Wall Street News Roundup: Is President Biden Broke? Plus, Airline Drama and New Trends in Unemployment

0:01I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. And it's time for some money rehab.

0:16It's time for a roundup of the biggest stories on Wall Street and how they're going to affect you and your wallet. Today, I'm covering the biggest air travel drama that you haven't heard about yet. Why the job market is in this weird no hire, no fire limbo. Where exactly we stand with interest rates after the Fed's big meeting. And why Joe Biden might actually need some money rehab. All this after the break. I once interviewed the CEO of a credit bureau, and he confessed that his assistant has a better credit score than he does. Why? Because she's more organized. Yep, even the head of the credit bureau can use a little help in the credit score department.

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1:52I recently went on a quick beach trip with my husband for a little couple's time, and it was perfect. We sat in the sun, swam in the ocean, and generally just tried to get to that place of deep relaxation where your shoulders actually drop a few inches. Do you know what else can give you that feeling? Co-hosting with Airbnb. Trust me on this one. Hosting your home on Airbnb while you're away from home is a great way to make some extra cash and make sure your home is working as hard as you do. But knowing where to start can feel overwhelming. That's where co-hosts come in. These are local experts who can help make hosting even easier by taking care of all the little details back home while you're off enjoying yourself.

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3:51As the mom of a one-year-old, I need a lot of stuff. And when I need it, I need it now. It's simple. Paying rent is better with Bilt. And soon, owning a home will be better with Bilt, too. Earn rewards and get something back wherever you live. Join the loyalty program for renters at joinbilt.com slash moneyrehab. That's J-O-I-N-B-I-L-T dot com slash moneyrehab. Make sure to use our URL so they know we sent you. Let's start in the skies. Air travel had a very messy week. Last weekend, flights across Europe and the UK were thrown into chaos after a massive cyber attack. Electronic check-ins went down, which meant passengers had to check in manually.

4:30The result was long lines, handwritten tickets, and general airport mayhem. The backlog rippled across the globe, canceling flights, messing up schedules. Who's behind the attack is still under investigation. We also don't know the final price tag of the disruption because airlines are still dealing with the fallout at the time I'm recording this. But make no mistake, the meter is running. Meanwhile, closer to home, Spirit Airlines is in crisis mode again. The airline filed for bankruptcy for the second time in less than a year and announced plans to cut capacity by 25 percent by November. To get there, Spirit had slashed routes and furloughed workers, including 1 ,800 of their 5 ,200 flight attendants.

5:11In statements to the press, Spirit blamed its money troubles on growing income inequality. Okay, so they didn't use those words exactly, but if you read between the lines, that is basically what they're describing. Their problem is simple. Budget-conscious travelers, their bread and butter, are cutting back on discretionary trips, while wealthier travels are splurging on luxury experiences. That leaves a budget airline like Spirit unwanted. It's not looking good for Spirit. After their first bankruptcy last year, Spirit was delisted from the New York Stock Exchange. After their second bankruptcy, they put up a page on their investor relations website to explain the restructuring to quote-unquote stakeholders.

5:49The problem? The link is dead. Which is such a big red flag, it's almost funny. This trend, the budget market being squeezed at the same time that the 1 % are spending more than ever, is something we've seen for a while in the luxury goods market. So seeing it in the travel industry makes this look less like a trend and more like a pattern. Could it mean that budget car brands could start to struggle while luxury manufacturers thrive? Maybe. It's definitely something for investors to keep an eye on. All right, let's talk about jobs data. Last week, we covered how a higher percentage of long-term unemployed Americans are college educated.

6:25This week, we've got another round of employment data to unpack, plus Fed Chairman Jerome Powell's own words on what the heck is going on. Now, I graduated in the thick of the Great Recession, and it was brutal. No one was hiring, and many in my generation are still making up for lost time. Fast forward to today, and honestly, I see Gen Z grappling with similar issues, namely a pretty challenging job market. We talked about some of the root causes of these last week, But the two biggies are AI and a big pool of former federal employees looking for work. The short story is those very entry level roles that college grads used to land to get a foot in the door increasingly automated.

7:07And you know who has a lot more experience than recent college grads? The roughly 300 ,000 federal workers who've left government jobs, whether by choice or not. And now they are out hunting, too. That's a lot of experienced people in the same applicant pool as brand new grads. Also, the market is kind of frozen. The term no fire, no hire is suddenly getting tossed around a lot, meaning companies aren't laying people off, but they're not bringing in new blood either. The numbers also show that struggle is not universal. The jobless rate is hitting men harder than women. College-aged women are holding on with about 4 % unemployment.

7:43For college-educated young men, it is 7%. What's striking is that this is the same unemployment rate as young men without a college degree. Normally, that college degree is supposed to be the ticket to better job prospects. So this is unusual. Jerome Powell summed it up with kind of a diplomatic statement saying we're in a, quote, interesting job market. That's for sure, J-Pow. Adding that, quote, kids coming out of college and younger people, minorities, are having a hard time finding jobs, end quote. So if you have sent out thousands of resumes and have heard nothing back, don't lose hope. It's not just you.

8:19This freeze can't last forever, though. As we know, there has been a lot of Fed drama this year. President Trump has been beefing with J-Pow hard, even though J-Pow is a Trump appointee. Let us not forget. It's easy to forget these days, but money rehabbers never will. The president has soured on J-Pow because until this month, Powell refused to slash interest rates this year. Trump's response has been to threaten to fire him and try to replace the Fed board with his own handpicked members. Now, he cannot fire JPO, but he's working on getting a new team in there. He's made his first Fed appointment, Stephen Myron.

8:56Now, a single appointee didn't move the needle very much. Myron was looking for a cut of 0.75%, claiming that leaving the interest rate too high will drive up unemployment. The Fed did cut by 0.25%, which is fine. As more Trump appointees start filling seats at the Fed, I guess we're all about to get a real-world test on how low interest rates can go and how the Fed handles it if inflation starts to creep back up again. And lastly, it turns out that even presidents can use a little money rehab. Let's check in on President Joe Biden, who despite decades of public service and a pretty dope post-White House book deal, is in a surprisingly precarious financial position.

9:36Let's break it down. When Biden left the White House in 2024, he wasn't exactly rolling in it. Public disclosures show that he still has a mortgage on his Wilmington, Delaware house. Originally, the mortgage was taken out in 2013 with a 3.4 percent interest rate. This is what got picked up in so many headlines, which is really funny to me because the main narratives were like, Joe Biden won't pay off his mortgage until he's 100 years old. But if you do the math, it just means that President Biden got a pretty standard 30 year mortgage at a sweet rate. Good for him. Presidents, they're just like us.

10:10But the headlines weren't entirely wrong. President Biden does seem to have some financial problems. These headlines were just picking up on the wrong ones. Here's where it actually gets messy. There's a$250K home equity loan on his Rehoboth Beach vacation home and a$15 ,000 bank loan due by 2028. Biden also has a line of credit of up to$50 ,000 with an interest rate floating between 5 % and 8%. But that might not be all. Behind closed doors, Biden reportedly confided in friends that he was staring down about$800 ,000 in personal debt, partly due to loans on the$2.7 million beach house, as well as costs related to Hunter Biden's legal issues and to support his daughter, Ashley, who recently filed for divorce.

10:52And to just double click on the real estate part, property taxes on his beach house also jumped by 20 percent this year, which probably felt like it was adding insult to injury for the president. President Biden also has been spotted recently flying commercial, which has led to some people like myself, honestly, to ask, WTF is going on with President Biden's finances? While President Biden still does have money coming in, he receives around$416 ,000 annually from Uncle Sam thanks to his decades in public service, about$250 ,000 as a former president, plus$166 ,000 from his time in Congress and as a VP, according to the National Taxpayers Union Foundation.

11:31In 2023, the Bidens earned just under$620K and had somewhere between$632 ,000 and$1.38 million in accounts, plus some modest investments. Jill Biden, however, stepped back from her$100 ,000 a year teaching gig to take an unpaid role with the Milken Institute. So the next question is, is this normal? I mean, what kind of income streams do presidents normally get when they leave the White House? The short answer is speaking and book deals. After leaving office, Brock and Michelle Obama scored a historic$60 million book deal and launched a production company with Netflix. Bill Clinton has reportedly raked in over$100 million through speeches and consulting.

12:14And some estimates suggest that George W. Bush earned$7 million from his book Decision Points in its first year alone. But President Biden has struggled to drum up the same kind of business for himself. Biden's speaking fee is reportedly between$300 ,000 and$500 ,000, but takers have been few and far between. His speaking agency lists cost savings options like virtual events and off-peak bookings. And while that is perfectly normal for the speaking bureaus, it doesn't really scream high demand to me. The demand issue seems to be corroborated. One Democratic insider was quoted as saying bluntly he is not a draw.

12:53Part of that might be due to Biden's longstanding speech impediment, which, while he's worked through it, still impacts public perception, especially for an explicit speaking event. In book land, Biden is reportedly hard at work on a memoir described as the Life and Times book rather than a tell-all book, which he sold for 10 million bucks. But that pales in comparison to the$60 million deal for the Obamas, and it's also possibly lower than Kamala Harris's deal for her book, 107 Days, which is literally hot off the presses. It just went on sale yesterday. While no official figures have been released, reports suggest that publishers offered her around$20 million for her post-election memoir.

13:34That is double Biden's own deal, despite her having spent far less time in the national spotlight. And this is going to sound even more harsh, but Biden's memoir isn't expected to sell all that well. The Bidens pulled in less than$3 ,100 in royalties. Yes,$3 ,100 from four titles last year. I know that in a world of a bazillion celebrity brands, it might feel like the well-known will always be well-off. But the truth is, fame doesn't always equal fortune. And for President Biden, the road to financial stability after the White House is looking more like a slow climb than a golden parachute. But if we've learned anything from this show, it's that even presidents need a solid financial plan and a little money rehab never hurts.

14:18For today's tip, you can take straight to the bank. When a company files for bankruptcy, common shareholders are last in line, meaning your stock can go to zero. If you're holding shares in a struggling company, watch for Chapter 11 news and be prepared to act fast. Sell while there's still volume or brace for your shares to be wiped out during the restructuring. Bankruptcy isn't just a business story. It's your exit sign as an investor.

14:47Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening. and for investing in yourself, which is the most important investment you can make.