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Wealth inequality is getting worse in the US · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike Armstrong.
1:10
Speaker 2: Chuck, Mike and Tucker with you here on a Friday,
1:14
Speaker 2: as we wrap up the last trading day of January
1:18
Speaker 2: in markets. Obviously they'll be closed tomorrow in observance of Saturday,
1:22
Speaker 2: and so they will be in any case. Big news
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Speaker 2: today The Federal Reserve is going to be getting a
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Speaker 2: new chair in May, and President Trump nominated Kevin Worsh
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Speaker 2: to the position. Worsh had previously served at the Federal
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Speaker 2: Reserve following an appointment from George W. Bush back in
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Speaker 2: two thousand and six. He's been one of three or
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Speaker 2: four candidates to Kevin's and several other people that have
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Speaker 2: been talked about as a potential FED chair over the
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Speaker 2: last year, and this morning President Trump announcing that Worsh
2:00
Speaker 2: indeed is his candidate.
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Speaker 3: Can you say something that being appointed to the Federal
2:04
Speaker 3: Reserve by the President at thirty five is pretty impressive.
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Speaker 3: It is just I'm feeling rather unaccomplished at at you know,
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Speaker 3: at this stage to be you are looking at yeah,
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Speaker 3: look at that and say, yeah, thirty five years old,
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Speaker 3: appointed to the Federal Reserve by the President.
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Speaker 2: Yeah, pretty cool. Could be worse things in life. Yeah,
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Speaker 2: So I don't know what you get on the speaker
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Speaker 2: circuit at that point if you're not you know, the chair.
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Speaker 2: But I would imagine that Wars has done, you know,
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Speaker 2: pretty decently for himself all else, you know, all things considered.
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Speaker 2: So that is the big news today. Confirmation hearing is
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Speaker 2: likely to take place in the coming weeks and months.
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Speaker 2: But Tom Tillis, who does sit on the Senate Banking Committee,
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Speaker 2: has indicated that he will oppose any nomination while the
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Speaker 2: criminal probe into J. Powell is still ongoing. And so
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Speaker 2: we get a little bit of drama there because effectively
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Speaker 2: Tillis has the ability to prevent the nomination from getting
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Speaker 2: out of the Senate Banking Committee for the foreseeable future,
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Speaker 2: if that is indeed the case. So we'll see where
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Speaker 2: things go there. In markets, where things are going today
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Speaker 2: kind of all over the place, really just choppy, messy trading,
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Speaker 2: not ugly, but just like all over the place. Dow
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Speaker 2: is off about three hundred points, about two thirds of
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Speaker 2: a percent, SMP's down twenty four points, about a third
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Speaker 2: of a percent, the Nasdaq composite down about half a
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Speaker 2: percent or one hundred points. So you got equities broadly
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Speaker 2: down being supported by a couple of key names that
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Speaker 2: are still, you know, finding some ways to float today.
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Speaker 2: Tesla up about five percent, broad Come up one and
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Speaker 2: a half, Eli Lilly up half a percent, and Vidia
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Speaker 2: up a third of a percent. So that's kind of
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Speaker 2: keeping the market together today as we look at it.
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Speaker 2: When we take a look at the bond market, a
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Speaker 2: little bit of a sell off there, nothing big but
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Speaker 2: two tensent I'm sorry, two basis points towards the upside
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Speaker 2: up to four point two four seven percent on the
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Speaker 2: ten year treasury. We've got the dollar index rebounding after
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Speaker 2: a few days of selling. It looks like, at least
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Speaker 2: in the short term, dollar trying to find a bottom
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Speaker 2: at ninety six six twenty five. Then we come to
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Speaker 2: precious metals, And honestly, we don't talk about precious metals
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Speaker 2: a lot on this show because I don't really have
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Speaker 2: like that much unique insight about like gold or silver,
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Speaker 2: because it's not my game. I just it's not something
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Speaker 2: I specialize in it, so I don't have much to say.
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Speaker 3: And also they don't usually move by ten plus percent
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Speaker 3: in a single day.
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Speaker 2: I gotta say, what we've seen in silver in particular
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Speaker 2: this week is something that stuff that I've never seen
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Speaker 2: before in my entire life. And again, I haven't been
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Speaker 2: doing this forever, but I've been I've been in this
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Speaker 2: business for almost seventeen years, and I've never seen what
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Speaker 2: I've seen this week in silver. So here's the thing.
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Speaker 2: At the beginning of this week, if you came in
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Speaker 2: on Monday and you saw silver at one hundred and
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Speaker 2: seventeen dollars announced and you said, man, that's that's that's rich.
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Speaker 2: I'm gonna I'm gonna short that and bet against that,
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Speaker 2: you've now seen three twelve percent draw downs. I'm gonna
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Speaker 2: go just through yesterday. Through yesterday, you've seen two twelve
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Speaker 2: percent draw downs on silver and you still were not
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Speaker 2: in the money on that trade because of how quickly
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Speaker 2: it rallied after those. As of today, now you've seen
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Speaker 2: three drawdowns of at least twelve percent this week, and
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Speaker 2: silver is flat from last Friday. It's wild. I have
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Speaker 2: never seen markets moving like this in anything that's not
5:32
Speaker 2: fart coin quite honestly.
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Speaker 3: I Mean, we talked about the volatility and commodities and
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Speaker 3: silver especially and how MEMI it was seeming, and these
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Speaker 3: types of price moves kind of echo that type of mentality.
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Speaker 2: They do. And here's the thing that I also not
5:47
Speaker 2: my original statement. Generally, when things go parabolic to the upside,
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Speaker 2: they don't usually just correct flat and not move from there.
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Speaker 2: You tend to see some volatility as these things unwind.
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Speaker 2: There's so much interest right now that look, this thing
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Speaker 2: still might not be done. Like, I have no idea. Again,
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Speaker 2: this is not my area of expertise, but things just can't.
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Speaker 2: Things can't move up eight percent a day forever. Like
6:15
Speaker 2: it's a good rule of thumb. You know, if you're
6:18
Speaker 2: lucky enough to participate in one of those things, be
6:21
Speaker 2: finding the exit doors to the casino on your way
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Speaker 2: through it, because you just like you never know when
6:27
Speaker 2: it's going to go against you. Other things that we
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Speaker 2: are seeing in markets right now, We've got crude oil
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Speaker 2: up another eighteen cents of barrel to sixty five sixty
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Speaker 2: at the moment, and so that is what is moving
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Speaker 2: in markets today. Peace in CNBC, wealth, inequality, and the
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Speaker 2: K shaped economy are more striking than ever. Data shows
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Speaker 2: I'm about to have to push mute on the phrase
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Speaker 2: K shaped going forward. And again I'm of the opinion
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Speaker 2: that I think we've reached peak affordability concerns sometime like
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Speaker 2: just general affordability concerns sometime in the last quarter or so.
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Speaker 2: The K shaped piece might continue to be a problem,
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Speaker 2: but I just can't keep saying K shaped, like it's
7:17
Speaker 2: it's becoming problematic for me for that to just become
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Speaker 2: the way we refer to this forever.
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Speaker 3: So then you want to shift over to inequality and
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Speaker 3: actually talk about that, because that's K shaped isn't really
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Speaker 3: something that we can easily measure, but case shaped.
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Speaker 2: We were talking about it like coming out of the pandemic,
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Speaker 2: and we were like, hey, people on the high end
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Speaker 2: of the income spectrum have been recovering faster than the bottom,
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Speaker 2: and that's what it meant. We didn't use everything like
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Speaker 2: you can't just be like, oh, like this is case shaped.
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Speaker 2: It's like no, Like, unless you want everyone to make
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Speaker 2: the same amount as everyone else, then there's always going
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Speaker 2: to be some kind of skew.
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Speaker 3: But is that elevated And so we have a measurement
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Speaker 3: called the Ginny coefficient. Yes, And this does not measure
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Speaker 3: wealth inequality, by the way, so it's not a perfect measurement,
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Speaker 3: but it is a statistical measure of inequality used to
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Speaker 3: represent either income or wealth distribution. But as we measured
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Speaker 3: it's it's generally income distribution. And we have a measurement
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Speaker 3: of this, and we have a measurement of it from
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Speaker 3: the World Bank going all the way back to the
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Speaker 3: early sixties here in the United States, And so this
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Speaker 3: is an index. The way that you think about it
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Speaker 3: would be if one person held all the income in
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Speaker 3: the entire cut, like if Jeff Bezos suddenly made every
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Speaker 3: dollar in the entire United States came in the United
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Speaker 3: States of Amazon, then the coefficient would be one hundred.
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Speaker 3: If every single person in society had an equal share
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Speaker 3: of all the income in our country, the efficient the
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Speaker 3: index would be zero. In nineteen sixty three, when we
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Speaker 3: have data going back to it was thirty six point seven.
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Speaker 2: What does it now?
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Speaker 3: It is now forty one point eight most recently in
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Speaker 3: twenty twenty three is the only day that I have here.
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Speaker 3: So a few years ago we got as low as
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Speaker 3: thirty nine point seven in twenty twenty one, when we
9:05
Speaker 3: were just throwing money at people, like hitting them in
9:08
Speaker 3: the head with money back in twenty twenty one, and
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Speaker 3: that equaled out some of the incoming equality. By the
9:14
Speaker 3: way that number was the lowest that you had seen
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Speaker 3: it since the early nineties, so it's been elevated for
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Speaker 3: some time now. But I think it is fair to say,
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Speaker 3: if you want to measure income inequality and you know,
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Speaker 3: actually measure it, you're seeing some of the worst numbers
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Speaker 3: about the worst numbers on income inequality less equal distribution
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Speaker 3: of income since we've had tools to measure it in
9:40
Speaker 3: the nineteen sixties.
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Speaker 2: And that part's true, I have a counterpoint to it.
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Speaker 2: Go for it, because I was looking. The Federal Reserve
9:46
Speaker 2: does a quarterly survey on wealth distribution sure, and they
9:51
Speaker 2: basically look at what percentage of wealth in the US
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Speaker 2: accumulates to the top point oh one, I'm sorry, the
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Speaker 2: top point one percent, the top one percent, top ten percent,
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Speaker 2: fifty to ninety percent, and then the bottom fifty percent. Okay, okay.
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Speaker 2: They started doing this back in nineteen eighty nine, so
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Speaker 2: it's not as long of a data set as what
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Speaker 2: you described, but it still is almost forty years. It's
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Speaker 2: like thirty seven years of data, which is pretty darn good.
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Speaker 2: It's darn tutin if you might, you know, engage with me.
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Speaker 2: So the bottom fifty percent of wealth owners back in
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Speaker 2: nineteen eighty nine held three point five percent of all
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Speaker 2: US wealth. Okay, today they hold two point five percent,
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Speaker 2: which is worse. But again it's not that there was
10:39
Speaker 2: like much to go on then but worse. But just
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Speaker 2: hear me out for the full thing. The fifty to
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Speaker 2: ninetieth percent tile holdings in wealth accounted for thirty five
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Speaker 2: point seven percent of all wealth in nineteen eighty nine.
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Speaker 2: Today it is twenty nine point four. Dropped there as well,
10:57
Speaker 2: dropped there as well, So between those two it's about
11:00
Speaker 2: a seven percent drop. The ninety to ninety ninth was
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Speaker 2: thirty eight percent back then. Today it is thirty six
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Speaker 2: point four. Dropped there, dropped there. The top one percent
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Speaker 2: ninetieth to ninety nine point nine was fourteen point three
11:16
Speaker 2: back then today it's seventeen point three. It went up
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Speaker 2: a little bit. The top point oh one percent went
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Speaker 2: from holding eight point six percent of the wealth to
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Speaker 2: fourteen point four. So really what we're talking about here
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Speaker 2: is not that the family making you know, one hundred
11:36
Speaker 2: and twenty five thousand has gone from you know, has
11:38
Speaker 2: been able to accumulate so much more wealth. It's really
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Speaker 2: that top point one percent of households, which remember they're
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Speaker 2: about one hundred and seventy hundred seventy million households in
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Speaker 2: the country, and we're talking about the point one percent.
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Speaker 2: So the top one hundred and seventy thousand households in
11:57
Speaker 2: the country dramatically increased their wealth, have basically double almost
12:00
Speaker 2: doubled their share of wealth, and everyone else is just
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Speaker 2: kind of treading water with what's left out there.
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Speaker 3: Doesn't say anything about how much total wealth in the
12:09
Speaker 3: United States has increased over the last forty years. And
12:11
Speaker 3: that's an important consideration too, because the proportion of a
12:14
Speaker 3: larger pie is still a larger piece of pie. But nonetheless,
12:18
Speaker 3: this is I think what people focus on when they
12:21
Speaker 3: talk about how the world, how the United States has
12:24
Speaker 3: changed over the last forty years.
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Speaker 2: I want to talk more about this because I think
12:28
Speaker 2: this is an interesting topic to dig in on.
12:30
Speaker 4: We can.
12:30
Speaker 2: We can talk more, but it's our show, right we can.
12:32
Speaker 2: Todd's going to join us next, does he have to?
12:35
Speaker 2: He does? Okay? We love Todd.
12:36
Speaker 3: Okay, we joining us. Next, We're gonna play some trivia
12:38
Speaker 3: and then we will talk a little bit more about
12:40
Speaker 3: wealth and income.
12:41
Speaker 2: Okay, sounds great.
12:42
Speaker 1: Text us six one seven, three, six two thirteen eighty five,
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Speaker 1: Financial Exchange Radio Network, all right right now.
13:22
Speaker 2: Joined by Tom Lotski from the law firm of Cushing
13:25
Speaker 2: and dol And. Mister Lotski, thank you so much for
13:27
Speaker 2: joining us today.
13:29
Speaker 4: Always a pleasure. Thanks for having me, Todd.
13:31
Speaker 2: If someone is considering planning estate planning with long term
13:36
Speaker 2: care concerns front and center, what's the right age for
13:38
Speaker 2: them to start making those plans.
13:41
Speaker 4: Yeah, So when you're talking about nursing home planning, it's
13:47
Speaker 4: it's age related for sure, because it takes five years
13:53
Speaker 4: in order to protect the assets from the cost of
13:56
Speaker 4: nursing home care. So advanced planning is always better than
13:59
Speaker 4: last planning. But in my head, and again I just
14:03
Speaker 4: I don't have a I don't have any legal number
14:06
Speaker 4: to give you. I'm just going to give you my
14:08
Speaker 4: my sort of rule of thumb. My rule of thumb
14:11
Speaker 4: would be, you know, sixty and over. When I meet
14:14
Speaker 4: people sixty and over, I can't help but ask when
14:17
Speaker 4: I'm saying, what are the objectives we're trying to accomplish today?
14:21
Speaker 4: You know, probate taxes, bloodline planning, those always come up.
14:25
Speaker 4: But then I throw in, do you want to protect
14:28
Speaker 4: assets from the nursing home if you're sixty and over?
14:32
Speaker 4: Because then you figure at sixty five it's in your
14:34
Speaker 4: rear view mirror or seventy. If you start at sixty five,
14:37
Speaker 4: it's in your rear view mirror, and that's a good
14:39
Speaker 4: place to be.
14:40
Speaker 2: What if you haven't done planning at those ages, what
14:43
Speaker 2: if you're through that ideal window, is it still you know,
14:46
Speaker 2: worth doing or what are the considerations? Then?
14:50
Speaker 4: So I think maybe what we're talking about is, yes,
14:52
Speaker 4: I don't care how old you are, if you haven't
14:55
Speaker 4: gotten sick yet and you're not in the nursing home. Yeah,
14:58
Speaker 4: I think getting the clock started is always a wonderful
15:01
Speaker 4: thing to do because you're always going to be better
15:04
Speaker 4: off having that clock running. And not having that clock running,
15:09
Speaker 4: so there's more options that can be done last minute. However,
15:12
Speaker 4: you could also just be faced with nursing home care admission,
15:16
Speaker 4: meaning hey, I'm going in and either no planning was
15:20
Speaker 4: done or maybe we did some planning, but there's assets
15:24
Speaker 4: outside the trust that still need to be protected and
15:27
Speaker 4: there's things that can be done last minute. So I
15:30
Speaker 4: just want people to know that if you're faced with
15:33
Speaker 4: that last minute things, please don't just write the check
15:36
Speaker 4: and folks along those lines, that's exactly what this guide
15:40
Speaker 4: is about. We are at the end of the month,
15:42
Speaker 4: it is going to be put away. Long term care
15:45
Speaker 4: planning for procrastinators is going to help you figure out
15:49
Speaker 4: what to do when you're left with that last minute situation.
15:53
Speaker 4: How do I protect these assets? From houses to vacation
15:57
Speaker 4: homes to rental properties. They're treated different diferently. Some are accountable,
16:01
Speaker 4: some are non countable. How do you make countable non
16:04
Speaker 4: countable last minute? How do we use annuities and pulled
16:07
Speaker 4: trust to save money if we're beyond our limit in
16:10
Speaker 4: terms of how much we're allowed to have, don't just
16:13
Speaker 4: write to check, folks, call and get the guide. It's
16:16
Speaker 4: good for married couples and single people because there's different rules.
16:21
Speaker 4: Let me give you the number eight six six eight
16:24
Speaker 4: four eight five six ninety nine or Legal Exchange Show
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Speaker 4: dot com. You can download it right there again eight
16:30
Speaker 4: sixty six eight four eight five six nine nine or
16:34
Speaker 4: Legal Exchange Show dot com and you can download the
16:37
Speaker 4: guide there.
16:38
Speaker 2: Mister Lutski, thank you so much for joining us.
16:41
Speaker 4: Always a pleasure. Thank you.
16:42
Speaker 1: The proceeding was paid for and the views express are
16:44
Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
16:47
Speaker 1: or Armstrong Advisory may contact you offering legal or investment services.
16:50
Speaker 1: Cushing and Armstrong do not endorse each other and are
16:52
Speaker 1: not affiliated.
16:53
Speaker 5: Zat for trirever here on the Financial Exchange and Today
16:56
Speaker 5: is Christian Bill's fifty second birthday. Christian Bill portray one
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Speaker 5: financial crisis crisis in the twenty fifteen film The Big Short.
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Speaker 5: So trivia question today is simply, who did Christian Bail
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Speaker 5: portray in The Big Short? Once again, who did Christian
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17:39
Speaker 2: Mike, I want to just do a little bit more
17:41
Speaker 2: discussion on this ke shaped economy thing. And we covered
17:44
Speaker 2: in the last segment that basically what's happened in the
17:47
Speaker 2: last thirty five years. If you're not in the top
17:52
Speaker 2: point one percent overall, like you're not really you know,
17:57
Speaker 2: in the aggregate gaining or losing very much versus any group.
18:00
Speaker 2: It's just that top point one percent has eaten up
18:02
Speaker 2: a lot more of the wealth in the country. This
18:05
Speaker 2: is what we're talking about from a wealth perspective.
18:07
Speaker 3: Yes, that is, by the way, not purchasing power compared
18:10
Speaker 3: to inflation. That is share of the total wealth pie.
18:13
Speaker 2: Yes, what I will make the case for in terms
18:15
Speaker 2: of like why do things just like feel like worse
18:20
Speaker 2: economically than like thirty years ago. There's a couple of
18:22
Speaker 2: things going on, in my opinion. The first is Look,
18:25
Speaker 2: we do always get nostalgic for like how things were
18:27
Speaker 2: when we were younger, because we forget about the bad parts.
18:29
Speaker 2: So there's there's some of that. The second piece is
18:33
Speaker 2: the main place where I think we feel this is
18:35
Speaker 2: in things that have a very fixed supply in terms
18:39
Speaker 2: of how much they can provide out to us. The
18:42
Speaker 2: reason why, just as an example, tickets to go to
18:46
Speaker 2: you know, large sporting events or big concerts are so
18:49
Speaker 2: expensive now, in my opinion, is there are fewer venues
18:54
Speaker 2: that actually you can see live music. ICT think about
18:57
Speaker 2: like all of like the small ones that have closed
18:59
Speaker 2: recently and populations have grown. It used to be a
19:03
Speaker 2: twenty if you had, you know, a twenty thousand seat
19:05
Speaker 2: venue in a city of a million people. Okay, like
19:08
Speaker 2: that's that's great. Now that same city has grown to
19:11
Speaker 2: one and a half million people, but there's still only
19:13
Speaker 2: twenty thousand seats. You've got more people competing for the
19:16
Speaker 2: same fixed supply of goods. It's the same reason when
19:18
Speaker 2: you go to the beaches in the summer, you can't
19:22
Speaker 2: make more beach space. There's more people now than they're
19:25
Speaker 2: worth thirty years ago, and so yes, it is more
19:27
Speaker 2: crowded because like you just have more people trying to
19:29
Speaker 2: get there as well, and so that demographics not nikonomics. Yes,
19:33
Speaker 2: it's it's a demographic piece in my opinion. Quick Break
19:37
Speaker 2: Trivia Answers.
19:37
Speaker 1: Next, bringing the latest financial news straight to your radio
19:45
Speaker 1: every day. It's the Financial Exchange on the Financial Exchange
19:49
Speaker 1: Radio Network. Time now for Wall Street. Watch a complete
19:55
Speaker 1: look at what's moving markets so far today right here
19:58
Speaker 1: on the Financial Exchange Radio Network.
20:01
Speaker 5: Markets trading lower after President Trump officially selected Kevin Wars
20:05
Speaker 5: as the next chairman of the Federal Reserve. Right now,
20:09
Speaker 5: the Dow is down nearly one percent or four hundred
20:12
Speaker 5: and sixty two points lower, SMP five hundred, off a
20:15
Speaker 5: half a percent, NASDAC down by nearly two thirds of
20:18
Speaker 5: a percent or one hundred and forty two points lower,
20:21
Speaker 5: RUSS two thousands, down over one and a half percent. Ten,
20:25
Speaker 5: Your Treasure reeled up two basis points at four point
20:28
Speaker 5: two four to nine percent, and crude oil up two
20:32
Speaker 5: thirds of a percent, trading a sixty five dollars and
20:35
Speaker 5: eighty six cents a barrel. It just blanked out there, Okay,
20:40
Speaker 5: here we go. Apple posted blowout iPhone sales and profit
20:43
Speaker 5: for the fourth quarter with a tech giantsar revenue from
20:46
Speaker 5: iPhones climb twenty three percent compared to the prior year. However,
20:51
Speaker 5: investors are showing some concern about rising materials costs for Apple,
20:55
Speaker 5: particularly memory and chips, due to AI data centered demand.
21:00
Speaker 5: Apple shares it down over half or percent. Meanwhile, verizonbeat
21:04
Speaker 5: revenue expectations on offered a bullish forecast, saying it expects
21:08
Speaker 5: to add between seven hundred and fifty thousand, one million
21:11
Speaker 5: post paid phone connections this year, verizonstock rallying nine percent. Elsewhere,
21:17
Speaker 5: sand Disc shares are jumping thirteen percent higher after the
21:20
Speaker 5: data storage maker posted quarterly results that it beat expectations.
21:24
Speaker 5: Sand Disk also offered a solid guidance that impressed. Footwear
21:29
Speaker 5: company Deckers Outdoor posted solid quarterly results, boosted by Hoka
21:33
Speaker 5: running shoes, sending shares up fifteen percent. In Visa beat
21:37
Speaker 5: earnings expectations, driven by strong holiday shopping spending by consumers. However,
21:44
Speaker 5: Visa shares down by three percent. Now, I'm Tucker Silva
21:48
Speaker 5: and that is Wall Street Watch And the trivia question
21:50
Speaker 5: we asked in the prior segment was who did Christian
21:53
Speaker 5: Bale portray in the movie. The Big short of of
21:56
Speaker 5: course be Michael Burry hal in Austin, Texas is our
22:00
Speaker 5: winner today listening on iHeartRadio is taking home a Financial
22:04
Speaker 5: Shane Show t shirt. Congrats to Hell and we play
22:07
Speaker 5: trivia every day here in the Financial Looks Change. See
22:10
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22:13
Speaker 2: I want to talk about this piece in Bloomberg Opinion.
22:16
Speaker 2: Florida is giving housing optimists reason to buzz again, and
22:20
Speaker 2: it does seem like we are starting to see maybe
22:24
Speaker 2: the first signs that normalization is getting close to being done.
22:31
Speaker 2: In Florida. You still do have inventories up about five
22:34
Speaker 2: percent year over year, but in January those are basically
22:39
Speaker 2: flat relative to the prior month. You do still have
22:42
Speaker 2: home prices that are falling in the major metro areas
22:44
Speaker 2: in Florida, whether you're looking Miami, Tampa that you know,
22:48
Speaker 2: Fort Myers region, Jacksonville, like basically anywhere you see that happening.
22:52
Speaker 2: But it is something where you've got inventory that is
22:56
Speaker 2: coming back onto the market at the same time that
22:59
Speaker 2: mortgage rates are down a little bit. The pricing is
23:01
Speaker 2: more reflective there, and so again it's it's not a
23:06
Speaker 2: great market yet, but it is one where you can
23:08
Speaker 2: see the path towards. You know, Florida housing's starting to
23:12
Speaker 2: see some signs of growth, probably nine to fifteen months
23:16
Speaker 2: from now. And so again we've been going through this,
23:20
Speaker 2: this housing like just slow down for almost four years now,
23:26
Speaker 2: and it seems like in Florida it's starting to get
23:28
Speaker 2: ready to turn the corner. The piece you have to remember,
23:32
Speaker 2: Florida was on the cutting edge. Florida's always kind of
23:34
Speaker 2: on the cutting edge of anything that's happening in real
23:36
Speaker 2: estate pricing and activity. It moves first to the upside,
23:40
Speaker 2: and it moves first to the downside. It's just where
23:43
Speaker 2: it tends to go. And so even though you're seeing
23:47
Speaker 2: some improvement there, if you're a listener in the Northeast
23:50
Speaker 2: or the Midwest, you're nowhere near this. You still have
23:53
Speaker 2: big inventory builds that need to happen, big pricing adjustments
23:56
Speaker 2: that need to happen, and that's going to take a
23:59
Speaker 2: couple more years for this to play out. But I
24:01
Speaker 2: think it continues to get me back to where I am,
24:03
Speaker 2: which is the years of twenty twenty seven through twenty
24:06
Speaker 2: nine will be when depending on where in the country
24:09
Speaker 2: you are, this normalization process is completed, and housing can
24:12
Speaker 2: start to become a positive force for local economic growth
24:16
Speaker 2: again instead of a drag on it.
24:19
Speaker 4: Yeah.
24:19
Speaker 3: The other piece about Florida too, If you're seeing that stabilization,
24:23
Speaker 3: it may be enough for home builders to return. I
24:27
Speaker 3: mean not right now, but I'm saying, as a home builder,
24:30
Speaker 3: when you looked at the data in Florida, Texas, Louisiana,
24:33
Speaker 3: all the places you like to build homes, if you're
24:35
Speaker 3: one of the giants, you're saying, I can't put new
24:38
Speaker 3: inventory into this market right now because I'm not sure
24:41
Speaker 3: how much more prices are going to fall. I don't
24:43
Speaker 3: know how to price I don't know how to build
24:44
Speaker 3: under these conditions. If you have this stabilization actually holding,
24:49
Speaker 3: then yeah you might. You might see some recovery there.
24:52
Speaker 2: So that's kind of fun. Uh. Let's I want to
24:55
Speaker 2: talk about potato chips, Chuck, is that right by you?
24:57
Speaker 2: I love potato chips.
24:59
Speaker 3: I know it's close to Newon's. I don't mean to
25:00
Speaker 3: tease you, but Cape Cod potato chips are losing their
25:05
Speaker 3: own way remaining then won its manufacturing.
25:08
Speaker 2: They won my family's potato chip taste test that we
25:10
Speaker 2: did a few years back. Yeah, if you ever want
25:12
Speaker 2: to make yourself it blind, it was blind and we
25:16
Speaker 2: did I think it was either fifteen or sixteen different
25:18
Speaker 2: chip brand. That's too many. This went better than the
25:22
Speaker 2: Cottage cheese taste test that we did where didn't need
25:25
Speaker 2: it for about a year after that. Yeah, that's all.
25:27
Speaker 2: But yeah, cape Cod came out ahead and no one
25:29
Speaker 2: was expecting it.
25:30
Speaker 3: Well in any case, the company is now owned by
25:33
Speaker 3: the Campbell's Company, better known for their soups. They had
25:36
Speaker 3: one remaining plant on Cape Cod and the forty nine
25:41
Speaker 3: employees there will be losing their job. And I don't
25:43
Speaker 3: think this is terribly surprising. It's a shame and hyenas
25:46
Speaker 3: that this will be closing. But where on Earth would
25:49
Speaker 3: you live if you had to commute to a Cape
25:53
Speaker 3: Cod potato chip manufacturing plant, Because I just can't imagine
25:59
Speaker 3: a higher cost area of the country to manufacture something.
26:02
Speaker 3: It'd be like, it's kind of a kin to doing
26:05
Speaker 3: manufacturing in New York City.
26:08
Speaker 2: Yeah, we're gonna We're gonna set up a factory on
26:10
Speaker 2: Martha's Vineyard.
26:11
Speaker 3: Like, I mean, I can see why they have to
26:14
Speaker 3: close this. You you cannot possibly have an easy time
26:19
Speaker 3: finding and retaining town. They already have a bunch of
26:21
Speaker 3: plants in Wisconsin, North Carolina, Pennsylvania that already produced the
26:25
Speaker 3: majority of these chips.
26:26
Speaker 2: This factory was doing like one total. So I've been
26:31
Speaker 2: eating chips. Wisconsin chips, yeah, kip god, Wisconsin.
26:36
Speaker 1: Yeah.
26:37
Speaker 2: Yeah, they've got in there. It's just like Paris, Maine.
26:40
Speaker 2: You know you've seen one of them. You them all right?
26:44
Speaker 2: So again, I shame.
26:46
Speaker 3: But economically you hear this from business owners on the
26:49
Speaker 3: Cape all the time, like what firefighters, police officers.
26:53
Speaker 2: Like have a tough time finding them.
26:55
Speaker 3: You know why, because it's pretty expensive to live down here.
27:00
Speaker 2: Are they gonna have to change their name?
27:02
Speaker 1: No? Man, No, it's a brand.
27:04
Speaker 2: It's a brand, Cape cop Potato chips. It doesn't matter.
27:07
Speaker 2: I know it is, But doesn't it feel kind of wrong? Shame?
27:14
Speaker 2: It is too bad.
27:15
Speaker 6: I wanted to go on that tour too, and you
27:21
Speaker 6: missed out, so I know I've been busy.
27:25
Speaker 2: Sorry, Okay, I guess there's uh, there's that. Let's see
27:32
Speaker 2: what else do we want to cover here?
27:35
Speaker 3: Building affordable housing requires tackling insurance costs. I wanted to
27:39
Speaker 3: start there for a moment, and Bloomberg while I hear you.
27:42
Speaker 3: Let's try one thing at a time, okay, Like, if
27:46
Speaker 3: you want affordable housing, you have to build houses first,
27:49
Speaker 3: and then we can talk about whether our laws adequately
27:52
Speaker 3: deal with the problems with insurance.
27:55
Speaker 2: But I mean, it's all guys. It's also plying to
28:00
Speaker 2: I just don't think we get it. Sometimes, if you
28:04
Speaker 2: just keep trying to give people more money to buy housing,
28:08
Speaker 2: you will not improve housing affordability. In fact, every.
28:12
Speaker 3: Day we cover something like this, Well, if you could
28:14
Speaker 3: just bring down those insurance costs and you know, make
28:18
Speaker 3: it so that people can't so easily insurance sue insurance companies,
28:21
Speaker 3: then we would fix the housing affordable No build more houses.
28:25
Speaker 2: Well, and and wait a minute, you want to make
28:28
Speaker 2: it harder to try to go after insurance companies because
28:31
Speaker 2: people love how different Sucker talk to me about, Like
28:33
Speaker 2: how things have gone for you with your car lately?
28:36
Speaker 6: Just swimmingly?
28:38
Speaker 2: It's been a month. Have you gotten a check yet?
28:40
Speaker 2: I got it last night, Okay, but it took a month.
28:42
Speaker 1: Over a month.
28:44
Speaker 6: There you go, And they didn't give me attitude unexpectedly
28:47
Speaker 6: for whatever reason it was. It was great. They were
28:49
Speaker 6: super polite to me, a little sarcasm there. Yeah, just
28:54
Speaker 6: bombarding me with like just attitude. I'm like, hey, I
28:58
Speaker 6: got hit here, buddy.
29:01
Speaker 2: So yeah, I.
29:02
Speaker 3: Think fixing the insurance problem that people admittedly have with
29:06
Speaker 3: their homes with prices going up, will not fix housing affordability.
29:10
Speaker 2: No, So.
29:12
Speaker 3: You're welcome to focus on this, but if you want
29:14
Speaker 3: to fix housing affordability to build more houses.
29:16
Speaker 2: Speaking of insurance, we're going to take a quick break,
29:18
Speaker 2: and when we come back, paul A Monica from Barons
29:21
Speaker 2: is going to join us to talk about United Health
29:23
Speaker 2: right after this.
29:24
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29:31
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29:52
Speaker 1: Face is the Financial Exchange Radio Network. Ladies and Gentlemen
29:58
Speaker 1: the weekend.
30:01
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30:04
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30:07
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30:40
Speaker 2: As promised, We're now joined by Paul Amonica from Barns.
30:44
Speaker 2: We're gonna be talking a little bit about United Health. Paul,
30:47
Speaker 2: how you doing today?
30:48
Speaker 7: Goods? How you guys don't.
30:50
Speaker 2: Better than United Health stock? Earlier this week? What happened?
30:55
Speaker 7: Yeah, the you know, the revenue missed forecasts a bit,
30:59
Speaker 7: the guidance wasn't great. But then you also had the
31:03
Speaker 7: news from you know, the the you know from Washington
31:07
Speaker 7: about you know, President Trump proposing that the reimbursement rates
31:12
Speaker 7: for Medicare advantage aren't going to go up. All that
31:15
Speaker 7: much and at least the proposal for twenty twenty seven.
31:19
Speaker 7: And I think that really spooked a lot of investors.
31:23
Speaker 7: And we saw not just United Health shares tumble on
31:27
Speaker 7: that news, but CBS, which owns Etna. You saw Humana
31:32
Speaker 7: get hit, a couple of the other smaller you know,
31:35
Speaker 7: medicare focused insures like Senten and Alena also you know,
31:40
Speaker 7: getting hit Anthem owner Elevants as well. So it was
31:44
Speaker 7: just a very difficult time for the insurers, you know,
31:49
Speaker 7: in light of that. And you know United Health now,
31:51
Speaker 7: you know, it went from being the darling of the
31:54
Speaker 7: now the company that had the highest price by far,
31:58
Speaker 7: to you know, kind of the pack, but it still
32:01
Speaker 7: has a high enough price that it impacts the doubts.
32:03
Speaker 7: What was interesting on you know, the news was the
32:06
Speaker 7: rest of the market held up relatively well.
32:09
Speaker 2: Paul helped me reconcile these two ideas then that are
32:12
Speaker 2: in my head for pretty much the last thirty five years,
32:16
Speaker 2: one of the most consistent investments in terms of performance
32:21
Speaker 2: has been health insurance, specifically United Health, Like they just
32:25
Speaker 2: cranked from basically nineteen ninety onward. How do I reconcile
32:29
Speaker 2: that with the fact that now this is a pretty
32:32
Speaker 2: hostile environment for insurance across the board, not just looking
32:36
Speaker 2: at health insurance. Like everyone's talking about insurance costs and
32:40
Speaker 2: we're talking about you know, capping them and figuring out
32:43
Speaker 2: you know, reimbursement rates and this and that. Is this
32:47
Speaker 2: a fundamentally different environment than just a year or two ago,
32:51
Speaker 2: or is this just a little not little blip, but
32:55
Speaker 2: you know, some kind of speed bump and then these
32:57
Speaker 2: guys resume their regularly scheduled programming.
33:00
Speaker 7: Yeah, I don't know if this is going to be uh,
33:05
Speaker 7: you know, the industry getting back to the way it
33:09
Speaker 7: used to be. I mean, you have a pretty vocal
33:14
Speaker 7: uh you know anti insurer sentiment I think in d C.
33:19
Speaker 7: And this is by partisan, This is by no means
33:22
Speaker 7: just President Trump and the Republican Party. I think a
33:25
Speaker 7: lot of Democrats, you know, clearly are a very hostile
33:31
Speaker 7: towards this industry as well. And you know, is something
33:37
Speaker 7: that is of you know, a very easy political win
33:41
Speaker 7: because you know, you're not going to find too many
33:44
Speaker 7: people who you know, look at their you know, doctors
33:48
Speaker 7: bills and say, yeah, I love my health insurance.
33:52
Speaker 2: Wis I could pay more?
33:54
Speaker 4: Yes?
33:54
Speaker 7: Yes, definitely They deserve a lot more. Uh, this is
33:58
Speaker 7: not something that I think is going to change anytime soon.
34:02
Speaker 7: I just find it interesting from a broader market perspective
34:05
Speaker 7: that you know, as big as these companies are, they're
34:09
Speaker 7: not crating the entire market. And even there are pockets
34:13
Speaker 7: of the healthcare sector that have been doing well lately,
34:17
Speaker 7: even though there have been broader concerns about uh, you know,
34:21
Speaker 7: drug pricing and you know, drug approvals because of RFK
34:24
Speaker 7: Junior as the Health and Human Services Secretary as well.
34:28
Speaker 7: But you know, you're seeing obviously the GLP one companies
34:31
Speaker 7: doing you know, quite well, you know, and I think
34:34
Speaker 7: there are other pockets of the healthcare sector that are
34:37
Speaker 7: bouncing back also, But I'm not sure that the insurer
34:40
Speaker 7: is going to take part any time soon.
34:42
Speaker 2: Very good, Paul, appreciate you joining us today. Hope you
34:45
Speaker 2: have a great weekend and we will talk to you
34:47
Speaker 2: in February.
34:49
Speaker 4: Great.
34:49
Speaker 7: Yes, I'm looking forward to the next week just before
34:52
Speaker 7: some football game I think coming up.
34:54
Speaker 2: Yeah, yeah, super duper Bowl. It's it's going to be
34:57
Speaker 2: a big one. So exactly appreciate to Paul. Have a
35:00
Speaker 2: good one, yep, you two have a go one that
35:02
Speaker 2: is Paul Monica from Baron's talking about United Health. Mike,
35:06
Speaker 2: what else we got that we haven't gotten.
35:08
Speaker 3: To The CEO of the country's biggest crypto company, Brian Armstrong,
35:15
Speaker 3: no relation, was at Davos last week. And when anyone
35:21
Speaker 3: is capable of making giant bank CEOs as angry as
35:26
Speaker 3: Brian Armstrong apparently has. I just find that to be
35:30
Speaker 3: interesting and it might be an indication that you're doing
35:32
Speaker 3: something right. Apparently, Allegedly, according to The Wall Street Journal,
35:37
Speaker 3: Brian Armstrong was giving an interview or speaking with the
35:43
Speaker 3: former UK Prime Minister Tony Blair when JP Morgan chases
35:47
Speaker 3: Jamie Diamond cut in and said, you are full of
35:50
Speaker 3: expletive where I cannot say now, granted there might be
35:55
Speaker 3: more contacts. I don't know how we cut in, but
35:57
Speaker 3: a pretty aggressive move from the world's Is JP Morgan
36:01
Speaker 3: still the world's largest bank? I believe so the CEO
36:04
Speaker 3: of the world's largest bank to cut in and say
36:07
Speaker 3: something like that now, So for context, Brian Armstrong has been
36:11
Speaker 3: out there lobbying Congress and very specifically going out on
36:14
Speaker 3: media and saying that the banks are trying to prevent
36:18
Speaker 3: what he wants to do from happening, and crypto fans
36:22
Speaker 3: are a rambunctious group, and so I'm guessing that many
36:25
Speaker 3: of these CEOs have been feeling pressure on social media
36:28
Speaker 3: and potentially even threats from people who have expressed their
36:32
Speaker 3: skepticism of what the banks are trying to accomplish.
36:34
Speaker 2: But again, what Armstrong wants.
36:38
Speaker 3: To do here is play in the bank's backyard and
36:41
Speaker 3: basically offer a lot of bank products without being regulated
36:44
Speaker 3: as a bank, and I think has stirred the pot
36:46
Speaker 3: on this subject quite a bit. But when you do
36:50
Speaker 3: something enough to make some of the most powerful men
36:53
Speaker 3: in the world really upset with you, I just find
36:56
Speaker 3: that to be fascinating, especially in this type of fashion.
37:00
Speaker 3: If Jamie Damon isn't exactly famous for intercepting somebody and
37:04
Speaker 3: saying you are full of exploitive.
37:05
Speaker 2: Two things are probably true. At the same time, the
37:08
Speaker 2: banking industry could use a little bit more competition, yep.
37:12
Speaker 2: And no, no, no, I wasn't even gonna go there.
37:17
Speaker 2: And that competition in terms of like stability on deposits
37:21
Speaker 2: probably shouldn't come from the crypto space. Yeah, I think
37:24
Speaker 2: both of those things can be true, you know, like
37:26
Speaker 2: there's middle grounds somewhere. I don't know where it is exactly,
37:30
Speaker 2: but look, all these big banks should be broken up
37:35
Speaker 2: and forced to compete. Actually, and I don't know if
37:38
Speaker 2: you want an exchange that trades fart coin to be,
37:41
Speaker 2: you know, paying out interest without regulation, both of those things,
37:47
Speaker 2: you know, like this, it's it's just kind.
37:49
Speaker 8: Of that would be the pendulum swinging very far in
37:52
Speaker 8: the end, right, Like that would seem to be like
37:54
Speaker 8: we're very much back to pre financial crisis when you
37:57
Speaker 8: can start doing things like oh, like yeah, my crypto
38:01
Speaker 8: portfolio is triple A rated because they've securitized my fart
38:05
Speaker 8: coin with my rabbit.
38:08
Speaker 2: Coin or something like. Okay, like we're getting off the
38:12
Speaker 2: rails a little bit. We're done for the day, done
38:14
Speaker 2: for the week. Hope you all have a great weekend.
38:18
Speaker 2: We'll see you on Monday. It's first February trading day
38:21
Speaker 2: of the year. Get excited. Jobs report next week too,