Speaker 1: Been across my street, locally, statewide, nationally, before all the
Speaker 1: happenings across the globe.
Speaker 2: Fifty five krc the talk station.
Speaker 1: Heyoh, five fifty five KRCD Talk Station, A very happy Monday,
Speaker 1: see you. Oh he's made extra special because we get
Speaker 1: to hear from money. Monday's Brian James. Brian James, Smallworth
Speaker 1: financial financial planner. He is, so he's on top of
Speaker 1: money matters. Welcome back, Brian James. Hope you had a
Speaker 1: wonderful weekend.
Speaker 3: Thank you, and good morning and happy President's Day to you.
Speaker 3: I hope your family got you something nice.
Speaker 1: Yeah right, My wife and I don't even get it.
Speaker 1: Give it's all right. My wife and I his anniversary
Speaker 1: of our our engagement is Valentine's Day, and we don't
Speaker 1: even bother getting each other something for Valentine's Day. So
Speaker 1: less less likely that something's going to show up on
Speaker 1: President's Day. But stranger things have happened in this world.
Speaker 1: Do you get a president for President's Day?
Speaker 3: Uh?
Speaker 2: No, I don't.
Speaker 3: I was really hoping that you maybe maybe the Thomas
Speaker 3: family had something going so we can steal it and
Speaker 3: start it up here.
Speaker 2: But now we're kind of the same way.
Speaker 3: We really just celebrate whatever we bought together last Well,
Speaker 3: happy Valentine's.
Speaker 2: Day to us. There you go at that time.
Speaker 1: That works for anniversaries too, just as he puts up
Speaker 1: an inflatable William Henry Harrison in his front yard to
Speaker 1: celebrate President's Day.
Speaker 2: All right, that's a small fan club, that is, You.
Speaker 1: Got that right, And maybe everybody's now curious to where
Speaker 1: wants to know where Joe got that particular inflatable item.
Speaker 2: Anyway.
Speaker 1: Pivoting over to money matters and something a lot of
Speaker 1: people economists of different stripes are saying Trump tariffs could
Speaker 1: lead to some temporary inflation. I mean, if you just
Speaker 1: do the numbers on it, it kind of makes sense,
Speaker 1: doesn't If if you increase the price or the tariff
Speaker 1: on something by twenty five percent, and it's important into
Speaker 1: the United States, that cost is going to be passed
Speaker 1: along to the consumer on some level.
Speaker 2: Brian, Yeah, it absolutely is.
Speaker 3: A tariff is literally nothing more than making stuff cost more.
Speaker 2: That's the definition of it.
Speaker 3: Now, we hope, of course, that that will be absorbed
Speaker 3: by the manufacturers overseas, but again that's hope, and you
Speaker 3: know hope in one hand, and you know what and
Speaker 3: the other Literally what happens is is this just gets
Speaker 3: passed through to.
Speaker 2: The end consumer.
Speaker 3: That's literally the why we call ourselves consumers. We are
Speaker 3: not the ones who get to control anything. We have
Speaker 3: to consume whatever is put out at whatever price it
Speaker 3: is produced. So yeah, generally speaking, prices will be going up.
Speaker 3: We're already seeing it anyway, And you can look at
Speaker 3: what happened in twenty sixteen. Not only have we done
Speaker 3: this in the past over over the you know, centuries,
Speaker 3: we've done it very recently in twenty sixteen. So for example,
Speaker 3: the cost of a car went up about three thousand
Speaker 3: dollars back then when we increase the cost of steel
Speaker 3: and the other components that go in. So it's not
Speaker 3: going to be a shock at all. What would be
Speaker 3: really surprising to me, honestly, Brian Thomas, is if when
Speaker 3: we get the effect that we desire, will we pull
Speaker 3: those prices back down or will manufacturers continue to do
Speaker 3: what they've done in the past and hope that Americans
Speaker 3: don't notice that the tariffs have gone away, and we're
Speaker 3: just gonna leave the prices alone and just consider that
Speaker 3: as part of our profit market.
Speaker 1: Yeah, and it would really be insightful to know what
Speaker 1: the profit margin is. You know, like obviously you point
Speaker 1: to grocery stores and you think, oh my god, they're
Speaker 1: gouging me. But grocery store profit margins, like restaurant profit margins,
Speaker 1: are always in the single digits. You know. They they
Speaker 1: got a lot of waste, and they've got a lot
Speaker 1: of problems, they have a lot of theft, and price
Speaker 1: of groceries just go up, but you know, the margins
Speaker 1: really don't go up. But insofar as automobiles are concerned, hell,
Speaker 1: you can't find what I would call an inexpensive car anymore.
Speaker 1: It just seems to me that they're not manufactured. Even
Speaker 1: the cheapest car has gone through the roof a lot
Speaker 1: of reasons why they have all of these obligations, you know,
Speaker 1: for an install safety feature this, and you know, electronic
Speaker 1: that or whatever. But ultimately, what is the margin? And
Speaker 1: have the margins for these manufacturers changed over the years,
Speaker 1: And if so, let us see it in a chart.
Speaker 2: Yeah, that's right.
Speaker 3: And I think you can look at the stock market
Speaker 3: and figure out the ustory of the stock market and
Speaker 3: figure out when those margins widened, when when they narrowed.
Speaker 3: Because that's literally the definition of the stock market, the
Speaker 3: opinion of shareholders of any level as to how profitable
Speaker 3: these companies are, and more importantly, how profitable do we anticipate.
Speaker 2: They're going to be in the very near future.
Speaker 3: If I'm an investor and I feel like things are
Speaker 3: moving in the direction of increased profitability, then that's a
Speaker 3: good sign for the stock market. But if I'm going
Speaker 3: to if I'm concerned that those profit margins are going
Speaker 3: to be narrowed, that doesn't mean we're going over the cliff.
Speaker 2: It just means it's going to be harder.
Speaker 3: And the industries that will survive better are the ones
Speaker 3: with arguably with wider profit margins. But at the same time,
Speaker 3: those are the ones who may have to sacrifice the
Speaker 3: most of that profit margin versus the grocery stores, as
Speaker 3: you mentioned, which are already razorsin to begin with.
Speaker 1: Well, you know, and the other component. I just have
Speaker 1: to raise this because every time I read another article
Speaker 1: about how much any particular automobile manufacturer is losing per
Speaker 1: vehicle that they produce that are evs and how much
Speaker 1: money they're actually making on the say the internal combustion
Speaker 1: engine trucks, for example, I guess the salvation of Ford
Speaker 1: because Ford trucks move like crazy and their evs and
Speaker 1: lose millions and millions of dollars annually, so the price
Speaker 1: of the truck goes up to cover the losses for
Speaker 1: the evs. Now, Trump may end up saving the autobile
Speaker 1: industry by get rid of these ridiculous cafe standards and
Speaker 1: eliminating this obligation to become carbon neutral, giving people a
Speaker 1: choice and maybe ultimately bringing down the costs ices if
Speaker 1: they don't have to manufacture evs.
Speaker 2: Yeah, and I think that that's part of the political argument.
Speaker 2: You've got.
Speaker 3: Those kinds of things should be put in place. And
Speaker 3: remember that the other weird thing about this that he
Speaker 3: has been particularly quiet on is the second in command,
Speaker 3: Elon Musk, some say first in command, is obviously directly
Speaker 3: connected to this, and he hasn't said a whole lot
Speaker 3: at all about the political rhetoric that goes directly after
Speaker 3: one of his companies. And I think that's very telling
Speaker 3: in terms of what are we really after here?
Speaker 1: Well, and it was observed, I know Rachel I to
Speaker 1: argue the other day on her program that somehow Musk
Speaker 1: has gotten a four hundred million dollar armored Tesla vehicle
Speaker 1: State Department contract that actually went in place during the
Speaker 1: Biden administration, so it didn't have anything to do with Trump,
Speaker 1: but it didn't go through period. End of story there,
Speaker 1: And there are no current plans to issue a request
Speaker 1: to Tesla to make these vehicles or any other manufacturer
Speaker 1: for that to that end, and then I pivot over
Speaker 1: to another one. Tesla is a doge loser article from
Speaker 1: the Wall Street Journal which I brought up this morning.
Speaker 1: Trump putting a pause on this mandate for electric vehicle
Speaker 1: charging stations. That's not going to work to Tesla's benefit
Speaker 1: at all, and it certainly would in your to its
Speaker 1: benefit if that mandate went through. So anyhow, everybody's beaten
Speaker 1: up on Elon Musk for trying to ferre it out fraud, waste,
Speaker 1: and abuse. He's doing the job for free, and he
Speaker 1: has obviously no vested interest in it other than helping
Speaker 1: us out. But speaking of tariffs making prices go up,
Speaker 1: it looks as though it result in Nissan moving manufacturing
Speaker 1: from Mexico to maybe the United States.
Speaker 3: Now maybe, But I don't know reading through this article
Speaker 3: that this is another case of re read the article,
Speaker 3: not the head of Top auto maker. Yeah, Top Automaker
Speaker 3: could move some production out of Mexico a mid Trump tariff.
Speaker 2: Talks, according to the CEO. But to read to me,
Speaker 2: yeah exactly.
Speaker 3: That reads to me if you read that too quickly,
Speaker 3: you go, hey, cool, they're going to pull those jobs
Speaker 3: back across the border.
Speaker 2: But in reality, some other.
Speaker 3: Sources are indicating that they they they may just reduce production.
Speaker 3: So in other words, Nissan is simply making possibly making
Speaker 3: a business decision that this isn't the best time for us.
Speaker 3: Things are not going as well as they could be.
Speaker 3: We're not going to shut things down, but at the
Speaker 3: same time, we're just not going to produce as much.
Speaker 3: We're gonna kind of wait it out. Nobody has said
Speaker 3: that they're building that Nissan is building a new factory
Speaker 3: in you know, some farmtown in the middle of nowhere.
Speaker 3: That's not on the docket at all. All they've said
Speaker 3: is that there's going to be fewer jobs in Mexico.
Speaker 3: So if your goal is to poke Mexico in the
Speaker 3: eye over the immigration issues, then may maybe this helps.
Speaker 3: But on the other hand, this is not at this
Speaker 3: point a job creator in the US.
Speaker 2: Well, and I had I listen.
Speaker 1: I know where the source was from because I read
Speaker 1: the same thing you had read, which is silent on
Speaker 1: the where the plant might move the jobs to issue.
Speaker 1: Still some speculation swirling about it. One of my listeners
Speaker 1: called this morning and said that it was moving them
Speaker 1: to Flint, Michigan. Now I don't know where that source
Speaker 1: came from, but I suppose it's a possibility.
Speaker 3: Brian, Yeah, anything is possible at this point. But you
Speaker 3: would think if that was the goal, if the goal
Speaker 3: was to orchestrate, you know, these tariffs to drive that
Speaker 3: exact activity, then that would have been tied to the
Speaker 3: initial announcement. Now, of course, we can't force Nissan to
Speaker 3: do or any company to do anything. All we can
Speaker 3: do is make them uncomfortable in directions that so that
Speaker 3: they'll start behaving.
Speaker 2: The way we would like them to.
Speaker 3: But we can't force the absolute outcome. This is where
Speaker 3: tariffs can kind of blow up on people. And if
Speaker 3: you go back in the you know, throughout history, and
Speaker 3: this is this is a flashback from Ferris Bueller. If
Speaker 3: you remember ben Stein talking about the Holy Smoot tariffs.
Speaker 3: Oh yeah, well he was talking about terrfact.
Speaker 2: Did they work? No, they did not.
Speaker 3: And the United States saying further into the Great Depression,
Speaker 3: so they don't always work well.
Speaker 1: It's going to be an interesting economic experiment we're all
Speaker 1: going to be living through. Keep your popcorn out. It
Speaker 1: may hurt, it may help. We have no idea at
Speaker 1: this point but to speculate, including where Nissan might or
Speaker 1: might not move its manufacturing facilities from Mexico. Brian Javes,
Speaker 1: let's pause for a briefly a little bit early in
Speaker 1: this segment because we've got two more topics to go over.
Speaker 1: More homes are being pulled from the market, which is
Speaker 1: an interesting development in the real estate area. And then
Speaker 1: Americans are now finding it harder to pay off debt.
Speaker 1: So those two topics coming up. More with Money Monday's
Speaker 1: Brian James. Stick around. I'll be right back fifty five
Speaker 1: the talk station for more information about contests. Eight seventeen.
Speaker 1: Here fifty five KRCD Talk Station. A very happy Monday
Speaker 1: to you, Doing Money Monday with Brian James from all
Speaker 1: Worth Financial. This is a curious development, Brian, I thought
Speaker 1: the real estate market was on fire and your house
Speaker 1: was getting buyers lined around the corner, bidding wars going
Speaker 1: on all over the place, and I see that this
Speaker 1: article says, no, that's not the case anymore. What's going on?
Speaker 3: Yeah, So the Walsters Journal is reporting that seventy three
Speaker 3: thousand homes were pulled from sale in December of twenty
Speaker 3: twenty four, meaning that some people said seventy three thousand
Speaker 3: people said, you know, what, the heck with it?
Speaker 2: I don't want to deal with it.
Speaker 3: We're just either going to stay here or we will
Speaker 3: come back and try again. That's a sixty four percent
Speaker 3: increase compared to December of twenty three, when there were
Speaker 3: only forty some thousand homes that were pulled. So basically
Speaker 3: this is this could be the sign of the beginning
Speaker 3: of a pullback in the housing market. It does indicate
Speaker 3: a lack of buyers, right, if you're not housed in
Speaker 3: your home, that means the buyers aren't there. But usually
Speaker 3: what it really means there're always buyers there. It's not
Speaker 3: about the buyers, it's about the price.
Speaker 2: Huh.
Speaker 3: Buyer's price range has decreased from where it has been
Speaker 3: in the past. That could be the sign of a
Speaker 3: pullback that we know is inevitably gonna happen. It has
Speaker 3: been anticipated for a long time it just hasn't happened yet.
Speaker 3: This could be the first shot across the bow.
Speaker 1: Well, that would be actually a good development, more of
Speaker 1: a sort of a shaking out or a settling of
Speaker 1: these ridiculous prices. I know that the demand was so
Speaker 1: high that you could get crazy amounts for your home,
Speaker 1: but the whole idea that maybe your expectations in terms
Speaker 1: of your home value a little bit too high. So
Speaker 1: if you really want to sell your home, you're gonna
Speaker 1: have to adjust the price downward. That would be I
Speaker 1: think a good development.
Speaker 3: It would be just like anything else, though, it's gonna
Speaker 3: be a catalyst that will come along with other stuff,
Speaker 3: both good and bad. So you know, some people bought
Speaker 3: houses in November December something like that and.
Speaker 2: Paid whatever market that a market rate was at that time.
Speaker 3: Those folks, should they have to move, they're gonna have
Speaker 3: a problem because prices will have dropped.
Speaker 2: They could be underwater on their mortgages.
Speaker 3: However, I would not start running around worrying that this
Speaker 3: is going to be something like two thousand and eight
Speaker 3: all over again. Two thousand and eight was far more
Speaker 3: about the infrastructure the mortgage business.
Speaker 2: The mortgage lending market.
Speaker 3: Collapsed which prevented basically the entire market from buying houses,
Speaker 3: and the way we had done in the past, this
Speaker 3: as we're sitting here right now, would appear to be
Speaker 3: nothing more than a price adjustment. Basically, the way to
Speaker 3: think about it is that there are fewer buyers at
Speaker 3: the price range where we are currently asking. However, those
Speaker 3: buyers are still out there because we know the economy.
Speaker 3: The economy's in pretty solid shape, regardless of your politics.
Speaker 3: E comomy has been pretty solid shape for a few years,
Speaker 3: and there's not really any reason to think that's going
Speaker 3: to fall off the cliff, although there's plenty out there
Speaker 3: that have been saying looking for that next leg down
Speaker 3: since twenty two. But at the same time, so what
Speaker 3: that leads me to believe is that we will find
Speaker 3: the buyers. The buyers are just at a range lower
Speaker 3: than the sellers right now that will equal out at
Speaker 3: some point, because that's how markets work.
Speaker 1: Well, when you pull your house from the market, doesn't
Speaker 1: that suggest that you really didn't need to sell it.
Speaker 1: I mean, you just maybe wanted to tap into this
Speaker 1: over zealous price house market and get that equity out
Speaker 1: of there. Y you why you can get it at
Speaker 1: this premium rate. But if you pull it off the market,
Speaker 1: I guess you're staying put.
Speaker 2: And that could be.
Speaker 3: That could be some people who just sat down at
Speaker 3: the dinner table and say, you know what, we've always
Speaker 3: talked about moving.
Speaker 2: Maybe this is a little sooner than we anticipate.
Speaker 3: Yeah, so let's go ahead and throw it out there
Speaker 3: on the market at a crazy price and just see
Speaker 3: if we can get it. Some of them got it
Speaker 3: over the past couple of years. Others maybe asked just
Speaker 3: a little bit too high and the interest waned. And
Speaker 3: of course the if you talk to any realtor, they'll
Speaker 3: tell you that a house that sits on the market
Speaker 3: for a very long time starts to get a little
Speaker 3: bit of a of a stigma to it. Yeah, nobody
Speaker 3: wants to touch this. It's been listed for six months.
Speaker 3: I don't want to I don't want to even look
Speaker 3: at it.
Speaker 2: Let it, let it go.
Speaker 3: And so you do have to kind of pull it down,
Speaker 3: let let some time pass, and then and then repost it.
Speaker 1: Well, it seems to me that rather than having an
Speaker 1: air of negativity about it, that represents an option or
Speaker 1: an opportunity for a buyer to go in and maybe
Speaker 1: lowball it a little bit and get a better deal
Speaker 1: than they're asking. It never hurts to ask. Brian.
Speaker 3: Absolutely, Yeah, So I think this might just be an
Speaker 3: more of an optimst. Then, yes, it's a pullback, but
Speaker 3: it's a pullback from an extreme. I think our society
Speaker 3: and our economy does just fine as long as we
Speaker 3: left the pendulum swing back and forth without too much panic.
Speaker 3: They can only swing so far before we have to
Speaker 3: anticipate an opposite reaction.
Speaker 1: Well, I can only hope this represents an opportunity for
Speaker 1: some of the younger buyers who have been priced out
Speaker 1: of the market. I just did the home costs. I've
Speaker 1: seen closings on houses and you'd read be like you
Speaker 1: got six hundred grand for that thing. It's like how anyway?
Speaker 2: Yeah, I couldn't agree more.
Speaker 3: I talk to my client's children, adult kids all the time,
Speaker 3: and it is amazing to me. I put myself back
Speaker 3: in their shoes, and I wrote, when I'm their age,
Speaker 3: mid twenties or so, this was the next thing.
Speaker 1: I know.
Speaker 2: I'm going to be here.
Speaker 3: I've got my career here in Cincinnati. It's time to
Speaker 3: put down roots. That's really not a consideration. They're still renting,
Speaker 3: and they anticipate they're going to rent for another seven.
Speaker 2: Or eight years, even though they know they're not leaving town.
Speaker 2: It's a scary time for that.
Speaker 1: All right, And double down on that by pivoting over
Speaker 1: to the other topic we're talking about this morning before
Speaker 1: we part company. Americans finding it harder and harder to
Speaker 1: pay off their debt.
Speaker 2: Absolutely, so go figure we owe money.
Speaker 3: So total household debt in the United States rose by
Speaker 3: about a half a percent in the fourth quarter of
Speaker 3: twenty twenty four. These numbers sound tiny, but they're really not.
Speaker 3: That gets us to eighteen trillion dollars. You know, we
Speaker 3: say the word trillion a lot more often nowadays. It
Speaker 3: used to be the word billion was an attention yetter
Speaker 3: billion has become the new million.
Speaker 2: Now we talk about trillions when we're worried about it.
Speaker 3: So this has covered all loan categories, mortgages, auto loans,
Speaker 3: credit cards, homewke, we lands of credits. Everything saw increases.
Speaker 3: Credit card balances themselves are at one point two trillion dollars.
Speaker 3: That's a seven percent increase over the previous year. That's
Speaker 3: how much less people are able to pay their bills
Speaker 3: with their normal cash flow. We're rotating these balances on
Speaker 3: a much more frequent rate.
Speaker 2: Than we used to.
Speaker 1: So the solution, Brian, your financial planning advice to deal
Speaker 1: with this type of thing or prevent this type of
Speaker 1: thing from happening. These credit card interest rates are just
Speaker 1: sick crazy.
Speaker 2: They are. They are.
Speaker 3: So there was a bill, there has been and this
Speaker 3: was something that Trump talked about on the campaign trail
Speaker 3: and he has still talked about to this day. There's
Speaker 3: a bill that has been introduced. It's going to cap
Speaker 3: credit card interest rates at ten percent. Now, again, it's
Speaker 3: just a bill. So guess who is out there fighting
Speaker 3: against it? The banks and the lenders really are. They
Speaker 3: love their twenty seven percent credit card rates, So there's
Speaker 3: going to be lobbyists. There's going to be pushed back
Speaker 3: against all this. What I find interesting though, is that
Speaker 3: this is this one came from some strange bedfellows. So
Speaker 3: this came from Bernie Sanders and Josh Holly. These are
Speaker 3: not guys who go out and have a beer together.
Speaker 3: To my knowledge, normally don't see eye to eye on
Speaker 3: a whole lot of things. But the bill that they
Speaker 3: introduced would cap credit cards at ten percent, and which
Speaker 3: matches something that Trump talked about during the campaign trail
Speaker 3: as far back as September. So whether we can get
Speaker 3: it across the finish line, who knows. But what I
Speaker 3: tell my clients if you were in this situation. Matter
Speaker 3: of fact, I had this conversation last week. If you're
Speaker 3: in this situation, you've got a credit card balance that
Speaker 3: you have kind of forgotten about. It's probably charging you
Speaker 3: twenty plus percent. That's what their credit card companies want.
Speaker 3: A lot of times these come from an initial offer
Speaker 3: of zero percent or three percent or something that feels
Speaker 3: like nothing. The banks don't make a dime until.
Speaker 2: You forget about it.
Speaker 3: They're waiting for you to push it into the seventh
Speaker 3: month of a six month bonus.
Speaker 2: So as soon as that happens, you're gonna start paying
Speaker 2: high interest rates. It is okay in that situation.
Speaker 3: If you've got good credit scores, go get one of
Speaker 3: those zero percent balanced transfer offers. If those are showing
Speaker 3: up to your mailbox, take advantage of it. That will
Speaker 3: buy you some more time. But don't forget about it again.
Speaker 1: Now does that impact your credit score by doing that?
Speaker 1: Transferring to it will?
Speaker 3: So yeah, yeah, if you're going to apply for a
Speaker 3: new line of credit. Yes, there will be a hit that.
Speaker 3: That's of course a hard credit pool. You're literally proactively
Speaker 3: voluntarily asking for credit.
Speaker 2: But at the same time, what it will do assuming
Speaker 2: you get approved. You gotta have a good credit score
Speaker 2: for this to work.
Speaker 3: But assuming you get approved, there will be an opposite
Speaker 3: reaction because now you will have extra credit available to
Speaker 3: you that will drive your score up.
Speaker 2: It's a little coumenraterintuitive, isn't it.
Speaker 1: It's so counterintuitive. It's just like the it's like alchemy,
Speaker 1: you know. I just don't understand how they really say that.
Speaker 1: You go ahead and get more up, more opportunity to
Speaker 1: get more line of credit available, and that will make
Speaker 1: your score grow up.
Speaker 2: I just I don't know.
Speaker 1: Just see that as a risky proposition. But whatever do
Speaker 1: they if they.
Speaker 2: Ever recourse it does one plus one equals potatoes. That's
Speaker 2: exactly how the credit card.
Speaker 1: Issuest Yeah, Phase three profit Brian James. Appreciate your insights
Speaker 1: on these topics every Monday. We'll do it again next Monday.
Speaker 1: And thanks again to all Worth for loaning you out.
Speaker 1: We'll talk. Have a great week, my friend.
Speaker 2: All right, you two, we'll talk to you next Monday.
Speaker 1: Enjoy that President's week yees, stay warm too, eight twenty
Speaker 1: six Right now if you have KS the talk station
Speaker 1: joking over the phone lines, we have a little time
Speaker 1: to talk between now and my next guest eight forty
Speaker 1: with Susie Kahn, local author of the book. Like Swan's
Speaker 1: really interesting subject out of that book, and I love
Speaker 1: having the local authors on the program, so we'll do
Speaker 1: that at eight forty. Otherwise, local stories coming up next
Speaker 1: fifty five KRC dot