September 4, 2024 • 35 mins
Chuck Zodda and Marc Fandetti are encourage that only 44% of workers are 'cautiously optimistic' about meeting retirement goals. Can democrats stop the tax doom loop? For Volkswagen, the bumpy road to EVs starts to hit home. 'Rush' hour isn't what it used to be. 10-4 has replaced the 9-5. Trump wants to 'Drill, baby, drill,' but can he cut energy prices?
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Speaker 1 (00:00):
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Veterans Development Corporation. Face is the Financial Exchange with Chuck
Zada and Mark van Betty.
Speaker 2 (01:13):
At the moment, we've got a modest bounce happening across
major US equity markets, with the Dow up two hundred
and nineteen points, the S and P F twenty two,
and the NASDAK up ninety three, so about a half
a percent bump on all three major US indices.
Speaker 3 (01:27):
All right, Well, we're gonna try and reconnect Chuck there.
I'm not sure what's going on with that connection there today,
but yeah, it is the second hour of the Financial Exchange.
Will effort Chuck here and try and get him reconnected here.
But just want to recap yesterday's tech selloff, if you will. Mark,
we saw the Nasdaq close down over three percent, S
and P five hundred down over two percent, and we
(01:49):
kind of saw something similar back in early August. So
I don't know, could you kind of recap what we
saw yesterday and maybe why it happened? Any insight on
that front?
Speaker 4 (01:58):
Now, journalists, financially journalists, as you know, always attribute a
big sell off to something because it's easy to think
about it that way. It's kind of comforting to think
we have a grasp of why things are moving the
way that they are. But in fact, movements, even large movements,
are often random. I'm not suggesting that they're not responding
(02:19):
to underlying economic and market events on average in some
kind of rational way, but big moves can be random.
Big moves, even big crashes, are just small crashes that
kind of got out of control, that snowballed, if you like.
And there are lots of examples of this throughout history.
So it's normal to want to attribute effect to cause. Again,
(02:41):
I think there's something comforting in knowing or thinking we
know about why something happened. But these big movements are
part and parcel of stock ownership.
Speaker 1 (02:52):
As we all know.
Speaker 4 (02:53):
Volatility is Chuck Sadup wherever he is right now, likes
to say, is a feature, not a symptom of market malfunctioning.
It's normal. It's the price we pay for high long
run returns. So today, Tuck, as you point out, where
seeing stocks rebound modestly, it's not obvious to me that
(03:13):
the economic news that we got this morning, which was
the so called jolts job opening and labor turnover surveys,
what that acronym stands for it suggested, not suggested, but
outright showed to the extent that these estimates are reliable,
that number of job opening shrank by a few hundred
thousand last month, and that they're at their lowest level
(03:33):
now in a few years. You may recall that the
so called Jolts report was something people followed very very
closely when inflation was very high, and naturally more job
openings indicates greater demand for workers, a hotter labor market.
We were struggling to explain it. Jolts largely did inflation's
(03:55):
come down. Jolts has come down, Other measures of labor
market titness have come down. So all of these measures
are sinking and pointing, I think, to or telling the
same story to the extent that inflation was attributable to
an excess of demand which manifested itself in an overly
tight and unnaturally type if you like labor market, those
conditions of east.
Speaker 3 (04:19):
All right, we have chuck now back Chuck. We were
just touching on yesterday's sell off and Jolts this morning.
Any other follow up thoughts there?
Speaker 2 (04:26):
Yeah, I mean, I think that when we look at
the data here and try to make sense of it.
There's clearly a slowdown that's happening. The question is is
it the slowdown that you want to see to get
to the point where you know, you feel that there's
no risk of the labor market causing further inflation, or
is it the kind of slowdown that leads to recession.
(04:49):
And we're not going to know for a little bit
longer here, but the data is kind of pingponging between
those two possibilities on kind of a weekly, bi weekly
basis right now. So we'll see where this ends up going.
But there's a definite slowing in the data that we're seeing.
(05:11):
And the other thing is, as Mark has said before,
look you get to a point where, hey, if the
data continues to slow and interest rates come down further,
then you get to a point where people say, hey, gee,
I didn't realize that mortgage rates.
Speaker 5 (05:25):
You know, we are back in you know, the high fives.
Speaker 2 (05:27):
Now if we get there, you know, a couple months
from now, and maybe they start looking at buying homes
in the spring. So it's it's a dynamic system that's
never static, and ultimately it's one where we're going to
be sorting through what happens for a little bit here.
Speaker 5 (05:42):
I don't think that we have any.
Speaker 2 (05:45):
Clear answers right now, and we're still trying to figure
out exactly where this economy and these markets are are
going to be going. So that's that's where we stand
at the moment here, Mark, I want to talk a
little bit about this piece from CNBC forty four two
percent of workers are cautiously optimistic about meeting retirement goals,
(06:05):
and I'm curious to get your thoughts on. I know that,
you know, pulls about feelings about retirement are kind of
hard to you know, draw a ton from. But I
would make the case that if if one in two
people are saying, hey, I'm pretty optimistic about retirement, I
don't know that that's a horrible result.
Speaker 4 (06:26):
Actually, no, that just from memory, this could be off.
But I think that's relatively good compared to respondents historically,
say over the last couple of decades. And part of
that may be attributable to an increasing number of tools
either three or four to one K provider or through
(06:47):
your financial advisor if you work with one, that allow
you to get a quick and reasonably accurate assessment of
how likely you are to meet your goals. You tell
your advisor or even your four to one K provider,
through the tools they make available on their website, what
your annual income goal is and when you want to
hit that. By say I want to retire on fifty
thousand dollars a year in today's dollars at age sixty five,
(07:09):
it'll tell you the likelihood that you can convert your
four oh one K into a so called immediate annuity
at that age. This is a tool we didn't have
in the mid nineties. It became available starting in the
late nineties, and now it's very widely available to not
only anybody with a four h one K, but anybody
with an IRA with one of the major providers, and
certainly to clients with a reputable advisory firm. So people
(07:33):
now have tools at their disposal and relatively easily accessible
tools that'll tell them whether or not they're on target.
There's no reason unless you're not eligible for a four
h one K and have no access to financial education
tools at all, no reason why most Americans shouldn't have
ready access to a number like that.
Speaker 2 (07:53):
When you look at the data here, one piece that
is interesting is even though about half of workers say
they're callsly optimistic about reaching, you know, their retirement goals.
Eighty two percent of workers say that achieving a comfortable
retirement is going to be much harder or somewhat harder
to achieve than it was for their parents. And I'm
(08:19):
trying to make sense of this, and there are two
things that come to mind. The first is, look, the
generation that is retiring now, in generations that we'll be
retiring in the future, largely using defined contribution plans, not
to find benefit plans. So I think that there is
no pension that's necessarily taking care of people the way
that you know, you saw for really the kind of
(08:41):
the generation that was working from in that post war
period through you know, the nineteen eighties and nineteen nineties.
But other than that, you know, I wonder if we
end up looking at that as something where we view
kind of period as the norm, because we all know
(09:02):
people that you know, worked from you know, nineteen fifty
to nineteen ninety, and you know, they were working for
forty years and we knew them for that time, and
then we saw them retire and have a twenty thirty
year retirement and so on and so forth, and so
that seems normal to us. But if you look at
pretty much the rest of American history, that looks like
(09:22):
the outlier. And I wonder if we're just interpreting that
period as, hey, what should be normal to retire into
as opposed to Hey, the US was just abnormally wealthy
in the immediate aftermath of World War Two, and so
as a result, it was easier for companies to pay
for their workers' retirement. And that's not the norm going
(09:44):
forward or going right now.
Speaker 4 (09:46):
I think you nailed it. Those were heady years. Economic
growth was very high in the fifties and sixties. It
was even high in the seventies that we tend to
view that decade now as one of disappointment, politicalomic, geopolitical,
you name it. But in terms of economic growth, a
real rate was very close to the nineteen eighties. So
(10:06):
it was only in relative to and of course the
uncertainty associated with high inflation sours our perceptions of that period,
but only relative to the extraordinary growth of the fifties
and sixties, which resulted from US being the only major
power without damage to our industrial base after World War Two.
We were like seventy eighty percent of the world's manufacturing,
(10:27):
or maybe we're closer to fifty, but seventy eighty percent
of the world's oil output after World War Two, anything
that could be made on a factory line was made
in America because everybody else's industrial base was bombed to
oblivion after World War Two. So we came out of
that much like we did World War One as not
only the world's creditor but the hub of the world's manufacturing.
Next two decades were relatively relatively high growth. So yeah, Chuck,
(10:52):
I think we're comparing it to that Golden era of growth.
And of course life expectancy was shorter than two so
it was it was easier, if you like, in an
actuarial since to offer a pension, and easier to provide
benefits like social security and eventually medicare.
Speaker 2 (11:07):
Take a quick break here when we return the tax
doom loop.
Speaker 5 (11:12):
After this.
Speaker 1 (11:15):
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Speaker 2 (11:32):
Mark there's a piece of The New York Times. It's
titled can Democrats stop the tax doom loop. The doom
loop here is what this is talking about. Actually, it
is that next year is the last year of the
Tax Cuts and Jobs Acts provision provisions staying in place,
(11:56):
Meaning if Congress does not extend your change those provisions
for twenty twenty six, then the tax cuts that were
put into place by President Trump back in twenty seventeen expire.
And it's a familiar place the Democrats have found themselves in.
Back in the I forget exactly what the year was,
I think was twenty twelve, the Bush tax cuts were
(12:18):
set to expire, and Democrats are Republicans negotiated basically to
keep most of them around for individuals and families earning
less than four hundred and four hundred and fifty thousand dollars, respectively,
but most of the other tax cuts went by the
wayside at that point. And so what this piece is
talking about is that Democrats are looking at polling on
(12:41):
the issue of taxes and kind of saying, hey, there's
not necessarily a justification for extending these, Maybe we should
just let them expire. And that's something that they are
discussing as a possibility in terms of how they try
to set tax policy in twenty twenty six and onward
(13:04):
if they were to have control of the presidency and
or either branch of Congress.
Speaker 5 (13:10):
Your thoughts, mark.
Speaker 4 (13:12):
Well outlays as a percentage of GDP continues to go up,
governments spending more. It doesn't appear to be any end
insight to that trend. It's mostly been the case since
the War on Terror started. So government's getting bigger in
terms of spending again as a proportion of the economy.
At the same time people were getting older. We require
(13:35):
more benefits, so part of that is social Security, Medicare, Medicaid.
Primarily social Security and Medicare, I guess. And then at
the same moreover where you know, as you pointed out,
we cut taxes in one again and now then there
was a recession argument for doing it. We did it
again after they won the mid terms in two and
(13:55):
Dick Cheney famously said deficits don't matter. And really from
that point on and it's been off to the races.
There hasn't been a party at the national There hasn't
been a candidate, i should say, at the national level,
of candidate for president that ran on a platform of
cutting the deficit of fiscal austerity. Then again, few do
(14:15):
Clinton's known as a Clinton SAMs now as being a
deficit cutter, and deservedly so. But he ran on spending more,
not less. So I don't know, Chuck. There appears to
be no appetite for it. It's not even discussed in
the current campaign, which is both sad but at the
same time not surprising. Now, the question is when do
interest rates start to reflect that. Maybe they already do.
(14:38):
Maybe the ten year would be two point eight instead
of three point eight today. We really don't know. You
can't test that possible alternative history. But at what point
do big, big deficits and resulting debt really start to
pinch and do we as consumers really start to feel
it in the form of higher interest rates? I don't know.
Speaker 2 (15:00):
And when we look at the history on there are
two numbers that matter from a deficit perspective. It's look,
what are your outlays each year as a percentage of
GDP and what are your revenues and outlays. The interesting
thing and Mark kind of got into this a little
bit post war. You go get nineteen forty eight and
outlays were about eleven percent of GDP. That's what the
(15:21):
federal government was spending by the mid nineteen sixties, that
it bumped up into kind of the fifteen to seventeen
percent range, and it stayed there through the early nineteen seventies.
It then bumped up into the twenties in the mid eighties,
and so you saw, you know, kind of again this
(15:43):
additional expansion of federal governments spending throughout the mid eighties,
before in the late two thousands getting back down into
the seventeen percent range. Today it's sitting at about twenty
two percent. Again, for much of the twenty tens, it
was right around twenty percent. So it's kind of been this,
if you will get the long term trend, it's this
gradual creep up of you know, a couple percentage points
(16:05):
a decade over.
Speaker 5 (16:06):
The last five or six decades.
Speaker 2 (16:09):
On the other hand, when you look at federal receipts,
the thing that's fascinating here is for as much debate
as there is about tax policy and oh like, we're
gonna do this, and we're gonna change taxes this way
and that way, and we're gonna do this and that
and YadA YadA, for the last seventy years, federal receipts
(16:29):
have been between fifteen percent and eighteen percent, with a
couple outliers, you know, on each side. The late nineties
saw a ton of tax revenue come in because of
the dot com bubble, and you know a bunch of
capital gains taxes that were being raised. But otherwise you've
basically been in this narrow like two to three percent
range for federal receipts. So for all the handwringing about, hey,
(16:52):
you know, here's how much taxes changed, and here's how
much this administration's gonna do this and that, basically no
one really makes any significant moves on taxes. They're around
the edges and they have these, you know, little tweaks
that end up happening, Whereas on the revenue side, it's
a I'm sorry. On the spending side, it's just this
steady march up over the last seventy years or so
(17:15):
in terms of federal spending as a percentage of GDP,
And that's kind of how we ended up where we
are is we've spent more as we've gone through the
last seventy years, and revenue has remained remarkably consistent regardless
of administration or party or anything else. And that's why
we are where we are today. Taking a look at
(17:38):
markets as we head towards the bottom of the hour,
the Dow is up about a quarter percent, s and
P about a tenth of a percent. The Nasdak is
now flat at this point in time.
Speaker 1 (17:49):
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Speaker 5 (18:09):
Mark. You are a Volkswagen driver, correct.
Speaker 4 (18:12):
I am?
Speaker 2 (18:14):
So this piece today again kind of a big one. Well,
not really a big one for you, because you're a
Volkswagen driver. You don't work at a plant in Germany,
so it's not.
Speaker 5 (18:25):
Quite the same.
Speaker 4 (18:26):
I read it's it's concerning.
Speaker 2 (18:29):
It's a really interesting story. So Volkswagen is considering the
closure of a manufacturing plant in Germany, uh for the
first time ever. And the big thing on this is
Volkswagen Corporate is saying, look, we're facing, you know, a
(18:50):
bunch of new entrants into the market, you know, most
notably these these Chinese EV's that are entering the European market.
Speaker 5 (18:57):
We have a tough economic environment that.
Speaker 2 (18:59):
We're dealing with, and we need to be able to
do more cost cutting than what we normally do. The
union for Volkswagen employees is fighting back and saying, hey, this.
Speaker 5 (19:13):
Is not you know, the result of you know what
you say. It is.
Speaker 2 (19:16):
Instead, you decided to build you know, products that aren't
popular enough, and you're not doing enough work to you know,
keep us competitive blah blah blah, and so, you know,
most notably they said, look, why didn't you invest anything
in trying to develop hybrid technology that's very popular? And
so this is a battle that is shaping up between
(19:37):
Volkswagen management and their union. And ultimately, while while this
is a you know something that you know does relate
to the high cost of manufacturing in in Germany, ultimately,
in my opinion, the real issue is the one that
I noted at the beginning, which is, look, you've got
(19:58):
China providing huge subsidies to electric vehicle makers and they
are now exporting those evs into the EU, and it
is you know, causing some real damage to the German
manufacturing bases, as we can see here and Europe. Despite
this very direct threat to what is the economic engine
(20:21):
of the region, Europe does not seem to want to
take this seriously enough by raising tariffs on Chinese evs
to the level that's needed in order to maintain adequate
competition for domestic manufacturers. And I know people will say, well,
you know you need to have free trade in this now,
Well that also means that, hey, China's got to abide
(20:43):
by those rules of free trade, and they simply don't
when it comes to how they are subsidizing their manufacturers
in this industry in particular.
Speaker 4 (20:52):
So are tariffs even on the table here is a solution?
I don't they are, So let me have the context.
Speaker 5 (21:02):
So it's not from this piece.
Speaker 2 (21:04):
It's so back in the spring, Europe said that they
were going to I'm just pulling it up now, just
so I can have the rates correct.
Speaker 5 (21:14):
Europe said that they were going to. Yeah.
Speaker 2 (21:16):
On June twelfth, they said that they were putting into
effect higher tariffs of seventeen point four percent on cars
from BYD, nineteen point nine percent on cars from Geely,
and thirty seven point six from Sai C. And then
a couple of weeks ago they backtracked. And this is
(21:39):
from August twenty first, so just two months later I'm
quoting here.
Speaker 5 (21:42):
This is from CNN.
Speaker 2 (21:43):
The European Union might have just given Tesla's future sales
in the region a boost by setting tariffs on its
China made vehicles considerab below those imposed unrival electric automakers.
On Tuesday, the European Commission, the EU's executive arms, set
their rate for taxes on Tesla EV's at nine percent,
(22:05):
but then they ended up, you know, coming in at
these lower levels, you know, kind of in the ten
to twelve percent range that they set on Chinese EV's,
So basically they you know, pruned what they were going
to be doing, and it's I don't know, I find
it kind of disappointing in terms of, you know, how
they're approaching this, because in my mind, if you have
(22:28):
a country that is, you know, subsidizing to the extent
that China is their EV production, you want to do
something to offset that. And this is a place where
I think that tactical tariffs make a ton of sense.
Speaker 4 (22:44):
I guess it depends on your the consensus reached by
your political system. I mean, you the economic argument is, well,
then you focus on where your comparative advantage lies. You
make something else. Germans have decided, and this has a
long history, They've decided that they will accept slightly lower
(23:04):
not much. They're a very wealthy country, not as wealthy
as we are, but very wealthy in a per capita sense.
They'll accept slightly lower growth and living standards. I shouldn't
overstate that. You know, their economic growth is stalled there
and part of it is part of the part of
the it is undoubtedly attributable to the power that their
social contract, even if it's an implicit one, this sort
(23:24):
of agreement that business and labor and government are equal,
co equal partners in setting economic policy. They've consciously made
that made that decision to trade off higher growth the
rough and tumble capitalism that we practice here. They've made
a decision not to adopt that. Many social democracies have,
(23:46):
including our neighbors to the north, Canada, Scandinavian countries are
other examples. That's the way they want to live. Good luck.
I would take the subsidized Chinese crap and focus on
where we have a comparative advantage, which is largely what
we've what we've done until the past several years.
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Speaker 5 (25:11):
Mark.
Speaker 2 (25:11):
I want to talk a little bit about traffic, if
that's okay with you.
Speaker 4 (25:16):
Sure.
Speaker 2 (25:18):
So, there is a company by the name of Inrix
who they are a traffic data analysis company, and what
they are seeing is that as opposed to the typical
kind of pre pandemic rush hours that you would see
at nine am and five pm, instead, what you're seeing
(25:41):
is a little bit more of a midday rush hour
that picks up and then that activity continues throughout much
of the afternoon. And this is largely attributed to two factors,
one of which is the availability of remote work and
workers who might come in just for a portion of
the day, and the other one is is that as
a result of that, people may have moved further away
(26:03):
than they used to live from their offices, and so
you end up with much more traffic throughout much of
the day, but the peaks are not quite as trafficky
as they used to be.
Speaker 5 (26:14):
Your thoughts makes sense.
Speaker 4 (26:16):
I've experienced it myself, thanks to the generous work schedule
allowed to me by my employer. I appreciate the flexibility.
And I've myself witnessed unpredictable changing in traffic path and
now that you used to be able to count and
I think many you could probably relate to this. Tuesdays
(26:36):
and Thursdays used to be harrowing. Friday morning or afternoon.
Friday morning was great, always a cake walk. Friday afternoon.
I don't know whether people spent the night on Thursday
and they had to go home on Friday but not
go in. I've never been able to figure that one out.
Friday afternoons had been terrible. Now things are far less predictable.
And Chuck, that explanation is consistent with my own experience,
what I'm hearing in the experience of others, and what
(26:58):
we're reading in accounts like this, and I think it's
a good thing.
Speaker 5 (27:03):
Yeah, I do as well.
Speaker 2 (27:04):
It's something where ultimately I think we're still sorting through,
you know, what the longer term implications of this are.
But certainly it's you know, the one thing that you
see is again and I'll see it, you know, if
I'm you know, commuting to a different office or you know,
commuting again to and from the office, depending on you
(27:26):
know what my schedule looks like but yeah, it's the
afternoon busyness does seem to start around one thirty now
as opposed to you know, the three thirty or four
that it used to start at. So there's some definite
changes that have happened in this report saying hey, it's
(27:46):
not just what you're seeing locally, this is something that
you're seeing nationally as a trend in traffic patterns.
Speaker 5 (27:54):
Quick break here.
Speaker 2 (27:55):
When we return, we'll do a little bit of stack roulette.
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Speaker 5 (29:07):
Mark what do you have for me? For stack Roulette? Today?
Speaker 4 (29:09):
Chuck Good article in the Wall Street Journal. Everyone should
check it out. Trump is the title wants to drill,
Baby Drill. We all know that she stole that phrase
from Larry Cudlow. But can he cut energy prices? They ask?
And the upshot you don't have to read the twenty
odd paragraphs that comprise this article. The upshot is no,
no policymaker can. The price of oil is globally determined.
(29:32):
It's influenced by factors mostly, if not entirely, outside of
anyone president's control any countries control, really private or public sector.
In the short term, the issue right now is not
that the federal government is restricting drilling. We're drilling more
than we ever had. We've never been fully energy independent.
(29:53):
We've always imported a little bit even during the golden
era of Trump's term, as some of you like to
think about it in terms of oil price, but there's
very little a president can do. Oil companies have said
they're not going to drill more. They like high profits.
If anything, his deregulatory agenda for the oil sector, which
is probably mostly a good idea, we'll do nothing but
increase profits, not the supply of oil. Again, good article,
(30:17):
worth worth worth checking out.
Speaker 2 (30:19):
Yeah, if you look at gas prices in the last
twenty five years or so, the only times that we've
been really twenty years since you know, kind of the
middle of five the only times that we've seen gas prices,
you know, down around two dollars a gallon. There are
(30:41):
three key instances. The first is early two thousand and nine,
the economy was awful. The second is early twenty sixteen,
the economy wasn't terrible. But basically what happened is Russia decided, hey,
we want to put all of the US frackers out
of businesses quickly as possible, and so they just pumped
(31:02):
as much oil as they could and it devastated the
US energy industry, which, if you want to ask, hey,
why is you know, why are US energy firms a
little bit hesitant to pump more with you know, how
much they could still make on each marginal barrel of oil.
Speaker 5 (31:17):
The answer is late.
Speaker 2 (31:18):
Twenty fifteen early twenty sixteen, when Russia put the screws
to them. And the third time when you see all
gas prices down in that range was May of twenty twenty,
when most of the economy was still kind of emerging
from the initial shutdowns after the COVID nineteen pandemic kicked off.
So none of those are situations where you look at
(31:38):
it and say, hey, that was you know, the result
of policy in the United States that caused this. No,
they were either bad economies or someone else saying we
don't care about profit, We're just gonna pump no matter what.
In basically any other period during that time, gas is
covered between two dollars and fifty cents and three dollars
and fifty cents a barrel, and there's no correlation between
(32:03):
what policy was at that time and where gas prices
ended up. You can make a case, hey, is it
better for us to try to produce domestically so that
we're not as beholden, you know, to other countries that
might not share how we want the geopolitics of the
world to you know, unfold, sure, of course, but that's
(32:24):
different from saying that you're going to be able to
change gas prices simply by shifting the policy that you are,
you know, conducting domestically as we've seen. Look, if the
United States says, hey, we're going to pump more in
order to get prices down, OPEC might simply say, fine,
we want to continue to be profitable and we're not
(32:45):
going to pump as much then.
Speaker 4 (32:47):
So there'd still be a global price for oil. Though,
are we going to determine you can't cut off international
correct demand? How are we going to determine the price
of a gallant even if we said we're not gonna
let in any foreign oil, we're going to refine it
here from sou to nuts, from when we take it
out of the ground until it goes into your car,
how will you determine the price for that supply and demand? Okay,
does that mean you're not gonna let any international buyers
(33:08):
into this market? It's that's not workable. The magic bullets
like this are always fanciful, and this is an example
of a great example of one again check out the article.
They spell out the pros and cons.
Speaker 2 (33:24):
Mark, I want to talk a little bit about space here,
if that's okay, of course. Okay, So the Boeing star Liner,
which is uh, well, it's supposed to be undocking from
the International Space Station later this week, but over the weekend,
there was this mysterious sound that started permeating through the
(33:48):
star Liner. It sounded like a sonar ping. Unfortunately, it
was not aliens coming to you know, destroy Earth with
you know, greater technology. What in fact it turned out
to be was that there was an echo from some
kind of hot mic that was you know, echoing over
(34:10):
the speaker and generating that feedback that you get, and
they were able to identify that as the problem rather
than anything more exciting, like you know, the aliens from
Independence Day coming down and you know, trying to devastate
humanity or anything like that.
Speaker 5 (34:29):
So this was a big relief. Yes it was I
missed the alert.
Speaker 2 (34:36):
It was a microphone that was turned on by mistake,
and not aliens coming to destroy us.
Speaker 3 (34:43):
I mean, if I started hearing eerie sounds after being
in that space shuttle, what I thought was going to
be eight days or whatever. It was, and it's now
been months. Oh boy, your mind's gonna start playing tricks
with you at that point.
Speaker 4 (34:57):
Any action would be welcome that too.
Speaker 5 (34:59):
Yeah, Moon's haunted.
Speaker 4 (35:01):
You'd be famous.
Speaker 3 (35:02):
The moon's haunted.
Speaker 5 (35:04):
Moon's haunted. Get out of here.
Speaker 2 (35:07):
Taking a look at markets at the top of the hour,
we got the Dow up sixty three points, the S
and P's up one, Nasdaq up four, So not a
whole lot of movement today in either direction after a
big downward slide yesterday. We'll see what ends up holding
up in the afternoon, and we're back tomorrow. We got
more jobs dated with the weekly jobless claims. All that
(35:28):
and more coming up on tomorrow's show on the Financial
Exchange
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Speaker 2 (01:13):
At the moment, we've got a modest bounce happening across
major US equity markets, with the Dow up two hundred
and nineteen points, the S and P F twenty two,
and the NASDAK up ninety three, so about a half
a percent bump on all three major US indices.
Speaker 3 (01:27):
All right, Well, we're gonna try and reconnect Chuck there.
I'm not sure what's going on with that connection there today,
but yeah, it is the second hour of the Financial Exchange.
Will effort Chuck here and try and get him reconnected here.
But just want to recap yesterday's tech selloff, if you will. Mark,
we saw the Nasdaq close down over three percent, S
and P five hundred down over two percent, and we
(01:49):
kind of saw something similar back in early August. So
I don't know, could you kind of recap what we
saw yesterday and maybe why it happened? Any insight on
that front?
Speaker 4 (01:58):
Now, journalists, financially journalists, as you know, always attribute a
big sell off to something because it's easy to think
about it that way. It's kind of comforting to think
we have a grasp of why things are moving the
way that they are. But in fact, movements, even large movements,
are often random. I'm not suggesting that they're not responding
(02:19):
to underlying economic and market events on average in some
kind of rational way, but big moves can be random.
Big moves, even big crashes, are just small crashes that
kind of got out of control, that snowballed, if you like.
And there are lots of examples of this throughout history.
So it's normal to want to attribute effect to cause. Again,
(02:41):
I think there's something comforting in knowing or thinking we
know about why something happened. But these big movements are
part and parcel of stock ownership.
Speaker 1 (02:52):
As we all know.
Speaker 4 (02:53):
Volatility is Chuck Sadup wherever he is right now, likes
to say, is a feature, not a symptom of market malfunctioning.
It's normal. It's the price we pay for high long
run returns. So today, Tuck, as you point out, where
seeing stocks rebound modestly, it's not obvious to me that
(03:13):
the economic news that we got this morning, which was
the so called jolts job opening and labor turnover surveys,
what that acronym stands for it suggested, not suggested, but
outright showed to the extent that these estimates are reliable,
that number of job opening shrank by a few hundred
thousand last month, and that they're at their lowest level
(03:33):
now in a few years. You may recall that the
so called Jolts report was something people followed very very
closely when inflation was very high, and naturally more job
openings indicates greater demand for workers, a hotter labor market.
We were struggling to explain it. Jolts largely did inflation's
(03:55):
come down. Jolts has come down, Other measures of labor
market titness have come down. So all of these measures
are sinking and pointing, I think, to or telling the
same story to the extent that inflation was attributable to
an excess of demand which manifested itself in an overly
tight and unnaturally type if you like labor market, those
conditions of east.
Speaker 3 (04:19):
All right, we have chuck now back Chuck. We were
just touching on yesterday's sell off and Jolts this morning.
Any other follow up thoughts there?
Speaker 2 (04:26):
Yeah, I mean, I think that when we look at
the data here and try to make sense of it.
There's clearly a slowdown that's happening. The question is is
it the slowdown that you want to see to get
to the point where you know, you feel that there's
no risk of the labor market causing further inflation, or
is it the kind of slowdown that leads to recession.
(04:49):
And we're not going to know for a little bit
longer here, but the data is kind of pingponging between
those two possibilities on kind of a weekly, bi weekly
basis right now. So we'll see where this ends up going.
But there's a definite slowing in the data that we're seeing.
(05:11):
And the other thing is, as Mark has said before,
look you get to a point where, hey, if the
data continues to slow and interest rates come down further,
then you get to a point where people say, hey, gee,
I didn't realize that mortgage rates.
Speaker 5 (05:25):
You know, we are back in you know, the high fives.
Speaker 2 (05:27):
Now if we get there, you know, a couple months
from now, and maybe they start looking at buying homes
in the spring. So it's it's a dynamic system that's
never static, and ultimately it's one where we're going to
be sorting through what happens for a little bit here.
Speaker 5 (05:42):
I don't think that we have any.
Speaker 2 (05:45):
Clear answers right now, and we're still trying to figure
out exactly where this economy and these markets are are
going to be going. So that's that's where we stand
at the moment here, Mark, I want to talk a
little bit about this piece from CNBC forty four two
percent of workers are cautiously optimistic about meeting retirement goals,
(06:05):
and I'm curious to get your thoughts on. I know that,
you know, pulls about feelings about retirement are kind of
hard to you know, draw a ton from. But I
would make the case that if if one in two
people are saying, hey, I'm pretty optimistic about retirement, I
don't know that that's a horrible result.
Speaker 4 (06:26):
Actually, no, that just from memory, this could be off.
But I think that's relatively good compared to respondents historically,
say over the last couple of decades. And part of
that may be attributable to an increasing number of tools
either three or four to one K provider or through
(06:47):
your financial advisor if you work with one, that allow
you to get a quick and reasonably accurate assessment of
how likely you are to meet your goals. You tell
your advisor or even your four to one K provider,
through the tools they make available on their website, what
your annual income goal is and when you want to
hit that. By say I want to retire on fifty
thousand dollars a year in today's dollars at age sixty five,
(07:09):
it'll tell you the likelihood that you can convert your
four oh one K into a so called immediate annuity
at that age. This is a tool we didn't have
in the mid nineties. It became available starting in the
late nineties, and now it's very widely available to not
only anybody with a four h one K, but anybody
with an IRA with one of the major providers, and
certainly to clients with a reputable advisory firm. So people
(07:33):
now have tools at their disposal and relatively easily accessible
tools that'll tell them whether or not they're on target.
There's no reason unless you're not eligible for a four
h one K and have no access to financial education
tools at all, no reason why most Americans shouldn't have
ready access to a number like that.
Speaker 2 (07:53):
When you look at the data here, one piece that
is interesting is even though about half of workers say
they're callsly optimistic about reaching, you know, their retirement goals.
Eighty two percent of workers say that achieving a comfortable
retirement is going to be much harder or somewhat harder
to achieve than it was for their parents. And I'm
(08:19):
trying to make sense of this, and there are two
things that come to mind. The first is, look, the
generation that is retiring now, in generations that we'll be
retiring in the future, largely using defined contribution plans, not
to find benefit plans. So I think that there is
no pension that's necessarily taking care of people the way
that you know, you saw for really the kind of
(08:41):
the generation that was working from in that post war
period through you know, the nineteen eighties and nineteen nineties.
But other than that, you know, I wonder if we
end up looking at that as something where we view
kind of period as the norm, because we all know
(09:02):
people that you know, worked from you know, nineteen fifty
to nineteen ninety, and you know, they were working for
forty years and we knew them for that time, and
then we saw them retire and have a twenty thirty
year retirement and so on and so forth, and so
that seems normal to us. But if you look at
pretty much the rest of American history, that looks like
(09:22):
the outlier. And I wonder if we're just interpreting that
period as, hey, what should be normal to retire into
as opposed to Hey, the US was just abnormally wealthy
in the immediate aftermath of World War Two, and so
as a result, it was easier for companies to pay
for their workers' retirement. And that's not the norm going
(09:44):
forward or going right now.
Speaker 4 (09:46):
I think you nailed it. Those were heady years. Economic
growth was very high in the fifties and sixties. It
was even high in the seventies that we tend to
view that decade now as one of disappointment, politicalomic, geopolitical,
you name it. But in terms of economic growth, a
real rate was very close to the nineteen eighties. So
(10:06):
it was only in relative to and of course the
uncertainty associated with high inflation sours our perceptions of that period,
but only relative to the extraordinary growth of the fifties
and sixties, which resulted from US being the only major
power without damage to our industrial base after World War Two.
We were like seventy eighty percent of the world's manufacturing,
(10:27):
or maybe we're closer to fifty, but seventy eighty percent
of the world's oil output after World War Two, anything
that could be made on a factory line was made
in America because everybody else's industrial base was bombed to
oblivion after World War Two. So we came out of
that much like we did World War One as not
only the world's creditor but the hub of the world's manufacturing.
Next two decades were relatively relatively high growth. So yeah, Chuck,
(10:52):
I think we're comparing it to that Golden era of growth.
And of course life expectancy was shorter than two so
it was it was easier, if you like, in an
actuarial since to offer a pension, and easier to provide
benefits like social security and eventually medicare.
Speaker 2 (11:07):
Take a quick break here when we return the tax
doom loop.
Speaker 5 (11:12):
After this.
Speaker 1 (11:15):
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your Alexis Smart speaker to play the Financial Exchange. This
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Speaker 2 (11:32):
Mark there's a piece of The New York Times. It's
titled can Democrats stop the tax doom loop. The doom
loop here is what this is talking about. Actually, it
is that next year is the last year of the
Tax Cuts and Jobs Acts provision provisions staying in place,
(11:56):
Meaning if Congress does not extend your change those provisions
for twenty twenty six, then the tax cuts that were
put into place by President Trump back in twenty seventeen expire.
And it's a familiar place the Democrats have found themselves in.
Back in the I forget exactly what the year was,
I think was twenty twelve, the Bush tax cuts were
(12:18):
set to expire, and Democrats are Republicans negotiated basically to
keep most of them around for individuals and families earning
less than four hundred and four hundred and fifty thousand dollars, respectively,
but most of the other tax cuts went by the
wayside at that point. And so what this piece is
talking about is that Democrats are looking at polling on
(12:41):
the issue of taxes and kind of saying, hey, there's
not necessarily a justification for extending these, Maybe we should
just let them expire. And that's something that they are
discussing as a possibility in terms of how they try
to set tax policy in twenty twenty six and onward
(13:04):
if they were to have control of the presidency and
or either branch of Congress.
Speaker 5 (13:10):
Your thoughts, mark.
Speaker 4 (13:12):
Well outlays as a percentage of GDP continues to go up,
governments spending more. It doesn't appear to be any end
insight to that trend. It's mostly been the case since
the War on Terror started. So government's getting bigger in
terms of spending again as a proportion of the economy.
At the same time people were getting older. We require
(13:35):
more benefits, so part of that is social Security, Medicare, Medicaid.
Primarily social Security and Medicare, I guess. And then at
the same moreover where you know, as you pointed out,
we cut taxes in one again and now then there
was a recession argument for doing it. We did it
again after they won the mid terms in two and
(13:55):
Dick Cheney famously said deficits don't matter. And really from
that point on and it's been off to the races.
There hasn't been a party at the national There hasn't
been a candidate, i should say, at the national level,
of candidate for president that ran on a platform of
cutting the deficit of fiscal austerity. Then again, few do
(14:15):
Clinton's known as a Clinton SAMs now as being a
deficit cutter, and deservedly so. But he ran on spending more,
not less. So I don't know, Chuck. There appears to
be no appetite for it. It's not even discussed in
the current campaign, which is both sad but at the
same time not surprising. Now, the question is when do
interest rates start to reflect that. Maybe they already do.
(14:38):
Maybe the ten year would be two point eight instead
of three point eight today. We really don't know. You
can't test that possible alternative history. But at what point
do big, big deficits and resulting debt really start to
pinch and do we as consumers really start to feel
it in the form of higher interest rates? I don't know.
Speaker 2 (15:00):
And when we look at the history on there are
two numbers that matter from a deficit perspective. It's look,
what are your outlays each year as a percentage of
GDP and what are your revenues and outlays. The interesting
thing and Mark kind of got into this a little
bit post war. You go get nineteen forty eight and
outlays were about eleven percent of GDP. That's what the
(15:21):
federal government was spending by the mid nineteen sixties, that
it bumped up into kind of the fifteen to seventeen
percent range, and it stayed there through the early nineteen seventies.
It then bumped up into the twenties in the mid eighties,
and so you saw, you know, kind of again this
(15:43):
additional expansion of federal governments spending throughout the mid eighties,
before in the late two thousands getting back down into
the seventeen percent range. Today it's sitting at about twenty
two percent. Again, for much of the twenty tens, it
was right around twenty percent. So it's kind of been this,
if you will get the long term trend, it's this
gradual creep up of you know, a couple percentage points
(16:05):
a decade over.
Speaker 5 (16:06):
The last five or six decades.
Speaker 2 (16:09):
On the other hand, when you look at federal receipts,
the thing that's fascinating here is for as much debate
as there is about tax policy and oh like, we're
gonna do this, and we're gonna change taxes this way
and that way, and we're gonna do this and that
and YadA YadA, for the last seventy years, federal receipts
(16:29):
have been between fifteen percent and eighteen percent, with a
couple outliers, you know, on each side. The late nineties
saw a ton of tax revenue come in because of
the dot com bubble, and you know a bunch of
capital gains taxes that were being raised. But otherwise you've
basically been in this narrow like two to three percent
range for federal receipts. So for all the handwringing about, hey,
(16:52):
you know, here's how much taxes changed, and here's how
much this administration's gonna do this and that, basically no
one really makes any significant moves on taxes. They're around
the edges and they have these, you know, little tweaks
that end up happening, Whereas on the revenue side, it's
a I'm sorry. On the spending side, it's just this
steady march up over the last seventy years or so
(17:15):
in terms of federal spending as a percentage of GDP,
And that's kind of how we ended up where we
are is we've spent more as we've gone through the
last seventy years, and revenue has remained remarkably consistent regardless
of administration or party or anything else. And that's why
we are where we are today. Taking a look at
(17:38):
markets as we head towards the bottom of the hour,
the Dow is up about a quarter percent, s and
P about a tenth of a percent. The Nasdak is
now flat at this point in time.
Speaker 1 (17:49):
Here bringing the latest financial news straight to your radio
every day, it's the Financial Exchange. On the Financial Exchange
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Speaker 5 (18:09):
Mark. You are a Volkswagen driver, correct.
Speaker 4 (18:12):
I am?
Speaker 2 (18:14):
So this piece today again kind of a big one. Well,
not really a big one for you, because you're a
Volkswagen driver. You don't work at a plant in Germany,
so it's not.
Speaker 5 (18:25):
Quite the same.
Speaker 4 (18:26):
I read it's it's concerning.
Speaker 2 (18:29):
It's a really interesting story. So Volkswagen is considering the
closure of a manufacturing plant in Germany, uh for the
first time ever. And the big thing on this is
Volkswagen Corporate is saying, look, we're facing, you know, a
(18:50):
bunch of new entrants into the market, you know, most
notably these these Chinese EV's that are entering the European market.
Speaker 5 (18:57):
We have a tough economic environment that.
Speaker 2 (18:59):
We're dealing with, and we need to be able to
do more cost cutting than what we normally do. The
union for Volkswagen employees is fighting back and saying, hey, this.
Speaker 5 (19:13):
Is not you know, the result of you know what
you say. It is.
Speaker 2 (19:16):
Instead, you decided to build you know, products that aren't
popular enough, and you're not doing enough work to you know,
keep us competitive blah blah blah, and so, you know,
most notably they said, look, why didn't you invest anything
in trying to develop hybrid technology that's very popular? And
so this is a battle that is shaping up between
(19:37):
Volkswagen management and their union. And ultimately, while while this
is a you know something that you know does relate
to the high cost of manufacturing in in Germany, ultimately,
in my opinion, the real issue is the one that
I noted at the beginning, which is, look, you've got
(19:58):
China providing huge subsidies to electric vehicle makers and they
are now exporting those evs into the EU, and it
is you know, causing some real damage to the German
manufacturing bases, as we can see here and Europe. Despite
this very direct threat to what is the economic engine
(20:21):
of the region, Europe does not seem to want to
take this seriously enough by raising tariffs on Chinese evs
to the level that's needed in order to maintain adequate
competition for domestic manufacturers. And I know people will say, well,
you know you need to have free trade in this now,
Well that also means that, hey, China's got to abide
(20:43):
by those rules of free trade, and they simply don't
when it comes to how they are subsidizing their manufacturers
in this industry in particular.
Speaker 4 (20:52):
So are tariffs even on the table here is a solution?
I don't they are, So let me have the context.
Speaker 5 (21:02):
So it's not from this piece.
Speaker 2 (21:04):
It's so back in the spring, Europe said that they
were going to I'm just pulling it up now, just
so I can have the rates correct.
Speaker 5 (21:14):
Europe said that they were going to. Yeah.
Speaker 2 (21:16):
On June twelfth, they said that they were putting into
effect higher tariffs of seventeen point four percent on cars
from BYD, nineteen point nine percent on cars from Geely,
and thirty seven point six from Sai C. And then
a couple of weeks ago they backtracked. And this is
(21:39):
from August twenty first, so just two months later I'm
quoting here.
Speaker 5 (21:42):
This is from CNN.
Speaker 2 (21:43):
The European Union might have just given Tesla's future sales
in the region a boost by setting tariffs on its
China made vehicles considerab below those imposed unrival electric automakers.
On Tuesday, the European Commission, the EU's executive arms, set
their rate for taxes on Tesla EV's at nine percent,
(22:05):
but then they ended up, you know, coming in at
these lower levels, you know, kind of in the ten
to twelve percent range that they set on Chinese EV's,
So basically they you know, pruned what they were going
to be doing, and it's I don't know, I find
it kind of disappointing in terms of, you know, how
they're approaching this, because in my mind, if you have
(22:28):
a country that is, you know, subsidizing to the extent
that China is their EV production, you want to do
something to offset that. And this is a place where
I think that tactical tariffs make a ton of sense.
Speaker 4 (22:44):
I guess it depends on your the consensus reached by
your political system. I mean, you the economic argument is, well,
then you focus on where your comparative advantage lies. You
make something else. Germans have decided, and this has a
long history, They've decided that they will accept slightly lower
(23:04):
not much. They're a very wealthy country, not as wealthy
as we are, but very wealthy in a per capita sense.
They'll accept slightly lower growth and living standards. I shouldn't
overstate that. You know, their economic growth is stalled there
and part of it is part of the part of
the it is undoubtedly attributable to the power that their
social contract, even if it's an implicit one, this sort
(23:24):
of agreement that business and labor and government are equal,
co equal partners in setting economic policy. They've consciously made
that made that decision to trade off higher growth the
rough and tumble capitalism that we practice here. They've made
a decision not to adopt that. Many social democracies have,
(23:46):
including our neighbors to the north, Canada, Scandinavian countries are
other examples. That's the way they want to live. Good luck.
I would take the subsidized Chinese crap and focus on
where we have a comparative advantage, which is largely what
we've what we've done until the past several years.
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Speaker 5 (25:11):
Mark.
Speaker 2 (25:11):
I want to talk a little bit about traffic, if
that's okay with you.
Speaker 4 (25:16):
Sure.
Speaker 2 (25:18):
So, there is a company by the name of Inrix
who they are a traffic data analysis company, and what
they are seeing is that as opposed to the typical
kind of pre pandemic rush hours that you would see
at nine am and five pm, instead, what you're seeing
(25:41):
is a little bit more of a midday rush hour
that picks up and then that activity continues throughout much
of the afternoon. And this is largely attributed to two factors,
one of which is the availability of remote work and
workers who might come in just for a portion of
the day, and the other one is is that as
a result of that, people may have moved further away
(26:03):
than they used to live from their offices, and so
you end up with much more traffic throughout much of
the day, but the peaks are not quite as trafficky
as they used to be.
Speaker 5 (26:14):
Your thoughts makes sense.
Speaker 4 (26:16):
I've experienced it myself, thanks to the generous work schedule
allowed to me by my employer. I appreciate the flexibility.
And I've myself witnessed unpredictable changing in traffic path and
now that you used to be able to count and
I think many you could probably relate to this. Tuesdays
(26:36):
and Thursdays used to be harrowing. Friday morning or afternoon.
Friday morning was great, always a cake walk. Friday afternoon.
I don't know whether people spent the night on Thursday
and they had to go home on Friday but not
go in. I've never been able to figure that one out.
Friday afternoons had been terrible. Now things are far less predictable.
And Chuck, that explanation is consistent with my own experience,
what I'm hearing in the experience of others, and what
(26:58):
we're reading in accounts like this, and I think it's
a good thing.
Speaker 5 (27:03):
Yeah, I do as well.
Speaker 2 (27:04):
It's something where ultimately I think we're still sorting through,
you know, what the longer term implications of this are.
But certainly it's you know, the one thing that you
see is again and I'll see it, you know, if
I'm you know, commuting to a different office or you know,
commuting again to and from the office, depending on you
(27:26):
know what my schedule looks like but yeah, it's the
afternoon busyness does seem to start around one thirty now
as opposed to you know, the three thirty or four
that it used to start at. So there's some definite
changes that have happened in this report saying hey, it's
(27:46):
not just what you're seeing locally, this is something that
you're seeing nationally as a trend in traffic patterns.
Speaker 5 (27:54):
Quick break here.
Speaker 2 (27:55):
When we return, we'll do a little bit of stack roulette.
Speaker 1 (28:00):
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(28:22):
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Speaker 3 (28:29):
The Financial Exchange has built an incredible partnership with the
Disabled American Veterans Department of Massachusetts. We can't wait to
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Speaker 5 (29:07):
Mark what do you have for me? For stack Roulette? Today?
Speaker 4 (29:09):
Chuck Good article in the Wall Street Journal. Everyone should
check it out. Trump is the title wants to drill,
Baby Drill. We all know that she stole that phrase
from Larry Cudlow. But can he cut energy prices? They ask?
And the upshot you don't have to read the twenty
odd paragraphs that comprise this article. The upshot is no,
no policymaker can. The price of oil is globally determined.
(29:32):
It's influenced by factors mostly, if not entirely, outside of
anyone president's control any countries control, really private or public sector.
In the short term, the issue right now is not
that the federal government is restricting drilling. We're drilling more
than we ever had. We've never been fully energy independent.
(29:53):
We've always imported a little bit even during the golden
era of Trump's term, as some of you like to
think about it in terms of oil price, but there's
very little a president can do. Oil companies have said
they're not going to drill more. They like high profits.
If anything, his deregulatory agenda for the oil sector, which
is probably mostly a good idea, we'll do nothing but
increase profits, not the supply of oil. Again, good article,
(30:17):
worth worth worth checking out.
Speaker 2 (30:19):
Yeah, if you look at gas prices in the last
twenty five years or so, the only times that we've
been really twenty years since you know, kind of the
middle of five the only times that we've seen gas prices,
you know, down around two dollars a gallon. There are
(30:41):
three key instances. The first is early two thousand and nine,
the economy was awful. The second is early twenty sixteen,
the economy wasn't terrible. But basically what happened is Russia decided, hey,
we want to put all of the US frackers out
of businesses quickly as possible, and so they just pumped
(31:02):
as much oil as they could and it devastated the
US energy industry, which, if you want to ask, hey,
why is you know, why are US energy firms a
little bit hesitant to pump more with you know, how
much they could still make on each marginal barrel of oil.
Speaker 5 (31:17):
The answer is late.
Speaker 2 (31:18):
Twenty fifteen early twenty sixteen, when Russia put the screws
to them. And the third time when you see all
gas prices down in that range was May of twenty twenty,
when most of the economy was still kind of emerging
from the initial shutdowns after the COVID nineteen pandemic kicked off.
So none of those are situations where you look at
(31:38):
it and say, hey, that was you know, the result
of policy in the United States that caused this. No,
they were either bad economies or someone else saying we
don't care about profit, We're just gonna pump no matter what.
In basically any other period during that time, gas is
covered between two dollars and fifty cents and three dollars
and fifty cents a barrel, and there's no correlation between
(32:03):
what policy was at that time and where gas prices
ended up. You can make a case, hey, is it
better for us to try to produce domestically so that
we're not as beholden, you know, to other countries that
might not share how we want the geopolitics of the
world to you know, unfold, sure, of course, but that's
(32:24):
different from saying that you're going to be able to
change gas prices simply by shifting the policy that you are,
you know, conducting domestically as we've seen. Look, if the
United States says, hey, we're going to pump more in
order to get prices down, OPEC might simply say, fine,
we want to continue to be profitable and we're not
(32:45):
going to pump as much then.
Speaker 4 (32:47):
So there'd still be a global price for oil. Though,
are we going to determine you can't cut off international
correct demand? How are we going to determine the price
of a gallant even if we said we're not gonna
let in any foreign oil, we're going to refine it
here from sou to nuts, from when we take it
out of the ground until it goes into your car,
how will you determine the price for that supply and demand? Okay,
does that mean you're not gonna let any international buyers
(33:08):
into this market? It's that's not workable. The magic bullets
like this are always fanciful, and this is an example
of a great example of one again check out the article.
They spell out the pros and cons.
Speaker 2 (33:24):
Mark, I want to talk a little bit about space here,
if that's okay, of course. Okay, So the Boeing star Liner,
which is uh, well, it's supposed to be undocking from
the International Space Station later this week, but over the weekend,
there was this mysterious sound that started permeating through the
(33:48):
star Liner. It sounded like a sonar ping. Unfortunately, it
was not aliens coming to you know, destroy Earth with
you know, greater technology. What in fact it turned out
to be was that there was an echo from some
kind of hot mic that was you know, echoing over
(34:10):
the speaker and generating that feedback that you get, and
they were able to identify that as the problem rather
than anything more exciting, like you know, the aliens from
Independence Day coming down and you know, trying to devastate
humanity or anything like that.
Speaker 5 (34:29):
So this was a big relief. Yes it was I
missed the alert.
Speaker 2 (34:36):
It was a microphone that was turned on by mistake,
and not aliens coming to destroy us.
Speaker 3 (34:43):
I mean, if I started hearing eerie sounds after being
in that space shuttle, what I thought was going to
be eight days or whatever. It was, and it's now
been months. Oh boy, your mind's gonna start playing tricks
with you at that point.
Speaker 4 (34:57):
Any action would be welcome that too.
Speaker 5 (34:59):
Yeah, Moon's haunted.
Speaker 4 (35:01):
You'd be famous.
Speaker 3 (35:02):
The moon's haunted.
Speaker 5 (35:04):
Moon's haunted. Get out of here.
Speaker 2 (35:07):
Taking a look at markets at the top of the hour,
we got the Dow up sixty three points, the S
and P's up one, Nasdaq up four, So not a
whole lot of movement today in either direction after a
big downward slide yesterday. We'll see what ends up holding
up in the afternoon, and we're back tomorrow. We got
more jobs dated with the weekly jobless claims. All that
(35:28):
and more coming up on tomorrow's show on the Financial
Exchange
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