9/23/26 How Interest Rates & Economic Policy Impact Your Wallet

The Moneywise Radio Show and Podcast Wednesday, September 23rd BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com https://www.moneywiseguys.com/ facebook: Moneywise_Wealth_Management https://www.facebook.com/moneywiseguys/ LinkedIn: Moneywise_Wealth_Management https://www.linkedin.com/company/moneywise-wealth-management-bakersfield/ Guest: Dr. Richard Gearhart, Professor of Economics at CSU-Bakersfield The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Dr. Richard Gearhart & CSU-Bakersfield are not affiliated with nor endorsed by LPL Financial or Moneywise Wealth Management

• 0:00Speaker 00

  Live from the basement inside the historic Woolworths Building in downtown Bakersfield.

• 0:05Speaker 01

  Call or text in at 661-396-1000.

• 0:29Speaker 02

  Securities offered through LPL Financial, member FINRA/SIPC. Investment advisory services offered through LPL Financial. LPL Financial and MoneyWise Wealth Management are independently owned and operated.

• 0:37Speaker 00

  Now, let's start the MoneyWise Show.

• 0:40Speaker 03

  Hey, welcome to the Wednesday edition of the MoneyWise Show. Live from the basement of historic Woolworths Building downtown Bakersfield.

• 0:49Speaker 03

  It's gonna be a nice day. It's starting to cool down a little bit. I mean, it's still a little warm today, but eh. It'll cool down. We're getting to the, we're getting to the end of the summer.

• 1:01Speaker 00

  Ninety-eight.

• 1:02Speaker 01

  Will it tomorrow?

• 1:02Speaker 00

  A hundred?

• 1:03Speaker 03

  Yes, I understand that, but it's like, it's like the, it's like the last vestiges of-

• 1:08Speaker 01

  It's like a guy that's getting a pool put in or something.

• 1:10Speaker 03

  Oh, please.

• 1:10Speaker 00

  This guy, yeah.

• 1:11Speaker 03

  It's, it's the last vestiges of summer.

• 1:15Speaker 01

  Is it though?

• 1:15Speaker 03

  Like the last little heat wave before we get into like Halloween weather.

• 1:19Speaker 01

  The last month, you mean?

• 1:21Speaker 03

  The last month.

• 1:22Speaker 00

  So I didn't have pool growing up and I'll tell you what, man, that was on the bucket list. Like I gotta get a house with a pool. And when it finally happened, man, I just-

• 1:29Speaker 03

  You live in it.

• 1:30Speaker 00

  I've arrived.

• 1:32Speaker 00

  You don't realize, and it, it saved us thousands in, in uh-

• 1:36Speaker 03

  Air conditioning costs?

• 1:37Speaker 00

  Childcare or-

• 1:39Speaker 03

  Yeah.

• 1:39Speaker 00

  It's free entertainment. Like the kids never get tired of swimming. I don't either. It's fun.

• 1:43Speaker 03

  It's fun. It's beautiful. But yes, it is the last vestiges of summer. I'm sorry to say this, Stephen. It's that, yes, it might be a little warm for the next two or three days.

• 1:51Speaker 01

  Two or three weeks.

• 1:52Speaker 03

  Nah.

• 1:52Speaker 00

  Yes, two or three weeks.

• 1:53Speaker 01

  I talked to Elena Russ this morning. She's expecting triple digits all the way up until Halloween.

• 1:58Speaker 03

  Are you kidding me?

• 1:59Speaker 01

  Yeah.

• 1:59Speaker 00

  But we're getting El Nino is tracking. Everyone's talking about it. It's the real deal, man.

• 2:04Speaker 01

  Hopefully we get some rain because we need it.

• 2:06Speaker 03

  We're going to. Be careful what you wish for there, Steve Z.

• 2:09Speaker 01

  I'll take it.

• 2:10Speaker 03

  Steve, be careful what you wish for. El Nino is not something you like, oh yeah, we're gonna get a little bit of rain. We might, we might have, you know, Lake Talarri again, right?

• 2:20Speaker 01

  Bring it, bring it.

• 2:21Speaker 00

  I remember driving over and as I look back, it's like, how, how was I able to go? My mom let me go over there, but went over to Carpinteria with a couple of friends and just being dorks. We were in friends' parents' Montero. Anyone remember those ugly old Monteros? Really top heavy and we were, we were mudding out in the, like in the orange, uh, orange vineyards. Is it a vineyard? Orange field?

• 2:44Speaker 03

  Orange, yeah.

• 2:45Speaker 00

  Orange groves, groves.

• 2:46Speaker 03

  Yeah, groves, groves.

• 2:47Speaker 00

  Orange groves. Sorry, Steve.

• 2:49Speaker 01

  Sure.

• 2:50Speaker 03

  Hey, you can call or text into the show anytime, 24 hours a day, 661-396-1000, 661-396-1000. For the next hour, you're here on News Talk 96.1 and 1230 AM, KERN, streaming live at MoneyWiseGuys.com. I'm your host, Justin Leland, here with-

• 3:08Speaker 00

  Seth Perry, glad to be here.

• 3:09Speaker 03

  Yeah, absolutely. Um, we have a great show. We actually, uh, there's a lot of things going on in the markets, a lot of things going on in the economy, and we're gonna get to that, down to that in just a minute, but you know, obviously, uh, our guest today is none other than Richard Gearhart, uh, professor of economics over at Cal State Bakersfield. So we're gonna get to, get down to business a little bit with him and, and find out more about what some of these, um, I guess you can say macro, uh, macroeconomic factors are, are playing into our economy and why interest rates are spiking and all of these other things. Uh, we'll, we'll, we'll keep it entertaining.

• 3:45Speaker 00

  Yeah.

• 3:45Speaker 03

  Uh, he's always entertaining, um, always coming in in his Clemson gear and shorts and flip flops.

• 3:51Speaker 00

  Boss, like a boss.

• 3:52Speaker 03

  As a, as a, as a college professor should do.

• 3:55Speaker 00

  Yeah.

• 3:55Speaker 03

  Uh, right?

• 3:56Speaker 00

  I remember reading this thing on LinkedIn and it said, uh, if you're going in to pitch an idea or sell to a room of executives, you don't ever, you look for the person who's the most casually dressed, like if they're literally in the back and like a sweatshirt, you know, and-

• 4:09Speaker 03

  That's the guy.

• 4:10Speaker 00

  Flip flops. That's, that's the decision-

• 4:11Speaker 03

  That's, that's the guy.

• 4:13Speaker 00

  That's the Mark Cuban of the room.

• 4:14Speaker 03

  Right, exactly. So yeah, we're gonna get down to business with him a little bit later, uh, when, when he gets here, but, um, yeah, we wanna talk a little bit about what's going on in the market. Seth, what do you got, man?

• 4:24Speaker 00

  Yeah, S and P's down a bit, down point seven. Dow Jones, the same, point seven, and the Nasdaq's down about a whole percent. So, interest rates are putting some pressure on stocks. The yield on the 10-year, we were talking a lot about this before the show. The yield on the 10-year Treasury has moved above 5% and so-

• 4:44Speaker 03

  Yeah, when Treasuries go up, bond yield, the, the prices go down generally. Um, you know, it's, it's, it is a little bit of an interesting, uh, thing that's going on in the economy as a whole. You know, and I do wanna get Dr. Gearhart's, uh, take on this, but you know, my take at this point is that when you see the stock market down and the bond market down, right? The yields are up, but the bonds are down. That's not really normal. It doesn't happen a whole heck of a lot where both the bonds and the stocks are flowing in the same direction. 2022 happened for an entire year.

• 5:15Speaker 00

  For a long time, yeah.

• 5:16Speaker 03

  Right, you know?

• 5:16Speaker 00

  Never happened like that before.

• 5:17Speaker 03

  Yeah, doesn't, it doesn't happen very often where you have stocks and bonds both retreating in the same direction and, uh, for a long period of time. So I mean, this is a bit of an anomaly. It's not crazy, but here's, here's the reason why. Um, strong, strong economic data, right? So the September manufacturing and services readings came in much stronger than expected, which basically lends to the Federal Reserve doing what we thought about, which, you know, last week they, they raised interest rates. Um, this gives more weight to them raising interest rates at least one more time between now and the end of the year, possibly two. If, uh, if the, if the economy keeps humming along, uh, the Federal Reserve, they're, they're really, their only way to combat inflation and what is inflation but an overheating economy, right?

• 6:06Speaker 03

  What, the only thing that they can really do is raise interest rates and make borrowing more expensive. Um, meaning we don't need as much money flowing through the economy. So, you know, let's take a little look back at the 10-year bond yield, um, historically. We are still, you know, yes, the, the bond yield right now at 5.1, 5.15, um, on the 10-year is similar to what it was in 2007. It was also around the same point at 2002, 1998. Uh, but prior to that, the 10-year bond yield was easily over seven, eight percent, basically for the entire time, all the way since like 1982.

• 6:52Speaker 00

  Mm-hmm.

• 6:52Speaker 03

  Okay, 82, the 10-year bond yield was just under 16, a hair under 16.

• 6:57Speaker 00

  So this is where we hear the stories of our parents-

• 7:00Speaker 03

  Having an 18% mortgage rate.

• 7:01Speaker 00

  18% mortgage, so, yeah.

• 7:03Speaker 03

  That's, so this is a great example because the 10-year bond yield is what determines the, the 30-year mortgage.

• 7:08Speaker 00

  Yeah.

• 7:08Speaker 03

  Most people don't know that.

• 7:10Speaker 00

  I want a listener to call in. If you're out there cruising around and you had one of these gnarly 18% mortgages, man, call in, talk to us about it.

• 7:17Speaker 03

  Clients that tell me about it all the time. It's like, yeah, my first house that I bought in 1983, it was a 15% mortgage. And I'm like, holy cranny. Uh, but let's, let's look at it in, in reality. So, you know, we had the 2008, uh, dot com bubble. What was the 10-year bond yield then?

• 7:35Speaker 03

  Five and a quarter, right? After that, it started to fall and it continued to fall all the way into like 2012, you know, where it basically got down below 2%, uh, 2% yield at that point in about 2012, 2013. And we've basically been about the same point all the way through until COVID happened. Okay? We were sitting there at about 2%, 2.5%, kind of very, very closely in that point. COVID happens and all of a sudden the 10-year bond yield drops down to what?

• 8:06Speaker 03

  Point 65, 0.65.

• 8:09Speaker 00

  Is that when Japan's went negative?

• 8:10Speaker 03

  Yes, Japan's went negative, Germany's went negative, Switzerland went negative. Actually, Switzerland stayed positive, but most of the European Union had negative interest rates. Who's gonna, who's gonna buy a bond and have a negative interest rate?

• 8:23Speaker 00

  Yeah.

• 8:24Speaker 03

  Right? So that's when that happened, was right around COVID, uh, in March of 2020.

• 8:30Speaker 00

  How much money did our government print? Do we know?

• 8:32Speaker 03

  That's the point.

• 8:33Speaker 00

  With all the stimulus.

• 8:34Speaker 03

  Beyond that, so that, that's, that's a great point, Seth, because you have a situation where the bond yields themselves dropped all the way down to near zero, meaning, basically borrowing money was free. This is the point in time when you could go get that 2.5% mortgage.

• 8:49Speaker 00

  Oh, yeah.

• 8:49Speaker 03

  Yeah, yeah. So borrowing was basically free.

• 8:54Speaker 03

  And yet, the government also then infused through all of these programs during COVID.

• 9:03Speaker 03

  To, so you had this double whammy of almost free to borrow money as a business. It's almost free to borrow money, essentially free. And we had this influx of massive amounts of money coming into the economy.

• 9:17Speaker 00

  I mean, that was to.

• 9:18Speaker 03

  Trillions of dollars.

• 9:19Speaker 00

  So much, but to keep people who lost their all, their, I mean, it's just to try to keep them afloat. But then it's like.

• 9:25Speaker 03

  We infused all this money into the economy.

• 9:28Speaker 00

  A lot of people got checks that didn't really need checks.

• 9:31Speaker 03

  Well, not only that, but then, but basically, everybody wound up going, we wound up going to like 25% unemployment like overnight.

• 9:37Speaker 00

  Yeah.

• 9:38Speaker 03

  And then within three months, we were back to where we were, right? The sub 4% unemployment. Basically, everybody got hired back. So all this money that was thrown into the economy, it's like, oh, well, it's free money and the borrowing is free. So all this influx of money created a situation where unfortunately, we wound up with inflation in the.

• 9:57Speaker 00

  And no corruption, no one, no one at all was corrupt during that time.

• 10:01Speaker 03

  Nobody was taking money they shouldn't have taken. And.

• 10:03Speaker 00

  I remember, I remember hearing a story about, and I remember I was teaching at West and they gave us our, our test kits and whatnot for COVID. And I was looking at this test kit and I'm like, man, this is really nice. Like, this is like a high end, you know?

• 10:20Speaker 03

  Medical grade, yeah.

• 10:21Speaker 00

  Medical grade, it's like, who got that contract, like to come in?

• 10:25Speaker 03

  The brother in law.

• 10:25Speaker 00

  It's just crazy.

• 10:27Speaker 03

  But inflation at that point was close to 9%. And with all of that money flowing through the economy, obviously, you can see, I mean, inflation is not something that comes down very quickly. It takes a long time for inflation to come down. We haven't yet come down from, from COVID. We have not yet even gotten close to our 2%, you know, metric that the Federal Reserve looks at. We're just under 4%.

• 10:52Speaker 00

  Yep.

• 10:52Speaker 03

  You know, 3.8, 3.9%, depending upon which metric you look at.

• 10:57Speaker 03

  You know, we were at 9% in June of 2022, 2021, right? And that's why 2022's stock market and bond market were so bad.

• 11:08Speaker 03

  But here we are now where we're climbing back up into the fives. Historically, that's pretty normal. I mean, if we're really being honest about it.

• 11:18Speaker 00

  And it's not all bad news for the savers.

• 11:20Speaker 03

  Yeah, so if you're, if you're a retiree who's, who's living off the income, you know, if you're holding these older bonds to maturity, you're getting your money back, right? Your yield might be slightly lower, you know, because you, you have a coupon rate on that bond of say 3.5% or 4%. Well, now that if you were to buy a brand new bond, you get your $10,000 back that you invested, right? And you reinvest that back into the bonds today, you're getting a 10-year bond yield at 5.2%, you know, 5.1, 5.2%. That's not bad.

• 11:51Speaker 00

  No.

• 11:52Speaker 03

  It's not bad. Now, if you're holding bond mutual funds, you might see your, your bond, you know, the prices come down a little bit, but you know, in the long run, these yields are actually going to be good for people that are savers. Not so good for people that are borrowers, you know? So, you know, we've heard it from, you know, real estate folks that, you know, hey, now that the, the interest rates are back above 7% again. Cause again, the 10-year bond yield is what determines your 30-year mortgage. It's not the 30-year bond, that's not what does it, it's the 10-year bond. And so take the 10-year bond yield, add 2% to it roughly, and that's going to be your 30-year mortgage. So if we're at 5.1%, you're looking at about a 7.2% mortgage rate, which what is it today? Seven and a quarter.

• 12:37Speaker 00

  I think a lot of people are still holding on, you know, because it's expensive.

• 12:40Speaker 03

  It's gonna come back down.

• 12:41Speaker 00

  We're gonna see, no, no, I don't think so.

• 12:44Speaker 03

  I think the days of seeing.

• 12:45Speaker 00

  2875.

• 12:46Speaker 03

  Yeah, I think that's done and over with.

• 12:48Speaker 00

  And I get envious of the old 15-year, 2.25 or 2.5, but we, we refi'd twice and I think it was just a little over a year and I get it, you know, financially and break even, blah, blah, blah, but we're locked into a 2875 and.

• 13:04Speaker 03

  Right, and I mean, we, we, you know, did the same thing, we bought in like 20, you know, 2017. So we're a third of the way through our mortgage at this point and we're 2.875, right?

• 13:15Speaker 00

  Do you do the extra payment or any extra, whatever?

• 13:18Speaker 03

  If you have a loan that's less than 3% and you're paying more on it, shame on you, you should not be doing that.

• 13:26Speaker 00

  The only reason you would is maybe if it's the emotional, like psychological part of paying your house off early, maybe.

• 13:33Speaker 03

  Potentially, but here's the, here's the argument. If it's less than 3% and inflation is at 4%, you're basically getting free money from whoever's lending you the money, right? If you have it invested, are you able to get a higher than a 3% yield? Well, obviously, if you put it in a 10-year bond right now, you're getting five and a quarter or 5.1 or whatever the number is, right? So that arbitrage means that, hey, the, the risk-free number, the risk-free interest rate that we'll be able to get, the two-year bond is almost 5%.

• 14:04Speaker 00

  Now, correct me if I'm wrong, but a lot of people, but Justin, Justin, I'm not gonna be able to write off my interest. But most of the people who are having that argument, they don't even meet the standard deduction.

• 14:14Speaker 03

  Right, most people are not even doing that. And so the other side of that coin is, well, if you're paying it off sooner, you're paying it off faster, you're not, you're, you're actually just saving yourself the 3% of what, you know, if, if, if that's your mortgage. If the interest rate is, say, above 8%, nine times out of 10, I say, you know what, pay that off as fast as you humanly can, get rid of it.

• 14:35Speaker 00

  I lean more of the six, seven.

• 14:36Speaker 03

  Yeah, but I mean, 6% or 7%, you could get a yield from a diversified portfolio that gets around there. So that's why I say between 3% and say 7 or 8%, it's whatever makes you feel better. So if your mortgage right now is say 5.5% and you want to pay extra on that mortgage, go right ahead, right? If it's, you know, if it's 7%, pay extra on that mortgage, go right ahead. If it's less than 3, I kind of look at that as like, you can, the, the extra $150 or $200 you're putting towards the mortgage, you can put that into a brokerage account or whatever that's making better than 3%.

• 15:12Speaker 00

  Or even a high yield if you want no risk.

• 15:14Speaker 03

  If you want no risk, you can get a two.

• 15:15Speaker 00

  Money market.

• 15:16Speaker 03

  You can literally, you can buy a T-bill right now, a two-year T-bill, paying 4.9%.

• 15:21Speaker 00

  Really?

• 15:22Speaker 03

  Yes. The two-year jumped, it's actually at like 4.85 or something like that.

• 15:26Speaker 00

  Yeah.

• 15:27Speaker 03

  So, put that extra, put that extra couple hundred bucks a month into, into T-bills or into money market that's getting it, you know, 4% or something like that. Cause that's what's gonna be happening. So, that's, that's me, just, you know, that's my, my kind of rule of thumb is that, you know, sub, sub 3% loans.

• 15:45Speaker 00

  Yeah, we're on the same page.

• 15:46Speaker 03

  I'm paying the minimum, man. So, yeah, so somebody here says, our first home in the early 90s was around 15 to 18%. Our second home, we were able to get it under 5% and then refinanced. Yep, our good friend Alan Maderos, yeah, for even lower. Should I dare to ask what it is right now? Yeah, we just said it's about seven and a quarter. It's, and if it's a second home, it's, it's higher. If it's an investment property, it's higher. So if it's primary residence and you're coming in like, you know, conventional loan, 20% down, 25% down, you're, you're still paying seven and a quarter, roughly.

• 16:23Speaker 00

  And that, it paid off for them, they, they add here, I know our second home was around 275K and is now up to 600K, which is, that's kind of.

• 16:32Speaker 03

  That's, that, yeah, you're getting the.

• 16:34Speaker 00

  If you bought in between basically 2000.

• 16:38Speaker 03

  17, 16.

• 16:39Speaker 00

  10 to 2018.

• 16:41Speaker 03

  Yep.

• 16:42Speaker 00

  You know, yeah, that's where you're at.

• 16:44Speaker 03

  Yeah.

• 16:44Speaker 00

  That's where you're at, it's wonderful.

• 16:46Speaker 03

  Yeah, and so, I mean, we have a couple of other questions that came in here. This one's actually a really good one.

• 16:52Speaker 03

  The, the debt consolidation, you want to read that there, Seth?

• 16:55Speaker 00

  Going back to debt consolidation, after falling behind two separate evictions that took about 10 months, the company says the account is now at zero percent interest because it was charged off and may have gone to collections. If it is charged off, should I still pay the balance? Will paying it make a difference on my credit? Great question.

• 17:18Speaker 03

  Really easy answer to this is yes, and I'll, I'll tell you why. So, in this particular scenario, when somebody says, hey, it was, it was charged off. So, let's imagine that, that I run, I don't know, a trucking company or something like that. And.

• 17:37Speaker 00

  Can I be the debt, the nasty debt collector again?

• 17:39Speaker 03

  You can be the nasty debt collector here. So, Justin Trucking, I charge a customer, Steven, Steven needs to get his widgets across the country.

• 17:48Speaker 00

  Old Steven.

• 17:49Speaker 03

  And his bill.

• 17:50Speaker 00

  Big old bag of widgets.

• 17:51Speaker 03

  His bill for that, for that run was $10,000. He owes me $10,000. But Steven, being Steven, stiffs me on the bill.

• 18:01Speaker 00

  This guy.

• 18:01Speaker 03

  Just like, just like a degenerate gambler that he is.

• 18:04Speaker 00

  Betting on the Dolphins, dude, that's the problem. I'm not that stupid.

• 18:07Speaker 03

  The degenerate gambler over there, he, he owes me $10,000. Now, I go and it's, it's on my books as a company, it's on my list as, as a receivable, right? So from debits and credits, it's on my list as a receivable. After so many times to collect or trying to collect or whatever, and Steven always.

• 18:25Speaker 00

  Costs you money.

• 18:26Speaker 03

  Costs me money and he's sitting there saying, oh, checks in the mail, checks in the mail, sorry, it got lost again, okay, checks in the mail. Finally, after six months, I'm like, I'm never gonna collect this money.

• 18:36Speaker 03

  So, I, I call Seth.

• 18:38Speaker 00

  Yeah.

• 18:39Speaker 03

  I call Seth Perry Collection Agency, the SPCA.

• 18:42Speaker 00

  The SPCA, that's right.

• 18:44Speaker 03

  Seth Perry Collection Agency, and I sell him that receivable, that debt of $10,000, I sell it to him for two grand.

• 18:54Speaker 03

  Okay, the debt collector at that point, they're on the hook, they own it, they're gonna try and collect that $10,000, right? So it's 0% to me because I'm not, I don't own the debt anymore. That debt collector, though, Seth Perry's collection agency.

• 19:09Speaker 00

  It helps you on your taxes, you, you.

• 19:11Speaker 03

  Well, it's.

• 19:13Speaker 00

  They credit you off as a loss, right?

• 19:15Speaker 03

  Well, one of the, yeah, helps me off on the business because, well, I still lost the $10,000.

• 19:20Speaker 00

  Yeah, you didn't get, you'd rather have 10K than a little tax credit.

• 19:22Speaker 03

  I'd rather have the 10K than the, the, the, the bad debt write-off. But for you as the consumer, you just had your credit nailed.

• 19:30Speaker 00

  Yep.

• 19:31Speaker 03

  Because it goes on your credit. Steven's credit is now in the, in the, in the toilet because he owes me $10,000.

• 19:36Speaker 00

  So on his credit report, it will clear yours, but then comes over to SPCA.

• 19:40Speaker 03

  Correct. You are now the owner of, of the $10,000 debt.

• 19:43Speaker 00

  So this guy says why the, the, the debt collectors are blowing you up because think about it, if I can land that debt, or if I can even negotiate with Mr. Steven in there, I could say get four grand. I've doubled my.

• 19:54Speaker 03

  Investment.

• 19:54Speaker 00

  My investment. Cause I put, I bought that debt for two grand, right? And then I said, if I can get 4K, man, I'm 100% return, I'm rolling.

• 20:03Speaker 03

  Well, then it's for me as the business owner who lost that, that, that lost that $10,000, at least I made two grand on it.

• 20:09Speaker 00

  Yep.

• 20:09Speaker 03

  Right? So I at least, I'm, I'm out the $8,000, but I probably spent that much just in trying to collect that debt anyways. So I sell it off to you for pennies on the dollar. You, you, you know, charge it and say, okay, well, I want the $10,000. If you get the 10 grand, cool. If not.

• 20:24Speaker 00

  We should partner with the SPCA and do this.

• 20:26Speaker 03

  I don't think they would.

• 20:27Speaker 00

  It's a dog eat dog world out there.

• 20:29Speaker 03

  I don't, wow, it's dead, the, the dad jokes.

• 20:31Speaker 00

  We can come after them, man.

• 20:33Speaker 03

  Yeah.

• 20:33Speaker 00

  Bring my cat Khalifa in there and say, what's up? What?

• 20:37Speaker 00

  That's not a job I would want. I would also not want to be the repo man or woman.

• 20:41Speaker 03

  Yeah.

• 20:42Speaker 00

  Please, if you get bored and you're doom scrolling, just look up on YouTube repossession videos. It is quite, they have it down to an art.

• 20:51Speaker 03

  It's an eye-opener.

• 20:53Speaker 00

  But it is an eye-opener, man. I, it's scary, scary stuff.

• 20:56Speaker 03

  So speaking of.

• 20:57Speaker 00

  Hats off to them.

• 20:57Speaker 03

  But speaking of truck drivers, here's one. I, I, there's a, a, a message that popped in and says, I saw on Facebook that the truck drivers are gonna protest the high diesel prices on October 1st and not drive. Is there any truth to this? It's scary. Uh, and is this gonna cause all of us to overstock like me, just in case?

• 21:16Speaker 00

  Now, I drive a diesel, Justin, does that mean I don't have to come to work? Am I part of this?

• 21:20Speaker 03

  If you, if you wanna be part of the boycott, uh, but you're not, you're not hauling anything. Uh, you just won't make any money that day.

• 21:26Speaker 00

  Yeah, yeah.

• 21:27Speaker 03

  Um, I have seen this, I don't know how prevalent or rampant this is, but let's, let's, again, do another analogy. I'm, I'm the trucking company again. I took that, that load for Steven across the country for $10,000. Well, now my fuel cost just doubled.

• 21:45Speaker 00

  Yeah.

• 21:46Speaker 03

  Right? So I used to be in the trucking industry, I used to be in the, the transportation industry. So those, those big 18-wheelers that you see out there, on a good day, they're getting seven and a half miles a gallon. Okay? Most of them. Some of them, you know, depending upon the driver and everything, you can get upwards of 10, but for the most part, they're getting about seven and a half miles a gallon. If I'm taking a load from Bakersfield to say Baltimore, it's 3,000 miles, I'm blowing through like 500, you know, 400 gallons of fuel, 450, 500 gallons of fuel. At $8 a gallon.

• 22:20Speaker 00

  Beefy.

• 22:22Speaker 03

  Yeah. We're talking four grand for me to take that one load across the country. And that's not including maintenance, that's not including tires, that's not including my wages for the driver, that's not including tolls, that's not including any of the other costs that go along with it. But the biggest cost that I have as a, as a transportation company is my fuel cost. Period, end of story. And your fuel cost just doubled in the past six months.

• 22:46Speaker 00

  Hmm.

• 22:47Speaker 03

  Right?

• 22:48Speaker 00

  We have one locally, so, so on a national level, the, uh, one of the Drivers Association, which represents 150,000 drivers, they told fact-checkers they knew no, nothing about it, but it appears.

• 23:01Speaker 03

  These independents.

• 23:01Speaker 00

  Fresno-based.

• 23:02Speaker 03

  Yeah.

• 23:03Speaker 00

  Uh, NIS, a Farmers League has proposed on October 1st, no movement of goods day.

• 23:08Speaker 03

  Mm-hmm.

• 23:09Speaker 00

  And we'll just have to see what happens, but man, yeah, they could.

• 23:11Speaker 03

  I'd be more worried, rather than the big, the, the, the big trucking associations and stuff like that, is the independents.

• 23:17Speaker 00

  Yeah.

• 23:17Speaker 03

  So there's, many of the drivers that you see out there, probably I would say 30 to 40% of the drivers that are out there are not company drivers, they're independents. They own their own truck, they're self-employed, uh, you know, they do their own thing, and those are the guys that are like, I can't do it.

• 23:32Speaker 00

  My wife's gonna be pissed.

• 23:33Speaker 03

  She's like, I can't.

• 23:34Speaker 00

  How is she gonna get Amazon?

• 23:36Speaker 03

  Well, yeah.

• 23:36Speaker 00

  That quickly? She might have to wait an extra day on.

• 23:39Speaker 03

  Maybe the drone will come fly over and drop it off, but.

• 23:42Speaker 00

  I'm waiting on that. I'm waiting on that.

• 23:44Speaker 03

  But yeah, I don't know if it necessarily for certain that it's gonna happen. I would say that it's, you know, there's, there's a lot of people that are really upset with $8 diesel, $9 diesel, depending upon what part of the country you're in. Uh, you know, diesel's supposed to be cheaper, it ain't.

• 23:58Speaker 00

  Yeah.

• 23:59Speaker 03

  Um, you know, so I feel for those truckers that are out there trying to, trying to make a living, man.

• 24:03Speaker 00

  That's what I'm saying, if they're national, and I mean, it's not like, like if they're striking at the hospital, they go home at night.

• 24:08Speaker 03

  Yeah.

• 24:08Speaker 00

  If you're on the road, man, you're halfway across the country and you're.

• 24:11Speaker 03

  Are you sleeping the sleeper for an extra day?

• 24:12Speaker 00

  Ah, I guess.

• 24:16Speaker 03

  Yeah, I mean.

• 24:16Speaker 00

  Clash, some of these, I'm telling you, some of these guys are playing like Clash of Clans or something when they're driving down the freeway. The last couple trips I've taken, I mean, they're coming over a foot or two into your lane, you gotta be on your.

• 24:26Speaker 03

  You gotta be on your game. Hey, when we come back, we got Dr. Richard Gearhart from Cal State Bakersfield to join us and talk about macroeconomics. We'll be right back after this.

• 24:53Speaker 03

  Welcome back.

• 24:57Speaker 03

  When Eric Clapton was once asked what it felt like to be the greatest guitar player ever, he said, I don't know, ask Prince.

• 25:06Speaker 03

  He literally said that.

• 25:07Speaker 00

  He's not lying.

• 25:08Speaker 03

  He's not lying. Prince was.

• 25:09Speaker 00

  Prince could rip?

• 25:10Speaker 01

  Yeah.

• 25:10Speaker 03

  Oh, man.

• 25:10Speaker 00

  God, yes.

• 25:12Speaker 03

  Yeah. I'm serious. Eric Clapton was asked one time, what does it feel like to be the greatest guitar player to ever live? And he says, I don't know, ask Prince.

• 25:20Speaker 00

  So he could rip the guitar, but he couldn't even draw a will, and he definitely didn't have a trust.

• 25:25Speaker 03

  Yes.

• 25:25Speaker 00

  Coming from a financial advisor, you know.

• 25:27Speaker 03

  The largest. He goes straight to the monetization.

• 25:29Speaker 00

  Well, yeah, the largest estate ever to, and maybe not ever, but to roll through probate.

• 25:35Speaker 01

  I think it was him and Michael Jackson.

• 25:36Speaker 03

  Michael Jackson, Aretha Franklin, um.

• 25:38Speaker 00

  They didn't have.

• 25:39Speaker 04

  Dolly's having issues with her.

• 25:40Speaker 03

  Dolly's having issues, yeah.

• 25:42Speaker 04

  Are you serious? Apparently there's cat fighting.

• 25:44Speaker 00

  Pair of issues.

• 25:45Speaker 03

  Oh, yeah.

• 25:45Speaker 01

  I saw it, it was a nephew getting banned from something, I was like, jeez.

• 25:50Speaker 03

  Well, the, the other one is like, uh, Gene Hackman.

• 25:54Speaker 00

  Mm-hmm.

• 25:55Speaker 03

  That was an $80 million estate that is now sitting in probate because he didn't, both of his successor trustees, he had the trust all set up right, everything was done right, but his successor trustees predeceased him because he was so ancient. Uh, and so there was no trustee to take over the trust when he died.

• 26:10Speaker 00

  Update those trusts, man, I'm telling you.

• 26:12Speaker 03

  Yeah, so, uh.

• 26:13Speaker 00

  Have your advisor review it if they know what they're doing.

• 26:15Speaker 03

  Yeah.

• 26:16Speaker 00

  We do.

• 26:16Speaker 03

  Yeah.

• 26:16Speaker 01

  661-8471.

• 26:22Speaker 03

  Shots fired. Uh, we are joined here by Dr. Richard Gearhart from, uh, Cal State Bakersfield, uh, Clemson fan, New York Giants fan. I apologize for what happened to you on Monday night.

• 26:35Speaker 04

  I mean, Pitt, talk about a game to go to. You're so excited, you drive down Crenshaw Boulevard, you're sitting there.

• 26:44Speaker 03

  A little daughter with you.

• 26:46Speaker 00

  You survive.

• 26:46Speaker 03

  First game, first game for her.

• 26:48Speaker 04

  It was her first game, and she's like, why, why is he on the ground holding his knee? I was like, well, there goes your dreams and hopes. She's like, well, my shirt, I can technically roof the Rams. I'm like, yeah, I'm not imposing my Giants belief on you.

• 27:00Speaker 03

  No, wow, man. That's bad news.

• 27:02Speaker 01

  Hey, it could always be worse. Be a Dolphins fan.

• 27:05Speaker 04

  Well, you know, it is her last game too, since she's a bad luck charm.

• 27:09Speaker 00

  Bad luck.

• 27:10Speaker 03

  Yeah, yeah, they lost when you were here. You're not going to another game, girl. You're not going.

• 27:14Speaker 00

  That's.

• 27:14Speaker 03

  So, uh, we were talking a little bit earlier about, you know, bond yields, the 10-year bond and the history that we've had recently, uh, actually, you know, the last 40-plus years. Um, and looking at bond yields of the 5% 10-year, you know, bond yield is fairly normal, right? If you go back to historically, it's actually kind of like right in line with normalcy.

• 27:38Speaker 03

  But it's got a really dark cloud hanging over it. Let's, let's talk about kind of what's going on with the interest rates. Where are we expecting to go? We were just talking about diesel. We have a diesel ban and this kind of thing. I mean, it's all of these things are just like, man, could we get a break?

• 27:54Speaker 04

  Now is poor policies just piling on poor policies and you know, since 2007, 2009, we largely pursued easy monetary policy, which drove down those interest rates.

• 28:08Speaker 03

  Free money.

• 28:09Speaker 04

  Yeah. And that was kind of the environment that people have gotten used to. And that's the environment my generation got used to. And it's kind of a sticker shock when you sit there and you look and you go, wait, this isn't what it's normally and.

• 28:24Speaker 03

  All of us Gen X folks and millennials are like, hey, wait a minute. What, what happened to our 3% interest rates?

• 28:30Speaker 04

  Yeah, it's.

• 28:31Speaker 03

  Isn't this normal?

• 28:32Speaker 04

  Just not fun. And it, you know, it creates this whole kind of cascade of issues when you have people who are now essentially locked into mortgages in what were likely considered starter homes.

• 28:44Speaker 03

  Right.

• 28:44Speaker 04

  People aren't giving up these mortgages and.

• 28:47Speaker 03

  Well, I mean, you know, you look at the average and the average home for sale in, in Kern County and Bakersfield in particular, it's slightly under 400,000, I believe, right? 385, 390, somewhere in there. Median house, house price. Those starter homes are not the 390 to 400. That's probably in your 250 to 300 range. And now it's seven, seven and a half percent for a first time home buyer. That mortgage is pretty expensive.

• 29:14Speaker 00

  Really hard.

• 29:15Speaker 04

  It is. My neighbors just moved and you know, their new mortgage, while they're waiting to sell their old house is close to five grand. And that's for, you know, a $550,000 mortgage. It's, and you know, they, they were sitting there at two and a half percent at like $2,000 a month and they were loving life and now it's.

• 29:37Speaker 03

  More than double.

• 29:38Speaker 04

  Yeah. And it really just, and it's part of the reason why we're seeing this increase is because we have solid economic data.

• 29:47Speaker 03

  Well, yeah. And that's, I mean, that's the other side of the coin. It's like, okay, so, well, let's, how much do you trust that data?

• 29:55Speaker 04

  I trust it quite a bit.

• 29:58Speaker 03

  Okay.

• 29:58Speaker 04

  Um, you know.

• 30:00Speaker 03

  Cause I hear other people are like, I don't even trust the data.

• 30:02Speaker 04

  Yeah. It's one of those things where, you know, I know the big bugaboo was when he tried or did fire McIntarfer, the bureau chief at the BLS, but she's come out and said that she trusts the data.

• 30:17Speaker 03

  Yeah, the data looks good.

• 30:18Speaker 04

  Fed trusts the data. And if they're fudging the data, they're fudging the data, all kinds are wrong. Cause

• 30:25Speaker 03

  Yeah.

• 30:26Speaker 04

  Job growth, even though unemployment is low, job growth is anemic.

• 30:29Speaker 03

  Yeah. Yeah.

• 30:30Speaker 04

  And wage growth isn't.

• 30:32Speaker 03

  Well, I mean, but they, weren't they just, they just revised, upwardly revised the jobs numbers over the last two months?

• 30:40Speaker 04

  Yes.

• 30:40Speaker 03

  Right? So, I mean, they were really anemic when you looked at them the first time around. You're like, oh, this is bad. And that's why the markets kind of, kind of re, like went up because it was like, oh, bad news in the economy means that the interest rates are going to go down. Get into the stocks now. Like that was the, that was the impetus. And now all of a sudden it's like, oh, we just, we just, you know, up, upped our numbers on those previous months. We just redid the numbers. And oh, by the way, we actually added an extra 100,000 jobs in the past two months. And now, now the labor market's looking good. We're still at about 4% unemployment. You know, the dual mandate that the Fed has is, you know, low interest rates or low inflation rates, right? Not low interest rates, but low inflation rates

• 31:19Speaker 03

  and high, high employment, you know, full employment, which we're basically at full employment. The one thing that they can't seem to get down is inflation. And so they're having to raise interest rates. And so this is kind of flies in the face of what the administration's wanting is like, hey, cut, cut interest rates.

• 31:34Speaker 04

  Oh, absolutely.

• 31:35Speaker 03

  Uh, we need interest rates to cut, but it's like, well, if you do that, now it's free money in the economy and inflation now goes higher.

• 31:40Speaker 04

  Yeah. And you know, inflation is really hard to tackle because it's not only just.

• 31:45Speaker 03

  It's sticky.

• 31:45Speaker 04

  Businesses, it's consumers expecting it. It's workers expecting it. And that all gets passed through the economy. And so, you know, you're have a generation growing up that are now expecting three, 4% inflation. And you're trying to get it back down to two and you're just fighting against all these headwinds.

• 32:07Speaker 03

  Yeah.

• 32:07Speaker 04

  We expected the oil shock to be temporary and seven, seven months in.

• 32:13Speaker 03

  That can be a long. Okay. I remember we were on the radio show, what, six months ago, when this whole thing first started and you had a breakdown of like, okay, if this is only, if the Straits of Hormuz are shut down for a month, this is the outcome. If it's shut down for three months, this is the outcome. You went out to nine months and it was like, worst case scenario, we're almost there.

• 32:34Speaker 04

  It's, it's really not good.

• 32:35Speaker 03

  And you even said, you even said in that meeting, you're like, uh, yeah, this isn't going to happen.

• 32:41Speaker 04

  I, I, you would have, you would have expected us, you know, after, how many times have we declared victory? 47 times?

• 32:50Speaker 03

  45 or 47 times. I can't remember.

• 32:53Speaker 04

  And, nice reference. And you just sit there and now the Houthis have taken over the Bab el Mendeb Strait and have just started hammering.

• 33:03Speaker 03

  Yeah.

• 33:05Speaker 04

  There's just, I, I don't see an escape scenario unless we just say, hey, whatever we said we're going to go, no more nuclear weapons. All right. We're giving that up. You know, policing the straight, we're giving that up. There's just no way to.

• 33:17Speaker 03

  I don't think there's even talks going on right now at this point. And, and so the, you know, all three of the main choke points, you know, the Straits of Hormuz, the, the other straight at the, the bottom of the Red Sea and the Suez Canal, like all of those choke points. Cause there's not that much oil that can go through Suez. Like it's, it's just not, and that with that east west pipeline across Saudi Arabia, that's been damaged and shut down.

• 33:42Speaker 04

  That was their escape route.

• 33:44Speaker 03

  That was the escape hatch.

• 33:45Speaker 04

  Yeah.

• 33:45Speaker 03

  Right? And that's been damaged and that's been shut down. And so now we're looking at diesel prices at eight and a half, $9 a gallon. And we're also now imposing the, the diesel, what was it? The diesel ban?

• 33:56Speaker 04

  The diesel ban, the 90 day diesel ban that basically, uh, the Wall Street Journal had an article about it the other day. How all the oil execs are like, you know, this isn't going to lower prices. This is actually going to increase prices because the, we don't have refineries to refine this stuff. It's just going to sit there. We have no way to really ship it to the areas that need the diesel.

• 34:19Speaker 03

  Right.

• 34:20Speaker 04

  And it's just, it's bad policy after bad policy.

• 34:23Speaker 03

  Okay. So I'm going to throw a real curve ball at you here though, for this, for the diesel ban. What about the price of corn? That's biodiesel, right? And you have these Iowa farmers that are like, obviously the price of their, their fertilizer and all these other things went up because of the price of oil and, and you know, all of that kind of stuff that goes along with it. But how much of this, if it's like diesel gets so high, we, as, as humans, we tend to find alternatives, right? Our brains are wired that way. It's like, okay, that's not a path that I can take. I'm not going to be able to use regular diesel at, at $12 a gallon. I'm going to go out of business. So as I'm, if I'm a farmer, I'm looking at this and saying,

• 35:04Speaker 03

  hey, I'm sitting on a gold mine right here. If I can turn this into biodiesel and Mike Price just went sky high.

• 35:10Speaker 04

  Yeah, you would think so, but you know.

• 35:11Speaker 03

  Is that happening?

• 35:13Speaker 04

  That, that is happening a little bit, but there's also pushes to reduce, um, to reduce the environmental quality of the diesel. Um, and so it's all of these things where we have alternatives, you know, wind, solar, you would think this would be a boom period. But it's just the policies by this administration just seem to be, no, we don't like these alternative sources and they've done everything to.

• 35:37Speaker 03

  To stop it.

• 35:38Speaker 04

  To limit it. And now when they should be flourishing, you're sitting there and you're going, well, who knows how they're going to, who knows what they're going to do next?

• 35:45Speaker 03

  Well, I think this diesel should just be turned into running those trucks on hemp oil. So we should just do that.

• 35:50Speaker 04

  I, I, lots of tiny hamsters. Lots of tiny hamsters. How many hamsters per?

• 35:56Speaker 03

  Per, per 80,000, 80,000 pound truck. Yeah. You need a lot of hamsters. I, you know, it's just, it's kind of baffling to me that like these kinds of, um, like you said, policies that have, that have come down. And this is not a political show. It's an economic show. It's, it's a finance show. But policies go into finance.

• 36:18Speaker 04

  Yeah.

• 36:18Speaker 03

  Right? And this is a direct result of bad, you know, thinking, oh, this is going to be done and over with in two or three weeks. And now all of a sudden we're in a situation where we're seven months later, eight months later, no end in sight and move, counter move, checkmate kind of moves.

• 36:39Speaker 04

  Yeah. And you know, the bad policies have kind of been a hallmark of our political system since COVID, you know?

• 36:46Speaker 03

  Right.

• 36:46Speaker 04

  Distributing the COVID stimulus checks, which led to 9% inflation.

• 36:51Speaker 03

  Exactly. We talked about that earlier. Yeah.

• 36:53Speaker 04

  Yeah. That was what? $1,200 an adult and now we're floating $5,000?

• 36:58Speaker 03

  Which will never happen.

• 36:59Speaker 04

  Yeah, it can't happen. I mean, you know.

• 37:01Speaker 03

  We're going to add another two trillion to the debt if we did that.

• 37:03Speaker 04

  I understand that, you know, percent has to kind of toe the line, but there's no way you can finance that. And I know tariffs are the, how are we going to finance it? Tariffs.

• 37:12Speaker 03

  Well, and so we had actually talked about this also earlier is that the 10 year bond yield, let's be honest, there's, there's two ways to, to invest. You can own or you can loan. The ownership is like, I'm buying Microsoft. I'm buying that stock and I'm going to participate in the value of that stock. The other side is the bond yields. Uh, you're loaning money to the federal government. You give them $10,000. They promise to give you that money back plus interest for whatever the, the timeline is, two years, five years, 10 years, whatever the number is. Right now, and when you look at interest rates, what that interest rates tells you as an investor is I'm taking on additional risk to lend money to the US government who's $40 trillion in debt.

• 37:56Speaker 03

  And I need to get a commensurate return on my investment to offer that, that, to buy that bond. Do you know who the top three owners of US bonds are?

• 38:14Speaker 03

  Not a trick question.

• 38:15Speaker 04

  Uh.

• 38:16Speaker 03

  Yeah, I'm throwing a total curveball right here.

• 38:18Speaker 04

  Probably Japan.

• 38:21Speaker 04

  Someone in the Middle East, probably. Maybe Saudi Arabia and Calpers?

• 38:26Speaker 03

  No. No. Zero for three. Zero for three. Uh, number one is China.

• 38:34Speaker 04

  Okay.

• 38:35Speaker 03

  Okay. European Union.

• 38:37Speaker 04

  Okay.

• 38:37Speaker 03

  Canada.

• 38:39Speaker 04

  Oh, all the people that we're pissing off, which is fantastic.

• 38:43Speaker 03

  Bingo. Right? So those are the three main holders of US bonds. It's not, you know, Warren Buffett and, you know, the, your 401K or whatever. Although those are big holders of, of US debt as well. But the biggest holders of US debt, China, European Union, Canada, in that, in that order. At least that's the last I checked.

• 39:02Speaker 00

  UK and China, not to, not to challenge you there, because that's why I answered Japan and China earlier, because I knew there were two of the two.

• 39:08Speaker 03

  Well, UK is up there, but it must've changed recently, because I do know that Canada has offloaded. But this is when I looked. Canada offloaded a lot of their debt, which, when interest rates were relatively low, that's what maybe spiked us back April of last year. They spiked, that actually spiked those, those interest rates. Same thing with the European Union, right? They, they were like, well, we don't, we don't need the US anymore.

• 39:29Speaker 04

  No, there was weak demand for treasuries today, which is part of the reason why it spiked to 5.13%.

• 39:36Speaker 03

  Yeah, yeah.

• 39:37Speaker 04

  High point today.

• 39:38Speaker 03

  Oh, man. And then the, the two years, the two years sitting at what, just under 5%? It's like 4.85, 4.9?

• 39:44Speaker 04

  Yeah. And, you know, you have to worry about yield inversion. And there's just, there's a lot of.

• 39:50Speaker 00

  You guys are like, like sports guys who are just going off on sports stats and like, this is, this is fun to listen to.

• 39:56Speaker 04

  I've already nerded out in class today.

• 39:58Speaker 03

  We could geek out on this for two hours.

• 39:59Speaker 00

  I get it. I get it. There's certain things, man.

• 40:01Speaker 04

  My wife sits there and she just stares at me. She's like, you want some guacamole? I'm like, no, let's talk about bond yields.

• 40:06Speaker 00

  How did you, just big picture, how did you get such, so passionate? Justin's very passionate and very knowledgeable in this area. What, what was your, uh, I mean, how do you go from?

• 40:17Speaker 04

  For some reason, I just like talking about it.

• 40:20Speaker 03

  Yeah.

• 40:20Speaker 04

  And like, I.

• 40:21Speaker 00

  Did it start in high school? I remember having to take government econ in high school.

• 40:24Speaker 04

  No, I started in college. Like, I would just take these econ courses and afterwards, we'd all sit together, all the football players, and we'd study. And they'd be like, yo, go explain this on the board. And I'd just go explain it. And it just.

• 40:37Speaker 03

  You were a professor before you were a professor.

• 40:38Speaker 04

  And I started loving it. You know, teaching football players, you know, there's a lot of CTE, you know? They're not the brightest people on the face of this planet.

• 40:47Speaker 00

  Come on, you can't say that.

• 40:48Speaker 04

  There's a video of Cam Scataboo at Arizona State just head butting a wall to make his helmet tighter.

• 40:54Speaker 00

  Yeah.

• 40:55Speaker 04

  Dead serious.

• 40:56Speaker 00

  It shows, he is, he is crazy, man.

• 40:58Speaker 04

  He is crazy. I mean, it's gonna be the best four-year career in the NFL, but it's, it's just learning how to explain these things. I just.

• 41:07Speaker 03

  Breaking down these really complex topics into something that is easily digestible.

• 41:11Speaker 04

  Yeah. And it pervades, the economics pervades everything. And I know people don't like that, but it's just, every facet of our lives is governed in some part.

• 41:21Speaker 00

  You got a YouTube channel or something, man? You need to put the energy out there.

• 41:24Speaker 04

  I'm like, I'm a technological boomer. Like, I can barely turn on my computer in the morning.

• 41:29Speaker 03

  You're trying to get him to do a selfie? That's just not gonna happen.

• 41:32Speaker 04

  Oh, oh, I was trying to take a selfie at the Rams game. And the poor lady next to us is like, would you just like me to take your picture? I was like, please. And then I had to, I was like, this is what you pressed to take a picture? She goes, I know.

• 41:44Speaker 03

  I know. I'm, yeah. I'm, I'm not 50.

• 41:47Speaker 04

  I'm not simple.

• 41:49Speaker 03

  I'm not Cam Scataboo.

• 41:51Speaker 00

  Scataboo. Oh, my goodness.

• 41:53Speaker 03

  And I, I like the fact that you did wear the, the uniform. I, I was joking about it earlier, coming in with a polo shirt with the shorts and the flip flops.

• 42:00Speaker 00

  What am I looking at there?

• 42:01Speaker 03

  He's wearing the shorts and he is wearing like, deck, deck shoes.

• 42:04Speaker 04

  Deck shoes, but they are shoes.

• 42:06Speaker 03

  They are shoes.

• 42:07Speaker 00

  What are those called? Hey dude? Those are hey dudes.

• 42:09Speaker 04

  Hey dudes, they're incredibly comfortable and they give you, they give you the appearance of looking mildly professional, rather than showing up in my 15-year-old flip flops.

• 42:20Speaker 03

  Which I, I'm not gonna doubt the, the flip flops. And you're not wearing, I was kind of expecting you to wear Clemson.

• 42:26Speaker 04

  So, um, I had to kind of tone that down, because if you go to the CSUB website, you know how they're giving the jerseys out to different locations? Well, one day I was randomly having lunch at the new Salty's, and all of a sudden, everyone from CSUB shows up. They're like, we can have you in the picture. And here I am in my Clemson shirt, everyone else is CSUB. I'm like, oh.

• 42:45Speaker 00

  Tone it down. Tone it down. You got reprimanded.

• 42:48Speaker 04

  I was just sitting there, I was like, the one day.

• 42:51Speaker 03

  Yeah. The one day that everybody shows up and I'm like, you should've just sat in the back. Just be like, who's getting far?

• 42:57Speaker 04

  You sure you want me in here?

• 42:59Speaker 03

  I'm wearing the, I'm wearing the competitor.

• 43:01Speaker 00

  How, how was the new restaurant? I haven't been by.

• 43:04Speaker 04

  It was good. I, I enjoy, I thoroughly enjoy Salty's. I think they have some of the best barbecue in town. Um.

• 43:09Speaker 00

  Is it more of a sit-down now, or?

• 43:10Speaker 04

  Yeah, it's more of a sit-down. There's a lot of, um, there's a lot of outdoor space, so there's a lot of tables outdoors and.

• 43:17Speaker 00

  I would get Salty whenever you're waiting at Salty's, the old location.

• 43:20Speaker 03

  On Rosedale, yeah.

• 43:21Speaker 00

  Here come the, the Uber Eats, you know, thinking they can cut in. No, they can't. You gotta lay the law down. You can't be passive aggressive there.

• 43:29Speaker 03

  They're pre-made, yeah.

• 43:30Speaker 04

  They have a different, like, system now to where it doesn't impede on, you know.

• 43:35Speaker 03

  Everybody else, yeah.

• 43:36Speaker 00

  That goes for all the listeners. Don't, don't let those, don't let those Uber Eats and DoorDashers intimidate you. Don't let it happen.

• 43:43Speaker 03

  Back them down.

• 43:43Speaker 04

  No, you get, there's no zipper effect. You go to the back of the line, you wait like the rest of us.

• 43:48Speaker 00

  Yeah, I was talking, Jeff Salters was in here last week talking about that, as he will also be our new neighbor with the Portrait of a Warrior Gallery.

• 43:56Speaker 03

  That's right.

• 43:57Speaker 00

  And he was also doing deliveries while he was doing the interview. He's like, uh, well, I got about 10 more minutes, guys. I gotta drop off.

• 44:04Speaker 03

  I gotta drop, I gotta drop off a catering deal.

• 44:07Speaker 00

  Oh, man. That trend tip sounds pretty good.

• 44:10Speaker 03

  Uh, but he's probably feeling it too with his diesel prices.

• 44:13Speaker 04

  Oh, it, it's, I, I mean, everyone you look at, it's just, but it amazes me.

• 44:20Speaker 03

  Seth came in this morning, asked me for a raise, because he's driving that diesel. I told him he should probably just get a hybrid.

• 44:25Speaker 00

  It's brutal. It's a two-credit card situation, man.

• 44:27Speaker 01

  Get a van.

• 44:29Speaker 03

  It cuts, well, it doesn't, I mean, every gas station you go to, it cuts off at 150, right?

• 44:33Speaker 00

  Yep. You gotta pull out the next car.

• 44:35Speaker 01

  Does it really? Oh, yeah. Yeah.

• 44:38Speaker 00

  So I think one of them goes to 175. I'm not sure which one, but it's.

• 44:41Speaker 03

  Well, the better hint is to just, you know, fill up when you're at half a tank and not wait till you're hit, the light turns on.

• 44:46Speaker 00

  What fun is that?

• 44:46Speaker 04

  Yeah. Have you met my wife? Because it's just like, five minutes before she leaves, did you fill up my tank?

• 44:53Speaker 00

  And I will tell you from experience.

• 44:54Speaker 03

  You were at three quarters. What are you talking about?

• 44:56Speaker 00

  Chris Drew, if you're listening. So we took his diesel to go get my wife's car last year, and he was playing with fire, man. Oh, yeah, we'll be good. We'll get to this next gas station. And no, we ran out, ran it, when you run out of fuel with a diesel, it's a different, different situation.

• 45:10Speaker 03

  Yeah.

• 45:10Speaker 00

  You gotta purge some, do some different stuff. And, but anyway.

• 45:14Speaker 03

  Not good. Not good. I mean, where, where do you see this happen, you know, kind of, uh, rolling, say, over the next, say, 90, 120 days?

• 45:22Speaker 04

  I, I mean, I think it really depends on the midterms and what happens with the midterms.

• 45:26Speaker 03

  You think the midterms are actually gonna affect gas prices in any way, in meaningful way?

• 45:30Speaker 04

  I, I think the midterms will, if the Democrats went, I think there's gonna be a lot more, uh, congressional.

• 45:39Speaker 03

  Oversight and push.

• 45:40Speaker 04

  Oversight on kind of ending this, or at least setting up a game plan for how we get out. Because that's why I think gas prices.

• 45:49Speaker 03

  But that still doesn't happen until January. If, if that happens, election days in November, it's like January's, you know, you still got another month and a half, two months before.

• 45:56Speaker 04

  It's, it's just, I, I, this is almost kind of unprecedented, unless you go back to the oil embargo of the 1970s. And luckily, we've never gotten there.

• 46:07Speaker 03

  Do we have that? Is that something that we might look at? It's like, oh, evens and odds.

• 46:12Speaker 04

  I don't think so, just because of how improved energy efficiency is. And that's been, what, one of the things that economists have been talking about is, economists are terrified of oil shocks, because oil's in everything. And Kern County understands that.

• 46:25Speaker 03

  Oh, yeah. Yeah.

• 46:26Speaker 04

  But, you know, we haven't seen the $150 oil, because we've been releasing from the Strategic Petroleum Reserve, which we need to fill back up.

• 46:37Speaker 03

  That eventually runs out. It's one, you know, like the old Mark, Mark Attacher, you know, hey, socialism's great till you run out of everybody else's money.

• 46:43Speaker 00

  That's the thing that always scares me.

• 46:44Speaker 03

  You run out of everybody else's oil, like, there's no oil.

• 46:47Speaker 00

  Because we, we're sitting on a mountain of oil in this country.

• 46:51Speaker 04

  Yeah.

• 46:51Speaker 00

  And mountain of oil, we're shooting ourselves in the foot. I think a lot of local listeners would agree with that. And, well, what if the, the international said, hey, you know what? She's not gonna get your oil. I mean, that's very scary. Very scary.

• 47:04Speaker 04

  Yeah.

• 47:05Speaker 00

  Become a sitting duck.

• 47:06Speaker 04

  I, most of the West Coast oil comes from South Korea, China, and Asia via the Middle East. And we are essentially an energy island, and there is a good chance that they dramatically halt exports if we halt exports.

• 47:21Speaker 03

  Well, and then the other thing is, we're dealing with the whole thing in Venezuela, which I don't think that's going very well either. And I don't know that that's necessarily gonna lower those prices either.

• 47:29Speaker 04

  That's a 10 to 15-year play, just because of the state of what Venezuelan oil is. And who knows what's gonna happen in the next 10 years if the next leader of Venezuela, because the one who's in America is planning on going back to Venezuela to challenge Delcy Rodriguez.

• 47:45Speaker 03

  Yeah, that's not gonna happen.

• 47:46Speaker 04

  It's not gonna happen. You know, they've kept the state apparatus there. But, you know, Venezuela isn't this stable country that you want to invest in. And especially long-term investments. It's just one of those things where I think we're, we're trying to look at history and say, well, this is what we think is gonna happen. But it's just.

• 48:06Speaker 03

  There's no way to tell.

• 48:07Speaker 04

  There's no way to tell.

• 48:09Speaker 00

  It's uncharted territory. Same with AI and the revolution and everything going on, man. It's an exciting time.

• 48:14Speaker 04

  Because, you know, a, a lot of what happens depends on how much pain Iranians are willing to accept. And seven months ago, when they were having the populist discontent and they were shooting 50,000 people in the streets, I was like, ooh, Iran's teetering. And now it's like, oh, now they actually, yeah, yeah. Now they're actually like, everyone's chanting death to America again. It's like, oh, that didn't work.

• 48:37Speaker 03

  We kind of, hmm, kind of blew that one.

• 48:39Speaker 04

  Well, then we promised them the weapons and then it's like, oops, never mind.

• 48:42Speaker 03

  Yeah. I mean, it's, you know, anything that's happening right now, especially, I mean, with these costs, it's just, you know, um, when you're talking about diesel prices, you're talking about, uh, beef prices, you're talking about, um, just groceries in general, just, just cost of overall, just goods of trying to keep a household running. It's almost getting to the point where it's literally unbearable.

• 49:08Speaker 04

  Food and energy add at least one percentage point to inflation. And if those go nuts, then inflation.

• 49:15Speaker 03

  Which is what they're basically doing. I mean, what is it for a ground beef? Like, eight bucks a, a, a, a pound?

• 49:19Speaker 04

  And they don't do the 1.3 pounds anymore. It's all 1.0 or 1.01.

• 49:24Speaker 03

  Right, absolutely. Yeah, it's, it's, it's just a tough time, honestly. Um, in, for anybody that's out there that's, you know, trying to keep a household running, it's just, man, it's, it's, your, your, your dollars are not going as far. It's just simply as that. Uh, Dr. Richard Gearhart, thank you so much for joining us. Seth, awesome job today. Don't, don't care what everybody else says about you. You're all right. Be smart, be safe, be money wise. We will see you tomorrow.