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Fed Independence Gets a Supreme Court Boost · The Financial Exchange Show

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Speaker 2: Good morning, Welcome back to the Financial Exchange. It's at
1:15
Speaker 2: Tuesday here, the last day of June, last day of
1:17
Speaker 2: the quarter on the Financial Exchange.
1:20
Speaker 3: We've got markets in positive territory.
1:22
Speaker 2: We had a jolt report out this morning, a job
1:25
Speaker 2: openings Labor Turnover survey that indicated as to the end
1:28
Speaker 2: of May about seven point six million job openings, which
1:33
Speaker 2: was expected actually to decline compared to the previous month.
1:36
Speaker 3: It didn't. It stayed pretty steady for the month of May.
1:40
Speaker 2: This Thursday, we will be getting a full job's report
1:44
Speaker 2: on the state of the labor market in the month
1:46
Speaker 2: of June, indicating to us that we expectations are to
1:50
Speaker 2: indicate that we will see over one hundred thousand jobs
1:52
Speaker 2: created and the unemployment rate holding steady at four point
1:55
Speaker 2: three percent. Now that the Fed has very much shifted
1:59
Speaker 2: from a position of concern about the labor market to
2:05
Speaker 2: now a concern about inflation, I will be interested to
2:07
Speaker 2: see where this comes in if and it furthers that
2:10
Speaker 2: overall message from the Fed about a concern on inflation
2:14
Speaker 2: we've been getting. As the show goes on, some releases
2:17
Speaker 2: from the US Supreme Court on a number of different matters,
2:20
Speaker 2: none of which dramatically have any role in markets. One
2:24
Speaker 2: was a cap on political party donations after a rule
2:27
Speaker 2: was put into place I think in the eighties.
2:29
Speaker 3: Or nineties that got overthrown and the other was part
2:34
Speaker 3: of me just needed to clear my throat.
2:35
Speaker 2: There a ruling that rejected the president's efforts to end
2:39
Speaker 2: birthright citizenship that was.
2:41
Speaker 3: Also thrown out as part of this.
2:44
Speaker 2: But the biggest ruling that I can take away from
2:48
Speaker 2: the last couple of days that does impact stuff that
2:50
Speaker 2: we cover here on the Financial Exchange would be yesterday's
2:54
Speaker 2: ruling on Fed Governor Lisa Cook. And having a little
2:57
Speaker 2: bit more time to digest all of that, what the
3:01
Speaker 2: Supreme Court seems to very much affirm and draw a
3:04
Speaker 2: distinct line between is the White House's ability to remove
3:11
Speaker 2: officials on independent agencies, very much affirming the president's ability
3:17
Speaker 2: to do that with independent government agencies and very much
3:22
Speaker 2: rejecting the president's ability to do that when it comes
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Speaker 2: to the Federal Reserve, and drawing a very distinct line
3:27
Speaker 2: between the two. It does not mean that Lisa Cook
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Speaker 2: won't eventually be removed. The point that they made is
3:32
Speaker 2: that without cause, which is you know what the White
3:37
Speaker 2: House has been arguing over. But Lisa Cook hasn't been
3:40
Speaker 2: charged with the crime. You know, it hasn't had a
3:42
Speaker 2: grand jury, you know, subpoena or anything along the There
3:46
Speaker 2: might have been a grand journey convened.
3:47
Speaker 3: But there was no charges brought.
3:49
Speaker 2: Until she has the ability to argue that case that
3:53
Speaker 2: the president cannot remove that person, whereas the court found
3:58
Speaker 2: he does not need that cause to remove, you know,
4:01
Speaker 2: heads of independent agencies such as the FTC. And that
4:05
Speaker 2: is a distinction that we assumed was the case, but
4:10
Speaker 2: you know, needed clarification and now have it. And so
4:14
Speaker 2: you know what this actually sets up. As Nick Timros
4:18
Speaker 2: from the Wall Street Journal reports, and we've mentioned Nick before,
4:22
Speaker 2: but so far over the course of the last several
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Speaker 2: FED governors and administrations, he has been an unofficial mouthpiece
4:30
Speaker 2: of the FED. Seems to have very good connections into
4:32
Speaker 2: the FED. We will see if that continues under worsh
4:35
Speaker 2: but it's certainly continued under Powell. And his point is
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Speaker 2: that this really solidifies things for Kevin. Worshan may make
4:43
Speaker 2: his job a heck of a lot easier with the
4:46
Speaker 2: knowledge that even if the President wants to whisper things
4:49
Speaker 2: in his year.
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Speaker 3: He has no real ability.
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Speaker 2: To inject policy or influence policy over the Federal Reserve
4:57
Speaker 2: because he cannot go and remove sitting members of the
5:00
Speaker 2: FAED if he's displaced.
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Speaker 4: With Yeah, this was a huge issue with Chairman Jerome Powell. Obviously,
5:04
Speaker 4: President Trump was very critical in the way that Jerome
5:08
Speaker 4: Powell went about his interest rate setting policy, demanding for
5:11
Speaker 4: lower rates for a substantial period of time during the
5:14
Speaker 4: end of Powell's tenure. But there was an attempt to,
5:19
Speaker 4: you know, scrutinize Powell over his budget renovation for the
5:23
Speaker 4: Federal Reserve buildings and as a means to remove him.
5:26
Speaker 4: So to your point, it is really important and for
5:30
Speaker 4: the global economy in general, this is significant. The US
5:33
Speaker 4: economy and the Federal Reserves independence is something that is
5:37
Speaker 4: a lynchpin of the way US markets run and interest
5:41
Speaker 4: rate policy is dictated. So to have that reinforce from
5:44
Speaker 4: an economic perspective with the results of this Supreme Court
5:48
Speaker 4: ruling is something that I think markets, you know, large
5:51
Speaker 4: largely will applaud because it was something that was of
5:55
Speaker 4: great concern over the course of the last six or
5:58
Speaker 4: twelve months or so, and to.
5:59
Speaker 3: Be clear too.
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Speaker 2: I mean, Kevin Walsh has been nominated to a term
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Speaker 2: that will run through twenty thirty. This isn't just a
6:06
Speaker 2: President Trump thing, right. What the Supreme Court did was
6:10
Speaker 2: reaffirmed that any sitting president does not have the ability
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Speaker 2: to go and influence the FED in that way due
6:15
Speaker 2: to the structure of how the FED is funded and
6:18
Speaker 2: set up and you know, authorized under Congress. And so
6:22
Speaker 2: what this also does is insulate Kevin Walsh from the
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Speaker 2: next president because one thing we are certain of is
6:28
Speaker 2: that President Trump will not be the president for another
6:32
Speaker 2: three and a half years. It'll be somebody else in
6:34
Speaker 2: there that is guiding the country when Kevin Walsh continues
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Speaker 2: to serve.
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Speaker 3: Out his term.
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Speaker 2: And so from multiple different perspectives here, I see what
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Speaker 2: Timorros is talking about when he mentions that, hey, Kevin
6:49
Speaker 2: worsh you know, has a whole, a whole lot of
6:52
Speaker 2: weight lifted off his shoulders this morning after that ruling,
6:56
Speaker 2: where he just does not need to inject himself or
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Speaker 2: comment on any of these questions about independence, because quite honestly,
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Speaker 2: the Supreme Court just made it pretty clear.
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Speaker 3: Exactly so we will see.
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Speaker 2: I don't expect Kevin worsh to address these questions in
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Speaker 2: any way like Powell had to, I also do just
7:14
Speaker 2: wonder like j. Powell stated very publicly that he is
7:18
Speaker 2: going to remain on as a governor at the Federal
7:21
Speaker 2: Reserve the remainder of his term, which is not the norm.
7:24
Speaker 2: Typically when a chair ends his term, they also resign
7:29
Speaker 2: their governorship. He has stated publicly that, hey, he's not
7:32
Speaker 2: going to be willing to do that because of the
7:34
Speaker 2: threats to the fed's independence that he sees. And this
7:40
Speaker 2: might be enough for him to be convinced that those
7:41
Speaker 2: threats don't exist anymore. I'm not sure, but you know,
7:45
Speaker 2: if your main concern is, hey, there are substantial threats
7:49
Speaker 2: to the Fed's and dependence, and I want to continue
7:51
Speaker 2: to resigne, you know, run out my term here to
7:54
Speaker 2: ensure that threat isn't followed through on. You just got
7:57
Speaker 2: a lot of that concern eliminated here with the Supreme
8:00
Speaker 2: Court ruling, and so we will see. If that were
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Speaker 2: the case, then the President would be able to nominate
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Speaker 2: another governor to.
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Speaker 3: The board, and we will see where all that goes.
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Speaker 4: Yeah, pal is supposed to have that seat through twenty
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Speaker 4: twenty eight.
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Speaker 5: If you were to continue.
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Speaker 3: Yeah, let's take a quick break.
8:15
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8:17
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8:21
Speaker 2: we're going to be talking a little bit about all
8:23
Speaker 2: the surveys that we get on the vibes in the economy,
8:27
Speaker 2: because the vibes have been part of my language pisspoor
8:30
Speaker 2: for a few years now, and are they legitimately this
8:34
Speaker 2: bad at this moment because it hasn't made a ton
8:36
Speaker 2: of sense to us when we compare those vibes to
8:39
Speaker 2: the fundamental numbers related to the economy.
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Speaker 2: Nate Silver took a look at some data and analyzed it.
13:33
Speaker 2: At Silver, for those familiar, used to run five thirty eight.
13:39
Speaker 2: He does a lot of statistical analysis. I'm not sure
13:43
Speaker 2: he's got the perfect track record of predicting political outcomes
13:46
Speaker 2: when it comes to that data, but I do think that,
13:49
Speaker 2: as you know, a data guy, he's pretty good at
13:52
Speaker 2: analyzing actual on the ground data and giving the results
13:57
Speaker 2: then translating that to what's going to happen in the future. Sure,
14:00
Speaker 2: maybe not so much, but this isn't That's not what
14:02
Speaker 2: this is about. This is explaining data from recent history.
14:06
Speaker 2: And one of the things that we've been talking about
14:09
Speaker 2: at length is, hey, you know, this University of Michigan
14:12
Speaker 2: sentiment survey in particular has turned extremely sour when it
14:19
Speaker 2: comes to how people are responding about how they feel
14:22
Speaker 2: about the economy, And to give you some context here,
14:26
Speaker 2: it's an index, so actually, you know, determining what any
14:29
Speaker 2: of this means at any given point in time is
14:32
Speaker 2: kind of tough to do. But I'm going to pull
14:34
Speaker 2: the actual reading here and give you some comparison points
14:37
Speaker 2: for where we sit today. So May reading of this
14:40
Speaker 2: year came in at forty four point eight. That is
14:44
Speaker 2: lower than we got to in February two thousand and nine,
14:48
Speaker 2: when it got a reading of fifty six point three.
14:51
Speaker 3: It's also lower than where we were in May.
14:54
Speaker 2: Of nineteen eighty any way, to live through May of
14:56
Speaker 2: nineteen eighty, May recall coming off of one of the
14:58
Speaker 2: worst decades of e economic history, with high inflation, high unemployment,
15:02
Speaker 2: high interest rates, just a really tough economy. It has
15:07
Speaker 2: been pretty bad now for quite some time, and has
15:11
Speaker 2: even been worsening in twenty twenty six. As pretty objectively,
15:16
Speaker 2: the economy's being improving, Paul, right, like, Yeah, there's been
15:19
Speaker 2: some inflation, but the unemployment rate has stabilized, the number
15:22
Speaker 2: of jobs created has stabilized. And what Nate points out
15:26
Speaker 2: with all of this is something that we have suspected
15:29
Speaker 2: or two things that we have suspected one. In twenty
15:32
Speaker 2: twenty four, they began migrating this survey from a phone
15:36
Speaker 2: based survey where they would dial numbers and try and
15:39
Speaker 2: get people to answer, which I can see why they
15:42
Speaker 2: would have to migrate from that challenge.
15:44
Speaker 3: Nobody picks up their phones.
15:45
Speaker 2: Yeah, so you know, I understand why you needed to
15:47
Speaker 2: migrate away from that system.
15:49
Speaker 3: But it doesn't seem like they've been able.
15:51
Speaker 2: To maintain the same sampling as they had previously. And
15:57
Speaker 2: Nate points out a few things that I couldn't confers elsewhere,
16:00
Speaker 2: so I am kind of relying on his own analysis here.
16:03
Speaker 2: But one thing he pointed out is that the net
16:06
Speaker 2: share of Democrats that are responding to the survey compared
16:10
Speaker 2: to Republicans has surged since going onto a web based survey. Right.
16:16
Speaker 2: This has been denied by University of Michigan, and they
16:19
Speaker 2: do acknowledge a slight, you know, a slightly higher result
16:23
Speaker 2: of Democrats responding, but that's always been the case. And
16:26
Speaker 2: here in Nate Silver is saying that the net share
16:29
Speaker 2: is substantially higher than prior to the phone based survey,
16:32
Speaker 2: which I do think would explain a whole lot of
16:34
Speaker 2: what we're seeing, right, now we see this. It's not
16:37
Speaker 2: just a Democrat thing. It is a Republican thing too.
16:40
Speaker 2: When your guys not in the White House, you think
16:41
Speaker 2: the economy is terrible. When your person is in the
16:44
Speaker 2: White House, you think the economy is great, which is disingenuous,
16:48
Speaker 2: but the reality. The other piece that he points out
16:51
Speaker 2: is that even when you take out the demographic, you know,
16:55
Speaker 2: voting shift here, people seem to be just responding more
17:00
Speaker 2: extremely especially to the downside on web based surveys versus
17:04
Speaker 2: talking to somebody over the phone.
17:05
Speaker 4: Yeah, it was something that they really thoroughly researched ahead
17:09
Speaker 4: of that shift, going from phone to online, to make
17:11
Speaker 4: sure that they kept the integrity of the data. But
17:13
Speaker 4: Nate Silver does point out that it does seem like
17:17
Speaker 4: when you test it over a longer period of time
17:20
Speaker 4: that you do see this correlation that people are willing
17:22
Speaker 4: to be more negative online. For anyone who ever has
17:25
Speaker 4: read message boards or comments on articles, you can tend
17:31
Speaker 4: to see why people feel a little bit more comfortable
17:34
Speaker 4: behind a keyboard being somewhat more terrible, Yeah, terrible.
17:39
Speaker 5: Often.
17:40
Speaker 4: You know, this is a survey, so it's not the
17:42
Speaker 4: same thing that we're talking about, but certainly there's perhaps
17:45
Speaker 4: a little bit more cards to be negative than you
17:47
Speaker 4: would over a phone call. And so these two factors
17:52
Speaker 4: help answer what all of us collectively here at the
17:55
Speaker 4: Financial Exchange have scratched our head on for a while now.
17:58
Speaker 4: It seems like we used to spend more time covering
18:02
Speaker 4: these sentiment surveys because in the past it was a
18:06
Speaker 4: better way to gauge how are people feeling about the economy,
18:09
Speaker 4: But as of lately, when I get this data, I
18:12
Speaker 4: am more apt to quickly dismiss it, just because of
18:16
Speaker 4: some of the just misalignments that we've seen in terms
18:19
Speaker 4: of the data versus what is really going on the ground.
18:22
Speaker 2: Yeah, I mean, to Paul's point, there has never been
18:25
Speaker 2: a period in history of this survey that has been
18:28
Speaker 2: marked by such a downward shift in consumer sentiment that
18:32
Speaker 2: hasn't been accompanied by a recession. The only other times
18:36
Speaker 2: that you've seen consumer sentiment crater like it has from
18:40
Speaker 2: the highs back in twenty twenty three, twenty twenty four
18:44
Speaker 2: to where we are now unaccompanied by a recession. It
18:48
Speaker 2: was twenty twenty two that was the only other time,
18:51
Speaker 2: and we didn't go to a recession there. I understand
18:53
Speaker 2: why high inflation. But you know twenty twenty, recession, two
18:57
Speaker 2: thousand and eight, recession two thousand, nineteen ninety, like all
19:02
Speaker 2: of these other big drops in sentiment were accompanied by
19:07
Speaker 2: her session. We didn't get one this time, and so
19:10
Speaker 2: we've kind of thrown this survey out and until they
19:13
Speaker 2: find a way to be able to correct for these
19:15
Speaker 2: political biases, I don't really know what you do with
19:18
Speaker 2: this survey. Maybe you just compare it to the last
19:20
Speaker 2: couple of years and use it for that purpose, but
19:22
Speaker 2: that's not terribly helpful.
19:23
Speaker 3: In my view.
19:24
Speaker 2: We've got to take a quick break when we return.
19:27
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20:22
Speaker 1: data in the headlines, driving markets so far today Right
20:26
Speaker 1: here on the Financial Exchange Radio network.
20:29
Speaker 6: We'll see another little bit of a tech rally here
20:32
Speaker 6: so far this morning, as the first half of twenty
20:34
Speaker 6: twenty six comes to a close. Right now, the Dow
20:38
Speaker 6: is up about a quarter percent. S and B five
20:40
Speaker 6: hundred up thirty nine points, just over half a percent,
20:43
Speaker 6: Hired Nasdaq up one point one percent, or two hundred
20:47
Speaker 6: and eighty four points. For US A two thousand is
20:49
Speaker 6: up about a quarter percent. Tenure treas reeled is up
20:52
Speaker 6: three basis points at four point four zero percent. In
20:55
Speaker 6: Oil down about one percent, trading right around seventy dollars
20:59
Speaker 6: a bar ahead of today's open. The SMP five hundred
21:02
Speaker 6: jumped fourteen percent this quarter, its best three months since
21:06
Speaker 6: the second quarter of twenty twenty, while the tech heavy
21:09
Speaker 6: Nasdaq rose twenty percent for the quarter and the Dow
21:12
Speaker 6: climbed thirteen percent. Meanwhile, shares in drone maker AeroVironment jumping
21:17
Speaker 6: over fifteen percent higher after the company blue pass Street
21:21
Speaker 6: estimates for its most recent quarter after benefiting from US
21:26
Speaker 6: plans to modernize the military and secure space. The company's
21:29
Speaker 6: CEO said during its earnings call that the company's growth
21:33
Speaker 6: opportunity has never been stronger. Me excuse me elsewhere. After
21:37
Speaker 6: rising thirteen percent yesterday, shares in crypto hoarding companies Strategy
21:42
Speaker 6: are retreating about eight percent today. The company said it
21:45
Speaker 6: plans to buy back stock and sell bitcoin, among many
21:49
Speaker 6: moves in a bid to short confidence, and Nike will
21:52
Speaker 6: report earnings after today's closing bell. So far today, shares
21:56
Speaker 6: in Nike are down nearly one percent. I'm Tucker Silva
22:00
Speaker 6: and that is Wall Street Watch. And in the previous segment,
22:03
Speaker 6: we asked you the trivia question how many Olympic gold
22:06
Speaker 6: medals did Michael Phelps win? That would be twenty three
22:09
Speaker 6: and Donna from Nfield, Connecticut is our winner today taking
22:12
Speaker 6: on the Financial Exchange Show T shirt. Congrats to Donna.
22:16
Speaker 6: We play trivia every day here in the Financial Exchange.
22:19
Speaker 6: See complete contest rules at Financial Exchange Show dot com.
22:23
Speaker 2: Paul, you don't happen to be the descendant of a
22:25
Speaker 2: Singaporean billionaire, do you?
22:27
Speaker 5: Unfortunately not, Yeah, it's too bad.
22:32
Speaker 2: Go Chang Lang of ninety eight years old deceased recently
22:35
Speaker 2: and made six of his grandchildren billionaires, which nice place
22:40
Speaker 2: to be, which is not going to happen to the
22:43
Speaker 2: majority of us unfortunately, so we need to make other plans.
22:47
Speaker 2: But it is true that more than sixty trillion dollars
22:51
Speaker 2: of wealth just in the United States is going to
22:54
Speaker 2: pass from Baby boomers to primarily millennials some gen Zers
23:01
Speaker 2: over the course of the next two decades. Really, that's
23:05
Speaker 2: what we're probably looking at. Not to forget about you
23:10
Speaker 2: Gen xers, but you know, your wealth transfer will happen
23:13
Speaker 2: a little bit sooner, whereas Millennials and Gen zs will
23:16
Speaker 2: be a little bit longer out, and there's more money
23:19
Speaker 2: to go in that group. What is interesting to me
23:24
Speaker 2: is how these different generations, and it's always the case,
23:26
Speaker 2: every generation has different attitudes towards major institutions of different sorts.
23:32
Speaker 2: And I do see a pretty big difference between what
23:36
Speaker 2: millennials and Gen zs care about, especially younger millennials and
23:39
Speaker 2: Gen z cares about, compared to what older Baby Boomers,
23:43
Speaker 2: the silent generation, and even some Gen xers care about
23:46
Speaker 2: when it comes to who they do business with, you know,
23:50
Speaker 2: where they place their trust et cetera. Right, like one
23:53
Speaker 2: phenomenon that is definitely held true since the millennials. We
23:56
Speaker 2: don't work for the same company for a long time
23:58
Speaker 2: and don't really feel much loyalty to that employer. Sure,
24:02
Speaker 2: not saying they should or shouldn't, but that seems to
24:04
Speaker 2: be the case. Average tenure at an employer is a
24:06
Speaker 2: lot shorter. Pension system's gone now, so who cares? You
24:10
Speaker 2: Just get your four oh one K and you know
24:12
Speaker 2: you move along. I I don't know if I can
24:17
Speaker 2: point to like specific thoughts that I've had or decisions
24:22
Speaker 2: that I've made here, but it also seems to me
24:24
Speaker 2: that millennials and gen zers care a lot less about
24:28
Speaker 2: a brand's physical presence in their neighborhood. Like, sure, my
24:32
Speaker 2: parents want to be able to walk into a bank
24:35
Speaker 2: branch and do business with them, and I don't meet
24:38
Speaker 2: a lot of thirty year olds that give a darn. Definitely,
24:41
Speaker 2: definitely like the most important thing for me for my
24:45
Speaker 2: banking or investment app is that I have the ability
24:47
Speaker 2: to or sorry, my investing or banking relationship is that
24:51
Speaker 2: I have the ability to pull it open on an
24:52
Speaker 2: app on my phone.
24:54
Speaker 3: You do everything that I would want to do.
24:56
Speaker 2: At any time of day and have it worked seamlessly
25:00
Speaker 2: with other things that I prioritize right that to me
25:03
Speaker 2: is way more important than having a physical location in
25:06
Speaker 2: my area.
25:07
Speaker 3: And so I do just wonder what this.
25:11
Speaker 2: I suspect that the biggest banking companies in the world,
25:15
Speaker 2: the Merrill Lynches, the Morgan Stanleys, are as aware of
25:18
Speaker 2: this as I am, and are reshaping seminars run about
25:22
Speaker 2: in our industry.
25:23
Speaker 5: Of course, the number one topic to the.
25:25
Speaker 3: Question is will they be successful?
25:27
Speaker 2: You know, for the time being, they need those physical
25:30
Speaker 2: locations to service those customers, while at the same time
25:33
Speaker 2: recognizing that their thirty year old grandchildren don't seem to care.
25:38
Speaker 5: Yeah, I've been surprised.
25:38
Speaker 4: Specific to one of the big financial institutions, JP Morgan
25:42
Speaker 4: Chase has been trying in the New England area to
25:44
Speaker 4: make more of a presence felt where it's an area
25:47
Speaker 4: that's typically been dominated by Bank America, just going back
25:50
Speaker 4: to the lineage of the history of that bank, Bank
25:53
Speaker 4: of Boston, all the mergers that they had, and in
25:56
Speaker 4: my town, for example, they've opened up a physical branch
25:59
Speaker 4: and to your point, I can't recall the last time
26:02
Speaker 4: I walked into a physical branch of a bank. I'm
26:05
Speaker 4: sure all of us collectively here probably fall in the
26:07
Speaker 4: same boat where I never am really in bank offices
26:11
Speaker 4: often and actually prefer to avoid them if I can.
26:14
Speaker 4: I'd rather just do everything from my phone. And I
26:17
Speaker 4: actually get annoyed when you have to go in to
26:19
Speaker 4: do some major movement to get an official check or
26:22
Speaker 4: anything like that.
26:22
Speaker 5: It's something that is a pain in the neck.
26:24
Speaker 4: But in terms of the brand recognition and name, I
26:28
Speaker 4: wonder if that still holds as much weight. I feel
26:31
Speaker 4: like the millennial generation would be more apt to give
26:35
Speaker 4: other finished institutions a consideration rather than going with the
26:40
Speaker 4: try and trusted. Not to say that some of them
26:42
Speaker 4: won't fall into the same line that their parents do
26:45
Speaker 4: of using major fans institutions, but I have seen a
26:47
Speaker 4: little more flexibility to be with Robinhood, to be with
26:50
Speaker 4: well Front, to be with some of these other upstart businesses.
26:53
Speaker 2: Which you know there's also been some downside there. I
26:56
Speaker 2: don't remember the name of the company, but do you
26:59
Speaker 2: remember remember that online platform that would basically re route
27:03
Speaker 2: savings to different fdic.
27:05
Speaker 4: And was it Acorn that it was one of them
27:08
Speaker 4: like go belly up, skimming off the top, like extra
27:11
Speaker 4: sense is that the one you're.
27:12
Speaker 3: No, it was something else.
27:13
Speaker 2: So it basically it allowed you to expand the FDIC
27:18
Speaker 2: coverage because this one online platform would route your deposits
27:21
Speaker 2: to different banks to get the best interest rate combined
27:24
Speaker 2: with additional FDIC coverage. And turned out the underlying software
27:28
Speaker 2: behind the platform like collapsed and they couldn't track down
27:31
Speaker 2: where everyone's money was and they were locked out of
27:33
Speaker 2: their accounts for a prolonged period of time. And that
27:37
Speaker 2: was one of the few instances where I'm seeing like,
27:39
Speaker 2: oh that trust might have been a bit misplaced here
27:41
Speaker 2: on a really easy to use platform that didn't have
27:43
Speaker 2: anything underlying to it.
27:46
Speaker 4: Stilicon Valley Bank, and wasn't a great experience, right, But
27:50
Speaker 4: that was very much in your community and like you know,
27:53
Speaker 4: part of your every day.
27:55
Speaker 3: So we will see where all of this goes.
27:59
Speaker 2: But I my experience, for example, right you talk to
28:05
Speaker 2: Let's say you talk to two different people, one who's
28:07
Speaker 2: seventy five and one who is thirty five, and they
28:10
Speaker 2: each have fifty thousand dollars sitting in there checking account
28:14
Speaker 2: that they are saving for the down payment on a home.
28:17
Speaker 2: I will bring them to bankrate dot comference stance to go,
28:20
Speaker 2: look at, hey, where is the best interest rate that
28:22
Speaker 2: I can get from a savings account. The thirty five
28:27
Speaker 2: year old will say, great, give me that best rate.
28:29
Speaker 2: I don't care who the bank is, where they're from,
28:32
Speaker 2: so long as I've got my FDIC coverage, I don't care.
28:34
Speaker 3: I'll go online and set up the account, thank you
28:36
Speaker 3: very much.
28:36
Speaker 2: The seventy five year old will browse that list until
28:39
Speaker 2: they find a bank they know personally and that they
28:41
Speaker 2: can go visit the branch on. Definitely, that is a
28:44
Speaker 2: huge huge shift in terms of how people think about their.
28:48
Speaker 5: Money and our meetings. Just think about it that as well.
28:50
Speaker 4: Typically someone in that age demographic of seventy to seventy
28:53
Speaker 4: five prefers the in person, whereas the thirty five thirty
28:56
Speaker 4: year old will do the remote.
28:57
Speaker 2: Yep, yeah, yeah, let's take a quick break when we
29:00
Speaker 2: come back. A little bit of stack roulettees next on
29:03
Speaker 2: the Financial Exchange.
29:05
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30:17
Speaker 2: So Sinnapps was the company that I was referring to before,
30:20
Speaker 2: back in twenty twenty three, twenty twenty four. They kind
30:23
Speaker 2: of emerged as this banking as a service platform, so
30:26
Speaker 2: effectively other software platforms like Yoda Yoda Byotta Mercury Juno,
30:35
Speaker 2: they could launch issue checking accounts, debit cards and all
30:40
Speaker 2: of that stuff without becoming a bank themselves. They would
30:43
Speaker 2: effectively have this software sit behind the structure and deposit
30:47
Speaker 2: the funds at different banks, which would handle all of
30:50
Speaker 2: the FDIIC coverage. Unfortunately, turned out that synapps was not
30:55
Speaker 2: doing a great job of actually tracking and account hunting
31:00
Speaker 2: for all of these deposits, and there were no allegations
31:04
Speaker 2: to this point as far as I'm aware of, you know,
31:08
Speaker 2: taking money, but rather just ledgers that were not completely
31:13
Speaker 2: clear on where the money was held. And what it
31:16
Speaker 2: led to was hundreds, if not thousands of people being
31:20
Speaker 2: locked out of hundreds of millions of dollars of deposits
31:23
Speaker 2: on these platforms. The platforms, I believe themselves have since collapsed,
31:27
Speaker 2: but even today all of the funds have not been
31:30
Speaker 2: yet recovered. That was actually an update from the Consumer
31:34
Speaker 2: Financial Protection Bureau a year ago. I don't know the
31:36
Speaker 2: current status of things, but this was a very clear
31:39
Speaker 2: case of a bunch of people trusting a new and
31:41
Speaker 2: up and coming institution that kind of looked like a bank,
31:45
Speaker 2: felt like a bank, and turned out was not a
31:47
Speaker 2: bank and really screwed up a whole bunch of deposits
31:50
Speaker 2: and locked people out of their money for a very
31:52
Speaker 2: prolonged period of time.
31:53
Speaker 5: Not a good story, not a good way to go,
31:55
Speaker 5: Not a good way to go.
31:56
Speaker 3: What do you have for stack with that? Paul?
31:58
Speaker 4: Mike want to talk a little bit about funflation. This
32:02
Speaker 4: is a piece here from the Wall Street Journal. When
32:04
Speaker 4: did having fun get so expensive?
32:07
Speaker 5: This summer?
32:07
Speaker 4: When fund flation went wild? Coming from a guy who
32:11
Speaker 4: just spent a lot.
32:11
Speaker 5: Of money to go to a World Cup game yesterday,
32:15
Speaker 5: and it is it is a broad up point.
32:17
Speaker 4: It is an experience that I had a tremendous time,
32:20
Speaker 4: and it is something that I'll remember for a long
32:22
Speaker 4: period time just given the rarity of the event. But
32:25
Speaker 4: there's no two ways about it. These experiences are expensive.
32:29
Speaker 4: The World Cup, the Knicks versus Spurs NBA Finals was
32:32
Speaker 4: one where the tickets got to be an average of
32:34
Speaker 4: you know, forty one dollars a seat, just crazy numbers
32:39
Speaker 4: that you were seeing at Madison Square Garden, or maybe
32:43
Speaker 4: an average of nine thousand dollars at Madison Square Garden
32:46
Speaker 4: forty one hundred bucks in San Antonium. And it points
32:49
Speaker 4: to a broader trend that's occurred as well. In the
32:51
Speaker 4: concert space. We've talked a lot about Live Nation and
32:54
Speaker 4: some of the practices that they've had as an industry.
32:57
Speaker 4: It does seem like, particularly on the concert side of things,
33:01
Speaker 4: I've experienced this once or twice, where usually would be
33:04
Speaker 4: a little bit more open to going to a variety
33:06
Speaker 4: of shows, but now, just given the ticket prices, I'm
33:09
Speaker 4: more focused on going to an act that I really
33:12
Speaker 4: know a lot of their songs, know a lot of
33:14
Speaker 4: their material, and a little bit more hesitant to spend
33:17
Speaker 4: on someone just given the price for even a mid
33:20
Speaker 4: tier artist if I'm not as familiar with all of
33:22
Speaker 4: their catalog of songs, not all of them, but I
33:25
Speaker 4: would say a majority of them. And it's just an
33:27
Speaker 4: experience that live events have commanded a significant premium post COVID.
33:33
Speaker 4: There's tremendous amount of demand for them, and these businesses
33:37
Speaker 4: have been really taking advantage of that.
33:39
Speaker 3: Yeah, I do agree that we are seeing that summer
33:42
Speaker 3: of that. Right.
33:43
Speaker 2: The NBA Finals tickets were outrageously high, even compared to
33:47
Speaker 2: last year. Why because the Knicks were in it. You're
33:51
Speaker 2: having the World Cup tickets, Well, you know, the World
33:53
Speaker 2: Cup comes about once every four years.
33:55
Speaker 3: In the first time it's.
33:56
Speaker 2: Been in the US in decades, so I see all
33:59
Speaker 2: this stuff, but to your po point, you don't get
34:02
Speaker 2: to charge those prices unless there are a whole bunch
34:04
Speaker 2: of people willing to pay them. And nobody's forcing anyone
34:10
Speaker 2: to go to the World Cup or to the NBA Finals.
34:12
Speaker 2: There's clearly enough money sloshing around out there that people
34:15
Speaker 2: are saying, yolo, I'm gonna spend my money on this,
34:19
Speaker 2: because when am I ever going to do it again?
34:22
Speaker 2: And I agree, like I would love to see Live
34:25
Speaker 2: Nation split up and the fees that are charged there
34:30
Speaker 2: come down, But I also am not willing to look
34:34
Speaker 2: at that and say that that is the reason Taylor
34:36
Speaker 2: Swift tickets.
34:37
Speaker 3: Are eight hundred dollars.
34:38
Speaker 2: Like, No, the reason that Taylor Swift tickets are eight
34:41
Speaker 2: hundred dollars is because a whole boatload of people have
34:46
Speaker 2: a whole boatload of money and are saying, what if
34:49
Speaker 2: I never get to see Taylor Swift again in my life,
34:51
Speaker 2: I'm going to go spend one thousand dollars a ticket
34:53
Speaker 2: to go see her Atchelllette Stadium or I mean the
34:55
Speaker 2: Scot's Play or any of this other stuff.
34:57
Speaker 6: I fall in that camp with Radio Ahead next year
35:00
Speaker 6: was rumored to be coming to the US and very
35:02
Speaker 6: well could be their final tour, And yeah, I have
35:06
Speaker 6: no business in affording this ticket what it's going to cost,
35:08
Speaker 6: but considering that it's probably gonna be the last time
35:11
Speaker 6: they're going on tour, I'm like, I will pay whatever
35:14
Speaker 6: this scarce all that game.
35:15
Speaker 5: Yeah, this kid, that that was what came down to
35:17
Speaker 5: you yesterday.
35:18
Speaker 4: I mean, I guess I was talking with a friend
35:20
Speaker 4: and it seems like the US may be in line
35:23
Speaker 4: to host more in a quicker fashion than I had
35:27
Speaker 4: anticipated because the last one, I believe was ninety four, Yeah,
35:31
Speaker 4: ninety four when it was here, So I thought that
35:33
Speaker 4: was just the traditional cadence that it would be another
35:34
Speaker 4: thirty plus years. But he was mentioned to me, and
35:37
Speaker 4: I'm not sure in this that, given all the pockets
35:39
Speaker 4: of money here, that it may be sooner that it
35:41
Speaker 4: comes back.
35:42
Speaker 5: In this direction.
35:43
Speaker 4: But I was kind of knowing, like this is my
35:45
Speaker 4: one chance for a significant period to.
35:47
Speaker 2: I don't know all the details of how FIFA operates,
35:49
Speaker 2: but assuming they make a portion of the ticket sales,
35:53
Speaker 2: this has gone off.
35:53
Speaker 3: Pretty darn one.
35:54
Speaker 5: They do. They really command a significant margin. Like I
35:58
Speaker 5: was the ticket sales.
36:00
Speaker 4: Yesterday, a lot of the merch and I believe the concessions.
36:03
Speaker 2: I was gonna sayd God forbid. They got a portion
36:05
Speaker 2: of the alcohol sales. Yeah, they're going to be flush with.
36:08
Speaker 5: I think they are.
36:09
Speaker 6: Yeah, we had a texture excuse me out of the
36:12
Speaker 6: five oweight saying check out the prices for fish this
36:16
Speaker 6: summer at Fenway in twenty twenty one. That was two
36:20
Speaker 6: hundred and twenty five dollars a person this year three
36:23
Speaker 6: hundred and forty dollars a person and seventy five hundred
36:26
Speaker 6: for a luxury box.
36:27
Speaker 3: Yeah.
36:27
Speaker 2: Wow, Yeah, that explained it again, especially with these very
36:34
Speaker 2: big bands that won't be playing forever or you know,
36:39
Speaker 2: Nicks playing in the NBA finals at were World Cup.
36:42
Speaker 1: Yeah.
36:42
Speaker 2: I don't think there's a price limit that a lot
36:44
Speaker 2: of folks are willing or unwilling to pay.
36:47
Speaker 3: On some of this stuff. The wild stuff to me, like.
36:50
Speaker 2: I know you have to be at the home arena,
36:53
Speaker 2: but like the craziest thing about the NBA piece to
36:56
Speaker 2: me was the difference in prices for a game. And
37:01
Speaker 2: it was it Houston, San Antonio versus New York.
37:05
Speaker 3: It was triple Yeah, it was triple the price. It
37:09
Speaker 3: was like a fly to San Antonio they did.
37:13
Speaker 2: Yeah, but you know, even then, it didn't drive up
37:16
Speaker 2: the prices to be anywhere near as competitive as watching
37:19
Speaker 2: them play in New York City.
37:21
Speaker 6: Another I'm just kind of thinking of like big concerts
37:24
Speaker 6: like this year, and is one of your bucketless items
37:30
Speaker 6: the Sphere in Las Vegas?
37:32
Speaker 3: Probably?
37:33
Speaker 2: Yeah, me too, Like I recognize how ridiculous it's going
37:37
Speaker 2: to be to do it, but yeah, it has from
37:40
Speaker 2: all accounts been pre what a beer saut there.
37:42
Speaker 3: Like forty whatever?
37:43
Speaker 6: Yeah, Vegas prices yeah, yeah, but like Metallica is playing
37:46
Speaker 6: there in October. Get in price eleven hundred dollars.
37:50
Speaker 3: Oh my god.
37:52
Speaker 6: But I'm like, hey, how much longer is Metallica gonna
37:56
Speaker 6: be playing? And oh, by the way, the Sphere is
37:59
Speaker 6: freaking amazing.
38:01
Speaker 3: Yeah, I don't know.
38:01
Speaker 2: That's uh, I'm not doing it. It's not gonna be
38:04
Speaker 2: on my list, but I do know that that's an example.
38:06
Speaker 2: They will sell it out. There is no they we'll
38:09
Speaker 2: sell it out. A bunch of old Gen xers and
38:11
Speaker 2: baby boomers want to go watch Metallica at the uh
38:15
Speaker 2: AT in Vegas, and they've got the deep pockets to
38:18
Speaker 2: be able to do.
38:19
Speaker 5: So that's the reassuring thing.
38:20
Speaker 4: With all this AI conjectures, people still want the live
38:23
Speaker 4: ex that's experience.
38:24
Speaker 5: You can clearly see you.
38:25
Speaker 3: Still want to interact with humans.
38:27
Speaker 5: Yeah, for now, it's good.
38:29
Speaker 8: Uh.
38:29
Speaker 2: Markets remain in a positive territory and in fact surging
38:33
Speaker 2: since we last updated. NASDAK now up one point three
38:37
Speaker 2: percent as we close out the second quarter, S and
38:40
Speaker 2: P still up two thirds of a percent, and the
38:42
Speaker 2: Dow up one fifth. We'll be back at it tomorrow.
38:45
Speaker 2: It looks like we're gonna have a pretty positive close
38:47
Speaker 2: to the second quarter. I have a great rest of
38:49
Speaker 2: the day, folks,