May 14, 2025 • 38 mins
Chuck Zodda and Paul Lane discuss how the China trade deal doesn't solve the Fed's problems. What does the future of SALT look like? Does the buying the dip still work? Warner Bros. Discovery is finally reversing a stupid decision. Why are housing prices not coming down in Massachusetts?
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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(00:42):
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donation today. This is the Financial Exchange with Chuck Zada
(01:06):
and Paul Lane.
Speaker 2 (01:10):
Chuck Paul Tucker with you, kicking off hour two of
the financial exchange. Markets are pretty quiet overall, kind of mixed.
The Dow is off about one hundred and twenty points,
the SMP is down ten, NASDAK up twenty four though,
so strength continuing in uh tech stocks in particular. I mean, look,
most of it right now, concentrated in Vidia AMD on
(01:31):
the back of optimism surrounding a deal they have made
with Saudi Arabia to supply a bunch of chips there.
And so you've got again mixed markets today overall, more
stocks selling off than nine positive territory on a net
basis three hundred and thirty five. More stocks down today
in the S and P five hundred than up. But
(01:52):
when the stocks that are up are in Vidia, AMD,
Google and Tesla, that can offset you know, a whole
lot of weakness that's happening elsewhere where. And that's kind
of the story of what we saw in twenty twenty three,
in the first half of twenty four, so this is
a day that looks reminiscent of, you know, kind of
that eighteen month period that was really good for equity markets,
but not great for the average stock. So we'll have
(02:15):
to see where things go as today develops in equity markets.
On the bond side of things, yields continuing to move
upward a little bit. The ten uere is now at
four point five h five percent. Also yesterday, mortgage rates
holding steady overall at six point nine two percent on
the Mortgage News Daily thirty year fixed rate national average.
(02:37):
So still kind of hanging out right in that six
nine range. No clear, you know, break in either direction
there at the moment. We've got in energy oil prices
moving down just a tick here, down twenty seven cents
a barrel to sixty three forty right now. So you've
got a little bit of a dip after those rows
(02:57):
about ten percent in the last week after the China deal,
you know, started to percolate through. And we've got gold
down sixty one to ten and ounce about two percent
to thirty one eighty six and seventy cents. Top story
of this hour from Bill Dudley, who is the former
president of the Federal Reserve Bank of New York. And
(03:19):
it's titled the China Trade Deal Doesn't solve the Fed's problems,
and it kind of lays out the idea that there
are still a number of things that the FED is
trying to get a handle on, and so most likely
the FED is going to remain paused for an extended
period of time here, just because the data is going
(03:39):
to be pointing in all different directions and it still
is unclear exactly where policy is going to be at
the end of the year. So let's start first with
the data. There's a realistic world, Paul, where over the
next couple months, retail sales data goes into toilet because
people pre bought a bunch of cars before tariffs, and
you know, we're buying this and that and everything, and
(04:01):
now they say, great, we don't need to buy any
of that stuff anymore. And so you say, okay, retail
sales data is weakening. Does that mean that, like the
US economy is struggling. Maybe, but also maybe people feel
a little bit better about their situation now that the
stock market's recovered, and so maybe they start taking trips again,
and so airfares go back up, and so the CPI,
(04:23):
you'd say, okay, like airfares have been down the last
couple months in CPI, that's been a big help. But
auto tariffs are still in place, and so you know
auto you've got auto insurance rates that are starting to
move up again, and so inflation starts moving up as
retail sales are moving down, and the jobs market just
kind of chops around. Like the point I'm getting at
(04:45):
is I don't know that the data is going to
show any coherent picture over the next few months. You
can have parts of the economy that look like they
are in deep doodo, you can have parts of the
economy that look like they're surging overall. On the aggregate,
you might just say, hey, economic growth ends up coming
in one and a half to two percent and there's
no recession, but you're not really sure what's gonna come next.
(05:07):
And if that's the case, the FED might just sit
there and say, yeah, we don't know what this means.
We're just gonna we're gonna wait for more clarity before
we do anything.
Speaker 3 (05:15):
That's exactly what we were talking about the first hour.
It's just there are so many variables that we need
time to see how they're going to play out. So
getting the clarity on inflation, getting a good understanding of
where the economic growth lies and where the labor market
is as well as the conclusion of the ninety day
pause for those reciprocal tariffs. On the policy front, those
(05:35):
three factors all need to be sorted out over a
period of time. And when you look at the CME
futures market, which tries to assess the probability that the
FED would take any sort of action, it very conclusively
says from a percentage standpoint or a probability standpoint that,
just as mentioned in this piece, the idea of ray
cuts really for the moment isn't on the table until
(05:58):
mid September. We're really not going to see any type
of action until then.
Speaker 2 (06:02):
So it will continue to.
Speaker 3 (06:05):
Parse through news stories in different pieces of economic data
that may lead us in one direction or another. But
I think it's important to keep a little bit of
that more intermediate term in mind when looking at the
economy for the next six months or so, four or
five months or so.
Speaker 2 (06:20):
So I think that when when we look at the FED,
the other thing that's going to complicate this, there's a
decent chance that two months from now we get to
July ninth. July ninth is the UH, I don't know
if it's the ninth actually might end up being like
the seventh just because it's the ninety day window from
the original tariff pause on April ninth, So we get
(06:44):
to July ninth, Paul, do you know what's gonna happen
on July ninth?
Speaker 3 (06:48):
Absolutely not.
Speaker 2 (06:48):
I have no idea what's going to happen. Then I
could see a reasonable path where the Trump administration says, hey,
like we're continuing to have good conversations. As such, we
are pausing reciprocal terror for an additional ninety year, one
hundred and eighty days. The ten percent baseline stays in effect.
I could see a reasonable case where they say that
(07:08):
exact thing, but say except there are a couple of
countries where we're not having great conversations and so their
reciprocal tariffs are going into effect. Which countries I have
no idea. I could see a reasonable world in which
they say, you know, after much negotiation, we haven't been
able to get anywhere. We need to put these back
(07:29):
in place because we're not having productive enough conversations. I
could see a world where they say, you know what,
these have been great, We're gonna reduce the baseline tariff
rate from ten to five. I'm not saying any of
this is likely, or that I can price it in
any way, shape or form. But all the things I
just said are very much possible, especially after what we
saw last weekend, which came in much better than anyone
(07:51):
was expecting. As far as the effective tariff rate that
is now applied to Chinese imports, definitely, definitely, So you
go out too much from now we don't know what
that policy is going to be. And this gets at
something that I think is really interesting. So there's a
guy that I follow on social media. His name is
(08:12):
Moulson Heart, and he runs a company called via Heart
and they make all kinds of different consumer products like
kids toys and stuff like the stuff that you would
import from China because that's the cheap place to make it.
And it's again like cheap plastic toys, and there's only
one place that you can get the cheapest you know,
(08:32):
for that in at is China. And so here's what's
interesting on May eighth, and this is on X And
again these are polls that are you know, you can't
verify the results of them, but again you figure the
people that follow someone like this or probably you know,
a representative sample of whatever he said, what have you
(08:53):
done with your orders from China since Liberation Day? And
what he showed at that point was that fifty five
percent of respondents, when tariffs were still at one hundred
and forty five percent said they had paused all shipments
from China, twenty one percent said they had paused approximately
half of their shipments, and twenty four percent said that
(09:13):
they made no change at all. But seventy five percent
of respondents had said we either paused all or around
half of our shipments from China. So yesterday he goes
and asks, hey, what do you think. I'm sorry the
question he asked, I'll phrase that how he did. Now
that tariffs are thirty percent, what are you doing with
(09:37):
your China shipments? And the responses again, like when you
look at the subset that actually answered, because one of
the poll options is just show me the results. Uh,
fifty percent said they're now buying as much as they can,
so okay, great, like back the truck up, like let's
do this again. About twenty percent said we're buying half
(10:01):
as much as what we want now. That could be
because they don't have the cash flow to buy more.
It could be because maybe they think tariffs are gonna
go lower. You don't know. About fifteen percent said we're
still not buying anything.
Speaker 1 (10:14):
Okay.
Speaker 2 (10:14):
That could be because hey, we already bought enough and
we don't need to right now. It could be because
they don't have the cash flow. Who knows this and that,
but we have no idea like the size and scale
and the magnitude of this. The fifty percent that says
they're buying as much as they can, those could all
be thousand dollars orders, just as an example. The percentage
that says, hey, we're buying half as much as what
(10:36):
we want, they could be million dollar orders. Like, we
don't know like the scale of any of this. And
this gets it the problem that the Fed's gonna have,
which is, no one knows what any of this is
gonna look like as trade between those two countries restarts,
and so it's going to be really messy. And if
you don't know what to do, usually the best thing
(10:57):
to do is to do nothing and not try to
overthink it. Yep, let's take a quick break. When we
come back, we will do a little bit of trivia
and then we're talking salt.
Speaker 1 (11:07):
After this, Tara fleevery is in high gear. We've got
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(11:30):
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Speaker 4 (11:39):
The Financial Exchange is a proud partner of the Disabled
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dot Boston. Time for trivia here on the Financial Exchange,
and on this day. In twenty thirteen, Dan Brown released
(12:20):
his fourth book starring Robert Langdon Inferno. Dan Brown's most
successful book starring Langdon was two thousand and Three's the
Da Vinci Code trivia question today? Which actor portrayed Robert
Langdon in the Da Vinci Code? Once again? Which actor
portrayed Robert Langdon in the da Vinci Code. Be the
(12:43):
eighth person today to text us at six one seven
three six two thirteen eighty five with the correct answer,
and you win a brand new Financial Exchange Show tea shirt.
Once again. The eighth correct response to text us at
six one seven three six to two thirteen eighty five
will win that t shirt. See complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (13:04):
Let's talk a little bit about salt. You big fan
of sault, Paul? Are you more of a pepper guy? Pepper?
You're all about Tucker? What about you? Salt? Pepper flake, salt?
Oh yeah, finishing salt? Yeah yeah, I could respect that.
So the salt that we're actually talking about is the
state and local tax deduction, which currently stands at a
ten thousand dollars cap So if you have state and
(13:26):
local taxes that are north of ten thousand, you cannot
deduct them on your taxes. That's part of the twenty
seventeen tax bill that the first Trump administration passed so
you've got the House Ways and Means Committee that is
trying to figure out what to do with this, because
Republicans have a very narrow majority in the House of
(13:47):
Representatives and you have a handful of I believe it's
five reps from New York and New Jersey that are
sitting there saying, look, we need to bring something back
to people in our districts because otherwise they're gonna give
us the boot. And by the way, we might have
you know, eyes on higher office, and you know, if
we want to say that we delivered something to our state, like, hey,
(14:09):
we need to you know, bring something to them. And
so the House Ways and Means Committee has a proposal
that they put out that would raise the salt cap
from ten thousand to thirty thousand, and it would phase
out for individuals making north of two hundred thousand and
for married couples making more than four hundred thousand. You
(14:30):
then have these this group of holdouts. What do we
call them? Can we can? We like name them? It
probably won't matter if they come to an agreement today,
but they thought they were gonna have something yesterday and
they don't yet. So obviously, you know, with Congress only
actually in session for a handful of days each year,
(14:50):
each one kind of counts. So I think that you know,
what we call them may or may not matter. But
the initial ask that I saw from UH, from this
group was for like a sixty four thousand dollars carve
out for individuals and like one hundred and twenty eight
(15:10):
thousand four married couples. It was, it was in that ballpark.
I don't know the exact number because I don't have
it in front of me, but it was significantly different.
Which obviously you sit there and you say, okay, the
obvious middle ground is make it you know, a fifty
thousand dollars deduction that phases or you know, a forty
thousand dollars deduction that phases out after you know, six
(15:31):
hundred thousand dollars in income or something like that. Like,
it shouldn't be that hard to bridge this. The interesting
thing is that they've been going at it on this
specific piece for two days now and haven't gotten there yet.
And you can't pass this legislation without those holdouts getting there.
This is all something that I say simply to indicate
(15:52):
why I do not pay too much attention to exactly
what people are talking about with you know, any congressional
bill before it gets to the point where they're going
to sign it, is because it always goes through all
these things and they're gonna have to figure out some
kind of compromise on this in order to get it done.
The other piece that I do think I'm starting to
(16:13):
pay attention to now that we are getting more details.
In general, there are more and more things that are
being thrown into this that are tax breaks. You've got this,
You've got no tax on tips. The way that they
are trying to pass the no tax on Social Security
is through further complication of the tax code through a
(16:36):
increase in the standard deduction. If you are of Social
Security Aids, you have the tax deductibility of American made cars,
the ensure the interest payments on those. Right. So, like,
you got a lot that's being crammed in here, and
all I can say is there's gonna have to be
(16:57):
a lot of heavy lifting done in order to make
this work with the deficit. Otherwise all we end up
doing is saying, Okay, no one's serious about the deficit.
Speaker 3 (17:05):
Again, it feels that way looking at I like we're
heading even In the summary of this particular piece, they're
stating that the bill so far adds only three point
eight trillion in deficits, less than the four point five
trillion limit lawmakers have given themselves. Uh so already built
(17:26):
in a pretty significant increase to the deficit, which you'd
like from a long term policy perspective to be a
little bit taken a little bit more seriously.
Speaker 2 (17:35):
Yes, the you can't continue to run six percent deficits
without a recession because what that means, based on how
automatic stabilizers such as unemployment insurance kick in once you
have a recession, a six percent deficit in you know,
a baseline scenario with unemployment at four point two percent,
(17:58):
means that your deficit goes to like nine to of
GDP for the year if you have a recession and
to quote the late great you know, Charlie Munger, who
come buy them bonds?
Speaker 3 (18:14):
And if the interest rates have to rise on them
when you have thirty six trillion dollars of debt on
the bellty sheet also, which.
Speaker 2 (18:20):
Means that you have to shoo more bonds, which means
who come buy them bonds? Right? So I think that
again we're we're we're kind of touching the stove here
a little bit. And I don't like to touch the
stove because hint, hint, it's hot and you don't need
(18:41):
to touch it in order to realize that it's hot.
So and by the way, like just as an example
of this, now that we are, you know through the
you know, prime focus being on tariffs in trade, it's
still like a secondary thing, is like there still is
something there. But the tenure treasury over the last week. Now,
a week ago on May seventh, tenure treasury was at
(19:04):
four point twenty six percent. That's the low it hit
for the day. It's at four point five now, it's
up a quarter percent over the last week. That's not
telling you anything good about how this is being interpreted. Now, Look,
you can say there's a million other things that are
playing in like yeah, I understand that there's never any
one thing that you can look at, but I do
worry about the deficit piece becoming a focus in the
(19:26):
coming months. Here, let's take a quick break. When we return,
we've got the Trivia answer after this.
Speaker 5 (19:40):
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Speaker 4 (20:04):
Today's trivia question was which actor poor trade Robert Langdon
in the Da Vinci code back in what two thousand
and three somewhere in that range. That would be Tom Hanks,
Tom Hanks Portrade Robert Langdon. Ashley from Atkinson, New Hampshire
is our winner today, taking home a Financial Exchange Show
(20:25):
t shirt and we play trivia every day here on
the Financial Exchange. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (20:33):
Piece in the Bloomyberg Today Bloomberg Opinion, it's titled Buying
the Dip still works even in this new world. The
subheedter is the power of individual investors on display. I'll
quote from the first paragraph. Retail investors have won again
when trade tensions flared in early April and about six
point six trillion dollars in market value vanished from US
(20:54):
stockson just two business days, the fifth worst two day
drop since the S and P five hundreds creation in
nineteen fifty seven. They didn't panic. Instead, what they did
what they've learned to do over the past fifteen years,
they bought the dip. Six weeks later US stock, the
US stock benchmark has not only recovered but surpassed its
pre tariff levels, delivering a game of about seventeen percent
from the lows to those who kept their nerves. So
(21:16):
a couple things on this that I find interesting or
that I think are worth noting. The first is, yeah,
retail investors absolutely crushed it for the last thirty days.
Absolutely nailed it. They did fantastic. The questions that are
out there are referenced by a couple of different items
(21:39):
in here. The first is this sentence. Instead, they did
what they've learned to do over the past fifteen years.
And that timeframe is really important because there are significant
periods of time in US investing history where if you
bought the dip on a ten or fifteen or twenty
percent dip, it was not a great move for you. Specifically,
(21:59):
look at the tech bubble like that's the most recent one.
You can also pretty much look at like nineteen seventy
one through nineteen eighty two, horrible time for dip buyers. Now,
this is not to say that this is either of
those times, but it is to say this is you
know something that may or may not end up working.
The second piece here that's in reference to that is, hey,
(22:21):
do you win the month and end up losing the year? Maybe?
Like you don't. It's never done. I like to tell
there's a it's it's I don't have like the exact
reference for where it's from, but there's one of my
favorite you call it a fable or a story, whatever
you want. One of my favorite stories from somewhere in
(22:43):
Southeast Asia is there's a guy who just like lives
on a horse farm with his kid, and one day
his horse runs away, and all of the people in
his village are like, oh, that's that's just so bad.
I'm so sorry for you, and he says, you know whatever,
maybe it'll be okay. And the next day the horse
comes back and brings like five other horses with it,
(23:04):
and everyone's like, oh, like this is so great, like
we're so happy for you, like this is wonderful news,
and he goes, nah, maybe, And the next day his
son gets on one of the new horses, you know,
tries to ride it, and the new horse, because it's
a wild horse, throws the sun off and the sun
breaks his leg and all of his friends go, oh,
this is such horrible news, and he goes maybe. And
the day after that there's a huge war that breaks
(23:26):
out and all of like the able bodied young men
go off to war, and his son camp because he's
got a broken leg, and all the neighbors say, oh, like,
what a great thing, and he says, you know, maybe.
And then my point in saying this is, look, you
never know how any of this is going to end.
We said this, you know, all through April when markets
were you know, chopping around and there was a ton
of downward volatility. The thing we were saying all during
(23:49):
that time is like, you don't know exactly how this
is going to end, and we don't know where we're
going to be a couple months from now. So yes,
if all of those dip buyers bought the dip and
off lick quid aided today, they won. If they bought
the dip and markets run higher from here and they
continue holding on, they won. If they bought the dip
(24:12):
and then markets start to roll over and then they
try to buy it again and get heavier, and then like,
you don't know how all of this is going to
play out in the long term, and so my point
is when you're actually investing for the long term, trying
to win every day or month is not going to
(24:34):
be something that's realistic or feasible, and you need to
kind of look at those broader trends in what you're
actually trying to do with your money as opposed to becoming,
you know, a trader, because a trader and an investor
are two different things.
Speaker 3 (24:46):
Paul, Yeah, it was interesting the data here specific to
the amount of retail investor activity during that span of time.
Check where we saw. If you're looking at data from
Charles Schwab, they saw that for their thirty seven million
broke accounts over the span of April, they saw ten
million trades done per day the first two weeks of April.
That was up thirty six percent from a year earlier,
(25:08):
and they also saw two to three times the level
of new accounts being opened in the month of April. Separately,
JP Morgan reported a net purchase of forty billion dollars
of stock in the month of April. There too, so
something that I was not privy to you during that
time that retail investors were extremely active over the period
of April and have picked up activity levels to really
(25:33):
what we haven't seen since really twenty twenty one, where
the memestock frenzy took over and there was a tremendous
amount of retail investor activity, but a significant uptick for
the month of April. It appears as well.
Speaker 2 (25:43):
So if you've gone through the last month or so
and you've been like, hey, I don't really know what
to do and I feel like I'm making bad decisions, Look,
it's always worth talking to someone about a second opinion
simply because this is something I say this a lot. Look,
you spend two thousand hours a year during your working
(26:04):
life working. You do that over you know, thirty forty years,
you're talking sixty thousand, eighty thousand hours. And if you're
savings from that, if you're not you know, comfortable doing
it yourself or you don't have the time to do
it yourself, hey, finding someone that you can trust can
that can help you to figure out what to do
as far as investments and retirement planning and answering those
(26:25):
other questions, it's a big thing for you. So you
can call the Armstrong Advisory Group at eight hundred three
nine three four zero zero one to set up a
time to meet with one of our advisors. We've got
offices all throughout the New England region. That number again
is eight hundred three nine three four zero zero one. Again,
you're going to, over the course of your career spend
(26:47):
sixty to eighty thousand hours working. Make sure that you're actually,
you know, taking care of the money you earn during
those hours by figuring out, Hey, how do I make
it work for me in order to buy a house,
a car, send my kids to college, save for retirement.
Those are questions that we help answer. Again, the phone
number for Armstrong Advisory Group eight hundred three nine three
(27:10):
for zero zero one.
Speaker 1 (27:12):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (27:28):
I got to talk about, well, we got to talk
about Warner Brothers Discovery, because you guys are familiar now
with Max, their streaming service. Yes, yes, so that's what
two years ago they decided, Hey, we're gonna get rid
of the HBO name that used to be attached to
(27:51):
our streaming service. It used to be called HBO Max.
We're going to get rid of the most powerful name
in legacy media in HBO and just rebrand the place Max.
I mean HBO, the the the channel that's associated the
brand that's associated with the Sopranos, Game of Thrones, Band
(28:13):
of Brothers, the Wire. I mean, I can go. You
look at like every list of premium TV that's out there,
and like the best shows ever made, half of them
are HBO shows and Warner Brothers Discovery. After like you know,
all the manipulations that ended up with them owning this
and a bunch of other streaming stuff, they said, no,
we're gonna we're gonna get rid of that name. Two
(28:34):
years ago, We're just gonna call it Max. And we
made fun of them for that. We said that was dumb.
We said, how could you possibly, you know, try to
kill off the most valuable legacy media name out there.
Well two years later, guess what, folks, they're bringing it back. Stuff.
They're bringing it back. Announcing today Warner Brothers Discovery is
(28:55):
going to be renaming their streaming platform HBO Max quote
the powerful growth we've seen in our global streaming services
built around the quality of our programming. Today, we are
bringing back HBO, the brand that represents the highest quality
and media. Oh you think, to further accelerate that growth
(29:15):
in the years ahead.
Speaker 3 (29:18):
What a strange journey it's been.
Speaker 4 (29:21):
Can you just imagine being a fly on the wall
during all of these meetings over the past two years.
Let's drop the HBO and just call it Max. Two
years later, well, let's put back the HBO so it
can go back to be an HBO.
Speaker 2 (29:34):
Matt, Just dummies, How much dummies? How much time, effort
and money have they spent on something that.
Speaker 1 (29:43):
Like?
Speaker 2 (29:43):
Quite honestly, anyone with anyone who knows anything about brand
equity and like branding would have told you, hey, this
is a bad idea. I give them an ounce of
credit for realizing after two years, hey we made a
horrible mistake. Yeah, but our like, who were the people
to begin with that said this was a good idea.
Speaker 3 (30:06):
That's why I was tournament point determined. Is does AT
and T have any hand in this?
Speaker 2 (30:11):
Because they had Warner Brothers Discovery before this was after
the spinoffs got it. This was after and so HBO
Max while while they were under AT and T in
twenty nineteen, that's when this was created. And then as
Warner Brothers Discovery got spun out in everything, they decided
(30:32):
to rebrand it because.
Speaker 3 (30:34):
Got it after that change, okay, you know, it was like, well,
we got to do something where to start fresh.
Speaker 2 (30:38):
Sure, we're our own company now, we got to do
something here and low and behold, they did the wrong
something when the best thing to do would be nothing. So,
uh yeah, it's it.
Speaker 3 (30:51):
Does seem like it's regardless of the name fiasco, it's
been turned around pretty well. Its profitability has increased by
about three billion, according to this nbcpiece for the last
two years, and they've got about twenty two million subscribers
added in the past year. They're trying for one hundred
and fifty million by the end of twenty twenty six.
Speaker 2 (31:10):
I'm gonna go a step further on this within within
the next within the next two years, they're gonna get
rid of the Max HBO and it's just gonna be HBO.
What's this Max doing here? We don't need the Max.
Get rid of the Max.
Speaker 3 (31:28):
It's kind of like how ESPN just re announced their
new streaming app coming out of the ESPN ESPN not ESPN.
Speaker 2 (31:35):
This is what I'm saying, Yes, this is this is
where the zeitgeist is going now. Like for the last
few years, it's been Disney plus, HBO Max, Walmart plus,
OPEC plus, Like everyone's adding the plus. Netflix needs to
come out with a Netflix minus with all the ads
their ads. Next Netflix multiplication, you know, like it's just
(31:59):
ridiculous this point. So yeah, HBO Max is coming back,
which means they got to pay a bunch of money
to rebrand all this stuff and relabel it and you know,
rewatermark all the films and this and that. Like it's
it's just ridiculous. How much money do they spend just
doing this? My goodness, Let's take a quick break. When
(32:20):
we come back, we got stack Roulette. After this, Tara.
Speaker 1 (32:24):
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Speaker 4 (32:45):
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Speaker 2 (33:16):
Paul, what do you got for me? Pace?
Speaker 3 (33:18):
Here from the Boston Globe, Chuck. If so many people
are leaving the state of Massachusetts, why aren't housing costs
going down?
Speaker 2 (33:25):
Peace?
Speaker 3 (33:25):
From the Globe this morning. Here where interesting piece where
details that we have seen domestically, US citizens who are
Massachusetts residents leave the state in pretty significant numbers over
the last several years. We saw fifty five thousand people
leave in twenty twenty two. In twenty twenty three, another
(33:46):
thirty six thousand depart, and then twenty seven thousand and
twenty twenty four. Again, some of that was offset by
we had people from other countries moving into the state
of Massachusetts, but just looking at us residents where they
were living, we saw a lot of people move out
of Massachusetts. And one of the things that happened was
obviously the state millionaire's tax was implemented during that period
(34:06):
of time. Some rumors out there that perhaps that would
drive people to leave. But we still find ourselves with
a house it significant housing shortage where more Healy has
set out a goal to build two hundred twenty two
thousand new homes over the next decade to try and
fix the housing shortage that Massachusetts finds itself in. Where
(34:27):
nationally you've seen actually a slight decline on single family
home prices, but in Massachusetts we saw an eleven percent
increase on single family homes and just interesting data that
we see here. Certainly on the building front, we're nowhere
near reaching that target two hundred and twenty two thousand,
there was about thirteen thousand of permits in twenty twenty three.
(34:49):
We're just nowhere near the pace. Massachusetts still in the
Greater Boston area has the lowest rental vacancy of all
the major cities. It just continues to be an issue
and I'm not here to sit and say that I
have a fix for it, but it is just fascinating
how significant of a shortage there is. And the other
thing that's mentioned this piece is this idea that there
(35:11):
are a lot of new households being formed millennials sort
of transitioning from living with their parents to developing their own.
Speaker 2 (35:18):
Faith millennials anymore, some of the gen zers are stepping
up to the plant also, and you have a significant
part of the baby boomer generation which are going to
be theoretically occupying these suburban homes where the bedrooms won't
be entirely filled, but they won't necessarily be moving out
of those houses, which just creates potentially a further shorting
(35:41):
shortage on the housing front. I think Massachusetts can best
be summed up by former Yankees, Great Yogi Berra. Nobody
goes there anymore. It's too crowded. Yeah, you know, that's
that's kind of what it feels like. Yep. But one
thing this Boston Gold piece does make a good point
on this. You know, people say, well, look like if
(36:02):
people move out, then it won't be as crowded, and
you know the price of housing will go down. The
problem that you run into is We've yet to really
see any economy in the world succeed with a dwindling population,
because if you are losing population, especially if younger people
are moving out, you are losing future workers. And talk
(36:26):
to anyone who has even within Massachusetts, like talk to
some of the mill towns that were hollowed out over
the last fifty sixty years and what you've seen there
and how those communities have had to rebuild and kind
of reinvent themselves. It's not good when you have a
dwindling population because it usually means a lot of bad
things are going on. I'm not saying that we all
(36:48):
need to have eight kids, because any of you have
listened to the show repeatedly you know that. I don't really,
you know, think forcing people to have kids. I mean,
it's basically the worst thing ever. Like it's it's not
having kids, but like forcing people to have kids is
about as dehumanizing a thing as you can as dehumanizing
a thing as you can do. And so ultimately there's
a healthy balance that you need to have here. The
(37:10):
problem is we just have not built enough housing. And
some of that space related, some of that's regulation related. Uh,
some of it is we just as much as we
talk about wanting more housing, we don't actually want it
in our backyard. And we got to figure out how
to deal with that. And as Paul said, there's there's
no great answers to this, but uh, that's the that's
the deal. H New York Times piece, Your next Airbnb
(37:32):
may include room service and Tamali making. Hey uh so
in I'll quote here. In an announcement yesterday, uh Brian Chesky,
Airbnb's chief executive, said the company will offer the kinds
of services typically found at hotels, including room service, spot treatments,
and personal training, all bookable on Airbnb's redesigned app. Other
(37:53):
professional chefs salon treatments like hair, nails and makeup. So
they want to cut of this. So basically you agree, oh,
you know, beyond their app, and they get a cut
for you know, the booking. I'm sure professional chefs I
like that. I mean, it seems to be a fairly
low risk thing for them. It doesn't seem like there's
probably like a ton of overhead or a ton of expense.
(38:13):
How well it works, I don't know, but I don't know.
Kind of interesting to me. We're gonna take a quick
break for the entire rest of the day. I hope
you enjoy that rest of the day and we'll have
an even better show for you tomorrow, hopefully,
The Financial Exchange is produced by Money Matters Radio and
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(01:06):
and Paul Lane.
Speaker 2 (01:10):
Chuck Paul Tucker with you, kicking off hour two of
the financial exchange. Markets are pretty quiet overall, kind of mixed.
The Dow is off about one hundred and twenty points,
the SMP is down ten, NASDAK up twenty four though,
so strength continuing in uh tech stocks in particular. I mean, look,
most of it right now, concentrated in Vidia AMD on
(01:31):
the back of optimism surrounding a deal they have made
with Saudi Arabia to supply a bunch of chips there.
And so you've got again mixed markets today overall, more
stocks selling off than nine positive territory on a net
basis three hundred and thirty five. More stocks down today
in the S and P five hundred than up. But
(01:52):
when the stocks that are up are in Vidia, AMD,
Google and Tesla, that can offset you know, a whole
lot of weakness that's happening elsewhere where. And that's kind
of the story of what we saw in twenty twenty three,
in the first half of twenty four, so this is
a day that looks reminiscent of, you know, kind of
that eighteen month period that was really good for equity markets,
but not great for the average stock. So we'll have
(02:15):
to see where things go as today develops in equity markets.
On the bond side of things, yields continuing to move
upward a little bit. The ten uere is now at
four point five h five percent. Also yesterday, mortgage rates
holding steady overall at six point nine two percent on
the Mortgage News Daily thirty year fixed rate national average.
(02:37):
So still kind of hanging out right in that six
nine range. No clear, you know, break in either direction
there at the moment. We've got in energy oil prices
moving down just a tick here, down twenty seven cents
a barrel to sixty three forty right now. So you've
got a little bit of a dip after those rows
(02:57):
about ten percent in the last week after the China deal,
you know, started to percolate through. And we've got gold
down sixty one to ten and ounce about two percent
to thirty one eighty six and seventy cents. Top story
of this hour from Bill Dudley, who is the former
president of the Federal Reserve Bank of New York. And
(03:19):
it's titled the China Trade Deal Doesn't solve the Fed's problems,
and it kind of lays out the idea that there
are still a number of things that the FED is
trying to get a handle on, and so most likely
the FED is going to remain paused for an extended
period of time here, just because the data is going
(03:39):
to be pointing in all different directions and it still
is unclear exactly where policy is going to be at
the end of the year. So let's start first with
the data. There's a realistic world, Paul, where over the
next couple months, retail sales data goes into toilet because
people pre bought a bunch of cars before tariffs, and
you know, we're buying this and that and everything, and
(04:01):
now they say, great, we don't need to buy any
of that stuff anymore. And so you say, okay, retail
sales data is weakening. Does that mean that, like the
US economy is struggling. Maybe, but also maybe people feel
a little bit better about their situation now that the
stock market's recovered, and so maybe they start taking trips again,
and so airfares go back up, and so the CPI,
(04:23):
you'd say, okay, like airfares have been down the last
couple months in CPI, that's been a big help. But
auto tariffs are still in place, and so you know
auto you've got auto insurance rates that are starting to
move up again, and so inflation starts moving up as
retail sales are moving down, and the jobs market just
kind of chops around. Like the point I'm getting at
(04:45):
is I don't know that the data is going to
show any coherent picture over the next few months. You
can have parts of the economy that look like they
are in deep doodo, you can have parts of the
economy that look like they're surging overall. On the aggregate,
you might just say, hey, economic growth ends up coming
in one and a half to two percent and there's
no recession, but you're not really sure what's gonna come next.
(05:07):
And if that's the case, the FED might just sit
there and say, yeah, we don't know what this means.
We're just gonna we're gonna wait for more clarity before
we do anything.
Speaker 3 (05:15):
That's exactly what we were talking about the first hour.
It's just there are so many variables that we need
time to see how they're going to play out. So
getting the clarity on inflation, getting a good understanding of
where the economic growth lies and where the labor market
is as well as the conclusion of the ninety day
pause for those reciprocal tariffs. On the policy front, those
(05:35):
three factors all need to be sorted out over a
period of time. And when you look at the CME
futures market, which tries to assess the probability that the
FED would take any sort of action, it very conclusively
says from a percentage standpoint or a probability standpoint that,
just as mentioned in this piece, the idea of ray
cuts really for the moment isn't on the table until
(05:58):
mid September. We're really not going to see any type
of action until then.
Speaker 2 (06:02):
So it will continue to.
Speaker 3 (06:05):
Parse through news stories in different pieces of economic data
that may lead us in one direction or another. But
I think it's important to keep a little bit of
that more intermediate term in mind when looking at the
economy for the next six months or so, four or
five months or so.
Speaker 2 (06:20):
So I think that when when we look at the FED,
the other thing that's going to complicate this, there's a
decent chance that two months from now we get to
July ninth. July ninth is the UH, I don't know
if it's the ninth actually might end up being like
the seventh just because it's the ninety day window from
the original tariff pause on April ninth, So we get
(06:44):
to July ninth, Paul, do you know what's gonna happen
on July ninth?
Speaker 3 (06:48):
Absolutely not.
Speaker 2 (06:48):
I have no idea what's going to happen. Then I
could see a reasonable path where the Trump administration says, hey,
like we're continuing to have good conversations. As such, we
are pausing reciprocal terror for an additional ninety year, one
hundred and eighty days. The ten percent baseline stays in effect.
I could see a reasonable case where they say that
(07:08):
exact thing, but say except there are a couple of
countries where we're not having great conversations and so their
reciprocal tariffs are going into effect. Which countries I have
no idea. I could see a reasonable world in which
they say, you know, after much negotiation, we haven't been
able to get anywhere. We need to put these back
(07:29):
in place because we're not having productive enough conversations. I
could see a world where they say, you know what,
these have been great, We're gonna reduce the baseline tariff
rate from ten to five. I'm not saying any of
this is likely, or that I can price it in
any way, shape or form. But all the things I
just said are very much possible, especially after what we
saw last weekend, which came in much better than anyone
(07:51):
was expecting. As far as the effective tariff rate that
is now applied to Chinese imports, definitely, definitely, So you
go out too much from now we don't know what
that policy is going to be. And this gets at
something that I think is really interesting. So there's a
guy that I follow on social media. His name is
(08:12):
Moulson Heart, and he runs a company called via Heart
and they make all kinds of different consumer products like
kids toys and stuff like the stuff that you would
import from China because that's the cheap place to make it.
And it's again like cheap plastic toys, and there's only
one place that you can get the cheapest you know,
(08:32):
for that in at is China. And so here's what's
interesting on May eighth, and this is on X And
again these are polls that are you know, you can't
verify the results of them, but again you figure the
people that follow someone like this or probably you know,
a representative sample of whatever he said, what have you
(08:53):
done with your orders from China since Liberation Day? And
what he showed at that point was that fifty five
percent of respondents, when tariffs were still at one hundred
and forty five percent said they had paused all shipments
from China, twenty one percent said they had paused approximately
half of their shipments, and twenty four percent said that
(09:13):
they made no change at all. But seventy five percent
of respondents had said we either paused all or around
half of our shipments from China. So yesterday he goes
and asks, hey, what do you think. I'm sorry the
question he asked, I'll phrase that how he did. Now
that tariffs are thirty percent, what are you doing with
(09:37):
your China shipments? And the responses again, like when you
look at the subset that actually answered, because one of
the poll options is just show me the results. Uh,
fifty percent said they're now buying as much as they can,
so okay, great, like back the truck up, like let's
do this again. About twenty percent said we're buying half
(10:01):
as much as what we want now. That could be
because they don't have the cash flow to buy more.
It could be because maybe they think tariffs are gonna
go lower. You don't know. About fifteen percent said we're
still not buying anything.
Speaker 1 (10:14):
Okay.
Speaker 2 (10:14):
That could be because hey, we already bought enough and
we don't need to right now. It could be because
they don't have the cash flow. Who knows this and that,
but we have no idea like the size and scale
and the magnitude of this. The fifty percent that says
they're buying as much as they can, those could all
be thousand dollars orders, just as an example. The percentage
that says, hey, we're buying half as much as what
(10:36):
we want, they could be million dollar orders. Like, we
don't know like the scale of any of this. And
this gets it the problem that the Fed's gonna have,
which is, no one knows what any of this is
gonna look like as trade between those two countries restarts,
and so it's going to be really messy. And if
you don't know what to do, usually the best thing
(10:57):
to do is to do nothing and not try to
overthink it. Yep, let's take a quick break. When we
come back, we will do a little bit of trivia
and then we're talking salt.
Speaker 1 (11:07):
After this, Tara fleevery is in high gear. We've got
the latest on what might be next and how long
it might last. Only here on the Financial Exchange Radio Network.
If you missed any of today's show, catch up whenever
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(11:30):
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Speaker 4 (11:39):
The Financial Exchange is a proud partner of the Disabled
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dot Boston. Time for trivia here on the Financial Exchange,
and on this day. In twenty thirteen, Dan Brown released
(12:20):
his fourth book starring Robert Langdon Inferno. Dan Brown's most
successful book starring Langdon was two thousand and Three's the
Da Vinci Code trivia question today? Which actor portrayed Robert
Langdon in the Da Vinci Code? Once again? Which actor
portrayed Robert Langdon in the da Vinci Code. Be the
(12:43):
eighth person today to text us at six one seven
three six two thirteen eighty five with the correct answer,
and you win a brand new Financial Exchange Show tea shirt.
Once again. The eighth correct response to text us at
six one seven three six to two thirteen eighty five
will win that t shirt. See complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (13:04):
Let's talk a little bit about salt. You big fan
of sault, Paul? Are you more of a pepper guy? Pepper?
You're all about Tucker? What about you? Salt? Pepper flake, salt?
Oh yeah, finishing salt? Yeah yeah, I could respect that.
So the salt that we're actually talking about is the
state and local tax deduction, which currently stands at a
ten thousand dollars cap So if you have state and
(13:26):
local taxes that are north of ten thousand, you cannot
deduct them on your taxes. That's part of the twenty
seventeen tax bill that the first Trump administration passed so
you've got the House Ways and Means Committee that is
trying to figure out what to do with this, because
Republicans have a very narrow majority in the House of
(13:47):
Representatives and you have a handful of I believe it's
five reps from New York and New Jersey that are
sitting there saying, look, we need to bring something back
to people in our districts because otherwise they're gonna give
us the boot. And by the way, we might have
you know, eyes on higher office, and you know, if
we want to say that we delivered something to our state, like, hey,
(14:09):
we need to you know, bring something to them. And
so the House Ways and Means Committee has a proposal
that they put out that would raise the salt cap
from ten thousand to thirty thousand, and it would phase
out for individuals making north of two hundred thousand and
for married couples making more than four hundred thousand. You
(14:30):
then have these this group of holdouts. What do we
call them? Can we can? We like name them? It
probably won't matter if they come to an agreement today,
but they thought they were gonna have something yesterday and
they don't yet. So obviously, you know, with Congress only
actually in session for a handful of days each year,
(14:50):
each one kind of counts. So I think that you know,
what we call them may or may not matter. But
the initial ask that I saw from UH, from this
group was for like a sixty four thousand dollars carve
out for individuals and like one hundred and twenty eight
(15:10):
thousand four married couples. It was, it was in that ballpark.
I don't know the exact number because I don't have
it in front of me, but it was significantly different.
Which obviously you sit there and you say, okay, the
obvious middle ground is make it you know, a fifty
thousand dollars deduction that phases or you know, a forty
thousand dollars deduction that phases out after you know, six
(15:31):
hundred thousand dollars in income or something like that. Like,
it shouldn't be that hard to bridge this. The interesting
thing is that they've been going at it on this
specific piece for two days now and haven't gotten there yet.
And you can't pass this legislation without those holdouts getting there.
This is all something that I say simply to indicate
(15:52):
why I do not pay too much attention to exactly
what people are talking about with you know, any congressional
bill before it gets to the point where they're going
to sign it, is because it always goes through all
these things and they're gonna have to figure out some
kind of compromise on this in order to get it done.
The other piece that I do think I'm starting to
(16:13):
pay attention to now that we are getting more details.
In general, there are more and more things that are
being thrown into this that are tax breaks. You've got this,
You've got no tax on tips. The way that they
are trying to pass the no tax on Social Security
is through further complication of the tax code through a
(16:36):
increase in the standard deduction. If you are of Social
Security Aids, you have the tax deductibility of American made cars,
the ensure the interest payments on those. Right. So, like,
you got a lot that's being crammed in here, and
all I can say is there's gonna have to be
(16:57):
a lot of heavy lifting done in order to make
this work with the deficit. Otherwise all we end up
doing is saying, Okay, no one's serious about the deficit.
Speaker 3 (17:05):
Again, it feels that way looking at I like we're
heading even In the summary of this particular piece, they're
stating that the bill so far adds only three point
eight trillion in deficits, less than the four point five
trillion limit lawmakers have given themselves. Uh so already built
(17:26):
in a pretty significant increase to the deficit, which you'd
like from a long term policy perspective to be a
little bit taken a little bit more seriously.
Speaker 2 (17:35):
Yes, the you can't continue to run six percent deficits
without a recession because what that means, based on how
automatic stabilizers such as unemployment insurance kick in once you
have a recession, a six percent deficit in you know,
a baseline scenario with unemployment at four point two percent,
(17:58):
means that your deficit goes to like nine to of
GDP for the year if you have a recession and
to quote the late great you know, Charlie Munger, who
come buy them bonds?
Speaker 3 (18:14):
And if the interest rates have to rise on them
when you have thirty six trillion dollars of debt on
the bellty sheet also, which.
Speaker 2 (18:20):
Means that you have to shoo more bonds, which means
who come buy them bonds? Right? So I think that
again we're we're we're kind of touching the stove here
a little bit. And I don't like to touch the
stove because hint, hint, it's hot and you don't need
(18:41):
to touch it in order to realize that it's hot.
So and by the way, like just as an example
of this, now that we are, you know through the
you know, prime focus being on tariffs in trade, it's
still like a secondary thing, is like there still is
something there. But the tenure treasury over the last week. Now,
a week ago on May seventh, tenure treasury was at
(19:04):
four point twenty six percent. That's the low it hit
for the day. It's at four point five now, it's
up a quarter percent over the last week. That's not
telling you anything good about how this is being interpreted. Now, Look,
you can say there's a million other things that are
playing in like yeah, I understand that there's never any
one thing that you can look at, but I do
worry about the deficit piece becoming a focus in the
(19:26):
coming months. Here, let's take a quick break. When we return,
we've got the Trivia answer after this.
Speaker 5 (19:40):
Bringing the latest financial news straight to your radio. Every day,
it's the Financial Exchange on the Financial Exchange Radio Network.
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Speaker 4 (20:04):
Today's trivia question was which actor poor trade Robert Langdon
in the Da Vinci code back in what two thousand
and three somewhere in that range. That would be Tom Hanks,
Tom Hanks Portrade Robert Langdon. Ashley from Atkinson, New Hampshire
is our winner today, taking home a Financial Exchange Show
(20:25):
t shirt and we play trivia every day here on
the Financial Exchange. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (20:33):
Piece in the Bloomyberg Today Bloomberg Opinion, it's titled Buying
the Dip still works even in this new world. The
subheedter is the power of individual investors on display. I'll
quote from the first paragraph. Retail investors have won again
when trade tensions flared in early April and about six
point six trillion dollars in market value vanished from US
(20:54):
stockson just two business days, the fifth worst two day
drop since the S and P five hundreds creation in
nineteen fifty seven. They didn't panic. Instead, what they did
what they've learned to do over the past fifteen years,
they bought the dip. Six weeks later US stock, the
US stock benchmark has not only recovered but surpassed its
pre tariff levels, delivering a game of about seventeen percent
from the lows to those who kept their nerves. So
(21:16):
a couple things on this that I find interesting or
that I think are worth noting. The first is, yeah,
retail investors absolutely crushed it for the last thirty days.
Absolutely nailed it. They did fantastic. The questions that are
out there are referenced by a couple of different items
(21:39):
in here. The first is this sentence. Instead, they did
what they've learned to do over the past fifteen years.
And that timeframe is really important because there are significant
periods of time in US investing history where if you
bought the dip on a ten or fifteen or twenty
percent dip, it was not a great move for you. Specifically,
(21:59):
look at the tech bubble like that's the most recent one.
You can also pretty much look at like nineteen seventy
one through nineteen eighty two, horrible time for dip buyers. Now,
this is not to say that this is either of
those times, but it is to say this is you
know something that may or may not end up working.
The second piece here that's in reference to that is, hey,
(22:21):
do you win the month and end up losing the year? Maybe?
Like you don't. It's never done. I like to tell
there's a it's it's I don't have like the exact
reference for where it's from, but there's one of my
favorite you call it a fable or a story, whatever
you want. One of my favorite stories from somewhere in
(22:43):
Southeast Asia is there's a guy who just like lives
on a horse farm with his kid, and one day
his horse runs away, and all of the people in
his village are like, oh, that's that's just so bad.
I'm so sorry for you, and he says, you know whatever,
maybe it'll be okay. And the next day the horse
comes back and brings like five other horses with it,
(23:04):
and everyone's like, oh, like this is so great, like
we're so happy for you, like this is wonderful news,
and he goes, nah, maybe, And the next day his
son gets on one of the new horses, you know,
tries to ride it, and the new horse, because it's
a wild horse, throws the sun off and the sun
breaks his leg and all of his friends go, oh,
this is such horrible news, and he goes maybe. And
the day after that there's a huge war that breaks
(23:26):
out and all of like the able bodied young men
go off to war, and his son camp because he's
got a broken leg, and all the neighbors say, oh, like,
what a great thing, and he says, you know, maybe.
And then my point in saying this is, look, you
never know how any of this is going to end.
We said this, you know, all through April when markets
were you know, chopping around and there was a ton
of downward volatility. The thing we were saying all during
(23:49):
that time is like, you don't know exactly how this
is going to end, and we don't know where we're
going to be a couple months from now. So yes,
if all of those dip buyers bought the dip and
off lick quid aided today, they won. If they bought
the dip and markets run higher from here and they
continue holding on, they won. If they bought the dip
(24:12):
and then markets start to roll over and then they
try to buy it again and get heavier, and then like,
you don't know how all of this is going to
play out in the long term, and so my point
is when you're actually investing for the long term, trying
to win every day or month is not going to
(24:34):
be something that's realistic or feasible, and you need to
kind of look at those broader trends in what you're
actually trying to do with your money as opposed to becoming,
you know, a trader, because a trader and an investor
are two different things.
Speaker 3 (24:46):
Paul, Yeah, it was interesting the data here specific to
the amount of retail investor activity during that span of time.
Check where we saw. If you're looking at data from
Charles Schwab, they saw that for their thirty seven million
broke accounts over the span of April, they saw ten
million trades done per day the first two weeks of April.
That was up thirty six percent from a year earlier,
(25:08):
and they also saw two to three times the level
of new accounts being opened in the month of April. Separately,
JP Morgan reported a net purchase of forty billion dollars
of stock in the month of April. There too, so
something that I was not privy to you during that
time that retail investors were extremely active over the period
of April and have picked up activity levels to really
(25:33):
what we haven't seen since really twenty twenty one, where
the memestock frenzy took over and there was a tremendous
amount of retail investor activity, but a significant uptick for
the month of April. It appears as well.
Speaker 2 (25:43):
So if you've gone through the last month or so
and you've been like, hey, I don't really know what
to do and I feel like I'm making bad decisions, Look,
it's always worth talking to someone about a second opinion
simply because this is something I say this a lot. Look,
you spend two thousand hours a year during your working
(26:04):
life working. You do that over you know, thirty forty years,
you're talking sixty thousand, eighty thousand hours. And if you're
savings from that, if you're not you know, comfortable doing
it yourself or you don't have the time to do
it yourself, hey, finding someone that you can trust can
that can help you to figure out what to do
as far as investments and retirement planning and answering those
(26:25):
other questions, it's a big thing for you. So you
can call the Armstrong Advisory Group at eight hundred three
nine three four zero zero one to set up a
time to meet with one of our advisors. We've got
offices all throughout the New England region. That number again
is eight hundred three nine three four zero zero one. Again,
you're going to, over the course of your career spend
(26:47):
sixty to eighty thousand hours working. Make sure that you're actually,
you know, taking care of the money you earn during
those hours by figuring out, Hey, how do I make
it work for me in order to buy a house,
a car, send my kids to college, save for retirement.
Those are questions that we help answer. Again, the phone
number for Armstrong Advisory Group eight hundred three nine three
(27:10):
for zero zero one.
Speaker 1 (27:12):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (27:28):
I got to talk about, well, we got to talk
about Warner Brothers Discovery, because you guys are familiar now
with Max, their streaming service. Yes, yes, so that's what
two years ago they decided, Hey, we're gonna get rid
of the HBO name that used to be attached to
(27:51):
our streaming service. It used to be called HBO Max.
We're going to get rid of the most powerful name
in legacy media in HBO and just rebrand the place Max.
I mean HBO, the the the channel that's associated the
brand that's associated with the Sopranos, Game of Thrones, Band
(28:13):
of Brothers, the Wire. I mean, I can go. You
look at like every list of premium TV that's out there,
and like the best shows ever made, half of them
are HBO shows and Warner Brothers Discovery. After like you know,
all the manipulations that ended up with them owning this
and a bunch of other streaming stuff, they said, no,
we're gonna we're gonna get rid of that name. Two
(28:34):
years ago, We're just gonna call it Max. And we
made fun of them for that. We said that was dumb.
We said, how could you possibly, you know, try to
kill off the most valuable legacy media name out there.
Well two years later, guess what, folks, they're bringing it back. Stuff.
They're bringing it back. Announcing today Warner Brothers Discovery is
(28:55):
going to be renaming their streaming platform HBO Max quote
the powerful growth we've seen in our global streaming services
built around the quality of our programming. Today, we are
bringing back HBO, the brand that represents the highest quality
and media. Oh you think, to further accelerate that growth
(29:15):
in the years ahead.
Speaker 3 (29:18):
What a strange journey it's been.
Speaker 4 (29:21):
Can you just imagine being a fly on the wall
during all of these meetings over the past two years.
Let's drop the HBO and just call it Max. Two
years later, well, let's put back the HBO so it
can go back to be an HBO.
Speaker 2 (29:34):
Matt, Just dummies, How much dummies? How much time, effort
and money have they spent on something that.
Speaker 1 (29:43):
Like?
Speaker 2 (29:43):
Quite honestly, anyone with anyone who knows anything about brand
equity and like branding would have told you, hey, this
is a bad idea. I give them an ounce of
credit for realizing after two years, hey we made a
horrible mistake. Yeah, but our like, who were the people
to begin with that said this was a good idea.
Speaker 3 (30:06):
That's why I was tournament point determined. Is does AT
and T have any hand in this?
Speaker 2 (30:11):
Because they had Warner Brothers Discovery before this was after
the spinoffs got it. This was after and so HBO
Max while while they were under AT and T in
twenty nineteen, that's when this was created. And then as
Warner Brothers Discovery got spun out in everything, they decided
(30:32):
to rebrand it because.
Speaker 3 (30:34):
Got it after that change, okay, you know, it was like, well,
we got to do something where to start fresh.
Speaker 2 (30:38):
Sure, we're our own company now, we got to do
something here and low and behold, they did the wrong
something when the best thing to do would be nothing. So,
uh yeah, it's it.
Speaker 3 (30:51):
Does seem like it's regardless of the name fiasco, it's
been turned around pretty well. Its profitability has increased by
about three billion, according to this nbcpiece for the last
two years, and they've got about twenty two million subscribers
added in the past year. They're trying for one hundred
and fifty million by the end of twenty twenty six.
Speaker 2 (31:10):
I'm gonna go a step further on this within within
the next within the next two years, they're gonna get
rid of the Max HBO and it's just gonna be HBO.
What's this Max doing here? We don't need the Max.
Get rid of the Max.
Speaker 3 (31:28):
It's kind of like how ESPN just re announced their
new streaming app coming out of the ESPN ESPN not ESPN.
Speaker 2 (31:35):
This is what I'm saying, Yes, this is this is
where the zeitgeist is going now. Like for the last
few years, it's been Disney plus, HBO Max, Walmart plus,
OPEC plus, Like everyone's adding the plus. Netflix needs to
come out with a Netflix minus with all the ads
their ads. Next Netflix multiplication, you know, like it's just
(31:59):
ridiculous this point. So yeah, HBO Max is coming back,
which means they got to pay a bunch of money
to rebrand all this stuff and relabel it and you know,
rewatermark all the films and this and that. Like it's
it's just ridiculous. How much money do they spend just
doing this? My goodness, Let's take a quick break. When
(32:20):
we come back, we got stack Roulette. After this, Tara.
Speaker 1 (32:24):
Spears continue to grip markets. Get the latest straight from
Wall Street right here on the Financial Exchange Radio Network.
The Financial Exchange Show podcast drops every day on Apple, Spotify,
and iHeartRadio. Hit that subscribe button then leave us a
five star review. You're listening to the Financial Exchange Radio Network.
Speaker 4 (32:45):
This segment of the Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
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(33:06):
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USBI dot com.
Speaker 2 (33:16):
Paul, what do you got for me? Pace?
Speaker 3 (33:18):
Here from the Boston Globe, Chuck. If so many people
are leaving the state of Massachusetts, why aren't housing costs
going down?
Speaker 2 (33:25):
Peace?
Speaker 3 (33:25):
From the Globe this morning. Here where interesting piece where
details that we have seen domestically, US citizens who are
Massachusetts residents leave the state in pretty significant numbers over
the last several years. We saw fifty five thousand people
leave in twenty twenty two. In twenty twenty three, another
(33:46):
thirty six thousand depart, and then twenty seven thousand and
twenty twenty four. Again, some of that was offset by
we had people from other countries moving into the state
of Massachusetts, but just looking at us residents where they
were living, we saw a lot of people move out
of Massachusetts. And one of the things that happened was
obviously the state millionaire's tax was implemented during that period
(34:06):
of time. Some rumors out there that perhaps that would
drive people to leave. But we still find ourselves with
a house it significant housing shortage where more Healy has
set out a goal to build two hundred twenty two
thousand new homes over the next decade to try and
fix the housing shortage that Massachusetts finds itself in. Where
(34:27):
nationally you've seen actually a slight decline on single family
home prices, but in Massachusetts we saw an eleven percent
increase on single family homes and just interesting data that
we see here. Certainly on the building front, we're nowhere
near reaching that target two hundred and twenty two thousand,
there was about thirteen thousand of permits in twenty twenty three.
(34:49):
We're just nowhere near the pace. Massachusetts still in the
Greater Boston area has the lowest rental vacancy of all
the major cities. It just continues to be an issue
and I'm not here to sit and say that I
have a fix for it, but it is just fascinating
how significant of a shortage there is. And the other
thing that's mentioned this piece is this idea that there
(35:11):
are a lot of new households being formed millennials sort
of transitioning from living with their parents to developing their own.
Speaker 2 (35:18):
Faith millennials anymore, some of the gen zers are stepping
up to the plant also, and you have a significant
part of the baby boomer generation which are going to
be theoretically occupying these suburban homes where the bedrooms won't
be entirely filled, but they won't necessarily be moving out
of those houses, which just creates potentially a further shorting
(35:41):
shortage on the housing front. I think Massachusetts can best
be summed up by former Yankees, Great Yogi Berra. Nobody
goes there anymore. It's too crowded. Yeah, you know, that's
that's kind of what it feels like. Yep. But one
thing this Boston Gold piece does make a good point
on this. You know, people say, well, look like if
(36:02):
people move out, then it won't be as crowded, and
you know the price of housing will go down. The
problem that you run into is We've yet to really
see any economy in the world succeed with a dwindling population,
because if you are losing population, especially if younger people
are moving out, you are losing future workers. And talk
(36:26):
to anyone who has even within Massachusetts, like talk to
some of the mill towns that were hollowed out over
the last fifty sixty years and what you've seen there
and how those communities have had to rebuild and kind
of reinvent themselves. It's not good when you have a
dwindling population because it usually means a lot of bad
things are going on. I'm not saying that we all
(36:48):
need to have eight kids, because any of you have
listened to the show repeatedly you know that. I don't really,
you know, think forcing people to have kids. I mean,
it's basically the worst thing ever. Like it's it's not
having kids, but like forcing people to have kids is
about as dehumanizing a thing as you can as dehumanizing
a thing as you can do. And so ultimately there's
a healthy balance that you need to have here. The
(37:10):
problem is we just have not built enough housing. And
some of that space related, some of that's regulation related. Uh,
some of it is we just as much as we
talk about wanting more housing, we don't actually want it
in our backyard. And we got to figure out how
to deal with that. And as Paul said, there's there's
no great answers to this, but uh, that's the that's
the deal. H New York Times piece, Your next Airbnb
(37:32):
may include room service and Tamali making. Hey uh so
in I'll quote here. In an announcement yesterday, uh Brian Chesky,
Airbnb's chief executive, said the company will offer the kinds
of services typically found at hotels, including room service, spot treatments,
and personal training, all bookable on Airbnb's redesigned app. Other
(37:53):
professional chefs salon treatments like hair, nails and makeup. So
they want to cut of this. So basically you agree, oh,
you know, beyond their app, and they get a cut
for you know, the booking. I'm sure professional chefs I
like that. I mean, it seems to be a fairly
low risk thing for them. It doesn't seem like there's
probably like a ton of overhead or a ton of expense.
(38:13):
How well it works, I don't know, but I don't know.
Kind of interesting to me. We're gonna take a quick
break for the entire rest of the day. I hope
you enjoy that rest of the day and we'll have
an even better show for you tomorrow, hopefully,
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