May 13, 2025 • 38 mins
Mike Armstrong and Paul Lane discuss President Trump's plan to cut drug prices and what could be in the way of his goal. Foreign tourists staying away from the US could cost the country $12.5B this year alone. Some indexes are back in positive territory for the year. Doctors warn accountants of private-equity drain on quality. Fox and ESPN set to launch new streaming services.
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Speaker 1 (00:00):
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(01:06):
and Paul.
Speaker 2 (01:06):
Lane, Good morning, Welcome back to the Financial Exchange. It's Mike,
Paul and Ben with you on a Tuesday morning, and
we continue to digest the news from Monday morning of
the negotiation of a deal with China, or at least
the suspension of the very high level of teriffs we
(01:27):
had been facing with China. The newly agreed upon deal
sets those tariff levels at thirty percent for Chinese made
goods coming into the United States, ten percent for American
made goods going into China. There is also a reduction
in the price paid for the deminimus goods. So these
would be direct imports that are finished products coming into
(01:47):
the US from China. Say you buy something on Temu
or Shen that is coming down into the fifty percent range.
On the heels of that, you have just about every
retailer and up their suppliers in China and saying, load
up the ships, fire up the factories again, we want
to get this stuff into the US within the next
ninety days. Not knowing what comes next, we Chuck and
(02:11):
I talked about this, like, are there some out there
who are saying, you know, we already got down from
one forty five to thirty. Do I just wait this
out and see if we get even lower? My sense
would be no. My sense would be no, I'm just
gonna pay the thirty while I know what it is
and just suck it up and deal with that, rather
than try and skirt this thing on the tail end,
assuming it'll be lower at the end of it. But nonetheless,
(02:34):
the activity seems to be fire up the factories, get
this stuff over to the United States. The other big
announcement that came yesterday on the just right after was
the president's planned to slash drug prices and what he
is attempting to do there, And so that's where we're
going to start the show today, is that attempted plan
to cut those drug prices and what it might mean
(02:55):
for you. Look, this is not a new issue on
the campaign trail anywhere. In Vermont, for example, you talk
to plenty of people who go across the border into
Canada to get their drugs at a cheaper price than
they can here in the United States, even with Medicare
coverage and things.
Speaker 3 (03:14):
Along those lines.
Speaker 2 (03:16):
And it's been a constant area of debate as to
how it should be handled. So what's been announced so
far has been an executive order to slash those drug
prices and give the United States a Most Favored Nation
status that would allow or force drug companies to price
their drugs at the same rate that they do other countries.
(03:39):
Not the first time it's been attempted, not an act
of Congress. I think it's going to be difficult to
actually enact something like this, But the goal is to
reduce drug prices by fifty nine to eighty percent. That's
an ambitious target. Let's just call it that it is.
Speaker 4 (03:59):
The difficulty that you have is that in some of
these other foreign countries across the globe, they are products
of a single payer health system. So it is much
different than the infrastructure in place on the pharmaceutical drug
side of things here in the United States, which is
kind of a patchwork of public, public, and private insurers,
(04:20):
and it relies on middlemen rather for benefit negotiation, the
likes of CBS, Care Mark and others. Out there is Cardinal,
the other big one that does price negotiation on the
pharmaceutical side of things.
Speaker 5 (04:36):
So it's very different. That's the point of it.
Speaker 4 (04:40):
And what levers would have to be tweets here is
either the drug manufacturer is going to say, will lower
our price. Not a lot of incentive for any business
out there to lower its prices, or foreign countries say
we'll pay more. Again, not a lot of incentive on
that end of things either. And it's a long, an
arduous process to get any type of negotiations through with
(05:06):
these drun manufacturers. So while ambitious and a lot of
US could get on board with this idea, difficult to
implement readily.
Speaker 2 (05:14):
Look, there are plenty of pitfalls of the American healthcare system,
and I have no love for health insurance companies that
make those decisions as to what they cover and what
they don't. But what are the advantages. Happens to be
that if the drug works, you can generally get it
in the United States and get it covered by health
insurance more readily, especially if it's a new drug. Then
some of the other single payer healthcare systems out there
(05:37):
who will negotiate with the pharmaceuticals and say no, we're
not going to cover that drug at all, and it
might not even be available in the United Kingdom for example.
That obviously creates a huge burden on the US system
because the prices end up being a lot higher without
a single payer negotiator that's taking a look at, Okay,
(05:58):
we're going to buy this drug. We're not going to
pay for this drug. We are going to you know,
allow this procedure and not that one. And it also
makes it incredibly complex for any you know, I don't
practically really understand how a pharmaceutical company will go about this, right, So,
do I have to go offer every US insurer the
(06:19):
lowest price that I'm offering to any other nation? Do
I have to take an average of all those other
prices and make sure that I'm there. Does does every
US insurance company, even if they only have a few
thousand participants, need to be offered the lowest price that
I'm facing elsewhere? It is pretty complicated. One thing is true.
I mean we are a huge market, and so you know,
(06:41):
if for instance, a drug is getting priced cheaper in
France with a much smaller population, I would think that
we do have some negotiating power on that. But it's
also one of these items that you know, given our
free market system, I don't know how the president executes
this via executive action.
Speaker 4 (06:58):
Probably your best bet is going through Medicare, just the
leverage that it has because it just represents such a
huge swath of the population that rely on many drugs
just given their age range. That would probably be your
best starting point is to levers the negotiating power that
you have from Medicare to get better prices than some
drugs out there. That probably seems like the best bet.
(07:21):
But anything with the healthcare system is just complex and
very artuous to figure out. So we're just a couple
armchair quarterbacks here who have here a thing, no expertise.
Speaker 2 (07:33):
Here are things I know. It's amazingly complicated. Yes, it
is not a new issue. It has been getting campaigned
on for twenty thirty years. And the last thing I
know is that the drug lobby, the pharmaceutical lobby, is
one of the most powerful ones that we have here.
Big oil, maybe the tech lobby is pretty big, but
(07:54):
not in the same way as pharma would be. And
so they've managed to negotiate their way into a number
of different deals to make sure that their carve outs
are there, their exemptions are there, including you know the
fact that until recently Medicare could not negotiate drug prices
with pharma companies. So long road ahead I think would
(08:14):
be the answer to all of this almost undoubtedly. You know,
this doesn't take This doesn't cause any action to be taken.
But if companies start taking action as a result of this,
probably lands in the courts pretty rapidly. And I'm not
sure just how far it will go, but suffice to say,
the health the pharmaceutical companies that are impacted their stocks
(08:35):
are not taking any big hits as of right now,
and so it does not seem to be getting digested
as a terrible, terrible news for any of them. Let's
take a quick break. When we come back, we're going
to have some trivia here. That's next on the Financial Exchange.
Speaker 1 (08:50):
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(10:09):
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Speaker 3 (10:32):
Either of you have any friends or family in Chicago,
Ben and.
Speaker 5 (10:36):
Paul, No No, I don't.
Speaker 2 (10:38):
Okay, So what's going on in Chicago right now? Is
anyone with any roots to Chicago is drawing their line
of connection to the new Pope. Oh yes, it's quite humorous.
My wife did the exact same thing. She felt guilty
to it almost immediately. She grew up in a town
called South Holland, Illinois. That it's unclear whether he grew
up there or the town over, but you like brought
(10:59):
it up at dinner the other The most recent news
is that one Chicago pizza chain is claiming to be
the favorite of the Pope because he did visit there,
and they are developing their own menu for, you know,
to honor the Pope, including a Poperoni pizza which.
Speaker 3 (11:17):
Is just top.
Speaker 2 (11:18):
But the alleged favorite in the pizza battles of Chicago,
which are pretty serious, is Aurelio's not my personal favorite.
We I bring this up because I spent a lot
of time in Chicago. My personal is lu Mel Naughties.
Speaker 4 (11:32):
That's like the most famous deep dish in Chicago, right.
Speaker 2 (11:36):
Think so, But it's tough to make that claim, I think.
But Aurelios has I think some twenty odd locations and yeah,
developing the full pope menu, including I did like poparoni.
Speaker 4 (11:46):
It's so funny that you mentioned that, because my mother
in law called us, my wife and the other night
and said that so and so's brother went to Villanova,
and you know, like not even Catholic, the same thing,
and so my wife and I wife Lutheran.
Speaker 5 (12:01):
My wife and I just fot it. Oh cool.
Speaker 4 (12:03):
She's like, that's all you guys got for really, Yeah,
that's that's all we got.
Speaker 5 (12:08):
We got.
Speaker 2 (12:08):
So yeah, if you know anyone from Chicago, I am
sure you have already heard about their personal connection to
the new pope and the excitement of all that. But
moving on, piece from the New York Times. According to
a tourism group, the World Travel and Tourism Council, which
we've never quoted before on this program, so I'm not
(12:28):
sure to what degree I should trust them, but nonetheless,
they are claiming in a New York Times piece that
foreign touristing away could cost the US travel industry some
twelve and a half billion, with a b dollars this
year in foreign spending. It's expected that we're on track
to lose that twelve and a half billion dollars, falling
(12:49):
to less than one hundred and sixty nine billion dollars
from one hundred and eighty one in twenty twenty four,
which would be a fairly serious decline. And I don't
know how much evidence there is of it yet, but
most of the evidence that I've heard is primarily from
a few clients that I have in Maine. For example,
one of them mentioned that their kids manage a few
(13:11):
airbnbs and they've seen a pretty big drop off in
demand so far. I'm sure you're seeing it up and
down that main coast line parts of New Hampshire. We
weren't yet seeing it in the winter season, right, so
you know you weren't seeing it, for instance, for the
skiing season at Jpeak, I don't imagine, but summer will
be the first time here. Where do you see any
(13:33):
sort of drop off in real demand for tourism to
the United States as a result of some of the
trade escalations that we've been seeing with Canada comes to
mind for me, but.
Speaker 3 (13:45):
You know, it's everywhere.
Speaker 2 (13:46):
I think you're if you're going to talk about who
would normally visit the United States, that's a little bit
annoyed by all of this. Canadians and Europeans come to mind,
right right, specifically EU Europeans, not necessarily the UK because
that trade deal got kind of pushed through, So I
don't think there's a drop off there. But you know,
those are two areas that have some pretty serious.
Speaker 4 (14:07):
Well trade and also some immigration policy concerns coupled with
that as well.
Speaker 2 (14:12):
Yeah, yeah, I suppose that's probably staying.
Speaker 4 (14:16):
Just issues with bordered attentions and confusion over visas are
deterring international visitors a little bit. That could perhaps contribute
to it. It's two point three six trillion of tourism
we saw last year in the United States for twenty
twenty four. Ninety percent of that was domestic. The claim
is that international travelers, according to the US to Travel Association,
(14:38):
spend four thousand dollars a trip. That's eight times more
than domestic US travel, so a little bit more lucrative.
Speaker 5 (14:44):
There are those international travelers.
Speaker 2 (14:46):
Might my doubts on all of this. Here's my counterpoint.
When I talked to myoperic, we have somebody that cares
for our children. She's from Brazil, she's on a special
visa to to work in the United States and care
for my children right now. Number one thing I asked
her what she wanted to do while she was in
the United States go to Disney. Disney tell me right
(15:09):
now that their bookings for their resorts and for their
parks are just fine. Their most recent earnings reports said
that they are looking good in terms of bookings. There's
no real drop off, And I just look at that
as a pretty decent barometer of where spending is going
to come in in terms of total tourist travel in
(15:31):
the United States, because you go to those resorts and
there are definitely a lot of foreign travelers that are
booking that trip in order to attend a Disney theme park.
And I know we've been hearing here and there about
the drop off. I'm just not I'm not convinced that
we are seeing it right now in terms of what
everybody's claiming.
Speaker 4 (15:48):
No, I've heard more the other side of the argument, like,
for example, the o pair you're speaking of, concern about
if she were to visit Brazil and come back here.
I've heard people very hesitant to do that, but not
the other way.
Speaker 3 (16:01):
Around, agreed.
Speaker 2 (16:02):
Speaking of travel, United facing some issues specifically with the
Newark Airport. United Airlines, if you're not aware, operates about
two thirds of the flights through Newark Airport, and they
have been struggling a little bit, let's just call it
Newark Airport with their outages on their radar systems, which
(16:25):
have been there's been two of them over the last
few weeks.
Speaker 3 (16:28):
Is that right, I believe so, yes, there's just these.
Speaker 2 (16:32):
Kind of I mean, look, the United CEO is going
out there and trying to calm the public and say, look,
it's safe. All the planes are equipped with technology to
be able to see the other air.
Speaker 3 (16:42):
Traffic that's out there.
Speaker 2 (16:45):
But again, like the stories that I'm hearing reported right
the Guardians reporting that Newark air Traffic Control had three
air traffic controllers on duty instead of fourteen during the
most recent times. All these questions about safety and flying
through Newark Airport. Now part of me would say, hey,
(17:06):
you know, flyers are going to try and not fly
through that airport. And frankly, there's three of them in
New York that you can choose from, and so you've
got a few options there. On the other hand, a
couple of years ago we had doors flying off airplanes
and it did not scare anyone away from flying, and
so I think they need to do some pr I
(17:27):
think it's embarrassing how crippled and embarrassed and just outdated
our technology is that gets used in these airports. I mean,
I'm just scratching the surface and starting to learn about it.
But you know, the Internet service has to be downgraded
when it goes into the airports in order for these
old machines to actually be able to handle the.
Speaker 3 (17:48):
Stuff that comes in. It's really kind.
Speaker 2 (17:50):
Of embarrassing how far behind we are on this stuff.
But I also just don't think it's going to scare
anyone away from flying.
Speaker 5 (17:57):
No, I don't. I don't think so. There's too many
flights and demand on a daily basis to erode that.
Speaker 2 (18:02):
So, you know, maybe just coincidental here. But in order
to satisfy their customers who are worried about that Newark Airport,
New United is adding caviar service and luxury jammies to
their super premium travelers.
Speaker 4 (18:18):
I know you were mentioned to me off air that
Armstrong was going to get in on this type of
travel come twenty twenty six.
Speaker 2 (18:25):
No, you misunderstood. We are booking some stuff on Spirit.
We must have must have crossed the lines there. Yeah,
I don't think that they do offer caviar on Spirit.
I didn't fully look at the menu last time I
flew on them, but caviar just didn't seem like it
was on the list.
Speaker 3 (18:45):
But yeah, I mean, look, if you're.
Speaker 2 (18:46):
Gonna spend ten to fifteen grand on a sea dann well,
better serve me some caviar in that first class cabin.
Speaker 4 (18:53):
Who's gonna want the lux jammies? You know, who is
gonna gonna go for those? Unless I guess maybe if
they're new. I'm sure obviously they so contract with some
other company out there to offer them.
Speaker 3 (19:05):
But yeah, but.
Speaker 2 (19:07):
Sitting in that first class reclining seed in my United jammies,
eating caviar while you stare at all the riff raft
going back to the coach, I mean, that's what it's
all about, right, It's.
Speaker 1 (19:20):
A thing.
Speaker 3 (19:20):
I hope it says first class like as a big badge.
Speaker 2 (19:23):
Right on the jammies so that they can rub it
in your face a little bit more while you know,
sipping that champagne and eating the caviar.
Speaker 3 (19:30):
We'll have the trivia winner when we come back.
Speaker 7 (19:32):
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(19:55):
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Speaker 6 (20:10):
Our trivia question today was what was the name of
Stephen Colbert's late night show on Comedy Central. Your answer
the Colbert Rapport. Today's winner is sal in Buxton, Maine.
He has won a Financial Exchange Show t shirt. We
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Speaker 2 (20:30):
We continue to get hints as to what is coming
out of the President's trip to the Middle East, and
he's about to take the stage on an announcement of
boosting US investments in a number of different areas. I've
seen numbers thrown around six hundred billion. The one that's
on the screen now is a trillion dollars and the
President just began speaking. But one beneficiary of this seems
(20:52):
to be in Video, whose stock is moving up about
five and a half percent today, dragging markets up alongside
of it. The the NASDAC now up one point six percent,
the S and P five hundred up nearly nine tenths
of a percent, and the Dow Jones Industrial Average, America's
most useless index, currently down one third of one percent.
Speaker 3 (21:14):
It's just an easy target, yeah, they are.
Speaker 2 (21:16):
The fact of the matter is, though, that the S
and P five hundred is now in positive territory after
yesterday's and today's gains. For the year, yesterday we finished
right around where we were on Inauguration Day or sorry,
on election Day of last year. And I guess it
brings me about a few different healthy reminders when it
(21:38):
comes to the stock market. One this period especially has
been defined by attempting to make investment decisions based on
a single person's tweets.
Speaker 3 (21:51):
The lesson that I have.
Speaker 2 (21:52):
Is what a dangerous game that is to play as
as an investor, maybe not as the president, like you know,
I know how he likes to negotiate, and not saying
he should or shouldn't do it that way, I am
saying that if you are an investor who's trying to
interpret what does this all mean for the economy and
me it was a pretty challenging couple of months here
to navigate the interpretation. Remember, like go back to where
(22:15):
we were in February. Markets were reaching all time highs.
We have not yet climbed back to those February all
time highs, by the way, but markets were hitting all
time highs at the same time. The President was talking
very hawkish on trade. It was threatening the teriffs that
he later followed through with, and once he followed through
with them, made it pretty clear that he was serious
about them and that they were there for the long term.
(22:37):
Turned out, long term lasted one week. The most severe
tariffs that were out there lasted seven days before they
had to be suspended. The higher Chinese tariffs I think
we lasted maybe four to six weeks on all of it.
The lessons out there for investors, I think are a fewfold.
One trying to manage a portfolio and adapt to that
(22:59):
changing narrative on a day to day basis. Look, if
you timed it perfectly, then you've made some money this year.
Right If if you managed to get out and then
get back in after markets were down by nineteen percent,
then good for you. You're one in a million on
all of this. The bigger lesson is, Look, nobody had
any idea that the President was about to cut tariffs
(23:19):
on China by thirty, you know, by one hundred and
fifteen percent. And if they had known, then markets would
you know, they would have known that, Hey, markets are
going to rally a good three percent on all of
this news. But for those that have been concerned about
their portfolios this year, I don't think that any of
this indicates to me that those concerns should be wiped away.
(23:43):
But I think a lot of the emotional investing that
I've been hearing about really since the president was elected
has a lot of room for error, and that goes
both ways. I've talked to folks who got more aggressive
when the president was elected and lost money almost immediately
on their investments. I've talked folks who were so spooked
by the thought of tariffs and and the actions that
(24:04):
the President was taking on that front that dramatically pulled
back their exposure and ended up missing out, especially if
they did it recently. And so here's my takeaway. Any
emotional investing by its very nature is bad investing. It
doesn't mean you will never make money on it. It
just means that long term, it's not a great strategy
(24:26):
if you have been facing down the last few months
with confusion, as many people have, in terms of what
do I do next? What does this mean for my
personal scenario? How are all the changes that the tax
level going to affect me personally? And what do I
do next? We'd love to talk to you here at
the Armstrong Advisory Group. The number to talk to one
of our real life human beings eight hundred three nine
(24:49):
three four zero zero one. We have a really methodical
process when we sit down with somebody for the first time.
Where we sit down, we really go through a lot
of questions about your personal situation. It's not just how
are you invested? I know we talk about that a
lot on the show, but it's what's your family situation,
what is your plans for retirement? How can we help
(25:10):
with any of these things? Do you actually fit into
the mold of what it is that we do here
at Armstrong And there's usually a second or even third
meeting before that final decision is actually made on whether
to move forward, if you could benefit from that type
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for Armstrong Advisory Group is eight hundred three nine three
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Speaker 1 (25:35):
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Speaker 2 (25:51):
Peace in the Wall Street Journal this morning, doctors Warren
accountants of private equity drain on quality quote you could
be next. So here's what's been happening in the medical
space for anyone that does not work in that area
or doesn't know somebody who does. Is private equity has
been gobbling up all sorts of hospitals, emergency rooms and
(26:13):
doing what private equity does, which is make it lean,
make it efficient. And that has allegedly led.
Speaker 3 (26:20):
To some problems out there.
Speaker 2 (26:22):
And I'll give the example of someone I know personally
who works in emergency room medicine. And the point that
they made was, frankly, they made the point to me
that they're trying.
Speaker 3 (26:34):
To leave the industry.
Speaker 2 (26:36):
They said, with the pressure that I have on me
to churn through patients, to not appropriately dedicate my time
to them and then pretty much be disallowed from following
up with them on recommendations and follow up diagnoses that
I genuinely am not sure I'm able to fulfill my
(26:56):
hippocratic oath. And so the individual I talked to it
was like, you know, I'm going to keep doing this
because I have nearly half a million dollars to student
loans that I'm in process of getting forgiven by, you know,
because they've worked in a public hospital system for a decade.
Speaker 3 (27:10):
And but beyond that, they said, you know, I.
Speaker 2 (27:13):
Don't know if I'm going to look in pharmaceutical or
some other area, but I don't know that I want
to continue to be a frontline physician. And had purely
everything to do with what's being described in this article
of the le private equity is playing with hospitals and
doctors pretty directly contradicts what I'm trying to do for
my patients. I don't see that as much of an
(27:35):
issue as the same degree of an issue for accountants.
I will just throw it out there that I don't
see how that's going to relate.
Speaker 4 (27:44):
One for one, I could see possibly the ethical challenges
that could come as a result of that, you have
pe firms that are private equity firms that may be
investing in accounting practices and as such making them leaner
or perhaps encouraging them to take on riskier than normal
clients in order to boost profitability. And that puts accounting
firms and precarious positions to audit firms that they wouldn't
(28:07):
necessarily have considered as that's a fair point.
Speaker 2 (28:09):
Yeah, I mean there's not much that I can think
of on the you know, individual or corporate tax return
side that is going to be a problem if a
private equity firm drives for more efficiency, but yeah, in
the search of new revenue, if they push to not
do a real audit on the financials and then it
turns out it's the next en run a few years
from now, you know, the person working on the audit
probably never works in the industry again. And the company
(28:31):
that did the audit, well, depending on how big they are,
probably is just fine and walks away from it scott free.
But that is some of the risk here. When you're
talking about what does private equity do. They combine firms
try and lay off a whole bunch of staff that
do the same things and focus on where can we
get new customers, how can we service them for a
cheaper price point.
Speaker 4 (28:51):
And turn around a business usually in a very shorter
time horizon than normally you'd operate a business as a
founder for example. You know, they're just trying to eke
out and return to make sure their general partners and
limited partners get their prerequisite capital back plus the return
that they've been promised.
Speaker 5 (29:07):
So it doesn't align with.
Speaker 4 (29:10):
The ideas, particularly the ideology behind healthcare, which is, you know,
providing good care to many patients out there, is running
contrary to the idea of running a streamline, profle business
that is focused on efficiency and perhaps cutting. It kind
of goes against one another in often cases.
Speaker 2 (29:29):
Yeah, there's a few areas that you just don't it's
not the primary goal.
Speaker 3 (29:33):
Medicine is one of them.
Speaker 5 (29:34):
Yep.
Speaker 3 (29:35):
Defense is another.
Speaker 5 (29:36):
Sure.
Speaker 3 (29:36):
But this private equity story, it's everywhere, right.
Speaker 2 (29:38):
It's at dentist offices, it's at veterinary offices, it's at
financial advisory firms office. I personally probably get five to
ten emails from private equity backed firms looking to merge
companies together every week. Wow, I'm not saying they should
or shouldn't exist. I think they should certainly exist, and
(30:00):
I really see no issue with what they're doing in
our industry. But what they are doing across many industries,
to be really clear, is buying up really small companies
that probably aren't the most efficient out there, combining them together,
laying people off, and packaging them together to sell them
for a larger price point. And that works really well
in some areas that haven't private previously had such exposure.
Speaker 4 (30:24):
A couple of the corporate acquisitions that had been done
through PE backed hospital systems led to a wake of bacricies,
including Steward Healthcare and Prospect Medical Holdings. So that's where
some of the concerns stems from.
Speaker 3 (30:36):
Yep, no doubt. Let's say a quick break when we
come back, stack Roulette.
Speaker 1 (30:42):
Taras fears continue to grip markets. Get the latest straight
from Wall Street right here on the Financial Exchange Radio Network.
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Speaker 2 (31:21):
Quick follow up on the tax bill we're making its
way through the Republican House. A quote from New York
Republican Representative Nick Lloda, quoted in Politico this morning, quote,
the legislation has currently written is dead on arrival. He
accused his party's chief tax writer of acting in bad faith. Quote,
(31:42):
the bill is dead effectively on the floor. This all
has to do with the state and local tax deduction.
So Lloda, alongside four other Blue state Republicans from New York, California,
and New Jersey, they've been pushing hard for a big
boost to the ten thousand dollars state in local tax
cap that is currently in place, and those five at
(32:03):
least calling for this bill to be dead on the
floor and to be done more. The proposal that was
mentioned was a raise threefold to thirty thousand dollars cap
with a four hundred thousand dollars income limit, and that
apparently not enough for those Republicans at least to get
the bill over the over the hump here. The reason
this all matters, of course, is because zero Democrats are
(32:26):
intending to vote for this bill, and so you can
have very few defectors to get this thing done. So
you know, don't count any of these tax changes in
until they are actually in and we'll have to continue
to digest this as time goes on, because you could
see massive changes to what's even being proposed right now.
Speaker 5 (32:43):
Definitely.
Speaker 3 (32:45):
What do you have for us, Paul, Well, I've got
a little.
Speaker 5 (32:47):
Bit of news on the streaming front.
Speaker 4 (32:48):
We've got two providers over the course of the last
several days announcing that they will be launching new streaming services.
Speaker 3 (32:55):
Thank goodness.
Speaker 4 (32:57):
Just in case your life wasn't confusing enough, Fox is
going to be launching a new streaming service, Fox One
before the NFL season. It's going to combine its news,
sports and entertainment content before the NFL and college football
seasons this fall.
Speaker 5 (33:15):
It's going to.
Speaker 4 (33:15):
Be put together at a quote unquote healthy but not
a discounted price, according to chief executive.
Speaker 3 (33:22):
Officer Hell does that mean?
Speaker 5 (33:24):
Great? Great question?
Speaker 2 (33:26):
The reason that could be anywhere from seven to forty
dollars a month.
Speaker 4 (33:31):
The reason that I bring this up along with another
story that came out with ESPN announcing that they're going
to launch their streaming service titled you guessed It, ESPN
coming for thirty dollars a month. This will combine together
Disney's other streaming services, Disney Plus and Hulu. If you
(33:52):
want the three of them together, it will cost thirty
six dollars a month. The standalone ESPN will come again
this fall for thirty bucks for the first twelve months,
and it will offer this differs greatly from where it
is today access to its live sports content. ESPN Plus
offerings are more niche offerings of UFC and.
Speaker 5 (34:15):
Other areas out there.
Speaker 4 (34:16):
And I just feel like my initial piece would be
an initial takeaway that the cable providers have to be.
They not like they didn't see this coming. They've had
to cline subscriptions for a long period of time. But
the affiliate fees that you generate from ESPN and some
of these other heavy hitters that have live sports really
carry the significant costs of what you and I are
(34:38):
for those people who pay their cable every month. And
this pushes someone like myself, who is pretty much just
locked into watching live sports and really not a lot
else on cable, further and further away from keeping up
with the cable subscription to the point where its erosion
seem like it's it's imminent in the next several years.
Speaker 3 (34:59):
I just don't know. I'm with you, but we are
now getting to the point where you have.
Speaker 5 (35:04):
To be bundled back many together.
Speaker 3 (35:06):
Like, so, what was the ESPN service going for.
Speaker 5 (35:08):
Twenty nine bucks a month? Thirty bucks a month.
Speaker 2 (35:10):
Which, by the way, the fact that you can get
an ESPN subscription for the same price as a Neessen subscription,
which is twenty nine to ninety nine a month, is preposterous.
That is crazy. I know we're big New England sports fans,
but clearly the ESPN one should cost more.
Speaker 5 (35:26):
There's well, you know that's a tea.
Speaker 4 (35:28):
You know, that's a teaser, right, it's the first twelve months,
but that doesn't mean that it won't be forty five
dollars two years from now when we talk.
Speaker 2 (35:35):
So I guess the question is, all right, how much
can I save if I have Disney Plus, Hulu Live
TV and this all together? And you know, should I
be considering all of that? It seems just absolutely crazy.
Speaker 4 (35:48):
It's a great question. We should run through it quickly. Okay,
So that's thirty six months, thirty six bucks a month
right there. If you go Hulu, Disney Plus and ESPN,
you have to have Netflix for most people out there,
that's what eighteen right.
Speaker 2 (36:02):
So it's only thirty six bucks. Well, that's that's not
Hulu Live TV. That's Hulu. They're streaming service which has
good content, but it's not the live TV option.
Speaker 4 (36:11):
It just says Hulu, Disney Plus and this. There's other
streaming services. So you got let's call it. Maybe I'm
off on that seventeen eighteen bucks. So right there, you're
at fifty three between those two. Throw in Amazon Prime
most people have with the membership max. HBO Max is
probably twenty bucks a month. You get to seventy three. Yeah,
or somewhere where's Apple. It's I don't I don't know
(36:33):
that fifteen bucks a month. Okay, I'm the only person
I know that doesn't have Netflix. Yes, I do have Apple.
I didn't have HBO, but I resubscribed because my other
package that I have does not have Knesset or does
not have TNT, and the hockey playoffs are on TNT,
so I can get that through an enhanced HBO subscription,
(36:54):
which I'm going to cancel after the Stanley Cup playoffs.
Speaker 5 (36:58):
It's it's like.
Speaker 4 (36:59):
A hangover if of zach alfanaks running all the multiple
calculations of the black Tach table.
Speaker 2 (37:04):
It's your head goes just gotten preposterous. I but to
your point, I don't have a cable package. Yeah, I've
got this Fubo thing, which I only subscribe to because
it has nesson, And I just figured, Hey, if I'm
going to pay thirty bucks a month for nesson three sixty,
I might as well pay like sixty bucks a month
(37:24):
for a full slate of channels that I can go
and stream.
Speaker 3 (37:28):
But now I'm adding in Hbo. Now I'm adding in.
Speaker 2 (37:31):
Apple TV and all these other services, and I'm probably
right back up at a basically, for your.
Speaker 5 (37:36):
Kids, is it all YouTube that they consume when they.
Speaker 2 (37:38):
Watch YouTube or Disney Plus? Yeah, those are the only
two services that we actually.
Speaker 5 (37:43):
Yeah, our kids are not going to know cable at all.
I mean, my kids, it's all YouTube.
Speaker 2 (37:48):
It's so bad out there on YouTube land. That is
all the time that we have today. On the financial exchange,
markets remain in mixed territory, but SMP and NASDAC moving
strongly higher. We've got the S and P five hundreds
still up eight ten percent, NAZDA C up nearly one
point six now, and the Dow Jones industrial average right
now off one hundred and fifty five points a little
(38:08):
bit more than a thirty percent. We will be right
back at it tomorrow, folks, so stay tuned and have
a great rest of your day.
Speaker 3 (38:14):
We'll see you then
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(01:06):
and Paul.
Speaker 2 (01:06):
Lane, Good morning, Welcome back to the Financial Exchange. It's Mike,
Paul and Ben with you on a Tuesday morning, and
we continue to digest the news from Monday morning of
the negotiation of a deal with China, or at least
the suspension of the very high level of teriffs we
(01:27):
had been facing with China. The newly agreed upon deal
sets those tariff levels at thirty percent for Chinese made
goods coming into the United States, ten percent for American
made goods going into China. There is also a reduction
in the price paid for the deminimus goods. So these
would be direct imports that are finished products coming into
(01:47):
the US from China. Say you buy something on Temu
or Shen that is coming down into the fifty percent range.
On the heels of that, you have just about every
retailer and up their suppliers in China and saying, load
up the ships, fire up the factories again, we want
to get this stuff into the US within the next
ninety days. Not knowing what comes next, we Chuck and
(02:11):
I talked about this, like, are there some out there
who are saying, you know, we already got down from
one forty five to thirty. Do I just wait this
out and see if we get even lower? My sense
would be no. My sense would be no, I'm just
gonna pay the thirty while I know what it is
and just suck it up and deal with that, rather
than try and skirt this thing on the tail end,
assuming it'll be lower at the end of it. But nonetheless,
(02:34):
the activity seems to be fire up the factories, get
this stuff over to the United States. The other big
announcement that came yesterday on the just right after was
the president's planned to slash drug prices and what he
is attempting to do there, And so that's where we're
going to start the show today, is that attempted plan
to cut those drug prices and what it might mean
(02:55):
for you. Look, this is not a new issue on
the campaign trail anywhere. In Vermont, for example, you talk
to plenty of people who go across the border into
Canada to get their drugs at a cheaper price than
they can here in the United States, even with Medicare
coverage and things.
Speaker 3 (03:14):
Along those lines.
Speaker 2 (03:16):
And it's been a constant area of debate as to
how it should be handled. So what's been announced so
far has been an executive order to slash those drug
prices and give the United States a Most Favored Nation
status that would allow or force drug companies to price
their drugs at the same rate that they do other countries.
(03:39):
Not the first time it's been attempted, not an act
of Congress. I think it's going to be difficult to
actually enact something like this, But the goal is to
reduce drug prices by fifty nine to eighty percent. That's
an ambitious target. Let's just call it that it is.
Speaker 4 (03:59):
The difficulty that you have is that in some of
these other foreign countries across the globe, they are products
of a single payer health system. So it is much
different than the infrastructure in place on the pharmaceutical drug
side of things here in the United States, which is
kind of a patchwork of public, public, and private insurers,
(04:20):
and it relies on middlemen rather for benefit negotiation, the
likes of CBS, Care Mark and others. Out there is Cardinal,
the other big one that does price negotiation on the
pharmaceutical side of things.
Speaker 5 (04:36):
So it's very different. That's the point of it.
Speaker 4 (04:40):
And what levers would have to be tweets here is
either the drug manufacturer is going to say, will lower
our price. Not a lot of incentive for any business
out there to lower its prices, or foreign countries say
we'll pay more. Again, not a lot of incentive on
that end of things either. And it's a long, an
arduous process to get any type of negotiations through with
(05:06):
these drun manufacturers. So while ambitious and a lot of
US could get on board with this idea, difficult to
implement readily.
Speaker 2 (05:14):
Look, there are plenty of pitfalls of the American healthcare system,
and I have no love for health insurance companies that
make those decisions as to what they cover and what
they don't. But what are the advantages. Happens to be
that if the drug works, you can generally get it
in the United States and get it covered by health
insurance more readily, especially if it's a new drug. Then
some of the other single payer healthcare systems out there
(05:37):
who will negotiate with the pharmaceuticals and say no, we're
not going to cover that drug at all, and it
might not even be available in the United Kingdom for example.
That obviously creates a huge burden on the US system
because the prices end up being a lot higher without
a single payer negotiator that's taking a look at, Okay,
(05:58):
we're going to buy this drug. We're not going to
pay for this drug. We are going to you know,
allow this procedure and not that one. And it also
makes it incredibly complex for any you know, I don't
practically really understand how a pharmaceutical company will go about this, right, So,
do I have to go offer every US insurer the
(06:19):
lowest price that I'm offering to any other nation? Do
I have to take an average of all those other
prices and make sure that I'm there. Does does every
US insurance company, even if they only have a few
thousand participants, need to be offered the lowest price that
I'm facing elsewhere? It is pretty complicated. One thing is true.
I mean we are a huge market, and so you know,
(06:41):
if for instance, a drug is getting priced cheaper in
France with a much smaller population, I would think that
we do have some negotiating power on that. But it's
also one of these items that you know, given our
free market system, I don't know how the president executes
this via executive action.
Speaker 4 (06:58):
Probably your best bet is going through Medicare, just the
leverage that it has because it just represents such a
huge swath of the population that rely on many drugs
just given their age range. That would probably be your
best starting point is to levers the negotiating power that
you have from Medicare to get better prices than some
drugs out there. That probably seems like the best bet.
(07:21):
But anything with the healthcare system is just complex and
very artuous to figure out. So we're just a couple
armchair quarterbacks here who have here a thing, no expertise.
Speaker 2 (07:33):
Here are things I know. It's amazingly complicated. Yes, it
is not a new issue. It has been getting campaigned
on for twenty thirty years. And the last thing I
know is that the drug lobby, the pharmaceutical lobby, is
one of the most powerful ones that we have here.
Big oil, maybe the tech lobby is pretty big, but
(07:54):
not in the same way as pharma would be. And
so they've managed to negotiate their way into a number
of different deals to make sure that their carve outs
are there, their exemptions are there, including you know the
fact that until recently Medicare could not negotiate drug prices
with pharma companies. So long road ahead I think would
(08:14):
be the answer to all of this almost undoubtedly. You know,
this doesn't take This doesn't cause any action to be taken.
But if companies start taking action as a result of this,
probably lands in the courts pretty rapidly. And I'm not
sure just how far it will go, but suffice to say,
the health the pharmaceutical companies that are impacted their stocks
(08:35):
are not taking any big hits as of right now,
and so it does not seem to be getting digested
as a terrible, terrible news for any of them. Let's
take a quick break. When we come back, we're going
to have some trivia here. That's next on the Financial Exchange.
Speaker 1 (08:50):
Tara Fever is in high gear. We've got the latest
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(09:13):
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Speaker 6 (09:20):
This segment of the Financial Exchange is brought to you
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(09:47):
reservations and more information. Time now for trivia on the
Financial Exchange. Today is Stephen Colbert's sixty first birthday. Colbert
has been hosts of The Late Show on CBS since
David Letterman retired in twenty fourteen. Before getting the Late
Show gig, Colbert hosted a late night show on Comedy
Central for nine years. Today's question, what was the name
(10:09):
of Stephen Colbert's late night show on Comedy Central? What
was the name of Stephen Colbert's late night show on
Comedy Central. Be the third person who text us at
six one seven three six two one three eight five
with the correct answer, and you'll win a Financial Exchange
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See the complete contest rules at Financial Exchange Show dot com.
Speaker 3 (10:32):
Either of you have any friends or family in Chicago,
Ben and.
Speaker 5 (10:36):
Paul, No No, I don't.
Speaker 2 (10:38):
Okay, So what's going on in Chicago right now? Is
anyone with any roots to Chicago is drawing their line
of connection to the new Pope. Oh yes, it's quite humorous.
My wife did the exact same thing. She felt guilty
to it almost immediately. She grew up in a town
called South Holland, Illinois. That it's unclear whether he grew
up there or the town over, but you like brought
(10:59):
it up at dinner the other The most recent news
is that one Chicago pizza chain is claiming to be
the favorite of the Pope because he did visit there,
and they are developing their own menu for, you know,
to honor the Pope, including a Poperoni pizza which.
Speaker 3 (11:17):
Is just top.
Speaker 2 (11:18):
But the alleged favorite in the pizza battles of Chicago,
which are pretty serious, is Aurelio's not my personal favorite.
We I bring this up because I spent a lot
of time in Chicago. My personal is lu Mel Naughties.
Speaker 4 (11:32):
That's like the most famous deep dish in Chicago, right.
Speaker 2 (11:36):
Think so, But it's tough to make that claim, I think.
But Aurelios has I think some twenty odd locations and yeah,
developing the full pope menu, including I did like poparoni.
Speaker 4 (11:46):
It's so funny that you mentioned that, because my mother
in law called us, my wife and the other night
and said that so and so's brother went to Villanova,
and you know, like not even Catholic, the same thing,
and so my wife and I wife Lutheran.
Speaker 5 (12:01):
My wife and I just fot it. Oh cool.
Speaker 4 (12:03):
She's like, that's all you guys got for really, Yeah,
that's that's all we got.
Speaker 5 (12:08):
We got.
Speaker 2 (12:08):
So yeah, if you know anyone from Chicago, I am
sure you have already heard about their personal connection to
the new pope and the excitement of all that. But
moving on, piece from the New York Times. According to
a tourism group, the World Travel and Tourism Council, which
we've never quoted before on this program, so I'm not
(12:28):
sure to what degree I should trust them, but nonetheless,
they are claiming in a New York Times piece that
foreign touristing away could cost the US travel industry some
twelve and a half billion, with a b dollars this
year in foreign spending. It's expected that we're on track
to lose that twelve and a half billion dollars, falling
(12:49):
to less than one hundred and sixty nine billion dollars
from one hundred and eighty one in twenty twenty four,
which would be a fairly serious decline. And I don't
know how much evidence there is of it yet, but
most of the evidence that I've heard is primarily from
a few clients that I have in Maine. For example,
one of them mentioned that their kids manage a few
(13:11):
airbnbs and they've seen a pretty big drop off in
demand so far. I'm sure you're seeing it up and
down that main coast line parts of New Hampshire. We
weren't yet seeing it in the winter season, right, so
you know you weren't seeing it, for instance, for the
skiing season at Jpeak, I don't imagine, but summer will
be the first time here. Where do you see any
(13:33):
sort of drop off in real demand for tourism to
the United States as a result of some of the
trade escalations that we've been seeing with Canada comes to
mind for me, but.
Speaker 3 (13:45):
You know, it's everywhere.
Speaker 2 (13:46):
I think you're if you're going to talk about who
would normally visit the United States, that's a little bit
annoyed by all of this. Canadians and Europeans come to mind,
right right, specifically EU Europeans, not necessarily the UK because
that trade deal got kind of pushed through, So I
don't think there's a drop off there. But you know,
those are two areas that have some pretty serious.
Speaker 4 (14:07):
Well trade and also some immigration policy concerns coupled with
that as well.
Speaker 2 (14:12):
Yeah, yeah, I suppose that's probably staying.
Speaker 4 (14:16):
Just issues with bordered attentions and confusion over visas are
deterring international visitors a little bit. That could perhaps contribute
to it. It's two point three six trillion of tourism
we saw last year in the United States for twenty
twenty four. Ninety percent of that was domestic. The claim
is that international travelers, according to the US to Travel Association,
(14:38):
spend four thousand dollars a trip. That's eight times more
than domestic US travel, so a little bit more lucrative.
Speaker 5 (14:44):
There are those international travelers.
Speaker 2 (14:46):
Might my doubts on all of this. Here's my counterpoint.
When I talked to myoperic, we have somebody that cares
for our children. She's from Brazil, she's on a special
visa to to work in the United States and care
for my children right now. Number one thing I asked
her what she wanted to do while she was in
the United States go to Disney. Disney tell me right
(15:09):
now that their bookings for their resorts and for their
parks are just fine. Their most recent earnings reports said
that they are looking good in terms of bookings. There's
no real drop off, And I just look at that
as a pretty decent barometer of where spending is going
to come in in terms of total tourist travel in
(15:31):
the United States, because you go to those resorts and
there are definitely a lot of foreign travelers that are
booking that trip in order to attend a Disney theme park.
And I know we've been hearing here and there about
the drop off. I'm just not I'm not convinced that
we are seeing it right now in terms of what
everybody's claiming.
Speaker 4 (15:48):
No, I've heard more the other side of the argument, like,
for example, the o pair you're speaking of, concern about
if she were to visit Brazil and come back here.
I've heard people very hesitant to do that, but not
the other way.
Speaker 3 (16:01):
Around, agreed.
Speaker 2 (16:02):
Speaking of travel, United facing some issues specifically with the
Newark Airport. United Airlines, if you're not aware, operates about
two thirds of the flights through Newark Airport, and they
have been struggling a little bit, let's just call it
Newark Airport with their outages on their radar systems, which
(16:25):
have been there's been two of them over the last
few weeks.
Speaker 3 (16:28):
Is that right, I believe so, yes, there's just these.
Speaker 2 (16:32):
Kind of I mean, look, the United CEO is going
out there and trying to calm the public and say, look,
it's safe. All the planes are equipped with technology to
be able to see the other air.
Speaker 3 (16:42):
Traffic that's out there.
Speaker 2 (16:45):
But again, like the stories that I'm hearing reported right
the Guardians reporting that Newark air Traffic Control had three
air traffic controllers on duty instead of fourteen during the
most recent times. All these questions about safety and flying
through Newark Airport. Now part of me would say, hey,
(17:06):
you know, flyers are going to try and not fly
through that airport. And frankly, there's three of them in
New York that you can choose from, and so you've
got a few options there. On the other hand, a
couple of years ago we had doors flying off airplanes
and it did not scare anyone away from flying, and
so I think they need to do some pr I
(17:27):
think it's embarrassing how crippled and embarrassed and just outdated
our technology is that gets used in these airports. I mean,
I'm just scratching the surface and starting to learn about it.
But you know, the Internet service has to be downgraded
when it goes into the airports in order for these
old machines to actually be able to handle the.
Speaker 3 (17:48):
Stuff that comes in. It's really kind.
Speaker 2 (17:50):
Of embarrassing how far behind we are on this stuff.
But I also just don't think it's going to scare
anyone away from flying.
Speaker 5 (17:57):
No, I don't. I don't think so. There's too many
flights and demand on a daily basis to erode that.
Speaker 2 (18:02):
So, you know, maybe just coincidental here. But in order
to satisfy their customers who are worried about that Newark Airport,
New United is adding caviar service and luxury jammies to
their super premium travelers.
Speaker 4 (18:18):
I know you were mentioned to me off air that
Armstrong was going to get in on this type of
travel come twenty twenty six.
Speaker 2 (18:25):
No, you misunderstood. We are booking some stuff on Spirit.
We must have must have crossed the lines there. Yeah,
I don't think that they do offer caviar on Spirit.
I didn't fully look at the menu last time I
flew on them, but caviar just didn't seem like it
was on the list.
Speaker 3 (18:45):
But yeah, I mean, look, if you're.
Speaker 2 (18:46):
Gonna spend ten to fifteen grand on a sea dann well,
better serve me some caviar in that first class cabin.
Speaker 4 (18:53):
Who's gonna want the lux jammies? You know, who is
gonna gonna go for those? Unless I guess maybe if
they're new. I'm sure obviously they so contract with some
other company out there to offer them.
Speaker 3 (19:05):
But yeah, but.
Speaker 2 (19:07):
Sitting in that first class reclining seed in my United jammies,
eating caviar while you stare at all the riff raft
going back to the coach, I mean, that's what it's
all about, right, It's.
Speaker 1 (19:20):
A thing.
Speaker 3 (19:20):
I hope it says first class like as a big badge.
Speaker 2 (19:23):
Right on the jammies so that they can rub it
in your face a little bit more while you know,
sipping that champagne and eating the caviar.
Speaker 3 (19:30):
We'll have the trivia winner when we come back.
Speaker 7 (19:32):
Folks, stay tuned, bringing the latest financial news straight to
your radio every day. It's the Financial Exchange on the
Financial Exchange Radio Network. The Financial Exchange streams live on YouTube.
(19:55):
Like our page and stay up to date on breaking
business news all morning long. Ba He's the Financial Exchange
Radio Network.
Speaker 6 (20:10):
Our trivia question today was what was the name of
Stephen Colbert's late night show on Comedy Central. Your answer
the Colbert Rapport. Today's winner is sal in Buxton, Maine.
He has won a Financial Exchange Show t shirt. We
play trivia every day here on the Financial Exchange. See
complete contest rules at Financial Exchange Show dot com.
Speaker 2 (20:30):
We continue to get hints as to what is coming
out of the President's trip to the Middle East, and
he's about to take the stage on an announcement of
boosting US investments in a number of different areas. I've
seen numbers thrown around six hundred billion. The one that's
on the screen now is a trillion dollars and the
President just began speaking. But one beneficiary of this seems
(20:52):
to be in Video, whose stock is moving up about
five and a half percent today, dragging markets up alongside
of it. The the NASDAC now up one point six percent,
the S and P five hundred up nearly nine tenths
of a percent, and the Dow Jones Industrial Average, America's
most useless index, currently down one third of one percent.
Speaker 3 (21:14):
It's just an easy target, yeah, they are.
Speaker 2 (21:16):
The fact of the matter is, though, that the S
and P five hundred is now in positive territory after
yesterday's and today's gains. For the year, yesterday we finished
right around where we were on Inauguration Day or sorry,
on election Day of last year. And I guess it
brings me about a few different healthy reminders when it
(21:38):
comes to the stock market. One this period especially has
been defined by attempting to make investment decisions based on
a single person's tweets.
Speaker 3 (21:51):
The lesson that I have.
Speaker 2 (21:52):
Is what a dangerous game that is to play as
as an investor, maybe not as the president, like you know,
I know how he likes to negotiate, and not saying
he should or shouldn't do it that way, I am
saying that if you are an investor who's trying to
interpret what does this all mean for the economy and
me it was a pretty challenging couple of months here
to navigate the interpretation. Remember, like go back to where
(22:15):
we were in February. Markets were reaching all time highs.
We have not yet climbed back to those February all
time highs, by the way, but markets were hitting all
time highs at the same time. The President was talking
very hawkish on trade. It was threatening the teriffs that
he later followed through with, and once he followed through
with them, made it pretty clear that he was serious
about them and that they were there for the long term.
(22:37):
Turned out, long term lasted one week. The most severe
tariffs that were out there lasted seven days before they
had to be suspended. The higher Chinese tariffs I think
we lasted maybe four to six weeks on all of it.
The lessons out there for investors, I think are a fewfold.
One trying to manage a portfolio and adapt to that
(22:59):
changing narrative on a day to day basis. Look, if
you timed it perfectly, then you've made some money this year.
Right If if you managed to get out and then
get back in after markets were down by nineteen percent,
then good for you. You're one in a million on
all of this. The bigger lesson is, Look, nobody had
any idea that the President was about to cut tariffs
(23:19):
on China by thirty, you know, by one hundred and
fifteen percent. And if they had known, then markets would
you know, they would have known that, Hey, markets are
going to rally a good three percent on all of
this news. But for those that have been concerned about
their portfolios this year, I don't think that any of
this indicates to me that those concerns should be wiped away.
(23:43):
But I think a lot of the emotional investing that
I've been hearing about really since the president was elected
has a lot of room for error, and that goes
both ways. I've talked to folks who got more aggressive
when the president was elected and lost money almost immediately
on their investments. I've talked folks who were so spooked
by the thought of tariffs and and the actions that
(24:04):
the President was taking on that front that dramatically pulled
back their exposure and ended up missing out, especially if
they did it recently. And so here's my takeaway. Any
emotional investing by its very nature is bad investing. It
doesn't mean you will never make money on it. It
just means that long term, it's not a great strategy
(24:26):
if you have been facing down the last few months
with confusion, as many people have, in terms of what
do I do next? What does this mean for my
personal scenario? How are all the changes that the tax
level going to affect me personally? And what do I
do next? We'd love to talk to you here at
the Armstrong Advisory Group. The number to talk to one
of our real life human beings eight hundred three nine
(24:49):
three four zero zero one. We have a really methodical
process when we sit down with somebody for the first time.
Where we sit down, we really go through a lot
of questions about your personal situation. It's not just how
are you invested? I know we talk about that a
lot on the show, but it's what's your family situation,
what is your plans for retirement? How can we help
(25:10):
with any of these things? Do you actually fit into
the mold of what it is that we do here
at Armstrong And there's usually a second or even third
meeting before that final decision is actually made on whether
to move forward, if you could benefit from that type
of consultation, that type of free consultation. Again, the number
for Armstrong Advisory Group is eight hundred three nine three
(25:33):
four zero zero one.
Speaker 1 (25:35):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (25:51):
Peace in the Wall Street Journal this morning, doctors Warren
accountants of private equity drain on quality quote you could
be next. So here's what's been happening in the medical
space for anyone that does not work in that area
or doesn't know somebody who does. Is private equity has
been gobbling up all sorts of hospitals, emergency rooms and
(26:13):
doing what private equity does, which is make it lean,
make it efficient. And that has allegedly led.
Speaker 3 (26:20):
To some problems out there.
Speaker 2 (26:22):
And I'll give the example of someone I know personally
who works in emergency room medicine. And the point that
they made was, frankly, they made the point to me
that they're trying.
Speaker 3 (26:34):
To leave the industry.
Speaker 2 (26:36):
They said, with the pressure that I have on me
to churn through patients, to not appropriately dedicate my time
to them and then pretty much be disallowed from following
up with them on recommendations and follow up diagnoses that
I genuinely am not sure I'm able to fulfill my
(26:56):
hippocratic oath. And so the individual I talked to it
was like, you know, I'm going to keep doing this
because I have nearly half a million dollars to student
loans that I'm in process of getting forgiven by, you know,
because they've worked in a public hospital system for a decade.
Speaker 3 (27:10):
And but beyond that, they said, you know, I.
Speaker 2 (27:13):
Don't know if I'm going to look in pharmaceutical or
some other area, but I don't know that I want
to continue to be a frontline physician. And had purely
everything to do with what's being described in this article
of the le private equity is playing with hospitals and
doctors pretty directly contradicts what I'm trying to do for
my patients. I don't see that as much of an
(27:35):
issue as the same degree of an issue for accountants.
I will just throw it out there that I don't
see how that's going to relate.
Speaker 4 (27:44):
One for one, I could see possibly the ethical challenges
that could come as a result of that, you have
pe firms that are private equity firms that may be
investing in accounting practices and as such making them leaner
or perhaps encouraging them to take on riskier than normal
clients in order to boost profitability. And that puts accounting
firms and precarious positions to audit firms that they wouldn't
(28:07):
necessarily have considered as that's a fair point.
Speaker 2 (28:09):
Yeah, I mean there's not much that I can think
of on the you know, individual or corporate tax return
side that is going to be a problem if a
private equity firm drives for more efficiency, but yeah, in
the search of new revenue, if they push to not
do a real audit on the financials and then it
turns out it's the next en run a few years
from now, you know, the person working on the audit
probably never works in the industry again. And the company
(28:31):
that did the audit, well, depending on how big they are,
probably is just fine and walks away from it scott free.
But that is some of the risk here. When you're
talking about what does private equity do. They combine firms
try and lay off a whole bunch of staff that
do the same things and focus on where can we
get new customers, how can we service them for a
cheaper price point.
Speaker 4 (28:51):
And turn around a business usually in a very shorter
time horizon than normally you'd operate a business as a
founder for example. You know, they're just trying to eke
out and return to make sure their general partners and
limited partners get their prerequisite capital back plus the return
that they've been promised.
Speaker 5 (29:07):
So it doesn't align with.
Speaker 4 (29:10):
The ideas, particularly the ideology behind healthcare, which is, you know,
providing good care to many patients out there, is running
contrary to the idea of running a streamline, profle business
that is focused on efficiency and perhaps cutting. It kind
of goes against one another in often cases.
Speaker 2 (29:29):
Yeah, there's a few areas that you just don't it's
not the primary goal.
Speaker 3 (29:33):
Medicine is one of them.
Speaker 5 (29:34):
Yep.
Speaker 3 (29:35):
Defense is another.
Speaker 5 (29:36):
Sure.
Speaker 3 (29:36):
But this private equity story, it's everywhere, right.
Speaker 2 (29:38):
It's at dentist offices, it's at veterinary offices, it's at
financial advisory firms office. I personally probably get five to
ten emails from private equity backed firms looking to merge
companies together every week. Wow, I'm not saying they should
or shouldn't exist. I think they should certainly exist, and
(30:00):
I really see no issue with what they're doing in
our industry. But what they are doing across many industries,
to be really clear, is buying up really small companies
that probably aren't the most efficient out there, combining them together,
laying people off, and packaging them together to sell them
for a larger price point. And that works really well
in some areas that haven't private previously had such exposure.
Speaker 4 (30:24):
A couple of the corporate acquisitions that had been done
through PE backed hospital systems led to a wake of bacricies,
including Steward Healthcare and Prospect Medical Holdings. So that's where
some of the concerns stems from.
Speaker 3 (30:36):
Yep, no doubt. Let's say a quick break when we
come back, stack Roulette.
Speaker 1 (30:42):
Taras fears continue to grip markets. Get the latest straight
from Wall Street right here on the Financial Exchange Radio Network.
The Financial Exchange Show podcast drops every day on Apple, Spotify,
and iHeartRadio. Hit that subscribe button, then leave us a
five star review. You're listening to the Financial Exchange Radio Network.
Speaker 2 (31:21):
Quick follow up on the tax bill we're making its
way through the Republican House. A quote from New York
Republican Representative Nick Lloda, quoted in Politico this morning, quote,
the legislation has currently written is dead on arrival. He
accused his party's chief tax writer of acting in bad faith. Quote,
(31:42):
the bill is dead effectively on the floor. This all
has to do with the state and local tax deduction.
So Lloda, alongside four other Blue state Republicans from New York, California,
and New Jersey, they've been pushing hard for a big
boost to the ten thousand dollars state in local tax
cap that is currently in place, and those five at
(32:03):
least calling for this bill to be dead on the
floor and to be done more. The proposal that was
mentioned was a raise threefold to thirty thousand dollars cap
with a four hundred thousand dollars income limit, and that
apparently not enough for those Republicans at least to get
the bill over the over the hump here. The reason
this all matters, of course, is because zero Democrats are
(32:26):
intending to vote for this bill, and so you can
have very few defectors to get this thing done. So
you know, don't count any of these tax changes in
until they are actually in and we'll have to continue
to digest this as time goes on, because you could
see massive changes to what's even being proposed right now.
Speaker 5 (32:43):
Definitely.
Speaker 3 (32:45):
What do you have for us, Paul, Well, I've got
a little.
Speaker 5 (32:47):
Bit of news on the streaming front.
Speaker 4 (32:48):
We've got two providers over the course of the last
several days announcing that they will be launching new streaming services.
Speaker 3 (32:55):
Thank goodness.
Speaker 4 (32:57):
Just in case your life wasn't confusing enough, Fox is
going to be launching a new streaming service, Fox One
before the NFL season. It's going to combine its news,
sports and entertainment content before the NFL and college football
seasons this fall.
Speaker 5 (33:15):
It's going to.
Speaker 4 (33:15):
Be put together at a quote unquote healthy but not
a discounted price, according to chief executive.
Speaker 3 (33:22):
Officer Hell does that mean?
Speaker 5 (33:24):
Great? Great question?
Speaker 2 (33:26):
The reason that could be anywhere from seven to forty
dollars a month.
Speaker 4 (33:31):
The reason that I bring this up along with another
story that came out with ESPN announcing that they're going
to launch their streaming service titled you guessed It, ESPN
coming for thirty dollars a month. This will combine together
Disney's other streaming services, Disney Plus and Hulu. If you
(33:52):
want the three of them together, it will cost thirty
six dollars a month. The standalone ESPN will come again
this fall for thirty bucks for the first twelve months,
and it will offer this differs greatly from where it
is today access to its live sports content. ESPN Plus
offerings are more niche offerings of UFC and.
Speaker 5 (34:15):
Other areas out there.
Speaker 4 (34:16):
And I just feel like my initial piece would be
an initial takeaway that the cable providers have to be.
They not like they didn't see this coming. They've had
to cline subscriptions for a long period of time. But
the affiliate fees that you generate from ESPN and some
of these other heavy hitters that have live sports really
carry the significant costs of what you and I are
(34:38):
for those people who pay their cable every month. And
this pushes someone like myself, who is pretty much just
locked into watching live sports and really not a lot
else on cable, further and further away from keeping up
with the cable subscription to the point where its erosion
seem like it's it's imminent in the next several years.
Speaker 3 (34:59):
I just don't know. I'm with you, but we are
now getting to the point where you have.
Speaker 5 (35:04):
To be bundled back many together.
Speaker 3 (35:06):
Like, so, what was the ESPN service going for.
Speaker 5 (35:08):
Twenty nine bucks a month? Thirty bucks a month.
Speaker 2 (35:10):
Which, by the way, the fact that you can get
an ESPN subscription for the same price as a Neessen subscription,
which is twenty nine to ninety nine a month, is preposterous.
That is crazy. I know we're big New England sports fans,
but clearly the ESPN one should cost more.
Speaker 5 (35:26):
There's well, you know that's a tea.
Speaker 4 (35:28):
You know, that's a teaser, right, it's the first twelve months,
but that doesn't mean that it won't be forty five
dollars two years from now when we talk.
Speaker 2 (35:35):
So I guess the question is, all right, how much
can I save if I have Disney Plus, Hulu Live
TV and this all together? And you know, should I
be considering all of that? It seems just absolutely crazy.
Speaker 4 (35:48):
It's a great question. We should run through it quickly. Okay,
So that's thirty six months, thirty six bucks a month
right there. If you go Hulu, Disney Plus and ESPN,
you have to have Netflix for most people out there,
that's what eighteen right.
Speaker 2 (36:02):
So it's only thirty six bucks. Well, that's that's not
Hulu Live TV. That's Hulu. They're streaming service which has
good content, but it's not the live TV option.
Speaker 4 (36:11):
It just says Hulu, Disney Plus and this. There's other
streaming services. So you got let's call it. Maybe I'm
off on that seventeen eighteen bucks. So right there, you're
at fifty three between those two. Throw in Amazon Prime
most people have with the membership max. HBO Max is
probably twenty bucks a month. You get to seventy three. Yeah,
or somewhere where's Apple. It's I don't I don't know
(36:33):
that fifteen bucks a month. Okay, I'm the only person
I know that doesn't have Netflix. Yes, I do have Apple.
I didn't have HBO, but I resubscribed because my other
package that I have does not have Knesset or does
not have TNT, and the hockey playoffs are on TNT,
so I can get that through an enhanced HBO subscription,
(36:54):
which I'm going to cancel after the Stanley Cup playoffs.
Speaker 5 (36:58):
It's it's like.
Speaker 4 (36:59):
A hangover if of zach alfanaks running all the multiple
calculations of the black Tach table.
Speaker 2 (37:04):
It's your head goes just gotten preposterous. I but to
your point, I don't have a cable package. Yeah, I've
got this Fubo thing, which I only subscribe to because
it has nesson, And I just figured, Hey, if I'm
going to pay thirty bucks a month for nesson three sixty,
I might as well pay like sixty bucks a month
(37:24):
for a full slate of channels that I can go
and stream.
Speaker 3 (37:28):
But now I'm adding in Hbo. Now I'm adding in.
Speaker 2 (37:31):
Apple TV and all these other services, and I'm probably
right back up at a basically, for your.
Speaker 5 (37:36):
Kids, is it all YouTube that they consume when they.
Speaker 2 (37:38):
Watch YouTube or Disney Plus? Yeah, those are the only
two services that we actually.
Speaker 5 (37:43):
Yeah, our kids are not going to know cable at all.
I mean, my kids, it's all YouTube.
Speaker 2 (37:48):
It's so bad out there on YouTube land. That is
all the time that we have today. On the financial exchange,
markets remain in mixed territory, but SMP and NASDAC moving
strongly higher. We've got the S and P five hundreds
still up eight ten percent, NAZDA C up nearly one
point six now, and the Dow Jones industrial average right
now off one hundred and fifty five points a little
(38:08):
bit more than a thirty percent. We will be right
back at it tomorrow, folks, so stay tuned and have
a great rest of your day.
Speaker 3 (38:14):
We'll see you then
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