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Could we fix Social Security today with these proposals? · The Financial Exchange Show

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  Speaker 2: Chuck Mike Entucker with you here on a Thursday, and
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  Speaker 2: after stocks opened in positive territory, we now have a
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  Speaker 2: little bit of a move to the downside in some
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  Speaker 2: of the indices. The Dow is still green for the day,
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  Speaker 2: up sixty four points or about zero point one five percent.
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  Speaker 2: The S ANDP is down two points, so not a
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  Speaker 2: meaningful move down, But the Nasdaq is now down half
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  Speaker 2: a percent, largely being led down by a couple major
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  Speaker 2: tech companies, with Microsoft off six percent after reporting earnings
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  Speaker 2: and Nvidia down another three and a half percent after
• 1:43
  Speaker 2: not well any news other than what happened with deep
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  Speaker 2: Seek earlier this week. So those are kind of the
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  Speaker 2: culprits pulling the index down, because other than that, there's
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  Speaker 2: actually a ton of green on the board side from
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  Speaker 2: a few names that are also off pretty meaningfully. We'll
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  Speaker 2: talk about ups a little bit later on, and they're
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  Speaker 2: down seventeen percent today, FedEx down four percent, Sympathy Comcast
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  Speaker 2: also down about twelve percent, but quite honestly, a ton
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  Speaker 2: of green on the board other than those big names
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  Speaker 2: that are dragging the index. And this is this is exactly,
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  Speaker 2: by the way, what you know we've been talking about
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  Speaker 2: for the last year, is a potential risk that kind
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  Speaker 2: of concentration is. Look, you can have the vast majority
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  Speaker 2: of the market just humming along, but a couple of
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  Speaker 2: those big names drag, and you got the S and
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  Speaker 2: P down for the day, even though most stocks are
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  Speaker 2: actually up to Vidia now in correction, territory off, they're
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  Speaker 2: all time high off about twenty percent now with their move,
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  Speaker 2: And yeah, that's the whole story. Here is plenty of
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  Speaker 2: companies correction, bear market right, bear market territory corrections ten percent. Yeah,
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  Speaker 2: so we've got that going on tenure. US Treasury is
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  Speaker 2: down a touch in terms of yield, down three basis
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  Speaker 2: points to four point five to five percent. We got
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  Speaker 2: Oil West Texts Intermediate up seventy nine cents barrel to
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  Speaker 2: seventy three forty one and Tripaa National amagur gas prices
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  Speaker 2: down three tenths of ascent to three eleven and seven tenths.
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  Speaker 2: And then we've got gold today making a big move
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  Speaker 2: to the upside, a new all time high for gold
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  Speaker 2: as it breaks out again. See if there's any follow
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  Speaker 2: through here, but gold up fifty four to thirty an
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  Speaker 2: ounce to twenty eight, forty seven and fifty cents.
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  Speaker 3: Just one more item that we spoke to at the
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  Speaker 3: beginning of the show today, the American Airlines flight that
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  Speaker 3: crashed in Washington, d C. With presumably sixty four people aboard,
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  Speaker 3: including four crew members, as well as a Blackhawk helicopter.
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  Speaker 3: It is assumed all dead, and President Trump is apparently
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  Speaker 3: about to speak imminately.
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  Speaker 2: On the on the subject. So again, these investigations typically
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  Speaker 2: take months, so I would say, let's let things unfold
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  Speaker 2: before we, you know, try to assume that we know
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  Speaker 2: anything about what happened here, since there's all kinds of
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  Speaker 2: different reporting out there and no one knows anything at
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  Speaker 2: the moment. What we do know something about is Tesla.
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  Speaker 2: They reported earnings after the bell yesterday, and I gotta say, Mike,
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  Speaker 2: I'm a little bit surprised that the stock is somehow
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  Speaker 2: green for the day. It's up one and a quarter percent.
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  Speaker 2: There are good quarters, they are okay quarters. There are
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  Speaker 2: bad ones, and they're disasters. This is not a disaster,
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  Speaker 2: but it falls firmly in the category of bad quarter
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  Speaker 2: in my estimation. I'm curious to get your thoughts as
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  Speaker 2: to what you thought about it, because quite Honestly, there's
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  Speaker 2: nothing in here that's good.
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  Speaker 3: I share your concern, and I think it can be
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  Speaker 3: summed up by a Piper Sandler analyst named Alexander Potter,
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  Speaker 3: who I don't know how you'd have a job as
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  Speaker 3: an analyst when you have a quote like this. Q
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  Speaker 3: four results weren't great, but who cares. Elon has never
• 4:54
  Speaker 3: sounded so bullish. That seems to be the stock market
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  Speaker 3: reaction today. So that is somebody who is paid to
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  Speaker 3: analyze a company's stock. That is your job, and that
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  Speaker 3: is your quote. So here's what we've got here.
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  Speaker 2: Earnings per share seventy three cents versus seventy six cents expected,
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  Speaker 2: so they missed by about four percent. Revenue twenty five
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  Speaker 2: point seven billion versus twenty seven point twenty six expected.
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  Speaker 2: They missed revenue by about six percent. Their revenue increased
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  Speaker 2: just two percent from a year earlier, and automotive revenue
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  Speaker 2: fell by eight percent to nineteen point eight billion from
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  Speaker 2: twenty one point six billion in the same time. And
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  Speaker 2: of that bet, seven hundred million of it came from
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  Speaker 2: regulatory credits they sold rather than selling vehicles. Operating income
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  Speaker 2: declined twenty three percent year over year, to one point
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  Speaker 2: six billion. Net income, which includes a one time tax
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  Speaker 2: benefit last year, declined by seventy one percent, so they
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  Speaker 2: kind of tossed that out because it's not like their
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  Speaker 2: net income actually declined by seventy one percent. I'm not
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  Speaker 2: gonna blame them for a one time recognition of you know,
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  Speaker 2: profit that that was legit a year ago. Operating margins
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  Speaker 2: came in at six point two percent, down from eight
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  Speaker 2: point two percent a year earlier and ten point eight
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  Speaker 2: percent in the previous quarter. So margins are down, Revenue
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  Speaker 2: at your primary business is down, profit is down, and
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  Speaker 2: profit missed expectations. I'm not sure what's good here, and
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  Speaker 2: somehow the stock is up. And I again, I'm not
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  Speaker 2: saying the company is going to go out of business imminently,
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  Speaker 2: but I am saying, hey, companies that report this, they
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  Speaker 2: typically shouldn't be priced at one hundred and twenty times
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  Speaker 2: forward earnings and fourteen times forward sales. I know there's
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  Speaker 2: all the hype about ROBOTAXI this and optimist robot that.
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  Speaker 4: How is anyone still falling for this at that point?
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  Speaker 3: At this point, I mean, I've been promising for a
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  Speaker 3: better part of no more than a decade.
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  Speaker 2: It's been a while, so look, I'm not gonna say
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  Speaker 2: this year has put up a setup time because who
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  Speaker 2: knows again, like this could go on for I have
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  Speaker 2: no idea, but this is an objectively bad quarter, and
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  Speaker 2: any company other than this would probably be down like
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  Speaker 2: this priced this way would probably be down like twenty
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  Speaker 2: five to thirty percent.
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  Speaker 3: On this news, I'll go back to something else, and
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  Speaker 3: I have no idea genuinely how this plays out. But
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  Speaker 3: Elon Musk is a controversial figure, like full stop, I
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  Speaker 3: don't think that anybody would really debate that he is.
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  Speaker 3: I think the only person that can really give Donald
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  Speaker 3: Trump a run for his money in terms of activity
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  Speaker 3: on social media and just toss this stuff out there
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  Speaker 3: frequently and agree with them, disagree with them. There's very
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  Speaker 3: few people who are neutral on the subject. I continue
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  Speaker 3: to wonder what his controversial personality and specifically affiliation with
• 7:59
  Speaker 3: the Trump anddministration does to his vehicle sales. I don't
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  Speaker 3: have a certainty about this, but when I think of
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  Speaker 3: the typical early adopter of evs and therefore Tesla purchaser,
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  Speaker 3: because let's be clear, for years Tesla was selling what
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  Speaker 3: percentage of new EV's in this country, Chuck, like three
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  Speaker 3: quarters eighty nine. I don't think of a Texas Republican.
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  Speaker 3: I think of a California Democrat.
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  Speaker 2: Yeah, I think that's fair, and so, like you know.
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  Speaker 3: I don't know what that means for new vehicle purchases.
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  Speaker 3: I don't know what it means for people selling their vehicles.
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  Speaker 3: I have spoken to individuals who fall left of center
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  Speaker 3: who have been dissuaded from purchasing a Tesla. I haven't
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  Speaker 3: talked to many people right of center who have been
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  Speaker 3: encouraged to buy a Tesla. That's my small universe. I
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  Speaker 3: don't know if that extends further than this, but that's
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  Speaker 3: been my experience in my own universe, and I wonder
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  Speaker 3: how that plays out over the course of the next
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  Speaker 3: two years.
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  Speaker 2: Yeah, I think. I think it's again where I think you
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  Speaker 2: look at this company again, They're they're making money right now.
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  Speaker 2: So this is not a Tesla's gonna go out of
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  Speaker 2: business imminently, story, but it is one where hey, if
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  Speaker 2: you if your sales on your primary product are declining,
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  Speaker 2: why are you being priced like you're gonna have forty
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  Speaker 2: to fifty percent annual growth?
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  Speaker 3: Well, because clearly people some people out there are still
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  Speaker 3: very enthusiastic about this company, and so.
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  Speaker 2: The risk on this is immense. Now, look, if if
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  Speaker 2: you want to actually delivers this year and we get
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  Speaker 2: these robotaxis and like they're even talking about having like
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  Speaker 2: thousands of these Optimist robots being rolled out later this year, okay,
• 9:46
  Speaker 2: like fine, like great, then maybe I can't even say,
• 9:51
  Speaker 2: like maybe it's justified. Again, there's a lot that has
• 9:54
  Speaker 2: to go right in order for this to work. But
• 9:58
  Speaker 2: if it does, okay, at least, like you you've made
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  Speaker 2: those deliveries this year. But Elon even during the press
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  Speaker 2: conference call yesterday, was like, I know, I've you know,
• 10:08
  Speaker 2: kind of missed some deadlines in the past, but but
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  Speaker 2: this time, like I mean it, I'm really I think
• 10:13
  Speaker 2: the phrase he used it was something about the boy
• 10:16
  Speaker 2: crying wolf and here we go fitting So I'm trying
• 10:21
  Speaker 2: to understand. So CNBC like blocked it out. What he said.
• 10:26
  Speaker 2: He said Musketoledge that he had made big self driving
• 10:28
  Speaker 2: promises and predictions that have not come through for many years.
• 10:30
  Speaker 2: He said, with a laugh, I'm telling you there's a
• 10:33
  Speaker 2: blank wolf this time. And the first letter of the
• 10:36
  Speaker 2: word is D. What what is the word that he's
• 10:38
  Speaker 2: trying to use. There what four letter words starts with
• 10:42
  Speaker 2: D that he like, you can't say, you can say,
• 10:46
  Speaker 2: you can say damn like the NBAC would publish damn. Yeah,
• 10:50
  Speaker 2: maybe that's I don't know, but anyways, he says, I'm
• 10:53
  Speaker 2: telling you there's a wolf this time, and you can
• 10:55
  Speaker 2: drive it. In fact, it can drive you. It's a
• 10:56
  Speaker 2: self driving wolf. Got it. So he's saying it's going
• 11:02
  Speaker 2: to be this year and we'll see. But right now,
• 11:07
  Speaker 2: this was an objectively bad quarter from Tesla and it's
• 11:11
  Speaker 2: being forgiven for the moment. We'll have to see how
• 11:15
  Speaker 2: things go from here, because you can't deliver this over
• 11:18
  Speaker 2: and over and not have it eventually impact the stock.
• 11:22
  Speaker 2: Today it's not, but eventually, if you keep doing this,
• 11:26
  Speaker 2: it's going to It's going to matter at some point,
• 11:30
  Speaker 2: but who knows when that is. Take a quick break here.
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  Speaker 2: When we come back, we'll do a little bit of
• 11:35
  Speaker 2: trivia and then we'll talk tariffs.
• 11:37
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• 13:33
  Speaker 2: Mike Peace and Bloomberg Opinion. It is titled even talking
• 13:36
  Speaker 2: about tariffs can cause inflation, and what it boils down
• 13:41
  Speaker 2: to is, Look, we've not seen any tariffs that have
• 13:44
  Speaker 2: been implemented by the Trump administration to this point. Uh.
• 13:49
  Speaker 2: The first potential implementation, I think February first was noted
• 13:53
  Speaker 2: UH as the potential date for Was that just the
• 13:57
  Speaker 2: Mexico and Canada ones or was China included on that?
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  Speaker 3: I think he started tossing in some other countries on
• 14:04
  Speaker 3: that as well. And before we move on question about that,
• 14:08
  Speaker 3: has he kind of painted himself into a corner here
• 14:10
  Speaker 3: where he needs to take action on February first, at
• 14:12
  Speaker 3: the stage, I mean, we're two days away, I don't
• 14:15
  Speaker 3: think there's gonna be major action, but I do think
• 14:17
  Speaker 3: that he has kind of painted himself into this corner.
• 14:19
  Speaker 4: If he has to act.
• 14:21
  Speaker 2: So I saw something yesterday I don't know if it
• 14:23
  Speaker 2: was him or vessent that had spoken on it, and
• 14:26
  Speaker 2: I think said, unless there's like some kind of meaningful
• 14:30
  Speaker 2: movement on stopping the supply of fentanyl coming in, these
• 14:34
  Speaker 2: are going to go in place. So like that's the
• 14:35
  Speaker 2: out is right, Okay, if there's a point to action, yes,
• 14:40
  Speaker 2: if there's something taken that you know, does that okay? Like,
• 14:42
  Speaker 2: then then you can call it off. But there was
• 14:46
  Speaker 2: a survey that was conducted by who was this that
• 14:51
  Speaker 2: conducted it actually University of Texas, California, and Chicago, so
• 14:56
  Speaker 2: economists across those three universities, and one of the questions
• 14:59
  Speaker 2: they asked is, look, who's gonna pay the cost of
• 15:01
  Speaker 2: this of tariffs if they were to go into effect.
• 15:05
  Speaker 2: And what you saw in terms of the responses is
• 15:09
  Speaker 2: that even with differences in political party and how they
• 15:13
  Speaker 2: responded with Democrats saying that you know, sixty eight percent.
• 15:17
  Speaker 2: I'm sorry, consumers would pay sixty eight percent of the cost.
• 15:20
  Speaker 2: Republicans said that it would pay forty one percent of
• 15:22
  Speaker 2: the cost consumers would.
• 15:23
  Speaker 4: That's actually pretty narrow.
• 15:25
  Speaker 2: It is like you can kind of get it and
• 15:27
  Speaker 2: be like, hey, consumers are gonna bear like half the cost,
• 15:29
  Speaker 2: give or take ten percent.
• 15:30
  Speaker 4: It's a pretty clear eyed view of it. Actually.
• 15:32
  Speaker 2: Yeah, people do understand, Hey, if there are tariffs that
• 15:36
  Speaker 2: go into place, pretty good chance that we're gonna have
• 15:39
  Speaker 2: prices go up at least somewhat as a result. And
• 15:42
  Speaker 2: so because of that, one of the things that you've
• 15:45
  Speaker 2: been seeing is some front running. In the same poll,
• 15:49
  Speaker 2: forty three percent of respondents that they would buy a
• 15:51
  Speaker 2: head of the tariff to avoid price increases. Now, this
• 15:54
  Speaker 2: results in extra demand, and so if you have extra demand,
• 15:58
  Speaker 2: just as an example, one of the biggest places we've
• 16:00
  Speaker 2: seen this has been in auto sales, because a lot
• 16:03
  Speaker 2: of auto sales have either imported components or entirely imported vehicles.
• 16:08
  Speaker 2: And so if someone was considering buying a car in
• 16:10
  Speaker 2: Q one of this year, they said in December, hey,
• 16:12
  Speaker 2: you know what, I'm gonna buy it now. And we
• 16:14
  Speaker 2: saw this in the retail sales data where used where
• 16:17
  Speaker 2: I'm sorry, new car sales rose like three percent for
• 16:20
  Speaker 2: the month, and that this doesn't happen like, you don't
• 16:24
  Speaker 2: see that. So, if you're an auto dealer and you've
• 16:27
  Speaker 2: got inventory you got to clear off by the end
• 16:29
  Speaker 2: of the month, you get towards the back half of
• 16:31
  Speaker 2: the month, usually start saying, okay, like what kind of
• 16:33
  Speaker 2: incentives can we offer? Can we do like an extra
• 16:35
  Speaker 2: five hundred dollars off you know, how low can we
• 16:37
  Speaker 2: get you know the price in order to get it
• 16:39
  Speaker 2: off the lot? You don't have to do that now.
• 16:42
  Speaker 2: And so what this means is, hey, consumers end up
• 16:46
  Speaker 2: paying higher prices than they otherwise would. Mike. What is
• 16:49
  Speaker 2: the term we use when someone pays a higher price
• 16:52
  Speaker 2: for the same item inflation? Bingo. So, even though no
• 16:57
  Speaker 2: tariffs have been implemented, the I mean, it's a gold star.
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  Speaker 3: Day, it's travia winner, Mike, Can I read it? Can
• 17:04
  Speaker 3: I win the trivia contest yet?
• 17:05
  Speaker 2: Dugger?
• 17:06
  Speaker 4: I'm excluded?
• 17:07
  Speaker 2: Yes? Got it?
• 17:07
  Speaker 4: Okay?
• 17:08
  Speaker 2: So in any case, this is why, even though tariffs
• 17:11
  Speaker 2: haven't been implemented, you've been seeing this not just amongst individuals,
• 17:14
  Speaker 2: but even amongst businesses. The US trade deficit last month
• 17:18
  Speaker 2: in December was the largest that we have seen since
• 17:21
  Speaker 2: the pandemic. Why do you think that was because businesses
• 17:25
  Speaker 2: we're saying, hey, we're going to try to order multiple
• 17:28
  Speaker 2: months of supply because we don't know what we're going
• 17:31
  Speaker 2: to have in terms of the lay of the land
• 17:33
  Speaker 2: and the law of the land for tariffs going forward.
• 17:37
  Speaker 2: So I think this is something that bears watching in
• 17:41
  Speaker 2: terms of, Hey, if there are no tariffs implemented even
• 17:44
  Speaker 2: this weekend, do we still see businesses and individuals continue this?
• 17:49
  Speaker 2: But at a certain point, you're also so stocked up
• 17:51
  Speaker 2: on this stuff. What does that do to economic activity
• 17:55
  Speaker 2: if you're no longer having to buy all this this
• 17:57
  Speaker 2: extra you know, just as an example, if all those
• 17:59
  Speaker 2: cars were front run well g then is there a
• 18:03
  Speaker 2: dearth of you know, people buying vehicles in the next
• 18:06
  Speaker 2: month or two. Yes, that might help with the pricing,
• 18:09
  Speaker 2: But if it drops overall economic activity, how big is
• 18:12
  Speaker 2: that potential slow down? We don't know any of these things.
• 18:14
  Speaker 2: But this is how it all fits together and how
• 18:16
  Speaker 2: we try to put the puzzle together to figure out
• 18:19
  Speaker 2: what's going on with the US economy.
• 18:21
  Speaker 3: It's just an extended and more detailed version of the
• 18:23
  Speaker 3: self fulfilling prophecy of inflation.
• 18:25
  Speaker 2: Right, if you.
• 18:26
  Speaker 3: Believe their prices will go up, you'll pull your purchases forward.
• 18:29
  Speaker 3: If you believe that prices will go down, you will
• 18:32
  Speaker 3: delay your purchases. And one can result in higher inflation,
• 18:34
  Speaker 3: another can result in a due increase and decrease in
• 18:37
  Speaker 3: economic activity and potential recession.
• 18:40
  Speaker 2: So that's again just I think apiece that really outlines nicely,
• 18:45
  Speaker 2: you know what we're seeing in terms of again potential
• 18:48
  Speaker 2: inflation and just the overall the status quo right now
• 18:53
  Speaker 2: in terms of how people are actually behaving even though
• 18:57
  Speaker 2: no tariffs have been put into place at this point.
• 19:00
  Speaker 2: Taking a look at markets as we had towards the
• 19:02
  Speaker 2: bottom of the eye of the Dow is still positive
• 19:04
  Speaker 2: at forty four points in the green as in Peace
• 19:06
  Speaker 2: turns slightly positive now up five points to sixty five.
• 19:10
  Speaker 2: Nasdaq's still in the red by about a quarter percent,
• 19:12
  Speaker 2: down fifty five points at the moment. Tenure Treasury still
• 19:15
  Speaker 2: seeing yields coming in just a bit down two and
• 19:18
  Speaker 2: a half basis points to four point five to three percent.
• 19:21
  Speaker 2: So overall, pretty quiet day overall, but some big moves
• 19:24
  Speaker 2: happening in individual names, mostly in tech, but also a
• 19:28
  Speaker 2: couple other names that are significantly off, but the rest
• 19:31
  Speaker 2: of the market holding up pretty nicely. Taking a quick
• 19:34
  Speaker 2: break here, Trivia answer is next.
• 19:40
  Speaker 6: Bringing the latest financial news straight to your radio every day.
• 19:45
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• 19:51
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• 19:58
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• 20:06
  Speaker 5: Trivia question today was what was the name of the
• 20:08
  Speaker 5: twenty eighteen Dick Cheney biopic I'll Be Vice starred Christian
• 20:13
  Speaker 5: Bale as Dick Cheney, Amy Adams as Lynn Cheney, and
• 20:17
  Speaker 5: Steve Carell is Donald Rumsfeld. Winner today was Carly from
• 20:21
  Speaker 5: South Dennis, mass taking home a Financial Exchange Show T shirt.
• 20:26
  Speaker 5: And we played trivia every day here on the Financial Exchange.
• 20:30
  Speaker 5: See complete contest rules at Financial Exchange Show dot com.
• 20:35
  Speaker 2: Mike, we got pc here from market Watch. Here's a
• 20:37
  Speaker 2: proposal to fix social Security that we could enact today.
• 20:41
  Speaker 2: It is by Alicia Mannell, who works at the Boston College.
• 20:47
  Speaker 2: I forget the exact name. It's like the Boston College
• 20:49
  Speaker 2: Center for Retirement Studies or something along those lines.
• 20:51
  Speaker 3: Yeah, they've done a number of interesting things. They did
• 20:53
  Speaker 3: a long term care study a few years ago that
• 20:56
  Speaker 3: was pretty fascinating, it was, but they do some good work.
• 20:59
  Speaker 2: And it's a seventeen point plan as to how you
• 21:04
  Speaker 2: can fix the entire SOL security problem at the snap
• 21:08
  Speaker 2: of a finger. Here are the biggest items that are
• 21:11
  Speaker 2: included in it. Because I'm I'm not going to go
• 21:12
  Speaker 2: through all seventeen because we're just not. Let's do the
• 21:16
  Speaker 2: ones that cover like eighty percent of the fix. Sure.
• 21:19
  Speaker 2: The first one is increasing the taxable maximum earnings level
• 21:24
  Speaker 2: for SOL security by six percent faster than the current loss,
• 21:27
  Speaker 2: starting in twenty twenty seven and basically going so increasing
• 21:31
  Speaker 2: the payroll cap for SOUL security from the current level
• 21:35
  Speaker 2: to basically double that over It'll it'll take about ten
• 21:39
  Speaker 2: years to do. So that's going to cover about twenty
• 21:41
  Speaker 2: percent of the shortfall.
• 21:43
  Speaker 4: Okay.
• 21:44
  Speaker 2: The next piece, that's the biggest one here, that covers
• 21:47
  Speaker 2: about a quarter of the shortfall, place all proceeds from
• 21:51
  Speaker 2: taxation of soil security benefits, including retrospective benefits into the
• 21:55
  Speaker 2: Old Age Survivor and Disability Trust funds beginning January one,
• 21:58
  Speaker 2: twenty twenty seven. Basically, right now, some of the money
• 22:01
  Speaker 2: from Social Security actually gets kicked over to Medicare in
• 22:04
  Speaker 2: order to help make Medicare more sustainable. This is pretty
• 22:07
  Speaker 2: much saying, look, let's fix Social Security and then we'll
• 22:09
  Speaker 2: deal with Medicare.
• 22:10
  Speaker 4: Which I don't know about that one.
• 22:13
  Speaker 3: I mean, Americans care deeply about both of these programs,
• 22:15
  Speaker 3: and I'm not sure you can rob Medicare to pay
• 22:18
  Speaker 3: sour Security.
• 22:18
  Speaker 2: Well, this is the thing. It's basically saying, look, we're
• 22:20
  Speaker 2: gonna fix our problem by making that one worse.
• 22:22
  Speaker 3: And that's a quarter of the makeup here, Like, this
• 22:25
  Speaker 3: is not an insignificant sum that you're taking away from Medicare.
• 22:28
  Speaker 3: This is how you fund a quarter of the fix
• 22:30
  Speaker 3: for Social Security. It's the single biggest line item. Yeah,
• 22:33
  Speaker 3: so I would I would question that one.
• 22:38
  Speaker 2: Next one, increase the number of benefit computation years from
• 22:41
  Speaker 2: thirty five to thirty six, and then increase gradually to
• 22:44
  Speaker 2: age to not age forty to forty. So right now
• 22:47
  Speaker 2: social Security is calculated based on your highest earning thirty
• 22:51
  Speaker 2: five years. This would change it to forty over the
• 22:54
  Speaker 2: next fifteen years by aged by twenty forty so saying, hey,
• 22:58
  Speaker 2: in order to get a full benefit, you can't just
• 23:01
  Speaker 2: work thirty five years, you need to work forty.
• 23:03
  Speaker 3: So let's see you enter the labor force at twenty two.
• 23:05
  Speaker 3: That brings you to sixty two of consistent years. Okay,
• 23:08
  Speaker 3: got it. Yeah, so that's what they're talking about.
• 23:10
  Speaker 2: I'm not saying any of these are inherently good or bad,
• 23:12
  Speaker 2: except for the one that we said was bad. But
• 23:15
  Speaker 2: you know, we'll give some thoughts in a little bit
• 23:18
  Speaker 2: on some of these other ones. Increasing the normal retirement
• 23:21
  Speaker 2: age for the top forty percent of the all career
• 23:24
  Speaker 2: average earnings distribution only the top twenty percent would realize
• 23:28
  Speaker 2: and increase in the retirement age to seventy, phased in
• 23:31
  Speaker 2: starting in twenty thirty six over a seventeen year period
• 23:35
  Speaker 2: that would end in twenty fifty four. So basically, what
• 23:38
  Speaker 2: it's saying is that if you're in some of the
• 23:40
  Speaker 2: highest earning cohorts, your full retirement age is going to
• 23:46
  Speaker 2: get phased up to age seventy from age sixty seven.
• 23:51
  Speaker 2: Now I have no idea how they calculate this, but
• 23:54
  Speaker 2: they have some way of doing it. Obviously. Again, this
• 23:58
  Speaker 2: makes up about seventeen eighteen percent of the change. So
• 24:03
  Speaker 2: these are the biggest items that they're talking about doing.
• 24:07
  Speaker 2: It's increasing the percentage of wages that can be taxed
• 24:12
  Speaker 2: to pay for solid security, so raising the earnings cap,
• 24:16
  Speaker 2: moving funds back from Medicare to SOLI security, raising the
• 24:20
  Speaker 2: number of years you need to work, and basically for
• 24:25
  Speaker 2: the high earners making full retirement age later.
• 24:28
  Speaker 3: So look, this is a plan that would hypothetically get
• 24:33
  Speaker 3: the job done. I have pointed out already. There's two
• 24:36
  Speaker 3: things that I'll point out. One would be the piece
• 24:39
  Speaker 3: on basically taking money from Medicare. I don't know how
• 24:43
  Speaker 3: you're going to justify that one.
• 24:44
  Speaker 2: Then Medicare is out of money in twenty twenty eight
• 24:46
  Speaker 2: instead of twenty thirty.
• 24:47
  Speaker 3: The second one, which I didn't read in detail, was
• 24:49
  Speaker 3: change immigration policies. That it does account for nearly ten
• 24:53
  Speaker 3: percent of this, and I'm not sure what political appetite
• 24:56
  Speaker 3: there is right now to change immigration policies to.
• 25:00
  Speaker 2: The more lenient.
• 25:02
  Speaker 3: Right, So, yeah, some of this stuff isn't practical. I'll
• 25:06
  Speaker 3: throw it right out there. This is a plan that
• 25:08
  Speaker 3: by and large funds the increase in source security by
• 25:12
  Speaker 3: increasing taxes and reducing benefits for higher wage earners, So
• 25:15
  Speaker 3: let's be clear about that as well.
• 25:18
  Speaker 2: And I don't know.
• 25:20
  Speaker 3: At least it's something at least somebody's putting something together.
• 25:22
  Speaker 3: But again, you don't have really any politicians actually talking
• 25:25
  Speaker 3: about this.
• 25:26
  Speaker 2: Yeah, so I think that ultimately the big thing that
• 25:30
  Speaker 2: I come back to on this there are going to
• 25:32
  Speaker 2: be changes to Social Security in the next ten years.
• 25:34
  Speaker 2: There have to be.
• 25:36
  Speaker 4: Yep, we're running drive pretty quickly here.
• 25:38
  Speaker 2: What those changes are, I think is still very much
• 25:40
  Speaker 2: an open question, but they're still at this point. There
• 25:43
  Speaker 2: are dozens of different ways that you can fix the program.
• 25:46
  Speaker 4: There are.
• 25:47
  Speaker 3: The longer you wait, the worse those fixes get. And
• 25:51
  Speaker 3: I feel like we fail to acknowledge that over and
• 25:53
  Speaker 3: over again. The longer you wait to implement these changes,
• 25:57
  Speaker 3: the more dramatic those changes need to be. Listen, folks,
• 26:01
  Speaker 3: if you're listening right now, Undoubtedly Social Security is going
• 26:05
  Speaker 3: to play a role in some way, shape or form
• 26:08
  Speaker 3: in your own retirement plan. There are a lot of
• 26:11
  Speaker 3: decisions that need to be made when it comes to
• 26:14
  Speaker 3: shoring up the program. There are nearly as many changes
• 26:17
  Speaker 3: and decisions that need to be made about your own
• 26:19
  Speaker 3: financial situation and the decisions that you have to make
• 26:22
  Speaker 3: regarding your own benefits. If you're not feeling fully educated
• 26:26
  Speaker 3: on the subject of social security, the changes that just
• 26:29
  Speaker 3: went into place regarding the web and the GPO, and
• 26:32
  Speaker 3: your options when it comes to claiming those benefits, but
• 26:34
  Speaker 3: most importantly, how all of those options then fit into
• 26:37
  Speaker 3: your larger financial scenario and picture. Please give the folks
• 26:41
  Speaker 3: at Armstrong Advisory Group a call. I know we talk
• 26:43
  Speaker 3: a lot about investment management and evaluating the markets, but
• 26:48
  Speaker 3: this work on social security and the analysis that our
• 26:51
  Speaker 3: advisors at Armstrong Advisor Group do is the day in
• 26:54
  Speaker 3: and day out work that they conduct with their clients.
• 26:57
  Speaker 3: If you have questions along those lines and could use
• 26:59
  Speaker 3: a second opinion, please call us at eight hundred three
• 27:02
  Speaker 3: nine three for zero zero one. Any questions regarding how
• 27:06
  Speaker 3: pensions or social security income can work into your bigger
• 27:09
  Speaker 3: financial strategy. Again, give us a ring to schedule your
• 27:12
  Speaker 3: free consultation at eight hundred three nine three for zero
• 27:16
  Speaker 3: zero one.
• 27:17
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 27:19
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 27:22
  Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
• 27:25
  Speaker 1: your own financial tax into state planning advisors before making
• 27:28
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 27:31
  Speaker 1: advisory services Mike.
• 27:33
  Speaker 2: Interestingly, just on the topic of social security, there was
• 27:36
  Speaker 2: a survey that was conducted by the National Academy of
• 27:40
  Speaker 2: Social Insurance ARP and the National Institute on Retirement Security,
• 27:44
  Speaker 2: and they asked Americans, look, how would you like us
• 27:47
  Speaker 2: to fix social Security? Which is like, I don't know
• 27:50
  Speaker 2: that I've ever seen that issue polled. Maybe I'm sure
• 27:53
  Speaker 2: it has been, but I just don't think i've ever
• 27:55
  Speaker 2: seen it. And basically what it's when you look at
• 28:01
  Speaker 2: the most popular option was, yes, it was eliminating the
• 28:05
  Speaker 2: payroll cap for individuals earning more than four hundred thousand yep.
• 28:09
  Speaker 2: Other things that were talked about that were popular was
• 28:14
  Speaker 2: raising the payroll tax rate from six to two up
• 28:18
  Speaker 2: to seven to so again talking about like, yeah, let's
• 28:21
  Speaker 2: pay more money in rather than cutting benefits. Other changes
• 28:25
  Speaker 2: that were favored adjusting the annual cost of living amount
• 28:30
  Speaker 2: in order to you know, make that potentially more favorable.
• 28:35
  Speaker 2: And the least popular change was to reduce benefits for
• 28:39
  Speaker 2: people with higher income, so basically not means testing social Security.
• 28:44
  Speaker 2: The income levels that they gave were sixty thousand for
• 28:48
  Speaker 2: individuals and married couples at one hundred and twenty thousand
• 28:51
  Speaker 2: or more. So those are the numbers they outlined. There
• 28:55
  Speaker 2: any other thoughts, Mike.
• 28:56
  Speaker 4: No, I think it.
• 28:58
  Speaker 3: Look it follows trajectories we see on many of these
• 29:01
  Speaker 3: types of things. When there's a budget shortfall, the most
• 29:04
  Speaker 3: popular option is to tax the rich. We saw it
• 29:06
  Speaker 3: in Massachusetts with the new Millionaire's tax. And when generally
• 29:09
  Speaker 3: these things are put to a ballot, that's how people
• 29:12
  Speaker 3: on average tend to vote. And I didn't find any
• 29:16
  Speaker 3: of this immensely surprising. I suppose you're right that this
• 29:19
  Speaker 3: question in this way hasn't really been asked that I'm
• 29:21
  Speaker 3: aware of. But I'm not immensely surprised by the responses,
• 29:25
  Speaker 3: which are, if I'm to sum them up, don't cut
• 29:28
  Speaker 3: my benefit and tax people more to fill the gap.
• 29:33
  Speaker 2: Let's take a quick break. When we come back, it's
• 29:35
  Speaker 2: time for stack rou Let's.
• 29:38
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• 29:41
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• 30:13
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• 31:00
  Speaker 3: Before we do move on to stack Roulette. There's been
• 31:03
  Speaker 3: a bit of breaking local news when it comes to
• 31:06
  Speaker 3: the DC plane crash.
• 31:08
  Speaker 4: It's being reported. First off, for anyone unfamiliar.
• 31:11
  Speaker 3: One of the largest figure skating centers in the Northeast
• 31:15
  Speaker 3: is located just down the road from us in our
• 31:17
  Speaker 3: studio here in Norwood, Massachuset's the Skating Club of Boston,
• 31:20
  Speaker 3: and six members of that community community were on the flight.
• 31:24
  Speaker 3: Skaters Jenahan and Spencer Lane, along with their mothers, Jinhan
• 31:28
  Speaker 3: and Christine Lane, and two coaches, Evgennya Shishkova and Vadam Naumov,
• 31:34
  Speaker 3: Russians who won the Paris title in ninety four were
• 31:37
  Speaker 3: aboard the planes. So just thoughts out to that local community.
• 31:41
  Speaker 3: It's a tight knit one and pretty local to the
• 31:45
  Speaker 3: show here. Moving on Boston area liquor stores dealing with
• 31:50
  Speaker 3: the sobering reality of dry January. Tucker, how big of
• 31:53
  Speaker 3: a thing is dry January today? I know we've seen
• 31:57
  Speaker 3: a lot of, I guess, improvement on the non alcoholic
• 32:00
  Speaker 3: segment when it comes to beer and.
• 32:04
  Speaker 4: That specific area.
• 32:06
  Speaker 3: I personally haven't tried any of the non alcoholic liquors,
• 32:09
  Speaker 3: but I know that you know, Free Spirits is a
• 32:11
  Speaker 3: huge brand that has been making a little bit in
• 32:14
  Speaker 3: the way of waves over the last few years. When
• 32:16
  Speaker 3: it comes to all of this, I just, yeah, I
• 32:20
  Speaker 3: just don't know that many people doing dry January still,
• 32:23
  Speaker 3: But maybe it is a growing feature of all of this,
• 32:25
  Speaker 3: because clearly the brands are leaning into it pretty heavily.
• 32:29
  Speaker 5: Yeah, I mean, nobody in my social circle participates in
• 32:34
  Speaker 5: dry January. Well, but that being said, I do notice
• 32:38
  Speaker 5: that once in a while you'll see people mix in
• 32:42
  Speaker 5: some non alcoholic beverages, whether that's from Athletic Brewing, who
• 32:45
  Speaker 5: actually has a couple of beers that are really taste
• 32:49
  Speaker 5: like a legit ipa if you haven't tried that.
• 32:51
  Speaker 4: I had the non alcoholic Guinness the other day.
• 32:55
  Speaker 5: That was, Oh yeah, my buddy was drinking that couple
• 32:58
  Speaker 5: weeks ago. He thought it was like pretty similar to
• 33:01
  Speaker 5: the actual Guinness. I saw somebody else was drinking like
• 33:05
  Speaker 5: a like a mixed cocktail sort of thing. It was
• 33:08
  Speaker 5: like kind of supposed to be like a moss calm
• 33:09
  Speaker 5: mule sort of thing. Obviously no alcohol there, but yeah,
• 33:14
  Speaker 5: I mean it's clearly it seems to be impacting liquor
• 33:17
  Speaker 5: stores and furthermore, restaurants, whether that's yeah, people pulling back
• 33:22
  Speaker 5: on spending or the dry January thing as it is,
• 33:27
  Speaker 5: and you're seeing an increase in mocktails at restaurants too,
• 33:29
  Speaker 5: but the restaurant industry itself hates a month of January.
• 33:32
  Speaker 2: Seemed like.
• 33:33
  Speaker 4: Yeah.
• 33:34
  Speaker 3: I had a confusing experience last weekend when I was
• 33:37
  Speaker 3: down at the Providence Bruins game and I was checking
• 33:42
  Speaker 3: out there and like most sporting venues, you can only
• 33:44
  Speaker 3: purchase two alcoholic beverages at once, and I had two
• 33:48
  Speaker 3: alcoholic beverages and a non alcoholic beer in my hands,
• 33:51
  Speaker 3: and they're like, now we can't, we can't sell you
• 33:54
  Speaker 3: that third one, and.
• 33:57
  Speaker 5: Because we haven't been told what to do in that
• 33:59
  Speaker 5: precise Yeah, but it.
• 34:01
  Speaker 3: Was further confusing because she goes that, you know, that's
• 34:03
  Speaker 3: five percent alcohol. I was like, no, it's not no,
• 34:08
  Speaker 3: and she's like, yeah, it's five percent alcohol. I'm like, no,
• 34:11
  Speaker 3: like a beer is five percent alcohol, this is non alcohol,
• 34:13
  Speaker 3: but light is like.
• 34:14
  Speaker 5: Four point two percent alcohol.
• 34:16
  Speaker 3: She was just confused. It is zero point five percent alcohol.
• 34:19
  Speaker 3: So she just had the decimal place in the wrong spot.
• 34:22
  Speaker 3: But nonetheless, there is a zero. They have not quite
• 34:24
  Speaker 3: adapted all of these things to it. It was not
• 34:27
  Speaker 3: a big deal, you know, glad they put the non
• 34:30
  Speaker 3: alcoholic beer back and went back a few minutes later.
• 34:32
  Speaker 4: But just a funny outcome.
• 34:33
  Speaker 3: But yeah, if you haven't seen these in your store shelves,
• 34:36
  Speaker 3: they are on. They're in every single liquor store I've
• 34:39
  Speaker 3: been to, and they're pretty much on every restaurant menu
• 34:42
  Speaker 3: that I've been to now to the mocktails, the mocktails
• 34:45
  Speaker 3: and the non alcoholic beers, and you know, it's a
• 34:49
  Speaker 3: growing segment. And like I said, I've primarily the times
• 34:54
  Speaker 3: that I have had one is in a social situation where.
• 34:57
  Speaker 4: Everyone is drinking.
• 34:58
  Speaker 3: And I was at a business event a few months
• 35:01
  Speaker 3: ago and it was like four pm and they opened
• 35:05
  Speaker 3: up the bars for conversations and was like, it's a
• 35:07
  Speaker 3: late start. I don't want to be drinking from four
• 35:10
  Speaker 3: to eleven PM at a business setting. So you know,
• 35:13
  Speaker 3: I had a non alcoholic kind of and that's primarily
• 35:16
  Speaker 3: where I've been experiencing them. But a very fast growing
• 35:20
  Speaker 3: segment there. Switching gears for a moment here, we talked
• 35:25
  Speaker 3: briefly about it, but ups stock now in trading as
• 35:28
  Speaker 3: we close in on the noon hour is down, Wow,
• 35:32
  Speaker 3: over seventeen percent now they did report earnings, and they
• 35:37
  Speaker 3: have kind of resumed a pattern of misses that they've
• 35:40
  Speaker 3: been experiencing over the course of the last few years.
• 35:43
  Speaker 3: They provided a pretty downbeat outlook for twenty twenty five
• 35:47
  Speaker 3: as well. Their biggest single customer, of course, is Amazon,
• 35:50
  Speaker 3: and Amazon has been competing with UPS in a lot
• 35:53
  Speaker 3: of different ways. FedEx a few years ago took the
• 35:56
  Speaker 3: approach of we are no longer partnering with Amazon. It
• 35:59
  Speaker 3: wasn't that big a piece of their business, and I
• 36:01
  Speaker 3: think they saw the threat of Amazon wants to become
• 36:05
  Speaker 3: a delivery behemoth. The company said effective January one, it
• 36:10
  Speaker 3: had brought in house one hundred percent of their UPS
• 36:12
  Speaker 3: sure prost product, which was offered in collaboration with the
• 36:15
  Speaker 3: US Postal Service. But the big news here again, UPS
• 36:20
  Speaker 3: had a reach an agreement in principle with their largest customer,
• 36:23
  Speaker 3: Amazon to lower its volume by more than fifty percent
• 36:26
  Speaker 3: in the second half of twenty twenty six. It's not
• 36:29
  Speaker 3: spelled out why they needed to do that. If it's
• 36:31
  Speaker 3: simply because Amazon is trying to bring more of it
• 36:33
  Speaker 3: in house, if it's not a terribly profitable segment for Amazon,
• 36:38
  Speaker 3: I'm not entirely sure, but I will say that my
• 36:41
  Speaker 3: primary experience with UPS these days is returning Amazon packages,
• 36:45
  Speaker 3: which just doesn't seem like a fantastic business model. If
• 36:48
  Speaker 3: you are UPS, do you, I mean, Tucker, did you
• 36:52
  Speaker 3: ever go into a UPS store?
• 36:53
  Speaker 5: Because I just I go to a UPS store to
• 36:55
  Speaker 5: return an Amazon package and that's it pretty much.
• 36:59
  Speaker 2: And that's it.
• 37:00
  Speaker 3: So again, UPS stock dropping now about seventeen percent in
• 37:05
  Speaker 3: early trading. That brings their company stock to a place
• 37:08
  Speaker 3: they haven't been since twenty twenty, during the pretty early
• 37:11
  Speaker 3: stages of COVID. And you can imagine with the additional
• 37:15
  Speaker 3: thread of potential tariffs and you know, hits on trade
• 37:18
  Speaker 3: in the future, that would be another I would say,
• 37:22
  Speaker 3: not sure fire hit against their business, but a potential
• 37:25
  Speaker 3: risk that they have out there as well is what
• 37:28
  Speaker 3: happens with global trade. UPS is very much a global company.
• 37:32
  Speaker 3: As we close in on the end of the show,
• 37:34
  Speaker 3: here all three markets now in positive territory. The DOWS
• 37:37
  Speaker 3: up one hundred and sixty five points, a little bit
• 37:39
  Speaker 3: more than a third of percent, the SMP up twenty
• 37:42
  Speaker 3: or one third of one percent, and NASDAC up now
• 37:45
  Speaker 3: thirteen and a half percent, sorry, thirteen points or one
• 37:50
  Speaker 3: tenth of one percent. We will have some big earnings
• 37:52
  Speaker 3: out after the bell today, including Apple and Visa, so
• 37:57
  Speaker 3: tune in tomorrow for the show, folks.
• 37:58
  Speaker 4: It'll be, no doubt a big.
• 38:00
  Speaker 3: One as these large tech companies continue to digest new
• 38:03
  Speaker 3: and changing AI news.
• 38:05
  Speaker 4: That's all the time we have for today. Have a
• 38:06
  Speaker 4: great rest of your afternoon.