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Money Monday with Brian James · Brian Thomas

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Speaker 1: Station eight oh five on a Monday, typical, a little
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Speaker 1: fifty five krec morning show. It is that time a
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Speaker 1: week we do a thing we call Money Monday with
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Speaker 1: Brian James from All with Financially. He's a financial planner
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Speaker 1: and he deals with financial planning and it's a good
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Speaker 1: thing to have one because well sometimes you need some
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Speaker 1: sound advice and somebody to keep you from doing the
0:22
Speaker 1: wrong thing. Welcome back, Brian James. Always love having you
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Speaker 1: on the show, sir, Thank you.
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Speaker 2: Love being here.
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Speaker 3: It's always a good time talking about whatever is we're
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Speaker 3: going to talk about today. Well, first economy, earnings and
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Speaker 3: so on. What's on your mind?
0:34
Speaker 1: Well before we get to the second quarter company earnings
0:38
Speaker 1: reports that are going to be coming out, I guess
0:39
Speaker 1: around this time I got to ask you a question.
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Speaker 1: Since I did a two week staycation and you're a
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Speaker 1: financial planner, do you ever talk to your clients about
0:48
Speaker 1: what they're going to do in retirement? Is that ever
0:51
Speaker 1: a subject that comes up? I mean everyone thing, okay,
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Speaker 1: but I mean this one thing to plan financially and
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Speaker 1: hope that you are going to be financially set for tirement.
1:00
Speaker 1: And that's your primary role. But there's something that transcends
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Speaker 1: the money, and that is what do you do with
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Speaker 1: your time in retirement? And I kind of found it
1:08
Speaker 1: out over the last couple of weeks. I better get
1:11
Speaker 1: a damn hobby man.
1:14
Speaker 3: Yeah, that calendar looks pretty long when there's nothing on it.
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Speaker 3: So yeah, No, that's an extremely important topic. It's one
1:20
Speaker 3: thing and most people tend to kind of fixate on
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Speaker 3: the money. Am I going to be able to pay
1:24
Speaker 3: my bills? Am I going to run out of money? What
1:25
Speaker 3: if the market does this? What if interest rates do that?
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Speaker 3: Or gas prices a blah blah blah. What they don't
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Speaker 3: do is talk about what is it going to feel
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Speaker 3: like when it's Tuesday morning, ten o'clock and my spouse
1:35
Speaker 3: and I are both on our fourth cup of coffee
1:37
Speaker 3: staring at each other from either end of the couch.
1:39
Speaker 3: So that is not when we tend to have time.
1:43
Speaker 3: When we have a vacuum of time, we tend to
1:45
Speaker 3: fill that space with money, with spending. And there's nothing
1:48
Speaker 3: wrong with that, but it should be part of your
1:50
Speaker 3: financial plan. There may be things that you're going to
1:52
Speaker 3: do that you absolutely love doing, but you don't do
1:55
Speaker 3: them very often because you simply don't have time. You've
1:57
Speaker 3: been raising kids, you've been creating a career, and all
2:00
Speaker 3: those different things. Eventually some of those things take care
2:03
Speaker 3: of themselves and move on and move up, up and
2:05
Speaker 3: out of the house, and then all of a sudden,
2:07
Speaker 3: you have the time. So, for example, if travel is
2:09
Speaker 3: your thing, I always tell people, you know, think about
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Speaker 3: what you spend. Is it beach trips once a year? Well,
2:14
Speaker 3: how many more times will you do that? When you
2:16
Speaker 3: can do it whenever you want and it's no longer
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Speaker 3: limited to just the summer. Maybe that's once a quarter,
2:21
Speaker 3: so we need to multiply your travel budget by four.
2:23
Speaker 3: Or maybe you've been dying to get out and go
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Speaker 3: see the world, Well that's a much bigger you know.
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Speaker 3: Now we're talking twenty twenty five thirty thousand dollars per
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Speaker 3: trip based.
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Speaker 2: On what you want to do it.
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Speaker 3: And it doesn't mean you can't do it, but you
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Speaker 3: absolutely have to budget and make sure it's going to
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Speaker 3: fit along with paying the electric bill and buying groceries.
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Speaker 1: Okay, well, and personally speaking, and I travel is something
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Speaker 1: that immediately jumps to my mind because I'm not like
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Speaker 1: what anybody would consider a world travel or by any respect,
2:47
Speaker 1: and don't really a whole lot of designs to do that.
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Speaker 1: But I think maybe one of the more critical elements
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Speaker 1: is that when you do have the time that is
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Speaker 1: something you might want to start doing air go, You're
2:58
Speaker 1: going to need to plan financially for that. So anyway,
3:01
Speaker 1: just like I said, I just was reflecting on my
3:03
Speaker 1: idle two weeks and really looking forward to a rather
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Speaker 1: boring retirement. So I'm off to the races in order
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Speaker 1: to find out something that will fill my time and
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Speaker 1: put a smile on my face at the same time.
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Speaker 3: On I'm that mini baby retirement is a great way
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Speaker 3: to experiment with what is your brain going to do
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Speaker 3: when you have more time?
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Speaker 2: Yeah? Great important thing people do.
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Speaker 1: Yeah, one of the reasons I kind of did it
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Speaker 1: that way. Anyway, over to the second quarter company earnings.
3:27
Speaker 1: It's that time of year. Do they all come out
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Speaker 1: and moss or is it going to be a trickle out?
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Speaker 1: How does this and what if anything in the earnings
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Speaker 1: reports is jumping out in your direction?
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Speaker 3: Brian James, Well, so it's always somewhere between a trickle
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Speaker 3: and a fire hose. So we have five hundred companies
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Speaker 3: in the S and P five hundred, and of course
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Speaker 3: there's more than that on the face of the earth,
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Speaker 3: but those are the ones we focus on. They tend
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Speaker 3: to come out over a several week period as they
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Speaker 3: all have their earnings reports. Some of you may know
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Speaker 3: people who work for major corporations. There's a lot of
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Speaker 3: great companies based here in Cincinnati, and if you have
3:57
Speaker 3: some friends who work in the investment communication division or
4:00
Speaker 3: the finance division, they get real stressed right around this
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Speaker 3: time of year because they're the ones who need to
4:05
Speaker 3: put those numbers together and get it am moditor and
4:07
Speaker 3: all that kind of stuff. So we are well underway here,
4:10
Speaker 3: surprisingly strong message coming out of coming out of the
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Speaker 3: corporate America, which is still making a lot of money.
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Speaker 3: Underneath those numbers, we're seeing a pretty complicated economy though
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Speaker 3: so affluent customer consumers are pretty comfortable. Lower and middle class,
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Speaker 3: middle income households are becoming a.
4:27
Speaker 2: Little more selective.
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Speaker 3: Obviously, AI rules the roost, and that's increasingly determining which
4:32
Speaker 3: companies and which sectors.
4:33
Speaker 2: Are going to drive that market.
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Speaker 3: So so far, through last Friday, about twenty seven percent
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Speaker 3: of the S and P five hundred companies had reported
4:41
Speaker 3: eighty six percent of them have beaten analyst estimates. Remember, Brian,
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Speaker 3: that's all we care about, not what did they earn
4:46
Speaker 3: where the analysts right or wrong? That's all we ever
4:48
Speaker 3: talk about. So the analysts thought they were going to
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Speaker 3: do one thing, eighty six percent of them top that.
4:53
Speaker 3: That's a five year that compares with a five year
4:55
Speaker 3: average of seventy eight percent. So, in other words, we're
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Speaker 3: trending positively. And revenue results also have been strongest, not
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Speaker 3: just about keeping keeping expenses below eighty percent, have exceeded expectations,
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Speaker 3: meaning what that really means is that the businesses that
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Speaker 3: they design, the plans that they put in place over
5:10
Speaker 3: the last couple of years have paid off and have
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Speaker 3: been success eighty percent.
5:14
Speaker 2: Of the time.
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Speaker 1: That's great, isn't it?
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Speaker 2: Absolutely?
5:18
Speaker 1: And I know that sounds like I'm stating the obvious
5:21
Speaker 1: or asking you a rhetorical question, but you know, I'm sorry.
5:24
Speaker 1: I am inundated with news articles about gloom and doom
5:27
Speaker 1: and broad and to die and the economy sucks and
5:29
Speaker 1: oh my god, inflation's out of control and Donald Trump,
5:31
Speaker 1: evil orange man, this that whatever that this is. Overall,
5:35
Speaker 1: it sounds like really great. Positive Nudes mid in the
5:37
Speaker 1: middle of a world that seems rather unstable right now.
5:41
Speaker 2: It is.
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Speaker 3: The report card is positive right now, and there's no
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Speaker 3: there's nothing to say that we're standing on the edge
5:47
Speaker 3: of the precipice or anything like that going over. However,
5:50
Speaker 3: it's not wonderful everywhere. Here's why you're hearing what you're hearing.
5:52
Speaker 3: There are two American consumers out there right So I
5:55
Speaker 3: just made a comment about that, how the consumers are
5:59
Speaker 3: based on in level. Consumers are behaving differently. So, for example,
6:02
Speaker 3: American Express profits they were up eight percent. Average spending
6:06
Speaker 3: per card holder increased sixty three hundred dollars to see it,
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Speaker 3: from sixty three hundred to sixty seven hundred, and they
6:13
Speaker 3: added three million more cardholders. So those are people that
6:16
Speaker 3: at some point American Express saw fit to stuff their
6:19
Speaker 3: mailboxes full of credit card applications because they're apparently in
6:22
Speaker 3: good shape. And those people, three million of them, got
6:24
Speaker 3: new cards and began to spend on them.
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Speaker 2: That's one thing.
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Speaker 3: A fluid consumers are out there still traveling, dining out,
6:30
Speaker 3: paying for these premium services. On the other hand, PEPSI,
6:34
Speaker 3: their claim is that there's growing pressure in household budgets.
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Speaker 3: Their overall revenue rose by six point four percent, but
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Speaker 3: that came from international growth. North American beverages fell about
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Speaker 3: four percent. Snack volume was flat. Company's placing more emphasis
6:48
Speaker 3: on smaller packages, right, So we're seeing this out of
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Speaker 3: you notice the grocery store, they've all got those little
6:52
Speaker 3: tiny baby cans of coke and pepsi and all those
6:54
Speaker 3: different things. That's a different consumer buying that, and those
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Speaker 3: consumers are behaving differently.
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Speaker 1: But are they not perhaps the welcome recipients of bad
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Speaker 1: news lower profit because we're all waking up to the
7:06
Speaker 1: fact that pepsi is bad for you. I mean, it's
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Speaker 1: like a great awakening nutritionally speaking going on in this country.
7:12
Speaker 1: Maybe RFK Junior has a lot to do with it,
7:14
Speaker 1: but people are waking up and saying, you know what,
7:16
Speaker 1: we've got processed sugar and corn syrup in everything. It
7:20
Speaker 1: has no nutritional value and in fact, it's cancer food
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Speaker 1: quite literally. So maybe we should stop drinking more of
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Speaker 1: that crap and start choosing something better for us, maybe
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Speaker 1: like a water.
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Speaker 3: So and yeah, and that's a great point, but you're
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Speaker 3: thinking of pepsi the brand, and you're associating it only
7:35
Speaker 3: with that one product. Pepsi owns a lot of different things.
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Speaker 3: They're smart people there and they saw this coming decades ago.
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Speaker 3: So Pepsi owns a lot of other things than just
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Speaker 3: the sugar and the chemical based stuff like those kinds
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Speaker 3: of things.
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Speaker 2: Yeah, well, yeah, exactly, they safe thing, but.
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Speaker 3: They well they also own tropicana and there are there,
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Speaker 3: there are a number of other things that are just
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Speaker 3: a lot better for you. But the point is pepsi
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Speaker 3: is something that applies to everybody. Basically across the board
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Speaker 3: of economic situations, people will partake with those products. They're
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Speaker 3: still seeing a decline, but whereas the American Express, the
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Speaker 3: companies that that that's that cater more to the wealthier set,
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Speaker 3: they're going they're they're seeing actual growth during this time period.
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Speaker 3: So yeah, you're right, I think there's definitely something. All
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Speaker 3: of those companies are all those snack food and soda
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Speaker 3: pop companies and all that are are taking a step back,
8:25
Speaker 3: but they're also invested or so Poppy. I don't know
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Speaker 3: if you know what poppy is, but Poppy is a
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Speaker 3: healthier soda stream.
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Speaker 2: Well that's Pepsi.
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Speaker 3: They also own Quaker, They owned sun Chips, Gatorade, Propel,
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Speaker 3: Muscle milk, those kinds of things.
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Speaker 2: So they started diversifying to those brands years ago.
8:38
Speaker 1: Just like the tobacco companies had to do when we
8:40
Speaker 1: found out that cancer based on the nineteen sixty four
8:42
Speaker 1: Surgeon General report causes or a smoke cigarettes caused cancer.
8:45
Speaker 1: Our product kills people. We may as well diversify our
8:48
Speaker 1: business while we are still flushed with cash. They did,
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Speaker 1: and they've been able to able to maintain profitability exactly.
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Speaker 2: And that's the that's the American way.
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Speaker 3: If it's profitable, it's going to find a place some
8:58
Speaker 3: it's going to find a market somewhere in.
8:59
Speaker 1: The right now real quick here before we park copany,
9:02
Speaker 1: take a break and come back and talk about the
9:03
Speaker 1: price of gas. Brian James, What is the benefit of
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Speaker 1: having an American Express card versus pick any of the
9:13
Speaker 1: other credit card options out there, because you have to
9:15
Speaker 1: pay an annual fee and you must pay off the
9:17
Speaker 1: balance on a monthly basis. Is there any benefit that's
9:20
Speaker 1: derived from having that versus just say you're run of
9:22
Speaker 1: the mill Visa or master Card.
9:25
Speaker 3: Oh, I'm a big fan of It depends on what
9:28
Speaker 3: you use. I'm a big fan of cheap I'm a
9:30
Speaker 3: huge fan of credit card rewards. You got to pay
9:31
Speaker 3: your bills somehow, You're going to do it anyway, run
9:34
Speaker 3: it through a credit card, get your rewards.
9:35
Speaker 2: And then run away.
9:36
Speaker 3: Right, credit cards can be expensive if you have the
9:38
Speaker 3: premium models and all that. It depends on whether you
9:41
Speaker 3: completely understand if they provide benefits, all those extra perks
9:45
Speaker 3: and things. If you actually know how they work, you
9:47
Speaker 3: spend time reading the offering and you benefit from them.
9:50
Speaker 2: Absolutely, those are great.
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Speaker 3: But most of the time, yeah, those absolute premium cards
9:54
Speaker 3: where you're paying seven hundred fifty eight hundred bucks a
9:56
Speaker 3: year for the privilege of having that in your wallet, No,
9:58
Speaker 3: not worth it, but the benefits can be if your
10:01
Speaker 3: lifestyle does support it. However, I find that most people
10:03
Speaker 3: don't read the manual for their DVD player, let alone
10:06
Speaker 3: be the critic.
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Speaker 1: Right, Well, so you just walk around and say, I've
10:10
Speaker 1: got the Black or the Platinum or whatever AMEX card,
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Speaker 1: which just means that you can a four to pay
10:16
Speaker 1: seven hundred fifty bucks a year, just so he can
10:18
Speaker 1: show everybody else that you've paid seven hundred and fifty
10:20
Speaker 1: fifty bucks a year for a card that you wouldn't
10:22
Speaker 1: necessarily have to pay a fee on if you chose
10:23
Speaker 1: something else, there is a slice of the populace. Yeah,
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Speaker 1: there is exactly that. I love making fun of those people.
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Speaker 2: Go.
10:30
Speaker 1: I'm sorry Brian.
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Speaker 2: Had to do it. Eight fifteen or eight sixteen.
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Speaker 1: We're going to talk about the price of gas as
10:34
Speaker 1: well as the upcoming FED meeting rate hike or not
10:38
Speaker 1: more with Brian James. Please don't go away America KUSSD
10:42
Speaker 1: talk station doing that money thing Monday Monday with all
10:44
Speaker 1: we financials. Brian James, Hey, real quick, not to stick
10:48
Speaker 1: on the AMX subject, but my buddy Eric, who literally
10:50
Speaker 1: flies twenty four hours a day, seven days a week
10:53
Speaker 1: for his job, sent me a picture of his card.
10:56
Speaker 1: He's got an AMX Delta Skymiles card. And the only
10:58
Speaker 1: reason I bring it up, Brian James, Miles flown sixty
11:03
Speaker 1: six million. It's on his card. That's a lot of points.
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Speaker 2: That's a good use of a credit card.
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Speaker 3: There by the way, that's not the premium card's and
11:13
Speaker 3: he's a Delta man obviously.
11:15
Speaker 1: Oh yeah, oh yeah. But he also acknowledged that his
11:18
Speaker 1: employer does pay the annual fee, which is fine if
11:21
Speaker 1: the employer's going to cover the nut on that one.
11:23
Speaker 1: There's other reasons to have it, but that's a lot
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Speaker 1: of miles, Eric, and I do not envy you at all.
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Speaker 2: That is a job. I'm not jealous of that.
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Speaker 1: No, No, that's a suck job.
11:32
Speaker 3: I hope one day you get to enjoy those miles.
11:34
Speaker 3: But I have a feeling when your vacation is not
11:36
Speaker 3: flying anywhere, right right, that's it.
11:38
Speaker 2: There's your staycation right there.
11:40
Speaker 1: He's going to be able to fly for free forever, I.
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Speaker 2: Think, anyway, and never want to again.
11:44
Speaker 1: And of course the price of him flying from pointing
11:47
Speaker 1: to point b's obviously gone up because of the airline.
11:49
Speaker 1: Fuel has gone up, but so is diesel, and so
11:52
Speaker 1: is regular gasoline, which National averagely says, of yesterday a
11:55
Speaker 1: cord of the triple A four dollars and nine cents,
11:58
Speaker 1: fifteen cents more than a week ago and a little
12:01
Speaker 1: bit off the last year average of three dollars and
12:05
Speaker 1: fifteen cents per gallon. Obviously, we have a straight of
12:08
Speaker 1: horror moves Iraq war problem on our hands. Is this
12:12
Speaker 1: thing going to resolve itself soon? I know the price
12:15
Speaker 1: of oil just dropped over the last two days because
12:17
Speaker 1: of Donald Trump saying he's going to stop bombing at
12:20
Speaker 1: least for the time being. Prospects for peace seem very slim,
12:24
Speaker 1: and that seems to be the whole problem there. If
12:26
Speaker 1: we don't find some measure of stability in the straight
12:28
Speaker 1: of hornor moves, that doesn't look like the price of
12:30
Speaker 1: gas is going to go down. But where are we
12:32
Speaker 1: on this one, Brian James?
12:33
Speaker 3: Yeah, so we're we're, like you said, we're about a
12:35
Speaker 3: dollar high than we were, higher than we were a
12:37
Speaker 3: year ago, and we're in one more year than war
12:39
Speaker 3: than we were a year ago. So, uh, the last
12:42
Speaker 3: couple of days, we've had a little bit of a
12:43
Speaker 3: pullback as you As you mentioned, so oil dropped sharply
12:46
Speaker 3: after about a two day pause in fighting with a rant.
12:49
Speaker 2: But the Brent crude still is above ninety bucks.
12:52
Speaker 3: And so these pump prices they usually react with some
12:55
Speaker 3: kind of a lag. Yeah really the decline, Yeah, just
12:58
Speaker 3: a little bit. Yeah, so the decline and crewed isn't
13:02
Speaker 3: going to be seen at the pump right now, obviously.
13:04
Speaker 3: And as the thing you got to remember is the
13:06
Speaker 3: gas you're pumping out of the pumping into your car
13:09
Speaker 3: is not the gas that was pulled out of the ground.
13:10
Speaker 2: This morning.
13:11
Speaker 3: It's been months since that has been moving through the
13:13
Speaker 3: system as it was first pulled out of the ground.
13:15
Speaker 3: So the things that are happening with oil prices today
13:18
Speaker 3: will surface over the next weeks and months in either direction.
13:22
Speaker 3: So the the outlook that we're seeing now for is
13:25
Speaker 3: we're looking for an average of maybe three dollars and
13:28
Speaker 3: eighty cents during the third quarter and three dollars and
13:30
Speaker 3: forty cents in the fourth quarter. So there are organizations
13:32
Speaker 3: that comes from the EIA, our organizations out that are
13:35
Speaker 3: looking for a bit of a pullback. Now we'll see
13:37
Speaker 3: they they of course change their opinions with as the
13:39
Speaker 3: breeze tends to change direction as well, so we'll see.
13:42
Speaker 2: If that holds.
13:42
Speaker 3: But hopefully we'll get a little bit of a reprieve
13:45
Speaker 3: as we move out of travel season, and maybe if
13:49
Speaker 3: the Iran war calms down just a little bit, it
13:50
Speaker 3: would be nice to make some progress there so we
13:52
Speaker 3: can all move on with our lives.
13:53
Speaker 1: Certainly well, and I know that you know, much like infrastructure,
13:57
Speaker 1: it all takes a long time to build. Under the
13:58
Speaker 1: Saudia's er looking to try to figure out some sort
14:01
Speaker 1: of pipeline mechanism that they can continue to get their
14:03
Speaker 1: product out of the area with that and rely on
14:05
Speaker 1: of the strait. But depending on the future and who
14:08
Speaker 1: ends up controlling the strait, whether it's going to be
14:10
Speaker 1: a toll booth or reopened as international waters, we won't
14:14
Speaker 1: know for a long time. But there are options down
14:17
Speaker 1: the road to avoid the Strait of horn Moves. Everything
14:20
Speaker 1: doesn't have to necessarily go in one of those giant
14:23
Speaker 1: shipping containers. So do you see any progress or maybe
14:27
Speaker 1: some stability down the road if we do pursue other
14:30
Speaker 1: options that avoid that traffic.
14:32
Speaker 2: Well.
14:33
Speaker 3: I think the bigger concern for the United States is
14:36
Speaker 3: the fact that the US is a net exporter. We
14:38
Speaker 3: talk about this all the time. We're not talking about
14:40
Speaker 3: the oil that we need. We are a net exporter
14:41
Speaker 3: of oil at this point due to the technological advances
14:45
Speaker 3: that have come from fracking over the last twenty years.
14:47
Speaker 3: We're digging all our oil out of shale now, and
14:49
Speaker 3: North America has the greatest deposits of shale on the
14:52
Speaker 3: face of the earth. So this is not a USA problem. However,
14:56
Speaker 3: it is a problem for the consumers of the products.
14:58
Speaker 2: That the USA purchases.
15:00
Speaker 3: So that's why we care any everybody would love to
15:02
Speaker 3: get for the straight Ohorror moves to be out of
15:04
Speaker 3: the mix. And I don't think it was in the
15:06
Speaker 3: mix nearly as much as we thought it was. I
15:08
Speaker 3: think Iran surprised itself several months ago when they realized
15:12
Speaker 3: and this was a surprise to me too, when they
15:13
Speaker 3: realized how much control they actually had when they simply
15:17
Speaker 3: threatened in response to the US attacks, they simply threatened
15:21
Speaker 3: to close the straight Ohorn moves and that rattled oil prices.
15:23
Speaker 3: I think that's surprised even them. So that has now
15:26
Speaker 3: become a bargaining chip.
15:27
Speaker 2: For that group over there.
15:29
Speaker 3: So, yeah, there's lots of talk about how do we
15:30
Speaker 3: get You know, if you look at a map, it
15:32
Speaker 3: seems easy, Well, why don't we just build a pipeline
15:34
Speaker 3: right across that little peninsula there. Well it's not quite
15:37
Speaker 3: that simple, because there's there's mountains, and there's people that
15:40
Speaker 3: live there, and there's all kinds of things that need
15:41
Speaker 3: to happen first. But more focus on that than there
15:44
Speaker 3: has ever been.
15:45
Speaker 1: Yeah, and for obvious reasons. Well, and you know the
15:47
Speaker 1: other thing I read, and at least in terms of
15:49
Speaker 1: development and available resources, you know, we do have the
15:51
Speaker 1: Venezuela and oil. And I understand it isn't the greatest
15:54
Speaker 1: oil in the world, but that is a massive, massive
15:56
Speaker 1: deposit there. They just figured out and advanced technology allows
15:59
Speaker 1: them to drill at like twenty thousand feet deep. You know,
16:03
Speaker 1: the pressure is so amazing. They've never been able to
16:05
Speaker 1: come to the technological challenges. But according to the report
16:08
Speaker 1: I read, I think it was a Wall Street Journal
16:10
Speaker 1: article there, the amount of oil and deposits of a gas,
16:15
Speaker 1: et cetera that are now reachable are mind boggling. I mean,
16:20
Speaker 1: they dwarf like every other large known deposit of oil,
16:24
Speaker 1: and now that you can get it and access it,
16:27
Speaker 1: it just seems to me that, you know, there is
16:28
Speaker 1: no such thing as peak oil. It's just simply a
16:30
Speaker 1: question of technological advancements and there's plenty out there in
16:33
Speaker 1: the world and maybe we can just maybe perhaps just
16:35
Speaker 1: ignore them in the least down the road.
16:37
Speaker 3: Yeah, and that's and that's the big that's one of
16:39
Speaker 3: the biggest components of the pricing there. So you know,
16:41
Speaker 3: when when we look at the pump, the price at
16:44
Speaker 3: the pump, the EIA estimates it comes about fifty seven.
16:47
Speaker 2: Percent comes out of crude oil.
16:48
Speaker 3: Twenty one percent comes out of the of refining it,
16:52
Speaker 3: about eight percent from getting it distributed where it needs
16:54
Speaker 3: to go, and then fourteen percent in taxes. You know,
16:57
Speaker 3: somewhat of an unforced error there in terms of how
17:00
Speaker 3: tax it. But you're right, it's not all about just
17:02
Speaker 3: the price of oil. It's about getting it out of
17:04
Speaker 3: the ground from wherever it is. Technology, and that's what
17:07
Speaker 3: we just said. Technology is what has put the US
17:10
Speaker 3: in the enviable position of not having to import oil anymore.
17:13
Speaker 3: So it doesn't matter to us so much directly as
17:15
Speaker 3: immediately what Opek does. Right, It used to be a
17:18
Speaker 3: big thing. Twenty years ago. That was a huge thing.
17:20
Speaker 3: We kind of had to hang on every word that
17:22
Speaker 3: Opek said. Not so much anymore, except now they're making
17:25
Speaker 3: our customer base mad and that trickles through our entire economy.
17:28
Speaker 2: It does well.
17:29
Speaker 1: And the other thing, we could probably use a couple
17:31
Speaker 1: three more of our refineries, which nobody wants anywhere in
17:35
Speaker 1: their state or neighborhood. Oh and really quick, correct the record.
17:38
Speaker 1: Eric did not fly himself sixty six million miles. It's
17:41
Speaker 1: a commemorative Delta sky miles card. It's it's the Boeing
17:45
Speaker 1: seven forty seven that is shown on the card. That's
17:49
Speaker 1: how many miles the Boeing seven forty seven flow. So
17:51
Speaker 1: people out there going, there's no way Eric flew that
17:53
Speaker 1: many miles. You know what, You're right, he didn't. Anyhow,
17:56
Speaker 1: we're going to find out about the FED meeting. Is
17:58
Speaker 1: there a poly market bet on? I'm the rate going up?
18:01
Speaker 2: Down?
18:01
Speaker 1: Our status quo? Brian James will answer that question in
18:04
Speaker 1: a moment. Don't go away. Thomas Edison's photograph recording.
18:09
Speaker 2: The talk station.
18:12
Speaker 1: AY thirty one, fifty five KERCD talk station.
18:15
Speaker 2: His name is Brian James.
18:16
Speaker 1: He does the Money Monday segment here on the fifty
18:18
Speaker 1: five KRC Morning show every Monday. Get a few topics
18:22
Speaker 1: to go over Brian James with and finally the Fed's
18:24
Speaker 1: going to be being there. I guess tomorrow. Big question
18:26
Speaker 1: of course, whether the rate's going to go up, it's
18:28
Speaker 1: going to be a rate cut, or things going to
18:30
Speaker 1: remain the same. If I guess, Brian, if I had
18:32
Speaker 1: a guess, not knowing whether it's going to go up
18:34
Speaker 1: down and remain the same. If it does go up
18:35
Speaker 1: or down, it's not gonna be any more than a
18:36
Speaker 1: quarter point. But where's the poly market on this one?
18:40
Speaker 1: What what are folks betting on out there in the world,
18:44
Speaker 1: and what does Brian James think about what's going to
18:45
Speaker 1: happen now?
18:46
Speaker 3: Folks out there are betting on nothing. No change is
18:49
Speaker 3: really what's expected tomorrow. And that that is including our
18:53
Speaker 3: chief investment officer here, Andy Stout. So Polly Market's got
18:56
Speaker 3: a sixty two percent probability though of a hike by October,
19:00
Speaker 3: and call SHE for its part. They this is a
19:02
Speaker 3: little bit of a dissenting opinion, but they have an
19:05
Speaker 3: eighty one percent probability of zero rate cuts for all
19:08
Speaker 3: of twenty twenty six. But they also call SHE in
19:11
Speaker 3: poly Market. Both agree that there's basically no chance of
19:14
Speaker 3: a rate of any change tomorrow.
19:16
Speaker 2: We're kind of holding steady.
19:17
Speaker 3: Wall Street for its part, that's the other place we
19:19
Speaker 3: look for interest rate expectations. Wall Street is looking for
19:22
Speaker 3: the Fed to hold rates right in the three and
19:24
Speaker 3: a half to three point seventy five percent range as well,
19:26
Speaker 3: but of course paying particular attention to what's going on
19:29
Speaker 3: in the Middle East and how that's going to drive
19:31
Speaker 3: inflation as well, as we you know, talked about earlier
19:33
Speaker 3: this morning, So no no signs of panic and no
19:36
Speaker 3: signs of you know, any drastic moves this week. But
19:40
Speaker 3: at this time, remember there's there's no dot plot this
19:42
Speaker 3: time around. It'll be a little quieter in terms of
19:45
Speaker 3: the overall just that we're just looking for an announcement
19:48
Speaker 3: of whether rates are going up or down, and the
19:49
Speaker 3: gut says that there's not gonna be no change.
19:52
Speaker 1: Well, here we are in at the end of January
19:54
Speaker 1: and our July ral. I can't I personally can't recall
19:58
Speaker 1: what the Fed has done up until this point in
19:59
Speaker 1: time this calendar year. But inflation has run a little
20:03
Speaker 1: bit hotter than I think we desired. I think we
20:06
Speaker 1: kind of typically are hoping for around two percent. Isn't
20:09
Speaker 1: that the default sort of norm or desired inflation rate. Yeah,
20:14
Speaker 1: So a federal reserve established decades ago, and it was
20:17
Speaker 1: a it was a secret for a long time that
20:19
Speaker 1: that's what they were shooting for. Two percent is the
20:21
Speaker 1: happy medium for the Federal Reserve. But we haven't been
20:25
Speaker 1: anywhere near that in a while.
20:26
Speaker 3: You know, remember we were at eight nine percent crazy
20:29
Speaker 3: time three four years ago and now we've at best,
20:33
Speaker 3: we've gotten down into the low threes. We might have
20:35
Speaker 3: dipped below three once or twice, but we just couldn't
20:38
Speaker 3: get below. And then, of course, with the decisions that
20:40
Speaker 3: we've made in terms of our foreign policy and the
20:43
Speaker 3: different ways we interact with countries like Ron, that we've
20:46
Speaker 3: seen a little bit of a tick up there.
20:48
Speaker 1: Just a little so. But if you're you know, look
20:51
Speaker 1: at historical you know, rate hikes or cuts, judging by
20:56
Speaker 1: the current annual inflation rate where we happen to be
20:58
Speaker 1: right now, which is north of too, doesn't that suggest
21:01
Speaker 1: a rate hike is more likely?
21:04
Speaker 2: Oh?
21:04
Speaker 3: Absolutely, if there's going to be a change right now, yes,
21:07
Speaker 3: it looks like it would be up. Because we seem
21:09
Speaker 3: to have lost the momentum that was driving into driving
21:12
Speaker 3: inflation down since that crazy COVID related spike to eight
21:16
Speaker 3: or nine percent. We've lost that momentum and we are
21:18
Speaker 3: going the other direction. The things that we're doing, and
21:21
Speaker 3: a lot of this, I think that the scarrier thing
21:23
Speaker 3: is the concept of these that a lot of this
21:26
Speaker 3: is driven by human decisions. It's driven by the leadership
21:28
Speaker 3: decisions we've had we have coming out of Washington, d C.
21:31
Speaker 3: Some of it is just the normal business cycle, but
21:34
Speaker 3: a lot of it is, uh, you know, if you're
21:36
Speaker 3: going to start a war somewhere and disrupt the flow
21:38
Speaker 3: of oil, well that's going to cause inflation to creep
21:40
Speaker 3: up around the world. And we are with our inflation
21:43
Speaker 3: where it is currently in the high threes of all
21:46
Speaker 3: the developed countries. That is the highest inflation rate that
21:49
Speaker 3: we've had out there. And again it's it's it's currently
21:50
Speaker 3: by choice. We are the ones who started that war.
21:53
Speaker 3: That's why it looks a little different for the United
21:54
Speaker 3: States versus other countries out there.
21:56
Speaker 1: Well, and everybody who yells at Donald Trump about tariffs
21:59
Speaker 1: away screen about how it's going to jack the price
22:01
Speaker 1: of goods up, goods coming from foreign lands, I suppose obviously,
22:05
Speaker 1: Donald Trump, I know you've read about it. Brian James
22:07
Speaker 1: has just decided he's going to tack some additional tariffs
22:09
Speaker 1: on somewhere in the order of ten to fifteen percent
22:11
Speaker 1: countries that I guess do business with slave labor, which
22:13
Speaker 1: somehow includes Canada. I didn't realize Canada had slaves whatever.
22:18
Speaker 2: But that I'm not sure that's entirely accurable.
22:19
Speaker 1: No h I know, But lot me just boil it
22:22
Speaker 1: down to with simplest terms as inaccurate as I may be,
22:25
Speaker 1: or inaccurate as he may be. But if that if
22:29
Speaker 1: tariffs do have an impact on the price of our
22:32
Speaker 1: goods and it pushes them up, is that not just
22:34
Speaker 1: doesn't that qualify as inflationary?
22:37
Speaker 2: Yeah?
22:37
Speaker 3: Absolutely pushes prices up as inflation. And again, and that's
22:40
Speaker 3: a decision we're trying to affect. You know, the administration
22:42
Speaker 3: makes decisions, will sacrifice this over here because we want
22:46
Speaker 3: that over there, and it remains to be seen whether
22:48
Speaker 3: it's going to work out that way. But absolutely, that
22:50
Speaker 3: was a big headline over the weekend. No interestingly, this
22:52
Speaker 3: is the same headline that caused a panic last April,
22:56
Speaker 3: So I'm sorry two aprils ago. Yeah, when we first
22:58
Speaker 3: started talking about tariff's today, with this big announcement that
23:01
Speaker 3: came over came out over the weekend, futures are not
23:04
Speaker 3: even paying attention to it all. So the markets don't
23:06
Speaker 3: really care. It's just kind of accepted that this, I
23:08
Speaker 3: guess this is the way we're doing business.
23:09
Speaker 2: Right now.
23:10
Speaker 3: Futures are up, depending on the index, anywhere around one
23:12
Speaker 3: percent right as we're talking right now, So at least
23:14
Speaker 3: we're beyond the panic reaction that we've had in the past.
23:18
Speaker 1: Well, maybe they factored in the prior court case which
23:21
Speaker 1: said that the tariffs that Trump originally levied under that
23:23
Speaker 1: particular provision were not lawfully enacted. Maybe they anticipate the
23:27
Speaker 1: same results under the secondary or separate provision that he
23:31
Speaker 1: announced he was using relying upon for these current tariffs.
23:34
Speaker 3: Yeah, we're gonna try this a different way and see
23:36
Speaker 3: how it goes this time. But yeah, that's a great
23:38
Speaker 3: point that that, you know, perhaps the powers that be
23:41
Speaker 3: out there who were pulling the levers on the market
23:43
Speaker 3: are anticipating that the exact same thing is going to
23:45
Speaker 3: happen again, and these are going to get shot out
23:47
Speaker 3: of the sky and it's going to be a round
23:48
Speaker 3: trip for a gigantic pile of dollars. I have friends
23:51
Speaker 3: with businesses that were directly impact and a lot of
23:53
Speaker 3: people do directly impacted by these by these tariffs, And
23:57
Speaker 3: during that time a couple of years ago, they were
23:59
Speaker 3: literally feast or month to month, we could be out
24:01
Speaker 3: of money by October, or we could be in the
24:03
Speaker 3: greatest situation this company has ever seen, and it was
24:06
Speaker 3: extremely stressful. Yeah, anybody buying products that were subject to
24:10
Speaker 3: those tariffs, whatever they budgeted for in Q four for
24:13
Speaker 3: this year, all of a sudden, throw the budgets out
24:15
Speaker 3: the window because everything just costs that much more. Can
24:18
Speaker 3: we pay our bills this way? And so Yeah, there
24:20
Speaker 3: were literal conversations that I was involved in of are
24:23
Speaker 3: we going to make it, can we get to the
24:25
Speaker 3: end of the year, or are or on the flip side,
24:27
Speaker 3: if this just goes away, we could have the greatest
24:30
Speaker 3: year we've ever had.
24:30
Speaker 2: There's just no way to see right now.
24:32
Speaker 1: All right, Well, to those who really cares to watch
24:36
Speaker 1: what the Fed does, keep your popcorn out. It's coming
24:38
Speaker 1: quickly and we'll have Brian James to talk about it
24:40
Speaker 1: next Monday. Money Money with Brian James every Monday here
24:42
Speaker 1: on the fifty five KRSE Morning Show at eight oh five. Brian,
24:45
Speaker 1: I appreciate our time together and your insight and what
24:48
Speaker 1: you're doing for