Latest / The Financial Exchange Show / The economy's landing isn't as soft as we think

Transcript

The economy's landing isn't as soft as we think · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:03
is hosted by employees of the Armstrong Advisory Group, a
0:05
registered investment advisor. All opinions expressed are solely those of
0:08
the hosts. Do not reflect the opinions of Armstrong Advisory
0:11
or anyone else. Investments can lose money. This program does
0:14
not offer any specific financial or investment advice. Please consult
0:17
your own financial, tax, and estate planning advisors before making
0:20
any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
this program do not endorse each other or their services.
0:26
Armstrong and Money Matters Radio do not compensate each other
0:28
for referrals and are not affiliated. This is The Financial
0:34
Exchange with Chuck Zada and Paul Lane, your exclusive look
0:38
at business and financial news affecting your day, your city,
0:42
your world. Stay informed and up to date about economic
0:45
and market trends, plus break in business news every day.
0:49
The Financial Exchange is a proud partner of the Disabled
0:52
American Veterans Department of Massachusetts. Help us support our great
0:56
American heroes by visiting DAV five K dot Boston and
1:00
making a donation Today. The DAV five K Boston is
1:03
presented by Veterans Development Corporation. This is the financial Exchange
1:08
with Chuck Zutta and Paul Lane.
1:12
Speaker 2: Chuck, Paul and Tucker with you today. And stocks are
1:17
just kind of flopping around, not really doing much of anything.
1:21
They're a little up, little down, a little left, little right,
1:24
but they're just hanging out. The Dow's up forty points,
1:26
the S and P's up three nasdac's up twenty seven,
1:29
So no real movement about a tenth of a percent
1:32
on all the major indices, or a little bit less
1:35
on the S and P. Five hundred tenure Treasury selling
1:37
off back above three point eight percent, up five point
1:40
nine basis points three point eight oh two. We've got
1:43
oil continuing to rise off its highs for the day,
1:47
but West Texas Intermediates still up another dollar twenty eight
1:50
a barrel to seventy one eleven, and the triple A
1:53
national average for gas prices that is still falling. Remember
1:59
there's often.
1:59
Speaker 3: A delay here.
2:00
Speaker 2: Plus we have some a little bit of a backlog
2:03
on gasoline futures coming down that still needs to hit.
2:06
So the TRIPA national average below three twenty a gallon
2:09
to three nineteen and six tenths another eight tenths of
2:11
a cent off of yesterday, and so continuing to see
2:15
those prices sliding, and we've got gold today down nineteen
2:20
seventy an ounce to twenty six seventy and sixty cents. Paul,
2:26
there's a piece in Bloomberg Opinion today. It's titled the
2:29
US Economy's landing isn't as soft as we think. And look,
2:36
I don't think that this piece actually says anything about
2:38
the soft landing or not, because the broader economic data
2:41
is the broader economic data. But what it is pointing
2:44
out is the auto market, specifically the auto loan market
2:48
is getting a little bit dodgy at this point and
2:52
is a real cause for concern, though not one that
2:56
is large enough to impact the US economy in the
2:59
way that the excesses of the housing bubble did back
3:02
in two thousand and seven two thousand and eight.
3:04
Speaker 4: I was waiting for the conclusion at the piece to
3:07
say that it was going to have a larger impact,
3:09
because that's kind of what the title implies, that it's
3:12
going to have this outstated impact, and really that's not
3:16
where it landed. I would say that to summarize the piece, basically,
3:20
if you look at the auto loan market, it is
3:23
accounting for about one quarter of the non mortgage consumer
3:27
credit out there, and debt levels have been rising. I mean,
3:30
all of us know. If you're looking at vehicle prices
3:33
over the course of the last three or four years,
3:35
they're significantly more expensive. And what occurred in twenty one
3:39
and twenty two is that the average price for a
3:43
vehicle balloons significantly where you saw in the three years
3:47
prior to January of twenty twenty. So from seventeen to
3:50
twenty the average monthly vehicle payment increased by about forty bucks,
3:55
not too bad, very manageable. What you saw from January
3:59
of twenty twenty to the three years after that to
4:01
January of twenty twenty three is that average monthly car
4:04
payment was up by one hundred thirty bucks to six
4:06
hundred dollars a month, so a substantial increase. And for
4:09
those who were lending to these buyers that had relatively
4:13
low credit scores. There's starting to be some stress in
4:16
that market, to the point where the delinquency rate that
4:19
we're seeing on auto loans is a little bit more
4:22
reminiscent of what we saw in twenty ten. To be clear,
4:27
I'm not making a parallel to the overall economy being
4:30
anywhere near that level. But we're seeing about three point
4:33
eight percent auto loan delinquencies versus it's really been trending
4:38
around three percent over the last ten years or so.
4:40
If you look back at the data.
4:42
Speaker 2: And the big thing on the auto loan market is look,
4:45
the data can be concerning, which I think it is,
4:48
Like it's it's clearly trending in a bad direction. But
4:52
the overall size of the auto loan market just isn't
4:57
big enough to cause the kinds of problems that we
4:59
saw in two thousand and eight. Could it cause you know,
5:02
a slowdown in the US economy, absolutely, But remember that
5:07
when we talk about just the relative scales here, the
5:10
auto loan market is a tenth of the size of
5:13
the mortgage market. It's not good. You're not going to
5:18
have like the great auto recession of twenty twenty five.
5:22
You might have, Yeah, this was a contributing factor and
5:25
you know, heading to recession and consumers needed to de leverage,
5:28
But this is not the housing market in that in
5:32
you know, two thousand and eight, just because it's not
5:34
nearly as big and it's not something that has that
5:38
kind of impact as a result, So it's problematic. Uh,
5:43
it is something that does suggest, you know, weakness amongst
5:46
a swath of American households, But it doesn't keep me
5:51
up at night because it's not going to be the
5:52
epicenter of whatever happens. It'll be collateral damage that you know,
5:56
happens as a result of whatever else is going on
5:59
in the US ecay.
6:00
Speaker 4: Right, there's some individual companies maybe that overextend themselves lending
6:03
during that period of time, but we're looking at a
6:06
very small set subset of the US economy, in the
6:09
US market, stock market in general. That it is not
6:12
something that you should add to your list to worries.
6:15
There's plenty that you can have right now looking at
6:17
the geopolitical environment, but this particular economic story something that's noteworthy,
6:23
but not something that should be overly concerning.
6:25
Speaker 2: Let's talk a little bit about this port strike now
6:28
into its second day, and look, this is something that
6:33
the overall impact on the US economy has the potential
6:36
to be significant for sure. Yeah, this is something that
6:40
should keep you up more than yes, the auto loan issue,
6:43
because if this goes on for yeah, we get past
6:46
mid October on this, there's some real problems in the
6:50
US economy then, so we're not there yet, but hey,
6:54
how does this end up progressing? I've seen a couple
6:57
of different things in terms of of you know where
7:01
this is going to go? Some people and again I look,
7:05
Paul and I have never worked on a dock in
7:07
our life. Paul, do you know anyone who works on
7:11
the docks?
7:12
Speaker 4: I have a clienter too, whose backgrounds as longshoreman, but
7:16
not current. I believe that they're retired.
7:18
Speaker 2: Tommy used to work on the docks. Yes, he did,
7:21
he did. I heard that he did. Heard that a
7:23
couple times union's been on strike, you know, so he's
7:25
down on his luck. It's tough. But in any case,
7:29
Paul and I don't like we're not involved in that
7:32
business in any way, shape or form. So all I
7:34
can do is read the thoughts of people that are
7:38
way smarter than me and tied into what's going on there.
7:42
I've seen some suggesting that the movement yesterday where the
7:45
union came down off its seventy seven percent wage, increased
7:49
request down to sixty one and a half, and the
7:53
ports and shippers boosted their offer from forty percent in
7:58
wage growth up to fifty as hey, like we're getting
8:01
closer to middle ground there. There still are questions about
8:04
automation as well, and things like that as it relates
8:07
to you know, how these ports are going to be
8:10
operated in the future. But I saw some people who
8:13
understand this business say yeah, there's a good chance this
8:16
could be solved by the end of the week. I
8:18
then saw someone else who whose view I respect on
8:21
this just said, hey, this might actually take longer, Like
8:24
this is one issue, but the automation one's the bigger one,
8:27
and that's not being addressed here. So I don't know
8:31
how long this goes on, but I do know if
8:34
we're still sitting here after Columbus Day saying, yeah, this
8:38
thing is still dragging out real problem for the US
8:42
economy and it could be the tipping point that ends
8:45
up throwing the US economy into recession.
8:47
Speaker 4: Not to mention, the longer it goes on, the longer
8:50
concern you'd have, or the rather the more concern you'd
8:52
have that inflation could potentially pick back up again. If
8:55
this is to go on for weeks on end, I
8:58
would hope that that is not the case. That they
9:00
can come to an agreement. What is at stake here,
9:04
what the impact is, Just to give listeners a sense,
9:07
you have companies like Walmart, Ikea, Samsung, hon Depot, Bob's
9:11
Discount Furniture. Those are some of the four or five
9:13
largest companies that in through import through these fourteen major
9:17
points ports out there on the East Coast and the
9:20
Gulf Coast. And we've got about forty five thousand long
9:23
shortmen on strike. This is the first strike these constituents
9:28
since nineteen seventy seven. The West Coast, which has a separate.
9:32
Speaker 3: Union, they had struck.
9:33
Speaker 4: I believe it was a little over a year ago,
9:35
so there is some basis of comparison there. The best
9:39
way to summarize this, it was mentioned in one of
9:41
these pieces here that duration amplifies impact. That is the
9:44
best way to summarize this. That the longer this goes on,
9:48
the more the impact can be felt throughout the US
9:51
economy because these ports handle a significant amount of trade volume,
9:55
about three trillion dollars a year.
9:57
Speaker 1: Tune in for Trivia brought to you by Applebee's every
10:01
day at eleven twenty for your chance to win cool prizes.
10:04
Text us at six one seven three six two one
10:07
three eighty five and use keyword Applebee's complete rules are
10:10
available at Financial Exchange Show dot com. Face is the
10:14
Financial Exchange Radio Network. The Financial Exchange Show podcast drops
10:18
every day on Apple, Spotify and iHeartRadio. Hit that subscribe
10:22
button and leave us a five star review. You're listening
10:25
to the Financial Exchange Radio Network.
10:29
Speaker 2: Paul. There's a piece in Boomberg Opinion. It's titled Algorithms
10:31
don't raise rents, landlords do. What's the premise of it?
10:35
Speaker 4: Aside from that, basically, there is some rumblings out there
10:41
that the Kamala Harris, her potential administration, if she were
10:46
to get into as if office, would look at cracking
10:49
down on algorithmic price fixing software to raise rents. So
10:54
typically what you'll have is about one third of rental
10:58
units out there use algorithm data in order to assess
11:02
what they should charge for rent in a given market. Now,
11:07
it's I guess being mentioned here that this could potentially
11:12
cause price collusion if everyone was using that same source
11:16
of data, and I I just can't get behind it.
11:19
Speaker 3: Check.
11:20
Speaker 4: I don't think that this is what should be pointed
11:23
to as the culprit for raising rents. I think it's
11:25
much more the simple economic concept of supply and demand.
11:29
We live in a country that has underdeveloped on the
11:33
supply side for the last decade plus, and that is
11:36
much more the reality of what we're seeing on the
11:39
rent side of things. If you look in areas that
11:42
are seeing a boost and supply, like Phoenix and Austin
11:46
some of these others, you actually are seeing price reductions there.
11:49
And so my view is that the market conditions will
11:51
dictate what rent is being assessed.
11:54
Speaker 3: And this concern.
11:55
Speaker 4: About worrying about algorithms, which should be used as a
11:58
tool to help set prices and to help landlords maximize
12:02
their profitability, is not something that should be used is
12:07
used for malicious practices, because the market should dictate prices.
12:12
Speaker 2: So I think that when we're talking about rents, it's
12:15
very much possible that it can be both of these
12:18
things that are causing the uptick. We've talked at about
12:22
how we just have not built enough housing and that's
12:25
a problem. But I think it was maybe a month
12:29
and a half ago a company called real Page. I
12:31
don't know if any listeners are familiar with it or not,
12:34
but it's a basically a rent management software that landlords
12:39
use in order to help them determine their rents. And
12:43
they were subject to a DOJ lawsuit about a month
12:46
and a half ago, and the lawsuit included quite a
12:50
bit of data that pretty much showed, Hey, the way
12:52
that it works is by effectively sharing rent data between
12:57
different landlords to tell them how how much to charge
13:00
in order to maximize their revenue. And sometimes that might
13:05
be keeping units off the market. Sometimes it might mean
13:09
larger increases that their software recommends. But the DOJ basically says, look,
13:15
you are effectively creating a rent cartel in doing so,
13:19
because you are colluding between different landlords to raise rents
13:23
to maximize the total amount of rent collected. And that's
13:27
not something that is okay which I would agree with,
13:31
like collusion in like cartelization, if that's a word, we
13:35
just made it so it is now like that stuff
13:38
that is bad. We want more competition. We don't want
13:41
businesses saying, hey, what are you charging? Maybe i'll charge
13:44
that too, because that's how you end up with higher
13:47
prices for consumers, and that that kind of collusion is
13:50
specifically bad for buyers. So I think it can be
13:56
both ultimately, and yes, the bigger impact probably comes from
14:01
not building enough housing. But the fact that we have
14:05
software out there that specifically is built to allow for
14:09
the sharing of rent data so that landlords can maximize
14:14
the amount of rent that they are collecting doesn't really
14:18
sit well with me either. Like I think that I
14:20
don't think that's something that anyone should say, Yeah, that's
14:23
just totally okay, Like that's fine. I mean, in any
14:27
other business, we'd say that's collusion. We call it price fixing.
14:31
Remember how many times, Tucker, how many times has the
14:33
freakin' as Big Tuna been caught up in this? Remember
14:35
all the tuna price fixing scandals covered Big Tuna? Yeah,
14:39
big Tuna. You gotta watch out for those guys. What
14:42
about big rent?
14:43
Speaker 1: Uh?
14:44
Speaker 2: Big rent rent? Damn high? Yeah, the tuna is too
14:47
high in Mercury. Anyways, I don't know. I think it
14:53
can be both. And that's kind of where I land
14:55
on this is, Look, we need to build more housing,
14:58
but have software out there that allows for collusion like
15:04
price fixing between landlords. It's probably bad. Am I wrong?
15:09
That would not be good. So that's kind of where
15:12
I stand on it. Let's see I want to save
15:15
this Florida story for the next segment here. You want
15:20
to talk about CVS or Google.
15:23
Speaker 3: Let's talk a little CVS.
15:25
Speaker 2: Okay, things at CVS they're bad. They're very bad. Not
15:28
just at CVS, at Walgreens too. The two major US
15:31
pharmacy chains right now are dying, and it's unclear whether
15:35
or not they are going to exist in the format
15:39
they exist in a decade from now. Quite honestly, they
15:43
have all kinds of problems, including CVS. Look, they've got
15:48
all these units that they tried to stick together in
15:50
terms of They've got, you know, a basic pharmacy, They've
15:53
got a pharmacy benefit manager, which they bought as part
15:57
of what was it the Signa acquisition or yeah.
16:01
Speaker 4: In twenty seventeen. That one, to me was probably one
16:04
of the worst acquisitions of the several that they made,
16:08
where ETNA, as a health insurer, has offered and enrolled
16:12
hundreds of thousands of people into its own private medicare
16:15
program and that has just been extremely costly and really
16:19
been a difficult area to endeavor into. And Mike and
16:22
I were discussing yesterday, you would think with the amount
16:25
of knowledge that CBS has in the healthcare space that
16:29
they would have been able to assess appropriately assess the
16:33
risks that come with waiting in those waters. Now, perhaps
16:36
they couldn't have foreseen that the federal government was going
16:39
to get in and negotiate prices drug prices through Medicare,
16:43
But there's no more company out there that should have
16:48
been well aware of these risks before making this significant acquisition.
16:51
It just has not worked out.
16:53
Speaker 2: So the acquisition has been bad. Their pharmacy business is
16:57
kind of dying on the vine, a combination of people
17:00
changing where they buy the non prescription drug stuff. People
17:03
just aren't going in to buy like shampoo and deodorant
17:06
in cvs anymore. You've got pharmacists that are completely burnt
17:11
out because management is increasing their hours and the stuff
17:15
they need to do and they're not getting enough help there.
17:19
So you've got pharmacists that are saying, look, we're fed
17:21
up with this. And there have been a couple different
17:24
walkouts of pharmacists at cvs in the last year.
17:27
Speaker 4: And delivery alternatives out there as well in the pharmacy space.
17:30
Speaker 2: So I don't really know what the future looks like
17:34
for big pharmacy, not big pharma, but big Pharmacy. It's
17:41
kind of like, I'm not sure what the business is
17:45
for these companies going forward, given how they're being out
17:49
competed in a number of areas and they've overleveraged buying
17:53
companies that have worked out badly for them.
18:04
Speaker 1: Bringing the latest financial news straight to your radio every day,
18:08
It's the Financial Exchange on the Financial Exchange Radio Network.
18:14
Miss any of the show. Catch up at your convenience
18:17
by visiting Financial Exchange Show dot com and clicking the
18:20
on demand icon, where you'll find all of our interviews
18:23
in full shows. This is your home for the latest
18:26
business and financial news in New England and around the country.
18:30
This is the Financial Exchange Radio Network.
18:33
Speaker 2: Paul, have you heard of Google?
18:34
Speaker 3: Yes?
18:35
Speaker 1: I have?
18:35
Speaker 2: Uh do you ever Google anything?
18:37
Speaker 3: All the time?
18:38
Speaker 1: So?
18:39
Speaker 2: Google is working on their next generation or next iteration
18:44
of artificial intelligence, and specifically it's focusing on developing out
18:50
platforms that allow for more reasoning to happen, so not
18:55
just the recitation of facts and data. You know, Hey,
18:59
you go to chat GPT, tell me a little bit
19:01
about you know, shrimp and the North Atlantic. Okay, can
19:06
spit out whatever reasoning would be Hey, in a fight
19:10
between a North Atlantic shrimp and a South Atlantic shrimp,
19:14
which one do you think would win? You and I
19:16
can reason that out. I mean we can't because I
19:19
don't know the difference between them, but obviously the North
19:21
Atlantic one would probably win because of its greater tolerance
19:24
for cold water. Just putting that out there. You know,
19:28
temperature matters. But right now, if you the older models
19:33
from different AI companies, they don't reason. They recite facts,
19:38
but they don't reason. Open AI and Microsoft about maybe
19:42
a month or so ago, released the latest iteration of
19:44
THEIRS that had you know, more reasoning capabilities baked into it,
19:49
and Google trying to work on similar improvements as they
19:53
try to develop new products.
19:55
Speaker 4: Yeah, Google's been a little bit slower to release any
19:57
of its updates in this space, just because the brand
20:00
reputation that they have, they recognize it's a marathon. They're
20:04
really focused on, obviously the ethical concerns that come with
20:07
this type of technology, But it continues to be interesting
20:11
the innovation in these fields. This is much more of
20:14
a reasoning based approach rather than a factor citing.
20:18
Speaker 3: Like Chuck mentioned there.
20:19
Speaker 2: Folks, The Armstrong Advisory Group is hosting an upcoming seminarts
20:24
in less than a week. It's at the MGM Hotel
20:27
in Springfield on Tuesday, October eighth. We're gonna be broadcasting
20:31
from the hotel, which is directly connected to the casino.
20:34
There's free parking in the MGM lot. You all you
20:37
do is just take the elevator down to the casino
20:38
four and you're right into the hotel from there, so
20:41
you can join us for a live broadcast of the
20:44
Financial Exchange again. This is on Tuesday October eighth, followed
20:48
by an educational lunch with the Armstrong Advisory Group. What
20:51
are we gonna be talking about the upcoming presidential election,
20:55
the economic policies proposed by both candidates, what affect all
20:59
this might have on the current economic landscape, and how
21:03
we might see potential volatility and how that could help
21:05
to influence different investment decisions. You can sign up for
21:09
this event again. It's on Tuesday October eighth by visiting
21:13
Armstrongadvisory dot com slash events. Just fill out the form
21:18
that's associated with it, and that's all you gotta do.
21:21
Speaker 1: Again.
21:21
Speaker 2: It's at Armstrong Advisory dot com slash events.
21:26
Speaker 1: The proceeding was paid for by Armstrong advisory group a
21:28
registered investment advisor. Nothing in the ad or in any
21:31
Armstrong guide a specific financial, legal, or tax advice. Consult
21:34
your own financial, tax into state planning advisors before making
21:37
any investment decisions. Armstrong may contact you to offer investment
21:40
advisory services.
21:41
Speaker 2: I want to talk a little bit about the Florida
21:44
real estate market because it's starting to get a little
21:48
bit dodgy down there, and two culprits which are largely intertwined.
21:53
The first is you just have these hurricanes that are
21:57
continuing to batter the date this year, the hurricane that
22:03
just went through Helene was the fifth straight year that
22:07
a Category three or above has hit the United States again,
22:11
not all hitting Florida, but that's the first time ever
22:14
that we have seen this happen where five years in
22:17
a row, you've had a category three or above hit
22:20
the continentally United States in a five year period. So
22:24
you've got hurricanes that have been happening with you know,
22:26
greater frequency, larger ones, and it's starting to impact homeowners
22:32
there in a couple different ways. The first being people saying, look,
22:34
I'm fed up with as, I'm sick of it, and
22:37
the second being hey, what's happening to homeowners insurance premiums
22:40
is entirely predictable as well. Peace in the Wall Street
22:44
Journal interviews one person, Jacob McFadden, who moved down to
22:48
Florida in twenty twenty, was paying eight to eighty a
22:51
year to insure his home. It's now up to thirty
22:54
three hundred dollars a year, almost quadrupling in a four
22:58
year period. And this quite honestly, I don't think there's
23:02
any end in site for homeowners insurance premiums down in
23:07
the Southeast, based on what we are seeing coming out
23:10
of property and casualty insurers right now.
23:13
Speaker 3: No, it's just astounding.
23:14
Speaker 4: Particularly that example really hit home that you mentioned right
23:17
there with that quadrupling over a four year period, and
23:21
that impact is being felt through all throughout Florida. Tampa
23:24
Bay was an area post pandemic where you saw the
23:27
fifth most popular relocation destination there. A lot of people
23:32
went down there, the coastal living and the remote work
23:35
that surged during twenty twenty. Now sort of realizing that
23:40
with the amount of hurricanes that have hit that area,
23:42
it's just really difficult to own property there. And similarly,
23:46
this is occurring in California as well, where you have
23:49
a lot of insurers leaving in that state in addition
23:53
to Florida, and particularly for luxury homes, what the homeowners'
23:57
insurance companies are stating is that they much rather diversify
24:01
their risks amongst four two hundred and fifty thousand dollar
24:05
homes than one a million dollar luxury home, just because
24:08
the costs associated with potentially replacing that one million dollar
24:12
home if it were to get knocked out.
24:13
Speaker 2: Just as an example from another piece in the Wall
24:15
Street Journal, It's Citizens Financial Group, home insurance premiums for
24:18
mortgage loans of more than one and a half million
24:21
dollars jumped one hundred thirty percent between mid twenty twenty
24:26
and mid twenty four. For mortgages between four hundred and
24:28
eight thousand, home insurance premiums increase twelve percent over that
24:32
same period. So it very much is something that's factoring
24:36
in UH. And part of that is also because look,
24:40
if you look at where highly priced homes tend to sit,
24:42
they're in areas that have great views. They're on the ocean,
24:46
they're on top of a cliff. They are, you know,
24:50
in places that are inherently dangerous because that danger produces
24:54
the great views that people want. On the other hand, hey,
24:58
if all you see your window is I don't know,
25:03
you know, a bunch of forests surrounding you in you know, Vermont? Okay,
25:08
what what? What? What danger we talking about there? It's
25:10
it's not the same situation. So this is something that
25:15
I don't think we are fully through yet, and how
25:18
it evolves is going to be something that has the
25:21
potential to quite honestly, dramatically reshape migration patterns within the
25:27
United States over the next decade because one of the
25:31
reasons why people move to a lot of these different areas.
25:33
Florida is an example. Hey, it's cheap to live there.
25:36
There's no income tax, you know, Like, Okay, it's great
25:39
that there's no income tax, but now my homeowner's insurance
25:41
is twelve thousand dollars a year, you know, Like that's
25:44
basically an income tax.
25:47
Speaker 4: Plus the property taxes that are already built to structure
25:50
to be higher because of no state income tax.
25:52
Speaker 2: Correct. So this is something that that really bears watching
25:56
because again it's it's not just in Florida. Again, California
26:00
is facing the same issues Colorado is facing the same
26:03
issues much of the Southeast, and it's not because of
26:07
the politics of any particular state government or anything. It's
26:11
just the math that insurers are doing with some of
26:13
the losses they've racked up in these departments over the
26:17
last three to four years, and so until they can
26:21
get to a point where they are no longer hemorrhaging
26:24
billions of dollars on homeowners insurance rates are going up.
26:30
That's the unfortunate reality of where we are going in
26:34
that business. There, take a quick break here. When we
26:37
come back, it's time for stack Roulette.
26:40
Speaker 1: Find daily interviews and full shows of the Financial Exchange
26:43
on our YouTube page. Like us on YouTube and get
26:46
caught up on anything and everything you might have missed.
26:49
This is the Financial Exchange Radio Network. The Financial Exchange
26:54
streams live on YouTube. Like our page and stay up
26:57
to date on breaking business news. All Morning Base is
27:01
the Financial Exchange Radio Network.
27:09
Speaker 5: The Financial Exchange has built an incredible partnership with the
27:12
Disabled American Veterans Department of Massachusetts. We can't wait to
27:16
take barton this year's DAV five K, set for Saturday
27:19
November ninth at Fort Independence on Castle Island. You can
27:23
help our Great American Heroes by walking, running, or simply
27:25
making a donation. Your gifts will support services such as
27:29
the Veteran Advancement Program, which offers permanent and affordable housing
27:32
opportunities for veterans and their dependents. Learn more at DAV
27:36
fivek dot Boston. Time is running out if you want
27:39
to take part, so once again, head to DAV fivek
27:42
dot Boston and secure your spot today.
27:45
Speaker 3: The DAV five K.
27:46
Speaker 5: Boston is presented by Veterans Development Corporation.
27:50
Speaker 2: Paul, What do you have for me? For stack Roulette?
27:53
Speaker 4: Southwest Airlines is shaking up their seating Chuck here. This
27:58
has been mentioned, but we got some more detail on
28:01
this shakeup on their recent investor Day. Where effective for
28:05
early twenty twenty six travel and late next year twenty
28:08
twenty five, when you're booking flights with Southwest, you will
28:12
be able to pick your seat. They will no longer
28:14
be having their randomly assigned seating and as a result,
28:19
the Wall Street Journal here did a nice breakdown of
28:21
kind of the winners and losers of this change. The
28:25
winners are those people who get anxiety be able not
28:28
knowing where they're gonna be sitting going into their flight.
28:31
Eighty six percent of airline customers, according to some a
28:35
survey done, want assigned seats, So those people will be
28:38
satisfied to know that Southwest is going to have that
28:41
going forward. But for those who like to take a
28:44
chance with seat roulette, that is no longer going to
28:47
be an option. Also, what you're gonna see is if
28:49
you buy the cheapest fare out there, which is the
28:51
Want to get Away Fair, your seat is gonna be
28:54
randomly assigned during online check in, meaning those Southwest kind
28:59
of this notion, you're just gonna get the scraps at
29:02
this point if you buy that cheapest ticket. Southwest argument
29:06
to that is they still allow for the two free
29:08
checked bags along with even that cheapest seat that you
29:13
can purchase on that want to get Away Fair.
29:16
Speaker 2: I don't know why people complain about the whole Southwest
29:19
not picking a seat thing.
29:21
Speaker 5: Didn't bother me too much.
29:23
Speaker 2: You know what you're signing up for. It's not like
29:24
you got fooled.
29:25
Speaker 4: Well, yeah, you just pick another airline. It matters to you,
29:27
and it's what type of flight would you be concerned about?
29:31
Have it like we have young kids here. If I'm
29:33
flying somewhere with young kids.
29:35
Speaker 2: I'm not booking Southwest.
29:36
Speaker 3: It's not gonna be an option. You have to have
29:38
a signed seating.
29:39
Speaker 4: You have to know how we can situate ourselves to
29:42
protect the other airplane flyers from my young kids throwing
29:45
a fit. If I was flying somewhere on a bachelor
29:47
party solo, then I wouldn't really care as much. It
29:51
wouldn't be as big of a concern. When you're traveling
29:53
solo a lot easier than with with young kids.
29:56
Speaker 2: So you're going on lots lots of bachelor parties.
29:58
Speaker 3: I wish, man, it's been a long time.
30:00
Speaker 2: I would love to go on a bachelor party right now.
30:02
Speaker 3: I wish I would love it.
30:04
Speaker 2: Paul, why don't Why don't the three of us get
30:06
together one weekend then fake a wedding And what's what's
30:11
the movie where there is a movie? What's the movie
30:14
where they have the fake friend who they uh, these
30:17
like four guys create this fake friend that they have
30:20
through the entire adulthood to use as it's like, oh,
30:23
escapegoat for everything.
30:24
Speaker 5: I think it was just called bachelor's.
30:26
Speaker 2: No, no, no, it's not a it's not a bachelor
30:28
party movie. It's one where they create this fake friend
30:32
that they're always using as an excuse to go do things.
30:37
It's it's something like Ricky. Yes, that's Ricky Stanicky. That's
30:41
the one. So can you read the premise of it
30:46
from like Wikipedia or Rotten Tomatoes or something.
30:49
Speaker 3: I'm not doing it justice.
30:50
Speaker 5: Stand by, I'm pulling it up now. When three childhood
30:54
best friends pull a prank that goes wrong, they invent
30:57
the imaginary Ricky Stanicky to get them out of troubled.
31:00
Twenty years later, they still use the non existent Ricky
31:03
as a handy alibi for their immature behavior. Director Peter Farley.
31:08
Speaker 2: So, I think we should go to Ricky Stinicky's bachelor
31:12
party in a few weeks and see how it goes.
31:14
Speaker 3: We've got a new employee at Armstrong Advisory Group. That's
31:17
what I'm telling my way.
31:18
Speaker 2: Ricky Stanicky is uh, you know, he's We're heading to
31:22
Alaska for some tuna fishing, because that's that's what Ricky
31:25
wanted to do.
31:27
Speaker 3: I would not rank high my bachelor party destination.
31:29
Speaker 2: No, No, I think it would be a tough sell.
31:32
Probably a long flight too. Uh. Tom Brady put his
31:35
watch collection up for sale at Sotheby's what.
31:38
Speaker 3: Is he running out of money?
31:39
Speaker 4: He's getting paid thirty seven million dollars a year to broadcast.
31:42
Speaker 2: You know, I am kind of wondering what the deal
31:45
is here on this in terms.
31:46
Speaker 5: Of still getting FTX right, like trying to get back
31:50
those fun recoup the shares.
31:51
Speaker 2: Yeah, but so they're they're they've they're hosting what's called
31:55
the Goat Collection, watches and treasures from Tom Brady and
31:59
the Watchers anywhere between twelve thousand and eight hundred thousand dollars.
32:04
So yeah, if you've got eight hundred thousand dollars floating
32:07
around to spend on a watch, then you know you
32:09
could potentially own one of Tom Brady's. They're also selling
32:13
the shirt that he wore to the NFL Combine, his
32:16
final college game, jersey from Michigan, a buccaneer's game used helmet,
32:23
and you know he's selling this obviously. You know, I
32:26
won't excite to give fans and collectors a chance to
32:28
own and cherish these special pieces from my journey. And
32:34
I'm just kind of wondering why. I mean, I don't
32:38
think he's broke again. As you noted, he's making plenty
32:41
of money with his Fox contract these days.
32:44
Speaker 4: The divorce, he's diversing someone who is probably wealthier than
32:47
he was, not probably definitely, so that's not a concern necessarily.
32:54
Speaker 2: I don't think I can't even pronounce most of these
32:57
watches because they have French names. So you know, I.
33:01
Speaker 4: Paddock, Philip, Adumarsa, look at you, Look at you old
33:06
French Paul.
33:06
Speaker 2: There you go. I own several Paul can tell us
33:10
about French watches, but not the price of garlic. I
33:12
think that's indicative of, you know, just where we are
33:15
these days. But yeah, so look, Brady's selling all this stuff.
33:19
I don't think it's because he's broke, but you kind
33:21
of look at and you go, well, what are you
33:23
doing if if you just wanted Brady's wealthy enough that
33:28
if you just wanted fans to have it, just find like,
33:32
you know, have something, Hey post you know, an Instagram thing. Hey,
33:37
write me your story about why you want my you know,
33:40
combine Jersey and what it means to you, and I'll
33:42
give it away to the you know, the person with
33:44
the best answer.
33:46
Speaker 4: I don't want to be this guy, but it seems
33:48
like this should be much more of a charity sort
33:50
of endeavor, you know, like.
33:52
Speaker 3: He has so much money and.
33:55
Speaker 4: To really continue to squeeze the lemon juice or orangeuice whatever.
33:59
Now do you want to use out of your brand
34:00
name just to sell your watches to me, seems a
34:04
little unnecessary and way you're getting paid as much money
34:07
as he does.
34:07
Speaker 2: Yeah, the charity thing would make sense. I know he
34:09
used to do a ton with best buddies in the area.
34:13
It would be an easy way to be like, hey,
34:14
we're trying to, you know, raise as much as possible
34:17
for you know, charity X, Y or z. Maybe that
34:21
is happening here and this piece just doesn't disclose it.
34:25
Speaker 4: But I'm not against you know, people get out there
34:28
and making money.
34:29
Speaker 3: It's just like of all.
34:30
Speaker 2: People, Tom, you don't need to sell your watches. It's
34:34
you know, what's what's what's what's going on here? I
34:36
think is the question. Taking a quick look at markets,
34:40
still a little bit of slight upward drift today after
34:42
yesterday's sharp downward move. The DAMS up ninety points, the
34:46
S and p's up six, the NASDAC up forty one,
34:49
so anywhere from a tenth to a quarter percent we're
34:51
seeing floating upward in US equity markets right now. Tenure
34:56
Treasury is up four point five basis points to three
34:58
point seven eight eight percent, and we've got Oil West
35:02
Texas Intermedia pairing its games from earlier in the day,
35:06
now up just forty cents a barrel to seventy twenty
35:09
three despite continued concerns about escalation in the Middle East.
35:14
Gold also dropping today, down eighteen sixty and ounce to
35:19
twenty six seventy one and seventy cents. So overall, kind
35:24
of a quiet day after again a big move to
35:27
start the week off. Tomorrow, we do have some additional
35:30
economic data coming out. We get ism services data at
35:33
ten along with jobless claims data at eight thirty am,
35:38
so those are the two things that we'll be looking
35:40
at this all in preparation for the job support for September,
35:44
which is at Friday at eight thirty as well. So
35:46
we got two busy days to finish up the week.
35:49
Have a great rest of the day today, We'll see
35:52
you tomorrow.