November 15, 2024 • 36 mins
Chuck Zodda and Mike Armstrong discuss the current state of the housing market and only a few are able to cash in on the huge run up in values. Why are regulators targeting Microsoft? Could major changes be coming to credit cards under Trump? The latest insurance scam is hilarious. Somebody needs to learn to tell Mark Zuckerberg "NO!" Paul LaMonica of Barron's joins the show to chat about Angie's List possibly being spun off.
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,
(00:43):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting dav fik dot Boston and making a
donation Today. The DAV five K Boston is presented by
(01:05):
Veterans Development Corporation. This is the Financial Exchange with Chuck
Zada and Mike Armstrong.
Speaker 2 (01:13):
As we continue into the second hour. Here on the
Financial Exchange is Chuck, Mike, and Tucker with you. And
we got stock selling off today, with the Dow Jones
off three hundred and eleven points, the S and P
is down seventy two, and the Nasdaq down three to eighty,
so anywhere from about a three quarters of percent to
a two percent decline on your major US indicase tenure
Treasury is selling off as well, though not as much
(01:34):
as it was this morning at one point to touch
four point five percent. It's back down to four point
four to one, still up two basis points from yesterday.
We've got oil down thirty one cents a barrel to
sixty eight thirty nine on West Texas Intermediate and the
TRIPAA National Averagur gas prices unchanged for the third straight
day at three oh eight and four tenths of a cent,
(01:56):
Gold up two dollars and thirty cents an ounce to
twenty five to seventy five and twenty cents. And so, Mike,
we sit here right now with the S and P
five hundred and fifty eight seventy six as of the
latest tick. And I'm struck by the fact that this
is the same place the market was at on October seventeenth,
and so it's been basically a month, and even including
(02:19):
the bump that stock saw after the election, we're pretty
much in the same place we were a month ago.
Speaker 3 (02:26):
Now, yeah, the Trump bump, the four percent rally that
we saw on Wednesday of last week has now been
about cut in half. I think the markets actually more
than that. The markets are now from Tuesday to now
are up about one point eight percent from the close
on Tuesday, and so, yeah, the things are.
Speaker 4 (02:49):
That that's normal.
Speaker 3 (02:50):
We saw a big acceleration inequities as a bunch of
hedges rolled off, and I think that this is kind
of moving into that next stage of Hey, what does
this economy look like? And what does the Trump two
point zero plan do for the economy.
Speaker 2 (03:06):
Let's talk a little bit about the housing sector on that,
because there is at this point no more important sector
for the immediate trajectory of the economy than the housing sector.
It's often been said that housing leads the economy. And
we've got this piece here from the Wall Street Journal.
It's titled America's homes are piggy banks that few people
can afford to raid, And basically.
Speaker 4 (03:29):
It's kind of a good thing, bad thing. Piece.
Speaker 2 (03:32):
The good news is that Americans have more equity in
their homes now than any time in human history.
Speaker 3 (03:38):
Thirty five trillion dollars of equity, even when adjusting for inflation.
Speaker 2 (03:43):
Yeah, it's the highest level of equity that we've had.
So to anyone looking at the housing market and being like, oh,
like this is bad. This is going to cause, you know,
the next great downturn, it's not really looking like it. No,
delinquencies on mortgages are really low. It's it's just not there.
But here's the downside to this. There's all this equity
(04:06):
in here, but if you want to get any equity
out of your home, you have one of two options.
You can either refinance your mortgage with a with a
cash out refi, in which case, hey, your old mortgage
where you were paying two and a half percent, three
and a half percent, four and a half percent, even
five and a half percent on whatever remaining debt you had,
is gonna go up to a rate closer to seven
(04:28):
and then you're gonna pay seven on whatever else you
take out, or you take out a home equity line
of credit, and when we look at the rates on those,
they're typically a little bit higher than what you even
see on mortgages. You're talking to like seven and a
half to eight in a lot of cases, and those
rates float. If it's a home equity line of credit
or if you're doing a fixed home equity loan, those
(04:49):
are often a little bit higher as well. So again
you're like seven and a half to eight, And so
a lot of Americans look at it and they're kind
of going, gee, I got all this equity in my
house because prices have gone up. Not really sure I'm
gonna do a ton with it. And I say this
even as we are seeing growth in the amount of
home equity loans and home equity lines of credit that
are being taken out. But it still isn't something where
(05:13):
it's it's enough to generate, you know, meaningful growth in
the economy.
Speaker 3 (05:16):
Yeah, I think the last option in terms of unlocking
home equity as you sell the home. But that's clearly
not happening to one or rent agree, right, which, by
the way, like you do, wonder do we get to
a point where retirees just say, oh, forget this, I've
got a million dollars in home Like, that's not an
(05:37):
unrealistic scenario here in New England of having half a
million to a million dollars in home equity. And do
you get people that just say, forget this, I'm unlocking
the equity and I'll just rent for the rest of
my life. I don't care. I don't think so. But
you think about that math equation, and there is so
much equity to be unlocked in these homes for retirees
that just can't find a reasonable replacement place in the
(05:59):
purchase market. But again it comes back down to the
state of things as Trump is entering the White House
come next year. In October of twenty sixteen, there were
one point four million homes for sale across the United States.
And by the way, like at the moment, I don't
think a lot of people felt like October of twenty
(06:19):
sixteen was this great buyer's market. We had just come
ripping back from the weakness of twenty eleven. Today there
are only nine hundred and fifty four thousand total units
available on the market. Do we have a significantly fewer
even just pre COVID. Right pre COVID October of nineteen,
there were one point two million properties for sale on
(06:39):
the market. So yeah, it remains this conundrum. I do
think that should you get equity line rates down into
the maybe five to six percent range, people are now
starting to get used to these rates and might start
accessing some of that capital. But I agree with you
Chock at seven and a half, I don't know a
lot of people that are itch and to borrow and
(07:01):
Mike absent.
Speaker 2 (07:03):
A Again, the one thing that I think could bring
interest rates down meaningfully is if you get a significantly
smaller annual deficit going forward in the US economy. But
absent that, the only thing that gets home equity line
rates into the fives is a recession.
Speaker 4 (07:25):
Tell me I'm wrong.
Speaker 3 (07:27):
Yeah, I'm trying to think of how much further that
means the FED brings down rates to two full percentage
points to get equity line rates down there in that
But I mean, look.
Speaker 2 (07:35):
The FED probably has to cut rates three and a
half to four percent to get long term rates down
to there.
Speaker 3 (07:40):
But that's but that's my point is long term rates, yes,
but home equity line rates are going to move right
with what the Fed does. So to get home equity
line rates down there, you probably do need at least
one and a half percent of additional cuts. And I'm
with you, I don't think you get there in the
short term without a recession over two years maybe, but
not in the short It's it's a tough path to
(08:01):
get there.
Speaker 2 (08:02):
And so I'm looking at this chart from the Wall
Street Journal. It's it's a great chart. Also, it's like,
what rates do people have on their outstanding mortgages? If
you look at mortgages below six percent, eighty four percent
of current loans that are outstanding are below six percent.
It's it's a huge number still, and it's gonna get
(08:23):
smaller each year because there is a portion of those
a some of the ones that are lower they just
you know, they they run their cycle and and they're
no longer outstanding because they're paid off.
Speaker 4 (08:32):
So that's part of what you see. Part of it is, hey,
even if.
Speaker 2 (08:35):
Someone has, you know, a four and a half percent loan, Hey,
you know what, we're getting a new job. We got
to move from uh, you know, Austin where we moved
in twenty twenty one.
Speaker 4 (08:45):
With the low rate. We gotta move back to Carancisco. Ah,
come on, you gotta go calum Zoo there. No.
Speaker 2 (08:49):
If if I'm going Topeka, I always do Topekaa, I
always do Topeka. Yeah, we got to move to Topeka
because that's gonna be the you know, the new tech hub.
It's okay, fine, I guess you know, since prices are
so low in Topeka. Yeah, we can take on the
seven percent mortgage, right.
Speaker 4 (09:06):
The other piece that I have to just go back
to every time on this.
Speaker 3 (09:10):
You know, there's been a lot of debate, and while
I still see for a lot of people how renting
can be valuable and if you do it the right
way and save what you would otherwise spend on your
mortgage and invest for your future on those savings, it
can be beneficial. Can we just go back to talking
about the thirty year fixed rate mortgage? Because there is
(09:32):
no better deal in the history of deals than the
thirty year fixed rate mortgage in the United States, Like
that thing does not exist in many other parts of
the world, and in no other area of finance. Can
you buy something with somebody else's money and have a
deal where the interest rate can only go down.
Speaker 4 (09:53):
It's a pretty good deal. It's a really good deal.
Speaker 3 (09:56):
And so I know there's people that are worried about
buying that more, you know, buying that home, taking that
mortgage at these prices, and I would urge you to
be cautious. If you cannot afford that payment at seven percent,
then you should not take that mortgage because you cannot
rely on this stuff going down. But if you can,
and you want to be there for ten plus years
(10:18):
in that home, I don't know that I would let
the interest rate alone scare me away from that because
of the fantastic potential deal you have of being able
to refinance it at some point.
Speaker 4 (10:30):
Yeah.
Speaker 2 (10:30):
Yeah, it's again, it's as you note, it's one of
the great uh again, you look at just the history
of the thirty or fixed rate mortgage, and it has
enabled millions of Americans to accumulate significant wealth in the
way that the otherwise would not have been able to do.
Speaker 4 (10:50):
So.
Speaker 2 (10:50):
Yeah, now, part of that's also because of where interest
rates have gone over the last forty years, So we
also have.
Speaker 4 (10:54):
To consistently and persistently down.
Speaker 2 (10:58):
But yeah, the vehicle that has made it possible thirty
a fixed rate mortgage, take a quick break here. When
we come back, let's talk a little bit about Microsoft's
cloud business and US regulators looking into it. We'll also
do a little bit of trivia here on the Financial Exchange.
Speaker 1 (11:15):
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.
This is the Financial Exchange Radio Network. The Financial Exchange
Show podcast drops every day on Apple, Spotify, and iHeartRadio.
Hit that subscribe button and leave us a five star review.
(11:37):
You're listening to the Financial Exchange Radio Network.
Speaker 4 (11:40):
Mike Piece of the Financial Times.
Speaker 2 (11:41):
US regulators plan to investigate Microsoft's cloud business. Kind of
interesting timing, given, you know, the two months until the
new administration under a real tight schedule here, you know,
it's the It's not many FTC investigations that conclude in
(12:01):
two months last time I checked.
Speaker 3 (12:04):
Yeah, I mean, what are you supposed to do in
that position? Just like sit there and twiddle your thumbs though,
who Lena Kahn in her office? Yeah, I guess you
do just kind of sit there and twitter your thumbs right,
like you're not going to have the job in a
few months.
Speaker 4 (12:19):
So again, I said, she might again.
Speaker 2 (12:22):
Jd Vance has talked about how he's a big Lena
Khan fan. Yea, so we'll see. I think it's unlikely
she has the job, but I don't know.
Speaker 3 (12:31):
So I guess let's first talk about what it is
that Microsoft is being accused of, which is anti competitive
practices when it comes to one of their business units,
which is cloud storage. So just put plane and simple
company like the Armstrong Advisory Group needs to store a
(12:51):
bunch of data. We used to put it all in
a server rack in a closet here. These days it
all goes onto the Microsoft Cloud. And uh, what they're
being accused of here is if say Armstrong wanted to
move our data from the Microsoft Cloud to the Amazon Cloud,
they're going to make it pretty difficult to do so.
Speaker 4 (13:12):
And they can do that in a few ways.
Speaker 3 (13:14):
One, they can make it challenging for their Office three
sixty five products to integrate with that Amazon Cloud.
Speaker 4 (13:21):
They raise costs on those, right, they could raise costs.
Speaker 3 (13:24):
They could say, hey, we're discounting all these services, which
they do. You know, you bundle this stuff together with Microsoft.
We're going to give you a discount on your team's
you know, Microsoft Office Suite and the cloud storage because
you are one bundled customer and oh you took it
away while those costs are going up for your other
unrelated services. Again, this is only really a problem because
(13:46):
of Microsoft's size. Any other company does this, it's normal
course of business. But when you're Microsoft and you do
control probably ninety percent of the you know, Office tools
U s PCs, it does become a little bit problematic.
Is anything going to happen during the Trump administration on
this or sorry, during the Biden administration on this?
Speaker 4 (14:08):
It'd be pretty tough to see the other.
Speaker 2 (14:11):
Thing that I look at on this again, and I'm
someone who's kind of been a cheerleader of some of
the work that the FTC has done because I think
that anti monopoly is one of the best ways that
you can get bang for your buck in terms of
generating more competition, which then means you don't have to
do as much regulation elsewhere.
Speaker 4 (14:28):
Mike, who does this hurt?
Speaker 2 (14:31):
Like, let's say, let's say that Microsoft Office costs too
much for businesses to run relative to what it would
otherwise be.
Speaker 4 (14:39):
Like, who's being hurt by this?
Speaker 3 (14:44):
A few businesses, but tough to show consumer harm and.
Speaker 2 (14:49):
Even on the business side, if you are a small
company with five employees, is the cost of Microsoft Office
on its own car prohibitive for you to run your business?
Because because if it is, then you're not a business.
Speaker 4 (15:04):
Yeah.
Speaker 2 (15:05):
No, it's just not that expensive, like as a percentage
of your overall stuff that you're.
Speaker 4 (15:10):
Trying to do.
Speaker 2 (15:10):
So I guess, look, there might be a there there,
But this is one of the few times where I
look at the FTC over the last few years ago
and I'm not really sure that this.
Speaker 4 (15:21):
Is the best use of your time.
Speaker 3 (15:24):
Yeah, I'm trying to think there was some other stuff
that had been alleged against maybe Microsoft or another big
tech provider on how they penalized customers for switching, and
I don't I don't remember, but I found it much
more compelling than I find this, Like it seems like
a pretty logical course of business to say, look, if
you unbundle our services, all those services separately are going
(15:45):
to become more expensive too.
Speaker 4 (15:46):
Well, I guess here's a question that I'll ask.
Speaker 2 (15:48):
So you and I both have said, or you said, hey,
if a small business does bundling, that's just you know,
doing business right, Like it's it's no problem.
Speaker 4 (15:58):
Its Microsoft's concentration. That's the problem. Will be here. Sure,
let's look at the telecoms.
Speaker 2 (16:03):
Why why is it cool that you know, Verizon and
AT and T in Comcast do all this bundling because
they're basically the same. You know, they all have you know,
somewhere in the ballpark, like twenty five to forty of
that market.
Speaker 4 (16:18):
Right, Why do we allow it there? Why is it cool.
Speaker 2 (16:20):
For telecoms to do you know, bundling where Yeah, if
you throw in a landline that no one ever uses,
the cost of your cable goes down by twenty dollars?
Why is that okay there? But this is not okay here?
Speaker 4 (16:33):
Right?
Speaker 3 (16:34):
I think the only argument you have is that there
are no national and global dominance dominance players like there
is Microsoft. That would be the only real argument. Is Hey,
the the anti competitive behavior that's happening within these telecoms
is only happening on a regional basis.
Speaker 4 (16:53):
But I don't know that that makes it any better?
Is it regional?
Speaker 2 (16:56):
I mean, like Verizon in AT and T and Comcast
are pretty mugey And again, even when the FTC is
you know, if they're pursuing an investigation against Microsoft. They're
limited jurisdictionally in terms of what they can do, right,
Like they can't be like, hey, Microsoft, you're really screwing
over the Namibians. Might be true, but that's not something
(17:18):
that the FTC can cover, right, not going after that one,
you know, like Namibia has got to deal with it
on their own. Unfortunately, just like the EU. Hey, when
there's a problem in the EU with Microsoft or Google, okay,
they deal with it there, but they don't go and
pursue claims based on what's happening in the US.
Speaker 4 (17:35):
So I don't know it's it.
Speaker 2 (17:37):
This is one where I'm kind of like, eh, I
don't know what we're really doing on this one, quite honestly.
Speaker 4 (17:42):
Yeah, I have a bit of an issue with it.
Speaker 2 (17:44):
Looking at markets, the Dow is still off two hundred
and forty five points, the SMP's down sixty five, and
the Nasdaq down three fifty five. So the sell off
that started in the last couple of days continues. By
the way, the NASDAC if it were to close in
the red, which be a heck of a turner if
it doesn't, but if it were, it would be the
first five day red trend for the Nasdaq since twenty nineteen.
Speaker 4 (18:09):
It's been a while. Huh h.
Speaker 2 (18:11):
It's kind of wild given everything. Dear God, that's what
I'm seeing here. Despite everything that went on in twenty
twenty two, the Nasdaq was not read five days in
a row.
Speaker 4 (18:21):
Other indices were, but not the NASDAK.
Speaker 5 (18:33):
Bringing the latest financial news straight to your radio every day,
it's the Financial Exchange on the Financial Exchange Radio Network.
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all
morning long. Base is the Financial Exchange Radio Network, mich.
Speaker 2 (18:54):
Let's talk a little bit about this piece from Bloomberg.
It's talking about potential changes in the credit card landscape
as we head towards the second Trump administration and specifically
looking at hey, the CFPB. Over the last couple of years,
the Consumer Financial Protection Bureau has sought to cap some
(19:14):
of the fees that banks charge on credit cards, things
like late fees and things along those lines. And I
think the question here is what happens to this because
on one hand, during the first Trump administration, I can't
remember if it was the Trump administration itself or a state.
(19:35):
I can't remember who it was. But there was someone
pretty high up who I think was trying to make
the case CFPB should not even be able to exist
based on the financing mechanism for it.
Speaker 3 (19:46):
Yeah, the funding mechanism was created so that Congress couldn't
limit it, which is strange.
Speaker 4 (19:51):
It is kind of strange. Yep.
Speaker 2 (19:53):
That did get rejected by the Supreme Court. But I
don't think that the Trump administration was a huge fan
of the CFPB. So on one hand, you look at
this and you say, Okay, some of these things that
the CFPP is trying to do are likely to be
shot down. On the other hand, one of the things
that President elect Trump put out there during the closing
month or so of the campaign was the idea of
(20:15):
capping interest rates at fifteen percent.
Speaker 4 (20:19):
I think it was ten. Was it ten? I think
it was ten.
Speaker 2 (20:22):
Yeah, either way, the idea of capping interest rates on
credit cards at you know, a.
Speaker 4 (20:26):
Set interest rate.
Speaker 2 (20:28):
And in theory, the way that you would probably do
that that would stand up best to any challenges would
be through the CFPB. But I don't really know what
to make of this because the facts that we have
an evidence from an action perspective are, Hey, the Trump
administration is probably not going to be particularly aggressive on
(20:48):
some of the things that the CFBPB has been pursuing.
But President elect Trump did talk about credit cards and
being too expensive in the last month or so, so I'm.
Speaker 4 (20:56):
Kind of like, what do I do with this?
Speaker 3 (20:57):
I don't know, I'm not sure, but I also want
to be that the proposals that the CFPB had on
credit cards aren't even in effect and likely are not
to go into effect by the time Joe Biden leaves office.
There was a proposal of the cap credit card late
fees at eight dollars, which is a big change from
the current thirty to forty dollars, and that was blocked
(21:19):
by a judge in Texas, and so I one, I
don't believe that Donald Trump's going to pass laws, but
you would probably need to do of capping interest rates
at ten percent. I don't think that i CFPB could
likely do that based on the fact that everything they've
tried to do under the Biden administration is getting blocked.
Do I really believe that The point of this article
(21:41):
anyway is hey, you better watch out because you know
financial companies are going to try and take advantage of
you more under a looser and less empowered CFPB. I
just I can't point to much that I feel like
the CFPB really did to prevent that sort of thing.
Speaker 2 (21:55):
No, so, and you and I have also talked about Look, okay, great,
you cap credit card.
Speaker 4 (22:00):
Eight fees at eight dollars. It's going somewhere else.
Speaker 2 (22:03):
Either interest rates are going to go up, or there's
gonna be another fee somewhere else, or rewards.
Speaker 4 (22:08):
Are coming down. Yeah, it could be any number of
those things. But yeah, I don't know.
Speaker 3 (22:14):
I'm just I'm just not believing that there's going to
be much of a shift on there. So what I
would urge everyone to do is always be vigilant about
things like credit cards that come with big burdensome fees
and late fees and interest rates, whether it's your checking
account or your credit card. But that all actually leads
me well into our guide for the month of November
(22:35):
from the Armstrong Advisory Group Chuck, which is all about
things that you can do in the last what are
we forty five days of the year.
Speaker 4 (22:42):
Here, Now we're getting down to it as we close
in on your end.
Speaker 3 (22:45):
We put together a guide on our top year end
planning tips for folks to get out there for free.
And you know, some of these are actual items that
you can only do before your end, and so it
is important to look at things like a ROTH conversion
or a required minimum distribution or tax loss harvesting, because
if you wait until January, you actually can't do them.
(23:07):
Others on the list I think are just really good
practices to have. Hey, once a year, I pull open
my accounts and check my beneficiaries and read my will.
That's not a bad practice to have here, review my budget,
take a look at my spending patterns, look at my
credit score, pull my credit report and make sure that
there's nothing surprising on there. We come up with all
(23:27):
of this and more, and like I said, it's an
easy read and frankly an easy but important to do
list for before year end. And if you want your
copy of Armstrong Advisor Groups free monthly a guide again,
it's the top year end planning tips and you can
get it by calling us at eight hundred three nine.
Speaker 4 (23:45):
Three four zero zero.
Speaker 3 (23:46):
One will be happy to email you or ship you
a copy of the new guide. Again, it's our top
year end planning tips guide and it's available by calling
eight hundred three nine three four zero zero one.
Speaker 1 (23:58):
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, and estate planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 2 (24:14):
My favorite headline of the year, just in terms of hey,
telling you what the store is going to be about.
Human in bear suit was used to defraud insurance companies.
Officials say, and I don't know if I'll be able
to get through this. It really is just fantastic. So
(24:34):
there was a video in January that was submitted as
part of an insurance claim in California. It was a
brown bear going through a roll's voice that was parked
in the driveway, and it turned out that there were
a couple other videos that were taken as well. In
the three insurance companies ended up paying out one hundred
and forty thousand dollars. And so you started know kind
(25:00):
of looking into it or not. I did, but the
California Department of Insurance started looking into it, and on
Wednesday of this week, after concluding an investigation they called
Operation bear Claw. They determined that the bear was actually
a guy dressed up in a.
Speaker 4 (25:17):
Suit, and the.
Speaker 2 (25:20):
Scratch marks inside the vehicles from the bear clause were
from a callike kitchen accessory usually used to shred meat.
Speaker 4 (25:27):
Now, Mike, yeah, pull or something I do too?
Speaker 2 (25:32):
I have to Yeah, it's and so basically they figured out, okay,
this is people, and they also then arrested for people
on Wednesday. Reuben Tamarazian, Ararat Churkinian, Vaje Murrad Canyon, and
Alifa Zuckerman, all of southern California, are now facing charges
(25:56):
of insurance fraud and conspiracy. It's un clear which of
the men was the bear and which ones were simply
having their cars broken into under false pretenses.
Speaker 3 (26:09):
Yeah, that that part is unclear. I've got the video
open right now and am watching it. And granted it's,
you know, nighttime. It's a pretty far away camera, but
it doesn't look terribly like a bear.
Speaker 6 (26:24):
It doesn't end anything like a bear.
Speaker 3 (26:27):
Specifically, the action of the bear climbing into the car
is pretty humorous, and the best part.
Speaker 6 (26:34):
Is the bear opens the door with ease.
Speaker 4 (26:37):
Right, It's not crawling a clown. Around at the door.
Speaker 3 (26:40):
It doesn't smash the glass, It just casually comes into view,
opens the doorhand like a human being, and then subsequently trashes.
Speaker 4 (26:52):
Like the car.
Speaker 2 (26:54):
You look at like the butt of the bear, and
you can clearly see it's a human butt inside a
suit that's stretching it. Uh, just like I've looked at
I've looked at some bear butts, Mike, that's that's not
that's not a real bear butt, very skinny bear in
this car.
Speaker 3 (27:11):
We're gonna have to start doing, I mean, at this pace,
I think we could, you know, replace our Florida man
story with our weekly California man story.
Speaker 4 (27:18):
This is top notch fraud where it's kind of wild.
Speaker 2 (27:24):
Actually, speaking of kind of wild, one other story that
we have to touch on. Mark Zuckerberg just released a
cover of Get Low with t.
Speaker 6 (27:32):
Pain, available on Spotify.
Speaker 4 (27:35):
No he did it's it's it's on Spotify.
Speaker 6 (27:37):
I can't play it because there's knotty lyrics in it.
Speaker 4 (27:40):
No, can't play it.
Speaker 2 (27:41):
But apparently the soul wants this Zuckerberg, and look, this
is the thing that you can do if you're a
like sent to billionaire. Apparently the song was playing when
he met his wife in high school twenty one years
ago at Harvard before he dropped out, and so I
guess he always wanted to record it with T Pain.
So he probably just paid T Pain a bunch of
(28:03):
money to go and record the song.
Speaker 4 (28:06):
Yeah, I do that. Now here's the question.
Speaker 3 (28:08):
Okay, yeah, you do that right to me, I probably
wouldn't do that where I was Mark Zuckerberg, but I
would do that where I tea even if.
Speaker 4 (28:16):
I'm Mark Zuckerberg. That's just too cringey for me if
I'm Mark Zuckerberg. But yeah, no, the cringey part is
why did you release it to the public. Yeah?
Speaker 2 (28:24):
I understand recording it and being like, hey, you know,
for our twenty first anniversary, I made you the song
that we were listening to when we met with the
guy who.
Speaker 3 (28:34):
Met it right, Oh, like weird but romantic, got it?
Why are you putting it on Spotify?
Speaker 4 (28:39):
Man? You I don't need you don't need the money.
Speaker 6 (28:41):
Or the press under the artist name of Z Pain.
Speaker 2 (28:44):
Oh no, oh, this just gets worse now. It raises
the question who made the decision to do so? Because
it's been a while since we've heard from T Pain,
and you wonder, hey, are T Pain's finance is not
quite as good as Zucks?
Speaker 4 (29:01):
Well, they're most definitely not as good as Zucks. And
so the.
Speaker 2 (29:05):
Question is, hey, is this T Pain's decision to do so?
And does he need a little bit of a boost
up the Spotify charts.
Speaker 4 (29:13):
Could be a lot of different potential options.
Speaker 2 (29:16):
Here the best line in the whole story. A representative
for Lil John, the rapper behind the original version of
Get Low, did not respond to a request for comment.
So Lil John is not happy with T Pain for
hanging him out to dry on this it sounds like
and I look, I get it if someone replaced me
with Mark Zuckerberg.
Speaker 4 (29:39):
I don't know, especially with creative music.
Speaker 2 (29:43):
Now I can get behind the name z Pain. I
think that's fantastic. Love every bit of it. Let's take
a quick break here. When we come back, we'reen We
be joined by Paul Lamonica right after.
Speaker 1 (29:53):
This fine daily interviews and full shows of the Financial
Exchange on how are YouTube, Paige get cut up on anything?
End everything you might have missed. This is the Financial
Exchange Radio Network. Text us six one seven three six
to two one three eight five with your comments and
questions about today's show. This is the Financial Exchange Radio Network.
Speaker 7 (30:15):
Ladies and gentlemen.
Speaker 8 (30:17):
The weekend, the Financial Exchange wants to thank all of
you who took part in this year's DAV five k.
The event sold out earlier than ever before and was
another tremendous success. If you weren't able to attend, but
we would still like to support our great American heroes,
visit DAV fivek dot Boston and make your gift today.
Every dollar raised will support a wide variety of initiatives
(30:39):
like the DAV Transportation Program, which takes disabled vets to
important medical appointments that supply both the physical and mental
care they need. Thank you again for your support. The
DAV five K Boston is presented by Veterans Development Corporation.
Speaker 2 (30:54):
As promised, we're now joined by the one and only
Paul Amonica here to talk a little bit of about
IAC and potentially their latest spinoff.
Speaker 4 (31:05):
Paul, how are you today?
Speaker 7 (31:07):
Good? Thanks? How you guys doing? I'm not sure how
I follow up that last segment.
Speaker 4 (31:10):
Though we covered a lot of ground. We covered a
lot of ground. Mary Dillar d pay not so sure
that'd be fantastic.
Speaker 2 (31:20):
Let's let's talk a little bit just about IAC and
what the corporate structure is like there and what they
actually do.
Speaker 7 (31:29):
Yeah, it's it's a great question.
Speaker 9 (31:31):
So the news this week is that I See, which
owns the home services company ang which used to be
known as Angie's List, They are going or at least considering,
spinning off their full stake about eighty five percent of it,
which would make it a completely separate independent company. Angie
(31:52):
already trades ANGI, but this would be a full spin
off if they do it, and that would allow IC
to focus on their core businesses of dot Dash, Meredith,
the digital and online publishing company that owns People and
Southern Living, many other assets.
Speaker 7 (32:10):
They have. The old ask.
Speaker 9 (32:12):
Search business that used to be owned has Asked, jeevescare
dot com.
Speaker 7 (32:16):
Is an emerging business for them.
Speaker 9 (32:18):
But what's interesting is that they also own a very
significant stake in the casino company MGM, about twenty percent
or so, as well as more than thirty percent in Toro,
the car sharing service that's a privately held firm.
Speaker 7 (32:35):
So there are a lot of moving parts.
Speaker 9 (32:37):
At IC, and it's always been a company that you know,
to some extent, maybe trades at a discount to the
broader market because that can conglomerate structure. It's always incubating
and spinning off companies.
Speaker 2 (32:51):
Is the reason for doing this, because they need the
capital for something else, for some of those other departments
that you mentioned. Is their potential that hey, they want
to be bringing something else on board as kind of
the newest thing to spin up and spin out.
Speaker 7 (33:05):
Yeah, I would guess that it might be the latter.
Speaker 9 (33:09):
I spoke to CEO Joey Levin before the announcement was made,
and you know, he was coy about, you know, wanting
to slim the portfolio so that they can think more
clearly about the future, and didn't rule out, you know,
the possibility that they could boost their stake in MGM
Resorts or maybe do some other deals. Because keep in mind,
(33:31):
IAC tried to buy Paramount but got outbid by Skydance Media,
which is run by David Ellison, who was backed by
his dad, some guy named Larry Ellison, who's one of
the wealthiest people in the world because of his founding
of Oracle. So it wouldn't shock me at all. I
see as thinking about doing something different because this is
(33:54):
a company that's just constantly trying to find something new
to invest in me. And there are so many IC
spinoffs out there that people might forget used to be
part of that corporate umbrella we're looking at. You know,
Expedia is one, Ticketmaster now part of Live Nation, match Group,
(34:15):
trip Advisor. These are all formerly under the IC umbrella
that are now separate standalone companies.
Speaker 2 (34:22):
Paul's this is similar setup to kind of like what
Liberty Media does in that respect, but just in a
little different niche or there are differences between them, Yeah.
Speaker 7 (34:29):
I mean there are differences.
Speaker 9 (34:30):
I mean Liberty has you know, really done a lot
under John Malone that tracking stock sort of mechanisms, so
they would set up units that track the performance of
various Liberty divisions. But I think there are definite comparisons
(34:51):
between Malone and Diller and how they invest in all
these various businesses, you know, Malone now and Liberty you
know with serious sax Sam and Formula one. You know,
clearly a lot of these disparate businesses part of a broader,
you know, corporate umbrella. And I think, you know, there's
always this desire to decomplicate the structure because I think
(35:15):
companies like Liberty and I see sometimes get penalized by
investors because you do have to scratch your head and say, well,
what the heck am I actually buying here?
Speaker 4 (35:25):
Sure? Sure, Paul, appreciate you joining us.
Speaker 2 (35:27):
We've got to run, but thank you so much for
the time, and I hope you have a great weekend.
Speaker 7 (35:32):
Thanks and your guys. Giants are playing, so I'm looking
forward to it.
Speaker 4 (35:36):
Pats have tuck. Who do the Pats have this weekend?
Is the Rams? Yeah, probably gonna be a lot aesome
to say it goes, But the Pat's been.
Speaker 2 (35:43):
Playing a little better lately, gotta say, Paul, just it
doesn't take much to play a little better.
Speaker 7 (35:48):
No, No Giants, Pat super Bowl anytime soon.
Speaker 2 (35:51):
No, it's thankfully we don't need another one of those.
Speaker 4 (35:55):
We're good on them for a while. Have a going, Paul,
Thanks you too.
Speaker 2 (35:59):
It's Paul Monica talking a little bit about IAC. Taking
a look at markets as we had towards the top
of the hour, heading back towards the low's of the
day for most major indices. The dows down three to
oh six, the S and p Is down seventy five,
the Nasdaq down four to three, So a little bit
of pain continuing as we get through the day today,
(36:20):
We'll see if it continues all the way into the weekend.
We're done for the day, done for the week. Back
at it next week. A little quieter than the last
couple weeks. We do get some housing data coming out, though.
We'll have weekly jobless claims and in Vidia earnings. Always
interesting to see what they cook up. They'll be reporting
on Wednesday. Have a great weekend. We'll see you Monday.
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,
(00:43):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting dav fik dot Boston and making a
donation Today. The DAV five K Boston is presented by
(01:05):
Veterans Development Corporation. This is the Financial Exchange with Chuck
Zada and Mike Armstrong.
Speaker 2 (01:13):
As we continue into the second hour. Here on the
Financial Exchange is Chuck, Mike, and Tucker with you. And
we got stock selling off today, with the Dow Jones
off three hundred and eleven points, the S and P
is down seventy two, and the Nasdaq down three to eighty,
so anywhere from about a three quarters of percent to
a two percent decline on your major US indicase tenure
Treasury is selling off as well, though not as much
(01:34):
as it was this morning at one point to touch
four point five percent. It's back down to four point
four to one, still up two basis points from yesterday.
We've got oil down thirty one cents a barrel to
sixty eight thirty nine on West Texas Intermediate and the
TRIPAA National Averagur gas prices unchanged for the third straight
day at three oh eight and four tenths of a cent,
(01:56):
Gold up two dollars and thirty cents an ounce to
twenty five to seventy five and twenty cents. And so, Mike,
we sit here right now with the S and P
five hundred and fifty eight seventy six as of the
latest tick. And I'm struck by the fact that this
is the same place the market was at on October seventeenth,
and so it's been basically a month, and even including
(02:19):
the bump that stock saw after the election, we're pretty
much in the same place we were a month ago.
Speaker 3 (02:26):
Now, yeah, the Trump bump, the four percent rally that
we saw on Wednesday of last week has now been
about cut in half. I think the markets actually more
than that. The markets are now from Tuesday to now
are up about one point eight percent from the close
on Tuesday, and so, yeah, the things are.
Speaker 4 (02:49):
That that's normal.
Speaker 3 (02:50):
We saw a big acceleration inequities as a bunch of
hedges rolled off, and I think that this is kind
of moving into that next stage of Hey, what does
this economy look like? And what does the Trump two
point zero plan do for the economy.
Speaker 2 (03:06):
Let's talk a little bit about the housing sector on that,
because there is at this point no more important sector
for the immediate trajectory of the economy than the housing sector.
It's often been said that housing leads the economy. And
we've got this piece here from the Wall Street Journal.
It's titled America's homes are piggy banks that few people
can afford to raid, And basically.
Speaker 4 (03:29):
It's kind of a good thing, bad thing. Piece.
Speaker 2 (03:32):
The good news is that Americans have more equity in
their homes now than any time in human history.
Speaker 3 (03:38):
Thirty five trillion dollars of equity, even when adjusting for inflation.
Speaker 2 (03:43):
Yeah, it's the highest level of equity that we've had.
So to anyone looking at the housing market and being like, oh,
like this is bad. This is going to cause, you know,
the next great downturn, it's not really looking like it. No,
delinquencies on mortgages are really low. It's it's just not there.
But here's the downside to this. There's all this equity
(04:06):
in here, but if you want to get any equity
out of your home, you have one of two options.
You can either refinance your mortgage with a with a
cash out refi, in which case, hey, your old mortgage
where you were paying two and a half percent, three
and a half percent, four and a half percent, even
five and a half percent on whatever remaining debt you had,
is gonna go up to a rate closer to seven
(04:28):
and then you're gonna pay seven on whatever else you
take out, or you take out a home equity line
of credit, and when we look at the rates on those,
they're typically a little bit higher than what you even
see on mortgages. You're talking to like seven and a
half to eight in a lot of cases, and those
rates float. If it's a home equity line of credit
or if you're doing a fixed home equity loan, those
(04:49):
are often a little bit higher as well. So again
you're like seven and a half to eight, And so
a lot of Americans look at it and they're kind
of going, gee, I got all this equity in my
house because prices have gone up. Not really sure I'm
gonna do a ton with it. And I say this
even as we are seeing growth in the amount of
home equity loans and home equity lines of credit that
are being taken out. But it still isn't something where
(05:13):
it's it's enough to generate, you know, meaningful growth in
the economy.
Speaker 3 (05:16):
Yeah, I think the last option in terms of unlocking
home equity as you sell the home. But that's clearly
not happening to one or rent agree, right, which, by
the way, like you do, wonder do we get to
a point where retirees just say, oh, forget this, I've
got a million dollars in home Like, that's not an
(05:37):
unrealistic scenario here in New England of having half a
million to a million dollars in home equity. And do
you get people that just say, forget this, I'm unlocking
the equity and I'll just rent for the rest of
my life. I don't care. I don't think so. But
you think about that math equation, and there is so
much equity to be unlocked in these homes for retirees
that just can't find a reasonable replacement place in the
(05:59):
purchase market. But again it comes back down to the
state of things as Trump is entering the White House
come next year. In October of twenty sixteen, there were
one point four million homes for sale across the United States.
And by the way, like at the moment, I don't
think a lot of people felt like October of twenty
(06:19):
sixteen was this great buyer's market. We had just come
ripping back from the weakness of twenty eleven. Today there
are only nine hundred and fifty four thousand total units
available on the market. Do we have a significantly fewer
even just pre COVID. Right pre COVID October of nineteen,
there were one point two million properties for sale on
(06:39):
the market. So yeah, it remains this conundrum. I do
think that should you get equity line rates down into
the maybe five to six percent range, people are now
starting to get used to these rates and might start
accessing some of that capital. But I agree with you
Chock at seven and a half, I don't know a
lot of people that are itch and to borrow and
(07:01):
Mike absent.
Speaker 2 (07:03):
A Again, the one thing that I think could bring
interest rates down meaningfully is if you get a significantly
smaller annual deficit going forward in the US economy. But
absent that, the only thing that gets home equity line
rates into the fives is a recession.
Speaker 4 (07:25):
Tell me I'm wrong.
Speaker 3 (07:27):
Yeah, I'm trying to think of how much further that
means the FED brings down rates to two full percentage
points to get equity line rates down there in that
But I mean, look.
Speaker 2 (07:35):
The FED probably has to cut rates three and a
half to four percent to get long term rates down
to there.
Speaker 3 (07:40):
But that's but that's my point is long term rates, yes,
but home equity line rates are going to move right
with what the Fed does. So to get home equity
line rates down there, you probably do need at least
one and a half percent of additional cuts. And I'm
with you, I don't think you get there in the
short term without a recession over two years maybe, but
not in the short It's it's a tough path to
(08:01):
get there.
Speaker 2 (08:02):
And so I'm looking at this chart from the Wall
Street Journal. It's it's a great chart. Also, it's like,
what rates do people have on their outstanding mortgages? If
you look at mortgages below six percent, eighty four percent
of current loans that are outstanding are below six percent.
It's it's a huge number still, and it's gonna get
(08:23):
smaller each year because there is a portion of those
a some of the ones that are lower they just
you know, they they run their cycle and and they're
no longer outstanding because they're paid off.
Speaker 4 (08:32):
So that's part of what you see. Part of it is, hey,
even if.
Speaker 2 (08:35):
Someone has, you know, a four and a half percent loan, Hey,
you know what, we're getting a new job. We got
to move from uh, you know, Austin where we moved
in twenty twenty one.
Speaker 4 (08:45):
With the low rate. We gotta move back to Carancisco. Ah,
come on, you gotta go calum Zoo there. No.
Speaker 2 (08:49):
If if I'm going Topeka, I always do Topekaa, I
always do Topeka. Yeah, we got to move to Topeka
because that's gonna be the you know, the new tech hub.
It's okay, fine, I guess you know, since prices are
so low in Topeka. Yeah, we can take on the
seven percent mortgage, right.
Speaker 4 (09:06):
The other piece that I have to just go back
to every time on this.
Speaker 3 (09:10):
You know, there's been a lot of debate, and while
I still see for a lot of people how renting
can be valuable and if you do it the right
way and save what you would otherwise spend on your
mortgage and invest for your future on those savings, it
can be beneficial. Can we just go back to talking
about the thirty year fixed rate mortgage? Because there is
(09:32):
no better deal in the history of deals than the
thirty year fixed rate mortgage in the United States, Like
that thing does not exist in many other parts of
the world, and in no other area of finance. Can
you buy something with somebody else's money and have a
deal where the interest rate can only go down.
Speaker 4 (09:53):
It's a pretty good deal. It's a really good deal.
Speaker 3 (09:56):
And so I know there's people that are worried about
buying that more, you know, buying that home, taking that
mortgage at these prices, and I would urge you to
be cautious. If you cannot afford that payment at seven percent,
then you should not take that mortgage because you cannot
rely on this stuff going down. But if you can,
and you want to be there for ten plus years
(10:18):
in that home, I don't know that I would let
the interest rate alone scare me away from that because
of the fantastic potential deal you have of being able
to refinance it at some point.
Speaker 4 (10:30):
Yeah.
Speaker 2 (10:30):
Yeah, it's again, it's as you note, it's one of
the great uh again, you look at just the history
of the thirty or fixed rate mortgage, and it has
enabled millions of Americans to accumulate significant wealth in the
way that the otherwise would not have been able to do.
Speaker 4 (10:50):
So.
Speaker 2 (10:50):
Yeah, now, part of that's also because of where interest
rates have gone over the last forty years, So we
also have.
Speaker 4 (10:54):
To consistently and persistently down.
Speaker 2 (10:58):
But yeah, the vehicle that has made it possible thirty
a fixed rate mortgage, take a quick break here. When
we come back, let's talk a little bit about Microsoft's
cloud business and US regulators looking into it. We'll also
do a little bit of trivia here on the Financial Exchange.
Speaker 1 (11:15):
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.
This is the Financial Exchange Radio Network. The Financial Exchange
Show podcast drops every day on Apple, Spotify, and iHeartRadio.
Hit that subscribe button and leave us a five star review.
(11:37):
You're listening to the Financial Exchange Radio Network.
Speaker 4 (11:40):
Mike Piece of the Financial Times.
Speaker 2 (11:41):
US regulators plan to investigate Microsoft's cloud business. Kind of
interesting timing, given, you know, the two months until the
new administration under a real tight schedule here, you know,
it's the It's not many FTC investigations that conclude in
(12:01):
two months last time I checked.
Speaker 3 (12:04):
Yeah, I mean, what are you supposed to do in
that position? Just like sit there and twiddle your thumbs though,
who Lena Kahn in her office? Yeah, I guess you
do just kind of sit there and twitter your thumbs right,
like you're not going to have the job in a
few months.
Speaker 4 (12:19):
So again, I said, she might again.
Speaker 2 (12:22):
Jd Vance has talked about how he's a big Lena
Khan fan. Yea, so we'll see. I think it's unlikely
she has the job, but I don't know.
Speaker 3 (12:31):
So I guess let's first talk about what it is
that Microsoft is being accused of, which is anti competitive
practices when it comes to one of their business units,
which is cloud storage. So just put plane and simple
company like the Armstrong Advisory Group needs to store a
(12:51):
bunch of data. We used to put it all in
a server rack in a closet here. These days it
all goes onto the Microsoft Cloud. And uh, what they're
being accused of here is if say Armstrong wanted to
move our data from the Microsoft Cloud to the Amazon Cloud,
they're going to make it pretty difficult to do so.
Speaker 4 (13:12):
And they can do that in a few ways.
Speaker 3 (13:14):
One, they can make it challenging for their Office three
sixty five products to integrate with that Amazon Cloud.
Speaker 4 (13:21):
They raise costs on those, right, they could raise costs.
Speaker 3 (13:24):
They could say, hey, we're discounting all these services, which
they do. You know, you bundle this stuff together with Microsoft.
We're going to give you a discount on your team's
you know, Microsoft Office Suite and the cloud storage because
you are one bundled customer and oh you took it
away while those costs are going up for your other
unrelated services. Again, this is only really a problem because
(13:46):
of Microsoft's size. Any other company does this, it's normal
course of business. But when you're Microsoft and you do
control probably ninety percent of the you know, Office tools
U s PCs, it does become a little bit problematic.
Is anything going to happen during the Trump administration on
this or sorry, during the Biden administration on this?
Speaker 4 (14:08):
It'd be pretty tough to see the other.
Speaker 2 (14:11):
Thing that I look at on this again, and I'm
someone who's kind of been a cheerleader of some of
the work that the FTC has done because I think
that anti monopoly is one of the best ways that
you can get bang for your buck in terms of
generating more competition, which then means you don't have to
do as much regulation elsewhere.
Speaker 4 (14:28):
Mike, who does this hurt?
Speaker 2 (14:31):
Like, let's say, let's say that Microsoft Office costs too
much for businesses to run relative to what it would
otherwise be.
Speaker 4 (14:39):
Like, who's being hurt by this?
Speaker 3 (14:44):
A few businesses, but tough to show consumer harm and.
Speaker 2 (14:49):
Even on the business side, if you are a small
company with five employees, is the cost of Microsoft Office
on its own car prohibitive for you to run your business?
Because because if it is, then you're not a business.
Speaker 4 (15:04):
Yeah.
Speaker 2 (15:05):
No, it's just not that expensive, like as a percentage
of your overall stuff that you're.
Speaker 4 (15:10):
Trying to do.
Speaker 2 (15:10):
So I guess, look, there might be a there there,
But this is one of the few times where I
look at the FTC over the last few years ago
and I'm not really sure that this.
Speaker 4 (15:21):
Is the best use of your time.
Speaker 3 (15:24):
Yeah, I'm trying to think there was some other stuff
that had been alleged against maybe Microsoft or another big
tech provider on how they penalized customers for switching, and
I don't I don't remember, but I found it much
more compelling than I find this, Like it seems like
a pretty logical course of business to say, look, if
you unbundle our services, all those services separately are going
(15:45):
to become more expensive too.
Speaker 4 (15:46):
Well, I guess here's a question that I'll ask.
Speaker 2 (15:48):
So you and I both have said, or you said, hey,
if a small business does bundling, that's just you know,
doing business right, Like it's it's no problem.
Speaker 4 (15:58):
Its Microsoft's concentration. That's the problem. Will be here. Sure,
let's look at the telecoms.
Speaker 2 (16:03):
Why why is it cool that you know, Verizon and
AT and T in Comcast do all this bundling because
they're basically the same. You know, they all have you know,
somewhere in the ballpark, like twenty five to forty of
that market.
Speaker 4 (16:18):
Right, Why do we allow it there? Why is it cool.
Speaker 2 (16:20):
For telecoms to do you know, bundling where Yeah, if
you throw in a landline that no one ever uses,
the cost of your cable goes down by twenty dollars?
Why is that okay there? But this is not okay here?
Speaker 4 (16:33):
Right?
Speaker 3 (16:34):
I think the only argument you have is that there
are no national and global dominance dominance players like there
is Microsoft. That would be the only real argument. Is Hey,
the the anti competitive behavior that's happening within these telecoms
is only happening on a regional basis.
Speaker 4 (16:53):
But I don't know that that makes it any better?
Is it regional?
Speaker 2 (16:56):
I mean, like Verizon in AT and T and Comcast
are pretty mugey And again, even when the FTC is
you know, if they're pursuing an investigation against Microsoft. They're
limited jurisdictionally in terms of what they can do, right,
Like they can't be like, hey, Microsoft, you're really screwing
over the Namibians. Might be true, but that's not something
(17:18):
that the FTC can cover, right, not going after that one,
you know, like Namibia has got to deal with it
on their own. Unfortunately, just like the EU. Hey, when
there's a problem in the EU with Microsoft or Google, okay,
they deal with it there, but they don't go and
pursue claims based on what's happening in the US.
Speaker 4 (17:35):
So I don't know it's it.
Speaker 2 (17:37):
This is one where I'm kind of like, eh, I
don't know what we're really doing on this one, quite honestly.
Speaker 4 (17:42):
Yeah, I have a bit of an issue with it.
Speaker 2 (17:44):
Looking at markets, the Dow is still off two hundred
and forty five points, the SMP's down sixty five, and
the Nasdaq down three fifty five. So the sell off
that started in the last couple of days continues. By
the way, the NASDAC if it were to close in
the red, which be a heck of a turner if
it doesn't, but if it were, it would be the
first five day red trend for the Nasdaq since twenty nineteen.
Speaker 4 (18:09):
It's been a while. Huh h.
Speaker 2 (18:11):
It's kind of wild given everything. Dear God, that's what
I'm seeing here. Despite everything that went on in twenty
twenty two, the Nasdaq was not read five days in
a row.
Speaker 4 (18:21):
Other indices were, but not the NASDAK.
Speaker 5 (18:33):
Bringing the latest financial news straight to your radio every day,
it's the Financial Exchange on the Financial Exchange Radio Network.
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all
morning long. Base is the Financial Exchange Radio Network, mich.
Speaker 2 (18:54):
Let's talk a little bit about this piece from Bloomberg.
It's talking about potential changes in the credit card landscape
as we head towards the second Trump administration and specifically
looking at hey, the CFPB. Over the last couple of years,
the Consumer Financial Protection Bureau has sought to cap some
(19:14):
of the fees that banks charge on credit cards, things
like late fees and things along those lines. And I
think the question here is what happens to this because
on one hand, during the first Trump administration, I can't
remember if it was the Trump administration itself or a state.
(19:35):
I can't remember who it was. But there was someone
pretty high up who I think was trying to make
the case CFPB should not even be able to exist
based on the financing mechanism for it.
Speaker 3 (19:46):
Yeah, the funding mechanism was created so that Congress couldn't
limit it, which is strange.
Speaker 4 (19:51):
It is kind of strange. Yep.
Speaker 2 (19:53):
That did get rejected by the Supreme Court. But I
don't think that the Trump administration was a huge fan
of the CFPB. So on one hand, you look at
this and you say, Okay, some of these things that
the CFPP is trying to do are likely to be
shot down. On the other hand, one of the things
that President elect Trump put out there during the closing
month or so of the campaign was the idea of
(20:15):
capping interest rates at fifteen percent.
Speaker 4 (20:19):
I think it was ten. Was it ten? I think
it was ten.
Speaker 2 (20:22):
Yeah, either way, the idea of capping interest rates on
credit cards at you know, a.
Speaker 4 (20:26):
Set interest rate.
Speaker 2 (20:28):
And in theory, the way that you would probably do
that that would stand up best to any challenges would
be through the CFPB. But I don't really know what
to make of this because the facts that we have
an evidence from an action perspective are, Hey, the Trump
administration is probably not going to be particularly aggressive on
(20:48):
some of the things that the CFBPB has been pursuing.
But President elect Trump did talk about credit cards and
being too expensive in the last month or so, so I'm.
Speaker 4 (20:56):
Kind of like, what do I do with this?
Speaker 3 (20:57):
I don't know, I'm not sure, but I also want
to be that the proposals that the CFPB had on
credit cards aren't even in effect and likely are not
to go into effect by the time Joe Biden leaves office.
There was a proposal of the cap credit card late
fees at eight dollars, which is a big change from
the current thirty to forty dollars, and that was blocked
(21:19):
by a judge in Texas, and so I one, I
don't believe that Donald Trump's going to pass laws, but
you would probably need to do of capping interest rates
at ten percent. I don't think that i CFPB could
likely do that based on the fact that everything they've
tried to do under the Biden administration is getting blocked.
Do I really believe that The point of this article
(21:41):
anyway is hey, you better watch out because you know
financial companies are going to try and take advantage of
you more under a looser and less empowered CFPB. I
just I can't point to much that I feel like
the CFPB really did to prevent that sort of thing.
Speaker 2 (21:55):
No, so, and you and I have also talked about Look, okay, great,
you cap credit card.
Speaker 4 (22:00):
Eight fees at eight dollars. It's going somewhere else.
Speaker 2 (22:03):
Either interest rates are going to go up, or there's
gonna be another fee somewhere else, or rewards.
Speaker 4 (22:08):
Are coming down. Yeah, it could be any number of
those things. But yeah, I don't know.
Speaker 3 (22:14):
I'm just I'm just not believing that there's going to
be much of a shift on there. So what I
would urge everyone to do is always be vigilant about
things like credit cards that come with big burdensome fees
and late fees and interest rates, whether it's your checking
account or your credit card. But that all actually leads
me well into our guide for the month of November
(22:35):
from the Armstrong Advisory Group Chuck, which is all about
things that you can do in the last what are
we forty five days of the year.
Speaker 4 (22:42):
Here, Now we're getting down to it as we close
in on your end.
Speaker 3 (22:45):
We put together a guide on our top year end
planning tips for folks to get out there for free.
And you know, some of these are actual items that
you can only do before your end, and so it
is important to look at things like a ROTH conversion
or a required minimum distribution or tax loss harvesting, because
if you wait until January, you actually can't do them.
(23:07):
Others on the list I think are just really good
practices to have. Hey, once a year, I pull open
my accounts and check my beneficiaries and read my will.
That's not a bad practice to have here, review my budget,
take a look at my spending patterns, look at my
credit score, pull my credit report and make sure that
there's nothing surprising on there. We come up with all
(23:27):
of this and more, and like I said, it's an
easy read and frankly an easy but important to do
list for before year end. And if you want your
copy of Armstrong Advisor Groups free monthly a guide again,
it's the top year end planning tips and you can
get it by calling us at eight hundred three nine.
Speaker 4 (23:45):
Three four zero zero.
Speaker 3 (23:46):
One will be happy to email you or ship you
a copy of the new guide. Again, it's our top
year end planning tips guide and it's available by calling
eight hundred three nine three four zero zero one.
Speaker 1 (23:58):
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, and estate planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 2 (24:14):
My favorite headline of the year, just in terms of hey,
telling you what the store is going to be about.
Human in bear suit was used to defraud insurance companies.
Officials say, and I don't know if I'll be able
to get through this. It really is just fantastic. So
(24:34):
there was a video in January that was submitted as
part of an insurance claim in California. It was a
brown bear going through a roll's voice that was parked
in the driveway, and it turned out that there were
a couple other videos that were taken as well. In
the three insurance companies ended up paying out one hundred
and forty thousand dollars. And so you started know kind
(25:00):
of looking into it or not. I did, but the
California Department of Insurance started looking into it, and on
Wednesday of this week, after concluding an investigation they called
Operation bear Claw. They determined that the bear was actually
a guy dressed up in a.
Speaker 4 (25:17):
Suit, and the.
Speaker 2 (25:20):
Scratch marks inside the vehicles from the bear clause were
from a callike kitchen accessory usually used to shred meat.
Speaker 4 (25:27):
Now, Mike, yeah, pull or something I do too?
Speaker 2 (25:32):
I have to Yeah, it's and so basically they figured out, okay,
this is people, and they also then arrested for people
on Wednesday. Reuben Tamarazian, Ararat Churkinian, Vaje Murrad Canyon, and
Alifa Zuckerman, all of southern California, are now facing charges
(25:56):
of insurance fraud and conspiracy. It's un clear which of
the men was the bear and which ones were simply
having their cars broken into under false pretenses.
Speaker 3 (26:09):
Yeah, that that part is unclear. I've got the video
open right now and am watching it. And granted it's,
you know, nighttime. It's a pretty far away camera, but
it doesn't look terribly like a bear.
Speaker 6 (26:24):
It doesn't end anything like a bear.
Speaker 3 (26:27):
Specifically, the action of the bear climbing into the car
is pretty humorous, and the best part.
Speaker 6 (26:34):
Is the bear opens the door with ease.
Speaker 4 (26:37):
Right, It's not crawling a clown. Around at the door.
Speaker 3 (26:40):
It doesn't smash the glass, It just casually comes into view,
opens the doorhand like a human being, and then subsequently trashes.
Speaker 4 (26:52):
Like the car.
Speaker 2 (26:54):
You look at like the butt of the bear, and
you can clearly see it's a human butt inside a
suit that's stretching it. Uh, just like I've looked at
I've looked at some bear butts, Mike, that's that's not
that's not a real bear butt, very skinny bear in
this car.
Speaker 3 (27:11):
We're gonna have to start doing, I mean, at this pace,
I think we could, you know, replace our Florida man
story with our weekly California man story.
Speaker 4 (27:18):
This is top notch fraud where it's kind of wild.
Speaker 2 (27:24):
Actually, speaking of kind of wild, one other story that
we have to touch on. Mark Zuckerberg just released a
cover of Get Low with t.
Speaker 6 (27:32):
Pain, available on Spotify.
Speaker 4 (27:35):
No he did it's it's it's on Spotify.
Speaker 6 (27:37):
I can't play it because there's knotty lyrics in it.
Speaker 4 (27:40):
No, can't play it.
Speaker 2 (27:41):
But apparently the soul wants this Zuckerberg, and look, this
is the thing that you can do if you're a
like sent to billionaire. Apparently the song was playing when
he met his wife in high school twenty one years
ago at Harvard before he dropped out, and so I
guess he always wanted to record it with T Pain.
So he probably just paid T Pain a bunch of
(28:03):
money to go and record the song.
Speaker 4 (28:06):
Yeah, I do that. Now here's the question.
Speaker 3 (28:08):
Okay, yeah, you do that right to me, I probably
wouldn't do that where I was Mark Zuckerberg, but I
would do that where I tea even if.
Speaker 4 (28:16):
I'm Mark Zuckerberg. That's just too cringey for me if
I'm Mark Zuckerberg. But yeah, no, the cringey part is
why did you release it to the public. Yeah?
Speaker 2 (28:24):
I understand recording it and being like, hey, you know,
for our twenty first anniversary, I made you the song
that we were listening to when we met with the
guy who.
Speaker 3 (28:34):
Met it right, Oh, like weird but romantic, got it?
Why are you putting it on Spotify?
Speaker 4 (28:39):
Man? You I don't need you don't need the money.
Speaker 6 (28:41):
Or the press under the artist name of Z Pain.
Speaker 2 (28:44):
Oh no, oh, this just gets worse now. It raises
the question who made the decision to do so? Because
it's been a while since we've heard from T Pain,
and you wonder, hey, are T Pain's finance is not
quite as good as Zucks?
Speaker 4 (29:01):
Well, they're most definitely not as good as Zucks. And
so the.
Speaker 2 (29:05):
Question is, hey, is this T Pain's decision to do so?
And does he need a little bit of a boost
up the Spotify charts.
Speaker 4 (29:13):
Could be a lot of different potential options.
Speaker 2 (29:16):
Here the best line in the whole story. A representative
for Lil John, the rapper behind the original version of
Get Low, did not respond to a request for comment.
So Lil John is not happy with T Pain for
hanging him out to dry on this it sounds like
and I look, I get it if someone replaced me
with Mark Zuckerberg.
Speaker 4 (29:39):
I don't know, especially with creative music.
Speaker 2 (29:43):
Now I can get behind the name z Pain. I
think that's fantastic. Love every bit of it. Let's take
a quick break here. When we come back, we'reen We
be joined by Paul Lamonica right after.
Speaker 1 (29:53):
This fine daily interviews and full shows of the Financial
Exchange on how are YouTube, Paige get cut up on anything?
End everything you might have missed. This is the Financial
Exchange Radio Network. Text us six one seven three six
to two one three eight five with your comments and
questions about today's show. This is the Financial Exchange Radio Network.
Speaker 7 (30:15):
Ladies and gentlemen.
Speaker 8 (30:17):
The weekend, the Financial Exchange wants to thank all of
you who took part in this year's DAV five k.
The event sold out earlier than ever before and was
another tremendous success. If you weren't able to attend, but
we would still like to support our great American heroes,
visit DAV fivek dot Boston and make your gift today.
Every dollar raised will support a wide variety of initiatives
(30:39):
like the DAV Transportation Program, which takes disabled vets to
important medical appointments that supply both the physical and mental
care they need. Thank you again for your support. The
DAV five K Boston is presented by Veterans Development Corporation.
Speaker 2 (30:54):
As promised, we're now joined by the one and only
Paul Amonica here to talk a little bit of about
IAC and potentially their latest spinoff.
Speaker 4 (31:05):
Paul, how are you today?
Speaker 7 (31:07):
Good? Thanks? How you guys doing? I'm not sure how
I follow up that last segment.
Speaker 4 (31:10):
Though we covered a lot of ground. We covered a
lot of ground. Mary Dillar d pay not so sure
that'd be fantastic.
Speaker 2 (31:20):
Let's let's talk a little bit just about IAC and
what the corporate structure is like there and what they
actually do.
Speaker 7 (31:29):
Yeah, it's it's a great question.
Speaker 9 (31:31):
So the news this week is that I See, which
owns the home services company ang which used to be
known as Angie's List, They are going or at least considering,
spinning off their full stake about eighty five percent of it,
which would make it a completely separate independent company. Angie
(31:52):
already trades ANGI, but this would be a full spin
off if they do it, and that would allow IC
to focus on their core businesses of dot Dash, Meredith,
the digital and online publishing company that owns People and
Southern Living, many other assets.
Speaker 7 (32:10):
They have. The old ask.
Speaker 9 (32:12):
Search business that used to be owned has Asked, jeevescare
dot com.
Speaker 7 (32:16):
Is an emerging business for them.
Speaker 9 (32:18):
But what's interesting is that they also own a very
significant stake in the casino company MGM, about twenty percent
or so, as well as more than thirty percent in Toro,
the car sharing service that's a privately held firm.
Speaker 7 (32:35):
So there are a lot of moving parts.
Speaker 9 (32:37):
At IC, and it's always been a company that you know,
to some extent, maybe trades at a discount to the
broader market because that can conglomerate structure. It's always incubating
and spinning off companies.
Speaker 2 (32:51):
Is the reason for doing this, because they need the
capital for something else, for some of those other departments
that you mentioned. Is their potential that hey, they want
to be bringing something else on board as kind of
the newest thing to spin up and spin out.
Speaker 7 (33:05):
Yeah, I would guess that it might be the latter.
Speaker 9 (33:09):
I spoke to CEO Joey Levin before the announcement was made,
and you know, he was coy about, you know, wanting
to slim the portfolio so that they can think more
clearly about the future, and didn't rule out, you know,
the possibility that they could boost their stake in MGM
Resorts or maybe do some other deals. Because keep in mind,
(33:31):
IAC tried to buy Paramount but got outbid by Skydance Media,
which is run by David Ellison, who was backed by
his dad, some guy named Larry Ellison, who's one of
the wealthiest people in the world because of his founding
of Oracle. So it wouldn't shock me at all. I
see as thinking about doing something different because this is
(33:54):
a company that's just constantly trying to find something new
to invest in me. And there are so many IC
spinoffs out there that people might forget used to be
part of that corporate umbrella we're looking at. You know,
Expedia is one, Ticketmaster now part of Live Nation, match Group,
(34:15):
trip Advisor. These are all formerly under the IC umbrella
that are now separate standalone companies.
Speaker 2 (34:22):
Paul's this is similar setup to kind of like what
Liberty Media does in that respect, but just in a
little different niche or there are differences between them, Yeah.
Speaker 7 (34:29):
I mean there are differences.
Speaker 9 (34:30):
I mean Liberty has you know, really done a lot
under John Malone that tracking stock sort of mechanisms, so
they would set up units that track the performance of
various Liberty divisions. But I think there are definite comparisons
(34:51):
between Malone and Diller and how they invest in all
these various businesses, you know, Malone now and Liberty you
know with serious sax Sam and Formula one. You know,
clearly a lot of these disparate businesses part of a broader,
you know, corporate umbrella. And I think, you know, there's
always this desire to decomplicate the structure because I think
(35:15):
companies like Liberty and I see sometimes get penalized by
investors because you do have to scratch your head and say, well,
what the heck am I actually buying here?
Speaker 4 (35:25):
Sure? Sure, Paul, appreciate you joining us.
Speaker 2 (35:27):
We've got to run, but thank you so much for
the time, and I hope you have a great weekend.
Speaker 7 (35:32):
Thanks and your guys. Giants are playing, so I'm looking
forward to it.
Speaker 4 (35:36):
Pats have tuck. Who do the Pats have this weekend?
Is the Rams? Yeah, probably gonna be a lot aesome
to say it goes, But the Pat's been.
Speaker 2 (35:43):
Playing a little better lately, gotta say, Paul, just it
doesn't take much to play a little better.
Speaker 7 (35:48):
No, No Giants, Pat super Bowl anytime soon.
Speaker 2 (35:51):
No, it's thankfully we don't need another one of those.
Speaker 4 (35:55):
We're good on them for a while. Have a going, Paul,
Thanks you too.
Speaker 2 (35:59):
It's Paul Monica talking a little bit about IAC. Taking
a look at markets as we had towards the top
of the hour, heading back towards the low's of the
day for most major indices. The dows down three to
oh six, the S and p Is down seventy five,
the Nasdaq down four to three, So a little bit
of pain continuing as we get through the day today,
(36:20):
We'll see if it continues all the way into the weekend.
We're done for the day, done for the week. Back
at it next week. A little quieter than the last
couple weeks. We do get some housing data coming out, though.
We'll have weekly jobless claims and in Vidia earnings. Always
interesting to see what they cook up. They'll be reporting
on Wednesday. Have a great weekend. We'll see you Monday.
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.