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Why does Trump vs Powell matter? · The Financial Exchange Show

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  Speaker 1: and Mike Armstrong.
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  Speaker 2: Chuck, Mike and Tucker with you here. It's a pretty
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  Speaker 2: boring day in markets, but this might be the only
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  Speaker 2: one for the week, just because we do have a
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  Speaker 2: ton of economic data that kicks off tomorrow along with
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  Speaker 2: earning season. We got the consumer price Index, we got
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  Speaker 2: the producer price Index, we got retail sales, we got
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  Speaker 2: jobless claims, we got building permits, we got housing starts,
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  Speaker 2: we got consumer sentiment. And that's just on the data side.
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  Speaker 2: Over the course of this week, then we get basically
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  Speaker 2: like every major bank out there reporting JP, Morgan, Blackrocks,
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  Speaker 2: City Group, Wells, Fargo Bank, New York, Mellon, Bank of America, Morgan, Stanley, Goldman, Sachs, PNC, US.
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  Speaker 3: Bank Court, They're all there.
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  Speaker 2: They're all there this week. That's by Thursday, and we've
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  Speaker 2: also got Netflix thrown into the mix as well. So
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  Speaker 2: busy week as far is expectations. It's basically the polar
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  Speaker 2: opposite of last week, where there wasn't really much going
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  Speaker 2: on and you could have just gone and done something
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  Speaker 2: else and you would have been fine. This week. If
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  Speaker 2: you're not listening to every single minute of our show,
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  Speaker 2: you probably have a life. But we'd like it if
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  Speaker 2: you'd listen. Then there's a lot going on this week,
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  Speaker 2: so it might be valuable to you as well. Fairly done,
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  Speaker 2: Let's talk a little bit about the Federal Reserve, or
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  Speaker 2: the Federal Reserve as it's more commonly known. And so
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  Speaker 2: the Federal Reserve operates out of a building, as most
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  Speaker 2: institutions do, and that building was built in the nineteen thirties,
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  Speaker 2: about one hundred years old, and there is a renovation
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  Speaker 2: that they kicked off. I think four years ago was
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  Speaker 2: when it was approved and three years ago is when
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  Speaker 2: it started. And to be fair, it's gonna be really
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  Speaker 2: freaking expensive for some reason. It's gonna be like two
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  Speaker 2: and a half billion dollars. Now what do you get
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  Speaker 2: for two and a half billion dollars? I don't know,
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  Speaker 2: quite honestly, I don't care. And the reason why I
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  Speaker 2: don't care is because the entire cost of the Federal
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  Speaker 2: Reserve's renovation is covered by the FED itself. It's not
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  Speaker 2: an appropriation from Congress. It's not something that US taxpayers
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  Speaker 2: are spending money on. It is paid for out of
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  Speaker 2: the Fed's operating budget, which is provided through different fees
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  Speaker 2: that they charge to banks. And interests that's earned and
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  Speaker 2: so on and so forth. So it's not something that
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  Speaker 2: I particularly care about because I'm not paying for it.
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  Speaker 2: Neither of you. Neither is Tucker, neither are any of
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  Speaker 2: you listening, And ultimately, this is not something that really
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  Speaker 2: should matter. I mean, look, if the FED wants to
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  Speaker 2: renovate itself, like fine, I don't really care. Do I
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  Speaker 2: think it's a waste of money? Probably, But the buildings
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  Speaker 2: one hundred years old. So whatever, J Powell, do your thing.
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  Speaker 2: But what I can tell you is this is something
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  Speaker 2: that as of last week, we now have multiple members
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  Speaker 2: of the Trump administration talking about potential mismanagement of this
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  Speaker 2: renovation project as something that could be leading to a
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  Speaker 2: four cause firing of J. Powell.
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  Speaker 1: Yeah.
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  Speaker 3: Either the way it's being phrased is either you are
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  Speaker 3: mismanaging the project or you lied to Congress about the
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  Speaker 3: project itself. I have doubts that Jay Powell is very
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  Speaker 3: directly involved in the renovations of the GC and the thing.
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  Speaker 3: I don't think so. But nonetheless, it is being brought
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  Speaker 3: up as a potential reason for removal for cause which
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  Speaker 3: I think would still probably end up in the Supreme Court,
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  Speaker 3: but would pass a lot more muster than just a
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  Speaker 3: general remover removal by the president.
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  Speaker 2: So let's let's talk a little bit about this, because
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  Speaker 2: the last time that we really heard the White House
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  Speaker 2: pushing on Powell it's probably like late April.
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  Speaker 3: No, I mean two weeks ago we saw the no.
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  Speaker 2: But in terms of removal. In terms of removal, yes, yeah,
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  Speaker 2: like every single day, every week, there's you know something
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  Speaker 2: in terms of, hey, you know, we'd like to see
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  Speaker 2: lower rates. I get shure, that's that's par for the course,
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  Speaker 2: that's table stakes at this point. This I guess where
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  Speaker 2: I'm going on this is I'm not someone who's this
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  Speaker 2: unabashed Jay Powell fan. Sure, we're fairly those those of
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  Speaker 2: you who have listened to our show for you know,
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  Speaker 2: the last five years probably recall a pretty big period
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  Speaker 2: from like late twenty one through mid twenty three where
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  Speaker 2: we were, you know, borderline apoplectic at what Powell was doing.
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  Speaker 2: I mean, I believe Mark Fandetti famously referred to Jay
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  Speaker 2: Powell as.
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  Speaker 4: And if he fails, he'll be one of the biggest
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  Speaker 4: monetary whimps in history.
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  Speaker 2: A monetary whimp, which is about as aggressive as you
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  Speaker 2: can get from mister Fandetti. Yeah, Okay, failure exactly. That's
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  Speaker 2: that's you know, Mark talking about Jay Powell during that time.
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  Speaker 2: He's like, this was not a good job done by
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  Speaker 2: Jay Powell and the FED. But here's where I'm landing
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  Speaker 2: at this point is whether the White House tries to
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  Speaker 2: remove Powell for cause or without cause, doesn't matter. What
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  Speaker 2: matters is the very act of trying to remove Powell
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  Speaker 2: if they go that route.
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  Speaker 3: Is it the act of trying or is it the
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  Speaker 3: successful removal that would be most concerning.
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  Speaker 2: No, it's the act. And quite honestly, even okay, you
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  Speaker 2: want to hear like a real thought that'll wake you
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  Speaker 2: up today, Sure, you want to hear a real one.
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  Speaker 2: Even if they don't get rid of Powell before the
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  Speaker 2: end of his term, they've already so compromised. Whoever the
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  Speaker 2: next FED chair is going to be that that next
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  Speaker 2: FED chair does not have any credibility in markets. That's true,
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  Speaker 2: I agree, Yeah, because that next FED chair is going
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  Speaker 2: to be viewed as such a lap dog that they're
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  Speaker 2: not going to be viewed as having the independence that
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  Speaker 2: they typically want to be viewed as.
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  Speaker 3: Yeah, they would need to go with a very outside likelihood.
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  Speaker 3: Candidate for the for the job at this stage, to
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  Speaker 3: regain that credibility of that FED independence at the stage,
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  Speaker 3: you have to be like a Waller pick and right like,
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  Speaker 3: which is not really even in contention.
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  Speaker 2: And here's the thing. Waller would be a freaking fantastic pick.
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  Speaker 2: And by the way, fits like a lot of things,
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  Speaker 2: was originally nominated to the FED board by President Trump
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  Speaker 2: during his first term. So it's not like you're grabbing
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  Speaker 2: like some like Rando, you know, person who Trump's not
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  Speaker 2: familiar with. But you do have someone who's been pretty
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  Speaker 2: consistent with his message. And by the way, here's the
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  Speaker 2: other thing about Waller, he's been basically right about everything
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  Speaker 2: for the last six or seven years. Sure like he's
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  Speaker 2: got a really good track record recently.
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  Speaker 3: Let's go back to why all this matters, though, Chuck,
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  Speaker 3: Why it's so important, and what the market reaction not
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  Speaker 3: necessarily would be, but could be. I think is where
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  Speaker 3: I'm going with this, because you know, if you don't
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  Speaker 3: get any inflation and you have a lap dog of
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  Speaker 3: the President and the FED, that it probably doesn't matter
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  Speaker 3: all that much.
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  Speaker 2: The reason why why it matters is because of Brazil,
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  Speaker 2: Italy and other countries of that ILK when it comes
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  Speaker 2: to monetary policy. Historically, I'm not gonna put the Argentina
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  Speaker 2: one out there, because it's quite like the US is
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  Speaker 2: not Argentina. But here's why it matters. If you've never
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  Speaker 2: spent time looking at kind of emerging economies in their
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  Speaker 2: central banks, you're kind of doing a disservice when it
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  Speaker 2: comes to central banking, because if there's one thing that
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  Speaker 2: you learn very quickly through looking at how emerging economies
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  Speaker 2: have to manage their inflation and interest rates, they get
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  Speaker 2: forced into certain situations by the market and typically have
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  Speaker 2: to be really aggressive with rates in order to maintain credibility.
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  Speaker 2: And the reason that it matters is because inflation becomes
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  Speaker 2: a problem in those areas really, really easily, and if
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  Speaker 2: you don't maintain that credibility, you could absolutely whacked the
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  Speaker 2: idea that hey, we could just you know, cut interest
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  Speaker 2: rates and you know, move all the debts short term
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  Speaker 2: and that would help us out. I'm sure that the
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  Speaker 2: Brazilians have thought of this a few times. I know
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  Speaker 2: for a fact the Italians have thought of it a
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  Speaker 2: few dozen times. And there's a reason why, as a
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  Speaker 2: proud Italian, I look at Italian you know, monetary policy
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  Speaker 2: and its history and Italian you know, economics in its history,
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  Speaker 2: and I go, yeah, we did some really interesting things,
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  Speaker 2: you know, back in the merchants of Venice days. But
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  Speaker 2: man really haven't managed the country well fiscally and monetarily
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  Speaker 2: for you know, most pretty much its entire history. So like,
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  Speaker 2: take some lessons from people who have failed before you.
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  Speaker 2: And so when you start talking about a central bank
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  Speaker 2: that can lack credibility at the same time that there
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  Speaker 2: are a number of institutions looking at where the US
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  Speaker 2: could be from an inflation and growth perspective, not just
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  Speaker 2: over the next six months, but over the next one, two, three, four,
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  Speaker 2: five years, depending on how trade policy is an act
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  Speaker 2: did It raises some real questions about Hey, even if you,
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  Speaker 2: you know, try to push for lower interest rates, the
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  Speaker 2: act of lowering them when you shouldn't can often end
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  Speaker 2: up resulting in higher interest rates because the market forces
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  Speaker 2: your hand, yeah, or higher inflation.
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  Speaker 3: I think there is a reasonable and compelling argument that rates,
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  Speaker 3: the Fed's own rates right now should be lower. Absolutely
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  Speaker 3: that is a reasonable argument, and my take six months,
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  Speaker 3: but they could be proven absolutely correct in that fact
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  Speaker 3: completely if you have a FED president and I have
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  Speaker 3: a number of reasons why I think this won't be
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  Speaker 3: all that successful because the Federal Reserve does not rule
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  Speaker 3: by president. It rules via a voting system. But if
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  Speaker 3: you had of a Federal Reserve president ultimately who is
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  Speaker 3: convincing and successful in lowering interest rates when they really shouldn't,
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  Speaker 3: the problems for the broader US economy are far worse
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  Speaker 3: than the gains you would get from that.
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  Speaker 2: Yes, so this is kind of where where we're heading
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  Speaker 2: is It Sure seems like there is a movement afoot
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  Speaker 2: in the last week to try to make this FED
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  Speaker 2: renovation central to the idea that Jay Powell should no
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  Speaker 2: longer be the head of the FED.
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  Speaker 3: And by all rights he could have been completely mismanaged
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  Speaker 3: this whole renovation.
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  Speaker 2: But I have no c like maybe this thing should
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  Speaker 2: have cost eight dollars, like I have no idea. I'm
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  Speaker 2: not passing judgment on whether the renovation was cost effective
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  Speaker 2: or a good idea or this and that, because I
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  Speaker 2: have no idea. And the point is none of us do.
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  Speaker 2: None of us are involved in this thing. But it
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  Speaker 2: also doesn't have anything to do with Jay Powell's actual
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  Speaker 2: stewardship of the FED, and as such, I can I
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  Speaker 2: can see it for something that you know, becomes concerning
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  Speaker 2: as someone who does believe that FED independence does matter
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  Speaker 2: because they're always right. They're wrong quite often, and I'm
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  Speaker 2: happy to point out when they are. But because if
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  Speaker 2: you don't have central bank independence, I can point you
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  Speaker 2: to a laundry list of countries and the problems that
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  Speaker 2: have gone on there.
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  Speaker 3: And it's unconcluding the United States itself, by the way,
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  Speaker 3: nineteen seventies not that independent of a FED, and we
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  Speaker 3: had one of the worst decades for the economy in
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  Speaker 3: US history.
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  Speaker 2: Let's take a quick break here. When we return, let's
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  Speaker 2: talk a little bit about American travelers overseas and what
• 12:31
  Speaker 2: they're finding with their spending power. And we've also got
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  Speaker 2: trivia coming up next.
• 12:37
  Speaker 3: Here.
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• 14:02
  Speaker 2: There is a headline in the Wall Street Journal. It reads,
• 14:06
  Speaker 2: Plunging dollar leaves American travelers with less buying power this summer.
• 14:11
  Speaker 2: And just in case you were unsure about how the
• 14:16
  Speaker 2: US dollar has done in the first half of this year,
• 14:19
  Speaker 2: this has been the worst performance for the US dollar
• 14:23
  Speaker 2: since nineteen seventy three. In the first six months of
• 14:26
  Speaker 2: the year, so pretty significant. You've had a pretty significant
• 14:30
  Speaker 2: slide in the value of the dollar. So if you
• 14:33
  Speaker 2: go overseas, depending on where you go, pretty good chance
• 14:36
  Speaker 2: that your exchange rate is going to be worse than
• 14:40
  Speaker 2: it was if you've taken a trip in the last
• 14:43
  Speaker 2: couple of years to you the same location. And so
• 14:47
  Speaker 2: what Americans are finding if you're heading over to Europe
• 14:51
  Speaker 2: or if you're you know, heading to South America, you're
• 14:55
  Speaker 2: finding your dollar just doesn't go as far as it
• 14:57
  Speaker 2: used to on that vacation.
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  Speaker 3: Yeah, it seems to me like this story's kind of missing.
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  Speaker 3: Like I recognize that, yes, Americans who are traveling are
• 15:07
  Speaker 3: going to have less spending power. I think we should
• 15:10
  Speaker 3: probably be focusing a little bit more on the fact
• 15:11
  Speaker 3: that this is the worst year for the dollars since
• 15:13
  Speaker 3: the nineteen seventies and just what that might imply for
• 15:19
  Speaker 3: US dominance and you know, the specific currency dominance that
• 15:26
  Speaker 3: the United States has always had. Now a lot of
• 15:28
  Speaker 3: this can be explained by the last few years of
• 15:30
  Speaker 3: dollar strengthening that has happened. So sure, I think that
• 15:33
  Speaker 3: there is something to be said there, but for the
• 15:36
  Speaker 3: United States to generally have some of the highest interest
• 15:39
  Speaker 3: rates in the world right now, at the same time
• 15:42
  Speaker 3: that the dollar is devaluing quite as much as it has.
• 15:46
  Speaker 3: I don't think it's alarming, but it is. It would
• 15:50
  Speaker 3: otherwise be quite surprising.
• 15:51
  Speaker 2: Well, and here's the other piece that you have to
• 15:56
  Speaker 2: watch out for on This is just and this is
• 16:00
  Speaker 2: something that takes a long time to play out here.
• 16:03
  Speaker 2: This is not something that is going to, uh, you know,
• 16:06
  Speaker 2: happen overnight. Let's take a look at Europe just as
• 16:11
  Speaker 2: an example. So let's say that I'm a European investor, Mike,
• 16:15
  Speaker 2: my name is no longer Chuck, I'm now Claude, okay,
• 16:21
  Speaker 2: And Cod wakes up on January first and says, man,
• 16:25
  Speaker 2: it's a good thing. I've got fifty percent of you know,
• 16:28
  Speaker 2: my investment portfolio allocated to US equities because they've been
• 16:32
  Speaker 2: absolutely crushing European equities for the last fifteen years. And
• 16:37
  Speaker 2: that's why I can get this new hat. You know.
• 16:40
  Speaker 2: It's it's it's been nice. Yes, it's it's been nice.
• 16:44
  Speaker 2: Can't wait for the same thing to happen this year.
• 16:46
  Speaker 2: Well through July thirteenth, uh, the European markets, okay, are
• 16:54
  Speaker 2: up significantly, I mean, depending on like exactly where you
• 16:57
  Speaker 2: want to look if you look just let's do just
• 17:01
  Speaker 2: MSCI Europe just because that's again kind of broad. You know,
• 17:05
  Speaker 2: European index it's up twenty one and a half percent
• 17:08
  Speaker 2: this year. So Cod sits there and says, oh, well, hey,
• 17:12
  Speaker 2: you know that the rest of my portfolio that I
• 17:13
  Speaker 2: kept in Europe the other fifty percent good, it's it's
• 17:15
  Speaker 2: up twenty one percent. Let's see how the American stuff
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  Speaker 2: is doing this year.
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  Speaker 4: Now.
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  Speaker 2: Remember Cod's from Europe, so he invests based on his
• 17:24
  Speaker 2: own currency, the euro, the S and P five hundred
• 17:27
  Speaker 2: this year so far. Again, this is through you know
• 17:30
  Speaker 2: yesterday is up about six percent, but relative to the euro,
• 17:36
  Speaker 2: the dollar is off twelve, which means if Coud wants
• 17:39
  Speaker 2: to convert that SMP performance back into euro he's actually
• 17:42
  Speaker 2: down six, which means half his portfolio is down six
• 17:47
  Speaker 2: while European markets are up twenty one. Right, And so
• 17:50
  Speaker 2: if Coud is you know this, this investment manager over
• 17:52
  Speaker 2: in Europe, he's sitting there going, wait a minute, I'm
• 17:56
  Speaker 2: one hundred percent inequities, and I'm trailer my benchmark by
• 18:01
  Speaker 2: ten percent now because I own all this American stuff. Now,
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  Speaker 2: if that happens for you know, a couple of quarters.
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  Speaker 2: Claud says, okay, this is fine, and look, investment committees
• 18:10
  Speaker 2: move slowly and so on and so forth. But at
• 18:14
  Speaker 2: some point Claud gets a tap on his shoulder from
• 18:17
  Speaker 2: you know, his boss, who says, Cud, what gives man
• 18:21
  Speaker 2: your sucking win this year? Like, you know you're you're
• 18:24
  Speaker 2: missing your benchmark by ten percent? Well what are you
• 18:27
  Speaker 2: gonna do? And Coud then does what every you know,
• 18:30
  Speaker 2: self preserving human being does, which is they try to
• 18:33
  Speaker 2: keep themselves alive. Okay, great, I'm gonna start liquidating the
• 18:37
  Speaker 2: US stuff and bring it back over to Europe because
• 18:39
  Speaker 2: I gotta I gotta take down my risk. That's how
• 18:41
  Speaker 2: he thinks about it. And so this is the longer
• 18:45
  Speaker 2: game that you have to watch on this, which is
• 18:48
  Speaker 2: capital flows to the US from overseas have been strong
• 18:52
  Speaker 2: for two reasons. The currency is strong and the returns
• 18:55
  Speaker 2: have been strong. If both of those things reverse at
• 18:59
  Speaker 2: this same time, you can deal with that for a
• 19:02
  Speaker 2: little bit. But eventually capital starts to be like, hey,
• 19:05
  Speaker 2: I need the return, I where's the beef? Like what gives?
• 19:10
  Speaker 2: And that's the thing that you have to watch over
• 19:13
  Speaker 2: the next several years. It's not something that's gonna show
• 19:15
  Speaker 2: up right now, but it's due international investors. If the
• 19:18
  Speaker 2: dollar continues to weaken and US markets continue to underperform,
• 19:22
  Speaker 2: how do those capital flows start to realign. Let's take
• 19:26
  Speaker 2: a quick break here, and when we return, we get
• 19:29
  Speaker 2: the trivia answer in Wall Street.
• 19:30
  Speaker 1: Watch, bringing the latest financial news straight to your radio.
• 19:44
  Speaker 1: Every day, it's the Financial Exchange on the Financial Exchange
• 19:47
  Speaker 1: Radio Network. Time now for Wall Street Watch. A complete
• 19:53
  Speaker 1: look at what's moving markets so far today right here
• 19:56
  Speaker 1: on the Financial Exchange Radio Network.
• 19:58
  Speaker 4: Markets are mostly quiet to kickoff the busy week is
• 20:01
  Speaker 4: traders react to President Trump's latest thirty percent terror thread
• 20:05
  Speaker 4: on the EU. In Mexico, investors are also riding for
• 20:08
  Speaker 4: the ramp up to second quarter earning season, in addition
• 20:12
  Speaker 4: to an inflation reading due out tomorrow morning. Right now,
• 20:14
  Speaker 4: the Dow is up by tenth of percent or forty
• 20:18
  Speaker 4: two points, SMP five hundred is up only two points,
• 20:22
  Speaker 4: and the Nasdaq up by a tenth of a percent
• 20:24
  Speaker 4: as well, or thirty three points. Russell two thousand is
• 20:26
  Speaker 4: completely flat. Ten year treasure yield mostly unchanged at four
• 20:30
  Speaker 4: point four to three percent. In crude oil is off
• 20:33
  Speaker 4: one and a half percent today, trading at sixty seven
• 20:36
  Speaker 4: dollars in forty three cents a barrel. Several crypto stocks,
• 20:40
  Speaker 4: including coinbased, MicroStrategy and Robinhood, are all seeing gains on
• 20:44
  Speaker 4: the day as bitcoin prices rally to yet another all
• 20:47
  Speaker 4: time high. Meanwhile, lab equipment and software maker Waters agreed
• 20:51
  Speaker 4: to combine with Becken Dickinson's biosciences and diagnostic solutions business
• 20:57
  Speaker 4: and a deal valued at about seventeen and a half
• 21:00
  Speaker 4: billion dollars. Water stock is down by twelve percent on
• 21:04
  Speaker 4: that news. Elsewhere, Fastenall posted better than expected second quarter earning,
• 21:08
  Speaker 4: sending shares in the industrial supply company up by two percent.
• 21:12
  Speaker 4: Several media outlets, including Bloomberg and The Wall Street Journal
• 21:16
  Speaker 4: are reporting that Craft Hinds is preparing to break itself
• 21:19
  Speaker 4: up and spin off a large part of its business
• 21:22
  Speaker 4: into a new entity. Craft shares are up by about
• 21:25
  Speaker 4: two percent. Apple has offered Formula one as much as
• 21:29
  Speaker 4: one hundred and fifty million dollars a year for the
• 21:31
  Speaker 4: US rights to air races, exceeding what it currently receives
• 21:34
  Speaker 4: from Disney's ESPN. Apple is down by one percent today,
• 21:39
  Speaker 4: as for the earnings calendar this week. Tomorrow morning, major
• 21:42
  Speaker 4: banks including JP, Morgan, Chase, Wells, Fargo, Blackrock, and City
• 21:45
  Speaker 4: Group will report ahead of the open. Wednesday, we have Johnson, Johnson,
• 21:49
  Speaker 4: Bank of America, Morgan, Stanley, and ASML. Thursday, Netflix, Taiwan
• 21:54
  Speaker 4: Semiconductor and Pepsi, followed by Amex Charles Schwaben three m
• 21:59
  Speaker 4: to report on Friday. I'm Tucker Silva and that is
• 22:03
  Speaker 4: Walstree Watch. And the trivia question we asked in the
• 22:05
  Speaker 4: prior segment was what is the least circulated US note?
• 22:09
  Speaker 4: That would be the two dollar bill as of December
• 22:12
  Speaker 4: thirst December thirty first, two thousand and four, the two
• 22:17
  Speaker 4: dollar bill is the least circulated, followed by the ten
• 22:19
  Speaker 4: dollar bill and then the fifty dollars bill. Francis from Plimpton,
• 22:24
  Speaker 4: Mass is our winner today taking home the Financial Exchange
• 22:26
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• 22:29
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• 22:33
  Speaker 4: Exchine Show dot com.
• 22:34
  Speaker 2: Mike, do you think as Tucker Minch she talked about
• 22:37
  Speaker 2: Craft Hines wanting to break themselves up? Yep? Do you
• 22:41
  Speaker 2: think they'll name the two companies Craft and Hines? Fuck
• 22:45
  Speaker 2: the same thing. We are now, Hines, they are Craft.
• 22:51
  Speaker 3: Now it's gonna be some useless, stupid name that has
• 22:54
  Speaker 3: nothing to do with either of the companies.
• 22:55
  Speaker 2: Okay, craft Max, Yeah, no, can we actually out on
• 23:00
  Speaker 2: what the names are going to be. So it's it
• 23:03
  Speaker 2: was acronym. No, no, no, it won't be an acronym.
• 23:06
  Speaker 2: It'll be like a made up word like a ken
• 23:09
  Speaker 2: view that he It'll be like craftisius.
• 23:14
  Speaker 3: What's uh what was the ge one for nova? Yeah?
• 23:18
  Speaker 2: Yeah, this will be like yeah, Kernova, and the other
• 23:24
  Speaker 2: one will be not heimlik because that that's the real word.
• 23:31
  Speaker 2: Do you know that it's actually not called the Heimlich
• 23:32
  Speaker 2: maneuver anymore? So the guy who invented which, by the way,
• 23:35
  Speaker 2: do you guys know the Heimlich maneuver was only invented
• 23:38
  Speaker 2: in the nineteen seventies, go on, what did we do
• 23:41
  Speaker 2: for the other like years of human history before then?
• 23:46
  Speaker 2: Apparently the guy who invented it went a little like
• 23:50
  Speaker 2: off the rails in his later life and started like
• 23:53
  Speaker 2: putting out like all these products that just didn't work
• 23:56
  Speaker 2: and like didn't go through medical testing. And so whether
• 23:59
  Speaker 2: it was the American Medical Association or someone else, it's
• 24:02
  Speaker 2: now not called the Heimlich maneuver anymore. It's just called
• 24:06
  Speaker 2: like it's like chess, not compressions, but something like that.
• 24:11
  Speaker 2: But they rebranded the Heimlich because the guy apparently had
• 24:15
  Speaker 2: a rough go of it at the end.
• 24:17
  Speaker 3: Also known as abdominal thrust abdominal thrusts.
• 24:19
  Speaker 4: That's it, yeah, but everybody knows Heimlich maneuver.
• 24:22
  Speaker 3: True.
• 24:23
  Speaker 2: Apparently Heimlich had a rough go in his in his
• 24:25
  Speaker 2: later years. Is what I've learned recently.
• 24:27
  Speaker 3: If somebody told me to give them abdominal thrusts, I
• 24:30
  Speaker 3: would have no idea what to do. It's a fair point, exactly.
• 24:33
  Speaker 3: I might start doing sit ups. I wouldn't, all right,
• 24:39
  Speaker 3: I guess if you if you insist, I don't think.
• 24:41
  Speaker 2: This will work. Are parents ready to keep the bank
• 24:45
  Speaker 2: of mom and Dad open? I'll quote hear this piece
• 24:49
  Speaker 2: from Bloomberg Opinion. Young Americans are having trouble becoming fully
• 24:52
  Speaker 2: dependent adults, fully independent adults. Millennials who were long ridiculed
• 24:57
  Speaker 2: for being boomerang kids are scurried back into mom and
• 25:00
  Speaker 2: That's basement after leaving the security blanket of college. Know
• 25:02
  Speaker 2: a thing or two about that. It's right, we do.
• 25:06
  Speaker 2: But the failure to launch. Trend is continuing with gen Z,
• 25:09
  Speaker 2: the latest cohort of twenty to thirty year olds taking
• 25:12
  Speaker 2: out cash from the bank of mom and dad. Over
• 25:14
  Speaker 2: half the adults in the generation reported that they don't
• 25:18
  Speaker 2: pay for their own housing, according to a twenty twenty
• 25:21
  Speaker 2: four Bank of America study. In fact, parents of adult
• 25:25
  Speaker 2: gen Zers expect to give their children eighteen hundred and
• 25:28
  Speaker 2: thirteen dollars a month in twenty twenty five, according to
• 25:30
  Speaker 2: a March report by Savings dot Com.
• 25:32
  Speaker 3: So let me break down that stat real quick. I'm
• 25:36
  Speaker 3: focusing on the half of twenty half of gen Zers
• 25:40
  Speaker 3: who do not pay for housing. Now, it specifies the
• 25:45
  Speaker 3: adults in that group, they're all if you're twenty to thirty,
• 25:48
  Speaker 3: you're all adults. Eighteen is adulthood, right, Yeah? Are we
• 25:52
  Speaker 3: classifying all this the same way? So some portion of
• 25:56
  Speaker 3: them are attending college or university and their parents are
• 25:59
  Speaker 3: paying for that. Presumably, it still seems like a very
• 26:04
  Speaker 3: high proportion of that cohort to not be paying for
• 26:08
  Speaker 3: their own housing.
• 26:10
  Speaker 2: So it does, and it doesn't, Okay, And I guess
• 26:14
  Speaker 2: what I'm what I'm getting at here is like if
• 26:17
  Speaker 2: you look historically at the data on millennials, and again,
• 26:25
  Speaker 2: this is just like you're comparing apples to oranges because
• 26:28
  Speaker 2: it's living at home versus paying for your own housing. Sure,
• 26:31
  Speaker 2: so in general, most of the stats that I were
• 26:33
  Speaker 2: able to find were that anywhere from like fifteen to
• 26:36
  Speaker 2: twenty five percent of millennials during that same time period
• 26:41
  Speaker 2: we're living at home, and I'm sure another, you know,
• 26:43
  Speaker 2: ten percent or something we're probably getting money from their
• 26:47
  Speaker 2: parents during that time in order to live somewhere else.
• 26:52
  Speaker 2: Right now, when you look at basically every story that's
• 26:55
  Speaker 2: told about millennials financially, it's, hey, they had a really
• 26:58
  Speaker 2: rough go of it coming right out of college, but
• 27:00
  Speaker 2: they're generally like when you look at the group and
• 27:02
  Speaker 2: the aggregate, they're ahead of their parents at the same
• 27:06
  Speaker 2: time in a number of metrics now, and so like, so,
• 27:09
  Speaker 2: I guess I look at this and it feels like
• 27:13
  Speaker 2: this article is meant to either a scare gen X
• 27:17
  Speaker 2: parents of gen zs that like, oh, like something like
• 27:21
  Speaker 2: your kids are not doing well or you know, I
• 27:25
  Speaker 2: don't have any idea how gen Z is going to
• 27:27
  Speaker 2: be financially ten or fifteen years from now, because everything
• 27:30
  Speaker 2: I read in twenty eleven twelve and thirteen was millennials
• 27:34
  Speaker 2: are screwed forever, and now people are looking at millennials like, wow,
• 27:37
  Speaker 2: they did okay, Actually, like look at them. They're forty
• 27:40
  Speaker 2: now and the generation whole owns an awful lot of
• 27:43
  Speaker 2: real estate, has more assets than their parents did at
• 27:45
  Speaker 2: the same age, and is doing pretty well. So I
• 27:50
  Speaker 2: don't really know what to do with this piece other
• 27:52
  Speaker 2: than it feels like it's trying to scare people that
• 27:54
  Speaker 2: young adults are screwed, and I'm just not sure if
• 27:57
  Speaker 2: they are like they might be to day, but I'm
• 28:00
  Speaker 2: not sure. I don't know that it means anything about
• 28:02
  Speaker 2: where they are ten years from that.
• 28:03
  Speaker 4: Yeah, changes to Medicaid occur almost every year, and if
• 28:07
  Speaker 4: you're not informed, your assets could be at risk, especially
• 28:10
  Speaker 4: if you and your spouse need nursing home care. Cushing
• 28:13
  Speaker 4: and Dolan are experts in elder law, and their new
• 28:16
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• 28:19
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• 28:23
  Speaker 4: retired or getting close to retiring. The guide is important
• 28:27
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• 28:34
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• 29:00
  Speaker 1: The proceeding was paid for and the views expressed are
• 29:01
  Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
• 29:04
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• 29:07
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• 29:09
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• 29:10
  Speaker 3: One piece on the gen z ers and just you know,
• 29:14
  Speaker 3: parents paying for rent and things along those lines. I
• 29:17
  Speaker 3: would be interested to know, and I'm sure we could
• 29:20
  Speaker 3: pull this that pretty easily. National median rent versus household
• 29:25
  Speaker 3: income today, are we at the worst place we've ever been?
• 29:30
  Speaker 2: Bet? We're keep talking.
• 29:32
  Speaker 3: I bet we're fairly close there. Because that's the temptation
• 29:35
  Speaker 3: of this article is to buy in that, Hey, we
• 29:37
  Speaker 3: are heading towards a more European norm when it comes
• 29:41
  Speaker 3: to housing for example, where yeah, young adults do live
• 29:45
  Speaker 3: at home for an extended period of time, they don't
• 29:47
  Speaker 3: go and branch out on their own like I mean,
• 29:50
  Speaker 3: when I graduated college, I moved home for two and
• 29:53
  Speaker 3: a half months, and it was the statement from my
• 29:56
  Speaker 3: parents was you have until labor Day to find yourself
• 29:58
  Speaker 3: an apartment and get the hell out.
• 30:00
  Speaker 2: I was in basically the same boat.
• 30:02
  Speaker 3: And so my question is is that changing? Is that
• 30:06
  Speaker 3: actually changing I don't have the answer to. And is
• 30:09
  Speaker 3: it changing because of housing affordability issues? Is the second
• 30:13
  Speaker 3: part of that question, which I would buy more than
• 30:16
  Speaker 3: I did back in twenty ten.
• 30:17
  Speaker 2: Right, Here's the thing that I can say, having chatted
• 30:21
  Speaker 2: with you know a number of gen Zers that are
• 30:24
  Speaker 2: new to the workforce these days, what I can tell
• 30:28
  Speaker 2: you is that that generation does feel that it's basically
• 30:32
  Speaker 2: hopeless for them for a few reasons. And I'm not
• 30:35
  Speaker 2: saying that this is right or wrong, but I think
• 30:36
  Speaker 2: it's important to like talk about what's going on because
• 30:40
  Speaker 2: it's not what I experienced when you know, twenty years
• 30:43
  Speaker 2: ago when I was going through the same thing. The
• 30:47
  Speaker 2: reasons why I hear them feeling very hopeless economically, are
• 30:52
  Speaker 2: primarily because of three things. The first is housing costs,
• 30:55
  Speaker 2: just it's way more expensive as a percentage of income.
• 30:59
  Speaker 2: It looks like yep for them to try to either
• 31:03
  Speaker 2: rent or buy housing today then it was ten fifteen
• 31:06
  Speaker 2: years ago. The second piece is from a from an
• 31:15
  Speaker 2: employment perspective. They feel incredibly threatened by AI because they're
• 31:21
  Speaker 2: looking at what AI can do, and they're like, why
• 31:23
  Speaker 2: does a company need me? And it's a question that
• 31:27
  Speaker 2: I don't have a great answer for on that side
• 31:31
  Speaker 2: of things. The third piece is it kind of goes
• 31:35
  Speaker 2: along with both of these, which is, Okay, prices are up,
• 31:39
  Speaker 2: I can't save any money, so I can't build any assets.
• 31:43
  Speaker 2: And this, I think is partly why you see the term.
• 31:46
  Speaker 2: It's like, I can't remember exactly what it is, but
• 31:51
  Speaker 2: basically this is, in my opinion, why you see so
• 31:55
  Speaker 2: many people in their twenties turning two sports gambling sites
• 31:59
  Speaker 2: and zero data expiration options as you know, investment vehicles,
• 32:04
  Speaker 2: Because they're kind of like, I'm screwed anyways, why wouldn't
• 32:09
  Speaker 2: Why wouldn't I just try to go for making it big.
• 32:12
  Speaker 2: I'm not saying that that's right or wrong. I'm saying
• 32:15
  Speaker 2: this is true. If I were in the same positions misguided,
• 32:19
  Speaker 2: it might be misguided. But if I were in the
• 32:21
  Speaker 2: same position, I.
• 32:22
  Speaker 3: Don't know that I would do anything differently with you, you know,
• 32:24
  Speaker 3: I'm just saying it's probably not a good thing.
• 32:26
  Speaker 2: So I think that there's some stuff there as far
• 32:29
  Speaker 2: as it's a generation that is absolutely scared of what
• 32:35
  Speaker 2: the economy looks like for them, and that, to me,
• 32:39
  Speaker 2: is is not encouraging. Let's take a quick break. When
• 32:44
  Speaker 2: we return stack Roulette.
• 32:47
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• 32:50
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• 33:54
  Speaker 2: Mike, what do you got for me for snack roulette?
• 33:56
  Speaker 3: Well, I got my first ever Costco membership over the weekend,
• 34:00
  Speaker 3: and congrats a shop on Friday. I'm part of a
• 34:03
  Speaker 3: pretty exclusive club. Now and right now, Lululemon is suing
• 34:08
  Speaker 3: Costco over a number of their products, specifically a hooded
• 34:12
  Speaker 3: sweatshirt as well as a pair of pants that they
• 34:16
  Speaker 3: allegedly ripped off and started producing for But we're still
• 34:21
  Speaker 3: doing freeze significantly cheaper. What's that said?
• 34:23
  Speaker 2: Costco ripped off its pants.
• 34:25
  Speaker 3: It's pretty good. They started charging twenty dollars for a
• 34:29
  Speaker 3: pair of pants that goes for something like one hundred
• 34:31
  Speaker 3: and twenty eight dollars on lululemon side. If anyone's unfamiliar,
• 34:33
  Speaker 3: Lululemon tends to have some pretty expensive clothes. I think
• 34:36
  Speaker 3: we covered briefly before that the cheapest thing we could
• 34:39
  Speaker 3: find there was like a nineteen dollars pair of socks,
• 34:41
  Speaker 3: but nonetheless partly explains why people are seemingly so obsessed
• 34:46
  Speaker 3: with Costco. I honestly had a tough time differentiating a
• 34:50
  Speaker 3: whole lot between Costco and BJ's, but they do have
• 34:52
  Speaker 3: a lot more of those proprietary brands branded products than
• 34:56
  Speaker 3: Bjy's does. And also, when I saw the lawsuit announced
• 35:01
  Speaker 3: by Lululemon or whoever announced it against Costco, I have
• 35:05
  Speaker 3: to say that the first reaction that I had was, Oh, wow,
• 35:08
  Speaker 3: I gotta go check out some of these clothing items.
• 35:10
  Speaker 3: If they're that close that Lululemon feels the need to
• 35:12
  Speaker 3: sue them over the straight and effect, It's like, oh, man,
• 35:14
  Speaker 3: I kind of want to buy a pair of those pants.
• 35:16
  Speaker 2: Right, Oh these are great. They're the same as the
• 35:18
  Speaker 2: ones that are six times as expensive. Oh give me
• 35:21
  Speaker 2: six pairs of them then, yeah, you know, like it's
• 35:23
  Speaker 2: kind of what it feels.
• 35:24
  Speaker 3: Immediately when went through my mind. Anyway, Yeah, I could
• 35:27
  Speaker 3: see that's all I had. I want to talk a
• 35:29
  Speaker 3: little bit about beef. It's a subject that's near and
• 35:32
  Speaker 3: dear to my arteries. And here's the deal is, beef
• 35:38
  Speaker 3: prices are going through the roof. They're going parabolic, which
• 35:41
  Speaker 3: usually when you see that happen, you're getting kind of
• 35:45
  Speaker 3: close to the end. But it's unclear that that's the
• 35:47
  Speaker 3: case here. And the reason why is that you basically
• 35:52
  Speaker 3: have herds around the globe that are getting smaller, and
• 35:58
  Speaker 3: it's for various different reasons. There's some new diseases that
• 36:01
  Speaker 3: have popped up in a few areas.
• 36:03
  Speaker 2: There are some parts of the world that for climate
• 36:06
  Speaker 2: related reasons, are trying to cut down on you know,
• 36:09
  Speaker 2: domestic beef production and things like that. But either way,
• 36:12
  Speaker 2: you've got smaller herds that are out there, and demand
• 36:16
  Speaker 2: for beef is not really growing quickly, but the herd
• 36:19
  Speaker 2: size is shrinking faster, and so in supply and demand world,
• 36:22
  Speaker 2: that means beef prices are up, in fact, up more
• 36:26
  Speaker 2: than two in the last year. Wow.
• 36:30
  Speaker 3: That's that's seemingly something that's tougher to point your finger
• 36:33
  Speaker 3: at than the egg situation we were in earlier this
• 36:35
  Speaker 3: year and just snap your fingers. And you couldn't really
• 36:38
  Speaker 3: snap your fingers and fix the egg problem. But there
• 36:40
  Speaker 3: was a very clear solution of how it gets worse
• 36:43
  Speaker 3: before it gets better, which is basically kill off a
• 36:46
  Speaker 3: whole bunch of egg laying hens and and you know,
• 36:49
  Speaker 3: solve the problem that way. This doesn't seem quite the same.
• 36:52
  Speaker 2: It's also it's a longer process to fix because unlike chickens,
• 36:56
  Speaker 2: which have a relatively quick turnover rate breeding.
• 37:02
  Speaker 3: Process, Yeah, it's time to full size.
• 37:05
  Speaker 2: Yes, it's a slower and more drawn out process with cows.
• 37:08
  Speaker 2: And the other thing with cows, feed costs her up
• 37:10
  Speaker 2: way more as well, And so it's something where like that.
• 37:13
  Speaker 2: It could take several years for this problem to correct here.
• 37:17
  Speaker 2: But lab grown beef, chuck, listen, getting back on the train.
• 37:22
  Speaker 2: I'm all in to try that at some point because
• 37:25
  Speaker 2: I think it would go better than the plant based beef.
• 37:31
  Speaker 3: I think that lab grown beef would probably take taste
• 37:33
  Speaker 3: better than vegan beef.
• 37:37
  Speaker 2: How does one start a meat lab?
• 37:39
  Speaker 3: Either would be good.
• 37:41
  Speaker 2: Can you do like a basement meat lab? Sure?
• 37:45
  Speaker 4: Or you can do like a coff or something like
• 37:47
  Speaker 4: breaking Bad.
• 37:47
  Speaker 2: Yeah, you can be like a legal version of breaking Bad.
• 37:50
  Speaker 2: Got it, you're running a meth lab. No, it's a
• 37:52
  Speaker 2: meat lab. Oh come on, how does that work? Here's
• 37:57
  Speaker 2: your gas mask? Don't ask questions. Stocks remained relatively calm today.
• 38:01
  Speaker 2: The Dow is up eighteen points, the S ANDP is flat,
• 38:04
  Speaker 2: the Nasdaq's up twenty nine. We're done for today. Tomorrow
• 38:07
  Speaker 2: is a big one, as we do get the June
• 38:10
  Speaker 2: Consumer Price Index day at eight point thirty. We'll be
• 38:13
  Speaker 2: discussing that and a whole lot more than