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<v Speaker 1>Hear about it, and then yea. The Epstein hopes these

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<v Speaker 1>fellows have to be released talking about it. I want

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<v Speaker 1>to know the truth. We say same on fifty five

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<v Speaker 1>KRC the talk station to Shibato six right now, but

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<v Speaker 1>you buy pair CD talk station. I hope you're having

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<v Speaker 1>a decent Monday. Always a good time to be listening

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<v Speaker 1>to fifty five KERRC Morning Show. Moving away from some

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<v Speaker 1>of the more tragic incidents going here in downtown Cincinnati

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<v Speaker 1>over the weekend, there's still other things going on in

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<v Speaker 1>the world. We still got to worry about money, and

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<v Speaker 1>we need to worry about the Federal Reserve hiking interest

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<v Speaker 1>rates or lowering interest rates. Welcome back from all Worth

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<v Speaker 1>Financial Brian James, do another edition of Money Monday.

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<v Speaker 2>Good morning, mister Thomas, thanks for having you once again.

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<v Speaker 1>All right, all I've heard and I know the Trump

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<v Speaker 1>administration wants the Fed to lower the interest rates. There

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<v Speaker 1>have been discussions about maybe reducing it by twenty five

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<v Speaker 1>bases points. Nobody's really talking about raising it. But there

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<v Speaker 1>was an interesting article today and if we haven't seen it,

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<v Speaker 1>I'll refer you to it. Don't rule out a rakehike

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<v Speaker 1>by William Silver who's written on matters economic and written

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<v Speaker 1>books before. He said, someone at the meeting should say

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<v Speaker 1>the FED might have to raise its target rate at

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<v Speaker 1>some point during the year, noting that unemployment rate remains

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<v Speaker 1>pretty dang low, but the rate of inflation is still

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<v Speaker 1>somewhat elevated, suggesting, in his words, if anything, the target

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<v Speaker 1>interest rates should be higher to push down inflation. No,

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<v Speaker 1>I haven't heard anybody talk about that prior to my

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<v Speaker 1>reading this article this morning. Was either going to stay

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<v Speaker 1>the same or it was going to get lowered. What

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<v Speaker 1>do you think, Brian James.

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<v Speaker 2>Well, yeah, I think it's pretty tough for folks to

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<v Speaker 2>go against the grain here. You know, you look a

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<v Speaker 2>lot of these political voices, and unfortunately, like it or not,

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<v Speaker 2>a lot of them are tied to President Trump, and

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<v Speaker 2>he's of course advocating for the opposite and has been

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<v Speaker 2>doing that very loudly for basically the last decade. So yeah,

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<v Speaker 2>it is a little bit surprising to hear it, to

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<v Speaker 2>hear anybody come out against, you know, the idea of

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<v Speaker 2>lowering rates. Some people still see inflation out there. We've

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<v Speaker 2>got we've got some good headlines over the weekend related

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<v Speaker 2>to tariffs that we're going to get to here and shortly.

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<v Speaker 2>But you know, we haven't beaten the inflation monster yet

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<v Speaker 2>completely one hundred percent, but we made a lot of

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<v Speaker 2>progress there. So yeah, I would agree with you. I'm

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<v Speaker 2>not sure I see the benefit or the risk. I mean,

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<v Speaker 2>maybe it's a topic to talk about. That's why there's

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<v Speaker 2>only a handful of voices, you know, out that about that.

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<v Speaker 2>There are a few people out there, you know, Neil

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<v Speaker 2>Kashkari and the Minneapolis Fed. He has hinted that he's

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<v Speaker 2>open to leaving the door open for another hike if

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<v Speaker 2>we still see price pressures resuming. Cleveland FED Representative Loredamester

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<v Speaker 2>said similar. She's just really tight on None of them

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<v Speaker 2>are as vocal as this individual is. But you know,

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<v Speaker 2>I really only hear it in hints. Otherwise, well it

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<v Speaker 2>was noted again. I'm going back to this, mister silber guy.

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<v Speaker 2>Congress has to pay the government's bills, right, so it

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<v Speaker 2>too likes low interest rates. So this low interest rates

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<v Speaker 2>doesn't really bear a political stripe. Low interest rates are

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<v Speaker 2>if you ignore the inflationary reality that might exist. I mean, Democrats, Republicans, independence, communists,

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<v Speaker 2>everybody enjoys the benefits of lower interest rates, if for

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<v Speaker 2>no other reason, it tends to have an impact on

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<v Speaker 2>what somebody pays for a home in the mortgage rate. Yeah,

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<v Speaker 2>and that of course is where we feel at the most.

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<v Speaker 2>That's we've had a lot of home buyers. If you've

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<v Speaker 2>bought a home in the last four or five years,

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<v Speaker 2>then yes, you are paying probably six to seven percent. Ironically,

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<v Speaker 2>I did get an email over the weekend from a

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<v Speaker 2>client who was asking if we should borrow against the

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<v Speaker 2>home to invest in the market. And first off, that

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<v Speaker 2>is the sign of a market, of a market top

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<v Speaker 2>and people start thinking that way. But I think he's

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<v Speaker 2>not a person who has a mortgage right now. He's

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<v Speaker 2>not dealing with he's considering putting one back in place.

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<v Speaker 2>And I think he has forgotten, as a lot of

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<v Speaker 2>people have, that rates for people who are putting mortgages

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<v Speaker 2>in place are in the six to seven percent range.

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<v Speaker 2>It's not the three to four space or the two

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<v Speaker 2>space that we were in just a few years ago.

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<v Speaker 2>So I do think there's a big difference between people

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<v Speaker 2>who aren't dealing with mortgages and those who are.

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<v Speaker 1>Well, it's a really important thing to focus on that

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<v Speaker 1>very point, because you're going to have to get north

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<v Speaker 1>of seven percent ROI in order to cover the no

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<v Speaker 1>on what you borrowed to put in the market. So

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<v Speaker 1>that's that's not always guaranteed, is it, Brian James.

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<v Speaker 2>Oh no, Yeah, we talk about that a lot here

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<v Speaker 2>at my little table when we discuss financial plans and

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<v Speaker 2>market history and all that. And and I know why,

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<v Speaker 2>of course, it's because ever since twenty two the market

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<v Speaker 2>has been on an absolute tear. We've had some you know,

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<v Speaker 2>very nerve wracking drops in things with the election and

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<v Speaker 2>the policies that President Trumps put in place, but all

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<v Speaker 2>in all, the market's been up significantly and strongly. We

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<v Speaker 2>always get to a point there where people just kind

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<v Speaker 2>of lose that last bit of defensiveness in terms of

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<v Speaker 2>you know this, this can't go on forever. Well, when

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<v Speaker 2>that disappears, we start thinking about things like mortgaging the

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<v Speaker 2>house to invest a little more. And that's just and

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<v Speaker 2>usually it's people who don't really need that in the

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<v Speaker 2>first place. So I got a call to make this afternoon.

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<v Speaker 1>Well, these these folks at the FED, I mean they

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<v Speaker 1>don't I mean, they're not tea leaf readers, and they

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<v Speaker 1>can't see into the future. They don't know which directions

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<v Speaker 1>it's going to go in terms of the economy. They're

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<v Speaker 1>just really playing a guessing game, aren't they. Well.

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<v Speaker 2>I mean, there are some of the smartest brains we

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<v Speaker 2>have out there on this and they and they do

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<v Speaker 2>have to you know, somebody has to actually make decisions

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<v Speaker 2>and push buttons and pull levers that will have an

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<v Speaker 2>impact good, bad, or indifferent. And there's people are under

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<v Speaker 2>a lot of stress. President Trump always has the ability,

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<v Speaker 2>He's got the advantage of being able to change his

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<v Speaker 2>mind on a dime. And as we've seen, you know

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<v Speaker 2>it just in just in this administration, and we saw

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<v Speaker 2>it a couple of ministrations ago in his first go round.

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<v Speaker 2>He can do whatever he wants from day to day

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<v Speaker 2>and everybody else has to deal with it. On the

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<v Speaker 2>other hand, those representing the Federal Reserve making those decisions,

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<v Speaker 2>they will not be able to raise rates today and

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<v Speaker 2>then lower them tomorrow the way tariff Trump is handling

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<v Speaker 2>things like Tariff's.

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<v Speaker 1>Right, And they also don't have any obligation to listen

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<v Speaker 1>to what Trump wants. I mean, again, I go back

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<v Speaker 1>to do the one thing I always stuck in my

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<v Speaker 1>mind was the Carter administrations and their epic battle with

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<v Speaker 1>who was it the Green Span or Vulcar Vulcan, And

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<v Speaker 1>I mean, come on, interest rates were just through the

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<v Speaker 1>blanket roof and you know, Carter was screaming, please, dear God,

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<v Speaker 1>lower the interest rates. They ignored him.

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<v Speaker 2>Yeah, and his the approach he took, you know that,

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<v Speaker 2>that's what they call the Vulcar rule, right, they named

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<v Speaker 2>a rule after him. But yeah, he fought inflation so

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<v Speaker 2>fiercely and it hurt a lot. That was a significant recession.

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<v Speaker 2>But now as we look at it, that's considered a

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<v Speaker 2>benchmark of just a bold, aggressive way to conquer inflation,

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<v Speaker 2>even though it was unpopular and not very popular, you

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<v Speaker 2>know politically. Even so it did cost some lesser politicians

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<v Speaker 2>their roles. But Paul Volker has looked at as a

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<v Speaker 2>pretty smart dude nowadays for having done that. Well, fought

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<v Speaker 2>the fought against the tide of people who don't like that.

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<v Speaker 1>Oh, obviously it worked because it came down eventually, right.

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<v Speaker 2>Yes, And then think about deeper history than that, and

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<v Speaker 2>then that launched a period of about twenty years the

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<v Speaker 2>eighties and the nineties were really nothing bad happened. I mean,

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<v Speaker 2>that's a bit of an overstatement. But my gosh, when

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<v Speaker 2>I think of the prior twenty years that we've been

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<v Speaker 2>through since the turn of the century, and the eighties

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<v Speaker 2>and the nineties, eighties and the nineties were the anomaly, Brian.

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<v Speaker 2>We had a long period of time where where there's

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<v Speaker 2>a lot of people with money now who that's the

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<v Speaker 2>period that they made it in. And those folks conclude

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<v Speaker 2>that the anomaly has been the last twenty years where

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<v Speaker 2>we've had a whole bunch of crazy. But really, if

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<v Speaker 2>you look over the couple hundred quarter millennium of the

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<v Speaker 2>history of this country, it's actually the eighties and the

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<v Speaker 2>nineties that were probably about the best period we've ever had.

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<v Speaker 1>And do you think and I always have this weird

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<v Speaker 1>sort of I don't like mc mansions for a multitude

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<v Speaker 1>of reasons. I'm not I listen one man with one opinion,

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<v Speaker 1>it doesn't matter. But the size of houses have just

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<v Speaker 1>gotten very, very large for the past several decades. Do

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<v Speaker 1>you think that it's because of low interest rates that

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<v Speaker 1>it had an impact on you know, the size and

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<v Speaker 1>the and how much people invested in any given home,

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<v Speaker 1>Because if you had to pay, like exam what my

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<v Speaker 1>wife and I paid and we got our first home,

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<v Speaker 1>you probably wouldn't be looking at large and giant, you'd

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<v Speaker 1>be looking at something maybe a little bit more efficient

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<v Speaker 1>and affordable.

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<v Speaker 2>So I'll give you this example. So this is what

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<v Speaker 2>happened to me in terms of when I was looking

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<v Speaker 2>for my first mortgage about thirty years ago, when we

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<v Speaker 2>were first getting settled in the mortgage loan originator and

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<v Speaker 2>I was working for a bank at the time, mortgage

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<v Speaker 2>loan originator. The discussion was about how much can I afford?

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<v Speaker 2>How many square feet can I buy for whatever fits

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<v Speaker 2>my budget. It had nothing to do Nobody asked you kids,

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<v Speaker 2>you plan on having kids, how many kids, how big

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<v Speaker 2>of a house? They said, here's what you can afford

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<v Speaker 2>right now, based on interest rates. And of course, remember

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<v Speaker 2>who's pulling the strings, who benefits The banks of course

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<v Speaker 2>were and this was a period of time where we

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<v Speaker 2>had a run up to a financial crisis in two

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<v Speaker 2>thousand and eight, based on mortgages. Banks were looking under

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<v Speaker 2>every stone for every last opportunity to take advantage of

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<v Speaker 2>the fact that people were really excited about low interest rates.

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<v Speaker 2>So yes, absolutely, Brian, of course we were encouraged from

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<v Speaker 2>a thousand different points about just buy a bigger home

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<v Speaker 2>because you can afford it.

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<v Speaker 1>And as a financial planner, there was always like a

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<v Speaker 1>figure you shouldn't be spending more on x percent more

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<v Speaker 1>than x percent of your annual earnings on home ownership.

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<v Speaker 1>Is there a figure that we can think about and

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<v Speaker 1>look to it as a good guidance still to this day.

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<v Speaker 2>I mean, it's just gotten a little fuzzier because some

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<v Speaker 2>of the numbers that worked thirty years ago don't work anymore,

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<v Speaker 2>just because wages have not risen as fast as homes.

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<v Speaker 2>So I would go back to what I always say,

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<v Speaker 2>and you say this on my behalf as well, well,

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<v Speaker 2>have a plan, understand what you can get away with,

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<v Speaker 2>Understand what you are responsible for in the first place.

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<v Speaker 2>And I would put a very heavy emphasis on your

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<v Speaker 2>own retirement. Focus on your own retirement, building that nest egg.

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<v Speaker 2>Then figure out what the mortgage payment should be. Don't

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<v Speaker 2>focus on the giant house the way we did in

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<v Speaker 2>the late nineties and early two thousands, and then worry

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<v Speaker 2>about your four oh one K that's gonna work against you.

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<v Speaker 1>Yep. Just remember the bigger than homing, buy the more

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<v Speaker 1>furniture you're gonna have your bibe timy Bill doesn't stop

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<v Speaker 1>with the interest right now, It sure doesn't. I've been

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<v Speaker 1>to a lot of houses with a lot of empty rooms.

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<v Speaker 1>Don't go away. We'll continue with Brian James talking about

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<v Speaker 1>the tariff deal. Looks like dumps. I gotta win with

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<v Speaker 1>European Union or is it China on the on the

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<v Speaker 1>plate as well? Plus corporate earnings are coming out this week.

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<v Speaker 1>Or with Brian James at eight fifteen right now, I'll

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<v Speaker 1>be right back fifty five krc OUR iHeart read Hey,

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<v Speaker 1>nineteen fifty five KRCD Talk Station. Another segment here with

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<v Speaker 1>Money Monday's Brian James from all Worth Financier. We're gonna

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<v Speaker 1>hear from Rabbi Ari jun on the robling Bridge protest.

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<v Speaker 1>Still be in studio. Next, What's stuff? These last two

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<v Speaker 1>topics in one segment Brian James tariff deal with the EU.

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<v Speaker 1>We got a fifteen percent tariff deal, many reviewing it positively.

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<v Speaker 1>A promise of six hundred billion dollars in investment for

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<v Speaker 1>the European Union in the United States over time, seven

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<v Speaker 1>hundred and fifty billion dollars worth of their energy purchases

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<v Speaker 1>from the United States over time, and apparently hundreds of

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<v Speaker 1>billions of dollars in arms purchases, making the military industrial

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<v Speaker 1>complex very happy. We also had him negotiate a deal

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<v Speaker 1>with Japan as well, and he's sitting down to talk

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<v Speaker 1>with China. I guess beginning maybe today. What's your take

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<v Speaker 1>on the tariffs, Brian, Well, this is all.

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<v Speaker 2>Good news in terms of it answers the question. We

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<v Speaker 2>all know that the market and the economy really, really

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<v Speaker 2>really super hate the unknown. Yes, in futures, as we're

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<v Speaker 2>talking about this right now, I think you're doing a

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<v Speaker 2>whole bunch of nothing. Yep, that's true. So pretty quiet

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<v Speaker 2>on the market and what that looks like. The reason

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<v Speaker 2>that's a good thing, obviously is because it means we're

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<v Speaker 2>not spooked about things. A question has been answered. So

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<v Speaker 2>the headline is the US and the EU are at

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<v Speaker 2>a deal now at fifteen percent tariffs on steel and aluminum,

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<v Speaker 2>and so that's gonna prevent this larger trade war from happening.

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<v Speaker 2>And the threat there was that the original Trump era

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<v Speaker 2>tariffs were going to come back twenty five percent on

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<v Speaker 2>steal in ten percent aluminum, and so this is going

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<v Speaker 2>to replace a twenty twenty one deal that paused the

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<v Speaker 2>tariffs and those were going to expire anyway, and so

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<v Speaker 2>that this is all everybody wants to make sure we

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<v Speaker 2>don't have an overcapacity situation. And so we're just out

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<v Speaker 2>of situation where we've answered the question and we can

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<v Speaker 2>kind of get to move on a little bit. That

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<v Speaker 2>is good news. Not everybody in Europe is happy, of course,

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<v Speaker 2>right because you know, some of these countries didn't have

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<v Speaker 2>any kind of the tariffs levied against the United States.

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<v Speaker 2>So this is we're we're kind of taking the first

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<v Speaker 2>shots against them. But the US is just throwing its

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<v Speaker 2>weight around and the EU at the moment has acquiesced

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<v Speaker 2>and conceded a decent amount of the United States.

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<v Speaker 1>Well, at least it shows we still have some weight. Brian.

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<v Speaker 2>Yeah, And that's a little bit of a relief, isn't it.

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<v Speaker 2>It is you know, it started to feel briefly there

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<v Speaker 2>like we may have overshot and maybe we were a

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<v Speaker 2>little overly confident in how much the rest of the

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<v Speaker 2>world has to rely on the United States. Well, this

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<v Speaker 2>is a couple of check marks in the good column.

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<v Speaker 1>Well, I know, did some more think, okay, fine, fifteen

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<v Speaker 1>percent a lot better than fifty And I know VW.

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<v Speaker 1>Has been hit really hard, as has some others BMW,

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<v Speaker 1>Mercedes and other German carmakers at twenty seven and a

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<v Speaker 1>half percent U of tariff, so they get a little

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<v Speaker 1>relief from that. But what about the concept of zero

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<v Speaker 1>for zero?

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<v Speaker 2>Well, I think that what do we just say though

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<v Speaker 2>that doesn't throw the United States weight around?

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<v Speaker 1>Right?

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<v Speaker 2>We want to impose our will on the rest of

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<v Speaker 2>the world, you know, good, bad or in different Not

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<v Speaker 2>everybody agrees that this is the right approach, but that's

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<v Speaker 2>what we elected in November. And remember where we all

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<v Speaker 2>where this all started. One of the very first topics

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<v Speaker 2>that came up was all countries are going to start

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<v Speaker 2>to pay what they committed to in terms of supporting

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<v Speaker 2>NATO and support supporting those military alliances. This is just

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<v Speaker 2>the next phase of the same thing. The United States

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<v Speaker 2>was able to force those countries. Those were things that

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<v Speaker 2>they had all agreed to and simply not held up

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<v Speaker 2>on what they had signed off on years ago. In

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<v Speaker 2>the United States picked up the tab because we deemed

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<v Speaker 2>it more important to have that in place, and the

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<v Speaker 2>other countries just relied on the fact that we would

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<v Speaker 2>step in and they were right. So this, I think

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<v Speaker 2>is the tit for tat. To me, this is the

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<v Speaker 2>zero for zero. We forced other countries to pay their share,

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<v Speaker 2>and this is how we're getting back.

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<v Speaker 1>On the other end, the earnings report, it's earning season.

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<v Speaker 1>Is supposed to be some earnings report coming out this week.

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<v Speaker 1>According to the Reuters headline, it's AI good, Artificial intelligence

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<v Speaker 1>good everything else. Yeah, not so much, Brian.

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<v Speaker 2>So yeah, we had to have good runs. So the

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<v Speaker 2>markets up as we're sitting here about eight percent. As

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<v Speaker 2>we know, all that really matters. All we care about

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<v Speaker 2>is not what our earnings. It's whether the analysts were right.

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<v Speaker 2>So we always look at what the analyst said versus

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<v Speaker 2>what's happening. So through last Friday, one hundred and sixty

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<v Speaker 2>eight of our five hundred favored companies in the S

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<v Speaker 2>and B five hundred have reported eighty two percent of

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<v Speaker 2>them have beaten their profit in estimates. And we're about

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<v Speaker 2>four and a half percent over second quarter last year.

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<v Speaker 2>So that is all those are all good things were

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<v Speaker 2>on a good run. A lot of it, yes, is

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<v Speaker 2>being driven by AI, not only the companies that produce it,

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<v Speaker 2>but companies that are taking advantage of it and using

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<v Speaker 2>to using it to find new markets. Create new products

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<v Speaker 2>and make things more efficient.

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<v Speaker 1>Well well, well, Brian James, question for you. Everybody talking

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<v Speaker 1>about AI AI AI AI. You know, data centers being built,

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<v Speaker 1>billions of dollars being spent, et cetera, et cetera. This

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<v Speaker 1>sounds to me like the potential for a future bubble burst.

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<v Speaker 1>Any comment on my thoughts along those lines.

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<v Speaker 2>Absolutely, You know, I like to talk about catalysts all

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<v Speaker 2>the time, right. The catalyst in the in the late

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<v Speaker 2>nineties was the web itself, Yahoo and all those other

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<v Speaker 2>names that we've all since forgotten about. Then after that

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<v Speaker 2>it became real estate. After that it became the cloud.

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<v Speaker 2>Remember we talked talked about the cloud fifteen years now,

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<v Speaker 2>some we use every day. It was mobile devices and

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<v Speaker 2>all that. This is just the latest thing that The

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<v Speaker 2>best example I can give of that is COVID. Remember

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<v Speaker 2>when Covid was going to kill us all and was

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<v Speaker 2>going to end the world. Well, no, it turned into

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<v Speaker 2>a boon for companies like zoom In, companies like Dell

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<v Speaker 2>who had to create enough so that all Worth and

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<v Speaker 2>all the companies that were sending employees home could replicate

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<v Speaker 2>desktops in the home environment. Everything that happens good, bad,

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<v Speaker 2>and different winds up becoming a catalyst for someone to

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<v Speaker 2>make a profit, and AI is no different.

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<v Speaker 1>The entrepreneurial spirits live and well. It's just working on

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<v Speaker 1>the landscape that's been working, playing the hand that's been

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<v Speaker 1>dealt and dealing with and coming up with new ways

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<v Speaker 1>to do it. That's innovation right there. Brian James, always

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<v Speaker 1>a pleasure to having you. I appreciate it all worth

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<v Speaker 1>loaning you out every Monday for this segment. I hope

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<v Speaker 1>you have a wonderful week, my friend. I will talk

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<v Speaker 1>to you in seven days A twenty five fifty five

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<v Speaker 1>K see the talk station. The rechar of Rabbi ri

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<v Speaker 1>June is gonna be talking about the Robling Bridge protests

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<v Speaker 1>which was in support of i' mom Amon Solomon, whom

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<v Speaker 1>ice detained and then we had sort of a situation

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<v Speaker 1>breakdown with people taking over the bridge resulting in police activity.

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<v Speaker 1>Rabbi John on that subject and maybe even get him

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<v Speaker 1>to comment on the situation unfolding between Israel and Gaza

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<v Speaker 1>right now. Stick around for the Rabbi. He'll be on

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<v Speaker 1>next fifty five car the talk station