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Can markets survive if the magnificent seven doesn't correct course? · The Financial Exchange Show

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Speaker 2: Our two here on the financial exchange markets not moving
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Speaker 2: a whole lot, at least when you look at equities.
1:15
Speaker 3: The SMP is.
1:17
Speaker 2: Flat, let's technically down one point right now. The Dow
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Speaker 2: is up one hundred and twenty eight points, about a
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Speaker 2: third of a percent of the Nasdaq down forty basis
1:25
Speaker 2: points or sixty eight points. So again you just kind
1:29
Speaker 2: of got no real movement in either direction. It's just
1:34
Speaker 2: you know what index? Do you want to look at
1:37
Speaker 2: some context?
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Speaker 3: Here?
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Speaker 4: The S and P five hundred now compared to its
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Speaker 4: all time high reach back in February, we're off just
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Speaker 4: shy of ten percent now, so I mean we're off
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Speaker 4: close to twenty what was it two weeks ago? Yep,
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Speaker 4: So I find that context helpful. Where are we flat now?
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Speaker 4: You're today let's see your date. We're still down about
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Speaker 4: five and a half percent, but from that all time high,
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Speaker 4: down about ten percent on the most useful index for
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Speaker 4: the U S.
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Speaker 2: DOC market, So you've got that going on inequities. On
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Speaker 2: the bond side of things, ten your Treasury is down
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Speaker 2: another three point three basis points to four point two
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Speaker 2: three three percent, This mostly on the back of a
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Speaker 2: puke tastic Dallas Fed reading that we received at ten thirty.
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Speaker 2: Prior to that tenure, treasury had basically been flat on
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Speaker 2: the day, no real movement, but the Dallas Fed Manufacturing
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Speaker 2: Index came in at minus thirty eight point I'm sorry,
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Speaker 2: thirty five point eight, which outside of COVID and one
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Speaker 2: very brief reading back in late twenty fifteen when the
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Speaker 2: US oil industry was being absolutely decimated by extra production
2:43
Speaker 2: from Russia, this is the only reading in this range
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Speaker 2: since two thousand and eight, got it. So it's like
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Speaker 2: the Dallas This is one where the best way I
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Speaker 2: can describe it is someone that I follow on social
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Speaker 2: media said, you know that the reading's bad when I
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Speaker 2: actually click onto the Dallas Fed website to read it,
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Speaker 2: because normally no one pays any.
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Speaker 3: Attention to this stuff. It's just background noise.
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Speaker 2: It's like it's a second or third tier report that
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Speaker 2: no one really follows all that closely. We've got oil
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Speaker 2: today down eighty nine cents a barrel on West Texas
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Speaker 2: Intermediate at sixty two thirteen a barrel, triple a national
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Speaker 2: averageur gas prices completely flat on the day, three fourteen
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Speaker 2: and nine tenths of ascent. Again, there's been no major
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Speaker 2: movement in either direction in this for like three months
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Speaker 2: right now. I'm tempted to stop talking about it just
3:32
Speaker 2: because gas prices have not been moving. They've been between
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Speaker 2: three ten and three twenty, I almost think, since the
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Speaker 2: beginning of this year. So it's just steady addy, no
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Speaker 2: real movement on that side of things, and continuing to
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Speaker 2: hang out in that range. Gold now up forty one
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Speaker 2: to ninety an ounce to thirty three, forty and thirty cents.
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Speaker 2: This also happening on the back of that Dallas Fed
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Speaker 2: manufacturing report as well as the.
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Speaker 3: Other thing that might be moving gold a little bit.
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Speaker 2: Last half hour so a number of reports coming out
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Speaker 2: of Indian Pakistan indicating the potential for kind of a
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Speaker 2: step up in military engagement there with potentially an open
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Speaker 2: conflict after a it was was this technically like a
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Speaker 2: terror a terrorist act last week, I don't know the specifics,
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Speaker 2: but in the Kashmir region, and now you've got the
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Speaker 2: real concern that you've got two nuclear powers that don't
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Speaker 2: like each other at all that may be starting to
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Speaker 2: engage in an armed conflict in that part of the world.
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Speaker 2: So toss that onto the geopolitical mix. And I have
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Speaker 2: no insight into this. I don't know, but just throw
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Speaker 2: it on the pile, because it's the geopolitical wood pile
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Speaker 2: is getting pretty big these days. It's pretty heavy and dry.
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Speaker 2: There's an awful lot out there right now, and it's dodgy.
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Speaker 4: Other big data points this week, we will get a
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Speaker 4: jobs report on Friday, taking a look at unemployment in
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Speaker 4: the month of April. We will get job as claims
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Speaker 4: on Thursday, Ism manufacturing, so some confirmation or denial what
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Speaker 4: we're seeing down in the Dallas FED survey on Thursday,
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Speaker 4: Construction spending Thursday as well, and then the Fed's preferred
5:20
Speaker 4: gauge on inflation, the PCE index, will come out Wednesday
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Speaker 4: at ten am. So we are aside from massive earnings calls,
5:29
Speaker 4: we are also going to see quite a bit of
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Speaker 4: economic data.
5:32
Speaker 2: Peace in the Journal of Wall Street, a reckoning for
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Speaker 2: the Magnificent seven tests the market. Oh what does this
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Speaker 2: reckoning that we are seeing in the seven Magnificent stocks?
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Speaker 3: Michael?
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Speaker 4: The reckoning so far is primarily a question of investors'
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Speaker 4: willingness to pay very high prices for these companies. Right,
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Speaker 4: Can you point to anything from the Magnificent seven that
5:54
Speaker 4: points to a dramatic turn down in profitability, sales, or
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Speaker 4: overall growth from Tesla. Yes for the other ones, no, right,
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Speaker 4: so okay, yeah, one of the mags seven has certainly
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Speaker 4: seen some real data here. But the reckoning so far
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Speaker 4: has been a question of can you continue to grow
6:12
Speaker 4: this AI massive spending boom from all these companies, Will
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Speaker 4: Nvidia continue to benefit from it? What do tariffs do
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Speaker 4: to the overall confidence of the business. And then, frankly,
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Speaker 4: a bigger question on my mind is, even if you
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Speaker 4: maintain your sales and your profitability, which you know, open
6:31
Speaker 4: question mark in the face of these challenges that we're
6:34
Speaker 4: talking about, are investors willing to still spend the same
6:38
Speaker 4: price on your stocks given their overall concerns about other
6:41
Speaker 4: things going on.
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Speaker 2: So I think that in trying to figure out where
6:47
Speaker 2: this goes from a leadership perspective, We've.
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Speaker 3: Got earnings on four of these companies this week.
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Speaker 2: You got Microsoft and Meta on Tuesday, Amazon and Apple
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Speaker 2: on Wednesday. It's really nice that they line up alphabetically
7:01
Speaker 2: like anyone out consider that, you know, like if any
7:04
Speaker 2: of our listeners like m m A Wednesday Thursday, is
7:07
Speaker 2: MMAA it's you know, Brazilian jiu jitsu between Mark Zuckerberg
7:15
Speaker 2: and Sataniya Adela.
7:17
Speaker 3: He never did the cage musk, right, they backed out
7:21
Speaker 3: of that. Obviously, they didn't even back out, they just
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Speaker 3: never mentioned it again.
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Speaker 2: I think that they actually did, like have an announcement
7:27
Speaker 2: that they weren't going to do it or something like that.
7:30
Speaker 2: They there was something along those lines. But you got
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Speaker 2: four of these companies reporting this week, Mike, if you
7:37
Speaker 2: if you're trying to figure out what to look for
7:40
Speaker 2: in these earnings reports, I think that the two things
7:46
Speaker 2: that are going to matter. And I kind of throw
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Speaker 2: Amazon out just because I on the retail side, like
7:52
Speaker 2: it's just a whole different beast from the others. Sure,
7:55
Speaker 2: but here here are the numbers that I'm interested in.
7:58
Speaker 2: What are you doing with your AI ax yep, Because
8:01
Speaker 2: that's a huge part of why investors have wanted to
8:04
Speaker 2: pay a premium is the idea that hey, there's there's
8:06
Speaker 2: something to this AI boom, and you know, we want
8:08
Speaker 2: to be able.
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Speaker 3: To capture that.
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Speaker 2: So what's going on with the AI capex and the
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Speaker 2: other piece?
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Speaker 3: And this is more.
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Speaker 2: For Apple and Meta just because again, like I know,
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Speaker 2: these companies all get lumped together, but they're all kind
8:25
Speaker 2: of different, Like they're really different in terms of who
8:28
Speaker 2: they sell, what they sell and Microsoft have very little
8:31
Speaker 2: in common. No, But for for Apple and for Meta,
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Speaker 2: I think very much what are they seeing in the
8:38
Speaker 2: retail space as far as demand? In Meta's case, it's
8:42
Speaker 2: kind of a pass through in terms of, Hey, you're
8:45
Speaker 2: seeing any shift in your ad ad spend on your platforms, right,
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Speaker 2: But what's your read on what consumers are doing and
8:51
Speaker 2: on what companies are doing on that side of things?
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Speaker 3: Yeah?
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Speaker 4: I think I think Apple can tell you a fair
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Speaker 4: bit about that. I think Amazon can tell you a
8:57
Speaker 4: little bit about what they were doing, and maybe they
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Speaker 4: have some hints at sales most recently for Microsoft and Meta,
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Speaker 4: what they really tell me instead is.
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Speaker 3: What are businesses doing? Yep?
9:09
Speaker 4: You know, like if Microsoft sales plunge in certain areas,
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Speaker 4: then that can indicate similar things from what we're seeing
9:16
Speaker 4: on travel demand and other items that you're seeing from businesses.
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Speaker 4: If it keeps up, it's much more question of hey,
9:23
Speaker 4: are you seeing anything that would indicate a slowdown on
9:26
Speaker 4: any of these fronts. But you know, Google reported last
9:28
Speaker 4: week and they did not really tell us much that
9:31
Speaker 4: would indicate a slow down from businesses.
9:32
Speaker 2: No, they really didn't. Let's take a quick break here.
9:36
Speaker 2: When we come back, we're gonna do a little bit
9:38
Speaker 2: of trivia and then we're gonna talk so security.
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Speaker 3: You want to talk social security.
9:43
Speaker 4: I want to talk social security. Mike wants to talk
9:46
Speaker 4: social security.
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Speaker 1: After this, Tara Spears continue to grip markets. Get the
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Speaker 5: It's time for trivia here on the Financial Exchange. And
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Speaker 5: today is Jay Leno's seventy fifth birthday. Leno began his
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Speaker 5: What year did Jay Leno take over as permanent host
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Speaker 5: What year did Jay Leno take over as permanent host
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11:12
Speaker 2: Piece in the Wall Street Journal, Americans are claiming Social
11:14
Speaker 2: Security early fearful of its future. Good, bad or ugly decision.
11:19
Speaker 3: Michael, understandably ugly decision. Understandably ugly. Walk me through that.
11:26
Speaker 4: Yeah, so, I think there is legitimate concern for fear
11:30
Speaker 4: regarding the Social Security program. Our our elected officials are
11:34
Speaker 4: seemingly completely ignoring the problem, and that causes all sorts
11:39
Speaker 4: of sensationalist pieces to be written about the you know,
11:42
Speaker 4: the program's looming demise, because it is very true that
11:47
Speaker 4: the program will not have enough money to pay its
11:50
Speaker 4: benefits fully in around a decade, and that is understandably
11:56
Speaker 4: concerning for folks that are turning sixty two or a
12:00
Speaker 4: decade out from retirement. My counterpoint would be, there is
12:05
Speaker 4: no way that lawmakers cut benefits either to existing Social
12:10
Speaker 4: Security beneficiaries or anyone that, in my opinion, is over
12:13
Speaker 4: the age of like fifty. I think it would be
12:15
Speaker 4: absolute political suicide to do so. And unless you are
12:22
Speaker 4: the top one percent out there, I really don't think
12:26
Speaker 4: you have anything to be concerned about when it comes
12:28
Speaker 4: to your benefits on Social Security.
12:30
Speaker 2: So I take what you're saying with a you know,
12:34
Speaker 2: a great as I hear what you're saying is what
12:36
Speaker 2: I'm trying to say. No, I take it with a
12:38
Speaker 2: lot of pepper. You know, That's how I got through things.
12:41
Speaker 2: Let's say that I'm someone who comes to you and
12:43
Speaker 2: says this mic that's all well and good. You say
12:47
Speaker 2: there's no way that could happen. But we've just lived through,
12:51
Speaker 2: you know, a bunch of things that we never thought of,
12:53
Speaker 2: a bunch of things that we thought would you know,
12:55
Speaker 2: oil prices went negative five years ago last week, right,
12:59
Speaker 2: not something and we ever thought we would see.
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Speaker 3: Right.
13:02
Speaker 2: So forgive me for not believing you when you say
13:06
Speaker 2: lawmakers would never do that. How would you respond to
13:09
Speaker 2: someone who says that, Yeah, Look, my response would be
13:13
Speaker 2: I don't have a response. You are right, they could
13:16
Speaker 2: eliminate the Social Security program. Pause gives me pause.
13:18
Speaker 4: Yeah, they could eliminate the Social Security program tomorrow, but
13:22
Speaker 4: we have to. We always have to make decisions based
13:25
Speaker 4: on what we think is likely. And one thing is
13:27
Speaker 4: for sure, if you take your Social Security benefits at
13:30
Speaker 4: sixty two, regardless of this scenario that lawmakers choose on
13:35
Speaker 4: for how it's going to all work, your benefits will
13:37
Speaker 4: be permanently lower than they would have been haduated unless
13:41
Speaker 4: they do the most unlikely thing in my mind, which
13:44
Speaker 4: would be say, hey, we're reducing soci Security for everyone
13:47
Speaker 4: that's not currently collecting. Sure, that would seem pretty crazy,
13:51
Speaker 4: and especially from the lessons over the last few years,
13:54
Speaker 4: there's almost always a grandfather and grace period where you
13:57
Speaker 4: have time to do something. We will take a look,
13:58
Speaker 4: for instance, that the Social Security Fairness Act, where they
14:01
Speaker 4: went back a full year and reimbursed people for Social
14:04
Speaker 4: Security payments they didn't receive. The most important question that
14:09
Speaker 4: I think you should be asking yourself though, when it
14:11
Speaker 4: comes to this decision, is if I am so afraid
14:15
Speaker 4: about this that I'm going to pull Social Security early,
14:18
Speaker 4: or I've just become convinced that that's the best strategy
14:20
Speaker 4: for me. Am I certain that my financial plan can
14:24
Speaker 4: afford to do it all, right, Like people make decisions that,
14:28
Speaker 4: you know, financial decisions that I might think are dumb
14:30
Speaker 4: all the time.
14:32
Speaker 3: Financial decisions that I think are dumb. Yeah, all of
14:35
Speaker 3: us do.
14:35
Speaker 2: Because not everything it's a financial decision. Like some of
14:37
Speaker 2: it is just hey, I got to live my life,
14:40
Speaker 2: even if it's not the best financial decision. Yep, I
14:43
Speaker 2: want that. I'm not a coffee drinker, but yeah, I
14:46
Speaker 2: want that coffee every day.
14:47
Speaker 4: Or I'm gonna go to the casino twice a year
14:49
Speaker 4: and I'm gonna spend what most people would consider to
14:51
Speaker 4: be an obscene amount of money. I don't do it,
14:53
Speaker 4: but I know that people do, and I can understand it.
14:56
Speaker 4: And so the question about the social security is, well,
15:00
Speaker 4: it's not a question. Treat it the same way you
15:02
Speaker 4: would any other decision that involves your income or your expenses,
15:07
Speaker 4: because that's your social security.
15:09
Speaker 3: Is an asset.
15:10
Speaker 4: It's just you know, in the same way that your
15:13
Speaker 4: four oh one K or your other buckets of money
15:15
Speaker 4: are an asset, your social security future payments are an asset,
15:18
Speaker 4: and you have some choices when it comes to how
15:21
Speaker 4: to use that asset. And for a lot of reasons,
15:24
Speaker 4: that I fully understand. We treat it differently because it's
15:27
Speaker 4: sponsored by the government. There's some mistrust, there's all sorts
15:29
Speaker 4: of emotions that come into social security, and the decision
15:33
Speaker 4: around it involves an unknowable factor how long am I
15:36
Speaker 4: going to live? But the point with this is, just
15:41
Speaker 4: like investing, you don't want to make an emotional decision
15:45
Speaker 4: about social security.
15:46
Speaker 3: And what I'm seeing recently is a lot.
15:48
Speaker 4: Of fear based decisions around social Security, and I think
15:51
Speaker 4: that's probably a mistake. If you have questions about how
15:54
Speaker 4: social Security is going to play into your financial strategy
15:58
Speaker 4: and whether or not you should claim or or later,
16:01
Speaker 4: make sure you know all the rules. Make sure you
16:03
Speaker 4: know about the earnings limits that apply if you're taking
16:06
Speaker 4: social Security at sixty two. Make sure you understand how
16:08
Speaker 4: your Medicare premiums are going to be paid once you
16:11
Speaker 4: are claiming social Security. Make sure you fully understand what
16:14
Speaker 4: your spouse is going to be impacted by your decision. Right,
16:17
Speaker 4: Oh yeah, I decide to claim it at sixty two, Well,
16:20
Speaker 4: did you think about how your how your husband who's
16:22
Speaker 4: five years younger, is going to be affected.
16:24
Speaker 3: By that decision?
16:25
Speaker 4: Yep, These are really important factors to consider around social Security.
16:30
Speaker 3: And I'm not saying do or don't do.
16:32
Speaker 4: There are plenty of people that I do say Yeah,
16:34
Speaker 4: makes sense to go pull social Security at sixty two
16:36
Speaker 4: in your scenario, but make an educated decision. Give the
16:39
Speaker 4: folks at Armstrong Advisor Group a call the numbers eight
16:42
Speaker 4: hundred three nine three four zero zero one. Again, if
16:45
Speaker 4: you have any questions about social Security, pensions or your
16:48
Speaker 4: overall retirement strategy, then number four the Armstrong Advisory Group
16:52
Speaker 4: is eight hundred three nine three four zero zero one.
16:56
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
16:58
Speaker 1: registered investment advisor. Nothing in the ad or in any
17:01
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
17:04
Speaker 1: your own financial, tax into state planning advisors before making
17:07
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
17:10
Speaker 1: advisory services.
17:11
Speaker 2: Mike, do you want to talk babies? Are college now?
17:13
Speaker 2: Babies babies going to college or just babies?
17:16
Speaker 3: Babies? Okay?
17:17
Speaker 2: Peace in Bloomberg opinion titled a Baby Boom in this
17:20
Speaker 2: Economy and what it's talking about is basically that the
17:26
Speaker 2: Trump administration is very much on record and saying like, look,
17:30
Speaker 2: we want to try to find ways to incentivize people
17:33
Speaker 2: to have more kids, because we view not enough children
17:37
Speaker 2: as a real problem for the economy long term.
17:40
Speaker 3: See so security correct.
17:42
Speaker 2: The counter to it is, Hey, you've got all kinds
17:45
Speaker 2: of like disjointed things in the economy.
17:48
Speaker 3: Here, and you also have currently.
17:51
Speaker 2: The Trump administration slashing federal programs through dose that would
17:54
Speaker 2: typically be supportive of new parents. How does one reconcile
17:58
Speaker 2: This is the question that this piece is raising.
18:01
Speaker 4: Yeah, And to be honest, I had heard about a
18:03
Speaker 4: lot of this stuff on the campaign trail. I feel
18:05
Speaker 4: as though it's taken a back seat, you know, the
18:07
Speaker 4: stuff that I continue to hear about from Congress on
18:10
Speaker 4: the tax cuts plan that they want to put forward.
18:13
Speaker 4: You know, taxes on tips, taxes on Social Security, on
18:16
Speaker 4: overtime continue to be taxes on those, right, Yeah, like
18:20
Speaker 4: eliminating the taxes on those sources. Have you heard anything
18:23
Speaker 4: about a child tax credit new over the last few weeks?
18:26
Speaker 4: Is it seems to me that either it's getting buried
18:29
Speaker 4: or it's not happening.
18:30
Speaker 2: No, it's it's too early in the tax plans progression
18:35
Speaker 2: through Congress, I think to say anything definitive about it.
18:38
Speaker 2: So you know me, I'm a big believer in they
18:41
Speaker 2: don't really pay too much attention to what's being talked
18:44
Speaker 2: about until you get to, like the final bill that's
18:46
Speaker 2: being signed, because things often do change over time. It
18:51
Speaker 2: might just be that the other stuff is, you know,
18:52
Speaker 2: getting more press right now.
18:54
Speaker 3: But I don't know.
18:56
Speaker 2: Let's see if there's a tax bill that comes through
18:58
Speaker 2: in the next couple months, by the end of thing,
19:00
Speaker 2: like whenever it is, I have no idea. If there's
19:03
Speaker 2: something that comes through, let's see if there's anything in there,
19:07
Speaker 2: you know, like the you know, additional one time tax
19:09
Speaker 2: credit for having, you know, a new baby or things
19:12
Speaker 2: like that. I just I don't like to judge tax
19:15
Speaker 2: policy before it happens, because we've seen things change quite
19:19
Speaker 2: a bit from the drawing board to what actually ends
19:22
Speaker 2: up getting through.
19:22
Speaker 3: We have just take a quick break here.
19:24
Speaker 2: When we come back, we've got the trivia answer, and
19:27
Speaker 2: then we're talking about whether or not college is still
19:29
Speaker 2: worth it.
19:40
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21:08
Speaker 3: Peace in is this the Is this Washington Post?
21:12
Speaker 1: Yes?
21:13
Speaker 2: Peace in Washington Post. With the US cracking down on
21:15
Speaker 2: student loan payments, is college still worth it. There's a
21:17
Speaker 2: lot to unpacking that headline, most.
21:19
Speaker 3: Notably cracking down.
21:20
Speaker 2: The United States is not cracking down on student loan payments.
21:23
Speaker 2: They're just making sure that they are resumed and counting
21:27
Speaker 2: them towards your credit score again in a way that
21:29
Speaker 2: they haven't been the last five years.
21:31
Speaker 4: Cracking down would imply like god their loans, like hey,
21:37
Speaker 4: cracking down would be like, hey, Jimmy, so you got
21:40
Speaker 4: that loan outstanding for the next ten years, you better
21:42
Speaker 4: pay it now. Like yeah, that would be cracking down
21:47
Speaker 4: on student loans, like we let you the money for
21:48
Speaker 4: ten years, pay it now, We're gonna break your legs.
21:51
Speaker 4: The United States government is currently cracking down on illegal immigration.
21:55
Speaker 4: I think that is fair to say they are not
21:58
Speaker 4: cracking down on student loan payments. Past a series of
22:01
Speaker 4: laws that suspended the payments on the loans during COVID,
22:04
Speaker 4: and those have resumed.
22:06
Speaker 2: That is very different elections, like collections will resume just
22:09
Speaker 2: as they were in like for most of historyc and
22:12
Speaker 2: student loans have been around.
22:14
Speaker 4: Yeah, so okay, let's start a square one there. Yes,
22:17
Speaker 4: but more important question is college still worth it? That's
22:20
Speaker 4: that's a more interesting question to me. So here's the
22:24
Speaker 4: wishy washy but also right answer. Maybe, And here's why
22:28
Speaker 4: it's the wishy washy but also right answer. If you
22:31
Speaker 4: are paying private college prices for a school that is
22:36
Speaker 4: not in the top twenty five schools by whatever publication
22:41
Speaker 4: you want to trust, it's a bad deal. And so
22:46
Speaker 4: I agree that it is a bad deal. But I
22:49
Speaker 4: will also say that compared to someone with an only
22:51
Speaker 4: high school diploma, you are likely to still come out
22:54
Speaker 4: on top of your lifetime. You're missing the point though, Okay, yeah,
22:57
Speaker 4: that's fair. I just want to make our comparison.
22:59
Speaker 2: Pretty defensive this because I've thought a lot about sure,
23:03
Speaker 2: And here's my view is, if you're not going to
23:05
Speaker 2: go to a top twenty five school, which is the
23:07
Speaker 2: vast majority of people, right, go to the cheapest school
23:11
Speaker 2: that you can go to, and you will get a
23:13
Speaker 2: great education still because there are more good professors than
23:18
Speaker 2: there are good schools.
23:21
Speaker 3: Like there are good professors everywhere.
23:23
Speaker 2: Yeah, this is something I come back to with college
23:25
Speaker 2: all the time. Whether you go to Harvard or whether
23:29
Speaker 2: you go to whatever the theoretical worst school is in
23:33
Speaker 2: the country, there is someone there who has spent their
23:36
Speaker 2: entire life learning about the subject that they are teaching you,
23:40
Speaker 2: and they are required by that institution to hold office
23:45
Speaker 2: hours with you so that you can personally ask them questions.
23:48
Speaker 2: You will get out of college exactly what you put
23:50
Speaker 2: into it, whether it is at Harvard, McNee State, whatever else, like,
23:55
Speaker 2: whatever's out there, you will have the ability to do that. Now,
24:00
Speaker 2: if you go to college and all you do is party,
24:02
Speaker 2: you're gonna have a great time and ultimately you're gonna
24:06
Speaker 2: get out exactly what you put into that too. Which
24:08
Speaker 2: there are some interesting studies, believe it or not, that
24:11
Speaker 2: actually show that, depending on the school, GPA does not
24:15
Speaker 2: have as much of a correlation with your success as
24:18
Speaker 2: the amount of time that you spend hanging out with friends,
24:20
Speaker 2: because in some situations the networking effect is actually stronger
24:23
Speaker 2: than what you learn in college. But I don't want
24:26
Speaker 2: to distort this too much more or less. Look, if
24:29
Speaker 2: you're not going to go to a top twenty five school,
24:32
Speaker 2: you will get a great education at anywhere else, but
24:35
Speaker 2: spend the least amount of money possible to get the
24:37
Speaker 2: best bang for your buck.
24:39
Speaker 3: Yeah, is kind of where I land.
24:40
Speaker 4: The median college graduate with just a bachelor's degree earned
24:43
Speaker 4: about eighty thousand dollars annually compared with about forty seven
24:47
Speaker 4: thousand for the median worker with only a high school diploma.
24:50
Speaker 3: That's according to data from the New York Fed. And
24:51
Speaker 3: I buy that.
24:53
Speaker 4: What I have not been able to find any reliable
24:55
Speaker 4: information on is I would love to see a compare
25:00
Speaker 4: garrison of incomes with a bachelor's degree compared to incomes
25:04
Speaker 4: with a trade certificate. For whatever reason, there's not much
25:09
Speaker 4: reliable data on that from what I've been able to find,
25:12
Speaker 4: and I suspect that that gap is much narrower for
25:16
Speaker 4: a four year bachelor's degree educated individual versus somebody who
25:21
Speaker 4: spent a year or two in trade school and got
25:24
Speaker 4: that certificate and is working hvac or electrician. That's the
25:29
Speaker 4: piece that I don't have an answer to. And we've
25:31
Speaker 4: seen a lot of college enrollment shift into those types
25:35
Speaker 4: of certificate programs.
25:37
Speaker 3: I think to the.
25:40
Speaker 4: General success and contentment of those who have done so.
25:43
Speaker 4: But I don't really have a financial analysis on one
25:46
Speaker 4: versus the other. Everything that I've seen continues to be, Hey,
25:49
Speaker 4: if you only graduate high school, there are gonna be
25:51
Speaker 4: very few opportunities for you in this economy.
25:53
Speaker 3: Now, this also gets into part of my spiel, which is.
25:58
Speaker 2: The question of should we be looking at college purely
26:02
Speaker 2: as a financial transaction? Because Mike and I have talked
26:06
Speaker 2: like we talked about it with social Security, we talked
26:07
Speaker 2: about with other things. There are plenty of times that
26:09
Speaker 2: people make decisions for their life that are not purely
26:14
Speaker 2: for economic maximization. Sure, if you've ever played a round
26:19
Speaker 2: of golf, you've done this. If you've ever gone fishing,
26:24
Speaker 2: you've done this. If you've ever gone on a vacation,
26:30
Speaker 2: you've done this. Because none of those things are about
26:33
Speaker 2: economic maximization. Rather, they're about actually living your life. So
26:37
Speaker 2: this is the part where I say, look, stop and
26:40
Speaker 2: think about what you actually want to get out of
26:42
Speaker 2: a college experience, because ultimately it's just like a marriage
26:48
Speaker 2: in that you can't depend on your spouse to be everything.
26:51
Speaker 2: People say, oh, I married my best friend.
26:54
Speaker 3: I married.
26:55
Speaker 2: Your best friend is the person who you go with
26:58
Speaker 2: in order to get into trouble. Hoh, house is the
27:00
Speaker 2: person who tells you don't get into trouble. You can't
27:03
Speaker 2: have all those roles assumed by the same person.
27:07
Speaker 3: You can't put everything you can't through this analogy and
27:09
Speaker 3: keep going.
27:10
Speaker 2: You can't put all of your burdens on your spouse
27:12
Speaker 2: the same way you can't put all of them on college.
27:14
Speaker 2: College can't be everything to you at one time. It
27:18
Speaker 2: can be a couple things, but it can't be all
27:20
Speaker 2: of these. So part of this is also, what are
27:23
Speaker 2: you trying to get out of college?
27:26
Speaker 3: Is it?
27:27
Speaker 2: Hey, I'm trying to maximize my economic value of learning.
27:33
Speaker 3: That's one thing.
27:35
Speaker 1: Is it?
27:35
Speaker 3: I want to be exposed to new ideas and new perspectives.
27:39
Speaker 3: That's another thing? Is it?
27:41
Speaker 2: I want to be able to talk to, you know,
27:44
Speaker 2: the brightest people in this field because that's what I
27:46
Speaker 2: want to study in my life.
27:48
Speaker 4: That's an entirely different thing. You want to live animal
27:51
Speaker 4: house and I have the money to do it. Correct,
27:53
Speaker 4: Like they're all kinds.
27:54
Speaker 2: You have to be honest with yourself about this because
27:57
Speaker 2: I think part of the problem with college is that,
27:59
Speaker 2: like often, we want it to be all of these things,
28:02
Speaker 2: and you just you can't have it do that well.
28:05
Speaker 4: And I'll also say that I think it's very unreasonable
28:08
Speaker 4: of us as a society to try and allow a
28:12
Speaker 4: seventeen year old or a sixteen year old to make
28:14
Speaker 4: that decision. I struggle with that a little bit. I
28:20
Speaker 4: think we as parents maybe put a little bit too
28:24
Speaker 4: much of that on a person who is.
28:28
Speaker 3: Not yet been alive for two decades.
28:30
Speaker 2: Yes, and no, because I also think that, like, a
28:32
Speaker 2: really valuable part of what college is is giving people
28:36
Speaker 2: a place where they can make mistakes without it having
28:38
Speaker 2: catastrophic influences on the rest of their life, because hey,
28:41
Speaker 2: you're away from home for the first time. For many
28:43
Speaker 2: people that go, and like you want to have the
28:47
Speaker 2: ability to say and do stupid stuff and not have
28:50
Speaker 2: it come back to bite you twenty years later, just
28:52
Speaker 2: because hey, you made a mistake because you were young
28:54
Speaker 2: and dumb, because we all were young and dumb.
28:56
Speaker 4: Yeah, that's a lot more difficult today than it was
29:00
Speaker 4: fifteen years ago.
29:01
Speaker 2: Yes, So this concludes Chuck's college conversation. If you'd like
29:07
Speaker 2: to come to the next are you offering consulting?
29:10
Speaker 3: Good? Lord?
29:11
Speaker 1: No?
29:11
Speaker 3: Are you kidding? Do people pay you for this?
29:15
Speaker 4: No?
29:16
Speaker 2: And for good reason, because I can't help you get
29:18
Speaker 2: into college. Let's take a quick break here, and when
29:21
Speaker 2: we come back, we'll do a little bit of stack roulette.
29:24
Speaker 1: Market volatility is at its highest point since the pandemic.
29:27
Speaker 1: Keep it here for the most comprehensive coverage of the
29:30
Speaker 1: global trade war. This is the Financial Exchange Radio Network.
29:34
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29:38
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29:41
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30:00
Speaker 2: Anyone in your life who, no matter what they tell you,
30:05
Speaker 2: you just.
30:06
Speaker 3: Don't believe what they're saying. I haven't in a while,
30:11
Speaker 3: but yes.
30:13
Speaker 2: So, Billy McFarland is that person, not in my life,
30:16
Speaker 2: but in all of our lives.
30:17
Speaker 3: Billy, if you're not familiar with.
30:19
Speaker 2: Him, is the person behind the Fire Festival, along with
30:23
Speaker 2: Jaroul who you know, tried to put on this great
30:27
Speaker 2: concert and instead gave people bread, cheese and FEMA tents
30:32
Speaker 2: and no entertainment on some island in the Bahamas.
30:36
Speaker 3: Yeah, Bahamas, Yeah yeah. And that went to prison for it,
30:39
Speaker 3: went to prison for it.
30:40
Speaker 2: And generally, like when someone goes to prison, I'm of
30:42
Speaker 2: the opinion, hey, you did your time, come out, you're
30:45
Speaker 2: a better man, like whatever like that, that's what you
30:48
Speaker 2: hope for. At least, sure Billy doesn't seem to have
30:52
Speaker 2: gotten there. No, so look, in fact, maybe doubling down.
30:56
Speaker 2: Part of this is that he still owes like twenty
30:58
Speaker 2: six million dollars in rest of tuition from the first
31:01
Speaker 2: Fire Festival. Oops, but like late in twenty twenty three,
31:05
Speaker 2: he announced, Hey, we're gonna have Fire Festival two, and
31:08
Speaker 2: it's gonna happen in December of twenty twenty four. Then
31:11
Speaker 2: in September twenty he said no, it's actually gonna be
31:14
Speaker 2: on three days in April of twenty twenty five on
31:16
Speaker 2: a private island off the coast of Mexico. The Mexican
31:18
Speaker 2: government was like, you've never talked to anyone, like, we
31:21
Speaker 2: have no record of this taking place, and this is
31:23
Speaker 2: not what we think is going to be happening. So
31:26
Speaker 2: finally tickets went on sale in February of this year
31:29
Speaker 2: without any lineup announced, and the ticket price has started
31:32
Speaker 2: at fourteen hundred dollars, a veritable bargain in today's day
31:35
Speaker 2: and age, you know, yeah, I mean, gosh. And then
31:38
Speaker 2: you also had a one point one million dollar ticket
31:41
Speaker 2: offer for the Prometheus God of Fire package, which included
31:46
Speaker 2: a four state room yacht in private chauffeur service.
31:49
Speaker 3: No it didn't, narrator, it didn't. The website said at
31:54
Speaker 3: the time.
31:55
Speaker 2: The festival will be held on Isla MoU Harris, a
31:58
Speaker 2: tropical island off Camcun, Mexico. But again, within days, the
32:01
Speaker 2: local government was disputing it, saying, quote, we have no
32:03
Speaker 2: knowledge of this event nor contact with any person or
32:06
Speaker 2: company about it. So instead, Billy has now said that
32:11
Speaker 2: he's putting the fire brand up for sale.
32:14
Speaker 3: What brand?
32:14
Speaker 2: Well, yes, Here's the thing that you start to realize
32:18
Speaker 2: about Billy is that basically he can't figure out how
32:22
Speaker 2: to actually make money putting on the concert because it's
32:27
Speaker 2: just not what he does. But he thinks maybe he's
32:29
Speaker 2: ginned up enough interest to somehow be able to sell
32:31
Speaker 2: this brand to someone who, then quote can have the scale,
32:37
Speaker 2: experience and infrastructure. And it's time to pass the torch.
32:41
Speaker 4: So let's start with a starting point here, Chuck, You
32:45
Speaker 4: and I do not regularly attend music festivals.
32:50
Speaker 3: Is that fair to say? I don't not since my
32:52
Speaker 3: early twenties.
32:52
Speaker 4: Yeah, I have gone to one, but it has been
32:55
Speaker 4: a very long time, so I'm not part of this crowd.
32:59
Speaker 4: But my guess would be the brand reputati, that's what
33:03
Speaker 4: you're selling. You're selling the goodwill of Fire festival. The
33:08
Speaker 4: entire idea is that brand not associated with exactly what
33:13
Speaker 4: you just described, a complete and utter disaster of stranding
33:16
Speaker 4: people on a bohemianan island, Bohemian Bahamian bahamianans different Bahamian
33:23
Speaker 4: island with nothing but cheese sandwiches and FEMA tents.
33:30
Speaker 3: Like, what is that brand worth?
33:34
Speaker 4: And does it include the twenty six million dollars in
33:36
Speaker 4: debt restitution payments that you need to make? No, Like,
33:38
Speaker 4: the only way I would go to a fire festival
33:41
Speaker 4: is if someone paid me to go and cover the
33:43
Speaker 4: disaster of what it could potentially be. Yeah, I mean
33:47
Speaker 4: I would need a pretty big insurance policy on that one,
33:49
Speaker 4: and obviously no one's going to finance that at this point.
33:52
Speaker 4: So I don't know what anyone would pay for this,
33:56
Speaker 4: because if you hear fire festival, all you think of
34:00
Speaker 4: is that disaster?
34:02
Speaker 3: Do you want to pay for it? Now?
34:04
Speaker 2: To be fair, it is a recognizable brand, true, But
34:08
Speaker 2: so was the ed Sel and it still didn't sell. Yeah,
34:11
Speaker 2: the Hindenberg is pretty wrecord correct these days, you know,
34:13
Speaker 2: Like there's a reason why no one travels by blimp anymore.
34:19
Speaker 3: Why what happened?
34:21
Speaker 2: Oh, don't don't spoil it, famous band?
34:25
Speaker 3: Oh boy? Yeah, So that's what McFarland is up to
34:29
Speaker 3: so yeah, I just I don't know. It's yeah, you
34:34
Speaker 3: know the old story of the frog and the scorpion.
34:37
Speaker 3: No you are you? I think so, but you after
34:40
Speaker 3: frog and.
34:41
Speaker 2: Scorpion are sitting on one side of the river and
34:43
Speaker 2: the scorpion says, hey, carry me across. The frog goes, no,
34:46
Speaker 2: you'll sting me, and the Scorpion's like no, no, no,
34:48
Speaker 2: I won't. And then the frog's like, okay, fine, and
34:50
Speaker 2: then halfway across it stings the frog and the frog's like,
34:53
Speaker 2: why do you do that, and the scorpion goes, it's
34:55
Speaker 2: my nature.
34:55
Speaker 3: Sorry. Yeah, that's just what we're seeing here.
34:59
Speaker 2: Yeah, and and yeah, unless you think that this is,
35:02
Speaker 2: you know, just being fooled twice. Billy McFarlane's thing before
35:06
Speaker 2: the Fire Festival was like a black card service in
35:11
Speaker 2: New York City trying to get access to exclusive events
35:14
Speaker 2: that could not provide access to exclusive events.
35:18
Speaker 5: I didn't know that this is like. It was called
35:21
Speaker 5: this doesn't work here. Hang on, I this isnt might
35:25
Speaker 5: as well give me a stop and SHOPBRD. It doesn't work.
35:30
Speaker 3: Here, OK, here we go.
35:31
Speaker 2: It was called magnuses and m ig ni ses and
35:38
Speaker 2: basically it was running in like the late twenty teens.
35:42
Speaker 2: And I'll quote here from Business Insider. A Business Insider
35:46
Speaker 2: report three months prior to Fire Festival explained that there
35:49
Speaker 2: were many complaints from Magnus's members, including event tickets and
35:52
Speaker 2: trips being canceled or rescheduled. According to Bloomberg, well, it's
35:55
Speaker 2: clear that Magnus's was already having difficulties. The festival's very
35:58
Speaker 2: public failure in mcfar subsequent arrest might have been the
36:01
Speaker 2: final blow.
36:03
Speaker 3: So there's kind of a piece, just a scam artist
36:06
Speaker 3: of all scammarts.
36:07
Speaker 2: Look, I respect the hustle on one level, but man,
36:11
Speaker 2: like what is going on there?
36:13
Speaker 3: Yeah?
36:14
Speaker 2: And by on one level, I'm like, have a little
36:17
Speaker 2: bit of self Like, I mean, I think he knows
36:19
Speaker 2: who he is.
36:20
Speaker 4: So how soon before we're all signed up for the
36:26
Speaker 4: multi level vitamin cell.
36:30
Speaker 3: That's not his thing. No, it's all event based. He
36:32
Speaker 3: tries to sell statistic deliver status Like that's that's all
36:35
Speaker 3: it is. Yeah, you know that's uh that's what else
36:38
Speaker 3: he got, uh Southwest. Uh.
36:41
Speaker 4: First of all, the stock price has lost about a
36:43
Speaker 4: fifth of its value so far this year. They've made
36:45
Speaker 4: some shakeups they've added investors, changed up the board, and
36:48
Speaker 4: are in the midst of a pivot of their overall brand.
36:52
Speaker 4: And one of those pivots is changing their boarding status,
36:55
Speaker 4: changing uh what they charge for bags, and realigning themselves
36:59
Speaker 4: much like very most other airlines. And I was suspicious
37:05
Speaker 4: of the strategy to begin with because Southwest has dominated
37:08
Speaker 4: the industry with one reputation, which is value. And if
37:11
Speaker 4: you start charging baggage fees and changing and making yourself
37:15
Speaker 4: more like every other airline, what does that exactly stand for?
37:19
Speaker 4: But it also might be getting paired with like the
37:22
Speaker 4: worst possible time to be making that shift. Had you
37:25
Speaker 4: made this shift five years ago and had maybe a
37:28
Speaker 4: first class cabin that you know flyers could take advantage
37:32
Speaker 4: of in this post COVID stage where people were paying
37:34
Speaker 4: for that stuff, I think it could have been successful.
37:36
Speaker 3: What I'm worried.
37:37
Speaker 4: About is does this change coincide directly with flyers and
37:44
Speaker 4: travelers looking for value again, and does Southwest still maintain
37:48
Speaker 4: that same reputation that they had previously of the value
37:52
Speaker 4: brand in flying.
37:53
Speaker 3: It's a good question.
37:55
Speaker 4: Do I have an answer? But it is a it
37:57
Speaker 4: is a reasonable question, to be fair. The farm on
38:00
Speaker 4: basically right to be fair to the count of Point.
38:02
Speaker 4: The only other one nationally out there I can think
38:04
Speaker 4: of would be Spirit, and they're in bankruptcy, so you
38:06
Speaker 4: know they might still have that brand reputation.
38:09
Speaker 2: We're gonna take a quick break for the next twenty
38:10
Speaker 2: four hours, but when the sun come ups, tomorrow comes up, Tomorrow, I.
38:15
Speaker 3: We're gonna sing Bohemian Rhapsody.
38:17
Speaker 2: We'll see tomorrow on the Financial Exchange