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Can China ever escape its population spiral? · The Financial Exchange Show

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Speaker 2: Chuck, Mike and talker with you, kicking off our number
1:15
Speaker 2: two of the financial exchange. And as we sit here
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Speaker 2: right now, we got a nice broad based rally taking
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Speaker 2: place across US markets, led by big tech. But the
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Speaker 2: Dow is up three hundred and ninety four points about
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Speaker 2: one percent, the S and P up sixty four points
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Speaker 2: about one percent, back above six thousand bight I add,
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Speaker 2: and the Nasdak nas dak.
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Speaker 3: Is up to nine. Well what what?
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Speaker 2: First of all, there should be no que without a U.
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Speaker 2: And if you do see a queue, isn't it quah?
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Speaker 2: It should be ac k Yeah, nas dak tell me
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Speaker 2: to start saying. Nas DAK is up two hundred and
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Speaker 2: ninety six points right now, about one and a half percent,
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Speaker 2: and that is largely being led by the usual suspects.
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Speaker 2: And Vidia up three and a quarter, Tesla up three
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Speaker 2: and a quarter, Apple, Amazon, Google, and Microsoft all up
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Speaker 2: more than one percent. Tenure US Treasury is flat today
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Speaker 2: at four point six percent. We've got oil down sixty
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Speaker 2: two cents a barrel to seventy eight h six, triple
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Speaker 2: a national average for gas prices continuing to move up
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Speaker 2: though another one point two cents to three eleven and
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Speaker 2: five tenths of a cent. And we've got gold today
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Speaker 2: down thirty cents an ounce barely why they even wake
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Speaker 2: up and trade it today?
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Speaker 3: Who knows?
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Speaker 2: That is at twenty seven to fifty and fifty cents.
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Speaker 2: Let's go over to China, which is a country with
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Speaker 2: lots of people, about seven thousand miles away from the United.
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Speaker 4: States, one point four billion of them, about a.
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Speaker 2: Lot of people, and their population is continuing to decline,
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Speaker 2: even though their birth rate ticked up just a wee
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Speaker 2: little bit. They are seeing a declining population that is
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Speaker 2: likely to continue for the foreseeable future.
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Speaker 3: Yeah, they're very easy.
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Speaker 5: Summary here. Not enough babies and zero immigration or close
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Speaker 5: to it. Yes, not a lot of people saying love
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Speaker 5: what I'm seeing out of China going to move over there.
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Speaker 5: There probably actually would be plenty of people in really
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Speaker 5: impoverished countries who would love to be there, But for
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Speaker 5: a number of reasons, China does not have really any
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Speaker 5: immigration to speak of.
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Speaker 2: No, and you have demographers, which is, how does one
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Speaker 2: become a demographer? How often do you have to demogue?
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Speaker 4: I don't know, Chuck.
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Speaker 2: In any case, frequently they had expected to see an
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Speaker 2: increase in birth numbers.
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Speaker 3: Last year.
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Speaker 2: It was the Year of the Dragon for China, which
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Speaker 2: is an auspicious year to have a baby in, so
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Speaker 2: this is something that was, you know, kind of expected.
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Speaker 2: But overall, the Chinese birth rate is less than half
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Speaker 2: of the typically agreed upon replacement rate of two point
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Speaker 2: one percent, so their population is going going to continue
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Speaker 2: to decline. And I actually found a great chart today.
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Speaker 2: This is from Visual Capitalist, and it's basically these demographic
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Speaker 2: pyramids that you have showing hey, how do demographics in
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Speaker 2: different countries and regions stack up visually? Like what percentage
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Speaker 2: of your population or how many people fall into each
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Speaker 2: little bucket that you have. And India and China right
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Speaker 2: now actually have about the same number of people. Hasn't
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Speaker 2: always been that way, but India's had a pretty strong
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Speaker 2: birth rate in recent years, whereas China obviously has not.
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Speaker 2: China right now is a median age of thirty eight years,
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Speaker 2: and if you look at the population of people age
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Speaker 2: zero to five, it is about half the population of
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Speaker 2: age people fifty to fifty five. So it's like there
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Speaker 2: is a stark difference that's happening there in India. On
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Speaker 2: the other hand, the population of zero to five year
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Speaker 2: olds is about thirty percent larger than fifty to fifty
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Speaker 2: five year olds. Wenna have Japan, which is another country
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Speaker 2: that has a significant demographic problem. They look pretty similar
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Speaker 2: to China quite honestly, in the United States, where we
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Speaker 2: talk about the demographic issues that we have, our median
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Speaker 2: age is thirty nine years, about the same as China,
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Speaker 2: but it is skewed by the fact that we have
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Speaker 2: a larger percentage of our population that is sixty plus.
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Speaker 2: Relative to China, our young people, our younger cohorts are
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Speaker 2: zero to five. Demographic is actually only about fifteen to
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Speaker 2: twenty percent smaller than our age fifty to fifty five.
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Speaker 5: Do you have any data on eighty plus population, because
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Speaker 5: this article estimates their about five Chinese population about five
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Speaker 5: percent eighty and over by the end of this year, and.
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Speaker 2: The US is approximately double that. Okay, interesting, yeah, US
5:46
Speaker 2: is approximately double that. Then you've got Europe, which looks
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Speaker 2: pretty darn similar to the US. The US the reason
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Speaker 2: that we have a growing population while a lot of
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Speaker 2: European countries are pretty stagnant. We have more immigration that
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Speaker 2: happens into the USA. That's been a major driver of
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Speaker 2: population growth. The one place on Earth that is completely
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Speaker 2: defying all of this is Africa, where the median age
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Speaker 2: for the entire continent is somewhere between eighteen and nineteen
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Speaker 2: years old and the zero to five demographic is And
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Speaker 2: again this is visual, so I'm eyeballing this one, and
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Speaker 2: it's kind of hard to eyeball. It looks like it's
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Speaker 2: about five times as big as the age.
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Speaker 3: Fifty to fifty five cohort.
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Speaker 4: Wow.
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Speaker 2: Now, part of this is because life expectancy in Africa
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Speaker 2: sixty three years. Yeah, So that is a pretty stark
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Speaker 2: difference in basically everywhere else that I described. You have
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Speaker 2: a life expectancy that is fifteen to twenty years longer
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Speaker 2: than what is expected there.
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Speaker 5: So bringing this back to China for a moment, Yeah,
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Speaker 5: there has been a lot written about China facing the
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Speaker 5: Japan problem. Japan was the growing economy, the the area
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Speaker 5: of all manufacturing in the sixties, seventies, and eighties. Yeah,
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Speaker 5: and for a number of reasons, probably not population alone,
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Speaker 5: hit several economic lost decades throughout the nineties and two thousands,
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Speaker 5: and I would not be producing an original thought if
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Speaker 5: I compared China's potential economic issues to that of China.
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Speaker 5: There has been to Japan, excuse me, to that of Japan.
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Speaker 5: There has been a lot written about this, and it's
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Speaker 5: certainly no guarantee that China ends up going that direction.
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Speaker 5: But boy, are they really really trying to push different
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Speaker 5: ways to face off with and fix this demographic issue.
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Speaker 4: I'll be honest, They can't outside of the only way
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Speaker 4: that you do.
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Speaker 5: It is is through immigration, and they have a society
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Speaker 5: that that doesn't seem like a possibility.
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Speaker 2: Well, it's not even it's it's not a possibility for
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Speaker 2: a number of different reasons.
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Speaker 1: Sure.
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Speaker 2: The first one is, okay, how do you actually encourage
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Speaker 2: immigration to China, which is a pretty restrictive system to
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Speaker 2: live under for those who have lived elsewhere. The second
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Speaker 2: is the sheer number of people that you would need
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Speaker 2: to bring in in order to make a dent in
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Speaker 2: the problem. Right, It's this is not you know, Portugal
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Speaker 2: with was Portugal have like thirty million people in population.
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Speaker 2: It's not Israel with seven million people, where you're like, hey,
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Speaker 2: if we bring in like a million people, we added
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Speaker 2: like fourteen percent of the population. Ten Portugal is ten
8:41
Speaker 2: to five. Correct, Spain's thirty million? Oh a Tucker noodle
8:47
Speaker 2: that for a little bit. In any case you forty eight.
8:51
Speaker 3: I'm who cares difference.
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Speaker 2: In any case, you got one point four billion people there.
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Speaker 2: Even if you bring in fourteen million, fourteen million people,
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Speaker 2: you've changed the tide by one percent.
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Speaker 3: Yeah, one percent to do that.
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Speaker 2: And think of all the effort that you would have
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Speaker 2: to do in order to bring fourteen million people into
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Speaker 2: China permanently.
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Speaker 5: Yeah, it makes you not scratch your head for terribly
9:19
Speaker 5: long as to why China is so very interested in automation,
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Speaker 5: artificial intelligence and ways that they can make manufacturing really, really,
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Speaker 5: really efficient.
9:30
Speaker 3: Let's take a quick break.
9:32
Speaker 2: When we come back, we'll do a little bit of
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Speaker 2: Now? No, let's talk a little bit about tariff's piece
11:54
Speaker 2: in the Bloomberg. Trump's tariff threat is already panicking the
11:58
Speaker 2: junk debt market, Mike. I'm looking at the junk debt
12:02
Speaker 2: market right now. Junk bonds, as they are affectionately known,
12:07
Speaker 2: they are bonds that are below investment grade. And I'm
12:12
Speaker 2: trying to figure out what the panic is because right now,
12:15
Speaker 2: the high yield the high yield master to option justice
12:20
Speaker 2: spread basically, like, how big is the difference that investors
12:23
Speaker 2: have to pay for high yield bonds relative to investment
12:27
Speaker 2: grade bonds? As I see it right now, it's at
12:30
Speaker 2: two point seventy three percent, which the only other times
12:33
Speaker 2: that that is lower, dating back to like the mid nineties,
12:38
Speaker 2: is nineteen ninety seven, two thousand and seven, and that's it.
12:44
Speaker 2: So it's not actually panicking the junk debt market. Rather,
12:48
Speaker 2: what we are seeing is that borrowers who are in
12:51
Speaker 2: that junk category, they are trying to do some borrowing
12:55
Speaker 2: before tariffs potentially go into effect just because they don't
12:59
Speaker 2: know the effec that they might have on their businesses
13:01
Speaker 2: and they want to lock in these really low rates.
13:04
Speaker 4: Yeah, I'm not buying it.
13:05
Speaker 5: It's becausing the junk If it were actually causing issues
13:09
Speaker 5: so far, you would not just be getting a story
13:13
Speaker 5: about new issues being a problem. There are plenty of
13:16
Speaker 5: companies who borrow money who will be subject to tariffs
13:19
Speaker 5: and are considered junk bonds, and you could go sell
13:23
Speaker 5: their bonds and you would see it reflected in this spread.
13:25
Speaker 5: And this is the best way to measure nervousness about
13:28
Speaker 5: the junk bond market. As Chuck mentioned, is look at
13:31
Speaker 5: the difference between what you get paid from a junk
13:33
Speaker 5: bond compared to an investment grade one.
13:37
Speaker 2: Like as an example, back in the Great Financial Crisis,
13:40
Speaker 2: on December fifteenth of two thousand and eight if you
13:43
Speaker 2: wanted to go issue a junk like generic junk bond,
13:46
Speaker 2: which actually you couldn't issue one if you were buying
13:49
Speaker 2: one that was already issued, you were getting a twenty
13:54
Speaker 2: one percent premium over investment grade bonds in order to
13:57
Speaker 2: do that.
13:57
Speaker 3: That was the average that you saw there.
13:59
Speaker 2: If you go back to twenty eleven peak of the
14:03
Speaker 2: Euro debt crisis double dip procession fears, you are getting
14:07
Speaker 2: paid eight point seven percent above investment grade in the
14:12
Speaker 2: junk bond market, and.
14:13
Speaker 5: To be clear, is because there's a significant risk in
14:16
Speaker 5: those occasions that you don't get paid back.
14:17
Speaker 2: Higher risk of default. If you go back to March
14:20
Speaker 2: of twenty twenty initial outbreak of COVID, you're getting paid
14:24
Speaker 2: nine point eight percent above investment grade corporates in order
14:29
Speaker 2: to bijunk debt today getting paid two point seventy three.
14:33
Speaker 2: There is no fear in the junk bond market. Again,
14:37
Speaker 2: this is the only other comps that I have on
14:40
Speaker 2: record dating back thirty years are nineteen ninety seven and
14:44
Speaker 2: two thousand and seven.
14:45
Speaker 5: So it's a reliable place to look for a f
14:48
Speaker 5: your gauge, but it's just not flashing any signals right now.
14:51
Speaker 2: Oh really, isn't piece in Bloomberg in this god Crypto
14:56
Speaker 2: markets moving over the last twenty four hours, President like
14:59
Speaker 2: Donald Trump is playing to release an executive order elevating
15:01
Speaker 2: crypto as a policy priority and giving industry insiders a
15:05
Speaker 2: voice within his administration. According to people familiar with his plans,
15:09
Speaker 2: the orders expected to name crypto as a national imperative
15:13
Speaker 2: and potentially guide government agencies to work.
15:16
Speaker 3: With the industry.
15:17
Speaker 2: Now, I think on some things, like I've generally been
15:20
Speaker 2: kind of open to like, hey, we'll see what happens
15:22
Speaker 2: on tariffs, you know, we'll see how this all goes.
15:25
Speaker 2: I just I don't understand why crypto should have any
15:29
Speaker 2: kind of US national importance. Everyone involved in crypto continues
15:33
Speaker 2: to tell me how important it is.
15:35
Speaker 4: Without explaining why.
15:36
Speaker 2: But they can't ever tell me why it's important to
15:40
Speaker 2: be on the forefront of crypto, And specifically the ones
15:44
Speaker 2: that like actually tell me something, they're like, well, you know,
15:46
Speaker 2: it's it's something that's decentralized. So you want the United
15:51
Speaker 2: States to build a strategic bitcoin reserve. That seems like
15:56
Speaker 2: you're centralizing something. I can't get any good answers about
16:00
Speaker 2: why crypto is important other than number goes up. Which look,
16:03
Speaker 2: if the number goes up in your portfolio and you're
16:05
Speaker 2: happy with it, fine like that, you do you might?
16:08
Speaker 2: I can't get anything else out of them.
16:11
Speaker 5: My problem is there's a differentiator here between making cryptocurrency
16:15
Speaker 5: a national priority, as has been discussed here, versus an
16:19
Speaker 5: incoming administration saying we are going to make it a
16:22
Speaker 5: priority to focus less on regulating this industry in the
16:25
Speaker 5: same way that the previous administration does. That latter point,
16:29
Speaker 5: I think would be reasonable and justifiable from a number
16:33
Speaker 5: of different perspectives in the incoming Trump administration to say, look,
16:36
Speaker 5: the previous sec had unreasonable expectations for this industry and
16:42
Speaker 5: did everything they could prevent it from becoming mainstream, and
16:44
Speaker 5: we are going to take a more hands off approach
16:47
Speaker 5: to regulation of the industry. I might disagree, but at
16:51
Speaker 5: least I can understand that there's a reasonable case to
16:53
Speaker 5: be made there, at least to your point, where do
16:57
Speaker 5: you benefit the American public by building a bitcoin reserve?
17:02
Speaker 5: Where do you benefit the American public by I don't
17:05
Speaker 5: even know what else we're talking about on this front deregulation.
17:10
Speaker 5: Sure got it understood, that's you know, long history of
17:13
Speaker 5: what Republicans stand for.
17:14
Speaker 4: All on board.
17:17
Speaker 5: This other priorities making it a national priority. I don't
17:23
Speaker 5: understand one bit how that benefits the average American person.
17:29
Speaker 2: And I've been open to like the general idea of hey,
17:32
Speaker 2: crypto could have some interesting use cases. Look, it's it's
17:36
Speaker 2: been around for a decade now.
17:38
Speaker 5: It comes back to the same thing that we explained
17:40
Speaker 5: about investments all the time. Can you explain this in
17:44
Speaker 5: three sentences to a ten year old? That's a good
17:48
Speaker 5: threshold for like any investment that you are going to make,
17:52
Speaker 5: is this is why I am buying this, This is
17:54
Speaker 5: how it is going to benefit me or the individuals
17:58
Speaker 5: I don't like, forget about a.
18:00
Speaker 4: Ten year old.
18:01
Speaker 5: I haven't seen anyone make a compelling argument other than well,
18:04
Speaker 5: the Trump administration is banking a national priority, so it's
18:06
Speaker 5: going to go up in value. Look out like that's
18:09
Speaker 5: the main argument I've made is or I've heard is
18:12
Speaker 5: good speculation tool.
18:14
Speaker 2: Well, here's the thing absent being paid like dividends by
18:17
Speaker 2: a company where you're returning your capital that way or
18:19
Speaker 2: something along those lines. Ultimately, everyone is looking for someone
18:23
Speaker 2: to take them out at a higher price than they
18:24
Speaker 2: went in sure. The question is like, what's the compelling
18:28
Speaker 2: reason why it should happen? And with some companies you
18:31
Speaker 2: can say, okay, well, like the market is.
18:32
Speaker 3: Growing, and they're growing.
18:34
Speaker 2: With crypto, the only thing that you get to is
18:37
Speaker 2: there's a limited supply. Okay, but there's a limited supply
18:42
Speaker 2: of a lot of things. Why why is this going
18:44
Speaker 2: to be the one that matters? And I'm not I'm
18:48
Speaker 2: not poo poohing like those who have made millions of
18:50
Speaker 2: dollars on it to this point, like congratulations, like you
18:54
Speaker 2: as long as like you've realized some of that and
18:56
Speaker 2: been able to use it for your life, you've won
18:58
Speaker 2: Like that, that's great.
19:00
Speaker 3: But what does it do?
19:03
Speaker 5: Man? No, No, beyond all that, I don't really care
19:06
Speaker 5: what it does. You can speculate on whatever you want.
19:09
Speaker 5: Explain to me why the US government needs to make
19:11
Speaker 5: it a national priority? Yes, Like I don't care about
19:14
Speaker 5: all the round.
19:15
Speaker 2: There are some things like semiconductors where you're like, yes,
19:17
Speaker 2: make it a national priority, because without them our life
19:20
Speaker 2: is very different.
19:22
Speaker 3: What would happen if there's no crypto in the US.
19:25
Speaker 3: I don't know. Go back to what it was before
19:27
Speaker 3: crypto fifteen years ago. Let's take a quick break. When
19:30
Speaker 3: we come back. We got the trivia answer after this.
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Speaker 7: Let's see.
20:39
Speaker 5: Do we want to talk about inflation? No, there's another
20:42
Speaker 5: FED member. She's also suspicious of cutting rates when inflation
20:46
Speaker 5: is this high. Good fine done.
20:50
Speaker 3: There's nothing there. Let's see.
20:53
Speaker 4: I want to talk about salt.
20:55
Speaker 2: I do too, so it's my favorite of all the spices.
21:01
Speaker 3: But that's not the one we're talking about.
21:02
Speaker 2: We're talking about the state and local tax deduction referred
21:06
Speaker 2: to assault and back in twenty seventeen when President Trump
21:09
Speaker 2: passed the Tax Cuts and Jobs Act. One of the
21:12
Speaker 2: provisions in there was a ten thousand dollars limit on
21:15
Speaker 2: the amount of state and local taxes that can be
21:17
Speaker 2: deducted on a federal income tax return. And it was
21:23
Speaker 2: constitutionally challenged by a bunch of Northeastern states, most notably
21:27
Speaker 2: in New York, New Jersey, Maryland, and Connecticut. That was unsuccessful.
21:32
Speaker 2: It is something where you have a whole bunch of
21:36
Speaker 2: lawmakers from high tax areas that are Republicans. They've gone
21:40
Speaker 2: to visit President elect Trump and say, hey, if we
21:45
Speaker 2: want to extend tax cuts, we've got to do something
21:47
Speaker 2: about this salt cap because it's hurting our constituents. And
21:51
Speaker 2: so the question is, well, okay, what's the reality about
21:56
Speaker 2: who's being impacted by the salt cap and should we
21:59
Speaker 2: be making changes to it?
22:02
Speaker 4: Yeah?
22:03
Speaker 3: Is that fair?
22:03
Speaker 5: And the article ass raised the salt cap is supposed
22:07
Speaker 5: to benefit whom exactly?
22:09
Speaker 4: And the answer is rich people in blue states, yes,
22:15
Speaker 4: pretty easy.
22:15
Speaker 2: Powerful constituency, yeah, but helped get you elected. It's kind
22:20
Speaker 2: of a question where you're like, what are we really
22:23
Speaker 2: doing here? Because it's also going to have a significant
22:25
Speaker 2: cost if you're talking about raising the salt caps and
22:30
Speaker 2: or getting rid of it, and I think there's a question,
22:32
Speaker 2: there's a case to be made where Hey, let's say
22:36
Speaker 2: that you are a family in New England and what
22:41
Speaker 2: are averaging comes in New England. They're probably higher than
22:43
Speaker 2: the rest of the country. So let's say that the
22:45
Speaker 2: household income eighty thousand.
22:48
Speaker 4: Yeah, high, high tens of thousands.
22:51
Speaker 2: Okay, so eighty thousands. So let's say in most states
22:54
Speaker 2: in New England, excluding New Hampshire, which has higher property taxes,
22:58
Speaker 2: we'll get to them in a minute. Let's say the
23:00
Speaker 2: average person is paying somewhere in the ballpark of five
23:04
Speaker 2: percent on their income. Sure, okay, so they're paying four
23:07
Speaker 2: thousand dollars a year in income tax.
23:09
Speaker 3: Yep.
23:10
Speaker 2: They are paying property taxes on homes that are again
23:13
Speaker 2: more valuable than the rest of the country. Let's say
23:16
Speaker 2: the average home in New England is tax you know,
23:20
Speaker 2: the tax value, because that's what matters, called five hundred
23:23
Speaker 2: thousand stead of four hundred thousand.
23:24
Speaker 3: Okay, okay.
23:26
Speaker 2: Tax rates are typically somewhere in the range of one
23:28
Speaker 2: to one to quarter percent of that a year, so
23:30
Speaker 2: call it five to six thousand bucks.
23:31
Speaker 5: Okay, so you've come up so far with about nine
23:34
Speaker 5: to ten thousand dollars in state and local taxes.
23:36
Speaker 3: Correct the average family in New England.
23:39
Speaker 2: I'm not saying all of them, because again there's plenty
23:41
Speaker 2: of you listening that are like, hey, I make more
23:43
Speaker 2: than that, Like I'm getting that, I'm getting somewhere. But
23:45
Speaker 2: I would say the average family in New England probably
23:48
Speaker 2: doesn't feel a huge impact from this.
23:50
Speaker 1: No.
23:51
Speaker 2: If you are talking about the average family inside of
23:54
Speaker 2: four ninety five in Boston, yeah, they certainly do because
23:58
Speaker 2: they're probably paying state and local taxes. They're closer to
24:02
Speaker 2: twenty to twenty five thousand a year as my guess.
24:04
Speaker 3: And again this is a.
24:05
Speaker 2: Big population talking probably a million people, where that might
24:08
Speaker 2: be the average. If you talk to people in Portland, Maine,
24:12
Speaker 2: where property values are higher and incomes are probably higher
24:15
Speaker 2: than the rest of the state of Maine, that's probably.
24:17
Speaker 3: The case as well.
24:18
Speaker 2: There's people you know on the Portland affiliate listening to
24:21
Speaker 2: us or are like, they're not in the long going, yep,
24:23
Speaker 2: I pay way more in taxes than ten thousand years,
24:25
Speaker 2: so we get it.
24:26
Speaker 4: Southern Connecticut, same story as the greater Boston area.
24:30
Speaker 2: So I think there's a case to be made, hey,
24:32
Speaker 2: because of high cost of living areas even within these states,
24:35
Speaker 2: could you, you know, talk about do we want to
24:37
Speaker 2: raise the salt cap from ten thousand to twenty thousand
24:40
Speaker 2: or ten to twenty five. I think there's at least
24:43
Speaker 2: a reasonable case there. I don't know how much it's
24:46
Speaker 2: going to cost, But in terms of do you get
24:49
Speaker 2: rid of it altogether given all of the other fiscal
24:52
Speaker 2: issues that we're talking about, in the cost of doing so,
24:56
Speaker 2: it's kind of a hard hard one to justify give
25:00
Speaker 2: in where we are.
25:01
Speaker 5: Today, Well, it's all going to come down to how
25:04
Speaker 5: much are you willing to spend more on deficits? Right Like,
25:08
Speaker 5: I'm sure there are lawmakers who are going to be
25:11
Speaker 5: pushing hard to do away with the salt cap entirely
25:14
Speaker 5: and allow multimillionaires in New England to deduct every penny
25:19
Speaker 5: of taxes that they pay to the Commonwealth or to
25:22
Speaker 5: Connecticut or to Maine or any of these states. That
25:26
Speaker 5: would cost a lot of money to the federal government.
25:29
Speaker 5: And so what's a what's a bigger priority? That or
25:32
Speaker 5: cutting corporate taxes that or cutting the highest federal income
25:36
Speaker 5: tax bracket that, or doing away or even increasing further
25:41
Speaker 5: the estate tax limit. There are so many policy priorities,
25:44
Speaker 5: not the least of which we're cutting taxes on. So
25:46
Speaker 5: security tips over time, Like, you can't just have a
25:50
Speaker 5: lot of competing, can't just have all fun all the time?
25:54
Speaker 3: We can? We can. I know I've become.
26:00
Speaker 5: You've been the crotchety old man. Get off my lawn
26:02
Speaker 5: for a number of years, Chuck, This isn't I know.
26:04
Speaker 2: It started with the drones and now it's with the
26:07
Speaker 2: salt cap. Yeah, I'm just getting crotchetier and crotchetier. That
26:13
Speaker 2: should be the new name of our show, Crotchety and Crotchetyer,
26:17
Speaker 2: the crochety Exchange.
26:18
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27:22
Speaker 2: So uh, this is another piece that I just I
27:26
Speaker 2: love the dichotomy between what's said in the headline and
27:29
Speaker 2: what's actually going on. Electric vehicle sales have stumbled. What
27:31
Speaker 2: went wrong and what it talks about is that sales
27:35
Speaker 2: of electric passenger vehicles and plug in hybrids climbed by
27:38
Speaker 2: twenty four percent and twenty twenty four.
27:40
Speaker 4: It's making up a fifth of new sales, isn't it.
27:42
Speaker 2: Yes, it's the highest percentage of new sales that we've
27:45
Speaker 2: had in the United States. Ever, now the rate of
27:48
Speaker 2: growth is slowing, but that doesn't mean that the sales stumbled.
27:52
Speaker 2: So again, I think there's there's something when we talk
27:54
Speaker 2: about evs They are still growing in terms of market share,
27:58
Speaker 2: they are just not growing as rapidly as they used to.
28:02
Speaker 2: In particular, the US saw EV sales up by seven
28:05
Speaker 2: percent last year, and and really the problem here for
28:08
Speaker 2: automakers is they were projecting annual like twenty to forty
28:12
Speaker 2: percent gains in EV sales and they're seeing mid to
28:17
Speaker 2: high single digits. Yeah, and so it still is something
28:21
Speaker 2: where automakers are now trying to, you know, revamp their
28:24
Speaker 2: plans given what the real demand looks like for these things.
28:28
Speaker 2: But I think it's it's one where, especially on the
28:32
Speaker 2: hybrid side of things, I think there's a ton of
28:35
Speaker 2: latent demand there for people that look at it and say, yeah,
28:39
Speaker 2: I like the idea of better gas mileage and the
28:41
Speaker 2: way some of these new hybrids are being utilized. Hey,
28:44
Speaker 2: they're not just using the electric motor as you know,
28:48
Speaker 2: something to boost mileage, but you can also use it
28:51
Speaker 2: in conjunction with the internal combustion engine to boost power
28:54
Speaker 2: and acceleration and things like that.
28:56
Speaker 5: I'm just gonna keep I'm just gonna keep bringing it up.
28:58
Speaker 5: I love, love, love the idea of the full ev
29:01
Speaker 5: with the gas generator. Get it here sooner.
29:04
Speaker 2: There's the ram Rams coming out a pickup version of
29:09
Speaker 2: that this year. There's another one that's on the market
29:11
Speaker 2: also already, I forget haven't seen it. I thought someone
29:14
Speaker 2: else was already. Maybe someone's coming to market this year.
29:17
Speaker 2: And then the one that I'm particularly interested in is
29:19
Speaker 2: the revitalization of the Scout brand in a couple of years.
29:22
Speaker 4: Dw doing that.
29:23
Speaker 2: They are, I'm wondering what the demand is going to be.
29:28
Speaker 2: They announced they recently passed fifty thousand refundable pre orders. Now,
29:32
Speaker 2: keep in mind that the cyber Truck had two million
29:34
Speaker 2: refundable pre orders and they've basically run out of buyers
29:37
Speaker 2: for them within the first year.
29:38
Speaker 3: Correct.
29:39
Speaker 2: But I also wonder if people are behaving differently than
29:41
Speaker 2: they did when they were pre ordering these things a
29:43
Speaker 2: couple of years ago. But I'm wondering how much juice
29:47
Speaker 2: is there from these pre orders. And I don't really
29:50
Speaker 2: have any good answers. There's take a quick break.
29:53
Speaker 3: When we come back. We're joined by Paul A Monica
29:55
Speaker 3: from Baron's. Right after this.
29:58
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30:28
Speaker 7: Ladies and gentlemen, the weekend as promised for now, joined
30:38
Speaker 7: by Paulmonica from Barons And we're talking Trump Media today.
30:44
Speaker 3: Paul, how you doing.
30:46
Speaker 8: I'm good to there are you?
30:47
Speaker 3: Uh, we're doing well.
30:48
Speaker 1: So.
30:49
Speaker 2: Trump Media and Technology Corporation has been a publicly traded
30:52
Speaker 2: company for when did they actually complete this back acquisition?
30:56
Speaker 2: I can't remember now.
30:58
Speaker 8: Yeah, it was late March of twenty twenty four, so yeah,
31:03
Speaker 8: it'll be a year, you know, relatively soon.
31:07
Speaker 2: And currently company's got a market cap of nine billion dollars.
31:10
Speaker 2: According to their most recent financials, UH revenue for the
31:15
Speaker 2: last twelve months is about three point seven million dollars.
31:18
Speaker 2: So how do we reconcile this as an actual business
31:21
Speaker 2: as opposed to you know, kind of what it was
31:23
Speaker 2: used as this year, which is a vehicle for investors, traders,
31:27
Speaker 2: gamblers to use it to bet on the fortunes of
31:30
Speaker 2: Trump in the presidential election.
31:33
Speaker 8: Yeah, it's a great question. I mean, this is still
31:36
Speaker 8: a company that is incredibly tiny in the grand scheme
31:42
Speaker 8: of things when you look at other social media stocks,
31:46
Speaker 8: much smaller obviously than meta platforms, but even you know,
31:51
Speaker 8: tinier than companies like Snapchat and read It as well.
31:56
Speaker 8: So it's hard to really get a sense of what's
32:00
Speaker 8: going to drive the stock other than you know, a
32:04
Speaker 8: continued fascination with Trump. I mean, we know that the
32:09
Speaker 8: fundamentals are not particularly strong for the company, whether or
32:14
Speaker 8: not Trump Medium makes some acquisitions which they've hinted at
32:19
Speaker 8: potentially in fintech cryptocurrencies that could be an avenue of
32:25
Speaker 8: growth to the company. But you know, I think, as
32:27
Speaker 8: you pointed out, it's been largely a vehicle for you know,
32:32
Speaker 8: retail investors, probably ones that are Trump supporters, to kind
32:36
Speaker 8: of show their affinity for the president of Lack, who's
32:41
Speaker 8: about to become the forty seventh president. This is really
32:45
Speaker 8: uncharted territory. What happens next when you have a company
32:50
Speaker 8: that you know is going to be stilled tied to
32:55
Speaker 8: the leader of the free world, but he, in theory,
32:58
Speaker 8: can't really do much at the company because he now
33:02
Speaker 8: has his shares and a revocable trust controlled by his son.
33:06
Speaker 8: He's not going to be, you know, really doing much
33:09
Speaker 8: from an operational standpoint, because he's going to be busy
33:12
Speaker 8: managing the United States of America.
33:15
Speaker 2: And one of the pieces I guess that's just kind
33:16
Speaker 2: of interesting to me is you look at it, and
33:19
Speaker 2: the day after the election on November sixth, the stock
33:21
Speaker 2: closed about thirty six bucks to share. Today it's forty two,
33:25
Speaker 2: and it's not like it's done anything crazy during that time.
33:28
Speaker 2: So you're kind of sitting here just in this holding pattern.
33:31
Speaker 2: Have we ever seen anything like this before?
33:35
Speaker 8: Nothing in recent memory that I can think of. I mean,
33:39
Speaker 8: just remember at the time of Trump's first presidency, and
33:45
Speaker 8: there was a you know, a revgable trust that was
33:47
Speaker 8: set up at that point. I mean, the assets of
33:49
Speaker 8: the Trump Foundation we're all put in that trust. But
33:53
Speaker 8: it was not a publicly traded company. You know, this
33:57
Speaker 8: is really unique, especially also because you know it's a
34:04
Speaker 8: company that is competing with much larger social media firms.
34:09
Speaker 8: Then you throw in the fact that you have Trump
34:14
Speaker 8: romance if you will, with Elon Musk, who is the
34:18
Speaker 8: owner of X formerly Twitter. Uh, you know that that
34:23
Speaker 8: complicates things as well. I mean, I can't imagine that,
34:27
Speaker 8: you know, investors might be ignoring the fact that you know,
34:31
Speaker 8: now that the president elect is back on X after
34:36
Speaker 8: that band was lifted by Musk. It seemingly makes truth
34:40
Speaker 8: Social a little bit less of a uh you know,
34:45
Speaker 8: an investible proposition that makes sense because you don't have
34:50
Speaker 8: that scarcity value if you will not as if truth
34:52
Speaker 8: Social is the only place where Trump will talk, you
34:56
Speaker 8: know he does, you know post on on Twitter X.
34:59
Speaker 2: And well, looking at this, you mentioned hey that that
35:03
Speaker 2: you know, they have a number of potential things that
35:05
Speaker 2: they are kicking around as businesses they may try to
35:08
Speaker 2: acquire or get into. Do any of those seem more
35:11
Speaker 2: likely than others at the moments.
35:14
Speaker 8: I think crypto makes the most sense given how uh
35:19
Speaker 8: you know, Trump has really embraced bitcoin over the past year,
35:24
Speaker 8: and there's the talk of whether or not we could
35:27
Speaker 8: have a bigcoin strategic reserve. With you know, Gary Genstler
35:32
Speaker 8: stepping down as the head of the SEC on inauguration day,
35:37
Speaker 8: we should have much friendlier regulations for crypto from the
35:44
Speaker 8: new regime at the SEC. There were rumors last year
35:48
Speaker 8: of Trump Media potentially buying a crypto company publicly traded
35:53
Speaker 8: called back back Set. At the time that you know
35:56
Speaker 8: wouldn't comment on any rumors and speculations, so that chatter
36:00
Speaker 8: might still be out there if if you had the bet.
36:02
Speaker 8: I mean, fintech and crypto in particular probably makes the
36:07
Speaker 8: most sense for Trump media and technology. I'd say more
36:09
Speaker 8: on the technology side than the media side as a
36:13
Speaker 8: business would be where they would look to expand.
36:16
Speaker 2: All right, very good, Paul, appreciate you joining us today.
36:18
Speaker 2: Have a great weekend and we'll catch up with you soon.
36:22
Speaker 8: Thanks a lot. I have a Gooway.
36:23
Speaker 2: Guys, it's Paul Monica from Baron's talking about Trump Media.
36:29
Speaker 2: What else you got for me?
36:30
Speaker 5: Mike Taylor Swift at the end of the year, allegedly
36:32
Speaker 5: breathing some life into Target. The retailer got a holiday boost,
36:37
Speaker 5: apparently from an exclusive deal to sell the megastars eras
36:40
Speaker 5: tor book.
36:42
Speaker 4: Look.
36:42
Speaker 5: I'd recognize it's Taylor Swift, but I have some rules.
36:46
Speaker 5: You don't make friends with salad or books. I just
36:51
Speaker 5: I don't think that that one is going to work
36:52
Speaker 5: for the American public. I see why Disney was able
36:57
Speaker 5: to kill it with their you know, with their ownership
36:59
Speaker 5: of sexual millionaires hoppers again, but what is this going
37:03
Speaker 5: to do to boost your band brand long term?
37:07
Speaker 4: For Target?
37:08
Speaker 3: Nothing?
37:09
Speaker 5: Absolutely nothing. Disney, you only rights to that movie forever.
37:14
Speaker 5: If that's the case, I don't now. Actually, I think
37:16
Speaker 5: Taylor Swift owns all the rights to the movie, so
37:18
Speaker 5: Disney you might have just seen the temporary boost as well.
37:20
Speaker 5: But again, I don't really think that works for Target.
37:24
Speaker 5: I don't think it's gonna do anything for their long
37:26
Speaker 5: term business, and they're just gonna have to pay a
37:28
Speaker 5: bunch of money in the future if they want to
37:29
Speaker 5: continue to be able to boot sales.
37:31
Speaker 3: Like this did either.
37:32
Speaker 2: If you happen to watch the SpaceX Starship launch last night,
37:35
Speaker 2: no I did. I just I love watching these things,
37:39
Speaker 2: and I got to admit, when you see like the
37:41
Speaker 2: booster stage of the rocket come back down and get
37:44
Speaker 2: caught by the tower, I'm sitting there, I'm like, this
37:47
Speaker 2: is freaking amazing.
37:48
Speaker 3: This is just awesome stuff.
37:50
Speaker 1: Now.
37:50
Speaker 2: That's an awesome part was that the actual starship it disintegrated
37:53
Speaker 2: and exploded mid flight about ten minutes after launch, sending
37:57
Speaker 2: a stream of stuff back down to the atmosphere, which
37:59
Speaker 2: wasn't great. Wait, the thing I always come back to
38:01
Speaker 2: on this, and look, the FA is gonna have some
38:03
Speaker 2: questions because of where the debris was coming down. They
38:05
Speaker 2: had to rewrite a bunch of commercial jetliners so they
38:08
Speaker 2: didn't get hit by the stuff.
38:09
Speaker 3: Real problem.
38:11
Speaker 2: But ultimately, you do have failures when you're trying to
38:15
Speaker 2: send new stuff into space, and that's part of the process.
38:19
Speaker 2: So I again, there's gonna be some questions about where
38:21
Speaker 2: things happen.
38:22
Speaker 3: But I still think this is amazing stuff. We're done
38:25
Speaker 3: for the week.
38:26
Speaker 2: See a Monday on the Financial Exchange.