This is the sound going to restore law and order of America. Returning to factory settings. Fifty five krc P Talkstation eight o five, the fifty five KRCD talk station. It is that time of week. We talked money, money Monday with Brian.
James from Allworth Financial.
Got some good topic to talk about and of course number one on the list there tariffs, tariffs, tariffs. Brian James, welcome back to the morning show. It's always good having you on the program.
Yeah, and it's always good to be here with you. And it's always good to have a batch of headlines from the weekend to discust, don't we.
Isn't that the truth? And were talking about gross domestic product and four point twenty five to four point five percent in terms of the FED and its rates, and sadly the third topic really is so concerning to me. Young families can't able, it can't afford to buy a home. But let's dive onto the terroriffs. And if you look at the White House dot gov fact sheet in case people aren't really aware of exactly why Donald Trump with tariffs on Canada and Mexico and China. He cited fentanyl
and the borders, the illegal immigration. Those are the two main things that he is he's promoting these tariffs for. He's, you know, shut down the borders or help us with border security and quit shipping fentanyl into our country, declaring a national emergency based on that under the International Emergency
Economic Powers Act. I guess I have to ask out loud, not knowing really anything about the International Emergency Economic Powers Act, is this something that could be subject to legal charge or illegal action or Congress could step in and take them away.
I really, I really don't know that. I'll stay out loud. Brian, Yeah, I.
Know, And I think that there's a lot of us who aren't clear exactly on what the what the legal implifications are of these decisions, because sometimes we hear that decision was made and executive order was issued, and somebody else will say, wait a minute, that's completely illegal. In some cases they've been declared unconstitutional. But nobody has stepped up and actually on any of those perceptions of these executive orders. So this is a president we've seen before.
Obviously we know he's willing to push the envelope. He certainly is this time around, with kind of nothing to lose, as a basically a lame duck under current rules because he can't run for election again. So yeah, that's what we've been seeing. And everything has come fast and furious sins inauguration.
Well, and it's going to be across the board. I don't know how anybody can say that this will not have an in fact on prices. I mean, you're raising you're putting tariffs on these goods. I think necessarily the price is going to be passed along to the consumer. And it's a huge swath of goods. I got a kick out of some of the ones that the Wall
Street Journal identified, like cherry tomatoes, Tanka trucks. They mentioned this specifically because they're all made in China, but they also pointed out that more than eighty percent of toys sold in the United States are made in China. Maple syrup, you know, tap your own maple trees in the backyard like we did, I guess, tequila, avocados, smartphones from China subject to a ten percent increase in tiffin in the last one. I really got a kick out of sledgehammers
made in China. Sledge hammers are already subject to a twenty five percent import tax. Although we do have some sledgehammer manufacturers here in the United States, but it goes way beyond those ones that were identified.
It does. Now hold on one second while I check sledge hammer futures.
Yeah, yeah, let's do that.
But I think know that that's that is a fascinating list, and you'll you and I could go find another article right now that'll have twenty seven other products that you didn't just mention. So I think that's that. This this is what what you know, what we've been calling it. You know, over the weekend you're starting to hear the words trade war. Other countries are now calling it a trade war. So this, this is very much so the
president delivering on the promises that he made. Now, one thing he didn't seem to have mentioned until now is that, oh, by the way, this is going to cost us. As you were hinting, prices are going to go up. There's no way to avoid that. Over the weekend he said, yeah, price must be paid, but the end result will be all worse that but but there could be some pain in the near future here. So he didn't really mention
that during the campaign. That's obviously not something you expect to gain any votes by really shining a light on But there is no way to slap tariffs on companies who are looking to make a profit and force those companies to only take it out of their profits. They're going to raise prices. This is the United States of profit margin companies who are having to deal with these costs. And it might might it might be a company that you perceive is an American company, but they may be
bringing parts in from to build. Cars are a great example. For one, part inside of a car may literally go back across the border of Canada and or Mexico several times before it lands in its final car. So it may be an American brand. You may be buying it from what you feel is in an American dealership, but the parts in it could be coming from multiple countries that will all add up and wind up on that windowsticker.
Well, and to some effect, the the threat of terrorists has kind of worked, I know in terms of repatriating some of the illegal immigrants. Some certain countries have said, Okay, we'll take them back under threat of Donald Trump retaliating against him. And is that really the impact he's looking for? And again going back to the fact sheet. This is purely based upon FENTONYL and illegal immigration. Now, we, I think, to a large degree, can control the border because obviously
they're cracking down on it already. We did have a more secure border in prior administrations, but more resources went down there for walls and security and warm bodies in the form of ice agents. I think you could curtail one of the two identified problems to a large extent. Now Canada represents a more sizable challenge, considering that is pretty much a wide open border, and it is a
big one. But I guess I'm just wondering what resources the Mexican government could even bring to bear since their country is largely controlled by And feel free to disagree, but it's been my conclusion over the years that the CAR tells they have a substantial amount of power in Mexico, and here's Trump trying to take away one of their primary sources of income, which is drugs and varying illegal immigrants to the southern border, right, And I.
Think you raise a great point in terms of there's there is a lot of enforcements, or at least much more on the south side than there is on north side. So I think when when we when we uh lay a levy energy tarists, for example, against Canada, and not a lot of people know this. I think it's becoming a more popular news item where people are going, huh, didn't know that Canada is the largest of among the countries the United States brings in oil from Canada is
the largest one. So that that so obviously we were trying to poke them in the eye. Of course, that's maybe maybe there's better ways to handle up. That's effectively what we're doing to get their attention on the fentanyl issue. But I think also what's underlying this to me, this is the first shot across the bow of we want to be producing much more. We want to import less and produce more domestically. So first off, let's just make
domestic oil more expensive. However we can do it, and we'll call it fentanyl, and we'll call it illegal immigration or whatever. But let's just slap oil tariffs on Canada. That will force us to say, hey, imported oil is more expensive. It's going to drive the price up. That will get the attention of the domestic drillers and the drill baby drill thing. Right now, domestic oil companies don't really want to drill so much. They're not super excited
about it because oil prices are not that high. If we drive it up, this is Trump's thinking. I believe if we drive that price up, they'll be more attracted to go drill. And take into account the executive orders he has put out there over the past few weeks to make drilling easier. Right now, the profit isn't there for them, but based on oil futures from last night that bounced about two percent to the upside, it looks like it's going to go more attractive for him.
Well, and doesn't this sort of fly in the face of rebuilding or are going back to build the Keystone XOL pipeline because that brings oil from Canada into the United States?
Right correct?
And now I haven't heard him mention it's not in a very very long I know. I know, so I think I don't think that's a major priority for him. It was a hot point because I think that was a poke in the eye to the to the liberal side that wanted that shut down because of it for environmental reasons and so forth, But that was never really his objective. I think his objective is for more domestic oil. So that's why we haven't heard the word keystone all
through this. I haven't heard that since the since the election.
Yeah, and in terms of and I understand, maybe the motivating force behind increasing the price of Canadian oil in the United States is exactly what you said. But those projects don't come online very quickly. I mean, it takes a while to ramp up a drilling project, doesn't it exactly.
And that's why that's the pain he's talking about. He can't talk about pain when he's trying to win an election. Candidate Trump doesn't have to talk about that. President Trump has to give us a heads up that hey, this might hurt for a little while, so that six months later, when a little while is still happening, because we haven't started much of this domestic production yet, he can say I told you about this way back in February. It was gonna hurt. We got to pay the price, good, bad,
and different. That's the reality that we're current in, currently in.
And going back to my question about you know, legal challenges, I mean, we currently have a trade agreements and or trade agreements in place with Canada and Mexico. Didn't Trump negotiate that when he was president the first time around.
Sure, there's a lot of things he did when he was president the first time around that that don't seem to hold any bearing. Now look at all the people he appointed that now he's firing. A lot of the firings you're hearing are his own people from six eight years ago. So I don't know that history necessarily means much of anything. It's just the reality of you know, his his window he looks at is what do I see right now?
What do I need to do about it? The history is irrelevant, it sure is. And going back to the whole idea about drugs. You know, drugs have been coming into this country, I mean since before I was born. It's the demand that is the problem. I mean, if we weren't a nation of a bunch of addicts and cravers of drugs, then this wouldn't even be an issue. I know that's a simple statement to make, but Lord almighty,
it's just I don't get it. That just seems to be there should be another way to skin a cat, if you know what I mean, rather than going down this road. But here we find ourselves.
Yeah, when I step back and look at the biggest of big pictures. You know, I always use the term the United States a profit margin, and we've seen that is our number one focus, and it always has been how much more money can we make? And the wider we spread that the profit margin range, the more people get hurt on the bottom end of it. If you're born in the top two thirds of wealth in this country, you're gonna be okay. But if you're in the bottom third,
you're gonna struggle. And we tend to, unfortunately take advantage of that group of people. And I think that has a lot to do with the addiction issues that we've seen. I don't know how to fix it, and if you and I could push a button right now this morning, we do it. But right now, profit margin trump's everything.
I get it all day long.
Well, let's talk gross domestic product and fed interest rates and we'll finally in the third segment get to the sad reality of lack of affordable housing. American dream kind of taking a side step here, but first twenty two three. You show up at twenty two three on Route forty two between Mason eleven. If you have any interest in a suppressor, they're doing a demo day this Saturday between
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A twenty fifty five KRCD talk station doing that money Monday thing with all our financials Brian James, all Right, is the R word going to come up in our conversation today?
Brian James.
A Federal Reserve holding interest rate to four to a quarter to four and a half percent plus. We have a new gdpeak final quarter review figure. So what's this all mean.
I'm not going to say the R word. I don't want to jinx anything, so fair enough, but we would not not looking so bad at the moment we do. We do seem to be slowing down. So so fourth quarter GDP came in at two point three percent. That's a deceleration from last quarter, which is three point one percent. These are all annualized numbers, so we do is we get the number for a three month period, we multiply it by four, and we declare that to be what the what we think the economy would do over a year.
So we're falling a little bit short of the economists want two point wanted two point six percent, so we fell a little bit short of that. Things seem to be slowing. I do think some of that could be accounted for by the idea that, especially toward the end of the quarter, companies may have been backing off a bit on investments that they were going to make, waiting for this inauguration to occur and to see what's coming here and first quarter in darn it all, we sure
are seeing it here in the short run. So Federal Reserve as for their position. They held the interest rates and we want to keep an interest rates in the target right now four and a quarter four and a half percent. This wasn't a big surprise. We kind of expected this pause really for the same reason Drume Powell has said he wants to see how the economy is going to respond to the different changes coming out of
the Trump administration like tariffs. Yeah, such as the things we've been talking about.
Almore, well, let's get that and let's just see see we can't tie those two together.
If as you and I kind of expected, and I think.
Logical thinking people will expect the same thing, prices is going to go up at least for quite a few goods and services. What will that be, by way, what would the Fed's response to that price increase be in terms of interest rate?
Well, the Fed is going to wait to see inflation. Mean that that's their goal is to control inflation. Inflation isn't that bad right now? Certainly not where we were a few summers ago. At nine percent. It's slightly higher than what we've wanted it to be. Core core PC came in at two point eight percent, which was right around the expectations, but a lot higher than what that
committee shoots for at two percent. Jobless claims were okay, and new home sales are a little better than anticipated, So we're not seeing the kind of things yet that the Fed would indicate or are going to be inflationary, and therefore we need to react at this point. Though the market bonds are trading as though we're going to see a cut in June. That is a very very short term here's what's happening right now type of an update.
Let's keep an eye on out of the next few weeks and see if that holds true.
And if it does, about it to be more like a quarter point, wouldn't it.
Yeah, We're not in a situation where we've got raging inflation and raging deflation. Nothing's raging, So I would anticipate more tapping of the brakes or tapping of the gas pedal if we do anything at all in the short run, but much more likely very much wait and see approach. Jerome Powell is not even reacting to how he's being disparaged by the president who actually appointed him in twenty seventeen.
So Donald Trump would like to see or rates sooner rather than later, but he does not appear to be ready to get rid of Jeroan Powell to the extent that he could at that this point.
Isn't it kind of a weird faw and ignoring whether you're a foe or against Donald Trump's decision to tariff that we expect it's gonna increase the prices prices, Well, that's an inflationary thing done because tariffs have been put in place, and the Federal Reserves job is to manage inflations through its interest rates, so that's a completely separate function. It's like there's a strange connect slash disconnect that's going on here between one side and the other.
Well, I think the good news for Trump is that people are sensitive to inflation. We just had that nine percent, as I mentioned, and people still talk about that as if it's still here. That's not the case anymore.
I'm still at the grocery store. But that's good.
I mean that has there's a lot of layers in the grocery store prices.
I understand that absolutely absolutely. But what I think that gives him is some headroom to say, well, yeah, a price have gone up here. You know, this hasn't happened yet, but I could see it playing out this way. After we do see some inflation resulting directly from the tariffs in the coming months, he could easily say, Yep, this is the price we have to pay that I told you about back in February. But at least it's not nine percent like it was under the Biden administration. That's
how that's going to be positioned. So I'm pretty sure Trump looks at this as though he's got some headroom to work with.
Well, let's keep our popcorn out. We'll find out together. Brian James pause and bring us. I'm to talk about it.
Yeah, I know, I know.
And one more thing we'll be talking about, and I just I just just so badly for young people these days, home affordability, American dream kind of out of their reach at this point. Can anything change this current landscape? It's say, twenty five fifty five cars of the Detox station. One more with Brian James. We're gonna hear from todd Sledgeman since ANYVA some big changes coming to the VA locally. I'll be right back after these brief words.
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Ay twenty eight if afy about CAIRCD talk station. Happy Monday, Money Monday with Brian James. I'm all worth financial appreciation being loaned out every Monday for a few segs, but talk about money matters and get yourself a certified or financial planner fee based one, so they have a fiduciary obligation to you and you can plan for your retirement. And I guess in addition to lack of home affordability, probably young people can't afford to put money away for
the retirement either. Brian, this is a sad reality settling in here, lack of affordable housing and the American dream elusive, a lot of kids still living at home with their parents, and I understand that it's just is there any end in sight on this and what would it take to change this landscape?
Well, they say that you only dream during rem sleep, and I don't think Americans are getting as much rem sleep as we used to, So I'm not sure that the implications of the American dream are all that wonderful right now. It is right, You're right, it's very tough out there. Anybody who's got young, young adults trying to
launch themselves into the world and be independent. It's a challenge even if they can afford the house payment that almost always comes directly in the face of oh yeah, by the way, don't forget, you're gonna have to fund your own retirements because social Security is probably not going to look much like it does right now. So don't forget that mortgage payment and retirement all by the way, you got by lunch too, So it's a tough challenge right now.
And energy bills and repair cost. You know, the furnace is going to go out at some point, the roof is going to have to be replaced at some point. It's just you know, I've owned the homes since nineteen ninety and I know exactly how much it can cost.
Yeah, and then the problem is not too much avocado toast either. That's the fun Sully headliner, sledgehammers exactly. Young people can't afford sledghammers. However, will they make it now that these are real issues? And I don't mean to make light of them. No. Since since nineteen seventy nine, middle wage workers have gone up, have seen their wages increase only about sixteen point eight percent. That's an annualized
growth rate of zero point four percent per year. Now, if you look at home prices, one hundred thousand dollars home in the late seventies would be something like three quarters from a million to eight hundred thousand dollars right now. So wages have simply not come up with homes. Homes stopped being the American dream. They became an investment, just like anything else, a speculative, commoditized investment, sometime in the past,
well really slowly over the past several decades. So nobody, the economy as a whole, doesn't really care that it costs young people an awful lot more as a percentage of their paycheck to own a home. All we really care about is, hey, that's an investment I can throw money at and it will grow, and I don't really have to worry about the side impacts on other people because I'll just blame them on spending too much on avocado toast. Well that's our philosophy right now.
Yeah, but there was a time, and I know there always have been big houses being built. But I remember my grandpa marsh my mom's dad and grandma. They had a little house on Cooper Drive in Lexington, and I don't know how many square feet it was, but it was not a very large home. Three boys, she had three brothers. They all slept in one room in the roofline. You know, it was a walk up, but it was just one big room, three beds in it. You know, nobody had their own bedroom. My mom had a separate
one downstairs, but very modest. And you know, I never remember my grandfather being upset or unhappy. He always had a you know, contented view of life. And you know, they just work for IBM, and I just I think our expectations on what we're supposed to have by way of house has changed dramatically, and they start churning out these big houses, these mega mansions, and even the smaller homes are much much much bigger than they used to be,
and of course that's going to directly impact affordability. You see some sort of perhaps sea change in how we perceive housing, like the smaller houses being becoming more popular. Obviously they're cheaper to build.
Yeah, I absolutely do. Smaller houses are becoming more popular. Not because people go, hey, I want to live in a smaller house. People go, hey, I can't afford a bigger house. This is the best I can do. And I think that drives a lot of conflict really between the generations. I don't ever remember. I'm fifty years old, so I've been around a couple of blocks. I don't ever remember there being conflict between generations. Like there is now.
I think what you're referring to, though, is that some generation at some point is going to have to be the one to capitulate and say, you know what, we simply will not have it as good as our four. We're going to have to take the hit before we get to move forward. And I'm fortunate not to be in that situation, and I'm trying to guide my kids away from getting too hung up on that because the
world is just plain changing. But I can see where I would be extremely frustrated and bitter if I was the one told you know what, it's just not going to be as good as what you grew up watching.
Yeah, or maybe the perception of what equals good. Going back to the cost of maintaining and up keeping a home, you know, you have to furnish it, you got to clean it, and you know, the smaller you have, smaller space you have to deal with, the less there is of that. So comparatively speaking, the cost of voting a smaller home is less than a big home, you know. I mean there's some pus sides to it all, there.
Absolutely are, but I think that doesn't really settle in until somebody is truly in that situation then putting themselves. And I'm guess I'm picturing for a young family that first trip around with the real estate agent looking at what they can afford versus what they had in their heads before they got in the car that morning. Yeah, I think that is a cold water shed.
It is.
And my wife regularly points back to the eighties with lifestyles of the rich and famous, which she thinks was a turning point and what really between what truly really matters and what people just get envious of and look to and believe that they are not going to be happy unless they have what the Joneses have down the street, if you know what I mean.
Yeah, And it's so much easier to see what the Joneses have nowadays, and this is harder. Obviously, we've got social media, so you can't get away from it even if you want to, and you're trying to do the same thing that This is how we drive profit profit in the United States of profit margin. Get people excited about something, whether they can afford it or not, and take advantage of it, of the rush when it happens.
Well, and here's one other thing I've observe over the years, you know, the idea that we're all going to live in a house and have our own stuff and things
like that. If everybody in China, and I know they have a housing issue in China of a different type, but if every one of the one point two or four billion people in China had felt that they had to build a three thousand and four thousand, five thousand square foot house, I think that would cause a problem in terms of like natural resources and the ability to even accomplish that.
Yeah, I've thought of that a lot recently too, as we you know, because the big pushback here can be against suburban sprawl, because you know, every year there's a new call to sat going up in a cornfield somewhere that that's especially happening around here, and there are people who object to that and say we shouldn't be doing that, We should be conserving, conserving, And I'm always thinking, wherever that person lives, do you do you want to live
in a skyscraper with five thousand other families? You should we all stay inside some little pasture somewhere. So, I mean, I think there's logic to both sides. Yeah, But I don't think the extremes are ever going to play a role here.
Complicated it is, and we can only hope that at least the home interest rates go down at least to provide some measure of affordability for young people. I don't know, Brian. Always a distinct pleasure having you on the program. We'll look forward to next Monday, another edition of Money Monday, and best to you and everybody at all Worth.
Yes, sir, stay warm out there, and fake Spring.
We'll talk to you next week, Fake Spring. Indeed, it'll last a moment. Enjoy it at last. See thirty five ffty five krs to de talk station Todd Sledge since Anava some significant Cincinnativa facility improvements. Todd's gonna be talking about that coming up next. For my veteran friends out there, stick around.
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