July 9, 2025 • 38 mins
Chuck Zodda and Marc Fandetti discuss two Kevins battling to be the next Fed Chair. Home sellers have gotten tired of cutting prices. Many are yanking their houses of the market. Americans are eating cheaper. What does that mean for the economy? Why carmakers need to bring back buttons. Trump sends more letters dictating high tariff rates around the world.
Mark as Played
Transcript
Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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(01:05):
Zada and Mark Fandetti.
Speaker 2 (01:11):
Chuck Mark and Tucker with you, and markets are up modestly,
giving up some of their gains from earlier in the day.
As we continue through the morning, the Dow Jones Industrial
Average is up eighty five points about a quarter percent,
S and P is up fifteen points about a quarter percent,
and the NASDAG up ninety five points about half a percent.
All these only up about a third as much as
(01:34):
they were shortly after the open. The S and P
has gone for being up about forty points down to
you know where it is now, So you still have
some positive momentum in stocks today, but questions about you know,
is it going to be able to you know, pop
to new all time highs again, or you know, we're
gonna give some of those gains back here, So we'll
see what ends up happening. Ten year treasury yields moving
(01:56):
down to touch, with the ten year at four point
three percent, down three point four basis points. Oil West
Texas Intermediate off three cents a barrel to sixty eight
point thirty not much real movement there, and gold today
is up four dollars announced to thirty three twenty and
ninety cents. Quite honestly, this might be the most boring
(02:18):
week of the year from a news and earnings perspective.
The only thing of any note this week we get
weekly jobless claims tomorrow. Other than that, let me know
if any of these earnings get you interested today.
Speaker 3 (02:32):
So tomorrow's Delta, right tomorrow is Delta.
Speaker 2 (02:36):
Which again, it's a twenty nine billion dollar company. Like, yes,
like they file a lot of planes and stuff, but
as far as like Bell Weather for everything, Yes, thirty
seconds today, I'm looking at this. I pull the earnings
list from a website called Trading Economics. The only company
that is listed as reporting today in the United States
(02:59):
has a market cap of two point seven billion dollars
and is just called as AZZ. I don't know what
they do, I don't know where they're from, but as
is reporting today. So there's that.
Speaker 3 (03:18):
It's a hot dip galvanizer, Hot dip galvanizer. Can I
get two metal coatings company?
Speaker 2 (03:24):
Oh so it's not like a dairy queen situation. No,
not not that kind of dip. Okay, gotcha? Anyways, we
got a Wall Street Journal exclusive that came out this morning.
They're actually late last night at nine pm and the
title on it is too Kevin's Battle to be next
Fed Chair in Trump's Apprentice style contest. Now, we've actually
(03:48):
been able to get some some early footage from this,
and I'm gonna have Tucker play it now just so
that we can get a little bit of an inside
look here, what man So obviously that's you know, from
(04:15):
Mad Max Beyond Thunderdome, But this is what this feels like.
It's two Kevin's enter, one Kevin leaves is basically where
it seems like we're heading now, Mark, I'm trying to
just think about this from a few different perspectives. The
first is it would seem to me that when picking
(04:38):
a fed chair, one of the first things that you
would look for is relevant monetary policy experience. Is that a.
Speaker 4 (04:46):
Depends on what you're I think not necessarily in economic models.
I think it's optimal to pick someone who will behave
like a strict is this gonna sound a little technical,
but it's it's perfectly understandable. It's plain English. You want
a strict inflation and you want someone who targets inflation monomoniacally.
I'm phrasing it a little differently than monetary policy economists would,
(05:07):
but someone who's concerned mostly about inflation outcomes have been
shown to be best. When your head of central bank
we call it the FED, ECB is Europe's name for it,
Bank of Japan, et cetera. They all mean the same thing.
You want someone who is more conservative than your politicians are,
and the key example that, of course is Paul Volgar.
Speaker 2 (05:28):
So we've got the two Kevins, Kevin Hassett, who is
the head of the Council of Economic Advisors, and Kevin
Warsh who Worsh is not at the FED currently.
Speaker 1 (05:38):
Is he.
Speaker 4 (05:38):
I think he's back at Stanford, is he?
Speaker 2 (05:40):
But previously was at the FED for a number of years.
And so just if you're looking at like the qualifications
of the two, it would seem that Worsh is eminently
more qualified to the PhD.
Speaker 4 (05:53):
I don't know about Warsh. I like Warsh personally. He's
a hard money guy, meaning he puts a lot of
weight on keeping inflation low and stable relative to goosing output,
which is where central banks get into trouble like our
FED did in the nineteen seventies. But Hasset's the more
accomplished economist. I don't know if Worsh could read a
(06:13):
modern paper in economics candidly. Maybe he can. Maybe I'm
being unfair to him. I just don't get how somebody
without graduate level training could. Hasset can. He's a he's
a respected researcher. He's carrying a lot of water for
the guy he works for now. But that's normal.
Speaker 2 (06:28):
We all do that, everyone everyone.
Speaker 4 (06:31):
I like what Warsh has said in the past. You
didn't ask me my opinion. Hassett is objectively speaking, probably
better trained.
Speaker 2 (06:39):
Interesting I wouldn't. I wouldn't have.
Speaker 4 (06:40):
I don't think Worsh has a master's or a PhD
in econ.
Speaker 2 (06:43):
He might haven't figured his experience at the FED would
be more relevant in this case.
Speaker 4 (06:47):
I think you have to understand when your PhD staff
comes to you with the results of a model, you
have to be able to push back and say, let's
break open the model and find out why it's telling
us what it is. Hasseck can probably, I don't know
how long it's been since he did serious work. He
could probably do that. I don't know that Warsh can.
He might have a problem similar to Powell's, and that
(07:07):
you become very dependent on staff.
Speaker 2 (07:10):
Let's get to kind of because I think Powell's kind
of instructive on this in my thinking in that Powell
when he was put into his position, he was put
there by President Trump during his first term and subsequently
was asked to continue on by Joe Biden during the
Biden presidency. And so I guess the question that I
(07:32):
have is, aside from just wanting to have the title
of FED Chair, this seems like a really difficult position
to be going into because on one hand, it's very
clear that the President wants lower interest rates, but when
it comes to the FED actually going and putting lower
(07:55):
interest rates into effect and how they make their decisions,
it is not simply the decision of one j Powell
or Kevin Hasseen or Kevin Warris who does so it's
the FED Open Market Committee that decides what to do, yes,
And so I guess what I see here is a
scenario where whoever is coming in is going to be
(08:16):
viewed rightly so as someone who is going to try
to lower interest rates because that's what the President is
telling them to do. I know that we talk about,
you know, FED independence, but it's pretty clear that President
Trump wants someone who is going to push for lower rates.
And by the way, when you hear both Hassett and
wars talk right now, the only thing they talk about
(08:39):
is we need to lower interest rates. So they are
campaigning for the job right now as we speak.
Speaker 4 (08:45):
They may believe that there's actually a good case for it,
But what sure happens when the facts change and they
have to raise interest rates at a time when it's
uncomfortable to do so. Every FED chair is faced with that.
Speaker 2 (08:56):
And I think this is the piece that I think
is going to be challenging for who ever ends up
in that role, is they're going to be faced with
either the other eleven members of that committee coming from
a different place than they are potentially, or the President
not being happy with them because they're not following through
on what they've talked about over the last several months.
Speaker 4 (09:18):
If you look at the FED chairs since the end
of in the modern era, the end of the war,
end of World War Two, with the exception of I'm
just gonna go Martin, Martin Burns, Miller, Volker, Green, Span, Bernanky,
Yellin Powell of the I think I got them all there.
Speaker 2 (09:42):
Yeah you did, Okay, I thought you were saying with
the exception, and I'm looking, I'm sorry, I.
Speaker 4 (09:46):
Want them how many of those people survived, got out
of that job with their reputation burnished, intact, even in
green Span got out of it with his rep intact
but not unsullied.
Speaker 2 (09:58):
He's no, green Span deserves more for maybe go ahead.
I know, I'm not.
Speaker 4 (10:03):
I don't even want to get into that, but.
Speaker 2 (10:04):
We actually can we talk about it a little bit? Sure?
Speaker 4 (10:07):
Sure, sure, go ahead.
Speaker 1 (10:08):
Sorry.
Speaker 2 (10:08):
So there's two things that I think green Span deserves
a little bit of blame for. The second one is
going to be surprising to people because it happened after
his watch. Actually. The first is obviously tech bubble and
the subsequent popping and how things were handled there. You
could even make the case that wasn't so much a
green Span thing, it was more a fiscal thing.
Speaker 4 (10:23):
Was nobody thought that he should have done more than
he did.
Speaker 2 (10:27):
To be honest, the place that I will go to
and this is not a monetary policy thing necessarily, but hey,
you're Alan Greenspan. You know you're still you know, the
chairman of the Federal Reserve. Buck stops here is kind
of my thinking. One of the major reasons for the
financial crisis was changing. Was regulation that changed under green
(10:49):
Span that required less collateral for highly rated debt that
was securitized, and you can basically draw straight line from
that to the financial crisis. He should have been more prescient.
Speaker 4 (11:00):
A lot of people take blame for that, probably I Well,
guess what I wanted to say is of all those
names that I ticked off, how many came out of
there with a better reputation than maybe Janet yellin vulgar vulgar?
Certainly Stirling he's the gold standard. But it's Vulgar is
Zeus and everybody else is like a three tiered down
whatever they call them demons in Greek mythology, Like there's
(11:23):
vulgar and then there's everybody else, and it ain't even close. No,
It's my point is it's it's a really hard job.
You're not not only are never gonna please everybody, you're
not even gonna please like most people, some of those.
Speaker 2 (11:34):
Kind of like being Speaker of the house, like it's
the last job you have before you go on the
speaking circuit. Yeah right, you know, it's the lifetime achievement award,
and it's you're just not going to be liked by everyone,
because like that's it's your batman. You either die the
hero or live long enough for you know, people to
turn you into the Villain's kind of how it is, right.
Speaker 4 (11:56):
That's like, I haven't thought about central banking that way.
Speaker 2 (11:59):
That's kind of how it is. The head of the
Fed is batman.
Speaker 4 (12:02):
I mean, you're you're always making decisions in the midst
of a fog of noisy data. You're you're gonna get
nearly half of them wrong.
Speaker 2 (12:11):
Well, and no matter what decision you make, you get criticized.
When interest rates were heard, all you heard during the
twenty tens was oh, no one can make any money
on their savings, like it's it's hurting seniors. I'm not
saying this isn't true. I'm just saying this is what
people said. It's like, oh, like you can't earn any
interested banks anymore, blah blah blah blah. It's pushing people
out on the risk curve. YadA, YadA. Now all that
(12:33):
you hear is, oh, it's so expensive to buy a house.
No one can afford real estate. You can't say both
of those things all the time, Like you can't just
there's no mythical right level for rates where you can
earn enough interest and it's cheap enough to buy a house.
It's something has to give.
Speaker 4 (12:51):
Satisfying the dual mandate is hard enough. If we make
at a tripart tight mandate where the third part is
Trump and not incurring his wrath, it becomes absolutely impossible.
They're gonna be getting hit by Elizabeth Warren on the left,
who wants rates a lot, by some hard money Republican
or somebody like me on the right, sure, who wants
(13:12):
them to pursue inflation production more aggressively. And then you're
gonna be getting hit by Trump and who knows what
it is.
Speaker 2 (13:18):
And then all of us who are just yelling at
a chaotic whatever.
Speaker 4 (13:23):
Yeah yeah, yeah, right.
Speaker 2 (13:24):
So I gotta say, I really don't think i'd like
to be fed chair, So I'm taking myself out of
the running.
Speaker 4 (13:32):
Well, even if you're terrible at it, though you could
cash in after your stint.
Speaker 2 (13:35):
Oh yeah, I mean, you get to get craft for
showing up for twenty minutes. It's fine, it's a good deal.
But having said that, no, I don't need that. Tucker.
You can you can be my emissary to the Fed.
You can, you can handle good. I don't pay you
anything forget No, you just show up. You get steaks.
(13:56):
Let's take a quick break. When we come back, We've
got right after this.
Speaker 1 (14:02):
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Speaker 3 (14:41):
Time for trivia Here on the Financial Exchange and on
this date. In nineteen fifty six, Dick Clark appeared as
the host of a local TV show in Philadelphia, leading
to his becoming America's forever ageless teenager. Trivia question today,
what was the name of that local Philadelphia TV show?
Once again, what was the name of that local Philadelphia
(15:02):
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to text us at six one seven three six two
thirteen eighty five with the correct answer, and you win
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(15:24):
dot Com.
Speaker 2 (15:25):
Got a piece here from market Watch. The headline on
is home sellers have gotten tired of cutting prices, so
they're yanking their houses off the market. And if you're
listening from you know, up in the Northeast where our
show is based, this is not really a thing that
you see a ton just because inventory in the Northeast
and in the Midwest is still well below June of
(15:47):
twenty nineteen. So if you're looking comparing this kind of
apples to apples like June of twenty five to nineteen,
most of the Northeast is still like forty percent below
June of nineteen. Levels the Midwest is in a similar boat.
Speaker 4 (15:59):
Uh.
Speaker 2 (16:00):
Even as you you know, get out to you know,
places like you know, Utah and places like that, you're
still in a decent spot in the southern part of
the country and now pushing out to much of the
West as well. You've got inventory levels that are either
at or well in excess of twenty nineteen levels. Florida
(16:22):
is an example, currently running twenty eight percent above June
twenty nineteen levels, Texas thirty three percent above, Tennessee, thirty
percent above, Colorado thirty four percent above, Arizona twenty eight
percent above. And so you've got falling prices that sellers
are not willing to take, and so they're yanking their
properties off the market rather than cut them. You're still
seeing a high number of price cuts, but there is
(16:45):
all kinds of mess in the housing market in much
of the country right now, and so it's something where
the data is really pointing to two things that are
going to happen. Either you're going to have to see
prices fall further or inventory is going to have to
be pulled from the market in order to support prices.
And you're seeing a combination of those two things right now.
(17:07):
But you still have more new inventory coming on, so
inventories are growing overall, even as people are pulling listings
that have been sitting for months on end. At this point,
the housing market is not in a good spot in
much of the country right now. Your thoughts, Mark.
Speaker 4 (17:21):
Ye, how many of these delistings quickly get listed again quickly.
This is not they're not following individual people here listings
over time. These are just aggregates. So it could be
that that a good fraction of the say fifty percent
rounding up of the delistings that this article says occurred
in May year over year, we're quickly relisted the following month.
(17:44):
We don't really know if they're.
Speaker 2 (17:46):
No, we don't know. And some of this is just
like trying to keep a property fresh, where you okay,
you pull it for a few months and then you
list it again.
Speaker 4 (17:51):
And you're firing realtor or something and exactly. But what
we are seeing is throughout the southeast part of the
country there are some real issues including one of the
things that's starting to crop up there is, for depending
on the market you're in, if you were buying in
twenty twenty two in kind of that Austin, Texas area
or twenty three in parts of Florida, kind of that
(18:14):
Cape Coral area, you're starting to see an increasing number
of properties that have negative equity. And this is a
problem obviously if you are trying to sell simply because
it means you have to pay a bunch of money
in order to sell your property then, and so that
there are some real issues that are starting to pop
up in some of these markets. At this point, it's
(18:36):
not going to cause anything close to what we saw
in two thousand and eight, Like it's not a housing
Cristi issue, because this is not an affordability driven And
when I say it's not an affordability driven problem, it's
not people who are unable to afford their mortgage payments.
Home equity levels in general are very high. Mortgage payments
relative to incomes as a whole are pretty manageable. But
(18:58):
this is something where the housing market has all kinds
of wrenches in its gears right now, and it's going
to take quite a bit of work to try to
get it, you know, moving again, just because prices for
new construction are completely out of whack with where prices
are on retail the resale market, and so I just
(19:18):
don't know how this squares away easily. It might be
a year or two of slog before this thing, you know,
gets moving again consistently.
Speaker 2 (19:27):
Let's take a quick break. When we come back, we've
got the trivia answer and Wall Street.
Speaker 1 (19:31):
Watch, bringing the latest financial news straight to your radio.
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street Watch. A complete
(19:53):
look at what's moving markets so far today, right here
on the Financial Exchange Radio Network.
Speaker 3 (19:59):
Market territory today with the new round of terror threats
and a deadline delay to August first. In addition, President
Trump said he would impose fifty percent tariffs on copper
and a levy of up to two hundred percent on
pharmaceutical imports over a span of a couple of years.
Right now, the Dow is up by a tenth of
a percent, or sixty nine points, SMP five hundred up
(20:21):
nearly three tenths of one percent, seventeen points higher, NASDAC
up over half a percent higher one hundred and thirteen points.
Russell two thousand is flat at the moment. Tenure Treasure reeled,
pulling back four basis points now at four point three
seven percent, and crude oil up about a quarter percent higher,
training at sixty eight dollars and fifty one cents A barrel.
(20:43):
Breaking news out of social media platform X this morning,
where Linda Yakarino announced she is stepping down from her
role as CEO after two years. Meanwhile, according to Bloomberg,
Meta purchased a minority Steak and Eyeware giantess Lord Luxade
me as the Facebook parent already partners with the company
to make ray Band smart glasses. Meta shares are up
(21:06):
by about one and a half percent. Separately, Bloomberg also
reporting that energy company AES was exploring a potential sale
amid interest from infrastructure investors, that stock jumping over sixteen
percent higher. Elsewhere, several reports say Starbucks has drawn bids
for a stake in its China business. CNBC said bids
(21:27):
valued Starbucks China at up to ten billion dollars. Starbucks
now dipping after trading higher in earlier trade and earlier
this morning, chip in Ai Giant Nvidia became the first
company to hit four trillion dollars in market cap, with
its stock up over two percent today. I'm Tucker Silva
(21:47):
and that is Wall Street Watch and the trivia question
we asked in the previous segment, what was the name
of the local Philadelphia TV show hosted by Dick Clark
that would be Bandstand. One year after Clark took over
hosting duties of Bandstand, the show was picked up by
ABC to be aired nationally and the name was changed
(22:08):
to American Bandstand. Tom from the gun Quit Main is
our winner today, taking home a Financial Exchange Show t shirt.
Congrats to Tom, and we play trivia every day here
on the Financial Exchange See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:23):
We got a piece here from Barons. It's titled Americans
are eating cheaper. What that means for the economy? What
does it mean?
Speaker 1 (22:33):
Mark?
Speaker 4 (22:34):
I don't know exactly. There's a bunch of anecdotes here
about people spending less, particularly on high end restaurants, and
that may bode ill for spending overall, which is sort
of a common sense deduction. I guess people are shifting
toward cheaper ways to get the nutrients that they need.
Is a very I guess, cold and clinical way of
looking at it. Sure, Uh should we buy that? I
(22:57):
don't know. I'm looking at as anybody can do it
is Google personal consumption expenditures and food category specifically, and
the Saint Louis Fed's charting tool comes up and you
can manipulate it and you'll see there that spending on
food is actually increased, it's leveled off lately, but been
increasing steadily year over years since twenty twenty four. I'm
(23:20):
not getting into how people buy their food, and it
might there be something to buying less of it at
high end restaurants. Maybe maybe they're just sick of it
paying a lot and tipping a lot and they want
to eat at home more. I really don't know, but
I see nothing in the trend growth rate of spending
on food over the past few years to suggest that
(23:41):
that's changed again. How they spend that might be different.
Speaker 2 (23:46):
It seems like. And this is just talking about what
we're seeing from publicly traded companies in the restaurant space
and in the grocery space. We can talk about kind
of what they're telling us. There's definitely a volume issue
at a lot of publicly traded restaurants. We're seeing declining sales,
declining traffic. Whether you're looking, you know, McDonald's, Wendy's, Chipotle,
(24:08):
I think had something Tucker who was the one that
was up like thirty one percent? It wasn't Applebee's, but
it was, uh Chili's, Chili's who is you know? Apparently
people are finding great value at Chili's, I guess because
their sales are through the roof, but there's a lot
of there are a lot of people in that space
that are saying, yeah, there's some problems that we're not
seeing the traffic coming through the way that we used
(24:29):
to in the speculation is Okay, people are you know,
trading down or you know, eating more meals at home.
Maybe like that that could be something that's happening. But
I guess in terms of like does this mean anything
for the US economy, it means something if that spending
is not being replaced elsewhere. So we've we've also talked
(24:51):
about how we're seeing not just anecdotes but data stories,
Like you go through just about anything that airline bookings
and hotel booking are down, and not just you know, hotel,
but airbnb as well. Like you're seeing this across the board.
There's less expensive travel that's happening, and less distant travel
that's happening. Okay, that could be bad for the US economy,
(25:12):
but maybe it's because people are buying a whole bunch
of other stuff and the spending is just shifting around
and moving to a different place.
Speaker 1 (25:19):
Yeah. Maybe.
Speaker 2 (25:21):
So I don't think you can necessarily draw anything good
or bad or ugly from it. It's just something that's
happening right now, and we don't really know anymore. And
if we, you know, had a dime for every time
we predicted recession because of one bad thing happening that
didn't turn out to be a recession, you and I
would no longer be working. We would be counting our dimes,
(25:42):
all billions of them.
Speaker 4 (25:45):
One thing that came out of this not related really
to the article, which I didn't find that helpful, But
these people have to crank out stuff every day, so
they reach much like we do, for stuff to sort
of fill their required content space with Spending on food
is a percentage of overall spending. In the nineteen fifties,
we spent on average twenty cents of every dollar of
(26:06):
overall spending. Now on food, that number has been about
seven percent. It leveled off at seven percent about twenty
years ago, and that's where it is sitting.
Speaker 2 (26:16):
Tacked up a little bit like twenty one and twenty two.
And I think that's what made people a little bit
upset back then.
Speaker 4 (26:21):
Yeah, yes, yes, you're absolutely right, it did, and since
has receded back to it's what appears to be stable
for until the structure of the economy changes, people's preferences change,
stuff like that what appears to be a relatively stable
level in the mid high single digits. I had no
idea that that was the case. That one out of
every five dollars we spent in the nineteen fifties was
(26:42):
on food, and it's now less than half that amount.
Speaker 2 (26:45):
I believe economists would call that an increase in the
standard of living.
Speaker 4 (26:48):
They call it an increase in your real income.
Speaker 1 (26:50):
Yeah.
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Speaker 2 (27:50):
Why carmakers need to bring back buttons. This is a
piece from the Financial Times, and in the aftermath of
the release of the Tesla Model three, seven or eight
years ago, you saw car companies around the world just
go nuts, being like, oh, all we need are touch screens.
We can get rid of all the buttons. And it
turns out that cars without buttons, people don't really like
(28:10):
them because when you're driving the button lets you have
that tactile sensation of oh, I'm turning the air conditioning
knob three clicks this way, or I push the you
know this button here you can feel without looking. With
the touch screen, you have to look at Unfortunately, when
you're looking at the screen instead of at the road,
it often causes accidents. So it's kind of a safety
problem in addition to just being really frustrating when you
(28:32):
think you're turning up the AC and instead volume on
your car goes through the roof. So you've got automakers
that are now starting to bring back buttons. In quite honestly,
I think that the optimal thing, as it often is,
is going to be some nice, little convenient marriage of
some touchscreens and some buttons. Because there are some things
where you don't necessarily need a button because you're not
using it that often that frequently and it's not that
(28:54):
important to operation where you can have it on a touchscreen.
There's other stuff that you're touching more often and you
want a but for that, And so, like most things,
it's neither of the extremes. It's somewhere in the middle.
That's probably the right decision to me.
Speaker 4 (29:07):
Reminiscent of the BlackBerry versus iPhone keyboard debate. I prefer
the tactile keyboard. I still look for them. I'm convinced
somebody's going to start offering them again.
Speaker 2 (29:15):
I do wish someone would.
Speaker 4 (29:17):
You can buy a BlackBerry. They just don't support the
operating system, so you could take that. Oh I'm sorry.
So they won't get updated, the software won't get updated.
Speaker 3 (29:25):
They still exist, they're not making them anymore.
Speaker 4 (29:28):
But if you I learned this just by going on Amazon,
like any idiot, I guess could, you could buy them.
Speaker 2 (29:33):
But they're not supported like the old ones from like
two thousand and eight.
Speaker 4 (29:35):
No, no, no, they were updating them through only a few
years ago.
Speaker 2 (29:39):
Didn't know that. Neither did I.
Speaker 4 (29:41):
But you'd be crazy to buy it because it doesn't
nobody is supporting it.
Speaker 2 (29:45):
Does it matter if no one's supporting it, because I
bet no one's trying to hack it either, like no
one even knows they exist.
Speaker 4 (29:50):
But apps are getting more sophisticated in demanding you're not
going to be able to keep up with them, and
maybe making a several hundred dollars investment on something that
could be incompatible with the latest version of whatever app
you use is not a good idea. That's the conclusion
I came to interesting the other thing about cars buttons.
It sounds like it should be cheaper to use the
touch screen, but it's not right to replace a touch screen.
(30:12):
You gotta replace the whole thing to replace a button,
like any tech can. I was gonna say, any idiot
again to use myself as an example, could probably do
with the right tool. So there's it seems to me
they're more robust the old the old way a dial
a button is opposed to swapping out a big TV in.
Speaker 2 (30:28):
You're I'll go further. I mean again, I haven't driven
cars forever, you know, it's been thirty years or so.
I don't think I've ever had to replace a button
in a car. No, have you ever had a button
brand from like, you know?
Speaker 3 (30:46):
Not?
Speaker 4 (30:46):
How hard you?
Speaker 2 (30:47):
What button? Do you? I'm volume baby, this one.
Speaker 4 (30:51):
Goes to twelve right. Yeah, I've had it happen a
few times and Eddy away punch it. Yeah, I've had
it happened a few times. I'm probably just a frantic
button pusher where I don't get the result.
Speaker 2 (31:04):
I did crack a screen in my old car, which
and that's pricey. I never replaced it, but I couldn't
use half the stuff in the car. Then for the
last like three years, I have this thing where when
I get into the car in the morning, I don't
do it anymore specifically because of this. I put my
work bag in the back left seat on the floor,
(31:25):
and then I would take my water bottle and I
would toss it to the front right seat. It took
an unfortunate bounce and bounced into like the center console
and just right into the screen. That's a good start
in the morning, and took out the screen. So I
don't do that anymore because of that.
Speaker 3 (31:42):
I gotta tell you. I know we're gotta go break.
Speaker 4 (31:44):
But on top of the top when you want to
say something.
Speaker 3 (31:47):
At top of the touch screen stuff, have you guys
seen these like mousepad center console freaking worst. I borrowed
a car on Sunday.
Speaker 2 (31:55):
I don't want to have to move a finger on
a pad in order to do something.
Speaker 3 (31:59):
And it was an Accura and there's like a mousepad
cursor thing in the middle that's touchscreen itself. And I'm
trying to, you know, put on the AC to the
the screen in front of me, and meanwhile, I'm going
forty miles an hour. I'm like, what the heck?
Speaker 2 (32:15):
The people who designed these cars the terrible are horrible
at their job.
Speaker 4 (32:19):
Guys, you got experiment with technology, not six touchscreen technology
and cars is not new. I remember variations on this
you didn't work out though.
Speaker 3 (32:31):
Have you done the mousepad thing?
Speaker 2 (32:33):
Mark? No? Oh?
Speaker 3 (32:34):
Oh, it's it's so much worse than a touchscreen.
Speaker 4 (32:37):
They did let you borrow their car, Tucker did you.
Speaker 2 (32:40):
They won't again, not after Tucker did do it?
Speaker 3 (32:44):
Tell about it, but you know it was.
Speaker 2 (32:46):
It was close.
Speaker 4 (32:46):
It's new. It's new. You'll get used to it.
Speaker 2 (32:49):
Let's take a quick break here. When we come back,
we'll do a little bit of stack.
Speaker 1 (32:53):
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Speaker 3 (33:30):
Now's a great time to register for the DAV five k,
taking place on Saturday, November eighth at Fort Independence on
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(33:56):
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at d five K to Boston.
Speaker 2 (34:02):
All Right, I just got a notification from CMBC that
the President has posted new trade letters today six countries,
the Philippines, Brunei, Moldova, Algeria, Iraq, and Libya. So I
decided to go through and you know, see what the
deal is in terms of, hey, how much does the
(34:25):
United States actually import from the Philippines And the answer
is we brought in fourteen billion dollars of goods from
the Philippines last year, so not a ton. You know,
that probably makes the Philippines like a top thirty trading partner,
but like our biggest five or six we import, you know,
hundreds of billion from so not not that much the
(34:46):
other countries on this list. Okay, just if you're wondering,
like why this isn't impacting markets at all, Mark, do
you know how much we import from Brunei in care
two hundred and forty eight million dollars, which is nothing.
That's like one minute of revenue for Amazon or something
like that. Do you know how much we import from Moldova. Well,
(35:07):
you told me during the even less one hundred and
forty two million dollars. What about Algeria? How much? What
are Algerian imports actually kind of high? Two point five billion.
I bet it's a lot of energy stuff like that,
you know it related things along those lines. Camels, yeah, uh,
camels are not energy.
Speaker 4 (35:24):
Now I was in addition to oh got it, got
it in a way. They Iraq about seven away. They
do provide energy, broke, excuse me, work uh?
Speaker 2 (35:33):
Iraq seven billion dollars again mostly energy one would expect.
Speaker 4 (35:36):
Boy, they can't catch your break.
Speaker 2 (35:37):
And Libya one point four billion dollars. So the total
imports from all these countries are less than ten billion dollars.
Speaker 4 (35:44):
I think we cut a rack of break after turning
their society upside down for twenty years. Now you get
tariffed in any good luck with that.
Speaker 2 (35:53):
This stuff does not matter the stuff that matters. What
are tariffs going to be on China, Japan, South Korea,
the EU, India, the countries that we actually import a
lot of stuff from. You can impose one hundred percent
tariffs on Cyprus. It doesn't matter because we import sixty
million dollars of stuff a year from them, and it's
(36:14):
not going to impact us in any meaningful way. You
do that on Germany, there's a very different reaction in markets.
But this stuff just doesn't matter because these are not
countries with which we have significant amounts of trade on
any you know, meaningful level.
Speaker 4 (36:33):
Doesn't seem like a good use of anybody's time either.
The back of the inevitable back and forth with the Moldovans.
Speaker 2 (36:39):
All right, Moldova is nice this time of year.
Speaker 4 (36:43):
That would be an even bigger waste of resources if
somebody actually flew there.
Speaker 2 (36:48):
It could be nice. It's all I'm saying. Fed goes
to Jackson Hole every year. Why not make a Moldova.
What do you got for me? Mark?
Speaker 4 (36:54):
Did you know the FTC had adopted a rule last
year to make it easier to cancel subscriptions? It can
be infurial cancel.
Speaker 2 (37:00):
You had to be able to cancel the same way that.
Speaker 4 (37:02):
As easy, with the same ease, right, and we all
know that it's very asymmetric, very hard to even cancel
a subscribe and save. You have to drill down five levels.
And yeah, unfortunately, a court, appellate court, federal Appeals Court
suspended implementation of the rule because the required cost benefit
analysis was not performed. So if you were looking forward
(37:23):
to that, like I was making it easier to cancel
things not apparently going to happen. It's not to say
it won't, but apparently there were some procedural steps.
Speaker 2 (37:32):
Couldn't the court just be like, you know what, you
didn't follow the right procedures. But everyone hates the way
this works right now, so we're just gonna let it slide, right,
I mean, I understand why, from you know, a rule
of law perspective, you wouldn't want to do that.
Speaker 4 (37:44):
Well, the irony is it's it's hard to cancel cancel
hard cancelations exactly. Didn't there some irony there right?
Speaker 2 (37:52):
Like you we're having trouble canceling the cancelations.
Speaker 4 (37:55):
Yeah, and a court just made it doub a triple
or whatever hard. Yeah, you have to file in this irony. Yeah,
please bring your original signed docket to the court as
you can't do this remotely. So normally we don't like
going to risk government regulations. We're free market people here,
I think for the most partly speaking for myself.
Speaker 2 (38:13):
But anyways, as we finish up here, markets remain slightly positive.
We're done for the day back at tomorrow. We got
jobless claims coming up then
The Financial Exchange is produced by Money Matters Radio and
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(01:05):
Zada and Mark Fandetti.
Speaker 2 (01:11):
Chuck Mark and Tucker with you, and markets are up modestly,
giving up some of their gains from earlier in the day.
As we continue through the morning, the Dow Jones Industrial
Average is up eighty five points about a quarter percent,
S and P is up fifteen points about a quarter percent,
and the NASDAG up ninety five points about half a percent.
All these only up about a third as much as
(01:34):
they were shortly after the open. The S and P
has gone for being up about forty points down to
you know where it is now, So you still have
some positive momentum in stocks today, but questions about you know,
is it going to be able to you know, pop
to new all time highs again, or you know, we're
gonna give some of those gains back here, So we'll
see what ends up happening. Ten year treasury yields moving
(01:56):
down to touch, with the ten year at four point
three percent, down three point four basis points. Oil West
Texas Intermediate off three cents a barrel to sixty eight
point thirty not much real movement there, and gold today
is up four dollars announced to thirty three twenty and
ninety cents. Quite honestly, this might be the most boring
(02:18):
week of the year from a news and earnings perspective.
The only thing of any note this week we get
weekly jobless claims tomorrow. Other than that, let me know
if any of these earnings get you interested today.
Speaker 3 (02:32):
So tomorrow's Delta, right tomorrow is Delta.
Speaker 2 (02:36):
Which again, it's a twenty nine billion dollar company. Like, yes,
like they file a lot of planes and stuff, but
as far as like Bell Weather for everything, Yes, thirty
seconds today, I'm looking at this. I pull the earnings
list from a website called Trading Economics. The only company
that is listed as reporting today in the United States
(02:59):
has a market cap of two point seven billion dollars
and is just called as AZZ. I don't know what
they do, I don't know where they're from, but as
is reporting today. So there's that.
Speaker 3 (03:18):
It's a hot dip galvanizer, Hot dip galvanizer. Can I
get two metal coatings company?
Speaker 2 (03:24):
Oh so it's not like a dairy queen situation. No,
not not that kind of dip. Okay, gotcha? Anyways, we
got a Wall Street Journal exclusive that came out this morning.
They're actually late last night at nine pm and the
title on it is too Kevin's Battle to be next
Fed Chair in Trump's Apprentice style contest. Now, we've actually
(03:48):
been able to get some some early footage from this,
and I'm gonna have Tucker play it now just so
that we can get a little bit of an inside
look here, what man So obviously that's you know, from
(04:15):
Mad Max Beyond Thunderdome, But this is what this feels like.
It's two Kevin's enter, one Kevin leaves is basically where
it seems like we're heading now, Mark, I'm trying to
just think about this from a few different perspectives. The
first is it would seem to me that when picking
(04:38):
a fed chair, one of the first things that you
would look for is relevant monetary policy experience. Is that a.
Speaker 4 (04:46):
Depends on what you're I think not necessarily in economic models.
I think it's optimal to pick someone who will behave
like a strict is this gonna sound a little technical,
but it's it's perfectly understandable. It's plain English. You want
a strict inflation and you want someone who targets inflation monomoniacally.
I'm phrasing it a little differently than monetary policy economists would,
(05:07):
but someone who's concerned mostly about inflation outcomes have been
shown to be best. When your head of central bank
we call it the FED, ECB is Europe's name for it,
Bank of Japan, et cetera. They all mean the same thing.
You want someone who is more conservative than your politicians are,
and the key example that, of course is Paul Volgar.
Speaker 2 (05:28):
So we've got the two Kevins, Kevin Hassett, who is
the head of the Council of Economic Advisors, and Kevin
Warsh who Worsh is not at the FED currently.
Speaker 1 (05:38):
Is he.
Speaker 4 (05:38):
I think he's back at Stanford, is he?
Speaker 2 (05:40):
But previously was at the FED for a number of years.
And so just if you're looking at like the qualifications
of the two, it would seem that Worsh is eminently
more qualified to the PhD.
Speaker 4 (05:53):
I don't know about Warsh. I like Warsh personally. He's
a hard money guy, meaning he puts a lot of
weight on keeping inflation low and stable relative to goosing output,
which is where central banks get into trouble like our
FED did in the nineteen seventies. But Hasset's the more
accomplished economist. I don't know if Worsh could read a
(06:13):
modern paper in economics candidly. Maybe he can. Maybe I'm
being unfair to him. I just don't get how somebody
without graduate level training could. Hasset can. He's a he's
a respected researcher. He's carrying a lot of water for
the guy he works for now. But that's normal.
Speaker 2 (06:28):
We all do that, everyone everyone.
Speaker 4 (06:31):
I like what Warsh has said in the past. You
didn't ask me my opinion. Hassett is objectively speaking, probably
better trained.
Speaker 2 (06:39):
Interesting I wouldn't. I wouldn't have.
Speaker 4 (06:40):
I don't think Worsh has a master's or a PhD
in econ.
Speaker 2 (06:43):
He might haven't figured his experience at the FED would
be more relevant in this case.
Speaker 4 (06:47):
I think you have to understand when your PhD staff
comes to you with the results of a model, you
have to be able to push back and say, let's
break open the model and find out why it's telling
us what it is. Hasseck can probably, I don't know
how long it's been since he did serious work. He
could probably do that. I don't know that Warsh can.
He might have a problem similar to Powell's, and that
(07:07):
you become very dependent on staff.
Speaker 2 (07:10):
Let's get to kind of because I think Powell's kind
of instructive on this in my thinking in that Powell
when he was put into his position, he was put
there by President Trump during his first term and subsequently
was asked to continue on by Joe Biden during the
Biden presidency. And so I guess the question that I
(07:32):
have is, aside from just wanting to have the title
of FED Chair, this seems like a really difficult position
to be going into because on one hand, it's very
clear that the President wants lower interest rates, but when
it comes to the FED actually going and putting lower
(07:55):
interest rates into effect and how they make their decisions,
it is not simply the decision of one j Powell
or Kevin Hasseen or Kevin Warris who does so it's
the FED Open Market Committee that decides what to do, yes,
And so I guess what I see here is a
scenario where whoever is coming in is going to be
(08:16):
viewed rightly so as someone who is going to try
to lower interest rates because that's what the President is
telling them to do. I know that we talk about,
you know, FED independence, but it's pretty clear that President
Trump wants someone who is going to push for lower rates.
And by the way, when you hear both Hassett and
wars talk right now, the only thing they talk about
(08:39):
is we need to lower interest rates. So they are
campaigning for the job right now as we speak.
Speaker 4 (08:45):
They may believe that there's actually a good case for it,
But what sure happens when the facts change and they
have to raise interest rates at a time when it's
uncomfortable to do so. Every FED chair is faced with that.
Speaker 2 (08:56):
And I think this is the piece that I think
is going to be challenging for who ever ends up
in that role, is they're going to be faced with
either the other eleven members of that committee coming from
a different place than they are potentially, or the President
not being happy with them because they're not following through
on what they've talked about over the last several months.
Speaker 4 (09:18):
If you look at the FED chairs since the end
of in the modern era, the end of the war,
end of World War Two, with the exception of I'm
just gonna go Martin, Martin Burns, Miller, Volker, Green, Span, Bernanky,
Yellin Powell of the I think I got them all there.
Speaker 2 (09:42):
Yeah you did, Okay, I thought you were saying with
the exception, and I'm looking, I'm sorry, I.
Speaker 4 (09:46):
Want them how many of those people survived, got out
of that job with their reputation burnished, intact, even in
green Span got out of it with his rep intact
but not unsullied.
Speaker 2 (09:58):
He's no, green Span deserves more for maybe go ahead.
I know, I'm not.
Speaker 4 (10:03):
I don't even want to get into that, but.
Speaker 2 (10:04):
We actually can we talk about it a little bit? Sure?
Speaker 4 (10:07):
Sure, sure, go ahead.
Speaker 1 (10:08):
Sorry.
Speaker 2 (10:08):
So there's two things that I think green Span deserves
a little bit of blame for. The second one is
going to be surprising to people because it happened after
his watch. Actually. The first is obviously tech bubble and
the subsequent popping and how things were handled there. You
could even make the case that wasn't so much a
green Span thing, it was more a fiscal thing.
Speaker 4 (10:23):
Was nobody thought that he should have done more than
he did.
Speaker 2 (10:27):
To be honest, the place that I will go to
and this is not a monetary policy thing necessarily, but hey,
you're Alan Greenspan. You know you're still you know, the
chairman of the Federal Reserve. Buck stops here is kind
of my thinking. One of the major reasons for the
financial crisis was changing. Was regulation that changed under green
(10:49):
Span that required less collateral for highly rated debt that
was securitized, and you can basically draw straight line from
that to the financial crisis. He should have been more prescient.
Speaker 4 (11:00):
A lot of people take blame for that, probably I Well,
guess what I wanted to say is of all those
names that I ticked off, how many came out of
there with a better reputation than maybe Janet yellin vulgar vulgar?
Certainly Stirling he's the gold standard. But it's Vulgar is
Zeus and everybody else is like a three tiered down
whatever they call them demons in Greek mythology, Like there's
(11:23):
vulgar and then there's everybody else, and it ain't even close. No,
It's my point is it's it's a really hard job.
You're not not only are never gonna please everybody, you're
not even gonna please like most people, some of those.
Speaker 2 (11:34):
Kind of like being Speaker of the house, like it's
the last job you have before you go on the
speaking circuit. Yeah right, you know, it's the lifetime achievement award,
and it's you're just not going to be liked by everyone,
because like that's it's your batman. You either die the
hero or live long enough for you know, people to
turn you into the Villain's kind of how it is, right.
Speaker 4 (11:56):
That's like, I haven't thought about central banking that way.
Speaker 2 (11:59):
That's kind of how it is. The head of the
Fed is batman.
Speaker 4 (12:02):
I mean, you're you're always making decisions in the midst
of a fog of noisy data. You're you're gonna get
nearly half of them wrong.
Speaker 2 (12:11):
Well, and no matter what decision you make, you get criticized.
When interest rates were heard, all you heard during the
twenty tens was oh, no one can make any money
on their savings, like it's it's hurting seniors. I'm not
saying this isn't true. I'm just saying this is what
people said. It's like, oh, like you can't earn any
interested banks anymore, blah blah blah blah. It's pushing people
out on the risk curve. YadA, YadA. Now all that
(12:33):
you hear is, oh, it's so expensive to buy a house.
No one can afford real estate. You can't say both
of those things all the time, Like you can't just
there's no mythical right level for rates where you can
earn enough interest and it's cheap enough to buy a house.
It's something has to give.
Speaker 4 (12:51):
Satisfying the dual mandate is hard enough. If we make
at a tripart tight mandate where the third part is
Trump and not incurring his wrath, it becomes absolutely impossible.
They're gonna be getting hit by Elizabeth Warren on the left,
who wants rates a lot, by some hard money Republican
or somebody like me on the right, sure, who wants
(13:12):
them to pursue inflation production more aggressively. And then you're
gonna be getting hit by Trump and who knows what
it is.
Speaker 2 (13:18):
And then all of us who are just yelling at
a chaotic whatever.
Speaker 4 (13:23):
Yeah yeah, yeah, right.
Speaker 2 (13:24):
So I gotta say, I really don't think i'd like
to be fed chair, So I'm taking myself out of
the running.
Speaker 4 (13:32):
Well, even if you're terrible at it, though you could
cash in after your stint.
Speaker 2 (13:35):
Oh yeah, I mean, you get to get craft for
showing up for twenty minutes. It's fine, it's a good deal.
But having said that, no, I don't need that. Tucker.
You can you can be my emissary to the Fed.
You can, you can handle good. I don't pay you
anything forget No, you just show up. You get steaks.
(13:56):
Let's take a quick break. When we come back, We've
got right after this.
Speaker 1 (14:02):
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Speaker 3 (14:41):
Time for trivia Here on the Financial Exchange and on
this date. In nineteen fifty six, Dick Clark appeared as
the host of a local TV show in Philadelphia, leading
to his becoming America's forever ageless teenager. Trivia question today,
what was the name of that local Philadelphia TV show?
Once again, what was the name of that local Philadelphia
(15:02):
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to text us at six one seven three six two
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(15:24):
dot Com.
Speaker 2 (15:25):
Got a piece here from market Watch. The headline on
is home sellers have gotten tired of cutting prices, so
they're yanking their houses off the market. And if you're
listening from you know, up in the Northeast where our
show is based, this is not really a thing that
you see a ton just because inventory in the Northeast
and in the Midwest is still well below June of
(15:47):
twenty nineteen. So if you're looking comparing this kind of
apples to apples like June of twenty five to nineteen,
most of the Northeast is still like forty percent below
June of nineteen. Levels the Midwest is in a similar boat.
Speaker 4 (15:59):
Uh.
Speaker 2 (16:00):
Even as you you know, get out to you know,
places like you know, Utah and places like that, you're
still in a decent spot in the southern part of
the country and now pushing out to much of the
West as well. You've got inventory levels that are either
at or well in excess of twenty nineteen levels. Florida
(16:22):
is an example, currently running twenty eight percent above June
twenty nineteen levels, Texas thirty three percent above, Tennessee, thirty
percent above, Colorado thirty four percent above, Arizona twenty eight
percent above. And so you've got falling prices that sellers
are not willing to take, and so they're yanking their
properties off the market rather than cut them. You're still
seeing a high number of price cuts, but there is
(16:45):
all kinds of mess in the housing market in much
of the country right now, and so it's something where
the data is really pointing to two things that are
going to happen. Either you're going to have to see
prices fall further or inventory is going to have to
be pulled from the market in order to support prices.
And you're seeing a combination of those two things right now.
(17:07):
But you still have more new inventory coming on, so
inventories are growing overall, even as people are pulling listings
that have been sitting for months on end. At this point,
the housing market is not in a good spot in
much of the country right now. Your thoughts, Mark.
Speaker 4 (17:21):
Ye, how many of these delistings quickly get listed again quickly.
This is not they're not following individual people here listings
over time. These are just aggregates. So it could be
that that a good fraction of the say fifty percent
rounding up of the delistings that this article says occurred
in May year over year, we're quickly relisted the following month.
(17:44):
We don't really know if they're.
Speaker 2 (17:46):
No, we don't know. And some of this is just
like trying to keep a property fresh, where you okay,
you pull it for a few months and then you
list it again.
Speaker 4 (17:51):
And you're firing realtor or something and exactly. But what
we are seeing is throughout the southeast part of the
country there are some real issues including one of the
things that's starting to crop up there is, for depending
on the market you're in, if you were buying in
twenty twenty two in kind of that Austin, Texas area
or twenty three in parts of Florida, kind of that
(18:14):
Cape Coral area, you're starting to see an increasing number
of properties that have negative equity. And this is a
problem obviously if you are trying to sell simply because
it means you have to pay a bunch of money
in order to sell your property then, and so that
there are some real issues that are starting to pop
up in some of these markets. At this point, it's
(18:36):
not going to cause anything close to what we saw
in two thousand and eight, Like it's not a housing
Cristi issue, because this is not an affordability driven And
when I say it's not an affordability driven problem, it's
not people who are unable to afford their mortgage payments.
Home equity levels in general are very high. Mortgage payments
relative to incomes as a whole are pretty manageable. But
(18:58):
this is something where the housing market has all kinds
of wrenches in its gears right now, and it's going
to take quite a bit of work to try to
get it, you know, moving again, just because prices for
new construction are completely out of whack with where prices
are on retail the resale market, and so I just
(19:18):
don't know how this squares away easily. It might be
a year or two of slog before this thing, you know,
gets moving again consistently.
Speaker 2 (19:27):
Let's take a quick break. When we come back, we've
got the trivia answer and Wall Street.
Speaker 1 (19:31):
Watch, bringing the latest financial news straight to your radio.
Every day. It's the Financial Exchange on the Financial Exchange
Radio Network. Time now for Wall Street Watch. A complete
(19:53):
look at what's moving markets so far today, right here
on the Financial Exchange Radio Network.
Speaker 3 (19:59):
Market territory today with the new round of terror threats
and a deadline delay to August first. In addition, President
Trump said he would impose fifty percent tariffs on copper
and a levy of up to two hundred percent on
pharmaceutical imports over a span of a couple of years.
Right now, the Dow is up by a tenth of
a percent, or sixty nine points, SMP five hundred up
(20:21):
nearly three tenths of one percent, seventeen points higher, NASDAC
up over half a percent higher one hundred and thirteen points.
Russell two thousand is flat at the moment. Tenure Treasure reeled,
pulling back four basis points now at four point three
seven percent, and crude oil up about a quarter percent higher,
training at sixty eight dollars and fifty one cents A barrel.
(20:43):
Breaking news out of social media platform X this morning,
where Linda Yakarino announced she is stepping down from her
role as CEO after two years. Meanwhile, according to Bloomberg,
Meta purchased a minority Steak and Eyeware giantess Lord Luxade
me as the Facebook parent already partners with the company
to make ray Band smart glasses. Meta shares are up
(21:06):
by about one and a half percent. Separately, Bloomberg also
reporting that energy company AES was exploring a potential sale
amid interest from infrastructure investors, that stock jumping over sixteen
percent higher. Elsewhere, several reports say Starbucks has drawn bids
for a stake in its China business. CNBC said bids
(21:27):
valued Starbucks China at up to ten billion dollars. Starbucks
now dipping after trading higher in earlier trade and earlier
this morning, chip in Ai Giant Nvidia became the first
company to hit four trillion dollars in market cap, with
its stock up over two percent today. I'm Tucker Silva
(21:47):
and that is Wall Street Watch and the trivia question
we asked in the previous segment, what was the name
of the local Philadelphia TV show hosted by Dick Clark
that would be Bandstand. One year after Clark took over
hosting duties of Bandstand, the show was picked up by
ABC to be aired nationally and the name was changed
(22:08):
to American Bandstand. Tom from the gun Quit Main is
our winner today, taking home a Financial Exchange Show t shirt.
Congrats to Tom, and we play trivia every day here
on the Financial Exchange See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (22:23):
We got a piece here from Barons. It's titled Americans
are eating cheaper. What that means for the economy? What
does it mean?
Speaker 1 (22:33):
Mark?
Speaker 4 (22:34):
I don't know exactly. There's a bunch of anecdotes here
about people spending less, particularly on high end restaurants, and
that may bode ill for spending overall, which is sort
of a common sense deduction. I guess people are shifting
toward cheaper ways to get the nutrients that they need.
Is a very I guess, cold and clinical way of
looking at it. Sure, Uh should we buy that? I
(22:57):
don't know. I'm looking at as anybody can do it
is Google personal consumption expenditures and food category specifically, and
the Saint Louis Fed's charting tool comes up and you
can manipulate it and you'll see there that spending on
food is actually increased, it's leveled off lately, but been
increasing steadily year over years since twenty twenty four. I'm
(23:20):
not getting into how people buy their food, and it
might there be something to buying less of it at
high end restaurants. Maybe maybe they're just sick of it
paying a lot and tipping a lot and they want
to eat at home more. I really don't know, but
I see nothing in the trend growth rate of spending
on food over the past few years to suggest that
(23:41):
that's changed again. How they spend that might be different.
Speaker 2 (23:46):
It seems like. And this is just talking about what
we're seeing from publicly traded companies in the restaurant space
and in the grocery space. We can talk about kind
of what they're telling us. There's definitely a volume issue
at a lot of publicly traded restaurants. We're seeing declining sales,
declining traffic. Whether you're looking, you know, McDonald's, Wendy's, Chipotle,
(24:08):
I think had something Tucker who was the one that
was up like thirty one percent? It wasn't Applebee's, but
it was, uh Chili's, Chili's who is you know? Apparently
people are finding great value at Chili's, I guess because
their sales are through the roof, but there's a lot
of there are a lot of people in that space
that are saying, yeah, there's some problems that we're not
seeing the traffic coming through the way that we used
(24:29):
to in the speculation is Okay, people are you know,
trading down or you know, eating more meals at home.
Maybe like that that could be something that's happening. But
I guess in terms of like does this mean anything
for the US economy, it means something if that spending
is not being replaced elsewhere. So we've we've also talked
(24:51):
about how we're seeing not just anecdotes but data stories,
Like you go through just about anything that airline bookings
and hotel booking are down, and not just you know, hotel,
but airbnb as well. Like you're seeing this across the board.
There's less expensive travel that's happening, and less distant travel
that's happening. Okay, that could be bad for the US economy,
(25:12):
but maybe it's because people are buying a whole bunch
of other stuff and the spending is just shifting around
and moving to a different place.
Speaker 1 (25:19):
Yeah. Maybe.
Speaker 2 (25:21):
So I don't think you can necessarily draw anything good
or bad or ugly from it. It's just something that's
happening right now, and we don't really know anymore. And
if we, you know, had a dime for every time
we predicted recession because of one bad thing happening that
didn't turn out to be a recession, you and I
would no longer be working. We would be counting our dimes,
(25:42):
all billions of them.
Speaker 4 (25:45):
One thing that came out of this not related really
to the article, which I didn't find that helpful, But
these people have to crank out stuff every day, so
they reach much like we do, for stuff to sort
of fill their required content space with Spending on food
is a percentage of overall spending. In the nineteen fifties,
we spent on average twenty cents of every dollar of
(26:06):
overall spending. Now on food, that number has been about
seven percent. It leveled off at seven percent about twenty
years ago, and that's where it is sitting.
Speaker 2 (26:16):
Tacked up a little bit like twenty one and twenty two.
And I think that's what made people a little bit
upset back then.
Speaker 4 (26:21):
Yeah, yes, yes, you're absolutely right, it did, and since
has receded back to it's what appears to be stable
for until the structure of the economy changes, people's preferences change,
stuff like that what appears to be a relatively stable
level in the mid high single digits. I had no
idea that that was the case. That one out of
every five dollars we spent in the nineteen fifties was
(26:42):
on food, and it's now less than half that amount.
Speaker 2 (26:45):
I believe economists would call that an increase in the
standard of living.
Speaker 4 (26:48):
They call it an increase in your real income.
Speaker 1 (26:50):
Yeah.
Speaker 3 (26:50):
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Speaker 2 (27:50):
Why carmakers need to bring back buttons. This is a
piece from the Financial Times, and in the aftermath of
the release of the Tesla Model three, seven or eight
years ago, you saw car companies around the world just
go nuts, being like, oh, all we need are touch screens.
We can get rid of all the buttons. And it
turns out that cars without buttons, people don't really like
(28:10):
them because when you're driving the button lets you have
that tactile sensation of oh, I'm turning the air conditioning
knob three clicks this way, or I push the you
know this button here you can feel without looking. With
the touch screen, you have to look at Unfortunately, when
you're looking at the screen instead of at the road,
it often causes accidents. So it's kind of a safety
problem in addition to just being really frustrating when you
(28:32):
think you're turning up the AC and instead volume on
your car goes through the roof. So you've got automakers
that are now starting to bring back buttons. In quite honestly,
I think that the optimal thing, as it often is,
is going to be some nice, little convenient marriage of
some touchscreens and some buttons. Because there are some things
where you don't necessarily need a button because you're not
using it that often that frequently and it's not that
(28:54):
important to operation where you can have it on a touchscreen.
There's other stuff that you're touching more often and you
want a but for that, And so, like most things,
it's neither of the extremes. It's somewhere in the middle.
That's probably the right decision to me.
Speaker 4 (29:07):
Reminiscent of the BlackBerry versus iPhone keyboard debate. I prefer
the tactile keyboard. I still look for them. I'm convinced
somebody's going to start offering them again.
Speaker 2 (29:15):
I do wish someone would.
Speaker 4 (29:17):
You can buy a BlackBerry. They just don't support the
operating system, so you could take that. Oh I'm sorry.
So they won't get updated, the software won't get updated.
Speaker 3 (29:25):
They still exist, they're not making them anymore.
Speaker 4 (29:28):
But if you I learned this just by going on Amazon,
like any idiot, I guess could, you could buy them.
Speaker 2 (29:33):
But they're not supported like the old ones from like
two thousand and eight.
Speaker 4 (29:35):
No, no, no, they were updating them through only a few
years ago.
Speaker 2 (29:39):
Didn't know that. Neither did I.
Speaker 4 (29:41):
But you'd be crazy to buy it because it doesn't
nobody is supporting it.
Speaker 2 (29:45):
Does it matter if no one's supporting it, because I
bet no one's trying to hack it either, like no
one even knows they exist.
Speaker 4 (29:50):
But apps are getting more sophisticated in demanding you're not
going to be able to keep up with them, and
maybe making a several hundred dollars investment on something that
could be incompatible with the latest version of whatever app
you use is not a good idea. That's the conclusion
I came to interesting the other thing about cars buttons.
It sounds like it should be cheaper to use the
touch screen, but it's not right to replace a touch screen.
(30:12):
You gotta replace the whole thing to replace a button,
like any tech can. I was gonna say, any idiot
again to use myself as an example, could probably do
with the right tool. So there's it seems to me
they're more robust the old the old way a dial
a button is opposed to swapping out a big TV in.
Speaker 2 (30:28):
You're I'll go further. I mean again, I haven't driven
cars forever, you know, it's been thirty years or so.
I don't think I've ever had to replace a button
in a car. No, have you ever had a button
brand from like, you know?
Speaker 3 (30:46):
Not?
Speaker 4 (30:46):
How hard you?
Speaker 2 (30:47):
What button? Do you? I'm volume baby, this one.
Speaker 4 (30:51):
Goes to twelve right. Yeah, I've had it happen a
few times and Eddy away punch it. Yeah, I've had
it happened a few times. I'm probably just a frantic
button pusher where I don't get the result.
Speaker 2 (31:04):
I did crack a screen in my old car, which
and that's pricey. I never replaced it, but I couldn't
use half the stuff in the car. Then for the
last like three years, I have this thing where when
I get into the car in the morning, I don't
do it anymore specifically because of this. I put my
work bag in the back left seat on the floor,
(31:25):
and then I would take my water bottle and I
would toss it to the front right seat. It took
an unfortunate bounce and bounced into like the center console
and just right into the screen. That's a good start
in the morning, and took out the screen. So I
don't do that anymore because of that.
Speaker 3 (31:42):
I gotta tell you. I know we're gotta go break.
Speaker 4 (31:44):
But on top of the top when you want to
say something.
Speaker 3 (31:47):
At top of the touch screen stuff, have you guys
seen these like mousepad center console freaking worst. I borrowed
a car on Sunday.
Speaker 2 (31:55):
I don't want to have to move a finger on
a pad in order to do something.
Speaker 3 (31:59):
And it was an Accura and there's like a mousepad
cursor thing in the middle that's touchscreen itself. And I'm
trying to, you know, put on the AC to the
the screen in front of me, and meanwhile, I'm going
forty miles an hour. I'm like, what the heck?
Speaker 2 (32:15):
The people who designed these cars the terrible are horrible
at their job.
Speaker 4 (32:19):
Guys, you got experiment with technology, not six touchscreen technology
and cars is not new. I remember variations on this
you didn't work out though.
Speaker 3 (32:31):
Have you done the mousepad thing?
Speaker 2 (32:33):
Mark? No? Oh?
Speaker 3 (32:34):
Oh, it's it's so much worse than a touchscreen.
Speaker 4 (32:37):
They did let you borrow their car, Tucker did you.
Speaker 2 (32:40):
They won't again, not after Tucker did do it?
Speaker 3 (32:44):
Tell about it, but you know it was.
Speaker 2 (32:46):
It was close.
Speaker 4 (32:46):
It's new. It's new. You'll get used to it.
Speaker 2 (32:49):
Let's take a quick break here. When we come back,
we'll do a little bit of stack.
Speaker 1 (32:53):
Rootlets find daily interviews and full shows of the Financial
Exchange on our YouTube page. Subscribe to our page and
get caught up on anything and everything you might have missed.
This is the Financial Exchange Radio Network. Here the Financial
Exchange every day from eleven to noon non Serrius XM's
business radio channel one thirty two. Keep it here for
(33:15):
the latest business and financial news and the trends on
Wall Street. The Financial Exchange is now life on Serious
XM's business radio channel one thirty two. This He's the
Financial Exchange Radio Network.
Speaker 3 (33:30):
Now's a great time to register for the DAV five k,
taking place on Saturday, November eighth at Fort Independence on
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past four years and slots are continuing to fill up,
so don't delay. Visit DAV five k dot Boston and
reserve your spot or join our team here at the
Financial Exchange by registering under Team TFE. That's Saturday, November
(33:56):
eighth for this year's DAV five K. Sign up now
at d five K to Boston.
Speaker 2 (34:02):
All Right, I just got a notification from CMBC that
the President has posted new trade letters today six countries,
the Philippines, Brunei, Moldova, Algeria, Iraq, and Libya. So I
decided to go through and you know, see what the
deal is in terms of, hey, how much does the
(34:25):
United States actually import from the Philippines And the answer
is we brought in fourteen billion dollars of goods from
the Philippines last year, so not a ton. You know,
that probably makes the Philippines like a top thirty trading partner,
but like our biggest five or six we import, you know,
hundreds of billion from so not not that much the
(34:46):
other countries on this list. Okay, just if you're wondering,
like why this isn't impacting markets at all, Mark, do
you know how much we import from Brunei in care
two hundred and forty eight million dollars, which is nothing.
That's like one minute of revenue for Amazon or something
like that. Do you know how much we import from Moldova. Well,
(35:07):
you told me during the even less one hundred and
forty two million dollars. What about Algeria? How much? What
are Algerian imports actually kind of high? Two point five billion.
I bet it's a lot of energy stuff like that,
you know it related things along those lines. Camels, yeah, uh,
camels are not energy.
Speaker 4 (35:24):
Now I was in addition to oh got it, got
it in a way. They Iraq about seven away. They
do provide energy, broke, excuse me, work uh?
Speaker 2 (35:33):
Iraq seven billion dollars again mostly energy one would expect.
Speaker 4 (35:36):
Boy, they can't catch your break.
Speaker 2 (35:37):
And Libya one point four billion dollars. So the total
imports from all these countries are less than ten billion dollars.
Speaker 4 (35:44):
I think we cut a rack of break after turning
their society upside down for twenty years. Now you get
tariffed in any good luck with that.
Speaker 2 (35:53):
This stuff does not matter the stuff that matters. What
are tariffs going to be on China, Japan, South Korea,
the EU, India, the countries that we actually import a
lot of stuff from. You can impose one hundred percent
tariffs on Cyprus. It doesn't matter because we import sixty
million dollars of stuff a year from them, and it's
(36:14):
not going to impact us in any meaningful way. You
do that on Germany, there's a very different reaction in markets.
But this stuff just doesn't matter because these are not
countries with which we have significant amounts of trade on
any you know, meaningful level.
Speaker 4 (36:33):
Doesn't seem like a good use of anybody's time either.
The back of the inevitable back and forth with the Moldovans.
Speaker 2 (36:39):
All right, Moldova is nice this time of year.
Speaker 4 (36:43):
That would be an even bigger waste of resources if
somebody actually flew there.
Speaker 2 (36:48):
It could be nice. It's all I'm saying. Fed goes
to Jackson Hole every year. Why not make a Moldova.
What do you got for me? Mark?
Speaker 4 (36:54):
Did you know the FTC had adopted a rule last
year to make it easier to cancel subscriptions? It can
be infurial cancel.
Speaker 2 (37:00):
You had to be able to cancel the same way that.
Speaker 4 (37:02):
As easy, with the same ease, right, and we all
know that it's very asymmetric, very hard to even cancel
a subscribe and save. You have to drill down five levels.
And yeah, unfortunately, a court, appellate court, federal Appeals Court
suspended implementation of the rule because the required cost benefit
analysis was not performed. So if you were looking forward
(37:23):
to that, like I was making it easier to cancel
things not apparently going to happen. It's not to say
it won't, but apparently there were some procedural steps.
Speaker 2 (37:32):
Couldn't the court just be like, you know what, you
didn't follow the right procedures. But everyone hates the way
this works right now, so we're just gonna let it slide, right,
I mean, I understand why, from you know, a rule
of law perspective, you wouldn't want to do that.
Speaker 4 (37:44):
Well, the irony is it's it's hard to cancel cancel
hard cancelations exactly. Didn't there some irony there right?
Speaker 2 (37:52):
Like you we're having trouble canceling the cancelations.
Speaker 4 (37:55):
Yeah, and a court just made it doub a triple
or whatever hard. Yeah, you have to file in this irony. Yeah,
please bring your original signed docket to the court as
you can't do this remotely. So normally we don't like
going to risk government regulations. We're free market people here,
I think for the most partly speaking for myself.
Speaker 2 (38:13):
But anyways, as we finish up here, markets remain slightly positive.
We're done for the day back at tomorrow. We got
jobless claims coming up then
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