Speaker 1: Well to another episode of the Chicks on the Right
podcast where we host our friend and sponsor of the show,
Zach Abraham from Bulwart Capital Management, to talk about things
that are happening in the financial world. And there's a
big thing that Trump has brought up in a recent
rally speech where he said he's thinking about capping credit
card interest rates, which is kind of blowing our minds
and which we want to know. Do you think, first
of all, that that's just bluster or would he could
he and would he actually do something like this? And
what impact would that have on like everything?
Speaker 2: You know, it's an interesting thing because typically I would
be against something like this, and the reason for it
is that what it would result in is it would
result in less available credit, right, so meaning and it's
just it's a simple way that you know, banks are
surance companies or credit card companies are going to look
at managing their own internal risk, right which is if
you know they can offer these deals if you know
fifteen percent of people go over the limits, don't pay
their stuff on time, and they're collecting you know, fifteen
to twenty percent penalty interest effectively against somebody else. So
it would cut down on the amount of available credit.
I also think, though, when you look at usury laws, right,
there's a precedent in this country. There are there are
there there happen in the times, there are now and
I believe in this country, I want to say it's
twenty nine percent is the ultimate cap on credit cards.
Speaker 3: Which is a lot.
Speaker 4: It's insane, that's such.
Speaker 3: Yeah. So what he's saying ten, right, isn't even wanting
to cap at ten?
Speaker 4: Yeah? Yeah, And.
Speaker 2: So there is precedent there for usury. And here here's
here's one of the other factors that you want to
look at. You know, the long term Fed funds rate
average in this country is like but between six to
six and a half percent. Okay, So if you decide somewhere, somehow,
twenty nine percent is the line between you know, fair
and obscene. It seems to me that when interest rates
go below the average, so too should the pop level
of you know, acceptable interest rates on credit cards.
Speaker 4: And that never happened.
Speaker 2: The other thing I will say is that I'm a
huge fan Historically, I'm a I'm a history nerd, but
I'm a huge fan of Teddy Roosevelt. And I think
what Teddy Roosevelt really illustrates is that in order to produce,
in order to preserve a free and competitive market, you
have to have government intervention. As much as I hate
saying that, right, free markets completely free markets only remain
free for a little bit of time, and then that
it's because it's because monopolies take over, right, and then
that becomes an unfree market. Right when when one player
has undue advantage, you know, whether it's earned or not.
It just competition is what makes free markets work. And
so I think you everything in this economy continues to
be way too slanted. It's it's sort of like, I
don't know if you guys heard about this, but they
just announced yesterday, Oh, we're going to allow stock market
quotes to occur in half sent increments. Right now, when
you make a bid on a stock, it's it's made
in sense, right, pennies, So I can bid fifty two
to oh seven for a stock. Well, now they're going
to allow you to bid fifty two seven point five, right,
you can make half some bids. Well, here's my point
is the deck is constantly being stacked in favor of
the rich. The only law, excuse me, the only group
of people that will benefit from that change to stock
quotes are massive hedge funds, massive institutions, and high frequency
trading programs. That's it, Okay, So once again you are
passing a law that benefits those guys who are pretty rich,
who are already powerful, right, gives them another lever and
another way to make more money, right, and it doesn't
benefit the little man at all. And the way they sell, oh,
it'll provide for better market liquid.
Speaker 4: Absolute nonsense. This is all about.
Speaker 2: This is all about players that have enough money to
influence the political system getting their way. And I think
that's happened in credit markets too, right. The fact that
the fact that a bank can stick somebody with twenty
nine percent, that's you, Suriy, It's it's debt imprisonment.
Speaker 4: I mean it's it's disgusting.
Speaker 3: It's crazy you never paid off. Okay, But I'm gonna
play devil's advocate here. So if somebody, because ultimately there's
going to be somebody that's a conservative that's going to say, okay,
but if you are okay with this, it's basically price control, right,
because I mean you're because the government's controlling. If if
you say we're going to cap at a ten percent.
That's that's basically Trump saying, well, it's Trump's way of
instilling price controls, kind of like Kamma is like, well,
these grocery stores are price gouging, so I'm going to
control that. So I'm just being devil's that. So then
what do you say that liberal that's like, well, he's
doing it, so why can't she do it? You know?
Speaker 2: Yeah, I've long believed in the need for a double
tier system. Meaning if you want to operate outside of
this law, you can do it. But if you're a
financial institution, you need to wave FDIC insurance. Right, Why
do you get a pack the protection of FDIC insurance
and the fact that the Federal Reserve is going to
bail you out all the time, and then complain about
the fact that we're price controlling. Yeah, if you're going
to rely on the federal government's backing and you're going
to rely on all the accounts that it's going to
get you, the fact that you're FDIC insured, then you
need to adhere to these rules. If you don't want
to adhere to these rules, that's fine, We're not going
to make you. But you need to wave FDIC insurance
and you ALTI need to sign a contract saying when
you blow yourself up in the next financial.
Speaker 4: Crisis, we ain't bailing you out.
Speaker 3: Yeah right, it's quick.
Speaker 2: WHOA, why are we giving you insurance coverage for nothing?
If you want to have this protection, then do it
this way. If you don't, it's a free economy. Do
your thing, but we ain't bailing you out in the
next financial press Yeah.
Speaker 3: Okay.
Speaker 1: And then that so you think that that's what he's proposing.
Speaker 2: Then well no, but I would like to see it
go that way. Meaning so quick little history here. In
nineteen ninety eight we repealed the Glass Steagal Act. Okay,
So the Glass Stegal Act was put in I believe
in nineteen thirty three or nineteen forty four or nineteen
thirty four in response to the Great Depression. And what
the Glass Stegal Act said was that you could not
merge a commercial bank, an investment bank, a consumer bank,
or an insurance company. That you could make one of
those companies, but they had to be separate. And the
reason they said that was because you start convoluting risk
management protocols and you start having when you combine these
things together, you just create a bigger bomb, right, so
when it goes off, it takes down more things. Well,
guess which law they repealed in nineteen ninety eight, Glass.
Within nine and a half years, you have the biggest
financial crisis since the Great Depression. I've long said is hey,
And there's bunch people going, oh, Glass Steagel isn't fair.
That's why we got rid of it, And I go, no, no, no.
Speaker 4: Look, first of all, it worked pretty well.
Speaker 2: We didn't have a financial crisis since the Great Depression
until they repealed it.
Speaker 4: Right.
Speaker 2: Second of all, if you don't want to adhere to
Glass Stiegel, that's fine, right, Like this is the way
it should be. In my opinion, they should reinstate Glassteagle
and say no, you don't have to adhere to it,
but if you don't adhere to it, we're not covering you.
You don't get FDIC insurance, and all of your clients
need to know that. If you're willing to bear the risk,
that's fine. But what we've developed in this economy in
this country is privatize profits and socialized losses, and it's wrong,
it's morally wrong. The rich benefited from all the time
at the cost of the middle class.
Speaker 4: Tax payer, and it's nonsense.
Speaker 3: That makes so much sense. Oh my god, all the
sense it makes. It makes all the sense. I love it.
Is why we like talking to you. Yeah, I mean,
but that's.
Speaker 2: Why nobody's ever gonna rep it either, you know what
I mean, just because it makes sense.
Speaker 3: That's what Trot needs to hire you.
Speaker 4: You can if you're listening, sir, i'd pick up the phone.
Speaker 3: I love it. I love it.
Speaker 4: I'm not gonna be waiting by it either.
Speaker 3: Fantastic. Well thank you for that, because I was like
all ready to hear.
Speaker 1: I thought we were going to have this conversation and
you were going to be like, this is a terrible idea,
but you're making it make a huge amount of sense
with those parameters in place and the stuff that we
learned from you.
Speaker 2: Yeah, if you want to adhere to these rules, great,
here's the benefits from it. If you want to operate outside, fine,
but you're going to do it without our protection.
Speaker 4: It just makes sense.
Speaker 1: Yeah, it really does make sense. So how can people
We talked earlier this week about an upcoming seminar that
you have. Do you want to tell people how they
can get in on that action and where they can
find you.
Speaker 4: Yeah.
Speaker 2: Uh but Workcapitalmanagement dot Com, Know your Risk Radio dot
com super easy to find. And after what happened last yesterday, guys,
the need to educate yourself on inflation and the impact
on your portfolio is even more so because I think
you just unlocked the next wave of inflation and I
think this market's about ready to go ballistic to the upside.
Speaker 4: Oh my god.
Speaker 3: Yeah, Okay, that's a great note to end this on, Zach. Right,
I know what we're talking about next week.
Speaker 4: Yeah, yeah, I know. It's wild what they're doing right now.
Speaker 3: Yeah, exactly. Well, thank you something. We appreciate you, you.
Speaker 4: Bet, ladies, thanks for having me. As always.
Speaker 2: Investment advisory services offered through Trek Financial loc and SEC
Registered Investment Advisor. The opinions expressed in this programmer for
general informational purposes only and are not intended to provide
specific advice or recommendations for any individual or on any
specific security.
Speaker 1: Any references to performance of security so it thought to
be materially accurate and actual performance may different.
Speaker 3: Investments involved risk and are not guaranteed. Past performance doesn't
guarantee future results.
Speaker 4: Tricky for three zero week