This is a rush transcript of the Trish Regan Show podcast. Follow along with the video or audio below.
I’ve been warning that we’re in an economic mess, and I hate to say I was proven right on Friday. I mean, that is exactly what that jobs report showed. And here we are, happy Labor Day, everyone. And apparently, you know, we’re really enjoying the whole labor movement because nobody seems to be wanting to go to work. In fact, we have 10 million job openings and yet eight and a half million unemployed Americans. I mean, how does that all work? Hello, welcome to the show. I am Trish Regan. Good to have you here. Just a reminder, make sure you go to Trish Intel dot com and you subscribe to my newsletter. It’s really important to me that you do that and also that you are downloading the full audio version of this podcast on Apple’s iTunes, on Spotify, wherever you get your podcast.
But we need to talk about this jobs report. We need to talk about what it means for our economy and what it means for your savings and what it means for the stock market. I have a lot of thoughts on this:
First of all, just to go through the numbers, not good, right? Two hundred and thirty five thousand jobs were added. Economists, not me, but some economists were anticipated or did anticipate a range of seven hundred and twenty thousand jobs. I mean, so they were way off now, by the way, they’re usually way off. That’s something that’s actually quite interesting about the jobs added, not on the rate. They usually get the rate. OK, and by the way, the rate came down a little bit, but that’s because nobody actually wants to go to work. You know, you look at the labor participation rate and that’s where you really have a problem. We’ve got roughly three and a half million people right now that are considered long term unemployed. In other words, they don’t want to go back. But, why would you go back right when Uncle Joe is paying so well to stay home and sit on the couch? I mean, I’m sorry, but you know what? People people are logical. And their approach to this right now is such that, you know what? If there are better ways to spend their time, then, you know, they’re going to take those opportunities.
And so when I when I talk about the need for government support and by the way, I’m not discounting that at all. You know, we went through H-E double L with this pandemic and people were really caught off guard. And that’s why it is important for government to be there in times of need. But how long does this go on?
I have a feeling it’s going to go on even longer. I have a feeling you are going to see a very big stimulus plan courtesy of the Democrats and by the way, courtesy the Republicans. Do I mean, they all want to spend money. And now you got kind of the perfect excuse, right, with this lousy jobs report. In other words, if we don’t have enough people working, the economy does slow.
So what does this mean for the likes of Jerome Powell on the Federal Reserve and the stock market? It means they’re probably not going to taper as much as we originally thought. Right. They’re out there buying bonds in order to effectively suppress interest rates. Right. Keep them really, really low. Thank goodness. Because, you know, we can’t afford if we were paying, my gosh, imagine if we were paying like seven percent on the twenty eight trillion we have outstanding, which just keeps going up, up, up and away, is about to increase by another three and a half trillion at least, plus the other trillion. I mean, we can’t afford the interest payments!
So, I guess it’s pretty good that the Fed has come up with this very creative policy – albeit I don’t I don’t like artificial things in the marketplace. They run the risk of creating other problems down the road. But nonetheless, the Federal Reserve is there, you know, one point three on the 10-year. And so we’re able to borrow all this money. We’re going to continue borrowing all this money. And I suspect the Federal Reserve will still be there helping to prop up the market by being one of the buyers of those bonds.
They said they wanted to get out. That was a big shindig, which wasn’t a big shindig actually this year because they had to do it via Zoom, the Jackson Hole conference that they have every year. Powell said that he wanted to, you know, effectively start tapering before the end of the year. But how is he going to taper now when his biggest concern is employment? And you’ve got a jobs report that instead of showing, upwards of 700000 jobs being added, it’s adding two hundred and thirty five thousand.
And–now–we’re going into the thick of it. Right. As things get worse, as we go into a more challenging time with flu season, etc. The Fed will not move as quickly as people anticipated. So you need to think about that because what does that mean? It means more inflation.
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It was a bad jobs report. There’s no other way to sugarcoat it. Now it is being spun. And in the way that it’s being spun, I do suspect you can anticipate more stimulus, possibly a fourth stimulus check coming to many Americans mailboxes soon. So we saw the labor secretary on Friday say, look, you know what? This is is very much related to the Delta variant.
And I understand that if you look at the numbers, you actually see increasingly a lot of people saying that they couldn’t go to work because of the Delta variant and that for sure did have an effect. Meanwhile, you’ve got a situation where Scott Gottlieb on the board of Pfizer is warning that it could get worse after Labor Day. So what does that tell us about the economy? We could hit some stumbling blocks. I mentioned that because you need to have all the information you can.
And I think that you will see opportunist political opportunists right now use this to actually put through more in the way of social spending, which is just going to prolong the inevitable. I mean, this is what you call kicking the can down the road. We just keep kicking it and kicking it and kicking it. And we can’t do anything about it because we owe so much darn money. If we were actually to confront economic reality, we really wouldn’t be able to pay our bills.
It’s like a family with too much credit card debt. And if they don’t kind of keep it all together and keep their credit in shape and keep those rates low if they miss a payment. Right. And then all of a sudden those credit card interest rates go through the roof, then they’re struggling just to service the debt, just to pay the interest on the debt and we run that risk. So I think the Federal Reserve will probably think twice about tapering. Maybe they’ll do a little bit just to give some people some lip service. And and then we’ll see on interest rates. I mean, there’s I don’t think there’s any chance that they’re going to move on interest rates very soon.
So what do you need to know?
You need to know how to hedge this as an investor because inflation, it’s here and there’s going to be more of it. I have warned for over a year now that all of this stimulus would lead to mass inflation. And sure enough, that is exactly what we have two months in a row now, five point four percent of an increase in consumer prices. So what does this mean for you? People say, oh, you know, inflation. OK, well, you know, what’s the big deal? I mean, if if everything just sort of goes up in lockstep, here’s the thing. It doesn’t, right. Wages have not been going up five point four percent. They’ve gone up like one percent. Right. So if if prices are going up that much, but wages are not, you see what happens. We start to get into that squeeze on the middle class again. And that’s what’s happening. So if you’re an investor, if you’re a saver, you need to consider. Right. How you’re going to actually position your portfolio. I mean, I keep saying to everybody, in some ways you want to be in equities, you want to be in stocks right now because they will benefit from inflation at some point down the road. We do run the risk of a bigger problem. Right.
Every single bubble we have seen, in my opinion, has been somewhat. Fed induced meaning, you know, they leave rates too low for too long and it causes problems, or by the way, they hike too fast and it causes problems. And so there’s not the normal sort of Push-Pull, Ying-yang in the marketplace right now. It is game on. And so I anticipate that equities will continue to rise in this environment simultaneously. Prices will continue to rise. You want to make sure that your dollars that you’re saving today will be worth enough in in 10 or 15 or 20 years. Now, the only real way to do that is to keep up with inflation.
So being in the stock market, that’s certainly one way to do it.
Being in real estate is another way to do it, another way to do it.
And you’ve heard me say this a lot, and it’s because I believe it. I mean, I look at gold prices over the last 20 years.
I just think that this is one of the things a sound investor wants and needs in their portfolio.
Meanwhile, I want to get to the news out of Afghanistan. We saw what Representative Michael McCaul had to say from Texas about Americans being held hostage. And yet this is nowhere in the mainstream media today. Surprise, surprise, surprise. Right?
But back to just for a moment, how you need to think about the jobs report. I think that you can you can, unfortunately, be assured of one thing, and that’s that we are going through an increasingly stressful time.
So what will government do in anticipation and in response to that stressful time? They will print more money.
Well, if they print more money, that actually causes the value of your dollars to increasingly go down. You can chart it out. This is this is what happens. And, you know, there’s going to be more printing. So just plan accordingly for that.
We’ll see how the market does this week, of course, the market being closed for the Labor Day holiday today.
But back to my concerns about the court packing right now are pretty real, because when you think about what’s been happening in Texas and and the fury, the response to that, we now are in a situation where people are going to be that much more wanting the left, that is the Democrats that much more wanting and feeling like they have cover to add to the court to pack the court. And this is just something that, you know, is fundamentally wrong. And by the way, both sides have said this over the years, that it’s fundamentally wrong. And yet now the president has put a commission in to study the issue of the courts. And they very much the Democrats very much would like to see more of their, quote, people on the court. It’s sad that it’s becoming so politicized. The court really shouldn’t be. And Roberts surprised a lot of conservatives by, you know, by his vote on this one. But I think increasingly you’re going to see this movement. We are seeing this movement and it’s happened in other places. It’s happened in other countries, none of it’s ended well, by the way, I mean, just take a look at Venezuela. (commercial.)
But let me ljust remind you again what we’re up against. Because this is I want to get to this story about the Taliban holding Americans reportedly there in Afghanistan, because it’s this is not being covered by the mainstream media. The mainstream media has their narrative. And, you know, I looked and looked and looked. This was actually a segment on Chris Wallace is Sunday Fox show and the Representative McCaul from Texas was on.
And I’m going to quote him here. He said, We had six airplanes at the Mazar e Sharif airport, six airplanes with American citizens on them. As I speak. This is as of yesterday on Sunday also with these interpreters. And the Taliban is holding them hostage for demands right now. McCaul said that zero Americans have been able to leave the country since U.S. military forces left on August 30th. So, I mean, look, we’re we’re on the losing end of this. Twenty years later, we are losing in every way. I mean, yeah, OK. Joe Biden, you got you guys out, right? You got the military out, which was your goal. But at what expense? How is it ever OK to leave any American behind? And we’re told there’s hundreds of Americans. There are different estimates, by the way, from different people. But the White House has actually said probably about one hundred. Look, I’m sorry you don’t leave one. Right?
And now they’re trying to get out and they can’t get out because the Taliban wants that nine billion dollars that our Treasury secretary, Janet Yellen, has the power to give them should she so decide that was money that had been allocated for Afghanistan that they now want their hands on.
So think about this just just for a second. I mean, think about as a taxpayer, right? As a taxpayer, we’ve given eighty five billion dollars worth of military equipment. Let’s not even talk about, the humanitarian loss….which is so awful, right? It’s utterly awful. And I get upset every every time I think about it. Usually those of you who listen to the podcast and those of you who watch this, you know that I’ve said before, I I tend to be pretty stoic about these things. I’ve been in the news business a long time. I’ve seen a lot of horrific stuff and horrible stuff. And yet this this really has gotten to me. In a in a pretty massive way, because, you know, look, I remember 9/11 so well, I remember 20 years ago, you know, what we all went through as a country. And I actually had just moved from an area where I lived in a building right across the street from that. I had just moved a few months earlier and was live on the air and in California on television doing local news there in San Francisco. When I got the report that we had to go to the local station in New York because of this, we didn’t know what it was. Right. This plane crashing into a building. But look, it hits home, I think, for so many of us. And this is why in part, it’s tough when we see the president saying over and over again that, you know, he knows what it’s like to lose a child. And, you know, I’m not going to take anything away from him on that. It was clearly awful what happened to his son. But it’s very different, right? It’s very, very different than losing your child sort of at the beginning of their adult life because they’re trying to save our country. And and you lost them because of bad, bad planning. I mean, this was just bad all around. And I know that the the mainstream media wants to focus on other things right now, but I’m sorry, there are no excuses on this one.
And you look at now, we may be in another hostage situation, Representative McCaul saying that we have Americans being held hostage, that the Taliban wants all this money. Look, this is this is Jimmy Carter, right, all over again. This is the 1970s all over again. So look, buckle up, everyone. It’s going to be it’s going to be a tough it’s going to be a tough year. Right. That’s I think that’s just the reality of it.
From the economic standpoint, from the foreign policy standpoint, we are in for a very, very rough road because you know what? Elections have consequences. Policies have consequences. And you need you need smart people in Washington, D.C. and I’m not convinced we have any right now. Thank you so much for listening. Just a quick reminder, do go and subscribe to my newsletter, Trish Intel Dotcom. That’s the newsletter. TrishIntel.com. That’s the email that you get every day with all the stories we are covering. Happy Labor Day, everyone. I wish I had a better jobs report to tell you about, but you know what? It is what it is, we will move forward. Thanks again for listening. See you tomorrow.