Latest / The Financial Exchange Show / Amazon: Get back to the office!

Transcript

Amazon: Get back to the office! · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:02
is hosted by employees of the Armstrong Advisory Group, a
0:05
registered investment advisor. All opinions expressed are solely those of
0:08
the hosts. Do not reflect the opinions of Armstrong Advisory
0:11
or anyone else. Investments can lose money. This program does
0:14
not offer any specific financial or investment advice. Please consult
0:17
your own financial, tax, and estate planning advisors before making
0:20
any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
this program do not endorse each other or their services.
0:25
Armstrong and Money Matters Radio do not compensate each other
0:28
for referrals and are not affiliated. This is The Financial Exchange,
0:35
with Mike Armstrong and Mark Vandetti, your exclusive look at
0:39
business and financial news affecting your day, your city, your world.
0:44
Stay informed and up to date about economic and market trends,
0:47
plus breaking business news every day. The Financial Exchange is
0:51
a proud partner of the Disabled American Veterans Department of Massachusetts.
0:55
Help us support our great American heroes by visiting DAV
0:59
five k dot com Boston and making a donation today.
1:02
The DAV five K Boston is presented by Veterans Development Corporation.
1:06
Base is the Financial Exchange with Mike Armstrong and Mark Fandetti.
1:13
Speaker 2: Good morning and welcome back to the Financial Exchange on
1:16
a Tuesday. Ahead of a Federal Reserve meeting Wednesday, FED
1:19
will be taking the stage at two thirty pm tomorrow
1:22
to give their overview and prognosis of the problems facing
1:27
the economy, the threats to unemployment and prices, and announce
1:32
where they will be going on interest rates for the
1:35
Fed Funds rate, as well as their summary of economic projections,
1:39
which gives you that dot plot and other factors to
1:42
consider when looking at where policy rates may go in
1:45
the future. And markets seemingly pretty excited about the prospects.
1:50
NASDAK up one hundred and thirty points three quarters of
1:52
a percent, SMP at the moment up twenty eight points
1:55
half percent, and the dowd Jones Industrial Average up one
1:58
hundred and fifty four points a little bit more than
2:00
a third of a percent. As we close in on
2:03
the noon hour of training. We're not closing it on noon.
2:06
We just crossed the eleven o'clock hour of trading here
2:09
on the Financial Exchange, question for each of you give
2:14
me your what you think would be your average commute
2:17
time to work right now.
2:21
Speaker 1: To and fro?
2:22
Speaker 3: No, just one way anywhere between forty five too. I
2:28
don't know, an average of forty eight minutes than Mike.
2:32
Speaker 2: Thank you. Yeah, I'm about the same, about the same. Yeah, Okay,
2:35
I'm bringing our average down. As you guys know, I
2:38
live pretty close by, so I'm bringing our average down.
2:41
But according to the Census Bureau, which measures this or
2:43
does a survey annually, at least they ask workers age
2:47
sixteen and older throughout the United States who did not
2:51
work from home what their average commute time, and in
2:54
twenty nineteen, the average commute time was twenty seven point
2:57
six minutes. The average in twenty twenty one was twenty
3:02
five point six. We didn't measure this in twenty twenty,
3:05
as you can imagine, because it wasn't a whole lot
3:06
of commuting going on twenty five point six in twenty
3:09
twenty one, twenty six four in twenty twenty two, and
3:12
climbing up to twenty six point eight minutes in twenty twenty.
3:16
Speaker 4: Thanks you, Joe Biden.
3:19
Speaker 5: I'm just I'm looking at that, oh okay, trend since
3:21
twenty twenty one, got it dump that on him too.
3:26
Speaker 4: Way to go, mister president.
3:27
Speaker 2: Course, So, according to this data, at least as of
3:29
twenty twenty three, commute times had not yet eclipsed where
3:32
they were in twenty nineteen, which, sorry, I do wonder
3:37
where they are in twenty twenty four. We don't have
3:40
survey data on this yet, but it certainly seems to
3:42
me as though it's busy. Traffic patterns have maybe changed.
3:47
Speaker 4: I Tucker agrees.
3:48
Speaker 5: Tucker agrees, been a nightmare this week, see waking especially today.
3:52
Speaker 2: Yeah, today was bad. See I have a tough time
3:56
knowing it's tough for me to put myself back in
3:58
my twenty nineteen shoes in a different place. In either case,
4:02
my commute was pretty short. But was it?
4:05
Speaker 4: You know?
4:05
Speaker 2: Would it have been longer for Mark Fandetti to drive? Well, Tucker,
4:08
you've been doing it easily since twenty nineteen. Do you
4:11
do you consider the commute now to be noticeably longer
4:14
on average than it was back then due to traffic?
4:17
Speaker 3: Yeah, I mean, I'm one of the six am drivers.
4:20
And pre pandemic, the roads were, for the most part,
4:24
relatively quiet and post pandemic. For some reason, A lot
4:30
of people shifted to traveling in that time.
4:32
Speaker 2: Yeah, see, I don't know why. That's the thing that
4:34
I was going to point out and notice as well,
4:36
is that I can't speak to whether or not I
4:40
think average commute times have gotten longer, and according to
4:43
the Census Bureau, they have in fact shortened. But what
4:46
I have noticed is with a high degree of certainty,
4:49
is that there is more traffic at other times of
4:51
the day that wasn't previously there.
4:53
Speaker 5: And I think that that's been documented. People's schedules have shifted,
4:56
the works work's got a little more flexible.
4:58
Speaker 2: I bring all this up because I am is On
5:00
made some headline news yesterday when they Andy Jasse, the CEO,
5:04
said that he is now expecting workers to return to
5:06
the office five days a week. They had been on
5:08
a three day a week schedule previously. He's saying, we're
5:10
scrapping that, We're going back to five days a week.
5:13
You're expected to be here every single day. I'm certain
5:15
that there will be exceptions. I'm sure Andy Jasse himself
5:18
works remotely quite a bit, but nonetheless saying, hey, this
5:21
is going to be the expectation going forward, and obviously
5:25
the more of these that occur, the more I expect
5:29
those commute times to go up, And I guess the
5:32
piece where, assuming we're getting back close to an economy
5:36
that looked a lot like twenty nineteen, I would actually
5:39
expect commute times to be well above where they were
5:43
in twenty nineteen, like Tucker is describing, because my sense
5:46
is that there's a lot of people that relocated during
5:50
that five year time period, and a lot of them
5:53
chose to relocate a little bit further away from work
5:55
on average, how many New Yorkers did you know that
5:58
lived in Manhattan that said I'm getting the hell out
6:00
of here, but I'm still going to work for the
6:02
same employer and I don't need to go in quite
6:04
as frequently. I don't know that maybe all of them
6:06
returned back. But my brother's an example of this, lived
6:10
on the Island of Manhattan, moved out during COVID, now
6:14
still is pretty close by. He's been Brooklyn. But that
6:16
still increases your average commute time by quite a bit,
6:19
going from a walkable commute to one in which he
6:22
needs to take the subway on a regular basis. And
6:25
so I wonder how much of that there is and
6:28
will we see these noticeable effects when we start looking
6:31
at the overall average commute times. Because this is our
6:34
experience here in the Northeast, right, it's not necessarily the
6:37
case everywhere, And there's documentation that, hey, in California, traffic
6:40
patterns are a lot less bad than they were in
6:43
twenty Now.
6:43
Speaker 5: All I know is every year since nineteen ninety seven
6:45
or so, I've been saying that commute's going to get better.
6:47
We'll have a recession, it'll wash a lot of this out,
6:49
there'll be more people at home, it'll be fine. I
6:51
guess I was assuming I wouldn't get fired, which didn't happen,
6:55
thank god. But still every year you say it's got
6:57
to get better.
6:58
Speaker 4: At some point it can't. We'll put in more rotaries.
6:59
What they of something we got to do? Flying cars?
7:02
Speaker 2: Extra lane on the highway, that'll do it.
7:03
Speaker 4: Extra lane on the highway.
7:04
Speaker 2: Let's shut it down for seven lay that extra lane.
7:07
I'm for that, and that'll.
7:09
Speaker 4: Why did we do? Did I missed that? At some
7:11
point of you I know, LA tries.
7:12
Speaker 2: That a lot.
7:14
Speaker 4: Yeah, no effect, no effect, La too. It just brings
7:17
more people on for.
7:17
Speaker 2: Those of you listening outside of you know, this specific
7:21
Boston metro area. One twenty eight is the old name
7:24
for those ninety five that circles Boston, and yeah, and
7:28
notorious for traffic these days pretty much all times a day.
7:32
The other one that we everybody's looked at as well,
7:34
they'll just finally make some improvements to the public transit
7:37
system and we'll get all those cars off the road
7:39
for that purpose. That one. That one hasn't worked terribly
7:42
well either, from what I've seen so far.
7:46
Speaker 5: Yeah, Look, the economy is still This goes back to
7:48
the point you were making about the FED at the
7:49
opening here. We talked about it in the last hour.
7:51
But for benefit of providence in Portland, in the Portland's
7:54
and other stations that have just joined us, the FED
7:56
is trying to strike a balance between two forces that
7:59
are really in per tension in the short term, inflation
8:02
and unemployment. I bring up on the I bring this
8:04
up because the unemployment, uh element of the trade off
8:10
is manifested in traffic. So the hotter the economy, the
8:15
more right, more people going to work, more traffic. You
8:19
don't have to do a lot of research, I don't
8:20
think to make that connection. The economy remains particularly in
8:23
Massachusetts here. Notwithstanding some of the chatter out there, I
8:26
understand the averages don't reflect everybody's experience. But the economy
8:30
is quite hot, the labor market is quite tight, and
8:34
in some ways a lot of traffic is a good
8:36
problem to have. You wouldn't want desolation out there.
8:40
Speaker 2: Yeah, it's a good indicator about the economy.
8:42
Speaker 4: It's a desira. Going to prisis Mike too.
8:44
Speaker 5: In a tight home market is also a good problem.
8:47
As frustrating as it can be if you're trying to
8:49
break into it, it's symptomatic of a vibrant economy. Maybe
8:54
some spacey regulations to archaic restrictions on building and stuff
8:59
like that. I don't want to oversimplify here, but these
9:02
problems that make life inconvenient during rush hour during peak
9:06
hours are in some ways indicative of a vibrant economy
9:09
and good problems to have. You wouldn't want to live
9:12
go to Tuli. I don't want to insult any particular jurisdiction.
9:14
You probably the city I was going to say, Who
9:18
knows what I was going to say, Folks, go to
9:20
some place. Go to Gary, Indiana. That's the textbook depressed place.
9:24
It may not be anymore. But go to these old
9:26
industrial towns in the Midwest. You will see a depressed
9:29
economy and traffic is really light there. You wouldn't want
9:32
to live there.
9:33
Speaker 2: Yeah. In other corporate news, Intel I think the second
9:38
or third worst performing stock in the S and P
9:41
five hundred this year as to date, down about fifty
9:44
three percent for the year. It is taking steps to
9:47
further well a cut costs, but really separate his two
9:51
businesses over at Intel. So Intel made up of two
9:54
different pieces. One would be their chip design business, the
9:57
other would be their actual manufacturing business. Seemingly looks like
10:01
steps being taken to eventually spin one of these off
10:05
and have two standalone entities, one that actually manufactures the
10:09
chips and one that actually designs them and gets the
10:12
contracts with the big companies to say, hey, Amazon, We're
10:16
going to be designing the chips for your next generation
10:19
of cloud computing and storage. I wonder at the advantages
10:24
to all of this. I mean, certainly markets seem to
10:28
be valuing chip designers differently than chip manufacturers right now,
10:32
and so there could be some competitive advantage there. They
10:36
seem to be speaking to the ability to get funding
10:38
specifically on the chip manufacturing process more easily. Maybe if
10:42
you're a pure play manufacturer, I'm not sure.
10:44
Speaker 5: Maybe that's becoming a government utility. We need founderies here,
10:49
government's going to subsidize them effectively. Yeah, very different economics,
10:52
very different, as you pointed out, valuation practices attached to
10:56
the finding the right price.
11:00
Speaker 4: It's the Nvidia model, is it?
11:01
Speaker 2: Now?
11:01
Speaker 5: You guys, you and Chuck know a lot more about
11:02
individual companies than I do. But they don't make they
11:06
design right. Maybe there's a fine line there.
11:09
Speaker 4: The other why not?
11:10
Speaker 2: The other cautionary tail up point here is what it
11:13
also could be is a distraction. Hey, our business sucks
11:17
right now, you know we should do engineer something that looks.
11:21
Speaker 5: I don't think it's theater. I mean it's necessary disruption. Yeah,
11:25
there might be a little bit of theater to it. Yeah,
11:27
but these changes seem quite real.
11:30
Speaker 2: Yeah, they're absolutely making them. They're absolutely making those changes.
11:33
I just always call into question, okay, why now? Well
11:36
why now? Is because our stocks down fifty percent and
11:39
you know, shareholders are demanding change. Will this actually result
11:41
in a net benefit to shareholders? Time will be the
11:45
only real tell of all of that but Intel has
11:49
I think inarguably made a number of missteps of the
11:51
last five years in terms of predicting where the market
11:53
is going in terms of chips. Let's say quick break
11:57
when we come back, a little bit trivia here next
11:59
on the financials.
12:00
Speaker 1: The Financial Exchange streams live on YouTube. Like our page
12:04
and stay up to date on breaking business news all morning.
12:07
Long Base is the Financial Exchange Radio Network.
12:11
Speaker 2: I learned something new today, Mark. According to Catherine Edwards,
12:14
a columnist for Bloomberg Bloomberg, one of the few things
12:20
Democrats and Republicans agree on these days is that it's
12:23
past time to raise the federal minimum wage. Did you
12:26
were you aware that Democrats and Republicans agreed that it's
12:29
pastime to raise minimum wage?
12:30
Speaker 4: I don't, Yeah, I was.
12:32
Speaker 5: That's part of the tragedy of the Republicans having no
12:34
economic principles anymore. Mike, Sorry for editorializing, but it's the
12:38
sad truth.
12:39
Speaker 2: I generally wasn't aware that JD.
12:41
Speaker 5: Vans had oh yes, big on any populist hair brain
12:45
populist economic policy they have fully embraced.
12:49
Speaker 4: Now, why do I Why.
12:50
Speaker 5: Am I critical in the minimum wage because it may
12:53
not do any harm, But it's no way to get
12:55
people out of poverty. Every economist, every labor economist, knows this.
12:59
Some would argue that oversimplifying, that maybe there are cases
13:02
where it can help, but you know, you want to
13:04
help get people out of poverty, you can supplement their income.
13:07
You don't price low priced labor out of the market
13:10
by raising the minimum wage. It's a very blunt and
13:12
crude tool. Not surprising that the Republicans, because they're so
13:16
bereft of substantive economic ideas these days. And I say
13:19
this is a criticism coming from the right of the
13:21
political spectrum, not the left, not surprised, and they would
13:24
embrace this.
13:24
Speaker 2: Yeah, I mean obviously Democrats embrace it and want a
13:27
much higher minimum wage. They oh, sure, always they want
13:30
you expect that from the wage attached to some combination
13:34
of inflation or median wages or a number of different
13:37
ideas that are out there. More similar to say, how
13:39
so security is priced and dealt with when it comes
13:42
to inflation. That that's been a policy point to the
13:45
Democrats for for years.
13:47
Speaker 4: Easy fix, Yeah, I mean business pay to me.
13:50
Speaker 2: I tend to look, there's how many states have a
13:54
higher minimum wage than the federal I think.
13:58
Speaker 4: Is only a handful of that.
14:00
Speaker 2: So, you know, a federal minimum wage is probably not
14:03
all that relevant in terms of bringing wages up across
14:05
the country. I think I looked in New Hampshire, there
14:08
were fewer than maybe five thousand people working for the
14:12
federal minimum wage in New Hampshire where they don't have
14:14
a state run minimum wage, And so I don't know,
14:18
I go back to, rather than focusing on something that
14:22
is really difficult to deal with, like the federal minimum wage,
14:25
there could be other areas where if you want to
14:27
bring up wages, just use the rules that are already
14:29
on the books. Like, you know, I get really frustrated,
14:32
I guess when I see, for example, remember a few
14:35
years ago, when there are a bunch of big restaurants
14:37
that were illegally employing child labor right around here. They
14:42
were having you know, teenage kids working until midnight mopping
14:46
floors and dealing with like all sorts of stuff that
14:49
was federally illegal on the childlighborhood labor laws and pretty
14:54
you know, subjective, pretty objectively you know, shouldn't have been done.
14:58
And they got you know, they got off with like
14:59
a slapper on the wrist. Likewise, you know how many
15:02
farming and different areas of the meat processing sector employe
15:08
undocumented the labor right now? And when was the last
15:11
time we saw anyone go into prison for doing so?
15:15
I think those are more common, you know, more other
15:18
ways there. There are already rules on the books to say, hey,
15:21
you want to bring up wages, then make sure jobs
15:23
are getting done by people that are actually eligible to
15:25
do those jobs, rather than injecting a new minimum wage
15:28
in there.
15:29
Speaker 5: Yeah, it's a quick and easy, and I guess a
15:33
politically attractive solution. It makes you sound sympathetic, but the
15:37
hard solution is you help people improve their skills, make
15:40
them more productive, that productivity moves, and lockstep with with
15:45
with wages.
15:46
Speaker 2: Yeah, yeah, I'm just but that's that's long term.
15:49
Speaker 5: It's not an election. You can't put that on a
15:51
bumper sticker. It's not a great election your slogan. It's
15:54
just disappointing that neither major political you don't have a
15:57
choice these days economically. Yeah, you know, choice if you're
16:00
a fiscal conservative, Mike, you just don't have it. Forgive
16:02
me for repeating myself, I'll say one more time, you
16:04
don't have a choice in this election.
16:06
Speaker 2: Now, I think it's tougher for me to argue that
16:09
there's actually broad support across the Republican Party in Congress
16:13
for a higher mini Oh.
16:14
Speaker 5: No, no, they're yeah, you're right, there are there are
16:16
something the top of the people left there.
16:18
Speaker 2: It's really there, right there are.
16:19
Speaker 5: No, You're abolutely right. Thank you for clarifying that I
16:21
was being a little bit unfair.
16:23
Speaker 2: Judges are reviewing the case against TikTok. This went to
16:27
court I think just yesterday, and initially at least expressing
16:32
some skepticism in TikTok's argument against a us band. But
16:38
TikTok has an interesting but uphill battle here where they're
16:42
trying to make the argument that we, as a corporation,
16:45
regardless of you know, who our owner is, we're a
16:48
corporation that is licensed and doing business in the United States,
16:52
and so therefore we have some right to free speech,
16:54
which is documented corporations these days do have a, you know,
16:59
a constitutional right to free speech. But apparently having a
17:04
pretty tough time of compelling the judges to agree on
17:07
that point.
17:07
Speaker 5: The First Amendment, to my knowledge, is not precede or
17:10
supersede the interest of the United States government in preserving
17:15
the Union, in taking measures to shore up our national security.
17:19
Speaker 4: It would have been like the Nazis during.
17:20
Speaker 5: World War Two complaining because time wasn't running nice cover
17:24
stories about Adolf and his and his Alsatian shepherds or
17:27
something like that. Plenty of good angles about Hitler. Why
17:31
were we suppressing those? I'm being absurd here because this
17:33
argument is absurd. The arument, sorry, I just had my coffee.
17:37
The argument for banning TikTok, it'll I'll be asleep in
17:40
seven minutes. The argument for banning TikTok is national security base.
17:44
There's no First Amendment argument in favor of letting what
17:48
is effectively a Chinese spy app operate freely.
17:52
Speaker 2: Come on Quick Break Trivia Winners next, and then we'll
17:55
be talking a bit about childcare costs in the US.
18:03
Speaker 1: Bringing the latest financial news straight to your radio every day.
18:08
It's the Financial Exchange on the Financial Exchange Radio Network.
18:14
Speaker 3: Trivia question today was how many amendments? I couldn't find
18:19
my spot here? How many amendments does the Constitution have?
18:24
I'll be twenty seven, twenty seven amendments for the Constitution?
18:28
Winner today of the Financial exchange show T shirt a
18:32
sharp new T shirt I might add it's brand new.
18:35
Was Joe from Sandwich, mass And Joe's also registered to
18:38
win a one hundred dollars gift card to Applebe's, which
18:41
will give away on Friday. Show and Trivia is brought
18:44
to you by Applebee's. Enjoy half price late night appetizers
18:47
after nine pm and joint club Applebee's to enjoy exclusive
18:51
deals and specials. You'll get a free appetizer just for
18:54
signing up. Now that's he can do in the neighborhood void.
18:56
We're prohibited dine in only.
18:58
Speaker 2: We continue to sort through more popular items for the
19:02
presidents to discuss than the growing deficits. And childcare has
19:05
been brought up a few times during campaigns as we
19:09
lead into really close into election day on November fifth, fifth,
19:18
we have now you know, a number of studies talking
19:21
about the cost of childcare. And for those listening in
19:24
Massachusetts right now, I know that's pretty acute to your
19:28
situation because we happen to have the most expensive childcare
19:32
in the country other than Washington, d C. In terms
19:34
of average costs. But what we the interesting piece that
19:38
I found was that in every single state in the country,
19:43
the cost of childcare outpaces average rent payments, and you know,
19:49
for a number of families across the US, we're talking
19:52
about as much as thirty thousand dollars in childcare costs
19:57
for you know, relatively small f family these days. And
20:01
so both parties seem to be honing in on the
20:04
fact that they consider this to be a problem, neither
20:09
really getting into like, hey, is this an economic problem?
20:12
Is this just a fairness problem? But it seems to
20:15
be landing more on the fairness question than the economic one,
20:17
because I'm not seeing anybody saying, hey, do this so
20:21
that we can increase our labor pool twenty years from now,
20:23
that that's not the argument that's getting made in terms
20:26
of making childcare less costly. But they are seeming to
20:30
play at some sort of fairness question of hey, you know,
20:33
is it reasonable for childcare to cost as much as
20:36
it does, and do we effectively want to bring it
20:38
down somehow?
20:39
Speaker 5: You could increase the supply of it, but that might
20:42
mean I don't know, lower quality.
20:44
Speaker 2: How could the government related? Yeah, I have to ask
20:46
how could the government?
20:47
Speaker 5: I'm just throwing I'm not suggesting a specific way to
20:50
do that. I'm pointing out only that there appears to
20:52
be a shortage, if you like.
20:55
Speaker 2: That's why the price is so right.
20:56
Speaker 5: So we need to increase the supply, throwing more money
20:59
at it, as I guess both presidential campaigns are proposing doing.
21:03
It's like throwing more money at college education. It doesn't
21:06
slow the growth rate down, and arguably a bets it.
21:10
Speaker 2: Yeah, I completely agree. A child tax credit, while you know,
21:13
I'll put my hand up, I'll gladly take three of them,
21:17
will not bring down the cost of childcare. It will
21:20
probably bring it up further because parents will have more
21:23
money to spend on childcare, plain and simple. And maybe
21:27
that's not as direct as a subsidized student loan, for example, But.
21:31
Speaker 5: Don't do it, by the way, it's clearly an urgent
21:34
and immediate need. I'm saying only that the issue seems
21:37
to be on the supply side. You can't do anything
21:41
about the demand side.
21:44
Speaker 2: Yeah, I'm just trying to think of other ways you
21:46
could bring up the supply. Well, you could, instead of
21:49
not taxing tips, you could not tax wages from childcare centers.
21:55
That seems as random and obscure as the argument for
21:58
tax on tips.
21:58
Speaker 5: But the reasons we talked the other day though, when
22:01
we talked about the direct and end effect direct effects
22:03
of raising the wage, there's a substitution effect, which means
22:07
there's an income effect too, as an economist would remind us,
22:10
which means people, Yeah, people need to work a few
22:12
hours to reach their goals. I don't know what the
22:14
net effect of that would be, probably more supply. But
22:17
again this is a supply side issue, Mike, and I
22:19
don't know what the fix is here.
22:20
Speaker 2: You could obvious raise the So there's restrictions state by
22:25
state on how many children a childcare provider can watch
22:29
it one time.
22:29
Speaker 4: You could raise that.
22:30
Speaker 2: You could go after that?
22:32
Speaker 4: Would you how do you feel about that? As a parent, I.
22:34
Speaker 2: Would not put my kids in a childcare center that was.
22:37
Speaker 5: About quicker or less rigorous licensing that might increase the supply.
22:41
How would you feel about that?
22:43
Speaker 2: I would be all right with licenses being able to
22:47
be transferred across state lines, but I would not be
22:50
okay with reducing the rigorousness of the licensing itself. So no,
22:55
I don't I don't land there. So yeah, I mean,
22:58
if you're a parent out there, think about out why
23:00
it costs so much. Well, because you're probably not in
23:03
love with the idea of a close to minimum wage
23:07
worker caring for more than three infants at the same time,
23:11
you're likely not comfortable with the same wage being watching
23:16
over more than you know, six toddlers at the same
23:18
time you yourself do it, and you know how dangerous
23:20
that can be. And so that's why it costs so
23:23
much around here is rent is incredibly expensive, wages are
23:26
incredibly expensive, and we have pretty strict rules when it
23:30
comes to how childcare is provided, and so it is
23:33
this expensive. And so yeah, I mean to answer the
23:36
question like, how do you increase supply at the government level,
23:40
I guess you could do something funky with the taxation
23:42
on tips, or you provide some sort of tax credit
23:45
for opening and operating daycare centers.
23:49
Speaker 5: Yeah, make it easier for them to borrow and expand
23:52
their operations.
23:53
Speaker 4: I don't know. I haven't heard a proposal along those lines.
23:56
Speaker 2: Again, this is I think, by the way, I think
23:58
those are the power side. I think there better solutions
24:00
like we talked about than just a child tax credit.
24:03
Speaker 5: A credit for businesses that offer daycare on site, something
24:06
I'm sure obviously I don't entirely know what I'm talking
24:09
about here. If it also take this with a grain
24:11
of salt. This is just off the top of my
24:13
little head. But induce businesses to offer on site daycare,
24:16
They've got scale there.
24:18
Speaker 2: Yeah, I don't. I don't. Yeah, Like I said, I
24:21
don't have all the answers, but I do. I think
24:24
I can easily conclude that if the solution is to
24:28
provide a larger tax credit for parents of young children,
24:32
then all else equal, cost of childcare increases.
24:37
Speaker 5: Can I just say, we just came up with five
24:39
to seven decent ideas that might be worth exploring off
24:43
the top of our heads in two minutes, unrehearsed on
24:45
the air. A major presidential candidate, when asked about this
24:48
a week ago, couldn't come up with anything.
24:51
Speaker 1: I don't know.
24:53
Speaker 4: I guess that's I guess maybe that's harder to do than.
24:55
Speaker 2: It's just not as complicated as But I do. I
24:59
do have to take a step back here, and you know,
25:01
I don't want to be completely self serving. It does
25:03
seem preposterous to me that it's this costly to provide childcare.
25:07
It certainly keeps some parents in throughout the country out
25:11
of the labor force, and that is a real trade off.
25:14
But don't, I continue to say, don't get looped into
25:18
the idea that it's going to fix all of our
25:20
problems with birth rates and things along those lines by
25:22
offering these types of stee.
25:23
Speaker 5: Even if it was a solution, it would take years
25:27
absolutely to reap the benefits.
25:29
Speaker 2: Folks. I want to talk to you about big events
25:32
coming up on the Financial Exchange in the month of October.
25:35
Two of them live broadcast from the MGM Springfield on
25:38
October eighth. Will also be doing one from the Margaritaville
25:41
Hotel and Resort on Hyanas on October twenty fourth. First
25:45
on the MGM Hotel in Springfield again, that's Tuesday, October eighth.
25:50
We're gonna be broadcasting from the hotel, which is directly
25:52
connected to the casino. There's free parking in the MGM lot.
25:56
You'll simply take the elevator down to the casino floor.
25:58
It's a short walk to the hotel from there. When
26:02
it comes to Margaritaville Hotel and Resorts in Hyenas again,
26:05
that one's October twenty fourth. Ed Lambert will be joining us.
26:08
He's the host of the XTK Morning Show, but full
26:11
schedule events here will be doing the live broadcast of
26:13
this show. The full two hour show from those venues
26:16
on October eighth and twenty fourth, followed by a live simon,
26:19
are hosted by the Armstrong Advisory Group. We're gonna be
26:22
talking about the presidential election. We're gonna be talking about
26:24
the policies both candidates have proposed what it might look
26:27
like when it comes to taxation, when it comes to
26:30
real issues that you, the voter, will face ultimately depending
26:34
on the outcome of this election. There are two ways
26:37
to sign up. You can go to our website Armstrong
26:40
Advisory dot com slash events, fill out a form associated
26:43
with event you'd like to attend again on October eighth
26:46
and October twenty fourth. October eighth, the springfield October twenty
26:49
fourth is down in Hainanas, or you can call us.
26:52
We'll help you sign up ourselves eight hundred three nine
26:54
three four zero zero one to attend either of the
26:57
two events, but again the website Armstrong Advisory dot com
27:01
slash events.
27:02
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:05
registered investment advisor. Nothing in the ad or in any
27:08
Armstrong guide a specific financial, legal or tax advice. Consult
27:11
your own financial tax into state planning advisors before making
27:13
any investment decisions. Armstrong make contact you to offer investment
27:17
advisory services.
27:18
Speaker 2: Paul, looks like your home states in danger of losing Paul? Paul,
27:23
what you're not? Paul? What's you saying?
27:26
Speaker 5: I wish I were. That guy's got more hair than
27:28
any human being. I've heard the upper limit is five
27:30
hundred thousand on the head.
27:31
Speaker 2: But we've got six such Sorry, Yeah, all right, I
27:37
didn't have my extra cup of coffee. Mark Fandetty your
27:40
home state, don't tell Paul you made that is in
27:43
danger of losing an employer to Boston once again. Hasbro
27:47
Toys for state. Well, that means I've lived here.
27:52
Speaker 5: For twenty six years, so I but yeah, Rode sure,
27:54
Rhode Islands, where I was born and raised.
27:56
Speaker 2: What do we call it to be from there? The
27:59
state in which you were born and raised? I guess
28:01
is the answer there. But executives at Hasbro are allegedly
28:04
mulling relocating the toy's giant headquarters from Rhode Island to Boston.
28:08
Where are they in Rhode Island, Patucket, Pawtucket.
28:11
Speaker 5: It's Patucket, Mic for Pete's sake. Every time we talk
28:13
about the city, you insert.
28:15
Speaker 2: A syllable Paul Tuckett, which you know between the passacks
28:20
and now potentially Hasbro. I mean, what's left. Yeah, that's
28:24
kind of a question that I would have there, that
28:26
that city's fallen on some tough times.
28:29
Speaker 5: It was the home it was arguably the kernel of
28:33
the industrial revolution here in America. Since, I guess you
28:37
could say it hasn't maintained that lead in some ways.
28:40
In other I'm sure there are thriving businesses there we
28:43
just don't know about.
28:45
Speaker 2: I can kind of get it. I mean, you know,
28:47
if you're thinking about, hey, how do I attract employees
28:51
and where do where do people want to be commuting to?
28:54
I mean, personally, I wouldn't mind commuting down to Rhode Island.
28:56
I'm sure would be a lot easier than going into Boston.
28:58
But if you're thinking about, you know, attracting twenty somethings
29:01
to go work at your company and finance or accounting
29:04
or design or engineering or website design, you can imagine
29:07
how Boston might be a little bit more compelling place
29:09
to get them to come.
29:10
Speaker 5: It depends on the quality of life. I guess that
29:14
you're looking for great air but you know, great airport
29:17
easier commute a though, can get pretty congested down there.
29:21
Arguably some of the best food in the Northeast.
29:24
Speaker 2: So especially time food. Yeah, let's take a quick break
29:27
when we come back, a bit of stack Roulette on
29:29
the Financial Exchange.
29:30
Speaker 1: Miss any of the show. Catch up at your convenience
29:33
by visiting Financial Exchange show dot com and clicking the
29:36
on demand icon, where you'll find all of our interviews
29:39
in full shows. This is your home for the latest
29:42
business and financial news in New England and around the country.
29:46
This is the Financial Exchange Radio Network.
29:56
Speaker 3: This segment of The Financial Exchange is brought to you
29:58
in part by the US Virgin Island Lands Department of Tourism.
30:01
The US Virgin Islands are Saint Croix, Saint Thomas and
30:04
Saint John. Summer is just about over, so now's the
30:07
time to start looking at a fabulous holiday vacation and
30:10
there's no better place than the US Virgin Islands. Enjoy
30:14
perfect weather, world class dining, incredible beaches and a vibrant nightlife.
30:17
No passport is needed and there's no money to exchange.
30:20
Take your next vacation in America's Caribbean paradise the United
30:24
States Virgin Islands. Go to visit USVII dot com to
30:28
book your trip. That's visit USVII dot com.
30:31
Speaker 2: Kroger and Albertsons are continuing to battle the FTC and
30:35
federal government on their merger plans. We in the Northeast
30:39
have very little exposure to either of these two companies.
30:41
But I do believe that Shaws and Star Market are
30:44
owned by Albertsons last time I checked, so we would
30:47
be somewhat looped into this overall deal. But there are
30:50
no other grocers that compete in the Northeast that are
30:54
owned by these parent companies. But taking a look at
30:57
the market, I continue to be just kind of confounded
31:01
by this, by this argument that they're making. So Kroger
31:04
and Albertons are the second and fourth largest grocery sellers
31:08
in the United States. Kroger has an eight point nine
31:11
percent market share, Alberton's a five and a half percent
31:14
market share. That compares with Costco, who takes the number
31:18
three spot at eight point three percent, Amazon taking the
31:21
number five spot at two point eight and then Walmart,
31:24
the behemoth in the room here that is somehow getting ignored,
31:28
is making it with twenty one percent market share. And
31:31
so you take a look at this combined entity, and
31:35
you know, just today, if you actually, you know, put
31:38
these two together, Kroger and Albertsons, you'd be looking at,
31:41
what is that a fourteen and a half percent market share,
31:45
which is still behind Walmart. You still have other smaller
31:48
competitors that are still pretty big on the national scale.
31:53
And that's even with the assumption that every single one
31:56
of those is combined, when realistically both Kroger and Album
32:00
since have said that they are willing to shed some
32:02
brands in order to make this go through, so their
32:04
combined market share might shrink immediately. Some of the arguments
32:09
that the government's making here one they're saying that, look, Costco,
32:12
Sam's Club, these big competitors shouldn't really be considered grocery
32:17
competitors because they do require a membership in order to
32:20
shop there. They sell groceries. Seems like they should should
32:24
be considered in my view, But nonetheless they're discounting them there.
32:27
But I don't see much of an argument on the
32:29
Walmart side, right like, this is the largest grocer in
32:32
the country by market share at twenty one percent, you're
32:35
creating another one that wouldn't even really get to that
32:39
overall market share. And other than the FTC, just being
32:44
against really any merger of scale. At this point in time,
32:48
I'm struggling to come up with the real argument here
32:51
for why these two can't combine.
32:53
Speaker 5: Yeah, the new philosophy on both the left and the right,
32:55
Jadie Vance is very big on being anti bigness, anti business.
33:00
Anti bigness. Bigness is inherently bad. You want to keep
33:04
business small, decentralized, prevent any one entity from acquiring and
33:09
exercising too much power. The other standard, this is a
33:12
little bit out of my depth, but I remember some
33:14
of it. Anybody who learns economics, they get a little
33:17
bit of anti trust economics. The other standard is the
33:19
consumer welfare standard. Consumers harmed? Are they likely to be harmed?
33:23
Are these two entities, when combined at fifteen percent, likely
33:26
to jack up prices leaving people with nowhere else to go?
33:28
Or lower prices put competitors out of business? A lah Rockefeller.
33:34
I'm going back a bit with the reference. I just
33:36
don't know of any other recent ones. So are they
33:39
likely to leverage their power in some ways as in
33:41
some ways to ultimately hurt consumers.
33:43
Speaker 4: That doesn't seem plausible to us. I don't think, Mike,
33:46
based on.
33:49
Speaker 2: What's the right standard here within you know, within fifteen
33:51
minutes of almost every America.
33:53
Speaker 5: It's too bad this will never come up in a
33:54
presidential debate. You wouldn't even know this was an issue.
33:57
And maybe it's not because both both candidates seem to
34:01
agree that you just break up big, bigger businesses.
34:03
Speaker 4: No matter what.
34:05
Speaker 5: But it probably ought to be discussed. We're talking about
34:08
changes that could have a big impact on welfare due
34:11
to scale economies that these two entities have merged.
34:14
Speaker 4: Could I'm gonna chease.
34:15
Speaker 2: I'm going to play Devil's advocate for a moment here
34:18
and just bring up that there's been a few studies,
34:22
and I can't say I'm the most familiar with them,
34:24
but the studies that I've seen on food inflation, you know,
34:27
specifically food at home inflation.
34:30
Speaker 4: Oh yeah, I know where you're going.
34:31
Speaker 2: Yeah, I outpaced everything else. The blame that has been
34:34
levied based on the studies that I've seen, has not
34:37
been on food suppliers. It hasn't been the Nestles and
34:41
the uh who are some big food purdues of the
34:44
world that are jacking up their profit margins the you know,
34:48
if there's going to be a allegation of higher profit margins,
34:52
you have seen it at the grocery stores today. Compared
34:55
to twenty nineteen, profit margins at grocery stores are higher
34:58
than where they were, whereas the same can't be said
35:00
for food suppliers. And so is there a compelling argument
35:03
here that hey, you know, grocery stores, the exact companies
35:06
that we're trying to break up and make compete with
35:08
them have been benefactors of the you know, supply shocks
35:13
and increase in prices over the last few years, And
35:15
so that that would be the only real compelling argument
35:17
I can come up with as to why this shouldn't
35:20
go through. But like I said, it seems pretty flimsy.
35:23
That said, so did the Staples and Office Depot merger
35:26
that the FTC successfully blocked, saying, look, Amazon's not a
35:30
true competitor because they don't have storefronts. So is Walmart
35:34
a true competitor because they also sell tires? I think
35:37
they are still a grocery store competitor, but I'm not
35:39
sure the FTC buys it, and we'll see if the
35:41
judge is buy it. That's all I've got. Taking a
35:45
look around here at markets, we've got still things largely
35:48
in positive territory, albeit a little bit weaker than where
35:51
we last covered at. The Dow still up about one
35:53
hundred and two points a quarter of one percent, the
35:56
S and P five hundred up twenty points, are about
35:59
a third of one percent, and the NASDAC up about
36:02
one hundred and twenty points two thirds of one percent.
36:04
The Rustle two thousand and seven another big day, up
36:06
one point eight percent, and just quickly looking at the
36:10
yield and the ten year Treasury up slightly to three
36:13
point six four percent. Fed Reserve Day tomorrow will be
36:16
covering all that and more so. Tune in for the
36:19
rest of the week for the financial exchange