January 17, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss China's declining population, despite a rise in birth rates. Trump’s tariff threat is already panicking the junk debt market. Trump plans to designate Cryptocurrency as a national priority. Raising the SALT cap is supposed to benefit whom, exactly? Electric vehicle sales have stumbled. What went wrong? Paul LaMonica joins the show to chat about DJT and crypto ahead of the inauguration.
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Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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the hosts. Do not reflect the opinions of Armstrong Advisory
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(00:21):
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Exchange with Chuck Zada and Mike Armstrong, your exclusive look
at business and financial news affecting your day, your city,
(00:43):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and talker with you, kicking off our number
two of the financial exchange. And as we sit here
right now, we got a nice broad based rally taking
place across US markets, led by big tech. But the
Dow is up three hundred and ninety four points about
one percent, the S and P up sixty four points
about one percent, back above six thousand bight I add,
(01:32):
and the Nasdak nas dak.
Speaker 3 (01:37):
Is up to nine. Well what what?
Speaker 2 (01:41):
First of all, there should be no que without a U.
And if you do see a queue, isn't it quah?
It should be ac k Yeah, nas dak tell me
to start saying. Nas DAK is up two hundred and
ninety six points right now, about one and a half percent,
and that is largely being led by the usual suspects.
(02:02):
And Vidia up three and a quarter, Tesla up three
and a quarter, Apple, Amazon, Google, and Microsoft all up
more than one percent. Tenure US Treasury is flat today
at four point six percent. We've got oil down sixty
two cents a barrel to seventy eight h six, triple
a national average for gas prices continuing to move up
though another one point two cents to three eleven and
(02:22):
five tenths of a cent. And we've got gold today
down thirty cents an ounce barely why they even wake
up and trade it today?
Speaker 3 (02:28):
Who knows?
Speaker 2 (02:29):
That is at twenty seven to fifty and fifty cents.
Let's go over to China, which is a country with
lots of people, about seven thousand miles away from the United.
Speaker 4 (02:42):
States, one point four billion of them, about a.
Speaker 2 (02:44):
Lot of people, and their population is continuing to decline,
even though their birth rate ticked up just a wee
little bit. They are seeing a declining population that is
likely to continue for the foreseeable future.
Speaker 3 (03:00):
Yeah, they're very easy.
Speaker 5 (03:02):
Summary here. Not enough babies and zero immigration or close
to it. Yes, not a lot of people saying love
what I'm seeing out of China going to move over there.
There probably actually would be plenty of people in really
impoverished countries who would love to be there, But for
a number of reasons, China does not have really any
immigration to speak of.
Speaker 2 (03:23):
No, and you have demographers, which is, how does one
become a demographer? How often do you have to demogue?
Speaker 4 (03:33):
I don't know, Chuck.
Speaker 2 (03:34):
In any case, frequently they had expected to see an
increase in birth numbers.
Speaker 3 (03:39):
Last year.
Speaker 2 (03:39):
It was the Year of the Dragon for China, which
is an auspicious year to have a baby in, so
this is something that was, you know, kind of expected.
But overall, the Chinese birth rate is less than half
of the typically agreed upon replacement rate of two point
one percent, so their population is going going to continue
(04:01):
to decline. And I actually found a great chart today.
This is from Visual Capitalist, and it's basically these demographic
pyramids that you have showing hey, how do demographics in
different countries and regions stack up visually? Like what percentage
of your population or how many people fall into each
(04:21):
little bucket that you have. And India and China right
now actually have about the same number of people. Hasn't
always been that way, but India's had a pretty strong
birth rate in recent years, whereas China obviously has not.
China right now is a median age of thirty eight years,
and if you look at the population of people age
zero to five, it is about half the population of
(04:44):
age people fifty to fifty five. So it's like there
is a stark difference that's happening there in India. On
the other hand, the population of zero to five year
olds is about thirty percent larger than fifty to fifty
five year olds. Wenna have Japan, which is another country
that has a significant demographic problem. They look pretty similar
(05:05):
to China quite honestly, in the United States, where we
talk about the demographic issues that we have, our median
age is thirty nine years, about the same as China,
but it is skewed by the fact that we have
a larger percentage of our population that is sixty plus.
Relative to China, our young people, our younger cohorts are
(05:25):
zero to five. Demographic is actually only about fifteen to
twenty percent smaller than our age fifty to fifty five.
Speaker 5 (05:32):
Do you have any data on eighty plus population, because
this article estimates their about five Chinese population about five
percent eighty and over by the end of this year, and.
Speaker 2 (05:42):
The US is approximately double that. Okay, interesting, yeah, US
is approximately double that. Then you've got Europe, which looks
pretty darn similar to the US. The US the reason
that we have a growing population while a lot of
European countries are pretty stagnant. We have more immigration that
happens into the USA. That's been a major driver of
population growth. The one place on Earth that is completely
(06:05):
defying all of this is Africa, where the median age
for the entire continent is somewhere between eighteen and nineteen
years old and the zero to five demographic is And
again this is visual, so I'm eyeballing this one, and
it's kind of hard to eyeball. It looks like it's
(06:26):
about five times as big as the age.
Speaker 3 (06:28):
Fifty to fifty five cohort.
Speaker 4 (06:29):
Wow.
Speaker 2 (06:30):
Now, part of this is because life expectancy in Africa
sixty three years. Yeah, So that is a pretty stark
difference in basically everywhere else that I described. You have
a life expectancy that is fifteen to twenty years longer
than what is expected there.
Speaker 5 (06:48):
So bringing this back to China for a moment, Yeah,
there has been a lot written about China facing the
Japan problem. Japan was the growing economy, the the area
of all manufacturing in the sixties, seventies, and eighties. Yeah,
(07:08):
and for a number of reasons, probably not population alone,
hit several economic lost decades throughout the nineties and two thousands,
and I would not be producing an original thought if
I compared China's potential economic issues to that of China.
There has been to Japan, excuse me, to that of Japan.
(07:30):
There has been a lot written about this, and it's
certainly no guarantee that China ends up going that direction.
But boy, are they really really trying to push different
ways to face off with and fix this demographic issue.
Speaker 4 (07:47):
I'll be honest, They can't outside of the only way
that you do.
Speaker 5 (07:53):
It is is through immigration, and they have a society
that that doesn't seem like a possibility.
Speaker 2 (07:59):
Well, it's not even it's it's not a possibility for
a number of different reasons.
Speaker 1 (08:03):
Sure.
Speaker 2 (08:04):
The first one is, okay, how do you actually encourage
immigration to China, which is a pretty restrictive system to
live under for those who have lived elsewhere. The second
is the sheer number of people that you would need
to bring in in order to make a dent in
(08:24):
the problem. Right, It's this is not you know, Portugal
with was Portugal have like thirty million people in population.
It's not Israel with seven million people, where you're like, hey,
if we bring in like a million people, we added
like fourteen percent of the population. Ten Portugal is ten
to five. Correct, Spain's thirty million? Oh a Tucker noodle
(08:47):
that for a little bit. In any case you forty eight.
Speaker 3 (08:51):
I'm who cares difference.
Speaker 2 (08:55):
In any case, you got one point four billion people there.
Even if you bring in fourteen million, fourteen million people,
you've changed the tide by one percent.
Speaker 3 (09:07):
Yeah, one percent to do that.
Speaker 2 (09:10):
And think of all the effort that you would have
to do in order to bring fourteen million people into
China permanently.
Speaker 5 (09:15):
Yeah, it makes you not scratch your head for terribly
long as to why China is so very interested in automation,
artificial intelligence and ways that they can make manufacturing really, really,
really efficient.
Speaker 3 (09:30):
Let's take a quick break.
Speaker 2 (09:32):
When we come back, we'll do a little bit of
trivia and we'll talk tariffs right after this.
Speaker 1 (09:37):
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DAV five k dot Boston. Time for trivia here on
the Financial Exchange. Earlier this week, it was announced that
Coda and O'Brien would be the twenty twenty five recipient
(10:50):
of the Mark Twain Prize. The Mark Twain Prize is
awarded to those who have had an impact on American
society in a way similar to Mark Twain. Trivia question today,
which comedian was the first recipient of the Mark Twain Prize?
I don't know why I can't talk? Which comedian was
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(11:14):
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Speaker 3 (11:32):
Do you guys know that he had a son choo
choo like a train to Twain? God, it's not my material.
Speaker 2 (11:44):
Let's say, Frank our own special from everybody else, Raymond,
But uh, I.
Speaker 3 (11:48):
Just got a when'd you get a chance to get
that into a show?
Speaker 2 (11:50):
Now? No, let's talk a little bit about tariff's piece
in the Bloomberg. Trump's tariff threat is already panicking the
junk debt market, Mike. I'm looking at the junk debt
market right now. Junk bonds, as they are affectionately known,
they are bonds that are below investment grade. And I'm
(12:12):
trying to figure out what the panic is because right now,
the high yield the high yield master to option justice
spread basically, like, how big is the difference that investors
have to pay for high yield bonds relative to investment
grade bonds? As I see it right now, it's at
two point seventy three percent, which the only other times
(12:33):
that that is lower, dating back to like the mid nineties,
is nineteen ninety seven, two thousand and seven, and that's it.
So it's not actually panicking the junk debt market. Rather,
what we are seeing is that borrowers who are in
that junk category, they are trying to do some borrowing
(12:55):
before tariffs potentially go into effect just because they don't
know the effec that they might have on their businesses
and they want to lock in these really low rates.
Speaker 4 (13:04):
Yeah, I'm not buying it.
Speaker 5 (13:05):
It's becausing the junk If it were actually causing issues
so far, you would not just be getting a story
about new issues being a problem. There are plenty of
companies who borrow money who will be subject to tariffs
and are considered junk bonds, and you could go sell
their bonds and you would see it reflected in this spread.
(13:25):
And this is the best way to measure nervousness about
the junk bond market. As Chuck mentioned, is look at
the difference between what you get paid from a junk
bond compared to an investment grade one.
Speaker 2 (13:37):
Like as an example, back in the Great Financial Crisis,
on December fifteenth of two thousand and eight if you
wanted to go issue a junk like generic junk bond,
which actually you couldn't issue one if you were buying
one that was already issued, you were getting a twenty
one percent premium over investment grade bonds in order to
do that.
Speaker 3 (13:57):
That was the average that you saw there.
Speaker 2 (13:59):
If you go back to twenty eleven peak of the
Euro debt crisis double dip procession fears, you are getting
paid eight point seven percent above investment grade in the
junk bond market, and.
Speaker 5 (14:13):
To be clear, is because there's a significant risk in
those occasions that you don't get paid back.
Speaker 2 (14:17):
Higher risk of default. If you go back to March
of twenty twenty initial outbreak of COVID, you're getting paid
nine point eight percent above investment grade corporates in order
to bijunk debt today getting paid two point seventy three.
There is no fear in the junk bond market. Again,
(14:37):
this is the only other comps that I have on
record dating back thirty years are nineteen ninety seven and
two thousand and seven.
Speaker 5 (14:45):
So it's a reliable place to look for a f
your gauge, but it's just not flashing any signals right now.
Speaker 2 (14:51):
Oh really, isn't piece in Bloomberg in this god Crypto
markets moving over the last twenty four hours, President like
Donald Trump is playing to release an executive order elevating
crypto as a policy priority and giving industry insiders a
voice within his administration. According to people familiar with his plans,
the orders expected to name crypto as a national imperative
(15:13):
and potentially guide government agencies to work.
Speaker 3 (15:16):
With the industry.
Speaker 2 (15:17):
Now, I think on some things, like I've generally been
kind of open to like, hey, we'll see what happens
on tariffs, you know, we'll see how this all goes.
I just I don't understand why crypto should have any
kind of US national importance. Everyone involved in crypto continues
to tell me how important it is.
Speaker 4 (15:35):
Without explaining why.
Speaker 2 (15:36):
But they can't ever tell me why it's important to
be on the forefront of crypto, And specifically the ones
that like actually tell me something, they're like, well, you know,
it's it's something that's decentralized. So you want the United
States to build a strategic bitcoin reserve. That seems like
you're centralizing something. I can't get any good answers about
(16:00):
why crypto is important other than number goes up. Which look,
if the number goes up in your portfolio and you're
happy with it, fine like that, you do you might?
I can't get anything else out of them.
Speaker 5 (16:11):
My problem is there's a differentiator here between making cryptocurrency
a national priority, as has been discussed here, versus an
incoming administration saying we are going to make it a
priority to focus less on regulating this industry in the
same way that the previous administration does. That latter point,
I think would be reasonable and justifiable from a number
(16:33):
of different perspectives in the incoming Trump administration to say, look,
the previous sec had unreasonable expectations for this industry and
did everything they could prevent it from becoming mainstream, and
we are going to take a more hands off approach
to regulation of the industry. I might disagree, but at
least I can understand that there's a reasonable case to
be made there, at least to your point, where do
(16:57):
you benefit the American public by building a bitcoin reserve?
Where do you benefit the American public by I don't
even know what else we're talking about on this front deregulation.
Sure got it understood, that's you know, long history of
what Republicans stand for.
Speaker 4 (17:14):
All on board.
Speaker 5 (17:17):
This other priorities making it a national priority. I don't
understand one bit how that benefits the average American person.
Speaker 2 (17:29):
And I've been open to like the general idea of hey,
crypto could have some interesting use cases. Look, it's it's
been around for a decade now.
Speaker 5 (17:38):
It comes back to the same thing that we explained
about investments all the time. Can you explain this in
three sentences to a ten year old? That's a good
threshold for like any investment that you are going to make,
is this is why I am buying this, This is
how it is going to benefit me or the individuals
I don't like, forget about a.
Speaker 4 (18:00):
Ten year old.
Speaker 5 (18:01):
I haven't seen anyone make a compelling argument other than well,
the Trump administration is banking a national priority, so it's
going to go up in value. Look out like that's
the main argument I've made is or I've heard is
good speculation tool.
Speaker 2 (18:14):
Well, here's the thing absent being paid like dividends by
a company where you're returning your capital that way or
something along those lines. Ultimately, everyone is looking for someone
to take them out at a higher price than they
went in sure. The question is like, what's the compelling
reason why it should happen? And with some companies you
can say, okay, well, like the market is.
Speaker 3 (18:32):
Growing, and they're growing.
Speaker 2 (18:34):
With crypto, the only thing that you get to is
there's a limited supply. Okay, but there's a limited supply
of a lot of things. Why why is this going
to be the one that matters? And I'm not I'm
not poo poohing like those who have made millions of
dollars on it to this point, like congratulations, like you
(18:54):
as long as like you've realized some of that and
been able to use it for your life, you've won
Like that, that's great.
Speaker 3 (19:00):
But what does it do?
Speaker 5 (19:03):
Man? No, No, beyond all that, I don't really care
what it does. You can speculate on whatever you want.
Explain to me why the US government needs to make
it a national priority? Yes, Like I don't care about
all the round.
Speaker 2 (19:15):
There are some things like semiconductors where you're like, yes,
make it a national priority, because without them our life
is very different.
Speaker 3 (19:22):
What would happen if there's no crypto in the US.
I don't know. Go back to what it was before
crypto fifteen years ago. Let's take a quick break. When
we come back. We got the trivia answer after this.
Speaker 1 (19:42):
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Speaker 6 (20:14):
Trivia questions today was which comedian was the first recipient
of the Mark Twain Prize.
Speaker 3 (20:20):
That would be Richard Pryor.
Speaker 4 (20:22):
Winner today of the.
Speaker 6 (20:24):
Financial Exchange Show T shirt was Dan from Amesbury, Mass.
Congrats to Dan, and we played trivia every day here
on the Financial Exchange. See complete contest rules at Financial
Exchange Show dot com.
Speaker 7 (20:38):
Let's see.
Speaker 5 (20:39):
Do we want to talk about inflation? No, there's another
FED member. She's also suspicious of cutting rates when inflation
is this high. Good fine done.
Speaker 3 (20:50):
There's nothing there. Let's see.
Speaker 4 (20:53):
I want to talk about salt.
Speaker 2 (20:55):
I do too, so it's my favorite of all the spices.
Speaker 3 (21:01):
But that's not the one we're talking about.
Speaker 2 (21:02):
We're talking about the state and local tax deduction referred
to assault and back in twenty seventeen when President Trump
passed the Tax Cuts and Jobs Act. One of the
provisions in there was a ten thousand dollars limit on
the amount of state and local taxes that can be
deducted on a federal income tax return. And it was
(21:23):
constitutionally challenged by a bunch of Northeastern states, most notably
in New York, New Jersey, Maryland, and Connecticut. That was unsuccessful.
It is something where you have a whole bunch of
lawmakers from high tax areas that are Republicans. They've gone
to visit President elect Trump and say, hey, if we
(21:45):
want to extend tax cuts, we've got to do something
about this salt cap because it's hurting our constituents. And
so the question is, well, okay, what's the reality about
who's being impacted by the salt cap and should we
be making changes to it?
Speaker 4 (22:02):
Yeah?
Speaker 3 (22:03):
Is that fair?
Speaker 5 (22:03):
And the article ass raised the salt cap is supposed
to benefit whom exactly?
Speaker 4 (22:09):
And the answer is rich people in blue states, yes,
pretty easy.
Speaker 2 (22:15):
Powerful constituency, yeah, but helped get you elected. It's kind
of a question where you're like, what are we really
doing here? Because it's also going to have a significant
cost if you're talking about raising the salt caps and
or getting rid of it, and I think there's a question,
there's a case to be made where Hey, let's say
(22:36):
that you are a family in New England and what
are averaging comes in New England. They're probably higher than
the rest of the country. So let's say that the
household income eighty thousand.
Speaker 4 (22:48):
Yeah, high, high tens of thousands.
Speaker 2 (22:51):
Okay, so eighty thousands. So let's say in most states
in New England, excluding New Hampshire, which has higher property taxes,
we'll get to them in a minute. Let's say the
average person is paying somewhere in the ballpark of five
percent on their income. Sure, okay, so they're paying four
thousand dollars a year in income tax.
Speaker 3 (23:09):
Yep.
Speaker 2 (23:10):
They are paying property taxes on homes that are again
more valuable than the rest of the country. Let's say
the average home in New England is tax you know,
the tax value, because that's what matters, called five hundred
thousand stead of four hundred thousand.
Speaker 3 (23:24):
Okay, okay.
Speaker 2 (23:26):
Tax rates are typically somewhere in the range of one
to one to quarter percent of that a year, so
call it five to six thousand bucks.
Speaker 5 (23:31):
Okay, so you've come up so far with about nine
to ten thousand dollars in state and local taxes.
Speaker 3 (23:36):
Correct the average family in New England.
Speaker 2 (23:39):
I'm not saying all of them, because again there's plenty
of you listening that are like, hey, I make more
than that, Like I'm getting that, I'm getting somewhere. But
I would say the average family in New England probably
doesn't feel a huge impact from this.
Speaker 1 (23:50):
No.
Speaker 2 (23:51):
If you are talking about the average family inside of
four ninety five in Boston, yeah, they certainly do because
they're probably paying state and local taxes. They're closer to
twenty to twenty five thousand a year as my guess.
Speaker 3 (24:04):
And again this is a.
Speaker 2 (24:05):
Big population talking probably a million people, where that might
be the average. If you talk to people in Portland, Maine,
where property values are higher and incomes are probably higher
than the rest of the state of Maine, that's probably.
Speaker 3 (24:17):
The case as well.
Speaker 2 (24:18):
There's people you know on the Portland affiliate listening to
us or are like, they're not in the long going, yep,
I pay way more in taxes than ten thousand years,
so we get it.
Speaker 4 (24:26):
Southern Connecticut, same story as the greater Boston area.
Speaker 2 (24:30):
So I think there's a case to be made, hey,
because of high cost of living areas even within these states,
could you, you know, talk about do we want to
raise the salt cap from ten thousand to twenty thousand
or ten to twenty five. I think there's at least
a reasonable case there. I don't know how much it's
going to cost, But in terms of do you get
rid of it altogether given all of the other fiscal
(24:52):
issues that we're talking about, in the cost of doing so,
it's kind of a hard hard one to justify give
in where we are.
Speaker 5 (25:01):
Today, Well, it's all going to come down to how
much are you willing to spend more on deficits? Right Like,
I'm sure there are lawmakers who are going to be
pushing hard to do away with the salt cap entirely
and allow multimillionaires in New England to deduct every penny
of taxes that they pay to the Commonwealth or to
(25:22):
Connecticut or to Maine or any of these states. That
would cost a lot of money to the federal government.
And so what's a what's a bigger priority? That or
cutting corporate taxes that or cutting the highest federal income
tax bracket that, or doing away or even increasing further
the estate tax limit. There are so many policy priorities,
(25:44):
not the least of which we're cutting taxes on. So
security tips over time, Like, you can't just have a
lot of competing, can't just have all fun all the time?
Speaker 3 (25:54):
We can? We can. I know I've become.
Speaker 5 (26:00):
You've been the crotchety old man. Get off my lawn
for a number of years, Chuck, This isn't I know.
Speaker 2 (26:04):
It started with the drones and now it's with the
salt cap. Yeah, I'm just getting crotchetier and crotchetier. That
should be the new name of our show, Crotchety and Crotchetyer,
the crochety Exchange.
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Speaker 2 (27:22):
So uh, this is another piece that I just I
love the dichotomy between what's said in the headline and
what's actually going on. Electric vehicle sales have stumbled. What
went wrong and what it talks about is that sales
of electric passenger vehicles and plug in hybrids climbed by
twenty four percent and twenty twenty four.
Speaker 4 (27:40):
It's making up a fifth of new sales, isn't it.
Speaker 2 (27:42):
Yes, it's the highest percentage of new sales that we've
had in the United States. Ever, now the rate of
growth is slowing, but that doesn't mean that the sales stumbled.
So again, I think there's there's something when we talk
about evs They are still growing in terms of market share,
they are just not growing as rapidly as they used to.
In particular, the US saw EV sales up by seven
(28:05):
percent last year, and and really the problem here for
automakers is they were projecting annual like twenty to forty
percent gains in EV sales and they're seeing mid to
high single digits. Yeah, and so it still is something
where automakers are now trying to, you know, revamp their
plans given what the real demand looks like for these things.
(28:28):
But I think it's it's one where, especially on the
hybrid side of things, I think there's a ton of
latent demand there for people that look at it and say, yeah,
I like the idea of better gas mileage and the
way some of these new hybrids are being utilized. Hey,
they're not just using the electric motor as you know,
(28:48):
something to boost mileage, but you can also use it
in conjunction with the internal combustion engine to boost power
and acceleration and things like that.
Speaker 5 (28:56):
I'm just gonna keep I'm just gonna keep bringing it up.
I love, love, love the idea of the full ev
with the gas generator. Get it here sooner.
Speaker 2 (29:04):
There's the ram Rams coming out a pickup version of
that this year. There's another one that's on the market
also already, I forget haven't seen it. I thought someone
else was already. Maybe someone's coming to market this year.
And then the one that I'm particularly interested in is
the revitalization of the Scout brand in a couple of years.
Speaker 4 (29:22):
Dw doing that.
Speaker 2 (29:23):
They are, I'm wondering what the demand is going to be.
They announced they recently passed fifty thousand refundable pre orders. Now,
keep in mind that the cyber Truck had two million
refundable pre orders and they've basically run out of buyers
for them within the first year.
Speaker 3 (29:38):
Correct.
Speaker 2 (29:39):
But I also wonder if people are behaving differently than
they did when they were pre ordering these things a
couple of years ago. But I'm wondering how much juice
is there from these pre orders. And I don't really
have any good answers. There's take a quick break.
Speaker 3 (29:53):
When we come back. We're joined by Paul A Monica
from Baron's. Right after this.
Speaker 1 (29:58):
Fine daily interviews and full shows of the Financial Exchange
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(30:21):
for the latest business and financial news in New England
and around the country. This is the Financial Exchange Radio Network.
Speaker 7 (30:28):
Ladies and gentlemen, the weekend as promised for now, joined
by Paulmonica from Barons And we're talking Trump Media today.
Speaker 3 (30:44):
Paul, how you doing.
Speaker 8 (30:46):
I'm good to there are you?
Speaker 3 (30:47):
Uh, we're doing well.
Speaker 1 (30:48):
So.
Speaker 2 (30:49):
Trump Media and Technology Corporation has been a publicly traded
company for when did they actually complete this back acquisition?
I can't remember now.
Speaker 8 (30:58):
Yeah, it was late March of twenty twenty four, so yeah,
it'll be a year, you know, relatively soon.
Speaker 2 (31:07):
And currently company's got a market cap of nine billion dollars.
According to their most recent financials, UH revenue for the
last twelve months is about three point seven million dollars.
So how do we reconcile this as an actual business
as opposed to you know, kind of what it was
used as this year, which is a vehicle for investors, traders,
(31:27):
gamblers to use it to bet on the fortunes of
Trump in the presidential election.
Speaker 8 (31:33):
Yeah, it's a great question. I mean, this is still
a company that is incredibly tiny in the grand scheme
of things when you look at other social media stocks,
much smaller obviously than meta platforms, but even you know,
tinier than companies like Snapchat and read It as well.
(31:56):
So it's hard to really get a sense of what's
going to drive the stock other than you know, a
continued fascination with Trump. I mean, we know that the
fundamentals are not particularly strong for the company, whether or
not Trump Medium makes some acquisitions which they've hinted at
(32:19):
potentially in fintech cryptocurrencies that could be an avenue of
growth to the company. But you know, I think, as
you pointed out, it's been largely a vehicle for you know,
retail investors, probably ones that are Trump supporters, to kind
of show their affinity for the president of Lack, who's
(32:41):
about to become the forty seventh president. This is really
uncharted territory. What happens next when you have a company
that you know is going to be stilled tied to
the leader of the free world, but he, in theory,
can't really do much at the company because he now
(33:02):
has his shares and a revocable trust controlled by his son.
He's not going to be, you know, really doing much
from an operational standpoint, because he's going to be busy
managing the United States of America.
Speaker 2 (33:15):
And one of the pieces I guess that's just kind
of interesting to me is you look at it, and
the day after the election on November sixth, the stock
closed about thirty six bucks to share. Today it's forty two,
and it's not like it's done anything crazy during that time.
So you're kind of sitting here just in this holding pattern.
Have we ever seen anything like this before?
Speaker 8 (33:35):
Nothing in recent memory that I can think of. I mean,
just remember at the time of Trump's first presidency, and
there was a you know, a revgable trust that was
set up at that point. I mean, the assets of
the Trump Foundation we're all put in that trust. But
it was not a publicly traded company. You know, this
(33:57):
is really unique, especially also because you know it's a
company that is competing with much larger social media firms.
Then you throw in the fact that you have Trump
romance if you will, with Elon Musk, who is the
(34:18):
owner of X formerly Twitter. Uh, you know that that
complicates things as well. I mean, I can't imagine that,
you know, investors might be ignoring the fact that you know,
now that the president elect is back on X after
that band was lifted by Musk. It seemingly makes truth
(34:40):
Social a little bit less of a uh you know,
an investible proposition that makes sense because you don't have
that scarcity value if you will not as if truth
Social is the only place where Trump will talk, you
know he does, you know post on on Twitter X.
Speaker 2 (34:59):
And well, looking at this, you mentioned hey that that
you know, they have a number of potential things that
they are kicking around as businesses they may try to
acquire or get into. Do any of those seem more
likely than others at the moments.
Speaker 8 (35:14):
I think crypto makes the most sense given how uh
you know, Trump has really embraced bitcoin over the past year,
and there's the talk of whether or not we could
have a bigcoin strategic reserve. With you know, Gary Genstler
stepping down as the head of the SEC on inauguration day,
(35:37):
we should have much friendlier regulations for crypto from the
new regime at the SEC. There were rumors last year
of Trump Media potentially buying a crypto company publicly traded
called back back Set. At the time that you know
wouldn't comment on any rumors and speculations, so that chatter
(36:00):
might still be out there if if you had the bet.
I mean, fintech and crypto in particular probably makes the
most sense for Trump media and technology. I'd say more
on the technology side than the media side as a
business would be where they would look to expand.
Speaker 2 (36:16):
All right, very good, Paul, appreciate you joining us today.
Have a great weekend and we'll catch up with you soon.
Speaker 8 (36:22):
Thanks a lot. I have a Gooway.
Speaker 2 (36:23):
Guys, it's Paul Monica from Baron's talking about Trump Media.
What else you got for me?
Speaker 5 (36:30):
Mike Taylor Swift at the end of the year, allegedly
breathing some life into Target. The retailer got a holiday boost,
apparently from an exclusive deal to sell the megastars eras
tor book.
Speaker 4 (36:42):
Look.
Speaker 5 (36:42):
I'd recognize it's Taylor Swift, but I have some rules.
You don't make friends with salad or books. I just
I don't think that that one is going to work
for the American public. I see why Disney was able
to kill it with their you know, with their ownership
of sexual millionaires hoppers again, but what is this going
(37:03):
to do to boost your band brand long term?
Speaker 4 (37:07):
For Target?
Speaker 3 (37:08):
Nothing?
Speaker 5 (37:09):
Absolutely nothing. Disney, you only rights to that movie forever.
If that's the case, I don't now. Actually, I think
Taylor Swift owns all the rights to the movie, so
Disney you might have just seen the temporary boost as well.
But again, I don't really think that works for Target.
I don't think it's gonna do anything for their long
term business, and they're just gonna have to pay a
bunch of money in the future if they want to
(37:29):
continue to be able to boot sales.
Speaker 3 (37:31):
Like this did either.
Speaker 2 (37:32):
If you happen to watch the SpaceX Starship launch last night,
no I did. I just I love watching these things,
and I got to admit, when you see like the
booster stage of the rocket come back down and get
caught by the tower, I'm sitting there, I'm like, this
is freaking amazing.
Speaker 3 (37:48):
This is just awesome stuff.
Speaker 1 (37:50):
Now.
Speaker 2 (37:50):
That's an awesome part was that the actual starship it disintegrated
and exploded mid flight about ten minutes after launch, sending
a stream of stuff back down to the atmosphere, which
wasn't great. Wait, the thing I always come back to
on this, and look, the FA is gonna have some
questions because of where the debris was coming down. They
had to rewrite a bunch of commercial jetliners so they
didn't get hit by the stuff.
Speaker 3 (38:09):
Real problem.
Speaker 2 (38:11):
But ultimately, you do have failures when you're trying to
send new stuff into space, and that's part of the process.
So I again, there's gonna be some questions about where
things happen.
Speaker 3 (38:22):
But I still think this is amazing stuff. We're done
for the week.
Speaker 2 (38:26):
See a Monday on the Financial Exchange.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:21):
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a donation today. This is the Financial Exchange with Chuck
(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and talker with you, kicking off our number
two of the financial exchange. And as we sit here
right now, we got a nice broad based rally taking
place across US markets, led by big tech. But the
Dow is up three hundred and ninety four points about
one percent, the S and P up sixty four points
about one percent, back above six thousand bight I add,
(01:32):
and the Nasdak nas dak.
Speaker 3 (01:37):
Is up to nine. Well what what?
Speaker 2 (01:41):
First of all, there should be no que without a U.
And if you do see a queue, isn't it quah?
It should be ac k Yeah, nas dak tell me
to start saying. Nas DAK is up two hundred and
ninety six points right now, about one and a half percent,
and that is largely being led by the usual suspects.
(02:02):
And Vidia up three and a quarter, Tesla up three
and a quarter, Apple, Amazon, Google, and Microsoft all up
more than one percent. Tenure US Treasury is flat today
at four point six percent. We've got oil down sixty
two cents a barrel to seventy eight h six, triple
a national average for gas prices continuing to move up
though another one point two cents to three eleven and
(02:22):
five tenths of a cent. And we've got gold today
down thirty cents an ounce barely why they even wake
up and trade it today?
Speaker 3 (02:28):
Who knows?
Speaker 2 (02:29):
That is at twenty seven to fifty and fifty cents.
Let's go over to China, which is a country with
lots of people, about seven thousand miles away from the United.
Speaker 4 (02:42):
States, one point four billion of them, about a.
Speaker 2 (02:44):
Lot of people, and their population is continuing to decline,
even though their birth rate ticked up just a wee
little bit. They are seeing a declining population that is
likely to continue for the foreseeable future.
Speaker 3 (03:00):
Yeah, they're very easy.
Speaker 5 (03:02):
Summary here. Not enough babies and zero immigration or close
to it. Yes, not a lot of people saying love
what I'm seeing out of China going to move over there.
There probably actually would be plenty of people in really
impoverished countries who would love to be there, But for
a number of reasons, China does not have really any
immigration to speak of.
Speaker 2 (03:23):
No, and you have demographers, which is, how does one
become a demographer? How often do you have to demogue?
Speaker 4 (03:33):
I don't know, Chuck.
Speaker 2 (03:34):
In any case, frequently they had expected to see an
increase in birth numbers.
Speaker 3 (03:39):
Last year.
Speaker 2 (03:39):
It was the Year of the Dragon for China, which
is an auspicious year to have a baby in, so
this is something that was, you know, kind of expected.
But overall, the Chinese birth rate is less than half
of the typically agreed upon replacement rate of two point
one percent, so their population is going going to continue
(04:01):
to decline. And I actually found a great chart today.
This is from Visual Capitalist, and it's basically these demographic
pyramids that you have showing hey, how do demographics in
different countries and regions stack up visually? Like what percentage
of your population or how many people fall into each
(04:21):
little bucket that you have. And India and China right
now actually have about the same number of people. Hasn't
always been that way, but India's had a pretty strong
birth rate in recent years, whereas China obviously has not.
China right now is a median age of thirty eight years,
and if you look at the population of people age
zero to five, it is about half the population of
(04:44):
age people fifty to fifty five. So it's like there
is a stark difference that's happening there in India. On
the other hand, the population of zero to five year
olds is about thirty percent larger than fifty to fifty
five year olds. Wenna have Japan, which is another country
that has a significant demographic problem. They look pretty similar
(05:05):
to China quite honestly, in the United States, where we
talk about the demographic issues that we have, our median
age is thirty nine years, about the same as China,
but it is skewed by the fact that we have
a larger percentage of our population that is sixty plus.
Relative to China, our young people, our younger cohorts are
(05:25):
zero to five. Demographic is actually only about fifteen to
twenty percent smaller than our age fifty to fifty five.
Speaker 5 (05:32):
Do you have any data on eighty plus population, because
this article estimates their about five Chinese population about five
percent eighty and over by the end of this year, and.
Speaker 2 (05:42):
The US is approximately double that. Okay, interesting, yeah, US
is approximately double that. Then you've got Europe, which looks
pretty darn similar to the US. The US the reason
that we have a growing population while a lot of
European countries are pretty stagnant. We have more immigration that
happens into the USA. That's been a major driver of
population growth. The one place on Earth that is completely
(06:05):
defying all of this is Africa, where the median age
for the entire continent is somewhere between eighteen and nineteen
years old and the zero to five demographic is And
again this is visual, so I'm eyeballing this one, and
it's kind of hard to eyeball. It looks like it's
(06:26):
about five times as big as the age.
Speaker 3 (06:28):
Fifty to fifty five cohort.
Speaker 4 (06:29):
Wow.
Speaker 2 (06:30):
Now, part of this is because life expectancy in Africa
sixty three years. Yeah, So that is a pretty stark
difference in basically everywhere else that I described. You have
a life expectancy that is fifteen to twenty years longer
than what is expected there.
Speaker 5 (06:48):
So bringing this back to China for a moment, Yeah,
there has been a lot written about China facing the
Japan problem. Japan was the growing economy, the the area
of all manufacturing in the sixties, seventies, and eighties. Yeah,
(07:08):
and for a number of reasons, probably not population alone,
hit several economic lost decades throughout the nineties and two thousands,
and I would not be producing an original thought if
I compared China's potential economic issues to that of China.
There has been to Japan, excuse me, to that of Japan.
(07:30):
There has been a lot written about this, and it's
certainly no guarantee that China ends up going that direction.
But boy, are they really really trying to push different
ways to face off with and fix this demographic issue.
Speaker 4 (07:47):
I'll be honest, They can't outside of the only way
that you do.
Speaker 5 (07:53):
It is is through immigration, and they have a society
that that doesn't seem like a possibility.
Speaker 2 (07:59):
Well, it's not even it's it's not a possibility for
a number of different reasons.
Speaker 1 (08:03):
Sure.
Speaker 2 (08:04):
The first one is, okay, how do you actually encourage
immigration to China, which is a pretty restrictive system to
live under for those who have lived elsewhere. The second
is the sheer number of people that you would need
to bring in in order to make a dent in
(08:24):
the problem. Right, It's this is not you know, Portugal
with was Portugal have like thirty million people in population.
It's not Israel with seven million people, where you're like, hey,
if we bring in like a million people, we added
like fourteen percent of the population. Ten Portugal is ten
to five. Correct, Spain's thirty million? Oh a Tucker noodle
(08:47):
that for a little bit. In any case you forty eight.
Speaker 3 (08:51):
I'm who cares difference.
Speaker 2 (08:55):
In any case, you got one point four billion people there.
Even if you bring in fourteen million, fourteen million people,
you've changed the tide by one percent.
Speaker 3 (09:07):
Yeah, one percent to do that.
Speaker 2 (09:10):
And think of all the effort that you would have
to do in order to bring fourteen million people into
China permanently.
Speaker 5 (09:15):
Yeah, it makes you not scratch your head for terribly
long as to why China is so very interested in automation,
artificial intelligence and ways that they can make manufacturing really, really,
really efficient.
Speaker 3 (09:30):
Let's take a quick break.
Speaker 2 (09:32):
When we come back, we'll do a little bit of
trivia and we'll talk tariffs right after this.
Speaker 1 (09:37):
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(10:00):
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Speaker 6 (10:05):
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DAV five k dot Boston. Time for trivia here on
the Financial Exchange. Earlier this week, it was announced that
Coda and O'Brien would be the twenty twenty five recipient
(10:50):
of the Mark Twain Prize. The Mark Twain Prize is
awarded to those who have had an impact on American
society in a way similar to Mark Twain. Trivia question today,
which comedian was the first recipient of the Mark Twain Prize?
I don't know why I can't talk? Which comedian was
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(11:14):
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Speaker 3 (11:32):
Do you guys know that he had a son choo
choo like a train to Twain? God, it's not my material.
Speaker 2 (11:44):
Let's say, Frank our own special from everybody else, Raymond,
But uh, I.
Speaker 3 (11:48):
Just got a when'd you get a chance to get
that into a show?
Speaker 2 (11:50):
Now? No, let's talk a little bit about tariff's piece
in the Bloomberg. Trump's tariff threat is already panicking the
junk debt market, Mike. I'm looking at the junk debt
market right now. Junk bonds, as they are affectionately known,
they are bonds that are below investment grade. And I'm
(12:12):
trying to figure out what the panic is because right now,
the high yield the high yield master to option justice
spread basically, like, how big is the difference that investors
have to pay for high yield bonds relative to investment
grade bonds? As I see it right now, it's at
two point seventy three percent, which the only other times
(12:33):
that that is lower, dating back to like the mid nineties,
is nineteen ninety seven, two thousand and seven, and that's it.
So it's not actually panicking the junk debt market. Rather,
what we are seeing is that borrowers who are in
that junk category, they are trying to do some borrowing
(12:55):
before tariffs potentially go into effect just because they don't
know the effec that they might have on their businesses
and they want to lock in these really low rates.
Speaker 4 (13:04):
Yeah, I'm not buying it.
Speaker 5 (13:05):
It's becausing the junk If it were actually causing issues
so far, you would not just be getting a story
about new issues being a problem. There are plenty of
companies who borrow money who will be subject to tariffs
and are considered junk bonds, and you could go sell
their bonds and you would see it reflected in this spread.
(13:25):
And this is the best way to measure nervousness about
the junk bond market. As Chuck mentioned, is look at
the difference between what you get paid from a junk
bond compared to an investment grade one.
Speaker 2 (13:37):
Like as an example, back in the Great Financial Crisis,
on December fifteenth of two thousand and eight if you
wanted to go issue a junk like generic junk bond,
which actually you couldn't issue one if you were buying
one that was already issued, you were getting a twenty
one percent premium over investment grade bonds in order to
do that.
Speaker 3 (13:57):
That was the average that you saw there.
Speaker 2 (13:59):
If you go back to twenty eleven peak of the
Euro debt crisis double dip procession fears, you are getting
paid eight point seven percent above investment grade in the
junk bond market, and.
Speaker 5 (14:13):
To be clear, is because there's a significant risk in
those occasions that you don't get paid back.
Speaker 2 (14:17):
Higher risk of default. If you go back to March
of twenty twenty initial outbreak of COVID, you're getting paid
nine point eight percent above investment grade corporates in order
to bijunk debt today getting paid two point seventy three.
There is no fear in the junk bond market. Again,
(14:37):
this is the only other comps that I have on
record dating back thirty years are nineteen ninety seven and
two thousand and seven.
Speaker 5 (14:45):
So it's a reliable place to look for a f
your gauge, but it's just not flashing any signals right now.
Speaker 2 (14:51):
Oh really, isn't piece in Bloomberg in this god Crypto
markets moving over the last twenty four hours, President like
Donald Trump is playing to release an executive order elevating
crypto as a policy priority and giving industry insiders a
voice within his administration. According to people familiar with his plans,
the orders expected to name crypto as a national imperative
(15:13):
and potentially guide government agencies to work.
Speaker 3 (15:16):
With the industry.
Speaker 2 (15:17):
Now, I think on some things, like I've generally been
kind of open to like, hey, we'll see what happens
on tariffs, you know, we'll see how this all goes.
I just I don't understand why crypto should have any
kind of US national importance. Everyone involved in crypto continues
to tell me how important it is.
Speaker 4 (15:35):
Without explaining why.
Speaker 2 (15:36):
But they can't ever tell me why it's important to
be on the forefront of crypto, And specifically the ones
that like actually tell me something, they're like, well, you know,
it's it's something that's decentralized. So you want the United
States to build a strategic bitcoin reserve. That seems like
you're centralizing something. I can't get any good answers about
(16:00):
why crypto is important other than number goes up. Which look,
if the number goes up in your portfolio and you're
happy with it, fine like that, you do you might?
I can't get anything else out of them.
Speaker 5 (16:11):
My problem is there's a differentiator here between making cryptocurrency
a national priority, as has been discussed here, versus an
incoming administration saying we are going to make it a
priority to focus less on regulating this industry in the
same way that the previous administration does. That latter point,
I think would be reasonable and justifiable from a number
(16:33):
of different perspectives in the incoming Trump administration to say, look,
the previous sec had unreasonable expectations for this industry and
did everything they could prevent it from becoming mainstream, and
we are going to take a more hands off approach
to regulation of the industry. I might disagree, but at
least I can understand that there's a reasonable case to
be made there, at least to your point, where do
(16:57):
you benefit the American public by building a bitcoin reserve?
Where do you benefit the American public by I don't
even know what else we're talking about on this front deregulation.
Sure got it understood, that's you know, long history of
what Republicans stand for.
Speaker 4 (17:14):
All on board.
Speaker 5 (17:17):
This other priorities making it a national priority. I don't
understand one bit how that benefits the average American person.
Speaker 2 (17:29):
And I've been open to like the general idea of hey,
crypto could have some interesting use cases. Look, it's it's
been around for a decade now.
Speaker 5 (17:38):
It comes back to the same thing that we explained
about investments all the time. Can you explain this in
three sentences to a ten year old? That's a good
threshold for like any investment that you are going to make,
is this is why I am buying this, This is
how it is going to benefit me or the individuals
I don't like, forget about a.
Speaker 4 (18:00):
Ten year old.
Speaker 5 (18:01):
I haven't seen anyone make a compelling argument other than well,
the Trump administration is banking a national priority, so it's
going to go up in value. Look out like that's
the main argument I've made is or I've heard is
good speculation tool.
Speaker 2 (18:14):
Well, here's the thing absent being paid like dividends by
a company where you're returning your capital that way or
something along those lines. Ultimately, everyone is looking for someone
to take them out at a higher price than they
went in sure. The question is like, what's the compelling
reason why it should happen? And with some companies you
can say, okay, well, like the market is.
Speaker 3 (18:32):
Growing, and they're growing.
Speaker 2 (18:34):
With crypto, the only thing that you get to is
there's a limited supply. Okay, but there's a limited supply
of a lot of things. Why why is this going
to be the one that matters? And I'm not I'm
not poo poohing like those who have made millions of
dollars on it to this point, like congratulations, like you
(18:54):
as long as like you've realized some of that and
been able to use it for your life, you've won
Like that, that's great.
Speaker 3 (19:00):
But what does it do?
Speaker 5 (19:03):
Man? No, No, beyond all that, I don't really care
what it does. You can speculate on whatever you want.
Explain to me why the US government needs to make
it a national priority? Yes, Like I don't care about
all the round.
Speaker 2 (19:15):
There are some things like semiconductors where you're like, yes,
make it a national priority, because without them our life
is very different.
Speaker 3 (19:22):
What would happen if there's no crypto in the US.
I don't know. Go back to what it was before
crypto fifteen years ago. Let's take a quick break. When
we come back. We got the trivia answer after this.
Speaker 1 (19:42):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Text us at six one seven three, six two one
three eighty five with your comments and questions about today's
show and let us know what you think about the
story as we are covering. This is the Financial Exchange
(20:02):
Radio Network.
Speaker 6 (20:14):
Trivia questions today was which comedian was the first recipient
of the Mark Twain Prize.
Speaker 3 (20:20):
That would be Richard Pryor.
Speaker 4 (20:22):
Winner today of the.
Speaker 6 (20:24):
Financial Exchange Show T shirt was Dan from Amesbury, Mass.
Congrats to Dan, and we played trivia every day here
on the Financial Exchange. See complete contest rules at Financial
Exchange Show dot com.
Speaker 7 (20:38):
Let's see.
Speaker 5 (20:39):
Do we want to talk about inflation? No, there's another
FED member. She's also suspicious of cutting rates when inflation
is this high. Good fine done.
Speaker 3 (20:50):
There's nothing there. Let's see.
Speaker 4 (20:53):
I want to talk about salt.
Speaker 2 (20:55):
I do too, so it's my favorite of all the spices.
Speaker 3 (21:01):
But that's not the one we're talking about.
Speaker 2 (21:02):
We're talking about the state and local tax deduction referred
to assault and back in twenty seventeen when President Trump
passed the Tax Cuts and Jobs Act. One of the
provisions in there was a ten thousand dollars limit on
the amount of state and local taxes that can be
deducted on a federal income tax return. And it was
(21:23):
constitutionally challenged by a bunch of Northeastern states, most notably
in New York, New Jersey, Maryland, and Connecticut. That was unsuccessful.
It is something where you have a whole bunch of
lawmakers from high tax areas that are Republicans. They've gone
to visit President elect Trump and say, hey, if we
(21:45):
want to extend tax cuts, we've got to do something
about this salt cap because it's hurting our constituents. And
so the question is, well, okay, what's the reality about
who's being impacted by the salt cap and should we
be making changes to it?
Speaker 4 (22:02):
Yeah?
Speaker 3 (22:03):
Is that fair?
Speaker 5 (22:03):
And the article ass raised the salt cap is supposed
to benefit whom exactly?
Speaker 4 (22:09):
And the answer is rich people in blue states, yes,
pretty easy.
Speaker 2 (22:15):
Powerful constituency, yeah, but helped get you elected. It's kind
of a question where you're like, what are we really
doing here? Because it's also going to have a significant
cost if you're talking about raising the salt caps and
or getting rid of it, and I think there's a question,
there's a case to be made where Hey, let's say
(22:36):
that you are a family in New England and what
are averaging comes in New England. They're probably higher than
the rest of the country. So let's say that the
household income eighty thousand.
Speaker 4 (22:48):
Yeah, high, high tens of thousands.
Speaker 2 (22:51):
Okay, so eighty thousands. So let's say in most states
in New England, excluding New Hampshire, which has higher property taxes,
we'll get to them in a minute. Let's say the
average person is paying somewhere in the ballpark of five
percent on their income. Sure, okay, so they're paying four
thousand dollars a year in income tax.
Speaker 3 (23:09):
Yep.
Speaker 2 (23:10):
They are paying property taxes on homes that are again
more valuable than the rest of the country. Let's say
the average home in New England is tax you know,
the tax value, because that's what matters, called five hundred
thousand stead of four hundred thousand.
Speaker 3 (23:24):
Okay, okay.
Speaker 2 (23:26):
Tax rates are typically somewhere in the range of one
to one to quarter percent of that a year, so
call it five to six thousand bucks.
Speaker 5 (23:31):
Okay, so you've come up so far with about nine
to ten thousand dollars in state and local taxes.
Speaker 3 (23:36):
Correct the average family in New England.
Speaker 2 (23:39):
I'm not saying all of them, because again there's plenty
of you listening that are like, hey, I make more
than that, Like I'm getting that, I'm getting somewhere. But
I would say the average family in New England probably
doesn't feel a huge impact from this.
Speaker 1 (23:50):
No.
Speaker 2 (23:51):
If you are talking about the average family inside of
four ninety five in Boston, yeah, they certainly do because
they're probably paying state and local taxes. They're closer to
twenty to twenty five thousand a year as my guess.
Speaker 3 (24:04):
And again this is a.
Speaker 2 (24:05):
Big population talking probably a million people, where that might
be the average. If you talk to people in Portland, Maine,
where property values are higher and incomes are probably higher
than the rest of the state of Maine, that's probably.
Speaker 3 (24:17):
The case as well.
Speaker 2 (24:18):
There's people you know on the Portland affiliate listening to
us or are like, they're not in the long going, yep,
I pay way more in taxes than ten thousand years,
so we get it.
Speaker 4 (24:26):
Southern Connecticut, same story as the greater Boston area.
Speaker 2 (24:30):
So I think there's a case to be made, hey,
because of high cost of living areas even within these states,
could you, you know, talk about do we want to
raise the salt cap from ten thousand to twenty thousand
or ten to twenty five. I think there's at least
a reasonable case there. I don't know how much it's
going to cost, But in terms of do you get
rid of it altogether given all of the other fiscal
(24:52):
issues that we're talking about, in the cost of doing so,
it's kind of a hard hard one to justify give
in where we are.
Speaker 5 (25:01):
Today, Well, it's all going to come down to how
much are you willing to spend more on deficits? Right Like,
I'm sure there are lawmakers who are going to be
pushing hard to do away with the salt cap entirely
and allow multimillionaires in New England to deduct every penny
of taxes that they pay to the Commonwealth or to
(25:22):
Connecticut or to Maine or any of these states. That
would cost a lot of money to the federal government.
And so what's a what's a bigger priority? That or
cutting corporate taxes that or cutting the highest federal income
tax bracket that, or doing away or even increasing further
the estate tax limit. There are so many policy priorities,
(25:44):
not the least of which we're cutting taxes on. So
security tips over time, Like, you can't just have a
lot of competing, can't just have all fun all the time?
Speaker 3 (25:54):
We can? We can. I know I've become.
Speaker 5 (26:00):
You've been the crotchety old man. Get off my lawn
for a number of years, Chuck, This isn't I know.
Speaker 2 (26:04):
It started with the drones and now it's with the
salt cap. Yeah, I'm just getting crotchetier and crotchetier. That
should be the new name of our show, Crotchety and Crotchetyer,
the crochety Exchange.
Speaker 6 (26:18):
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Speaker 2 (27:22):
So uh, this is another piece that I just I
love the dichotomy between what's said in the headline and
what's actually going on. Electric vehicle sales have stumbled. What
went wrong and what it talks about is that sales
of electric passenger vehicles and plug in hybrids climbed by
twenty four percent and twenty twenty four.
Speaker 4 (27:40):
It's making up a fifth of new sales, isn't it.
Speaker 2 (27:42):
Yes, it's the highest percentage of new sales that we've
had in the United States. Ever, now the rate of
growth is slowing, but that doesn't mean that the sales stumbled.
So again, I think there's there's something when we talk
about evs They are still growing in terms of market share,
they are just not growing as rapidly as they used to.
In particular, the US saw EV sales up by seven
(28:05):
percent last year, and and really the problem here for
automakers is they were projecting annual like twenty to forty
percent gains in EV sales and they're seeing mid to
high single digits. Yeah, and so it still is something
where automakers are now trying to, you know, revamp their
plans given what the real demand looks like for these things.
(28:28):
But I think it's it's one where, especially on the
hybrid side of things, I think there's a ton of
latent demand there for people that look at it and say, yeah,
I like the idea of better gas mileage and the
way some of these new hybrids are being utilized. Hey,
they're not just using the electric motor as you know,
(28:48):
something to boost mileage, but you can also use it
in conjunction with the internal combustion engine to boost power
and acceleration and things like that.
Speaker 5 (28:56):
I'm just gonna keep I'm just gonna keep bringing it up.
I love, love, love the idea of the full ev
with the gas generator. Get it here sooner.
Speaker 2 (29:04):
There's the ram Rams coming out a pickup version of
that this year. There's another one that's on the market
also already, I forget haven't seen it. I thought someone
else was already. Maybe someone's coming to market this year.
And then the one that I'm particularly interested in is
the revitalization of the Scout brand in a couple of years.
Speaker 4 (29:22):
Dw doing that.
Speaker 2 (29:23):
They are, I'm wondering what the demand is going to be.
They announced they recently passed fifty thousand refundable pre orders. Now,
keep in mind that the cyber Truck had two million
refundable pre orders and they've basically run out of buyers
for them within the first year.
Speaker 3 (29:38):
Correct.
Speaker 2 (29:39):
But I also wonder if people are behaving differently than
they did when they were pre ordering these things a
couple of years ago. But I'm wondering how much juice
is there from these pre orders. And I don't really
have any good answers. There's take a quick break.
Speaker 3 (29:53):
When we come back. We're joined by Paul A Monica
from Baron's. Right after this.
Speaker 1 (29:58):
Fine daily interviews and full shows of the Financial Exchange
on how are YouTube page? Get cut up on anything
and everything you might have missed. This is the Financial
Exchange Radio Network. Miss any of the show. Catch up
at your convenience by visiting Financial Exchange Show dot com
and clicking the on demand icon, where you'll find all
of our interviews in full shows. This is your home
(30:21):
for the latest business and financial news in New England
and around the country. This is the Financial Exchange Radio Network.
Speaker 7 (30:28):
Ladies and gentlemen, the weekend as promised for now, joined
by Paulmonica from Barons And we're talking Trump Media today.
Speaker 3 (30:44):
Paul, how you doing.
Speaker 8 (30:46):
I'm good to there are you?
Speaker 3 (30:47):
Uh, we're doing well.
Speaker 1 (30:48):
So.
Speaker 2 (30:49):
Trump Media and Technology Corporation has been a publicly traded
company for when did they actually complete this back acquisition?
I can't remember now.
Speaker 8 (30:58):
Yeah, it was late March of twenty twenty four, so yeah,
it'll be a year, you know, relatively soon.
Speaker 2 (31:07):
And currently company's got a market cap of nine billion dollars.
According to their most recent financials, UH revenue for the
last twelve months is about three point seven million dollars.
So how do we reconcile this as an actual business
as opposed to you know, kind of what it was
used as this year, which is a vehicle for investors, traders,
(31:27):
gamblers to use it to bet on the fortunes of
Trump in the presidential election.
Speaker 8 (31:33):
Yeah, it's a great question. I mean, this is still
a company that is incredibly tiny in the grand scheme
of things when you look at other social media stocks,
much smaller obviously than meta platforms, but even you know,
tinier than companies like Snapchat and read It as well.
(31:56):
So it's hard to really get a sense of what's
going to drive the stock other than you know, a
continued fascination with Trump. I mean, we know that the
fundamentals are not particularly strong for the company, whether or
not Trump Medium makes some acquisitions which they've hinted at
(32:19):
potentially in fintech cryptocurrencies that could be an avenue of
growth to the company. But you know, I think, as
you pointed out, it's been largely a vehicle for you know,
retail investors, probably ones that are Trump supporters, to kind
of show their affinity for the president of Lack, who's
(32:41):
about to become the forty seventh president. This is really
uncharted territory. What happens next when you have a company
that you know is going to be stilled tied to
the leader of the free world, but he, in theory,
can't really do much at the company because he now
(33:02):
has his shares and a revocable trust controlled by his son.
He's not going to be, you know, really doing much
from an operational standpoint, because he's going to be busy
managing the United States of America.
Speaker 2 (33:15):
And one of the pieces I guess that's just kind
of interesting to me is you look at it, and
the day after the election on November sixth, the stock
closed about thirty six bucks to share. Today it's forty two,
and it's not like it's done anything crazy during that time.
So you're kind of sitting here just in this holding pattern.
Have we ever seen anything like this before?
Speaker 8 (33:35):
Nothing in recent memory that I can think of. I mean,
just remember at the time of Trump's first presidency, and
there was a you know, a revgable trust that was
set up at that point. I mean, the assets of
the Trump Foundation we're all put in that trust. But
it was not a publicly traded company. You know, this
(33:57):
is really unique, especially also because you know it's a
company that is competing with much larger social media firms.
Then you throw in the fact that you have Trump
romance if you will, with Elon Musk, who is the
(34:18):
owner of X formerly Twitter. Uh, you know that that
complicates things as well. I mean, I can't imagine that,
you know, investors might be ignoring the fact that you know,
now that the president elect is back on X after
that band was lifted by Musk. It seemingly makes truth
(34:40):
Social a little bit less of a uh you know,
an investible proposition that makes sense because you don't have
that scarcity value if you will not as if truth
Social is the only place where Trump will talk, you
know he does, you know post on on Twitter X.
Speaker 2 (34:59):
And well, looking at this, you mentioned hey that that
you know, they have a number of potential things that
they are kicking around as businesses they may try to
acquire or get into. Do any of those seem more
likely than others at the moments.
Speaker 8 (35:14):
I think crypto makes the most sense given how uh
you know, Trump has really embraced bitcoin over the past year,
and there's the talk of whether or not we could
have a bigcoin strategic reserve. With you know, Gary Genstler
stepping down as the head of the SEC on inauguration day,
(35:37):
we should have much friendlier regulations for crypto from the
new regime at the SEC. There were rumors last year
of Trump Media potentially buying a crypto company publicly traded
called back back Set. At the time that you know
wouldn't comment on any rumors and speculations, so that chatter
(36:00):
might still be out there if if you had the bet.
I mean, fintech and crypto in particular probably makes the
most sense for Trump media and technology. I'd say more
on the technology side than the media side as a
business would be where they would look to expand.
Speaker 2 (36:16):
All right, very good, Paul, appreciate you joining us today.
Have a great weekend and we'll catch up with you soon.
Speaker 8 (36:22):
Thanks a lot. I have a Gooway.
Speaker 2 (36:23):
Guys, it's Paul Monica from Baron's talking about Trump Media.
What else you got for me?
Speaker 5 (36:30):
Mike Taylor Swift at the end of the year, allegedly
breathing some life into Target. The retailer got a holiday boost,
apparently from an exclusive deal to sell the megastars eras
tor book.
Speaker 4 (36:42):
Look.
Speaker 5 (36:42):
I'd recognize it's Taylor Swift, but I have some rules.
You don't make friends with salad or books. I just
I don't think that that one is going to work
for the American public. I see why Disney was able
to kill it with their you know, with their ownership
of sexual millionaires hoppers again, but what is this going
(37:03):
to do to boost your band brand long term?
Speaker 4 (37:07):
For Target?
Speaker 3 (37:08):
Nothing?
Speaker 5 (37:09):
Absolutely nothing. Disney, you only rights to that movie forever.
If that's the case, I don't now. Actually, I think
Taylor Swift owns all the rights to the movie, so
Disney you might have just seen the temporary boost as well.
But again, I don't really think that works for Target.
I don't think it's gonna do anything for their long
term business, and they're just gonna have to pay a
bunch of money in the future if they want to
(37:29):
continue to be able to boot sales.
Speaker 3 (37:31):
Like this did either.
Speaker 2 (37:32):
If you happen to watch the SpaceX Starship launch last night,
no I did. I just I love watching these things,
and I got to admit, when you see like the
booster stage of the rocket come back down and get
caught by the tower, I'm sitting there, I'm like, this
is freaking amazing.
Speaker 3 (37:48):
This is just awesome stuff.
Speaker 1 (37:50):
Now.
Speaker 2 (37:50):
That's an awesome part was that the actual starship it disintegrated
and exploded mid flight about ten minutes after launch, sending
a stream of stuff back down to the atmosphere, which
wasn't great. Wait, the thing I always come back to
on this, and look, the FA is gonna have some
questions because of where the debris was coming down. They
had to rewrite a bunch of commercial jetliners so they
didn't get hit by the stuff.
Speaker 3 (38:09):
Real problem.
Speaker 2 (38:11):
But ultimately, you do have failures when you're trying to
send new stuff into space, and that's part of the process.
So I again, there's gonna be some questions about where
things happen.
Speaker 3 (38:22):
But I still think this is amazing stuff. We're done
for the week.
Speaker 2 (38:26):
See a Monday on the Financial Exchange.
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