Latest / The Financial Exchange Show / Boomers vs. Millennials, Bank Warnings, and a Housing Slowdown

Transcript

Boomers vs. Millennials, Bank Warnings, and a Housing Slowdown · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:03
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:05
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:08
  Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:11
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:14
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:17
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 0:20
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:23
  Speaker 1: this program do not endorse each other or their services.
• 0:26
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:28
  Speaker 1: for referrals and are not affiliated. This is the Financial
• 0:34
  Speaker 1: Exchange with Mike Armstrong and Mark Vandetti. Your exclusive look
• 0:39
  Speaker 1: at business and financial news affecting your day, your city,
• 0:43
  Speaker 1: your world. Stay informed and up to date about economic
• 0:47
  Speaker 1: and market trends, plus breaking business news every day. The
• 0:51
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:54
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:58
  Speaker 1: heroes by visiting DA five K DOC Boston and making
• 1:02
  Speaker 1: a donation today. Face is the Financial Exchange with Mike Armstrong,
• 1:07
  Speaker 1: and Mark Vandetti.
• 1:09
  Speaker 2: Good morning, Welcome back to the Financial Exchange. It's Mike,
• 1:12
  Speaker 2: Mark and Tucker with you, and I'm sorry, I'm giggling.
• 1:15
  Speaker 2: We've got a lot to cover on the show and
• 1:17
  Speaker 2: this is not breaking news. But Christine Legard, the European
• 1:20
  Speaker 2: Central Bank President, is giving an interview with Bloomberg right now, and.
• 1:23
  Speaker 3: The headline is so useless.
• 1:25
  Speaker 2: I just can't even avoid talking about the economy between
• 1:29
  Speaker 2: baseline and adverse scenario that could cover nearly any scenario
• 1:34
  Speaker 2: that I can possibly imagine. But thank you Christine for
• 1:37
  Speaker 2: that interview. I'm sure that Bloomberg is the one doing
• 1:39
  Speaker 2: a bad job here with this. I'm sure she had
• 1:41
  Speaker 2: something more intelligent to say that the economy, then, the
• 1:43
  Speaker 2: economy is more is between baseline and adverse. Again, that
• 1:48
  Speaker 2: means almost nothing to me, but I just couldn't help
• 1:52
  Speaker 2: but giggle at that. It's Mike, Mark and Tucker with
• 1:54
  Speaker 2: you here. I think I already said that, and markets
• 1:56
  Speaker 2: are up. We are in the midst of bank earned.
• 2:00
  Speaker 2: We have some news out of Fed nominee Kevin Walsh
• 2:04
  Speaker 2: and his move towards a Senate hearing, and then we
• 2:09
  Speaker 2: also crossed a benchmark yesterday that is worth noting on
• 2:13
  Speaker 2: the S and P five hundred.
• 2:15
  Speaker 3: So we're going to be covering all that and more.
• 2:17
  Speaker 2: But let's talk about that benchmark on the SMP five hundred,
• 2:20
  Speaker 2: because against all odds, the SMP five hundred is now
• 2:25
  Speaker 2: higher than it was when it closed on Friday February
• 2:28
  Speaker 2: twenty seventh, before the strikes and events in Iran. So
• 2:34
  Speaker 2: on Friday February twenty seventh, we close on the S
• 2:37
  Speaker 2: and P five hundred at sixty eight seventy eight and
• 2:39
  Speaker 2: eighty eight, sorry, sixty eight seventy eight point eighty eight.
• 2:44
  Speaker 2: We closed the day yesterday at sixty eight eighty six
• 2:47
  Speaker 2: twenty four, So crossing that threshold here where the stock
• 2:50
  Speaker 2: market again in spite of higher oil prices and concerns
• 2:54
  Speaker 2: about global shortages of potential goods, the SMP five hundred
• 2:59
  Speaker 2: at least now higher than it was on the close
• 3:02
  Speaker 2: of Friday February twenty seventh, which I just find absolutely fascinating. Obviously,
• 3:06
  Speaker 2: there are still a lot of concerns about what is
• 3:08
  Speaker 2: going on in Iran. Our ability ability isn't really in question,
• 3:12
  Speaker 2: but willingness to blockade the straight of horror moves and
• 3:17
  Speaker 2: what that means for I ran China. We'll be talking
• 3:20
  Speaker 2: about all of this in length, but important piece to
• 3:24
  Speaker 2: recognize here because at least in the conversations that I have,
• 3:27
  Speaker 2: folks are still of the mindset, oh, markets must be
• 3:30
  Speaker 2: taking a hit. It's been so volatile. And my response
• 3:33
  Speaker 2: is it really hasn't volatile. Maybe you know you've had
• 3:37
  Speaker 2: a few days where you started down, ended up and
• 3:39
  Speaker 2: vice versa. But the downturn in markets has been very
• 3:44
  Speaker 2: mild here domestically, pretty mild on other major developed foreign
• 3:48
  Speaker 2: markets as well, and quite optimistic that this will blow
• 3:53
  Speaker 2: over and move into way better place shortly, so we
• 3:56
  Speaker 2: will see where it goes. I want to turn over
• 3:59
  Speaker 2: to bank earnings. We've had Goldman Sachs report yesterday. They
• 4:02
  Speaker 2: dropped on their earnings initially about three percent. They're up
• 4:08
  Speaker 2: a little bit today, making back some of those losses.
• 4:11
  Speaker 2: JP Morgan stock and early trading is off one quarter
• 4:14
  Speaker 2: of one percent, and Wells Fargo stock off about four
• 4:17
  Speaker 2: and a half percent. High level here, Mark, let's talk
• 4:20
  Speaker 2: about what we did see from the bank earnings, because,
• 4:23
  Speaker 2: as we've talked about before, there is not oftentimes a
• 4:27
  Speaker 2: lot to learn about the broader economy or a broader
• 4:29
  Speaker 2: state of things from bank earnings. They are so incredibly
• 4:32
  Speaker 2: nuanced in the way that they account for different items
• 4:35
  Speaker 2: and the fact that they are you know, we call
• 4:37
  Speaker 2: them the big banks for a reason. They have so
• 4:39
  Speaker 2: many different business lines that you know, one can be
• 4:42
  Speaker 2: doing exceptionally well and another might drag it down. But
• 4:45
  Speaker 2: high level, anything that you took away from these major bank,
• 4:49
  Speaker 2: strategically important banks earnings this quarter, no good?
• 4:53
  Speaker 3: Okay, so next next question you know that was coming.
• 4:57
  Speaker 4: Sorry, I mean I'm not a bank analyst. I'm sure
• 4:59
  Speaker 4: an analyst in this sector would have a million very
• 5:02
  Speaker 4: boring things to say about it.
• 5:04
  Speaker 2: Yeah, so high level here, JP Morgan's earnings reported a
• 5:07
  Speaker 2: profit of sixteen and a half billion that was better
• 5:10
  Speaker 2: than consensus. Over at JP the revenue came in ten
• 5:14
  Speaker 2: percent higher, again surpassing forecast, which we talk about this
• 5:18
  Speaker 2: like it's some big surprise. Companies almost always beat their
• 5:22
  Speaker 2: earnings projections. Investment banking fees were a big piece of
• 5:27
  Speaker 2: JP Morgan's overall story. And again, so therefore the stock
• 5:32
  Speaker 2: you would think, oh through the roof, No, it's down
• 5:34
  Speaker 2: one quarter of one percent.
• 5:35
  Speaker 3: Wells Fargo, whose stock is down quite a bit.
• 5:37
  Speaker 2: They reported earnings of a buck sixty a share, just
• 5:41
  Speaker 2: barely beating their analyst estimates of buck fifty eight. Revenue
• 5:44
  Speaker 2: was up only six percent year over year, and that
• 5:47
  Speaker 2: missed expectations, so that would likely be a key driver
• 5:50
  Speaker 2: of what's causing concern there. And their provisions for credit
• 5:54
  Speaker 2: losses rose twenty one percent to one point one four billion.
• 5:57
  Speaker 2: I think if there's one thing that I'm willing to
• 5:59
  Speaker 2: highlight light about these three major banks who have reported
• 6:03
  Speaker 2: so far, it's that all of them, some more than others,
• 6:08
  Speaker 2: but all of them are taking, you know, future loan
• 6:11
  Speaker 2: loss provisions, meaning they're worried about some of their loans souring.
• 6:15
  Speaker 2: And the dollar amounts that they're talking about are the
• 6:19
  Speaker 2: highest now that you've seen since COVID. They are well
• 6:23
  Speaker 2: below where they were during COVID, but they're the highest
• 6:26
  Speaker 2: levels we've seen since that point in time when everyone
• 6:29
  Speaker 2: was worried about all sorts of customers failing and defaulting
• 6:32
  Speaker 2: on their loans, and so I think that's worth noting.
• 6:36
  Speaker 2: I'll also say that just because they're taking the loan
• 6:39
  Speaker 2: losses now does not mean that they will actually occur.
• 6:42
  Speaker 2: This happened during COVID. I'm sure Mark, you, even not
• 6:46
  Speaker 2: being a bank analyst, remember it. You know, they had
• 6:48
  Speaker 2: a bunch of loan loss provisions taken out in the
• 6:51
  Speaker 2: first two quarters of the year, and then as every
• 6:54
  Speaker 2: company out there got flooded with cash from the United
• 6:57
  Speaker 2: States government, those losses did not occur, and they slowly
• 7:01
  Speaker 2: you know, booked them back onto their accounting in the
• 7:06
  Speaker 2: end of twenty twenty and be beginning of twenty twenty one.
• 7:09
  Speaker 3: So we will see where this goes.
• 7:10
  Speaker 2: But I think it's worth noting at least that the
• 7:13
  Speaker 2: assumptions for losses on their book of loans is the
• 7:16
  Speaker 2: highest that it's been since that period of time.
• 7:19
  Speaker 3: That's about all I've got on back earnings.
• 7:21
  Speaker 4: Yeah, you know, overall earnings are expected to be up
• 7:25
  Speaker 4: about thirteen percent year over year.
• 7:29
  Speaker 3: Q for Q one, we're getting for all earnings.
• 7:31
  Speaker 4: Yeah, yeah, I'm sorry, I'm talking the entire SMP five hundred.
• 7:37
  Speaker 4: Stocks are up over the year over the same period
• 7:41
  Speaker 4: about thirty percent.
• 7:42
  Speaker 5: They've been flat for a while.
• 7:43
  Speaker 4: Stocks are flat on the year and have really haven't
• 7:46
  Speaker 4: moved much since what like last fall. The combination of
• 7:51
  Speaker 4: those two things, or the upshot, the result of those
• 7:54
  Speaker 4: two things. Is that evaluations have come down somewhat. The
• 7:58
  Speaker 4: price per unit of earning speak so call pe ratio
• 8:03
  Speaker 4: no matter how you want to measure it. And that's
• 8:05
  Speaker 4: not necessarily a bad thing. It may be frustrating the
• 8:07
  Speaker 4: stocks have seemingly been running in place, but if this
• 8:11
  Speaker 4: is how valuations become somewhat more reasonable, yeah, relative to
• 8:17
  Speaker 4: maybe a hell long term saying to happen. Yeah, it's
• 8:19
  Speaker 4: never happened before, but that would be a very welcome outcome.
• 8:22
  Speaker 2: The US oil blockade has entered its second day now
• 8:25
  Speaker 2: and hasn't been heavily tested. I was, you know, we
• 8:30
  Speaker 2: just talk about these things when it comes to US
• 8:31
  Speaker 2: military as though it's a foregone conclusion. I was reminded
• 8:34
  Speaker 2: of just how difficult an oil blockade, or sorry, a
• 8:37
  Speaker 2: ship blockade actually is. When you talk about the straight here,
• 8:41
  Speaker 2: you actually have to have the willingness to cut off
• 8:44
  Speaker 2: a moving vessel and then board it and prevent it
• 8:47
  Speaker 2: from leaving. And so it has not been thoroughly tested
• 8:51
  Speaker 2: how willing the US military is to do that, But
• 8:54
  Speaker 2: we are saying that we are and we will see
• 8:56
  Speaker 2: what happens here. In the meantime, you have a few
• 8:59
  Speaker 2: different countries and organizations warning about the shortages of different
• 9:03
  Speaker 2: refined products. In Australia, they there have been a few
• 9:07
  Speaker 2: regional areas that have reported shortages of diesel fuel just
• 9:11
  Speaker 2: an inability to get their hands on it in certain
• 9:13
  Speaker 2: areas of the country, and a group of European airlines
• 9:17
  Speaker 2: has warned regulators there that, you know, should product not
• 9:21
  Speaker 2: flow within the next three weeks, then they would expect
• 9:24
  Speaker 2: jet fuel shortages and begging the European government to do
• 9:27
  Speaker 2: something about that if things do not move along in
• 9:30
  Speaker 2: the next three weeks. I'll also say that if you
• 9:32
  Speaker 2: are a European airline industry group, you are probably going
• 9:37
  Speaker 2: to have some pretty dramatic forecasts about what could happen
• 9:39
  Speaker 2: here in order to incentivize something to happen. So, you know,
• 9:43
  Speaker 2: we will see I think so far, where you've seen
• 9:46
  Speaker 2: the you know, the first signs of real problems have
• 9:48
  Speaker 2: been in developing nations across Southeast Asia that are experiencing
• 9:52
  Speaker 2: fuel shortages and massive swings in prices, and I expect
• 9:55
  Speaker 2: that in those same places is where you will see
• 9:58
  Speaker 2: issues with airlines, bankruptcies, et cetera before others. So that's
• 10:01
  Speaker 2: the state of things across the Middle East. I don't
• 10:05
  Speaker 2: this might be the shortest time we spend on this
• 10:07
  Speaker 2: subject of Iran since the war broke out, because quite honestly,
• 10:12
  Speaker 2: this is just one of those few times where it
• 10:13
  Speaker 2: seems like there's a real incentive for negotiations to happen.
• 10:17
  Speaker 2: On the United States side, there is not an immense
• 10:20
  Speaker 2: amount of new news coming out of there, and until
• 10:23
  Speaker 2: we see either the shortage issue get worse or more
• 10:29
  Speaker 2: discussion on negotiations either breaking down or succeeding, I don't
• 10:33
  Speaker 2: know that I have much else to say about it now.
• 10:34
  Speaker 4: Spot prices are coming down a lot oils down about
• 10:38
  Speaker 4: five percent today, and front end futures prices or near
• 10:43
  Speaker 4: term futures prices June July coming down, but less so
• 10:49
  Speaker 4: so there seems to be less panic buying, which suggests
• 10:54
  Speaker 4: that markets are reading into this probably exactly what should
• 10:57
  Speaker 4: be read into the current state of things, which is
• 10:59
  Speaker 4: the wants to.
• 11:00
  Speaker 5: Wrap this up.
• 11:01
  Speaker 2: Let's take a quick break when we come back. We
• 11:03
  Speaker 2: talked a bit about it yesterday, but I don't think
• 11:05
  Speaker 2: I did the subject justice. The Wall Street Journal attempted
• 11:08
  Speaker 2: to measure who had it tougher financially, Boomers versus millennials.
• 11:13
  Speaker 2: This age old question of these generations butting heads and
• 11:17
  Speaker 2: blaming each other for the world's problems. We're talking about
• 11:20
  Speaker 2: boomers versus millennials. Next on the Financial Exchange.
• 11:24
  Speaker 1: Remember you can watch the show live every day on
• 11:27
  Speaker 1: our YouTube page. We've got market updates and breaking business
• 11:30
  Speaker 1: news all morning long, plus a full archive of all
• 11:33
  Speaker 1: our show's content. It's all there with that click of
• 11:36
  Speaker 1: a button at YouTube dot com. Slash the Financial Exchange Show,
• 11:40
  Speaker 1: breaking business news as it happens only here on the
• 11:44
  Speaker 1: Financial Exchange Radio Network.
• 11:50
  Speaker 6: Remember you can watch the show live every day on
• 11:53
  Speaker 6: our YouTube page while breaking business news and all of
• 11:56
  Speaker 6: our content is also archived, so if you want to
• 11:59
  Speaker 6: go back and then see discussion about a specific topic,
• 12:02
  Speaker 6: it's all there with the click of a button. Just
• 12:05
  Speaker 6: searchs the Financial Exchange on YouTube and be sure to
• 12:09
  Speaker 6: hit that subscribe button.
• 12:11
  Speaker 2: All right, Mark, We were talking before the break about
• 12:15
  Speaker 2: the never ending, the never ending debate of who had.
• 12:20
  Speaker 3: It tougher the millennials of the Boomers.
• 12:21
  Speaker 2: The millennials came of age during the Great Recession, had
• 12:26
  Speaker 2: to raise young children through the COVID shutdowns. The Baby
• 12:32
  Speaker 2: Boomers were their first years in the labor market were
• 12:37
  Speaker 2: sometimes defined by the oil crisis and very high interest rates,
• 12:43
  Speaker 2: making housing costs quite expensive. I will once again make
• 12:47
  Speaker 2: the point that I did yesterday, which is we can
• 12:50
  Speaker 2: talk about this from a purely financial and cost of
• 12:53
  Speaker 2: living and economic sense. I will throw out the opinion
• 12:57
  Speaker 2: that I have, which is that's all irrelevant when you
• 12:59
  Speaker 2: can sid of the fact that forty percent of baby
• 13:02
  Speaker 2: boomer mails served in the military compared to only four
• 13:05
  Speaker 2: percent of millennials, and there was a draft in Vietnam,
• 13:08
  Speaker 2: and I think all of those factors are far more
• 13:10
  Speaker 2: relevant to the real having it harder conversation. But the
• 13:14
  Speaker 2: Wall Street Journal is trying to talk about something else,
• 13:17
  Speaker 2: which is a real conversation about financial factors. So let's
• 13:22
  Speaker 2: dig in there, Mark, and you can start wherever you want.
• 13:25
  Speaker 2: You can start with your conclusion first, or your data
• 13:28
  Speaker 2: points first. Where would you go on when trying to
• 13:31
  Speaker 2: answer this question of who has it financially easier or
• 13:34
  Speaker 2: harder than millennials versus the boomers.
• 13:36
  Speaker 4: Well, it depends on how you want to define that.
• 13:39
  Speaker 4: I mean it if it's strictly home ownership, which is
• 13:42
  Speaker 4: a very conspicuous and inflammatory I guess you could say issue, well,
• 13:48
  Speaker 4: homes were more affordable if it's boomers for boom pardon
• 13:55
  Speaker 4: me for boomers, thank you. Yeah, And I'll just say
• 13:58
  Speaker 4: in the earlier period versus the period.
• 14:01
  Speaker 3: Even when you factor in interest rates.
• 14:04
  Speaker 4: In terms of carrying the cost, I'm I'm just defining
• 14:08
  Speaker 4: that as how many times median income home prices as
• 14:14
  Speaker 4: a multiple of median income. There are other there are
• 14:17
  Speaker 4: other ways, as the article illustrates of defining that. But yeah,
• 14:25
  Speaker 4: rates would have been on average in the seventies and
• 14:28
  Speaker 4: eighties higher in the nineties lower.
• 14:31
  Speaker 3: So did they when your home and if you refinanced.
• 14:35
  Speaker 4: And I don't think their calculations were that sophistic, were
• 14:39
  Speaker 4: like dynamic.
• 14:40
  Speaker 3: I don't pretty tough to do that.
• 14:41
  Speaker 4: So okay, so let's just call that a slight edge
• 14:45
  Speaker 4: to the earlier period of home affordability. Stock returns were
• 14:49
  Speaker 4: much higher in the earlier period. In the eighties and nineties,
• 14:51
  Speaker 4: they averaged seventeen percent. That's just an arithmetic average, simple average.
• 14:57
  Speaker 4: And since the turn of the millennium they've averaged about
• 15:00
  Speaker 4: ten percent. So it was easier to build wealth if
• 15:03
  Speaker 4: you were investing in the stock market in the earlier period.
• 15:07
  Speaker 3: How much have they evered since twenty ten?
• 15:10
  Speaker 4: Since twenty ten? Oh yeah, I'm thinking, yeah, millennials were
• 15:13
  Speaker 4: not active. Let's see just a simple average.
• 15:17
  Speaker 3: So difficult.
• 15:18
  Speaker 2: Fourteen point eight is yeah, so a similar, similar type
• 15:22
  Speaker 2: of situation to the eighties and nineties.
• 15:24
  Speaker 4: Slight edge for the earlier period, yep. So just strictly
• 15:29
  Speaker 4: using those sort of dry measures, you could give a
• 15:33
  Speaker 4: slight edge to the earlier period.
• 15:36
  Speaker 2: So one piece that I think, you know, everyone is
• 15:39
  Speaker 2: probably screaming at it from home if they're a millennial.
• 15:42
  Speaker 2: The cost of college tuition and fees is up about
• 15:44
  Speaker 2: fifteen hundred percent since.
• 15:46
  Speaker 5: Night, and there's been a lot of inflation. They're sure.
• 15:48
  Speaker 2: So if you view that as a necessity to get
• 15:50
  Speaker 2: a good job, which a lot of Americans do, if
• 15:53
  Speaker 2: you view the you know, the steps of the government
• 15:56
  Speaker 2: in terms of pushing student I won't say they pushed
• 15:58
  Speaker 2: student loans, but guaranteeing student loans and setting that up
• 16:02
  Speaker 2: that program up as problematic, then yeah, a lot more
• 16:05
  Speaker 2: millennials are going to be debt lated and because of
• 16:08
  Speaker 2: their education.
• 16:09
  Speaker 3: Than baby boomers were.
• 16:11
  Speaker 2: I think, you know, every baby boomer is out there screaming, well,
• 16:14
  Speaker 2: that was a choice and that's also true, although it
• 16:16
  Speaker 2: was a choice made by a seventeen year old, so
• 16:18
  Speaker 2: what the hell.
• 16:18
  Speaker 3: Do they know?
• 16:20
  Speaker 2: So that is a very reasonable point to make. I
• 16:25
  Speaker 2: would measure it in one other way here, which is
• 16:30
  Speaker 2: millennials average net worth by around age thirty five exceeds
• 16:37
  Speaker 2: that of baby boomers at the same time, even when
• 16:40
  Speaker 2: adjusted for inflation. So I mean, again, a lot to
• 16:44
  Speaker 2: say about averages, but when you add in home equity
• 16:47
  Speaker 2: plus everything else that you have here, the average millennials
• 16:52
  Speaker 2: net worth, according to data from Federal Reserve, now exceeds
• 16:57
  Speaker 2: that of baby boomers when they reach the same age.
• 17:00
  Speaker 2: The baby boomers obviously today have now far exceeded that
• 17:04
  Speaker 2: because their home price appreciation over the last six years
• 17:07
  Speaker 2: and stock market appreciation over the last fifteen, you know,
• 17:10
  Speaker 2: the head start that they had at that point.
• 17:12
  Speaker 3: Baby Boomers now represent.
• 17:13
  Speaker 2: About a half of the total net worth of the
• 17:17
  Speaker 2: United States, so you know, we can talk about where
• 17:20
  Speaker 2: it's gone since then. But by the mid thirties, yeah,
• 17:23
  Speaker 2: the millennials actually had more average net worth than the
• 17:26
  Speaker 2: average baby boomer. So I don't know, even when I
• 17:29
  Speaker 2: look at the financial data here, I think the biggest
• 17:31
  Speaker 2: piece in favor of arguing that millennials had it harder
• 17:34
  Speaker 2: was clearly the cost of education and cost of things generally.
• 17:40
  Speaker 2: But education is the big one that I can point
• 17:42
  Speaker 2: to when I look at things like shelter costs, food costs,
• 17:46
  Speaker 2: other major expenses. Are they up substantially yes? Are they
• 17:50
  Speaker 2: up way more than real incomes? No, They're about in
• 17:54
  Speaker 2: line with those.
• 17:54
  Speaker 4: Other I think you'd have to really have blinders on
• 17:56
  Speaker 4: to make the argument that life was somehow better. In
• 17:59
  Speaker 4: the seventies, eight and nineties, many diseases were a death sentence.
• 18:03
  Speaker 4: Air conditioning indoors was not uncommon, but not as pervasive
• 18:08
  Speaker 4: as it is. Sure today is easier and cheaper to
• 18:11
  Speaker 4: get healthy foods, and maybe part of this doesn't jump
• 18:15
  Speaker 4: out of the data. You have to have lived. I'll
• 18:18
  Speaker 4: be fifty four this year, so I sort of straddled both.
• 18:21
  Speaker 4: I remember the seventies, eighties, and certainly the nineties. In
• 18:24
  Speaker 4: the eighties as well, they're pretty vivid too. Anyone who
• 18:27
  Speaker 4: would claim that people have it had it easier than
• 18:31
  Speaker 4: than today doesn't know what they're talking about. You would
• 18:35
  Speaker 4: when the trend and growth is up, you would always
• 18:38
  Speaker 4: choose the very latest possible period in which to live.
• 18:41
  Speaker 4: I'll say again, so many diseases were unbearable in that period,
• 18:47
  Speaker 4: which are a nuisance today. And again, so many were
• 18:50
  Speaker 4: death sentences which no longer are.
• 18:52
  Speaker 2: I'll point out you can text the show and give
• 18:55
  Speaker 2: us your opinion too. We'll talk about in the next segment.
• 18:57
  Speaker 2: But six one, seven, three, six, two thirteen five. Obviously,
• 19:01
  Speaker 2: if you're watching on social media YouTube, you can you
• 19:04
  Speaker 2: can post there as well and make your point about this.
• 19:07
  Speaker 3: But I don't know. It's a fun conversation, But I'm
• 19:10
  Speaker 3: with you one.
• 19:11
  Speaker 2: I think every generation has, by definition, had it easier
• 19:14
  Speaker 2: than the last generation before them.
• 19:16
  Speaker 4: That's that's always true, Mike, But it is true when
• 19:18
  Speaker 4: the trend line is going up. Yeah, and I'm talking
• 19:20
  Speaker 4: about growth increasing, right.
• 19:21
  Speaker 2: Yeah, you can make a different argument for the Great
• 19:23
  Speaker 2: Wars and things like that. Quick break Wall Street Watch
• 19:25
  Speaker 2: coming up next. Then we'll get to your tech staffs that.
• 19:40
  Speaker 1: Like us on Facebook and follow us on Twitter. Act
• 19:43
  Speaker 1: TFE show. Breaking business news is always first right here
• 19:47
  Speaker 1: on the Financial Exchange Radio Network. Time out, full Wall
• 19:52
  Speaker 1: Street Watch, treking the stocks, the data and the headlines
• 19:56
  Speaker 1: driving markets so far today, right here on the Financial
• 19:59
  Speaker 1: Exchange Radio Network.
• 20:01
  Speaker 6: Markets aren't positive territory in a busy day as the
• 20:04
  Speaker 6: US blockade of the straight up for moves continues. Wall
• 20:07
  Speaker 6: Street also sifting through a new batch of first quarter
• 20:10
  Speaker 6: bank earnings. Right now, the Dow is up about a
• 20:13
  Speaker 6: third of a percent, SMP five hundred up two thirds
• 20:16
  Speaker 6: of a percent, is Nasdaq ralling over one percent, or
• 20:19
  Speaker 6: two hundred and seventy three points. RUSTED two thousand also
• 20:22
  Speaker 6: up over one percent. Tenure treas reeled down one basis
• 20:25
  Speaker 6: point at four point two eighty one percent, and Oil
• 20:29
  Speaker 6: pulling back over five and a half percent, trading right
• 20:32
  Speaker 6: around ninety three dollars.
• 20:33
  Speaker 5: A barrel over to.
• 20:35
  Speaker 6: Bank earnings, where JP Morgan Chase reported stronger than expected
• 20:38
  Speaker 6: first quarter results. However, the stock is down nearly one
• 20:41
  Speaker 6: percent after the bank lowered its net interest income guidance.
• 20:44
  Speaker 6: Wells Fargo plunging over six percent after the firm's first
• 20:48
  Speaker 6: quarter results failed to impress. Blackrock beat first quarter earnings
• 20:52
  Speaker 6: and revenue estimates, sending shares up three percent. City Group
• 20:56
  Speaker 6: said it's profit climb forty two percent from a year ago,
• 20:59
  Speaker 6: sending shares up by about half or percent. Outside of
• 21:01
  Speaker 6: bank earnings, Amazon a great to acquire satellite company Global
• 21:05
  Speaker 6: Star in a eleven and a half billion dollar deal
• 21:08
  Speaker 6: that will allow Amazon that will allow its Amazon li
• 21:12
  Speaker 6: Leo satellite network to offer direct to device connections as
• 21:16
  Speaker 6: it looks to compete with Elon, Musk Starlink. Amazon up
• 21:19
  Speaker 6: by two percent, while global Star stock is up by
• 21:23
  Speaker 6: nine percent and American Airline stock is rallying eight percent
• 21:28
  Speaker 6: after Bloomberg reported that United Airlines CEO Scott Kirby has
• 21:31
  Speaker 6: floated a possible combination with American Airlines. I'm Tucker Silvan.
• 21:37
  Speaker 3: That is Wall Street.
• 21:38
  Speaker 2: Watch Tucker get any uh, get any points or any
• 21:43
  Speaker 2: points good or bad points about on the text debate
• 21:46
  Speaker 2: on the text line or couple of texts here on
• 21:49
  Speaker 2: the text line six one, seven, three, six, two, thirteen
• 21:52
  Speaker 2: eighty five one text out of the five h eight
• 21:55
  Speaker 2: saying one thing you should mention with stock market returns
• 21:58
  Speaker 2: from millennials and boom is it's easier now for millennials
• 22:03
  Speaker 2: because we have low cost index funds, which weren't a
• 22:06
  Speaker 2: thing back in the seventies.
• 22:07
  Speaker 6: Returns are lower now, but it's harder to screw up
• 22:11
  Speaker 6: Texas other than nine to seven eight.
• 22:13
  Speaker 2: That's a fascinating one respond, way easier to screw up well,
• 22:18
  Speaker 2: way less costly to invest, which is a good thing.
• 22:22
  Speaker 2: Way easier today to screw up based on Yeah, I
• 22:25
  Speaker 2: was using how rapidly you could make a change.
• 22:27
  Speaker 3: Yeah, they were a thing.
• 22:29
  Speaker 4: So it's always a good question. Was that actually investible
• 22:31
  Speaker 4: in the period you're talking about. I was using the
• 22:33
  Speaker 4: eighties and nineties, and they were investible.
• 22:35
  Speaker 5: Four h one K.
• 22:36
  Speaker 4: Plants came on the scene in eighty one legally, and
• 22:39
  Speaker 4: then of course they just exploded with when Fidelity and
• 22:42
  Speaker 4: others realized they could offer them to employers.
• 22:45
  Speaker 5: Quote for free.
• 22:47
  Speaker 4: So yeah, major asset classes have been investible since the
• 22:50
  Speaker 4: nineteen since nineteen eighty, but again with.
• 22:52
  Speaker 2: The ease of trading, the low cost of trading, all
• 22:55
  Speaker 2: of which I think are a good thing. They're positive
• 22:56
  Speaker 2: for capital markets, positive for liquidity.
• 22:59
  Speaker 3: I think way easier.
• 23:01
  Speaker 2: For somebody to screw up their investments today than back
• 23:05
  Speaker 2: in the seventies and eighties. The counterpoint would be, there
• 23:08
  Speaker 2: are far more investor protections in twenty twenty six than
• 23:11
  Speaker 2: there were back in the ninety.
• 23:12
  Speaker 4: Yeah, nobody's talking about the seventies. You could yet to
• 23:15
  Speaker 4: go into a Sear's and open a Dean Winter Account
• 23:19
  Speaker 4: or go to E. F. Hutton Downtown or something to
• 23:21
  Speaker 4: do it. So of course it's easier that the texter
• 23:24
  Speaker 4: says returns are lower or have been on average, is
• 23:29
  Speaker 4: what I said. But it's harder, he says or she
• 23:32
  Speaker 4: to screw up. Your contention is well, might be easier
• 23:35
  Speaker 4: to screw.
• 23:35
  Speaker 2: Up, might be easier to screw up with how easily
• 23:37
  Speaker 2: you can make trades and move things around. But you
• 23:40
  Speaker 2: don't have the stuff from boiler room occurring quite as frequently.
• 23:45
  Speaker 2: But there's plenty of other scams out there, so I'm
• 23:46
  Speaker 2: not sure you can compare that. What was the next one?
• 23:48
  Speaker 6: I know the texts coming out of the nine seventy
• 23:50
  Speaker 6: eight boomer here the two thousand and nine crash change
• 23:53
  Speaker 6: everything for me, job house four to one, k al
• 23:56
  Speaker 6: at once was at a bad age to recover okay
• 23:58
  Speaker 6: now but still working part time. Most wealth tied up
• 24:02
  Speaker 6: in real estate thanks to the COVID bump.
• 24:05
  Speaker 3: Would I would buy that argument?
• 24:08
  Speaker 2: I think it's very compelling to say that the worst
• 24:11
  Speaker 2: financial crisis we have seen since the Great Depression was
• 24:14
  Speaker 2: more impactful for boomers than millennials by far.
• 24:18
  Speaker 3: What do you think easy to make millennials.
• 24:21
  Speaker 4: Just millennials like the crash because they bought stocks more cheaply.
• 24:25
  Speaker 4: So you root for that if you're early in your
• 24:28
  Speaker 4: savings career, so to speak. It's a little bit cynical,
• 24:30
  Speaker 4: but it's true you want to buy stocks more cheaply.
• 24:33
  Speaker 4: One of the look again, I don't really like the
• 24:36
  Speaker 4: setup here. I think anybody who says it's impossible to
• 24:40
  Speaker 4: compare well, because it's the experience of individuals.
• 24:44
  Speaker 3: Yeah, trying to compare the experience of an entire generation.
• 24:47
  Speaker 4: I'll say again, when you live in mortal fear of
• 24:49
  Speaker 4: dying at sixty two, you live a different life than
• 24:53
  Speaker 4: you live today.
• 24:54
  Speaker 3: Sure, so life's just.
• 24:56
  Speaker 4: Far more comfortable today in so many ways. That said,
• 25:00
  Speaker 4: it'd have been a little bit easier to build wealth,
• 25:02
  Speaker 4: but to what end life expectancy was shorter and quality
• 25:05
  Speaker 4: of life was lower. Anybody alive today lives better than
• 25:08
  Speaker 4: like Henry the eighth because you're not going to die
• 25:11
  Speaker 4: of dysentery.
• 25:13
  Speaker 3: Fair, you know, any other any other points talking to that?
• 25:16
  Speaker 6: People made Yeah one on YouTube again our YouTube pages,
• 25:20
  Speaker 6: the Financial Exchange show, search out on YouTube, subscribe plaze.
• 25:25
  Speaker 6: This comment says the boomers had a guaranteed opportunity. The
• 25:29
  Speaker 6: millennials had the lie of opportunity.
• 25:31
  Speaker 5: What guaranteed opportunity? Let me start over.
• 25:36
  Speaker 6: Now, Mark, the boomers had a guaranteed opportunity. The millennials
• 25:41
  Speaker 6: had the lie of opportunity.
• 25:43
  Speaker 5: To give in to them.
• 25:44
  Speaker 6: Just get a good education and you're guaranteed a good
• 25:47
  Speaker 6: paying job, while boomers remove the pension program from retirement
• 25:50
  Speaker 6: and introduce the four to one k scam that's on YouTube.
• 25:54
  Speaker 3: That's a lot.
• 25:56
  Speaker 2: I don't think boomers had a guarantee of success. I
• 26:00
  Speaker 2: think there are plenty of pitfalls for them too. Did
• 26:03
  Speaker 2: millennials get lied to about the promise of an education?
• 26:07
  Speaker 3: Yeah?
• 26:07
  Speaker 4: Maybe, Well, you can't read history backwards. Nobody was guaranteed anything.
• 26:13
  Speaker 4: It just it all happened.
• 26:15
  Speaker 5: To work out.
• 26:16
  Speaker 4: Yeah, and again, this is why comparison cross generation comparisons,
• 26:20
  Speaker 4: using highly subjective criteria, it's kind of folly.
• 26:24
  Speaker 2: Here's a few more of the points that I'll make.
• 26:26
  Speaker 2: Nineteen eighty life expectancy at birth in the United States
• 26:29
  Speaker 2: seventy three point six. Most recent data we have seventy
• 26:33
  Speaker 2: eight point four. Life expectancy far higher, and it was
• 26:37
  Speaker 2: higher even before that during you know, pre.
• 26:38
  Speaker 5: Com and that's mortality. Morbidity is another factor.
• 26:42
  Speaker 3: Infant mortality rates cut in half since.
• 26:44
  Speaker 5: Now that eight that's related to life expected it is.
• 26:46
  Speaker 2: Yeah, but again, twelve point six infant deaths per thousand
• 26:51
  Speaker 2: births were now at five and a half. Yeah, even
• 26:54
  Speaker 2: you know, even the real median income. Right, we make
• 26:56
  Speaker 2: all these arguments about affordability, and that's a big one
• 26:59
  Speaker 2: that I think people are app but unable to express
• 27:02
  Speaker 2: real household median income in the United States eighty three
• 27:06
  Speaker 2: thousand and seven thirty today, that compared to sixty four
• 27:10
  Speaker 2: to twenty back in nineteen eighty four.
• 27:11
  Speaker 3: That adjusts for inflation.
• 27:14
  Speaker 2: So look, I am very sympathetic to the affordability conversation today.
• 27:19
  Speaker 2: I think housing affordability is terrible, abysmal today. I think
• 27:23
  Speaker 2: there are some real societal issues, and the division of
• 27:26
  Speaker 2: wealth is another one that you could speak to of.
• 27:29
  Speaker 2: You know, hey, you know, real household income where it
• 27:31
  Speaker 2: more normally distributed, would be a heck of a lot
• 27:34
  Speaker 2: higher than it is now. But again, by every measure,
• 27:38
  Speaker 2: I do think that millennials had it a little bit
• 27:41
  Speaker 2: easier than boomers. And why would you want anything else?
• 27:44
  Speaker 4: Ouse You can't just take one aspect of current life
• 27:49
  Speaker 4: and say, I don't like this. I want to swap
• 27:50
  Speaker 4: this out with fifty years ago. But I want to
• 27:52
  Speaker 4: keep my eighty year life expectancy. I want to keep
• 27:56
  Speaker 4: modern chemotherapy and electro chem an elector whatever they're whatever
• 28:00
  Speaker 4: they're calling the latest variation on that. I want to
• 28:02
  Speaker 4: keep everything I like about it, my smartphone, et cetera.
• 28:05
  Speaker 4: But I just want houses to be more affordable. That's
• 28:07
  Speaker 4: an infantile argument. You can't hold everything else constant. You
• 28:12
  Speaker 4: get to take the whole bundle. Agree, which would you
• 28:15
  Speaker 4: which set of circumstances would you rather live with? Nineteen
• 28:19
  Speaker 4: seventy five, where if you had like chest pains, they say,
• 28:23
  Speaker 4: oh it's angina, take some nitrates, pop a few, and
• 28:27
  Speaker 4: you're dead at sixties. I hate to keep coming back
• 28:29
  Speaker 4: to that, but I think of everybody in my family
• 28:31
  Speaker 4: who died in the nineteen seventies.
• 28:33
  Speaker 2: Again never really this was the part of the argument
• 28:35
  Speaker 2: that I was obsessed with yesterday too, and I think
• 28:38
  Speaker 2: I think that part is crucial. Yeah, you can make
• 28:40
  Speaker 2: a case for some parts of society being more difficult today.
• 28:43
  Speaker 2: I could make a really compelling case for how like
• 28:46
  Speaker 2: psychologically damaging the Internet and social media has been to
• 28:50
  Speaker 2: a certain generation. But again, you can't just pop yourself
• 28:54
  Speaker 2: back into another part of time when oh yeah, social
• 28:57
  Speaker 2: media didn't exist, so life was better.
• 28:59
  Speaker 4: But these these arguments are even more childish than that.
• 29:01
  Speaker 5: There.
• 29:01
  Speaker 4: I want to put myself back, but I want my smartphone,
• 29:05
  Speaker 4: and I want all the conveniences, and I want to
• 29:07
  Speaker 4: walk into an urgent care center which did not.
• 29:09
  Speaker 5: Exist fifty years.
• 29:11
  Speaker 4: We could just go on and on about how childish
• 29:14
  Speaker 4: these arguments.
• 29:15
  Speaker 3: Are, and I don't want my kids to die. And
• 29:17
  Speaker 3: plus that's.
• 29:17
  Speaker 4: Even if you were right, What is the point, Oh, congratulations?
• 29:21
  Speaker 4: You want a theoretical argument that has absolutely no relevant.
• 29:26
  Speaker 3: Bearing on the world. No, it really does it?
• 29:27
  Speaker 5: Like what is it even?
• 29:28
  Speaker 4: Okay, millennial of the winners? Congratulations? Like what what policy prescriptions?
• 29:33
  Speaker 4: Does that translate into?
• 29:34
  Speaker 6: Well, we do have a poll question up on our
• 29:37
  Speaker 6: chat on YouTube or YouTube live stream. And the question is,
• 29:42
  Speaker 6: oh yeah, we can, Ben put it up, Thank you, Ben.
• 29:45
  Speaker 6: H question is who had it harder, Boomers or millennials,
• 29:48
  Speaker 6: And millennials.
• 29:49
  Speaker 2: Are going to win this because they're going to find
• 29:50
  Speaker 2: a way to vote fifteen hundred times.
• 29:53
  Speaker 3: Boomers don't know how to open.
• 29:55
  Speaker 6: Yeah, weigh in with your comments on YouTube voting that poll.
• 29:58
  Speaker 6: And again, if you aren't able to log onto YouTube,
• 30:02
  Speaker 6: you conscout us at texts six one seven, three six
• 30:05
  Speaker 6: two thirteen eighty five. But if you do go in
• 30:07
  Speaker 6: on your YouTube page, be sure to hit that subscribe button.
• 30:10
  Speaker 2: Let's take a quick break here. When we come back,
• 30:12
  Speaker 2: I want to talk about actually something we've been talking about.
• 30:15
  Speaker 2: The home housing season for the spring. We rough to
• 30:18
  Speaker 2: a pretty rough start.
• 30:19
  Speaker 3: We'll take a look at the data.
• 30:20
  Speaker 1: Next, market insight, retirement strategies, real talk about Wall Street
• 30:25
  Speaker 1: and economic trends. All live every day on our YouTube channel.
• 30:29
  Speaker 1: Go to YouTube dot com slash the Financial Exchange Show.
• 30:32
  Speaker 1: This is the Financial Exchange. Stay informed and prepared for
• 30:37
  Speaker 1: market changes and breaking business news. The Financial Exchange is
• 30:40
  Speaker 1: live every day on YouTube. Tune in, subscribe and keep
• 30:44
  Speaker 1: up to date on all of our show's content on
• 30:46
  Speaker 1: a daily basis. This is the Financial Exchange Radio Network.
• 30:57
  Speaker 6: The Financial Exchange is incredibly proud to be a partner
• 31:00
  Speaker 6: up the DAV of Massachusetts. Nearly four hundred runners have
• 31:03
  Speaker 6: already registered for this year's DAV five K. The events
• 31:07
  Speaker 6: sold out in record time last year, so I did
• 31:09
  Speaker 6: dav fivek dot Boston for all the information about how
• 31:12
  Speaker 6: you can participate this November, or make a donation.
• 31:16
  Speaker 5: To support our great American heroes.
• 31:17
  Speaker 6: Your gifts help fund free rides to medical appointments for
• 31:20
  Speaker 6: veterans in the nation's first dav led housing initiative, providing
• 31:24
  Speaker 6: homes for single veterans and veteran families. Go to dav
• 31:28
  Speaker 6: fivek dot Boston and make your donation today. That's dav
• 31:32
  Speaker 6: five k dot Boston.
• 31:33
  Speaker 2: Say four hundred yes, April yep, nearly four hundred get registered.
• 31:40
  Speaker 3: This thing's fun time. But it's April. I haven't. That's awesome.
• 31:44
  Speaker 2: The crucial home selling season of the spring is off
• 31:48
  Speaker 2: to a ugly start. Sales of existing homes fell three
• 31:51
  Speaker 2: point six percent in March from February.
• 31:55
  Speaker 3: It's at a nine month low.
• 31:57
  Speaker 2: The rate of home sales is we're at June of
• 32:00
  Speaker 2: twenty twenty five levels of home sales, and we are
• 32:02
  Speaker 2: also right in the middle of the spring housing season.
• 32:06
  Speaker 2: There's two forces that I think are keeping home sales
• 32:10
  Speaker 2: down right now. One is definitely events in Iran mortgage rates.
• 32:15
  Speaker 2: That problem that has sparked up since early March. Interest
• 32:21
  Speaker 2: rates shot up to the mid sixes. I think we
• 32:23
  Speaker 2: topped six point six percent at one point. They've since
• 32:26
  Speaker 2: come back down a little bit, but we're still well
• 32:30
  Speaker 2: above where we were on end of February, when we had,
• 32:34
  Speaker 2: you know, the thirty year fixed rate mortgage below six percent.
• 32:38
  Speaker 2: The other factor that I think is contributing to what
• 32:41
  Speaker 2: we are seeing right now six point thirty nine according
• 32:43
  Speaker 2: to Mortgage News Daily.
• 32:44
  Speaker 3: That's the average thirty year.
• 32:46
  Speaker 2: The other factor that I think is contributing, right if
• 32:49
  Speaker 2: you think about home sales that actually happened in March,
• 32:53
  Speaker 2: meaning you know, not just under agreement, not you know,
• 32:56
  Speaker 2: taken off of Zillow. You're talking about a completed home sale.
• 33:00
  Speaker 2: You had to be shopping in January and February. You
• 33:02
  Speaker 2: were probably already rate locked. I'm not sure that the
• 33:05
  Speaker 2: impact of higher interest rates was felt in March. I
• 33:09
  Speaker 2: think the drop off in sales that we saw probably
• 33:12
  Speaker 2: had more to do with crappy weather across the country
• 33:15
  Speaker 2: in January and February. And so if we're now hoping
• 33:19
  Speaker 2: for some sort of makeup in April, May and June
• 33:22
  Speaker 2: for the you know, for the rest of the spring
• 33:24
  Speaker 2: selling season, I don't know that that's gonna happen with
• 33:28
  Speaker 2: where mortgage rates are now. I mean, maybe they come
• 33:30
  Speaker 2: back down. We've seen the stock market, you know, recover
• 33:33
  Speaker 2: all of its losses since the Middle East events. But
• 33:36
  Speaker 2: as things sit right now, I have a tough time
• 33:40
  Speaker 2: seeing what is going to incentivize home buyers to get
• 33:43
  Speaker 2: out there and really start making big offers if they
• 33:48
  Speaker 2: already missed the lower interest rates of the you know,
• 33:51
  Speaker 2: the sub six percent range.
• 33:53
  Speaker 3: You know.
• 33:53
  Speaker 2: I think best case scenario as you kind of return
• 33:55
  Speaker 2: to a home buying season of what you had last year,
• 33:58
  Speaker 2: because that's about where interests are if we take a
• 34:01
  Speaker 2: look here, so again I mentioned the thirty year fixed
• 34:04
  Speaker 2: rate mortgage is sitting at six point thirty nine percent
• 34:09
  Speaker 2: a year ago last April. Well year ago last April
• 34:12
  Speaker 2: we were sitting closer to seven. So that is a
• 34:14
  Speaker 2: pretty good decline. So maybe you can see some uptick
• 34:17
  Speaker 2: there from even just being half a percent lower, But
• 34:20
  Speaker 2: I don't know. I'm not optimistic for the people that
• 34:25
  Speaker 2: are attached to the home transaction industry. We saw a
• 34:32
  Speaker 2: big furniture retailer out in Western Mascow belly up. We
• 34:35
  Speaker 2: saw a few other companies that are related to it.
• 34:39
  Speaker 2: Whether it's home deepo or lows reporting struggling earnings, and yeah,
• 34:42
  Speaker 2: I just don't see what is going to be the
• 34:45
  Speaker 2: incentive to get these home sold.
• 34:48
  Speaker 4: Yeah, rates are up rounding a little bit zero point
• 34:51
  Speaker 4: four point five percent from the bottom before the conflict
• 34:54
  Speaker 4: with a Ran started all else equl that should sap demand, right, Yeah,
• 35:00
  Speaker 4: it's pretty straightforward. Yeah, and to your point, March was.
• 35:02
  Speaker 2: Too soon, right, March was not like I think the
• 35:06
  Speaker 2: temptation is going to be on March first, right, the
• 35:09
  Speaker 2: temptation is going to say, oh, well, three point six
• 35:11
  Speaker 2: percent decline, it was just because the war in Iran,
• 35:13
  Speaker 2: I don't think so. I think that had everything to
• 35:15
  Speaker 2: do with bad weather. And in fact, we're going to
• 35:18
  Speaker 2: see you know, continued bad home sales now because of
• 35:21
  Speaker 2: the higher interest rates, because if you bought a home
• 35:23
  Speaker 2: in March, you went under agreement in January or February
• 35:26
  Speaker 2: and you were rate locked since probably December. So yeah,
• 35:30
  Speaker 2: I'll be I'll be interested to see what happens next.
• 35:32
  Speaker 2: But I'm not terribly optimistic.
• 35:34
  Speaker 4: Yeah, I mean, how could it be otherwise? Confidence is down,
• 35:37
  Speaker 4: gas prices are way up. You could say that's going
• 35:40
  Speaker 4: to be fleeting.
• 35:41
  Speaker 3: Sure, but it's.
• 35:42
  Speaker 4: Still it's it's sears something in people's you know, minds
• 35:48
  Speaker 4: were a little more skittish than we were a month ago.
• 35:50
  Speaker 5: It's natural.
• 35:51
  Speaker 4: The inflation number last week, you could say that's fleeting,
• 35:54
  Speaker 4: but it was shockingly high a month over month changing
• 35:58
  Speaker 4: headline inflation. So everything is sort of Stocks have stabilized terrific.
• 36:03
  Speaker 4: They still haven't gone anywhere for six months. I by
• 36:06
  Speaker 4: the way, I think that's healthy because they were so expensive. Sure,
• 36:09
  Speaker 4: going into this episode, this is the least damaging way
• 36:13
  Speaker 4: valuations can fix themselves kind of get some yeah, fix themselves,
• 36:18
  Speaker 4: or at least get into a more or less alarming range.
• 36:22
  Speaker 4: So it's not surprising that home prices should that excuse me,
• 36:27
  Speaker 4: sales should suffer somewhat.
• 36:29
  Speaker 2: White house economists have come somehow come up with an
• 36:31
  Speaker 2: estimate of the United States has a shortage of ten
• 36:33
  Speaker 2: million houses.
• 36:34
  Speaker 3: I don't really know what that means.
• 36:36
  Speaker 5: I know that they use the old trend line.
• 36:38
  Speaker 4: So they stopped at the Great Recession and said, suppose
• 36:40
  Speaker 4: we'd stayed on that trend.
• 36:41
  Speaker 3: Line, so basically adjusting for population growth or no.
• 36:44
  Speaker 4: No, I think it's even that sophisticated. The trend line
• 36:46
  Speaker 4: gives you a growth rate. It's just a function of time.
• 36:49
  Speaker 4: It's you've heard the expression exponential growth. It's just a
• 36:53
  Speaker 4: way of calculating, well, what is the growth rate implied
• 36:55
  Speaker 4: by the exponential if you think exponential growth is right relationship,
• 36:59
  Speaker 4: I'm making this to complicated. They do a friggin trend
• 37:01
  Speaker 4: line and that translates into a rate of growth.
• 37:03
  Speaker 3: A friggin trend line. Yeah, this is the it is technical, right.
• 37:06
  Speaker 5: It started in Rhode Island.
• 37:07
  Speaker 4: That's about friggin trend line. Just draw the friggin trend
• 37:10
  Speaker 4: line and extrapolate when you ended with an apostrophe, that's
• 37:13
  Speaker 4: exactly what they Yeah, you get a cigarette in one hand.
• 37:16
  Speaker 4: It's called the Rhode Island trend. It's a frigging trend line.
• 37:21
  Speaker 4: So that's that's that's that's all they did.
• 37:24
  Speaker 3: Well.
• 37:24
  Speaker 2: Uh, the Trump administration assigned two executive orders back in March,
• 37:28
  Speaker 2: believe it or not, directing federal agencies to reduce housing
• 37:31
  Speaker 2: regulatory burdens, also make it easier for small banks to
• 37:34
  Speaker 2: provide mortgages. Neither of these are going to have any
• 37:38
  Speaker 2: impact in my mind. If you want to change the
• 37:41
  Speaker 2: housing supply situation, you really have to do so at
• 37:43
  Speaker 2: the local level, and nothing here is going to incentivize
• 37:47
  Speaker 2: much at the local level.
• 37:48
  Speaker 4: It is an interesting finding, though, this little trend uh
• 37:51
  Speaker 4: sure fitting exercise, this little line fitting exercise, and then
• 37:53
  Speaker 4: extrapolating from it, that is a shocking number that if
• 37:57
  Speaker 4: that pace was frantic and unsustainable, and that pace was
• 38:00
  Speaker 4: was a result of a bubble after all.
• 38:02
  Speaker 5: This is the problem with trend.
• 38:03
  Speaker 4: Lines, depending on when you want to start when, depending
• 38:06
  Speaker 4: on where you draw them from.
• 38:08
  Speaker 2: We've got to take a quick break, but a lot
• 38:09
  Speaker 2: more to cover in the second hour of the Financial Expert,
• 38:13
  Speaker 2: more market recap and more debate over the millennial versus
• 38:16
  Speaker 2: boomer context.
• 38:17
  Speaker 3: So stay tuned, folks, will be right back