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Oil Near $97, Mortgage Rates Jump & Are Americans Ready for Retirement? · The Financial Exchange Show

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Speaker 1: Chuck Zada and Mike Armstrong.
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Speaker 2: Chuck, Mike and Tucker with you here and as we
1:13
Speaker 2: continue through the week, big story obviously continues to be
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Speaker 2: what is going on in the Middle East and its
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Speaker 2: impact on energy markets, on other commodity markets, the global
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Speaker 2: economy as well as well. That's that's basically everything. Once
1:29
Speaker 2: you start talking about the the global economy. You know,
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Speaker 2: the galactic economy is probably not heavily impacted from what
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Speaker 2: I can tell, but globally it's it's a pretty big deal.
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Speaker 2: So in terms of what markets are doing today, the
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Speaker 2: answer is nothing good. We've got the Dow Jones Industrial
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Speaker 2: Average off about six hundred points one and a third percent,
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Speaker 2: SP five hundred down eighty three points one to quarter percent,
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Speaker 2: and NASDAK Composite down three hundred and eighty five points
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Speaker 2: one and three quarters percent, So all major US indices
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Speaker 2: are selling off today. When we take a look at
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Speaker 2: other markets beyond just what's going on in the equity world,
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Speaker 2: again continued not good. Ten year Treasury up another three
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Speaker 2: point nine basis points to four point two four five percent,
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Speaker 2: so we've now seen a full quarter percent rise in
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Speaker 2: the tenure treasury. Mortgage rates also by the way have
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Speaker 2: moved up with this as well. Thirty year fixed rate
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Speaker 2: up to six and a quarter percent as of the
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Speaker 2: close yesterday according to Mortgage News Daily, and that thirty
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Speaker 2: year fixed as recently as February twenty seventh was at
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Speaker 2: five point nine nine percent, so a quarter percent move
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Speaker 2: up in mortgage rates right as the spring housing season
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Speaker 2: kicks off as well.
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Speaker 3: Of dollar surprising Dollar.
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Speaker 2: Index is up zero point four one percent to ninety
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Speaker 2: nine sixty three, so you are seeing the dollar catch
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Speaker 2: a bid. This makes sense when you think about it
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Speaker 2: from a commodity perspective and the fact that the United
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Speaker 2: States does possess vast reservoirs of many commodities that other
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Speaker 2: countries simply don't possess, and so it clicks from that
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Speaker 2: perspective when you're looking at exchange rates, gold down thirty
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Speaker 2: dollars and twenty cents nowns to fifty one forty eight
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Speaker 2: and ninety cent, and crude oil West Texas is intermediate
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Speaker 2: up undother eight dollars and thirty five cents a barrel
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Speaker 2: to ninety five fifty today sorry ninety five sixty today,
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Speaker 2: So that's almost a ten percent move triple a national
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Speaker 2: average for gas prices rose to three point fifty nine
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Speaker 2: to eight tenths overnight.
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Speaker 3: That was up two cent.
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Speaker 2: If these West Texas intermediate prices hold, you're probably getting
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Speaker 2: into the low three seventies tomorrow nationally, and diesel probably
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Speaker 2: starting to push five dollars a gallon after being at
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Speaker 2: four eighty six right now. It was three sixty six
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Speaker 2: a gallon for diesel a month ago. So again you're
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Speaker 2: seeing continued upward pressure on commodity prices. Uh So that is,
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Speaker 2: you know, kind of the big stuff that's going on.
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Speaker 2: No major change in terms of the status of things
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Speaker 2: in the Middle East. Hormuz remains largely closed at the moment.
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Speaker 2: I did see, and let me just get confirmation of
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Speaker 2: this before I actually say anything on it, because again
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Speaker 2: I saw it come across the uh the.
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Speaker 3: Social media feed.
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Speaker 2: But I just want to make sure that I have
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Speaker 2: all my ducks in a row on it.
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Speaker 3: Let's see a.
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Speaker 4: Good lesson because generally speaking, you should trust absolutely nothing
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Speaker 4: that you see on social media right now.
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Speaker 2: No, the information environment right now is kind of crazy
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Speaker 2: and so yes, so this is from Bloomberg. The Trump
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Speaker 2: administration plans to issue thirty day waivers for the Jones Act.
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Speaker 2: Jones Act, if you're not familiar with it, is a
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Speaker 2: maritime law that requires American built ships to be used
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Speaker 2: for transporting goods between US ports. And so the the
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Speaker 2: Trump administration waving that for thirty days in order to
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Speaker 2: allow for other vessels to be able to transport goods
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Speaker 2: between US ports.
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Speaker 3: Is it just?
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Speaker 4: I think it's built, flagged, and staffed, right, yes, So
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Speaker 4: it's all. It is all three, and they're waving some
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Speaker 4: portion of the Jones Act for a period of time. So, Chuck,
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Speaker 4: I think when we take a look at the market
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Speaker 4: reaction to what we've seen so far, most of it's
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Speaker 4: been fairly orderly. Oil markets are an exception there. You've
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Speaker 4: seen massive swings and oil markets unsurprisingly, but other parts
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Speaker 4: of markets have been.
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Speaker 2: Even oil markets, to be honest, have been fairly orderly,
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Speaker 2: aside from the Sunday Night Future Session, which the Sunday
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Speaker 2: Night Future Session is always a cluster when weird stuff
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Speaker 2: is going on. You remember, back in the Russia Ukraine conflict,
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Speaker 2: there was one I forget what Sunday it was. It
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Speaker 2: was either in March or April. It was like a
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Speaker 2: month or two after it had broken out, and oil
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Speaker 2: futures like just shot up to the moon and we
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Speaker 2: never touch those again, right because the Sunday night session
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Speaker 2: it's thinly traded. No one knows what's going on after
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Speaker 2: the weekend, and so you see all kinds of crazy
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Speaker 2: stuff there. Other than that, like, yes, there have been
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Speaker 2: large moves, but it's been kind of like a slow
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Speaker 2: and steady, slow and steady.
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Speaker 3: It's been a steady.
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Speaker 2: Okay, oil prices up five percent today, five percent, you
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Speaker 2: know the next day. It hasn't been you know, some
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Speaker 2: catastrophic one day blowout aside from that Sunday Future session
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Speaker 2: where they went from ten to thirty percent up very quickly.
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Speaker 4: So earlier this week we talked about, you know, potential
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Speaker 4: best and worst case scenarios. I think the best case
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Speaker 4: is pretty obvious. You have some form of ceasefire that
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Speaker 4: has an ability to stay, which allows more ships to
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Speaker 4: navigate the straight of horn Moves, and the worst case
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Speaker 4: being that the current status quo extends for a longer
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Speaker 4: period of time. What are the signals that we're looking
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Speaker 4: for that you know, ultimately the blocking of the strait
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Speaker 4: of the horn moves is the very top of the funnel.
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Speaker 4: What are the other areas that we look at for
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Speaker 4: indications that things are dramatically deteriorating. Right, Is it refineries
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Speaker 4: shutting down? Is it signals that we can get from
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Speaker 4: agricultural industries and such?
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Speaker 3: Like?
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Speaker 5: Where will things start to show up.
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Speaker 4: In your mind that are a really bad indicator for
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Speaker 4: the global economy, you know, more than.
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Speaker 3: We're starting to see them?
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Speaker 2: Yeah, like you're seeing them in Asia because Asia is
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Speaker 2: heavily dependent. Remember, most of the stuff that is produced
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Speaker 2: in that shipped through Hormuz. It flows east, it doesn't
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Speaker 2: flow west. So this is why the US is going
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Speaker 2: to remain more insulated from the economic impacts of this
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Speaker 2: than just about any other country because the vast majority
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Speaker 2: of what goes through there flows east, not west. And
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Speaker 2: so if you look at it like things that you're
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Speaker 2: seeing today, South Korea has already imposed price caps on fuel.
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Speaker 3: That's like where you start talking about fuel shortage is happening.
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Speaker 2: I forget if it was Tiland or Vietnam, but one
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Speaker 2: of them like put out a big advisory with one
8:07
Speaker 2: of the things being included, like take the stairs, don't
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Speaker 2: take the elevator. When you're giving that advice to people,
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Speaker 2: it's like, okay, Like there's you know, a real problem.
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Speaker 2: You've got reports of diesel shortages throughout the Southeast Asia
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Speaker 2: region as well that are causing factories to not be
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Speaker 2: able to operate at full speed. These are like the
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Speaker 2: early stages of what you'll see. Again, some of it
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Speaker 2: it can just be you know, hey, like none of
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Speaker 2: this stuff is in the right place based on the disruption,
8:38
Speaker 2: you have.
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Speaker 3: To move it around a little.
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Speaker 2: But ultimately, when you're talking about this scale of disruption,
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Speaker 2: there are two ways that you can resolve it. You
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Speaker 2: either have to boost supply to get back to where
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Speaker 2: demand is or demand destruction needs to happen, and that
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Speaker 2: means lower activity throughout the world.
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Speaker 4: It would be have to have to be a hell
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Speaker 4: of a lot of demand destruction doesn't seemed likely even
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Speaker 4: at these prices.
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Speaker 2: No, I mean, it's look with with what the Saudis
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Speaker 2: are doing trying to pump east to west in order
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Speaker 2: to get it out the Red Sea, get oil out
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Speaker 2: the Red Sea. It's gonna help things a little bit.
9:13
Speaker 2: The spr releases will help a little. But again you're
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Speaker 2: going from hey, it's a twenty million barrel a day
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Speaker 2: deficit to like an eight million barrel a day deficit
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Speaker 2: that still is a meaningful deficit.
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Speaker 3: It doesn't solve it.
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Speaker 2: And this also assumes that like this will continue to
9:28
Speaker 2: work in this fashion, right. I mean, you've got this
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Speaker 2: giant pipeline that goes all through Saudi Arabia that you know,
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Speaker 2: brings stuff from east to west. Who's to say that
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Speaker 2: Iran doesn't eventually say hey, stop doing that, and they
9:42
Speaker 2: target it with a couple of drones and maybe you're
9:43
Speaker 2: successful with one.
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Speaker 3: You know, it's it's it's one.
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Speaker 2: It's a situation in which the best outcome is a
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Speaker 2: resolution today, and every day that you go forward, the
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Speaker 2: problem is becoming worse because is again we're I just
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Speaker 2: talked about oil. There oils only one of the things
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Speaker 2: that goes out like that. There's no East West pipeline
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Speaker 2: for eureea. Yeah, there's no East West pipeline for aluminum.
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Speaker 2: That stuff that is made in the Gulf that can't
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Speaker 2: get out. It just doesn't get out. It just sits there.
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Speaker 2: And so this is problematic. The other thing that's really interesting,
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Speaker 2: quite honestly, one of the things that we've been seeing
10:28
Speaker 2: is again kind of fascinating to watch. A lot of
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Speaker 2: the golf countries have been drawing down their oil stocks,
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Speaker 2: and you'll be saying, like, well, why are they doing that,
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Speaker 2: like the ones that can at least, And basically what
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Speaker 2: they're doing is they're they're emptying their their tanks on
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Speaker 2: land into these tankers that are trapped in the gulf
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Speaker 2: because then it gives them more room to keep pumping
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Speaker 2: oil into the storage that's on land. And the reason
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Speaker 2: why this matters is if they have to stop pumping
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Speaker 2: and shut in a well, that is a much longer
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Speaker 2: process to restart that well and potentially not at the
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Speaker 2: same flow rate as.
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Speaker 3: When you initially closed it. Right. So the interesting thing
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Speaker 3: that you've been seeing is like there are.
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Speaker 2: These ballast ships that are basically like sitting in the
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Speaker 2: Persian Gulf that have been empty and they're starting to
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Speaker 2: fill up over the last week or so now, but
11:19
Speaker 2: they can't go anywhere, and so it's like, oh, like
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Speaker 2: you're taking this oil, maybe you're gonna get underway. No,
11:23
Speaker 2: we're just we're sitting here because you've got all this
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Speaker 2: production and it needs to get offshore so that the
11:30
Speaker 2: so that the onshore storage facilities don't fill up and
11:33
Speaker 2: you have to stop production. So that's been kind of
11:36
Speaker 2: interesting too. Again, It's remember I am not an energy expert.
11:40
Speaker 2: I know like four percent of what I need in
11:43
Speaker 2: order to be dangerous, but I try to read like
11:46
Speaker 2: people that are, you know, in my opinion experts on
11:49
Speaker 2: this stuff. And so it's it's been informative over the
11:53
Speaker 2: last week or two. But uh yeah, again with all
11:57
Speaker 2: of this, take it all with a grain of salt,
11:59
Speaker 2: because the informationarment is very fluid, very confusing, and no
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Speaker 2: one near really knows one hundred percent of what's going on.
12:05
Speaker 2: Let's take a quick break. When we come back, we
12:07
Speaker 2: got trivia, and then we'll talk about uh is Ai
12:12
Speaker 2: stressing people out.
12:13
Speaker 3: Man, is it? Well?
12:15
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Speaker 3: Mike is Ai'm making your workload more intense? Um?
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Speaker 4: Personally, I don't know, not really, but the survey that
14:36
Speaker 4: was conducted seems to conclude that that the employees who
14:39
Speaker 4: were spoken to worked at faster paces, took on broader
14:42
Speaker 4: scopes of tasks and ended up working more hours. So
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Speaker 4: let's talk about that. If true, it means to me
14:51
Speaker 4: one of two things. Either employees are becoming more productive
14:55
Speaker 4: they can get more done in the same number or
14:57
Speaker 4: even more hours, and and it means that you need
15:02
Speaker 4: fewer employees to do the same thing, or the same
15:04
Speaker 4: number of employees to do more things, which would be
15:07
Speaker 4: exactly what you.
15:08
Speaker 5: Want out of a new technological development.
15:10
Speaker 4: The other possibility here that I think is very common,
15:14
Speaker 4: especially in big organizations, is employees are just spending more
15:20
Speaker 4: time and more intensity pondering decisions with more data from
15:28
Speaker 4: AI and ultimately achieving the same stuff. I just think
15:32
Speaker 4: of my time at as some big organizations where you know,
15:36
Speaker 4: a project would get done in whatever time you allowed
15:39
Speaker 4: to get it done, and if you gave it a
15:41
Speaker 4: month and a half, then you would spend a full
15:43
Speaker 4: month and a half debating back and forth about how
15:46
Speaker 4: the project should be done and ultimately achieving the same
15:49
Speaker 4: thing that it would have taken over a week and
15:51
Speaker 4: a half if you had just pushed yourself to get
15:54
Speaker 4: it done. Yeah, I'm not sure really which one we're
15:57
Speaker 4: getting going down? Like it is AI just allowing us
16:00
Speaker 4: to accomplish a bunch of useless work.
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Speaker 3: Well, I don't think it's useless work. Most you think
16:09
Speaker 3: all of our work's useless. I obviously not all of
16:14
Speaker 3: it is useless work.
16:15
Speaker 4: But I can kind of paint a picture in my
16:17
Speaker 4: mind where we're we're using AI to you know, try
16:21
Speaker 4: and answer questions in different ways and ultimately coming to
16:24
Speaker 4: the same conclusions while doing more work.
16:26
Speaker 3: To get there.
16:27
Speaker 2: Well, I think that I'm wondering how much of this is.
16:33
Speaker 2: You know, people that are asking AI questions versus people
16:36
Speaker 2: that are just finding AI can do their work for
16:38
Speaker 2: them more quickly and just being overwhelmed by what that means.
16:41
Speaker 2: Because if it's the latter, the case I made, I
16:44
Speaker 2: think it was a week or two ago, was look,
16:46
Speaker 2: if you took someone from nineteen twenty and put them
16:49
Speaker 2: into today's world even before I like, take them from
16:52
Speaker 2: nineteen twenty and put them into like twenty nineteen, and
16:54
Speaker 2: they'd be like, my goodness, like this is so fast.
16:59
Speaker 2: It's Shawshank Redemption. Red gets out of prison and is like,
17:03
Speaker 2: not Red, I forget his name, what's his name? Overwhelmed
17:08
Speaker 2: brooksy brooksy Brooks gets out and is like, you know,
17:11
Speaker 2: it's too fast that the world has gone and like
17:14
Speaker 2: it got.
17:14
Speaker 3: Itself in a big old hurry, right yep.
17:16
Speaker 2: And it's just because he was in prison for thirty
17:18
Speaker 2: years and like the world changed so much, and he's like, man,
17:21
Speaker 2: this is nuts. So I guess what I'm wondering is
17:25
Speaker 2: with how quickly AI allows things to iterate. Is it
17:29
Speaker 2: just you know, previous technological innovation moved at a certain
17:33
Speaker 2: pace that we could kind of keep up with, and
17:35
Speaker 2: this is just a huge jump forward, and how quickly
17:38
Speaker 2: it can do things like I had a buddy of
17:40
Speaker 2: mine who again this is in the software space, which
17:43
Speaker 2: is where a lot of the early gains are happening,
17:46
Speaker 2: and he was telling me. He's like, I had to
17:47
Speaker 2: build I forget what it was it with some kind
17:49
Speaker 2: of thing. He's like, normally I would like bring a
17:52
Speaker 2: person onto my team, tell them like speck it out
17:55
Speaker 2: and everything, and it would be a three month project
17:57
Speaker 2: for them to do it. He's like, I did it
18:00
Speaker 2: myself with AI in a day and a half.
18:04
Speaker 4: Okay, so let's take that same person and put him
18:07
Speaker 4: in this study or her in this study, whatever, whoever
18:10
Speaker 4: it was. You're being asked by your employer by a
18:14
Speaker 4: random survey or how is AI impacting your life? If
18:18
Speaker 4: I'm that person and I'm worried about my job, my
18:21
Speaker 4: answer looks remarkably similar to the one that was just given.
18:24
Speaker 4: The employees worked at a faster pace, took on broader
18:27
Speaker 4: scopes of tasks, and ended up working more hours. If
18:29
Speaker 4: I'm trying to justify my existence, yes, that's the answer
18:33
Speaker 4: I give.
18:33
Speaker 3: Yeah, So like.
18:37
Speaker 5: This is why I'm not sure the surveys are all
18:39
Speaker 5: that useful.
18:40
Speaker 3: That's fair.
18:41
Speaker 5: If I'm worried about my job.
18:43
Speaker 4: This is the precise answer I'm going to give, which
18:45
Speaker 4: is I'm able to do more and I'm willing to
18:48
Speaker 4: work more hours. So bring it on, and I can
18:51
Speaker 4: use AI to do that, because if I give any
18:55
Speaker 4: answer that, if I give an honest answer like the
18:57
Speaker 4: one that you just gave, then I might be out
18:59
Speaker 4: my job or are my employees out their job?
19:01
Speaker 3: And I don't really like that either way.
19:04
Speaker 2: Reuters, by the way, now reporting they've put out a
19:07
Speaker 2: clarification that the Jones Act waiver has not yet been
19:10
Speaker 2: finalized but is being discussed by the White House. This
19:16
Speaker 2: following a clarification from the White House Press Secretary.
19:19
Speaker 3: So same thing, different day.
19:22
Speaker 2: So we're again this is why, like the initial reports
19:25
Speaker 2: like you have to kind of watch and see how
19:26
Speaker 2: they develop because they might not be the final reports.
19:29
Speaker 2: Let's take a quick break and when we return, we've
19:33
Speaker 2: got the trivia answer in Wall Street.
19:34
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19:45
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19:48
Speaker 1: Radio Network. Tell me now full whoa Street Watch, treking
19:54
Speaker 1: the stocks, FANDATO and the headlines driving markets so far today.
19:58
Speaker 1: Right here on the Financial exchange network.
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Speaker 6: Markets selling off, with oil jumping higher again today, as
20:04
Speaker 6: we are on day thirteen of the conflict in Iran.
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Speaker 6: Right now, the Dow is down one point four percent,
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Speaker 6: or six hundred and seventy two points lower, SMP five
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Speaker 6: hundred down one point nearly one point three percent or
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Speaker 6: eighty six points lower, Nasdaq down one and two thirds
20:23
Speaker 6: of a percent or three hundred and seventy five points lower.
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Speaker 6: Russell two thousand now down over two percent. Tenure Treasure
20:30
Speaker 6: reeled is up four basis points at four point two
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Speaker 6: five three percent, and Oil up eleven percent, now trading
20:38
Speaker 6: just below ninety seven dollars a barrel. Dick Sporting Goods
20:42
Speaker 6: reported stronger than quarterly was stronger than expected quarterly results,
20:46
Speaker 6: and said its turnaround of recently acquired foot locker was progressing.
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Speaker 6: Stock Dick stock is up modestly, sticking with retail, where
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Speaker 6: Dollar General posted solid quarterly results. However, the discount retailer
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Speaker 6: disappointed investors with its annual will outlook, sending shares down
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Speaker 6: by over four percent. Meanwhile, automation and AI platform UiPath
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Speaker 6: reported better than expected quarterly results, However, the company guide
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Speaker 6: it for slower annual revenue growth, sending shares down by
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Speaker 6: six percent. Elsewhere, software company at Lassian announced it would
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Speaker 6: reduce its workforce by ten percent, allowing it to invest
21:22
Speaker 6: further in AI. That stock is off slightly, and dating
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Speaker 6: app Bumble said its turnaround strategy is yielding results, which
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Speaker 6: should help stem revenue declines this year, Bumble stock rallying
21:35
Speaker 6: by thirty four percent. I'm Tucker Silva and that is
21:39
Speaker 6: wall Stree.
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Speaker 1: Watch.
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Speaker 6: On the previous segment, we asked you the trivia question
21:43
Speaker 6: who portrayed Gandhi in the nineteen eighty two Best Picture
21:46
Speaker 6: Winder Gandhi? Well, that would be Sir Ben Kingsley. Bill
21:51
Speaker 6: from Charlestown, Mass is our winner today taking on the
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Speaker 6: Financial Exchange Show t shirt. Congrats to Bill. We play
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Speaker 2: Mike, we got a piece in the Bloomberg. Yes, Americans
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Speaker 2: are saving enough for retirement. That's a different message than
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Speaker 2: we get pretty consistently. What is the thesis laid out
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Speaker 2: by this piece?
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Speaker 4: Yeah, I disagree with the title of the article. I
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Speaker 4: disagree with some of Allison's conclusions, and I agree with others.
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Speaker 4: Her overall conclusion, which I agree with, is that we
22:29
Speaker 4: shouldn't dedicate more of our societal resources towards lowering tax
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Speaker 4: rates and providing other benefits to seniors because of their
22:43
Speaker 4: bad shape they're in for retirement. I agree with that conclusion,
22:46
Speaker 4: But her conclusion that Americans are saving enough for retirement
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Speaker 4: I think is heavily debatable. Here's her main point. In
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Speaker 4: twenty twenty two, Americans aged sixty and over had a
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Speaker 4: media net worth of nearly half a million dollars four
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Speaker 4: hundred and fifty thousand dollars. There's eighty seven thousand in
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Speaker 4: financial assets in inflation adjusted dollars. In nineteen eighty nine,
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Speaker 4: the same group had only two hundred and ten thousand
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Speaker 4: debt worth and forty five thousand in financial assets, And
23:14
Speaker 4: so she points out accurately that, hey, you know, the
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Speaker 4: financial asset bucket has doubled. The point here that she
23:21
Speaker 4: alludes to, but I think ignores is the value of
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Speaker 4: those pensions in nineteen eighty nine that very much existed.
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Speaker 4: She points out that, hey, we don't have pensions anymore,
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Speaker 4: but then does not account for the value of those pensions.
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Speaker 4: Because here's what you care about. When you're retired, is
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Speaker 4: how much can my assets provide me an income? Unless
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Speaker 4: your only focus is providing an inheritance, the real thing
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Speaker 4: that matters about your four oh one K is how
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Speaker 4: much of it can I actually live off of? So
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Speaker 4: here are the averages that I pulled using her own data.
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Speaker 4: So the average source security benefit for a couple in
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Speaker 4: twenty twenty two was two thousand, seven hundred and fifty
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Speaker 4: three dollars combined the financial assets eighty seven thousand dollars.
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Speaker 4: If you adhere to the four percent rule, you can
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Speaker 4: kick in an extra two hundred ninety dollars a month
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Speaker 4: into your budget from that four percent rule on the
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Speaker 4: eighty seven thousand dollars, giving you a household income of
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Speaker 4: about three thousand dollars, which, to her point, is above
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Speaker 4: the federal poverty level. The federal poverty level back in
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Speaker 4: twenty twenty two for a two person household was eighteen
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Speaker 4: thousand dollars.
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Speaker 3: Great, you're not in poverty, but.
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Speaker 4: Not much more. Right, Yes, you are not technically in poverty.
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Speaker 4: You're not paying any taxes, but I don't. I don't
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Speaker 4: think in most parts of the country, three thousand dollars
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Speaker 4: a month is enough to deem yourself ready to retire,
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Speaker 4: I guess would be my main compelling point. I know
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Speaker 4: some people can manage it, but it's not a lot
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Speaker 4: of money. And again, her point here seems to be that, hey,
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Speaker 4: the transition from pension to four oh one K was
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Speaker 4: a massive success, and don't you know, don't change it.
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Speaker 4: And I'm just not sure we can conclude that I'm
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Speaker 4: in the same boat. I'm just not sure that that
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Speaker 4: is the right conclusion to come to other points she makes,
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Speaker 4: like don't allow private equity into four oh one K plans. Yeah,
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Speaker 4: I think you got a compelling argument there, don't you know,
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Speaker 4: screw up what's already working fairly well by adding complex
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Speaker 4: products into it. Let's not push even bigger tax cuts
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Speaker 4: for seniors after we just did do a pretty big
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Speaker 4: tax cut for.
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Speaker 5: Seniors in twenty twenty five.
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Speaker 4: So I'm on board with those other conclusions, but I
25:36
Speaker 4: would not take away that, hey, we as Americans are
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Speaker 4: so well prepared for retirement now compared to the eighties.
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Speaker 4: I think that is a highly qualified statement and something
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Speaker 4: that people really do need to pay attention to, right,
25:51
Speaker 4: I mean, this date is four years old. Now, I'm
25:53
Speaker 4: certain that retirees have more in financial assets today than
25:58
Speaker 4: they did four years ago. Hopefully over one hundred thousand
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Speaker 4: would be my guess if we're just talking about inflation adjusting.
26:04
Speaker 4: But that is especially in coastal parts of the nation,
26:12
Speaker 4: incredibly difficult to live off of, incredibly difficult. There are questions,
26:17
Speaker 4: There are a multitude of questions about how long money
26:20
Speaker 4: like that can last. Obviously, anybody that has watched their
26:25
Speaker 4: own family members age has questions about how that spending
26:30
Speaker 4: pattern could change due to health reasons over time. I'm
26:33
Speaker 4: not even talking about a nursing home here. I'm just
26:35
Speaker 4: talking about the idea that, hey, I've got this great,
26:38
Speaker 4: big house. Can I maintain it the same way I
26:40
Speaker 4: could in my forties when I'm in my eighties. And
26:45
Speaker 4: then you know looming questions of course about the security
26:49
Speaker 4: of Social Security and whether or not, rather what the
26:53
Speaker 4: solution will be to ensure that the program can continue
26:57
Speaker 4: to exist, which is becoming increase in increasingly relevant day
27:01
Speaker 4: to day. If you have your own questions about not
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Speaker 4: society's preparedness for retirement, but your preparedness for retirement and
27:10
Speaker 4: how much you have saved, and whether or not it's
27:12
Speaker 4: likely to be enough to cover your expenses.
27:16
Speaker 3: You've got to do the work. You've got to work.
27:19
Speaker 4: With somebody or do the work yourself to study it
27:21
Speaker 4: and figure out how much you're likely to accumulate by
27:24
Speaker 4: the time you retire, and whether or not it's enough.
27:26
Speaker 4: If you need help with that, call the folks at
27:28
Speaker 4: Armstrong Advisory Group. We work with our clients every day
27:31
Speaker 4: to assess this question. Ideally well ahead of when you retire,
27:36
Speaker 4: but regardless of whether or not you're there ten years
27:39
Speaker 4: ahead of time, we're already there and trying to make
27:41
Speaker 4: sure you're in a good position We can help. The
27:43
Speaker 4: number again is eight hundred three nine three four zero
27:46
Speaker 4: zero one.
27:47
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:50
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:52
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
27:56
Speaker 1: your own financial tax into state planning advisors before making
27:58
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
28:01
Speaker 1: advisory services.
28:04
Speaker 2: Let's see talking about social security and retirement. One thing
28:07
Speaker 2: to pay attention to as a result of where energy
28:11
Speaker 2: and commodity prices in general inflation may go over the
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Speaker 2: next six months is hey what's the potential impact that
28:18
Speaker 2: this has on the cost of living adjustment for twenty
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Speaker 2: twenty seven based on the inflation data from February, which
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Speaker 2: obviously predates this. The Social Security cost of living adjustment,
28:32
Speaker 2: according to Mary Johnson, who's a Social Security and Medicare analyst,
28:36
Speaker 2: thought that the COLA for this year for next year
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Speaker 2: rather might be one point seven percent. The Senior Citizens
28:43
Speaker 2: League thought that it might be in the two point
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Speaker 2: eight percent range. So those are kind of a big
28:48
Speaker 2: range one point seven to two point eight. But ultimately
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Speaker 2: it's hard for me to see a world in which
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Speaker 2: what's going on in the Middle East results in the
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Speaker 2: cost of living adjustment moving lower than either of those
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Speaker 2: numbers for twenty twenty seven.
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Speaker 4: Yeah, we'll see, obviously how long this all lasts, but
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Speaker 4: it does feed right into the calculation there, so we'll.
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Speaker 2: See how that develops on this front. Just take a
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Speaker 2: quick break. When we come back, we'll do a little
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Speaker 2: bit of stack.
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Speaker 1: Roulet's follow the Financial Exchange on Instagram for market insight clips,
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29:42
Speaker 3: Mike, what do we got for stack roulettes? We got Costco.
29:45
Speaker 4: We were talking a little bit about tariffs and the
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Speaker 4: federal government saying it's going to take over four million
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Speaker 4: hours to calculate all the tariff refunds.
29:53
Speaker 5: In the meantime, I think we need to make it a.
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Speaker 4: Little bit more difficult for people to sue each other
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Speaker 4: and companies and everybody else. I know that maybe sounds
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Speaker 4: on American because we love suing each other.
30:05
Speaker 5: But Costco is being sued saying I.
30:08
Speaker 4: Know Costco is being sued by customer over their tariff refunds.
30:12
Speaker 4: So Costco raised prices on a whole bunch of items,
30:15
Speaker 4: just like many other companies. They have not yet received
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Speaker 4: any terriff reimbursements so far as I know, and yet
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Speaker 4: customers at least one customer is filing a lawsuit against
30:26
Speaker 4: Costco demanding a reimbursement of the increase prices he paid
30:30
Speaker 4: on goods from Costco.
30:32
Speaker 3: Which I don't see the problem with it, to be honest.
30:36
Speaker 4: With the lawsuit, Yeah, why why would Costco not have
30:40
Speaker 4: every right in the world to raise prices, regardless of
30:43
Speaker 4: the reason they want to.
30:44
Speaker 2: Why would anyone be entitled to a re if the
30:46
Speaker 2: reason they raised the price was illegal.
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Speaker 5: No, no, no, no, no no.
30:50
Speaker 4: The reason they raised the price is because they wanted
30:52
Speaker 4: to maintain their margins, regardless of the you know, underlying
30:56
Speaker 4: cause for it. Right, Like if a company raises their
31:01
Speaker 4: prices because they think oil prices are going to go
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Speaker 4: up and then they don't, Am I entitled to a
31:07
Speaker 4: refund because of that?
31:09
Speaker 3: No, because there was nothing illegal that happened.
31:11
Speaker 4: Was there any contract that Costco had with their customer
31:13
Speaker 4: to say, hey, we're raising this just because of terrorists
31:16
Speaker 4: and we'll let you know if we get the tariff
31:18
Speaker 4: money back.
31:18
Speaker 5: Like, no, none of this makes any sense to me.
31:21
Speaker 2: So if you want to make a case that it's
31:24
Speaker 2: going to be really hard for the plaintiff to prove
31:26
Speaker 2: like the exact level of damages with you. But in general,
31:32
Speaker 2: when something like, let's think of it from this perspective,
31:37
Speaker 2: let's say that let's look at Bernie made Off as
31:41
Speaker 2: an example. Sure, okay, there are risks associated with investing.
31:46
Speaker 3: Obviously.
31:48
Speaker 2: One of the ones that is not covered by any
31:50
Speaker 2: kind of you know, insurance is if your broker turns
31:54
Speaker 2: out to be you know, fraudulently, you know, running a
31:56
Speaker 2: Ponzi scheme. And so what ended up happening after the
32:00
Speaker 2: whole made off thing is a bunch of investors got
32:02
Speaker 2: together like, hey, we are going to sue for you know,
32:05
Speaker 2: the return of our capital because this happened due to fraud.
32:10
Speaker 2: And you ended up with the bankruptcy trustee. You came
32:12
Speaker 2: through and was like, yeplake, this is what happens. Your
32:14
Speaker 2: money's returned. Now it's a different case obviously, because well
32:19
Speaker 2: again it's it's one form of illegality versus another. And
32:24
Speaker 2: so if price is moved up because of something fraudulent, Okay,
32:29
Speaker 2: let's look at another example just that you could see hypothetically.
32:33
Speaker 3: Let's say that I were trying.
32:38
Speaker 2: To buy a concert ticket and there happens to be
32:41
Speaker 2: a monopoly on you know, who runs the concert business.
32:47
Speaker 2: And it's later you know, deemed that hey, like X happened,
32:51
Speaker 2: and so you know, this is you know, the problem
32:54
Speaker 2: with this because it was you know, legally concentrated and
32:57
Speaker 2: so on and so forth in theory, and we've seen
33:00
Speaker 2: this in other industries. You say, okay, like, how do
33:03
Speaker 2: I you know, pay damages out to the plaintiffs in
33:06
Speaker 2: this case, By the way, the money is going to
33:08
Speaker 2: be refunded to Costco and those other companies, So it's
33:12
Speaker 2: not like we're talking about there's no money going back.
33:14
Speaker 2: It's just, hey, Costco raised prices because of the tariffs
33:18
Speaker 2: that were then deemed to be illegal. The money has
33:20
Speaker 2: been returned to them. Why would the plaintiffs not say
33:24
Speaker 2: I want some of that too. I don't think there's
33:26
Speaker 2: anything wrong with that.
33:27
Speaker 3: Now.
33:28
Speaker 2: Are they gonna have a tough time being able to
33:29
Speaker 2: prove the specifics of the damages to the point where
33:33
Speaker 2: I think they might not get anything absolutely because they
33:37
Speaker 2: like they don't have any of the invoices or anything
33:40
Speaker 2: like that. I'm sure they'll be able to request them
33:42
Speaker 2: in discovery, but like there's a pretty pretty clear trail
33:46
Speaker 2: that's going to be out there. Then saying hey, I
33:49
Speaker 2: bought this trellis at Costco for fifteen dollars. The invoice
33:56
Speaker 2: that Costco paid at the border said there was a
33:59
Speaker 2: ninety sent tariff, Give me my ninety cents.
34:02
Speaker 3: Yeah, I don't know. That seems pretty.
34:06
Speaker 2: Why if if the tariff wasn't if there's a cost
34:09
Speaker 2: that was imposed illegally by a vendor, like if the
34:14
Speaker 2: federal government has to refund it to the vendor.
34:16
Speaker 3: I think that, can't you say? I think.
34:19
Speaker 4: I never got in a line item invoice that indicated
34:22
Speaker 4: that I'm paying a higher price because of a tariff.
34:24
Speaker 4: I might have the Costco did, right, but you know
34:28
Speaker 4: what point of me, being Costco's customer, has anywhere written
34:32
Speaker 4: that I am entitled to a portion of this price
34:34
Speaker 4: if it goes back to Costco. It seems very far
34:36
Speaker 4: fetched to me. I don't I don't really understand the Uh, well.
34:41
Speaker 2: Maybe I'm missing something, but contract it was the prices
34:44
Speaker 2: were raised based on an illegal action.
34:48
Speaker 3: Right, but not by Costco.
34:50
Speaker 4: So I the prices were raised by Costco, the illegal
34:53
Speaker 4: action wasn't conducted by Costco.
34:56
Speaker 3: I'm not sure it matters. Like again, the money's being
34:58
Speaker 3: refunded to Costco.
35:00
Speaker 4: Yeah, this all seems crazy to me, ludicrous. I don't
35:03
Speaker 4: really Yeah, yeah, I don't know. Maybe I'm way off base,
35:07
Speaker 4: but seems absolutely preposterous to me.
35:09
Speaker 2: I mean, look, there's plenty of lawsuits that I think
35:11
Speaker 2: are dumb, Like you know, the guy who's suing over
35:13
Speaker 2: the tuna that's not tuna.
35:15
Speaker 5: Or the McDonald's coffee that's too hot.
35:18
Speaker 2: You know, like okay, like, how were you harmed by
35:20
Speaker 2: your tuna not being actual tuna?
35:22
Speaker 3: Yeah? What's what's the big deal there in this case?
35:25
Speaker 2: Again, I'm not saying that like ninety cents is a
35:29
Speaker 2: good reason to sue, and and lawyer's fees will probably
35:31
Speaker 2: eat up any returns that happen even if they're victorious.
35:35
Speaker 2: But I understand the basic principle of it.
35:37
Speaker 3: I guess, yeah, I'm not there.
35:40
Speaker 5: Fair.
35:41
Speaker 2: Uh, let's see, what do I want to talk about?
35:48
Speaker 3: Oh?
35:48
Speaker 2: Yeah, this is one that's definitely gonna show up later
35:50
Speaker 2: this year. Why the AI boom will make phones, cars,
35:53
Speaker 2: and electronics more expensive. Already have very shortage and probably
35:57
Speaker 2: and the cost of memory chips has gone up like
36:01
Speaker 2: anywhere from fifty to three hundred percent, depending on the specific.
36:04
Speaker 3: Type that you're looking at.
36:06
Speaker 2: And so what it means, uh is yeah, in some case,
36:10
Speaker 2: actually spot prices are up seven hundred percent, but the
36:12
Speaker 2: vast majority are you know, close to like three. What
36:15
Speaker 2: you're going to see again, this is not going to
36:17
Speaker 2: be like the only cost associated with buying a new smartphone.
36:22
Speaker 2: Expect one of two things, either bad availability for devices
36:28
Speaker 2: needing memory next year, which is like basically any electronic
36:31
Speaker 2: device at this point or expect to see prices moving
36:34
Speaker 2: up in a material fashion five ten percent something like
36:37
Speaker 2: that because of the cost of memory moving up as
36:40
Speaker 2: a component. We already covered that a couple of weeks ago.
36:43
Speaker 2: Costco was removing memory chips from their display computers to
36:47
Speaker 2: prevent people from stealing them, and so things are a
36:50
Speaker 2: little bit gnarly in memory land. Yeah, so this is
36:52
Speaker 2: going to be a thing.
36:53
Speaker 4: Yeah, it's really kind of impossible for me to imagine
36:57
Speaker 4: a scenario where electronics can not go up in price.
37:00
Speaker 4: There's no replacement to what has been bid up, and
37:03
Speaker 4: there's no slowdown that's likely to occur in the near
37:06
Speaker 4: future of demand for this stuff from AI, so they
37:09
Speaker 4: can afford to pay more than you and I, and
37:11
Speaker 4: prices are going to go out for all of us.
37:13
Speaker 2: Heading towards the bottom of the hour, stocks remain negative.
37:15
Speaker 2: The Dow is off one and a quarter percent, the
37:18
Speaker 2: S and P's off one NASDAC off about one point
37:21
Speaker 2: four percent, so all major US indices are in the
37:24
Speaker 2: red at the moment. Treasury is also continuing to sell
37:29
Speaker 2: off right now. Tenure Treasury up three point seven basis
37:32
Speaker 2: points to four point two four five percent, So again
37:37
Speaker 2: just kind of basically most things selling off, aside from
37:41
Speaker 2: oil and some other commodities that are seeing some bids today,
37:45
Speaker 2: but kind of a tough day out there to this point.
37:47
Speaker 3: Though.
37:47
Speaker 2: The other thing that I'll say is, look, this is
37:50
Speaker 2: a market that has continued to just kind of wobble
37:52
Speaker 2: but not really break in either direction recently. We're right
37:56
Speaker 2: now kind of near the bottom end of the range
37:58
Speaker 2: that we've been in for the last five six months,
38:02
Speaker 2: but it doesn't mean that you necessarily break lower. So
38:05
Speaker 2: we'll see where things go in the coming days and weeks,
38:09
Speaker 2: because none of us know when we're all minute to
38:11
Speaker 2: minute on this. Right now, things are moving quickly. Let's
38:14
Speaker 2: take a quick break for the next twenty four hours,
38:17
Speaker 2: but we're gonna finish things tomorrow. We'll finish the week tomorrow,
38:21
Speaker 2: and then we'll be back on Monday after that. But
38:23
Speaker 2: we'll see it tomorrow for now, on the Financial Exchange