February 5, 2025 • 38 mins
Chuck Zodda and Paul Lane discuss the latest rejection by Nissan to create the world's 3rd largest automaker with Honda. Disney hits it big with Moana 2 and announces Disney+ will be centralized. China is targeting Apple yet again. Americans will spend a record amount of money on this year's Super Bowl. Why are the prices of eggs much higher in the Northeast?
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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Exchange with Chuck Zada and Paul Lane, your exclusive look
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(00:42):
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Financial Exchange is a proud partner of the Disabled American
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a donation today. This is the Financial Exchange with Chuck
(01:05):
Zada and Paul Lane or two.
Speaker 2 (01:09):
The financial exchange kicking off right now, and markets are
pretty boring on the surface, but man, there's a lot
moving underneath the hood. So the Down's up twenty seven
points less than a tenth of a percent, the S
and P is down ten points, less than a quarter percent,
and the Nasdaq is down seventy six points about four
tenths of a percent, So not much moving, you know,
when you look at it right off the bat. Under
(01:31):
the hood, though you talk about you know, some kind
of the big stocks that people like to chat about.
AMD's down nine percent, Google's down eight, Tesla's down two,
Chipotle's down a couple after their most recent quarter, Apple's
down one and a quarter on the plus side, and
videos up almost four. Walmart's up one and a quarter.
Starbucks is up one. So it just kind of this
(01:52):
wide dispersion of results. And this is kind of what's
been keeping markets relatively tame and afloat the last few months.
Is hey, even with some of the big guys struggling,
you've had some other companies that have kind of been
able to say, okay, like we've got, you know, something
decent going on, and so markets are holding up right now.
(02:12):
We've got the ten year US treasury down nine point
five basis points to four point four to one eight percent,
so yields moving down meaningfully in the last couple of weeks. Now,
if you take a look just a couple of weeks
ago at where we were there, you had the tenure yield,
you know, it was floating right up around four point
eight percent. We're sitting here at four to four, so
(02:33):
down almost half a percent now in you know, the
last call it three weeks since January fourteenth is when
we hit that peak. So yield's coming in a little bit.
Mortgage is still floating up right around seven percent, though
this will probably bring them down to six nine to
five somewhere in that ballpark. So still not getting back
down towards you know, where we were in the middle
(02:55):
of last summer, but some improvement off that seven and
a quarter percent range at least that we've seen there.
Oil moving down ninety two cents a barrel today to
seventy one seventy eight on West Texas Intermediate triple a
national average for gas prices, though moving in the opposite direction,
up one point eight cents a gallon from three oh
(03:17):
one and seven I'm sorry, three ten and seven tenths
up to three twelve and five tenths. So gas price
is moving up just a little bit nationally, but quite honestly,
we've we've just been in like this three zho five
to three twenty range for the last I don't know,
coast to six months now, I think, And so no
real movement in either direction there. Gold though, continuing its
(03:39):
strong run, breaking twenty nine hundred dollars and ounce for
the first time now at twenty nine oh two after
it's up twenty six dollars and twenty cents. So Gold
cooking on all cylinders to kick off twenty twenty five.
Speaking of cylinders, see what I did there, Paul, Yeah.
Speaker 3 (03:59):
I don't even have my but it was good.
Speaker 2 (04:03):
So this story is messy. Actually, the Wall Street Journal
has this the headline. There is Nissan to reject Honda
deal to create world's number three automaker. I have a
buddy of mine who lives in Japan, and he had
sent this to me last night actually, like when it
was reported first by Japanese papers. But the reporting on
(04:30):
this afterwards there is Honda and Nissan initially were like, no,
like this was we don't know where this came from.
We're not, you know, saying this. Nissan's saying that they
have various different discussions that they are under way with
they're planning to make an announcement in mid February, and
that they are you know, one of the options is
that they may end up ending these merger talks with Honda.
(04:53):
But this story has been kind of messy for the
last twenty four hours, so I don't know exactly what
to make of it. But this deal was only announced.
When was this originally announced? December twenty third, so it's
been six weeks and I have no idea what's actually
going on here. But the reporting from the Wall Street journalist, Okay,
(05:18):
Honda was saying that, you know, we want to make
Nissan a subsidiary instead of you know, kind of a
merger of equals. But I mean, isn't that basically where
this is going to end up anyways, Like they're not
on equal footing. Honda is the far superior financial company.
They are the producer of way more vehicles. I don't
really know what Nissan's endgame is on this in terms
(05:41):
of trying to extract concessions here. They don't really have
a backup plan.
Speaker 3 (05:47):
No, they have no leverage in this situation. Really, Honda
is doing them a favor in a sense because of
the situation that they find themselves in. Nissan had just
laid off nine thousand workers in November and slashed its
fount factory capacity by one fifth to cut down some
of the costs. If you look at their sales numbers
specific to Nissan within the US and China, they've lagged
(06:08):
significantly over the last couple of years. So this idea
that the offer offends Nissan is something that they're just
negotiating from a position of very little strength. And it
seemed like, I don't know if your friend comment on this,
but it seemed like this was something that the Japanese
government would like.
Speaker 2 (06:29):
To see happen.
Speaker 3 (06:30):
Is that a fair way to sort of say that
there may have been some prodding on the Japanese government
side of things to influence Honda.
Speaker 2 (06:37):
Has that vibe to it, But I don't know. Here's
what I'll say, Nissan cannot survive on its own right.
It's not big enough, and they are threatened in two
clear in their two key markets China, they are being
absolutely destroyed in because of Chinese EV startups that are
taking market share from everyone, and in the US their
(06:59):
bread and butter the twenty tens, back when what's his name,
Carlos Gohan was running the company, the Niss Sound Rogue
was one of the best selling small SUVs out there.
They're getting their launch eating on that platform by the
Honda CRV and the Toyota RAV four. So if your
key products in your two biggest markets are being you know,
(07:21):
or seeing their sales decline significantly and quickly from their peaks,
your plan is if you're an automaker, because you need
to spend a lot of money to stay competitive.
Speaker 3 (07:32):
The other piece that I that I hit on because
of the prompting of the the Japanese government, is this
idea that there aren't these huge synergies between the two
companies here. They kind of compete in the same space,
and to your point, their Nissan is weaker in that
space of competition. So what are you really getting from
Honda's perspective with this merger. The idea that was mentioned
(07:54):
is that they'd be able to go to suppliers and
perhaps be able to renegotiate more favorable deals on supplies
that they were purchasing for their cars. But it just
didn't seem like a slam dug mergay. It'll be interesting
to see what happens, but obviously some turbulence on the
negotiation floor.
Speaker 2 (08:09):
A little bit messy there, a little bit messy. Take
a quick break here. When we come back, we've got
trivia and then we'll talk Disney earnings and Apple after this.
Speaker 1 (08:21):
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Speaker 4 (08:56):
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five K dot Boston. Time for trivia here on the
Financial Exchange. The United States Postal Service said it will
resume accepting inbound mail and packages from China and Hong
(09:43):
Kong posts, just hours after its suspended service from those regions.
The USPS has had a long and storied history, beginning
with the founding of the service in seventeen seventy five.
Triviy questions today who is the first Postmaster General? Once again?
Who's the first Postmaster General? Be the fifth person today
(10:05):
to text us at six one seven three six two
thirteen eighty five with the correct answer, and you win
a Financial Eks Shane Show T shirt.
Speaker 2 (10:12):
Once again.
Speaker 4 (10:13):
The fifth correct response to text us at six one
seven three six two thirteen eighty five, We'll get that
T shirt. See complete contest rules at Financial chainshow dot com.
Speaker 2 (10:24):
Paul, do you know how many postmasters General there have
been in the United States. I do not seventy five,
which is actually fewer than I would have thought. It
seems like a job with a short shelf life, you know,
like it doesn't really seem like a place that you
want to stick around.
Speaker 3 (10:40):
In an enviable position.
Speaker 2 (10:42):
For that long. I'm kind of surprised that we don't
have like two to three per administration. You know, there
are some guys that served for you know, pretty long
periods of time. Actually, I mean again, kind of the
standard is, you know, four year term is what we
saw generally. But you know, you look at this and
this one guy, Jesse Donaldson served for six years in
(11:05):
the nineteen forties and fifties. He was He was a
good postmaster general too. The mail always came on time
with Donaldson, That's what you knew. John Gronowski two years
he was all right, Yeah, he was, he was okay.
He was lbj's first Postmaster General. And let me tell
you the male in nineteen sixty four not great. Could
have been better, could have been better? Just saying could
(11:25):
have been better? Uh, I digress. Let's let's talk a
little bit about mawana To and Disney. So they reported
their their earnings last night, and the earnings were pretty good. Actually,
I would say it's a company that seems to be
turning the corner and you know, delivering at least a
little bit more consistency among results. Stocks down about one
(11:48):
percent today. It was up a few percent in UH
after hours yesterday. But overall, it seems the story here
is the theme park business is pretty good, the studios
are starting to crank out hits again, yep. And the
streaming business, which was where five years ago everyone thought
the growth was going to come from, is basically tapped
(12:10):
out I think at this point, and not really a
major source of profit or loss. It's just kind of there.
Speaker 3 (12:17):
That's a fair assessment. It is noteworthy to point out
on the streaming side of things that they did report
a three one hundred twelve million dollar profit, down from
a loss, but you're right, I mean, that profit line
is not as significant as what people thought it was
going to be from a growth perspective there on the
streaming side of things. And I think the other reason
why the stock is trending a little bit down today
(12:39):
is they're up to one hundred and seventy eight million
paid subscribers between Hulu Plus or Hulu and Disney Plus.
And they did report that they're going to see a
bit of a decline in those numbers for Q two.
So it seems like that decline has investors perhaps a
little concern. But there were some other positives that I
thought came from this report. The profit billion streaming, the
(13:00):
theme parks in other areas that did okay. The linear
cable business continues to be a weak spot. That was
down about eleven percent.
Speaker 2 (13:09):
Yeah, big thing, just like looking through it. So if
you look at when they were really cranking, like twenty
eighteen twenty nineteen, So twenty eighteen, the three biggest movies
were Disney, and five out of the top ten were
So this is in terms of annual US box office
twenty nineteen. You take a look at it, the top
six movies were Disney and seven out of the top eight. Wow.
(13:33):
The only one wasn't was Spider Man Far from Home.
And that even Disney owned like a minority stake in
in terms of how the Marvel deal was structured. Twenty
twenty not really a real year for movies. Let's just
skip twenty twenty. Twenty twenty one. Again, this is where
they kind of ran into some trouble here. They had
three out of the top ten, but the dollar values
(13:54):
were all much smaller. The biggest one they had was
like two hundred and twenty five million dollars domestically twenty
twenty sorry hang on accidentally clicked on twenty three, twenty
twenty two, they only had two out of the top ten.
The biggest was four thirty six and the next one
was you know, three forty three, so again not really
reaching the heights they did previously. Twenty twenty three, again
(14:17):
three out of the top ten, the biggest one was
three fifty eight, and previously they'd been doing like six
seven hundred million last year. Okay, kind of a return
to dominance. Three out of the top four with two
of them over six hundred million. Yeah, that's the kind
of stuff that you need to be able to deliver.
And obviously a year to date so far nothing matters
because it's been you know a month.
Speaker 3 (14:40):
Well Molana too, I guess to point out, did gross
has grossed over a billion? So yeah, so yeah, that's
fantastic to see there. I'm sure Moana three is is
coming soon.
Speaker 2 (14:50):
Have you either of you seen the second one.
Speaker 4 (14:52):
I haven't heard if it's not better than the first.
Speaker 2 (14:54):
Well, so the big thing is, uh, they took lin
Manuel Miranda off the song so he didn't do the
songs whereas he did for the first. And so I've
heard that the overall you know, catchiness and quality isn't
quite the same that it wasn't the first. I haven't
heard any bad things about the movie, but just hey,
it's not quite up to stuff. But the bar was
pretty high because the first one is fantastic. Let's talk
(15:17):
a little bit about app Lay, or Apple as they're
more commonly referred to. So China is reportedly going to
probe Apple's app store fees in an anti trust probe.
And you better believe that this is connected to the
imposition of tariffs from the United States earlier this week.
(15:38):
And here's this is actually kind of interesting, just how
the two countries are playing off each other. So the
United States imposes ten percent tariffs on all imports from China.
There was They also removed the deminimus exception, saying that
goods under eight hundred dollars originally were not subject to that.
Now they said they are, but we'll talk about the
(15:59):
post off just a little bit, because it's all confusing
as to whether or not this may have actually been
rescinded in terms of that deminimous exception coming back. But
the message from the United States is, look, there are
two real ways that China has grown their economy in
the last couple decades, exporting a bunch of stuff and
building real estate. Now the real estate side of things
(16:21):
is already in the toilet in China right now. But okay,
if we're going to impose tariffs on you, that's kind
of going right after the lifeblood of the Chinese economy
being able to export stuff and make money off of it.
The United States is not a big exported to China.
So the initial response yesterday was, hey, China, you know,
slap fifteen percent tariffs on like a small volume of
US goods. The US economy does like if today China
(16:47):
said we're not importing anything from the US. Again, I'm
just talking like first order, not like the larger things
that it would sound. Yeah, there'd be some companies that
have issues, but ultimately the US economies just fine not
exporting stuff to China. It's not a meaningful source of
economic growth. For US instead. Pretty savvy here in terms of,
(17:08):
you know, kind of how they're hitting back. Hey, the
lifeblood of the Chinese economy, it's those two things, real
estate and exports. Lifeblood of the US economy, it's tech
and the stock market, right Like, that is where the
meat is right now. So if you want to punish
the United States, you don't impose a bunch of tariffs
on stuff that the US is exporting to China because
(17:28):
the US doesn't export enough to China for it to matter. Instead,
you say, no, we're gonna go after the tech companies.
Yesterday it was Google, today it's Apple, and Ida has
been throwing the mix too correct, So like this is
what you are going to see here, and it's why. Look,
China is not in a good situation. It always bothers
(17:50):
me when people are like, oh, like the Chinese have
the upper hand in this because we buy so much
to them. The Chinese economy sucks and if you make
it suck more, it's going to be painful for them.
China's not just sitting there going all like we can do.
They're not evil geniuses, you like, it's just like they're
normal people that just happen to have like a government
(18:10):
that is really repressive and authoritarian, and generally it's something
that I don't agree with. But whatever, it's neither here
nor there. They're not super geniuses that are like going
to somehow conquer the world because everyone else is dumb. Instead,
like they've had a good run of like a couple
decades and they're running into some real issues right now.
So this here is exactly how if you're trying it.
(18:33):
If I were a foreign country trying to fight a
trade war with the US and I didn't import a
lot from the US, fine, I'm going straight after your
capital structure like that. That's exactly where I'm going because
that's where the meat of growth is for the US
at this particular point in time.
Speaker 3 (18:50):
Yeah, you're probably talking about twenty percent of the S
and P five hundred with those three companies right there,
and from a waiting perspective.
Speaker 2 (18:56):
Right, and this is where if China really wants to
punish the US, they they certainly can. They can inflict
some pain on this and the question and this is
why this is like an uninvestible theme. It's like you
don't have any idea who blinks first on this? It's
purely a game of chicken, and there's no way that
you can hypothesize who's going to blink first based on
(19:18):
more pain being inflicted.
Speaker 3 (19:19):
They pull TikTok. That will get some people pretty upset.
Speaker 2 (19:24):
That would I was hoping we could get through an
entire show without talking TikTok, but now we haven't. Thanks,
I appreciate that quick break here. When we come back,
we get the trivia answer. We're talking Post Office.
Speaker 1 (19:41):
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Speaker 4 (20:05):
Trivia question today was who was the first post Master General?
That would be Benjamin Franklin. Dottie from Wareham, mass is
our winner today, taking home a Financial Looks Shane Show
t shirt. Congrats to Dottie and we play trivia every
day here on the Financial Exchange. See complete contest rules
at Financial Looks shangeeshow dot com.
Speaker 2 (20:26):
Speaking of post mm hmmm hm.
Speaker 1 (20:32):
So.
Speaker 2 (20:33):
In a story that has played out over the last
twenty four hours now. Yesterday, this was I think around
like six pm, the USPS said that they would stop
accepting parcel part Can we just restart the segment? Yeah?
Can you play the bumper again? The US Postal Service
said that they would stop accepting parcels from China and
(20:56):
Hong Kong. And the reason for this was simple. At
twelve oh one am yesterday, the Trump administration put in
place a ten percent tariff on all imports from China.
But beyond that and why they said all parcels would
would not be accepted anymore from there. Previously there had
been what's called a deminimus exception, which stated, hey, if
(21:17):
the thing that you're shipping is valued at under eight
hundred dollars, tariffs do not apply. And so why this
mattered is there are all kinds of businesses that are
based in the US, Canada, based wherever, that don't actually
have any inventory of their own, but rather just have
a third party handle the shipping direct from China. It's
called determine. And look, this can be any business that
(21:40):
like sells something but doesn't have inventory in its own
warehouses or in any warehouse that it's you know, even handling.
It's called a drop shipper. Basically someone else handles all
of that. So if you were a drop shipper that
had your warehouses in China, think of companies like Timu Shine,
you know, things like that. Hey, if you had this
(22:00):
dominimus exception in place, which by the way, you did,
because remember even before this, there were tariffs on Chinese
imports that the Trump administration had imposed the first time
around with the Deminimus exception. So immediately what you get is, okay,
we've got to send this stuff into So let's say
that someone, just as an example, is trying to buy
(22:21):
a ten dollars good from Timu and it's being shipped
directly from Timu in China. Okay, gets shipped over and
it lands at Lax and it goes through customs and whatever.
We're going to deliver this. Now you have the issue
of okay, how do we make sure that the claimed
(22:43):
value of goods is actually having the proper tariff applied.
How do we know, just as an example, that Timu
isn't saying, hey, this package has ten dollars of goods
when it actually has twenty. And this is why the
whole diminimus exception generally makes sense is because there are
the estimates that I've seen in between one point two
(23:04):
and one point seven billion packages per year shipped directly
from China into the United States. Now, Paul, on a
given day, let's say that you were working for US
Customs and Border Patrol, how many packages do you think
you could inspect in a regular let's even say like
a ten hour shift in order to verify the contents
(23:24):
and their value to fifty three hundred, So at two
hundred and fifty to three. And remember, let's take the
midpoint and say there's one point four billion packages that
are coming from China each year for three hundred and
sixty five days, that's three point eight million. And if
you're gonna do three hundred, was that three hundred a day? Yeah,
(23:44):
that's three hundred three day shift.
Speaker 1 (23:46):
Yep.
Speaker 2 (23:47):
You need twelve tho eight hundred people just looking at
packages from China in order to process that volume, Paul,
do we have twelve thousand, eight hundred people who are
in Customs more ENROLAG just looking at Chinese packages coming in?
Speaker 3 (24:02):
No, I wonder what the whole department is a size.
Speaker 2 (24:04):
So the US Postal Service initially suspended these the shipping
of parcels from China and Hong Kong this morning. It
was sometime between like seven and nine am. I don't
know the exact time. They reversed course and said we
are going to accept it and like, we'll figure out
how to do this. So couple things that I'm trying
(24:25):
to figure out, a like, how did they suddenly figure
out how to do it when twelve hours before they
told everyone no, we can't b Has there been a
change on that deminimous exception that we just don't know
about yet? Yeah, and it's going to come out in
an executive order today where hey, we're reinstating the deminimus
exception on this.
Speaker 3 (24:45):
That has to be it.
Speaker 2 (24:46):
It like, that's how could get resolve that because otherwise
I don't know how you can enforce this properly. So
we'll see if we get any further news on this.
But it's been a wild twelve hours for the Post
Office and I don't know, We'll just have to see
kind of how it goes here.
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Speaker 2 (26:09):
Paul, we got the Jolts report yesterday. I'm sure you
and Mike covered it, but one of the key things
there is that not even a key thing. Look, it's
the same thing Jay Powell said when the FED meeting
happened a couple weeks ago. If you've got a job
right now, you're generally pretty safe. If you don't have
a job, it's pretty hard to get one.
Speaker 3 (26:30):
Yeah, I think that's that sums up really well what
we saw with the Jolts report yesterday. Just to focus
on this ratio of open jobs to available workers, because
that's one that's pretty easy to sort of break down.
Back in the peak of March of twenty twenty two,
we reached this point in the United States where there
was two jobs open for every one worker that was
looking for a position. So that was at you know,
(26:51):
the peak of powers in terms of the labor market.
The ratio has now as of this recent report declined
down to basically one to one, one point one to
one job jobs open to available worker looking for jobs.
We posted about seven point six million of jobs available
in that Jolt Support yesterday, And it speaks to your point, Chuck,
where if I were asked to categorize the labor market
(27:13):
at this point, it is not in a troubled state,
I wouldn't say, you know, unemployment has been at a
pretty static level for the last couple months. You've had
limited layoffs. But what we have seen is it's nowhere
near as hot as it was in some of those
prior years. The percentages of new jobs that are being
hired into the labor market is down to about three
(27:34):
and a half percent through twenty twenty four. It was
higher a peak of about four point four percent back
in twenty one.
Speaker 2 (27:42):
To take a quick break here, when we return, we'll
do a little bit of stack root.
Speaker 1 (27:47):
Let's find daily interviews and full shows of the Financial
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(28:08):
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Speaker 2 (28:23):
Before we get to stack Roulette, Paul, the sp has
just now turned positive. It's a point six points or
point zero zero one percent. But again, just a really
boring day overall, even though there's a lot of churn
happening under the surface in terms of where different sectors
and different companies are moving. But from the top down,
(28:45):
looks pretty quiet, but there's a lot moving underneath, underneath
the hood. What do you got for me?
Speaker 3 (28:50):
Super Bowl is coming up and the American population will
bet a record one point four billion dollars on this
upcoming Super Bowl. In particular, what stood out now is
we have about thirty eight states where it is legal
for sports gambling, about seventy percent of the adult population,
and New York has really overtaken Nevada as the top
(29:12):
market in the space. I mean, obviously from a population size,
you can understand it. But what we've seen in terms
of the shifts in betting over the last couple of
years is that New York is really the pre eminent
market from a sports gambling perspective, where sports betting for
this Super Bowl will reach up to one hundred and
eighty three million dollars in New York alone, followed by
another one hundred and seventy million from Nevada and one
(29:35):
hundred and forty seven million from New Jersey. So it
was a number last year that came in I believe
at one point two five billion set to increase even
more this year. You still have got twelve more states
out there for legalization, but it's become a huge market
out there.
Speaker 2 (29:52):
The fascinating thing about the legality of sports betting right
now is when you look at the state it's where
it is not allowed. California and Texas don't allow it.
The two biggest states of the country do not allow it,
and so it's kind of remarkable that you're getting these
numbers despite those two not being involved. I like, having
(30:17):
seen this play out for the last several years in
the Northeast. Now it's clear to me that we have
a real gambling problem, in a real sports gambling problem
in the United States. And it's not to say that
I think it should, you know, go back to being illegal.
I don't believe that, but I think we have some
(30:37):
real issues with what I'm seeing, particularly, I mean again, like,
if you look at the data, it's mostly young men
between the ages of twenty and thirty that have the
biggest problems here, and there are not nearly enough resources
dedicated to either a supporting them or b basically like
cutting them off if they are ending up in debt
(30:59):
to legal online sports books. Which is what you're seeing
at an increasing rate, so that there's a real problem
on that side of things. I don't know what the
answer to it is, but I've seen it popping up
more and more with people either in my life or
adjacent to my life that are ending up in a
really bad spot because of sports gambling. And I don't
(31:23):
know what we're gonna do about it, because it is
a systemic issue at this point from what I can tell.
Speaker 3 (31:30):
Yeah, usually you know, you have legalization and then there
needs to be a correction in terms of the promotion
and some of the guardrails around it. So we'll see.
Speaker 2 (31:39):
I want to talk a little bit about waffle House.
Waffle House announced yesterday that they are putting a fifty
cent per egg searcharge in place due to the price
of eggs and what that is doing to their business
as a result of the bird flu that is going
through the United States right now. My general rule of
thumb is when waffle House does something, it means it's
(32:02):
really bad the reason why, and not not that like
waffle House is doing it, but hey, it means there's
a real problem waffle House. If you're not familiar with them,
they're mostly located throughout the southeastern part of the country.
As a result, they have a ton of experience dealing
with hurricanes, namely, and one of the ways that a
lot of people who are trying to see the impact
(32:22):
of a storm measure the impact is through whether or
not waffle House closes locations in various areas. And the
reason why is waffle House has, like, literally, I'm not
making this up, they have like a hurricane preparedness center
where they help to direct their operations and basically they
like they are one of the last stores to close
(32:43):
in the event of a hurricane, in the first to
reopen because they're so good at it. And so when
waffle House says, hey, we've got a problem with the
price of eggs, I look at it and I go, okay,
we got a problem with the price of eggs. Yeah.
Speaker 3 (32:55):
I mean particularly, you'd think, I don't know the details
of the resources on their eggfront, but you'd think that
they have a lot of supplier relations in terms of
the amount that they're purchasing on a yearly basis. They
have as much access to eggs you typically as any
other institution in the country, just because of the amount
of consumption that occurs there. But like you said, it
(33:15):
absolutely is an issue from what we're seeing at grocery
stores where we're at. Back in December, it was four
dollars and fifteen cents for a dozen eggs. We now
sit wholesale at six seventy per dozen as of January
thirty first, So it is a huge issue. You're seeing
in California eggs almost exceeding nine dollars for a dozen,
(33:37):
and between seven and a quarter and seven sixty three
for the Midwest and New York.
Speaker 2 (33:42):
Uh, do you know where what states produce the most eggs? No?
Let me let me back up. Even before that, in
twenty twenty three, which is the last year that I
have data on this from. This is from the US
Department of Agriculture, How many eggs did the United States
in twenty twenty three? Either of you.
Speaker 4 (34:06):
Six billion?
Speaker 2 (34:08):
Six billion? Yes, possible, Like you're not gonna get it right,
But I'm just curious where both of you end up
going five hundred million, one hundred and nine billion, Wow,
one hundred and nine billion. I was closer, Yes, you were.
You were closer. Do you do either of you have
any idea which states produce the most eggs. Georgia. Georgia,
(34:33):
I think it looks like is top ten. They do
about five billion a year, so five percent of US
production comes from Georgia.
Speaker 3 (34:39):
California.
Speaker 2 (34:40):
California's three billion. The biggest ones I'm eyeballing this sexis
Texas is about six billion, six and a half. So
they're up there. The biggest ones that I'm seeing. I've
got Iowa at thirteen, I've got Ohio at eleven, I've
got Indiana at ten. And those are your biggest ones.
(35:02):
Massachusetts is an example, produces that that's ten billion. By
the way, Massachusetts produces forty one million per year. So
I had someone the other day come up to me
and they were asking about egg prices and they're like,
I don't get why egg prices are high in the Northeast,
Like this bird flu is not affecting the Northeast right now.
And the answer is, we don't get most of our
(35:23):
eggs in the Northeast from the Northeast. It's like it's
just how it is, I know, like the whole thing
about you know, oh, what was it like brown legs,
brown eggs or local eggs, and you know, no, there's
almost no local eggs that are sold in the Northeast
because there aren't enough chickens laying eggs in the Northeast.
Because if you're trying to run a legitimate, commercial sized
(35:46):
chicken farm, there are way more, way cheaper and way
more hospitable places that you can do it than around here.
Is kind of what I'm getting at. But yeah, one
hundred and nine, one hundred and nine billion eggs per year,
it's a lot. It's kind of wild. It's kind of wild.
Think about that's a lot of chickens, just like popping
(36:08):
those puppies out, you know, Really, do they get any
like weeks off or anything? How does it work?
Speaker 3 (36:14):
Is there no vacations? No vacations day they have unlimited PTO?
Speaker 2 (36:19):
If they get laid off, do they get severance? I
mean that's hard work, just laying those eggs all the time.
He's sitting I guess, don't you get bored? Ah, you're chicken?
All right? Another day? Another egg?
Speaker 4 (36:32):
Here you go, Jimmy, I'm a chicken.
Speaker 1 (36:34):
What I didn't.
Speaker 3 (36:35):
Realize is that this isn't The piece about the eggs
is that the US only imports about fifteen percent of
its food supply from other countries that that was news
to me.
Speaker 2 (36:42):
I would have guessed a higher percentage, mostly on the
produce side. Yeah, yeah, it's mostly on the and it's
mostly in the winter, you know, when you can't produce
it in the Southeast or in California. So yeah, it's
most of the food is produced domestically still. And the
amazing thing about that, I go back to this stat
over and over. In the nineteen hundreds and nineteen tens,
(37:03):
we had about seven million people domestically that were responsible
for food production. Today it's about a million people. So
the population has obviously grown exponentially over that time, but
we've gotten so efficient with the technology that we're using,
you know, fourteen percent of the workers to produce many
multiples of the amount of food that we did one
hundred years ago.
Speaker 3 (37:23):
It's probably only going to get more efficient with some
of the technology stuff that's rumored.
Speaker 2 (37:26):
And this is why I push back on some of
the stuff where it's like, oh, like we want to
you know, push back on automation imports and things like that. No,
don't you want to be able to like feed your
people with less work. Don't you want to be able
to have more goods with less work. Isn't that the
whole promise of technology? And yes, we need to figure
out how to make sure that the impacts to families
that lose jobs because of new technology aren't too big.
(37:49):
But you want progress like I got. Yeah, I don't
want to be sitting here like, hey, we can't use
drills on the job site because then we need fewer carpenters.
Speaker 3 (38:00):
We need to keep typewriters like you just you can't.
You gotta innovate.
Speaker 2 (38:04):
I'm glad the Carpenter's union didn't say, like, you know,
no drills or no power tools like that, that would
have been bad, like they realized. No, this helps us
do more. Let's take a quick break here for the
rest of the day. We'll see it tomorrow on the
Financial Exchange.
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(00:42):
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(01:05):
Zada and Paul Lane or two.
Speaker 2 (01:09):
The financial exchange kicking off right now, and markets are
pretty boring on the surface, but man, there's a lot
moving underneath the hood. So the Down's up twenty seven
points less than a tenth of a percent, the S
and P is down ten points, less than a quarter percent,
and the Nasdaq is down seventy six points about four
tenths of a percent, So not much moving, you know,
when you look at it right off the bat. Under
(01:31):
the hood, though you talk about you know, some kind
of the big stocks that people like to chat about.
AMD's down nine percent, Google's down eight, Tesla's down two,
Chipotle's down a couple after their most recent quarter, Apple's
down one and a quarter on the plus side, and
videos up almost four. Walmart's up one and a quarter.
Starbucks is up one. So it just kind of this
(01:52):
wide dispersion of results. And this is kind of what's
been keeping markets relatively tame and afloat the last few months.
Is hey, even with some of the big guys struggling,
you've had some other companies that have kind of been
able to say, okay, like we've got, you know, something
decent going on, and so markets are holding up right now.
(02:12):
We've got the ten year US treasury down nine point
five basis points to four point four to one eight percent,
so yields moving down meaningfully in the last couple of weeks. Now,
if you take a look just a couple of weeks
ago at where we were there, you had the tenure yield,
you know, it was floating right up around four point
eight percent. We're sitting here at four to four, so
(02:33):
down almost half a percent now in you know, the
last call it three weeks since January fourteenth is when
we hit that peak. So yield's coming in a little bit.
Mortgage is still floating up right around seven percent, though
this will probably bring them down to six nine to
five somewhere in that ballpark. So still not getting back
down towards you know, where we were in the middle
(02:55):
of last summer, but some improvement off that seven and
a quarter percent range at least that we've seen there.
Oil moving down ninety two cents a barrel today to
seventy one seventy eight on West Texas Intermediate triple a
national average for gas prices, though moving in the opposite direction,
up one point eight cents a gallon from three oh
(03:17):
one and seven I'm sorry, three ten and seven tenths
up to three twelve and five tenths. So gas price
is moving up just a little bit nationally, but quite honestly,
we've we've just been in like this three zho five
to three twenty range for the last I don't know,
coast to six months now, I think, And so no
real movement in either direction there. Gold though, continuing its
(03:39):
strong run, breaking twenty nine hundred dollars and ounce for
the first time now at twenty nine oh two after
it's up twenty six dollars and twenty cents. So Gold
cooking on all cylinders to kick off twenty twenty five.
Speaking of cylinders, see what I did there, Paul, Yeah.
Speaker 3 (03:59):
I don't even have my but it was good.
Speaker 2 (04:03):
So this story is messy. Actually, the Wall Street Journal
has this the headline. There is Nissan to reject Honda
deal to create world's number three automaker. I have a
buddy of mine who lives in Japan, and he had
sent this to me last night actually, like when it
was reported first by Japanese papers. But the reporting on
(04:30):
this afterwards there is Honda and Nissan initially were like, no,
like this was we don't know where this came from.
We're not, you know, saying this. Nissan's saying that they
have various different discussions that they are under way with
they're planning to make an announcement in mid February, and
that they are you know, one of the options is
that they may end up ending these merger talks with Honda.
(04:53):
But this story has been kind of messy for the
last twenty four hours, so I don't know exactly what
to make of it. But this deal was only announced.
When was this originally announced? December twenty third, so it's
been six weeks and I have no idea what's actually
going on here. But the reporting from the Wall Street journalist, Okay,
(05:18):
Honda was saying that, you know, we want to make
Nissan a subsidiary instead of you know, kind of a
merger of equals. But I mean, isn't that basically where
this is going to end up anyways, Like they're not
on equal footing. Honda is the far superior financial company.
They are the producer of way more vehicles. I don't
really know what Nissan's endgame is on this in terms
(05:41):
of trying to extract concessions here. They don't really have
a backup plan.
Speaker 3 (05:47):
No, they have no leverage in this situation. Really, Honda
is doing them a favor in a sense because of
the situation that they find themselves in. Nissan had just
laid off nine thousand workers in November and slashed its
fount factory capacity by one fifth to cut down some
of the costs. If you look at their sales numbers
specific to Nissan within the US and China, they've lagged
(06:08):
significantly over the last couple of years. So this idea
that the offer offends Nissan is something that they're just
negotiating from a position of very little strength. And it
seemed like, I don't know if your friend comment on this,
but it seemed like this was something that the Japanese
government would like.
Speaker 2 (06:29):
To see happen.
Speaker 3 (06:30):
Is that a fair way to sort of say that
there may have been some prodding on the Japanese government
side of things to influence Honda.
Speaker 2 (06:37):
Has that vibe to it, But I don't know. Here's
what I'll say, Nissan cannot survive on its own right.
It's not big enough, and they are threatened in two
clear in their two key markets China, they are being
absolutely destroyed in because of Chinese EV startups that are
taking market share from everyone, and in the US their
(06:59):
bread and butter the twenty tens, back when what's his name,
Carlos Gohan was running the company, the Niss Sound Rogue
was one of the best selling small SUVs out there.
They're getting their launch eating on that platform by the
Honda CRV and the Toyota RAV four. So if your
key products in your two biggest markets are being you know,
(07:21):
or seeing their sales decline significantly and quickly from their peaks,
your plan is if you're an automaker, because you need
to spend a lot of money to stay competitive.
Speaker 3 (07:32):
The other piece that I that I hit on because
of the prompting of the the Japanese government, is this
idea that there aren't these huge synergies between the two
companies here. They kind of compete in the same space,
and to your point, their Nissan is weaker in that
space of competition. So what are you really getting from
Honda's perspective with this merger. The idea that was mentioned
(07:54):
is that they'd be able to go to suppliers and
perhaps be able to renegotiate more favorable deals on supplies
that they were purchasing for their cars. But it just
didn't seem like a slam dug mergay. It'll be interesting
to see what happens, but obviously some turbulence on the
negotiation floor.
Speaker 2 (08:09):
A little bit messy there, a little bit messy. Take
a quick break here. When we come back, we've got
trivia and then we'll talk Disney earnings and Apple after this.
Speaker 1 (08:21):
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Speaker 4 (08:56):
The Financial Exchange is a proud partner of the Disabled
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five K dot Boston. Time for trivia here on the
Financial Exchange. The United States Postal Service said it will
resume accepting inbound mail and packages from China and Hong
(09:43):
Kong posts, just hours after its suspended service from those regions.
The USPS has had a long and storied history, beginning
with the founding of the service in seventeen seventy five.
Triviy questions today who is the first Postmaster General? Once again?
Who's the first Postmaster General? Be the fifth person today
(10:05):
to text us at six one seven three six two
thirteen eighty five with the correct answer, and you win
a Financial Eks Shane Show T shirt.
Speaker 2 (10:12):
Once again.
Speaker 4 (10:13):
The fifth correct response to text us at six one
seven three six two thirteen eighty five, We'll get that
T shirt. See complete contest rules at Financial chainshow dot com.
Speaker 2 (10:24):
Paul, do you know how many postmasters General there have
been in the United States. I do not seventy five,
which is actually fewer than I would have thought. It
seems like a job with a short shelf life, you know,
like it doesn't really seem like a place that you
want to stick around.
Speaker 3 (10:40):
In an enviable position.
Speaker 2 (10:42):
For that long. I'm kind of surprised that we don't
have like two to three per administration. You know, there
are some guys that served for you know, pretty long
periods of time. Actually, I mean again, kind of the
standard is, you know, four year term is what we
saw generally. But you know, you look at this and
this one guy, Jesse Donaldson served for six years in
(11:05):
the nineteen forties and fifties. He was He was a
good postmaster general too. The mail always came on time
with Donaldson, That's what you knew. John Gronowski two years
he was all right, Yeah, he was, he was okay.
He was lbj's first Postmaster General. And let me tell
you the male in nineteen sixty four not great. Could
have been better, could have been better? Just saying could
(11:25):
have been better? Uh, I digress. Let's let's talk a
little bit about mawana To and Disney. So they reported
their their earnings last night, and the earnings were pretty good. Actually,
I would say it's a company that seems to be
turning the corner and you know, delivering at least a
little bit more consistency among results. Stocks down about one
(11:48):
percent today. It was up a few percent in UH
after hours yesterday. But overall, it seems the story here
is the theme park business is pretty good, the studios
are starting to crank out hits again, yep. And the
streaming business, which was where five years ago everyone thought
the growth was going to come from, is basically tapped
(12:10):
out I think at this point, and not really a
major source of profit or loss. It's just kind of there.
Speaker 3 (12:17):
That's a fair assessment. It is noteworthy to point out
on the streaming side of things that they did report
a three one hundred twelve million dollar profit, down from
a loss, but you're right, I mean, that profit line
is not as significant as what people thought it was
going to be from a growth perspective there on the
streaming side of things. And I think the other reason
why the stock is trending a little bit down today
(12:39):
is they're up to one hundred and seventy eight million
paid subscribers between Hulu Plus or Hulu and Disney Plus.
And they did report that they're going to see a
bit of a decline in those numbers for Q two.
So it seems like that decline has investors perhaps a
little concern. But there were some other positives that I
thought came from this report. The profit billion streaming, the
(13:00):
theme parks in other areas that did okay. The linear
cable business continues to be a weak spot. That was
down about eleven percent.
Speaker 2 (13:09):
Yeah, big thing, just like looking through it. So if
you look at when they were really cranking, like twenty
eighteen twenty nineteen, So twenty eighteen, the three biggest movies
were Disney, and five out of the top ten were
So this is in terms of annual US box office
twenty nineteen. You take a look at it, the top
six movies were Disney and seven out of the top eight. Wow.
(13:33):
The only one wasn't was Spider Man Far from Home.
And that even Disney owned like a minority stake in
in terms of how the Marvel deal was structured. Twenty
twenty not really a real year for movies. Let's just
skip twenty twenty. Twenty twenty one. Again, this is where
they kind of ran into some trouble here. They had
three out of the top ten, but the dollar values
(13:54):
were all much smaller. The biggest one they had was
like two hundred and twenty five million dollars domestically twenty
twenty sorry hang on accidentally clicked on twenty three, twenty
twenty two, they only had two out of the top ten.
The biggest was four thirty six and the next one
was you know, three forty three, so again not really
reaching the heights they did previously. Twenty twenty three, again
(14:17):
three out of the top ten, the biggest one was
three fifty eight, and previously they'd been doing like six
seven hundred million last year. Okay, kind of a return
to dominance. Three out of the top four with two
of them over six hundred million. Yeah, that's the kind
of stuff that you need to be able to deliver.
And obviously a year to date so far nothing matters
because it's been you know a month.
Speaker 3 (14:40):
Well Molana too, I guess to point out, did gross
has grossed over a billion? So yeah, so yeah, that's
fantastic to see there. I'm sure Moana three is is
coming soon.
Speaker 2 (14:50):
Have you either of you seen the second one.
Speaker 4 (14:52):
I haven't heard if it's not better than the first.
Speaker 2 (14:54):
Well, so the big thing is, uh, they took lin
Manuel Miranda off the song so he didn't do the
songs whereas he did for the first. And so I've
heard that the overall you know, catchiness and quality isn't
quite the same that it wasn't the first. I haven't
heard any bad things about the movie, but just hey,
it's not quite up to stuff. But the bar was
pretty high because the first one is fantastic. Let's talk
(15:17):
a little bit about app Lay, or Apple as they're
more commonly referred to. So China is reportedly going to
probe Apple's app store fees in an anti trust probe.
And you better believe that this is connected to the
imposition of tariffs from the United States earlier this week.
(15:38):
And here's this is actually kind of interesting, just how
the two countries are playing off each other. So the
United States imposes ten percent tariffs on all imports from China.
There was They also removed the deminimus exception, saying that
goods under eight hundred dollars originally were not subject to that.
Now they said they are, but we'll talk about the
(15:59):
post off just a little bit, because it's all confusing
as to whether or not this may have actually been
rescinded in terms of that deminimous exception coming back. But
the message from the United States is, look, there are
two real ways that China has grown their economy in
the last couple decades, exporting a bunch of stuff and
building real estate. Now the real estate side of things
(16:21):
is already in the toilet in China right now. But okay,
if we're going to impose tariffs on you, that's kind
of going right after the lifeblood of the Chinese economy
being able to export stuff and make money off of it.
The United States is not a big exported to China.
So the initial response yesterday was, hey, China, you know,
slap fifteen percent tariffs on like a small volume of
US goods. The US economy does like if today China
(16:47):
said we're not importing anything from the US. Again, I'm
just talking like first order, not like the larger things
that it would sound. Yeah, there'd be some companies that
have issues, but ultimately the US economies just fine not
exporting stuff to China. It's not a meaningful source of
economic growth. For US instead. Pretty savvy here in terms of,
(17:08):
you know, kind of how they're hitting back. Hey, the
lifeblood of the Chinese economy, it's those two things, real
estate and exports. Lifeblood of the US economy, it's tech
and the stock market, right Like, that is where the
meat is right now. So if you want to punish
the United States, you don't impose a bunch of tariffs
on stuff that the US is exporting to China because
(17:28):
the US doesn't export enough to China for it to matter. Instead,
you say, no, we're gonna go after the tech companies.
Yesterday it was Google, today it's Apple, and Ida has
been throwing the mix too correct, So like this is
what you are going to see here, and it's why. Look,
China is not in a good situation. It always bothers
(17:50):
me when people are like, oh, like the Chinese have
the upper hand in this because we buy so much
to them. The Chinese economy sucks and if you make
it suck more, it's going to be painful for them.
China's not just sitting there going all like we can do.
They're not evil geniuses, you like, it's just like they're
normal people that just happen to have like a government
(18:10):
that is really repressive and authoritarian, and generally it's something
that I don't agree with. But whatever, it's neither here
nor there. They're not super geniuses that are like going
to somehow conquer the world because everyone else is dumb. Instead,
like they've had a good run of like a couple
decades and they're running into some real issues right now.
So this here is exactly how if you're trying it.
(18:33):
If I were a foreign country trying to fight a
trade war with the US and I didn't import a
lot from the US, fine, I'm going straight after your
capital structure like that. That's exactly where I'm going because
that's where the meat of growth is for the US
at this particular point in time.
Speaker 3 (18:50):
Yeah, you're probably talking about twenty percent of the S
and P five hundred with those three companies right there,
and from a waiting perspective.
Speaker 2 (18:56):
Right, and this is where if China really wants to
punish the US, they they certainly can. They can inflict
some pain on this and the question and this is
why this is like an uninvestible theme. It's like you
don't have any idea who blinks first on this? It's
purely a game of chicken, and there's no way that
you can hypothesize who's going to blink first based on
(19:18):
more pain being inflicted.
Speaker 3 (19:19):
They pull TikTok. That will get some people pretty upset.
Speaker 2 (19:24):
That would I was hoping we could get through an
entire show without talking TikTok, but now we haven't. Thanks,
I appreciate that quick break here. When we come back,
we get the trivia answer. We're talking Post Office.
Speaker 1 (19:41):
Bringing the latest financial news straight to your radio every day.
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(20:02):
Radio Network.
Speaker 4 (20:05):
Trivia question today was who was the first post Master General?
That would be Benjamin Franklin. Dottie from Wareham, mass is
our winner today, taking home a Financial Looks Shane Show
t shirt. Congrats to Dottie and we play trivia every
day here on the Financial Exchange. See complete contest rules
at Financial Looks shangeeshow dot com.
Speaker 2 (20:26):
Speaking of post mm hmmm hm.
Speaker 1 (20:32):
So.
Speaker 2 (20:33):
In a story that has played out over the last
twenty four hours now. Yesterday, this was I think around
like six pm, the USPS said that they would stop
accepting parcel part Can we just restart the segment? Yeah?
Can you play the bumper again? The US Postal Service
said that they would stop accepting parcels from China and
(20:56):
Hong Kong. And the reason for this was simple. At
twelve oh one am yesterday, the Trump administration put in
place a ten percent tariff on all imports from China.
But beyond that and why they said all parcels would
would not be accepted anymore from there. Previously there had
been what's called a deminimus exception, which stated, hey, if
(21:17):
the thing that you're shipping is valued at under eight
hundred dollars, tariffs do not apply. And so why this
mattered is there are all kinds of businesses that are
based in the US, Canada, based wherever, that don't actually
have any inventory of their own, but rather just have
a third party handle the shipping direct from China. It's
called determine. And look, this can be any business that
(21:40):
like sells something but doesn't have inventory in its own
warehouses or in any warehouse that it's you know, even handling.
It's called a drop shipper. Basically someone else handles all
of that. So if you were a drop shipper that
had your warehouses in China, think of companies like Timu Shine,
you know, things like that. Hey, if you had this
(22:00):
dominimus exception in place, which by the way, you did,
because remember even before this, there were tariffs on Chinese
imports that the Trump administration had imposed the first time
around with the Deminimus exception. So immediately what you get is, okay,
we've got to send this stuff into So let's say
that someone, just as an example, is trying to buy
(22:21):
a ten dollars good from Timu and it's being shipped
directly from Timu in China. Okay, gets shipped over and
it lands at Lax and it goes through customs and whatever.
We're going to deliver this. Now you have the issue
of okay, how do we make sure that the claimed
(22:43):
value of goods is actually having the proper tariff applied.
How do we know, just as an example, that Timu
isn't saying, hey, this package has ten dollars of goods
when it actually has twenty. And this is why the
whole diminimus exception generally makes sense is because there are
the estimates that I've seen in between one point two
(23:04):
and one point seven billion packages per year shipped directly
from China into the United States. Now, Paul, on a
given day, let's say that you were working for US
Customs and Border Patrol, how many packages do you think
you could inspect in a regular let's even say like
a ten hour shift in order to verify the contents
(23:24):
and their value to fifty three hundred, So at two
hundred and fifty to three. And remember, let's take the
midpoint and say there's one point four billion packages that
are coming from China each year for three hundred and
sixty five days, that's three point eight million. And if
you're gonna do three hundred, was that three hundred a day? Yeah,
(23:44):
that's three hundred three day shift.
Speaker 1 (23:46):
Yep.
Speaker 2 (23:47):
You need twelve tho eight hundred people just looking at
packages from China in order to process that volume, Paul,
do we have twelve thousand, eight hundred people who are
in Customs more ENROLAG just looking at Chinese packages coming in?
Speaker 3 (24:02):
No, I wonder what the whole department is a size.
Speaker 2 (24:04):
So the US Postal Service initially suspended these the shipping
of parcels from China and Hong Kong this morning. It
was sometime between like seven and nine am. I don't
know the exact time. They reversed course and said we
are going to accept it and like, we'll figure out
how to do this. So couple things that I'm trying
(24:25):
to figure out, a like, how did they suddenly figure
out how to do it when twelve hours before they
told everyone no, we can't b Has there been a
change on that deminimous exception that we just don't know
about yet? Yeah, and it's going to come out in
an executive order today where hey, we're reinstating the deminimus
exception on this.
Speaker 3 (24:45):
That has to be it.
Speaker 2 (24:46):
It like, that's how could get resolve that because otherwise
I don't know how you can enforce this properly. So
we'll see if we get any further news on this.
But it's been a wild twelve hours for the Post
Office and I don't know, We'll just have to see
kind of how it goes here.
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Speaker 2 (26:09):
Paul, we got the Jolts report yesterday. I'm sure you
and Mike covered it, but one of the key things
there is that not even a key thing. Look, it's
the same thing Jay Powell said when the FED meeting
happened a couple weeks ago. If you've got a job
right now, you're generally pretty safe. If you don't have
a job, it's pretty hard to get one.
Speaker 3 (26:30):
Yeah, I think that's that sums up really well what
we saw with the Jolts report yesterday. Just to focus
on this ratio of open jobs to available workers, because
that's one that's pretty easy to sort of break down.
Back in the peak of March of twenty twenty two,
we reached this point in the United States where there
was two jobs open for every one worker that was
looking for a position. So that was at you know,
(26:51):
the peak of powers in terms of the labor market.
The ratio has now as of this recent report declined
down to basically one to one, one point one to
one job jobs open to available worker looking for jobs.
We posted about seven point six million of jobs available
in that Jolt Support yesterday, And it speaks to your point, Chuck,
where if I were asked to categorize the labor market
(27:13):
at this point, it is not in a troubled state,
I wouldn't say, you know, unemployment has been at a
pretty static level for the last couple months. You've had
limited layoffs. But what we have seen is it's nowhere
near as hot as it was in some of those
prior years. The percentages of new jobs that are being
hired into the labor market is down to about three
(27:34):
and a half percent through twenty twenty four. It was
higher a peak of about four point four percent back
in twenty one.
Speaker 2 (27:42):
To take a quick break here, when we return, we'll
do a little bit of stack root.
Speaker 1 (27:47):
Let's 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.
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Just go to YouTube dot com and search for the
(28:08):
Financial Exchange. This is your home for breaking business and
financial news. This is the Financial Exchange Radio Network.
Speaker 2 (28:23):
Before we get to stack Roulette, Paul, the sp has
just now turned positive. It's a point six points or
point zero zero one percent. But again, just a really
boring day overall, even though there's a lot of churn
happening under the surface in terms of where different sectors
and different companies are moving. But from the top down,
(28:45):
looks pretty quiet, but there's a lot moving underneath, underneath
the hood. What do you got for me?
Speaker 3 (28:50):
Super Bowl is coming up and the American population will
bet a record one point four billion dollars on this
upcoming Super Bowl. In particular, what stood out now is
we have about thirty eight states where it is legal
for sports gambling, about seventy percent of the adult population,
and New York has really overtaken Nevada as the top
(29:12):
market in the space. I mean, obviously from a population size,
you can understand it. But what we've seen in terms
of the shifts in betting over the last couple of
years is that New York is really the pre eminent
market from a sports gambling perspective, where sports betting for
this Super Bowl will reach up to one hundred and
eighty three million dollars in New York alone, followed by
another one hundred and seventy million from Nevada and one
(29:35):
hundred and forty seven million from New Jersey. So it
was a number last year that came in I believe
at one point two five billion set to increase even
more this year. You still have got twelve more states
out there for legalization, but it's become a huge market
out there.
Speaker 2 (29:52):
The fascinating thing about the legality of sports betting right
now is when you look at the state it's where
it is not allowed. California and Texas don't allow it.
The two biggest states of the country do not allow it,
and so it's kind of remarkable that you're getting these
numbers despite those two not being involved. I like, having
(30:17):
seen this play out for the last several years in
the Northeast. Now it's clear to me that we have
a real gambling problem, in a real sports gambling problem
in the United States. And it's not to say that
I think it should, you know, go back to being illegal.
I don't believe that, but I think we have some
(30:37):
real issues with what I'm seeing, particularly, I mean again, like,
if you look at the data, it's mostly young men
between the ages of twenty and thirty that have the
biggest problems here, and there are not nearly enough resources
dedicated to either a supporting them or b basically like
cutting them off if they are ending up in debt
(30:59):
to legal online sports books. Which is what you're seeing
at an increasing rate, so that there's a real problem
on that side of things. I don't know what the
answer to it is, but I've seen it popping up
more and more with people either in my life or
adjacent to my life that are ending up in a
really bad spot because of sports gambling. And I don't
(31:23):
know what we're gonna do about it, because it is
a systemic issue at this point from what I can tell.
Speaker 3 (31:30):
Yeah, usually you know, you have legalization and then there
needs to be a correction in terms of the promotion
and some of the guardrails around it. So we'll see.
Speaker 2 (31:39):
I want to talk a little bit about waffle House.
Waffle House announced yesterday that they are putting a fifty
cent per egg searcharge in place due to the price
of eggs and what that is doing to their business
as a result of the bird flu that is going
through the United States right now. My general rule of
thumb is when waffle House does something, it means it's
(32:02):
really bad the reason why, and not not that like
waffle House is doing it, but hey, it means there's
a real problem waffle House. If you're not familiar with them,
they're mostly located throughout the southeastern part of the country.
As a result, they have a ton of experience dealing
with hurricanes, namely, and one of the ways that a
lot of people who are trying to see the impact
(32:22):
of a storm measure the impact is through whether or
not waffle House closes locations in various areas. And the
reason why is waffle House has, like, literally, I'm not
making this up, they have like a hurricane preparedness center
where they help to direct their operations and basically they
like they are one of the last stores to close
(32:43):
in the event of a hurricane, in the first to
reopen because they're so good at it. And so when
waffle House says, hey, we've got a problem with the
price of eggs, I look at it and I go, okay,
we got a problem with the price of eggs. Yeah.
Speaker 3 (32:55):
I mean particularly, you'd think, I don't know the details
of the resources on their eggfront, but you'd think that
they have a lot of supplier relations in terms of
the amount that they're purchasing on a yearly basis. They
have as much access to eggs you typically as any
other institution in the country, just because of the amount
of consumption that occurs there. But like you said, it
(33:15):
absolutely is an issue from what we're seeing at grocery
stores where we're at. Back in December, it was four
dollars and fifteen cents for a dozen eggs. We now
sit wholesale at six seventy per dozen as of January
thirty first, So it is a huge issue. You're seeing
in California eggs almost exceeding nine dollars for a dozen,
(33:37):
and between seven and a quarter and seven sixty three
for the Midwest and New York.
Speaker 2 (33:42):
Uh, do you know where what states produce the most eggs? No?
Let me let me back up. Even before that, in
twenty twenty three, which is the last year that I
have data on this from. This is from the US
Department of Agriculture, How many eggs did the United States
in twenty twenty three? Either of you.
Speaker 4 (34:06):
Six billion?
Speaker 2 (34:08):
Six billion? Yes, possible, Like you're not gonna get it right,
But I'm just curious where both of you end up
going five hundred million, one hundred and nine billion, Wow,
one hundred and nine billion. I was closer, Yes, you were.
You were closer. Do you do either of you have
any idea which states produce the most eggs. Georgia. Georgia,
(34:33):
I think it looks like is top ten. They do
about five billion a year, so five percent of US
production comes from Georgia.
Speaker 3 (34:39):
California.
Speaker 2 (34:40):
California's three billion. The biggest ones I'm eyeballing this sexis
Texas is about six billion, six and a half. So
they're up there. The biggest ones that I'm seeing. I've
got Iowa at thirteen, I've got Ohio at eleven, I've
got Indiana at ten. And those are your biggest ones.
(35:02):
Massachusetts is an example, produces that that's ten billion. By
the way, Massachusetts produces forty one million per year. So
I had someone the other day come up to me
and they were asking about egg prices and they're like,
I don't get why egg prices are high in the Northeast,
Like this bird flu is not affecting the Northeast right now.
And the answer is, we don't get most of our
(35:23):
eggs in the Northeast from the Northeast. It's like it's
just how it is, I know, like the whole thing
about you know, oh, what was it like brown legs,
brown eggs or local eggs, and you know, no, there's
almost no local eggs that are sold in the Northeast
because there aren't enough chickens laying eggs in the Northeast.
Because if you're trying to run a legitimate, commercial sized
(35:46):
chicken farm, there are way more, way cheaper and way
more hospitable places that you can do it than around here.
Is kind of what I'm getting at. But yeah, one
hundred and nine, one hundred and nine billion eggs per year,
it's a lot. It's kind of wild. It's kind of wild.
Think about that's a lot of chickens, just like popping
(36:08):
those puppies out, you know, Really, do they get any
like weeks off or anything? How does it work?
Speaker 3 (36:14):
Is there no vacations? No vacations day they have unlimited PTO?
Speaker 2 (36:19):
If they get laid off, do they get severance? I
mean that's hard work, just laying those eggs all the time.
He's sitting I guess, don't you get bored? Ah, you're chicken?
All right? Another day? Another egg?
Speaker 4 (36:32):
Here you go, Jimmy, I'm a chicken.
Speaker 1 (36:34):
What I didn't.
Speaker 3 (36:35):
Realize is that this isn't The piece about the eggs
is that the US only imports about fifteen percent of
its food supply from other countries that that was news
to me.
Speaker 2 (36:42):
I would have guessed a higher percentage, mostly on the
produce side. Yeah, yeah, it's mostly on the and it's
mostly in the winter, you know, when you can't produce
it in the Southeast or in California. So yeah, it's
most of the food is produced domestically still. And the
amazing thing about that, I go back to this stat
over and over. In the nineteen hundreds and nineteen tens,
(37:03):
we had about seven million people domestically that were responsible
for food production. Today it's about a million people. So
the population has obviously grown exponentially over that time, but
we've gotten so efficient with the technology that we're using,
you know, fourteen percent of the workers to produce many
multiples of the amount of food that we did one
hundred years ago.
Speaker 3 (37:23):
It's probably only going to get more efficient with some
of the technology stuff that's rumored.
Speaker 2 (37:26):
And this is why I push back on some of
the stuff where it's like, oh, like we want to
you know, push back on automation imports and things like that. No,
don't you want to be able to like feed your
people with less work. Don't you want to be able
to have more goods with less work. Isn't that the
whole promise of technology? And yes, we need to figure
out how to make sure that the impacts to families
that lose jobs because of new technology aren't too big.
(37:49):
But you want progress like I got. Yeah, I don't
want to be sitting here like, hey, we can't use
drills on the job site because then we need fewer carpenters.
Speaker 3 (38:00):
We need to keep typewriters like you just you can't.
You gotta innovate.
Speaker 2 (38:04):
I'm glad the Carpenter's union didn't say, like, you know,
no drills or no power tools like that, that would
have been bad, like they realized. No, this helps us
do more. Let's take a quick break here for the
rest of the day. We'll see it tomorrow on the
Financial Exchange.
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