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Housing Is Cracking as Rates Surge and Costs Climb · The Financial Exchange Show

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  Speaker 1: making a donation today. This is the Financial Exchange with
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  Speaker 1: Chuck Zada and Mike Armstrong.
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  Speaker 2: It's Chuck, it is Mike, and it's Tucker two, all
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  Speaker 2: three of us here. And as we kick things off today,
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  Speaker 2: we've got stocks not really doing much of anything in
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  Speaker 2: the aggregate right now.
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  Speaker 3: The Dow is off.
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  Speaker 2: Two hundred and six points, the S and P is
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  Speaker 2: up to the Nasdaq composits up forty nine, So just
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  Speaker 2: kind of treading water. Nothing too exciting going on in
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  Speaker 2: stockworld bond world. We do have something interesting. The thirty
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  Speaker 2: year treasury just cross five percent again and the tenures
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  Speaker 2: up another four point two base points to four four
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  Speaker 2: to two, and so this is going to put further
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  Speaker 2: pressure on mortgage rates, which closed on Friday at six four,
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  Speaker 2: probably getting back close to six fifty somewhere in that ballpark,
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  Speaker 2: depending on how the rest of.
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  Speaker 3: The day goes. Here.
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  Speaker 2: The news on Horn moves a whole bunch of chatter
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  Speaker 2: about different things from either side.
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  Speaker 3: It's been kind of a wild morning. Actually.
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  Speaker 2: At around six twenty, Iran's Fars News Network, which is
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  Speaker 2: state affiliated media, said that a US destroyer had been
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  Speaker 2: struck by two missiles. The United States denied that and
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  Speaker 2: subsequently indicated that there were two destroyers now operating within
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  Speaker 2: the Persian Gulf after transiting overnight and letting a couple.
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  Speaker 3: Of ships out.
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  Speaker 2: There also have been a couple of different civilian ships
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  Speaker 2: that have been struck overnight, and as we sit right now,
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  Speaker 2: the UAE has indicated that their missile defense systems are
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  Speaker 2: active and locals are reporting explosions, but no one really
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  Speaker 2: knows what's going on because we're not really getting a
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  Speaker 2: ton of informations. So I think the big thing, the
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  Speaker 2: strait largely remains closed. We'll see if transit picks up,
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  Speaker 2: but to this point no meaningful uptick in transit.
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  Speaker 3: Did you just talk about South Korea? The South Korean
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  Speaker 3: tanker that got hit.
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  Speaker 4: Yes, South Korean media has now confirmed it. So the
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  Speaker 4: South Korean Foreign Ministry confirmed that a general cargo vessel
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  Speaker 4: was anchored near the UAE and quote caught fire after
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  Speaker 4: an explosion.
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  Speaker 2: And it was a UA tanker that was empty that
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  Speaker 2: was struck as well overnight with two Iranian drones. So again,
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  Speaker 2: this week is kind of a pivotal one. Things are
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  Speaker 2: either gonna heat up militarily again or I think something
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  Speaker 2: starts to you know, kind of ease meaningfully, just because
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  Speaker 2: I don't think you can continue to have this ramp
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  Speaker 2: up of rhetoric and you know, and poking and prodding
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  Speaker 2: actions from each side without eventually something escalating further.
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  Speaker 3: And it's a very unstable equilibrium.
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  Speaker 2: And so it's either you got to figure some way
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  Speaker 2: to get this thing moving or it feels like things
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  Speaker 2: are going to escalate. Is kind of where this week
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  Speaker 2: is right now, let's talk a little bit about the FED. Well,
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  Speaker 2: actually I didn't go through the rest of markets. Yeah,
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  Speaker 2: so let me finish wrapping things up there. Dollar index
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  Speaker 2: is up point one nine ninety eight nineteen, gold is
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  Speaker 2: off sixty seven to thirty an ounce to fift forty
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  Speaker 2: five seventy seven, and crude oil West Texts Intermediate up
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  Speaker 2: a dollar thirty five. Brent crewed up four dollars a barrel,
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  Speaker 2: so you've got some renewed upward pressure on oil prices.
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  Speaker 2: Triple A national average for gas is above four to
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  Speaker 2: forty five a gallon. Now diesel is within seventeen cents
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  Speaker 2: of the twenty twenty two high, and barring anything shocking,
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  Speaker 2: diesel's got a pretty good chance of hitting that high
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  Speaker 2: sometime in the next week to ten days.
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  Speaker 4: So last week, Chuck, we had j Powell's final press
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  Speaker 4: conference as.
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  Speaker 3: Chairman of the Federal Reserve. We also got the news
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  Speaker 3: from him that.
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  Speaker 4: He's going to be staying on in his role as governor,
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  Speaker 4: which I did not think was likely even very recently.
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  Speaker 3: And they are facing this.
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  Speaker 4: Well, this problem with risk of higher inflation, and they've
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  Speaker 4: been dealing with that problem of higher inflation since twenty
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  Speaker 4: twenty two, never quite getting back to their two percent target.
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  Speaker 4: With a new chair coming in, I guess I have
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  Speaker 4: a multitude of questions here. I mean, one of which
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  Speaker 4: is how high do oil prices need to get before
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  Speaker 4: you start being more worried about a growth problem in
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  Speaker 4: the US than you do an inflation problem. But two,
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  Speaker 4: and this is the bigger one. Kevin worsh has pretty
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  Speaker 4: clearly wanted to be on a path of lowering interest rates.
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  Speaker 4: The Fed never has gotten back to their two percent target.
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  Speaker 4: They keep saying that they have a target. Is it
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  Speaker 4: even still meaningful anymore to have a two percent inflation
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  Speaker 4: target at this point given they don't seem fundamentally serious
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  Speaker 4: about getting.
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  Speaker 3: Back to it.
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  Speaker 2: Here's the thing I don't think I agree with you.
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  Speaker 2: You can't kill the two percent inflation target before you
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  Speaker 2: get there though I.
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  Speaker 4: Think you shouldn't, but I have no evidence that Kevin
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  Speaker 4: Worsh is going to follow your thinking on that.
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  Speaker 2: It's one where And look, here's ultimately how this ends
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  Speaker 2: up working is if with anyone to talk to anyone
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  Speaker 2: who has lived in Brazil, talk to anyone who's lived
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  Speaker 2: in Argentina, talk to anyone wh's lived in South Africa, Turkey,
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  Speaker 2: places that have dealt with monetary messiness, policy procedure that
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  Speaker 2: has gone awry. What they'll tell you is, look, ultimately,
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  Speaker 2: if the central bank decides to start cutting or changing
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  Speaker 2: policy more dubbishly while things are still too hot, it
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  Speaker 2: has the opposite effect that you intend yeh, because it's
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  Speaker 2: basically saying, Okay, we're gonna run the economy hot, and
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  Speaker 2: the long end of the yield curve ten year bonds,
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  Speaker 2: thirty year bonds, they blow out top side because the
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  Speaker 2: bond markets is fine. You're not serious about this great,
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  Speaker 2: We don't want to own the long term bonds. Because
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  Speaker 2: if you think of it this way, if you buy
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  Speaker 2: a long term bond in the US right now, a
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  Speaker 2: thirty year treasury, the US government gives you five percent
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  Speaker 2: a year for the next thirty years and you say,
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  Speaker 2: remember the people who buy those and just hold them.
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  Speaker 2: It's mostly insurance companies and things like that.
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  Speaker 3: Big institutions, not just insurance companies.
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  Speaker 2: But yeah, yeah, like pension plans, like there aren't very
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  Speaker 2: many individuals who just are scouring, you know, the brokerage
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  Speaker 2: sites for like, hey, what's the best thirty.
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  Speaker 3: Year treasury bond? And it's just not how it works.
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  Speaker 2: So you've got these liabilities that you're pricing out thirty
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  Speaker 2: years into the future, and as an insurer, you're saying, Okay,
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  Speaker 2: here's what inflation's gonna be, here's you know, the policies
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  Speaker 2: that I have, Here's what I need to hedge for.
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  Speaker 2: If the central bank says, hey, we don't care about
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  Speaker 2: inflation in the short term, you, as that buyer, immediately say, well,
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  Speaker 2: I got to get paid something else otherwise I might
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  Speaker 2: be underwater in thirty years. And so yeah, five isn't
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  Speaker 2: gonna cut it. You gotta pay me five and a
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  Speaker 2: half yep in order to compensate me properly for that risk.
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  Speaker 2: And so this is the thing where ultimately, I here's
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  Speaker 2: the thing about you know, everyone's really skeptical that warsh
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  Speaker 2: is going to do a good job. And I'm not everyone,
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  Speaker 2: but like you're getting this church back that he's going
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  Speaker 2: to be just a totally a flunky, a lackey, Like
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  Speaker 2: there's all kinds of words that we can use for
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  Speaker 2: the Trump administration. He may be, he may not. I
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  Speaker 2: don't know, because he hasn't done anything yet. What I
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  Speaker 2: do know is that Scott Bessen, in the year leading
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  Speaker 2: up to him being appointed Treasury Secretary, talked all about, hey,
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  Speaker 2: Janet Yelling's selling this mix of bonds, like how could
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  Speaker 2: she do this?
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  Speaker 3: Blah blah blah. It's wrong.
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  Speaker 4: It's very critical of the members of the Bid administration
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  Speaker 4: in order to get considered for the job of Treasury secretary.
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  Speaker 2: And Besson took the job and basically hasn't made a
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  Speaker 2: shift in terms of bond isshuins from what Yellen was doing.
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  Speaker 2: It's the exact same or within sniffing distance of it.
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  Speaker 2: So part of this, I'm a big believer that, hey,
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  Speaker 2: a lot of people, you know, when you're camp paigning
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  Speaker 2: for any job, A lot of people and I'm not
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  Speaker 2: saying this is right, but a lot of people today
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  Speaker 2: like you say what you need to do in order
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  Speaker 2: to get the job, and when you then get into
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  Speaker 2: the seat, especially a seat like you know, chair of
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  Speaker 2: the Federal Reserve. You understand the gravity of the situation.
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  Speaker 2: And just like Scott bessen didn't just upend the entire
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  Speaker 2: model of Hey, here's the issuance that we're gonna do
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  Speaker 2: for US Treasury bonds. I suspect that Kevin warsh is
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  Speaker 2: not going to want his legacy to be the dude
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  Speaker 2: that you know, brought on the second peak in inflation
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  Speaker 2: in the twenty twenties.
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  Speaker 3: I tend to agree one caveat that I'll throw out here.
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  Speaker 4: Uh, President Trump was not criticizing the intricacies of bond
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  Speaker 4: issuance by the Biden administration, or at least not heavily.
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  Speaker 4: H He has been for the last several years criticizing
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  Speaker 4: the Federal Reserve directly and calling specific for lower interest rates.
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  Speaker 4: And I view those two as different, Right, Scott Bessont
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  Speaker 4: found something to criticize about the bid administration that he
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  Speaker 4: took issue with.
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  Speaker 3: Here.
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  Speaker 4: Kevin Walsh has you know, stated publicly that he is
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  Speaker 4: in agreement with the President about where interest rates should go.
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  Speaker 4: And the President has been much more public about that
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  Speaker 4: criticism than what best and flatched onto.
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  Speaker 3: So again fair, you know, we will have to wait
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  Speaker 3: and see. I am with you.
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  Speaker 4: Judge people by their actions, not by their words, and
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  Speaker 4: Worsh has not had time to take any actions to
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  Speaker 4: this point. But I do very much fear the move
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  Speaker 4: away from a two percent inflation target because already as
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  Speaker 4: it is, when I ask people, I'm not talking about
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  Speaker 4: trained economists. I'm talking about retirees and the general public
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  Speaker 4: that I speak to. And I asked them, hey, you know,
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  Speaker 4: if you had to bet, will inflation be hotter.
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  Speaker 3: Than the last decade or cooler than the last decade?
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  Speaker 4: The answer is almost universally hotter now probably not actually
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  Speaker 4: thinking about the measurement of the last decade includes twenty
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  Speaker 4: twenty two when we saw nine percent inflation. But when
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  Speaker 4: you ask that question, it's hotter. I think inflation expectations
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  Speaker 4: are substantially hotter than they were for the last decade,
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  Speaker 4: and that can be a problem for the FED.
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  Speaker 2: Let's take a quick break. When we come back. I
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  Speaker 2: got a couple of housing pieces I want to cover.
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  Speaker 2: We've also got trivia next.
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  Speaker 5: Time for trivia here on the Financial Exchange. On this day,
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  Speaker 5: in nineteen seventy nine, the United Kingdom elected their first
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• 12:45
  Speaker 3: A little bit of news here from the UAE.
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  Speaker 2: The UAE Ministry of Defense has now confirmed that they
• 12:54
  Speaker 2: detected four cruise missiles launched them from Iran and the
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  Speaker 2: sounds heard by residents, three out of the four being intercepted,
• 13:01
  Speaker 2: while another one splashed down off the coast. This is
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  Speaker 2: in turn, probably what's pressuring stocks to the tune of
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  Speaker 2: about a half percent fall in the last five or
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  Speaker 2: ten minutes.
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  Speaker 3: Now.
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  Speaker 4: Sorry to be clear, this was not a strike on
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  Speaker 4: in a UAE flight vessel. This was a strike on
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  Speaker 4: the United Air Emirates. It's untempted strike.
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  Speaker 2: It's unclear exactly where these were intercepted and what the
• 13:22
  Speaker 2: targets are. We don't know specifically, but it does appear
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  Speaker 2: that they were heading towards the UAE the country, not
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  Speaker 2: necessarily vessels.
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  Speaker 4: And I did say that they had put residents under
• 13:35
  Speaker 4: you know, strike warnings, so.
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  Speaker 2: That they did that earlier today, but that turned out
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  Speaker 2: to not be a an actual attack. In this case,
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  Speaker 2: it does appear that the UAE has confirmed that missiles
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  Speaker 2: were fired at them from Iran.
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  Speaker 3: It's felt for the last.
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  Speaker 2: Week or so that the UA and Iran are not
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  Speaker 2: in a good spot right now, is a nice.
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  Speaker 3: Way of putting it.
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  Speaker 2: Even if everything goes well and improves here over the
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  Speaker 2: coming months. It would not surprise me if the two
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  Speaker 2: of them have their own little affair over the next
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  Speaker 2: few years, just because there's no love loss between the.
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  Speaker 3: Two of them.
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  Speaker 2: Right now, let's talk a little bit about housing again.
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  Speaker 2: What will update you as we know more, but just
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  Speaker 2: again something relevant and market moving there. First from the
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  Speaker 2: Wall Street Journal, high housing costs are pushing foreclosures to
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  Speaker 2: a six year high. Homes with foreclosure filings twenty six
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  Speaker 2: percent in the first quarter.
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  Speaker 3: Here's the thing.
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  Speaker 2: Housing foreclosures are not a problem for the broad US
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  Speaker 2: economy because they are coming off such a low level
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  Speaker 2: that this is not something that is problematic in any way.
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  Speaker 3: Shape or form.
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  Speaker 2: It's not to say that certain families aren't having trouble
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  Speaker 2: paying these higher housing costs. I understand that it's tough
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  Speaker 2: for you know, families that are out there dealing with these,
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  Speaker 2: but when we talk about foreclosures becoming a problem, it's
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  Speaker 2: not something that has impacting the US economy in any way,
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  Speaker 2: shape or formulat.
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  Speaker 4: So the last quarter that the Saint Louis FED has
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  Speaker 4: data on was the fourth quarter, so we'll get an
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  Speaker 4: update soon on this. But the rate of delinquency on
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  Speaker 4: single family residential mortgages was one point seven to eight
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  Speaker 4: percent in that fourth quarter if it hit. It was
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  Speaker 4: about the same in the first quarter of last year.
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  Speaker 4: So a twenty five percent jump on that right might
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  Speaker 4: bring you to the low twos. We did not get
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  Speaker 4: below two point three four percent delinquency rate on mortgages
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  Speaker 4: at any point during the twenty ten decade. Yes, so
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  Speaker 4: if we start pushing delinquency rates over three percent, we've
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  Speaker 4: got a problem.
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  Speaker 3: They like, again, not a problem for the you.
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  Speaker 4: Know, the state of banks or anything like that in
• 15:45
  Speaker 4: my view, but you know that that is a meaningful
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  Speaker 4: problem because we didn't really spend much time above three
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  Speaker 4: percent anytime other than the Great Financial Crisis. But we
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  Speaker 4: are not in problem territory with mortgages. So one don't
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  Speaker 4: plan on getting a whole bunch of deals on foreclosed
• 16:01
  Speaker 4: homes and to don't worry about this in the context
• 16:04
  Speaker 4: the greater economy.
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  Speaker 3: No, I would agree.
• 16:07
  Speaker 2: Another piece here that I do think is interesting for
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  Speaker 2: a broader discussion. Taxes on second homes are springing up
• 16:13
  Speaker 2: across America, and so you've got different local governments that
• 16:20
  Speaker 2: are coming out and saying, hey, if you have homes
• 16:24
  Speaker 2: that are not primary residences. I don't speak French. What
• 16:31
  Speaker 2: does that even mean in French? I don't speak French.
• 16:35
  Speaker 2: Ped p I E d ar t e r r
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  Speaker 2: e I. I don't know what it means in French.
• 16:41
  Speaker 2: Seem to be I'm guessing terror is something about like
• 16:43
  Speaker 2: land or earth, and ped is probably like usually that's
• 16:47
  Speaker 2: like foot in the Romance languages, so like foot of
• 16:50
  Speaker 2: the earth.
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  Speaker 5: I don't know, smaller second home or studio, foot.
• 16:56
  Speaker 4: And mouths, foot to the earth, foot to earth or
• 16:58
  Speaker 4: foot on the ground. Okay, it's the literal translation, but
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  Speaker 4: it refers to yes, an apartment in New York City
• 17:04
  Speaker 4: pretty much.
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  Speaker 3: Okay, so yeah, so you've got you got New York City.
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  Speaker 2: New York City is planning on taxing an additional property
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  Speaker 2: tax for second homes worth five million or more.
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  Speaker 4: Rhode Island is considering a Taylor Swift tax on homes
• 17:21
  Speaker 4: over one million dollars, and New Hampshire recently voted down,
• 17:24
  Speaker 4: but it did make it to a vote a tax
• 17:26
  Speaker 4: on second homes worth over half a million dollars. So
• 17:30
  Speaker 4: many different places are testing this stuff out.
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  Speaker 3: Guys, this is dumb.
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  Speaker 2: If you think housing is too expensive for the people
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  Speaker 2: in your jurisdiction to buy it, build more. That's the
• 17:44
  Speaker 2: like again, if you want to tax it. Finally, here's
• 17:46
  Speaker 2: the impact that it'll have. It will make that house
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  Speaker 2: more affordable because in order for people to be able
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  Speaker 2: to buy it and pay the taxes, the headline price
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  Speaker 2: will have to come down. Yeah, like that, that is
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  Speaker 2: something that will happen.
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  Speaker 4: So, Chuck, you owned home in Summerville. Yes, and this
• 18:02
  Speaker 4: is exactly like. This is not a new idea. I
• 18:04
  Speaker 4: owned one too in Summerville. You got around a thirty
• 18:08
  Speaker 4: percent property tax discount.
• 18:10
  Speaker 2: It was a flat value. It was a two hundred
• 18:11
  Speaker 2: and fifty thousand abatement on the valuation.
• 18:14
  Speaker 3: Was it. Yeah, I don't recall it.
• 18:16
  Speaker 4: But anyway, for living in your home in Somerville, for
• 18:19
  Speaker 4: being for making that your primary residence, you got, you
• 18:22
  Speaker 4: know what, worked out to be a pretty substantial property
• 18:25
  Speaker 4: tax cut for doing so. So plenty of places have
• 18:28
  Speaker 4: tested this out. That would be another way of getting
• 18:30
  Speaker 4: at the exact same thing, you know, saying, hey, primary residences,
• 18:34
  Speaker 4: you do this. You know New York is calling it
• 18:35
  Speaker 4: your second home tax. It's not a new concept to
• 18:38
  Speaker 4: build more houses, but it's not going to fix the
• 18:40
  Speaker 4: housing problem.
• 18:40
  Speaker 2: Build you want cheaper housing, build more housing. You want
• 18:44
  Speaker 2: evidence of this, look at Austin, Texas during the big
• 18:48
  Speaker 2: you know twenty twenty one twenty two relocation frenzy. Austin
• 18:53
  Speaker 2: Texas said, well, it didn't say it because the city
• 18:55
  Speaker 2: can't speak, but the people in Austin, Texas said, hey,
• 18:58
  Speaker 2: we got to build way more housing, and they did,
• 19:00
  Speaker 2: and rents have been falling ever since because oh gee,
• 19:04
  Speaker 2: when you actually supply the needed housing on the market,
• 19:07
  Speaker 2: rents end up falling.
• 19:08
  Speaker 3: I don't one difference here.
• 19:10
  Speaker 4: I don't see this as a proposal to make housing
• 19:13
  Speaker 4: more affordable.
• 19:14
  Speaker 3: Which is why it's well, no, I think it's mainly
• 19:16
  Speaker 3: this will No.
• 19:17
  Speaker 4: I think it's mainly a hey that we want to
• 19:19
  Speaker 4: tax the rich and we need to, you know, figure
• 19:21
  Speaker 4: out how to do that, and so this is our
• 19:23
  Speaker 4: way of doing that, rather than hey, this is going.
• 19:25
  Speaker 3: To solve our housing affordability problems. Take a quick break.
• 19:29
  Speaker 3: I want to discuss this more when we return.
• 19:40
  Speaker 1: Bringing the latest financial news straight to your radio every day,
• 19:44
  Speaker 1: it's the Financial Exchange on the Financial Exchange Radio Network.
• 19:50
  Speaker 1: Tell you out whoa street watch treking, the stocks, the
• 19:54
  Speaker 1: data and the headlines driving markets so far today right
• 19:57
  Speaker 1: here on the financial.
• 19:58
  Speaker 5: Exchange turned lower, with oil prices jumping higher as a
• 20:03
  Speaker 5: result of increased military tensions with the strata for moves,
• 20:08
  Speaker 5: specifically with the developing situation involving.
• 20:12
  Speaker 3: Iran and the UAE.
• 20:13
  Speaker 5: More than that coming up here right now, the Dow
• 20:17
  Speaker 5: is down eight tenths of a percent or four one
• 20:19
  Speaker 5: hundred and one points, SMP five hundred down over a
• 20:22
  Speaker 5: third of a percent, NASDAC down about a third of
• 20:25
  Speaker 5: a percent as well. Russell two thousand is up about
• 20:27
  Speaker 5: a tenth of percent, and Your Treasure reeled up five
• 20:30
  Speaker 5: basis points at four point four to three six percent,
• 20:33
  Speaker 5: and oil jumping nearly four percent higher training at one
• 20:36
  Speaker 5: hundred and five dollars a barrel. Aside from around the
• 20:39
  Speaker 5: big development over the weekend came from game Stop after
• 20:42
  Speaker 5: CEO Ryan Cohen made an unsolicited offer to buy eBay
• 20:47
  Speaker 5: for about fifty six billion dollars. Cohen told The Wall
• 20:51
  Speaker 5: Street Journal that putting his video game retailer and eBay
• 20:54
  Speaker 5: under one roof could create opportunities to cut costs and
• 20:58
  Speaker 5: improve earnings. eBay up by four percent while game Stop
• 21:01
  Speaker 5: is down by about six percent. Me Myles shares in
• 21:05
  Speaker 5: Norwegian Cruise Line dropping eight percent after the company cut
• 21:08
  Speaker 5: its outlook, citing higher fuel prices and also said consumers
• 21:12
  Speaker 5: are rethinking travel plans. Elsewhere, Tyson Food posted better than
• 21:16
  Speaker 5: expected quarterly results but said soaring cattle prices weight on
• 21:19
  Speaker 5: its results. And after today's closing bell, we'll see earnings
• 21:23
  Speaker 5: from Paramount Sky Dance and Pallenteer. I'm Tucker Silvan. That
• 21:27
  Speaker 5: is Wall Street Watch. On the previous segment, we asked
• 21:29
  Speaker 5: you the trivia question, who is the UK's first female
• 21:32
  Speaker 5: prime Minister? That would be Margaret Thatcher in Our winner
• 21:35
  Speaker 5: today was George from Wall Fame ass taking on the
• 21:37
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• 21:40
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• 21:44
  Speaker 5: complete contest rules at Financial Exchange Show dot com.
• 21:47
  Speaker 2: A little bit earlier in the show, we indicated a
• 21:51
  Speaker 2: confirmation from the UAE Ministry of Defense that air defenses
• 21:57
  Speaker 2: had been activated as they had four cruise missiles from
• 22:01
  Speaker 2: Iran that were attacking them and three of the four
• 22:06
  Speaker 2: had been intercepted the fourth had splashed down in the sea.
• 22:09
  Speaker 2: A second post from the UAE Ministry of Defense now
• 22:16
  Speaker 2: that the UAE is engaging with additional missile attacks, including
• 22:22
  Speaker 2: drones and ballistic missiles and cruise missiles from Iran. Also
• 22:28
  Speaker 2: indications that oil facilities near the Gulf of Oman port
• 22:34
  Speaker 2: of fuji Era are now.
• 22:38
  Speaker 3: Apparently on fire.
• 22:39
  Speaker 2: It doesn't it's not clear if it was from debris
• 22:42
  Speaker 2: or if something got through.
• 22:45
  Speaker 3: But again, you've got.
• 22:46
  Speaker 2: A little bit of an escalation that appears to be
• 22:48
  Speaker 2: happening here, and we'll see where this goes In response,
• 22:53
  Speaker 2: tucking it at oils up ten year treasury now up
• 22:56
  Speaker 2: six bases points on the day, and the thirty year
• 23:00
  Speaker 2: five point three to five point one nine percent, So
• 23:03
  Speaker 2: the thirty year breaching that five percent level UH for
• 23:06
  Speaker 2: the first time in a while here, and again everyone's
• 23:11
  Speaker 2: been pretty itchy in the UH, in the region for the.
• 23:14
  Speaker 3: Last couple of weeks.
• 23:16
  Speaker 2: We'll see if this is UH, you know, something that
• 23:19
  Speaker 2: kind of flares out and you know, goes away over
• 23:22
  Speaker 2: the next twenty four to thirty six hours, or if
• 23:24
  Speaker 2: this flares up instead UH and becomes UH, you know,
• 23:28
  Speaker 2: kind of a reignition of the conflict. It's it's again
• 23:33
  Speaker 2: we're reporting this as we get information coming in. No
• 23:37
  Speaker 2: one really knows a Ton right now, just because the
• 23:40
  Speaker 2: fog of war is pretty thick.
• 23:42
  Speaker 3: Uh, when we're when we're looking.
• 23:44
  Speaker 2: At this, getting back to one final point that I
• 23:47
  Speaker 2: want to make on the second home, uh changes in
• 23:52
  Speaker 2: tax rates. You know Miken mentioned, Hey, this doesn't seem
• 23:55
  Speaker 2: to be about trying to make housing cheaper. It seems
• 23:57
  Speaker 2: to be about trying to tax the rich to bring
• 23:59
  Speaker 2: in additional tax revenue. Which also is another thing that
• 24:03
  Speaker 2: I get at, which is, Okay, ultimately you are trying
• 24:07
  Speaker 2: to you're trying to deal with these symptoms of a
• 24:10
  Speaker 2: problem and not the actual cause, and in doing so,
• 24:15
  Speaker 2: you're being highly inefficient. And look, if the rich people
• 24:18
  Speaker 2: decide okay, fine, like we're just gonna not go there. Great,
• 24:22
  Speaker 2: you're not gonna get the tax revenue that you want,
• 24:24
  Speaker 2: then oh yeah. I was not trying to voice the
• 24:27
  Speaker 2: abilm that I think it's a good idea to go
• 24:29
  Speaker 2: and do so. But I think clearly that's been the
• 24:31
  Speaker 2: push from what we've got the new proposed or did
• 24:36
  Speaker 2: that pass, the California Wealth tax, no idea. So there's
• 24:41
  Speaker 2: the California wealth tax, there is the New York City
• 24:44
  Speaker 2: second home tax, there's the Rhode Island proposal, and I
• 24:47
  Speaker 2: view again, they're all floated with a lot of different ideas,
• 24:52
  Speaker 2: but I think the clear trend that I've seen has
• 24:53
  Speaker 2: been a pivot away from oh yeah, we're trying to
• 24:56
  Speaker 2: make housing more affordable, which you know Massachusetts is gonna
• 25:00
  Speaker 2: vote on, for instance, a rent control bill, which is
• 25:02
  Speaker 2: clearly about trying to do that. We'll have the opposite effect, by.
• 25:05
  Speaker 4: The way, versus what I'm seeing here, which is our
• 25:09
  Speaker 4: budgets are a mess. We need to raise revenue. Let's
• 25:12
  Speaker 4: go get it from the wealthiest in New York.
• 25:15
  Speaker 2: Which will work for like three years until they're like, okay, fine,
• 25:18
  Speaker 2: we'll move New York. Quite honestly, New York City, you
• 25:22
  Speaker 2: can pull it off. Yes, there's only one New York City.
• 25:25
  Speaker 4: Yeah, and you know the people that own those second
• 25:27
  Speaker 4: places are like, well I moved to Florida to avoid
• 25:31
  Speaker 4: all of the income taxes.
• 25:32
  Speaker 2: I'll just pay it on the property. Well, there's only
• 25:35
  Speaker 2: one New York City. If you want what New York
• 25:38
  Speaker 2: City has to offer, that's it. As someone who's a
• 25:42
  Speaker 2: proud New Englander, there's a lot of beach out there.
• 25:46
  Speaker 3: Okay.
• 25:47
  Speaker 2: So if Rhode Island says, okay, we're doing this Okay, fine,
• 25:51
  Speaker 2: then you're gonna go up to Maine. And then if
• 25:53
  Speaker 2: Maine decides, okay, we're gonna do this, fine, then you're
• 25:55
  Speaker 2: gonna go down to Delaware. And if Delaware says it great,
• 25:58
  Speaker 2: you'll go to Like there's a lot of beach out there,
• 26:02
  Speaker 2: there's only one New York City.
• 26:03
  Speaker 4: Always comes down to how onerous we're talking about. But yeah,
• 26:06
  Speaker 4: whether it's the Massachusetts Millionaire's tax or any of these
• 26:08
  Speaker 4: other things, what you're talking about is taxing the super wealthy.
• 26:11
  Speaker 4: And what the super wealthy have been I won't say
• 26:15
  Speaker 4: always telling you, but pretty consistently telling you is we
• 26:19
  Speaker 4: can find other states to live in and not dramatically
• 26:22
  Speaker 4: reshape our lifestyle. Whether it's Jeff Bezos and you know
• 26:25
  Speaker 4: relocation of.
• 26:28
  Speaker 3: All these days.
• 26:29
  Speaker 4: I think Florida, but you know he had his headquarters
• 26:33
  Speaker 4: in Washington State and relocated. Or who's the Google founder
• 26:38
  Speaker 4: who's been making a big thing out of the California
• 26:40
  Speaker 4: wealth tex I don't know, he wasn't the founder. In
• 26:45
  Speaker 4: either case, many of them are saying, look, I'll just
• 26:47
  Speaker 4: move to Texas. I'll move somewhere else and I might
• 26:50
  Speaker 4: keep a property there and you can tax that all
• 26:52
  Speaker 4: you want, but I'm not going to succumb to these things.
• 26:54
  Speaker 4: And yeah, it's it's not working great and even the
• 26:58
  Speaker 4: biggest geographic states, and I worry about what it would
• 27:01
  Speaker 4: mean for some of the smaller ones like Rhode Island.
• 27:03
  Speaker 3: Larry Page might have been Brent. It was Brent. That
• 27:08
  Speaker 3: a big thing of it.
• 27:09
  Speaker 2: Sorry, isn't it great that one of the founders of
• 27:12
  Speaker 2: Google had the last name Page.
• 27:14
  Speaker 1: M M.
• 27:15
  Speaker 2: You know that's like if that's like if Ford had
• 27:17
  Speaker 2: been founded by like Jimmy Engine.
• 27:20
  Speaker 3: Folks.
• 27:21
  Speaker 4: Brand new guide from the Armstrong Advisor Group for the
• 27:23
  Speaker 4: month of May. It's our first Uh well, I guess
• 27:27
  Speaker 4: we yeah Friday too, but kick off of the month
• 27:30
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• 27:32
  Speaker 4: touches a lot of folks in different ways. And a
• 27:35
  Speaker 4: very common conversation that financial advisors have, which has to
• 27:39
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• 27:44
  Speaker 4: If you have a loved one, for instance, who's got
• 27:47
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• 27:51
  Speaker 4: You've played this out yourself before, and it can be
• 27:55
  Speaker 4: frustrating in the best of scenarios and disastrous in others.
• 27:59
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• 28:12
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• 28:15
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• 28:16
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• 28:21
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• 28:24
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• 28:30
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• 28:35
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• 28:40
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• 28:42
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• 28:43
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• 28:45
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• 28:48
  Speaker 4: could give up on a bunch of advantages that the
• 28:50
  Speaker 4: IRS gives you by keeping that retirement account where it is.
• 28:53
  Speaker 3: So you have to be knowledge about it.
• 28:55
  Speaker 4: You have to understand what the upsides are and the
• 28:57
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• 29:01
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• 29:04
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• 29:04
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• 29:13
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• 29:16
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• 29:19
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• 29:21
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 29:23
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 29:26
  Speaker 1: Armstrong Guide a specific financial, legal or tax advice. Consult
• 29:29
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• 29:32
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 29:35
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• 29:37
  Speaker 2: Let's see what do we want to cover here? Five
• 29:39
  Speaker 2: money lessons from readers in the trenches of elder parent care.
• 29:43
  Speaker 2: This piece from the New York Times.
• 29:45
  Speaker 3: Mike, Yeah, so.
• 29:46
  Speaker 4: Last year, about eleven four hundred Americans turned sixty five
• 29:51
  Speaker 4: on any given day.
• 29:53
  Speaker 3: It's a lot.
• 29:56
  Speaker 4: Gen xers are starting to experience this firsthand. Yeah, Millennials
• 30:02
  Speaker 4: will be the next to start dealing with their parents,
• 30:05
  Speaker 4: you know, getting to retirement or already there and running
• 30:09
  Speaker 4: into all sorts of complicated issues. I think a few
• 30:12
  Speaker 4: things that I will just generally say, having worked with
• 30:16
  Speaker 4: that generation and older generations for over a decade now, One,
• 30:22
  Speaker 4: your parents are generally.
• 30:23
  Speaker 3: Not prepared for future health issues.
• 30:26
  Speaker 4: No, financially and just emotionally, they are not quite facing
• 30:30
  Speaker 4: those things very.
• 30:33
  Speaker 3: Transparently or clearly. Two.
• 30:37
  Speaker 4: Long term care, it's not going to get cheaper in
• 30:39
  Speaker 4: their lifetimes. It's not going to get more affordable in
• 30:41
  Speaker 4: their lifetimes. Generally you could see improvements, you know, thirty
• 30:46
  Speaker 4: forty years from now, but in their lifetime, I do
• 30:48
  Speaker 4: not believe long term care is going to get cheaper.
• 30:51
  Speaker 4: And Three, based on my experience, you probably don't know
• 30:56
  Speaker 4: what they would want for their long term care scenario
• 30:58
  Speaker 4: if you needed to navigate. Those have been my conclusions,
• 31:03
  Speaker 4: again from act asking people about this quite a bit
• 31:05
  Speaker 4: over the last ten years.
• 31:06
  Speaker 3: Is nobody likes to talk about it.
• 31:08
  Speaker 4: Everybody's unprepared for it, and when it happens, it's oftentimes
• 31:13
  Speaker 4: in unmitigated mess or disaster where the rest of the
• 31:17
  Speaker 4: family is trying to pick it up. And the New
• 31:18
  Speaker 4: York Times article, you know, goes and interviews several different families,
• 31:22
  Speaker 4: all of whom are having either good or bad experiences
• 31:25
  Speaker 4: with it, but several of them are kids trying to
• 31:28
  Speaker 4: figure this out from across the country, oftentimes financially contributing
• 31:31
  Speaker 4: to their parents' long term care because no conversations were had,
• 31:36
  Speaker 4: no real planning.
• 31:37
  Speaker 3: Was done, And it's a.
• 31:42
  Speaker 4: It's been an issue for generations, but because the size
• 31:45
  Speaker 4: of the baby boomer generation, it's about to impact a
• 31:47
  Speaker 4: lot more people.
• 31:49
  Speaker 2: Yeah, it's something where until you live that experience day
• 31:55
  Speaker 2: in and day out, nothing prepared like, you can't prepare
• 31:59
  Speaker 2: for it.
• 32:00
  Speaker 3: Honestly, you can try, but until.
• 32:03
  Speaker 2: You experience it's it's too theoretical for you.
• 32:07
  Speaker 4: The only the only suggestion I have for the gen
• 32:09
  Speaker 4: xers out there who are getting ready for it is
• 32:12
  Speaker 4: ask a lot of questions. Ask them of your parents'
• 32:14
  Speaker 4: financial advisor, ask them of your parents yourself if they
• 32:16
  Speaker 4: will give you the information, but ask about what the
• 32:18
  Speaker 4: plan is because, like I said, the vast majority of
• 32:21
  Speaker 4: people unprepared for it. And two stats that I think
• 32:24
  Speaker 4: most people don't understand. Average life expectancy is not relevant
• 32:28
  Speaker 4: when you're talking about living people in their sixties. No,
• 32:31
  Speaker 4: the life expectancy for a sixty five year old woman
• 32:34
  Speaker 4: is eighty seven years old. For a man it's eighty four.
• 32:37
  Speaker 4: And the chances that a sixty five year old woman
• 32:40
  Speaker 4: reaches age ninety is now forty percent. It's thirty percent
• 32:44
  Speaker 4: for men. We're talking about a lot of people that
• 32:47
  Speaker 4: live to ninety to one hundred years old over the
• 32:49
  Speaker 4: course of the next twenty years, and their financial situations
• 32:53
  Speaker 4: are not prepared for that reality.
• 32:55
  Speaker 3: To take a quick break, when we return, we've got
• 32:58
  Speaker 3: stack Roulette.
• 33:00
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• 33:03
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• 34:19
  Speaker 3: Mike, what do you got for stack Roulette? For me?
• 34:22
  Speaker 4: Let's talk a little bit about gambling sites that are
• 34:27
  Speaker 4: continue to disguise themselves as futures commodities traders. So Polymarket
• 34:31
  Speaker 4: and Calci are the two big ones out there, but
• 34:35
  Speaker 4: they have mirrored the growth that you have seen on
• 34:37
  Speaker 4: online sports gambling. And the Wallstreet Journal had a pretty
• 34:40
  Speaker 4: interesting piece for those that aren't already very aware of
• 34:44
  Speaker 4: what's going on there. They interview a John Peterson who's
• 34:48
  Speaker 4: now in a homeless shelter after, you know, wasn't in
• 34:51
  Speaker 4: great financial shape before turned two thousand dollars into forty
• 34:56
  Speaker 4: one thousand dollars before losing it all on one, you know,
• 35:00
  Speaker 4: as gamblers do one final bet on these platforms, now
• 35:03
  Speaker 4: living in a homeless shelter, but a few pieces that
• 35:05
  Speaker 4: they found. The Wall Street Journal did about these sites
• 35:09
  Speaker 4: that you know, I think are enlightening and interesting and
• 35:13
  Speaker 4: important to better understand. One, on poly Market, sixty seven
• 35:17
  Speaker 4: percent of profits go to just zero point one percent
• 35:21
  Speaker 4: of accounts, meaning less than two thousand accounts total net
• 35:24
  Speaker 4: a total of nearly half.
• 35:25
  Speaker 3: A billion dollars.
• 35:28
  Speaker 4: They also, again, what I think is most important here
• 35:31
  Speaker 4: is they are not regulated like gambling sites. In fact,
• 35:34
  Speaker 4: recently Polymarket was running a pay my rent advertisement where oh,
• 35:39
  Speaker 4: you know, basically like, hey, no longer have the money
• 35:42
  Speaker 4: to pay your rent, maybe you can make some on
• 35:44
  Speaker 4: poly market to be able to afford that, to which
• 35:46
  Speaker 4: I ask, would any state in the country allow a casino?
• 35:51
  Speaker 4: Can you imagine the Mohegan Sun running an advertisement like, hey,
• 35:55
  Speaker 4: running out of money to pay your rent, come on down,
• 35:58
  Speaker 4: maybe you can make it up on.
• 35:59
  Speaker 3: Craps, because that's what this is.
• 36:02
  Speaker 4: Yes, And my concern is that, hey, it's not regulated
• 36:04
  Speaker 4: anywhere like it. By the way, they don't run that
• 36:06
  Speaker 4: ad anymore, but they but they did, and two more
• 36:13
  Speaker 4: and more, it seems to me that these what are
• 36:16
  Speaker 4: very clearly akin to gambling platforms are being advertised as
• 36:23
  Speaker 4: one legal gambling and two investing in some way, and
• 36:27
  Speaker 4: they are neither correct, and that I think in lies
• 36:32
  Speaker 4: the problem. And I do worry about you know, Robin
• 36:36
  Speaker 4: Hood and others who are beginning to place these platforms
• 36:39
  Speaker 4: on their brokerage websites really muddying the waters even further
• 36:43
  Speaker 4: between what is gambling and what is investing.
• 36:45
  Speaker 3: I've kind of had it with them at this point. Yeah,
• 36:48
  Speaker 3: you know, like, yeah.
• 36:51
  Speaker 2: People, everyone is out there is like, oh, well, it's great.
• 36:56
  Speaker 2: You can now if you like have an idea, you
• 36:58
  Speaker 2: can put your money where you're mouth is. Maybe I
• 37:01
  Speaker 2: don't want to. Maybe I just want to have a
• 37:02
  Speaker 2: conversation about something. I don't need to bet on everything.
• 37:05
  Speaker 4: And it is so pervasive. I was talking to I
• 37:08
  Speaker 4: was at a reunion over the weekend and it was
• 37:12
  Speaker 4: you know, classes from several different age groups, and yeah,
• 37:15
  Speaker 4: of course all of the recent college grads were talking
• 37:19
  Speaker 4: about all of their bets on the basketball game and
• 37:22
  Speaker 4: like every playoff game out there, and all the money
• 37:24
  Speaker 4: that they were losing.
• 37:25
  Speaker 3: And it's which is such.
• 37:27
  Speaker 4: A part of the lifestyle that is just not for
• 37:29
  Speaker 4: all of the people that were in my age EMO, and.
• 37:31
  Speaker 2: Quite honestly, it's a boring part of the lifestyle. I'll
• 37:37
  Speaker 2: pass judgment as someone who you know does actually go
• 37:40
  Speaker 2: to casinos and gamble. I know that no one wants
• 37:43
  Speaker 2: to hear about the bad beats that I got on
• 37:45
  Speaker 2: a back jackhand.
• 37:46
  Speaker 3: Right because it's not interesting. It's not interesting. I'd rather
• 37:49
  Speaker 3: hear about your dream, So like, stop.
• 37:52
  Speaker 2: Telling me about well, I bet on this, and this
• 37:55
  Speaker 2: is how we're I don't care. Like if the most
• 37:59
  Speaker 2: interesting thing that happened to you today is that you
• 38:02
  Speaker 2: like put a bet on how many points Larry Bird
• 38:04
  Speaker 2: would score whatever, the answer was zero.
• 38:11
  Speaker 3: He didn't score any yesterday.
• 38:13
  Speaker 2: We're gonna take a quick break for the rest of
• 38:15
  Speaker 2: the day and we'll be back tomorrow. And if you
• 38:17
  Speaker 2: didn't like our show today, we're gonna try harder, we promise.