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Why are investors so afraid of the upcoming election? · The Financial Exchange Show

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This is the Financial Exchange with Chuck Zada and Mike Armstrong.
1:12
Speaker 2: Chuck, Mike and talker with you here. We are broadcasting
1:16
live from the Double Tree Hotel and Suites in Highnis.
1:22
There's a stampede running through the room now there is.
1:25
It's it's just fantastic. No, We've got a great crowd here.
1:27
We're having a great time talking to everyone and meeting
1:30
everyone here. So big thanks to everyone who has come
1:32
out today. We really appreciate it, and I hope you're
1:35
having as much fun as we are. Uh, the stock
1:38
market not really having any fun. It's just kind of
1:41
sitting there doing nothing. The Dow's off one hundred and
1:44
fifty seven points, the S and P's up five, the
1:46
nasdac's up eighty three. So it's just kind of hanging out,
1:49
just kind of chilling for the day. After a down
1:52
day yesterday. Tenure US Treasury is down four and a
1:56
half basis points to four point six percent, so it'sinuing
2:00
just to flutter in that four to two to four
2:02
to two four point twenty five range.
2:04
Speaker 3: We've got oil today.
2:05
Speaker 2: West Texas Intermediate down fifty seven cents a barrel to
2:09
seventy dollars and twenty cents a barrel the TRIPAA national
2:13
average four gas prices. When we look at the trend
2:16
that we've been on over really the last couple weeks. Now,
2:19
remember we were stuck in that three dollars and twenty
2:22
cent range for I don't know, it seemed like about
2:26
a month or so.
2:27
Speaker 3: And when we look at.
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Speaker 2: Where things are moving on that front now we're down
2:31
another half cent overnight to three point fifteen even nationally.
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So continuing to see gas prices sliding a little bit,
2:38
with oil hanging out in the low seventies. And then
2:41
gold today is up fifteen dollars an ounce to twenty
2:45
seven to forty four and forty cents, So that is
2:49
what is going on again. We are broadcasting live from
2:53
the Double Tree Hotel and Suites in Hyannas, and again
2:57
big thank you to everyone who has turned out to
2:59
see so far today.
3:01
Speaker 4: I have one other data point, not market related, but yeah,
3:04
data related.
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Speaker 3: It is Thursday.
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Speaker 4: So we got our jobless claims numbers, as we do
3:08
every single week, and we've talked about these at length,
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but you know, there was a concern about potential uptick
3:13
in unemployment back in July of this year. Data came
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out in August, and then we get these weekly data
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points of hey, how many people filed for unemployment. It's
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where you see those upticks first, and we are continuing
3:25
to just not see it. Weekending October nineteenth, the advanced
3:29
figure for seasonally adjusted jobless claims came in a two
3:32
hundred and twenty seven thousand, which was a decrease of
3:34
fifteen thousand from the previous week's revised up level. It
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was only slightly revised up by the way that previous
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week was came in a two hundred and forty one thousand,
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and so, in spite of everything that you are seeing
3:47
with strikes at Boeing, with you know, layoffs downstream, they're
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talking about furloughs at companies like Spirit Aerosystems, you know,
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in I don't know correspondence with the fact that they're
3:59
not making it the jets over at Boeing. In spite
4:02
of the hurricane slamming parts of the Southeast, you are
4:05
just continuing to not see much of anything that I
4:08
would deem concerning in the labor market at the moment.
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Speaker 3: You big, mean girls, fan.
4:13
Speaker 4: Mean girls, Yeah, yeah, a huge Tina Fey fans.
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Speaker 2: So yeah, it's, uh, there's the whole thing, and you know,
4:18
mean girls, stop trying to make fetch happen. You've basically
4:22
got unemployment claim saying stop trying to make recession happen.
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Speaker 3: Yeah, like that's kind of what they're they're saying.
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Speaker 2: It's just there's there's no there there, and we've been
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looking for it for a while and it's just not
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showing up right now.
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Speaker 4: And it doesn't mean it won't. It's just if you're
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trying to make a compelling case that we are heading
4:39
for a recession right now, you don't have a lot
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of compelling evidence.
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Speaker 3: It's just really really really really really.
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Speaker 2: Hard to have a recession if unemployment is not rising
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and if you're not specifically, if you're not losing jobs,
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you really think so, really, let's talk a little bit
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about Mike about ten days from now, twelve days, I
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don't know. It's however, many days from now, there is
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a small election happening in the United States and for
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some reason, it's got market participants all kinds of nervous.
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You've got all kinds of hedging that is basically showing
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up very clearly in the data right around election day,
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like everyone is expecting something crazy to happen.
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Speaker 3: That's that's just gonna be absolutely wild.
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Speaker 2: And a couple things first, I found a piece from
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twenty twenty from Forbes that had the S and P
5:37
five hundred price performance both heading into and coming out
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of elections historically, and.
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Speaker 3: Here's what it found.
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Speaker 2: And it actually separated this by years in which the
5:49
incumbent party won and years in which the incumbent party lost.
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And the day after an election, do you know how
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much volatility there is?
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Speaker 3: Not a lot?
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Speaker 2: Less than one percent is the average price move of
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the S and P five hundred? Okay, what about the
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week after? Likewise, about one percent is the average price
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move of the S and P five hundred. What about
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in the year after, Like, hey, maybe it doesn't show
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up right away. Five The average performance if the incumbent
6:18
party loses is typically up about three percent. If the
6:21
incumbent party wins, up about six. Again, I'm not saying
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that this will happen. I'm just saying historically. So I know,
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everyone gets.
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Speaker 3: All like.
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Speaker 2: For clem, yeah, like everyone gets you know, all uptight
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about the election and everything.
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Speaker 3: As well, they should no, no, no, no, no, hold.
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Speaker 4: On, yes they should no no, no, have anything to
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do with the stock market.
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Speaker 2: No, no, I'm gonna even make the point no you shouldn't. Okay, okay,
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And I'm going to make this point because ultimately, haven't
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we been through like eight hundred elections now where it's like, oh,
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this is the last election we're gonna have this, like
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this is the most important one ever. They can't all
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be the most important one ever. That means that we're
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growing in importance every year, and I'm sorry, but we're
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just not that important, Like it's it just can't always
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be more important than the last one. I am right
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there with you, Jack, So I do actually think we
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all just need to chill out a little bit. We
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all just got to chill out a little bit, because look,
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I know a lot of different people. Some of them
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really really like Democrats, some of them really like Republicans,
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some of them don't like any of them.
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Speaker 3: Some of them like, get all these people away from me.
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Speaker 2: And all I know is that, look, if you were
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sitting there in twenty twelve, in two thousand and eight
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and you're like, man, that Obama don't like what he's
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gonna do. I'm gonna I'm gonna pull all my money
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out of the stock market because he's gonna run it
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into the ground. Well, let me tell you, the market
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did pretty well under Obama.
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Speaker 4: Second best performance to Reagan.
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Speaker 3: Ever, fantastic.
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Speaker 2: And then I know a bunch of people back in
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twenty sixteen and who said that Trump He's gonna end
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the world as we know it. It's gonna be awful.
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I'm gonna pull everything out and.
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Speaker 3: Lo and behold, we're still here.
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Speaker 2: And then a bunch of people who back in twenty twenty,
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just four short years ago, said oh that that Biden. No, like,
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it's gonna be even worse under him. S and P
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five hundreds at all time highs last week. And it's
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not to say that you have to like everything that
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every party does. It's not to say that you have
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to agree with that. Like the beauty of America is
8:27
that we don't have to agree with each other. It's
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like I can say this on the air and the
8:32
Communist Party doesn't descend from above and pull me out
8:35
and say no, you can't say that, Like that's this
8:37
is what's great about being here. But ultimately, the point
8:42
that I'm trying to make is not that stocks always
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go up, because I know that that's what it sounded
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like when I said, Hey, after all these elections, like
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things were fine, But it's much more that, Hey, regardless
8:51
of your personal feelings about any particular candidate, party, or
8:55
anything else, you gotta remember that investing based on your emotions.
9:00
Speaker 3: Is just a horrible way to invest.
9:03
Speaker 2: It's just a I mean, really doing anything based only
9:05
on your emotions is kind of a horrible way to
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do it. Like, you end up in kind of some
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bad place if all you're doing is responding to your
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emotions on a daily basis without any you know, self control.
9:14
So I think where I continue to land is. Look,
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it's not to say that you're you're gonna have you know,
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no movement after the election. Each party has, you know,
9:27
specific industries and sectors that they want to support in
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specific constituents that they want to you know, provide tax
9:34
cuts for spending for Like I'm not saying that that
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stuff doesn't happen, but let's just contextualize this a little bit,
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because I talk to so many people that are so
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concerned about Hey, like this election is gonna be what
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move moves markets and quite honestly, usually when everyone's looking
9:50
at something and there's so much fear that's already in markets,
9:53
it's kind of tough for that to be the thing
9:55
that actually moves them.
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Speaker 4: I would just you know, we're sitting in front of
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some I'm bad at estimating thirty people.
10:01
Speaker 3: Razor hand.
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Speaker 4: If you know who's going to be the president next
10:05
raizor hand, if you know who's going to win the Senate,
10:08
the House.
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Speaker 3: The senate's actually kind of predictable, quite honestly.
10:11
Speaker 4: Let's say you knew all of those three things, you
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had that crystal ball, you were right, you had it all,
10:15
and you knew who was going to win, which, by
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the way, that could make you a lot of money.
10:18
There's a lot of betting sites that'll you know, you
10:20
can make some money on this.
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Speaker 2: You can get dollars for fifty percent off on basically everything.
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Speaker 4: Tell me what's gonna happen to the s and P
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five hundred based.
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Speaker 3: On all that? I don't know. Nobody does it.
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Speaker 4: Again. Elections have consequences. They are very important for a
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lot of different reasons. What the stock market's going to
10:38
do based on them is just not one of those reasons.
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Speaker 3: That's why I land on it.
10:43
Speaker 4: It's true, with that plenty of stuff to get nervous
10:46
and worry about. How the stock market reacts to the
10:49
next election is just probably not one of them.
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Speaker 2: Let's take a quick break and then after we come back,
10:56
we'll do a little bit of trivia, and then we'll
10:57
get all nervous about inflation again. I think that'll be
11:00
really fun. Great is that when we return.
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Speaker 4: Tucker, you better be prepared to cut our mice because
12:54
you just know someone down here in Hyannas it's gonna
12:56
scream the answer out.
12:57
Speaker 3: I probably would.
12:59
Speaker 5: I gotta delble to answer us.
13:00
Speaker 3: It's fine, repeat the question. No, move on, go let's
13:06
talk a little bit about inflation. Okay, great piece from
13:10
the Wall Street Journal. No.
13:12
Speaker 2: I actually think it's a good piece because I do
13:14
think there's something here. It's titled Inflation is Cool, but
13:17
Americans are still seething over prices. The seething is probably
13:21
a little bit dramatic, but the premise is pretty straightforward. Hey,
13:26
prices went up really rapidly during twenty twenty one through
13:29
twenty twenty three, and we're still dealing with the psychological
13:33
toll from this. And quite honestly, I think it's more
13:37
than this in that. Look, if if you ask Americans,
13:41
we've seen all the polling now where if you ask
13:44
Americans how they feel about the economy, they're kind of like,
13:46
it's not great. If you ask them how they feel
13:49
about themselves, they say everything's like pretty good, but they
13:51
say the economy as a whole isn't great. A lot
13:53
of this, I think is just like the self preservation
13:56
instinct and that we always say we're okay. Like, even
13:58
if you look at the financial crisis, when the polling
14:00
got really bad on the economy, there was almost no
14:03
change in how people rated their own situations. So I think,
14:06
like we just respond, yeah, I'm fine, I'll be okay.
14:10
But especially around here, it's tough Yankees. You can have
14:14
tears pouring from your eyes. How you doing just fine?
14:17
Speaker 3: Great? All my dogs just died. But I'll make it. Yeah,
14:20
you know.
14:21
Speaker 2: But in any case, if you look at the last
14:24
four years they've been they've all been hard economically for
14:27
different reasons. Like twenty twenty, I don't even have to
14:30
really go there. It was just like high unemployment, the
14:33
economy stopped your supply chain issues, ya da, Like just
14:37
everything was a mess. Twenty twenty one. Hey, you're trying
14:40
to reopen all this stuff, and like you can't hire
14:42
enough workers. You get like you do have delays on
14:45
all kinds of things. Prices start going up. It's it's
14:47
a real mess too. Twenty twenty two. Hey, prices are
14:51
going up, you know, nine ten percent a year based
14:53
on CPI data, Like it's really hot inflation twenty twenty three.
14:58
Inflation's still hot, and finally by the end of twenty three,
15:01
the economy is starting to get back to normal, but
15:03
still hotter than expected, harder than normal inflation. This year,
15:07
twenty twenty four has been the first year that I
15:10
think you could point to where you're like, yeah, it
15:12
might not be perfect, but things are, you know, really
15:15
quite good right now in terms of where they stand.
15:19
But psychologically, Mike, people don't think about year over year truck, No, No,
15:24
you're missing my point. My point is we've been.
15:27
Speaker 3: Through four really hard years.
15:30
Speaker 2: We also feel a little bit beat up from them,
15:32
and we've been like beaten by completely different things. It's like, oh, good,
15:35
I finally got a handle on you know, when that
15:38
store is going to be open, and then hey, now
15:41
everything's backlogged.
15:42
Speaker 3: You know, now they're finally open.
15:44
Speaker 2: Okay, they finally have things in stock, but the price
15:46
is up ten percent from where it was before.
15:48
Speaker 4: Never got my bathroom mirror.
15:50
Speaker 3: You never got your bathroom mirror.
15:51
Speaker 4: Sober happened.
15:52
Speaker 2: I think the point that I'm trying to make is, hey,
15:55
we've been through a lot in the last four years,
16:01
and that doesn't just go away overnight. Like we don't
16:03
just wake up and say, yeah, everything's great now. It
16:06
takes us a little bit of time to get over that,
16:08
quite honestly.
16:09
Speaker 4: Like in the aggregate, according to the government's own CPI
16:12
datas for September of twenty twenty four, prices are up
16:15
a full twenty two point seven percent from September of
16:19
twenty nineteen.
16:21
Speaker 3: That is painful.
16:23
Speaker 4: My only complaint about the story that we covered is
16:26
not that it was a bad story. It's merely that's
16:28
been written every single day since twenty twenty four. Started
16:32
like literally this, this exact story from the Wall Street Journal,
16:35
of the title of which is inflation is cool, but
16:37
Americans are still seething over prices. I do feel has
16:40
been covered by every major news publication every single week
16:44
since January twenty twenty four, and I'm just a little bit.
16:47
Speaker 3: Sick of the headline. I think it's it's true free.
16:50
Speaker 4: Nothing about it is false. I think it's going to
16:53
vastly influence how people vote this year, is vastly influencing
16:57
questions about how people feel about the economy. I don't
16:59
disagree with any of the points it makes. I just
17:01
don't think it's a terribly useful article. In October of
17:04
twenty twenty four, when we know this more interesting question.
17:10
Everything that's being written about inflation seems to be indicating
17:15
or predicting that it is completely dead. And we ourselves
17:18
have said, for this point in time, inflation is not
17:20
the narrative. It's dead for right now, we don't have
17:22
to worry about it. What are the scenarios where it
17:26
can be a concern? Again, my argument would be, there's
17:29
almost no chance that we get back to what we
17:31
were dealing with in twenty twenty two because we had
17:33
a very unique combination of supply chain disasters due to
17:37
COVID shutdowns plus stimulus. I don't think there's a circumstance
17:44
in the next few years where we get that combination
17:46
of both of those two forces at the same time.
17:48
But could you get one of them? I think so well,
17:53
outside of you.
17:55
Speaker 2: Know, one off geopolitical events and things like that, I
17:59
think any way that you get back there, I'm yeah, I'm.
18:02
Speaker 4: More focused on the stimulus part. You know, if you
18:06
get the massive tax cuts that are being discussed, then
18:08
you've got a lot more cash in people's pockets.
18:10
Speaker 3: If you've even there, it's a fraction of the size.
18:12
Speaker 2: Yeah, I mean, like you talk about the projections that
18:14
you're seeing from the CBO, and you're seeing like, okay,
18:18
the deficit would expand by you know, four to seven trillion.
18:21
Speaker 3: Over a ten year period. Yep, we did four trillion
18:25
in a year.
18:26
Speaker 2: Yeah, you know, like it's you're talking quite literally an
18:29
order of magnitude smaller. So I don't have concerns that
18:33
we're heading back there. Look, if you get something weird
18:36
happening with Iran and oil prices, you know, double okay, Yeah,
18:40
you've got some transitory energy related inflation and it goes
18:44
away as soon as the situation is resolved.
18:46
Speaker 3: Yep.
18:47
Speaker 2: If you have something related to you know, China and Taiwan, yeah,
18:51
it's probably a bigger, longer term problem because you can't
18:54
just you know, build chip foundries very easily.
18:58
Speaker 3: No, it's it's.
18:59
Speaker 2: Kind of I'm trying to in my basement. It's not
19:02
going well, and so it's it's something where I just
19:07
don't see it other than those cases where you have
19:10
a true war breaking out, you know, on a global level,
19:14
and that's just not something that you can plan as
19:17
far as like, hey, it's gonna happen to like I
19:20
don't know when. If you know, something would happen, so
19:24
I think it's it's not my big concern because we
19:28
don't have the conditions in place that otherwise would make
19:31
you concerned about inflation.
19:33
Speaker 3: Quick break Here we got the trivia answer. Next.
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Speaker 5: Trivia question today was which candy did Marshawn Lynch eat
20:14
during NFL games? That would be Skittles, and he parlayed
20:17
his love of Skittles into a multimillion dollar endorsement deal
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Speaker 2: Talk a little bit about this story from the New
20:52
York Times. It is about Kroger and Walmart moving to
20:58
utilize digital price labels in their stores. So right now,
21:04
if you're walking down the aisle and the supermarketings say, hey,
21:06
the cheerios are five seventy nine a box. Okay, that's
21:09
on a little plastic thing that you know right now
21:11
they have to manually move in.
21:13
Speaker 3: And out and blah blah blah.
21:14
Speaker 2: Sure, Walmart and Kroger saying, hey, we found an easier
21:17
way to do this. We basically put a little, you know,
21:19
digital screen there that's very low energy, and we can
21:23
you know, send a signal to update the price based
21:26
on what we're seeing out there. So if the oranges
21:30
are starting to get a little bit old, hey cut
21:32
him by ten cents an ounce and see if he
21:33
can get a moving off the shelf.
21:35
Speaker 4: Yeah, and there are, obviously, I think everyone can imagine
21:39
some potential abuses of this, such as hurricanes rolling through
21:42
so jack up water bottles by seventy five percent, or
21:48
you can even imagine things that.
21:50
Speaker 3: I'm not worried about that at Walmart or Kroker.
21:52
Speaker 4: I'm not either, Like they don't they don't price gouge
21:54
like that. So I mean, first things first, this is
21:57
in my mind inevitable, right. It's saves these companies a
22:01
boatload of money by not needing to send somebody down
22:04
the aisle with a price gun and update the price
22:07
tags on everything. It does bring up the possibility of
22:12
very timely changes in prices that I think has some
22:16
people nervous and my answers, I guess too bad. I mean,
22:21
prosecute them if it's something like I just described of
22:24
price gouging, which is pretty much illegal in every state
22:27
when there's a national when there's an emergency going on.
22:30
But you know, the things that will probably be more
22:32
common with this type of thing that is just not
22:35
really feasible today. Yeah, you've got a bunch of avocados
22:38
that are about to start going bad, or those bag
22:40
salads with you know, expiration dates on them, you can
22:44
quickly update the pricing and also put like a banner
22:47
at the front of your store immediately, you know, paying,
22:50
you know, bringing people's attention to them with a digital banner.
22:53
And discounting those items. The you know, other stuff that
22:56
you can see happening though, would be Oh, the weather
22:59
forecast changed and you know we're having an unseasonably warm
23:03
week here in New England, for example. So does Groger
23:06
and Walmart bump up the price of summer like items
23:10
sodas and beer and grillables. Probably, but they probably already do.
23:17
They probably would anyway, it's just easier for them now.
23:21
Speaker 2: You know what I would love in terms of like
23:22
the food spoilage side of things.
23:26
Speaker 4: No, I don't know.
23:27
Speaker 3: I would love to get.
23:29
Speaker 2: Text alerts when they have stuff that's gonna go bad
23:31
the next day.
23:32
Speaker 4: You're such a cheap skate.
23:34
Speaker 2: Hey, these avocados are really freaking ripe. You want to
23:39
make guac? Come get them.
23:40
Speaker 3: Right now they're half off.
23:42
Speaker 2: Yeah, Like I think something like that would be great.
23:44
And look, you could set them for you know, the
23:46
stuff that you want, Like, I don't need an update
23:48
that you know, oh, like you you know the I'm
23:51
not really a I'm not really an eggplant person. It's
23:54
fine when it's kind of fried in a bunch of batter,
23:56
but other than that's kind of like, what are you?
23:57
Speaker 3: Like, why do we have it.
23:59
Speaker 2: I don't need that, but yeah, like, hey, we're doing
24:02
two for one cheeses because the cheese is gonna go
24:04
bad tomorrow. Chuck could be in there, life, sign me up,
24:07
I'll have a party tonight. Like, let's do it.
24:10
Speaker 4: Yeah, I mean, my biggest problem with this story is
24:12
Congress starting to ask questions of the companies as to
24:14
why they're using the digital price tags and you know,
24:16
how are you going to ensure that you're not price gouging?
24:19
And one, they haven't even implemented the digital price tags yet. Two,
24:24
there's nothing been insinuated that they intend to do anything
24:28
with this other than make it easier for them to
24:30
update their prices, which they do daily. Anyway, this is
24:34
just cutting out some of the cost of doing so,
24:36
and it probably will end up cutting both ways. Will
24:40
there be more price changes to the upside because it's
24:42
easier for them to do so? Yes, absolutely, that's also
24:46
not price gouging.
24:47
Speaker 2: I also think that Look, I'm a big believer. Hey,
24:52
the role of government is to you know, solve problems
24:56
that people can't solve on their own. That's why we
24:59
have like the military, which is run by the government.
25:01
Because you don't want the two of us out there like, hey,
25:04
we're defending the country, you know, like that would go badly.
25:07
We wouldn't really do much bind ten feet tall. Yeah,
25:10
it wouldn't like people would run over us in two minutes.
25:12
Like it would go really badly for the entire country
25:14
if we were, you know, personally responsible. So I think
25:17
that in this case, I look at it and you say, okay, like,
25:20
what's what's the potential downside? Okay, it's wal Mart and
25:24
Kroger can raise their prices on groceries in ways they
25:28
couldn't otherwise. Well, how do we mitigate that without being like, hey,
25:32
this is the right price for milk, Because there is
25:35
no right price for milk.
25:36
Speaker 3: You have competition.
25:37
Speaker 2: I keep coming back to you need to find ways
25:39
to have more competition in the grocery space, which it's
25:42
hard to because if if you've ever talked to anyone
25:44
who works, like in the business side of a grocery store,
25:49
it's an awful business. You basically spend At this point,
25:52
let's say you're building like a new market basket or
25:55
stop and shop or whole Foods or whatever it is.
25:57
The premise is pretty simple. You identify where there's you know,
26:01
not enough grocery stores to begin with. You spend about
26:05
twenty to thirty million dollars building a grocery store up front,
26:09
and then you make two cents an item for the
26:11
next thirty years in order to actually make a profit
26:14
on the thing. It's it's just it's a horrible business,
26:18
and I think it's it's one where look if if
26:22
you want to find a way to you know, mitigate this, it's, hey,
26:25
how do we, you know, make it easier to open
26:28
grocery stores and have competition in that space, because then
26:31
if Walmart's raising its prices, okay, I can go across
26:34
the street to Kroger that you know, they're both there
26:36
now instead of just one, and they're not doing that
26:39
because they want my business.
26:40
Speaker 4: Can I mention some of the dystopian like scary stuff
26:43
that you know, I worry about with this type of thing, though,
26:45
Like I don't want grocery prices to be priced like
26:47
airline tickets, right, Like I can easily foresee a future
26:51
where Walmart, because I've got the Walmart app on my phone,
26:55
understands that you know, Mike Armstrong entered the store and
26:58
is walking down the canned food aal right now, and oh,
27:02
looks like we were able to see that his paycheck
27:04
and credit information is pretty good, and so let's switch
27:07
all those prices up by thirty percent because Mike can pay.
27:10
And like, I spell that out as something that I
27:14
do not expect to happen, because guess what, I'm never
27:17
going back to that store if that happens. But with
27:20
the scary level of information that companies have about each
27:24
and every one of us because of how we behave
27:27
and how we download apps to do our shopping, that
27:30
is the level of like, you know, these companies know
27:32
the day you get paid, they know your credit score,
27:34
they know your browsing history, they know a lot of
27:37
kind of creepy information about you. And digital price tags
27:42
don't really change that significantly. But you know, that scenario
27:45
that I just played out isn't impossible.
27:47
Speaker 2: I think some of that could help, though, Like, hey, Chuck,
27:50
we noticed you haven't bought vegetables in three weeks. Here's
27:53
half off any vegetable just because you're gonna get scurvy.
27:57
I could see it being a positive too.
28:00
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28:51
Speaker 1: The proceeding was paid for and the views expressed are
28:53
solely those of Cushing and Dolan. Cushing and Dolan and
28:55
or Armstrong Advisory may contact you offering legal or investment services.
28:58
Cushing and Armstrong to not dorse each other and are
29:00
not affiliated.
29:02
Speaker 2: Michaelet's talk a little bit about the existing home sales
29:05
data that we have so far this year. Through September
29:09
of this year, we have seen three point zero seven
29:12
million home sales in the United States. This puts us
29:17
on track for a full year total that would be
29:20
around three point eight three point nine million, which would
29:23
be the worst year in total home sales since nineteen
29:26
ninety five. That's twenty nine years ago. For those of
29:29
you who do in the math at home, do.
29:30
Speaker 4: You know how many more people are living in the
29:31
United States today compared to nineteen ninety five.
29:34
Speaker 3: If I had to guess sixty million seventy eight it
29:37
was okay, yeah, pretty close.
29:39
Speaker 4: Seventy eight million more people living in the United States,
29:41
and we have the same volume of home sales as
29:43
we did in nineteen ninety five. That is well, I mean,
29:48
nobody's surprised looking around the room, like there's no homes
29:51
for sale. I understand all of that. But what's just
29:54
fascinating is that we've still had a reasonable level of
29:56
economic activity going on without these home sales.
30:00
Speaker 2: This is the piece that is is kind of interesting
30:02
to me. Is look normally like pre twenty twenty two,
30:07
when rates started rising, you're typically seeing about five and
30:10
a quarter to five and a half million units a
30:12
year selling, So you've got including last year where you
30:16
ended up with you know, about four million, So you've
30:19
got you know, kind of a home purchase deficit of
30:23
like two to three million units right now that there
30:26
are a lot of people that otherwise would have normally
30:28
moved the last couple of years, is what I'm getting at.
30:30
And this is why, Look, even if you do think
30:32
a recession is coming, I tend to be of the
30:35
view that it might be pretty mild and might be
30:37
pretty short simply because hey, the second that rate sniff
30:42
out a recession coming and the ten year treasury goes
30:45
to three to two, when the you know, thirty year
30:47
mortgage goes to five to five, Well, how many people
30:51
come off the sidelines at that point and say, hey,
30:53
I can list my home because rates are lower and
30:55
I don't have to worry about, you know, going from
30:57
a four percent mortgage to an eight percent mortgage to
31:00
a seven And how many people say, hey, I can
31:02
now finally buy a place at five and a half
31:05
percent rates, And what kind of activity do we get
31:08
coming out of that? So I think it's kind of
31:10
an interesting dynamic where because there's been such a little
31:13
activity for the last couple of years. In housing, there's
31:16
so many people that want to move right now and
31:18
haven't been able to that once finally, you know, free
31:22
of high interest rates. I just think that you get
31:26
properties going left and right, and I think that's the
31:28
natural counterbalance to any kind of recession.
31:30
Speaker 3: We see why. I agree.
31:32
Speaker 4: What sort of certainty do you have that mortgage rates
31:34
get back down to five to five anytime in the
31:36
next two years.
31:37
Speaker 3: If there's a recession. I feel pretty confident about it.
31:42
Speaker 4: Yeah, are you too. I just I have no reliable
31:45
way of predicting whether or not we'll have a recession
31:46
in the next two years, And if we don't, then
31:48
I'm not so certain we'll get there.
31:50
Speaker 2: Then there's just more people to buy when the recession
31:52
eventually hits. Yes, So sticking with it. Just take a
31:55
quick break here. When we come back, it's time for
31:57
a little bit of stack roulette.
32:00
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Speaker 3: All morning Loan.
32:23
Speaker 1: This is the Financial Exchange Radio Network.
32:28
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33:02
Speaker 3: Mike, what do you have for me for stack Roulette Today?
33:04
Speaker 4: I have another one of those creepy companies spying on
33:08
you stories that I want to share. Have you ever
33:09
been to the Into It Dome south of Los Angeles
33:12
where the Clippers play.
33:13
Speaker 2: That used to be the Crypto dot Com Arena, but
33:16
during Cryptopeak, I.
33:17
Speaker 4: Believe Okay, well I've never been, but these days, if
33:21
you want to get this too, If it's called the
33:23
into It Dome, does that mean that we've reached like.
33:25
Speaker 3: Peak tax repair. I don't know.
33:28
Speaker 2: I guess so, because my general rule of thumb is
33:30
that once you name a stadium after your product, usually
33:33
you've run out of good ideas and your companies on
33:35
the way down.
33:36
Speaker 4: Fair To get inside the into It Dome, you first
33:40
have to download the official app for the into It Dome.
33:43
Speaker 3: Is it intuitive?
33:45
Speaker 4: Probably not. The app will have your payment processor on there.
33:51
It's also using facial recognition technology, so they want you
33:54
to take a picture of your face and pay for
33:56
your concessions with your face rather than a scanned app
34:01
or a credit card.
34:02
Speaker 2: When you say take like you say you download, I
34:06
feel like a face print somewhere.
34:07
Speaker 3: It is clear.
34:09
Speaker 4: It looks like it might just be a camera. You
34:11
do one of those walk through concessions and they just
34:13
scan your face to determine.
34:15
Speaker 3: What you purchased. Uh.
34:17
Speaker 4: Furthermore safe, the app has the ability to monitor how
34:22
loud you are in the venue and do things like
34:24
maybe offer discounts on concessions for those particularly loud customers.
34:28
Who are getting really into the concert or the game,
34:31
and uh, why does this need to exist? But when
34:36
are we going to get to the point where we
34:38
look at this stuff and say, no, this is far
34:40
too weird and creepy. I am not taking a picture
34:43
of my face with your app so you can market
34:46
to me in the future and have way too much
34:48
information about me. And then, furthermore, how many times do
34:51
we all need to be hacked before we stop giving
34:54
these companies this information. They don't need my credit card information,
34:58
they don't need a picture of my face, and they
35:00
definitely don't need to listen to me from my pocket
35:03
to determine how loudly I'm cheering for the concert.
35:05
Speaker 3: So you need to have this app in order to
35:07
get in.
35:08
Speaker 4: That's according to the source that I'm seeing here Marketplace.
35:12
That is, I'm sure like at Fenway Park, if you
35:15
want to use cash, there's a way to do it.
35:17
That's a giant pain, because it's still true that some
35:20
people don't have smartphones therefore wouldn't be able to download
35:23
the app. But yeah, the piece I'm seeing says, if
35:26
you want to get into the into a dome dome,
35:28
you must first download the official app I guess Dome. Yeah,
35:33
I wasn't planning on it anyway, but certainly is not
35:36
going to be checking the box anytime soon.
35:38
Speaker 2: Mike, are you familiar with the German company Lilium. No,
35:42
they are trying to make air taxis. How's that going
35:45
for him?
35:45
Speaker 3: Badly?
35:46
Speaker 2: The shares are down fifty three percent today after filing
35:49
that they believe that their two subsidiaries are going to
35:52
have to file for insolvency under German law. So I
35:56
know that we all want to be, you know, the
35:58
jetson zipping around in the air, because hey, that'll help
36:01
us avoid the traffic. But hey, they don't tell you
36:04
that once everyone's zipping around in the air, you're with
36:07
the traffic then.
36:09
Speaker 3: And beyond that.
36:11
Speaker 4: Look, did anybody think it was gonna be cheap to
36:14
build mini planes?
36:15
Speaker 2: Well, look that's a whole different thing. I'm just looking at,
36:18
you know, the basic blocking and tackling before we get
36:20
to the cost. What happens when you have an accident
36:23
in the sky. You fall?
36:26
Speaker 3: Yeah. Yeah, right now we're on the ground.
36:29
Speaker 2: And we still have fifty thousand people a year dying
36:31
in traffic down. Sure, Hey, let's just put all those
36:33
people up in the sky and see what happens on
36:36
top of that.
36:36
Speaker 4: Again, it worked for the Jetsons. I'm sure we can
36:38
figure it out.
36:39
Speaker 2: Which was a documentary admittedly, but I think the thing here,
36:44
there's a bunch of these companies and ultimately, look, if
36:47
it were cheap to five people from point A to
36:50
point B using you know, some kind of small aircraft
36:54
that's built to do so, we'd all be taking helicopters
36:57
to work. Yeah, it's just not gonna work.
37:01
Speaker 3: Well, no, it will.
37:02
Speaker 2: Yeah, fine for the guy who owns like, yeah, you know,
37:05
owns the Intuit Dome.
37:07
Speaker 4: Again, you know, if you can afford to take a
37:09
helicopter from one part of Manhattan to another, then you'll
37:12
be able to afford this too. But anyone trying to
37:15
sell it is how we're all going to get around
37:17
in the future, I think might be missing the ball
37:18
a little bit.
37:19
Speaker 2: Who is the company that was partnering with Blade, the
37:22
helicopter company to offer rewards under them?
37:24
Speaker 3: Was it jet Blue or Uber?
37:26
Speaker 2: Someone like this? Misguided someone like that. Do you know
37:29
where most of Blade's business comes from? Actually no, it's
37:33
from uh like basically shipping organs and stuff.
37:36
Speaker 4: Act it's like medical, like I have to get it
37:38
there quick.
37:39
Speaker 3: Yeah.
37:39
Speaker 2: So if you actually look at like the high end
37:41
growth for Blade, it's not taking people from one side
37:44
of New York to the other, but rather it's like, hey, no,
37:47
we're doing really important medical work carrying organs and stuff
37:51
like that, which is kind of cool and like a
37:54
really good company I find use case. Yeah, good exactly.
37:57
Not hey, I've got to go three blocks. Let me
37:59
call it helicopter. Yeah yeah, not really what you want
38:03
to see. Stocks are mixed as we head towards the
38:05
top of the hour. The SMP is flat, the Dow
38:08
is down two thirty four, the Nasdaq is up sixty nine.
38:11
Speaker 3: We're done for the day.
38:12
Speaker 2: Thank you to everyone who turned out in Hyanas today
38:15
with us, and we will see y'all tomorrow on the
38:18
Financial Exchange,