July 30, 2024 • 34 mins
Mike Armstrong and Paul Lane discuss more than half of American renters who want to buy a home fear they'll never afford one. Over one million people now owe more than $200,000 in Federal student loans. Why is the new Starbucks CEO having such a difficult time? Carmakers neglect a key sector while chase EV glory. Boneless chicken wings can have bones afterall, says a ruling by the Ohio Supreme Court.
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Episode Transcript
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Speaker 1 (00:00):
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Exchange with Mike Armstrong and Paul Lane.
Speaker 2 (01:13):
Good morning, and welcome back to the Financial Exchange.
Speaker 3 (01:16):
The week of.
Speaker 2 (01:17):
Craziness continues here in financial markets. We've got mixed markets
in early trading so far today, with the Nasdaq down
nearly two hundred points, or more than one percent, smp
is down about thirty points, a little bit more than
half a percent, and the Dow is actually up at
the moment, as is the Russell two thousand, albeit on
the Dow only one tenth of a percentage point upwards.
(01:37):
So I mentioned the craziness this week. We did receive
at nine am today the SMPK Shiller Home Price Index.
We saw consumer confidence and job openings. At ten am.
Tomorrow we will get a look at the labor market
with the ADP Employment Report, but quite honestly, nobody really
pays attention to that. The big news tomorrow has to
do at the Federal Reserve and their afternoon meeting at
(01:58):
two pm. You have jobless claims on Thursday, ism manufacturing
on Thursday, the unemployment report coming out Friday morning, so
a slew of economic data, and then on top of
that you have ten trillion dollars worth of market capitalization
reporting their most recent quarterly earnings. With just four companies,
(02:20):
you have Facebook, parent Meta, you have Microsoft, Apple, and
Amazon all reporting earnings and likely to get a lot
of questions about their artificial intelligence spend and what.
Speaker 3 (02:29):
The payoff looks like. So far.
Speaker 2 (02:31):
So busy week continues here and we'll be covering all
of it, Paul. Anything else catching your eye, anything that
we haven't covered yet, or.
Speaker 4 (02:40):
It will be the Rays report will be the biggest focus, really,
those from those big companies. That is significant this week.
Speaker 2 (02:47):
You did see an uptick in consumer confidence according to
the Conference Board, that rose in July to one hundred
point three from a downwardly revised ninety seven point eight
in June, so confidence got a little bit higher. Home
prices hit a new high in June according to the
report on the State of the Case Shiller Home Price Index,
(03:07):
so that home price Index twenty city house price index
roe zero point three percent in the month of May
compared to the previous month, so they are now up
six point eight percent. Home prices are specifically in that
twenty major US metro markets up six point eight percent
in the last twelve months ending in May. So in
spite of the fact that we are seeing a dramatic
(03:28):
uptiket inventory not yet leading to increased dramatically increased sales,
and certainly not leading to any drop in pricing so
far this year, at least again on that twenty price
on that twenty city.
Speaker 3 (03:40):
Index so far.
Speaker 2 (03:43):
Speaking of homeownership, there is a piece today on the
state of renters in this market and really just the
pessimism that renters are feeling at the moment. I think
partially because or maybe mostly because of the state of
the housing market at this age. The inventory of homes
today is still only about seventy percent of where we
(04:05):
were in twenty nineteen, in spite of the fact that look,
more people are of home buying age, more people are
looking to own a home compared to twenty nineteen. We've
had population growth since twenty nineteen, and there are dramatically
fewer homes for sale, interest rates are considerably higher, and
you now have fifty four percent of people that are
renting right now saying that they will never.
Speaker 3 (04:25):
Be able to buy a home in this environment.
Speaker 2 (04:28):
I mean, Paul, what takeaways do you have or what
advice would you have for somebody that is sitting there
trying to deal with this problem of I can't buy
a home, and I don't know that I'll ever be
able to.
Speaker 4 (04:38):
If I was as harsh as Mark Vandetio would say,
good luck. But I'm not going to be that harsh, though.
I don't know if I have a fantastic suggestion, just
because the thing that's not mentioned this piece, MIC is
the creation of new supply, and none of us really
have a solution as to how to best accomplish that
(05:00):
nationally to allow for there to be more inventory out there.
You know, you mentioned the uptick in inventory. I think
it's really important to make the point that you did that. Yes,
inventory is ticked up from what were meager levels last year,
but there it's nowhere near where it was previously pre pandemic,
and I just don't have an easy solution to that.
(05:21):
You can make the argument, well, Paul, if interest rates
come down, now, these renters that are mentioned in this
piece are going to have a better time of being
able to go out there and buy a new property.
I don't know about that. If there's limited inventory and
you lower down the mortgage rates, that means more buyers
on the market, and then we're subject to that same
issue where there's a bidding frenzy on many homes. Sometimes
(05:44):
perhaps I'm in the New England bubble where it just
seems really pessimistic. Yeah, and so perhaps that influences some
of my commentary that if you and I were doing
the show and we're Phoenix residents, I'd be singing a
different tune. But it's just a really difficult spot from
an affordability standpoint, the combination of low inventory plus the
rates where they sit at today. And I don't know
(06:06):
if just lowering rates really solves this problem.
Speaker 3 (06:08):
No, I don't think it does.
Speaker 2 (06:10):
And look, I'm sitting here from a position of owning
a home and having the stability of that ownership at
a low interest rate. So look, I have a privilege
here that a lot of people that are in the
rental market just do not have and might not have
in their future. And you know, putting myself in those
shoes for a minute here, can you imagine I'm trying
to imagine here for a minute, renting a home with
(06:31):
my three kids going to school in that school system
and not having that stability of knowing that we'll even
be able to continue to rent that home in the
future and actually keep my kids in the same school
system like that would be in and of itself, just
a dramatic difficult situation to be in that. I know
millions of Americans are on a day to day basis,
(06:52):
So I don't mean to I don't mean to criticize that,
and I do acknowledge how difficult that state of play is.
On the positive side, if I'm looking for a silver
lining here, in terms of the apartment market, right now,
the national median rent sits at fourteen hundred dollars, which
is a dramatic uptick from pre pandemic levels when it
(07:14):
was sitting. You know, if you take a look at
this time in twenty nineteen, I think it was around
eleven or twelve hundred dollars. So we've gone through a
massive uptick in rental prices, just like we've gone in
a massive uptick in everything that people pay for. But
the recent data I think is encouraging for renters. The
vacancy rate, according to Apartment List of Apartments nationwide, is
(07:35):
sitting at six point seven percent. That is a very
high level historically speaking. Likewise, median rent at fourteen one
hundred dollars is astronomical, but it's actually down nearly a
full percentage point year over year. Rents don't generally go
down on a year over year basis. Maybe month to
month you've got some seasonality stuff that happens.
Speaker 3 (07:56):
But to me, what we're.
Speaker 2 (07:58):
Seeing here is a home market where people don't want
to buy, and for some reason, an apartment market that's
not seeing as much demand, or at least demand that's
not quite matching up with supply, perhaps because.
Speaker 3 (08:10):
We've built a lot over the last few years.
Speaker 2 (08:12):
And so if I am in that position of looking
at this buyer's market and saying I don't want to
do that, quite honestly, yes, I know rent is exorbitantly
high in much of the country and I would like
to see it come down further. But you're seeing a
pretty stable rental market in here, where I think you
might be able to lock in at least a reasonable
(08:33):
deal in comparison to coming up with a twenty percent
down payment on a home that's going to cost you,
you know, thirty percent more than it did pre COVID
and interest rates that are going to be in the
high six percent range. Like were this me, I would
be renting and being you know, really really picky about
the apartment that I get to try and save money
and then you know, socking it away for that day
(08:55):
when hopefully rates do come down and maybe inventory is a.
Speaker 3 (08:58):
Little bit higher.
Speaker 2 (08:59):
Because yeah, I agree, this buyer's market, especially here in
the Northeast, is just ugly.
Speaker 3 (09:05):
Yeah, just really.
Speaker 4 (09:06):
Ugly, even to your point, Mike, like you got to
move to Texas or Florida to get these deals, Like
you're sitting there like I would rent, and I'm just
sitting here saying, yeah, you might go ren in Austin,
or ren in Orlando, Florida or Phoenix. You know, it's just, uh,
the Northeast is just tough.
Speaker 3 (09:23):
It's really it is.
Speaker 2 (09:24):
And I don't know, I don't know that there's an
easy fix to this. We've talked about the only really
fixes out there is building more, and you know, we've
seen that fix some of the problems in some parts
of the country. Go look at the housing market in
Florida and Texas and Arizona, where they have allowed a
lot more building and they have loosened zoning rules, and
finally you do have homes for sale in those markets
(09:48):
that are maybe not reasonably priced, but at least they
exist here in the Northeast. I've talked about this before.
Connecticut is the perfect example of this. Is twenty percent
of the twenty nine teen inventory of homes for sale
available for sale in Connecticut right now. It's I don't
know what might be worse. I haven't seen any states
that are worse than that in terms of their occupy,
(10:09):
in terms of their available inventory levels, but that is
just impossible to potentially buy a home. And so we
do tend to focus a little bit here on the
Northeast market of things when the reality is that in
other parts of the country it's looking significantly better. If
only you could hold onto that Massachusetts salary and buy
a home in Florida or Arizona, then that'd be a
(10:32):
hell of a trick. But for most of us that's
not doable. Oh, a record amount of student loan balances.
I want to talk about that and then get an
update on the cost of attending some local universities in
the New England area.
Speaker 3 (10:43):
We'll cover that next.
Speaker 1 (10:45):
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(11:08):
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Speaker 3 (11:12):
Paul Terrible News.
Speaker 2 (11:13):
The number of federal student loan borrowers with six figure
debts is on the rise. In the second quarter of
twenty twenty four, two point four million borrowers carried a
federal student loan balance between one hundred and two hundred
thousand dollars. That's up from one point eight million people
who owed that much in twenty seventeen, and now, for
the first time ever but at one million people had
(11:36):
a federal student loan balance of more than two hundred
thousand dollars. Man, talk about scary. I can't envision anything
scarier than staring down a federal student loan balance of
six figures, let alone two hundred thousand dollars.
Speaker 3 (11:49):
But I'll tell you I understand how you get there.
Speaker 2 (11:53):
I'm taking a look here at college tuitions just kind
of around New England. So starting at the you know tradition, No,
most expensive ones out there. Yale these days going for
eighty five thousand dollars sixty two thousand in tuition plus
twenty three thousand other costs. Granted you know you do
usually have so oh wait, sorry, that's the twenty twenty
(12:13):
one year hold on need I need Yale Universities twenty
twenty four to twenty twenty five total cost of tenants.
Speaker 3 (12:19):
There we go ninety one thousand dollars for the twenty
twenty four twenty twenty five year for Yale.
Speaker 2 (12:26):
Let's take a look now at Tuffs, who has been
called out previously, my brother's alma mater. Actually in terms
of the total cost of attendance here come on direct
an indirect cost twenty twenty three twenty twenty four.
Speaker 4 (12:47):
I'll fill in that BU and BC are up around
ninety just knowing that offhands while Mike tuition it.
Speaker 2 (12:55):
Hey, I just hate when they do this, like every
other school, list it out and sums it for you,
and now I have to do the math on my own.
But Tuffs has sixty nine thousand dollars in tuition plus
what looks like about another twenty to twenty two in
additional costs. So you're right up there at ninety as well.
When I go and take a look at some of
the state schools across New England here and you know,
(13:17):
for instance, a couple of years ago, in state tuition
even at UMSS Amherst was going for thirty three grand.
If you wanted to attend from out of state, it
was fifty five thousand dollars. Now with the most recent
numbers here for in state, you're looking at thirty five
thousand dollars and for out of state you're going for
fifty seven thousand dollars. I mean fifty seven thousand dollars
(13:40):
to attend U mass Amherst, which, don't get wrong, a
fantastic school, but it's a state school in Massachusetts.
Speaker 3 (13:48):
Yeah.
Speaker 2 (13:48):
Sorry, out of state is actually now up to sixty
thousand dollars if you want to attend U mass Amhurst
from out of state. And quite honestly, I expected University
of Maine and you and h to be a little
bit cheaper on that front because they advertise as such,
Like I remember the ads back in the day were
you know, attend you Maine from out of state for
the same cost of going to UMass in state.
Speaker 3 (14:08):
It's not the case anymore.
Speaker 2 (14:09):
The total out of cost out of state cost for
a University of Maine is fifty three thousand dollars.
Speaker 3 (14:16):
For a one year education there at UMINE.
Speaker 2 (14:19):
So I mean, for me, the obvious answer here is that, Yeah,
if you live in Maine and I can attend you
Maine for thirty thousand dollars with no scholarship whatsoever, compared
to you know, any other place I can go to,
I'm surprised there's not more demand for this. I'm fortunately
(14:40):
a good ten years out from this decision, but it's
it's not shocking to me how families are going into
a couple hundred thousand dollars worth of debt to fund
this education.
Speaker 4 (14:50):
And what's not mentioned there is the acceptance rates, because
I feel as if, anecdotally it's gotten much more difficult
to get into schools like UMass Amherst Mike, because people
have realized just what a good bargain is. It does
look like their admissions rate was sitting around sixty four percent.
I got to track it over time, but certainly you
would imagine that it just gets more and more challenging
(15:13):
to get into these types of schools because people realize
what type of a bargain that it is, and this
goes flies right in the face of what we covered
in the first hour of the show. John Michaelson from
the Wall Street Journal mentioning that most people had paid
off their student loan debt. I guess that's not the case,
with a million people now owing more than two hundred
thousand in student loan debt out there.
Speaker 2 (15:35):
It's frustrated if you missed this segment.
Speaker 3 (15:38):
There's this piece in the Wall Street Journal today.
Speaker 2 (15:39):
Granted is not bad piece, but it was making the
argument that, hey, the Feds shouldn't cut rates because don't worry.
I mean, most people have paid down their student loans already,
and in fact, you have more people than ever carrying
two hundred thousand dollars balances. But besides all that, it
is not the responsibility of the Federal Reserve to deal
with people's student loans and make them more or less affordable.
That is not under the purview of the Fed. That
(16:02):
if Congress wants to go and enact mass student loan forgiveness,
then have had it.
Speaker 3 (16:06):
I think it's a.
Speaker 2 (16:07):
Stupid idea, but have had it. But that is not
the job of the Federal reserve and then yes. This
piece from John Michaelson claiming that most people have made
big payments on their student loans.
Speaker 3 (16:19):
Is just very provably false.
Speaker 2 (16:22):
I'm not sure why he made that claim without looking,
you know, just you know, you can open up a
web browser and Google's AI will give you the answer
to that in a flat six seconds. Speaking of which,
I'm assuming you two, Tucker and Paul, with your iPhones
are just waiting with baited breath for the next update
from iPhone for your artificial intelligence features on Apple's products.
Speaker 4 (16:43):
You fancy iPhone boys, you.
Speaker 2 (16:46):
I'm here with my Nokia from nineteen ninety six.
Speaker 3 (16:50):
I don't know what you're talking about.
Speaker 4 (16:51):
You know, it's cool flip phones. No, I don't think
I'll qualify for this because it seems as if on
the older phone. Yeah, the iPhone fifteen pro is going
to be getting these iOS eighteen spot one updates here,
so it's gonna be a little bit of time before
this trickles down to what I believe is my iPhone thirteen.
(17:13):
But I always laugh. I hope Siri gets better because
my dad uses it as his assistant and she's been
slacking for a long time now.
Speaker 2 (17:22):
She just really one that receives text messages from the
you know, dictated versions. Is really really tough to comprehend that.
My father in law does the same and it's no
idea what he's talking about. Ninety percent of the time.
Speaker 4 (17:36):
Not great, Bob.
Speaker 5 (17:43):
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Speaker 2 (18:04):
Paul the new CEO, Newish CEO of Starbucks, took over
in March.
Speaker 3 (18:08):
Of twenty twenty three.
Speaker 2 (18:09):
Since that point in time, the stocks value has lost
about twenty five percent of its value.
Speaker 3 (18:15):
That Starbucks and can.
Speaker 2 (18:16):
You remind me what's what's the guy's name against the
CEO of Starbucks.
Speaker 4 (18:20):
Now, Laxman Narasim.
Speaker 3 (18:23):
You saw that one coming. Not bad. I think you're
missing a syllable there, but that was too bad.
Speaker 2 (18:29):
Yeah, yeah, yeah, that's good. Anyway, he's been working at
the head of Starbucks since March or twenty twenty three.
In the meantime, the former CEO of Starbucks, Howard Schultz,
keeps lobbing criticism Adam while he's doing it just you know,
tossing grenades from the sideline at this new hand picked
CEO that he personally trained, which I don't know between
(18:52):
Howard Schultz and the Disney ce Bob Iger just criticizing
their own handpicked replacements just find hilarious. I get how
being you know, you know, the personality that goes into
being a CEO, especially a CEO founder, makes it really
challenging to give up the reins. But to try and
do the job while this previous CEO is just criticizing
(19:15):
you constantly cannot be an easy thing. But the problems
that they have experienced over the last year and a half,
do you see them as unique to Starbucks or is
it just the same problems that have hit every food
services chain out there.
Speaker 4 (19:31):
To Mike, it seems to me that some of these
consumer discretionary companies have been really beating up over the
course of the last year. So a lot of it
does tie into China, and Starbucks is right in the
face of that where they're having real difficulty selling over there.
Tesla has been another example of a company that struggled
to sell as well in China. Nike has had all
(19:51):
sorts of issues there as well, so I feel like
it's part of a more broader trend where this sort
of discretionary companies like the Starbucks, the Nikes, Tesla, Lululemon
another example as well, have struggled in general. I just
wonder from a strategic perspective, the pivot or where Starbucks
(20:11):
goes from here. We've talked about on the show that
they've had adopted mobile online ordling. It seems like every
time my wife and I have tried to go there.
I'm not a huge Starbucks fan, she is. That it's
just an overwhelming amount of items on the menu or
different iterations from a drink perspective that Starbucks offers, and
to be able to churn them out with the speed
(20:32):
and efficiency of let's say, a dunkin Donuts, which isn't
as complex. It just seems like they're in a tough
spot where they're not your traditional coffee shop that they
were built as when they were branded by Schultz in
the eighties, and they're not the fast, quick of a
dunkin Donuts or pick another national chain out there. It's
a tough spot that they're in.
Speaker 2 (20:51):
It is Yeah, especially when everybody's been hurt by inflation
and is looking for a value.
Speaker 3 (20:56):
It's not exactly what Starbucks is known.
Speaker 2 (20:58):
No, they do have the distinct advantage of offering a
product that is physically addictive. So I won't ever count
them out. You know, that's an important one. But here's
you know, in my mind, you have the problem of, hey,
we've got kind of a reputation of being the more
expensive option there when it comes to satisfying your caffeine addiction.
The other piece would be that for a long time,
(21:20):
better part of a decade, I felt like Starbucks had
their real critical advantage when it came to applicate you know,
phone app based ordering, where they were really the main
game in town. Today, most of their competition is caught
up the dunkin Donuts app, the McDonald's app, the Chipotle app.
They're all offering you deals at any given point in
(21:40):
time if you allow them to do so. And so
that that early adapter I think advantage that Starbucks had
and getting their inventory systems and order management all online
and all on your phone was a really big advantage
for years. But now they have not innovated that into
something new that's going to be an advantage for them now,
(22:00):
and yeah, their stock has been struggling because of it.
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Speaker 2 (23:02):
Paul, I was going to take this moment to disclose
personal information about you, in true Berry fashion, but I'm
going to take a step back and instead do that
about my sister who's expecting her second and third children
later this year, and they are in the market for
a new car. I'm, of course pushing them down the
direction of the minivan. So I'll let you guys know
if I am successful on that front. But Paul, is
(23:26):
your family in need of a new vehicle anytime in
the near future, Tucker, you guys looking at new cars.
Speaker 4 (23:31):
It's interesting you broached the you brought that up, Mike. First,
I do have to ask, Tucker, did my sneeze get
caught on live air?
Speaker 6 (23:38):
I can hear it through my headphones.
Speaker 4 (23:40):
I held the mut Okay, it's technology's fault there. Anyway,
moving on, I did broach the subject with my wife
about a minivan, and she is adamantly against it, saying
that she will absolutely never be caught dead driving one
of those. And this is after a conversation that I
had with coworkers in the office last week, which I
(24:00):
had been of that position as well. But they were
starting to sell me on it, and.
Speaker 2 (24:05):
We might need to create a highlight reel of just
me and my minivan that might convince her. Actually, that
would definitely prevent her from ever buying a minivan.
Speaker 3 (24:13):
And is that sexy.
Speaker 4 (24:16):
From your company, Paul, not Mike.
Speaker 2 (24:21):
Here's the real crux of this story is that car
makers really across the board, but I think with it
a special concentration in US automakers seem to be struggling.
Speaker 3 (24:33):
Of late.
Speaker 2 (24:33):
They made this strong and expensive pivot towards electric vehicles,
investing heavily in manufacturing on that front and battery tech
and really just taking a barbell approach for a lot
of these US automakers of we're going to sell really
expensive trucks and big SUVs, which are high profit margin items,
(24:54):
and then we're going to try and make a push
into electric vehicles and kind of ignore the rest of
the market. And unfortunately for them, I think that that
rest of the market, maybe the small suv or sedan
might be having its heyday right now, as people are
kind of experiencing a backlash to all the inflation we've
seen and looking for a bit of a deal. When
you take a look at twenty twenty three the top
(25:16):
selling small SUVs. US automakers barely make it into the
list of the top five. First, you have the Toyota
Rav four, followed by the Honda CRV. The Nissan Rogue
takes the third place. Finally, you have a Chevy Equinox
in that space, followed by a Subaru Forester.
Speaker 3 (25:30):
And I just.
Speaker 2 (25:31):
Wonder about US automakers in particular and their ability to
really capitalize on this strategy that they've been employing.
Speaker 4 (25:39):
No, it's interesting Toyota is a company that didn't dive
headfirst into the EV market and tend to focus a
little bit more on the hybrid side of things, and
I just wonder that they were criticized for it, And
the further this plays out, it does seem like perhaps
that they had the right approach and being a little
bit more prudent in terms of their capital spending, because
(26:00):
it's really expensive to enter into the EV market, and
at the same time, if you're only focusing on sort
of EV or the higher end with these trucks, it
puts you in a difficult spot to meet that sort
of middle of the road pricing and attracting other vehicle
purchases out there, So it's a difficult spot. These car
companies have really been being up post the earnings reports
(26:23):
that we saw Ford Stalantis, all these ones might have
really taken on the chin.
Speaker 2 (26:28):
Yeah, I'll say I had never actually purchased a new
vehicle until twenty twenty two, when, for the first time ever,
I bought a new a new Honda because if you remember,
back then, the used car market was just insane and
as impossible to buy or get a good deal on
compared to the new market. So I ended up buying
it for a new, actually brand new car for the
(26:48):
first time ever. But I'll tell you, you know, just
looking at used cars, and you know, taking a look
at the cost of a used Tesla is kind of
a hobby, I guess. And man, prices are down really
across the board, especially in that used auto market. You know,
they're not twenty nineteen prices, but the numbers that we've
quoted out there of used car prices going down ten
(27:10):
percent year over year appears to definitely be the case
based on what I'm seeing on sites like Auto Traders.
So for those that are being forced into this car
market right now, not the worst time to be out
there looking, albeit with very high interest rates, so that
that part of it makes it difficult. But in terms
of pricing on used cars, there are some deals to
be had out there. For the time being, let's take
(27:32):
a quick break. When we come back, we'll have a
market recap and then a bit of stack roulette.
Speaker 1 (27:38):
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(27:59):
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Speaker 2 (28:13):
Equi markets have worsened a bit as we close in
on the noon hour here. The NASDAC now off two
hundred and ninety points, are about one point four percent,
the SMP down thirty nine points, seven tenths of a percent,
in the Dow up still by about one tenth of
a percent. Bond markets barely move in ten year treasury
yield sitting at four point one sixty six percent, and
(28:33):
the price with barrel of oil fortunately coming down another
one and a half percent West Texas creud now sitting
it just under seventy five dollars per barrel.
Speaker 3 (28:43):
Paul, what do you have for us for stack roulette?
Speaker 4 (28:46):
Boneless chicken wings can have bones? After all? The Ohios
come on, Ohios. Just a crazy case. Here a man
who ate boneless wings in twenty sixteen Pseudo Ohio restaurant
after ingesting a two inch born that tore his esophagus. However,
his case made all the way up to the State
Supreme Court, where the judges ruled in a four to
(29:08):
three decision last week that he should have expected at
least the possibility that the boneless chicken he was eating
may have bones. Just running frustrating.
Speaker 3 (29:21):
Break for our gament.
Speaker 6 (29:23):
I mean, this poor guy, he had to go through
two surgeries and he's still lost in court.
Speaker 2 (29:28):
Yeah, that's pretty rough. I also just do wonder like,
was this guy just how do you?
Speaker 4 (29:35):
Yeah, this is my thing is that if he had
taken one, if you had taken one by, he would
have run into this issue.
Speaker 3 (29:42):
They're not oysters. I'm just struggling to comprehend.
Speaker 2 (29:47):
I mean, look, in my opinion, if you advertise something
as a boneless chicken wing and then there's a bone
in it, then you know you got you've got some
spleining to do.
Speaker 3 (29:59):
I'm not sure sure that you know.
Speaker 2 (30:01):
I'm not exactly sure why the court didn't just say
this is ridiculous, We're not going to rule on this.
They they felt the need to come out and say
that if you're ordering boneless chicken wings, you should have
an expectation of bones.
Speaker 3 (30:13):
Being in there.
Speaker 2 (30:14):
Similar that that to me was a little bit confusing,
but nonetheless a little bit.
Speaker 3 (30:21):
Of humor to uh.
Speaker 2 (30:22):
To finish off the show today with the Ohio Supreme
Court determining that yes, in fact, boneless chicken wings can
have bones, So buyer beware.
Speaker 3 (30:31):
I suppose this guy's got the lesson.
Speaker 4 (30:35):
He's got to be he's got to be a big guy.
I'm trying to look it up here the art the
article noted that he was a regular, so.
Speaker 2 (30:49):
Any case, in any case. Uh, that's where this one landed.
Speaker 3 (30:55):
Here.
Speaker 2 (30:57):
Amazon making a push for faster delivery to some of
the more rural areas of the United States and really
some of the last areas that they don't already have
this available. But Tucker, Paul, you and I have talked
about all of us have talked about how just ridiculously
eat easy it is to get something delivered to our
homes the very next day. Obviously that's not as much
(31:18):
the case if you, for instance, live in northern Maine.
You know, if you're three or hours north of Portland,
my guess would be you're not getting the same fast delivery.
But Amazon really trying to tackle this last segment here
and not relying on the US Post Office for these
areas as much as they have, in spite of the
fact that the United States Post Office does require to
(31:38):
have a presence everywhere in the country. I do wonder,
you know, I was actually speaking why I found this
so relevant as I was speaking to a retiree just
the other day who they decided to retire to, not
a completely rural area, but you know, certainly a more
summer area of Pretty recently, they retired to the Rangely
(32:04):
area of Maine, which, if you're not familiar, as a
lakes region on the New Hampshire border in a pretty
northern part of Maine. And they spent a few years
there and realized that they really couldn't do it. And
you know, part of the reason was medical you know,
they had to travel a long time to get to
their medical appointments, and then their doctor had prescribed some
eye drops for her and she had to tell the
(32:26):
doctor like, yeah, that all sounds good, but I do
live an hour and a half from the closest pharmacy,
so that is becoming problematic. So in their case, they
ended up relocating. But with Amazon making this push. In
their case, I just don't think they were comfortable with
the idea of, you know, ordering the majority of their
stuff on Amazon. But with Amazon and other retailers making
(32:48):
these pushes into more rural areas, I do wonder if
it just kind of opens up the possibilities of where
people feel comfortable retiring. Granted, in this case, you're still
also quite a distance from any hospital, but if you're
able to get a majority of your pharmaceuticals even delivered
via Amazon, what does that do in terms of where
people concentrate in retirement would be an interesting question to me.
Speaker 4 (33:10):
Still, you need to have access to the health resources
you mentioned. I think that's that's significant, and obviously for
people in retirement, proximity to family can be important too,
So it's hard to really say I just wonder from
a profitability standpoint, I understand how low the volumes are
usps and ups handling Amazon's packages, but it seems like
(33:33):
the Amazon Cloud system really needs to power a lot
of these endeavors, because I can't imagine it's a profitable
to go into such rural territory.
Speaker 3 (33:41):
You know, it depends. I mean, I would think not.
Speaker 2 (33:44):
But if you are looking at hey, who are the
last Americans that aren't already paying that one hundred and
forty dollars a year for Amazon Prime, I'd imagine it
some of these people here, and if they're starting to
get more real. You know, the other big push that
has come in rural areas has been high speed internet.
And so if you're being met with okay, rulers are
now finally getting high speed broadband internet and we want
(34:06):
to sign them up for Amazon, you know, this might
be that last push.
Speaker 3 (34:10):
So long as they don't so long as they don't
air too much stuff, we might be all right. I
guess it's the answer.
Speaker 2 (34:15):
Let's take a quick break for the next twenty two hours.
We will be right back at it. Remember after the
close today we've got Microsoft earnings, and then tomorrow afternoon
Federal Reserve taking the stage with their interest rates, setting policy.
A lot to cover, we'll be back at it tomorrow.
Have a great afternoon, everybody,
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(01:03):
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Exchange with Mike Armstrong and Paul Lane.
Speaker 2 (01:13):
Good morning, and welcome back to the Financial Exchange.
Speaker 3 (01:16):
The week of.
Speaker 2 (01:17):
Craziness continues here in financial markets. We've got mixed markets
in early trading so far today, with the Nasdaq down
nearly two hundred points, or more than one percent, smp
is down about thirty points, a little bit more than
half a percent, and the Dow is actually up at
the moment, as is the Russell two thousand, albeit on
the Dow only one tenth of a percentage point upwards.
(01:37):
So I mentioned the craziness this week. We did receive
at nine am today the SMPK Shiller Home Price Index.
We saw consumer confidence and job openings. At ten am.
Tomorrow we will get a look at the labor market
with the ADP Employment Report, but quite honestly, nobody really
pays attention to that. The big news tomorrow has to
do at the Federal Reserve and their afternoon meeting at
(01:58):
two pm. You have jobless claims on Thursday, ism manufacturing
on Thursday, the unemployment report coming out Friday morning, so
a slew of economic data, and then on top of
that you have ten trillion dollars worth of market capitalization
reporting their most recent quarterly earnings. With just four companies,
(02:20):
you have Facebook, parent Meta, you have Microsoft, Apple, and
Amazon all reporting earnings and likely to get a lot
of questions about their artificial intelligence spend and what.
Speaker 3 (02:29):
The payoff looks like. So far.
Speaker 2 (02:31):
So busy week continues here and we'll be covering all
of it, Paul. Anything else catching your eye, anything that
we haven't covered yet, or.
Speaker 4 (02:40):
It will be the Rays report will be the biggest focus, really,
those from those big companies. That is significant this week.
Speaker 2 (02:47):
You did see an uptick in consumer confidence according to
the Conference Board, that rose in July to one hundred
point three from a downwardly revised ninety seven point eight
in June, so confidence got a little bit higher. Home
prices hit a new high in June according to the
report on the State of the Case Shiller Home Price Index,
(03:07):
so that home price Index twenty city house price index
roe zero point three percent in the month of May
compared to the previous month, so they are now up
six point eight percent. Home prices are specifically in that
twenty major US metro markets up six point eight percent
in the last twelve months ending in May. So in
spite of the fact that we are seeing a dramatic
(03:28):
uptiket inventory not yet leading to increased dramatically increased sales,
and certainly not leading to any drop in pricing so
far this year, at least again on that twenty price
on that twenty city.
Speaker 3 (03:40):
Index so far.
Speaker 2 (03:43):
Speaking of homeownership, there is a piece today on the
state of renters in this market and really just the
pessimism that renters are feeling at the moment. I think
partially because or maybe mostly because of the state of
the housing market at this age. The inventory of homes
today is still only about seventy percent of where we
(04:05):
were in twenty nineteen, in spite of the fact that look,
more people are of home buying age, more people are
looking to own a home compared to twenty nineteen. We've
had population growth since twenty nineteen, and there are dramatically
fewer homes for sale, interest rates are considerably higher, and
you now have fifty four percent of people that are
renting right now saying that they will never.
Speaker 3 (04:25):
Be able to buy a home in this environment.
Speaker 2 (04:28):
I mean, Paul, what takeaways do you have or what
advice would you have for somebody that is sitting there
trying to deal with this problem of I can't buy
a home, and I don't know that I'll ever be
able to.
Speaker 4 (04:38):
If I was as harsh as Mark Vandetio would say,
good luck. But I'm not going to be that harsh, though.
I don't know if I have a fantastic suggestion, just
because the thing that's not mentioned this piece, MIC is
the creation of new supply, and none of us really
have a solution as to how to best accomplish that
(05:00):
nationally to allow for there to be more inventory out there.
You know, you mentioned the uptick in inventory. I think
it's really important to make the point that you did that. Yes,
inventory is ticked up from what were meager levels last year,
but there it's nowhere near where it was previously pre pandemic,
and I just don't have an easy solution to that.
(05:21):
You can make the argument, well, Paul, if interest rates
come down, now, these renters that are mentioned in this
piece are going to have a better time of being
able to go out there and buy a new property.
I don't know about that. If there's limited inventory and
you lower down the mortgage rates, that means more buyers
on the market, and then we're subject to that same
issue where there's a bidding frenzy on many homes. Sometimes
(05:44):
perhaps I'm in the New England bubble where it just
seems really pessimistic. Yeah, and so perhaps that influences some
of my commentary that if you and I were doing
the show and we're Phoenix residents, I'd be singing a
different tune. But it's just a really difficult spot from
an affordability standpoint, the combination of low inventory plus the
rates where they sit at today. And I don't know
(06:06):
if just lowering rates really solves this problem.
Speaker 3 (06:08):
No, I don't think it does.
Speaker 2 (06:10):
And look, I'm sitting here from a position of owning
a home and having the stability of that ownership at
a low interest rate. So look, I have a privilege
here that a lot of people that are in the
rental market just do not have and might not have
in their future. And you know, putting myself in those
shoes for a minute here, can you imagine I'm trying
to imagine here for a minute, renting a home with
(06:31):
my three kids going to school in that school system
and not having that stability of knowing that we'll even
be able to continue to rent that home in the
future and actually keep my kids in the same school
system like that would be in and of itself, just
a dramatic difficult situation to be in that. I know
millions of Americans are on a day to day basis,
(06:52):
So I don't mean to I don't mean to criticize that,
and I do acknowledge how difficult that state of play is.
On the positive side, if I'm looking for a silver
lining here, in terms of the apartment market, right now,
the national median rent sits at fourteen hundred dollars, which
is a dramatic uptick from pre pandemic levels when it
(07:14):
was sitting. You know, if you take a look at
this time in twenty nineteen, I think it was around
eleven or twelve hundred dollars. So we've gone through a
massive uptick in rental prices, just like we've gone in
a massive uptick in everything that people pay for. But
the recent data I think is encouraging for renters. The
vacancy rate, according to Apartment List of Apartments nationwide, is
(07:35):
sitting at six point seven percent. That is a very
high level historically speaking. Likewise, median rent at fourteen one
hundred dollars is astronomical, but it's actually down nearly a
full percentage point year over year. Rents don't generally go
down on a year over year basis. Maybe month to
month you've got some seasonality stuff that happens.
Speaker 3 (07:56):
But to me, what we're.
Speaker 2 (07:58):
Seeing here is a home market where people don't want
to buy, and for some reason, an apartment market that's
not seeing as much demand, or at least demand that's
not quite matching up with supply, perhaps because.
Speaker 3 (08:10):
We've built a lot over the last few years.
Speaker 2 (08:12):
And so if I am in that position of looking
at this buyer's market and saying I don't want to
do that, quite honestly, yes, I know rent is exorbitantly
high in much of the country and I would like
to see it come down further. But you're seeing a
pretty stable rental market in here, where I think you
might be able to lock in at least a reasonable
(08:33):
deal in comparison to coming up with a twenty percent
down payment on a home that's going to cost you,
you know, thirty percent more than it did pre COVID
and interest rates that are going to be in the
high six percent range. Like were this me, I would
be renting and being you know, really really picky about
the apartment that I get to try and save money
and then you know, socking it away for that day
(08:55):
when hopefully rates do come down and maybe inventory is a.
Speaker 3 (08:58):
Little bit higher.
Speaker 2 (08:59):
Because yeah, I agree, this buyer's market, especially here in
the Northeast, is just ugly.
Speaker 3 (09:05):
Yeah, just really.
Speaker 4 (09:06):
Ugly, even to your point, Mike, like you got to
move to Texas or Florida to get these deals, Like
you're sitting there like I would rent, and I'm just
sitting here saying, yeah, you might go ren in Austin,
or ren in Orlando, Florida or Phoenix. You know, it's just, uh,
the Northeast is just tough.
Speaker 3 (09:23):
It's really it is.
Speaker 2 (09:24):
And I don't know, I don't know that there's an
easy fix to this. We've talked about the only really
fixes out there is building more, and you know, we've
seen that fix some of the problems in some parts
of the country. Go look at the housing market in
Florida and Texas and Arizona, where they have allowed a
lot more building and they have loosened zoning rules, and
finally you do have homes for sale in those markets
(09:48):
that are maybe not reasonably priced, but at least they
exist here in the Northeast. I've talked about this before.
Connecticut is the perfect example of this. Is twenty percent
of the twenty nine teen inventory of homes for sale
available for sale in Connecticut right now. It's I don't
know what might be worse. I haven't seen any states
that are worse than that in terms of their occupy,
(10:09):
in terms of their available inventory levels, but that is
just impossible to potentially buy a home. And so we
do tend to focus a little bit here on the
Northeast market of things when the reality is that in
other parts of the country it's looking significantly better. If
only you could hold onto that Massachusetts salary and buy
a home in Florida or Arizona, then that'd be a
(10:32):
hell of a trick. But for most of us that's
not doable. Oh, a record amount of student loan balances.
I want to talk about that and then get an
update on the cost of attending some local universities in
the New England area.
Speaker 3 (10:43):
We'll cover that next.
Speaker 1 (10:45):
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Keep It Here All Morning Long on the Financial Exchange
Radio Network. Miss any of the show catch up at
you're convenience by visiting Financial Exchange Show dot com and
clicking the on demand where you'll find all of our
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latest business and financial news in New England and around
(11:08):
the country. This is the Financial Exchange Radio Network.
Speaker 3 (11:12):
Paul Terrible News.
Speaker 2 (11:13):
The number of federal student loan borrowers with six figure
debts is on the rise. In the second quarter of
twenty twenty four, two point four million borrowers carried a
federal student loan balance between one hundred and two hundred
thousand dollars. That's up from one point eight million people
who owed that much in twenty seventeen, and now, for
the first time ever but at one million people had
(11:36):
a federal student loan balance of more than two hundred
thousand dollars. Man, talk about scary. I can't envision anything
scarier than staring down a federal student loan balance of
six figures, let alone two hundred thousand dollars.
Speaker 3 (11:49):
But I'll tell you I understand how you get there.
Speaker 2 (11:53):
I'm taking a look here at college tuitions just kind
of around New England. So starting at the you know tradition, No,
most expensive ones out there. Yale these days going for
eighty five thousand dollars sixty two thousand in tuition plus
twenty three thousand other costs. Granted you know you do
usually have so oh wait, sorry, that's the twenty twenty
(12:13):
one year hold on need I need Yale Universities twenty
twenty four to twenty twenty five total cost of tenants.
Speaker 3 (12:19):
There we go ninety one thousand dollars for the twenty
twenty four twenty twenty five year for Yale.
Speaker 2 (12:26):
Let's take a look now at Tuffs, who has been
called out previously, my brother's alma mater. Actually in terms
of the total cost of attendance here come on direct
an indirect cost twenty twenty three twenty twenty four.
Speaker 4 (12:47):
I'll fill in that BU and BC are up around
ninety just knowing that offhands while Mike tuition it.
Speaker 2 (12:55):
Hey, I just hate when they do this, like every
other school, list it out and sums it for you,
and now I have to do the math on my own.
But Tuffs has sixty nine thousand dollars in tuition plus
what looks like about another twenty to twenty two in
additional costs. So you're right up there at ninety as well.
When I go and take a look at some of
the state schools across New England here and you know,
(13:17):
for instance, a couple of years ago, in state tuition
even at UMSS Amherst was going for thirty three grand.
If you wanted to attend from out of state, it
was fifty five thousand dollars. Now with the most recent
numbers here for in state, you're looking at thirty five
thousand dollars and for out of state you're going for
fifty seven thousand dollars. I mean fifty seven thousand dollars
(13:40):
to attend U mass Amherst, which, don't get wrong, a
fantastic school, but it's a state school in Massachusetts.
Speaker 3 (13:48):
Yeah.
Speaker 2 (13:48):
Sorry, out of state is actually now up to sixty
thousand dollars if you want to attend U mass Amhurst
from out of state. And quite honestly, I expected University
of Maine and you and h to be a little
bit cheaper on that front because they advertise as such,
Like I remember the ads back in the day were
you know, attend you Maine from out of state for
the same cost of going to UMass in state.
Speaker 3 (14:08):
It's not the case anymore.
Speaker 2 (14:09):
The total out of cost out of state cost for
a University of Maine is fifty three thousand dollars.
Speaker 3 (14:16):
For a one year education there at UMINE.
Speaker 2 (14:19):
So I mean, for me, the obvious answer here is that, Yeah,
if you live in Maine and I can attend you
Maine for thirty thousand dollars with no scholarship whatsoever, compared
to you know, any other place I can go to,
I'm surprised there's not more demand for this. I'm fortunately
(14:40):
a good ten years out from this decision, but it's
it's not shocking to me how families are going into
a couple hundred thousand dollars worth of debt to fund
this education.
Speaker 4 (14:50):
And what's not mentioned there is the acceptance rates, because
I feel as if, anecdotally it's gotten much more difficult
to get into schools like UMass Amherst Mike, because people
have realized just what a good bargain is. It does
look like their admissions rate was sitting around sixty four percent.
I got to track it over time, but certainly you
would imagine that it just gets more and more challenging
(15:13):
to get into these types of schools because people realize
what type of a bargain that it is, and this
goes flies right in the face of what we covered
in the first hour of the show. John Michaelson from
the Wall Street Journal mentioning that most people had paid
off their student loan debt. I guess that's not the case,
with a million people now owing more than two hundred
thousand in student loan debt out there.
Speaker 2 (15:35):
It's frustrated if you missed this segment.
Speaker 3 (15:38):
There's this piece in the Wall Street Journal today.
Speaker 2 (15:39):
Granted is not bad piece, but it was making the
argument that, hey, the Feds shouldn't cut rates because don't worry.
I mean, most people have paid down their student loans already,
and in fact, you have more people than ever carrying
two hundred thousand dollars balances. But besides all that, it
is not the responsibility of the Federal Reserve to deal
with people's student loans and make them more or less affordable.
That is not under the purview of the Fed. That
(16:02):
if Congress wants to go and enact mass student loan forgiveness,
then have had it.
Speaker 3 (16:06):
I think it's a.
Speaker 2 (16:07):
Stupid idea, but have had it. But that is not
the job of the Federal reserve and then yes. This
piece from John Michaelson claiming that most people have made
big payments on their student loans.
Speaker 3 (16:19):
Is just very provably false.
Speaker 2 (16:22):
I'm not sure why he made that claim without looking,
you know, just you know, you can open up a
web browser and Google's AI will give you the answer
to that in a flat six seconds. Speaking of which,
I'm assuming you two, Tucker and Paul, with your iPhones
are just waiting with baited breath for the next update
from iPhone for your artificial intelligence features on Apple's products.
Speaker 4 (16:43):
You fancy iPhone boys, you.
Speaker 2 (16:46):
I'm here with my Nokia from nineteen ninety six.
Speaker 3 (16:50):
I don't know what you're talking about.
Speaker 4 (16:51):
You know, it's cool flip phones. No, I don't think
I'll qualify for this because it seems as if on
the older phone. Yeah, the iPhone fifteen pro is going
to be getting these iOS eighteen spot one updates here,
so it's gonna be a little bit of time before
this trickles down to what I believe is my iPhone thirteen.
(17:13):
But I always laugh. I hope Siri gets better because
my dad uses it as his assistant and she's been
slacking for a long time now.
Speaker 2 (17:22):
She just really one that receives text messages from the
you know, dictated versions. Is really really tough to comprehend that.
My father in law does the same and it's no
idea what he's talking about. Ninety percent of the time.
Speaker 4 (17:36):
Not great, Bob.
Speaker 5 (17:43):
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Speaker 2 (18:04):
Paul the new CEO, Newish CEO of Starbucks, took over
in March.
Speaker 3 (18:08):
Of twenty twenty three.
Speaker 2 (18:09):
Since that point in time, the stocks value has lost
about twenty five percent of its value.
Speaker 3 (18:15):
That Starbucks and can.
Speaker 2 (18:16):
You remind me what's what's the guy's name against the
CEO of Starbucks.
Speaker 4 (18:20):
Now, Laxman Narasim.
Speaker 3 (18:23):
You saw that one coming. Not bad. I think you're
missing a syllable there, but that was too bad.
Speaker 2 (18:29):
Yeah, yeah, yeah, that's good. Anyway, he's been working at
the head of Starbucks since March or twenty twenty three.
In the meantime, the former CEO of Starbucks, Howard Schultz,
keeps lobbing criticism Adam while he's doing it just you know,
tossing grenades from the sideline at this new hand picked
CEO that he personally trained, which I don't know between
(18:52):
Howard Schultz and the Disney ce Bob Iger just criticizing
their own handpicked replacements just find hilarious. I get how
being you know, you know, the personality that goes into
being a CEO, especially a CEO founder, makes it really
challenging to give up the reins. But to try and
do the job while this previous CEO is just criticizing
(19:15):
you constantly cannot be an easy thing. But the problems
that they have experienced over the last year and a half,
do you see them as unique to Starbucks or is
it just the same problems that have hit every food
services chain out there.
Speaker 4 (19:31):
To Mike, it seems to me that some of these
consumer discretionary companies have been really beating up over the
course of the last year. So a lot of it
does tie into China, and Starbucks is right in the
face of that where they're having real difficulty selling over there.
Tesla has been another example of a company that struggled
to sell as well in China. Nike has had all
(19:51):
sorts of issues there as well, so I feel like
it's part of a more broader trend where this sort
of discretionary companies like the Starbucks, the Nikes, Tesla, Lululemon
another example as well, have struggled in general. I just
wonder from a strategic perspective, the pivot or where Starbucks
(20:11):
goes from here. We've talked about on the show that
they've had adopted mobile online ordling. It seems like every
time my wife and I have tried to go there.
I'm not a huge Starbucks fan, she is. That it's
just an overwhelming amount of items on the menu or
different iterations from a drink perspective that Starbucks offers, and
to be able to churn them out with the speed
(20:32):
and efficiency of let's say, a dunkin Donuts, which isn't
as complex. It just seems like they're in a tough
spot where they're not your traditional coffee shop that they
were built as when they were branded by Schultz in
the eighties, and they're not the fast, quick of a
dunkin Donuts or pick another national chain out there. It's
a tough spot that they're in.
Speaker 2 (20:51):
It is Yeah, especially when everybody's been hurt by inflation
and is looking for a value.
Speaker 3 (20:56):
It's not exactly what Starbucks is known.
Speaker 2 (20:58):
No, they do have the distinct advantage of offering a
product that is physically addictive. So I won't ever count
them out. You know, that's an important one. But here's
you know, in my mind, you have the problem of, hey,
we've got kind of a reputation of being the more
expensive option there when it comes to satisfying your caffeine addiction.
The other piece would be that for a long time,
(21:20):
better part of a decade, I felt like Starbucks had
their real critical advantage when it came to applicate you know,
phone app based ordering, where they were really the main
game in town. Today, most of their competition is caught
up the dunkin Donuts app, the McDonald's app, the Chipotle app.
They're all offering you deals at any given point in
(21:40):
time if you allow them to do so. And so
that that early adapter I think advantage that Starbucks had
and getting their inventory systems and order management all online
and all on your phone was a really big advantage
for years. But now they have not innovated that into
something new that's going to be an advantage for them now,
(22:00):
and yeah, their stock has been struggling because of it.
Speaker 6 (22:04):
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Speaker 2 (23:02):
Paul, I was going to take this moment to disclose
personal information about you, in true Berry fashion, but I'm
going to take a step back and instead do that
about my sister who's expecting her second and third children
later this year, and they are in the market for
a new car. I'm, of course pushing them down the
direction of the minivan. So I'll let you guys know
if I am successful on that front. But Paul, is
(23:26):
your family in need of a new vehicle anytime in
the near future, Tucker, you guys looking at new cars.
Speaker 4 (23:31):
It's interesting you broached the you brought that up, Mike. First,
I do have to ask, Tucker, did my sneeze get
caught on live air?
Speaker 6 (23:38):
I can hear it through my headphones.
Speaker 4 (23:40):
I held the mut Okay, it's technology's fault there. Anyway,
moving on, I did broach the subject with my wife
about a minivan, and she is adamantly against it, saying
that she will absolutely never be caught dead driving one
of those. And this is after a conversation that I
had with coworkers in the office last week, which I
(24:00):
had been of that position as well. But they were
starting to sell me on it, and.
Speaker 2 (24:05):
We might need to create a highlight reel of just
me and my minivan that might convince her. Actually, that
would definitely prevent her from ever buying a minivan.
Speaker 3 (24:13):
And is that sexy.
Speaker 4 (24:16):
From your company, Paul, not Mike.
Speaker 2 (24:21):
Here's the real crux of this story is that car
makers really across the board, but I think with it
a special concentration in US automakers seem to be struggling.
Speaker 3 (24:33):
Of late.
Speaker 2 (24:33):
They made this strong and expensive pivot towards electric vehicles,
investing heavily in manufacturing on that front and battery tech
and really just taking a barbell approach for a lot
of these US automakers of we're going to sell really
expensive trucks and big SUVs, which are high profit margin items,
(24:54):
and then we're going to try and make a push
into electric vehicles and kind of ignore the rest of
the market. And unfortunately for them, I think that that
rest of the market, maybe the small suv or sedan
might be having its heyday right now, as people are
kind of experiencing a backlash to all the inflation we've
seen and looking for a bit of a deal. When
you take a look at twenty twenty three the top
(25:16):
selling small SUVs. US automakers barely make it into the
list of the top five. First, you have the Toyota
Rav four, followed by the Honda CRV. The Nissan Rogue
takes the third place. Finally, you have a Chevy Equinox
in that space, followed by a Subaru Forester.
Speaker 3 (25:30):
And I just.
Speaker 2 (25:31):
Wonder about US automakers in particular and their ability to
really capitalize on this strategy that they've been employing.
Speaker 4 (25:39):
No, it's interesting Toyota is a company that didn't dive
headfirst into the EV market and tend to focus a
little bit more on the hybrid side of things, and
I just wonder that they were criticized for it, And
the further this plays out, it does seem like perhaps
that they had the right approach and being a little
bit more prudent in terms of their capital spending, because
(26:00):
it's really expensive to enter into the EV market, and
at the same time, if you're only focusing on sort
of EV or the higher end with these trucks, it
puts you in a difficult spot to meet that sort
of middle of the road pricing and attracting other vehicle
purchases out there, So it's a difficult spot. These car
companies have really been being up post the earnings reports
(26:23):
that we saw Ford Stalantis, all these ones might have
really taken on the chin.
Speaker 2 (26:28):
Yeah, I'll say I had never actually purchased a new
vehicle until twenty twenty two, when, for the first time ever,
I bought a new a new Honda because if you remember,
back then, the used car market was just insane and
as impossible to buy or get a good deal on
compared to the new market. So I ended up buying
it for a new, actually brand new car for the
(26:48):
first time ever. But I'll tell you, you know, just
looking at used cars, and you know, taking a look
at the cost of a used Tesla is kind of
a hobby, I guess. And man, prices are down really
across the board, especially in that used auto market. You know,
they're not twenty nineteen prices, but the numbers that we've
quoted out there of used car prices going down ten
(27:10):
percent year over year appears to definitely be the case
based on what I'm seeing on sites like Auto Traders.
So for those that are being forced into this car
market right now, not the worst time to be out
there looking, albeit with very high interest rates, so that
that part of it makes it difficult. But in terms
of pricing on used cars, there are some deals to
be had out there. For the time being, let's take
(27:32):
a quick break. When we come back, we'll have a
market recap and then a bit of stack roulette.
Speaker 1 (27:38):
Miss any of the show. The Financial Exchange Show podcast
is available on Apple, Spotify, and iHeartRadio. Hit the subscribe
button and leave us a five star review. This is
the Financial Exchange Radio Network. Tekst us six one seven
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(27:59):
think about the story we are covering. This is the
Financial Exchange Radio Network.
Speaker 2 (28:13):
Equi markets have worsened a bit as we close in
on the noon hour here. The NASDAC now off two
hundred and ninety points, are about one point four percent,
the SMP down thirty nine points, seven tenths of a percent,
in the Dow up still by about one tenth of
a percent. Bond markets barely move in ten year treasury
yield sitting at four point one sixty six percent, and
(28:33):
the price with barrel of oil fortunately coming down another
one and a half percent West Texas creud now sitting
it just under seventy five dollars per barrel.
Speaker 3 (28:43):
Paul, what do you have for us for stack roulette?
Speaker 4 (28:46):
Boneless chicken wings can have bones? After all? The Ohios
come on, Ohios. Just a crazy case. Here a man
who ate boneless wings in twenty sixteen Pseudo Ohio restaurant
after ingesting a two inch born that tore his esophagus. However,
his case made all the way up to the State
Supreme Court, where the judges ruled in a four to
(29:08):
three decision last week that he should have expected at
least the possibility that the boneless chicken he was eating
may have bones. Just running frustrating.
Speaker 3 (29:21):
Break for our gament.
Speaker 6 (29:23):
I mean, this poor guy, he had to go through
two surgeries and he's still lost in court.
Speaker 2 (29:28):
Yeah, that's pretty rough. I also just do wonder like,
was this guy just how do you?
Speaker 4 (29:35):
Yeah, this is my thing is that if he had
taken one, if you had taken one by, he would
have run into this issue.
Speaker 3 (29:42):
They're not oysters. I'm just struggling to comprehend.
Speaker 2 (29:47):
I mean, look, in my opinion, if you advertise something
as a boneless chicken wing and then there's a bone
in it, then you know you got you've got some
spleining to do.
Speaker 3 (29:59):
I'm not sure sure that you know.
Speaker 2 (30:01):
I'm not exactly sure why the court didn't just say
this is ridiculous, We're not going to rule on this.
They they felt the need to come out and say
that if you're ordering boneless chicken wings, you should have
an expectation of bones.
Speaker 3 (30:13):
Being in there.
Speaker 2 (30:14):
Similar that that to me was a little bit confusing,
but nonetheless a little bit.
Speaker 3 (30:21):
Of humor to uh.
Speaker 2 (30:22):
To finish off the show today with the Ohio Supreme
Court determining that yes, in fact, boneless chicken wings can
have bones, So buyer beware.
Speaker 3 (30:31):
I suppose this guy's got the lesson.
Speaker 4 (30:35):
He's got to be he's got to be a big guy.
I'm trying to look it up here the art the
article noted that he was a regular, so.
Speaker 2 (30:49):
Any case, in any case. Uh, that's where this one landed.
Speaker 3 (30:55):
Here.
Speaker 2 (30:57):
Amazon making a push for faster delivery to some of
the more rural areas of the United States and really
some of the last areas that they don't already have
this available. But Tucker, Paul, you and I have talked
about all of us have talked about how just ridiculously
eat easy it is to get something delivered to our
homes the very next day. Obviously that's not as much
(31:18):
the case if you, for instance, live in northern Maine.
You know, if you're three or hours north of Portland,
my guess would be you're not getting the same fast delivery.
But Amazon really trying to tackle this last segment here
and not relying on the US Post Office for these
areas as much as they have, in spite of the
fact that the United States Post Office does require to
(31:38):
have a presence everywhere in the country. I do wonder,
you know, I was actually speaking why I found this
so relevant as I was speaking to a retiree just
the other day who they decided to retire to, not
a completely rural area, but you know, certainly a more
summer area of Pretty recently, they retired to the Rangely
(32:04):
area of Maine, which, if you're not familiar, as a
lakes region on the New Hampshire border in a pretty
northern part of Maine. And they spent a few years
there and realized that they really couldn't do it. And
you know, part of the reason was medical you know,
they had to travel a long time to get to
their medical appointments, and then their doctor had prescribed some
eye drops for her and she had to tell the
(32:26):
doctor like, yeah, that all sounds good, but I do
live an hour and a half from the closest pharmacy,
so that is becoming problematic. So in their case, they
ended up relocating. But with Amazon making this push. In
their case, I just don't think they were comfortable with
the idea of, you know, ordering the majority of their
stuff on Amazon. But with Amazon and other retailers making
(32:48):
these pushes into more rural areas, I do wonder if
it just kind of opens up the possibilities of where
people feel comfortable retiring. Granted, in this case, you're still
also quite a distance from any hospital, but if you're
able to get a majority of your pharmaceuticals even delivered
via Amazon, what does that do in terms of where
people concentrate in retirement would be an interesting question to me.
Speaker 4 (33:10):
Still, you need to have access to the health resources
you mentioned. I think that's that's significant, and obviously for
people in retirement, proximity to family can be important too,
So it's hard to really say I just wonder from
a profitability standpoint, I understand how low the volumes are
usps and ups handling Amazon's packages, but it seems like
(33:33):
the Amazon Cloud system really needs to power a lot
of these endeavors, because I can't imagine it's a profitable
to go into such rural territory.
Speaker 3 (33:41):
You know, it depends. I mean, I would think not.
Speaker 2 (33:44):
But if you are looking at hey, who are the
last Americans that aren't already paying that one hundred and
forty dollars a year for Amazon Prime, I'd imagine it
some of these people here, and if they're starting to
get more real. You know, the other big push that
has come in rural areas has been high speed internet.
And so if you're being met with okay, rulers are
now finally getting high speed broadband internet and we want
(34:06):
to sign them up for Amazon, you know, this might
be that last push.
Speaker 3 (34:10):
So long as they don't so long as they don't
air too much stuff, we might be all right. I
guess it's the answer.
Speaker 2 (34:15):
Let's take a quick break for the next twenty two hours.
We will be right back at it. Remember after the
close today we've got Microsoft earnings, and then tomorrow afternoon
Federal Reserve taking the stage with their interest rates, setting policy.
A lot to cover, we'll be back at it tomorrow.
Have a great afternoon, everybody,
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