Now we gotta talk about what the former CEO of not just Home Depot had to say, but the former CEO of Chrysler and GE power Yeah, three-time CEO all the same person. And what did he just have to say about what might be coming to the U.S markets and U.S companies. Well take a listen over here because uh, it's something to pay attention to and buckle up for. You know, I'm seeing inventory bills.

uh in a lot of the businesses both public and private. You know you remember when we spoke in 0789, there was singular focus on the banks, right? Their meltdown took everything down. today. the banks are doing great, but now we have this mixed messaging: Retail's not doing so well.

Banks are doing well. Transportation is up 13.9 percent over the last 12 months I think we're We're in a very complex environment. and of course, this debt issue only adds to that. It adds to the certainty of uncertainty what what's going to happen.

And again, Mark's point about a lot of the small Middle Market companies that are under tremendous pressure with debt. I Think we're going to see a lot of bankruptcies like Bed Bath and Beyond We got Walmart not only laying people off, but closing stores. We got a lot of Accenture laying people off. We got Amazon closing distribution centers.

So I think there's a tremendous mixed message and and the complexity with which we have to deal with this one is different than any I I have seen in my 52 years. Neil All right, Um, on that I Hope you're wrong. You can look at that same Trend And it's one of the reasons why you have a majority of investors still very leery about the market. That could also be an opportunity.

Um, that this is as low as we go and things will turn around because so few are optimistic. Having said that, retail sales did fall more than expected. down one percent X Autos Down eight tenths of a percent slowest growth we've seen since uh June of 2020. I I'm wondering what you make of all of this because on the one hand, uh, you could talk about that.

You know, giving consumers second thoughts about spending. We don't see much evidence of that because their flights are booked and airlines are saying they're very optimistic for a busy summer travel season, restaurants are packed Walt Disney World Their site went down as people were booking. Walt Disney World Vacations So that doesn't seem to be a worry, so there does seem to be a disconnect here. What do you make of that? Yeah, no.

I I Think you're spot on. Neil I Mean, if you think about transportation again, uh, it's up about 13.9 percent year over year. If you look at bookings, it's up tremendously. If you look at our hometown, uh, you know company here Delta is having, uh, you know, tremendous bookings.

Uh Ed Came on and talked about the future. Hospitality has been one of the biggest job creators uh over the last couple of months that you and I have talked about that. but then again, you look at retail and I can just assure you that we're starting to see more cancellations and leaving us with bigger inventories that we're going to have to try to burn off or we're going to have to Discount to try to get those moved. So again, it's It's very mixed messages here and and you talk about Auto being up and again.

Now we have this Administration trying to tell the I'm gonna pause for a second. oh we got like 20 seconds left. but I want to talk about this? Mixed messaging is exactly what we're seeing in this sort of: Tale of. Two City Style recession where yeah, some people are getting screwed.

Subprime Auto is getting screwed. People are getting their cars repossessed. Guess what happens Then they can't go to work, can't go to work. What happens? They got to cancel their their Magic Kingdom visit.

so some of that is happening. Yeah Amazon distribution centers and Walmart they're conducting layoffs. A lot of these companies way over hired, way over hired because it was so hard to hire people. so it's easier to hire a bunch of people and then fire.

Now those people have to go find new jobs. Now what's actually really interesting about firing people is you might initially think oh my God that's horrible. But the reality is, if somebody is not productive at a job, the best thing the company could do is fire them. The reason for that is twofolded.

First, let me say the impression: The impression is oh no. Evil Company Fired somebody. Oh no. That means GDP is going to go down because that person has less money to spend, right? Well, that's the impression.

But that's generally not the reality because what actually happens. Let's say that person works and produces a hundred dollars of productivity a day and gets fired because they're paid 300 a day and they only produce a hundred dollars of productivity a day. Well, then they get fired. Now they go.

They don't create a hundred dollars of productivity a day. So it's like, oh my gosh, the economy lost 100 of productivity a day, right? And the company's saving 300 a day, right? No, the company now has three hundred dollars to spend on something else that might create 300 of productivity and that person probably doesn't stay unemployed. They go find another job. Maybe they're not getting paid 300 anymore.

Maybe they're getting paid 200, but they're actually providing 200 of value. Now You actually have a net. GDP Boon I Mean, think about it. Firing sounds so bad.

But when you have firing and still have employment growth, it's actually freaking awesome because now the company that fired has more money to spend. Some other company picks the person up and properly values them. hopefully. And if they're not, then they get fired again in the future and they're just a revolving door.

Then maybe the the you know the finger points at the individual and out of the companies. So so now all of a sudden that person gets another job and what happens GDP actually goes positive because both the company that fired and the individual now introduce more productivity into the world. Now the question is, well, what happens if there are no more jobs to get? But that's not actually what's happening in this economy. Yes, that could happen in some economies, but it's not what's happening in this economy.

What's happening in this economy is yes, you are seeing people get laid off of Consulting People get laid off of tech and guess what they're having to do they're having again Lower wage Tech or consulting jobs or go into a different industry. Yeah, that might seem like it's a terrible thing, but again, if you're paying a software engineer two hundred thousand dollars for fifty thousand dollars of productivity, they are net. They are creating a deadweight loss of 150 000 of potential economic power. The company saves the two hundred thousand dollars.

Person gets fired, Person goes and works a hundred thousand dollar job which is a fifty percent pay cut, but actually creates a hundred thousand dollars of value. Now you have a hundred thousand dollars of value here. 200 000 of value. Here, you actually have more GDP output.

So layoffs are not actually a horrible thing. As long as the con the the economy is still functioning. which right now it appears that it is Really layoffs are just a sign of what I like to call a re-jiggering right? It's kind of like companies did a bunch of this and then they're like, all right, we got too much. Let's do a little bit of that all right Now we're good.

We're good over here, right? Or you bring on people who actually help create productive, productive margin. You should always as an individual. Whether you're an employee or you're a self-employed or whatever, you should every single day be asking yourself how much value did I generate today and then compare that to what you're being paid. And if you got paid, let's say you're you're working at Walmart Okay And and your job is to do inventory.

And you took 17 bathroom breaks and yeah, sent 200 messages or whatever on your phone and you did maybe an hour worth of inventory work. and maybe you're really good in that hour. Maybe you get paid 20 bucks an hour, but you did 30 dollars worth of work, but the company paid you 200. Well, the company didn't actually pay I Mean they may have paid you 200, but it cost the company probably 30 percent more.

So it probably cost the company 260 dollars that day for you to basically do thirty dollars worth of work well in such a case, it is in the best interest of the company to do the hard thing and fire that person who's not being productive. No, there's always the question of like, well, was the person not trained or are they just a misfit, right? Like, maybe that's not what they should be doing. Maybe they're not motivated for whatever reason. So this idea of layoffs always being bad is very flawed.

It's actually very healthy for businesses to go bankrupt and people to get laid off because it's a wake-up call that you can't keep doing the same thing expecting different results. What is it? a Bed Bath and Beyond Never adapted to really getting into e-commerce Best Buy Did Best Buy and and Bed Bath and Beyond were both on the same path. They were both trending towards bankruptcy. Best Buy is like we need same day pickup.

We need to have the best customer service possible. We need to have a better return policy. We need to have better. CX We need to have better availability of Supply Our inventory management system has to match.

That is what's in the store has to actually be reflected online. And what's reflected online has to actually be on the store. And we got to get our ship together. And they did.

And now Best Buy's killing it. whereas Bed Bath and Beyond's not. They deserve to go bankrupt. Some businesses don't adapt and they die.

Adapt or die. That's Evolution This is a very normal part of the business cycle. So when I hear about like oh my gosh, Bed Bath and Beyond and they're going to be more bankruptcies good I want more tumor? what they're going to be able to buy going forward, right? You know, with electric vehicles? Yeah, to get more and more of those in, but they went what? six out of 10 sales to be that? uh, just another few years? I Don't know if we're ready for that because they're just about one out of 20 sales right now. Uh, all right.

Bob Thank you very much. Hope you have a safe weekend my friend. Very good seeing you again. Thank you Neil very much you too.

All right. So that uh, that addresses that. a little bit more on layoffs here, you know. Mr Ops are uh says here Kevin doesn't take into account the period of time the replacement worker is unproductive.

Who cares? That's called business. You have to wake up and realize that if you run a business and there are unproductive people, well, hopefully you could train them better and you could try to train them better. Anytime you train people, there's going to be a A A A phase where they are less productive right? So you have to think about the life cycle of of basically, uh, somebody had a job, you started a job. They are extremely unproductive when they start, but they have very high potential.

So let's say you pay somebody a hundred thousand dollar salary the first six months where it's their first time doing stuff, They're extremely unproductive and they generate twenty five thousand dollars of value. But then in the future after six months, they generate 200 000 of value. Well, first of all, that it would be incumbent upon the company to eventually give the person a raise. right? 125 hundred fifty thousand dollars.

And now all of a sudden the company is starting to get paid back for the training period, right? But now it's net net for both sides. the employee gets paid more and the company makes more money. But this idea that oh well, you know, we keep giving second chance. Look, I'm all for two chances, three chances.

But at some point people are not a fit for a company and they gotta go. So you know, I'm a big fan of hey, you know, six months, You know, within six months, you know and then it's time to trade them in. So I mean you know it. Sometimes people are like, oh, that sounds so insensive it's like that's hello.

That's good for both sides. If a person's working for a company and they're not productive for whatever reason, training, culture fit. Uh, the type of work, Who cares? They are affecting the US economy. They're They're sandbagging the US economy because money is being wasted.

We don't want waste in the economy. America is so great because we are so operationally efficient. Because you can get fired, you are motivated to work harder, Everybody's not protected by a union and it's not impossible to fire people or we have a lot of right to work states like even California is one. Imagine this one the like.

Literally I would say the most liberal state in the country is a right to work state. Which means you get fired at any moment for any reason. Well, maybe not any reason. But uh yeah, that's uh uh.

You know that's uh. that's that's in my opinion. How many people have 200 000 salaries and a lifestyle set on a 200 000 job and are laid off and can only get a hundred thousand dollar a job will not lead to higher GDP Well, it's a fair question. so let's analyze this.

First of all, if you have a 200 000 salary and you're living a 200 000 life and you're at risk of potentially getting laid off because you're not actually providing more value than you're hitting paid or you can't get a replacement job at that sort of salary, That's your own fault. Sorry. That's a harsh reality. That's your fault.

That's not the economy's fault. That's your fault. That's why I Mean it seems like you still have what forty percent of people living paycheck to paycheck making six figure salaries. It doesn't make sense that that's not sustainable.

So the reality is, people making two hundred thousand dollars should be aware that. Okay, well, what are my other options if I didn't have a job here and and my lifestyle should be conducive to to to that level of value. So that's always a risk, so that individual should always be prepared for that. I Mean that's just the nature of of the world now.

Uh, if the company that was employing them at two hundred thousand dollars now potentially has to lay them off and uh, and then doesn't hire a replacement worker and their earnings go down because that person has their lifestyle cut in half, our earnings going to go down. Absolutely. Could that lead to a recession? Absolutely. That's what recessions are.

So I'm not saying GDP is not going to go negative. Don't get me wrong, I'm not saying it's not I'm just saying in the long term, it's healthier in the short term. Absolutely, it could be recessionary. In the long term, it's a benefit to both the employee and the company.