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What does a second Trump term mean for retirement? · The Financial Exchange Show

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This is the Financial Exchange with Chuck Zada and Mike Armstrong.
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Speaker 2: Kicking off hour two of the Financial Exchange, and markets
1:17
positive but a little bit more mixed than nanstay. Actually,
1:20
the Dow just went negative for the day. The Dow's
1:22
off twenty one points, the S and P's up thirty
1:25
two in NASDAC up two twenty one. So this much
1:27
more like what we've seen for the last couple of years,
1:30
with tech leading the way and everything else kind of
1:33
getting dragged along the best it can. The tenure US
1:37
Treasury reversing some of its move from yesterday, down eight
1:39
basis points to four point three four percent. We've got
1:44
oil today down twenty one cents a barrel to seventy
1:46
one forty eight. The triple A National AVERAGUR gas prices
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is down one tenth of ascent to three ten and
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six tenths. We still can't get below that three to
1:55
ten number. Let's see. We've got gold today back up
1:59
two twenty nine dollars and ten cents an ounce after
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losing a couple percentage points yesterday. So a little bit
2:06
of a retlacement on bonds and gold as well. As oil.
2:10
US equities again generally still moving up, but it does
2:14
look like a again kind of reversal of yesterday. Bank
2:19
stock's getting hit today. JP Morgan down three and a
2:21
quarter percent, Wells Fargo down two point six. So again,
2:27
this is why you can't read too much into one
2:29
day of moves. It doesn't mean that that's what you're
2:31
gonna get for you know, the next year, two or
2:33
four from a Trump administration stock market. You kind of
2:36
have to take it as it comes. Mike I said
2:40
that we were gonna spend most of our time today
2:44
talking about the potential, you know, outlook for a Trump
2:49
two point zero presidency. I think we do need to
2:52
take a brief bit of time maybe this segment, in
2:55
order to talk about what normally would be a big deal,
2:58
which is, hey, there's a FED meeting this afternoon.
3:00
Speaker 3: Sure is, Yeah, two thirty pm, you're gonna hear from
3:04
good old Paldrome on the state of the economy. So
3:07
to structure things going on. I know we've talked a
3:10
lot about that propensity for higher inflation, that possibility down
3:13
the road depending on policies coming from a Trump administration.
3:18
Speaker 2: For the Federal Reserve.
3:19
Speaker 3: Right now, they are on a path of rate cuts,
3:21
and I am very certain they will receive questions about
3:26
markets yesterday the presidential election, and I'm also very certain
3:31
that they will do their very best to not really
3:34
acknowledge those questions and just basically tell people that they
3:38
will see what happens during a Trump administration, and there's
3:41
no point in reading too much into it at this point.
3:43
Do you expect anything different on those questions.
3:46
Speaker 2: No, I mean, look, they're just gonna say, hey, look,
3:48
we're data dependent. You know, we're gonna do blah blah blah,
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and YadA, YadA, YadA. The piece that is interesting, and
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I again, this to me is almost more evidence that
4:00
we're kind of in that soft landing phase still right now.
4:05
Stanley drunk Miller. Drunken Miller is again a very well
4:10
known trader and investment manager who's done quite well for
4:15
himself over the course of his you know life, and
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his quote here is when this whole inflationary episode started,
4:24
I say two years ago and a half, two and
4:25
a half ago, I was confident inflation was gonna come down,
4:28
so I was right on, but I was worried about
4:29
the economy, which I was completely wrong. On. You can
4:32
take this with a grain of salt. Since I had
4:33
one right and one wrong there, I've switched to being
4:35
more worried about inflation going forward than the economy himself.
4:38
So look, Stanley's a smart dude, no doubt about it.
4:43
The reason I say, look, this could just be, you know,
4:46
kind of the soft landing is it was only a
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couple months ago that Jeremy Siegel went on I don't
4:55
know at least one morning show, one of the it
4:57
was either Bloomberger, San BC, I'm pretty sure Bloomberg, and
5:01
was calling for an emergency seventy five basis point rate
5:05
cut because unemployment was moving up heading into the fall. Yeah,
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you remember this, And I made fun of Jeremy Siegel
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because again, Siegel is a smart dude. He's got like
5:14
a PhD from Wharton. He's no dummy, he's not stupid.
5:19
But what he said was stupid that day, and like you,
5:23
when you do that, you have to be called out
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because when you're calling for emergency seventy five basis point
5:29
rate cuts that week, when there's not a FED meeting
5:30
for another two or three weeks, you have to be
5:33
confident that there's an actual emergency happening, and it's been
5:37
pretty clearly born out over the last eight weeks now
5:39
that there just wasn't. So it dovetails into this where
5:44
now we've got, you know, a couple months of economic
5:46
data that looks better. Is this reel or was the
5:50
two months before this reel? I don't know. My answer
5:53
is both. And it's not just I'm not just being
5:57
cute about this. What I'm saying is the soft lene
6:01
is not linear. It's not like you just come down
6:03
in the plane and you get to the runway and
6:04
you're like, oh, like this is great. It is alternating
6:08
between time periods where things look like they're cooling down
6:11
too much but then don't, and look like they're heating
6:14
up too much and then don't. Because the economy's not stagnant,
6:17
it doesn't just get to like a level place and
6:19
hang out. And so the key on the soft landing
6:23
is that you have those guardrails where it doesn't heat
6:25
up or cool down too much. And that's the bouncing
6:28
that we're going through right now. So I'm not sure
6:32
that there's anything there. When it comes to drunken Miller
6:35
saying this just like there wasn't anything there when Jeremy
6:40
Siegel was yelling about emergency seventy five bases point rate
6:43
cuts and drunken Miller is much more you know, calm
6:46
about this. I'm not calling him because I don't think
6:48
what he's saying is is dumb and I don't think
6:50
he's calling for anything rash. But I'm wondering if this
6:53
expression here of hey, I'm more worried about inflation going
6:57
forward is simply because we're in one of these two
7:00
month cycles where growth has looked better and maybe we're
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getting ready just for a two month cycle where it
7:05
looks a little worse. Yeah.
7:07
Speaker 3: Again, I think just stopping the back and forth reaction
7:12
to every data point it would be helpful here. And
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I think actually the Fed itself is doing fine with that.
7:18
Unless they come out this afternoon and say, oh, we've
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completely reversed course because of what equity markets have done,
7:23
which would be really surprising, then they're not really reacting
7:27
to all this. The potential mistakes that could be made
7:31
would be, you know, cutting dramatically too far and ignoring
7:35
what might be inflationary policies coming out of DC. But again,
7:39
let's not hold them to the fire for things that
7:41
they will be doing in like Q two of twenty
7:44
twenty five. In terms of expectations here though, for this
7:49
afternoon's decision, there's a ninety seven percent chance that the
7:54
FED cuts by a quarter of a percent. There is
7:57
likewise a sixty Actually this has shifted a little bit,
8:02
a sixty six percent chance that they will cut at
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each of the next two meetings. There's actually a one
8:08
in three chance now that they stop after this next
8:11
rate cut. A month ago that was a lot much
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smaller in terms of likelihood. So clearly things moving around
8:17
a little bit on the multiple rate cuts. But the
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questions that I now have would be where do rates land?
8:26
Where is that you know, neutral rate if they find one,
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and when do they find it?
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Speaker 2: Right?
8:31
Speaker 3: When does the FED stop this current cutting cycle that
8:35
they are in. I know it's going to be data dependent,
8:38
but you know what is going to be the signal
8:41
for Jerome Powell? And I think that's actually an interesting
8:43
question to be asked this afternoon. What are the signals
8:45
you're looking for for the pause in this rate cutting cycle?
8:49
Speaker 2: Yeah, I think that's fair. Let's take a quick break here.
8:54
When we come back, we'll talk about how excited J.
8:58
Powell is to work with Trump again.
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Speaker 2: Mike. Let's talk a little bit about uh J. Powell
9:59
and he's not on the job that he's done to
10:02
this point. There's a piece in Bloomberg today It's titled
10:06
Jay Powell's Back in Trump's World and about to feel
10:09
the heat. And I think this is gonna be an
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interesting dynamic to watch here. From what I've gathered, it
10:15
seems like Powell is likely to finish out his term
10:19
as FED chair. It ends in early twenty twenty six,
10:22
and so he will be the FED chair for the
10:24
next couple of years. Remember, he was originally appointed by
10:27
President Trump during his first term in office, and Trump
10:31
was very aggressive in trying to job own the FED
10:35
to keep interest rates low during his term in office.
10:39
So I think this is gonna be interesting to watch
10:41
the dynamic here and what Trump is looking for out
10:44
of Powell, simply because if and again, Jay Powell's like
10:49
his own dude, you know, Like, ultimately, I think he's
10:54
a big boy. He'll figure it out. But I wonder
10:59
if at this point, with this economy and where rates are,
11:03
can Trump, you know, try to jawbone him lower and
11:06
you know, again, Powell maintains his independence. I think they've
11:10
done a pretty good job of that through two different
11:12
administrations to this point. But I'm curious how this relationship
11:16
looks in this term, and again whether or not it
11:18
takes on a little bit different tenor than the first term,
11:22
just because, as we discussed earlier in the show, it's
11:25
a fundamentally different economy right now.
11:26
Speaker 3: Yeah, I mean, can he try and draw bone the
11:28
FED lower on rates? Absolutely, and and he will. Will
11:32
he be successful, Will dron Powell actually feel that pressure?
11:36
Will he maintain that independence that he's been pretty fierce
11:39
about over the last eight years. Those are all reasonable
11:41
questions to ask. But I think certainly he's going to
11:43
face pressure to lower rates, and frankly does under any administrations.
11:48
The Trump one just happens to be the most public
11:52
that we've seen about this type of thing in well. Ever,
11:57
in terms of pressure on the FED. The interesting piece
12:00
I think goes back to what we talked about, which
12:02
is there's probably some period of time, and I don't
12:06
know when in twenty twenty five, but sometime in twenty
12:09
twenty five where, based on where this economy is heading
12:11
right now, at least the FED might hit the pause
12:15
button on rates coming down. And I think that's probably justified.
12:20
I think it's probably also not where Donald Trump will
12:23
want rates to be. Ultimately, when he's looking at the
12:26
state of markets in the economy. And so that's where
12:29
I think we are heading for a just a natural
12:34
face off here between you know, where drone policies this
12:37
economy going and the propensity for higher inflation and where
12:40
Donald Trump is going to want to see rates going.
12:43
Speaker 2: And yeah, it is.
12:44
Speaker 3: Going to be if nothing else entertaining. Obviously, we still
12:49
have the House to work out here and that will
12:51
factor into things as well. But I think from a
12:55
pure possibility of inflation standpoint, what I think the most
13:00
economists would probably acknowledge is that a full sweep from
13:05
Republicans has a higher propensity for more inflation than a
13:10
split Congress. And by the way, the same probably would
13:14
have been said about a full sweep of by Democrats
13:16
and Kamala Harris, because when that happens, you have more
13:20
spending programs, more of your more of your agenda can
13:24
get through. And in either case, from these two candidates
13:27
that we had, you had at additions to the deficit
13:30
that I could I think could reasonably be seen as inflationary.
13:33
Speaker 2: Yeah, the projections I'm seeing again, this is not going
13:36
to be fully done. Honestly, some of this might not
13:39
be done for a month still just because of where
13:41
some of these races are heading. But in the House
13:45
right now, Decision Desk has their current projection at Republicans
13:49
having two hundred and twenty one seats, Democrats two fourteen.
13:51
Remember you need two eighteen for control, so Republicans could
13:54
have three defections without you know, before they're unable to
13:59
pass a bill. That's that's tight, especially when you look
14:02
at and the reason why it's tight is you look
14:05
at some of these wins, whether again in either Republicans
14:08
or Democrats. You know, look at you know, candidates where
14:12
I'm just trying to find the closest race. Here we go,
14:14
Pennsylvania District seven. Ryan McKenzie beat Susan Wilde by one
14:21
point four percent, fifty point seven to forty nine to three.
14:25
Ryan mackenzie can't go and take a risky vote that
14:27
would alienate you know, one percent of swing voters because
14:30
he loses then in the midterms. So that's what you see,
14:34
you know, in terms of how the size and scale
14:37
of a majority impacts this. And this is another key difference,
14:40
by the way, from President Trump's first term. Trump came
14:44
into office in twenty seventeen Republicans had a two hundred
14:47
and forty one seat majority in the House. Yeah, you
14:50
can lose twenty people and it wasn't a problem, right,
14:52
you can lose three now, So it's it's tighter on
14:55
that side. In the Senate. What we're seeing at the moment,
14:59
decision desk currently has this these two races, you actually
15:03
can't one of them. You can Arizona. Ruben Gallego is
15:06
going to most likely end up beating Carrie Lake. The
15:11
Pennsylvania one is still too close to call. McCormick right
15:15
now holds a zero point four percent lead on Casey
15:19
the Democrat, and the stuff that is still remaining to
15:23
be counted. There's like sixty or seventy thousand votes in
15:28
Philly and then ten or twenty thousand elsewhere. And based
15:32
on that, this thing is gonna be within it looks
15:35
like it might be within like ten thousand votes in
15:37
an election that's gonna have seven million votes. It's probably
15:40
heading for a recount. It's probably heading for a million lawsuits.
15:44
We might not know the answer on this one until Christmas,
15:46
right like, it could be a little while there. Either way,
15:50
Republicans likely to have either fifty two or fifty three
15:53
seats in the Senate, again slim majority, but like two
15:57
seats in the Senate, generally.
15:58
Speaker 3: You can get stuff done.
15:59
Speaker 2: Well, here's the thing, you can get bills done through reconciliation. Right,
16:03
still can't pass new legislation without something across the aisle
16:07
because of the sixty vote need on the filibuster. So
16:12
this is something where again talking about what you can
16:15
do legislatively, you have some room, but it's not as
16:19
much as Trump had in his first term in the House.
16:21
And that is a key difference there. We were talking
16:25
about Powell, how did we get talking about this.
16:28
Speaker 3: Propensity for higher inflation? I think is where we okay
16:31
got there?
16:31
Speaker 2: Sure, Sure, And again I think it's just good to
16:34
keep people updated because they're still counting. It's I just
16:39
I don't understand how you can still be counting this
16:41
late quite honestly.
16:44
Speaker 3: Yeah, like figure, I don't have an answer, but you
16:47
should be able to figure that out a lot faster.
16:48
Speaker 2: Here's the thing. Florida got embarrassed back in two thousand
16:52
when they had the whole you know, hanging chads and
16:55
this and that. We were literally counting for two months
16:57
and then they fixed it. They invested millions of and
17:00
now we have Florida results completed in two hours.
17:03
Speaker 3: When did we know Florida We had ninety percent of
17:04
the vote counted in Florida by like seven thirty.
17:07
Speaker 2: They were done in two hours, and it's ten million votes. Like,
17:12
just find what they did back after two thousand and
17:15
be like, that's what we need to do everywhere, yeh,
17:17
because they do a really good job there, you know,
17:19
for we.
17:20
Speaker 3: Spent a lot of time making fun of Florida. They
17:22
count votes very efficiently, and they are They're.
17:24
Speaker 2: Fantastic at it. Whatever they're doing, you need to model
17:27
your state after that, you know, not your insurance market,
17:33
not like, but what they're doing counting votes there, Golly
17:37
g Wilkers. They're great at it, top of class. It's fantastic.
17:43
U taking a look at markets right now. That's off
17:45
twenty points. S and P's up thirty five, NAZAC up
17:47
two forty, Russell two thousand, also dipping in a negative
17:49
territory mixed market as we're heading towards the bottom of
17:55
the hour.
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Speaker 2: Mike. When we talk a little bit about a second
18:51
Trump term and retirees, what.
18:54
Speaker 3: Does this mean for the retirement Well, I mean, very clearly,
18:58
Donald Trump has made it very transparent that he has
19:01
no intentions of changing the full retirement age or cutting
19:04
Social Security benefits in any way, shape or form. And
19:07
the same has been said about Medicare. So I think
19:11
unless you're going to see a full reversal there, that's
19:13
unlikely to be touched in any meaningful way. I also
19:17
have a tough time believing that he's going to increase
19:20
taxes in any way, shape or form. And so I
19:25
think you probably have some security that the next four
19:27
years nothing changes with your Social Security or Medicare. I
19:30
don't think we are likely to get any sort of
19:33
resolution on the long term security of those two programs.
19:37
Social Security expected to face a shortfall by twenty thirty four.
19:41
Medicare I think a couple of years earlier.
19:43
Speaker 2: Later than earlier. I want to say, let me take
19:46
a look. I think it's twenty nine.
19:49
Speaker 3: There are some other pieces here that you know have
19:52
been talked about and thirty one, so I don't know
19:56
how serious some of these were. But right there was
19:58
a pledge for no taxes on Social Security, bringing us
20:01
back to the pre Reagan ages of Social Security benefits.
20:06
We will see if that gets any bipartisan support, which
20:09
you would need in order to do so, but it
20:11
would worsen the period of time before the program runs
20:15
out of money.
20:15
Speaker 2: As we've talked about.
20:17
Speaker 3: I mean, big picture, My guess is that there is
20:19
not a lot to be changed with these two programs
20:22
over the next few years.
20:24
Speaker 2: And I don't know.
20:25
Speaker 3: I think I would feel fairly secure in that assessment. Again,
20:28
for the short term, do you think there's any possibility
20:32
of a bipartisan a bipartisan bill for secure three point
20:38
zero for example, which those bills ten have been pretty
20:41
easy to pass via you know, not via party lines,
20:45
via bipartisan support on new benefits for four to one
20:48
K plans and things like that.
20:49
Speaker 2: Yeah, And it does seem one of the things that's
20:53
just remarkable on those is we just we continue to
20:58
just push back the age four required minimum distributions. Remember
21:02
it used to be seventy and a half. Yeah, now
21:03
it's seventy five for some folks. Then it went to
21:05
seventy two, then seventy three. It's it's on its way
21:07
to seventy five. No one right now is seventy five.
21:10
That's not for a few years, correct, And look, I mean,
21:14
would you be surprised, Mike if the RMD age gets
21:17
pushed back further?
21:18
Speaker 3: No, I wouldn't. Yeah, that's a distinct possibility.
21:21
Speaker 2: Push back further. And with the counterpoint being, okay, the
21:24
way that they've offset that to raise more revenue and
21:27
make it, you know, make things score well from a
21:29
budget perspective is okay, fine, once the original account owner
21:33
passes away, then we're making the you know, non spouse
21:37
inheritors take them more quickly. Would you be at all
21:40
surprised if in the next five years we see, hey,
21:46
rm ds are moving up to seventy seven or seventy eight,
21:49
but now the non spouse inheritor has seventy years to
21:52
take the money out.
21:53
Speaker 3: As an example, I think you're not going to get
21:55
below ten. But again, that wouldn't be terribly surprising, I suppose.
21:59
But I have a have time believe, and you're getting
22:01
down below ten years to empty out those accounts.
22:04
Speaker 2: I disagree. And the reason why I'm gonna make this
22:10
about generations again because I love going this route. If
22:15
there's one thing that I've seen when it comes to
22:19
how we've handled our finances for the last twenty years,
22:22
it's been let's subsidize baby boomers and kick it down
22:27
the road to millennials. I say that as a problem
22:29
millennial because look, that's ultimately what this is doing. Boomers
22:33
are getting older, and the trade off has been, hey,
22:35
don't make them take money out of their IRRA so
22:37
they don't have to pay the taxes but make their
22:39
kids pay the taxes. That's been what it is. By
22:43
the way, the ACA, the Affordable Care Act, did pretty
22:46
much the same thing. It used to be that you
22:48
could have a five to one ratio between how much
22:52
you charge someone in the oldest age band and the
22:55
lowest age band, meaning that someone in their fifties or
22:58
sixties for healthcare, you could charge them five times what
23:01
you would for someone in there twenties because they use
23:05
more healthcare. The acaight narrowed that to three to one.
23:09
What does that do It shifts more of the burden
23:11
downstream to younger people. Yep. So like again, bipartisan support
23:15
for this. Yes, My point is that there's been a
23:19
general bipartisan screwing of millennials. And that's fine. Like I
23:24
can accept it. I'm not saying this with any hate
23:25
in my heart. Like that's what it is, and that's
23:27
where we are, and it's fine. But let's call a
23:30
spade a spade. So here is.
23:33
Speaker 3: Where I would drive this home. If you are not
23:37
feeling prepared to assess the changes that are almost certainly coming.
23:44
You spent the first hour and a half of this
23:46
show talking about very likely tax changes and policy changes
23:51
that in some way, shape or form, are going to
23:54
affect pretty much every American. Right when you talk about
23:58
things like taxes on social care, when you talk about
24:00
things like income taxes and corporate taxes, every single American
24:04
is affected. What would happen to your financial plan if
24:08
tax rates went down and they kicked back the required
24:11
minimum distribution age? How would you adjust things in that scenario?
24:16
Because the time to start planning for it is not
24:19
three years from now when those rules have already passed,
24:22
but rather today, while you can assess that and make
24:25
the changes in the current tax scenario as you know it.
24:29
Speaker 2: If you are.
24:31
Speaker 3: Again just finding yourself in the position where, yeah, I
24:34
don't know what I would change if taxes on Social
24:38
Security were altered, or if overall tax rates went down,
24:41
or if the required minimum distribution age was changed, or
24:44
if there is a secure three point zero how would
24:46
I adapt and read into all of that?
24:49
Speaker 2: Please?
24:50
Speaker 3: This is why professionals like the Armstrong Advisory Group exist,
24:54
is to interpret these things and do planning that's in
24:57
your best interest. If you have I have questions along
25:01
those lines, please call the Armstrong Advisory Group at eight
25:03
hundred three nine three for zero zero one. Let us
25:06
sit down with you to assess your personal financial situation
25:09
by calling us at eight hundred three nine three four
25:13
zero zero one.
25:14
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:17
registered investment advisor. Nothing in the ad or in any
25:19
Armstrong guide a specific financial, legal, or tax advice. Consult
25:22
your own financial, tax into state planning advisors before making
25:25
any investment decisions. Armstrong may contact you to offer investment
25:28
advisory services.
25:30
Speaker 2: Michael's talk a little bit about the Trump administration plans
25:34
for the housing market? Good, bad, ugly? What are we
25:38
hearing from people that are plugged into the housing market
25:41
since look, as much as you and I talk about
25:43
like home prices and stuff like that, you and I
25:46
have no idea how that, like the permitting process works,
25:49
just as an example.
25:50
Speaker 3: Right, And the housing market is tricky because I think
25:53
a lot of the real problems come from things like
25:55
local zoning and permitting processes. And I don't know that
25:59
there's going to be a whole lot that a Trump
26:00
administrations can be able to do to solve that. That's
26:02
local politics.
26:03
Speaker 2: They're set locally.
26:04
Speaker 3: Yeah, you know, I can't imagine a Trump policy being
26:08
very popular of providing carrot and stick incentives for towns
26:11
to change their zoning procedures.
26:13
Speaker 2: Doesn't seem like it'd go.
26:14
Speaker 3: Well, we're seeing that in messages.
26:15
Speaker 2: It's right, you and I live in Massachusetts, just as
26:17
an example, which has been trying to make it easier
26:20
to build more not easier, but make it required to
26:23
build more multi family housing and just like adding housing
26:26
density to add more units, and man, it's been messy
26:30
around here, right. So, and that's just coming from the
26:33
state government. Imagine the federal government being like, hey, Washington State,
26:39
you go build more houses. Okay, let's see how well
26:43
you know it's yeah.
26:45
Speaker 3: So what's possible I mean federal tax credits for home builders? Yep, yeah,
26:51
you could see that. I don't I don't know what
26:53
form that takes. I don't know if there are hey
26:56
designated areas. What was the the opportunity of these zones
27:00
was the thing that the first Trump administration did. This
27:02
was a tax credit involved in Hey, if you invest
27:05
in these state selected areas that need economic development, then
27:10
you'll get a whole big capital gains tax break and
27:12
different incentives in order to do so. I could envision
27:15
something new like that specific to housing for example.
27:20
Speaker 2: Yeah, you know, it's actually interesting. So I used to
27:22
live in Somerville, and this is just in terms of
27:26
you know, trying to make sure that people aren't and
27:29
this was even before Airbnb and stuff, but just trying
27:31
to discourage people from becoming landlords. Yeah, and Somerville, I
27:36
don't I'm sure they probably still do something similar. The
27:40
first two hundred and fifty thousand dollars of your property
27:43
tax bill, the value was waived if it was an
27:48
owner occupied unit. And that's something that's just kind of
27:51
interesting to me, like okay, like yeah, that stuff makes
27:54
you know, a big difference. But ultimately the problem is
27:56
also construction. And this is something where where I'm not
28:02
sure how like we talked about this when the Harris
28:06
campaign was, you know, talking about, hey, we're gonna give
28:09
twenty five thousand dollars down payment assistance for first time
28:12
home buyers. Well, if you give it to everyone and
28:15
need do to increase supply, all you're doing is driving
28:17
the price up. You're not actually like, great, that home
28:20
that used to go for four hundred thousand, it's not
28:23
gonna go for four to twenty five because not everyone's
28:25
a first time home buyer, but it might be pushed
28:27
up to four ten mm hm. You know. So even
28:31
when you talk about you know, tax credits for you know,
28:34
building more, Okay, how much of is that necessarily going
28:38
to get passed through to the end buyer or does
28:42
the builder just say, great, now I've got more cushion
28:44
in the event of a downturn because I'm not incentivized
28:47
to build more.
28:48
Speaker 3: I think. I mean, again, if you're giving a tax
28:51
credit that's set up properly to say, hey, you complete
28:54
construction construction on homes and you get this credit. Again,
28:58
it's not gonna magically raid inventory, but it all factors
29:03
into that math equation might not go directly to the
29:05
bottom line of the exper it's gonna be split. But yeah,
29:09
I think it probably on the margins would incentivize some building.
29:12
Speaker 2: Take a quick break here. When we come back, we'll
29:14
do a little bit of stack roulette.
29:17
Speaker 1: Thanks to us six one, seven, three, six, two thirteen
29:20
eighty five with your comments and questions about today's show,
29:23
and let us know what you think about the stories
29:25
we are covering. This is the Financial Exchange Radio Network,
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31:32
Speaker 2: Mike, what do you have for us for stack roulettes.
31:34
Speaker 3: I'm interested in your take on the Biden Administration's Inflation
31:39
Reduction Act and its future under a Trump administration. So
31:44
you have billions of dollars of investment that are going
31:47
throughout the country on all sorts of different things, some
31:49
of which many of which actually benefit pretty red areas
31:55
of the country, and big investments in manufacturing. You have
31:58
a lot of car manufacturers who are very much in
32:01
favor of the investment. And then you have a you know,
32:05
administration that is going to be looking to roll back
32:07
a lot of incentives for things like EV's alongside. By
32:13
the way, you know, the single I actually don't know.
32:16
I haven't looked at it, but wood Elon must be
32:18
the considered the single largest financial supporter of Donald Trump
32:22
during this campaign, or if not the single largest, then
32:24
certainly most front and center.
32:26
Speaker 2: I would imagine it has to be. And I think
32:28
this is going to be really interesting in terms of look,
32:31
one of the things that Trump explicitly campaigned on was, hey,
32:36
I don't want to build as many evs. How does
32:39
that relationship between Trump and Musk evolve. I think that's
32:43
going to be interesting to watch and see, you know,
32:46
where they end up, because I don't know. Also, when
32:50
you talk about you know, how you end up allocating
32:54
those funds or not allocating those funds. It's something where hey,
32:59
a number of companies have already made long term investments
33:01
based on, you know, the idea that those funds would
33:04
be there. And you know part of this again, I
33:08
think that when you talk about how this this dance
33:10
ends up working out politically, it's let's say that you
33:13
are Hyundai, as an example, who spent a bunch of money,
33:16
you know, setting up ev plants and supply chains in
33:19
the United States. Right again, Hundai's not just gonna be
33:22
like okay, like we'll see what will happen, like you
33:24
do whatever you want. No, they're on the phone with
33:26
them right now, like not necessarily with Trump, but with
33:29
you know sure with his staff saying look, we need
33:35
you to maintain these subsidies for us because here's how
33:38
it affects our business. How can we make sure that
33:42
this happens. Like that's exactly the conversation that's going on
33:46
on this stuff. And so I don't know how it's
33:49
gonna play out. I have no idea. The other one,
33:52
Chips Act another one that you know you've seen the
33:56
Trump campaign say yeah, we're not sure that we want
33:59
to do this. Well, you get founderies that are costing
34:02
twenty billion dollars that are being built with chips ACKed money.
34:05
Speaker 3: That one had so much Republican support that I have
34:08
a tough time believe in anything significant gets shifted there.
34:12
Speaker 2: The I'm not sure anything gets it gets significantly changed
34:17
on either of these. Yeah, I'm not sure it might.
34:21
And maybe part of it is, Hey, if you're trying
34:24
to you know, still do tax cuts, but make it
34:26
revenue neutral. Okay, do you call back IRA Inflation Reduction
34:30
Act funds in order to do so? Like I could
34:33
see that being a possibility. So maybe that's how you
34:36
make some of the math work on this. But again,
34:39
I the one thing that I consistently go to with
34:43
you know, US legislation. Once something passes via legislation, not
34:47
executive order, not agency rule, not that you can't take
34:50
it away, Like it really doesn't go back when when's
34:54
the last time you saw that happen? Right, There's not
34:58
much of it out there unless there's sunset provisions that
35:00
are built in from the beginning, and even then sometimes
35:04
we still extend them see parts of the Bush tax cuts,
35:07
and mostly unlikely the most or all of the Trump's
35:10
tax cuts. Yes, so even when we put sunset provisions
35:13
on sometimes like, nah, those aren't real. Let's just let's
35:17
keep it moving out another ten years. That sounds good.
35:20
So that's where we stand right now. Taking a look
35:23
at markets as we had towards the top of the hour,
35:25
Down's off fifteen points. S and p is up thirty nine,
35:28
Nasdaq's up two seventy. So we've gotten mixed markets today,
35:31
but the dowb always slightly down, not too much movement there.
35:34
Bonds continuing to rally a little bit after a tough
35:36
day yesterday. Ten year Treasury back down six and a
35:39
half basis points to four point three six percent. We're
35:43
done for the rest of the day. Back at it
35:46
tomorrow to finish up the week. We'll see you then
36:01
five