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Is being single bad for the economy? · The Financial Exchange Show

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Speaker 2: Good morning, welcome back to the Financial Exchange. We've got
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Speaker 2: markets in rally mode here, with the NASDA C up
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Speaker 2: two hundred and six points over one percent, the S
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Speaker 2: Ten year treasury yield down to four point five three
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Speaker 2: seven percent. In oil markets, we've got prices moving down
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Speaker 2: as well on potentially Ukrainian peace talks, although it's a
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Speaker 2: pretty muted response, down to seventy one dollars a barrel
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Speaker 2: off half a percent this morning. Let's see anything else
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Speaker 2: that's catching my eyes. The thirty year fixed rate mortgage
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Speaker 2: now sitting at seven point one to three percent. If
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Speaker 2: you're in one of those jumbo mortgage applications, you're sitting
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Speaker 2: at seven point four five five percent on the average.
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Speaker 2: And let me take a look at gas prices yesterday,
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Speaker 2: national average as of yesterday on actually as of today
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Speaker 2: according to tripa A sitting at three dollars sixteen cents
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Speaker 2: and Massachusetts in New Hampshire as well as Rhode Island
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Speaker 2: sitting below that national average for the time being. Anything
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Speaker 2: else catching your eye, Paul, No, no, okay, So then
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Speaker 2: we are going to move on to my hyped story
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Speaker 2: of the day from Alison S. Treger Bloomberg. Is being
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Speaker 2: single bad for the economy? Oh? What a good pre
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Speaker 2: Valentine's Day piece. Thank you Allison for bringing it to us.
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Speaker 2: Here goes the worst ever argument for getting married the
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Speaker 2: day before Valentine's Day is it might be better for
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Speaker 2: the macro economy if I just sucked it up and settled.
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Speaker 2: Seems to be the argument here, but it is a
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Speaker 2: I guess, interesting case study on the efficiencies that one
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Speaker 2: gains in terms of cost of living, income, taxes, everything
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Speaker 2: along those lines of actually being married, and hypothetically a
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Speaker 2: lot of those increases are still felt even if the
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Speaker 2: marriage doesn't end up working out. You think about the
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Speaker 2: decreased taxes you pay, the savings from cohabitating, the increase
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Speaker 2: in social security where you receive even if you end
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Speaker 2: up in divorce. Again, I think these are terrible reasons
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Speaker 2: to get married, And you know, we shouldn't. Probably we
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Speaker 2: probably shouldn't. Bemoan the you know, the lack of taboo
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Speaker 2: around single people. I think that was probably a net
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Speaker 2: positive for society that fewer marriages are resulting in divorce
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Speaker 2: these days, that there isn't quite as much taboo about
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Speaker 2: being single, but it is leading to unpredicted demographic trends
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Speaker 2: across the world these days when it comes to people
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Speaker 2: being okay being single.
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Speaker 3: I like looking at it from this economic perspective too.
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Speaker 3: Not so much have I focused on single versus married,
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Speaker 3: But the fertility rate is a big part of us
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Speaker 3: GDP economic growth. When you're projecting much further down the
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Speaker 3: road decades from now, any way you slice it, the
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Speaker 3: fertility rate is much lesser than decades prior. And part
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Speaker 3: of that is the societal norms of getting married and
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Speaker 3: having a kid have been pushed back tremendously, and also
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Speaker 3: in other instances just not as much of a focus
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Speaker 3: of our generation and the generation below it, where you
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Speaker 3: just don't see the same pressure for some of people
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Speaker 3: to get married or or start a family. And so
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Speaker 3: it does seem like Mike, I bump into it a
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Speaker 3: little bit in my social circles that there are more
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Speaker 3: people than probably certainly than my parents' generation that I
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Speaker 3: meet that are just married and happy to be married
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Speaker 3: and won't start a family, And so what that means
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Speaker 3: just from an economic perspective, everyone's to be clear. My
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Speaker 3: view is you can do whatever the heck you want.
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Speaker 3: It's into my business. But from an economics perspective, that
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Speaker 3: does doesn't grow the population in this country. It doesn't
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Speaker 3: grow the ability for the next person to be able.
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Speaker 2: To get So, just for the record, Paul, you are
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Speaker 2: in favor of mandated marriage requirements at the state level,
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Speaker 2: just like anyone that turns thirty seven arranged marriages? Got it?
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Speaker 2: Got it? Yeah?
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Speaker 3: Quote me on that play the Yeah, there we.
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Speaker 2: Go, Mike Armstrong, misquoting Paul Lane as he typically does. Yeah. Look,
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Speaker 2: this is not a US centric thing. We are seeing
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Speaker 2: this globally, a slow down in fertility rates, and I
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Speaker 2: don't want to bemoan that as a real problem. It
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Speaker 2: is simply a problem for the way in which our
5:40
Speaker 2: social programs are developed. And so that is where it
5:44
Speaker 2: becomes a problem is programs like social security, like Medicare
5:48
Speaker 2: are entirely reliant on the idea that the population will grow.
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Speaker 3: Next generation coming up.
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Speaker 2: Yeah, more young people than there are old people, And
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Speaker 2: that has flipped in China, it has narrowed in the
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Speaker 2: United States, it has flipped in a lot of the
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Speaker 2: developed world across Europe and Japan, and they've had difficult
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Speaker 2: choices to be made in terms of how they continue
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Speaker 2: to support their society and different choices across the board.
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Speaker 2: Some have gone for increased migration that's led to all
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Speaker 2: sorts of just social changes in terms of the makeup
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Speaker 2: of society. Others have attempted to find ways to automate
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Speaker 2: or bring in temporary workers that don't actually get citizenship,
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Speaker 2: and increasingly, should the trend continue in this direction, which
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Speaker 2: don't get me wrong, Like, we're in a better spot
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Speaker 2: in the US than many other countries are, but it's
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Speaker 2: not based on the American born fertility rate. It's largely
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Speaker 2: based on immigration that we've allowed in the United States
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Speaker 2: compared to other countries, and so this will be an
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Speaker 2: increasing problem, especially if our goal is to reverse course
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Speaker 2: on what we've seen in migration over the last several decades.
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Speaker 2: And I think that's still out. The jury still out
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Speaker 2: on that. Like I think there's general agreement among a
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Speaker 2: lot of Americans that we want to crackdown on illegal immigration.
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Speaker 2: I'm not sure that there's consent that there are consensus
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Speaker 2: that we want to just less migration to the United
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Speaker 2: States in general, I think it's merely, hey, we don't
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Speaker 2: want illegal immigration coming into the country. Seems to be
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Speaker 2: the current consensus. And so we'll see how all this
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Speaker 2: plays out. But my point about this is we are
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Speaker 2: narrowly closing in on a problem with the Social Security
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Speaker 2: Administration funding payments to retirees. Medicare faces the exact same problems,
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Speaker 2: and the fixes that I have seen to these programs
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Speaker 2: still do not account for a declining birth rate. In fact,
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Speaker 2: one of the biggest proposals that I have seen from
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Speaker 2: I think it was an actuary or somebody in charge
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Speaker 2: of those numbers at the Social Security Administration themselves put
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Speaker 2: into their formula, Hey, if you want this all to work,
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Speaker 2: you actually need to increase migration into the United States
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Speaker 2: to make these numbers work the way that I'm proposing
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Speaker 2: that we do. And so it leads to a number
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Speaker 2: of interesting questions. But I just I couldn't help but
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Speaker 2: to bring up this article, which points to the decreasing
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Speaker 2: stigma around being single and the economic effects of it,
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Speaker 2: is just the perfect Valentine's Day piece for us to
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Speaker 2: focus on. Let's go ahead and take a quick break here, Tucker.
8:17
Speaker 2: When we come back, going to have a bit of trivia,
8:20
Speaker 2: and then I want to jump inside the Amazon Push
8:22
Speaker 2: to get out workers back to the office. Been pretty
8:25
Speaker 2: messy over there at Amazon. That's next here on the
8:27
Speaker 2: Financial Exchange.
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Speaker 4: Enough for trivia here on the Financial Exchange, and it's official.
9:00
Speaker 4: Nissan and Honda recently ended merger talks after months of negotiations.
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Speaker 4: The two companies will remain separate, but will continue to collaborate.
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Speaker 4: So trivia question today, which Japanese car brand Nissan or
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9:46
Speaker 2: So late last year, Amazon decided to play a game
9:49
Speaker 2: of Chicken with their employees and seemingly lost said game
9:53
Speaker 2: of chicken. What did Amazon do and what are they
9:56
Speaker 2: what are they seeing in terms of the response from
9:58
Speaker 2: their workers.
9:58
Speaker 3: So Amazon told it's the three one hundred and fifty
10:00
Speaker 3: thousand employees that they need to come back into the
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Speaker 3: office five days a week, no more flexible arrangements, nowhere
10:06
Speaker 3: working from home. And basically what happened is more people.
10:10
Speaker 3: They clearly the you know, initiative behind this or the
10:13
Speaker 3: motive behind this. Of course they say it's for synergy
10:16
Speaker 3: and just bringing one everyone back in together for creativity purposes.
10:20
Speaker 3: But we can sort of parse through and say that
10:22
Speaker 3: a lot of this was maybe to trim down headcount
10:25
Speaker 3: for people who weren't interested in coming back.
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Speaker 2: I'm going to quote CEO of Amazon Web Services Matt
10:30
Speaker 2: Garman here quote if it's not for you, then that's okay.
10:33
Speaker 2: You can go find another company if you want to.
10:36
Speaker 2: That was the evidence to me. It said, Yeah, this
10:38
Speaker 2: wasn't about getting people back to the office. This was, hey,
10:41
Speaker 2: we can effectively lay people off, not pony up for
10:45
Speaker 2: their severance, and uh, you know, reduce the headcount a
10:48
Speaker 2: little bit.
10:48
Speaker 3: But most people decided, all right, it's time to go
10:52
Speaker 3: back into the office. The problem being Amazon didn't have
10:55
Speaker 3: enough guests for them across dozens of different offices. Now
10:59
Speaker 3: you hear mixed quotes here in this Wall Street Journal
11:02
Speaker 3: piece where spokespeople from Amazon you know, are stating that
11:06
Speaker 3: these are anecdotes. They're representative of a much smaller batch
11:10
Speaker 3: of offices relative to the size in scale of Amazon.
11:14
Speaker 3: But you have situations where there's two thousand people working
11:18
Speaker 3: at one particular site in Austin in only nine hundred
11:21
Speaker 3: parking spaces. So the security guard turned away Jeff Ferris,
11:26
Speaker 3: a employee for Amazon Web Services for over a decade,
11:29
Speaker 3: on January sixth, when he tried to go back into
11:31
Speaker 3: the office for full time work. So they're continuing to
11:35
Speaker 3: sort out if they'll have enough deaths.
11:37
Speaker 2: Yeah, accordingly, in the San Francisco region, the company is
11:40
Speaker 2: apparently short by at least eight hundred desks in that area. So, yeah,
11:44
Speaker 2: it's been a bit Rocky. And again the reason I
11:48
Speaker 2: just I have to believe that this was the intent
11:51
Speaker 2: is because the alternative is believing that Amazon is grossly incompetent,
11:56
Speaker 2: and I just don't. I don't believe that. Like, we
11:58
Speaker 2: have a lot of negative things about Amazon. I know,
12:02
Speaker 2: the turnover in their warehouses is rough. I don't really
12:05
Speaker 2: love the employee monitoring stuff that they do in those warehouses,
12:08
Speaker 2: and like a lot of not great stuff over at
12:12
Speaker 2: Amazon in terms of their treatment of employees. But they're
12:15
Speaker 2: pretty competent, really like really good at logistics, and so
12:19
Speaker 2: I think they had a fairly good sense that if
12:21
Speaker 2: all of their employees said sure, fine, I'll suck it
12:23
Speaker 2: up and come back to the office even though I
12:25
Speaker 2: don't want to, that they weren't going to have enough
12:28
Speaker 2: space for them. And so I think the evidence is
12:31
Speaker 2: pretty clear here, and it's a lesson to other employers too,
12:35
Speaker 2: who are probably thinking along the same lines of Hey,
12:38
Speaker 2: we've got this office space. Ideally i'd like these workers
12:43
Speaker 2: back in, but maybe I can get rid of some
12:45
Speaker 2: of them. The answer seems to be no, you can't.
12:47
Speaker 2: No bleased in this gigte.
12:48
Speaker 3: And it speaks to the quits raak that we talk
12:50
Speaker 3: about often that if you did this in twenty one
12:52
Speaker 3: or twenty two, you're probably getting a lot of people
12:54
Speaker 3: jumping ship. But that was an even stronger labor market
12:58
Speaker 3: than we sit today, where it's a strong labor market,
13:00
Speaker 3: but the amount of job jumping between company and company
13:04
Speaker 3: is plateaued in is much lower than it was in
13:06
Speaker 3: the heyday of everyone looking for employees out there.
13:09
Speaker 2: According to a survey of folks that left Massachusetts, the
13:13
Speaker 2: high cost of living is the main motivating factor when
13:17
Speaker 2: it comes to people exiting this state. There is a
13:19
Speaker 2: survey conducted of former Massachusetts residents who had moved to
13:24
Speaker 2: either Florida or New Hampshire, and the obvious reason they
13:28
Speaker 2: stated was that the just outrageous cost of living was
13:32
Speaker 2: the main problem here. This is according to a business
13:35
Speaker 2: group called the mass Opportunity Alliance. Just under half of
13:39
Speaker 2: respondents cited the state's policies or governance as a major
13:43
Speaker 2: role as well. And you know, Florida and Florida, sorry, Florida,
13:47
Speaker 2: New Hampshire two areas that have been traditional pretty big
13:50
Speaker 2: draws for Massachusetts residence. I'm sure you know plenty Paul
13:54
Speaker 2: who have left the state in favor of one of
13:57
Speaker 2: those two. You've had the increase of the millionaire's tax
14:01
Speaker 2: that went into place very recently, I think in twenty
14:04
Speaker 2: twenty four, and you know, the evidence are pretty is
14:10
Speaker 2: pretty clear. Like nobody is talking about how they left
14:13
Speaker 2: the state for better school systems. It is largely that.
14:17
Speaker 2: I think the data that I saw was that Massachusetts
14:20
Speaker 2: has the second or third highest cost of living in
14:22
Speaker 2: the country, only second to Hawaii.
14:25
Speaker 3: Right, So.
14:28
Speaker 2: I don't really see much in the way of intended
14:31
Speaker 2: policy to fix this issue. By the way, like I know,
14:33
Speaker 2: we covered the Lexington, Massachusetts story where they've if you
14:36
Speaker 2: missed that, rezoned a large portion of the town for
14:39
Speaker 2: multi family development to try and bring housing costs down.
14:42
Speaker 2: But that is very few and far between. From what
14:45
Speaker 2: we are seeing. There is not a big push for
14:48
Speaker 2: housing development. And we can talk about tax reform and
14:51
Speaker 2: everything else in this in this state, but if you
14:55
Speaker 2: really want to reduce cost, housing is what you have
14:57
Speaker 2: to go after.
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Speaker 3: Do you buy that this is bleeding the state of talent?
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Speaker 3: It's going to be a longer term problem for Massachusetts.
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Speaker 2: Yeah, again, very long term. I do buy that. I
15:07
Speaker 2: think that this is a problem because it becomes a
15:10
Speaker 2: self fulfilling one. You can continue to attract the incredibly
15:15
Speaker 2: talented talent because you know, if you're paying somebody half
15:20
Speaker 2: a million dollars a year, then they can afford to
15:23
Speaker 2: live in most of this state. But in a lot
15:27
Speaker 2: of cases, like you know, you go talk about what's
15:30
Speaker 2: one of these towns, I mean Wellesley, if you go
15:33
Speaker 2: talk about Newton, if you go talk about Winchester, in
15:37
Speaker 2: order to actually afford let's call it, a four bedroom
15:41
Speaker 2: home in one of those towns, or even a three
15:43
Speaker 2: bedroom home, if you're not pulling in half a million
15:47
Speaker 2: dollars a year as a household. That is quite literally
15:50
Speaker 2: the threshold these days with housing prices and mortgage rates
15:53
Speaker 2: where they are right now. And so I don't mean
15:56
Speaker 2: to like overstate things. I don't think that's two far
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Speaker 2: off in terms of, hey, what do I need If
16:02
Speaker 2: I'm going to get a seven point four percent mortgage rate,
16:06
Speaker 2: pay these prices on a home and live in one
16:08
Speaker 2: of these towns that's a near commute to the Boston
16:12
Speaker 2: area for work and excellent school systems, you are talking
16:14
Speaker 2: about a household income of half a million dollars In
16:17
Speaker 2: a lot of cases, in these surrounding Boston metro areas.
16:19
Speaker 2: So yeah, how do you attract state workers, teachers, all
16:25
Speaker 2: of these other things becomes a real problem. And Massachusetts
16:30
Speaker 2: is such a small state, you know, just geographically a
16:33
Speaker 2: small state that you know, it doesn't It's not New
16:36
Speaker 2: York where oh yeah, you know, I can live in
16:37
Speaker 2: Buffalo and still have a relatively low cost of living.
16:40
Speaker 2: There is no know, the closest thing we have there
16:42
Speaker 2: is Springfield, and even there you've got a relatively high
16:45
Speaker 2: cost of living because again, small state. And so I've
16:48
Speaker 2: made this point about the millionaire's tax when we passed that.
16:51
Speaker 2: You know, there is nowhere in this state other than
16:55
Speaker 2: maybe Provincetown, Nantucket, Martha's Vineyard, where you have to drive
17:01
Speaker 2: more than forty five minutes to get to another state.
17:04
Speaker 2: And so yeah, just putting yourself in the shoes of
17:07
Speaker 2: that person that's an executive at a company or a
17:10
Speaker 2: business owner making three million dollars a year, why would
17:14
Speaker 2: you stay right? And I'll live in Portsmouth, New Hampshire,
17:18
Speaker 2: I'll send my kids to private school, and I'll avoid
17:21
Speaker 2: the extra four percent tax. And I think we are
17:23
Speaker 2: seeing a lot of that even from middle class folks
17:26
Speaker 2: who say, hey, I can go live in Rhode Island.
17:28
Speaker 2: I can still keep my job at Mass General, pull
17:31
Speaker 2: in six figures as a nurse, and reduce my housing
17:35
Speaker 2: costs by half. That's eventually a bit of a problem
17:40
Speaker 2: for the state. Sure, I think it leads to more congestion.
17:45
Speaker 2: It leads to all sorts of bigger problems so that
17:47
Speaker 2: the state will have to focus on in the years
17:49
Speaker 2: to come. And again, I think the only real solution
17:52
Speaker 2: to it is bring housing costs down, and the state
17:56
Speaker 2: doesn't really have any control of that because that's all
17:58
Speaker 2: controlled at the local municipal level. Elon Musk says he
18:02
Speaker 2: will pull his bid for open ai should the company
18:06
Speaker 2: remain a nonprofit. So this is a bit in the weeds,
18:10
Speaker 2: and I think it's worth exploring for a moment here.
18:13
Speaker 2: Open Ai, creator of chat GPT, was founded as a nonprofit.
18:16
Speaker 2: Elon Musk was part of that. Elon Musk now has
18:19
Speaker 2: his own competing AI project that is being run by Twitter.
18:23
Speaker 2: And I don't believe a thing that he says when
18:27
Speaker 2: it comes to, you know, wanting this to remain a
18:30
Speaker 2: nonprofit for the public good reasons. I think he wants
18:33
Speaker 2: it to ma and remain a nonprofit so that his
18:36
Speaker 2: company can better compete with it.
18:39
Speaker 3: That could be part of it. There's all sorts of
18:42
Speaker 3: background to this story where he was initially part of
18:44
Speaker 3: the group that was behind open ai, and that was
18:47
Speaker 3: the initial mantra of the collective was to make it
18:51
Speaker 3: a nonprofit. But they've spun out a profit for profit subsidiary.
18:54
Speaker 3: So there's a lot that goes into it. It's hard
18:57
Speaker 3: to keep track all the stuff that he says. It's
18:59
Speaker 3: not really for sale at all. It's an unsolicited offer.
19:02
Speaker 3: So jeez, I don't even know where to go with this.
19:04
Speaker 2: It's probably Yeah, you're on the board of open ai
19:08
Speaker 2: and considering taking this thing for profit. Like it or not,
19:12
Speaker 2: you are required to take this bit seriously, yea, so
19:15
Speaker 2: long as it's a.
19:15
Speaker 3: Legitimate you even pull the funds together for this.
19:18
Speaker 2: Allegedly he's got backers. You know, he's been forced to
19:22
Speaker 2: buy companies that he I.
19:24
Speaker 3: Love, I loved All Mends Responsible buy Twitter for nine
19:27
Speaker 3: points seventy five billion.
19:28
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Speaker 4: Trivia question today was which Japanese car brand, Nisan or
20:08
Speaker 4: Honda is older. It will be Nissan that was founded
20:12
Speaker 4: under its original name in nineteen eleven and release their
20:15
Speaker 4: first car in nineteen fourteen. Honda was founded in nineteen
20:19
Speaker 4: forty eight and released their first car the following year.
20:23
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20:26
Speaker 4: a Financial Exchange Show t shirt. Congress to John and
20:30
Speaker 4: we played trivia every day here on the Financial Exchange.
20:34
Speaker 4: See complete contest rules at Financial Exchange Show dot com.
20:37
Speaker 2: Peace out of market Watch this morning, the hot CPI
20:41
Speaker 2: is reigniting stagflation fears. Here's why that would be disastrous
20:45
Speaker 2: for your four oh one K. So let's first start
20:49
Speaker 2: on the fact that, yes, stagflation would be disastrous for
20:53
Speaker 2: most investments. If you go take a look at the
20:57
Speaker 2: last time we had stagflation nineteen seven through eighty two,
21:01
Speaker 2: ten year period where most investments lost money. Ten year
21:06
Speaker 2: Treasury notes fell twenty two percent, S and P five
21:09
Speaker 2: hundred fell seventeen percent, corporate pawds down thirteen t bills down,
21:13
Speaker 2: three home prices flat for that ten year time period.
21:16
Speaker 2: This is all according to the NYU Stern School of Business.
21:20
Speaker 2: US small caps did appreciate by about ninety five percent,
21:23
Speaker 2: and gold appreciated by two hundred and ten percent. I
21:26
Speaker 2: will point out, however, that that gold appreciation, most economists
21:30
Speaker 2: and historians largely point at that as a result of
21:34
Speaker 2: deepegging the dollar to the price of gold under Nixon.
21:38
Speaker 2: Under Nixon, right, I believe he did that, So I'm
21:42
Speaker 2: not sure that would even repeat itself. And I don't
21:44
Speaker 2: think you should really use any of this as, you know,
21:47
Speaker 2: portraying what might come of the future. My point would
21:51
Speaker 2: be that I have no evidence that this hot CPI
21:54
Speaker 2: report that we just got is actually reigniting any stagflation fears.
21:58
Speaker 2: I mean, I'm not I'm surely not seeing it in
22:00
Speaker 2: equity markets. You're not seeing it in bond markets. I'm
22:05
Speaker 2: not saying it's impossible that it will come to pass,
22:09
Speaker 2: but I see no evidence that investors are worried about it.
22:12
Speaker 3: No, there's two factors to this. You just pointed out.
22:15
Speaker 3: One of them. Inflation concerns are a little bit elevated
22:18
Speaker 3: this morning off the heels of that report, but we
22:21
Speaker 3: still need to see more data come through. And then
22:22
Speaker 3: the second piece is with stagflation, you have to have
22:26
Speaker 3: slow to no economic growth. We just came off a
22:29
Speaker 3: period where for the last year we were at two
22:32
Speaker 3: and a half percent economic growth and the year prior
22:35
Speaker 3: we were sitting at a higher clip than that. And
22:38
Speaker 3: so even looking at the Q four numbers for GDP
22:42
Speaker 3: and the Q one projections, I just can't get behind
22:45
Speaker 3: the argument of no economic growth. That's still a very
22:49
Speaker 3: far bridge to get over to where we can have
22:52
Speaker 3: that argument to be sitting at two and a half
22:54
Speaker 3: percent or three percent economic growth to no growth. That
22:58
Speaker 3: would take a really si isamac issue which could occur,
23:02
Speaker 3: But I'm just not there.
23:03
Speaker 2: Yeah, you know, we talked about this a lot in
23:05
Speaker 2: twenty twenty one and two that you know, inflation was there,
23:08
Speaker 2: but he was talking about stagflation. But we kept going
23:11
Speaker 2: back to the point like you need two sides of
23:13
Speaker 2: that equation to get stagflation. You've got inflation, but you're
23:16
Speaker 2: not seeing an economic slow down. And then that was
23:18
Speaker 2: what defined that time period. Who knows what's to come next.
23:22
Speaker 2: I just I'm really really hesitant to say that we
23:25
Speaker 2: are going to see another repeat of what was a
23:28
Speaker 2: once in a century event back in the seventies of stagflation.
23:32
Speaker 2: But it does remind me to a conversation that I
23:34
Speaker 2: was having just yesterday in fact, with you know folks,
23:37
Speaker 2: and I think that this it follows a lot of
23:40
Speaker 2: conversations I've had around the same subject, which is, hey,
23:43
Speaker 2: I'm getting close to retirement, and so I dramatically pull
23:47
Speaker 2: back the risk of my investment portfolio. And I see
23:51
Speaker 2: that time and again as though you know, you turn
23:54
Speaker 2: sixty five, you retire, and you're expecting to die two
23:57
Speaker 2: days later. Like that is sometimes how people literally invest
24:01
Speaker 2: is oh well, I'm in a different stage of life now,
24:03
Speaker 2: I can't make it up. I need to pull back
24:05
Speaker 2: on all risk. And so what it leads me to
24:08
Speaker 2: believe is that on average, people are way more afraid
24:14
Speaker 2: of a market downturn, depression, recession, you know, twenty percent,
24:19
Speaker 2: thirty forty fifty percent sell off like we saw back
24:22
Speaker 2: in Oh wait. They are deathly concerned of that, but
24:25
Speaker 2: aren't all that concerned about inflation, it seems to me,
24:28
Speaker 2: and I have to say that at this point in time,
24:31
Speaker 2: I do think that both of them are kind of
24:33
Speaker 2: equal risks for folks, right, Like, Yeah, I talk to
24:36
Speaker 2: a lot of people who are definitely over their skis
24:38
Speaker 2: in terms of taking risk in their investment portfolio, but
24:41
Speaker 2: an equal number of them are taking so little risk
24:45
Speaker 2: that if inflation runs just a percentage or two higher
24:48
Speaker 2: than what we've experienced over the course of the last
24:51
Speaker 2: few decades, then they could be better worse off than
24:53
Speaker 2: the person that's taking too much risk in some cases.
24:56
Speaker 2: And I bring all this up because I know that
25:01
Speaker 2: there are more people that are in that boat of
25:03
Speaker 2: saying I'm approaching retirement. I'm already retired. I'm terrified of
25:08
Speaker 2: that market downturn. I can't take that risk. I'm worried
25:11
Speaker 2: about it. But maybe your focus should actually be on
25:15
Speaker 2: something else, like inflation. You know, I'm so worried about
25:18
Speaker 2: the market downturn, but I end up missing out on
25:21
Speaker 2: some of the best return years that we've had in
25:24
Speaker 2: recent history because of that fear. And now I've got
25:27
Speaker 2: a real risk of running out of money because of inflation.
25:30
Speaker 2: This is all importantly highly customized to the individual. You know,
25:35
Speaker 2: every person is a little bit different with this because
25:37
Speaker 2: it's all dependent on your spending patterns. How you invest
25:40
Speaker 2: where your risk tolerance is. And it's also why I
25:43
Speaker 2: think those you know ten question surveys about risk tolerance
25:47
Speaker 2: are all but useless. If you're facing these types of questions, Hey,
25:52
Speaker 2: I'm approaching retirement and I'm not sure what to do
25:54
Speaker 2: with my investment portfolio. I'm already retired. I'm worried I'm
25:58
Speaker 2: too conservative or too risky with things, and I'm looking
26:01
Speaker 2: to make a shift Before you do, so, educate yourself
26:05
Speaker 2: on why you should or shouldn't make those changes. All
26:08
Speaker 2: of this stuff, Like I said, it can't just be
26:11
Speaker 2: done by figuring out and doing a quick ten question survey.
26:15
Speaker 2: It requires work, It requires budgeting, it requires planning to
26:18
Speaker 2: really understand what that's going to mean for you. If
26:21
Speaker 2: you're facing those questions and you could use some help,
26:24
Speaker 2: call the folks at Armstrong Advisory Group. We have these
26:26
Speaker 2: conversations every day, the numbers eight hundred three nine three
26:31
Speaker 2: four zero zero one. We offer free consultations, so folks
26:34
Speaker 2: throughout New England over phone, via zoom, in person, whatever
26:38
Speaker 2: your preference is, but again, pick up the phone and
26:40
Speaker 2: call the numbers eight hundred three nine three four zero
26:44
Speaker 2: zero one.
26:45
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:47
Speaker 1: registered investment advisor. Nothing in the ad or in any
26:50
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
26:53
Speaker 1: your own financial tax into state planning advisors before making
26:56
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
26:59
Speaker 1: advisory service.
27:00
Speaker 2: Apple stock market performance increasingly made in China piece here
27:05
Speaker 2: arguing that look, you know, in terms of growth, there
27:08
Speaker 2: is not a whole lot more to be had here
27:11
Speaker 2: in the United States. You can certainly introduce new products,
27:13
Speaker 2: but you've already got half of this the smartphone market
27:17
Speaker 2: pretty much globally. Now, China remains a big risk for
27:21
Speaker 2: this company. They've seen a backlash against their products from
27:24
Speaker 2: a nationalism standpoint, and I hesitate to think of any
27:29
Speaker 2: company that is more set up to lose should trade
27:33
Speaker 2: trade tensions between the United States and China escalate.
27:36
Speaker 3: Yeah. Apple got about seventeen percent of its fiscal twenty
27:39
Speaker 3: twenty four revenue from the Greater China region, so it
27:42
Speaker 3: is a pretty significant piece of the pie there. It's
27:45
Speaker 3: twenty six percent of its revenue came from Europe in
27:48
Speaker 3: more than forty percent from the America, so it's not
27:51
Speaker 3: as large as some of those other areas. But it's
27:53
Speaker 3: pretty significant, not to mention the manufacturing side of things.
27:56
Speaker 2: Right, that's just the revenue, yeah, right, seventeen percent of
27:59
Speaker 2: revenue is direct from the China region. But when you
28:02
Speaker 2: think about where all the components that actually go into
28:04
Speaker 2: your phone come from, if there is a you know,
28:06
Speaker 2: a push and a backlash there, it stands to slow
28:10
Speaker 2: down production or increase prices across the iPhone universe, which
28:14
Speaker 2: I think is you know what Tim Cook and Apple
28:16
Speaker 2: have been trying to mitigate over the last few years
28:18
Speaker 2: by looking at Vietnam, looking at India, looking at other
28:20
Speaker 2: manufacturing bases, but largely finding that nobody can do it
28:24
Speaker 2: quite like China. So in the first Trump administration, Tim
28:27
Speaker 2: Cook was very successful about, you know, lobbying Congress, lobbying
28:31
Speaker 2: the Trump administration to exempt their products from import tariffs
28:35
Speaker 2: and other things that they would face. It's a different
28:39
Speaker 2: administration this time, right, It's a different set of priorities,
28:41
Speaker 2: and I'll be very intrigued to see if, if, if
28:45
Speaker 2: pressure on China is the ultimate goal of this administration,
28:48
Speaker 2: which I'm going to I'm not sure, Like I don't
28:51
Speaker 2: know that that is the single priority for this administration,
28:55
Speaker 2: but that seems to be a lot of what they
28:56
Speaker 2: are talking about and focusing on. Then I'm not sure
29:01
Speaker 2: that Apple gets treated the same way that they did
29:03
Speaker 2: last time.
29:03
Speaker 3: Time will tell no, they're not the uh. I don't
29:05
Speaker 3: think they're as sexy as a company as they were
29:08
Speaker 3: to this administration back in twenty eighteen. It seems like
29:11
Speaker 3: the AI focused companies are getting a lot more attention.
29:13
Speaker 2: Let's take a quick break here on the Financial Exchange.
29:16
Speaker 2: When we come back, a bit of stack Roulette. That's next.
29:20
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30:43
Speaker 2: Time for a bit of STACKERU let here, Paul, what
30:45
Speaker 2: do you have to kick things off for?
30:47
Speaker 3: Mike? I'm very much here for this next story. Meet
30:50
Speaker 3: the adults who swear by the kids menu For someone
30:54
Speaker 3: who doesn't have the most sophisticated palette out there myself,
30:58
Speaker 3: I think this is a fantastic approach an idea.
31:02
Speaker 2: Paul Lane, chicken nuggets, pasta with butter, and get me
31:06
Speaker 2: quote me on that.
31:07
Speaker 3: Get me some crayons too, and a cup with a lid.
31:11
Speaker 3: The number of orders for kids meals placed by adults
31:14
Speaker 3: rose twenty eight percent last year compared to twenty nineteen.
31:16
Speaker 3: I don't know how anyone put this together, but it's
31:19
Speaker 3: from industry research firm Sircana, I guess, And what you're
31:24
Speaker 3: seeing is a lot of more people out there with
31:27
Speaker 3: higher food prices at restaurants looking to the kids menu
31:30
Speaker 3: to turn for staple meals and all jokes aside the
31:35
Speaker 3: idea of the kids menu, I think we can all
31:38
Speaker 3: agree that menu portions at restaurants are too big in general.
31:42
Speaker 3: I had this thing growing up as a kid where
31:45
Speaker 3: I would really feel forced to eat everything on my
31:48
Speaker 3: plate when we would go out to dinner as a family,
31:51
Speaker 3: and you'd end up regretting it at the end because
31:54
Speaker 3: the portions are big, and you just would feel lousy
31:57
Speaker 3: by stuffing your face to clean the plate off as
31:59
Speaker 3: best you could because you don't go out to dinner
32:01
Speaker 3: all the time.
32:02
Speaker 2: Have you thought about therapy?
32:04
Speaker 3: I have since turnover a leaf. Chuck is actually with
32:06
Speaker 3: me on this. I've since turned over a new leaf
32:08
Speaker 3: in my adulthood where I'm paying the tab now, so
32:11
Speaker 3: I feel less pressure.
32:12
Speaker 2: No hold on the leaf that you have turned, is
32:14
Speaker 2: that you are now ordering from the kids men you.
32:16
Speaker 6: No, no, not that just just not eating, not feeling
32:20
Speaker 6: the pressure to eat everything on my plate. And I
32:22
Speaker 6: had to clarify, hey, don't don't kill yourself finishing you
32:25
Speaker 6: know this big steak or whatever, take it home or
32:28
Speaker 6: just you know, move along and don't kill yourself.
32:31
Speaker 2: I have a hot take. I think this is the
32:33
Speaker 2: poor man's version of Disney Adults.
32:36
Speaker 3: It's actually based out of someone in Orlando who's doing
32:39
Speaker 3: all the exact reviewing. And yeah, as the body type
32:41
Speaker 3: of someone who mighty out a lot of fast.
32:44
Speaker 2: Wow, okay, we're going there. This to me especially like, okay,
32:49
Speaker 2: you know what if we want to have a compelling
32:51
Speaker 2: argument about whether portion sizes are too large, I get
32:54
Speaker 2: all of that. But the other people that were interviewed, like, hey,
32:57
Speaker 2: sometimes you get a fun little surprise and your McDonald's
33:00
Speaker 2: happy meal. I'm not going I get to go play
33:02
Speaker 2: with the Pokemon toys now, Like all right, that that
33:05
Speaker 2: is kind of weird to me that I know that
33:10
Speaker 2: you are, you know, sitting at the table and playing
33:13
Speaker 2: with the finger skateboard with with your wife, but I
33:16
Speaker 2: think that she's got some feedback for us.
33:18
Speaker 3: The great thing now is we have three young kids,
33:20
Speaker 3: so we can do whatever the heck we want a table.
33:23
Speaker 2: That's true. Yeah, So I'm totally fine with people ordering
33:27
Speaker 2: off the kids menu. I know some restaurants don't allow it,
33:29
Speaker 2: and they say, like, no, that's like if you order
33:32
Speaker 2: an adult meal too, you can have the kids meal.
33:34
Speaker 2: My only policy is if you're going to order off
33:37
Speaker 2: the kids menu, then you have to be shamed publicly,
33:40
Speaker 2: so like there's no you can do it, but the
33:43
Speaker 2: waiter's going to make a big deal of it and
33:45
Speaker 2: kind of like call out to the rest of restaurant like, hey,
33:47
Speaker 2: this guy's this. This thirty seven year old dad of
33:50
Speaker 2: three is ordering chicken nuggets off the kids men, you
33:52
Speaker 2: and anyone have anything to say about this.
33:54
Speaker 3: It's like the birthday song that they do in some places. Instead,
33:57
Speaker 3: you got it.
33:57
Speaker 2: So that would be the policy that I would like,
33:59
Speaker 2: because I think the punishment is fitting. Like, you know,
34:01
Speaker 2: if you want to do it, that's fine, but you're
34:04
Speaker 2: gonna be shamed for it as as you should be.
34:06
Speaker 2: Fair enough, okay, deal the death of Biden's EV charger
34:09
Speaker 2: push turns out to have been greatly exaggerated. So one,
34:14
Speaker 2: I still think that this was a really really really
34:18
Speaker 2: really really dumb and poorly thought out policy. I'm sorry
34:21
Speaker 2: I keep calling presidents and former president's policy stupid. I
34:25
Speaker 2: don't I know that that's causing problems, but this push was. Hey,
34:31
Speaker 2: the Biden mistration had incentivized a lot of build out
34:33
Speaker 2: of EV charging networks, and my problem with that the
34:37
Speaker 2: whole time was it's great if you want to just
34:40
Speaker 2: try and push out these EV charging networks, but we
34:42
Speaker 2: don't have the electricity generation infrastructure to support such a push,
34:47
Speaker 2: and so you're kind of putting the cart before the
34:50
Speaker 2: horse as far as I was concerned on this. In
34:53
Speaker 2: any case, what they're finding is the Trump administration is obviously,
34:56
Speaker 2: you know, pushing to peel some of this stuff back,
34:58
Speaker 2: but the V demand, while not growing as fast as
35:02
Speaker 2: a lot of the automakers were anticipating, it's kind of
35:05
Speaker 2: there now. And so whether the public pushes there or not,
35:09
Speaker 2: this infrastructure projects are seemingly still continuing on and seeing
35:14
Speaker 2: further completion when it comes to this stuff. But I
35:18
Speaker 2: still don't think that fixes the underlying problem of the
35:21
Speaker 2: electricity generation required to actually do this type of thing,
35:26
Speaker 2: and so I still wonder what the long term effect
35:28
Speaker 2: is there. The savior to all of this was going
35:32
Speaker 2: to be artificial intelligence, because hey, Microsoft needs a bunch
35:36
Speaker 2: of electricity in order to power these tools. That's even
35:39
Speaker 2: being called into question now as to whether or not
35:41
Speaker 2: these companies are going to need as much electricity to
35:44
Speaker 2: power these data centers to power artificial intelligence. And so
35:49
Speaker 2: I had gone into this as like a good news
35:51
Speaker 2: bad news thing on the AI, which is bad news
35:54
Speaker 2: would be short term Americans are going to be competing
35:57
Speaker 2: for electricity with private, for profit companies that are trying
36:01
Speaker 2: to buy it on the public market to power their
36:03
Speaker 2: data centers. But long term that will actually increase supply
36:07
Speaker 2: of electricity generation in the country and build out our infrastructure.
36:11
Speaker 2: Even that now is a little bit unclear to me
36:13
Speaker 2: with the deep seek news as to whether or not
36:15
Speaker 2: that happens.
36:16
Speaker 3: I go the other way on it, Mike. I think
36:17
Speaker 3: it's only going to make the barrier to entry lower
36:20
Speaker 3: for the adoption of AI cross all sorts of different
36:23
Speaker 3: sectors of businesses by bringing the cost down to run
36:26
Speaker 3: the systems, and then you just have expanded demand. If
36:28
Speaker 3: permitted that it could actually enhance productivity and you know,
36:32
Speaker 3: help businesses out there, and then you would need to
36:34
Speaker 3: build out the grid. But still a lot to be
36:36
Speaker 3: discovered there.
36:37
Speaker 2: The other stuff that has been popular on the you
36:40
Speaker 2: know Biden administration tax breaks and incentives things. The heat
36:45
Speaker 2: pumps one is an interesting one to me because we
36:47
Speaker 2: actually had looked into replacing our heating system recently we
36:50
Speaker 2: decided to hold off. I did it part of it,
36:53
Speaker 2: but you know, big big tax incentives, right, You had,
36:56
Speaker 2: both from Massachusetts and the federal government, massive tax savings
36:59
Speaker 2: on these things. They've been fairly popular for obvious reasons.
37:02
Speaker 2: They dramatically bring down the cost of updating to a
37:07
Speaker 2: state of the art heating and cooling system. But without
37:11
Speaker 2: those incentives in there, I'll be interested to see whether
37:14
Speaker 2: or not that industry cools down.
37:16
Speaker 3: We didn't go full heat pumps, We just did kind
37:18
Speaker 3: of partial and I would word to the wise, when
37:20
Speaker 3: it gets down to ten degrees and you just only
37:21
Speaker 3: have heat pumps in Massachusetts, then you have young kids.
37:24
Speaker 3: We don't have this problem. I'm really glad we don't.
37:26
Speaker 3: But yeah, good luck, because it just doesn't it doesn't
37:29
Speaker 3: carry that weight.
37:30
Speaker 2: Yeah, markets remain pretty strongly in positive territory, off their
37:36
Speaker 2: highs for the day, but the NASDAC now up one
37:38
Speaker 2: hundred and forty nine points three quarters of one percent,
37:41
Speaker 2: the S and P up twenty eight points, a little
37:43
Speaker 2: bit less than half percent, in the Dow Jones Industrial
37:46
Speaker 2: Average up now one hundred points or a quarter of
37:49
Speaker 2: one percent. The smaller size Rustle two thousand up about
37:52
Speaker 2: a quarter percent as well, and they yield on the
37:55
Speaker 2: ten year Treasury continue to move down, offsetting the increase
37:59
Speaker 2: in yield that we see yesterday, Sitting right now at
38:01
Speaker 2: four point five four five percent. That is all the
38:05
Speaker 2: time we have for today's financial exchange. We will be
38:07
Speaker 2: right back at it tomorrow. Folks, have a great rest
38:09
Speaker 2: of your day. We'll talk to you then