Latest / Brian Thomas / Money Monday with Brian James

Transcript

Money Monday with Brian James · Brian Thomas

0:00
Speaker 1: Not to follow in illegal order. Yeah, they know Clay
0:03
Speaker 1: and Buck Today at noon point fifty five KRC the
0:07
Speaker 1: talk station A six If if you have KRC the
0:14
Speaker 1: talk station, stay home, says everybody. It's a bat out there.
0:20
Speaker 1: So there's no reason to be on the road unless
0:21
Speaker 1: there's a really important reason to be on the road.
0:24
Speaker 1: Just please stay off if at all possible. Someone who's
0:27
Speaker 1: on the phone, and I guess the markets are open
0:29
Speaker 1: even though we got Snowmageddon going on. Welcome back from
0:31
Speaker 1: all Worth Financial Brian James for another edition of Money Monday.
0:34
Speaker 1: It's always great having you on my program. Brian.
0:36
Speaker 2: Welcome, It's always great being here. Appreciate it. Yeah, the
0:39
Speaker 2: market's open. Doesn't usually close for snow.
0:42
Speaker 1: Has it ever closed for weather?
0:44
Speaker 2: Not that I can recall. Maybe I'm trying to think
0:46
Speaker 2: of a hurricane Sandy shut it down. I can't remember
0:50
Speaker 2: nine to eleven that was a big thing. I do
0:51
Speaker 2: remember kind of wondering that week what was going on,
0:53
Speaker 2: But I don't I don't recall any weather closures in
0:55
Speaker 2: my twenty nine years doing this.
0:57
Speaker 1: Fair enough and off to the race's guard. What the impacts?
1:00
Speaker 1: I mean, I'm looking at the market this morning. So
1:03
Speaker 1: the whole shooting in Minneapolis apparently no impact on Wall Street.
1:08
Speaker 1: Futures are about flat and just a little tiny down
1:12
Speaker 1: for the S and P five hundred, like point zero seven,
1:15
Speaker 1: he says, I'm staring at it now right now, Dow
1:17
Speaker 1: up point zero one, so zero impact. What does it
1:21
Speaker 1: take to really impact the market these days? I mean,
1:23
Speaker 1: the whole idea of Trump taking over Greenland didn't seem
1:25
Speaker 1: to really do anything. He announced one hundred percent tariffs
1:28
Speaker 1: on Canada the other day, I mean that hasn't registered apparently,
1:32
Speaker 1: and Davos and his energy policy and his standing in
1:35
Speaker 1: defiance to the world leaders, that apparently had no ripple effect. Like, so,
1:39
Speaker 1: I'm wondering what it takes to actually impact the market.
1:43
Speaker 2: Brian, Generally, I would I would point out the tariffs,
1:47
Speaker 2: because no, the Canadian tariff threat over because that that's
1:50
Speaker 2: not real yet. Right over the weekend, that didn't have
1:52
Speaker 2: an impact. However, a week and a half ago or so,
1:54
Speaker 2: we did have a tariff threat and that did take
1:57
Speaker 2: the markets down for a day, right we put it
2:00
Speaker 2: right back. And then you go back to April when
2:02
Speaker 2: this round of tariffing really really kicked in and the
2:05
Speaker 2: market went down almost twenty percent, so the tariffs do so,
2:08
Speaker 2: I would say it is it's when the news results
2:11
Speaker 2: in a calculable impact of profits. There's an awful lot
2:15
Speaker 2: going on out there that I hate to boil it
2:18
Speaker 2: down to just are we making money or not. There's
2:19
Speaker 2: so much going on out there, and we're just not
2:21
Speaker 2: in a great spot on a lot of levels at
2:23
Speaker 2: the moment. But to answer the question specifically, if you
2:26
Speaker 2: can't calculate the impact on dollars flowing in and out,
2:29
Speaker 2: then it's probably not going to have an immediate impact
2:32
Speaker 2: on the market's overall. All.
2:33
Speaker 1: Right, Well, currently penning before the Supreme Court, and it
2:35
Speaker 1: doesn't look like we're going to get a respond or
2:37
Speaker 1: an answer very quickly. It's given that they're I guess
2:40
Speaker 1: they're on a four week recess or something thereabouts. Right now,
2:43
Speaker 1: the Supreme Court's going to rule on Trump's terriff actions,
2:46
Speaker 1: and most observers of things Supreme Court are suggesting that
2:51
Speaker 1: they may very well override his unilateral actions on tariffs.
2:55
Speaker 1: I guess it would be complicated unwinding what's been done
3:00
Speaker 1: so far, because say what you want about tariffs, he
3:02
Speaker 1: was able to negotiate some pretty decent agreements with some
3:05
Speaker 1: foreign nations because of the tariffs. Will all of that
3:09
Speaker 1: be undone? Will the promised investments from so many countries
3:13
Speaker 1: and the trillions of dollars that apparently have been committed,
3:16
Speaker 1: will that be Will the plug be pulled on that?
3:19
Speaker 1: And that seems to me that would have a profound
3:21
Speaker 1: impact on the market.
3:23
Speaker 2: Well yeah, because again to my earlier point, that would
3:26
Speaker 2: involve I mean, if we're gonna unwind these tariffs, well,
3:28
Speaker 2: guess what the people who paid them have to have
3:30
Speaker 2: to go back. Now. Now, what I'm what I'm really
3:32
Speaker 2: curious about is how are we going to unwind this
3:34
Speaker 2: without If we have to do this right, We're not
3:36
Speaker 2: in nowhere near to do with the the the way
3:39
Speaker 2: you kick this off, the Supreme Court punted, it's probably
3:41
Speaker 2: gonna be February before they talk about it again. So
3:43
Speaker 2: it's not sew any panic right now. But at the
3:46
Speaker 2: end of the day, if it does need to be unwound,
3:48
Speaker 2: well then I supposedly we would be writing checks back
3:51
Speaker 2: to the countries that paid these tariffs, and I cannot
3:54
Speaker 2: imagine there's not going to be a big hue and
3:55
Speaker 2: cry from from consumers here in the United States saying, hey,
3:58
Speaker 2: prices went up immediately after these tariffs went in place
4:01
Speaker 2: on a lot of different things. So these countries didn't
4:03
Speaker 2: pay it, We're going to be writing them checks for
4:04
Speaker 2: absolutely no reason, which would literally be the opposite of
4:07
Speaker 2: the intent of the tariffs.
4:09
Speaker 1: Well, I guess you know that raises another question which
4:12
Speaker 1: I haven't really been quite able to figure out. Brian James,
4:14
Speaker 1: maybe you can answer it. Where did all this tariff
4:17
Speaker 1: money go? It clearly had not gone to pay down
4:19
Speaker 1: the national debt, which is still rising as we speak.
4:23
Speaker 2: I can't remember the last administration that really cared about
4:27
Speaker 2: the national debt and barely even mentioned it, you know,
4:29
Speaker 2: in the campaign periods too. So it goes into the
4:33
Speaker 2: general fund, and this is something I've looked up before
4:35
Speaker 2: the decision, is that it goes into the general fund,
4:37
Speaker 2: which is sort of means that it kind of supports
4:40
Speaker 2: everything we do, but it also sort of means that
4:42
Speaker 2: it's not assigned to anything. To your point, and we've
4:44
Speaker 2: done an awful lot of things to spend money that
4:46
Speaker 2: really has nothing to do with, you know, with propping
4:49
Speaker 2: up the American economy or paying down the debt or
4:52
Speaker 2: anything like that there's a lot of money being spent
4:54
Speaker 2: on things that really aren't related to the intent of
4:59
Speaker 2: the tariff the way it was kind of laid out.
5:01
Speaker 2: So the Supreme Court is debating whether the president has
5:05
Speaker 2: the power to do this in the first place. There
5:07
Speaker 2: are decisions in the past. There's one from eighteen ninety
5:09
Speaker 2: two that holds that Congress, not the president alone, is
5:12
Speaker 2: the only one that can delegate tariff authority. So that's
5:14
Speaker 2: what the Supreme Court is looking at. Presidents could administer
5:18
Speaker 2: tariffs under laws like the McKinley Tariff, and that was
5:21
Speaker 2: There's also the smoot Hally Area, right, this is oh,
5:24
Speaker 2: we have to remind everybody that they did see Ferris
5:26
Speaker 2: Bueller's Day Off once and that's all we know about
5:28
Speaker 2: the Smooth Holly Area era. But in those tariffs did
5:32
Speaker 2: worse than the Great Depression, and so rules were put
5:34
Speaker 2: in place that says that would say that you can't
5:37
Speaker 2: do this this easily. Well, that's exactly what we've done
5:39
Speaker 2: over the past twelve months. That's what the Supreme Court
5:41
Speaker 2: is debating. I have a feeling the history, the history
5:45
Speaker 2: and the precedents are fairly clear to the Supreme Court,
5:48
Speaker 2: who relies a lot on two and andre and fifty
5:50
Speaker 2: years worth of presidence. Oh yeah, but they're probably worried
5:52
Speaker 2: about the impact of undoing it if they're going to
5:54
Speaker 2: try to follow those presents.
5:56
Speaker 1: Oh absolutely, that's I think it's at the heart of
5:58
Speaker 1: the heart of the matter. And can you address, if possible,
6:04
Speaker 1: on a fly? What's the story? And thank you Maureen
6:06
Speaker 1: for reminding me of this is a great time to
6:08
Speaker 1: ask money Monday's Brian James, what's the story with gold
6:11
Speaker 1: and silver? I mean, we're looking at north of five
6:13
Speaker 1: thousand dollars gold and north of basic one hundred and
6:17
Speaker 1: ten dollars an ounce silver. We haven't seen prices like
6:20
Speaker 1: this ever.
6:21
Speaker 2: That's true, well, those types of assets, those speculative types
6:25
Speaker 2: of commodities, right, because a commodity is just something that
6:28
Speaker 2: is worth what the crowd says it is. That doesn't
6:30
Speaker 2: mean it's a good or bad investment. But there's nothing
6:32
Speaker 2: else driving it. It's just the crowd, the auction crowd,
6:35
Speaker 2: wanting to buy more and wanting to sell one. That's
6:37
Speaker 2: the only thing drives these prices. But you can't look
6:40
Speaker 2: at gold and say, well, there's industrial demand for it.
6:43
Speaker 2: All of a sudden they're putting it in cell phones
6:45
Speaker 2: or anything like that, or silver or anything like that.
6:47
Speaker 2: It's just the flight of money to save spaces. And
6:50
Speaker 2: whenever there is there is concern about all these types
6:54
Speaker 2: of things, that's where you'll see it happen. And so, yes,
6:56
Speaker 2: gold has just surged past five thousand bucks, got to
6:59
Speaker 2: about fifty one hundred, and that's been going on for
7:01
Speaker 2: a while now. Silver is above one hundred dollars an ounce.
7:04
Speaker 2: That's also a record. And the thing is, though, there
7:08
Speaker 2: is a limited amount of people who are willing to
7:10
Speaker 2: adjust their portfolios to this extreme, and there's a limited
7:13
Speaker 2: amount of time that they're going to be willing to
7:15
Speaker 2: do it. So it's like a flock of birds. You
7:17
Speaker 2: can't look at earnings reports. You can't look at you know,
7:20
Speaker 2: gold's forecast of what they think is coming, you know,
7:23
Speaker 2: the next quarter, because there is none. It's worth nothing
7:25
Speaker 2: more than what people say it is. And the herd
7:28
Speaker 2: is going to stampede the other direction at some point.
7:30
Speaker 2: So you know, there's nothing wrong with owning these types
7:32
Speaker 2: of things, but be reasonable about it. Don't throw everything
7:35
Speaker 2: at it just because the headlines are scary. There is
7:37
Speaker 2: ample evidence over the past several decades of the time,
7:41
Speaker 2: that is not a good idea to buy gold, and
7:43
Speaker 2: that's when it makes a new high.
7:44
Speaker 1: Well, and apparently you anticipated my next question. I was
7:47
Speaker 1: going to ask you, are there any historic parallels with
7:50
Speaker 1: the current spike we're seeing. I realize we've never seen
7:54
Speaker 1: five thousand dollars plus goal, but have we ever seen
7:57
Speaker 1: a jump and a spike like this over a period
7:59
Speaker 1: of time. I'm only to fall back to what you
8:02
Speaker 1: and I might consider normal or you know, back to normal. Uh.
8:06
Speaker 2: Yeah, So there. Gold is usually consistently known as a
8:10
Speaker 2: store of value whenever there's confidence in governments, you know, currencies,
8:13
Speaker 2: those kinds of things, and it tends to perform best
8:15
Speaker 2: when we've got high inflation, geopolitical conflict, financial system stress,
8:19
Speaker 2: you know, loss of trust, and monetary fiscal policy, those
8:22
Speaker 2: kinds of things. Well, guess what, that's what we have happened, right, yeah,
8:25
Speaker 2: precisely what's going on? So some histories of this. So
8:29
Speaker 2: in nineteen seventies we had inflation and policy chaos. This
8:32
Speaker 2: was remember that the US abandoned the gold standard in
8:35
Speaker 2: nineteen seventy one, So talk about question that drove inflation
8:39
Speaker 2: and gold went from thirty five bucks an ounce to
8:41
Speaker 2: over eight hundred by nineteen eighty and in the eighties
8:44
Speaker 2: of the nineties it was weak. We had falling inflation.
8:47
Speaker 2: This was the birth of the stock market as we
8:49
Speaker 2: know it today, right, This was the first couple decades
8:51
Speaker 2: where really nothing bad happened. Nineteen eighty seven no longer
8:54
Speaker 2: counts Black Monday or whatever we called it. Then that's
8:56
Speaker 2: just you can't even find that in a chart anymore.
8:58
Speaker 2: But that was a period where gold was got weak
9:00
Speaker 2: because investors looked toward other things. So if you believe
9:04
Speaker 2: in what this administration is doing, if you believe in
9:07
Speaker 2: these business deals that are being put in place, and
9:09
Speaker 2: in the notion that a good business supporting administration is
9:14
Speaker 2: good for the stock market, then don't fall asleep on
9:16
Speaker 2: those types of investments just because in the shorter term
9:20
Speaker 2: gold is getting a lot of attention.
9:22
Speaker 1: We will continue with Brian James on this Money Monday.
9:24
Speaker 1: Find out about interest rates. The Fed gonna pause the
9:27
Speaker 1: lowering of interest rates, They're gonna raise them, They're gonna
9:30
Speaker 1: remain static. Is Donald Trump gonna get his way?
9:32
Speaker 2: More?
9:33
Speaker 1: With Brian James stick around you right.
9:34
Speaker 2: Back in the morning, we have Breaking News.
9:38
Speaker 1: Eight eighteen, if you do have KROCD talk station, very
9:41
Speaker 1: Happy Monday Tea doing that money Monday thing or financials
9:44
Speaker 1: Brian James, who will strongly urge you to get a
9:47
Speaker 1: financial planner sitting on the same side of the table
9:49
Speaker 1: as you, someone who's charging a fee based upon your
9:52
Speaker 1: account and its value. That encouraged them to increase the
9:55
Speaker 1: value of that, which is a fiduciary obligation a financial
9:57
Speaker 1: planner should have to you, James.
10:01
Speaker 2: Yeah, pretty much. I think that's a pretty close assessment
10:04
Speaker 2: of what it is. Really, what it means is I
10:06
Speaker 2: got to understand what you need and so I can
10:08
Speaker 2: justify what I do with your portfolio.
10:10
Speaker 1: Well, it's worked out well for the Thomas family over
10:12
Speaker 1: the years, So I strongly encourage someone to do the
10:14
Speaker 1: exact same thing because I don't want to have to
10:16
Speaker 1: pay attention to it and interest rate we do. Yeah,
10:19
Speaker 1: I know that's your job. I mean I don't have
10:21
Speaker 1: to deal with it interest rates obviously. You know, Donald
10:25
Speaker 1: Trump in a war with the Fed. He wants the
10:26
Speaker 1: interest rates low. This reminds me of the Carter administration
10:29
Speaker 1: when we had stagflation and he bickered back and forth
10:33
Speaker 1: with the pet FED chairman. He was on his knees.
10:35
Speaker 1: Carter was begging him to lower the interest rates, which
10:37
Speaker 1: were in the double digits back then, to no effect
10:41
Speaker 1: because of the you know, the the inflation realities and
10:45
Speaker 1: the employment reality Stagflation, I guess required high interest rates
10:48
Speaker 1: to keep things in check. But fast forward to now
10:51
Speaker 1: Donald Trump's looking at thirty three point five to three
10:53
Speaker 1: point seventy five interest rate currently. But once I'm even lower,
10:57
Speaker 1: what's the Fed going to actually do? They don't have
10:59
Speaker 1: any oblo gation to listen to any president what he
11:02
Speaker 1: or she desires, right.
11:04
Speaker 2: They don't, except for you know, part of me feels
11:06
Speaker 2: like Brian that there's there's this sort of weird, lame
11:08
Speaker 2: duck period we've got with this FED chair because he
11:10
Speaker 2: may he may hang around for the rest of his term,
11:13
Speaker 2: he may not, depending on whatever the Trump administration can accomplish.
11:17
Speaker 2: They would very much like him gone, even though Trump
11:20
Speaker 2: is the one who kept him in during that whole transition. So,
11:23
Speaker 2: you know, I feel like there's gonna be there's not
11:26
Speaker 2: a whole lot of news coming out of this one
11:28
Speaker 2: that the general consensus is that there's nothing coming out
11:30
Speaker 2: of this upcoming meeting, simply because there's there's a there's
11:34
Speaker 2: more descent among the Fed Committee than than anything else
11:38
Speaker 2: right now, there's there was in the last meeting there
11:40
Speaker 2: were two members who wanted no change, one was looking
11:43
Speaker 2: for a half percent reduction, but anyway, a lot of
11:46
Speaker 2: descents against another quarter point cut. So I think the
11:49
Speaker 2: markets are gonna be paying much more attention to whether
11:52
Speaker 2: Chair Powell is able to unite the committee as opposed
11:55
Speaker 2: to actual rate changes. There's not really much change anticipated
11:59
Speaker 2: for this one.
11:59
Speaker 1: Well, doesn't that just sort of stay out loud that
12:02
Speaker 1: this whole thing is alchemy. If you got all these
12:05
Speaker 1: brilliant you know, FED chairs sitting in different parts of
12:08
Speaker 1: the country and all coming up with different conclusions on
12:11
Speaker 1: whether we think keep things status qull raise them or
12:13
Speaker 1: lower them. They're all looking at the same data. How
12:15
Speaker 1: do you come up with a different conclusion on that
12:17
Speaker 1: unless there's different, you know, sort of economic methodologies to
12:21
Speaker 1: look at it. Do we have a bunch of Keensians
12:23
Speaker 1: out there mixed with a bunch of I don't know,
12:26
Speaker 1: Chicago Schoolsians, Malethusians, Australian economy schools, or you know, Chicago
12:33
Speaker 1: School of economics, Milton Friedman stuff. I mean, what is
12:35
Speaker 1: the reality of that.
12:36
Speaker 2: We just lost a third of our listeners. I think
12:38
Speaker 2: I'm sorry now Now, of course, there are there are
12:43
Speaker 2: different ways of thinking about this, and that's why we
12:45
Speaker 2: have a chair. That's why, you know, that's why there
12:47
Speaker 2: isn't a you know, a group think type decision. It's
12:49
Speaker 2: the chair who makes the ultimate decision, you know, And
12:52
Speaker 2: so that's the person who is sitting in that seat,
12:54
Speaker 2: and that's the person Trump doesn't agree with. His his
12:57
Speaker 2: background is a little bit different. Trump is a no
13:01
Speaker 2: holds barred, all profits at all cost type of a leader,
13:04
Speaker 2: and that's every decision that he makes. So he wants
13:06
Speaker 2: the rates down yesterday. He wanted them down during the
13:08
Speaker 2: campaign two years ago. So I think that part is
13:12
Speaker 2: pretty clear. And that's that's why there is the battle
13:15
Speaker 2: against between the White House and the Fed chair, simply
13:18
Speaker 2: because he's not acting the way that we feel would
13:22
Speaker 2: the way the administration feels would be the most friendly
13:24
Speaker 2: toward business and the quickest manner possible. You mentioned you
13:28
Speaker 2: mentioned the Carter administration, and this is a little bit
13:31
Speaker 2: similar to the Nixon administration too. Part of the reason
13:34
Speaker 2: that we had stagflation was Nixon badgering the FED chair
13:38
Speaker 2: at the time to lower interest rates because there was
13:40
Speaker 2: an election coming up and he wanted to goose the economy,
13:43
Speaker 2: and so that happened. By the time the impacts of
13:45
Speaker 2: that were felt, that was the roots of stagflation. Then
13:49
Speaker 2: Nixon was out of office and we had a period
13:52
Speaker 2: of that long period where we had inflation but no
13:56
Speaker 2: economic growth, no really identifiable economic grow because usually at
13:59
Speaker 2: leads comes along with accelerated activity, which trickles through the economy.
14:03
Speaker 2: Prices are getting higher, but people are making more money,
14:05
Speaker 2: and no, it's not keeping up, but there's still there's
14:08
Speaker 2: still growth there. That is not what happened in the seventies.
14:10
Speaker 2: We got the inflation with none of the good stuff
14:13
Speaker 2: out of it either.
14:13
Speaker 1: Good point, well, and you met another good point you
14:15
Speaker 1: made there in brief in passing about the interest rates.
14:18
Speaker 1: It lowers businesses borrowing costs because they too borrow money.
14:23
Speaker 1: Now that's something that isn't I would argue, at least
14:27
Speaker 1: across the board generally speaking, a problem with supplying demand.
14:31
Speaker 1: Most of my audience, I imagine once the interest rate's lower,
14:34
Speaker 1: because they've got young people that would like to buy
14:36
Speaker 1: a house, or they would like to buy a house themselves,
14:37
Speaker 1: or they bought one with a higher interest rate and
14:39
Speaker 1: want to refinance down to something else. You can refinance
14:42
Speaker 1: what you got, But this is not A lower interest
14:45
Speaker 1: rate is not going to change the housing problem, is it.
14:47
Speaker 1: It's just going to make it seems to me. It
14:49
Speaker 1: will only increase demand on on a housing supply that
14:52
Speaker 1: is limited already.
14:53
Speaker 2: Exactly, there's a lot of people out there who could
14:55
Speaker 2: These are conversations I have in my office. Yeah, who
14:58
Speaker 2: want to buy, need to buy, but are just you know,
15:01
Speaker 2: but they can hold off. So they're waiting for lower
15:03
Speaker 2: interest rates on those mortgages and so there, Yeah, there
15:05
Speaker 2: is a there's pent up demand out there that's going
15:07
Speaker 2: to prop up a housing priceis and that will go
15:09
Speaker 2: directly in the face of some of the things that
15:11
Speaker 2: the President has thrown out there that he would like
15:13
Speaker 2: to fix. Remember, we wasn't that long ago we talked
15:15
Speaker 2: about fifty year mortgages and maybe bonuses for first time
15:18
Speaker 2: home buyers, those kinds of things. None of that reacts
15:21
Speaker 2: to the idea that that houses are way more expensive
15:23
Speaker 2: now for people at that stage of life than they
15:26
Speaker 2: were over the past decade and then maybe there's not
15:28
Speaker 2: much you can do about that. But all that's gonna
15:30
Speaker 2: do is goose demand and push prices up.
15:33
Speaker 1: Yes, now, sort of a boiled down question. I don't
15:36
Speaker 1: know whether you can answer it real quickly or not,
15:38
Speaker 1: but got to ask it as a financial planner, when
15:41
Speaker 1: you're having these conversations with individuals, is it still a
15:44
Speaker 1: good idea to buy house?
15:46
Speaker 2: I think once you know for darn certain that you're
15:49
Speaker 2: where you're gonna be, you're ready to put roots down,
15:51
Speaker 2: you know your your your jobs are secure, you know
15:54
Speaker 2: those kinds of things, then I think it makes sense.
15:56
Speaker 2: Because if you're gonna, if you're gonna subscribe to the
15:58
Speaker 2: idea that all they need to do is rent and
16:00
Speaker 2: so it'll be somebody else's problem and it's too expensive anyway. Well,
16:03
Speaker 2: now you are completely beholden to whatever the rental landscape is,
16:08
Speaker 2: and you'd you'll be paying as much or more over
16:10
Speaker 2: the decades with those annual increases than you would if
16:13
Speaker 2: you had to deal with mowing your lawn and fixing
16:15
Speaker 2: your own home, you know, hot water heater and all
16:17
Speaker 2: that shovel the driveway, show them, Yeah exactly, you know.
16:20
Speaker 2: Then I got another one, another round of that coming
16:22
Speaker 2: up today. So if over the longer term, if you
16:25
Speaker 2: feel like, yes, I know where I want to be,
16:26
Speaker 2: this is the neighborhood, this is the you know, these
16:28
Speaker 2: are where our jobs are, then I think buying a
16:30
Speaker 2: home is a good idea. Buying a home for the
16:32
Speaker 2: decades old notion that it's the best investment you'll ever know. No,
16:35
Speaker 2: it's the worst investment you'll ever own.
16:37
Speaker 1: But you gotta have one, Yeah, gotta have a place
16:39
Speaker 1: to live, and it's nice at the end of the day,
16:41
Speaker 1: whenever that day is, at least you got some equity
16:44
Speaker 1: to show for it. You may have been break even
16:46
Speaker 1: all along. You bought the house, you put all kinds
16:48
Speaker 1: of money and effort into it, you sell it. Maybe
16:51
Speaker 1: it's a wash, but at least a wash is better
16:53
Speaker 1: than just a hole you dug with yourself for rent
16:56
Speaker 1: over those years.
16:56
Speaker 2: Couldn't agree more. You don't. You don't necessarily that starter
16:59
Speaker 2: home concept I think has changed a little bit. It's
17:01
Speaker 2: all right, you're gonna get into your late twenties even
17:03
Speaker 2: early thirties before you figure out exactly the spot. That
17:06
Speaker 2: is not a bad thing.
17:07
Speaker 1: All right. One more with Brian James got a question
17:10
Speaker 1: for him, what is this deal with the ten percent
17:12
Speaker 1: cap on credit cards? And also, speaking of housing, Trump
17:15
Speaker 1: endeavoring to prevent commercial acquisition of housing private housing for
17:20
Speaker 1: the purpose of rentals, and that seems to only sort
17:22
Speaker 1: of exacerbate what we were just talking about. But that's
17:25
Speaker 1: what we have. Brian James for one more with Brian James,
17:27
Speaker 1: Stick Around Freedom Hey, twenty nine fifty five KRCD Talk Station,
17:32
Speaker 1: Happy Monday, doing Money Buck Monday with Brian James. Brian James,
17:36
Speaker 1: this one's got me a little bit torn. I am.
17:40
Speaker 1: I regularly describe myself as a little l libertary, in
17:43
Speaker 1: other words, not a capital little party libertarian. Just I
17:45
Speaker 1: believe in free markets. I don't believe in government intervention
17:48
Speaker 1: with markets or the way we run our businesses. I
17:50
Speaker 1: think businesses can decide on their own. So it struck
17:53
Speaker 1: me as rather odd because I always kind of thought
17:55
Speaker 1: Trump might have been that kind of guy, but then
17:58
Speaker 1: he would come out and embrace something that's sound like
18:00
Speaker 1: it is a Democrat platform position, which is capping the
18:04
Speaker 1: credit card company's interest rate charge. Now I think we
18:08
Speaker 1: can all agree thirty percent sounds userrous. That's outrageous. But
18:14
Speaker 1: is there a reason that the interest rate might be
18:17
Speaker 1: twenty or thirty percent? And I think the answer is
18:19
Speaker 1: probably yeah, because the credit card companies have to eat fraud,
18:23
Speaker 1: wasted abuse. I mean, our individual liability is capped at
18:26
Speaker 1: fifty bucks. If someone steals our card, uses our number
18:30
Speaker 1: or whatever, we let the credit card company know. They
18:32
Speaker 1: go and try to unring that bell. But we don't
18:34
Speaker 1: have to pay more out of pocket than fifty bucks.
18:36
Speaker 1: Somebody's got to eat it. That's the credit card company, right,
18:39
Speaker 1: Is that one of the reasons.
18:40
Speaker 2: Yeah, And I would say that fifty bucks is rarely
18:42
Speaker 2: even applied to most of the time. They just eat it. Yeah,
18:45
Speaker 2: So yeah, there's a reason for that. I don't know.
18:49
Speaker 2: I think a little differently about this. I feel like
18:52
Speaker 2: over the decades, the pendulum swings back and forth because
18:54
Speaker 2: if businesses are allowed to operate unbridled and completely unregulated,
18:58
Speaker 2: well they're going to look under absolutely every stone for
19:00
Speaker 2: profit and they will get to a point, you know.
19:03
Speaker 2: That's why that's currently the current structure. Is why your
19:06
Speaker 2: mailbox is full of credit card applications every single day,
19:09
Speaker 2: every other day from the exact same company, because they're
19:12
Speaker 2: simply looking for people to take out more debt, and
19:14
Speaker 2: they're just hoping that you go one day, one minute
19:17
Speaker 2: beyond that zero percent balance transfer period, because that's when
19:21
Speaker 2: you start to pay that twenty seven to twenty eight
19:22
Speaker 2: percent all the way back to day one. So you know,
19:25
Speaker 2: the rest of us who are on top of things
19:27
Speaker 2: are benefiting from the fact that credit card companies are
19:30
Speaker 2: making money off of people who just aren't as on
19:32
Speaker 2: top and are letting those things get out of control.
19:34
Speaker 2: So on one go, I go both ways with it.
19:37
Speaker 2: I mean, it's wonderful to have these rewards, and it's
19:39
Speaker 2: great to play the credit card game, and I do
19:40
Speaker 2: it myself. I don't pay any interest. But at the
19:43
Speaker 2: same time, I know that I'm not the one that
19:44
Speaker 2: they're making a ton of money off of. It's the
19:46
Speaker 2: people who forget and the people who just rely on
19:48
Speaker 2: that to pay their bills. And that's societally, that is
19:51
Speaker 2: not a great thing. That's not going to lead us
19:53
Speaker 2: to a great conclusion. But at the same time, it's
19:56
Speaker 2: all about supply demand. If the demand is yeah, sure,
19:58
Speaker 2: I want to have a bunch of debt and willing
20:00
Speaker 2: to blindly pay thirty percent, then so be it. That's
20:03
Speaker 2: kind of the situation that we're currently in. As to
20:05
Speaker 2: why Trump is pushing this now, my best guess is
20:08
Speaker 2: it's a way to get the attention of a lot
20:10
Speaker 2: of people who who would have painted him a certain way.
20:13
Speaker 2: You're right, this is this is you know, maybe he's
20:15
Speaker 2: dipping into a crowd that he hasn't been able to.
20:17
Speaker 1: Reach before populist. Well, the other thing, the other component
20:21
Speaker 1: of this is if you cap the interest rate that
20:23
Speaker 1: the credit card companies can charge, the likelihood that those
20:27
Speaker 1: least likely to obtain credit will no longer be able
20:30
Speaker 1: to obtain credit increases dramatically. So to the extent he's
20:33
Speaker 1: trying to help, you know, folks that might need credit,
20:36
Speaker 1: he's not doing them any service if that actually, if
20:38
Speaker 1: this actually comes to fruition, right.
20:40
Speaker 2: Right, But that's not the headline. He's after the headline.
20:42
Speaker 1: No, No, well, come on, Brian, I know that.
20:46
Speaker 2: We're not worried about what happens six months a year later.
20:48
Speaker 2: That's that's unimportant at the time. And besides, then he
20:50
Speaker 2: can change the rules and then make the headline again.
20:52
Speaker 2: So but no, you're exactly right. If we're going to
20:54
Speaker 2: make it, if we're going to restrict the ability for
20:56
Speaker 2: these let me, let's face it, Brian, we are the
20:58
Speaker 2: United States of profit margin. That's it, that's all we
21:00
Speaker 2: care about. So if we're going to restrict the ability
21:02
Speaker 2: for credit card companies to make profit, they're going to
21:04
Speaker 2: restrict the expenses they have to lay out. That means
21:06
Speaker 2: goodbye rewards programs, goodbye to a lot of things that
21:09
Speaker 2: a lot of people benefit from, and those were already
21:11
Speaker 2: on the chopping block anyway for a lot of reasons.
21:13
Speaker 1: Yeah, fair enough, And it seems to me the more
21:15
Speaker 1: opportunities for credit from different sources, that's competition among the
21:19
Speaker 1: credit companies, which would necessarily suggest that they can make
21:23
Speaker 1: the choice to lower the interest rates in order to
21:25
Speaker 1: get more people on their card, as opposed to somebody else's.
21:28
Speaker 2: Oh sure, but there's no demand for that, because you know,
21:30
Speaker 2: if you're somebody who really you know, if you're really
21:33
Speaker 2: really paying attention, then you're not going to care that
21:35
Speaker 2: this one's only going to charge me up to twenty percent.
21:37
Speaker 2: You're not going to touch that one either. You're going
21:39
Speaker 2: to find a different way too, if you're willing to
21:41
Speaker 2: do the research. These things are not hard to avoid,
21:43
Speaker 2: but they're banking on the fact that no pun intended
21:46
Speaker 2: that that people are paid don't pay attention, and unfortunately,
21:49
Speaker 2: in a lot of cases, that's exactly what happens.
21:51
Speaker 1: All right, Well, I got to use this as an
21:53
Speaker 1: opportunity to complain about how your credit score is calculated.
21:56
Speaker 1: You know, I at one point had a perfect credit
22:00
Speaker 1: credit score, and I'm not bragging about this. I'm just
22:02
Speaker 1: using it as illustration and event my frustrations. The only
22:05
Speaker 1: reason it isn't is because I don't have enough credit
22:09
Speaker 1: cards open. That pisses me off, Brian James. I don't
22:12
Speaker 1: need more credit. I got enough with what I have.
22:15
Speaker 1: And yet if I'm looking at a credit score go
22:16
Speaker 1: out and get more credit. That's screwed up, man.
22:20
Speaker 2: Yeah, it is. It is, and it focuses on the
22:22
Speaker 2: wrong things.
22:23
Speaker 1: Right.
22:23
Speaker 2: So, you know, here's what's important with this. It's your
22:27
Speaker 2: payment history. This is for the fight O model. This
22:29
Speaker 2: is the most widely used one. There's a lot of
22:31
Speaker 2: different models out there. Your payment history. Don't screw up
22:33
Speaker 2: your payments. That's about thirty five percent of it. About
22:36
Speaker 2: thirty percent, so close to a third. And this is
22:38
Speaker 2: what you're talking about. Brian Thomas is the amounts owed
22:41
Speaker 2: versus your credit utilization. So what you might notice is
22:44
Speaker 2: that and I saw this, we bought so early in COVID.
22:47
Speaker 2: We were going to take the family trip, our Griswold
22:50
Speaker 2: family European vacation. COVID killed it. That turned into a
22:53
Speaker 2: hot tub. Opened a credit card with Watson's because they
22:56
Speaker 2: had a zero percent deal going on. My credit score
22:58
Speaker 2: went through the roof because I had more that my
23:01
Speaker 2: ceiling went up. I took out actual debt, I took
23:04
Speaker 2: the draw on it, we paid the nothing percent, and
23:06
Speaker 2: my credit score went up because of it. So yeah,
23:09
Speaker 2: that that what you're talking about about a third of
23:11
Speaker 2: your score is related to how much of your credit
23:13
Speaker 2: you use, Meaning you have to have credit, but then
23:15
Speaker 2: don't use too much of it so you can have
23:17
Speaker 2: the same amount of debt. But if you if you
23:19
Speaker 2: increase that limit by opening another card, your credit score,
23:22
Speaker 2: believe it or not, it's probably gonna go up.
23:24
Speaker 1: Well, they understand that I pay my bills on time,
23:27
Speaker 1: I never carry a balance forward, so I've got the
23:29
Speaker 1: seal amount of credit, and I will say I think
23:31
Speaker 1: it's adequate. Yeah, yeah, I even paid off I mean,
23:36
Speaker 1: what what why am I a bad guy for that.
23:38
Speaker 1: I I'm sorry. This just screams injustice.
23:42
Speaker 2: So what you should do go out and open another
23:44
Speaker 2: credit card? It'll bounce the other way. Play the game.
23:46
Speaker 1: I'm not playing the game, Bryan James. I'm not playing
23:48
Speaker 1: that game. But besides, I've taken your advice and device
23:52
Speaker 1: of so many other people who are prudent in matters
23:54
Speaker 1: financial and frozen my credit limits or my credit with
23:59
Speaker 1: TransUnion and all that, so no one can open credit
24:02
Speaker 1: in my name.
24:02
Speaker 2: Yeah, including you.
24:03
Speaker 1: That's right, including me.
24:04
Speaker 2: Yeah. These aren't bad things, those are good things. Here's
24:06
Speaker 2: the biggest thing. I would say, go through, clean up
24:09
Speaker 2: the old credit cards from the stores you never use
24:12
Speaker 2: or and those you can close. Don't even if you
24:14
Speaker 2: don't use it anymore, though, don't, don't. Don't close your
24:17
Speaker 2: your oldest credit line. Put something on it, put the
24:19
Speaker 2: ten dollars streaming account on it, and let it pay
24:21
Speaker 2: itself automatically. That is a big chunk of your score too.
24:25
Speaker 2: But also, you know, just make sure you've got enough
24:27
Speaker 2: credit access ability out there, and then that'll keep your
24:31
Speaker 2: score in a good place.
24:31
Speaker 1: Fair enough, and very briefly, since we're out of time,
24:33
Speaker 1: I just got to ask you this Donald Trump decree
24:37
Speaker 1: or populist gesture again seems inconsistent with free markets. But
24:41
Speaker 1: telling like the Black Rocks of the world that they
24:43
Speaker 1: can't hoover up houses and tournamental rental units. That isn't
24:47
Speaker 1: going to solve the housing problem by stopping that from happening,
24:50
Speaker 1: is it?
24:51
Speaker 2: Well? I mean, I think what he's trying to do
24:52
Speaker 2: is reduce to man and again, this could also just
24:54
Speaker 2: be headline generating. He's not pushing it that hard. He
24:57
Speaker 2: made a few comments about it, and there was an
24:59
Speaker 2: executive order out there, but I haven't heard that any
25:02
Speaker 2: of these major financing companies are going under because of it.
25:06
Speaker 2: There was restricting activities to it to enable large institutional
25:09
Speaker 2: investors from purchasing single family homes framed as prioritizing families,
25:14
Speaker 2: but not Wall Street. So we'll see if this really
25:17
Speaker 2: truly has an impact. But I have a feeling right
25:19
Speaker 2: now it's just window dressing.
25:20
Speaker 1: Brian James, thank you all with Financial, your employer, for
25:23
Speaker 1: louning out every Monday. I appreciate the segment, the opportunity
25:25
Speaker 1: to speak with you about matters money. We'll do it
25:26
Speaker 1: again next Monday, and good luck shoveling that driveway. Hopefully
25:29
Speaker 1: you don't have to do it again for a while.
25:31
Speaker 1: And stay warm, Brian James.
25:33
Speaker 2: Yep, I'm gonna head out and get that final three
25:34
Speaker 2: inches off the driveway. Stay warm as well.
25:36
Speaker 1: There you go, Is that what she said? Joe A
25:39
Speaker 1: thirty eight fifty five krs The Talks to