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Is the middle-class lifestyle drifting out of reach? · The Financial Exchange Show

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Speaker 1: a donation today. This is the Financial Exchange with Chuck
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Speaker 1: Zatta and Mike Armstraw.
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Speaker 2: Chuck, Mike and Tucker with you here as we kick
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Speaker 2: off a busy, busy, busy, busy busy week of economic data, policy, actions, earnings.
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Speaker 2: We got all that this week, anything from housing price
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Speaker 2: data to a FED meeting. We've got Meta earnings, We've
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Speaker 3: We got all kinds of stuff going on this week.
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Speaker 2: And so if you're you know, digging out of you know,
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Speaker 2: or if you just got a little rain, or maybe
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Speaker 2: even just some clouds and you're just listening to us,
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Speaker 2: we appreciate you joining us. As always, markets today seem
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Speaker 2: to be pretty optimistic about the start of this week here,
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Speaker 2: with the S and p F thirty five points about
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Speaker 2: half a percent, the Dow was up one hundred and
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Speaker 2: thirty four points about a quarter percent, and the NASDAK
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Speaker 2: composite up one hundred and thirty nine points just about
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Speaker 2: point six percent. Ten year US Treasury is falling two
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Speaker 2: point eight basis points to four point two to one
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Speaker 2: one percent, so you've got treasury rates moving in just
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Speaker 2: a little bit here. Dollar index weakening continuing to weaken
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Speaker 2: pretty significantly, down point seventy two percent today to ninety
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Speaker 2: six seventy. So the dollars weekened to the tune of
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Speaker 2: about two and a half three percent over the last week.
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Speaker 2: Big reason behind this is some strength that we're seeing
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Speaker 2: in the Japanese yet and we'll talk about that shortly.
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Speaker 2: Gold feeling that dollar weakness, up one hundred eleven dollars
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Speaker 2: and twenty cents an ounce above five thousand ounce for
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Speaker 2: the first time to five thousand, eighty nine dollars and
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Speaker 2: eighty cents. Silver continuing to just you know, go absolutely
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Speaker 2: parabolic to the upside, up another ten percent to day
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Speaker 2: to one hundred and twelve bucks an ounce. And we've
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Speaker 2: got crude oil down forty six cents a barrel to
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Speaker 2: sixty dollars and sixty one cents tripa national amateur gas
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Speaker 2: prices though moving up one point seven cents as we
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Speaker 2: continue to see some refinery outages due to cold temps,
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Speaker 2: and so not a huge move, you know, maybe you know,
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Speaker 2: eight ten cents higher over the last week and a half,
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Speaker 2: but you're towards the high end of the range that
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Speaker 2: we've been in recently, and barring anything unexpected, I wouldn't
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Speaker 2: expect this to have too much more in the way
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Speaker 2: of legs to the upside on oil prices.
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Speaker 3: As I noted though, Mike.
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Speaker 2: Our top story for this hour is what's been going
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Speaker 2: on with the Japanese. Yeah, and there's a piece of
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Speaker 2: market Watch Michael Burry, who again like just the guy. Look,
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Speaker 2: two things can be true. The guy has had a
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Speaker 2: better investment career than I ever will have, but also
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Speaker 2: gets talked about as if he's this, you know, predictor
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Speaker 2: of everything that's going to happen in markets, when really
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Speaker 2: he had one amazing bet about twenty years ago and
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Speaker 2: the rest of his career has been, you know, just fine.
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Speaker 2: But it's not like he's right all the time. Like
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Speaker 2: most investment managers. It's kind of a fifty to fifty
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Speaker 2: proposition generally. Yeah, and I find myself falling into a
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Speaker 2: dangerous trap where now when I'm seeing Michael Berry articles,
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Speaker 2: I deal with them with a heavy dose of skepticism
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Speaker 2: when in reality, you know, he still brings up reasonable points.
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Speaker 2: But he has been I guess inflammatory to such a
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Speaker 2: high degree over the course of the last two decades
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Speaker 2: without getting a whole lot of big calls right that.
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Speaker 2: When I see his name printed in articles, I'm very
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Speaker 2: frequently saying, Okay, let's just put this one aside here,
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Speaker 2: but talk to me about the Japanese yen and the
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Speaker 2: reversal and so called rate check that could be stirring
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Speaker 2: problems for US docs if you buy it. All right,
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Speaker 2: So here's the deal. Japan has its own currency. It's
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Speaker 2: called the yen. It's what they used to buy stuff there. Yes,
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Speaker 2: you can, through different ways trade yen four dollars and
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Speaker 2: vice versa. As of the end of As of about
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Speaker 2: a week and a half ago, if you took a
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Speaker 2: look at where things were trading as far as number
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Speaker 2: of yen to the dollar, you got up to around
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Speaker 2: one hundred and sixty, which it was estimated at that point,
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Speaker 2: not estimated, but kind of predicted by a lot of
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Speaker 2: four X experts that the Japanese Ministry of Finance, basically
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Speaker 2: the equivalent of the US Treasury Department might want to say,
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Speaker 2: you know, put in place some kind of intervention to
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Speaker 2: prevent the end from weakening too far.
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Speaker 3: They do this, I don't want.
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Speaker 2: To say frequently, but it happens on a fairly regular basis,
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Speaker 2: when things get out of whack in terms of exchange
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Speaker 2: rates to the point where it's kind of predictable what
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Speaker 2: ends up happening then, And so we didn't see anything,
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Speaker 2: you know, really going on for much of last week,
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Speaker 2: and then on words started leaking out that the Treasury
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Speaker 2: Department had reached out to different banks asking them to
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Speaker 2: do exchange rate checks, basically saying, hey, what what are
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Speaker 2: you getting right now for you know, rates if you
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Speaker 2: wanted to do a move of because basically think about
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Speaker 2: it this way, if you're trying to strengthen the yen,
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Speaker 2: you need to weaken the dollar. You want to sell
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Speaker 2: dollars and buy yen. Effectively, that's what you do. And
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Speaker 2: so pretty much what you end up with is the
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Speaker 2: Treasury saying, okay, give us rate checks in case, you know,
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Speaker 2: any action is warranted. And typically this is an early
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Speaker 2: sign that the Japanese Ministry of Finance is wanting to
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Speaker 2: conduct some kind of operation, potentially with the help of
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Speaker 2: the Treasury, but usually not. It's usually just, you know,
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Speaker 2: the Ministry of Finance will come in and they'll do
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Speaker 2: all the stuff they need to. The interesting thing, so
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Speaker 2: this occurs on Friday, and typically within your twenty four
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Speaker 2: trading hours is when you see the action. There has
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Speaker 2: been no action from the Ministry of Finance to this point,
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Speaker 2: and yet the yen has strengthened relative to the dollar
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Speaker 2: by about four percent now, which is typically about how
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Speaker 2: much the Ministry of Finance tries to move it during
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Speaker 2: these interventions that they stage. So first the question now
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Speaker 2: is like, will there still be something beyond you know,
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Speaker 2: the move we've already seen.
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Speaker 3: Don't know.
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Speaker 2: But the reason why this matters to US investors is
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Speaker 2: not because the average person living in Boston, Topeka, Miami,
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Speaker 2: flag Staff, Tacoma. The average person in America does not
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Speaker 2: need yen on a regular basis. Well, yeah, I've never
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Speaker 2: held one yen, let alone one hundred and sixty of them, right.
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Speaker 2: The reason this matters is that Japanese investors are huge
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Speaker 2: investors in US markets, and one of the risks that
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Speaker 2: they undertake in doing so is if their currency strengthens
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Speaker 2: relative to the dollar, the value of their investment in
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Speaker 2: yen terms goes down. If you buy a US bond
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Speaker 2: with let's let's just use it. This is how it
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Speaker 2: actually works. But let's say you use one hundred and
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Speaker 2: sixty yen to buy a US bond, and now you
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Speaker 2: go to sell that bond, but you only have one
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Speaker 2: hundred and fifty five yen coming back. You're like, well,
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Speaker 2: I'm weaker in the terms that I can use to
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Speaker 2: buy cars, housing, and food where I actually buy them.
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Speaker 2: So that's the risk that is posed here. And this
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Speaker 2: is why historically, not even historically over the last you know,
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Speaker 2: five to ten years, one of the risks for US
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Speaker 2: markets has been a strengthening of the yen in the
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Speaker 2: short term because it tends to result in capital going
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Speaker 2: back to Japan against short term for trading purposes, because
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Speaker 2: investors don't want to take the risk of you know,
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Speaker 2: losing more. So this is is kind of the risk
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Speaker 2: that is present. It's what caused markets to get a
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Speaker 2: little edgy last you know, late July early August, when
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Speaker 2: we saw some really weird things happening there.
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Speaker 3: But I always make.
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Speaker 2: The point, Look, you rarely see the same issue, cause
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Speaker 2: you know, a blow up in markets twice in very
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Speaker 2: short proximity. And I think that's kind of the case
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Speaker 2: here where Look, investors already had to clean up their
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Speaker 2: books for yen exposure and things like that. A year ago,
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Speaker 2: a year and a half now they're kind of watching
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Speaker 2: that still. It's not something that's going to you know,
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Speaker 2: catch them off guard because they've seen that happen already.
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Speaker 2: It's it's just, you know, typically it's something new that
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Speaker 2: needs the surprise markets, and we haven't gotten there yet.
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Speaker 2: But that's what's being pointed out here. Effective fair enough,
9:39
Speaker 2: Now that we've talked about foreign exchange to the point
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Speaker 2: where all of you are like, great, Chuck, or can
9:44
Speaker 2: we like do something else, the answer is yes, we're
9:46
Speaker 2: gonna take a break, and then we're gonna talk about
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Speaker 2: whether the middle class lifestyle is out of reach. And
9:52
Speaker 2: we've also got trivia that'll suck you right back in
9:54
Speaker 2: after ten minutes of four x talk right after this.
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11:29
Speaker 2: Mike, we had a piece uh in The New York
11:31
Speaker 2: Times featuring a New New York Times seeing a poll
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Speaker 2: that was taken about a week ago, two weeks ago
11:38
Speaker 2: and The title is voterc middle class lifestyle as drifting
11:42
Speaker 2: out of Reach poll finds, And basically they pulled people on,
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Speaker 2: you know, a whole bunch of different things and said,
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Speaker 2: do you find this to be unaffordable? No opinion, somewhat,
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Speaker 2: somewhat affordable, or mostly affordable. And here are the areas
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Speaker 2: that were found to be most heavily unaffordable. Education with
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Speaker 2: fifty eight percent of people responding that way, housing with
12:06
Speaker 2: fifty four percent of people responding that way, healthcare forty
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Speaker 2: seven percent, of people having a family forty four percent
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Speaker 2: of people, groceries twenty eight percent, food twenty six, utilities
12:16
Speaker 2: twenty three in transportation twenty two. The other thing that
12:19
Speaker 2: was interesting is they broke this down from a demographic
12:24
Speaker 2: standpoint and looked at, hey, amongst different age groups, you know,
12:31
Speaker 2: what are the differences there? Specifically, do you think that
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Speaker 2: the life you feel like you should be able to
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Speaker 2: afford is out of reach, within greach, or currently can
12:39
Speaker 2: afford it? And basically what they found was that younger
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Speaker 2: people were far more likely to say that the lifestyle
12:45
Speaker 2: they wanted was out of reach.
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Speaker 5: And specifically, millennials are the I guess whiniest cohort of
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Speaker 5: the group.
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Speaker 3: Yes, with gen.
12:56
Speaker 2: Alpha is it is that what we're calling them z
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Speaker 2: They are eighteen to twenty nine year olds. I think
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Speaker 2: z Jen Alf is the next one after that. Yeah,
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Speaker 2: Gen Z is you know, in a pretty similar place.
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Speaker 2: And boomers, you know, sixty three percent saying nope, we
13:10
Speaker 2: can afford exactly what we want. So let's talk first
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Speaker 2: about these these micro issues. What stood out to you
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Speaker 2: when looking at the mic?
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Speaker 5: Nothing found did I find immensely surprising?
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Speaker 3: Right?
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Speaker 5: I think transportation and utilities and food prices, as much
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Speaker 5: as we make us think about them, I don't think
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Speaker 5: people are legitimately having a tremendously difficult time putting food
13:34
Speaker 5: on the table. They're just dissatisfied with where prices have
13:37
Speaker 5: gone a lot. There are signs that some families are
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Speaker 5: you know, again, I'm speaking in the aggregate here.
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Speaker 3: I'm with you.
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Speaker 5: Yeah, the pace at which people have been visiting food banks.
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Speaker 5: And I don't mean to diminish those things. I just
13:51
Speaker 5: mean that when we compare to say the portion of
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Speaker 5: people that find education and housing to be unaffordable, it's
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Speaker 5: a much smaller portion of people that were pulled here.
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Speaker 5: The healthcare one is interesting to me. I would imagine
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Speaker 5: that that flipped dramatically over the course of the last
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Speaker 5: just few months with the expiration of the Obamacare Affordable
14:12
Speaker 5: Care Act tax credits. The other piece, just to point
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Speaker 5: out here, just because when we say that, hey, fifty
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Speaker 5: eight percent of people find education unaffordable, that does not
14:23
Speaker 5: mean that forty two percent find it to be affordable.
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Speaker 5: It means that, you know, eight percent set it's mostly affordable,
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Speaker 5: twenty six percent set it's somewhat affordable. So I think
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Speaker 5: by and large, the big categories where people are saying, hey,
14:38
Speaker 5: this stuff is expensive are the ones that you would
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Speaker 5: think of, education, housing, healthcare, having a family. It's the
14:44
Speaker 5: same ones that we talk about over and over on
14:46
Speaker 5: this program. What I don't have here is any comparison
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Speaker 5: to five years ago, And frankly, I think that would
14:54
Speaker 5: be pretty interesting to me, is we've been talking about
14:57
Speaker 5: affordability really heavily now since twenty twenty two. Do you
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Speaker 5: think that's fair to.
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Speaker 2: Say in this context? Yes, But I think that as
15:11
Speaker 2: like the lack of data points, you know, longitudinally, like, hey,
15:16
Speaker 2: what we're responding saying in twenty seventeen or twenty ten, right,
15:20
Speaker 2: is something that we miss on this because how many
15:23
Speaker 2: times Mike back in like twenty fourteen or fifteen, did
15:26
Speaker 2: you hear, oh, like, no one can buy homes because
15:31
Speaker 2: interest rates are too low and it's pushing up home
15:33
Speaker 2: prices and it's punishing savers also, right, you know, So
15:36
Speaker 2: like I feel like we just always complain about this stuff.
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Speaker 2: And it's not to say there isn't a problem. But
15:46
Speaker 2: what struck me on this mic was those top three
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Speaker 2: areas that people say are the least affordable, like that
15:53
Speaker 2: the people have the most affordability problems with. Aren't those
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Speaker 2: the three areas where we have the highest level of
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Speaker 2: intervention in those markets?
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Speaker 3: Let's see compared to the others, like transportation.
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Speaker 2: Do we sit here and we're like, hey, you know
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Speaker 2: the the first of all, there is no federal transportation system,
16:15
Speaker 2: But like, do we sit here and are sitting there
16:17
Speaker 2: going hey, like the federal government is you know, intervening
16:21
Speaker 2: in transportation too much.
16:23
Speaker 3: Or in car prices?
16:24
Speaker 5: No? No, Like we really don't have much in the
16:27
Speaker 5: way of Yeah, it's an interesting it's an interesting conclusion there, Chuck,
16:31
Speaker 5: or an interesting observation that you know, compared with groceries
16:35
Speaker 5: and food prices and utilities. There's a fair bit more
16:38
Speaker 5: in the way of intervention on education, housing, and healthcare.
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Speaker 2: Well, here's what we do. On education. We throw a
16:44
Speaker 2: ton of money at it. We say, hey, you can't
16:46
Speaker 2: afford to go to college. Here's some student loans, you know,
16:50
Speaker 2: subsidized by the government. You can never discharge them. But
16:54
Speaker 2: do we require any type of expanded offering from colleges?
16:59
Speaker 2: And in order to do this, No, we just say, Okay,
17:03
Speaker 2: here's the extra money. Supply remains the same, because colleges
17:07
Speaker 2: know that if you're trying to move up in your ranking,
17:09
Speaker 2: you want more applicants and fewer acceptances. And so we've
17:14
Speaker 2: created this bastardization where some of it's like a public market,
17:17
Speaker 2: some of it's private, and none of it works well together.
17:20
Speaker 2: Healthcare is basically the same thing. Hey, here's a bunch
17:23
Speaker 2: of money to go and pay for health insurance. Do
17:26
Speaker 2: we require that there are you know, more doctors trained
17:31
Speaker 2: each year in order to accept the larger number of patients.
17:35
Speaker 3: No, we don't.
17:36
Speaker 2: And so again you kind of got this thing where
17:38
Speaker 2: it's like, hey, here's a bunch of money, but supply
17:40
Speaker 2: is not moving up.
17:41
Speaker 3: Housing. Oh I'm glad we got here. Housing. I want
17:45
Speaker 3: to introduce you to a.
17:46
Speaker 2: Little thing called the mortgage interest deduction, which is basically
17:49
Speaker 2: hundreds of billions of dollars a year going to housing.
17:51
Speaker 2: Do we do anything to improve supply or do we
17:54
Speaker 2: just throw a bunch of money at the problem? Money
17:55
Speaker 2: at the problem, money at the problem. And so I
17:59
Speaker 2: can't help but think that whenever we see affordability being
18:02
Speaker 2: mentioned as the problem, the two things that we decide
18:05
Speaker 2: to do are, Hey, here's some money that'll solve it,
18:09
Speaker 2: or we're gonna cap the price of it that'll solve it.
18:12
Speaker 3: And does it ever actually solve it? Yeah?
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Speaker 5: I just I think we all need to think a
18:17
Speaker 5: little bit critically when we get faced with these proposals
18:21
Speaker 5: like the fifty year mortgage, like new tax deductions for
18:25
Speaker 5: education or you know, for giving student loans.
18:31
Speaker 2: There Texas, Austin Texas home prices right now are down
18:35
Speaker 2: almost twenty percent from the peak. And the reason why
18:39
Speaker 2: is because they decided, hey, there's a lot of interest here,
18:42
Speaker 2: We're gonna build a ton of homes. And guess what,
18:44
Speaker 2: it's Austin, Texas. So the regulations allow for the building
18:46
Speaker 2: of a ton of homes and so home prices are
18:48
Speaker 2: coming down rapidly. Now are the people who you know
18:51
Speaker 2: are trying to sell that bought in twenty twenty two
18:54
Speaker 2: thrilled with this. No, but you have lower home prices
18:57
Speaker 2: now because you built way more. It's not too complicated,
19:02
Speaker 2: So find demand. And we refuse to learn these lessons
19:06
Speaker 2: and instead say, oh, I want to you know, cap,
19:10
Speaker 2: here's you know, twenty thousand dollars for her first time
19:13
Speaker 2: home buyers. Oh yeah, just give everyone more money with
19:16
Speaker 2: the same number of homes. That'll make it more Affordable's.
19:19
Speaker 5: Cap how much you can charge in credit card interest rates?
19:21
Speaker 5: That that's going to solve the problem.
19:23
Speaker 2: So we need to work on the supply side of
19:27
Speaker 2: the piece in order to get somewhere. And all we
19:29
Speaker 2: ever want to do is add more demand, which is
19:31
Speaker 2: the exact wrong thing to do.
19:33
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Speaker 4: Markets in positive territory as Wall Street assesses the economic
20:04
Speaker 4: impact from Sunday's snowstorm. Traders are also rating for a
20:08
Speaker 4: FED meeting with a decision on interest rates Wednesday afternoon,
20:12
Speaker 4: in addition to big tech earnings this week from the
20:15
Speaker 4: likes of Microsoft, Meta, Tesla, and Apple. Right now, the
20:20
Speaker 4: Dow is up a third of a percent, SMP five
20:22
Speaker 4: hundred up over half a percent to thirty eight points higher,
20:26
Speaker 4: Nasdaq up two thirds of a percent or one hundred
20:28
Speaker 4: and fifty six points higher. RUSS two thousand is down
20:31
Speaker 4: now about four tenths of a percent. Ten Your treas
20:35
Speaker 4: reel down two basis points at four point two one
20:38
Speaker 4: seven percent. Dank crude oil down one percent today, trading
20:41
Speaker 4: at sixty dollars and forty six cents a barrel. In
20:44
Speaker 4: Video this morning announced that they are investing in additional
20:49
Speaker 4: two billion dollars into AI data center company core Weave.
20:53
Speaker 4: The company said this morning that they would build new
20:56
Speaker 4: AI factories on in Vidia's computing platform, tech Technology operated
21:01
Speaker 4: by core Weave and Video shares it down modestly, while
21:04
Speaker 4: core Weave stock is jumping nine percent higher. Meanwhile, Microsoft
21:08
Speaker 4: shares are climbing nearly one and a half percent after
21:11
Speaker 4: the tech gine unveiled The next generation of its AI chip.
21:15
Speaker 4: In a push to provide an alternative to in video elsewhere,
21:18
Speaker 4: shares an USA Rare Earth, rallying eleven percent after the
21:22
Speaker 4: Critical Minerals startup announced that the Department of Cormerce will
21:27
Speaker 4: take an equity stake as part of a funding deal.
21:30
Speaker 4: And tomorrow morning, ahead of the opening bell, we'll see
21:33
Speaker 4: more earnings from United Health, RTX, Boeing, Ups, Union Pacific,
21:39
Speaker 4: North Fork, Grumman, and General Motors. I'm Tucker Silvan. That
21:43
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21:45
Speaker 4: asked you the trivia question what number super Bowl did
21:49
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21:54
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21:58
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22:01
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22:09
Speaker 2: Peace in barons today, long to stop working. Retiring early
22:14
Speaker 2: can create its own stresses, Mike, what do those stresses
22:17
Speaker 2: happen to be?
22:18
Speaker 5: Well, one guy retired at thirty four, so I can
22:21
Speaker 5: imagine all that would be stressful.
22:22
Speaker 3: That is early.
22:24
Speaker 5: I think that's a little bit out of out of
22:26
Speaker 5: the normal observation. So I'm going to start off with
22:30
Speaker 5: maybe somebody retiring in their mid to late fifties, would
22:34
Speaker 5: you consider that to be still abnormal, but a little
22:37
Speaker 5: bit closer to average?
22:38
Speaker 2: Chuck, Yes, I mean, if you're retiring at thirty four,
22:41
Speaker 2: that's before even your statistically average midpoint life expectancy.
22:45
Speaker 3: So like, man like, that's that's early. It is.
22:49
Speaker 5: Somebody pointed, maybe this article pointed out that the idea
22:53
Speaker 5: of retirement in the first place is a relatively new idea, right,
22:56
Speaker 5: I mean, in the eighteen nineties, I would be I
23:00
Speaker 5: don't know what the average retirement was at that point,
23:03
Speaker 5: but like you didn't spend three decades in retirement. The
23:07
Speaker 5: idea of a three decade retirement is very very new,
23:09
Speaker 5: and I think we're all still sort of adjusting to it.
23:13
Speaker 5: But the idea of retiring early can come with stresses,
23:17
Speaker 5: and we tend to focus on the financial ones. But
23:20
Speaker 5: I'll be the first to tell you there are a
23:21
Speaker 5: lot of other stresses about retirement that people don't fully appreciate,
23:25
Speaker 5: And the biggest one, I think is what do I
23:28
Speaker 5: do with myself when three to four decades of my
23:32
Speaker 5: life have been dedicated to this body of work that
23:36
Speaker 5: I have put together.
23:37
Speaker 2: And even I want to talk about that just in
23:40
Speaker 2: one other context as well, which is I have a
23:44
Speaker 2: buddy of mine who's in his forties and it has
23:47
Speaker 2: done well for himself to the point where he was
23:49
Speaker 2: able to earlier this year not retire for good. But
23:52
Speaker 2: he was like, I want to take you know, a
23:54
Speaker 2: year or so just to be able to, you know,
23:57
Speaker 2: do some stuff. And I was talking to him a
24:00
Speaker 2: couple months ago, after you know, maybe six months or
24:02
Speaker 2: so of this, and even he was like, yeah, I
24:05
Speaker 2: played golf like three or four days a week over
24:08
Speaker 2: the summer, and by the end I was kind of like, Okay,
24:11
Speaker 2: I'm not sure I want to keep just going to
24:13
Speaker 2: the golf course.
24:13
Speaker 5: You know.
24:13
Speaker 2: He's like, I need something more in my life than
24:17
Speaker 2: just that. And so this was someone who was, you know,
24:19
Speaker 2: even in his forties and only planning on taking a
24:22
Speaker 2: year or so off and couldn't even get through that
24:24
Speaker 2: without being like, yeah, there's something missing here.
24:27
Speaker 5: Well, I was gonna say, if you retire in your forties,
24:29
Speaker 5: who precisely do you plan on hanging out with?
24:32
Speaker 3: Not me?
24:32
Speaker 5: What's your social life going to be like well, to
24:35
Speaker 5: be fair, he kept texting me to play golf.
24:36
Speaker 3: He's like, hey man, you fra I'm like, no, I
24:38
Speaker 3: got I gotta work.
24:40
Speaker 5: Beyond the just lifestyle stresses, which I think a lot
24:44
Speaker 5: of people who have retired early have faced. They you know,
24:47
Speaker 5: who am I going to socialize with? Is my spouse
24:49
Speaker 5: done working? Are they able to be done working? What
24:51
Speaker 5: am I going to do to fill my time? And
24:53
Speaker 5: plenty of people have that solved by the time they
24:55
Speaker 5: get to retirement. Don't get me wrong, but it is
24:58
Speaker 5: something you actually have to actively think about and plan out.
25:02
Speaker 5: It is, in most people's cases, not enough to just say, well,
25:06
Speaker 5: I've had a really stressful career and I'm retiring and
25:09
Speaker 5: I'm happy to just sit back and relax. That that
25:12
Speaker 5: usually does not, in my experience, make people terribly happy
25:17
Speaker 5: for a long period of time. Beyond that, the financial
25:20
Speaker 5: stress is that you need to think about for retiring
25:22
Speaker 5: early one, do I have enough money? And specifically do
25:26
Speaker 5: I have enough money assuming that the market does not
25:33
Speaker 5: just produce predictable flat returns every year. Far too often
25:38
Speaker 5: people look at the market and just say, oh, well,
25:41
Speaker 5: it averaged ten percent for the last one hundred years.
25:44
Speaker 5: So that's what I should plan for, and if it
25:47
Speaker 5: does so, I'm fine. That's not actually what has happened
25:50
Speaker 5: over the last ten years. What you have to factor
25:52
Speaker 5: in is something called sequence of returns risk. And to
25:54
Speaker 5: make a long story short, if that sequence of return
25:57
Speaker 5: that averages ten percent gives you negative twenty percent for
26:01
Speaker 5: the first two years of your retirement, then good luck. Two,
26:06
Speaker 5: How am I going to handle the likely income and
26:10
Speaker 5: expense gap that I get hit with for those first
26:14
Speaker 5: few years of retirement. So most people know, not eligible
26:18
Speaker 5: for Medicare until sixty five, not eligible for Social Security
26:21
Speaker 5: until sixty two. If I am retiring early before sixty five,
26:26
Speaker 5: I at least need to figure out the health insurance gap,
26:29
Speaker 5: and I might need to figure out the income gap
26:31
Speaker 5: as well. So how am I going to do that?
26:33
Speaker 5: And specifically which buckets of money are going to be
26:36
Speaker 5: there to support me during this high expense, low income
26:39
Speaker 5: period of time. Is there anything else on your list
26:42
Speaker 5: that's kind of a stressor of retiring early that needs
26:45
Speaker 5: some planning.
26:46
Speaker 3: No, I think we've gone through kind of the big
26:48
Speaker 3: high impact ones.
26:50
Speaker 5: There are a lot of complexities here. Obviously, your retirement
26:52
Speaker 5: accounts have very specific and strict rules around when you're
26:55
Speaker 5: even allowed to use them in the first place, and
26:58
Speaker 5: then a whole bunch of exceptions you can take advantage
27:00
Speaker 5: of if you really do some planning. But planning is
27:04
Speaker 5: the key word here. If you are thinking about retiring early,
27:08
Speaker 5: I urge you to spend time with a professional planning
27:13
Speaker 5: out how that is going to work and the risks
27:15
Speaker 5: to it not working. The number for the Armstrong Advisory
27:17
Speaker 5: Group is eight hundred three nine three for zero zero one.
27:21
Speaker 5: You can check us out at Armstrong advisory dot com.
27:24
Speaker 5: Schedule time for us to call you back if you're
27:25
Speaker 5: out snowblowing the driveway right now. But the number again
27:29
Speaker 5: eight hundred three nine three for zero zero one.
27:32
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:34
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:37
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
27:40
Speaker 1: your own financial tax into state planning advisors before making
27:43
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27:46
Speaker 1: advisory services.
27:48
Speaker 2: Let's see how Americans are using AI at work, according
27:52
Speaker 2: to a new Gallop poll. First, let's talk a little
27:56
Speaker 2: bit just about how often workers are using AI forty
28:00
Speaker 2: six percent as of Q four, So they are now
28:03
Speaker 2: using AI a few times a year or more.
28:06
Speaker 3: Not relevant.
28:07
Speaker 2: I don't think that really counts as using AI at work.
28:09
Speaker 2: I'm sorry, a few times a week or more. Cocks
28:12
Speaker 2: in at twenty six percent. That is up from nineteen
28:16
Speaker 2: percent in Q two and eleven percent in twenty twenty
28:20
Speaker 2: three Q two.
28:21
Speaker 3: So about a quarter.
28:22
Speaker 2: Of Americans saying yeah, I'm using it at least a
28:24
Speaker 2: few times a week at work. Twelve percent saying they're
28:27
Speaker 2: using it daily. That's up from four percent two and
28:30
Speaker 2: a half years ago. Where I get to just in
28:33
Speaker 2: terms of the frequency, and this is you know, again
28:37
Speaker 2: shown out in another stat which is it's tech workers
28:40
Speaker 2: buy and large that are using this stuff most heavily.
28:43
Speaker 2: And this is why when whenever I read these pieces
28:47
Speaker 2: on you know, some substack somewhere, you know some you know,
28:50
Speaker 2: Twitter feed or this and that about like, oh, like
28:53
Speaker 2: you don't understand what just happened with this new release
28:55
Speaker 2: of this product, Guys, most Americans are not.
29:02
Speaker 3: I'm just sorry.
29:03
Speaker 2: Like the guy who makes his living painting is not
29:08
Speaker 2: going to have his job impacted by AI the same
29:11
Speaker 2: way that you are. The guy that makes his living
29:15
Speaker 2: bagging groceries is not going to have his job impacted
29:18
Speaker 2: by AI.
29:19
Speaker 3: The same way that you are.
29:21
Speaker 2: And the hubris of like, oh this changed everything, and
29:25
Speaker 2: like no, one's like no, Like I'm sorry, but the
29:29
Speaker 2: tech people that are just convinced that like this is
29:31
Speaker 2: going to apply to everything are really kind of bothering
29:34
Speaker 2: me in the last month or two.
29:35
Speaker 5: Quite honestly, Well, that's a perfect segue into this next
29:38
Speaker 5: piece about why people still.
29:40
Speaker 3: Matter in the AI era.
29:41
Speaker 5: And oh, I don't know who at the Financial Times
29:44
Speaker 5: thought this was the right time to write this piece,
29:46
Speaker 5: but quite honestly, the reason that people still matter in
29:49
Speaker 5: the AI era is because AI has yet to do
29:52
Speaker 5: all that much stuff that's genuinely impressive at removing human
29:57
Speaker 5: beings from the process. Like, like you said, a lot
30:00
Speaker 5: of really impressive stuff encoding, And I don't mean to
30:02
Speaker 5: minimize any of that, but when I look around at
30:04
Speaker 5: the stuff that AI is pretty good at, it's.
30:07
Speaker 3: About editing an email.
30:09
Speaker 5: For me, what part of that process removes the human
30:13
Speaker 5: being from it?
30:15
Speaker 3: The other thing?
30:16
Speaker 2: And it's just an interesting thing that I picked up
30:20
Speaker 2: kind of in looking at this when we talk about
30:24
Speaker 2: like what when we talk about what AI can do
30:27
Speaker 2: and like the things that like the average person like
30:29
Speaker 2: use it for. It's like make me a picture of
30:31
Speaker 2: a penguin, Bob's letting Er edit this email for me,
30:34
Speaker 2: or do this, like do something creative.
30:38
Speaker 3: What I find kind of wild is haven't we.
30:40
Speaker 2: Spent the last twenty years telling people, Hey, you need
30:44
Speaker 2: to work more in like hard sciences like math, engineering, physics,
30:49
Speaker 2: like you got to get into STEM because that's what
30:51
Speaker 2: the future is. And now the stuff that we're using
30:54
Speaker 2: AI tools for the most is the humanities, and it's
30:59
Speaker 2: not really doing the particularly well either. Like again, it's
31:02
Speaker 2: it's not something where you look at it and have
31:05
Speaker 2: you ever seen a great AI work of art?
31:09
Speaker 5: I'm not sure i'd be the best judge of a
31:11
Speaker 5: human made work of art.
31:12
Speaker 2: So in any case, it's you know, we've spent all
31:16
Speaker 2: this time being like, no, you got to get into
31:18
Speaker 2: like STEM, do this and do that.
31:19
Speaker 3: That's the future.
31:20
Speaker 2: And now we're trying to make AI do the humanities
31:22
Speaker 2: and it's just not great at it.
31:24
Speaker 3: Which I find kind of interesting.
31:25
Speaker 2: Yeah, but just like something that I picked up there,
31:30
Speaker 2: let's take a quick break.
31:31
Speaker 3: When we come back We've got stack Roulette after this.
31:35
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32:53
Speaker 3: Mike, what do you got for stack roulettes a piece from?
32:57
Speaker 3: Is this CNBC?
32:59
Speaker 5: CNBC The US States where you can hire at sixty
33:01
Speaker 5: five with less than a million dollars in savings where
33:06
Speaker 5: guess what? This article tells you nothing about yourself, your
33:10
Speaker 5: own spending patterns. The only thing it does is list
33:12
Speaker 5: out the cheapest states in the country to live in
33:14
Speaker 5: by cost of living. So if you find that to
33:16
Speaker 5: be useful, then you don't need to read this article.
33:18
Speaker 5: You can just Google show me the cheapest states in
33:22
Speaker 5: the country to live in, because it is the same thing,
33:25
Speaker 5: and it goes through this not thoughtful exercise about well,
33:30
Speaker 5: if you have this much money and you pull out
33:32
Speaker 5: four percent a year, then this is how much you
33:34
Speaker 5: need to live in each of these states. Again, not
33:38
Speaker 5: terribly helpful, and also, by the way, not an exercise
33:40
Speaker 5: that ninety nine percent of Americans are going to take
33:43
Speaker 5: part in. So nobody goes and chooses, Hey, I'm going
33:48
Speaker 5: to move to Arkansas, specifically because I can do so
33:51
Speaker 5: according to CNBC on eight hundred and ten, five hundred
33:54
Speaker 5: and thirty eight dollars.
33:57
Speaker 2: And furthermore, like, I know people who live in Massachusetts
34:02
Speaker 2: that are retired with way smaller portfolios than a million dollars.
34:09
Speaker 2: I know people that live in low cost of living areas,
34:12
Speaker 2: not Arkansas, but like I know people that live in
34:17
Speaker 2: I know one person who lives in Mississippi, which is
34:19
Speaker 2: about as low costs as you can get. They've got
34:22
Speaker 2: boatloads of money. They can't retire because they spend boatloads
34:25
Speaker 2: of money. So like, yeah, this is personal finances.
34:30
Speaker 3: Personal.
34:31
Speaker 2: Yes, this is a poor exercise that doesn't get at
34:35
Speaker 2: any of that nuance and instead tries to convince you, Oh,
34:40
Speaker 2: if only I move there, I'll be able to retire.
34:43
Speaker 2: That's not usually how it ends up working. Let's see,
34:46
Speaker 2: I want to talk about this piece from Barons. Meme
34:48
Speaker 2: Stocks turned five, which this is the five year anniversary
34:50
Speaker 2: of Game Stop going all Meme.
34:53
Speaker 3: Will there ever be another Game Stop?
34:56
Speaker 2: The answer is yes, there's always You know another place
34:59
Speaker 2: that gets nutty right now?
35:00
Speaker 3: It happens to be silver.
35:02
Speaker 2: You know you could go and look back last year
35:04
Speaker 2: at some things that happened with like speculative nuclear power
35:08
Speaker 2: stocks and things like that. That there's always stuff that captures,
35:12
Speaker 2: you know, the the meming public attention these days, and
35:18
Speaker 2: I think that yes, Game Stop was kind of the
35:20
Speaker 2: first to break down those doors in a very specific way.
35:24
Speaker 3: But ultimately there is a.
35:28
Speaker 2: You can make a case like an even bigger community
35:31
Speaker 2: that is now focused on this type of stuff now
35:34
Speaker 2: than there was at that point. Will you ever have
35:36
Speaker 2: something unfolds in the exact same way, Well, no.
35:40
Speaker 5: You're not gonna have some twenty eight year old guy
35:43
Speaker 5: going by Roaring Kiddy posting anonymous videos about it either,
35:46
Speaker 5: But that's kind of the nature of the universe, correct,
35:49
Speaker 5: But yeah, like that, there still are meme stocks and
35:52
Speaker 5: meme securities, and this is absolutely part of the investing
35:57
Speaker 5: landscape right now. And to anyone who's like, you know,
36:02
Speaker 5: kind of stodge you'd saying, oh, like this will never work,
36:04
Speaker 5: guys like there, this is part of the investing landscape now.
36:08
Speaker 2: They're not going away. It's you can't just be like
36:11
Speaker 2: you're doing it wrong. There is no wrong as long
36:15
Speaker 2: as they're making money in markets, which they seem to
36:18
Speaker 2: be with their recent silver thing.
36:19
Speaker 3: Yeah, so fair.
36:21
Speaker 2: Again, who knows at what point you actually buy and sell.
36:24
Speaker 2: But again, a lot of the available data on twenty
36:28
Speaker 2: twenty five trading by retail investors is that retail kind
36:32
Speaker 2: of smoked institutional last year. So you know, if it's tootion,
36:37
Speaker 2: investors are listening and they're like, oh, they can't do
36:39
Speaker 2: what I do. No, but they're not trying to either. Sure,
36:43
Speaker 2: they're trying to do something entirely different. They're playing a
36:45
Speaker 2: different game in the same sandbox. That's fine, it's a
36:49
Speaker 2: big sandbox.
36:50
Speaker 3: Uh.
36:50
Speaker 5: The NFL's fiercest rivalry is sports betting versus prediction markets,
36:54
Speaker 5: to which other good. Well, that is a very boring
36:57
Speaker 5: rivalry that most people don't really draw distinction between. But
37:01
Speaker 5: obviously sports gambling has picked up substantially. And I am
37:05
Speaker 5: on the outside looking into this one. I do not
37:07
Speaker 5: gamble on sports. I don't really gamble at all. But
37:11
Speaker 5: I have been wondering a lot if this is more
37:15
Speaker 5: of a fad that's burning right now and eventually tapers
37:19
Speaker 5: off like you saw with memestock craze and you know
37:23
Speaker 5: some of the things that we saw back in twenty
37:25
Speaker 5: twenty one, or if this is different and more akin
37:28
Speaker 5: to an addiction that unregulated will continue to grow.
37:33
Speaker 3: I'm on, I don't have the opinion.
37:36
Speaker 5: Yeah, I know, I know you tend to be, and
37:38
Speaker 5: I am definitely not terrified that that's the case.
37:41
Speaker 4: It's definitely not a fad like this has been around
37:43
Speaker 4: for decades.
37:44
Speaker 5: Yeah, I mean sports gambling as in general has been
37:47
Speaker 5: around for decades. But it does seem particular poignant, particularly
37:53
Speaker 5: poignant right now, and particularly obsessive right now. And I
37:57
Speaker 5: can't imagine it continues to grow at a fast mainly
38:01
Speaker 5: because people are losing boatloads and money on us.
38:03
Speaker 2: Yeah, the pace of growth is slowing, just because I
38:06
Speaker 2: think there's only so big of a market you can tap.
38:09
Speaker 2: But I think there still is room for innovation, I think,
38:14
Speaker 2: is how they'll phrase it. Let's take a quick break
38:16
Speaker 2: for the next twenty four hours. Hope everyone continues to
38:19
Speaker 2: dig out of the storm. We'll see you tomorrow on
38:22
Speaker 2: the Financial Exchange