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Are Americans finally fed up with high car prices? · The Financial Exchange Show

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Speaker 2: Chuck Mike Tucker with you here.
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Speaker 3: And we've got markets with a very modest sell off
1:16
Speaker 3: to start the month of December, still trying to get
1:20
Speaker 3: all that trip to Fan out of their system. But
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Speaker 3: the sm P five hundred down twenty three points about
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Speaker 3: a third percent, Dow Jones Industrial Average down two hundred
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Speaker 3: points about point four two percent, and the nasdak can
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Speaker 3: Pause down ninety seven points about point four percent, So
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Speaker 3: again very modest decline to start the month of December.
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Speaker 3: Here tenure US Treasury up seven point one basis points
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Speaker 3: to four point h nine percent. That's going to be
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Speaker 3: putting some pressure on mortgage rates, probably gettinghim back towards
1:49
Speaker 3: that six point three percent range.
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Speaker 2: By the end of the day.
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Speaker 3: We've got the US Dollar index down a quarter percent
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Speaker 3: to ninety nine point one point five. Gold is up
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Speaker 3: seven to ninety ounce to forty two sixty eighty cents,
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Speaker 3: and we've got crude oil up a dollar at fifty
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Speaker 3: nine to fifty five on West Texas Intermediate. Despite that,
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Speaker 3: I think tomorrow is going to be the day, Michael.
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Speaker 3: It is Tomorrow's gonna be the day which one triple
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Speaker 3: a national amatur gas price is at three dollars and
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Speaker 3: one tenths of a cent right now. I think tomorrow
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Speaker 3: we might get below that three dollars mark on the
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Speaker 3: triple A national average. Remains to be seen if we
2:29
Speaker 3: you know, stay there. You know, oil prices moved back
2:31
Speaker 3: up here, but at least for tomorrow, I think we're
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Speaker 3: gonna get there.
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Speaker 2: So that's kind of exciting to me. Yeah, I enjoy that.
2:39
Speaker 2: I like seeing that.
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Speaker 3: I'm sure the folks that are listening to us down
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Speaker 3: in Texas are like, hey, this isn't the best for us,
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Speaker 3: and I understand that, but as someone who is not
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Speaker 3: employed in the petroleum industry.
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Speaker 2: I'll take it all on board. Let's see.
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Speaker 3: And for some reason, I don't know why bitcoin down
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Speaker 3: seven and a half percent today.
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Speaker 2: On did it miss earnings?
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Speaker 4: Can we talk about that for a moment, because we've
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Speaker 4: talked about the correlation between stocks and.
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Speaker 2: Bitcoin, and it.
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Speaker 4: Has been elevated recently, definitely increased, you know, over the
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Speaker 4: last few years compared to in the twenty tens, so
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Speaker 4: that is actually something you can measure. The day to
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Speaker 4: day price movements on bitcoin more correlated to stock prices
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Speaker 4: today than it was, say in twenty fifteen, which makes
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Speaker 4: sense given the growth of the asset class, the fact
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Speaker 4: that you can invest in it, you know, generally speaking
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Speaker 4: in a brokerage account today versus in yours past. I'm
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Speaker 4: just wondering, like, correct me if I'm wrong, but it
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Speaker 4: seems to me it would be very difficult to see
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Speaker 4: stocks rise to any significance on a day when bitcoin
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Speaker 4: is selling off by seven percent.
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Speaker 2: It seems tough these days.
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Speaker 3: The other thing that is kind of wild is remember
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Speaker 3: and again I don't have a dog in this fight.
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Speaker 3: I just am observing Bitcoin's supposed to be this idea
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Speaker 3: of you know, digital gold. Gold's been freaking ripping the
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Speaker 3: second half of the year.
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Speaker 2: Bitcoin not so much.
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Speaker 3: And that's interesting to me just in terms of like
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Speaker 3: what it might be saying about why people might actually
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Speaker 3: own it and how they may trade it differently from gold,
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Speaker 3: silver and other precious metals. I just think it's interesting
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Speaker 3: to look at. And that's all I have to say
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Speaker 3: about that. I want to talk about this piece from
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Speaker 3: the Wall Street Journal American consumers lose patience with high
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Speaker 3: car prices. I gotta tell you, here's the thing. So
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Speaker 3: I leased a car back in twenty twenty three. Okay,
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Speaker 3: a nice lovely Suparoo out back. Yes, boring, dependable, puts
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Speaker 3: me at least twenty years older than I am when
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Speaker 3: driving down the street, you know. And again I don't
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Speaker 3: know that I got like a deal or didn't like
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Speaker 3: it was.
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Speaker 2: It was fine.
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Speaker 3: They just super just as an example, unveiled a new
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Speaker 3: outback this year, and they just put out pricing for
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Speaker 3: the twenty twenty six models, and the price is all
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Speaker 3: jumped by anywhere from like five to fifteen percent relative
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Speaker 3: to last years. And I gotta tell you, like, I
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Speaker 3: have some sticker shock when I start seeing Supero Outbacks
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Speaker 3: that are priced north of you know, forty five thousand dollars,
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Speaker 3: because that is not a premium vehicle. And to me, again,
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Speaker 3: like we're all anchored to, you know, certain numbers in
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Speaker 3: our minds based on, you know, what we saw at
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Speaker 3: a certain age in this and that. But when I
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Speaker 3: start seeing like super outbacks getting priced close to fifty grand,
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Speaker 3: I look at it and I'm kind of like, yikes,
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Speaker 3: like that that's kind of nuts.
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Speaker 4: If we buy the premise that American consumers are in
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Speaker 4: fact losing patients with high power prices.
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Speaker 2: Which I don't also yeah, I'm not sure sure I
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Speaker 2: do which, But but if we did which, which.
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Speaker 4: Brands do you think are in the worst positioning for
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Speaker 4: a shift in consumer car spending? Ford comes to mind,
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Speaker 4: just because they've completely abandoned the Sedanima.
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Speaker 2: I don't think so.
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Speaker 3: No, the F one fifty buyer is the F one
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Speaker 3: fifty buyer. Yeah, you know, if you're buying that, you're
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Speaker 3: buying that. Like, there is no alternative for the F
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Speaker 3: one fifty buyer.
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Speaker 2: I think. Okay, So if you look.
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Speaker 4: At I'm not worried about luxury brands because that's a
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Speaker 4: different segment and that's not what we're talking about here.
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Speaker 4: So Audi, Mercedes, Cadillac, all of those. To me, you're
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Speaker 4: not looking at those going to be fine. I'm worried
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Speaker 4: about the Nissans, Volkswagon's Toyotas, Honda's GM Chevy. Like, which
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Speaker 4: one of those are worst positioned for a change in
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Speaker 4: consumer behavior? One thing, one area that's towards like cheaper vehicles,
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Speaker 4: I mean, one area that seems to be benefiting. Yeah,
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Speaker 4: is just cleaning up. I feel like, you know, they
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Speaker 4: are like every fourth car that I see.
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Speaker 3: I think them and Honda are very well positioned I
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Speaker 3: guess I'm going to kind of back into this, yeah,
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Speaker 3: somehow pun intended.
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Speaker 2: I think Kia and Honda are both very well positioned.
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Speaker 3: Like every time I always like to just look around
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Speaker 3: at cars every month, just because I never like to
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Speaker 3: actually buy them. But every time I look at, you know, hey,
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Speaker 3: the pricing on like a CRV or something like that,
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Speaker 3: I'm like, wow, like this is, you know, a pretty
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Speaker 3: good deal given what else is out there. I do
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Speaker 3: think that Nissan is kind of screwed, but I think
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Speaker 3: they were kind of screwed before this anyways, Like that's
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Speaker 3: just kind of the nature of Nissan right now. I
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Speaker 3: think Toyota is well positioned in that they're building the
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Speaker 3: vehicles that people want, and based on everything I hear
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Speaker 3: and see from like Toyota dealers, even though their pricing
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Speaker 3: is a little bit higher than what you get on Honda,
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Speaker 3: they're so in demand that they have like no back
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Speaker 3: like they have this huge backlog basically.
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Speaker 4: Certainly, what I experienced is, you know, I probably called
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Speaker 4: thirty dealerships, none of which had the vehicle in stock
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Speaker 4: that I was looking for. But there it is a
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Speaker 4: premium price point that people are willing seemingly willing to
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Speaker 4: pay based on the reputation for reliability, plus the hybrid engines.
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Speaker 3: I'm trying to like go through just who else is
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Speaker 3: out there? Let me, I'm just sorting through. Okay, so
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Speaker 3: we've gone through fordh Bwick. I don't really know what
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Speaker 3: they even make anymore. Yeah, I got to be honest.
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Speaker 3: I just don't understands for nothing, Cadillacs, a premium one Chevy.
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Speaker 3: I haven't looked at like pricing for what Chevy has
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Speaker 3: out there these days on like you know, Blazer, Trailblazer,
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Speaker 3: stuff like that.
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Speaker 4: So I just I don't know. So let let's go back.
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Speaker 4: Why don't I agree with you? I don't buy that
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Speaker 4: American consumers are losing patients with high car prices.
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Speaker 2: I think they like to bemoan it.
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Speaker 4: But the sales members are fine, sales numbers are fine,
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Speaker 4: and all they're doing is extending out their credit even longer,
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Speaker 4: which is a terrible idea, but being done without much
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Speaker 4: of a blink.
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Speaker 3: So here's what I will say about I've talked a
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Speaker 3: lot about how Americans buy cars badly, like they make
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Speaker 3: bad buying decisions, and I saw an example of this
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Speaker 3: over the weekend on social media where someone had bought
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Speaker 3: like one hundred and ten thousand dollars pickup and financed
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Speaker 3: it for seven years at ten percent financing, so they
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Speaker 3: ended up it was gonna cost him one hundred and
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Speaker 3: fifty grand to buy this one hundred and ten thousand
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Speaker 3: dollars pickup. And here's what I do have to say.
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Speaker 3: If you always want a new car and want to
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Speaker 3: get the best bang for your buck, you should not
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Speaker 3: be buying that car with a seven year.
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Speaker 1: Loan.
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Speaker 3: If you can't figure out how to make the numbers
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Speaker 3: work on a three or four year car loan, you
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Speaker 3: should be leasing. In a lot of cases, you will
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Speaker 3: end up with cheaper payments. You will end up being
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Speaker 3: able to get the new vehicle you want every few
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Speaker 3: years without having to worry about am I underwater on
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Speaker 3: this or am I not? Because quite honestly, if you're
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Speaker 3: buying a vehicle with a seven year loan just so
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Speaker 3: that you can say, look at the end of that
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Speaker 3: seven years, oh I paid it off, that's not really
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Speaker 3: good business based on the depreciation of the vehicle and
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Speaker 3: the interest rates that you need to pay right now.
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Speaker 4: If you drive it for another seven years afterwards, sure
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Speaker 4: I can get on board with that, but you need to.
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Speaker 3: But you right, you basically need to, and there aren't
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Speaker 3: Like the person who's buying the one hundred and ten
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Speaker 3: thousand dollars pickup truck is probably not buying it for
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Speaker 3: fourteen years.
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Speaker 2: Yeah likely.
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Speaker 3: So again I think we have to just do a
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Speaker 3: better job of figuring out, you know, like this, there's
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Speaker 3: this fascination with car ownership overleasing. And again I'm not
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Speaker 3: like leasse least the car I have right now is
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Speaker 3: the only car I've ever leased. But I did it
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Speaker 3: specifically because I said, look, I want this car for
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Speaker 3: a few years to see how it works for me.
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Speaker 3: You don't want to be locked in long term on it,
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Speaker 3: and I don't want to be paying longer term, you know,
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Speaker 3: higher interest rates because remember when you take out a
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Speaker 3: longer term car loan, the interest rate oftentimes is higher
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Speaker 3: as well. And so I think people need to be
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Speaker 3: amenable to hey, like, do I actually want to own
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Speaker 3: this car for a long time, Because if I'm just
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Speaker 3: one of those people who might trade it every three
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Speaker 3: to four years, you're probably better off being in a
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Speaker 3: leasing cycle than trying to buy a car with a
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Speaker 3: seven year loan and then having to roll the extra
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Speaker 3: loan over into your next vehicle.
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Speaker 2: Let's take a quick break.
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Speaker 3: When we come back, we'll do a little bit of
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Speaker 3: trivia and then we'll talk about private credit hysteria after this.
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Speaker 3: Opinion by Paul Davies, who was a reporter from The
14:05
Speaker 3: Wall Street Journal and Financial Times quote, private credit hysteria
14:09
Speaker 3: will get very real next year. We've been talking about
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Speaker 3: private credit for the last few months. We were talking
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Speaker 3: about it even a couple months before that.
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Speaker 4: Our perspective was probably a little bit different than Paul's.
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Speaker 4: It was more that there seems to be some smoke
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Speaker 4: right now, and we need some time to determine if
14:27
Speaker 4: there's fire. But what I would say about private credit
14:32
Speaker 4: right now is it seems to me that it needs
14:34
Speaker 4: to be darn near perfect for the next six months
14:40
Speaker 4: in order to dispel the rumors of its fiasco. You've
14:46
Speaker 4: had a few bankruptcies and frauds that have been very public.
14:51
Speaker 4: And the reason I think it needs to be perfect
14:53
Speaker 4: is because there seems to be a big cooling off
14:55
Speaker 4: period by most of the big investors. And so I'm
14:57
Speaker 4: just wondering who's going to allocate new CA capital to
15:00
Speaker 4: private credit right now, Like, unless the rates move up substantially,
15:07
Speaker 4: I don't see why you as an insurance company or
15:10
Speaker 4: an endowment or a pension fund, or as a registered
15:14
Speaker 4: investment advisor who have been you know, getting pushed more
15:18
Speaker 4: of this stuff would be willing to allocate large degrees
15:21
Speaker 4: of new capital to this asset class that is opaque
15:26
Speaker 4: and showing warning signs.
15:28
Speaker 3: So part of it might be, Hey, you've been doing
15:30
Speaker 3: it and you just feel like you need to continue
15:32
Speaker 3: because you have a return that you need to try
15:35
Speaker 3: to hit. The part that's challenging about this is because
15:39
Speaker 3: these are you know, private instruments, it's tough to get
15:43
Speaker 3: data on what we're seeing in terms of flows into them, right.
15:46
Speaker 3: We just don't We don't even know how much money
15:49
Speaker 3: is held within that private credit sphere, let alone, Hey
15:54
Speaker 3: how much is you know, flowing in on a monthly
15:56
Speaker 3: or weekly basis? So what I can tell you if
16:00
Speaker 3: that mechanism slows.
16:02
Speaker 4: If the mechanism of credit issue, if you do not
16:06
Speaker 4: have as much funding going into private credit, that in
16:11
Speaker 4: and of itself, depending on the scale of that slowdown,
16:15
Speaker 4: has the potential to be something that causes a credit
16:20
Speaker 4: issue in the next twelve to twenty four months. Let's
16:23
Speaker 4: let's wind the clock back, Tucker, can you get the
16:25
Speaker 4: time machine fired up?
16:26
Speaker 3: Then? Yes, we just got to get some plutonium for
16:29
Speaker 3: the reactor.
16:30
Speaker 2: Here and we're gonna go back to.
16:34
Speaker 3: Oh yeah, it's two thousand and six right now. Wow,
16:39
Speaker 3: And Steve Jobs hasn't announced the iPhone yet, and we're
16:43
Speaker 3: all hanging out at you know, a nice summer barbecue,
16:46
Speaker 3: just you know, chilling.
16:48
Speaker 2: But under the.
16:49
Speaker 3: Surface, you're starting to see some problems bubbling up in
16:53
Speaker 3: subprime credit. It's not a real issue yet, like there
16:56
Speaker 3: hasn't been haven't been any major defaults or anything yet.
16:59
Speaker 3: But about a year from now, now, in two thousand
17:00
Speaker 3: and seven, there will be some problems that really come
17:04
Speaker 3: to the surface and people start to wonder about. And
17:07
Speaker 3: the problem that happened in the housing market then was, hey,
17:11
Speaker 3: you had defaults that started to pile up in the
17:14
Speaker 3: subprime sector, which then meant that investors weren't sure what
17:20
Speaker 3: the subprime debt they were holding was worth. In turn,
17:23
Speaker 3: they said, we're not going to allocate as much money
17:26
Speaker 3: towards this kind of lending, which then made it harder
17:29
Speaker 3: for people to buy homes, which caused valuations to fall more,
17:33
Speaker 3: which during a time when a lot of people are
17:35
Speaker 3: trying to sell because of adjustable rate mortgages adjusting up
17:38
Speaker 3: meant that they couldn't sell had to take big haircuts
17:41
Speaker 3: led to bigger credit losses, and we know the story,
17:45
Speaker 3: but that funding drying up was a key part of
17:48
Speaker 3: the cycle, and that, hey, the housing bubble doesn't burst
17:52
Speaker 3: if lending continued at the same rate, because you could
17:55
Speaker 3: have kept the plate spinning and everything would have been
17:59
Speaker 3: not okay.
17:59
Speaker 2: But ok ish.
18:02
Speaker 3: In this case, it's not necessarily the bursting of a
18:04
Speaker 3: housing bubble that you see, but that mid market business
18:08
Speaker 3: that depends on a seven hundred million dollar loan from
18:13
Speaker 3: private credit fund XYZ by Company ABC, if that funding
18:19
Speaker 3: cannot continue, it becomes problematic because a lot of this
18:23
Speaker 3: is used for inventory and things along those lines, and
18:26
Speaker 3: so if you can't buy inventory, then you can't eventually
18:28
Speaker 3: sell that inventory. You start laying people off, and the
18:32
Speaker 3: whole thing comes apart. That's the concern that you have,
18:36
Speaker 3: and why, even though there haven't been a ton of
18:39
Speaker 3: defaults to this point, if investors get nervous enough about
18:43
Speaker 3: them that they stop flows into this area, that could
18:47
Speaker 3: trigger problems that show up in the next year or two.
18:49
Speaker 2: In the economy. And guess what.
18:50
Speaker 4: This whole economy right now is being built upon the
18:53
Speaker 4: idea that there's going to be a tremendous amount of
18:57
Speaker 4: development of AI infrastructure, none of which can happen without debt. No,
19:02
Speaker 4: none of which can happen without massive amounts of debt
19:04
Speaker 4: issuance and investors willing to scoop that up.
19:07
Speaker 2: So it's kind of, in a roundabout way, the whole
19:10
Speaker 2: ball game right now.
19:11
Speaker 3: Taking a look at markets as we head towards the
19:13
Speaker 3: bottom of the hour, The Down now off about half
19:15
Speaker 3: a percent two hundred and thirty three points, SMP down
19:18
Speaker 3: about a third of a percent twenty five points, and
19:20
Speaker 3: the NASDAC off about one hundred and ten points a
19:22
Speaker 3: little less than half a percent, so still in the
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Speaker 3: red for our major indices. Quick Break, Trivia Answer and
19:28
Speaker 3: Wall Street Watch are next.
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19:43
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:49
Speaker 1: Time now for Wall Street Watch, a complete look at
19:53
Speaker 1: what's moving markets so far today right here on the
19:56
Speaker 1: Financial Exchange Radio Network.
19:58
Speaker 5: Traders are back from the Thanksgiving allay and turning the
20:01
Speaker 5: calendar to December, where markets are currently seeing a modest selloff.
20:05
Speaker 5: Right now, the Dow is down by about a half
20:08
Speaker 5: a percent, or two hundred and twenty one points. SMP
20:11
Speaker 5: five hundred is down about a third of a percent,
20:14
Speaker 5: Nasdak down by four tenths of one percent, Russell two
20:17
Speaker 5: thousand is down just over eight tenths of one percent.
20:20
Speaker 5: Tenure treas reeled up seven basis points at four point
20:24
Speaker 5: zero nine to two percent, and crude oil up over
20:27
Speaker 5: one percent higher, trading right above fifty nine dollars. A
20:30
Speaker 5: barrel some in video related news to begin with, where
20:34
Speaker 5: in Video invested two billion dollars in Synopsis Common stock
20:37
Speaker 5: is part of a broad strategic partnership. Shares in the
20:40
Speaker 5: provider of software four chip designers are climbing three percent higher,
20:45
Speaker 5: while in Vidia stock is rising about one percent. Meanwhile,
20:49
Speaker 5: several crypto based stocks, including coinbase, are seeing losses after
20:53
Speaker 5: Bitcoin tubled further to eighty four thousand dollars now. Coinbase
20:57
Speaker 5: shares a down over five percent on the day. Elsewhere,
21:00
Speaker 5: Eli Lilly announced it is lowering the cash prices of
21:04
Speaker 5: its single dose vials of its Blockbuster weight loss drug
21:07
Speaker 5: zep Bound on its direct to consumer platform. ELI stock
21:10
Speaker 5: is down about one percent. Barrick Mining stock is up
21:14
Speaker 5: nearly three percent following reports that the company is exploring
21:17
Speaker 5: spinning off its North American gold Assets into a listed business,
21:21
Speaker 5: and wind Resorts is climbing three percent after Goldman Sachs
21:25
Speaker 5: included Win on its conviction by Lists, saying the company
21:28
Speaker 5: is a best in class Las Vegas business, while improvement
21:31
Speaker 5: in China's Macau region can drive transformative upside. I'm Tucker
21:36
Speaker 5: Silva and that is Wall Street watching. In the previous segment,
21:39
Speaker 5: we asked you the trivia question. According to Fortune five hundred,
21:43
Speaker 5: what is the largest company buy revenue? That would be Walmart.
21:48
Speaker 5: Robert in Saugus masses our winner today taking home my
21:52
Speaker 5: Financial ex Change Show t shirt and we play trivia
21:55
Speaker 5: every day here in the Financial Exchange CEE Complete concest
21:58
Speaker 5: rules At Financial eks Change Show.
22:01
Speaker 3: People are ordering smaller pizzas and fewer toppings. What does
22:07
Speaker 3: that tell us?
22:09
Speaker 2: Probably nothing, I would.
22:11
Speaker 3: Say probably nothing. I will say pizza price have gone up,
22:15
Speaker 3: like it's it's been noticeable now, but the price of
22:19
Speaker 3: everything has gone up and it's been noticeable now.
22:24
Speaker 4: Yeah again, you know it. Probably It probably does indicate
22:30
Speaker 4: the same thing that we are seeing indications of elsewhere,
22:33
Speaker 4: which is around half of Americans are struggling financially and
22:37
Speaker 4: are finding ways to cut back and we're seeing it
22:41
Speaker 4: here with pizza spending. But again, does it indicate anything
22:46
Speaker 4: about where the larger economy is going to go or
22:48
Speaker 4: consumer spending is going to go. I I really have
22:52
Speaker 4: some doubts about that, and I think that largely you
22:57
Speaker 4: probably discount any of it. I will say, you know,
23:00
Speaker 4: of food deals. I went to Chili's for the first
23:04
Speaker 4: time in quite a long time to get some baby
23:07
Speaker 4: back ribs.
23:08
Speaker 2: We had a group of.
23:08
Speaker 4: Fourteen people, so we were all brainstort, like, where can
23:10
Speaker 4: we go with fourteen people including sorry, it was more
23:14
Speaker 4: than that. There was twenty people, including ten kids. Unke
23:17
Speaker 4: short notice on short note, no reservation. Yeah, okay, let's
23:20
Speaker 4: check out Chili's. And wow was it reasonable?
23:24
Speaker 2: Yeah.
23:25
Speaker 4: The biggest complaint they did away with the awesome blossom
23:27
Speaker 4: in like two thousand and six, and everyone on the
23:31
Speaker 4: like a bunch of people. I got to her like, yeah,
23:33
Speaker 4: I'm pumped about having the awesome blossom. And they asked
23:35
Speaker 4: the waitress for it, and she had no idea what
23:37
Speaker 4: we were talking about.
23:38
Speaker 2: But because there was the blooming onion.
23:41
Speaker 4: Yes, yeah, yeah, yeah, So I was pretty impressed by
23:46
Speaker 4: my stopping.
23:46
Speaker 3: I wonder why they did away with it because like
23:49
Speaker 3: the way I look at it, I mean, onions are
23:52
Speaker 3: pardon the pond dirt cheap. Yeah, and it would seem
23:56
Speaker 3: to be something with pretty high margins and that look,
23:58
Speaker 3: if you're selling the thing for you know, ten eleven
24:00
Speaker 3: bucks is anap that onion probably costs you somewhere in
24:04
Speaker 3: the ballpark of you know, if you're buying in bulk
24:06
Speaker 3: the way Chilis does, like ten cents to buy, throw
24:10
Speaker 3: it in a little batter and call it a day.
24:11
Speaker 3: I mean, it's kind of like the Caesar salad of apps.
24:15
Speaker 4: Yeah, folks, want to talk to you about the brand
24:17
Speaker 4: new guide for the month of December from the Armstrong
24:21
Speaker 4: Advisory Group. Again, this is just out today. It's our
24:24
Speaker 4: December guide all about retirement planning for spouses. Now, this
24:28
Speaker 4: is a new one from us and it covers a
24:30
Speaker 4: number of different things. But yeah, most of us head
24:32
Speaker 4: into retirement as a married couple, and depending on your situation,
24:38
Speaker 4: it can really vary how you do your planning. One
24:40
Speaker 4: thing that's really important to keep in mind if you
24:44
Speaker 4: are a married couple sixty five years old, non smokers,
24:49
Speaker 4: there is about a fifty to fifty chance that you're
24:53
Speaker 4: gonna make it to age ninety. That is a lot
24:55
Speaker 4: of planning to be done. That is nearly as much
24:58
Speaker 4: of an retirement as was your working career in many cases,
25:02
Speaker 4: and so all sorts of planning considerations to be done here.
25:06
Speaker 4: They get even more complicated if there's an age gap
25:09
Speaker 4: of five years or more between the two of you.
25:11
Speaker 4: All sorts of things like where am I going to
25:13
Speaker 4: get my health insurance from? What is it going to
25:15
Speaker 4: cost me? Especially if there are not the enhanced subsidies
25:19
Speaker 4: on Obamacare. I've seen this all the time, where one
25:22
Speaker 4: spouse reaches sixty five, they go on Medicare, they retire,
25:26
Speaker 4: and the other one's still working. And you know, there's
25:29
Speaker 4: some irritation there. One spouse is able to retire, the
25:32
Speaker 4: other is not because of medical reasons. But you know,
25:35
Speaker 4: what do you do with social security and pension planning?
25:38
Speaker 4: When should you be filing for Social Security? Depending on
25:42
Speaker 4: that age gap? And who has the larger benefit? If
25:44
Speaker 4: I have a pension, how do I select my survivor benefit?
25:47
Speaker 4: Am I better off taking the lump sum rather than
25:51
Speaker 4: the pension itself? How will my Medicare premiums be determined?
25:55
Speaker 4: How much income am I allowed to have. We cover
25:58
Speaker 4: all of this and a heck of a lot more
26:00
Speaker 4: in our new guide.
26:01
Speaker 2: Again.
26:02
Speaker 4: It's the free guide from the Armstrong Advisory Group called
26:05
Speaker 4: Retirement Planning for Spouses. You can get it by calling
26:08
Speaker 4: eight hundred three nine three for zero zero one. It's
26:12
Speaker 4: really useful reading. If you guys are within a decade
26:15
Speaker 4: of that retirement date. You can check it out at
26:18
Speaker 4: Armstrong Advisory dot com. Request your copy there it's free,
26:22
Speaker 4: or you can call us at eight hundred three nine
26:24
Speaker 4: three for zero zero one.
26:26
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:29
Speaker 1: registered investment advisor. Nothing in the ad or in any
26:31
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
26:34
Speaker 1: your own financial, tax into state planning advisors before making
26:37
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
26:40
Speaker 1: advisory services.
26:42
Speaker 3: Piece here from us The Financial Times, Yeah, it's the
26:46
Speaker 3: Financial Times, a full bown crisis. Americans brace for a
26:49
Speaker 3: surge in healthcare cost. So basically, we've got twenty two
26:53
Speaker 3: million Americans that are enrolled in insurance under the Affordable
26:59
Speaker 3: Care that are going to see the subsidies for those
27:03
Speaker 3: plans gone next year. Basically unless there's some action very
27:07
Speaker 3: very quickly.
27:08
Speaker 4: That twenty two million number that was the number that
27:10
Speaker 4: will be impacted by this or is that the total
27:12
Speaker 4: number of people on.
27:14
Speaker 3: That was the number that I that said this was
27:16
Speaker 3: related to tax credits for the plans.
27:18
Speaker 4: I think there's I was actually surprised by the data
27:21
Speaker 4: that I saw showed forty five million total Americans on
27:24
Speaker 4: the Affordable Care Act that it probably includes families, so children,
27:28
Speaker 4: and then yeah, about half of them receive seeing subsidies
27:32
Speaker 4: that may be disappearing this.
27:35
Speaker 2: Yeah.
27:35
Speaker 4: They give the example of a sixty four year old
27:38
Speaker 4: PR consultant who's currently paying four hundred dollars a month
27:41
Speaker 4: their plan would jump to nearly two thousand dollars a
27:44
Speaker 4: month should he renew that existing plan and see those
27:48
Speaker 4: credits disappear. Hence why this is going to be a
27:51
Speaker 4: hotly debated item in the How many days of Congress
27:55
Speaker 4: actually do work this month, like six, I don't know,
27:58
Speaker 4: but basically many.
28:00
Speaker 3: Basically there's the deadline to select a plan is December fifteenth,
28:05
Speaker 3: which quite honestly means that you can't fix this by then, right.
28:08
Speaker 4: You're not going to know how much you are going well,
28:10
Speaker 4: you're going to have a worst case scenario of what
28:12
Speaker 4: you would pay for your health insurance. Yeah by December fifteenth,
28:16
Speaker 4: and you might get some help if Congress passes something
28:19
Speaker 4: on this, But there are you know, the original subsidies
28:22
Speaker 4: were designed to allow anyone with income of four hundred
28:26
Speaker 4: percent the poverty level to get the subsidies. That was
28:29
Speaker 4: dramatically expanded during COVID, and that has since lapsed. So
28:33
Speaker 4: that is the question is do they do something additional here?
28:36
Speaker 4: And again that number right, forty five, that's more than
28:39
Speaker 4: ten percent of Americans on Affordable Care Act health insurance
28:44
Speaker 4: of some sort.
28:45
Speaker 2: Add that on.
28:45
Speaker 4: There's another sixty seven million Americans on Medicare. I don't
28:48
Speaker 4: know how many are on Medicaid and what the overlap
28:51
Speaker 4: is there, but that is a I guess it's a
28:54
Speaker 4: larger portion that I than I realized of Americans who
28:57
Speaker 4: are not getting their health insurance from their employer. Right like,
29:02
Speaker 4: between those between those three Medicare, Medicaid and Affordable Care Act,
29:06
Speaker 4: that's approaching you know, a third to a half of
29:13
Speaker 4: all Americans who do not get their health insurance from
29:17
Speaker 4: their employers. And this is I guess, I guess my
29:20
Speaker 4: point would be it's a bigger issue for more Americans
29:23
Speaker 4: than I realized. I don't I don't have it. I
29:26
Speaker 4: don't have a good fix. There's no fix for any
29:29
Speaker 4: of this. Yeah, it's just the only question is are
29:33
Speaker 4: we as taxpayers willing to subsidize the cost of this
29:37
Speaker 4: insurance more?
29:38
Speaker 2: There's there's no fix for any of this.
29:41
Speaker 4: Health Care in America is very expensive unless you want
29:43
Speaker 4: to significantly worsen the quality of care.
29:47
Speaker 2: There's there's no good fix.
29:49
Speaker 3: No, there there And look, you can't fix this for
29:53
Speaker 3: twenty twenty six right now, Like, I'll be honest, there
29:57
Speaker 3: is no way to fix this, which like the cost
30:01
Speaker 3: of overall care or No, there's no way to fix
30:04
Speaker 3: these subsidies now. People have already made their.
30:08
Speaker 2: Purchasing decisions on these. Yeah.
30:10
Speaker 3: Like let's say that you're looking at this plan and
30:14
Speaker 3: you say, okay, it's it's nineteen hundred and sixty.
30:16
Speaker 2: Five dollars a month. I can't afford that.
30:20
Speaker 3: If Congress passes something this week, you can maybe figure
30:27
Speaker 3: it out before that twelve fifteen deadline. Mike, is Congress
30:31
Speaker 3: is gonna pass anything this week? Now, I'm gonna go
30:34
Speaker 3: with a hard no.
30:36
Speaker 2: No, they're not.
30:37
Speaker 3: And so you like someone's not going to make a
30:41
Speaker 3: decision being like, well, maybe I'll be reimbursed for this later.
30:45
Speaker 3: You don't make that decision with like a fifteen hundred
30:47
Speaker 3: dollars a month gap that you're trying to fill. You
30:50
Speaker 3: might make that if there's like a twenty dollars a
30:52
Speaker 3: month gap that you're trying to fill, But the purchasing
30:54
Speaker 3: decisions are already made, And so what you're going to
30:57
Speaker 3: end up with on this is, Hey, you're either going
31:01
Speaker 3: to have a bunch of people who go without insurance
31:05
Speaker 3: next year and everything that that entails, or you're going
31:10
Speaker 3: to have a bunch of people who spend the extra
31:13
Speaker 3: money on the insurance and then do not have that
31:16
Speaker 3: money to spend on a monthly basis elsewhere in the economy.
31:21
Speaker 3: Neither of those is really great. Now, I'm not saying like, hey,
31:25
Speaker 3: you should blanket, you know, extend this and do this
31:28
Speaker 3: and that. All I'm saying is this is where you
31:30
Speaker 3: are heading. And it's because we haven't done anything to
31:33
Speaker 3: fix this while we've known it's been coming for an
31:36
Speaker 3: extended period of time.
31:38
Speaker 2: Right, So.
31:40
Speaker 3: Ultimately we need to get to a point where we
31:43
Speaker 3: actually take a look and you know, decide what we
31:46
Speaker 3: can do to try to fix the US healthcare system,
31:49
Speaker 3: because I think we can all.
31:51
Speaker 2: Agree that, like what we're doing right now really sucks.
31:57
Speaker 2: Like it's does anyone have an option model?
32:00
Speaker 4: Though, Like you look around the world, and I don't
32:03
Speaker 4: know that there is a perfect model for health care delivery.
32:07
Speaker 3: So it's not about having a perfect model for like
32:10
Speaker 3: you're never going to have something that's perfect. But I
32:15
Speaker 3: mean again, like let's even just look at like the
32:17
Speaker 3: basic way that you sign up for health care, which
32:18
Speaker 3: you mentioned, Mike, there is no reason why health insurance
32:22
Speaker 3: should be tied to your employment. The only reason it is,
32:26
Speaker 3: by the way, for anyone listening who wants to know,
32:30
Speaker 3: is because in World War Two, the federal government said, hey,
32:33
Speaker 3: we're gonna cap wages at a certain level in order to,
32:39
Speaker 3: you know, try to manage inflation that was raging at
32:41
Speaker 3: the time. And in response, companies said, okay, you're capping
32:45
Speaker 3: our wages. Great, We're gonna start offering health insurance as
32:47
Speaker 3: a perk because we can't pay you more, but we
32:50
Speaker 3: can cover your health insurance. And basically, US health insurance
32:53
Speaker 3: has been attached to your job ever since. There's no
32:57
Speaker 3: reason why your ability to be in sure should be
33:01
Speaker 3: tied to your employment. Like sure, it could be a
33:06
Speaker 3: perk that your employer offers if it's better than you know,
33:09
Speaker 3: whatever else is out there. But there's no reason why
33:14
Speaker 3: this should be what we like do as default. It's
33:19
Speaker 3: just what it's been since World War Two because of
33:21
Speaker 3: you know, kind of what became normalized then. But just
33:24
Speaker 3: because something's normalized economically doesn't mean yes, like let's let's
33:28
Speaker 3: continue doing this. And so when people don't have any
33:32
Speaker 3: incentive to shop around on their insurance, obviously insurance, then
33:36
Speaker 3: don't really have a ton of incentive to shop around
33:37
Speaker 3: on things like networks and drug coverage and this and that,
33:40
Speaker 3: and so you don't have real competition. That happens because
33:44
Speaker 3: people don't view it as their responsibility to shop around
33:47
Speaker 3: for insurance. And the best pricing companies try to, but
33:51
Speaker 3: they try to do it in terms of, hey, how
33:53
Speaker 3: do I minimize the cost while providing this benefit, not
33:57
Speaker 3: what's best for my employe. Well, ye's necessarily as far
34:01
Speaker 3: as the best benefit package.
34:03
Speaker 4: Last item of note on this healthcare thing, and then
34:05
Speaker 4: I know we need to take a break. The Affordable
34:07
Speaker 4: Care Act is very likely going to be left with
34:10
Speaker 4: a bunch of very sick people. It already kind of was,
34:12
Speaker 4: but which is going to be maror pricing even worse.
34:14
Speaker 4: If you're healthy and your premium surge four hundred percent,
34:18
Speaker 4: you're just going to go without insurance, and if you're sick,
34:21
Speaker 4: you're going to pay whatever you need to for the
34:23
Speaker 4: health insurance, which is going to then, like you said,
34:25
Speaker 4: make the cost of insurance worse next year.
34:27
Speaker 2: Which is why.
34:28
Speaker 3: The way insurance works is that in any risk pool,
34:32
Speaker 3: the people that are not actively experiencing the problem cover
34:36
Speaker 3: the cost of those who do. I pay my homeowners
34:38
Speaker 3: insurance each year. It's several thousand dollars. Not because I
34:42
Speaker 3: get a plaque or something like that that I put
34:44
Speaker 3: on my wall, but because I know that if something
34:48
Speaker 3: ever happens to my house where I need that coverage,
34:52
Speaker 3: everyone else who's not experiencing what I'm experiencing is able to,
34:56
Speaker 3: like those premiums, pitch in to cover that cost. It's
34:59
Speaker 3: just how it works. Quick break here when we come
35:01
Speaker 3: back at stack Roulette.
35:03
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35:06
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36:11
Speaker 2: Mike, what do you got for me?
36:12
Speaker 4: For stack Roulette opinion piece from Bloomberg. We need to
36:17
Speaker 4: uberize the power grid for AI.
36:20
Speaker 2: What does that mean.
36:21
Speaker 4: I don't think it's going to get you the job done,
36:23
Speaker 4: but I think it has to do with two things.
36:25
Speaker 2: One would be surge pricing.
36:27
Speaker 4: Two would be better technology in homes to control peak demand.
36:33
Speaker 4: And they point out one example here where the Mid
36:37
Speaker 4: Continent Independent Operator System running the second largest US grid.
36:40
Speaker 4: They report that the total demand has only increased by
36:44
Speaker 4: one point eight percent over the last eleven years, but
36:47
Speaker 4: that peak demand did rise by six percent. So that's
36:52
Speaker 4: what matters for the grid is they have to deal
36:54
Speaker 4: with the peak demand, not the overall demand. They need to,
36:57
Speaker 4: you know, because of the way the power generation works,
36:59
Speaker 4: they have to focus on that peak demand number. And
37:01
Speaker 4: so if you can employ better technology and homes, offices
37:04
Speaker 4: and data centers hypothetically to spread out peak demand, rely
37:10
Speaker 4: more on other technologies than their argument is, you don't
37:13
Speaker 4: need to invest quite as much in the power grid.
37:16
Speaker 2: I'm not sure. My answer is that you should build more. Yeah.
37:20
Speaker 2: I think build more.
37:21
Speaker 3: Generation, build more transmission, and then we don't have to
37:24
Speaker 3: deal with rationing electricity.
37:26
Speaker 4: Yeah, because that's effectively what you're talking about here, yes,
37:29
Speaker 4: is rationing electricity. And you know, I've, by the way,
37:32
Speaker 4: tested out the idea of that smart thermostat that when
37:35
Speaker 4: peak demand is hitting, you know, heats up my home
37:38
Speaker 4: automatically in extra five degrees. And my answer is that
37:41
Speaker 4: solution kind of sucks, and you'd have to pay me
37:43
Speaker 4: a heck of a lot more for me to be
37:45
Speaker 4: willing to do it again.
37:46
Speaker 2: Don't like it.
37:47
Speaker 3: Just let's make it easier to build more capacity, and
37:51
Speaker 3: I think we can get there. Taking a look at
37:53
Speaker 3: markets right now, trying to rally off the lows of
37:56
Speaker 3: the day, Dow off two hundred eight points, s ANDP
37:58
Speaker 3: down sixteen, AASDA down forty nine, so we got a
38:01
Speaker 3: little bit of a rally happening on the tech side
38:03
Speaker 3: to try to drive things back into the green. We'll
38:06
Speaker 3: just have to see if we get there. We're done
38:08
Speaker 3: for the day. Back at it tomorrow as we continue
38:12
Speaker 3: through the first week of December,