Money Monday with Brian James

Episode Transcript

Speaker 1 (00:00):
It's something new.

Speaker 2 (00:01):
That's what Trump does. This negotiate every day, and he's
an extremely small business.

Speaker 1 (00:06):
Man to do. Five KRC the talk station. It's eight
oh six here, fifty five Karsiti talkstation. Every Monday at
this time we could talk to all your financials. Brian
James for Money Monday with Brian James. Welcome back. Brian's
pleasure to have you on as always.

Speaker 2 (00:25):
Good morning, mister Thomas. Good to talk to you too
as well.

Speaker 1 (00:28):
Hope you enjoyed that beautiful weekend. Man, jeez, weather, it's so.

Speaker 3 (00:31):
Weird August, isn't it. It's been not disgusting the entire month.
It's been kind of a nice change.

Speaker 1 (00:36):
It's a really nice change, how Lee. I love it
just seventy If I could keep it seventy degrees with
that beautiful sunny sky and that light breeze all year round.

Speaker 2 (00:45):
Man, anyway, the windows open last night and everything. Isn't
that awesome when you can do that?

Speaker 1 (00:51):
Oh man? Anyhow, And that'll save you money moving over,
you can if you can rely on nature's temperature to
keep your house comfortable, then you won't be spending money
in the HVAC. I'm stating the obvious, But let's pivot
over to money issues. Powell looking like he's gonna do
a rate cut seems to be I don't know, it
can't be set in stone yet. He hasn't announcement, but
all indicators and all the articles of writing about this

(01:13):
suggests that an interest rates headed our interest rate cuts
head in our way.

Speaker 2 (01:16):
Yeah, that's what we're that's what we're hearing, and the
market is pricing that in too.

Speaker 3 (01:20):
So this was coming from the Yeah, this is coming
from the speech from Jackson Hole last week, famous for
being a hole in Wyoming where Paul Volker liked to
fish and that's how they lured him there for a
meeting in the seventies and ever since then we've had
this big event there.

Speaker 1 (01:33):
So just don't try to buy a real estate there.

Speaker 3 (01:35):
No, no, no, yeah, exactly when we're not talking about
reasonable real estate, we're talking about interest rate discussions, although
the trout fishing is probably more interesting discussion there. But
in any case, so Powell's speech signaled openness to rate cuts.
So this wasn't any booming, thundering here's what we're going
to do. It was, you know, things that look so bad,
so maybe we might kind of order lower interest rates

(01:55):
here in the very near future. The market is currently
taking that as a sign that the September meeting will
involve a rate cut.

Speaker 2 (02:02):
That's about it.

Speaker 3 (02:03):
There's about an eighty one percent chance, and you can
look at the way bonds trade and you can see
what the probability is of a rate cut, and that's
exactly what's happening. So about an eighty one percent chance
of a rate cut. Reason being. Powell highlighted that there.
He used the term curious balance between the labor market
and inflation, which that's his whole job. The Fed has
a dual mandate. The end of the day, he's got

(02:24):
two responsibilities. Keep inflation in check and keep unemployment as
high as possible without full unemployment, because that's not necessarily
a good thing either. Both of those things are in
balance right now. I think what he what he's saying
without saying, is that he's worried that tariffs have not
yet had their full impact. He doesn't want to bring
on any more attention from Trump than he already has,

(02:45):
and so he's going to keep quiet about that. But
that's that's the one thing he hints at that that's
still a concern. We just haven't seen the full impact
of tariffs. Well, I guess a lot of the talk
about this interest rate cuts relates to labor markets, and
I have seen cheese. As of the last couple of days,
half a dozen articles about the illegal immigrant crackdown. The

(03:07):
closing of the borders effectively reducing the inflow of illegal
immigrants to nothing, and the ejection of by way of
a deportation of a lot of immigrants has got the
immigrant community afraid because they're afraid of getting arrested, meaning
they're no longer participating in the job markets out of
this fear of being chucked out of the country. Is
that really I mean, is there that much illegal immigrant

(03:30):
employment out there that it has an impact on our
economy to that degree?

Speaker 2 (03:35):
Well, Nebraska seems to think so.

Speaker 3 (03:37):
I mean, there's a lot of fears coming out of
that state that they're going to be requesting assistance for farmers.
And actually Trump has responded to this and talked about
putting some programs in place for farmers who have lost
their workforce.

Speaker 2 (03:50):
So that is a real thing. Is it happening in
a widespread manner? No, not yet.

Speaker 3 (03:54):
But I have to think as much as we were
relying on that for labor. And I think back in
the day of twenty twenty five years ago, we built
a house up in the northern suburbs of Cincinnati, which
was the frontier at that time, and there were a
lot of presumably maybe legal, maybe not, guys hanging out
in front of home Depot just waiting for somebody to
come to them and say, hey, we need work. I
haven't seen that in a very, very long time, but

(04:16):
I do remember there was that that happened everywhere during
that whole housing boom thing. So yeah, it wouldn't shock
me at all if that is bigger than we think.
Because it's also a headline that's not necessarily friendly to
the current administration, right, and we know our media is
definitely picking and choosing based on what they are being
hinted that they should.

Speaker 1 (04:33):
They always choose. You know, it's interesting ripple effect. You
can't go to home depot and load your truck up
with four or five guys and take them over to
your house and have them do the landscaping work. They're
not there anymore. They're afraid of getting thrown out of
the country. Let's say they're illegal immigrants that traditionally do that.
What do you have to do as a home owner.
You're either going to do it yourself or you're going
to hire a contractor a licensed landscaper who's going to

(04:56):
do the job. So that's going to cost you more
money thoughationary reality, that's the reality, and so that's.

Speaker 3 (05:02):
What we're cher Powell. Chair Powell is waiting to see.
He's waiting for those kinds of things. Obviously he's looking
more than just our landscaping, but he's waiting for those
kinds of things to trickle all the way through. So
if we're going to remove this labor supply, that necessarily
has to have an impact. We just haven't seen it yet,
although in some corners we are starting to see inflation
perk up just a little bit.

Speaker 1 (05:23):
Well, and I think of the farming that you mentioned
from Nebraska. Obviously people are needed to pick crops to
get I mean, we always refer to and really I
find it insulting jobs and Americans won't do what We're
so lofty and above everything that we won't do, you know,
manual labor jobs. I thought that was ridiculous. But okay,

(05:43):
if you have illegal immigrants who are willing to work
for a lot less money. Why Because they're here illegally, illegally,
and they're on precarious ground, and their families back in
wherever they came from need the money. Because they send
a lot of money out. That's who's going to do
the jobs. So Americans won't do it for that rate.
But is there a rate which Americans would actually go
out and pick strawberries?

Speaker 3 (06:04):
You know, I'd like to think there is, But talking
to the people that I talk to, I'm not sure
that we are a society anymore that values that level
of backbreaking work the way that we used to. So
I'm going to give a lot of leeway there for
I'm going to say immigrants are far there's more in
it for them. For somebody who's struggling to make something,
they're willing to sacrifice that versus somebody who already has something,

(06:26):
it's just looking to maintain That second person is not going.

Speaker 2 (06:28):
To work as hard.

Speaker 1 (06:29):
Yeah, they're not worried about keeping up with the Joneses
by way of perception, are they?

Speaker 2 (06:34):
No, not at all. That's never a problem.

Speaker 1 (06:35):
Ever, So if you grow up in a silver spoon
in your mouth environment, which really anybody in the United
States does. By way of comparison to third world countries,
which is where a lot of the illegal immigrants come from.
You're never going to get them out on the farm.

Speaker 2 (06:49):
Exactly, That's exactly.

Speaker 3 (06:50):
And we're starting to see this come through too in
terms of how farmers are being impacted and margins are
being squished anyway, So in July of twenty five, corn
and soybean futures fell to about a nineteen year inflation
adjusted low. Production costs of course didn't change, and so
they're making even less. Farmers are spending more on production
than they're actually receiving. So that that is the kind

(07:11):
of thing that is going to circulate through and it'll
surface at some point well. And the other thing that's
creeping into the farming industry is modern technology and sort
of robotic picking of various crops. And there are a
lot of solutions out there that are available, but if
you're going to go that direction, you've got to be
able to afford to invest in it, and I can't
imagine that comes at a cheap cost. Yes, So you're
not talking about the Johnson family farm up the street

(07:33):
that suddenly has robots working the fields. You're talking about
big corporations and honestly many times owned by foreign entities
that are buying up farmland so that they can get
the scale going to put that type of equipment in place.
So at some point we'll be talking about how farm
production is up and everything's wonderful, except it's not employing
people to do it.

Speaker 2 (07:50):
It's just putting more money in pockets.

Speaker 1 (07:52):
And it's going to be the further destruction of the
small farm.

Speaker 3 (07:55):
If it makes the headlines in that manner, I suspect
we will focus much more on the profit of farms versus.

Speaker 1 (08:01):
The people who have been displaced. Well, maybe we need
micro to do a great segment on the value of
well picking crops.

Speaker 3 (08:09):
That would be a great idea, and maybe not worry
so much about the poor, hardworking robots out there.

Speaker 2 (08:15):
Trying to raise their families.

Speaker 1 (08:17):
Exactly. Pause, just a little bit earlier, we'll bring back
Brian James drum roll and a is this a rhetorical question?
Will the market crash or is just pullbacks more with
Brian James after this word for Gate of Heaven summary.
Gate of Heaven Cemetery Catholic Cemetery is serving the Greater
Cincinnati Christian Community for more than seventy seven years, honoring

(08:37):
life on sacred ground. That's what it's all about. Maybe
a final resting place for you consider Gate of Heaven Cemetery,
but maybe a place to contemplate life, relax and maybe meditate,
engage in prayer, think about life from beginning to end.
That's what those beautiful grounds are all about, or at
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have great walking paths, gorgeous trees and landscaping and fly

(09:00):
So pause, reflect, pray, and enjoy the beauty of God's
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To learn more about Gate of Heaven, go to Gateohaven
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Fifty five KRC Are you met here? Fifty five k
r CD talkstation Doing Money, Money with Brian James Freworth

(09:21):
Financial Frightening question. Is a little concerned about this next topic,
Brian James will the market craft suggesting that is a possibility.
It's always a possibility. But I've been reading about this
kind of thing ever since i was a little kid,
and you know, predictions are always out there, but you know,
opinions are like, we all got one, Brian, what's the
story on this one.

Speaker 3 (09:42):
Yeah, that's not that's not referencing opinions. That's referencing something else.
But anyway, yes, we do have all one of those.
Uh some of us too, maybe, but anyway, so, yeah,
so we're starting to hear the rumblings and this is
where we are in the cycle of potential pullback. And
that's just where the voices, you know, kind of get
a little bit louder because we're willing to listen to
him when we get paranoid whenever the market is at

(10:03):
a peak. And if you did not panic in April
when we all freaked out about tariffs and the market
stampeded the wrong direction and then we went, oh, okay,
I guess this isn't that big of a deal and
got it all back and it moved.

Speaker 2 (10:13):
On to higher highs.

Speaker 3 (10:14):
If you didn't panic at that time or any time prior,
you should have more money right now than you've ever
had in your entire life.

Speaker 2 (10:20):
That is a good thing.

Speaker 3 (10:21):
Best advice I can give is do not get married
to that high water mark. It is a mirage We
will step back.

Speaker 2 (10:27):
We always have.

Speaker 3 (10:28):
We stepped back earlier this summer, earlier in August for
how don't even remember, and I don't care, but the
market did pull back a couple percent because it didn't
like the headlines at the time. Three steps forward, two
steps back. So what we're hearing is there's an article
from Chris Wattling, who's the CEO at Longview Economics. Not
one of the big ones, but not one of the
little ones either. But he's highlighting some things that he

(10:50):
sees as historically indicative of a market pullback, such as
unusually low trading volumes, which can mean that investors are
already fully invested that often precedes a sharp decline what
he calls valuation froth, which just means that twenty percent
of stocks are at high valuations, you know, over ten
x of their enterprise value. Single stock call action up
to activity, which is basically just a lot of attention,

(11:13):
a lot of hype on individual and then probably nineteen
other things that he says are going to bring the
next downturn. Now, what I can guarantee is that he
is correct. I guarantee the market's going to pull back.
The question is when we don't ever get to know that.
So we shouldn't spend a lot of time and energy
thinking about it, should we?

Speaker 1 (11:29):
Bran Like so many things, you know, they have an
articles designed to get you all anxious and worked up,
and it's like, well, ay, there's nothing I can do
about it, So why would I get myself get worked
up over something over which I have no control. That's
my primary reaction to things like that.

Speaker 3 (11:44):
Absolutely, and this shouldn't be impacting anyway. The money that
you're going to pay the bills with this month, this week,
even really this next several months, that money should be
protected somewhere in a nice money market fund where you're
currently getting three maybe four percent. Don't get married to
that either, because that's going to come down in September,
but those dollars will be there for you to pay
the bills. That frees up your longer term dollars to

(12:05):
ride the roller coaster of all the goofy things that
mister Watling thinks are going to impact.

Speaker 2 (12:09):
Us in the near future.

Speaker 1 (12:10):
Yeah, the idea that anybody looks at their four oh
one K account is some sort of like it's there
and anytime I need it, I can pull some money
out of it. That's that's a recipe for disaster, Brian.

Speaker 2 (12:20):
It really is. And I do it too.

Speaker 3 (12:22):
I look at it too much when we're on the
upswing because I like to see the number go higher
than it's ever been. But I've been doing this job
for thirty years, so I know at some point I'm
gonna quit looking at it. It'll be like six months
before I look at it again, and then I'll go
in make sure it's rebalanced and so forth.

Speaker 2 (12:34):
But whatever is happening.

Speaker 3 (12:35):
Day to day does not impact myself or my family
here in the short run. That money is for the ten,
fifteen to twenty year timeframe. My shorter term money is
invested very differently well, and.

Speaker 1 (12:45):
In terms of investing shorter term money, if I got
bills to pay, it's never going to make it into
an investment vehicle. Correct my bank account, you know? And
what do you get in a bank account? A point
and a half maybe exactly in your bank account.

Speaker 2 (12:59):
Yeah, that's what. But that's I'm saying, be open minded.
And we've talked about this before.

Speaker 3 (13:02):
If your bank is famous for having brick and mortar
branches on every street corner, they're also going to be
famous for not paying you very much on your depository accounts.
Open your mind a little bit to the online only
ones where they even still big institutions that may not
have branches all over the place. If you if you're
a depositor of one of those banks, you have to
pay for all that real estate, even though you may
not have seen it in the inside of one of

(13:23):
them for years. So just know that that's not where
you're going to get your best yield. You should be
getting at least three percent though, on those cash dollars.

Speaker 1 (13:29):
Yeah, I guess you should. I get just real quick
here we talk about the market value. Does it bear
any connection with old school norms anymore? Brian? I mean
I used to look at a company's earnings potential, what
they own, you know, pe ratios and things, and I
see so many mean stocks being traded, and somebody sort
of like, I just scratch my head and wonder, how

(13:50):
is it that they have any value whatsoever? And just
kind of wonder if the whole market is kind of
that way anymore.

Speaker 3 (13:56):
Yeah, there's a much greater willingness to invest in things
that I don't have a clearly identifiable value proposition. Like
you said, meme coins, meme stocks, things that are just there.
People like them because they like them. They have a
value because people say that they do. I would throw
gold into the Gold used to be the only thing,
the only big thing really that had no measurable calculable value,

(14:18):
but people would just flock to it every now and then.
Now we've got all these other things that attract money,
and it can be really tempting to throw a bunch
at it because you're looking at that saying, why why
do I be all these fuddy duddy dividend producing industrial
stocks when I can own a doge coin and it
goes up a bazillion percent in the short run, Well,
we tend to lose sight of what happens in the downturn.
You really really got to be okay with that roller coaster,

(14:40):
and there will be no way to predict what's coming
and when. Not to mention, the people behind them get
paid off the activity and the frost, not the idea
that it goes up and stays up. They can go
up and down. They're on both sides of it, so
you have to understand where the incentive comes from.

Speaker 1 (14:55):
Amen, and I get the impression of those meme stocks
are a hell of a lot more volatile. They may
go up for a little while, and they go down
and sometimes never go back up again.

Speaker 3 (15:03):
The herd stampedes them up, it stampedes them right back down.
But you can't predict it. Well, I'll tell you what, Brian.
It's always a great conversation every Monday. Money Monday at
Brian James a too five here on the fifty five
Carsse Morning Show. Thank you again to all Worth for
one anding out in this Monday. I look forward to
talking with you next Monday and I hope you have
a great week. Brian, have a good week. Talk to
you next week.

Speaker 1 (15:20):
Thanks brother. Coming up at eight twenty five fifty five
Krcity Talk Station, Johnson's or the Man behind Save Hyde
Park Square. We'll get an update on what's being going
on with the well connected developers. Are they making concessions
that might work. It's on the ballot this November, Hyde
Park ability to choose its own direction as a ballot initiative.
John Zinzer, he'll be on next ipe. You can stick
around fifty five KRC.

Speaker 2 (15:42):
You think you know the odds picture this