Speaker 1: You're listening to bill Handle on demand from KFI AM
Speaker 1: six forty.
Speaker 2: KFI bill Handle. Here it is a Tuesday morning, a
Speaker 2: taco Tuesday.
Speaker 1: April eighth.
Speaker 2: As we continue on with the show, all right, going
Speaker 2: on today, I mean we're in the middle of this
Speaker 2: whole terra for stock market.
Speaker 1: If I'm not mistaken, Amy is now up thirteen hundred
Speaker 1: points as we speak.
Speaker 2: Yes, thirteen hundred seventy one points, fourteen hundred points. Talk
Speaker 2: about volatility and volatility here is because of one person.
Speaker 2: International markets are roiling is the word that's used. And
Speaker 2: I think it's an appropriate word because of what Donald
Speaker 2: Trump is doing or not doing. And let's start talking
Speaker 2: about the philosophy of tariffs. And it's a question of protectionism.
Speaker 2: And when President Trump says it's an uneven playing field,
Speaker 2: he's absolutely right. We are terriff like crazy. For example,
Speaker 2: you go to China, you won't see an American car.
Speaker 2: They just don't have American cars.
Speaker 1: They let them in.
Speaker 2: You go to Japan, you won't see American cars. How
Speaker 2: many Japanese cars you think we have here? It is
Speaker 2: an unfair trading balance. We don't tear iff Japanese cars
Speaker 2: the way they tear iff American cars to the point
Speaker 2: where they can't even.
Speaker 1: Sell them over there.
Speaker 2: They're too expensive. So Trump is saying, it's on even.
Speaker 2: Let's make it an even playing field. You charge thirteen
Speaker 2: percent tariff on insert product. Product here will charge thirteen percent. Also,
Speaker 2: they're called reciprocal terriffs. Now it isn't that easy. Obviously
Speaker 2: there's a lot more to it, but the bottom line
Speaker 2: is we want it to be even. Stephen, the problem
Speaker 2: is is doing that overnight, doing that instantly, And that's
Speaker 2: exactly what President Trump has done, and that just turns
Speaker 2: the whole world upside down because the United States is
Speaker 2: the juggernaut, the economic juggernaut of the world, There's no
Speaker 2: question about it. And when the US moves in one
Speaker 2: direction or reacts, then the entire economic world turns around,
Speaker 2: not only listens, but is deeply affected. So tariffs are here,
Speaker 2: and the President said tariffs on everything that's coming in
Speaker 2: this country, and he particularly nailed China. Why is that
Speaker 2: because China's come back and say, okay, you tariff US
Speaker 2: thirty four percent more, which you just did. We're going
Speaker 2: to add a thirty four percent tariff on top of
Speaker 2: the tariffs and now Trump is saying, we're gonna add
Speaker 2: another fifty percent. It's my dad is bigger than your dad.
Speaker 2: My dad can beat up your dad. No, no, my
Speaker 2: dad can beat up your dad. That's what's it's escalating
Speaker 2: like crazy. Now. The Trump administration says there are fifty
Speaker 2: countries that are willing to sit down and negotiate, saying, whoa, okay,
Speaker 2: let's sit down and talk about these tariff deals. The
Speaker 2: markets hate uncertainty, hate it. Trump lives on uncertainty. That's
Speaker 2: part of his ammunition bank. He uses uncertainty as part
Speaker 2: of the way he governs, which is very unusual. It
Speaker 2: is obviously very disruptive. We'll see if he's right or
Speaker 2: not in the end two three years from now, if
Speaker 2: factories are in the United States, if the economy has
Speaker 2: moved over to us, if we're manufacturing, if we have
Speaker 2: the factories and the jobs, he's absolutely right. In the meantime,
Speaker 2: how much is it going to cost. There's one country
Speaker 2: in the world that's standing firm. China is saying we're
Speaker 2: not taking this crap. Now.
Speaker 1: Is China our biggest trading partner? It is not.
Speaker 2: It's our third biggest trading partner. First we have Canada
Speaker 2: in Mexico than China. But China is such an enormous
Speaker 2: country in terms of the economy and in terms of
Speaker 2: how much we buy and sell, particularly buy, tariffs are
Speaker 2: a big deal. So while all the other countries we
Speaker 2: think we're being told are willing to sit down and
Speaker 2: say to the president, Okay, we're willing to talk about this, let's.
Speaker 1: Negotiate this deal.
Speaker 2: Yeah, we'll lower our tariffs, We'll open up our markets to.
Speaker 1: US goods, China is saying no.
Speaker 2: As a matter of fact, any attempt at negotiations with
Speaker 2: China regarding tariffs right now, we're being told is effectively
Speaker 2: moooo guy dead. It's simply not going to happen anytime soon.
Speaker 2: And so now President g is playing chicken with President Trump,
Speaker 2: and who's gonna win.
Speaker 1: I think Trump.
Speaker 2: Has to blink because G is president for life. The
Speaker 2: economy is controlled in China by the state. The major
Speaker 2: banks are owned by the state, and they can last.
Speaker 2: Now it's gonna hurt, there's no questions. Tariff's hurt. But
Speaker 2: G is saying, we'll take the hurt. We can stand
Speaker 2: it far longer. And and.
Speaker 1: How do I put this far longer?
Speaker 2: And even if it affects us far deeply deeper, we
Speaker 2: can take it.
Speaker 1: The United States can't. We'll see.
Speaker 2: Also, the president is a lane duck president. She is
Speaker 2: in there three and a half years from now. She
Speaker 2: is going to be president three and a half years
Speaker 2: from now. Trump theoretically is going to be out of office.
Speaker 2: We'll see what happens. So it is complicated stuff. Which
Speaker 2: way is it going to go? I'll tell you one thing.
Speaker 1: Your iPhones are going to go through the roof.
Speaker 2: Batteries are going to be costing a whole lot more,
Speaker 2: particularly in evs.
Speaker 1: In cars you buy a Tesla. Eh.
Speaker 2: This is one of the reasons why Elon Musk is
Speaker 2: saying absolutely no to the tariffs.
Speaker 1: So let me tell you who is.
Speaker 2: Caught up with this tariff business big time, and that's
Speaker 2: Elon Musk and Donald Trump. This is a fascinating sidebar story.
Speaker 2: Does that I have a lot to do with the economy. No,
Speaker 2: not really, but the interest is incredible. First of all,
Speaker 2: let's start with Elon Musk and how long he's going
Speaker 2: to last. One of the things that Donald Trump loves
Speaker 2: is attention. We know that he gets it by being
Speaker 2: the president. He doesn't like to share attention with anybody
Speaker 2: read Elon Musk. So just on the attention aspect of
Speaker 2: their relationship, I think Musk's days are numbered because I
Speaker 2: don't think the President's going to take days in which
Speaker 2: Musk actually gets a lot more attention than he does.
Speaker 2: Then the issue of tariffs. The President obviously believes in tariffs,
Speaker 2: has for years. This is not new for him. Elon
Speaker 2: Musk does not like tariffs at all. Why is that
Speaker 2: because even though Tesla's are going to be tariffed less
Speaker 2: than other cars, he buys a lot of stuff from China.
Speaker 2: He buys parts from Mexico to make Teslas from Canada.
Speaker 2: The battery technology, huge amount the sodium lithium stuff that
Speaker 2: comes in the batteries is provided by China. They provide
Speaker 2: so many of the rare earths that go into batteries.
Speaker 2: They control the world market for as far as that's concerned.
Speaker 2: And all of that is being tariffed. And look what
Speaker 2: the President has done in the last few days. I mean,
Speaker 2: starting Saturday, tariffs to China went up thirty four percent. Well,
Speaker 2: China comes back and says, okay, tariffs that we're gonna
Speaker 2: nail on your products. You go up thirty four percent.
Speaker 2: Then Trump goes, okay, let's add another fifty percent.
Speaker 1: They're playing poker.
Speaker 2: I call an I raise, No, no, I call an
Speaker 2: I raise, And it's just going up and up, and
Speaker 2: we're looking at an economy that is going to be
Speaker 2: severely affected.
Speaker 1: What Trump is playing is the long game here.
Speaker 2: Interestingly enough, a guy who lives for the short game,
Speaker 2: who reacts instantly, and the argument is he reacts without
Speaker 2: thinking a whole lot, is playing the long game here.
Speaker 2: When he said day one, the economy it's going to
Speaker 2: be great, the prices that are going to drop, Ukrainian,
Speaker 2: the Russia Ukraine War is going to be over. The
Speaker 2: Israel klass War is going to be over. Day one
Speaker 2: not so much so. Now there's a little bit of
Speaker 2: reality that has come into the Trump administration and the
Speaker 2: world of economics, and he has said, yeah, it's going
Speaker 2: to hurt YEP. Tariffs are going to affect us deeply.
Speaker 2: And there are certain industries that are well in many
Speaker 2: cases put out of business long gain.
Speaker 1: What's the long game for him?
Speaker 2: Factories being built in the United States, because if you
Speaker 2: tariff foreign governments and foreign manufacturers, it's more expensive for
Speaker 2: Americans to buy those products and services, which means you
Speaker 2: have to buy here. Now, the argument's going to be, well,
Speaker 2: it's going to be more expensive no matter what, and
Speaker 2: it is tariffs make things more expensive, and Trump is arguing,
Speaker 2: let's have an even playing field.
Speaker 1: It is unfair. He's absolutely right.
Speaker 2: So the long game, it's going to be better for
Speaker 2: the economy. Maybe short term.
Speaker 1: Everybody agrees it's going to hurt.
Speaker 2: Musk is saying, whoa wait a minute, we really don't.
Speaker 1: Like these tariffs. But he's never been in favor of tariffs.
Speaker 2: Actually because why because he buys products from overseas.
Speaker 1: The last thing he wants is tariffs.
Speaker 2: Now, full cars are going to be prohibitive, There's no
Speaker 2: question about it. I have a BMW. If I were
Speaker 2: to buy it next year, if I were to buy
Speaker 2: it in six weeks, it would cost tens of thousands
Speaker 2: of dollars, or at least thousands of dollars.
Speaker 1: More than what I paid for it. Not that it
Speaker 1: wasn't expensive enough anyway.
Speaker 2: Trump, since he manufactures in the United States, well it's not.
Speaker 1: Going to be much. Tariff is not going to be
Speaker 1: as hard.
Speaker 2: But keep in mind that he outsources a lot of
Speaker 2: stuff that comes in. Car companies don't manuf acture their
Speaker 2: own screws and their own batteries and their own windows
Speaker 2: and their own door latches, and they have to buy
Speaker 2: them someplace.
Speaker 1: And if they're buying them for overseas.
Speaker 2: Because it's a world economy. It is a global economy,
Speaker 2: there's no way around it. We it's far different than
Speaker 2: it was, for example, after World War Two, where the
Speaker 2: United States control the entire economy of the planet.
Speaker 1: So is this going to break the Musk Trump relationship.
Speaker 1: I think it is.
Speaker 2: And this is one of those things where even business
Speaker 2: owners are turning on this tariff business saying, whoa, this
Speaker 2: is way too fast. It's going to affect us way
Speaker 2: too deeply. You know what this reminds me of is
Speaker 2: sometimes you have a president or a some kind of
Speaker 2: a high official or CEO just making the wrong decision
Speaker 2: and not really understanding the consequences of what's going on
Speaker 2: and maybe choosing the wrong path. And here's the analogy
Speaker 2: I'm going to make is when President Eisenhower selected Earl
Speaker 2: Warren as the Chief Justice of the United States, Right,
Speaker 2: here's the Republican Eisenhower, moderate Republican who picks up a Republican,
Speaker 2: former governor, former Attorney General of California, former judge, and
Speaker 2: makes him.
Speaker 1: The Chief Justice the United States.
Speaker 2: Earl Warren turns into the most liberal justice, well not
Speaker 2: the most liberal justice, but creates the most liberal court
Speaker 2: that was ever seen in the United States, the Warren Court,
Speaker 2: and Eisenhower was just taken for a loop. He said,
Speaker 2: the worst decision I ever made as president was choosing
Speaker 2: Earl Warren, nominating Earl Warren, and having him confirmed as
Speaker 2: the Chief Justice. And I think a lot of business
Speaker 2: owners are saying, WHOA, Maybe we shouldn't have pushed so
Speaker 2: hard for Trump to become president, because we're now screwed.
Speaker 1: We got a whole lot more than we wish for.
Speaker 2: Sometimes you know, you don't want what you wish for,
Speaker 2: and that seems to be the case. Bottom line here
Speaker 2: with Musk on opposite ends of the President and the
Speaker 2: president's team when it comes to tariffs, is there's a fight.
Speaker 2: Of course, the President's going to win on this one.
Speaker 2: And when Trump has argued even against the very economic adviser,
Speaker 2: saying they don't know what they're talking about, this is wrong.
Speaker 2: He's not really blaming the president. He's blaming more of
Speaker 2: the people around the president. Here is White House Press
Speaker 2: Secretary Kerriyon Levitt said, the President's put together a remarkable
Speaker 2: team of highly talented and experienced individuals who bring different
Speaker 2: ideas to the table, knowing that President Trump is the
Speaker 2: ultimate decision maker. Highly talented and experienced individuals like Pete
Speaker 2: Hegsith highly experienced as a Secretary of Defense, he was
Speaker 2: a second lieutenant.
Speaker 1: And you have.
Speaker 2: Let's talk about a few others who have zero experience.
Speaker 1: All right, I'm getting off my high horse. Absolutely. Now
Speaker 1: let's move over to your wealth. And there is something
Speaker 1: about home ownership that Americans just love.
Speaker 2: As a matter of fact, if you are wealthy, if
Speaker 2: you are considered wealthy, chances are that the wealth is
Speaker 2: tied up in your home, the equity you have in
Speaker 2: your house, especially if you bought several years.
Speaker 1: Ago or way earlier than that, you're downright rich. Kind of.
Speaker 2: What you do is have paper wealth, which means is
Speaker 2: it real wealth?
Speaker 1: Sort of?
Speaker 2: Kind of maybe, But this is a situation where you're trapped. Also,
Speaker 2: it's almost like an annuity that you can't get out.
Speaker 2: It's almost like you have stocks that have not yet vested.
Speaker 2: You have them, but you can't do anything with them.
Speaker 2: And that's what happens with home equity. Home equity, especially
Speaker 2: if I said it as if you bought years ago,
Speaker 2: my goodness, you know, it can be hundreds of thousands
Speaker 2: of dollars.
Speaker 1: They can go beyond that. It is not unusual for
Speaker 1: a home in southern California, it'd be a million dollars
Speaker 1: or more.
Speaker 2: You look out the window here in the studio and
Speaker 2: there's your million dollar home right out there in burbank,
Speaker 2: two bedroom, one bath, a thousand square feet, maybe three
Speaker 2: small bedrooms and two very small bathrooms, a thousand square
Speaker 2: feet on a lot the size of a postage stamp.
Speaker 1: And there's your million dollar house.
Speaker 2: And if you bought it years and years ago, there's
Speaker 2: your million dollar house that you bought for two hundred
Speaker 2: thousand dollars and you've paid it down, so you have
Speaker 2: one hundred thousand dollars mortgage left, and so you're sitting
Speaker 2: on nine hundred thousand dollars worth of equity.
Speaker 1: Oh my goodness, that's fantastic.
Speaker 2: Well, let me tell you people, if you don't own
Speaker 2: a home, you're looking at homeowners going, oh my god,
Speaker 2: I missed the boat.
Speaker 1: Look at you you're so rich.
Speaker 2: Well, yeah, you're rich, and you can translate it into
Speaker 2: real money if two things happen.
Speaker 1: One you sell the house.
Speaker 2: And you decide to move to Squirrel Hollow, Tennessee, where
Speaker 2: for nine hundred thousand.
Speaker 1: Dollars you can buy all of Squirrel Hollow.
Speaker 2: If you intend on staying here in southern California, you're screwed.
Speaker 1: Why are you screwed?
Speaker 2: Well, because you're selling your house for an enormous amount
Speaker 2: of money and you're buying a house for an enormous
Speaker 2: amount of money. Unless you're selling your home and you
Speaker 2: plan on renting, which isn't a bad idea because in
Speaker 2: many cases it makes more sense to rent than it
Speaker 2: does to buy. But there's just something about home ownership
Speaker 2: that is so American that makes you feel so good.
Speaker 2: I own my own home, even to the point where
Speaker 2: it makes no financial sense to do what I did,
Speaker 2: for example, and that is pay off a mortgage. I
Speaker 2: got a thirty year mortgage on the Persian Palace, got
Speaker 2: a construction loan, built the place, had a thirty year mortgage,
Speaker 2: which I paid off in less than ten years. And man,
Speaker 2: I made big, big payments and it made no financial
Speaker 2: sense because I had a great loan. I just wanted
Speaker 2: to wake up in the morning and own my house.
Speaker 2: There's just something about it. And it cost me money.
Speaker 2: It cost me big money over the years. In any case,
Speaker 2: as I said, it makes no sense. And here is
Speaker 2: another reason that it makes no sense to own a
Speaker 2: home and it keeps on going up and up and up.
Speaker 2: Inequity is because there's something called property taxes and reassessments.
Speaker 1: Oh that is a delight too.
Speaker 2: But one of the things that I love about this
Speaker 2: show is always looking for the lead lining. If I
Speaker 2: can do anything to ruin your life any in any way, whatsoever,
Speaker 2: I'm going to do it.
Speaker 1: That's what gives me joy.
Speaker 2: And sometimes there are topics in which it's really hard
Speaker 2: to find a negative.
Speaker 1: I mean I try. One of the.
Speaker 2: Things, for example, which is for those of you or
Speaker 2: those of as our homeowners, is look at the equity
Speaker 2: in our house, like how wealthy we've become.
Speaker 1: I mean, that's pretty good stuff. Ah, I'm gonna.
Speaker 2: Tell you the other end of that, and that is
Speaker 2: the negative of getting all.
Speaker 1: Of this wealth because this is paper wealth. Is it
Speaker 1: real wealth?
Speaker 2: Yeah? I don't know. I mean your home, if you
Speaker 2: there are homes that people bought for two hundred thousand
Speaker 2: dollars ten years ago, they're a million dollars.
Speaker 1: Now there's eight hundred thousand dollars with a equity.
Speaker 2: I mean, damn, you're a millionaire basically if you look
Speaker 2: at every anything else.
Speaker 1: But what do you do with it?
Speaker 2: You're gonna sell it, You're gonna cash it in. Why
Speaker 2: are you gonna buy? What are you gonna do? Go
Speaker 2: someplace else? You're gonna pay as much money. Oh, by
Speaker 2: the way, let's talk about the interest rates. For those
Speaker 2: people that borrow money. You're refinanced, and I know people
Speaker 2: that have done it for two point seventy five percent.
Speaker 1: That's free money.
Speaker 2: Now we're getting over that because what's the interest rate now?
Speaker 2: Six and a half percent is over on a thirty
Speaker 2: year mortgage. It's a little bit more than two point
Speaker 2: seventy five. So there's your quote wealth. You can't do
Speaker 2: anything with it because look at the alternative, So you
Speaker 2: just sit on it. And then the other fun topic
Speaker 2: is your home is getting more and more valuable by
Speaker 2: the second, where now it's slowed down a bit, but
Speaker 2: it was just exploding.
Speaker 1: As a matter of fact, if you look at the stats.
Speaker 2: Home prices have increased forty seven percent between February of
Speaker 2: twenty twenty and February of this year, right over five years.
Speaker 2: Forty seven percent increase. I mean, stocks, bonds, none of
Speaker 2: that have increase like that.
Speaker 1: Homes have. Well, you know what happens.
Speaker 2: Here are your property taxes, and the recorder's offices in
Speaker 2: various counties around the country, particularly here in southern California,
Speaker 2: have a nasty way of reassessing your home.
Speaker 1: You think it's a secret.
Speaker 2: That your house has gone up in value, so they
Speaker 2: reassess it, and your property taxes are paid on the
Speaker 2: value of your house.
Speaker 1: And so how in how about your insurance rates? Have
Speaker 1: they gone up a little bit? You think so? Home insurance?
Speaker 1: I mean you got to the point.
Speaker 2: With you know, one of the reasons I sold the
Speaker 2: Persian Palace.
Speaker 1: I couldn't.
Speaker 2: I just wouldn't couldn't afford the home insurance rate. They doubled,
Speaker 2: literally doubled from one year to the next, and they
Speaker 2: weren't particularly cheap first time out. Property taxes kept increasing increasing,
Speaker 2: So here I am with a ton of equity, which,
Speaker 2: by the way, I had to get another house here
Speaker 2: in southern California. Now, the only reason it was cheaper
Speaker 2: is because the house is less than half the size
Speaker 2: of the Persian Palace. But I finally got rid of
Speaker 2: my kids kicking them out. Boy was that kicking and
Speaker 2: screaming on that one. I literally had to boot them
Speaker 2: out the front door. And so that's the reality. But
Speaker 2: you still want to be a homeowner, don't you. It's
Speaker 2: just it's not that easy. And as I said in
Speaker 2: the last segment, here's what's easy, and that is selling
Speaker 2: your home and getting out of Dodge.
Speaker 1: Just saying I'm done. I'm going to move to Costa Rica.
Speaker 2: I'm going to move to Appalachia, where, by the way,
Speaker 2: it's it's medical care is cheaper there too. Do you
Speaker 2: know that you can actually pay off your doctors and
Speaker 2: sides of bacon, because that's what they do. It's not
Speaker 2: quite the same as here. Anesthesia is very different. They
Speaker 2: give you a stick to bite on. Now that's not
Speaker 2: to say that medical care is not fantastic in those
Speaker 2: parts of the country. That's another topic entirely. But home ownership,
Speaker 2: I just want to ruin your day. All of this
Speaker 2: is true, by the way, every bit of it all right,
Speaker 2: this is KFI AM six point forty.
Speaker 1: You've been listening to the Bill Handle Show.
Speaker 2: Catch my Show Monday through Friday, six am to nine am,
Speaker 2: and anytime on demand on the iHeartRadio app