good morning sense of things audience

it’s Jeff and Ron here today with

another episode of the sense of things

podcast and we are excited to see you

guys this week uh the week after

Thanksgiving we’re kicking off the uh

Christmas holidays I have got five good

ideas for you I don’t know if they’re

good but they’re weird ideas at least

for Christmas gifts Ron’s going to cover

uh a little bit on who pays income taxes

I think it’s very interesting kind of a

breakdown of what groups pay income

taxes and the most of them he’s also

going to cover some delinquency rates

both on offices as well as credit and

everything else on our long-term uh look

at those things going on we’re going to

talk a little bit about jobs as well um

because that is the thing that’s

bullying up the economy at this point

and we want to take a look at where

we’re heading going into the end of the

year so stay tuned we’ll be right back

on in just a

SEC all right guys welcome to the show

Ron how you doing my friend morning Jeff

yes holiday season is in full swing I

love it usually most people are smiling

and you hear the music and you know you

turn on the TV it’s got some Santa or

Rudolph thing going on I love it and

then of course I’m looking forward to

Christmas so we could do our A Christmas

Story Marathon oh of course this year

they’re doing like one of the channels

is doing like every day a marathon of

some show so like National Lampoon

Christmas vacation for 24 hours

Christmas story for 24 hours yeah it’s

awesome so huge fan of this season my

wife and I last weekend pulled out all

of our Christmas movies so we’ll we’ll

be doing Christmas marathons until

Christmas day and all the ones old

movies new movies we will not be

watching Elf or Fred Claus I will just

say I will tell you this funny you said

that because I was about to segue so for

about 10 years I have what’s called

Ron’s movie Bucket List Right got it

remember guy and I send this out to

prospective clients and clients so they

know a little bit about me based on

these bucket list choices and I had

somebody about a year and a half ago no

two years ago now that I’m thinking

about it it was a prospective client I

sent it to them and he just says look I

want to set up go but before we talk

about anything I got to talk about your

movie list he go how the hell is elf not

on your movie Bucket List and I’m like

you know what it was one of my son’s

favorites he loves Will Farrell he loved

Will

Farrell I like it actually it’s been on

this weekend you could turn it on at

almost any point there’s some funny

sticky scene that you you could watch so

I didn’t put it on but it is good fodder

to talk about elf is not being on your

bucket list that is true yeah like I

said I’ve never watched it I’ve never

had a need to watch it there’s just so

many other great Christmas movies that I

would run out of time before I even got

to to Watching Elf at that point funny

very quickly we’ll move on I gotta tell

you I it’s on every year I have not seen

it I re-recorded it again because it was

on this weekend do not not strangle me I

have not seen It’s a Wonderful Life with

Jimmy Stewart I know of it I know the

end of it cuz people use it as EXA I am

GNA watch it this year I have recorded

it I will watch it this year I know it’s

a tearjerker I don’t know if it’s a tear

jerker it’s the most depressing movie I

think I’ve ever seen so probably it’s

another reason why I haven’t watched

it jurge just he was the unluckiest guy

on the freaking planet and then all of a

sudden he got lucky at the but yeah

thanks for ring it for me yeah it’s an

interesting movie no you got to see it

and it rolls into so many things

throughout life it’s just so many quotes

came out of that movie and so many

Concepts came out of that movie let me

kick us off with since we’re into the

Christmas season we had Black Monday

this week we had or Cyber Monday we had

Black

Friday coming off of cyber monday it was

like up 7% from the year before so

things are looking pretty good once

again people are just spending money

like drunken fools and we’ll see how

this all plays out in the end but here

let’s get started with and this is from

Good Housekeeping just found this

morning the top five weird Christmas

gifts that’s a bad product idea that’s

not a weird christm that’s one of our

bad product ideas it is a bad product

idea my God the lead off one lock up the

kids cat butt tissue holder I I yes yeah

I can’t even imagine giving this to

somebody or having this in my house and

I love cats but there are certain people

you give that gift too yes there are and

and I can think of a few how about the

seret group The handbag handbag giving

this rubber chicken

bag for

Christmas I seen so I saw somebody been

New Jersey she made a handbag out of New

Jersey license

plates this doesn’t surpris me at all I

yeah I just like but it’s a rubber

chicken bag that’s the best part and

it’s but if you notice it’s now 24% off

thank God yes all right how about Lester

fixen outrageous and unique flavored

soda six-pack which includes buffalo

wing soda sweet corn pumpkin pie and

ranch dressing sodas the middle ones

okay the end ones no what you got to do

you got to two fist the end ones between

the buffalo wing and the ranch that

makes sense because of the buffalo wing

and the ranch dressing you just double w

I’m probably in the right part of the

country for that I don’t maybe mine too

but could be I’m not sure I don’t know

maybe up in in the northeast or Buffalo

and all that area you just take out the

middleman you don’t even need a soda you

just get the buffalo wing soda and

forget the buffalo wings all right the Q

C or the qk Endeavors finger covers for

cheesy food no more around Chi or cheese

fingers from eating Cheetos which I

personally believe are the most perfect

food on the planet packing peanuts with

cheese on top of them just awesome so I

will tell you I I I haven’t had them in

a couple of years

because it’s crack to me the crunchy

Cheetos are like crack to me but here’s

the other thing yeah you can’t get it

off your fingers for a day what about

your lips and your mouth I no guard for

that nope and there I your insides I can

only imagine what it’s doing to your

insides man you eatle away from being

plastic but that’s inside the

point all right this one was the

creepiest thing I’ve ever seen the

ostrich pillow original ostrich pillow I

cannot imagine putting this thing on my

head so I can sleep I have a hard enough

time when I fly and I’ve got my little

neck pillow thing I was gonna say if

you’re flying in a tight seat that might

not be so bad yeah but then you end up

putting your head on your the guy in the

middle seats shoulder and stuff like

that the funny thing is with all of

these when I was looking at them online

Good Housekeeping had a pro and con list

for all of these things they did not

have a single con for the ostrich pillow

not to mention the claustrophobic scary

thing that you have on your head and

you’re sweating no no issues with that

all right last one is a bonus and this

is my favorite because I’m going to get

a texture of Dreams personalized card

cardboard cutout of Ron so I have him in

my office with me at all times going

forward here your wife may get jealous

Jeff I know she might and I’m gonna send

one to you so I’m with you the whole

time out listen it’s not half a bad idea

did you see the one now you can upload

your dog or cat’s picture and it’ll make

pajamas for you with your dog or cat’s

picture on the pajamas soen this isn’t

too far off of it’s not far off so I’m

going to need you to go to the app and

take a picture of yourself with this

pose by the way I really want this pose

oh yes it’s my it’s my Runway

pose wow so that’s our five weird plus

one bonus Christmas gifts from the WTF

category yesterday was probably one of

the weirdest days in 30 years of this

job

um watching United Healthcare Group they

started their morning out announcing

revenues That Grew by8 billion their

customer serve group their third quarter

earnings were massively up they bumped

their dividend up by 900 a.m their CEO

had been assassinated and the doj

launched a probe into insider trading

and attempted to stop a monopoly which I

don’t understand because there’s lots of

healthcare companies out there

and had the government not killed a

bunch of healthcare companies we would

have more competition out there but uh

it this was the weirdest day I don’t

know about you uh but honestly the

weirdest day for me I was shocked

actually I I haven’t heard anything I

think the guy is still at large he is

still at large yeah they they don’t know

who he and it was all he hadn’t planned

out he got off on he got way on a bike

they got they lost him in Central Park

and if people aren’t familiar with

Manhattan Central Park is its own city

as far as size and scope so many exits

out of it and everything else and it was

all the whole thing was on video they

saw him take off and look if he was in a

car could have been tracked and with a

bike he could have ditched it this was

planned out but you know what apparently

the wife said I can’t believe we’re

talking about this that he had been

receiving threats I don’t know to what

extent the whole thing is horrible it

it’s just horrible it’s weird there’s

just so many things going on with it but

honestly I had to report it if people

didn’t hear it but just absolutely the

craziest day of any one stock I think

I’ve ever seen on the market yeah I

really feel sorry for his family and

certainly the employees of of United

Healthcare I don’t know if he was liked

or not but even if there was an issue

yeah even even if there was an issue

with a claim or something or whatever

this person’s beef was there’s much

easier and much better ways to solve

that problem than shooting somebody in

the back on the streets of Manhattan so

obviously it’ll eventually come out yeah

the motive obviously they’re usually

always is one this wasn’t random so yeah

I hear you okay moving on yeah so the

first slide was interesting and I don’t

have a source on it I will admit it I

pulled it off I think LinkedIn okay and

a lot of people always talk about oh the

rich need to be taxed more are they not

paying their fair share and in some

regards that’s true but when you have

really good CPA that follow the law they

find a way to be flexible so yeah I have

that and then I have some interesting

things on some delinquency rates and

then we’ll wrap up with something that I

always find pretty interesting which is

analyst price targets which I’m sure

we’re going to do a show shortly on that

if you take a look at at this and in the

way the average person in each in each

quantile breaks down the top 1% pay an

average of5

61 you know, a year now if they have a

billion dollars that’s a drop in a

bucket so I don’t even know really what

top 1% means is this I don’t think this

is top 1% of net worth this is probably

top 1% of the earnings gross earnings

that they have that year and their

average gross their average

rate is

26.9

0.09% Which is higher than any other

group so when people say they don’t pay

their fair share what do they want to

pay 90% yeah this isn’t a socialist

Nation that’s their fair share I always

love the argument what is it oh such and

such he pays less of a percentage of his

income buff then his secretary I’m like

yeah Warren Buffett yeah that Buffett

always says he should be taxed more and

whatever you JB Diamond JP Morgan came

out and said then let him pay more yeah

but you don’t think you don’t think

Warren Buffett doesn’t have an army of

CPA that says Warren you don’t have to

pay a d more than this do you think he’s

going to pay it because he basically

pays himself a really incredibly low

salary in comparison to his net worth

which he always has because he does okay

my house is paid for I I can sell stock

and it’s maximum of 20% capital gains so

I’m sorry he doesn’t take he’s not

forced to take hundreds of millions of

dollars of income every year because he

doesn’t need it he can just sell

stock we move on from this but one of

the more egregious things in the tax

code is for the hedge funds and private

Equity with the carryover interest I

think it’s called um they take advantage

of that and they avoid paying not

Millions not tens of millions but

billions of dollars over time so I

remember Gary con who was Trump’s First

National Economic Council person and he

tried I saw an article on this because I

didn’t know much about him they tried to

get rid of it in the 2018 tax code and

they said all the lobbyists came down

hard that they wouldn’t either support

or whatever if they got rid of the carry

forward interest and there you go you

know again the swamp still exist doesn’t

matter who’s pres it’s really doesn’t

yeah just one example all right off the

soap box here we go so I just pulled

these off in the last week and I thought

this was interesting because people have

been saying the office space Market is

going to basically come to a head sooner

or later in either delinquency rate rate

meaning lack of paying rent or based on

what they are uh paying to to finance

these buildings because they’re not

getting the rents and they have the

vacancy rates so between the vacancy

rates and the delinquency rates many of

them aren’t able to refinance because

the refinance would be higher so they’re

not even able to pay they’re looking at

potentially a blow up in this in the

next couple of years and and I’m not the

the bearer of bad news here this has

been discussed for the last couple of

years and whether or not this has a

trickle effect in other areas but

they’re talking about this being

possibly in the trillions of dollars

they’ll find a way to resolve it but I

just think it’s pretty interesting here

when you look at this that this is the

worst it’s been in over 12 years yeah

yeah look at where we were when it was

that high we’re in the midst of the

financial crisis and everything else and

we’re the econom is doing decent

inflation’s high but where prices are

inflated over the last several years but

look at how fast that ran up and I think

the difference this time is the those

two or three years of the pandemic of

people working from home that’s made a

massive shift in the way companies do

business I run a co-working space and

we’re seeing companies go I don’t want

to be the one responsible for having to

pay or to have a lease and stuff like

that and and companies folding down to

hey I can use a co-working space to meet

with clients I can have a small office

and not have this ginormous overhead of

having an office yeah no I I look I’m

going to share office space now I am

looking at office space who know maybe

the next year I can get a really sweet

deal yeah honestly I’m thinking that way

at some point myself as my other

businesses grow of I can’t expand inside

my own space here but I’m looking at

potentially buying a little office condo

or something like that because I think

there’s going to be a lot of opportunity

yeah but the problem Jeff no pun intendo

but you and I keep expanding in our own

space so what can I tell yeah that’s a

whole another subject but so I thought

this was great I saw this too this isn’t

just one particular area this is really

showing the delinquency rates in and now

credit cards have been spiking which

again Echo chamber we’ve been talking

about this for a while but I also found

this pretty interesting that mortgage is

still pretty low uh student loans have

been going down and even because they

haven’t had to pay them for yet that

that’s a that I would argue that’s a

stupid statistic in there because they

haven’t been forced to pay him for years

they have play for a year now I know but

I’m saying they hadn’t been paying them

for a years so of course they’re they’re

going to decrease and now they’ve had to

start you know who knows there’s been

this kind of on and off on and off on

and off but yeah it’s everything’s going

up we’re seeing credit cards expand

again I can’t confirm this because the

yellow line here at at

8.96% is other I’m assuming either most

or all of it or good portion of it is

probably something to do with subprime

oriented de yeah I I I don’t know for

sure but I don’t see it in any of the

other categories here so I’m assuming

that may be part of it but the credit

card thing is to come to ahead it’s

going it’s been trending in the wrong

direction for a while well and I’m

wondering if that other category also I

it’s got to include all this like pay

buy now pay later stuff and things like

that that’s subr yeah yep all right uh

next one Auto delinquency so I know when

we come back up here we see the Green

Line Auto at

4.59% so going to the 30 and 60 30 and

90day delinquencies this is obviously

the last three years from 2223 and now

2024 the spike that we have now seen in

the early delinquent season both the 30

plus and the 90 plus days uh now this

sum of this may be subprime we don’t I

don’t know for sure

but if you just see that if you see on

the right hand side it says the blue

line is early delinquent 30 plus the

orange line is as you can see seriously

delinquent I’m assuming at this point if

you hold the paper on this yeah you have

some you have what do they what do they

call them the people the bounty hunters

Bounty H going out to seek and seiz your

car load when do I don’t even know when

they’re legally able to do that but I

fig 90 days that

it’s got to be they basically and it’s a

lot easier they don’t really have to go

to court on this type of stuff so they

basically have to follow a process of

letting probably whatever in the signed

agreement yeah yeah because you figure

that thing is at risk at that point

pretty significantly because somebody

could just abandon it someplace or

whatever but yeah it’s it that’s a huge

Spike it’s like we were seeing back

before the financial crisis again

another similar thing again here

rhetorical question for thoughts and

fodder let’s say this this goes to 10 or

you see back in 2009 it hit

10.85% yep what does that mean what does

that mean as far as a trickle effect

because obviously the people that can’t

pay their auto loans are probably the

same people that are delinquent on their

credit cards y you can see the pattern

here what does this mean does personal

bankruptcies now Spike what does that

mean for all the people holding the

paper in the trickle effect yeah we

don’t know the answer to it and we could

debate it for hours and half right the

next obvious thing is okay I can’t

afford my car I can’t afford my credit

cards anymore I can’t afford my rent

would be my next guess and then you see

homelessness Spike you see all kinds of

effects across the board because the

other part of it is okay if you have to

have a car to get to work or whatever

and you can’t afford it and you lose

your car do you lose your job and

everything else it’s scary and I think

the only thing that would

accelerate is if unemployment spiked to

five or six per because now they don’t

even have a job yeah so all

right so I think this is interesting

maybe in our next podcast we’ll review

where our price targets wor for this

year we’ll talk about price targets for

next year I believe this is

the third iteration of the Wall Street

strategist price tets obviously they

came out with one at the end of last

year by midy year they adjusted it they

adjust some of them adjusted it again in

the Q4 now this is

Q5 look at the straight line up yeah

high end is

6600 now that’s only I say only 10% from

here which would be an above average

year for the mar Market but that

parabolic move is not healthy no look it

looks all the client all of our clients

would be happy Wall Street strategists

would look brilliant I’m not at a loss

for words but I’d like to get your

opinion because 314 research the one who

I’m citing as the source on this does

really good background stuff on this and

real thoughtful analysis they got some

great charge this is one of them uh what

are your thoughts on this because it’s

tough to be bearish we know that but to

be overly bullish are you setting

yourself up for expectation yeah I I

think the only honestly the only thing I

can say to this Ron

is

finally we’re seeing the market breaths

improve so you’re starting to see some

of the stocks that have been

laggards start to take off a little bit

and I think that’s part of this because

if you look at the Nifty five or the

whatever you call it the fantastic five

or four now or whatever it is they’ve

since July have been not great yeah flat

at best Nvidia its own little animal

even though it had a couple months of

just ugly but you’re seeing the market

breath be out there more I still argue

the point that 20% of the market is

controlled by literally three mutual

funds three S&P 500 funds that everybody

every week is plowing money into and I

think we saw the shift in our business

in the 401K business of we have to have

the lowest cost investment vehicles we

have to put in S&P 500 funds and you’re

seeing Vanguard and State Street and

things like that be the largest of those

S&P 500 funds and every week people are

putting money into them through their

401ks so there’s constant flow of money

coming in we’ve got still the largest

generation of people sliding through if

you look at the the late Boomers who are

still working through our generation x

we’re on the Leading Edge of it we’re

all at our highest earning levels we’re

we’re a small generation but right

before us isn’t you see a huge shift

with the Baby Boomers so we’re all still

pouring money into the market and I

don’t know when that ends I think it it

slow down after the mid part of Gen X

when you saw birth rates going down so

if you look at it I’ve got a chart up on

my wall so that’s why I’m looking weird

here the the birth rate bottomed out

somewhere in the mid 80s and then

started Rising again we’ve seen after

the Millennium we saw a huge kind of

second baby boom as a result and so

there’s those folks are getting into the

workforce and starting to make money now

and people are plowing money Index Fund

so I talking about a and Robotics taking

jobs but we’re 5 to 10 probably 10 to 20

years away from really seeing the

breadth and the strength of what that

really means so we’ll see yeah but like

I said and for a long time interest

rates have been massively low and people

have been plowing money into to stocks

to try and keep up with inflation and

everything else so I I don’t really know

when it ends I I would love to say I’m

I’m that smart I honestly just ride the

wave I’m I’m riding the wave with my

client portfolios and we’re still very

active on adjusting those to what’s

going on with our model because I don’t

want to get caught honestly this year I

think we were a little too conservative

throughout most of the Year we’re seeing

it in our total returns were a little

bit behind we’re behind the market and

the reason is we were a lot more

conservative because I expected to see

something going into the election and of

course the election hit and boom it took

off again so I don’t know when it stops

it’s a ginormous game of of musical

chairs at this point you got to keep

going around you can’t just sit on the

sidelines and and hope that it comes

back eventually I got you so what else

do you got I think I’m gonna hold it off

for the next podcast we do we’ll talk

about jobs next week because we’ve got

the jobs report coming out tomorrow and

of course we had the completely awful

one for September so this will be the

October jobs number I think or November

I don’t know which one it is so we’ll

see what that jobs number looks like if

that was a weird anomaly the expectation

at this point is 220,000 which is a

normal average there and we’ll cover in

that next episode the jolts number which

is the job openings we’ll cover the job

the unemployment and then we’ll cover

the the new jobs next time

around all right guys thank you for

joining us we did do these shows for you

so make sure that you are subscribing to

the channel giving us an upvote if you

can and we love comments been having

some good conversations with folks via

the comments online so thanks a lot and

we really appreciate you and we’ll see

you here next time