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Is the Santa Clause rally coming to town? · The Financial Exchange Show

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Speaker 1: making a donation today. This is the Financial Exchange with
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Speaker 1: Chuck Zada and Mike Armstrong.
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Speaker 2: Chuck, Mike and Tucker with you.
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Speaker 3: In a holiday shortened trading week, markets will be closing
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Speaker 3: at one pm on Christmas Eve.
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Speaker 2: They will be closed all day.
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Speaker 3: On Christmas, and I will reopen on Friday to no
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Speaker 3: one paying attention to them because no one cares, honestly,
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Speaker 3: fairly quiet. Sorry, Like if you were hoping for, hey,
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Speaker 3: the most important trading week of the year, this isn't it.
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Speaker 3: There's just not that much interesting stuff that is going
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Speaker 3: to move markets in.
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Speaker 2: Any meaningful way.
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Speaker 3: Doesn't mean that we don't have any data, But does
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Speaker 3: anyone really get excited about durable goods?
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Speaker 2: Yes, it's coming out tomorrow.
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Speaker 4: I do not.
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Speaker 3: I do think it'll be interesting. We are going to
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Speaker 3: get the estimate of GDP growth for Q three coming
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Speaker 3: out tomorrow, which will be interesting at least just to
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Speaker 3: see because we did not receive the first estimate that
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Speaker 3: was supposed to come out last month because of the
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Speaker 3: government shutdown. So in this case, the second estimate is
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Speaker 3: actually going to be the first estimate, which is just
2:19
Speaker 3: a testament to how we got in this predicament.
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Speaker 4: And we'll see if it's as big of a cluster
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Speaker 4: as the BLS data was for the last few weeks.
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Speaker 3: It could be a little bit messy, so we'll see
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Speaker 3: what we get here, but expectations are pretty good for
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Speaker 3: about three point two percent GDP growth in Q three,
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Speaker 3: so we'll see what we end up with there. Thus
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Speaker 3: far through Q four, Atlanta FED has US tracking somewhere
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Speaker 3: in the three and a half percent range, so we'll
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Speaker 3: see kind of where things move on that front. About
2:48
Speaker 3: a month ago we were just north of four percent
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Speaker 3: tracking for Q four. That has come down a little
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Speaker 3: bit there, but again still looking like we're gonna have
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Speaker 3: a pretty strong finish to the year, which again kind
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Speaker 3: of gets this idea of, okay, that the best way
3:03
Speaker 3: to tell where the economy is going to be tomorrow
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Speaker 3: is to look at where it was yesterday, because generally
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Speaker 3: these things are kind of hard to disrupt when you
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Speaker 3: talk about mature, stable, dynamic economies like the United States,
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Speaker 3: And so that's kind of where we are right now Wednesday.
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Speaker 3: There is no important economic data coming out. I know
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Speaker 3: we get jobbless claims, but honestly.
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Speaker 2: I'm not gonna look at them.
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Speaker 4: It's Christmas Eve.
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Speaker 2: I'm not going to be looking at them.
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Speaker 4: We will find out on Tuesday, how much confidence consumers
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Speaker 4: are lacking according to the latest survey at ten AM,
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Speaker 4: which again has been a good indicator of absolutely nothing
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Speaker 4: over the course of the last five years.
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Speaker 3: Yes, it's told us how people feel, but not how
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Speaker 3: they behave. And so given the fact that how people
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Speaker 3: feel does not influence markets or the economy, apparently I
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Speaker 3: don't know why we continue to worry about how people feel.
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Speaker 3: I'm not saying that in terms of like, I don't
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Speaker 3: care how you feel, because I care about you, Michael,
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Speaker 3: and I want you to be happy, thank you. But
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Speaker 3: what I do mean is if people keep telling us
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Speaker 3: they're not going to spend money and then they go
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Speaker 3: and spend money, I don't know what use that survey is.
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Speaker 4: I was speaking with our Portland main affiliate, Matt Gannon
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Speaker 4: this morning and he asked me about the recent data
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Speaker 4: and how it seemed a little bit flawed, especially that
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Speaker 4: on the inflation data, and you know, there's a fair
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Speaker 4: bit of skepticism, and he just asked, like, what do
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Speaker 4: you do in this situation? Just kind of trust your gut,
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Speaker 4: and I kind of giggled. I was like, well, I'll
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Speaker 4: tell you I don't know about you know, any one
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Speaker 4: individual's guts, but our collective guts over the last three
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Speaker 4: years have told us that the economy and everything else
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Speaker 4: is terrible. And had you listened to that collective gut instinct,
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Speaker 4: you would have sure missed out on a whole bunch
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Speaker 4: of positivity in markets. This does raise an interesting question
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Speaker 4: in my opinion, which is when the economy acts actually
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Speaker 4: becomes terrible.
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Speaker 2: Which will at some point in the future.
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Speaker 3: I'm not saying like this is like around I don't
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Speaker 3: know when this will be, but like at some point
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Speaker 3: in human history, we will have another recession in the
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Speaker 3: United States. When that happens, what are we going to
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Speaker 3: feel then.
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Speaker 4: Maybe a fair bit of froud and troid Like people
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Speaker 4: have been cheering this thing, the cash for a fair
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Speaker 4: bit of what how do you pronounce it?
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Speaker 2: Well, you miss you mix up the froud in the shoyd.
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Speaker 2: You said froud andshoyed. It's shoyd and frowed.
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Speaker 4: Yeah, well, you know it's fine. It's the Monday before Christmas.
5:32
Speaker 4: I don't speak German, and so maybe they'll be cheering
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Speaker 4: it on, or maybe we'll have to reset all of
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Speaker 4: our expectations for how this index works and we'll test
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Speaker 4: all new lows when the economy actually gets bad. Because
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Speaker 4: it's really tough to describe this economy as genuinely bad
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Speaker 4: anytime for the last four eh no year, No you could.
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Speaker 2: You could say in twenty twenty two it was genuinely bad.
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Speaker 4: So three years.
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Speaker 3: Yeah, and even in twenty three and twenty four there
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Speaker 3: were still real.
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Speaker 4: Problems, Like here are pockets of badness in twenty three
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Speaker 4: and no, I won't even say pockets. Like twenty three
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Speaker 4: objectively was improving, but from a really bad spot. I mean, Mike,
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Speaker 4: we had three significant bank failures in the first part
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Speaker 4: of the year. There were some dodgy things happening there. Yes,
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Speaker 4: we emerged fine from it, but things were pretty dodgy
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Speaker 4: in particular in the first half of that year. Yeah.
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Speaker 4: Where why I'm sighing is I really have a difficult
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Speaker 4: time describing anything as a dodgy economy when the unemployment
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Speaker 4: rate is firmly below four percent. No, but I get it,
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Speaker 4: I do get it. There were bank failures, there was
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Speaker 4: really high inflation. Yeah, but when you have such a
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Speaker 4: low unemployment rate, I really.
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Speaker 3: Well one caused the other though, I mean again, like
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Speaker 3: get it. You look at this like in again, I'm
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Speaker 3: looking June of twenty three, core inflation was at four
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Speaker 3: to nine.
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Speaker 4: Yeah, not a good feeling.
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Speaker 3: It's it's a little hot for me. Then you know,
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Speaker 3: like it's four nine's a little hot. Now you had
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Speaker 3: headline inflation that was down to three percent. But here's
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Speaker 3: the interesting thing. Headline inflation got down to three percent
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Speaker 3: in June of twenty three. It hasn't really budged lower
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Speaker 3: in any meaningful consistent way. We've had pockets where it's
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Speaker 3: gone lower for a little bit here there, but it's
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Speaker 3: been okay. There's a couple months where it dips down
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Speaker 3: to two and a half and then it goes back
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Speaker 3: up to three.
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Speaker 2: Like we haven't really gotten there.
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Speaker 4: What else is exciting going on this week? Well, Wednesday
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Speaker 4: is technically the kickoff of the Santa Claus rally time
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Speaker 4: period if we're going to get one right. Wednesday, Friday, Monday, Tuesday, Wednesday,
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Speaker 4: and then the first two days of the new year
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Speaker 4: is the official time period for the Santa Claus rally.
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Speaker 4: So we'll see if he comes to town and lifts
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Speaker 4: stocks through year end. There is a statistical relationship there
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Speaker 4: where stocks historically have performed better than normal during this
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Speaker 4: Santa Claus rally time period.
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Speaker 5: So we shall see it didn't happen last year, right.
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Speaker 4: Don't know, don't remember? Unimportant?
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Speaker 5: I think it's that's so last year talker. Yes, let's
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Speaker 5: not refer to last year whatsoever. It doesn't matter as far.
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Speaker 4: As I'm frankly, the statistic as a whole doesn't matter,
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Speaker 4: which is why I'm which is why I'm saying that
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Speaker 4: it doesn't matter. But yeah, I don't recall what exactly
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Speaker 4: if stocks went up or down last year during the
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Speaker 4: Santa Claus rally time period.
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Speaker 2: So in any case, this is what is ahead for
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Speaker 2: the week.
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Speaker 4: Can I request that we come up with a new
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Speaker 4: word to or a new definition for the fake word froudenschoid.
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Speaker 2: Froudenschoid.
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Speaker 3: Yeah, it is the short and fraud you receive or
8:45
Speaker 3: feel when doing something incorrect.
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Speaker 4: Yeah, I like that.
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Speaker 2: We could we could, we could do that maybe.
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Speaker 3: Yeah, let's take a quick break and when we return
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Speaker 3: the latest in the love triangle between Paramount, Warner Our
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Speaker 3: Discovery and Netflix after.
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Speaker 4: It's Mike and Chuck here on the Finite. It's Mike
10:19
Speaker 4: and Chuck here on the Financial Exchange and you know,
10:21
Speaker 4: I just wanted to wish all of our listeners in
10:23
Speaker 4: one of our newer affiliates, Portland, Maine, a very happy
10:26
Speaker 4: and healthy holiday season and a terrific new year. Thank
10:29
Speaker 4: you for being with us this year. All the best
10:31
Speaker 4: in twenty twenty six. Before we get to our top
10:35
Speaker 4: next story of twenty twenty six.
10:38
Speaker 3: Let's talk a little bit about this latest development in
10:42
Speaker 3: the Paramount unsolicited bid for Warner Brothers Discovery. Paramount amended
10:49
Speaker 3: its offer with Larry Ellison agreeing to personally guarantee forty
10:54
Speaker 3: point four billion dollars of equity financing for the deal,
10:58
Speaker 3: and also published records related to the family trust that
11:02
Speaker 3: backstops the deal. They did not make any changes to
11:05
Speaker 3: their offer price, but pretty much saying, Okay, you told
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Speaker 3: us you want Ellison to personally backstop the deal.
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Speaker 2: Great, he's going to do that.
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Speaker 3: Not one hundred percent, because again the deal is larger
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Speaker 3: than forty point four billion dollars, but about a forty
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Speaker 3: percent guarantee on the deal.
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Speaker 4: Kind of sounds exactly like what Warner brother was asking for.
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Speaker 4: Next comments, right, So it reminds me, yes, call your bluff.
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Speaker 3: It reminds me of so this Tucker, can we fire
11:34
Speaker 3: up the time machine, Stata.
11:35
Speaker 2: We don't have to go back too far.
11:36
Speaker 3: We're gonna go back to uh maybe twenty twenty one,
11:40
Speaker 3: and uh, look, it's a personal story, but I just
11:44
Speaker 3: find it kind of humorous. Wife and I were bidding
11:47
Speaker 3: on a house in twenty twenty one, which, if anyone
11:49
Speaker 3: will tell you, was a bad idea because twenty twenty
11:51
Speaker 3: one was like the most competitive housing market ever. We
11:56
Speaker 3: came in and we made, you know, an offer, and
11:58
Speaker 3: they said, okay, you know, you got to give us
11:59
Speaker 3: ex do and you know, we said, okay, like that
12:03
Speaker 3: seems reasonable, like we'd left ourselves a little room to negotiate.
12:07
Speaker 3: And then they said, now you've got to wave your
12:09
Speaker 3: contingencies and we said, no, you asked us for six
12:12
Speaker 3: dollars more and we're we're doing those and we're keeping
12:15
Speaker 3: our contingencies in place because gee, we kind of want
12:17
Speaker 3: to inspect the place and you know, look around, and hey,
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Speaker 3: if financing falls through, I don't want to personally be
12:22
Speaker 3: you know, on the hook for more money than I have,
12:24
Speaker 3: which is why I'm borrowing the money. So g no,
12:27
Speaker 3: that's not gonna work. Lo and Behold, they were like no,
12:30
Speaker 3: you have to do this, and we were like, no, like,
12:32
Speaker 3: we're not going to continue jumping through hoops. We're not
12:34
Speaker 3: gonna bid against ourselves. This is dumb. If you have
12:36
Speaker 3: a better offer, take it otherwise, like we're out. The
12:39
Speaker 3: place ended up sitting for about maybe three months after this,
12:43
Speaker 3: and this is in twenty one, so you know that
12:45
Speaker 3: they had screwed up a little bit and eventually went
12:47
Speaker 3: for about five percent under what we had offered. So
12:52
Speaker 3: this brings me back to this point here, which is
12:55
Speaker 3: got to make you feel good quite honestly. The Shorten
12:58
Speaker 3: fraud thanks was strong, yeah with that one, But I digress.
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Speaker 3: In any case, we've got a situation here where Warner
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Speaker 3: Brothers Discovery pretty much you know, came out and said, hey,
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Speaker 3: we don't like your offer because it's not personally guaranteed
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Speaker 3: by Larry Ellison enough and we don't have enough info
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Speaker 3: ins to the financials of that trust that he says
13:20
Speaker 3: is going to back this. And Larry Ellison said, fine, here,
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Speaker 3: I'm gonna personally guarantee forty point four billion dollars, which
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Speaker 3: I got to admit not nothing significant amount of money,
13:34
Speaker 3: and on top of it, you know, publish a bunch
13:36
Speaker 3: of information on what's in his trust that he doesn't
13:39
Speaker 3: have to publish. So my view, right, my view on
13:46
Speaker 3: this is quite honestly, he basically called Warner Brothers Discoveries bluff.
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Speaker 4: Yeah, and.
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Speaker 3: It kind of raised the stakes now to where, in
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Speaker 3: my opinion, Netflix has to give some kind of improvement
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Speaker 3: to the deal otherwise it creates the appearance for shareholders
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Speaker 3: who remember this is where it went directly too, that
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Speaker 3: Warner Brothers Discovery board is not interested in dealing with
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Speaker 3: Ellison and may miss out on a better deal as
14:16
Speaker 3: a result of that.
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Speaker 4: Now, remember, even with all of this, the math on
14:20
Speaker 4: these deals seems to be that the Netflix one is
14:24
Speaker 4: still a little bit richer, but much more complicated. The
14:27
Speaker 4: company has to be split up into two different entities,
14:31
Speaker 4: it's going to take longer to accomplish. And so yes,
14:34
Speaker 4: Netflix may have offered a little bit more money on
14:37
Speaker 4: the surface. We're talking in billions of dollars, so I
14:40
Speaker 4: guess it's not a little bit more money. They offered
14:42
Speaker 4: more money on the surface, but there is much more
14:45
Speaker 4: uncertainty when it comes to that deal. What is this
14:47
Speaker 4: entity actually going to be worth? But by the time
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Speaker 4: we sell it off because Netflix does not want the
14:54
Speaker 4: network television part of this.
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Speaker 2: They have no interested in TBSTNT and.
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Speaker 4: All that stuff. And oh yeah. I mean, if you
15:01
Speaker 4: are the board now of Warner Brothers, either you have
15:05
Speaker 4: some bias towards the Netflix deal that you didn't really
15:08
Speaker 4: tell shareholders about, or you have to seriously consider this
15:11
Speaker 4: now that it's been backstopped.
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Speaker 3: So if I'm Netflix, which remember, if you look at this,
15:17
Speaker 3: paramount is bidding thirty dollars a share for all of
15:20
Speaker 3: Warner Netflix is bidding twenty seven to seventy five for
15:24
Speaker 3: most of not the not the cable stuff. And so
15:28
Speaker 3: you know, does that mean Netflix just has to come
15:30
Speaker 3: back and be like, Okay, well up are offered to
15:32
Speaker 3: twenty eight bucks a share like that that might be
15:35
Speaker 3: enough to.
15:35
Speaker 2: You know, get it over the hump.
15:37
Speaker 3: It might be twenty eight I don't know what it is,
15:40
Speaker 3: but it does create the appearance of negotiating in bad
15:45
Speaker 3: faith if Larry Elson basically did everything that you told
15:52
Speaker 3: him to and you're like, no, we're still not interested.
15:55
Speaker 4: Now, this was not It's not as though Warner Brothers
15:59
Speaker 4: came out and said the only reason we're not doing
16:00
Speaker 4: this deal is because we have suspicions about this, but
16:02
Speaker 4: they made.
16:02
Speaker 2: A pretty big deal of it, correct.
16:04
Speaker 4: You know, there were other reasons they preferred the Netflix bid,
16:07
Speaker 4: but they made a fairly big deal of the stability
16:11
Speaker 4: of the Paramount bid, and I think all of those
16:16
Speaker 4: concerns have been done away with now.
16:17
Speaker 3: And this also then gets at Okay, if you're looking
16:20
Speaker 3: at this as a deal that is going to need
16:23
Speaker 3: federal government approval, which newsflash, it will, then you can't
16:28
Speaker 3: really have allegations of you know, not being in the
16:31
Speaker 3: best interest of shareholders, you know, lurking here, which is
16:35
Speaker 3: another reason why I think Netflix probably has to do
16:38
Speaker 3: something to up its offers. So this continues to be
16:41
Speaker 3: a very juicy story that I just I can't get
16:46
Speaker 3: enough of.
16:46
Speaker 4: It's playing out exactly the way that you would hope
16:49
Speaker 4: a good Hollywood drama does.
16:52
Speaker 2: Right, Yeah, which will stream oment I'm on the edge.
16:55
Speaker 4: Of my seed and eventually, yeah, you're right, they will
16:57
Speaker 4: make a They almost certainly make a doctor. You better
17:00
Speaker 4: about this very sure.
17:01
Speaker 3: Tune in eighteen months from now for the documentary about
17:04
Speaker 3: this on whoever wins Warner Brothers.
17:07
Speaker 4: Discovery or loses. We'll see.
17:10
Speaker 2: The losers might have to forfeit their right to it. Yeah,
17:13
Speaker 2: I'm kidding. I don't think that.
17:15
Speaker 3: I don't think you can forfeit a right to a
17:16
Speaker 3: documentary that hasn't been produced yet, but one would hope
17:20
Speaker 3: that you could because it would just tie into this nice,
17:23
Speaker 3: juicy drama. The US Coast Guard is chasing another oil
17:27
Speaker 3: tanker from Venezuela.
17:29
Speaker 2: Uh, it would.
17:34
Speaker 4: Be easy to catch.
17:37
Speaker 2: That fast, Like, you can't really hide one.
17:39
Speaker 3: They're they're they're carrying a bunch of oil, so they're
17:42
Speaker 3: they're pretty slow.
17:44
Speaker 4: It's not much of a test for the US Coast Guard.
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Speaker 2: Well here's the thing, Jim. Can you get a look
17:50
Speaker 2: at this. What do you think that is over there?
17:53
Speaker 4: Fishing boat or oil tanker?
17:54
Speaker 2: So here's the thing.
17:55
Speaker 3: It's the ship is Bellow one, which was sanctioned by
17:59
Speaker 3: the US back in twenty four. This is now again
18:01
Speaker 3: the third tanker that they are trying to blockade. And
18:07
Speaker 3: look this to me, I mean, we can talk about
18:10
Speaker 3: whether or not this has anything to do with Venezuela,
18:14
Speaker 3: because I'm not convinced it does. The longer this goes on,
18:18
Speaker 3: it might have something to do with Venezuela, but only
18:21
Speaker 3: insomuch as it really is.
18:24
Speaker 2: About Russia, China, Iran. In my opinion, Venezuela.
18:30
Speaker 4: Is just easy target for it.
18:32
Speaker 3: It's something where Venezuela is geographically isolated relative to the
18:36
Speaker 3: other three and economically and militarily weaker than the other three,
18:43
Speaker 3: and so they're kind of getting the.
18:45
Speaker 2: Short end of the stick on this.
18:47
Speaker 3: Yeah, But I think the piece that I continue to
18:53
Speaker 3: be curious about is given China's lack of hesitation in
19:01
Speaker 3: deploying restrictions on rare earth exports multiple times this year,
19:07
Speaker 3: I'm a little surprised that we haven't seen it from
19:09
Speaker 3: them on this, to be honest.
19:12
Speaker 4: Yeah, they speak out for the first time on this
19:16
Speaker 4: over the weekend.
19:18
Speaker 3: Pay attention to what people do, not what people say,
19:20
Speaker 3: you know, and so there are a few different ways
19:23
Speaker 3: you can potentially read that, and I just find that interesting.
19:27
Speaker 3: Let's take a quick break. When we return, it's Wall
19:30
Speaker 3: Street Watch.
19:40
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19:48
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19:53
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19:56
Speaker 1: today right here on the Financial Exchange Radio Network.
20:01
Speaker 5: Markets are beginning the shortened holiday week in positive territories,
20:05
Speaker 5: Investors all wait more economic data points, including durable goods
20:08
Speaker 5: and third quarter GDP, due out this week. Right now,
20:11
Speaker 5: the Dial is up nearly four tenths of a percent,
20:14
Speaker 5: or one hundred and seventy five points higher. S and
20:17
Speaker 5: P five hundred up over four tenths of a percent
20:19
Speaker 5: to twenty nine points higher. Nasdaq also up about four
20:22
Speaker 5: tenths of a percent or ninety three points. Russell two
20:25
Speaker 5: thousand is up one point two percent, Tenure tris reeled
20:28
Speaker 5: up one basis point at four point one sixty seven
20:31
Speaker 5: percent sixty seven, and crude oil is up two and
20:35
Speaker 5: a half percent higher, trading just below fifty eight dollars
20:40
Speaker 5: a barrel. Another development in an ongoing story this morning
20:43
Speaker 5: in the bidding war for Warner Brothers Discovery, Paramount is
20:46
Speaker 5: now admitted its offer for Warner Brothers, where Larry Ellison
20:50
Speaker 5: agreed to personally guaranteed forty point four billion dollars of
20:54
Speaker 5: equity financing for the deal. Netflix shares down nearly one percent,
20:59
Speaker 5: Paramount stock is up seven percent, while Warner Brothers Discovery
21:03
Speaker 5: is rising about three percent. Meanwhile, workplace products maker Sentas
21:07
Speaker 5: has submitted another offer to acquire smaller uniform supplier Universe,
21:12
Speaker 5: after nearly four years of failing to complete a deal.
21:15
Speaker 5: This time, sint Us is bidding five point two billion
21:18
Speaker 5: dollars and is vowing to make sure the transaction clears
21:21
Speaker 5: any regulatory hurdles by including a sizable break feed to
21:25
Speaker 5: sweeten the deal. Sintas up one percent, while Universe shares
21:30
Speaker 5: are rallying twelve percent. Elsewhere, Reuters is reporting that Nvidia
21:33
Speaker 5: intends to begin shipping its H two hundred ships to
21:36
Speaker 5: China by mid February. However, uncertainty remains as China has
21:40
Speaker 5: yet to approve any H two hundred purchases, so the
21:43
Speaker 5: timeline could shift. And Video shares are up over one percent,
21:47
Speaker 5: and China's Baydo is teaming up with ride haling companies
21:50
Speaker 5: Uber in Lyft to begin trials of self driving vehicles
21:54
Speaker 5: in the UK. Both Uber and Lyft or up anywhere
21:58
Speaker 5: between three and four percent. I'm Tucker Silva and that
22:02
Speaker 5: is Wall Street. Watch and subscribe now to our YouTube page.
22:05
Speaker 5: Will you find daily interviews in full shows of the
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22:20
Speaker 2: Piece of the New York Times.
22:21
Speaker 3: The economy survived twenty twenty five, but many Americans are reeling,
22:26
Speaker 3: and this gets it something that I wanted to kind
22:28
Speaker 3: of like discuss from the last segment because we were
22:31
Speaker 3: talking about, you know, whether.
22:34
Speaker 4: Or not the economy was bad over the last three years.
22:36
Speaker 4: Is that what you're getting as, Yeah, well, here's.
22:37
Speaker 3: The thing for the last five years now really six okay,
22:42
Speaker 3: twenty twenty one, twenty two, twenty three, twenty four, twenty five.
22:50
Speaker 3: There hasn't been a single one of those that has
22:54
Speaker 3: just been easy for Americans. There have been different reasons
22:59
Speaker 3: in each one, but there hasn't been a single one
23:02
Speaker 3: where you've just been like, Okay, we can just chill.
23:05
Speaker 3: Twenty twenty, I think we can all agree. Twenty twenty
23:09
Speaker 3: was a little bit disrupted. Twenty twenty one. Hey, we're
23:12
Speaker 3: getting everybody back to work. But guess what as we
23:14
Speaker 3: do that try to get anything, and you can't remember
23:19
Speaker 3: all like the delays we had getting stuff.
23:21
Speaker 4: Yeah my mirrors, yes, never showed.
23:24
Speaker 3: Your mirrors, my chairs, like things along those lines. You know,
23:27
Speaker 3: there were lines eight months long for grills in twenty
23:31
Speaker 3: twenty one, twenty twenty two, all of that backlog turned
23:34
Speaker 3: into inflation that kind of sucked for all of us,
23:37
Speaker 3: didn't it.
23:38
Speaker 4: Yep.
23:38
Speaker 3: Twenty twenty three, Silicon Valley bank fails. You've got these
23:42
Speaker 3: bank failures. You got questions about, you know, is inflation
23:46
Speaker 3: actually gonna come down? Because core is still running north
23:48
Speaker 3: a five percent halfway or almost halfway through the year.
23:52
Speaker 2: Not exactly the most comfortable. Twenty twenty four.
23:55
Speaker 3: You can make a case twenty four is the closest
23:58
Speaker 3: that we've come to normal, but you still had a
24:00
Speaker 3: slowing labor market, and you still had inflation hanging out
24:05
Speaker 3: around three. But twenty four you can at least point
24:07
Speaker 3: to and be like, Okay, maybe we were like kind
24:10
Speaker 3: of getting close there this year. Interestingly enough, like you
24:14
Speaker 3: look at inflation, it still is around three, but like
24:18
Speaker 3: it hasn't gone up up, up up up.
24:20
Speaker 4: Yep.
24:22
Speaker 3: The unemployment rate is rising. I know, we say it's
24:24
Speaker 3: four and a half percent, but it doesn't matter like
24:26
Speaker 3: where it is, it matters where it's come from.
24:28
Speaker 4: Yeah, in January, we're at four to six.
24:31
Speaker 3: Now, and you will get a lot of underlying data
24:32
Speaker 3: and it's consistent with an unemployment rate that is one
24:36
Speaker 3: to two percent higher. You know, like a lot of
24:38
Speaker 3: the jolts rates are back at where they were in
24:40
Speaker 3: twenty thirteen to twenty fifteen. Sure, and that's not that's
24:44
Speaker 3: not a great labor market. And so like you look
24:47
Speaker 3: at all this and on top of that, then you
24:50
Speaker 3: throw you know, kind of the tariff chaos of the
24:52
Speaker 3: first half of the year into the equation and it's like, okay,
24:55
Speaker 3: twenty five has you know, been kind of messy, even
24:57
Speaker 3: though we're you know, tracking for you know, mid mid
25:01
Speaker 3: to low two's on GDP growth. And so I guess
25:06
Speaker 3: the point that I'll make on this is it's just
25:13
Speaker 3: been an exhausting six years for Americans financially, and it's
25:17
Speaker 3: just like you just getting keep getting bludgeoned by one
25:20
Speaker 3: thing after another.
25:21
Speaker 2: Yeah, and you know, I know.
25:24
Speaker 3: That we always like to be like, hey, if you
25:26
Speaker 3: took an economist and drop them into twenty five and
25:29
Speaker 3: said unemployments you know, four point five percent and inflations
25:33
Speaker 3: two six how good would you say the economy is?
25:36
Speaker 3: They'd undoubtedly be like great. But the problem is, like
25:39
Speaker 3: it loses the context of.
25:41
Speaker 4: It's been a really we've lived through societal pace of change,
25:45
Speaker 4: I think, and people are.
25:46
Speaker 3: Now also reeling with like is Ai going to replace me?
25:50
Speaker 3: And will the robots kill my family?
25:52
Speaker 4: Yeah, that's kind of what I mean. Like, you take
25:53
Speaker 4: a look at where we've come from over the last
25:56
Speaker 4: five years, and it's been a very rapid pace of change,
25:58
Speaker 4: from pandemic to inflation that we haven't seen in fifty
26:04
Speaker 4: some odd years, to now a brand new technology that
26:07
Speaker 4: has people spoot, and it's it's understandable why people are
26:11
Speaker 4: reeling in some ways.
26:13
Speaker 2: The counter to this.
26:17
Speaker 3: Is, aside from the nineteen nineties specifically, like late nineties
26:23
Speaker 3: ninety five through two thousand, Like what period would you
26:29
Speaker 3: pick to live in from an economic perspective? Aside from
26:34
Speaker 3: like there in maybe like nineteen fifty four through sixty one,
26:40
Speaker 3: Like you cause, listen, like those two periods were fantastic.
26:44
Speaker 3: Sure you could even I'll even give you like twenty
26:46
Speaker 3: eighteen and twenty nineteen because things were pretty darn good then.
26:51
Speaker 3: But aside from that, it's kind of like, okay, like
26:54
Speaker 3: the last one hundred and fifty years of recorded history,
26:58
Speaker 3: maybe the norm is that things are always kind of nuts,
27:02
Speaker 3: and that's that's unfortunately just how it is.
27:06
Speaker 4: Yeah, cause and while you can point to a few
27:08
Speaker 4: periods in time where economically maybe things were a little
27:11
Speaker 4: bit easier, there are plenty of questions then still yeah,
27:14
Speaker 4: there's still like really big messiness like nineteen fifties, what
27:20
Speaker 4: did you say, nineteen fifties as an example.
27:22
Speaker 2: Like late late fifties, you can pretty.
27:24
Speaker 4: Ugly concerns about Cold War back then, and it's just
27:27
Speaker 4: weird even economically, like like there's.
27:30
Speaker 2: No guarantee what was going to turn out the way.
27:32
Speaker 4: It would nineteen nineties AIDS epidemic. Yeah, there's always been
27:35
Speaker 4: no no, But I'm talking like I know you're talking economically,
27:38
Speaker 4: but you know, if I'm broadening it out a little bit,
27:41
Speaker 4: I feel as though people get very stressed and concerned
27:46
Speaker 4: about the end of society as we know it. And
27:51
Speaker 4: when we do that, I think it's important to take
27:54
Speaker 4: a step back and like study history a little bit,
27:57
Speaker 4: because there's rarely been a time where things are been great.
28:01
Speaker 4: Well it's and again broadening it out from economically here
28:04
Speaker 4: for a moment like oh, yeah, I wish I had
28:07
Speaker 4: grown up in the nineteen twenties. Well, you know, Polio
28:10
Speaker 4: Shire sucked well, and so did the Great Depression.
28:12
Speaker 3: Yeah, you know, and fine, you could grow up in
28:15
Speaker 3: the nineteen twenties, but there's no guarantee you're gonna live
28:18
Speaker 3: till the nineteen thirties, and when you do, it kind
28:20
Speaker 3: of sucks.
28:20
Speaker 2: And by the way, then the forties were worse.
28:23
Speaker 4: Yeah.
28:23
Speaker 3: Yeah, So, and actually I'd like to open this up
28:27
Speaker 3: to the text line six one seven three six two
28:29
Speaker 3: thirteen eighty five, because this is like a question that
28:32
Speaker 3: I always love to ask. Pick a time that you
28:37
Speaker 3: would rather live in than right now.
28:42
Speaker 4: In the past. Right.
28:44
Speaker 3: Well, I mean you could pick in the future, but
28:46
Speaker 3: we're like the jury's gonna be out on that, so
28:48
Speaker 3: it'll just be uninteresting. Yeah, and I'm talking like full life.
28:51
Speaker 3: You don't get to pick like three years and be like, oh,
28:54
Speaker 3: I'd like to live from nineteen seventy three through nineteen
28:57
Speaker 3: seventy six. Please, No, Like, you don't get to do that.
29:01
Speaker 3: You you get to live a full eighty year lifespan,
29:03
Speaker 3: but you have to go through all of the stuff
29:05
Speaker 3: without knowing how it's going to unfold, and like without
29:08
Speaker 3: knowing that it's going to be okay. So six one seven,
29:12
Speaker 3: three six two thirteen eighty five. Tell me a time
29:16
Speaker 3: that you think was a better time to be born.
29:20
Speaker 3: Give me the specific birth year, and I will tell
29:24
Speaker 3: you why you're wrong. Six one, seven, three, six, two,
29:29
Speaker 3: thirteen eighty five.
29:31
Speaker 2: Let's take a.
29:31
Speaker 3: Quick break when we come back now. I can't do
29:34
Speaker 3: another K shaped piece right now. I appreciate it, talker,
29:36
Speaker 3: but we we we need to save it, Professor. We
29:39
Speaker 3: gotta live the Give the other letters some some space
29:41
Speaker 3: as well. Let's talk a little bit about mortgage rates
29:44
Speaker 3: and the impact on housing.
29:46
Speaker 1: After this, find daily interviews in full shows of the
29:49
Speaker 1: Financial Exchange on o our YouTube page. Subscribe to our
29:52
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29:55
Speaker 1: might have missed. This is the Financial Exchange Radio Network.
30:00
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30:03
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30:46
Speaker 3: Nearly thirty million households are about fifty four percent of
30:49
Speaker 3: primary mortgage holders have mortgage rates at or below forty percent.
30:54
Speaker 3: For whatever, below four percent, I'm sorry I added a
31:01
Speaker 3: decimal somehow there. And so this gets us to, you know, again,
31:06
Speaker 3: something we've talked about this year, which is for a
31:08
Speaker 3: lot of those people, if they don't have to move,
31:13
Speaker 3: they look at the financials and kind of say, I'm
31:15
Speaker 3: not sure about it.
31:16
Speaker 4: We've got a poster hanging in our studio on the
31:19
Speaker 4: five d's of housing, which are divorced, downsizing, diapers, diamonds,
31:22
Speaker 4: and death. And somebody commented on it the other day
31:25
Speaker 4: because it's just they're in the studio for an interview
31:27
Speaker 4: and it's become such a fixture that I don't even
31:29
Speaker 4: notice it anymore. But how long is that going to
31:31
Speaker 4: be relevant to us? So how long are we going
31:35
Speaker 4: to be talking about the motivators for finally getting people
31:38
Speaker 4: to sell their homes.
31:39
Speaker 2: In terms of like mortgage lock Yeah.
31:41
Speaker 3: The so Mike Simonson, who we interviewed last week, he did,
31:46
Speaker 3: he's got a whole video up actually on like next
31:49
Speaker 3: year's predictions on the housing market.
31:51
Speaker 2: You can even think.
31:52
Speaker 3: Compass has the report that you can download. It's like
31:54
Speaker 3: forty pages and some odd. Basically where he gets to
31:59
Speaker 3: is ei year, you see about two to three million
32:04
Speaker 3: of those lower mortgage rates that still do end up
32:08
Speaker 3: turning over, okay, just because you know, people say, okay,
32:12
Speaker 3: like we've got to you know, move for whatever reason.
32:15
Speaker 3: And it's it's still lower volume than you'd like to see.
32:17
Speaker 3: Actually I think it was one point five to two million,
32:19
Speaker 3: I think he said. And so where you get to
32:24
Speaker 3: on this is that once those turnover and you're into
32:28
Speaker 3: a new mortgage, like, you're free then for future movement
32:32
Speaker 3: and everything. And so basically his outline is three to
32:38
Speaker 3: five years from now, this is going to be far
32:40
Speaker 3: less impactful, right, but you still have to get through
32:43
Speaker 3: that next three to five years. And so I think
32:46
Speaker 3: that as we traverse that time, it's going to start
32:50
Speaker 3: unlocking again.
32:51
Speaker 2: More inventory and more turnover. But it still is going
32:55
Speaker 2: to be slow there. So I think that we're talking the.
33:00
Speaker 4: Five days of Housing for for a little while. You're
33:02
Speaker 4: gonna be hanging here in our studio.
33:03
Speaker 3: Yeah, And so ultimately it gets back to the point
33:09
Speaker 3: that we've talked about, you know, for the last few months,
33:11
Speaker 3: which is housing is going to work through this affordability problem,
33:17
Speaker 3: most likely over a two to three year period in
33:21
Speaker 3: which you're probably not going to see much national home
33:23
Speaker 3: price appreciation. Hopefully incomes continue to rise, you know, two
33:28
Speaker 3: to four percent a year during that time, and somewhere
33:31
Speaker 3: in that twenty twenty eight through twenty twenty nine, maybe
33:36
Speaker 3: twenty thirty range, the housing market is going to be
33:39
Speaker 3: back to normal.
33:41
Speaker 4: We at the armstore advisor grove frequently, I mean questions
33:44
Speaker 4: about financial planning, very often surround where you live your home.
33:50
Speaker 4: You know, it's oftentimes one of your biggest assets as
33:53
Speaker 4: well as one of your biggest liabilities, and we frequently
33:56
Speaker 4: get all sorts of questions about where do I live,
34:01
Speaker 4: what are the tax rates where I live? Is this
34:03
Speaker 4: the right place for me? You know, as I age,
34:07
Speaker 4: Should I be looking at relocating? How do I unlock
34:11
Speaker 4: all of this equity that I've built in my home,
34:14
Speaker 4: or you know, how do I successfully downsize? And I
34:18
Speaker 4: think it surprises some people that that is a big
34:20
Speaker 4: focus of ours, but it speaks to the fact that,
34:23
Speaker 4: you know, financial planning does not just involve investing. It
34:27
Speaker 4: really involves every aspect of your financial life. And if
34:31
Speaker 4: you've been considering a new home purchase or a relocation,
34:35
Speaker 4: or you're heading to retirement and you're not sure if
34:37
Speaker 4: where you are now is going to be sustainable. Maybe
34:40
Speaker 4: you're considering paying off your mortgage early because you're getting
34:43
Speaker 4: to that retirement date, or buying a new home and
34:46
Speaker 4: are worried about being a sixty year old with a
34:48
Speaker 4: new mortgage, which we see frequently. Please give the folks
34:50
Speaker 4: at Armstrong a call to let us help you build
34:54
Speaker 4: out that overall financial strategy and appropriately assess, Hey, what
34:58
Speaker 4: is the best thing to do. Should I be putting
34:59
Speaker 4: in these big improvements to my home before I retire
35:03
Speaker 4: and so that I've got the cash flow to fund
35:05
Speaker 4: them now, or should I put them off because I'm
35:07
Speaker 4: considering a move down the road? The number is eight
35:11
Speaker 4: hundred three nine three for zero zero one. As you're
35:14
Speaker 4: putting together your New Year's resolutions. Put one on that
35:19
Speaker 4: list about easing your financial concerns for the new year.
35:23
Speaker 4: The phone number again for the Armstrong Advisory Group eight
35:26
Speaker 4: hundred three nine three for zero zero one.
35:30
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
35:32
Speaker 1: registered investment advisor. Nothing in the ad or in any
35:35
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
35:38
Speaker 1: your own financial tax into state planning advisors before making
35:41
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
35:44
Speaker 1: advisory services.
35:45
Speaker 5: Got one text Chuck for a well you would want
35:48
Speaker 5: to ideally live in in terms of the era or
35:50
Speaker 5: the year, somebody said, nineteen seventy nineteen.
35:54
Speaker 3: So born in nineteen seventy. Okay, So if you're born
35:57
Speaker 3: in nineteen seventy, the good news is that you're probably
36:01
Speaker 3: pretty oblivious through the inflation.
36:02
Speaker 2: Of the nineteen seventies. Yeah, you might pick up on
36:05
Speaker 2: a little bit of it, but not a ton.
36:07
Speaker 3: Then you go through the nineteen eighties in your teenage years, Yeah,
36:12
Speaker 3: it's probably fine, And then you end up in the
36:17
Speaker 3: nineteen nineties. So you come of age in the nineteen nineties,
36:20
Speaker 3: as you know, a worker, good time, but then you
36:25
Speaker 3: get hit by the tech bubble, the financial crisis.
36:27
Speaker 4: And so let's say, if you're born in nineteen seventy,
36:30
Speaker 4: how old were you for the twenty two thousands decade.
36:34
Speaker 4: You were thirty years old for that, so kind of
36:36
Speaker 4: peek into your teak into your career, your peak earnings,
36:39
Speaker 4: you might be getting like whacked crushed. Yeah.
36:43
Speaker 3: So again, like my point of this, there's always like problems.
36:47
Speaker 3: There's no perfect time to be born. And yeah, nineteen seventy,
36:52
Speaker 3: I can actually buy is like probably one of the
36:54
Speaker 3: better times to be born in the last one hundred
36:59
Speaker 3: and fifty years. But also you're still dealing with multiple
37:03
Speaker 3: financial crises during your peak earning years.
37:06
Speaker 4: I mean, I can make a case for my decade
37:09
Speaker 4: of birth in the nineteen eighties, I was too young
37:13
Speaker 4: to feel the real job and home ownership ramifications of
37:17
Speaker 4: the Great Financial Crisis or the tech bubble yep. And
37:20
Speaker 4: therefore when I actually qualified for a job and had earnings,
37:24
Speaker 4: home affordability was pretty darn good in the twenty tens decade,
37:28
Speaker 4: So I can make a case for that. But then again,
37:32
Speaker 4: millions of my same cohort had an incredibly difficult time
37:35
Speaker 4: finding that job. I got lucky.
37:37
Speaker 3: Oh, Also, okay, here's my other pushback on nineteen seventy,
37:41
Speaker 3: because I was thinking just economically nineteen seventy. In the
37:45
Speaker 3: early nineteen nineties, you are twenty years old. Decent chances
37:49
Speaker 3: are ending up in Gulf War, Decent chances are ending
37:52
Speaker 3: up in the War on Terror, decent like you could have,
37:55
Speaker 3: you know.
37:55
Speaker 2: Some really bad experiences that you have to live through.
37:58
Speaker 3: And this is just talking about you know, nineteen the America,
38:00
Speaker 3: which again I can't do the whole world, but there's
38:04
Speaker 3: some real problems that you could still end up facing,
38:07
Speaker 3: you know, in terms of things that you may be
38:11
Speaker 3: very much impacted by, but keep them coming. Six point
38:14
Speaker 3: seven three six two thirteen eighty five. Tell me, other
38:17
Speaker 3: than today, what's the best year that you think you
38:19
Speaker 3: could be born? Take a quick break here when we
38:23
Speaker 3: come back hour two.
38:24
Speaker 4: Just a bit