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00:00But I believe that any time the government shuts down, business productivity increases.
00:18Hello, everyone. Welcome to the Myers Report Fast 15. It is Friday, October 3rd. Don Day
00:25is not with us today. Don Day is in Albuquerque, New Mexico, and he is hosting or he is controlling
00:35the Albuquerque Balloon Festival. Let me get a picture of it. That's what we see here.
00:45It is one of the largest in the country, if not the world. He has over 600 balloons going up,
00:52and Don controls the safety of everybody here because, obviously, local weather conditions,
01:03this could be a wonderful event or it could be an utter disaster with people getting hurt.
01:08But this gives an idea of the size of the festival.
01:13And as I understand it, Don might be in that balloon. Can't confirm it, but possibility.
01:25Yeah, I see him too, Gary.
01:27Exactly.
01:28Are those all weather balloons? Is that what this is?
01:31Hot air balloons. These are people are going...
01:33It's regular balloons. They're not specifically weather balloons.
01:35No. As you know, Don is one of the premier experts in the world for stratospheric and high
01:46atmospheric ballooning for manned and unmanned balloons. He himself is, among his clients,
01:55are Richard Branson and some of the balloon flights that they take people up to, what, 100,000 feet.
02:02It's quite significant. Don is to be congratulated that he has assembled more hot air than what it is
02:15in Washington. That's quite an accomplishment, isn't it? Yes, it is.
02:23Isaac. Yes, sir.
02:26In terms of trucking, are we starting to see a tightening in driver capacity or is the market still
02:34oversupplied?
02:36Well, we're definitely starting to see a little bit of tightness. Rejection levels hit 6.6 last month.
02:44Anything north of 5% rejection in terms of tender levels. That's carriers rejecting shipments that
02:50are contracted for them. Anything north of 5% tells us there's a little bit of tightening in the
02:55market. Anything below 5%, the market's pretty loose. To give you a comparison, in COVID levels,
03:02when capacity was extremely difficult to find, we were hovering around 25%.
03:07Now, what's important is now that we're seeing rejection levels itch back up, it's not because
03:14there's an oversupply in freight. If anything, no, freight's still down right now. We're seeing a
03:18slowdown in imports, but we're seeing a massive amount of drivers due to this English proficiency
03:24and the Trump executive order for English proficiency for these truck drivers, these H2B2
03:33visas to stop coming to America. Due to this, truck drivers are scared to get in their trucks and do
03:38shipments. I was talking to a couple of my buddies this morning. He runs a 200 truck company. He's getting
03:45ready to sell all of his assets because 50% of his truck drivers are these work visa truck drivers
03:50that will not get back in the truck. They literally refused over the last couple of days,
03:57cold stop. And we're seeing more and more of this across the entire industry. People are getting scared.
04:03So that's going to drive up costs and drive up...
04:06Absolutely. Absolutely. Yeah. This could be the catalyst to finally, you know, turn the industry
04:12around that we've been waiting for the last three years. Are smaller carriers exiting the
04:17market at a faster pace? Yes, yes, and yes. I have a cousin of mine who is literally selling his
04:26company as we speak. And we're seeing that across the board. Smaller companies who have endured three
04:32and a half years of a freight recession are out of money. They're out of air. And with renewals for
04:39registration around the corner and insurance renewals around the corner, many people, especially the
04:45smaller and mid-sized companies, are out of money to move forward. Do we know whether there's a change
04:54in the value of trucking companies? Have the ratios changed?
05:01In terms of valuations? Yes.
05:05Yeah. Multiples are down to about three, four times right now in terms of trading. Usually,
05:10trucking companies trade about six, seven times. So yeah, they're way, way down right now.
05:17Trucking industry has been suffering again for, it's been three and a half years. You know, again,
05:22although a lot of these truck drivers are concerned, this is the last flush of capacity that this
05:27industry desperately needs right now. Okay. Moving on, we have with us today Michael Lipper,
05:37who is an expert on mutual funds, one of the leading experts, probably don't embarrass him in
05:43the country, if not the world. And we have Paul McGonigal, who's an international,
05:49who's been an international banker.
05:50A leading expert on absolutely nothing.
05:52You always say that. The government shutdown has obviously prevented the government from coming
06:03out with government statistics. And in the meantime, these stock markets seem to be happy
06:08with the government shutdown because the S&P 500 is now up to 6716, which means that we're getting
06:20closer to our 7,000 forecasts for this year. Yeah. But the point is, does it matter?
06:28I don't know. I know. There's a piece, J.P. Morgan piece today that I read that looked at the history
06:35of this. And past shutdowns also have never affected the market to any significant degree.
06:42Right. Go ahead, Mike. Also, you have to remember, markets, when they're functioning reasonably,
06:54are future markets and focuses on the future. And the prices don't often recognize that.
07:12Well, I think because you have to remember that the sellers set the prices and many sellers
07:27sell because they have to for their own needs. So there is a somewhat negative bias to the valuations
07:41that you can get just using current stock prices.
07:49So do either of you guys feel that the government shutdown is going? Well, obviously, it's not hurting
07:55the markets. And the question is, does it matter if we if we don't have government numbers? How how do we
08:02adjust? Paul? There are probably several private sector revenues that one could pursue when people
08:09will that people that I'm sure that people like Goldman Sachs and J.P. are already deep into this
08:16rabbit hole and developing substitutes that they will look at to figure out what's going on.
08:24Well, we have things like the ADP employment. Yeah, we have that. And Goldman Sachs has its own models that
08:31it uses. And a number of the private companies have their own alternatives, which they communicate to
08:37their private clients and things like that. So I mean, it's it's it's and people have used those mostly as a
08:45check on on on the government data rather than a primary source of information. But it will work fine
08:52for a while as private as a and it may and as is the and it extends, if it does, they may get better and
09:00better at it. And so that's interesting, because then if this does happen, you might not have one source
09:08of information that the quote market end quote looks at. It'll be an array rather than somebody's number.
09:17Michael? You also have another very strange factor. But I believe that any time the government shuts down,
09:28business productivity increases.
09:33Yeah, there was someone who made the comment that the government should stay shut down
09:38and we should continue to pay the bureaucrats so they can't do any harm.
09:47Okay, so, Michael, where do you see the market going at this point?
09:53Pick your period.
09:56The next six months.
09:57As we get closer to the 26th pre-election, I think it will be more volatile.
10:14And the odds are, except in periods of crushing the shorts,
10:32I don't see much in the way of a stimulus to materially higher prices. So, you know, it can
10:47kind of go up 5 to 10 percent, sure. But beyond that, no.
10:54Well, 5 to 10 percent would be another 600 or 700 points on the S&P.
11:03Yeah, but you then deduct the inflation. And when you go to the store,
11:16at best you get half. Paul, what do you think?
11:25That's always a very poor question to ask me because one of my favorite market watchers is
11:31always Burt Malkiel, who wrote this book many years ago, and Mike, I'm sure you know it well,
11:39called a random walk down Wall Street, which was making the case for essentially efficient markets,
11:46which means that the current price reflects everything we know. And so, the future price
11:53only reflects things we don't know, and therefore, by definition, we can't forecast.
11:59Okay. And now, and the other thing that we have to…
12:02By the way, it's kind of controversial, I think so, having said that.
12:05And the other thing we have to mention is, we just had obviously breaking news,
12:11that Hamas has apparently accepted a 22-point program that the Trump administration has offered.
12:22We're going to have more on that over the next couple of days. We have a couple of our people
12:28in Israel that we'll be speaking to. That has to be good for the market.
12:33I don't think it's a blanket acceptance. I think there are major sequencing issues here that they're
12:38going to have to work through. But they have definitively said that they're going to release
12:44the hostages. And the pace of Israeli withdrawal, and other things like that, and the timing of the
12:51arrival of the new government, and the constitution of the board that Trump will chair, and all that.
12:58There's a whole bunch of stuff before you actually have a deal.
13:03Isaac, you've got business associates and family over there. Have you heard
13:07anything from them at this time?
13:09No, I haven't. When did this news get announced?
13:12Today.
13:12Today.
13:13Today.
13:14Morning, afternoon.
13:15Well, this afternoon, apparently it was out earlier. London knew before we did, because they're
13:20five hours ahead of us.
13:21Really? So yeah, we have literally dispatchers in the West Bank that I'll ask them as soon as I get
13:27on this call, what they're seeing over there.
13:29I got the first word before it hit the U.S. press, it came from one of our London School of Economics
13:37guys, James Bennett, who called me up and said, did you know? We have to talk about this.
13:43Michael, you've been around a while. How do you think this could, could this be a benefit to the markets?
13:57It would be a good excuse. I don't think it changes long-term economics.
14:06Thanks. Okay. Then I'm going to ask my basic question that we always ask. Isaac, are you
14:14optimistic or pessimistic going forward now that you've just been given a piece of information
14:20about which you still know nothing or little to nothing?
14:25God bless America. I'm glad things are going well in Israel, Palestine. Hopefully the hostages
14:30can get home safely. Hopefully the chaos in Gaza can stop and we can all live happily ever after.
14:35I'm optimistic. Paul, what about you? I'm not feeling too bad. I feel pretty good.
14:42Wow. Michael.
14:47I'm extremely optimistic long-term. And as you discount the long-term to the current, I become
14:55more and more pessimistic. I'm not sure what that means. What that means is
15:03there's probably more risk in the market than there's potential gain.
15:13Okay. But that has nothing to do with any peace settlement.
15:19Have a great weekend. Stay safe and God bless America.
15:33Bye.
15:52Yeah.
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