November 14, 2025 • 38 mins
Mike Armstrong and Paul Lane explain what the 'K' shaped economy is, and why it is a problem. What does our Michael Burry obsession say about us? Fewer burritos, more bargains: Consumers flash holiday warning signs. Here are the new 401(k) and IRA contribution limits for 2026. Here’s how Robinhood will deliver bags of cash to your doorstep safely. Paul LaMonica (Barron's) joins the show to chat about Circle and crypto's recent wild ride.
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Speaker 1 (00:00):
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(00:42):
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(01:06):
and Paul Lane.
Speaker 2 (01:12):
Good morning, Happy Friday, Welcome back to the Financial Exchange.
It's Mike, Paul and Tucker with you on a Friday
where markets are not seemingly known exactly what to do
with themselves. Here, we've got the Dow off about three
quarters of a percent. It was off about one point
two at its worst from what I saw, the SMP
(01:33):
off about a tenth of a percent of the NASDAC
barely holding on to gains right now. In terms of
that Dow, I'm just taking a look to see if
there's anything in particular that's dragging it. Uh. Yeah, you
got United Health down three and a quartered, Nike down
two and three quarters, of AMX down one point nine,
Visa down one and a half. There's been some reporting
this morning about a maybe weaker than expected holiday sales season.
(01:55):
I wonder if that has some contributing factor. But look
at the last several weeks at least, the only thing
that any financial reporter has wanted to talk about has
been artificial intelligence and the changing sentiment to it. It's
been announcements from Michael Berry's firm that they're closing up
shop and you know, placing bets against the AI trade.
(02:15):
It's been big CEOs from banks talking about a possible correction,
and none of it has really signified much of anything
other than a specific turn in the narrative about AI
and the promises that it may bring in the future.
And I think that has that's been a significant shift
at least in sentiment, but not a significant shift shift
(02:37):
in markets. And like we were talking about before, right,
we've got in video earnings coming out next Wednesday. We
have got all sorts of data that was delayed due
to the government shutdown that we think is going to
get released at some point. We know that, for instance,
the December or the November jobs report will be released
in early December. But there's a few different pieces here
that we're going to be diving through on the financial
(02:58):
exchange that could shift that narrative again when it comes
to both the AI trade, the profits that these companies
are making, and where you know, where the puck is
going on this overall economy. So a lot more to
break down over the course the next few weeks where
the what is going skate, where the puck is go?
Speaker 1 (03:20):
Okay, sorry but.
Speaker 2 (03:23):
It's an ice hockey analogy. Yeah, yeah, I've i only
have one. I only have one set of sports analogies.
Otherwise I'm in I'm in big trouble.
Speaker 3 (03:34):
Uh.
Speaker 2 (03:35):
The piece from who is this from Today? Barons Today
is about the K shaped economy. I think this was
first coined right during COVID. Actually it was.
Speaker 1 (03:45):
It was.
Speaker 2 (03:46):
It's not an old term. It was coined during COVID
by some economists that I've heard interviewed before, and it
describes the idea that we have had tremendous amounts of
wealth creation over the course of the last few years,
as well as another group of consumers who have been struggling.
And initially, you know, initially, when it was created during COVID,
(04:07):
it was referring more to the kind of divergence between
society of Hey, if you're a white collar worker who
you know, used to go into the office every day,
you still had your job during COVID, you were doing
it from home, you were saving money on commuting, and
you were doing fairly well because you were able to
save a lot of money. You might have gotten some
stimulus payments, and you're doing all right. Whereas if you
(04:29):
worked retail, if you worked, as you know, somebody in
a hospital or another industry that could not be done remotely.
You either lost your job or were forced to work
throughout the pandemic. And we're at a very different position
than those who worked frankly like you and me, Paul,
where yeah, we could do this radio program remotely, we
(04:49):
could do financial advice remotely, and you know, continue to
stay employed and do quite well. It's it's morph just's
taken on a different meaning now to describe, you know,
the wealth inequality since COVID. But why do they point
out that it is in fact a problem Because from
a big picture perspective, I might not like the results,
(05:13):
I might not like what it means for society, but
we have not seen a dip in consumer spending, We've
not seen a dip in retail sales. Inflation continues to
remain robust, and most of the companies that support those
sectors are doing just fine. You know, there's been scares
because of tariffs and scares because of other things, but
the big publicly traded companies, at least by and large,
(05:35):
unless they're screwing things up on their own, are still
seeing their customers come in and spend money and are
doing all right. So what are the points that they
bring up about the K shaped Kase shaped economy.
Speaker 4 (05:45):
Anytime you're being overly reliant upon the population of the
country who let's say makes over two hundred thousand in
terms of household income. There's been different ranges that have
been quoted, but they are accounting for a more significant
percentage of spending than they were, call it thirty years
ago or so, if you're more reliant on that population
who earns over two hundred thousand, that typically has the
(06:07):
highest concentration the people in that earning income range of
stock ownership in this country, they are usually the ones
who invest, whether it be in their four own k
but then even in regular investment accounts. And so if
there are changes in asset prices or if the market
is to significantly decline, to me, we are at a
(06:28):
point in time where it seems as if the market
is even more tethered to the overall well being of
the economy because we're so reliant on those higher income
consumers then we were previously. That it can just leave
you in an unstable place where you're really more subject
to the woes the ups and downs of the market
(06:48):
versus the pure brass tax income growth leading to more
stimulation of economic activity in the country. And Jared Bernstein,
who's the chair, who was the chair Council of Economic
Advisors back for Biden, had mentioned this point with that
one dollar decline in the stock market could equate to
(07:09):
two to three cents in less spend in the country,
and so that just kind of puts some context perhaps
behind perhaps what could be.
Speaker 2 (07:17):
The problem there. Yeah, I think there is that piece
of concentration. And so yeah, if you have the wealth
effect reverse itself in some meaningful way because of a
stock market that you know, the bubble explodes and suddenly
you have people feeling less wealthy, I think there's a
specific risk to that economy there. The other piece is
much more it's a lot more nuance in a much
more difficult to put your finger on exactly. But I
(07:40):
think everyone would agree that having ten percent of the
population do like half of the spending just doesn't sound
great for society. No, And I think we can you know,
all acknowledge for a second that, yeah, if you're feeling
left out of the economic moment, if you're feeling as though, hey,
(08:02):
the rest of the world is moving forward, and here
in my part of the world. I am falling behind
because my job doesn't involve AI and I don't have
a four oh one K and I don't know my home,
then you're going to be more inclined to vote for
I think significant change. And so I think about this
in its role in a democracy, and it just doesn't well,
(08:24):
I guess, let me put it this way, if you're
comfortable with the status quo, it probably doesn't spell great things.
If you have this severe K shaped economy where a
large portion of the population feels left behind. It's not
to say that they you know, I'm not saying that
we're going to have societal collapse, but I'm saying that,
you know, when people are feeling crummy about the state
of things, they're going to vote to change it, and
they might vote to change it significantly. And we saw
(08:45):
that with the mayor in New York right Like, I'm
not saying that these two things are directly tied together,
but you can kind of see how some of this
stuff plays out. And so that's that's part of the
piece that concerns me is I think there will as
a result of this, I would expect a lot less
voting for the middle and a lot more voting for
(09:08):
who do I think is going to change things the most,
And so I don't know. I think I see some
evidence of that here and there, and I wouldn't be
surprised to see more of it directly as a result
of these K shaped divergences in our in wealth, in
our society.
Speaker 4 (09:28):
Yeah, it could erode at the core belief of the country.
From an economic perspective of capitalism, it starts to erode
that belief. You know, if you'll continue to work hard,
you can continue to earn more and be able to
kind of take your place in the country from an
economic standpoint. If all of a sudden that people in
the middle or lower cautious feel like that is totally
out of reach, and some people may already feel that
(09:49):
way today, then it doesn't spell great for the overall economy.
Hard to quantify all that.
Speaker 2 (09:55):
When you feel the system isn't working for you, you vote
to change the system.
Speaker 1 (09:59):
Right.
Speaker 2 (10:00):
That's about as political as I'm willing to get on
a Friday, or generally, let's take a quick break. When
we come back, We're gonna have a little bit of
trivia for you next here on the Financial Exchange, find.
Speaker 1 (10:09):
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Speaker 5 (10:44):
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five k dot Boston. Uh. Time for trivia here on
the Financial Exchange. In earlier today, the price of bitcoin
dip below ninety five thousand dollars. In October, bitcoin hit
(11:31):
it's all time high of one hundred and twenty six
thousand dollars. So today's Treviy question is simply what year
was bitcoin created?
Speaker 2 (11:39):
Once again?
Speaker 5 (11:40):
What year was bitcoin created? Be the eighth person today
that text us at six one seven three six two
thirteen eighty five with the correct answer, and you win
a Financial Exchange Show T shirt. Once again. The eighth
correct response to text us at six one seven three
six two thirteen eighty five will win that T shirt.
(12:00):
See complete contest rules at Financial Exchange Show dot com.
Speaker 2 (12:05):
Paul we covered yesterday that Michael Burry's hedge fund was
closing down and just kind of the significance of that,
which frankly, there isn't much. It was one hundred and
fifty five million dollar hedge fund. It was not all
that substantial. And yet, man, we're getting a lot of
press about it, and I you know, Jonathan Levine from
(12:26):
Bloomberg asked the question, and there's reason to be fascinated
with Michael Burry. You know, if you're a Christian Bale fan,
there might be a reason to be fascinated based on
the twenty fifteen Big short movie. But what does it
say about markets or society right now that we're so
obsessed with the guy who made a killing off of
(12:47):
betting against the US economy? We like, well, the US,
I don't. Yeah, that's fair to say. They bet against
the state of the housing market and the stock market
leading up to the Great Financial Crisis.
Speaker 4 (12:58):
We are fascinated with a story such as that where
you have a maverick or someone who goes against the
grain and makes a big bet to go in the
other directions of everyone else and then cashes in on
it big time. It's a fascinating story to fall and
why they made the movie on it, because you just
have this one person who is just stepping out from
(13:21):
the norm. But I am so glad that Jonathan Levian
wrote this piece because in the years that have followed since,
to be clear, you know, one hundred and fifty five
million in the hedge fund world, is penat is a joke.
Is tiny, is not a very big hedge fund, And
he still gets the notoriety as if he's Warren Buffett
for short sellers out there like he is this just
(13:42):
you know, esteemed investor, and he deserves all the credit
in the world for a tremendous call back in two
thousand and eight, but there have been other instances, And
when his news story came out this week, I started
scratching my head and I'm glad Levian wrote this piece
because I said, haven't he hasn't he done this before?
Hasn't he made this call? And thankfully John Finily caught
me up to speed. Yes he has. For example, in
(14:03):
September of twenty twenty two, many listeners may remember, the
market was down about eighteen percent for the calendar year
twenty twenty two. September, we were pretty low at that point.
He was quoted as saying, no, we have not hit
a bottom yet. Technically he was right. We got to
the bottom a couple weeks later. But then from then
on out it's been an upward swing. And in fact,
in January of twenty twenty three, three or four months later,
(14:24):
he just tweeted out to his followers sell and we
didn't really know what else he was mentioning there, but
presumably he was saying, sell everything, or sell all the stocks,
and guess what the S and P five hundred has
done seventy five percent incance. So I'm so glad that
he wrote this to point out that while maybe he
has some valid points on the depreciation of some of
these capital expenditures on it, the point that.
Speaker 2 (14:46):
He has been making is that if the big companies
of today were using the accounting methods of the dot
com era, they'd be looking far worse than they are
right now.
Speaker 4 (14:56):
Yeah, they've stretched out some of these expenses to a
five year, six year schedule. We don't need to get
down that reb hill. But I'm just glad that someone
wrote the piece to call out that, Hey, tremendous call
that he made, but he set some other cars recently too,
or I don't know if you want to call him
calls or not, but cries for attention that really haven't
gone his way necessarily.
Speaker 2 (15:16):
I don't know how to interpret his moves right now.
They're certainly getting more attention, but it is important to
contextualize that it is not as though Michael Burry shorted
the Great Financial Crisis, made a bunch of money and
then was silent until now. And I feel like that's
kind of the narrative that's being created, is, oh, look out,
the guy that was only noisy one other time right
(15:37):
before the Great financial crisis is now out there talking
again about markets. It's not the case. He's been shorty
markets pretty consistently here and there for the last fifteen
years and has been wrong plenty of times. It had
been on the wrong side of trades plenty of times.
And so yeah, take the commentary with what you will.
I'm not saying his points are invalid or incorrect or inaccurate.
(15:59):
Plenty of them raise interesting questions. But take it in context,
which is this guy's been making these points for years.
He's been, you know, talking about this up and been
wrong about this market a couple of times, and his
stuff is getting a little bit more play right now.
Fewer burritos, more bargains. We've had a few kind of
(16:22):
flashes about concerns about the holiday shopping season. I covered
one a couple of weeks ago regarding corrugated box sales,
and you know, kind of a decline that we are
seeing there in the US. What are we getting in
terms of hints about the holiday shopping season, Paul, Because
I don't know from what I'm feeling right now, I'm
(16:44):
guessing low single digit increases. I'm not expecting a horrible
holiday shopping season. I think there are gonna be deals
to be had out there. I think, generally speaking, so
long as we don't see a massive uptickt unemployment, people
are going to be buying those deals, and I think
we're going to see a fairly success full holiday season
for most retailers.
Speaker 4 (17:03):
That's I'm right there with you, Mike. I'm not as
concerned as this piece lays out where they mentioned that
higher income consumers we talked about early in the show,
they're carrying a lot of weight that they're trading down
and looking for deals, or gen Z is spending less
and we've got lower income shoppers struggling. I don't have
the same takeaway or prediction that this is going to
(17:25):
mean a bleak holiday season. I still think that the
growth of three percent year over year is attainable. Last
year we saw four point three percent in terms of increase.
Speaker 2 (17:36):
I'm gonna quote a stat here that I have seen
proven wrong over and over and over again, consulting from
Alvarez and marshl I don't know anything about them. I
have not seen this company cited before. But they conducted
a consumer sentiment survey that pulled over two thousand shoppers.
They found twenty four percent of respondents earning one hundred
thousand dollars or more a year or planning to spend
less this holiday season. Every time I have heard about
(18:00):
some companies saying, yeah, you know, this is the year
that I'm gonna really pinch pennies and get my financial
house in order, it has been proving horribly wrong moments later.
And so any survey out there telling me that, yeah,
consumers are really pinching pennies this time around, and they're
worried about the state of things and they're going to
pull back their spending plans, treat it with a high
(18:22):
degree of skepticism because it's just not happened until until
they literally can't spend right, credit card gets maxed out,
they don't have a job. Those are the scenarios where
we do actually see consumer spending pull back, but so
long as there is a credit card available to max out,
(18:42):
we tend to do it. And I'll tell you, I'm
hearing a heck of a lot more repeats of the
Yolo book that trip type mentality, like we're hearing back
in twenty twenty one than I have for the last
several years. So I don't know I'm just not buying it.
Speaker 4 (18:56):
I'm someone who's pretty locked into their months a month budget.
But I've never looked back to see if the holiday spending.
Like where I've been on the holiday spending standpoint, I'm
sure it's gone up every single year, but I don't
know who would even know if they're spending less than
they were last year.
Speaker 2 (19:11):
Maybe there are some people out there, but I are
actually good at vertag. Let's take Hey, I'm good. Let's
take a quick break where we come back. We've got
some Wall Street Watch, also the trivia winner next year
on the Financial Exchange.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving market so far today right here on the
Financial Exchange Radio Network. Now.
Speaker 5 (19:58):
I was seeing a little bit of a reversal in
mark get since some dip buying occurring following yesterday's steep
tech selloff. That did carry over to today's open. But
right now the Dow is down by four tenths of
a percent, or two hundred and thirteen points. SMP five
hundred is now up a quarter percent or seventeen points.
NASDAC up six tenths of one percent, or one hundred
(20:19):
and thirty four points higher. Russell two thousand is up
two tenths of a percent. Tenure Treasure wheeled up one
basis point at four point one two nine percent. Crude
oil up nearly three percent higher, trading right above sixty dollars.
A barrel breaking news from Walmart this morning after the
retail giant said CEO Doug McMillan is retiring early next year.
(20:41):
McMillan has served as Walmart's CEO since twenty fourteen. John
Ferner will take over the role and has been the
CEO of Walmart's US business since twenty nineteen. He started
with Walmart in nineteen ninety three as an hourly associate.
Walmart stock is down one percent. Meanwhile, Applied Materials reported
better than expected quarterly results driven by the AI boom. However,
(21:05):
the semiconductor maker gave a disappointing outlook for next year,
including modest full year revenue guidance. Shares are now edging higher,
and according to the Wall Street Journal, Paramount, Comcast and
Netflix are preparing bids for Warner Brothers Discovery. The report
also said Warner Brothers Discovery has an initial deadline for
first round bids at or On November twentieth, Warner shares
(21:29):
are up over three percent. I'm Tucker Silva and that
is Wall Street Watch. And in the previous segment, we
asked you the trivia question what year was bitcoin created?
That would be two thousand and nine. John from Franklin,
Mass is our winner today, taking on my Financial Exchange
Show t shirt. We played trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
(21:52):
Show dot com.
Speaker 2 (21:54):
Paul. A few stories regarding retirement kind of came across
our desk the last couple of days. One Verizon announcing
that they plan to cut about fifteen thousand jobs in
their company under the leadership of their new CEO. The
other being that the new contribution limits for four oh
one ks came out. And I know those don't seem interconnected,
(22:14):
because if you're not working for Verizon, you're likely not
contributing to retirement. But it does bring up the subject of, Okay,
what am I allowed to do and then what happens
with these accounts once I job change retire? What are
my options? How does it all work. So let's start
off with the there's a bunch of changes to retirement
plan compensation and how it works and what you're allowed
(22:36):
to do. I'm just going to mention a few of
them that are most relevant to people. One, if you
are contributing to a traditional four oh one K or
ROTH four O one K or four h three B
last year or twenty twenty five, you could do up
to twenty three thousand, five hundred. That's getting one thousand
dollars bump. You can now do twenty four thousand, five
hundred dollars in twenty twenty six if you are are
(23:00):
making more than one hundred and fifty thousand dollars And
I don't understand how they're going to do this yet,
so more to come on this subject. But if you
make more than one hundred fifty grand and your employer
is making contributions, is making matching contributions for you, then
those what was the story there? Those are required to
now go into the WROTH. I believe it is correct. Yeah, again,
(23:23):
making it so that you have to pay the taxes
upfront on some of these items your catch up contributions.
So if you're over the age of fifty, you're gonna
be able to do an extra eight thousand dollars a year,
So that's bringing your annual contribution if you're over the
age of fifty to thirty two thousand and five hundred,
and then the old super catch up if you are
(23:45):
specifically between the ages of sixty and sixty three, you
can do another eleven two hundred and fifty dollars. On
top of all of that, the traditional irays and wroth
irays also got bumps, so you're gonna be able to
do a little bit more to your IRA or to
your off. The catch up there got bumped up as well.
That's now index to inflation, or an extra eleven hundred
(24:06):
dollars if you're contributing to the irarais. But this does
affect just about everybody out there in terms of these
limits of what you can and cannot do, and so
it's an important thing to review. I would say, more
important and more complex than this are two other factors though.
Paul one I was meeting with somebody the other day.
His wife had contributed to a ROTH account when she
(24:30):
was younger. Last five years has been sitting at a
bank because they kind of left it there and didn't
know what to do with it and didn't know the rules.
What are your options with your retirement accounts if you
started one on your own and are now working for
an employee that offers one, or if you leave your employer,
like what can you do with those three?
Speaker 4 (24:49):
Three options you can usually consider. One is you can
usually for the most part, roll a former retirement plan
into your new employer plan. You have to check to
make sure it were in all cases, but for the
most part you could do that. The second option is
you could roll it into an IRA or roth IRA
to be managed at any brokerage firm out there you
(25:09):
pick your place. Or the third is you cash them out,
but you have to be very careful obviously with that.
Speaker 2 (25:14):
You can also sometimes leave them there, right, Or you could.
Speaker 4 (25:16):
Just leave it behind, right yea, I'm just talking about
alternatives to leaving it there. Yeah, Or you can cash
it out obviously, like I was mentioned, but you just
got to make sure you're aware of penalties there. But
it is important, Mike, because you alluded to instances where
you've seen accounts left behind that are not being properly
invested in. Yeah, they may be smaller sums, but it
(25:36):
is so important that they are participating in the market
and be invested. I can think of one example where
I had a client who was working at craft Hinds
in a portion of his four one K plan was
in the stock of the company. You can look up
Craft Hinds and how they've performed over the last five
six years. It hasn't been great. And we had at
least scrutinized and said, hey, ten percent of your four
(25:58):
one K is in this position, and ultimately we ended
up rolling it out and not having that exposure. But
if you had just left it there, it was a
pretty significant portion of his four to one K that
wouldn't have fared that well, or at least wouldn't have
been looked at.
Speaker 2 (26:09):
Yeah, the other piece that I frankly see often and
get worried about. Believe it or not. I know this
sounds ridiculous to people that pay close attention to their finances,
but you would not believe the number of people who
just leave their accounts behind. Then they happen to move
because you'll move a lot when you're in your twenties,
you lose track of it. You don't have the log
in anymore, and frankly, it can even become abandoned property.
(26:33):
In some cases, it does happen here and there, and
so you need to know your options. When it comes
to funding your own retirement, it gets way more complicated
than Paul and I have even laid out. You mentioned
the case of company stock within a four oh one K.
That's an entire industry on its own of specialization about
(26:54):
what to do with your company stock within your four
oh one K. There is a lot that you need
to do on the checklist, especially when you are changing
jobs when it comes to retirement. If you have questions
about it, if you are facing down retirement, or if
you're decades away from it but you're considering a job change,
talk to the folks at Armstrong so we can give
you guidance on how to handle these different big changes.
(27:17):
It affects everything from your insurance coverage to your retirement
and more. The numbers eight hundred three nine three for
zero zero one. We offer free consultations throughout New England. Again,
that number to book yours or at least request a
call back is eight hundred three nine three for zero
zero one.
Speaker 1 (27:36):
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, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (27:51):
We have to cover this story. Tucker sent it to
us yesterday during the program. But here's how Robinhood will
deliver bags of cash to your doorstep safely. That is
a huge presumption that robin Hood will in fact deliver
bags of cash to your doorsteps safely. But let's talk
(28:11):
about what's happening. I guess before I run in and
criticize why this needs to exist, because I don't believe
it does. Let's talk about what they are actually proposing
doing here. Because robin Hood does in fact want to
be able to have a service where they can deliver
you cash money to your door.
Speaker 4 (28:29):
Yes, so what their service would look like. This is
just you got to scratch your head to see how
this is going to work out. But is the same
day delivery of cash to your door for a fee
of anywhere from two ninety nine to six ninety nine,
which they say is comparable to out of network ATM
charges six ninety nine is definitely on the higher end
side of that. I haven't seen any of that out there,
(28:50):
unless you're probably talking about a casino ATM that really
would rake you over the coals. But for customers that
have over one hundred thousand assets, they would be eligible
for this program. Robinhood and go Puff are teaming up
for this, and all I can think about, what.
Speaker 2 (29:05):
Is the average age of a Robinhood customer.
Speaker 4 (29:07):
They skew much more into the thirty to forty five demographic.
Speaker 2 (29:12):
Their average age thirty five, thirty five. There we go,
What is a thirty five year old need with a
bag of cash?
Speaker 5 (29:20):
I have one dollar in my wallet.
Speaker 2 (29:21):
The only thing that I get. The only thing that
I can think of is you need to do something illegal,
so you need cash.
Speaker 4 (29:27):
There's this bagel place that I go to that's that's
cash only, And that's the only reason that I end
up taking out cash is for the weekend bagel runs
to pick up breakfast sandwiches.
Speaker 2 (29:36):
I pay the guy that I skate with for my
pickup hockey in twenty dollars bills. So once a month
I go to the bank and get a bunch of twenties,
and that's how I my pickup basket pick up literally
my only cash the same way too. Yeah, I don't
understand why this business needs to exist. The only real
reason I can think of is because Robinhood customers need
(29:59):
to do something that requires cash, which might be not legal,
and thirty five year olds don't use cash. They just don't.
I don't understand this partnership at all. I don't see
the reason for it. By the way, I don't know
about robin Hood, but at Schwab at Fidelity, you can
literally get a debit card right on your brokerage account
(30:19):
and withdraw cash from your account at any ATM. And
by the way, at least Fidelity and Schwab I know,
I'm pretty sure they still do will reimburse you the
ATM fees that you get charged. That Robinhood is comparing
these two because they don't operate their own network of
ATM so they just say screw it. And that seems
a lot safer than having some delivery guy from what company,
gopuff distribution centers. I mean, give me a wad of cash.
Speaker 5 (30:43):
I wouldn't want to do this if I was a
courier of gopuff Oh, because people would.
Speaker 4 (30:47):
Just be that's all I could think.
Speaker 5 (30:48):
People would just stake out gopuff is courier working them
to the house.
Speaker 2 (30:52):
Job.
Speaker 5 (30:53):
You're just give me all the money you got there.
Speaker 2 (30:55):
I don't know who your target customers are. I don't
think it's going to work. I don't think it's going
to ruin your business. But I see no reason for
this entire model. No one's gotta do it.
Speaker 4 (31:05):
Can you imagine a town movie version of them just
going after goprough drivers out there instead of them going
after the guy in the brinkstruck. They're like, there he is,
we got we got to go, man, we gotta go
get him.
Speaker 2 (31:17):
Is that a Corolla? We gotta take a quick break
when we come back, come back. Paula Monica from Barons
joins us next.
Speaker 1 (31:26):
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Speaker 2 (32:38):
Join us now is Paul Lamonica from Barons and Paul,
I'm glad you're here because quite honestly, all of my
attention has been sucked into the AI trade and you know,
private credit over the last several months. But it's worth
pointing out that bitcoin back in early October reached I
think an all time high of one hundred and twenty
five thousand dollars per coin has since fallen. I think
(32:59):
today was below night twenty five thousand dollars. Briefly, talk
to us about some of the big events recently in
companies surrounding crypto. Circle is one that reported earnings recently,
and you wrote about Yeah.
Speaker 3 (33:12):
Circle the stable coin company, So they are the firm
behind usd coin peg to the US dollar. Their earnings,
you know, I think, are you know, raising some concerns
that you know, this is a high growth market, but
you know, there's just a lot of hype right now.
(33:35):
And this is a company that went public a few
months ago and their lock up period has now expired.
It said in their SEC filing that two days after
they report third quarter earnings would be when certain insiders
would be able to sell shares. So I think some
people might have been getting ahead of that. But you know,
it's a little more encouraging I think for Circle than
(33:57):
other companies in the crypto a sphere, if you will,
because this is a company that generates, you know, a profit.
There are concerns about maybe the net interesting income declining
going forward if the FED is cutting short term rates
because you know, they hold a lot of reserves in
(34:18):
assets on their balance sheet tied to your short term rates.
But you know, there are some analysts that have come
out and defended the stock, and it looks like Kathy
Wood at ARC has also bought a little bit more
on the dip this week. So I wouldn't be too
worried about Circle for the long term. But you know,
crypto remains voluable. This everyone talks about it being digital gold.
(34:38):
Gold doesn't fall, rise and fall this much.
Speaker 2 (34:41):
Can you talk me a little bit about bitcoin credit cards.
I think a lot of people listening would be pretty
surprised to know they even exist. How does the bitcoin
credit card operate and who are the companies involved in it?
Speaker 3 (34:51):
Yeah, so Gemini is the primary company that people will
probably recognize. It's the firm that went public this summer,
you know, run by Cameron and Tyler Winklevoss of early
Facebook fame, and they have credit cards that allow users
to get rewards in bitcoin, ether, you know, XRP, Solana,
(35:13):
some of the other top cryptocurrencies, and the companies using
that as a way to try and get you know,
people who may want these cards to also trade crypto
on their platform. It's I think an interesting strategy. The
problem is that, like many young companies, they are spending
(35:34):
very aggressively on marketing and that's one of the things
that's eating into their profits. And you know, investors, I think,
are you know, a little worried about how much red
ink Gemini is bleeding right now? So will that company
eventually rebound, you know, as we know Facebook for example.
(35:55):
To bring it back to the Winklevoss Twins was a
company that was not a great performer initially but is
obviously now one of the world's you know, most valuable companies.
Not suggesting at all that Gemini becomes the Facebook of crypto,
but it may be too early to write.
Speaker 2 (36:10):
Them off entire So there's been a fair bit of
pressure obviously over the last couple of months. We have
grey Scale Investments, one of the big investment firms offering
you know, financial products around crypto, going public fairly soon. Here,
how big a test is it for just the crypto
market in twenty twenty five.
Speaker 3 (36:29):
Yeah, I think it's going to be very interesting to
see if Grayscale does well when they go public, because
you know, this is a top company in the you know,
the crypto trading ecosystem, but like many other companies with
ties to crypto, their financials, their revenue and profits were hit,
(36:52):
you know, in the earlier part of this year because
of all that crypto volatility. They haven't obviously reported any
numbers for fourth quarter, you have, We're still in the
midst of the fourth quarter, but you would have to
think that the big price decline of crypto in the
last couple of weeks is not going to be great
for their financials. Hence we're seeing you know, big stock
market slides for Coinbase, as well as Robinhood, which is
(37:14):
a very big in the in the crypto world as well.
So you know, I think Grayscale, who would have a
lot of demand when it goes public. But just look
at other companies. I mentioned Gemini Bullish, a crypto exchange
that went public earlier this year. Their stock has fallen
pretty sharply from its highes. So this is going to
remain an incredibly volatile part of the stock market because
(37:37):
cryptos are by their nature still incredibly lolible.
Speaker 2 (37:41):
Paul A Monica from Baron's joined us this day to
talk about the state of companies surrounding the crypto market. Paul,
appreciate you educating us this week, and we'll talk to
you again soon.
Speaker 3 (37:50):
Thanks. I'm a good weekend, guess.
Speaker 2 (37:52):
Markets in mixed territory. As we close in on the
noon hour here, NASDAC up three quarters of one percent,
the SMP up four tenths percent. Now currently off one
third of a percent. That's all the time we have
for this week. Have a fantastic weekend. We'll be right
back at it on Monday. Folks, have a great weekend.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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(01:06):
and Paul Lane.
Speaker 2 (01:12):
Good morning, Happy Friday, Welcome back to the Financial Exchange.
It's Mike, Paul and Tucker with you on a Friday
where markets are not seemingly known exactly what to do
with themselves. Here, we've got the Dow off about three
quarters of a percent. It was off about one point
two at its worst from what I saw, the SMP
(01:33):
off about a tenth of a percent of the NASDAC
barely holding on to gains right now. In terms of
that Dow, I'm just taking a look to see if
there's anything in particular that's dragging it. Uh. Yeah, you
got United Health down three and a quartered, Nike down
two and three quarters, of AMX down one point nine,
Visa down one and a half. There's been some reporting
this morning about a maybe weaker than expected holiday sales season.
(01:55):
I wonder if that has some contributing factor. But look
at the last several weeks at least, the only thing
that any financial reporter has wanted to talk about has
been artificial intelligence and the changing sentiment to it. It's
been announcements from Michael Berry's firm that they're closing up
shop and you know, placing bets against the AI trade.
(02:15):
It's been big CEOs from banks talking about a possible correction,
and none of it has really signified much of anything
other than a specific turn in the narrative about AI
and the promises that it may bring in the future.
And I think that has that's been a significant shift
at least in sentiment, but not a significant shift shift
(02:37):
in markets. And like we were talking about before, right,
we've got in video earnings coming out next Wednesday. We
have got all sorts of data that was delayed due
to the government shutdown that we think is going to
get released at some point. We know that, for instance,
the December or the November jobs report will be released
in early December. But there's a few different pieces here
that we're going to be diving through on the financial
(02:58):
exchange that could shift that narrative again when it comes
to both the AI trade, the profits that these companies
are making, and where you know, where the puck is
going on this overall economy. So a lot more to
break down over the course the next few weeks where
the what is going skate, where the puck is go?
Speaker 1 (03:20):
Okay, sorry but.
Speaker 2 (03:23):
It's an ice hockey analogy. Yeah, yeah, I've i only
have one. I only have one set of sports analogies.
Otherwise I'm in I'm in big trouble.
Speaker 3 (03:34):
Uh.
Speaker 2 (03:35):
The piece from who is this from Today? Barons Today
is about the K shaped economy. I think this was
first coined right during COVID. Actually it was.
Speaker 1 (03:45):
It was.
Speaker 2 (03:46):
It's not an old term. It was coined during COVID
by some economists that I've heard interviewed before, and it
describes the idea that we have had tremendous amounts of
wealth creation over the course of the last few years,
as well as another group of consumers who have been struggling.
And initially, you know, initially, when it was created during COVID,
(04:07):
it was referring more to the kind of divergence between
society of Hey, if you're a white collar worker who
you know, used to go into the office every day,
you still had your job during COVID, you were doing
it from home, you were saving money on commuting, and
you were doing fairly well because you were able to
save a lot of money. You might have gotten some
stimulus payments, and you're doing all right. Whereas if you
(04:29):
worked retail, if you worked, as you know, somebody in
a hospital or another industry that could not be done remotely.
You either lost your job or were forced to work
throughout the pandemic. And we're at a very different position
than those who worked frankly like you and me, Paul,
where yeah, we could do this radio program remotely, we
(04:49):
could do financial advice remotely, and you know, continue to
stay employed and do quite well. It's it's morph just's
taken on a different meaning now to describe, you know,
the wealth inequality since COVID. But why do they point
out that it is in fact a problem Because from
a big picture perspective, I might not like the results,
(05:13):
I might not like what it means for society, but
we have not seen a dip in consumer spending, We've
not seen a dip in retail sales. Inflation continues to
remain robust, and most of the companies that support those
sectors are doing just fine. You know, there's been scares
because of tariffs and scares because of other things, but
the big publicly traded companies, at least by and large,
(05:35):
unless they're screwing things up on their own, are still
seeing their customers come in and spend money and are
doing all right. So what are the points that they
bring up about the K shaped Kase shaped economy.
Speaker 4 (05:45):
Anytime you're being overly reliant upon the population of the
country who let's say makes over two hundred thousand in
terms of household income. There's been different ranges that have
been quoted, but they are accounting for a more significant
percentage of spending than they were, call it thirty years
ago or so, if you're more reliant on that population
who earns over two hundred thousand, that typically has the
(06:07):
highest concentration the people in that earning income range of
stock ownership in this country, they are usually the ones
who invest, whether it be in their four own k
but then even in regular investment accounts. And so if
there are changes in asset prices or if the market
is to significantly decline, to me, we are at a
(06:28):
point in time where it seems as if the market
is even more tethered to the overall well being of
the economy because we're so reliant on those higher income
consumers then we were previously. That it can just leave
you in an unstable place where you're really more subject
to the woes the ups and downs of the market
(06:48):
versus the pure brass tax income growth leading to more
stimulation of economic activity in the country. And Jared Bernstein,
who's the chair, who was the chair Council of Economic
Advisors back for Biden, had mentioned this point with that
one dollar decline in the stock market could equate to
(07:09):
two to three cents in less spend in the country,
and so that just kind of puts some context perhaps
behind perhaps what could be.
Speaker 2 (07:17):
The problem there. Yeah, I think there is that piece
of concentration. And so yeah, if you have the wealth
effect reverse itself in some meaningful way because of a
stock market that you know, the bubble explodes and suddenly
you have people feeling less wealthy, I think there's a
specific risk to that economy there. The other piece is
much more it's a lot more nuance in a much
more difficult to put your finger on exactly. But I
(07:40):
think everyone would agree that having ten percent of the
population do like half of the spending just doesn't sound
great for society. No, And I think we can you know,
all acknowledge for a second that, yeah, if you're feeling
left out of the economic moment, if you're feeling as though, hey,
(08:02):
the rest of the world is moving forward, and here
in my part of the world. I am falling behind
because my job doesn't involve AI and I don't have
a four oh one K and I don't know my home,
then you're going to be more inclined to vote for
I think significant change. And so I think about this
in its role in a democracy, and it just doesn't well,
(08:24):
I guess, let me put it this way, if you're
comfortable with the status quo, it probably doesn't spell great things.
If you have this severe K shaped economy where a
large portion of the population feels left behind. It's not
to say that they you know, I'm not saying that
we're going to have societal collapse, but I'm saying that,
you know, when people are feeling crummy about the state
of things, they're going to vote to change it, and
they might vote to change it significantly. And we saw
(08:45):
that with the mayor in New York right Like, I'm
not saying that these two things are directly tied together,
but you can kind of see how some of this
stuff plays out. And so that's that's part of the
piece that concerns me is I think there will as
a result of this, I would expect a lot less
voting for the middle and a lot more voting for
(09:08):
who do I think is going to change things the most,
And so I don't know. I think I see some
evidence of that here and there, and I wouldn't be
surprised to see more of it directly as a result
of these K shaped divergences in our in wealth, in
our society.
Speaker 4 (09:28):
Yeah, it could erode at the core belief of the country.
From an economic perspective of capitalism, it starts to erode
that belief. You know, if you'll continue to work hard,
you can continue to earn more and be able to
kind of take your place in the country from an
economic standpoint. If all of a sudden that people in
the middle or lower cautious feel like that is totally
out of reach, and some people may already feel that
(09:49):
way today, then it doesn't spell great for the overall economy.
Hard to quantify all that.
Speaker 2 (09:55):
When you feel the system isn't working for you, you vote
to change the system.
Speaker 1 (09:59):
Right.
Speaker 2 (10:00):
That's about as political as I'm willing to get on
a Friday, or generally, let's take a quick break. When
we come back, We're gonna have a little bit of
trivia for you next here on the Financial Exchange, find.
Speaker 1 (10:09):
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(10:30):
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Exchange Radio Network.
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(11:07):
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five k dot Boston. Uh. Time for trivia here on
the Financial Exchange. In earlier today, the price of bitcoin
dip below ninety five thousand dollars. In October, bitcoin hit
(11:31):
it's all time high of one hundred and twenty six
thousand dollars. So today's Treviy question is simply what year
was bitcoin created?
Speaker 2 (11:39):
Once again?
Speaker 5 (11:40):
What year was bitcoin created? Be the eighth person today
that text us at six one seven three six two
thirteen eighty five with the correct answer, and you win
a Financial Exchange Show T shirt. Once again. The eighth
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six two thirteen eighty five will win that T shirt.
(12:00):
See complete contest rules at Financial Exchange Show dot com.
Speaker 2 (12:05):
Paul we covered yesterday that Michael Burry's hedge fund was
closing down and just kind of the significance of that,
which frankly, there isn't much. It was one hundred and
fifty five million dollar hedge fund. It was not all
that substantial. And yet, man, we're getting a lot of
press about it, and I you know, Jonathan Levine from
(12:26):
Bloomberg asked the question, and there's reason to be fascinated
with Michael Burry. You know, if you're a Christian Bale fan,
there might be a reason to be fascinated based on
the twenty fifteen Big short movie. But what does it
say about markets or society right now that we're so
obsessed with the guy who made a killing off of
(12:47):
betting against the US economy? We like, well, the US,
I don't. Yeah, that's fair to say. They bet against
the state of the housing market and the stock market
leading up to the Great Financial Crisis.
Speaker 4 (12:58):
We are fascinated with a story such as that where
you have a maverick or someone who goes against the
grain and makes a big bet to go in the
other directions of everyone else and then cashes in on
it big time. It's a fascinating story to fall and
why they made the movie on it, because you just
have this one person who is just stepping out from
(13:21):
the norm. But I am so glad that Jonathan Levian
wrote this piece because in the years that have followed since,
to be clear, you know, one hundred and fifty five
million in the hedge fund world, is penat is a joke.
Is tiny, is not a very big hedge fund, And
he still gets the notoriety as if he's Warren Buffett
for short sellers out there like he is this just
(13:42):
you know, esteemed investor, and he deserves all the credit
in the world for a tremendous call back in two
thousand and eight, but there have been other instances, And
when his news story came out this week, I started
scratching my head and I'm glad Levian wrote this piece
because I said, haven't he hasn't he done this before?
Hasn't he made this call? And thankfully John Finily caught
me up to speed. Yes he has. For example, in
(14:03):
September of twenty twenty two, many listeners may remember, the
market was down about eighteen percent for the calendar year
twenty twenty two. September, we were pretty low at that point.
He was quoted as saying, no, we have not hit
a bottom yet. Technically he was right. We got to
the bottom a couple weeks later. But then from then
on out it's been an upward swing. And in fact,
in January of twenty twenty three, three or four months later,
(14:24):
he just tweeted out to his followers sell and we
didn't really know what else he was mentioning there, but
presumably he was saying, sell everything, or sell all the stocks,
and guess what the S and P five hundred has
done seventy five percent incance. So I'm so glad that
he wrote this to point out that while maybe he
has some valid points on the depreciation of some of
these capital expenditures on it, the point that.
Speaker 2 (14:46):
He has been making is that if the big companies
of today were using the accounting methods of the dot
com era, they'd be looking far worse than they are
right now.
Speaker 4 (14:56):
Yeah, they've stretched out some of these expenses to a
five year, six year schedule. We don't need to get
down that reb hill. But I'm just glad that someone
wrote the piece to call out that, Hey, tremendous call
that he made, but he set some other cars recently too,
or I don't know if you want to call him
calls or not, but cries for attention that really haven't
gone his way necessarily.
Speaker 2 (15:16):
I don't know how to interpret his moves right now.
They're certainly getting more attention, but it is important to
contextualize that it is not as though Michael Burry shorted
the Great Financial Crisis, made a bunch of money and
then was silent until now. And I feel like that's
kind of the narrative that's being created, is, oh, look out,
the guy that was only noisy one other time right
(15:37):
before the Great financial crisis is now out there talking
again about markets. It's not the case. He's been shorty
markets pretty consistently here and there for the last fifteen
years and has been wrong plenty of times. It had
been on the wrong side of trades plenty of times.
And so yeah, take the commentary with what you will.
I'm not saying his points are invalid or incorrect or inaccurate.
(15:59):
Plenty of them raise interesting questions. But take it in context,
which is this guy's been making these points for years.
He's been, you know, talking about this up and been
wrong about this market a couple of times, and his
stuff is getting a little bit more play right now.
Fewer burritos, more bargains. We've had a few kind of
(16:22):
flashes about concerns about the holiday shopping season. I covered
one a couple of weeks ago regarding corrugated box sales,
and you know, kind of a decline that we are
seeing there in the US. What are we getting in
terms of hints about the holiday shopping season, Paul, Because
I don't know from what I'm feeling right now, I'm
(16:44):
guessing low single digit increases. I'm not expecting a horrible
holiday shopping season. I think there are gonna be deals
to be had out there. I think, generally speaking, so
long as we don't see a massive uptickt unemployment, people
are going to be buying those deals, and I think
we're going to see a fairly success full holiday season
for most retailers.
Speaker 4 (17:03):
That's I'm right there with you, Mike. I'm not as
concerned as this piece lays out where they mentioned that
higher income consumers we talked about early in the show,
they're carrying a lot of weight that they're trading down
and looking for deals, or gen Z is spending less
and we've got lower income shoppers struggling. I don't have
the same takeaway or prediction that this is going to
(17:25):
mean a bleak holiday season. I still think that the
growth of three percent year over year is attainable. Last
year we saw four point three percent in terms of increase.
Speaker 2 (17:36):
I'm gonna quote a stat here that I have seen
proven wrong over and over and over again, consulting from
Alvarez and marshl I don't know anything about them. I
have not seen this company cited before. But they conducted
a consumer sentiment survey that pulled over two thousand shoppers.
They found twenty four percent of respondents earning one hundred
thousand dollars or more a year or planning to spend
less this holiday season. Every time I have heard about
(18:00):
some companies saying, yeah, you know, this is the year
that I'm gonna really pinch pennies and get my financial
house in order, it has been proving horribly wrong moments later.
And so any survey out there telling me that, yeah,
consumers are really pinching pennies this time around, and they're
worried about the state of things and they're going to
pull back their spending plans, treat it with a high
(18:22):
degree of skepticism because it's just not happened until until
they literally can't spend right, credit card gets maxed out,
they don't have a job. Those are the scenarios where
we do actually see consumer spending pull back, but so
long as there is a credit card available to max out,
(18:42):
we tend to do it. And I'll tell you, I'm
hearing a heck of a lot more repeats of the
Yolo book that trip type mentality, like we're hearing back
in twenty twenty one than I have for the last
several years. So I don't know I'm just not buying it.
Speaker 4 (18:56):
I'm someone who's pretty locked into their months a month budget.
But I've never looked back to see if the holiday spending.
Like where I've been on the holiday spending standpoint, I'm
sure it's gone up every single year, but I don't
know who would even know if they're spending less than
they were last year.
Speaker 2 (19:11):
Maybe there are some people out there, but I are
actually good at vertag. Let's take Hey, I'm good. Let's
take a quick break where we come back. We've got
some Wall Street Watch, also the trivia winner next year
on the Financial Exchange.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio every day.
It's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street Watch. A complete look at
what's moving market so far today right here on the
Financial Exchange Radio Network. Now.
Speaker 5 (19:58):
I was seeing a little bit of a reversal in
mark get since some dip buying occurring following yesterday's steep
tech selloff. That did carry over to today's open. But
right now the Dow is down by four tenths of
a percent, or two hundred and thirteen points. SMP five
hundred is now up a quarter percent or seventeen points.
NASDAC up six tenths of one percent, or one hundred
(20:19):
and thirty four points higher. Russell two thousand is up
two tenths of a percent. Tenure Treasure wheeled up one
basis point at four point one two nine percent. Crude
oil up nearly three percent higher, trading right above sixty dollars.
A barrel breaking news from Walmart this morning after the
retail giant said CEO Doug McMillan is retiring early next year.
(20:41):
McMillan has served as Walmart's CEO since twenty fourteen. John
Ferner will take over the role and has been the
CEO of Walmart's US business since twenty nineteen. He started
with Walmart in nineteen ninety three as an hourly associate.
Walmart stock is down one percent. Meanwhile, Applied Materials reported
better than expected quarterly results driven by the AI boom. However,
(21:05):
the semiconductor maker gave a disappointing outlook for next year,
including modest full year revenue guidance. Shares are now edging higher,
and according to the Wall Street Journal, Paramount, Comcast and
Netflix are preparing bids for Warner Brothers Discovery. The report
also said Warner Brothers Discovery has an initial deadline for
first round bids at or On November twentieth, Warner shares
(21:29):
are up over three percent. I'm Tucker Silva and that
is Wall Street Watch. And in the previous segment, we
asked you the trivia question what year was bitcoin created?
That would be two thousand and nine. John from Franklin,
Mass is our winner today, taking on my Financial Exchange
Show t shirt. We played trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange
(21:52):
Show dot com.
Speaker 2 (21:54):
Paul. A few stories regarding retirement kind of came across
our desk the last couple of days. One Verizon announcing
that they plan to cut about fifteen thousand jobs in
their company under the leadership of their new CEO. The
other being that the new contribution limits for four oh
one ks came out. And I know those don't seem interconnected,
(22:14):
because if you're not working for Verizon, you're likely not
contributing to retirement. But it does bring up the subject of, Okay,
what am I allowed to do and then what happens
with these accounts once I job change retire? What are
my options? How does it all work. So let's start
off with the there's a bunch of changes to retirement
plan compensation and how it works and what you're allowed
(22:36):
to do. I'm just going to mention a few of
them that are most relevant to people. One, if you
are contributing to a traditional four oh one K or
ROTH four O one K or four h three B
last year or twenty twenty five, you could do up
to twenty three thousand, five hundred. That's getting one thousand
dollars bump. You can now do twenty four thousand, five
hundred dollars in twenty twenty six if you are are
(23:00):
making more than one hundred and fifty thousand dollars And
I don't understand how they're going to do this yet,
so more to come on this subject. But if you
make more than one hundred fifty grand and your employer
is making contributions, is making matching contributions for you, then
those what was the story there? Those are required to
now go into the WROTH. I believe it is correct. Yeah, again,
(23:23):
making it so that you have to pay the taxes
upfront on some of these items your catch up contributions.
So if you're over the age of fifty, you're gonna
be able to do an extra eight thousand dollars a year,
So that's bringing your annual contribution if you're over the
age of fifty to thirty two thousand and five hundred,
and then the old super catch up if you are
(23:45):
specifically between the ages of sixty and sixty three, you
can do another eleven two hundred and fifty dollars. On
top of all of that, the traditional irays and wroth
irays also got bumps, so you're gonna be able to
do a little bit more to your IRA or to
your off. The catch up there got bumped up as well.
That's now index to inflation, or an extra eleven hundred
(24:06):
dollars if you're contributing to the irarais. But this does
affect just about everybody out there in terms of these
limits of what you can and cannot do, and so
it's an important thing to review. I would say, more
important and more complex than this are two other factors though.
Paul one I was meeting with somebody the other day.
His wife had contributed to a ROTH account when she
(24:30):
was younger. Last five years has been sitting at a
bank because they kind of left it there and didn't
know what to do with it and didn't know the rules.
What are your options with your retirement accounts if you
started one on your own and are now working for
an employee that offers one, or if you leave your employer,
like what can you do with those three?
Speaker 4 (24:49):
Three options you can usually consider. One is you can
usually for the most part, roll a former retirement plan
into your new employer plan. You have to check to
make sure it were in all cases, but for the
most part you could do that. The second option is
you could roll it into an IRA or roth IRA
to be managed at any brokerage firm out there you
(25:09):
pick your place. Or the third is you cash them out,
but you have to be very careful obviously with that.
Speaker 2 (25:14):
You can also sometimes leave them there, right, Or you could.
Speaker 4 (25:16):
Just leave it behind, right yea, I'm just talking about
alternatives to leaving it there. Yeah, Or you can cash
it out obviously, like I was mentioned, but you just
got to make sure you're aware of penalties there. But
it is important, Mike, because you alluded to instances where
you've seen accounts left behind that are not being properly
invested in. Yeah, they may be smaller sums, but it
(25:36):
is so important that they are participating in the market
and be invested. I can think of one example where
I had a client who was working at craft Hinds
in a portion of his four one K plan was
in the stock of the company. You can look up
Craft Hinds and how they've performed over the last five
six years. It hasn't been great. And we had at
least scrutinized and said, hey, ten percent of your four
(25:58):
one K is in this position, and ultimately we ended
up rolling it out and not having that exposure. But
if you had just left it there, it was a
pretty significant portion of his four to one K that
wouldn't have fared that well, or at least wouldn't have
been looked at.
Speaker 2 (26:09):
Yeah, the other piece that I frankly see often and
get worried about. Believe it or not. I know this
sounds ridiculous to people that pay close attention to their finances,
but you would not believe the number of people who
just leave their accounts behind. Then they happen to move
because you'll move a lot when you're in your twenties,
you lose track of it. You don't have the log
in anymore, and frankly, it can even become abandoned property.
(26:33):
In some cases, it does happen here and there, and
so you need to know your options. When it comes
to funding your own retirement, it gets way more complicated
than Paul and I have even laid out. You mentioned
the case of company stock within a four oh one K.
That's an entire industry on its own of specialization about
(26:54):
what to do with your company stock within your four
oh one K. There is a lot that you need
to do on the checklist, especially when you are changing
jobs when it comes to retirement. If you have questions
about it, if you are facing down retirement, or if
you're decades away from it but you're considering a job change,
talk to the folks at Armstrong so we can give
you guidance on how to handle these different big changes.
(27:17):
It affects everything from your insurance coverage to your retirement
and more. The numbers eight hundred three nine three for
zero zero one. We offer free consultations throughout New England. Again,
that number to book yours or at least request a
call back is eight hundred three nine three for zero
zero one.
Speaker 1 (27:36):
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, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (27:51):
We have to cover this story. Tucker sent it to
us yesterday during the program. But here's how Robinhood will
deliver bags of cash to your doorstep safely. That is
a huge presumption that robin Hood will in fact deliver
bags of cash to your doorsteps safely. But let's talk
(28:11):
about what's happening. I guess before I run in and
criticize why this needs to exist, because I don't believe
it does. Let's talk about what they are actually proposing
doing here. Because robin Hood does in fact want to
be able to have a service where they can deliver
you cash money to your door.
Speaker 4 (28:29):
Yes, so what their service would look like. This is
just you got to scratch your head to see how
this is going to work out. But is the same
day delivery of cash to your door for a fee
of anywhere from two ninety nine to six ninety nine,
which they say is comparable to out of network ATM
charges six ninety nine is definitely on the higher end
side of that. I haven't seen any of that out there,
(28:50):
unless you're probably talking about a casino ATM that really
would rake you over the coals. But for customers that
have over one hundred thousand assets, they would be eligible
for this program. Robinhood and go Puff are teaming up
for this, and all I can think about, what.
Speaker 2 (29:05):
Is the average age of a Robinhood customer.
Speaker 4 (29:07):
They skew much more into the thirty to forty five demographic.
Speaker 2 (29:12):
Their average age thirty five, thirty five. There we go,
What is a thirty five year old need with a
bag of cash?
Speaker 5 (29:20):
I have one dollar in my wallet.
Speaker 2 (29:21):
The only thing that I get. The only thing that
I can think of is you need to do something illegal,
so you need cash.
Speaker 4 (29:27):
There's this bagel place that I go to that's that's
cash only, And that's the only reason that I end
up taking out cash is for the weekend bagel runs
to pick up breakfast sandwiches.
Speaker 2 (29:36):
I pay the guy that I skate with for my
pickup hockey in twenty dollars bills. So once a month
I go to the bank and get a bunch of twenties,
and that's how I my pickup basket pick up literally
my only cash the same way too. Yeah, I don't
understand why this business needs to exist. The only real
reason I can think of is because Robinhood customers need
(29:59):
to do something that requires cash, which might be not legal,
and thirty five year olds don't use cash. They just don't.
I don't understand this partnership at all. I don't see
the reason for it. By the way, I don't know
about robin Hood, but at Schwab at Fidelity, you can
literally get a debit card right on your brokerage account
(30:19):
and withdraw cash from your account at any ATM. And
by the way, at least Fidelity and Schwab I know,
I'm pretty sure they still do will reimburse you the
ATM fees that you get charged. That Robinhood is comparing
these two because they don't operate their own network of
ATM so they just say screw it. And that seems
a lot safer than having some delivery guy from what company,
gopuff distribution centers. I mean, give me a wad of cash.
Speaker 5 (30:43):
I wouldn't want to do this if I was a
courier of gopuff Oh, because people would.
Speaker 4 (30:47):
Just be that's all I could think.
Speaker 5 (30:48):
People would just stake out gopuff is courier working them
to the house.
Speaker 2 (30:52):
Job.
Speaker 5 (30:53):
You're just give me all the money you got there.
Speaker 2 (30:55):
I don't know who your target customers are. I don't
think it's going to work. I don't think it's going
to ruin your business. But I see no reason for
this entire model. No one's gotta do it.
Speaker 4 (31:05):
Can you imagine a town movie version of them just
going after goprough drivers out there instead of them going
after the guy in the brinkstruck. They're like, there he is,
we got we got to go, man, we gotta go
get him.
Speaker 2 (31:17):
Is that a Corolla? We gotta take a quick break
when we come back, come back. Paula Monica from Barons
joins us next.
Speaker 1 (31:26):
Here The Financial Exchange every day from eleven to noon
non Serious XM's Business radio Channel one thirty two. Keep
it here for the latest business and financial news and
the trends on Wall Street. The Financial Exchange is now
life on Serious XM's Business radio Channel one thirty two.
Face He's the Financial Exchange Radio Network. The Financial Exchange
(31:47):
streams live on YouTube, Subscribe to our page and stay
up to date on breaking business news all morning long Face.
He's the Financial Exchange Radio Network, Ladies and gentlemen the weekend.
Speaker 5 (32:02):
This segment of the Financial Exchange is brought to you
by the US Virgin Islands Department of Tourism. Your next
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Speaker 2 (32:38):
Join us now is Paul Lamonica from Barons and Paul,
I'm glad you're here because quite honestly, all of my
attention has been sucked into the AI trade and you know,
private credit over the last several months. But it's worth
pointing out that bitcoin back in early October reached I
think an all time high of one hundred and twenty
five thousand dollars per coin has since fallen. I think
(32:59):
today was below night twenty five thousand dollars. Briefly, talk
to us about some of the big events recently in
companies surrounding crypto. Circle is one that reported earnings recently,
and you wrote about Yeah.
Speaker 3 (33:12):
Circle the stable coin company, So they are the firm
behind usd coin peg to the US dollar. Their earnings,
you know, I think, are you know, raising some concerns
that you know, this is a high growth market, but
you know, there's just a lot of hype right now.
(33:35):
And this is a company that went public a few
months ago and their lock up period has now expired.
It said in their SEC filing that two days after
they report third quarter earnings would be when certain insiders
would be able to sell shares. So I think some
people might have been getting ahead of that. But you know,
it's a little more encouraging I think for Circle than
(33:57):
other companies in the crypto a sphere, if you will,
because this is a company that generates, you know, a profit.
There are concerns about maybe the net interesting income declining
going forward if the FED is cutting short term rates
because you know, they hold a lot of reserves in
(34:18):
assets on their balance sheet tied to your short term rates.
But you know, there are some analysts that have come
out and defended the stock, and it looks like Kathy
Wood at ARC has also bought a little bit more
on the dip this week. So I wouldn't be too
worried about Circle for the long term. But you know,
crypto remains voluable. This everyone talks about it being digital gold.
(34:38):
Gold doesn't fall, rise and fall this much.
Speaker 2 (34:41):
Can you talk me a little bit about bitcoin credit cards.
I think a lot of people listening would be pretty
surprised to know they even exist. How does the bitcoin
credit card operate and who are the companies involved in it?
Speaker 3 (34:51):
Yeah, so Gemini is the primary company that people will
probably recognize. It's the firm that went public this summer,
you know, run by Cameron and Tyler Winklevoss of early
Facebook fame, and they have credit cards that allow users
to get rewards in bitcoin, ether, you know, XRP, Solana,
(35:13):
some of the other top cryptocurrencies, and the companies using
that as a way to try and get you know,
people who may want these cards to also trade crypto
on their platform. It's I think an interesting strategy. The
problem is that, like many young companies, they are spending
(35:34):
very aggressively on marketing and that's one of the things
that's eating into their profits. And you know, investors, I think,
are you know, a little worried about how much red
ink Gemini is bleeding right now? So will that company
eventually rebound, you know, as we know Facebook for example.
(35:55):
To bring it back to the Winklevoss Twins was a
company that was not a great performer initially but is
obviously now one of the world's you know, most valuable companies.
Not suggesting at all that Gemini becomes the Facebook of crypto,
but it may be too early to write.
Speaker 2 (36:10):
Them off entire So there's been a fair bit of
pressure obviously over the last couple of months. We have
grey Scale Investments, one of the big investment firms offering
you know, financial products around crypto, going public fairly soon. Here,
how big a test is it for just the crypto
market in twenty twenty five.
Speaker 3 (36:29):
Yeah, I think it's going to be very interesting to
see if Grayscale does well when they go public, because
you know, this is a top company in the you know,
the crypto trading ecosystem, but like many other companies with
ties to crypto, their financials, their revenue and profits were hit,
(36:52):
you know, in the earlier part of this year because
of all that crypto volatility. They haven't obviously reported any
numbers for fourth quarter, you have, We're still in the
midst of the fourth quarter, but you would have to
think that the big price decline of crypto in the
last couple of weeks is not going to be great
for their financials. Hence we're seeing you know, big stock
market slides for Coinbase, as well as Robinhood, which is
(37:14):
a very big in the in the crypto world as well.
So you know, I think Grayscale, who would have a
lot of demand when it goes public. But just look
at other companies. I mentioned Gemini Bullish, a crypto exchange
that went public earlier this year. Their stock has fallen
pretty sharply from its highes. So this is going to
remain an incredibly volatile part of the stock market because
(37:37):
cryptos are by their nature still incredibly lolible.
Speaker 2 (37:41):
Paul A Monica from Baron's joined us this day to
talk about the state of companies surrounding the crypto market. Paul,
appreciate you educating us this week, and we'll talk to
you again soon.
Speaker 3 (37:50):
Thanks. I'm a good weekend, guess.
Speaker 2 (37:52):
Markets in mixed territory. As we close in on the
noon hour here, NASDAC up three quarters of one percent,
the SMP up four tenths percent. Now currently off one
third of a percent. That's all the time we have
for this week. Have a fantastic weekend. We'll be right
back at it on Monday. Folks, have a great weekend.
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