COT 107 ===

Jeff Kikel: [00:00:00] Hello.  Cents of things. Audience,  

it’s Jeff and Ron here once again with another  episode of The Cents of Things. And on today’s  

show we’re gonna cover a little bit about  debt credit cards. We’re also gonna get  

into a little bit of the economic calendar  for the week and take a look at the let’s  

just say the highly smart organization that is  Moody’s downgrading the US government credit.

So stay tuned. We’ll be right back  on in just one second. Hey everybody,  

welcome to the show, Ron. How are you doing  bud? Good morning. Never a dull moment,  

as I like to say, with the market and news  and everything else. We’ve had a hell of a  

run in the market over the last couple weeks  on nothing more than just headline rhetoric.

Ron Lang: There was some good earnings  news in there, but for the most part,  

not much has changed and not nothing has been  signed, and it is just all headline rhetoric.

Jeff Kikel: So I think one, [00:01:00]  one deal has been. Signed so far and  

that’s it. And even that was  okay, is really signed. Yeah.

Bri Britain

Ron Lang: and China hasn’t been signed.

Jeff Kikel: Great Britain basically has, it’s at

Ron Lang: lease agreement. They have a term of  agreement. They don’t have anything signed yet.

Jeff Kikel: Yeah. And I think all of that  stuff’s gonna take a while to get it all signed  

or whatever, but at least if you handshake  it a little bit and they get some clarity  

hopefully that’ll be a, something that says,  okay, this is a framework we can work from.

I think China is gonna be a whole different  animal in and of itself. I don’t see that  

being done this year. I know other people, they’re  like, oh, you hate the administration. I’m like,  

no. Just being realistic. Come on now.  Yeah. But we’ll see. We’ll see what happens.

Yeah, it’s complicated as hell and there’s  a lot of other hair on that deal with with  

China just because of their pen or per chance  to like to steal things from other people.

Ron Lang: I agree. What do you got for,  let’s kick us off. We have an old story.  

What do you think? Yeah. We’re heading into  the summer, so I felt like we really needed,  

we hadn’t [00:02:00] visited our friends,  the Florida men in a while, so I figured we  

might want to kick off summer with a little  Florida men. It’s a little warm down there,  

so they they tend to get a little goofier  and crazier during the summertime.

Jeff Kikel: Oh, first one. Florida man  gored by bison in Yellowstone National  

Park. Now they, here’s the funny  part, man allegedly kicked a bison  

and was attacked by the animal he was  charged with being under the influence  

of alcohol. You think? No disorderly conduct  approaching wildlife and disturbing wildlife.

Yeah, I just, you know what? You deserve  to be gored. If you kick a bison,  

you moron. Hold on. Now. I know what It’s  funny. Two years ago when we started this,  

you’d never heard of Florida man, and  I brought it up to you and you’re like  

obsessed with it. But I think every  state should have a sign to say,  

if you’re looking to perform a Florida Man  [00:03:00] Act, Florida man or Florida woman.

Ron Lang: ’cause we’ve shared a  few of those. Yes. Now we have.  

You’re not allowed in the state and  you’re not allowed in state parks.

Jeff Kikel: Please get out. Okay, so here’s  another one. Naked Florida man prompts airport  

evacuation after claiming he planted a ball, of  course. So I don’t know what, hold on. Was there

Ron Lang: alcohol involved?

Jeff Kikel: I don’t know if there was  alcohol involved here, but the best  

part is police use a taser on the naked man  when prompted, who prompted the evacuation?  

Why did you need to taser  him? Is what I’m trying to

Ron Lang: figure out. If  had a weapon would’ve been

Jeff Kikel: able to see it. I’m thinking he’s  

probably not hiding a detonator on him  at this point, but we don’t dunno that.

We don’t know you dunno that. So we just, that  we just decided to taser the crap out of him,  

mainly because it was really funny to do  in the middle of an airport. Wow. I love  

it. Okay. [00:04:00] Florida man sent, sentenced  an egg smuggling case. So a Florida man has been  

sentenced to 21 months imprisonment for smuggling  Australian cockatoo eggs into the United States.

The Department of Justice announced today the  eggs whose importation is prohibited under US  

law. Were worth 603 grand for 21 eggs for  cocka fricking go to your local pet store,  

you can get a cock fricking too. Why do  you need to bring eggs in? I don’t get it.

Ron Lang: Because it didn’t cost him  anything and he was gonna sell ’em in the us.

Jeff Kikel: There you go. Okay, so this one,  I’m, this one I’m trying to figure out. Okay.  

So I’m sitting here saying, okay, Florida  man steals alligator from golf course. Okay,  

that makes sense. Tries to teach it a lesson by  throwing it on the roof of a bar. Now let’s dig  

into the story a little bit more, and this will  tell you how weird Florida can [00:05:00] be.

A Florida man told police officers  he was teaching in a lesson when  

he tried to throw a live alligator he  had stolen from a miniature golf course  

onto the headlight, threw me off onto the  roof of a beachside cocktail lounge. Okay,  

why do you need a an alligator?  Miniature golf course. I get it.

It’s, maybe a hazard to play, but I got nothing.

Ron Lang: It’s almost like these  stories are just made up. I mean it,

Jeff Kikel: unfortunately,  they’re not. That’s the problem.

Ron Lang: My favorite story goes back  to the one that I found that somebody  

goes into a thrift shop to buy a max to go  across the street and rob a gas station.

There we go. That genius. You could make that  up, but that could only be a Florida man,

Jeff Kikel: but it can only be a Florida  man story. Okay, so here Florida man,  

high on meth, climbs onto stranger’s roof to  howl deputies [00:06:00] say. And I’m like,  

look at this creepy son of a, you know what, on  top of this, oh my God. He looks happy though.

He looks very happy. He looks like he’s  ready to chew somebody’s face off. Okay he’s

Ron Lang: on crystal meth. He might  not have much of his teeth left.

Jeff Kikel: That’s true actually. He  is got a pretty nice set of choppers  

for somebody on crystal meth, but just  going, he must be a new user. All right,  

last but not least, Florida man  drives stolen car into a ditch.

Has diaper wearing monkey attached to him. Of  course he would. Deputies were here to say,  

is that a monkey in your pocket or  you just happy to see us? Is all I  

can say at this point. The answer is yes.  The answer is yes. The only other couple  

things I have just taking a look at  the Econ Day calendar for the week.

This is a little busy. It’s got  the whole thing up here. Really,  

the only things that are of any interest, I  guess this week. The petroleum status report,  

eh, nobody really cares. [00:07:00] Jobless  claims will come out. We’ll see if the market  

gets spooked or whatever from that. Existing home  sales, that always tells us where we’re going.

New home sales on Friday and Jerome  Powell speaks right before the weekend.  

So I do not put it past him to say  something stupid that causes the  

market to go completely crazy right  before the weekend. And, we end up,

Ron Lang: I disagree. Okay. I think  people are anticipating something,  

but usually his speeches, for the  most part are just pretty vanilla.

Yeah. And he just spoke, what, two weeks ago?  How, what was, I know the last two weeks.

Jeff Kikel: What, why do you need to speak  again? Okay. Whatever. But it is a big week for  

Fed Governors. ’cause there, there’s a ton of them  speaking over today and tomorrow. They need to get

Ron Lang: their speaking engagement money too.

Jeff Kikel: Yeah, it’s, that’s  how they get paid, all right,  

so the geniuses with Moody’s downgraded the  credit, the US credit rating this morning  

brought to you by the organization that paid  $835 million to settle their mess that they  

created during [00:08:00] the 2000 2008.  Financial crisis. So does anybody listen?

Who knows? The treasury yield popped up a little  

bit. The 30 year above 5%.  It’s already down to 4.85.

Ron Lang: See, but this is the crazy thing,  

Jeff. They’re late to the party.  Yeah. Always. It was first downgraded,  

I think by s and p in 2011. Yeah. It was  14 years later. Why is this news? Yeah.

Jeff Kikel: And the funny party.

Ron Lang: Yeah. They’re all

Jeff Kikel: working with the same fricking data.  I know. And the thing I lo I’m laughing is okay  

what happened over the last four years where we  spent $7 trillion and we’re, we’ve still got the  

oldest air or air FAA system in the world at this  point. I’ve been hearing about that for 40 years.

Oh, I know. It’s just like they  don’t want us. Yeah. Oh we need  

to spend money on infrastructure. Then  frigging spend money on infrastructure.

Ron Lang: I would consider air traffic  control part of infrastructure.

Jeff Kikel: I think that’s like  essential in [00:09:00] infrastructure  

at this point. So I’m hoping.

That the messes we’ve seen. And I’m a

Ron Lang: mile and a half from  a nice regional airport too.

Jeff Kikel: Yeah. And you were in Philly,  right? Close to before you were in Philly,  

right? Close to all the mess up.  Yeah. 10 up network. And I think  

Philly was having issues last week  too. So yeah, it’s just it’s okay,  

stop wasting money on stupid crap and spend money  on things that save people’s lives at this point.

So that’s all I had for the day.

Ron Lang: I. All right, so I got  a couple of interesting things.  

I know it’s gonna kinda sound  and look like the same old song.

Jeff Kikel: Yeah. The

Ron Lang: same old song

Jeff Kikel: hadn’t been improving  though, that’s the problem.

Ron Lang: No. We keep talking  about this for a while. Eventually,  

either part or all the damn will break.

But, JP Morgan has a lot of really good numbers  on credit card. I have a Chase card. And I think  

this is interesting if you understand what  this is trying to say here. And basically  

what they’re saying is people are [00:10:00]  spending, yeah, net people are still spending.

You got your Chase credit card tracker and  the consensus, but there is quite a bit of  

divergence here. I think the expectation was  people would be spending less and people,  

it, it’s ticked up, since October,  I. So people are not spending less  

and they’re gonna continue to spend  until credit lines are seizing up.

Yeah. Which is a segue in a couple of slides,  but I thought it was interesting on where people  

were spending the money. Where were they not  spending the money? Airlines. But I thought  

this was interesting ’cause I really don’t  know what this gas line means. Let me explain.  

Does this mean that people were  spending 10.9% less on gas?

Or is this because gas prices have come, have  dropped? Yeah. That the dollar amount is spent  

less? I don’t know. Yeah. I don’t know  what it’s trying to say here. Yeah.

Jeff Kikel: And the interesting  thing is too, on the airlines,  

I’m like, I mean I’ve been watching  the airline earnings [00:11:00] now.

You’ve got some weird anomalies  there, like Southwest Airlines,  

which used to be. Like the king,  you know what Yep. Has just gone to  

crap at this point. They’re not making money.  Yeah. They gotta take care of shareholders.

Yeah. Okay. So they’re not doing  well, but you look at United Delta,  

their numbers are actually  still pretty outstanding.

And, I don’t know what, I don’t know  what that, spending less there is,  

has the price come down? I don’t  know. I haven’t, I don’t know

Ron Lang: about

Jeff Kikel: you.

Ron Lang: This is not a recommendation.  I have never, let me repeat that. Never  

recommended any auto stocks never, or  airline stocks to climb, ever. That is the,  

I read a book, money or other places to put  your money other than airline and auto stocks.

Jeff Kikel: I, I’ve read a book about Warren  Buffett ’cause he’s never written a book,  

but I’ve read books by, the  wrote him Walter Isaacson

Ron Lang: book on him is fantastic.

Jeff Kikel: And the funny thing in the book,  

he goes. He said he’d been known to say,  hello, my name is [00:12:00] Warren. I’m a,  

or I’m a reformed airline investor  after he lost so much money on us.

Air you, US air, and all that stuff  in the past, kind don’t get him

Ron Lang: TWA back in the early eighties.

Jeff Kikel: Yeah, I just, I don’t get airlines.  I don’t like to invest in ’em. I’ve never  

even done a. Sector, fund of airlines. I  just don’t really like the industry. So

Ron Lang: now it’s Peda Oil.  That’s another one. Peda Oil.

Remember Eddie? That energy stock, pe,

Jeff Kikel: peda oil. It’s heavily run by the  

unions. They’re dragged around  by their nose, by the union.

Ron Lang: And this is a good aggregate chart.  Okay. I to just explain to people why does the  

student loan look, yeah, this was the forbearance.  On the student loans for so many years.

Now finally we’re collecting. Now  they have to pay. Yep. But also  

folks look at the credit card  delinquency rate. This, these,  

this means that people aren’t paying more than  30 days out. Credit cards are now spiking.  

Obviously student [00:13:00] loan would  have to spike. What did people think here?

They were never gonna have to pay their student  loan. That was just all BS political rhetoric.  

Yep. No president has ever said, we’re gonna  forgive all loans. All Biden was trying to do was,  

I think it was, if you met certain  criteria, I think it was up to 10,000,  

but most of these people have 30, 40, 50  plus thousand dollars in student loans.

Jeff Kikel: Yeah. So it was just a drop  in the bucket. And there’s, there are a  

ton of programs. In the federal government to get  forbearance or to get some of that removed from,  

some of that debt removed. You just have to  do the work to find those. And he would, they  

were trying to like weasel around and show some  of that stuff and they were using some of that.

But the problem is they made it c some of these  were legitimate programs, but they just made it  

seem like it was a big political thing. And  so then everybody, it got into the press and  

everything else, but there are. Multitudes.  There’s 72 different [00:14:00] programs in  

the federal government where you can get  your student loan debt release or reduced.

Ron Lang: I think the one thing  that’s interesting looking this back,  

’cause this is going back Yeah.  22 years. Look at the auto loan,  

the the Army Green Line. Yep. It’s been pretty  much averaged 8%. Yep. 22 years. That seems high.  

That I don’t know. Yeah. But that’s just like the  average. It’s not like it’s spiking or whatever.

It’s just averaged around 8%.

Jeff Kikel: Like I said, I think the credit  card ones the one I have the most concern  

about because that one, ’cause now you  tack on the student loan part and you  

tack on. People have been spending like  crazy on their credit cards. That’s not  

a good combination between those two.  I would expect those both to start.

Heading upwards.

Ron Lang: Yep. Same demographic. Yeah. So then  breaking it down a little further. Okay, so this  

is now breaking down The total delinquency status.  Just look at the last couple of [00:15:00] years.

Jeff Kikel: Yep.

Ron Lang: Obviously this was coming out of the  

great financial crisis. That took a  few years to obviously settle out.

Came in, this was Covid and coming out of  Covid the 30 day late. But, look down here,  

severely derogatory. This is more than 120, this  is more than 120. I think this is probably closer  

to six months or longer. And just look  how bright these lines are getting here.

Jeff Kikel: Yeah. That’s a pretty  rapid move at one time. Yeah. It’s

Ron Lang: telling us a story. When does  the dam break here? When the dam breaks,  

in my opinion, when unemployment gets  to five point a half to 6%. Yep. All  

these people that are delinquent are  their assets are gonna be seized.

Jeff Kikel: Yeah. They’re, they’re on the,  

what that tells me is you’ve had a lot  of people that are on a bubble right now.

They are one paycheck away from going  severely delinquent, one paycheck

Ron Lang: away. [00:16:00] These  people are getting payday loans. Oh,  

I know. Yeah. These people are doing  cash advances on their paychecks.

Jeff Kikel: And you’ve got so many of those, I,  there’s that one what is it, chime or whatever  

that, oh, you can get, your paycheck like a  week in advance through us, and, but there’s no.

No cost at all. And I’m like okay. How do you, how  exactly does that work? I’ve not figured that out.

Ron Lang: It’s not a recommendation either  way, but it’s like that public company affirm.

Jeff Kikel: Buy

Ron Lang: now, pay later.

Jeff Kikel: Yep.

Ron Lang: At some point, who is  their demographic on that? And at  

some point that company’s gonna  have some serious bad quarters.

Jeff Kikel: Yeah. Yeah. Yeah. Once again,  

it’s okay, put all this stuff ’cause they  give credit really easily because they charge,  

30% or something like that on a lot of  those 26 to 30% on a lot of those little  

short term loans or whatever. Yeah.  Yeah it’s eventually gonna get there.

Ron Lang: And here we are, credit card  balances. Quick funny [00:17:00] story.  

At the end of LA at the end of last year, Q4,  we were talking, ’cause we were talking about  

an article about how credit card companies and  banks were either slowing down or not increasing  

credit limits. For Heather, ironically, I  got a letter from my credit card company.

I didn’t request it, but they doubled my credit  log. They didn’t ask for it. I could go on a hell  

of a vacation around the world a few times. I.  It would take me a while to pay that thing off,  

but here it is. I pay my balance off  every month. So give me more money to  

spend. Yep. Here are people that can’t pay  the balance off and they’re slowing it down.

Jeff Kikel: Yeah. It makes sense ’cause they’re  like, okay, you have no risk and maybe we can,  

maybe if we entice you a little bit, maybe you’ll  spend money on that big around the world trip  

and we’ll make some money on interest from you.  ’cause we don’t make anything from you as it is.

Ron Lang: And here you could  see credit card balances.

That’s the dark blue line. It’s taken  up 1.2, 1.3 [00:18:00] trillion. So we  

shall see where this thing goes. But you  could see this is the balance versus the  

limit. So there’s a lot more spending to happen  here, whether they’re gonna pay it off or not.

Jeff Kikel: Yeah, it’s interesting.  You look at the HELOCs though, man,  

they are way lower than they’ve been, ’cause you  figure they, they were rising up right before.

The, right before the 2008 financial  crisis and then the, those balance or  

those the limits got pushed down on a lot  of those things. And it, they went out of  

favor. But it looks like they’re slowly  moving slowly back up at this point. And,  

that’s, it’s a place that somebody may  not have attached if they can’t get,  

credit on their credit cards, the next thing  is gonna be, let me get credit on my house,

Ron Lang: absolutely. It’s got a couple  more here. So chicken and egg prices. So  

they had down, which came first? And by  the way, I don’t know which came first.  

We talked about, okay. But you could see here  the eggs have come down in price. Yeah. This  

is amazing. I [00:19:00] actually I just  bought a dozen eggs this weekend and they  

said normally 7 99, but we have a sale for 5 99 if  you got your, if you use your your store number.

Got it. But it is, I didn’t realize  how cheap eggs were at one time. Oh,  

yeah. And you could see where it’s  gone. This is what a 20 year chart.

Jeff Kikel: And

Ron Lang: it’s

Jeff Kikel: steady here. Yeah. It’s  hilarious because you look around the  

world and we’re not the only people who  have bird flu in our chicken populations,  

but for some idiotic reason, we’re  just culling like millions of chickens.

For no reason at all. Canada doesn’t do it. Mexico  doesn’t do it. Brazil doesn’t they said they had,

Ron Lang: we had the bird flu, but that was  short lived and that was just an excuse to,  

to raise prices. But overall, yeah. I don’t  see it. I don’t see what it is. I think it’s  

just you know what they feel, oh the consumer  accepted it, so we’ll just continue to charge out.

Yeah.

Jeff Kikel: And yeah, we keep it up [00:20:00]  there. At least they’re coming down somewhat.  

The administration’s done some. Crazy  stuff like importing eggs and all that,  

to the point where, okay, hopefully it’s  coming down, but it just doesn’t seem,  

it seems like it’s persistently staying  higher. Yeah. And I, I wonder if that’s  

not just the egg producers going we’ll  come down a little bit, but it’s still,  

we can keep ’em a little higher up there,  but Yeah, I remember used to Absolutely.

Yeah. We always, we typically buy like organic  free range stuff and Yeah. Those were. 4 99,  

maybe five, and they, it got to the point where  

they’re almost 10. They’ve come back  down to maybe $7 at this point. So

Ron Lang: I hear you. So  that’s what I got. Beautiful.

Jeff Kikel: I’ll

Ron Lang: see what happens next week.

I’ll try to have something fun.

Jeff Kikel: I just Yeah, on time. And we’re going  

into a holiday weekend. So probably not a  whole lot of stuff going on in the world,  

which is probably a good thing. We’ll  we’ll agree to disagree on Chairman Powell,  

so we’ll see what he does on Friday, right  [00:21:00] before the holiday weekend, but.

He’s gonna say something. Oh, I know.  He never fails. He definitely says stuff  

or he doesn’t say stuff. He just babbles  for 20 minutes and doesn’t say anything.

Ron Lang: He’s not as bad as Greenspan. Oh  God. Nobody as bad as Greenspan. No. Berki  

wasn’t so much better ’cause he was an academic.  Yellen wasn’t great ’cause she was an academic.

Powell as far as I know, isn’t the, is the only  one that hasn’t been an academic in 50 years.

Jeff Kikel: Yeah. Yeah. I mean  he actually had some experience  

on Wall Street and everything else. Gold Sachs I

Ron Lang: think.

Jeff Kikel: Yeah.

Ron Lang: Or they like to say government sacks.

Jeff Kikel: Yeah, whatever. Golden s slacks.  All right folks. Thanks for joining us again.

You guys have a happy Memorial  Day weekend and we will catch  

you guys on the flip side. Have a  good week and we’ll see you then.