August 14, 2025 • 34 mins
Two very positive things have happened over the last 48 hours in the world of real estate. One, mortgage applications surged 10.9% for the week ending August 9th. Secondly, mortgage rates as of Thursday morning are at a 52 week low. So, sellers, it may be time to list and negotiate. Buyers…..get that pre-approval letter. Today on the Jon Sanchez Show at 3pm, we’ll make our case as to why the time is now to sell and/or buy.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Good Thursday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty k which it's a
pole leisure to be with you and a pleasure to
be with my co host around the horn. We shall
go look at debonair with his glasses. Well, you just
took him off. He just made me. I was just
complimenting you. How good your look there you go? How
good you look for those glasses on Dwaton.
Speaker 2 (00:19):
Lord, thank you, John. How are you doing today?
Speaker 1 (00:23):
We're battling. We're battling, but we're doing good. We're doing
good and hanging in there.
Speaker 2 (00:26):
It was a hot topic for yesterday, but today Jason.
Speaker 1 (00:30):
Huh you mean the the when you're low of mortgage rates?
Speaker 2 (00:35):
Yeah?
Speaker 1 (00:36):
Yeah, did you? But because I checked her? Oh you
did it Jeans at the last minute, So of yeah,
all right, a little bit enough. We're close enough, all right,
mister Corey Edge eventually, how you be, sir?
Speaker 3 (00:49):
I'm doing good. How are you doing it?
Speaker 1 (00:50):
Very good? Got the cup of coffee going there? I
see it's off.
Speaker 3 (00:53):
To the side here. Of course, I got a pot
bruin just in case this one.
Speaker 1 (00:56):
Run there backup plan. But I like it. I like it.
It should be.
Speaker 3 (01:02):
It should be asleep by midnight, not by three.
Speaker 1 (01:07):
Geez, you get that much sleep three hours?
Speaker 3 (01:08):
Come on, I know I'm getting all.
Speaker 1 (01:12):
Yeah, that's right, that's right.
Speaker 2 (01:13):
I hear you. Then you don't sleep at all.
Speaker 1 (01:15):
Right, then you don't sleep at all. Yeah, you get
in the middle pe and five times. Luckily I'm not
there yet. I just want to clarify that I sleep
through the night like a baby. So I'm not not
quite there yet, but uh, you know, just prepared, prepared,
It's coming, it's coming. Alrighty fellows, let's tell everybody what
we have lined up for all of you this afternoon,
(01:35):
and thanks again so much for joining us. Were, of
course going to recap what happened in today's market activity,
the wackam old games I'll call it, and I'll tell
you why. But first let's get to the real estate topic.
You know, two very very very positive things have happened
in the last forty eight hours in the world of
real estate. One of those, the mortgage application data, showed
that mortgage applications for the weekending August the ninth, surging
(01:57):
ten point nine percent. See what all of you do
when just rates come down just a little bit. You
just you get off the fence and you get out there.
Good for you. Now, the second big event that's happened
besides that is mortgage rate. So this is what Dwight
was just jabbing me about. Here. When I created the
show teas this morning, we were down about three basis points.
(02:20):
A matter of fact, we were unchanged, Dwight. So you
got that little bump up, like I said, long after
I created this topic, So I apologize, but we're close enough.
We're there fifty two week low on the thirty year mortgage.
So with all that said, you guys are surging. You
want to get out there, you want to buy. Sellers,
listen closely. It may be time to list and time
(02:41):
to negotiate. Notice we threw in the word negotiate because,
as Corey will explain, the last thing in the world
that's gonna happen is you're gonna put your price out Well,
for the most part, you're gonna put a price out
there and someone's gonna come up and go, hey, that's right,
I'll give you that seven hundred thousand dollars for a
full offering price, right, Corey. Those aren't the days we're
in it's yeah, let's start at the seven hundred. I'm
(03:02):
going to negotiate you down to whatever, six eighty or somewhere.
And by the way, I want five or ten or
twenty thousand dollars in concessions. That's the real world, right, Corey.
Speaker 3 (03:11):
If the house is worth seven hundred, they will pay
you the seven hundred.
Speaker 1 (03:14):
If no one ever sells their house for what it's worth.
Speaker 3 (03:16):
Oh they don't. They don't start that way. Eventually, eventually
they sell it for what it's start.
Speaker 1 (03:22):
That's that's et.
Speaker 3 (03:25):
There are some people in the market. I get clients.
I'm sure every real tri gets clients that are like,
you know, yeah, I do think it's only worth five hundred.
Let's go with that. Get three offers, take five oh two,
and there you go.
Speaker 1 (03:35):
Yeah wow, wow makes so much easier. Yeah, ye, but
I bet it does. Those are the kind of clients
you like. Well. The second thing besides you sellers getting
ready to put the house on the market. And again,
as Corey just a highlighted a couple of days ago,
you know the peak selling season has already happened, right,
he said, it was the beginning of July. Here we
are August, the fourteenth. So that doesn't mean, though, you
can't get that household. So we're gonna give you some
(03:56):
ideas about that. But the second one follows over to
my dear friend Dwight Millart, and that is, you got
to get the pre approval letter if you're going to
be on the buying side of things, right, if things
start to heat up again, you got to come into
the deal with that letter. You have to have it.
No one's going to pay any attention to you. Is
Corey will explain if you do not have that and say, oh, yeah,
don't worry, I've got the assets for the down payment.
(04:17):
And so no, no, no, no, no no, You've got to
get a letter from your lender that you are pre
approved to even have anybody talk to you much less probably,
like Corey has said. And Corey, I want you to
go into explanation on this. If a realtor will even
spend much time with you, right, I doubt they're going
to take the time to go out and show your
properties and do things like that again if you don't
have that pre approval letter. So I'll let Corey explain
(04:38):
all that. So those are the two main things going on.
But what we want to kind of talk about the
other point guys. I want to really emphasize that we
get across because we're getting a lot of questions about this,
and that is those that are so convinced that if
we get this FED interest straight cut in September, is
the FED Futures contract is indicating we're going to that
we're automatically going to see Dwight, your mortgage rates come down.
(05:02):
And that is the farthest thing from the truth. And
we're going to give you an explanation why, because we
don't want you to be sitting on the sidelines right now.
If all the other parameters in your life say it's
time to move right, we're busting at the seams, or
we need to downsize, whatever your personal reasons are, the
last thing we want you to do is to sit
back right now and go I'm gonna wait until that
(05:23):
FED meeting in September. Because Sanchez has been saying the
street is going to give us a is voting and
pretty accurately over ninety percent probability that we're going to
get that quarter percent cut. So hey, you know what,
the thirty year mortgage today's at six fifty six let's
see if we get a quarter percent cut. Hey, I'm
going to be down in low sixes. No, you cannot
believe that. You hopefully will see some reaction. But I
(05:44):
underline the word hopeful, because that's all it is. Remember,
and Dwight's going to go through this explanation along with myself.
The mortgage market, the type of bonds and things that
create with the pricing of these thirty year fixed mortgages.
They are bonds. Bonds have a life in and of
their own right, Dwight, outside the scope of what the
FED is doing, we can give you and we won't
waste the time go back into history and say FED
(06:07):
gave us a cut, bond yields go up. FED didn't
do anything. Bond yields go down. Remember, these bonds are
driven by economic activity. And we've had two very important
reports in the last forty eight hours. We had two
days ago the CPI report, great report, market rallies. Today
we get PPI not a good report, this terrible report.
I'll go through the details and what happens. The market
(06:29):
just barely budges. And again I said the term whack
a mole, that's what it was today. We'd go up
for a little bit, then boom, here come the seller's
market go down. Boom, here comes the buyer. So up
and down and up and down, and we barely budge
one was all said and done. Eleven point loss on
the down, down two on the Nasdaq, up to on
the S and P five hundred. So this market was
very uncertain, guys, And I'm glad we had this PPI
(06:49):
data to talk about today because market's very uncertain. How
we digest this because we did see the FED futures
contract probability of the rate cut come down a little bit.
We're still north of ninety, but it did come down
from yesterday. And so you know, again this is just
a prime example. Could we actually, Dwight, could we see
these rates go up if the Fed now people are
(07:09):
concerned that we may not get that cut in September.
But remember, guys, as we discussed Jason and I discussed
on the show yesterday, the street now actually has pegged
in some strategies have pegged in three interest straight cuts
right September, October, and December. No one is talking today
about the December one. I think that one is off
the table. And those who believed in that I did,
(07:31):
and I said two would be great. But remember, I'm
sure you guys saw this also yesterday. Yeah, some strategists
come out in a comma say, you know what, half
a percent cut at September and then you know, maybe
quarter percent in October. And I said on the show yesterday,
I had a client asked me about this in the morning,
so I brought it up on the show yesterday. I'm like, no,
we do not want a half a percent cut, do
(07:52):
I said, there shaking and said, no, we do not
want a half a percent cut in September. Sounds great,
but once again, what we'll do so we'll create panic
in the on market. It'll create panic in the stock market,
because that's gonna tell the street, uh oh, the feta
see something in the horizon. And therefore we've got to
be very aggressive and just jump in both feet, you know,
and give that half a percent cut. So there's a
(08:14):
lot of things going on today and we just, like
I said, we don't really have a set topic other
than is it time to buy and or sell in
this market? And you know, and that's really what we
want to go across. So you're gonna hear us a
touch on a lot of different things, but it all
comes together. It all comes together as to helping you
make your decision again to buy, sell, whatever side of
the camp that you're on. So with that said, guys,
(08:37):
let me just kind of real briefly jump into the
stock market side of things today. I kind of let
the cat out of the bag as far as what
we dealt with. Let's go through the PPI report because
this was an interesting one, and Corey and Dwight, I
know you were watching this closely. So the number came
out at five point thirty this morning. And remember we
we we came off of a very strong session yesterday,
We came across or came off of a very strong
(08:58):
session the previous day, up almost a thousand points on
the Dow between those last two sessions, so we had
all kinds of momentum going. So here comes the PPI report.
Everyone's like, including myself, I'll admit it. I was wrong
on this one, I thought, because it's always been I
shouldn't say always, but recently ppi's been matching CPI, lock
Stock and Barrel both on the headline number and the
core restrip out the food and energy farthest thing from
(09:21):
the truth happened with that one today? Right? Remember CPI
said we were up two tenths of a percent month
over month. PPI today up nine tenths of a percent.
But you know, Corey and Dwight. One thing that I
brought to everyone's attention on the stock up dates this
morning with Ross Mitchell was I mean I had CNBC
on all day, as I do each and every day.
I did not hear any strategist bring this point up.
(09:42):
And I think it's a very valid one, and I
brought it up on my stock updates, and that is
this from May to June PPI was unchanged, right, so
we had a goose egg in June's report. Now we
jump up nine tenths over percent, So folks, that's almost
a you know, that's a significant right do I significan
that can't move in inflation in one month from zero
(10:03):
to up nine tenths over percent. So that was the
first thing that got everybody. The second one is we're
still sitting at three point three percent year over you know,
year over year, so we're a long ways away again
from the Fed mandate. The second point of two percent,
The second point I want to bring up is remember this.
Everyone the FED looks at this number and they go, hmmm,
(10:27):
we got PPI up very strong, way out of expectation.
We had CPI that came in line with the expectation.
So what the hell are we going to do?
Speaker 2 (10:36):
Right?
Speaker 1 (10:37):
Why are we going to succumb to the street, succumb
to President Trump? Give the street a quarter percent cut
if inflation's lurky? And this is the point I want
to hit on when we come back. I want you
guys just to hear me out. I'm sorry to be
taking up all of your time here, but I think
something else that no one is paying attention to is
what is the future holding? And I hope the Fed
is going to consider this. What is the future holding,
(10:59):
folks when wholesale inflation is rising faster than consumer CPI inflation?
And I'll leave you with that little tease. I got
some interesting theories on that one. All right, this's turned
over to Christen Snow. She's in the right now traffic center. Hello, Kristen,
Welcome back to the John Sanchez Show on News Talk
(11:19):
seven eighty. Ko waits with Corey Edge, Vigrility and of course,
the white lard of Highlands Mortgage once again. We finished
it very quiet. It looked like we didn't do anything today,
but trust me, intra day, there was a lot of
things going on. So we finished down again eleven other down,
lost two on the Nasdaq and a two point game.
But Dwight, what kind of day and what kind of
closed was it on the n S and P five
hundred with that two point game?
Speaker 2 (11:39):
How bet it was another record setting day.
Speaker 1 (11:41):
You're absolutely right, it was another record setting day with
a two point game. All right, let's go to the
commodity side of things. Gained a buck thirty three on oil,
a bit strong there, sixty three to ninety five of
a barrel, down about twenty five dollars on gold three
thousand and three eighty three twenty and mister Millard over
to the ten year chersury up six basis points four
point nine percent. This again, was one of the problems
(12:02):
with this PPI report. Today we saw those bond prices
plummet because you don't want to own bonds if there's inflation,
that of course drives those yields up.
Speaker 2 (12:10):
Yeah, John, and I was hoping it was going to
go the other way. Could you imagine if it would
have came in line or under. But uh, you know,
according to Mortgage News Daily today, six point five six
on the thirty year fix and the fifteen year five
point ninety four, and then the fahas vas are at
six point one point five. So we're still, you know,
we're not too far off of what we were earlier,
(12:32):
you know, last week. So, I mean, I like it,
this is what's driving the applications. Yeah, we don't need that,
we don't need that bumping the road again.
Speaker 1 (12:40):
But you know, guys, when when when I was researching
the mortgage apps, could remember, folks, mortgage apps come out
there for the previous week, and they come out Wednesday morning,
so we just you know, got it yesterday. And I
saw that ten point nine percent increase, We're like, wow,
that that is phenomenal. I mean, that is a huge
I don't know quantity wise how many of that is,
but I I imagine it's a significant actual quantity number.
Speaker 2 (13:03):
Well, John, if you go into these big builders, especially
the nationals, they've got these clients all lined up. It's
almost like when the rate hits here, call me and
they're just they're just dialing for dollars based in I mean,
so it'd be interesting. You know how many of those
applications were driven from the builder communities, you know, nationwide.
(13:24):
But yeah, but that's what they do. They sit there
for eight hours and they just keep that Hey, rates
have gone down. They follow exactly what they get a script.
Speaker 1 (13:32):
Okay, okay, yeah, very good. Okay, guys, I want to
I want to explore something again. We're just gonna if
you just join us, we're gonna be kind of be
bopping around this whole theme right now, which is is
it time to buy and or sell real estate? Right
based upon the anticipation of the FED cut in September,
maybe another one in October. Uh, this inflationary data, so
(13:53):
on and so forth. So a lot of different moving parts.
But I want to go back to a concern that
I have, and especially it was validated today after this
PPI number. So once again, if you just join us,
let me hit this number one more time. PPI, which
is the measure of inflation. So if Dwight's a business,
this is what he says, on average, my costs have
increased nine tenths of a percent. And there's a lot
(14:14):
of ingredients that go into that number. So just take
it for granted. Nine tenths of a percent increase. Okay, Now,
once again, as I said before we went to break,
this was July compared to June. But if you go
June compared to May, that was zero percent. So nine
tenths of a percent increase in one month is staggering.
But here's what concerns me that a lot of people
are not talking about guys, and that is this point, Dwight.
(14:38):
I'm going to use you as a business. And let's
say you make a widget, right, and like I said,
that widget now cost you nine tenths of a percent
more to make because of your wholesale costs. That is
not factoring in, but it may be a contributing factor
of tariffs. Right, but wholesale inventory or wholesale inflation, that
(14:58):
doesn't have anything to do with tariffs. But I say
it may have a piece of it. For you know,
if you go way deep into the supply chain, you
may be paying more, Dwight, for your you know, to
manufacture your widget because one of your suppliers, for example,
is paying a tariff and they're passing that cost on
to you in a higher wholesale cost. And you know,
you see how it just kind of factors in But
(15:20):
to the point I want to get to, and that
is this, So Dwight, I wanna let's let's put this
in a dollars and cent So let's say it costs
I don't know, one hundred dollars for you to make
this widget a month ago. Now it costs you one
hundred and ten dollars to make this widget, okay, because
of the wholesale costs have gone up. But now you
(15:41):
go to the port of Long Beach, Port of Los Angeles,
any of the ports you know, back in Texas, wherever
it may be that you pick up your product or
your your your goods. And now let's just say I
think a good average teriff rate is twenty percent. Okay.
So now, remember, folks, how the tariff situation works. If
de White has to go to the port to pick
up his product, he has to write a check or
(16:04):
do a wire transfer to the Customs Department of the
United States of America for that twenty percent tariff. And
let's say on that one hundred and ten dollars widget,
let's say that tariff is another you know, I'll just
say twenty dollars, okay, So Dwight you're now one hundred
and thirty You're now thirty dollars more to produce your
(16:25):
widget and you haven't even sold it yet. Everybody follow me.
Twenty percent increase because of the tariff that you've had
to charge. And again we'll just round it up another
nine ten seven percent increase on the wholesale cost of
your ingredients to make your widget. Okay, so now you're
into this thing for one hundred and thirty bucks. Dwight
just wrote that check or wired that money. Like I
(16:46):
said to the Customs department, he is out that money
as a retailer or as a manufacturer. Dwight is hoping,
like heck that Corey, who has been a great customer
of Dwight's factory for many, many years, is able to
take that one hundred and thirty dollars cost now and
put it on his shelf and sell that widget for
(17:09):
I don't know what's an average markup of a product
twenty thirty forty percent. So Corey, let's say now that
product that you just had to pay Dwight one hundred
and thirty dollars for that you were used to paying
one hundred dollars for, You're going well, jeez, I got
to add my markup to that, So let's add on
maybe another thirty dollars. So now Corey, you're trying to
sell that product for one hundred and sixty dollars that
(17:30):
maybe you were able to sell for one hundred and
thirty dollars a month or so ago before the tariffs
kicked in. This is the importance of this PPI report, guys,
and that is it is a forward looking indicator, so
CPI is more of a rear view, right. So what
we can say is, if this PPI number was hotter
and Dwight's cost to make this product in widget are
(17:50):
going to be more then shooting CPI. Can't we be
very confident that CPI is going to be hotter in
the month of August because of the whole sale cost
of the month of July. Makes sense your head, it.
Speaker 3 (18:06):
It should, and that's the struggle that Jerome Pal's going
to have, and that that goes back to these arguments
which make no sense to me that if you listen
to the administration, the company's not going to pass it
to the consumer. The company's not going to eat it.
So I'm not sure who's eating it, But they they
think the guy who made it in Vietnam is God
(18:28):
for some reason the other day. But somebody has to
eat it. And as you mentioned, the margins are so
thin right now. Even if the producer wanted to eat it,
they can't eat the whole thing. It's impossible. So it's
going to get passed along. There's no way to do.
The other thing I don't understand, and we haven't really
talked about it, is they keep talking about it's not inflation,
it's a one time price spike. Well, that's inflation. Like
(18:51):
if my widget costs one hundred and that I know
it's not going to keep ongoing, but it's still it's
still cost me fifty percent more to buy the widge.
Speaker 1 (19:00):
That's right, that's right. You know, if inflation goes down
the month after you buy that that we'd whacker, we'd
whip up. No one sending you a refund check, right, Corey. Right,
it's money out of your pocket that you don't have
to spend on something else or or something.
Speaker 3 (19:13):
And you're squeezing a consumer that, as Dwight will tell us,
is already squeezed to the max.
Speaker 1 (19:18):
Absolutely, absolutely, And.
Speaker 2 (19:20):
In the meantime, John I've gone out of business, right.
Speaker 1 (19:23):
That's right, that's right. Right, You've tapped you've tapped your
credit line, Dwight, because most businesses don't have enough working
capital lists there, you know, large large corporation, they don't
have enough working capital to absorb, you know, going out
and spending that twenty percent on the tariff and so
on and so forth. So what are you doing. You're
going to your banker and going, hey, mister Baker, I
need to borrow another you know, half a million dollars
this month because I got to pay customs, you know,
(19:45):
a whole bunch of money, just just to open up
my you know, open up my my sea container that
just came in from wherever, China, Vietnam, India, wherever it
may come in from. Right. And that's why exactly I
want to go back to your point very quickly, Corey.
That's what just gets me and boils my Mexican blood
when I hear the FED, when I hear these quote
economists on TV that you know, economists to me or
(20:06):
I won't go there. But when they say, oh, but
we've had a voting fair member today, tariff inflation should
only last one to three quarters really, and how do
you figure that? Because in tariffs are going nowhere, they
are gonna either stay the same that they're gonna go
up because we, thanks to Donald Trump, we've uncovered this
(20:30):
this ATM machine that we will never give up. I
don't care whatever happens. Once that tariff is set for
a country. I guarantee you that number will never go down.
That's why he's being so specific on tariffs, because he
wants to stick to that. You know, if you X,
y Z country is going to pay a twenty percent tariff,
don't think for a moment that a few months or
a few years are gonna go by and we're gonna go, hey,
(20:52):
drop that twenty percent tariff down to five percent. Uh uh.
We're used to that money coming in. It's you know,
So it's a It's a real quandary, guys. It is
a tax, no matter what you say. It is a
touch and the consumer pays it. I just hope all
of you remember that the consumer is the ultimate one
that is going to pay the terror. The risk is
on the the the entrepreneur I eat Dwight in this example,
(21:15):
and then the risk is on the consumer I e.
Corey in this example, because they're all paying it deights
trying to recoup all that money he just lent out. Dwight,
don't forget. You know, you're not borrowing money from your
bank for free, so we're not even factoring in borrowing costs.
Right for you to go out and get that extra
three four five hundred thousand dollars working capital alone to
pay the customs to part and the.
Speaker 3 (21:35):
Other important thing I think too, I mean back to
your world. So the consumer is going to pay whatever
he's got fat four oh one case. Well, if the
if the widget maker decides to eat it, that's going
to eat into their bottom line, which is going to
take that stock price plummeting. So absolutely either way, even
if the consumer doesn't eat the tariff on the product,
they're going to eat it in their four oh one
(21:56):
k plans. Right, the consumer eats it all no matter what.
Speaker 1 (21:58):
Always, Yeah, you know, you know what flows downhill, and
unfortunately consumers are we are at the bottom. We are
at the bottom of it. Great dialogue, guys, Let's keep
it going. When we come back, let's turn it over
to Jack saving he's got news traffic and with her. Hey, Jack,
welcome back to the John Sanchez Show on his talk
seven eighty KOI is with Dwight ma Lord of Highlands Mortgage,
Corey Edge of Israelaiti. Once again, we finished down eleven
(22:19):
on the Dow, lost two on the NASA, can gain
two to a record finish on the S and P
five hundred. All right, we're having a great lively debate
going on in the markets right now. Housing market. I'm
referring to is it time to buy and or sell
in real estate? A lot of moving parks, parks. We
just had a great discussion at the previous break or
previous segment where we were discussing again this PPI number
(22:41):
that came in this morning, much hotter than expected, what
it's doing at this point as far as the future
potential of a Fed interest straight cut in the month
of September stole over a ninety percent probability at this
point did come down from yesterday. You know, obviously we
had the PPI this morning, but Corey I wanted it
to go back to the point you just we were
chatting about during the break. I think it's a very
(23:03):
very valid point, and that is, if we get a
slowing labor market. Now, what brought this conversation up is
again we were a break is we know the President
fired the head of the Bureau of Labor Statistics, the organization,
the government organization that creates the non firm paile numbers
that we get once a month. We know he fired her.
(23:24):
And now it looks like this fellow EJ. I forget
his last name, Heritage Foundation economist, very much of a
Trump guy. They said that he was. They got video
of him, you know, January sixth, walking around the White House,
but he was this there supposedly as an observer and stuff.
But you brought up a great point that I think
(23:44):
we need to bring to the table, and that is
and again I apologize to be disrespectful, but we'll just
call him EJX. I can't I can't remember his last name.
But EJ is saying, look at this data is so bad.
You know, he's nominated now by the President. He has
to get confirmed by the Senate, but it's pretty well
umed he's going to get the job here. But he
was saying, look at this data is so bad. The
(24:04):
system is so archaic and so on and so forth,
that we may not release on a monthly basis. We
may go a quarterly or maybe nothing at all until
we get the system fixed. Now, that will be disastrous
if that news comes out and they say we're not
giving you the data on a monthly basis, We're going
to do it quarterly, or hey, we don't know when
(24:26):
the next report is going to come out. Almost like
when a corporation says we can't release our financial statements
to the SEC because we've got some you know, some
audit problems or whatever. The case may be, almost the
same type of thing, and bottom line, it will not
be good. And so let's let's Corey the start with you.
Let's get your reaction if EJ does decide to postpone
non for our payroll data and so on and so
(24:47):
forth going forward for the next couple of months.
Speaker 3 (24:49):
I think you're only saving grace right now. Within that
little group of guys. Is Scott Bessa has been. I
can visualize said, why can go and listen, you can't
do this unless you want decline, you know, And that's right.
I'm sure they'll talk them out of it. But it
just not that we need to go off on the
site tagent, but the whole thing. If the next job
(25:09):
report comes out and shows that you know, two million
people who are hired and unemployment is down to zero,
Like is anybody going to believe it? So the whole
thing is just right.
Speaker 1 (25:19):
Well that's the problem now Now the credibility. Now the
credibility whether it's true or not, which I don't think
there was a problem with the data. And I'll tell
you in a second. EJ and Toni's his last time,
So I apologize. But you know we were chatting during
the break also, and I was telling Corey and Dwight,
you know, sign an interview I think it was a
week or so ago with I think her last name
is Chance. She was head of the BLS under the
(25:41):
Biden administration, really really sharp Gallvin around a long time
and she's like, there is no way and you know
what that those numbers can be manipulated. She said, you know,
there's a lot of hands looking at the numbers, but
she said, you get about thirty about three weeks away
from the release of the numbers, because there's only forty
people that have any insight as to what those numbers are,
(26:05):
and the way that checks and balances are set up,
no one can manipulate the numbers. I mean, you can't
go in there and go, oh, not two hundred thousand
job growth, you know, three hundred thousand. You just can't
do it. So but once this has come out, once
Trump fired the previous head of the BLIST, now that
credibility comes into play. But I'm telling you guys, you
watch this, especially if mister Antoni decides to postpone the numbers,
(26:28):
to say on a monthly basis or to on a
quarterly basis, You watch and see Wall Street's gonna come
out and they're going to go, well, hell, what government
numbers can we believe? I mean, if it happened in
BLS numbers, what other ones do we trust? And it's
so on and so forth and hold on in The
conspiracy theory, of course, is that Trump is trying to
hide these numbers, right, that the numbers really are bad,
(26:50):
and he's using this excuse to had fired and bring
on kind of his own guy who now may postpone
those numbers. Because folks, I can't tell you how important
the nonfarm pay numbers are to portfolio managers, banks, government
entities around the world to making their decision. If that
data is delayed, you know, a quarter or quarters my goodness,
(27:10):
and then again the validity of all the government reports
come in to.
Speaker 2 (27:15):
But what's worth the disease of the cure. You can't
keep going down the road you're going, John, I mean,
you can't have an adjustment of eight hundred and eighteen thousand.
I mean that's like I would fire my wife if
you told me on Friday we have ten thousand in
the bank and on Tuesday, no, I lie, we have
fifteen hundred.
Speaker 1 (27:31):
I agree, I agree right to, I mean going to fire.
Talk to the audience what you're talking about, though, Dwight.
You just jumped ahead about this revision.
Speaker 2 (27:38):
The revision so they do an annual revision in September, right,
and last year it was eight hundred and eighteen thousand.
You and I were talking off airon Corey that we
wouldn't be surprised if they had another large revision annually.
So I mean, I don't think I agree with me.
I agree with you Corey that we can't you cannot
report something. But if you're going to report it wrong,
(28:00):
and you're gonna be really gross.
Speaker 1 (28:02):
Wrong, I don't know, well, I don't know what I
what I said during the break, and I'll share it
with the audience is the reason they're saying these numbers
are wrong is because they're getting very few businesses. Only
about sixty percent are filling out the survey and returning
it in time or on time. Okay, So where BLS
(28:23):
gets this data. They send out a survey to businesses
and they go, you know, how many people do you
have on payroll? You know, all these different questions, and
if they're not getting the respondents back, responses back, they
don't have accurate numbers. But real quickly, do you bring
up an excellent point? September which is historically kind of
a you know, chopping month, sometimes very lousy month in
the market. If we get that that revision, and I
(28:44):
haven't seen any estimates, I would not be surprised if
it's another seven eight hundred thousand revision, meaning fewer jobs
than than previously announced over the last year, I wouldn't
be surprised that if mister Antoni goes, you know what,
we're not issuing this revision, We're not issuing the non
from payroll numbers for the next couple of quarters. That
way they can avoid that whole mess.
Speaker 2 (29:03):
Well, no, go ahead and tell what it is, and
that gives all the more power for Trump to get
that one percent. Inter No, but there's your there's your
rate cut. You've lost all these jobs you thought you
were gaining.
Speaker 1 (29:15):
Yeah, there you go. Absolutely all right, let's wrap it up.
Let's turn it over to Christen Snow. We're right now
traffic center. Hello, Christin, Welcome back to the John Sanchez
Show on Newstalk seven eighty K which MS Malarge. Your
phone numbers are two four zero two zero two two.
Speaker 3 (29:31):
Mister edge six seven three six seven zero zero beautiful.
Speaker 1 (29:35):
All right, again, we've had a great discussion kind of
looking at all of this from a buy sell standpoint. So, guys,
I did dig up during the break. I wanted to
just bring this up because I said I didn't know
what the probability of the September cut is. Yesterday it
was ninety nine point nine percent. After this morning's how
did an expected PPI report? Now it's dropped down to
(29:56):
ninety two point six percent from the CME fed watch tool.
So anytime you're above ninety pretty good probability. But Corey,
I want to start with you as we wrap things up,
and that is based upon everything we've discussed as far
as tariff's inflation rates. And again to emphasize the point
that if we do get a quarter percent cut in September,
don't think, by any stretch of the imagination that you'll see,
(30:19):
you know, Dwight coming on this show, going, hey, we
just dropped a quarter percent on the thirty year mortgage.
It's not going to happen, because, again, the bond traders
are looking That's why we talked a lot about inflationary
data today. The bond traders are looking at the inflationary data.
They don't give a damn to be honest with you
about what the Fed's doing. They really don't. They're like,
we trade bonds based upon data, where it is, where
(30:40):
it's going, and so on and so forth. So Corey,
with all that said, the person that's going, okay, wait
a minute, Corey, John Dwight a week ago said when
he did the local data that you know, round fourth
of July is kind of the peak for the market.
And now we are, you know, mid August. Do I
really want to try to sell my home right now?
Speaker 3 (31:00):
With your advice, again, if you price it right, it
will sell. What is the correct price may not be
to your liking to some people it is to some
people it's not. But I always tell people just because
we're kind of in the downward trajector going to the
holidays doesn't mean the market goes away. You just need
to price it effectively if you want to ask an
aggressive price, and you don't have to be out right away.
(31:21):
I've had a few clients just in the past week
they're like, Hey, let's tackle this in February or March.
Let's see what happens. Let's get back to the spring.
So two different camps. Some that have to sell, you've
got no choice, Others that are like, I don't need
to sell, so I can sit tight till spring.
Speaker 1 (31:37):
Would you get on the phone, Let's say, do I
college up and goes Corey today? You know, I'm just
gonna say, maybe a month from now is hypothetical. Okay,
remember a month ago Corey thirty years at six point
five six percent, where it closed that today Corey, we're
now down due six and eight six and a quarter.
Would that prompt you to pick up the phone to
call some of these people that are kind of, you know,
(31:57):
waiting to see on that or is it that even
that important to them?
Speaker 3 (32:00):
I don't think that that that little of a decline
is going to matter much, especially if it happens in
a month or two months, because you're right in the
heart of the holidays, so there's just not much happening.
Speaker 1 (32:10):
Okay, Dwight. If you're a buyer, as we said at
the beginning of the show, first step is they have
to reach out to you or any other mortgage professional
and get that pre call letter. Because other than that
and the Corey, I was going to throw this before
I turned into Dwight, you aren't even gonna talk to
anybody unless they got a pre call letter. I mean,
assuming there's somebody off the street, right Corey.
Speaker 3 (32:26):
No, No, exactly, And that's standard for the industry exactly.
Speaker 1 (32:29):
So Dwight, what's that pre caull letter? How long is
it good for? This refresh everybody's memory.
Speaker 2 (32:33):
Yeah, so the prequeller credit's good for one hundred and
twenty days. So I mean, I feel pretty good when
I give out a pre call letter that you know,
you're good for one hundred and twenty days based on
that price. And we can talk to the age. Corey
and I talk a lot, you know, can we do this?
We do that. But John We always say you marry
the house and you date the rate. Right here's my
fear right now, Right now, you're getting a lot of concessions.
(32:55):
If the marketings to start shifting to a seller kind
of maybe even a balanced market, those concessions are going
to go away. You can always refinance. Corey said last
week we were talking pricing has stabilized, it's not, you know,
in some areas it's actually kind of decreased a little bit,
you know. So, I mean, I'm always a fan of
(33:16):
buying right now, especially if you need housing. If you
need I mean, if you really are okay where you're at,
you don't really need to do it. You're just doing
it to do it. Probably not a good idea. But
if you're I mean, I don't know, if there's ever
a bad time, you know, to buy when it comes
to race because you could always redo them.
Speaker 1 (33:32):
Yeah, that's a great reminder. Yeah, all right, guys, excellent,
excellent discussion on all this. I mean, this is something
everybody needs to be thinking about. Yeah, we have seasonal
we have the holidays and things, but bottom line, people
are looking to make money or save money on the
buy side, So consult with Corey Dwight, you will go
down the right path. I promise you that had to
blast with you boys today. God bless you have a
(33:52):
great weekend. We'll do it again tomorrow on The John
Sanchez Show. Dwight Millard and mls ID number two four
one nine a license mortgage loan officer with Highlands Residential
Mortgage Limited and Equal Housing Lender and MLSID number one
three four eight seven one. The information shared on this
live broadcast is for general information purposes only and does
not constitute financial or mortgage advice. Listeners should consult directly
(34:15):
with a license mortgage professional for guidance tailored to their
specific situation. All loans are subject to credit approval and
program guidelines. Not all applicants will qualify. Loan terms in
availability may vary by state and are subject to change
without notice. Highlands Residential Mortgage Limited is licensed in multiple states.
For a full list of state licenses and disclosures, please
(34:35):
visit https slash slash www dot Highlandsmortgage dot com backslash
licenses backslash. The views expressed during this program are their
own and do not necessarily reflect those of Highlands Residential
Mortgage Limited.
Good Thursday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty k which it's a
pole leisure to be with you and a pleasure to
be with my co host around the horn. We shall
go look at debonair with his glasses. Well, you just
took him off. He just made me. I was just
complimenting you. How good your look there you go? How
good you look for those glasses on Dwaton.
Speaker 2 (00:19):
Lord, thank you, John. How are you doing today?
Speaker 1 (00:23):
We're battling. We're battling, but we're doing good. We're doing
good and hanging in there.
Speaker 2 (00:26):
It was a hot topic for yesterday, but today Jason.
Speaker 1 (00:30):
Huh you mean the the when you're low of mortgage rates?
Speaker 2 (00:35):
Yeah?
Speaker 1 (00:36):
Yeah, did you? But because I checked her? Oh you
did it Jeans at the last minute, So of yeah,
all right, a little bit enough. We're close enough, all right,
mister Corey Edge eventually, how you be, sir?
Speaker 3 (00:49):
I'm doing good. How are you doing it?
Speaker 1 (00:50):
Very good? Got the cup of coffee going there? I
see it's off.
Speaker 3 (00:53):
To the side here. Of course, I got a pot
bruin just in case this one.
Speaker 1 (00:56):
Run there backup plan. But I like it. I like it.
It should be.
Speaker 3 (01:02):
It should be asleep by midnight, not by three.
Speaker 1 (01:07):
Geez, you get that much sleep three hours?
Speaker 3 (01:08):
Come on, I know I'm getting all.
Speaker 1 (01:12):
Yeah, that's right, that's right.
Speaker 2 (01:13):
I hear you. Then you don't sleep at all.
Speaker 1 (01:15):
Right, then you don't sleep at all. Yeah, you get
in the middle pe and five times. Luckily I'm not
there yet. I just want to clarify that I sleep
through the night like a baby. So I'm not not
quite there yet, but uh, you know, just prepared, prepared,
It's coming, it's coming. Alrighty fellows, let's tell everybody what
we have lined up for all of you this afternoon,
(01:35):
and thanks again so much for joining us. Were, of
course going to recap what happened in today's market activity,
the wackam old games I'll call it, and I'll tell
you why. But first let's get to the real estate topic.
You know, two very very very positive things have happened
in the last forty eight hours in the world of
real estate. One of those, the mortgage application data, showed
that mortgage applications for the weekending August the ninth, surging
(01:57):
ten point nine percent. See what all of you do
when just rates come down just a little bit. You
just you get off the fence and you get out there.
Good for you. Now, the second big event that's happened
besides that is mortgage rate. So this is what Dwight
was just jabbing me about. Here. When I created the
show teas this morning, we were down about three basis points.
(02:20):
A matter of fact, we were unchanged, Dwight. So you
got that little bump up, like I said, long after
I created this topic, So I apologize, but we're close enough.
We're there fifty two week low on the thirty year mortgage.
So with all that said, you guys are surging. You
want to get out there, you want to buy. Sellers,
listen closely. It may be time to list and time
(02:41):
to negotiate. Notice we threw in the word negotiate because,
as Corey will explain, the last thing in the world
that's gonna happen is you're gonna put your price out Well,
for the most part, you're gonna put a price out
there and someone's gonna come up and go, hey, that's right,
I'll give you that seven hundred thousand dollars for a
full offering price, right, Corey. Those aren't the days we're
in it's yeah, let's start at the seven hundred. I'm
(03:02):
going to negotiate you down to whatever, six eighty or somewhere.
And by the way, I want five or ten or
twenty thousand dollars in concessions. That's the real world, right, Corey.
Speaker 3 (03:11):
If the house is worth seven hundred, they will pay
you the seven hundred.
Speaker 1 (03:14):
If no one ever sells their house for what it's worth.
Speaker 3 (03:16):
Oh they don't. They don't start that way. Eventually, eventually
they sell it for what it's start.
Speaker 1 (03:22):
That's that's et.
Speaker 3 (03:25):
There are some people in the market. I get clients.
I'm sure every real tri gets clients that are like,
you know, yeah, I do think it's only worth five hundred.
Let's go with that. Get three offers, take five oh two,
and there you go.
Speaker 1 (03:35):
Yeah wow, wow makes so much easier. Yeah, ye, but
I bet it does. Those are the kind of clients
you like. Well. The second thing besides you sellers getting
ready to put the house on the market. And again,
as Corey just a highlighted a couple of days ago,
you know the peak selling season has already happened, right,
he said, it was the beginning of July. Here we
are August, the fourteenth. So that doesn't mean, though, you
can't get that household. So we're gonna give you some
(03:56):
ideas about that. But the second one follows over to
my dear friend Dwight Millart, and that is, you got
to get the pre approval letter if you're going to
be on the buying side of things, right, if things
start to heat up again, you got to come into
the deal with that letter. You have to have it.
No one's going to pay any attention to you. Is
Corey will explain if you do not have that and say, oh, yeah,
don't worry, I've got the assets for the down payment.
(04:17):
And so no, no, no, no, no no, You've got to
get a letter from your lender that you are pre
approved to even have anybody talk to you much less probably,
like Corey has said. And Corey, I want you to
go into explanation on this. If a realtor will even
spend much time with you, right, I doubt they're going
to take the time to go out and show your
properties and do things like that again if you don't
have that pre approval letter. So I'll let Corey explain
(04:38):
all that. So those are the two main things going on.
But what we want to kind of talk about the
other point guys. I want to really emphasize that we
get across because we're getting a lot of questions about this,
and that is those that are so convinced that if
we get this FED interest straight cut in September, is
the FED Futures contract is indicating we're going to that
we're automatically going to see Dwight, your mortgage rates come down.
(05:02):
And that is the farthest thing from the truth. And
we're going to give you an explanation why, because we
don't want you to be sitting on the sidelines right now.
If all the other parameters in your life say it's
time to move right, we're busting at the seams, or
we need to downsize, whatever your personal reasons are, the
last thing we want you to do is to sit
back right now and go I'm gonna wait until that
(05:23):
FED meeting in September. Because Sanchez has been saying the
street is going to give us a is voting and
pretty accurately over ninety percent probability that we're going to
get that quarter percent cut. So hey, you know what,
the thirty year mortgage today's at six fifty six let's
see if we get a quarter percent cut. Hey, I'm
going to be down in low sixes. No, you cannot
believe that. You hopefully will see some reaction. But I
(05:44):
underline the word hopeful, because that's all it is. Remember,
and Dwight's going to go through this explanation along with myself.
The mortgage market, the type of bonds and things that
create with the pricing of these thirty year fixed mortgages.
They are bonds. Bonds have a life in and of
their own right, Dwight, outside the scope of what the
FED is doing, we can give you and we won't
waste the time go back into history and say FED
(06:07):
gave us a cut, bond yields go up. FED didn't
do anything. Bond yields go down. Remember, these bonds are
driven by economic activity. And we've had two very important
reports in the last forty eight hours. We had two
days ago the CPI report, great report, market rallies. Today
we get PPI not a good report, this terrible report.
I'll go through the details and what happens. The market
(06:29):
just barely budges. And again I said the term whack
a mole, that's what it was today. We'd go up
for a little bit, then boom, here come the seller's
market go down. Boom, here comes the buyer. So up
and down and up and down, and we barely budge
one was all said and done. Eleven point loss on
the down, down two on the Nasdaq, up to on
the S and P five hundred. So this market was
very uncertain, guys, And I'm glad we had this PPI
(06:49):
data to talk about today because market's very uncertain. How
we digest this because we did see the FED futures
contract probability of the rate cut come down a little bit.
We're still north of ninety, but it did come down
from yesterday. And so you know, again this is just
a prime example. Could we actually, Dwight, could we see
these rates go up if the Fed now people are
(07:09):
concerned that we may not get that cut in September.
But remember, guys, as we discussed Jason and I discussed
on the show yesterday, the street now actually has pegged
in some strategies have pegged in three interest straight cuts
right September, October, and December. No one is talking today
about the December one. I think that one is off
the table. And those who believed in that I did,
(07:31):
and I said two would be great. But remember, I'm
sure you guys saw this also yesterday. Yeah, some strategists
come out in a comma say, you know what, half
a percent cut at September and then you know, maybe
quarter percent in October. And I said on the show yesterday,
I had a client asked me about this in the morning,
so I brought it up on the show yesterday. I'm like, no,
we do not want a half a percent cut, do
(07:52):
I said, there shaking and said, no, we do not
want a half a percent cut in September. Sounds great,
but once again, what we'll do so we'll create panic
in the on market. It'll create panic in the stock market,
because that's gonna tell the street, uh oh, the feta
see something in the horizon. And therefore we've got to
be very aggressive and just jump in both feet, you know,
and give that half a percent cut. So there's a
(08:14):
lot of things going on today and we just, like
I said, we don't really have a set topic other
than is it time to buy and or sell in
this market? And you know, and that's really what we
want to go across. So you're gonna hear us a
touch on a lot of different things, but it all
comes together. It all comes together as to helping you
make your decision again to buy, sell, whatever side of
the camp that you're on. So with that said, guys,
(08:37):
let me just kind of real briefly jump into the
stock market side of things today. I kind of let
the cat out of the bag as far as what
we dealt with. Let's go through the PPI report because
this was an interesting one, and Corey and Dwight, I
know you were watching this closely. So the number came
out at five point thirty this morning. And remember we
we we came off of a very strong session yesterday,
We came across or came off of a very strong
(08:58):
session the previous day, up almost a thousand points on
the Dow between those last two sessions, so we had
all kinds of momentum going. So here comes the PPI report.
Everyone's like, including myself, I'll admit it. I was wrong
on this one, I thought, because it's always been I
shouldn't say always, but recently ppi's been matching CPI, lock
Stock and Barrel both on the headline number and the
core restrip out the food and energy farthest thing from
(09:21):
the truth happened with that one today? Right? Remember CPI
said we were up two tenths of a percent month
over month. PPI today up nine tenths of a percent.
But you know, Corey and Dwight. One thing that I
brought to everyone's attention on the stock up dates this
morning with Ross Mitchell was I mean I had CNBC
on all day, as I do each and every day.
I did not hear any strategist bring this point up.
(09:42):
And I think it's a very valid one, and I
brought it up on my stock updates, and that is
this from May to June PPI was unchanged, right, so
we had a goose egg in June's report. Now we
jump up nine tenths over percent, So folks, that's almost
a you know, that's a significant right do I significan
that can't move in inflation in one month from zero
(10:03):
to up nine tenths over percent. So that was the
first thing that got everybody. The second one is we're
still sitting at three point three percent year over you know,
year over year, so we're a long ways away again
from the Fed mandate. The second point of two percent,
The second point I want to bring up is remember this.
Everyone the FED looks at this number and they go, hmmm,
(10:27):
we got PPI up very strong, way out of expectation.
We had CPI that came in line with the expectation.
So what the hell are we going to do?
Speaker 2 (10:36):
Right?
Speaker 1 (10:37):
Why are we going to succumb to the street, succumb
to President Trump? Give the street a quarter percent cut
if inflation's lurky? And this is the point I want
to hit on when we come back. I want you
guys just to hear me out. I'm sorry to be
taking up all of your time here, but I think
something else that no one is paying attention to is
what is the future holding? And I hope the Fed
is going to consider this. What is the future holding,
(10:59):
folks when wholesale inflation is rising faster than consumer CPI inflation?
And I'll leave you with that little tease. I got
some interesting theories on that one. All right, this's turned
over to Christen Snow. She's in the right now traffic center. Hello, Kristen,
Welcome back to the John Sanchez Show on News Talk
(11:19):
seven eighty. Ko waits with Corey Edge, Vigrility and of course,
the white lard of Highlands Mortgage once again. We finished
it very quiet. It looked like we didn't do anything today,
but trust me, intra day, there was a lot of
things going on. So we finished down again eleven other down,
lost two on the Nasdaq and a two point game.
But Dwight, what kind of day and what kind of
closed was it on the n S and P five
hundred with that two point game?
Speaker 2 (11:39):
How bet it was another record setting day.
Speaker 1 (11:41):
You're absolutely right, it was another record setting day with
a two point game. All right, let's go to the
commodity side of things. Gained a buck thirty three on oil,
a bit strong there, sixty three to ninety five of
a barrel, down about twenty five dollars on gold three
thousand and three eighty three twenty and mister Millard over
to the ten year chersury up six basis points four
point nine percent. This again, was one of the problems
(12:02):
with this PPI report. Today we saw those bond prices
plummet because you don't want to own bonds if there's inflation,
that of course drives those yields up.
Speaker 2 (12:10):
Yeah, John, and I was hoping it was going to
go the other way. Could you imagine if it would
have came in line or under. But uh, you know,
according to Mortgage News Daily today, six point five six
on the thirty year fix and the fifteen year five
point ninety four, and then the fahas vas are at
six point one point five. So we're still, you know,
we're not too far off of what we were earlier,
(12:32):
you know, last week. So, I mean, I like it,
this is what's driving the applications. Yeah, we don't need that,
we don't need that bumping the road again.
Speaker 1 (12:40):
But you know, guys, when when when I was researching
the mortgage apps, could remember, folks, mortgage apps come out
there for the previous week, and they come out Wednesday morning,
so we just you know, got it yesterday. And I
saw that ten point nine percent increase, We're like, wow,
that that is phenomenal. I mean, that is a huge
I don't know quantity wise how many of that is,
but I I imagine it's a significant actual quantity number.
Speaker 2 (13:03):
Well, John, if you go into these big builders, especially
the nationals, they've got these clients all lined up. It's
almost like when the rate hits here, call me and
they're just they're just dialing for dollars based in I mean,
so it'd be interesting. You know how many of those
applications were driven from the builder communities, you know, nationwide.
(13:24):
But yeah, but that's what they do. They sit there
for eight hours and they just keep that Hey, rates
have gone down. They follow exactly what they get a script.
Speaker 1 (13:32):
Okay, okay, yeah, very good. Okay, guys, I want to
I want to explore something again. We're just gonna if
you just join us, we're gonna be kind of be
bopping around this whole theme right now, which is is
it time to buy and or sell real estate? Right
based upon the anticipation of the FED cut in September,
maybe another one in October. Uh, this inflationary data, so
(13:53):
on and so forth. So a lot of different moving parts.
But I want to go back to a concern that
I have, and especially it was validated today after this
PPI number. So once again, if you just join us,
let me hit this number one more time. PPI, which
is the measure of inflation. So if Dwight's a business,
this is what he says, on average, my costs have
increased nine tenths of a percent. And there's a lot
(14:14):
of ingredients that go into that number. So just take
it for granted. Nine tenths of a percent increase. Okay, Now,
once again, as I said before we went to break,
this was July compared to June. But if you go
June compared to May, that was zero percent. So nine
tenths of a percent increase in one month is staggering.
But here's what concerns me that a lot of people
are not talking about guys, and that is this point, Dwight.
(14:38):
I'm going to use you as a business. And let's
say you make a widget, right, and like I said,
that widget now cost you nine tenths of a percent
more to make because of your wholesale costs. That is
not factoring in, but it may be a contributing factor
of tariffs. Right, but wholesale inventory or wholesale inflation, that
(14:58):
doesn't have anything to do with tariffs. But I say
it may have a piece of it. For you know,
if you go way deep into the supply chain, you
may be paying more, Dwight, for your you know, to
manufacture your widget because one of your suppliers, for example,
is paying a tariff and they're passing that cost on
to you in a higher wholesale cost. And you know,
you see how it just kind of factors in But
(15:20):
to the point I want to get to, and that
is this, So Dwight, I wanna let's let's put this
in a dollars and cent So let's say it costs
I don't know, one hundred dollars for you to make
this widget a month ago. Now it costs you one
hundred and ten dollars to make this widget, okay, because
of the wholesale costs have gone up. But now you
(15:41):
go to the port of Long Beach, Port of Los Angeles,
any of the ports you know, back in Texas, wherever
it may be that you pick up your product or
your your your goods. And now let's just say I
think a good average teriff rate is twenty percent. Okay.
So now, remember, folks, how the tariff situation works. If
de White has to go to the port to pick
up his product, he has to write a check or
(16:04):
do a wire transfer to the Customs Department of the
United States of America for that twenty percent tariff. And
let's say on that one hundred and ten dollars widget,
let's say that tariff is another you know, I'll just
say twenty dollars, okay, So Dwight you're now one hundred
and thirty You're now thirty dollars more to produce your
(16:25):
widget and you haven't even sold it yet. Everybody follow me.
Twenty percent increase because of the tariff that you've had
to charge. And again we'll just round it up another
nine ten seven percent increase on the wholesale cost of
your ingredients to make your widget. Okay, so now you're
into this thing for one hundred and thirty bucks. Dwight
just wrote that check or wired that money. Like I
(16:46):
said to the Customs department, he is out that money
as a retailer or as a manufacturer. Dwight is hoping,
like heck that Corey, who has been a great customer
of Dwight's factory for many, many years, is able to
take that one hundred and thirty dollars cost now and
put it on his shelf and sell that widget for
(17:09):
I don't know what's an average markup of a product
twenty thirty forty percent. So Corey, let's say now that
product that you just had to pay Dwight one hundred
and thirty dollars for that you were used to paying
one hundred dollars for, You're going well, jeez, I got
to add my markup to that, So let's add on
maybe another thirty dollars. So now Corey, you're trying to
sell that product for one hundred and sixty dollars that
(17:30):
maybe you were able to sell for one hundred and
thirty dollars a month or so ago before the tariffs
kicked in. This is the importance of this PPI report, guys,
and that is it is a forward looking indicator, so
CPI is more of a rear view, right. So what
we can say is, if this PPI number was hotter
and Dwight's cost to make this product in widget are
(17:50):
going to be more then shooting CPI. Can't we be
very confident that CPI is going to be hotter in
the month of August because of the whole sale cost
of the month of July. Makes sense your head, it.
Speaker 3 (18:06):
It should, and that's the struggle that Jerome Pal's going
to have, and that that goes back to these arguments
which make no sense to me that if you listen
to the administration, the company's not going to pass it
to the consumer. The company's not going to eat it.
So I'm not sure who's eating it, But they they
think the guy who made it in Vietnam is God
(18:28):
for some reason the other day. But somebody has to
eat it. And as you mentioned, the margins are so
thin right now. Even if the producer wanted to eat it,
they can't eat the whole thing. It's impossible. So it's
going to get passed along. There's no way to do.
The other thing I don't understand, and we haven't really
talked about it, is they keep talking about it's not inflation,
it's a one time price spike. Well, that's inflation. Like
(18:51):
if my widget costs one hundred and that I know
it's not going to keep ongoing, but it's still it's
still cost me fifty percent more to buy the widge.
Speaker 1 (19:00):
That's right, that's right. You know, if inflation goes down
the month after you buy that that we'd whacker, we'd
whip up. No one sending you a refund check, right, Corey. Right,
it's money out of your pocket that you don't have
to spend on something else or or something.
Speaker 3 (19:13):
And you're squeezing a consumer that, as Dwight will tell us,
is already squeezed to the max.
Speaker 1 (19:18):
Absolutely, absolutely, And.
Speaker 2 (19:20):
In the meantime, John I've gone out of business, right.
Speaker 1 (19:23):
That's right, that's right. Right, You've tapped you've tapped your
credit line, Dwight, because most businesses don't have enough working
capital lists there, you know, large large corporation, they don't
have enough working capital to absorb, you know, going out
and spending that twenty percent on the tariff and so
on and so forth. So what are you doing. You're
going to your banker and going, hey, mister Baker, I
need to borrow another you know, half a million dollars
this month because I got to pay customs, you know,
(19:45):
a whole bunch of money, just just to open up
my you know, open up my my sea container that
just came in from wherever, China, Vietnam, India, wherever it
may come in from. Right. And that's why exactly I
want to go back to your point very quickly, Corey.
That's what just gets me and boils my Mexican blood
when I hear the FED, when I hear these quote
economists on TV that you know, economists to me or
(20:06):
I won't go there. But when they say, oh, but
we've had a voting fair member today, tariff inflation should
only last one to three quarters really, and how do
you figure that? Because in tariffs are going nowhere, they
are gonna either stay the same that they're gonna go
up because we, thanks to Donald Trump, we've uncovered this
(20:30):
this ATM machine that we will never give up. I
don't care whatever happens. Once that tariff is set for
a country. I guarantee you that number will never go down.
That's why he's being so specific on tariffs, because he
wants to stick to that. You know, if you X,
y Z country is going to pay a twenty percent tariff,
don't think for a moment that a few months or
a few years are gonna go by and we're gonna go, hey,
(20:52):
drop that twenty percent tariff down to five percent. Uh uh.
We're used to that money coming in. It's you know,
So it's a It's a real quandary, guys. It is
a tax, no matter what you say. It is a
touch and the consumer pays it. I just hope all
of you remember that the consumer is the ultimate one
that is going to pay the terror. The risk is
on the the the entrepreneur I eat Dwight in this example,
(21:15):
and then the risk is on the consumer I e.
Corey in this example, because they're all paying it deights
trying to recoup all that money he just lent out. Dwight,
don't forget. You know, you're not borrowing money from your
bank for free, so we're not even factoring in borrowing costs.
Right for you to go out and get that extra
three four five hundred thousand dollars working capital alone to
pay the customs to part and the.
Speaker 3 (21:35):
Other important thing I think too, I mean back to
your world. So the consumer is going to pay whatever
he's got fat four oh one case. Well, if the
if the widget maker decides to eat it, that's going
to eat into their bottom line, which is going to
take that stock price plummeting. So absolutely either way, even
if the consumer doesn't eat the tariff on the product,
they're going to eat it in their four oh one
(21:56):
k plans. Right, the consumer eats it all no matter what.
Speaker 1 (21:58):
Always, Yeah, you know, you know what flows downhill, and
unfortunately consumers are we are at the bottom. We are
at the bottom of it. Great dialogue, guys, Let's keep
it going. When we come back, let's turn it over
to Jack saving he's got news traffic and with her. Hey, Jack,
welcome back to the John Sanchez Show on his talk
seven eighty KOI is with Dwight ma Lord of Highlands Mortgage,
Corey Edge of Israelaiti. Once again, we finished down eleven
(22:19):
on the Dow, lost two on the NASA, can gain
two to a record finish on the S and P
five hundred. All right, we're having a great lively debate
going on in the markets right now. Housing market. I'm
referring to is it time to buy and or sell
in real estate? A lot of moving parks, parks. We
just had a great discussion at the previous break or
previous segment where we were discussing again this PPI number
(22:41):
that came in this morning, much hotter than expected, what
it's doing at this point as far as the future
potential of a Fed interest straight cut in the month
of September stole over a ninety percent probability at this
point did come down from yesterday. You know, obviously we
had the PPI this morning, but Corey I wanted it
to go back to the point you just we were
chatting about during the break. I think it's a very
(23:03):
very valid point, and that is, if we get a
slowing labor market. Now, what brought this conversation up is
again we were a break is we know the President
fired the head of the Bureau of Labor Statistics, the organization,
the government organization that creates the non firm paile numbers
that we get once a month. We know he fired her.
(23:24):
And now it looks like this fellow EJ. I forget
his last name, Heritage Foundation economist, very much of a
Trump guy. They said that he was. They got video
of him, you know, January sixth, walking around the White House,
but he was this there supposedly as an observer and stuff.
But you brought up a great point that I think
(23:44):
we need to bring to the table, and that is
and again I apologize to be disrespectful, but we'll just
call him EJX. I can't I can't remember his last name.
But EJ is saying, look at this data is so bad.
You know, he's nominated now by the President. He has
to get confirmed by the Senate, but it's pretty well
umed he's going to get the job here. But he
was saying, look at this data is so bad. The
(24:04):
system is so archaic and so on and so forth,
that we may not release on a monthly basis. We
may go a quarterly or maybe nothing at all until
we get the system fixed. Now, that will be disastrous
if that news comes out and they say we're not
giving you the data on a monthly basis, We're going
to do it quarterly, or hey, we don't know when
(24:26):
the next report is going to come out. Almost like
when a corporation says we can't release our financial statements
to the SEC because we've got some you know, some
audit problems or whatever. The case may be, almost the
same type of thing, and bottom line, it will not
be good. And so let's let's Corey the start with you.
Let's get your reaction if EJ does decide to postpone
non for our payroll data and so on and so
(24:47):
forth going forward for the next couple of months.
Speaker 3 (24:49):
I think you're only saving grace right now. Within that
little group of guys. Is Scott Bessa has been. I
can visualize said, why can go and listen, you can't
do this unless you want decline, you know, And that's right.
I'm sure they'll talk them out of it. But it
just not that we need to go off on the
site tagent, but the whole thing. If the next job
(25:09):
report comes out and shows that you know, two million
people who are hired and unemployment is down to zero,
Like is anybody going to believe it? So the whole
thing is just right.
Speaker 1 (25:19):
Well that's the problem now Now the credibility. Now the
credibility whether it's true or not, which I don't think
there was a problem with the data. And I'll tell
you in a second. EJ and Toni's his last time,
So I apologize. But you know we were chatting during
the break also, and I was telling Corey and Dwight,
you know, sign an interview I think it was a
week or so ago with I think her last name
is Chance. She was head of the BLS under the
(25:41):
Biden administration, really really sharp Gallvin around a long time
and she's like, there is no way and you know
what that those numbers can be manipulated. She said, you know,
there's a lot of hands looking at the numbers, but
she said, you get about thirty about three weeks away
from the release of the numbers, because there's only forty
people that have any insight as to what those numbers are,
(26:05):
and the way that checks and balances are set up,
no one can manipulate the numbers. I mean, you can't
go in there and go, oh, not two hundred thousand
job growth, you know, three hundred thousand. You just can't
do it. So but once this has come out, once
Trump fired the previous head of the BLIST, now that
credibility comes into play. But I'm telling you guys, you
watch this, especially if mister Antoni decides to postpone the numbers,
(26:28):
to say on a monthly basis or to on a
quarterly basis, You watch and see Wall Street's gonna come
out and they're going to go, well, hell, what government
numbers can we believe? I mean, if it happened in
BLS numbers, what other ones do we trust? And it's
so on and so forth and hold on in The
conspiracy theory, of course, is that Trump is trying to
hide these numbers, right, that the numbers really are bad,
(26:50):
and he's using this excuse to had fired and bring
on kind of his own guy who now may postpone
those numbers. Because folks, I can't tell you how important
the nonfarm pay numbers are to portfolio managers, banks, government
entities around the world to making their decision. If that
data is delayed, you know, a quarter or quarters my goodness,
(27:10):
and then again the validity of all the government reports
come in to.
Speaker 2 (27:15):
But what's worth the disease of the cure. You can't
keep going down the road you're going, John, I mean,
you can't have an adjustment of eight hundred and eighteen thousand.
I mean that's like I would fire my wife if
you told me on Friday we have ten thousand in
the bank and on Tuesday, no, I lie, we have
fifteen hundred.
Speaker 1 (27:31):
I agree, I agree right to, I mean going to fire.
Talk to the audience what you're talking about, though, Dwight.
You just jumped ahead about this revision.
Speaker 2 (27:38):
The revision so they do an annual revision in September, right,
and last year it was eight hundred and eighteen thousand.
You and I were talking off airon Corey that we
wouldn't be surprised if they had another large revision annually.
So I mean, I don't think I agree with me.
I agree with you Corey that we can't you cannot
report something. But if you're going to report it wrong,
(28:00):
and you're gonna be really gross.
Speaker 1 (28:02):
Wrong, I don't know, well, I don't know what I
what I said during the break, and I'll share it
with the audience is the reason they're saying these numbers
are wrong is because they're getting very few businesses. Only
about sixty percent are filling out the survey and returning
it in time or on time. Okay, So where BLS
(28:23):
gets this data. They send out a survey to businesses
and they go, you know, how many people do you
have on payroll? You know, all these different questions, and
if they're not getting the respondents back, responses back, they
don't have accurate numbers. But real quickly, do you bring
up an excellent point? September which is historically kind of
a you know, chopping month, sometimes very lousy month in
the market. If we get that that revision, and I
(28:44):
haven't seen any estimates, I would not be surprised if
it's another seven eight hundred thousand revision, meaning fewer jobs
than than previously announced over the last year, I wouldn't
be surprised that if mister Antoni goes, you know what,
we're not issuing this revision, We're not issuing the non
from payroll numbers for the next couple of quarters. That
way they can avoid that whole mess.
Speaker 2 (29:03):
Well, no, go ahead and tell what it is, and
that gives all the more power for Trump to get
that one percent. Inter No, but there's your there's your
rate cut. You've lost all these jobs you thought you
were gaining.
Speaker 1 (29:15):
Yeah, there you go. Absolutely all right, let's wrap it up.
Let's turn it over to Christen Snow. We're right now
traffic center. Hello, Christin, Welcome back to the John Sanchez
Show on Newstalk seven eighty K which MS Malarge. Your
phone numbers are two four zero two zero two two.
Speaker 3 (29:31):
Mister edge six seven three six seven zero zero beautiful.
Speaker 1 (29:35):
All right, again, we've had a great discussion kind of
looking at all of this from a buy sell standpoint. So, guys,
I did dig up during the break. I wanted to
just bring this up because I said I didn't know
what the probability of the September cut is. Yesterday it
was ninety nine point nine percent. After this morning's how
did an expected PPI report? Now it's dropped down to
(29:56):
ninety two point six percent from the CME fed watch tool.
So anytime you're above ninety pretty good probability. But Corey,
I want to start with you as we wrap things up,
and that is based upon everything we've discussed as far
as tariff's inflation rates. And again to emphasize the point
that if we do get a quarter percent cut in September,
don't think, by any stretch of the imagination that you'll see,
(30:19):
you know, Dwight coming on this show, going, hey, we
just dropped a quarter percent on the thirty year mortgage.
It's not going to happen, because, again, the bond traders
are looking That's why we talked a lot about inflationary
data today. The bond traders are looking at the inflationary data.
They don't give a damn to be honest with you
about what the Fed's doing. They really don't. They're like,
we trade bonds based upon data, where it is, where
(30:40):
it's going, and so on and so forth. So Corey,
with all that said, the person that's going, okay, wait
a minute, Corey, John Dwight a week ago said when
he did the local data that you know, round fourth
of July is kind of the peak for the market.
And now we are, you know, mid August. Do I
really want to try to sell my home right now?
Speaker 3 (31:00):
With your advice, again, if you price it right, it
will sell. What is the correct price may not be
to your liking to some people it is to some
people it's not. But I always tell people just because
we're kind of in the downward trajector going to the
holidays doesn't mean the market goes away. You just need
to price it effectively if you want to ask an
aggressive price, and you don't have to be out right away.
(31:21):
I've had a few clients just in the past week
they're like, Hey, let's tackle this in February or March.
Let's see what happens. Let's get back to the spring.
So two different camps. Some that have to sell, you've
got no choice, Others that are like, I don't need
to sell, so I can sit tight till spring.
Speaker 1 (31:37):
Would you get on the phone, Let's say, do I
college up and goes Corey today? You know, I'm just
gonna say, maybe a month from now is hypothetical. Okay,
remember a month ago Corey thirty years at six point
five six percent, where it closed that today Corey, we're
now down due six and eight six and a quarter.
Would that prompt you to pick up the phone to
call some of these people that are kind of, you know,
(31:57):
waiting to see on that or is it that even
that important to them?
Speaker 3 (32:00):
I don't think that that that little of a decline
is going to matter much, especially if it happens in
a month or two months, because you're right in the
heart of the holidays, so there's just not much happening.
Speaker 1 (32:10):
Okay, Dwight. If you're a buyer, as we said at
the beginning of the show, first step is they have
to reach out to you or any other mortgage professional
and get that pre call letter. Because other than that
and the Corey, I was going to throw this before
I turned into Dwight, you aren't even gonna talk to
anybody unless they got a pre call letter. I mean,
assuming there's somebody off the street, right Corey.
Speaker 3 (32:26):
No, No, exactly, And that's standard for the industry exactly.
Speaker 1 (32:29):
So Dwight, what's that pre caull letter? How long is
it good for? This refresh everybody's memory.
Speaker 2 (32:33):
Yeah, so the prequeller credit's good for one hundred and
twenty days. So I mean, I feel pretty good when
I give out a pre call letter that you know,
you're good for one hundred and twenty days based on
that price. And we can talk to the age. Corey
and I talk a lot, you know, can we do this?
We do that. But John We always say you marry
the house and you date the rate. Right here's my
fear right now, Right now, you're getting a lot of concessions.
(32:55):
If the marketings to start shifting to a seller kind
of maybe even a balanced market, those concessions are going
to go away. You can always refinance. Corey said last
week we were talking pricing has stabilized, it's not, you know,
in some areas it's actually kind of decreased a little bit,
you know. So, I mean, I'm always a fan of
(33:16):
buying right now, especially if you need housing. If you
need I mean, if you really are okay where you're at,
you don't really need to do it. You're just doing
it to do it. Probably not a good idea. But
if you're I mean, I don't know, if there's ever
a bad time, you know, to buy when it comes
to race because you could always redo them.
Speaker 1 (33:32):
Yeah, that's a great reminder. Yeah, all right, guys, excellent,
excellent discussion on all this. I mean, this is something
everybody needs to be thinking about. Yeah, we have seasonal
we have the holidays and things, but bottom line, people
are looking to make money or save money on the
buy side, So consult with Corey Dwight, you will go
down the right path. I promise you that had to
blast with you boys today. God bless you have a
(33:52):
great weekend. We'll do it again tomorrow on The John
Sanchez Show. Dwight Millard and mls ID number two four
one nine a license mortgage loan officer with Highlands Residential
Mortgage Limited and Equal Housing Lender and MLSID number one
three four eight seven one. The information shared on this
live broadcast is for general information purposes only and does
not constitute financial or mortgage advice. Listeners should consult directly
(34:15):
with a license mortgage professional for guidance tailored to their
specific situation. All loans are subject to credit approval and
program guidelines. Not all applicants will qualify. Loan terms in
availability may vary by state and are subject to change
without notice. Highlands Residential Mortgage Limited is licensed in multiple states.
For a full list of state licenses and disclosures, please
(34:35):
visit https slash slash www dot Highlandsmortgage dot com backslash
licenses backslash. The views expressed during this program are their
own and do not necessarily reflect those of Highlands Residential
Mortgage Limited.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.