September 12, 2025 • 42 mins
In the News - Google’s Court Ruling, Stablecoin Regulation, and Presidential Power
In this episode of Something More, Chris Boyd joins Jeff Perry and Brian Regan to
unpack headline-making developments. First, they break down the recent antitrust
remedy imposed on Google and what it means for the internet search monopoly, AI
partnerships and exclusive contracts. Then, they dive into the new “Genius Act”
framework for stablecoins, exploring how backed digital dollars, smart contracts and
blockchain validators could transform cross-border payments and usher in real-world
revenue streams. The episode concludes with a fast-paced enthusiastic exchange of
various news items related to presidential power.
#GoogleAntitrust #StablecoinRegulation #FintechNews #BlockchainInsights
#DigitalAssets #IntheNews #FinancialPlanning #PresidentialPower
For more information or to reach TEAM AMR, click the following link:
https://www.wealthenhancement.com/s/advisor-teams/amr
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome.
Thanks for being with us for another episode
of Something More with Chris Boyd.
I'm here with Jeff Perry and Brian Regan.
We are all of the AMR team at
Wealth Enhancement and glad to have you joining
(00:43):
us.
We're talking about things that are in the
news.
Some really interesting things have been evolving.
Brian wanted to lead us off because of
a recent court decision as it related to
Google that could have some significant consequence in
terms of...
(01:04):
Now, Google had this court decision a while
back, but it was about this antitrust consequence
and what kind of requirements were going to
be placed upon them.
Is that essentially the gist?
Yeah, they were found to have maintained an
illegal monopoly in internet search, but the news
was the remedy that the court put on
(01:27):
them, which was viewed as the market is
pretty insignificant.
There were some serious outcomes that could have
come, including divesting Chrome and Android and YouTube,
none of which came to pass.
It was viewed as very good news.
They do have to share some search index
(01:47):
data.
They basically have to share their algorithm, which
has been their competitive advantage for 20 years
with likely qualified rivals.
They can't do exclusive contracts.
For example, they've had an exclusive contract with
Apple to be their default search provider on
(02:10):
the iPhone, which as you can imagine is
a big competitive advantage.
Apple was getting something to the tune of
$30 billion a year in order to be
that search provider.
Now, in search, that wasn't deemed to be
a bad deal, but for new products going
(02:32):
forward, as you can imagine, the Gen AI
products, you're not going to be able to
have those exclusive agreements.
You can have non-exclusive agreements, but you
can't have exclusive agreements.
So you saw Apple rally on the news,
right?
Because they're going to be able to still
partner with Google as long as they're quote
(02:53):
unquote non-exclusive.
I'm not quite sure how that would work.
But ultimately, even though their search platform was
hurt and they're not going to be able
to do the same types of things by
having exclusive contracts with Apple, for example, for
the next Gen AI products, their real distribution
(03:14):
network wasn't hurt too much, right?
From a strategic standpoint.
So if you use Google and you use
Google on Chrome, you use Google on Apple,
you use Google through your Android, you're probably
still going to be able to use Google
on your Android, on your iPhone and through
Chrome.
So all that was viewed as very, very
(03:35):
positive, both for Apple and Alphabet.
YouTube's going to remain, Chrome's going to remain,
Android's going to remain.
So this was very positive.
And this was definitely something that was keeping
Google's rating down.
I don't really like to talk about price
(03:56):
earnings ratios, but this could likely have a
re-rating closer to where the other mega
cap growth names are sitting rather than the
sub-market PE ratio that they've been enjoying.
Ryan, wasn't part of the perception as to
why the judge was maybe a little more
(04:16):
lenient than expected?
Because perhaps with the AI evolution that people
are using some of these tools in a
way that they might've at one time used
Google, but there's naturally evolving greater competition to
(04:38):
Google for the search engine.
Yeah, I agree with that.
I mean, I think this ruling might be
10 years too late.
They might've made a real difference a decade
ago, but today, like Chris mentioned, there's all
sorts of competition from these new entrants, whether
it be OpenAI or ChatGPT or Grok or
(05:00):
Facebook's product or Amazon's product.
There's tons of competition there now.
I think these exclusive right deals will be
interesting to see how, if anybody could end
up being the dominant AI, gen AI platform
going forward.
(05:21):
But what I suspect is if you use
an Android, if you use Chrome, you're probably
going to be a Gemini user.
That's what I'm expecting.
I think that's the assumption under this ruling.
And if you're used to using Google on
Apple, you might continue to continue to use
Google on Apple and probably more likely to
(05:44):
become a Gemini user over everything else.
So I think that's the general reaction today.
I think there's still question marks for the
future, but I think there's certainly less question
marks than there were before this ruling.
I'll be honest, when I first got the
headline alert pushed to my phone, I thought
Google would be down.
But then reading more and understanding more about
(06:04):
it, I think this is the appropriate response.
More like a relief rally, right, Brian?
The fears of what this judge could have
done as a remedy didn't happen, so the
market responded accordingly.
That's how I viewed it.
I just don't think anybody's building a new
search engine.
They have to share search engine details, but
(06:26):
that's old tech.
That's relevant five years ago, it's not necessarily
as relevant today.
The judge talked about that in his decision,
how some of these companies in the last
20 years didn't exist or the format, they
didn't exist, and it's very difficult for the
courts to handle a case like this.
(06:47):
And we have to remember, this is a
district court case, so it's certainly relevant to
the facts of this case, but it doesn't
hold any precedential value.
It's not a Supreme Court case, it's not
an appellate court case.
Although there's some dicta, there's some language in
there about how companies should behave, every situation
is different, so who knows what happens.
(07:08):
What's interesting is Google's probably still going to
appeal.
The Department of Justice is holding this up
as a victory and the market doesn't think
it's a victory for the Department of Justice.
And Google's going to appeal and that's going
to stretch out for another few years.
So they're going to be able to continue
to have search without sharing any data and
(07:28):
still continue to monetize search for years before
there's any kind of negative influence.
And then by then, it could be moved.
I think what's important is their ability to
distribute Gemini, which I think was giving some
(07:49):
landing gear here in this ruling, which is
probably the most important thing.
Very interesting.
And so for investors, I guess that's encouraging
for Google, encouraging for Apple, anyone who has
an index fund has plenty of both, alphabet.
Yeah.
(08:16):
I guess the question is, who's the little
guy that's being undermined in the process that
people are using their search engine that they'd
benefit from getting some of this data that
presumably Google might have to share in time?
Well, I think the big one would be
(08:37):
Microsoft, right?
They would have to share their algorithmic data
with Bing.
So if you own a mega cap growth
ETF and maybe Google's slightly negatively hurt and
Microsoft benefits, you're going to be fine in
the aggregate, right?
(08:58):
Does anyone, I've heard of this thing, I
don't know, it's like a duck or something.
What's that?
It's like a- Duck, duck, go.
Duck, duck, go.
Right.
I wonder if there's a lot of users
for that.
But I mean, I understand it essentially gets
rid of that tracking your data type perspective.
(09:19):
I mean, Google has an 89% market
share in search, 89%.
And they only recently fell under 90 for
the first time since like 2002 or something
like that.
So they've been very, very dominant in the
market for a long, long time.
So I probably shouldn't be using Ask Jeeves
anymore.
You can if you want to, Chris.
(09:42):
I do remember that one.
That was very, you know, it just goes
to show- Ultra Vista, wasn't that another
one?
Yeah.
The early creators are not always the dominant
force.
One more comment that I have on Google
is the judge, you know, certainly talked about,
and it's a relevant element of an antitrust
in a breakup situation is, has the consumer
(10:03):
been harmed?
Yeah.
And it's tough to make a case that
the worldwide American, however you want to frame
it, consumer has been harmed by Google's alleged
monopoly.
I mean- I mean, it's certainly not
something that comes at a cost in terms
of premium paid.
I guess it's a question of how that
data is used that should evaluate the cost
(10:26):
or the harm, which is kind of hard
to do.
So that's an interesting point, Chris.
On appeal, the argument that Google is going
to make is that sharing this data would
undermine the privacy of their users.
And so the remedy would actually hurt the
consumer, which I think is probably a pretty
(10:47):
strong case.
Yeah.
If the whole point of antitrust is to
protect the consumer, then, you know, this could
arguably, arguably hurt them.
So if you look at the consumer as
the ad, advertiser though, right?
Like the customers, I don't know if that
would be a stretch, I would say then
- No, I think you could, I think
(11:08):
the need to look at that, not just
beyond the retail consumer, right?
The customer of Google is a business.
Yeah.
So they compete over AdWords and they bid
on AdWords.
And if they could do it across multiple
different platforms on search, then you would think
that maybe they could get a lower price.
But I don't know.
If they were manipulating the market, right?
(11:30):
I mean, so the argument, counter argument is
there's alternatives, there's Facebook, there's all these social
media outlets.
You could make the argument that they're the
only ad exchange for search, right?
So if there was one stock exchange, for
example, the margins that they would get for
exchanging stocks between traders could be much wider
(11:50):
than it is if there's competition between exchanges.
I think you could make a similar argument
here or there.
But I think, I can't help but to
think about comparing this case to the Microsoft
case in, was it 95, 96?
Okay.
It might have finally been settled in 2001.
(12:12):
So correct me if I'm wrong, if you
guys remember this more clearly than I do,
but I believe the argument was that they
were preloading Internet Explorer into Windows, which was
the dominant software operating system provider.
Netscape was getting pushed out, or at least
they felt like they were being pushed out.
(12:33):
And why is this similar?
Well, these exclusive contracts that they can distribute,
their search product isn't too dissimilar to Internet
Explorer being preloaded into a dominant software operating
system provider.
I think that's right.
(12:54):
The case is very similar.
Yeah.
Now, if you think about what happened with
Microsoft between 2001 and today, they're all right.
And once again, no breakup.
The court did not, as we know, order
a breakup of Microsoft.
(13:15):
They encouraged or mandated behavioral changes, as that
court said.
And Windows is still dominant too, right?
Windows is still dominant.
No doubt.
And that's still the bulk of how they
make a lot of their money, excluding Azure,
I guess.
But the enterprise productivity services is still the
(13:37):
bulk of Windows.
It didn't stop their really monopolistic power, I
guess is what I'm saying.
And that case was before some of this
technology, in the early stages of where we
are in technology, but it is consistent.
And this court noted that, that the trend
is not to break up these companies, but
(13:57):
to attempt to have them have behavioral changes.
So, maybe the days of breaking up standard
oil don't exist anymore.
Or AT&T.
Or AT&T, the more contemporary.
Yeah.
All right.
Let's...
Oh, sorry.
You got one other thing to say there,
Brian?
(14:17):
Yeah.
Obviously, I have a lot to say on
this subject.
I think it's very interesting.
But we talked about all the new competition
in the market, and there's this big push
for private investments lately.
And while I was thinking about this topic,
I couldn't help but to think, people get
the sense or feel like they can't get
(14:38):
into these large language models providers because they're
private.
And I can't help but think, but that's
not really true.
Microsoft owns a significant portion of OpenAI.
It's under negotiation how much they're going to
own, because they're going to change their structure
from nonprofit to profit.
(15:00):
But if you own Microsoft, you own a
substantial amount of OpenAI.
If you own Amazon, you own a significant
portion of Anthropic.
So if you do want access to these
things, I guess this is...
I think this case illustrates how the rich
(15:23):
are going to continue to get richer.
And this kind of opens up some avenues
for these companies with large moats and large
pockets to actually continue to create large moats
and large pockets for the future.
So I think in general, these companies that
had a ton of power and were investing
(15:45):
into the future are going to be able
to continue to do that under this ruling,
or given more license to do that under
this ruling.
I agree with that.
All right.
In the theme of in the news, we
were also interested in talking a little bit
about some technological developments and some application of
(16:10):
that as it relates to evolving views relating
to profitability derived from things like cryptocurrency or
stablecoin.
So let's talk about the recent legislation that
provided some governance surrounding stablecoin, which is essentially
(16:31):
a form of cryptocurrency, but tied to a
dollar in, a dollar out, the idea that
it's stable in terms of not speculative, not
trying to make money from the growth of
the value of the currency as much as
providing continuity of the value of what you
(16:54):
put your money into a given stablecoin.
So essentially, Brian, let's start with what's the
legislative backdrop that's evolved here?
So I don't know all the details of
the Genius Act, and I'm not going to
pretend like I do, but one of the
(17:15):
important stipulations is exactly what you just said,
Chris, the regulation of stablecoin to make sure
that it's backed by real tangible assets.
So in this case- Or it was
just a promise, right?
It was like, I could buy your stablecoin
and you could promise me that it'll be
worth the same amount, but I didn't have
(17:37):
any real, as an entity, there was no
regulatory backdrop.
You have to have treasuries or some mechanism
to represent that value appropriately.
Yeah.
And some of them in the past weren't
backed by much of anything of real value.
So this is a significant change.
(17:58):
This is going to make transacting in stablecoins
much more reasonable to do.
So if you are one of these people
that believes that we're going to be able
to do cross-border transactions over stablecoin and
it'll be more efficient than doing a Western
Union or a wire or an ACH or
(18:20):
something like that, it'll be more efficient, it'll
be cheaper, it'll be faster.
If you're somebody that believes that, this is
great.
Stablecoins make this a much more trusted, much
more rational way to do it.
If you were to do it with Bitcoin,
for example, you don't know what the value
is going to be from one day to
another.
It could change pretty dramatically.
(18:41):
But with a stablecoin, you know you're going
to get dollar for dollar.
So this opens up all sorts of shadow
banking activity, all sorts of smart contract activity
that could be executed on the blockchain, where
if the belief is that it's more secure
and it's more efficient, that it could drive
a lot of new activity.
I want you to continue on.
(19:03):
I just want to put a caveat for
those listening who might be interested in our
views on how this stablecoin applies to our
clientele at this point in time.
And I would want to make the clarification
or be clear, this is not something we're
advocating for our clients.
It's not something we utilize in our portfolio
(19:25):
management.
It's not to say that someday there might
not be a place for it.
It's just right now, I think we could
easily argue we prefer a centralized finance, something
that the central bank has the ability to
step in and offer stabilizing characteristics directly with
(19:47):
the banks.
And so we would maybe be inclined to
make use of treasuries, money market funds, and
bank accounts.
But we're not using necessarily stablecoin as a
way to offer people an investment vehicle, which
(20:08):
is different from saying, hey, this has evolved
into something that has less risk than what
it once had.
Okay.
And you wanted to go on to talk
about this in the point of view that
how some of this could apply.
You were talking about smart contracts and things
of that sort.
(20:28):
Yeah.
I co-signed everything you said, but I
think it's interesting that this is evolving into
some more practical use and the Genius Act
is certainly helping that along.
And I think it's important as me personally,
I've been a crypto skeptic, but that doesn't
mean you put your head in the sand.
(20:49):
I mean, if something changes, something evolves, you
got to change your mind with the facts.
And I think that's maybe an important distinction
between what I'm saying now and what I've
said in the past.
So back to stablecoins, if you could transact
here, if the government's Genius Act is going
to make it more likely that you're going
to transact, the idea is that the market
of trading in stablecoins will get much bigger.
(21:12):
Stablecoins are at least the two biggest ones
from my understanding trade on the Ethereum network.
Now this was news to me.
I did not know that anything other than
Ethereum could trade on the Ethereum network.
And on the Ethereum network, there are validators.
Validators are people who get paid transaction fees.
They're often coined in the industry as gas
fees, but they're really a transaction fee to
(21:34):
validate whether the transaction on the network follows
along the terms of the smart contract.
And these fees can be anywhere between 3
% and 7%, depending on the changes.
So what we're seeing here from these validators
is real transactions and real cash flows coming
from something that was formerly viewed as just
(21:56):
a speculative asset.
Now we're actually having real transactions, practical value
and cash flows from real companies.
You can almost think of this as a
combination between MicroStrategy and Visa.
They hold the underlying asset, but they're also
executing the secure transaction for a fee.
And as we know with Visa, it can
(22:17):
be very, very lucrative to be in the
middle of those transactions.
So the point here is, as much as
we have been and would argue that cryptocurrency
generally is a speculative endeavor for our clientele
(22:39):
who tend to be retirees, largely not appropriate
as something they would want to participate in,
your point here is to say, hey, look
at this.
We've looked at cryptocurrency in the past and
said, no interest, not interested, thanks anyway, because
I can't point to anything that has a
valuation.
(23:00):
Now you're saying there are some examples of
companies that may be behind the stable coin
and the transaction going on between parties that
can create a revenue source, an opportunity for
a company to have profitability so that that
(23:21):
could have some interest potentially for an investor
that you could point to and say, oh,
that's more interesting to me.
Yeah, I'll give you two examples too.
So Circle is a company that recently went
public.
Circle is a stable coin issuer.
So basically they'll issue stable coins and they'll
hold treasuries on their balance sheet.
They will get the 4% from the
(23:42):
treasuries.
The stable coin pays no interest, but it
allows for a token that can be exchanged
dollar for dollar.
So what's their cash flow?
Their cash flow is going to be the
interest from the treasury security.
And the larger and larger the network gets,
the more and more they're going to be
able to leverage that treasury asset.
(24:04):
And you can imagine 4% is not
a huge amount of money, but if you
grow your balance sheet big enough, it could
be a significant cash flow.
If you put a little leverage underneath it,
sky's the limit, right?
Your return on invested capital could be very
large, not dissimilar to how some banks work.
(24:27):
Another example is Bitmine Immersion, which I've learned
more about recently.
This doesn't seem to have the documents that
you would like to see yet from the
SEC.
So buyer beware there.
And I'm not suggesting anybody for the viewers
that should go out and buy this.
You should do your own due diligence for
(24:48):
compliance purposes.
But what I think is interesting is what
they're doing is they want to get in
the middle of that transaction, that stable coin
Ethereum transaction and collect the staking fee or
the validator fee of that 3% to
7%.
So there's some real businesses here that are
going to have real cash flows that I'm
finding to be more interesting than I did
(25:11):
before the Genius Act.
This reminds me a little bit about 15
minutes ago when we were talking about the
Google and where all that got started and
some of the companies that appeared to have
a strong place, whether that be AOL or
Netscape or the list of the dead companies
along the side of the road, who appeared
(25:32):
to be the leaders in this new technology
called the internet and web search, they're not
always the ones that win in the end.
So I know we said this is less
speculation, but it is certainly, in my mind
anyway, clearly in the speculation category and buyer
beware, as Brian said.
(25:54):
I think whenever there's an emerging business model,
a good amount of skepticism is warranted, right?
I would consider it circled just one public,
maybe a month ago.
It's worth mentioning too, just for a compliance
note, that mention of specific stocks is not
(26:17):
a recommendation or an offer.
Individual investors should do their own due diligence
to determine appropriateness for their own circumstances and
your best to consult your financial advisor in
the process.
When we're talking about some of these names,
I want to keep that perspective here that
(26:37):
what we're talking about is not intended to
be any kind of a recommendation, just making
a point that things are evolving.
What we once said was, Hey, no way,
no how.
Now Brian's saying, Hey, look at this.
There's some earnings coming out of a company
that we can point to that can change
the way we think about something as having
(26:58):
appeal or not potentially, but we'll see.
We'll see.
So anything to add there?
Should we move on to other items in
the news?
Let's move on.
All right, here we go.
So I was on vacation and by the
way, took the kids out to Boston.
Two of our kids live in Boston.
We went to Porto.
(27:20):
You ever been there, Brian?
Porto and down in Prudential Center.
Excellent.
Had a great time.
Got a chance to go to Provincetown while
I was on vacation and enjoyed that and
took a sail around the point of the
case, that sunset sail.
Fabulous, right?
So I also was watching what was going
(27:41):
on in the news and I'd started writing
some of these things down over the last
couple of weeks.
You really shouldn't do that on vacation.
Yeah, probably not a good idea.
And I started getting kind of surprised by
all these examples of what I would think
of as government overreach and not typically characteristic
with my ideological evolution, you know, how I
(28:06):
think of the role of government.
So we saw more and more talk of
the president wanting to send National Guard troops
into cities across the country and the idea
of even whether that's legal, right?
We've had some judge ruling that this violated
(28:29):
when in Los Angeles, the Posse Comitatus.
Is that the right way to say that?
That's exactly right.
Late 1800s statute that says you can't use
the military for law enforcement purposes in the
United States.
I saw the government is buying shares of
Intel.
No, no, they're not buying.
(28:50):
They're extorting.
They're extorting shares of Intel.
Normally you'd think of this because they're socialization
of a company or something.
Seems odd to me.
Seems like inconsistent with the kind of thing
that a Republican would want to do.
The idea that, I don't know, Solyndra came
(29:13):
to my mind, but the idea of picking
winners and losers.
I realize we have the CHIPS Act and
maybe there's an effort to say, oh, let's
just not give this infrastructure away.
But I don't know, it just doesn't resonate
with me with the free market principles.
We saw John Bolton, Ambassador John Bolton's house,
(29:35):
raided by government officials shortly after.
Bolton's known to be a critic of the
president.
He's a former Trump administration in the prior
administration, a national security advisor, but it seems
like a retribution.
We have to be one of the themes
(29:56):
the president ran on.
It seems like a kind of inappropriate extension
of power.
Perhaps, perhaps time will tell.
Yeah, I think that's fair.
That one may be, is there something inappropriate
going on there?
But optics sure are questionable.
Optics are questionable, yeah.
Put into that, we saw the president continuing
(30:18):
to try to, or actually fire, Fed Governor
Lisa Cook.
She's suing to question whether that's legal, but
in an effort to pack the Fed with
people who will do his bidding to reduce
the interest rates.
I think you could add to that.
(30:40):
We saw recently the Bureau of Labor Statistics
had, what, a CPI report last week.
That was the BLS.
But we saw a CPI where inflation was,
what, at an annual rate of around 2
.7%. And then we saw jobs a couple
of weeks ago with 118,000 revision over
(31:05):
the year, and new jobs about 73,000.
And the administration didn't really like the report
and fired the BLS commissioner.
Just see a lot of things that are
kind of, what's going on here with, struck
(31:25):
me as somewhat an extent of, I would
argue, some government overreach, not in keeping with
the typical kind of role we tend to
think of for Republicans as saying, smaller government,
federal government, closer to the people for the
implementation.
(31:45):
So state governments, city governments, and so forth.
I don't know.
I dumped a lot of my frustration out
there, but anybody have something to add to
that?
Well, certainly.
And I think this period of this Trump
second term is going to be viewed as,
from a constitutional perspective, as a clear period
(32:09):
when the power of the president is determined,
right?
All these, I mean, there's a lot of
things here, right?
And most of them have to do with
the president's power.
And you didn't even mention tariffs, the decision
on tariffs.
So just to throw- Executive orders we
could point to in abundance, right?
(32:32):
Appropriateness, applicability, lawfulness, and so forth.
Yeah.
So I think all of these things and
more are all going to be tested through
the courts.
And thankfully, we have three branches of government,
independent branches of government.
And thus far, the courts seem willing, totally
(32:54):
willing to push back on some of these
things.
But foundationally, these things that we hold dear,
this is not my Republican party, so I'm
not defending the party.
Parties change, and leaders of parties change.
And we could talk about the crazy left
too.
But constitutionally, which is more important than any
(33:16):
political party, I think this term is going
to be remembered in history when the power
of the presidency was clearly put in check
because of many of these actions and probably
more to come.
So that's a needed thing in our constitutional
democracy, republic, that when one branch of government
(33:38):
goes outside the lines, so to speak, it
is brought back in by the other branches
of government.
And so while it doesn't feel healthy at
the time, feels a little scary sometimes for
people who cherish due process and individual rights
and a smaller government, I think ultimately it
(33:58):
will make our country stronger that we have
the ability to and the will to restrain
a branch of government that is operating outside
the constitution.
I hope we do see that.
I hope we do see some restraint.
I think that's a great way to frame
it.
(34:19):
I think that it's no doubt that we
face various challenges.
You can point to all these various topics
and say, identify issues that have challenge.
But I don't see Congress providing the kind
(34:42):
of oversight I would expect when the executive
branch seems to be overreaching.
I think we can point to some of
these kind of instances.
Well, I think one of the examples of
when this is going to be tested, not
the court part of it, which was going
to be tested for the entire four years,
(35:02):
but if the tariff decision holds that President
Trump exceeded his authority in these broad-based
tariffs, blah, blah, blah.
Yeah, it looks like.
Oh, yeah, that was another court.
Yes, they will kick it back to Congress.
The court will kick it back.
They will overtly mention in their decision that
this is a congressional authority and leave it
(35:23):
for Congress to act and probably give Congress,
if you're looking at other cases, a period
of time.
Mm-hmm.
And that's when we'll see if the Republicans
in charge are willing to go along with
giving their authority because that's what they're doing.
Retaining that authority or giving that authority.
That's right.
That's right.
And that's a different analysis than letting Congress
(35:46):
doesn't have a role to stop an executive
from doing something.
They don't have a role there other than
impeachment.
That's the purview of the courts.
But if they have to overtly do something
and say, we are willing to give up
our Article 1 powers to an Article 2
president.
Yeah.
That's a different analysis.
(36:06):
And I think the- There are some
oversight involvements on various things.
I don't know how this fits into Congress,
but when abundance of the leaders of the
CDC basically walk out, what's going on?
That's an oversight function, but it's not a
(36:28):
power that Congress has to change that particular
thing.
But if tariffs, for example, is an Article
1 power of Congress, the president is exercising
them on some pre-delegated powers that the
court has said that he exceeded.
If it comes back to Congress to have
(36:48):
to overtly do something, I expect that you'll
see a number of Republicans who are still
there, still conservative, and say, no, I'm not
willing to give.
And you have to look at this, even
if you're a pro-Trump person, a MAGA
person, you have to look at this, not
in the context of the tariffs.
You have to look at it like, if
there's a strongly left liberal president, do you
(37:12):
want that person to have these same powers
and authority?
You can't look at it like, oh, I
like what this is doing.
I like my president.
Yes, exactly.
You have to look at it like-
The office, not the individual, right?
Yeah.
Do you want the president to have the
unilateral authority to do these things?
Right?
Right.
And I don't, frankly.
I'm not concerned.
(37:33):
Our founders created Congress first, Article 1.
They intended that the elected representatives across the
country would be the predominant party, the predominant
branch of government for a good reason.
Yeah, again, closer to the people in many
respects.
They were so concerned about it, they specifically
delegated the powers in Article 1.
(37:57):
Well, I know we're going long, and I
went down the rabbit hole there with a
slew of things to drop on everybody.
But there were a couple other quick things,
I will say.
One of them was the Fed chair, Jackson
Hole.
The market reacted to his comments, expecting the
(38:18):
possibility of an interest rate drop, decline.
Brian, I think we were talking, and you
said, well, you never know, right?
Things can change.
But we'll see where that leads.
Seems like markets have clearly expected that, right?
(38:40):
Yeah, the market's expecting like a 100%
chance of a cut here in September.
But we're also going to get a jobs
report following the firing of the head of
the BLS, and that's likely going to be
good, or very good, because the former one
(39:03):
was fired because it was a disappointing jobs
report.
But Brian, if you're a Fed governor, if
you're one of the people making this decision,
and you have a great jobs report, doesn't
that push you the other way?
Like, we don't need to have a rate
cut.
Yeah, I mean, that was what would normally
happen, but I don't think you can trust
(39:24):
the new jobs report, right?
You're going to have to look at ADP,
you're going to have to look at initial
claims, you're going to have to look at
continuing claims, you're going to have to look
at some more reliable sources of data, since
this one is obviously going to be politically
charged.
And you've got the beginnings of a politically
motivated Fed governors, right?
There's been recent appointments, and you're starting to
(39:46):
get this politicization of the Fed.
Well, you didn't even get into the attempted
firing of board governor Cook, which, you know,
we were talking about things- That's about
it, yeah.
Did you mention it?
I missed it, I'm sorry.
But yeah, I mean, that's another item on
(40:06):
a long list of things that are just
completely, obviously illegal.
But, you know, the court doesn't dismiss them
right away.
They might disagree, but they push it off
to the next appellate court until it gets
to the Supreme Court.
And, you know, we'll see what happens.
But luckily, most of the bond market reacts
(40:29):
on market forces.
And, you know, you might be able to
adjust the short term part of the curve,
but the reaction function on the longer end
is going to be based on inflation and
growth expectations.
And it might have the exact opposite effect
that the administration wants if they force policy.
(40:51):
And, you know, it might have a self
-regulating effect, or at least that's what I
hope, and I think the market probably thinks.
Hey, you know, there was one other big
news event that occurred during the week.
And of course, that was Taylor Swift got
engaged.
Who knew, right?
The world stopped and took notice, apparently.
(41:13):
So that's great.
Hopefully many years of happy marriage when they
tie the knot.
In any case, we have a great tool.
We have a good tool for the people
looking to get married, an ebook.
Go Patriots.
Yeah.
All right.
We're into football season.
(41:34):
Anyway, lots to talk about, lots to think
about.
It all factors into the way you think
about your portfolio, your financial planning, lots to
navigate.
If you need help in the process, don't
hesitate to reach out to our team.
Guys, thanks very much.
Keep striving for something more.
(42:19):
Transcribed
by
(42:40):
https://otter.ai Readers should consult their own financial
advisors or conduct their own due diligence before
making any financial decisions.
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome.
Thanks for being with us for another episode
of Something More with Chris Boyd.
I'm here with Jeff Perry and Brian Regan.
We are all of the AMR team at
Wealth Enhancement and glad to have you joining
(00:43):
us.
We're talking about things that are in the
news.
Some really interesting things have been evolving.
Brian wanted to lead us off because of
a recent court decision as it related to
Google that could have some significant consequence in
terms of...
(01:04):
Now, Google had this court decision a while
back, but it was about this antitrust consequence
and what kind of requirements were going to
be placed upon them.
Is that essentially the gist?
Yeah, they were found to have maintained an
illegal monopoly in internet search, but the news
was the remedy that the court put on
(01:27):
them, which was viewed as the market is
pretty insignificant.
There were some serious outcomes that could have
come, including divesting Chrome and Android and YouTube,
none of which came to pass.
It was viewed as very good news.
They do have to share some search index
(01:47):
data.
They basically have to share their algorithm, which
has been their competitive advantage for 20 years
with likely qualified rivals.
They can't do exclusive contracts.
For example, they've had an exclusive contract with
Apple to be their default search provider on
(02:10):
the iPhone, which as you can imagine is
a big competitive advantage.
Apple was getting something to the tune of
$30 billion a year in order to be
that search provider.
Now, in search, that wasn't deemed to be
a bad deal, but for new products going
(02:32):
forward, as you can imagine, the Gen AI
products, you're not going to be able to
have those exclusive agreements.
You can have non-exclusive agreements, but you
can't have exclusive agreements.
So you saw Apple rally on the news,
right?
Because they're going to be able to still
partner with Google as long as they're quote
(02:53):
unquote non-exclusive.
I'm not quite sure how that would work.
But ultimately, even though their search platform was
hurt and they're not going to be able
to do the same types of things by
having exclusive contracts with Apple, for example, for
the next Gen AI products, their real distribution
(03:14):
network wasn't hurt too much, right?
From a strategic standpoint.
So if you use Google and you use
Google on Chrome, you use Google on Apple,
you use Google through your Android, you're probably
still going to be able to use Google
on your Android, on your iPhone and through
Chrome.
So all that was viewed as very, very
(03:35):
positive, both for Apple and Alphabet.
YouTube's going to remain, Chrome's going to remain,
Android's going to remain.
So this was very positive.
And this was definitely something that was keeping
Google's rating down.
I don't really like to talk about price
(03:56):
earnings ratios, but this could likely have a
re-rating closer to where the other mega
cap growth names are sitting rather than the
sub-market PE ratio that they've been enjoying.
Ryan, wasn't part of the perception as to
why the judge was maybe a little more
(04:16):
lenient than expected?
Because perhaps with the AI evolution that people
are using some of these tools in a
way that they might've at one time used
Google, but there's naturally evolving greater competition to
(04:38):
Google for the search engine.
Yeah, I agree with that.
I mean, I think this ruling might be
10 years too late.
They might've made a real difference a decade
ago, but today, like Chris mentioned, there's all
sorts of competition from these new entrants, whether
it be OpenAI or ChatGPT or Grok or
(05:00):
Facebook's product or Amazon's product.
There's tons of competition there now.
I think these exclusive right deals will be
interesting to see how, if anybody could end
up being the dominant AI, gen AI platform
going forward.
(05:21):
But what I suspect is if you use
an Android, if you use Chrome, you're probably
going to be a Gemini user.
That's what I'm expecting.
I think that's the assumption under this ruling.
And if you're used to using Google on
Apple, you might continue to continue to use
Google on Apple and probably more likely to
(05:44):
become a Gemini user over everything else.
So I think that's the general reaction today.
I think there's still question marks for the
future, but I think there's certainly less question
marks than there were before this ruling.
I'll be honest, when I first got the
headline alert pushed to my phone, I thought
Google would be down.
But then reading more and understanding more about
(06:04):
it, I think this is the appropriate response.
More like a relief rally, right, Brian?
The fears of what this judge could have
done as a remedy didn't happen, so the
market responded accordingly.
That's how I viewed it.
I just don't think anybody's building a new
search engine.
They have to share search engine details, but
(06:26):
that's old tech.
That's relevant five years ago, it's not necessarily
as relevant today.
The judge talked about that in his decision,
how some of these companies in the last
20 years didn't exist or the format, they
didn't exist, and it's very difficult for the
courts to handle a case like this.
(06:47):
And we have to remember, this is a
district court case, so it's certainly relevant to
the facts of this case, but it doesn't
hold any precedential value.
It's not a Supreme Court case, it's not
an appellate court case.
Although there's some dicta, there's some language in
there about how companies should behave, every situation
is different, so who knows what happens.
(07:08):
What's interesting is Google's probably still going to
appeal.
The Department of Justice is holding this up
as a victory and the market doesn't think
it's a victory for the Department of Justice.
And Google's going to appeal and that's going
to stretch out for another few years.
So they're going to be able to continue
to have search without sharing any data and
(07:28):
still continue to monetize search for years before
there's any kind of negative influence.
And then by then, it could be moved.
I think what's important is their ability to
distribute Gemini, which I think was giving some
(07:49):
landing gear here in this ruling, which is
probably the most important thing.
Very interesting.
And so for investors, I guess that's encouraging
for Google, encouraging for Apple, anyone who has
an index fund has plenty of both, alphabet.
Yeah.
(08:16):
I guess the question is, who's the little
guy that's being undermined in the process that
people are using their search engine that they'd
benefit from getting some of this data that
presumably Google might have to share in time?
Well, I think the big one would be
(08:37):
Microsoft, right?
They would have to share their algorithmic data
with Bing.
So if you own a mega cap growth
ETF and maybe Google's slightly negatively hurt and
Microsoft benefits, you're going to be fine in
the aggregate, right?
(08:58):
Does anyone, I've heard of this thing, I
don't know, it's like a duck or something.
What's that?
It's like a- Duck, duck, go.
Duck, duck, go.
Right.
I wonder if there's a lot of users
for that.
But I mean, I understand it essentially gets
rid of that tracking your data type perspective.
(09:19):
I mean, Google has an 89% market
share in search, 89%.
And they only recently fell under 90 for
the first time since like 2002 or something
like that.
So they've been very, very dominant in the
market for a long, long time.
So I probably shouldn't be using Ask Jeeves
anymore.
You can if you want to, Chris.
(09:42):
I do remember that one.
That was very, you know, it just goes
to show- Ultra Vista, wasn't that another
one?
Yeah.
The early creators are not always the dominant
force.
One more comment that I have on Google
is the judge, you know, certainly talked about,
and it's a relevant element of an antitrust
in a breakup situation is, has the consumer
(10:03):
been harmed?
Yeah.
And it's tough to make a case that
the worldwide American, however you want to frame
it, consumer has been harmed by Google's alleged
monopoly.
I mean- I mean, it's certainly not
something that comes at a cost in terms
of premium paid.
I guess it's a question of how that
data is used that should evaluate the cost
(10:26):
or the harm, which is kind of hard
to do.
So that's an interesting point, Chris.
On appeal, the argument that Google is going
to make is that sharing this data would
undermine the privacy of their users.
And so the remedy would actually hurt the
consumer, which I think is probably a pretty
(10:47):
strong case.
Yeah.
If the whole point of antitrust is to
protect the consumer, then, you know, this could
arguably, arguably hurt them.
So if you look at the consumer as
the ad, advertiser though, right?
Like the customers, I don't know if that
would be a stretch, I would say then
- No, I think you could, I think
(11:08):
the need to look at that, not just
beyond the retail consumer, right?
The customer of Google is a business.
Yeah.
So they compete over AdWords and they bid
on AdWords.
And if they could do it across multiple
different platforms on search, then you would think
that maybe they could get a lower price.
But I don't know.
If they were manipulating the market, right?
(11:30):
I mean, so the argument, counter argument is
there's alternatives, there's Facebook, there's all these social
media outlets.
You could make the argument that they're the
only ad exchange for search, right?
So if there was one stock exchange, for
example, the margins that they would get for
exchanging stocks between traders could be much wider
(11:50):
than it is if there's competition between exchanges.
I think you could make a similar argument
here or there.
But I think, I can't help but to
think about comparing this case to the Microsoft
case in, was it 95, 96?
Okay.
It might have finally been settled in 2001.
(12:12):
So correct me if I'm wrong, if you
guys remember this more clearly than I do,
but I believe the argument was that they
were preloading Internet Explorer into Windows, which was
the dominant software operating system provider.
Netscape was getting pushed out, or at least
they felt like they were being pushed out.
(12:33):
And why is this similar?
Well, these exclusive contracts that they can distribute,
their search product isn't too dissimilar to Internet
Explorer being preloaded into a dominant software operating
system provider.
I think that's right.
(12:54):
The case is very similar.
Yeah.
Now, if you think about what happened with
Microsoft between 2001 and today, they're all right.
And once again, no breakup.
The court did not, as we know, order
a breakup of Microsoft.
(13:15):
They encouraged or mandated behavioral changes, as that
court said.
And Windows is still dominant too, right?
Windows is still dominant.
No doubt.
And that's still the bulk of how they
make a lot of their money, excluding Azure,
I guess.
But the enterprise productivity services is still the
(13:37):
bulk of Windows.
It didn't stop their really monopolistic power, I
guess is what I'm saying.
And that case was before some of this
technology, in the early stages of where we
are in technology, but it is consistent.
And this court noted that, that the trend
is not to break up these companies, but
(13:57):
to attempt to have them have behavioral changes.
So, maybe the days of breaking up standard
oil don't exist anymore.
Or AT&T.
Or AT&T, the more contemporary.
Yeah.
All right.
Let's...
Oh, sorry.
You got one other thing to say there,
Brian?
(14:17):
Yeah.
Obviously, I have a lot to say on
this subject.
I think it's very interesting.
But we talked about all the new competition
in the market, and there's this big push
for private investments lately.
And while I was thinking about this topic,
I couldn't help but to think, people get
the sense or feel like they can't get
(14:38):
into these large language models providers because they're
private.
And I can't help but think, but that's
not really true.
Microsoft owns a significant portion of OpenAI.
It's under negotiation how much they're going to
own, because they're going to change their structure
from nonprofit to profit.
(15:00):
But if you own Microsoft, you own a
substantial amount of OpenAI.
If you own Amazon, you own a significant
portion of Anthropic.
So if you do want access to these
things, I guess this is...
I think this case illustrates how the rich
(15:23):
are going to continue to get richer.
And this kind of opens up some avenues
for these companies with large moats and large
pockets to actually continue to create large moats
and large pockets for the future.
So I think in general, these companies that
had a ton of power and were investing
(15:45):
into the future are going to be able
to continue to do that under this ruling,
or given more license to do that under
this ruling.
I agree with that.
All right.
In the theme of in the news, we
were also interested in talking a little bit
about some technological developments and some application of
(16:10):
that as it relates to evolving views relating
to profitability derived from things like cryptocurrency or
stablecoin.
So let's talk about the recent legislation that
provided some governance surrounding stablecoin, which is essentially
(16:31):
a form of cryptocurrency, but tied to a
dollar in, a dollar out, the idea that
it's stable in terms of not speculative, not
trying to make money from the growth of
the value of the currency as much as
providing continuity of the value of what you
(16:54):
put your money into a given stablecoin.
So essentially, Brian, let's start with what's the
legislative backdrop that's evolved here?
So I don't know all the details of
the Genius Act, and I'm not going to
pretend like I do, but one of the
(17:15):
important stipulations is exactly what you just said,
Chris, the regulation of stablecoin to make sure
that it's backed by real tangible assets.
So in this case- Or it was
just a promise, right?
It was like, I could buy your stablecoin
and you could promise me that it'll be
worth the same amount, but I didn't have
(17:37):
any real, as an entity, there was no
regulatory backdrop.
You have to have treasuries or some mechanism
to represent that value appropriately.
Yeah.
And some of them in the past weren't
backed by much of anything of real value.
So this is a significant change.
(17:58):
This is going to make transacting in stablecoins
much more reasonable to do.
So if you are one of these people
that believes that we're going to be able
to do cross-border transactions over stablecoin and
it'll be more efficient than doing a Western
Union or a wire or an ACH or
(18:20):
something like that, it'll be more efficient, it'll
be cheaper, it'll be faster.
If you're somebody that believes that, this is
great.
Stablecoins make this a much more trusted, much
more rational way to do it.
If you were to do it with Bitcoin,
for example, you don't know what the value
is going to be from one day to
another.
It could change pretty dramatically.
(18:41):
But with a stablecoin, you know you're going
to get dollar for dollar.
So this opens up all sorts of shadow
banking activity, all sorts of smart contract activity
that could be executed on the blockchain, where
if the belief is that it's more secure
and it's more efficient, that it could drive
a lot of new activity.
I want you to continue on.
(19:03):
I just want to put a caveat for
those listening who might be interested in our
views on how this stablecoin applies to our
clientele at this point in time.
And I would want to make the clarification
or be clear, this is not something we're
advocating for our clients.
It's not something we utilize in our portfolio
(19:25):
management.
It's not to say that someday there might
not be a place for it.
It's just right now, I think we could
easily argue we prefer a centralized finance, something
that the central bank has the ability to
step in and offer stabilizing characteristics directly with
(19:47):
the banks.
And so we would maybe be inclined to
make use of treasuries, money market funds, and
bank accounts.
But we're not using necessarily stablecoin as a
way to offer people an investment vehicle, which
(20:08):
is different from saying, hey, this has evolved
into something that has less risk than what
it once had.
Okay.
And you wanted to go on to talk
about this in the point of view that
how some of this could apply.
You were talking about smart contracts and things
of that sort.
(20:28):
Yeah.
I co-signed everything you said, but I
think it's interesting that this is evolving into
some more practical use and the Genius Act
is certainly helping that along.
And I think it's important as me personally,
I've been a crypto skeptic, but that doesn't
mean you put your head in the sand.
(20:49):
I mean, if something changes, something evolves, you
got to change your mind with the facts.
And I think that's maybe an important distinction
between what I'm saying now and what I've
said in the past.
So back to stablecoins, if you could transact
here, if the government's Genius Act is going
to make it more likely that you're going
to transact, the idea is that the market
of trading in stablecoins will get much bigger.
(21:12):
Stablecoins are at least the two biggest ones
from my understanding trade on the Ethereum network.
Now this was news to me.
I did not know that anything other than
Ethereum could trade on the Ethereum network.
And on the Ethereum network, there are validators.
Validators are people who get paid transaction fees.
They're often coined in the industry as gas
fees, but they're really a transaction fee to
(21:34):
validate whether the transaction on the network follows
along the terms of the smart contract.
And these fees can be anywhere between 3
% and 7%, depending on the changes.
So what we're seeing here from these validators
is real transactions and real cash flows coming
from something that was formerly viewed as just
(21:56):
a speculative asset.
Now we're actually having real transactions, practical value
and cash flows from real companies.
You can almost think of this as a
combination between MicroStrategy and Visa.
They hold the underlying asset, but they're also
executing the secure transaction for a fee.
And as we know with Visa, it can
(22:17):
be very, very lucrative to be in the
middle of those transactions.
So the point here is, as much as
we have been and would argue that cryptocurrency
generally is a speculative endeavor for our clientele
(22:39):
who tend to be retirees, largely not appropriate
as something they would want to participate in,
your point here is to say, hey, look
at this.
We've looked at cryptocurrency in the past and
said, no interest, not interested, thanks anyway, because
I can't point to anything that has a
valuation.
(23:00):
Now you're saying there are some examples of
companies that may be behind the stable coin
and the transaction going on between parties that
can create a revenue source, an opportunity for
a company to have profitability so that that
(23:21):
could have some interest potentially for an investor
that you could point to and say, oh,
that's more interesting to me.
Yeah, I'll give you two examples too.
So Circle is a company that recently went
public.
Circle is a stable coin issuer.
So basically they'll issue stable coins and they'll
hold treasuries on their balance sheet.
They will get the 4% from the
(23:42):
treasuries.
The stable coin pays no interest, but it
allows for a token that can be exchanged
dollar for dollar.
So what's their cash flow?
Their cash flow is going to be the
interest from the treasury security.
And the larger and larger the network gets,
the more and more they're going to be
able to leverage that treasury asset.
(24:04):
And you can imagine 4% is not
a huge amount of money, but if you
grow your balance sheet big enough, it could
be a significant cash flow.
If you put a little leverage underneath it,
sky's the limit, right?
Your return on invested capital could be very
large, not dissimilar to how some banks work.
(24:27):
Another example is Bitmine Immersion, which I've learned
more about recently.
This doesn't seem to have the documents that
you would like to see yet from the
SEC.
So buyer beware there.
And I'm not suggesting anybody for the viewers
that should go out and buy this.
You should do your own due diligence for
(24:48):
compliance purposes.
But what I think is interesting is what
they're doing is they want to get in
the middle of that transaction, that stable coin
Ethereum transaction and collect the staking fee or
the validator fee of that 3% to
7%.
So there's some real businesses here that are
going to have real cash flows that I'm
finding to be more interesting than I did
(25:11):
before the Genius Act.
This reminds me a little bit about 15
minutes ago when we were talking about the
Google and where all that got started and
some of the companies that appeared to have
a strong place, whether that be AOL or
Netscape or the list of the dead companies
along the side of the road, who appeared
(25:32):
to be the leaders in this new technology
called the internet and web search, they're not
always the ones that win in the end.
So I know we said this is less
speculation, but it is certainly, in my mind
anyway, clearly in the speculation category and buyer
beware, as Brian said.
(25:54):
I think whenever there's an emerging business model,
a good amount of skepticism is warranted, right?
I would consider it circled just one public,
maybe a month ago.
It's worth mentioning too, just for a compliance
note, that mention of specific stocks is not
(26:17):
a recommendation or an offer.
Individual investors should do their own due diligence
to determine appropriateness for their own circumstances and
your best to consult your financial advisor in
the process.
When we're talking about some of these names,
I want to keep that perspective here that
(26:37):
what we're talking about is not intended to
be any kind of a recommendation, just making
a point that things are evolving.
What we once said was, Hey, no way,
no how.
Now Brian's saying, Hey, look at this.
There's some earnings coming out of a company
that we can point to that can change
the way we think about something as having
(26:58):
appeal or not potentially, but we'll see.
We'll see.
So anything to add there?
Should we move on to other items in
the news?
Let's move on.
All right, here we go.
So I was on vacation and by the
way, took the kids out to Boston.
Two of our kids live in Boston.
We went to Porto.
(27:20):
You ever been there, Brian?
Porto and down in Prudential Center.
Excellent.
Had a great time.
Got a chance to go to Provincetown while
I was on vacation and enjoyed that and
took a sail around the point of the
case, that sunset sail.
Fabulous, right?
So I also was watching what was going
(27:41):
on in the news and I'd started writing
some of these things down over the last
couple of weeks.
You really shouldn't do that on vacation.
Yeah, probably not a good idea.
And I started getting kind of surprised by
all these examples of what I would think
of as government overreach and not typically characteristic
with my ideological evolution, you know, how I
(28:06):
think of the role of government.
So we saw more and more talk of
the president wanting to send National Guard troops
into cities across the country and the idea
of even whether that's legal, right?
We've had some judge ruling that this violated
(28:29):
when in Los Angeles, the Posse Comitatus.
Is that the right way to say that?
That's exactly right.
Late 1800s statute that says you can't use
the military for law enforcement purposes in the
United States.
I saw the government is buying shares of
Intel.
No, no, they're not buying.
(28:50):
They're extorting.
They're extorting shares of Intel.
Normally you'd think of this because they're socialization
of a company or something.
Seems odd to me.
Seems like inconsistent with the kind of thing
that a Republican would want to do.
The idea that, I don't know, Solyndra came
(29:13):
to my mind, but the idea of picking
winners and losers.
I realize we have the CHIPS Act and
maybe there's an effort to say, oh, let's
just not give this infrastructure away.
But I don't know, it just doesn't resonate
with me with the free market principles.
We saw John Bolton, Ambassador John Bolton's house,
(29:35):
raided by government officials shortly after.
Bolton's known to be a critic of the
president.
He's a former Trump administration in the prior
administration, a national security advisor, but it seems
like a retribution.
We have to be one of the themes
(29:56):
the president ran on.
It seems like a kind of inappropriate extension
of power.
Perhaps, perhaps time will tell.
Yeah, I think that's fair.
That one may be, is there something inappropriate
going on there?
But optics sure are questionable.
Optics are questionable, yeah.
Put into that, we saw the president continuing
(30:18):
to try to, or actually fire, Fed Governor
Lisa Cook.
She's suing to question whether that's legal, but
in an effort to pack the Fed with
people who will do his bidding to reduce
the interest rates.
I think you could add to that.
(30:40):
We saw recently the Bureau of Labor Statistics
had, what, a CPI report last week.
That was the BLS.
But we saw a CPI where inflation was,
what, at an annual rate of around 2
.7%. And then we saw jobs a couple
of weeks ago with 118,000 revision over
(31:05):
the year, and new jobs about 73,000.
And the administration didn't really like the report
and fired the BLS commissioner.
Just see a lot of things that are
kind of, what's going on here with, struck
(31:25):
me as somewhat an extent of, I would
argue, some government overreach, not in keeping with
the typical kind of role we tend to
think of for Republicans as saying, smaller government,
federal government, closer to the people for the
implementation.
(31:45):
So state governments, city governments, and so forth.
I don't know.
I dumped a lot of my frustration out
there, but anybody have something to add to
that?
Well, certainly.
And I think this period of this Trump
second term is going to be viewed as,
from a constitutional perspective, as a clear period
(32:09):
when the power of the president is determined,
right?
All these, I mean, there's a lot of
things here, right?
And most of them have to do with
the president's power.
And you didn't even mention tariffs, the decision
on tariffs.
So just to throw- Executive orders we
could point to in abundance, right?
(32:32):
Appropriateness, applicability, lawfulness, and so forth.
Yeah.
So I think all of these things and
more are all going to be tested through
the courts.
And thankfully, we have three branches of government,
independent branches of government.
And thus far, the courts seem willing, totally
(32:54):
willing to push back on some of these
things.
But foundationally, these things that we hold dear,
this is not my Republican party, so I'm
not defending the party.
Parties change, and leaders of parties change.
And we could talk about the crazy left
too.
But constitutionally, which is more important than any
(33:16):
political party, I think this term is going
to be remembered in history when the power
of the presidency was clearly put in check
because of many of these actions and probably
more to come.
So that's a needed thing in our constitutional
democracy, republic, that when one branch of government
(33:38):
goes outside the lines, so to speak, it
is brought back in by the other branches
of government.
And so while it doesn't feel healthy at
the time, feels a little scary sometimes for
people who cherish due process and individual rights
and a smaller government, I think ultimately it
(33:58):
will make our country stronger that we have
the ability to and the will to restrain
a branch of government that is operating outside
the constitution.
I hope we do see that.
I hope we do see some restraint.
I think that's a great way to frame
it.
(34:19):
I think that it's no doubt that we
face various challenges.
You can point to all these various topics
and say, identify issues that have challenge.
But I don't see Congress providing the kind
(34:42):
of oversight I would expect when the executive
branch seems to be overreaching.
I think we can point to some of
these kind of instances.
Well, I think one of the examples of
when this is going to be tested, not
the court part of it, which was going
to be tested for the entire four years,
(35:02):
but if the tariff decision holds that President
Trump exceeded his authority in these broad-based
tariffs, blah, blah, blah.
Yeah, it looks like.
Oh, yeah, that was another court.
Yes, they will kick it back to Congress.
The court will kick it back.
They will overtly mention in their decision that
this is a congressional authority and leave it
(35:23):
for Congress to act and probably give Congress,
if you're looking at other cases, a period
of time.
Mm-hmm.
And that's when we'll see if the Republicans
in charge are willing to go along with
giving their authority because that's what they're doing.
Retaining that authority or giving that authority.
That's right.
That's right.
And that's a different analysis than letting Congress
(35:46):
doesn't have a role to stop an executive
from doing something.
They don't have a role there other than
impeachment.
That's the purview of the courts.
But if they have to overtly do something
and say, we are willing to give up
our Article 1 powers to an Article 2
president.
Yeah.
That's a different analysis.
(36:06):
And I think the- There are some
oversight involvements on various things.
I don't know how this fits into Congress,
but when abundance of the leaders of the
CDC basically walk out, what's going on?
That's an oversight function, but it's not a
(36:28):
power that Congress has to change that particular
thing.
But if tariffs, for example, is an Article
1 power of Congress, the president is exercising
them on some pre-delegated powers that the
court has said that he exceeded.
If it comes back to Congress to have
(36:48):
to overtly do something, I expect that you'll
see a number of Republicans who are still
there, still conservative, and say, no, I'm not
willing to give.
And you have to look at this, even
if you're a pro-Trump person, a MAGA
person, you have to look at this, not
in the context of the tariffs.
You have to look at it like, if
there's a strongly left liberal president, do you
(37:12):
want that person to have these same powers
and authority?
You can't look at it like, oh, I
like what this is doing.
I like my president.
Yes, exactly.
You have to look at it like-
The office, not the individual, right?
Yeah.
Do you want the president to have the
unilateral authority to do these things?
Right?
Right.
And I don't, frankly.
I'm not concerned.
(37:33):
Our founders created Congress first, Article 1.
They intended that the elected representatives across the
country would be the predominant party, the predominant
branch of government for a good reason.
Yeah, again, closer to the people in many
respects.
They were so concerned about it, they specifically
delegated the powers in Article 1.
(37:57):
Well, I know we're going long, and I
went down the rabbit hole there with a
slew of things to drop on everybody.
But there were a couple other quick things,
I will say.
One of them was the Fed chair, Jackson
Hole.
The market reacted to his comments, expecting the
(38:18):
possibility of an interest rate drop, decline.
Brian, I think we were talking, and you
said, well, you never know, right?
Things can change.
But we'll see where that leads.
Seems like markets have clearly expected that, right?
(38:40):
Yeah, the market's expecting like a 100%
chance of a cut here in September.
But we're also going to get a jobs
report following the firing of the head of
the BLS, and that's likely going to be
good, or very good, because the former one
(39:03):
was fired because it was a disappointing jobs
report.
But Brian, if you're a Fed governor, if
you're one of the people making this decision,
and you have a great jobs report, doesn't
that push you the other way?
Like, we don't need to have a rate
cut.
Yeah, I mean, that was what would normally
happen, but I don't think you can trust
(39:24):
the new jobs report, right?
You're going to have to look at ADP,
you're going to have to look at initial
claims, you're going to have to look at
continuing claims, you're going to have to look
at some more reliable sources of data, since
this one is obviously going to be politically
charged.
And you've got the beginnings of a politically
motivated Fed governors, right?
There's been recent appointments, and you're starting to
(39:46):
get this politicization of the Fed.
Well, you didn't even get into the attempted
firing of board governor Cook, which, you know,
we were talking about things- That's about
it, yeah.
Did you mention it?
I missed it, I'm sorry.
But yeah, I mean, that's another item on
(40:06):
a long list of things that are just
completely, obviously illegal.
But, you know, the court doesn't dismiss them
right away.
They might disagree, but they push it off
to the next appellate court until it gets
to the Supreme Court.
And, you know, we'll see what happens.
But luckily, most of the bond market reacts
(40:29):
on market forces.
And, you know, you might be able to
adjust the short term part of the curve,
but the reaction function on the longer end
is going to be based on inflation and
growth expectations.
And it might have the exact opposite effect
that the administration wants if they force policy.
(40:51):
And, you know, it might have a self
-regulating effect, or at least that's what I
hope, and I think the market probably thinks.
Hey, you know, there was one other big
news event that occurred during the week.
And of course, that was Taylor Swift got
engaged.
Who knew, right?
The world stopped and took notice, apparently.
(41:13):
So that's great.
Hopefully many years of happy marriage when they
tie the knot.
In any case, we have a great tool.
We have a good tool for the people
looking to get married, an ebook.
Go Patriots.
Yeah.
All right.
We're into football season.
(41:34):
Anyway, lots to talk about, lots to think
about.
It all factors into the way you think
about your portfolio, your financial planning, lots to
navigate.
If you need help in the process, don't
hesitate to reach out to our team.
Guys, thanks very much.
Keep striving for something more.
(42:19):
Transcribed
by
(42:40):
https://otter.ai Readers should consult their own financial
advisors or conduct their own due diligence before
making any financial decisions.
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