A Good Time to Buy

So you're ready to purchase a home but you've been sitting on the sidelines because the market is just too crazy.

If only someone could make sense of it all. I'm Rob West. Well there's no question that in times like these you need all the good advice you can get and we know just the guy to give you sound practical and spiritual advice for buying a home. He's Dale Vermillion and he joins me today and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well we're delighted to have Dale Vermillion with us again today. He's the author of The Mortgage Maze, the simple truth about financing your home and Dale it's always great to have you with us. Rob it is always an honor. God bless you. I'm glad to be here. Thank you.

And you too my friend. We're grateful for your counsel and these are interesting times. Let's start with interest rates today and by the way before we dive in, if you have a question in this early portion of the broadcast specifically around interest rates, mortgages, how to secure a mortgage, what you need to know, or buying or selling a home, Dale's here to tackle those questions in the first part of the broadcast.

800-525-7000, that's 800-525-7000. Now Dale, interest rates are always a huge factor when folks are considering buying a home. We've of course seen a major increase in those rates so where do we find ourselves right now? Well as of today rates are at 7.28.

They've been steadily climbing you know a couple of basis points each day for the last four to five weeks mostly because of the Fitch downgrade that we saw of the U.S. debt and the inflation increase that we saw. You know we're expecting to see rates to stay in this low sevens, high sixes probably for the remainder of this year and according to analysts it should taper down to probably mid sixes by the end of the year. Okay and what are you looking at for 2024? You know 2024 should be a little better.

I just looked at the forecast from eight of the major analysts in the country and it ranges anywhere from a 5.6 on the low side that they project to a 6.2 or 3 on the high side. So we anticipate high fives probably in 2024 which would be a little bit better than seven and a half. Yeah that's exactly right. Now give us some perspective here Dale because we got very accustomed to rates around three. I know many folks who call this program celebrate the fact that they've got an interest rate at two and a half but that was unusual wasn't it? I mean if we look historically we're actually closer to the historical norm where we are today right?

That is correct. I'm sitting with a 1.99 that I want to frame on my wall because I'm wow in the business. Yeah I know I knew I knew how to market. So yeah in the business I'd never seen a rate that low and you know the average since 1971 is 7.75. So you know we are we had much higher rate markets than this. We've had obviously lower rate markets that that three and four percent stuff only lasted about two years. So this is a much more normal market. Yeah okay what about an assumable mortgage?

It seems like that you know is a relic of the past. Are we seeing that return? We're seeing some of it you know remember conventional loans usually aren't assumable that's the vast majority of what's out there. If it's FHA or USDA or VA one of the government programs you've got to meet their requirements their loan requirements in order to qualify for that. You know it is a possibility it's worth asking the question when you're buying a home and if you're a seller it's worth looking into with your lender to see if your mortgage is assumable.

But it is kind of rare it's somewhat complicated you definitely want to get an attorney involved that's the key to all of that. Yeah very good. We're gonna have to hit a break here in about a minute but I want to talk about that person who's been sitting on the sideline. They're thinking about whether or not this is the time to enter this market as a buyer. Get us started on that and perhaps we'll pick it up on the other side of the break. Well if you're a renter I would definitely encourage you because as you know rents have been through the roof and if you look at most renters every year your income is probably going up less than your rent so your cash flow negative each year you won't have that with a mortgage so I think that's a good consideration. All right very good of course we need to look at and make sure you're ready to buy that home. Dale would be the first to say make sure you have that down payment don't stretch yourself on your budget to get in but given what he said about rental prices this may in fact be the time to look at buying if you're in the market rather than sitting on the sideline. We'll continue to unpack that we'll also ask Dale about where he sees home prices headed what about a recession how might that affect home prices that and much more plus your questions today for Dale Vermillion at eight hundred five two five seven thousand you can call right now a quick break and back with much more just around the corner stay with us. Delighted to have you with us today on faith and finance live I'm Rob West we've got some phone lines open here in this first portion of the broadcast we're taking your questions specifically on anything related to mortgages the housing market buying or selling a home. Dale Vermillion with us today he's our good friend he joins us regularly on this broadcast he's the author of the moody published book the mortgage maze the simple truth about financing your home and Dale just before the break we were talking about whether or not if you're looking to buy a home in the foreseeable future this might in fact be the time despite these higher rates to go ahead and jump in and you said for somebody who's renting it certainly might be what else might you share with us about a prospective buyer. Well look there's a lot of other advantages today that you have to think about I mean with rates high one of the things we know is that there's a lot less buyers in the market remember when we had super low rates in 2020 and 2021 you know there was a hundred and twenty people that bid on a house within 10 minutes when something went on the market and you had bidding wars there were fifty seventy thousand dollars over value those have ceased for the most part so although you're going to pay a higher rate you're going to have a much better chance of getting in a home you're probably going to buy it for a lower price than you would have listing prices are dropping in parts of the country so that's helping a little bit on the affordability side and concessions are a very common thing now sellers are providing concessions to buyers so you can either buy down your interest rate or use that for other purposes in buying you know that that's happening in 41% of all sales so when you add all these things up and then add the tax advantages of seven and a half percent or seven and a quarter percent rates remember the the average or the median home sale price in the USA is four hundred and thirty six thousand dollars if you were financing that and you put on a seven and a quarter percent rate that's thirty one thousand dollars in interest you can deduct that's much higher than the highest level of standard deduction of twenty seven seven for a joint couple who's married filing jointly in 2023 so those tax benefits create a rebate that you're going to get in your tax refund that can really go back to your cash flow just to lower the cost of your monthly payments because you're gaining those refunds because of the interest rate so there's a lot of reasons why it really does make sense today to continue to look at a home yeah interesting uh well obviously there's so much to consider here you know dale when it comes to pricing a home i'm just curious in your thoughts on this you know it seems like when i started buying homes i mean let's say you would be you're selling a house and you might want to try to get net two hundred thousand from the sale you would price it maybe at 220 uh in hopes that somebody would you know come in at 180 and maybe you could meet in the middle at at 200 and you get your full amount it seems like today you might price it at 180 to try to get as many buyers to the table as possible knowing that it's just very common for people to pay over asking uh once you get you know enough buyers in the equation is that your experience yeah it really is what i've seen this happen out there in the market it's interesting how the the whole game has completely changed because of the inventory shortages we have compared to the buyer demand that we have it's it's a supply and demand problem that we're dealing with and that's what's helping carry values as well as create these different ways that people are buying now yeah let's talk about that we're going to go to the phones here in just a moment but what are you seeing in terms of home values obviously you would expect with a looming recession most economists think we'll have a recession later this year next year these high interest rates more than doubled from where they were a little over a year ago that we would see housing prices taper off and yet we haven't have we yep again first time i've ever seen this in 40 years we we have seen a 10 increase in property values in the first half of 2023 the forecast was only six percent coming into the year now that change at the end of june we did see in june that it dropped to an annualized of 1.6 that's the lowest we've seen in 11 years what you're going to see is regional changes in places with work from home being such a big thing now uh places where people want to live and work are going to continue to have huge demand and numbers will stay up on values and those places where that's not the case you're going to see values drop and listing prices will be much less okay very good we're going to continue to unpack all of this with dale vermilion and also tell you what you need to know before you go to buy a home related to a mortgage but let's head to the phones take a few questions here to west palm beach uh norma you'll be our first caller go ahead hi my question pertains to uh the 20 down i know it it should be the way to go that with you know um leaving the house for at least five years but my question is is you know you are not there yet with the 20 yet while you are going to have to pay in grant is over 30 of your you know while you're bringing home what do i do there yeah dale i mean this is something that with these home prices where they are we've got folks that are saying listen it makes sense on paper for me to go into this mortgage but i you know don't have that full 20 what do i do well you want to have 20 if you can to avoid paying mortgage insurance but um you have to look at the bigger picture too and ask yourself the question okay if i put less down but i'm in a better financial situation i'm building equity in a better way i'm building wealth for my family and protection and i'm getting more tax benefits then it's going to make sense to make that move now i you know you want to be as judicious as you can with this and put as much down as you can without draining your reserves you don't want to buy a home and have no money in the bank that's yeah it's a mistake to make so make sure you balance between those two and and then just use a really wise decision when you go into that based on your budget you always do a budget first so you know what you can afford and it sounds like this lady did which i'm really happy she did yeah dale what would they expect to pay just as a percentage of the mortgage for private mortgage insurance private mortgage insurance runs one and a half i think it's one and a half percent is what they run on those but there's all kinds of mortgage insurance out there you've got the kind that you can finance you got the kind you can prepay you want to talk to your lender about the the different kind of products you have and then you want to talk to them about what does that look like from a mortgage insurer standpoint and what are your options for either financing it into the loan or paying it up front as a prepaid charge yeah so norma i mean these are rules of thumb that we talk about a rule of thumb would be let's put down 20 that's going to give you good equity going in the house it's going to ensure that it allows you to demonstrate that you've been disciplined and your ability to save which is a good sign it also eliminates that private mortgage insurance but it's just a rule of thumb you know if you're if it makes sense financially you know it perhaps you you have a mortgage payment that's even smaller than your rent payment and you're building equity but you've got to go in with 10 i would say that's worth considering dale is there a threshold beyond which you just you would not buy a house if you didn't have at least x percent down what is that number yeah well the smallest down payment for all intents and purposes is three and a half percent and and i would just say to somebody if you need three and a half percent other than a first-time buyer who's buying a starter home that's the biggest challenge because values have become so high for first-time buyers but but i would want to see you have at least five to ten percent into that house because again you want to you want to prove that you have committed to saving to put into that and you want to build equity right out of the gate protect yourself those are really important factors yeah i mean if we were to see a dip in these housing prices let's say we get into a recession that's a little deeper norma you certainly wouldn't want to be upside down in that home so i would say let's find a balance there be prayerful about that you know just make sure you're not rushing it but i think you know if you don't have that full 20 down you've run the numbers this is a wise purchase you're planning on staying there a while and it fits into your budget and you can build equity along the way then we could certainly get on board with that thanks for your call today well we've got some uh some other great questions here coming up plus more with dale vermilion we'll talk about what you need to know as you go to get that mortgage how do you approach that what's the difference between an interest rate and apr we'll cover that as well much more to come with dale vermilion just around the corner he's the author of the mortgage maze and he's our guest today we'll be right back on faith and finance live so thankful to have you with us today on faith and finance live i'm rob wesk your host we're taking your calls and questions today on topics related at least in this segment to mortgages and the housing market we're joined today by our good friend dale vermilion he joins us regularly as a good friend of this broadcast he's the author of the mortgage maze published by moody publishers the simple truth about financing your home and dale before the break we were talking about just what's going on in this housing market for those folks who are looking to buy right now and they're going out to get that mortgage what do they need to know about the number of bids they need to get the difference between apr and interest rate just some thoughts for how they can be best prepared yeah great question rob first off you want to get at least three different lenders that you talk to you want to start with first if you know somebody that you trust that either you need a referral or you have to work with directly if not try your bank try your current lender if you have one um try your credit union and you can talk to a broker or a mortgage banker get a comparison between them and the most important thing you got to remember is the question that most people ask is what is your rate that is not the question you want to ask what you want to ask is what is the apr and what is the rate because they're two different things the annual percentage rate or the apr is the total cost that you're going to pay for the loan that includes any fees or costs that are financed into the loan the interest rate is the cost that you're paying for the total amount of the loan to include the fees now without confusing anybody here's what that simply means if you have a four hundred thousand dollar loan and it's at let's say six and a half percent but they're going to finance your two points in the loan which is eight thousand dollars now when you're paying that eight thousand as part of the loan that's going to take your interest up by about a half a percent so your interest rate would be six and a half your apr would be seven always get them to quote you both and get them to quote you exactly what their fees are so you're comparing apples to apples and not apples to oranges because sometimes if you just say what's the rate somebody will quote you a low rate but they'll have high fees to get you that low rate and may not tell you that up front and you don't want to find it out later that's really helpful dale what about pre-qualified versus pre-approved what's the difference and what should our folks be looking to get great question you do not want to be pre-qualified for a mortgage on a purchase you want to be pre-approved and what that means is they're not just going to take your application and then give you a an approval based on estimates they're actually going to verify your income so have your income ready they're going to verify your credit score they're going to verify your down payment funds and now you become a stronger offer to the seller because if you're compared up against somebody who's bidding on that same house and they have not had these things verified you're going to look to be the stronger buyer and you may win a bid just because of that not to mention the fact a pre-qualification where they haven't verified your income and your credit and have not verified your assets it's not even valuable to you because what could happen is they could tell you you're qualified you make an offer get a contract and then they tell you later you're not qualified so make sure you get a pre-approval yeah very good let's go to sunrise florida hi lorna thanks for calling today go ahead hi i have a question um someone called us and was pitching a loan um removal from our home meaning they're trying to get us to take funds out of our home i can't remember what it's called where when i remove the equity from my home i don't have to pay that loan back yeah until i pass away or my spouse passed away then my um minister should be responsible i want to know exactly what it is because this guy's telling me is fha um approved do you know anything about it yeah so dale they're probably talking about either a reverse or a home equity conversion mortgage huh that's exactly what you're talking about a hackam which is a commonly referred to as a reverse mortgage which is fha back you want to make sure that first off uh you you know you have to qualify by being at certain age limits for that it can be a good program for somebody who has lots of equity in the property you want to live out the rest of your years in that property and you want to be able to create for yourselves kind of a residual income out of your equity the the key thing you got to be careful of is make sure that you're working with a reputable company make sure that you understand all of the fees and costs of that because the fees and costs can be absorbed at sometimes if you're not careful so know all of the information up front before you decide that and make sure that fits into your financial plan i think that's really important yeah i couldn't agree more lorna dale's exactly right this is called a reverse mortgage or a home equity conversion mortgage essentially i like you getting out of debt paying off that mortgage and staying that way but again to dale's point for somebody who's sitting on a lot of equity they plan to stay in the home they can afford to keep the property taxes and insurance up they're just short on their income in retirement to meet their obligations and they've done everything they can to trim their lifestyle and the only other option and that's what i mean a last resort is to start pulling the equity out of the home through a reverse mortgage then that's when you look at it not first but probably last and to dale's point there can be a lot of fees and a much higher than even a prevailing interest rate associated with it so let's try to avoid it if you can if you can help it but if it's a last resort this could be a good option for you to check out thanks for your call today quickly to ohio hey rich go right ahead hi um real quick hopefully i can do this quick uh so beautiful we have a beautiful home and we just decided it's really big so we thought well why don't we sell it while we can get a lot of money out of it and downsize problem is we probably will walk away with about 140 to 170 um in our pocket now i was only reason i wanted to do that was to pick a 15-year loan and lower my payment at the same time but what i'm trying to looking at is anything worth buying is about 400 000 and it doesn't really seem like taking a 15-year loan i'm going to i'm going to have a higher payment does that seem like a smart move yeah dale your thoughts well if it all comes down to what your budget is and it comes down to the needs of the house it sounds like you got a good house you're living in right now that you've got a lower cost on um you don't want to sell one to end up having to pay more for the other and it puts you in a worse position so just do the numbers on that and see what works best for your finances i think that's right rich let me throw out one other idea perhaps you get the 30-year mortgage but pay on it like it's a 15 year work that into your budget and then if something goes awry and you can't do it or there's a loss of income you can always back down to the lower payment based on the 30-year amortization thanks for your call today dale that's going to do it for us appreciate you being along with us my friend great being here god bless you thank you so much rob all right that's dale vermilion the author of the mortgage maze pick it up wherever you buy books we'll be right back great to have you with us today on faith and finance live hey let me remind you faith and finance live is listener supported if you've found something to be helpful in this program and you want to support this work you can do that at faithfi.com just click give faithfi.com just click give you know we've been talking today about mortgages and if you're looking to secure a mortgage and you want to connect with a trusted partner to learn more our friends at movement mortgage would be delighted to give you more information just check out movement.com forward slash faith that's movement.com forward slash faith back to the phones to indianapolis hi greg go right ahead yeah rob thanks for taking the call i've known to home for 20 years lived there i just recently started renting it becoming a landlord i was running that by somebody the other day and they they were saying that now that if i sell it the capital gains could be taxed differently from ages living there and selling it and moving on versus now becoming a landlord yeah yeah yeah that's right however as long as you've lived there two out of the last five years you would then qualify for the capital gains exclusion and that would be quarter of a million dollars for an individual a half a million dollars worth of profit for a married couple so as long as you can stay within that two out of the last five year window then you'll enjoy that that capital gains exclusion if you go beyond that then you're right the profit would be subject to capital gains it would be a long-term capital gain it would be based on the profit which is essentially your selling price minus your purchase price way back when you bought it plus any improvements that would give you your profit and then if you have income as a married couple filing jointly somewhere between 80 000 and roughly a half a million dollars in year in in income then you'd be in a 15 capital gains tax rate but if you can you know if you sell it soon enough where you've lived there as your primary residence two out of the last five years then you could get that capital gains exclusion yeah i just recently started renting in here in july of this year it took me a while to kind of process downsize and get that turned around so in july of this year 23 is when it started renting and i was hoping listening to you guys that maybe within a year or two the market changes a little bit would be thinking about selling it and then taking the capital gain getting my 20 percent down and then trying to you know get buy down the interest in in getting the payment lower yeah well if you sold it in that time frame and you'd probably wouldn't have any capital gains because you'd you'd be able to say that out of the last five years you lived there two of those right thank you yes yeah so you wouldn't have to pay any capital gains at all keep in mind we're not really forecasting the you know housing market to continue i mean it's probably going to remain flat here i mean especially if we hit a recession later this year or next year so if you really think this is what you want to do get rid of this property unless you want to become a landlord and you you want to keep the rental income if you're looking to buy that next property i don't know that there's a reason to wait necessarily in fact you know if if the recession next year is a little deeper than we expect you may actually not do quite as well as you might do today by selling it so i i would be careful on trying to time the the sale a little too closely and and really just you know proceed based on what makes the most sense in terms of your goals and objectives does that make sense it does thank you okay very good greg thanks for your call today we appreciate that uh let's see to st louis missouri hi lynn go ahead hi rob thank you for your program i am uh 57 and i've had an ira for about 25 years that i started after i left full-time employment and then i stayed home with the kids and started a sole proprietorship so i were i wasn't able to contribute anything to it um it's roughly about 18 000 and now i'm an empty nester and i can start contributing to it again um it only it would only be about 40 to 100 a month would it be better to add to my current ira which is about 60 stock 40 bond or start a robo account and if so which company would you recommend i see yeah so first on the ira in terms of your ability to contribute uh are you contributing based on earned income that you have or are you contributing based on you being a spouse uh of uh of someone who has earned income tell me more about that oh it's my my earned income from self-employment okay all right yeah so it can be self-employment income as long as uh uh you know you you can be able to document that you do have uh earned income beyond you know your expenses and so forth so yes uh i like the idea of you just for simplicity sake lynn contributing to your existing ira as opposed to trying to open another one uh and then you get you know caught with having just a little bit of money in there and you're subject to some minimums and that kind of thing in terms of the robo versus the actively managed portfolio and as long as you're in some good high quality mutual funds and the diversification is right for you in terms of the mix between stocks and bonds i mean there's plenty of data that says a more passive indexed approach to investing where you just capture the broad moves of the stock market indexes is very effective and often some time periods it'll beat active management i think we're headed into a period where the more actively managed funds are going to outperform the indexes because i think with stubborn inflation and just some of the challenges we have some of the headwinds economically looking out into the next decade here in the us and abroad i think active management is going to outperform uh just the broad market indexes that's just my opinion um i think either could be a great solution but i don't know why you wouldn't you know just contribute to what you're already doing in your existing ira as opposed to starting something new okay but i have an additional question so my ira it's with a local investment company um but it's managed by lincoln financial for american funds is there a reason why i need all these layers because the fees are rather high yeah yeah no i can understand what's the total amount of assets under management about eighteen thousand yeah so the challenge is you're going to be limited in your investment options with eighteen thousand um so one way for you to do this directly and and remove some of those layers from lincoln and the local advisor which i agree is probably that plus the internal expenses of the funds themselves is probably a pretty high percentage of this portfolio especially with it being only eighteen thousand one approach to consider would be to check in with our friends at soundmind investing dot org uh you know if they could give you some mutual fund suggestions that you would buy yourself but using the sound mind investing newsletter um you know they could you could have all the information you need to make those decisions and then you'd go direct so you could move this to a fidelity or schwab a discount brokerage where you'd have very low cost and then once you select the funds based on the help that you'd get from smi uh you know then you could make that investment directly and you'd cut out a lot of these layers of fees so the way you'd uh you'd proceed there is just sound mind investing dot o-r-g all right okay great thank you so much all right thanks very much we appreciate it uh we're gonna take a quick break when we come back jerry boyer's gonna stop by jerry's gonna weigh in on uh the comments and remarks today from uh fed chairman powell he's been uh out speaking in jackson hole that's been moving the markets initially down but we finished with some strength on the upside that plus the uh the presidential political futures market jerry's gonna tell us what that's all about and what it means to you so much more to come here on faith and finance live today as we apply god's wisdom to your financial decisions and choices jerry boyer just around the corner so don't go anywhere that's always an entertaining and interesting conversation we'll be right back stay with us i'm so glad you're with us today on faith and finance live here in our final segment of the broadcast on a friday we're joined by our good friend jerry boyer he's our resident economist he's president of boyer research and he joins us with his insightful analysis of the markets and the economy and jerry if you're going to give a speech on the interest rates and the economy it seems like you either go to switzerland or jackson hole huh yes i suppose that's true i haven't i haven't given a speech in switzerland on the topic uh but i have in jackson hole but it's basically the same crowd um and uh you know they take their private jets to switzerland um or they take their private jets to jackson hole and you know ski in both places um i have been to i have uh i did speak at an economic conference at jackson hole what i noticed was um and i think this helps explain maybe some of the quality of the commentary that you hear at these meetings in jackson hole is that there's really very little oxygen there it's uh very high up in the mountains it's up in the grand petons and i just noticed like right away i got a headache my ears were popping and i was a little out of breath so when i was when i gave my speech i had to kind of huff and puff so i was a little oxygen deprived um and i think that might affect the quality of thinking at jackson hole so as the thinking goes then perhaps the reason the rationale that the fed chair powell said that uh inflation is too high and therefore we need to slow down the economy perhaps that was because he had a headache oxygen deprivation right i mean if he doesn't have a headache it's going to give the rest of us a headache uh because i don't want the economy slowed down you know i'm in business um and i kind of like when the economy speeds up and people are more prosperous and um you know they get they get raises at work uh and they can um they have more income and they can give more to charity and they can also you know help their children or their grandchildren more i like i like the economy growing and i think god does because when he made us he said fill the earth and subdue it exercise dominion over the over then he lists the fish of the sea the birds of the air the beasts of the field over the earth so i you know economic growth seems to be kind of what it is to be human beings god made the world he structured it he organized it he improved it he made a garden so he's a gardener and a farmer and then said you know do like father did i'm i'm your daddy now go you know what i did here in the garden you go and do that with the rest of the world now we you know we just we economists just call that economic growth but it's basically improving the world and it's what we're made to do and it is not the problem it is not the cause of inflation the fed should not blame economic growth for inflation uh if the fed wants to understand if powell and the rest of them want to understand who's responsible inflation just talk to the guy that they shave with every morning looking in the mirror they did this we didn't do it by growing too fast or being too productive or working too hard well what we're hinting around at folks is the fed federal reserve chairman powell was in fact in jackson hole today he did a speech at 10 o'clock this morning and he essentially said quote inflation is too high and quote we are prepared to raise rates further now we finished the day jerry with green across the board nearly one percent gains on all the major indexes so it sounds like the market is fairly preconditioned to these ideas huh yeah so they didn't believe them um they weren't really surprised and they don't that's my take on what's going on basically every economic indicator uh that is interest rate sensitive acted as though he doesn't mean it um so basically i mean i think they're looking at the markets are looking at this and they're saying well we know what his philosophy is his philosophy is that economic growth causes inflation and you know if we're if we if we're too many people are employed then we have leverage when it comes to negotiating wages and that increases our income and therefore and that's somehow that causes inflation that's his philosophy but you have to not just have the philosophy you have to be willing to really follow through with the philosophy and it is very rare to find a fed chairman who's willing to be responsible for a recession volcker paul volcker is the only one i can think of in my lifetime who was willing to risk that so i think markets are looking and saying yeah we hear you um and they've registered a slightly higher very slightly higher probability that there'll be another rate hike but that higher probability is in the neighborhood of 40 percent not 50 or higher so they're saying yeah maybe you'll raise rates but still the smart bet is you won't um and so you know markets are up because essentially they don't believe he's willing to follow through on his canesian philosophy or maybe they've been the grand titans and they understand he's a little oxygen deprived and didn't really mean what he said one of the two all right jerry that's really helpful hey let's turn the corner uh you introduced us some time ago to an idea that was probably brand new to most of us and that is that there's a political futures market there's a futures market for just about everything where people are buying real contracts on exchanges related to a whole variety of things but one of those happens to be related to our elections right yes you can buy what amounts to a security now it's a there's a debate the cftc uh that they regulate certain kinds of securities not stocks more like bonds and commodities um and cryptocurrencies um they're talking to these exchanges saying you know are you an ex are you a security or not but they basically act like it so if right now um you can buy a contract that and if donald trump wins you get a dollar now people don't really buy these a dollar at a time they buy bigger amounts but i'm just trying to make the map easy now in order to buy a contract that pays a dollar if trump wins you have to pay 64 cents that means that this contract is implying there's a 64 probability that donald trump will win the presidential nomination i should clarify that they do not think he's going to win the general election so futures markets you have presidential nomination you have vice presidential nomination you have the general election which candidate is going to win which party's going to win and i was watching those markets very carefully this week because i don't know if they were similarly oxygen-deprived uh in the presidential election or maybe there was too much uh air in the room i don't know um we had we had a presidential i mean there was a lot of there was a lot of air out there that was a very noisy debate um so that you know they had the debate and i was kind of looking and saying what do futures markets say i mean people on social media are giving their opinions and pollsters are giving their opinions and pundits are giving their opinion but the thing is if you spout off on facebook or twitter like i do uh or if you answer a question from a pollster which i never do uh i just say take me off your list so i don't know who who actually is answering these questions you don't have any skin in the game if you're wrong doesn't really matter but if you're buying a contract and you're wrong that 64 cent donald trump to win the primary goes down to zero and you're out 64 cents uh or you know more if you you know more than a one dollar contract so when there's skin in the game people tend to have a better understanding of what's going on so i'm not going to get into all the details but what it amounts to is the futures market did not see that as a presidential debate they saw it as a vice presidential debate there was no motion of any significance whatsoever on who's going to win the nomination or who's going to win the general election all of the motion was who's going to be the vice presidential pick so people say ramaswamy won vivek ramaswamy won well he didn't go up in probability of winning the primary and he's not there's not even a contract for him in the general election that's how low the probability is but he is now double the probability of kim scott to be chosen as veep interesting all right well that's something we'll certainly keep an eye on who knew there was contracts out there for all kinds of things uh jerry before we wrap up today i know we're kind of in the calm before the storm with the next round of corporate shareholder meetings and so forth but anything you and your team are watching in that regard related to corporate engagement yeah fall is the time when if people want to take what i think is kind of the most powerful step which is to put your own proposals on the ballots of corporations you can do that you just like if you live in an initiative in referendum state you gather enough signatures you can put something before the other voters like proposition 13 in california a long time ago limiting property taxes well you can do that with the companies that you own if you own two thousand dollars worth of a company for the past three years that's not a lot that's a middle class amount okay middle class people own two thousand dollars worth of whatever fill in the blank berkshire hathaway at&t um uh you know facebook um apple whatever if you own that and you and it hasn't gone below two thousand dollars in the past three years you can actually put forward a proposal now don't fight against it but you have a good chance of winning and then you can put questions before them uh we're looking at putting questions that involve situations where companies have just severely risked their brand for instance target comes to mind as a as a target that have engaged in a kind of um edgy marketing which seems to be more about culture war politics or trying to pander to be cool or hip rather than actually running an operating business we think that's an area that these corporations really need to speak to uh or if you know after the um reversal of roe versus wade they came out and said oh well we'll reimburse for interstate travel for abortion but they don't reimburse for interstate travel for adoption that seems discriminatory um and um they're you know they're really liable to litigation on that and they need to take those risks seriously rather than just at the drop of a hat go with the cause of the day putting out a tweet uh saying oh abortion is a fundamental human right uh the ceo bimio did that so i asked her about it at the annual meeting and she said i never said that well she did and i found that i found the linkedin post um and then asked uh by what standard is abortion a universal human right it isn't in the old testament it's not in the new testament it's not listed in the declaration of independence it's not listed in the constitution it's not in the magna carta it's not in the u.n declaration of human rights and even the supreme court even under roe they didn't call it a fundamental human right and they've even reversed roe so they sure won't so by what authority do you say it's a fundamental human right because if you don't if you can't say that with authority then you shouldn't say it at all with shareholder money wow wow and it just underscores jerry the opportunity that everyone has as they deploy capital as partial and percentage owners of companies to express their values and it actually makes a difference and when you update us on all that's going on in this we get to see how it actually makes a difference so thanks for being on the job jerry and for all the great work you're doing and for bringing us up to speed on the latest on the economy today god bless you my friend god bless you all right that's jerry boyer our resident economist he joins us each friday faith and finance live is a partnership between moony radio and faith let me say thanks to my team jim amy tahira and josie you have a great weekend we'll see you next week bye