September 22, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss inflation being the lesser evil. Many Americans can't buy houses, get jobs, or move in a stuck economy. The rush to return to the office is stalling. Cardboard box demand is slumping. Why that's bad news for the economy. Millennials are stuck in an old and lazy story.
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Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(00:42):
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a donation today. This is the Financial Exchange with Chuck
(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you here today, and as
we take a look around the markets as we move
into a new week, the Dow Jones Industrial Average is
up point zero six percent, or twenty nine points. The
S and P five hundred's up ten points, the Nasdaq
is up fifty eight, So anywhere from about a tenth
of a percent to a quarter percent move upwards on
(01:32):
your major indices, all them. We're down very modestly to
kick off the day, maybe quarter percent, not even in
most cases. And so again just kind of continuing this
you know, grind up that we're seeing where there's not
too much that's exciting that's happening in any of the direction.
But it's just a slow and steady grind up quarter percent,
half percent each day, and that eventually gets you into
(01:54):
some pretty good places when you're looking at equities. When
we take a look at what's going on in the
bond world today, ten year Treasury down eight tenths of
a basis point to four point one three to one percent.
The interesting thing that is worth noting last week, Mike,
what did the Federal Reserve do with the Fed funds rate?
They cut it. They did twenty five basis points. Okay,
(02:16):
because the interesting thing is that, according to Mortgage News Daily,
the national average for the thirty year fixed rate mortgage
is back up to six point three seven percent. That
is a quarter percent move up in a span of
two days from where it was on the sixteenth of September.
Speaker 3 (02:35):
So the exact same thing that happened last fall, it's
gonna be cuts rates. It's gonna be wild if we
end up seeing the exact same thing, it would be surprising.
Now it's again, it's been like three days, so let's
not overreact to this. But this is what we saw
last fall, where the Fed started cutting interest rates, Growth
came back and the ten year went back up north
of four and a half and the thirty year fixed
(02:55):
rate mortgage went back north of seven. I know that
every real estate age listening to our show right now
is like, Chuck, if that happens, I can't deal with
the two years in a row not heading into the spring.
Speaker 2 (03:06):
I can't do it. So just know that we're thinking
of you. We can't control interest rates here on the show,
but it would be not great for the spring housing
season if we saw the exact same thing happen again
two years in a row.
Speaker 3 (03:20):
Here last segment we were chatting a little bit about
the FED, and before we move on, I just want
to say thanks to listener Steve, who who emailed in
over the weekend or last week to the show with
a really thoughtful question and commentary on the FED its
role and was the reason we were in fact talking
about the FED during the last segment. So thanks Steve
(03:43):
for listening. Youtubo can text the show at six one
seven three six two thirteen eighty five and we'll do
our best to get to questions and comments as they
come in. But thanks to Steve for listening and right
now pretty thoughtful email.
Speaker 2 (03:55):
A couple other items, Oil West Text Intermediate down eighteen
cents of barrel to sixty two fifty Right now, the
TRIPAA national averageur gas prices remains at three eighteen and
four tenths of ascent. Aside from a couple of days
here and there, we have been between three ten and
three twenty a gallon for the last six months with
no major moves in either direction. Finally, Gold up another
(04:17):
fifty four to ten and ounced to thirty seven to
fifty nine and ninety cents today. That's another one and
a half percent up. It is another new all time
high for gold, and the yellow metal continues to chug
along into the fall right now. So that's going on there.
I want to talk a little bit about this piece
here from Connor Sen in Bloomberg Opinion. It's titled Inflation
(04:41):
is the Lesser Evil, and basically what it is arguing,
what Connor's arguing is, hey, until you start to see
some positive momentum developing in the housing market and in
the jobs market, the Fed's got to keep cutting rates
because we've forgotten how bad recessions are.
Speaker 3 (04:59):
Yeah, Connor is not. This is not the first time
Connor has made this argument, and it is It is
an interesting, you know, thought exercise to go through what
is worse for the country a one percent rise in
inflation or a one percent rise in unemployment? And I
think I do buy his argument that for the nation
as a whole, a one percent rise in unemployment is
(05:22):
worse than a one percent rise in inflation.
Speaker 2 (05:27):
The flip side.
Speaker 3 (05:28):
Of that coin is a one percent rise in inflation
I think is far less popular with the general public
than a one percent rise in unemployment. We've talked about
this effect as well. But when inflation goes up, every
single American feels it. Yes, when unemployment goes up, a
small fraction of Americans feel that. And so the think
(05:52):
I think the public opinion lesson we learned is if
you're trying to get re elected, if you are trying
to determine am I doing a good job from the
general public's perspective, you know, inflation is a much more
serious problem than a slight increase in unemployment. But if
we're going to genuinely grade things on, hey, what's worse
for the nation, what's better for the nation, and what
would be more important to combat? I tend to agree
(06:13):
with Connor that higher unemployment is a bigger societal issue.
Speaker 2 (06:16):
The counterpoint to what you just said in terms of
everyone feels higher inflation, not everyone feels higher unemployment. Not
everyone feels higher unemployment directly, but they do feel indirectly
in that Hey, when unemployment goes up, if you are
looking for a new job, hard to find one, hard
to find one, and at your own jobs, your manager
comes in and says, hey, great job Mike this year.
(06:38):
Really appreciate you. You know, with all the work you know,
it's been a tough year. You know, here's a firm handshake.
We've had to let a lot of people go. We
don't have room in the budget for raises this year.
Speaker 3 (06:47):
Here's a subscription to the Jelly Month of the Month
club rather than your usual annual bonus.
Speaker 2 (06:52):
Exactly.
Speaker 3 (06:53):
Yes, so, but I think still, you know the the narrative,
and I think the real evidence of the last five
years has been Wow, we have pretty good tools to
combat higher unemployment and make people feel like they are
at least dealing with it in different ways via unemployment
(07:14):
payments and especially during COVID, all sorts of extra benefits
that we're paid out. But when it comes to inflation,
it's just, hey, this is what it is, and even
my wage might be keeping pace with that, it still
feels really bad.
Speaker 2 (07:28):
Now. The other counter to this is everyone always thinks, hey,
I'm a really good worker. I'm gonna be the one
who escapes any problems with headcount during a recession, and unfortunately,
like that can't always be the case. Even good workers
lose jobs during a recession. Yeah, so I.
Speaker 3 (07:48):
Ask the question. I think no, I answered my own question,
what's worse for society? A one percent bump up in
unemployment or inflation. And that's that's to me an interesting question.
What's worse for societ? I'd to check though, a ten
percent bump in unemployment or a ten percent bump in inflation.
So you're saying, does this change the higher it gets?
Speaker 2 (08:07):
Okay, So let me just I want to make sure
that I'm just thinking of this the right way. Yeah,
would it be worse if we had fourteen percent unemployment
right now or thirteen percent inflation? Right? Probably fourteen percent unemployment?
Speaker 3 (08:27):
Yeah, I guess it holds true regardless of the uh,
the percentage increase that you're talking about.
Speaker 2 (08:36):
I'm not saying either a good but it's just like,
fourteen percent unemployment means that if you know seven people,
one of them is unemployed. Yeah, and if look, the
average person knows more. If you know seventy people, seven
of them are unemployed and not you know, retired, like
(08:56):
if you know seventy working people, Yeah, I mean like that.
That's also there are two things that tend to be
really destabilizing to society. Really high inflation is one, and
really high unemployment is the other. Right, because it's either, hey,
we're really upset because you're making us all pay too
much for this, or hey, we're all sitting around here,
(09:18):
we got nothing to do. Screw you guys. You know,
like neither of these are good. Yeah, and so yeah.
Speaker 3 (09:26):
It was just a thought exercise for me, like, is
there a threshold by which inflation becomes the bigger problem?
I don't think there is. I think unemployment for society
is always the bigger issue.
Speaker 2 (09:38):
What's the ratio? What's the magic number? Then? Where if
we say, okay, is a ten percent rise in unemployment
or fifteen percent rise in inflation works? I think one
point five might be around there, because if you asked
me fourteen percent unemployment or twenty percent inflation, I might
(09:59):
go with the unemployment side. If you asked me ten
percent unemployment or thirteen percent inflation, I might go with
the unemployment. I mean, thirteen percent inflation is one and
a half times as bad as it got three years ago.
Speaker 3 (10:18):
Okay, So interesting thought exercise about our own feelings about this. Yes,
does the FED share any of our feelings on this?
Or do they wait them?
Speaker 2 (10:25):
No, they don't have feelings.
Speaker 3 (10:27):
If you were to tie down FED members on how
they vote, do they wait these two equally, would they
agree unemployment is a worse problem for society than inflation?
Speaker 2 (10:35):
Their actions tell you that they think that, yeah, because
they tend to agree with this, At least in J.
Powell's FED. They have always aired on the more dubvish
side because they have not wanted to cause a recession,
whereas there have been ample instances where they have not been,
in my opinion, hawkish enough to stem the tide on inflation. Right,
(11:00):
we should start our own central bank MIC. I feel
like the existing one might have some problems with that.
We could anti trust sure, yeah, you know, yeah, I
don't think we'd have a case or funding and one
does not simply anti trust. I think there's another verb
I need to put in there, but no, just yeah
throughout buzzwords. Okay, democracy, Let's take a quick break when
(11:25):
we return, Let's do a little bit of trivia, and
then we want to talk return to office or the
housing market. Let's go at the housing market. Okay, let's
talk housing when we return.
Speaker 1 (11:37):
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Speaker 4 (12:14):
All right time for sure to hear in the Financial
Exchange and on this day. Back in nineteen ninety four,
Friends premiered on NBC, Lisa kudro was pulling double duty
for NBC when the show premiered. She was appearing as
Phoebe on Friends and as her twin sister Ursula on
another popular NBC sitcom. I didn't know this. This startled
(12:37):
me when I read this.
Speaker 2 (12:38):
Today.
Speaker 4 (12:39):
Trivia question is which NBC sitcom was Lisa Kudro on
simultaneously as Friends? Once again, which NBC sitcom was Lisa
Kudro on simultaneously as Friends? Uh? Be the fifth person
today to text us at six one seven three six
two thirteen eighty five with the correct answer, and you
(13:01):
win a Financial Exchange Show T shirt once again. The
fifth correct response to Texas to the number six one
seven three six, two thirteen eighty five will win that
T shirt. See complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (13:15):
Peater from Washington Post many Americans can't buy homes, get jobs,
or move in this stuck economy. And this is kind
of what we're hearing from a lot of people. Pretty wild.
Speaker 3 (13:28):
The chart on the percentage of US population that's moved
in the past year, we're down at something below twelve
and a half percent as of just twenty twenty two.
COVID didn't count, but yeah, we were up in the
high teens in the two thousands and twenty tens decade,
and we've dropped pretty precipitously.
Speaker 2 (13:50):
Around twelve percent. Yeah, it's anything you attribute that to
other than housing costs. I mean, there was a Have
we all just woken up to the fact that moving sucks? No, No,
we haven't. I don't think that's it.
Speaker 3 (14:02):
I think remote work maybe plays a bigger role today,
so that can account for some fractions.
Speaker 2 (14:09):
Like half of this happened two thirds of this happened
before twenty twenty, right, you know, So was there this
huge rise in remote work from twenty six twenty eighteen?
Not really? I think, Well, let's actually no, no, no, no.
Speaker 3 (14:25):
I'm just thinking like how people did business has changed
a lot over that time, but it changed a lot
more severely in twenty twenty, So I tend to agree.
I don't think that can be attributed too much. I mean,
the Great financial crisis occurred in there and that forced
a whole bunch of people to relocate. But again that
dropped after eight. I think this is largely an affordability question, right.
(14:47):
It dropped in O eight because people lost jobs and
couldn't afford to move, and then it's dropped since then
based on housing prices being through the roof.
Speaker 2 (14:55):
Let me just put out some alternative hypothesis and you
can tell me if there's something to the more if
they're dumb. Demographically we've gotten older, sure buy it. Does
that have an impact because baby boomers saying, no, I
just want to stay here, I'm not moving anymore, and
so there's you know, greater percentage of people in that
demo evans that could be part of it. Other things
(15:17):
when we look at this from the perspective of hey,
who typically does the most moving people in their twenties. Right, Again,
it's a lot easier to move when you have no
stuff than when you're taking the dog and the grill
and all the stuff with you. Right. Sure, if we
look at people in their twenties right now, are there
(15:41):
changes in their moving habits? Not even talking about buying,
but just again, this is moving. Is there something fundamentally
different there? And I'm just trying to think of Look,
when I graduated from school, you know, I might have
you know, thirty people that I knew from my class
that we're working in the city I was living in,
and a bunch of them would move every year, and
(16:02):
you get new ones coming in. Is there anything that's
disrupted that the tooth?
Speaker 3 (16:07):
The only thing that I can think that's changed compared
to a decade and a half or two decades ago
is the financial piece of it. Those students are laying
with more debt, and the cost of renting an apartment
is a lot higher, even in when expressed as a
percentage of your income. Like all of those things are true,
(16:28):
the college debt and the college cost compared to what
you can expect to earn after college is higher as
a percentage, as is the rent.
Speaker 2 (16:36):
As a percentage of that entry level compensation. So both
of those I think go back to the first argument
of affordability. What about business consolidation And what I mean
by this is if you look at, you know, the
largest employers in the country, they take up a bigger
share of the overall employment picture than they did previously.
(16:56):
Is there anything too, Hey, I wud it used to
be that I would have We've had to move across
the country to work at Amazon. Now they've got an
office in Boston. I can do it here. It could
be done, like you can tell me it's dumb, like
it's fine. You could see something I would be I'm
trying to think it through.
Speaker 3 (17:17):
Hey, is there a bigger concentration and therefore no need
to relocate? I don't know that there is much there
because the overall if we were going to see an
effect there, I would expect less overall employment because there's
not as many competitors. There's just no need to hire
quite as many people. There's not as much duplication of efforts,
and we're not seeing that. We're seeing a total higher
(17:39):
level of employment. So I'm not sure. I'm not tryed
by that one.
Speaker 2 (17:42):
What about the businesses that we work in? In two
thousand and six, there were fourteen million people working in
manufacturing today there are twelve million. In two thousand and six,
there were four million people working in warehousing. Today it's
six million. There were twenty two million on various state, federal,
(18:05):
and city payrolls. Now there's twenty three million. Leisure hospitality
was thirteen million, now it's seventeen. Is there anything in
terms of the mix of jobs that is making it
harder to move because people don't have to move as
much to find work.
Speaker 3 (18:19):
There could be something there. I'm not sure what would
make you move more frequently. As a manufacturer, you've got
to go where the factory is, you do again, I
point to that as mainly a remote work factor. You know,
how many people do you? I was talking to one
just last Monday. I worked for forty years and investments
used to fly all over the place and relocate for
(18:41):
that next consultancy job. Today those same customers are perfectly
comfortable doing all of those meetings via zoom.
Speaker 2 (18:50):
So what I do know is that when we look
at what makes an economy dynamic, it is you can
kind of like, you know, this is a circular logic
and everything, but like the very definition of dynamic is
like you know, in motion able to change. When people
aren't moving either jobs or locations, things get a little
(19:10):
bit more stuck and it's not good for the economy.
We talk about things like, you know, money velocity. Hey,
if your money's not turning over, if you're not you know,
seeing it move throughout the economy, that's not good. It's
the same with people. Yeah to a. I mean, you
don't want like too much. We all need a little stability,
but you need a little bit of you need the
catfish in there to you know, move things around a
(19:32):
little bit. Quick break. When we return, we got Wall
Street Watch.
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 markets so far today right here on the
Financial Exchange Radio Network.
Speaker 2 (19:58):
The markets are.
Speaker 4 (19:58):
A little changed, edging higher to kick off a new
week after the Fed reduce interest rates last week. Investors
are also weighing the loom of a potential or the
looming thread of a potential government shutdown after a bill
was rejected on Friday, and later this week, we'll get
another look at inflation when the personal consumption expenditures Price
(20:20):
Index is unveiled right now. The Dow is edging higher
about thirty two points higher almost a tenth of a percent.
SMP five hundred is up eleven points, nearly two cents
of one percent, and the Nasdaq is up nearly three
tenths of one percent, or fifty eight points higher. RUSS
two thousand is mostly flat. Tenure treasureel flat as well,
(20:41):
at four point one four five percent, and crude oil
down about a third of a percent, rating at sixty
two dollars forty five cents a barrel. Some merger news
in the real estate space this morning after Compass agreed
to acquire Anywhere real Estate for one point six billion dollars.
Compass down about eleven percent, while Anywhere real Estate stock
(21:04):
is surging about fifty two percent. Meanwhile, Pfizer agreed to
pay up to seven point three billion dollars for anti
obesity drug maker met Sarah. Pfizer stock is climbing over
two percent elsewhere. The Washington Post is reporting that the
Trump administration plans to announce today that pregnant woman's use
(21:24):
of tailanol is potentially linked to autism. Shares in tailan
all parent company ken View is thinking about seven percent.
Fox up about one percent after President Trump yesterday said
the Murdochs are likely to be involved in the deal
to save TikTok. In the US, Morgan Stanley upgraded Applied
Materials to overweight from equal way, where the bank noted
(21:47):
that the chip maker trades at an attractive valuation relative
to peers. Applied Material shares are up about three percent.
I'm Tucker Silva and that is Wall Street Watch. And
in the previous segment, we asked you trivia question which
NBC sitcom was Lisa kudro on simultaneously as friends that
would be mad about you. Our winner today was Tara
(22:10):
from north Brookfield, mass Taking on the Financial Exchange Show. Teacher.
Congrats to Tara. We play trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange Show.
Speaker 2 (22:21):
Dot com Return to Office seems like it's been in
the news just about everywhere in the last year or so.
My running theory is, hey, this is how companies are
trying to get people to quit so they don't have
to do layoffs.
Speaker 3 (22:34):
Whether it's JP, Morgan, Amazon, plenty of them have been
either eliminating their remote work policies or reducing.
Speaker 2 (22:42):
Them in meaningful ways here and there. The interesting thing
is that according to the data that is out there,
you're not really seeing a net increase in corporate attendance.
So what gives Yeah, I don't know, I would have.
Speaker 3 (23:02):
I guess the answer to me is, yeah, you've had
some big public announcements, but either they didn't have teeth
and they're not enforcing them, or you know, Microsoft is
a big employer, but they're just not enough to move
the needle on the national story here.
Speaker 2 (23:19):
Your take, no One. Actually, it's the combination of if
you've been remote for any extended period of time, a
lot of those people don't want to go back in
the office full time. So they say, Okay, I'm not
going back with this company. I'm just going to go
find another remote role, even though there aren't as many,
(23:39):
and the ones where hey, I need to work at
this company because like I have no other options for
this reason or another. I think a lot of them
are working things out with their managers. As you kind
of mentioned it. It's no different from you remember all
the concern three four years ago when people were looking
at like commercial real estate and they were like, oh,
(23:59):
this is going to be a huge problem, like all
these empty buildings, Like, no one's gonna pay these loans,
YadA YadA, take down hedge funds. Yeah, no one wants
to take the bath on it. So they just negotiate
the deals out and they say, Okay, kick the can
down the road. You know, fine, you can keep paying
whatever you're paying for another X number of years and
we'll deal with it later. It's probably the same with
(24:20):
a lot of managers where hey, if you've got you know,
a high performing employee who corporate saying hey, you got
to get them back in the office, right, and they're like, no,
I'm gonna walk. They're probably like, hey, all right, can
you come back in like one day a week and we'll,
you know, we'll figure it out, like it'll be okay.
No one wants to do anything stupid, right. Yeah. It
(24:42):
kind of feels like that to me.
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Speaker 2 (25:49):
Cardboard box demand is slumping, and this is something that's
not usually good news for any economy. And the interesting
thing on cardboard boxes is a lot of times when
we think about cardboard boxes, we think about one company,
and one company only Amazon Amazon. We're like, oh, that
must be bad for Amazon. In fact, most cardboard boxes
(26:10):
aren't actually used for shipping stuff, and you'll be like, okay,
chuck late, what are they used for? The answer is groceries.
You're thinking corrugated cardboard versus cereal boxes, cookie boxes, you know,
all that stuff. The vast majority of cardboard boxes are groceries.
So the question that I think is worth asking is, hey,
(26:31):
does we cardboard box demand say something specifically about Americans
and what they are buying and shipping or does it
say something about how they're eating? Habits may be changing,
and I don't know. What I do know is that
overall cardboard box demand is declining by low single digits,
which is pretty big in the broad scheme of things.
(26:52):
I mean, you think about how resilient some of this
stuff tends to be, and that's kind of a big deal.
But I can't help but think about, Hey, one of
the biggest trends in the last couple of years is
these weight loss drugs or zempic and things like that.
Are people shifting away from buying prepackaged snacks the way
(27:13):
they used to? It is that where a lot of
the drop is happening. Is it on the corrugated side
where it's happening. I don't know, because we don't really
get into it. But these numbers are pretty stunning.
Speaker 3 (27:25):
So boxmits overall have fallen from the record highs reached
during the pandemic, No kidding, makes sense to the lowest
level since twenty sixteen. Okay, you know, I could buy
that though it has been a changing economy, you have
people not feeling so good about their financial future. Okay,
I can buy that. We have a lot of other
statistics that are comparable to twenty sixteen. On a per
(27:47):
capita basis, box shipments per American are down more than
twenty percent from nineteen ninety nine, and box shipments specifically,
I suppose that does still include the cereal box too. Yeah,
that's like, it's not like not to end user. Correct,
it's it's still just total boxes. But the lowest per
(28:09):
capita since ninety nine to me is shocking because Amazon
didn't exist in the same way it does now at
ninety nine.
Speaker 2 (28:18):
No, but how much more efficient are they at packing now?
And this is the other thing that I get into overall,
when you look at what boxes are measured, and they're
measured in square feet, and so if you are seeing
the same number of items being shipped in much less
square footage of box. I mean, how many times in
(28:38):
like two thousand and seven did you order a new
TV remote and it came in a box the size
of the Chrysler building.
Speaker 3 (28:44):
All right, So yeah, here's here's my answer. Then, year
over year declines in box shipments is a tell about
the economy overall. Twenty year changes in box shipments tells
you nothing.
Speaker 2 (28:57):
Correct the twenty year because that's like saying, well, we're
burning less, you know, aviation fuel than we used to. Yes,
that's because generally each year we get like three percent
more efficient through newer engines and things like that.
Speaker 3 (29:09):
But year over year changes can tell you something. It
could be, it could be I'm not saying it'll tell
you that it's a weak economy, but I do think
it can tell you something that American behavior is changing,
and generally, I think my conclusion would be they seem
to be buying fewer things. Although no, that doesn't really
(29:29):
work out in retail sales day.
Speaker 2 (29:30):
Look at the This is why I'm saying, like, I
don't know what this means. It means something, but I
don't know what it means. Bad news for creators of
cardboard boxes. Yes, provisionally, the only thing we can declare correct,
Like when you put a melting ice cube in a
cardboard box, nothing good happens. So I can tell you
(29:55):
like that that business is a problem right now. But
do I know what it says about the US economy?
I really don't. I'm kind of confused about it because.
Speaker 3 (30:08):
You can see why you would have bet on the
other side of this trade, by the way, right totally
you are like, Oh, I guess if you had to
be buying more and more stuff. If you had asked
me in twenty fifteen, where is demand for cardboard boxes
going to go up? There would only be one answer,
and it'd be way up, and it would have been
dead wrong.
Speaker 2 (30:25):
Yeah. So I don't know what this means, but it
means something, which should also be the model of our show.
I don't know what this means, but it means something. Yeah. Yeah,
put it on a shirt. We'll do it up. Let's
take a quick break. When we come back, it's time
for stack Roulette.
Speaker 1 (30:46):
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(31:08):
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Speaker 2 (32:06):
Michael, what have you for? Stack roulettes. Millennials are stuck
in an old lazy story.
Speaker 3 (32:10):
Here's the piece from Bloomberg, basically making the point that
the narrative about millennials where they couldn't afford anything, they
were bad with money and everything was stacked against them,
but mostly that they were lazy and bad with money
has once again proven to be Maybe it was true,
(32:32):
but it hasn't affected their ability to move on in life.
Here are some statistics about the average American millennial these days.
Fifty five percent own homes. They're now nearly a third
richer than baby boomers were at a similar point in
their lives. Millennials own a dollar thirty five for every
(32:53):
dollar boomers did at the same age Millennial. I guess
that's not inflation adjustice is inflation suitlation adjusted?
Speaker 2 (33:01):
Okay?
Speaker 3 (33:01):
Millennial households average net worth around ninety thousand dollars in
twenty sixteen, now estimated to be around four times that size.
So again, what we've basically found is all these doomsday stories.
Speaker 2 (33:14):
About how millennials were going to.
Speaker 3 (33:17):
Completely shake everything up from demographics standpoint and wealth perspective
have been flipped on their head once again. And I
found this one interesting because I was just at a
conference and one of the pieces that was being talked
about was gen z and how different they are and
how they don't like to stay in the same job
for long, And I just.
Speaker 2 (33:36):
Wait a minute, is that is that the millennials music
I hear.
Speaker 3 (33:39):
I took a step back and I said, guys, this
is the exact same thing they said about my generation.
Guess what, there are a bunch of twenty something year
olds that don't have families, don't have big paying jobs,
and don't own homies. Yet give it a decade, and
I bet they're going to want to stay in jobs
for longer, get stability from benefits, and completely contradict everything
(34:01):
that you're talking about saying about them right now.
Speaker 2 (34:03):
Because this is how it always is, always how it is.
Speaker 3 (34:06):
So I would just encourage everyone to be very suspicious
of any publication telling you that this generation's different. In
some they are different. Of course they're different. They listen
to different music, they wear different clothes. Even those things
repeat themselves. But when they get to their mid thirties
and start having kids and careers, I'm betting that they
(34:26):
look a lot like millennial generation did, and then Gen
X before that and Boomers before them.
Speaker 2 (34:32):
Oh you mean that the boomers that were all the
hippies go into woodstock, right? You know? Like this is
the thing, is the case. Twenty three year olds are
going to twenty three year old, that's what they're gonna do.
And if you're just gonna like see every new generation
of twenty three year olds coming through and be like, Oh,
they're lazy and they can't do any work, and they're not,
(34:53):
you know, serious people. None of us were serious people
at like twenty two, not consistently at least, I mean,
most of us pretended to be for a while. But
like when you're twenty two, a lot of dumb stuff
is done by you.
Speaker 3 (35:09):
I think there are some legitimate truths and differences between
these generations. Like I've seen some pretty compelling stuff like, oh,
you know, baby boomers are far more reliant, for example,
on in person institutions that can visit in person, whereas
you know, younger generations don't put as much of an
(35:29):
emphasis on that sort of thing. And so there are
some differences that I think are out there, but.
Speaker 2 (35:35):
Even that's just mistaking. Like the difference is in the means,
not in what's actually being done. And like what I
mean by that is every generation has the stuff that's
like kind of sacred to them, is like the things
that they remember from when they were like twenty three,
because like those are like your formative experiences, and so
(35:56):
you think about it. And just as an example, when
I talk to you know, my parents about when when
they were growing up, they'd be like, oh, yeah, I
like to use the phone. Like man, when we were
first young, like we had party lines and you know,
you were you know, have to make sure that no
one was on those. And then finally it was just
okay using the house phone, and you'd use the house
phone the whole time. For you, me and Tucker, we
still remember dial up internet and if you were on
(36:17):
the dial up internet, no one could call the house
and that was like the thing. And the way that
you'd communicate wasn't on the phone. It was their Aol
instant messenger, and now it's snapchat and TikTok and like,
the tools evolve, but ultimately you're doing the same thing.
You're just communicating or doing something through a different way.
So I don't think there's any real fundamental difference between generations.
(36:41):
It's just they use whatever tools are new at the time.
Except for those gen xers. Those guys are screwed up.
Who see. That's the gen X joke is that no
one remembers the gen xers and all the ones listening.
Oh juggle, you remembered us. I did. I appreciate you here,
Thanks for listening. I also want to say one thing
about millennials, and this this piece here, it's talking about
(37:02):
you know how well they've done financially. Now, fascinating chart
that my buddy Brent Donnelly put together. He's my favorite, Brent,
and the S and P five hundred it's ratio on Friday,
from its twenty year low got above ten x. The
S and B bottomed at six sixty six back in
two thousand and nine, and it went over sixty six
(37:23):
hundred in the last couple of days. It's only the
second time in history that the S and P five
hundred has ten x within a twenty year window. The
only other time was the tech bubble again, when it's
fifteen x from its low. Okay, so you're saying we
got a ways to go. We could have like another
(37:44):
fifty percent from here, who knows. But the point that
I make millennials have been helped out by a generational
market over the last fifteen years where all stock and
really even if it's just putting stuff into a four
oh one k, you've been helped by that and so
the thing that I think you do, you have to
be cognitant of markets. Typically don't do that every fifteen
(38:04):
to twenty years. You need to think about, Okay, if
gen Z is behind the eight ball, they're probably not
going to be assisted by the same thing. Let's take
a quick break for the entire rest of the day,
and we're going to see you tomorrow on the financial Exchange.
It'll be great.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
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Armstrong and Money Matters Radio do not compensate each other
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Exchange with Chuck Zada and Mike Armstrong, your exclusive look
at business and financial news affecting your day, your city,
(00:42):
your world. Stay informed and up to date about economic
and market trends, plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
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heroes by visiting dav five K dot Boston and making
a donation today. This is the Financial Exchange with Chuck
(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you here today, and as
we take a look around the markets as we move
into a new week, the Dow Jones Industrial Average is
up point zero six percent, or twenty nine points. The
S and P five hundred's up ten points, the Nasdaq
is up fifty eight, So anywhere from about a tenth
of a percent to a quarter percent move upwards on
(01:32):
your major indices, all them. We're down very modestly to
kick off the day, maybe quarter percent, not even in
most cases. And so again just kind of continuing this
you know, grind up that we're seeing where there's not
too much that's exciting that's happening in any of the direction.
But it's just a slow and steady grind up quarter percent,
half percent each day, and that eventually gets you into
(01:54):
some pretty good places when you're looking at equities. When
we take a look at what's going on in the
bond world today, ten year Treasury down eight tenths of
a basis point to four point one three to one percent.
The interesting thing that is worth noting last week, Mike,
what did the Federal Reserve do with the Fed funds rate?
They cut it. They did twenty five basis points. Okay,
(02:16):
because the interesting thing is that, according to Mortgage News Daily,
the national average for the thirty year fixed rate mortgage
is back up to six point three seven percent. That
is a quarter percent move up in a span of
two days from where it was on the sixteenth of September.
Speaker 3 (02:35):
So the exact same thing that happened last fall, it's
gonna be cuts rates. It's gonna be wild if we
end up seeing the exact same thing, it would be surprising.
Now it's again, it's been like three days, so let's
not overreact to this. But this is what we saw
last fall, where the Fed started cutting interest rates, Growth
came back and the ten year went back up north
of four and a half and the thirty year fixed
(02:55):
rate mortgage went back north of seven. I know that
every real estate age listening to our show right now
is like, Chuck, if that happens, I can't deal with
the two years in a row not heading into the spring.
Speaker 2 (03:06):
I can't do it. So just know that we're thinking
of you. We can't control interest rates here on the show,
but it would be not great for the spring housing
season if we saw the exact same thing happen again
two years in a row.
Speaker 3 (03:20):
Here last segment we were chatting a little bit about
the FED, and before we move on, I just want
to say thanks to listener Steve, who who emailed in
over the weekend or last week to the show with
a really thoughtful question and commentary on the FED its
role and was the reason we were in fact talking
about the FED during the last segment. So thanks Steve
(03:43):
for listening. Youtubo can text the show at six one
seven three six two thirteen eighty five and we'll do
our best to get to questions and comments as they
come in. But thanks to Steve for listening and right
now pretty thoughtful email.
Speaker 2 (03:55):
A couple other items, Oil West Text Intermediate down eighteen
cents of barrel to sixty two fifty Right now, the
TRIPAA national averageur gas prices remains at three eighteen and
four tenths of ascent. Aside from a couple of days
here and there, we have been between three ten and
three twenty a gallon for the last six months with
no major moves in either direction. Finally, Gold up another
(04:17):
fifty four to ten and ounced to thirty seven to
fifty nine and ninety cents today. That's another one and
a half percent up. It is another new all time
high for gold, and the yellow metal continues to chug
along into the fall right now. So that's going on there.
I want to talk a little bit about this piece
here from Connor Sen in Bloomberg Opinion. It's titled Inflation
(04:41):
is the Lesser Evil, and basically what it is arguing,
what Connor's arguing is, hey, until you start to see
some positive momentum developing in the housing market and in
the jobs market, the Fed's got to keep cutting rates
because we've forgotten how bad recessions are.
Speaker 3 (04:59):
Yeah, Connor is not. This is not the first time
Connor has made this argument, and it is It is
an interesting, you know, thought exercise to go through what
is worse for the country a one percent rise in
inflation or a one percent rise in unemployment? And I
think I do buy his argument that for the nation
as a whole, a one percent rise in unemployment is
(05:22):
worse than a one percent rise in inflation.
Speaker 2 (05:27):
The flip side.
Speaker 3 (05:28):
Of that coin is a one percent rise in inflation
I think is far less popular with the general public
than a one percent rise in unemployment. We've talked about
this effect as well. But when inflation goes up, every
single American feels it. Yes, when unemployment goes up, a
small fraction of Americans feel that. And so the think
(05:52):
I think the public opinion lesson we learned is if
you're trying to get re elected, if you are trying
to determine am I doing a good job from the
general public's perspective, you know, inflation is a much more
serious problem than a slight increase in unemployment. But if
we're going to genuinely grade things on, hey, what's worse
for the nation, what's better for the nation, and what
would be more important to combat? I tend to agree
(06:13):
with Connor that higher unemployment is a bigger societal issue.
Speaker 2 (06:16):
The counterpoint to what you just said in terms of
everyone feels higher inflation, not everyone feels higher unemployment. Not
everyone feels higher unemployment directly, but they do feel indirectly
in that Hey, when unemployment goes up, if you are
looking for a new job, hard to find one, hard
to find one, and at your own jobs, your manager
comes in and says, hey, great job Mike this year.
(06:38):
Really appreciate you. You know, with all the work you know,
it's been a tough year. You know, here's a firm handshake.
We've had to let a lot of people go. We
don't have room in the budget for raises this year.
Speaker 3 (06:47):
Here's a subscription to the Jelly Month of the Month
club rather than your usual annual bonus.
Speaker 2 (06:52):
Exactly.
Speaker 3 (06:53):
Yes, so, but I think still, you know the the narrative,
and I think the real evidence of the last five
years has been Wow, we have pretty good tools to
combat higher unemployment and make people feel like they are
at least dealing with it in different ways via unemployment
(07:14):
payments and especially during COVID, all sorts of extra benefits
that we're paid out. But when it comes to inflation,
it's just, hey, this is what it is, and even
my wage might be keeping pace with that, it still
feels really bad.
Speaker 2 (07:28):
Now. The other counter to this is everyone always thinks, hey,
I'm a really good worker. I'm gonna be the one
who escapes any problems with headcount during a recession, and unfortunately,
like that can't always be the case. Even good workers
lose jobs during a recession. Yeah, so I.
Speaker 3 (07:48):
Ask the question. I think no, I answered my own question,
what's worse for society? A one percent bump up in
unemployment or inflation. And that's that's to me an interesting question.
What's worse for societ? I'd to check though, a ten
percent bump in unemployment or a ten percent bump in inflation.
So you're saying, does this change the higher it gets?
Speaker 2 (08:07):
Okay, So let me just I want to make sure
that I'm just thinking of this the right way. Yeah,
would it be worse if we had fourteen percent unemployment
right now or thirteen percent inflation? Right? Probably fourteen percent unemployment?
Speaker 3 (08:27):
Yeah, I guess it holds true regardless of the uh,
the percentage increase that you're talking about.
Speaker 2 (08:36):
I'm not saying either a good but it's just like,
fourteen percent unemployment means that if you know seven people,
one of them is unemployed. Yeah, and if look, the
average person knows more. If you know seventy people, seven
of them are unemployed and not you know, retired, like
(08:56):
if you know seventy working people, Yeah, I mean like that.
That's also there are two things that tend to be
really destabilizing to society. Really high inflation is one, and
really high unemployment is the other. Right, because it's either, hey,
we're really upset because you're making us all pay too
much for this, or hey, we're all sitting around here,
(09:18):
we got nothing to do. Screw you guys. You know,
like neither of these are good. Yeah, and so yeah.
Speaker 3 (09:26):
It was just a thought exercise for me, like, is
there a threshold by which inflation becomes the bigger problem?
I don't think there is. I think unemployment for society
is always the bigger issue.
Speaker 2 (09:38):
What's the ratio? What's the magic number? Then? Where if
we say, okay, is a ten percent rise in unemployment
or fifteen percent rise in inflation works? I think one
point five might be around there, because if you asked
me fourteen percent unemployment or twenty percent inflation, I might
(09:59):
go with the unemployment side. If you asked me ten
percent unemployment or thirteen percent inflation, I might go with
the unemployment. I mean, thirteen percent inflation is one and
a half times as bad as it got three years ago.
Speaker 3 (10:18):
Okay, So interesting thought exercise about our own feelings about this. Yes,
does the FED share any of our feelings on this?
Or do they wait them?
Speaker 2 (10:25):
No, they don't have feelings.
Speaker 3 (10:27):
If you were to tie down FED members on how
they vote, do they wait these two equally, would they
agree unemployment is a worse problem for society than inflation?
Speaker 2 (10:35):
Their actions tell you that they think that, yeah, because
they tend to agree with this, At least in J.
Powell's FED. They have always aired on the more dubvish
side because they have not wanted to cause a recession,
whereas there have been ample instances where they have not been,
in my opinion, hawkish enough to stem the tide on inflation. Right,
(11:00):
we should start our own central bank MIC. I feel
like the existing one might have some problems with that.
We could anti trust sure, yeah, you know, yeah, I
don't think we'd have a case or funding and one
does not simply anti trust. I think there's another verb
I need to put in there, but no, just yeah
throughout buzzwords. Okay, democracy, Let's take a quick break when
(11:25):
we return, Let's do a little bit of trivia, and
then we want to talk return to office or the
housing market. Let's go at the housing market. Okay, let's
talk housing when we return.
Speaker 1 (11:37):
Finding daily interviews in full shows of the Financial Exchange
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This is the Financial Exchange Radio Network. The Financial Exchange
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(11:58):
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Exchange Radio Network.
Speaker 4 (12:14):
All right time for sure to hear in the Financial
Exchange and on this day. Back in nineteen ninety four,
Friends premiered on NBC, Lisa kudro was pulling double duty
for NBC when the show premiered. She was appearing as
Phoebe on Friends and as her twin sister Ursula on
another popular NBC sitcom. I didn't know this. This startled
(12:37):
me when I read this.
Speaker 2 (12:38):
Today.
Speaker 4 (12:39):
Trivia question is which NBC sitcom was Lisa Kudro on
simultaneously as Friends? Once again, which NBC sitcom was Lisa
Kudro on simultaneously as Friends? Uh? Be the fifth person
today to text us at six one seven three six
two thirteen eighty five with the correct answer, and you
(13:01):
win a Financial Exchange Show T shirt once again. The
fifth correct response to Texas to the number six one
seven three six, two thirteen eighty five will win that
T shirt. See complete contest rules at Financial Exchange Show
dot com.
Speaker 2 (13:15):
Peater from Washington Post many Americans can't buy homes, get jobs,
or move in this stuck economy. And this is kind
of what we're hearing from a lot of people. Pretty wild.
Speaker 3 (13:28):
The chart on the percentage of US population that's moved
in the past year, we're down at something below twelve
and a half percent as of just twenty twenty two.
COVID didn't count, but yeah, we were up in the
high teens in the two thousands and twenty tens decade,
and we've dropped pretty precipitously.
Speaker 2 (13:50):
Around twelve percent. Yeah, it's anything you attribute that to
other than housing costs. I mean, there was a Have
we all just woken up to the fact that moving sucks? No, No,
we haven't. I don't think that's it.
Speaker 3 (14:02):
I think remote work maybe plays a bigger role today,
so that can account for some fractions.
Speaker 2 (14:09):
Like half of this happened two thirds of this happened
before twenty twenty, right, you know, So was there this
huge rise in remote work from twenty six twenty eighteen?
Not really? I think, Well, let's actually no, no, no, no.
Speaker 3 (14:25):
I'm just thinking like how people did business has changed
a lot over that time, but it changed a lot
more severely in twenty twenty, So I tend to agree.
I don't think that can be attributed too much. I mean,
the Great financial crisis occurred in there and that forced
a whole bunch of people to relocate. But again that
dropped after eight. I think this is largely an affordability question, right.
(14:47):
It dropped in O eight because people lost jobs and
couldn't afford to move, and then it's dropped since then
based on housing prices being through the roof.
Speaker 2 (14:55):
Let me just put out some alternative hypothesis and you
can tell me if there's something to the more if
they're dumb. Demographically we've gotten older, sure buy it. Does
that have an impact because baby boomers saying, no, I
just want to stay here, I'm not moving anymore, and
so there's you know, greater percentage of people in that
demo evans that could be part of it. Other things
(15:17):
when we look at this from the perspective of hey,
who typically does the most moving people in their twenties. Right, Again,
it's a lot easier to move when you have no
stuff than when you're taking the dog and the grill
and all the stuff with you. Right. Sure, if we
look at people in their twenties right now, are there
(15:41):
changes in their moving habits? Not even talking about buying,
but just again, this is moving. Is there something fundamentally
different there? And I'm just trying to think of Look,
when I graduated from school, you know, I might have
you know, thirty people that I knew from my class
that we're working in the city I was living in,
and a bunch of them would move every year, and
(16:02):
you get new ones coming in. Is there anything that's
disrupted that the tooth?
Speaker 3 (16:07):
The only thing that I can think that's changed compared
to a decade and a half or two decades ago
is the financial piece of it. Those students are laying
with more debt, and the cost of renting an apartment
is a lot higher, even in when expressed as a
percentage of your income. Like all of those things are true,
(16:28):
the college debt and the college cost compared to what
you can expect to earn after college is higher as
a percentage, as is the rent.
Speaker 2 (16:36):
As a percentage of that entry level compensation. So both
of those I think go back to the first argument
of affordability. What about business consolidation And what I mean
by this is if you look at, you know, the
largest employers in the country, they take up a bigger
share of the overall employment picture than they did previously.
(16:56):
Is there anything too, Hey, I wud it used to
be that I would have We've had to move across
the country to work at Amazon. Now they've got an
office in Boston. I can do it here. It could
be done, like you can tell me it's dumb, like
it's fine. You could see something I would be I'm
trying to think it through.
Speaker 3 (17:17):
Hey, is there a bigger concentration and therefore no need
to relocate? I don't know that there is much there
because the overall if we were going to see an
effect there, I would expect less overall employment because there's
not as many competitors. There's just no need to hire
quite as many people. There's not as much duplication of efforts,
and we're not seeing that. We're seeing a total higher
(17:39):
level of employment. So I'm not sure. I'm not tryed
by that one.
Speaker 2 (17:42):
What about the businesses that we work in? In two
thousand and six, there were fourteen million people working in
manufacturing today there are twelve million. In two thousand and six,
there were four million people working in warehousing. Today it's
six million. There were twenty two million on various state, federal,
(18:05):
and city payrolls. Now there's twenty three million. Leisure hospitality
was thirteen million, now it's seventeen. Is there anything in
terms of the mix of jobs that is making it
harder to move because people don't have to move as
much to find work.
Speaker 3 (18:19):
There could be something there. I'm not sure what would
make you move more frequently. As a manufacturer, you've got
to go where the factory is, you do again, I
point to that as mainly a remote work factor. You know,
how many people do you? I was talking to one
just last Monday. I worked for forty years and investments
used to fly all over the place and relocate for
(18:41):
that next consultancy job. Today those same customers are perfectly
comfortable doing all of those meetings via zoom.
Speaker 2 (18:50):
So what I do know is that when we look
at what makes an economy dynamic, it is you can
kind of like, you know, this is a circular logic
and everything, but like the very definition of dynamic is
like you know, in motion able to change. When people
aren't moving either jobs or locations, things get a little
(19:10):
bit more stuck and it's not good for the economy.
We talk about things like, you know, money velocity. Hey,
if your money's not turning over, if you're not you know,
seeing it move throughout the economy, that's not good. It's
the same with people. Yeah to a. I mean, you
don't want like too much. We all need a little stability,
but you need a little bit of you need the
catfish in there to you know, move things around a
(19:32):
little bit. Quick break. When we return, we got Wall
Street Watch.
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 markets so far today right here on the
Financial Exchange Radio Network.
Speaker 2 (19:58):
The markets are.
Speaker 4 (19:58):
A little changed, edging higher to kick off a new
week after the Fed reduce interest rates last week. Investors
are also weighing the loom of a potential or the
looming thread of a potential government shutdown after a bill
was rejected on Friday, and later this week, we'll get
another look at inflation when the personal consumption expenditures Price
(20:20):
Index is unveiled right now. The Dow is edging higher
about thirty two points higher almost a tenth of a percent.
SMP five hundred is up eleven points, nearly two cents
of one percent, and the Nasdaq is up nearly three
tenths of one percent, or fifty eight points higher. RUSS
two thousand is mostly flat. Tenure treasureel flat as well,
(20:41):
at four point one four five percent, and crude oil
down about a third of a percent, rating at sixty
two dollars forty five cents a barrel. Some merger news
in the real estate space this morning after Compass agreed
to acquire Anywhere real Estate for one point six billion dollars.
Compass down about eleven percent, while Anywhere real Estate stock
(21:04):
is surging about fifty two percent. Meanwhile, Pfizer agreed to
pay up to seven point three billion dollars for anti
obesity drug maker met Sarah. Pfizer stock is climbing over
two percent elsewhere. The Washington Post is reporting that the
Trump administration plans to announce today that pregnant woman's use
(21:24):
of tailanol is potentially linked to autism. Shares in tailan
all parent company ken View is thinking about seven percent.
Fox up about one percent after President Trump yesterday said
the Murdochs are likely to be involved in the deal
to save TikTok. In the US, Morgan Stanley upgraded Applied
Materials to overweight from equal way, where the bank noted
(21:47):
that the chip maker trades at an attractive valuation relative
to peers. Applied Material shares are up about three percent.
I'm Tucker Silva and that is Wall Street Watch. And
in the previous segment, we asked you trivia question which
NBC sitcom was Lisa kudro on simultaneously as friends that
would be mad about you. Our winner today was Tara
(22:10):
from north Brookfield, mass Taking on the Financial Exchange Show. Teacher.
Congrats to Tara. We play trivia every day here in
the Financial Exchange. See complete contest rules at Financial Exchange Show.
Speaker 2 (22:21):
Dot com Return to Office seems like it's been in
the news just about everywhere in the last year or so.
My running theory is, hey, this is how companies are
trying to get people to quit so they don't have
to do layoffs.
Speaker 3 (22:34):
Whether it's JP, Morgan, Amazon, plenty of them have been
either eliminating their remote work policies or reducing.
Speaker 2 (22:42):
Them in meaningful ways here and there. The interesting thing
is that according to the data that is out there,
you're not really seeing a net increase in corporate attendance.
So what gives Yeah, I don't know, I would have.
Speaker 3 (23:02):
I guess the answer to me is, yeah, you've had
some big public announcements, but either they didn't have teeth
and they're not enforcing them, or you know, Microsoft is
a big employer, but they're just not enough to move
the needle on the national story here.
Speaker 2 (23:19):
Your take, no One. Actually, it's the combination of if
you've been remote for any extended period of time, a
lot of those people don't want to go back in
the office full time. So they say, Okay, I'm not
going back with this company. I'm just going to go
find another remote role, even though there aren't as many,
(23:39):
and the ones where hey, I need to work at
this company because like I have no other options for
this reason or another. I think a lot of them
are working things out with their managers. As you kind
of mentioned it. It's no different from you remember all
the concern three four years ago when people were looking
at like commercial real estate and they were like, oh,
(23:59):
this is going to be a huge problem, like all
these empty buildings, Like, no one's gonna pay these loans,
YadA YadA, take down hedge funds. Yeah, no one wants
to take the bath on it. So they just negotiate
the deals out and they say, Okay, kick the can
down the road. You know, fine, you can keep paying
whatever you're paying for another X number of years and
we'll deal with it later. It's probably the same with
(24:20):
a lot of managers where hey, if you've got you know,
a high performing employee who corporate saying hey, you got
to get them back in the office, right, and they're like, no,
I'm gonna walk. They're probably like, hey, all right, can
you come back in like one day a week and we'll,
you know, we'll figure it out, like it'll be okay.
No one wants to do anything stupid, right. Yeah. It
(24:42):
kind of feels like that to me.
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Speaker 2 (25:49):
Cardboard box demand is slumping, and this is something that's
not usually good news for any economy. And the interesting
thing on cardboard boxes is a lot of times when
we think about cardboard boxes, we think about one company,
and one company only Amazon Amazon. We're like, oh, that
must be bad for Amazon. In fact, most cardboard boxes
(26:10):
aren't actually used for shipping stuff, and you'll be like, okay,
chuck late, what are they used for? The answer is groceries.
You're thinking corrugated cardboard versus cereal boxes, cookie boxes, you know,
all that stuff. The vast majority of cardboard boxes are groceries.
So the question that I think is worth asking is, hey,
(26:31):
does we cardboard box demand say something specifically about Americans
and what they are buying and shipping or does it
say something about how they're eating? Habits may be changing,
and I don't know. What I do know is that
overall cardboard box demand is declining by low single digits,
which is pretty big in the broad scheme of things.
(26:52):
I mean, you think about how resilient some of this
stuff tends to be, and that's kind of a big deal.
But I can't help but think about, Hey, one of
the biggest trends in the last couple of years is
these weight loss drugs or zempic and things like that.
Are people shifting away from buying prepackaged snacks the way
(27:13):
they used to? It is that where a lot of
the drop is happening. Is it on the corrugated side
where it's happening. I don't know, because we don't really
get into it. But these numbers are pretty stunning.
Speaker 3 (27:25):
So boxmits overall have fallen from the record highs reached
during the pandemic, No kidding, makes sense to the lowest
level since twenty sixteen. Okay, you know, I could buy
that though it has been a changing economy, you have
people not feeling so good about their financial future. Okay,
I can buy that. We have a lot of other
statistics that are comparable to twenty sixteen. On a per
(27:47):
capita basis, box shipments per American are down more than
twenty percent from nineteen ninety nine, and box shipments specifically,
I suppose that does still include the cereal box too. Yeah,
that's like, it's not like not to end user. Correct,
it's it's still just total boxes. But the lowest per
(28:09):
capita since ninety nine to me is shocking because Amazon
didn't exist in the same way it does now at
ninety nine.
Speaker 2 (28:18):
No, but how much more efficient are they at packing now?
And this is the other thing that I get into overall,
when you look at what boxes are measured, and they're
measured in square feet, and so if you are seeing
the same number of items being shipped in much less
square footage of box. I mean, how many times in
(28:38):
like two thousand and seven did you order a new
TV remote and it came in a box the size
of the Chrysler building.
Speaker 3 (28:44):
All right, So yeah, here's here's my answer. Then, year
over year declines in box shipments is a tell about
the economy overall. Twenty year changes in box shipments tells
you nothing.
Speaker 2 (28:57):
Correct the twenty year because that's like saying, well, we're
burning less, you know, aviation fuel than we used to. Yes,
that's because generally each year we get like three percent
more efficient through newer engines and things like that.
Speaker 3 (29:09):
But year over year changes can tell you something. It
could be, it could be I'm not saying it'll tell
you that it's a weak economy, but I do think
it can tell you something that American behavior is changing,
and generally, I think my conclusion would be they seem
to be buying fewer things. Although no, that doesn't really
(29:29):
work out in retail sales day.
Speaker 2 (29:30):
Look at the This is why I'm saying, like, I
don't know what this means. It means something, but I
don't know what it means. Bad news for creators of
cardboard boxes. Yes, provisionally, the only thing we can declare correct,
Like when you put a melting ice cube in a
cardboard box, nothing good happens. So I can tell you
(29:55):
like that that business is a problem right now. But
do I know what it says about the US economy?
I really don't. I'm kind of confused about it because.
Speaker 3 (30:08):
You can see why you would have bet on the
other side of this trade, by the way, right totally
you are like, Oh, I guess if you had to
be buying more and more stuff. If you had asked
me in twenty fifteen, where is demand for cardboard boxes
going to go up? There would only be one answer,
and it'd be way up, and it would have been
dead wrong.
Speaker 2 (30:25):
Yeah. So I don't know what this means, but it
means something, which should also be the model of our show.
I don't know what this means, but it means something. Yeah. Yeah,
put it on a shirt. We'll do it up. Let's
take a quick break. When we come back, it's time
for stack Roulette.
Speaker 1 (30:46):
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(31:08):
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Speaker 2 (32:06):
Michael, what have you for? Stack roulettes. Millennials are stuck
in an old lazy story.
Speaker 3 (32:10):
Here's the piece from Bloomberg, basically making the point that
the narrative about millennials where they couldn't afford anything, they
were bad with money and everything was stacked against them,
but mostly that they were lazy and bad with money
has once again proven to be Maybe it was true,
(32:32):
but it hasn't affected their ability to move on in life.
Here are some statistics about the average American millennial these days.
Fifty five percent own homes. They're now nearly a third
richer than baby boomers were at a similar point in
their lives. Millennials own a dollar thirty five for every
(32:53):
dollar boomers did at the same age Millennial. I guess
that's not inflation adjustice is inflation suitlation adjusted?
Speaker 2 (33:01):
Okay?
Speaker 3 (33:01):
Millennial households average net worth around ninety thousand dollars in
twenty sixteen, now estimated to be around four times that size.
So again, what we've basically found is all these doomsday stories.
Speaker 2 (33:14):
About how millennials were going to.
Speaker 3 (33:17):
Completely shake everything up from demographics standpoint and wealth perspective
have been flipped on their head once again. And I
found this one interesting because I was just at a
conference and one of the pieces that was being talked
about was gen z and how different they are and
how they don't like to stay in the same job
for long, And I just.
Speaker 2 (33:36):
Wait a minute, is that is that the millennials music
I hear.
Speaker 3 (33:39):
I took a step back and I said, guys, this
is the exact same thing they said about my generation.
Guess what, there are a bunch of twenty something year
olds that don't have families, don't have big paying jobs,
and don't own homies. Yet give it a decade, and
I bet they're going to want to stay in jobs
for longer, get stability from benefits, and completely contradict everything
(34:01):
that you're talking about saying about them right now.
Speaker 2 (34:03):
Because this is how it always is, always how it is.
Speaker 3 (34:06):
So I would just encourage everyone to be very suspicious
of any publication telling you that this generation's different. In
some they are different. Of course they're different. They listen
to different music, they wear different clothes. Even those things
repeat themselves. But when they get to their mid thirties
and start having kids and careers, I'm betting that they
(34:26):
look a lot like millennial generation did, and then Gen
X before that and Boomers before them.
Speaker 2 (34:32):
Oh you mean that the boomers that were all the
hippies go into woodstock, right? You know? Like this is
the thing, is the case. Twenty three year olds are
going to twenty three year old, that's what they're gonna do.
And if you're just gonna like see every new generation
of twenty three year olds coming through and be like, Oh,
they're lazy and they can't do any work, and they're not,
(34:53):
you know, serious people. None of us were serious people
at like twenty two, not consistently at least, I mean,
most of us pretended to be for a while. But
like when you're twenty two, a lot of dumb stuff
is done by you.
Speaker 3 (35:09):
I think there are some legitimate truths and differences between
these generations. Like I've seen some pretty compelling stuff like, oh,
you know, baby boomers are far more reliant, for example,
on in person institutions that can visit in person, whereas
you know, younger generations don't put as much of an
(35:29):
emphasis on that sort of thing. And so there are
some differences that I think are out there, but.
Speaker 2 (35:35):
Even that's just mistaking. Like the difference is in the means,
not in what's actually being done. And like what I
mean by that is every generation has the stuff that's
like kind of sacred to them, is like the things
that they remember from when they were like twenty three,
because like those are like your formative experiences, and so
(35:56):
you think about it. And just as an example, when
I talk to you know, my parents about when when
they were growing up, they'd be like, oh, yeah, I
like to use the phone. Like man, when we were
first young, like we had party lines and you know,
you were you know, have to make sure that no
one was on those. And then finally it was just
okay using the house phone, and you'd use the house
phone the whole time. For you, me and Tucker, we
still remember dial up internet and if you were on
(36:17):
the dial up internet, no one could call the house
and that was like the thing. And the way that
you'd communicate wasn't on the phone. It was their Aol
instant messenger, and now it's snapchat and TikTok and like,
the tools evolve, but ultimately you're doing the same thing.
You're just communicating or doing something through a different way.
So I don't think there's any real fundamental difference between generations.
(36:41):
It's just they use whatever tools are new at the time.
Except for those gen xers. Those guys are screwed up.
Who see. That's the gen X joke is that no
one remembers the gen xers and all the ones listening.
Oh juggle, you remembered us. I did. I appreciate you here,
Thanks for listening. I also want to say one thing
about millennials, and this this piece here, it's talking about
(37:02):
you know how well they've done financially. Now, fascinating chart
that my buddy Brent Donnelly put together. He's my favorite, Brent,
and the S and P five hundred it's ratio on Friday,
from its twenty year low got above ten x. The
S and B bottomed at six sixty six back in
two thousand and nine, and it went over sixty six
(37:23):
hundred in the last couple of days. It's only the
second time in history that the S and P five
hundred has ten x within a twenty year window. The
only other time was the tech bubble again, when it's
fifteen x from its low. Okay, so you're saying we
got a ways to go. We could have like another
(37:44):
fifty percent from here, who knows. But the point that
I make millennials have been helped out by a generational
market over the last fifteen years where all stock and
really even if it's just putting stuff into a four
oh one k, you've been helped by that and so
the thing that I think you do, you have to
be cognitant of markets. Typically don't do that every fifteen
(38:04):
to twenty years. You need to think about, Okay, if
gen Z is behind the eight ball, they're probably not
going to be assisted by the same thing. Let's take
a quick break for the entire rest of the day,
and we're going to see you tomorrow on the financial Exchange.
It'll be great.
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