Let's Talk Money

Well, good morning, and thank you for tuning in to Let's Talk Money on eight ten WGY. I'm John Malay and I'm going to be your host for the next hour. I'm a certified public accountant and chief financial officer and chief operating officer at Bouchet Financial Group, So I want to thank you for tuning in with us this morning. We certainly have a lot to talk about. It was an action packed week for sure. Here we are on this February third morning, and it is to the northeast, a pretty mild,

mild time. So yesterday was Groundhog's Day and tucks to Tawny, Phil came out, didn't see his shadow. So as they say, early spring is on the way. So I'll say, you know, so forty six days for those of you can outing forty six days until spring. And you know, I look at that with a mixed bag, you know, I actually, you know, I embraced the winters of the Northeast. I feel if you live here, it's a good thing to do. And I'm a skier and it's been a tough year for skiing. I'll say that it's uh,

you know, we had not had a lot of snow. We get some cold weather, then it warms up and rains, and uh so it's been certainly a tough year for skiing and enjoying, you know, all that the Northeast has here. Although I did sneak away for a long weekend before bringing my daughter back to college. We went to Vermont for a few days of skiing, so that was great. And you know, we usually go to

Jimminy Peak, which is right over Massachusett's Great Family Mountain. Love that mountain, and you know, it's just been tough with with the weather we've having. But for those of you who are have your eyes on spring, only forty six days to go. And I will say from a you know, another perspective. I have a sister, Jade, who lives out in Anchorage, Alaska, and as I was coming in this morning, I checked the temperature there and it was a nice bomby twenty degrees below zero without wind chill.

And they certainly have the reverse of what we got going on. They've had very cold weather, lots of snowfall. So those of you who are looking for winter, Alaska is a place to be, so certainly I keep that in mind. So I know, Steve last weekend talked about you know, we had our State of the Economy event a couple of weeks ago, and that's a great event. We had over three hundred clients really, you know, having our leadership and members of our investment committee, you know,

talking about what we're seeing in the economy. Great presentations. I know, Samantha Macy from our firm is you know, working with our video editors to get that all edited up on our website. That'll be up there shortly, so you know, check out Bouchet dot com and you'll see that presentation uploaded.

And you know, I had a client come up to me after one of the night's events and you know just mentioned, you know, he had six speakers and just what a great job everybody did and how hard that is, you know, for firm that's only got you know, nineteen employees to have six who can get up there and speak, and you know, quite

frankly, we've got a lot more. And part of that's because you know, Steve loves to use this radio show really to showcase, you know, the talent he's assembled at Bouchet Financial Group, and this show really is a great way to get up and practice and and you know, entertain the audience.

And I will say, we've got a firm that's, you know, is second to none in that area, you know, And so I know, over you know, the past few months, you've had a chance to listen to Nicole Goebel, Ryan Bouschet, Steve Son, you know, Marty Shields, Paula La Pietra, Harmony Wagner, Samantha Macy, and Vinnie Testa, and you know in the upcoming months you're gonna hear some more. I mean, we've got a great team. And I know I'm a little bit biased because I'm part of that team, but you know, I'm no spring

chicken. You know, I've I've graduated RPI in the the mid to late eighties, and I've worked at several different organizations, big and small. And I'll tell you Steve has done a great job assembling a team of just quality individuals and it's just a you know, a great place to work, good people who care, care about our clients dearly, but also care about each

other. And just you know, Steve's done a great job building the culture of that firm, and we appreciate that because you know, we spend a lot of time together and we do a lot of really important hard work and so it's always nice to have a culture like that. And Steve has built, you know, an amazing team. We've got nineteen professionals, seven cfps, four CPAs, one certified divorce financial analyst and one certified private wealth advisor

in two enrolled tax agents. And you know, Steve's very proud of the team and thinks it's a great honor to share our knowledge with the listening audience. So we appreciate you tuning in today and I hope you enjoy the next sixty minutes with me. With that said, I encourage any listeners to call in with questions. You can reach me at eight hundred talk WGY. That's

eight hundred eight two five five nine four nine. So this morning, you know, we talked about the markets, investing, some financial planning topics, and whatever questions you have, So again, call in, as I said, our number eight hundred eight two five five nine four nine. So we talked about Groundhog's Day. And so if you were like Pusatani Phil and our lovable groundhog, and you crawled out from your whole on Friday afternoon at the close of market, you might look up at the board and say, jeez,

it's been a quiet ho hum week. You know, the Dow, the S and P, and the Nasdaq all up just a little over a percent. Must have been a quiet week, huh. Just the opposite. It was an action packed week with lots of data, lots of earnings announcements, and some pretty strong movements in the market. So you can't always just look at the ending index to really get the full picture. You know, we had the FED meeting and their decision on interest rates and Powells remarks,

which we'll touch on. That was a really important indicator of what we're going to see ahead, and market had reaction. We also saw some strong, strong, strong tech earnings that were pretty incredible, and you know, we'll talk about those, and they had some major movements. And then just yesterday we had a really hot jobs report, which certainly also had some impact on

the market. So a lot of activity, a lot to talk about, and you know, just recapping some of the numbers for the week, you know, S and P was up a little over about one point four percent for the week. Year to date, up almost three and a half percent, closing at a record high on Friday, so really S and P is just continuing to blow through records, which is pretty amazing. You know.

The Dow was also up a little right on one point four percent for the week too, and a little over two and a half percent for the year. Uh and also closing Friday at record high, so both Dow and SMP reaching records. Nasdaq was up a little over percent for the week, up four percent year to date. Uh. You know, Friday's close was its two year high mark. It's not reached all time highs right now, but getting close. I'll say that it's getting closer. And thanks to you know,

really Meta and Amazon. Really, Friday closed not too far from the all time high. So, you know, just a great, great week in the markets. You know, we saw the treasury ten year treasury bounce a little bit and recover. We'll talk a little bit more about that. So, you know, certainly a lot going on in terms of Fed discussion, in terms of earnings reporting. You know, we're in the midst of earning reporting season, so this is companies reporting their fourth quarter quarter earnings.

So we'll talk about that and then the jobs report, right, you know, because that is so tied to what the FED is looking at and you know, big concern this year is you know how many rate cuts we will see. The Fed is projected three rate cuts, the market is hoping for more, and certainly as the economy is hot that that will impact some of those rate cuts. So we'll certainly talk about that. So action packed.

So if you were Phil and you came out of that hole, you missed a lot, and uh, you know, now's your chance to recoup. So uh, you know, so the Fed, you know, they met uh January, They're gonna meet again in March, and as expected, the Fed left the rates unchanged. But as always, you know, now we're parsing every every word they wrote, now every comment that's coming out of Chairman Powell's and every other official's mouth. For a while, he had a press

conference after the meetings, and now we're parsing that. And you know one thing, you know, they've they've been very tough on inflation, saying, you know, they need to see greater confidence that we're approaching that two percent target. And that's not a surprise. But I will say we did hear some words coming out of Chairman Powell, which which we're good to hear, and really you know, saying that they don't have a mandate against growth,

right, which which I think is really important. And you know, Chairman Powell said, you know, we've had inflation come down without a slow economy and without you know, significant increases in unemployment, and he sees no reason why we can't do that this time and support that process. And that's important. So, uh, you know, again, I think they doubled down

on their mandate. Is they have a dual mandate, right, and that dual mandate is to keep maximum employment and price stability, and that's what they're focused on. And if we have some growth in GDP and but we're inflation is not ticking up and we're we're hitting their employment mandate, well the Fed's

gonna let things go. So so definitely some some mixed comments there. I will say, you know, generally the feeling is, you know, a March decrease in rates, you know it's gonna be tough, tough to see. Now, I will say FED has made it clear they're gonna be data

driven. They're gonna continue to look at CPI data, other data and really make uh, you know, a decision that is very much data in form So you know, I will say March is looking less likely, but I will say, you know, it depends a lot on how the data comes out between now and then. But you know, certainly, certainly the market is priced in a little bit of more you know, more rate increase or decreases than what the Fed is signaling. But you know, you know,

the market reacted. You know, we certainly had some movement in the markets after the FED meeting, but then you know, we had some more significant earnings releases which kind of tempered the market. So you know, as we look out for the next few months, I think, you know, there's no question, as we've continued to say for the last I think eighteen months, the FED is going to be looking squarely at data. The last thing they want to do is let the foot off the break or you know,

and ease things up and then have inflation start to tick up. So you know, that's certainly they've been very consistent with that. And as much as you know, we can, you know, hammer the FED for maybe being a little slow to act, you know, I think a lot of critics would say they've done a good job once they started acting, and certainly, you know, I think they have the full support of continuing what they're doing to to make sure we've got inflation tampered out, and but still the economy

growing at a good pace. So fed important meeting and as expected, left the rates unchanged. We have a caller from Rick in Half Moon. Rick, I appreciate you listening this morning, and what can I help you with? Good morning, Good morning. My concern is I'd like to get your firms from your reading on it. The national debt I think is now it's thirty four trillion dollars YEP and represents represents so close to one hundred of the

GNP and unfortunately growing. No concerns, there is no worries about that. Oh, I'm not saying that, Rick, I I do have concerns over that. And you know, I think you know, your facts are well stated that that is a concern. Uh And and it is you know, a point where we have to get our debt under control, no question. And so I I think you know, there's a lot of factors at play with what we're seeing with the markets, and and I do think that that

is definitely a concern. You know, we have our eyes on and you know, we'll just have to see how that plays out. But certainly you know there there's gonna be a point where you know that that can't continue. And so so yes, I I we are definitely not glossing that over in any way. Yeah, I know, I mean more and more of our annual budgets for interest correct correct And you know, if you've got you know,

in a growing economy, you can support that to a level. But but I think you know, I definitely you know, support of getting control

over spending, uh, getting control over debt. You know, I will say, you know with our uh you know political parties right now that that's a challenge, right and and we've seen that play out, you know, you know, with debt ceilings and other issues, and uh, you know, hopefully you know, our hope is certainly that we get you know, parties that can work together and you know, really cross the island do what needs to be done, because you know, we do have a phenomenal economy.

We've got you know, a great system. We now just need some I think a little bit more controls in place with our spending and with our debt, no question. Uh. And and I will say, you know, hopeful for you know, some positive elections and really getting part you know, getting some candidates that will work together. And I know that some people might laugh at me for that and say, look, you know, how's

that going to happen? And it is going to be a challenge, but you know, I think, you know, we can't continue to face these debt ceiling crisis and uh it's looking bad for both parties quite frankly, I hear you. Thanks, I agree with you. Thank you for those comments. Yeah, thank you, Rick. I appreciate you tuning in and thank you for that great question. So we're going to take a quick commercial break, so please stay tuned and we'll be right back with Let's Talk Money on

eight ten w g Y. Here is Stephen Bourse. Well, good morning, and thank you for staying with us through the break. I'm John Malay. I'm your host this morning for Let's Talk Money on eight ten w g Y. Again, we had a great question there from Rick. I encourage any other listeners listeners to call in with questions. You can reach me at eight hundred talk WGY. That's eight hundred eight two five, five, nine

four nine. And we were starting off, you know, really recapping some of the big events that went on this week, and certainly, you know, the FED meeting in their decision to hold rates steady was an important one. Yeah. The other portant thing is, you know, we're we're in

the midst of fourth quarter twenty twenty three reporting seasons. Now, this is when public companies are reporting their earnings, and you know, the beginning of reporting season, you know, we had financials come out and you know,

they were not they were a little disappointing. And you know, we this week, we had major tech companies releasing earnings and you know, we had it was a mixed bag overall, but I'll say, very strong earnings from some of the big tech companies and even some of the and we'll talk about even some of the misses. We'll say like Apple, you know, yes they missed on sales growth, but on earnings growth, it's still phenomenal.

And so it's very interesting. You know, these tech companies are posting not only great growth, but great great earnings, which is you know, very different than tuck tech bubbles of the past, right, I mean, these companies are generating earnings, which which is great to see. And so you know, one of the big releases this week, you know, was Facebook's

parent and Meta, which had a record record earnings. I mean, they were phenomenal and had a massive day on Friday, and they posted just you know, sales up over twenty five percent, record earnings, and and then announced that they're going to pay a dividend, you know, a fifty cents per share dividend the first time the company and the you know, the markets

reacted overwhelmingly. You know, we saw twenty percent increase in just one day for that stock and record you know, ending the session at a record high over four hundred and seventy four dollars a year. Just a phenomenal So just

great earnings, but also great outlook. I mean, it wasn't just about because remember when they're when they're reporting earnings, they're also really giving their outlook for the next quarters and the rest of the year, and you know, they they had very good expectations for the rest of the year too, so also announcing increase in their buyback authorization. So you think about it from a company perspective, record sales, record earnings, stock buybacks, and then announcing

their first ever dividend. Just you know, an amazing, amazing earnings report from from Meta for sure, and the market rewarded them, you know, up again twenty percent one day. Wow, that's amazing. And you know

Amazon also had a great earnings release. You know, they far exceeded analyst expectations for fourth quarter earnings in revenue and had some just phenomenal numbers income searched, you know, over ten billion dollars for the quarter, compared to just two hundred and seventy eight million the prior quarter, or the quarter, prior quarter, prior year, similar quarter. So but that was a tongue twister there. So, yeah, huge growth in net income. And you know

Amazon doing some you know from a corporate governance, some great things. You know that they're they they had some layoffs and that's never good to see, but they are controlling costs, you know, they've they're making the tough decisions, you know, controlling their headcount. Also they've exited some really some areas of business that we're not panning out, so again, making tough decisions, uh, you know, really producing some solid not only revenue growth fourteen percent

of the corner, but also some you know, phenomenal earnings growth. And you know AI is definitely you know, talking about generative AI and how that's being used, and you know they're announcing some new initiatives there and you know, I'll talk a little bit more about AI in a bit, but certainly, you know, these tech companies are all talking about it, you know,

AI so early. How it's impact overall may may not be hugely material this early on, but certainly it's where they're investing and they're talking about how they're they're planning on using it either to drive revenue or decrease expenses. So so Amazon and Meta just you know, some great results. You know, also Microsoft and Alphabet also reported and exceeded analysts expectations. So some another you

know, some more great earnings deliveries there. You know, Apple, uh, you know, had their earnings release and it was you know, it was a little bit off the mark, and really you know it is interesting, you know, so great profit expansion, right, so sixteen percent profit expansion, but their revenue growth was slow and you know, two percent compared

to the prior year. And you know, there's certainly pointing to some lackluster growth in the iPhone sales and particularly some issues in China, and so you know, Apple tims could did you know in the earnings release, you know, not only talk about fourth quarter, but also you know, identify some concerns going forward just in terms of their sales growth. But you know, still very profitable and you know, Apple, you know a great company.

You know, Tim Cook is they Apple as a whole has really been holding back on talking about AI. They are now talking about it and saying really teasing that there's going to be some more initiatives there. So it will be interesting, interesting to see what comes out of that. So certainly tech big week, uh for for earnings. As we talked about, you know, really end of last year is you know, this year is going to be

earnings are going to be really important. You know, Fed obviously going to be important with what they do, but earnings are really going to have a big impact this year, and so we'll be looking at not only tech earned tech earnings, but other sectors as well. So we are are almost coming up to the mid point of the show, so we appreciate you tuning in with us this morning. We're gonna take a short commercial break. I want

to thank you for tuning in with us today. We hope you are enjoying this show so far, and hope you will rejoin us after the break. We encourage any listeners to call in with questions. You can reach me at eight hundred Talk WGY. That's eight hundred eight two five five nine four nine,

So after the break, please call in with a question. You've been listening to Let's Talk Money, brought to you by Bouchet Financial Group, where we help our clients prioritize their health while we manage their wealth for life. Thank you for listening, and I hope you rejoin us after this short commercial break. Thank you well, good morning, and thank you for staying with us through the break. I'm John Malay and I'm your host for this.

I appreciate you tuning in to us on Let's Talk Money on eight ten WGY. So we've been talking about what an action packed week it was this week, and it certainly was and went through the FED meeting and discussion and some

of the big earning surprises coming out of our tech sector. And you know, here we are, I think almost a little under fifty percent of the S and P five hundred companies have reported earning so far for quarter four, and you know, of those that have reported, seventy two percent have reported EPs above estimates. So h that's certainly going to be you know, an important trend that we're going to want to see for the for the rest of

the companies and also for future quarters. You know, we've talked a lot about you know, the last two years of squarely been about the FED, and you know, certainly even even as we look at twenty twenty four, the eyes are and the FED and when we're gonna see some interest rate reductions. But it's really important that we see you know, earnings and you know, so far earnings have been there. You know, I'll say the funny,

there's been some disappointing sectors. You know, the financial sector has not been has not been that great as well as you know, we've seen some disappointments and energy and healthcare. But you know a lot of sectors, including you know, tech, consumer, discretionary, communication services, other sectors are are showing positive earnings year every year, which is what we want to see.

So you know, we talked about you know, Meta with the big pop on Friday with their earnings release, and uh, you know, we're just parsing a little bit of Apples, which well, you know was considered a disappointment but you know, I will say Apple is you know, Apple is some way in some ways start to look as much. You know, yes, as a growth company, but you know their composition is changing a bit. So you know, yes, slow revenue growth only two percent,

but great profit expansion. And you know, we started to talk a little bit about AI, and I do know AI is becoming one of those buzzwords that is being overused a lot, but it is also you know, you can talk to some I've talked to some really smart people, and you know, I've asked where do we rank AI versus some of our other technology advancements, you know, And I had somebody talk to me saying, you know, comparing things from you know, electricity to the smartphone to the personal computer

and saying, you know, electricity is at one hundred, you know AI could be at a ninety. And again, this is one person's perspective, so I don't want to blow that out of proportion, but it it can

be a game changer. And it's interesting, you know, with these tech companies that we saw some big releases, they're certainly talking a lot about AI, and you know, AI, you can really have several different plays on something like this, right, I mean you can look for companies that are directly involved with AI, which, right, which really comes down to you know, computer technology, so chips. It also can be other components of

energy, you know, and also consulting power. But it's also one of these technologies where it's it's also what companies do with that technology, right, It's like what does a company do with Electroscit electricity makes it so powerful? Right, it's what companies do with AI, right, and what companies have the greatest capacity to put that technology to work, either reducing costs or increasing

revenue. And you know, certainly as we look at a company like Amazon, and I am a by local person, but there are times you jump on Amazon and it just becomes so easy. Now throw some generitive AI on top of that, where it's looking at something you search for and then coming up with ten other ideas. Or if you've thought about this, if you've bought these four things, here are five other things that you should buy,

and those things will influence consumer behavior. So if by using that technology, Amazon can turn an average transaction from three purchases to five, do you know I think that that's going to impact their revenue growth and their bottom line absolutely. You know, if I'm using Microsoft products and they've built AI into it, so I'm building a spreadsheet, it's looking at what I'm doing, and it's then completing it and saying, is this what you're trying to do?

Let me do it for you. That's going to make me more efficient, and that's also going to make me never move off of that Microsoft product. So it is interesting because I think everybody with this advancement of AI is trying to determine, well, how do I, you know, how do I best capture this? Where do I invest my money to capitalize on this growing technology? And you know, we'll have a lot more discussion about that.

I know Ryan Bouchet, who heads up our investment Committee and our investment group are certainly looking at those options. And there are ETFs that are coming out that are really geared towards AI companies. But I do, you know, it will be interesting to see how this plays out because some of the best investments may be in companies that are, you know, not really advancing that technology globally, but more adapting it and utilizing it within their own entity.

Right, So Microsoft using it and making a part of their products or Amazon building it into the kind of the consumer experience of how you shop. So

it's interesting. And again, I know there's a lot of smart people who are who are weighing in on AI, and I think what's very different than you know, some of the other you know, like the dot com era, you know, you know, this clearly has this clearly has the potential to reduce expenses for jobs for companies right by job elimination and repurposing those jobs, and also by by generating additional revenue. So it'll be interesting to see

how impactful. Certainly, uh, the biggest tech companies are talking a lot about AI and investing a lot in AI, so it certainly will be interesting to see how far we take this. We have a question from Rick from Half Moon. Rick, I appreciate you listening and what can I help you with this morning? Yeah, I'm another question, but it's not about any that's okay. What's your what do you guys thoughts on a global balance fund

that's comprised of like seventy percent stocks thirty percent bonds. Yeah, so, so great question, Rick, you know, so one and I'll parse that a little bit. In that balanced funds, you know, we we certainly think being a diversified investor for a long term horizon is the right perspective, no question. So having diversification, you know, and and we are right now we don't hold any any uh, non US holdings in our portfolio right now. Now. That doesn't mean we won't ever. We just feel right

now we are we are centered on US equities for driving our growth. And so I guess from a global perspective, you know, there's there's obviously global concerns right now with China, and China has some problems if they've got to get a handle on now. Certainly they're being here can be great growth potential with China, but but they have been experiencing some significant problems and you know

they've really got to get that under control. So certainly, you know, uh, I would say, if you're diversified and as long as you're not overweight global uh that that you're overweight US equity. That's the position we would support. And just as talking about our portfolios, you know, we are only holding US right now, and you know really feel you know, as Steve has talked about, you know, all the major companies are really getting

international exposure right because of that, they're being international companies. So company like Apple, right as we just talked about, with their earnings, you know, quite frankly, you know, they're they're missing some of their revenue growth potential because of what's happening in China. They're seeing some some each US and slow down. So so you know, when we look at the major growth companies and where just how it's overwhelmingly you know, US companies were very bullish

on US. And again, you know, doesn't mean we're ignoring global issues and global concerns because again, those large mega companies do have international exposure, right and they are and so you are getting international flavor through there. Now, I will say, you know, we our investment committee who meets weekly and they actually talk daily. You know, certainly they have not closed their

their eyes to international and there's there's always opportunities on an international basis. So you know, we certainly look globally, but at this point we're we're more comfortable with a portfolio that's constructed around US equities. Okay, that's what I thought. Thanks you for those comments. All right, Thank you, Rick,

appreciate you listening. Well, thanks for another great call, and we're going to take a quick commercial break so we can get a little drink here, and so please stay tuned and I'll be right back with Let's Talk Money on eight ten WGY. Well, thank you for staying through that short commercial break. I'm John Malay. I am sitting in for Steven Bouchet this morning. I'm your host. I'm a certified public accountant and I'm the chief financial

officer chief operating officer at Bouchet Financial Group. Also another great question there. Encourage listeners to call in. You can reach me at eight hundred talk WGUI. That's eight hundred eight two five five nine four nine. So as we're recapping, you know, the big events from last week, I haven't even got to you know, Friday's big surprise, which was the jobs and you know the jobs report came out Friday and it was it was a stunter.

I mean, non farm payrolls expanded by three hundred and fifty three thousand jobs versus an estimate of one hundred and eighty five thousand, so huge, huge, huge job growth. The unemployment rate held steady at three point seven. It was estimated to tick up a little bit to three point eight, So just a I mean, a significantly positive jobs report, really demonstrating that the US labor markets solid, it is solid, and it's poised to support support

broader economic growth. And you know some interesting you know numbers in there too is that they also you know, revised December's gains and really increased them up to an upward revision of almost one hundred and twenty thousand jobs. So December they revised to three hundred and thirty three thousand jobs. So you know,

it's interesting. These jobs reports are you know, not precise data and they always have revisions, but you know, certainly showing how resilient and positive this job's market is, which is important right as we talk about are we heading into a recession? Boy? With jobs reports like that, like earnings growth that we're seeing positive earnings, boy, you know, it feels like we're heading into that soft landing inflation, you know, just coming closer and closer

to that FED target. So it certainly feels like, you know, we're orchestrating that very smooth landing that we've been talking about and hoping for for a while. So, you know, jobs reports solid, you know, that does certainly bring up concern right about from a Fed perspective. If Fed seeing that, are they you know, how are they going to act on interest rates come March in May? Again, I think as I discussed earlier, I think general consensus is it's gonna be tough to see the Fed reduced rates

in March based on the data we see today. Now, a lot can happen between now and then, for sure, but certainly, you know, a very hot jobs report does show really, you know, just how strong our economy is. And we've always said you've got a strong consumer, right

who's now who has who's employed? We know there's lots of cash sitting on the sideline, right, there's you know, just significant amount of cash, and so that all bolsters well for you know, continued growth in the equity markets and uh, you know, and if we can continue to see earnings come in like they've been, you know, we could poised for you know,

another solid year in the markets. So great, you know, very impactful week, lot of good numbers to be paying attention to a lot of data and certainly saw that you know, the ten year treasury bounce around this week, you know, but it's also you know, came back to over four percent on Friday, so actually on Friday, I think saw its biggest one day jump since twenty twenty two, reacting to that strong, strong jobs

data. You know, some interesting, you know news I was looking at to you know, the financial sector has been a little disappointing, and you know, one of the news items was this New York Community Bank Shares, a bank that plunged by thirty eight percent, which certainly, you know, could raise some fears for regional banks again. And I know there's some comparison being made to what we saw a year ago with v B, but totally

different circumstances. You remember the SVB Silicon Valley Bank was really all about their their bond portfolio, right. They they had short term deposits that their customers had put in and they had invested in long term bonds. That that's just you know, the mismatch of their assets and liabilities. What happens is when those depositors want to take those funds out, where was the banking to get

those funds from. And they were invested in very high quality treasuries, but because of the very rapid increase in interest rates, their bonds were underwater. Now again, these were bonds that they had every intent to hold the maturity, right, there were US treasuries and so SVP you know, we talked a lot about that last year. You know, that was a very unique situation and there's been controls and programs put in place really to protect banks who

might have had those bond holdings. Uh so that's kind of been out with. You know, this situation was really different. It's interesting this bank actually

acquired Signature Bank last year. So remember Signature was one of the banks also like SVB, that was impacted by the bond issue and you know saw a significant loss of you know, two hundred and fifty two million by this bank, and you know, it's really so that does bring up you know, regional regional bank concerns and you know, is to look into this one.

You know, definitely an interesting one that you know, when they took over Signature Bank, this really brought them really to a new level in terms of their total assets surpassed one hundred billion, which in the banking world there's definitely you know, different steps that you go above. There's more regulatory concern and oversight, and so certainly with the acquisition of Signature, this pushed that bank

over there. So you so they have. So so what's really caused the issue here with New York Community Bank really was in their their loan loss you know, they took some major loan loss charges and they you know, they did see some weaknesses with with some loans and uh, you know, at least analysts are are you know, with the with the CEO is reporting and

analysts feel right now is consistent. It's really not any systematic you know, systemic issues with their loan portfolio really more of you know, you know, as a bank, you could you know, think about a charge off it. You know, you have like a reserve that a bank sets up right, it's almost like a reserve for bad debts. The loans you know are going to go bad. And you know, in the banking world, you know some of your loans are going to go bad, and you have your

historical data to show what types of loans are riskier. And quite frankly, the you know, you're required from a capital perspective to put more capital towards those risks your loans. And so you know, the bank instead of taking maybe charge offs every quarter, you know, in some ways it looks like they they said, we're gonna just rip the band aid off. We're going to take a huge charge to our loan loss reserve. And it crushed their

earnings and certainly brought a lot of visibility to the bank. Uh. But but uh, what it appears at this point uh, and again this is with limited data, is that it was not really a systemic issue across their whole loan portfolio. More that they were deciding to say, Okay, we we've we've with the Signature Bank acquisition. We have different capital requirements, and what we're gonna do is we're going to take a massive charge off, massive

increase in our in our write off. Uh, you know the allowance, which takes a hit to their earnings. Right, But this is not unusual when you see companies merge or acquire. You know, sometimes what they'll do is they'll take a one time charge clean you know, uh, to clean up, right and call it a non core item and really then so they

can operate where their core earnings really are reflective of their earnings power. So I know that this is going to get some attention and there will be analogies made to what we saw a year ago with SVB and some of the other banks. But disappears. You know, this is more and not in the

investment site. It's more the credit side. And I will say we've been talking about concerns on credit size, right because if we the concerns that if we're going to head into a recession, you were going to see you know, you had interest rates going up, you had if you had corporate earnings weakened, that you know, impairs their ability to pay back their loans.

And and we have not seen that on a systemic basis. We have seen, you know, some data from a consumer perspective showing that the consumer is weakening a little bit with debt. Still overall, very very healthy balance sheets for the consumer, but you know, seeing some leading indicators that some delinquencies are ticking up and things like that. But this certainly one with New York community. I know, it's it's it got a lot of attention, is

probably gonna get more attention. Their stock was was hammered, and you know, I know it does create some concern about regional banks, and I know you know regulators are paying close attention particularly to this bank because of it did purchase the assets and liabilities from Signature Bank. So I'm sure you know they're getting a lot of attention from their regulators. For sure. I encourage you know, any listeners to call with questions. You know, you can reach

me at eight hundred talk WGY. That's eight hundred eight two five five nine four nine, you know, getting closer to the end of the show. And I appreciate everybody listening, and certainly we certainly have time for questions, So if you do have a question, to reach out, so you know some of the other thing we want to talk about is certainly you know,

and this is an item, you know, cybersecurity. And you know, you might say, well, this is a financial show, why why you talk about cybersecurity, And you know, I do want to just say that, not not to spend a lot of time on it, but it unfortunately is something that you know, we're seeing more and more as an impact to

clients. And you know, it's just something that you know, from a risk management point of view, right, and and that's what we're in the business of, right, you know, helping our clients grow their portfolios but also protect their assets. You know, I would just you know, cybersecurity is something be aware of, right. You know, we've seen a number of instances where clients have been duped into things, and so you know,

our cell phones are becoming such a gateway to bad actors. So just be you know, very cautious and if you have concerns, you know, I think, you know, I've gotten alert from several local banks just saying that they've seen an uptick where somebody you know is contacting clients of the bank pretending to be an employee of the bank, you know, really causing some panic

with you, telling you we think your account's been breached. We need to jump onto your device to help put some protections on, and they're basically asking you to open up your computer to them to be able to join you know, remotely, and you know it's hard. You know, somebody calls you, you get this sense of panic and you feel like you should act right away, don't. I mean, if somebody reaches you, you know, you should get their name in number, but then you should look up the

real number from the institution and really call that back. So just you know, I just want to spend a few minutes on that, just because we are spending more and more time with clients and and it is it is heartbreaking to see whence we see somebody who's fallen victim for that. So there, there, there, there's my uh cybersecurity two minutes that I'll devote, so just be careful. I'll just stay there. So we're coming up at the end of the show, and I want to thank you for tuning in with

me today and I hope you enjoyed this show. I know I did. I hope you enjoy the rest of your weekend and having amazing week ahead. Also, please be sure to tune in bright and early tomorrow morning to hear some of my colleagues for another great show. And check out our website Bouchet dot com for great content and information you've been listening to Let's Talk Money, brought to you by Bouchet Financial Group.