00:00You are listening to the first episode of Street Smarts.
00:03This is the podcast from the street.
00:05This is the soon-to-be biggest business podcast in the world.
00:08I will lay down that gauntlet right now.
00:11Todd Campbell, Editor-in-Chief of the Street, my partner here.
00:14You wanted to talk about inflation, the GDP numbers, Trump is going to fire Powell.
00:21There is so much going on.
00:23Remember, this is a short-form podcast as we head into this segment.
00:27I know, and I get talking, I could go on forever.
00:30I feel like, Maury, maybe I'm a little naturally caffeinated.
00:33I don't need to have too much added.
00:37But I think that there's all of this confusion and just like, yeah, everybody's like, oh, what's going to happen?
00:43And you look at what happened from the high in February when all these tariffs started getting announced.
00:49And the stock market was making all-time highs and then fell 19% through early April when President Trump announced the reciprocal tariffs and all that stuff on April 2nd.
01:00Liberation Day.
01:01Hey, freedom.
01:01Freedom to lose money for a couple days.
01:03Until he paused them on April 9th and off to the races.
01:07And I think that just really surprised everybody because the reality is that a lot of the same reasons that the stock market declined, they still remain.
01:18You know, I mean, you know, GDP is only expected to grow 1.4% this year, down from 2.8% last year.
01:25We just got the latest CPI inflation data, and it shows inflation rose year over year from May into June.
01:36Not a lot, but it's still in the high 2% range.
01:40And, you know, kind of like Maury was saying before, I mean, inflation is kind of like this insidious beast, right?
01:45You know, people forget, oh, it's only 3% year over year.
01:48Yeah, but it's cumulative.
01:49So that 3% is coming on top of 5%, which is coming on top of 2002, 8%.
01:55So let me jump in here, Todd.
01:57First of all, you can find my album, Reciprocal Tariffs, at Tower Records, on MySpace.
02:04Every place albums are no longer sold.
02:06But before we do that, so let's talk about inflation.
02:09Because here's how I view inflation.
02:11I know it's high, and I know certain people have to buy certain products.
02:15But I'm not sure how you shop.
02:17But when I go into the grocery store, and I'm going to name the grocery store I shop at, because it will tell you sort of where I am.
02:22I go to Fresh Market most days.
02:24And when I walk into Fresh Market, I look at what's on sale.
02:27And if I don't hate that, that's probably what I buy.
02:31So if I'm going to buy, you know, a rack of ribs and it's $3.99 a pound, it doesn't matter to me that salmon's up 50%.
02:39Yeah, but, Dan, I have to interrupt you here, because that is spoken like someone with a 21-year-old.
02:45And maybe by then, they've gotten over their picky eater habits.
02:49But I'm going to tell you that if I try to pull that tactic, and I say to my kids, all right, today we're walking into ShopRite or Costco, and we're buying the food that's on sale, they're going to look at me and say, great, Mom.
03:01Then we will be dining on popcorn this week.
03:04So, you know.
03:05I understand the challenges.
03:07I understand when egg prices were high and milk prices were high that people can't make substitutions.
03:13But also, you just mentioned Costco.
03:15And, Todd, isn't one of the, like, inflation busters, can't you just go to Costco?
03:19Like, they barely mark things up.
03:22And, again, I don't want to downplay the person living paycheck to paycheck.
03:25I totally understand something's a little bit more money you're going to notice, but aren't there things you could do that are, like, self-mitigating?
03:33Yeah, but, I mean, like, if you're struggling trying to figure out how am I making rent, how am I making this, how am I paying this, you're not going to Costco and buying the supersized stuff and sticking it in the closet.
03:44You just can't walk out.
03:46You can't afford a $200 grocery bill, right?
03:48You're literally going down and saying, where's my ramen pride?
03:51Where's my Kraft mac and cheese?
03:53You know, it looks like, you know, the old, you know, I'm in my early 20s diet.
03:57But, so I think that, yeah, I mean, that's true.
04:01I mean, there's another side of the world.
04:02I mean, Maury, you're the Costco expert.
04:03But this whole other side of thinking that Costco, you don't really end up saving money because you end up spending more than you would normally because you're buying all, you know, 13 pallets worth of toilet paper.
04:14I mean, I do think you end up saving money over time.
04:16But the point is, you know, stores like Costco are actually very unfriendly to people living paycheck to paycheck because to get that savings, you have to have money to lay out for a larger quantity of product.
04:32And, you know, I mean, we all know that, sure, you can put it on a credit card, but then what you're going to pay in interest, you lose in the savings.
04:37So I think it really all goes back to the fact that people of a certain income level are just not going to have an easy time in this economy.
04:46No, it's really hard.
04:47And, I mean, wages are growing faster than inflation.
04:50Yay.
04:51That's good, right?
04:52I mean, that's actually good for the stock market, too, right?
04:54Whenever incomes rise faster than inflation, it gives you discretionary income.
04:59So mortgage rates and housing prices offset that.
05:02I mean, things are great now if you don't need to buy a house or a car.
05:05Or, like, there's, like, a lot of things have come back to earth, but if you're locked into a 7% mortgage.
05:11Now, Todd, I'm locked into the house I'm in because my mortgage was, like, three and a quarter, right before they stayed.
05:17We bought a house because we could see the writing on the wall.
05:20And, Maury, I've fallen for that Costco thing.
05:23Like, I may or may not own an eight-foot teddy bear and a kayak and a winter coat that I don't need here in Florida.
05:29I mean, no one's judging you, yeah.
05:30You know, or there may have been a time where Amazon sold me four pounds of toffee that I bought at, like, three in the morning because it was a good price.
05:38In my head, I think the toffee arrived much sooner than it did because I was hungry right then.
05:43But we're going to move on to one other topic that relates very much.
