Why Wall Street Wins When Main Street Loses

(00:00.938)

it’s in my intro. It’s in my intro for my Watchdog and Wall Street show. I love my intro. Been using it for over 20 years now. Little bit from Gordon Gekko and his tell-dars paper speech, a little political and economic reality. And that’s what we serve up here. And unfortunately, I don’t have a lot of good news today. Again, I love good news. I would love to spread great economic cheer.

But we got to go through some of these numbers at this point in time. First and foremost, the initial claims, initial jobs claims surged to 263,000 from 237,000. The numbers have been creeping higher this entire year. Now, Wall Street’s thrilled by this. Wall Street’s thrilled by this, big firms are thrilled by this because

Again, the Federal Reserve has something called a dual mandate. I’m not a fan of this. I’ve made this clear before. Dual mandate. Remember I talked about the word priority? Well, if you think about it, can’t, you can’t have more than one. It can’t be a plural. You can’t have priorities. It doesn’t make any sense, right? There should be one priority. One, you got one job to do. That’s it.

And you should do it. One priority. And again, they don’t. They’ve got priorities, which is part of the problem. Their priorities is obviously inflation and the job market. So yesterday off to the races went the markets and that was due obviously to the fact that, my God, look at this jobs number. This is terrible. Look at the revisions. So the Fed’s dual mandate has got to kick in and they’ve got to cater to that. And Wall Street is expecting

an interest rate cut next year, whether it’s 25 basis points, 50 basis points, who knows? The odds of three cuts this year are going higher. We’re in a situation where bad news is good news. That makes sense? Bad economic news, bad employment news is actually good news for the market because it’s going to entice the Fed to lower rates. All right, inflation. Uh-oh.

(02:26.606)

here’s another part of that mandate, right? The Fed is supposed to be dealing with inflation. Donald Trump was interviewed today. It sat on, well, you can’t call it an interview. It on Fox News. Fox and Friends, it’s not like they’re gonna ask him any sort of difficult questions. We all know that. He claimed that he conquered inflation.

Again, it’s Donald Trump, you know, and there’s a lot of things he says is fake it till you make it. Right, right. Let’s go through some of these numbers here. Again, he says it with a straight face. He actually, I think, believes it. I probably he’s got people in his ear telling him, yeah, Mr. President, inflation’s way down. No, it’s way down out there. doesn’t. 71.6 % of CPI components rose at an annualized pace greater than 2%.

in August that’s the highest share since August of 2022. Let’s just do price changes over the past year.

Gas, natural gas, your home utilities up 13.8%. Electricity up 6.2%. Used cars up 6%. Medical care up 4.2%. Food away from home, restaurants up 3.9%. Shelter up 3.6%. Transportation up 3.5%. Food at home up 2.7%. And we’ll get into a little bit more about that in a second.

New cars up 0.7%. Things that are down, oil and gas. Oil and gas is down 6.6 % and fuel oil for your home is down 0.5%. Grocery prices last month most certainly accelerated. They jumped by 0.6%. That’s the biggest one month jump since August of 2022. All major grocery categories are now more expensive than they were a year ago.

(04:32.362)

some substantially so. Coffee’s up 21%. Steaks are up 16.6%. Fruits and vegetables are up 2.3%. Year over year, I can go on. Now, okay, that’s just year over year. This is part of the problem. So we’ve talked about wage gains over the past several years. Again.

Price increases over the last five years. Five years. New cars up 21.4%, family health insurance up 24%. Food at home up 24.8%. Use cars up 26.7%. Shelter up 27.8%. Food away from home up 30%. Electricity up 38%.

Gasoline up 41.9%. Transportation up 44%. Home prices up 50%. Gas and utilities up 54%. Fuel oil up 55%. Auto insurance up 60%. A dozen eggs up 170%. Now, I hope everybody out there has been doing well in their career, their business, their jobs. Hope everyone’s been making more money.

getting raises. They actually showed. We talked about this here on the program. The rate, the average of the price, the salary increases, the people at the top, was it top 10 % of the country or top five? I can’t remember exactly. It was up 4 % year over year. These numbers are huge.

I mean, these are, man, this is just a five year period of time.

(06:24.75)

It’s It’s Again, let’s take a look at government spending, which leads to a lot of this. I want you to actually, again, try to focus in your mind. It’s difficult to do because we throw numbers out. I remember the day. Go back to the 1990s. I keep thinking of Dr. Evil and Austin Powers. One million dollars. And number two is like, it’s not a lot of money.

anymore. Billion dollars. What’s that? The interest expense. Okay, the interest expense on US national debt is 1.21 trillion. That’s over the past 12 months. In the past four years, that interest expense has more

then doubled. Now if the United States came into my office and asked from the Markowski brothers to manage its finances and put money away, I tell them to take a hike, I can’t help you. There’s no way I can. How can I help you unless you’re going to deal with this problem? I’ve explained this before. This happens to us often. know, people wanting to work with us, contact us, set up

you all sorts of, financial stuff for them, their kids, whatever it may be. And these same folks have, you know, 80, 90, $100,000 in credit card debt at 25, 30%. And I’m saying to myself, what am I going to do for you unless you take care of that?

You think that I’m going to show a higher rate of return than the interest you’re paying on your credit cards? And unfortunately, not all the time, but nine out of 10 times, most people they don’t want to deal with their situation because it might look bad on social media or Facebook. And they don’t want other people to think less of them. So again, they keep digging themselves a hole that they’ll never get out of. And what’s that going to lead to?

(08:42.126)

But anyway, it’s same thing with our federal government. Think about it. I you to understand. Okay, you work hard, you pay taxes. Think about the amount of money. What is it now? In fact, I had the number here somewhere. The percentage of every dollar collected, I don’t know, that gets spent on interest payments at this point in time. I’ll find it. But think about it. $1.21 trillion flushed out of the toilet every single year.

Not to mention the fact.

You know, we’re we’re constantly, you know, they can’t hear about the touting about all this wonderful tariff revenue that they’re bringing in. Well, our budget deficit was three hundred and forty four billion in August was supposed to be three hundred and forty. It was three forty four. That’s just further in the hole. That was the budget deficit for August, U.S. government spending.

Right now you want to take it as a percentage of our gross domestic product. In the 1950s it was 17%. 1960s it was 18%. 1970s 21%. 80s 22%. 90s 21%. 2000s 20%. 2010 23%. We are at 27 % right now. 27%. And again we’re being told that we can grow our way out of this situation. Again.

Another.

(10:15.938)

Another bit of nonsense that we’ve been told is in regards to who’s eating the tariffs. Who’s eating the tariffs? told that foreign governments are eating the tariffs. Well, if that’s the case, why are import prices continuing to rise? Well, are import prices continuing Import prices are at their highest level since COVID. And obviously we had all sorts of supply chain issues with COVID.

Remember those pictures that were going around with lumber trucks and look at the millionaire driving by? Highest point in time since COVID. Now again, I always like to talk about these things in terms of societal issues. I get questions about this all the time and the rise of socialists and why is socialism popular and Mamdami and I talked about it here on the program. But these are things that make me

They make me sad. And this is where, again, I understand the president of United States has got to be a cheerleader for the country. He’s got to try to keep people positive. But he actually has to, we have to actually start doing something about some of these issues. Google actually offers a tool that enables observing employee strife. It’s called Google Trends.

And it’s a sample of search requests made to Google. And these numbers, okay, sell my house fast, has skyrocketed. Give car back, skyrocket. Borrow against stock, skyrocket. Borrow against life insurance, up. Sell my Rolex watch through the roof. Bankruptcy lawyer.

through the roof. US credit card delinquent balances continue to tick higher. None of this is good. And this is the worst one of them all, quite frankly. this is something quite, this has gotta be a I can’t say whole of government, but nobody gets together. I wish they would be honest and address this. I really do.

(12:39.874)

You take a look at this survey and this is going back, boy, it’s going back to 1985. People, the question is, people like me have a good chance of improving our standard of living. 19 to five is about 75%. It dropped, came down to around what, 60%. This was during the recession in the early parts of the 19.

90s, then went through the roof up until 2000. is again, dot com Clinton years was up over 75%. That’s three out of four people came down, came down, actually, it you know, you would think that it would really hit a low in 2008 2009. It really hit a low in 2012, but it was still at 55 55%.

Again, it’s still over one in two people thinking that things were going to get better. Popped up again right before COVID. Again, this is the first Trump term to almost 65%. Now it’s fallen off a cliff where it’s 25%. That meant one out of four. One out of four people that are surveyed saying that people like me have a good chance of improving our standard of living. That’s a disconnect. America doesn’t work when people feel this way.

These are things that need to be addressed. I’ve talked about it when it comes to real estate. We have to deal with the inflation problem. There’s a myriad of different things that we need to do and most certainly it’s involved in getting government out of the way. Again, I don’t know. Like I said, I don’t know who has the president’s ear when it comes to this. I don’t know. I don’t know if he’s just, quite frankly, if he’s not aware of the problem.

But there most certainly is one when one out of four are saying guess what I’m not going to be able to get ahead and we can continue you like I said you might even fake it till we make it yeah inflation’s down okay whatever it’s not it’s not it must be dealt with. Watchdog on wallstreet.com