WEBVTT - Money Monday

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<v Speaker 1>It's 8.05 at 55 KRC Detox Station. Brian Thomas wishing

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<v Speaker 1>everyone a very happy Monday. Try to make it so anyway.

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<v Speaker 1>We're talking with State Representative Adam Burr at the bottom

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<v Speaker 1>of the hour about losing the supermajority in Ohio, but

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<v Speaker 1>still controlling the House and Senate. What can they get

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<v Speaker 1>accomplished before acting as governor? In the meantime, though, Brian

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<v Speaker 1>James out. He normally does Money Monday. He's a financial

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<v Speaker 1>planner with Allworth Financial, but taking his place today. Welcome

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<v Speaker 1>to the 55 KRC Morning Show, Certified Financial Planner Bob Sponseller.

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<v Speaker 1>It's great having you on today, Bob. Good to see

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<v Speaker 1>you as well.

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<v Speaker 2>Great to be with you, Brian. Happy Monday to you.

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<v Speaker 1>Phone ringing off the hook. We talk about it with

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<v Speaker 1>Brian all the time. You know, you got to be

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<v Speaker 1>a hand holder as a financial planner. You got to

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<v Speaker 1>keep people from jumping off the ledge, stop people from

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<v Speaker 1>making really stupid mistakes. And it's a challenging time when

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<v Speaker 1>the markets drop precipitously. I just want to get your

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<v Speaker 1>reaction to Wednesday. I mean, we knew at the result

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<v Speaker 1>of the election, but Wednesday the markets went up, and

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<v Speaker 1>that kind of surprised me. And then, no, it all

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<v Speaker 1>hits the fan on Thursday. Did it take the markets

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<v Speaker 1>that long to sort of judge the scope of the Democrats' win, Bob,

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<v Speaker 1>or what's your response?

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<v Speaker 2>Well, I'll try to keep politics out of it and

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<v Speaker 2>just do my best to call balls and strikes here, Brian,

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<v Speaker 2>which is what I always try to do. But I think— Wednesday,

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<v Speaker 2>the market does not like uncertainty. And any time you

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<v Speaker 2>go into an election, that's uncertainty. And I think we

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<v Speaker 2>got a little bit of a reprieve in the markets

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<v Speaker 2>on Wednesday because everybody took a big exhale and said,

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<v Speaker 2>all right, I'm not getting text messages every 30 seconds

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<v Speaker 2>on my phone. I'm done with all these crazy TV ads.

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<v Speaker 2>The election's over. We finally know what we're going to get.

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<v Speaker 2>Life's going to move on. The market took a big exhale.

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<v Speaker 2>And we had a nice up day. Now, then reality

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<v Speaker 2>started to hit. On Thursday, it takes all these money managers,

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<v Speaker 2>portfolio managers, a little time to kind of sift the

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<v Speaker 2>wheat from the chaff here and say, what is this

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<v Speaker 2>actually going to mean for specific sectors of the markets?

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<v Speaker 2>And as we all know, Thursday was a pretty ugly day.

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<v Speaker 2>Getting down to specifics, you know, the overall S &amp;

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<v Speaker 2>P 500 fell about four and a half percent. But

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<v Speaker 2>the real damage was done in that semiconductor index, which

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<v Speaker 2>fell the big semiconductor stocks, the chip stocks, the Dells,

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<v Speaker 2>the Microns, all those household names that have been on

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<v Speaker 2>a tear, AMD, NVIDIA, Broadcom, Micron. That index, Brian, fell 12.2%.

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<v Speaker 2>in one day. And I think this is all about

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<v Speaker 2>data centers. We had 41 ballot measures across the country

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<v Speaker 2>in different states on Tuesday, 21 of which were in

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<v Speaker 2>the state of Ohio. And Brian, 40 of the 41

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<v Speaker 2>data center ballot measures went down to defeat. So, you know,

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<v Speaker 2>the best sense I can make of this, the best

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<v Speaker 2>analogy I can give you is let's say you and

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<v Speaker 2>I have season tickets to Ohio State football. We're going

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<v Speaker 2>to jump in the car every Saturday morning and head

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<v Speaker 2>up to Columbus to watch football. And we know that

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<v Speaker 2>the speed limit on 71 is 70 miles an hour.

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<v Speaker 2>I think after these elections on Tuesday, the speed limit

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<v Speaker 2>just dropped to maybe 45 to 50 miles an hour.

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<v Speaker 2>We're still going to get to Columbus. We're still going

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<v Speaker 2>to get to watch football. We're still going to have

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<v Speaker 2>data centers built. But the speed at which those data

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<v Speaker 2>centers are going to get built, I think it's safe

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<v Speaker 2>to say, are going to slow down a little bit.

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<v Speaker 2>And I think that's what happened to the markets on Thursday.

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<v Speaker 2>We got a little bit of a bounce on Friday

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<v Speaker 2>back up. Futures this morning are up. So I think

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<v Speaker 2>everybody is starting to settle down a little bit and

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<v Speaker 2>realize that this is not Armageddon. But the speed of

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<v Speaker 2>this AI build out is going to be a little

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<v Speaker 2>bit slower and a little more deliberate than people may

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<v Speaker 2>have priced into the market.

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<v Speaker 1>Well, reading tea leaf leaves, I personally got the impression

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<v Speaker 1>that it wasn't so much that the data centers were

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<v Speaker 1>noisy or use power, especially if you have both Republicans

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<v Speaker 1>and Democrats arguing that, well, no, we're going to require

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<v Speaker 1>them to bring the power. So if you take that

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<v Speaker 1>power consumption element out and higher energy bills out of

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<v Speaker 1>the equation, at least theoretically, there's nothing to worry about there.

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<v Speaker 1>I think most of the water issues were really truly

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<v Speaker 1>resolved and not a problem based on.

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<v Speaker 2>Closed loop systems.

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<v Speaker 1>So This to me is people's, I think, generally freaking

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<v Speaker 1>out and quite rightfully so about what artificial intelligence does.

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<v Speaker 1>But Bob, my position has all along been artificial intelligence

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<v Speaker 1>and what it does is not going away ever. And

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<v Speaker 1>that the control of it needs to be in our

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<v Speaker 1>United States hands versus obviously our biggest competitor in the

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<v Speaker 1>AI world is the Chinese Communist Party. But We're going

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<v Speaker 1>to have to get our hands around and people who

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<v Speaker 1>are concerned about what it can do. Do you want

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<v Speaker 1>a regulatory environment brought to you by the United States?

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<v Speaker 1>You didn't want one brought to you by the Chinese.

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<v Speaker 2>We got to have, amen. So that's right. This stuff's

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<v Speaker 2>either going to get built here or it's going to

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<v Speaker 2>get built in China. Um, and, and these things are

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<v Speaker 2>going to get built, but I think, you know, and again,

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<v Speaker 2>I'm trying to stay as neutral here politically as possible,

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<v Speaker 2>but the democratic party did a wonderful job of messaging

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<v Speaker 2>on this topic and And I would say these large

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<v Speaker 2>tech companies and the Republican Party did a horrible job

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<v Speaker 2>of messaging. I mean, just go up the road to Trenton, Ohio.

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<v Speaker 2>I mean, Brian, that was an 80-20 vote up there

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<v Speaker 2>to reject that data center. Obviously, those people up there

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<v Speaker 2>did not feel good about it because people did not

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<v Speaker 2>communicate effectively with them. And I think that's what you're

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<v Speaker 2>going to see change over the next 6, 12, 18 months.

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<v Speaker 2>It's going to get done. But these folks are going

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<v Speaker 2>to have to go in there and tell local citizens.

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<v Speaker 2>And Brian, I am a big state and local government guy.

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<v Speaker 2>I love local government, local people getting together and deciding

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<v Speaker 2>what they want and don't want. I think we need

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<v Speaker 2>to tune out all this noise and hearings and pontificating

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<v Speaker 2>from these federal government officials. This is these are state

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<v Speaker 2>and local issues. And I think the Amazons of the

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<v Speaker 2>world are going to have to go in there and

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<v Speaker 2>sit down with the local people and make it worth

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<v Speaker 2>their while to build one of these things in their community.

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<v Speaker 2>And I think they will.

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<v Speaker 1>I agree with you completely. It's just going to be

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<v Speaker 1>a little slower process, which is, I concede your point

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<v Speaker 1>on that. It's pretty obvious it's going to be a

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<v Speaker 1>slowdown in the processes here, which may be a good

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<v Speaker 1>thing overall, as long as people don't try to bring

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<v Speaker 1>it to a screeching halt, because I can't see that happening.

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<v Speaker 2>Anything else?

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<v Speaker 1>I mean, you mentioned, I think, when Trump utters anything

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<v Speaker 1>relative to the situation with the Iran's, I mean, he

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<v Speaker 1>can say we're going to bomb tomorrow or we're no,

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<v Speaker 1>it looks like we're going to enter into an agreement,

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<v Speaker 1>which is the most recent pronouncement. Doesn't look like he's

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<v Speaker 1>going to be dropping bombs. The markets do react to that,

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<v Speaker 1>whether it's right or wrong. The price of oil down

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<v Speaker 1>a little bit at the price of the pump, according

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<v Speaker 1>to gas buddy is now under $ 4, which is a

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<v Speaker 1>welcome relief. How long it lasts, how much is the

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<v Speaker 1>energy sector involved in the market fluctuations from last week?

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<v Speaker 1>And where do you see it going forward?

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<v Speaker 2>Well, you know, diesel fuel, the price of diesel fuel

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<v Speaker 2>matters a lot. And I think we're all used to

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<v Speaker 2>President Trump going on there and saying, yeah, I might

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<v Speaker 2>bomb them tomorrow. I might not. We have a deal.

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<v Speaker 2>You know, they want to make a deal and then

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<v Speaker 2>they don't want to make a deal. I think the

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<v Speaker 2>American public is used to that. I also think they're

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<v Speaker 2>tired of that. We've got to get diesel oil prices down.

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<v Speaker 2>Roughly 60% of all goods that ordinary citizens buy every

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<v Speaker 2>day travel by truck, which require diesel fuel. We got

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<v Speaker 2>to get that price down. We got to get that

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<v Speaker 2>blockade in the Strait of Hormuz settled. And we got

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<v Speaker 2>to get refined diesel fuel flowing again. Your guess is

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<v Speaker 2>as good as mine is when that's going to happen.

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<v Speaker 2>But broadly speaking, people are tired of inflation. President Trump

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<v Speaker 2>in his first term did a great job of making

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<v Speaker 2>life better from a cost of living standpoint for everyday Americans.

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<v Speaker 2>And he was rewarded for that. During the first two

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<v Speaker 2>years of this administration, he came in promising that he

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<v Speaker 2>would bring us off of this 20 plus accumulated inflation

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<v Speaker 2>under the last administration. And Brian, obviously it hasn't happened.

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<v Speaker 2>And the voters responded in kind last week.

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<v Speaker 1>And overwhelmingly so. And I guess I understand it on

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<v Speaker 1>a lot of levels. We can all draw our own

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<v Speaker 1>conclusions why he got such a thorough drubbing. But I

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<v Speaker 1>guess the response is, well, wait a second. Everybody wants

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<v Speaker 1>things more affordable. Donald Trump said he would bring prices

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<v Speaker 1>down and make them more affordable. next act is Democrats

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<v Speaker 1>delivering on their promise to deliver affordability. I've always viewed

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<v Speaker 1>that as an impossible task. There are so many forces

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<v Speaker 1>out in the world that have an impact on inflation

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<v Speaker 1>or affordability. How can any political party or one person

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<v Speaker 1>change the dynamic?

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<v Speaker 2>Well, that's, what's going to be interesting in 2027. Um,

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<v Speaker 2>you could talk about bringing prices down. And again, Brian, you're,

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<v Speaker 2>you're baiting me here and I'm probably going to swallow

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<v Speaker 2>the bait. Um, The thing that Democrats like to do

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<v Speaker 2>is spend money. That's what they're good at doing. And

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<v Speaker 2>when the government spends money, inflation tends to go up,

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<v Speaker 2>not down. So it's going to be very interesting to

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<v Speaker 2>see how affordability, in quotes, is going to become a

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<v Speaker 2>thing next year. I think it's all going to be

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<v Speaker 2>tied to when we get the price of energy down.

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<v Speaker 2>And President Trump and his administration is still running the

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<v Speaker 2>show in terms, like it or not, in terms of

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<v Speaker 2>this conflict with Iran. I think that's going to be

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<v Speaker 2>the real wild card here, because if you take away

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<v Speaker 2>energy prices, inflation really is fairly tame and getting a

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<v Speaker 2>little bit better in most sectors of the economy. We

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<v Speaker 2>just got to get this diesel fuel down. And again,

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<v Speaker 2>your guess is as good as mine as to when

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<v Speaker 2>that happens.

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<v Speaker 1>What's the likelihood that we build a new refinery, Bob?

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<v Speaker 1>You can hear the tone of my voice.

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<v Speaker 2>We haven't had a high capacity refinery built in this country, Brian,

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<v Speaker 2>correct me if I'm wrong, since 1977. And I think

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<v Speaker 2>that's the irony here is everybody complaining about the price

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<v Speaker 2>of gas is Politicians included, these are the same people

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<v Speaker 2>that did not want any refineries built. They closed some

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<v Speaker 2>existing refineries. We waged war on the coal industry. We

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<v Speaker 2>closed natural gas pipelines. Then when we tried to cut

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<v Speaker 2>a little bit of waste in government, we had people

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<v Speaker 2>firebombing Elon Musk's Tesla dealership. That's where I find the

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<v Speaker 2>big irony to be here is people that were harping

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<v Speaker 2>and harping about energy prices. literally because of oil and

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<v Speaker 2>gas is too high. I know. And this is a

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<v Speaker 2>commodity that they wanted to eliminate 100%. So that's politics

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<v Speaker 2>in 2026, Brian.

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<v Speaker 1>Bob, I've been talking that line for months and months now.

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<v Speaker 1>Don't you get it? The price of gasoline necessarily will

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<v Speaker 1>go up, said Barack Obama a multitude of times, and

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<v Speaker 1>that's exactly what they want. This is like the greatest

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<v Speaker 1>gift ever. If you want to get rid of fossil fuels,

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<v Speaker 1>then the price of gasoline goes through the roof. And Already,

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<v Speaker 1>I headlined Democrats planning to push clean energy to lower bills. Okay,

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<v Speaker 1>I can never figure out how that's going to work.

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<v Speaker 2>Don't go away.

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<v Speaker 1>We'll get away from real hardcore politics and find out

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<v Speaker 1>what the future looks like, at least in the mind

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<v Speaker 1>of Bob Sponsella from Allworth, financially certified planner. Don't go away.

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<v Speaker 1>I'll be right back after I mention Queen City painting

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<v Speaker 1>and decorating.

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<v Speaker 2>Outstanding.

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<v Speaker 1>It is 819 at the 55KRCD talk station.

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<v Speaker 2>It's Monday. We're doing the Money Monday thing.

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<v Speaker 1>All Earth Financial's Bob Sponseller taking over for Brian James today.

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<v Speaker 2>He's out.

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<v Speaker 1>He's a certified financial planner. He's trying to keep his

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<v Speaker 1>clients from doing.

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<v Speaker 2>The wrong thing.

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<v Speaker 1>Counselor in volatile times as well.

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<v Speaker 2>Where are we going?

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<v Speaker 1>Going back to the energy thing. Everybody knows that I'm

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<v Speaker 1>a huge fan of small modular reactors. And there's quite

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<v Speaker 1>a few companies, Bob, that are making these. It's sort

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<v Speaker 1>of off the shelf, one size fits all. You don't

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<v Speaker 1>have to do individual planning and individual... a factory or

0:12:13.520 --> 0:12:16.790
<v Speaker 1>power generating plants and need their individual approval. So once

0:12:16.870 --> 0:12:18.970
<v Speaker 1>one gets approved, like pick it off the shelf, just

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<v Speaker 1>plop it down and there's your energy. Very little to

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<v Speaker 1>no waste. It all sounds like a wonderful idea. Are

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<v Speaker 1>these companies publicly traded and are these small modular reactor

0:12:27.710 --> 0:12:30.350
<v Speaker 1>companies doing well? Is this an area that we can

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<v Speaker 1>be optimistic over, Bob? Because I think it's the future

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<v Speaker 1>for our energy needs.

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<v Speaker 2>I totally agree with you, Brian. Unfortunately, most of these

0:12:38.010 --> 0:12:40.890
<v Speaker 2>companies that are really killing it right now are privately traded.

0:12:40.970 --> 0:12:44.010
<v Speaker 2>So if you look on the private equity side of things,

0:12:44.050 --> 0:12:47.219
<v Speaker 2>that's definitely a space you want to look. Look in

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<v Speaker 2>the private equity world for firms that could get you

0:12:50.740 --> 0:12:57.000
<v Speaker 2>involved in some of these emerging, early producing alternative energy stocks.

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<v Speaker 2>I mean, the energy sector, earnings growth after the third

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<v Speaker 2>quarter earnings have just come out are up 151% year

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<v Speaker 2>over year this year. So that's definitely a place to look.

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<v Speaker 2>I think you're spot on there, Brian. Speaking of earnings,

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<v Speaker 2>I do think last week's overall market sell-off overlooks just

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<v Speaker 2>how broad corporate profit growth has been this year. Third

0:13:21.780 --> 0:13:25.579
<v Speaker 2>quarter earnings season is nearly complete now, as 88% of

0:13:25.600 --> 0:13:29.080
<v Speaker 2>the S &amp; P 500 has reported. Third quarter profits

0:13:29.240 --> 0:13:34.320
<v Speaker 2>overall are up a third. Yep, 33% over the past year,

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<v Speaker 2>which is well above the 24.5% Wall Street was expecting.

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<v Speaker 2>But if you just strip out AI, you know, completely

0:13:41.690 --> 0:13:45.430
<v Speaker 2>eliminate it, the S &amp; P 500 index X AI

0:13:45.490 --> 0:13:50.600
<v Speaker 2>stocks is still up almost 24%. So, you know, We

0:13:50.660 --> 0:13:56.340
<v Speaker 2>are getting an overall productivity boost across the economy due

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<v Speaker 2>to AI, and it is starting to show up in

0:13:59.490 --> 0:14:02.130
<v Speaker 2>sectors other than the tech space. And I think that

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<v Speaker 2>bodes well moving forward, as long as we talked about before,

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<v Speaker 2>our newly elected government officials do not overreach here and

0:14:12.090 --> 0:14:14.120
<v Speaker 2>get too involved in the markets.

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<v Speaker 1>Well, you mentioned the 12.2% sell-off at NASDAQ and all

0:14:17.809 --> 0:14:19.070
<v Speaker 1>the chips and related companies.

0:14:19.950 --> 0:14:23.270
<v Speaker 2>Just the stocks, not the overall NASDAQ. Okay. Yeah, just

0:14:23.610 --> 0:14:24.070
<v Speaker 2>the stocks.

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<v Speaker 1>Well, I have been listening to, and no financial planner

0:14:27.110 --> 0:14:30.160
<v Speaker 1>am I, and market forces can bewilder me and perplex

0:14:30.180 --> 0:14:32.200
<v Speaker 1>me from time to time, but the AI bubble that

0:14:32.280 --> 0:14:34.210
<v Speaker 1>is going to burst. I keep hearing that, hearing it.

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<v Speaker 2>We've seen it before.

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<v Speaker 1>We had the internet bubble burst and the real estate

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<v Speaker 1>bubble burst. Is there an AI bubble bursting, Bob, that

0:14:41.130 --> 0:14:43.570
<v Speaker 1>you can see? Does this slow down, maybe slow down

0:14:43.610 --> 0:14:47.130
<v Speaker 1>the reality of that happening? What's your tea leaf forecasting

0:14:47.190 --> 0:14:47.410
<v Speaker 1>on that?

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<v Speaker 2>I don't see any bubble at all. I mean, it

0:14:51.500 --> 0:14:54.900
<v Speaker 2>all defines how you define the term bubble. I mean,

0:14:54.940 --> 0:14:59.480
<v Speaker 2>for somebody that was dramatically overweighted in the semiconductor stocks

0:14:59.540 --> 0:15:04.120
<v Speaker 2>last Thursday and lost 12% of their money in one day, yeah,

0:15:04.160 --> 0:15:07.100
<v Speaker 2>they'll call that a bubble. I think the market is

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<v Speaker 2>an excellent pricing mechanism or discount pricing mechanism of where

0:15:11.780 --> 0:15:14.520
<v Speaker 2>it sees things six to 12 months from now. And

0:15:14.560 --> 0:15:17.310
<v Speaker 2>I think it's safe to say Things got a little

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<v Speaker 2>ahead of themselves in some of these AI names and

0:15:20.790 --> 0:15:24.150
<v Speaker 2>semiconductor stocks. And this is just a return to reality.

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<v Speaker 2>It's not a bear market. It's not a 78% collapse

0:15:30.130 --> 0:15:33.250
<v Speaker 2>in the NASDAQ like we saw in the dot-com era.

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<v Speaker 2>Stick with good quality companies. Remember back when the whole

0:15:38.120 --> 0:15:40.860
<v Speaker 2>thing fell out of bed in the early 2000s, we

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<v Speaker 2>were buying anything with dot-com behind its name. Yeah. Think

0:15:44.700 --> 0:15:47.640
<v Speaker 2>of like Pets.com, things like that. A lot of those

0:15:47.720 --> 0:15:50.750
<v Speaker 2>companies completely went out of business. That is not going

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<v Speaker 2>to be the case here in these large companies with

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<v Speaker 2>good balance sheets. It's just a pullback. And that happens.

0:15:58.510 --> 0:16:02.680
<v Speaker 2>I mean, people forget the market on average goes down

0:16:02.700 --> 0:16:08.400
<v Speaker 2>intra-year about 19% every year, at least one time. And

0:16:08.880 --> 0:16:12.140
<v Speaker 2>as we know, the market averages year over year, 9%, 10%.

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<v Speaker 2>So you got to build your financial plan accordingly and

0:16:17.410 --> 0:16:20.570
<v Speaker 2>get out in front of some of this volatility, which

0:16:20.830 --> 0:16:24.700
<v Speaker 2>always happens, always has, always will. And the money that

0:16:24.720 --> 0:16:27.680
<v Speaker 2>you're going to need to repave your driveway or replace

0:16:27.700 --> 0:16:30.140
<v Speaker 2>your roof or go on your vacation next spring is

0:16:30.700 --> 0:16:32.900
<v Speaker 2>should not have been in stocks in the first place

0:16:33.440 --> 0:16:37.160
<v Speaker 2>or technology stocks in particular. That's what good, sound financial

0:16:37.230 --> 0:16:40.170
<v Speaker 2>planning is all about. But Brian, our phones aren't ringing

0:16:40.230 --> 0:16:43.170
<v Speaker 2>off the hook. Our clients aren't panicking because we've been

0:16:43.270 --> 0:16:46.410
<v Speaker 2>talking to them about this stuff all year. And for

0:16:46.430 --> 0:16:49.350
<v Speaker 2>the people that listened, they were ready for this and

0:16:49.390 --> 0:16:52.940
<v Speaker 2>have done the appropriate rebalancing in their portfolio.

0:16:53.720 --> 0:16:55.210
<v Speaker 1>Amen to that. That's why I'm glad I have a

0:16:55.250 --> 0:16:57.670
<v Speaker 1>financial planner to keep me out of the mix, talk

0:16:57.690 --> 0:17:00.670
<v Speaker 1>me off the ledge, and keep me from doing stupid things,

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<v Speaker 1>which is what you guys are great at.

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<v Speaker 2>That's our job. It is. Keep people from doing stupid

0:17:05.470 --> 0:17:07.930
<v Speaker 2>things from which they can't recover. That's the whole reason

0:17:07.990 --> 0:17:08.780
<v Speaker 2>we have a job, bro.

0:17:08.800 --> 0:17:10.139
<v Speaker 1>And hopefully at the end of the year, show them

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<v Speaker 1>you have a really healthy return on the money invested.

0:17:13.060 --> 0:17:16.359
<v Speaker 1>Bob Sponseller, certified financial planner with Allworth. I appreciate the

0:17:16.400 --> 0:17:18.040
<v Speaker 1>time you spent with my listeners and me today. Really

0:17:18.060 --> 0:17:21.050
<v Speaker 1>enjoyable conversation, Bob. And thanks for Allworth for loaning you

0:17:21.119 --> 0:17:22.669
<v Speaker 1>out for this segment. Maybe you and I will get

0:17:22.690 --> 0:17:23.250
<v Speaker 1>to talk again.

0:17:24.300 --> 0:17:26.440
<v Speaker 2>I look forward to that. Thanks for the time, Brian.

0:17:26.540 --> 0:17:28.869
<v Speaker 2>Been my pleasure. Take care, Bob. Stick around, folks.

0:17:28.880 --> 0:17:30.030
<v Speaker 1>State Representative Adam Brown.