Welcome back everybody.
For today's deep dive, you sent over some fascinating articles
about the US government budget showdown
and also some market analysis.
So should be an interesting one.
Definitely a lot to unpack there.
Yeah, so if you're trying to figure out
what exactly went down in Washington,
how the markets are reacting to it all,
this is the place to be.
Absolutely, and it's pretty remarkable.
We almost had another government shutdown.
You know, Congress really waited
until the last possible second.
Yeah, they really did.
They passed that budget bill just in time,
though I did think it was kind of weird
that technically we're still gonna have a shutdown
for a few hours.
Yeah, a few hours during off hours.
So should be pretty minimal impact.
But yeah, this whole thing was a really close call
and it really kind of highlights the,
I guess the deep partisan divide in Congress.
Yeah, for sure.
This budget bill is basically just a temporary fix.
It keeps the funding at the current levels
only until March 14th of next year.
So they're just kicking the can down the road
a little bit longer.
Yeah.
Delaying the inevitable.
Yeah.
So who are the real winners and losers
in this budget deal?
I mean, on the surface it looks like
both the Democrats and Republicans
got some of what they wanted.
Yeah, there was a little something for everyone,
it seems like.
The Democrats got $100 billion in disaster aid,
which was really important to them.
Right.
Republicans, on the other hand,
they got 10 billion in farm aid.
Something they've been pushing for.
Okay.
But you know, it's interesting
is what didn't make it into the final bill.
Oh, that's a good point.
What kind of things were left out?
Well, for one, the debt ceiling wasn't suspended,
which was a major demand from former President Trump,
and the bill also went through a huge reduction.
It went from 1,500 pages all the way down to 500 pages.
That's a lot of pork that got cut.
Yeah, wow, that is quite the reduction.
Yeah.
Any specific cuts that stood out to you?
Yeah, actually a few.
One was that they tried to ease E15 gasoline sales
and that ended up failing,
which is bad news for Iowa corn farmers
and of course for Senator Joni Ernst,
who'd been advocating for it.
Right.
Then there were those proposed regulations
on pharmacy benefit managers and social media companies,
specifically those dealing with revenge porn.
Well, those got taken out too.
Senator Ted Cruz insists that he had nothing to do
with Elon Musk and Donald Trump's business interests
when it comes to those social media regulations
being removed, but you know, it does make you think.
Yeah, it really does.
Speaking of Trump and Musk,
their responses to this budget deal
were pretty different.
Trump, who seemed to be pushing for a shutdown at first,
has been totally silent since it passed,
almost like he's not happy with it.
Yeah, very different from Elon Musk,
who publicly praised Speaker Mike Johnson on ex Twitter,
you know, for getting the deal done.
He did end his post with kind of an ambiguous line though.
He said, ball should now be in the dem court.
Given that the Republicans will control both the House
and the Senate and the presidency come January,
it's hard to tell what exactly he means by that.
Yeah.
He's just trying to stir the pot a little bit.
Well, he's been doing a lot of that lately.
Do you see he also endorsed a German political party
with ties to neo-Nazis?
I did see that yet.
But getting back to the budget deal, the clock is ticking.
They've only got till March 14th
until this temporary fix runs out,
and it sounds like the next round of negotiations
could be even more complicated.
March 14th is definitely a date to circle on the calendar.
You've got the Republican party
dealing with these internal divisions.
There's a potential leadership change,
maybe a new speaker of the House who's inexperienced.
Plus, last time around, everyone was in a rush
to avoid a shutdown before the holidays,
that saving Christmas pressure is gone now,
which might make some groups really dig in
and fight even harder for what they want.
Yeah, and then of course you've got the wild cards,
Trump and Musk, who always seem to enjoy shaking things up.
Yeah, they always keep things interesting.
Former President Trump may not be in office,
but he's still incredibly influential
in the Republican party.
Absolutely.
And Elon Musk is clearly getting more and more
involved in politics, particularly within the GOP.
His endorsement of Speaker Johnson
definitely says something about his intentions,
but it's hard to say what his real motives are.
Yeah, his actions always seem to grab headlines.
And those headlines sometimes make you question his judgment.
Like recently endorsing that German political party
linked to neo-Nazis, that race of eyebrows.
It's a little concerning, to be honest.
I can't help but think all this political drama
must be affecting how consumers feel.
If people are unsure about what's going to happen,
they're probably less likely to spend money,
which could have a big impact on the whole economy.
Right, and the Schwab report actually
touches on those concerns too.
They're saying there's a chance of increased volatility
in the markets because of all this political
and economic uncertainty.
They also talk about the possible impact
of rising interest rates.
That's right, they specifically mention that as a concern,
especially for certain businesses and industries
that are really sensitive to interest rate changes.
Exactly, rising interest rates kind of have this domino effect.
They make it pricier for companies
to borrow money, which can slow down growth and investment.
But at the same time, rising interest rates
make bonds look better to investors,
which might mean money gets pulled out of the stock market.
So it sounds like we're in a bit of a waiting game.
Inflation is cooling off a little, which is good news,
but there's still a lot of uncertainty in the air
politically, economically, and how consumers will react
to all this.
What are your thoughts on where things might go
in the next few months?
Well, it really does feel like we're watching
some kind of financial drama unfold.
And in the background, you've got this political thriller
of the budget battle going on.
And the stakes are really high.
The decisions that get made the next few months,
both by politicians and regular people like you listening,
they're going to have a real impact on the economy.
It's a lot to take in.
So let's try to connect the dots a bit.
We have this March 14th deadline coming up
when the temporary budget deal runs out.
What could make these next budget negotiations
even harder than the ones we just went through?
Yeah, well, as we've talked about,
the Republican Party is really divided right now.
They're having this big internal power struggle.
It's not even clear who's going to come out on top.
And on top of that, we might have a brand new speaker
at the house who doesn't have a lot of experience.
That definitely adds to the uncertainty.
Exactly.
A new speaker who's not familiar with all the ins and outs
of how things work in Congress could really complicate things.
And remember last time everyone was so focused
on avoiding a shutdown before Christmas?
You know, they had that saving Christmas pressure.
This time that's gone.
So certain groups might feel more bolden to dig in
and really fight for what they want.
And then there's always Trump and Musk, those wild cards.
They always seem to like shaking things up.
Oh yeah, they definitely keep things interesting.
You know, former President Trump might not be in office
anymore, but he's still a major force
in the Republican Party.
For sure.
And Elon Musk is getting more and more involved
in politics these days,
especially with the Republicans.
Yeah, his endorsement of Speaker Johnson
was a pretty clear sign of that,
but it's still hard to figure out what his real goals are.
Yeah, his actions tend to make a lot of noise.
And sometimes, you know, those headlines
make you wonder about his judgment.
Like when he endorsed that German political party
with connections to neo-Nazis,
that was definitely an eyebrow razor.
Yeah, that was a bit unsettling, to be honest.
I have this feeling that all this political drama
has got to be affecting how consumers are feeling.
It makes sense.
I mean, if people aren't sure about the future,
they're probably less likely to spend money.
And that could have a domino effect on the entire economy.
That's a valid point.
And the Schwab Report actually mentions those concerns too.
They're warning about the possibility of the markets
becoming more volatile because of all this political
and economic uncertainty.
And, you know, the Schwab Report also highlights
the potential impact of interest rates going up.
Right, they specifically mentioned that as a concern,
especially for businesses and industries
that are really sensitive to interest rate changes.
Exactly. When interest rates rise,
it kind of creates this chain reaction.
It gets more expensive for companies to borrow money,
which can slow down growth and investment.
And then at the same time, rising interest rates
make bonds more appealing to investors.
So money might start flowing out of the stock market.
So it sounds like the next few months
could be a bit of a bumpy ride.
Inflation is starting to cool down, which is good.
But there's still so much uncertainty
about everything politically, economically,
and how consumers will react to it all.
What are your thoughts on where things might be headed?
You know, it's really amazing how much influence
people like Trump and Musk have,
even when they're not officially in politics.
Their actions and what they say
can really move markets and change public opinion.
It's like something we wouldn't have even imagined
a few years ago.
It's a real change in how power works in our society, right?
I mean, we're used to thinking of politicians
as the ones who make change happen.
But now you have these tech billionaires
with their huge platforms and millions of followers
who can have a huge influence.
Yeah, it's a whole new world.
And it's hard to say what's gonna happen next.
But one thing's for sure, we can't ignore it.
We need to understand how these new power players work
and how what they do can affect us.
So let's bring this back to you, the listener.
Why should you care about all this stuff
about politics and the economy and the markets?
How does it relate to your everyday life?
Well, for one thing, it can help you understand
the news better.
You know, figure out what's really going on in the world.
But it goes even deeper than that.
These things directly affect your money,
your job, even your retirement.
Yeah, like if you're invested in the stock market,
understanding these political and economic trends
can help you make smarter decisions about your investments.
Exactly.
If you know that rising interest rates
might hurt certain industries
or that political uncertainty
could make the market more volatile,
you can adjust your portfolio to match.
It's about being proactive and informed
instead of just reacting to things
after they've already happened.
That's right.
Knowledge is power.
And that's especially true today
when things are so complicated and changing so fast.
Well said.
So as we wrap up this deep dive,
I want to leave you with something to think about.
How do you think people like Trump and Musk,
especially with Musk getting more involved
with the Republicans,
how do you think they're going to shape politics
and the economy going forward?
And how might that affect your own financial decisions?
It's definitely something to consider
as we head into the new year.
Absolutely.
Thanks for listening everybody.
And until next time, stay curious,
stay informed and stay engaged.
See ya.