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I'm listening your I are powered by fifty five KRSS the talk station Ato six On a Monday, and a happy one to you, Brian Thomas. Always looking forward to this time we get to talk about money matters with all Worth Financials.
Brian James.
It is time for money Monday, Brian, Welcome back to the Morning Show and happy Monday to you, sir.
Good morning, mister Thomas, and back at you, sir.
Looking at the headlines of the Wall Street General futures up just slightly, but across the board in the Green I guess the situation in the war with Israel and Iran not impacting the markets too much. I guess since Israel's dominating Iranian airspace and knocking off targets one by one, it looks like that's not going to blow up to World War three or something. But at least the markets aren't reacting to it.
Yeah, the market seems to be taking it in stride. Futures right now are up about anywhere from a half to one percent, depending on which one you're looking at. Friday, when this all kind of blew up, we had about a one to one point seven percent drop in the various market in disease, which that's to be expected because the market, as we always talk about, the market doesn't like unknown stuff. We don't like the unexpected, and we
certainly don't want wars period, end of story. But at the end of the day, the world does keep on turning in the face of war, even if you look at and I don't want to go down this path at all, but just to give a little bit of historical context, and again not implying that this is happening, but even World War two, most of the years of World War two were positive.
With regard to the stock market. We don't want any of this.
But if you're sitting there going thinking, well, I can't do any about the war anyway, so I'm going to worry about the stuff that they do control, which is my own situation. There's nothing going on right now that should cause you to rush to the computer or rush to the phone, to dump everything you have or put it all in gold or any of that kind of stuff.
It's just more painful. You know.
Let's focus more on the human sacrifice that's occurring than the financial because that's not really happening anyway. Oil prices are moving around as would be expected. We did see a surge from sixty eight bucks to seventy eight dollars a barrel right after the real structor ins nuclear facilities, but then settled back down to about seventy two. You know, headlines do fuel this volatility, but history shows us that that these disruptions, for these smaller conflicts are typically pretty
short lived. Markets are pretty have been pretty resilient, So let's not rush any conclusions.
Fair enough on that. And I guess the military industrial complex is always something you put your money in.
Yeah, raytheon.
You know, it's like maybe that's one of the reasons the markets were stable in World War two, because everybody was churning out military hardware.
Yeah, and I wouldn't say stable, I just mean not down for four years straight of you know, of a world war. And the reason for that is because generally speaking, anything that happens that surprises the world will eventually become a catalyst. The catalyst in World War two was, as you just mentioned, we became a military industrial complex. General Motors started making tanks instead of cars, and the rubber company started sending rubber overseas to the you know, to support the military.
The end of the day, there's still money moving around.
There are still consumers who become the government and the military, and there are still producers, so the money still flows.
So that's what keeps economies afloat.
And I would even throw out, you know, not that long ago with COVID in early twenty twenty. COVID made us all think the world was going to end. And if you look at what the stock market did between February and March of twenty twenty, it went off a cliff, But we don't remember that because we were all learning that we needed to go live in our houses and not come out for a while, and that was scarier
than looking at financial statements. So by the time the dust settled on the market panic, then it had become a catalyst. That's where Zoom came from. Nobody had really heard of zoom much before. We all had to go home and learn how to use it. But now it's part of our lives and I know that, and I've said this on these airwaves before, you know, we all worth itself had to make sure that all of our advisors were able to communicate with clients. We needed similar
desks setups at home. That means I have you know, I have a couple extra monitors, and you know, all of our employees are able to do that. And we're obviously not the only company that did that. I know, iHeart had to do the same thing as well. So anything that causes a curveball usually becomes a catalyst for somebody. Somebody's going to take advantage of the opportunity to make some money. And that's kind of what we're seeing right now.
Yeah.
Well, it's like artificial intelligence is changing the world as well, and we're all just going to have to roll with it and figure out where we are going to be in the you know, with with with this new concept and this new technology, it's going to change the world. Some people are going to lose jobs and others are going to be fine and safe and they're in I don't know, the impact is going to be far ranging.
But we tend to adapt, right, I mean, isn't that the point We tend to adapt regardless of circumstances.
Yeah, think of it as an opportunity.
If if you are super close to something that that AI that you feel like AI could easily replace you, then it might be whove you to figure out how to use it in your environment to at least stave off what may be inevitable. But at the same time, yeah, these it's going to be an opportunity for somebody. So if you're if you're if you're again just off to the side worrying about AI changing things, well, then look look for what the opportunity is going to create. Where
is it going to drive industry? And you can look at any period in the last couple decades and figure out what the catalyst was. Goes back, you know, going, I'm just going back to you know, twenty five years to when the Internet first became a thing and Yahoo and America Online were the big things. Well, that changed everything that we did. Then it became for a while it was real estate, and then that ran us to
two thousand and eight. We ran that into the ground, and then it became mobility, mobile devices, so on and so forth. Everything is a catalyst. It creates an opportunity. Don't always look at everything as the end of something. Look at it as the beginning of something as well.
Well, I understand that in terms of market we're going to get the US retail sales figures out.
Is that tomorrow?
Yeah, so big announcements said that that's coming tomorrow. But the highlight of the week is gonna be the Federal Reserve meeting we've got coming up on June seventeenth, eighteenth. This is where char Powell comes out and tells us whether he wants higher, lower interest rates, or no change at all. But yes, we've got a number of reports coming out this week that will help us with that.
So we've had some recent soft inflation prints. That's a good thing we want that, meaning that, you know, a soft inflation print simply means that we were not looking at inflation. We're looking at it in a relatively benign man That has not, however, fundamentally altered what the Fed thinks. And there are there are actually a couple Fed governors out there who are advocating for no rate cuts at all this year. But overall, the stands from the Fed
seems to be we really want to cut rates. It's not happening this week, but we do want to drop rates a little bit by the end of the year. So hopefully we'll stay on that pattern. We'll find out more later this week.
Well, I mean, I think most people want the rate cut just because it's going to mean lower mortgage rates. That's typically the one ripple effect that we all feel, plus the amount of money we pay on our treasury bills. Lower is better because we of course continue to borrow and borrow and borrow and have to pay off at a higher interest rate. So a lot of reasons to
want it. What's going through the Fed's mind and so far as them not cutting rates because you know, inflation has been comfortable at what two to two point three percent last several reports, which is about where they want it. Are they afraid that it's just going to go through the roof again?
Well, yeah, they're afraid of setting up, you know, lighting that fuse because it can go quickly. As you just mentioned, there are plenty of people out there who really, really super want rate cuts. And the definition of that is anybody who bought a new house in the last three years and had to get a mortgage against it. Yeah, because they're paying six to seven percent. But the Federal Reserve is still looking at it won't take much to pop this off again, because there's enough unrest and enough
crazy in the world. I mean, look at what we just got done talking about there's conflict in the world that will directly impact oil prices, and it is a little bit, you know, not to the point where we have to be alarmed yet, but at the same time, that's something that obviously will drive inflation. If we have this conflict spreads and we wind up with inflation in oil prices, that's going to trickle through to everything else and compound what has already been going on for five
years as a result of the COVID pandemic. So yes, the Federal Reserve is super, super, super cautious. When they say they want two percent, they want two. They don't want two point three, they don't want two in a quarter, they want two percent inflation. If we're not there, then their concern is anything we do to possibly trigger it to go the wrong direction is dangerous.
Okay, help me understand this.
I would think that higher prices and of course everything's connected to oil.
I mean stating the obvious.
Everything we buy has been shipped somewhere through a semi tractor trailer or or something else. So we're enjoying you know, I saw the sign on the door Kroger over the weekend. You know, if one thousand products lower prices, and maybe the result of the reason we've getting we're getting lower prices at the grocery store because it's causing Kroger less money to ship things. That suggests more consumption. I mean, the prices are lower, aren't people engaged in more economic activity?
I mean, I don't know. I'm just trying to walk through this. How this impacts in the inflation rate?
Well, I think, but I think we're all on edge a little bit, right because because not just the FED is concerned about the current economic situation, it's just people in general. So you know, I think Kroger is somewhat taking advantage of that and any anything, anytime you can shine a light on, hey, we are working to reduce prices. I've never I saw one of those banners yesterday for the first time. I assume they're on all the Kroger's
out there. But I think you can figure out right away, you know, that they haven't found a way to suddenly produce everything they do, you know, cheaper. They just perhaps have found an opportunity here and there to lower some prices, and they're gonna shine a bright light on that. Maybe they do that all the time, but they don't hang
banners on the building. The banners, to me, are a different approach, right, So that just tells me that they that they're they're they're looking at their customer base, which is all of us, and they're saying that, you know what, these people are really really super hypersensitive to inflation right now. So any any positive step we can take, let's shine
a very bright light on it. They've probably cut prices like this in the past, but haven't hung the banners or done the commercials because it wasn't a focus of the buying public.
Well now it is.
Yeah, and I think we're all painfully aware of how much more food and groceries costs, generally speaking, in over the last several years. I mean, we still it just boggles my mind because I go grocery shopping with my wife every single weekend and I'm still just amazed at the cost of like, for example, beef.
It's just like, are you kidding me?
So anyhow, maybe it's just a marketing thing going on at Kroger's. Let's pausitive, bring Brian you back. I want to mention doctor Fred Pack saw doctor Pack last Friday had my semi annual cleaning.
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Twenty and fifty five KRCV talk station Talking Money Matters. Brian James, Smallworth Financial. It is money Monday. I but back to the FED cutting or not, as the case may be, the interest rate. I know you seem to suggest that it's unlikely that it's going to happen, and I understand your point behind that. Clearly, it's not going to be a point. I know Donald Trump was screaming
about them cutting the rates a full point. I mean, if there's any cuts, I mean we're probably talking like maybe a quarter, right.
Yeah there, if we're lucky at that.
So so right now, there's a handful of people out there who believe there might be a modest cup, but I think I think those people aren't talking about this or this week's meeting. They're talking about the next move will be down. We just don't know when it is, so that is generally accepted. There's not a whole lot going out there with trigger the opposite. So I don't think that's exactly worth shattering to say. But the vast majority of folks, though, I really don't believe that that's
coming anytime soon. And whenever we've got scary headlines that's going to cause everybody to pause. And there's certainly enough going on in the Middle East right now that's going to make everybody say, you know, let's take a breath and just kind of watch and see what comes of this.
Then we'll make decisions. So if we were at.
A full two percent, like like the FED truly truly really wants, then we might be having a different conversation. But I think we're close enough now that I think the risk that they sort of perceived that the risk is in screwing out the progress as that has been made, not so much in being a little late for that final couple of rate cuts fair.
Enough, and with regard to the oil, what priceures are up merely because of what might happen in the Middle East? More broadly speaking, I mean, there are a bunch of OPEC nations. We all know where that oil comes from, and because they're in the area of the ConFlat between Israel and Iran? Is that it because the amount of oil that's in the market hasn't changed, has it because Irani and oil I thought that were subject to sanction,
not supposed to be able to sell it. So even if you took Iran completely offline, would that have an impact on supplies globally?
I mean, and anything's going to impact, right, you've changed any of the pipelines there, any of the permissions that you know of who gets to work with whom, then yeah, that's going to have an impact. But I think that the larger issue is that people aren't focused on it as much. I mean, think about this. We oil prices have been really have really been benign. And what I'm really talking about is the price at the pump. Yeah, because that's the first thing we all see, right, that's
right in your face. At least once a week, you have to.
Look at it. You are required to look at it.
Versus if I grab a loaf of bread off the shelf, I'm not necessarily going to look at the price tag there, but we all see gas prices immediately. That has been pretty benign, and frankly it's the last couple of years. This wasn't an issue last year. This is usually the time of year where politicians point across the aisle from whichever side and blaim the opposite side for whatever's going
on at the gas pump. Right now, there's nothing going on at the gas pump, so nobody's really talking about it. And I think our past history of looking at the Middle East as the only area that can swing oil prices in one way or another, it doesn't have the same impact that it used to.
And I'm not diminishing it.
It's certainly the biggest, the biggest organization in the world, with Opak and all those countries out there, but with the progress that has been made in fracking in the United States, US is one of the largest producers of oil now, so we're able to moderate that as now that we are a bigger participating producer in that oil market, So those smaller regional conflicts don't have the huge impact that they used to.
Still big, but not as big.
Well.
In Canada also fracts as well, I mean, it's amazing what fracking has done, and it's amazing when you talk about it along those lines. The United States is now the biggest oil producer. I mean, I live most of my life through the whole idea that we've reached peak oil and that we no longer have and it's a diminishing supply. The vast majority of the concept of diminishing supply was brought about by well reg and just simply outright refusal to allow us to drill on our own land.
I mean, yeah, it used to be. I think. No, I'm no oil expert.
But my understanding and my tiny monkey brain here of how I understand this is that when when I grew up, I believe that the oil existed as giant lakes and holes in the ground, and it was just a pure, big puddle of oil, and we sucked it all out. Yeah, now and so and so that was the concern. Those pockets were going away, we were going to deplete them.
But then you know, as as soon as we figured that out, then once we figured fracking out, now we can suck it out of the cracks a little more efficiently. And if you read the stories of how fracking came to be. There's one guy behind all of it who didn't make an extra nickel for coming up with this idea. But in any case, the originally had to pump chemicals
down into the ground to flush this stuff out. Then they had to process it and get those chemicals back out, and then they tried to decided to try, well, let's just do this with water because it's cheaper, and so that was a cheaper process and a better process. Then they found a way to do it without any extra So progress and technology always are moving us forward, and that has literally changed what we know as the oil.
Markets amen to that and the Malthusians out there. We were able to create more food through use of technology and advancement in fertilizers and things of that nature too. So technology does play an amazing role in shifting the reality is of what people claim is an absolute crisis at any given moment. Brian James, I understand more people are claiming social security. Getting back over to your role in helping folks plan for retirement. We'll talk about that
coming up one more with Brian James and Money Monday. First, some pleasant words for Gate of Heaven cemetery, and it is a beautiful place. I think we all need an opportunity to unwind. And it's more than a cemetery. It's a sacred space where the dignity of every person's respected life is honored from beginning to end. And it's tranquil landscape surroundings ideal for prayer, contemplation, reflection, meditation and remembrance, creating a comforting experience for all visitors. And it is
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A twenty nine on a Monday one more segment here with money mondays Brian James.
Yeah.
My initial reaction to the topic more people claiming security is like, well, that makes sense because the baby boomers are all reaching retirement age. But the key point I think in this whole article is now people are claiming it earlier than the retirement age, because you and I both have talked about this many times, and anybody who's paid attention interestingly enough, Brian, I got my you know, the Social Security note you get which tells you what
you should anticipate at retirement age. And you know if you wait longer, the amount of money you can get if you delay it till like seventy two, increases pretty substantially. But notwithstanding that, more people are taking it earlier.
Yeah, quick correction there, it's not seventy two, it's seventy is the.
Oldest seventy I'm sorry, Yeah, thank you, appreciate it here for job security for me.
Thank you, sir. Put food on my table for a while. One more night anyway. Yeah, So this article comes from the San Francisco Chronicle. Obviously, social Security is a federal ban it meaning it applies to everybody, but the San Francisco Chronicles w one who did the homework this time around. They looked at a period from October to April and saw a thirteen percent year over year increase in claims. Many of those individuals are opting to claim benefits before
having reached full retirement age of sixty seven. So full retirement age is sixty six to sixty seven, depending on the month and.
Year in which you were born.
But their point is most people are a lot more people are claiming it a little bit earlier. Now, the interesting thing that caught my eye on this is the timing. So from October to April, think about what has happened. Then then that the during that time period we got the most rhetoric we've ever gotten out of DC about
potential changes to Social Security. So my uneducated opinion, which comes from sitting at this table doing financial planning and answering questions basically all day every day, is that a lot of people out there went, you know what, social Security has a hole in the bucket. It doesn't work anyway. They I'm sure they're going to be changing it at some point soon. So people decided have decided to turn
on this bigot a little earlier. Again, I can verify that with conversations with my clients themselves, you know, and we always run a financial plan to see is it going to hurt them to sacrifice that eight percent increase that you get if you don't, and in a lot of cases they've decided, you know, what, the heck with a bird in the hand versus two in the bush, I'd rather turn on this bigot now than take the risk.
I am not yet jumping up and down telling people you need to go do this now because they're going.
To take it away. That's not going to happen anyway.
I still feel like there's going to be time to figure out what changes might might be coming. So not quite a crisis. But again, it is interesting to say that more people are willing to fire file earlier than their been in the past.
Well, and the panic that people have as a consequence of something happening to social Security, I mean, I get that. I think it's a big royal scam. We've all been led to believe that we're going to be comfortable in our retirements thanks to the government and our paying into
social Security across our entire lives. But that leads people into a false sense of security, and it sort of suggests that you don't need to prepare for your own retirement independent of Social Security, and that's where your job comes in. But I mean I talk about panic in the streets. If social Security went away, how many people would be rioting?
Yeah, And that's why I'm really not worried about about that happening, because at the end of the day, we still live in a republic where where everybody who makes the decisions that impacts people's daily lives. Those folks have to run for reelection at least every two years, sometimes six years, depending on what you're talking about. But so I still have to assume that if they decide to punch the voting public in the face, they are realizing that they could be ending their political careers.
Maybe that's their intent.
Who knows, Maybe they just want to get their shots in and move away based off of their you know, their political belief I don't think that's gonna be the case, though pretty lucrative to be a congressional leader here. So I'm not overly concerned that we are going to have an environment where there is no social security because that is the one of the largest chunks of our population. We have an aging population, so the people who are receiving those dollars in real time are the ones who
are going to get out there and vote. Because they're paying attention, you can probably do more damage to the younger generations. Unfortunately, that's not a good thing. But I think that if we have to sacrifice something, it's probably going to lean that direction. However, realistically, I think we're going to eventually we're going to realize that, hey, this just doesn't work. We can get away with it a few more years. Right, we're not in dire straits yet.
But if nothing else is done, then the only change that needs to be made is benefits need to be reduced by about thirty percent, which is a chunk, don't get me wrong. However, it's not one hundred percent. That's the tweet you see, that's the headline. Social Security is going bankrupt. No, that's not the case. There is simply in about seven or eight years, there will be less coming in than is going out. That's the issue. But
that doesn't mean there'll be nothing coming in. I guarantee you your paycheck will still have a fight a line on it in twenty thirty three. You'll still be paying
payroll taxes. Yes, indeed. But you know, the panic and concern over it might end up getting more people to start preparing for their own retirement on using their own means and allocating more of their salary to a retirement program and investing it so they have something they can independently have in their corner when they get to retirement age. Oh yeah, no, hopefully, I hope so, I hope that will be the reaction. And social security was never intended
to be. It's not comfortable retirement security. It's social security meaning a way to put a meal on the table. That's really all it was ever intended to be. It's now become something that can supplement a comfortable retirement and make it even more comfortable. And it's got a different role than it did it originally had when it came out, that's for sure.
Well in the world when so security was created, there are a whole lot more pensions out there with the employers providing that independent means of money in senior years, and those have all gone the way of the DoD or at least the vast majority of them have anyway.
Brian James, always a wonderful conversation. Appreciate all with Financial loading you out every Monday for a few segments, and I'll look forward to another edition of Money Monday next Monday, have a great week, have a good week, stay in the air conditioning amen. Stick around folks at the Cyphony VA with some information for my veteran friends out there. In the meantime, though, I want you to get in touch with Suzette Low's Camp at Cross Country Mortgage speaking
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