• 2 months ago
The Meyers Report Fast 15
Transcript
00:00Welcome to the fast 15. I'm Emil Husson sitting in for Gary Myers, who will be rejoining us when it doesn't sound like he's being chased by a flock of angry geese.
00:15So, um, we have with us today, Bob Janiski and Isaac.
00:22And let's start with Bob Bob.
00:26How are things looking what's what's current what's coming ahead for the economy.
00:33Well, a lot of, as it has been for most of the year a lot of mixed data.
00:38You know, just a week ago, people were thinking about a recession starting, because the employment numbers were slower weaker, and there's still growth, but they were slower and everyone just a lot of people just assume this might be the start of a recession
00:55Then we received more data on July, and a number of the business surveys show that the economy was booming and the service area, which is the bulk of the economy in the United States.
01:07So, we've gone back and forth with economic data will continue to do that we've got some inflation data CPI that most people bus over those data coming up this coming week, and they are expected to show extremely low inflation.
01:27If they do that will kind of reaffirm that you know the inflation is coming down. There's a chance, however, that the numbers are going to be a little higher than usual, and that they'll still show about 3% inflation year over year.
01:40And so, not quite where the Fed would like it to be. Even so, the Fed is set to start reducing interest rates, it thinks monetary policy, it thinks it pretty much has put the economy on the right road.
01:56So, I expect we are going to see a cut in interest rates next month, a very minor one maybe a quarter of a percentage point, but the Fed is just kind of trying to deal with a economy that's just rolling off a number of mixed numbers, which makes it very hard to make any real definite moves one way or the other.
02:19Something's been on my mind about that, as far as the Fed, and they're what I call tinkering with the economy to try to stabilize inflation. I know they're trying to maintain an inflation rate of 2%. But are they using a hammer to do microsurgery.
02:43Well, they're in a difficult place. They created the inflation. Now, the cause, the initial cause was all the government spending, this government spending just soaring $2 trillion of extra spending in a year when the economy was already moving higher.
03:01If the Fed had just done nothing, then that extra spending would have sent interest rates up through the roof even higher than they did. But what the Fed did is it initially accommodated the spending, it bought up all the new debt. And as a result of buying up all the new debt, it funded the spending by increasing the money supply, which led us to 40 year high inflation rates.
03:27Now, having done that, now the Fed has no choice but to try and get things back under control. And that's what it's done for the past almost two years now, is take all the extra money that it had put in the economy to pay for all that spending, it took it all out.
03:45But it thinks now that and I believe it has pretty much done the bulk of what it's going to do without sending the economy into a serious downturn. So at this point, the Fed is now at the point where maybe we're not going to put in, we're not going to take any more money out. But they are still not the point where we're going to put money in.
04:06So we could have, you know, kind of a sluggishness for the next three, six months, something like that. And if it gets any worse than that, the Fed will cut rates sharply, it will start printing more money to try and ease the downturn and make sure it's not too bad.
04:22So I think the Fed has put itself in a much better place than we were, say, two years ago, when we were just building up inflationary pressures, and people were very worried about how high interest rates could go. I think the Fed has been pretty successful in undoing a lot of the damage, not all of it. Prices are still way up, people are still hurting from the inflation.
04:45But the Fed, having made a big mistake, I think has now come back and corrected at least for some of the damage that they've done.
04:54Are they tending to the economy and to the people? Or are they trying to salvage the administration and kind of shore up their record?
05:09I think they're trying to salvage their own reputation. I mean, they blew it. They just totally blew it.
05:15A statement by the chairman of the Fed, one congressman asked him early in the time when they were creating money, you know, the money supply is exploding, isn't this going to lead to higher inflation?
05:29And Chairman Powell said, now he's the one in charge of the money supply. He said, oh, we don't look at the money supply anymore. We don't think it's really that important.
05:39That proved to be a terrible statement, because it was followed by the 40-year high inflation rate, a lot of disruption in the economy.
05:50Forget about the administration. The Fed just has its own reputation that it has to deal with. And I think having made the mistake, they're dealing with it as well as they can now.
06:00Under the current conditions, do you think that the current administration, and by extension, a potential Harris-Walz administration, do you think that they are going to be doing what's best for the country with their policies?
06:19Or do you think Trump policies, and let's not look at personalities, let's not look at bombast or twinkle or anything like that.
06:28I don't know where the bombast or twinkle is.
06:31Whatever.
06:33Do you think that the stated Trump policies of low taxes, reduced regulation, and drill baby drill is going to be better than letting tax cuts expire, increased federal spending in the name of relief for inflation, and the continued green agenda?
06:57Which do you think is going to be better for the country in the long run?
07:00My latest book, Rich Nation, Poor Nation, goes through the history of the United States and most countries or many countries throughout the rest of the world.
07:08And it's as clear to me as it can possibly be that whenever we've had policies, increased government spending rapidly, increased taxes, we end up having declining living standards.
07:23And that's what we've seen in the past three years, undivided living standards are down about 3%.
07:28And the actual pain that's felt because of the higher inflation is even greater than that.
07:33They have the full intention that their policies are exactly the thing that this country needs.
07:41I mean, they absolutely, they believe that.
07:44In spite of the fact that interest rates have come down, you can see them bragging about how well everything is going and they're really proud of the economy.
07:52So if Harris were to be reelected, same policies, they are going to continue to increase federal spending, federal control of the economy.
08:02And when they do that, it leaves less spending for the private productive sector, which really creates all of our living standards.
08:11And so, yes, if she gets elected, really serious economic problems.
08:17They're going to spend a lot of money.
08:18The deficits will go up.
08:19We are already dealing with very fragile finances given the debt that is rising so rapidly.
08:26So I think we're in for really tough times.
08:29Trump's policies are consistent with what made this country great with the rise in living standards that made us the envy of the rest of the world.
08:39And I would be willing to bet that if he's elected, we will continue those very positive policies.
08:47There's been a lot of assumption that there's incompetence at work, that they've just been fumbling and fumbling and fumbling.
08:55At what point do you no longer attribute it to incompetence, but intent?
09:03It's difficult to suggest intent.
09:05I just have a belief in people that most people do not want to create a difficult economic environment for others.
09:13So I'm attributing it to incompetence.
09:16And we've seen the incompetence.
09:17The most recent example is with the Secret Service.
09:20I mean, even the Secret Service now, the heads admit they were incompetent.
09:26I mean, they basically blew it.
09:29They can't understand how things could have gotten so out of hand.
09:33And there's a history of incompetence.
09:36And we don't have time to go through it, but I'm coming up with a paper that shows the incompetence, not just with the economy, which we've just talked about, but the incompetence in terms of foreign policy that led to the Ukraine war.
09:51We should never have had the Ukraine war, other than for incompetent steps that were made by Biden's advisers.
10:00We never should have had the war in Gaza, except for incompetency.
10:04And I go into detail on all of these things.
10:07When you are incompetent and you're not trying to create a war, but you just make the wrong political decisions, you can create the sort of death and destruction we've seen around the world and the sort of pain we've seen here in the U.S.
10:24And I think that incompetence has extended to our transportation secretary, who was completely missing in action when we had that latest CrowdStrike debacle, and I got caught up in that.
10:39I ended up having to take a train home, and I'm glad that ran on time and stayed on the rails.
10:44Well, Isaac's our expert on transportation, and I like to get his fix on that.
10:49Yeah, this is my segue to Isaac.
10:52Bob, thank you. And Isaac, you want to kind of address some of the transportation issues that might be coming up?
11:00Yeah, we've been in a two-year freight recession here, Emil, as Bob knows. We've been reporting it now for the last two years.
11:07I really started quarter two of 2022. We started seeing relief coming out of this recession. We started seeing signs of recovery April of this year.
11:19I've called it a slow crawl back to normalcy in our industry, but from all the recent economic activity, and now we have a Kamala that's leading in the polls, there's definitely a lot of concern within the trucking industry right now.
11:34The trucking industry was very bullish on a Trump victory, and for all the reasons that Bob just stated, everything from drill, baby, drill, to most importantly for us, what we need in the industry to really ramp up volume is strong consumer confidence in the marketplace.
11:53We need people spending money.
11:56Are there any issues coming up that could affect the trucking industry where we're going to have to kind of plan ahead?
12:05Yeah, Kamala winning.
12:09Outside of that, there's the East Coast Ports contract runs up here in September, so a lot of talks about a potential strike right before our holiday season here in the States and our peak season in the trucking industry.
12:24A lot of carriers across the entire industry, trucking companies, that is, as well as brokerage companies who have been struggling this entire two years, have been really waiting for a strong second half of 2024.
12:37And again, with everything that we're seeing today in the polls and a potential strike, people are a whole lot more cautious about the second half of 2024 now.
12:50Not too long ago, one of the Meyers Report members caught wind of an upcoming transportation crisis, and I think it was the actual supply chain crisis that was in 2021.
13:09And he did his holiday shopping in the summer based on that information, and it turned out that he was one of the only ones he knew who had gifts for his children when the time came.
13:23Should we be looking at that again?
13:25Absolutely. These strikes, if they do indeed go on strike, will affect six of the largest ports here in North America.
13:33So there'll be a lot of rerouting, which will cause a lot of inflationary pressures on the ocean, as well as once volume gets rerouted, not only do we see delays and more costs on the ocean, when that volume hits a port with the capacities unable to handle it,
13:50you're going to see prices on the trucking side increase as well.
13:55So not only will we see inflation, we will also see our shelves empty.
14:00So yes, do your Christmas shopping right now.
14:05Last time we went through a significant strike in our industry was back in 2015 when the West Coast Longshoremen went on strike.
14:12That went on from March of 2015 to the end of May, so about two, two and a half months.
14:20It was an absolute drought in the Chicagoland area in terms of containers coming in, and we saw a supply chain disruption back then as well.
14:31Okay, so maybe not hoarding, but at least whenever you buy something, maybe get a little bit extra each time so that you have some on hand.
14:39The way things are going, Emil, I would borderline say maybe hoard just a little bit.
14:43But don't do anything else during COVID.
14:45We went to Costco and spent $1,200 and it all rotted in our basement.
14:50Okay, so moderation even in hoarding.
14:53Yes.
14:55Okay.
14:56All right.
14:57Bob, any final thoughts based on what Isaac has said?
15:02Just keep your eyes on the polls and the betting odds to see what the heck is likely to develop over the course of the final, what, less than three months to the election.
15:13Okay.
15:14Well, gentlemen, this has been very informative, educational, and I just want to thank you both for, Bob, for coming in and Isaac for tuning in from wherever you seem to be.
15:27Yeah, where are you, Isaac?
15:28Is that Chicago?
15:29We're in Chicago.
15:30It's Allison's birthday.
15:32Ah.
15:33We're going to enjoy the day together.
15:35Well, it looks like there's peace at the moment.
15:37She doesn't know yet, but we're going to Wisconsin after this.
15:39Oh, okay.
15:40Well, she won't see this until after.
15:43So, but thank you again, Isaac.
15:46Wish Allison the best for us.
15:48And thank you.
15:50Goodbye.
15:51God bless.
15:52And God bless America.