Money Monday with Brian James

Episode Transcript

Speaker 1 (00:00):
The voices of reason, a voice in the dark, heard daily.

Speaker 2 (00:03):
Exactly the things that needs to be said.

Speaker 1 (00:05):
Fifty five KRC.

Speaker 3 (00:07):
The talk station should have eight O five I fifty
five KR see the talk station. Brian Thomas fishing everyone
a very happy Monday. And it is Monday. It is
eight oh five. It is time for Monday Monday with
Brian James from All with Financial Brian James, Welcome back
to the program, my friend, good to talk to you.

Speaker 4 (00:25):
Good morning, good morning, glad to be here. Thanks once
again for the opportunity to talk to you and your listeners. Well,
the first topic's got me a little worried. Now, just
because someone thinks it may happen doesn't necessarily mean that
they're relying on car you know, concrete facts and information.
But I'm a little frightened by fifty one percent of
Americans worrying about a stock market crash, you know, as

(00:47):
opposed to like a correction or a downturn or something.
But I mean a crash is a significant, like massive
life changing ruining phenomenon.

Speaker 1 (00:58):
Yeah, it all depends on how you to these things too.

Speaker 4 (01:00):
Now, no, I would point out that none of these things,
none of these forecasts are ever based on factual information,
which is what makes them forecast. We never know what's coming.
That's just these are just measurements of what mood are
we in. So one of this is that a new
study is out showing that fifty one percent of people
are expecting a market crash. I also would remind everyone

(01:21):
that the same percentage of people were expecting the second
leg down from the recession, the brief recession that occurred
during the COVID period. Uh that was five years ago,
and they spent probably two or three years waiting for
that to kick in, and it never did. Thank We
just talk about things until they happen or don't happen.

Speaker 1 (01:37):
Thank you change that way.

Speaker 3 (01:39):
You see, because you know there always is going to
be some kind of downturn at some point. So if
we keep the conversation going on for enough years that
at some point you can say, see, I told you
so exactly.

Speaker 4 (01:50):
I've been talking about rain for the better part of
a week, Brian, and look, lo and behold, I was
right last night.

Speaker 1 (01:55):
Go pick this all up. I'm no sure damas you
kept this all up.

Speaker 3 (01:58):
But some of the this, this expression of concern, I
guess is predicated on the tariff situation, which I know
we're going to be talking a little bit more about.
But tariffs have got people a little spooked and jittery.
I mean, I've saw some really frightening statistics about the
impact on car buying and how much it may increase
the price of cars, which I know is on your

(02:20):
short list of talk about today, maybe ten thousand dollars more,
depending But it's you know, when you looked at the
breakdown of what's in an American car, you know, American
car made in Detroit, and you're like, actually, no, it's not.
It's like forty to sixty percent imported stuff.

Speaker 4 (02:36):
Just because the CEO's rear end sits in an office
that is within the bounds of the United States doesn't
mean that that particular company's cars are exempt. For example,
teriff exposure for GM's about forty five percent, twenty five
percent for Stalantis the artist formerly known as Chrysler, and
about twenty percent for four. So even in US made cars,
about thirty five percent of parts are not compliant. With

(02:58):
the US Mexico Canada agreement from a few years ago
that Trump put in place but doesn't seem to like anymore.
So the estimates rise from you know, anywhere around twenty
seven hundred to five thousand dollars, maybe in some extreme
scenarios like you mentioned, ten thousand dollars in the added
costs of paying for these arguments. Now, the thing to
look at though, is these aren't supposed to kick in

(03:18):
for a couple of weeks. These are still negotiating tactics.
Maybe something changes between now in April second or third
whenever they's actually kick in, but remains to be seen.

Speaker 3 (03:28):
Yeah, I'm keeping my fingers crossed that the scenario does change,
and maybe whoever he's asking for something from will capitulate
and give it to some of Trump's terms and that
we won't have to go through the tariff struggle because
you know, I mean, you know it, I know it.
They're going to make the price that things go up.
There's just there's nothing you can get around that, whether
they're fair or not, I mean reciprocal. I understand the

(03:49):
fairness argument, because we're having our things subject to tariffs
over on their side of the ledger of whatever country
is receiving them and slapping the tariffs on. Why they're
doing that, I don't know. The genesis or basis behind
any of it. But you know, if this isn't trying
to create an even playing field, that argument at least
passes Mustard. But you can't get around the practical effect

(04:11):
that they're going to make things more expensive. So and
that's we don't need that right now, Brian.

Speaker 4 (04:17):
That is not helping, of course, no, But well I
would throw out there though, if you one interesting thing
I've noticed over the past couple months, because I've noticed
my phones haven't ranged very much.

Speaker 1 (04:26):
People aren't too spooked by this.

Speaker 4 (04:28):
Some of it is because there's a decent amount of
people out there who feel that the person in charge
right now is exactly who they wanted and this is
just the pain we have to go for we have
to deal with. But other people are simply looking and
I would say most people are simply looking at their
investment statements. If you are sitting on a properly diversified portfolio,
you're not down that much. Because where the United States
is proactively making changes to present ourselves differently to the world,

(04:51):
and the overall economic situation on this planet that is
causing so some of this is pretty much self inflicted.
We're gonna grumble about tariffs and all these well, then yeah,
the stock market's going to get a little squirrely. That
creates an opportunity for other places. So therefore, as we're
sitting here right now, the S and P five hundred
is down about five percent for the year. The Nasdaq
is an official correction territory, down ten percent a year.

Speaker 1 (05:13):
Today.

Speaker 4 (05:14):
International stocks, which I've spent the last ten years trying
to convince people not to dump, are up nine percent.
Our merging market funds are up about four and a
half percent. So if you have a diversified portfolio, you're
probably about even for the year. Despite some of the scariest, craziest,
most unsettling headlines we've seen, so mostly the market is quiet.

Speaker 3 (05:34):
Well, you know, it's interesting you put that in the
context of your phone not ringing very much, because, as
you pointed out so many times over the years, your
phone will ring a lot when it hits the fan.
In some way, you got a you know, precipitous drop
and the S and P five hundred or something. People
get all wigged out and like, should I sell? Should
I sell? And that's what you're You're a counselor, as

(05:55):
a financial planner, you're you're a talker off of a
ledge kind of guy, exactly.

Speaker 4 (06:00):
And that's what we talk about. We talked about how
are we going to deal with these things? And then
we also put it in context of history. Something else
I've been boning up on is what happens, what has
happened during some of the scariest historical times we've had
here and then the next closest one. And I don't
mean to prognosticate anything here, but World War II obviously
was a reshuffling of the deck in terms of how
the world gets along with each other. Nineteen forty one,

(06:23):
the S and P five hundred was down somewhere between
ten and fifteen percent. That was when we first stepped
into that fray, and the unknown became the talk.

Speaker 1 (06:33):
Of the day. We have no idea what's coming out
of this.

Speaker 4 (06:35):
Nineteen forty two, forty three, forty four, and forty five
were each up a minimum of fifteen to twenty percent.
So if you own stocks through that entire period, you
did just fine. You weren't comfortable, you weren't happy, but
you didn't lose money.

Speaker 1 (06:49):
I did not know that. That's interesting.

Speaker 4 (06:51):
It's kind of mind Bob and think about it, because
all that means when wherever we have craziness, we don't
root for this stuff. But generally speaking, American companies historically
have been the best ever at figuring out about how
to profit off of something. So remember the stories from
World War Two about how factories pivoted to making instead
of cars, they were making tanks. Instead of creating tires,

(07:11):
they were making treads for the equipment we needed overseas.
It's just a catalyst the market will pivot to wherever
the profits can be made. We saw the same thing
when COVID kicked in and everybody had to go out
by a second set of computers to take home so
we can all work from home. We all never heard
of zoom before. Now zoom is pretty much ubiquito us.
I'm looking at you on it right now. These are
just catalysts that create an opportunity for somebody to make money.

Speaker 3 (07:34):
Yeah, And I guess the other component is when Trump
announced these tariffs. And I'm not sure there's a direct
straight line you can draw, but a lot of very
major businesses, you know, large, you know, multi billion dollar companies,
including autobile manufacturers. So they're going to start moving some
production here, and that's exactly the point Trump was trying
to accomplish the return of American manufacturing jobs. And maybe

(07:59):
it'll it'll bear I guess the question is when you
look at the component parts of these American automobiles, as
we just talked about, can we get those component parts
to return or be manufactured here, and if so, how
long would something like that take.

Speaker 1 (08:14):
And how long will it or how much will it cost?

Speaker 4 (08:16):
As you always point out that we are an expensive
place to produce anything because we've got an awful lot
of rules and things in place.

Speaker 1 (08:23):
Some of that is being dismantled right now. You know.

Speaker 4 (08:25):
There were some announcements made over the weekend about some
steps he's taken to weakened unions, some first shots fired
across the valle at the labor market here in the
United States.

Speaker 1 (08:36):
That's not necessarily going to.

Speaker 4 (08:37):
Go well because a lot of those people were his
supporters and they're having some of the rugs pulled out
from under them. But if we're going to manufacture parts here,
and this is all about making the United States more profitable,
he's got to look at the cost of good soul.

Speaker 1 (08:50):
What does it cost to produce this stuff?

Speaker 4 (08:52):
I just bringing the jobs back on shore isn't the
only step that's true. That is true, and we know
all day long it's impossible to eat even the playing
field from a production cost standpoint when you are dealing
with countries that have just practically dictatorial control over the
working conditions, and quite often they're poor and the people
do not get paid very much. So that in and

(09:12):
of itself is kind of a it's it's a drag
on doing business in the United States. That's why everybody
moved over to China for so long we can give
you embraced China as a trading partner. They have inexpensive labor,
and they're welcoming. They're happy to open manufacturing facilities and
get that the skids greased for that. And then next thing,
you know, we find that we're not making anything here.

(09:34):
When it all hits a fan, like during the pandemic
that was a frightened the cold water does to reality,
I think I'd rather pay more for something knowing that
it was made here and that we have a steady
supply of it. You know, then I have to rely
on what might very well be our arch enemy in
a conflict to make it yeah, I think philosophically you'd

(09:55):
have a lot of people agreeing with that. But on
the other hand, the market and the price of any
given stop is based off of how profitable can that company.

Speaker 1 (10:02):
Be going forward.

Speaker 4 (10:03):
Philosophically, we can say, yeah, I want to buy stuff
from here, but that's going to have an impact on
the price as well.

Speaker 3 (10:08):
All right, well we'll stop contemplating our navels. We'll bring
and Brien James back talk a little bit about futures
dropping among the tariff hears and people. I guess from
a good stand thing they're adding to their rainy day fund,
which I'm going to guess Brian James thinks is a
good idea. More with Money Monday's Brian James, after I
mentioned my dear friends at Budd Herbert Motors, get in
touch with Bud Herbert for all the lawn equipment you need.
They have the best. They only carry world class brands

(10:31):
John Deere. They got x Mark mower, Steel handa power equipment.
That's where I got my professional level Honda push mower.
Last one will ever have to buy. It's built that well,
said the Herbert family. You will be working with a
Herbert family member so they're going to make sure you
get the right piece of lawn equipment that you're looking for.
There know everything there is to know about the equipment
that they sell, delivered to your door, and they service

(10:52):
what they sell. You can't get that kind of service
from a box store. And I had a terrible box
store experience, which is why I'm so pleased that good
friend of mine steer me to Bud Herbert Motors, and
that's why I'm blessed to be in a position to
steer you to Bud Herbert Motors. Tell the Herbert family.
Brian said, Hi, when you get in touch with him,
you can do it two ways. Go to Bud Herbert
Mootors dot com. Budherbertmotors dot com five four one thirty

(11:14):
two ninety one Fifth Generation Family and An operated five
one three five four one thirty two ninety.

Speaker 1 (11:20):
One fifty five KRC are your nineteenth fifty five per
CD talk station.

Speaker 3 (11:24):
Brian Thomas Swift All Work Financials Brian James doing Monday Monday,
continuing our discussion a little bit about futures here. I
just pulled up the Wall Street Journal's web page and
DALs down about zero point sixty seven. Future wise, it
looks like one point down for SMP five hundred NASDAK
about almost a point and a half. And the headline
upper left hand corner global stocks slump as concerns mount

(11:48):
over US tariffs.

Speaker 1 (11:49):
Brian was he not there anymore?

Speaker 3 (11:56):
I don't see his little photograph in the in the
pickup or the box there, Joe, Okay, he's not there.
He disappeared, Brian James went running and hiding. I don't
know what happened to him anyway. Apparently US savings rates

(12:19):
wrote in Rose in February, for the second straight month,
Americans rebuilding their rainy day funds after the holiday shopping season.
It's the article that he provided me for my insight
in your edification. Savings rates jumped four point six percent
last month from four point three in January and only
three point three in December. They say a low savings
rate usually means consumers would have to reduce spending at

(12:41):
some point to rebuild their savings, which slows the economy.
So the current savings rate below normal, but not excessively.
So arranged from about five to six percent in a
decade before the pandemic. So and I've always heard that
you know, from a financial standing plan point, you know,
try to sock away some money to cover you for
the rainy day. You never know when it's going to hit.
I had a friend of mine just lost his job

(13:01):
the other day. I think it was unanticipated, but it
does happen. So making sure you have some money socked away,
and I'm not sure the amount. One of the things
I wanted to ask Brian was how many months worth
of daily savings or our money you should have socked
away in that savings account. Anyhow is that him back again, Joe,

(13:23):
you're trying to get a hold of him, all right, Well,
you kind of got me off guard. I know it's
not your fault, Joe, because he just kind of disappeared
but left me without a topic. So I thought we'd
be filling up this half of an hour anyway. One
thing I did when I get to since we were
talking about Democrats and their policies and not seem to
be able to articulate any strategy to deal with Republicans

(13:45):
other than scream and yell and pull their hair out
over really things that don't make any sense. Kind of
a theme this morning. On the heels of that ridiculous
Tesla protest. Elon Musk isn't a fascist, it's definitionally, he's
the polar opposite of it. Brian was talking about that
reducing rules and regulations. That's what stagnates an economy. It
slows it down. And those rules and regulations are telling

(14:06):
you how to run your business. That's what fascists do.
So when you've got an administration that's in there that's
doing its best to get rid of the burden of
ridiculous regulations, you are dealing with an administration that is
the polar opposite of fascism. So get your definition straight
and try to make some sense of why going after
Elon Musk and Tesla's makes any sense whatsoever. I Brian

(14:31):
you there.

Speaker 2 (14:34):
I was looking at you and hearing you the whole time,
and we just got done talking about how great Zoom
was and what a catalyst it was, and then here
we go. So I think that I'll take the faulter jinxing.

Speaker 1 (14:43):
Then I go, that's okay, I'm glad he came back.

Speaker 3 (14:45):
I just getting rid of launch into another discussion about
the politics where we find ourselves. But as I was mentioned,
thinking we were going to be talking about the global
stock slump, concerns mount over US tariff. Just an update
on the Wall Street Journal. Across the board, you know,
futures are down. The worst down right now is NASDAC
at one and a half, but the rest of them
are down about a point, maybe a little bit under
dal Jones Industrials this point seventy three.

Speaker 1 (15:08):
So this is just.

Speaker 3 (15:11):
Didn't they factor in the market already that these these
terrifts are going to kick in?

Speaker 1 (15:16):
Brian, Yeah, and that's.

Speaker 2 (15:18):
Why we've seen the volatility. Remember, we get we're having lately,
we're having about two days of down one percent, you know,
down one one and a half percent, and then we'll
be down three percent, and then we get a chunk
of it back because the market will decide that there's
something out there, some shiny object that it likes, and
it'll bring it back. So we are anticipating these these
tariffs kicking in, and then we are celebrating what it

(15:39):
looks like they're not going to kick in tomorrow. At
some level of this, Brian is going to be saber
rattling because it is a negotiation tactic. Remember what Donald
Trump thinks, he's the best in the world. At that's
making a deal. So a lot of this is I'm
going to do something terrible to you in a month
unless you act the way that I want you to act.
And in some cases he's getting some concessions there. Remember

(16:00):
our first, very first discussion about this, probably a month
and a half ago, where the tariffs that they were
going to levy against Canada that went away overnight, became
something else as the negotiation continued. But the way he
stated it at the very outset of the discussion is
very different from what's happening now. So some of this
is savior rattling by both sides. No country on the
face of the earth can afford to completely seclude itself

(16:22):
from the rest of the world. Now that every every
company's customer base is the entire planet, So there won't
be any endgame of we are just going to take
our ball and go home and only sell to American customers.
That is not possible.

Speaker 3 (16:37):
Right of one of my favorite movies, Casablanca, one of
the lines isolationism is no longer a practical foreign policy,
and I think that's certainly the case in matters of business,
international business, and real quick I read the article in
the savings rates have gone, people are like putting, you know,
replenishing their savings accounts. As a financial planner, is there
a certain and I don't mean a dollar figure, but

(16:59):
based up on one's earnings and one's living expenses, is
there a certain number of months worth of money that
is recommended to sock away just in case?

Speaker 2 (17:09):
Yeah, And I think that's a great important discussion to have,
And for people who are who lead really really simple
lives and there's not a whole lot going on at
the moment, I would a minimum of three months. I
would say more like six months. If you've got kids
and a mortgage in the mix, and you have two jobs,
you know, two high paying jobs, that kind of thing,
you might want to look at more like twelve months,
because something crazy like that could have a significant amount

(17:32):
of impact on your situation. One thought I would throw
out there. I believe personally the ideal savings rate is
zero percent. The reason I say that is because it
should have been planned for a long time ago, and
if you've got that kind of money socked aside, you
don't need to be putting more into it. So I
have not changed my savings rate in probably two decades
because we solved the emergency prone problem a while ago,

(17:54):
and ever since then I focused on getting kids through
college and our retirement and so forth. I don't believe
you need to put cash into your savings account every
single month. If you're already there, it's just piling more money.

Speaker 3 (18:05):
Aside, and it's not invested, I mean, other than bank
interest rate, which we all know doesn't pay very much
compared to what your yields might be in the market investment.

Speaker 2 (18:14):
Exactly. I want to make sure people didn't hear me,
did not just hear me say that you don't need
an emergency point us to know what you need and
then know when you've accomplished a goal so that you
can move on to the next goal.

Speaker 3 (18:25):
But that's if first order of business in terms of
establishing a financial plan is to get that base amount
socked away so you can then invest cam I write on.

Speaker 2 (18:34):
That that is the oil in the engine, because we
can do magic with the long term investments. But when
the ship goes sideways, is it occasionally will you lose
your job or you know, the stock market takes a
chunk away A lot of times. Some of those that
happen all at the same time, you have to have
something to keep you afloat, or you'll have to dip
into your long term savings, which probably are taking a

(18:55):
bit of a hit at the moment. That what I'm
describing is pretty much happening right now. People are getting
laid on and they're having to sell at a loss
to cover the bills because they didn't have an emergency fund.

Speaker 3 (19:03):
And then there's you know the danger of having to
pay you know, the taxes and the penalties and things
like that by tapping into your four toh one k.
So try to avoid that, get that savings padded really well,
and then you can exhale and just watch your investments grow.
Brian James, Monday, Monday, I appreciate all worth the financial
loaning you out. Sorry for the glitch there, but we
got back on track and got the information out for
my listeners. I'll look forward to talking to you again

(19:23):
next week. I hope you have a wonderful a week, my.

Speaker 2 (19:25):
Friend, have a good week talking next Monday.

Speaker 3 (19:28):
Eight twenty seven fifty five KRC the Talk station, don't
go away, Local stories. Maybe take a couple of phone
calls before we get too Ira Melman, who's going to
do a Borders and Immigration empower youse seminar. He's joining
the program at eight forty. Looking forward to him and
him on the show.

Speaker 1 (19:40):
Be Right Back fifty five KRC