and trying to be able to sift through it and say, okay, this is what’s important.
Jeff Kikel: This isn’t, I basically, a lot of the data [00:01:00] that I pulled this
week were things that. There was a lot of reports, but anything that was just in line,
I didn’t really pull up and I just put the ones that were really out of line with the
expectations but wanted to get us started off this week with a a current event.
Jeff Kikel: We’ve talked a lot of Florida man stories and I was sitting there this morning
and said, you know what? I haven’t looked up the Darwin awards in a while. So I looked
up Darwin awards. And I was reading through ’em and they were a bit gruesome, I think,
for the show, but I was able to find this rather interesting photo.
Jeff Kikel: Before you
Ron Lang: show that, why don’t you explain to the audience what the Darwin Awards are?
Jeff Kikel: Darwin Awards are the award to the person each year, or person or persons
each year who contribute to taking their d n A out of the. Gene pool by doing something
incredibly stupid, of course that said That is the backdrop.
Jeff Kikel: That is the backdrop for this I think this is a future darwin award.
Ron Lang: [00:02:00] Oh god So that’s how we get the crack in our rear end. That’s
Jeff Kikel: exactly I think the important things as I was looking at this can’t be real.
I was looking at all this It’s far enough in there that I’m like, okay we’re going to
be in a little ugly.
Jeff Kikel: I’m laughing to myself that, one, I’ve always been a fan of the the, this old
house show. And one of the things they’ve always said is you’ve got to wear eye protection.
And the guy down below is not wearing eye and ear protection. The guy above though is
wearing ear protection. And my thought process is to eliminate the screaming as he keeps
Ron Lang: on this thing.
Ron Lang: It’s got to be a setup photo. Look, there are a lot of stupid people in this world,
but give me a break
Jeff Kikel: But i’m just saying it could be a Darwin
Ron Lang: award down there Hey is the guy on the bottom was he in one of our mug shots
Jeff Kikel: I think he was and the funny part is we we got a few answers and If you remember
if you guys watched the show last [00:03:00] week, there was I think number 12 or 11 Who
had a weird part of his head missing.
Jeff Kikel: Yeah, it was the top choice for the the face of the week. So that was,
Ron Lang: I got some people that have been sending me some comments. We’ll see where
we are by next week. All right.
Jeff Kikel: So let’s get into a little bit of the economic data that I wanted to share.
And then this will dovetail into what Ron wanted to talk about. Interesting. I had a
conversation with a friend of mine who’s been in the mortgage business for 40 years. And
he was telling me yesterday these numbers came out earlier this week on the 13th, so
Jeff Kikel: And the mortgage applications now are at the lowest point ever in his 40
year, time in the mortgage business. And Danny is funny. He was saying, he goes, I I was
talking to somebody the other day and they said Hey, you’re, pretty much retired from
the mortgage [00:04:00] business.
Jeff Kikel: And he said no, the mortgage business kind of retired me at this point with just
how much the interest rates have pressed down on all this. So I have a feeling this is going
to happen. This is really going to start having some effects. On the the residential, real
estate eventually what’s booing, I think, residential real estate.
Jeff Kikel: And this is what we came up with is the new home builders because they are
able to go in and buy down rates. Which people are buying a lot of new homes, but the existing
homes are really starting to slow. And, in areas like we have a lot of people are moving
here and that’s keeping the real estate prices pushed up because we just don’t have that
Jeff Kikel: And I’m assuming probably by you, same thing. Yeah.
Ron Lang: Look, there’s always that lag effect with the interest rate hikes for credit tightening.
I had heard the credit tightening going back probably to June and July. The mortgage market,
was still [00:05:00] okay, but basically what the banks are doing, they can’t show that
they have seized up the machine of lending.
Ron Lang: All they’re doing is lending less. Yeah. No, instead of 30 or 40 loans. They’re
doing 10, whatever it may be. And obviously they’re cherry picking the best
Jeff Kikel: 10. Absolutely. All right. So from that, I wanted to go to CPI this week.
We had seen a trend of CPI going down or starting to show some signs of going down.
Jeff Kikel: And then this week it was a absolute pop in the other direction. Both month to
month and year over year. Year over year was a basically in line but month to month was
actually significantly higher. In addition to that the ex food and energy. So this is
interesting that they the federal government, and I think we’ve talked about this before
the federal government, they say, we only look at what they call core CPI, which is
taking out food and energy because it’s so volatile. We still all have to [00:06:00]
spend money on food and energy every day. And those things trickle down to the rest
of the economy. So I don’t understand why they’ve removed or why they removed them years
Jeff Kikel: But it’s Showing signs of picking up the other way. And we got PPI this morning
and that it was even worse of a situation. Consensus was around 0. 4 for the month to
month. It was at 0. 7. It’s almost double what was expected, year over year 1. 6. That’s
all going to start to trickle back down to the consumer on the other end of it.
Jeff Kikel: Any comments on that, Ron, your thoughts?
Ron Lang: I, whenever you’re watching any of the financial networks and they’re bringing
on all these people right before the employment number and the PPI and the CPI number, and
they’re coming up with it and they’re fixing their hair and they’re doing their makeup
and they’re adjusting.
Ron Lang: And I’m thinking to myself, nothing. Yeah. I love when I say I put the information
into my models. [00:07:00] Okay. I’ll tell you what, if you’re wrong, you lose a finger.
How about that? I don’t know how they keep their job. That’s why I said this before.
If I come back reincarnated someday, I want to come back as one of three things.
Ron Lang: Obviously coming back as a rock star would be terrific. One of them would
be to be a meteorologist. I want to be a stock analyst. Or an economist. Yeah, because you
could be wrong 50 percent or more of the time and still keep your job. So that’s why when
I see these consensus ranges look how broad they are.
Ron Lang: Even on the CPI, they were still pretty broad ranges. But here’s the other
fun thing. And we talked about this last week. These are going to be revised over the next
several quarters and several years. So that’s why it, we all know this without getting into
it. It’s politically motivated.
Ron Lang: Sometimes you’re like, it’s amazing how they, withhold some numbers and then they
come out next quarter, whatever the case may be. So with all the, with all these things,
we’ve got a fed meeting coming up in a couple of weeks. You and I both know they have [00:08:00]
the real data. And that’s what they’re reacting on.
Ron Lang: So when I see stuff like this, you know what? Things are still hot. Things are
still too high and the consumer is still struggling period. They may be spending money, but that
doesn’t mean they’re not struggling.
Jeff Kikel: And going into that point, looking at retail sales this morning, another big
blasting number coming in, consensus 0.
Jeff Kikel: 2 retail sales came in 0. 6. And even X vehicles came in 0. 6. The consumer
is still spending money at this point, but I think we’ll, as we roll through the rest
of this and get into your part of it, the other side of the coin is what will, yes,
they’re spending, but what does it look like in the future here?
Jeff Kikel: Look at the
Ron Lang: consensus. Hold on. Go back, look at the consensus rate for retail sales. Do
you realize every 10th of a percent? How many tens of millions of dollars that represents
how far off these economists are to be like [00:09:00] this. Okay. So it was within range,
but it was above consensus.
Ron Lang: What are we saying here? But the other big thing that came out, and I know
we talked about this in the pregame the biggest issue that the majority of the major retailers
have come out, and there’s only a couple of retailers that are doing very well target.
Is going down Walmart is near an all time high same consumer.
Ron Lang: Please figure that out for me. But my point is all the retailers that have been
coming out their number one theme. Number one concern is stealing. It is eating away
at their bottom line and this has been going on and getting worse for several years. But
meanwhile, nothing’s being done about it. Yeah, and it’s
Jeff Kikel: getting accelerated
Ron Lang: cameras.
Ron Lang: That’s only going to hurt the bottom line that much more.
Jeff Kikel: Yeah. And in some areas of the country, I know when we were traveling here
recently, I don’t see it as much in Texas because you would literally, if you tried
to steal something, you’d probably get shot. But open carry.[00:10:00]
Jeff Kikel: Yeah, it’s open carry and chances are you could get shot. Plus I just think,
one people respect law enforcement a little bit more here and they know law enforcement
isn’t going to. They’re not going to roll over nor the local D. A. S. But you have some
of these cities. We were traveling recently, and I literally walked into a Walgreens just
to get something.
Jeff Kikel: And I was I literally had to get somebody to unlock a cabinet to get like a
thing of razor blades. Like
Ron Lang: 10. Supermarkets like that for several years, rather ironically.
Jeff Kikel: Yeah. It’s hilarious. So it’s okay. It’s like going into a museum. You can’t
get to the things you need and I don’t want to shop someplace where I have to, okay, now
I need to go over here and have you unlock this so I can get this piece of it.
Jeff Kikel: And it’s ridiculous. It’s gone just
Ron Lang: off the quick, fun fact in history, Sam Walton, who started Walmart. Yep. The
reason why He took off and was so successful [00:11:00] was because the way retail was
done prior to 1960 ish was when you went into a store and you wanted to see something you
had to have someone behind the counter.
Ron Lang: Get that for you. He said, wait a minute. This is ridiculous. You can’t service
everybody that’s coming in effectively. So let’s put, let’s get rid of the counters,
let people get their own stuff and go from there. So Sam Walton was the pioneer in that
way to do more self service versus you need someone behind the counter.
Ron Lang: We may end up going back. We’re going back. Yeah. We may go back there. Who
Jeff Kikel: It’s amazing. The last thing I wanted to share was business inventories.
And I think this was, this is a telling thing, all so the consumer is still spending tons
of money, but businesses, I don’t think, or believe in it at this point.
Jeff Kikel: We’ve had two months in a row that are just absolutely 0 percent growth
in business inventory. So they’re just they’re not declining. They’re not [00:12:00] increasing.
They’re just sitting flat and they have for the last three months straight. At this point,
and that tells me that they’re literally running just in time across the board.
Jeff Kikel: When you start to look at business
Ron Lang: inventories. Yeah, I didn’t have the chart this time. I do have the chart.
I didn’t prepare it. One of the interesting things about businesses, it’s the second highest
amount of business bankruptcies through the first eight months of the year in the last
Jeff Kikel: Yeah, you shared that with me via text this
Ron Lang: week. So I know, but I just saw the numbers last week. I was, I’ll do the
chart next week. But I saw this number and the way it’s been trending in the last four
months is pretty insane. Yeah. Oh, that’s telling us something too. And the other thing
too, is they can’t get money.
Ron Lang: They can’t get lending. They can’t get money from the banks. Absolutely. All
right. So let me let me share my screen here. [00:13:00] Let me know when you see it. All
right. So I know it’s almost ad nauseum. It’s this is our monthly charge here. But what
I wanted to show here is that we’ve seen a little bit of a bottoming when it comes to
the two and the 10 year spread, and then what the fed likes to watch, which is the 10 year
and the three month treasury.
Ron Lang: So the reason why I wanted to show this is because. We have shown no sign of
this abating, abating really going up more towards the positive level and getting more
of a positive yield curve. We still have the negative yield curve and obviously we’ve just
seen things stabilize on both sides.
Ron Lang: We still believe this is an ominous sign whether or not we do or don’t go into
retirement We’re still going to feel we’re still going to feel the negative effects Of
the inverted yield curves on both of these sides And we’re seeing it in a lot of the
charts that you just shared and stuff that we’ve gone through over the last several months
Now, the [00:14:00] next thing I wanted to show, and I showed this once before, but obviously
this has been updated.
Ron Lang: This is really showing, the three major markets, the blue line is the spy. That’s
the S and P 500. The the green line is the RSP. That is the equal weighted. S and P 500.
. Okay. As we know ad nauseum, we know that the s and p 500, it’s eight stocks that have
been pretty much led most of the charge this year.
Ron Lang: Obviously those eight stocks are in the equal weighted, the R S P. . But here’s
the interesting thing. The I E V, that’s the European fund and the F X I is the Chinese.
Look at where they’ve been since the since the pandemic. They’ve gone basically nowhere.
I think there’s three or four countries now in Europe that are in a recession.
Ron Lang: Obviously we know China’s hurting and they decided to take some economic data
off the table and not share. If they’re starting to [00:15:00] do that, we know it’s a lot
worse than what we know and what they’re sharing. Even though we’ve always said you can’t believe
most of their numbers anyway, but obviously with their markets, remember.
Ron Lang: We, we, we trade a lot of those companies on our exchanges. So my whole point
is look at that Chinese market. If you go back they’re still at a 10 year low. Yeah.
Does this make sense? I know the infamous thing is when we sneeze the rest of the world
gets a cold is it going to be the reverse this time?
Ron Lang: Yeah, europe and china, which obviously are two of our biggest trade partners and
we get 80 of our hard goods manufactured in china Coming here. What is this saying? Yeah,
so obviously, every chart tells a story. This is the 2nd time I’ve showed this in the last
3 or 4 months. It hasn’t changed all that much.
Ron Lang: So I think we should monitor this to see what happens. I think IEV, the European
index. Is going down. Because obviously you just can’t have [00:16:00] 3 or 4 countries
in Europe that are only in a recession. It’s contagion. It’s going to spread throughout
the entire cotton and
Jeff Kikel: they run a common economy across the board.
Jeff Kikel: They, effectively robbed from the rich and give to the poor and a lot of
cases through the. The European union. What affects one is going to affect all of them
in the end. There’s some economies that are a little bit stronger, like Germany and France
Jeff Kikel: Germany’s
Ron Lang: in a recession. They were the first country in Europe to go into a recession.
Jeff Kikel: Yeah. And they’re, yeah. And they’re the ones that have been the powerhouse that
have been dragging Europe along. Until they can clear things up, it’s going to be a challenge.
And, I’ve been to I’ve been to Europe this last year going back a little bit later on
this year and, just going over there listening to the news.
Jeff Kikel: Yeah they’re in England, especially looking at. Okay. Now, maybe we need to get
back into the European Union because, the Brexit thing didn’t work well. Okay, I don’t
think it’s going to be any better if you’re part of the european
Ron Lang: union [00:17:00] now I mean look you said it about germany.
Ron Lang: They are a manufacturing And a financial juggernaut, and it’s really three main countries
in europe, right? It’s germany It’s france and it’s britain. Yep, right there the rest
of them They’re there but you get the northern europeans in the southern the northern europeans
are the workers The southern europeans are the vacationers.
Ron Lang: Yeah, so If you’ve already got two or three of those countries the Northern Europeans
in a recession, they’re not going on vacation to Southern Europe. Yeah. So like I said,
there, there will be contagion there and we’re already out of the summer.
Jeff Kikel: Yeah, we’ll see what happens, you’re seeing a lot of political strife and
in France because, God forbid the government said, Hey, we can’t afford for everybody to
retire at age 60.
Jeff Kikel: So we need you to, we need you to bump that back to 62 and, everybody went
ape shit. Oh, yeah,
Ron Lang: the unions and and everything else. Look, what’s going on right now. We’ll have
to see what happens tomorrow with our today. I’m sorry today with the night W, right? Not
Jeff Kikel: Yeah, it’s [00:18:00] midnight tonight, 14th.
Ron Lang: Yeah. And it seems like both sides have drawn a line in the sand. So get ready
within a week. If nothing gets resolved, get ready for the presidential administration
to get involved.
Jeff Kikel: Absolutely, because
Ron Lang: and they’re using the UPS union as a template for this, which we all knew
what was going to happen.
Jeff Kikel: Absolutely. Absolutely. And like I said, I think some of the demands for the
U A. W. Yes, I believe that you should get paid a fair wage and everything else. But
some of the demands are just off the charts. Yeah we want part of these profits from the
Jeff Kikel: You’re going to ensure that there’s no more profits left after
Ron Lang: this. And we talked about this with ups, look, there’s a reason for the unions,
I get that. But at the end of the day, there’s no risk to them. Because if the economy and
the business Takes a 20 to a 30 percent dump.
Ron Lang: They’re still making their money, which means what are they going to do now?
What you, the company can’t [00:19:00] afford to continue to pay. So now they got to have
layoffs. And what does the union don’t want? They don’t want layoffs. Their job is to keep
everybody working at the highest rate possible. They have no skin in the game to the company’s
Ron Lang: Absolutely not. All right. Two other quick charts. Okay. We’ve shown this chart
before. Good. And this chart’s going back almost 30 years. We’ve talked about credit
card rates, and for whatever reason, in the last six months to a year, credit card carryover
balance rates Have spiked and the crazy thing about this is that, I was pounding the table
to say Why isn’t congress getting involved here that this is egregious?
Ron Lang: This is insane And even if it was still at 16%, the person that’s got the average
credit card is not credit card balances and paying it off. We already know that credit
card balances just breached the 1 trillion [00:20:00] balance level, and it’s not getting
better. And it went up from 925 billion in December to eight months later, where it’s
over a trillion.
Ron Lang: Now how much more of the credit card company is going to make if now the balance
and now the credit card rate is almost an average of 21%. So I had to, I look, you know
how I feel about politicians in general, but I saw this article the other day. I had to
bring it up because I had to give this politician kudos.
Ron Lang: Josh Hawley of Missouri. Basically is trying to introduce a bill to cap high
credit card interest rates. And I don’t know who, what other politicians are involved.
Cause obviously he couldn’t have done it on his own, but I had to give him at least kudos
for trying to do something about it because I would say the only reason why he could do
it is because he probably wasn’t getting any lobbyists to give him any money on the credit
Ron Lang: So I don’t know who else is going [00:21:00] to get behind it, but I would love
to see the politicians that don’t get behind this or to some effect to help cap. And help
out the consumer. Cause like I said, even at 15 or 16%, these consumers are still struggling
to pay the minimum balance. And now we got the student debt.
Ron Lang: They’re going to have to pay starting next month. So this is a start, but I don’t
know if this thing is going to be DOA. If it gets any traction whatsoever. I don’t know
how you feel about it.
Jeff Kikel: I, I think for too many years the the credit card companies have basically
had a free reign because they just Yeah.
Jeff Kikel: Run a rough shot, and I largely blame our president in the fact that he’s
from Delaware and where are most of the credit card companies in Delaware? He’s been on,
he was in the Senate for 40 some odd years and never said a word about it. I think, I
don’t always agree with her, but I think Elizabeth Warren at least has tried to keep pounding
[00:22:00] the table.
Jeff Kikel: It’s exciting to see that Josh Hawley has stepped in. It’s if they can start
getting a coalition of people together to say, we’ve got to stop this. I just think
there’s so much other noise. That does this just fall by the wayside because it’s not
something that, you know, okay, yes, I’m a, I’m making it better for people, but it’s
not giving them money and all this, which is, it’s become kind of elections have become
whatever money you can get.
Jeff Kikel: What are you going to give me for me to give you the vote at this point?
Ron Lang: This all kind of plays into our national debt and the consumer debt. It’s
out of break. It’s been rising at a breakneck pace. And I don’t see it abating in, in the
right direction. Anytime
Jeff Kikel: soon.
Jeff Kikel: Yeah. And and it just, the interesting thing is how it changed so drastically during
the pandemic, which you would have thought during the pandemic, everybody’s pulling back
because the economy’s pulled back and all that, and it’s just gone off the [00:23:00]
charts, it’s really seriously gone off the charts in that time period, and then adding
Jeff Kikel: Okay. Yeah. Now we’re going to charge you 26 percent on offered literally
every four years. That amount,
Ron Lang: if during the Fed meeting next week, they talk about debt, consumer debt. And things
like that, because they do get a bit into economics, especially in the Q and a but I’d
like to see it be addressed.
Ron Lang: Cause I think this is really the bigger albatross moving forward, the national
debt and the consumer debt more than anything else. Yeah. If the banks aren’t lending, then
how are people going to get ahead? It’s fair. I hate to just, be in an echo chamber here,
but it is fairly ominous.
Jeff Kikel: Yeah. It’s just, it’s bad. And I think it’s going to continue to get worse
and worse as you go on, because, I think people don’t realize, but first off, I’m sure most
people aren’t even looking at their credit card bill to see what the interest rate is
right now. They’re just spending money.
Jeff Kikel: And as long as they have room on the credit card, it’s like the old [00:24:00]
joke. I just kept writing checks on my checking account until they started bouncing. And it’s
okay, just because you still have checks left doesn’t mean that
Ron Lang: you’re I did a survey in a couple of seminars that I’ve spoken at in the past
and the common theme is about eight and a half out of every ten people don’t even balance
Ron Lang: Yeah. So if you’re not even balancing your checkbooks or ticking off what checks
clear, how are you paying attention to the rest of your finances? Yeah,
Jeff Kikel: you’re not. And most people don’t, I find that when I talk to people, I do financial
planning and I talk to people about what do you spend monthly?
Jeff Kikel: Oh, about 4, 000. Yeah. Okay. So you make 12, 000 a month, you spend 4,
000 a month. Where’s the extra, eight grand. Oh I’ve, you’re not saving it. So where exactly
is it going? It’s just evaporating miraculously.
Ron Lang: I know it’s amazing how many holes when you’re doing, I’m doing the same thing.
Ron Lang: I asked people the same questions and I’m like, wait a minute. You should have
an extra 50, 000 of cash surplus a year.[00:25:00] You have 5, 000 in your bank account. What
are you spending money on? Where is this
Jeff Kikel: going?
Ron Lang: Crazy. Like I said, the next couple of weeks we’ll get in, get interesting. So
I think we say this almost every week, but get your popcorn ready.
Jeff Kikel: Yeah, definitely. I think we’ll have a lot of economic numbers this month.
You got a Fed meeting next week. So we’ll we’ll be reporting. I think they’re if I remember
correctly there Tuesday on the Fed meeting if I’m correct. So we should have stuff coming
out of out of the Fed meeting.
Jeff Kikel: This morning, the European Central Bank raised rates another quarter point. So
that makes them even with us now to, to 11. Do we push it to 11, just like on, on the
Ron Lang: I hear you. Actually, at this point, dude, I think we’re going to 12.
Jeff Kikel: I think so. I don’t see it stopping with CPI and PPI. I just don’t see it stopping.
They may pause for a month or so, but I just don’t see it stopping at
Ron Lang: this. Look at a lot of the [00:26:00] very smart people that I follow. Many of them,
I’m shocked because look, they’re all predicting the same stuff.
Ron Lang: You and I are, many of them are saying it would be a mistake to raise it another
quarter point. And I’m like, really? I don’t see how a quarter point is going to make a
significant difference, but I don’t know.
Jeff Kikel: There’s that breaking point. We just reach a point where it’s a breaking point.
Jeff Kikel: But like you were saying, when we got on originally, this morning markets
are all up, I look at most of this data is not really good for the future and the markets
are up, which I guess they’re all keying off of that. The consumer spending number.
Ron Lang: At this point, I think that and also market historians always say, when we’re
nearing the end of the rate, that’s when the market real, that’s the time to get in.
Ron Lang: The end of the rate hiking cycle. Yeah. And I’m thinking to myself. Yeah, but
the lag effect, the economy. It [00:27:00] hasn’t reached its depth. The tentacles haven’t
been stretched out as far as they should. And if you truly are a market historian, yes,
the market goes up well before the end of the cycle, before it goes down.
Ron Lang: A lot of this has, we know is just a lot of computerized trading, trading off
of economic numbers. So we’ll see how the market closes today, going into the Fed meeting
Jeff Kikel: Absolutely. And a lot of it trading off of Twitter or X and. You could say they’re
actually all on X at this point.
Jeff Kikel: Yes.
Ron Lang: Yeah. You actually use Twitter as a verb. Hey, did you tweet? How, what are
you saying? Hey, did you X?
Jeff Kikel: Did you X today? Yeah. I’m not
Ron Lang: sure. I don’t know. I love Alon. But I don’t know. I think he’s lost his mind
at this point.
Jeff Kikel: Who knows? I don’t know. Just anything he names, that’s the challenge that
he has because you’ve seen his kids names.
Ron Lang: We got SpaceX. You got the Tesla X. Now you got Twitter or X Twitter.
Jeff Kikel: Twitter X. It should have just been Twitter X. It would have made it much
easier and simpler. [00:28:00]
Ron Lang: Crazy. All right.
Jeff Kikel: All right. Thanks a lot. Folks, we do this every week for you. Make sure that
if you haven’t go back, watch the previous episode.
Jeff Kikel: And just if you need to just watch the first few minutes, we’d love your vote
on the the photo of the week of the unique photos that Ron put on there. And if you hadn’t
seen it yet. You just need to watch it for that one very thing because it’s hilarious.
22 episode 22. We do this every week for you.
Jeff Kikel: So let us know, make sure you give us an upvote subscribe or give us a comment
so that we know you’re out there and that you’re watching. So thanks a lot. And we’ll
see you guys back here the very next time.