WALL STREET WRAP-UP WITH ANDRÉ LABORDE — Fri., Sept. 22, 2023 on WYES

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Street Wrap-Up is supported by Bamboulas. Featuring live music and coming soon, tapas and wine upstairs. Bamboulas, the heartbeat of Frenchman Street.

This

week on Wall Street Wrap-Up, lights, camera and maybe action? The strike between the Writers Guild and producers are close, supposedly, to making an agreement.

The

Federal Reserve met this week on interest rates, so how much are we going to be paying on interest from credit cards to home mortgages? And according to Jay Powell, are there maybe more interest hikes to come?

The

Federal debt hits a new milestone, and not in a good way. We'll tell you why.

And

does life imitate art? As in the HBO series Succession, Rupert Murdoch steps down as chairman of Fox News Corporation and appoints his son as heir apparent.

The

UAW strike is now into its second week, and today UAW President Sean Fain increased walkouts to now including GM and Stellantis parts and distribution centers in 20 states. So tonight, we're going to be talking about the UAW strike with the car guy, Ronnie Lamarck, founder and president of Lamarck Motor Company. He is, how is he coping with supply chain issues? And are we really able to go all EV by 2032? That's only nine years away. Ronnie Lamarck, well, to some, he's the most ordinary man. I'm Andre Laborde. We've got these stories and more. And it's Friday, and it's time for Wall Street Wrap Up. Welcome to Wall Street Wrap Up. It's Friday, September 22nd.

Well, this week, the Federal Reserve held their scheduled September meeting and paused interest rates, but made certain to warn of maybe more rate hikes to come later in the year. Well,

the

next two meetings for this year will be in November and in December. Now, that holds interest rates that the Federal Reserve charges banks, not us, but the banks, at five and a quarter to five and a half percent.

And

this week, the debt warning. Government debt reached a new high. The government hit a brutal milestone when the national debt hit $33 trillion for the first time ever. That's $10 trillion more than just before COVID hit in March of 2020. Now, to pay the interest on this debt, the government sells treasury bonds, making it enticing for you to continue to keep buying bonds, which the government will then pay you back in either two, five, or 30 years with interest.

The

problem with that is there's more interest accruing on the national debt, and it's growing.

So,

with the debt rising and interest rates heading north, interest rates are going to be higher for a 30-year home loan just one year ago, from 4.3 percent to now to just under 7.5 percent. My friends, that's a 70 percent increase. You want to finance a new car? Interest rates are now at 7.8 percent. And one year ago, it was at 4.8 percent. That's a 62.5 percent increase in financing in just one year alone.

So,

to put this, as individuals, that's $98,500 for every man, woman, and child in the country. But we also know that not every man, woman, and child pays taxes. So, for every taxpayer, that's almost a quarter of a million dollars, $250,000 for every taxpayer.

Well,

how did our money do this week? The Dow Jones, the S&P 500, and the NASDAQ all ended negative for the week. Top stocks of the week were Ford and Broadcom.

And

this week was the third week in a row, with the S&P and the NASDAQ all ending negative. This week, the Dow Jones closed that down just over 1 percent for the week. And the S&P 500, they closed down this week almost 3 percent for the week. And the NASDAQ, they closed today down almost 3.6 percent for the week.

Home

mortgage rates have hit new highs for trying to finance that new home. A 30-year mortgage this week has now climbed to just under 7.5 percent. Now, this is a 6.5 percent increase in the last three months.

And

this week, new data came out from the National Association of Realtors. The median price of an existing home rose to $407,000. And that's up almost 4 percent. Realtors are saying that supply needs to double to moderate these price gains. So today, a median price home of $400,000 is now going to cost you an additional $134 per month. And that's since June 1st of this year. Analysts are predicting we'll be seeing 8 percent on a 30-year mortgage in the very near future.

The

UAW strike is now entering its second week. And today, UAW President Sean Fain is calling additional strikes in 38 parts and distribution centers in 20 states around the country. Now, these will be in the GM and Stellantis factories only and not in Ford. UAW President Sean Fain has said that the big three automakers have made record profits from selling internal combustion or gas-powered vehicles. But the government is mandating they switch to electric. So, the big three automakers, Ford, General Motors, and Stellantis, which is the old Chrysler Jeep, they're pouring money into electric vehicles at a total of $77.5 billion of research and development.

Now, that's not counting the federal government or our tax money paying subsidies to car companies for converting from fossil-fuel-powered automobiles to electric.

According

to a recent poll, almost 2,000 responded that 88 percent poll that thought it would be leading to less jobs. Well, you can't get 88 percent of the public to agree on what day of the week it is.

And

President Biden has made it clear he wants the automakers to be selling half of all new automobile sales to be electric in just over six years and increase that by two-thirds to 2033. According to Kelly's Blue Book, just 6 percent of new vehicles are electric, and almost all of those, they're Tesla.

So,

we want to know, how does the dealer who talks to the public first, how does he feel? So, we went to that car guy himself, Ronnie Lamarck. Hi, Ronnie. Welcome to Wall Street Wrap Up.

Hi, Andre. It's a pleasure to be here.

You've been in the automobile business for over 50 years. And with this strike, normally, I mean, when they've had strikes with the UAW, they go after one automaker. But this is the first time, from what I understand in their 83-year history, that they're going after all three at one time. Is this the worst you've ever seen it?

Yes, because especially just coming out of COVID,

we

had no inventory. Then we've tried to finally get it going, and Wall Street getting it squared away. And now, we have a strike when we're just getting ready to get inventory in. And now, you know, on all three, the economy that the business community, it doesn't include what the dealerships do. Add another $300,000 to that. So, you've got almost a million people affected here. I don't understand why this is happening. I understand everybody should have, you know, a fair amount of money coming in. I thought they always did. Let's reasonably-minded people sit at a table and try to work this out. Let's say go on strike and then hurt part supplies. People, the little nurse at home or the doctor

or

the single mom who needs a part for a vehicle to bring her child to daycare or to bring her to the hospital or whatever, we can't get the parts. That means your vehicle won't run. This is not the way to do it, ladies and gentlemen. Not the way to do it.

As

a local dealer, are you able to call and go, I need inventory at my location now? Or I should say, coming up now since the strike, being able- Because from what I understand, they've got like anywhere between 30 and 60 days of inventory that's stored. But that's around the country. So, how hard is it for you to get inventory?

It's very hard because it's called turn and earn. You've got to sell it to get it. And inventory is primo. And no one can give you any breaks on it. You've got to sell something and you get one in return. And now with all these recalls, you see, that's something I didn't even, you know, we got recalls coming out the wazoo on the products that we try. So, I can't deliver many, many vehicles like some trucks. I have the Navigator, I believe, or the Aviator with the Lincoln because I'm a Ford Lincoln and a Mercedes dealer. So, we have a lot of vehicles that we can't sell due to recalls, whether it be backup lights. So, now they made that, excuse me, backup cameras

or

making that an essential part of a vehicle prior to that it wasn't like two years ago. So, not having backup cameras, we can't deliver the car, so I can't deliver certain Lincoln products. Andre, it's a lot going on. A lot of, you know, things against the dealer trying to keep people working. Because, you know, I've got 300 employees personally. So, what about all those people? You know, we're talking about the UAW. This guy, he wants to get more money. He wants to look good and all that. Really? Really? Why can't we be reasonably-minded people,

come

to the table and say, this is what I was getting, this is what I'm getting now? Because

those

guys on the strike lines, the ladies and, you know, fellow Americans, and I love them. And I really believe that they should bring home the bacon for their family. But when you, in turn, have those people, the money's going to run out. You're not getting the same pay if you were making a grand a week, you're making $500 now. But they're young, and we're looking, they're looking to, they got a lot of energy. So, with all that energy, let's do it. Let's strike. Let's strike. But they don't understand the consequences of it. It affects everything. Their families, their children, their schools,

the

whole enchilada, I'll call it.

What

we need, I pray,

that

before this thing ever airs,

that

the strike is settled. That's what my prayers are.

To

my understanding, Ronnie, is that the unionized automakers, and I'm talking about Ford, GM, and Stellantis, they're making, the workers on the front line, they're making between $64 and $67 per hour with benefits. The non-union, the foreign automakers are making $55 per hour. And the Tesla automaker is making $45 per hour. So, right there, Tesla is having to pay $20 less than the unionized worker. I'm just curious, as far as, like, making payroll of how you're able to do it, especially having to, they're being forced to doing, making more EVs and selling electric vehicles by, by 2032.

I'm

telling you that this,

what

we're up against, where $45 for electric vehicle, a Tesla, and the numbers you hit me with, with, you could price yourself out of business. I think Fawley said with Ford Motor Company, hey, we applied the numbers that you wanted. I think you said the guy's name was Fane that's running

the

UAW? Sean Fane. Is that? Yeah, if we did that, we would, in the so-called $15 billion that they made during this window,

they

would lose $15 billion plus 10,

because

hard costs. You can't give it all away. You've got to be able to go,

what

the strike is doing,

it's

hurting more and more people than it's ever helping. That's the part. And the media has to understand that it is not healthy. It is not good. They're talking about what these guys are making that's running it. Why don't any one of you or anybody try to run a company like Ford Motor Company? Why wouldn't you pay a guy $20 million? I would, because he's got so much on his plate. It's amazing how many people he has in situations. So don't look at the top guy and say,

oh,

he's supposed to, supposed to get bonuses and make it. And the other people are supposed to make a nice living and go home, safety, security, great benefits. And that's what's on the table. So

they've got to be

careful.

Yeah. And according to, at $65 an hour, which is what the union members are making, based on a 40-hour work week, not counting overtime, that comes to about $135,000 a year that the, that the, the man in the, in the, the, the shop, the union shop is getting. And recently I was watching Mark Fields. Yeah. Mark Fields, which was former CEO of Ford Motor. Yeah. And he said labor

in

making autom, automobiles, labor is the number three between 10 to 12% of when you buy a new car, about 10 to 12% of it is labor. He said, number one is materials. Number two is R and D research and development. And three is the, is the labor. So if you're going to be almost doubling that cost, you're going from a $65 an hour to $130 an hour, because you're talking about benefits too. And for people who've never made a payroll, you know, you just don't have the, the, the hourly rate, you've got healthcare and other things with that, that you're going to be pricing yourself out of a market.

You price yourself out the market. And that was never the intention. What about vehicles that the union people assemble and make, and they make a mistake on even with checks and balances, and we have to fix them here at big bucks. And then if we give them on the warranty, Ford pays us or general motors would pay whatever dealer. So they are that, that is happening as well. So not only are you paying upfront, the union workers, this money, there are a lot of vehicles coming in because of the work they didn't do properly going in that we have to fix here. And now you put that number. It's, it's more than that, Andre. It's a lot more than that. I wish it was perfect, but it isn't.

So anyway, the amount of money that the major manufacturers, Ford, General Motors, and Stellar, I don't even know who Stellar says, by the way, that used to be Dodge. Yeah. Chrysler.

Right.

That's the, that's the old Chrysler. Uh-huh.

Still at it. The old

Chrysler.

They

had to find it somewhere in the boonies because I think the Italians bought it back when, when, when they went busted and General Motors went busted in 09, they went bankrupt. Yeah. And then, you know, by the way, we lost 60, 80 billion dollars back then in the

United

States of America and General Motors and Chrysler didn't pay them back, by the way. So they just ate it. But anyway, but Ford didn't go bankrupt. Just to let you know, he did not go bankrupt. They, we, we footed the bill. We stayed.

We,

we fought the good fight. So

look,

Andre, this is terrible going from COVID

to all

the problems getting our chips to get vehicles running and

hundreds

of thousands of vehicles that couldn't get off the assembly line because we didn't have the chips. And then, and then the chip factory goes, burns up somewhere in, uh, around where they make KIAs. But KIAs weren't affected. The foreign cars weren't affected. The American cars were. And, and I know our leadership is, is good at, and you know, at the levels of Ford, General Motors and, and Stellis is that they would in turn be fair with the union worker, but let the, uh, union worker know that the buck doesn't just stop with him. There's a lot of expenses and costs involved. Now, if you want to do a profit sharing kind of program, see how you do after a year or two year, three year window.

And back into some extra monies. I like that, but they want it all up front.

When

you're in Detroit, you, you must be a union shop, but a lot of the plants around the country, and I'm talking about foreign cars, Toyota, um, and also, um, Tesla, as we're talking about are non-union, can Ford, GM and Stellantis, um, move. I mean, if you remember, uh, in new Orleans, Freeport, McMoran moved their headquarters out of new Orleans, uh, Boeing, Boeing moved their headquarters out of Chicago. Um, and, uh, Citadel moved with Ken Griffin owned their head, moved their headquarters out of Chicago into Florida because of the, the political climate of

between

crime and expenses.

What about Musk,

California to Texas? That well put, well put.

I mean,

hey, all you Tesla workers, if you want to make more money, go over to Ford, because right now they're making 20 bucks more than you anyway.

The,

another part is that when it comes to electric vehicles, um, the government is saying that, uh, they want by 2032 to have two thirds of cars being, new cars being sold to be, uh, EVs, electric vehicles. Well, we're in the back, Ronnie, we're in the back half of 20, uh, 20,

23

right now, you know, can't

make, so

they're going to have to, no,

you

can't make,

and look, look, look, that, that is,

I

used to say a word on the street, you know, there ain't no shot. Okay. Well, here's the thing.

Can't,

what can happen is the hybrids. That is the way to go where you have electric and you have gas and diesel. And as you're driving the gas and diesel vehicle, ladies and gentlemen, it makes electricity to give you more. You're not going to be stuck in some, uh, place where you're trying to refuel with electric and the, and the lines around the corner, or you can't, it will ruin your trip. And you guys, y'all know it. Your trips have been ruined. You couldn't, you thought you had your plan set up. I know so many, and they went, oh my gosh, it didn't even exist. Or they didn't have the power to give me this.

So they had to go get gas and diesel to run the generators, to get the electric vehicles running. Think about it, man, this is all cylindrical.

It's

moving around.

Ronnie, you know what I'm thinking of?

Ronnie, I'm something I'll think. How many times, and I'll speak for myself, maybe you've done this. If you've ever gone to bed and forgotten to put your, your iPhone charger on, you get up in the morning and you go, oh, I forgot to charge my phone. Well, that's okay. I'll charge it when I get into the office. But if you forget to plug in your car the night before, if you fall asleep in front of TV, you know, and you go, oh, I forgot to charge my car. I got to call the boss and say, I can't get in because I forgot to charge my car that throughout the night.

That's a fat domino song. That's a fat. I'm

walking.

Here's indeed. I'm talking about you and me. Yeah, you definitely, you can't, whatever is great. You're right. Where are you going? You're going nowhere. You better call Uber.

Yeah, right. Wow. You're right though, but hybrid is probably the best way to go. But I, is it my imagination, but I feel that, that the three big automakers, Ford,

GM

and Stellantis, they've got, in a way, have a gun to their head because they're not supposed to have, they want so much to have the fossil fuels taken out so much, they want to go all. So, yeah, and I agree with you.

I

think by 2032, having right now, 3%, from what I understand, 3% of sales are EVs. Well, that means you're going to go in eight years from 3% to 66%. The math doesn't

work out. And listen,

Tesla and those guys have a niche market

where

they're, they're selling people around this country and those people have serious vehicles, whether a Ford truck that can get to do whatever they have to do, and this other little fun little vehicle, this little electric vehicle that was built in 2013, it's a 2023 because he puts a chip or

a

program in it, same lens, same interior, same wheel, same, same, same, same, same. And the American people, or the people out there that are buying it, so they're accepting it, but you won't buy a Ford from me unless it's model change, or you change the hatchback, or you change the interior, or you did the components of the motor that are different. And listen, with electric vehicles also, Andre, there's going to be a lot less workers working because there won't be any oil and filters anymore. I can't say Earl, guys, it's oil and filter, whatever you call it. Anyway, so they got to, I'm from New Orleans.

Anyway, when you, you're going to have a lot of people that makes a living, that can't make a living anymore. Like, you see all these little places that you're driving down, down the street, Mighty Muffler, whatever, they, they're out there, you know, their bread and butter is all in filters and changing, that's not going to exist anymore. You're not, you don't need an exhaust system at

Mighty Muffler,

it's electric.

That's a good point, Ronnie, because the, the big three autos, automakers are being forced to convert to electric vehicle. Well, you don't have transmissions and you don't have the parts, as you said, and the EVs, but the unions, and I think the, and the unions know this, I'm Sean Fein, the union leadership knows they're not going to need it. But that means you're going to have to keep excess labor on hand.

And

I mean, you just mentioned that you, yeah, you employ 300 people, you've got to make a payroll every week of 300 people. Well, how do you, how do you sell an automobile while keeping the same amount of people on staff that you don't need that amount of people while trying to make it a battery operated electric vehicle?

That's facing the people now that in, they're in negotiation to say, wait a minute, you want a long-term contract?

Where

are

you

going to be in 2032? I'm not going to need, I need one half of you now. If I have to do all electric, I don't need the people to do all the basics of a vehicle now with oil filter, transmissions, a battery that is, it's so huge now.

And

when you think about it, how you like to have ops knocking your door, come to pick up that battery. What did you, what you, what you're driving? Well, I got this truck. Well, who's going to help you? Because it weighs a thousand pounds. What I'm trying to say is it's changing the whole market. It can't happen. And look,

the

batteries lose its percentage of power as it's sitting there. Yeah, people know that. Your batteries, check your flashlights. The one that you set up for the hurricane season that you did last year, you go to open up, it's not even lit now. So batteries just go bad. I believe it's great to have clean air. I, I think it's magnificent, clean, it's there. I know we're moving in a really quick move.

I

know God Almighty has created us and moved us on and we're moving so, so fast, but can somebody just say, stop, like Jimmy the Rainer used to say, stop the music, stop. Let's all take a deep breath. Where are we going? Hybrid is the way to go. Electric, my opinion. No. Musk

is

going around with Tesla. Congratulations, buddy. Will you be here in 10 years?

I

don't think so. But also, Ronnie, when it comes to batteries, living in Louisiana, Louisiana, Texas, oil producing states, we are self-sufficient. And now we're not drilling, so we have to get an export from Saudi Arabia, but we have the oil here to be self-sufficient. With batteries and the components that make the batteries, I'm talking about lithium and cobalt and other things that many times they come from Brazil, China, Russia, Africa, other areas that we would be then be beholden. Are you familiar on would we be able to create these type of components for batteries to be able to make the kind of numbers of electric vehicles that the government is wanting?

No. The cost, the real cost is much, much more than,

I

think we must have two to four million service stations around this country. You can know that you could take a trip and you're going to get gas, whether it be gas or diesel, and you're going to drive. And look, we've done a great job in the 53 years I've been in the business from getting eight miles to the gallon to 50 miles to the gallon. That is magnificent, okay? We have come a long, long way, but all of this electric stuff for somebody saying, oh, I think I'm going to go electric. Wait a minute. It's, that is not the way to go. We're not ready for it. We're in, what that, listen, we need leadership and we need it now.

I

come to work every day

with

a good attitude for my people to make a living.

Hey,

look, a lot is going on. It isn't just somebody at a UAW say, we're going to strike and get it from the people making all the money. Everybody's not making all that money. You're wrong, man. We're making a living. That's the difference. We're making a

living. Ronnie,

I

could talk to you more. We've only scratched the surface. I hope you come back. We've had a lot of fun.

Andre, to be invited on your show is number one. It's a great honor. And I pray by the time it airs

that

the strike is over.

But

let's sign something and let's move forward.

I

couldn't agree more. Ronnie Lamarck. Hey, if you've got a question, maybe a comment about the show, we'd love to hear from you. Make it concise, make it piffy, and write us at andreatbenacapital.com. So let's take a look at the markets heading into next week. But before we do that,

what

was the longest strike in UAW history? We've got the answer, and it's coming up.

What

was the longest strike in UAW history?

The

Kohler Corporation. That strike lasted seven years, from 1954 to 1961.

Well,

Rupert Murdoch is stepping down as chairman of the media empire that he spent seven decades in creating. It was a news juggernaut. Best known for starting Fox News and also owning the Wall Street Journal, he'll be succeeded by his son, Lachlan Murdoch, who already serves as the CEO of Fox. But after November, he'll be including that title of chairman of the board.

And

the markets took a beating this week. So are we expecting more of that beating in September? And how about into the fourth quarter? Are we heading into a recession? Next week, we're going to be talking with J.P. Morgan's Terry Dufresne. Terry is the managing director and head of investments at J.P. Morgan's private bank. Terry Dufresne will be coming up next week. Well, that's our show for this Friday, September 22nd. Our thanks to Ronnie Lamarck, the car guy, for being with us tonight. But always, we appreciate you for allowing us into your homes this evening. Have a fun weekend with the ones you love. I'll see you next week. And remember, if it's Friday, it's Wall Street Wrap Up.

I'm Andre Laborde. And also remember, money never sleeps. Good night.

Wall

Street Wrap Up is supported by Bamboulas. Featuring live music and coming soon, tapas and wine upstairs. Bamboulas, the heartbeat of Frenchman Street. Featuring

live music and coming soon, tapas and wine upstairs.