Latest / The Financial Exchange Show / Consumer Debt Looks Bad, But Markets Aren’t Panicking

Transcript

Consumer Debt Looks Bad, But Markets Aren’t Panicking · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:02
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:05
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:08
  Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:11
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:14
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:17
  Speaker 1: your own financial tax and estate planning advisors before making
• 0:20
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:23
  Speaker 1: this program do not endorse each other or their services.
• 0:25
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:28
  Speaker 1: for referrals and are not affiliated. this is the financial
• 0:34
  Speaker 1: exchange with chuck zotta and mike armstrong your exclusive look
• 0:38
  Speaker 1: at business and financial news affecting your day your city
• 0:42
  Speaker 1: your world stay informed and up to date about economic
• 0:46
  Speaker 1: and market trends plus breaking business news every day The
• 0:50
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:53
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:57
  Speaker 1: heroes by visiting dav5k. boston and making a donation today. This
• 1:03
  Speaker 1: is The Financial Exchange with Chuck Zotta and Mike Armstrong.
• 1:10
  Speaker 2: Chuck, Mike, and Tucker with you here on a Monday.
• 1:12
  Speaker 2: Hope you all had a great weekend. And as we
• 1:16
  Speaker 2: kick things off here, stocks don't really know what to
• 1:19
  Speaker 2: do with the bond market is closed in observance of
• 1:22
  Speaker 2: Columbus Day. Stock market is open and stocks are like, hey,
• 1:32
  Speaker 2: what do we do? S & P is down one
• 1:34
  Speaker 2: whole point, which is, again, it's like, why did I
• 1:37
  Speaker 2: put on a shirt today? Like, what's the point? I
• 1:40
  Speaker 2: got to wash this thing now. The Dow is up
• 1:44
  Speaker 2: 246 points. Okay, like, yeah, something. The Nasdaq composite is
• 1:49
  Speaker 2: down 69. So it's like, what are we doing here? Like,
• 1:53
  Speaker 2: it's not a day that is particularly interesting in equities. Bonds,
• 1:58
  Speaker 2: as I mentioned, no movement. They're closed. What do we
• 2:01
  Speaker 2: have going on with gold? Gold's down $ 29 an ounce
• 2:04
  Speaker 2: to $ 41. 86 after a little bit of a run late
• 2:06
  Speaker 2: last week. Crude oil, West Texas Intermediate, up $ 1. 99 a
• 2:09
  Speaker 2: barrel to $ 93. 83. AAA National Average for gas is at $ 4. 35
• 2:10
  Speaker 2: and $ 5. 10, down $ 3.
• 2:10
  Speaker 3: 10 overnight.
• 2:20
  Speaker 2: Diesel's at $ 6. 26, down one cent overnight. Diesel futures, though,
• 2:26
  Speaker 2: despite any hubbub about importing Russian diesel, diesel futures actually
• 2:31
  Speaker 2: up just shy of one cent today. So the diesel
• 2:33
  Speaker 2: market's saying, we don't really think there's any juice there.
• 2:37
  Speaker 2: So that's what you've got going on in markets today. Again,
• 2:40
  Speaker 2: bond market will be back open tomorrow. And so pretty
• 2:45
  Speaker 2: quiet day overall in equity markets. We got this piece
• 2:49
  Speaker 2: from CNBC. Tucker, can we get, like, a standard, like,
• 2:55
  Speaker 2: doom and gloom music at some point to, like, something
• 2:59
  Speaker 2: that's just, like, I want shocking, but, like, I don't know, maybe, like,
• 3:04
  Speaker 2: horror story music? Like, since it's Halloween-y, like, time?
• 3:07
  Speaker 3: Like, I don't know.
• 3:09
  Speaker 2: We'll figure something out. But Americans' debt problems are flashing
• 3:13
  Speaker 2: a warning not seen since the Great Recession. which obviously
• 3:17
  Speaker 2: means that there's another Great Recession coming. Like, that's the
• 3:20
  Speaker 2: implication there. And I'm just, I'm sorry, but I can't
• 3:26
  Speaker 2: do this all the time with the doom and gloom,
• 3:28
  Speaker 2: because two things are true at the same time. Number one,
• 3:32
  Speaker 2: families are falling behind on their debt far more than
• 3:36
  Speaker 2: they have in recent history. Got it. Number two, It's
• 3:41
  Speaker 2: not impacting the broader economy. So the two thoughts I
• 3:44
  Speaker 2: hold in my head at the same time, number one,
• 3:45
  Speaker 2: I feel really bad for a lot of families out
• 3:47
  Speaker 2: there that are struggling right now because costs have gone
• 3:50
  Speaker 2: up and wages have not gone up at the same pace.
• 3:53
  Speaker 2: And so it's freaking hard right now. But when you
• 3:57
  Speaker 2: put a headline out there that says American debt problems
• 4:00
  Speaker 2: are flashing a warning not seen since the Great Recession,
• 4:03
  Speaker 2: that sure makes it seem like the next Great Recession
• 4:06
  Speaker 2: is coming. And as I've been saying all year, pay
• 4:10
  Speaker 2: attention to what's going on with market mechanics and the
• 4:14
  Speaker 2: actual underlying pieces of the market. And you don't see
• 4:20
  Speaker 2: a market that's under stress in any way, shape, or
• 4:22
  Speaker 2: form for most of this year. The couple times that
• 4:25
  Speaker 2: we have had that, It bounced out of it within
• 4:27
  Speaker 2: about a month. And it remains a period right now
• 4:32
  Speaker 2: where until proven otherwise, yes, like markets zig and zag,
• 4:36
  Speaker 2: but it still has been a very constructive year that
• 4:39
  Speaker 2: now has the S & P 500. That's right. The
• 4:42
  Speaker 2: Standard & Poor's 500 up north of 14% year to date.
• 4:47
  Speaker 2: And so if all you do is like read the
• 4:50
  Speaker 2: bad stuff and you're like, oh, I can't invest then. Well,
• 4:54
  Speaker 2: That's not really how it works. There's always bad stuff
• 4:57
  Speaker 2: going on globally as it relates to the economy. The
• 5:01
  Speaker 2: key is figuring out what's the bad stuff that matters
• 5:04
  Speaker 2: and what's the bad stuff that's just noise. And this
• 5:07
  Speaker 2: I am very much filing under something that matters to
• 5:10
  Speaker 2: the individual quite a bit, because, again, it's hard out
• 5:13
  Speaker 2: there for families. But in the broader context of the U.S. economy.
• 5:17
  Speaker 2: is still just noise.
• 5:18
  Speaker 4: I'm going to take it even a step further, Chuck,
• 5:20
  Speaker 4: because this is one survey that's done by the Federal Reserve.
• 5:23
  Speaker 4: They do this survey, it looks like, every few years.
• 5:26
  Speaker 4: And it does show something that's of concern. But we
• 5:29
  Speaker 4: do have other data points on consumer debt, delinquencies, and
• 5:33
  Speaker 4: all sorts of other things that the same folks put together.
• 5:36
  Speaker 4: In fact, the Board of Governors of the Federal Reserve
• 5:38
  Speaker 4: put together quarterly rates on credit card delinquencies.
• 5:41
  Speaker 2: Oh, did they?
• 5:42
  Speaker 4: Which seems like that's pretty correlated to the debt problems
• 5:45
  Speaker 4: that consumers are facing.
• 5:47
  Speaker 2: And as of Q2 2026... And we covered, by the way,
• 5:50
  Speaker 2: that those were getting worse, I believe, through much of
• 5:53
  Speaker 2: 24 and 25.
• 5:54
  Speaker 3: Correct.
• 5:54
  Speaker 4: Yeah, we bottomed back in like 2021, as you can imagine,
• 5:57
  Speaker 4: when everybody was getting STEMI payments and.
• 5:59
  Speaker 3: All sorts of stuff.
• 6:00
  Speaker 4: It rose right through Q2 of 2024 before beginning of fall.
• 6:05
  Speaker 4: And in Q2 of 2026, we are still above, you know,
• 6:09
  Speaker 4: delinquency rates are still above anywhere that they were in
• 6:13
  Speaker 4: the mid-2010s. But we're at 2.85 and we've been falling.
• 6:17
  Speaker 4: And this is substantially lower than where we were at
• 6:20
  Speaker 4: the beginning of the 2010s. Way lower than any time
• 6:23
  Speaker 4: during the 2000s as well.
• 6:25
  Speaker 3: Another piece that I'll just point out.
• 6:27
  Speaker 2: Households and businesses are just not overly levered right now. Right.
• 6:30
  Speaker 4: The consumer debt service payments as a percentage of disposable
• 6:35
  Speaker 4: personal income is another figure that gets published out there.
• 6:40
  Speaker 3: We are by that figure.
• 6:43
  Speaker 4: Because, again, incomes have seen a pretty big bump since
• 6:47
  Speaker 4: the last few years. We are, by that figure, lower
• 6:50
  Speaker 4: than we ever were since the data started getting collecting pre-COVID.
• 6:55
  Speaker 4: We are below anywhere since 05 when they started collecting
• 6:58
  Speaker 4: this data. We didn't get to these levels that we've
• 7:00
  Speaker 4: been at since COVID. So I'm not saying there are
• 7:05
  Speaker 4: problems with households and their debt problems. The delinquency rates
• 7:08
  Speaker 4: on credit cards are high, especially compared to the 2010s decade.
• 7:13
  Speaker 4: but they are substantially lower than any time pre-GFC. So again,
• 7:21
  Speaker 4: what do we do with that information?
• 7:23
  Speaker 3: I'm not entirely sure.
• 7:24
  Speaker 4: I think certainly to your point, I don't think it
• 7:26
  Speaker 4: really matters to the stock market right now. And historically,
• 7:32
  Speaker 4: high levels of debt service haven't really mattered to the consumer.
• 7:35
  Speaker 3: Until they lose their job.
• 7:38
  Speaker 2: Yes, or in the case of what caused the great
• 7:41
  Speaker 2: financial crisis was you had those high levels of debt
• 7:44
  Speaker 2: service that reset even higher because of the adjustable rate mortgages.
• 7:47
  Speaker 2: And then, okay, people ended up– and then really the
• 7:52
  Speaker 2: wave of defaults came after the recession started when it was, okay,
• 7:57
  Speaker 2: these payments have reset and I've lost my job because
• 7:59
  Speaker 2: the financial world imploded. Yeah.
• 8:01
  Speaker 4: You could have made a case that that was happening
• 8:03
  Speaker 4: regardless of whether or not the interest rates set up
• 8:05
  Speaker 4: in the GFC or reset in the GFC, because there
• 8:09
  Speaker 4: are a lot of people that bought homes back then
• 8:10
  Speaker 4: that were never going to be able to make the
• 8:12
  Speaker 4: payments regardless of where rates were. But it was certainly
• 8:15
  Speaker 4: made a heck of a lot worse with those higher
• 8:17
  Speaker 4: resetting rates.
• 8:18
  Speaker 2: So, again, I think two things can be true at
• 8:21
  Speaker 2: the same time. Yes, we are seeing, you know, Americans
• 8:25
  Speaker 2: like especially in some pockets really struggling today. I think
• 8:28
  Speaker 2: that's Absolutely true, and anyone who says that it's not,
• 8:31
  Speaker 2: I think, is trying to sell you something. But, and
• 8:37
  Speaker 2: I've said this before, it's like this is not a
• 8:38
  Speaker 2: good thing, the distribution of wealth and income in the
• 8:43
  Speaker 2: country and where consumer spending comes from is now so
• 8:46
  Speaker 2: skewed that it's not impacting the broader economy in any way, shape,
• 8:51
  Speaker 2: or form right now.
• 8:52
  Speaker 4: Yeah.
• 8:52
  Speaker 2: Let's take a quick break here. When we return... We'll
• 8:57
  Speaker 2: talk a little bit about winter heating costs and El Nino.
• 9:02
  Speaker 2: And then... We're going to talk about brokerages that are
• 9:06
  Speaker 2: rolling out AI agents and whether they are going to
• 9:09
  Speaker 2: help you beat the market and beat your favorite hedge
• 9:12
  Speaker 2: fund manager in terms of performance. We'll talk about that next.
• 9:17
  Speaker 1: Watch the Financial Exchange live every day on YouTube with
• 9:20
  Speaker 1: market moves, breaking business news and analysis throughout the show.
• 9:24
  Speaker 1: Join the live chat and be part of the conversation.
• 9:27
  Speaker 1: This is the Financial Exchange Media Network. Stay connected to
• 9:32
  Speaker 1: the Financial Exchange between shows. Follow us on Instagram for
• 9:36
  Speaker 1: daily clips, market updates, and the business news driving the conversation.
• 9:41
  Speaker 1: This is the Financial Exchange Media Network.
• 9:47
  Speaker 5: The Financial Exchange is a proud partner of the Disabled
• 9:50
  Speaker 5: American Veterans Department of Massachusetts, and this year's 5K is
• 9:55
  Speaker 5: sold out. The race will take place Saturday, November 7th
• 9:59
  Speaker 5: at Fort Independence on Castle Island. We hope you can
• 10:02
  Speaker 5: take this opportunity to consider making a donation.
• 10:05
  Speaker 2: Your gifts help.
• 10:06
  Speaker 5: Provide vital services like free transportation to medical appointments and
• 10:11
  Speaker 5: safe housing for single veterans and their families. Donate today
• 10:14
  Speaker 5: at DAV5K.
• 10:14
  Speaker 2: Boston. That's DAV5K. Boston. Mike, all summer, building just off the
• 10:23
  Speaker 2: coast of California is a weather phenomenon. And in fact,
• 10:30
  Speaker 2: we have live audio. Not live, but we have recorded audio.
• 10:35
  Speaker 2: I am El Nino. All other tropical storms must bow
• 10:40
  Speaker 2: before El Nino. Thank you, Chris. So El Nino, and
• 10:48
  Speaker 2: this is a big El Nino. Some are saying a
• 10:51
  Speaker 2: super El Nino, but we're not quite sure if it's
• 10:53
  Speaker 2: going to get to that level. But we got a
• 10:57
  Speaker 2: piece here from MarketWatch. Winter heating costs are expected to
• 11:00
  Speaker 2: be 8.3% higher than last year.
• 11:02
  Speaker 3: That's it?
• 11:04
  Speaker 2: I don't know how they figured that out.
• 11:05
  Speaker 3: It's going to be like 40% more for me.
• 11:08
  Speaker 2: Here's the thing. It's probably because most people don't use
• 11:10
  Speaker 2: oil heat. The oil heat people are going to be
• 11:13
  Speaker 2: up like 80%.
• 11:13
  Speaker 1: Yeah.
• 11:15
  Speaker 2: Everyone else is going to be up like seven and
• 11:18
  Speaker 2: then it'll average out. So this piece asks the question,
• 11:23
  Speaker 2: could El Nino help? Like, should we be rooting for
• 11:26
  Speaker 2: El Nino?
• 11:27
  Speaker 6: El Nino is Spanish for the Nino.
• 11:33
  Speaker 2: Now, my first rule of weather is you never root
• 11:36
  Speaker 2: for or against any weather.
• 11:41
  Speaker 1: I root for the sun.
• 11:43
  Speaker 2: No, mistake. Yeah, no.
• 11:45
  Speaker 3: Mistake.
• 11:45
  Speaker 2: 75, sonny. No, I will. You get too much of that,
• 11:50
  Speaker 2: just as bad is not.
• 11:51
  Speaker 3: Enough, son.
• 11:52
  Speaker 2: Disagree.
• 11:53
  Speaker 4: I'm firmly in this camp that I know some of
• 11:56
  Speaker 4: the listeners agree with me because they've texted before, but
• 11:58
  Speaker 4: if it is going to be under 50 degrees and
• 12:03
  Speaker 4: we're going to get precipitation, I'd rather the temperature just
• 12:05
  Speaker 4: drop and give me snow.
• 12:07
  Speaker 2: Oh, yeah, of course. No, like the 43-degree rain is
• 12:09
  Speaker 2: the worst weather out there.
• 12:10
  Speaker 3: So that's rooting for weather.
• 12:13
  Speaker 1: Fair.
• 12:14
  Speaker 2: In any case, never root for a storm system. Let's
• 12:18
  Speaker 2: leave it at that.
• 12:19
  Speaker 3: Yeah, sure.
• 12:19
  Speaker 2: Okay. Even though this is more of an underwater heat phenomenon,
• 12:23
  Speaker 2: and you don't really get far in life by saying
• 12:26
  Speaker 2: never root for an underwater heat phenomenon.
• 12:28
  Speaker 3: It's highly specific.
• 12:30
  Speaker 2: It is. In any case, here are the regional impacts,
• 12:33
  Speaker 2: because the U.S. Geological Survey, or not geological, this is,
• 12:37
  Speaker 2: what is USGS? That is the U.S. Geological Survey. Yes. Yes.
• 12:40
  Speaker 2: They have a website on El Nino, and it tells
• 12:45
  Speaker 2: you the impacts in all parts of the country from
• 12:48
  Speaker 2: El Nino. So let's start first with Alaska for our
• 12:52
  Speaker 2: Alaskan listeners. Temperatures tend to be slightly warmer in about
• 12:56
  Speaker 2: 5% to 10% of cases, and they can have slightly
• 12:59
  Speaker 2: higher than normal precipitation.
• 13:02
  Speaker 3: What does that mean in 5% to 10% of cases?
• 13:05
  Speaker 2: Odds generally increase only 5% to 10% for a slightly
• 13:09
  Speaker 2: warmer than normal winter. So it makes it warmer sometimes.
• 13:13
  Speaker 2: But otherwise, there's no statistical anything. Let's move on from Alaska.
• 13:18
  Speaker 2: Our one Alaska listener is probably good now.
• 13:20
  Speaker 3: We've got dozens up there, Chuck.
• 13:22
  Speaker 2: We did have our coppersmith texted in today.
• 13:24
  Speaker 3: Yeah, where does he live?
• 13:26
  Speaker 2: I don't know. Alaska. There you go. But no, our
• 13:30
  Speaker 2: coppersmith did text in. We were talking about the cost
• 13:33
  Speaker 2: of building homes. He says.
• 13:35
  Speaker 4: Again, it could be any number of our different coppersmiths
• 13:37
  Speaker 4: who are listeners.
• 13:38
  Speaker 2: We are big in the copper community. You're telling me
• 13:41
  Speaker 2: I'm a coppersmith for the last 53 years making lighting.
• 13:44
  Speaker 2: Three by eight sheet of copper is now $ 240 before
• 13:47
  Speaker 2: COVID paid $ 85 a sheet. Yeah. So, yeah.
• 13:51
  Speaker 3: Back to El Nino.
• 13:52
  Speaker 2: Back to El Nino. For the Midwest... El Nino winters
• 13:55
  Speaker 2: are commonly but not always warmer than usual across the Midwest.
• 13:58
  Speaker 2: That would be good for heating costs. But they use gas.
• 14:01
  Speaker 3: There, so it doesn't matter as much.
• 14:02
  Speaker 2: Either way, still better for heating costs. Tendency for Michigan, Ohio,
• 14:07
  Speaker 2: and Indiana to be drier and parts of Iowa to
• 14:10
  Speaker 2: be wetter. Very cold winters lead to more lake ice
• 14:15
  Speaker 2: and its persistence into spring, so warmer ones you don't
• 14:17
  Speaker 2: have as much lake ice. As such, it changes the
• 14:21
  Speaker 2: climate in the area a little bit for that. North
• 14:24
  Speaker 2: Central U.S., if you're not familiar with that term, Colorado, Kansas, Montana, Nebraska,
• 14:29
  Speaker 2: the Dakotas, and Wyoming.
• 14:30
  Speaker 3: Got it.
• 14:31
  Speaker 2: Winter temperatures tend to be above average there, and precipitation
• 14:36
  Speaker 2: response is more variable. Typically, wetter conditions across the southern portion,
• 14:41
  Speaker 2: so Colorado, Nebraska, and Kansas, and in particular with Colorado,
• 14:44
  Speaker 2: that means way more snow in the Rockies.
• 14:47
  Speaker 4: That would be good because they had the driest year
• 14:49
  Speaker 4: on record in terms of snowfall in the Colorado Rockies
• 14:52
  Speaker 4: this winter.
• 14:53
  Speaker 2: It was terrible last year. I remember talking to people
• 14:55
  Speaker 2: who went skiing out there, and they were like, it
• 14:56
  Speaker 2: was not worth going. So Colorado can get a lot
• 15:00
  Speaker 2: more snow, but drier conditions further north reduce snow accumulation
• 15:06
  Speaker 2: in the Dakotas. Northeast U.S.? That's us. That's us.
• 15:11
  Speaker 3: Let's go.
• 15:12
  Speaker 2: Let's see. It tends to result in storms that track
• 15:18
  Speaker 2: further south and east, so we don't get quite as many.
• 15:22
  Speaker 2: But when we do, they tend to be more nor'easters
• 15:26
  Speaker 2: that bring more precipitation along with them. Fabulous.
• 15:30
  Speaker 5: Okay.
• 15:31
  Speaker 3: Well, it's not all bad.
• 15:33
  Speaker 2: But it tends to be warmer, and so it may
• 15:36
  Speaker 2: come in the form of more rain than snow.
• 15:38
  Speaker 1: Great.
• 15:39
  Speaker 2: So it's unclear there for the Northeast.
• 15:42
  Speaker 4: Warmer would be good, though.
• 15:44
  Speaker 2: Yes, warmer would be good. Let's see. The Northwest, it
• 15:47
  Speaker 2: doesn't say anything about temperatures. It just talks about atmospheric rivers.
• 15:53
  Speaker 4: Can we also just talk about this, that this is
• 15:55
  Speaker 4: all based on statistical history and may not be indicative of?
• 16:00
  Speaker 4: I mean, I know there's theory behind it, but could
• 16:03
  Speaker 4: completely break the cycle.
• 16:04
  Speaker 2: I've got Hawaii. They don't really heat in the winter
• 16:08
  Speaker 2: because they don't really have winter. So we're going to
• 16:11
  Speaker 2: disregard them. South Central U.S., Louisiana, New Mexico, Oklahoma, and Texas.
• 16:17
  Speaker 2: They tend to, let's see. Most of the region experiences
• 16:25
  Speaker 2: more frequent precipitation events, and some may bring heavy rainfall
• 16:29
  Speaker 2: or snowfall. But for New Mexico, above normal precipitation tends
• 16:33
  Speaker 2: to occur less frequently in northwest and north central areas.
• 16:37
  Speaker 2: Temperature changes. Cool season temperatures influence blah, blah, blah, blah, blah, blah. Ooh,
• 16:43
  Speaker 2: here we go. Uh, outbreaks of extreme cold temperatures like
• 16:47
  Speaker 2: the February, 2021 cold air outbreak are less likely because
• 16:51
  Speaker 2: they occur when the jet stream is more weak and wobbly.
• 16:53
  Speaker 2: And it tends to be stronger during El Nino events.
• 16:56
  Speaker 4: Wow.
• 16:56
  Speaker 2: Southeast us, Alabama, Arkansas. We know what the Southeast is. Uh,
• 17:00
  Speaker 2: let's see. Winter storms, jet stream with deeper troughs and storms,
• 17:05
  Speaker 2: the track further South and East. So higher precipitation on
• 17:09
  Speaker 2: the Gulf coast and Atlantic seaboard, uh, Snow and ice
• 17:13
  Speaker 2: not as strong. Doesn't have any track there as far
• 17:16
  Speaker 2: as snow and ice. And it doesn't say anything about heat.
• 17:21
  Speaker 4: I'm going to take away the one thing that matters
• 17:23
  Speaker 4: for my life, which is that on average, El Nino
• 17:26
  Speaker 4: years in the Northeast are a little bit warmer.
• 17:30
  Speaker 3: Than, again, average.
• 17:32
  Speaker 4: And maybe less snowfall, although when it does come, more
• 17:38
  Speaker 4: nor'easters rather than just regular weather events.
• 17:42
  Speaker 2: So there's that as far as it relates to El
• 17:47
  Speaker 2: Nino helping with heating. And again, like, who knows? Because
• 17:52
  Speaker 2: every year is different and every weather system is different.
• 17:54
  Speaker 2: So just because something statistically points in one direction doesn't
• 17:58
  Speaker 2: mean it's always going to do that. It's kind of
• 17:59
  Speaker 2: like when you're talking about, you know, seasonality charts for
• 18:02
  Speaker 2: the S & P 500 and people are like, oh,
• 18:04
  Speaker 2: September's coming. I did it this year, though. September's the
• 18:07
  Speaker 2: worst year, the worst month on record. So in May, dude.
• 18:11
  Speaker 2: And then you've got to go away, I hear.
• 18:15
  Speaker 1: Go away.
• 18:16
  Speaker 2: Let me tell you what happened in September of this year, Michael. September,
• 18:20
  Speaker 2: the S & P 500 opened at 76.35. It closed
• 18:25
  Speaker 2: at 76.51. Basically went nowhere. Neither bad nor good. Where
• 18:32
  Speaker 2: are you going? Slightly upward. Nowhere. That was the S
• 18:35
  Speaker 2: & P 500 in September. So just because, again, seasonality
• 18:40
  Speaker 2: of weather, seasonality of El Nino, seasonality of stocks, just
• 18:43
  Speaker 2: because it does things historically doesn't mean it's going to
• 18:46
  Speaker 2: necessarily do it in that particular year because it's a
• 18:48
  Speaker 2: distribution of outcomes. It's not just, as Tucker said, what
• 18:54
  Speaker 2: was it, Tucker?
• 18:54
  Speaker 5: Selling May, dude.
• 18:56
  Speaker 2: Go away.
• 18:59
  Speaker 4: All of our Midwest listeners must be so confused as
• 19:02
  Speaker 4: to what's going on here. Next, we're going to list
• 19:05
  Speaker 4: weird Massachusetts town names.
• 19:09
  Speaker 2: Yes, here's why Worcester and Dorchester are pronounced the way
• 19:12
  Speaker 2: they are, despite having just a one-letter difference.
• 19:15
  Speaker 3: Yeah, next we're going to Haverhill.
• 19:17
  Speaker 2: Selling me, kid. Let's take a quick break here, and
• 19:20
  Speaker 2: when we come back, we're going to be doing Wall
• 19:22
  Speaker 2: Street Watch next. Whatever.
• 19:39
  Speaker 1: Bringing the latest financial news straight to your radio every day.
• 19:43
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
• 19:49
  Speaker 4: Time out.
• 19:50
  Speaker 1: For Wall Street Watch. Tracking the stocks, the data, and
• 19:53
  Speaker 1: the headlines driving markets so far today. Right here on
• 19:57
  Speaker 1: the Financial Exchange Radio Network.
• 19:59
  Speaker 5: Busy week on tap for Wall Street. That includes two
• 20:03
  Speaker 5: inflation reports and big bank earnings. Energy prices are also
• 20:07
  Speaker 5: in focus after Ukraine claimed Russia's struck its energy infrastructure
• 20:11
  Speaker 5: despite President Trump declaring an energy ceasefire between the two countries.
• 20:16
  Speaker 5: Right now, the Dow is up half a percent. S
• 20:19
  Speaker 5: & P 500 is dipping by only four points. NASDAQ
• 20:22
  Speaker 5: is down about a third of a percent to 96
• 20:24
  Speaker 5: points lower. Russell 2000 down about a quarter percent. 10-year
• 20:28
  Speaker 5: Treasury is not doing anything because the bond market is
• 20:31
  Speaker 5: closed due to Columbus Day. Crude oil up 2%, trading
• 20:35
  Speaker 5: at $ 93, while Brent is at $ 106 a barrel. We
• 20:40
  Speaker 5: have an update on Starbucks' reported interest in Chipotle after
• 20:43
  Speaker 5: the coffee chain shut down those rumors in a statement
• 20:46
  Speaker 5: this morning confirming it is not buying Chipotle. Chipotle shares
• 20:50
  Speaker 5: are down 4%. Meanwhile, according to the Wall Street Journal,
• 20:53
  Speaker 5: Amazon is in talks to acquire AI startup Descartes in
• 20:57
  Speaker 5: a deal that could be valued at around $ 7 billion.
• 21:01
  Speaker 5: Descartes software makes it easier for developers to switch between
• 21:05
  Speaker 5: different AI chips. Wall Street Journal also reported that quantum
• 21:09
  Speaker 5: computing company IonQ agreed to an all-stock deal to buy
• 21:12
  Speaker 5: cybersecurity firm Elicity for up to $ 1.
• 21:15
  Speaker 2: 3 billion.
• 21:17
  Speaker 5: IonQ shares are down by 9%. And tomorrow morning, ahead
• 21:20
  Speaker 5: of the opening bell, we'll see earnings from JPMorgan Chase,
• 21:24
  Speaker 5: Goldman Sachs, Wells Fargo, and Citigroup for the big banks.
• 21:27
  Speaker 5: Outside of that sector, Johnson & Johnson, UnitedHealth, and Domino's
• 21:31
  Speaker 5: will also report.
• 21:33
  Speaker 2: I'm Tucker Sullivan.
• 21:34
  Speaker 5: That is Wall Street Watch.
• 21:36
  Speaker 2: Mike, we got a piece here from the New York Times.
• 21:38
  Speaker 2: Millions lose private Medicare plans and face rising costs. What
• 21:42
  Speaker 2: are we seeing here?
• 21:43
  Speaker 4: So private Medicare plans have been growing for the last
• 21:47
  Speaker 4: few decades. It's kind of championed by both sides of
• 21:50
  Speaker 4: the aisle. You know, hey, privatization of Medicare and more
• 21:53
  Speaker 4: companies competing here can help with costs. Hasn't really happened
• 21:56
  Speaker 4: that way. But by 2023, more than half of people
• 22:00
  Speaker 4: eligible to enroll had signed up for a private Medicare plan.
• 22:05
  Speaker 4: So like a Medicare Advantage plan is what we're talking
• 22:07
  Speaker 4: about here. Since then, because of costs going pretty wild,
• 22:14
  Speaker 4: because of government subsidies running out, because of some abuse
• 22:19
  Speaker 4: by insurance companies over billing the Medicare program for the
• 22:22
  Speaker 4: services they're providing, new drugs coming on board, these have
• 22:26
  Speaker 4: gotten a lot of focus from legislators as well as
• 22:31
  Speaker 4: the general public. And the reaction on the part of
• 22:33
  Speaker 4: the health insurance companies because, by the way, they are
• 22:36
  Speaker 4: not making a ton of money on these, has been
• 22:38
  Speaker 4: to pull back on them. They are pretty dramatically canceling plans,
• 22:42
  Speaker 4: and especially if you live in a rural area of
• 22:45
  Speaker 4: the country that's not serviced by a lot of hospitals,
• 22:48
  Speaker 4: there are currently 187 counties in which insurers are not
• 22:56
  Speaker 4: offering any Medicare Advantage plans, which is.
• 22:58
  Speaker 3: Pretty wild because the average... The average.
• 23:01
  Speaker 4: Beneficiary, I think, is covered by like 40 different Medicare
• 23:03
  Speaker 4: Advantage plan options. And so for 187 counties to not
• 23:07
  Speaker 4: have a single one is pretty wild.
• 23:12
  Speaker 3: Medicare is a tricky program. And I think what I
• 23:15
  Speaker 3: would just.
• 23:15
  Speaker 4: Broadly say is that health care costs and health insurance
• 23:20
  Speaker 4: when you retire is just one of the more complicated
• 23:24
  Speaker 4: items to navigate. If you're retiring before Medicare age, what
• 23:28
  Speaker 4: your options look like, right? Am I going on an
• 23:30
  Speaker 4: ACA plan or do I stick with my COBRA insurance
• 23:34
  Speaker 4: from my previous employer? Do I consider a non-ACA compliant
• 23:38
  Speaker 4: plan and kind of roll the dice with one of
• 23:40
  Speaker 4: these policies that doesn't cover a whole lot? Once I'm
• 23:44
  Speaker 4: on Medicare, how it actually works, right? Taking it out
• 23:48
  Speaker 4: of my Social Security versus cutting a check. What are
• 23:50
  Speaker 4: the drawbacks of one versus the other? And then, of course,
• 23:54
  Speaker 4: the dreaded penalties for earning too much money in any
• 23:57
  Speaker 4: given year really add a lot of complexity to the
• 23:59
  Speaker 4: whole scenario. I've seen a lot of people run afoul
• 24:03
  Speaker 4: of these rules by accident. I've seen a lot of
• 24:05
  Speaker 4: people be able to take advantage of, for instance, ACA
• 24:10
  Speaker 4: plans because they can structure their income in a way
• 24:13
  Speaker 4: that they actually get pretty cheap health insurance before even
• 24:16
  Speaker 4: the age of 65. The point that I would make
• 24:19
  Speaker 4: about it is, one, if you are assuming only a
• 24:23
  Speaker 4: couple percentage point inflation rate on your healthcare costs in retirement, Don't,
• 24:28
  Speaker 4: because it probably ain't going to happen. There seems to
• 24:31
  Speaker 4: me to be only one direction that healthcare costs can
• 24:33
  Speaker 4: possibly go over the next several decades, and it's up
• 24:36
  Speaker 4: probably faster than 2%.
• 24:37
  Speaker 2: Not necessarily.
• 24:39
  Speaker 3: AI is going to fix it all?
• 24:41
  Speaker 2: I'm not saying AI is going to fix it all,
• 24:44
  Speaker 2: but I'm saying GLP-1s and their increased adoption might really
• 24:48
  Speaker 2: change the game as far as, you think about the
• 24:51
  Speaker 2: stuff that's really expensive for seniors, and a lot of
• 24:55
  Speaker 2: it is stuff that can be prevented if someone's weight
• 25:00
  Speaker 2: gets back into a more normal range.
• 25:03
  Speaker 4: I'm optimistic there, Chuck, but I think that would be
• 25:06
  Speaker 4: entirely counteracted by just the number of seniors demanding more
• 25:10
  Speaker 4: general health care compared to the supply of providers.
• 25:14
  Speaker 3: So that's to me where we are headed.
• 25:17
  Speaker 4: If you have questions about how your financial strategy is
• 25:22
  Speaker 4: set up to handle your healthcare coverage in retirement, everything
• 25:26
  Speaker 4: from your health insurance itself to your long-term care costs
• 25:30
  Speaker 4: and how those could cause a real problem for you.
• 25:34
  Speaker 4: Give the folks at Armstrong Advisory Group a call. Believe
• 25:36
  Speaker 4: it or not, this is what the folks here do
• 25:39
  Speaker 4: with our clients regularly, is to try and map all
• 25:41
  Speaker 4: this stuff out and understand, okay, you're retiring at age 63,
• 25:45
  Speaker 4: earlier than you thought. How are you going to get
• 25:47
  Speaker 4: your coverage? Where is it going to come from? What's
• 25:49
  Speaker 4: it going to cost? And how is that going to
• 25:50
  Speaker 4: detract from or contribute to your financial success in the future.
• 25:54
  Speaker 4: Same goes for long-term care potential costs and all of
• 25:57
  Speaker 4: these different aspects. Do I need insurance against it?
• 25:59
  Speaker 3: Should I be.
• 26:00
  Speaker 4: Self-insuring and just absorbing that risk myself? Give us a ring, 800-393-4001,
• 26:04
  Speaker 4: and allow us to build a customized strategy for your
• 26:06
  Speaker 4: financial future. Again, 800-393-4001, or you can book a time
• 26:08
  Speaker 4: for us to call you back at armstrongadvisory.com.
• 26:20
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 26:23
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 26:25
  Speaker 1: Armstrong guide is specific financial, legal, or tax advice. Consult
• 26:28
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 26:31
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 26:34
  Speaker 1: advisory services.
• 26:36
  Speaker 2: We got a piece in Bloomberg Opinion. It's titled, Robinhood's
• 26:40
  Speaker 2: AI Agents Won't Help You Beat the Market. And so
• 26:45
  Speaker 2: here's the thing. Before we go further, I had to
• 26:48
  Speaker 2: look this up just because I wasn't exactly sure what
• 26:52
  Speaker 2: Robin hood had put out there to this point, as
• 26:55
  Speaker 2: far as, Hey, what's actually available because you hear like, Hey,
• 26:58
  Speaker 2: Robin hood's making AI agents available for, you know, Robin
• 27:01
  Speaker 2: hood account owners. And you're like, well, what does that
• 27:04
  Speaker 2: actually mean? And at this point, the big stuff that
• 27:11
  Speaker 2: has been rolled out so far this year, uh, I
• 27:16
  Speaker 2: kind of segment into two different areas. The first is, uh,
• 27:21
  Speaker 2: you can have agents that help you to build a portfolio,
• 27:25
  Speaker 2: compile watch lists, uh, look at, you know, future earnings
• 27:29
  Speaker 2: and things like that, to which I say, aside from
• 27:31
  Speaker 2: like the building portfolio piece, which I have no idea
• 27:33
  Speaker 2: if it's any good at it or not. Sure. All
• 27:36
  Speaker 2: the other stuff you can do through a bunch of
• 27:38
  Speaker 2: free services anyways. True. Like you can pull up, like
• 27:44
  Speaker 2: I can pull up completely for free. hey, here are
• 27:46
  Speaker 2: the companies that are going to have earnings this week.
• 27:51
  Speaker 2: I don't need an agent to do that for me.
• 27:54
  Speaker 2: It doesn't save me any time because I've bookmarked the
• 27:56
  Speaker 2: page and I know where to go and ba-boop, I'm there.
• 28:00
  Speaker 2: So some of this I look at and I'm like,
• 28:02
  Speaker 2: I'm not really sure what's there. They also launched what's
• 28:06
  Speaker 2: called agentic trading back in May. And this you can
• 28:12
  Speaker 2: say to the agent, OK, keep my portfolio balanced like
• 28:15
  Speaker 2: to its target allocation, or I want you to trade
• 28:20
  Speaker 2: like these types of stocks. And it can do that
• 28:25
  Speaker 2: for you. The other thing that they're doing, which I
• 28:27
  Speaker 2: think is what people think of when they think of
• 28:29
  Speaker 2: agentic trading, is what Robinhood's calling loops, which they have
• 28:32
  Speaker 2: not yet made available. And this is more like how
• 28:36
  Speaker 2: a quant strategy typically functions, which is you give specific
• 28:41
  Speaker 2: conditions and then Robinhood goes and trades stocks when those
• 28:46
  Speaker 2: conditions are satisfied. And this is the one that I
• 28:49
  Speaker 2: actually think is the most dangerous out of any of these.
• 28:52
  Speaker 2: I think all of these have the possibility of either
• 28:54
  Speaker 2: going very well or very badly, depending on whether you
• 28:59
  Speaker 2: have an edge or not. And that's the piece that matters,
• 29:01
  Speaker 2: because in this loops idea, hey, if you set criteria
• 29:05
  Speaker 2: that you think are going to end up making you money,
• 29:08
  Speaker 2: and it ends up losing you money, Robin is just
• 29:10
  Speaker 2: going to keep running those until whenever. Maybe they give
• 29:14
  Speaker 2: you like a warning at some point, like, hey, your
• 29:16
  Speaker 2: last three trades lost money or something, but like, I
• 29:19
  Speaker 2: don't know. The point that I come back to on
• 29:22
  Speaker 2: all of this is Just like any other investing tool,
• 29:26
  Speaker 2: the tool itself, it's like when you play golf. Tucker,
• 29:29
  Speaker 2: you love golf, right?
• 29:30
  Speaker 3: Confirmed.
• 29:31
  Speaker 2: Tucker, have you ever made a putt because of your putter? Yes. No. No.
• 29:40
  Speaker 6: Wrong answer okay I'll shove my mic the big thing
• 29:43
  Speaker 6: like if you think let me ask you this have
• 29:46
  Speaker 6: you ever missed a shot because of a club no
• 29:50
  Speaker 6: definitely not exactly like getting new clubs isn't going to
• 29:55
  Speaker 6: fix your game you've got to fix your game. And
• 29:58
  Speaker 6: it's the same thing with investing.
• 30:00
  Speaker 4: Yeah, I think an AI agent may make it easier
• 30:03
  Speaker 4: to execute a quantitative or other day trading strategy, whatever
• 30:09
  Speaker 4: you might be trying to do.
• 30:11
  Speaker 2: Even a longer term strategy, sure.
• 30:13
  Speaker 4: It might make it so that you need to spend
• 30:15
  Speaker 4: fewer hours of the day on it. But if you
• 30:18
  Speaker 4: think that it's going to come up with a strategy
• 30:20
  Speaker 4: that's going to beat the markets, I just don't really
• 30:22
  Speaker 4: see how that's going to work.
• 30:23
  Speaker 3: Because guess what?
• 30:25
  Speaker 4: Beating the markets is all about having some strategic advantage
• 30:29
  Speaker 4: over everyone else. And if suddenly AI agents become a
• 30:32
  Speaker 4: strategic advantage in markets, then everyone's going to employ them.
• 30:36
  Speaker 2: Right. I say this a lot. Alpha, meaning the ability
• 30:40
  Speaker 2: to outperform a market, is private information. It's an edge
• 30:46
  Speaker 2: you can point to that you have that no one
• 30:48
  Speaker 2: else has. Now, it's not non-material. When I say private information,
• 30:55
  Speaker 2: people are like, oh, that means insider trading. No, I'm
• 30:57
  Speaker 2: not talking material, non-public information. That's the illegal stuff. What
• 31:01
  Speaker 2: I'm talking about is you talk to any hedge fund
• 31:04
  Speaker 2: that actually outperforms consistently, and they'll say, here's our model.
• 31:09
  Speaker 2: Here's the edge it exploits. Here's how it works. Or
• 31:13
  Speaker 2: they won't tell you. They won't tell you that, but
• 31:15
  Speaker 2: it's something that they have that is internal to them
• 31:18
  Speaker 2: because alpha is private information. And so I'll say the
• 31:21
  Speaker 2: same thing on this that I say to anyone. If
• 31:24
  Speaker 2: you want to be a successful trader, meaning that you
• 31:27
  Speaker 2: beat the market after accounting for all your different expenses,
• 31:30
  Speaker 2: you need to be able to verbalize... In 45 seconds,
• 31:35
  Speaker 2: if you can't tell it to your three-year-old it's not
• 31:37
  Speaker 2: actually an edge, you need to say, here's my edge,
• 31:41
  Speaker 2: here's how it works, and here's how I deploy it.
• 31:44
  Speaker 2: And if you can't do that, then you don't actually
• 31:47
  Speaker 2: have an edge. Let's take a quick break. When we return,
• 31:51
  Speaker 2: we've got Stack Roulette coming up next.
• 31:54
  Speaker 1: Markets, money, business. The Financial Exchange brings it together every
• 31:59
  Speaker 1: day on YouTube. Watch live, join the live chat, or
• 32:02
  Speaker 1: catch up with video highlights and shorts at youtube.com slash thefinancialexchange.
• 32:07
  Speaker 1: This is the Financial Exchange Media Network. The business news
• 32:11
  Speaker 1: doesn't stop, and neither does our coverage. Watch the Financial
• 32:15
  Speaker 1: Exchange live on YouTube, or catch up later with full shows,
• 32:18
  Speaker 1: video highlights, and shorts. Subscribe today. This is the Financial
• 32:22
  Speaker 1: Exchange Media Network.
• 32:39
  Speaker 2: All right, Mike, what do you got for me for
• 32:40
  Speaker 2: Stack Roulette today?
• 32:42
  Speaker 4: We keep having these stories that we're covering about AI
• 32:45
  Speaker 4: changing the price of your Big Mac and groceries. And
• 32:47
  Speaker 4: I think these stories are a real threat, but I
• 32:50
  Speaker 4: also don't think that the coverage is really accurately, I guess,
• 32:56
  Speaker 4: covering what we are talking about here. And so there
• 33:00
  Speaker 4: are a number of things, AI included, that could allow
• 33:03
  Speaker 4: businesses to to better individualize prices to you. And I
• 33:08
  Speaker 4: find that to be distasteful, maybe illegal in some places,
• 33:13
  Speaker 4: and I hope that companies don't do it. So here
• 33:15
  Speaker 4: would be the idea is companies some way have a
• 33:19
  Speaker 4: means of tracking who you are, Chuck. Maybe it's because
• 33:22
  Speaker 4: you have the app on your phone and they know
• 33:23
  Speaker 4: when you walk into their location.
• 33:26
  Speaker 3: Maybe it's because of facial recognition or other patterns.
• 33:29
  Speaker 2: They think I'm good looking?
• 33:31
  Speaker 3: Well, no, they think that you're a sucker who's willing
• 33:33
  Speaker 3: to pay.
• 33:34
  Speaker 2: They're not wrong.
• 33:35
  Speaker 4: And they dynamically shift those prices live because, oh, it's
• 33:39
  Speaker 4: Chuck who is shopping right now and he is more
• 33:42
  Speaker 4: willing to pay for rhubarb this month.
• 33:45
  Speaker 3: Than your average Joe.
• 33:48
  Speaker 2: I don't know.
• 33:49
  Speaker 3: That, to me, is really problematic.
• 33:51
  Speaker 2: Not a rhubarb fan.
• 33:52
  Speaker 4: And I think that companies should have to disclose if
• 33:54
  Speaker 4: they're doing it.
• 33:56
  Speaker 2: Why would they have to disclose? Why disclose it? Like,
• 34:00
  Speaker 2: There's nothing in Americans' behavior in the last 15 years
• 34:05
  Speaker 2: that suggests we would change our behavior in any way.
• 34:08
  Speaker 3: Right. Agreed.
• 34:09
  Speaker 4: And so I'd prefer it get outlawed, but I don't
• 34:11
  Speaker 4: think that's going to happen. And so instead, we're going
• 34:13
  Speaker 4: to get left with this disclosure. I think it's already
• 34:15
  Speaker 4: required in places like New York.
• 34:17
  Speaker 3: On the other hand, if McDonald's wants to say, hey.
• 34:21
  Speaker 4: Go and analyze all of the, uh, you know, demographic
• 34:26
  Speaker 4: info from every zip code in the country, along with
• 34:28
  Speaker 4: current weather patterns to price your food at different rates
• 34:32
  Speaker 4: based on your franchise location. And here is the tool
• 34:35
  Speaker 4: that we're going to roll out to our franchisees to
• 34:37
  Speaker 4: do that. I have much less of a problem with that.
• 34:39
  Speaker 4: It's not individualized. It's regional based. It's based on, Hey,
• 34:43
  Speaker 4: I have a McDonald's in Wellesley versus I have one in, uh,
• 34:49
  Speaker 4: What's one of the what's the opposite of Wellesley in Massachusetts?
• 34:53
  Speaker 4: I don't need to offend any towns.
• 34:54
  Speaker 2: But whatever the opposite opposite, like from a demographic standpoint. Yeah.
• 35:00
  Speaker 2: I don't know.
• 35:02
  Speaker 4: We don't need to name a town. You know what
• 35:04
  Speaker 4: I'm talking about here? I have less of a problem
• 35:06
  Speaker 4: with that. I'm okay with these companies doing that.
• 35:10
  Speaker 2: I'm not okay with them. They already do that. Again,
• 35:13
  Speaker 2: gas is more expensive in wealthier towns. We see this.
• 35:18
  Speaker 4: We see this all the time, and that's my point,
• 35:20
  Speaker 4: is that if you're using AI to assist you with
• 35:22
  Speaker 4: that analysis.
• 35:22
  Speaker 2: And say- You don't need AI to do that.
• 35:24
  Speaker 4: No, but it might make it easier, especially if you're
• 35:26
  Speaker 4: trying to do it at McDonald's high level. If you're
• 35:28
  Speaker 4: trying to do it for every franchisee across the country
• 35:31
  Speaker 4: and provide them with the tools, then AI is going
• 35:33
  Speaker 4: to make it a lot easier to analyze weather patterns
• 35:35
  Speaker 4: and everything else. I don't have as much of an
• 35:38
  Speaker 4: issue with that, and we're describing it all under the
• 35:40
  Speaker 4: same umbrella, and it's just not. There's a significant difference
• 35:44
  Speaker 4: between tailoring a price to Chuck Zada based on identifying
• 35:48
  Speaker 4: him and all sorts of privacy concerns that I have
• 35:50
  Speaker 4: about that compared to identifying Chuck as a constituent of
• 35:55
  Speaker 4: this demographic neighborhood and therefore charging him and every other
• 35:59
  Speaker 4: person in that area a higher price for the good.
• 36:02
  Speaker 2: I just think that when you look at this, this
• 36:05
  Speaker 2: gets at why people hate the economy now. It's just
• 36:11
  Speaker 2: more of, hey, I'm buying the same thing, but it
• 36:15
  Speaker 2: feels like I'm getting hosed. Because the private equity firm
• 36:20
  Speaker 2: came in and quadrupled the cost of my dentist's office.
• 36:24
  Speaker 3: This is going to sound like a weird comparison.
• 36:26
  Speaker 4: I went to India for a vacation over a decade ago.
• 36:30
  Speaker 2: Sure.
• 36:31
  Speaker 3: And I loved the trip. I loved everything about the trip.
• 36:35
  Speaker 3: I really enjoyed.
• 36:36
  Speaker 2: Sure.
• 36:36
  Speaker 3: I did feel like I was being ripped off everywhere
• 36:38
  Speaker 3: I went. Why?
• 36:40
  Speaker 4: Just like, hey, you know, Clearly, white American tourists, we're
• 36:44
  Speaker 4: going to charge him more for every product that's out
• 36:47
  Speaker 4: there on street food and everything else.
• 36:50
  Speaker 3: Maybe it was just in my head.
• 36:52
  Speaker 4: Right, yeah, I didn't care ultimately. It made me uncomfortable
• 36:55
  Speaker 4: at first, and then I thought about it. I was like, okay,
• 36:57
  Speaker 4: this is not a big.
• 36:58
  Speaker 2: Deal if I pay an extra. It's 10 rupees more.
• 37:00
  Speaker 2: It doesn't matter.
• 37:00
  Speaker 3: Yeah, I just paid an extra 10 rupees for a mango.
• 37:03
  Speaker 3: I just don't care.
• 37:05
  Speaker 4: That's the feeling that everyone has about the economy right
• 37:07
  Speaker 4: now is everywhere I go, I feel like I'm getting
• 37:09
  Speaker 4: ripped off.
• 37:10
  Speaker 2: And this is just more of the same. It's just...
• 37:14
  Speaker 2: It's not, oh, we're going to build a better product
• 37:16
  Speaker 2: to attract people. It's, well, here's the same product, and
• 37:19
  Speaker 2: how can we extract more of the consumer surplus onto
• 37:22
  Speaker 2: the producer side of things?
• 37:24
  Speaker 3: Right.
• 37:25
  Speaker 2: It's taking away that consumer surplus of like, oh, I
• 37:28
  Speaker 2: feel like I got a deal, and... Giving it to
• 37:32
  Speaker 2: the producer. And it just feels like crap. So there's that.
• 37:40
  Speaker 2: I want to talk about bananas. There's always money in
• 37:46
  Speaker 2: the banana stand, Michael. Yes, there is. We know this.
• 37:49
  Speaker 2: Do you know the average American eats 80 bananas a year?
• 37:53
  Speaker 2: I am at least double that. I feel like I'm double,
• 37:57
  Speaker 2: not triple. But the big thing is that bananas are
• 38:01
  Speaker 2: typically one of the most affordable fruits. And because they
• 38:05
  Speaker 2: have to get transported a ton and blah, blah, blah
• 38:08
  Speaker 2: and everything, the price is moving up. And so you've
• 38:11
  Speaker 2: got bananas. Are bananas the new eggs? Both yellow in
• 38:16
  Speaker 2: certain situations. Let's take a quick break and we'll try
• 38:20
  Speaker 2: to answer better tomorrow on the Financial Exchange.