1
00:00:00,080 --> 00:00:02,360
Speaker 1: This episode of the Chuck Todcast is brought to you

2
00:00:02,400 --> 00:00:06,240
Speaker 1: by Wild Grain. Wild Grain is the first bake from

3
00:00:06,400 --> 00:00:11,280
Speaker 1: frozen subscription box for sour dough breads, arteasonal pastries, and

4
00:00:11,320 --> 00:00:14,800
Speaker 1: fresh pastas, plus all the items conveniently baked in twenty

5
00:00:14,800 --> 00:00:18,759
Speaker 1: five minutes or less. Unlike many store brought options, Wild

6
00:00:18,840 --> 00:00:21,880
Speaker 1: Grain uses some simple ingredients you can pronounce and a

7
00:00:22,040 --> 00:00:25,480
Speaker 1: slow fermentation process that can be a lot easier on

8
00:00:25,520 --> 00:00:28,080
Speaker 1: your belly, little gut health there right, and richer in

9
00:00:28,200 --> 00:00:32,600
Speaker 1: nutrients antioxidants. There's also no preservatives and no shortcuts. The

10
00:00:32,640 --> 00:00:35,800
Speaker 1: Wild Grain boxes are fully customizable. In addition to their

11
00:00:35,880 --> 00:00:38,920
Speaker 1: variety box, they have a gluten free box, a vegan box,

12
00:00:39,200 --> 00:00:42,559
Speaker 1: and a new protein box. I will tell you I

13
00:00:42,600 --> 00:00:44,960
Speaker 1: have done the gluten free box. I have done it

14
00:00:44,960 --> 00:00:48,600
Speaker 1: a second time. I have also used the code the

15
00:00:48,680 --> 00:00:52,040
Speaker 1: todcast code. You use the promo code toodcast at checkout

16
00:00:52,080 --> 00:00:55,640
Speaker 1: you get thirty dollars off. I've already used it as

17
00:00:55,680 --> 00:00:58,880
Speaker 1: a gift to somebody else who loves this bread. It

18
00:00:59,000 --> 00:01:02,560
Speaker 1: is hard to find good gluten free bread. It is fantastic.

19
00:01:02,720 --> 00:01:05,720
Speaker 1: They give you step by step instructions. I really dig this.

20
00:01:06,520 --> 00:01:09,760
Speaker 1: There is nothing like having an artesian bakery in your

21
00:01:09,760 --> 00:01:12,560
Speaker 1: freezer to chase away the winter chill. Now is the

22
00:01:12,560 --> 00:01:15,920
Speaker 1: best time to stay in and enjoy some comforting homemade

23
00:01:15,920 --> 00:01:19,600
Speaker 1: meals with Wildgrain. I obviously highly recommend it. It is

24
00:01:19,760 --> 00:01:22,759
Speaker 1: worth giving Wildgreen to try. Right now, Wildgrain is offering

25
00:01:22,840 --> 00:01:25,920
Speaker 1: my listeners thirty dollars off your first box plus free

26
00:01:26,000 --> 00:01:29,400
Speaker 1: croissants for life. Come on when you go to wildgrain

27
00:01:29,440 --> 00:01:33,280
Speaker 1: dot com slash podcast to start your subscription today. That's

28
00:01:33,360 --> 00:01:36,440
Speaker 1: thirty dollars off your first box and free croissants for

29
00:01:36,520 --> 00:01:39,840
Speaker 1: life when you visit wildgrain dot com slash podcast, or

30
00:01:39,880 --> 00:01:43,760
Speaker 1: simply use the promo code podcast at checkout. This is

31
00:01:43,800 --> 00:01:50,240
Speaker 1: a sponsor I absolutely embrace, so use that code well.

32
00:01:50,400 --> 00:01:54,480
Speaker 1: Joining me now is it's the equivalent of the SNL

33
00:01:54,640 --> 00:01:58,200
Speaker 1: five time hosting Club. It's the podcast guest club. Here.

34
00:01:58,240 --> 00:02:01,400
Speaker 1: It's Mark Sandy, Cheap Economy Moodies, mister Sandy. It's good

35
00:02:01,400 --> 00:02:01,760
Speaker 1: to see you.

36
00:02:02,240 --> 00:02:06,040
Speaker 2: Todd is a huge That's okay.

37
00:02:06,080 --> 00:02:06,640
Speaker 1: It happens.

38
00:02:07,000 --> 00:02:09,680
Speaker 3: This is the beauty of two first names. But you

39
00:02:09,760 --> 00:02:12,760
Speaker 3: must get called Sandy. Hey Sandy, Yeah, all the time,

40
00:02:12,840 --> 00:02:16,720
Speaker 3: all the time. Hey Todd, Hey Chuck. Yeah, it's good

41
00:02:16,720 --> 00:02:18,280
Speaker 3: to be with you. Sorry, it's been a long week.

42
00:02:18,320 --> 00:02:20,400
Speaker 2: It's and this is you know, five pm Eastern time

43
00:02:20,440 --> 00:02:22,320
Speaker 2: on a Friday, so I'm a little burned.

44
00:02:23,440 --> 00:02:26,280
Speaker 1: Here we are, And look, I've said this before about

45
00:02:26,280 --> 00:02:29,400
Speaker 1: every quarter, you know, i'd I like checking in with

46
00:02:29,440 --> 00:02:31,240
Speaker 1: you to see where we are. And in fact, the

47
00:02:31,320 --> 00:02:33,400
Speaker 1: last time was the beginning of the fourth quarter of

48
00:02:33,480 --> 00:02:35,919
Speaker 1: last year. We're now at the beginning of the fourth

49
00:02:36,000 --> 00:02:40,840
Speaker 1: quarter of the first year. And I'll be honest, sort

50
00:02:40,840 --> 00:02:44,839
Speaker 1: of first week of October of twenty twenty five, it

51
00:02:45,120 --> 00:02:47,600
Speaker 1: felt like this was an economy we're not sure where

52
00:02:47,600 --> 00:02:52,000
Speaker 1: it's headed. It feels like recession was at an elevated level.

53
00:02:53,240 --> 00:02:55,280
Speaker 1: Fast forward three months later, it feels like there's a

54
00:02:55,320 --> 00:02:58,280
Speaker 1: lot of optimism about the current state of the economy.

55
00:02:58,400 --> 00:03:02,040
Speaker 1: Am I just reading the wrong headlines? What say you?

56
00:03:02,120 --> 00:03:05,640
Speaker 1: What does the numbers say? How do you feel January

57
00:03:05,720 --> 00:03:07,560
Speaker 1: of twenty twenty six compared to what you might have

58
00:03:07,600 --> 00:03:08,760
Speaker 1: felt a quarter ago?

59
00:03:09,400 --> 00:03:11,600
Speaker 2: Yeah, I think it's fair to say there's I feel

60
00:03:11,600 --> 00:03:13,520
Speaker 2: a little bit better about the economy than I did

61
00:03:13,520 --> 00:03:17,320
Speaker 2: three months ago. You know, it's hard. You know, the

62
00:03:17,400 --> 00:03:21,160
Speaker 2: thing is the stock market kind of colors perceptions, right,

63
00:03:21,240 --> 00:03:23,880
Speaker 2: at least in my world right, And we've seen a

64
00:03:23,919 --> 00:03:27,280
Speaker 2: lot of green on the screen. Stock market's just skyrocket

65
00:03:27,280 --> 00:03:29,880
Speaker 2: at higher a lot of that artificial intelligence stocks, but

66
00:03:29,960 --> 00:03:33,200
Speaker 2: the broader markets up a lot too, and that is

67
00:03:33,280 --> 00:03:35,800
Speaker 2: powering a lot of growth and more than I The

68
00:03:35,840 --> 00:03:37,960
Speaker 2: market's up more than I would have anticipated in the

69
00:03:38,000 --> 00:03:41,480
Speaker 2: spending that's resulting from that, more than I thought. The

70
00:03:41,520 --> 00:03:45,320
Speaker 2: other thing is policy is going to kick into high

71
00:03:45,400 --> 00:03:47,600
Speaker 2: gear here. We're going to get a lot of fiscal juice.

72
00:03:47,640 --> 00:03:51,080
Speaker 2: You know, the One Big Beautiful Bill Act Cut Taxes,

73
00:03:51,760 --> 00:03:55,840
Speaker 2: is cutting taxes for both the business and for individuals,

74
00:03:56,560 --> 00:03:59,840
Speaker 2: and that's now going to come into the economy.

75
00:04:00,480 --> 00:04:02,360
Speaker 1: How do you expect how is that going to show up?

76
00:04:02,360 --> 00:04:04,320
Speaker 1: Because I've heard this too that a lot of you've heard

77
00:04:04,360 --> 00:04:07,520
Speaker 1: Scott Pasent say it and others trying to reassure the president, Hey,

78
00:04:07,600 --> 00:04:10,360
Speaker 1: don't worry, your political fortunes are going to turn around

79
00:04:10,400 --> 00:04:13,160
Speaker 1: because we're about to you know what you just said,

80
00:04:13,200 --> 00:04:15,400
Speaker 1: The One Big Beautiful Bill is about to shoot a

81
00:04:15,440 --> 00:04:19,880
Speaker 1: whole bunch of fiscal stimulus. Last time we had too

82
00:04:19,920 --> 00:04:22,359
Speaker 1: much fiscal stim We had too much fiscal stimulus, and

83
00:04:22,360 --> 00:04:26,240
Speaker 1: it gave us inflation. So how how are you anticipating

84
00:04:26,279 --> 00:04:28,960
Speaker 1: that we'll start to see this in the economy.

85
00:04:29,200 --> 00:04:35,120
Speaker 2: Well in two big ways. One, consumers will have more cash,

86
00:04:35,360 --> 00:04:37,320
Speaker 2: so the refund checks are going to be a lot

87
00:04:37,400 --> 00:04:39,640
Speaker 2: larger this year than last year, about one hundred billion

88
00:04:39,640 --> 00:04:43,920
Speaker 2: dollars more in cash to low, middle, high income households.

89
00:04:44,600 --> 00:04:48,680
Speaker 2: And that'll flow in here pretty quickly, beginning in February,

90
00:04:48,680 --> 00:04:52,520
Speaker 2: but March April may obviously well timed to influence the

91
00:04:52,560 --> 00:04:55,839
Speaker 2: economy in the lead up to the election. That's that's

92
00:04:55,880 --> 00:04:58,480
Speaker 2: going to be a lot of jews. And then the

93
00:04:58,520 --> 00:05:03,200
Speaker 2: benefit to businesses expe So they invest and they can

94
00:05:03,240 --> 00:05:05,320
Speaker 2: expense all of that up front and that's a big

95
00:05:05,360 --> 00:05:07,880
Speaker 2: cost saving to them, and that means they'll do more investment.

96
00:05:07,920 --> 00:05:10,640
Speaker 2: And you can already kind of feel it in the

97
00:05:10,839 --> 00:05:14,000
Speaker 2: orders for investment goods. So those two things are going

98
00:05:14,080 --> 00:05:16,400
Speaker 2: to provide a lot of support. Obviously, it's all deficit finance.

99
00:05:16,520 --> 00:05:18,359
Speaker 2: That's how you get the jews, right. This is added

100
00:05:18,440 --> 00:05:21,960
Speaker 2: to the deficit. But and it's going to be temporary,

101
00:05:22,120 --> 00:05:23,839
Speaker 2: you know, it'll start to fade.

102
00:05:24,240 --> 00:05:26,400
Speaker 1: Is this a one time thing? Are we going to

103
00:05:27,320 --> 00:05:30,240
Speaker 1: or this tax savings? I don't get the sense that

104
00:05:30,320 --> 00:05:31,760
Speaker 1: this is going to be long term.

105
00:05:31,880 --> 00:05:34,960
Speaker 2: No, No, it's not going to do much longer run.

106
00:05:35,080 --> 00:05:38,279
Speaker 2: I mean, you could argue that the investment should have legs,

107
00:05:38,360 --> 00:05:41,880
Speaker 2: you know, because you're building the capital stock and that

108
00:05:42,000 --> 00:05:44,240
Speaker 2: should help with productivity growth down right, But it's on

109
00:05:44,279 --> 00:05:48,200
Speaker 2: the margin. It's really providing a temporary boost to the companies.

110
00:05:48,279 --> 00:05:51,120
Speaker 2: It's straight up fiscal stimulus, just like the fiscal stimulus

111
00:05:51,160 --> 00:05:54,400
Speaker 2: we've provided during the pandemic. Same kind of deal here.

112
00:05:54,800 --> 00:05:58,360
Speaker 2: And then also you've got the FED, who is predisposed

113
00:05:58,440 --> 00:06:00,679
Speaker 2: to the lower inge rates. There's a lot of debate

114
00:06:00,720 --> 00:06:02,880
Speaker 2: around what they're going to do and to what degree,

115
00:06:03,000 --> 00:06:06,280
Speaker 2: but I think they will cut interest rates, you know,

116
00:06:06,400 --> 00:06:08,279
Speaker 2: before the year is over, and that should provide some

117
00:06:08,279 --> 00:06:09,280
Speaker 2: additional support.

118
00:06:09,480 --> 00:06:13,200
Speaker 1: Do you expect those still they very cautious cuts more

119
00:06:13,279 --> 00:06:14,760
Speaker 1: quarter points, no, half points?

120
00:06:15,080 --> 00:06:18,640
Speaker 2: Yeah, I think so. It's certainly up until the time

121
00:06:20,480 --> 00:06:23,440
Speaker 2: Chair Pale leaves the FED, and that's May of twenty

122
00:06:23,480 --> 00:06:26,039
Speaker 2: twenty six. At that point we're going to get a

123
00:06:26,080 --> 00:06:28,680
Speaker 2: new FED chair appointed by the President. The President has

124
00:06:28,680 --> 00:06:30,640
Speaker 2: made it very clear that he wants lower interest rates

125
00:06:30,680 --> 00:06:34,159
Speaker 2: and that he should have some influence, if not be able,

126
00:06:34,200 --> 00:06:37,480
Speaker 2: to dictate what interest rates should be. So it'd be

127
00:06:37,520 --> 00:06:40,440
Speaker 2: surprising if we don't see someone who's there that isn't

128
00:06:40,480 --> 00:06:44,560
Speaker 2: pushing hard for lower rates when they take that position.

129
00:06:44,920 --> 00:06:47,240
Speaker 2: You know, obviously it's a committee decision, so there are

130
00:06:47,440 --> 00:06:49,960
Speaker 2: other folks that aren't going to be on board with that.

131
00:06:50,120 --> 00:06:51,279
Speaker 2: But I think at the end of the day, they'll

132
00:06:51,279 --> 00:06:54,760
Speaker 2: probably get some more rate cuts and that should help

133
00:06:55,040 --> 00:06:57,520
Speaker 2: support the economy also, And that's one reason why the

134
00:06:57,560 --> 00:07:00,440
Speaker 2: stock market is up, because the stock markets also painting,

135
00:07:01,080 --> 00:07:02,360
Speaker 2: you know, more rate cuts.

136
00:07:03,920 --> 00:07:06,440
Speaker 1: I remember the last time we talked about trying to

137
00:07:06,800 --> 00:07:09,840
Speaker 1: look at the stock market by disaggregating the AI companies

138
00:07:09,840 --> 00:07:14,360
Speaker 1: from sort of the non AI influenced companies and as

139
00:07:14,680 --> 00:07:17,160
Speaker 1: getting a sense of what is the health of the

140
00:07:17,200 --> 00:07:21,120
Speaker 1: current economy versus essentially what people are anticipating to be

141
00:07:21,200 --> 00:07:25,480
Speaker 1: the future economy. What do those two pictures look like.

142
00:07:25,920 --> 00:07:29,760
Speaker 2: They're very different. I mean, the AI stocks have gone

143
00:07:29,840 --> 00:07:36,040
Speaker 2: skyward and they're moving up, you know, very significantly. They're

144
00:07:36,040 --> 00:07:42,720
Speaker 2: still still in heading higher here. So that's a big

145
00:07:42,760 --> 00:07:44,600
Speaker 2: part of what's gone on in the equity market, the

146
00:07:44,640 --> 00:07:47,800
Speaker 2: stock market over the past little over a year. The

147
00:07:47,880 --> 00:07:52,000
Speaker 2: other stocks, it's it's more kind of pedestrian, you know,

148
00:07:52,040 --> 00:07:54,880
Speaker 2: it's kind of mid single digit kind of increases in

149
00:07:54,920 --> 00:07:57,040
Speaker 2: stock prices, so kind of what you would typically see.

150
00:07:57,160 --> 00:08:00,320
Speaker 2: But even there, you've gotten maybe a bit of support

151
00:08:00,440 --> 00:08:03,080
Speaker 2: from the tax cuts, right, the tax cuts help business,

152
00:08:03,080 --> 00:08:06,440
Speaker 2: it lowers their tax bill in the lower interest rates.

153
00:08:06,480 --> 00:08:10,360
Speaker 2: So you know, even the non AI stocks are up

154
00:08:10,920 --> 00:08:14,320
Speaker 2: pretty pretty strongly, but not you know, five five, six,

155
00:08:14,480 --> 00:08:18,480
Speaker 2: seventy nine percent something like that, not twenty thirty forty

156
00:08:18,560 --> 00:08:21,280
Speaker 2: fifty percent, of which is what we've seen with the

157
00:08:21,320 --> 00:08:22,440
Speaker 2: AI stocks.

158
00:08:23,360 --> 00:08:27,520
Speaker 1: In the past. Fiscal stimulus, whether coming directly from the

159
00:08:27,520 --> 00:08:31,200
Speaker 1: government or via the FED, the hope was that it

160
00:08:31,240 --> 00:08:34,320
Speaker 1: was going to trigger job creation, which then in turn

161
00:08:34,880 --> 00:08:39,840
Speaker 1: would obviously grow the economy. Where's the job creation coming from,

162
00:08:39,920 --> 00:08:44,160
Speaker 1: because that doesn't seem as clear, Like I see all

163
00:08:44,160 --> 00:08:47,679
Speaker 1: the savings that companies are seeing, the investments that they

164
00:08:47,679 --> 00:08:49,720
Speaker 1: want to make, but when you look at data centers,

165
00:08:49,840 --> 00:08:55,040
Speaker 1: these are investments that create very few jobs, and a

166
00:08:55,040 --> 00:08:57,160
Speaker 1: lot of the architecture that's being invested in the world

167
00:08:57,200 --> 00:09:01,439
Speaker 1: of AI, other than the industrial part of building said

168
00:09:02,000 --> 00:09:05,400
Speaker 1: data center, there isn't a lot of job creation with it.

169
00:09:05,640 --> 00:09:07,800
Speaker 1: And I know before we've discussed about the only place

170
00:09:07,800 --> 00:09:09,640
Speaker 1: that had been growing in twenty twenty five. In the

171
00:09:09,720 --> 00:09:14,280
Speaker 1: job front, we're home healthcare worker? Were is there? You

172
00:09:14,280 --> 00:09:16,839
Speaker 1: know in this last three months is job I mean

173
00:09:16,880 --> 00:09:19,400
Speaker 1: that looked like pretty tepid job numbers to me that

174
00:09:19,440 --> 00:09:23,880
Speaker 1: we saw in December. Are we going to have a

175
00:09:25,840 --> 00:09:28,240
Speaker 1: jobless recovery? And I guess I don't know if we

176
00:09:28,320 --> 00:09:29,560
Speaker 1: even call this or currently over here?

177
00:09:29,679 --> 00:09:32,600
Speaker 2: Yeah, well, you know, I started the conversation by saying

178
00:09:32,640 --> 00:09:34,560
Speaker 2: I feel a little bit better about the economy than

179
00:09:34,559 --> 00:09:38,079
Speaker 2: I did three months ago. But if I completed the sentence,

180
00:09:38,080 --> 00:09:40,400
Speaker 2: I would say I still don't feel that good about

181
00:09:40,400 --> 00:09:44,400
Speaker 2: the economy. It still feels pretty fragile to me. And

182
00:09:44,520 --> 00:09:46,840
Speaker 2: that goes to the job market. We are not creating

183
00:09:46,880 --> 00:09:49,960
Speaker 2: any jobs, and that was the message in today's jobs

184
00:09:50,040 --> 00:09:52,760
Speaker 2: numbers for the month of December. You know, not only

185
00:09:52,760 --> 00:09:54,840
Speaker 2: did we not create many jobs during the month, but

186
00:09:55,040 --> 00:09:57,680
Speaker 2: we saw downward revisions to previous months. And in fact,

187
00:09:57,679 --> 00:10:01,440
Speaker 2: if you look the job mark market in terms of

188
00:10:01,520 --> 00:10:05,120
Speaker 2: job creation is going completely flatlined since Liberation Day. Just

189
00:10:05,360 --> 00:10:07,480
Speaker 2: you know, can look at the data month to month.

190
00:10:07,960 --> 00:10:11,200
Speaker 2: Right up until April of twenty twenty five, when we

191
00:10:11,280 --> 00:10:14,880
Speaker 2: had Liberation Day, we were creating one hundred and sixty

192
00:10:15,000 --> 00:10:18,200
Speaker 2: hundred and seventy hundred te thousand jobs per month in

193
00:10:18,240 --> 00:10:21,800
Speaker 2: the wake of that day, Beginning in May of the

194
00:10:21,960 --> 00:10:25,040
Speaker 2: of twenty twenty five, we've flatlined. You know, some months

195
00:10:25,080 --> 00:10:29,160
Speaker 2: a little up, someone's a little down. And you're right,

196
00:10:29,320 --> 00:10:32,439
Speaker 2: the job growth that we are getting is very concentrated

197
00:10:32,440 --> 00:10:35,280
Speaker 2: in the healthcare sector, maybe a little bit in leisure hospitality,

198
00:10:35,720 --> 00:10:38,439
Speaker 2: but that's it. You know, in the rest of the economy,

199
00:10:38,480 --> 00:10:42,920
Speaker 2: we're not creating any jobs, and businesses broadly just aren't hiring.

200
00:10:43,480 --> 00:10:47,680
Speaker 2: And so I don't think that's a very comfortable place

201
00:10:47,720 --> 00:10:50,800
Speaker 2: to be, you know, I said fragile. I think that's

202
00:10:50,840 --> 00:10:53,120
Speaker 2: the right word. It's very fragile. Everything has got to

203
00:10:53,160 --> 00:10:55,920
Speaker 2: stick to script here. If anything kind of goes off

204
00:10:56,360 --> 00:10:59,320
Speaker 2: script a little bit, I think we got a problem.

205
00:10:59,640 --> 00:11:04,240
Speaker 1: Is there even I mean in theory, where would job

206
00:11:04,280 --> 00:11:05,800
Speaker 1: creation come from in the world of AI.

207
00:11:07,960 --> 00:11:11,679
Speaker 2: Well, I mean one area would be the areas are

208
00:11:11,679 --> 00:11:16,080
Speaker 2: getting rocked by tariffs. I mean manufacturing. Manufacturing is losing

209
00:11:16,160 --> 00:11:18,680
Speaker 2: jobs plus eight thousand jobs in December, has been losing

210
00:11:18,760 --> 00:11:21,480
Speaker 2: jobs pretty steadily all year. You know, that's because of

211
00:11:21,480 --> 00:11:24,760
Speaker 2: the tariffs and the impact that said on supply chains

212
00:11:24,760 --> 00:11:29,040
Speaker 2: and manufacturing activity. Agriculture anything agg related because that's getting

213
00:11:29,120 --> 00:11:35,199
Speaker 2: rocked by the terriffs, Transportation distribution, wholesaling all in recession

214
00:11:35,400 --> 00:11:39,320
Speaker 2: losing jobs because of those would be sectors that presumably

215
00:11:39,800 --> 00:11:44,240
Speaker 2: would be adding to payrolls. And I think you have

216
00:11:44,400 --> 00:11:49,920
Speaker 2: general concern across the economy around the uncertainty created by policy,

217
00:11:49,960 --> 00:11:54,160
Speaker 2: by the terriffs, by immigration policy, by deglobalization more generally,

218
00:11:54,679 --> 00:11:56,760
Speaker 2: and so businesses have been sitting on their hands. So

219
00:11:57,200 --> 00:12:00,760
Speaker 2: almost all industries are being affected by that degree or another.

220
00:12:01,160 --> 00:12:03,520
Speaker 1: Is there any place where you have you know, think

221
00:12:03,520 --> 00:12:07,000
Speaker 1: about Let's let's take the immigration piece here a minute.

222
00:12:07,400 --> 00:12:09,920
Speaker 1: There's been an obviously an aggressive effort by this administration

223
00:12:10,000 --> 00:12:15,200
Speaker 1: to report folks that are undocumented. Has that and I've

224
00:12:15,240 --> 00:12:19,880
Speaker 1: seen the administration claim that US born new job you know,

225
00:12:20,040 --> 00:12:24,800
Speaker 1: US born workers are getting more jobs today than they

226
00:12:24,800 --> 00:12:26,640
Speaker 1: did a year ago. I don't know where they're getting

227
00:12:26,640 --> 00:12:30,840
Speaker 1: that stat What is the truthiness of that claim? One?

228
00:12:31,000 --> 00:12:36,000
Speaker 1: And two? Are we seeing any Are we seeing more

229
00:12:36,040 --> 00:12:38,200
Speaker 1: construction job openings or not?

230
00:12:39,720 --> 00:12:45,880
Speaker 2: Well, the number of foreign born workers is falling. The

231
00:12:45,960 --> 00:12:49,360
Speaker 2: number of native born workers is rising, but on the margin,

232
00:12:49,600 --> 00:12:51,559
Speaker 2: So you know, I don't know.

233
00:12:51,520 --> 00:12:54,000
Speaker 1: And is that really is it really rising? Or is

234
00:12:54,040 --> 00:12:56,680
Speaker 1: it more flatline and just native born as collapsing.

235
00:12:57,360 --> 00:13:01,000
Speaker 2: It's more the Latter's yeah, I mean, there might be

236
00:13:01,000 --> 00:13:04,280
Speaker 2: a slight tilt up in native more and native born,

237
00:13:04,360 --> 00:13:07,040
Speaker 2: but you know, I'm pressing, and it's certainly depressed relative

238
00:13:07,080 --> 00:13:09,360
Speaker 2: to where it was the last year in the year

239
00:13:09,400 --> 00:13:13,440
Speaker 2: before that. So it's not like we're seeing foreign native

240
00:13:13,559 --> 00:13:16,160
Speaker 2: foreign born workers loser jobs and native born workers take

241
00:13:16,200 --> 00:13:18,800
Speaker 2: those jobs. That's not what's happening. I think that's a

242
00:13:18,800 --> 00:13:22,480
Speaker 2: false narrative. They're just not feeling the filling the jobs

243
00:13:22,520 --> 00:13:24,600
Speaker 2: that you know, foreign born workers would typically take.

244
00:13:25,440 --> 00:13:26,560
Speaker 3: Uh and uh.

245
00:13:26,720 --> 00:13:30,319
Speaker 2: You know that that is restraining growth in jobs because

246
00:13:30,800 --> 00:13:33,440
Speaker 2: you know, if you don't have workers folks looking for work,

247
00:13:33,480 --> 00:13:36,640
Speaker 2: which we don't because of the immigration policy, they can't

248
00:13:36,679 --> 00:13:38,600
Speaker 2: be hired. They can't they can't turn into a job.

249
00:13:38,640 --> 00:13:40,960
Speaker 2: And that's part of the story. But the story goes

250
00:13:41,000 --> 00:13:44,040
Speaker 2: beyond the labor supply. It also goes to labor demand,

251
00:13:44,120 --> 00:13:46,560
Speaker 2: which we were talking about earlier. That's the terroriffs, that's

252
00:13:46,600 --> 00:13:50,120
Speaker 2: the uncertainty, that's the that's also AI starting to play

253
00:13:50,160 --> 00:13:52,480
Speaker 2: a role as well in terms of you know, labor demand.

254
00:13:52,559 --> 00:13:55,280
Speaker 2: So that's why unemployment is rising it's still low, but

255
00:13:55,320 --> 00:13:56,199
Speaker 2: it's rising.

256
00:13:56,000 --> 00:13:58,200
Speaker 1: Right, I Mean, it seems logical if I ran a

257
00:13:58,200 --> 00:14:03,720
Speaker 1: small business, I would our mid sized business, I delay

258
00:14:03,800 --> 00:14:06,720
Speaker 1: filling ahead for as long as I can until I

259
00:14:06,800 --> 00:14:09,360
Speaker 1: figure out how viable AI is, right. I mean, it's

260
00:14:09,400 --> 00:14:15,280
Speaker 1: a pretty logical mindset that that employers are are in

261
00:14:15,400 --> 00:14:16,160
Speaker 1: right now, are they not.

262
00:14:16,640 --> 00:14:18,800
Speaker 2: Yeah. I think that's more a large company thing, though,

263
00:14:18,800 --> 00:14:22,720
Speaker 2: than a small company thing. I think large definitely large companies.

264
00:14:22,760 --> 00:14:25,280
Speaker 2: I could attest to that personally. I mean, I know

265
00:14:25,360 --> 00:14:28,640
Speaker 2: that is what's going on. It's not that, And this

266
00:14:28,760 --> 00:14:31,040
Speaker 2: is why the economy is not in recession. Why you

267
00:14:31,080 --> 00:14:35,720
Speaker 2: know we're moving, we're growing. It's that they're laying off.

268
00:14:35,880 --> 00:14:37,760
Speaker 2: It's not that they're doing that at least not.

269
00:14:37,840 --> 00:14:40,160
Speaker 1: No, you don't see that. They're just not replacing. They're

270
00:14:40,200 --> 00:14:43,000
Speaker 1: just not older workers that leave. Maybe they're they're they're

271
00:14:43,040 --> 00:14:46,520
Speaker 1: getting rid of expensive people, right, I've I've heard I've

272
00:14:46,520 --> 00:14:49,960
Speaker 1: heard rumors of that at various large entities, publicly traded companies.

273
00:14:50,240 --> 00:14:52,600
Speaker 1: But they're not they used to replace them. They're not

274
00:14:52,640 --> 00:14:54,360
Speaker 1: actually replacing these folks, right.

275
00:14:54,800 --> 00:14:58,040
Speaker 2: Exactly, Hiring rates are you know, way down that those

276
00:14:58,040 --> 00:15:01,360
Speaker 2: are large companies, maybe some mid size coming. Smaller companies,

277
00:15:01,400 --> 00:15:05,720
Speaker 2: I think they're they're getting you know, hit by things

278
00:15:05,760 --> 00:15:08,920
Speaker 2: like the terriffs, they're hurt by the immigration policy. They

279
00:15:09,080 --> 00:15:11,640
Speaker 2: they rely very heavily on immigrant workers. You know, think

280
00:15:11,640 --> 00:15:14,800
Speaker 2: about all those small manufacturers that you know operate in

281
00:15:14,840 --> 00:15:20,800
Speaker 2: the country, or constructing, the construction trades, retailing, you know, leisure, hospitality,

282
00:15:20,920 --> 00:15:23,960
Speaker 2: these industries. A lot of small companies they rely on

283
00:15:24,000 --> 00:15:27,040
Speaker 2: those the immigrant workers, and they can't they can't get them,

284
00:15:27,080 --> 00:15:29,080
Speaker 2: they can't find them. So that's and they're and they're

285
00:15:29,120 --> 00:15:31,240
Speaker 2: nervous about all of that. What does it mean? Where's

286
00:15:31,280 --> 00:15:32,960
Speaker 2: it going? How's it going? Is it going to change?

287
00:15:33,000 --> 00:15:34,480
Speaker 2: Is it going to get worse? Is going to get better?

288
00:15:34,800 --> 00:15:36,960
Speaker 2: So I don't in that in the small business world.

289
00:15:37,040 --> 00:15:39,040
Speaker 2: I don't think it's AI. I think it's these other

290
00:15:39,120 --> 00:15:43,000
Speaker 2: things that are causing Yeah, I really think that that's

291
00:15:43,040 --> 00:15:43,400
Speaker 2: the case.

292
00:15:43,480 --> 00:15:47,680
Speaker 1: Yeah, So let's talk about the trade deficit. It went down.

293
00:15:49,280 --> 00:15:51,760
Speaker 1: Is that really good for the economy or not? Well?

294
00:15:52,400 --> 00:15:55,160
Speaker 1: I mean, right, a shrinking trade deficit is not always

295
00:15:55,160 --> 00:15:58,920
Speaker 1: translated into a positive economic uh output.

296
00:15:59,000 --> 00:16:05,400
Speaker 2: No, Yeah, you're referencing the last data point we got

297
00:16:05,440 --> 00:16:08,320
Speaker 2: this week and was trade trade numbers for the I

298
00:16:08,360 --> 00:16:09,640
Speaker 2: think it was the month of buck. Yes, the month

299
00:16:09,680 --> 00:16:15,440
Speaker 2: of October really wacko. You know, we saw the trade

300
00:16:15,440 --> 00:16:19,960
Speaker 2: deficit declined for two key reasons. One, the exports of

301
00:16:20,080 --> 00:16:24,080
Speaker 2: so called non monetary gold, so gold that's held by

302
00:16:25,280 --> 00:16:29,000
Speaker 2: private individuals and companies, not the central bank, not the reserve.

303
00:16:29,440 --> 00:16:33,120
Speaker 2: Exports of that surge, okay. And the other thing is

304
00:16:33,160 --> 00:16:37,640
Speaker 2: that imports of pharmaceuticals collapsed. And this goes all this

305
00:16:37,680 --> 00:16:41,640
Speaker 2: goes to the tariffs and the scrambling of a trade

306
00:16:41,640 --> 00:16:44,440
Speaker 2: as a result of that. So the month of October

307
00:16:44,480 --> 00:16:46,800
Speaker 2: is just I don't know, I throw it out the window.

308
00:16:46,920 --> 00:16:49,280
Speaker 2: The better thing to do is just take a look

309
00:16:49,320 --> 00:16:53,440
Speaker 2: at the trade deficit through the year to day through

310
00:16:53,520 --> 00:16:56,800
Speaker 2: October this year in twenty twenty five, and compare that

311
00:16:56,840 --> 00:17:00,000
Speaker 2: to twenty twenty four, and the trade deficit is actually

312
00:17:00,000 --> 00:17:01,440
Speaker 2: a little bit larger or not, it's not.

313
00:17:01,520 --> 00:17:04,760
Speaker 1: So so that's just a you just think that's bad data.

314
00:17:04,800 --> 00:17:08,920
Speaker 1: I mean, in the polling world, we'd get a weird

315
00:17:09,119 --> 00:17:11,439
Speaker 1: you know, sometimes you get a weird subgroup data. You know,

316
00:17:11,440 --> 00:17:14,840
Speaker 1: you might get and our pollsters would say, unless you

317
00:17:14,880 --> 00:17:16,280
Speaker 1: see it two months in a row, ignore it.

318
00:17:16,960 --> 00:17:19,560
Speaker 2: Yeah, so I would ignore this, okay, you know, I

319
00:17:19,640 --> 00:17:22,280
Speaker 2: take year to day, you know, year to day throughout

320
00:17:22,280 --> 00:17:25,520
Speaker 2: ten months. That probably gives that definitely gives us a

321
00:17:25,560 --> 00:17:27,440
Speaker 2: clearer sense of what's going on, and the deficit is

322
00:17:27,480 --> 00:17:30,560
Speaker 2: not changed so that the tariffs aren't if that was

323
00:17:30,600 --> 00:17:33,000
Speaker 2: the goal. Right, so far, there's a lot of script

324
00:17:33,040 --> 00:17:35,280
Speaker 2: to be written here. Obviously this is all early days,

325
00:17:35,640 --> 00:17:38,640
Speaker 2: but so far that's not that goal is not being achieved.

326
00:17:39,040 --> 00:17:41,560
Speaker 1: Well, and then let's get to the reality of the tariffs,

327
00:17:41,600 --> 00:17:46,360
Speaker 1: because if what he pledged to do unlimited ration day

328
00:17:46,600 --> 00:17:50,320
Speaker 1: is what he did, I'm guessing we would be in

329
00:17:50,359 --> 00:17:51,199
Speaker 1: recession by now.

330
00:17:51,359 --> 00:17:51,560
Speaker 2: Yeah.

331
00:17:51,720 --> 00:17:56,880
Speaker 1: But because he's essentially created so many exemptions and he's

332
00:17:56,920 --> 00:18:03,160
Speaker 1: pulled back some things, particularly on food, what has been

333
00:18:03,160 --> 00:18:10,440
Speaker 1: the impact of the tariffs other than making private industry

334
00:18:10,640 --> 00:18:12,240
Speaker 1: crazy trying to navigate it?

335
00:18:12,800 --> 00:18:15,480
Speaker 2: Yeah. The way I totally agree, and the way I

336
00:18:15,480 --> 00:18:20,280
Speaker 2: would articulate that is by looking at the stated tariff rate,

337
00:18:20,359 --> 00:18:22,959
Speaker 2: what President Trump is saying the tariff rates are going

338
00:18:23,000 --> 00:18:24,840
Speaker 2: to be, or what the administration says the tarif rates

339
00:18:24,840 --> 00:18:27,720
Speaker 2: are going to be, you know, one hundred percent on China,

340
00:18:27,720 --> 00:18:30,200
Speaker 2: one hundred fifty percent on China, seventy five percent on China,

341
00:18:30,240 --> 00:18:34,600
Speaker 2: thirty percent on Korea, twenty five percent on autos from Japan.

342
00:18:34,680 --> 00:18:39,520
Speaker 2: Those are stated tariffs. That's kind of in what's being articulated.

343
00:18:39,640 --> 00:18:42,760
Speaker 2: Then you go look at the actual tariff revenue that's

344
00:18:42,800 --> 00:18:47,200
Speaker 2: being generated, you know what actually is being raised, and

345
00:18:47,760 --> 00:18:51,000
Speaker 2: you get a very different picture. It's ten percent effective

346
00:18:51,040 --> 00:18:54,720
Speaker 2: tariff rate, which is not inconsequential Chuck. I mean it

347
00:18:54,800 --> 00:18:56,760
Speaker 2: was two percent at the start of twenty twenty five.

348
00:18:56,800 --> 00:18:59,120
Speaker 2: So you go from two percent to ten percent, that

349
00:18:59,320 --> 00:19:03,639
Speaker 2: means weaker growth. We talked about manufacturing anag and transportation,

350
00:19:03,720 --> 00:19:06,280
Speaker 2: it means higher inflation. That goes to the affordability problems.

351
00:19:06,320 --> 00:19:09,840
Speaker 2: We're paying more for imported product. That's happening, but it's

352
00:19:09,880 --> 00:19:12,960
Speaker 2: not twenty five percent, it's not thirty five percent, it's

353
00:19:12,960 --> 00:19:16,720
Speaker 2: not one hundred percent. And it could easily change in

354
00:19:16,760 --> 00:19:19,320
Speaker 2: the next few weeks because Sprember is going to rule

355
00:19:19,359 --> 00:19:22,359
Speaker 2: on the reciprocal tariffs and the legality of that, and

356
00:19:22,400 --> 00:19:24,120
Speaker 2: it looks like they might strike that down and then

357
00:19:24,280 --> 00:19:26,080
Speaker 2: the effect of tariffrey will go from ten percent to

358
00:19:26,119 --> 00:19:28,480
Speaker 2: five percent. So that's a very different story, but it's

359
00:19:28,480 --> 00:19:30,879
Speaker 2: having an effect. But you're right, if we had actually

360
00:19:30,880 --> 00:19:33,960
Speaker 2: got the stated tariffs I think have been very difficult

361
00:19:33,960 --> 00:19:35,680
Speaker 2: to avoid an outright economic downturn.

362
00:19:38,920 --> 00:19:41,239
Speaker 1: This episode of the Chuck Podcast is brought to you

363
00:19:41,280 --> 00:19:44,400
Speaker 1: by Quints and I love me some Quints. New Year,

364
00:19:44,480 --> 00:19:47,640
Speaker 1: colder days. This is the moment your winter wardrobe really

365
00:19:47,680 --> 00:19:50,399
Speaker 1: has to deliver. If you're craving a winter reset, start

366
00:19:50,400 --> 00:19:54,000
Speaker 1: with pieces truly made to last season after season. Quint

367
00:19:54,040 --> 00:19:58,199
Speaker 1: springs together premium materials, thoughtful design, and enduring quality so

368
00:19:58,240 --> 00:20:00,560
Speaker 1: you stay warm, look sharp, and feel you your best

369
00:20:00,560 --> 00:20:04,320
Speaker 1: all season long. Quince has everything you need men's Mongolian

370
00:20:04,440 --> 00:20:07,800
Speaker 1: cashmere sweaters. I have one. I have to say, really

371
00:20:07,800 --> 00:20:10,840
Speaker 1: into it. They have wool coats, leather, and swed outerwear

372
00:20:10,920 --> 00:20:14,200
Speaker 1: that actually hold up to daily wear and still look good.

373
00:20:14,320 --> 00:20:18,400
Speaker 1: Their outerwear is especially impressive. Think down jackets, wool coats,

374
00:20:18,440 --> 00:20:21,640
Speaker 1: and Italian leather outerwear that keep you warm when it's

375
00:20:21,760 --> 00:20:25,840
Speaker 1: actually cold. Each piece made from premium materials, Quints delivers

376
00:20:25,880 --> 00:20:29,080
Speaker 1: the same quality as luxury brands at a fraction of

377
00:20:29,119 --> 00:20:32,199
Speaker 1: the price. The result is classic styles you'll love that

378
00:20:32,280 --> 00:20:35,160
Speaker 1: hold up year after year. You know me, I love

379
00:20:35,200 --> 00:20:37,400
Speaker 1: me my quarter zips. Quince hays quite a few of them.

380
00:20:37,560 --> 00:20:41,919
Speaker 1: They're great, They're both light and warm. There's nothing harder

381
00:20:41,960 --> 00:20:44,560
Speaker 1: than business casual. Right, you get these things? What can

382
00:20:44,600 --> 00:20:46,439
Speaker 1: I wear? What can you wear at the meeting? What

383
00:20:46,480 --> 00:20:48,280
Speaker 1: do you wear on a zoom? I have to say

384
00:20:48,320 --> 00:20:50,320
Speaker 1: it's as if Quince sort of says, hey, look, we've

385
00:20:50,320 --> 00:20:53,879
Speaker 1: got the modern sort of working wardrobe ready for you,

386
00:20:54,200 --> 00:20:58,199
Speaker 1: clothing that looks stylish, looks good, but is actually practical

387
00:20:58,320 --> 00:21:01,720
Speaker 1: and isn't going to break the bank. So refresher winter

388
00:21:01,760 --> 00:21:05,120
Speaker 1: wardrobe with Quints. Go to quints dot com slash chuck

389
00:21:05,280 --> 00:21:07,680
Speaker 1: for free shipping on your order and three hundred and

390
00:21:07,680 --> 00:21:10,520
Speaker 1: sixty five day returns. And it's also available in Canada.

391
00:21:10,560 --> 00:21:14,639
Speaker 1: That's q u i nce dot com slash chuck, free

392
00:21:14,640 --> 00:21:18,320
Speaker 1: shipping and three hundred and sixty five day returns quints

393
00:21:18,400 --> 00:21:25,320
Speaker 1: dot com slash chuck. So big picture, I mean, or

394
00:21:25,760 --> 00:21:29,600
Speaker 1: what what is this economy? And are we is it?

395
00:21:29,640 --> 00:21:32,080
Speaker 1: Is it still? I mean it still feels like an economy.

396
00:21:32,160 --> 00:21:35,760
Speaker 1: That is, if you have some savings, you're doing pretty well.

397
00:21:35,800 --> 00:21:40,080
Speaker 1: That the K that the K shaped economy where if

398
00:21:40,119 --> 00:21:42,240
Speaker 1: you're you know, if you're a living paycheck to paycheck,

399
00:21:42,240 --> 00:21:44,479
Speaker 1: it is harder. And if you've got a little bit

400
00:21:44,480 --> 00:21:49,240
Speaker 1: of savings you're managing, You're probably doing okay. Is that

401
00:21:49,520 --> 00:21:52,240
Speaker 1: still that your outlook for the next year, that this

402
00:21:52,400 --> 00:21:54,399
Speaker 1: is what this economy is going to continue to look like.

403
00:21:55,160 --> 00:21:59,680
Speaker 2: Yeah. I think if you look at the the economic

404
00:21:59,800 --> 00:22:04,840
Speaker 2: l and its totality a abstract from you know, what's

405
00:22:04,840 --> 00:22:08,560
Speaker 2: going on across industry, sectors, regions, different parts of the

406
00:22:08,600 --> 00:22:13,040
Speaker 2: income and wealth distribution, you know, the economy is is okay,

407
00:22:13,480 --> 00:22:16,800
Speaker 2: although as I said, it's you know, very fragile. Things

408
00:22:16,880 --> 00:22:18,879
Speaker 2: need to stick the script here otherwise we're going to

409
00:22:18,960 --> 00:22:21,280
Speaker 2: have a problem. But then when you touch different parts

410
00:22:21,320 --> 00:22:23,119
Speaker 2: of the elephant, you're going to get a different, you

411
00:22:23,160 --> 00:22:26,439
Speaker 2: know picture. So you picked one part of the elephant,

412
00:22:26,720 --> 00:22:30,000
Speaker 2: the income and wealth distribution that's very skewed. And if

413
00:22:30,000 --> 00:22:31,960
Speaker 2: you're at the top part of the income and wealth distribution,

414
00:22:32,640 --> 00:22:35,600
Speaker 2: life is good financially, right, I mean, you have a job,

415
00:22:35,680 --> 00:22:39,040
Speaker 2: your wages have been rising, you're getting a bonus, you

416
00:22:39,080 --> 00:22:42,080
Speaker 2: don't owe anything except maybe a mortgage Liane that you

417
00:22:42,119 --> 00:22:44,359
Speaker 2: locked in during the pandemic at two and a half

418
00:22:44,400 --> 00:22:46,520
Speaker 2: three three and a half percent. You're getting more on

419
00:22:46,560 --> 00:22:48,960
Speaker 2: your money market account than you're paying out on your mortgage,

420
00:22:49,520 --> 00:22:51,640
Speaker 2: and you own a lot of stuff you own your

421
00:22:51,640 --> 00:22:54,960
Speaker 2: own home, you own stocks, you you know you're you're

422
00:22:55,040 --> 00:22:57,640
Speaker 2: sitting in a good spot. But if you're a folks

423
00:22:57,720 --> 00:23:00,399
Speaker 2: in the bottom or middle part of the distribution, you know,

424
00:23:00,400 --> 00:23:03,000
Speaker 2: it's a very different world. You don't stocks, I don't

425
00:23:03,040 --> 00:23:05,240
Speaker 2: know any stocks, right, And if you're lucky to own

426
00:23:05,240 --> 00:23:07,600
Speaker 2: a home, if you're in the bottom part of the distribution,

427
00:23:07,800 --> 00:23:10,840
Speaker 2: very unlikely. So and you know, you know, people in

428
00:23:10,880 --> 00:23:13,760
Speaker 2: the bottom part of the distribution owe money on cards,

429
00:23:13,800 --> 00:23:18,120
Speaker 2: on auto loans, student loans, and so you know that

430
00:23:18,200 --> 00:23:22,280
Speaker 2: part of what part of the elephant you're touching really

431
00:23:22,320 --> 00:23:24,680
Speaker 2: does matter, you know, because you're getting these And that's

432
00:23:24,680 --> 00:23:28,600
Speaker 2: why I think there's such why disparate views on how

433
00:23:28,600 --> 00:23:32,119
Speaker 2: the economy is performing, and why there's such confusion around that,

434
00:23:32,200 --> 00:23:34,320
Speaker 2: because it really does vary quite a bit.

435
00:23:34,800 --> 00:23:36,359
Speaker 1: Well. And this, of course, you know when you hear

436
00:23:36,400 --> 00:23:39,040
Speaker 1: about the phrase when I when you use a phrase

437
00:23:39,080 --> 00:23:41,320
Speaker 1: like politically tone deaf. A lot of times these days,

438
00:23:41,320 --> 00:23:44,120
Speaker 1: if you only are interacting in your bubble, you may

439
00:23:44,160 --> 00:23:47,119
Speaker 1: not really fully realize what the economy looks like. And

440
00:23:47,160 --> 00:23:51,600
Speaker 1: of course that's this president is in a bubble, and

441
00:23:51,720 --> 00:23:55,400
Speaker 1: you know, we know how he views a successful economy

442
00:23:55,480 --> 00:24:00,919
Speaker 1: is not necessarily maybe how economist would view how the

443
00:24:00,920 --> 00:24:01,760
Speaker 1: economy is going.

444
00:24:01,960 --> 00:24:04,280
Speaker 2: Yeah, totally. And of course we all have our own

445
00:24:04,320 --> 00:24:06,159
Speaker 2: political prison as well. Look at the world through and

446
00:24:06,200 --> 00:24:09,720
Speaker 2: that is influencing our perceptions here to a much greater

447
00:24:09,840 --> 00:24:11,720
Speaker 2: degree than it has historically. I mean you can see

448
00:24:11,720 --> 00:24:14,120
Speaker 2: it in this sentiment surveys that you know, you can

449
00:24:14,160 --> 00:24:18,320
Speaker 2: look at how Republicans feel versus how independence or Democrats feel,

450
00:24:18,359 --> 00:24:19,439
Speaker 2: and it's totally different.

451
00:24:21,960 --> 00:24:23,919
Speaker 1: Yeah. I was just going to say that this that

452
00:24:24,080 --> 00:24:27,879
Speaker 1: is made polling on the economy I think worthless. I

453
00:24:28,400 --> 00:24:29,960
Speaker 1: used to fight to get rid of the questions because

454
00:24:29,960 --> 00:24:33,639
Speaker 1: I already know the result. Whoever is president, that party

455
00:24:33,680 --> 00:24:36,280
Speaker 1: will think the economy is getting better, and then the

456
00:24:36,280 --> 00:24:40,520
Speaker 1: other party will think it's getting worse. But consumer sentiment

457
00:24:40,560 --> 00:24:42,679
Speaker 1: does strike me as different. I mean, I feel like

458
00:24:42,720 --> 00:24:47,639
Speaker 1: that Michigan survey is a pretty honest, you know, it

459
00:24:47,640 --> 00:24:50,360
Speaker 1: feels like it does sort of, at least directionally, let

460
00:24:50,440 --> 00:24:53,600
Speaker 1: you know what people really think of this economy, and

461
00:24:54,160 --> 00:25:00,440
Speaker 1: consumer sentiment continues to be kind of it's still underwater, right, Yeah.

462
00:25:00,640 --> 00:25:02,919
Speaker 2: I think again, if you take a step back and

463
00:25:02,920 --> 00:25:05,000
Speaker 2: look at the entirety of the elephant and don't get

464
00:25:05,000 --> 00:25:06,560
Speaker 2: caught up in the parts of the elephant.

465
00:25:06,920 --> 00:25:07,320
Speaker 1: You're right.

466
00:25:07,359 --> 00:25:11,119
Speaker 2: I think the perceptions are that the economy is met

467
00:25:11,200 --> 00:25:14,080
Speaker 2: you know, it's just not doing what I expect it

468
00:25:14,119 --> 00:25:16,240
Speaker 2: to do, at least not for me. And I think

469
00:25:16,240 --> 00:25:21,440
Speaker 2: there's also a lot of anks around big picture issues,

470
00:25:21,520 --> 00:25:24,639
Speaker 2: you know that you know, maybe because of the pandemic,

471
00:25:24,720 --> 00:25:27,480
Speaker 2: we now are focus on things that are broader than ourselves.

472
00:25:27,480 --> 00:25:30,240
Speaker 2: And when you do that, you get nervous pretty quickly.

473
00:25:30,359 --> 00:25:35,520
Speaker 2: I mean, what's going on geopolitically? I mean, you know, well.

474
00:25:35,560 --> 00:25:38,040
Speaker 1: How do you factor that into an economic outlook? I mean,

475
00:25:38,119 --> 00:25:41,520
Speaker 1: let's I mean, you know, we have a showdown with

476
00:25:41,720 --> 00:25:47,880
Speaker 1: Europe over Greenland and NATO is suddenly gone. That feels

477
00:25:47,880 --> 00:25:50,560
Speaker 1: like it isn't good for our economy. But I don't

478
00:25:50,560 --> 00:25:52,960
Speaker 1: know how you how you price.

479
00:25:52,760 --> 00:25:57,880
Speaker 2: That in now you can't except through these sentiment surveys.

480
00:25:57,880 --> 00:26:00,000
Speaker 2: I mean, if they as you say, they are captured

481
00:26:00,080 --> 00:26:03,520
Speaker 2: during that angst, then we are picking that up and

482
00:26:03,560 --> 00:26:05,440
Speaker 2: that's in our modeling. And you know, but at the

483
00:26:05,520 --> 00:26:08,800
Speaker 2: end of the day, that's what makes economic forecasting so difficult,

484
00:26:08,880 --> 00:26:13,919
Speaker 2: right because it's it is driven by cology sentiment. You know,

485
00:26:13,960 --> 00:26:16,600
Speaker 2: events that are inherently unpredictable, and that's why it's so

486
00:26:16,640 --> 00:26:18,440
Speaker 2: difficult to get it right, you know, at least on

487
00:26:18,480 --> 00:26:19,480
Speaker 2: a consistent basis.

488
00:26:20,440 --> 00:26:24,840
Speaker 1: So compare the American economy with the rest of the world.

489
00:26:25,080 --> 00:26:28,640
Speaker 1: Who's doing better than us and who's doing worse than us?

490
00:26:28,800 --> 00:26:30,440
Speaker 1: That should concern us?

491
00:26:31,119 --> 00:26:31,879
Speaker 3: Uh.

492
00:26:32,640 --> 00:26:34,520
Speaker 2: I think the entire world is kind of in the

493
00:26:34,560 --> 00:26:37,960
Speaker 2: same place we are. You know, it's kind of growing.

494
00:26:38,040 --> 00:26:41,440
Speaker 2: It's okay, it's growing, but it's just a very kind

495
00:26:41,480 --> 00:26:46,399
Speaker 2: of fragile, tenuous kind of growth. I mean, China is

496
00:26:46,440 --> 00:26:50,000
Speaker 2: obviously the second largest economic player on the planet. They've

497
00:26:50,040 --> 00:26:52,199
Speaker 2: got you know, they're growing just like us, but they

498
00:26:52,320 --> 00:26:56,359
Speaker 2: got their problems just like us. Different set of problems. Europe,

499
00:26:56,480 --> 00:27:01,440
Speaker 2: same deal. They're growing, depends on you know, which part

500
00:27:01,480 --> 00:27:03,920
Speaker 2: of Europe you look at where you get the growth

501
00:27:04,040 --> 00:27:04,240
Speaker 2: or not.

502
00:27:04,840 --> 00:27:07,600
Speaker 1: But the Eastern still growing faster than Western Europe.

503
00:27:08,680 --> 00:27:12,800
Speaker 2: Or Southern Europe is growing faster than Northern Europe, nor

504
00:27:12,960 --> 00:27:19,480
Speaker 2: South Spain is doing great. Germany is still struggling, So

505
00:27:20,119 --> 00:27:22,119
Speaker 2: very similar kind of dynamics there, and I think the

506
00:27:22,160 --> 00:27:26,359
Speaker 2: same kind of general angs exists. And of course, you know,

507
00:27:26,400 --> 00:27:30,680
Speaker 2: it's not surprising because the US is rapidly pulling away

508
00:27:30,680 --> 00:27:33,160
Speaker 2: from the rest of the world, right. I mean, it's

509
00:27:33,160 --> 00:27:37,600
Speaker 2: a big change or two. In President Trump's first term,

510
00:27:37,640 --> 00:27:40,560
Speaker 2: it was we were all about integrating with the rest

511
00:27:40,560 --> 00:27:44,240
Speaker 2: of the world, globalization, We developed all the institutions to

512
00:27:44,280 --> 00:27:47,040
Speaker 2: support that, and here we are now moving away from

513
00:27:47,040 --> 00:27:48,879
Speaker 2: that as fast as possible. And I think that's just

514
00:27:48,960 --> 00:27:51,080
Speaker 2: unnerving for the rest of the world to watch.

515
00:27:51,960 --> 00:27:54,440
Speaker 1: Well. I mean, it really is just right. We spent

516
00:27:54,560 --> 00:27:57,040
Speaker 1: arguably the fall of the Berlin Wall right, starting with

517
00:27:57,119 --> 00:28:01,199
Speaker 1: Bush to Clinton to Bush to Obama. Every one of

518
00:28:01,200 --> 00:28:05,520
Speaker 1: those presidents was for global integration. The the right saw

519
00:28:05,560 --> 00:28:08,359
Speaker 1: it as sort of inevitable, so let's be on the

520
00:28:08,400 --> 00:28:11,919
Speaker 1: forefront of it. Obviously, Trump is the response is the

521
00:28:11,960 --> 00:28:14,560
Speaker 1: whoa wo woe. And I always say I've been saying

522
00:28:15,000 --> 00:28:19,920
Speaker 1: nationalism is contagious and when the largest you know, when

523
00:28:19,920 --> 00:28:24,360
Speaker 1: the largest economy in the world goes goes inward, don't

524
00:28:24,400 --> 00:28:27,400
Speaker 1: be surprised if everybody else starts turning inward as well.

525
00:28:28,000 --> 00:28:31,879
Speaker 1: Is that happening? Are you seeing that? Are we seeing

526
00:28:31,880 --> 00:28:34,040
Speaker 1: other countries decide, well, if we're going to start up

527
00:28:34,040 --> 00:28:36,720
Speaker 1: in tariffs and we better protect this industry in our country.

528
00:28:37,119 --> 00:28:40,200
Speaker 2: Yeah, same kind of dynamic. I mean certainly China is

529
00:28:40,200 --> 00:28:43,520
Speaker 2: a you know, obvious poster child for that. Sure, yeah,

530
00:28:43,560 --> 00:28:46,160
Speaker 2: but I do think that's happening everywhere in the world.

531
00:28:46,520 --> 00:28:48,400
Speaker 2: And the other thing that's happening is the rest of

532
00:28:48,440 --> 00:28:51,280
Speaker 2: the world is now trying to work with them each

533
00:28:51,320 --> 00:28:55,680
Speaker 2: other independent of US. So you can see Europe striking

534
00:28:55,880 --> 00:28:58,760
Speaker 2: free trade deals, you know, with other parts of the world,

535
00:28:59,080 --> 00:29:02,000
Speaker 2: which they might have done anyway, but certainly takes on

536
00:29:02,080 --> 00:29:05,480
Speaker 2: a greater importance now that they can't rely on the

537
00:29:05,560 --> 00:29:09,240
Speaker 2: US as a trading partner. And but that, you creates

538
00:29:09,240 --> 00:29:12,920
Speaker 2: all kinds of dislocations and adjustments and angst. And I

539
00:29:12,920 --> 00:29:15,040
Speaker 2: think that's what we're in the middle of. And I

540
00:29:15,040 --> 00:29:19,080
Speaker 2: think that's that's something that plagues the entire global economy.

541
00:29:19,120 --> 00:29:22,000
Speaker 2: So when you ask who's doing well, hard to say

542
00:29:22,000 --> 00:29:24,959
Speaker 2: anyone's doing all that well, because we're all dealing with

543
00:29:25,000 --> 00:29:28,760
Speaker 2: this really dramatic change in the way the global economy

544
00:29:28,800 --> 00:29:29,840
Speaker 2: is organized.

545
00:29:30,680 --> 00:29:34,240
Speaker 1: And I assume, because look, I'm gonna I'm probably projecting

546
00:29:34,240 --> 00:29:36,040
Speaker 1: my own feelings on this, so let me let me

547
00:29:36,120 --> 00:29:39,520
Speaker 1: ask it that way, then, simply, which is is part

548
00:29:39,520 --> 00:29:44,480
Speaker 1: of this unsettled this sort of what you just describe,

549
00:29:45,000 --> 00:29:48,360
Speaker 1: in part because the rest of the world hasn't decided

550
00:29:48,400 --> 00:29:51,680
Speaker 1: if this is a permanent stance of America or just

551
00:29:51,720 --> 00:29:55,840
Speaker 1: a temporary blip. While Trump's in charge, I think.

552
00:29:55,880 --> 00:29:58,880
Speaker 2: They've come to the conclusion, or quickly come into collusion conclusion,

553
00:29:58,920 --> 00:30:02,760
Speaker 2: that they need to uh prepare for a world that

554
00:30:02,960 --> 00:30:06,680
Speaker 2: is global deglobalizing, and that the US is not going

555
00:30:06,720 --> 00:30:08,920
Speaker 2: to be in the center of that of that global

556
00:30:08,920 --> 00:30:11,000
Speaker 2: economy or that global financial system. And they got to

557
00:30:11,000 --> 00:30:14,800
Speaker 2: figure that out. You know, maybe we get lucky from

558
00:30:14,800 --> 00:30:17,760
Speaker 2: their perspective, they get lucky, and things kind of reverse,

559
00:30:17,920 --> 00:30:20,440
Speaker 2: you know, on the other side of the next presidential election.

560
00:30:20,560 --> 00:30:23,360
Speaker 2: But I think increasingly they're not counting on that. Uh,

561
00:30:23,400 --> 00:30:28,280
Speaker 2: They're they're making they're making decisions that I think are

562
00:30:28,280 --> 00:30:31,080
Speaker 2: going to be pretty difficult to reverse going forward. I mean,

563
00:30:31,800 --> 00:30:35,760
Speaker 2: I think it's understandable that they are worried about the

564
00:30:35,800 --> 00:30:38,080
Speaker 2: reliability of the US, you know, going forward. I mean

565
00:30:38,080 --> 00:30:43,600
Speaker 2: they're seeing the really, uh, the kind of the fragility

566
00:30:43,680 --> 00:30:46,880
Speaker 2: of the kind of the American uh governance, the way

567
00:30:46,880 --> 00:30:50,080
Speaker 2: we govern ourselves. Who would have thought that, you know,

568
00:30:50,240 --> 00:30:52,880
Speaker 2: a president could do some of the things that are

569
00:30:52,920 --> 00:30:55,840
Speaker 2: being done here. And I'm not even debating whether they're

570
00:30:55,880 --> 00:30:58,520
Speaker 2: good or bad, just the fact that they're being done right,

571
00:30:59,080 --> 00:31:02,240
Speaker 2: and they're saying, oh, oh my gosh, what I didn't.

572
00:31:02,240 --> 00:31:06,800
Speaker 1: Know the US was the poster child for rules based Yeah, no, no, no, no,

573
00:31:07,000 --> 00:31:10,120
Speaker 1: there are rules for you know, when we decide to

574
00:31:10,120 --> 00:31:11,000
Speaker 1: go into a country.

575
00:31:11,520 --> 00:31:17,280
Speaker 2: Yeah, to be Frank Chuck, I, I'm also surprised by

576
00:31:17,360 --> 00:31:20,440
Speaker 2: all this. And so the rest of the world is saying, oh,

577
00:31:21,120 --> 00:31:25,600
Speaker 2: I thought the US was on more solid ground than

578
00:31:25,720 --> 00:31:28,360
Speaker 2: it actually is. And if that's the case, I don't

579
00:31:28,360 --> 00:31:31,360
Speaker 2: care who the next president is, because the next one

580
00:31:31,360 --> 00:31:33,920
Speaker 2: after that could take a very different turn.

581
00:31:34,760 --> 00:31:38,680
Speaker 1: Have you Well, I feel like Europe, at least the

582
00:31:38,720 --> 00:31:43,320
Speaker 1: Western European leaders, right Germany, France, in the UK, to

583
00:31:43,320 --> 00:31:47,920
Speaker 1: a lesser extent, Italy, they seem to they seem to realize, hey,

584
00:31:48,400 --> 00:31:50,880
Speaker 1: they've got to strength in the EU, they've got to

585
00:31:50,920 --> 00:31:56,040
Speaker 1: strengthen what they're doing. But have you seen evidence that

586
00:31:56,600 --> 00:32:01,160
Speaker 1: China has been able to take advantage of the US

587
00:32:01,200 --> 00:32:03,440
Speaker 1: being in global retreat?

588
00:32:03,520 --> 00:32:05,560
Speaker 2: No, I mean they've got they have their own set

589
00:32:05,560 --> 00:32:09,360
Speaker 2: of problems and issues, right, I mean some cyclical more

590
00:32:09,680 --> 00:32:12,560
Speaker 2: and some more structural. I mean cyclical. Is they came

591
00:32:12,600 --> 00:32:15,400
Speaker 2: into this with a real estate sector that was just

592
00:32:15,440 --> 00:32:17,960
Speaker 2: a basket case that you know, we had our global

593
00:32:18,000 --> 00:32:21,240
Speaker 2: financial crisis back fifteen years ago, the housing market collapse.

594
00:32:21,600 --> 00:32:23,880
Speaker 2: They've been going through a similar kind of dynamic here

595
00:32:23,920 --> 00:32:26,320
Speaker 2: in recent years and in the wake of the pandemic,

596
00:32:26,360 --> 00:32:28,600
Speaker 2: and that has been a real problem for.

597
00:32:28,600 --> 00:32:30,960
Speaker 1: This And they still have a youth unemployment problem too.

598
00:32:31,160 --> 00:32:32,760
Speaker 2: Yeah, they do. I mean they've got all kinds of

599
00:32:32,800 --> 00:32:36,320
Speaker 2: structural longer term structural issues. Is the demographic issues or

600
00:32:36,400 --> 00:32:41,000
Speaker 2: the population is like they you know, those countries that

601
00:32:41,480 --> 00:32:47,480
Speaker 2: embrace immigration, they are the most successful countries long run,

602
00:32:47,760 --> 00:32:50,960
Speaker 2: and especially in a world where the demographics are such

603
00:32:51,000 --> 00:32:54,440
Speaker 2: that everyone's aging and the population is declining. And that's

604
00:32:54,480 --> 00:32:57,720
Speaker 2: now China's problem. So they've got that issue that you know.

605
00:32:57,760 --> 00:33:00,440
Speaker 2: And I also think they've got an issue with democratic

606
00:33:00,520 --> 00:33:03,960
Speaker 2: government and the ability to manage a complex economy with

607
00:33:04,000 --> 00:33:08,040
Speaker 2: an autocratic leader. I think that's an issue. So, you know,

608
00:33:08,240 --> 00:33:10,800
Speaker 2: I think China's got its own set of problems and

609
00:33:10,800 --> 00:33:13,040
Speaker 2: they've not been able to take advantage. But it's not

610
00:33:13,080 --> 00:33:16,600
Speaker 2: like they're standing still, right. They're also now thinking about

611
00:33:16,760 --> 00:33:19,720
Speaker 2: they're reornering their supply chains and where they're exporting to

612
00:33:19,840 --> 00:33:22,040
Speaker 2: and who they're relying on I mean, they're no longer

613
00:33:22,040 --> 00:33:24,080
Speaker 2: exporting as much to us, but they're exporting a lot

614
00:33:24,080 --> 00:33:26,480
Speaker 2: more to Europe. So you know, they're figuring it out

615
00:33:26,520 --> 00:33:28,959
Speaker 2: and they're adjusting like everybody else. But they've got their

616
00:33:29,000 --> 00:33:31,000
Speaker 2: issues as well, so it's made it more difficult for

617
00:33:31,040 --> 00:33:33,200
Speaker 2: them to kind of And at the end of the day,

618
00:33:33,680 --> 00:33:37,440
Speaker 2: no country benefited more from globalization than China, right, So

619
00:33:37,760 --> 00:33:40,600
Speaker 2: I mean, if you're going to deglobalize, you would think

620
00:33:40,600 --> 00:33:42,480
Speaker 2: all else being equal, they'd be you know, one of

621
00:33:42,520 --> 00:33:44,640
Speaker 2: the casualties of that into signal.

622
00:33:44,400 --> 00:33:46,320
Speaker 1: Well and theory, that's why we're doing that, right, the

623
00:33:46,360 --> 00:33:49,880
Speaker 1: whole motivation, that's what historical motivation, frankly left and right

624
00:33:50,240 --> 00:33:52,760
Speaker 1: has been. Hey, the rise of China has been bad

625
00:33:52,760 --> 00:33:55,520
Speaker 1: for America. We ought to slow their rise, right, And.

626
00:33:55,960 --> 00:33:58,720
Speaker 2: I you know, I think there's some validity to that argument,

627
00:33:58,760 --> 00:34:02,920
Speaker 2: although you know, I go back to Obama in the

628
00:34:02,920 --> 00:34:06,080
Speaker 2: Transpacific Partnership deal. I mean, there was a general sense

629
00:34:06,120 --> 00:34:08,799
Speaker 2: that China was not playing fair. They didn't do what

630
00:34:08,840 --> 00:34:10,960
Speaker 2: they promised to do if we allowed them to enter

631
00:34:11,000 --> 00:34:16,080
Speaker 2: into the global economic system. Uh, And the result of

632
00:34:16,120 --> 00:34:18,440
Speaker 2: the strategy was, Okay, we're gonna have this free trade

633
00:34:18,440 --> 00:34:20,800
Speaker 2: deal with all the Pacific rim nations, including the US,

634
00:34:20,840 --> 00:34:24,080
Speaker 2: excluding China, because they didn't play fair, and the idea

635
00:34:24,160 --> 00:34:26,040
Speaker 2: was that that would force them to start playing by

636
00:34:26,040 --> 00:34:28,040
Speaker 2: the rules. Of course, I got blown up right away

637
00:34:28,040 --> 00:34:29,640
Speaker 2: on the President Trump's first term.

638
00:34:30,400 --> 00:34:35,359
Speaker 1: What are you one of the potential big moments in

639
00:34:35,400 --> 00:34:37,840
Speaker 1: the world of trade in the economy is going to

640
00:34:37,880 --> 00:34:41,400
Speaker 1: be the renewal if there is one of the NAFTA,

641
00:34:41,840 --> 00:34:42,680
Speaker 1: also known as US.

642
00:34:45,200 --> 00:34:47,520
Speaker 2: By the way, you have to say kuzma in Canada

643
00:34:47,560 --> 00:34:51,279
Speaker 2: they call it KUZMA Canada, USMC Mexico.

644
00:34:51,040 --> 00:34:54,920
Speaker 1: Because it's Canada US Sure, is that MusmA? And is

645
00:34:54,960 --> 00:34:57,359
Speaker 1: it what MUSCA that I don't know?

646
00:34:57,560 --> 00:34:58,799
Speaker 2: I don't know, Yeah, I don't know.

647
00:35:00,280 --> 00:35:04,320
Speaker 1: Obviously, I feel like both Mexico and Canada have decided.

648
00:35:04,360 --> 00:35:07,760
Speaker 1: Krne and Scheinbaumer are like, hey, let's just preserve status

649
00:35:07,840 --> 00:35:09,920
Speaker 1: quo for as long as we can. So whatever we

650
00:35:09,920 --> 00:35:12,760
Speaker 1: can do to just you know, buy another year before

651
00:35:12,760 --> 00:35:15,920
Speaker 1: we negotiate, buy more time, which which I strategically get.

652
00:35:16,680 --> 00:35:19,120
Speaker 1: But what are you going to be looking for in

653
00:35:19,160 --> 00:35:22,279
Speaker 1: the US posture on the USMCA. That will tell you

654
00:35:22,719 --> 00:35:25,799
Speaker 1: a little bit more about what this economy starts to

655
00:35:25,840 --> 00:35:27,560
Speaker 1: look like in the next couple of years.

656
00:35:27,920 --> 00:35:29,520
Speaker 2: Well, you know this is going to come to a

657
00:35:29,560 --> 00:35:32,239
Speaker 2: head here pretty quickly, right, because the USMCA has to

658
00:35:32,280 --> 00:35:35,160
Speaker 2: be renegotiated in the next few months. So you know,

659
00:35:36,600 --> 00:35:40,840
Speaker 2: if the if the administration president doesn't focus on Mexico

660
00:35:40,920 --> 00:35:43,920
Speaker 2: Canada in the next month, two or three, then I

661
00:35:44,160 --> 00:35:47,960
Speaker 2: would think we're going to sail through pretty quickly here.

662
00:35:48,000 --> 00:35:49,880
Speaker 2: And you know, I'm increasing on the mind that that's

663
00:35:49,960 --> 00:35:54,200
Speaker 2: what's going to happen, because this goes to the affordability issue. Right,

664
00:35:54,280 --> 00:35:54,799
Speaker 2: I'm with you.

665
00:35:54,880 --> 00:35:57,360
Speaker 1: I assume sometimes they're not going to mess with something

666
00:35:57,360 --> 00:35:59,759
Speaker 1: and then you're like, all of a sudden, you made

667
00:35:59,760 --> 00:36:00,680
Speaker 1: a say do you know what I want to go

668
00:36:00,680 --> 00:36:03,600
Speaker 1: after the Mexican cartels, and it totally blows up the

669
00:36:03,719 --> 00:36:04,359
Speaker 1: entire trade pill.

670
00:36:04,480 --> 00:36:07,160
Speaker 2: Yeah, no, that's true. But I think he's I think

671
00:36:07,200 --> 00:36:10,760
Speaker 2: the kind of the the the key here is the election,

672
00:36:10,960 --> 00:36:14,080
Speaker 2: and everything is focused on the election, and there is

673
00:36:14,400 --> 00:36:18,680
Speaker 2: a clear understanding I think politically that affordability is top

674
00:36:18,880 --> 00:36:21,240
Speaker 2: of mind for the voter. You could see the last

675
00:36:21,960 --> 00:36:25,239
Speaker 2: you know, special elections and in the sentiment surveys. So

676
00:36:25,320 --> 00:36:28,120
Speaker 2: if that's the case, you know, maybe I'm you know,

677
00:36:28,239 --> 00:36:31,440
Speaker 2: tariffs are pretty obviously not good for affordability. I mean,

678
00:36:31,480 --> 00:36:35,160
Speaker 2: it's pretty obvious, and everybody knows it, including the American electorate.

679
00:36:35,200 --> 00:36:37,279
Speaker 2: They know that that's not a good idea. They're paying

680
00:36:37,320 --> 00:36:40,680
Speaker 2: a lot more for everything that they're importing. Important we

681
00:36:40,719 --> 00:36:43,920
Speaker 2: import a lot of stuff. So in that context, you know,

682
00:36:44,000 --> 00:36:46,239
Speaker 2: it doesn't feel like you'd pick a fight. You know,

683
00:36:46,239 --> 00:36:50,239
Speaker 2: with China Mexico they're you know, big trading partners, you know,

684
00:36:50,400 --> 00:36:53,840
Speaker 2: just nail that down. The USMCA, you know, put some

685
00:36:53,920 --> 00:36:57,400
Speaker 2: pressure to make sure there's more US content in the

686
00:36:57,640 --> 00:37:01,480
Speaker 2: production that occurs, tweak the rules, but don't, you know,

687
00:37:01,560 --> 00:37:03,879
Speaker 2: don't pick a fight. That would be my sense of things.

688
00:37:03,920 --> 00:37:06,279
Speaker 2: So when you ask what am I looking for? I'm

689
00:37:06,320 --> 00:37:09,880
Speaker 2: looking for whether that gets on the radar screen on

690
00:37:09,960 --> 00:37:13,200
Speaker 2: true Social anytime in the next you know, four to six, eight.

691
00:37:13,000 --> 00:37:16,600
Speaker 1: Weeks, because saying you actually hope it's he's not focused

692
00:37:16,600 --> 00:37:16,880
Speaker 1: on it.

693
00:37:17,080 --> 00:37:20,040
Speaker 2: Yeah, he's focused. There's focus on other stuff when there's

694
00:37:20,040 --> 00:37:21,440
Speaker 2: plenty of stuff, you know obviously.

695
00:37:21,480 --> 00:37:24,040
Speaker 1: Right, all right, let me ask a few sort of

696
00:37:24,040 --> 00:37:30,120
Speaker 1: parochial questions. I have a soon to be college grad.

697
00:37:30,760 --> 00:37:33,120
Speaker 1: What's the job market look like for new college graduates?

698
00:37:33,160 --> 00:37:37,960
Speaker 2: These days. It's tough, Chuck, I mean really tough.

699
00:37:38,120 --> 00:37:40,160
Speaker 1: I mean, let's just say we're discovering this and we're

700
00:37:40,200 --> 00:37:43,719
Speaker 1: still five months away. Yeah, it's stuff out there. Yeah,

701
00:37:43,960 --> 00:37:44,480
Speaker 1: really tough.

702
00:37:44,520 --> 00:37:47,000
Speaker 2: And it goes back to the hiring freeze, right, I mean,

703
00:37:47,760 --> 00:37:50,839
Speaker 2: who needs to get hired. It's your your your, your kid,

704
00:37:51,480 --> 00:37:54,880
Speaker 2: you know that's graduating from school. I mean the last

705
00:37:54,880 --> 00:37:59,120
Speaker 2: graduating class has really struggled. Unemployment is you know, up

706
00:37:59,120 --> 00:38:03,000
Speaker 2: a lot, you know in that particular group twenty somethings. Oh,

707
00:38:03,080 --> 00:38:07,200
Speaker 2: here's an interesting stat if you go look at unemployment

708
00:38:07,239 --> 00:38:12,400
Speaker 2: by educational attainment, the increase in unemployment over the past

709
00:38:12,719 --> 00:38:16,719
Speaker 2: couple of years has been entirely for college educated. If

710
00:38:16,760 --> 00:38:20,880
Speaker 2: you look at folks with no high school degree or

711
00:38:21,680 --> 00:38:24,440
Speaker 2: a high school degree or some college, they're unemployment rate.

712
00:38:24,520 --> 00:38:26,480
Speaker 2: It hasn't gone down, but it has not really gone up.

713
00:38:26,520 --> 00:38:27,880
Speaker 2: It's really college educated.

714
00:38:28,040 --> 00:38:33,040
Speaker 1: There's still an income gap between having and not right, Yeah, okay, but.

715
00:38:33,400 --> 00:38:37,360
Speaker 2: It's just the historically that if you got a college degree,

716
00:38:37,400 --> 00:38:39,799
Speaker 2: you're golden, right, your unemployment rate was going to be low,

717
00:38:39,880 --> 00:38:41,279
Speaker 2: and it's going to be much lower than it and

718
00:38:41,280 --> 00:38:44,080
Speaker 2: it's not going to rise more quickly in an environment

719
00:38:44,160 --> 00:38:46,480
Speaker 2: like the current one, but that goes back I think

720
00:38:46,520 --> 00:38:49,040
Speaker 2: to AI. It's starting to have an impact. That goes

721
00:38:49,080 --> 00:38:51,080
Speaker 2: back to the hiring rates, and the college educated would

722
00:38:51,120 --> 00:38:53,360
Speaker 2: be the folks that we could get substituted out by AI,

723
00:38:53,520 --> 00:38:54,759
Speaker 2: and that's where the issues are.

724
00:38:54,840 --> 00:38:57,719
Speaker 1: So you got all the parents and said, hey, we

725
00:38:58,600 --> 00:39:00,239
Speaker 1: got to make sure our kids know how to OWD.

726
00:39:01,640 --> 00:39:05,160
Speaker 2: I know, I know, And now it's it's all about

727
00:39:05,200 --> 00:39:08,279
Speaker 2: embracing artificial intelligence. It really is. You've just got to

728
00:39:08,360 --> 00:39:10,760
Speaker 2: embrace it, and you know it's got to be yours.

729
00:39:11,280 --> 00:39:14,040
Speaker 2: So and I'm not sure you know, kids are getting

730
00:39:14,040 --> 00:39:16,120
Speaker 2: the right kind of education in school. I mean, the

731
00:39:16,160 --> 00:39:19,000
Speaker 2: faculty just aren't there yet. And that's a problem. So

732
00:39:19,000 --> 00:39:20,719
Speaker 2: you've got to do it almost on your own. You

733
00:39:20,800 --> 00:39:22,239
Speaker 2: got to go out and do it. But you got

734
00:39:22,280 --> 00:39:24,120
Speaker 2: you got to embrace it. You got to you got

735
00:39:24,120 --> 00:39:27,600
Speaker 2: to be able to use it effectively because that's that's

736
00:39:27,600 --> 00:39:28,600
Speaker 2: definitely where the jobs are.

737
00:39:29,200 --> 00:39:32,520
Speaker 1: You know. It's interesting and I again I'm projecting on

738
00:39:32,600 --> 00:39:36,440
Speaker 1: my own personal experiences, but they the new college president

739
00:39:36,600 --> 00:39:40,520
Speaker 1: of my younger my youngest UH is at s m

740
00:39:40,640 --> 00:39:43,360
Speaker 1: U and the new president there I HEARDAM and it

741
00:39:43,440 --> 00:39:46,920
Speaker 1: used to be at UT he has j Hertzel, Jay Hartzell,

742
00:39:47,040 --> 00:39:50,360
Speaker 1: He gut terrific. He's a good guy. He's got a

743
00:39:50,440 --> 00:39:54,880
Speaker 1: theory that classical education is actually going to make a comeback.

744
00:39:55,000 --> 00:39:58,920
Speaker 1: That that with. You know, we went basically a generation

745
00:39:59,040 --> 00:40:01,719
Speaker 1: of specialization, right You and I went to college and

746
00:40:01,760 --> 00:40:04,120
Speaker 1: there were still English majors. Then all of a sudden

747
00:40:04,120 --> 00:40:05,800
Speaker 1: we said we're not going to have any more English majors.

748
00:40:05,800 --> 00:40:07,440
Speaker 1: I mean, there's a university right down the street where

749
00:40:07,480 --> 00:40:09,960
Speaker 1: I live. They you know, it was a headline when

750
00:40:10,000 --> 00:40:12,520
Speaker 1: they just decided, hey, you can't major in English anymore

751
00:40:12,520 --> 00:40:15,719
Speaker 1: at Marymount here in Arlington. And suddenly, you know, that

752
00:40:15,800 --> 00:40:19,440
Speaker 1: became an contagious thing. And his theory is that actually

753
00:40:20,320 --> 00:40:22,960
Speaker 1: that's going to come back, and maybe that'll be it,

754
00:40:23,040 --> 00:40:25,960
Speaker 1: that'll be a good outcome. But we're but essentially you've

755
00:40:25,960 --> 00:40:28,440
Speaker 1: got to rewire universities to be able to do that,

756
00:40:28,760 --> 00:40:29,360
Speaker 1: right Yeah.

757
00:40:29,680 --> 00:40:31,839
Speaker 2: I think that there's a lot of validity to that.

758
00:40:32,920 --> 00:40:37,400
Speaker 2: You know, getting that degree in philosophy might not be

759
00:40:37,480 --> 00:40:41,520
Speaker 2: a bad idea. It's really about learning a framework for

760
00:40:41,719 --> 00:40:46,120
Speaker 2: thinking and being creative. And I don't know you get

761
00:40:46,120 --> 00:40:48,840
Speaker 2: that if you go to you know, undergrad business school.

762
00:40:49,080 --> 00:40:51,719
Speaker 2: You know, or you're you know, just I don't think

763
00:40:51,719 --> 00:40:54,440
Speaker 2: you get that, or you trained for pre law, you

764
00:40:54,480 --> 00:40:56,600
Speaker 2: know that kind of thing. So I think the way

765
00:40:56,640 --> 00:41:00,360
Speaker 2: we think about education is changing very rapid and I

766
00:41:00,400 --> 00:41:03,120
Speaker 2: think there's some real valility to that. But I think

767
00:41:03,160 --> 00:41:06,759
Speaker 2: to answer your question, what should your kid do, it's

768
00:41:06,840 --> 00:41:11,359
Speaker 2: really about, you know, go find something, some project that

769
00:41:12,040 --> 00:41:17,400
Speaker 2: embodies AI, embrace it and they show that, you know,

770
00:41:17,440 --> 00:41:21,080
Speaker 2: you've mastered the ability to harness the power of AI.

771
00:41:21,200 --> 00:41:23,080
Speaker 2: Because that's what I'm looking I'll tell you that's what

772
00:41:23,120 --> 00:41:26,279
Speaker 2: I'm looking for when I interview potential can and we're

773
00:41:26,320 --> 00:41:28,479
Speaker 2: not hiring a whole lot, but when we hire, that's

774
00:41:28,520 --> 00:41:30,560
Speaker 2: the kind of person I want, you know, someone who's

775
00:41:30,840 --> 00:41:33,160
Speaker 2: shown not so much that they got a degree from

776
00:41:33,440 --> 00:41:36,280
Speaker 2: you know, XYZ university. That's not what I care about anymore.

777
00:41:36,320 --> 00:41:39,319
Speaker 2: It's really do they show that initiative, that they've gone

778
00:41:39,320 --> 00:41:42,040
Speaker 2: out and done something and proven that they have that skill.

779
00:41:44,320 --> 00:41:47,960
Speaker 1: Having good life insurance is incredibly important. I know from

780
00:41:48,040 --> 00:41:51,120
Speaker 1: personal experience. I was sixteen when my father passed away.

781
00:41:51,120 --> 00:41:53,520
Speaker 1: We didn't have any money. He didn't leave us in

782
00:41:53,560 --> 00:41:57,960
Speaker 1: the best shape. My mother, single mother, now widow, myself

783
00:41:58,040 --> 00:41:59,719
Speaker 1: sixteen trying to figure out how am I going to

784
00:41:59,760 --> 00:42:03,000
Speaker 1: pay for college? And lo and behold, my dad had

785
00:42:03,080 --> 00:42:06,240
Speaker 1: one life insurance policy that we found wasn't a lot,

786
00:42:06,600 --> 00:42:09,320
Speaker 1: but it was important at the time, and it's why

787
00:42:09,440 --> 00:42:12,640
Speaker 1: I was able to go to college. Little did he

788
00:42:12,760 --> 00:42:16,480
Speaker 1: know how important that would be in that moment. Well,

789
00:42:16,600 --> 00:42:18,719
Speaker 1: guess what. That's why I am here to tell you

790
00:42:18,719 --> 00:42:21,640
Speaker 1: about Etho's life. They can provide you with peace of

791
00:42:21,680 --> 00:42:25,080
Speaker 1: mind knowing your family is protected even if the worst

792
00:42:25,120 --> 00:42:28,080
Speaker 1: comes to pass. Ethos is an online platform that makes

793
00:42:28,120 --> 00:42:31,760
Speaker 1: getting life insurance fast and easy, all designed to protect

794
00:42:31,760 --> 00:42:35,840
Speaker 1: your family's future in minutes, not months. There's no complicated process,

795
00:42:35,880 --> 00:42:39,560
Speaker 1: and it's one hundred percent online. There's no medical exam

796
00:42:39,600 --> 00:42:42,799
Speaker 1: require you just answer a few health questions online. You

797
00:42:42,800 --> 00:42:44,600
Speaker 1: can get a quote in as little as ten minutes,

798
00:42:44,640 --> 00:42:47,720
Speaker 1: and you can get same day coverage without ever leaving

799
00:42:47,840 --> 00:42:50,640
Speaker 1: your home. You can get up to three million dollars

800
00:42:50,680 --> 00:42:52,839
Speaker 1: in coverage, and some policies start as low as two

801
00:42:52,880 --> 00:42:56,040
Speaker 1: dollars a day that would be billed monthly. As of

802
00:42:56,080 --> 00:42:59,240
Speaker 1: March twenty twenty five, Business Insider named Ethos the number

803
00:42:59,239 --> 00:43:03,600
Speaker 1: one no medical exam instant life insurance provide so protect

804
00:43:03,600 --> 00:43:07,000
Speaker 1: your family with life insurance from Ethos get your free

805
00:43:07,080 --> 00:43:11,360
Speaker 1: quoted Ethos dot com slash chuck. So again, that's Ethos

806
00:43:11,400 --> 00:43:16,000
Speaker 1: dot com slash chuck. Application times may vary, and the

807
00:43:16,080 --> 00:43:19,279
Speaker 1: rates themselves may vary as well, but trust me, life

808
00:43:19,280 --> 00:43:22,480
Speaker 1: insurance is something you should really think about, especially if

809
00:43:22,520 --> 00:43:28,080
Speaker 1: you've got a growing family. Let me shift to housing.

810
00:43:30,040 --> 00:43:33,080
Speaker 1: I thought it was interesting to hear Donald Trump used

811
00:43:33,120 --> 00:43:36,400
Speaker 1: language that I might have heard Bernie Sanders use, which is,

812
00:43:36,480 --> 00:43:39,759
Speaker 1: corporations don't live in homes. People do when he talks

813
00:43:39,800 --> 00:43:43,000
Speaker 1: about Yeah, when he wanted to talk about banning sort

814
00:43:43,040 --> 00:43:46,920
Speaker 1: of corporate private equity from buying up single family homes, right,

815
00:43:48,040 --> 00:43:50,680
Speaker 1: I think you know, that's the populace in him. Right,

816
00:43:50,760 --> 00:43:53,880
Speaker 1: he knows like be careful where you walk down. I

817
00:43:53,920 --> 00:43:58,319
Speaker 1: think he frankly politically, that's he's certainly articulating it. I

818
00:43:58,320 --> 00:44:01,960
Speaker 1: think in the right way. Is this a good time

819
00:44:02,000 --> 00:44:02,600
Speaker 1: to buy a home.

820
00:44:04,719 --> 00:44:10,040
Speaker 2: It's still very unaffordable right for most Americans, you know,

821
00:44:10,440 --> 00:44:14,600
Speaker 2: even with the recent decline in mortgage rates. One of

822
00:44:14,640 --> 00:44:18,760
Speaker 2: the proposals he made yesterday was for Fanny Main and Fredimac,

823
00:44:18,840 --> 00:44:21,240
Speaker 2: the big mortgage companies, to go out and buy mortgage

824
00:44:21,239 --> 00:44:23,759
Speaker 2: bonds in an effort to bring down mortgage rates. So

825
00:44:23,760 --> 00:44:26,600
Speaker 2: mortgage rates actually have fallen today and we're now closer

826
00:44:26,600 --> 00:44:28,719
Speaker 2: to six percent on a thirty year fix. But even

827
00:44:28,760 --> 00:44:31,600
Speaker 2: if that's where they settle six percent, you know, the

828
00:44:31,920 --> 00:44:35,040
Speaker 2: monthly mortgage payment on a typical home, a median priced

829
00:44:35,040 --> 00:44:39,040
Speaker 2: home is probably going to be two thousand, two thousand

830
00:44:39,040 --> 00:44:42,000
Speaker 2: and two hundred and fifty in that ballpark. That's double

831
00:44:42,040 --> 00:44:44,960
Speaker 2: what it was before the pandemic, and so for most

832
00:44:45,200 --> 00:44:48,240
Speaker 2: Americans that's still very unaffordable. So the answer your question

833
00:44:48,360 --> 00:44:51,560
Speaker 2: is, is a good time to buy? You know not? You know,

834
00:44:52,280 --> 00:44:54,000
Speaker 2: I don't want I'm gonna paying with a broad I'm

835
00:44:54,000 --> 00:44:56,279
Speaker 2: paying with a broad brush. It really depends on where

836
00:44:56,320 --> 00:44:58,759
Speaker 2: you are and what kind of helm you're looking for,

837
00:44:58,880 --> 00:45:01,600
Speaker 2: But generally speaking, it's still better probably to rent than

838
00:45:01,640 --> 00:45:02,360
Speaker 2: to buy.

839
00:45:02,960 --> 00:45:05,320
Speaker 1: Uh. Well, let's look at it from the other perspective,

840
00:45:05,640 --> 00:45:07,840
Speaker 1: because you hear that this is actually kind of a problem.

841
00:45:07,880 --> 00:45:13,879
Speaker 1: You have a lot of older folks who are not selling. Yeah, right,

842
00:45:14,239 --> 00:45:18,920
Speaker 1: because it's not that they don't want to profit from

843
00:45:19,000 --> 00:45:22,040
Speaker 1: their house. They can't. You might sell something, but you

844
00:45:22,080 --> 00:45:25,279
Speaker 1: can't afford to go replace right where you live? Is

845
00:45:25,320 --> 00:45:27,120
Speaker 1: this a good time to sell a house.

846
00:45:28,880 --> 00:45:34,959
Speaker 2: Uh. Probably, Probably it's a difficult time to sell because

847
00:45:34,960 --> 00:45:37,960
Speaker 2: the aren't a lot of buyers. It's a pretty.

848
00:45:37,680 --> 00:45:40,720
Speaker 1: Start, even though inventory is narrow and small, because in theory,

849
00:45:40,760 --> 00:45:43,080
Speaker 1: you would think with a with you know, we still

850
00:45:43,280 --> 00:45:46,279
Speaker 1: we still have a housing shortage in this country. Correct. Yeah,

851
00:45:46,360 --> 00:45:49,400
Speaker 1: when theory right, by the laws of supply and demand,

852
00:45:49,560 --> 00:45:50,680
Speaker 1: should be a good time to sell.

853
00:45:51,200 --> 00:45:54,120
Speaker 2: Yeah, it's just that they're not a lot of you know,

854
00:45:54,120 --> 00:45:56,120
Speaker 2: at the price points that you want to sell at,

855
00:45:56,200 --> 00:45:57,719
Speaker 2: you're not going to find a lot of buyers that

856
00:45:57,760 --> 00:46:00,279
Speaker 2: can afford it, at least not yet. I mean, there

857
00:46:00,280 --> 00:46:02,600
Speaker 2: is a proposal, and I think it's a good one

858
00:46:02,600 --> 00:46:06,799
Speaker 2: because I made it with a few other colleagues where

859
00:46:08,080 --> 00:46:13,440
Speaker 2: you would raise the capital gains exclusion on homes and

860
00:46:13,800 --> 00:46:16,600
Speaker 2: I probably limited to seniors people over the age of

861
00:46:16,640 --> 00:46:19,560
Speaker 2: sixty five because one of the problems is you've got

862
00:46:20,040 --> 00:46:23,120
Speaker 2: these older homeowners that are living in these big homes

863
00:46:23,120 --> 00:46:25,000
Speaker 2: that they made sense when they had kids, but they're

864
00:46:25,000 --> 00:46:27,839
Speaker 2: empty nesters. They don't want to sell. They're sitting in

865
00:46:27,840 --> 00:46:30,520
Speaker 2: New York, they're sitting in California, they're sitting in Miami,

866
00:46:31,360 --> 00:46:35,879
Speaker 2: and uh, the capital gains Uh, just doesn't make sense.

867
00:46:36,120 --> 00:46:37,400
Speaker 2: You know, if you wait and you die and you

868
00:46:37,600 --> 00:46:40,719
Speaker 2: and you bequeath, you get stepped up basis, so you

869
00:46:40,760 --> 00:46:43,640
Speaker 2: don't play that capital gains tax. So people are doing that,

870
00:46:43,680 --> 00:46:45,680
Speaker 2: and so you got a lot of It's a lot

871
00:46:45,719 --> 00:46:49,920
Speaker 2: more than I think as well well understood that got

872
00:46:49,920 --> 00:46:51,399
Speaker 2: a lot of those folks that are sitting in homes

873
00:46:51,400 --> 00:46:54,080
Speaker 2: that they really would sell if they could, you know,

874
00:46:54,160 --> 00:46:57,840
Speaker 2: reduce that capital gains exclusion. So I in that exclusion that.

875
00:46:58,200 --> 00:47:01,440
Speaker 1: Two fifty used to be fifty per person, right.

876
00:47:01,840 --> 00:47:04,839
Speaker 2: For an individual, five hundred k for a couple couple, right,

877
00:47:04,920 --> 00:47:07,080
Speaker 2: So that was said in nineteen ninety seven. So if

878
00:47:07,080 --> 00:47:12,719
Speaker 2: you just index that to say inflation double to five

879
00:47:12,800 --> 00:47:14,960
Speaker 2: hundred k and a million, and you would get a

880
00:47:14,960 --> 00:47:18,319
Speaker 2: lot more of those homes being sold and you get

881
00:47:18,320 --> 00:47:19,720
Speaker 2: to start of the market movement.

882
00:47:19,800 --> 00:47:22,319
Speaker 1: That's what I would seems like. I mean, given this,

883
00:47:22,440 --> 00:47:24,160
Speaker 1: I mean that seems like a no brainer. Why is

884
00:47:24,200 --> 00:47:28,359
Speaker 1: that a difficult policy to get proposed to, Chuck? I mean,

885
00:47:28,400 --> 00:47:31,359
Speaker 1: you know everything well on this one, I don't, I mean,

886
00:47:31,400 --> 00:47:33,480
Speaker 1: because this is one no there's a lot of support,

887
00:47:33,920 --> 00:47:37,200
Speaker 1: right who I think this is a left right easy layout?

888
00:47:37,320 --> 00:47:40,040
Speaker 2: Well, yeah, I think there is a lot of support

889
00:47:40,239 --> 00:47:42,040
Speaker 2: on both the Republican and Democrats. And in fact that

890
00:47:42,080 --> 00:47:44,600
Speaker 2: there's a reconciliation bill. If we get another piece of.

891
00:47:45,040 --> 00:47:46,520
Speaker 1: And you would expect that in there.

892
00:47:46,360 --> 00:47:47,720
Speaker 2: I think that might make it through.

893
00:47:48,120 --> 00:47:53,759
Speaker 1: I think even the recon Yeah, well I'm torn on reconciliation,

894
00:47:53,920 --> 00:47:58,400
Speaker 1: meaning I think Trump, it's my understanding Trump is just

895
00:47:58,480 --> 00:48:01,520
Speaker 1: lost interest in Congress. Uh huh, and that there's a

896
00:48:01,560 --> 00:48:04,040
Speaker 1: lot of Republicans nervous that even though they want to

897
00:48:04,040 --> 00:48:06,439
Speaker 1: do a reconciliation, he doesn't want to do the heavy

898
00:48:06,480 --> 00:48:09,040
Speaker 1: lift this time. He already did it once. I don't

899
00:48:09,080 --> 00:48:11,000
Speaker 1: need to. I don't want to have to do it.

900
00:48:11,160 --> 00:48:13,759
Speaker 1: Let me just go around Congress. So I don't know

901
00:48:13,800 --> 00:48:16,799
Speaker 1: if we're going to Like I assume reconciliation was going

902
00:48:16,880 --> 00:48:20,560
Speaker 1: to happen, right, why wouldn't you? And I've been not

903
00:48:20,719 --> 00:48:23,240
Speaker 1: I want to say, waved off, but like, don't be shocked.

904
00:48:23,760 --> 00:48:25,800
Speaker 1: He isn't interested in the moment.

905
00:48:25,840 --> 00:48:28,840
Speaker 2: Oh interesting. Interesting, that may change pretty quickly if the

906
00:48:28,840 --> 00:48:31,120
Speaker 2: economy doesn't cooperate, if we start losing jobs as a

907
00:48:32,120 --> 00:48:34,319
Speaker 2: the you know holding you know where we are, and

908
00:48:34,360 --> 00:48:36,440
Speaker 2: he started and there's some worry about how the election

909
00:48:36,520 --> 00:48:39,440
Speaker 2: plays out as a result, maybe get a quick change here,

910
00:48:39,520 --> 00:48:42,800
Speaker 2: but reconciliation may not be that easy either, right, Chuck,

911
00:48:42,840 --> 00:48:46,320
Speaker 2: I mean, I mean not that feels like it's getting

912
00:48:46,320 --> 00:48:49,640
Speaker 2: more and more independent from you know, the executive branch now,

913
00:48:49,680 --> 00:48:52,080
Speaker 2: and it's not clear that you can marshal the votes,

914
00:48:52,320 --> 00:48:54,400
Speaker 2: you know, even to get a majority in the House.

915
00:48:54,440 --> 00:48:56,640
Speaker 2: So it's not clear that that would happen even if

916
00:48:56,680 --> 00:48:57,239
Speaker 2: they wanted to.

917
00:48:57,680 --> 00:49:00,960
Speaker 1: I'm actually entertaining the idea that the the current majority

918
00:49:01,520 --> 00:49:05,680
Speaker 1: party could lose its status before November looking at all

919
00:49:05,719 --> 00:49:08,920
Speaker 1: of the you know, just you know, you had a

920
00:49:09,000 --> 00:49:12,800
Speaker 1: lawmaker and a car accident, you had somebody dropped dead. Surprise.

921
00:49:12,880 --> 00:49:16,320
Speaker 1: You know, this is it. You know, it's called actuary tables.

922
00:49:16,320 --> 00:49:17,440
Speaker 1: Stuff happens, you.

923
00:49:17,360 --> 00:49:19,719
Speaker 2: Know, stuff happens interesting, right.

924
00:49:19,719 --> 00:49:23,000
Speaker 1: And our margins are so close, so so who knows there, Well,

925
00:49:23,040 --> 00:49:24,439
Speaker 1: let me get you out of here on this. Which

926
00:49:24,520 --> 00:49:27,680
Speaker 1: is you? You, I assume live in a world of

927
00:49:27,680 --> 00:49:30,960
Speaker 1: always trying to understand there's always risk, there's always risk

928
00:49:31,239 --> 00:49:35,040
Speaker 1: that can impact the economy. If you were to prioritize

929
00:49:35,120 --> 00:49:37,400
Speaker 1: the levels of risk that could just sort of up

930
00:49:37,440 --> 00:49:44,480
Speaker 1: into our economy. You know, what's concerning you the most

931
00:49:44,600 --> 00:49:45,240
Speaker 1: at the moment.

932
00:49:46,160 --> 00:49:48,040
Speaker 2: Yeah, and you know, I have this what I call

933
00:49:48,200 --> 00:49:50,080
Speaker 2: risk matrix. I have to show it to you one

934
00:49:50,080 --> 00:49:54,800
Speaker 2: of these days. The horizontal axis is the loss economic

935
00:49:54,880 --> 00:49:56,840
Speaker 2: loss if the risk were to occur. The y axis

936
00:49:56,920 --> 00:49:59,759
Speaker 2: the probability risk. Because there's so many it's hard to

937
00:49:59,840 --> 00:50:03,480
Speaker 2: keep my mind around them, right, But I would say,

938
00:50:03,560 --> 00:50:08,799
Speaker 2: you know, the thing that, aside from when I ask

939
00:50:08,800 --> 00:50:11,759
Speaker 2: people that question, uh, you know, what's bothering you, what's

940
00:50:11,760 --> 00:50:17,440
Speaker 2: worrying you? When I hear the word geopolitical risk, I think, okay, sure,

941
00:50:17,840 --> 00:50:20,920
Speaker 2: but that's a pretty amorphous kind of you know, risk,

942
00:50:21,000 --> 00:50:23,480
Speaker 2: and that's always there and I think that, But I

943
00:50:23,480 --> 00:50:25,200
Speaker 2: think it's fair to say at this point in time,

944
00:50:25,239 --> 00:50:28,640
Speaker 2: that feels elevated, you know, given what's going on the

945
00:50:28,960 --> 00:50:31,680
Speaker 2: what's going on in Venezuela, which you can see, what's

946
00:50:31,719 --> 00:50:35,360
Speaker 2: going on in Iran, you know, China and Taiwan, Russia

947
00:50:35,360 --> 00:50:39,319
Speaker 2: and Ukraine. Feels like that's pretty elevated risk. But I

948
00:50:39,360 --> 00:50:43,279
Speaker 2: think more concretely, I worry about going back to the

949
00:50:43,320 --> 00:50:47,120
Speaker 2: stock market, right, I mean, it is being driven by

950
00:50:47,560 --> 00:50:54,120
Speaker 2: euphoria over this technology AI and uh it's you know,

951
00:50:54,400 --> 00:50:57,960
Speaker 2: very unproven that this is actually going to cut these

952
00:50:58,000 --> 00:51:01,600
Speaker 2: expectations are going to be fulfilled. I mean, investors expect

953
00:51:01,640 --> 00:51:04,600
Speaker 2: a lot from AI. They expect big adoption and implementation

954
00:51:04,719 --> 00:51:10,319
Speaker 2: by business, big productivity gains and big profit gains and profitability.

955
00:51:10,360 --> 00:51:13,439
Speaker 2: And I'm not so sure if the stock market were

956
00:51:13,480 --> 00:51:16,920
Speaker 2: to correct, and I think that's a real significant possibility

957
00:51:16,920 --> 00:51:19,800
Speaker 2: that knocks a big leg out of growth and potential

958
00:51:19,840 --> 00:51:21,760
Speaker 2: for much weaker economy or research.

959
00:51:22,000 --> 00:51:26,000
Speaker 1: I was reading it somebody's sort of right up with

960
00:51:26,080 --> 00:51:30,240
Speaker 1: the history of the railroads, yeah, and comparing the first

961
00:51:30,440 --> 00:51:33,200
Speaker 1: run up of a railroad investment that actually all went

962
00:51:33,239 --> 00:51:38,160
Speaker 1: belly up. Yeah, and yeah, so yes, everybody was right

963
00:51:38,239 --> 00:51:41,319
Speaker 1: the railroads were going to transform the economy, right, and

964
00:51:41,360 --> 00:51:44,880
Speaker 1: they did transform the economy about ten years after a

965
00:51:44,880 --> 00:51:47,759
Speaker 1: bunch of people lost early bets on that transformation.

966
00:51:47,920 --> 00:51:51,800
Speaker 2: Yeah, exactly. That's the I think that's the typical history

967
00:51:51,800 --> 00:51:55,920
Speaker 2: of big technological changes, and so that you know that

968
00:51:55,960 --> 00:51:57,880
Speaker 2: may not happen to the same degree this go around,

969
00:51:57,880 --> 00:51:59,960
Speaker 2: but you know, investors are expecting a lot, I mean

970
00:52:00,120 --> 00:52:02,160
Speaker 2: an awful lot, and they may not get it.

971
00:52:02,239 --> 00:52:04,680
Speaker 1: Is there anything out there that's like the housing crisis

972
00:52:04,680 --> 00:52:09,319
Speaker 1: of nine that would create comptasion? Right? Is crypto that

973
00:52:09,360 --> 00:52:12,000
Speaker 1: way or is AI that way or are both of

974
00:52:12,000 --> 00:52:15,200
Speaker 1: them small enough that it would be more like frankly,

975
00:52:15,239 --> 00:52:18,240
Speaker 1: the Internet receptor, the Internet bubble recession of two thousand.

976
00:52:18,560 --> 00:52:22,000
Speaker 2: No, you know what, Chuck. You know, if there's a problem,

977
00:52:22,320 --> 00:52:25,120
Speaker 2: it probably will be in the plumbting of the financial system,

978
00:52:25,200 --> 00:52:27,880
Speaker 2: the funding markets. I mean, if you look at how

979
00:52:28,560 --> 00:52:31,759
Speaker 2: the government and businesses are funding themselves, you know, they

980
00:52:31,880 --> 00:52:35,000
Speaker 2: borrow lots of money, and you look at that system there,

981
00:52:35,360 --> 00:52:38,560
Speaker 2: it just feels very fragile to me, and there's a

982
00:52:38,560 --> 00:52:40,640
Speaker 2: lot of volatility in that market.

983
00:52:41,160 --> 00:52:43,279
Speaker 1: What would be the call that's that's sort of like

984
00:52:43,440 --> 00:52:45,799
Speaker 1: who's who's making the margin call that all of a

985
00:52:45,840 --> 00:52:47,440
Speaker 1: sudden crumbles.

986
00:52:46,920 --> 00:52:51,839
Speaker 2: That well, I mean, could it could simply be one

987
00:52:51,880 --> 00:52:58,040
Speaker 2: of these AI companies does default on some obligation, some dud,

988
00:52:58,239 --> 00:53:02,080
Speaker 2: and that just changes the of psychology that you know

989
00:53:02,280 --> 00:53:04,400
Speaker 2: that we're often running here that you know, there's more

990
00:53:04,480 --> 00:53:07,520
Speaker 2: risk here than we think, and that's that's that's that

991
00:53:07,640 --> 00:53:12,120
Speaker 2: kind of contagion that could cause creditors to stop lending

992
00:53:12,280 --> 00:53:15,319
Speaker 2: and the markets to start freezing. Or it could be

993
00:53:16,320 --> 00:53:22,440
Speaker 2: you know, uh, the Treasury decides to because the deficit

994
00:53:22,520 --> 00:53:24,600
Speaker 2: is now very large and it's going to balloon here,

995
00:53:24,680 --> 00:53:26,520
Speaker 2: you know, pretty significantly. They got to issue a lot

996
00:53:26,560 --> 00:53:29,239
Speaker 2: of debt. Maybe they move from issuing a lot of

997
00:53:29,280 --> 00:53:31,480
Speaker 2: longer term debt to shorter term debt because they want

998
00:53:31,520 --> 00:53:34,759
Speaker 2: to keep long term rates down and there's so much

999
00:53:34,840 --> 00:53:37,680
Speaker 2: debt that, you know, people say, oh my gosh, we

1000
00:53:37,719 --> 00:53:43,120
Speaker 2: can't digest this. And the hedge fund community, which is

1001
00:53:43,120 --> 00:53:45,200
Speaker 2: a big player in these markets, to side this isn't

1002
00:53:45,880 --> 00:53:47,880
Speaker 2: an investment we want to make. They all run for

1003
00:53:47,920 --> 00:53:49,880
Speaker 2: the door at the same time, and we got a

1004
00:53:49,880 --> 00:53:53,920
Speaker 2: funding crisis. So I think it's hard to answer that

1005
00:53:54,000 --> 00:53:57,279
Speaker 2: question because these things are off the radar screen, right.

1006
00:53:57,640 --> 00:54:00,160
Speaker 2: But the thing that makes me nervous is that part

1007
00:54:00,200 --> 00:54:04,359
Speaker 2: of the financial sism, it's the literal plumbing, uh, where

1008
00:54:04,840 --> 00:54:07,920
Speaker 2: businesses and government get their short term cash, get their

1009
00:54:07,920 --> 00:54:10,320
Speaker 2: funding to you know, keep keep the doors open and

1010
00:54:10,400 --> 00:54:14,200
Speaker 2: keep things moving forward. It just feels tenuous to me,

1011
00:54:14,360 --> 00:54:15,120
Speaker 2: you know at this point.

1012
00:54:15,760 --> 00:54:18,359
Speaker 1: Well, it's my understanding. Hemingway is the one who wrote

1013
00:54:18,400 --> 00:54:21,720
Speaker 1: the line that bankruptcy first it happened slowly, then quickly,

1014
00:54:22,080 --> 00:54:24,760
Speaker 1: and like it feels like everything in the financial sector

1015
00:54:24,800 --> 00:54:28,160
Speaker 1: is that way. You're like, something's happening slowly and then

1016
00:54:28,160 --> 00:54:30,600
Speaker 1: all of a sudden, the hockey stick moment comes. Yeah,

1017
00:54:32,200 --> 00:54:32,879
Speaker 1: Katy bar the.

1018
00:54:32,800 --> 00:54:37,000
Speaker 2: Door right exactly, exactly, very much. So that's a great remark.

1019
00:54:38,560 --> 00:54:42,200
Speaker 1: Great to get an update. I don't feel as pessimistic

1020
00:54:42,239 --> 00:54:44,040
Speaker 1: as I did after the last time we talked, but

1021
00:54:44,080 --> 00:54:47,480
Speaker 1: I I definitely feel fairly uneasy.

1022
00:54:48,000 --> 00:54:48,160
Speaker 2: Yeah.

1023
00:54:48,440 --> 00:54:52,440
Speaker 1: Well that's an I wanted you, Todd, go from being

1024
00:54:52,800 --> 00:54:55,719
Speaker 1: from being totally pessimistic to just fairly uneasy. Yeah.

1025
00:54:55,760 --> 00:54:59,120
Speaker 2: Yeah, yeah, that's what that's what I was going for. Yeah, exactly,

1026
00:54:59,120 --> 00:55:01,120
Speaker 2: I got you where I want. Yeah, yeah, all right,

1027
00:55:01,320 --> 00:55:02,719
Speaker 2: did you see I have a glass of wine, so

1028
00:55:02,719 --> 00:55:04,279
Speaker 2: I'm a little bit more mellow than you are.

1029
00:55:04,400 --> 00:55:08,400
Speaker 1: So well, there you go. Uh GDP growth over under

1030
00:55:08,680 --> 00:55:11,640
Speaker 1: three percent for calendar year twenty twenty six.

1031
00:55:12,000 --> 00:55:15,040
Speaker 2: Oh, definitely under two and a half percent. Yeah, definitely

1032
00:55:15,120 --> 00:55:18,840
Speaker 2: under I think that'd be my guess, why do you

1033
00:55:18,920 --> 00:55:19,399
Speaker 2: think three?

1034
00:55:19,840 --> 00:55:21,919
Speaker 1: Just because that's a Donald Trump I feel like three

1035
00:55:21,960 --> 00:55:26,080
Speaker 1: percent is the road. Anything below is sort of static, No,

1036
00:55:26,320 --> 00:55:26,640
Speaker 1: got it?

1037
00:55:26,719 --> 00:55:28,439
Speaker 2: Yeah, no, that's fair. Two and a half percent would

1038
00:55:28,440 --> 00:55:30,840
Speaker 2: be consistent with the economy's potential stable unemployment.

1039
00:55:30,960 --> 00:55:34,319
Speaker 1: Yeah right, there's sort of it's sort of like right,

1040
00:55:34,400 --> 00:55:38,760
Speaker 1: the uh A cost of living adjustment versus a race. Yeah,

1041
00:55:38,880 --> 00:55:40,400
Speaker 1: but right, I feel like two and a half percent

1042
00:55:40,480 --> 00:55:43,200
Speaker 1: is cola. Three percent is growth as a race.

1043
00:55:43,600 --> 00:55:47,759
Speaker 2: That's good, But I caution using GDP, I'm not sure. Yeah,

1044
00:55:47,840 --> 00:55:50,440
Speaker 2: I mean GBGP is this weird thing. We talked a

1045
00:55:50,440 --> 00:55:52,920
Speaker 2: little bit about that. I'd focus on those jobs. I

1046
00:55:52,960 --> 00:55:56,680
Speaker 2: mean in unemployment. So the question is hired a five

1047
00:55:56,680 --> 00:55:59,520
Speaker 2: percent or closer to four percent? You know my baseline.

1048
00:55:59,560 --> 00:56:01,799
Speaker 1: Let me ask this raw jobs. Are we going to

1049
00:56:01,800 --> 00:56:03,280
Speaker 1: be net positive or net negative?

1050
00:56:04,239 --> 00:56:07,600
Speaker 2: You know, I want to say it's we're going to

1051
00:56:07,640 --> 00:56:10,080
Speaker 2: be tough to be in the positive after all the

1052
00:56:10,120 --> 00:56:12,319
Speaker 2: revisions are in. It's going to be tough to be,

1053
00:56:12,520 --> 00:56:13,840
Speaker 2: you know, in positive territory.

1054
00:56:14,120 --> 00:56:16,480
Speaker 1: Hey, very before I let you go, do you care

1055
00:56:16,520 --> 00:56:18,920
Speaker 1: about the prediction markets? Do you monitor them?

1056
00:56:19,480 --> 00:56:22,040
Speaker 2: I watched them, Yeah, I do. I mean for things

1057
00:56:22,080 --> 00:56:25,920
Speaker 2: like who they think the next pet chair is going

1058
00:56:25,960 --> 00:56:28,879
Speaker 2: to be. I think there's some value there. Yeah.

1059
00:56:28,880 --> 00:56:31,840
Speaker 1: It's interesting that Warsh's numbers get stronger, doesn't it.

1060
00:56:32,120 --> 00:56:34,440
Speaker 2: Yeah, it is right. I think he's I think the

1061
00:56:34,560 --> 00:56:36,720
Speaker 2: last I looked, Asset was forty four and he was forty.

1062
00:56:37,560 --> 00:56:39,400
Speaker 1: Yeah, I mean all of the if you were just

1063
00:56:39,440 --> 00:56:41,160
Speaker 1: to judge by Washington commentary.

1064
00:56:41,160 --> 00:56:42,640
Speaker 2: It's hass it, it's acid.

1065
00:56:42,880 --> 00:56:45,600
Speaker 1: Yeah, but I noticed that this is one of the

1066
00:56:45,640 --> 00:56:48,799
Speaker 1: few places where there's been a counter and you're right,

1067
00:56:48,880 --> 00:56:50,759
Speaker 1: that's I'm curious to see if that does.

1068
00:56:51,000 --> 00:56:55,160
Speaker 2: Someone made a fortune betting on Venezuela getting in, you know, Yeah,

1069
00:56:55,320 --> 00:56:55,680
Speaker 2: i'd like to.

1070
00:56:55,760 --> 00:56:59,280
Speaker 1: Yeah, this is why I'm I find them interesting based

1071
00:56:59,280 --> 00:57:03,040
Speaker 1: on who's leaking information. I'm not sure whether they're trustworthy.

1072
00:57:03,360 --> 00:57:05,560
Speaker 2: Good point. That's good point. Good point.

1073
00:57:05,600 --> 00:57:08,000
Speaker 1: Anyway, Hey, well, thank you, I'll see you so

1074
00:57:09,960 --> 00:57:10,000
Speaker 2: H