Money Monday with Brian James

Episode Transcript

Speaker 1 (00:00):
Anywhere anytime. Take your infote to go. I'm listening to
iHeart Cowered by fifty five krs the talk station, TATO
five the fifty five krs the talk station. It being Monday,
it's that time of week. We do Money Monday with
Brian James Malworth Financial Brian James, Happy Monday. Hope you

(00:22):
had a wonderful weekend. Welcome back to the morning show.

Speaker 2 (00:24):
Yeah, thank you for having me once again. Hope you
enjoyed it as well. We kicked off the football season
with a what I'm gonna call it again, it was
a gift. I'm calling it a moral loss. You know,
we have moral victory.

Speaker 1 (00:35):
That was kind of a morals I started out this
show this morning thanking the Cleveland Browns for giving us
a victory. Jeez, we're our own nurse worst enemy with the.

Speaker 2 (00:45):
Penalties and yeah, the the awkward eye contact that was
made between Bengals and Browns fans walking out of that stue.

Speaker 1 (00:51):
Oh yeah, yeah, yeah, no, no hooton and hollering from
the Bengals side of the equation. And thank you to
the punt to their their kicker. Appreciate that a little
wide and right, which obviously helped us score.

Speaker 3 (01:04):
Well, we will take it.

Speaker 2 (01:05):
We needed it, We'll take it, and it's gonna be
it's gonna be a long season, but hey, we're here.

Speaker 1 (01:09):
Baby wanted an enjoy it while last back in a thousand. Anyway,
moving over to baseball, analogy and a win for the
Reds yesterday too, So we had two home victories, which
was awesome. We were watching both games simultaneously at my
friend's house.

Speaker 2 (01:21):
They're hanging on, hanging on by a thread, hang on
to that bottom rung. You know, we got to pay
attention to two teams. You know, I don't know that
I have the emotional strength for this firm.

Speaker 1 (01:28):
No, you don't. And I think the percentage of the
odds of the Reds actually winning it or like five
percent or something, just like.

Speaker 3 (01:36):
A zero saying there's a chance.

Speaker 1 (01:38):
There is a chance. Hope Spring's e turnal and the
August jobs cut looking worse than they originally anticipated. I
think the Department of Labor suggested that they were expecting
about seventy five thousand additional jobs, but sadly only added
twenty two thousand jobs in August, so disappointing. But is
that a figure that might lead us to a rate cut.

(01:59):
I mean that goes toward suggesting our rate then.

Speaker 2 (02:02):
Yeah, hope springs eternal, but not really in the job
market here. So where where we're looking at is the
US added twenty two thousand non farm payroll jobs. That's
way below expectations because, as we always say, what matters
is what the analyst thought was going to happen, and
how far wrong they were. So was the this is
the slowest monthly growth we've had in the years. Unemployment
up to four point three percent, which isn't this isn't

(02:23):
alarm bell ringing that kind.

Speaker 3 (02:24):
Of thing, but that's a four year high.

Speaker 1 (02:27):
So that's still considered full employment, right, Yeah.

Speaker 3 (02:29):
We're still in the range of full employment.

Speaker 2 (02:31):
And we've mentioned this before but for those who may
maybe kind of new to thinking about all this stuff,
we don't want one hundred percent employment.

Speaker 3 (02:37):
That leaves no room for growth. We have to have
some oil in the engine.

Speaker 2 (02:40):
So really somewhere in the three to four percent unemployment
ranges is usually pretty is acceptable and we can work
with it. It's the trend that matters. So we were
so unemployment did go up just a little bit. If
it rises to say five six percent. Then that's a
different story. But that's not happening right now. However, the
trend right now is unemployment is rising. But to the
question you do you just asked, Yeah, all these things

(03:01):
scream rate cut in September at this point, it would
be a surprise if that didn't happen.

Speaker 1 (03:06):
Well for my listening audience, may consider this a bright spot.
It suppose. It depends on your point of view, But
I like smaller government. I noted the government payrolls drop
sixteen thousand jobs, federal government employment fell by fifteen thousand,
and state government jobs shed thirteen thousand, So maybe the
size of government at least is getting smaller.

Speaker 3 (03:25):
Well, yeah, that's for sure.

Speaker 2 (03:26):
That's the headlines you can't get away from, is how
we're slashing and burning government. And it remains to be
seen whether we're slashing and burning the right things that
maybe weren't impactful at all. I suspect over the next
year we're going to realize that, whoops, maybe we should
have kept that department running. That'll probably happen a handful
of times. But growing pains, I suppose, right, Brian.

Speaker 1 (03:44):
Yeah, And I suppose you can always unring the bell
of firing people. Those job openings are there. If they
pay a decent salaries, someone's going to want to come
fill them. So state of flux we are in. So now,
as you typically point out, Brian James, the market usually
bakes these things into the cake in advance. So with
regard to this expectation of a rate cut bolstered by

(04:07):
this poor jobs report, I read the other day or
at least very recently, that interest rates for mortgages are
at their lowest point in several years anyway, which is
a bright spot for folks maybe considering refining or buying
a house, but still not in that comfortable three percent
zone we were in. So then was the days has
the market baked in the rate cut? And is this

(04:27):
going to be disastrous if they don't really cut the
rates when next time they meet. Where are we on
the rate?

Speaker 2 (04:31):
Yeah, the market has baked in at least a quarter
point rate cut. And that's that's referring to the overall
bond market. That's what you can look at and truly
get an idea of what the of what the general
market thinks is coming as well. As that's been kind
of the chatter from the federal Reserve governors themselves. Now
the stock market has for sure baked it in because
it's up ten percent for the year. And remember we

(04:51):
came out of a deep hole in April and April
we were down as far as about sixteen percent on
the S and P five hundred. That was the initial
panic over on oh my gosh, tariffs are coming again.

Speaker 3 (05:01):
What's this going to mean? And how are we going?
How will we ever recover?

Speaker 2 (05:04):
And then we've eventually the herd stop stampeding and we
kind of let it all go back to normal. So
as we sit here today, the S and P five
hundred is up ten percent for the year. So once again,
if you are somebody who didn't panic during the scary
headlines in April, then you're doing just fine for yourself.
Markets back in an all time high. You should have
more money than you've ever had in your life. If
you gave into that panic, let this be a lesson.

(05:26):
It hasn't run too far away from you. But I'm
referring to people really who some people did this in
two thousand and eight and sat out of the market
for fifteen years and cost themselves one hundreds of thousands,
if not millions, so let this minor one be a
lesson to you that the market will always recover.

Speaker 3 (05:40):
It always has, always will.

Speaker 1 (05:41):
Yeah, it does, and it has, at least for me,
it has over the years. That's right, because because you
never panicked, amazing that works panicked. So when will they
be voting on this rate cut? I know they have
regular meetings. What's the next one?

Speaker 2 (05:56):
Stember seventeenth is the next big meeting. So we've got
what nine days, So mark your calendars, take the day
off of work.

Speaker 3 (06:03):
And watch some c SPAN.

Speaker 2 (06:04):
It won't be on T SPAN, but anyway, look for
that headline for that rate cut, and we'll see what
the market does in response to it.

Speaker 3 (06:10):
But I think based on.

Speaker 2 (06:11):
The numbers we're seeing in terms of what's going on,
I think it's basically a foregone conclusion that we're to
see a rate cut.

Speaker 1 (06:18):
Well, in terms of the tariffs. Going back to that briefly,
if I recall my legal status correctly, and I'm ready
to be standing corrected if I am wrong in my recollection.
But the most recent pronouncement from an appellate court was
that Trump does not have the authority to implement these
tariffs unilaterally. That order on hold I think it's being
appealed to the Supreme Court. If the Supreme Court sides

(06:40):
with the appellate cord and says, sorry, Donald, you don't
have the authority to unilaterally do that, that means all
the tariffs and trade things that he's negotiated so far
go up and smoke, don't they.

Speaker 2 (06:51):
Well, yeah, So the US Court of International Trade not
too long ago ruled that those Liberation Day tariffs were
exceeded his authority and were there for illegal So now
there's an appeals court talking about it. So what's happening
now is that we're delaying enforcement of them until about
October fourteenth of twenty five, and so obviously this year.

(07:11):
What's happening now though the tariffs are still in effect,
so we're not enforcing any of that decision yet. There
is a Supreme Court battle coming up ahead and potential
arguments as early as November of twenty five, and so
Scott Pissent warned that if the Supreme Court upholds these
lower court rulings which struck down the tariffs, then the
US could face refunds and the tens of billions of
dollars half of all the tariffs collected since Trump took office.

(07:33):
That'll put some pretty heavy pressure on the federal budget
because remember, we haven't exactly cut all the spending we
said we would. Yes, we've laid off employees, but you know,
go figure, we haven't trumpeted to the heavens how much
savings that we're having. Those dollars seem to be going
in another direction, and I hope we really don't have
to go find them under the couch cushions in October November.

Speaker 1 (07:53):
Well, you know, I I guess my big curiosity is
what do you how do you think the market's going
to react? I mean, you talk about it's being up
ten percent this year, which is wonderful. But if all
these tariffs go the way of the DODO immediately the
light switches off, is that going to have a profound
impact on the market.

Speaker 2 (08:10):
We'll have an impact, for sure, because the US government
is the largest customer of anybody in the face of
the universe, because we throw the most money around, so
and if that money gets pulled out of the system
and gets distributed back, there will be an initial hit.
But at the same time, the dollars still exists. They
don't just go away. The US will have simply lost
control of them. But if you have, the business still runs,
the world still turns. If you have a diversified portfolio,

(08:32):
then what you might see, Brian is a little more
of the same which we're trumpetting the success of the
S and P five hundred. The American stock market being
up ten percent. International markets, both emerging and established are
all up twice that. So if you've got a diversified portfolio,
you're looking at a chunk of it being up twenty
percent or twenty one percent, as well as the US
market's being up ten All of that is good.

Speaker 3 (08:53):
The money will stay in the system.

Speaker 2 (08:55):
But again, if you're somebody who has hitched your wagon
into just the American stock market, you may want to
think again.

Speaker 1 (09:00):
Yes, well again, That's why I have a financial planner,
because this is all like the peace of God for me.
I leave it in the hands of experts day and
just ignore it, generally speaking, and that is that for
thirty years, and you'll be fine. That's worked out. I'd
say it has worked out to my advantage, you know it.
I don't have any sleepless nights. I know I lost
a truckload of money when the markets foul you know

(09:21):
the housing burst bubble and the twenty twenty COVID but
all that I lost, I never looked at it.

Speaker 2 (09:27):
It becomes those types of headlines, those types of things
become a catalyst. Somebody's going to figure out a way
to make money off of it. Banks recovered, but they
were bailed out, and this has been We don't like bailouts,
love to never have them again.

Speaker 3 (09:38):
But at the same time, uh, that's how we recover.

Speaker 2 (09:40):
We allow, we allow business to continue on and and
just get.

Speaker 3 (09:45):
Over the idea that we have these short term wabbles.

Speaker 1 (09:47):
All right, well we'll passman, We'll bring Brian James, because
I know the Democrats want to pack the Supreme Court
because they're not getting what they want. Is it legal
for Donald Trump to fire Fed governor at Lisa Cook
in order to bring about what he wants, which is
a change of the guard in favor of folks who
will cut the interest rates A fifteen more with Brian
James after these brief words.

Speaker 4 (10:07):
Fifty five KRC or twenty nineteen to fifty fou KRC
DE talk station, Happy Monday one more second favorite Fuddy Monday,
Brian James, Kurt Hartman Attorney Hartman is going to join
the program after Brian will get an understanding of this
upcoming hearing on the fight records.

Speaker 1 (10:23):
Why did the guy in the July late July brawl
in downtown Cincinnati get a citation? Kurt Hartman is wanting
to know. He's asked for the records and the city
refuses to release them. So we're gonna hear from Kurt
after Brian James all Right. Federal Reserve Act, apparently established
in nineteen thirteen, gives the President of the United States
the power to remove FED governor's quote four cause close

(10:45):
quote question, is there a cause for firing FED Governor
Lisa Cook? I know he's Inbroid in a legal battle
over that. She's fighting to keep her job, but she's
also fighting against criminal allegations that she lied on her
mortgage applications. So we got a shenaniganst declaration. Question, if
she lied on her mortgage application, is that sufficient cause?

(11:06):
Does Donald Trump even need something like sufficient cause? Where
are we on his efforts? Well, I'm drawing a parallel
to packing the Supreme Court. Brian and did that going
into the break, but he does one. He even said it.
We'll have a majority very shortly, so that'll be great.
We have to get the rates down a little bit.
So that's what he's cutting for his way of motivation.

Speaker 3 (11:26):
Yeah.

Speaker 2 (11:26):
So, and unfortunately, the reality there's something real here. There
is apparently smoke near this fire or other way around.
But anyway, there is something to this, and the allegations
are and here's why this matters. The allegations are that
she claimed two primary residences. That gives you a little
bit of a better deal from any bank. So if
you have a home, your primary homes here in Ohio
and you're a snowbird, you bought a second home in

(11:48):
Florida and they're both mortgage, then you have a higher
interest rate, probably significantly higher on that second one because
it's an investment property. That is what she is alleged
to have been to have done. And of course President
Trump doesn't really requies due process. He just kind of says,
this happened, and there's an accusation, and that's good enough,
and I'm going to move forward. And he doesn't really
care a whole heck of a lot. So yeah, I mean,

(12:08):
if this is real, then yeah, you went your federal governors,
your federal Reserve governors thinking a little bit differently, so
she did file a lawsuit. We haven't really heard about
this accusation at all since it initially came out. It's
all been about the Republicans are trying to stack the
deck on the Federal Reserve, just like they've done the
Supreme Court. But we haven't heard about whether this is legitimate.
Something tells me it's not going away anyway, even if

(12:29):
it's determined she did not actually do this. Now that said,
there's applications out there. There are paper forms that say
things and have certain box checks for these two mortgages.
So somebody pulled the darn things out and tell us
what they say, and then we can know whether there's
reality to this. I'm not sure we're ever going to
hear that though, well.

Speaker 1 (12:43):
I mean, the Department of Justice and a referral letter
said that within a two week period, she obtained a
mortgage on her home in Michigan claiming as a primary residence,
and then a second mortgage on her home in Georgia,
also claiming it as a primary residence. I mean, that's
what the document State Department of Justice has, you know,
I suppose that hatch them to its referral letter. So
it sounds to me like they probably got her dead

(13:05):
to rights.

Speaker 2 (13:05):
Yeah, I think I think the argument will be intent,
wasn't thinking, filled it out too fast, just checked a
box one way versus the other, and that was the
end of it. Whether that holds water, who knows, but
that will be the argument that they claim. So what's
going on here is now that we have we do it,
there is widespread support for independence. So on September second,
there was an open letter signed by almost six hundred

(13:26):
economists and Nobel laureates firmly backing Cook, which, on one hand, okay,
if she really did this, and that's a little bit questionable.
But on the other hand, what they're really shining a
light on is, you know, is are we really attacking
the Fed's independence here?

Speaker 3 (13:40):
And is that what we want as a country.

Speaker 2 (13:42):
And if that's really the case, then are we one
hundred percent certain that absolutely every FED governor, including those
that support the president, have they been raked over with
a microscope as well? Is this being handled evenly across everyone?
And I'd throw that out to you know, lots of
different places, because all of a sudden, it does seem
like one side is all of the criminals.

Speaker 3 (13:59):
On the other side nothing but angels, and.

Speaker 1 (14:00):
A really struggled to buy that. Oh well, you said
to why there's enough bad going around on all political stripes. Well,
the judge that ruled on this earlier said, you have
to give Donald Trump deference on this, so you can
review maybe whether or not the cause is there, but
you have to really kind of defer to the president's
belief that there was cause there. So there's that, But

(14:21):
then they could find that there actually was cause here,
and then they don't have to they say, render a
controversial opinion on the scope of his powers. So a
couple of different ways out of this. But I think
at least based on the reporting on this, it looks
like Donald Trump's going to be successful in his efforts
most likely.

Speaker 4 (14:37):
Yeah.

Speaker 2 (14:37):
So, yeah, So the federal Reserve is designed to be
independent of politics and stuff like this. So governors served
these fourteen year terms and the president can remove them,
as you said, for cause, and this would appear to
fall under that under that category. So we'll see if
there's any way to you for the other side to
kind of hang on to this little spot that they've
got there.

Speaker 1 (14:55):
Fair enough, I think we all can agree why he's
actually doing it, though probably less to do with her
mortgage appliciations and everything to do with their position on
raid cuts.

Speaker 2 (15:03):
Well that in midterms, right, we're coming up on midterms,
So this is President Nixon did the same thing. He
leaned really really hard on the FED chair back then
Arthur burnch to keep rates low.

Speaker 3 (15:12):
That result.

Speaker 2 (15:13):
He wanted that because he wanted a good showing leading
into the midterm elections. He never had to pay the
price for this, of course, because we impeached him shortly thereafter.
That led to what became known nowadays as stagflation. That
was the original arbitrary forcing of lower interest rates, because
he did get Arthur Burns to bend the knee back then.
But that did lead to what we know now as stagflation,

(15:34):
and that couldn't get fixed until Paul Volkler stepped in.
And this is all fascinating Federal Reserve history, fasting absolutely,
but it.

Speaker 3 (15:41):
Does hit you in the wallet. That's why we talk about.

Speaker 1 (15:43):
Fat in the wallet. And I'm old enough to remember
how bad things were back in the late seventies and
early eighties with interest rates. Brian James keep looking out
after feet people's money. Appreciate all worth loaning out every
Monday for these discussions, and I'll look forward to next Monday,
another diition of money. Monday, we will.

Speaker 3 (15:59):
Talk to you down after Nunny's stunning Bagles Win. Who
there you go.

Speaker 1 (16:03):
He's all the help we can get from opposing team
eight twenty five. Right now if you five k site
Talks Station Kurt Hartman, He's got a hearing for the
brawl records today. City solicitor, he claims is illegally withholding
records regarding the beat down. Kurt Hoffman. Next, stick around
fifty five KRC the SIMP