Let's Talk Money

September 14th, 2023

Episode Transcript

(00:17):
Hello and welcome on this Sunday morning. Yesterday was the first day of fall.
Today is perfect weather. If youbought one of those pretty sweaters or
you know a nice little light jacket, Today's today you get to wear it
because it's a little nippy out there, and I'm not sure we're gonna see

(00:38):
much sunshine. But I'm telling youlast week was absolutely gorgeous. Most of
the days. One was better thanthe other. But listen, we know
what's coming, so enjoy these days, sun or not. We've had a
long, rainy summer and now hopefullywe'll have a nice, decent fall.

(00:58):
Folks, Thanks for tuning in onthis Sunday morning, Sunday, September twenty
fourth. I do have a lotof very capable colleagues to do the show,
but I'm doing the show with youlive this morning. I'm Stephen Bouchet,
certified financial planner. I've been yourhost for over twenty eight years.
I love doing the show. Ilove getting you pointed in the right direction.

(01:22):
We had a dynamite show yesterday,a lot of good questions, so
let's keep it going. If youhave any questions today, the phone lines
are open one eight hundred talk wg Y one eight hundred eight two five
five nine four nine. Any questionswhatsoever, folks. One eight hundred eight

(01:42):
two five fifty nine forty nine.I would love to get you pointed in
the right direction. I'd like tosay, you get one opportunity to retire.
You want to be prepared, absolutelywant to be prepared. We talked,
you know, every Wednesday talk withDoug Goudy, and this week we
talked about our this great country ofours. We just went in the whole

(02:07):
in debt thirty three trillion dollars.And you heard me right, thirty three
trillion dollars. Our national debt hitthirty three trillion dollars for the first time.
It's crazy. How do we Howdoes that happen? Well, I'll
tell you how that happens. Thatthat happens because we spend more than we

(02:29):
bring in. Just like a lotof you listening. If you make fifty
thousand dollars a year, and youspend fifty five your barrom five on on
credit cards or going into your homeequity line of credit, well you're spending
more than you're bringing in. Sonow you're piling up debt and that's exactly

(02:50):
exactly what happens in this great countryof ours. So we're thirty three trillion
dollars in debt, and that's that'snot good. Not only that we're still
you know, believe it or not, we just got over the last government
shutdown, and here we are talkingabout another government shutdown. It's it's it's
it's really crazy. So the debt, you know, basically it's it's it's

(03:16):
money borrowed by by the federal governmentto cover operating expenses. And on Monday,
as I said, according to theTreasury Department, over thirty three trillion
dollars fifty percent increase in federal spendingbetween the years two thousand and nineteen.
In two thousand twenty one, soa fifty percent increase in spending, we

(03:38):
had tax cut stimulus programs, youknow, less tax revenue as a result
of basically you know, COVID.COVID helped helped add to these these you
know, troubles that we have,you know, the widespread unemployment, and
we we were given way money leftand right, a lot of a lot

(04:02):
of stimulus programs. And you know, now you know, here we are,
we have the Republican lawmakers pushing forless spending Democrats, which you know,
being led by by President Biden.They're they're they're looking to spend money.
You know, you have the InflationReduction Act, which I can assure

(04:24):
you folks will we will not seeany any any reduction of inflation because of
this Act. It's going to costus more than a trillion dollars over the
next decade. And that's just wecan't be spending money like that. We
can't be spending money. So Congresshas to September thirtieth to come up with

(04:46):
some kind of a spending bill.We'll see what happens. So Doug and
I you know, I'm on withthem every every Wednesday morning at ten minutes
to seven, so if you're upearly tuned in. Doug's really pretty pretty
dynamite entertainer and he has some reallygood content in his show. He came

(05:06):
from Boston. We were lucky toget him and he's done an amazing job
for Radio E ten w g Y. So we were talking, you know,
why why is the budget so high? What what happens if you look
at the top top, just thetop three you know parts of the budget.

(05:28):
You have Defense number one, wespend more money on defense than anything
else. And this is for themilitary, personnel, operations, equipment,
healthcare. This includes programs like MedicareMedicaid, along with some other public in
this shative. Social Security. Weknow, we know, we're trying to

(05:49):
to you know, all those yearsand decades where workers were having part of
their paycheck and also part of thecontribution as social Security came from the company,
the employer of the worker, ofthe employee. So this is this
is money. And then you know, number four is income security, stuff

(06:12):
like unemployment benefits, food stamps,other assistance programs. And Washington at some
point has to wrap their arms aroundsome of these issues. Right now,
President Biden nor Donald Trump, whoare right now the two leading you know,
candidates for the next presidency, neitherof them are willing to talk about,

(06:36):
you know, any anything to dealwith this. Now. You have
to remember and listen. Don't thinkI'm sitting here thinking we need to cut
Social Security for people getting social Security. Absolutely not. But there are some
little things we can do, likemaybe raise the full retirement age from sixty

(06:58):
seven to sixty eight, and downthe road maybe to sixty nine. And
before you say Steve, what areyou talking about? We can't do that.
People need to prepare, folks,It won't Listen, people in their
twenties have forty years to prepare forthis. So if all of a sudden
they don't get full social Security atage sixty seven, guess what they had

(07:20):
forty years to plan for that.That's plenty of time. We do a
lot of financial planning in our firm. That's plenty of time for these young
people to prepare for Social Security.Now, just to give you a little
shed some light, when when FDRyou know, when social Security came out?

(07:45):
All right, believe it or not. Believe it or not. When
social Security was created back in nineteenthirty five, the average life expectancy was
around sixty one point seven years.This means that many people did not live

(08:07):
long enough to reach the age atwhich they could receive Social Security benefits.
The retirement age for Social Security atthat time was sixty five. Makes sense,
kind of like that New York Partnershiplong term care policy you have.
Why do you think they came upwith? The insurance will cover for three

(08:28):
years, then the state will kickin. Because eighty five percent of people
that go into long term care facilitiesare out one way or the other before
three years. So think about SocialSecurity. Back then, life expectancy sixty
one point seven years. They peggedthe full retirement age at sixty five.

(08:50):
Guess what today? Well, asof the last time I was able to
pull the statistic, as of twentytwenty, the average life expectancy in the
United States was seventy eight point eightyears seventy nine years. You go from
almost sixty two years to seventy nineyears seventeen years difference. The advances in

(09:15):
medicine and medical technology and everything,we're taking care of ourselves better, We're
living longer. So just some littlethings like tweaking Social Security or how about
the people that are millionaires and billionaires, they believe it or not, get
a Social Security check. Do theyneed it no? Do they want it?

(09:39):
No? But they get it.So there are some things that people
in Washington, and if any ofour elected officials in Washington are listening,
I would love some day to wakeup and just see that somebody in Washington
is talking about wrapping their arms aroundthat thirty three trillion dollars in debt is

(10:00):
just way, way, way,way, way too much. For us,
and with the interest rates going up. Another big line item is the
interests we pay on the treasury bills. Yesterday I talked about bonds. Actually,
I've been talking a lot about bonds. First time you've heard me in
twenty eight years talk a lot aboutbonds. But when you can get a

(10:20):
six year treasury bill at five anda half percent, a five year at
four point six percent, almost aten year at four point four or five
percent almost, I mean, thoseare interest rates we haven't seen in quite
some time. So the government hasthat fund those interests payments to those of

(10:41):
us that buy those bonds, tbills, treasury treasury bonds, whatever it
might be. The government has topay that interest. So when we were
getting next to zero interests, ithardly costs the government anything. Now,
as you can see, it's costingthe government whole lot more. All I'm
saying is it's common sense. Thereare some things that Washington has to address

(11:07):
because we can't continue this country,can't continue having debt rise like it is,
and thirty three trillion dollars a debtis is mind boggling. Anyway,
enough of that we talked about it. Hopefully, Hopefully people in Washington,
will talk about it soon. Oneeight hundred talk w g y one eight

(11:31):
hundred eight two five five nine fournine. Zach, let me take a
quick fifteen second break. Thank youfolks for letting me take that quick break,
and a little sip of my morningJoe, my job, my coffee.

(11:54):
Thank you for tuning in. Ifyou have any questions, give me
a call. One eight hundred eighttwo five five nine four nine. One
eight hundred eight two five fifty nineforty nine. So what a week we
had in the market. So itwas an ugly week, folks, and
I'm not going to mince words,just one of those weeks where holy Kyle,
you just you know, this wasone of those weeks where you probably

(12:16):
question yourself, why do I ownstocks? Well, you're going to have
weeks like this, They're not goingto go away. They're going to come.
You know, There's going to bemore and more weeks like this,
sometimes months. So it's it was, you know, better known as the
Fed week. Right, we knewthe Fed was meeting Tuesday, and Wednesday,

(12:41):
Jay Powell came out, They pausedinterest rates. We expected that,
we didn't expect interest rates to goup. We absolutely didn't expect interest rates
to go down, But the toughtalk is what really did the markets in.
Jay Powell came out and basically said, we're you know, don't get

(13:01):
used to this. We are stilllooking to peg inflation at two percent.
Until we do that, we maycontinue to hike interest rates the Federal Reserve.
You know, we're at twenty twoyear high with these interest rates.
And as they said, FED ChairJerome Powell said that officials didn't need to

(13:24):
decide yet whether to lift the ratesagain after a historically rapid series have increases
over the last eighteen months. Eleventimes they raised interest rates over the last
eighteen months historic in nature, andthey indicated that they expect to keep rates
higher for longer through twenty twenty fourthan they anticipated earlier this year. So

(13:48):
there you have it. So nowthe FED is continuing their schoolyard bully talk.
And I say that because it's amoving target, folks, and de
Fed on a you know, canturn on a dime here and change their
tune because their data driven, andif they see good data come in where

(14:11):
inflation is coming down, and maybemaybe maybe they don't have to drive us
deep into a recession. A weekago, I was saying, I didn't
think they needed to drive us deepinto a recession. But now you know,
after after reading some of the comments, when they came out on Wednesday
and talked, you know, wehad interest rates go as high as they've

(14:33):
been for a long time. Fedofficials basically, you know, the FED
funds rate is between the range offive point two five and five point five.
They have a two percent inflation goaltwo percent. Now, yesterday said
it, and I've said it manytimes. If you look over the last
ninety years, the average inflation isthree point four. Why does the FED

(14:56):
want a two percent target? Becauseover the last fifteen years inflation was under
two percent. They got used tothat. They were they were drinking that
koolaid where inflation was low. Butthat's not normal, folks. Inflation normally
isn't under two percent. Inflation isbetween three and four percent on average.

(15:16):
So what do I know, folks? I think I think inflation will probably
settle in closer to three percent thantwo percent. But what do I know?
I just used common sense and historyhas has taught me that over ninety
years of inflation average is three pointfour. Where did this two percent number

(15:37):
come in, and I think itcame in because the Fed got kind of
drank their own koolaid over the lastfifteen years and got used to inflation being
under two percent. But we'll see, we'll see right now as we sit
here, August CPI came in atthree point eight, a little bit more
than the three percent in June.June. July, August, you know,

(16:00):
went up a little bit, butfrom a year ago June it came
down from nine point one. Sowe've made some you know, the hard
work that the FED has done,the eleven hikes that they put in.
Remember it usually normally takes twelve toeighteen months after the first hike for the
effects to be felt through the economy. So we are just eighteen months after

(16:25):
the first hike. We're just feelingthe effect. And you know, you're
starting, you know, consumer sentimentsdown, unemployments ticking up a little bit,
companies are starting to layoffs. SoI think we're starting to feel the
effects of that first hike eighteen eighteenmonths ago. But we'll see. You
know, mortgage traits are are youknow, the average thirty year fixed rate

(16:49):
for a mortgage seven point three onepercent that's the highest level since December of
two thousand, two thousand. Nearlyone in six home purchases fell apart before
closing last month, probably because youknow I use this statistic often. When
when if you bought a five hundredthousand dollars home just over a year ago,

(17:11):
when mortgage rates were three percent,If you bought that five one hundred
thousand dollars home, put twenty twentypercent down, borrowed four hundred thousand dollars
principal and interest, your mortgage paymentwas about seventeen hundred dollars a month.
Today, at seven percent, it'stwenty seven hundred dollars a month, a
thousand dollars more for the same mortgage. Now you'd have to buy a home

(17:34):
close to the three hundred thousand dollarsto keep that seventeen hundred dollars mortgage payment.
That's why home sales the inventory.I've talked to a lot of real
estate agents. I have a lotof who are clients and there are there's
no inventory out there. People aren'tselling their home to make a latter remover,
maybe upgrading they can afford to becauseof mortgage rates. So there you

(17:57):
have it. I'm hoping the Fedwe'll look at that, and I'm hoping
that we're done with interest rate hikes. But they're leaving it on the table.
That's why we had an ugly weekin the markets. One eight hundred
talk w G y on eight hundredeight, two, five, five,
nine, four nine. Let's goto the phone, letch. We're gonna
go all the way to Connecticut wherewe have Paul Hello, Paul Hey,

(18:21):
Steve. Full disclosure, I'm aCPA and I do my own investing.
But oh man, how are youdoing? Are you making money? I'm
not here to make money. I'mto maintain a good life. So smart
guy about this is a It's notreal technical, but it's fairly it's fairly

(18:42):
straightforward. I hope. If let'ssay I'm making the numbers up a ten
year bond yield at five, andlet's say these short term treasuries were six,
is there a point where you sitthere and go, I've got one
hundred dollars to invest. I'm gonnabuy twenty dollars worth of ten year bonds

(19:02):
and eighty worth of shorter duration planningon dumping that bond for capital appreciation.
Because you've calculated it. You knowthe question, I'm sure, yeah,
yeah, no, I mean it'slisten if you want to be a bond
trader, because listen when when whenwe look at these short term bonds,

(19:22):
Paul, I mean to think thatyou can get a you know, a
three month, six month for fiveand a half percent. And I talk
about it often. Why would along term investor by a ten year at
four point four percent when they canget that short term money? The rub
comes in. We just don't knowwhen where interest rates will be when these

(19:45):
three and six in one year treasurybills come to when they mature. But
if, as you say, youknow, we bought a lot of bonds
for clients. We can't buy bondsfor individual bonds for every client because they
just don't have enough money in theirportfolio. But for our high net worth
clients with sizeable assets, we're buyinga boatload of bonds and we look at

(20:08):
the capital appreciation in them and they'repretty sweet. So why wouldn't somebody trade
that? Well, if you tradethat, then what do you do?
Do you buy a longer term bond? And that's you have to decide if
you're going to be an investor ora trader. When it comes to bonds,
most people just don't want to tradethat. Okay, no, but

(20:30):
you understand. I guess my pointis it gets into where you say you
don't know where rates are go.No one knows that. I was no
other shows, and the reality is, and it ties into what you're talking
about with the debtload. We knowthat if longer bonds continue on the public
side go through the roof, goingback to older you know scenarios back well

(20:56):
before two thousand and seven or whateverthe cutoff was there when things went to
zero. We have a big problemwith fiscal overload on the budget. And
I guess there's got to be somepoint where you guys go, this is
just to juicy, and I knowit ties into inflation. I had one
other quick question. Can I justadd to that, Paul, so net

(21:19):
interest. I talked earlier about youknow, us being thirty three trillion dollars
in debt, which isn't isn't goodfor this great country of hours. You
know the top components of the budget, defense, healthcare, social Security,
income security. Number five is netinterest. This is the interest paid on
the national debt. And the pointthat you're making. I think the point

(21:41):
that you're making is with these highinterest rates, man oh Man, the
government's paying that much more, whichadds that much more to our debt.
Right, yeah, exactly. Oneother question or observation. I think you
did have a graded state winner inCanada a week and going to day.

(22:02):
You know, my team says Steve, you shouldn't have talked about your hobbies.
You you know what you do onthe side. But man oh man,
Paul, I had a great winnerlast week. Right. Let me
say this. I follow racing.I lose, but I love the game,
and you've got one of the finesttrainers by far in the game,

(22:25):
the clean operation. He runs nevera violation. I've talked to Anthony Stabille
about this and others. You pickedthe right guy, and I'm glad you
want up there because they run verygood racing in Canada and I wish New
York would come around and how theyoperate. So congratulations on that, Paul,
Paul, thank you. We're comingup to the bottom of the news.
I'll talk a little bit more aboutit. On the other side.

(22:48):
You're listening to Let's talk money.Brought to you by Bouchef and Andrew,
where we help our clients prioritize theirhealth while we manage the wealth for life.
The phone lines are open one eighthundred eight two five five nine four
nine one eight hundred and eight twofive fifty nine forty nine see in two
quick minutes. M I like thissong, Zach. Good morning Oakes.

(24:00):
Thank you for tuning in today,Thank you for hanging in through the news.
I know Paul and I were talkingright before we cut off for the
news, and he had a greatquestion about you know, bonds and everything,
and then he kind of asked meabout my hobby. And you know,
it's funny. I got some somesome people in my office. I
say, you know, you reallyshouldn't talk about that. We're we're investment

(24:22):
professionals. I said, yeah,but everybody has a hobby, right.
Some people go fishing, some people. And one of my hobbies is,
you know, I dabble in horseracing. And I did have a horse,
Carson's run my partners West Point thoroughBrands, which is a huge syndicate.
They are my partner in this horseand we did win the Summer Steak

(24:42):
and Canada last week last Saturday,and Christoph and Miguel Clement are too,
the cleanest, best, most ethicaltrainers in the industry. One of the
reasons why I'm I'm I'm with andPaul makes it makes a good point.

(25:02):
So you know, right now Carson'srun maybe one of the best two year
olds in the country. It wasa win. You're in so he's going
to the Breeders' Cup November third andfourth, So it was exciting. Thank
you Paul for bringing that up.I don't usually talk about it on the
show one eight hundred Talk WGY oneeight hundred eight two five, five,

(25:23):
nine, four nine. So listeningto the news and you know New York
State, we know tax rates inNew York State are through the roof.
A lot of people are leaving NewYork State, individuals and also businesses because
they've just had it. And youknow, it's it's good that Governor Hocal
is looking to get some of thesefolks, the migrant community into the workforce

(25:48):
because there are a lot of jobsout there. But you know what's crazy,
New York State is considered to bemore generous than those in many other
states. New York State gives higher, better unemployment benefits than ever and there's

(26:10):
a lot of people collecting unemployment inthis state that could be out there taking
some of these jobs that these thesemigrants will will be more than happy to
take. They'll do it with asmile on their face sometimes. And you
know, it goes to my rantabout this country being thirty three trillion dollars

(26:30):
in debt. We spend so muchmoney on entitlement programs and unemployment. Believe
me, if you're capable to work, and there's a job out there,
and there's almost ten million open jobsout there, so if you want a
job, there's a job out there. If you're collecting unemployment, god darn
it, you're entitled. You're beingtaken care of by those that are are

(26:56):
are working hard. And I'm sorry, but you know, the entitlement programs
add to the debt that this countryis in. Somebody's got to talk about
it. It's just common sense.So New York State, you know,
it's funny she she can't wait toget these people on the payroll. And
believe me, there's a lot.I don't care if it's your landscaper,
your favorite restaurant, I don't careif it's your dry cleaner. There's a

(27:21):
lot of companies, a lot ofbusinesses that would love to hire people that
are willing to work and work hard. And listen, our country was built
on the backs of people that camein from other countries around the world.
Our country was built on the backsof these people. And and you know

(27:41):
they work, they work hard.Just look around, you know, look
at who's who's mowing your lawn.Look at who's you know, cooking your
dinner. And you know, inthe back room of some of these these
these establishments, in the front officesof some of these establishments, a lot
of them are are people that thatthat that came to this great country of

(28:06):
ours because it is the land ofopportunity. But New York State does have
high unemployment benefits. You know,maybe maybe Governor Hoco can can address that,
she and her colleagues can can addressthat and maybe bring the taxes down
to New York States such that peoplearen't leaving businesses aren't looking to relocate,

(28:30):
because boy oh boy, they surethey sure are. Now with that being
said, a lot of people,a lot of clients when we do financial
planning, they say, oh,you know, when I retire, I
just don't want to pay the taxes, and I remind them the first twenty
thousand dollars of pension income is taxfree New York State tax free. And
a lot of people don't realize that. So if you're married, you and

(28:52):
your your your your spouse, thatcould be forty thousand dollars of tax free
income. Add on to that SocialSecurity you could have, you know,
seventy five eighty thousand dollars tax freeof income. So a lot of people
forget that. One eight hundred eighttwo five fifty nine forty nine. One
eight hundred eight two five fifty nineforty nine. What else happened this week?

(29:15):
So we got some news Amazon addingtwo hundred and fifty thousand workers for
the holidays. They're the number oneemployer folks in this country, number one
millions. They employ millions. Andnot only are they adding two hundred and
fifty thousand workers, they're they're uppingtheir hourly rate to almost twenty one dollars

(29:40):
an hour from nineteen dollars an hour. I talked about this last week.
Minimum wages out the window. Anybodywho thinks they're going to hire somebody at
ten dollars an hour is crazy,because you know, if you're not hiring
closer to fifteen dollars an hour,you're not going to get anybody to want
to work for you. So whenyou take some of the big employers,
Amazon, Costco, Walmart, Target, you know they're starting out Walmart,

(30:06):
I think Walmart's starting out of fourteendollars an hour. So Amazon on Tuesday
said it's hiring two hundred and fiftythousand workers for the holiday rush. Target
is adding on I think one hundredor one hundred and fifty thousand workers,
you know, being paid decent moneyplus plus some of them are getting signed

(30:30):
on bonuses a thousand and three thousanddollars depending on the location. Delivery warehouse
and delivery employees are making twenty dollarsand fifty cents an hour at at Amazon.
Walmart is second. Amazon is thelargest, Walmart is second, and

(30:52):
Amazon right now has about almost onepoint five million employees globally. Target,
as I said, adding one hundredthousand workers for just for the holiday.
So there's a lot of jobs outthere, a lot of jobs. You
know. The the you go backto this week in the markets, and

(31:17):
I didn't really talk about just howugly of a week, but it was.
You know, the headline in theWall Street Journal yesterday was the SMP
five hundred posts its worst week sinceMarch. And that's true. The SMP
down almost three percent, NAZZAC downalmost four percent, three point six two

(31:38):
percent, to be exact, theRussell two thousand down three point eight two
percent. QQQ If you buy aQQQ down three point three percent. And
one of the reasons why is thoseyou know, we talk about it often,
the Magnificent seven, those big companiesthat that dominate not only the SMP,

(31:59):
but STACK just just dominate it.You know, year to date,
NASDAC is off, it's high.The NASDAC compositive is twenty six percent.
The QQQS is up thirty five percentyear to date off, it's high,
probably almost ten percent from from thehigh water market in the SMP is up

(32:21):
twelve and a half percent off,it's high by about five six percent,
still better than international. If youlook at the rest of the world excluding
the USA, that index is upfour point five compared to the SMP twelve
point five, and emerging market's pointto eight compared to the SMP at twelve

(32:42):
point five. And the SMP reallyshould be your benchmark. So let's put
it in perspective, the SMP,as I said, off about five percent
from its peak in August. There'sa lot of a lot of worry out
there, especially after this week,the Fed week, let's call it the
Fed week. The Federal Reserve cameout and you know, they left interest
rates alone, but they backed itup by saying there could be more hikes

(33:07):
coming down the road, and morethan likely interest rates will remain higher for
a long long time. And thescenario behind lowering and raising interest rates when
inflation rears its ugly head. Whenyou're paying more for milk and bread at
Stewart's or Market thirty two, whenit's costing you more for goods and services,

(33:32):
that's inflation. We know that.You know, gas just a few
years ago was closer to two dollarsa gallon. A year ago was almost
five dollars a gallon. As wesit here today, it's close to four
dollars a gallon. That's inflation.When you go from two dollars to five
down the four four. Sure it'snot as high as five a year ago,

(33:53):
but it's still a whole lot higherthan two just a couple of years
ago. So that's inflation, andyou can't most people need to fill up
their gas tank. And if they'renot filling up their gas tank, it's
costing them more money to take anuber car service, taxi bus, it's
costing them more money to have theirpizza delivered or door dash, you get

(34:16):
it. The price of gas goesinto so much and oil is up over
ninety dollars a gallon right now,So it's energy is really really creating havoc
in the inflation front. And theprice of food. You know, even
though inflation was overall inflation was threepoint eight percent, food was six percent

(34:37):
last month. Food was up sixpercent last month, much more than overall
inflation. So food and energy aretwo components that that that that we need,
and that's that's inflation right there.You know, now we have our
heating bills. Our heating bills aregoing to be higher, So you put
it all together, you're paying morefor goods and services. More money's coming

(35:00):
out of your pocket to buy whatyou bought a year or two ago for
a lot less money. That's inflation. So the Fed increases rates to kind
of hold off inflation, and thenwhen they feel that we're going into a
recession, which this FED has admittedto. They may drive us into a

(35:22):
recession. Millions of people may losetheir job when they put us in that
ugly scenario. Now, they needto lower interest rates to stimulate the economy,
to get people to feel better aboutgoing out and spending money so that
the economy doesn't really go into astate of depression. So that's the mechanics
behind the Fed increasing and lowering interestrates. One eight hundred eight two five

(35:47):
five nine four nine one eight hundredeight two five fifty nine forty nine.
Zach, let me take another quickfifteen second free Thank you Zach for letting
me. I had to clear mydrop. Folks, thanks for tuning in

(36:07):
today. I can't thank you enough. You've made this show such a joy
to do, and we've been doingit for twenty eight years. Every Saturday
at ten am ten am, notnoon anymore, but ten am and Sundays
at eight am, either myself fromone of my colleagues is here to do
the show, and it's really Ican't thank you enough. And right after

(36:30):
us on Sunday mornings, you've gotJoe Gallagher. Now I'll talk about being
entertained there's a guy bigger than lifeand he's on right after this show,
So don't don't turn the channel whenwhen our show ends at the top of
the hour, hanging there for JoeGallagher. He's pretty good. And then
you know you've got Zach Harris.He's got a great sports show at eleven

(36:52):
o'clock. So, man, ohman, you know this, this,
this syndicate of radio stations can keepyou busy and give you really some good
good stuff to listen to. SoJoe Gallagher right now at at nine am.
And Zach real quick, what channelare you on with your sports show
at eleven Box Sports nine eighty andninety five point nine FM. Perfect,

(37:16):
Zach, thank you one eight hundredand eight five five nine four nine.
Let's go back to the phone lines. We have Tom in Aubany. Hello,
Tom, Hey, how are youdoing? Steve? I have a
question. Do you know what theCOLA would be for Social Security recipience?
Oh? Twenty four? Since demandof inflation is three point eight for the

(37:39):
CPI. Yeah, no, ithasn't come out yet. Last year was
the biggest bump that Social Security recipientsreceived in quite some time. I think
it was over nine percent. Iforget the exact bump that it was,
but it was, it was.It was pretty pretty high. You know.

(38:04):
It's funny social Security. If youlook at the COLA, they basically
cost of living adjustments for Social Security. There's a lot of people time that
rely on Social Security. They needsocial Security. It's the majority of their
their income. The average Social Securitycheck is about fifteen thousand dollars, so
if you're married, that's thirty thousanddollars on average. Now, some people

(38:27):
may be collecting more, people maybe collecting less. But when you look
at the COLA adjustments and recipients ofSocial Security, look at this year in
year out, because it means somuch to them, you know. So,
so last year I think it wasclose to nine percent. Twenty twenty
one it was six percent. Twentytwenty was only one point three percent.

(38:51):
You go back to twenty sixteen,it was point three percent. Twenty fifteen,
there was no bump at all.You have to go back to nineteen
eighty Now, remember that's when inflationwas raring its ugly head in a bad
way. You could buy a Treasurynote for sixteen percent in nineteen eighty one.

(39:13):
September of nineteen eighty one, theSocial Security COLA cost of living adjustments
was almost fifteen percent. In nineteeneighty that's the high water mark, and
that's because inflation was as high asit was now. If people remember buying
a mortgage, interest rates were almosttwenty percent. So it's too soon to

(39:34):
see what the COLA will be.But with inflation coming down, if I
were to be a betting man,if I were to guess, and this
is just a guestiment, I'm goingto guess. So we had almost nine
percent last year, I'm going toguess that's cola this year. Because inflation
right now is between three and fourpercent, I'm guessing the COLA will probably

(39:57):
come in somewhere around that. We'llsee, you know, if you tune
in every week, we'll talk aboutit. When it does come out.
It usually comes out, I thinkin October it usually is announced. But
we'll see. We'll see what September'sCPI number comes in at. That's a
big component that they look at.But as they said last year, it
was a nice hike. In theyear before, five point nine percent was

(40:20):
a nice hike, But on theaverage over the last twenty years, the
hike for Cola has been very minimal, low low, low low. I'd
like to come in, mister JohnPower to the Reserve chairman. I understanding
why he want to increase the interestrace and stole down the economy. But
like you said in previous radio shows, he's hurt in the average family because

(40:45):
I gotta tell you, the highestinterest rate, which is long shark to
me, would be Chase twenty ninepoint nine nine percent. Maybe that's why
they have nice offices, and maybethat's why the CEO make over five million
dollars. Yeah, I think it'sridiculous if he keep increasing answers rate,
credit cards keep going up, theball money, personal loans, he's going

(41:07):
up. He's I think he's hurtin the African American family. He just
he just gonna see it. Asfar as bionomics, bionomics are not working.
Gas is at all time high,keep going up and up or keep
going up. Food is going up. I don't know how in the world
for the Reserve chairman gonna get itdown to two percent. I think he's

(41:28):
la la landy. I think he'sdreaming. You know, Tom, I
couldn't agree with you more. CanI ask you a personal question, sure
do you? So you asked aboutsocial security? Does social I'm guessing you're
retired. Are you collecting social Security? Now? I receive Social Security disability?
Oh okay, all right, Sothe coola means a lot to you.

(41:51):
That well, I hope for forfor you to be healthy first and
foremost. But a lot of thecomments you make time, I couldn't agree
with you anymore. You you're you'reright, higher interest rates and and you
hear me say it often if youlisten to the show Tom, I say
it often. It's the people likeyourself. You're not able to work,

(42:12):
so you're collecting Social Security disability benefitsand that's just you know, that's nothing
like the days when you're able towork and be able to bring home a
bigger paycheck. So so when yousee the price of goods and services go
up, it affects you directly,and my heart goes out to you,
you know, I say it often. There's a lot of people when they

(42:35):
go to the gas pump, theycan afford that extra ten twenty thirty dollars
to put in their gas pump.They can afford the extra forty fifty sixty
dollars at the grocery store a week. But a lot of people, Tom,
like probably yourself, that's on afixed income, that that that can't
afford it. You know, you'refeeling the impact of that. And that's

(42:58):
that's and Jay Powell continue used thehike interest rates, which he's gone on
record saying that he wants millions ofpeople to be unemployed, because you know
why these nineteen governors there, they'rereally nothing more than then there's nothing more
than people that never left college.You know, they got their nose in

(43:22):
the textbook and they learned from history, but they don't have a dose of
reality. And I said this becausetwo years ago you kind of alluded to
it, Tom, the Federal Reserve, Janet Yelling, our Treasury secretary,
the White House administration all said inflationwas temporary. And I was frothing at
the mouth. I know I havea face for radio, but if you

(43:45):
could see through the mic, Tomand see me frothing at the mouth,
I'm telling you, I said,are these people as you said, I'm
law out land. They're not fillingup their car with gas. They're not
going to the grocery store. Theyhave people to do that for themselves.
They're not paying the heating bills.You and I and everybody listening. We

(44:05):
knew inflation was rearing its ugly head. They should have been more proactive,
they weren't. I froth at themouth when I think about them. Now
they're taking it to the other extremewhere they're talking tough in order to make
up for them missing the boat.But Tom, every point you made,
my heart goes out to you.Every point you may. I couldn't agree

(44:30):
with you more. It's people likeyou on a fixed income that you're hurting
and they don't get it. Solisten. I wish you the best,
good health, tea. Thank youfor calling in. Your comments were right
on the mark one eight hundred andeight, two, five, five,
nine, four nine. That wasa great, great, great comment from

(44:52):
Tom. I mean, god,he hit on a lot of a lot
of points. I should hire Tomas an analyst. So you know,
the SMP down five percent from itspeak. It was an ugly week.
The Fed came out, they talktalk top. You got the government shut
down, you got the UAW strike, you got student loan payment resuming,

(45:15):
You got oil at ninety dollars abarrel. Interest rates are higher. Consumer
sentiment is bad. Now man shortterm it it's painful to own stocks over
the last few weeks. For themonth of September, you know, the

(45:37):
markets are down. I think nanstock is down six percent, SMP is
down about five percent. It's painfulto own stocks over the last you know,
a few weeks. And don't letthat. Don't let that cloud your

(45:58):
vision for the future. I'm optimisticthat the stock market this is just a
bump in the road, and ifyou've got a well diversified portfolio, you
will do just fine. Don't Actually, as you hear me say, often
use volatility as an opportunity. Useit as an opportunity to go and maybe

(46:22):
tweak your portfolio, shore up yourportfolio. If you have money in cash
that you always wanted to put intothe stock market, now is the time
to do that. I feel thatthere's better days ahead and this little bump
in the road doesn't scare us.Folks. I can't believe we're coming up
to the end of the show.I can't thank you enough for tuning in.

(46:45):
I truly appreciate it. Go toour website bouchet dot com bouche Y
that's bouchey dot com to get moreinformation on our firm. You're listening to
Let's Talk Money, brought to youby Bouchet Nanci Group, where we help
our clients prioritize their health while wemanage their wealth for life. I hope

(47:06):
you enjoy this Sunday. Put thatnice sweater on that you bought. Today
is a day that you get towear, or that nice light jacket.
Thank you for tuning in making thisshow as popular as it is. Bouchet
dot com to learn more about us. Stay healthy, folks, See you
next week. Have a great day.