Latest / The Financial Exchange Show / Are you better off than you were four years ago?

Transcript

Are you better off than you were four years ago? · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:03
  is hosted by employees of the Armstrong Advisory Group, a
• 0:06
  registered investment advisor. All opinions expressed are solely those of
• 0:09
  the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:11
  or anyone else. Investments can lose money. This program does
• 0:14
  not offer any specific financial or investment advice. Please consult
• 0:18
  your own financial, tax, and estate planning advisors before making
• 0:20
  any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:24
  this program do not endorse each other or their services.
• 0:26
  Armstrong and Money Matters Radio do not compensate each other
• 0:29
  for referrals and are not affiliated. This is The Financial Exchange,
• 0:35
  with Mike Armstrong and Mark Vandetti, your exclusive look at
• 0:40
  business and financial news affecting your day, your city, your world.
• 0:44
  Stay informed and up to date about economic and market
• 0:47
  trends plus breaking business news every day. The Financial Exchange
• 0:51
  is a proud partner of the Disabled American Veterans Department
• 0:55
  of Massachusetts. Help us support our great American heroes by
• 0:58
  visiting DAVK dot Boston and making a donation today. The
• 1:03
  dav five K Boston is presented by Veterans Development Corporation.
• 1:07
  Face is the Financial Exchange with Mike Armstrong and Mark Vandetti.
• 1:13
  Speaker 2: Good morning, and welcome back to the Financial Exchange on
• 1:16
  a Friday, as we close out a busy week with
• 1:19
  data with inflation coming out yesterday, with a CPI report,
• 1:23
  earnings kicking off this morning, and markets in positive territory.
• 1:27
  We got the Dow up two hundred ninety nine points,
• 1:29
  seven tenths of a percent, SMP up thirty two points
• 1:33
  half percent, in the NASDAC up about fifty eight points
• 1:35
  or one third of one percent. Those small caps, the
• 1:38
  rustles up thirty points about one point four percent, and
• 1:42
  the yield on the ten year Treasury actually moving down
• 1:45
  very slightly below four point one percent after what's been
• 1:48
  a pretty big jump in the ten year since that
• 1:52
  Job's report last Friday one week ago. I'm just double
• 1:56
  checking and I didn't screw that up there, but yeah,
• 1:58
  one week ago we got that Job's report to end.
• 2:00
  Since that, let's see report on October was it October fourth?
• 2:08
  October third, you've had yields jump on the ten year
• 2:11
  from about three eight five up to over four percent now,
• 2:14
  and just over the last month you've seen him go
• 2:16
  from about three six up to four to one at
• 2:18
  this point in time. We got Producer Price Index this morning,
• 2:23
  which you know some look at as sort of a
• 2:25
  leader into consumer price index and overall inflation. As you
• 2:28
  can imagine, if you are a producer of goods and
• 2:32
  you're seeing prices increase, you will eventually pass those through
• 2:35
  two consumers a month of a month. No big change here,
• 2:38
  and you know, the unadjusted change is about in line
• 2:43
  with where we are with CPI about two percent to
• 2:47
  three percent, So no big shock from anything that I
• 2:50
  saw on PPI, And quite honestly, I just don't follow
• 2:53
  it closely enough to have much to add to it.
• 2:56
  Speaker 3: If you look at the research, which nobody does except
• 2:59
  people interested in this, If you look at the academic
• 3:01
  research in this area, everybody uses CPI and core CPI
• 3:05
  and more robust studies use things like the median in
• 3:07
  which we talked about in trim Demean. But now PPI
• 3:10
  is probably because it's highly correlated with and thus doesn't
• 3:15
  give you additional information, is not paid much attention to
• 3:18
  in the studies that look at inflation behavior over the
• 3:20
  long term.
• 3:21
  Speaker 2: Mark I want to attempt to answer the age old
• 3:26
  election question, are we financially? Are we better off financially
• 3:32
  than we were four years ago? The age old question
• 3:35
  that everybody likes to ask this time, you know, this
• 3:37
  time every four years, Are you better off than you
• 3:41
  were four years ago? Four years ago brings you to
• 3:43
  October of twenty twenty, when we were still in the
• 3:46
  thick of COVID and at a very very different point
• 3:50
  in time. And quite honestly, I don't think that's how
• 3:53
  people are really considering things this time, because we have
• 3:57
  a pretty unique election at this point in time, where
• 4:01
  the end of Trump's office was through COVID. Now you
• 4:05
  have no incumbent necessarily running for president right now, so
• 4:09
  it's a little bit different than the average time you
• 4:11
  asked this question. But how can we attempt to answer
• 4:14
  this question with actual numbers?
• 4:15
  Speaker 3: I don't think we should. I wrote down a bunch
• 4:17
  and as I look at them, I could tell you
• 4:19
  that GDP grew faster under Biden than Trump. We lost
• 4:22
  a lot of jobs under Trump, gained a lot of
• 4:24
  jobs under Biden. But those conclusions are very sensitive to
• 4:28
  the start and end points. Plus, if you feel like
• 4:31
  Biden's leadership on economic matters has been weak, or wrong,
• 4:35
  you don't care. I could tell you unemployment when Trump
• 4:38
  left office was six point four ish now it is
• 4:41
  four point one. But you would retort with I don't
• 4:44
  care number one, I don't or maybe you would retort
• 4:46
  with you, maybe you would respond with I don't trust
• 4:48
  your numbers. I've gotten that one too. So I've sort
• 4:50
  of stopped quoting averages to people because they just don't
• 4:54
  reflect that indefinable sentiment that in the in the very
• 5:01
  early nineteen eighties nineteen eighty specifically, was called malaise. Anybody
• 5:05
  who was around at that time remembers the word malaise.
• 5:07
  It's this indefinable, uneasy feeling about the state of things.
• 5:12
  Jimmy Carter's economy was not terrible. In fact, in real
• 5:15
  GDP terms, his I laugh because you're not going to
• 5:18
  believe it. I have to look it up every time
• 5:20
  I say it. His economic growth record was about as
• 5:24
  good Reagan's was slightly better, sure, but about as good
• 5:26
  as Reagan's. It was just this gent Now, inflation was
• 5:29
  going up. There were a bunch of foreign policy debacles.
• 5:32
  Speaker 2: And that might be the lesson here. Inflation was going on.
• 5:34
  Speaker 3: Inflation kills, Yeah, inflation just kills you, whether or not
• 5:37
  it's the incumbent administration, and certainly wasn't Jimmy Carter's fault.
• 5:41
  Objective aze is my response, and if you're feeling it,
• 5:44
  there's nothing anybody can tell you to make you feel differently.
• 5:47
  Speaker 2: Objectively, you know, if you take a look at any
• 5:50
  number in terms of inflation adjusted income, GDP, stock market,
• 5:55
  any of those actual raw numbers, if you were to
• 5:57
  compare October of twenty twenty to October twenty twenty four,
• 6:00
  I'll just tell you you're going to look better in
• 6:02
  twenty twenty four than you did in October of twenty twenty,
• 6:05
  and you almost always do four years later, look better
• 6:08
  in terms of both income and income inflation adjusted income.
• 6:13
  The problem is when you take a look at October
• 6:15
  of twenty nineteen compared to October of twenty twenty four,
• 6:20
  that's much more of a mixed bag. Still, from an
• 6:23
  inflation adjusted income perspective, you are likely better off. But
• 6:27
  when we think about, hey, how things were going, what
• 6:29
  the trajector was like pre COVID compared to now twenty
• 6:33
  twenty four, I think that's the more apt comparison that
• 6:36
  voters are making as they head into the ballot box. Yeah,
• 6:38
  I think we could.
• 6:39
  Speaker 3: First of all, anyone who didn't like the conclusion would say, well,
• 6:42
  you're just manipulating the numbers. You're cherry picking starting and
• 6:46
  end points. Again, that we are better off today than
• 6:49
  four years ago using any inflation adjusted metric is irrefutable. Sure,
• 6:55
  But whether that's your experience, whether you credit, say the
• 6:59
  current president for that is deeply personal. So you know,
• 7:03
  I'm the biggest fan of using aggregates to take a
• 7:07
  snapshot at a point in time because we don't have
• 7:08
  anything better as anybody else out there. But I also
• 7:11
  acknowledge you may not. These numbers may not reflect your
• 7:15
  lived experience. I don't have data that reflects your or
• 7:20
  your or your lived experience. It's it's pretty personal, I think.
• 7:23
  Speaker 2: Point in case, According to a survey, nearly forty percent
• 7:29
  of Massachusetts residents, one of the most liberal states in
• 7:32
  the country, say that they are financially worse off now
• 7:37
  compared to just a year ago. And so do what
• 7:41
  they mean?
• 7:41
  Speaker 3: Like, how so you make less money in real terms?
• 7:44
  You feel like your standard of living as lower. Those
• 7:46
  are two different ways of saying the same thing. I
• 7:48
  wish we could probe a little deeper, or you just
• 7:50
  don't like the way things are going.
• 7:52
  Speaker 2: I can think of a few reasons compared to a
• 7:54
  year ago where forty percent my student loans had to
• 7:57
  start again, stopped getting stimulus checks, I stopped getting unemployment
• 8:03
  around this time a year ago. I'm just you know,
• 8:06
  I'm not saying that those would be good policies to
• 8:08
  put back in place. But if I'm thinking about, like
• 8:10
  you know, okay, how do I compare it today to
• 8:13
  a few years ago, and all these income metrics that
• 8:15
  we use, well, most of those income metrics that we
• 8:17
  use exclude things like one time payments from stimulus, and
• 8:21
  people are getting that stuff poured on them. Well that's
• 8:23
  years ago. That's in GVP, yep, GDP, but probably not
• 8:26
  counted in like you know, median income or anything like that.
• 8:32
  And so I I do get why forty percent of
• 8:35
  even mass chusetts M.
• 8:37
  Speaker 3: I'm not sorry, I'm not questioning people's response. Sure, this
• 8:40
  is there, this is this is subjective. Yeah, I'm just wondering,
• 8:43
  if you dig a little deeper, what is it specifically,
• 8:46
  because we are in a history.
• 8:48
  Speaker 2: It's more inflation and now the resumption of kind of
• 8:53
  a more normalized economic period. Right, We've we've experienced higher
• 8:58
  prices now and all the stuff that came to the
• 9:02
  rescue over the last few years to help us out
• 9:04
  with the shutdowns and then the inflation, it's all gone.
• 9:08
  And so yeah, there's a bunch of people that are
• 9:11
  feeling like things are worse off for them, whether or
• 9:15
  not it's fundamentally numbers wise. Actually the case, I.
• 9:18
  Speaker 3: Guess my final comment for now on this until the
• 9:21
  next segment anyway, is it's not going to get much
• 9:25
  better in this folks. We got three percent unemployment in
• 9:27
  this state. We've had about three percent little under than
• 9:30
  that GDP growth nationally over the past year. Most researchers
• 9:35
  think the economy speed limit based on labor force growth
• 9:37
  and productivity growth, which is what determines potential GDP, is
• 9:40
  a lot lower than That's we're growing at faster than potential.
• 9:43
  Our little tachometer is in the red zone in the economy,
• 9:46
  as evidence by somewhat stubbornly dug in core inflation that
• 9:51
  we were talking about earlier. Mike, I don't think it
• 9:54
  gets much better than this, and I worry about people
• 9:57
  who think the economy is really bad right now, or
• 9:59
  even just midd because it's it's not middling, it's actually
• 10:02
  its historical terms really good. I'm not saying you should
• 10:06
  recognize that, and what is wrong with you? And why
• 10:08
  aren't you voting for Kamala Harris. I am saying we're
• 10:11
  in real trouble if people are struggling now and we're
• 10:15
  going to need some dramatic policy changes to I don't know,
• 10:18
  support them in the event things really do turn down.
• 10:21
  Speaker 2: Let's take a quick break. When we come back, a
• 10:23
  new argument for you to have with your boss. That's
• 10:25
  next on the Financial Exchange.
• 10:27
  Speaker 1: Tune in for trivia brought to you by Applebee's every
• 10:30
  day at eleven twenty for your chance to win cool prizes.
• 10:34
  Text us at six one seven three, six two one
• 10:37
  three eighty five and use keyword Applebee's. Complete rules are
• 10:40
  available at Financial Exchange Show dot com. This is the
• 10:44
  Financial Exchange Radio Network. Miss any of the show, catch
• 10:48
  up in your convenience by visiting Financial Exchange Show dot
• 10:51
  com and clicking the on demand icon, where you'll find
• 10:54
  all of our interviews in full shows. This is your
• 10:57
  home for the latest business and financial news in New
• 10:59
  England and around the country. This is the Financial Exchange
• 11:03
  Radio Network.
• 11:05
  Speaker 2: Interesting way of kind of categorizing how Americans feel about conflict.
• 11:13
  A survey was done and I'm very interested to hear
• 11:16
  how they asked this question. But the median American worker
• 11:20
  would give up one point seventy five percent of their
• 11:23
  wages in order to avoid conflict. We're talking about, you know,
• 11:29
  asking for raises and dealing with awkward conversations with bosses,
• 11:34
  and just how many Americans are so averse to those
• 11:39
  conversations that to me are just kind of a normal
• 11:44
  part of any business, talking about where my wage goes
• 11:47
  and where my opportunity for improving that wages. But apparently, yeah,
• 11:53
  a big and I do get like how it would
• 11:56
  be really challenging to bring up these conversations if they
• 12:00
  are not being managed by your firm in terms of, Hey,
• 12:03
  every year we have a performance review where we discuss
• 12:06
  your wage and where it's going to be going. That
• 12:07
  would be fairly awkward to bring up if it weren't
• 12:11
  automatically being done for you. In every company that I've
• 12:13
  ever worked for, it's been just part of the normal
• 12:16
  process of being an employee there. I don't know, Mark,
• 12:20
  what would the strategies be to me. The strategy. If
• 12:24
  I'm not getting that conversation from the boss, it's immediately
• 12:29
  go shop myself. I think shop, not shot shot.
• 12:35
  Speaker 3: It is difficult to know how to approach salary negotiations
• 12:39
  because they're not really a negotiation. It's pretty much unilateral.
• 12:42
  So my approach has always been I'd like to make
• 12:47
  more money, but I think you know better what I'm
• 12:49
  worth to the firm, So let me suggest a few
• 12:51
  ways of being more productive, more additive. In the bottom line,
• 12:55
  you tell me what I need to do to make
• 12:56
  more money. I've always tried to put it in the
• 12:58
  employer's court, right That's never worked, but no kidding, sometimes
• 13:03
  it works, sometimes it doesn't. I think it is difficult.
• 13:05
  Speaker 2: I am surprised that you still work for us for
• 13:07
  course credit. I just surprised me like that. You know
• 13:11
  you're still.
• 13:12
  Speaker 3: Bachelor degrees from Northeastern in my time here. Yeah, it's
• 13:16
  it's tough conversation, though, Mike, because sometimes your manager has
• 13:20
  a budget with which to work, and giving more to
• 13:23
  you means taking money away from somebody else and being
• 13:27
  someone who's a little conflict averse myself. I don't like
• 13:31
  nobody likes uncomfortable conversations. But I especially don't I feel
• 13:35
  rude asking for me.
• 13:35
  Speaker 2: So you would fall into this category of worker that
• 13:38
  would give up.
• 13:38
  Speaker 3: No, I wouldn't give up any Well, that's I think
• 13:41
  you probably think you're slightly overpaid if you would be
• 13:45
  willing to know so. And again that's just the median response.
• 13:49
  Speaker 2: There are other interesting ways.
• 13:50
  Speaker 3: I didn't think that's where you were going with this article,
• 13:52
  because they they He goes on to talk about why
• 13:54
  people this is somewhat different topic, why people don't like
• 13:57
  inflation and how that disturb Right, that's part of the circle, right,
• 14:01
  I I jotted that down correctly, didn't I. So this
• 14:03
  is kind of a wide ranging survey.
• 14:06
  Speaker 2: I think it does speak too. Yeah, why why do
• 14:08
  people hate inflation so much? Is because, on average, it
• 14:11
  takes conflict to get your wage to keep pace with it.
• 14:16
  And by conflict, I mean either you need to have
• 14:18
  a tough negotiation with your boss or you need to
• 14:20
  change jobs and move and do these things that are
• 14:23
  by their very nature conflicts and challenge.
• 14:26
  Speaker 3: So if you're up for a review right now, when
• 14:28
  you know inflation was up two and a half percent
• 14:29
  over the last year, and you get two and a
• 14:31
  half percent, that means your real wage is staying constant.
• 14:35
  You can buy the same amount on average with your
• 14:38
  new wage as you could with your old wage. If
• 14:40
  you get less than two and a half percent.
• 14:41
  Speaker 2: You're losing.
• 14:42
  Speaker 3: Stopping the clock today, Yeah, your employer might be trying
• 14:44
  to tell you something, and I think it's okay to
• 14:46
  ask them. Okay, I'm getting a real wage cut here.
• 14:49
  Is that my performance or did you? Am I misreading that.
• 14:56
  Speaker 2: I'm ready to look at it. Either that's indicative of
• 14:58
  my performance or it's indication of something going on with
• 15:01
  the company.
• 15:02
  Speaker 3: Because one argument for inflation that macroeconomists make is it
• 15:06
  allows employers to cut real wages almost imperceptibly, because people say, I.
• 15:12
  Speaker 2: Got two percent, it's better than nothing.
• 15:13
  Speaker 3: I'm better off even though you're not in real terms,
• 15:16
  and that allows wages to reach a so called equilibrium
• 15:19
  so they don't actually have to lay anybody off. I
• 15:21
  don't know how much truth there is to that. The
• 15:23
  evidence is sort of mixed for the economy as all,
• 15:26
  but just be advised, if you get less than inflation,
• 15:28
  you know you're behind eight ball in real terms, and
• 15:31
  it might be worth pushing back is the wrong term
• 15:33
  because that sounds a little bit aggressive, but asking why.
• 15:35
  Speaker 2: So moving on to a whole new subject, I know
• 15:39
  how just how excited you were a mark for last
• 15:42
  night's big event. I think you whipped out your special
• 15:46
  Tesla tequila. You had your flamethrower ready to go. These
• 15:50
  are all products that Elan Musk has sold if you're
• 15:52
  unfamiliar with I think there's a cologne too at one
• 15:55
  point or another, but definitely a tequila.
• 15:57
  Speaker 3: Eleven kids, so it's apparently working. Yeah, there's something in
• 16:01
  that cologne.
• 16:03
  Speaker 2: In any case, he had his event last night at
• 16:06
  seven pm Pacific time ten pm Eastern, so I don't
• 16:09
  think a ton of people on the Eastern seaboard got
• 16:11
  to tune in. But among other items, showing off a
• 16:15
  ROBOTAXI that he's hoping to price under thirty thousand dollars,
• 16:18
  as well as the weirdest looking buss that I've ever seen.
• 16:25
  It looks like something out of some sort of cyberpunk
• 16:28
  futuristic movie. Generally speaking, investors not terribly excited about what
• 16:34
  he had to say, based on what the price of
• 16:38
  its shares are doing this morning. To me, everything that
• 16:42
  they did here was perfectly reasonable and I think exciting
• 16:46
  in many number of ways that hey, there's a vision
• 16:48
  here for a driverless car to actually be usable in
• 16:52
  the near future. The problem, as far as I'm concerned,
• 16:55
  is there is absolutely nothing concrete coming from Elon Musk
• 16:59
  in terms of when they're even going to start manufacturing
• 17:02
  this type of thing. And he's developed a pretty notorious
• 17:06
  reputation now of not meeting his own deadlines. In fact,
• 17:08
  I think he joked about it at the event last night, saying, yeah,
• 17:11
  I'm hoping to have this manufacturer in the next two
• 17:13
  to three years, but I do have to acknowledge that
• 17:15
  I've sometimes been optimistic about my own timelines.
• 17:18
  Speaker 3: Yeah, shareholders are, I guess taking it with an appropriate
• 17:21
  dollup of caution. The stocks to their non all some
• 17:25
  of them are just traders in and out. But the
• 17:26
  stock's down what eight percent today, so the market's rendering
• 17:29
  its verdict is not there we know to discount things
• 17:32
  that we know. He's mister hyperbole, right and prone to
• 17:35
  sort of fantastic self aggrandizing visions. A genius but also
• 17:40
  somewhat of a con artist.
• 17:41
  Speaker 1: Yeah, bringing the latest financial news straight to your radio
• 17:48
  every day, It's the Financial Exchange on the Financial Exchange
• 17:52
  Radio Network. The Financial Exchange Show podcast drops every day
• 17:57
  on Apple, Spotify, and iHeartRadio. Hate that subscribe button, then
• 18:01
  leave us a five star review. You're listening to the
• 18:04
  Financial Exchange Radio Network.
• 18:07
  Speaker 2: Mark On Tuesday. This week, SMP Global Ratings said they're
• 18:10
  considering downgrading Boeing's debt to junk status. Moody's last month
• 18:16
  announced they're considering a similar move. Fitch has highlighted their
• 18:20
  risks but not yet announced an actual review of Boeing's debt. Embarrassing,
• 18:26
  it would be the single larger largest US corporate borrower
• 18:30
  to ever be stripped of its investment grade rating if
• 18:32
  it did come to pass. Practically speaking, why does it
• 18:37
  matter other than just the true embarrassment of what's supposed
• 18:40
  to be a great American manufacturer being considered junk?
• 18:43
  Speaker 3: Yeah, matters mostly for Boeing. They'll be paying higher interest
• 18:46
  costs and their wise will be lower.
• 18:48
  Speaker 2: Because, I mean, they have a bunch of bonds that
• 18:50
  are outstanding right now.
• 18:52
  Speaker 3: On experience, if you get dinged in your credit score,
• 18:56
  your rate goos up. Similarly, when a borrower gets dinged
• 19:00
  by a credit rating agency, their rate goes up, which
• 19:04
  means their profits all else equal, go down. Now, it
• 19:07
  may be that they're implementing an aggressive turnaround plan and
• 19:10
  investors believe in that, and that pushes rates down. It's
• 19:13
  always hard to tease out sure the actual effect of
• 19:16
  something like this. So there's that direct, immediate and obvious
• 19:20
  effect of something like this, and then less obvious. But
• 19:22
  you might find this interesting if you have a pension,
• 19:24
  or you have a four to one K and you
• 19:25
  want a bond fund, you want a bond index fund.
• 19:28
  Maybe you think this is safe. It owns sixty five
• 19:30
  hundred or something securities in the so called Bloomberg aggregate index,
• 19:34
  and we all have some exposure to that. Boeing is
• 19:37
  in there today, but it might not be after the downgrade.
• 19:40
  Speaker 2: Yeah, we get booted from a whole bund indices and
• 19:44
  as well as actively managed fun.
• 19:45
  Speaker 3: Insurance companies can't hold it anymore. The ratings are the
• 19:50
  gold standard or are highly rated. Security is the most
• 19:55
  avidly sought after a bond and an insurance company portfolio
• 19:58
  of quite income they're they're quite needy of high quality,
• 20:04
  high income paying security. So this will reverberate a little
• 20:07
  bit throughout the investment management world. You won't feel it,
• 20:11
  but there will be managers scrambling to switch up their
• 20:13
  portfolios if this happens.
• 20:14
  Speaker 2: The point would be, even were you convinced that, look
• 20:16
  it's Boeing, the US government's going to have their back.
• 20:18
  They're going to bail it out. And I would argue
• 20:22
  with that because there's been previous bailouts where bondholders and
• 20:25
  stockholders have been wiped out and the government just backs
• 20:28
  the company. But you know, who knows what format. But
• 20:30
  even if you are convinced of that, by mandate, if
• 20:33
  you're a fund manager, you might not be allowed to
• 20:35
  hold junk debt. You know that could be in your perspectives,
• 20:38
  say no, we don't go after junk debt. We are
• 20:41
  not allowed to hold it for our insurance company or
• 20:43
  for our pension or insurance companies without question. Cannon, Yeah,
• 20:47
  you're not allowed to own it in some cases, probably
• 20:49
  by law. I don't know. You think about pensions and
• 20:52
  the PBGC eligibility. You might buy law.
• 20:57
  Speaker 3: Often make allocations to them, but your current managers may not.
• 21:00
  If you have any investment grade quality portfolio, when you
• 21:04
  get downgraded to junk, you're by definition no longer investment grade,
• 21:07
  so you're forced to do something.
• 21:08
  Speaker 2: Get the boot and then good luck. Yeah, when you'd
• 21:10
  go to issue new debt as a as a junk
• 21:13
  bond holder, what do you have for us mark that
• 21:15
  you want to you want to talk about desperate?
• 21:17
  Speaker 3: Go on LinkedIn?
• 21:18
  Speaker 2: Yeah?
• 21:19
  Speaker 3: Thank you? Do you ever use LinkedIn? I keep up
• 21:21
  with old colleagues?
• 21:22
  Speaker 2: And yes, my brother likes to wish everyone a happy
• 21:28
  birthday via LinkedIn and he just sends really formal messages
• 21:32
  to like happy birthdays.
• 21:33
  Speaker 1: Please advise.
• 21:34
  Speaker 3: LinkedIn introduced this open to work feature where you could
• 21:39
  advertise yourself to anybody or just recruiters.
• 21:42
  Speaker 2: I've seen that open.
• 21:45
  Speaker 3: Yeah, and the point of the article is that looks desperate.
• 21:48
  Speaker 2: Don't do it?
• 21:49
  Speaker 3: And I tend to agree, well, what about you?
• 21:51
  Speaker 2: I have less of an issue with open to work.
• 21:53
  But now there's actual banners that instead of saying open
• 21:57
  to work, they actually say desperate. It's not it hashtag.
• 22:02
  It says hashtag desperate. As no longer just open to work.
• 22:06
  I'm now desperate to work. It seems at aggressive. I
• 22:11
  thought the breaks, Well, let's put this way. I wouldn't
• 22:15
  not hire somebody because they had a desperate to work
• 22:17
  banner on there, I might be a little bit hesitant
• 22:21
  to recommend that person for a job at my company
• 22:24
  if they had a desperate a desperate thing on a
• 22:28
  banner on their on their page. Though, Yeah, I don't
• 22:31
  know this, this might be a step too far. Furthermore, like,
• 22:34
  if I'm a hiring manager and I'm interviewing somebody which
• 22:36
  is desperate banner, aren't you gonna low ball them? Yeah? Right,
• 22:44
  Like I I mean, this would be a problem. I
• 22:48
  know you were making eighty, but I think you know,
• 22:51
  based on what you said on LinkedIn, maybe fifty would
• 22:53
  do the job here. What do you say, Yeah, I
• 22:56
  don't know that. I get the point. Do you want
• 23:00
  to stand out? It is incredibly it's probably more difficult
• 23:04
  to stand out as a worker today than almost any
• 23:07
  time in history, given the way that we sort through
• 23:09
  job resumes and things like that.
• 23:10
  Speaker 4: Right now, spouses generally served as the beneficiary to your
• 23:13
  IRA or life insurance policy, but naming your state the
• 23:17
  beneficiary has quite a few benefits. Cushing and Dolan are
• 23:21
  experts in elder law, and they can help you protect
• 23:23
  your assets from probate and the nursing home By naming
• 23:26
  your state as a beneficiary, you can avoid the probate
• 23:29
  process less than the chance of creating any income tax
• 23:33
  issues on your rm ds, and enjoy enhanced a state
• 23:37
  tax reduction. Call Cushing and Dolan right now by calling
• 23:41
  eight six six eight four eight five six nine nine
• 23:44
  and ask for their brand new guide called why Name
• 23:47
  your Estate in IRA Beneficiary? Learn about these benefits and others,
• 23:51
  and provide peace of mind for you and your family
• 23:54
  during your retirement years. The number again is eight six
• 23:57
  six eight four eight five six nine, or we can
• 24:00
  request the guide from their website Legal exchange show dot com.
• 24:05
  Speaker 1: The proceeding was paid for and the views expressed are
• 24:07
  solely those of Cushing and Dolan. Cushing and Dolan and
• 24:09
  or Armstrong Advisory may contact you offering legal or investment services.
• 24:12
  Cushing and Armstrong do not endorse each other and are
• 24:14
  not affiliated.
• 24:15
  Speaker 2: Before we move on from the desperate workers story here,
• 24:18
  which again I find interesting that we are hearing a
• 24:22
  lot about the challenges of this labor market now when
• 24:25
  you've got unemployment at four percent. It's just shocking to me.
• 24:30
  The four people that are interviewed in this article again
• 24:34
  just looking at a very small trend here. You have
• 24:38
  people almost entirely working in graphics and the arts. So
• 24:43
  they interviewed one person who's a senior art director in
• 24:45
  motion graphics. You have another person who is a graphic
• 24:49
  designer and illustrator, another who sorry works as a screenwriter
• 24:56
  and producer, and then finally another one that's in artist
• 25:00
  looking for work in the fine arts industry.
• 25:02
  Speaker 3: Good point, Good point.
• 25:04
  Speaker 2: I don't have anything, but like that, in and of itself,
• 25:07
  isn't shocking to me or isn't doesn't tell me anything.
• 25:11
  I don't know that the arts industry or the graphic
• 25:14
  design industry in particular, is struggling right now.
• 25:16
  Speaker 3: I don't think there's anything you can glean from this
• 25:18
  in terms.
• 25:18
  Speaker 2: Of My only takeaway though, is it does seem like
• 25:22
  low hanging fruit for artificial intelligence. I'll just throw that
• 25:26
  out there. When we talk about graphic design and the
• 25:29
  type of boring artwork and design that corporations do, I
• 25:35
  don't think they care how original their logo design looks,
• 25:38
  so long as it looks usable and is cheap to design.
• 25:43
  And that's like a key component of what artificial intelligence
• 25:46
  is truly able to do today. And so again you
• 25:50
  can't say anything about this, but I'll be interested to see,
• 25:53
  you know, if we take a look at where people
• 25:55
  are unemployed, where the highest unemployment rate is, and how
• 25:59
  long it's taking for people to at jobs, if you're
• 26:00
  seeing anything on the graphic design space that does speak
• 26:04
  to artificial intelligence a little bit.
• 26:05
  Speaker 1: To me, we'll see.
• 26:07
  Speaker 2: I have no evidence. And this is one article from
• 26:09
  the Wall Street Journal interviewing for.
• 26:10
  Speaker 3: Yeah, that's why I didn't really get into generalizing. I
• 26:15
  was more interested in your take on people advertising themselves
• 26:19
  very promiscuously as available for work or apparently desperate for work.
• 26:24
  Speaker 2: Yeah. To me again, I just think the desperate piece
• 26:28
  crosses a line there, where as the name implies desperation,
• 26:34
  whereas open to work. To me, that that that reads, Hey,
• 26:40
  this person cares, they want a job, they are driven,
• 26:42
  they want to go find a job, and they're advertising
• 26:44
  themselves desperate. To me reads what's wrong with this person?
• 26:48
  Why can't they get a job? What's what's holding up
• 26:51
  so much? So I know, let's take a quick break.
• 26:54
  When we come back. Paul Lamonica from Baron's joining us
• 26:57
  here on the Financial Exchange. That's next.
• 26:59
  Speaker 1: The Financial Exchange streams live on YouTube, Like our page
• 27:03
  and stay up to date on breaking business news all
• 27:05
  morning long. This is the Financial Exchange Radio Network. Miss
• 27:10
  any of the show. The Financial Exchange Show podcast is
• 27:13
  available on Apple, Spotify, and iHeartRadio. Hit the subscribe button
• 27:17
  and leave us a five star review. This is the
• 27:20
  Financial Exchange Radio Network, Ladies and gentlemen the Weekend.
• 27:34
  Speaker 2: Joining us now is Paul Lamonica from Baron's Talk to
• 27:37
  Us about a not exactly a household name Cognizant. Paul,
• 27:41
  Thanks for johnnings, appreciate it. You catch some of the Aurora
• 27:44
  burials down in New York City last night? Or was
• 27:46
  it too bright?
• 27:47
  Speaker 5: I missed it. Now I'm in the suburbs, so I
• 27:51
  should have been able to see it, but I just
• 27:52
  didn't get out of the house.
• 27:54
  Speaker 2: In times good news. If you go onto Facebook, it's
• 27:57
  the thing on the share exactly, but you won't have
• 28:01
  missed anything. Touch us. What is this company? Not, like
• 28:04
  I said, not exactly a household name for probably the
• 28:08
  average person, cognizant at tick or Simple ctsh What do
• 28:11
  they do?
• 28:12
  Speaker 5: Yeah, this is a company that you know does outsourcing,
• 28:17
  you know, primarily tech outsourcing for the financial services and
• 28:22
  healthcare industries. But but there by no means a slash.
• 28:25
  Speaker 2: It's a company with a market.
• 28:26
  Speaker 5: Cap near forty billion dollars in the s and P
• 28:29
  five hundred, So it's you know, not a household name, definitely,
• 28:33
  but a pretty significant company in its industry. And what's
• 28:38
  interesting is that they're based in the US Teeneck, New Jersey,
• 28:43
  just outside of New York, but they employ most of
• 28:47
  their workers in India, and I think that is one
• 28:51
  of the reasons why the stock may have lagged this year.
• 28:54
  I think there's a general sense that both Donald Trump
• 28:58
  and Kamala Harris are going to push whichever one of
• 29:02
  them becomes president, for more insourcing near shoring, you know,
• 29:07
  more jobs closer to the US, if not exactly in
• 29:10
  the US, and that's something that has been a concern.
• 29:13
  But you know, I spoke to the CEO of Cognizant
• 29:15
  and there he's confident that, you know, the company will
• 29:18
  be able to withstand any of these macro challenges.
• 29:22
  Speaker 2: They also just reported a pretty big merger or acquisition
• 29:25
  here in the defense space. Can you speak to that
• 29:27
  a bit, Yeah, definitely.
• 29:29
  Speaker 5: I think that's one of the reasons why analysts are
• 29:32
  exciting why the company is excited. They bought a company
• 29:35
  called Bellcan, which does a lot of technical you know,
• 29:40
  technological solutions of you know, outsourcing for aerospace and defense.
• 29:46
  So they have you know, contracts with the US Navy,
• 29:50
  with Airbus, with NASA, you know, other big defense and
• 29:54
  aerospace companies. And that's an area that cognstant hasn't really
• 29:57
  been playing in. They've been more, like I said, financial
• 30:00
  services and healthcare areas. And I think it's no secret that,
• 30:05
  you know, companies around the world, including the US, are
• 30:08
  looking to step up military spending. So that is something
• 30:13
  that could give Cognizant a further revenue boost over the
• 30:17
  next couple of years.
• 30:18
  Speaker 2: You alluded to this, Paul, but obviously company has not
• 30:21
  performed well and at least imparting your eyes due to
• 30:25
  some political risk that certainly is out there. Just how
• 30:29
  big of a discount is this we just got finished
• 30:31
  talking about, you know, the historical premium Americans are paying
• 30:35
  for stocks today, you know, almost well as high as
• 30:40
  it's been in say twenty twenty one and you know,
• 30:42
  pre dot com stage. But there are some pockets in
• 30:45
  the market that are relatively cheap in comparison. Where does
• 30:49
  Cognitant fit into there.
• 30:50
  Speaker 5: Yeah, Cognizant trades for just fifteen times twenty twenty five
• 30:53
  earnings estimates. It typically does trade the discount to the
• 30:57
  SP five hundred, but it's now trading at an even
• 31:00
  bigger one of this. As you noted, I mean the
• 31:02
  general the overall market is pretty pricey, you know, about
• 31:05
  twenty one times earnings for next year. So this is
• 31:10
  a company that again there are potentially some political headwinds,
• 31:16
  but I think that's factored into the stock price, that
• 31:19
  the multiple it's training at right now, and earnings growth
• 31:22
  is expected to accelerate over the next few years.
• 31:24
  Speaker 2: Paul and Monica from Baron's join us to talk about Cognizant,
• 31:28
  the outsourcing firm with three quarters of its employees currently
• 31:32
  based in India, and the struggles they face this year.
• 31:34
  But Paul, appreciate you joining us. Thank you, and we'll
• 31:37
  talk to you next week. Thanks a lot, going, guys,
• 31:40
  I want to go off script a little bit. Did
• 31:42
  either of you see any of the highlights from the
• 31:46
  TikTok I'm gonna call it the leak on TikTok from
• 31:50
  the Kentucky Attorney General's Office. No, I have no idea
• 31:53
  what you're talking about really Okay, So just talk about this,
• 31:57
  well you and I did, but boat a tucker. So
• 32:02
  the Attorney General for Kentucky, among I think sixteen other states,
• 32:06
  is in the process of suing TikTok for all sorts
• 32:09
  of stuff, you know, harmed to kids and misleading the
• 32:13
  public on a whole bunch of things. And so they've
• 32:14
  been in discovery with TikTok and getting a whole bunch
• 32:17
  of documents, and PR went and requested the documents and
• 32:20
  got a whole bunch of things that were redacted, as
• 32:24
  is very common, right when when you're in the middle
• 32:26
  of an ongoing case, a lot of stuff is privileged
• 32:28
  and you get to redact a whole bunch of blackdown, Yeah, blackout.
• 32:31
  You can't read it. From what I understand, somebody at
• 32:35
  the I think at the Kentucky Attorney General's office screwed
• 32:38
  up and didn't appropriately black it all out. And so
• 32:40
  when somebody literally just copied and pasted it, all the
• 32:43
  blacked out stuff magically appeared, and and TikTok's you know,
• 32:48
  obviously furious about this, saying quote, it's highly irresponsible than
• 32:52
  PR to publish information that is under a court seal,
• 32:54
  which apparently this was, but they did it anyway. And
• 32:58
  so we have all these documentary of allegations from the
• 33:02
  company as well as internal memos, and just a few
• 33:05
  of the highlights that I saw mentioned here. One they
• 33:09
  mentioned some of the time out things that they put
• 33:12
  on there, like timers and other items to get people
• 33:16
  off of the app, And there seem to be some
• 33:18
  internal memos basically saying that hey, we are just doing
• 33:24
  this to appease the general public and it doesn't actually
• 33:27
  do anything. There's other memos seemingly admitting or alleging that
• 33:32
  the company has its algorithms favor more attractive people on
• 33:36
  the TikTok algorithm to make sure that, you know, ugly
• 33:39
  people aren't showing up on the TikTok stream. The number
• 33:45
  of videos that they believe it would take to get
• 33:48
  somebody addicted to the app is about two hundred and
• 33:51
  sixty videos, which sounds like a lot, but since these
• 33:54
  things are about eight seconds long, it's basically in thirty
• 33:56
  five minutes the average user is likely to become addicted
• 33:59
  to the platform. That's a quote from one of these documents.
• 34:04
  And there was one other, pretty pretty messy one that
• 34:11
  uh yeah, just a lot to do with kids and
• 34:14
  mental health on the platform, and just yeah, a bunch
• 34:17
  of allegations that seemed to me reminiscent of the tobacco
• 34:22
  industry in the nineties. I guess it was when all
• 34:25
  those things were coming out.
• 34:27
  Speaker 3: Yeah, actively disinforming the public smoke screen after smoke screen.
• 34:33
  This does nothing, I think, but confirm what we already
• 34:36
  knew about TikTok. Never mind the national security dangers of
• 34:39
  letting them continue to operate people who adhere to niceties
• 34:44
  like free speech, which doesn't seem to be applicable when
• 34:47
  national security is under threat. But they would let one
• 34:51
  company in the interest of free speech, an important right
• 34:53
  but not the only one, undermine every other right that
• 34:56
  we possess. It's just staggering that they're allowed to continue
• 34:59
  to to operate and kind of shameful.
• 35:02
  Speaker 2: Yeah, we shall see. Hopefully that is not something we
• 35:05
  need to continue to talk about in twenty twenty five,
• 35:07
  but only time. We'll tell Markets remain open and strongly
• 35:10
  in positive territory. With the Dow leading the way up
• 35:12
  three hundred and fifty five points over eight tenths of
• 35:15
  a percent, we will be back at it on Monday.
• 35:18
  Banks are closed, stock market is open. We'll be doing
• 35:20
  a show on Monday, so stay tuned and have a
• 35:23
  great weekend. Everybuddy