1
00:00:05,799 --> 00:00:09,160
Welcome to another episode of the Chicks
on the Right podcast where we feature our

2
00:00:09,279 --> 00:00:13,480
friend and sponsor of the show,
Zach Abraham, who is the chief investment

3
00:00:13,519 --> 00:00:18,199
officer at Bulwark Capital Management and he
is who we go to when we have

4
00:00:18,320 --> 00:00:23,679
questions about finances, the economy,
markets, interest rates, all the things.

5
00:00:23,879 --> 00:00:27,480
Thank you Zach for being with us, and we have promised our audience

6
00:00:27,640 --> 00:00:30,440
that we would get an answer to
a question that has been nagging us for

7
00:00:30,440 --> 00:00:34,679
a couple of weeks, and that
is something that Trump posted on his truth

8
00:00:34,759 --> 00:00:39,520
social I don't know week two weeks
ago where he said or he was interviewed

9
00:00:39,560 --> 00:00:45,840
and said that the reason that the
stock market is doing well is because of

10
00:00:45,880 --> 00:00:50,439
his lead in the polls. Is
that a thing? Go? And also

11
00:00:50,479 --> 00:00:54,280
well wait, and also I think
that it's more than just Trump. Do

12
00:00:54,560 --> 00:01:03,280
presidents in general do they dictate how
the markets are so? Generally speaking and

13
00:01:03,320 --> 00:01:07,280
all kind of hit that last part. First, generally speaking, I don't

14
00:01:07,319 --> 00:01:15,239
think that there is a role in
the global economy that is more overhyped than

15
00:01:15,319 --> 00:01:19,439
the president of the United States.
I think that they can have an impact

16
00:01:19,480 --> 00:01:25,799
as it relates to tax policy.
So for instance, when Trump got elected,

17
00:01:26,239 --> 00:01:32,680
the market sold off right overnight,
which seemed ridiculous to us because I

18
00:01:32,719 --> 00:01:34,719
was, like, the guy's promising
tax cuts, like profit margins are going

19
00:01:34,799 --> 00:01:38,239
to go up, you know,
here we go, right, so they

20
00:01:38,239 --> 00:01:42,239
can have they can have impacts on
the marginal side of it. But I

21
00:01:42,280 --> 00:01:48,400
mean literally, and I'm just stating
this is not a political statement. It's

22
00:01:48,439 --> 00:01:53,480
a fact. Trump taking credit for
the stock market doing well because he's leading

23
00:01:53,480 --> 00:02:00,799
in the polls is the equivalent of
Bidenomics. It's complete nonsense. Okay.

24
00:02:01,879 --> 00:02:07,079
The stock market's doing well because the
Federal Reserve, despite the fact they say

25
00:02:07,120 --> 00:02:12,199
they're cutting interest rates, keeps cannot
help themselves from hemorrhaging money into the economy.

26
00:02:12,520 --> 00:02:15,879
The federal government's running a two point
one trillion dollar deficit, and consumers

27
00:02:15,879 --> 00:02:20,520
are still high from the greatest monetary
handout of all time, a full stop.

28
00:02:20,919 --> 00:02:25,080
That's what. So if he wins, like say he wins in November,

29
00:02:27,680 --> 00:02:30,599
do you think that that I mean, obviously it's gonna have some effect.

30
00:02:30,599 --> 00:02:32,479
Don't you think it don't have some
effect on the market. Yeah,

31
00:02:32,560 --> 00:02:39,319
I think it will initially. Meaning
one thing you typically see is usually you

32
00:02:39,400 --> 00:02:45,879
see markets stabilize and become more serene
after a president is elected, you don't

33
00:02:45,879 --> 00:02:49,960
typically see a plunge just because market's
like certainty. So just even if they're

34
00:02:50,000 --> 00:02:52,960
not nuts about the president, the
fact that the issue is over resolved and

35
00:02:53,240 --> 00:02:57,159
it's behind us is kind of a
pressure alleviator for markets, if you will.

36
00:02:57,560 --> 00:03:00,080
But I think it's really important that
we talk about, you know,

37
00:03:00,199 --> 00:03:02,680
the difference between the economy and the
stock market, because I don't think the

38
00:03:02,680 --> 00:03:08,080
two have ever been more disconnected.
So I think I think sort of put

39
00:03:08,120 --> 00:03:13,159
it. I think the president,
you know, the president can have an

40
00:03:13,199 --> 00:03:15,680
impact on markets the same way the
Federal Reserve does, Meaning they can go

41
00:03:15,719 --> 00:03:20,840
out and speak soothingly, but what
do they really impact as far as the

42
00:03:20,879 --> 00:03:24,439
economy goes. There are moments in
time where FDR I think had a huge

43
00:03:24,439 --> 00:03:29,120
impact on the economy. I think
Reagan at his period of time had a

44
00:03:29,159 --> 00:03:31,759
big impact on the economy. So
I think presidents, if they meet the

45
00:03:31,840 --> 00:03:37,039
right set of circumstances with the right
policies, I think they can have a

46
00:03:37,039 --> 00:03:39,439
big impact. Those just don't come
along very often, right, Like a

47
00:03:39,439 --> 00:03:45,599
lot of times we give the man
credit, but probably any man in his

48
00:03:45,680 --> 00:03:47,319
position would have done the same,
you know, or similar to it.

49
00:03:47,599 --> 00:03:53,599
So anyway my whole thing say just
it's you know, and this to me

50
00:03:53,759 --> 00:03:55,800
is like the tough part about Trump, right, Like, you know,

51
00:03:55,879 --> 00:03:59,159
you hear a couple of things,
You're like, hey, you know what

52
00:03:59,240 --> 00:04:00,759
I can get with that, and
then he says something like that, You're

53
00:04:00,800 --> 00:04:06,000
just like, dude, calm on, come on, you can't take credit

54
00:04:06,039 --> 00:04:09,639
for all of that. Yeah,
I mean, everything in the world is

55
00:04:09,680 --> 00:04:13,520
not a referendum on you. Okay, it's just not yeah, okay.

56
00:04:13,560 --> 00:04:16,560
But in his defense, I mean, and I don't know anything about anything,

57
00:04:16,600 --> 00:04:19,160
as you know, when it comes
to the markets or finances. But

58
00:04:19,879 --> 00:04:24,920
isn't it true? I mean,
I do think he's wrong about I think

59
00:04:24,920 --> 00:04:28,600
it's ridiculous for him to say that
the market is doing what it's doing because

60
00:04:28,600 --> 00:04:32,120
of his lead in the polls,
Like that's insane. But isn't it true

61
00:04:32,279 --> 00:04:38,959
that if he wins the presidency that
the market could react to that because he

62
00:04:39,160 --> 00:04:43,360
is so historically business friendly, and
that companies would be like, Yay,

63
00:04:43,720 --> 00:04:46,600
he's going to decrease regulations. Everything
is going to be doing really well for

64
00:04:46,680 --> 00:04:49,000
us. I mean, isn't there
some isn't there some truth to that?

65
00:04:49,279 --> 00:04:53,680
Yeah? There is some truth.
And for instance, I think that quite

66
00:04:53,720 --> 00:04:57,920
honestly, and again I can't read
the tea leaves, but quite honestly,

67
00:04:58,839 --> 00:05:02,680
I think that anybody, assuming that
they're a functional adult, I think is

68
00:05:02,759 --> 00:05:05,639
going to have somewhat I mean,
we'll see what the conditions of the market

69
00:05:05,639 --> 00:05:09,759
and the economy are a aut election
time. But but honestly, I think

70
00:05:09,800 --> 00:05:14,199
anybody that is a full functioning adult
that gets elected is going to have a

71
00:05:14,240 --> 00:05:19,519
positive impact. Is because markets know
what's or the lack of what's running the

72
00:05:19,519 --> 00:05:24,240
show right now, right like,
you know, market participants know this is

73
00:05:24,240 --> 00:05:26,920
a joke, that this is a
he's a you know, this is a

74
00:05:26,920 --> 00:05:30,120
paper tiger that you know, he's
got people pulling the strings. Markets know

75
00:05:30,199 --> 00:05:34,639
that. But but it again,
I think that I think looking at the

76
00:05:35,000 --> 00:05:40,439
so the other part of it is, I don't think markets do the same

77
00:05:40,519 --> 00:05:43,480
thing. So to answer your question, I think prior to eighth nine,

78
00:05:43,639 --> 00:05:46,639
I think much of what you're talking
about makes a lot more sense. Meaning

79
00:05:46,959 --> 00:05:49,639
I think markets would care about presidential
policy all that kind of stuff. But

80
00:05:49,720 --> 00:05:53,839
at the end of the day,
that is not why we're sitting at twenty

81
00:05:53,879 --> 00:05:56,519
six times earnings on the S and
P. Five hundred. That is not

82
00:05:56,560 --> 00:06:00,720
why markets have done what they've done. They have done what they've done because

83
00:06:00,839 --> 00:06:04,560
of a orgy of government spending.
Okay, like period, and if that

84
00:06:05,040 --> 00:06:10,000
level of spending keeps up, it's
going to be really hard for markets to

85
00:06:10,040 --> 00:06:13,120
fall meaningfully. Could they pull back
twenty to thirty Yeah, I think if

86
00:06:13,120 --> 00:06:15,560
you pull back twenty to thirty percent
from here, you'd actually have a pretty

87
00:06:15,600 --> 00:06:19,439
decently priced market. It would make
some sense. It doesn't make any sense

88
00:06:19,519 --> 00:06:24,720
right here. So I think that, yes, the president can have an

89
00:06:24,759 --> 00:06:29,240
impact. It's not as big as
people think, but you know, and

90
00:06:29,279 --> 00:06:33,040
I think that his impact is less
so like he may come up with right

91
00:06:33,240 --> 00:06:36,680
the market will interpret him as being
more business or more stock market friendly if

92
00:06:36,680 --> 00:06:41,759
he gets elect they will. Okay, The question is is what's happening on

93
00:06:41,800 --> 00:06:45,680
the federal spending side of it,
Because that money being pumped into the system.

94
00:06:45,720 --> 00:06:47,279
At the end of the day,
that is rubber meeting the road,

95
00:06:47,600 --> 00:06:50,920
right, So regardless of whether he
does the right thing or the wrong thing,

96
00:06:51,000 --> 00:06:54,759
or says the right thing and the
wrong thing, if they keep pouring

97
00:06:54,839 --> 00:06:57,839
money into the system like this,
it's got to go somewhere, and it's

98
00:06:57,879 --> 00:07:01,639
going to keep elevating. Asset prices
and the day the day is right wingers

99
00:07:01,639 --> 00:07:06,720
too. They're spending just like Democrats
are spending people on our side of the

100
00:07:06,720 --> 00:07:10,600
aisle. Yeah, yeah, no, we've joked about it on the show

101
00:07:10,639 --> 00:07:13,600
before with you guys. Right,
It's one of the things that drives me

102
00:07:13,720 --> 00:07:20,680
nuts about Republicans in general. And
then hardcore hard line Republican only like and

103
00:07:20,920 --> 00:07:25,360
why stand for fiscal discipline? And
I'm like, the only time the Republican

104
00:07:25,399 --> 00:07:29,160
party ever cares about fiscal discipline is
when the Democrats in the White House.

105
00:07:29,319 --> 00:07:31,360
That's the only time you ever even
hear it brought up, right, and

106
00:07:31,399 --> 00:07:36,399
everybody goes, you know, O'biden's
going to double the debt and Obama double

107
00:07:36,439 --> 00:07:39,680
the debt, And I'm like,
Trump was on target to double the debt.

108
00:07:39,839 --> 00:07:42,720
Bush doubled the debt in eight years. Obama doubled the debt in eight

109
00:07:42,759 --> 00:07:46,399
years. Trump was on his way
to doubling the debt in eight years.

110
00:07:46,439 --> 00:07:48,720
Like, you know, the one
thing that the one thing that doesn't change

111
00:07:49,040 --> 00:07:53,920
is the elected officials in d C
continue to get wealthier and wealthier and wealthier,

112
00:07:54,079 --> 00:07:56,519
and the rest of us keep paying
a bigger and bigger bill. M

113
00:07:56,720 --> 00:08:01,600
hm. It's true. The other
question I think that we have is about

114
00:08:01,639 --> 00:08:05,360
the fact that inflation, I guess
unexpectedly according to some headlines I've seen,

115
00:08:05,720 --> 00:08:11,240
rose a little bit in December of
last year. And so now the expected

116
00:08:13,160 --> 00:08:18,160
rate decrease that was supposed to happen
in March that everybody's been anticipating, and

117
00:08:18,199 --> 00:08:22,519
then the decreases beyond that, Now
there's some doubt about whether or not the

118
00:08:22,560 --> 00:08:30,000
Fed is going to reduce interest rates
in March. What say you, It's

119
00:08:30,040 --> 00:08:33,759
a mess, and it's a mess
that the FED has made. So remember

120
00:08:33,879 --> 00:08:39,679
us telling you We had this conversation
it probably about two or three months ago

121
00:08:39,679 --> 00:08:41,720
where we're like, hey, buckle
up, it's going to get even more

122
00:08:41,720 --> 00:08:46,559
weird, right, and you're going
to see we're expecting a data bounce on

123
00:08:46,639 --> 00:08:50,159
economic activity. We just got retail
spending in hotter than expected, we had

124
00:08:50,159 --> 00:08:56,519
a solid jobs report relatively speaking,
and then you see inflation ticking up.

125
00:08:56,039 --> 00:08:58,919
It was just it was kind of
just like what we saw on the team

126
00:09:00,039 --> 00:09:03,600
leaves, you know, And so
that's all playing out. And the reason

127
00:09:03,679 --> 00:09:05,679
we believe it's playing out that way
is because the FED continues to be the

128
00:09:05,679 --> 00:09:13,240
biggest idiot they meaning they they will
not. They're so academic and they're so

129
00:09:13,519 --> 00:09:18,879
tied to their books and their models, they don't realize every time it's not

130
00:09:18,039 --> 00:09:22,480
just rates. Right, For fifteen
years, you had zero percent interest rates

131
00:09:22,519 --> 00:09:28,639
and quantitative easing run okay. So
what that was doing effectively was it was

132
00:09:28,720 --> 00:09:33,600
building in this input of cash into
the market that the market in the economy

133
00:09:33,639 --> 00:09:39,120
became dependent on. Right. And
so what you did every single time of

134
00:09:39,159 --> 00:09:43,120
financial stress was you just flooded the
system with more and more liquidity, just

135
00:09:43,200 --> 00:09:46,799
like, hey, this patient's bleeding
from six different spots. As long as

136
00:09:46,840 --> 00:09:48,240
we're pumping in more blood than's going
out, we're going to be okay,

137
00:09:48,320 --> 00:09:52,960
Right, And so that's the way
approach everything. Well, so then inflation

138
00:09:52,039 --> 00:09:56,720
becomes an issue and they step on
rates, right, But they don't.

139
00:09:56,759 --> 00:10:01,120
They actually, while they're stepping on
rates, they're push up liquidity on the

140
00:10:01,120 --> 00:10:05,120
other end, because they don't think
liquidity and inflation are tied to each other,

141
00:10:05,279 --> 00:10:09,519
which is ridiculous, right, It's
ridiculous. The more liquid and market

142
00:10:09,519 --> 00:10:13,720
you have, the more accurate pricing, the less market you have, the

143
00:10:13,720 --> 00:10:16,240
more gaps you have, and the
more choppy it is. Meaning a more

144
00:10:16,279 --> 00:10:22,039
liquid market always generates higher prices in
the long run, right, And so

145
00:10:22,679 --> 00:10:26,600
we were saying, look, just
the easing of financial conditions and the rally

146
00:10:26,639 --> 00:10:30,480
in the stock market is going to
spraw on more retail spending. And every

147
00:10:30,559 --> 00:10:33,840
single day, we believe that correlation
is going to get bigger and bigger and

148
00:10:33,840 --> 00:10:37,799
bigger, because why is that every
single day you've got more and more people.

149
00:10:37,840 --> 00:10:41,200
I believe it's about to the tune
of about twelve thousand baby boomers a

150
00:10:41,279 --> 00:10:45,559
day are retiring. And then how
do they live? Where do they get

151
00:10:45,600 --> 00:10:48,879
their income? Right? They live
off the productivity of their assets. Well,

152
00:10:48,919 --> 00:10:52,080
if your asset base, your income
jumps twenty percent a year, are

153
00:10:52,120 --> 00:10:56,360
you more or less likely to go
spend more money? Well, you're more

154
00:10:56,440 --> 00:11:00,720
likely of course. Right. What
they've done is they want to have it

155
00:11:00,799 --> 00:11:03,480
both ways. They want to cool
the economy while they're keeping they want to

156
00:11:03,679 --> 00:11:07,879
while they're keeping asset prices elevated.
We don't think you can do it.

157
00:11:07,120 --> 00:11:11,039
We think that the two or two
intert lined, meaning the market that the

158
00:11:11,360 --> 00:11:16,759
economy has become financialized, meaning the
quickest way to increase consumer spending is push

159
00:11:16,840 --> 00:11:20,840
up stock prices. Quickest way to
come into drop drop stock prices and it

160
00:11:20,919 --> 00:11:24,639
really starts making sense. I think
there's a behavioral aspect involved there, there's

161
00:11:24,679 --> 00:11:28,440
a psychological aspect involved in that,
but there's also a real aspect, which

162
00:11:28,519 --> 00:11:33,200
is the biggest generation also happens to
have the vast majority of the nation's wealth.

163
00:11:33,600 --> 00:11:37,480
That money is all in mind the
stock market. So as the market

164
00:11:37,519 --> 00:11:41,799
goes up, that's going to be
an inflationary pressure. And we were saying

165
00:11:41,799 --> 00:11:45,120
this two years ago, telling the
FED, Look, you guys are going

166
00:11:45,159 --> 00:11:48,000
to screw this up. You're going
to play heavy handed with rates, but

167
00:11:48,000 --> 00:11:50,840
you're not going to address the liquidity
issue. And as soon as liquidity starts

168
00:11:50,840 --> 00:11:54,600
pumping again, you're going to jack
rates up, and inflation is going to

169
00:11:54,639 --> 00:11:58,799
reaccelerate. Here we are, so
I think that I think that they will

170
00:11:58,799 --> 00:12:03,759
be forced to cut at some point
this year. I don't think the market

171
00:12:03,799 --> 00:12:05,960
right now is pricing in seven cuts, which is one hundred and seventy five

172
00:12:07,000 --> 00:12:11,480
basis points. That's insane. The
only way that happens if this economy runs

173
00:12:11,480 --> 00:12:13,600
into a brick wall. So I
think the FED isn't going to cut in

174
00:12:13,600 --> 00:12:18,480
the first quarter because of this hot
data. And I think that, ironically,

175
00:12:18,559 --> 00:12:22,399
because they're getting that hotter data,
it's going to keep them from cutting.

176
00:12:22,559 --> 00:12:24,840
And yet every single day the things
that are blowing up because of higher

177
00:12:24,840 --> 00:12:28,519
interest rates, they're getting more acute. Right, every single day that goes

178
00:12:28,559 --> 00:12:33,799
by at these rates are higher,
those issues become more acute. So this

179
00:12:33,879 --> 00:12:37,000
is the exact problem that we were
thinking the FED was going to back themselves

180
00:12:37,000 --> 00:12:41,279
into. Here we are and just
buckle up. This is going to be

181
00:12:41,279 --> 00:12:45,559
a very wild year, and I
think you're going to see some really insane

182
00:12:45,639 --> 00:12:48,039
market books as long as they get
you just wanted to be cut by the

183
00:12:48,120 --> 00:12:52,799
end of the year, right,
Mary, Right, she's buying us?

184
00:12:52,000 --> 00:12:56,159
Yes, please, she's getting a
house. Yeah, I think the odds

185
00:12:56,200 --> 00:12:58,519
of that are pretty good. But
you know, you just saw it again.

186
00:12:58,600 --> 00:13:01,639
They let the back end of rates
pop up, and mortgage applications just

187
00:13:01,720 --> 00:13:03,519
jumped to the highest level they've been
at in the last eight months. And

188
00:13:03,600 --> 00:13:07,559
we do saying this like the FED
refuses to get tough, and they're not

189
00:13:07,559 --> 00:13:09,120
going to be able to fix this
unless they do. So you have a

190
00:13:09,159 --> 00:13:13,200
webinar coming up, tell people how
they can sign up for that, what

191
00:13:13,240 --> 00:13:16,320
you're going to cover and yeah,
yeah, so that heads up on that.

192
00:13:16,519 --> 00:13:20,879
Yeah, So it's not an infomercial
in a sales pitch. It's about

193
00:13:20,879 --> 00:13:24,720
a forty five minutes free charge.
And we just get in there and walk

194
00:13:24,720 --> 00:13:28,399
you through our process. Right,
how do we increase subside while drastically reducing

195
00:13:28,399 --> 00:13:31,480
your risk? How did we get
through the COVID crash with you know,

196
00:13:31,519 --> 00:13:35,200
five to six percent drops when the
market was down thirty six How are our

197
00:13:35,240 --> 00:13:39,759
clients down low single digits last year
when the market was down twenty plus.

198
00:13:39,840 --> 00:13:43,279
We just show you how we do
it and show you the results and say

199
00:13:43,320 --> 00:13:48,080
here you go and kicks about forty
five minutes, and that gives you kind

200
00:13:48,080 --> 00:13:50,919
of the whole layout of how we
do things. Get you an old landscape.

201
00:13:50,960 --> 00:13:52,120
And then if you want to talk
to us further about it, you

202
00:13:52,159 --> 00:13:56,120
can schedule a meeting with me or
one of our advisors. We can run

203
00:13:56,159 --> 00:13:58,720
you through it. If not,
hopefully, if nothing else, should leave

204
00:13:58,759 --> 00:14:01,840
more informed and more educated. Yeah, and we won't call you and bug

205
00:14:01,879 --> 00:14:03,960
you. Do you want to meet
with us? Great? If not,

206
00:14:03,279 --> 00:14:07,399
you don't wish you all lot?
And that's January twenty fifth, Yes,

207
00:14:07,559 --> 00:14:11,799
twenty fifth, at three point thirty
pm Pacific time, specific time, Yes,

208
00:14:13,200 --> 00:14:16,759
okay, And people, people can
sign up where go to Bordcapitalmanagement dot

209
00:14:16,759 --> 00:14:20,120
com. As soon as you get
there, a pop up list should come

210
00:14:20,159 --> 00:14:22,759
up on the website and you can
stick in your name and your email and

211
00:14:22,039 --> 00:14:26,120
we'll email you a link. The
day of the presentation, you can offer

212
00:14:26,159 --> 00:14:28,879
it on and join us on on
the web. Awesome, perfect, Thank

213
00:14:28,919 --> 00:14:31,720
you so much, sir. Thanks
all that. We appreciate it all right,

214
00:14:31,720 --> 00:14:37,279
Thank you, ladies. Having investment
advisory service is offered through Trek Financial

215
00:14:37,519 --> 00:14:41,440
LLC and SEC Registered Investment advisor.
Information presented is for educational purposes only.

216
00:14:41,480 --> 00:14:45,679
It should not be considered specific investment
advice. Does not take into consideration your

217
00:14:45,679 --> 00:14:48,720
specific situation, and does not intend
to make an offer or solicitation for the

218
00:14:48,759 --> 00:14:52,320
sale or purchase of any securities or
investment strategies. Investments involve risk and are

219
00:14:52,320 --> 00:14:54,519
not guaranteed, and past performance is
no guarantee of future results. For specific

220
00:14:54,519 --> 00:14:58,360
tax advice on strategy, consult with
a qualified tax professional before implementing any strategy

221
00:14:58,399 --> 00:14:58,919
discussed here In