October 15, 2024 • 35 mins
Mike Armstrong and Paul Lane discuss an opinion piece from Bloomberg that explains why Jerome Powell is not the greatest Fed chair ever. Corey Adams from Robert Half joins the show to share the companies 2025 salary guide. The battle between dockworkers and robots isn't over. High home prices force builders to offer mortgage buydowns. Low-cost airlines have one job. They're failing at it.
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 Mike Armstrong and Paul Lane, 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 Boss and making
a donation today. The DAV five K Boston is presented
(01:04):
by Veterans Development Corporation. Face is the Financial Exchange with
Mike Armstrong and Paul Lane.
Speaker 2 (01:12):
Good morning, and welcome back to the Financial Exchange. It
is Mike Armstrong, Paul Lane, and Tucker Silva with you
on a Tuesday morning. After yesterday's all time highs, We've
got equity markets largely in negative territory here. Dow is
off one hundred and sixteen points a quarter of a percent,
SMP's off twenty a third of a percent. Nasdak leaned
the way down, off one hundred and fifty six points
(01:33):
or eight tenths of one percent. Bond market ten year
treasury yields sitting steady at about four point zero five percent.
I'm rounding there slightly. Oil markets back down five percent
after the announcement or not announcement, but report from the
Washington Post that Israel is not expected to strike Around's
oil industry. Prices on West Texas Cruse sitting at seventy
(01:56):
dollars flat at the moment, with a again three dollars
eighty cent drop or five percent drop this morning. In trading,
Gold sitting at twenty six seventy eight per ounce. Anything
else catching your eyes this morning Paul market wise.
Speaker 3 (02:13):
No, the biggest thing for me, I was just noticing
that that dropping oil is notable. I'll see in a
little bit of a relief there five percent drop, So
that to me was probably the biggest standout.
Speaker 2 (02:24):
We'll be joined in the next segment by Corey Adams
from Robert Half as folks head into that all important
year end time where salary negotiations kickoff, So giving us
a twenty twenty five salary guide. That'll be, like I said,
after the next break, right after trivia. But our first
story today is from Alice Schreger, columnist at Bloomberg, and
(02:45):
I don't know jumping on the Mark Fandettian bandwagon here.
Jerome Powell is not the greatest FED chair ever. This
comes amidst I think, you know timely report here with
JP Morgan Chase, I think on Friday publishing a piece
basically calling it for the for the soft landing, saying, look,
you know, by our own metrics and our own definitions
(03:05):
here we believe the FED has orchestrated a soft landing
of this economy. We are not in a free fall
for unemployment, inflation, prices have calmed down, and calling it
for the soft landing, which you know, we ourselves on
this show, we've apparently a slightly different definition of it
than JP Morgan Chase. We've been saying, look, if the
(03:26):
economy gets to a point where both inflation and unemployment
finished the year under four and a half percent, then
we'll give it to them. So thereby we can't really
grade it until January, but certainly we seem to be
heading in that direction. Unemployment is still below four percent,
well below it now at four to one, and inflation
is sitting around three. So that would that would class
categorize as a soft landing by our own definition if
(03:48):
we get there. And I have to say that I
think that's fairly remarkable in terms of an achievement based
on history. History has been that inflation is very volatile,
has a lot of points where it comes back, and
in almost every instance it's taken a recession to get
rid of inflation. So far inflation's coming way down. We
(04:09):
don't have a recession on our hands, and I think
that is something to applaud. Allison's point is not about that.
I think she too would applaud the actions of the
FED over the last year or two. Her point is
merely we could have avoided a lot of this had
the FED acted differently in twenty twenty one and twenty
twenty two. Where do you buy in where do you
(04:30):
diverge from Allison's opinions on this stuff?
Speaker 3 (04:33):
I would diverge because people She's not the first one
to make this point. A lot of people have played
Monday Morning quarterback on the decisions made in twenty twenty one,
in particular, where we were coming off of a pandemic
that no one had seen the likes of in one
hundred years, and there wasn't a playbook on how to
properly operate the economy to maintain full employment and keep
(04:56):
you know, interest rate or keep inflation under control when
you have an economy that was shut down in the
midst of reopening. And I wouldn't be overly critical of that.
The piece that I would agree with her is in
twenty twenty two, how long the support continued for That's
where I think you and I share that view that
it continued longer than necessary. There was clear signs that
(05:19):
the economy had avoided any substantial recession. It was a
very quick one that occurred in twenty twenty and it was.
It was very clear that we had sort of rounded
out of that, and the continuing purchases of mortgage backed
securities and other inflows of dollars into the economy could
have been shut off a little bit quicker. That's where
I would agree, but I would diverge on being overly
(05:41):
critical of the actions in twenty one.
Speaker 2 (05:43):
Yeah, So to remind folks of all the actions, I
mean very obviously, the Federal Reserve was bring rates to
zero immediately when the when COVID became clear what was
happening there. So that was one action they took, and
I think totally justifiable in the face what we were
dealing with. Very justifiable. They also then went on a
(06:04):
bond buying spree. They ended up buying I don't know
how much a month. It was something I think eighty
billion a month. Rings familiar to me, but I could
be off on that figure. Of both mortgage backed securities
as well as government securities. Why would you do that, Well,
it builds an additional a new buyer into that market,
and when you have a limited number of buyers buying bonds,
(06:24):
what happens Prices go up and yields come down. It
also effectively by doing so, backstopped the bond market as
a whole. So if you remember the early stages of COVID,
like April of twenty twenty, I remember one of the
major cruise lines basically on the cusp of taking a
deal with some private equity and hedge funds that was
(06:46):
just going to kill them. It was like a sixteen
percent interest rate on debt and convertible into stock, and
that was announced on like a Thursday. The FED stepped
in on a Friday, and then that same company went
and financed debt at like nine percent or something like
that the day after. So the risk of going out
of business in twenty twenty was very low for large companies.
(07:08):
Different story for small ones, but for big businesses, really
tough to go out of business. I'm of opinion that
you can basically justify everything the FED did in twenty twenty.
You can make an argument that it was overdone, but
I think anything that the FED did in twenty twenty
to save this economy was relatively justifiable. The further away
(07:29):
you got from the COVID lockdowns, the less justifiable it became.
And to your point, still buying bonds at a relatively
big clip in twenty twenty two, completely unjustifiable in my view,
and led to what we're seeing in the housing market
right now, which is large swasts of the country home
prices having appreciated thirty forty percent over the last five years,
(07:51):
and no one wanting to sell because you could get
a hell of a deal on a mortgage over the
last you know, in that twenty twenty to twenty twenty
two time period when the Fed was artificial suppressing mortgage rates,
because make no mistake, that's what they were doing. They
were artificially suppressing mortgage rates to make it easier for
people to get cheap debt, led to what we see now,
(08:11):
which is housing being extraordinarily expensive, And if you couldn't
get into a home during that period of time, you're
kind of locked out at this point to a degree.
So I think there is a compelling argument that, yeah,
keeping going with these bond buybacks. You know, Congress has
places to blame here too, Right, Should they have been
paying unemployment at such an elevated level through twenty twenty two?
(08:33):
Should they have been waiving payments on student loans until
twenty twenty four? No? Probably not plenty of blame there too,
But I think the FED again to get these mistakes
are justifiable and understandable. I think don't think they should
have been made. They were too slow to raise interest rates,
too slow to cut out the bond buying programs, and
(08:56):
I think that led to much of the inflation that
we saw in twenty twenty two. All I think that
does is keeps them from the top list of best
federal reserves that we've ever seen. You know, a lot
of their actions over the last few years have turned
out to be outstanding. I would have been so, you know,
if you're looking back on this period of time, I
(09:17):
think there's lessons to be learned here. It's tough. It's
pretty easy to play Monday morning quarterback. I will admit
that that. You know, we have a lot of hindsight
now of how this all played out, but it did
seem obvious in twenty twenty two that rates need to
be higher and these bond buying programs probably needed to
come to an end before they actually did. I agree.
Speaker 1 (09:38):
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. Face is the
Financial Exchange Radio Network. Miss any of the show. Catch
(09:58):
up in your convenience by is the thing Financial Exchange
Show dot Com and clicking the on demand icon, where
you'll find all of our interviews in full shows. This
is your home for the latest business and financial news
in New England and around the country. This is the
Financial Exchange Radio Network.
Speaker 4 (10:17):
This segment of the Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
The US Virgin Islands are Saint Croix, Saint Thomas, and
Saint John. Summer's over, so now's the time to start
looking at a fabulous holiday vacation, and there's no better
place than the US Virgin Islands. Enjoy perfect weather, world
class dining, incredible beaches and a vibrant nightlife. No passport
(10:37):
is needed, and there's no money to exchange.
Speaker 2 (10:39):
Take your next.
Speaker 4 (10:40):
Vacation in America's Caribbean paradise the United States Virgin Islands.
Speaker 2 (10:43):
Go to visit.
Speaker 4 (10:44):
USVII dot com to book your trip. That's visit USVII
dot com.
Speaker 2 (10:48):
Corey Adams from Robert Half joins US now to talk
about their twenty twenty five Salary Guide. Corey, thanks has
always for joining us.
Speaker 5 (10:55):
My pleasure good to be here.
Speaker 2 (10:56):
So first things first, we're four and a half years
out from the beginning stages of COVID. I know a
lot of work is still being done remotely, but I
know in our own office, and you know, speaking to
my wife who works in financial services as well, there
has been a major shift back towards in office work.
And how big of a differentiator is that from what
(11:18):
you're seeing both in the hiring and employee side.
Speaker 5 (11:22):
So where we're seeing it, according to the Salary Guide,
really follows right now, and it's a little bit nuanced nationally,
is in the form of compensation, and so what we're
calling it is in office premium. So for jobs that
can be done remotely, sixty six percent of managers are
willing to increase starting salaries for new hires to work
in the office, and on average we're seeing up to
(11:45):
about twenty percent more pay to come in four to
five times a week. And so you know, employers, here's
the why, right employers are offering higher pay because they
value team building. They offer face to face collaboration. As
we've talked about over the past few months, it creates
at an overall better onboarding experience and new hires, and
so there's a chance that this trend is likely to
(12:06):
continue as companies continue to focus on maximizing productivity and
improving team dynamics.
Speaker 2 (12:14):
Corey. When it comes to you know, the other big
trend obviously, you know in office work has been one.
Artificial intelligence seems to be the only thing that people
are talking about these days. Chuck and I were talking
last week or the week before, both of our all
the matters are offering artificial intelligence courses at their schools.
How big of an ask is this for new hires?
(12:36):
How big of an expectation is now built in that
you're going to have some level of expertise in white
collar work for artificial intelligence.
Speaker 5 (12:46):
Yeah, I would categorize it as it's moving almost to
a necessity. And so the research that we have shows
that more than half of hiring managers say that advancements
in AI and automation is basically reshaping the skill set
that's needed to operate on a day to day basis.
So additionally, thirty seven percent are bringing contract down to
(13:06):
actually help support AI related projects. And then this is
actually from a separate research project that we did. Ninety
percent of tech leaders plan to implement initiatives involving AI
this year, but ironically a little bit less than half
site that they actually lack the AI experience as one
of their biggest barriers to success. So bottom line is this,
(13:28):
I think many of the top skill sets that are
in demand right now have one thing in common. It's AI.
So tech leaders of all sizes cited AI and machine
learning as the top area with the skills gap is
most evident.
Speaker 2 (13:45):
What industries do you think are going to be, you know,
looking for the biggest increases when you take a look
at at your surveys and what you're expecting for twenty
twenty five, Obviously there's been a lot of pressure on tech.
You've seen I would say, you know, the biggest announced
layoffs that I've seen in any way have been in
the tech sector. So I would imagine, you know, salary
increase anticipation are pretty low there. But what other industries
(14:07):
are you seeing that are expecting some big bumps in pay?
Speaker 3 (14:11):
Yeah?
Speaker 5 (14:11):
So just real quick too, before we give you the
we'll call the top four growers. And I think some
of your listeners will be happy to see where accounting
and finance falls. But when we talk about wage growth,
I mean it's basically been moderate, right, So the Uereau
of Labor Statistics reported that wages and salaries increased four
point one percent year every year, and that's from last
June to this June. However, and you guys mentioned this
quite a bit, the inflation has had an impact on
(14:33):
the significance of those increases, So adjusted for inflation, wage
and salary increase end up being on average about one
percent for the same period. But to answer your question,
the top four industries that we saw the most significant
increase in salaries from last year going into next year,
Accounting and finance came in at three point six percent.
That was followed closely behind administrative and customer support at
(14:56):
three point five percent, and then your last two that
I'll give you is marketing, creative was three point four percent,
and then human resources was four. Into your comment, technology
was certainly towards the bottom of the run.
Speaker 2 (15:07):
Here are we finally seeing some trends in you know,
I don't know how old the youngest baby boomer is
these days. I know we've talked about this, Tucker. I
don't know if you know off the top of your head,
I would think early sixties. You've got the youngest baby boomers,
the largest generation of workers that has now been moving
into retirement. How have managers been handling this? Is it
playing a big role in hiring plans for twenty twenty five?
Speaker 3 (15:32):
It is?
Speaker 5 (15:32):
And I'm glad you brought this up. And the reality is,
like we knew we were going to get here at
some point. So a retirement has basically sharpened organizations priorities.
So retirement is a top concern and reality for a
lot of managers, and many of them are implementing strategic
measures to bridge the resulting skills gap. So forty five
percent are investing in training and upscaling their current workforce,
(15:55):
and another forty one percent are actually leveraging the expertise
or retire retires by rehiring them as a part time consultant.
So I thought that was interesting, something we haven't seen
too much in the past.
Speaker 2 (16:06):
Yeah, that's a huge number. And I do know a
lot of you know, retirees out there who are being
offered that part time gig and finding it quite attract
I've speaking to somebody just yesterday actually who has been
out of the workforce for a good year and a half.
I think he's in education. They had a departure there
and was offered this kind of part time gate to
fall out the year, close out the year, and didn't
(16:27):
have much to do with the pay, but something about
it was appealing enough, and I think, you know, hiring
managers should be aware that their workers might be open
to that type of arrangement if the companies can get
around it and get comfortable with it, which again is
a big shift, but I think it's a compelling option. Corey,
I really appreciate you joining us as always. That's Corey
Adams from Robert Half talking to us about the twenty
(16:49):
twenty five salary Guy that they put together. Corey, thanks
so much, appreciate.
Speaker 5 (16:53):
It, Thank you, sir.
Speaker 2 (16:54):
Soon. Taking a look at markets as we head towards
eleven thirty here, the Dow remains in negative territory, off
seventy nine points one fifth of one percent, the S
and P still off seventeen points a third of a percent.
In the Nasdaq off one hundred and thirty five points
three quarters of one percent. Here yield attend your treasury
(17:14):
sitting at four point zero five percent. And then the
big story of the day. Oil price is off more
than five percent this morning, as The Washington Post reported
that Israel has no intention of intentionally striking Iran's oil industry,
obviously a lot of conjecture around what that will look
like over the coming weeks, but nonetheless dragging down oil
(17:36):
prices this morning. We'll be right back with the trivia
winner after this.
Speaker 6 (17:49):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
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.
Speaker 2 (18:12):
In what has to be the most disappointedly unexciting actual
article with the most exciting headline, the battle between dock
workers and robots isn't over. I'm just picturing a dock worker,
you know, with a cutoff T shirt and like a
thick mustache, chasing a robot down with a wrench. But
(18:33):
that's unfortunately not even close to what we're describing here.
Rather you have the dock workers who are back to
work after I think was it just a two or
three day strike strike, pushing off those negotiations until after
the election in January when it'll probably come to a
head to some degree again, but giving some time to
negotiate here. And one of the big pieces that they
(18:54):
know I still don't know, is it struck struck over
was the automation piece. And this article I think goes
on to talk about how really this is inevitable, and
you might have periods like this where tensions flare up
and you get another strike, but inevitably automation is coming
(19:17):
for you know, every different job and will eventually replace
most of what we do today in one way, shape
or form, or augmented in some way, shape or form.
New jobs will be created on the backs of all that.
But I think doc work is almost certainly going to
continue to be automated and there's almost nothing the union
can actually do about it.
Speaker 3 (19:37):
They did a great job in this piece, some bloomberg
of raising the parallels to the late nineteen fifties where
basically Malcolm MacLean came up with the idea behind the
container ship that is used so frequently today. You had
fifty thousand longshortmen work in the docks of New York
in the nineteen fifties. You now have forty five thousand
long shoremen all throughout the coast from Maine to Texas.
(19:59):
So this shows you how the industry evolved over time,
and a similar thing could very well occur in this
instance where in the late nineteen fifties, what they ultimately
came to an agreement on is that they would not
guarantee all the jobs of long shortman, but rather keep
a small workforce on at a higher paid level. You
could very much see the parallels in today's world with
(20:21):
as automated automation picks up, you're still going to need
a contingency of workers at the particular porks to make
sure everything is running appropriately. But ultimately it's not going
to be the same number of employees that is going
to be required. And this is just the way industries
and businesses evolve to increase productivity. This comes with it.
You can't fight back against technology and it evolving over time.
Speaker 2 (20:45):
Yeah, and I'm not trying to be anti union or
anything with all. This is just the fact I mean
even let's assume that they did get some commitment from
the ports to not automate further, which again I think
is unlikely. But let's say you did it, and across
the entire easterncy board there's no further automate. What that
means is it's just more expensive and more costly and
more time intensive to get your stuff loaded up and
(21:08):
offloaded at US ports. We're a world economy here, so
if that happens, what am I going to do? Well?
If the Port of Saint John in New Brunswick decides
to automate and make it cheaper and easier to offload goods,
then I'll do it there and I'll drive the stuff
down through Maine. If Mexico suddenly becomes far more effective
(21:32):
at offloading goods in I don't know where's the closest
port to the US border. I don't even know the
name of it because it's irrelevant because we automate here.
Nobody delivers their goods to Tampico, Mexico and drives them
up the border because it's not necessary. But guess what
if we become non competitive because of union contracts in
(21:52):
the Eastern United States, they will find other ways to
get goods into the US and deliver them to households
at a cheaper, more effective cost. So again, automation, it's
coming for all of our jobs. It just depends at
what pace and to what degree we're able to retrain workforces.
And that's admittedly an area that we have been abysmal
(22:13):
at for decades in the United States, like whether it's
through outsourcing to other countries and job loss throughout the
Rust Belt, whether it's you know, automation of jobs in
auto manufacturing, like all those things are necessary. What the
United States has really failed to do is come up
with a comprehensive retraining policy to get people back in
the workforce in other areas. Folks want to talk to
(22:35):
you about the live broadcast of this show. We're going
on the road. We did one in Springfield a few
weeks ago. We're heading to Hyanas on October twenty fourth.
We'll be doing a live broadcast of the Financial Exchange
on October twenty fourth of the Double Tree Resort in
Suites and Hyenas will be then hosting a seminar after
the show. So live show from ten to twelve. You
(22:55):
can sit in on it and talk to us. Between breaks,
we'll be doing the live podcast from the hotel, and
then at noon we'll be doing a free lunch with
the Armstrong Advisory Group. Really a Q and a session
about whatever you want to get into with the folks
here at Armstrong, but I'll certainly be talking about the
upcoming election economic policies that the two candidates have proposed.
Ed Lambert from WXTK is going to be joining us
(23:19):
for that live lunch and seminar that will be putting on,
and so really just an opportunity to sit down with
the host of the Financial Exchange, host of the Morning
show down on XTK and ask questions that you might
have and hell, you get a free lunch out of
it too. That's nothing to sneeze. That's why I'm going
anyway about the rest of you guys. Once again, the
(23:41):
date is October twenty fourth. We'll be doing the Double
Tree Resort and Suites on Hyanas. You can sign up
two ways. One go to Armstrong Advisory dot com slash
events a bunch of information on the event there. You
can also call us at eight hundred three nine three
four zero zero one. Seating is limited here, so you
do need to make a reservation if you're going to
(24:01):
attend again, you can do that by calling us at
eight hundred three nine three four zero zero one, or
go to Armstrong Advisory dot com slash events.
Speaker 1 (24:10):
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 (24:26):
Sometimes we cover stories on the show that I just
cannot even begin to relate to, and this next one
from the journal is one of them. To lure home
buyers builders still have to help with high mortgage costs.
It outline stories of builders in other parts of the
country not here to in New England need to offer
five percent mortgage rates to get home buyers in there
and induce them. This seems like a foreign concepts to
(24:48):
everyone here in New England. I fully understand that. I
believe Connecticut still has the worst housing inventory levels compared
to twenty nineteen of anywhere in the country as far
as I know, But there are seven states that are
sitting on more housing inventory now than they were in
twenty nineteen. Those are Tennessee, Texas, Idaho, Florida, Colorado, Utah,
(25:08):
and Arizona. You can think about those states and really
I list all of them off as big desirable places
to move to during the pandemic, right, how many people
were talking about Nashville or Austin, Texas, big companies relocating
to those places. Idaho drew a ton of people wanted
to work remotely from Idaho Florida obvious, but a ton
(25:28):
of migration to Colorado and Arizona and Utah as well
for the lifestyle trade off that you had there and
a lot of building that occurred there as well, and
now finally starting to catch up with it, it would
seem here with home builders finally getting some product to market.
Speaker 3 (25:43):
Yeah, this is one that I was diving into all
sorts of different metrics because to your point, Mike, it's
just unfathomable to have a buyer around the Greater Boston
area offering you a lower mortgage rate just to buy
their house because there's so seldom any options around any
of these towns rounding our studios, And the same applies
throughout most of the New England area as well as
(26:04):
you point out with Connecticut. But the fact that it
is important to note the new home building sector of
the overall housing market is a smaller portion of it.
Right Ultimately, the existing home sales inventory is the biggest
percentage of the housing market that makes transactions and volume
(26:24):
move on a monthly basis. But still very surprising to
me to see that you saw an increase and appetite
for these builders to download homes because people are just
dying for them in so many different parts of the
country because of underbuilding over the last fifteen years or so.
Speaker 2 (26:41):
I still the Connecticut thing, I just cannot wrap my
head around. So in September, this is according to data
from the Saint Louis Federal Reserve September of twenty twenty four,
the level of available housing is twenty eight point six
percent of what was available in September of twenty nineteen. Wow,
like mass chuse and stuff, it's half that's bad. Connecticut
(27:03):
is just a different world right now in terms of
its housing market. It is just absolutely wild to see
that twenty eight point six percent of twenty nineteen levels
just craziness. Let's take a quick break here on the
Financial Exchange when we come back Stack Roulette.
Speaker 1 (27:20):
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all
morning long. This is the Financial Exchange Radio Network. Miss
any of the show. The Financial Exchange Show podcast is
available on Apple, Spotify, and iHeartRadio. Hit the subscribe button
and leave us a five star review. This is the
(27:41):
Financial Exchange Radio Network.
Speaker 2 (27:57):
Paul, low cost airlines have one job and they're failing
at it. That's the piece from Bloomberg. Here Thomas Black
wrote the piece, and here's the premise. If you're a
low cost airline, you need to do really just one thing,
and one thing well, no frills, cheap airfare that's at
(28:19):
least reasonably on time, so that you can expect to
get where you're going. They are delivering on the low
cost no frills piece. I will give them credit there,
Spirit Frontier, Allegiant. These these budget carriers, the seats are tiny.
You barely get a drop down what is that called
(28:41):
trade table, barely get a drop down tray table. No
Internet on these flights, like they're not a lot of
bells and whistles, and you get charged for every other thing.
But as I was sitting in the airport this morning,
I was flying from Indiana to Boston this morning, and
I flew Delta mainly because that was the cheapest flight
available for the times that I needed. There are like
(29:02):
four people in the check in line. We walked up there,
we nicely checked our car seats and walked over to
CSA pre check and flew through security like it was
a very pleasant experience. And right behind me was the
line for Frontier Airlines, which you know, based on my
rough estimations, looked to be about two days long. It
(29:25):
was enormous. There were hundreds of people sitting in line
to check their bags on Frontier because, by the way,
check the luggage is cheaper on some of these airlines
than carry on luggage. And beyond that, what they seem
to be really failing at, beyond the customer service piece,
is on time performance and reliability. And I guess furthermore
(29:46):
would be confidence that they can even continue to exist
because they keep losing money. Spirits been talking about declaring bankruptcy,
and that becomes a bit of a self fulfilling prophecy,
right Like if you another example here, I was looking
at flights for February, Bak, we're not really planning on
going anywhere that's they would fly a floor, But I
was curious and Spirit was by five hundred by fifty
(30:08):
percent was the cheap now thirty percent was the cheapest
airline out there to get where we were looking like
a Caribbean type vacation. Spirit was five hundred dollars cheaper
per seat than the next low cost airline. And I
personally looked at that and said, would you be willing
to roll the dice on whether or not Spirit will
I be able to actually get you down there? By
February they're talking about bankruptcy. I doubt they're going to
(30:30):
cease to exist, but I wouldn't book a ticket on
a company that's talking about bankruptcy. Sure, sure, I'd be
quite nervous about that. And if that actually maybe I'm
alone in that. But if that continues, then Spirit can't
book revenue. That's our real problem.
Speaker 3 (30:45):
It seems like some people have questioned whether or not
there can be these discount air flyers out there, but that's.
Speaker 2 (30:51):
Just there's demand for it.
Speaker 3 (30:53):
Like you mentioned, there's always going to be demand to
find the cheapest flight out there. Ryanair is a good
example of a company that has done well with this
business model over time. Their on time performance is much
stronger than that of Spirit and some of the other
discount airlines here Frontier as well. So whether those two entities,
(31:13):
Spirit and Frontier need to adjust some of the airports
that they fly into or create a buffer between flights,
there's something that needs to be done on that end
of things to get execution to a better point.
Speaker 2 (31:26):
It could just be this market right now, like people
have been willing to splurge over the last four years.
I wouldn't have necessarily thought that that would follow through
to airline fair because look, the experience of Americans buying
airlines has been give me the lowest marketed sales price,
and that's what I'm going to book. I don't care
if it's a dollar cheaper. If you know, one airline
(31:47):
is cheaper than the other even with all the other fees,
they book the cheapest possible flight. Either A that's changing
or B. Americans have been so flush with cash that
they've just said, now you know I've flown Spirit before
or didn't love the experience, I'm going to book on
Delta instead. And that's kind of where I've gone to. Right, Like,
I'd be willing to book Spirit were it myself flying
(32:10):
somewhere if I was just the only one reliant on
getting there and in you know, worst case scenario, I'm
late to a business trip. Okay, I'll deal with that.
If I'm flying with my three kids and I need
to wait in an hour and a half line to
check a stroller, forget it. I'm never flying that again.
Speaker 3 (32:26):
It's interesting Delta's done really well on the premium side
of things. It seems like they've really had some strong
growth on offering the premium cabin versus the main cabin
that in a recent earnings call they mentioned has performed
stronger than just that sort of regular cabin. So there
is that you have to be on one side of
the other, right, you either have to be catering to
premium or you need to be catering to sort of
(32:48):
the discount.
Speaker 2 (32:50):
And I think, you know, Spirit and other airlines have
been talking about going upmarket with you know, different offerings.
You know, Jet Blue did that years ago. Southwest is
now talking about doing that with some you know, premium
booked options on there. I don't know, I see that
as a mistake. Like again, for a lot of flyers,
it's a prerequisite to have somebody like a Delta, like
(33:10):
an American, like a United, where you know, worst case scenario,
if this flight gets canceled, I can fly out tomorrow
because they've got fifteen flights a day between you know,
Boston and JFK, and I'll be fine. You don't have
that confidence when you're looking at a Spirit and so
you can offer me all the bells and whistles you
want that business traveler on average, where the company is
paying for it, I'm not sure they're going to book
(33:31):
the Spirit flight. That's true. That's true.
Speaker 3 (33:34):
Simple economists can help cut healthcare costs. This is a piece,
an opinion piece out of I believe this is Bloomberg
here where they discuss just cutting down some of the
healthcare costs. We spend four point five trillion dollars a
year on healthcare, and about a third of it goes
to hospitals. One of the ideas mentioned in this piece
is during COVID, there is a bunch of red tape
(33:56):
and bureaucracy as it comes to what type of healthcare
professionals can admit certain types of services, and we can
all agree that those need to be in place. You
obviously don't want a nurse performing open heart surgery, you
need some expertise in training behind it. However, they mentioned
here loosening some of the restrictions like they did during COVID,
having physicians' assistants and Minister of Vaccines and some other
(34:16):
simple treatments out there allowed for some savings on the
healthcare side of things. I'm for anything that could potentially
improve or make our healthcare system more efficient. To be clear,
this is not my expertise, and I'm just relaying an
opinion piece here, But I did find the thought exercise
interesting because it's an area of the market that we
can all agree is a bleep show.
Speaker 2 (34:37):
Yeah, you know, I think there's a number of areas
of licensure that we take issue with. Now. You know,
it's one thing when states regulate barber's state by state
and you have to go get a new license when
you go from Massachusetts Rhode Island. It's definitely a different
story when you're talking about as heart surgeon that's going
from state to state. But you know, the example that's
(34:58):
given here is that foreign trained doctors must overcome a
wall of state and federal restrictions before they can practice,
even those with decades of experience, have to pass a
standardized exam, and then they have to repeat their residency
program and apply for state licensure. Some of these things
do seem extreme to me from an outside perspective here,
and there's gonna be huge resistance to changing them because
(35:19):
it brings down wages. To be clear here, but there's
some stuff here that looks like unnecessary bureaucracy. All the
time we have for today's addition to the Financial Exchange,
will be right back at it tomorrow. Folks, have a
great rest of your day.
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 Mike Armstrong and Paul Lane, 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 Boss and making
a donation today. The DAV five K Boston is presented
(01:04):
by Veterans Development Corporation. Face is the Financial Exchange with
Mike Armstrong and Paul Lane.
Speaker 2 (01:12):
Good morning, and welcome back to the Financial Exchange. It
is Mike Armstrong, Paul Lane, and Tucker Silva with you
on a Tuesday morning. After yesterday's all time highs, We've
got equity markets largely in negative territory here. Dow is
off one hundred and sixteen points a quarter of a percent,
SMP's off twenty a third of a percent. Nasdak leaned
the way down, off one hundred and fifty six points
(01:33):
or eight tenths of one percent. Bond market ten year
treasury yields sitting steady at about four point zero five percent.
I'm rounding there slightly. Oil markets back down five percent
after the announcement or not announcement, but report from the
Washington Post that Israel is not expected to strike Around's
oil industry. Prices on West Texas Cruse sitting at seventy
(01:56):
dollars flat at the moment, with a again three dollars
eighty cent drop or five percent drop this morning. In trading,
Gold sitting at twenty six seventy eight per ounce. Anything
else catching your eyes this morning Paul market wise.
Speaker 3 (02:13):
No, the biggest thing for me, I was just noticing
that that dropping oil is notable. I'll see in a
little bit of a relief there five percent drop, So
that to me was probably the biggest standout.
Speaker 2 (02:24):
We'll be joined in the next segment by Corey Adams
from Robert Half as folks head into that all important
year end time where salary negotiations kickoff, So giving us
a twenty twenty five salary guide. That'll be, like I said,
after the next break, right after trivia. But our first
story today is from Alice Schreger, columnist at Bloomberg, and
(02:45):
I don't know jumping on the Mark Fandettian bandwagon here.
Jerome Powell is not the greatest FED chair ever. This
comes amidst I think, you know timely report here with
JP Morgan Chase, I think on Friday publishing a piece
basically calling it for the for the soft landing, saying, look,
you know, by our own metrics and our own definitions
(03:05):
here we believe the FED has orchestrated a soft landing
of this economy. We are not in a free fall
for unemployment, inflation, prices have calmed down, and calling it
for the soft landing, which you know, we ourselves on
this show, we've apparently a slightly different definition of it
than JP Morgan Chase. We've been saying, look, if the
(03:26):
economy gets to a point where both inflation and unemployment
finished the year under four and a half percent, then
we'll give it to them. So thereby we can't really
grade it until January, but certainly we seem to be
heading in that direction. Unemployment is still below four percent,
well below it now at four to one, and inflation
is sitting around three. So that would that would class
categorize as a soft landing by our own definition if
(03:48):
we get there. And I have to say that I
think that's fairly remarkable in terms of an achievement based
on history. History has been that inflation is very volatile,
has a lot of points where it comes back, and
in almost every instance it's taken a recession to get
rid of inflation. So far inflation's coming way down. We
(04:09):
don't have a recession on our hands, and I think
that is something to applaud. Allison's point is not about that.
I think she too would applaud the actions of the
FED over the last year or two. Her point is
merely we could have avoided a lot of this had
the FED acted differently in twenty twenty one and twenty
twenty two. Where do you buy in where do you
(04:30):
diverge from Allison's opinions on this stuff?
Speaker 3 (04:33):
I would diverge because people She's not the first one
to make this point. A lot of people have played
Monday Morning quarterback on the decisions made in twenty twenty one,
in particular, where we were coming off of a pandemic
that no one had seen the likes of in one
hundred years, and there wasn't a playbook on how to
properly operate the economy to maintain full employment and keep
(04:56):
you know, interest rate or keep inflation under control when
you have an economy that was shut down in the
midst of reopening. And I wouldn't be overly critical of that.
The piece that I would agree with her is in
twenty twenty two, how long the support continued for That's
where I think you and I share that view that
it continued longer than necessary. There was clear signs that
(05:19):
the economy had avoided any substantial recession. It was a
very quick one that occurred in twenty twenty and it was.
It was very clear that we had sort of rounded
out of that, and the continuing purchases of mortgage backed
securities and other inflows of dollars into the economy could
have been shut off a little bit quicker. That's where
I would agree, but I would diverge on being overly
(05:41):
critical of the actions in twenty one.
Speaker 2 (05:43):
Yeah, So to remind folks of all the actions, I
mean very obviously, the Federal Reserve was bring rates to
zero immediately when the when COVID became clear what was
happening there. So that was one action they took, and
I think totally justifiable in the face what we were
dealing with. Very justifiable. They also then went on a
(06:04):
bond buying spree. They ended up buying I don't know
how much a month. It was something I think eighty
billion a month. Rings familiar to me, but I could
be off on that figure. Of both mortgage backed securities
as well as government securities. Why would you do that, Well,
it builds an additional a new buyer into that market,
and when you have a limited number of buyers buying bonds,
(06:24):
what happens Prices go up and yields come down. It
also effectively by doing so, backstopped the bond market as
a whole. So if you remember the early stages of COVID,
like April of twenty twenty, I remember one of the
major cruise lines basically on the cusp of taking a
deal with some private equity and hedge funds that was
(06:46):
just going to kill them. It was like a sixteen
percent interest rate on debt and convertible into stock, and
that was announced on like a Thursday. The FED stepped
in on a Friday, and then that same company went
and financed debt at like nine percent or something like
that the day after. So the risk of going out
of business in twenty twenty was very low for large companies.
(07:08):
Different story for small ones, but for big businesses, really
tough to go out of business. I'm of opinion that
you can basically justify everything the FED did in twenty twenty.
You can make an argument that it was overdone, but
I think anything that the FED did in twenty twenty
to save this economy was relatively justifiable. The further away
(07:29):
you got from the COVID lockdowns, the less justifiable it became.
And to your point, still buying bonds at a relatively
big clip in twenty twenty two, completely unjustifiable in my view,
and led to what we're seeing in the housing market
right now, which is large swasts of the country home
prices having appreciated thirty forty percent over the last five years,
(07:51):
and no one wanting to sell because you could get
a hell of a deal on a mortgage over the
last you know, in that twenty twenty to twenty twenty
two time period when the Fed was artificial suppressing mortgage rates,
because make no mistake, that's what they were doing. They
were artificially suppressing mortgage rates to make it easier for
people to get cheap debt, led to what we see now,
(08:11):
which is housing being extraordinarily expensive, And if you couldn't
get into a home during that period of time, you're
kind of locked out at this point to a degree.
So I think there is a compelling argument that, yeah,
keeping going with these bond buybacks. You know, Congress has
places to blame here too, Right, Should they have been
paying unemployment at such an elevated level through twenty twenty two?
(08:33):
Should they have been waiving payments on student loans until
twenty twenty four? No? Probably not plenty of blame there too,
But I think the FED again to get these mistakes
are justifiable and understandable. I think don't think they should
have been made. They were too slow to raise interest rates,
too slow to cut out the bond buying programs, and
(08:56):
I think that led to much of the inflation that
we saw in twenty twenty two. All I think that
does is keeps them from the top list of best
federal reserves that we've ever seen. You know, a lot
of their actions over the last few years have turned
out to be outstanding. I would have been so, you know,
if you're looking back on this period of time, I
(09:17):
think there's lessons to be learned here. It's tough. It's
pretty easy to play Monday morning quarterback. I will admit
that that. You know, we have a lot of hindsight
now of how this all played out, but it did
seem obvious in twenty twenty two that rates need to
be higher and these bond buying programs probably needed to
come to an end before they actually did. I agree.
Speaker 1 (09:38):
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. Face is the
Financial Exchange Radio Network. Miss any of the show. Catch
(09:58):
up in your convenience by is the thing Financial Exchange
Show dot Com and clicking the on demand icon, where
you'll find all of our interviews in full shows. This
is your home for the latest business and financial news
in New England and around the country. This is the
Financial Exchange Radio Network.
Speaker 4 (10:17):
This segment of the Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
The US Virgin Islands are Saint Croix, Saint Thomas, and
Saint John. Summer's over, so now's the time to start
looking at a fabulous holiday vacation, and there's no better
place than the US Virgin Islands. Enjoy perfect weather, world
class dining, incredible beaches and a vibrant nightlife. No passport
(10:37):
is needed, and there's no money to exchange.
Speaker 2 (10:39):
Take your next.
Speaker 4 (10:40):
Vacation in America's Caribbean paradise the United States Virgin Islands.
Speaker 2 (10:43):
Go to visit.
Speaker 4 (10:44):
USVII dot com to book your trip. That's visit USVII
dot com.
Speaker 2 (10:48):
Corey Adams from Robert Half joins US now to talk
about their twenty twenty five Salary Guide. Corey, thanks has
always for joining us.
Speaker 5 (10:55):
My pleasure good to be here.
Speaker 2 (10:56):
So first things first, we're four and a half years
out from the beginning stages of COVID. I know a
lot of work is still being done remotely, but I
know in our own office, and you know, speaking to
my wife who works in financial services as well, there
has been a major shift back towards in office work.
And how big of a differentiator is that from what
(11:18):
you're seeing both in the hiring and employee side.
Speaker 5 (11:22):
So where we're seeing it, according to the Salary Guide,
really follows right now, and it's a little bit nuanced nationally,
is in the form of compensation, and so what we're
calling it is in office premium. So for jobs that
can be done remotely, sixty six percent of managers are
willing to increase starting salaries for new hires to work
in the office, and on average we're seeing up to
(11:45):
about twenty percent more pay to come in four to
five times a week. And so you know, employers, here's
the why, right employers are offering higher pay because they
value team building. They offer face to face collaboration. As
we've talked about over the past few months, it creates
at an overall better onboarding experience and new hires, and
so there's a chance that this trend is likely to
(12:06):
continue as companies continue to focus on maximizing productivity and
improving team dynamics.
Speaker 2 (12:14):
Corey. When it comes to you know, the other big
trend obviously, you know in office work has been one.
Artificial intelligence seems to be the only thing that people
are talking about these days. Chuck and I were talking
last week or the week before, both of our all
the matters are offering artificial intelligence courses at their schools.
How big of an ask is this for new hires?
(12:36):
How big of an expectation is now built in that
you're going to have some level of expertise in white
collar work for artificial intelligence.
Speaker 5 (12:46):
Yeah, I would categorize it as it's moving almost to
a necessity. And so the research that we have shows
that more than half of hiring managers say that advancements
in AI and automation is basically reshaping the skill set
that's needed to operate on a day to day basis.
So additionally, thirty seven percent are bringing contract down to
(13:06):
actually help support AI related projects. And then this is
actually from a separate research project that we did. Ninety
percent of tech leaders plan to implement initiatives involving AI
this year, but ironically a little bit less than half
site that they actually lack the AI experience as one
of their biggest barriers to success. So bottom line is this,
(13:28):
I think many of the top skill sets that are
in demand right now have one thing in common. It's AI.
So tech leaders of all sizes cited AI and machine
learning as the top area with the skills gap is
most evident.
Speaker 2 (13:45):
What industries do you think are going to be, you know,
looking for the biggest increases when you take a look
at at your surveys and what you're expecting for twenty
twenty five, Obviously there's been a lot of pressure on tech.
You've seen I would say, you know, the biggest announced
layoffs that I've seen in any way have been in
the tech sector. So I would imagine, you know, salary
increase anticipation are pretty low there. But what other industries
(14:07):
are you seeing that are expecting some big bumps in pay?
Speaker 3 (14:11):
Yeah?
Speaker 5 (14:11):
So just real quick too, before we give you the
we'll call the top four growers. And I think some
of your listeners will be happy to see where accounting
and finance falls. But when we talk about wage growth,
I mean it's basically been moderate, right, So the Uereau
of Labor Statistics reported that wages and salaries increased four
point one percent year every year, and that's from last
June to this June. However, and you guys mentioned this
quite a bit, the inflation has had an impact on
(14:33):
the significance of those increases, So adjusted for inflation, wage
and salary increase end up being on average about one
percent for the same period. But to answer your question,
the top four industries that we saw the most significant
increase in salaries from last year going into next year,
Accounting and finance came in at three point six percent.
That was followed closely behind administrative and customer support at
(14:56):
three point five percent, and then your last two that
I'll give you is marketing, creative was three point four percent,
and then human resources was four. Into your comment, technology
was certainly towards the bottom of the run.
Speaker 2 (15:07):
Here are we finally seeing some trends in you know,
I don't know how old the youngest baby boomer is
these days. I know we've talked about this, Tucker. I
don't know if you know off the top of your head,
I would think early sixties. You've got the youngest baby boomers,
the largest generation of workers that has now been moving
into retirement. How have managers been handling this? Is it
playing a big role in hiring plans for twenty twenty five?
Speaker 3 (15:32):
It is?
Speaker 5 (15:32):
And I'm glad you brought this up. And the reality is,
like we knew we were going to get here at
some point. So a retirement has basically sharpened organizations priorities.
So retirement is a top concern and reality for a
lot of managers, and many of them are implementing strategic
measures to bridge the resulting skills gap. So forty five
percent are investing in training and upscaling their current workforce,
(15:55):
and another forty one percent are actually leveraging the expertise
or retire retires by rehiring them as a part time consultant.
So I thought that was interesting, something we haven't seen
too much in the past.
Speaker 2 (16:06):
Yeah, that's a huge number. And I do know a
lot of you know, retirees out there who are being
offered that part time gig and finding it quite attract
I've speaking to somebody just yesterday actually who has been
out of the workforce for a good year and a half.
I think he's in education. They had a departure there
and was offered this kind of part time gate to
fall out the year, close out the year, and didn't
(16:27):
have much to do with the pay, but something about
it was appealing enough, and I think, you know, hiring
managers should be aware that their workers might be open
to that type of arrangement if the companies can get
around it and get comfortable with it, which again is
a big shift, but I think it's a compelling option. Corey,
I really appreciate you joining us as always. That's Corey
Adams from Robert Half talking to us about the twenty
(16:49):
twenty five salary Guy that they put together. Corey, thanks
so much, appreciate.
Speaker 5 (16:53):
It, Thank you, sir.
Speaker 2 (16:54):
Soon. Taking a look at markets as we head towards
eleven thirty here, the Dow remains in negative territory, off
seventy nine points one fifth of one percent, the S
and P still off seventeen points a third of a percent.
In the Nasdaq off one hundred and thirty five points
three quarters of one percent. Here yield attend your treasury
(17:14):
sitting at four point zero five percent. And then the
big story of the day. Oil price is off more
than five percent this morning, as The Washington Post reported
that Israel has no intention of intentionally striking Iran's oil industry,
obviously a lot of conjecture around what that will look
like over the coming weeks, but nonetheless dragging down oil
(17:36):
prices this morning. We'll be right back with the trivia
winner after this.
Speaker 6 (17:49):
Bringing the latest financial news straight to your radio. Every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
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.
Speaker 2 (18:12):
In what has to be the most disappointedly unexciting actual
article with the most exciting headline, the battle between dock
workers and robots isn't over. I'm just picturing a dock worker,
you know, with a cutoff T shirt and like a
thick mustache, chasing a robot down with a wrench. But
(18:33):
that's unfortunately not even close to what we're describing here.
Rather you have the dock workers who are back to
work after I think was it just a two or
three day strike strike, pushing off those negotiations until after
the election in January when it'll probably come to a
head to some degree again, but giving some time to
negotiate here. And one of the big pieces that they
(18:54):
know I still don't know, is it struck struck over
was the automation piece. And this article I think goes
on to talk about how really this is inevitable, and
you might have periods like this where tensions flare up
and you get another strike, but inevitably automation is coming
(19:17):
for you know, every different job and will eventually replace
most of what we do today in one way, shape
or form, or augmented in some way, shape or form.
New jobs will be created on the backs of all that.
But I think doc work is almost certainly going to
continue to be automated and there's almost nothing the union
can actually do about it.
Speaker 3 (19:37):
They did a great job in this piece, some bloomberg
of raising the parallels to the late nineteen fifties where
basically Malcolm MacLean came up with the idea behind the
container ship that is used so frequently today. You had
fifty thousand longshortmen work in the docks of New York
in the nineteen fifties. You now have forty five thousand
long shoremen all throughout the coast from Maine to Texas.
(19:59):
So this shows you how the industry evolved over time,
and a similar thing could very well occur in this
instance where in the late nineteen fifties, what they ultimately
came to an agreement on is that they would not
guarantee all the jobs of long shortman, but rather keep
a small workforce on at a higher paid level. You
could very much see the parallels in today's world with
(20:21):
as automated automation picks up, you're still going to need
a contingency of workers at the particular porks to make
sure everything is running appropriately. But ultimately it's not going
to be the same number of employees that is going
to be required. And this is just the way industries
and businesses evolve to increase productivity. This comes with it.
You can't fight back against technology and it evolving over time.
Speaker 2 (20:45):
Yeah, and I'm not trying to be anti union or
anything with all. This is just the fact I mean
even let's assume that they did get some commitment from
the ports to not automate further, which again I think
is unlikely. But let's say you did it, and across
the entire easterncy board there's no further automate. What that
means is it's just more expensive and more costly and
more time intensive to get your stuff loaded up and
(21:08):
offloaded at US ports. We're a world economy here, so
if that happens, what am I going to do? Well?
If the Port of Saint John in New Brunswick decides
to automate and make it cheaper and easier to offload goods,
then I'll do it there and I'll drive the stuff
down through Maine. If Mexico suddenly becomes far more effective
(21:32):
at offloading goods in I don't know where's the closest
port to the US border. I don't even know the
name of it because it's irrelevant because we automate here.
Nobody delivers their goods to Tampico, Mexico and drives them
up the border because it's not necessary. But guess what
if we become non competitive because of union contracts in
(21:52):
the Eastern United States, they will find other ways to
get goods into the US and deliver them to households
at a cheaper, more effective cost. So again, automation, it's
coming for all of our jobs. It just depends at
what pace and to what degree we're able to retrain workforces.
And that's admittedly an area that we have been abysmal
(22:13):
at for decades in the United States, like whether it's
through outsourcing to other countries and job loss throughout the
Rust Belt, whether it's you know, automation of jobs in
auto manufacturing, like all those things are necessary. What the
United States has really failed to do is come up
with a comprehensive retraining policy to get people back in
the workforce in other areas. Folks want to talk to
(22:35):
you about the live broadcast of this show. We're going
on the road. We did one in Springfield a few
weeks ago. We're heading to Hyanas on October twenty fourth.
We'll be doing a live broadcast of the Financial Exchange
on October twenty fourth of the Double Tree Resort in
Suites and Hyenas will be then hosting a seminar after
the show. So live show from ten to twelve. You
(22:55):
can sit in on it and talk to us. Between breaks,
we'll be doing the live podcast from the hotel, and
then at noon we'll be doing a free lunch with
the Armstrong Advisory Group. Really a Q and a session
about whatever you want to get into with the folks
here at Armstrong, but I'll certainly be talking about the
upcoming election economic policies that the two candidates have proposed.
Ed Lambert from WXTK is going to be joining us
(23:19):
for that live lunch and seminar that will be putting on,
and so really just an opportunity to sit down with
the host of the Financial Exchange, host of the Morning
show down on XTK and ask questions that you might
have and hell, you get a free lunch out of
it too. That's nothing to sneeze. That's why I'm going
anyway about the rest of you guys. Once again, the
(23:41):
date is October twenty fourth. We'll be doing the Double
Tree Resort and Suites on Hyanas. You can sign up
two ways. One go to Armstrong Advisory dot com slash
events a bunch of information on the event there. You
can also call us at eight hundred three nine three
four zero zero one. Seating is limited here, so you
do need to make a reservation if you're going to
(24:01):
attend again, you can do that by calling us at
eight hundred three nine three four zero zero one, or
go to Armstrong Advisory dot com slash events.
Speaker 1 (24:10):
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 (24:26):
Sometimes we cover stories on the show that I just
cannot even begin to relate to, and this next one
from the journal is one of them. To lure home
buyers builders still have to help with high mortgage costs.
It outline stories of builders in other parts of the
country not here to in New England need to offer
five percent mortgage rates to get home buyers in there
and induce them. This seems like a foreign concepts to
(24:48):
everyone here in New England. I fully understand that. I
believe Connecticut still has the worst housing inventory levels compared
to twenty nineteen of anywhere in the country as far
as I know, But there are seven states that are
sitting on more housing inventory now than they were in
twenty nineteen. Those are Tennessee, Texas, Idaho, Florida, Colorado, Utah,
(25:08):
and Arizona. You can think about those states and really
I list all of them off as big desirable places
to move to during the pandemic, right, how many people
were talking about Nashville or Austin, Texas, big companies relocating
to those places. Idaho drew a ton of people wanted
to work remotely from Idaho Florida obvious, but a ton
(25:28):
of migration to Colorado and Arizona and Utah as well
for the lifestyle trade off that you had there and
a lot of building that occurred there as well, and
now finally starting to catch up with it, it would
seem here with home builders finally getting some product to market.
Speaker 3 (25:43):
Yeah, this is one that I was diving into all
sorts of different metrics because to your point, Mike, it's
just unfathomable to have a buyer around the Greater Boston
area offering you a lower mortgage rate just to buy
their house because there's so seldom any options around any
of these towns rounding our studios, And the same applies
throughout most of the New England area as well as
(26:04):
you point out with Connecticut. But the fact that it
is important to note the new home building sector of
the overall housing market is a smaller portion of it.
Right Ultimately, the existing home sales inventory is the biggest
percentage of the housing market that makes transactions and volume
(26:24):
move on a monthly basis. But still very surprising to
me to see that you saw an increase and appetite
for these builders to download homes because people are just
dying for them in so many different parts of the
country because of underbuilding over the last fifteen years or so.
Speaker 2 (26:41):
I still the Connecticut thing, I just cannot wrap my
head around. So in September, this is according to data
from the Saint Louis Federal Reserve September of twenty twenty four,
the level of available housing is twenty eight point six
percent of what was available in September of twenty nineteen. Wow,
like mass chuse and stuff, it's half that's bad. Connecticut
(27:03):
is just a different world right now in terms of
its housing market. It is just absolutely wild to see
that twenty eight point six percent of twenty nineteen levels
just craziness. Let's take a quick break here on the
Financial Exchange when we come back Stack Roulette.
Speaker 1 (27:20):
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all
morning long. This is the Financial Exchange Radio Network. Miss
any of the show. The Financial Exchange Show podcast is
available on Apple, Spotify, and iHeartRadio. Hit the subscribe button
and leave us a five star review. This is the
(27:41):
Financial Exchange Radio Network.
Speaker 2 (27:57):
Paul, low cost airlines have one job and they're failing
at it. That's the piece from Bloomberg. Here Thomas Black
wrote the piece, and here's the premise. If you're a
low cost airline, you need to do really just one thing,
and one thing well, no frills, cheap airfare that's at
(28:19):
least reasonably on time, so that you can expect to
get where you're going. They are delivering on the low
cost no frills piece. I will give them credit there,
Spirit Frontier, Allegiant. These these budget carriers, the seats are tiny.
You barely get a drop down what is that called
(28:41):
trade table, barely get a drop down tray table. No
Internet on these flights, like they're not a lot of
bells and whistles, and you get charged for every other thing.
But as I was sitting in the airport this morning,
I was flying from Indiana to Boston this morning, and
I flew Delta mainly because that was the cheapest flight
available for the times that I needed. There are like
(29:02):
four people in the check in line. We walked up there,
we nicely checked our car seats and walked over to
CSA pre check and flew through security like it was
a very pleasant experience. And right behind me was the
line for Frontier Airlines, which you know, based on my
rough estimations, looked to be about two days long. It
(29:25):
was enormous. There were hundreds of people sitting in line
to check their bags on Frontier because, by the way,
check the luggage is cheaper on some of these airlines
than carry on luggage. And beyond that, what they seem
to be really failing at, beyond the customer service piece,
is on time performance and reliability. And I guess furthermore
(29:46):
would be confidence that they can even continue to exist
because they keep losing money. Spirits been talking about declaring bankruptcy,
and that becomes a bit of a self fulfilling prophecy,
right Like if you another example here, I was looking
at flights for February, Bak, we're not really planning on
going anywhere that's they would fly a floor, But I
was curious and Spirit was by five hundred by fifty
(30:08):
percent was the cheap now thirty percent was the cheapest
airline out there to get where we were looking like
a Caribbean type vacation. Spirit was five hundred dollars cheaper
per seat than the next low cost airline. And I
personally looked at that and said, would you be willing
to roll the dice on whether or not Spirit will
I be able to actually get you down there? By
February they're talking about bankruptcy. I doubt they're going to
(30:30):
cease to exist, but I wouldn't book a ticket on
a company that's talking about bankruptcy. Sure, sure, I'd be
quite nervous about that. And if that actually maybe I'm
alone in that. But if that continues, then Spirit can't
book revenue. That's our real problem.
Speaker 3 (30:45):
It seems like some people have questioned whether or not
there can be these discount air flyers out there, but that's.
Speaker 2 (30:51):
Just there's demand for it.
Speaker 3 (30:53):
Like you mentioned, there's always going to be demand to
find the cheapest flight out there. Ryanair is a good
example of a company that has done well with this
business model over time. Their on time performance is much
stronger than that of Spirit and some of the other
discount airlines here Frontier as well. So whether those two entities,
(31:13):
Spirit and Frontier need to adjust some of the airports
that they fly into or create a buffer between flights,
there's something that needs to be done on that end
of things to get execution to a better point.
Speaker 2 (31:26):
It could just be this market right now, like people
have been willing to splurge over the last four years.
I wouldn't have necessarily thought that that would follow through
to airline fair because look, the experience of Americans buying
airlines has been give me the lowest marketed sales price,
and that's what I'm going to book. I don't care
if it's a dollar cheaper. If you know, one airline
(31:47):
is cheaper than the other even with all the other fees,
they book the cheapest possible flight. Either A that's changing
or B. Americans have been so flush with cash that
they've just said, now you know I've flown Spirit before
or didn't love the experience, I'm going to book on
Delta instead. And that's kind of where I've gone to. Right, Like,
I'd be willing to book Spirit were it myself flying
(32:10):
somewhere if I was just the only one reliant on
getting there and in you know, worst case scenario, I'm
late to a business trip. Okay, I'll deal with that.
If I'm flying with my three kids and I need
to wait in an hour and a half line to
check a stroller, forget it. I'm never flying that again.
Speaker 3 (32:26):
It's interesting Delta's done really well on the premium side
of things. It seems like they've really had some strong
growth on offering the premium cabin versus the main cabin
that in a recent earnings call they mentioned has performed
stronger than just that sort of regular cabin. So there
is that you have to be on one side of
the other, right, you either have to be catering to
premium or you need to be catering to sort of
(32:48):
the discount.
Speaker 2 (32:50):
And I think, you know, Spirit and other airlines have
been talking about going upmarket with you know, different offerings.
You know, Jet Blue did that years ago. Southwest is
now talking about doing that with some you know, premium
booked options on there. I don't know, I see that
as a mistake. Like again, for a lot of flyers,
it's a prerequisite to have somebody like a Delta, like
(33:10):
an American, like a United, where you know, worst case scenario,
if this flight gets canceled, I can fly out tomorrow
because they've got fifteen flights a day between you know,
Boston and JFK, and I'll be fine. You don't have
that confidence when you're looking at a Spirit and so
you can offer me all the bells and whistles you
want that business traveler on average, where the company is
paying for it, I'm not sure they're going to book
(33:31):
the Spirit flight. That's true. That's true.
Speaker 3 (33:34):
Simple economists can help cut healthcare costs. This is a piece,
an opinion piece out of I believe this is Bloomberg
here where they discuss just cutting down some of the
healthcare costs. We spend four point five trillion dollars a
year on healthcare, and about a third of it goes
to hospitals. One of the ideas mentioned in this piece
is during COVID, there is a bunch of red tape
(33:56):
and bureaucracy as it comes to what type of healthcare
professionals can admit certain types of services, and we can
all agree that those need to be in place. You
obviously don't want a nurse performing open heart surgery, you
need some expertise in training behind it. However, they mentioned
here loosening some of the restrictions like they did during COVID,
having physicians' assistants and Minister of Vaccines and some other
(34:16):
simple treatments out there allowed for some savings on the
healthcare side of things. I'm for anything that could potentially
improve or make our healthcare system more efficient. To be clear,
this is not my expertise, and I'm just relaying an
opinion piece here, But I did find the thought exercise
interesting because it's an area of the market that we
can all agree is a bleep show.
Speaker 2 (34:37):
Yeah, you know, I think there's a number of areas
of licensure that we take issue with. Now. You know,
it's one thing when states regulate barber's state by state
and you have to go get a new license when
you go from Massachusetts Rhode Island. It's definitely a different
story when you're talking about as heart surgeon that's going
from state to state. But you know, the example that's
(34:58):
given here is that foreign trained doctors must overcome a
wall of state and federal restrictions before they can practice,
even those with decades of experience, have to pass a
standardized exam, and then they have to repeat their residency
program and apply for state licensure. Some of these things
do seem extreme to me from an outside perspective here,
and there's gonna be huge resistance to changing them because
(35:19):
it brings down wages. To be clear here, but there's
some stuff here that looks like unnecessary bureaucracy. All the
time we have for today's addition to the Financial Exchange,
will be right back at it tomorrow. Folks, have a
great rest of your day.
Popular Podcasts
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.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!