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What is a dime without a penny? · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mark Fandetti.
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Speaker 2: Chuck, Mark and Tucker with you as we kick things off.
1:17
Speaker 2: Today's gonna be a pretty busy day this afternoon. In particular,
1:22
Speaker 2: we've got a FED meeting which is going to conclude
1:26
Speaker 2: with the interest rate decision at two PM and the
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Speaker 2: Jpowell press conference at two thirty. Then after the bell,
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Speaker 2: we are going to have quite the firepower on hand
1:36
Speaker 2: for earnings, with Microsoft, Meta, and Tesla reporting after the bell.
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Speaker 2: Say nothing of visa between those four companies. You're talking
1:44
Speaker 2: about eight trillion dollars in market cap amongst friends, and
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Speaker 2: so that's kind of wild. And that's before you even
1:51
Speaker 2: get to you know, some of the other companies reporting
1:53
Speaker 2: your ibms of the world at and t ADP, General Dynamics,
1:58
Speaker 2: Starbucks reported this morning, So you know, you've got a
2:01
Speaker 2: whole bunch that are on tap today. In addition to that,
2:06
Speaker 2: a little bit of economic day this morning. Mortgage applications,
2:09
Speaker 2: as you would expect, dropped a touch last week as
2:12
Speaker 2: mortgage rates rose, and so the refinance index fell by
2:16
Speaker 2: about sixteen seventeen percent. Purchases down very modestly about half
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Speaker 2: a percent, So nothing you know, major on the purchase side,
2:24
Speaker 2: but refinance activity is obviously very very rate sensitive in particular,
2:29
Speaker 2: you know, in the range that we are in. But
2:31
Speaker 2: our top story to kick things off, a couple of
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Speaker 2: companies announcing some layoffs. Amazon in particular, gotta tell you
2:40
Speaker 2: they kind of blew this one. I got a CNBC
2:44
Speaker 2: alert on my phone when I was sitting down I
2:46
Speaker 2: think it was maybe like seven forty five or eight
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Speaker 2: last night, and it was you know, Amazon mistakenly sends email,
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Speaker 2: you know, to people that they may be laying off tomorrow.
2:56
Speaker 2: So I guess maybe there's one other person who unfortunately
3:00
Speaker 2: ends up getting caught up in this because it appears
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Speaker 2: that the email went out like twelve to eighteen hours early,
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Speaker 2: basically saying like, hey, you're getting fired on this day.
3:09
Speaker 2: But you know, people still have access to their systems
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Speaker 2: because they you know, they weren't they weren't expecting that
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Speaker 2: to go out at that point. So sixteen thousand employees.
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Speaker 2: This is in addition to fourteen thousand cuts in October,
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Speaker 2: so about ten percent of Amazon's corporate workforce being laid
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Speaker 2: off in a three month span. Here. This on the
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Speaker 2: back of ups also saying that they're going to cut
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Speaker 2: an additional thirty thousand jobs this year after cutting sixty
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Speaker 2: two thousand last year, And so you've just got this
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Speaker 2: continued drumbeat of layoffs in the news. A couple others
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Speaker 2: this week that came out. Pinterest said they were laying
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Speaker 2: off fifteen percent of their staff. Autodesk last week said
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Speaker 2: they were laying off seven percent of theirs. So you
3:55
Speaker 2: kind of got the whole corporate lemming thing going on,
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Speaker 2: which is is kind of the thing I get nervous about,
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Speaker 2: which is, hey, company announces layoffs and the stock goes up,
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Speaker 2: and other ceo see that and say, oh, we should
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Speaker 2: do that, and that's how you tend to get into
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Speaker 2: some nasty situations. Sometimes we're not at that point yet,
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Speaker 2: but I do think what we're seeing here, you know,
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Speaker 2: continues to be this this background level of layoffs that
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Speaker 2: makes you wonder if you're ever going to reach an
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Speaker 2: inflection point where things, you know, kind of spill over
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Speaker 2: and move up on that front overall.
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Speaker 3: You guys know the story on this better than I do.
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Speaker 3: But Amazon's headcount has doubled, maybe a little more than
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Speaker 3: doubled since twenty twenty, Yeah, quadrupled since twenty seventeen. Their
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Speaker 3: revenues have kept up no matter how you want to,
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Speaker 3: or you could look at other metrics of of sales
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Speaker 3: and of sales and profitability too. So they've they've they've
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Speaker 3: grown along every important dimension. So it's not like unlike
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Speaker 3: ups which where you look at say gross profit or
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Speaker 3: some the usual metrics and you see trends that. Now
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Speaker 3: I didn't look at the whole industry and this isn't
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Speaker 3: my area, but I saw trends that make me not
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Speaker 3: surprised to see layoffs Amazon. You don't necessarily see that.
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Speaker 3: It seems a little more preemptive. Again, it's just a
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Speaker 3: sort of casual, yeah, superficial observation. That's point number one
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Speaker 3: and the other from the Jolts Report, we know that
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Speaker 3: one point six one point seven million jobs, one point
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Speaker 3: six one point seven million people are separated from their
5:27
Speaker 3: jobs every month. So while these numbers sound big, they're
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Speaker 3: really dropping the bucket.
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Speaker 4: Chuck.
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Speaker 2: It is true, and this is something that we always
5:33
Speaker 2: come back to when we talk about I think it
5:35
Speaker 2: was late last year the uh was it a headhunter firm?
5:39
Speaker 2: I think Challenger Gray and Christmas they always put out
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Speaker 2: every month like their layoff numbers, and they were all
5:45
Speaker 2: the headlines last at the end of last year, like oh,
5:48
Speaker 2: like layoffs moved up to like two million over the
5:51
Speaker 2: course of you know, twenty twenty five, and it's like, no, guys,
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Speaker 2: there were almost two million layoffs a month in the
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Speaker 2: in the course of twenty five. It's just they're not
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Speaker 2: announced big name companies that those guys tracks. So I
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Speaker 2: think the point that you make mark is the important one,
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Speaker 2: which is look, in any normal month, Amazon's layoffs that
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Speaker 2: they're announcing here are about one percent of the total
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Speaker 2: layoffs that happen each month. It could mean something if
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Speaker 2: other large companies follow suit, and if it's in particular,
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Speaker 2: you know, high paying positions that you're starting to see,
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Speaker 2: you know, cut more. Hey, that could matter because we
6:26
Speaker 2: have a skewed distribution of income that is now causing
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Speaker 2: skewed consumption, and that could affect the US economy more,
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Speaker 2: you know than lower wage workers being laid off. But ultimately,
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Speaker 2: I'm just not sure that there's too much signal here
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Speaker 2: other than the one thing that I worry about is, yeah,
6:45
Speaker 2: if companies as a whole start to want to announce
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Speaker 2: large layoffs, it could become somewhat of a self fulfilling prophecy.
6:52
Speaker 2: But we're not there yet. I mean, it's it's just
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Speaker 2: not in the data that this is having any meaningful
6:59
Speaker 2: impact on the overall layoff rate.
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Speaker 3: You make a good point, though consumption is skewed toward
7:06
Speaker 3: higher earners in plain English, spending is increasingly driven by
7:12
Speaker 3: people that make a lot of money. That may sound obvious,
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Speaker 3: but it's not always obvious. Like statistically, people are increasingly
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Speaker 3: looking at that finding it to be the case. So
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Speaker 3: your point is, don't just look at that. And I'm
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Speaker 3: paraphrasing a little bit here, but it might be misleading
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Speaker 3: to look at just the overall number of layoffs. You
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Speaker 3: need to know their their distribution among income groups to
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Speaker 3: get a sense for how big the impact is spending
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Speaker 3: could be.
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Speaker 2: And just as a comparison, like, let's let's look at
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Speaker 2: these two you know, side by side here, which I
7:40
Speaker 2: literally just physically did. You've got UPS cutting thirty thousand jobs.
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Speaker 2: They are saying that the vast majority of these are
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Speaker 2: going to be quote, operational positions. So that's what UPS
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Speaker 2: terms their delivery and warehouse workers. My guess is that
7:54
Speaker 2: when you look at total comp I'm guessing that the Amazon,
7:59
Speaker 2: you know, corporate employee is probably pulling down in terms
8:03
Speaker 2: of total comp somewhere between two and three times what
8:07
Speaker 2: the UPS guys. The UPS guys do really well. If
8:10
Speaker 2: you look at total comp, I mean all in when
8:12
Speaker 2: you're talking you know, full benefits and everything, you're probably
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Speaker 2: talking about guys that are making somewhere in the ballpark
8:18
Speaker 2: of like ninety two, one hundred and ten thousand dollars
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Speaker 2: a year. The Amazon guys like Standard Package, when you
8:23
Speaker 2: talk about them, they're probably like two hundred and fifty
8:25
Speaker 2: K with a bunch of stock options as well. And
8:28
Speaker 2: so you try to look at this and figure out, hey,
8:31
Speaker 2: what's the overall impact to the economy, and that's how
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Speaker 2: you sort through it. But I think this does get
8:38
Speaker 2: at the fact that, Hey, with these kinds of announcements
8:42
Speaker 2: that you're seeing, it's no wonder that when we get
8:44
Speaker 2: consumer confidence data that came out yesterday, Hey, people were
8:48
Speaker 2: saying it's getting harder to find jobs, and I wonder
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Speaker 2: how much of that is being affected by the big
8:52
Speaker 2: headlines that we're seeing just in terms of you know, hey, psychologically,
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Speaker 2: it's tough to go through a hiring cycle when you
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Speaker 2: seeing all of these things about these head counts.
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Speaker 3: This is a maybe it's a lesson in how hard
9:06
Speaker 3: it is to read numbers out of context. If you
9:08
Speaker 3: hear the federal budget grew by thirty billion dollars, most
9:12
Speaker 3: of us, myself included, either don't know or have to
9:14
Speaker 3: stay well, I know, but I have to stop and
9:16
Speaker 3: think about it.
9:16
Speaker 2: I still have to think about how many zero is
9:18
Speaker 2: relative to thirty trillion.
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Speaker 3: At some point, you're doing like scientific you know, notation,
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Speaker 3: because the numbers are too big to write on a
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Speaker 3: piece of paper. There's too many, And there's a twelve
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Speaker 3: zeros in a trillion, there's nine zeros in a billion.
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Speaker 4: Did I get that right?
9:29
Speaker 1: Yeah?
9:30
Speaker 2: You gotta stop and think about it.
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Speaker 4: You don't do that every day. I don't know. Well,
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Speaker 4: I know.
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Speaker 2: Are we getting to stop and think about it? Are
9:36
Speaker 2: we getting like this is kind of a joke question,
9:39
Speaker 2: but kind of an honest one.
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Speaker 3: Is are you're going, yeah, we.
9:42
Speaker 2: Just got rid of the penny because we said it's useless.
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Speaker 4: Right?
9:46
Speaker 2: Are we getting to the point where we need to
9:48
Speaker 2: move the decimal point?
9:49
Speaker 3: A couple of times, yeah, I was talking to someone
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Speaker 3: about this, like, like the the the nickel and the
9:54
Speaker 3: dime have to be watching their backs right now, right,
9:56
Speaker 3: because inflation is gonna do them in too.
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Speaker 5: Right.
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Speaker 2: At at some point, wait, like you get to a
10:00
Speaker 2: point where you're like, okay, I can't start. I mean
10:03
Speaker 2: we're yeah, we're within not sniffing distance, but like you
10:06
Speaker 2: extrapolate out where we're going, and in my lifetime, we're
10:09
Speaker 2: probably talking about the US economy being somewhere on the
10:13
Speaker 2: order of like a quadrillion dollars and like, I can't
10:16
Speaker 2: do that. I can't do quadrillions.
10:18
Speaker 3: Yeah, it's it's called a revaluation. And that's probably self explanatory.
10:23
Speaker 3: It's literally you're chopping a zero off or moving the
10:26
Speaker 3: decimal one place to the left.
10:29
Speaker 2: I'd like to do three excuse me, at.
10:31
Speaker 3: Which point we're gonna have to bring the damn penny
10:33
Speaker 3: forgive me.
10:33
Speaker 2: Then you got to bring a penny back?
10:35
Speaker 3: Because what is a dime without a penny? A dime
10:37
Speaker 3: is ten? What it makes I know?
10:41
Speaker 2: They like, no, wait, I'm sorry, Mark, but what is
10:45
Speaker 2: a dime without a penny? Is one of my new
10:48
Speaker 2: favorite Like it's like, I we need T shirts that
10:52
Speaker 2: say that, hang that up in the studio, put it
10:53
Speaker 2: in the louver. What is a dime without a penny.
10:56
Speaker 2: Oh my god, it makes the kind No, it's deep, Mark,
11:00
Speaker 2: Oh it's deep.
11:01
Speaker 3: Well, it's one one cent, like a dollar is one
11:06
Speaker 3: hundred cents.
11:07
Speaker 2: The system is what is a bunch without a banana?
11:10
Speaker 2: You know, Like this is like we're talking about foundational stuff.
11:15
Speaker 3: Well it is kind of. It's like, you know, what
11:17
Speaker 3: is a pound without an hour? Don't just get rid
11:18
Speaker 3: of the foot and call something a mile. At some
11:21
Speaker 3: point we need no, really though, you don't.
11:23
Speaker 2: You need the referend. It couldn't get rid of it.
11:24
Speaker 2: Then it couldn't be fruit by the foot. Then we
11:27
Speaker 2: don't by the twelve. You know, it could be a
11:30
Speaker 2: real problem. Let's take a quick break here. What is
11:33
Speaker 2: a dime without a penny? We'll think about that for
11:36
Speaker 2: a few minutes. When we come back, we're talking about
11:38
Speaker 2: ASML and the chip making industry.
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12:36
Speaker 2: Advanced Semiconductor Materials Lithography more commonly known as ASML. They're
12:41
Speaker 2: the Dutch company that makes the basically ultraviolet light machines
12:48
Speaker 2: that etch the circuits onto all of the semiconductors. At
12:53
Speaker 2: this point, they reported earnings late I guess early this morning,
12:59
Speaker 2: depending on how you want you look at it. And
13:02
Speaker 2: they basically said, yeah, like everything is cranking. We've got
13:04
Speaker 2: you know, great new orders. Everything looks really good, new
13:07
Speaker 2: bookings look strong. They did announce seventeen hundred job cuts
13:11
Speaker 2: just because they want to get in on the ACT
13:12
Speaker 2: as well. Most of those cuts are coming in the Netherlands,
13:16
Speaker 2: with a few positions being cut in the United States.
13:20
Speaker 2: It's about four percent of their corporate workforce. But this
13:24
Speaker 2: is one of the main reasons why when you take
13:26
Speaker 2: a look at what's going on with the semiconductor space today,
13:30
Speaker 2: some continued upward momentum there, and not just in the
13:34
Speaker 2: memory stocks that have been going wild over the last
13:37
Speaker 2: couple of months, but even in video, which has been
13:40
Speaker 2: struggling to find its footing, up about one point seven
13:43
Speaker 2: percent today. For the rest of the tech sector a
13:45
Speaker 2: little bit mixed here, and so it continues just to
13:47
Speaker 2: be this case where we're like slowly grinding higher in
13:53
Speaker 2: the major indices, but we're about one percent above where
13:56
Speaker 2: we'd peaked in October now, despite the fact that you've
14:00
Speaker 2: had all these big moves here, and it's just the
14:02
Speaker 2: fact that markets are very you know, the moves that
14:06
Speaker 2: we're seeing are very well dispersed. There's no cohesion between them.
14:09
Speaker 2: Where the index is just riding up, you know, consistently,
14:12
Speaker 2: like it did last summer. It's just hey, this group
14:15
Speaker 2: of stocks is up, this one's down today, and so
14:17
Speaker 2: the index ekes out you know, a quarter percent gain
14:20
Speaker 2: and then oh there's a two percent pullback and then
14:22
Speaker 2: we eke it, you know, back out to you know,
14:23
Speaker 2: new highs. But ASML saying, hey, on our side, at
14:27
Speaker 2: least we're not seeing any signs of reduced demand, which
14:30
Speaker 2: again based on what we're hearing from Nvidio and Broadcommon,
14:34
Speaker 2: Micron and those guys, Yeah, it makes sense. That's not
14:38
Speaker 2: the first place that you would see the issues show up.
14:41
Speaker 2: Right now.
14:42
Speaker 3: They're about two and a half percent of the developed
14:46
Speaker 3: market so advanced economy or Western country which includes Developed
14:51
Speaker 3: Asia benchmark, which is maintained by Morgan Stanley. If you
14:55
Speaker 3: have a four to one K plane, you may see
14:56
Speaker 3: an international fund that's benchmark to the MSCI which Morgan
15:00
Speaker 3: Stanley Capital IFA is it's sometimes pronounced maybe you pronounce
15:04
Speaker 3: it differently, Europe, Australasia, Far East. So ASML is the
15:08
Speaker 3: biggest position in the in the most widely followed proxy
15:15
Speaker 3: for international equity performance, so you may see a little
15:20
Speaker 3: jump in your say four one K international fund or
15:24
Speaker 3: the international segment of your target date fund. Interestingly, probably
15:28
Speaker 3: not surprisingly, tech though, is only ten percent of the
15:32
Speaker 3: MSCI EFA index. Again, the international equity equivalent of the
15:37
Speaker 3: S and P five hundred. From a US investor's perspective, anyway,
15:41
Speaker 3: excuse me, about a third the weight that tech stocks
15:43
Speaker 3: get in our benchmark, say the S and P five hundred.
15:47
Speaker 2: Also making news this morning and is helping to drive
15:50
Speaker 2: in video as well, China reportedly approving purchases of in
15:54
Speaker 2: Vidia's H two hundred chip. Remember this is the one
15:58
Speaker 2: that initially was not allowed to be exported by the
16:01
Speaker 2: Biden administration. The Trump administration, even for the first seven
16:05
Speaker 2: months of last year, said no, like, we're not giving
16:08
Speaker 2: you access to that technology. Then in August said okay,
16:12
Speaker 2: we'll give you access to it, and then China said,
16:14
Speaker 2: now we don't actually want it anymore. Now China saying, yes,
16:17
Speaker 2: we will authorize orders for some of our major companies,
16:21
Speaker 2: but we're keeping some limits in place. This still, you know,
16:25
Speaker 2: eventually does have to translate into actual sales. And so look,
16:29
Speaker 2: there's a part of me whenever you're dealing with the
16:31
Speaker 2: Chinese government, I look at this and I say, okay,
16:34
Speaker 2: you've authorized the orders, but have you really authorized the
16:37
Speaker 2: companies to buy them? And so part of me wonders,
16:40
Speaker 2: you know, there's again I'm always just looking for like
16:43
Speaker 2: little little ways that the Chinese government could say, hey,
16:47
Speaker 2: we're complying with this, but not actually you know, going
16:50
Speaker 2: through the spirit of what they're doing. And so, yeah,
16:53
Speaker 2: we authorized Ali Baba to buy these chips, but they
16:55
Speaker 2: decided not to buy them then, and so we'll see
16:58
Speaker 2: how this plays out. But in video again up about
17:01
Speaker 2: one point seven percent on optimism that this will end
17:05
Speaker 2: up resulting in greater sales, even if there are those
17:09
Speaker 2: concerns about handing such powerful technology to companies that may,
17:14
Speaker 2: in a number of cases have direct ties to the
17:16
Speaker 2: Chinese military.
17:18
Speaker 3: Doesn't feel like our attempts are thwarting their advances. So
17:22
Speaker 3: it feels it feels futile.
17:26
Speaker 2: From what perspective, from what in what so.
17:30
Speaker 3: Yeah, I was hoping you wouldn't ask any follow up
17:31
Speaker 3: questions to be honest, Now, can we prevent we could not?
17:35
Speaker 3: Can we can we prevent? Can we prevent preventing China
17:40
Speaker 3: from from uh from getting their hands on exploiting implementing
17:45
Speaker 3: this technology?
17:46
Speaker 1: Feels futile.
17:48
Speaker 2: You can make it very hard for them if you
17:50
Speaker 2: really wanted to. It would be something that is not
17:54
Speaker 2: in the best interest of in Nvidia but I don't
17:58
Speaker 2: think the United States really operates to do what's the
18:00
Speaker 2: best interest of Nvidia. That's not like you and I
18:02
Speaker 2: do not exist so that Jensen Huang can sell chips.
18:07
Speaker 2: We we just we don't. Collectively, we don't. That's not
18:11
Speaker 2: how any of this is supposed to work. So, yes,
18:14
Speaker 2: you could make it, you know, very difficult for them to.
18:17
Speaker 3: These feel like half measures though, I'm just cut off
18:19
Speaker 3: the edge.
18:20
Speaker 2: Well sorry again, Like yes, if you really wanted to,
18:24
Speaker 2: you would just say no, you need to make this
18:26
Speaker 2: technology here and you cannot export it, and then you
18:29
Speaker 2: have to like to anyone, you can't export it. There
18:32
Speaker 2: are obvious reasons why we don't want a hard export ban,
18:35
Speaker 2: and so that's why originally I was, okay, you can
18:37
Speaker 2: export it to you know, certain countries, and then in
18:40
Speaker 2: the last year it's really opened up to no, we
18:43
Speaker 2: can basically, look, if you're if you're selling these to China,
18:46
Speaker 2: you're basically saying you can sell them to almost anyone.
18:49
Speaker 2: There's probably a very short list of a dozen countries
18:51
Speaker 2: that maybe you can't. It might not even be a
18:54
Speaker 2: dozen long, it might be half a dozen. But beyond
18:57
Speaker 2: that it's basically no, you can can have at it,
19:00
Speaker 2: and that's basically where we are. So that is where
19:05
Speaker 2: things stand in semiconductor world again, kind of this divergence
19:09
Speaker 2: we've been seeing the last month also where semis have
19:12
Speaker 2: been rallying in tech, but software has just been getting pummeled.
19:15
Speaker 2: That continues as well as we go through the day here,
19:19
Speaker 2: Let's take a quick break when we return Wall Street Watch,
19:23
Speaker 2: and then Todd Lutsky joins us for Ask Todd, get
19:25
Speaker 2: your estate planning questions ready after this.
19:39
Speaker 1: Like us on Facebook and follow us on Twitter at
19:42
Speaker 1: TFE show. Breaking business news is always first right here
19:46
Speaker 1: on the Financial Exchange Radio Network. Time now for Wall
19:51
Speaker 1: Street Watch a complete look at what's moving markets so
19:54
Speaker 1: far today right here on the Financial Exchange Radio Network.
19:58
Speaker 6: Markets are modestly hire ahead of the conclusion of the
20:01
Speaker 6: fed's meeting, while interest rates are widely expected to hold steady.
20:05
Speaker 2: Wall Street will.
20:06
Speaker 6: Closely be watching FED sherman Jerome Paul's press conference at
20:09
Speaker 6: two point thirty. Traders are also writing for big tech
20:12
Speaker 6: earnings after today's closing bell. Right now, the Dow is
20:16
Speaker 6: up only twenty eight points, SMP five hundred, up over
20:19
Speaker 6: tenth of a percent, or ten points higher, Nasdak up
20:22
Speaker 6: a third of a percent or seventy eight points, hier
20:24
Speaker 6: RUSSA two thousand is retreating about half a percent, ten
20:28
Speaker 6: You're Treasure reeled up three basis points at four point
20:31
Speaker 6: two five three percent, and crude oil up one percent higher,
20:35
Speaker 6: trading just above sixty three dollars a barrel. The chip
20:39
Speaker 6: sector garnering attention today due to a couple of items.
20:42
Speaker 6: A SML reported solid fourth quarter earnings with orders above
20:45
Speaker 6: analysts expectations, while It's twenty twenty six sales forecast and pressed. However,
20:50
Speaker 6: shares are down by two percent. Separately, reports indicate that
20:54
Speaker 6: China has approved purchases of Nvidia's H two hundred AI
20:57
Speaker 6: chip for the first time, giving author isation to several
21:00
Speaker 6: of Nvidia's Chinese customers, and video stock is up over
21:04
Speaker 6: half a percent. Meanwhile, Amazon said it will cut about
21:07
Speaker 6: sixteen thousand corporate employees. This comes after the e commerce
21:11
Speaker 6: Grant announce the layoffs back in October of about fourteen
21:14
Speaker 6: thousand corporate workers. Amazon stock is flat. Elsewhere, Starbucks shares
21:18
Speaker 6: rallying over three percent after the coffee chain reported store
21:22
Speaker 6: traffic growth for the first time in two years, citing
21:26
Speaker 6: its turnaround efforts. Eighteen and t reported stronger than expected
21:29
Speaker 6: quarterly results, sending shares up four percent. Texas Instrument shares
21:33
Speaker 6: are jumping seven percent after reporting better than expected guidance
21:37
Speaker 6: for the current quarter. And after today's closing bell, all
21:40
Speaker 6: eyes will shift to Big Tech, where Microsoft, Meta, Tesla,
21:44
Speaker 6: and IBM will unveil their fourth quarter results. I'm Tucker
21:49
Speaker 6: Silva and that is Wall Street Watch.
21:52
Speaker 1: This is Ask Todd on the Financial Exchange Radio Network.
21:56
Speaker 1: If you have an existing estate plan or in the
21:58
Speaker 1: market for one, Tod Let's get is here to answer
22:00
Speaker 1: your questions and help you plan for later life. Ask
22:03
Speaker 1: Todd is presented by Cushing and Dolan, serving Massachusetts and
22:07
Speaker 1: New England for more than thirty five years, helping families
22:10
Speaker 1: with a state and tax planning, medicaid planning, and probate law.
22:13
Speaker 1: Visit Cushingdolan dot com. Now here's Todd Lutsky.
22:19
Speaker 2: Ask promised. We've got Todd Lutski. You're right here in
22:22
Speaker 2: studio for Ask Todd. It's your chance to ask Todd
22:26
Speaker 2: your estate planning questions, and we got the phone lines
22:30
Speaker 2: open for you. That number is eight eight eight to
22:32
Speaker 2: zero five two two six three, get calling early and
22:36
Speaker 2: often to make sure you can get in line, because
22:39
Speaker 2: Todd usually can only get through got two three questions.
22:42
Speaker 2: There's a lot of information that he likes to convey,
22:45
Speaker 2: and so unlimited time again, only get a chance for
22:49
Speaker 2: a couple of these. That number again is eight eight
22:51
Speaker 2: eight two zero five two two six three. And so
22:55
Speaker 2: if you've got state planning questions, call so you can
22:58
Speaker 2: chat with Todd right now, live on again it is
23:01
Speaker 2: eight eight eight two zero five two two six three.
23:06
Speaker 2: Mister Lutsky. How are you doing today?
23:08
Speaker 4: I am never better? How are you? I'm worried, just
23:11
Speaker 4: a little disappointed.
23:12
Speaker 2: Try to do I was making a belt out of
23:14
Speaker 2: herbs over the weekend.
23:15
Speaker 4: A belt out of herbs. Yeah, herbs.
23:18
Speaker 2: Yeah, it turned out it was just a waste of time.
23:20
Speaker 4: Yeah, that's that's true. It is.
23:21
Speaker 2: Yeah, So what do you What are you gonna do? Todd?
23:24
Speaker 2: I want to talk to you a little bit about
23:26
Speaker 2: nursing home costs.
23:29
Speaker 4: Yes, they're not cheap.
23:30
Speaker 2: I've been in this business for like sixteen seventeen years now,
23:34
Speaker 2: and it's it's hard for me to keep up sometimes.
23:37
Speaker 2: Where is kind of the range for nursing home costs
23:40
Speaker 2: at this point or even just you know, long term
23:42
Speaker 2: care expense. If someone wants to stay home but still
23:45
Speaker 2: get home care, Like, what are we looking at?
23:47
Speaker 7: So I think two things. One, you know, staying home,
23:51
Speaker 7: which of course we all want to. We all think
23:53
Speaker 7: it's better. I totally want to. But if you're at
23:57
Speaker 7: a point where you need you know, eight hours a
24:00
Speaker 7: day or someone just coming in at night or you
24:03
Speaker 7: know something like that, well that might be less than
24:05
Speaker 7: a nursing home. You know, if you need that kind
24:07
Speaker 7: of care, sure, but you know to stay at home
24:11
Speaker 7: because I need twenty four to seven care. Now you're
24:15
Speaker 7: looking at every bit as much as being in a
24:18
Speaker 7: nursing home. So well, yes, I want the luxury or
24:20
Speaker 7: the benefit of being at home and not in a
24:22
Speaker 7: nursing home. Understand it's not cheaper. And so now what
24:27
Speaker 7: is that number?
24:28
Speaker 4: You know?
24:29
Speaker 7: Here in Massachusetts anyway, it's going to be right around
24:33
Speaker 7: sixteen thousand a month if I had to guess, I mean,
24:36
Speaker 7: can you find some further out of for you know,
24:39
Speaker 7: west of four ninety five, maybe for fourteen or thirteen,
24:43
Speaker 7: but you come closer you could be looking at you know,
24:46
Speaker 7: depending on where you go. I've seen one as high
24:48
Speaker 7: as twenty two thousand a month in a pretty fancy place,
24:53
Speaker 7: I guess. But it varies, I think, is the answer.
24:57
Speaker 2: When you look at the someone who tries to qualify
25:02
Speaker 2: for Medicaid, does Medicaid pay those stated rates or is
25:06
Speaker 2: there a different rate that they pay?
25:09
Speaker 4: Yeah?
25:09
Speaker 7: And I think that's really the rub here, right, and
25:12
Speaker 7: the reason people try to get on Medicaid. Perhaps the
25:16
Speaker 7: reason people try to protect their assets from the nursing room.
25:20
Speaker 5: One.
25:20
Speaker 7: Of course, you could see how fast they would go
25:22
Speaker 7: away if you don't. But setting that aside, it's the
25:27
Speaker 7: leverage you get by being a Medicaid patient versus a
25:31
Speaker 7: private pay patient. The average cost for Medicaid with the
25:37
Speaker 7: state pays.
25:39
Speaker 4: You know, it's varying, it's.
25:40
Speaker 7: Still about sixty five hundred seven thousand, maybe seventy five
25:46
Speaker 7: hundred a month, somewhere in that range. I give you
25:49
Speaker 7: a little range there, because depending on the level of
25:53
Speaker 7: care that you need does impact the Medicaid rate. Okay,
26:00
Speaker 7: the event to say it's to say it's fifty percent
26:03
Speaker 7: of the private pay rate is probably a fair a
26:07
Speaker 7: fair bet. And so by getting on Medicaid, by getting
26:11
Speaker 7: the state to pay rather than pay personally, you are
26:14
Speaker 7: significantly slowing the bleeding of your assets for sure if
26:19
Speaker 7: no planning was done, and perhaps saving the assets if
26:23
Speaker 7: your planning has been done.
26:25
Speaker 2: Talk with Todd Lutsky. We've still got room on the
26:27
Speaker 2: phone lines for your estate planning calls. That number is
26:30
Speaker 2: eight eight eight to zero five two two six three.
26:35
Speaker 2: Again it is eight eight eight to zero five two
26:39
Speaker 2: two six three. We're gonna take a quick break here,
26:42
Speaker 2: but when we come back, we're gonna get to your
26:45
Speaker 2: questions for Todd. Again. Still a little bit of room
26:48
Speaker 2: on the phone line, so get calling to make sure
26:50
Speaker 2: you can have your questions answered by Todd. That phone
26:53
Speaker 2: number is eight eight eight to zero five two two
26:57
Speaker 2: six three. One more time, it is eight to zero
27:01
Speaker 2: five two two sixty three.
27:04
Speaker 1: Ask Todd with Todd Letsky every Wednesday at ten thirty
27:07
Speaker 1: only here on the Financial Exchange Radio Network. Todd Letsky
27:13
Speaker 1: answers your questions about a state and elder life planning
27:16
Speaker 1: every Wednesday at ten thirty right here on the Financial
27:19
Speaker 1: Exchange Radio Network.
27:28
Speaker 2: Still got Todd Lotsky here. If you've got a question
27:31
Speaker 2: about a state planning to ask him now. The number
27:33
Speaker 2: is eight eight eight two zero five two two sixty
27:36
Speaker 2: three again eight eight eight to zero five two two
27:40
Speaker 2: six three. Let's go to JP on the Cape JP.
27:43
Speaker 2: What's your question for Todd Lutsky.
27:47
Speaker 8: Well, it's a question, but it's also to share an experience,
27:52
Speaker 8: if you will, pertaining so long term care. Three family members,
27:58
Speaker 8: which basically is my parents and my grandmother needed to
28:02
Speaker 8: go to a facility after they received home care for
28:06
Speaker 8: a period of time and had quite a different experience
28:11
Speaker 8: with the three of them. One of them was well
28:14
Speaker 8: to do and had care at home and then went
28:19
Speaker 8: to assisted care. And then when you're needing the assist
28:23
Speaker 8: of more than one person to get out of bed
28:26
Speaker 8: or a chair, you can't stay there. You need to
28:28
Speaker 8: go to the facility nursing home. So my point here
28:33
Speaker 8: is this one parent, my parents split. One parent had
28:41
Speaker 8: done a state planning, basically had hidden at assets, and
28:47
Speaker 8: when she needed to go to a facility, we found
28:51
Speaker 8: it extremely difficult to access a facility that we wanted
28:58
Speaker 8: because one of the first questions they ask when you
29:01
Speaker 8: sit down for the interview is how do you plan
29:03
Speaker 8: to pay? And if you say, well, you know, I've
29:06
Speaker 8: got about twenty thousand dollars and that's about it. Well,
29:10
Speaker 8: then they say, okay, great, we'll take your name, give
29:12
Speaker 8: you a call when there's an opening. Phone's not going
29:15
Speaker 8: to ring. And then the other parent had long term
29:19
Speaker 8: care insurance, so god care at home because the cover
29:24
Speaker 8: is that good care in the assistant covers that.
29:27
Speaker 4: Yeah. Just get to the question, though, what's the question?
29:31
Speaker 8: Well, the question here is what do you think about
29:34
Speaker 8: long term care insurance? Because with Dad's case, he got
29:38
Speaker 8: accepted right away. You want a room with a view
29:42
Speaker 8: because he had.
29:43
Speaker 7: The comfort, all right, So a couple of couple of comments.
29:45
Speaker 7: I just want to try to answer the question now.
29:48
Speaker 7: So the answer is that I love long term care
29:53
Speaker 7: insurance and I tell people, if you can get it,
29:56
Speaker 7: please get it, because I think it can provide not
29:59
Speaker 7: so much full coverage for a nursing home, because very
30:02
Speaker 7: very hard to get full coverage for a nursing home
30:06
Speaker 7: because it just costs too much. Please try to get
30:09
Speaker 7: it before you're seventy, because around seventy I think it
30:12
Speaker 7: gets really hard to get it in your fifties. I
30:15
Speaker 7: don't sell it, but my understanding is in your fifties
30:18
Speaker 7: that yes, you can get it. Why I love it
30:20
Speaker 7: so much, as if it's affordable and you can, and
30:23
Speaker 7: you can get it, then please make sure that you
30:27
Speaker 7: that you get enough to cover in home care, right
30:32
Speaker 7: because they have an in home care piece and a
30:34
Speaker 7: lot of times that's why people get it.
30:36
Speaker 4: So I love that.
30:37
Speaker 7: I think the point being made here is that, yes,
30:39
Speaker 7: nursing homes are very expensive, and that's what he's mentioning.
30:43
Speaker 7: It is unfortunate that these nursing homes seem to discriminate
30:46
Speaker 7: against whether or not you have assets or you don't
30:49
Speaker 7: have assets. I do know the care is the same.
30:52
Speaker 7: You could have two people in the same bed, in
30:54
Speaker 7: the same on the same bed, but the same room,
30:57
Speaker 7: sharing that that room. One getting Medicaid rate, one getting
31:01
Speaker 7: private pay rate, and the care is the same because
31:05
Speaker 7: thankfully the provider is providing the care and they want
31:09
Speaker 7: to provide the care the same. They don't know the difference,
31:12
Speaker 7: and it is unfortunate that they do discriminate, although they
31:15
Speaker 7: should not because if you have a bed, they take you,
31:18
Speaker 7: but if you don't, then they do. They do do this.
31:21
Speaker 7: But I can tell you that you know, when you
31:23
Speaker 7: go there, you just simply tell them all the assets
31:25
Speaker 7: you have. Most people have a house. Most people you know,
31:28
Speaker 7: whether you did the planning or not is not the question.
31:30
Speaker 7: The question is whether or not these assets exist, and
31:33
Speaker 7: then at least that way you'll get in to the facility.
31:36
Speaker 7: But they should not be discriminating against, you know, people
31:40
Speaker 7: who need a Medicaid bed, but they tend to So
31:43
Speaker 7: doesn't mean I'm not going to plan. I'm certainly going
31:45
Speaker 7: to can still do my planning. But if you're faced
31:48
Speaker 7: with long term care planning last minute, this guide will
31:51
Speaker 7: explain to you how to get that how to get
31:54
Speaker 7: that care, and save your assets last minute from the
31:59
Speaker 7: cost of long term care. So once you're in a
32:01
Speaker 7: nursing home, you can then do a lot of shifting
32:04
Speaker 7: around of assets to save things. For married couples and
32:08
Speaker 7: single people, assets are treated differently like the home, like
32:12
Speaker 7: rental property, like life insurance four to oh one k's iras,
32:17
Speaker 7: they are treated differently countable non countable. The rules are
32:22
Speaker 7: out there and this guide will give you those rules.
32:26
Speaker 4: Call and get it.
32:27
Speaker 7: It's eight sixty six eight four eight five six nine
32:31
Speaker 7: nine or Legal Exchange Show dot com. We're getting close
32:34
Speaker 7: to the end of the month, folks. Eight six six
32:37
Speaker 7: eight four eight five six nine nine or Legal Exchange
32:41
Speaker 7: Show dot com. You can download it right there. And
32:44
Speaker 7: I also want to mention our Cushing and Dolan Instagram page. Folks,
32:48
Speaker 7: Cushing Dolan PC go check it out. Lots more information
32:53
Speaker 7: on there than we can give anywhere else. So please
32:56
Speaker 7: give a call or go ahead to Cushing Dolan P
33:00
Speaker 7: see and get much more content than we can give
33:03
Speaker 7: on our website.
33:05
Speaker 2: Todd got another one for you here. Let's go to
33:06
Speaker 2: Greg in Kingsboro. Greg, you are on with Todd Luvsky.
33:13
Speaker 4: Greg.
33:14
Speaker 5: Are there various products for long term air insurance? I
33:19
Speaker 5: just got pitched by my last Thursday about this and
33:25
Speaker 5: what what do I have to look at as far
33:28
Speaker 5: as the good ones versus the average one for one?
33:32
Speaker 7: Yeah, So, like I say, I am certainly not licensed
33:36
Speaker 7: at all. I want to put that out there right
33:38
Speaker 7: out front, that I'm not licensed to, you know, provide
33:42
Speaker 7: information about long term care insurance. I'll just give you
33:45
Speaker 7: my my thoughts on what I've experienced. So you know,
33:49
Speaker 7: there are some that are really good, right and they
33:52
Speaker 7: but they might be too expensive for you. I don't
33:55
Speaker 7: know what your asset level is, but you know, I
33:59
Speaker 7: tell people you got to have, you know, five hundred
34:02
Speaker 7: thousand dollars tucked away. You know, I would think to
34:06
Speaker 7: be able to afford the premium payments and not hurt
34:09
Speaker 7: yourself financially. Just my own comment, I don't really have
34:13
Speaker 7: a lot to base it on. And and I would say,
34:18
Speaker 7: you know, check, you know, how much am I able
34:21
Speaker 7: to generate an income on my own? And maybe I
34:24
Speaker 7: only need a you know, an average policy. What is
34:27
Speaker 7: an average policy? An average policy could pay you know,
34:32
Speaker 7: seven thousand a month. Maybe that's you know, half the
34:35
Speaker 7: cost of the nursing home. Maybe eight thousand a month.
34:38
Speaker 7: You find them maybe two hundred a day. I'm guessing,
34:41
Speaker 7: you know, maybe a little more. That's nice. I mean,
34:43
Speaker 7: that's at least going to provide help when you're ready
34:46
Speaker 7: to go to the nursing home. You only have to
34:48
Speaker 7: cover the difference. So I think that's helpful. And whether
34:53
Speaker 7: you're looking at this sort of more moderate life and
34:56
Speaker 7: long term care policy, also look at either way, whether
35:01
Speaker 7: it's a fancy policy or a Cadillac or a moderate one,
35:05
Speaker 7: see if it has in home care, because I think
35:07
Speaker 7: the goal is that, you know, people want to stay
35:10
Speaker 7: at home as much as they possibly can, and so
35:13
Speaker 7: they would provide some kind of a payment for in
35:16
Speaker 7: home care, so look for that as a possibility. And
35:19
Speaker 7: then I've heard other people mention that there are these
35:21
Speaker 7: hybrid policies where there's some kind of a life insurance
35:26
Speaker 7: component that exists with the long term care component. So
35:31
Speaker 7: I guess if you don't use up all the money
35:33
Speaker 7: you know, during life for your long term care when
35:37
Speaker 7: you die, there's some kind of a payout for long
35:40
Speaker 7: term care insurance, so I mean for life insurance. So
35:42
Speaker 7: that might be something to look at, but I don't
35:46
Speaker 7: really have any other ideas on that, and again that's
35:49
Speaker 7: just my thoughts.
35:50
Speaker 2: Todd any other major considerations for people if they're trying
35:54
Speaker 2: to prioritize accounting for long term care costs in their
35:59
Speaker 2: state planning.
36:00
Speaker 7: Yeah, I think when you're doing your your trust funding,
36:04
Speaker 7: and maybe that's what you mean by prioritize what should
36:07
Speaker 7: go in a trust and maybe what should stay out
36:09
Speaker 7: of a trust. Sure, So I always tell folks that
36:13
Speaker 7: you know, you can't put an IRA in, you cannot
36:17
Speaker 7: put a four to oh one K in, there's going
36:19
Speaker 7: to be a huge income tax hit, so please leave
36:22
Speaker 7: that outside the trust. I always want you to leave
36:25
Speaker 7: your personal bank account outside the trust. You know, the
36:29
Speaker 7: one that's receiving your direct deposits, social security or pension.
36:33
Speaker 7: You know, please don't put that in the trust. That
36:35
Speaker 7: will cause all kind of nightmares for you. So you
36:38
Speaker 7: have that fun money, lots almost everything else. I'd probably
36:42
Speaker 7: move house, rental property, I'd move, I'd put you know,
36:46
Speaker 7: my investment taxable investment portfolio in there. Why not get
36:51
Speaker 7: it all protected. Live on the assets outside the trust, live.
36:54
Speaker 4: On the IRA.
36:56
Speaker 7: It's at risk anyway, and saving it for the kids
36:58
Speaker 7: results in a much big income tax to them than you.
37:02
Speaker 2: So there you go, mister Lutsky, Thank you so much
37:05
Speaker 2: for joining us today.
37:05
Speaker 4: Always a pleasure. Thank you.
37:07
Speaker 1: This has been Asked Todd on the Financial Exchange Radio network.
37:11
Speaker 1: Ask Todd with Todd. Lutsky has been presented by Cushing
37:14
Speaker 1: and Dolan, serving Massachusetts and New England for more than
37:16
Speaker 1: thirty years, helping families with the state and tax planning,
37:19
Speaker 1: Medicaid planning, and probate law. Call eight hundred and three
37:22
Speaker 1: nine three four thousand and one or visit Cushingdolan dot com.
37:26
Speaker 1: The views expressed in this segment are solely those of
37:28
Speaker 1: Cushing and Dolan. Armstrong Advisory does not provide any legal
37:30
Speaker 1: or tax advice. Please consult with your legal or tax
37:32
Speaker 1: advisor on such matters. Cushing and Armstrong do not endorse
37:35
Speaker 1: each other and are not affiliated