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Why is Trump and Musk shutting down the spending bill? · The Financial Exchange Show

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  Speaker 2: Our two of the Financial Exchange here and Chuck Mike
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  Speaker 2: Kentucker with you. And after the dumpster explosion of yesterday
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  Speaker 2: on in all equity markets and well most of the
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  Speaker 2: bond markets and some of the commodity markets too, we've
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  Speaker 2: got a little bit of a relief rally taking place
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  Speaker 2: in equities, but it is Wee Picano, very very modest.
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  Speaker 2: The Dow was up ninety nine points, fell about eleven
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  Speaker 2: hundred yesterday. S and P's up fourteen, fell one hundred
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  Speaker 2: and seventy eight yesterday. Nasdaq is up fifty eight. Don't
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  Speaker 2: know how many it failure today, but it was a lot.
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  Speaker 3: So it's you're.
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  Speaker 2: Basically seeing like calling back somewhere between seven and ten
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  Speaker 2: percent of the gains on the major usncs. The Russell
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  Speaker 2: two thousand is flat, so it is clawing back no
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  Speaker 2: games as calling back no gains. Long term bonds US
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  Speaker 2: ten year Treasury off another six basis points to four
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  Speaker 2: point five five eight percent. And when we take a
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  Speaker 2: look at oil, it is down thirty cents a barrel
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  Speaker 2: to seventy dollars and forty five cents on West Texas
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  Speaker 2: Intermediate triple A national averageur gas prices up one point
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  Speaker 2: one cents to three oh four and five tenths is
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  Speaker 2: largely due to some price cycling taking place in Michigan, Ohio,
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  Speaker 2: and Indiana right now. And then we've got gold today
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  Speaker 2: down forty nine dollars and eighty cents, downs to twenty
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  Speaker 2: six oh three and fifty cents. Mike, anything catching your
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  Speaker 2: eye this morning in markets?
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  Speaker 4: No, pretty quiet after like you called it, the what
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  Speaker 4: do we say dumplosion, the dump splosion, dumplosion.
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  Speaker 2: Yeah, the dump splosion is uh what we're gonna call
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  Speaker 2: this cause you get some alliteration to it. Happened in December,
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  Speaker 2: the December dumps splosion of twenty twenty four. Yeah, I
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  Speaker 2: will always remember it. Let's talk a little bit about
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  Speaker 2: this piece in Bloomberg. It's talking about the fact that
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  Speaker 2: if the US government does not have a funding bill
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  Speaker 2: by tomorrow, there will be a government shutdown.
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  Speaker 3: Yep, and that it shouldn't.
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  Speaker 4: Trump and Musk have threatened well to actively run candidates
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  Speaker 4: against any Republicans that vote for this spending deal.
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  Speaker 3: And so I have no idea how this results. I
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  Speaker 3: so here, here's the thing.
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  Speaker 4: It was gonna be relying on a lot of Democrats'
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  Speaker 4: votes in the first place. And if they're now saying
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  Speaker 4: they're not going to bring it to the floor, then yeah,
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  Speaker 4: I'm not sure what's going to happen here.
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  Speaker 2: Yeah, this is one where you know, generally I pretty
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  Speaker 2: much always on the dead ceiling, I always put poot
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  Speaker 2: and I'm like, no, they're going to figure something out
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  Speaker 2: because they like legally have to. And this is part
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  Speaker 2: of the reason why I think the dead ceiling stupid.
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  Speaker 2: This is not the debt ceiling, though, this is the budget.
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  Speaker 2: And here's the thing, in terms of where things sit
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  Speaker 2: right now, Congress only has four hundred and thirty people
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  Speaker 2: in it at the moment. It's supposed to have four
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  Speaker 2: hundred and thirty five, but for various different reasons, it
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  Speaker 2: doesn't at the moment. And so what you've got is
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  Speaker 2: a situation where Republicans have two hundred and nineteen votes,
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  Speaker 2: Democrats have two hundred and eleven. So in order four
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  Speaker 2: Republicans to be able to pass something, they can only
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  Speaker 2: lose four people, which is kind of tough because even
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  Speaker 2: within parties there are different you know, divisions and different
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  Speaker 2: priorities and things along these lines. So I think where
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  Speaker 2: we are ultimately heading, especially given that Elon Musk all
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  Speaker 2: throughout the last day or so has been tweeting about that.
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  Speaker 2: They're posting about this basically saying, look, the House should
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  Speaker 2: not pass any bills until January twentieth. We want to
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  Speaker 2: shut down the government, which is generally not something you
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  Speaker 2: want to admit, right general you want to avoid the
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  Speaker 2: blame for doing so. And so I'm I'm I'm trying
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  Speaker 2: to figure out a few different things on this because
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  Speaker 2: Must obviously seems to have the ear of the incoming president,
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  Speaker 2: and so there's a few things that I'm trying to
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  Speaker 2: unpack on this.
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  Speaker 3: The first is what's the actual strategy here?
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  Speaker 2: And one that I got to that's that's kind of
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  Speaker 2: dark quite honestly, is Okay, Elon has been like pretty
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  Speaker 2: outspoken about, Hey, I want to like really aggressively cut
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  Speaker 2: headcount at in the federal government. Right what if one
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  Speaker 2: of the strategies is, hey, just shut down the government
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  Speaker 2: and remember government employees in those affected areas don't get
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  Speaker 2: paid during that time period if they are, get them
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  Speaker 2: to quit, get it, like can you force them to
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  Speaker 2: quit by having it shut down long enough that they
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  Speaker 2: need to take another job. I'm not saying it's pretty
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  Speaker 2: and it's like generally kind of awful and dehumanizing. Like
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  Speaker 2: imagine if like that was your job, because like, there
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  Speaker 2: are normal people that work in the government. It's not
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  Speaker 2: a bunch of evil aliens that are out there like
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  Speaker 2: you know, saying, oh, like you know, we're just trying to.
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  Speaker 3: Screw everyone over.
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  Speaker 2: Like these are people, I know, people work in like
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  Speaker 2: the National Park Service, right that are gonna get like
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  Speaker 2: furloughed if this happens and they have no money over Christmas.
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  Speaker 4: There are others who will be forced to work and
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  Speaker 4: won't get paid, like TSA agents.
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  Speaker 2: Correct, Like imagine if someone said, hey, you got to
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  Speaker 2: come into work, but you're not gonna collect a paycheck.
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  Speaker 4: Yeah, so okay, Like, yeah, I don't disagree that the
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  Speaker 4: strategy may just be shut it down, shut it down,
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  Speaker 4: blow it up, all right. There's been a lot of
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  Speaker 4: talk like that, and so maybe that's what the strategy
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  Speaker 4: genuinely is, in which case you're looking at what a
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  Speaker 4: four week, three week, yeah, four week government shutdown? If
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  Speaker 4: that truly is the strategy, which again, I have my
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  Speaker 4: doubts because time and time again the shutdowns have led
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  Speaker 4: to just deep, deep dissatisfaction with governing parties.
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  Speaker 2: Sure, and remember the one hundred and eighteenth Congress, which
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  Speaker 2: is what we have right now. It expires on January second,
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  Speaker 2: or sorry, January third, Okay, So then the one hundred
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  Speaker 2: and nineteenth Congress takes over, which has Republican majorities in
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  Speaker 2: both the House of Representatives and the Senate. So you
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  Speaker 2: sit there and you're like, so you're just gonna sit
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  Speaker 2: there for two and a half weeks with majorities in
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  Speaker 2: both the House and Senate and say yeah, like we're
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  Speaker 2: good with this, Like it's kind of a while to
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  Speaker 2: do that, and again like it's also right around the holidays,
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  Speaker 2: kind of a not great time to stop paying people.
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  Speaker 4: We will see, I mean, there are several Republican lawmakers
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  Speaker 4: who are making a pretty big stink about this because
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  Speaker 4: remember one of the big things that's in this spending
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  Speaker 4: bill is disaster relief, right right, like the Southeast that
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  Speaker 4: was just struck by two major hurricanes for the deep
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  Speaker 4: for a number of deep red states. So I don't know,
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  Speaker 4: we tend to sometimes overdo this. Maybe it will get
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  Speaker 4: all figured out, but it doesn't. I mean it's closing
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  Speaker 4: in pretty quickly, and this blew it up. Was it
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  Speaker 4: this morning or late last night? I think it was
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  Speaker 4: late last night.
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  Speaker 2: I was yesterday. It was during the day. It was
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  Speaker 2: by like six pm. This was like done in terms
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  Speaker 2: of the bill that was out there. So it raises
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  Speaker 2: some questions I think in terms of, look, is this
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  Speaker 2: how much direction is is Elon Musk giving to Congress effectively?
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  Speaker 2: Because by my account they were over one hundred different
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  Speaker 2: tweets or posts rather that were you know, put out there,
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  Speaker 2: you know, trying to curry favor against the bill that
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  Speaker 2: was out there. Again, the bill's like fifteen hundred pages.
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  Speaker 2: I haven't looked through it. I have no idea if
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  Speaker 2: it's good, bad, or ugly. I just know it was there.
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  Speaker 3: Some of the main complaints from the lawmakers, right, I
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  Speaker 3: have no time to read it.
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  Speaker 2: Yeah, I'm not saying like, hey, this is great and
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  Speaker 2: it should have passed. It's much more okay, where is
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  Speaker 2: this going in terms of how are you going to
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  Speaker 2: be able to pass legislation? Because ultimately, remember one of
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  Speaker 2: the like the two big items that are out there
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  Speaker 2: that Republicans have said that they want to pass next year,
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  Speaker 2: taxes and border You actually have to get bills that
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  Speaker 2: can pass, and those bills can't just be what Elon
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  Speaker 2: Musk wants. I mean, first of all, did anyone vote
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  Speaker 2: for Elon Musk?
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  Speaker 3: No?
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  Speaker 2: No, they voted for their congress people, for their senators,
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  Speaker 2: and so like them, along with the President, end up
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  Speaker 2: making the decision for Hey, here's what we're gonna be
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  Speaker 2: able to pass, and here's how we're gonna do this,
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  Speaker 2: and here's how it's going to end up going. But
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  Speaker 2: with a razor thin majority in the House, you kind
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  Speaker 2: of look at this and you go, these are not
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  Speaker 2: like slam dunks to be able to pass easily in
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  Speaker 2: the first like few weeks.
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  Speaker 3: Am I wrong on this kind of it'll be intriguing.
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  Speaker 4: You know, I won't stream catastrophe until we actually see
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  Speaker 4: a government shutdown. But yeah, it looks like burn it
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  Speaker 4: down and start over, which is not usually a successful strategy.
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  Speaker 2: I would be I would be very surprised if there's
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  Speaker 2: not a shutdown as far as you know how long
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  Speaker 2: it lasts, and then you know how how you actually
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  Speaker 2: see legislation able to pass next year. I'm keeping an
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  Speaker 2: open mind, but I'm just saying, like, things are tight
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  Speaker 2: as it is, and you've got an awful lot of
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  Speaker 2: Republicans in competitive districts. You know, think about you know,
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  Speaker 2: a guy like Mike Waller in New York, just as
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  Speaker 2: an example, who wants the salt cap to be repealed, yeap,
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  Speaker 2: How like, how do you get him on board because
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  Speaker 2: he needs to be able to bring something to his
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  Speaker 2: constituents and say, yes, this is what I did for you.
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  Speaker 2: But obviously repealing the salt cap is not great from
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  Speaker 2: a fiscal perspective. It like, these are the things that
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  Speaker 2: you try to sort out as far as hey, what
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  Speaker 2: policy are we actually going to get? And this is
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  Speaker 2: why I think there's a lot of policy uncertainty next
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  Speaker 2: year in terms of how things actually end up passing.
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  Speaker 2: I'm not saying they will or won't. I'm just saying, hey,
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  Speaker 2: this is different from the first Trump term where there
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  Speaker 2: was a Republican majority of two hundred and forty in
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  Speaker 2: the House and so you had more room to more
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  Speaker 2: wiggle room you could you could lose more members without
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  Speaker 2: having to worry about it. So from a policy perspective,
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  Speaker 2: this is what interests me is, Hey, how is this
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  Speaker 2: going to play out in terms of what you can
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  Speaker 2: and can't pass, And I think we're just gonna have
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  Speaker 2: to see how it goes because I can see a
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  Speaker 2: path where it's okay, everyone gets in line like quickly
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  Speaker 2: and sure that happens. But I can also see a
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  Speaker 2: path where it's like, now, this gets kind of ugly
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  Speaker 2: and might take a little bit of time, So we'll
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  Speaker 2: have to see how it goes.
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  Speaker 3: Here quick break.
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  Speaker 2: When we come back, let's do some trivia and then
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  Speaker 2: do we want to I love this story from CNBC
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  Speaker 2: about American homeowners wasting more space than ever before. Can
• 12:16
  Speaker 2: sure we do that one next because it's just not
• 12:18
  Speaker 2: a topic we cover often. But let's do that right
• 12:20
  Speaker 2: after this break and trivia.
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  Speaker 5: Alright, continuing our Christmas trivia questions here on the Financial Exchange.
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  Speaker 5: According to the National Weather Service, the definition of a
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  Speaker 5: question today, when is the last time Boston had a
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  Speaker 3: Once again?
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  Speaker 5: When is the last time Boston had a white Christmas?
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• 13:53
  Speaker 3: Tucker, you got a favorite Christmas Carol? Not really, Mike,
• 13:59
  Speaker 3: what about you dominate the donkey? Oh that one's goofy. Yeah.
• 14:04
  Speaker 3: I'm a big Carol of the Bells fan. I like
• 14:08
  Speaker 3: to do the ding dongs? Got it? Ding? You know
• 14:12
  Speaker 3: it's yeah.
• 14:12
  Speaker 5: Well, I'll let you guys do some requests tomorrow for
• 14:16
  Speaker 5: Christmas music.
• 14:16
  Speaker 3: If you want fantastic name, we're a wait's out here.
• 14:20
  Speaker 5: No we're not.
• 14:22
  Speaker 3: We do Monday. I guess.
• 14:23
  Speaker 4: Yeah, let's go Christmas week. I guess that, and then
• 14:25
  Speaker 4: we have like a one show.
• 14:26
  Speaker 3: Yeah right, No, we're doing it tomorrow, all right.
• 14:28
  Speaker 4: Tomorrowday, Christmas tomorrow and Monday, yeahday.
• 14:32
  Speaker 5: We have festivals tomorrow anyways, So.
• 14:34
  Speaker 3: Okay, Festivus tomorrow. Yeah, I am completely unprepared.
• 14:37
  Speaker 5: Well prepare, Oh you have twenty four hours? Oh goodness,
• 14:41
  Speaker 5: I have eleven thirty five tomorrow.
• 14:42
  Speaker 2: Festivus grievances is in fact that he doesn't have enough
• 14:46
  Speaker 2: time to prepare.
• 14:47
  Speaker 3: Oh, thank you forgiving me.
• 14:48
  Speaker 2: Even though technically, Tucker, we should be doing it on Monday,
• 14:52
  Speaker 2: because Festivus is technically on December twenty third.
• 14:55
  Speaker 3: I believe you won't be here, Chuck.
• 14:57
  Speaker 5: Yeah, but you're not going to be here.
• 14:58
  Speaker 3: I'm here, you are, yeah, Oh I'm not.
• 15:02
  Speaker 5: Yeah, your mic isn't.
• 15:03
  Speaker 4: Oh, but I'm not terribly important when it comes to Festivus.
• 15:06
  Speaker 4: If i'm I don't really celebrate.
• 15:09
  Speaker 3: Well, I guess we'll do tomorrow then, But my main.
• 15:13
  Speaker 4: Do you want to talk about our schedules for the
• 15:14
  Speaker 4: remaining holidays for twenty twenty five?
• 15:16
  Speaker 3: Yeah? What do you doing the week after?
• 15:20
  Speaker 2: Let's talk a little, a little bit about this piece
• 15:21
  Speaker 2: from CNBC. It's titled American homeowners are wasting more space
• 15:25
  Speaker 2: than ever before and this is great data, Like, this
• 15:29
  Speaker 2: is the stuff that I love to see. Last year,
• 15:33
  Speaker 2: according to Census data, the number of extra bedrooms in
• 15:37
  Speaker 2: a house, defined as a bedroom in excess of the
• 15:39
  Speaker 2: number of people in the home and even including one
• 15:42
  Speaker 2: for an office, has reached thirty one point nine million.
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  Speaker 3: So wow.
• 15:50
  Speaker 2: Again, Let's say, just to make this clear, if you
• 15:53
  Speaker 2: have two people in your household and an office, and
• 15:57
  Speaker 2: like you have three bedrooms and one of them is
• 15:59
  Speaker 2: being used that way, you don't have an extra bedroom technically, okay,
• 16:03
  Speaker 2: So like, just if you're trying to mentally wrap your
• 16:05
  Speaker 2: head around this, they account for one office and one
• 16:08
  Speaker 2: bedroom per person.
• 16:09
  Speaker 3: But thirty one point nine million. To put this in.
• 16:12
  Speaker 4: Perspective, what about I'm confused about this? So I have
• 16:16
  Speaker 4: six bedroom Sorry, no, I have yeah? Uh five bedrooms
• 16:22
  Speaker 4: in my house, yes, and there's six of us living there.
• 16:25
  Speaker 3: Oh, do you get like a bedroom credit? Right? Yeah?
• 16:27
  Speaker 3: Am I a negative? No? No, you don't get a
• 16:30
  Speaker 3: bedroom credit.
• 16:30
  Speaker 4: I do because obviously my wife and I share one,
• 16:32
  Speaker 4: and then my kids also share one, so we still
• 16:34
  Speaker 4: have an extra bedroom by my account, but I'm guessing
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  Speaker 4: I'm not taking into account in these numbers.
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  Speaker 3: Let's move along.
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  Speaker 2: It's the census. They're not getting into who sleeps where. Yeah,
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  Speaker 2: that's fair.
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  Speaker 3: The big thing.
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  Speaker 2: Back in nineteen eighty there were just seven million extra bedrooms,
• 16:47
  Speaker 2: so we and this is one of the things that's
• 16:50
  Speaker 2: fascinating about the housing market.
• 16:52
  Speaker 3: It's a lot of capacity.
• 16:54
  Speaker 2: One of the biggest reasons why prices are going up
• 16:57
  Speaker 2: is that we are just demanding more space than before. Yep,
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  Speaker 2: and largely it takes the form of extra bedrooms.
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  Speaker 3: Yep.
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  Speaker 4: There's a big upswing during COVID obviously, but you know, honestly,
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  Speaker 4: the trend before that was for smaller houses, and we've
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  Speaker 4: we've seen a bit of a retrenchment there. But a
• 17:14
  Speaker 4: similar story that I brought up I think last week, Chuck,
• 17:17
  Speaker 4: was that Zillow estimates that there are now nearly twenty
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  Speaker 4: one million empty nester households. So they defined that one
• 17:24
  Speaker 4: as homes with at least two empty bedrooms, no kids,
• 17:27
  Speaker 4: and that have been owned and occupied for more than
• 17:30
  Speaker 4: a decade only by people over fifty five. So if
• 17:33
  Speaker 4: you just identify fifty five plus empty nesters twenty one
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  Speaker 4: million where they're sitting on you know, extra empty bedrooms here.
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  Speaker 3: Most of it's there right like that. That'st majority of
• 17:44
  Speaker 3: us right there.
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  Speaker 2: And that's not surprising because Mike, how often do you
• 17:48
  Speaker 2: sit down with someone who you know fits that demographic
• 17:52
  Speaker 2: and you're like, hey, have you thought about downsizing? And
• 17:56
  Speaker 2: they go, We've thought about it, but we looked at
• 17:58
  Speaker 2: the prices of downsize and it would be about the
• 18:00
  Speaker 2: same cost.
• 18:01
  Speaker 3: So we're gonna stay where we are instead. Yeah.
• 18:03
  Speaker 4: Now, I'll make an argument here that that's not the
• 18:06
  Speaker 4: best way to think about it because what I oftentimes
• 18:09
  Speaker 4: then see is the costs for their ownership of that
• 18:12
  Speaker 4: home ballooning over the decades because they can't mow the
• 18:16
  Speaker 4: lawn anymore, they can't do the snow anymore, the house
• 18:19
  Speaker 4: falls into disrepair, and you've got to heat those rooms,
• 18:22
  Speaker 4: You've got to heat the you know, unless you've got
• 18:24
  Speaker 4: a highly advanced heating system, you have to heat the
• 18:27
  Speaker 4: entire house. And so the carrying costs for a home
• 18:31
  Speaker 4: I think are very frequently overlooked, but they're not wrong.
• 18:35
  Speaker 4: That like moving from a home built in the nineteen sixties,
• 18:38
  Speaker 4: a single family home, to a you know, a nice
• 18:44
  Speaker 4: new condo built in the next last ten years doesn't
• 18:47
  Speaker 4: save you a lot of money and kind of speaks
• 18:49
  Speaker 4: to what we are focusing on building right now. Yeah,
• 18:52
  Speaker 4: and if you want to find the two bedroom home
• 18:54
  Speaker 4: ranch that was built in nineteen eighty, it doesn't exist.
• 18:57
  Speaker 2: Except in Framingham, Massachusetts, where they're about five thousand of them.
• 19:01
  Speaker 4: Right Well, if you're not looking to move to Framingham,
• 19:03
  Speaker 4: then you're so well if you will.
• 19:05
  Speaker 2: It's it's literally, I think it's the entire forget if
• 19:07
  Speaker 2: it's the north of the south side of town, but
• 19:09
  Speaker 2: it's like they were all developed by this guy Campinelli,
• 19:12
  Speaker 2: and it's literally just Campinelli ranches as far as the
• 19:14
  Speaker 2: I can see, most of which now, by the way,
• 19:16
  Speaker 2: have been modified to have second floors on them because
• 19:18
  Speaker 2: people are like, no, we need more space. So it's
• 19:21
  Speaker 2: created this problem as well, which is just fascinating because
• 19:24
  Speaker 2: even when people bought small houses, they just wanted bigger,
• 19:27
  Speaker 2: bigger ones. Just take a quick break here. When we
• 19:30
  Speaker 2: come back, we've got the trivia answer and then we'll
• 19:34
  Speaker 2: talk a little bit more about the Macy's accounting scandal
• 19:37
  Speaker 2: after this.
• 19:42
  Speaker 1: Bringing the latest financial news straight to your radio every day.
• 19:47
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
• 19:53
  Speaker 1: Text us six one seven three six two one three
• 19:56
  Speaker 1: eight five with your comments and questions about today's show.
• 19:59
  Speaker 1: This is the Financial Exchange Radio Network.
• 20:09
  Speaker 3: All right.
• 20:10
  Speaker 5: Trivia question today was when is the last time Boston
• 20:13
  Speaker 5: had a white Christmas? It'll be two thousand and nine.
• 20:17
  Speaker 5: Back in twenty seventeen, Boston did get two point four
• 20:21
  Speaker 5: inches of snow on Christmas, but it was after that
• 20:24
  Speaker 5: seven am mark, which the National Weather Service declared to
• 20:28
  Speaker 5: be a white Christmas has to be seven am or
• 20:31
  Speaker 5: before seven am. Michael from Wallfan Mass is our winner
• 20:34
  Speaker 5: today taking on a Financial Exchange Show t shirt, and
• 20:37
  Speaker 5: we played trivia every day here on the Financial Exchange.
• 20:41
  Speaker 5: See complete contest rules at Financial Exchange Show dot com.
• 20:45
  Speaker 2: Mike, So, we got more information about the Macy's accounting scandal.
• 20:52
  Speaker 2: I think it was about a week or so ago. Yeah,
• 20:54
  Speaker 2: and a couple of things that we've sorted through. The
• 20:57
  Speaker 2: first thing is it appears and this is a story
• 21:01
  Speaker 2: that I do buy that hey guy made a mistake
• 21:04
  Speaker 2: a few years back and basically decided just to start
• 21:08
  Speaker 2: covering it up, and it's snowballed into one hundred and
• 21:09
  Speaker 2: fifty one million dollar thing.
• 21:11
  Speaker 3: I can buy that, quite honestly, which can we? Just
• 21:17
  Speaker 3: if there's one lesson in here, it's always cheaper.
• 21:20
  Speaker 4: Like, first of all, everyone makes mistakes and just own
• 21:23
  Speaker 4: it right and be done because someday someone is going
• 21:28
  Speaker 4: to find your stupid mistake. And unless you're planning on
• 21:31
  Speaker 4: like dying between now and then, it's gonna come to
• 21:35
  Speaker 4: the light.
• 21:36
  Speaker 3: Right, it's just just do the right thing on this stuff.
• 21:41
  Speaker 2: It's I know it could be scary, but man, there's
• 21:45
  Speaker 2: a decent chance this guy probably still has his job
• 21:49
  Speaker 2: if he just said, yep, I screwed up.
• 21:51
  Speaker 3: We gotta we gotta.
• 21:52
  Speaker 2: Redo this right, Okay, fine, like that that happens, you know,
• 21:57
  Speaker 2: But again, it is what is at this point the
• 22:01
  Speaker 2: piece that's interesting. So it's one hundred and fifty one
• 22:03
  Speaker 2: million dollars in false bookkeeping entries. Last week they concluded
• 22:08
  Speaker 2: their internal investigation and they said that there was no
• 22:11
  Speaker 2: material impact or need need to restate previously filed financials
• 22:17
  Speaker 2: and so it they basically said, look, this is a
• 22:20
  Speaker 2: minor revision.
• 22:22
  Speaker 3: Now.
• 22:22
  Speaker 2: The the problem on this is that if you look
• 22:27
  Speaker 2: at what they have you know, done basically to you know,
• 22:32
  Speaker 2: previous periods and things like that.
• 22:35
  Speaker 3: They did have.
• 22:36
  Speaker 2: Significant revisions to you know, previous earnings and things along
• 22:40
  Speaker 2: those lines. And so the question is, look, why why
• 22:44
  Speaker 2: are you not having to update anything from this year?
• 22:48
  Speaker 2: But your fiscal twenty twenty three you did because this
• 22:50
  Speaker 2: like what what gives you? You felt the need to
• 22:53
  Speaker 2: restate those, but this year, No, what's happening here?
• 22:57
  Speaker 3: Yeah, it's a it's a little bit of a head scratcher.
• 23:01
  Speaker 3: I have to assume that if you're.
• 23:02
  Speaker 4: Macy's, you have brought in outside accountants to go review
• 23:07
  Speaker 4: what they think about this, because you know, obviously somebody's
• 23:11
  Speaker 4: gonna ask questions and you're probably going to get sued
• 23:13
  Speaker 4: by shareholders over this. Uh So presumably they brought something
• 23:18
  Speaker 4: in to defend all of this. But it does seem again,
• 23:22
  Speaker 4: the entire thing seems just silly but confusing, And.
• 23:26
  Speaker 2: Part of this also just gets it like this accounting
• 23:29
  Speaker 2: world where hey, there's a difference between a revision and
• 23:32
  Speaker 2: a restatement. Yeah, a revision is like a small thing
• 23:34
  Speaker 2: that you're like, oh, okay, where's a restatement is? No,
• 23:37
  Speaker 2: it's something bigger, but I don't know. It's again, there
• 23:40
  Speaker 2: are people that are more well versed in it than
• 23:42
  Speaker 2: I am. But generally, when you say, hey, there was
• 23:45
  Speaker 2: one hundred and fifty one million dollars in accounting issues,
• 23:49
  Speaker 2: that tends to have an impact that you know requires
• 23:52
  Speaker 2: some kind of restatement. But hey, I'm open to other interpretations.
• 23:55
  Speaker 5: I guess the US Virgin Islands are Saint Croix, Saint Tom,
• 24:00
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• 24:02
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• 24:44
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• 24:48
  Speaker 5: and to reserve your trip today. That's visit USVII dot com.
• 24:53
  Speaker 3: Mike.
• 24:53
  Speaker 2: Nike is going through a strategy of trying to unload
• 24:58
  Speaker 2: a whole bunch of inventory into the holidays. They're offering
• 25:02
  Speaker 2: up to thirty percent discounts, ironically enough, at Macy's in
• 25:06
  Speaker 2: New York City, and I guess this is kind of
• 25:10
  Speaker 2: causing a little bit of friction with some of their
• 25:13
  Speaker 2: retail partners because they want retail partners want to be
• 25:18
  Speaker 2: able to maintain pricing pressure, pricing power, and you know,
• 25:21
  Speaker 2: maintain margins. But Nike's like, nope, clear this out cut
• 25:25
  Speaker 2: those prices down.
• 25:26
  Speaker 3: Yeah.
• 25:26
  Speaker 4: How has Nike done recently because they have undergone some
• 25:29
  Speaker 4: pretty significant changes and leadership changes. But remember the brief
• 25:34
  Speaker 4: period of time, I want to say, during COVID when
• 25:37
  Speaker 4: they basically said, Hey, we're just gonna sell everything ourselves. Yeah,
• 25:41
  Speaker 4: we're not gonna sell on Amazon, We're not gonna sell
• 25:43
  Speaker 4: at Macy's, We're not gonna sell anywhere other than at Nike,
• 25:45
  Speaker 4: and guess what happened?
• 25:47
  Speaker 3: They didn't sell anything, is the answer here.
• 25:51
  Speaker 4: Their Stop by the Way is down thirty seven percent
• 25:53
  Speaker 4: over the past year, so I guess fire sale can
• 25:56
  Speaker 4: have multiple.
• 25:57
  Speaker 3: Meetings on this one.
• 25:58
  Speaker 4: But I genuinely look, Nike faces a lot of competition
• 26:04
  Speaker 4: from a lot of these new sneaker startups that everyone
• 26:06
  Speaker 4: is getting hyped about, and there seems to be a
• 26:08
  Speaker 4: new one almost every year. I feel like the last
• 26:11
  Speaker 4: year and a half has been all about on running
• 26:13
  Speaker 4: and what's the one that starts with an S?
• 26:17
  Speaker 3: Not familiar with that one.
• 26:19
  Speaker 4: Okay, But in either case, they're facing new competition and
• 26:22
  Speaker 4: they are not I don't know, they are not standing
• 26:26
  Speaker 4: out in the way that they have. But look, they've
• 26:30
  Speaker 4: got like a fifty year history of reshaping the industry
• 26:34
  Speaker 4: and standing out again, and my bet is that that's
• 26:37
  Speaker 4: where they'll land again.
• 26:38
  Speaker 3: But it's it's been a pretty ugly year. It has been.
• 26:42
  Speaker 2: And here's what's interesting to me is I'm just looking
• 26:46
  Speaker 2: at their long term revenue charts since they became publicly traded,
• 26:49
  Speaker 2: which goes back to nineteen eighty.
• 26:50
  Speaker 3: Four, so we got forty years of that history.
• 26:52
  Speaker 2: Right here and there are from what I can see,
• 26:56
  Speaker 2: And again I'm eyeballing this, but it's it's ballable, I think.
• 27:01
  Speaker 3: Uh huh.
• 27:02
  Speaker 2: Aside from nineteen ninety eight, which was you know, post
• 27:06
  Speaker 2: Asian currency crisis, where remember that was where a lot
• 27:09
  Speaker 2: of the growth was happening.
• 27:10
  Speaker 3: With with Nike.
• 27:10
  Speaker 2: Even then, aside from then the financial crisis and COVID,
• 27:16
  Speaker 2: I don't see any periods where Nike had its sales
• 27:20
  Speaker 2: rolling over. What I do see right now is Nike's
• 27:24
  Speaker 2: trailing twelve month sales are fifty billion dollars. A year
• 27:29
  Speaker 2: ago it was fifty one point five. So their twelve
• 27:33
  Speaker 2: month their full year sales are down three percent. And
• 27:36
  Speaker 2: that's something that basically has never happened aside from either
• 27:40
  Speaker 2: US recessions or recessions and the like their major markets
• 27:43
  Speaker 2: that they were growing into, and that's something that's different.
• 27:48
  Speaker 2: Like it's they've had periods where things have flattened out
• 27:50
  Speaker 2: for a little bit, but that's different from their revenue
• 27:54
  Speaker 2: contracting and so this here. Look, if you're saying, yeah,
• 27:59
  Speaker 2: like we're gonna sell the stuff for cheaper, okay, like
• 28:02
  Speaker 2: that's it now. The problem then is you're devaluing your
• 28:10
  Speaker 2: product in doing so, when you come back with those
• 28:14
  Speaker 2: full prices, right, people gonna be willing to pay them?
• 28:17
  Speaker 3: Are they gonna say no, I'll wait for the next
• 28:18
  Speaker 3: holiday sale.
• 28:19
  Speaker 4: I am trying to find out right now how big
• 28:22
  Speaker 4: of a China problem Nike has as well.
• 28:24
  Speaker 2: Probably large, Like another underappreciated thing, the geopolitical part of it. Right,
• 28:29
  Speaker 2: you know how much of this is Chinese consumer saying Nope,
• 28:34
  Speaker 2: we don't want to buy Nike stuff because it's an
• 28:36
  Speaker 2: American company, right, Or Hey, we're just not buying stuff
• 28:38
  Speaker 2: because our economy is not great.
• 28:40
  Speaker 3: Yeah.
• 28:42
  Speaker 4: In one piece that I'm seeing here, it claims and again, yeah,
• 28:48
  Speaker 4: I'm not going to quote a stat from a source
• 28:51
  Speaker 4: that I don't know. It doesn't look like a huge
• 28:53
  Speaker 4: portion of shoes or manufactured in China most recently. But
• 28:56
  Speaker 4: I'm not sure I'm buying that until I get a
• 28:59
  Speaker 4: better source or he's ownsourcing on it. But you can
• 29:01
  Speaker 4: assume that it's you know, more than ten percent most
• 29:05
  Speaker 4: certainly of products coming from China, probably a fair bit
• 29:08
  Speaker 4: higher than that.
• 29:10
  Speaker 2: Take a quick break when we come back. Stack Roulette.
• 29:15
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• 29:18
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• 29:21
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• 29:24
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• 30:12
  Speaker 3: Mike, where do you want to start on Stack?
• 30:14
  Speaker 2: Actually, do you mind if I take stack Roulette here
• 30:15
  Speaker 2: to kick things off?
• 30:17
  Speaker 3: Sure?
• 30:18
  Speaker 2: Okay, So I want to talk about the fact that
• 30:22
  Speaker 2: these NASA astronauts who went up to space for an
• 30:27
  Speaker 2: eight day trip in June.
• 30:29
  Speaker 4: Homegrown need amite, by the way, one of them, Yep, exactly.
• 30:32
  Speaker 4: There's a school named after around here.
• 30:34
  Speaker 2: There should be another one after this because it's just
• 30:37
  Speaker 2: I mean, they're gonna be up there quite a while.
• 30:39
  Speaker 3: So it looks like Sanita Williams.
• 30:41
  Speaker 2: And very well Moore they're now not going to be
• 30:45
  Speaker 2: able to get back to Earth any earlier than late
• 30:48
  Speaker 2: March instead of February as.
• 30:49
  Speaker 3: They had now planned.
• 30:51
  Speaker 2: It's just taken a little bit longer to refurbish the
• 30:53
  Speaker 2: SpaceX capsule that they are returning in, since the Boeing
• 30:56
  Speaker 2: star Liner that they went up in was deemed dumpster
• 31:00
  Speaker 2: not really you know, suitable for returning to Earth with
• 31:04
  Speaker 2: human beings. Yep, So they're gonna be up there at
• 31:07
  Speaker 2: least nine months now. It looks like, remember they did
• 31:10
  Speaker 2: not go up there with any you know, clothes meant
• 31:13
  Speaker 2: to last longer than eight days, so they've been kind
• 31:15
  Speaker 2: of making do with whatever they can find, is pretty
• 31:19
  Speaker 2: much what it sounds like. They do have plenty of food,
• 31:22
  Speaker 2: you know, they've got a water reclaimer on board, they've
• 31:25
  Speaker 2: got plenty of oxygen, so like they're in no danger
• 31:30
  Speaker 2: of you know, any anything like that. And you do
• 31:33
  Speaker 2: get you know, these resupplies that go up so it's
• 31:35
  Speaker 2: it's not a problem on that front. I don't know
• 31:38
  Speaker 2: why they didn't send some clothes with the food, you know,
• 31:41
  Speaker 2: maybe just I don't know, one new outfit or something
• 31:44
  Speaker 2: like that.
• 31:44
  Speaker 3: Yeah, but look I get that, trust me.
• 31:49
  Speaker 2: I'm someone I would I would love to be in space,
• 31:51
  Speaker 2: but nine months in a row in space is be
• 31:56
  Speaker 2: kind of a long time, you know, it's kind of
• 32:01
  Speaker 2: a long time.
• 32:03
  Speaker 3: So I.
• 32:06
  Speaker 2: Would struggle with that, and I'm sure they're having some
• 32:08
  Speaker 2: tough days, you know as well. The longest human space flight, Mike,
• 32:12
  Speaker 2: do you know what the longest time is that any
• 32:16
  Speaker 2: individual spent in space consecutive?
• 32:18
  Speaker 3: There's gotta be some cosmonaut that's done like two years.
• 32:21
  Speaker 2: It's all Russians. Yeah, it's all Russians in the top
• 32:25
  Speaker 2: six spots. There's two US guys that tie, but it's
• 32:29
  Speaker 2: Valeri Polyakov who spent four hundred and thirty seven days
• 32:35
  Speaker 2: in space in nineteen ninety four and ninety five.
• 32:38
  Speaker 3: Then he got four other Russians.
• 32:40
  Speaker 2: But like, there actually are a total of one, two, three, four, five, six, seven.
• 32:45
  Speaker 2: There's eight human beings who have spent more than a
• 32:47
  Speaker 2: year straight in space, and seven of.
• 32:50
  Speaker 3: Them a Russian. That is some mental toughness. Seven of
• 32:53
  Speaker 3: them are Russian.
• 32:53
  Speaker 2: But this is gonna be like you're creeping up on
• 32:56
  Speaker 2: two hundred and seventy days, So hey, why not just
• 33:01
  Speaker 2: go for the record, right Like, yeah, I don't know,
• 33:04
  Speaker 2: you're I guess no. Ten, one hundred and forty days,
• 33:06
  Speaker 2: like no, get at home. But if they just do
• 33:09
  Speaker 2: another like forty beyond that, they will be in the
• 33:12
  Speaker 2: top ten.
• 33:12
  Speaker 4: Then I want to talk about something that I find
• 33:16
  Speaker 4: like really really cool and fascinating and I don't know
• 33:18
  Speaker 4: if anybody else will.
• 33:19
  Speaker 1: Uh.
• 33:20
  Speaker 4: There is a company called Impulse Labs and they are
• 33:24
  Speaker 4: testing out a new type of technology by putting batteries
• 33:27
  Speaker 4: inside of appliances. This seems weird, why would you do that?
• 33:31
  Speaker 4: But here's what they are able to do. The first
• 33:33
  Speaker 4: thing that they developed was a stovetop. So, Chuck, have
• 33:36
  Speaker 4: you ever cooked on induction?
• 33:38
  Speaker 3: Uh? Yes, I do? Okay, do you currently I have one? Yeah?
• 33:41
  Speaker 3: My house has induction.
• 33:42
  Speaker 4: Okay, so you might be the perfect customer for this eventually.
• 33:45
  Speaker 4: But what they have developed is an induction stovetop. And
• 33:49
  Speaker 4: there's two innovations they've put in here. One is the battery.
• 33:52
  Speaker 4: I'll tell you what the battery does. It allows you
• 33:54
  Speaker 4: to get the type of power into these burners that
• 33:57
  Speaker 4: you cannot get anywhere else. The best gas stoves out
• 34:01
  Speaker 4: there will deliver about eighteen thousand BTUs of energy into
• 34:05
  Speaker 4: a pan. The best induction burners out there, we'll give
• 34:08
  Speaker 4: you twenty eight thousand, five hundred. This will give you
• 34:10
  Speaker 4: seventy two thousand BTUs of heating power. They show this
• 34:14
  Speaker 4: guy boiling liter of water in forty seconds.
• 34:17
  Speaker 3: Why do you need that?
• 34:19
  Speaker 4: So what you need it for is you can preheat
• 34:22
  Speaker 4: the oven in no time at all. You can get
• 34:25
  Speaker 4: a pan up to temperature in no time at all.
• 34:27
  Speaker 4: But the other more interesting I think piece that they've
• 34:30
  Speaker 4: done here is they've put a very high sensitive temperature
• 34:34
  Speaker 4: gage in there, so you can still do high, medium,
• 34:37
  Speaker 4: low on these burners. But what you can also do
• 34:40
  Speaker 4: is set a temperature on a pan to two hundred
• 34:44
  Speaker 4: and twelve degrees if you want to basically cook something
• 34:46
  Speaker 4: at a very specific temperature. So the temperature control on
• 34:49
  Speaker 4: these things is also supposed to be absolutely compelling. But
• 34:53
  Speaker 4: here's forget about stoves for a minute. What this does
• 34:56
  Speaker 4: for you is allows certain appliance. Like think about your dryer, right,
• 35:03
  Speaker 4: Like you only dry clothes so often and you have
• 35:06
  Speaker 4: to have right, but like you're not doing it for
• 35:09
  Speaker 4: twenty four hours a day would be my point. And
• 35:11
  Speaker 4: you have to pay all this money to get the
• 35:13
  Speaker 4: right electrical hookup into that thing. If you can just
• 35:17
  Speaker 4: plug a regular outlet into the wall for your dryer
• 35:20
  Speaker 4: and then have a battery that charges up for every
• 35:23
  Speaker 4: drying cycle, then the electricity work, which is one of
• 35:27
  Speaker 4: the main concerns that utility companies have because they have
• 35:29
  Speaker 4: to suddenly deliver bigger power to your home to power
• 35:32
  Speaker 4: all these appliances and the cars you don't need it.
• 35:36
  Speaker 4: That's the biggest, the biggest cost, This biggest single cost
• 35:38
  Speaker 4: of adding, for instance, EV charging infrastructure into a home
• 35:43
  Speaker 4: is all the all the power testing and all of
• 35:45
  Speaker 4: the wires that you have to actually bring to your
• 35:47
  Speaker 4: garage to do it. Put a EV charger with a
• 35:50
  Speaker 4: battery in there. Boom, You've solved, like one of the
• 35:54
  Speaker 4: more complex problems of energy delivery to a home.
• 35:58
  Speaker 3: It is kind of interesting. I hadn't that way. I
• 36:01
  Speaker 3: hadn't either.
• 36:02
  Speaker 4: First product they're putting out here is the stovetop, but
• 36:05
  Speaker 4: I was, you know, reading about it and listening to
• 36:07
  Speaker 4: a podcast about it. And the goal here is to
• 36:09
  Speaker 4: say no, like this is the future of a number
• 36:12
  Speaker 4: of different products that we can bring to the home
• 36:15
  Speaker 4: while allowing you to basically take advantage of cheap energy
• 36:19
  Speaker 4: from the grid by storing it all in a battery
• 36:21
  Speaker 4: and just using the battery electricity. I will say, you
• 36:24
  Speaker 4: don't need that many bt us in a stove, probably not,
• 36:27
  Speaker 4: probably not. Yeah, maybe maybe a professional kitchen this would
• 36:30
  Speaker 4: be useful, though there's not. There's another company, a competitor
• 36:34
  Speaker 4: company that has a oven stovetop range instead. But I was,
• 36:39
  Speaker 4: I was learning about this one company.
• 36:41
  Speaker 5: It's only six thousand bucks.
• 36:43
  Speaker 4: And it comes with a thirty percent much for what
• 36:45
  Speaker 4: for the stove, for the stovetop, and it comes with
• 36:48
  Speaker 4: a thirty percent tax credit.
• 36:49
  Speaker 3: It's a bargain.
• 36:50
  Speaker 4: Oh so it's uh yeah, golly four grand?
• 36:54
  Speaker 3: Ok Well, I mean what does a new induction stove
• 36:57
  Speaker 3: go for? Like two grand? Yeah? Yeah? Half that? Yeah, okay,
• 37:00
  Speaker 3: so they got a ways to go.
• 37:01
  Speaker 4: But again, the piece that I find really really fascinating
• 37:04
  Speaker 4: here is not the fact that I can heat a
• 37:06
  Speaker 4: pan of technology with seventy two thousand BTUs. But dryers,
• 37:11
  Speaker 4: air conditioners, like all of these things, if you place,
• 37:14
  Speaker 4: if you find the technology to put batteries in them,
• 37:16
  Speaker 4: it kind of changes a lot of the outlook for
• 37:19
  Speaker 4: what utility companies will need to do in the future.
• 37:21
  Speaker 2: The one counter that I that I do have on
• 37:23
  Speaker 2: it is how many recharging cycles do you get out
• 37:26
  Speaker 2: of the battery?
• 37:27
  Speaker 3: Yep, you know, think about like your phone. I'm guessing
• 37:29
  Speaker 3: it's lithium my own batteries, Like your phone.
• 37:31
  Speaker 4: It's not, but it's it's it's in this case, it
• 37:34
  Speaker 4: wasn't a lithium ion. But yeah, I mean, you're still
• 37:36
  Speaker 4: gonna have those issues of Okay, how many how many
• 37:39
  Speaker 4: years am I going to get out of this before
• 37:41
  Speaker 4: I need to replace the battery?
• 37:42
  Speaker 2: Yeah, because it's another thing that you got to replace
• 37:43
  Speaker 2: them on a schedule. But that is actually an interesting
• 37:47
  Speaker 2: concept as far as not needing the heavier duty wiring
• 37:52
  Speaker 2: in those cases. That's that's kind of cool. Take a
• 37:57
  Speaker 2: look at markets. Still a modest recovery happening for me.
• 38:00
  Speaker 2: Stay the Dow up one hundred ninety eight, the S
• 38:01
  Speaker 2: and P up thirty three, NASDAK up one so again
• 38:05
  Speaker 2: not making everything back, but uh hey, baby steps or
• 38:08
  Speaker 2: maybe it's.
• 38:09
  Speaker 3: The uh dead cat bounce. We don't know yet. Too early.
• 38:13
  Speaker 3: Quick break for the rest of the day.
• 38:15
  Speaker 2: We'll finish up the week tomorrow and brace yourselves, ladies
• 38:19
  Speaker 2: and gentlemen. The Festivus for the rest of us is coming.
• 38:22
  Speaker 2: Financial Exchange Festivus.
• 38:25
  Speaker 3: Thank you, thank you. Yes, that's going to be tomorrow
• 38:27
  Speaker 3: on the show