August 19, 2024 • 36 mins
Chuck Zodda and Mike Armstrong discuss the US housing crisis, simple solutions, and what the presidential candidates are proposing to solve it. How can you position yourself to take advantage of the Feds first rate cut in years? Wall Street is looking for more signs that US consumers will keep spending. Amazon is getting heat from local residents over the drone delivery service. Did Disney just make a bad situation worse?
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is The Financial
Exchange with Chuck Zada and Mike Armstrong, your exclusive look
at business and financial news affecting your day, your city,
(00:42):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a pround partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting DAV five k dot com Boston and
making a donation today. The DAV five K Boston is
(01:04):
presented by Veterans Development Corporation. This is the Financial Exchange
with Chuck Zada and Mike Armstrong.
Speaker 2 (01:12):
It is Chuck, Mike and Tucker with you here and
as we kick off Jackson whole week for the Federal Reserve.
Markets have a nice little floatiness to them. I think
that's the technical term here. The Dow is up one
hundred and ninety seven points, the S and P is
up twenty three points, and the Nasdaq up seventy points.
Speaker 3 (01:31):
So the S and P five hundred right.
Speaker 2 (01:33):
Now, by the way, for you know, all of the
doomers from two mondays ago is now less than one
point six percent away from its all time high. Doesn't
mean that it won't go down from here, but it
does mean that, Sorry, Jeremy Siegel, we didn't need an
emergency seventy five basis point cut two weeks ago today,
(01:57):
And I'm sorry, I'm just gonna kind of found the
table on this one for a little while. And look,
when when the day comes when you know I'm wrong,
which will probably be tomorrow, then you know, all you
listening can be like, Chuck, what the heck's wrong with you?
Speaker 3 (02:11):
And that's fine, that's that's that's what we do here.
Speaker 2 (02:15):
Bonds the tenuere US Treasury is down one point seven
basis points to three point eight seven five percent. Oil
West Text Intermedia down forty eight cents to seventy six
seventeen per barrel, Triple A national average for gas prices
sliding again another three tenths of ascent to three forty
one and one tenth of ascent nationally, So down about
(02:36):
ten cents over the last month. Now on the triple
A national average for gas prices, we'll see if we
have any further momentum there, but I suspect we're stalling
out somewhere soon as far as how much lower we
can go. And for gold, we're up three dollars and
thirty cents an ounce to twenty five forty one and
ten cents. Anything else catching your eye in markets today, Michael, No, sir, Okay,
(02:58):
let's move on to this piece from the Final Ancial Times.
It's titled US housing crisis becomes a critical issue in
the presidential election, and what it's talking about is that
you still don't have good supply of homes in most
parts of the country, while some parts have recovered to
pre pandemic levels.
Speaker 3 (03:16):
You have other parts that are still well below those peaks.
Speaker 2 (03:19):
And even when we're talking about pre pandemic levels, we
still had cases, you know, throughout much of you know,
twenty eighteen nineteen where it was, Hey, homes are still
too expensive and there aren't enough for us to be
able to buy in order to get prices to where
we want. And so how can we improve the housing situation?
Speaker 3 (03:37):
Michael?
Speaker 2 (03:37):
What what can we actually do? Let's again, because this
is referencing the presidential election. If you were elected president, Mike,
and you were given unlimited power to you know, improve
home affordability, aside from directly setting the prices that homes
could be sold at, what tools would you use to
(04:00):
help make housing more affordable?
Speaker 4 (04:04):
Does it all have to be popular?
Speaker 3 (04:07):
No, it can be really unpopular.
Speaker 4 (04:08):
Yeah.
Speaker 5 (04:09):
I would lower some tariffs on cheap imported goods that
we can use to construct housing from China as well
as Canada, and then I would rest away a whole
bunch of control of local zoning boards somehow, probably with
a carrot and stick approach. In terms of hey, either
(04:30):
zone a bunch of places locally for more dense housing,
or you lose this type of funding or if you do,
you get this type of funding. That would probably be
my approach rather than more regulation put into place.
Speaker 2 (04:45):
So I have an interesting one that I haven't really
gamed up, but I just started thinking about what I
would do as I as I looked at this this morning,
and so there's a decent chance that I'm about to
say is really dumb.
Speaker 4 (04:57):
Okay, I like it.
Speaker 2 (05:00):
I would completely get rid of the mortgage interest deduction,
which I know everyone who owns a home just turned
us off. But that's fine because here's the other piece.
What I would do with all that money that we
basically because remember the mortgage interest deduction, it sounds like
a tax credit, it's really the federal government is paying
you to own your home.
Speaker 4 (05:20):
Yeah.
Speaker 5 (05:21):
And furthermore, i'd be interested in how much is still
received on that, because I've got to imagine fifteen to
twenty percent of filers actually take it.
Speaker 2 (05:31):
In any case, Yeah, I would get rid of that
and say, let me see how much money that is
each year.
Speaker 3 (05:38):
It is Let's see.
Speaker 2 (05:41):
Yeah, I can't figure out aggregate numbers, but here's what
I would do. I think we can agree that there
are two main problems. We're not building enough homes than
the ones that we're building are too expensive.
Speaker 5 (05:51):
Right, I'm more focused on the first one. I don't
really think the second one is the cause of the problem.
I think it's just a result of some of the conditions. Well,
I'm going to try to kill two birds with one stone.
Speaker 4 (06:02):
Okay.
Speaker 2 (06:03):
What I would do with the money that I say
from the mortgage interest deduction is I would create a
new incentive for builders. And the incentive is very simple.
If you build more homes next year than you did
this year, and those homes are priced below the median
home price for your ac count for the county that
you're building them, you get a deduction worth whatever that
(06:27):
difference is. So you're incentivizing more homes to be built
at cheaper than the median cost that they were sold
out the year before. Okay, and the federal government will
pay that to make those homes cheaper. I have no
idea if it'll actually work. It's probably really dumb, so
but I'm not gonna call it really dumb.
Speaker 5 (06:48):
But here are some of the ramifications that I think of. Yeah,
builders are now incentivized to build let me just call
it crappier homes because is one way to get the
median price down is to build a lower quality property
using poor materials.
Speaker 2 (07:06):
And it's still as inspections true, Like it's I'm not
saying like, let's wait, you know, I'm not saying, hey,
get rid of all your inspections and permits and this
and that.
Speaker 5 (07:15):
I'm just saying, you have to build more cheaply. Your
method would be less extreme than mine and more have
to do it.
Speaker 2 (07:24):
Remember, you can still build a home that's more expensive.
You just don't get my super duper tax deduction for
you as the company.
Speaker 5 (07:31):
Yeah, to me, I don't know how. I still don't
know how you do this without having, you know, people
with pitchforks walking down the street to DC. But you
know the I was talking to somebody the other day
who lives in a tiny town called Kensington, New Hampshire.
The minimum building lot size in this part of Kensing
(07:52):
in New Hampshire, which I haven't verified. I was talking
to them a two acre minimum build lot in southern
New Hampshire where demand is through the roof. Well, I
don't I don't like again, I just I think that
that that fact that that law can even exist is
just kind of preposterous.
Speaker 2 (08:09):
I don't know that that's necessarily the problem. Like small
towns that are not building enough are not where the
issue is, you know, like that there's a reason why
they're still small, and it's not just because they have
a two acre minimum lot size. The issue is, Hey,
the place is where people want like the people. The
(08:32):
issue was like places where like thousands of people want
to live are only allowing single family construction.
Speaker 5 (08:39):
Right, But that's the same story. I mean, what's true
in Kensing, Kensington, New Hampshire is also true in Needham, Massachusetts.
Maybe not with a two acre lot size, but like,
show me a map of Needham, Wellesley and several other
towns around one twenty eight that allow you know, show
me the map of how many of those areas in
(08:59):
those towns all out for multi family construction, and I
would imagine it is a very small portion of those towns.
And that's my concern about tax credit to builders is
if ultimately the laws in those local communities don't allow
for cheap construction, then it won't get done.
Speaker 2 (09:18):
Well, I'm looking at Kensington just because you brought it
up right now, there's six hundred and seventy two housing
units in Kensington right now.
Speaker 4 (09:27):
Like Kensington's not going to change the world.
Speaker 3 (09:30):
This is where I'm going.
Speaker 2 (09:31):
Like the places that I want to make it easier
to build are the places like stuff that is single
family only suburban that just by adding duplexes you double
the density and you get more banks for your buck.
Because even if we like completely double the density of Kensington,
(09:51):
we get an extra two thousand people housed. If we
take all the suburbs of Boston, all the suburbs of
New York, all the suburbs of in San Francisco and
say hey, this is no longer single family only as
the default, we get hundreds of thousands of people.
Speaker 3 (10:08):
Right. It can be housed.
Speaker 4 (10:09):
Right.
Speaker 5 (10:09):
So the question is how do you do that? Because
that makes anyone happy? Because Massachusetts is trying it right
now and they people are revolting. And I think that's
what it comes down to is people say that they
want cheap housing.
Speaker 4 (10:24):
They don't.
Speaker 5 (10:25):
I'm telling you that they they genuinely do not want
that because they they finally get to understand what it means,
and what it means is more neighbors and the value
of your home goes down.
Speaker 4 (10:38):
That's what it means.
Speaker 2 (10:39):
It does Yeah, it's look at like most things in life.
If we really like if homeowners, because again it's it's
homeowners that that matter on this because ultimately they're the
ones that are already in the communities that are voting.
If they said, hey, we want cheap housing here, it
would be there right. Instead they're saying, no, we don't
want additional housing here. Yeah, and I guess, look, I
(11:04):
don't have a great answer on how you necessarily do this.
Speaker 5 (11:09):
It's it's going to be vastly unpopular. And I think
that's the answer is you do have to go with
a carot and a stick approach. You have to say
there's going to be tax incentives for towns that go
do this, and if they don't, then they're going to
be pretty stiff penalties. And so far the penalty part
has not been willing to happen, at least here in Massachusetts.
Speaker 3 (11:27):
The other place is really.
Speaker 4 (11:28):
Tough to do.
Speaker 2 (11:29):
The other place that I would go on this is
especially and I'm just looking at this from a demographic
perspective as well. You gotta like, how many baby boomers
do you talk to who are like, I love to downsize,
but I can't find anything that's worth my money to
downsize too.
Speaker 4 (11:45):
Yeah, there's a lot of them where.
Speaker 2 (11:46):
It's like, hey, I'm trying to sell a four bedroom
place because the kids are out of the house. Hey
I found a two bed, but it's the same cost
as my fore bed.
Speaker 3 (11:54):
Yeah.
Speaker 5 (11:55):
Now, sometimes I think that decision making process is flawed
because they ignore the fact that their costs there run
costs are going to be vastly lower. But nonetheless that's
a fair argument.
Speaker 2 (12:05):
I think for towns that are trying to figure this
out on a town by town basis. The additional construction
of senior housing, be it town homes, you know, single
family just densely packed stuff, it's a slam dunk in
my opinion, because also, here's the thing you gotta remember
about senior housing.
Speaker 3 (12:20):
You're not paying for more kids in the.
Speaker 4 (12:22):
Schools, right, Yeah, it's a easier investment.
Speaker 3 (12:28):
It would seem to me to be a slam dunk
as well.
Speaker 2 (12:31):
So now you've listened to Mike and I talk about
very unpopular things related to housing for the last fifteen minutes,
you can, now, you know, kind of disregard that because
neither Mike nor I are running for public office, and
if we did that would be replayed over and over
as a reason why we are unfit for public office
because no one would like us. Correct, right, Yeah, Okay, Okay,
We're gonna take a break, do some trivia, and then
(12:53):
talk more about housing.
Speaker 3 (12:54):
Is it gonna be in a way that makes people
like us or not? Probably not? Okay, we'll do hate
on by Hip Chuck right after this.
Speaker 1 (13:04):
Tune in for trivia brought to you by Applebee's every
day at eleven twenty. For your chance to win cool prizes.
Text us at six one seven three six two one
three eighty five and use keyword Applebee's. Complete rules are
available at Financial Exchange show dot com. This is the
Financial Exchange Radio Network. The Financial Exchange streams live on YouTube.
(13:25):
Like our page and stay up to date on breaking
business news all morning long. This is the Financial Exchange
Radio Network.
Speaker 3 (13:33):
Mike, what else do you want to talk about on housing?
Speaker 5 (13:35):
So before, I mean, last time we talked about our
our way of solving housing, I think we should talk
about the two candidates running for presidents and.
Speaker 4 (13:43):
What they are proposing. I haven't correct me if I'm wrong.
Speaker 5 (13:46):
I haven't heard much of anything from the Trump campaign
in terms of their plans to deal with expensive housing.
I don't think it's been a big campaign item, but
it might be on one I don't think I've seen
anything specific from them. No, so let's talk about the
one from the Harris campaign instead. Then, because they have
come out with specifics. First, they want to unveil a
(14:07):
tax credit of up to twenty five thousand dollars for
first time home buyers. Second, they want to propose tax
breaks for home builders to build starter homes, so unclear
what that would mean, but something similar to what Chuck
had talked about before there. And then third would be
a crackdown on unfair practices by corporate landlords. So let's
(14:28):
run through these one by one. First, twenty five thousand
dollars credit to first time home buyers does make housing
more affordable for first time home buyers, but does not
make houses cheaper. Let's be really clear about that. What
you are doing as stimulating you may make them more expensive. Right,
You are stimulating demand. We've seen what happens to prices
when you stimulate demand.
Speaker 4 (14:49):
They go up.
Speaker 5 (14:50):
Tax breaks for home builders to build starter homes again,
lot of stuff to be figured out in the weeds
in terms of what that means and is it a
big enough tax incentive to cause them to build starter homes?
As well as how are you going to pay for it?
Is a big question that I have. The third one
just I have no idea what that means. And crack
down and unfair practices by corporate landlords. I don't know
(15:13):
what the unfair practices are to start with, and I
don't really understand how the federal government is going to
craft legislation to regulate it.
Speaker 3 (15:22):
Yeah, I would agree.
Speaker 2 (15:23):
Look that I've talked an awful lot about at the
federal level, any level of government. The places where you
should be taking actions are in places where there is
no solution that individuals can can come to on their own.
And so when we talk about, hey, they're unfair practices
(15:44):
by corporate landlords, well what are those practices and are
they actually the reason why the rent is too damn high?
Speaker 3 (15:52):
Right?
Speaker 2 (15:53):
And I'll be the first tell you I don't know
what we're talking about here. So it may be that
there are problems that maybe that aren't. But just saying
you know, buzzwords that are you know, hey, these are
unfair and you know you mentioned the word corporate anything
and everyone you know, gets all up in arms.
Speaker 4 (16:10):
You've got people's blood pressure growing up.
Speaker 5 (16:12):
When you say crack down unfair practices corporate and landlords.
Those are some buzzwords if I've heard them, but I
don't think there's anything really behind it. You know, it's
a good way to get corporate landlords to crack down
unfair practices, make them compete more, build more housing so
that there's more competition for where people live.
Speaker 3 (16:28):
Look, yeah, ultimately this boils down to one thing. We
need to find ways to build more housing where people
want to live, and the single biggest lever that you
can pull there is making it cheaper to do so
and enabling the construction of more varied types of housing,
not just single family.
Speaker 5 (16:44):
So I'll be happy to review politicians proposals for housing
as they come out. But you know, two out of
the three from the Harris campaign that I've heard so
far seem a bit don't really hit well. One of
them's nonsensical and the second one that I'm meant and again,
you're increasing the price of housing for anyone but a
(17:05):
home first time home buyer, So I don't think that
really solves the problem. The second one we'll see that
could be interesting to me. But again, I think far
too much gets talked about on the campaign trail that
has no actual way of being funded, and that hasn't
stopped us from passing legislation in the past, I suppose,
But I would hope that we're a little bit care
a little bit more about that type of thing of
(17:26):
where you're going to pay for some of this stuff.
Speaker 2 (17:28):
Taking a look at markets as we head toward the
bottom of the hour, the Down now up one hundred
and ninety eight points, the S and P up twenty three,
the Nasdaq up seventy one. So you still have a
broad based rally taking place today, and interestingly taking place
mostly in places other than tech. Apple selling off a
little bit, Microsoft selling off a little bit, So even
(17:48):
with those two companies sliding just a touch, you still
have the S and P five hundred moving up almost
half a percent today.
Speaker 1 (17:57):
Bringing the latest financial news straight to your radio every day,
It's the Financial Exchange on the Financial Exchange Radio Network.
Missed one of our shows. Catch up anytime by asking
your Alexis smart speaker to play the Financial Exchange. This
is the Financial Exchange Radio Network.
Speaker 2 (18:17):
Mike, there's a piece in CMBC today, it's told how
to position yourself to benefit from the Fed's first rate
cut in years.
Speaker 3 (18:25):
Wooo, what should one do well?
Speaker 5 (18:29):
First thing that one should do is recognize that when
the FED cuts interest rates, it's going to impact very
few of the interest rates that you average Americans see.
I think that's step number one is don't set your
expectations to high, because when the FED cuts rates, the
only thing that you're likely to experience is that the
rate on your savings account or money market comes down
(18:51):
a likely quarter of a percent to half a percent.
It's not going to change the rate that you look
at for a new mortgage.
Speaker 4 (18:59):
It's not going to change an auto loan rate.
Speaker 5 (19:02):
Those are already baked in because those are market interest
rates that are already being forecasted to move. So I
think that's an important, very common misunderstanding. I guess I
would talk about the mistakes that I see about interest rates,
or potential mistakes that I'm seeing in regard to interest
rates these days.
Speaker 4 (19:19):
One would be focusing.
Speaker 5 (19:21):
All of your savings on the shortest term interest rate,
which offers the highest possible rate. So you play out
an example here, a one year CD or even a
six month CD is paying a higher interest rate today
than a three year CD. The problem is if I
lock all my money in for six months and then
I revisit that six months later and rates are below
(19:43):
where I had the three year CD on, then hypothetically
that was a really bad money move, right. I might
have been better off saying, hey, let's take that three
years even though it's a lower rate today, in order
to make sure that I'm not going to be subject
to the whims of the Federal Reserve and what they
do over the next six months. What else are you
seeing out there in terms of I mean, the pieces
that CNBC points out, I don't find they're generally good
(20:08):
advice for any points in time, not just when the
Fed's about to cut rates. Like pay down your credit
card debt. Yeah, well, of course you should definitely do that,
and you should do it before you start saving money
in a CD. But I don't think you should do
that because the Fed's cutting rates in September.
Speaker 2 (20:20):
Yeah, and some of this also, you know they mentioned okay,
you know, get your credit score better so you can
get lower interest rates.
Speaker 4 (20:26):
Anyways, again, always get your credit card score better.
Speaker 5 (20:29):
It will always help you if you can go ahead
and do that, But that's not exactly a things to
do as we head into a rate cutting session. One
of the other I'll mention another you know, quasi mistake
that I see frequently. And this one's tricky because it
has been almost gospel from a lot of our parents
in terms of their mortgage. So, hey, make an extra
payment on your mortgage per year, and look how much
(20:51):
faster you'll pay it off. I would actually argue that
right now, for a lot of Americans, let's say you've
got like a three percent mortgage rate, stopping those extra
payments and putting that money elsewhere can be a much
more successful strategy.
Speaker 3 (21:04):
Yeah, it's a case of on that one.
Speaker 2 (21:09):
If your mortgage rate is fixed at three percent, and
you're saying, hey, I could take you know, the extra
and I've got you know, I can put that in
a CD that gets me five percent over you know,
X period of time. Okay, yep, the dollars can you know,
potentially make sense there. The thing that you do have
to be careful about on any of this is, hey,
when again, there are a lot of Americans that have,
(21:31):
you know, a three percent mortgage, but there are plenty
of others where it's four and a half percent, and
then you know, the alternative that they're moving that money
into is you know, just above or they're like, well,
I can you know, I've borrowed it five percent and
I think I can get more in the stock market
in the long term, And the answer is you might.
But it also becomes dangerous then because the stock market
(21:53):
can also lose money. And if you abandon hope, you know,
the second you have a daylight last two month days ago, well,
now you've not made that payment on something that you
know had a fixed interest rate. You're paying and you
didn't earn the return you were expecting, and now you're
even you.
Speaker 3 (22:09):
Know, worse. So you just have to be careful on this.
Speaker 2 (22:12):
And as Mike said that the big thing with the
Federal Reserve when they cut interest rates, it's not like
they control every interest rate. They're just cutting their short
term rate. And other interest rates are impacted in different
ways depending on you know, how long term they are,
whether it's a loan from a bank, whether it's you know,
from the government on a credit card, like, they're all
(22:33):
different impacts and you need to make sure you understand
how your different rates may move based on what the
FED does.
Speaker 5 (22:40):
Big takeaway for me for the first time in multiple decades,
you have an opportunity to take advantage of higher rates
if you are a saver and according to the FDI
see the average interest rate being paid on a savings
account is zero point four five percent. If you're finding
yourself in a position where you are, you know, sticking
(23:00):
to the gospel of making that extra mortgage payment and
you're not sure if it still makes sense, or sitting
on extra cash and not sure how you should be
investing it, or you know, trying to decipher do I
pay down this debt or do I save? What's the
best next step. I'm trying to make it all work
within the confines of my personal situation.
Speaker 4 (23:18):
We'd love to talk to you here at the.
Speaker 5 (23:19):
Armstrong Advisory Group and help you evaluate that process because
it is tricky and like I said, I see mistakes
on it all the time. Once a week at least,
I see something that I'd say, you know, that's fine,
but have you thought about doing this instead and how
much more it could be earning you.
Speaker 4 (23:35):
If you are having or.
Speaker 5 (23:36):
Facing those types of decisions and you're having a tough
time figuring out what is best for you. Give the
folks at Armstrong Advisory Group a call. Let us help
you guide through that process and fit it into the
overall financial plan that you're trying to develop for yourself.
Give us a ring at eight hundred three nine three
four zero zero one, where a team of financial advisors
and investment professionals that provide fiduciary investment advice to our
(23:59):
client alongside a financial planning process to inform and understand
how those investments are going to contribute to that.
Speaker 4 (24:06):
Long term plan.
Speaker 5 (24:07):
Once again, the number for the Armstrong Advisor Group for
your free consultation is eight hundred three nine three four
zero zero one.
Speaker 1 (24:15):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (24:32):
Mike, there's a piece in Bloomberg titled Wall Street wants
more signs us consumers are still spending, so kind of
echoes what we were talking about the end of last week,
which is, hey, we got a week or so of
you know, improved data that suggests things were not as
bad as we thought they were at the beginning of
the month. But we need more signs than that. We
can't just have one good week.
Speaker 5 (24:51):
Yeah, I mean, furthermore, right, Walmart had a pretty solid quarter,
and that was a lot of what markets focused on.
That could that hey, you know, people are spending again.
They're buying grills again, they're buying stuff that might have
worn out from the big spend in twenty twenty. It
could also mean that people are so worried about their
budgets that they are all flocking to Walmart instead of
(25:12):
shopping at true TJX or home Depot or Target. And
you know, focusing on what's generally considered to be the
lowest cost retailer out there, in which case maybe not
the same conclusion about the state of the overall economy. So,
you know, Walmart is important, the largest retailer in the
country and many largest employer in the country, one of
the largest retailers, if not the largest retailer, But how
(25:35):
these other companies are doing is also important and probably
more indicative of you know, discretionary type spending, because Walmart
themselves has pointed out that a lot of their growth
has been in grocery, which.
Speaker 4 (25:46):
Is not exactly discretionary.
Speaker 5 (25:48):
In fact, to me, would indicate, Hey, consumers are nervous
about their wallets and they're going to the cheapest grocery
store they can find.
Speaker 3 (25:54):
Right.
Speaker 2 (25:55):
So this week you've got Lows reporting tomorrow, TJX and
Target reporting on Wednesday. Thursday, Ross Stores is reporting. I
know they're not huge up here in the Northeast, but
big regional retailer down in the southeast. Dollar Tree in
Burlington also report on Thursday, BJ's as well, So I mean,
you've just got them all stacked up. Actually, even on Wednesday,
(26:17):
some smaller ones Macy's reports I guess still sure them listen.
So the interesting thing about Macy's they still do five
billion dollars a.
Speaker 3 (26:26):
Quarter in revenue.
Speaker 2 (26:27):
Yeah, they don't make a ton of money on it,
but they're they're there. Let's see Urban Outfitters who is
still around, I guess, And those are the big retailers
this week, and then remember next week to finish up
earnings for the quarter. Wednesday, we got Nvidia and Salesforce.
So still a couple of big guys on the tech
side next week. I know that's not really important to
(26:49):
the retail picture, but as far as earning, still a
couple big ones yet to come. Here to take a
quick break, and when we I'm back, we'll do a
little bit of stack roulette.
Speaker 1 (27:03):
The Financial Exchange Show podcast drops every day on Apple, Spotify,
and iHeartRadio. Hit that subscribe button and leave us a
five star review. You're listening to the Financial Exchange Radio Network.
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
caught up on anything and everything you might have missed.
(27:25):
This is the Financial Exchange Radio Network.
Speaker 6 (27:30):
This segment of The Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
The US Virgin Islands of Saint Croix, Saint Thomas, and
Saint John enjoy perfect weather, world class dining, and incredible beaches,
as well as a vibrant nightlife. Head to visit USVII
dot com. Book your trip today, no passports needed and
no money to exchange. Take your next vacation in America's
(27:53):
Caribbean paradise. The United States Virgin Islands. Go to visit
USVII dot com to book your trip.
Speaker 3 (27:58):
That's visit US all right, Mike, do you mind if
I kick things off here for snack?
Speaker 2 (28:04):
Roulett please do, Charles, I'd like to talk about drones
because Tucker just knows how to get me going on this.
So there's a piece in CNBC. It's titled Amazon's troubled
drone delivery program faces latest challenge in Texas annoyed residents
And this is exactly my nightmare. When we talk about
(28:27):
drone delivery of packages. Everyone's like, oh, it'll get you know,
all the trucks off the street.
Speaker 3 (28:33):
Yeah, Like it's UPS trucks crowd in the street.
Speaker 2 (28:35):
When I'm on one twenty eight sitting in traffic in
the morning heading in, there's like one UPS truck and
then there's a bunch of us driving into work.
Speaker 3 (28:43):
So it's not the UPS trucks.
Speaker 2 (28:45):
Even Oh, like you're going through Boston, No, it's not
the one UPS truck. It's the eighty four door dash
bikes that are blocking stuff up. So like, let's let's
pump the brakes here. But here's what they're talking about doing.
There's a proposal from Amazon to the FAA to the
company in this area in College Station, Texas right around
Texas A and M to increase deliveries to four hundred
(29:08):
and sixty nine flights per day, up from its current
level of two hundred flights a day, so more than doubling.
They also want to expand the hours to instead of
being limited just to daylight between seven am and ten pm,
and expanding its delivery area by four times. So basically,
we're going to be taking way more packages, way more
(29:29):
mileage in the air. And the city manager of College
Station actually said that city officials ran tests of the
prime Are drones and found that they had noise levels
between forty seven and sixty one decibels. Now, to put
this in perspective again, when you're trying to figure out
(29:50):
like what that means and what it equates to, it's
not as loud as things such as you know, chainsaws,
which are at one hundred and twenty five day and
you know heavy equipment at one hundred and ten.
Speaker 4 (30:06):
Is that on your house?
Speaker 3 (30:07):
Oh it's it's it's.
Speaker 2 (30:08):
Oh my goodness, it's it's it's right there right now
right imagine having that going on. Do they come with
the music. Do they play Right of the Valkyries when
they're delivering?
Speaker 3 (30:23):
I think so, yeah, that would be uh, that would
be something.
Speaker 2 (30:28):
But this is all Amazon saying, hey, we're trying to
make our delivery more efficient and in return making the
quality of life for us not great. And this is
before you even get into hey, this is for you know,
four hundred and sixty nine flights a day, which is
a drop in the bucket in terms of how many
(30:48):
deliveries Amazon makes. To actually make a dent, you need
to get to like thousands an hour. In terms of
you know, metro areas like the Boston area, the New
York area, they don't get four hundred sixty nine packages
a day. They get thousands. And so this, in my opinion,
is my nightmare is a bunch of drones just flying
(31:10):
through the air dropping packages, willy nilly and no thank you.
I'll deal with the traffic. I'll sit and I'll listen
to something and I'll figure it out. Because I said this,
do this from the beginning.
Speaker 5 (31:22):
My concern is really not about this happening, because it
just even learning everything we have, it just seems like
the most impractical solution to the problem. It just seems
completely inefficient to me. I don't think it's going to
get that much traction because I don't know how you
make this work efficiently. So we will see where it goes.
But Chuck is immensely concerned about it. Obviously, I want
(31:43):
to talk about I won't talk about realtor commissions. Fine,
I was going to go that direction, but we'll save
that for another day. There's a wrongful death suit being
filed against Disney. So pretty tragic thing that happened. Somebody
was at a Walt Disney parking resort. Now to be clear, here,
they were at a restaurant that was within Disney Springs,
(32:07):
which is an outdoor dining and shopping and entertainment complex
that's owned by Disney. But the restaurant they were dining
at was not a Disney owned restaurant. Just to be
very clear about that. The waiters were not Disney employees.
This was not the I'm on a Disney property and
I'm going to a Disney restaurant that That was not.
Speaker 4 (32:22):
The case here.
Speaker 5 (32:23):
Nonetheless, they advertised themselves as an allergy friendly restaurant. The
person involved made it really clear that he had a
nut and dairy allergy. Was clearly allegedly served nuts and
dairy and died about you know, an hour later as
a result of the allergy, which is horrifying. You know,
got a family, It's awful. He then filed suit against
(32:47):
the restaurant as well as the owner of the property,
which is Disney. Disney has come back and said, hold
on a second, before you sue us, we need to
bring up the fact that one point you signed up
for a free trial of Disney Plus streaming service, and
when you did that, you agreed to solve any of
(33:12):
our disputes via arbitration instead of a lawsuit. And so
you know, not only hey, we're sorry that you know
you have to deal with the loss of your family,
but because you signed up for a completely unrelated service
that had nothing to do with this property that we own,
you can't sue us because of that.
Speaker 4 (33:32):
So a couple things here.
Speaker 5 (33:33):
One, he might not have any grounds to sue Disney
in the first place, they didn't operate the restaurant, They
didn't have any involvement whatsoever in this guy's passing. But
the fact that by having subscribed to a Disney streaming service,
I am now somehow waiving any right that I have
to fight Disney in the future. I mean, I guess
(33:56):
all of us beware about the tentacles of all these
companies and how.
Speaker 4 (34:00):
Far they reach.
Speaker 5 (34:01):
But that seems to me to be completely unrelated and arbitrary.
I'm trying to think of like and kind of disgusting
to be honest too.
Speaker 3 (34:13):
But yeah, it's.
Speaker 2 (34:14):
I'm trying to think of the right word to use,
and disgusting is probably the right one.
Speaker 3 (34:20):
You know. Again, I get that in lawsuits, lawyers will
do this and do that.
Speaker 5 (34:25):
But like, get the suit thrown out because Disney didn't
have anything to do with his passage.
Speaker 4 (34:30):
That's true.
Speaker 2 (34:31):
Sure, we don't operate the restaurant, We have nothing to
do with it. Yeah, okay, like reason reasonable. Fine, you
have to sue the actual restaurant, totally get it. Hey,
you can't sue us because you had a Disney Plus
subscription on a trial four years ago.
Speaker 5 (34:47):
Kind of appalling, I mean, and dystopian too, right, It's just.
Speaker 2 (34:55):
There are no humans in the lawyer's department. It's all
artificial intelligence or no intelligence.
Speaker 5 (35:05):
Yeah, So I don't know what to do about all that,
because you know, now you probably just can't sue anybody
if you've agreed to any of these things. But yeah,
that that's distasteful at best.
Speaker 3 (35:19):
Yeah, it's uh, it's just it's it's brutal.
Speaker 2 (35:22):
Like I, I'm pretty upset right now, and that's all
I have to say about that.
Speaker 3 (35:28):
Uh.
Speaker 2 (35:28):
Taking a look at markets, the Dow is up one
hundred and ninety one points, the S and P's up
twenty five, the Nasdaq up eighty.
Speaker 3 (35:35):
We are all done for the day.
Speaker 2 (35:37):
We're uh, we're gonna call it a day and go
do our thing, and hey, don't worry, we'll be back tomorrow.
We've got more financial exchange coming up, so tune in
and we'll have a whole full show with more on
the FEDS Jackson Hole meeting tomorrow
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is The Financial
Exchange with Chuck Zada and Mike Armstrong, your exclusive look
at business and financial news affecting your day, your city,
(00:42):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a pround partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting DAV five k dot com Boston and
making a donation today. The DAV five K Boston is
(01:04):
presented by Veterans Development Corporation. This is the Financial Exchange
with Chuck Zada and Mike Armstrong.
Speaker 2 (01:12):
It is Chuck, Mike and Tucker with you here and
as we kick off Jackson whole week for the Federal Reserve.
Markets have a nice little floatiness to them. I think
that's the technical term here. The Dow is up one
hundred and ninety seven points, the S and P is
up twenty three points, and the Nasdaq up seventy points.
Speaker 3 (01:31):
So the S and P five hundred right.
Speaker 2 (01:33):
Now, by the way, for you know, all of the
doomers from two mondays ago is now less than one
point six percent away from its all time high. Doesn't
mean that it won't go down from here, but it
does mean that, Sorry, Jeremy Siegel, we didn't need an
emergency seventy five basis point cut two weeks ago today,
(01:57):
And I'm sorry, I'm just gonna kind of found the
table on this one for a little while. And look,
when when the day comes when you know I'm wrong,
which will probably be tomorrow, then you know, all you
listening can be like, Chuck, what the heck's wrong with you?
Speaker 3 (02:11):
And that's fine, that's that's that's what we do here.
Speaker 2 (02:15):
Bonds the tenuere US Treasury is down one point seven
basis points to three point eight seven five percent. Oil
West Text Intermedia down forty eight cents to seventy six
seventeen per barrel, Triple A national average for gas prices
sliding again another three tenths of ascent to three forty
one and one tenth of ascent nationally, So down about
(02:36):
ten cents over the last month. Now on the triple
A national average for gas prices, we'll see if we
have any further momentum there, but I suspect we're stalling
out somewhere soon as far as how much lower we
can go. And for gold, we're up three dollars and
thirty cents an ounce to twenty five forty one and
ten cents. Anything else catching your eye in markets today, Michael, No, sir, Okay,
(02:58):
let's move on to this piece from the Final Ancial Times.
It's titled US housing crisis becomes a critical issue in
the presidential election, and what it's talking about is that
you still don't have good supply of homes in most
parts of the country, while some parts have recovered to
pre pandemic levels.
Speaker 3 (03:16):
You have other parts that are still well below those peaks.
Speaker 2 (03:19):
And even when we're talking about pre pandemic levels, we
still had cases, you know, throughout much of you know,
twenty eighteen nineteen where it was, Hey, homes are still
too expensive and there aren't enough for us to be
able to buy in order to get prices to where
we want. And so how can we improve the housing situation?
Speaker 3 (03:37):
Michael?
Speaker 2 (03:37):
What what can we actually do? Let's again, because this
is referencing the presidential election. If you were elected president, Mike,
and you were given unlimited power to you know, improve
home affordability, aside from directly setting the prices that homes
could be sold at, what tools would you use to
(04:00):
help make housing more affordable?
Speaker 4 (04:04):
Does it all have to be popular?
Speaker 3 (04:07):
No, it can be really unpopular.
Speaker 4 (04:08):
Yeah.
Speaker 5 (04:09):
I would lower some tariffs on cheap imported goods that
we can use to construct housing from China as well
as Canada, and then I would rest away a whole
bunch of control of local zoning boards somehow, probably with
a carrot and stick approach. In terms of hey, either
(04:30):
zone a bunch of places locally for more dense housing,
or you lose this type of funding or if you do,
you get this type of funding. That would probably be
my approach rather than more regulation put into place.
Speaker 2 (04:45):
So I have an interesting one that I haven't really
gamed up, but I just started thinking about what I
would do as I as I looked at this this morning,
and so there's a decent chance that I'm about to
say is really dumb.
Speaker 4 (04:57):
Okay, I like it.
Speaker 2 (05:00):
I would completely get rid of the mortgage interest deduction,
which I know everyone who owns a home just turned
us off. But that's fine because here's the other piece.
What I would do with all that money that we
basically because remember the mortgage interest deduction, it sounds like
a tax credit, it's really the federal government is paying
you to own your home.
Speaker 4 (05:20):
Yeah.
Speaker 5 (05:21):
And furthermore, i'd be interested in how much is still
received on that, because I've got to imagine fifteen to
twenty percent of filers actually take it.
Speaker 2 (05:31):
In any case, Yeah, I would get rid of that
and say, let me see how much money that is
each year.
Speaker 3 (05:38):
It is Let's see.
Speaker 2 (05:41):
Yeah, I can't figure out aggregate numbers, but here's what
I would do. I think we can agree that there
are two main problems. We're not building enough homes than
the ones that we're building are too expensive.
Speaker 5 (05:51):
Right, I'm more focused on the first one. I don't
really think the second one is the cause of the problem.
I think it's just a result of some of the conditions. Well,
I'm going to try to kill two birds with one stone.
Speaker 4 (06:02):
Okay.
Speaker 2 (06:03):
What I would do with the money that I say
from the mortgage interest deduction is I would create a
new incentive for builders. And the incentive is very simple.
If you build more homes next year than you did
this year, and those homes are priced below the median
home price for your ac count for the county that
you're building them, you get a deduction worth whatever that
(06:27):
difference is. So you're incentivizing more homes to be built
at cheaper than the median cost that they were sold
out the year before. Okay, and the federal government will
pay that to make those homes cheaper. I have no
idea if it'll actually work. It's probably really dumb, so
but I'm not gonna call it really dumb.
Speaker 5 (06:48):
But here are some of the ramifications that I think of. Yeah,
builders are now incentivized to build let me just call
it crappier homes because is one way to get the
median price down is to build a lower quality property
using poor materials.
Speaker 2 (07:06):
And it's still as inspections true, Like it's I'm not
saying like, let's wait, you know, I'm not saying, hey,
get rid of all your inspections and permits and this
and that.
Speaker 5 (07:15):
I'm just saying, you have to build more cheaply. Your
method would be less extreme than mine and more have
to do it.
Speaker 2 (07:24):
Remember, you can still build a home that's more expensive.
You just don't get my super duper tax deduction for
you as the company.
Speaker 5 (07:31):
Yeah, to me, I don't know how. I still don't
know how you do this without having, you know, people
with pitchforks walking down the street to DC. But you
know the I was talking to somebody the other day
who lives in a tiny town called Kensington, New Hampshire.
The minimum building lot size in this part of Kensing
(07:52):
in New Hampshire, which I haven't verified. I was talking
to them a two acre minimum build lot in southern
New Hampshire where demand is through the roof. Well, I
don't I don't like again, I just I think that
that that fact that that law can even exist is
just kind of preposterous.
Speaker 2 (08:09):
I don't know that that's necessarily the problem. Like small
towns that are not building enough are not where the
issue is, you know, like that there's a reason why
they're still small, and it's not just because they have
a two acre minimum lot size. The issue is, Hey,
the place is where people want like the people. The
(08:32):
issue was like places where like thousands of people want
to live are only allowing single family construction.
Speaker 5 (08:39):
Right, But that's the same story. I mean, what's true
in Kensing, Kensington, New Hampshire is also true in Needham, Massachusetts.
Maybe not with a two acre lot size, but like,
show me a map of Needham, Wellesley and several other
towns around one twenty eight that allow you know, show
me the map of how many of those areas in
(08:59):
those towns all out for multi family construction, and I
would imagine it is a very small portion of those towns.
And that's my concern about tax credit to builders is
if ultimately the laws in those local communities don't allow
for cheap construction, then it won't get done.
Speaker 2 (09:18):
Well, I'm looking at Kensington just because you brought it
up right now, there's six hundred and seventy two housing
units in Kensington right now.
Speaker 4 (09:27):
Like Kensington's not going to change the world.
Speaker 3 (09:30):
This is where I'm going.
Speaker 2 (09:31):
Like the places that I want to make it easier
to build are the places like stuff that is single
family only suburban that just by adding duplexes you double
the density and you get more banks for your buck.
Because even if we like completely double the density of Kensington,
(09:51):
we get an extra two thousand people housed. If we
take all the suburbs of Boston, all the suburbs of
New York, all the suburbs of in San Francisco and
say hey, this is no longer single family only as
the default, we get hundreds of thousands of people.
Speaker 3 (10:08):
Right. It can be housed.
Speaker 4 (10:09):
Right.
Speaker 5 (10:09):
So the question is how do you do that? Because
that makes anyone happy? Because Massachusetts is trying it right
now and they people are revolting. And I think that's
what it comes down to is people say that they
want cheap housing.
Speaker 4 (10:24):
They don't.
Speaker 5 (10:25):
I'm telling you that they they genuinely do not want
that because they they finally get to understand what it means,
and what it means is more neighbors and the value
of your home goes down.
Speaker 4 (10:38):
That's what it means.
Speaker 2 (10:39):
It does Yeah, it's look at like most things in life.
If we really like if homeowners, because again it's it's
homeowners that that matter on this because ultimately they're the
ones that are already in the communities that are voting.
If they said, hey, we want cheap housing here, it
would be there right. Instead they're saying, no, we don't
want additional housing here. Yeah, and I guess, look, I
(11:04):
don't have a great answer on how you necessarily do this.
Speaker 5 (11:09):
It's it's going to be vastly unpopular. And I think
that's the answer is you do have to go with
a carot and a stick approach. You have to say
there's going to be tax incentives for towns that go
do this, and if they don't, then they're going to
be pretty stiff penalties. And so far the penalty part
has not been willing to happen, at least here in Massachusetts.
Speaker 3 (11:27):
The other place is really.
Speaker 4 (11:28):
Tough to do.
Speaker 2 (11:29):
The other place that I would go on this is
especially and I'm just looking at this from a demographic
perspective as well. You gotta like, how many baby boomers
do you talk to who are like, I love to downsize,
but I can't find anything that's worth my money to
downsize too.
Speaker 4 (11:45):
Yeah, there's a lot of them where.
Speaker 2 (11:46):
It's like, hey, I'm trying to sell a four bedroom
place because the kids are out of the house. Hey
I found a two bed, but it's the same cost
as my fore bed.
Speaker 3 (11:54):
Yeah.
Speaker 5 (11:55):
Now, sometimes I think that decision making process is flawed
because they ignore the fact that their costs there run
costs are going to be vastly lower. But nonetheless that's
a fair argument.
Speaker 2 (12:05):
I think for towns that are trying to figure this
out on a town by town basis. The additional construction
of senior housing, be it town homes, you know, single
family just densely packed stuff, it's a slam dunk in
my opinion, because also, here's the thing you gotta remember
about senior housing.
Speaker 3 (12:20):
You're not paying for more kids in the.
Speaker 4 (12:22):
Schools, right, Yeah, it's a easier investment.
Speaker 3 (12:28):
It would seem to me to be a slam dunk
as well.
Speaker 2 (12:31):
So now you've listened to Mike and I talk about
very unpopular things related to housing for the last fifteen minutes,
you can, now, you know, kind of disregard that because
neither Mike nor I are running for public office, and
if we did that would be replayed over and over
as a reason why we are unfit for public office
because no one would like us. Correct, right, Yeah, Okay, Okay,
We're gonna take a break, do some trivia, and then
(12:53):
talk more about housing.
Speaker 3 (12:54):
Is it gonna be in a way that makes people
like us or not? Probably not? Okay, we'll do hate
on by Hip Chuck right after this.
Speaker 1 (13:04):
Tune in for trivia brought to you by Applebee's every
day at eleven twenty. For your chance to win cool prizes.
Text us at six one seven three six two one
three eighty five and use keyword Applebee's. Complete rules are
available at Financial Exchange show dot com. This is the
Financial Exchange Radio Network. The Financial Exchange streams live on YouTube.
(13:25):
Like our page and stay up to date on breaking
business news all morning long. This is the Financial Exchange
Radio Network.
Speaker 3 (13:33):
Mike, what else do you want to talk about on housing?
Speaker 5 (13:35):
So before, I mean, last time we talked about our
our way of solving housing, I think we should talk
about the two candidates running for presidents and.
Speaker 4 (13:43):
What they are proposing. I haven't correct me if I'm wrong.
Speaker 5 (13:46):
I haven't heard much of anything from the Trump campaign
in terms of their plans to deal with expensive housing.
I don't think it's been a big campaign item, but
it might be on one I don't think I've seen
anything specific from them. No, so let's talk about the
one from the Harris campaign instead. Then, because they have
come out with specifics. First, they want to unveil a
(14:07):
tax credit of up to twenty five thousand dollars for
first time home buyers. Second, they want to propose tax
breaks for home builders to build starter homes, so unclear
what that would mean, but something similar to what Chuck
had talked about before there. And then third would be
a crackdown on unfair practices by corporate landlords. So let's
(14:28):
run through these one by one. First, twenty five thousand
dollars credit to first time home buyers does make housing
more affordable for first time home buyers, but does not
make houses cheaper. Let's be really clear about that. What
you are doing as stimulating you may make them more expensive. Right,
You are stimulating demand. We've seen what happens to prices
when you stimulate demand.
Speaker 4 (14:49):
They go up.
Speaker 5 (14:50):
Tax breaks for home builders to build starter homes again,
lot of stuff to be figured out in the weeds
in terms of what that means and is it a
big enough tax incentive to cause them to build starter homes?
As well as how are you going to pay for it?
Is a big question that I have. The third one
just I have no idea what that means. And crack
down and unfair practices by corporate landlords. I don't know
(15:13):
what the unfair practices are to start with, and I
don't really understand how the federal government is going to
craft legislation to regulate it.
Speaker 3 (15:22):
Yeah, I would agree.
Speaker 2 (15:23):
Look that I've talked an awful lot about at the
federal level, any level of government. The places where you
should be taking actions are in places where there is
no solution that individuals can can come to on their own.
And so when we talk about, hey, they're unfair practices
(15:44):
by corporate landlords, well what are those practices and are
they actually the reason why the rent is too damn high?
Speaker 3 (15:52):
Right?
Speaker 2 (15:53):
And I'll be the first tell you I don't know
what we're talking about here. So it may be that
there are problems that maybe that aren't. But just saying
you know, buzzwords that are you know, hey, these are
unfair and you know you mentioned the word corporate anything
and everyone you know, gets all up in arms.
Speaker 4 (16:10):
You've got people's blood pressure growing up.
Speaker 5 (16:12):
When you say crack down unfair practices corporate and landlords.
Those are some buzzwords if I've heard them, but I
don't think there's anything really behind it. You know, it's
a good way to get corporate landlords to crack down
unfair practices, make them compete more, build more housing so
that there's more competition for where people live.
Speaker 3 (16:28):
Look, yeah, ultimately this boils down to one thing. We
need to find ways to build more housing where people
want to live, and the single biggest lever that you
can pull there is making it cheaper to do so
and enabling the construction of more varied types of housing,
not just single family.
Speaker 5 (16:44):
So I'll be happy to review politicians proposals for housing
as they come out. But you know, two out of
the three from the Harris campaign that I've heard so
far seem a bit don't really hit well. One of
them's nonsensical and the second one that I'm meant and again,
you're increasing the price of housing for anyone but a
(17:05):
home first time home buyer, So I don't think that
really solves the problem. The second one we'll see that
could be interesting to me. But again, I think far
too much gets talked about on the campaign trail that
has no actual way of being funded, and that hasn't
stopped us from passing legislation in the past, I suppose,
But I would hope that we're a little bit care
a little bit more about that type of thing of
(17:26):
where you're going to pay for some of this stuff.
Speaker 2 (17:28):
Taking a look at markets as we head toward the
bottom of the hour, the Down now up one hundred
and ninety eight points, the S and P up twenty three,
the Nasdaq up seventy one. So you still have a
broad based rally taking place today, and interestingly taking place
mostly in places other than tech. Apple selling off a
little bit, Microsoft selling off a little bit, So even
(17:48):
with those two companies sliding just a touch, you still
have the S and P five hundred moving up almost
half a percent today.
Speaker 1 (17:57):
Bringing the latest financial news straight to your radio every day,
It's the Financial Exchange on the Financial Exchange Radio Network.
Missed one of our shows. Catch up anytime by asking
your Alexis smart speaker to play the Financial Exchange. This
is the Financial Exchange Radio Network.
Speaker 2 (18:17):
Mike, there's a piece in CMBC today, it's told how
to position yourself to benefit from the Fed's first rate
cut in years.
Speaker 3 (18:25):
Wooo, what should one do well?
Speaker 5 (18:29):
First thing that one should do is recognize that when
the FED cuts interest rates, it's going to impact very
few of the interest rates that you average Americans see.
I think that's step number one is don't set your
expectations to high, because when the FED cuts rates, the
only thing that you're likely to experience is that the
rate on your savings account or money market comes down
(18:51):
a likely quarter of a percent to half a percent.
It's not going to change the rate that you look
at for a new mortgage.
Speaker 4 (18:59):
It's not going to change an auto loan rate.
Speaker 5 (19:02):
Those are already baked in because those are market interest
rates that are already being forecasted to move. So I
think that's an important, very common misunderstanding. I guess I
would talk about the mistakes that I see about interest rates,
or potential mistakes that I'm seeing in regard to interest
rates these days.
Speaker 4 (19:19):
One would be focusing.
Speaker 5 (19:21):
All of your savings on the shortest term interest rate,
which offers the highest possible rate. So you play out
an example here, a one year CD or even a
six month CD is paying a higher interest rate today
than a three year CD. The problem is if I
lock all my money in for six months and then
I revisit that six months later and rates are below
(19:43):
where I had the three year CD on, then hypothetically
that was a really bad money move, right. I might
have been better off saying, hey, let's take that three
years even though it's a lower rate today, in order
to make sure that I'm not going to be subject
to the whims of the Federal Reserve and what they
do over the next six months. What else are you
seeing out there in terms of I mean, the pieces
that CNBC points out, I don't find they're generally good
(20:08):
advice for any points in time, not just when the
Fed's about to cut rates. Like pay down your credit
card debt. Yeah, well, of course you should definitely do that,
and you should do it before you start saving money
in a CD. But I don't think you should do
that because the Fed's cutting rates in September.
Speaker 2 (20:20):
Yeah, and some of this also, you know they mentioned okay,
you know, get your credit score better so you can
get lower interest rates.
Speaker 4 (20:26):
Anyways, again, always get your credit card score better.
Speaker 5 (20:29):
It will always help you if you can go ahead
and do that, But that's not exactly a things to
do as we head into a rate cutting session. One
of the other I'll mention another you know, quasi mistake
that I see frequently. And this one's tricky because it
has been almost gospel from a lot of our parents
in terms of their mortgage. So, hey, make an extra
payment on your mortgage per year, and look how much
(20:51):
faster you'll pay it off. I would actually argue that
right now, for a lot of Americans, let's say you've
got like a three percent mortgage rate, stopping those extra
payments and putting that money elsewhere can be a much
more successful strategy.
Speaker 3 (21:04):
Yeah, it's a case of on that one.
Speaker 2 (21:09):
If your mortgage rate is fixed at three percent, and
you're saying, hey, I could take you know, the extra
and I've got you know, I can put that in
a CD that gets me five percent over you know,
X period of time. Okay, yep, the dollars can you know,
potentially make sense there. The thing that you do have
to be careful about on any of this is, hey,
when again, there are a lot of Americans that have,
(21:31):
you know, a three percent mortgage, but there are plenty
of others where it's four and a half percent, and
then you know, the alternative that they're moving that money
into is you know, just above or they're like, well,
I can you know, I've borrowed it five percent and
I think I can get more in the stock market
in the long term, And the answer is you might.
But it also becomes dangerous then because the stock market
(21:53):
can also lose money. And if you abandon hope, you know,
the second you have a daylight last two month days ago, well,
now you've not made that payment on something that you
know had a fixed interest rate. You're paying and you
didn't earn the return you were expecting, and now you're
even you.
Speaker 3 (22:09):
Know, worse. So you just have to be careful on this.
Speaker 2 (22:12):
And as Mike said that the big thing with the
Federal Reserve when they cut interest rates, it's not like
they control every interest rate. They're just cutting their short
term rate. And other interest rates are impacted in different
ways depending on you know, how long term they are,
whether it's a loan from a bank, whether it's you know,
from the government on a credit card, like, they're all
(22:33):
different impacts and you need to make sure you understand
how your different rates may move based on what the
FED does.
Speaker 5 (22:40):
Big takeaway for me for the first time in multiple decades,
you have an opportunity to take advantage of higher rates
if you are a saver and according to the FDI
see the average interest rate being paid on a savings
account is zero point four five percent. If you're finding
yourself in a position where you are, you know, sticking
(23:00):
to the gospel of making that extra mortgage payment and
you're not sure if it still makes sense, or sitting
on extra cash and not sure how you should be
investing it, or you know, trying to decipher do I
pay down this debt or do I save? What's the
best next step. I'm trying to make it all work
within the confines of my personal situation.
Speaker 4 (23:18):
We'd love to talk to you here at the.
Speaker 5 (23:19):
Armstrong Advisory Group and help you evaluate that process because
it is tricky and like I said, I see mistakes
on it all the time. Once a week at least,
I see something that I'd say, you know, that's fine,
but have you thought about doing this instead and how
much more it could be earning you.
Speaker 4 (23:35):
If you are having or.
Speaker 5 (23:36):
Facing those types of decisions and you're having a tough
time figuring out what is best for you. Give the
folks at Armstrong Advisory Group a call. Let us help
you guide through that process and fit it into the
overall financial plan that you're trying to develop for yourself.
Give us a ring at eight hundred three nine three
four zero zero one, where a team of financial advisors
and investment professionals that provide fiduciary investment advice to our
(23:59):
client alongside a financial planning process to inform and understand
how those investments are going to contribute to that.
Speaker 4 (24:06):
Long term plan.
Speaker 5 (24:07):
Once again, the number for the Armstrong Advisor Group for
your free consultation is eight hundred three nine three four
zero zero one.
Speaker 1 (24:15):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (24:32):
Mike, there's a piece in Bloomberg titled Wall Street wants
more signs us consumers are still spending, so kind of
echoes what we were talking about the end of last week,
which is, hey, we got a week or so of
you know, improved data that suggests things were not as
bad as we thought they were at the beginning of
the month. But we need more signs than that. We
can't just have one good week.
Speaker 5 (24:51):
Yeah, I mean, furthermore, right, Walmart had a pretty solid quarter,
and that was a lot of what markets focused on.
That could that hey, you know, people are spending again.
They're buying grills again, they're buying stuff that might have
worn out from the big spend in twenty twenty. It
could also mean that people are so worried about their
budgets that they are all flocking to Walmart instead of
(25:12):
shopping at true TJX or home Depot or Target. And
you know, focusing on what's generally considered to be the
lowest cost retailer out there, in which case maybe not
the same conclusion about the state of the overall economy. So,
you know, Walmart is important, the largest retailer in the
country and many largest employer in the country, one of
the largest retailers, if not the largest retailer, But how
(25:35):
these other companies are doing is also important and probably
more indicative of you know, discretionary type spending, because Walmart
themselves has pointed out that a lot of their growth
has been in grocery, which.
Speaker 4 (25:46):
Is not exactly discretionary.
Speaker 5 (25:48):
In fact, to me, would indicate, Hey, consumers are nervous
about their wallets and they're going to the cheapest grocery
store they can find.
Speaker 3 (25:54):
Right.
Speaker 2 (25:55):
So this week you've got Lows reporting tomorrow, TJX and
Target reporting on Wednesday. Thursday, Ross Stores is reporting. I
know they're not huge up here in the Northeast, but
big regional retailer down in the southeast. Dollar Tree in
Burlington also report on Thursday, BJ's as well, So I mean,
you've just got them all stacked up. Actually, even on Wednesday,
(26:17):
some smaller ones Macy's reports I guess still sure them listen.
So the interesting thing about Macy's they still do five
billion dollars a.
Speaker 3 (26:26):
Quarter in revenue.
Speaker 2 (26:27):
Yeah, they don't make a ton of money on it,
but they're they're there. Let's see Urban Outfitters who is
still around, I guess, And those are the big retailers
this week, and then remember next week to finish up
earnings for the quarter. Wednesday, we got Nvidia and Salesforce.
So still a couple of big guys on the tech
side next week. I know that's not really important to
(26:49):
the retail picture, but as far as earning, still a
couple big ones yet to come. Here to take a
quick break, and when we I'm back, we'll do a
little bit of stack roulette.
Speaker 1 (27:03):
The Financial Exchange Show podcast drops every day on Apple, Spotify,
and iHeartRadio. Hit that subscribe button and leave us a
five star review. You're listening to the Financial Exchange Radio Network.
Find daily interviews and full shows of the Financial Exchange
on our YouTube page. Like us on YouTube and get
caught up on anything and everything you might have missed.
(27:25):
This is the Financial Exchange Radio Network.
Speaker 6 (27:30):
This segment of The Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
The US Virgin Islands of Saint Croix, Saint Thomas, and
Saint John enjoy perfect weather, world class dining, and incredible beaches,
as well as a vibrant nightlife. Head to visit USVII
dot com. Book your trip today, no passports needed and
no money to exchange. Take your next vacation in America's
(27:53):
Caribbean paradise. The United States Virgin Islands. Go to visit
USVII dot com to book your trip.
Speaker 3 (27:58):
That's visit US all right, Mike, do you mind if
I kick things off here for snack?
Speaker 2 (28:04):
Roulett please do, Charles, I'd like to talk about drones
because Tucker just knows how to get me going on this.
So there's a piece in CNBC. It's titled Amazon's troubled
drone delivery program faces latest challenge in Texas annoyed residents
And this is exactly my nightmare. When we talk about
(28:27):
drone delivery of packages. Everyone's like, oh, it'll get you know,
all the trucks off the street.
Speaker 3 (28:33):
Yeah, Like it's UPS trucks crowd in the street.
Speaker 2 (28:35):
When I'm on one twenty eight sitting in traffic in
the morning heading in, there's like one UPS truck and
then there's a bunch of us driving into work.
Speaker 3 (28:43):
So it's not the UPS trucks.
Speaker 2 (28:45):
Even Oh, like you're going through Boston, No, it's not
the one UPS truck. It's the eighty four door dash
bikes that are blocking stuff up. So like, let's let's
pump the brakes here. But here's what they're talking about doing.
There's a proposal from Amazon to the FAA to the
company in this area in College Station, Texas right around
Texas A and M to increase deliveries to four hundred
(29:08):
and sixty nine flights per day, up from its current
level of two hundred flights a day, so more than doubling.
They also want to expand the hours to instead of
being limited just to daylight between seven am and ten pm,
and expanding its delivery area by four times. So basically,
we're going to be taking way more packages, way more
(29:29):
mileage in the air. And the city manager of College
Station actually said that city officials ran tests of the
prime Are drones and found that they had noise levels
between forty seven and sixty one decibels. Now, to put
this in perspective again, when you're trying to figure out
(29:50):
like what that means and what it equates to, it's
not as loud as things such as you know, chainsaws,
which are at one hundred and twenty five day and
you know heavy equipment at one hundred and ten.
Speaker 4 (30:06):
Is that on your house?
Speaker 3 (30:07):
Oh it's it's it's.
Speaker 2 (30:08):
Oh my goodness, it's it's it's right there right now
right imagine having that going on. Do they come with
the music. Do they play Right of the Valkyries when
they're delivering?
Speaker 3 (30:23):
I think so, yeah, that would be uh, that would
be something.
Speaker 2 (30:28):
But this is all Amazon saying, hey, we're trying to
make our delivery more efficient and in return making the
quality of life for us not great. And this is
before you even get into hey, this is for you know,
four hundred and sixty nine flights a day, which is
a drop in the bucket in terms of how many
(30:48):
deliveries Amazon makes. To actually make a dent, you need
to get to like thousands an hour. In terms of
you know, metro areas like the Boston area, the New
York area, they don't get four hundred sixty nine packages
a day. They get thousands. And so this, in my opinion,
is my nightmare is a bunch of drones just flying
(31:10):
through the air dropping packages, willy nilly and no thank you.
I'll deal with the traffic. I'll sit and I'll listen
to something and I'll figure it out. Because I said this,
do this from the beginning.
Speaker 5 (31:22):
My concern is really not about this happening, because it
just even learning everything we have, it just seems like
the most impractical solution to the problem. It just seems
completely inefficient to me. I don't think it's going to
get that much traction because I don't know how you
make this work efficiently. So we will see where it goes.
But Chuck is immensely concerned about it. Obviously, I want
(31:43):
to talk about I won't talk about realtor commissions. Fine,
I was going to go that direction, but we'll save
that for another day. There's a wrongful death suit being
filed against Disney. So pretty tragic thing that happened. Somebody
was at a Walt Disney parking resort. Now to be clear, here,
they were at a restaurant that was within Disney Springs,
(32:07):
which is an outdoor dining and shopping and entertainment complex
that's owned by Disney. But the restaurant they were dining
at was not a Disney owned restaurant. Just to be
very clear about that. The waiters were not Disney employees.
This was not the I'm on a Disney property and
I'm going to a Disney restaurant that That was not.
Speaker 4 (32:22):
The case here.
Speaker 5 (32:23):
Nonetheless, they advertised themselves as an allergy friendly restaurant. The
person involved made it really clear that he had a
nut and dairy allergy. Was clearly allegedly served nuts and
dairy and died about you know, an hour later as
a result of the allergy, which is horrifying. You know,
got a family, It's awful. He then filed suit against
(32:47):
the restaurant as well as the owner of the property,
which is Disney. Disney has come back and said, hold
on a second, before you sue us, we need to
bring up the fact that one point you signed up
for a free trial of Disney Plus streaming service, and
when you did that, you agreed to solve any of
(33:12):
our disputes via arbitration instead of a lawsuit. And so
you know, not only hey, we're sorry that you know
you have to deal with the loss of your family,
but because you signed up for a completely unrelated service
that had nothing to do with this property that we own,
you can't sue us because of that.
Speaker 4 (33:32):
So a couple things here.
Speaker 5 (33:33):
One, he might not have any grounds to sue Disney
in the first place, they didn't operate the restaurant, They
didn't have any involvement whatsoever in this guy's passing. But
the fact that by having subscribed to a Disney streaming service,
I am now somehow waiving any right that I have
to fight Disney in the future. I mean, I guess
(33:56):
all of us beware about the tentacles of all these
companies and how.
Speaker 4 (34:00):
Far they reach.
Speaker 5 (34:01):
But that seems to me to be completely unrelated and arbitrary.
I'm trying to think of like and kind of disgusting
to be honest too.
Speaker 3 (34:13):
But yeah, it's.
Speaker 2 (34:14):
I'm trying to think of the right word to use,
and disgusting is probably the right one.
Speaker 3 (34:20):
You know. Again, I get that in lawsuits, lawyers will
do this and do that.
Speaker 5 (34:25):
But like, get the suit thrown out because Disney didn't
have anything to do with his passage.
Speaker 4 (34:30):
That's true.
Speaker 2 (34:31):
Sure, we don't operate the restaurant, We have nothing to
do with it. Yeah, okay, like reason reasonable. Fine, you
have to sue the actual restaurant, totally get it. Hey,
you can't sue us because you had a Disney Plus
subscription on a trial four years ago.
Speaker 5 (34:47):
Kind of appalling, I mean, and dystopian too, right, It's just.
Speaker 2 (34:55):
There are no humans in the lawyer's department. It's all
artificial intelligence or no intelligence.
Speaker 5 (35:05):
Yeah, So I don't know what to do about all that,
because you know, now you probably just can't sue anybody
if you've agreed to any of these things. But yeah,
that that's distasteful at best.
Speaker 3 (35:19):
Yeah, it's uh, it's just it's it's brutal.
Speaker 2 (35:22):
Like I, I'm pretty upset right now, and that's all
I have to say about that.
Speaker 3 (35:28):
Uh.
Speaker 2 (35:28):
Taking a look at markets, the Dow is up one
hundred and ninety one points, the S and P's up
twenty five, the Nasdaq up eighty.
Speaker 3 (35:35):
We are all done for the day.
Speaker 2 (35:37):
We're uh, we're gonna call it a day and go
do our thing, and hey, don't worry, we'll be back tomorrow.
We've got more financial exchange coming up, so tune in
and we'll have a whole full show with more on
the FEDS Jackson Hole meeting tomorrow
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.