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Who will replace Jerome Powell at the Federal Reserve? · The Financial Exchange Show

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Speaker 1: a donation today. This is the Financial Exchange with Chuck
1:05
Speaker 1: Zada and Paul.
1:06
Speaker 2: Lane, Chuck, Paul and Tucker with you, and stock staging
1:13
Speaker 2: a modest continuation of really the strength that they've seen
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Speaker 2: for the last six weeks. Here now downs up one
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Speaker 2: hundred and seventy nine points, SMP up eighteen, Nasdaq ups
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Speaker 2: seventy seven, So about a third to a point four
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Speaker 2: percent gain happening across your major US indicaes. And I
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Speaker 2: gotta tell you this has basically been the story since
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Speaker 2: late April. I mean, if you want to go and
1:42
Speaker 2: look at it. Actually, and I'm just gonna count this
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Speaker 2: right now, just because I'm kind of curious. Since April
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Speaker 2: twenty first, which is it was the Monday before the
1:53
Speaker 2: news got out about Scott Besson talking to I think
1:56
Speaker 2: it was like a JP Morgan conference about hey, you know,
1:59
Speaker 2: tear freight too high, They're gonna have to come down
2:01
Speaker 2: with China, like we can't do this forever. Since then,
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Speaker 2: let's see, we are going back. It looks like about
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Speaker 2: thirty five trading days, okay, we've had one, two, three, four,
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Speaker 2: or five, six, seven, eight nine that have been negative.
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Speaker 2: Now normally day like day in day out, it's about
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Speaker 2: a fifty to fifty toss up. I think it's like
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Speaker 2: fifty one percent of trading days are positive and like
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Speaker 2: forty nine are negative. But it's basically a toss up
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Speaker 2: normally as to whether you know you're positive or negative.
2:35
Speaker 2: So when you've got like a seventy five percent hit
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Speaker 2: rate over you know what's closing in on a two
2:40
Speaker 2: month span. It's a pretty relentless rally that we've seen,
2:44
Speaker 2: aside from a couple of very minor dips here one
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Speaker 2: of it's one of which lasted four three days during
2:53
Speaker 2: the latter part of May, and other than that, we
2:58
Speaker 2: haven't had any other instances on So here's one, there's
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Speaker 2: been two instances where I've had, you know, two back
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Speaker 2: to back days down. Other than that, it's just been
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Speaker 2: a relentless march forward for markets, and that's continuing today.
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Speaker 2: Tenure Treasury is down three point four basis points to
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Speaker 2: four point four to four percent. Ten year's basically been
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Speaker 2: but stuck between like four two and four six for
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Speaker 2: the last few months. Now at this point, you got
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Speaker 2: oil moving up dollars twenty six a barrel on West
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Speaker 2: Text Intermediate to sixty six twenty four right now, So
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Speaker 2: oil starting to make some moves back towards the high
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Speaker 2: sixties after being stuck, you know, between sixty and sixty
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Speaker 2: five for quite a while. See if we get any
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Speaker 2: continuation there, and we got gold up fourteen sixty and
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Speaker 2: ounce to thirty three point fifty eight right now. That
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Speaker 2: is what we have going on there. Big piece of
3:50
Speaker 2: news day CPI this morning came out much better than anticipated,
3:54
Speaker 2: point one percent monthly for both headline and core. The
3:58
Speaker 2: annual numbers now at two point four percent for headline
4:01
Speaker 2: and two point eight percent for Core. So continuing to
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Speaker 2: see some good numbers on the inflation side of things,
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Speaker 2: and that is obviously contributing to yields coming down a
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Speaker 2: little bit today. And the other piece was the announcement
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Speaker 2: that the United States and China have basically agreed to
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Speaker 2: the deal that they already agreed to a month ago,
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Speaker 2: which is why I don't think you're getting much reaction
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Speaker 2: at all on that front. But it does seem like
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Speaker 2: China is going to start exporting rare earths to the
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Speaker 2: United States again, and it's unclear exactly what the US
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Speaker 2: is doing differently at this point that is going to
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Speaker 2: encourage that change. We're gonna have to see the president
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Speaker 2: in a social media post noted, you know, one of
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Speaker 2: the things that's happening is the US will continue to
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Speaker 2: allow for Chinese students to go to US universities. But
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Speaker 2: it was implied that there are other things that the
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Speaker 2: US is doing as well. We just don't know exactly
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Speaker 2: what those are right now. Anything else I missed, Paul.
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Speaker 3: No, I was interested. Lackey Martin is down five almost
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Speaker 3: six percent in early trading. I thought they'd be up
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Speaker 3: on the news that perhaps this framework was in place
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Speaker 3: for China. But I did note that I guess the
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Speaker 3: Pentagon is asking for half the supply of F thirty
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Speaker 3: five fighter jets going forward, so that's why the stock
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Speaker 3: is taking a hit. So that's just one individual one
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Speaker 3: that caught my eye that I thought would have been up,
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Speaker 3: but I guess not.
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Speaker 2: Peace in the bloomy Berg Scott Besson emerging his contender
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Speaker 2: to succeed J. Powell. The White House then quickly shot
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Speaker 2: this down pretty quickly afterwards, which I don't know entirely
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Speaker 2: what to make of that, but I will quote the
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Speaker 2: piece here. A growing course of advisors inside and outside
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Speaker 2: the Trump administration are pushing another name to serve as
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Speaker 2: the next chair of the Federal Reserve Treasury Secretary Scott Bessant.
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Speaker 2: President Trump on Friday said he would name a successor
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Speaker 2: very soon to replace Jerome Powell, whose term as FED
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Speaker 2: chair ends in May of twenty six. Were under twelve
6:01
Speaker 2: months to go now for Jay Powell, he's got about
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Speaker 2: eleven months left at this point. And the name that
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Speaker 2: you know was kind of the betting favorite at this
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Speaker 2: point is Kevin Walsh and worsh if you're not familiar
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Speaker 2: with him, he was on the Federal Reserve Board of
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Speaker 2: Governors from two thousand and six to twenty eleven, and
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Speaker 2: generally during that time was pretty hawkish. Has kind of
6:28
Speaker 2: changed his views in recent years, but he has been,
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Speaker 2: you know, kind of the betting favorite for a little while.
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Speaker 2: I think, personally, I think if I had to an end, look,
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Speaker 2: no one asks me who I would pick his FED
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Speaker 2: chair but our show, So I'm gonna tell you anyways,
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Speaker 2: I would actually go with Christopher Waller, who President Trump
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Speaker 2: nominated him to the Federal Reserve Board of Governors back
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Speaker 2: in twenty twenty. And just hearing how Waller has spoken
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Speaker 2: in the last last couple of years, I feel like
7:07
Speaker 2: he's got a pretty good handle, just on both where
7:11
Speaker 2: the economy is right now, and also understanding kind of
7:19
Speaker 2: the threats, the threats posed by basically by policy getting
7:26
Speaker 2: you know, too far askew in either direction. I think
7:29
Speaker 2: he's very much someone who takes the job seriously. And
7:34
Speaker 2: you know, he was one of the few people back
7:36
Speaker 2: in twenty twenty two he had a paper that he
7:39
Speaker 2: wrote that talked about how the US could get that
7:42
Speaker 2: soft landing that everyone thought was going to be impossible,
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Speaker 2: and he basically laid out, Hey, here's what I want
7:47
Speaker 2: the next couple of years to look like. And he
7:49
Speaker 2: pretty much nailed it as far as that. So I
7:52
Speaker 2: think Waller would be my personal favorite. But again they
7:58
Speaker 2: don't ask me. But it is interesting that Best's being
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Speaker 2: talked about by someone who wants to, you know, plant
8:03
Speaker 2: this out here. Again. You always ask yourself, you know,
8:06
Speaker 2: why are you reading this now? And I think it's
8:09
Speaker 2: kind of an interesting thought exercise as to okay, a,
8:13
Speaker 2: how would Beston do? But be what does this do
8:15
Speaker 2: then to cabinet composition and how do things potentially move there?
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Speaker 3: Yeah, a little surprising that he's mentioned, just in the
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Speaker 3: sense that he has a job obviously as the Treasury
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Speaker 3: secretary that usually would conclude with Trump's term concluding based
8:28
Speaker 3: on historical precedence, so the idea that he's being mentioned
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Speaker 3: for this job a little surprising. He also would typically
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Speaker 3: be behind the search committee for finding the Federal Reserve chairman,
8:37
Speaker 3: so if they were looking to go in that direction,
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Speaker 3: you'd obviously have to recuse himself of that search. But
8:45
Speaker 3: in terms of the candidates being mentioned, you know, I
8:48
Speaker 3: think you hit pretty much everything that I would have
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Speaker 3: covered on the potential other candidates out there. We are
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Speaker 3: eleven months away from this decision, so ultimately it is
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Speaker 3: noteworthy that best would be considered, but not something that
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Speaker 3: we have to worry about necessarily in the here and now.
9:05
Speaker 3: It does sound like I guess the successor will be
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Speaker 3: named relatively soon, so we will see.
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Speaker 2: When you say relative, when do you think we hear?
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Speaker 1: Like?
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Speaker 2: Can we Tucker? Can we get a little prediction board
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Speaker 2: going on this?
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Speaker 3: Sure?
9:18
Speaker 2: When do you think Trump names Powell's successor? And this
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Speaker 2: is Price's right rules. If you are late, you are wrong.
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Speaker 3: September fifteenth, So.
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Speaker 2: You think it's not gonna be until after the summer, Yes, okay,
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Speaker 2: I'm gonna go August twenty first, Okay, No, August fifteenth,
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Speaker 2: I wrote the one, Well, you can just make that
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Speaker 2: part of the fifteen.
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Speaker 1: Okay, what else is new?
9:52
Speaker 2: It's fine, it'll be okay. Yeah, I think we're about
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Speaker 2: two months away and you think three. So we're both
9:58
Speaker 2: kind of in the same place. But can can we
10:02
Speaker 2: guess now who he's going to name?
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Speaker 3: Sure, I'll take I'll take Warsh.
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Speaker 2: You're gonna take Warsh. Yes, I kind of want to
10:11
Speaker 2: do someone just completely like off the off the board,
10:14
Speaker 2: just to like Steven A.
10:15
Speaker 3: Smith, just to get it.
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Speaker 2: No, like Stephen A. I've heard his thoughts on the
10:20
Speaker 2: strength of the dollar, and I gotta be honest, I'm
10:22
Speaker 2: not sure I entirely agree with them. I do think
10:26
Speaker 2: he has some interesting thoughts on the beverage curve, and so, uh,
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Speaker 2: you know, we'll see how that goes. But I might
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Speaker 2: go Waller. I think Waller's been making a really strong
10:37
Speaker 2: case the last month or two, and I think he's
10:39
Speaker 2: been like trying to play for it as well. I
10:41
Speaker 2: think Waller really wants this, and so I'm gonna go
10:45
Speaker 2: Waller with it. I think you're probably right, but just
10:47
Speaker 2: for the sake of contrary, Yeah, I got to back
10:51
Speaker 2: my dude. Also, I gotta do that, so I'm gonna
10:54
Speaker 2: go with Waller. Let's take a quick break here. When
10:57
Speaker 2: we come back, We've got a little bit of trivia
11:01
Speaker 2: right after this.
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Speaker 4: the Financial Exchange and on this day. Back in nineteen
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13:13
Speaker 2: Peace and Axios Entry level Worker Confidence is lower than ever,
13:18
Speaker 2: how low was it and why?
13:21
Speaker 1: Uh?
13:22
Speaker 3: Basically, what you have here is a labor market that
13:24
Speaker 3: we've talked about recently on the last couple shows that
13:28
Speaker 3: while the headline unemployment numbers won't indicate to you that
13:32
Speaker 3: there is a significant weakening the labor market, there are
13:35
Speaker 3: some underlying factors that are showing some cracks in h
13:40
Speaker 3: in the labor market. And if you just look at
13:43
Speaker 3: a couple of these different ones out there where in particular,
13:47
Speaker 3: recent college grads are having a really difficult time in
13:50
Speaker 3: terms of finding a gig out of school, you're seeing
13:54
Speaker 3: that there is pretty high unemployment rates in areas of
13:59
Speaker 3: majors that you typically would think that would be very
14:01
Speaker 3: secure in terms of getting a job out of college,
14:04
Speaker 3: for example, computer science and computer engineering. These are the
14:08
Speaker 3: unemployment rates for undergrads with those majors between the ages
14:12
Speaker 3: of twenty two and twenty seven are sitting in around
14:15
Speaker 3: six or seven and a half percent. And typically computer
14:18
Speaker 3: science was an area where you just always thought there
14:20
Speaker 3: would be robust hiring and significant to me, the same
14:23
Speaker 3: applies for white collar jobs in terms of professional services.
14:27
Speaker 3: In other areas, you're just really seeing a consistent sort
14:31
Speaker 3: of lack of emphasis on hiring new workers, and the
14:35
Speaker 3: entry level worker fits right into that mold, or they're
14:39
Speaker 3: often those recent college graduates. There is much more of
14:42
Speaker 3: a focus on keeping the existing talent that you have
14:45
Speaker 3: in place, but not necessarily straining the finances of a
14:50
Speaker 3: company to hire some of these newer workers. Obviously, there's
14:54
Speaker 3: potentially the rumor that always gets thrown in here that
14:56
Speaker 3: perhaps AI would be used to, you know, take over
15:00
Speaker 3: some of these positions. I don't really think that is
15:03
Speaker 3: entirely rampant at this point. Check Really it's more of
15:05
Speaker 3: a story of the fact that you're just not having
15:07
Speaker 3: a tremendous amount of new hires, and some of the
15:10
Speaker 3: data has really beared that out on the multiple metrics
15:15
Speaker 3: that you look at. Here, would you ever let AI
15:18
Speaker 3: replace you?
15:18
Speaker 1: Paul?
15:20
Speaker 3: Would I let it? Willingly know? I got a family
15:22
Speaker 3: to feed, so I'm going to try and fight to
15:25
Speaker 3: hold it.
15:26
Speaker 2: Here's to see, like how long AI could actually do
15:29
Speaker 2: my job, how.
15:32
Speaker 3: Long it could do it for? When when it could
15:34
Speaker 3: do it?
15:35
Speaker 4: Okay, Like people would know you were off, but thank
15:38
Speaker 4: you you were working.
15:39
Speaker 2: I guess that's more where I'm going. You're talking like, yeah,
15:45
Speaker 2: I'm not like, would I let like myself like, yeah,
15:48
Speaker 2: I'm not trying to be I'm more wondering, like, how
15:52
Speaker 2: long could you just, you know, assume how long could
15:55
Speaker 2: you leave an AI program out there before people noticed
15:59
Speaker 2: it wasn't you?
16:01
Speaker 4: Yeah, I guess chucks from you?
16:03
Speaker 3: Could you could do it? Definitely, see the Beau. On
16:06
Speaker 3: the investment side of things, you could definitely do.
16:08
Speaker 2: There are things so just as an example, there's a
16:11
Speaker 2: program called notebook LM. I think it's from Google, and
16:14
Speaker 2: you could put a bunch of inputs into it and
16:16
Speaker 2: basically what it does then right now is it makes
16:19
Speaker 2: it It's either like a fifteen or thirty minute podcast.
16:22
Speaker 2: It's like two fake people talking about the topics you
16:25
Speaker 2: give it. So like I'm wondering, can I just load
16:29
Speaker 2: the stack in and Paul and I not show up
16:32
Speaker 2: one day? Like is that something we could could try?
16:36
Speaker 2: We I'm asking you, Tucker. I probably not pulling my
16:40
Speaker 2: hair out.
16:42
Speaker 3: I'm writing on like checks task radio, check the investments.
16:48
Speaker 3: You could investment stuff, rebalance models, communications.
16:52
Speaker 2: I mean in theory, yes, but I also do wonder
16:56
Speaker 2: I look, eventually.
17:00
Speaker 4: I think you can get away with it for one
17:02
Speaker 4: week maybe not the radio side of things.
17:04
Speaker 2: Yeah, I mean, here's the thing, it's at what point
17:08
Speaker 2: does it say or do something that's out of character
17:12
Speaker 2: that like that? That's what I'm I would be more
17:14
Speaker 2: worried about.
17:15
Speaker 3: It's the biggest concern would be verbal communication with a
17:20
Speaker 3: client or anyone that you need to speak with that
17:22
Speaker 3: I would be unsure if they'd be able to respond
17:26
Speaker 3: appropriately to casual conversation.
17:29
Speaker 2: Well, just does it?
17:30
Speaker 1: Does it?
17:31
Speaker 2: Yeah? It's I am well.
17:35
Speaker 4: Our things?
17:36
Speaker 2: How is your family? I'm right down the street from you.
17:40
Speaker 2: I would love to take a vacation, but I'm stuck
17:43
Speaker 2: in this computer. Maybe next summer. Weather sucks lately, it's
17:47
Speaker 2: really frying my main frame. Anyways, what were we talking
17:54
Speaker 2: about about Theraila?
17:55
Speaker 3: Of the jobs? And you just just pose the hypothetical
17:58
Speaker 3: on AI taking a job.
18:00
Speaker 2: I got is always at the forefront, So I gotta
18:03
Speaker 2: say there's been. For the last month or so, I've
18:06
Speaker 2: noticed more and more pieces coming out about how AI
18:09
Speaker 2: is going to be more and more disruptive to the
18:13
Speaker 2: labor market in the next couple of years, like starting
18:16
Speaker 2: like twenty six, but really like twenty seven to twenty eight.
18:19
Speaker 2: And I find myself torn between two different opinions on it.
18:24
Speaker 2: The first is, there's no way this is gonna happen.
18:27
Speaker 2: I see all the problems with AI right now, and
18:30
Speaker 2: I see, you know why this is, you know, problematic,
18:33
Speaker 2: and no, it's never gonna work. And the other thought
18:35
Speaker 2: that I have is, man, I must be really missing something,
18:39
Speaker 2: because if I'm seeing this many pieces talking about it now,
18:42
Speaker 2: maybe it's way closer than I think. And not just
18:45
Speaker 2: for white collar you and I sitting in front of
18:48
Speaker 2: a screen looking at numbers jobs. But I'm hearing an
18:51
Speaker 2: awful lot of rumblings about robotics in the last couple
18:56
Speaker 2: of weeks as well, and how some of the additional
19:01
Speaker 2: compute powder's power is finally starting to solve some of
19:04
Speaker 2: the stuff that's been really challenging for a while on
19:07
Speaker 2: the robotics front, and what that means for manual labor
19:12
Speaker 2: jobs potentially as well.
19:14
Speaker 3: I've heard a little bit anecdotally on the data science
19:16
Speaker 3: and data analytics side of things. I know someone who
19:19
Speaker 3: works in that space and they're just saying that demand
19:21
Speaker 3: has really waned in that sector because of the potential
19:24
Speaker 3: for that. It's a fascinating question.
19:26
Speaker 2: Quick break here, when we come back, we got the
19:28
Speaker 2: trivia answer. We're also doing Wall Street Watch after this.
19:40
Speaker 1: Bringing the latest financial news straight to your radio. Every day.
19:44
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:50
Speaker 1: Time now for Wall Street Watch. A complete look at
19:53
Speaker 1: what's moving market so far today right here on the
19:56
Speaker 1: Financial Exchange Radio Network.
19:58
Speaker 4: Pretty busy day on walls Tree with a new reading
20:01
Speaker 4: on inflation this morning, where the Consumer Price Index showed
20:04
Speaker 4: consumer prices climb two point four percent year of a year,
20:08
Speaker 4: in line with estimates. Additionally, President Trump said the US
20:12
Speaker 4: deal with China to revive the trade truce was done
20:17
Speaker 4: subject to final approval from both from him and Chinese
20:21
Speaker 4: President g At the moment, the Tao is up by
20:26
Speaker 4: about a third of a percent, or one hundred and
20:28
Speaker 4: fifty three points, SMP five hundreds up by two tenths
20:31
Speaker 4: of one percent, and the Nasdaq up by about a
20:34
Speaker 4: quarter percent of forty three points. Russell two thousand is
20:37
Speaker 4: up by six tenths of one percent, Tenure treas reel
20:40
Speaker 4: down by three basis points now at four point four
20:43
Speaker 4: to four percent, and crude oil up over two percent higher,
20:46
Speaker 4: trading at sixty six dollars in forty three cents a barrel.
20:50
Speaker 4: Tesla shares up over two percent after CEO Elon Musk
20:54
Speaker 4: posted that his recent attacks on President Trump went to far. Furthermore,
20:59
Speaker 4: the ev makers said it tentatively expects to launch a
21:02
Speaker 4: long anticipated robo taxi service on June twenty second. Meanwhile,
21:07
Speaker 4: Steal companies Cleveland Cliffs and New Core garnering attention following
21:11
Speaker 4: a report that the Trump administration in Mexico were nearing
21:14
Speaker 4: a deal that would remove fifty percent tariffs on imports
21:18
Speaker 4: up to a certain volume. Cleveland Cliffs down by seven percent,
21:21
Speaker 4: while New Court shares off by four percent. Get Labs
21:25
Speaker 4: sinking by eight percent. Now after the online software developer
21:29
Speaker 4: platform issued a disappointing revenue forecast. Game Stop down by
21:34
Speaker 4: over three percent after the company swung to a quarterly
21:36
Speaker 4: profit despite falling sales, and General Motors announced they'll spend
21:40
Speaker 4: four billion dollars to produce more vehicles in the US,
21:44
Speaker 4: which will give the automaker the ability to assemble more
21:47
Speaker 4: than two million vehicles in the US each year. Gmstock
21:51
Speaker 4: is rising nearly three percent on that news. I'm Tucker
21:55
Speaker 4: Silva and that is Wall Street Watch and the trivia
21:57
Speaker 4: question we asked on the previous segment was who wrote
22:01
Speaker 4: the Jurassic Park books?
22:02
Speaker 3: That would be.
22:03
Speaker 4: Michael Crichton, John from West Roxbury, Mass is our winner
22:07
Speaker 4: today taking on a Financial Exchange Show t shirt and
22:10
Speaker 4: we play trivia every day here on the Financial Exchange
22:14
Speaker 4: See complete contest rules at Financial Exchange Show dot com.
22:19
Speaker 2: Can we take a second to just talk about one
22:21
Speaker 2: of those the Tesla item before we go? Wasn't tomorrow
22:26
Speaker 2: supposed to be the day of the robotaxi launch?
22:32
Speaker 3: Was it?
22:33
Speaker 1: And not?
22:33
Speaker 2: What I'm asking rhetorically because I will quote here from Bloomberg,
22:42
Speaker 2: Tesla targets June twelfth launch of robotaxi service in Austin.
22:47
Speaker 2: Quote Tesla Incorporated has poison to begin it's long awaited
22:50
Speaker 2: robo taxi service in Austin on June twelfth, according to
22:52
Speaker 2: a person familiar with the matter. Blah blah blah blah
22:55
Speaker 2: blah blah blah. It was discussed internally in the day.
22:58
Speaker 2: Could still change. So now we're to June twenty seconds,
23:02
Speaker 2: are we just going to keep pushing this back ten days?
23:04
Speaker 3: Absolutely? That's still their playbook, Like I mean, they delay stuff.
23:12
Speaker 3: I mean I think we're still waiting for a new
23:14
Speaker 3: model vehicle out of them.
23:17
Speaker 2: I don't even know what's supposed to be delivered at
23:19
Speaker 2: this point, but I guess the big thing. So I
23:23
Speaker 2: think it was either yesterday or the day before there
23:25
Speaker 2: was a Model Y driving around Austin without a person
23:29
Speaker 2: in the front seat, but it was also being trailed
23:32
Speaker 2: by a Model X SUV that Tesla's basically said, look,
23:38
Speaker 2: we're probably going to be driving these, you know, remotely
23:40
Speaker 2: at first, not like a true driverless experience, because we
23:44
Speaker 2: need to, you know, make sure that hey, there aren't
23:47
Speaker 2: any problems. And I guess I'm looking at this and
23:50
Speaker 2: I'm just trying to figure out when is this actually
23:55
Speaker 2: when are they actually going to do this, because they
23:56
Speaker 2: said they were going to start with like ten to
23:57
Speaker 2: twenty vehicles at first, and I don't know, this is
24:03
Speaker 2: beginning so much hype now for the last month or so,
24:06
Speaker 2: it feels like I'm hearing about this all the time,
24:10
Speaker 2: and it's it's like they just pushed the date back
24:11
Speaker 2: without telling anyone they would push the date back, and
24:13
Speaker 2: everyone just said, oh, yeah, like fine, it's June twenty second.
24:16
Speaker 2: And I'm reading the Bloomberg piece now that said it
24:18
Speaker 2: was June twelfth.
24:20
Speaker 3: Expect more delays. It's my prediction.
24:23
Speaker 2: I mean, youwanna even said like it's you know, we
24:25
Speaker 2: want to be really paranoid about safety, so there could
24:27
Speaker 2: be more delays.
24:28
Speaker 3: But I don't know why. Why why send a public
24:35
Speaker 3: date right then? Why don't like, why do you just
24:37
Speaker 3: pose it? Why are you committing to a public date?
24:39
Speaker 3: If you're saying we could delay that date, you know
24:42
Speaker 3: that would be like it's honestly probably keep the stock
24:47
Speaker 3: in reasonable form. If you just pause it and don't
24:51
Speaker 3: announce another date, then that probably maybe triggers a little
24:55
Speaker 3: bit of a sell off.
24:56
Speaker 2: I guess, I guess we've got a piece today from Barons.
25:02
Speaker 2: Why younger Americans trust stocks and bonds over homes to
25:06
Speaker 2: build wealth? Is it mostly because they can't afford homes.
25:11
Speaker 3: That encapsulates a lot of it? And also I don't
25:14
Speaker 3: think that headline is the appropriate way to phase what's
25:19
Speaker 3: going on really, because I don't view my home is
25:24
Speaker 3: as wealth necessarily. I mean, it's nice to see the
25:27
Speaker 3: equity appreciate on paper, but ultimately, even if I sell it,
25:32
Speaker 3: I have to live somewhere and move in with the
25:34
Speaker 3: end laws is off the table. As much as I
25:36
Speaker 3: love them, there has to be somewhere for our family
25:38
Speaker 3: to live. So I know that the traditional, you know,
25:41
Speaker 3: American view is, you know, raise a family, buy a home,
25:44
Speaker 3: white pick of fence. You know, that's sort of what
25:47
Speaker 3: you envision. But from a wealth perspective, two things can
25:50
Speaker 3: be true. You can invest in the market and build
25:53
Speaker 3: up a portfolio for your long term wealth while also
25:56
Speaker 3: trying to target buy a home. Like you just made
26:00
Speaker 3: the point, it's really hard to buy a home right now.
26:03
Speaker 3: You have mortgage rates that are twice as high as
26:05
Speaker 3: they were four or five years ago. Some could argue, yeah,
26:08
Speaker 3: seven percent from a historical average standpoint isn't too bad.
26:13
Speaker 3: But oh, by the way, the home price that you're
26:15
Speaker 3: looking at is forty or fifty percent higher than it
26:18
Speaker 3: was four or five years ago as well. So it
26:20
Speaker 3: to me it's much more an affordability issue than this
26:25
Speaker 3: idea that people are just focusing on buying stocks rather
26:29
Speaker 3: than purchasing a home.
26:30
Speaker 2: Yeah. The big thing with real estate that I always
26:34
Speaker 2: come back to is, look, if if you look at
26:35
Speaker 2: like the long term rate of appreciation for real estate,
26:39
Speaker 2: it's it's not particularly impressive. No, it's like three to
26:42
Speaker 2: four percent, right, But couple things. The first is the
26:48
Speaker 2: reason why real estate historically does generate outsize returns for people.
26:54
Speaker 2: If you know, provide that you're holding it through you know,
26:57
Speaker 2: any extended period of time. The major ways that you
27:00
Speaker 2: can get significant leverage as an average Joe, you put
27:04
Speaker 2: twenty percent down, okay, you got you know, five x
27:07
Speaker 2: leverage on that, which means, hey, if I put again,
27:11
Speaker 2: let's call it, one hundred thousand dollars down on a
27:14
Speaker 2: five hundred thousand dollars property, property goes up. Let's say
27:19
Speaker 2: it's one year four percent in values. Now my five
27:21
Speaker 2: hundreds five to twenty. I go to sell, and granted
27:24
Speaker 2: I know they're selling costs in this and that, but like,
27:26
Speaker 2: just hear me out for a second. If I go
27:28
Speaker 2: to sell, I've now turned my one hundred into one
27:31
Speaker 2: hundred and twenty in a year. Because of that leverage,
27:34
Speaker 2: I was able to grow it by twenty percent.
27:36
Speaker 1: There.
27:37
Speaker 2: The other side is also true, which is, hey, if
27:41
Speaker 2: you have a period where home prices go down great
27:45
Speaker 2: financial crisis, let's say home loses ten percent of its value.
27:48
Speaker 2: Now your hundred's turned into fifty. It's it's bit you
27:50
Speaker 2: the other way unfortunately, and that can be a problem.
27:54
Speaker 2: But that kind of leverage you can't really just go
27:59
Speaker 2: his historically to financial markets, go to you know, a
28:04
Speaker 2: broker and be like, hey, can you give me five
28:06
Speaker 2: x leverage on the S and P five hundred? Please
28:10
Speaker 2: be like no, Like, that's not really what you're allowed
28:12
Speaker 2: to do. We can't give you that much margin. Now
28:14
Speaker 2: in the advent of all these levered ETFs and this
28:17
Speaker 2: and that, where you are seeing like two three x
28:19
Speaker 2: you know, stuff that's that's out there. Sure that exists
28:22
Speaker 2: as well, but those also have not been tested through
28:24
Speaker 2: a full market cycle, and we don't know exactly, you know,
28:28
Speaker 2: how much pain people are willing to stomach on the
28:31
Speaker 2: downside and how that may play into market stability as
28:34
Speaker 2: you go. But I look at this and yeah, I'm
28:39
Speaker 2: kind of with you, Paul, and that I'm not sure
28:41
Speaker 2: that the headline covers everything that's in this piece appropriately. Here, folks,
28:47
Speaker 2: The Armstrong Advisory Group has a guide available this month.
28:51
Speaker 2: It is titled your Retirement Prep Checklist. Already retired this year,
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29:43
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
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29:59
Speaker 2: I've maintained before it was fashionable that if you really
30:02
Speaker 2: want to be serious about improving you know, the a
30:08
Speaker 2: like that the overall quality of the power generation in
30:11
Speaker 2: the United States, while at the same time trying to
30:15
Speaker 2: reduce carbon emissions you are not a serious person unless
30:18
Speaker 2: you're also talking about nuclear And it seems like we're
30:22
Speaker 2: finally talking about nuclear energy in the United States until
30:26
Speaker 2: there is meaningful regulatory reform. I'm skeptical on actual construction
30:32
Speaker 2: moving forward in a lot of cases, but I'm someone
30:36
Speaker 2: who wants more nuclear development in the United States, and
30:41
Speaker 2: it seems like maybe we're on the cusp of that.
30:43
Speaker 2: But I got to see it from the regulatory side,
30:46
Speaker 2: just because there have been so many false starts on
30:48
Speaker 2: this in the last twenty thirty years that I'll kind
30:51
Speaker 2: of believe it when I see Yeah, that's a fair.
30:53
Speaker 3: Way to look at it. There's certainly been numerous attempts.
30:56
Speaker 3: Like you're mentioning, you would think on the optimistic side
30:59
Speaker 3: of things, there are there's a tremendous amount of momentum
31:02
Speaker 3: and things pointing in the direction that would allow for
31:05
Speaker 3: regulatory reform between the race to beat China in terms
31:10
Speaker 3: of the development of nuclear energy here, and also you
31:14
Speaker 3: couple that with the enthusiasm surrounding AI, which is a
31:18
Speaker 3: tremendous power drain on the system. Those two things in lockstep,
31:23
Speaker 3: you'd think that this is something that's mission critical to achieve.
31:28
Speaker 3: Energy independence and also be able to compete with China
31:32
Speaker 3: and further develop the prevalence of AI. You're gonna need
31:35
Speaker 3: these things. So if there was gonna be a time,
31:37
Speaker 3: you think it's now, But uh, you have to proceed
31:40
Speaker 3: with caution because there's just so many instances at these
31:45
Speaker 3: locations that have been shuttered down for decades in the
31:49
Speaker 3: past where this was trying to be attempted and not executed.
31:52
Speaker 2: Let's take a quick break here. When we return Stack Rules.
31:58
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32:01
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32:39
Speaker 2: All right, Paul, what do you got for me? For Stack? Roule?
32:42
Speaker 3: US American Airlines sent a plane from the US to
32:46
Speaker 3: Italy that was too big for its destination airport and
32:49
Speaker 3: wasn't allowed to land. A flight took off last night
32:52
Speaker 3: from Philadelphia, Pennsylvania, off to Naples in Italy and it
32:57
Speaker 3: had to change course to Rome on Tuesday morning. They
33:01
Speaker 3: were about seventy miles away from the Naples airport when
33:05
Speaker 3: they were diverted to the Rome airport because the plane
33:09
Speaker 3: that they sent, a Boeing seven eighty seven, was twenty
33:12
Speaker 3: feet longer than the typical one that they send, which
33:16
Speaker 3: is a seven eighty seven eight I guess, instead of
33:20
Speaker 3: the seven eighty seven nine. So as a result, they
33:22
Speaker 3: had to change course, have those passengers land in Rome instead,
33:27
Speaker 3: and then get bust two hours down to Rome. You
33:31
Speaker 3: would think that this would have been perhaps sorted out beforehand,
33:36
Speaker 3: the size of the plane going over there, But I
33:39
Speaker 3: guess nuts.
33:40
Speaker 2: How do you not have someone out there whose only
33:44
Speaker 2: job is making sure that the plane taking off can
33:49
Speaker 2: actually land at the airport you're trying to land at?
33:53
Speaker 3: Really similar to you think like coaches in the NFL,
33:56
Speaker 3: just like one person who should just be responsible for
33:59
Speaker 3: the out of timeouts or the challenge flag throwing at
34:02
Speaker 3: a certain time, Like just one person to focus on
34:05
Speaker 3: that very important thing.
34:07
Speaker 2: Or like yeah, just this kind of reminds me of
34:11
Speaker 2: the story that we covered a month or so ago
34:13
Speaker 2: where Volkswagen came out with the ID Buzz, their new
34:18
Speaker 2: EV that looks like the old VW Bus and they
34:22
Speaker 2: just had to do a recall because the back seat
34:25
Speaker 2: is too wide to only have two seat belts in
34:27
Speaker 2: the United States, it needs to have three, which also, interestingly,
34:32
Speaker 2: I was reading another review of this thing and it
34:34
Speaker 2: even remarked, Wow, this back seat is only built for
34:37
Speaker 2: two people, but it feels like you could fit a
34:39
Speaker 2: third one in there really easily, and like, shouldn't there
34:42
Speaker 2: just be someone at Volkswagen reviewing the regulations to be like, hey,
34:49
Speaker 2: does this need to be you know, two seats or
34:51
Speaker 2: three seats? Just all everything out there? It doesn't seem
34:56
Speaker 2: that complicated to me. It just seems like a an
35:00
Speaker 2: oversight that in this case, again, you had to take
35:03
Speaker 2: a two hour bus after landing in Rome, like okay,
35:08
Speaker 2: Like it's fine, I guess you could see, you know,
35:09
Speaker 2: some nice Italian countryside, except that.
35:13
Speaker 3: What time did this Tuesday morning?
35:16
Speaker 2: Tuesday morning? Where okay, so fine, so you get to
35:21
Speaker 2: see some Italian countryside. Maybe they bought you lunch to
35:24
Speaker 2: that'd be kind of nice maybe, but yeah, you would
35:27
Speaker 2: you would expect the airline to send, you know, the
35:31
Speaker 2: right kind of plane that can actually land at the
35:34
Speaker 2: airport there.
35:36
Speaker 3: Uh.
35:37
Speaker 2: Piece from the Wall Street Journal as alternative meets lose favor.
35:42
Speaker 2: Alternative meets, that's what we're calling them now. We can't
35:45
Speaker 2: do you know, plant based meats as alternative meets impossible
35:52
Speaker 2: food sets its sight on flexitarians. I gotta ask.
35:57
Speaker 3: Forgot they were still in business.
35:59
Speaker 2: I gotta ask you guys, you know a lot of flexitarians.
36:02
Speaker 2: Is that someone who just walks around flexing while they're
36:04
Speaker 2: eating whatever they want to eat?
36:06
Speaker 4: Definition? Please?
36:07
Speaker 2: Uh? Flexitarians are people whose diets only occasionally include meat.
36:13
Speaker 3: My sister would actually fall into that category. Shockingly, it's
36:17
Speaker 3: not a thing. No, no, I'm not saying this, I know.
36:21
Speaker 2: But like now, we're just making up words for the
36:24
Speaker 2: sake of trying to save the business. Of course, and
36:27
Speaker 2: there's only one reason to make up words, and that's
36:30
Speaker 2: because they're awesome. It's how you know we operate on
36:34
Speaker 2: the Financial Exchange is we make up words all the time.
36:39
Speaker 2: Below toe is a great word that we use on
36:42
Speaker 2: our show all the time, because a plateau is a
36:45
Speaker 2: rise into something that's high. But there's not a great
36:48
Speaker 2: word for like a drop into something that's that's flat,
36:51
Speaker 2: and so we use below toe to represent that it's
36:54
Speaker 2: a plateau that's.
36:55
Speaker 4: Below Buffalo market was another one.
36:58
Speaker 2: The buffalo market's slow. Instead, he just grazed and left
37:01
Speaker 2: and right. Not a bullet's not a bear.
37:03
Speaker 4: It this week has been a buffalo market.
37:06
Speaker 2: It's been the buffalo. That's what we're in right now.
37:08
Speaker 2: It's a buffalo market. It's not a Bullet's not a bear.
37:10
Speaker 2: It's a buffalo. Flexitarian is just crap. Yeah, Like that's
37:15
Speaker 2: not a thing. You either are a vegetarian or you're not.
37:18
Speaker 2: I can even get on board with pescatarian. Fine, you
37:20
Speaker 2: only eat something, only eat meat from fish. I buy
37:24
Speaker 2: that someone who only eats meat occasionally. We don't need
37:28
Speaker 2: a word for that to justify your business model. I'm sorry,
37:32
Speaker 2: but we don't quote. Approximately over one hundred million US
37:36
Speaker 2: people fit the broad term of flexitarians. Yeah, and you
37:40
Speaker 2: still can't sell them this stuff because it's overpriced and
37:43
Speaker 2: no one wants to buy it again once they've had
37:45
Speaker 2: it once, like me, So I mean and again, some
37:50
Speaker 2: of this stuff last year impossible foods out overtook rival
37:54
Speaker 2: Beyond Meat for the number two spots in US retail
37:58
Speaker 2: share of meat alternatives. Okay, fine, so you're the largest
38:02
Speaker 2: ant on the planet. Wonderful. It's just look, I gave
38:08
Speaker 2: these companies a shot that they couldn't do anything interesting
38:12
Speaker 2: or exciting with their products, and that's still kind of
38:14
Speaker 2: where they are. We're going to take a quick break
38:17
Speaker 2: for the entire rest of the day. When we return tomorrow,
38:21
Speaker 2: it's more of us. So that's great.