WEBVTT 1 00:00:00.720 --> 00:00:02.919 That's our new word of the years. Yeah, heat dome. 2 00:00:02.960 --> 00:00:04.879 Remember when his hook echo was the first thing, and 3 00:00:04.919 --> 00:00:06.519 then it was direct show or direct show. 4 00:00:06.559 --> 00:00:08.320 Now it's a heat dome. So I feel that heat 5 00:00:08.359 --> 00:00:12.400 dome looks like thunderdome. Get our weapons out and start 6 00:00:12.439 --> 00:00:14.880 beating the crap out of each other, which certainly could 7 00:00:14.880 --> 00:00:18.719 happen anyway. Obviously, we attacked Iran over the weekend. The 8 00:00:18.800 --> 00:00:21.280 United States b two bombers dropping the bump bunker busters 9 00:00:21.280 --> 00:00:24.399 so we can get to the nuclear centrifuges at Fordham. 10 00:00:24.519 --> 00:00:27.280 Clearly on the heels of Israel really having a very 11 00:00:27.280 --> 00:00:32.799 successful military effort against the Iranians. Question Mark what happens next? 12 00:00:32.840 --> 00:00:35.000 I know the Iranians are a little miffed. They have 13 00:00:35.119 --> 00:00:38.920 threatened to do certain things including shut down the Straight 14 00:00:38.960 --> 00:00:40.960 of Horror moves and if you look at a map, boy, 15 00:00:41.079 --> 00:00:43.439 they got a lot of square miles along that straight 16 00:00:43.920 --> 00:00:46.520 and that that narrow its point, it's only two miles wide. 17 00:00:46.679 --> 00:00:48.880 And it was reported I saw on the Wall Street 18 00:00:48.920 --> 00:00:53.600 Journal that it's susceptible to mines, for example, as well 19 00:00:53.640 --> 00:00:58.079 as launches from the Iranian soil onto the shipping lanes 20 00:00:58.119 --> 00:01:01.200 and Straight of Horror moves, although probably not a really 21 00:01:01.240 --> 00:01:03.799 smart idea for them to do that, twenty percent of 22 00:01:03.799 --> 00:01:07.120 the global oil supply moves through that strait. That is 23 00:01:07.519 --> 00:01:09.959 a substantial amount. Brian, Where are we in terms of 24 00:01:10.000 --> 00:01:11.200 futures and how this looks? 25 00:01:11.480 --> 00:01:13.079 Yeah, and you're right, and that's not something I had 26 00:01:13.120 --> 00:01:15.000 looked at in a very long time. But you're exactly 27 00:01:15.040 --> 00:01:18.760 right about that map. That's Beach territory apparently. Yeah, look 28 00:01:18.799 --> 00:01:21.040 on a map that the entire Straight Ohar moves runs 29 00:01:21.040 --> 00:01:24.920 along the Iranian border. So where we are right now 30 00:01:25.120 --> 00:01:27.719 is the headlines. We got to be careful with these headlines, 31 00:01:27.760 --> 00:01:29.840 as always, read the article, not the headliness going to 32 00:01:29.879 --> 00:01:31.040 make T shirts to say that. 33 00:01:31.079 --> 00:01:31.319 I know. 34 00:01:32.040 --> 00:01:34.519 So the Straight of Horror Moves as of now, as 35 00:01:34.519 --> 00:01:37.120 of this moment right now, has not been closed. They 36 00:01:37.319 --> 00:01:39.480 voted to close it, but it still has to go 37 00:01:39.560 --> 00:01:43.000 through Iran's Supreme National Security Council. They have different layers 38 00:01:43.000 --> 00:01:46.280 of management or different layers of decision making bodies similar 39 00:01:46.319 --> 00:01:50.000 to we, and of course everything goes through this Supreme 40 00:01:50.079 --> 00:01:52.400 Leader of the I told. But anyway, Parliament voted to 41 00:01:52.400 --> 00:01:54.719 close it. They have not made an official decision. It 42 00:01:54.799 --> 00:01:58.000 is impacting transit some tankers are going the other direction 43 00:01:58.719 --> 00:02:01.200 or pausing their move been through there were just avoiding 44 00:02:01.239 --> 00:02:04.719 it entirely. In merchant shipping is also being advised to 45 00:02:04.760 --> 00:02:08.159 avoid those waters. However, the strait of Horn moves is 46 00:02:08.280 --> 00:02:10.280 open for now. The reason why haven't they just slammed 47 00:02:10.280 --> 00:02:12.599 the door, Well, like you just said, twenty percent of 48 00:02:12.719 --> 00:02:16.960 the world's oil moves through that strait. They can't do 49 00:02:17.039 --> 00:02:20.039 that without hurting themselves. So if they just wanted to 50 00:02:20.120 --> 00:02:22.080 hurt everybody else, then they'd have done it already and 51 00:02:22.080 --> 00:02:24.080 it probably never would have been opened in the first place. 52 00:02:24.319 --> 00:02:26.240 But that will have an impact on Iran. They have 53 00:02:26.280 --> 00:02:28.039 to be careful what they do to themselves. You know, 54 00:02:28.120 --> 00:02:30.039 cut off the nose to spite the face. 55 00:02:30.039 --> 00:02:33.000 Right, and you know, honestly, we have to acknowledge this 56 00:02:33.039 --> 00:02:35.400 is all over the backdrop of Iranian oil being subject 57 00:02:35.439 --> 00:02:40.199 to sanctions right now and their biggest customer China, and 58 00:02:40.240 --> 00:02:42.439 they would be the biggest loser if they shut down 59 00:02:42.439 --> 00:02:45.240 the straight to Horn meuse these these these tankers wouldn't 60 00:02:45.240 --> 00:02:46.919 be able to get to make their way to provide 61 00:02:47.000 --> 00:02:49.280 China with the oil it needs. And in fact, Secretary 62 00:02:49.280 --> 00:02:51.280 of State Mark Rubia made the point over the weekend, 63 00:02:51.759 --> 00:02:56.120 they urged China to remind Iran against the problems that 64 00:02:56.120 --> 00:02:58.319 they would face by closing the straight And China, of 65 00:02:58.360 --> 00:03:02.159 course is a bigger friend of Iran than anybody else is. 66 00:03:02.280 --> 00:03:04.560 So that's that's a lot of pressure that could come 67 00:03:04.599 --> 00:03:06.400 from China. Yeah, and don't forget India. 68 00:03:06.479 --> 00:03:08.919 India is not not far behind China in terms of 69 00:03:09.039 --> 00:03:11.719 buying oil from Iran. So yeah, and this is where 70 00:03:11.759 --> 00:03:14.599 one of those things where if you've been frustrated with 71 00:03:14.639 --> 00:03:17.759 globalization and disappointed at how that outcome has been, well, 72 00:03:17.800 --> 00:03:20.520 globalization could be saving us from larger wars right now 73 00:03:20.520 --> 00:03:24.199 because everything being connected to everything else means that nobody 74 00:03:24.199 --> 00:03:28.159 can do anything unilaterally. Anything that one one organization or 75 00:03:28.199 --> 00:03:31.759 one country does will impact many other countries that maybe 76 00:03:31.759 --> 00:03:34.280 they don't even want to impact. Maybe that's not the 77 00:03:34.280 --> 00:03:37.680 country that's particularly in the crosshairs, but there's always going 78 00:03:37.719 --> 00:03:40.080 to be a ricochet action. So it's not as easy 79 00:03:40.120 --> 00:03:41.520 to disrupt as it used to be. 80 00:03:41.719 --> 00:03:43.560 Oh and then when you look at the map as well, 81 00:03:43.599 --> 00:03:46.400 on the other side of the of the strait from Iran, 82 00:03:46.439 --> 00:03:49.319 you've got Kuwait, which looks like that's the only avenue 83 00:03:49.360 --> 00:03:51.639 to get its oil out the United Arab Emirates as well. 84 00:03:52.039 --> 00:03:54.360 And while Saudi Arabia does have a lot of square 85 00:03:54.400 --> 00:03:56.879 miles along the straight or Horn moves, I've read that 86 00:03:56.879 --> 00:03:59.000 they do have pipelines that should allow them to get 87 00:03:59.000 --> 00:04:01.840 their oil out by alternave means they do. 88 00:04:01.960 --> 00:04:04.680 Yeah, and so again, nothing is ever as simple as 89 00:04:04.680 --> 00:04:07.039 it seems. Ever, so there's going to be a major 90 00:04:07.080 --> 00:04:09.159 impact here, But it's going to be a whole lot 91 00:04:09.199 --> 00:04:12.520 of headline, any and article reading this week. We don't 92 00:04:12.560 --> 00:04:15.599 know what's going to happen this week, but we have 93 00:04:15.840 --> 00:04:18.759 just begun this particular chapter of global history here. Well, 94 00:04:18.839 --> 00:04:19.399 yes we have. 95 00:04:19.519 --> 00:04:21.800 And the other thing we benefited from our own fracking, 96 00:04:21.800 --> 00:04:23.800 which allowed us to be one of the largest oil 97 00:04:23.839 --> 00:04:26.879 producers in the globe. Thankfully we have our own resources here, 98 00:04:26.959 --> 00:04:29.319 so maybe we'll have less of a sting. Although it 99 00:04:29.399 --> 00:04:31.720 being a global commodity, the price of a barrel of 100 00:04:31.720 --> 00:04:34.399 oil don't necessarily go up if it does get shut down. 101 00:04:35.480 --> 00:04:38.920 What about inflation, any impact that this conflict's going to 102 00:04:38.959 --> 00:04:41.040 have on inflation? I saw the headline from USA today 103 00:04:41.079 --> 00:04:43.000 what an attack on Iran can mean for oil prices, 104 00:04:43.040 --> 00:04:45.879 inflation and the US dollar. Your take on inflation in 105 00:04:45.920 --> 00:04:48.399 the US dollar. Bryan, Well, it's not gonna help, let's 106 00:04:48.399 --> 00:04:49.000 put it that way. 107 00:04:49.079 --> 00:04:53.879 So yes, So these strikes did drive oil prices up briefly. 108 00:04:53.920 --> 00:04:56.399 As we're sitting here right now, things aren't too too crazy. 109 00:04:56.439 --> 00:04:58.600 A stock market futures are up just a little bit 110 00:04:59.000 --> 00:05:02.399 and oil is kind of calm down. So early panic, 111 00:05:02.560 --> 00:05:04.800 of course, because whenever we get this initial headline, we 112 00:05:04.879 --> 00:05:06.560 just don't know exactly how far this is going to go, 113 00:05:06.560 --> 00:05:08.480 how long it's going to last, So of course there's 114 00:05:08.480 --> 00:05:13.240 always a shock. Golf and Israeli equity markets moved around, okay, 115 00:05:13.319 --> 00:05:17.639 but oil had a big spike. The infrastructure, however, it 116 00:05:17.720 --> 00:05:20.199 still remains intact. Right This was not an attack on 117 00:05:20.360 --> 00:05:23.120 oil infrastructure, of course, It was an attack on the 118 00:05:23.199 --> 00:05:25.759 nuclear side of things. So this is going to be 119 00:05:25.800 --> 00:05:28.560 more about the handshake agreements that are now probably no 120 00:05:28.639 --> 00:05:31.680 longer agreements, and seeing how everybody wants to react to it. 121 00:05:31.879 --> 00:05:34.399 But to your question, if oil settles in about the 122 00:05:34.439 --> 00:05:36.639 eighty to ninety dollars range right now, it's about seventy 123 00:05:36.680 --> 00:05:40.000 seven bucks a barrel, then headline inflation could be looking 124 00:05:40.040 --> 00:05:42.360 at it, maybe a bump of point three to point 125 00:05:42.399 --> 00:05:45.680 four percent. This summer core inflation, We're not looking for 126 00:05:45.720 --> 00:05:48.879 that to move whole lot. And the growth drag from 127 00:05:48.879 --> 00:05:51.240 those higher gasoline prices is going to be offset a 128 00:05:51.240 --> 00:05:54.839 little bit by more defense spending and stronger shale activity 129 00:05:54.839 --> 00:05:57.680 for those fracking reasons you just mentioned. So at this point, 130 00:05:57.800 --> 00:06:00.920 knocking furiously on wood or whatever this desk is made of, uh, 131 00:06:00.959 --> 00:06:03.519 we don't. We're not looking for any major impacts. Obviously, 132 00:06:03.600 --> 00:06:05.639 Let's check again next week and see how we come out. 133 00:06:05.839 --> 00:06:10.240 Right. I honestly, when I saw the the futures markets 134 00:06:10.279 --> 00:06:11.720 and you indicated that are up a little bit, they 135 00:06:11.720 --> 00:06:13.639 were only down when I saw them this morning by 136 00:06:13.759 --> 00:06:16.079 zero point one point five pretty much across the board. 137 00:06:16.160 --> 00:06:21.519 So clearly this has not impacted what people's expectations are 138 00:06:21.560 --> 00:06:26.079 about the market oil notwithstanding. Do you find that puzzling 139 00:06:26.319 --> 00:06:29.240 or do you think that's like I guess market force 140 00:06:29.279 --> 00:06:31.360 has been looking at the at the globe. It's a globe. 141 00:06:31.360 --> 00:06:33.720 It's a conflict in one small regional the world airgo. 142 00:06:34.040 --> 00:06:35.800 It's not going to impact my trading. It's not going 143 00:06:35.879 --> 00:06:37.720 to impact you know, the companies that I'm invested in. 144 00:06:37.879 --> 00:06:40.360 I mean, I guess I really expected it just because 145 00:06:40.360 --> 00:06:44.959 of the bleak realities of war, that the futures will 146 00:06:45.000 --> 00:06:45.839 be down a lot more. 147 00:06:46.519 --> 00:06:48.680 Yeah, And I think I think some of this has 148 00:06:48.720 --> 00:06:51.560 to do with the idea that over the past several decades, 149 00:06:51.600 --> 00:06:54.279 the world has just gotten used to chaos. You know, 150 00:06:54.360 --> 00:06:57.800 I've mentioned this before, but I believe the eighties and 151 00:06:57.839 --> 00:07:03.319 the nineties where largely nothing thing happened, and I'm speaking comparatively. Certainly, 152 00:07:03.360 --> 00:07:05.759 lots of things happened, but comparative to the last couple 153 00:07:05.800 --> 00:07:08.639 and a half decades, then the eighties and nin ninety 154 00:07:08.759 --> 00:07:10.279 were kind of the anomaly, and I think we all 155 00:07:10.360 --> 00:07:13.040 lulled ourselves to sleep thinking that that was normal, that 156 00:07:13.120 --> 00:07:15.399 things just just just kind of hummed along and really 157 00:07:15.439 --> 00:07:19.560 nothing crazy, super crazy happened. But reality, if you look 158 00:07:19.600 --> 00:07:23.360 before that and since then, chaos has been the norm, 159 00:07:23.360 --> 00:07:25.079 and that's kind of where we are. So I do 160 00:07:25.199 --> 00:07:28.560 believe that this is another place where the never ending 161 00:07:28.639 --> 00:07:31.399 news cycle of headlines has helps a little bit because 162 00:07:31.399 --> 00:07:34.319 we're always we are bombarded with yeah, news, good, bad, 163 00:07:34.360 --> 00:07:36.319 and different whatever news news news, that's all we hear, 164 00:07:36.600 --> 00:07:38.519 so I think it kind of lessens the impact of 165 00:07:38.560 --> 00:07:40.959 all of it in the short run. But obviously we 166 00:07:41.000 --> 00:07:43.680 do have volatility, as you just mentioned. I think you 167 00:07:43.720 --> 00:07:45.000 just called me out here a little bit. When I 168 00:07:45.040 --> 00:07:47.199 first got my cup of coffee, Brian, futures were down. 169 00:07:47.680 --> 00:07:49.800 By my second cup of coffee, they were up, and 170 00:07:49.920 --> 00:07:52.199 you just pointed out they're down again, not very much, 171 00:07:52.279 --> 00:07:54.680 but when we're down a fraction of a percent. 172 00:07:54.480 --> 00:07:57.279 Yeah, tiny little bits. And again I really expected, you know, 173 00:07:57.480 --> 00:07:59.839 a couple of single digit numbers and at least some 174 00:08:00.079 --> 00:08:04.680 those markets, and I was pleasantly surprised. You know, maybe 175 00:08:04.720 --> 00:08:06.839 we can just take away something positive from this. The 176 00:08:06.879 --> 00:08:09.399 world isn't in perfect place. There's chaos going on all 177 00:08:09.439 --> 00:08:11.600 the time in the world. We just know about it 178 00:08:11.600 --> 00:08:14.000 more now because of the Internet. And look, we all 179 00:08:14.000 --> 00:08:17.439 managed to live, thrive and survive, notwithstanding in the challenges 180 00:08:18.319 --> 00:08:21.279 here and abroad. So something positive might come from this. 181 00:08:21.399 --> 00:08:25.920 Who knows. Anyway, we'll continue with Brian James, Fed keeping 182 00:08:26.000 --> 00:08:28.480 rates right where they are. I was reminded to Carter 183 00:08:28.600 --> 00:08:31.519 Pay Jimmy Carter and Paul Volker, Brian meane, we'll have 184 00:08:31.560 --> 00:08:35.000 a little conversation about that, given Trump and his arguments 185 00:08:35.039 --> 00:08:37.840 with the Fed on interest rates. A day fifteen right now, 186 00:08:37.879 --> 00:08:40.559 I fifty five gy Zeed Talk station quick mention for 187 00:08:40.679 --> 00:08:44.159 Gata Heaven Catholic Cemetery. You know, summer invites reflection and 188 00:08:44.200 --> 00:08:46.799 the Gate of Heavens mission. Warmer months meaningful time to 189 00:08:46.840 --> 00:08:49.600 walk the grounds, visit loved ones, and connect with the 190 00:08:49.639 --> 00:08:52.720 peace and purpose of Gate of Heavens mission, which is 191 00:08:52.759 --> 00:08:57.080 to affirm the sacredness of life at all times, hottering 192 00:08:57.159 --> 00:08:59.279 life on sacred ground and more than a cemetery, it's 193 00:08:59.279 --> 00:09:02.000 a sacred space where the dignity of every person is 194 00:09:02.080 --> 00:09:04.279 respected in life is on or from beginning to end. 195 00:09:04.639 --> 00:09:08.279 Such a gorgeous park like setting, its tranquil landscape, surroundings 196 00:09:08.279 --> 00:09:11.720 ideal for prayer, reflection and remembrance, of course, creating a 197 00:09:11.759 --> 00:09:14.159 comforting experience for the visitors to Gate of Heaven. And 198 00:09:14.240 --> 00:09:17.840 all are welcome at Gate of Heaven. So visit Gate 199 00:09:17.879 --> 00:09:19.480 of Heaven dot org you learn more all about it 200 00:09:19.519 --> 00:09:23.159 and maybe you would consider being buried there. Okay, Catholic Cemetery, 201 00:09:23.200 --> 00:09:25.879 you know the information Gate of Heaven dot. 202 00:09:25.679 --> 00:09:28.559 Org fifty five KRC team right. 203 00:09:28.480 --> 00:09:32.480 Now if you buy KRC the talk station Happy Monday, 204 00:09:33.159 --> 00:09:36.720 right Thomas with Money Monday's Brian James talking money issues 205 00:09:36.759 --> 00:09:39.440 and of course the ongoing battle between the Trump administration 206 00:09:39.759 --> 00:09:44.440 and the FED chair jerown pal rates. I guess it 207 00:09:44.559 --> 00:09:47.799 currently are four point two four to four point five percent, 208 00:09:48.159 --> 00:09:50.200 and he announced he's planning on leaving them there. I 209 00:09:50.200 --> 00:09:54.200 guess there's a lot of question marks floating around labor market. 210 00:09:54.480 --> 00:09:57.000 I guess is growing at what he called a solid 211 00:09:57.039 --> 00:10:01.679 pace uncertainty expressed about the impact active US tariff policies 212 00:10:01.720 --> 00:10:05.039 on inflation, and Brian, let's start there, because the whole 213 00:10:05.039 --> 00:10:06.919 world was going to come to a screeching halt. We're 214 00:10:06.960 --> 00:10:09.600 all going to die because of Trump's terariff policies. And 215 00:10:09.639 --> 00:10:11.720 I know he's sort of used it as a mechanism 216 00:10:11.720 --> 00:10:13.679 to sit down with some of the countries and negotiate 217 00:10:13.759 --> 00:10:16.879 better terms and conditions. But regardless of whether anything's been 218 00:10:16.919 --> 00:10:19.480 negotiated or agreed upon, it doesn't seem to have had 219 00:10:19.519 --> 00:10:22.480 a profound impact on our day to day lives, has it? 220 00:10:23.240 --> 00:10:25.559 No? Not really. I mean, there are those out there 221 00:10:25.600 --> 00:10:28.840 now there. I'm sure there's somebody screaming at their there 222 00:10:28.919 --> 00:10:31.759 always advice or windshield or whatever, saying hey, this hit 223 00:10:31.799 --> 00:10:33.320 me in the face last week. And I do have 224 00:10:33.360 --> 00:10:35.720 personal friends who who have had to deal with the 225 00:10:35.799 --> 00:10:38.639 China tariff specifically the own factories and things that bring 226 00:10:38.679 --> 00:10:41.759 over raw materials, and this has been an extremely stressful 227 00:10:41.799 --> 00:10:44.759 time for those folks, so certainly don't mean to imply 228 00:10:44.840 --> 00:10:46.360 that it's not out there. However, I think what you're 229 00:10:46.360 --> 00:10:49.480 saying is this has not changed the daily routine and 230 00:10:49.519 --> 00:10:51.440 the lifestyle of the average American and I can and 231 00:10:51.480 --> 00:10:53.279 I can vouch for that myself. I sit down with 232 00:10:53.320 --> 00:10:55.320 average Americans every single day at this table when we 233 00:10:55.360 --> 00:10:59.000 do financial planning, and the only real concerns I hear 234 00:10:59.320 --> 00:11:02.080 is just general complaints about the price of things in general, 235 00:11:02.600 --> 00:11:05.159 not so much that somebody has had to absolutely change, 236 00:11:05.240 --> 00:11:07.960 you know, what they what they what they're doing. And 237 00:11:08.000 --> 00:11:10.679 I think this that's why we're still seeing the you 238 00:11:10.679 --> 00:11:12.919 know we were talking about earlier. Even the crazy headlines 239 00:11:12.919 --> 00:11:15.639 have not impacted the market. The market is actually almost 240 00:11:15.720 --> 00:11:17.519 up to an all time high again. We of course 241 00:11:17.559 --> 00:11:20.120 gave back a little bit obviously with when the strikes 242 00:11:20.320 --> 00:11:23.679 became news last week, but at this point we're not 243 00:11:23.919 --> 00:11:27.720 so much concerned about yet about having to change how 244 00:11:27.759 --> 00:11:30.240 we do things. That would be coming through if if 245 00:11:30.279 --> 00:11:32.600 consumers were changing their thinking, then that would be coming 246 00:11:32.600 --> 00:11:35.480 through in the markets rather quickly. However, consumer spending came 247 00:11:35.519 --> 00:11:38.399 out okay in the most recent report. Remains to be seen, 248 00:11:38.440 --> 00:11:40.799 of course, what comes in the following months. But at 249 00:11:40.799 --> 00:11:43.840 this point, knock on wood, we're not it's not looking 250 00:11:43.919 --> 00:11:44.759 so scary out there. 251 00:11:44.919 --> 00:11:47.200 Well, and you know, I'm old enough to remember how 252 00:11:47.240 --> 00:11:50.559 bad things used to be. I mean, four point five percent, 253 00:11:50.720 --> 00:11:53.600 it's a lot compared to where it was before. But 254 00:11:53.879 --> 00:11:56.399 it isn't eighteen or whatever percent it was back in 255 00:11:56.440 --> 00:11:59.039 the Carter days when he was screaming at Paul Volker about, 256 00:11:59.279 --> 00:12:02.799 you know, lowering the interest rates. We had stagflation going on. 257 00:12:02.919 --> 00:12:05.320 That it was a very complicated situation. 258 00:12:06.440 --> 00:12:08.399 Yeah. Now, now again, I always want to be fair 259 00:12:08.440 --> 00:12:10.919 to people who aren't in your and my fortunate situation 260 00:12:11.039 --> 00:12:13.799 of having ridiculously low mortgage rates. I would not want 261 00:12:13.840 --> 00:12:16.679 to be buying a house right now, not necessarily because 262 00:12:16.720 --> 00:12:18.759 of the interest rates. You're right, that's a relatively short 263 00:12:18.799 --> 00:12:22.559 term thing. And historically speaking, a six seven percent mortgage 264 00:12:22.600 --> 00:12:24.639 is still low over the last century. That is still 265 00:12:24.639 --> 00:12:28.000 a low mortgage rate relatively speaking. It's the purchase price, Brian, 266 00:12:28.480 --> 00:12:30.639 that's the part. When you couple that with the interest rate, 267 00:12:30.679 --> 00:12:33.360 it just makes it unattainable, and that's what's making it 268 00:12:33.440 --> 00:12:35.879 really hard, you know, for our kids, yours and mine 269 00:12:36.159 --> 00:12:38.480 or at that age to really pull the trigger there. 270 00:12:38.519 --> 00:12:40.840 So people want to see those rates come down. The 271 00:12:40.879 --> 00:12:44.360 President certainly does, but Jerome Palell is not convinced yet 272 00:12:44.360 --> 00:12:46.840 that if he does that, we won't quickly quickly quickly 273 00:12:46.840 --> 00:12:47.480 see inflation. 274 00:12:47.840 --> 00:12:50.279 Any tea leaf reading on the housing market, you're right, 275 00:12:50.360 --> 00:12:53.759 houses are outrageously expensive, and of course that came on 276 00:12:53.799 --> 00:12:55.720 the heels of COVID nineteen when every man, woman and 277 00:12:55.840 --> 00:12:58.240 child would realize they could work remotely and then started 278 00:12:58.240 --> 00:13:00.639 buying up properties in the four corners the United States 279 00:13:00.679 --> 00:13:04.039 of America as they fled California, New York. But California 280 00:13:04.039 --> 00:13:07.840 New York real estates still outrageously high. And I just 281 00:13:07.879 --> 00:13:10.759 don't see an end in sight on this. There's not 282 00:13:10.840 --> 00:13:15.200 a big, at least from my impression, a big build 283 00:13:15.320 --> 00:13:17.480 up of builders out there in the world that are 284 00:13:17.480 --> 00:13:20.440 building what you and I might call affordable homes or 285 00:13:20.440 --> 00:13:23.200 more affordable homes. So as long as the market is 286 00:13:23.240 --> 00:13:25.600 what it is and they keep building these large, you know, 287 00:13:25.679 --> 00:13:28.360 eight nine hundred thousand dollars homes, there's not going to 288 00:13:28.440 --> 00:13:31.240 be any way to solve this problem for the younger folks. 289 00:13:31.559 --> 00:13:33.679 Yeah, and it's it's really it's the affordability that you 290 00:13:33.720 --> 00:13:36.080 mentioned there that that's really not where the builders are. 291 00:13:36.120 --> 00:13:38.320 There's plenty of building going on, that's that's not the 292 00:13:38.519 --> 00:13:40.000 you know, that's not the issue. There's I'm up here 293 00:13:40.039 --> 00:13:42.279 in Liberty Township and we've lost a few more cornfields 294 00:13:42.320 --> 00:13:43.679 here over the last month and a half or so. 295 00:13:43.840 --> 00:13:47.919 Sure you had happening, but but yeah, numbers wise, housing 296 00:13:47.960 --> 00:13:51.039 starts are down about ten percent, building permits dropped about 297 00:13:51.039 --> 00:13:54.159 two percent. So these are very recent numbers here. So 298 00:13:54.240 --> 00:13:56.559 that suggests that the that the market's going to see, 299 00:13:56.600 --> 00:13:58.840 you know, not a whole lot of upside in the 300 00:13:58.879 --> 00:14:00.960 months ahead, but that does I don't think it's lack 301 00:14:01.000 --> 00:14:02.639 of upside we're looking for. I think we're looking for 302 00:14:03.399 --> 00:14:06.600 downside for like you said, for affordable housing. Affordable housing 303 00:14:06.639 --> 00:14:09.759 doesn't mean that we build a small house and price 304 00:14:09.799 --> 00:14:12.120 it where it is right now, they're currently unaffordable. We 305 00:14:12.159 --> 00:14:14.120 need to find a way for younger people to get 306 00:14:14.120 --> 00:14:16.759 a foothold so that they can start their lives, start 307 00:14:16.799 --> 00:14:19.919 their families, and begin to grow forward. Because that's ultimately 308 00:14:19.960 --> 00:14:22.120 what's going to drive the economy over the next several decades, 309 00:14:22.440 --> 00:14:25.720 not you and me buying, you know, a nice house 310 00:14:26.000 --> 00:14:27.000 to retire into. 311 00:14:27.679 --> 00:14:31.039 Yeah, you know what really bothers me. It's almost like 312 00:14:31.080 --> 00:14:33.600 the answer to the problem is some sort of you know, 313 00:14:33.799 --> 00:14:37.039 massive recession come depression kind of thing in order to 314 00:14:37.080 --> 00:14:40.279 force the prices down would be catastrophic. 315 00:14:40.000 --> 00:14:41.799 Of course. Yeah, and that's you know, we're certainly not 316 00:14:41.919 --> 00:14:44.679 rooting for that neither, right, We're rooting for more of 317 00:14:44.679 --> 00:14:47.159 this soft landing stuff. Remember in three years ago or so, 318 00:14:47.279 --> 00:14:49.720 and when soft landing was kind of the best outcome 319 00:14:49.759 --> 00:14:51.919 anybody could ever think of. Yeah, we never had that 320 00:14:51.960 --> 00:14:53.919 soft landing. We just kind of stopped talking about it, 321 00:14:53.919 --> 00:14:55.759 which I think is what a soft landing is. 322 00:14:56.039 --> 00:14:58.360 I think you're right, we just got used to it. 323 00:14:58.360 --> 00:15:01.720 Although the norm is not good for America's younger folks 324 00:15:01.720 --> 00:15:04.279 who are looking to start out and you know, invest 325 00:15:04.320 --> 00:15:06.080 in a home and at least get some equity build 326 00:15:06.120 --> 00:15:07.759 up as opposed to just paying rent the rest of 327 00:15:07.799 --> 00:15:11.200 their lives. Rian James. The bad news coming up next, 328 00:15:11.200 --> 00:15:14.679 Not that this always rosy news, but yeah, the reports 329 00:15:14.679 --> 00:15:18.720 out social Security. The timeline's not looking good. One more 330 00:15:18.799 --> 00:15:21.039 with Brian James from all with financially. 331 00:15:20.679 --> 00:15:22.879 Right back fifty five KRC. 332 00:15:23.559 --> 00:15:26.000 Hey, if you're listening to me right now, and we 333 00:15:26.039 --> 00:15:28.440 may as well get everybody the cold, hard bad news. 334 00:15:28.480 --> 00:15:32.039 The Social Security Administration's got new trust fund depletion dates. 335 00:15:32.559 --> 00:15:35.679 I saw the Wall Street Journal article published on the 336 00:15:35.759 --> 00:15:40.440 nineteenth of June. Social Security ICEBERG gets closer. Official trustees 337 00:15:40.480 --> 00:15:42.639 now estimate the need for a twenty three percent cut 338 00:15:42.639 --> 00:15:46.279 and benefits plus eleven percent to Medicare in eight years. 339 00:15:47.320 --> 00:15:50.080 You know, our elected officials can ignore the problems that 340 00:15:50.080 --> 00:15:52.519 we're facing all day long, and they have been for years. 341 00:15:52.519 --> 00:15:54.279 I mean, you and I have talked about this before 342 00:15:54.320 --> 00:15:56.919 as a topic. It's been a generally running topic of 343 00:15:57.000 --> 00:16:01.120 conversation for decades in terms of the direction social Security 344 00:16:01.200 --> 00:16:03.240 was going. And it seems like the day of wrecking 345 00:16:03.320 --> 00:16:06.159 is now coming a lot sooner than anybody really projected. 346 00:16:06.240 --> 00:16:09.240 We're looking at insolvency in twenty thirty three. 347 00:16:09.960 --> 00:16:12.399 Yeah, here's the thing. I want to make sure everybody 348 00:16:12.440 --> 00:16:16.559 knows that insolvency does not does not And I want 349 00:16:16.559 --> 00:16:18.519 to stamp my feet and say this does not mean 350 00:16:18.559 --> 00:16:21.840 there will not be a Social Security check right now, 351 00:16:21.919 --> 00:16:25.360 there is more money flowing into the Social Security system 352 00:16:25.440 --> 00:16:27.879 than flows out. That's the surplus. It's not a pile 353 00:16:27.919 --> 00:16:30.080 of money that slowly graining to zero over here of 354 00:16:30.120 --> 00:16:31.960 eight years. Next time you get paid, look at the 355 00:16:31.960 --> 00:16:33.480 top half of your pay stub. Look at that fight 356 00:16:33.480 --> 00:16:36.120 a line. That is what you are paying for Social Security. 357 00:16:36.320 --> 00:16:39.000 The only way that the fund will completely go away 358 00:16:39.279 --> 00:16:41.240 is if that fight a line comes off of your 359 00:16:41.240 --> 00:16:43.240 pay stub. Now, there's those out there who would very 360 00:16:43.279 --> 00:16:45.360 much want the whole system to go away and for 361 00:16:45.440 --> 00:16:48.080 taxes to just not be a thing. That isn't realistic. 362 00:16:48.080 --> 00:16:49.759 We're going to have an awful lot of people wandering 363 00:16:49.799 --> 00:16:53.320 the streets in their golden years. That ain't happening. So 364 00:16:53.399 --> 00:16:55.679 FICA taxes will be there, we will be paying them, 365 00:16:55.720 --> 00:16:59.519 and Social Security will be distributing income as it always has. 366 00:16:59.799 --> 00:17:01.600 So what does it actually mean though? So this is 367 00:17:01.639 --> 00:17:04.119 what what Brian would you just said? So benefits at 368 00:17:04.119 --> 00:17:08.559 this point are estimated. If nothing changes, then the inflows 369 00:17:08.640 --> 00:17:11.759 that the socicurity system will receive from those pay stubs 370 00:17:12.279 --> 00:17:16.680 will only cover about seventy seven percent of the pre 371 00:17:16.960 --> 00:17:20.200 crisis of Social Security benefits. So simply means that you, 372 00:17:20.440 --> 00:17:22.440 whatever your report says, if you're trying to do your 373 00:17:22.480 --> 00:17:25.160 own financial planning, look at your financial report that you 374 00:17:25.200 --> 00:17:28.440 can pull off of SSA dot Gov or my Social 375 00:17:28.519 --> 00:17:31.960 Security report. Take that number for full retirement age, which 376 00:17:32.039 --> 00:17:34.240 is going to be somewhere between sixty six and sixty seven. 377 00:17:34.319 --> 00:17:36.799 That's the dollar amount you're supposed to receive every every 378 00:17:36.880 --> 00:17:40.079 year or every month, and knock about twenty to thirty 379 00:17:40.079 --> 00:17:42.079 percent off of it. As we're sitting here right now, 380 00:17:42.160 --> 00:17:44.319 that is the direct impact that we will see unless 381 00:17:44.319 --> 00:17:46.000 something changes over the next eight years. 382 00:17:46.160 --> 00:17:48.039 Well, do you think this would change the direction of 383 00:17:48.039 --> 00:17:50.799 people's behavior in terms of their planning for their own 384 00:17:50.839 --> 00:17:53.640 financial future. It certainly sends a warning shot over about 385 00:17:53.839 --> 00:17:56.759 folks who are relying on so secure like, oh my god, 386 00:17:56.799 --> 00:17:58.599 I'm gonna have to deal with twenty five percent less 387 00:17:58.680 --> 00:18:01.039 or whatever. But if you're young enough, we can start 388 00:18:01.079 --> 00:18:03.839 planning for your future. You can get around this problem 389 00:18:03.880 --> 00:18:04.480 that's looming. 390 00:18:05.559 --> 00:18:07.599 Absolutely. But then, and the answer to that is the 391 00:18:07.599 --> 00:18:09.759 same as if there weren't a problem. Save and save 392 00:18:09.839 --> 00:18:11.680 a lot of money. You know, you want to be 393 00:18:11.680 --> 00:18:15.599 in control of your future anyway, regardless of social securities issues. 394 00:18:15.640 --> 00:18:17.240 You still want to be able to call your shot 395 00:18:17.519 --> 00:18:20.240 So the answer is, make sure you're saving and saving 396 00:18:20.240 --> 00:18:22.519 a good chunk, invest aggressively, don't make a mess of 397 00:18:22.519 --> 00:18:25.119 your credit. Do those things for thirty thirty, thirty or 398 00:18:25.160 --> 00:18:27.799 so years if when you're just getting started, and you'll 399 00:18:27.839 --> 00:18:30.559 be okay in the long run. Now that said, there's 400 00:18:30.599 --> 00:18:32.799 a lot of things that could change. Something has to 401 00:18:32.839 --> 00:18:36.319