September 22, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss Trump's $100,000 visa targets a $280B India success story. Will the $100,000 visa help American workers? American colleges are going all out to hold to international students. Why it might be time to repeal the Fed's dual mandate.
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Episode Transcript
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Speaker 1 (00:00):
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(00:20):
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(00:42):
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(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:15):
Chuck Mike Tucker with you, kicking off another week on
the Financial Exchange, and quite honestly, not gonna be a
huge week. It's gonna be on a scale from one
to ten, like a four and a half, maybe a five.
Speaker 3 (01:27):
So if you got a.
Speaker 2 (01:28):
Little bit of you know, overseating to do out in
the yard, if you're starting to get the leaves all
bagged up because hey, the trees are dumping them in
mid September, since we haven't gotten any rain in eight months,
this is the.
Speaker 3 (01:42):
Week to do it.
Speaker 2 (01:43):
Not next week has been very pretty it has been,
it has been, But this week we do still have
a few things that we're gonna be paying attention to.
Most notably, Jay Powell is gonna be speaking on Tuesday.
Always interesting to hear what he has to say, and
obviously it can be a market moving event. Thursday, we're
going to be getting some existing home sales data as
(02:04):
well as jobless claims for the week. And then on
Friday we're gonna be getting PCE data, including the PCE
Price Index, which is the Fed's preferred measure of inflation,
and so that always has the potential to be a
market moving event, though at this point everyone's so darn
gooded backing into it because of the inputs from PPI
(02:24):
and CPI that it's been a while since we've had
a real PCE surprise where we've been like, oh, like,
where did that come from?
Speaker 3 (02:32):
So I think.
Speaker 2 (02:33):
Overall, from a data perspective, not necessarily the most exciting week,
but a couple interesting things that I always like to
point out. First, it is the week after an options expiration,
which tends to potentially jar things loose a little bit,
so you've got the potential for a little bit of
volatility that could be out there. Other things that you
(02:56):
pay attention to. Last week, a bunch of corporate tax
paid's we're doing so you had a bunch of money
flowing into the US Treasury. Does that disrupt things from
a liquidity perspective again, kind of mechanical under the surface,
things that you know may or may not matter and
probably aren't the most exciting, but still have the potential
to contribute to, you know, a week that's out there.
(03:16):
And then when we look on the earning side of things,
a few companies that I think are worth paying attention to.
Micron Technology reports earnings tomorrow, so we'll see what they say.
It's been kind of a disappointing quarter for semiconductor earnings,
but the sector as a whole has been fine, just
because it continues to chug along somehow. And then on
(03:37):
Thursday we got Costco reporting earnings. What do they tell
us about how households are spending and what they're seeing
in terms of trends. I think that'll be an interesting
one too. You know, get some information on as well.
In terms of unscheduled stuff. There's been plenty too.
Speaker 4 (03:53):
Obviously over the weekend we had the news on the
H one B visas, which I was having dinner with
people on Saturday night who affected there, so a lot
of busy weekend emails going around there. You do have
a loose what a Friday news dump? I know you've
got a Friday news dump. You've got a very seemingly
proposed TikTok deal that may be going forward sooner than
(04:15):
anybody anticipated. And then you also have some pieces on
looming government shutdowns, which will again it's Monday, so give
it some time. That'll come to the very last second.
But we are staring down a potential government shutdown here
over the coming week or so, not to mention, Supreme
(04:35):
Court is reviewing a number of cases from the Trump administration,
and there's other stuff working its way through the courts
as well. So we have the potential for more unscheduled
news throughout the next couple weeks.
Speaker 2 (04:44):
And this is before we even get to the possibility
of yet another Argentinian default. That is far from certain,
and certainly the Argentinians are trying to manage things the
best they can. But gosh, if you haven't been watching
what was going on in Argentinian bonds over the last
month or so, there's been, you know, some renewed interest,
(05:07):
especially in the last week.
Speaker 3 (05:09):
When was the last one? Are we that overdue for
Argentinian default? It's been more than like eighteen months?
Speaker 2 (05:16):
Hang on, give me just one second. I need to uh, okay,
let's see. No, that one was from two thousand and five.
Hang on, I gotta see when these have these have
happened here? Let's see. Oh, this is just an article
called Endless Defaults the Curious Case of Argentina. That sounds
(05:37):
kind of fun.
Speaker 4 (05:38):
Google's AI was able to give me one, yep, one
series of them between five and twenty ten, it was.
Speaker 2 (05:46):
Really one that was in multiple stages.
Speaker 4 (05:49):
Twenty fourteen, I don't remember, the country is declared in
default by the ISDA because it could not pay holdout creditors.
So it looks like that might have been looming from
the twenty.
Speaker 2 (05:58):
Yeah, I don't remember that one.
Speaker 3 (06:00):
Twenty nineteen they failed to make payments.
Speaker 4 (06:02):
I do remember twenty nineteen, and then twenty twenty the
again defaulted and restructured on their international five years.
Speaker 3 (06:07):
I mean, yeah, yeah, they're overdue.
Speaker 2 (06:10):
It's it sounds like we might be getting there. So
there's a lot that is in the air. And this
is even before you get to some of the other
stuff that a lot of this is geopolitically related. You
had Korea over the weekend. South Korea come out, you know,
and basically say, hey, we're not really sure that we're
gonna be able to do everything that you're you know,
(06:31):
the US is trying to push for in UH its
trade deal, and so it seems like things are kind
of just coming to a head with a lot of
geopolitical items, not in terms of any like conflicts or
anything like that, but just hey, a lot of financial
and economic items that you know, people have been watching
(06:53):
for anywhere from you know, Argentina is one that Malay
was elected what about a year and a half ago,
I think, and had a really success for first year,
but they're just running up against the balance of payment problems.
That is not something that anyone in the US would
probably understand because the United States has not had to
deal with a balance of payments issue. In god, I
can't even think of the last time that you would
(07:15):
you have that item come up. So you know, this
is one that's been brewing for maybe a year and
a half. That again, six to eight months ago, things
looked like they were humming along pretty well, and then
over the course of really the last like eight weeks,
it's kind of just taken a turn for the worse
in Argentina. So you've got that that's been brewing for
a year and a half. Again, the situation on trade
(07:36):
with South Korea has been brewing for the last six
months or so. The H one B visa thing just
popped up now, But we've been talking about H one
b's as long as I've been on this show, so
I mean you're talking more than a decade at this point,
So it's a lot of international items that I think,
you know, maybe coming to a head this fall, and
(07:57):
that can have, you know, some interesting repercussions in markets.
But to this point, there's been nothing that's been able
to knock markets off course in any meaningful fashion. Since
mid April, We've had a few times here there where
I've been like, oh, that's kind of interesting. Maybe something
No hasn't metter crickets. It has not mattered. Let's talk
about this H one B situation. What happened on Friday,
(08:19):
Why are companies reacting the way they are, and what
does it actually mean?
Speaker 4 (08:23):
So big announcement from the White House on Friday that
was a little bit ambiguous at first.
Speaker 3 (08:27):
It basically said that.
Speaker 4 (08:29):
Every H one B visa holder will or the company
sponsoring them will be responsible for one hundred thousand dollars
fee going forward. That was at least initially interpreted as
We're going to have to all come up with one
hundred thousand dollars for anyone that is not yet in
the country as of Sunday.
Speaker 2 (08:48):
So there was like you had emails going out being like, hey, please,
if you are overseas, get back into the US right now.
Speaker 3 (08:57):
We're trugging the visa.
Speaker 4 (08:59):
Yeah, and so you had these calls going out on
Friday evening across the country, sorry, across the globe. From
these are largely big tech players, big fintech players that
employ a lot of these some research H one B
visas as well, but hey, figure this out, get back
into the country, find the next flight as quickly as
you can. The Trump administration then put out revised guide
(09:22):
and say, no, this one hundred thousand dollars cost is
only going to be for the new visa applications going forward.
And so where this leaves things is that there is
going to be, assuming this sticks, a tremendous amount of
change going on with H one B visa holders over
the course of the next twelve months. But I think
we kind of have to start with the framework of
(09:43):
who hires these people, why do they use this visa product,
and what has it really become these days, because it has,
to your points, Chuck, been something we've talked about at
length of the last decade and has faced significant changes.
You know, first under Trump administration one point oh, those
changes were really seen during the Biden administration, and then
(10:06):
you're now seeing this new change come twenty twenty five.
Speaker 2 (10:10):
So when we look at who is predominantly in terms
of because here's the thing, there's two different groups that
I think are worth talking about when it comes to
H one B visas. Not two different groups, it's really
two ways that you can break this down. There are
the new visas that are issued each year, which are
(10:31):
typically kept I think it's sixty five thousand, but there's
an additional expansion of up to another twenty thousand beyond that,
so you have about eighty five thousand new ones that
could potentially be issued in any particular year.
Speaker 3 (10:43):
Yeah.
Speaker 4 (10:44):
The extra twenty five I think are four PhDs or
master's degree or higher.
Speaker 2 (10:49):
So it's certain qualifications there are though, remember these are
visas that can be rolled over and renewed on an
annual basis. The estimates that are out there, because we
don't have you know, full, you know, active day to
day government statistics on this, estimated that there's around three
quarters of a million active H one B visas that
(11:11):
are currently out there. And beyond that, those three quarters
of a million also have about five hundred to six
hundred thousand dependents that they have brought with them into
the United States. So you're talking probably somewhere in the
range of like one point two to one point three
million people that are living in the US on H
one B visas, with about three quarters of a million
(11:33):
people that are actively working on them and the rest
are you know, spouses or children that are part of
the family.
Speaker 4 (11:40):
Prior to twenty twenty one, the way this all worked
is you would have to file as a company. You'd
have to file this full petition with a whole bunch
of documentation to apply for NH one B visa. The
fees cost somewhere between five and twenty five thousand dollars
per worker, meaning they're just there are still a lot
of applications, but it was a pretty high bar to
(12:02):
do that. The rules then changed at the end of
twenty nineteen, completely changing how this all works, and effectively
they reduce the registration fee to ten bucks, and they
basically said it's going to be a lottery, and if
you win the lottery, then you have to give us
all the documentation and all the fees.
Speaker 2 (12:19):
Yes, so when we talk about, you know where this goes,
the big questions are that are still out there, who
exactly is going to pay this fee? Are there ways
around it? Is it going to be every year? Like
there still are things that are needing to be clarified.
We get some of that over the weekend. Let's take
a quick break and let's discuss more because this is
(12:40):
again kind of a big potential shift that we could
be seeing here, and let's talk about exactly what we
know to this point.
Speaker 1 (12:49):
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(13:11):
Exchange Radio Network.
Speaker 2 (13:22):
All right, let's continue our visa talk. This is related
to immigration, not credit cards. And basically this one hundred
thousand dollars fee on H one B visas. The administration
did clarify over the weekend that this would be just
for new visas, not for renewals. Yes, that still was
enough to spare a bunch of people, you know, a
(13:42):
whole bunch of chaos over the weekend because you know,
no one knew what was going on until I think
late Saturday is when the clarification was issued on this.
In terms of who who's in the US on H
one B visas, we don't have, you know, exactly up
to date data on this, but Pew Research went out
(14:02):
and did a study on it. They found that seventy
three percent of H one B workers who were approved
in twenty twenty three were born in India, so three
quarters of them approximately are from India, and a majority
of approvals each year since twenty ten has gone to
workers born in India. China is the second most common
(14:24):
with about twelve percent. No other birthplace accounted for even
two percent of H one B workers. So couple different
ways to read this, and quite honestly, I think there's
only one that really matters. This is between the United
States and India in terms of money.
Speaker 3 (14:47):
Which is also why I'm not sure that this sticks, right.
Speaker 4 (14:50):
I Mean, there's no reason that I can think of
to say that this isn't a negotiating point with US
in India, right, I wouldn't this be on the table
should they get to the bargaining table when it comes
to tariffs and all.
Speaker 3 (15:05):
Other sorts of things.
Speaker 4 (15:07):
The way that these visa programs have I am not
creating the wheel on this. I found a pretty good
piece by Michael Green, who's a chief strategist and portfolio
manager for a Simplify asset management.
Speaker 3 (15:21):
And he pointed a few things out.
Speaker 4 (15:23):
One since that change in twenty nineteen, the system has
kind of changed in terms of how it works and
what it's become now is, at least in his opinion,
a really easy opportunity for staffing firms to flood the
system with a bunch of applications and then put these
people into roles at Google, at Microsoft, at these other
(15:46):
companies to basically offer wages at a far lower rate
than what you'd be able to hire for the same
thing in the United States.
Speaker 2 (15:52):
Which is why a lot of people that have looked
at the H one B visa program have said, Look,
if you're going to allow for these unlimited applications with NOSE,
don't make it a lottery system. Make it an auction
system where it's Hey, if you are Google and you're
bidding on a role, if you don't put enough up
as a salary for that role, you're going to get
(16:14):
outbid and not get the worker.
Speaker 4 (16:16):
In twenty twenty one, there were two hundred and sixty
nine thousand applications in twenty twenty four, there's seven hundred
fifty nine thousand.
Speaker 2 (16:23):
It's a big increase.
Speaker 4 (16:25):
So what you seem to be seeing here are big
consultancy firms getting this, putting the people into the workplaces
at a subsidized rate, and then kind of pocketing the
difference here. And those are the ones that are really
hurt by all of this is those consulting staffing firms
that placed a lot of these folks into those roles. Yes,
(16:46):
Google and Microsoft are going to struggle, but quite honestly.
Speaker 2 (16:49):
They can figure out how to pay the extra cash.
Speaker 4 (16:51):
They've got the deep pockets to be able to do this.
These are not American farmers who are struggling going to
figure out, Hey, if I have to hire an American
worker to plant the field, how much more am I
going to have to pay?
Speaker 2 (17:00):
So an extra couple hundred grand for each of these
employees is a rounding error on Microsoft's bottom line, right.
Speaker 4 (17:07):
And you know, Michael pointed out a few things. One,
he pulled the average hourly earnings of all employees in
information in information roles and looked at them since twenty
twenty and he pointed out what he considers to be
a statistically significant drop in incomes in that specific area
that he at least in part, blames on this. I'm
sure you could blame it on other things too, But again,
(17:30):
I just find this interesting, and I tend to agree, Hey,
a rather than a lottery based system, a system where
you just go to the highest bidder, I think makes
some sense in the absence of that, I don't know.
I'll be interested to see how this plays out. I
(17:50):
do think that there are gives and takes with this.
There will be companies that say, Okay, great, I'm just
going to go and employ that India worker Indian worker
in India. But they might also create a more efficient
system with all this. That said, I also think there's
a distinct possibility that that we are back to the
twenty nineteen rules in a couple of years if we
(18:11):
get a trade deal done with India.
Speaker 2 (18:14):
I'm trying to make heads heads or tails of the
whole US India relationship right now, good luck, and I'm
kind of struggling with it because as recently as like
April or may you know, Vice President Vance had just
headed over to India, said, you know, had a very
successful meeting in India with the Indian government, and it
(18:36):
seems like things were really moving along in a productive fashion.
I don't know what happened between kind of May and
early August, but something did, yeah, and I don't know
what because things have not been good between the two
countries since then. I'm not saying that they've been like bad,
(18:58):
but things have been taking step back as far as
what you would think of as constructive progress in a
number of areas.
Speaker 4 (19:05):
And this is another shot across that bow because again,
this is predominantly an issue that affects Indian workers.
Speaker 3 (19:13):
It is I'm an Indian company.
Speaker 2 (19:14):
I'm just trying to figure out what is needed in
order to get across that hump and get a resolution there.
Let's take a quick break. When we return, we got
Wall Street Watch and they were talking college after this.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
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 5 (20:01):
Markets are a little changed to kick off a new
week after the FED reduced interest rates last week. Investors
are also weighing the looming thread of a potential government
shutdown after a bill was rejected on Friday, and later
this week we'll get another measure on the inflation front
when the Personal Consumption Expenditures Price Index is posted. Right now,
(20:23):
the Dow is down by a tenth of a percent
or sixty eight points. SMP five hundred edging three points higher,
NASDAC up nearly two tenths of one percent or forty
two points. Russell two thousand is down about a tenth
of a percent. Ten year treasureal flat and is currently
at four point one four to one percent. Crude oiled
(20:44):
down about seven tenths of one percent, rating at sixty
two dollars in twenty three 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. COMPA shares are down about nine percent, while
Anywhere real Estate stock is surging about fifty nine percent. Meanwhile,
(21:09):
Pfizer agreed to pay up to seven point three billion
dollars for anti obesity drug maker Metzerah. Pfizer stock is
up over two percent on that news. Elsewhere Washington Post
is reporting that the Trump administration plans to announce today
that pregnant woman's use of Thailand Hall is potentially linked
to autism. Shares in tailentholl parent company ken View are
(21:32):
sinking nearly six percent on that news. Fox is up
by about two 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 weight, where the bank noted that
the chip maker trades at an attractive valuation relative to peers.
(21:53):
Applied Material shares are up about three percent, and Warren
Buffett's Berkshire Hathaway completely exited its investment in Chinese ev
maker BYD. Berkshire made its initial purchase seventeen years ago
at the urging of Charlie Munger. I'm Tucker Silva, and
that is Wall Street Watch.
Speaker 4 (22:12):
Can we just say anywhere real estate is a bad
name for a real estate company.
Speaker 3 (22:18):
One, it's just not creative. Two what's it is creative?
What's real estate all about? Location? Location? That's why it's creative.
Speaker 2 (22:28):
It's also if you do want to make a case
it's horrible because if you try to run a search
engine for it, you just get yeah, all kinds of
random stuff, which is why I think that here's one
thing that I will say. You know how we rip
on companies for coming up with names that like don't
make any sense.
Speaker 3 (22:45):
Yeah, it's better than putting a plus next to every product.
Speaker 2 (22:49):
Or just like using a word as your thinking. Like
let's say that you sell barbecue stuff. If you put
down like barbecue stuff as your business name or like
beef barbecue, no one can find you online because it's
impossible to until like your brand is built up to
(23:10):
the point where you're the number one search result.
Speaker 4 (23:12):
I also prefer it over a company like Vernova, who
just makes up a word that doesn't exist and.
Speaker 2 (23:17):
No, see, I think the made up word is the
way you have to go into I've changed my tune
on this for a couple of reasons. The first is
the one that I just said. The second mic all
words are made up, Yeah they are, But we make
up words on the financial exchange all the time. Yeah,
there's a reason why everyone walks around saying below to
(23:37):
Now there's a reason why people say, what was the
transitory one that we had, oh, intermediatory, there's a reason
why that's in the lexicon now, and people are, you know,
speaking this on a regular basis. I'm mostly talking to myself,
which is why I hear these words so often. Let's
talk a little bit about what we're seeing in colleges
(23:59):
right now, specifically as it relates to international students. Colleges
love wealthy international students.
Speaker 3 (24:07):
They do. They pay full boat. They pay full boat.
Speaker 2 (24:10):
They again they definitely need housing, correct, And so basically
it's hey, if you are a college that is trying
to figure out how to you know, make the P
and L look decent, full boat international students have historically,
for the last thirty forty years been the way to go.
Speaker 3 (24:29):
Yep.
Speaker 2 (24:30):
And the question now is, hey, you had in the
twenty twenty three to twenty four school year a record
one point one million international students in US colleges, which
is again like a huge number. They contributed approximately forty
three point eight billion dollars to the US economy through
their combination of tuition, food, and living expenses. This is
(24:53):
according to NAFSA. I don't know what NAFSA stands for,
says AFSA, colan Association of it International educators. So part
of it is an acronym and part of it spelled out.
So I don't know what that means. Does it mean anything?
Speaker 3 (25:15):
I'm working on it.
Speaker 2 (25:16):
Okay, you're seeing the same thing I'm seeing. It's like,
how do you spell out part of the name but
not all of it? Yeah, Anyways, what you're seeing now
is the question of not so much the students that
are already in the US that have questions about you know,
their visa, immigration or things like that, but the ones
(25:36):
that are applying for subsequent years are saying, hey, is
it worth it for me to come to the US
given that there may be questions about my visa or
legal status or things along those lines, And does that
present potentially present an impact not just to the colleges,
which obviously would hurt dramatically, but to the broader US
(25:59):
economy as a result of that.
Speaker 4 (26:00):
The NASA stance for the National Association of Foreign Student Advisors, just.
Speaker 3 (26:05):
So you know, there we go.
Speaker 4 (26:06):
Yeah, I mean, look, foreign students in our schools, I
think we should just like actually ask about the impact.
Right As a student, you probably appreciate that too. The
financial aid that is provided to you is in part
kind of being subsidized by not in part it is
directly being subsidized by these foreign students. I think there's
(26:29):
a few very legitimate questions, like, hey, should we have
national security concerns about students from Iran and China coming
to the US and studying things like physics and engineering
and all all sorts of one, Like, yes, we should
absolutely have those concerns. I would also ask, should the
(26:51):
United States have a policy of educating the world students
and then giving them absolutely no path to stay in
our country and be contributing members to our workforce. I
think we have some pretty bad policy when it comes
to retaining PhD students for instance, or you know, students
of any sort to incentivize them to stay in the
(27:12):
United States and be productive.
Speaker 3 (27:13):
And work here, to.
Speaker 2 (27:17):
Be honest, okay, And then I think there's convincing cases
both ways. Okay, convincing case for Hey, if you get
a university degree in the United States, should that, you know,
put you on a path towards you know, permanent resident
eventually citizen status because of what you said, Like, hey,
(27:38):
basically the way it's structured right now, I forget what
the exact time from is I don't know if it's like,
within five or ten years, you basically either have to
get married to someone who's a US citizen or you
can't live in the United States anymore. So there is
a convincing case to be made that, Okay, should we
find some way to put you on you know, permanent
residence status in the event that you graduate from a
(27:58):
US university, Probably, like we could talk about how to
figure that out. The other case that I do find
persuasive though, is, look, if you're educated in the United
States and you spend four years there and you have
a great time, You then go back to your home
country and you have all of these new American ideas
there and you help to spread that throughout the world
(28:19):
as well. Yeah, do I think that the default should
be that you get forced to do that?
Speaker 3 (28:25):
Maybe not.
Speaker 2 (28:25):
And maybe that's where it's like, Okay, can we figure
out how to strike a balance there, because I know
for a fact there are a number of international students
that I went to school with that we're not able
to stay in the United States full time permanently.
Speaker 4 (28:43):
I guess that's a larger conversation about our type of
immigration system. And you know, We've never in the United States,
you correct, used like a points or merit based other
than a few niches, never used at full points based
or merit based immigration policy, and so that that's a
larger quest question. But there's nothing about this actual policy
(29:04):
coming from the White House that is changing all this.
Speaker 3 (29:06):
It is really a few things.
Speaker 4 (29:08):
One, it is more scrutiny of visa applicants, and there
was a period of time where they in fact shut
down all of that as they were trying to figure
out how do we do social media review of applicants.
Speaker 3 (29:18):
And so that stressed out universities.
Speaker 4 (29:20):
And then I think there's just a general, like you said,
concern on the part of applicants say, hey, okay, if
I get this visa, will I be able to retain it?
Because I can't imagine pouring one hundred thousand dollars a
year into Harvard University and not being able to finish
my degree there. That would be a poor investment on
my part. So am I better off trying to go
to the UK or somewhere else where. I'm quite certain
(29:41):
that I will be able to finish that education.
Speaker 2 (29:43):
To take a quick break here. When we come back,
we'll talk a little bit about the Federal Reserve and
should they have a dual mandate or not.
Speaker 1 (29:53):
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Speaker 2 (30:59):
Ed yard Any published a piece in the Financial Times
on September eighteenth. It's titled why it might be time
to repeal the Fed's dual mandate. And this is something
that Mark Fandetti actually talked about on this show in
the week prior. So we do have to wonder, is
at an avid Financial Exchange listener, because look, he's you know,
(31:20):
a really smart guy, but sometimes you know, you just
got to listen to Mark Fandetti in order to get
these ideas in your head. But the concept here here
is yes, thank you, thank you, Mark, I appreciate your
thoughts on the Federal Reserve. The thought that you had
any outlines here is basically, look, the FED has an
(31:41):
inflation rate that they try to target. They don't have
an explicit target for the unemployment right because it's simply
full employment, which they admit is a moving target. But
the question is, look, is this dual mandate causing more
problems than it solves, because in the case of what
Jay Powell said last week, he is like, look, both
(32:02):
sides of this are not moving in a great direction,
and the FED right now is choosing, as they noted,
as j Powell said, to lower rates because they're more
nervous about the employment side of the equation which your
denty points out. Look, maybe that presents some problems for
trying to get inflation to where you want to be,
And now you've got both sides that are stuck in
(32:25):
a bad place longer term.
Speaker 4 (32:27):
I'm just trying to think through what the likely different
policy would be if the FED did not have this
dual mandate. Let's say, okay, great question, right, like, what
would be they be doing differently right now where they're
no dual mandate?
Speaker 2 (32:42):
If the FED were only concerned about inflation right now.
Speaker 3 (32:46):
Let's do both sides.
Speaker 4 (32:46):
Is that even what he is arguing that they should
only be worried about inflation, because your denty seems to
be also arguing that, no, they should just be worried
about financial stability or monetary stability.
Speaker 3 (32:59):
Really, isn't he?
Speaker 2 (33:03):
Maybe I think monetary stability is getting at the inflation side.
Speaker 3 (33:07):
Yeah, certainly more than the unemployment scenario.
Speaker 2 (33:10):
But let's take let's take all three of these just
as an example. So if the FED were only concerned
about the labor market, they're cutting right now, because they're
cutting right now even though they're supposed to be concerned
about both. If the FED were only concerned about monetary stability, meaning,
you know, again just state like the proper functioning of
(33:34):
the monetary system and making sure things don't get too
out of whack. Could he make a case that they
should be doing nothing right now? Absolutely? Could he make
a case they should be cutting right now. I don't
think so. Could you make a case that they should
be hiking right now? Maybe, but the most likely thing
would be they do nothing. If the FED were only
(33:55):
concerned about inflation, they're probably hiking today. Again, even J.
Powell said, look like, both sides of this are moving indirections.
We don't like it's just the unemployment sides moving faster.
So I think that's.
Speaker 4 (34:10):
My concern about doing away with this dual mandate is
that then leaves Congress to deal more with moments of
the problem is that Havoc and the Congress, what they
have done over the last fifty years has been to
give the FED more and more control over the financial system,
(34:31):
in my view, because they don't want to deal with
it on their own, they don't know how, they don't
think they have the abilities, and so they just say, hey,
let's give the FED more power so that we don't
have to We don't have to worry about this stuff
and deal with it. That's what happened after eight That's
what happened in twenty twenty. Is they have yielded more
power to the FED in a lot of different ways,
and I'm sure they're pluses and minuses.
Speaker 2 (34:54):
Of well, a few different things can be true. The
first is, if you're not good at something, delegating it
to someone else is generally a good idea.
Speaker 3 (35:02):
Sure.
Speaker 2 (35:04):
The problem is the FED doesn't really have the tools
needed to deal with this right without its.
Speaker 4 (35:10):
Congress holds the tools and FED holds the knowledge, but
they're not really allowed to influence each other by tradition.
Speaker 2 (35:17):
And to a certain extent, the FED is kind of like, hey,
you're sick, so let's put some leeches on you. You know, like, yes,
it may end up, you know, solving the problem, but
it's also, you know, kind of this. Look, the prescription
for dealing with inflation is let's throw a recession in
the works. Yeah that's not really great. It might technically work,
(35:40):
but it doesn't really make you feel warm and fuzzy
about it.
Speaker 4 (35:44):
I guess, folks, if you are interested in this seeming
turning point, that the economy is sitting at If you're
interested in the fact that markets keep reaching all time
highs and more and more comparisons are being made to
the dot com bubble, or you're intrigued to see how
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(36:28):
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Speaker 4 (37:11):
We didn't quite finish that conversation about the Fed. We've
talked about this over and over. The Fed has very
blunt tools when it comes to solving these problems, and
that is the problem with Congress having delegated more and
more responsibility of this stuff over to the Fed. They
have no real tools to increase employment in the country.
Speaker 2 (37:33):
No, the FED cannot produce jobs or workers.
Speaker 4 (37:36):
There are many who would say that raising interest rates
is not the most direct or effective way to control
runaway inflation. Tax rates could be better at that. There
are other things that could be better at controlling inflation
than moving interest rates. But this is the responsibility that
Congress has delegated to the Fed over the years, and
it's a reasonable question to ask if it is too
(37:59):
much for one organization to handle.
Speaker 2 (38:02):
Let's take a quick break here. We still got another
hour coming up, so stay tuned. We're talking housing. We
are talking see what else, Oh TikTok. We got some
information there, and we're talking cardboard boxes. Yeah, not just
for your kids to play and after they open their toys.
We'll touch on that when we're back
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(00:20):
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(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:15):
Chuck Mike Tucker with you, kicking off another week on
the Financial Exchange, and quite honestly, not gonna be a
huge week. It's gonna be on a scale from one
to ten, like a four and a half, maybe a five.
Speaker 3 (01:27):
So if you got a.
Speaker 2 (01:28):
Little bit of you know, overseating to do out in
the yard, if you're starting to get the leaves all
bagged up because hey, the trees are dumping them in
mid September, since we haven't gotten any rain in eight months,
this is the.
Speaker 3 (01:42):
Week to do it.
Speaker 2 (01:43):
Not next week has been very pretty it has been,
it has been, But this week we do still have
a few things that we're gonna be paying attention to.
Most notably, Jay Powell is gonna be speaking on Tuesday.
Always interesting to hear what he has to say, and
obviously it can be a market moving event. Thursday, we're
going to be getting some existing home sales data as
(02:04):
well as jobless claims for the week. And then on
Friday we're gonna be getting PCE data, including the PCE
Price Index, which is the Fed's preferred measure of inflation,
and so that always has the potential to be a
market moving event, though at this point everyone's so darn
gooded backing into it because of the inputs from PPI
(02:24):
and CPI that it's been a while since we've had
a real PCE surprise where we've been like, oh, like,
where did that come from?
Speaker 3 (02:32):
So I think.
Speaker 2 (02:33):
Overall, from a data perspective, not necessarily the most exciting week,
but a couple interesting things that I always like to
point out. First, it is the week after an options expiration,
which tends to potentially jar things loose a little bit,
so you've got the potential for a little bit of
volatility that could be out there. Other things that you
(02:56):
pay attention to. Last week, a bunch of corporate tax
paid's we're doing so you had a bunch of money
flowing into the US Treasury. Does that disrupt things from
a liquidity perspective again, kind of mechanical under the surface,
things that you know may or may not matter and
probably aren't the most exciting, but still have the potential
to contribute to, you know, a week that's out there.
(03:16):
And then when we look on the earning side of things,
a few companies that I think are worth paying attention to.
Micron Technology reports earnings tomorrow, so we'll see what they say.
It's been kind of a disappointing quarter for semiconductor earnings,
but the sector as a whole has been fine, just
because it continues to chug along somehow. And then on
(03:37):
Thursday we got Costco reporting earnings. What do they tell
us about how households are spending and what they're seeing
in terms of trends. I think that'll be an interesting
one too. You know, get some information on as well.
In terms of unscheduled stuff. There's been plenty too.
Speaker 4 (03:53):
Obviously over the weekend we had the news on the
H one B visas, which I was having dinner with
people on Saturday night who affected there, so a lot
of busy weekend emails going around there. You do have
a loose what a Friday news dump? I know you've
got a Friday news dump. You've got a very seemingly
proposed TikTok deal that may be going forward sooner than
(04:15):
anybody anticipated. And then you also have some pieces on
looming government shutdowns, which will again it's Monday, so give
it some time. That'll come to the very last second.
But we are staring down a potential government shutdown here
over the coming week or so, not to mention, Supreme
(04:35):
Court is reviewing a number of cases from the Trump administration,
and there's other stuff working its way through the courts
as well. So we have the potential for more unscheduled
news throughout the next couple weeks.
Speaker 2 (04:44):
And this is before we even get to the possibility
of yet another Argentinian default. That is far from certain,
and certainly the Argentinians are trying to manage things the
best they can. But gosh, if you haven't been watching
what was going on in Argentinian bonds over the last
month or so, there's been, you know, some renewed interest,
(05:07):
especially in the last week.
Speaker 3 (05:09):
When was the last one? Are we that overdue for
Argentinian default? It's been more than like eighteen months?
Speaker 2 (05:16):
Hang on, give me just one second. I need to uh, okay,
let's see. No, that one was from two thousand and five.
Hang on, I gotta see when these have these have
happened here? Let's see. Oh, this is just an article
called Endless Defaults the Curious Case of Argentina. That sounds
(05:37):
kind of fun.
Speaker 4 (05:38):
Google's AI was able to give me one, yep, one
series of them between five and twenty ten, it was.
Speaker 2 (05:46):
Really one that was in multiple stages.
Speaker 4 (05:49):
Twenty fourteen, I don't remember, the country is declared in
default by the ISDA because it could not pay holdout creditors.
So it looks like that might have been looming from
the twenty.
Speaker 2 (05:58):
Yeah, I don't remember that one.
Speaker 3 (06:00):
Twenty nineteen they failed to make payments.
Speaker 4 (06:02):
I do remember twenty nineteen, and then twenty twenty the
again defaulted and restructured on their international five years.
Speaker 3 (06:07):
I mean, yeah, yeah, they're overdue.
Speaker 2 (06:10):
It's it sounds like we might be getting there. So
there's a lot that is in the air. And this
is even before you get to some of the other
stuff that a lot of this is geopolitically related. You
had Korea over the weekend. South Korea come out, you know,
and basically say, hey, we're not really sure that we're
gonna be able to do everything that you're you know,
(06:31):
the US is trying to push for in UH its
trade deal, and so it seems like things are kind
of just coming to a head with a lot of
geopolitical items, not in terms of any like conflicts or
anything like that, but just hey, a lot of financial
and economic items that you know, people have been watching
(06:53):
for anywhere from you know, Argentina is one that Malay
was elected what about a year and a half ago,
I think, and had a really success for first year,
but they're just running up against the balance of payment problems.
That is not something that anyone in the US would
probably understand because the United States has not had to
deal with a balance of payments issue. In god, I
can't even think of the last time that you would
(07:15):
you have that item come up. So you know, this
is one that's been brewing for maybe a year and
a half. That again, six to eight months ago, things
looked like they were humming along pretty well, and then
over the course of really the last like eight weeks,
it's kind of just taken a turn for the worse
in Argentina. So you've got that that's been brewing for
a year and a half. Again, the situation on trade
(07:36):
with South Korea has been brewing for the last six
months or so. The H one B visa thing just
popped up now, But we've been talking about H one
b's as long as I've been on this show, so
I mean you're talking more than a decade at this point,
So it's a lot of international items that I think,
you know, maybe coming to a head this fall, and
(07:57):
that can have, you know, some interesting repercussions in markets.
But to this point, there's been nothing that's been able
to knock markets off course in any meaningful fashion. Since
mid April, We've had a few times here there where
I've been like, oh, that's kind of interesting. Maybe something
No hasn't metter crickets. It has not mattered. Let's talk
about this H one B situation. What happened on Friday,
(08:19):
Why are companies reacting the way they are, and what
does it actually mean?
Speaker 4 (08:23):
So big announcement from the White House on Friday that
was a little bit ambiguous at first.
Speaker 3 (08:27):
It basically said that.
Speaker 4 (08:29):
Every H one B visa holder will or the company
sponsoring them will be responsible for one hundred thousand dollars
fee going forward. That was at least initially interpreted as
We're going to have to all come up with one
hundred thousand dollars for anyone that is not yet in
the country as of Sunday.
Speaker 2 (08:48):
So there was like you had emails going out being like, hey, please,
if you are overseas, get back into the US right now.
Speaker 3 (08:57):
We're trugging the visa.
Speaker 4 (08:59):
Yeah, and so you had these calls going out on
Friday evening across the country, sorry, across the globe. From
these are largely big tech players, big fintech players that
employ a lot of these some research H one B
visas as well, but hey, figure this out, get back
into the country, find the next flight as quickly as
you can. The Trump administration then put out revised guide
(09:22):
and say, no, this one hundred thousand dollars cost is
only going to be for the new visa applications going forward.
And so where this leaves things is that there is
going to be, assuming this sticks, a tremendous amount of
change going on with H one B visa holders over
the course of the next twelve months. But I think
we kind of have to start with the framework of
(09:43):
who hires these people, why do they use this visa product,
and what has it really become these days, because it has,
to your points, Chuck, been something we've talked about at
length of the last decade and has faced significant changes.
You know, first under Trump administration one point oh, those
changes were really seen during the Biden administration, and then
(10:06):
you're now seeing this new change come twenty twenty five.
Speaker 2 (10:10):
So when we look at who is predominantly in terms
of because here's the thing, there's two different groups that
I think are worth talking about when it comes to
H one B visas. Not two different groups, it's really
two ways that you can break this down. There are
the new visas that are issued each year, which are
(10:31):
typically kept I think it's sixty five thousand, but there's
an additional expansion of up to another twenty thousand beyond that,
so you have about eighty five thousand new ones that
could potentially be issued in any particular year.
Speaker 3 (10:43):
Yeah.
Speaker 4 (10:44):
The extra twenty five I think are four PhDs or
master's degree or higher.
Speaker 2 (10:49):
So it's certain qualifications there are though, remember these are
visas that can be rolled over and renewed on an
annual basis. The estimates that are out there, because we
don't have you know, full, you know, active day to
day government statistics on this, estimated that there's around three
quarters of a million active H one B visas that
(11:11):
are currently out there. And beyond that, those three quarters
of a million also have about five hundred to six
hundred thousand dependents that they have brought with them into
the United States. So you're talking probably somewhere in the
range of like one point two to one point three
million people that are living in the US on H
one B visas, with about three quarters of a million
(11:33):
people that are actively working on them and the rest
are you know, spouses or children that are part of
the family.
Speaker 4 (11:40):
Prior to twenty twenty one, the way this all worked
is you would have to file as a company. You'd
have to file this full petition with a whole bunch
of documentation to apply for NH one B visa. The
fees cost somewhere between five and twenty five thousand dollars
per worker, meaning they're just there are still a lot
of applications, but it was a pretty high bar to
(12:02):
do that. The rules then changed at the end of
twenty nineteen, completely changing how this all works, and effectively
they reduce the registration fee to ten bucks, and they
basically said it's going to be a lottery, and if
you win the lottery, then you have to give us
all the documentation and all the fees.
Speaker 2 (12:19):
Yes, so when we talk about, you know where this goes,
the big questions are that are still out there, who
exactly is going to pay this fee? Are there ways
around it? Is it going to be every year? Like
there still are things that are needing to be clarified.
We get some of that over the weekend. Let's take
a quick break and let's discuss more because this is
(12:40):
again kind of a big potential shift that we could
be seeing here, and let's talk about exactly what we
know to this point.
Speaker 1 (12:49):
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(13:11):
Exchange Radio Network.
Speaker 2 (13:22):
All right, let's continue our visa talk. This is related
to immigration, not credit cards. And basically this one hundred
thousand dollars fee on H one B visas. The administration
did clarify over the weekend that this would be just
for new visas, not for renewals. Yes, that still was
enough to spare a bunch of people, you know, a
(13:42):
whole bunch of chaos over the weekend because you know,
no one knew what was going on until I think
late Saturday is when the clarification was issued on this.
In terms of who who's in the US on H
one B visas, we don't have, you know, exactly up
to date data on this, but Pew Research went out
(14:02):
and did a study on it. They found that seventy
three percent of H one B workers who were approved
in twenty twenty three were born in India, so three
quarters of them approximately are from India, and a majority
of approvals each year since twenty ten has gone to
workers born in India. China is the second most common
(14:24):
with about twelve percent. No other birthplace accounted for even
two percent of H one B workers. So couple different
ways to read this, and quite honestly, I think there's
only one that really matters. This is between the United
States and India in terms of money.
Speaker 3 (14:47):
Which is also why I'm not sure that this sticks, right.
Speaker 4 (14:50):
I Mean, there's no reason that I can think of
to say that this isn't a negotiating point with US
in India, right, I wouldn't this be on the table
should they get to the bargaining table when it comes
to tariffs and all.
Speaker 3 (15:05):
Other sorts of things.
Speaker 4 (15:07):
The way that these visa programs have I am not
creating the wheel on this. I found a pretty good
piece by Michael Green, who's a chief strategist and portfolio
manager for a Simplify asset management.
Speaker 3 (15:21):
And he pointed a few things out.
Speaker 4 (15:23):
One since that change in twenty nineteen, the system has
kind of changed in terms of how it works and
what it's become now is, at least in his opinion,
a really easy opportunity for staffing firms to flood the
system with a bunch of applications and then put these
people into roles at Google, at Microsoft, at these other
(15:46):
companies to basically offer wages at a far lower rate
than what you'd be able to hire for the same
thing in the United States.
Speaker 2 (15:52):
Which is why a lot of people that have looked
at the H one B visa program have said, Look,
if you're going to allow for these unlimited applications with NOSE,
don't make it a lottery system. Make it an auction
system where it's Hey, if you are Google and you're
bidding on a role, if you don't put enough up
as a salary for that role, you're going to get
(16:14):
outbid and not get the worker.
Speaker 4 (16:16):
In twenty twenty one, there were two hundred and sixty
nine thousand applications in twenty twenty four, there's seven hundred
fifty nine thousand.
Speaker 2 (16:23):
It's a big increase.
Speaker 4 (16:25):
So what you seem to be seeing here are big
consultancy firms getting this, putting the people into the workplaces
at a subsidized rate, and then kind of pocketing the
difference here. And those are the ones that are really
hurt by all of this is those consulting staffing firms
that placed a lot of these folks into those roles. Yes,
(16:46):
Google and Microsoft are going to struggle, but quite honestly.
Speaker 2 (16:49):
They can figure out how to pay the extra cash.
Speaker 4 (16:51):
They've got the deep pockets to be able to do this.
These are not American farmers who are struggling going to
figure out, Hey, if I have to hire an American
worker to plant the field, how much more am I
going to have to pay?
Speaker 2 (17:00):
So an extra couple hundred grand for each of these
employees is a rounding error on Microsoft's bottom line, right.
Speaker 4 (17:07):
And you know, Michael pointed out a few things. One,
he pulled the average hourly earnings of all employees in
information in information roles and looked at them since twenty
twenty and he pointed out what he considers to be
a statistically significant drop in incomes in that specific area
that he at least in part, blames on this. I'm
sure you could blame it on other things too, But again,
(17:30):
I just find this interesting, and I tend to agree, Hey,
a rather than a lottery based system, a system where
you just go to the highest bidder, I think makes
some sense in the absence of that, I don't know.
I'll be interested to see how this plays out. I
(17:50):
do think that there are gives and takes with this.
There will be companies that say, Okay, great, I'm just
going to go and employ that India worker Indian worker
in India. But they might also create a more efficient
system with all this. That said, I also think there's
a distinct possibility that that we are back to the
twenty nineteen rules in a couple of years if we
(18:11):
get a trade deal done with India.
Speaker 2 (18:14):
I'm trying to make heads heads or tails of the
whole US India relationship right now, good luck, and I'm
kind of struggling with it because as recently as like
April or may you know, Vice President Vance had just
headed over to India, said, you know, had a very
successful meeting in India with the Indian government, and it
(18:36):
seems like things were really moving along in a productive fashion.
I don't know what happened between kind of May and
early August, but something did, yeah, and I don't know
what because things have not been good between the two
countries since then. I'm not saying that they've been like bad,
(18:58):
but things have been taking step back as far as
what you would think of as constructive progress in a
number of areas.
Speaker 4 (19:05):
And this is another shot across that bow because again,
this is predominantly an issue that affects Indian workers.
Speaker 3 (19:13):
It is I'm an Indian company.
Speaker 2 (19:14):
I'm just trying to figure out what is needed in
order to get across that hump and get a resolution there.
Let's take a quick break. When we return, we got
Wall Street Watch and they were talking college after this.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
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 5 (20:01):
Markets are a little changed to kick off a new
week after the FED reduced interest rates last week. Investors
are also weighing the looming thread of a potential government
shutdown after a bill was rejected on Friday, and later
this week we'll get another measure on the inflation front
when the Personal Consumption Expenditures Price Index is posted. Right now,
(20:23):
the Dow is down by a tenth of a percent
or sixty eight points. SMP five hundred edging three points higher,
NASDAC up nearly two tenths of one percent or forty
two points. Russell two thousand is down about a tenth
of a percent. Ten year treasureal flat and is currently
at four point one four to one percent. Crude oiled
(20:44):
down about seven tenths of one percent, rating at sixty
two dollars in twenty three 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. COMPA shares are down about nine percent, while
Anywhere real Estate stock is surging about fifty nine percent. Meanwhile,
(21:09):
Pfizer agreed to pay up to seven point three billion
dollars for anti obesity drug maker Metzerah. Pfizer stock is
up over two percent on that news. Elsewhere Washington Post
is reporting that the Trump administration plans to announce today
that pregnant woman's use of Thailand Hall is potentially linked
to autism. Shares in tailentholl parent company ken View are
(21:32):
sinking nearly six percent on that news. Fox is up
by about two 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 weight, where the bank noted that
the chip maker trades at an attractive valuation relative to peers.
(21:53):
Applied Material shares are up about three percent, and Warren
Buffett's Berkshire Hathaway completely exited its investment in Chinese ev
maker BYD. Berkshire made its initial purchase seventeen years ago
at the urging of Charlie Munger. I'm Tucker Silva, and
that is Wall Street Watch.
Speaker 4 (22:12):
Can we just say anywhere real estate is a bad
name for a real estate company.
Speaker 3 (22:18):
One, it's just not creative. Two what's it is creative?
What's real estate all about? Location? Location? That's why it's creative.
Speaker 2 (22:28):
It's also if you do want to make a case
it's horrible because if you try to run a search
engine for it, you just get yeah, all kinds of
random stuff, which is why I think that here's one
thing that I will say. You know how we rip
on companies for coming up with names that like don't
make any sense.
Speaker 3 (22:45):
Yeah, it's better than putting a plus next to every product.
Speaker 2 (22:49):
Or just like using a word as your thinking. Like
let's say that you sell barbecue stuff. If you put
down like barbecue stuff as your business name or like
beef barbecue, no one can find you online because it's
impossible to until like your brand is built up to
(23:10):
the point where you're the number one search result.
Speaker 4 (23:12):
I also prefer it over a company like Vernova, who
just makes up a word that doesn't exist and.
Speaker 2 (23:17):
No, see, I think the made up word is the
way you have to go into I've changed my tune
on this for a couple of reasons. The first is
the one that I just said. The second mic all
words are made up, Yeah they are, But we make
up words on the financial exchange all the time. Yeah,
there's a reason why everyone walks around saying below to
(23:37):
Now there's a reason why people say, what was the
transitory one that we had, oh, intermediatory, there's a reason
why that's in the lexicon now, and people are, you know,
speaking this on a regular basis. I'm mostly talking to myself,
which is why I hear these words so often. Let's
talk a little bit about what we're seeing in colleges
(23:59):
right now, specifically as it relates to international students. Colleges
love wealthy international students.
Speaker 3 (24:07):
They do. They pay full boat. They pay full boat.
Speaker 2 (24:10):
They again they definitely need housing, correct, And so basically
it's hey, if you are a college that is trying
to figure out how to you know, make the P
and L look decent, full boat international students have historically,
for the last thirty forty years been the way to go.
Speaker 3 (24:29):
Yep.
Speaker 2 (24:30):
And the question now is, hey, you had in the
twenty twenty three to twenty four school year a record
one point one million international students in US colleges, which
is again like a huge number. They contributed approximately forty
three point eight billion dollars to the US economy through
their combination of tuition, food, and living expenses. This is
(24:53):
according to NAFSA. I don't know what NAFSA stands for,
says AFSA, colan Association of it International educators. So part
of it is an acronym and part of it spelled out.
So I don't know what that means. Does it mean anything?
Speaker 3 (25:15):
I'm working on it.
Speaker 2 (25:16):
Okay, you're seeing the same thing I'm seeing. It's like,
how do you spell out part of the name but
not all of it? Yeah, Anyways, what you're seeing now
is the question of not so much the students that
are already in the US that have questions about you know,
their visa, immigration or things like that, but the ones
(25:36):
that are applying for subsequent years are saying, hey, is
it worth it for me to come to the US
given that there may be questions about my visa or
legal status or things along those lines, And does that
present potentially present an impact not just to the colleges,
which obviously would hurt dramatically, but to the broader US
(25:59):
economy as a result of that.
Speaker 4 (26:00):
The NASA stance for the National Association of Foreign Student Advisors, just.
Speaker 3 (26:05):
So you know, there we go.
Speaker 4 (26:06):
Yeah, I mean, look, foreign students in our schools, I
think we should just like actually ask about the impact.
Right As a student, you probably appreciate that too. The
financial aid that is provided to you is in part
kind of being subsidized by not in part it is
directly being subsidized by these foreign students. I think there's
(26:29):
a few very legitimate questions, like, hey, should we have
national security concerns about students from Iran and China coming
to the US and studying things like physics and engineering
and all all sorts of one, Like, yes, we should
absolutely have those concerns. I would also ask, should the
(26:51):
United States have a policy of educating the world students
and then giving them absolutely no path to stay in
our country and be contributing members to our workforce. I
think we have some pretty bad policy when it comes
to retaining PhD students for instance, or you know, students
of any sort to incentivize them to stay in the
(27:12):
United States and be productive.
Speaker 3 (27:13):
And work here, to.
Speaker 2 (27:17):
Be honest, okay, And then I think there's convincing cases
both ways. Okay, convincing case for Hey, if you get
a university degree in the United States, should that, you know,
put you on a path towards you know, permanent resident
eventually citizen status because of what you said, Like, hey,
(27:38):
basically the way it's structured right now, I forget what
the exact time from is I don't know if it's like,
within five or ten years, you basically either have to
get married to someone who's a US citizen or you
can't live in the United States anymore. So there is
a convincing case to be made that, Okay, should we
find some way to put you on you know, permanent
residence status in the event that you graduate from a
(27:58):
US university, Probably, like we could talk about how to
figure that out. The other case that I do find
persuasive though, is, look, if you're educated in the United
States and you spend four years there and you have
a great time, You then go back to your home
country and you have all of these new American ideas
there and you help to spread that throughout the world
(28:19):
as well. Yeah, do I think that the default should
be that you get forced to do that?
Speaker 3 (28:25):
Maybe not.
Speaker 2 (28:25):
And maybe that's where it's like, Okay, can we figure
out how to strike a balance there, because I know
for a fact there are a number of international students
that I went to school with that we're not able
to stay in the United States full time permanently.
Speaker 4 (28:43):
I guess that's a larger conversation about our type of
immigration system. And you know, We've never in the United States,
you correct, used like a points or merit based other
than a few niches, never used at full points based
or merit based immigration policy, and so that that's a
larger quest question. But there's nothing about this actual policy
(29:04):
coming from the White House that is changing all this.
Speaker 3 (29:06):
It is really a few things.
Speaker 4 (29:08):
One, it is more scrutiny of visa applicants, and there
was a period of time where they in fact shut
down all of that as they were trying to figure
out how do we do social media review of applicants.
Speaker 3 (29:18):
And so that stressed out universities.
Speaker 4 (29:20):
And then I think there's just a general, like you said,
concern on the part of applicants say, hey, okay, if
I get this visa, will I be able to retain it?
Because I can't imagine pouring one hundred thousand dollars a
year into Harvard University and not being able to finish
my degree there. That would be a poor investment on
my part. So am I better off trying to go
to the UK or somewhere else where. I'm quite certain
(29:41):
that I will be able to finish that education.
Speaker 2 (29:43):
To take a quick break here. When we come back,
we'll talk a little bit about the Federal Reserve and
should they have a dual mandate or not.
Speaker 1 (29:53):
The Financial Exchange streams live on YouTube. Subscribe to our
page and stay up to date on breaking business new
use All morning. Long Face is the Financial Exchange Radio Network.
Thankst us six one, seven, three, six two thirteen eighty
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(30:13):
are covering. This is the Financial Exchange Radio Network.
Speaker 5 (30:23):
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Speaker 2 (30:59):
Ed yard Any published a piece in the Financial Times
on September eighteenth. It's titled why it might be time
to repeal the Fed's dual mandate. And this is something
that Mark Fandetti actually talked about on this show in
the week prior. So we do have to wonder, is
at an avid Financial Exchange listener, because look, he's you know,
(31:20):
a really smart guy, but sometimes you know, you just
got to listen to Mark Fandetti in order to get
these ideas in your head. But the concept here here
is yes, thank you, thank you, Mark, I appreciate your
thoughts on the Federal Reserve. The thought that you had
any outlines here is basically, look, the FED has an
(31:41):
inflation rate that they try to target. They don't have
an explicit target for the unemployment right because it's simply
full employment, which they admit is a moving target. But
the question is, look, is this dual mandate causing more
problems than it solves, because in the case of what
Jay Powell said last week, he is like, look, both
(32:02):
sides of this are not moving in a great direction,
and the FED right now is choosing, as they noted,
as j Powell said, to lower rates because they're more
nervous about the employment side of the equation which your
denty points out. Look, maybe that presents some problems for
trying to get inflation to where you want to be,
And now you've got both sides that are stuck in
(32:25):
a bad place longer term.
Speaker 4 (32:27):
I'm just trying to think through what the likely different
policy would be if the FED did not have this
dual mandate. Let's say, okay, great question, right, like, what
would be they be doing differently right now where they're
no dual mandate?
Speaker 2 (32:42):
If the FED were only concerned about inflation right now.
Speaker 3 (32:46):
Let's do both sides.
Speaker 4 (32:46):
Is that even what he is arguing that they should
only be worried about inflation, because your denty seems to
be also arguing that, no, they should just be worried
about financial stability or monetary stability.
Speaker 3 (32:59):
Really, isn't he?
Speaker 2 (33:03):
Maybe I think monetary stability is getting at the inflation side.
Speaker 3 (33:07):
Yeah, certainly more than the unemployment scenario.
Speaker 2 (33:10):
But let's take let's take all three of these just
as an example. So if the FED were only concerned
about the labor market, they're cutting right now, because they're
cutting right now even though they're supposed to be concerned
about both. If the FED were only concerned about monetary stability, meaning,
you know, again just state like the proper functioning of
(33:34):
the monetary system and making sure things don't get too
out of whack. Could he make a case that they
should be doing nothing right now? Absolutely? Could he make
a case they should be cutting right now. I don't
think so. Could you make a case that they should
be hiking right now? Maybe, but the most likely thing
would be they do nothing. If the FED were only
(33:55):
concerned about inflation, they're probably hiking today. Again, even J.
Powell said, look like, both sides of this are moving indirections.
We don't like it's just the unemployment sides moving faster.
So I think that's.
Speaker 4 (34:10):
My concern about doing away with this dual mandate is
that then leaves Congress to deal more with moments of
the problem is that Havoc and the Congress, what they
have done over the last fifty years has been to
give the FED more and more control over the financial system,
(34:31):
in my view, because they don't want to deal with
it on their own, they don't know how, they don't
think they have the abilities, and so they just say, hey,
let's give the FED more power so that we don't
have to We don't have to worry about this stuff
and deal with it. That's what happened after eight That's
what happened in twenty twenty. Is they have yielded more
power to the FED in a lot of different ways,
and I'm sure they're pluses and minuses.
Speaker 2 (34:54):
Of well, a few different things can be true. The
first is, if you're not good at something, delegating it
to someone else is generally a good idea.
Speaker 3 (35:02):
Sure.
Speaker 2 (35:04):
The problem is the FED doesn't really have the tools
needed to deal with this right without its.
Speaker 4 (35:10):
Congress holds the tools and FED holds the knowledge, but
they're not really allowed to influence each other by tradition.
Speaker 2 (35:17):
And to a certain extent, the FED is kind of like, hey,
you're sick, so let's put some leeches on you. You know, like, yes,
it may end up, you know, solving the problem, but
it's also, you know, kind of this. Look, the prescription
for dealing with inflation is let's throw a recession in
the works. Yeah that's not really great. It might technically work,
(35:40):
but it doesn't really make you feel warm and fuzzy
about it.
Speaker 4 (35:44):
I guess, folks, if you are interested in this seeming
turning point, that the economy is sitting at If you're
interested in the fact that markets keep reaching all time
highs and more and more comparisons are being made to
the dot com bubble, or you're intrigued to see how
AI seems to be shaping the market at every junction,
we invite you to come join us in October for
(36:06):
two separate events. The first one is down on Cape
Cod at the Margaritaville Resort on October ninth. The following
is that the Showcase Super Lucks and Chestnut Hill on
October sixteenth. These are two separate events. We're doing a
live broadcast of this show. Chuck and I will be there.
We're following that doing lunch and just a conversation with
(36:28):
all the folks at Armstrong about where things may go
from here. If you would like to register, you need
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hundred three nine three for zero zero one or Armstrong
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(36:51):
nine three four zero zero one or Armstrong Advisory dot Com.
Speaker 1 (36:56):
The proceeding was paid for by Armstrong Advisory Group a
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Consult your own financial tax into state planning advisors before
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Speaker 4 (37:11):
We didn't quite finish that conversation about the Fed. We've
talked about this over and over. The Fed has very
blunt tools when it comes to solving these problems, and
that is the problem with Congress having delegated more and
more responsibility of this stuff over to the Fed. They
have no real tools to increase employment in the country.
Speaker 2 (37:33):
No, the FED cannot produce jobs or workers.
Speaker 4 (37:36):
There are many who would say that raising interest rates
is not the most direct or effective way to control
runaway inflation. Tax rates could be better at that. There
are other things that could be better at controlling inflation
than moving interest rates. But this is the responsibility that
Congress has delegated to the Fed over the years, and
it's a reasonable question to ask if it is too
(37:59):
much for one organization to handle.
Speaker 2 (38:02):
Let's take a quick break here. We still got another
hour coming up, so stay tuned. We're talking housing. We
are talking see what else, Oh TikTok. We got some
information there, and we're talking cardboard boxes. Yeah, not just
for your kids to play and after they open their toys.
We'll touch on that when we're back
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