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Will Trump stand by while RFK Jr goes after fast food? · The Financial Exchange Show

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Speaker 1: Armstrong and Mark Vandetti.
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Speaker 2: Good morning, and welcome back to the Financial Exchange. It
1:13
Speaker 2: is Mike Armstrong, Mark and bet Mark Vandetti. I've got
1:16
Speaker 2: my last name, but not your last name. Sorry about that.
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Speaker 2: And notice kitchen on the board this morning the Financial Exchange.
1:24
Speaker 2: It's not spelled like the kitchen that you and I know.
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Speaker 2: It's a little different than that. Markets are mixed at
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Speaker 2: the moment. Dow positive sixteen points, just basically flat S
1:33
Speaker 2: and P down two points, or again basically flat NASDAK
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Speaker 2: down thirty points, a little bit more than a tenth
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Speaker 2: of a percent, Rustle two thousand off about a third
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Speaker 2: of eight percent. In bond markets, we've got yields moving
1:45
Speaker 2: slightly higher, as Jerome Powell is addressing Congress. At the moment,
1:49
Speaker 2: we've got the yield and the ten year Treasury sitting
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Speaker 2: around four point five four percent. Leads me over to
1:57
Speaker 2: mortgage markets, where you've got the thirty year fixed rate
2:00
Speaker 2: mortgage sitting at seven point zero one percent. For those
2:04
Speaker 2: in the Boston area housing market where basically just about
2:07
Speaker 2: everything is a jumbo, you're sitting at seven point three
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Speaker 2: percent on the thirty year jumbo rates. Price of a
2:13
Speaker 2: barrel of oil moving up slightly today on potential tariff news,
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Speaker 2: or though maybe it's just moving up because it's moving
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Speaker 2: up a percentage point up to seventy three dollars and
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Speaker 2: six cents a barrel to one percent daily move. The
2:27
Speaker 2: price of a gallon of gas now nationally sitting at
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Speaker 2: three dollars and fourteen cents. Anything else catching your rise
2:35
Speaker 2: market wise? Mark. We did have some earnings reports earlier today.
2:38
Speaker 2: Coca Cola beat on earnings in spite of some currency
2:42
Speaker 2: problems that they're having. By problems, I just mean they
2:45
Speaker 2: do a whole bunch of sales overseason. You've got to
2:47
Speaker 2: translate that back to dollars. Their stocks up three point
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Speaker 2: four percent this morning. And then last major earnings report
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Speaker 2: will come from in Vidia, and that is coming out
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Speaker 2: not next week but the following if I'm not mistaken.
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Speaker 3: Now, yields are up on longer term developed economy government
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Speaker 3: bonds all over the world. Always hard to tell if
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Speaker 3: it's US rates driving rates up elsewhere or if they're
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Speaker 3: all responding to some common factor. I can't find a
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Speaker 3: common factor other than the potential threat of tariffs and
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Speaker 3: the inflationary impact of tariffs. Both here and abroad, if
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Speaker 3: our trading partners retaliate. The other obvious culprit, potentially obvious
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Speaker 3: culprit is Powell not suggesting that rates are likely to
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Speaker 3: come down, at least not markedly in the near term.
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Speaker 3: That might put upward pressure on longer term rates, though
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Speaker 3: you could also see it doing exactly the opposite. A
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Speaker 3: more restrictive FED might mean lower growth and lower inflation,
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Speaker 3: which could propel treasury prices higher. So I don't know,
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Speaker 3: and maybe it's just noise. Maybe there's something deeper going on.
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Speaker 2: And ultimately, like we said, in spite of all that,
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Speaker 2: you know, fury around all sorts of stuff with tariffs.
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Speaker 2: Markets are barely this morning, so they're all either not
4:02
Speaker 2: taking the trade war threat seriously and sniffing out some
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Speaker 2: deals to be made, or a bit of whistling past
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Speaker 2: the graveyard still because let's be clear, a trade war
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Speaker 2: would be bad for capital. Why this week's inflation report
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Speaker 2: is especially important. We will get a CPI report tomorrow
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Speaker 2: at eight thirty am, and I'm not sure I'm buying
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Speaker 2: that this week's inflation report we have this conversation is
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Speaker 2: month especially important.
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Speaker 3: I swear we've we've had this conversation at least a
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Speaker 3: few times in the past few years.
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Speaker 2: I was gonna ask, so you know, inflation peaked back
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Speaker 2: in the summer of twenty twenty two, so you know,
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Speaker 2: we're like, we have a good three years thirty six
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Speaker 2: separate CPI reports that have been printed since that point
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Speaker 2: in time. Does this even make the top ten percent?
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Speaker 2: To you? It doesn't It a.
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Speaker 3: Result is extreme. It will we want really no deal
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Speaker 3: after the fact.
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Speaker 2: But sitting here the day before the inflation report comes out,
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Speaker 2: I'm not all that concerned about a spikeation for that.
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Speaker 3: Why is it who's saying that this will bet.
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Speaker 2: Nick tim Ross from the Wall Street Journal is saying
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Speaker 2: that it is going to be an especially important inflation report.
5:09
Speaker 2: Here's his argument. For the last two years, you saw
5:13
Speaker 2: somewhat of a cyclical bounce and inflation in the first
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Speaker 2: quarter of the year because of some seasonal adjustments and
5:19
Speaker 2: changes that they make at the beginning of the year,
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Speaker 2: and so might we see that tick off here in January?
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Speaker 2: And again, I just don't think that makes it a
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Speaker 2: particularly important inflation report. Those we're going to tune in,
5:30
Speaker 2: we're going to report on it. We'll tell you all
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Speaker 2: the details yeah, but I can't sit here the day
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Speaker 2: before this inflation report comes out saying Wow, if this
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Speaker 2: print's a tenth of a percentage point higher or lower,
5:40
Speaker 2: we're going to have a real distinct shift in policy here,
5:43
Speaker 2: can you.
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Speaker 3: Well, I have no idea obviously exactly how they're waiting
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Speaker 3: these things, but generally speaking, as you guys like to
5:51
Speaker 3: say a lot on this show, one print does not
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Speaker 3: constitute a trend. You need really several months, and ideally
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Speaker 3: you want to conclusion to be borne out by several
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Speaker 3: different measures, and thank goodness, there are many different measures
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Speaker 3: of inflation out there.
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Speaker 2: Yeah, I don't know, just you know, compared to early
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Speaker 2: twenty twenty two, when inflation was really starting to kick
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Speaker 2: in and I was really fascinated by what was going
6:13
Speaker 2: to come out in the next report, compared to say,
6:17
Speaker 2: late twenty twenty three, when we were thinking that inflation
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Speaker 2: was defeated, but oh will it have a comeback? I
6:22
Speaker 2: was much more interested in the reports that were gonna
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Speaker 2: come out. So day, I'm I'm just not convinced that
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Speaker 2: this is important.
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Speaker 3: Headline last month, which reflects activity in the month before.
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Speaker 3: The headline number reported last month was I think four
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Speaker 3: tenths of a percent month over a month that was elevated.
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Speaker 3: I think it was. I think energy prices were the culper,
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Speaker 3: But if not, it was something Obviously that's the larger point.
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Speaker 3: There's always something pulling them, pulling headline up or down.
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Speaker 3: So another print, I guess to use the financial press
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Speaker 3: jargon for release of data, another very high print might
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Speaker 3: get people's attention and get them wondering if the luck
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Speaker 3: of special factors which is pulled, which you have helped
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Speaker 3: to pull inflation down over the past couple of years,
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Speaker 3: maybe that maybe our luck there is run out. I
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Speaker 3: don't know, Mike.
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Speaker 2: Yeah, So as of the last report back in December,
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Speaker 2: you're over your inflation was running just shy of three percent.
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Speaker 2: That's expected to dip a little bit tomorrow. If you
7:16
Speaker 2: strip out food and energy, which have actually been dragging
7:18
Speaker 2: down inflation, especially the energy side of the equation, then
7:22
Speaker 2: inflation has been running three point two percent over the
7:24
Speaker 2: course of the last year. One item in particular that
7:27
Speaker 2: I've been focused on over the last couple of years
7:29
Speaker 2: and just curious about, has to do with shelter costs.
7:32
Speaker 2: I know we've all seen housing prices in some parts
7:35
Speaker 2: of the country double, But most recently the trend has
7:38
Speaker 2: been towards actually lower costs for shelter, and that's been
7:42
Speaker 2: borne out by a few different surveys that say realtor,
7:44
Speaker 2: dot com and others have been doing on the rental
7:47
Speaker 2: market in particular, and especially in some areas of the
7:50
Speaker 2: country where more building has occurred. According to CPI, the
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Speaker 2: shelter costs in the United States we're up another four
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Speaker 2: point six percent over the last course of the last year.
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Speaker 2: And I'm just interested to see if we will see
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Speaker 2: that dip at all, because that does account for I
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Speaker 2: think about a third of the total component of CPI.
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Speaker 2: I don't think it'll be a I don't think you
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Speaker 2: can use it to say it'll drive things one direction
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Speaker 2: or another. But I'm just curious to see does this
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Speaker 2: bear out in any way over the course.
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Speaker 3: Of This is why it's good to look at different
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Speaker 3: measures of inflation, particularly those that filter out the inevitable
8:22
Speaker 3: big swings and relative prices. Whether it's food or energy,
8:26
Speaker 3: or insurance premiums or cell phone bills, all of those
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Speaker 3: four categories I just cited have at one time or
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Speaker 3: another been responsible for big swings in inflation, positive or negative,
8:38
Speaker 3: so things like the media in which we talk about
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Speaker 3: a lot and other outlier trimming methods. Trimmed mean is another,
8:47
Speaker 3: and there are measures that exclude some things categorically core
8:51
Speaker 3: and supercore and super duper core. The last one I
8:54
Speaker 3: don't think really exists, but there are lots of them
8:56
Speaker 3: out there, so you do have to look at them all.
8:58
Speaker 3: And thankfully there are a lot of great research who
9:00
Speaker 3: routinely post updates almost immediately after we get official inflation
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Speaker 3: reads like we will get tomorrow morning, on these on
9:08
Speaker 3: these more holistic if you like, measures of inflation which
9:12
Speaker 3: may better reflect the underlying trend in inflation, which is
9:16
Speaker 3: something that FED can control through its control of the
9:18
Speaker 3: money supply.
9:19
Speaker 2: Let's take a quick break when we come back and
9:21
Speaker 2: have some trivia for you. Next on the Financial Exchange,
9:23
Speaker 2: and then we're talking Maha. What is it? And what
9:27
Speaker 2: might it do to McDonald's. That's next on the Financial Exchange.
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Speaker 4: Time now for some trivia here on the Financial Exchange.
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10:40
Speaker 2: Bloomberg has a piece today why fast food could be
10:43
Speaker 2: MAHA's next targets. So, first of all, we have to
10:46
Speaker 2: explain what Maha was, because I kind of forgot. It's
10:49
Speaker 2: the following behind RFK Junior that he's kind of sparked
10:52
Speaker 2: in terms of make America healthy again. And I have
10:57
Speaker 2: to say, I just am not even remotely concerned about
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Speaker 2: this affecting fast food companies. I don't know why you
11:03
Speaker 2: would be. But here's the idea, I don't. That's my
11:08
Speaker 2: exact subject to.
11:09
Speaker 3: The same regulations as everybody.
11:11
Speaker 2: My exact point is, what exactly are you going to
11:14
Speaker 2: do to change America's behavior in a way that makes
11:20
Speaker 2: them eat less fast food? Like, I don't think the
11:23
Speaker 2: Trump administration is going to embark on a public education
11:27
Speaker 2: campaign about the harms of fast food.
11:29
Speaker 3: Mike, We're going to need the calories to fight off
11:31
Speaker 3: the measles and the rubella. We're all going to contract
11:33
Speaker 3: when this guy's actually run at HHS. So I just
11:37
Speaker 3: stuck up.
11:38
Speaker 2: I'm surprised by anyone who is actually concerned about this. Obviously,
11:42
Speaker 2: Donald Trump himself has spoken at length about how big
11:45
Speaker 2: a fan he is of companies of the food from McDonald's.
11:50
Speaker 2: And do you think about the other areas of this,
11:53
Speaker 2: Like might there be a push from RFK to focus
11:56
Speaker 2: on health and maybe like improving school lunches. I could
12:00
Speaker 2: see that, But at the same time, you're arguing for
12:03
Speaker 2: bigger government then, and so I just don't see where
12:06
Speaker 2: this is going to be a play in the incoming
12:08
Speaker 2: Trump administration. And I certainly wouldn't be concerned about it
12:12
Speaker 2: from an investor perspective when it comes to fast food companies.
12:14
Speaker 2: I don't know if you have any different conclusions.
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Speaker 3: I just think you cannot just regulate companies called McDonald's
12:22
Speaker 3: or Burger King or.
12:28
Speaker 2: Phone's ringing.
12:29
Speaker 3: Yeah, I was wondering if I should help them get
12:31
Speaker 3: it on the line. Yeah.
12:33
Speaker 2: Really frustrated with this right now. Yeah, I just don't know.
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Speaker 3: What do you do? What do you outlaw make? What nuggets?
12:40
Speaker 3: Chicken nuggets?
12:41
Speaker 2: And if you actually wanted to really continue to cut
12:43
Speaker 2: down this in the best way possible, the best method
12:45
Speaker 2: that I can think of is continuing with all of
12:48
Speaker 2: these weight loss drugs that have been actually changing people's
12:51
Speaker 2: diet preferences, with some fact based evidence that it's actually
12:53
Speaker 2: been working over the course of the last few years.
12:55
Speaker 3: Evidence such an elitist, such a Massachusetts uist.
13:00
Speaker 2: C net reports six tax mistakes that could get you
13:03
Speaker 2: audited by the IRS. Let's be clear first, when they
13:06
Speaker 2: had a staff, Let's be clear first and foremost, in
13:09
Speaker 2: twenty twenty four, of the roughly one hundred and sixty
13:12
Speaker 2: five million tax returns that the IRS received, Sorry, this
13:16
Speaker 2: was actually twenty twenty two, one hundred and sixty five
13:18
Speaker 2: million tax returns received by the IRS. Six hundred and
13:22
Speaker 2: twenty four one thousand of those were audited. That's less
13:24
Speaker 2: than zero point four percent. So to be clear, your
13:27
Speaker 2: chances of be an auditor are pretty low to begin with.
13:30
Speaker 2: But don't make stupid mistakes and you won't catch the
13:32
Speaker 2: eyes of the IRS, I think.
13:33
Speaker 3: Is the point of this.
13:35
Speaker 2: Don't add incorrectly, Okay. To that end, probably don't file
13:41
Speaker 2: a tax return by hand. And yes, they do check
13:44
Speaker 2: your math if you return. If you file a return
13:48
Speaker 2: that's incomplete, meaning you forgot to add a W two
13:52
Speaker 2: to it, or maybe a ten ninety nine if you're
13:55
Speaker 2: not familiar. When you go to file your tax return,
13:58
Speaker 2: the IRS pretty much knows how much taxes you owe
14:01
Speaker 2: unless you unless you own your own business where they
14:04
Speaker 2: don't see some of the transactions. Let's just assume for
14:06
Speaker 2: a moment that you are a W two employee of
14:09
Speaker 2: a company or retired individual with income sources coming from
14:14
Speaker 2: Social Security or an employer and investment accounts such as
14:18
Speaker 2: iras and brokerage accounts. In that case, the IRS knows
14:24
Speaker 2: every source of income and taxable possibilities that you have,
14:29
Speaker 2: and so if you file a tax return and it's
14:31
Speaker 2: missing some of those items, then yes, you are likely
14:33
Speaker 2: to get flagged in their system. And it's not even
14:35
Speaker 2: usually an audit. It's just, hey, you missed this tax return.
14:37
Speaker 2: Do you miss this tax item on your return and
14:39
Speaker 2: you owe an extra three thousand dollars, Not like the
14:41
Speaker 2: old days.
14:42
Speaker 3: When they didn't share ten ninety nines with the IRL.
14:44
Speaker 2: Correct, Yeah they do. I don't know when that started precisely,
14:48
Speaker 2: but yeah, yeah, for quite some time now, they report
14:53
Speaker 2: all of that stuff directly to the IRS, and so
14:55
Speaker 2: they know, you know, and if you screw up, then
14:58
Speaker 2: everybody knows. Likewise, it used to be that capital gains
15:03
Speaker 2: didn't get reported to the IRS basically all Let's say
15:07
Speaker 2: you made an investment in a stock prior to what
15:11
Speaker 2: was it twenty ten where they started tracking reporting.
15:13
Speaker 3: On this, It sounds about right on.
15:16
Speaker 2: I think it was twenty ten. Cost basis reporting, it
15:18
Speaker 2: was basically just hey, you self report whatever you say
15:22
Speaker 2: to the IRS. We're not going to tell them anything.
15:24
Speaker 2: Beginning in twenty ten and then twenty eleven, I think
15:26
Speaker 2: for mutual funds, every custodian out there, whether it's Schwab, Fidelity,
15:30
Speaker 2: Robinhood and the likes were required to tell you as
15:34
Speaker 2: well as the IRS what you paid for securities along
15:36
Speaker 2: the way. So my main message here is everyone's terrified
15:40
Speaker 2: of the IRS for some reason. And the fact of
15:43
Speaker 2: the matter is they audit very few tax returns, and
15:47
Speaker 2: if you're not cheating the system, you have absolutely nothing
15:50
Speaker 2: to be worried about. Like I get these frantic calls
15:52
Speaker 2: from people like, oh god, I missed this check or
15:57
Speaker 2: this letter from the IRS. I'm going to jail, and
15:59
Speaker 2: it's like, no, you're not. You missed a letter from
16:03
Speaker 2: the IRS. One you didn't even miss the do date.
16:05
Speaker 2: But even if you did, the worst case scenario you're
16:07
Speaker 2: going to have is a day's worth of interest penalties.
16:10
Speaker 3: Unmust there's something they're not telling you.
16:11
Speaker 2: Yeah, I mean maybe they are.
16:14
Speaker 3: They used to say home office is a red flag.
16:17
Speaker 2: Yeah, home office was a red flag at one point.
16:20
Speaker 2: You know, very sizable charitable contributions in a single year
16:24
Speaker 2: can be a bit of a red flag because again,
16:27
Speaker 2: those would be areas that they don't get reporting on, right.
16:29
Speaker 2: They have no idea if you donated a bunch of
16:31
Speaker 2: cash to a charity, for example, if you're self employed
16:36
Speaker 2: and you have a lot of deductions, again self employment,
16:39
Speaker 2: they don't have any read on this from the IRS.
16:41
Speaker 2: They don't know what your deductions are. They don't know
16:43
Speaker 2: what you're spending money on, what you're spending on money
16:45
Speaker 2: personally versus tax deductible. So if you have a lot
16:49
Speaker 2: of deductions on your business, yeah, that's going to increase
16:51
Speaker 2: your risk of being audited. Again, I'm not a CPA,
16:54
Speaker 2: so talk to a CPA about this stuff. But according
16:58
Speaker 2: to the article, yeah, claiming too many business expenses or
17:01
Speaker 2: significant losses on a business year after year, that's that's
17:04
Speaker 2: going to be a red flag eventually for them to
17:06
Speaker 2: take a look at. But you know, funny enough, because
17:10
Speaker 2: of the tax rules these days, it can actually make
17:13
Speaker 2: a lot of sense to lump all your charitable deductions
17:16
Speaker 2: into one year. And so while that can increase your
17:19
Speaker 2: risk of audit, it's also a pretty sensible thing to
17:22
Speaker 2: do from a tax planning perspective because of the standard
17:25
Speaker 2: deduction now and how that all had all that all
17:28
Speaker 2: kind of works for you and also sometimes against you.
17:31
Speaker 2: So again it was a great tip. My main message,
17:34
Speaker 2: don't be afraid of the IRS unless you are genuinely
17:37
Speaker 2: defrauding the American government, which you know, don't do that.
17:43
Speaker 2: Then you don't really have anything to fear.
17:45
Speaker 3: Our pardons are coming fast and furious. I think you
17:47
Speaker 3: just need to write a letter and buy some Trump
17:50
Speaker 3: mean coin, mean coin.
17:51
Speaker 1: Hot.
17:54
Speaker 2: I don't want to talk about this story. I want
17:55
Speaker 2: to talk about this story instead. China is unveiling so
18:00
Speaker 2: for trains. These are for aging tourists and the goal
18:03
Speaker 2: is to keep the economy on track. They're gonna be
18:06
Speaker 2: outfitted with all sorts of healthcare on the train, allowing
18:10
Speaker 2: easy travel.
18:11
Speaker 3: When the Communist Party tells you, hey, get on this train,
18:13
Speaker 3: it'll be fun. Where's it going, it's a surprise.
18:16
Speaker 2: I would be very suspicious about hopping aboard a state
18:20
Speaker 2: sponsored old person train.
18:22
Speaker 3: Yeah, in a country with big demographic problems that, like,
18:26
Speaker 3: does that not sound concerning to everybody else that's listening
18:29
Speaker 3: right now?
18:30
Speaker 2: Like that's immediately where my mind went. And God, shame
18:34
Speaker 2: on me for being so negative and assuming the absolute
18:38
Speaker 2: worst out of this country. But why shouldn't I tell
18:42
Speaker 2: me why I shouldn't be extraordinarily pessimistic about the Chinese
18:46
Speaker 2: government sponsoring old person trains to quote take you on
18:51
Speaker 2: the vacation of a lifetime across the country.
18:54
Speaker 3: And right into the Pacific.
18:59
Speaker 2: Yeah, it just it just is not a problem solved.
19:03
Speaker 3: As we talked about earlier, totalitarian governments can pretty much
19:07
Speaker 3: wave a wand and affect whatever solution they love they can.
19:11
Speaker 2: So I mean, again, I'm being a bit dramatic here,
19:14
Speaker 2: but wow, this really just played into all of my negative.
19:19
Speaker 3: As you get older, it harder to keep your balance.
19:22
Speaker 3: These people are partying on moving trains.
19:27
Speaker 2: Cruise ships. Train trains move a lot.
19:29
Speaker 3: Trains are a little tougher.
19:30
Speaker 2: To trivia winners next, and then baby boomers in the
19:34
Speaker 2: United States and their housing trends are next.
19:41
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19:46
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19:52
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20:06
Speaker 4: All right. Our trivia question today was who was the
20:09
Speaker 4: first female US Attorney General? That answer would be Janet
20:13
Speaker 4: Reno and our winner today is Stephen from Hope, Rhode Island.
20:19
Speaker 4: Stephen has won a Financial Exchange Show t shirt. We
20:21
Speaker 4: play trivia every day here on the Financial Exchange. See
20:24
Speaker 4: complete contest rules at Financial Exchange Show dot com.
20:29
Speaker 2: Aging Boomers about to rekindle the senior housing markets. So
20:32
Speaker 2: what we've seen going on here in senior housing, assisted
20:35
Speaker 2: living facilities, independent living facilities, nursing homes is some pretty
20:40
Speaker 2: severe financial strain. Now, the nursing home piece is explainable
20:44
Speaker 2: because a large portion of the folks in nursing homes
20:47
Speaker 2: end up on Medicaid, which has a much lower reimbursement
20:52
Speaker 2: pay rate on nursing homes than say a private pay
20:55
Speaker 2: nursing home, and so that to me makes a fair
20:58
Speaker 2: bit of sense. But it's been fascinating to me that
21:00
Speaker 2: these independent and assisted living facilities, especially during COVID, had
21:05
Speaker 2: a real serious financial issue where one boomers just did
21:10
Speaker 2: not want to move into these types of facilities. Generally,
21:14
Speaker 2: combine that with COVID and the reporting of you know,
21:18
Speaker 2: a lot of deaths in some of these facilities, and
21:20
Speaker 2: you had a lot of people moving out or just
21:23
Speaker 2: a lack of demand for them. Wall Street Journal pointing
21:26
Speaker 2: out here, look with the trend in population that we
21:29
Speaker 2: are about to see here, which you know, you can
21:32
Speaker 2: take a look at the chart yourself, but the portion
21:34
Speaker 2: of Americans who are going to be over the age
21:37
Speaker 2: of eighty and just the raw numbers of Americans who
21:39
Speaker 2: are soon to be over the age of eighty. It's
21:42
Speaker 2: going to be a kind of exponential growth rate in
21:45
Speaker 2: terms of what we are about to see. And the
21:47
Speaker 2: question is are we actually built up enough if these
21:52
Speaker 2: people start moving into these types of places, And the
21:56
Speaker 2: answer seems to be no. But I also see no
21:59
Speaker 2: evidence that that's actual what's going to happen? You know,
22:02
Speaker 2: I keep seeing trends where instead baby boomers are saying
22:07
Speaker 2: I don't want to move into one of these places
22:09
Speaker 2: like my parents did, and I am instead going to
22:11
Speaker 2: go and they find some help in other ways. And
22:15
Speaker 2: that's that's kind of defined the housing trend as we've
22:17
Speaker 2: seen it last Yeah, it has been this growing trend.
22:21
Speaker 2: Now the question is can that exist forever? Right? Like
22:25
Speaker 2: many generations before, you know, a lot was written, for instance,
22:29
Speaker 2: about how millennials just weren't going to buy houses anymore,
22:32
Speaker 2: and I counted with, well, no, they might just buy
22:35
Speaker 2: houses later, and we saw that they instead, you know,
22:38
Speaker 2: by there by the time they turned like thirty five,
22:40
Speaker 2: the home ownership rate was about where it was for
22:43
Speaker 2: Baby boomers. It just got there later.
22:46
Speaker 3: At some point you need full time help.
22:48
Speaker 2: But in many cases.
22:50
Speaker 3: You're That was a very insightful point you made about
22:52
Speaker 3: boomers who are now on the cusp of eighty the
22:55
Speaker 3: oldest part of that cohort. They saw their parents, They
23:01
Speaker 3: saw the lifestyle that they were subjected to, for lack
23:04
Speaker 3: of a better yea in assisted living facilities, and it's
23:08
Speaker 3: not always the most dignified, just by necessity, not because
23:11
Speaker 3: they don't try to do great work there. They saw
23:14
Speaker 3: what that experience is like, and they don't want to
23:16
Speaker 3: subject themselves to it until they absolutely have to. Would
23:18
Speaker 3: be I haven't spoken anybody about this, but I did
23:22
Speaker 3: witness it, like a lot of people did, sure, and
23:23
Speaker 3: I could see why you would want an age in
23:25
Speaker 3: place for as long as possible, but at some point
23:28
Speaker 3: you can't.
23:28
Speaker 2: Yeah. The challenging thing about all that, too, is for
23:31
Speaker 2: a lot of these places, in fact, the majority of
23:33
Speaker 2: these places, they don't how do I put this nicely,
23:37
Speaker 2: They don't want really unhealthy people.
23:39
Speaker 3: No, that's fair.
23:41
Speaker 2: Because if you're going to be really unhealthy, they want
23:44
Speaker 2: to put you into a nursing home instead. And so
23:47
Speaker 2: what I wasn't really previously aware of but makes all
23:50
Speaker 2: the sense in the world. I'll use my grandfather as
23:53
Speaker 2: an example, he lives in an independent independent living facility
23:57
Speaker 2: apartment within one of these communities, and it's got all
23:59
Speaker 2: stage of care right up through nursing care. And what
24:02
Speaker 2: he told me is, you actually cannot move into this
24:07
Speaker 2: independent living facility without being able to pass both a
24:11
Speaker 2: pretty thorough cognitive and physical test. And I just kind
24:16
Speaker 2: of hadn't thought about that. But his point was like,
24:18
Speaker 2: they're not going to take somebody into this facility, which
24:21
Speaker 2: guarantees your care for life by the way, you know,
24:24
Speaker 2: they take a buy in and then they say, even
24:25
Speaker 2: if you run out of money, we're not going to
24:27
Speaker 2: boot you out of this place. You know, eventually you
24:29
Speaker 2: might qualify for Medicaid, but no matter what, you'll have
24:31
Speaker 2: a place in this facility. They're not interested in somebody
24:34
Speaker 2: who's eighty two years old and already cognitively declining. In
24:37
Speaker 2: that case, they're going to tell you to go straight
24:39
Speaker 2: to a nursing home. And that's a piece that I
24:41
Speaker 2: see people misjudging frequently when it comes to their long
24:44
Speaker 2: term plans, is oh, well, if it all goes to hell,
24:47
Speaker 2: you know, I've looked at this place, Well, will this
24:50
Speaker 2: place actually have you by the time you are ready
24:53
Speaker 2: to go into it, I think is one of the
24:54
Speaker 2: other concerns that I see. So yeah, neither. I don't
25:00
Speaker 2: you know which direction this goes in. But if it
25:03
Speaker 2: does result in a lot of people suddenly moving towards
25:06
Speaker 2: that type of facility down the road, which I would
25:08
Speaker 2: be surprised by. But if it does, we are severely
25:11
Speaker 2: underbuilt for that type of place and severely undersupplied with
25:15
Speaker 2: the care givers that would be needed to supply that
25:18
Speaker 2: sort of thing as well.
25:20
Speaker 3: Good a labor force to service that is an issue,
25:24
Speaker 3: particularly crack down on lower skilled labor.
25:26
Speaker 2: Yep, yep. Folks. Want to talk to you about the
25:30
Speaker 2: brand new guide from the Armstrong Advisory Group which actually
25:33
Speaker 2: ties into this a little bit. It's a guide all
25:35
Speaker 2: about Medicare and if you're not thoroughly familiar with the program. Obviously,
25:41
Speaker 2: if you've already over the age of sixty five and
25:43
Speaker 2: have been on the program for a few years, you've
25:45
Speaker 2: got a much better understanding of it. But put yourself
25:48
Speaker 2: back in the shoes of yourself at age sixty two,
25:50
Speaker 2: for example, and just the number of questions you had
25:52
Speaker 2: about what's part A, how does it work, how is
25:55
Speaker 2: it going to work with a metagap plan or some
25:58
Speaker 2: other type of health insurance. What if I'm retiring before
26:01
Speaker 2: age sixty five, what exactly does Medicare cover and what
26:04
Speaker 2: doesn't it cover. I think there's a general appreciation and
26:09
Speaker 2: knowledge that, hey, most people on Medicare really find it
26:11
Speaker 2: to be a great insurance program. But how it's going
26:14
Speaker 2: to work with your spouse's insurance if they're still in
26:17
Speaker 2: the labor market, how your income is going to affect
26:19
Speaker 2: your premium payments. All of these things are again a
26:25
Speaker 2: big learning curve for folks that are heading towards that
26:27
Speaker 2: Medicare age. If you are in that cohort, is still
26:31
Speaker 2: learning about Medicare, your options that are available to you,
26:34
Speaker 2: and how it's all going to work with your specific lifestyle.
26:37
Speaker 2: Give the folks at Armstrong Advisor Group a call. We've
26:39
Speaker 2: got a brand new guide out this month all about Medicare.
26:42
Speaker 2: It can be your complete guide on how to look
26:45
Speaker 2: through all this stuff prior to engaging with somebody who
26:48
Speaker 2: actually sells insurance plans. The phone number for the Armstrong
26:52
Speaker 2: Advisory Group to request your brand new copy of our
26:54
Speaker 2: brand new guide on Medicare is eight hundred three nine
26:58
Speaker 2: to three four zero zero one. Again, it's the Armstrong
27:01
Speaker 2: Advisory Groups February Guide all about Medicare. You can get
27:05
Speaker 2: your copy by calling us at eight hundred three nine
27:08
Speaker 2: three four zero zero one.
27:11
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:13
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:16
Speaker 1: Armstrong Guide a specific financial, legal, or tax advice. Consult
27:19
Speaker 1: your own financial tax into state planning advisors before making
27:22
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
27:25
Speaker 1: advisory services.
27:28
Speaker 2: Dear God, I don't think I had realized how bad
27:30
Speaker 2: the egg problem had gotten in the United States. The
27:33
Speaker 2: On Friday, the average wholesale price for large white shell
27:37
Speaker 2: eggs reached eight dollars a dozen. That is the wholesale price,
27:42
Speaker 2: that is not the retail price that all of us
27:44
Speaker 2: are facing at grocery stores. I'm a little bit confused
27:47
Speaker 2: by this because I'm on Amazon's website right now, and
27:49
Speaker 2: I can get Amazon Fresh cage free large white eggs
27:53
Speaker 2: a dozen of them for five dollars and forty nine
27:55
Speaker 2: cents delivered to me between four and six pm today,
27:58
Speaker 2: So I'm not sure how this is actually affecting market prices,
28:01
Speaker 2: but just for some general sense of how high that
28:06
Speaker 2: wholesale price level is. The last time we got anywhere
28:10
Speaker 2: near this level was back in December twenty twenty two,
28:14
Speaker 2: heading into Christmas time. Then I think I remember everyone
28:17
Speaker 2: talking about egg prices and the shortages. Then the wholesale
28:20
Speaker 2: price back in December of twenty two only reached five
28:22
Speaker 2: dollars and forty six cents per dozen. So when you
28:26
Speaker 2: go to Trader Joe's and you see the limit of
28:29
Speaker 2: one dozen per customer, or Costco or any of these places,
28:32
Speaker 2: this is what we're seeing. And I mean a price
28:35
Speaker 2: level here that is a full three dollars a dozen
28:39
Speaker 2: higher than the previous all time highs is concerning it is.
28:42
Speaker 3: It will feed into inflation in the short term.
28:45
Speaker 2: It's yeah, it's not concerning from a gross economic standpoint.
28:48
Speaker 2: I don't think.
28:49
Speaker 3: I don't think so. Unless it shocking it makes its
28:51
Speaker 3: way into inflation. Yeah, well, that can make its way
28:53
Speaker 3: into inflation expectations. Yeah, that was part of the reason
28:55
Speaker 3: why expectations where it was, according to the Mission surveys
28:58
Speaker 3: we reported lately last week, because it is shocking. So
29:02
Speaker 3: the FED obviously can't induce more egg production, but the
29:06
Speaker 3: FED does have to think about expectations.
29:08
Speaker 2: And I'll just say this one thing because I remember
29:11
Speaker 2: back in December twenty twenty two, everybody blaming Joe Biden
29:15
Speaker 2: for egg prices. The president doesn't control egg prices, sure
29:19
Speaker 2: that they're Donald Donald Trump can't control egg prices. He
29:22
Speaker 2: can't bring him down. Joe Biden couldn't at the time.
29:25
Speaker 2: It's outside economic forces. And anybody claiming that, hey, let's
29:29
Speaker 2: solve this with price fixing and grocery stores doesn't know
29:33
Speaker 2: what they are talking about.
29:34
Speaker 3: It looks at least politicians aren't because that was silly.
29:38
Speaker 3: Allegations of price gouging and imposing price sealing statutorily, that
29:42
Speaker 3: was all silly. At least we're not hearing that this time.
29:45
Speaker 3: At the same time, though the president owns what's happening
29:47
Speaker 3: on his or a watch, and they do have to
29:50
Speaker 3: be at some point perceived to be doing something. It's
29:52
Speaker 3: probably only a matter of time before if it persists,
29:57
Speaker 3: policymakers do speak.
29:59
Speaker 2: Up egg alternatives, we're all going to have beyond eggs.
30:06
Speaker 2: I have never had beyond eggs before. I don't even
30:09
Speaker 2: know if that they're a real product, but I'm guessing
30:12
Speaker 2: they do not taste very good. Let's take a quick
30:14
Speaker 2: break when we come back, bit a stack roulette Here
30:17
Speaker 2: on the Financial Exchange.
30:18
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30:21
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31:15
Speaker 2: Time for a bit of stacker Lett. What do you
31:17
Speaker 2: have for us? Mark? You're grinning over at me. So
31:19
Speaker 2: I'm assuming you got something.
31:20
Speaker 3: I finally, I don't want to say prepared, because it's
31:23
Speaker 3: not like I don't. But I've got a story that
31:25
Speaker 3: ties into something we did earlier. Good short, I should
31:30
Speaker 3: probably just get to it.
31:31
Speaker 2: Yeah, Okay, Now let's tease it for another minute and
31:33
Speaker 2: a half or two and just really really drag this
31:35
Speaker 2: out if we can.
31:38
Speaker 3: We talked earlier about knock on effects of tariffs. There
31:41
Speaker 3: is our first order effects steal and aluminum get more expensive.
31:45
Speaker 3: There are second order effects, as people that use steal
31:49
Speaker 3: and aluminum to make stuff like automakers face constrained supply.
31:54
Speaker 3: I have to raise prices, so Ford executive. Bloomberg reports
31:57
Speaker 3: Jim Farley travels to Washington tomorrow to and I'm just
32:01
Speaker 3: reading here verbatim warn members of Congress that twenty five
32:04
Speaker 3: percent tariffs, those of the magnitude that the administration is proposing,
32:09
Speaker 3: would blow a hole in the auto industry, which was
32:12
Speaker 3: I think surprisingly at least to my.
32:15
Speaker 2: Sight of what it's worth.
32:16
Speaker 3: Yeah. Direct, Yeah, and maybe a little bit alarmist. You
32:24
Speaker 3: don't think I'm not suggesting alarmist is the wrong word.
32:27
Speaker 3: Maybe just direct?
32:28
Speaker 2: Yeah, No, I guess alarmists can be legitimate if it's
32:32
Speaker 2: if it's genuinely alarming, right, And it's not that we
32:36
Speaker 2: can't make cars exclusively here in the United States. It's
32:41
Speaker 2: that the rule of law in the United States for
32:43
Speaker 2: the last many how many years have we been manufacturing
32:47
Speaker 2: cars in North America, like one hundred, has been that
32:51
Speaker 2: you can manufacture different parts in North America, and our
32:54
Speaker 2: closest allies, Canada and Mexico play a key role in that.
32:57
Speaker 2: And so again, could we shift all of that manufacturing
33:01
Speaker 2: to the United States and have a completely self contained system.
33:05
Speaker 2: Not entirely, because we would still need parts from all
33:07
Speaker 2: across the world to make these things, but yes, we could.
33:11
Speaker 2: The problem is you would have to rebuild factories all
33:14
Speaker 2: across the United States and find a whole bunch of
33:17
Speaker 2: labor that doesn't currently it currently exists solely in the
33:20
Speaker 2: United States to do it. So would it blow a
33:21
Speaker 2: hole in Ford and Tesla and Stilantis and GM's businesses. Yeah,
33:27
Speaker 2: I don't think that's an overstatement. We talked about how
33:29
Speaker 2: significant the price increases would be if this went into play.
33:31
Speaker 3: In the same story, it reports, Bloomberg reports that Brookings,
33:35
Speaker 3: which is a think tank estimates nearly two hundred thousand
33:38
Speaker 3: job losses from folks like Ford who you steal an
33:43
Speaker 3: aluminum as inputs as a result of these tariffs US
33:47
Speaker 3: ex Sports. Bloomberg goes on to say a motor vehicles
33:49
Speaker 3: would fall by twenty five percent of Canada and twenty
33:52
Speaker 3: three percent of Mexico if the tariffs were imposed. So
33:55
Speaker 3: it's these second and later stage knock on effects that
33:59
Speaker 3: often not and are easy to well, They're not easy
34:02
Speaker 3: to overlook in this case because because of the clarion
34:06
Speaker 3: clear warning from Jim Farley, CEO Ford.
34:10
Speaker 2: Going back to Sunday's game, the I think most surprising
34:17
Speaker 2: advertising themed thing that we can talk about today was
34:19
Speaker 2: the fact that Jeep was the only advertiser, only automaker
34:24
Speaker 2: advertiser during the entire Super Bowl? Anybody else find like,
34:28
Speaker 2: I didn't really think about that until I read this piece,
34:31
Speaker 2: But yeah, the Harrison Ford ad with Jeep was the
34:35
Speaker 2: only actual automaker advertisement during the Super Bowl, And I
34:41
Speaker 2: wonder when the last time you had neither Ford nor
34:44
Speaker 2: General Motors advertising anything during that, you know, king of
34:50
Speaker 2: all advertising opportunities. I find that really really interesting. I
34:54
Speaker 2: know that these companies have been struggling Ford in particular
34:57
Speaker 2: with this transition to and then away from electric vehicles,
35:00
Speaker 2: and GM maybe less so, but still has their own problems.
35:04
Speaker 2: But I cannot remember watching a Super Bowl without so
35:08
Speaker 2: many car advertisements plastered all over the place. I found
35:12
Speaker 2: it very, very surprising, And I also think that it
35:15
Speaker 2: comes at a time when they could actually spend dollars
35:18
Speaker 2: on smart advertising right now, Like what GM and Dodge
35:22
Speaker 2: and these other companies are talking about doing on the
35:26
Speaker 2: hybrid side is really cool technology that's not really widely
35:31
Speaker 2: accepted anywhere. I keep getting, you know, stuck on these
35:35
Speaker 2: electric vehicles with the with the gas generator, but even
35:39
Speaker 2: just these straight hybrid vehicles coming out of the likes
35:41
Speaker 2: of Toyota that can get you like eight hundred miles
35:44
Speaker 2: per fill up. That's fascinating stuff that I'm just surprised
35:47
Speaker 2: they're not advertising. And I don't really understand why Stillantis
35:51
Speaker 2: was the only one to go out there. I mean Stillantis.
35:55
Speaker 2: I think they felt that they had to recommit to
35:57
Speaker 2: the American market, and maybe they felt that their Jeep
35:59
Speaker 2: brand had been cheapened a little bit by the kind
36:02
Speaker 2: of successive failures over at the Lantis of the class
36:04
Speaker 2: of the last few years. So maybe they were forced
36:06
Speaker 2: into a corner here. But I don't know any takeaways
36:09
Speaker 2: on Ford and GM's absence.
36:10
Speaker 3: My story was better than yours, and that never happens, Mike,
36:13
Speaker 3: I don't think it's ever happened in three years.
36:14
Speaker 2: The only thing he's focused.
36:15
Speaker 3: No, I'm just sort of I'm very pleased with my
36:18
Speaker 3: with my calling of the Okay, so let's dig into this.
36:20
Speaker 3: Did they make a conscious decision not to advertise? I
36:23
Speaker 3: think so obviously?
36:24
Speaker 2: Yeah, I mean obviously if you've advertised in like every
36:26
Speaker 2: super Bowl in history and then suddenly decide not to,
36:30
Speaker 2: that seems pretty compelling. I mean, I bet there are
36:31
Speaker 2: a few years around the Great Financial Crisis where they
36:34
Speaker 2: didn't advertise.
36:35
Speaker 3: Stupid question on my part, I apologize. I mean, do
36:37
Speaker 3: they they have the similar rationales for not advertising? Has anyone?
36:42
Speaker 3: Has anyone done any actual journalism on this? Do we
36:45
Speaker 3: know why? Both? I do not know.
36:47
Speaker 2: I don't think they've put out any public statements about
36:49
Speaker 2: why they didn't advertise. I don't know, uh what led
36:53
Speaker 2: them to make the decision, but clearly deciding that the
36:58
Speaker 2: whatever it costs, what did it cost this year? Been
37:00
Speaker 2: for a thirty seconds, seven eight and a half million
37:02
Speaker 2: something like that.
37:03
Speaker 4: I think it was seven point eight million.
37:04
Speaker 2: Actually, okay, well yeah it's pretty big. All right, I'm
37:07
Speaker 2: gonna go back.
37:07
Speaker 3: You would agree that my story was No, I would not.
37:11
Speaker 4: No, I absolutely would not.
37:13
Speaker 2: He can't disagree just because he employed, because Mike employees.
37:16
Speaker 3: Come on, doesn't employee?
37:17
Speaker 2: That's true. I wait, I've made it. I've made a
37:23
Speaker 2: habit of teasing towns and cities that vote down multi
37:27
Speaker 2: family housing by saying, like, you know, you're telling me
37:30
Speaker 2: that you want affordable housing in one breath, but then
37:33
Speaker 2: not voting for it in the second. I'm gonna applaud
37:37
Speaker 2: Cambridge here. The city of Cambridge, Massachusetts, became the first
37:40
Speaker 2: city in Massachusetts to eliminate single family zoning. What that
37:45
Speaker 2: means is anywhere in the city you can build a
37:49
Speaker 2: multifamily if you want to. There is no area of
37:52
Speaker 2: Cambridge now that is reserved just for single family. Anywhere
37:55
Speaker 2: there can build multi family if they so choose to.
37:58
Speaker 2: Nobody's forcing them to do it. It is just about
38:00
Speaker 2: free markets, which I can kind of appreciate. That is
38:04
Speaker 2: all the time we have for today's financial exchange markets
38:07
Speaker 2: are basically flat. We'll have a full update tomorrow and
38:11
Speaker 2: a new read on CPI, so tune in. Have a
38:13
Speaker 2: great rest of your day, folks,