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00:00You have real, real bad practices of importing truck drivers, giving them CDLs after five days.
00:07So Illinois is a hot spot for this, and we're expecting a blitz here come next month.
00:21Good morning. Welcome to the Myers Report Fast 15.
00:25It is Friday, August 1st, and we're going to get right into things.
00:31Don Day, there has been a lot of news made this week by tsunamis.
00:37Can you tell us what is a tsunami and what causes them?
00:41Well, when you have a large earthquake that shakes a large area of the strength and the magnitude we saw there in northeast Russia,
00:50especially near the coastal region, you send essentially a shockwave, which can then cause very large waves.
00:58And sometimes if there's a displacement of sea crust, seabed crust, when these earthquakes hit your coastal areas, you can cause very big waves.
01:11We go back several years with Indonesia when they had the big earthquake and the tsunami there.
01:17This one, thankfully, wasn't as big, but the Pacific is a big place.
01:23And when you saw waves reach Hawaii, the Pacific northwest coast, that shows you the magnitude of the earthquake.
01:30But we did kind of dodge a bullet. It could have been much worse.
01:33Well, waves in general, the rough weather in the Pacific can run well over 100 feet high.
01:39They can go, how high can a wave get in the Pacific?
01:43Well, it's a function of how much crustal displacement there was.
01:47That Indonesian earthquake and tsunami, you had displacement of the sea crust, I know, more than 100 feet.
01:55So that caused waves that large.
01:57So there's a lot of variables in how big those waves can be.
02:01You also have to coincide that with the tides in terms of how impactful it will be along coastal areas.
02:10Okay. So what's been the impact on it? Nothing much?
02:13Nothing much. I mean, obviously, in Russia, where the earthquake was felt the strongest, there was a lot of damage.
02:20But, you know, getting information out of Russia is kind of like a black hole.
02:24Okay. We're now into August, the hottest month of the year, at least for the northern hemisphere.
02:31Will the heat continue that we've seen the last few weeks or will we do for more of moderate weather that we've seen for most of the summer?
02:39Well, here's good news and bad news.
02:41Here for the first several days of August, a lot of the nation's midsection will enjoy some cooler temperatures, a break from the heat wave.
02:48We've got air coming right out of Canada, but it's bringing smoke.
02:51So smoke and haze is going to come right back into the Midwest and the East.
02:57But at the same time, temperatures are going to be five, some areas 10 degrees cooler than average for a few days.
03:04It'll heat up again. Don't worry. We've got some hot days in August, but it's not going to be a remarkable August when it comes to heat.
03:10Even so, it doesn't seem like we're seeing very many 100-degree days, at least in the Chicago area like we used to.
03:18No, we're not. We've had a couple of heat waves. We had one in June. We just got done with this one.
03:23As I think I mentioned in an earlier video, California has had the coolest summer since 1965, and for another several days that's going to continue.
03:32I do see California getting some heat next week, but it's really late in the season for that to be coming in.
03:39Okay. Isaac, we missed you last week. How is the baby, and do you have any pictures?
03:45I do. I do. Yeah, the baby makes one week old today. Mom was doing great.
03:51She did so well that she was able to walk out of the hospital with no wheelchair.
03:55So, you know, we're getting a little bit of sleep, and I'll share a picture here.
03:58He's late. I was born at 10.43 p.m. on July 25th. So today we celebrate his one week.
04:08Congratulations.
04:10In that outfit, he looks a little bit like a Christmas elf.
04:16I'll tell you one thing. They come in the hospital. They start taking all these pictures.
04:19It's a company called Bella Baby, and I sit there for about 20 minutes entertained because it looks like a little show that they're putting on
04:26because they're wrapping him up. They're moving him. He's smiling.
04:30And then I forget that there's a bill that comes underneath all these pictures.
04:36Then they hand me a bill.
04:40You know, but, yeah, no, we're very blessed. We're very happy, and everyone's doing great.
04:45Thank you for asking.
04:46Okay. Let's continue.
04:48Isaac, how are bankruptcies and layoffs going in the trucking industry?
05:01They're definitely still going.
05:03Most notable one was a company called Carol Fuller.
05:08That's a 70-year-old company that really hit the news in a really big way this week.
05:1270-year-old company out of Florida, 400 drivers, 600 employees that just shut their doors here earlier this week.
05:22So you still have the bankruptcies continuing, small, mid-size, large.
05:27You still have layoffs happening across the board, and it's hitting all different types of, you know, different sectors of the industry.
05:33You have trucking.
05:34You have logistics brokerage.
05:36You have warehousing.
05:37Volvo just laid off about 400 people in Texas, so you have truck manufacturing.
05:43Everything across the board, you know, it's still not in the best situation.
05:49Isaac, I'm interested.
05:50We just got some numbers on employment today, and the numbers for May and June were revised down extensively.
06:00They originally showed big increases.
06:02Now, we've hardly had any job growth over the past three months.
06:07And I'm wondering the extent to which you talked about the English requirement resulting in a number of layoffs in addition to all the other factors.
06:19And I'm wondering if this has come into play.
06:22How big are those numbers, do you think, on the layoffs from the requirement that the truckers had to be speaking English or have professionals?
06:30So, we're not seeing that impact hit just yet here, Bob.
06:34It's very minimal.
06:35You know, I've been talking to, you know, I was just recently at an Illinois Trucking Association event.
06:39So, I was talking to different trucking companies, different owners of trucking companies to see if they've been affected yet.
06:45Minimal.
06:45Minimal.
06:46But we are expecting a blitz here come September in Chicago.
06:50From what the rumors are, the Fed, you know, they're going to hit Illinois pretty hard here.
06:58Illinois is a hot spot when it comes to drivers, you know, foreign drivers who can't speak English.
07:04And it even goes even further.
07:06You know, we can discuss on a different call where, you know, you have real, real bad practices of importing truck drivers,
07:15giving them CDLs after five days.
07:18So, Illinois is a hot spot for this.
07:21And we're expecting a blitz here come next month.
07:24So, all those layoffs, to answer your question, Bob, have nothing, have very little to do with the English proficiency executive order.
07:31It has everything to do with what's happening in the trucking economy for us.
07:36Giving someone a CDL in five days sounds very dangerous.
07:39Well, we could do a whole discussion on that.
07:41But, yeah, that's a deeper issue.
07:43Okay.
07:44So, basically, has the recent surge in imports finally cooled off?
07:50And is there any...
07:51Yeah, we saw about 20% year-over-year jump in July.
07:56We had a really, really busy July on the intermodal side, the container side.
07:59But we are already seeing major signs of a cooling off here.
08:04The Illinois Trucking Association pulls out an index, puts out an index for Chicagoland every single week.
08:10And it's been down 10 points week-over-week.
08:15So, last week, we were at about 105.
08:17100 being like a neutral reading.
08:21So, anything above 100 shows growth.
08:24105 was last week.
08:26We dropped 10 points in one week.
08:28So, we're down to 95.
08:29And I'm thinking that that's going to continue to nosedive.
08:34Okay.
08:35Bob Janetsky, are tariffs impacting inflation?
08:40And if so, how much and will it continue?
08:44Yeah, I believe it is.
08:48If we look at the inflation rates on a year-over-year basis, going into the year, we were looking at rates somewhere in the vicinity of 2.5% to 3%.
08:59If we look at the last six months, we're looking at rates of inflation of 3% to 3.5%.
09:05So, now, a lot of people are arguing, no, that's not tariffs.
09:11Yes, it is tariffs.
09:13I'm just looking at the numbers and I'm saying, now, what has happened that could have driven the inflation up?
09:19And in all likelihood, the tariffs come out as one of the culprits.
09:24Now, tariffs do not add permanently to inflation.
09:28They are a one-time lift in prices.
09:32And inflation, technically defined, is an ongoing increase in prices.
09:37So, I think we're going through what are major changes in the economy associated with tariffs and associated with the uncertainty over whether tariffs are going up, down, how much they're going up.
09:51We are looking at a major transition in the economy.
09:56And you can see it in all the numbers.
09:58The fact that there has been very little job growth in the past three months is one indication.
10:06Now, normally, that would be a very negative impact on the economy.
10:11However, when you dig through the numbers, we've had a significant cut in federal employment.
10:17And the July figures, that cut continues.
10:19We had 12,000 federal jobs cut in the month of July.
10:24So, we are seeing, in all cases, major shifts in the economy.
10:29I believe these shifts, on balance, are going to be positive.
10:33Now, we had what looked like real growth in recent years.
10:37Two to three percent, everyone was saying, wow, this is great.
10:41The problem is, that growth was not real in the sense that it added to people's incomes and wealth.
10:48Because while we were growing two to three percent, real earnings were going down by roughly one percent a year.
10:56So, something was wrong.
10:57And what was wrong was, the government was involved in so many aspects of the economy that it created a great deal of inefficiencies.
11:04Now, the changes that Trump is putting in are reallocating resources away from government, away from regulatory areas, and into the more productive economy.
11:17And I think this is going to have a positive impact.
11:20Is it going to hurt initially?
11:21Yes.
11:22We are now suffering from the shift from one type of production to a more productive economy.
11:30And we haven't made the shift yet.
11:32It may take several more months before we see the benefits.
11:36I think, Bob, also, there's been a temporary hike in fuel prices.
11:43I think that's impacting inflation.
11:46And that's been pretty much for the month of July.
11:48If we get any peace settlements that Trump is working on, I think that particularly in Ukraine, and certainly it would be good if we got it in the Middle East, you're going to see oil prices drop.
12:04Because there's a lot impacting fuel prices with Russia and Ukraine.
12:08Once the dust settles and once the policies are in place, I agree with you completely.
12:13The initial part, though, is this will be to really cut back on Russia's oil revenues.
12:24And that's what Trump is doing right now.
12:26He's doing it with India.
12:28One of the agreements he made with India, or one of the pressures he put on India if they wanted a trade deal, was no more buying of Russian oil.
12:36And it was reported just yesterday, India stopped buying Russian oil.
12:41So that raises the price of oil if Russia's going to have difficulty.
12:45If we take Russian oil out of the marketplace, that's an upward pressure because it tightens supply.
12:52Okay.
12:53It puts upward pressure on prices and keeps the inflation up for another month or two and hopefully not much longer.
13:00How are interest rates looking for businesses and home mortgages?
13:03There has been a very slight decline from a key level, where I think we're about 6.5% now for the 30-year mortgage.
13:14That's down from 7%.
13:16But the key is we have to keep these long-term rates coming down.
13:21And the only way they're going to come down is if people are no longer concerned about higher prices and rising inflation.
13:30And the problem is with this temporary upkick in inflation, we have to be very careful that those long-term rates don't end up going higher.
13:39I frankly think the Fed made the right move by not cutting interest rates, cutting short-term interest rates.
13:45Had they cut short-term interest rates, which is what Trump wanted them to do, in the face of some of the inflation rates going up to 3%, 3.5%,
13:54I think the long-term rates would have head higher, just as they did back in September,
14:00when the Fed, without really good reason, ended up with a major cut in interest rates.
14:06Okay.
14:07Over the next couple months, how do you see the stocks going?
14:10Well, I think it might be, our short-term model says that the upward pressure is still in effect.
14:19The markets took a big hit this morning.
14:21They were down 1%.
14:23And I think that volatility is just to be expected at a time when we're still going through some of these very difficult adjustments to Trump's policies.
14:34Okay.
14:34So is that why the market took a hit today?
14:36I think so.
14:37So, yeah, Trump again announced major tariff increases, but they don't go into effect until August 7th.
14:46So again, it gives them time to negotiate.
14:48It's the same game.
14:49So I wouldn't even bring this up as a major development to see how it flushes out.
14:55But it creates uncertainty, and the market doesn't like uncertainty.
14:59That's good for traders.
15:00Okay.
15:01Are you optimistic, Don Day?
15:04Are you optimistic about the future going forward?
15:10Yes, I am.
15:12Do you see any real issues coming on the weather horizon?
15:15No, I don't.
15:16As we mentioned last week, we're probably headed towards a record soybean and corn crop.
15:21And so the weather continues to produce globally enough food for everybody to eat.
15:27And that's going to put a downward pressure on inflation.
15:30Glad to hear that.
15:32Isaac, are you optimistic?
15:34Well, you're going to be tremendously optimistic.
15:36I'll tell you, I better be optimistic.
15:39Diapers are expensive.
15:41I'll tell you, I'm optimistic.
15:43Let's get this economy roaring again.
15:45Bob?
15:47Isaac has to be optimistic.
15:48He wouldn't be having more kids if he wasn't optimistic about the future.
15:52And I join him in his optimism.
15:55Okay.
15:56With that, I'd like to say thank you to everybody.
15:58Have a good, safe weekend.
16:00Be well.
16:01Stay safe.
16:02And God bless America.
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