6: to buy bigger vehicles than they need because they feel like, oh,
• 14:30
  Speaker 6: for that one road trip that we take every three years,
• 14:33
  Speaker 6: we need that third row. So like my mother in
• 14:36
  Speaker 6: law can sit in the back. Do you really need to,
• 14:40
  Speaker 6: you know, have a three row suv that you're only
• 14:42
  Speaker 6: going to use the third row once every three years.
• 14:45
  Speaker 6: The answer is not really. You can always rent a
• 14:47
  Speaker 6: car that fits your needs better for that trip. And so,
• 14:51
  Speaker 6: you know, we really want to advise people to reassess
• 14:54
  Speaker 6: how much vehicle that they need. And you know I
• 14:56
  Speaker 6: mentioned earlier if your personal bank or a local credit
• 15:00
  Speaker 6: even offers the slightest of discounts and interest rates, maybe
• 15:04
  Speaker 6: take a look into those. It's not easy to borrow
• 15:07
  Speaker 6: right now, as you said, whether it's a keylock or
• 15:09
  Speaker 6: a credit card or any type of loan, So any
• 15:11
  Speaker 6: type of point discount that you can get anywhere would
• 15:15
  Speaker 6: be a big leg up.
• 15:16
  Speaker 2: Joseph, you from Edmunds joins us today to talk about
• 15:20
  Speaker 2: the monthly car payments that Americans are experiencing now and
• 15:24
  Speaker 2: just how large those are getting. Joseph, thanks so much
• 15:27
  Speaker 2: for joining us. Appreciate I have a great fourth and
• 15:29
  Speaker 2: we will chat with you again soon.
• 15:31
  Speaker 3: Of course, it was a pleasure to be on all
• 15:33
  Speaker 3: right time for trivia here on the Financial Exchange, And
• 15:36
  Speaker 3: today is Larry David's seventy eighth birthday. After the finale
• 15:40
  Speaker 3: of Seinfeld, Larry David created a one hour comedy special
• 15:44
  Speaker 3: for HBO which would go on to become Curb Your Enthusiasm.
• 15:48
  Speaker 3: So trivia question today who played Larry David's wife in
• 15:53
  Speaker 3: Curb Your Enthusiasm?
• 15:54
  Speaker 5: Once again?
• 15:55
  Speaker 3: Who played Larry David's wife in Curby Your Enthusiasm? Be
• 15:59
  Speaker 3: the person today to text us at six one seven
• 16:02
  Speaker 3: three six two thirteen eighty five with correct answer, and
• 16:06
  Speaker 3: you win a Financial Exchange Show T shirt. Once again.
• 16:08
  Speaker 3: The six correct response to text us to the number
• 16:12
  Speaker 3: six one seven three six two thirteen eighty five will
• 16:14
  Speaker 3: win that T shirt. See complete contest rules at Financial
• 16:18
  Speaker 3: Exchange Show dot com.
• 16:20
  Speaker 2: Hurts customers are apparently getting a bit of a rude
• 16:22
  Speaker 2: awakening when it comes to their rental vehicles that Joseph
• 16:26
  Speaker 2: Hunan was mentioning there for that large family vacation. Hurts
• 16:30
  Speaker 2: is now employing a new piece of technology which they
• 16:34
  Speaker 2: are claiming is powered by AI, which my guess is
• 16:37
  Speaker 2: that it's not. It just looks like a giant scanner.
• 16:39
  Speaker 2: But here's the detail. They before they rent out the
• 16:42
  Speaker 2: car to you, they have this what looks like a
• 16:45
  Speaker 2: pretty detailed scanning machine, kind of like what you would
• 16:49
  Speaker 2: maybe see at the airports. It's going to take an
• 16:51
  Speaker 2: image of the car, and then you return it and
• 16:54
  Speaker 2: they're going to run it back through that scanner. It
• 16:56
  Speaker 2: seems like it's like.
• 16:56
  Speaker 3: An augmented reality sort of set up.
• 16:59
  Speaker 5: Yeah.
• 17:00
  Speaker 2: Yes, again, my guess is they just wanted to find
• 17:02
  Speaker 2: some way to use the word AI in their technology
• 17:05
  Speaker 2: because they're a car rental company, and there's not a
• 17:07
  Speaker 2: lot of opportunities for that. But yeah, it looks like
• 17:10
  Speaker 2: they're running these cars now through these scanners to detect,
• 17:14
  Speaker 2: you know, scrapes and dents in engine size that might
• 17:17
  Speaker 2: not otherwise be detected by their employees that are quickly
• 17:22
  Speaker 2: scanning these things in and out and comparing it to
• 17:24
  Speaker 2: that that. I can't believe they still use these, But
• 17:28
  Speaker 2: last time I rented a car, I still got the
• 17:30
  Speaker 2: like pink carbon copy of the sheet of Hey, did
• 17:33
  Speaker 2: you look around at the car and look for any
• 17:34
  Speaker 2: dents and we're going to mark them up here. Seems
• 17:37
  Speaker 2: like it would be a much more successful way to
• 17:39
  Speaker 2: detect these dents. Customers apparently not terribly happy about being
• 17:43
  Speaker 2: saddled with a four hundred and fifty dollars bill for
• 17:46
  Speaker 2: a one inch scratch on the vehicle that they that
• 17:49
  Speaker 2: they were responsible for. I don't know, this seems like
• 17:53
  Speaker 2: a good idea for Hurtz. So the article is all
• 17:56
  Speaker 2: about it's in the New York Post, you can read
• 17:58
  Speaker 2: through it yourselves, but is making the case of, oh,
• 18:01
  Speaker 2: you know, people are going to ditch Hurts and they're
• 18:03
  Speaker 2: not going to stick with them. My guess would be
• 18:07
  Speaker 2: this ends up helping hurtz bottle bottom line by being
• 18:11
  Speaker 2: able to detect the problems with these cars, increasing their
• 18:15
  Speaker 2: eventual resale value. And if they have any sort of
• 18:18
  Speaker 2: blowback by consumers, all you have to do is slightly
• 18:22
  Speaker 2: lower your rental price, which you can do now because
• 18:24
  Speaker 2: you're making up all of this lost revenue from the
• 18:27
  Speaker 2: dents and things along those lines.
• 18:29
  Speaker 4: I just wouldn't rent from Hurts. That could have happened
• 18:31
  Speaker 4: in a parking lot. Somebody's carriage could have scraped my car,
• 18:34
  Speaker 4: so that seems unreasonable. If they're really charging for scratches,
• 18:38
  Speaker 4: that's completely unreasonable. Or dings even Yeah, I would call
• 18:42
  Speaker 4: that ordinary wear and tear stuff.
• 18:44
  Speaker 2: Yeah, I guess. But my point would be you might
• 18:46
  Speaker 2: not rent from Hurts. But for the vast majority of Americans,
• 18:50
  Speaker 2: the only thing they care about when renting your car,
• 18:53
  Speaker 2: just like when buying a plane ticket, is the price.
• 18:56
  Speaker 2: I don't think this is going to hurt them in
• 18:58
  Speaker 2: one tiny bit. I think the blowback would have to
• 19:02
  Speaker 2: be pretty severe for this to hurt their business model.
• 19:05
  Speaker 4: It depends on how strictly they how rigidly they apply this.
• 19:10
  Speaker 4: I mean, if they relent when you call and protest
• 19:13
  Speaker 4: like your credit card company does if you're a day
• 19:15
  Speaker 4: late because you changed your bank account and they try
• 19:17
  Speaker 4: to debit.
• 19:18
  Speaker 2: You know that sure routine that game Mark changes his
• 19:22
  Speaker 2: bank account every month for something to get a grace period. Yeah,
• 19:26
  Speaker 2: quick break, We'll be back with a trivia whenever. When
• 19:28
  Speaker 2: we returned, bringing.
• 19:40
  Speaker 1: The latest financial news straight to your radio. Every day,
• 19:44
  Speaker 1: it's the Financial Exchange on the Financial Exchange Radio Network.
• 19:50
  Speaker 1: Time now for Wall Street. Watch a complete look at
• 19:54
  Speaker 1: what's moving markets so far today right here on the
• 19:57
  Speaker 1: Financial Exchange Radio Network.
• 19:59
  Speaker 3: Market's currently positive territory as President Trump's tax bill heads
• 20:03
  Speaker 3: back to the House for final approval.
• 20:04
  Speaker 2: Wall Street also.
• 20:05
  Speaker 3: Reacting to the ADP private sector report that missed expectations
• 20:10
  Speaker 3: ahead of the all important June jobs report due out
• 20:13
  Speaker 3: tomorrow morning and as of an hour ago, President Trump
• 20:16
  Speaker 3: said that the US has struck a trade deal with
• 20:18
  Speaker 3: Vietnam that includes a twenty percent tariff on the on
• 20:22
  Speaker 3: Vietnam's imports to the US. In turn, American goods will
• 20:26
  Speaker 3: enter Vietnam duty free in exchange for the lower terriffs.
• 20:30
  Speaker 3: Right now, the Dow is up minor only twenty three
• 20:35
  Speaker 3: points here SMP five hundred is up by about a
• 20:37
  Speaker 3: quarter percent, and the Nasdaq is up by three quarters
• 20:40
  Speaker 3: of a percent. Russell two thousand is up nearly seven
• 20:43
  Speaker 3: tenths of one percent. Ten year Treasury yield up three
• 20:46
  Speaker 3: basis points at four point two eight percent. In crude
• 20:50
  Speaker 3: oil is up nearly eight tenths of a percent higher,
• 20:52
  Speaker 3: trading just below sixty six dollars a barrel. Tesla missed
• 20:57
  Speaker 3: estimates for second quarters deliveries, where it saw a thirteen
• 21:00
  Speaker 3: percent decline from a year ago. This marks Tesla's second
• 21:03
  Speaker 3: straight year over year decline in vehicle deliveries for the
• 21:07
  Speaker 3: second quarter. However, Tesla stock is up four percent. Meanwhile,
• 21:11
  Speaker 3: Microsoft announced it will lay off about nine thousand employees,
• 21:14
  Speaker 3: a move that will affect less than four percent of
• 21:18
  Speaker 3: its global workforce. Microsoft shares are flat on the news. Elsewhere,
• 21:22
  Speaker 3: a Constellation Brands posted lower quarterly profit and sales amid
• 21:26
  Speaker 3: softer consumer demand. Its survey research found that consumers concerns
• 21:31
  Speaker 3: about personal finances led to fewer social gatherings and less
• 21:35
  Speaker 3: shopping and convenience stores and gas stations. Shares in the
• 21:39
  Speaker 3: Corona and Modella Modello beer maker up by four percent.
• 21:44
  Speaker 3: Healthcare companies senteen said earnings will fall well short of
• 21:47
  Speaker 3: expectations and also withdrew its financial guidance for the year.
• 21:51
  Speaker 3: That stock tanking by thirty eight percent, and JP Morgan
• 21:54
  Speaker 3: upded's dividend and authorized fifty billion dollars of stock buybacks
• 21:58
  Speaker 3: after passing a federal reserve stress test. Other major banks,
• 22:03
  Speaker 3: including Bank of America and Wills Fargo, also hiked their dividends.
• 22:07
  Speaker 3: All of those stocks are seeing minor gains on the day.
• 22:11
  Speaker 3: I'm Tucker Silva and that is Wall Street Watch and
• 22:14
  Speaker 3: the trivia question we asked in the prior segment was
• 22:16
  Speaker 3: who played Larry David's wife in Kirby r Enthusiasm. That
• 22:20
  Speaker 3: will be Cheryl Hines, the wife of Robert Kennedy Junior,
• 22:23
  Speaker 3: played Larry David's both wife and ex wife on Kirby
• 22:28
  Speaker 3: Enthusiasm from two thousand to twenty twenty four. Bill from
• 22:32
  Speaker 3: Westwood Masses are a winner today taking on a Financial
• 22:35
  Speaker 3: Exchange Show T shirt and we play trivia every day
• 22:38
  Speaker 3: here on the Financial Exchange. See complete contest rules at
• 22:41
  Speaker 3: Financial Exchange Show dot com.
• 22:43
  Speaker 2: Mark We kicked off the show this morning and shortly
• 22:47
  Speaker 2: after a deal on trade was announced with Vietnam. As
• 22:50
  Speaker 2: Tucker insinuate or mentioned here, Vietnamese made products coming into
• 22:55
  Speaker 2: the United States will now face a twenty percent tariff
• 22:59
  Speaker 2: rates compared to the forty six percent rate that was
• 23:02
  Speaker 2: mentioned by the President on April second and then suspended,
• 23:08
  Speaker 2: so quite a bit lower than was initially announced. Major
• 23:11
  Speaker 2: companies like Gap, Nike, Lulemon all do a substantial amount
• 23:15
  Speaker 2: of manufacturing here. Sorry here by that I mean Vietnam. Look,
• 23:22
  Speaker 2: I think when a few sides that I have to
• 23:25
  Speaker 2: this one. If you are Nike, if you are any
• 23:29
  Speaker 2: of these companies trying to sort this out, this means
• 23:31
  Speaker 2: a few things. One at least, now you can actually
• 23:34
  Speaker 2: plan if you have a signed trade deal that says, hey,
• 23:37
  Speaker 2: you know, Vietnamese made imports are going to be facing
• 23:39
  Speaker 2: this twenty percent tariff rate, you can basically build that
• 23:43
  Speaker 2: into your business plan, decide how much you're going to
• 23:45
  Speaker 2: increase prices. Pose, Yeah, until it changes, you can't really
• 23:50
  Speaker 2: in my mind, shift manufacturing.
• 23:52
  Speaker 6: Right.
• 23:52
  Speaker 2: This wouldn't cause you to say, hey, we're going to
• 23:55
  Speaker 2: move a whole bunch to Malaysia because we don't know
• 23:57
  Speaker 2: what the tariff rate will be from Malaysia yet. But
• 24:00
  Speaker 2: as you get more of these deals announced, companies can
• 24:02
  Speaker 2: at least deal with them. Second thing that I'm pretty
• 24:06
  Speaker 2: sure of, none of these companies are gonna be talking about, hey,
• 24:09
  Speaker 2: let's make our next set of shoes or Spandex pants
• 24:12
  Speaker 2: here in New England or anywhere in the United States
• 24:16
  Speaker 2: based on a twenty percent tariff rate. So my read
• 24:19
  Speaker 2: on this goes back to, hey, what's the purpose of
• 24:23
  Speaker 2: these tariffs? This one appears to be pretty much solely
• 24:27
  Speaker 2: for the purpose of raising revenue here in the United States. Yeah,
• 24:31
  Speaker 2: it'll raise It's not gonna cause Nike to say, hey,
• 24:34
  Speaker 2: we can suddenly make shoes in the United States. No way.
• 24:37
  Speaker 4: At twenty we had a deficit in goods of about
• 24:40
  Speaker 4: one hundred and twenty billion dollars last year with Vietnam.
• 24:44
  Speaker 4: That was roughly double the amount four years before that,
• 24:47
  Speaker 4: and it had doubled in the four years prior to that.
• 24:50
  Speaker 4: So all l sql assuming people don't substitute other goods
• 24:55
  Speaker 4: for Vietnamese goods as a result of this, Yeah, it
• 24:57
  Speaker 4: might raise twenty billion dollars. So if the purpose is
• 24:59
  Speaker 4: just to raise revenue and in demand is relatively insensitive
• 25:04
  Speaker 4: to a change of this magnitude, I guess you could
• 25:07
  Speaker 4: call that a victory. This will probably do nothing for
• 25:10
  Speaker 4: the overall trade deficit. It's not clear to me no
• 25:13
  Speaker 4: what the objective is and how we determine whether or
• 25:15
  Speaker 4: not this has worked in a year or two.
• 25:18
  Speaker 2: So moving on to another trade partner, Japan, which has
• 25:22
  Speaker 2: not been announced any sort of trade deal, and in
• 25:24
  Speaker 2: fact things seem to have escalated a fair bit over
• 25:28
  Speaker 2: the last few weeks now US having a tough time
• 25:33
  Speaker 2: striking a deal here in terms of trade with Japan.
• 25:37
  Speaker 2: It is heavily weighted there as well, in terms of
• 25:41
  Speaker 2: US importing a fair bit more than we export to Japan.
• 25:45
  Speaker 2: For some reason, cars, I guess, for an obvious reason.
• 25:48
  Speaker 2: Cars are getting a lot of mention here because Americans
• 25:50
  Speaker 2: drive a lot of Japanese made cars. There is no
• 25:54
  Speaker 2: Japanese tariff on American made vehicles. I know the President
• 25:57
  Speaker 2: has brought this up several times, that they don't buy
• 25:59
  Speaker 2: our cars. They don't buy our cars seemingly because they
• 26:02
  Speaker 2: don't like our cars. There are no additional costs for
• 26:05
  Speaker 2: American made forwards going into Japan, they just aren't buying them.
• 26:10
  Speaker 2: And the Japanese have historically saved a fair bit more
• 26:13
  Speaker 2: than than Americans have, and therefore a lot of this
• 26:17
  Speaker 2: trade imbalance it seems to be coming from savings rates
• 26:20
  Speaker 2: between the two countries.
• 26:21
  Speaker 4: Look overall, the trade deficit is due entirely to a
• 26:27
  Speaker 4: gap between how much we save and how much we
• 26:29
  Speaker 4: need to finance investment needs domestically. That is not an
• 26:32
  Speaker 4: intuitive observation or it's really a fact. It's called the
• 26:37
  Speaker 4: balance of payments and international finance for a reason. It
• 26:40
  Speaker 4: must balance if when we export, We've talked about this,
• 26:44
  Speaker 4: When we buy a Japanese car, we send dollars to Toyota,
• 26:49
  Speaker 4: they reinvest those dollars here. They either exchange in for
• 26:52
  Speaker 4: another currency, more likely they buy a US treasury, or
• 26:55
  Speaker 4: they invested in a factory here. The reason that that
• 26:58
  Speaker 4: relationship is sustained, if you like, for lack of a
• 27:04
  Speaker 4: better way to put it, is that there's investment demand
• 27:06
  Speaker 4: here that's not met by our domestic savings. And that
• 27:08
  Speaker 4: includes dissavings on the part of the government. There's a
• 27:11
  Speaker 4: reason why government deficits. Federal government deficits and trade deficits
• 27:14
  Speaker 4: both exploded in the nineteen eighties. Domestic dissavings went up.
• 27:18
  Speaker 4: We had to soak up We had to suck up
• 27:19
  Speaker 4: more capital from abroad. That means importing more. These relationships
• 27:25
  Speaker 4: are unavoidable, so it's not going to fix the problem,
• 27:28
  Speaker 4: is my point, Mike.
• 27:30
  Speaker 3: Summer's here in New England and it's the perfect time
• 27:32
  Speaker 3: to trade the daily routine for something extraordinary. Say hello
• 27:36
  Speaker 3: to the US Virgin Islands, America's Caribbean paradise. Explore the
• 27:40
  Speaker 3: vibrant history and flavor of Saint Croix. Lounge on the
• 27:43
  Speaker 3: stunning beaches of Saint Thomas, or find your peace on
• 27:46
  Speaker 3: the quiet shores of Saint John. From the moment you arrive,
• 27:49
  Speaker 3: you'll feel it. You'll fall naturally in rhythm with the
• 27:52
  Speaker 3: herpeat of the islands. There's no passport needed, no currency
• 27:55
  Speaker 3: to exchange, just warm weather, clear blue water, and unforgettable
• 28:00
  Speaker 3: experiences waiting for you. Whether you're planning a romantic escape,
• 28:04
  Speaker 3: a family adventure, or a little both, this is the
• 28:07
  Speaker 3: summer to.
• 28:08
  Speaker 2: Make it happen.
• 28:08
  Speaker 3: Go to visit USVI dot com to learn more and
• 28:12
  Speaker 3: start planning today. That's visit USVII dot com. Your island
• 28:16
  Speaker 3: getaway is closer than you think. The US Virgin Islands,
• 28:20
  Speaker 3: where summer never ends. Book your trip today at visit
• 28:23
  Speaker 3: USVII dot Com.
• 28:26
  Speaker 2: So we will see where that Japan trade deal winds up.
• 28:30
  Speaker 2: There are some areas that the President has a point
• 28:32
  Speaker 2: that Japan is certainly protecting industries. The rice industry is
• 28:37
  Speaker 2: one of them that has been very public about they
• 28:39
  Speaker 2: basically have a closed market on wonder what rice in Japan,
• 28:43
  Speaker 2: And there is very little likelihood that they prime minisink
• 28:48
  Speaker 2: they're all going to switch the minute rice maybe yeah, yeah,
• 28:52
  Speaker 2: but I'm sure they will. So in any case, this
• 28:57
  Speaker 2: is continuing to be negotiating. We will see where it lands,
• 29:00
  Speaker 2: but it is not, at least in my view, as
• 29:03
  Speaker 2: though Japan has a whole bunch of serious restrictions on
• 29:06
  Speaker 2: products coming in. They're the biggest one you can point to,
• 29:08
  Speaker 2: like with Europe, is agricultural restrictions rice, pork products, et cetera,
• 29:12
  Speaker 2: that do not import a whole lot of those from
• 29:14
  Speaker 2: the United States. And will you be able to get
• 29:16
  Speaker 2: those those terriff rates down, those restrictions down, I don't know.
• 29:20
  Speaker 2: But this idea of US having balanced trade with Japan
• 29:24
  Speaker 2: just doesn't seem likely. And what we're finding now is, yeah,
• 29:28
  Speaker 2: just as there are politics in the United States, there
• 29:30
  Speaker 2: are politics in Japan, and the Japanese leader can't just
• 29:33
  Speaker 2: cave because he won't be re elected if he caves
• 29:36
  Speaker 2: to the United States. When it comes to.
• 29:37
  Speaker 4: Trade, those trade barriers make them worse off. Not US
• 29:41
  Speaker 4: agreed free trade. There are always people who don't. There
• 29:45
  Speaker 4: are people who win from free trade. There are people
• 29:48
  Speaker 4: who suffer from free trade. On average, you're better off. Now,
• 29:52
  Speaker 4: that's not to diminish the situation of those who are displaced,
• 29:58
  Speaker 4: such as jobs in the Midwest ward in the nineteen
• 30:00
  Speaker 4: eighties and nineties. The problem is we didn't aggressively enough
• 30:04
  Speaker 4: compensate those who were the losers, so to speak of
• 30:07
  Speaker 4: that from that bargain. When you can import more than
• 30:12
  Speaker 4: you export, you're better off. Your real income is higher.
• 30:16
  Speaker 4: I guess we can wait a year or two and
• 30:18
  Speaker 4: see what the upshot.
• 30:20
  Speaker 5: Of all these.
• 30:22
  Speaker 4: These feverish dealings keeping us in suspense. This deal goes through,
• 30:29
  Speaker 4: that deal's renegged on. How do we judge the successes
• 30:32
  Speaker 4: at a reduction in the trade deficit? Is it an
• 30:34
  Speaker 4: increase in manufacturing jobs? Is it some other metric? We
• 30:38
  Speaker 4: can look at all of those things in a year.
• 30:40
  Speaker 2: We will.
• 30:41
  Speaker 5: Until then, it just seems like a lot of theater.
• 30:45
  Speaker 2: Agree there quick break when we come back. A bit
• 30:48
  Speaker 2: of stack Roulette next on the Financial Exchange.
• 30:51
  Speaker 1: Find daily interviews and full shows of the Financial Exchange
• 30:54
  Speaker 1: on our YouTube page. Subscribe to our page and get
• 30:57
  Speaker 1: caught up on anything and everything you might have missed.
• 31:00
  Speaker 1: This is the Financial Exchange Radio Network. Here the Financial
• 31:05
  Speaker 1: Exchange every day from eleven to noon non Serious XM's
• 31:08
  Speaker 1: business radio channel one thirty two. Keep it here for
• 31:12
  Speaker 1: the latest business and financial news and the trends on
• 31:15
  Speaker 1: Wall Street. The Financial Exchange is now life on Serious
• 31:18
  Speaker 1: XM's Business radio channel one thirty two. He's the Financial
• 31:22
  Speaker 1: Exchange Radio Network.
• 31:27
  Speaker 3: The Financial Exchange is a proud partner of the Disabled
• 31:30
  Speaker 3: American Veterans Department in Massachusetts, and now's the perfect time
• 31:34
  Speaker 3: to register for this year's five K at Castle Island
• 31:37
  Speaker 3: by visiting DAV five k dot Boston. The event will
• 31:41
  Speaker 3: saw out again, so if you're interested in participating, now's
• 31:44
  Speaker 3: the time to reserve your spot. Come out and help
• 31:46
  Speaker 3: support our great American heroes by joining us.
• 31:49
  Speaker 2: For the DAV five k.
• 31:51
  Speaker 3: Visit DAV five k dot Boston to register or to
• 31:55
  Speaker 3: make a donation today. That's DAV fivek dot Boston.
• 31:59
  Speaker 2: I'm gonna be h either doing myself at Costco run
• 32:02
  Speaker 2: later this week or sending a family member on a
• 32:05
  Speaker 2: Costco run. So this next story just rang true to me.
• 32:08
  Speaker 2: So Lulu Lemon has sued Costco over alleged knockoff active wear.
• 32:14
  Speaker 2: This whole space has always kind of confused me. Like,
• 32:16
  Speaker 2: I get how if you grab the Coach label and
• 32:21
  Speaker 2: put it on an item, you're clearly infringing on their
• 32:25
  Speaker 2: on their intellectual property, and you're gonna get sued. But
• 32:29
  Speaker 2: just by designing a similar feeling and looking quarter zip
• 32:34
  Speaker 2: or pair of pants, I just don't really understand how
• 32:37
  Speaker 2: you can be accused of infringing on somebody's patents.
• 32:40
  Speaker 4: Or or until these designs all follow similar trends, right,
• 32:44
  Speaker 4: It's so much like with cars or any other item
• 32:46
  Speaker 4: they look they all look alike.
• 32:47
  Speaker 2: It seems that way to me and I and I
• 32:49
  Speaker 2: have to say, I can't imagine Lulu Lemon's gonna be
• 32:51
  Speaker 2: terribly successful in this for a few reasons. One, the
• 32:55
  Speaker 2: second I read this article, I don't have on a
• 32:57
  Speaker 2: Lululemon clothes, but the quote from the Wall Journal, a
• 33:00
  Speaker 2: Lulu Lemon scuba hoodie costs one hundred and eighteen dollars.
• 33:03
  Speaker 2: A dan skin half zip pullover purchased from Costco will
• 33:07
  Speaker 2: set you back eight dollars. Do you know what this
• 33:09
  Speaker 2: article makes me desperately want to do? Go to Costco
• 33:12
  Speaker 2: and buy the eight dollars hood yea, Let's be really
• 33:14
  Speaker 2: clear about what this is going to happen. The allegations
• 33:19
  Speaker 2: here are that uh, Lulu Lemon accuses Costco of kind
• 33:23
  Speaker 2: of obfuscating where this stuff is sourced from. And more
• 33:26
  Speaker 2: or less, you know, rumors growing that it's made by
• 33:29
  Speaker 2: the same manufacturer that manufacturers Lulu Lemons closed, and they
• 33:32
  Speaker 2: don't really shut down those rumors. If this goes to discovery,
• 33:37
  Speaker 2: then it's going to become clear whether or not this
• 33:40
  Speaker 2: actually is manufactured by the same place. It seems to
• 33:43
  Speaker 2: me like a bit of a losing proposition for Lululemon,
• 33:46
  Speaker 2: who has been struggling significantly over the last few years
• 33:50
  Speaker 2: with their sales and their stock price. But far be
• 33:52
  Speaker 2: it from me. I am no sort of fashion expert.
• 33:55
  Speaker 2: But if I can get a if I can get
• 33:57
  Speaker 2: a hoodie that look that costs one less than a
• 34:02
  Speaker 2: tenth of what Lululemon's gonna charge me, and it's close
• 34:05
  Speaker 2: enough as a knockoff that Lulu Lemon has decided to
• 34:07
  Speaker 2: sue Costco over it. Sign me up, Man, sign me up.
• 34:11
  Speaker 2: I'll buy that all day. What do you have for
• 34:13
  Speaker 2: us for stack Rolet? Mark?
• 34:14
  Speaker 4: Yeah, you know you made a point earlier about immigration
• 34:18
  Speaker 4: slowing immigration flows changing the number of jobs created each
• 34:23
  Speaker 4: month required to keep the unemployment rates steady. I didn't
• 34:27
  Speaker 4: get what you were saying at first, but Mike, you're
• 34:29
  Speaker 4: absolutely right. If indeed we've tightened the flow of reduce
• 34:37
  Speaker 4: the flow of new labor coming from immigrants, that means
• 34:41
  Speaker 4: we need to create fewer jobs per month to make
• 34:44
  Speaker 4: the unemployment rate stay unchanged. It doesn't have to be
• 34:48
  Speaker 4: any more complicated than the statement you made. So while
• 34:51
  Speaker 4: I resent you correcting me on air and demolishing forty
• 34:55
  Speaker 4: five minutes of work, I also appreciate the elegance of
• 35:00
  Speaker 4: your simple point, and I will from now on probably
• 35:05
  Speaker 4: not be making any technical points. I don't unless that
• 35:08
  Speaker 4: Paul Lane, who usually doesn't pay attention to it. But
• 35:12
  Speaker 4: there's did you see the article on that the Wall
• 35:14
  Speaker 4: Street Journal jobs market is starting to fall apart?
• 35:16
  Speaker 2: So this is where I actually want to focus, Mark,
• 35:19
  Speaker 2: because I I'm always looking at what I think is
• 35:22
  Speaker 2: the dominant narrative about the state of the economy right now,
• 35:26
  Speaker 2: and here's where I would position it. To me, the
• 35:29
  Speaker 2: narrative that seems to be taking place that the FED
• 35:31
  Speaker 2: is buying into, certainly Donald Trump is is that GDP
• 35:35
  Speaker 2: is going to be slowing. Labor market growth is slowing.
• 35:38
  Speaker 2: We're seeing it with Young.
• 35:39
  Speaker 4: Trump saying Trump wants lower rates to finance deficits. I
• 35:43
  Speaker 4: we should talk about that tomorrow if it's really slow. True,
• 35:46
  Speaker 4: that's a totally different argument.
• 35:48
  Speaker 2: But okay, so maybe President Trump not there.
• 35:50
  Speaker 5: But I just had to correct you failing insecure.
• 35:52
  Speaker 2: So that's fair. Wall Street Journal J. Powell. I feel
• 35:56
  Speaker 2: as though the dominant narrative seems to be, Hey, unemployment's
• 35:59
  Speaker 2: going to start picking up because we're starting to see
• 36:01
  Speaker 2: the cracks in the foundation, and.
• 36:02
  Speaker 5: They might be right, and they could be.
• 36:04
  Speaker 2: What I don't see anyone talking about is could we
• 36:08
  Speaker 2: be headed for a tighter labor market in the second
• 36:10
  Speaker 2: half of this year because of a bunch of other
• 36:13
  Speaker 2: factors that are going on here? And I would point
• 36:15
  Speaker 2: to tariffs, I would point to lower taxes, especially for
• 36:19
  Speaker 2: overtime and tips. I would point to immigration changes that
• 36:23
  Speaker 2: we are seeing right now is all being contributing factors
• 36:26
  Speaker 2: to what could be a tighter labor market than I
• 36:29
  Speaker 2: think anyone is anticipate.
• 36:30
  Speaker 4: We should talk about effects on what a specialists called
• 36:34
  Speaker 4: labor supply of those lower taxes if we have time tomorrow.
• 36:37
  Speaker 4: It's not necessarily the case that people are going to
• 36:39
  Speaker 4: flood in to those occupations.
• 36:41
  Speaker 5: More than people will work more hours.
• 36:43
  Speaker 2: I'm mainly focused here on the immigration side of it, okay,
• 36:47
  Speaker 2: because what you hear consistently from farmers, from hotel owners,
• 36:51
  Speaker 2: from restaurant owners is my workers who are here legally
• 36:56
  Speaker 2: and have permits to work are not showing up because
• 36:59
  Speaker 2: they are still concerned about those ice raids, and they
• 37:02
  Speaker 2: are concerned about being wrapped up in something even though
• 37:05
  Speaker 2: they probably shouldn't be. Certainly, there's also a bunch of
• 37:09
  Speaker 2: illegal labor that's taking place there that is not showing
• 37:12
  Speaker 2: up for work. But I'm hearing this consistently. I'm hearing
• 37:15
  Speaker 2: it from communities that are affected, that there are workers
• 37:18
  Speaker 2: who are not leaving their homes and not showing up
• 37:20
  Speaker 2: to jobs because of this, and maybe that's maybe that's
• 37:23
  Speaker 2: exactly what's intended here. It's certainly what you know Maga
• 37:27
  Speaker 2: Core has spoken about for years is hey, you know,
• 37:29
  Speaker 2: stop allowing this type of labor to exist and make
• 37:32
  Speaker 2: people pay what is the actual unsubsidized rate of having
• 37:35
  Speaker 2: their yard cleaned up in LA by you know, legal
• 37:39
  Speaker 2: American labor. What that actually practically means for the economy,
• 37:43
  Speaker 2: I don't think people quite realize.
• 37:45
  Speaker 4: Well, does mean fewer hours worked, which does factor into
• 37:48
  Speaker 4: economic growth that we talked about in the first hour.
• 37:50
  Speaker 4: We can also talk about this more tomorrow because it's
• 37:52
  Speaker 4: a slightly longer subject, so it probably means lower growth
• 37:55
  Speaker 4: in the long run, fewer people in the economy contributing, buying,
• 37:59
  Speaker 4: and selling their labor.
• 38:01
  Speaker 2: Well, you are unfortunately correct, Mark that we'll have to
• 38:03
  Speaker 2: talk about it tomorrow on the Financial Exchange because we
• 38:06
  Speaker 2: are out of time. Have a great rest of your afternoon, folks.
• 38:09
  Speaker 2: Markets are in slightly positive territory, with the Nasdaq leading
• 38:13
  Speaker 2: the way up three quarters of percent. Have a great day,
• 38:16
  Speaker 2: Happy forth. We'll be here tomorrow for a job's report.
• 38:19
  Speaker 2: On Thursday,