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Would any of Trump's ideas to lower housing costs actually work? · The Financial Exchange Show

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Speaker 2: Good morning, Welcome to the financial exchange. We've got stocks
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Speaker 2: in a fairly significant sell off, although they've rebounded a
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Speaker 2: bit off their lows. The NASDAC currently down three hundred
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Speaker 2: and twenty two points, about one in a third percent,
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Speaker 2: y SMP down eighty five one point two percent, Dow
1:27
Speaker 2: Jones Industrial Average matching that from a percentage basis yield
1:30
Speaker 2: on the ten year Treasury moving up point zero five percent,
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Speaker 2: five basis points on presumably concerns of an increased trade
1:39
Speaker 2: war and a bit of a sell America trade this morning,
1:42
Speaker 2: following the weekend's comments from the President regarding Greenland and
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Speaker 2: the United States control of it and disagreements, we are
1:49
Speaker 2: facing with the European Union to set the table a
1:52
Speaker 2: bit on that relationship with the EU. Trade between the
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Speaker 2: United States and the European Union in twenty twenty four,
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Speaker 2: when you total up all goods and services total between
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Speaker 2: one point five and one point seven trillion dollars, dwarfing
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Speaker 2: any other trade block relationship that we have, although debatable
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Speaker 2: as to how whether or not we really treated exactly
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Speaker 2: as a trade block, given you know, tariff eruptions over
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Speaker 2: the course of the last twelve or eighteen months or so.
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Speaker 3: I guess twelve months or so.
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Speaker 2: In the aggregate, I think investors have come to the
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Speaker 2: idea of tariffs playing a bigger role in the future
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Speaker 2: of the economy. Obviously, were they to increase at the
2:33
Speaker 2: pace that has been thrown out there, it would be
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Speaker 2: pretty disastrous for both the European and US economy, and
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Speaker 2: I think for those reasons, many out there are starting
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Speaker 2: to shrug this off, or at least for the day,
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Speaker 2: shrugging this off until we know more about the genuine
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Speaker 2: goals of the US of the Trump White House and
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Speaker 2: where the line is going to be drawn by our
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Speaker 2: European allies. Anything else to add on the Greenland situation,
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Speaker 2: Paul before we move on to other subjects.
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Speaker 4: No, I think you covered it.
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Speaker 2: So. The other big item that's been dominating headlines over
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Speaker 2: the last month or so has been affordability, And while
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Speaker 2: initially dismissive of the conversations, I think it's pretty clear
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Speaker 2: that those in the White House have turned their heads
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Speaker 2: towards affordability and housing affordability specifically, I find that entertaining
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Speaker 2: because frankly, I don't of all the affordability issues, housing
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Speaker 2: is the one that I think is actually going to
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Speaker 2: resolve itself on its own fairly quickly. But you know,
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Speaker 2: fairly quickly might be a timescale of three to four years,
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Speaker 2: and I don't think people are quite willing to wait
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Speaker 2: for it. So all sorts of proposals have made their
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Speaker 2: way to headlines, some from the Trump administration themselves, others
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Speaker 2: from you know, other areas, between reporters and hedge fund managers.
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Speaker 2: Everyone wants to put their opinion on how you fix
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Speaker 2: the housing situation. But I think one piece that I'll
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Speaker 2: acknowledge here for a moment, and the journal makes this
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Speaker 2: point to make homes affordable again, someone's going to lose, right,
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Speaker 2: And I think that gets overlooked quite a bit. It
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Speaker 2: could be that, you know, homes are made more affordable
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Speaker 2: by the means I would hope, which is a lot
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Speaker 2: more building and construction, in which case you increase supply
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Speaker 2: and you probably decrease the cost of homes overall in
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Speaker 2: the community in which the new ones are built. Right
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Speaker 2: if if you own a thirty year old home and
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Speaker 2: there's a brand spanking new twenty twenty six down the road,
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Speaker 2: well guess what your Your home might not be worth
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Speaker 2: quite as much as it was before. If there's a
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Speaker 2: new thousand unit development in North Phoenix, then you know
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Speaker 2: the existing homes are.
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Speaker 3: Going to take a bit of a hit.
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Speaker 2: Any way that you try to improve affordability, somebody gets hurt.
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Speaker 3: Right.
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Speaker 2: Let's say we're going to increase a new tax credit
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Speaker 2: on new home buyers, which has been thrown out there
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Speaker 2: by some not not directly by the true administration what
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Speaker 2: I've seen, but others, Well, somebody's gonna have to pay
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Speaker 2: for it, and we're going to run up deficits in
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Speaker 2: all likelihood, or you're gonna have to increase taxes in
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Speaker 2: order to do so.
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Speaker 3: There is no solution to.
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Speaker 2: Fix housing that is all positive so far as I
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Speaker 2: can tell. I just happen to think some of the
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Speaker 2: ideas are particularly worse than others. But the three that
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Speaker 2: were brought up that you know, I can clearly draw
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Speaker 2: a line to the Trump White House.
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Speaker 3: One.
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Speaker 2: The idea of the fifty year mortgage has been floated,
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Speaker 2: and so you know what would be involved there is
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Speaker 2: changing the rules for government agencies to go out and
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Speaker 2: buy conforming loans. Right now, a fifty year mortgage doesn't exist,
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Speaker 2: I think in part because it's illegal but also in
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Speaker 2: part because the banks, if they issued it, would have
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Speaker 2: to hold it on their books because the government agencies.
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Speaker 3: Do not buy fifty year mortgages.
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Speaker 2: So if you make it conforming, then all of a sudden,
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Speaker 2: banks could start writing fifty year mortgages. The only way
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Speaker 2: would happen, though, to be very clear, the only reason
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Speaker 2: this would happen would be if we as taxpayers said yes,
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Speaker 2: we want government funded industries buying up those mortgages from
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Speaker 2: the banks so that they don't have to hold them
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Speaker 2: on their balance sheet. So don't think that just by
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Speaker 2: waving a pen and saying yes, fifty year mortgages, that
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Speaker 2: those would just happen. Banks don't want fifty year mortgages.
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Speaker 2: They're only willing to issue them because they can sell
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Speaker 2: them back to the United States government.
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Speaker 4: Exactly.
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Speaker 5: Even if you look at the thirty year market today,
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Speaker 5: that's dominated by Fannie May and Freddie Mack backing a
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Speaker 5: lot of them or serving as a guarantee as a
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Speaker 5: government sponsored enterprise behind them, and so the same effort
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Speaker 5: would need to apply with a fifty year one. And
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Speaker 5: there's also just a lot of pitfalls on a consumer
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Speaker 5: perspective with having a fifty year mortgage. It's similar to
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Speaker 5: when you go to a car dealership and they ask
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Speaker 5: you what you want for a monthly payment. Yeah, if
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Speaker 5: you can stretch a car loan over ten or fifteen years,
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Speaker 5: you can get a pretty low monthly payment, but that's
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Speaker 5: not really truly the cost of owning the vehicle over time,
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Speaker 5: interest over the course exactly. And the same thing applies
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Speaker 5: even in a much more dramatic fact. Right when you're
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Speaker 5: talking about a house that is far more expensive than
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Speaker 5: that vehicle, and you're talking about most home buyers today
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Speaker 5: sit in between thirty five to forty years old, buying
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Speaker 5: a fifty year mortgage taking them out to age ninety.
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Speaker 5: That's a lot of interest being paid. Mike, A question
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Speaker 5: for you had mentioned before when we kind of kicked
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Speaker 5: off the segment. In three to four years, you think
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Speaker 5: the housing market resolve itself.
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Speaker 4: I get the idea, maybe.
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Speaker 5: The premise of supplying demand and sort of the letting
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Speaker 5: the markets dictate this, but I'm just not so sure
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Speaker 5: I could be as confident that things will get resolved
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Speaker 5: here in the next three to four years. I'm not
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Speaker 5: saying there's any you know, armagedd in awful situation with
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Speaker 5: the housing market, but hard to find a real supply catalyst,
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Speaker 5: at least on my side of things, when I look
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Speaker 5: at the housing market over that period of time.
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Speaker 2: So I guess it depends by depends on what we
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Speaker 2: mean by fixed story in a better place. My argument
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Speaker 2: would be that three to four years ago, I think
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Speaker 2: home affordability across the country on average, when you compare
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Speaker 2: it to inflation adjusted incomes, is about where we were
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Speaker 2: in the late twenty tens. That would be My argument
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Speaker 2: is that by let's call it twenty thirty, when you
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Speaker 2: look at inflation adjusted incomes compared to average or median
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Speaker 2: home prices, you're going to be able to see a
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Speaker 2: ratio there that is pretty close to what we were.
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Speaker 3: Seeing in the late twenty tens.
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Speaker 2: And that's entirely because you are seeing mortgage rates that
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Speaker 2: haven't moved and more supply coming online. The problem is
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Speaker 2: we're not seeing any of it here in the Northeast.
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Speaker 2: And so you know, when we talk about our own
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Speaker 2: personal experiences with housing, yeah, if you live in the
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Speaker 2: Midwest or here in the Northeast, I don't know that
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Speaker 2: we're getting to a quote fixed housing market anytime in
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Speaker 2: the next decade. But that's not how we measure things
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Speaker 2: like I know, we tend to be a little bit
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Speaker 2: centric to where we live, but in the aggregate, that's
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Speaker 2: That's how I'm thinking about this and how I'm measuring
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Speaker 2: it is every month you're seeing more supplies of homes
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Speaker 2: come on, more people can't afford them at these prices,
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Speaker 2: and so the longer they sit on there, the more
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Speaker 2: price cuts you're going to get. And eventually this is
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Speaker 2: a situation that just kind of resolves itself as far
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Speaker 2: as I'm concerned. But the other policies that are being
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Speaker 2: tossed out there, and again, I won't be shocked if
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Speaker 2: some combination of these does go into effect, because it's
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Speaker 2: a pretty good thing to run on the idea of
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Speaker 2: banning corporate buyers, right, so, hey, we're not going to
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Speaker 2: let big hedge funds or you know, family offices or
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Speaker 2: pension funds go and buy single family homes. I guess
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Speaker 2: practically speaking, it might, you know, reduce competition for homes
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Speaker 2: and therefore bring down prices.
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Speaker 3: One I don't know, Maybe you can.
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Speaker 2: But I don't know how you would limit a company's
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Speaker 2: ability to buy a single family home without you know,
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Speaker 2: infringing on some of those companies constitutional rights, so questions
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Speaker 2: about that too. Corporate ownership and single family homes is
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Speaker 2: pretty small. It's not going to make a huge difference
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Speaker 2: right away. Three, As as much as I hate to
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Speaker 2: say it, if we didn't have those giant corporate buyers
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Speaker 2: back in twenty ten, then a lot more people would
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Speaker 2: have been out underwater on their homes and we'd have
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Speaker 2: had probably a much longer recovery from that financial crisis than.
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Speaker 3: We ended up having.
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Speaker 2: Right So, I don't know that we're having another you know,
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Speaker 2: home crisis or mortgage crisis anytime in the near future,
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Speaker 2: but be prepared for that implication if we get one.
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Speaker 2: Because those giant institutional buyers, I understand why you might
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Speaker 2: hate them, but they.
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Speaker 4: Did provide some liquidity.
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Speaker 2: Provided liquidity in a really ugly housing market. Third one,
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Speaker 2: there was you know, lowering interest rates through bond buying,
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Speaker 2: and I think there's a clear positive result there. The
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Speaker 2: question becomes, are we, as you know, taxpayer is willing
10:49
Speaker 2: to fund a government agency to constantly buy bonds and
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Speaker 2: lower interest rates because that'll have some Again, you might
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Speaker 2: be able to lower interest rates temper but that will.
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Speaker 3: Have some longer term effects. Here in terms of inflation.
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Speaker 2: The other ideas that I've seen thrown out that I
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Speaker 2: think are just interesting. One with tax credits for buyers. Again,
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Speaker 2: I don't know why we seem to propose things without
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Speaker 2: talking about the deficit effect of all this. And to
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Speaker 2: be clear, if we issued new tax credits for home buyers,
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Speaker 2: then there's going to be a bigger deficit. The most
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Speaker 2: interesting one that I've seen to me, because you don't
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Speaker 2: have to raise taxes, you don't really have to change
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Speaker 2: much other than regulations, would be allowing banks to issue mortgages.
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Speaker 3: With prepayment penalties.
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Speaker 2: Okay, again, I find that interesting because it's just financial maneuvering.
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Speaker 2: You don't need to fund some new government agency, you
11:46
Speaker 2: don't need to do anything other than change or regulation.
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Speaker 2: It would come with some obvious downsides obviously if you
11:52
Speaker 2: took one of those mortgages because you can't prepay that mortgage,
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Speaker 2: and if you sell your home five years in because
11:57
Speaker 2: you get a new job, then you've got a stiff
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Speaker 2: penalty to pay, but probably would incentivize banks to offer
12:03
Speaker 2: lower mortgage rates. I'm just not sure by how much.
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Speaker 2: So interesting thought exercise that I had been put through
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Speaker 2: on the pre paying atount, that's the idea.
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Speaker 5: The other unintended consequence though, from some of these ideas, Mike,
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Speaker 5: is that you bring more buyers onto the market by
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Speaker 5: adjusting these policies, and then that in turn, Sky's exactly
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Speaker 5: exactly so when all these solutions are targeted sort of
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Speaker 5: on the buyer side of things, but none really dealing
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Speaker 5: with supply, and I get it, it's really fractionalized in
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Speaker 5: terms of local markets and real estate construction. But when
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Speaker 5: you do some of these things, if you do amount
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Speaker 5: a broad base, that can be the unintended consequence. If
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Speaker 5: mortgage rates right now a magic wand it came down
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Speaker 5: to three and a half or four percent, hypothetically, me
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Speaker 5: sitting at two point seventy five, all of a sudden,
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Speaker 5: I'm game. I'm back on the market, and I'm not
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Speaker 5: the only one. There's going to be, you know, millions
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Speaker 5: of other people in that similar boat. So all of
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Speaker 5: a sudden, the home in the northeast or wherever is
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Speaker 5: gonna see an uptick because you've got a lot more
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Speaker 5: buyers to the table. So it's a very difficult problem
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Speaker 5: to solve, and I don't really pin it all on
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Speaker 5: the administration It's nice that they're going after some solutions,
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Speaker 5: but it's supply and demand that you have to mess with.
13:13
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Speaker 6: All right, Sam for trivia here on the Financial Exchange.
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Speaker 2: Is it embarrassing that my first source of context for
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Speaker 2: that is a Rush Hour movie?
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Speaker 3: No, a little embarrassing.
15:03
Speaker 2: I immediately when I thought of this, as like, I
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Speaker 2: think they covered that in that Rush Hour movie?
15:07
Speaker 6: Which one the first or the second or third?
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Speaker 3: It wasn't the first.
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Speaker 6: I don't remember the reference, and I know those movies.
15:14
Speaker 4: Well.
15:15
Speaker 2: Yeah, in any case, we can move on from Rush
15:19
Speaker 2: Hour or Hong Kong because the Supreme Court is meeting
15:23
Speaker 2: this week and we won't hear their decision for six months,
15:28
Speaker 2: but it'll be a pretty high profile hearing this week
15:33
Speaker 2: for anyone in financial circles. And J Powell made a
15:37
Speaker 2: splash and at this morning too, that's worth mentioning. But
15:40
Speaker 2: the test for FED independence is going to be in
15:45
Speaker 2: the spotlight this week as Lisa Cook heads to the
15:49
Speaker 2: US Supreme Court to fight her termination for cause by
15:54
Speaker 2: President Trump. So I think some context is important here,
15:58
Speaker 2: But Lisa Cook is a fedguff. Generally speaking, they're appointed
16:02
Speaker 2: for I think it's twelve year terms, and generally speaking,
16:08
Speaker 2: it's been theorized that the president really cannot remove these
16:12
Speaker 2: individuals without cause. And there's a big debate now about
16:19
Speaker 2: you know, precisely what constitutes cause.
16:23
Speaker 3: But Lisa Cook.
16:24
Speaker 2: Has been fighting this through minor courts and finally is
16:27
Speaker 2: being heard by the Supreme Court.
16:29
Speaker 3: She's being investigation investigated for mortgage fraud. She has not
16:34
Speaker 3: been charged with anything.
16:38
Speaker 2: It's being alleged that she may have declared two properties
16:42
Speaker 2: as her primary residence, whether intentionally or you know, somebody
16:47
Speaker 2: else did it.
16:47
Speaker 3: On her behalf.
16:48
Speaker 2: Regardless, that is the allegation is that she declared more
16:51
Speaker 2: than one property be her primary residence in order to
16:55
Speaker 2: get lower mortgage rates.
16:57
Speaker 3: She has not been charged with a.
16:58
Speaker 2: Crime, and the p into attempting to remove her, and
17:02
Speaker 2: so ultimately the Supreme Court is not going to rule
17:05
Speaker 2: on whether or not she deserves to be charged with
17:07
Speaker 2: a crime. They don't. No facts haven't been presented. That's
17:11
Speaker 2: not what this is about. It's entirely going to focus
17:13
Speaker 2: on what is cause when it comes to removal for
17:17
Speaker 2: somebody from this Federal Reserve. And look, we won't know
17:21
Speaker 2: the results of this for months. It's going to take
17:24
Speaker 2: quite some time to work through the Supreme Court and
17:26
Speaker 2: then a lot longer to be announced. And I'm really
17:30
Speaker 2: not sure which direction it goes because in one regard,
17:33
Speaker 2: clearly the Supreme Court has deferred to the White House
17:35
Speaker 2: when it comes to the removal of a lot of
17:38
Speaker 2: key people at a lot of government agencies. At the
17:40
Speaker 2: same time, they have dropped several hints to the Trump
17:44
Speaker 2: White House that they view the Federal Reserve differently than
17:47
Speaker 2: those other government agencies. Right, And so I genuinely am
17:51
Speaker 2: not sure which direction this goes in. But one thing
17:55
Speaker 2: that I found really fascinating and stirring the pot. J Powell,
18:01
Speaker 2: who last Sunday, yeah, two Sundays ago, came out and
18:06
Speaker 2: posted a video to X in no uncertain terms calling
18:11
Speaker 2: out President Trump and the White House for attempting to
18:13
Speaker 2: influence FED policy and has put himself really on this
18:18
Speaker 2: collision course with the Trump White House has decided that
18:20
Speaker 2: he will be attending the hearing in person, and that
18:24
Speaker 2: is so. CNBC reported this. A few others did as well.
18:28
Speaker 2: One very irregular right generally speaking, the head of the
18:31
Speaker 2: Federal Reserve wouldn't attend a Supreme Court hearing, and for
18:35
Speaker 2: him to do so presumably kind of in defense for
18:38
Speaker 2: FED independence and Lisa Cook is very interesting and once
18:41
Speaker 2: again since sets up this kind of antagonism between himself
18:45
Speaker 2: and the President who disagree on all of this. Suffice
18:50
Speaker 2: to say, a lot of people have, you know, a
18:52
Speaker 2: lot of vested interests in this. I personally think that
18:55
Speaker 2: FED independence is absolutely crucial. Others very clearly disagree with
19:00
Speaker 2: me and think that the president should have the ability
19:02
Speaker 2: to dictate policy. I've thrown out there why I don't
19:05
Speaker 2: think that's a good idea.
19:06
Speaker 3: But this will be a real test.
19:08
Speaker 2: From the Supreme Court in terms of that independence and
19:11
Speaker 2: whether or not, really whether or not it has any teeth,
19:15
Speaker 2: because if you can remove somebody for allegations of a crime,
19:19
Speaker 2: you can kind of remove anybody, is my take on that.
19:23
Speaker 3: Let's take a quick break.
19:24
Speaker 2: When we come back, we're going to have a full
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Speaker 2: market update with Wall Street Watch and your Trivia Winner.
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19:44
Speaker 1: Every day. It's the Financial Exchange on the Financial Exchange
19:48
Speaker 1: Radio Network. Time now for Wall Street. Watch a complete
19:54
Speaker 1: look at what's moving market so far today right here
19:57
Speaker 1: on the Financial Exchange Radio Net.
19:59
Speaker 6: Market and sell off mode and reaction to the escalating
20:02
Speaker 6: drama surrounding President Trump's pursuit of Greenland and more threats
20:06
Speaker 6: of tariffs resulting in increased trade tensions between the US
20:10
Speaker 6: and European Union. Right now, the Dow is off one
20:13
Speaker 6: point one percent, or five hundred and fifty six points lower.
20:17
Speaker 6: SMP five hundred also down one point one percent, NASDAC
20:21
Speaker 6: down one in a third percent or three hundred and
20:23
Speaker 6: seven points lower. Rush two thousand off about half a
20:27
Speaker 6: percent now. Tenure tris reeled up five basis points at
20:31
Speaker 6: four point two eight three percent, and crude oil up
20:35
Speaker 6: over one and a half percent, trading at sixty dollars
20:38
Speaker 6: forty one cents a barrel. Big tech stocks, including in
20:41
Speaker 6: Vidia and Alphabet, seeing losses on the day as investors
20:44
Speaker 6: pulled back on tech as a result of those trade tensions,
20:47
Speaker 6: and Video down nearly three percent, while Alphabet shares are
20:50
Speaker 6: down nearly one percent. Meanwhile, three M reported mixed fourth
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Speaker 6: quarter of results, beating earnings forecast but fell short of
20:57
Speaker 6: revenue expectations. Maker posted notes in Scotch tape also reported
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Speaker 6: a decline in quarterly net income, weighed down by litigation costs.
21:06
Speaker 6: Three M stock now down by eight percent. Elsewhere, Fifth
21:10
Speaker 6: Third Bancorp stock is up nearly one percent after it
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Speaker 6: beat earnings estimates. However, the regional banks net interest income
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Speaker 6: fell short of expectations. D R Horton shares down about
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Speaker 6: half a percent after the home builder reported stronger than
21:26
Speaker 6: expected quarterly earnings and revenue. Warner Brothers Discovery approved the
21:30
Speaker 6: new all cash bid from Netflix. Both of those stocks
21:34
Speaker 6: are a little changed and speaking up Netflix, they'll report
21:37
Speaker 6: fourth quarter earnings after today's closing bell. In addition to
21:41
Speaker 6: United Airlines, tomorrow morning, we'll see earnings from Johnson Johnson
21:45
Speaker 6: and Charles Charles Swab. I'm Tucker Silvan. That is Well
21:48
Speaker 6: Street watching. On the previous segment, we asked you the
21:50
Speaker 6: trivia question what year did control of Hong Kong revert
21:54
Speaker 6: back to China? They'll be nineteen ninety seven. Brian from
21:58
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22:05
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22:08
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22:12
Speaker 2: So, Paul, outside of the radio show, I think everyone
22:15
Speaker 2: listening is probably aware, but if they're not, then worth
22:18
Speaker 2: mentioning that you and I spend the rest of our
22:21
Speaker 2: days focused on safeguarding client assets and helping them manage
22:25
Speaker 2: their finances and personal financial planning, and increasingly a larger
22:31
Speaker 2: part of our day job has been focused on spotting
22:35
Speaker 2: and detecting scams and convincing those that we work with
22:41
Speaker 2: to not participate in them. And some of this stuff
22:46
Speaker 2: is pretty easy to spot and detect, and others have
22:49
Speaker 2: become more complex. But The Times has a piece out
22:51
Speaker 2: today how to prevent aging parents and relatives from making
22:55
Speaker 2: financial mistakes. And to be clear, granted, I see all
22:59
Speaker 2: of it across our entire company, but I see probably
23:02
Speaker 2: no fewer than three to five accounts of identity theft
23:09
Speaker 2: or you know, access to bank accounts or you know,
23:12
Speaker 2: false charges on credit cards. Our clients tell us about
23:15
Speaker 2: those things quite frequently. I see no fewer than three
23:18
Speaker 2: to five of those every single week coming through and
23:22
Speaker 2: less frequently than that, though, we will field calls from
23:25
Speaker 2: people who are clearly being scammed into trying to send
23:30
Speaker 2: money away, and trying to kind of sort through what
23:35
Speaker 2: that could be, detect whether or not it's a scam,
23:37
Speaker 2: and try to prevent those money, those moneys from leaving is.
23:41
Speaker 3: An increasing part of this job. I think.
23:43
Speaker 2: Frankly, we just saw like two of them in the
23:45
Speaker 2: last week where tens, if not hundreds of thousands of
23:48
Speaker 2: dollars were attempting to be siphoned off of older people's
23:52
Speaker 2: investment accounts. This ratherly runs the gambit, But any personal
23:55
Speaker 2: experience you can share from that pall in terms of
23:58
Speaker 2: what we are seeing on a day to day basis
24:00
Speaker 2: as somebody who works in this industry.
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Speaker 4: It's really significant.
24:04
Speaker 5: Like the uptipic that I've seen, particularly over the last
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Speaker 5: three to five years, it feels like that it is
24:10
Speaker 5: just so frequent that we're running into a range of
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Speaker 5: different scams, whether it be text message scams to people
24:18
Speaker 5: on their cell phones, on unpaid tolls, or unpaid other liabilities.
24:23
Speaker 5: Out there on the financial side, on the wealth management front,
24:26
Speaker 5: you have solicitors out there trying to utilize buzzwords like
24:31
Speaker 5: crypto or artificial intelligence to generate these schemes that will
24:35
Speaker 5: divert money out of seniors pockets into their bank accounts
24:40
Speaker 5: and then promised them a tremendous return, only to have
24:43
Speaker 5: the rug yanked out from under them. So this is
24:46
Speaker 5: something that personally, it has just really caught my eye
24:51
Speaker 5: in terms of how much this has seen an uptick
24:53
Speaker 5: in terms of our day to day business. It is
24:56
Speaker 5: really different than from where it was ten fifteen years
24:59
Speaker 5: ago when I started industry.
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Speaker 4: It's just much more frequent now.
25:02
Speaker 5: And as a result of that, it's on us as
25:04
Speaker 5: advisors and everyone out there listening to just be hyper
25:08
Speaker 5: sensitive and hyper aware and potentially to have people in
25:13
Speaker 5: your corner too. I know finances can be a taboo
25:15
Speaker 5: subject and not often comfortable sharing with family members, but
25:19
Speaker 5: it's really important to have someone that you can reach
25:23
Speaker 5: out to discuss these things if you find yourself in
25:26
Speaker 5: a percreus situation.
25:28
Speaker 2: Yeah, I mean there's a little bit of good news.
25:30
Speaker 2: I mean, in my experience, banks were pretty bad at
25:34
Speaker 2: this a decade ago, and they have gotten a little
25:37
Speaker 2: better over the last few years of detecting this stuff
25:39
Speaker 2: and preventing it from happening. The bad news is they're
25:42
Speaker 2: not improving nearly as quickly as the scammers are. Just
25:46
Speaker 2: the pace at which that is evolving is frightening. The
25:51
Speaker 2: tips that I have though, when I run across this
25:53
Speaker 2: and when I speak with people for like, hey.
25:56
Speaker 3: How do I go and safeguard this?
25:59
Speaker 2: It's tough, you know, honestly, like you obviously you tell
26:02
Speaker 2: them what's the latest thing, how to not you know,
26:05
Speaker 2: how to detect a scam, how to look for certain
26:08
Speaker 2: language or not trust certain emails. But it evolves so
26:12
Speaker 2: quickly that, in my experience, the only real way to
26:15
Speaker 2: prevent it is to genuinely ask a ton of questions
26:20
Speaker 2: and slow things way down for people that need their
26:23
Speaker 2: money right, It's about throwing roadblocks up there every single
26:27
Speaker 2: time somebody walks into the bank or walks into their
26:30
Speaker 2: institution requesting funds, because you have to assume that you know,
26:34
Speaker 2: one in ten of them might be getting might be
26:37
Speaker 2: falling for something that you would have previously thought they
26:40
Speaker 2: wouldn't fall for. That's obviously more difficult when the institution
26:45
Speaker 2: that you're walking into doesn't know you personally.
26:48
Speaker 3: That's that's what I've seen over and over again. But
26:51
Speaker 3: again they're getting better at some of those places.
26:54
Speaker 2: I think you know, when I'm dealing with family members
26:57
Speaker 2: who are older and potentially stable to that, the first
27:01
Speaker 2: question I ask is, Hey, if something were to happen,
27:05
Speaker 2: does that bank or does that investment company have my
27:08
Speaker 2: contact information so that they can bounce it off of me?
27:11
Speaker 4: Sure?
27:12
Speaker 3: Right?
27:12
Speaker 2: Like, am I listed on the account in some way
27:14
Speaker 2: so that I can help out if that comes if
27:16
Speaker 2: that comes to pass, Because.
27:18
Speaker 3: That's kind of the easiest thing to have in place.
27:21
Speaker 2: Is a trusted person that's right on there that can
27:24
Speaker 2: help out with those things. Suffice to say, if you're
27:27
Speaker 2: not already aware of how big of a problem this is,
27:32
Speaker 2: get make yourself aware. And if you have loved ones
27:35
Speaker 2: who are retired, and by the way, that does not
27:37
Speaker 2: mean that they have to be eighty nine years old.
27:39
Speaker 2: I have seen this happen to smart, intelligent sixty year olds.
27:45
Speaker 2: If you have people who are retired, if you have
27:47
Speaker 2: people that are not getting the training that you probably
27:51
Speaker 2: do in the workforce every day on all sorts of
27:53
Speaker 2: scam detection stuff, please please get involved, help out out,
28:00
Speaker 2: and learn a little bit more. Armstrong Advisor Group has
28:03
Speaker 2: a guide on this exact subject. Actually, on preventing fraud
28:06
Speaker 2: and detecting scams. You can call for the copy of
28:09
Speaker 2: it at eight hundred three nine three for zero zero one.
28:12
Speaker 2: But I'm begging you really stay informed on what you
28:16
Speaker 2: can do to help prevent this sort of thing, because
28:19
Speaker 2: hundreds of millions of dollars are being lost to fraud
28:22
Speaker 2: every year and it can truly devastate people's financial future. Again,
28:26
Speaker 2: if you have questions on the subject and you want
28:28
Speaker 2: to learn more, call the Armstrong Advisor Group. We're happy
28:30
Speaker 2: to chat about this eight hundred three to nine three
28:33
Speaker 2: for zero zero one.
28:35
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
28:37
Speaker 1: registered investment advisor. Nothing in the ad or in any
28:40
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
28:43
Speaker 1: your own financial, tax into state planning advisors before making
28:45
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
28:49
Speaker 1: advisory services.
28:51
Speaker 2: Alison Scheger from Bloomberg has maybe the title of an
28:55
Speaker 2: article of the week, go ahead and resent boomers, but
28:58
Speaker 2: for the right reasons. She's getting at some you know,
29:02
Speaker 2: perceived fight that's existed for decades between millennials and baby boomers,
29:07
Speaker 2: and she points out that it's really not about the
29:10
Speaker 2: right things. And I think one point that she makes
29:14
Speaker 2: that is salient. If you're going to get upset about boomers,
29:18
Speaker 2: it shouldn't be about the fact that they made a
29:20
Speaker 2: bunch of money in the stock market or bought homes
29:22
Speaker 2: at a cheaper price. If there's one thing that you
29:25
Speaker 2: can look at the last generation of politics and blame
29:30
Speaker 2: a group for, it would be the idea of leaving
29:33
Speaker 2: behind massive amounts of debt, cutting taxes without cutting spending,
29:38
Speaker 2: and running up the deficit like that, to me is
29:40
Speaker 2: one thing that I think you can put squarely at
29:43
Speaker 2: the feet of, you know, people that have been involved
29:47
Speaker 2: in politics for the last thirty years, and will absolutely
29:50
Speaker 2: be something that next generations have to reckon with. But
29:53
Speaker 2: all the stuff that I heard about is more about like, hey,
29:57
Speaker 2: how can we freeze rent or build more houses or
30:00
Speaker 2: get rid of student debt, and all of which, again
30:04
Speaker 2: I think are fun and exciting to talk about, but
30:07
Speaker 2: none of which fix the underlying problem that really we
30:09
Speaker 2: are being strapped with, which is a massive deficit that
30:13
Speaker 2: won't necessarily need to be repaid at some point, but
30:16
Speaker 2: is clearly leading to problems such as our social security benefits.
30:21
Speaker 2: You know, nearly running out, medicare being unfunded, and all
30:24
Speaker 2: sorts of problems that we're having to deal with in
30:26
Speaker 2: the real world, inflation being another one. So I'm with
30:30
Speaker 2: Allison on this one. Stop stop fighting amongst ourselves about
30:33
Speaker 2: stupid things that don't matter, and.
30:35
Speaker 3: Actually focus on the ones that do.
30:36
Speaker 2: Like the fact that we have, you know, ran our
30:39
Speaker 2: deficit to levels that nobody would have ever possibly guessed
30:42
Speaker 2: that while demanding that you know, we still get all
30:45
Speaker 2: the entitlements that we feel entitled too.
30:48
Speaker 5: Yeah, as this Social Security administration depletes its coffers in
30:51
Speaker 5: the next six or seven years, here here.
30:53
Speaker 2: Instead, let's fight about how cheap it was to buy
30:55
Speaker 2: your home in nineteen seventy. Great, awesome quick break when
30:59
Speaker 2: we come back, but a stack roulette is next.
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32:14
Speaker 2: Time for a bit of stack RW let's hear Paul
32:17
Speaker 2: plenty to pick from.
32:18
Speaker 3: What do you have for us?
32:20
Speaker 4: Mike.
32:20
Speaker 5: AI answering systems are saving the day for New England pizzerias,
32:24
Speaker 5: but customers aren't so sure. This article here from The
32:29
Speaker 5: Boston Globe covers a regional New England pizza chain that
32:33
Speaker 5: has incorporated the use of AI assistance for taking in
32:38
Speaker 5: those tvous phone calls that they get to their pizza
32:42
Speaker 5: stores all across the area. So this is specifically covering
32:46
Speaker 5: Cruss Pizza. It's one of the many small restaurants across
32:49
Speaker 5: New England that is taking in fielding calls through the
32:52
Speaker 5: use of AI in order to try and just take
32:56
Speaker 5: care of the missed out revenue on phone calls that
32:59
Speaker 5: they can't care and also just to try and improve
33:02
Speaker 5: their efficiency and productivity. Some of the customers a little
33:05
Speaker 5: frustrated with the experience where they've run into situations where
33:09
Speaker 5: they can just never get to a human in that
33:12
Speaker 5: situation that gets to a high escalation. But if you
33:16
Speaker 5: read the piece here in terms of the accuracy from
33:19
Speaker 5: these AI receptionists, and again this is coming from a
33:23
Speaker 5: low main which is the company that's behind the AI
33:26
Speaker 5: system claims that the system has a ninety eight point
33:28
Speaker 5: six percent accuracy rate and that human receptors generate a
33:32
Speaker 5: score of around ninety four percent in accuracy in data
33:37
Speaker 5: entry according to some research that was done. So a
33:40
Speaker 5: fascinating thing. I toggle back and forth Mike every single
33:43
Speaker 5: day on this whole AI story. Is it a situation
33:46
Speaker 5: where this technology is going to lead to a slew
33:49
Speaker 5: of productivity enhancements and revenue growth opportunity or is it
33:53
Speaker 5: something that is being overstated and is really just going
33:57
Speaker 5: to be a tool that gradually helps business and stories
34:01
Speaker 5: like this or at least interesting, you know, because the
34:03
Speaker 5: feedback from the business owner was pretty overwhelmingly positive in
34:07
Speaker 5: terms of the revenue growth that they saw in the
34:11
Speaker 5: use of this AI system for their pizza chains.
34:13
Speaker 6: Here.
34:14
Speaker 3: Oh, I'm sure this is huge.
34:15
Speaker 2: I mean for these individual businesses that can onboard it.
34:19
Speaker 2: You think about how busy they probably are on a
34:21
Speaker 2: Friday night. I know I always order stuff online, but
34:24
Speaker 2: occasionally I'll call in a pizza order and yeah, I'm
34:27
Speaker 2: sure they get absolutely swamped and this does help.
34:30
Speaker 3: I think a few things can be true at once.
34:34
Speaker 2: I do bet that the AI system is pretty darned
34:36
Speaker 2: good at taking pizza orders.
34:38
Speaker 4: Yep.
34:40
Speaker 2: I'd also be willing to bet that it's frustrating if
34:45
Speaker 2: you have an issue and you literally can't talk to
34:47
Speaker 2: a human being. It's also safe to say that if
34:50
Speaker 2: all AI does is wipe out a bunch of close
34:54
Speaker 2: to minimum wage jobs that are taking phone orders for pizzas,
34:59
Speaker 2: it's not gonna pay for for itself, like it needs
35:02
Speaker 2: to do a lot more impressive stuff than eliminate a
35:04
Speaker 2: job that you pay fifteen bucks an hour for.
35:06
Speaker 5: Yeah, no, that's that's a very fair point. It's that
35:10
Speaker 5: lower hanging fruit probably is going to be the earliest
35:13
Speaker 5: adoption of it, and the call center is probably the
35:16
Speaker 5: biggest area that you could point to as immediate improvements
35:19
Speaker 5: are being seen on that front. But like you said,
35:22
Speaker 5: does that transform the way businesses operate? No, not necessarily
35:26
Speaker 5: the case. It has to create systems that automate much
35:30
Speaker 5: more sophisticated procedures than just just taking a pizza order.
35:33
Speaker 5: But nonetheless interesting to hear a new England chain picking
35:37
Speaker 5: up the technology and utilizing it and then also sort
35:40
Speaker 5: of trumpeting its benefits. And also it's probably helped by
35:43
Speaker 5: the fact that it seems like, and it's mentioned this
35:46
Speaker 5: piece here online ordering it's just becoming.
35:48
Speaker 4: More and more prevalent.
35:50
Speaker 5: I think the days of calling in for a pizza
35:52
Speaker 5: order and I still skew that way sometimes too. Maybe
35:56
Speaker 5: it's being out in suburbia you don't mind, you know,
35:58
Speaker 5: a quick phone call and driving over it does all
36:00
Speaker 5: just lonely, Or maybe I want to skip the house
36:03
Speaker 5: for a little bit to take a drive around, just
36:07
Speaker 5: boxes with pizzas stacking oak. Right, it's actually funny you
36:11
Speaker 5: say that, because we were I was dying to leave
36:14
Speaker 5: the house this weekend to drive somewhere.
36:16
Speaker 4: I wasn't lonely.
36:17
Speaker 5: I was had a lot of company with three sick
36:19
Speaker 5: kids and a sick wife, and she kept getting door dashed,
36:22
Speaker 5: and I was furious that I didn't get the opportunity
36:25
Speaker 5: to go out to the bagel place get the repercentage.
36:28
Speaker 4: I saw, like what it got delivered here. I was
36:30
Speaker 4: supposed to go out and get that.
36:31
Speaker 2: All right, Here is my biggest bone to pick with
36:33
Speaker 2: these because Tucker's heard me talk about this before.
36:36
Speaker 3: But I had to call a plumber a few weeks.
36:37
Speaker 2: Ago, called it up and I got a good forty
36:41
Speaker 2: maybe thirty to forty seconds through the conversation before I
36:44
Speaker 2: realized I was speaking with an AI agent.
36:47
Speaker 3: That right there is my biggest problem.
36:49
Speaker 2: I do not mind talking to an This AI agent
36:52
Speaker 2: was fantastic. I didn't notice it until thirty to forty
36:55
Speaker 2: five seconds in. I only noticed it because it was
36:57
Speaker 2: doing very computer like things like confirmed what I had
37:00
Speaker 2: just said back in its own language, So it was
37:04
Speaker 2: very clearly a computer that you know, I just didn't
37:06
Speaker 2: notice for a little while. It booked my appointment, it
37:09
Speaker 2: confirmed my point via text message, like everything that it
37:12
Speaker 2: did was perfectly fine.
37:14
Speaker 3: The problem was that you didn't identify it as such.
37:17
Speaker 2: In fact, you just you tried to deceive me into
37:20
Speaker 2: thinking it's a person because you said, hey, it's Josh
37:22
Speaker 2: from YadA, YadA, YadA, how can I help you. You
37:24
Speaker 2: intentionally had the sounds of a call center going on
37:30
Speaker 2: in the background, so there are other voices talking in
37:32
Speaker 2: the background, all of which was intended to make me
37:34
Speaker 2: feel as though I was talking to a human being.
37:36
Speaker 3: When I very clearly wasn't.
37:38
Speaker 2: Whereas if you had just said, hey, this is Josh,
37:41
Speaker 2: an automated AI system from x y Z, I would
37:45
Speaker 2: have gladly, you know, talked to that AI system and
37:48
Speaker 2: booked the appointment.
37:49
Speaker 3: Instead, I was left feeling like I.
37:51
Speaker 2: Was kind of deceived or tricked into something, And so
37:55
Speaker 2: I think that's a problem. I think the other problem
37:57
Speaker 2: that's you know, explained in this one is when it get.
38:00
Speaker 3: Screwed up, you need to have a path to actually
38:02
Speaker 3: be able to talk to a human being, able to
38:04
Speaker 3: people are going to get really really upset.
38:07
Speaker 2: Markets remain open and in negative territory here as we
38:10
Speaker 2: close out the show, the NASDAC leading the way down
38:13
Speaker 2: nearly off one and a half percent, but SMP and
38:15
Speaker 2: now all off more than one percent. We'll be back
38:17
Speaker 2: at it tomorrow with a full recap. Have a great
38:20
Speaker 2: rest of your day, folks, and tune in then