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[00:00:34] Chris Audio: Welcome, folks, to our Wellian Optics, a podcast by Allio Capital. I'm one of your co hosts, CEO, Joseph Gridante. I'm here with my co host, Christopher Morgan. Hey, everybody.

[00:00:45] Joseph Audio: AJ, why don't you introduce yourself?

[00:00:47] AJ Audio: Hey guys, A. J. Giannone, C. I. O., Chief Investment Officer of Alio Capital here for another great episode with you guys. Looking forward to it. And, I see Tyler's there as well. Hey man, how you doing?

[00:00:56] Tyler Audio: Yeah, hey everybody, I'm Tyler Goering, I'm, the Chief Risk Officer here at, [00:01:00] Alio Capital and looking forward to another good episode as well.

[00:01:03] Joseph Audio: Yeah, we're going to talk about bold predictions for 2025. A lot of changes going on. And,obviously a lot of eyes on the, the geopolitical climate right now. I think,we've never seen an administration like this, coming in,not since, what was it? I think it was, it was Garfield, right?

[00:01:21] Joseph Audio: Was it Garfield that won too? Or Cleveland that, won a second presidency after, which one was it?

[00:01:26] AJ Audio: That's all you, Chris.

[00:01:28] Joseph Audio: I'm fact checking live here. One second.

[00:01:30] AJ Audio: Live fact check.

[00:01:32] Chris Audio: It was Grover Cleveland. I am

[00:01:34] Chris Audio: Well done. I would have been embarrassed if I got that wrong, but Well done.

[00:01:38] Joseph Audio: Yeah, so it's interesting, and I think, there's a major, middle class, working class coalition going on here. You got some Democrats in there, you got Tulsi, you got RFK Jr., you got pro union Republican administration, a pro tariff, a pro food regulation Republican administration, but then you got these, these idiosyncrasies like Doge, also on the agenda, [00:02:00] with Vivek and Elon Musk.

[00:02:01] Joseph Audio: What this is going to look like, nobody knows. And then there's also, the global climate, the backdrop around this and monetary policy is going to have a huge impact on things. yeah. What do you guys, what are you guys thinking? What's the early take?

[00:02:12] AJ Audio: I'll tell you what, I'll lead it off here and then you guys can just poke holes in my arguments, and we can take it from there. But, I think this is a really unique period for us. Like Joseph mentioned, there's been a decisive shift, and to your point, Joseph, about the coalition of working class and middle class, Voters leaning and putting their support behind what was traditionally like the party of big business, but now is clearly, the party of the everyday working man, putting their support behind these key players in politics and business who have made some really lofty promises and goals.

[00:02:49] AJ Audio: To really re energize the growth engine, of the traditional, American exceptionalism. and I think that's going to be the key determinant of whether, we really [00:03:00] have a continuation of the bull market in markets and risk assets that we saw through 2023 and 2024, because fundamentally, we're looking at an environment where, risk assets are priced to, the higher end of the valuation spectrum, both on an equity, perspective from looking at things like forward PE multiples, as well as, credit spreads on the, the fixed income, corporate and high yield side.

[00:03:25] AJ Audio: when you look out at these available options for assets and where we go from here, I think, there's alevel of optimism and bullishness that's persistent. and I think that's reflective in the asset prices, but what's going to define, if we can continue to ride this bull market is the execution is, can the administration that comes in deliver on some of the pro business and pro growth agenda items that they've laid out and does business get behind them in that sense?

[00:03:50] AJ Audio: And. push these things over the goal line and then execute, with the wind in their sails, in that way. So I think that's really going to be the key determinant. Personally, [00:04:00] I'm bullish on that case. I think, we're going to have another. Really positive year this year. there's always, the chance that things fall off the rails for some unforeseen circumstance, but given the weight of evidence, between the health of both consumers and businesses from both a balance sheet and income statement perspective, the primary driver of economic growth, which is consumption in this country is still, firing on all cylinders.

[00:04:25] AJ Audio: You've got pro business agenda on the docket from the government perspective. when you think about, where do we go from here? I think you're going to see continued investment, at the corporate level into new technologies and the AI boom is going to continue. nobody wants to be left behind there.

[00:04:40] AJ Audio: So there's this massive flow of money into productive enterprise. Both at the corporate level and a massive flow of money on the consumer level into personal consumption, home improvements, renovations, all the kind of, big ticket items. buying dishwashers and kitchen renovations and all the supplies [00:05:00] from it at Home Depot and Lowe's and all these kind of companies.

[00:05:02] AJ Audio: these are really tremendously powerful forces, and I think they're going to overcome, some of the. maybe loft evaluation issues that you'd look out and see right now. right now, I think we're poised for a fairly positive 2025. Excuse me, all things considered.

[00:05:19] Joseph Audio: Yeah, I definitely agree with that on the risk on, assets and AI, but I think the key to success, of this administration is going to be. Keeping its promise to the working class coalition. It's going to be the pro tariff agenda, right? Because you saw the way big media and big business came out attacking Trump on tariffs, trying to say that they're inflationary, disregarding the fact that he wants to deregulate and go back to energy independence, which is probably The most deflationary policy that you can pursue because what impacts inflation, more than, energy prices other than, central banking, which isn't going away.

[00:05:52] Joseph Audio: I think,the big business in Washington is going to throw out some curveball stops. I think, they have a razor [00:06:00] thin margin in the house. I do think they will get a fiscal bill passed. For But I don't think they're going to be able to get it passed in one big bill.

[00:06:09] Joseph Audio: I think there's going to be some opposition, to some of these, cabinet confirmations that we're going to see some surprises in the Senate because you just, it's so dirty in Washington. and we don't know who it's going to be at this point. And so I think that's the key. And I think, could take longer than expected.

[00:06:27] Joseph Audio: And,I just think the overall success, right? looking at 2025, but beyond of this administration is going to be, Getting back to, real wage growth. We saw real wage growth in Trump's first presidency, right? He kept his promises. but is there a traditional Republicans going to really truly go along with this agenda?

[00:06:46] Joseph Audio: It looks like they are in the House, but you just don't know who these, lobbying firms are going to get to and who's going to, pull out the stops at the last minute. And so,Doge. They don't have any actual authority, so they need [00:07:00] Congress to go along unless Trump does stuff through executive orders.

[00:07:03] Joseph Audio: so there's a lot on the table, but I do think generally for markets. For markets, things are looking positive. The 1 thing I see in the backdrop here globally. 1st, we should say there's monetary policy. I do think that I don't think the Fed is going to cut rates anytime soon in 2025.

[00:07:21] Joseph Audio: So I think that's going to be something that's gonna uh, potentially, a downward factor on markets, right? I think, it's gonna take some time I don't think maybe until they take Powell, out of that spot, because right now, if they were to cut rates, it would be inflationary, they're still not there, they're getting closer to the target, but, they're still not there, and we saw when they cut rates last time, inflation took off again.

[00:07:42] Joseph Audio: I don't think they should cut rates. I think Powell's making the right move there, but I think Trump will remove him as soon as he can. And I think in the backdrop of all this, you have the China Taiwan situation. China has come out and said that they're going to reunite with Taiwan.

[00:07:54] Joseph Audio: And I think they're feeling some pressure given their own issues with their economy. So I think that's in the backdrop [00:08:00] here as,a dark horse that could undermine some of these,some of these growth, plans that Trump has. what do you think, Tyler?

[00:08:07] Tyler Audio: Let's go off your point politically. I know the Republicans hold a very thin margin in the house, but, I would say that Trump has definitely emerged as the true power broker, especially on the right side of the fence. And I think that,you increasingly need his blessing to succeed. So I think any kind of rhino Republicans that may stall some appointments or.

[00:08:30] Tyler Audio: prevent some of the legislation he wants from going through, I think he would be able to overcome those pretty efficiently. it seems if you tie your horse to Trump, that's a winning bet right now. So anybody in the House or the Senate that may be wavering, I think he's got a little bit more power to throw around this second time around.

[00:08:46] Tyler Audio: Because it's obvious the American people, they want him back. And that's pretty rare to see with U. S. presidents, especially having a term off. I think this time around, he's got a little more weight to throw around and may have more success getting his policy agendas [00:09:00] and his appointments through.

[00:09:01] Tyler Audio: but that's just my take.

[00:09:03] Chris Audio: I totally agree with that, Tyler. Trump has come back with a force. He's, I don't want to say centralized power, but he's coalesced power around him a little bit stronger than he had done his first go around, and everybody knows, what to expect now, and Something to expect is one of the powerful forces A.

[00:09:22] Chris Audio: J. mentioned, which is American exceptionalism. For the first time in a really long time, we have an administration coming in that is excited about bringing production back to the United States, making us central core of the world's economy again. And they have a huge opportunity to do that. Business friendly policies.

[00:09:41] Chris Audio: and that ties things like Taiwan. If they allow, chip manufacturers to, build more factories here, then our reliance on Taiwan will go down. So the conflict or any sort of a flashpoint there will hurt us, be less of a black swan events to our markets. But I think it's really exciting.

[00:09:58] Chris Audio: And then we do have business friendly policies [00:10:00] popping up in other parts of the world too. we see the Trudeau stepped down. We've seen France and Germany. kinda go away from their left-leaning ploiticians, which I think is going to be a really really big boon for our, our markets here at home 

[00:10:13] AJ Audio: Yeah, I'm glad you, you brought something up there, Chris, which was the focus on industrial production and focus on production really more broadly. I found a chart this morning when I was going through my morning, reading that showed effectively a decoupling of. Trend lines between US GDP, and consumer spending with US industrial production beginning approximately right around the time that China joined the World Trade Organization in 2001.

[00:10:39] AJ Audio: correlation doesn't necessarily imply causation, but I think here the weight of evidence leans towards the fact that, effectively by offshoring all of the marginal production required to continue to have US growth from 2001 onward. we've effectively handed China as a nation its share of those profits and now, [00:11:00] we're in a situation, Joseph, like you mentioned, where, there's a bit of a black swan risk from China, getting its back against the wall and being pressured from, forces internally to have to go and make a move on Taiwan, which, for all of the critical dependencies that flow through the advanced chip production fabs on that island, specifically with, respect to the U.

[00:11:21] AJ Audio: S. companies that have powered the vast majority of the bull market in the last two years, with the Magnificent 7 and the A. I. investment. this is going to be a critical juncture for us to navigate as a country is trying to, put the screws to China in a way that allows us to, reshore some of that lost productive capacity and flesh out that manufacturing base that provided all those good quality jobs for Americans historically that have really, gone away over the last 25 years.

[00:11:53] AJ Audio: that's a delicate balance and a tight rope that's going to have to be walked by the Trump administration. But I believe [00:12:00] fairly confidently that it's doable and possible. They're just going to need to execute.

[00:12:04] Joseph Audio: Yeah, you still have, Republic. It's interesting because you still have Republicans in the Senate that were part of the big business globalists, Republicans that the guy was like Lindsey Graham and Mitch McConnell. so it's, yeah, it's going to be really interesting there. To see if any of those guys, at the last minute, pull out the dagger and try to, I don't, I think there's enough pressure, but I also think that the internal conflict, that the left is so entrenched in the media academia they're so entrenched that they're going to put pressure. There's this, there's this heads we win, tails you lose, right? That's been in Washington for the past 40 years, right? And it's been, I don't know. Two wings of the same bird and, Neocons and Neolibs, there's, there hasn't been much difference and they've all benefited from globalization.

[00:12:53] Joseph Audio: And so,you can go back to, the Robber Barons and the administration of William McKinley. big [00:13:00] business there is, it is entrenched. And is it really going to allow the working class and the middle class to get their share back? I think it's in the national interest to do so, because if we're going to have production, the only way we can grow our way out of our debt is growth.

[00:13:15] Joseph Audio: And that growth, comes through production, and that, has to be shared, between, the corporate class and the working class. Otherwise, you're just going to have. the political climate shift back the other way. so I do think it's a, I agree with you 100 percent here. I think it's a tight rope to walk.

[00:13:32] Joseph Audio: I do think they will walk it and I do think they will succeed it because I think there'll be enough pressure. I just think it might take a little bit longer. And I think there's some, potential events to keep an eye on in the backdrop. And that's why I think, there could be, The first half of the year, markets could be a little bit, frothy, if you will, they could be cyclical, a lot of ebbs and flows.

[00:13:52] Joseph Audio: And then I think, towards the end of the year, we could see that, growth as a result once they get the fiscal policy passed.

[00:13:57] AJ Audio: Yeah, I think that's going to be the [00:14:00] real test of this is some of these policies have long tails to them. pro business environments are not created overnight, even if the sentiment can be created overnight with an election victory, but it takes actual legislation and regulatory revisions and things, that, That DOGE and similar minded individuals in the new administration are going to do to streamline the regulatory process to incentivize business creation and profit generating activity, and it's not going to be quick and it's not going to be easy and it's not going to be clean. So there's going to be, a certain amount of volatility associated with the uncertainty around what that ends up looking like and the magnitude and the areas and the focuses and the sectors and industries that benefit most dramatically from that.

[00:14:47] AJ Audio: But at the end of the day, as that picture starts to crystallize, I think that's going to be the inflection point for where the this begins to, have some room to go higher because in the meantime, it's. [00:15:00] It's tough to make predictions around political policy when you're not privy to those discussions.

[00:15:05] AJ Audio: from my perspective, while we're managing portfolios here for, anybody's personal accounts, like it's tough when valuations are as stretched as they are. Today to say, Oh yeah, we're just going to ride this car magic carpet higher over the next six months. It's going to be, straight line, bottom left, top right graph, keep the party going.

[00:15:24] AJ Audio: And you've seen that, since the election, there was a big pop, in sentiment. And now we've traded back, given up a whole bunch of those gains and some more and some things like small cap and value, international, has done maybe a little bit better, but,it's going to be a case where the proofs going to have to be in the pudding and they're going to have to do the work to hash this out.Joseph, I think one of the things that I'm most excited aboutis really going to be just seeing what the actual legislation and tariff plan ends up looking like. There's been a whole bunch of discussion in the media,on X, And on some other places around, what that's going to mean for markets and what [00:16:00] that's going to mean for consumers.

[00:16:01] AJ Audio: but at the end of the day, like consumers are in a really good spot. So, even if we end up in a scenario where, there's a little bit of goods inflation as some of these costs get passed on in the value chain to the end consumer, I think, consumers are really well positioned to absorb those costs.

[00:16:19] AJ Audio: And I think The concept of tariffs as a negotiating tool to onshore production, has already been felt by corporate America, especially in the boards and executive offices of these big multinationals. And I think you're going to start to see the impact of that hit markets in a big way as new investments planned for new plants, new manufacturing, new onshore production facilities in the continental United States to begin to avoid some of these potential tariff risks.

[00:16:44] AJ Audio: Even now, as we see like Very little detail or it makes sense for companies that have these longer investment cycles to make that investment because you know it's coming. you've already seen a bunch of chatter about this and some plans start [00:17:00] to materialize from corporate American, from the companies you know, in the fortune 500 around, Hey, we're going to be You know, cutting this off and getting ahead of it by, putting some, some thought and some forward thinking plans into place around how we're going to, make sure that, we're producing as much as we can domestically and not have to worry about this, no matter what it turns up.

[00:17:19] Joseph Audio: You know, hearing you say that, it just warms my heart so much. I'm a lifetime Democrat, but I don't care about party. I care about country, right? And I want to see our country succeed. And,I, I saw what happened when the insurance companies wrote the bills with Obamacare, and you had this, agopolistic competition.

[00:17:35] Joseph Audio: We had all this excitement that change was going to come, and no change came. the banks consolidated. You can go back to, I think it was, I think J. P. Morgan's father's name was Julius Morgan when he consolidated the railroads, big business. It just, it stays, you know, it doesn't change.

[00:17:50] Joseph Audio: and you saw those tricks come out and the general public and they're not educated. They're not informed on these subjects. and then you'll hear all of them, but the market's going higher and the market's going higher, but it's the [00:18:00] multinationals and it's the fangs.

[00:18:01] Joseph Audio: It's the big seven, right? And that's not really a boon for Main Street. And,when you talk about this new investment and these longer tailed cycles, that's going to be good for Main Street and bringing production back home. It's going to be good for America. And I think America has to lead.

[00:18:15] Joseph Audio: we are still a young country in the grand scheme of things, right? And, our freedom. you got to remember that this country is responsible, not just for democracy. Before we even had a federal reserve or an income tax, we created electricity. We created steel. 

[00:18:30] Joseph Audio: the combustion engine, the assembly line, these things, some of them came a little bit after, income taxes, but the point is that we were responsible for all this innovation, and then you had people like William Jennings Bryan, and, I think his name was, George Henry Young, guys like that, Teddy Roosevelt, the rise of this middle class that eventually, World II were essentially one war with a break in the middle.

[00:18:50] Joseph Audio: And, the rise of that middle class. And so you saw what policies produced that middle class, right? we had a different trade structure on the world stage, [00:19:00] right? And so politicians looked out for everyone at that time. They were responsive. Jimmy Hoffa was one of the most powerful people in the country, right?

[00:19:07] Joseph Audio: And he was a labor leader in the 1950s and 1960s. And the idea that America could go back to having, a strong middle and working class, just the prospect of that. It's something that really means a lot to me, Tyler.

[00:19:21] Tyler Audio: See, I know, AJ said that this is something that may take a while. I'm of the opinion that all of this has to happen in a very short period of time that we may be looking at, a. Very frothy year ahead. and the reason I say that is because midterm elections are only two years away. That seems like a long time, but it's really not.

[00:19:38] Tyler Audio: the way I see it is if, if Trump is going to implement these policies, tariffs, bring back manufacturing, he only has a pretty short window to do this in. Typically midterms you start to see the pendulum swing a little bit. So in my opinion, if these things are going to get done and we are going to create a pro business environment that lasts for a long term, we're going to need to see [00:20:00] action on that in a very short period of time.

[00:20:03] Tyler Audio: So I would expect to see, anything that can be shoved through in the next 2 years that, It has to happen. I think you guys, AJ and Joseph, you both touched on this, that from here on out, execution is key, that we've heard all these promises. We think it's going to be good for business, but now we need to see the proof in the pudding, and it's got to happen, in my opinion, before the next round of midterm elections.

[00:20:24] Joseph Audio: Yeah, that's two years away. I think, if you look back at the Reagan administration, right? it took them a while to get the tax cuts. And so he won the landslide election in 80. and then 81, it wasn't until 82 that you really saw the growth. And so I do think the growth is going to come.

[00:20:39] Joseph Audio: I think if we don't get it in 2026 is going to be where the boom comes. I think we could get it and it just could come towards the end. just think there's too many unknowns right now, but I think it's going to be exciting to watch. That said, I think if we do get it, A. J., what are the asset classes, or sectors that you [00:21:00] think could stand to benefit the most?

[00:21:03] AJ Audio: Yeah. I think,if you take the viewpoint that regulation. is strangling productive enterprise at multiple levels, then the sectors and industries That are most heavily regulated are likely to be the biggest beneficiaries of an updated regulatory regime. things like finance, things like healthcare, things like energy.

[00:21:34] AJ Audio: These are areas where, you know, if you remove some of the onerous red tape, you're just putting money back into the pockets of, these companies who can then utilize it in a productive capacity, whether that's wage increases, new equipment purchases, new R& D spending, new heavy investment, expansion, M& A, all these kind of productive ways, putting the power to make those decisions back in the hands of the [00:22:00] people who created that value in the first place, I think is a good start.

[00:22:03] AJ Audio: those are areas where I'd look to initially and then You know, when you think about the impact of tariffs, it's really in areas where goods are coming into this country from foreign nations. So,that's maybe self explanatory, but I think it helps to state it in that way, because it really helps visualize where the impact of this is going to be felt most heavily.

[00:22:26] AJ Audio: And that's on the big ticket. big dollar items that are coming into this country where it's going to be the most meaningful. I mean if you buy a five dollar toy for your kid off of amazon and the cost goes up 10 percent okay it's 50 cents like that's not going to be a huge deal but if you're buying 

[00:22:43] Joseph Audio: 150 pair of Nikes. 

[00:22:45] AJ Audio: Yeah, a 150 pair of Nikes, a new computer, a car,a dishwasher, refrigerator, like these big ticket, big dollar items are going to be substantially more expensive and in a meaningful dollar amount, that's going to hit people in their wallets. and [00:23:00] that's going to be an area where I think you're going to start to see some impact almost immediately is.

[00:23:05] AJ Audio: in the automotive sector, for example, it's going to be a question of like, all right, well,now new foreign cars are suddenly, and even some domestic brand names, like a lot of those are produced overseas as well. So,depending on how these tariffs are structured, you could be looking at a case where a new car value,new car pricing goes up some meaningful percentage, when these tariffs are enacted and it's going to be a question of, all right, now I've got to.

[00:23:29] AJ Audio: Re evaluate whether I purchase a new car or hold on to my old car. And, from that perspective, you'd want to be, avoiding the automotive manufacturers and maybe looking to some, part suppliers who are going to see a boon in demand for keeping older cars on the road. used car dealers,the old, CarMaxes and some of the big national chain car dealers are probably going to see a boon from this on the used market. And even some of the, the ancillary stuff, tires, Goodyear, rubber, all that kind of stuff. Support infrastructure for that. in the same vein [00:24:00] areas to avoid would be, okay. Appliances in really any meaningful way. Those are all produced internationally for the most part.

[00:24:07] AJ Audio: And while there may be some, scattered production here in America, I think in aggregate, you'd expect to see some weakness there, potentially impacting the bottom lines of, chains like Home Depot and Lowe's and some of these other, big box store,home improvement places, although that could potentially be offset by, continued, renovation spending, which, you know, if things like lumber and stuff are produced domestically, home renovations generally are, a local affair where you're hiring a contractor from your local area, they're sourcing goods, usually locally, unless it's appliances or big ticket items.

[00:24:37] AJ Audio: So there's a little bit of a,

[00:24:39] Joseph Audio: sounding like a young Marty's wag

[00:24:41] Chris Audio: hehheh man, Marty's wag. yeah, no,it's big. It's a big opportunity. There's a lot of moving parts. Yeah. and frankly, this is where money's made is in attempting to think through all the different iterations and permutations of what these changes mean for markets and getting ahead of them because [00:25:00] eventually, when they're on CNBC or Fox business or Bloomberg, and someone's talking about what happened last quarter, and they tell you this, everyone goes, Oh, that was obvious in hindsight.

[00:25:09] AJ Audio: But the key is getting it figured out beforehand. And that's, I think where we're at now is there's going to be opportunity. We're trying to think through these things in a logical and consistent way and put money to work in a productive capacity that maximizes our chances for success.

[00:25:25] Chris Audio: A. J., what do you think about, community banking? Is that worth taking a look at? I know in, in Missouri, they just issued the first bank charter in 15 years, which is really exciting. And it seems there are others that are lining up. are you hearing much about that?

[00:25:38] AJ Audio: Oh, don't get me started on community banks, Chris. This is my,this is my pet peeve of a million ones. I actually had a, an old mentor who was a,serial bank entrepreneur. He had started and sold three banks. he finished his career, at a local bank in the Philly area where he'd grown it from like really a small, just town sized bank to a regional powerhouse.

[00:25:59] AJ Audio: And, the [00:26:00] way he described, the regulators. Coming in there and questioning him. I believe the term he used was like little Hitler,for these guys. And it was just so predatory. he described them coming in with an attitude of, I know you're doing something wrong, I'm going to find it.

[00:26:17] AJ Audio: And if you aren't doing something wrong, I will make up something wrong and then fine you for that. So.when you look at the lower end of banking, whether it's community, whether it's the smaller regionals, they have a massive regulatory and compliance expense that makes it such that you really can't even be productive below a certain asset base.

[00:26:36] AJ Audio: So, you know, there's this kind of theme that you've seen happening of this consolidation in the banking sector between some of these smaller banks, just trying to gain. That critical mass so that the fixed cost of these massive regulatory burdens,can be kind of overcome. But, it's a 

[00:26:53] AJ Audio: challenging space. 

[00:26:54] Joseph Audio: I don't, I don't mean to cut you off there, but I do want to just introduce the term regulatory capture. What you're describing there is [00:27:00] regulatory capture. big banks, they, they use the government, right? They use regulators, to basically raise these compliance costs to eliminate competition.

[00:27:09] Joseph Audio: And so that's what that consolidation, that's what that is, regulatory capture. And so that's why they're little Hitlers, right? Because they're working at the interest of the big banks to take away those little banks.

[00:27:19] AJ Audio: Exactly. and it's even more nefarious than that because what you'll see in the banking space is that the smaller banks, Where the regulatory burden is particularly onerous. They traded a lower multiple, which makes them easy acquisitions for big banks who already have the compliance apparatus in place.

[00:27:36] AJ Audio: And so what you'll see is like.Hey, this medium sized bank can come in and just buy up a small bank and it'll be immediately accretive because they can just roll that into the compliance infrastructure that they already have. And all the loan activity and all the consumer deposits and all the stuff that makes a bank a productive enterprise is then, much more, profitable on a per unit cost [00:28:00] basis.

[00:28:00] AJ Audio: this is a sector that I have a, call it a hobbyist interest in. but at the end of the day, community banks are really the lifeblood of small business in America. And when they are so restricted that they can't make loans, to, the plumbing companies and the construction companies and the manufacturing companies and all the kind of small businesses that, that power, small town, main street America, that's a limitation.

[00:28:26] AJ Audio: and you've seen, some of these alternative financing mechanisms come in, which have attempted to alleviate that. And it's been effective to a degree, but I think Chris, to your point, Removing some of these, more onerous restrictions on these small and midsize and community banks and thrifts is going to be an extremely positive thing that will immediately allow them to begin to make more productive loans and to continue to drive innovation and growth at the local level, which is really the grassroots stuff that, this movement was founded on.

[00:28:58] AJ Audio: And I think, that's really what [00:29:00] To bring this conversation full circle, we saw at the beginning of this, which was, the coalition that's formed around, hey, America has to get back to being productive to being, an engine of growth and prosperity for people and not just, a sounding board for a handful of coastal elites to, sit around and pat themselves on the back, while people, frankly struggled to make a living.

[00:29:20] AJ Audio: I think that's a happy. Scenario that we can all be excited about. obviously you don't want to cut too much and, create scenarios for bank runs. but, I think it's well past that. that is some basic regulation and what they have now is multiple orders of magnitude to restrict it.

[00:29:37] AJ Audio: So there's a lot of room to cut there.

[00:29:39] Chris Audio: for sure. And community banking, not only is it the lifeblood of small business, it's the heart of small towns and medium towns across the country. So if you can really bring banking back to the community, you're creating jobs, you're providing loans for people that might not have 10 years of credit history.

[00:29:56] Chris Audio: You're bringing a force of good to the community.[00:30:00] 

[00:30:00] Joseph Audio: Yeah, I can remember towns on the Jersey Shore and, in the late 1980s that were, thrive in and vibrant, and now they're just boarded up and shut down. There's, very little business activity, if at all, on their main streets. And,you have that in the Midwest, so when you talk about the, the coastal elites, it's become just, a society of the elites and the multinationals, and that's not going to work, right?

[00:30:21] Joseph Audio: That's not, hasn't been good for, 90 percent of this country. And that's why this coalition has come together. And hopefully the pressure is going to be strong enough to really, to get this thing over the finish line. And, and I'm hoping that, and this is really optimistic and this just probably not going to be the case, when Reagan got the tax cuts, they got, I think a good 30, 40 Democrats to go along with that because there was so much public pressure.

[00:30:45] Joseph Audio: I'm hoping some Democrats go along with that. what's right, when the legislation, when push comes to shove, some of the more moderate Democrats will, because,you still have this far left wing of the Democratic Party that's going to try to do everything possible to, [00:31:00] save the entrenched bureaucracy because they just, they don't, whether it's, Ideological or a lack of understanding of economics.

[00:31:06] Joseph Audio: I don't even know anymore. I don't care. I just want to see the country get healthy and I want to see us succeed again. And I want America to continue to be the beacon of light and democracy for people, oppressed people around the world. 

[00:31:17] AJ Audio: Yeah, I couldn't agree more, Joseph. And I think that's, the, the scenario that we're all looking for optimistically. I know we have a few different predictions that we've gone around and talked about, but I think we'd all be pretty happy with that outcome.

[00:31:30] Chris Audio: Yeah, I'm excited. I'm optimistic. I think it's going to be a little bit bumpy and volatile and that's where having somebody like AJ managing portfolios is very exciting to us and we're very lucky. But I think it's going to be a strong year here.

[00:31:45] Joseph Audio: Well, everyone, again, this has been a podcast by Allo Capital. go to the website, allo capital.com.

[00:31:50] Joseph Audio: Please join our beta, click like follow and, peace, love. Thanks for joining us, and we'll see you next time.

[00:31:57] AJ Audio: Thanks everyone.

[00:31:57] Tyler Audio: Thanks