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Why the Fed’s Next Move Could Shock Markets · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike Armstraw, Hope y'all.
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Speaker 2: Had a great weekend. Is Chuck, Mike and talker with you.
1:16
Speaker 2: And markets are kind of trying to figure themselves out.
1:21
Speaker 2: Vesters have no idea where they're doing ahead of Nvidio next.
1:24
Speaker 2: I mean, I gotta admit, like all of us are
1:25
Speaker 2: trying to figure ourselves out. You know, it's a constant
1:28
Speaker 2: thing of trying to, you know, improve yourself.
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Speaker 3: The market is a seventeen year old teenager that's a
1:33
Speaker 3: bit confused about itself right now.
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Speaker 2: I would disagree with that. So, I mean, the market's
1:37
Speaker 2: been on a ripper for the last six weeks, some
1:40
Speaker 2: more like a twenty this recent twenty one year old.
1:44
Speaker 2: Twenty one year old at spring break is how I
1:47
Speaker 2: would describe it. At it at least for the last
1:49
Speaker 2: six weeks, but today not so much as kind of
1:53
Speaker 2: like chopping around, not really any direction to anything. S
1:56
Speaker 2: and P five hundred down seventeen points quarter percent? Who
1:59
Speaker 2: cares it was? You know, one to quarter percent on Friday.
2:01
Speaker 2: We don't get out of bed for a quarter percent down.
2:03
Speaker 2: Jones Industrial Average down forty points tenth of a percent,
2:07
Speaker 2: NAS Deck Composit. You are seeing some movement there, semi's
2:10
Speaker 2: pulling back into the Nasdaq getting hit to the tune
2:12
Speaker 2: of about half a percent one hundred and twenty six points.
2:15
Speaker 2: Tenure Treasury has been it's weird to say this, despite
2:19
Speaker 2: the tenure being up one point four basis points, but
2:21
Speaker 2: it's been kind of all over the place this morning,
2:24
Speaker 2: just like very much reacting to headlines minute to minute.
2:29
Speaker 2: We've been anywhere from let's see, the low that we
2:32
Speaker 2: got to was four five six, the high was four
2:35
Speaker 2: to six three, So like it's a pretty decent daily range,
2:38
Speaker 2: but just kind of in the middle of it right now.
2:40
Speaker 2: We've got the dollar index off point two one percent
2:43
Speaker 2: to ninety nine. Even gold is down twelve to fifteen
2:46
Speaker 2: outs to forty five forty nine, and we've got crude
2:49
Speaker 2: oil West Text Intermediate up seventy nine cents a barrel
2:52
Speaker 2: to one oh six twenty one triple a national averagur
2:55
Speaker 2: gas price is not really budgeting a whole lot, up
2:57
Speaker 2: two tenths of a cent to four to fifty one
2:59
Speaker 2: and five tenths. Again, we've kind of just been hanging
3:01
Speaker 2: out in this four to fifty range for the last
3:03
Speaker 2: couple of weeks. I suspect absent any change to either
3:07
Speaker 2: the positive or negative in the straight of horror moves.
3:10
Speaker 2: We probably hang out here for a couple more weeks
3:12
Speaker 2: before prices start rising heading into mid year. But we'll
3:17
Speaker 2: see how things go. And well, there is no an
3:21
Speaker 2: that's that's all for the major markets. Oh, let's do
3:25
Speaker 2: actually mortgages triple A national average no triple a. Mortgage
3:29
Speaker 2: News Daily national average for the thirty year fixed rate
3:31
Speaker 2: mortgage at six six' five right, now up thirteen basis
3:35
Speaker 2: points Following friday's moving. Yields so we're moving back closer
3:39
Speaker 2: to seven, percent and this obviously is going to put
3:42
Speaker 2: some pressure on home prices as you head towards the
3:44
Speaker 2: conclusion of the spring housing. Season piece in The Wall Street,
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Speaker 2: journal the Economy kevin worsh is inheriting is not the
3:54
Speaker 2: one he. Wanted, well it's a bit presumptuous to think
3:58
Speaker 2: that you just get what you want because you THE fed.
4:00
Speaker 2: CHAIR i, MEAN i know this is Not kevin's, words but, like,
4:04
Speaker 2: hey like this is you, know you gotta deal with
4:07
Speaker 2: the world you live, in not the one that you would.
4:09
Speaker 2: Prefer AND i don't think any of us look at
4:12
Speaker 2: exactly how everything Works, Mike, yes this is. Perfect.
4:15
Speaker 3: Yeah, well the good news is That kevin, worsh like you,
4:18
Speaker 3: said is not out here acting like a six year
4:20
Speaker 3: old saying.
4:20
Speaker 2: No he's not the one saying.
4:22
Speaker 3: THIS i do think what you have set up is
4:25
Speaker 3: a very, interesting well juxtaposition of his strategy, here because
4:32
Speaker 3: it's very clear to me that there are two interested
4:35
Speaker 3: parties that are trying to send a message To Kevin
4:40
Speaker 3: warsh right now on the state of the. Economy one
4:43
Speaker 3: is The president and he's been sending that message to
4:45
Speaker 3: anyone that wants the job AS fed chair or is
4:47
Speaker 3: serving in the job OF fed chair for the last several,
4:51
Speaker 3: years which is he wants lower interest rates and he
4:53
Speaker 3: wants to find a way to do. That on the
4:55
Speaker 3: exact opposite side of that is the voting members of
4:59
Speaker 3: The Federal, reserve who are also seemingly sending a message
5:03
Speaker 3: not only by based on their, votes but based on
5:05
Speaker 3: their desire for. Messaging in the last statement from from
5:09
Speaker 3: the chairman of, hey we want higher rates and we
5:14
Speaker 3: want language removed from the statements of THE fed that
5:17
Speaker 3: the next like move is likely. Downward those are TWO
5:21
Speaker 3: i think both of them are trying to send a
5:23
Speaker 3: message To kevin worsh about their view on the state of,
5:27
Speaker 3: things and He i'm not sure if he is going
5:31
Speaker 3: to try and build credibility with, both but you would
5:35
Speaker 3: think that he would want to try and build up
5:37
Speaker 3: his credibility with at least the voting members of The
5:41
Speaker 3: Federal reserve if he's going to try and bring them,
5:43
Speaker 3: along and probably The president so he doesn't get hassled.
5:45
Speaker 2: For the next and a half years of his. Career so,
5:52
Speaker 2: look let's let's step. Aside let's let's step back from
5:56
Speaker 2: The fed and just look at this in terms of
6:00
Speaker 2: our personal behavior if different things. Happen AND i want
6:05
Speaker 2: just BECAUSE i think it's instructive to talk about how
6:07
Speaker 2: changing interest rates impact the broader. Economy, Mike let's say
6:13
Speaker 2: that you were looking at buying a shrimp boat and
6:18
Speaker 2: you were, like hold, on.
6:20
Speaker 3: Yes boat like for eating or like for fishing for
6:25
Speaker 3: shrimp theat, okay just making sure shrimp you DON'T i sometimes,
6:30
Speaker 3: offer like buy like a sushi, boat and So i'm
6:33
Speaker 3: just kind of envisioning like a giant boat at a
6:35
Speaker 3: restaurant filled worth of shrimp THAT i.
6:37
Speaker 4: Think everybody listening on the planet knew he was talking
6:40
Speaker 4: about a ship fishing in The gulf coast like a sushi.
6:47
Speaker 2: Boat we just Lost, Louisiana alabama and The. Panhandle well Sorry,
6:53
Speaker 2: panhandle so Thanks. Mike. Uh in any, case you're trying
6:57
Speaker 2: to buy a shrimp boat and you got this one
6:59
Speaker 2: that you picked, out and, Guys i'll be, honest don't
7:03
Speaker 2: know what a shrimp boat. Costs it's called a quarter million.
7:05
Speaker 2: Dollars it's, used it's. Not it's quarter million. Dollars and
7:09
Speaker 2: you find a ten year loan where you're, saying, okay
7:13
Speaker 2: it's you, know x, percent and it's gonna be fifteen
7:15
Speaker 2: hundred dollars a, month and you're, like gotta tell, you
7:18
Speaker 2: it's not gonna. Work it's not gonna, work got? It
7:21
Speaker 2: and THEN i come to you AND i, Say, mike
7:24
Speaker 2: you know, WHAT i give you a lower interest. Rate
7:26
Speaker 2: it won't be fifteen, hundred it'll be fourteen. Hundred you
7:29
Speaker 2: go out and buy that shrimp, boat and then you
7:31
Speaker 2: gotta stock it, up so you gotta buy, gas you
7:33
Speaker 2: gotta buy like all the supplies and. Everything then that's you,
7:36
Speaker 2: know the whole. Thing you are spending money that you
7:40
Speaker 2: previously wouldn't have if interest rates hadn't been, cut IF
7:44
Speaker 2: i hadn't given you the Better corre, deal stokes economic, activity,
7:48
Speaker 2: Correct and the issue that you run into, is, okay
7:50
Speaker 2: this is all well and good if the economy is
7:53
Speaker 2: relatively in, balance but at turning points where it suggests
7:57
Speaker 2: that things are moving in either, direction the economy's not necessarily.
8:00
Speaker 2: There so if you have a case where you already
8:03
Speaker 2: have too much demand for the supply of different goods out,
8:06
Speaker 2: there meaning inflation is, high AND i cut interest, rates
8:09
Speaker 2: Now i'm just adding demand into the into the, thing
8:13
Speaker 2: and so you now have to pay that much more
8:15
Speaker 2: for the net because otherwise all the shrimp boat nets
8:17
Speaker 2: are already, gone someone's already bought them all. Up on
8:21
Speaker 2: the other side of, things if the economy is weakening
8:26
Speaker 2: and you're trying to buy this boat And i'm looking
8:29
Speaker 2: at it And i'm just, LIKE i don't, KNOW i.
8:32
Speaker 2: AM i am not going to give you the rate you.
8:35
Speaker 2: Want in, fact Because i'm a little. Nervous i'm not
8:38
Speaker 2: sure you're gonna be able to pay me. BACK i
8:39
Speaker 2: NEED i need to charge you a higher. Rate you
8:42
Speaker 2: do not undertake that. Activity and, furthermore there are other
8:45
Speaker 2: people who might have at that price that now can't
8:48
Speaker 2: because the price has moved. Higher that is reducing demand
8:51
Speaker 2: for different, products which in turn causes the sellers of
8:55
Speaker 2: those to reduce their, prices reducing.
8:58
Speaker 3: Inflation so what you're saying is that THE fed controls
9:01
Speaker 3: or attempts to control the demand side of the equation
9:05
Speaker 3: when it comes to this stuff because they can't produce
9:08
Speaker 3: more shrimp.
9:08
Speaker 2: BOATS J powell and Now Kevin. Worsh Kevin worsh is
9:13
Speaker 2: not sitting at The echos building sewing shrimp. Nuts he's
9:18
Speaker 2: not at the Strategic petroleum reserve pump and oil like.
9:24
Speaker 2: That that's not what he. Does he's not good at
9:26
Speaker 2: either of those. THINGS i actually don't know what his hobbies.
9:29
Speaker 2: Are do we ever find out What Jay powell's hobbies?
9:31
Speaker 2: Were the? Gardening, yeah can we get A Kevin wors's horty.
9:35
Speaker 2: Update see if you can plug that into you, know
9:38
Speaker 2: SOME lll machine, Here see what it comes back. With
9:44
Speaker 2: i'm just.
9:46
Speaker 4: Horseback riding and competitive, tennis not just recreational.
9:50
Speaker 2: TIME i wish.
9:51
Speaker 3: Competitive OH i did know about, it that competitive tennis,
9:53
Speaker 3: thing didn't? HE i think he like famously.
9:58
Speaker 2: Went on that Was Bill. Ackman worsh has, expressed.
10:04
Speaker 4: Or worsh has expressed a deep passion for horses in
10:07
Speaker 4: the equestrian, world which he treats as an opportunity to
10:11
Speaker 4: spend time with dear friends and animals because animals are.
10:15
Speaker 4: Horses horses are.
10:16
Speaker 2: ANIMALS i would hope that he would be a, whittler
10:20
Speaker 2: just like you could do like whittling With worsh AND
10:22
Speaker 2: i think it would be a great segment because but,
10:26
Speaker 2: uh in any, case, look here's the. Deal Is Kevin
10:30
Speaker 2: worsh is going to now have to he's in the.
10:33
Speaker 2: Seat he's been confirmed like he's. In at this, point
10:37
Speaker 2: we don't know exactly what to expect because The worsh
10:41
Speaker 2: that had previously spent time at THE fed was, very very.
10:45
Speaker 3: Hawkish maybe he was suspicious of inflation and wanted higher and.
10:48
Speaker 3: Strains Like worsh was, LIKE i don't want quantitative easing
10:52
Speaker 3: where The fed's buying.
10:53
Speaker 2: BONDS i want a small balance. YOU i want all this.
10:55
Speaker 2: Stuff and the worst for the last year or two
10:57
Speaker 2: has been very very douvish cut. Rates the economy can
11:02
Speaker 2: deal with. It you, know there's gonna be this miracle
11:04
Speaker 2: of disinflation because OF ai encouraging, productivity and SO i
11:11
Speaker 2: don't know which worst we're gonna, get because he's been
11:14
Speaker 2: both of these in the last ten to fifteen, years
11:16
Speaker 2: and we're going to have to see and we're gonna
11:18
Speaker 2: have to see how he responds to changes in the
11:22
Speaker 2: economy and what he. Does AND i think everyone's just
11:25
Speaker 2: keep an open, mind and again we'll sit back here
11:27
Speaker 2: a year from now and be, like, Hey kevin's done
11:30
Speaker 2: great for his first. Year kevin did? Okay or, man
11:32
Speaker 2: what a disaster By. Kevin, yeah BUT i do.
11:35
Speaker 3: Agree it is a challenging set of circumstances with vastly
11:38
Speaker 3: opposing priorities for two influential groups of.
11:42
Speaker 2: PEOPLE i gotta tell you that's not. FUN i gotta tell,
11:45
Speaker 2: you IF i, were you, know the person running for
11:48
Speaker 2: that job AND i just got, IT i would wonder
11:52
Speaker 2: WHAT i could do to leave because it's that, Challenging,
11:57
Speaker 2: like it is not a JOB i would. Want right,
11:59
Speaker 2: now let's take a quick, break and when we, return
12:05
Speaker 2: let's do some trivia and then we'll talk about THE
12:08
Speaker 2: us deficit after, this.
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12:39
Speaker 4: Right time for trivia here on The Financial Exchange and
12:43
Speaker 4: on this. Day in twenty, Twelve facebook held ITS ipo
12:48
Speaker 4: and raised a record breaking sixteen billion. Dollars the world's
12:52
Speaker 4: FIRST ipo was held way back in sixteen oh. Two
12:56
Speaker 4: so our trivia question, today which company launch the world's FIRST?
13:01
Speaker 2: Ipo once?
13:02
Speaker 4: Again which company launched the world's FIRST? Ipo be the
13:08
Speaker 4: third person today to text us at six one seven
13:11
Speaker 4: three six two thirteen eighty five with the correct answer
13:14
Speaker 4: along with the keyword, trivia and you win A Financial
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Speaker 4: Exchange SHOW t shirt once. Again the third correct response
13:21
Speaker 4: To texas to the number six one seven three six
13:23
Speaker 4: two thirteen eighty five with the correct answer along with
13:27
Speaker 4: the keyword, trivia will win THAT t. Shirt it's complete
13:30
Speaker 4: contest rules At Financial Exchange show dot. Com we got
13:34
Speaker 4: a piece here in The New York. Times THE us
13:37
Speaker 4: debt is now bigger than the. Economy first problem with the,
13:40
Speaker 4: title you're comparing a stock to a, flow which is
13:43
Speaker 4: just not something you should. Do saying we, have you,
13:46
Speaker 4: know thirty x trillion dollars of debt is in no
13:49
Speaker 4: way comparable to how MUCH gdp THE us. Produces we
13:54
Speaker 4: compare them because they're at least you, know worth you, know.
13:56
Speaker 4: Discussing but if we're being, honest comparing a stock to
14:00
Speaker 4: a flow does have problems. There the real number that
14:04
Speaker 4: actually matters is flow to, flow which, is, hey what
14:07
Speaker 4: are the interest payments on that relative to THE gdp
14:12
Speaker 4: and how much of our budget do those interest payments take?
14:14
Speaker 2: Up that's the more interesting. Piece if your debt doesn't
14:17
Speaker 2: cost very much to, service, hey it's not really going
14:20
Speaker 2: to have much of an. Impact if your debt servicing
14:22
Speaker 2: cost gets, higher that is more, problematic and, unfortunately interest
14:26
Speaker 2: rates to moving up at the same time the deficit
14:28
Speaker 2: is and we've talked about. This all it usually does
14:32
Speaker 2: is get me very upset Because i've noted that for
14:35
Speaker 2: the last i don't, know twenty five almost thirty years,
14:38
Speaker 2: now we don't have any interest in doing the things
14:41
Speaker 2: that are painful on either side of the. Ledger back
14:45
Speaker 2: in the nineteen eighties and, nineties we Did Ron reagan raised, Taxes,
14:50
Speaker 2: Okay GEORGE. Hw bush raised, Taxes Bill clinton cut. Spending
14:55
Speaker 2: you had presidents from each party that we're willing to
14:57
Speaker 2: go against party orthodoxy to do what they had to do,
15:00
Speaker 2: ultimately and those weren't popular, things they weren't likable, things
15:04
Speaker 2: but they helped to keep things in check ever since
15:08
Speaker 2: about two thousand. Ish pretty much what we get, is,
15:13
Speaker 2: hey let's just get all the ponies and let's not
15:16
Speaker 2: deal with any of the. Poop and so we end
15:19
Speaker 2: up with a bunch of additional spending and tax cuts
15:24
Speaker 2: and an unsustainable deficit situation because we want all of
15:26
Speaker 2: the good and none of the. Bad and last TIME i,
15:29
Speaker 2: checked you can't actually have that in real. Life, Sorry
15:31
Speaker 2: i'll just tax the billionaires that'll pay for. It, yeah
15:34
Speaker 2: they won't just move To New zealand door something like. That,
15:37
Speaker 2: yeah this is not a part is an.
15:39
Speaker 3: Issue president after, president this one, included the last one
15:42
Speaker 3: included as, well continue to run deficits as a PERCENTAGE
15:46
Speaker 3: gdp or however you want to measure, it that are
15:49
Speaker 3: higher than pretty much any anytime that we've seen throughout.
15:55
Speaker 3: History the problem is That americans just seem not overly
16:01
Speaker 3: concerned about it and unwilling to vote based on. IT
16:04
Speaker 3: i think they're tired of the narrative that it's going
16:06
Speaker 3: to ruin the. Economy it hasn't so, far and so
16:09
Speaker 3: it's just not getting the attention that it requires to
16:12
Speaker 3: actually see any sort of meaningful.
16:13
Speaker 2: Change which would be. Painful, MIKE i have a great
16:17
Speaker 2: question for. You outside Of World War two before twenty,
16:22
Speaker 2: ten how many years did The United states run deficits
16:29
Speaker 2: north of five percent OF? Gdp so how many calendar?
16:33
Speaker 2: YEARS i guess? Yes since Since World War? Two how
16:36
Speaker 2: many calendar years do we have deficits greater than five
16:38
Speaker 2: percent OF gdp up until twenty? Ten so like that
16:41
Speaker 2: seventy year period called from nineteen forty through twenty ten
16:45
Speaker 2: one or two one nineteen eighty, three that was the only.
16:48
Speaker 2: One here are the ones that we've done since, then
16:53
Speaker 2: two thousand and, nine twenty, ten twenty, eleven twenty, twelve twenty,
16:58
Speaker 2: twenty twenty twenty, one twenty, two twenty twenty, three twenty twenty,
17:02
Speaker 2: four twenty twenty, five and we're on pace to do
17:05
Speaker 2: it again in twenty twenty.
17:06
Speaker 3: Six so anybody, claiming, yeah, serious the last fifteen years
17:10
Speaker 3: in particular has been like the real. Problem, yeah like
17:14
Speaker 3: you could make a, case, hey like some stuff in
17:16
Speaker 3: the early two, thousands you know, what was. Challenging but quite,
17:20
Speaker 3: honestly when you were coming back from the tech bubble,
17:22
Speaker 3: bursting it's not surprising to see a little bit bit
17:24
Speaker 3: of an additional deficit widening. There and then it started
17:27
Speaker 3: to close back up in two thousand and six and
17:29
Speaker 3: two thousand and, seven just before The Great Financial. Crisis
17:32
Speaker 3: we've just never been on sustainable footing since, then and
17:37
Speaker 3: it doesn't seem like anyone. CARES i, mean, well the
17:40
Speaker 3: problem's gonna be that there are you, know more relevant
17:44
Speaker 3: and voter facing issues that also require fiscal solving prior
17:49
Speaker 3: to the deficit.
17:49
Speaker 2: Likely blowing up in our.
17:50
Speaker 3: Faces Social, security, medicare, infrastructure like all all of these
17:55
Speaker 3: things are demanding.
17:57
Speaker 2: Dollars and.
18:00
Speaker 3: As i've said many, more many many times, before in my,
18:04
Speaker 3: opinion the most likely way that the next president solves
18:07
Speaker 3: the social security, problem because the next president will have
18:09
Speaker 3: to solve the social security, problem not necessarily will not.
18:12
Speaker 2: Necessarily it might be we don't know if Social security
18:16
Speaker 2: is going to run out in twenty and, thirty, two thirty,
18:19
Speaker 2: three or thirty, four like the estimates vary from year to.
18:22
Speaker 3: Year but Next congress we're getting Next congress will people
18:26
Speaker 3: getting voted in now Will AND i think the most
18:30
Speaker 3: likely solution that they come up with is screw. It
18:32
Speaker 3: we're just going to print the money off the deficit
18:34
Speaker 3: and fund it that.
18:35
Speaker 2: Way it does feel like, that which sure. Sucks and,
18:40
Speaker 2: look none of this matters until it. Does but ultimately
18:44
Speaker 2: this is it's not a sustainable situation that you are
18:50
Speaker 2: in right, now and at some point it's going to
18:52
Speaker 2: create very real. Problems and those problems can be expressed
18:57
Speaker 2: in different ways through higher, inflation lower, growth like those
19:00
Speaker 2: are generally the ways that it ends up showing, up
19:03
Speaker 2: and no one seems to. CARE i when's the last
19:08
Speaker 2: time you heard any politician talk about social? Security when's
19:14
Speaker 2: the last time? Markets, yeah you don't, hear like you
19:16
Speaker 2: don't actually.
19:17
Speaker 3: Know the only TIME i hear about it is when
19:19
Speaker 3: they want to increase benefits or reduce taxes on. It
19:22
Speaker 3: last TIME i heard something we talked about security was
19:24
Speaker 3: When President trump cut the taxes On Social.
19:26
Speaker 2: Security take a quick. Break when we, Return we've got
19:29
Speaker 2: The trivia answer In Wall Street, watch.
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19:47
Speaker 1: Network do know Full Wall Street watch tracking the, stocks
19:53
Speaker 1: theodato and the headlines driving markets so far today right
19:57
Speaker 1: here on The Financial Exchange Radio.
19:59
Speaker 4: Network markets now seeing a modest sell off by midday
20:02
Speaker 4: as investors ready For nvidia earnings as well as retail
20:05
Speaker 4: earnings Including home Deep, A, walmart and several others this.
20:09
Speaker 4: Week oil prices continue to garner attention as tensions between
20:14
Speaker 4: THE us.
20:14
Speaker 2: And iran remain.
20:16
Speaker 4: Elevated right, now The dow is down about two tenths
20:18
Speaker 4: of a, PERCENT smp five hundreds down four tenths of a,
20:22
Speaker 4: PERCENT nasdak down over three quarters of a, percent or
20:27
Speaker 4: two one hundred and three points, Lower rusted two thousand
20:30
Speaker 4: down two thirds of a. Percent Sen Your Treasure reel
20:32
Speaker 4: is flat at four point six zero, percent and oil
20:38
Speaker 4: up about one and a half, percent rating just below
20:40
Speaker 4: one hundred and seven dollars a. Barrel well some news
20:44
Speaker 4: from the energy sector this morning after Next Era energy
20:48
Speaker 4: agreed to Buy Dominion energy and a deal valued at
20:51
Speaker 4: about sixty seven billion dollars which would create a utility.
20:55
Speaker 4: Giant next errorstock is down by five, percent While dominion
20:59
Speaker 4: chairs are up early ten. Percent, Meanwhile united Health group
21:02
Speaker 4: shares down two percent following news over the weekend That
21:05
Speaker 4: Berkshire hathway sold at steak in the health insurer in
21:08
Speaker 4: Greg abels first quarter As BERKSHIRE. Ceo Berkshire hathway also
21:13
Speaker 4: exited positions In, Amazon, Domino's, MasterCard, visa and, others while
21:17
Speaker 4: adding a sizable steak In delta and a smaller steak In.
21:21
Speaker 4: Macy's delta And macy's are up by one percent And
21:24
Speaker 4: regeneron shares are sinking ten percent after the biotech company
21:29
Speaker 4: said that elite stage clinical trial for melanoma treatment failed
21:33
Speaker 4: to meet. Goals I'm Tucker silva in that Is Wall Street, Watch.
21:39
Speaker 2: Mike we got A pc. Here it's Titled helping an
21:41
Speaker 2: aging parent with finances can put you in? CONFLICT cfp,
21:45
Speaker 2: says how to approach? It CAN i share the most
21:49
Speaker 2: perfect example of this That i've ever personal. Experienced. Yeah.
21:52
Speaker 3: Uh somebody THAT i know was clearly slipping and and
22:01
Speaker 3: child was on the other side of the country trying
22:03
Speaker 3: to help. Out became aware that the slipping parent was
22:09
Speaker 3: being talked out of a bunch of money by somebody
22:12
Speaker 3: who's spouse or partner had a criminal fraud background of
22:17
Speaker 3: stealing money from people and was from across the. Country
22:21
Speaker 3: trying to, say, hey you, know, PARENT i think that
22:26
Speaker 3: this is, problematic but got a lot of strong pushback
22:31
Speaker 3: from that. Parent you, know this is my friend And
22:33
Speaker 3: i'm gonna do WHAT i want with my. Money eventually
22:37
Speaker 3: got to the point where the family had to sue
22:40
Speaker 3: the parent because they were unwilling to relinquish any, control
22:45
Speaker 3: and the state had to declare that person incompetent to
22:49
Speaker 3: manage their own money before literally the theft like.
22:53
Speaker 2: Stopped, yeah that to me is as bad as it.
22:56
Speaker 3: Gets, right if your relationship with that person gets to
22:59
Speaker 3: the point where the dementia or the actual disease is
23:03
Speaker 3: what we're talking about, here gets the point where they
23:06
Speaker 3: are unsafe to, themselves then you might actually have to
23:10
Speaker 3: take a family member to court to have a judge
23:13
Speaker 3: declared them incompetent to manage their own finances and then
23:16
Speaker 3: take over that. Way and so obviously that's an extreme
23:19
Speaker 3: scenario That i've only seen once in my, life but
23:22
Speaker 3: there are many others where it can get quite, ugly
23:26
Speaker 3: and how some pre planning really can go a long.
23:30
Speaker 2: Way and it's it's tough because none of us want
23:34
Speaker 2: to give up any kind of independence on these, items
23:37
Speaker 2: on any. Items, yeah and it's hard to look at
23:41
Speaker 2: it objectively and be, LIKE i need someone else to
23:46
Speaker 2: handle this for, Me like none of us are good
23:48
Speaker 2: at doing. That it's not just asking for, help it's
23:51
Speaker 2: asking for help while admitting that you're no longer qualified
23:55
Speaker 2: to do something that you used to. Do, Yeah, like
23:58
Speaker 2: it's really hard on the other side of, things it's
24:02
Speaker 2: not even on the other, side it's. Okay, so as
24:06
Speaker 2: a child of a, parent you have your own financial
24:11
Speaker 2: situation that you're trying to manage as, Well and there's
24:15
Speaker 2: no doubt that when looking at some of the decisions
24:17
Speaker 2: a parent might be, making you might be, saying, HEY
24:20
Speaker 2: i wouldn't do this this, way and so, you as
24:22
Speaker 2: a child need to divorce yourself from those things because
24:26
Speaker 2: it's also not your money, yet like it might get
24:29
Speaker 2: to you.
24:30
Speaker 3: Eventually, Yeah And i've seen that approach, too where, like,
24:33
Speaker 3: hey you can't.
24:34
Speaker 2: Be like telling your parents, like, no don't spend it on,
24:36
Speaker 2: This like that's not a good way to handle the situation.
24:39
Speaker 3: Either, WELL i mean other example, Here Like i've seen
24:42
Speaker 3: plenty of kids who, say, look this is their.
24:43
Speaker 2: MONEY i want them to spend it how they.
24:45
Speaker 3: Want but in the case of an actual like disease
24:50
Speaker 3: like mental nons illness from dementia Or, alzheimer's, Yes i've
24:54
Speaker 3: seen that person run out of money and then and then.
24:56
Speaker 2: What position are you? In you haven't done them any?
24:58
Speaker 3: Good, Okay, now so what they're going on subsidized housing
25:02
Speaker 3: in some dangerous, area or they are moving in with
25:06
Speaker 3: me because you, KNOW i allowed them to mismanage their
25:09
Speaker 3: money due to a. Disease it is really difficult even
25:13
Speaker 3: with like in some of these, cases by the, way
25:16
Speaker 3: there was a power of attorney infit, place like they
25:18
Speaker 3: had all the legal documents they, needed but you still
25:21
Speaker 3: can't prevent somebody from making. Mistakes it is a real
25:26
Speaker 3: challenge for people to. Address and the only real advice
25:31
Speaker 3: THAT i have on it is to start the planning
25:34
Speaker 3: and the conversations early because one theme That i've seen
25:38
Speaker 3: at least is that most of these situations occur when
25:41
Speaker 3: there's not a great relationship in the first. Place and
25:44
Speaker 3: so if you're honestly, assessing, like, hey this might be
25:48
Speaker 3: WHERE i am either with my kids or with you,
25:50
Speaker 3: know with a loved one That i'm you, know allegedly
25:54
Speaker 3: going to help down the. Road i'd encourage you to
25:56
Speaker 3: think through it and start talking ideally with a. Professional
26:00
Speaker 3: it's a combination of a state tax and financial advisors
26:03
Speaker 3: that can work with you to make a plan for that.
26:07
Speaker 2: Future if you.
26:08
Speaker 3: Are considering all, this if you're one of the kids
26:12
Speaker 3: that's trying to figure that, out or if you were
26:14
Speaker 3: the adult who's trying to make your plan for the
26:16
Speaker 3: future and you'd like a little bit of guidance on the,
26:19
Speaker 3: subject folks At armstrong are here to. Help the numbers
26:22
Speaker 3: eight hundred three nine three for zero zero. One it
26:26
Speaker 3: is among the most complicated and difficult financial planning topics to,
26:31
Speaker 3: address BUT i can say That i've done seen it
26:34
Speaker 3: done well and. Poorly the number again for The Armstrong
26:37
Speaker 3: Advisory group eight hundred three nine three for zero zero.
26:41
Speaker 1: One the proceeding was paid for By Armstrong Advisory, group
26:44
Speaker 1: a registered investment. Advisor nothing in the ad or in
26:46
Speaker 1: Any armstrong guide a specific, financial legal or tax. Advice
26:49
Speaker 1: consult your own financial tax into state planning advisors before
26:52
Speaker 1: making any investment. Decisions armstrong make contact you to offer
26:55
Speaker 1: investment advisory.
26:56
Speaker 2: Services past And bloomberg TITLED SpaceX Is mega ipo puts
27:01
Speaker 2: a price tag on the fear of missing. Out and,
27:07
Speaker 2: look here here's the deal we talked about this last.
27:10
Speaker 2: Week that you can look at the SpaceX ipo and
27:15
Speaker 2: be like, wow like that's that's. Pricey the last thing
27:19
Speaker 2: that you can, do, though Given Elon musk's, presence is, say,
27:23
Speaker 2: well that means that it's immediately gonna be something THAT
27:25
Speaker 2: i should bet. Against it becomes kind of hard to
27:28
Speaker 2: given what we've seen with him And. Tesla BUT i
27:33
Speaker 2: think the piece on this, is, look if there's one
27:39
Speaker 2: business that absolutely none of us actually, understand it's space space.
27:45
Speaker 2: Expiration if there's another business that ninety nine point nine
27:49
Speaker 2: percent of us absolutely don't, understand it's artificial. Intelligence and
27:55
Speaker 2: this is the combination of the. Two because REMEMBER xai
27:58
Speaker 2: has been brought underneath the SpaceX umbrella at this, point
28:03
Speaker 2: and you've, got you, know all this chatter about you,
28:05
Speaker 2: know orbital data. CENTERS i have absolutely no idea to
28:11
Speaker 2: evaluate the growth trajectory for this, Company, like, YEAH i,
28:16
Speaker 2: can't And i'm humble enough to admit that BECAUSE i
28:20
Speaker 2: don't know what's realistic or. NOT i don't understand how
28:23
Speaker 2: to you, know compute like the asimuth of a launch
28:25
Speaker 2: in this and that and you know what orbit these
28:29
Speaker 2: satellites are. GONNA i have no. Idea but WHAT i
28:33
Speaker 2: do know is when a company becomes public and is
28:38
Speaker 2: already trading at two trillion, DOLLARS i can tell you
28:42
Speaker 2: with absolute certainty the easy money has been. Made there
28:45
Speaker 2: might still be hard money to be, made like from, here,
28:47
Speaker 2: sure and it's it's not to say that like you.
28:50
Speaker 2: Can't but imagine If TESLA ipo this year with a
28:54
Speaker 2: market cap of one point four trillion instead of you
28:57
Speaker 2: know when it did, ipo which was when Did tesla actually?
29:01
Speaker 2: Ipo let me give me just a. Second, nope that's
29:05
Speaker 2: what the heck is that company to twenty? Ten twenty,
29:08
Speaker 2: Ten So tesla's market cap when they, iPod And i'm
29:13
Speaker 2: pulling it up right now just to give you the full,
29:15
Speaker 2: picture was two billion. Dollars the, Growth, like the reason
29:20
Speaker 2: Why tesla is so exciting to people is because it's
29:22
Speaker 2: gone from a two billion dollar company to a one
29:25
Speaker 2: and a half trillion dollar company in public. View to
29:29
Speaker 2: make that, equivalent you have to go from a two
29:34
Speaker 2: trillion dollar company IN SpaceX to a two, quadrillion two
29:39
Speaker 2: quadrillion dollar. Company is that what quadrillions the next? One and,
29:45
Speaker 2: Like so it's not say that it will or, won't
29:50
Speaker 2: but it's a lot easier to go from two billion
29:53
Speaker 2: to two trillion than two trillion to two quadrillion as
29:57
Speaker 2: far as we, know we, think we think maybe maybe
30:01
Speaker 2: the laws of physics are different and out of, space but,
30:05
Speaker 2: uh that's All i'm saying is the reason this is
30:08
Speaker 2: exciting to people is because of What tesla's. Done But
30:10
Speaker 2: tesla entered at a completely different point in its life.
30:13
Speaker 2: Cycle tesla entered before they had a, car you, know
30:19
Speaker 2: Like tesla entered before they had revenue with this is
30:22
Speaker 2: one of the biggest government contractors on the. Planet so
30:25
Speaker 2: just understand what you're buying and why you're buying, it
30:28
Speaker 2: and if you choose to know the risks and, understand
30:32
Speaker 2: you know your, decision and it's about all you can.
30:35
Speaker 2: Do just take a quick. Break when we come, back
30:37
Speaker 2: it's time for stack roulettes.
30:40
Speaker 1: From markets to money to business and financial. News watch
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30:58
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31:45
Speaker 4: a couple segments, ago which was which company launched the
31:49
Speaker 4: world's FIRST. Ipo, well that would be The Dutch East
31:53
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32:07
Speaker 2: Com, Mike i'd like to kick things. Off that's like
32:12
Speaker 2: A fifa official is accused of stealing funds that were
32:16
Speaker 2: recovered after ANOTHER fifa official stole them decades. Ago good like,
32:23
Speaker 2: AGAIN i gotta tell, you as someone who's a huge soccer,
32:26
Speaker 2: fan as someone who's excited for The World, cup that's you,
32:29
Speaker 2: know starting in a few. Weeks man, LIKE fifa just
32:35
Speaker 2: can't get out of its own way with the corruption.
32:41
Speaker 2: Again there was there's a scandal back in the twenty
32:43
Speaker 2: tens that recovered around one hundred and fifty million dollars
32:48
Speaker 2: of bribes and kickbacks in Common ball AND, concacaf so
32:53
Speaker 2: basically The north And Central american soccer. Federations and they
32:58
Speaker 2: recovered a lot of that and THEN i don't know
33:02
Speaker 2: if they just like kept the money in a box
33:04
Speaker 2: Or i'm picture in a shoe box underneath a really tall.
33:08
Speaker 2: Bed it's it's got that vibe because this, Guy Alejandro,
33:13
Speaker 2: dominguez who is the leader Of commo Bal, uh is,
33:18
Speaker 2: accused along with another Senior Common ball, official of receiving
33:21
Speaker 2: more than five million dollars from the money recovered by
33:24
Speaker 2: the Soccer federation after it secured the return of millions
33:27
Speaker 2: due To los loss due to corruption. Scheme so.
33:29
Speaker 3: Embarrassing SO i guess it doesn't matter because IT'S fifa
33:33
Speaker 3: and you, know nothing's ever going to.
33:35
Speaker 2: Replace, Them, no but like how shameful. It, yeah it's
33:42
Speaker 2: this is one of this is one of Those, Like,
33:44
Speaker 2: OKAY i guess it's just this this cycle of corruption
33:48
Speaker 2: literally where the same dollars that are recovered are then taken.
33:53
Speaker 2: Again like what's amazing to me.
33:57
Speaker 3: Is that you don't have more reports of players throwing
34:00
Speaker 3: games on gambling and things like, that and and and
34:02
Speaker 3: maybe it's just Because i'm not a soccer, fan but
34:04
Speaker 3: like the hypocrisy of being able to uphold that part
34:08
Speaker 3: of the game while just blindly taking bribes and robbing
34:13
Speaker 3: the reserves of THE fifa organization over and over again
34:16
Speaker 3: by the officials that are in charge, of you, know
34:18
Speaker 3: on as, surface organizing soccer and preventing that type of
34:23
Speaker 3: thing is just kind of funny to.
34:25
Speaker 2: Me there have been if you look at Like european,
34:28
Speaker 2: soccer there's been all kinds of, scandals like gambling. Scandals
34:32
Speaker 2: uh In South. America it's more that sometimes the games turn,
34:36
Speaker 2: Dangerous like, yes like you occasionally have like refs chased
34:39
Speaker 2: off the pitch with like machetes being wielded at them
34:42
Speaker 2: and stuff. Like it gets familiar with that, part you
34:45
Speaker 2: can run into all kinds of different stuff out, there
34:48
Speaker 2: and uh, yeah it's they're very much for for what
34:52
Speaker 2: is really such a great. Sport there are some very
34:54
Speaker 2: ugly sides to it that come out occasionally.
34:56
Speaker 3: Whilst're jonnale REPORTING Ai. Chipmania so so the seeds of
35:01
Speaker 3: its own, destruction this is sounds bad that we will
35:05
Speaker 3: just continue to pound the desk on because it is
35:09
Speaker 3: not unique to THE ai. Boom it is likely the
35:13
Speaker 3: outcome of THE ai, boom and it is repeated throughout
35:17
Speaker 3: history with almost every new technology that comes about if
35:22
Speaker 3: it gets enough. Attention so what they're describing here is
35:26
Speaker 3: that right, now everybody and their mother want to build data,
35:30
Speaker 3: centers want to build new models that can compute faster
35:34
Speaker 3: and give you better. Answers, Yes and because of, that
35:38
Speaker 3: everyone is chasing after scarce, resources including, semiconductors and therefore
35:45
Speaker 3: there's a lot of money to be made if you
35:47
Speaker 3: can churn out that next semiconductor or build that next
35:51
Speaker 3: data center that can handle all the compute power of
35:54
Speaker 3: these things right, now a ton of money to be
35:57
Speaker 3: made based on these current. Prices if history is a,
36:00
Speaker 3: guide what is likely to happen because of that is,
36:04
Speaker 3: globally all sorts of companies and individuals will build all
36:08
Speaker 3: sorts of businesses to churn out new semiconductors and. Compute
36:14
Speaker 3: we just.
36:15
Speaker 2: Public last week and race to market in order to do.
36:19
Speaker 3: So and the net result of, that in all, likelihood
36:23
Speaker 3: based on, history is that we end up with more
36:25
Speaker 3: capacity than we.
36:26
Speaker 2: Need, yes that's what.
36:27
Speaker 3: Happened with The, internet that's what happened with, Radio that's
36:30
Speaker 3: what happened with, Trains that's what happened with with. Everything
36:33
Speaker 3: but like every every, technology a bunch of companies ultimately
36:38
Speaker 3: in those events went belly.
36:40
Speaker 2: Up and the nice little silver lining.
36:43
Speaker 3: Of all of, that which you, know people lose, jobs
36:46
Speaker 3: stock market loss, value but the silver lining is that
36:49
Speaker 3: we as a society are left with some really compelling
36:52
Speaker 3: infrastructure in order to build on top. Of but there's
36:58
Speaker 3: there's never been a build out of a new technology
37:01
Speaker 3: to the scale of what we're seeing right now that
37:03
Speaker 3: hasn't resulted in a well. ONE i don't think we've
37:05
Speaker 3: ever seen a build out like this before in. History but,
37:08
Speaker 3: two we've never seen one anywhere near the scale that
37:12
Speaker 3: has resulted in anything other than a bust and over
37:14
Speaker 3: supply after the.
37:15
Speaker 2: Fact the timing is what, matters, Though like we just
37:17
Speaker 2: don't know if that is six weeks, away six, months
37:20
Speaker 2: or six. Years LIKE i could find any of those
37:23
Speaker 2: credible aside from six, weeks just because you can't build
37:26
Speaker 2: enough erpacity in that, time, Yeap Wall Street. Journal the
37:30
Speaker 2: world is a wash in. Bourbon that's a problem for Big.
37:33
Speaker 2: Booze i'm trying to understand this. Here so there's too
37:37
Speaker 2: much bourbon because distilleries over expanded during the. Pandemic, yes
37:43
Speaker 2: but based on my limited understanding of bourbon and, whiskey
37:48
Speaker 2: if you've produced too, much can't you just leave it
37:51
Speaker 2: in the barrel and keep aging it and then charge,
37:53
Speaker 2: more and then when someone's finally ready to pay for
37:56
Speaker 2: you pay you for. It you release.
37:58
Speaker 3: It at that, Point, yeah but then you still have
38:01
Speaker 3: to store, it and you still have To it's not
38:03
Speaker 3: exactly the same financial equation that you would get by
38:06
Speaker 3: selling it right. Away ALL i know is that if
38:08
Speaker 3: you age, anything it goes up in value you age,
38:12
Speaker 3: milk the cheese is more valuable than the. Milk broccoli What,
38:16
Speaker 3: okay that's the found.
38:17
Speaker 2: One it appears that we branded a hole in that pretty.
38:20
Speaker 2: Quickly let's take a quick break and hopefully we still
38:23
Speaker 2: retain our value tomorrow