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Cents of Things – Summer Slowdown or Continued Rocket Ship – Episode 13


Cents of Things Episode 13 === [00:00:00] Jeff Kikel: Hello, sense of things. It’s Jeff here and Ron, and we’re kicking off another

weekly update on what’s going on in the world what’s going on in the economy and what’s

going on in some goofy little thing that we’ll probably talk about here at the beginning. Ron, how Ron Lang: are you doing, buddy? Not too bad. Not crazy with the heat, but I heard July

3rd and I think yesterday may have topped it. Ron Lang: Hottest day on Earth in history. Wow. I don’t know how it was by you, it was

hot here, but it was manageable, but no. Such thing as global warming, right? No. Although

it’s called climate change today, but no such thing. We had Jeff Kikel: the the hottest, I think it was on record, the hottest heat [00:01:00] index

day. It was 118 degrees. Jeff Kikel: But I think two weeks ago. Wow. So pretty much anything over a hundred is

just unbearably hot, so it doesn’t really matter. We’re, look, we’re actually below humidity now. Humidity is bad too. I almost had to put a jacket on this morning cuz it

was 80 degrees when I got out of bed. Got outside. Ron Lang: I hear you turn off that ac.

Ron Lang: Oh, I know. Yes. Yeah. I hear you now. Listen the summer’s just getting started,

right? We’ve got at least another 60 days to go until labor Day and a lot of interesting

things in the market. There’s no summer slowdown, rather ironically despite the pullback in

the market today and the other international markets not liking. Ron Lang: Know the Fed outlook and all the other good stuff. Yeah. Even with all that,

I thought, a couple of things that were pretty interesting were I. That July seasonally is

typically one of the best months of the year. Interesting. And even coming off a terrific, first half, best first [00:02:00] half in 40 years, even though it was only eight stocks.

Ron Lang: July is still, the seasonally the one of the best months of the year. So it should be interesting to see, did we have a blow off top last week? At the end of the

quarter, end of the half, or. Are we just getting a nice little pullback to continue

on the rally here? Although I think you and I both agree, it’ll probably, come to a head here by September, October.

Ron Lang: But yeah, July is seasonally pretty Jeff Kikel: good. And I, I think too, it’s, people are tending to be a little bit away

from the market, so you don’t have as much volume on the markets. I’m watching it across some of the stocks that I follow and, you can just see volume just been dipping off

over the last few weeks. Jeff Kikel: Those moves in the stocks can be magnified too by what’s going on.

Ron Lang: And also with lower volume, the stock prices are gonna get pushed around. I’m just quite surprised. That with those top age stocks in the s and p with as much

of a move. And last week was an absurd move. Ron Lang: Parabolic [00:03:00] move. Yeah. Where’s the profit taking in those stocks?

People are gonna go away on winter vacations. You would figure, all let me harvest off some profits. Take a little bit off the top here. Didn’t really happen as much, which is a very

interesting, a, Jeff Kikel: quite a lot. No, I think it’s an interesting play. Jeff Kikel: I think there’s so much interest in artificial intelligence and all that and

they’re trying to it’s interesting to me to watch. How the market is put. It’s almost

like they’ll just build in some kind of artificial intelligence thing into every company. Sure.

Even though it’s gonna be a minuscule part of profits, Oh but they’re using artificial

intelligence and most people don’t even understand what artificial intelligence is. Jeff Kikel: And you know how it’s being used. It’s been around for years, decades, nothing

new that a lot of these companies have been doing. If you wanna talk artificial intelligence, why is IBM just languishing along? I mean they, with Watson, they’ve been doing [00:04:00]

this for the last 20 years. Yep. Ron Lang: I think what’s interesting with the ai, and I know we talked about it, AI

started back in the seventies and the eighties, and just, we know there wasn’t the computing power.

Ron Lang: I know that’s one of the reasons, but. If I could look at ai, we’re only still in the first inning. Oh God, yes. Maybe second inning. I think AI is really where EV was

10 years ago. Where the internet was 30 years ago. Yeah. It’ll be something someday, I think

we all agree, but there’s just so much fluffing in these stock prices because until it truly

becomes commercialized and monetized. Ron Lang: It’s gonna take a long Jeff Kikel: time. But so much of AI is not gonna be like the direct chat G p T type products

and stuff like that. It’s just gonna be merged into a lot of what companies do, and I tell

you, it’s akin to. The productivity curve. I think that happened, early or mid nineties

through, let’s call it 2001, 2002, [00:05:00] you had that massive productivity increase

because, you think about it prior to that. Jeff Kikel: When I. When I started in business, there was still at the, it was at the end

of, oh, you had a secretarial pool and you gave your stuff to a secretary and they typed

it in, or whatever. Now we do all that, we type in I’m faster probably typing than half

of the people that work for me over the years. Ron Lang: About 15 years ago. Quick, funny story, about 15 years ago, I remember having

an appointment with somebody and he was definitely a veteran and he got out of the corporate world for being in there 35 years. Yeah. And he always had a love for coffee. Yeah. So

he was importing beans from all over the world and packaging and selling ’em in the US and

he was very old school. Ron Lang: And I’m being very generous with that phrase. And I remember him saying, I.

I got frustrated with my computers. Didn’t call it software with my computers. Every time I need a report, I gotta call down the data of processing. I. Data of [00:06:00]

processing. What the hell? What do you got those the cathode ray tubes, that are out

of the top and you gotta replace them. Ron Lang: Yeah. That UNIVAC system. The ENaC system. You know from University Pen?

Jeff Kikel: Yeah. The card things. Yeah. They put the big stacks of cards in and. Ron Lang: God, I gotta call down the data processing. I was like, that was only like

15 years ago. That was the last time I heard something like that. But yeah, the technology is gonna evolve, but I think that there’s 10 to 15% minimum.

Ron Lang: And a lot of these top tech stocks that are just what I’m gonna call hype fluff.

Yep. In that price, I totally, and the air will come out at some point, but people will stay in the big boys until AI truly becomes something, we’ll have to see where it goes.

Jeff Kikel: But I think, I mean we’re seeing some, a little bit of breath coming into the market, it just seems like the money’s not coming out of the big ones.

Jeff Kikel: What you would think is okay, people start to take profits and then they shift. Cuz money is not created or destroyed it just moves [00:07:00] to different places

and we’re seeing some breath. Explain, expand in the market a little bit, which is good.

But you’re still seeing those, eight to nine stocks that are just running the table at this point.

Jeff Kikel: And I just don’t know when it’s gonna stop. Ron Lang: I, you know what? Look I’m on record. I really thought we’d be 500 points less Yeah.

On the s and p by the end of June. Sure. But that, that was immediate term. I think my long term thesis is still intact. My short term thesis, rather, ironically, the target

that I had for the end of June Yeah. Ron Lang: Actually was hit. In March with the banking crisis. Okay. And then it bounced

from there and we know where it is now. But I actually, I got some charts I think you and I could probably go through. Jeff Kikel: Yeah. Go ahead and share those

Ron Lang: and then I’ll your mind that I think would be would be helpful because I think this is just going to reiterate.

Ron Lang: A lot of the things that we’ve been talking about. One of the interesting things about this, if you go back looking at the s and p 512 month price earnings ratio [00:08:00]

compared to the real 10 year yield. Yeah. The real 10 year yield has always been the

leader. And the s and p has always followed it. Ron Lang: You can see when it went down, s and p went down. When it went up, the real

the treasury yield is, the 10 has always been called the North Star. Yeah. Then all of a

sudden in 2022 with the rise of inflation it diverged. And if you notice from the beginning

of 2023 with. Ron Lang: People thought obviously a lot of the tech stocks were outta low. AI all of

a sudden became to the f you know, to the forefront versus the background. It took off while the real rates basically, languished. Yeah. So one of these is going to win and

I think you and I know which is going to win because The bond market is the smarter market.

Ron Lang: It always has been. It’s a much larger market than the equity market we’ve spoken about. And typically the bond market is six to nine months or more ahead of the

stock market. Yeah. And a couple of other interesting [00:09:00] things here, and I know this is a little bit of a busy chart, but if you just take a look at the liquidity

in the market compared to the s and p. Ron Lang: The liquid, the liquidity has pulled back. It’s gone. It’s gone down while the

market has gone up. So you can’t tell me that. That’s just not fluff. Yeah. This comes from

the St. Louis Fed, our friends over there that always produce these wonderful economic charts. And then just drilling down a little bit more, I know we’ve showed similar charts

to this. Ron Lang: This is, I have two charts. It’s the 10 and the two year, and it’s the 10 year, the three month. So we’ve talked about this several times where. You can see, and I know

we’ve done this chart a few times where you can just see every time we’ve had a divergent

or a negative rates with the two year going below the 10 year, or I’m sorry the 10 year

going below the two year a recession is followed. Ron Lang: The we hit negative one a negative one, [00:10:00] divergent with the 10 year

and the two year. If this isn’t like a steepening, not only a steepening of the curve, but also,

the re the banks are tightening credit. So less money is going into the market for borrowing.

Ron Lang: We have the issues with commercial property. I think I just saw some stat, don’t

hold me to this, that Manhattan, New York City is like at a 30, 40, or 50 year all time

high. In vacancies. Yeah. In office space. It’s insane. And of course, the chart that

was one of the fed’s favorite chart is the divergent with the three month over the 10

year this goes back over 40 years. Ron Lang: Yeah. Look how low we are. Yeah. The Fed a, and again, I know we talked about

this in our pregame, the Fed is telling you and telegraphing. What’s happening? They haven’t

lied. They can’t tell you, is this the last, rate [00:11:00] hike or when do you look? They’re not gonna tell you that. What they did say is rates are gonna stay high for a

long time. Ron Lang: And they’ve been saying this for six months to nine, six to nine months. Why

would people doubt them? Yeah. Now actually the Fed futures have now priced out a potential

rate drop. A pullback before the end of the year, which you and I were just laughing at

Jeff Kikel: over the last few months. Yeah, mean, it’s okay, they’re never gonna do that. Jeff Kikel: They’re never gonna go from okay, extremely tight. Extremely tight, okay, now

we’re gonna loosen, they’re gonna let it set for a while and see, how it all starts to affect. And then they always rela, they always react later, in response. They don’t preemptively

do this. And why would you think in less than six months, they’re gonna change their minds drastically.

Jeff Kikel: At this point? No. Ron Lang: They’re always behind. They’re always behind the curve. Yep. We know that. But even back in May, I know I said it, I believe you echoed it when people were talking about,

oh, they’re done. Yep. No, [00:12:00] I said we were talking. No way. It’s probably gonna be one to two more rate hikes and all they did after they said they paused in June.

Ron Lang: Or they don’t wanna call it a pivot, all that language. They still said one to two more. Yeah. We were correct in that assumption in May, and they said, and people are now

saying at least one to two more why would you doubt their word if data isn’t drastically

changing? Jeff Kikel: Yeah. It’s starting to I can see it’s starting to have some effects, but we’re

still over 4%. Jeff Kikel: Inflation. And I think this is gonna be the stubborn point, it was relatively

easy, surprisingly, to get it from nine down to four, but, go it, it’s like losing weight.

You lose a whole bunch at the beginning and then there’s that point where you plateau out and it just doesn’t go any farther.

Jeff Kikel: And you’ve gotta work harder and harder. You’ve gotta do more damage to get it to, to go farther down.

Ron Lang: That and that big bowl of ice cream late at night, and that Reese’s peanut butter cup on top doesn’t help [00:13:00] either

Jeff Kikel: that can do it. And we keep chowing down on the bowl of ice cream. Jeff Kikel: Every time the fed says no, we sneak in, the government sneaks in overnight

and grabs a big old carton of ice cream and just starts chowing down on it again. It’s,

it I think there’s just that com or that, Constant back and forth. Jeff Kikel: But, I see, this is good enough time to talk a little bit about the student

loan thing. That failed or it was struck down by the Supreme Court last week, all right.

So that says there’s really no relief for a lot of those borrowers out there and August. Jeff Kikel: They have to start paying again and they have not paid for, going on three

years now. Yeah. I think you were saying a stat that was somewhat shocking to me.

Ron Lang: 18%. Yeah. Yeah, 18% of the people that have student loans haven’t paid a dime

since the moratorium went in place. I dunno it was it March or April of 2020. Ron Lang: Yeah. And I’m sure those are the same people with the high credit card debt

and [00:14:00] everything else. If they have to be forced to start paying their student loans. And I know you and I have seen different stats that I think you saw two 50, an average

of two 50 a month. I saw three 50 to 400. Yeah. It’s let’s just call it 300, right? Ron Lang: Yeah. That’s an extra $300 a month that they’re not just freely spending into

the economy that’s going now To pay down a loan. Yeah. And now what happens if they don’t have that $300? That means something else gets sacrificed.

Jeff Kikel: Yeah. Something gets sa sacrificed or people start filing bankruptcies and, that

fold. Jeff Kikel: Yeah. All that starts to fold out into the real estate market and everything else. So I think there’s a lot on the table now that’s, it’s a reckoning that I think

a lot of people that have not been paying that 18%, I think they li they realistically

thought that it would just, they’d never have to pay ever again. Jeff Kikel: And they’ve gotten used to not paying now.

Ron Lang: Not only that, but to shift gears like to the the commercial property [00:15:00]

market. Yeah. Where they were talking about the vacancies being really high, which means the revenues have pulled back for many of these commercial property owners.

Ron Lang: Simon is the one of the largest ones out there. And one of the big things is they were talking about how much of their loans are coming due in the next two to four

years. Yep. It’s in the hundreds of billions of dollars that, what are they gonna do? Walk

away from their properties and hand it over to the bank. Ron Lang: The bank doesn’t want the property. Yeah. So what are they gonna do? They’re gonna

just maybe sell it to Amazon for more distribution Jeff Kikel: centers. Yeah, no kidding. Or, I thought the funniest thing is well, we’ll

just convert all that, we’ll convert all these commercial properties in New York to apartments. Jeff Kikel: Okay you’ve got who’s gonna buy them? Who’s gonna, who could afford ’em? Who’s

gonna, who’s gonna rent them? There’s 500,000 people that moved out of New York in, in the

last two and a half years, you’ve got a negative 500,000 that have moved out of state. Okay.

Who’s gonna rent these apartments apparently in New York City? Jeff Kikel: Are you gonna use them for the [00:16:00] homeless people or the. The people

that are coming across the border. I guess that’s the only solution at this point to having that’s what that, what San Francisco’s

Ron Lang: solution was. They’re putting the homeless people into hotels. Yeah. Jeff Kikel: Yeah. So we’ll just make some, we’ll take these offices and turn ’em into

hotels cuz we don’t have any hotel space in the town anymore. Jeff Kikel: Yeah I just, it’s interesting and, you know me I’m always a big fan of the

leading economic indicators. Yeah. Let me show you, you got couple charts. Let me show you this chart on the L e I. So this is May l e i. So it was reported in late June. Once

again, mirroring what you were showing on a bunch of your charts. Jeff Kikel: We’re at one of the lowest points we’ve been in a long time. I think the only

thing that’s really holding us there is GDP is just amazingly resilient point. That’s

a consumer. Yeah. And so GDP p’s still hanging in there, so you typically don’t see a recession

until GDP goes negative. Jeff Kikel: Now we’re [00:17:00] still on that trend. But we’re still a ways away from

hitting that zero line and going below, which would indicate that we’re truly in a recession

now. Mid-June or next couple weeks we’ll get the June numbers and we’ll see where we’re

at. I think we’ve seen G D P, it actually kinda had a little bit of a spike up here recently.

Jeff Kikel: Yeah. So until we see something different, we’re certainly indicating that, and I think the biggest things in here, when you started to look at. This was a massive

l e I change down 4.3. Some of the, that both over stuff in there. Consumer expectations

for business con conditions, index of new orders was down pretty significantly.

Jeff Kikel: Interest rates spread that 10 T bond, less fed funds leading credit index.

So a lot of these things are starting to. To come down and I think, consumer expectations

of business conditions being down as much as they are, that’s intriguing to me because they keep, the consumer keeps spending, [00:18:00] but they’re thinking business conditions are

much Ron Lang: worse. Ron Lang: Was that is that l e I change, is that month over month or year over year? Jeff Kikel: This is month over month. Okay. Yeah. Or no, this is year over year. I’m sorry.

Yeah they year over year. Ron Lang: Now, the interesting thing about the gdp d p, because I think it’s an old,

antiquated way of measuring a recession, of course, because two, two quarters of negative

growth, so if we’re at 5% and all of a sudden we go to four and a half to 4%, G D P, we’re

in a recession. Ron Lang: Yeah. Come on, 4% gdp you know what I’m trying to say, but take it a step further.

Many times they say that the market will bottom. Before two straight quarters of negative G

D P growth. So by the time the G D P goes negative for two straight quarters, the market

is typically bottom. Yeah. And I think we’ll probably see that if not q4, q1, but by then

I think. Ron Lang: The bottom would’ve already come out of the market in that [00:19:00] timeframe. We’ll

Jeff Kikel: have to see. You think so? We, we’ve just continued to run and run on the markets at this point, so I don’t know what’s gonna stop ’em. I think we’re in a kind of

a weird generational shift Ron Lang: actually. Ron Lang: Do me a favor, Jeff, stay on this chart for one second. If you notice the l

e I goes negative before the recession. Oh, yeah. Jeff Kikel: Yeah. And it typically, but it doesn’t. If you look at it l e I goes negative,

and pretty much significantly goes negative. And then the recession is indicated typically by, somewhere in here.

Jeff Kikel: The, the GDP goes negative or at least touches the 0% line. We’re getting

there. And certainly the l e I side of it we’re one of the lowest points since 2000.

We’re the. Third lowest point since 2000 and still going at this point. Yeah, I still believe

that it’s out there. Jeff Kikel: I don’t know if it’s a soft landing. I don’t know if it’s a short recession like

we had, during C O I D where then we spiked back up. But we’ve just been on a continual

downward spiral since [00:20:00] 2021 and I don’t really see it turning around anytime

soon. Because you’re just now starting to really see some of this stuff go. Jeff Kikel: Significantly negative.

Ron Lang: Yeah, actually the The P M I, which measures the manufacturing Yeah. Was in the

low forties. Yeah. Typically 50 and above is supposedly positive. And I believe that

they were looking for like a 48, 49 number, and I think it came in around 43 or 44. Yeah.

So that’s just telling you manufacturing is slowing down, also Jeff Kikel: manufacturing. Jeff Kikel: And like I said, then you see it indicated here in the The, I sm you know,

new orders index down really significantly. It’s down Ron Lang: almost the one, the Issm, I’m sorry, not the pmi, the I S M. Yeah, that’s what

I meant. Yep. Jeff Kikel: Yeah, so yeah. Significantly down. So that’s just saying, okay. A lot of those

companies are sitting out there and saying, Hey, I’m not making any major investments right now. Jeff Kikel: We’re just gonna wait and see. And, that’s rolling down through the manufacturing

sector. That said, if we [00:21:00] look at the the Fear and Greed index, we still remain

at Extreme Greed. The last time we were at Extreme Fear was over a year ago. We were

down in the 20 twos, which was one of the lowest. Jeff Kikel: Times we’d seen in many years. And that’s Ron Lang: where they were raking the raising the the rates 50 and 75 basis points, like

six, six times in a row. Jeff Kikel: Yeah, absolutely. Yeah. And that was at that very point where, starting in

March it just started to really get hammered hard. Jeff Kikel: Yeah. And we went into that extreme fear, but it’s been extreme greed, once again

led by just a few stocks here and there. A lot of strength in the markets. This I think

is the, one of the more heartening things is the stock price breadth. We’re starting to see that breadth being expanded in the market a little bit, but once again, it’s

still being led by those eight or so stocks that are just like a rocket ship going up.

Jeff Kikel: Don’t forget Ron Lang: too, a lot of that is, retire company retirement money, it’s gotta go somewhere.

And in the top funds, [00:22:00] whether it’s a growth or balanced or whatever, those top

eight stocks are in every single one of those funds. Yeah. So the money is constantly flowing there.

Jeff Kikel: Yeah. And so many people investing in the s and p 500, through indexes and everything else, all that money just plowing in, it’s gotta go someplace.

Jeff Kikel: And it’s just getting continually poured into those. Those stocks. And I think the other reality, the, a lot of people, we’ve got the largest generation in history ever

moving into retirement. 10,000 people a day, and they’re, their reality is they have to

stay in the stock market because the yields are still better. Ron Lang: Absolutely. And you’re not even talking about, even on, regular equities.

You have other alternatives in there between treasuries, which are not really taxed advantage, right? But then you have preferred stocks. You have other types of stocks that are yielding

high and selling at a discount. Ron Lang: Yeah. So you’re gonna make money on both sides if you have a little bit of

a longer term horizon. Sure. [00:23:00] Two to three, three to five years on a lot of those to, truly work out. To earn five to 6%. Why wouldn’t you?

Jeff Kikel: Yeah, absolutely. And it’s, if we believe the Fed, which I’m inclined to

say I do, rates are gonna stay high for a lot longer than you think. Jeff Kikel: So why would you not take advantage of a riskless rate of return? Certainly. Why

would you have cash sitting around at. Point nothing when you could have money shifted

in the treasury, even short term treasuries making 4.9. Ron Lang: At this point I, and I think if I just saw it this morning the two year hit

5%. Ron Lang: Okay. Back. And they say, and I had heard from some people that I do respect listening to, right? Cuz I’m not the smartest guy in the room. But I try and listen to as

many people as possible. They said a two ex, a two year note at 5% is typically the straw

that’ll break the camel’s back as far as Now things are adjusted [00:24:00] where the banks

are gonna have a tougher time lending and making money. Ron Lang: Less people will wanna borrow. 5% is typically that that straw, that magic point.

Yep. I don’t know. We’ll have to see. It did hit it not too long ago, but then stay there. So if it continues to rise and sustain. Again, I think everything that we’ve been talking

about for the last few months will eventually kind of pan out here past Labor Day. Jeff Kikel: I know from my own internal, internal portfolio strategies this week. I rebalanced

all portfolios for the end of the quarter and, any excess cash. We just moved into,

two year treasuries at this point. Yeah. Cause they were all sitting. Yeah. I think I was buying at 4 94 or whatever.

Jeff Kikel: Why wouldn’t I, why would we not. Do that. Why would we have cash? Ron Lang: Actually forget about two year. You could go into a six month Yeah. For five

two or five three or whatever it is, and not tie up the money as long. Obviously it’s great

if you have, do have somebody in retirement to know, hey, for two years or gonna get 5%. Ron Lang: Yep. We’re risk [00:25:00] free. It does make sense. But If that’s the case,

more money is gonna flow into that market. And meanwhile, at the same time talking out the other side of their mouth, the Fed is trying to shrink the balance sheet. Yeah.

So if they’re trying to shrink the balance sheet, it’s only gonna push yields up. Jeff Kikel: Yeah. It’s

Ron Lang: in the short term, pre-retirees and retirees are gonna feel pretty good in

the next few years. They’re not gonna grow their portfolio exponentially, but certainly they’re gonna get the income and the asset protection that they desire. Yeah.

Jeff Kikel: Where they don’t have to take a ton of risk at this point to get five, 6%, it’s not that hard to do when you’ve got rates as high as they are.

Jeff Kikel: And like I said, I don’t foresee. Inflation going down below that 4% rate for

a long time at this point I don’t think there’s, I don’t think there’s much else that the Fed can do on their side to, to pull rates or pull inflation down. It’s gonna have to be

from the fiscal [00:26:00] side and the fiscal side. Jeff Kikel: Washington just wants to spend money no matter what, they wanna get reelected.

Yeah. It’s how you keep getting elected every time is by, okay I don’t, I think your idea

is stupid of what you’re spending money on, but we should spend money on my stupid idea instead.

Jeff Kikel: And, it becomes this never ending. Never ending spending spray. Ron Lang: Yeah. No, they gotta help their constituents or nobody’s gonna vote for them.

And I hate to say it, the average. Citizen out there is just about, they really don’t

care about fiscal responsibility with the government. They’re concerned about themselves, their house, their community, and that’s it.

Ron Lang: Yeah. What’s going on in the rest of the US Doesn’t matter. I only, I’m only concerned about what care’s going on here, and I get that to a certain extent, but at

some point you just gotta realize, I understand you gotta take care of yourself, but the recklessness.

And the absurdity of the spending on both sides [00:27:00] is just ridiculous.

Ron Lang: And this whole debt ceiling thing is my last quick point, that’s great. They cut spending in some areas. The borrowing is still going up. We’re not doing anything

to cut our debt in half. I honestly, Jeff, I was thinking about it, had a couple good

conversations with people that were in the government on the defense contractor side. Ron Lang: And I’m like, how do you cut the debt in half? Because the money’s already

out there, right? It’s already been spent, it’s already in somebody else’s coffers. How

do you cut it in half? The only way to reduce the debt is to reduce the spending. Yeah.

So two thirds of our spending is in entitlements and in defense.

Ron Lang: What are we gonna do there? How are we Jeff Kikel: gonna be able to cut in half? I guess the good thing that’s gonna be eclipsed

in the next few years by the amount of these higher rate bonds that are out there, so that

defense spending and entitlement spending will be far eclipsed by what we’re paying on [00:28:00] our debt.

Jeff Kikel: So we’ve charged our credit cards up. Much much like the rest of the economy. We’ve charged our credit cards up and now we’re gonna be paying much higher rates on

our credit cards as a cou, as a country at this point. Ron Lang: Yep. And we already talked about how that’s at an all time high.

Ron Lang: Yeah. Carry over credit card balances. At some point when they’re not paying their

student loans and they can’t afford their monthly payment, even the interest on that

payment, guess what? The bankruptcies are gonna skyrocket. But at the end of the day, what they don’t realize is that the credit card debt and their student loan debt does

not get discharged than a bankruptcy. Ron Lang: We’re still on the hook for it. Jeff Kikel: Yeah. Yeah. It sticks around with you forever, like luggage, so absolutely.

Ron Lang: Absolutely. Yeah, it’s I’ll have to say, it should be interesting as the summer

goes on, the volume in the market goes down, see how much it gets pushed around. I think

where I think I saw. Ron Lang: 60 to 65% chance [00:29:00] at this point of a rate hike in July. Because the

next one after July is in September. Yeah. Which it is a long timeframe there and a lot’s

gonna happen between July and Jeff Kikel: September. Yeah. And you figure the student loan stuff is gonna hit. Somewhere

in August. I think it’s like the 21st or something. Ron Lang: Oh, okay. I thought it was, it doesn’t matter at the end of whatever it is. I think

their first payment is in September. Jeff Kikel: Yeah, it’s August or September start. Yeah. Somewhere around there. So yeah.

But it ends in August. Yeah. Just perfect time for everybody to go back to school and everything else and have to start paying on that.

Jeff Kikel: But I, I think it was shocking to me. I think you, you told me that earlier today of the percentage of people still in their fifties and sixties that are paying.

On student loans at this point, which is insane. It’s a Ron Lang: smaller percentage, but they’re still out there. Yeah. So we’ll have to see

how it goes, but I can’t wait to hear all these idiot pundits that have been saying

no recession soft landing. Ron Lang: No landing after what we sees, probably what’s gonna happen here in the next 60 to

90 [00:30:00] days between the student loan, the commercial property, and some of these other factors as they come to some type of a crescendo. Yeah,

Jeff Kikel: absolutely. We’ll be talking about it for sure. Thanks folks for staying with

us. Jeff Kikel: Make sure that if you have the opportunity give us a comments of things that

you want to hear. We’ve gotten some wonderful comments and I think one of these times down the road we’ll call you guys out and say thank you for for your comments because we really

appreciate it and it’s helped to make us a better show as we’ve gone along here. Jeff Kikel: And certainly Love to love to share everything we can with you. So make

sure that if you have any questions, share ’em with us in the comments. Certainly give

us a if you can, and make sure you subscribe to the channel so that you catch these every time they come out. Thanks a lot and we will see you guys back here next week.