Latest / The Financial Exchange Show / What the Senate Republican tax-and-spending bill means for your money.

Transcript

What the Senate Republican tax-and-spending bill means for your money. · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:02
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:05
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:08
  Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:11
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:14
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:17
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 0:20
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:23
  Speaker 1: this program do not endorse each other or their services.
• 0:26
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:28
  Speaker 1: for referrals and are not affiliated. This is the Financial
• 0:34
  Speaker 1: Exchange with Mike Armstrong and Mark Vandetti. Your exclusive look
• 0:39
  Speaker 1: at business and financial news affecting your day, your city,
• 0:43
  Speaker 1: your world. Stay informed and up to date about economic
• 0:46
  Speaker 1: and market trends, plus breaking business news every day. The
• 0:51
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:54
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:58
  Speaker 1: heroes by visiting dav DOC Boston and making a donation today.
• 1:03
  Speaker 1: Face is the Financial Exchange with Mike Armstrong and Mark Vandetti.
• 1:10
  Speaker 2: Good morning, Welcome back to the Financial Exchange. It's Mike,
• 1:15
  Speaker 2: Mark and Tucker with you on a Wednesday before a
• 1:17
  Speaker 2: job's Thursday, which feels weird saying that one. Also ahead
• 1:22
  Speaker 2: of the July fourth holiday. Obviously, we've got the Big
• 1:27
  Speaker 2: Beautiful Bill Act, which has made its way through the
• 1:29
  Speaker 2: Senate now sitting with the House. We could hypothetically see
• 1:33
  Speaker 2: a vote on that even today. Jay Powell was out
• 1:36
  Speaker 2: in Portugal yesterday was it yesterday or Monday? Yes yesterday,
• 1:41
  Speaker 2: speaking during an ECB conference about some specific items related
• 1:45
  Speaker 2: to interest rates and tariffs. But before we get there,
• 1:48
  Speaker 2: we had a slightly funky day on markets yesterday the
• 1:51
  Speaker 2: first of July, when we saw a bit of a rotation.
• 1:55
  Speaker 2: Closed the program yesterday with the Dow up pretty solidly,
• 1:59
  Speaker 2: with the S and P and New back down rotation
• 2:02
  Speaker 2: into small caps as well. Bloomberg piece this morning Mark
• 2:06
  Speaker 2: Wall Street revised big to small stock rotation. Anything other
• 2:11
  Speaker 2: than quarterly rebalancing here? Is there any sort of story
• 2:14
  Speaker 2: to this, because to me, all that happened was you
• 2:17
  Speaker 2: had a quarter with a big rally on major large
• 2:21
  Speaker 2: cap names, mostly in most significantly big tech names, and
• 2:25
  Speaker 2: whenever you have that sort of rally a whole bunch
• 2:27
  Speaker 2: of investors at quarter end, go and rebalance everything and
• 2:31
  Speaker 2: shift things around it and probably explain some of the
• 2:35
  Speaker 2: moves that we saw in markets yesterday. Would be my guest.
• 2:38
  Speaker 3: It could not.
• 2:39
  Speaker 4: Everybody rebalance is at the same time. And we say rebalance,
• 2:41
  Speaker 4: I mean we'reset to target weight. So you might have
• 2:44
  Speaker 4: a target to equities over to stocks overall.
• 2:47
  Speaker 2: Right, so a big portfolio manager might say, yeah, we
• 2:50
  Speaker 2: are targeting ten percent foreign investments, fifteen percent small and
• 2:55
  Speaker 2: mid caps, thirty percent large caps, and every quarter we're
• 2:59
  Speaker 2: going to rebalance to that target hypothetically.
• 3:01
  Speaker 3: Right or monthly.
• 3:02
  Speaker 4: It depends on the type of investor, and all all
• 3:05
  Speaker 4: follow different frequencies. I'm never convinced by the rebalancing explanation.
• 3:10
  Speaker 4: Pension funds will usually have that on autopilot, but not always.
• 3:14
  Speaker 4: Sometimes they require a vote, and as you can imagine,
• 3:16
  Speaker 4: that requires getting people together.
• 3:18
  Speaker 2: Just as one example, yeah, or one K providers, right,
• 3:20
  Speaker 2: you have the ability to set up a monthly quarterly
• 3:23
  Speaker 2: rebalance in your four one K account as well, and
• 3:26
  Speaker 2: so on.
• 3:27
  Speaker 4: The I margin, there could be some of that. The
• 3:29
  Speaker 4: argument in favor of small caps has been the same
• 3:32
  Speaker 4: for years and years now.
• 3:33
  Speaker 3: Which is relative?
• 3:34
  Speaker 2: Has that argument gone?
• 3:35
  Speaker 3: Yeah?
• 3:35
  Speaker 4: Same for international, whether developed or emerging. Look, large cap
• 3:40
  Speaker 4: US has clawbird, every other risky asset class, I mean
• 3:44
  Speaker 4: you name it, with the exception of some really niche
• 3:46
  Speaker 4: ones for the better part of the last twenty five years,
• 3:49
  Speaker 4: early two thousands were the heyday of emerging markets. So
• 3:53
  Speaker 4: I'm being a little bit selective there, But the bottom
• 3:56
  Speaker 4: line is everything pales in comparison private equity, even relative
• 4:00
  Speaker 4: to US large cap and specifically, more precisely tech mega
• 4:07
  Speaker 4: large cap tech.
• 4:08
  Speaker 2: It has so absolutely trounced everything else in its path.
• 4:12
  Speaker 4: So yeah, well, a large institutional investor would say, we
• 4:14
  Speaker 4: love small caps. They look attractive just about any way
• 4:17
  Speaker 4: you want to slice it. I'm not sure that that
• 4:21
  Speaker 4: it was manifest somehow in a compressed period i e.
• 4:26
  Speaker 4: All at once in a short period of time yesterday.
• 4:28
  Speaker 2: Yeah, I tend to agree. I'm not sure that there's
• 4:31
  Speaker 2: been anything that we saw out of markets that can
• 4:35
  Speaker 2: explain much of anything of what we will see in
• 4:37
  Speaker 2: the second half about.
• 4:38
  Speaker 4: This, right, most of their day to day stuff is
• 4:40
  Speaker 4: noise is a term that people like to throw around,
• 4:42
  Speaker 4: but it has a very specific meaning it means anything
• 4:46
  Speaker 4: that disguises the trend in a whatever variable you're trying
• 4:49
  Speaker 4: to get a handle on. And stocks do have a trend,
• 4:52
  Speaker 4: and the noise is the cycle. If you like around
• 4:55
  Speaker 4: those trends. It could be very short term if you
• 4:57
  Speaker 4: want to, if that's your time frame, or a longer term.
• 5:00
  Speaker 4: A lot of what we talk about day to day
• 5:01
  Speaker 4: is just noise. It's not gonna matter.
• 5:03
  Speaker 2: And this morning we've got a slight reversal of what
• 5:04
  Speaker 2: we saw yesterday with the Dow off a quarter of
• 5:06
  Speaker 2: a percent, the S and P flat, the NASDAK up
• 5:09
  Speaker 2: more than a third, in the Russell two thousand flat.
• 5:11
  Speaker 2: So again, day to day moves. Everybody likes to write
• 5:14
  Speaker 2: about how, oh yeah, this is clearly a bunch of
• 5:16
  Speaker 2: portfolio rebalancers shifting things around, and there could be some
• 5:20
  Speaker 2: truth to that. But whether or not it actually plays
• 5:22
  Speaker 2: into anything long term, well, go ask any of the
• 5:26
  Speaker 2: portfolio managers that have been talking about small caps in
• 5:29
  Speaker 2: European equities out performing big US stocks for the last
• 5:32
  Speaker 2: decade and a half and just how that how that
• 5:34
  Speaker 2: worked out for them has not been terribly good.
• 5:38
  Speaker 4: Fair to say, yeah, the arguments in favor of diversifying
• 5:41
  Speaker 4: away from large cap US equities or sound. They're tried
• 5:46
  Speaker 4: and true if you like, they just have not worked.
• 5:49
  Speaker 4: Markets have disagreed with the idea that just because something
• 5:53
  Speaker 4: is pricey, has a high price that is relative to
• 5:56
  Speaker 4: some measure of earnings, whether it's last twelve months or
• 5:59
  Speaker 4: the last ten years, smoothed out and inflation adjusted, like
• 6:02
  Speaker 4: the so called cyclically adjusted pe does. There are lots
• 6:05
  Speaker 4: of them out there. They've all screamed runaway from large
• 6:09
  Speaker 4: cap stocks for some time now.
• 6:11
  Speaker 2: Value investing, that's.
• 6:13
  Speaker 4: One manifestation, one part of the manifestation a lot today.
• 6:16
  Speaker 3: I don't know why.
• 6:17
  Speaker 2: I'm just trying to think of the terms that people will.
• 6:19
  Speaker 3: Well you might be most familiar with that.
• 6:20
  Speaker 4: Yeah, value stocks are have a lower price relative to
• 6:23
  Speaker 4: book value. That's the Russell in deceased definition. So that's
• 6:27
  Speaker 4: a ratio P to B price to book value. It
• 6:30
  Speaker 4: is lower in the case of a value stock, higher
• 6:32
  Speaker 4: in the case of a growth stock. That's just definitional.
• 6:34
  Speaker 2: Yeah, we covered yesterday the S and P five hundred
• 6:39
  Speaker 2: in particular, there twelve month forward price earnings ratio is
• 6:43
  Speaker 2: highest we've seen since two thousand and three, and Paul
• 6:45
  Speaker 2: and I spoke about this briefly, but I think it
• 6:47
  Speaker 2: kind of summarizes best where we are right now. And
• 6:52
  Speaker 2: my main compelling point to all of this was that
• 6:56
  Speaker 2: this tells you absolutely nothing about short term or two earns.
• 7:00
  Speaker 2: And we've been close to these levels, frankly for much
• 7:04
  Speaker 2: of the last five years, right in most of twenty
• 7:06
  Speaker 2: three and twenty twenty four. We've been at these elevated
• 7:09
  Speaker 2: levels on valuations a good portion of twenty twenty one
• 7:12
  Speaker 2: as well, and it's told you absolutely nothing about what's
• 7:15
  Speaker 2: going to happen over the course of the next six
• 7:17
  Speaker 2: months or a year, or any of those things. I
• 7:21
  Speaker 2: want to go back to something that we've hit on many,
• 7:23
  Speaker 2: many times, though, which is stock market valuations at these
• 7:27
  Speaker 2: levels Historically, when they have become elevated, it has meant
• 7:32
  Speaker 2: something significant for what you see over the next decade. Right.
• 7:35
  Speaker 4: It's correlated with and that's not to say causes, but
• 7:39
  Speaker 4: it's associated with lower future returns. And it's a strikingly
• 7:45
  Speaker 4: strong relationship. If you plot one against the other, how
• 7:49
  Speaker 4: much you're paying for how much you're paying for a
• 7:51
  Speaker 4: share of stock, and I'm oversimplifying here versus future returns.
• 7:55
  Speaker 3: The relationship is negative. That shouldn't surprise you.
• 7:58
  Speaker 4: When you pay more for something, that yield goes down
• 8:01
  Speaker 4: because the prices in this case, now the price is
• 8:03
  Speaker 4: in the den Sorry for all the fractions today, but
• 8:05
  Speaker 4: the price is in the denominator. You yield is in
• 8:07
  Speaker 4: the numerator.
• 8:08
  Speaker 2: It's not get them a white board or something, but
• 8:11
  Speaker 2: it helps them to.
• 8:11
  Speaker 3: Think about these these things.
• 8:14
  Speaker 2: It helps that sounds like something is simple.
• 8:18
  Speaker 4: If I can, if I can, if I can get
• 8:20
  Speaker 4: my mind around this, anybody again, if I can, if
• 8:23
  Speaker 4: I can understand, and I think I do. Anybody again,
• 8:26
  Speaker 4: This is just a fraction. The more you pay for something,
• 8:29
  Speaker 4: the lower you're expected return. Right, you pay twice as
• 8:32
  Speaker 4: much for a tenement house that you were going to
• 8:34
  Speaker 4: rent out, rent stays the same, your yields going down.
• 8:37
  Speaker 4: SAME's true of equities.
• 8:38
  Speaker 3: So what these.
• 8:39
  Speaker 4: High multiples, whether it's past or future earnings based or
• 8:42
  Speaker 4: telling us, is that investors think that equity growth will
• 8:46
  Speaker 4: that growth in earnings which translates into into returns ultimately,
• 8:50
  Speaker 4: either through dividends or share repurchases, or would you sell
• 8:52
  Speaker 4: it appreciation. They think it's going to be higher than
• 8:55
  Speaker 4: it's been historically. Unfortunately, that's almost never that's never worked out.
• 8:58
  Speaker 4: I'm comfortable with saying.
• 8:59
  Speaker 2: That throughout history now.
• 9:01
  Speaker 4: But as you said, terrible market timing tool. So if
• 9:06
  Speaker 4: you're a long term investor, you know, continue to average
• 9:09
  Speaker 4: in probably yep.
• 9:10
  Speaker 2: Let's take a quick break. When we come back. Want
• 9:13
  Speaker 2: to give an update on the state of the Republican
• 9:17
  Speaker 2: tax Bill, the Big Beautiful Jobs Act. Differences between the
• 9:21
  Speaker 2: Senate and the House version. Don't know the likelihood of
• 9:24
  Speaker 2: it passing the House, but if it does, what it
• 9:25
  Speaker 2: ends up looking like. That's next here on the Financial Exchange.
• 9:29
  Speaker 1: The Financial Exchange streams live on YouTube. Like our page
• 9:33
  Speaker 1: and stay up to date on breaking business news all
• 9:35
  Speaker 1: morning long. This is the Financial Exchange Radio Network. Miss
• 9:40
  Speaker 1: any of the show. Catch up at your convenience by
• 9:43
  Speaker 1: visiting Financial Exchange show dot com and clicking the on
• 9:46
  Speaker 1: demand icon, where you'll find all of our interviews in full.
• 9:49
  Speaker 1: Shows face is your home for the latest business and
• 9:53
  Speaker 1: financial news in New England and around the country. This
• 9:56
  Speaker 1: is the Financial Exchange Radio Network.
• 10:00
  Speaker 5: This segment of The Financial Exchange is brought to you
• 10:03
  Speaker 5: in part by the US Virgin Islands Department of Tourism.
• 10:07
  Speaker 5: Three Stunning Islands Saint Croix, Saint Thomas, and Saint John
• 10:11
  Speaker 5: all just a quick flight away, no passport required, Just sunshine,
• 10:15
  Speaker 5: soft sand in that warm island vibe. Craving a break,
• 10:19
  Speaker 5: play in your fall, escape now and experience the beauty
• 10:22
  Speaker 5: of America's Caribbean paradise the US Virgin Islands book today.
• 10:26
  Speaker 5: A visit USVII dot com. That's a visit USVII dot com.
• 10:30
  Speaker 2: We've got the what did I call it, the Big
• 10:34
  Speaker 2: Beautiful Jobs Act?
• 10:35
  Speaker 5: Yeah, that's what you call it.
• 10:36
  Speaker 2: That's not what it is, not at all, the Big
• 10:38
  Speaker 2: Beautiful Bill Act, which is a series of tax cuts
• 10:42
  Speaker 2: and tax continuations from the President's last big tax cut bill.
• 10:48
  Speaker 2: We're gonna get into long term, you know, economic impact
• 10:51
  Speaker 2: in our view and all that, but I want to
• 10:52
  Speaker 2: actually start with what seems to be in this now
• 10:55
  Speaker 2: that we have a passed version from the Senate, how
• 10:58
  Speaker 2: it differs a little bit from the House of version again,
• 11:01
  Speaker 2: if the House changes any single feature of this build
• 11:04
  Speaker 2: and it needs to go back to the Senate again,
• 11:06
  Speaker 2: which would delay things. Obviously, I politics ain't my thing.
• 11:10
  Speaker 2: I don't know whether this is going to pass. I
• 11:12
  Speaker 2: tend to think so, but whether it will pass in
• 11:14
  Speaker 2: this exact format, anybody's guess. First off, the salt deduction
• 11:19
  Speaker 2: has been a big topic of conversation and should matter
• 11:22
  Speaker 2: to those that live in Massachusetts or anywhere in New England.
• 11:25
  Speaker 2: Quite frankly, currently, if you are paying income taxes and
• 11:30
  Speaker 2: real estate taxes, your deductions on those state and local
• 11:34
  Speaker 2: taxes are capped at ten thousand dollars per year. This
• 11:37
  Speaker 2: is going to increase that cap from that ten thousand
• 11:40
  Speaker 2: dollars limit up to forty thousand dollars for anyone who
• 11:42
  Speaker 2: makes less than half a million dollars in income, at
• 11:47
  Speaker 2: which point it'll start phasing out, basically quadrupling your possible deductions. Here,
• 11:52
  Speaker 2: this is frankly, just purely a gift for those who
• 11:54
  Speaker 2: live in high, high income tax states, most of which
• 11:58
  Speaker 2: trend blue. So this is a pretty big gift out
• 12:02
  Speaker 2: there for a lot of listeners to us here. One
• 12:05
  Speaker 2: thing that was different between the House and Senate version
• 12:07
  Speaker 2: here there are a few different pieces, but one of
• 12:10
  Speaker 2: them was that the House was going to close this
• 12:12
  Speaker 2: special loophole that does not apply to a lot of individuals,
• 12:17
  Speaker 2: but I'll try to briefly explain it. If you were
• 12:20
  Speaker 2: a small business owner, that ten thousand dollars cap was
• 12:24
  Speaker 2: irrelevant because most states created a workaround to allow you
• 12:28
  Speaker 2: to still deduct all of your income taxes through your
• 12:31
  Speaker 2: business and therefore still receive the capitalist deduction on income
• 12:36
  Speaker 2: taxes and everything else. The House version wanted to do
• 12:41
  Speaker 2: away with that for most businesses, especially white collar jobs,
• 12:45
  Speaker 2: so financial advisors, accounting firms. The Senate version does not
• 12:49
  Speaker 2: do away with it. It maintains the work around for
• 12:52
  Speaker 2: those states, so we'll see where that lands. But increased
• 12:56
  Speaker 2: costs from the Senate bill because of that child tax credit,
• 13:00
  Speaker 2: Like it is going to be permanently bumping up the
• 13:04
  Speaker 2: child tax credit to twenty two hundred dollars starting for
• 13:07
  Speaker 2: this tax year and then adjusting for inflation beginning in
• 13:11
  Speaker 2: twenty twenty six. This was something that was kind of
• 13:13
  Speaker 2: a one time thing during the last tax bill, and
• 13:16
  Speaker 2: so bigger child tax credit coming. So good news for
• 13:20
  Speaker 2: Tucker and me. Not not anything that Mark's going.
• 13:24
  Speaker 4: To walk away with all right here, but none, els
• 13:25
  Speaker 4: I get to work.
• 13:26
  Speaker 2: Yeah, you could? You could? You know? Is this going
• 13:28
  Speaker 2: to incentivize you to have for children?
• 13:30
  Speaker 1: Now?
• 13:31
  Speaker 3: I actually don't love you.
• 13:32
  Speaker 2: This is strictly on the advisive my financial advice.
• 13:35
  Speaker 4: My accountant, if you please.
• 13:39
  Speaker 2: Seniors are going to be getting a fairly big boost
• 13:42
  Speaker 2: from this tax bill. The Senate proposed raising the deduction
• 13:46
  Speaker 2: for Americans over the age sixty sixty five and over
• 13:50
  Speaker 2: rather to six thousand dollars per qualifying individuals. So, to
• 13:55
  Speaker 2: summarize this, this was the House and Senate's attempt to
• 13:59
  Speaker 2: wave taxes on Social Security, which they could not do
• 14:02
  Speaker 2: through this reconciliation process, instead saying, hey, we're going to
• 14:05
  Speaker 2: give a special tax benefit to those special tax deduction
• 14:11
  Speaker 2: to those who are over the age of sixty five,
• 14:12
  Speaker 2: which doesn't affect the same thing. Few caveats to this one.
• 14:18
  Speaker 2: If all of your income comes from Social Security, you're
• 14:21
  Speaker 2: not paying any taxes. A deduction isn't going to lower
• 14:24
  Speaker 2: your taxes. Further, this is not a credit, it's not
• 14:27
  Speaker 2: a refundable credit. It is a tax deduction. So if
• 14:30
  Speaker 2: you're already not paying taxes because only your income is
• 14:32
  Speaker 2: coming from Social Security, no change here. If you are
• 14:35
  Speaker 2: earning half a million dollars in retirement because you still
• 14:39
  Speaker 2: own a business and you have massive rmds, also unlikely
• 14:43
  Speaker 2: to benefit you because this is capped out at one
• 14:45
  Speaker 2: hundred and fifty grand for those that are married and
• 14:49
  Speaker 2: earning a total modified adjusted gross income of under one
• 14:52
  Speaker 2: hundred fifty thousand dollars. This is a fairly significant deduction
• 14:56
  Speaker 2: for you compared to where things were before, and this
• 14:59
  Speaker 2: is a pretty big change, so not quite a no
• 15:02
  Speaker 2: tax on Social Security, but in effect a similar procedure
• 15:06
  Speaker 2: being played out here. We'll talk later about what this
• 15:09
  Speaker 2: actually means for the funding of Social Security and how
• 15:11
  Speaker 2: it is going to quickly disappear. But nonetheless, there are
• 15:15
  Speaker 2: Medicaid funding cuts that have been discussed at length here.
• 15:19
  Speaker 2: We don't have enough time to go into what this
• 15:21
  Speaker 2: actually means, but there will be new work requirements, a
• 15:24
  Speaker 2: whole bunch of new paperwork that will need to be funded.
• 15:27
  Speaker 2: The big question will be do states step up there
• 15:30
  Speaker 2: and fill these gaps state by state that are going
• 15:32
  Speaker 2: to be left by the Medicaid funding cuts, or does
• 15:36
  Speaker 2: it largely result in a whole bunch of people dropping
• 15:41
  Speaker 2: off of Medicaid and not having health insurance coverage and
• 15:44
  Speaker 2: hospitals closing. In response, they did fund some fifty billion
• 15:48
  Speaker 2: dollars for hospital assistance. Food stamp benefits are going to
• 15:52
  Speaker 2: be cut as part of this as well the proposed
• 15:57
  Speaker 2: cuts to food assistance programs snap it will ultimately effect
• 16:01
  Speaker 2: about forty million people. According to the Center on Budget
• 16:04
  Speaker 2: and Policy Priorities, there's going to be a new Trump
• 16:08
  Speaker 2: account for the Senate version of the bill, effectively chill
• 16:15
  Speaker 2: will Funday Savings account for children are the one time
• 16:18
  Speaker 2: government deposit of one thousand dollars for those born in
• 16:21
  Speaker 2: twenty twenty four through twenty twenty eight.
• 16:24
  Speaker 4: They're actually calling it that the Trump account.
• 16:26
  Speaker 2: Think of yes, is.
• 16:27
  Speaker 3: That what it's called in the law. That's so tacky,
• 16:29
  Speaker 3: that'd be like FDR.
• 16:30
  Speaker 2: Well, I don't know, let's see so called Trump accounts.
• 16:33
  Speaker 3: Okay, so that's just a nickname.
• 16:35
  Speaker 2: Okay, good, I don't know what they're actually going to
• 16:37
  Speaker 2: be named. More to come on that these accounts that
• 16:42
  Speaker 2: are being created, again, if you're a parent or soon
• 16:46
  Speaker 2: to be parent, you will choose to use these and
• 16:49
  Speaker 2: all like good because it is money that is granted
• 16:52
  Speaker 2: to you from the government. The tax benefits to them
• 16:56
  Speaker 2: are not quite as significant as say a five twenty
• 16:59
  Speaker 2: nine college savings plan. So many experts have said that, yeah,
• 17:02
  Speaker 2: they'll put this thousand dollars in here, and then they
• 17:04
  Speaker 2: probably won't be funded a whole lot more. Beyond that,
• 17:08
  Speaker 2: there will be some new lower student loan limits, some
• 17:12
  Speaker 2: new car loan interest deductions for American made vehicles for
• 17:18
  Speaker 2: certain tax thresholds come some of the repairs. There will
• 17:24
  Speaker 2: be a tax break on tips here for up to
• 17:27
  Speaker 2: twenty five thousand dollars a year in tip income. Oh
• 17:30
  Speaker 2: my goodness. And the overtime paid deduction.
• 17:34
  Speaker 4: Should the oscars music when somebody's been talking too long?
• 17:36
  Speaker 3: Did you guys?
• 17:37
  Speaker 2: Can you just yeah? Can you can?
• 17:39
  Speaker 1: Out?
• 17:41
  Speaker 2: House covered bill will create a deduction for qualified overtime
• 17:46
  Speaker 2: compensation of one hundred and sixty thousand dollars or less
• 17:49
  Speaker 2: only from twenty five to twenty twenty eight. Again, I'll
• 17:53
  Speaker 2: talk to why they're doing this here. It's because of
• 17:56
  Speaker 2: budget reconciliation. My expectation, though, is this stuff's going to
• 18:00
  Speaker 2: become permanent because of the new fun accounting methods that
• 18:04
  Speaker 2: the Senate has come up with to deal with this
• 18:07
  Speaker 2: type of increase in government spending. Killing a whole bunch
• 18:11
  Speaker 2: of EV and clean energy tax credits. So that's what
• 18:16
  Speaker 2: we seem to have in this bill. Everything else that
• 18:19
  Speaker 2: we talk about in the vast majority of the increase
• 18:22
  Speaker 2: in the deficit. It's not coming from any of these changes.
• 18:25
  Speaker 2: Where all that's coming from is the lock in of
• 18:29
  Speaker 2: the previous tax rates that were in place. Tucker, Yeah,
• 18:32
  Speaker 2: just you wanted to interrupt my seven minutes of speaking.
• 18:34
  Speaker 5: No, yeah, it wasn't long at all. A text her
• 18:36
  Speaker 5: out of the nine seven eight you said, you mentioned
• 18:39
  Speaker 5: the deduction change from married couples for Social Security taxes,
• 18:43
  Speaker 5: But what about for singles?
• 18:45
  Speaker 2: So six thousand dollars per individual? Okay, so twelve thousand
• 18:49
  Speaker 2: dollars if you're married, six thousand per individual, and if
• 18:52
  Speaker 2: you have modified adjusted gross income as an individual above
• 18:56
  Speaker 2: seventy five grand. It looks like that's going to start
• 18:59
  Speaker 2: disappearing for you. Wow, that was a lot. Let's go
• 19:04
  Speaker 2: ahead and get an update on markets. But I don't
• 19:07
  Speaker 2: I don't quite want to move on from here at Mark.
• 19:09
  Speaker 2: I want to actually include you in this next conversation
• 19:12
  Speaker 2: if you don't mind, so you know I.
• 19:15
  Speaker 4: Will be reading marginal text rates after the break. Stay tuned.
• 19:19
  Speaker 2: No, we're actually going to talk about this bill now,
• 19:21
  Speaker 2: and it's a meaningful impact on the deficits and what
• 19:23
  Speaker 2: that means. Next quick break, Wall Street Watch is coming up.
• 19:42
  Speaker 2: Like us on.
• 19:42
  Speaker 1: Facebook and follow us on Twitter at TFE show. Breaking
• 19:46
  Speaker 1: business news is always first right here on the Financial
• 19:50
  Speaker 1: Exchange Radio Network. Time now for Wall Street. Watch a
• 19:55
  Speaker 1: complete look at what's moving market so far today right
• 19:58
  Speaker 1: here on the Financial Exchange Radio Network.
• 20:01
  Speaker 2: Markets and mixed territory.
• 20:02
  Speaker 5: Is President Trump's tax bill pass the Senate after changes,
• 20:06
  Speaker 5: and now heads back to the House for final approval.
• 20:09
  Speaker 5: Wall Street also reacting to the ADP private sector report
• 20:12
  Speaker 5: that badly missed expectations showing a decline of thirty three
• 20:16
  Speaker 5: thousand jobs last month. This comes ahead of tomorrow's all
• 20:21
  Speaker 5: important June jobs report. Right now, the dows off by
• 20:25
  Speaker 5: one tenth of a percent or fifty five points. SMP
• 20:28
  Speaker 5: five hundreds up two tenths of one percent or thirteen points.
• 20:32
  Speaker 5: NASDAC up by nearly seven tenths of one percent of
• 20:35
  Speaker 5: one hundred and thirty seven points. RUSSED two thousand is
• 20:38
  Speaker 5: up by four points at the moment, Tenure treasure reeled
• 20:42
  Speaker 5: up by four basis points at four point two nine percent,
• 20:45
  Speaker 5: and crude oil is edging higher, trading at sixty five
• 20:50
  Speaker 5: dollars in fifty nine cents a barrel. Tesla missed estimates
• 20:53
  Speaker 5: for its second quarter deliveries, where it saw a thirteen
• 20:56
  Speaker 5: percent decline from a year ago. This marks Tesla's second
• 20:59
  Speaker 5: straight You're a year decline in vehicle deliveries for the
• 21:02
  Speaker 5: second quarter. However, Tesla stock is up three percent. Meanwhile,
• 21:06
  Speaker 5: Microsoft and now as it will lay off nine thousand employees,
• 21:09
  Speaker 5: a move that will affect less than four percent of
• 21:12
  Speaker 5: its global workforce across different teams. Shares in Microsoft are
• 21:17
  Speaker 5: dipping at the moment. Elsewhere, Constellation Brands posted lower quarterly
• 21:21
  Speaker 5: profit in sales amid softer consumer demand. Its survey research
• 21:25
  Speaker 5: found that consumers concerns about personal finances led to fewer
• 21:29
  Speaker 5: social gatherings in less shopping and convenience stores and gas stations.
• 21:34
  Speaker 5: Shares in the Corona and Modello beer maker are up
• 21:38
  Speaker 5: nearly two percent. Healthcare company Senteens said its earnings will
• 21:42
  Speaker 5: fall well short of expectations and also withdrew its financial
• 21:47
  Speaker 5: guidance for twenty twenty five. That'stalk tanking thirty eight percent,
• 21:52
  Speaker 5: and JP Morgan upd its dividend and authorized fifty billion
• 21:56
  Speaker 5: dollars of stock buybacks after passing a federal reserve stress test.
• 22:00
  Speaker 5: Other major banks, including a Bank of America, and Wells
• 22:03
  Speaker 5: Fargo also hiked their dividends. Those stocks are seeing minor
• 22:07
  Speaker 5: gains on the day.
• 22:09
  Speaker 3: I'm Tucker Silvan.
• 22:10
  Speaker 5: That is Wall Street Watch, all right, So.
• 22:12
  Speaker 2: I just did a tremendously interesting segment mark on what
• 22:16
  Speaker 2: is actually appearing to be in this tax billing micro effect.
• 22:21
  Speaker 2: Let's cut to the meat here. This bill, according to
• 22:26
  Speaker 2: the House passed version, according to the CBO, would increase
• 22:30
  Speaker 2: deficits over the next decade by two point four trillion dollars.
• 22:35
  Speaker 2: The Senate version something like four trillion dollars over the
• 22:42
  Speaker 2: next decade. We were critical at the time of things
• 22:45
  Speaker 2: like the Chips Act. If you recall, I remember you
• 22:48
  Speaker 2: know one of your main compelling arguments is where are
• 22:50
  Speaker 2: you coming up with this money to fund all of
• 22:52
  Speaker 2: these tax credits and benefits. That Chips Act, according to
• 22:56
  Speaker 2: the CBO, would increase deficits over the decade by fifty
• 23:05
  Speaker 2: billion dollars through twenty thirty one. So I don't know
• 23:09
  Speaker 2: where that gets to through twenty thirty four. I think
• 23:11
  Speaker 2: a lot of the benefits cut off by then. But
• 23:13
  Speaker 2: we're talking about orders of magnitude larger on this tax
• 23:18
  Speaker 2: cut bill, uh than what we've been talking about with
• 23:21
  Speaker 2: really much of any legislation passed under the Treasuring Yeah,
• 23:26
  Speaker 2: I had to check myself on Monday or Tuesday on
• 23:29
  Speaker 2: the show, because when I was going through this, I
• 23:31
  Speaker 2: kind of looked at this tax bill and said, Wow,
• 23:33
  Speaker 2: I kind of like these tax cuts. I like that
• 23:37
  Speaker 2: I'm going to be locked in at these lower rates
• 23:39
  Speaker 2: for you know, Blue states especially, we're getting that increase
• 23:42
  Speaker 2: salt deduction. There's nothing that's going to be turning around
• 23:46
  Speaker 2: on the business side of things, and we are, you know,
• 23:50
  Speaker 2: putting in some spending cuts here on specific areas. But
• 23:56
  Speaker 2: where I had to check myself is, look like if
• 23:58
  Speaker 2: I took issue with other their bills that spent on
• 24:02
  Speaker 2: areas that I found disagreeable because of fiscal reasons, you
• 24:07
  Speaker 2: have to take a step back and look at this
• 24:08
  Speaker 2: one too. And the reality of this bill is passing
• 24:12
  Speaker 2: it mortgages the future of Americans.
• 24:15
  Speaker 4: Yeah, all that debt is just future taxes. There's one
• 24:18
  Speaker 4: school of thought, one group of economists. They're a minority
• 24:21
  Speaker 4: that holds how you finance something taxes versus issuing get
• 24:26
  Speaker 4: to pay for it really doesn't matter because people know
• 24:28
  Speaker 4: they're gonna have to pay taxes to retire debt. Eventually.
• 24:32
  Speaker 4: It's from the insight of a famous economist, David Ricardo,
• 24:35
  Speaker 4: lived a long time ago. But it's called Ricardian equivalence.
• 24:38
  Speaker 4: It doesn't matter how you find it.
• 24:39
  Speaker 2: Actually cite your source on that's.
• 24:40
  Speaker 4: Yeah, well it's a pretty well known Yeah, obviously I didn't.
• 24:43
  Speaker 4: It's not obscure, pretty well known idea. Problem is it
• 24:46
  Speaker 4: doesn't really hold up. There is evidence that when you
• 24:49
  Speaker 4: borrow to pay for a tax cut, people do increase
• 24:51
  Speaker 4: their consumption, so there will be some growth boosting go ahead.
• 24:55
  Speaker 2: So his theory is people know that they're gonna have
• 24:58
  Speaker 2: to pay taxes more down the road, and so that.
• 25:00
  Speaker 4: Is just future taxes, is the easiest way to think
• 25:03
  Speaker 4: about it. There are lots of holes in that, and
• 25:05
  Speaker 4: empirically it doesn't it's not that tight. There is evidence
• 25:10
  Speaker 4: that when you cut taxes finance that with debt, people
• 25:13
  Speaker 4: do change their consumption patterns.
• 25:15
  Speaker 3: The theory suspema shouldn't, but there are.
• 25:18
  Speaker 4: Situations where indeed they do behave according to that notion
• 25:22
  Speaker 4: of I'll just use the formal Termercardian equivalence. Again, it's fringy,
• 25:26
  Speaker 4: it's but it's interesting to think about it. Forces you
• 25:29
  Speaker 4: to think about trade offs. Is it worth financing. I'm
• 25:32
  Speaker 4: not going to comment on the projected increase in deficits
• 25:35
  Speaker 4: because the Republicans are right about some of that. It's
• 25:39
  Speaker 4: not going to increase current deficits. It increases deficits relative
• 25:42
  Speaker 4: to an older baseline.
• 25:44
  Speaker 2: I think, yep.
• 25:45
  Speaker 4: So I don't think we're running about a two trillion
• 25:47
  Speaker 4: dollar deficit right now. This probably will not help. That's
• 25:49
  Speaker 4: a separate subject. I do want to talk about that too,
• 25:51
  Speaker 4: what is likely to actually help increase economic growth or not.
• 25:54
  Speaker 4: But it's not likely to blow out the current deficit.
• 25:57
  Speaker 4: I don't think if it's if it hits, when a
• 25:59
  Speaker 4: recess hits, the current deficit will blow out. The deficit
• 26:03
  Speaker 4: is already gigantic.
• 26:04
  Speaker 2: Yep.
• 26:05
  Speaker 4: Biden inherited a huge deficit from Trump. Trump's inherited Trump
• 26:08
  Speaker 4: and inherited a large deficit from Obama, doubled it before COVID,
• 26:12
  Speaker 4: and then doubled it and doubled it again, and then
• 26:14
  Speaker 4: Biden didn't help. This is my point is this is
• 26:16
  Speaker 4: a bipartisan are problem. Although Republicans, to my dismay, have
• 26:21
  Speaker 4: been far worse on the deficit than Democrats, the worst
• 26:24
  Speaker 4: spenders over the past half century have been my personal hero. Reagan,
• 26:29
  Speaker 4: George HW. Bush, surprisingly and just in percentage terms because
• 26:32
  Speaker 4: he encountered a recession. Obama's in there too, but they're
• 26:34
  Speaker 4: all Republicans because they tend to like tax cuts without
• 26:38
  Speaker 4: paying for them. The larger point I want to make
• 26:40
  Speaker 4: here is number one. I'm not in the panic over
• 26:44
  Speaker 4: the new deficits camp on this because this will not
• 26:47
  Speaker 4: exacerbate the current deficit, which is what matters for a
• 26:52
  Speaker 4: long term, long term budget accounting purposes.
• 26:57
  Speaker 2: But the point would be that it also doesn't fix
• 27:01
  Speaker 2: what has been, by most accounts, a pretty extreme depth
• 27:06
  Speaker 2: sit that we've run For.
• 27:06
  Speaker 4: Some of course, it doesn't, but they make this is
• 27:10
  Speaker 4: where I want to Okay, so we've established, we agreed
• 27:13
  Speaker 4: that this is not grounds for panic, but it's also
• 27:17
  Speaker 4: not It's also disingenuous to claim that this will stoke growth,
• 27:22
  Speaker 4: resulting in some sort of growth miracle that will cure
• 27:25
  Speaker 4: the deficit problem. Why now, that's a fairy tale too,
• 27:28
  Speaker 4: because the trend, Mike, I'm glad you asked. The trend
• 27:31
  Speaker 4: in growth is really hard to change. In the latter
• 27:34
  Speaker 4: half of the twentieth century, roughly nineteen fifty to nineteen
• 27:38
  Speaker 4: ninety nine GDP. Overall, this is not per capita, so
• 27:42
  Speaker 4: it doesn't tell you how well off the average person was,
• 27:45
  Speaker 4: but it's a close approximation. Grew at about three and
• 27:48
  Speaker 4: a third percent on average per year. That's after inflation.
• 27:51
  Speaker 4: Since then, it's grown at about two percent. Said differently,
• 27:56
  Speaker 4: and if you could picture a line going up. If
• 27:58
  Speaker 4: you've ever seen a chart of GDP, you know it's
• 28:00
  Speaker 4: a nice function of time x nice continuously compound it
• 28:05
  Speaker 4: if you want to be technical, exponential function that that is,
• 28:08
  Speaker 4: it grows exponentially, so it sort of just goes upward.
• 28:10
  Speaker 3: Up and up and up.
• 28:13
  Speaker 4: If we had continue to grow at that clip over
• 28:15
  Speaker 4: the last twenty five I feel like I'm popping my
• 28:17
  Speaker 4: piece a lot here.
• 28:18
  Speaker 3: Can people hear that? I don't know why?
• 28:19
  Speaker 5: No, thank you for pointing it out.
• 28:21
  Speaker 4: Okay, Yeah, just keep the engineering group informed. If we
• 28:25
  Speaker 4: had continued to grow at the clip we grew at
• 28:27
  Speaker 4: in the last century, in this century, we'd be about
• 28:29
  Speaker 4: forty percent richer.
• 28:31
  Speaker 3: Think about that.
• 28:32
  Speaker 4: Yeah, So my point is ours work slowed that slowed
• 28:37
  Speaker 4: down economic growth. It's not so much a productivity story
• 28:40
  Speaker 4: that that's part of it. It's mostly an hour's work
• 28:42
  Speaker 4: story in labor for size story. We're less rich than
• 28:45
  Speaker 4: we otherwise would have been. I think that's contributed to
• 28:48
  Speaker 4: the rise. It's not my observation. Actually, a lot of
• 28:50
  Speaker 4: people have pointed this out. It's contributed to the rise
• 28:53
  Speaker 4: in populism. Populism means more deficit spending, and the epitome
• 28:57
  Speaker 4: of it is what we've seen over the past, what
• 28:59
  Speaker 4: we saw on the last campaign, both candidates, every group
• 29:01
  Speaker 4: they got in front of tax you get a tax
• 29:03
  Speaker 4: cut you. People mocked it as the Oprah approach. Right,
• 29:06
  Speaker 4: you get a freaker, you get a freaker, you get
• 29:08
  Speaker 4: we promise tax cuts to everybody.
• 29:11
  Speaker 2: We're delivering a whole bunch of them.
• 29:12
  Speaker 4: And they are following through on all of their promises.
• 29:14
  Speaker 4: Nobody should be surprised. I don't think it's the end
• 29:16
  Speaker 4: of the world. It doesn't help a pre existing problem.
• 29:19
  Speaker 4: I don't think the trajectory has changed that much.
• 29:23
  Speaker 2: I'm going to give a simpler version of your explanation
• 29:26
  Speaker 2: for why this doesn't change much. So we've been on
• 29:28
  Speaker 2: this trend line for growth, right, This tax bill doesn't
• 29:31
  Speaker 2: actually change a whole lot.
• 29:33
  Speaker 3: It's not going to induce people.
• 29:34
  Speaker 2: All it does is continues what has already been in place,
• 29:38
  Speaker 2: And so if you compare it to where we might
• 29:40
  Speaker 2: have gone negatively if these tax cuts did expire. I
• 29:45
  Speaker 2: think that's a reason.
• 29:46
  Speaker 4: What about an expansionary fiscal contraction? That sounds like a fancy.
• 29:49
  Speaker 4: In the nineteen nineties, we cut taxes, we raise taxes twice.
• 29:54
  Speaker 4: There are people who argue that that got our fiscal
• 29:56
  Speaker 4: Actually it's not an argument. We had a surplus for
• 29:58
  Speaker 4: three years at the end of that day or three
• 30:00
  Speaker 4: years at the end of that decade, thanks to George H. W. Bush,
• 30:03
  Speaker 4: who did the courageous thing. I hated it at the time,
• 30:05
  Speaker 4: but it was necessary. Raise taxes. Clinton did the same,
• 30:08
  Speaker 4: raise taxes, cut spending. There's a phrase for that, I'll
• 30:12
  Speaker 4: use it again, expansionary fiscal contraction. You would think cutting
• 30:16
  Speaker 4: government spending raising taxes would be bad for growth.
• 30:18
  Speaker 3: It's just the opposite.
• 30:19
  Speaker 4: Maybe people perceive that future taxes would be lower and
• 30:23
  Speaker 4: they spent more. There's actually evidence that that's what happened
• 30:25
  Speaker 4: in the nineteen nineties. Maybe it allowed the Fed to
• 30:28
  Speaker 4: go easier on monetary policy, keep rates lower. That'sactly Why
• 30:32
  Speaker 4: are you smarting?
• 30:33
  Speaker 2: I just I'm because we will never know.
• 30:36
  Speaker 4: Yeah, well, actually researchers come down on the side of
• 30:41
  Speaker 4: that worked. The notion of expansionary fiscal contraction. It sounds
• 30:45
  Speaker 4: like an oxymoron, but there's evidence for it, and it
• 30:48
  Speaker 4: makes sense if you think about the way people perceive
• 30:51
  Speaker 4: the future path of government spending, debt and deficits problems.
• 30:55
  Speaker 4: We're doing the exact opposite right now. This could actually
• 30:57
  Speaker 4: this could hurt growth, not help. But if people think
• 31:00
  Speaker 4: future taxes will go up or inflation goes up because
• 31:03
  Speaker 4: we've got to inflate some of this dataway, Let's.
• 31:05
  Speaker 2: Take a quick break when we come back. Want to
• 31:08
  Speaker 2: come back with the comments from Powell yesterday in Portugal,
• 31:12
  Speaker 2: specifically on tariff's growth, unemployment, et CETERA quick break that's
• 31:15
  Speaker 2: next here on the Financial Exchange.
• 31:17
  Speaker 1: Breaking business news as it happens only here on the
• 31:21
  Speaker 1: Financial Exchange Radio Network. The Financial Exchange streams live on YouTube.
• 31:27
  Speaker 1: Subscribe to our page and stay up to date on
• 31:30
  Speaker 1: breaking business news all morning. Long Face is the Financial
• 31:33
  Speaker 1: Exchange Radio Network.
• 31:48
  Speaker 3: Mark.
• 31:49
  Speaker 2: Yesterday in Portugal, Jay Powell confirmed something that I think
• 31:52
  Speaker 2: you and I had talked about, which is would they
• 31:54
  Speaker 2: be cutting rates already? Should the terriffs not exist that
• 32:00
  Speaker 2: been announced? And he replied to this question, I have
• 32:02
  Speaker 2: to say, it's, you know, one thing for me to
• 32:05
  Speaker 2: guess at this and play it up. I don't think
• 32:08
  Speaker 2: that's a question that he should have been answering. I agree,
• 32:12
  Speaker 2: So let me start with why if the announcements on
• 32:17
  Speaker 2: tariffs from April second and before no longer existed? It
• 32:21
  Speaker 2: is impossible to know what the economy today would look like.
• 32:24
  Speaker 2: The markets probably wouldn't have gone through a twenty percent reversal,
• 32:28
  Speaker 2: Unemployment could look different, inflation could look different. I don't
• 32:32
  Speaker 2: think it's a useful exercise for j. Powell to say,
• 32:36
  Speaker 2: under really any conditions, what we might have done under
• 32:40
  Speaker 2: a completely different universe.
• 32:42
  Speaker 4: Yeah, I get what his point. Maybe he should have said,
• 32:45
  Speaker 4: are you asking me if inflation expectations were low today
• 32:47
  Speaker 4: as opposed to elevated, would that change the way we
• 32:51
  Speaker 4: set our if short term interest rate target? I'd say, well, yes,
• 32:56
  Speaker 4: inflation expectations are important.
• 32:58
  Speaker 3: Part.
• 32:58
  Speaker 4: This is where knowing a little bit of theory helped,
• 33:00
  Speaker 4: and being able to fall back on a framework in
• 33:02
  Speaker 4: your mind helps. He's always stress. The reason I've not
• 33:05
  Speaker 4: been crazy about his tenure is that he's not. He
• 33:08
  Speaker 4: doesn't think in sort of a discipline clear way everything
• 33:11
  Speaker 4: the FED chair says, the only reason they should be
• 33:13
  Speaker 4: allowed to talk in public is to keep inflation expectations
• 33:16
  Speaker 4: under control. That's his only job, Mike, we lose track
• 33:18
  Speaker 4: of that. He's not there to be an economic oragle
• 33:20
  Speaker 4: like Greenspan, like to pontificate on this, that or the other.
• 33:23
  Speaker 4: But he was a PhD economist. They kind of gave
• 33:26
  Speaker 4: it to him for showing up to a ceremony. But
• 33:28
  Speaker 4: we don't have to get into my personal resentments. But
• 33:32
  Speaker 4: you know, Powell's a little bit undisciplined, and he does
• 33:34
  Speaker 4: it's not off script. I think he thinks he's being
• 33:39
  Speaker 4: thinks he's being disciplined, but I don't, And I just
• 33:41
  Speaker 4: think he should say inflation expectations are part of the
• 33:43
  Speaker 4: inflation process.
• 33:44
  Speaker 3: Part of our job is keep those under control.
• 33:45
  Speaker 4: If people think prices are going up, that may affect
• 33:47
  Speaker 4: inflation expectations, and you leave it at that.
• 33:50
  Speaker 3: I don't think.
• 33:51
  Speaker 4: You know, Paul Vulgar never would have, as to your point,
• 33:54
  Speaker 4: more judicious maybe savvy FED chairman, especially with the president.
• 34:00
  Speaker 2: That's where Atlanta four.
• 34:02
  Speaker 4: Every time you say something, come on Jerome. I almost
• 34:04
  Speaker 4: feel like he's trying to provoke the president that.
• 34:06
  Speaker 2: Yeah, that's kind of where I landed on.
• 34:08
  Speaker 3: You don't win that fight.
• 34:09
  Speaker 2: No, you don't win that fight. And two, now, what
• 34:13
  Speaker 2: sort of position does this put you in? You know,
• 34:16
  Speaker 2: we had just you know, flying in the last fifteen minutes,
• 34:19
  Speaker 2: announcements on tarifs in Vietnam. We've got the continued negotiations
• 34:22
  Speaker 2: with Japan. Uh. Yeah, what sort of corner does this
• 34:26
  Speaker 2: paint you into? Should those escalate in some meaningful way
• 34:29
  Speaker 2: without a change in the data, it kind of locks
• 34:31
  Speaker 2: you in a little bit further here. And so I
• 34:34
  Speaker 2: don't know, just seems like a mistake to me.
• 34:37
  Speaker 5: Changes to Medicaid occur almost every year, and if you're
• 34:40
  Speaker 5: not informed, your assets could be at risk, especial especially
• 34:44
  Speaker 5: if you or your spouse need nursing home care. Cushing
• 34:47
  Speaker 5: and Dolan are experts in elder law, and their new
• 34:50
  Speaker 5: guy is called Last Minute Medicaid Eligibility. It'll help you
• 34:54
  Speaker 5: understand the Medicaid process, which is critically important if you're
• 34:58
  Speaker 5: retired or getting close to retiring. The guide is important
• 35:01
  Speaker 5: information regarding numerous strategies that can protect your assets from
• 35:05
  Speaker 5: the nursing home. It could be your primary home, or
• 35:08
  Speaker 5: vacation home, or any rental property you may own. You've
• 35:12
  Speaker 5: worked hard to achieve wealth, so don't take chances when
• 35:15
  Speaker 5: it comes to protecting it. Get your copy of Cushing
• 35:18
  Speaker 5: and Dolan's brand new guide called Last Minute Medicaid Eligibility
• 35:23
  Speaker 5: by calling eight sixty six eight four eight five six
• 35:26
  Speaker 5: nine nine. That's eight six six eight four eight five
• 35:29
  Speaker 5: six nine to nine, or you can request it from
• 35:32
  Speaker 5: their website legal exchange show dot com.
• 35:35
  Speaker 1: The proceeding was paid for and the views expressed are
• 35:37
  Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
• 35:39
  Speaker 1: or Armstrong Advisory may contact you offering legal or investment services.
• 35:42
  Speaker 1: Cushing and Armstrong do not endorse each other and are
• 35:44
  Speaker 1: not affiliated.
• 35:46
  Speaker 2: Regardless, Mark, we do have another FED meeting, let's see,
• 35:50
  Speaker 2: not until July thirtieth, so upcoming here, What do we
• 35:54
  Speaker 2: need to see in employment data for that cut that
• 35:57
  Speaker 2: President Trump has been asking for actually come true?
• 36:00
  Speaker 4: He wants rates cut to like one percent, So we
• 36:02
  Speaker 4: need not getting entire market go up and smoke.
• 36:05
  Speaker 2: What do we need for any sort of rate cup?
• 36:06
  Speaker 4: Then they may be ready to ease anyway slightly. There
• 36:09
  Speaker 4: are some signs of labor market softening. Their job is
• 36:13
  Speaker 4: to balance the forces that push inflation up against the
• 36:16
  Speaker 4: forces that could push growth down and thus unemployment up.
• 36:20
  Speaker 4: They have a fairly decent read. I think we all
• 36:22
  Speaker 4: get ultimately the same data they do, but they have
• 36:25
  Speaker 4: more sophisticated ways of looking at it than we do.
• 36:27
  Speaker 4: I trust that they are making best efforts to balance
• 36:31
  Speaker 4: those two forces that I mentioned, Mike. So to answer
• 36:33
  Speaker 4: your question specifically, look, you need about just using the
• 36:37
  Speaker 4: past couple of years worth of payroll changes, you need
• 36:42
  Speaker 4: about one hundred and fifty thousand new jobs a month
• 36:44
  Speaker 4: to keep the unemployment rate steady. We're dangerously close to
• 36:48
  Speaker 4: not getting testing and they know this. That's easy to calculate.
• 36:53
  Speaker 2: The only counterpoint I would give to that is, I'm
• 36:57
  Speaker 2: not sure if that number will still be relevant given
• 37:01
  Speaker 2: what we're doing with immigration right now. So your your
• 37:05
  Speaker 2: point was, Hey, to keep the labor market balance, we
• 37:08
  Speaker 2: need to create one hundred and fifty thousand ish jobs
• 37:10
  Speaker 2: per month, com rounding if we are having a big
• 37:16
  Speaker 2: draw down of that number. Sorry, of the other side
• 37:20
  Speaker 2: of that equation, which is the total labor force that's
• 37:22
  Speaker 2: eligible to work, or willing to work because they're worried
• 37:26
  Speaker 2: about an ice raising.
• 37:27
  Speaker 4: A labor force B size doesn't factor into that calculation.
• 37:30
  Speaker 3: I just asked.
• 37:32
  Speaker 4: I solved for the change in payrolls that that is
• 37:36
  Speaker 4: associated with a zero percent change in the unemployment rate.
• 37:39
  Speaker 4: That's all you know. Labor force doesn't factor into that.
• 37:41
  Speaker 4: Just I mean, I see what you're saying. We could
• 37:43
  Speaker 4: talk Maybe we should talk about this more on the
• 37:44
  Speaker 4: other side.
• 37:45
  Speaker 2: Yeah, fair enough. Let's take a quick break here. When
• 37:48
  Speaker 2: we come back. Want to talk a little bit about
• 37:52
  Speaker 2: the jobs report that we will be getting tomorrow that
• 37:55
  Speaker 2: we started to allude to. Their markets remain in mixed territory,
• 37:58
  Speaker 2: now off out sixty points, SMP and Nasdaq in positive territory.
• 38:03
  Speaker 2: We'll be right back, folks, Stay tuned.