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First Friday: The Government Shuts Down -- But Bitcoin is at an All-Time High?!?
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There is no jobs report today. This is the first time I have ever opened a First Friday episode with those words. But not to worry, because we have jobs predictions, we have inflation data, we have private payroll data, we have a Fed rate cut, plus a strong potential for two more on the way. We have bitcoin and gold both hitting new highs. And on the topic of new highs, we also have the distinct possibility that the full retirement age of Social Security might be going up. There's a ton to talk about today. Welcome to the first Friday episode of the Afford Anything podcast. This is a show that knows you can afford anything. Not everything. We cover five pillars financial psychology, increasing your income, investing, real estate, and entrepreneurship. It's double I fire. Normally on our Tuesday episodes, we typically answer questions from you, and on our Friday episodes we typically interview a guest. But there's one exception, and that's the first Friday of every month in which we zoom out and take a macro look at the economy. So welcome to to the October 2025 First Friday Economic Update. As of 10:45am Eastern, the government is still shut down. This means that the jobs report, which is typically published by the Bureau of Labor Statistics at 8:30am on the first Friday of every month, is not out yet, which is. Well, I hate to use the word unprecedented, but at least as long as I've been doing this, it is. But we do have data from the ADP report, which is a private payroll processor, and they reported that we lost 32,000 jobs in September. Now, I'm going to take a moment to describe the difference between the BLS report and the ADP report. And after that, we'll go into some of the details of the ADP report and what implications this might carry. The Bureau of Labor Statistics, the bls, which is part of the Labor Department, they survey a representative sample of a variety of industries. And when I say representative sample, I'm talking about a data set that is compiled based on geography, industry, and size of company. So they assemble a data set that looks across a deliberately compiled representative sample representing over 600,000 individual work sites. And they ask those businesses to report monthly data on the number of employees on their payroll as of the 12th of the month. And based on that, they compile their jobs report. Now, they revise this jobs report three times. There are two monthly revisions, one that occurs one month later, the next that occurs two months later, and then there's also an annual benchmark revision. The reason for this revision is because there is some amount of guesswork in how the BLS puts together its data. The initial numbers are preliminary. For example, they don't have any ability to account for brand new businesses that have just formed, nor can they account for businesses that close in real time. So they use a mathematical model to estimate those types of monthly payroll changes. They also have to seasonally adjust their estimates in order to remove naturally occurring variations based on holidays, weather, school calendars, things like that. And of course, the BLS looks at both private and public employers. Now, the reason I'm going through this is because I want to draw a comparison to how ADP puts together its report. And the reason for that is because we know the ADP numbers, which is ADP reports that we lost 32,000 jobs in the month of September. But I want to contextualize the data set through which that determination was made. So ADP is a private payroll processor. They do not have public sector data. They only have information from private employers. Now, because they have such a big data set, they cover about 26 million US workers across 460,000 private sector clients or companies. Because of the size of that data set, they necessarily do have a lot of different industries and geographies and sizes. However, unlike the bls, they don't necessarily have a deliberately constructed representative sample. They are simply surveying their clients because they're a private company. With that in mind, let's take a look at how jobs shook out in the month of September. Big companies, meaning more than 500 employees, actually did really well. Big companies grew by 33,000 net jobs. Mid sized companies did worse. And smaller mid sized companies did even worse than bigger mid sized companies. Companies between 250 to 499 employees lost 9,000 jobs. Companies between 50 to 249 employees lost 11,000 jobs. And then small companies did the worst of all. Companies that had between 20 to 49 employees lost 21,000 jobs. And companies between 1 to 19 employees lost 19,000 jobs. So what we see here in the ADP data is a clear, clear pattern of the smaller the company, the harder it got hit. And the bigger the company, the better it did. And that pattern played out at every tier of company size, from the smallest of small all the way up to large. Now let's take a look at industry. Natural resources and mining grew. They gained 4,000 jobs in the month of September. But construction lost 5,000 jobs. Manufacturing lost 2,000. Trade, transportation and utilities lost 7,000. Information actually grew by 3,000 additional jobs. Financial services lost 9,000 and professional and business services lost 13,000. The biggest growth and this is consistent with what we've seen in the last many, many months of data. The biggest growth came from education and health services that grew by 33,000 jobs in the month of September, according to the ADP report. We've seen that in the last many, many months of BLS reports as well. That has consistently shown that health services, health care and health services is consistently the biggest winner when it comes to job growth. The biggest loser last month, the only industry that did even worse than professional and business services was leisure and hospitality that lost 19,000 jobs. One of the questions that someone recently asked me on the Twitter x social media platform was is this slowdown in jobs related to tariffs? The data in the September ADP report does not provide evidence of that. We see that the sectors that have suffered the greatest number of job losses are predominantly service sectors rather than goods sectors. Now, another question that I've received is what would this data look like if we included government jobs? Obviously, in the absence of the BLS report, the only answers could be speculative. But here is what we know. Federal employees who resigned from their positions and are still receiving severance are formally counted as employed until that severance package runs out. And a large number of federal employees who in February, March, April agreed to resign from their positions. Those employees received severance packages that expire at the end of September. This means October will be the first month in which they do not have severance and therefore will be counted as unemployed. And what that means is that the October data will show us how much of a reduction we have had in our federal workforce. So even if the bls, if and when the BLS does put out its September report, we will see some shift in public sector jobs. But the big shift that we are expecting to see will come in the October report, which is published in November. So tune in to the November 1st Friday episode for what's sure to be one of the most fascinating reports that the BLS will put out. It's certainly one of the most anticipated BLS reports that's coming up in the November 1st Friday episode. Until then, we can only speculate. Let's turn our attention to interest rates. The Fed met on September16 and 17 and at the end of that meeting, they announced a quarter point rate cut. This was so widely expected that the markets, the futures markets, had already priced in a 100% probability of a rate cut. In fact, the markets were betting a 91% probability that it would be a quarter point cut and then the other 9%. They were betting that it might be a half point cut. Now, much has been made online of the fact that the day after the rate cut, mortgage rates ticked up just slightly. And so I want to explain why and what happened. For a deep dive into this, listen to our episode that we recently published with Carsten Jeska, who is a former Fed economist. We published that episode right before the Fed met in mid September. One of the points that Carsten made was the slogan that I really like. Buy the rumor, sell the news. Buy the rumor, sell the news. What does that mean in the context of Fed rate cuts? It means that when the markets are anticipating something happening in the future, they already price that in and they already adjust accordingly. So in this case, because the markets so overwhelmingly priced in the probability of a September rate cut, the 10 year treasury, which is what mortgage rates are based on, had already adjusted to reflect that anticipation. And so then when the Fed rate cut actually happened, there was no real market movement because the Fed did what everybody had already expected and had already priced in anyway. The bigger thing that people were paying attention to is whether or not the Fed would signal a likelihood of cutting rates at its October and December meetings. And they did signal that. So the overwhelming consensus right now is that in both October and December, the Fed is likely going to make two more rate cuts, probably a quarter point each. What does that mean for the mortgage market? Well, it means that the 30 year fixed rate mortgage is pretty close to its 52 week low right now. So according to Freddie Mac, as Of yesterday, Thursday, October 2nd, the national average for the 30 year fixed rate mortgage was 6.34%. To put that into context, the 52 week range is between 6.26% and 7.04%. So we're pretty close to the bottom of the 52 week range. What does that mean for the housing market? Things still aren't moving. There's very much a stagnant market as evidenced by high inventory and high average days on market. And why is that? Well, largely it's because existing homeowners have lower interest rates and most existing homeowners don't want to trade their lower interest rate for a higher interest rate. So to put some numbers on this, according to national mortgage professional, 80.3% of homeowners have a mortgage rate that's below 6%. So four out of every five have a mortgage interest rate that's below 6%. 70.4% have a mortgage interest rate that's Below 5%. And more than half, 52.5% of existing homeowners have a mortgage interest rate that is below 4%. In fact, and I'm not trying to throw too many numbers at you, but let me just offer one more. One in five homeowners, 20% have an interest rate that's below 3%. This means that the lock in effect has a long, long way to go before it completely dissipates. There are some positive signs. For example, between July and August, contract signings in the US rose by 4%. That's according to data from the national association of Realtors. Pending home sales as of August reached a five month high and home sales rose 3.8% from the same month one year ago. But data from Redfin suggests that the pending home sales reading as of September showed a slightly weakening demand. And home prices in around 30 of the 50 biggest cities have actually softened by a hair. This is predominantly in the south and in the West. So Austin, Tampa, Dallas, Miami, San Francisco, Phoenix and Denver have all seen declines in the value of single family homes, ranging from half a percent in Denver and San Diego to 2.8% in Tampa. That said, nationally, home values are up 1.7% year over year. This is according to data from the SP Totality Case Shiller Index. What we're seeing overall is that markets that are in the Midwest, which still have some degree of affordability, are the markets that are seeing the most movement. So as of August, pending home sales in the Midwest were up 8.7% from the previous month. And that's the highest among all regions across the U.S. that's according to data from the national association of Realtors, as reported to MarketWatch. You know, coming out of all of this data and zooming out a little bit, what are the big picture trends that we're seeing? Remember during the pandemic when we saw this huge housing boom, particularly in the Sun Belt, we saw real estate prices skyrocket overall nationwide. But the south and the west, the Sun Belt really led that. And meanwhile, at the time, the Rust Belt kind of lagged. What we're seeing right now is an inversion of that. We're seeing that the south and the west, which may have gotten too hot during the pandemic era, are now cooling off. And meanwhile, the Midwest and the Rust Belt, particularly in cities that still has good affordability, relatively speaking, and that's supported by strong, steady local economies that have a diversity of industries. You know, think about Indianapolis, think about Columbus, think Cincinnati. These are all places with very strong economic fundamentals. And that's where we're seeing more transaction volume, lower Days on market overall, more buyer demand, which results in the Midwest leading the pack when it comes to home price appreciation. You know, one of the questions that I've long grappled with when it comes to where should you buy rental properties? Is the question of do you consolidate all of your rental properties into one location or do you spread them out and have some geographic diversity? There are pros and cons to doing both. Certainly the benefit to geographic concentration is that that initial workload of identifying your team, finding your property manager, your electrician, your plumber, your H Vac technician, learning how to navigate the permitting system, or heck, even the county website, which is not necessarily user friendly, that initial getting to know a place only has to happen once if you have geographic concentration. And so that is certainly an argument in favor of that. But the argument in favor of diversification is that when you have rental properties in a variety of different regions, then that diversification can buffer some of these regional variations when it comes to the housing market. I myself have properties in Georgia, Indiana and Nevada, and I chose that in part because I wanted exposure to the south, the Midwest and the West. And honestly, the place I'm missing, I was talking to Joe about this the other day. I'm missing Arkansas. If I were to go into a fourth place, it would be there regardless. The overall state of the housing market is such that it is a fantastic time to be a buyer. It is a stressful time to be a seller. If you can hold off on selling, I would recommend that you do so, provided that your budget allows for that. Again, all normal disclaimers apply. All real estate is local, as we've just been discussing. So what I'm stating right now are broad aggregate statements and your local conditions may vary, but nationwide, this is a time when, as a buyer, you will be facing almost no competition, perhaps zero competition. You might be the only offer that a seller gets after that seller's home has been languishing on the market for 2 months, 3 months, 4 months. So as a buyer right now you have a great deal of power and you can use that not just to see if you can lower the price, but also importantly to score concessions on everything from repairs to closing costs. So if it's financially viable for you to do so, then I would take advantage of the buyer's market while we have it. I'll be writing quite a bit more about this in my newsletter, affordanything.com newsletter. Again, that's affordanything.com newsletter and that's completely free. The age at which you can claim Social Security might go all the way up to 70. If it did, it would actually only solve half of the Social Security shortage problem. We're going to talk about that topic, the future of Social Security and what it might mean for your retirement. We're also going to talk about Bitcoin and gold hitting new highs. We'll discuss the latest inflation data. We'll talk about consumer sentiment. All of that is coming up next. You know, it's common to not totally know how much money you spend each month? A lot of people don't know. How much do you think that you spend on takeout or delivery? How much do you spend on subscriptions? It's probably more than you think. Well, there's an app that's designed to help you manage your money better, and it's called Rocket Money. Rocket Money is a personal finance app that helps find and cancel your unwanted subscriptions, monitors your spending, and helps lower your bills so you can grow your savings. Here's how it works. It shows you all of your expenses in one place. Their dashboard lays out your total financial picture, including when bills are due and when you get paid. And if there's a goal that you want to save for. Rocket Money can analyze your accounts to find the best time every month to put extra money aside. They'll even try to negotiate lower bills for you. The app automatically scans your bills to find opportunities to save and then goes to work to get you better deals. They'll even talk to customer service so that you don't have to. And if your bills increase in price or if there's unusual activity in your accounts but or you're close to going over budget, you'll get alerts for all of this. Rocket Money's 5 million members have saved a total of 500 million in canceled subscriptions, with members saving up to $740 a year when they use all of the app's premium features. Cancel your unwanted subscriptions and reach your financial goals faster with Rocket Money. Go to RocketMoney.com Paula to today, that's RocketMoney.com Paula RocketMoney.com Paula P A U L A One of the tools I've personally seen make a huge difference for business owners is Quo, formerly OpenPhone. It's the same great business phone system you've heard me talk about before, just with a new name. And here's why it matters. If you run a business, you know that whenever you miss a call, you're leaving money on the table. Think about it. Think about the last time you had a plumbing emergency. If the first plumber didn't answer, what'd you do? You called the next one. With Quo, you'll never miss an opportunity to connect with your customers Quo Formerly openphone is the top rated business phone system that streamlines your customer communication. So it works through an app on your phone or computer, which means you don't need to carry two phones around. Your team can share just one number and collect. Collaborate on customer calls and texts. And you don't need voicemail anymore because Quo has a built in AI agent that can be set up in minutes to handle calls after hours, answer questions and capture leads. So you'll never miss a customer. Whether you're a solo operator drowning in calls and texts or whether you have a big team that needs better collaboration tools, Quo is for you. You can find out why over 90,000 businesses trust quo formerly openphone get started free plus get 20% off your first six months@quo.com Paula that's quo.com Paula and if you have existing numbers with another service, Quo will port them over at no extra charge. Quo no missed calls, no missed customers we recently hired two full time people at Afford Anything. We put the job post on Indeed.com we got 125 applications for one of the posts and 751 applications for the other one. So when it comes to hiring, Indeed is all you need. Indeed Sponsored Jobs helps you hire fast because your post jumps to the top of the page for your relevant candidates. 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The Commissioner of the Social Security Administration, Frank Bisignano, told television host Maria Bartiromo, I think everything's being considered end quote. When Bartiromo asked if he would look at raising the retirement age later, a spokesperson for the Social Security Administration clarified his remarks, stating that Bisignano outlined that there are a whole host of items being considered and that eight years is a long way away, end quote. The reason that that spokesperson brings up eight years is because that is the amount of time it will take before Social Security becomes insolvent. Now, to clarify what that means, there are two trust funds inside of Social Security. There's oasi, Old Age and Survivors Insurance, and there's DI Disability Insurance. So there are two trust funds inside of Social Security currently, oasi, the Old Age and Survivors Insurance Trust Fund, which is the trust fund that pays the majority of Social Security's beneficiaries. That fund is projected to become insolvent in the year 2033. Now, if you were to combine the two trust funds, if you were to combine OASI and DI, that would buy an extra year. If we were to combine them, then the combined reserves of of the two trust funds together would have enough revenue to be able to pay all scheduled benefits and cover its associated administrative costs until 2034. What would happen in 2034? Well, when the funds become insolvent, that doesn't mean the payments go to zero. It means that beneficiaries get a reduced version of those payments. If the two trust funds were to be combined, then according to A report on SSA.gov, published in June, if the two trust funds are combined, then starting in 2034, beneficiaries will receive 81% of benefits payable. So for every dollar that you are owed from Social Security, you'll get 81 cents on the dollar. What would happen if the two trust funds are not combined, if they continue to be held separately and administered separately? If that were to be the case, OASI would be depleted by 2033, and 77% of benefits would be payable from that point forward. So for every dollar that you expect to collect from Social Security, you'd get 77 cents on that dollar. Neither of those options sound palatable. Receiving 77% of your benefit or receiving 81% of your benefit starting in either 2033 or 2034. Neither of those sound great. The question then becomes, what can we do to save Social Security from its impending insolvency? Well, the Social Security commissioner, in addition to floating the idea of raising the age at which you can collect benefits, also pointed to a variety of other options. So one option is increasing the maximum amount of taxable earnings that are subject to Social Security tax. Right now, the first $176,100 of your income tax is subject to Social Security tax. Any amount that you make above that is not. So increasing that maximum amount of taxable earnings is one of many options. There's also the option of permanently raising payroll taxes for all income groups across the board by 3.65 percentage points. That's another option that the Commissioner discussed. And then there is the option of, in the words of the Commissioner Bisignano, the option that future generations will probably have a different set of rules, end quote. What he's referring to by that is that the different set of rules would be the rules around when you can claim full retirement age. Now, the last time that full retirement age was increased was back in 1983 when Congress passed legislation to gradually increase full retirement age from 65 to 67. And this was a gradual process, beginning with people who were born in 1938. And it was phased in over the next 33 years in order to improve the financial stability of Social Security and in order to reflect increased life expectancies. And so Congress decided to implement this increase in two month increments for each successive birth year, finally reaching the age of 67 for people who were born in 1960 and later. So the legislation that Congress passed back in 1983 implemented a slow two month per birth year increase in the full retirement age. That way retirees were not caught off guard and people had decades to be able to plan accordingly. This same legislation also increased the financial bonus for delaying benefits, but voluntarily delaying benefits beyond the full retirement age. So it is already the case that if you voluntarily delay taking your retirement benefits up to the age of 70, you receive an increased benefit amount. This is a system known as Delayed retirement credits, or DRCs. How it works is that the Social Security Administration will add an 8% delayed retirement credit to your benefit, which is for each year that you delay past your full retirement age up to a maximum of age 70. I should note, for anybody who's thinking about doing this, and this is very, very important, regardless of when you claim Social Security, you should absolutely apply for Medicare benefits within three months of your 65th birthday. If you do not do that, you could potentially face higher premiums for life. The penalties for delaying Medicare are permanent and unforgiving. So remember, apply for Medicare benefits within three months of turning 65, regardless of when you choose to claim Social Security. Okay? Now going back to this conversation around increasing full retirement age. Last year, in December 2024, Kentucky Senator Rand Paul introduced an amendment to the Social Security Fairness act proposing to raise the full retirement age to 70 and that would be implemented in three month annual increases until that threshold is reached. However, that amendment was not adopted. The conversation and the debate around it, though, has remained in the zeitgeist and became the subject of a study by the Congressional budget office, or CBO, which estimated that increasing full retirement age to 70 would address roughly half of the system's shortfall. Half. So even if Social Security were to raise the full retirement age, we would still likely need other measures, including a potential payroll tax increase, to be able to cover the gap. And this, if you will allow me to editorialize for a moment, this is one of the major reasons why I love Roth accounts, because Roth accounts allow you to lock in today's tax rate even with the looming threat that tax rates might be higher in the future. And so that is the latest update regarding the debate around how to solve the Social Security insolvency problem. Consumer Spending is Up even Though Consumer Sentiment is Down in fact, we have rarely had this big of a disconnect between what consumers say they feel versus how consumers behave with their wallets. According to data from the bea, the Bureau of Economic Analysis, consumer spending in August rose by 6.10of a percentage point. And that came on the heels of increases in July and June of half a percentage point each. August is the latest month for which they have published a consumer spending report. The next report is due out on Halloween. Once again, watch for the first Friday episode of November, in which we will have the latest sets of numbers from them as well. But what we've seen across the June, July and August report is, is that consumer spending is growing at a rapid rate. And that actually flies in the face of what consumers say they feel because according to the University of Michigan, which publishes a consumer sentiment Index, consumer sentiment in September fell significantly. It's now at its lowest level since May, and it fell broadly across all age, income and education groups. So we have an economic situation right now in which consumers consistently report that they are pessimistic, chiefly citing concerns centered around high prices, weak labor markets and soft personal finance outlooks. 44% of surveyed consumers cite price pressures related to their day to day cost of living. And according to the University of Michigan, surveyed consumers expect that inflation will rise at a rate of 4.7%, which is a full 2 percentage points higher than how inflation is actually trending. We'll get to that in just a moment. And what we've seen throughout the year, it's Consistent that people's perceptions of inflation tend to be higher than the inflation rate. Often our experience of inflation is cumulative. So we see the cumulative consequences of inflation, while the inflation rate as a measure simply measures the rate, the current pace. To clarify that a bit, since those concepts often get conflated with one another, imagine that you're driving a car from Maine to Florida in, and you start the drive at 60 miles per hour, and then you slow down to 50 miles per hour, then to 40, then to 30, then to 20. Eventually the rate at which you are Approaching Florida is 20 miles per hour, but you're still approaching Florida, you still are nowhere near Maine, and you're definitely not going in reverse. What you see, what you experience in the moment is that accumulated distance between because you're a lot further away from Maine than you used to be, even though the rate at which you're traveling is slower. That's what our experience of inflation is like. We feel the cumulative effects of inflation. We feel that the price that we pay in the checkout line at the grocery store is cumulatively a heck of a lot higher than it was five years ago. And as a result, we perceive the rate of inflation to be high, even though the current rate is not as high as we think it is. So all of that said, the Michigan Consumer Sentiment Survey shows that consumers in September believe that inflation is at 4.7%. And the prior month they believed it was at 4.8%. And overall, consumers are very pessimistic. And yet what the Personal Consumption Expenditures Index shows us is that consumers are spending at increasing levels. That consumer spending has grown by half a percentage point or more per month over the last three months of data that we've collected. And so that disconnect between how people feel and how people act, that is one of the more interesting economic stories of our time and something to continue to watch. On the topic of inflation, I realized there's one question that I did not address, and it's the question of is the Fed going to meet even if the government is shut down? The answer is yes. The reason is that the Fed is not funded by congressional appropriations. The Fed is an independent entity. And as an independent agency, the Fed receives its funding from sources outside of the congressional appropriations process, which means that it can continue to operate and continue to pay its employees during a shutdown. However, the Fed will not have the latest data. So it's not going to have the CPI report, it's not going to have the PCE report, it won't have the latest GDP figures, it won't have the jobs report from the bls, so it will likely be relying pretty heavily on private sector data, Private sector surveys Surveys that are conducted by regional Fed banks and other types of alternative data sources. According to a report by JP Morgan, each week of shutdown will subtract about 1/10 of 1% of annualized GDP growth by virtue of a reduction in government activity overall. From a macroeconomic lens, the shutdown impacts a relatively speaking small portion of the government and the many of the furloughed employees will receive back pay. So the long term consequences on GDP according to this report by JPMorgan Chase, are unlikely to be severe. The same JP Morgan report also notes that because this shutdown is not related to the debt ceiling, there is no impact on the Treasury Department's functioning, which means the Treasury Department can continue to issue debt in the way that it normally does. The report states that it's possible we might see slightly lower T bill issuance, meaning fewer treasury bills will be created, but the report notes that the effect would likely be slight. So I did want to take a moment to clarify that to make sure that those questions got answered. The next time that the Fed is scheduled to meet will be October 28th and 29th, which means that their next interest rate announcement is scheduled for October 29th and that will go on regardless of whether or not there is a shutdown at that time. Bitcoin and gold have both reached new highs. Bitcoin in particular added more than 10% in just a week. It reached an all time high last month of 124,000 per Bitcoin. To put that in perspective, on January 1, 2023 Bitcoin started the year at a value of $16,613 per Bitcoin. So between 2023 and today it has achieved a year over year gain of approximately 156%. Gold is also up, but not as dramatically. Gold rose by 13% in the year 2023 and rose by another 26 to 27% in 2024. It is now as of the time of this recording at or very near its all time high with prices fluctuating around $3,900 per ounce. This is due to a variety of factors including the shutdown people betting that the Fed is going to continue to cut interest rates which pumps more money into the system which decreases the value of fiat currency, persistent fears of inflation, persistent fears of a weaker dollar of a debased currency. Gold is very much seen as a hedge against these factors and Cryptocurrencies and Bitcoin in particular is also viewed very much in the same way as a hedge against concerns related to fiat currency. Which is why I note the fact that both of them are reaching all time highs right around the same time. Remember also that in any period of high inflation, tangible assets are where investors flock. Because if, if you are in a period of high inflation, the value of your currency weakens and weakens. But tangible assets, real estate, commodities, art, precious metals, these tangible assets are a good store of value. And that's why people tend to flock to gold when they're worried about inflation. It's also in this case why people flock to crypto in general and Bitcoin in particular. Because Bitcoin has inflationary protections built into the way that it's designed. This is not an endorsement or a recommendation. It is simply an explanation of how those two asset classes work. I should note that the run up in gold in 2025 has been particularly significant. The spot price is up by more than 40% year to date. Gold is now on track for the biggest annual gain since 1979. Finally, the head of the securities and Exchange Commission, Paul Atkins, signaled that regulators are, quote, prioritizing, end quote, a plan to let publicly traded companies report earnings twice a year rather than quarterly. Let's explain how the system works and then we'll look at the pros and cons. Right now, the current reporting requirements for publicly traded companies in the US is that companies are required to file financial reports with regulators both quarterly and annually. And that has been the system since 1970. That's the year that the SEC first mandated quarterly reporting. Now, these quarterly reports carry information on the company's financial performance. They talk about risks that the company faces, legal risks, regulatory risks, market based risks. The reports talk about changes to internal controls. And they present an analysis of the risks that the company faces as well as the opportunities that the company can see. Now there are some other companies, including Canada and Japan, that also require their companies to publish quarterly financial reports. But the European Union only requires two reports per year and the UK eliminated quarterly reporting back in 2014. So the UK now only requires a semi annual reporting. Now, even though the EU as an aggregate only requires semiannual reporting, there are individual countries inside of the EU that still require quarterly reporting. In other words, there is variation inside of the EU as to what the requirements are. Australia only requires semiannual reporting. South Africa requires semiannual reporting. And Fun Fact, Mongolia only requires annual reporting. Now the main criticism of quarterly reporting requirements is that they're expensive, they're onerous, they cause companies to organize their businesses around hitting quarterly targets in order to satisfy their shareholders and that results in short termism. Short term Thinking Companies have a harder time forming big audacious ten year, thirty, fifty year, hundred year plans because they're so focused on hitting their quarterly targets. It also requires a lot of time and money to compile these formal quarterly financial reports because companies are on the hook if anything in there is wrong. So those reports have to be very carefully constructed and the moment that the books close for one quarter, they immediately have to turn their attention to the next one. There are also heavy auditor review costs that are associated with quarterly reporting, and a stat published by Bloomberg notes that the number of publicly traded firms inside of the US has fallen by around 40% in recent years. And some people believe that the costs the reporting requirements associated with being a public company deters many successful privately held businesses from going public. So those are the arguments that are in favor of switching from quarterly reporting to semiannual reporting. That said, a handful of prominent CEOs, including Jamie Dimon, Warren Buffett and Larry Fink, have come out in support of the quarterly requirement. Some of the arguments that support this requirement include greater transparency, decreased risk of insider trading, the thinking being that if reports are less frequent, that might increase the risk of insider trading, and it would lengthen the amount of time that insiders would be able to hold onto that confidential information. And in a dynamic market where business moves quickly, waiting six months between reports is too long of a timeframe. So those are the arguments both against and in favor of of this proposal. I should note for clarification that the proposed change would allow companies to choose between quarterly or semi annual reporting, so it would not eliminate quarterly reports, it would simply make them voluntary. The SEC will unveil a formal proposal by either the end of 2025 or early 2026, and that will be followed by a period of public comment. Those are the major economic updates of the past month and of the current moment. Thank you so much for being an afforder. If you enjoyed today's episode, please subscribe to our newsletter affordanything.com Newsletter I'm going to be publishing quite a bit about the real estate space, the housing market in the coming weeks. We also have a course on real estate investing called you'd First Rental Property. It is meant for anyone who's interested in entering the rental property market. It's also great for anyone who is a quote unquote accidental landlord so if you are holding on to a home, you've decided to move out, but you're holding onto it and using it as a rental, it's great for teaching you how to properly manage that home. Properly screen tenants, manage turnovers, evaluate whether or not to continue holding the home. So it's great for accidental landlords. It's also great for purposeful landlords. Anybody who wants to invest in housing for the long run, buy and hold. So if you are interested, subscribe to our newsletter, affordanything.com newsletter and in fact, we actually have a waitlist that's specific to the course. You can access that by going to affordanything.com VIP list. That's affordanything.com VIP list. Thank you so much for tuning in to the first Friday, October 2025 episode. My name is Paula Pant. This is the Afford Anything podcast and I'll meet you in the next episode.