Good morning, folks. Welcome to another week on the sense of things with Jeff and Ron. This week, we got a lot of

exciting stuff going on. Of course, we are still in the midst of a conflict in the Middle East. And if you’ve watched oil prices, they’ve been everywhere, up,

down, left, over, under, whatever, all week long. So, that’s had some effects on the market, but not a whole lot of

effects on the market overall. Ron’s got some stuff today. Of course, this week in history, we’re going to be talking about market corrections throughout

history. We’ve got an update on delinquencies. This was something we were going to do last week, but we just ran out of time. And then Ron’s also got

ETF flows. I’m going to cover some of the economics from this week which I think are interesting and I think this is going to be a very interesting week

across the board for economic data. I’m not sure that’s going to have much effect on the Fed meeting next week, but

we’ll see. I also have got an update from last week because last week I had reported what who the top oil producers

were and I wasn’t even aware that the US was so big. But I went through back through time and I’m going to share

historically where we’ve been over the last let’s say 50 years. So stay tuned. We’ll be right back on in just a second.

Hey everybody, welcome to the show. Ron, how are you my friend?

Good. I’m thinking about building an oil refinery in my backyard. It’s funny. Oil went all the way up. It came all the way down. But when they moved up the gas

prices, they didn’t move the gas prices back down. No. No. Amazingly. And amazingly,

everybody’s right at here in our area $3.19.

It’s Yeah.

I just got gas yesterday. I got plus shoot I think it was 390 somewhere around there.

Yeah. So, you’re probably somewhat close to us at that point, but yeah, it’s just it’s ridiculous. And yes, I realize

there’s some disruption in the in the Straits of Hormuz and stuff like that,

but that’ll work itself out. Really excited to hear that the world stepped in and said, “All right, we’re going to

release strategic petroleum reserves and that should start to filter out.”

And we just announced we’re doing it yesterday, which I think I was telling people it’s going to happen. And that’s what it’s for. It’s not for, hey, I want

to get reelected in in the fall. It’s for these type of situations. It’s interesting to see the first time really

the around the world the IC actually they all stepped in and said, “Okay,

we’re going to release.” That gives us roughly 6 months of extra production that fill the void with what’s what’s going on in the Straits of Hormuz. And

another reason why I don’t recommend anything pegging to oil because of exactly what’s going on this week and last week. If you take a look like a lot

of the oil producers, they’re all over the place. It doesn’t matter if they’re making money. Price goes up of oil, they make more money. Price goes down, they

make less money. They could be the most efficiently run companies in the world.

What’s the price of oil? That’s all you need to know.

That’s exactly right. And I’m not a big fan because I think it’s largely manipulated around the world. It’s the worst news.

Yeah. All right. Ready? Yep. Kick it off. All right. So, this week in history,

1779, Congress establishes the US Army Corps of Engineers. So, think about it.

That was pretty much right in the genesis of our country getting started and everything being established between

we talked about the constitution and everything else. So I thought this was interesting. It got done pretty early.

1781 two years later the articles of confederation are ratified after nearly four years of negotiation. I could only

imagine what that negotiation must have been like with no air conditioning and no heat and these buildings yelling and

screaming at each other. All old school people obviously all men. Who knows? Yeah.

They almost would have been a serious amount of comedic material. Yes. Wearing 10 pounds of clothing.

And then of course the barristers coming over from England are wearing the wigs. Oh yeah. On top of that,

1789, here we go. Government under the US Constitution begins. So, here it was.

We got the Articles of Confederation are ratified. And then it still took another eight more years before we actually are now running our country under a set of rules.

1865, long overdue. Confederacy approves black soldiers. They were some of our bravest people. And many of them, I

thought, were fighting a lot earlier. I don’t know why. This was towards the end of the war.

Yeah. But this is the Confederacy. They were fighting. There were black units in in the Union Army for 16 was 1862 or three.

That’s my point. What were they fighting for? Yeah. Yeah.

Makes no sense. Obviously, they were still do this or die. Who knows what kind of rationale was provided?

Yeah. And the ones that were fighting for the Union, they were already free to begin with. So it wasn’t like they were fighting for freedom or anything like that. They were fighting because they were patriots.

Many of the Union soldiers did have a problem with it in the very beginning. Yeah. Oh, of course.

Crazy. And then it still took another hundred years before you could have a black baseball player. Of course. Great.

1869, talking about baseball, Cincinnati Red stockings become the first professional baseball team and the rest

is history. I think they were probably paid 25 cents a day. I’m sure.

And the probably their predium was you make your own food.

Yeah, exactly. Yeah. You buy it wherever you can find it.

17 1876 first discernable speeches transmitted over a telephone system not invested. Invented by Alexander

Graanbell. And what were his first words?

Something in Mr. Watson because that was his beer. I need you.

Yes, that was his assistant. Yeah. and he invested in it in addition invented it. So 1894 Coca-Cola sold in glass

bottles for the first time and then I think they started doing it in cans in the 1930s or 40s. Who was one of the

most famous people that invested very early on in Coca-Cola? I’m not sure.

Give you a hint. He played baseball. Babe Ruth. Taikob.

Taikob. He was from Georgia, known as the Georgia Peach,

one of the most vile players ever in baseball history.

Let’s say he made I don’t know 10, 20, 100x more outside of baseball with his investment

specifically in Coca-Cola than he ever made in baseball.

Yeah. One of the Yeah. One of the most vile players that used to slide into second base with cleats in people’s faces. So, yeah.

1938. Obviously, Austria did not agree to this. Germany annexes Austria. My my lineage is from Austria. So, I saw that I’m like, put it in there.

Yeah.

1959, the first Barbie doll makes its debut. Okay.

And forever giving everybody body shaming issues. 1964,

Jack Ruby sentenced to death for murdering Lee Harvey Oswald. Texas always had the death penalty if you got convicted for murder. Obviously, there was a reason why he they kept him alive.

And I think he died in 77 of cancer or somewhere. Cancer in jail. Yeah, exactly.

I did not know this. 1967 JFK’s body moved to permanent grave site. I thought the whole funeral and I

remember watching the video of this. I thought that where they buried him was the final grave site. I didn’t know they moved him.

I didn’t know. I’ve only seen Yeah, I’ve been there before to Arlington and I know that he and Bobby are married are buried next to each other, but yeah,

that’s weird.

1985, first adopt a highway sign goes up on Texas Highway 69 by the Tyler Civoted Club.

I never really understood this because do you have to keep putting out money every year to keep help keep it clean? I don’t understand this. I don’t know if

they put up money per se. They volunteer to go clean up the road. But I mean, you know what it is? They clean it up. Yeah. So, they volunteer the highway.

Who the hell’s going out there to pick up garbage?

They’re going along the medians, not on the road. But yeah, I mean, it’s And I’m sure that’s just as safe in Texas. Oh, yeah. Yeah.

I thought the media was for passing.

It is for passing. Yeah. I was watching something that this morning and they were showing this like a out outer view of a school bus pulling up and some

idiot in a truck just whips around the right side as kids were coming up. It’s like you’re killing me people.

Unbelievable. All right, wrap it up here. 1996, George Burn dies at 100. And actually, I think he was 95 or 96. He

actually made sure he had all his gigs booked until he turned 100 because he says, “I want to keep performing till

100.” And I think he died within three or four months of turning 100. That’s hilarious. Once again,

he he was popular before our time, but he was certainly the the cute old guy when we were growing up.

And he did all the God movies and all that stuff, which were just hilarious.

He was just he was a funny dude. that that and I just recently watched the voice with Walter Matau was great.

Yeah. Oh, anything with Walter Matau I loved. But no, I just watched the the Mel Brooks thing, the 99year-old man. It

It’s freaking hilarious. It’s two episodes.

Seen it yet. I love Mel Brooks. I have to watch.

Oh, it’s just it’s awesome because it takes Yeah, it go It’s on It was on YouTube TV, so I don’t know exactly. I think it

may have been I think it’s on HBO Max or something like that, but it’s really good. It’s two full episodes of literally his entire life and all all

the movies and all the stories behind the scenes. So amazing. All right, so we briefly spoke about this last week. Are we in a

correction? Are we due to be in a correction? People are freaking out.

We’re down 3%. What’s going on? The Listen, folks. I think this is the third, maybe the fourth time we’ve done this in three years.

This is normal. Garden variety pullbacks of 5% happen an average of three times a

year. They’re out there for about four weeks. You get a flush out and then a return. And 10% happens about every year

and a half or so. This is normal. This happens. 15% about every two or three years. And then yes, you get a big

correction about every five to six years. Look at even recent history in the last 10 years. most of these numbers hold up. You can’t get emotional. You

got to plow through. And if you aren’t prepared for some of these things, then you should I’m sorry. If you’re prepared, you shouldn’t be emotionally

charged. If you aren’t prepared, then you’re the then you know what then then shame on you.

Yeah. I think the biggest problem with it today is things move so stinking fast that you could have a 5% correction over

a couple days and next thing the market just flips around on you. So, it’s very difficult to trade around this stuff or

anything like that. You know, we’ve been building up cash and portfolios just because with all the stuff going on with the war, I just keep expecting to see

something. But, I mean, it as much as it goes down, it slaps back the other way just as quick. So, been a teflon market.

Yep. I think the ne look we could say this every week but I think the next two weeks are going to be the most important with the market because

either this thing is going to wind down or it’s going to escalate. I know that sounds stupid but I don’t think it’s just going to meander along here. I

think it’s either going to wind down and get somewhat resolution or it’s going to escalate to the point where oil is going

to stick at 110 120. We’re going to see supply chain issues. is going up, prices are going up. We’ll have to see what

happens, but I think by the end of March, I think we’re going to have some good direction of what’s going to happen.

And like I said, I think the market is giving you an indication of what it what’s going to happen once the

resolution starts. And I think the biggest part of this whole thing, yes,

we may still have active combat going on over there. I think it’s going to wind down. But the I think the big key is going to be safely getting those ships

out of the Straits of Hormuz. I think when that happens, whatever that resolution is, whether we’re escorting

ships or we finally just pound Iran down into the ground enough to where they can’t do what they’ve been doing, I

think that’s going to be the true key to this market. And the what you’re seeing out of it is if that happens, the

market’s going to rock it up. You got to be prepared for that. But I think stuff on the way down.

Yeah. That and that’s it. You want to you want to look for that opportunity to be able to rebuild into some really good stuff that’s getting pounded here and there.

Yeah. So, let’s look at kind of some trouble areas. We talk about delinquency rates every now and then.

We knew this was just a matter of time on the student loans. Yeah.

Credit card balances we know that have been going up for a long time. Look folks, this is not going away. The

reason why you have the student loan in this area down here is because nobody was paying their student loans. The

student loan forgiveness and now all of a sudden, oh crap, I didn’t save money to put that put away for that. And then

of course, we all know what happened coming into COVID with credit cards.

This is not going to get better. I remember the spike here in the auto loans. Notice the home equity revolved.

I think the reason why it’s so low, I know this from some clients that have really good credit, a lot of the banks are not giving them out.

Yeah. Yeah.

Or they’re giving out less, so they’re having less delinquents.

Yeah. And so people are not having to or they’re not being placed in a position where they’re going to be in trouble.

And then this chart, I think, says it all. If you’re taking a look at how late are you in making payments, all you got

to do, we can see what happened during the great financial crisis here. This trend is not good. Yeah.

Coming out of COVID, right, with now all of a sudden you had to start paying your mortgage, you had to start paying rent,

you had to start paying your student loans. I don’t think this trend is going to reverse anytime soon.

I don’t think so either. Once again, so much of this revolves around hiring and firing that if we saw any slowdown in

the economy, I could see those rates just going through the roof. And typically, you got to watch layoffs,

right? So, you got to watch tech and you got to watch financial. Square Block just had a major layoff. I think it was

a 20 or 30% of the company week. And Morgan Stanley is laying off 2400 people across all their departments. Yeah,

this is normal in Q1 of every year that there’s always quote unquote a right sizing, but could be the beginning. Who knows? All right. Now,

the one thing that also propels markets is M&A. We saw what happened with Warner Brothers discovery between Paramount and

Netflix. I don’t know what what’s going on there. I have a feeling there’s something political that was going on in the background. Paramount does not have the money,

right? They are borrowing it from Oracle stock and from a lot of other sources.

And by the way, I am predicting potentially this is another AOL time life situation.

25 years ago, they were so highly leveraged the company almost went away. Yeah,

I have a feeling this could be a very similar situation because Paramount is gone down, Oracle has gone down. They’re

backing it up with daddy’s stock. This could never be another overlever situation just to buy assets that they

might never be able to really get out from under this. And that’s why Netflix went away. I think they were smart. And you know what? They could end up getting fire sale in about three to five years.

That’s my thoughts. and they may be able to get both of the platforms for even less.

I don’t know if the government would allow them to take over all that, but who knows? Once again, the argument about, oh,

monopolies and all this and the streaming. There’s so many streaming services. I’m sorry.

I said this five years ago with the streaming. It’s going to be like the cell phone business. 30 years ago, you had what, a dozen, 15 providers. What do we have now? Three.

Four. Yeah. Four. the three to four building three major and then you have two or three small people that will end up getting eaten up. It’s gonna happen.

There’s going to be consolidation. Yeah.

I would have figured Disney would have added some properties to theirs because they haven’t been making money on streaming yet.

They haven’t been making money on streaming and quite frankly they haven’t been making much money on uh on their they’re making money on their theme parks. That’s it. They’re really not

making money on their content because it’s just been garbage. Quite frankly,

they really haven’t had a major blockbuster in 15, 20 years.

Talking about theme parks, I don’t know how much longer that’s going to last. I was talking to somebody that their neighbor took a family of four for a day to Walt Disney World cost over $1,000.

Yep. Family of four. $250. I don’t even know if they got the fast passes or what

over $1,000 for one day for people able to go on a three or four day vacation to Disney World.

My wife and I used to love to go to Disney and we used to do that a lot when we first got married. We were just huge Disney fans. And a couple years ago,

we’re sitting there looking at, okay,

let’s go do maybe a Disney trip. And I priced it out and I’m like, I can freaking go to London and stay in

London, one of the most expensive cities in the world, for about a third of the cost of going to Disney. Yeah. Which was insane.

I tell you, I like Universal Studios in Orlando.

I love them more for adults. They got better rides. They better stuff going on. And you know, I think half the cost. So,

not not a fan of Universal. Went there a few years ago, but yeah, not really a fan of Universal. I just don’t one I don’t like rides that spit on me and every single ride seemed to spit on me.

Water. I know, but it’s feels like spit. So, no, I don’t want to do. All right, here we go. The last one. So,

where is money flowing in the market?

Basically, you got to look at it this way, folks. Yes, it’s going to equity,

but the fixed income market, this could be bonds, this could be preferred stock,

this could be treasury funds, whatever it may be. This is where the money is flowing. So, people are looking for

yield because obviously high yield accounts now are running between three and three, four, depending on where

you’re going. And people are looking for a balance in their portfolio for protection. I What are your thoughts? I don’t know your client.

I don’t see it. I don’t see it for us.

I don’t invest in fixed income with client accounts. We’re either cash or we’re in the equity markets because I

just don’t see it. The fixed income market has been a dead area. I don’t care if you get yield or whatever.

You’ve been getting your ass handed to you on the capital stuff.

What’s the point? I I’m not there for the safety. We’ve used CDs in client portfolios for the last several years because we are going to get the money

out there. But as far as ETFs or bond funds or anything like that, not a fan. I just I don’t see it.

If the bond funds are playing dividends and you have a higher earner, it’s not so bad. Yeah. Yeah. But yeah, I don’t see it.

I’ve not really been a fan of it. Like I said, we we’ve done better just on dividend paying stocks and preferred stocks than anywhere else recent at least in recent years.

All right. What do you All right, so let’s whip through this real quick. Give me a second here. Let me get it on the right screen.

Economically,

couple of things. Got a lot of negative stuff going on in the world. When you look through the negative and you look into some of the positives, some of the

positives going on right now, existing home sales, once again, I’m a big believer in home, the home market, if

it’s doing well or if it’s moving in the right direction, so much falls through that. You buy or more people are buying

homes, that means that more people are going to plumbers, they’re they’re going to Home Depot, all those things, it’s it

flows downhill. So if you look at existing home sales, they are up once again for this month. The consensus was

3.8 million. We were we ended up with 4.09.

So once again moving in the right direction there. That’s super exciting.

Housing starts and permits. This is still I can’t believe that we were in a government shutdown in October and we’re

still dealing with delayed data and stuff like that. But housing starts and permits for January 1.48.

Consensus had been 1.3 prior 1.4.

So we’re moving in the right direction there. We’re starting to get more inventory out there which is fantastic.

International trade goods and services.

This was actually really outstanding and it’s one that doesn’t seem to be getting any kind of press anywhere. Fire month

70 billion. this month negative 54 that means that our trade deficit is really compressing fast. The consensus had been

negative67 billion. So that is really good news and we saw that last week when we started to look at import export

prices and things like that. So those numbers I think are going to catch up to us here as we go. Jobless claims that’s the big one. We were just discussing

that a few minutes ago. Jobless claims 213 today. Consensus was 217. that 213 stayed with the prior week. Once again,

we’re not really necessarily seeing that spike up. Although, when you’ve got some of these tech tech and financial firms

that are laying off, that may start to spike up here as we see last. I just want to go over what’s left this week.

And there’s some big economic information coming up this week. This is off the econo day calendar. This is where I get all this. We’ve got durable

goods orders tomorrow. That’s big ticket items. So we want to see how that’s going. GDP comes out. This first read on Q4 and then personal income and outlays.

This is the PCE report. That’s what the Fed follows. We’ve got a Fed meeting next week. So I personally don’t think

we’re going to see any kind of a move in interest rates. Probably not until Powell’s out of the Fed in the summer.

But I think they’re just going to wait and see. And quite frankly, I don’t really see any major need to make any changes to interest rates right now. We

saw the we saw the CPI yesterday stayed flat, not up, not down. There’s not a

lot of new information that would cause the Fed to go, we need to make any changes. What’s your thoughts, Ron?

I’ve been watching the some of the news and they’re predicting, you’re correct,

no change. My biggest fear is they we get the change happening with Worsh and may

Jo does he immediately bring down rates against the consensus of the group. That would bother me a lot.

Um there’s look following this for quite some time now. They say look any change that’s done to interest rates typically

really doesn’t have effect for 7 to nine months or more. if they want to try to make things happen before the midterms,

you know, they’re going to need some pretty drastic action in May, June, or July. I I don’t know. And remember,

there’s a two-month layoff in July or between June and August until they get to Jackson Hole. So, what is there two

possible ch meetings between now and then? Change. Yeah. Yeah.

I don’t know. I mean, my big thing with this is I think the GDP tells a lot, but do you know if that GDP number is a current number or is that old data?

Let me see here real quick. It’ll tell us on here release for Q for January February.

Yeah. Now, this will be this is that first read on it. This will be originally it was originally scheduled for February 26th. So, we are a couple weeks late on this one coming into it.

But I think this is February.

Yeah. So this will be like the January number at this point though. So this is No, this is still Q4.

That’s my point. It’s the January number for Q4. That’s exactly correct.

Oh boy. That’s not good. It’s not good we’re getting this that much later.

No, this is once again, this is what freaking hacks me off with the politicians that, you know, oh, we’re going to fight it out with these

government shutdowns and things like that. Now you’ve basically jacked this up and data that the market relies on

for four or five months. They have one month of out and four months that it’s completely jacked up. Once again, the

same thing with what’s going on with the Department of Homeland Security. Okay,

you’ve jacked this whole thing up and it’s going to take them freaking six months to get back to where they were because you keep that suffer over again.

I know. I I know, but that’s the whole point. They could be going by an initial read, but we’ll see how much it changes. We We know.

Yeah. It’ll be, I think, April, May before we really know what Q4 GDP was at that point because we’re two months behind.

Yeah. Still. All right.

All right. So, last thing I wanted to cover and this was you had asked me the question, hey, where were we in the past when it be when we were talking about

the top 10 oil producers? Let me go back to the data from last week. Let me see if I can bump this up just a little bit in size here. Although this isn’t real

pretty. This was off of Grock, but it gave me the numbers that I needed. The numbers I gave last week actually I think were 2024. So this is more current 2025.

This was based off of the end of like December of 2025. Top 10 oil producers in the world. United States at 13.6 billion or 13.6 million barrels per day.

Saudi Arabia right behind us at 10.1.

Russia at 10 just right at about 10 million. Canada way up there. China I wasn’t aware China

produced as much as they do. I know they Canada is what surprises me more than anything else on that chart.

Yeah. And it’s interesting when you look at it in history as we go back here.

Iraq’s up there, Brazil, which I wasn’t I didn’t I wasn’t aware Brazil produced as much as they do. The UAE, Iran, and

then Kuwait are the top 10. That rounds out the top 10. So, this is where Iran falls in the world here. 3.1 million million.

Kuwait generates that much because I think they’re like the size of Delaware.

Yes. UAE, same thing. UAE and UAE is one big gigantic desert and one little section where they produce oil and

things like that. It’s amazing. They produce as much as they want. What did it look like in history? So if we go back in history in 1970,

US was the number one world producer at 9.6. So we’ve since that time are

another let’s say 4 million barrels per day. Soviet Union which so that was all of the Soviet Union. So that’s

Kazakhstan and all the stands combined into the Soviet Union 6.9 million barrels. Iran back in 1970 was 3.8,

Saudi Arabia was 3.8, Venezuela 3.7,

Libya, Kuwait, Iraq, Canada, and Nigeria, which when you look at 2000,

you know, Nigeria was still there. Some of these have fallen off since. What happened from 1970 to 2000? US fell to

number three in the world. And if you look at the number, we were 9.6 million barrels. We dropped to 5.8 million in

2000. Saudi Arabia became the number one. You know, it massively increased

its production in up to 2000. So they were they controlled the world at that point. And Russia stayed right about

where they were. They didn’t really change much after the dissolution of also what was the difference in Russia as far as size in 1970 versus 2000.

Remember they were chopped up.

Oh, it was significantly larger. Then you lost they lost all the stands and Georgia and everything else and the production of Ukraine which there’s a

significant amount of oil in Ukraine as well. China stayed about where they’re at. Norway was big. It’s fallen off the top. Mexico fallen off the top.

Venezuela most definitely has fallen off the top. I would look probably still using the equipment from 197.

I think they are. Yes, they most definitely are using the equipment from then because the garbage oil that comes out of there, it just eats equipment up.

So Iraq still stayed in the game. Iran still stayed in the game. UAE came online. what I was trying to look up and

I was having internet problems. I was trying to figure out when the UAE became were they existent before when were they founded and I couldn’t get Google to

work in Nigeria once again all those have fallen off a little bit Canada has picked up significantly I started

thinking about it and I’m like what was the what’s the unique thing about why all of this picked up and it’s largely

because of US technology when you look at US technology of the ability to do horizontal drilling and things that

certainly sparked us up. It’s helped Saudi Arabia, our friends, at least we think they are, massively pick up their

production. Canada, once again, they were able to get into the oil sands more with horizontal drilling. I think

Brazil’s about where they were at. UAE is about where they were at. Iran’s where they were at. Kuwait, once again,

they’ve been able to access more of that as a result of horizontal drilling. It’s intriguing to see where we’ve regained or we’ve rebalanced back to where we

were in 1970 and we’ve become an oil exporter again instead of an importer.

Yeah. To answer your question, the UAE was founded December 2nd, 1971.

Okay. Interesting. Yeah, it took them a few years to get to where they are, but they’re a major producer in the world

today. And I think they’re going to continue to be, but I don’t think they’re really going to dramatically increase because they’re so small.

Kuwait, same thing. They’re so small that I don’t really think they have the capability to to produce much more oil

at this point. But at least what I would say is out of all these top producers in the world, at least several of them are

our friends. and work with us on a lot of this stuff and instead of against us. I agree. No, it’s good. Good stuff.

Yeah, I thought it was interesting.

Hashtags in there to graphically display how much they have.

Yeah. And I think it was much much easier to see that today. But I’m like I said, I’m It’s intriguing to me that even with all that we’ve done, we really

haven’t increased our production dramatically from what we were doing in 1970. I think it was just easier to drill for.

Now, we’ve got to work at it a little bit more.

I agree. I agree. Good stuff. I’m glad we reviewed that.

Yep. Great. Thanks, folks, for joining us. We’ll see you back here next week.

God knows what’s going to happen between now and then, but we will see we will see what happens. And we are hopefully getting closer and closer to the end of conflict, and I think when that happens,

we’ll probably see the markets shoot up pretty dramatically at that point. But who knows? So, thanks a lot and we’ll see you guys back here the very next time.