The I Love CVille Show With Jerry Miller! - Edward Herring Joined Alex Urpí & Xavier Urpí On “Today y Mañana” On The I Love CVille Network!

Episode Date: September 26, 2024

Edward Herring Chair Pro Tempore of the Charlottesville Sister Cities Commission joined Alex Urpí & Xavier Urpí On “Today y Mañana!” “Today y Mañana” airs every Thursday at 10:15 am on The I Love CVille Network! “Today y Mañana” is presented by Emergent Financial Services, LLC, Craddock Insurance Services Inc and Matthias John Realty, with Forward Adelante.

Good morning, everyone, and welcome to Today y Mañana. I'm Alex. This is Xavier. We're excited to have you joining us on a muddy and wet and rainy morning. Yeah, I mean, it's really, really muggy. Yeah, I mean, we have had, I often talk about the traffic on the morning. I feel like this is a traffic on the morning. Oh, yeah. I mean, if you're awake, I mean, this morning, I woke up.

I mean, it was like, it can't be. I have to wake up already. It's like, it's dark, it's rainy. Exactly. Exactly. My wife keeps telling me, she keeps saying, I wish it was the weekend. Because then you could just go downstairs, and she just wants to go downstairs in the robe and get on the sofa and watch TV. Right?

She said, this is not the weather to go out and drive. This is when I said, I really should be retired. I wouldn't have to get up at all today if I didn't have to. But then five minutes later, I'd be going crazy. You'd probably still be doing something, but at least maybe you'd be doing it in the house. For those who do have to go out,

there's no excuse not to drive your toffeto and latte to a cozy place and watch some Today Money on a Place. Yeah, absolutely. This is perfect, yeah. We have a great guest lined up for today. We're going to be joined shortly by Edward Herring. He is with the Charlottesville Sister Cities Commission.

He's going to talk about our beautiful sister cities and all the work of the commission that they do. And then later in the show, we'll have our finance topic. Okay. So Xavier and I will talk some interest rates. We'll figure something out. We'll figure something out. And then later in the show, we'll have our finance topic. Okay. So Xavier and I will talk some interest rates. We'll figure something out. We'll figure something out. I think those who know us know that the finance topic can cover a lot of ground. It's not limited to only one topic.

That's true. It seems to meander along to different areas. You learn a lot of different things when it comes to finance on Today and Mañana. But we're excited about that. Of course, a couple of shout-outs. Thanks to Emergent Financial Services for presenting. Thanks to our wonderful partners at Mattias Yon Realty,

Credit Series Insurance, Charlottesville Opera, Forward Adelante. Of course, thanks to you, our viewers. Be sure to send us any questions, comments that you have today. I already see some fantastic viewers tuning in. Monica Miller from Montana is joining us this morning. Tuning in, good morning.

Dr. Elizabeth Erpey is tuning in this morning miller from montana is joining us this morning tuning in good morning uh dr elizabeth erpie is uh tuning in this morning she says she wants to give a shout out to the handsomest podcast host ever so i guess that must be me it must be she means it's xavier she means it's xavier i have i have i have a sneaking suspicion who that might be referring to but we love the wonderful Dr. Erpy joining us this morning so that's always a pleasure and so be sure and we'll give you a shout out if you send us a like, a share

a subscribe you stole my line you were supposed to point at me you were supposed to say it during the opening montage I'm not that good, I don't remember like that so uh be sure to send us that and we will give you a shout out this morning to any questions comments you may have be sure to send them our way and we will read them aloud because we love reading the wonderful comments that always send us

so without further ado i'm ready to learn i'm excited to jump in and learn so we're excited to welcome to the show this morning, Edward Herring. He is with the Charlottesville Sister Cities Commission. Edward, thanks for joining us this morning. Good morning, Edward. Thank you. Good morning. It's a pleasure to have you on. So maybe to start off, you could tell us a little bit about the origin of the Sister Cities Commission.

How did it get started and how did you personally decide to get involved? Very briefly, the concept of the Sister Cities began in the United States during the Eisenhower administration. He was the first sponsor to help make the programs happen. And the concept of the Sister Cities is basically to promote understanding of and foster relationships among individuals, communities, and cities of the world through cultural, economic, and educational activities. And it's basically looking at promoting diplomacy,

citizen to citizen, city to city. So it's not on a grand scale, it's much on a smaller scale. And we hope by doing that, we can make the world a little bit smaller place of course I'm just curious and maybe you were going to talk about this how do these cities

get selected how does Charlesville have a sister city in X place let me tell you what we have I'll begin with the one that is in active status it's called Pleven it's in Bulgaria what we have. I'll begin with the one that is in active status. It is called Pleven is in Bulgaria. That began many, many years ago after the war. We haven't had a lot

of activity, but Pleven has indicated an interest to connect with us again. And surprisingly, we had a whole lot of people who suddenly held their hand up and said, oh, I've been there, and I would like to get involved. The next sister city is Poggio in Italy, and that has been our sister city since 1976. It's pretty active. It's not a big city. It's part of a larger region. At one point in time, it was a bigger city with independent schools and what have you,

but as a lot of cities consolidate, but we have a pretty active relationship with them. We are hoping to be able to receive the delegation from Poggio next summer. The last one we had here was in 2018 and they came for four or

five days. They came during the film festival because residents of Poggio had a filming competition. Oh. And so it was a wonderful time. Now, I was also, I first joined the commission in 2015 on my

first term and served for three years. And then recently I joined again in 2022. And so I'm on my second term. Now, the next city that's very active is the city of Bessasson in France. It is on the eastern side, near the Swiss border. Bessasson is a city that is very similar to Charlottesville.

It has universities. It sits in the mountains. It's an arts, cultural city, very historic city. The city goes back to the Roman Empire. It was originally named and settled by the Romans and has been in existence ever since.

It was a major point of fortification for Louis XIV. So they had a giant citadel which still exists on the hill overlooking the city. And an incredible location that's naturally defensive. It's a wonderful city. I've been several times. Usually in association with Charlottesville High School. We received earlier this year

an exchange of about 28 students from Besson here at Charlottesville High School and we had activities for them. We also received the delegation from the mayor's office earlier this year. We had an opportunity for citizens in Charlottesville to meet and greet and to get to know people. Now coming coming up, the most interesting program is working with the drama teacher at Charlottesville High School. Next April, the drama department at Charlottesville High School is going to take 30 students to Bessarzone

to do two performances of A Chorus Line. Oh, wow. And so what we're hoping to be able to do is organize where commissioners and citizens of Charlottesville might also be able to make their trip at that point in time. But we're just getting started on that.

But we just got the confirmation this past week that we have the facilities and the halls reserved for us. And so everyone is very, very excited. We've been talking about this for many years. We were talking about it in 2018. Then by the time we got around to talking about it again,

the pandemic hit. And of course, which put everything. And so best of all, it's probably the city that's most closely related to collecting the Charlottesville in terms of socioeconomic levels.

And the mayor of Bestowal has been here several times over the years. We have a new mayor there. The city is now more of a socialist city than before, but very interesting is because Mayor Wade just made a trip there.

September the 8th was the 80th anniversary of the 3rd Army Infantry Division liberating Bessie's home. So to celebrate that 80th anniversary, Mayor Wade went to participate in the ceremonies. We had members of the armed forces, members from the embassy, Mayor Wade. He was able to give a lot of speeches. And it was a really, really wonderful occasion.

We posted pictures on our Facebook page. But it was a chance to recognize the fact that we've had a connection probably since World War II. For 80 years now, we've had this connection with Besson's song. And of course, the next city is also terribly important. We're in Ghana, which is... It's our city for a different reason.

When we look at the size of African-American population here, or people who have African roots, descendants from people who originally came from Africa, then having this city in Africa is a wonderful connection. Ghana is also the country from which the majority of the enslaved persons from Africa came to Virginia. So there's a Ghana-specific connection even beyond the continent. It is. Without a doubt, it's a Ghana-specific connection even beyond the continent.

It is. Without a doubt, it's a very important connection. And the Winneba Charlottesville Foundation, that's run by Dave Norris, makes one or two trips each year to take delegations to Winneba. And it would have been very, very successful and pretty well sold out each time that he organizes those trips. And so we have an active exchange with them. We have an active relationship with them, and we're very, very proud of it. We had the mayor of the city arrive last year, spend a week here at a different culture. I think there was an African-American culture festival that week,

and so we tried to maintain that relationship. Now the one that's most interesting and new is Huehuetenango in Guatemala. And we intentionally set out to seek a Spanish-speaking city. Given the increasing population of native Spanish speaking people here or second generation or even third generation now after all these years, we realized we did not have Spanish speaking. Now, recognize the fact that no one city represents the whole Spanish speaking world. We have to always be careful that we don't assume that, okay, if we go to Guatemala, then we have something that represents all the different countries and all the different languages and what have you.

And so the mayor and his delegation from Guatemala came last November. We were able to offer, once again, to the citizens of Charlottesville an opportunity to spend time with them, to meet them. They were really, really wonderful. We did have to use a lot of interpreters. Very few of them spoke sufficient English

to carry on a conversation. You know, but they were absolutely charming. It's kind of interesting because two years ago, I went to Guatemala, went to Huehuetlango, and this gentleman said to me, oh, I have this little podcast, and would you like to come on for a few minutes tonight? I said, okay. So we sit down just like this, and that's when I realized I was the only guest for one hour.

Okay. I said, well, okay. Let's go. And very, well, okay. Let's go. And very, very wonderful conversations, and that was available all throughout the Latin America. Was it in English

or Spanish? So you speak Spanish? Sí, sí, sí. But it was very interesting. I said, I don't want to listen to it because I don't want to correct my own Spanish. You never want to hear yourself doing something like that. That's my philosophy.

I never actually go back to listen to the show. Now I'm good. But we hope to, within the coming years, organize a delegation to go to Guatemala. It's a small city. It's much smaller than Charlottesville. Guatemala is a country with problems. Its location, by the way, is sitting there right

there below Mexico. But nonetheless, I just found the people absolutely wonderful. I was received, actually in a manner that almost scared me because when I got there, I guess they had not had a lot of international visitors. So there were this colony of cars to transport me with a police escort. And when I went to attend, to open up

a library, we opened it after the pandemic, and I had taken gifts from books and what have you from the Thomas Jefferson mansion. I thought it would be significant. And so we got there for the ceremony. As the police cars pulled up with me, and I got out to go inside, the mariachi band struck up singing with the music.

I was like, well, now I know what it feels like to be the president. But at the same time, that's a little bit intimidating. Now, we have 13 slots in the commission. One is empty right now. And I serve as the chairman of the commission and also as the person who's connected mostly

with Wayward Tenangle. I have worked closely with Best in Song. And I've enjoyed it much. I got involved myself because when I retired and moved to Charlottesville, I sat at home about 10 years and my wife said to me, you have to go do something.

You know, sit at home. It's not easy. It's not easy. And especially nowadays where you find that you can buy stuff while you're sitting there on the sofa. So you quietly go into the bank and say, while you're sitting there, return.

So I began working with the school systems. So I taught languages at Charlottesville High School as well as in county. Last year I taught Spanish at Walton Middle School. Two years ago I taught French and German at Charlottesville High School. And this year I'm

sort of taking a step back from that I don't like get up in the morning anymore either but but that became the connection when I was working with the school system that's how I got involved first with Besson's arm and supporting a trip that was coming up with writing letters and talking with people, and then going on the trips myself to help accompany them, which I'll be doing in April coming up next year. And so I met people from the commission. Now, the process is fairly simple.

When there's an opening, it's posted on the city website. There's a sister city page. There's also a page for boards and commission openings. Anyone can apply and basically we're looking for someone who has an interest in one of the cities, an interest in person to person involvement, community involvement, an interest in bringing the international focus to our citizens of Charlottesville. Because everything we do is supposed to be for the benefit of the citizens of Charlottesville. Okay.

We want them to. Now, Charlottesville is already a pretty international city. Yes, absolutely. It's pretty good. And with the university, who supports us tremendously, whenever we have visitors, we have activities. They're able to bring them in, help them see the university. They bring them in. For instance, Global Week is coming up later this year,

and we will participate in that. We participated in things like the Fountain City out at Monticello. So we try to get out there and be a part of the community. And we're looking forward to doing more things. We had, now one thing we have that a lot of people don't know about is a grants program where we put aside money for people to have an idea of what they can do individually to a project that will promote our mission, our objective. And one of them last year was a couple of professors from the university who had organized or arranged

four or five pieces of music that represented the relationship between us and Besson's Song. We're composers from Besson's Song that went back hundreds of years. And they organized a concert that they're going to perform in Besson's Song. With those... Yes, they performed it here first. We were well attended.

They performed it here when we had visits from Bessie's Zon, and then they went to Bessie's Zon, and they performed the concert there. And the same, then we had, I mean, the projects are too numerous to mention, but they're usually, once again, small things to connect people. So we have to do a good job of telling people what's going on to bring them into it. I love Charlottesville, but Charlottesville is also a little bit of an apathetic city.

It's like it takes a lot to move people to get them rallied up and interested. So you have to continually push out information and let them know what's going on. Exactly. So once again, as I was mentioning, we have 13 members of the Commission and the terms are three years. There's an application on the Cedar website where one can apply. Cedar residents are preferred, but you can be in a close area if you have a connection. I live in a county, but I work in a Charlottesville high school, so I have a close connection with the city.

And then they serve a three-year term. They can apply for a second three-year term as a maximum. This is my final term, so next June I will rotate away from the commission after having served six years. Which is good, because it's always good to bring in new ideas and new people. So when I go to

Bessasson in April, that will be my last official... It'll be my farewell tour. I like that. I just need a train car. You know, that whole thing. To weigh in on the rich. Yes, exactly. So we do have a position called the business rep.

So we have, you know, from different walks, a university rep. We have a higher education rep that is. We have a Charlottesville City School rep who serves on the commission. We have ex officio from the city council who serves on the commission. And we have other ones who have different roles, city reps, individual city reps. And then we have one called the business rep. That one is actually vacant. So if anyone from a particular business or organization in the city were to be interested,

they go to the website for the city and there's an application for boards and commission for that particular position. And then it will go in front of the city council to be appointed. So that is available for anyone who has an interest. So what are some of the things that someone on the commission would do if they joined? Especially on the business side. On the business side, yeah. Well, one of the things we'd do is the fact that we want to be able

to improve our relationship with the local chamber of commerce. We want to be able to know how to reach out to businesses more. You know, if you don't work in a sales or retail or wholesale business, sometimes you don't totally understand what turns them on, what makes them function, how do you reach them? Because a lot of us come from other backgrounds. Now, I came from a business background.

Before I retired, I ran a consulting company. And before that, I was an engineer. So for me coming, I came from a background of 30 years in industry. And then when I started working in education, which was a whole new world for me, but very exciting. I get asked all the time is, you know, people look at me and go like, you're an old man. Why are you in this school? You know, some people are pretty straightforward. But I've only been doing this for 12 years.

It would be a difference if I had been there for 30. Sure, exactly. Yeah, absolutely. So, and it's a very, but we definitely would love to have someone who from one of the business community they want to join in the city. We meet once a month. There are public meetings because it's commissioned. Everything we do is open to the public. And we look at the programs. For instance, we're in the process

of putting together the type of programs we're going to be doing in the coming 12 months for outreach to reach the public, you know, some more concerts and tables we're going to be doing in the coming 12 months to for outreach to reach you the public you know some more concerts and tables we're going to put up different activities we can participate in joining him and so we'll be we've come up with a list for the coming year now we're into the implementation phase and that's what you really need people because we have to have people to man the booth if we have a booth at need people because we have to have people to manage the booths. If we have a booth at a certain festival, we have to have someone standing there. The parents don't get themselves out, unfortunately. Absolutely.

You've got to have someone there. That's right. Exactly. That's right. And the beautiful thing about it is anyone who comes in, hopefully will have some new ideas of their own. Oh, I think this would be a good idea. For instance, one of the things that I was interested in was the fact that perhaps one of the projects would be

to have an artist compete to draw a mural in our city and then have a reciprocal one, someone from there, to come draw a mural on a wall here in Charlottesville. Those are the sort of things. Absolutely. That's a great idea. We have signs up.

We have streets that have been named for the sister cities, and we want to have that reciprocally located in the other cities. A lot of activities that are very, very interesting that, unfortunately, a large part of the population of Charlottesville don't know anything about. So that's the struggle. That's the continuous struggle is to bring familiarity with the work we do to the city of Charlottesville because, in my opinion, it's very, very valuable work.

And we want people to get involved. We want people to enjoy it. We want the citizens of Charlottesville to profit from the commission you have to be involved in some way to profit, it's an opportunity, but if you never go to events or you never know about it, then you're not profiting as much by it as a citizen, so it's wonderful if you can get more people to participate they can take advantage

of the opportunity to get to know these other cities. Or if not, sometimes maybe you don't meet the people from there, but you can experience their culture and what their world is like. That's a unique characteristic of the city of Charlottesville, the fact that

you go like, oh, they had this last week. I didn't know about it. After the fact. After the fact. you go like, oh, they had this last week. I didn't know about it. After the fact. After the fact. There's a lot of things that you realize after the fact. And so what we're trying to do is get ahead of that curve. Yeah. I'm curious about one thing.

So did you ever have any cities reach out to you and say, we'd like to be a sister city to the city of Charlottesville? That has happened. Here's what's required is how we got cities going. We need, first of all, a support group. We need to have a group of people who say, we have a connection with this particular city and this country,

and we would like to have that to be a sister city. But now that requires them to basically have established themselves as a support group to be willing to stand up to be able to help make it happen. For instance, several years ago when we were looking for a Spanish city, there was a group here in the city called Extentan Foundation who builds orphanages and schools. They're building schools and orphanages in Guatemala. And they basically thought, well, it would be a good fit because we work closer with them. They stood up as a community organization

to have a sponsor there. Dave Norris' Charlottesville Winnebough Foundation is another support group which helps make that sister-sitter relationship happen. Initially, Charlottesville High School was the group that basically got it started with Best in Song.

Okay. All right. So any city that we have or we want to have really comes from the citizens of Charlottesville. If there's a connection, there's a group who really feels strongly about a particular city or a particular country where we don't have a relationship and say, hey, we need to have a relationship with this city because we are from there or we know people from there or we like their culture, then they step forward and say, and there's a process, and there's a process for them to apply to submit certain documentation for consideration by the city council. And if the city council approves, then we begin the process. A city doesn't start off as a sister city initially. For instance, where we're still in the phase we call friendship city. It's sort of like getting engaged and then you know, maybe.

So we're in that phase with him. But yes, we will go through a phase that could be up to several years where we slowly begin to get to know each other. We have to determine if there's a fit. It's the same as when you meet someone and you're in love

and you get married. You've got to same as when you meet someone and you're in love and you get married. You've got to find out, are you compatible? Can you get along or what have you? Are you going to survive this whole phase? And so we're in that phase where we're telling her right now. They've been here. I've been there. We want to send a delegation there.

The language barrier is a little bit of a problem, but that can be overcome without a problem. That's part of it, I suspect. They're working hard to learn some English, and we have a lot of people here working hard to learn Spanish. It's a surprise to them that people in this area speak Spanish. And so we just want to be able to move this forward, but nicely and slowly. So

yes, if a group of people, let's say, any city they would think of, if we had a group of people from an Asian city or an Asian country that felt, oh, we have a giant population of people here, and we are willing to band together as a support group, then

they have an opportunity to apply, to submit that paperwork, and perhaps, when I look at the sister cities all over the United States, most cities, even smaller than Charlottesville, have four, five, six, some have eight or nine sister cities, and have ongoing exchanges. Other times the basis may be there's a university there that works closely with a university here. Or it could be a social organization. It could be a sports activity.

A variety of different reasons why people feel a connection. We've looked at cities in Argentina. We've looked at cities in Mexico, but we chose Weywood-Tenango. I wasn't on the Commission at the time that was chosen, but I think it's a great choice. But it requires getting to know them and them getting to know us. Finding that thing that's, you know, that reason for being connected. Because it's not always apparent up front.

Yep. So they are a sister city or still on the friendship side? They're still on the friendship side. Okay, okay. And how long does it take? What would you say is the process that maybe you guys get married? As long as it takes. As long as it takes.

As long as it takes. There is no. So there's no timetable. There's no timetable. Not before three years. Gotcha. Now, we do have that. You can't move up to the status of sister city before three years.

But that doesn't mean that we have to move forward. We can decide, hey, we can decide that the relationship as it is works, and we'll leave it there. That's the French, yeah. Yes. Do the commissioners vote on that? Who decides that? Is there like a vote, or how does that work?

The commissioners will make a recommendation. Okay. That change would be approved by the city council. Okay. So the commission recommends and the city council decides. Yes, yes, yes. Okay. And so because, you know, we do represent the city government.

Sure. So when I'm traveling, what have you, I'm working and speaking in the name of the mayor and the commissioners, I mean, of the city councillors. And they are quite actively involved. Whenever we've had visits here with our meetings, with our plans, for instance, our presentations. Mayor Wade has been involved before Mayor Wade. Snook was quite actually involved. So we've been very, very fortunate.

Many, many years ago, Mayor Walker did a trip to both Ghana as well as to Besson-Sorum. And we don't do too many. You know, over a period of 10 years, there's only been two or three trips. I use it for a very, very specific reason. For instance, on Mayor Wade's particular trip over there, the similarities between Bessarstone and Charlottesville, in terms of what we're trying to do, are very important. Bessarstone has given itself the mission to become a green city, completely green, a green city. And that's part of the whole thing that Charlottesville aspires to. So they talk about the type of streetcars they use,

the type of buses they use, the type of things they do with their buildings, a lot of different things that Mel Wade was able to sit down with different people to learn about how they're doing things over here because it is important. And, you know, from having attended many different city council meetings that almost historically when we're talking about new buses or we're talking about different things, people are

all concerned. You know, we want to get away from gasoline-powered buses. But, you know, that's just one of the many things that have to do with coming to Green City. Also, the fact that we are becoming essential for biotech and startups. Bessasson is also. So Bessasson is with the universities there and we have relationships between our university here and a university there. So Mel Waystrip, once again he was invited because of the 80th anniversary commemoration of the liberation of Besson's song

but he took advantage of that to work on issues that are very very important to the future of Charlottesville That's wonderful, that's fantastic and then we definitely have a couple people liking Amy Leiter liking the show this morning and then we have a comment, Dolores Clark

says it's wonderful to hear how Charlottesville is connected to other places in the world. It's so nice of my wife to say that. She is watching. Thanks so much for watching. Number one fan. I have one fan. You're number one fan.

You have many fans. Elizabeth Erpey is tuning in this morning. You have many fans. She's just number one. Dolores is your top fan, to be sure. Well, Edward, this has been fantastic. If people want to learn more,

where should they go to find out more about the sister cities? There are three quick answers to that. One is the Charleston.gov website. You can just go there and search sister city. All the information there about our cities, about the processes we go through when we meet, minutes for our previous meeting, as well as applications. Then there's a link also to cvillessistercities.org,

which is our own website, where we talk about more carried events. But more up-to-date, most, most up to date, would be Instagram and the one that I keep up to date myself is the Seville Sister Cities Facebook page. And where you'll see most of the pictures of all activities

being posted there. As a matter of fact, probably, I'm sure people are watching us through the Facebook page. Hopefully. So those are the three things that people can do to get in contact with us. My name is Edward Herring, and people can always find me at herringe.sharlottesville.gov. Oh, great. So thank you. Wonderful.

Thank you for having me here today. Well, thank you, Edward. Thank you so much for coming on. I. Oh, great. So thank you. Wonderful. Thank you for having me here today. Well, thank you, Edward. It's been an absolute pleasure. Thank you so much for coming on. I've learned so much. I appreciate it. I'm really appreciative of what you do and the work of the commission.

Thank you. Thank you. Have a good one. Thank you. Appreciate it. So absolutely, yeah. So Charlottesville Sister Cities Commission Facebook page. You can see, yep, we're on there.

The events are on there. You can see Mayor Wade's visit pictures on there. The events are on there. You can see Mayor Wade's visit pictures on there. So you can check that out. And lots of ways to keep up to date. Like Edward said, don't be that person in Charlottesville who says afterwards, oh, I didn't know that was happening. I missed that. Be the person who knows in advance that it's happening and says,

I'm going to go to that. Exactly, exactly. It's amazing because, like i said you know i've heard of that program the sister city and it just it never occurred to me first of all i didn't know how it worked and it never occurred to me you know which were the cities for charlesville even though you said it's somewhere on the road that's there you know it's one of those things i probably drive by there not really paying attention and didn't realize it yep and didn't realize it. And just how much and what connections there are there. Which is fantastic.

Some have been there for years. I didn't realize how long some had been connected to us. Which is amazing. So there you have it. Star Wars Sister Cities to be sure to check it out. And Friendship City. Which again, I didn't know how that worked.

Well that one has a fantastic theme. So, where we're in Tanandro, does it stop like, you know, H-U-E, H-U-E? It's like one of those classics. You wonder, like, it may be a small city, but you wonder how long it's been around. Yeah, exactly. In Guatemala.

In Guatemala. It must be pretty neat. And so now we've got our finance topic, also known as, and, Xavier, what is going on? What is going on? Topic. Well, I mean, I guess the important thing is, as most people already know, the Federal Reserve lowered interest rates by 50 basis points, right? And so, you know, there's been quite a lot of chat about, you know, why 50? You know, what does that mean? Why did they do 50? Why didn't they do 25, right?

And where are we on that cycle of the Fed continuing to lower rates? I mean, do you think there's anything to read into the 50 as opposed to 25? So, yes, I mean, there's the possibility, right? But I'll be honest with you. I come from a different camp a little bit on that. And maybe because, you know, I've lived through kind of longer time period and therefore I've seen interest rates really, really high.

I've seen interest rates really, really low. And so for me, you know, 5% interest rates really, really low. And so for me, you know, 5% interest rates is not what I would call a death interest rate where, you know, financing can't be done, right? And the economy can't grow at 5%, right? I don't see it that way, right? So my question is, you know, why are we doing 50 basis points off the bat? So in other words, if you felt the way you do, why didn't you do 25 last time? Why didn't you do 25 and 25? And then do 25, right? And see where that gets you. And I think that will be much more plausible for everybody. You know, they did 50, but I mean, you have to look at what happened to marketability. You did 50 basis

points. And here's what's really interesting, right? The stock market went up. It's gone up since then. And the bond market's gone down, right? So you sit there and go, wait a minute. So they lowered interest rates, which is supposed to be good for bonds. And yet bond market goes up. And the interest rate goes up.

Prices go down. So it's gone. Which is the opposite of the direction we were. Exactly. So they lowered the short-term rate. And then. right and the stock market went up right so the stock market's sitting there saying all right cheaper financing is good right um obviously they didn't see a situation where they felt that the economy is is hugely at risk and therefore the fed is saying oh my lord you know the economy is really really really struggling. I got to do 50. They didn't perceive it that way you sit there and go, oh, look, this number indicates in the past,

90% of the time meant we were going through a recession, or this was going to happen, and it's not happening, right? So there's reasons behind that. And I think every economist and people that look at that are starting to sit back and say, wait a minute, I think the statistic we were using in the past is no longer valid here. So we need to figure out. It's no longer a leading indicator. Exactly.

That's right. Leading indicator. That's a perfect word. It's no longer telling us what's going to happen with the kind of certainty that you would need. That's right. Exactly. And so I think that's part of it. I think that the markets are looking and saying these indicators aren't as predictive as they used to be, right? And I think, you know, and there's a number of reasons for that, right?

And I won't get into all of them. But on the fixed income side, the challenge you have, which people don't understand, and, you know, especially on the mortgage side, is that the fixed income market from January to two weeks ago, interest rates already came down. I mean, the 10-year already was down about 60, 70 basis points. The 30-year was down 60 or 70 basis points. So basically, the 50 basis points that the Fed cut was already baked in into long-term rates. So now they cut it and they say okay so where are we? What is going on? And do we really

do really expect? So here's here's kind of the... If I may, I think what people need to realize is that the the Federal Reserve controls the discount rate. Yes. There is one particular when you hear the Federal Reserve controls the discount rate. There is one particular, when you hear the Federal Reserve lowering the interest rate, there's a few tools that they have, but they do not control all the interest rates in the market. The bond market is a market, and just like if you were to go to a market, you're buying and selling stuff, and then you end up with a price for something, right? You know, in other words, if you've got five people selling tamales and then five more people come in and start selling tamales, the price might go down because there's a buy and

sell that determines the price of the tamale. And the same thing happens in the bond market. There is a buy and sell that determines the price being the interest rate of bonds. The Fed doesn't control every single interest rate on every single bond. So the bond market gets information the same way we do. So if you're here for six months, oh, the Fed, they might cut rates by 50 basis points. Well, the bond market starts moving in that direction because if you knew that the tamale guy down the street is going to cut his tamale by $2 in a week and you're selling tamales, what are you going to do? You're going to cut yours by $2 today. week and you're selling tamales, what are you going to do? You're going to cut for yours by $2 today. So you react. So it's not like everybody woke up. It's not like the bond market woke up that Wednesday and said, oh my goodness, they're cutting rates by 50%. The fact that

everyone was talking about it means that they are reacting. So that's kind of what happens there. That's right. Exactly. And you also have to think about the fact that the long-term interest rates are also very connected to the inflation rate. So as inflation rates became to come down, right, long-term rates became to come down, right? And so that's what happened throughout the first half of the year. Now, one of the things that most people are talking about is if the Fed continues to cut short-term interest rates or discount rate, obviously when the Fed cuts short-term interest rate to discount rate, it lowers the three-month treasury bill. So any short-term bond, there's immediate impact, right? So what they call the yield curve, meaning that from the three-month treasury bill all the way to the 30-year, that curve begins to what we call normalize. Normalize means that short-term interest rates should be lower than longer-term rates

because it's a short term. It's less risky to lend somebody for three months than it is for 30 years, right? Because in 30 years, there's a lot that can happen, and he may not pay you back. And it's like, uh-oh, I took a risk. Therefore, I need to charge him more in order to make sure that I'm willing to take that risk of lending for 30 years. The curve has been inverted for a very long period of time. And there's another catch. Typically, the curve inverts, meaning there's going to be a recession. And that inversion lasts no more than three or four weeks. We've had it for over a year, right? And we haven't

seen a recession. By inversion, that means short-term interest rates are higher than long-term interest rates, which in theory should not be the case. Correct, exactly. So if we begin to see a curve that quote-unquote normalizes, that means becomes normal in the sense of how curves should be, short-term rates are lower than the longer-term rates, right, there's a typical spread between yield spread, you know, basis point spread, whatever you want to call it, between short-term rates and like the 10-year to 30-year, right? And that spread, right, is typically like between, let's say, the two-year or even sometimes the three-month T-bill to 10 years, is about 100 basis points. So if the Fed really does what it wants to do, which is lower rates to about 3.5% to 3.25%,

and you add 1% to that, which is 100 basis points, that means that the 10-year should be trading at 4.75%, 4.5%. But the 10-year is trading at 3.7%. So going forward, when you look at it, say, there's a good probability that short-term rates, right, I mean long-term rates, may begin to inch up as opposed to continue to come down, right? So there's a situation where you say, all right, mortgage rates should be coming down because the Fed lowers rates. Well, no, the mortgage rate is based off the 10-year most about a mortgage is a long term it's either a 15-year mortgage over 30 right right yeah and but it said no matter what mortgage it is it's a long term that's correct that's correct but usually a new money and they're being paid back over a long period of

time not in two years that That's correct, yes. And the average life of a 30-year mortgage is 10 years because you're paying back principal. And so the 10-year is the key number to look at when you look at mortgage rates most of the time. So, of course, if the Fed cuts by 50 but the 10-year begins to move up in rate, you're not going to see mortgage rates come down. If they already come down, I mean, remember, rates were close to 8% at one point. The fact that they're 6.5. They're now like 6, well, 6.25, I think is the last time, right? So they've come down already.

Now, just because the Fed cuts 50 basis points, you're not going to see from 6.25 all the way to 5.75. It's just not going to happen, right? And like I said, the 10-year has been going up in rates. So there's a good chance that mortgage rates may begin to rise sometime in the near future, right? Although yield spreads have been very wide on the mortgage market, so that's a different story. So my feeling is that one of the areas that concern me, right, is the inflation part, right? I mean, everybody seems to be extremely happy that inflation is down to, you know, 3% to 3.5%. Well, the Fed really is targeting this 2%, and the Fed's target should be 0% because why should we have inflation in the first place? I know, we've always had an issue as to why we're intentionally – Why are we happy about inflation?

There should be no reason to have inflation, period, right? But we're at 3, 3.5%. Of course, we came down from 9% to 7% to 3.5%. Everything looks rosy, right? But the answer is no. 3.5% is an enormous impact on your daily

purchases of especially food, rent, et cetera. Especially because you've got to remember that this is 3 and a half compounded on what you've already seen. In other words, four years ago, you were paying $100 for something. Four years later,

you're paying $125. I think you went at it all together. You're paying $125 for something. If I tell you, well, now things are great because next year, you're only going to pay $128. That's 3% of $120 that's going up. I know.

I'm trying to make it simple, right? Let's say it was $5, that 3%, right? In other words, you're not really helping me that much. I'm sitting there saying, wait a second, four years ago I paid $100. Now I'm up to $125. But you're telling me everything's rosy because next year I'm only going to pay $130 instead of $150. Exactly. And so, wow, that's still more than $100.

In other words, if I'm struggling to make ends meet, that 3.5% number may be better than 9, but it's not exactly a – it's not a number that's improving my situation. Yeah. It's a number that's saying, well, your situation won't get as much worse as you thought. Yeah. it's a number that's saying well your situation won't get as much worse as you thought yeah so so my viewpoint is i think we're we're we're kind of stuck with inflation between three and three and a half percent right going forward right because and you've and and let's be honest you take a look at both um the both people that are running for president right their economic programs are both inflationary. I mean, in one way, one in the other way.

So really, we're not really solving. And by bringing back manufacturing to this country is fantastic, but it's also inflationary, right? So you have to think about that. And the sense is, if you're going to continue to have an inflation of 3.5%, then there's no way the Fed's going to cut rates all the way down to three and three quarters percent to three and a half percent unless there's something on the other side. And the only other side is, yeah, the economy's really going to struggle, right? So either they're perceiving that, that the economy is going

to struggle sometime in the six to 12 months, right, which won't bode well necessarily for the stock market because eventually, I mean, we have two very strong years in the stock market. Stock markets don't go up 20% every single year forever. Sooner or later, you get a correction in there somewhere, right? So my viewpoint is that 50, I would have done 25 and then 25. I would have maybe done 25 a little earlier and just see how the economy recuperates and how the markets react to that. But listen, they know more than I do. They see more than I do. So I'm sure there's a reason for the 50. No, no is debatable. Wow. So,

you know, I guess I sit back and say, from a perspective of kind of portfolio construction, on the fixed income side, there's a numerous amount of work to be done because things are changing. I mean, at this point – We've been in a two-year cycle of interest rates going up, which means that would lend you to certain parts of the bond market, namely places where as interest rates go up, your coupon goes up, which is the floating rate sector. But now you don't want to be in a floating rate sector if rates go down, at least not to the degree that you were in the past two years. And just like we saw a big shift in 2022, you're going to have to make some changes in 2024. And the shape of the yield curve, right?

That's very important because depending on how that shape shifts, right, you can make investment decisions to obviously, you know, appreciate your portfolio through that. And on the, you know, on the stock side, again, you know, a good diversified portfolio is very important. If rates come down,

then you would hope, and you've seen that a little bit lately, you would hope that small cap stocks begin to do better because they have been really doing lousy for the last three years. Well, to add to the reason for that, right? So small cap stocks are smaller companies.

If you imagine, let's say you as your small business owner went out to the market to borrow money, what is a bank going to charge you? You're looking at 10%. Right. 10 plus, right? If you're Apple and you're going to borrow money, they lend it to you, 3%, 4%.

In other words, you're not paying the same high premium that a small company is. So high interest rates hurt smaller companies a lot more than they do larger companies. Correct. So now you see the reversal of that. Smaller companies may actually be able to borrow to do projects again where perhaps they were not doing that the last couple of years

because if you have to borrow at 12%... Don't projects even survive? Survive. I mean, sometimes it's like, you know, especially think of biotech companies, it takes them a very long time to get approval, right? So it's like they got to last five, six, seven years and something like funding just goes away.

So if you can borrow at cheaper rates, you may be able to survive and finally come up with a product that, wow, this is a life-saving product. Boom, that kind of company goes through the roof. If you're paying 9%, you may not make it. Exactly. So from one side, it's like everything else, there's pros and cons. On one side, people say low rates, like everything else, you know, there's pros and cons. You know, on one side of the market, on one side, people say low rates. That's great because I can borrow low rates.

But if you're on, you know, if you're a senior citizen and on fixed income, right, it's like you were enjoying being able to earn 5%, 6%, 7%, 8% in a very safe portfolio. As rates come down, now you have to say to yourself, if I need 5%, 6%, 7%, how do I do it? And sometimes the problem is the only way to do it is then to go into the stock market, high dividend-paying stocks. But again, is that what you want? You don't want to have to take that kind of risk. Exactly. I mean, I think people, they look back and see the lower rates that we had in the 2010s. And yes, if you were a borrower, that was great. If you got your mortgage at two and three quarters, you were loved. That was 2020. That was 2020.

That's what I try to tell people too. It's like, you know, some people get extremely lucky, two and three quarters, 3%, three and three quarters. Some people got three, though, three, three quarters three and that was really right like during that covid era what i'm saying is in other words in the 2010s if you were a borrower maybe you liked some of the rates you were getting back then but if you were a saver i mean we were there yeah fasting for people in the 2010s if you needed income you had no choice but to go into the stock market. I mean, when rates were extremely low in the 2010s and people needed 3%, 4%, you had to go into the stock market and get some dividends or else you were going into high-yield bonds. Dividends, some growth, and or you had to go into riskier assets

even in fixed income in order to achieve that. In other words, you couldn't buy treasuries and get the 4% to 5% that you needed as a senior citizen of income out of your portfolio. For the past few years, you've been able to do that. Yeah. Right? So the way these things shift, it's not necessarily better for everybody that rates are coming down.

There's going to be a subset of people like, oh, man, I have to now – I have to take more risk to get the same income generation that I was getting beforehand. Yeah. I mean, you're right. I mean, obviously, if you're purchasing a home, right? Then you want the lower. Even though the real estate market is a whole different market by itself also. But if you're purchasing a home and rates are coming down, you sit there and go, wow, maybe now I can afford that particular home. Exactly.

As to whether that house goes up in price, it's a different story. Everything else stays the same. Yeah, you say to yourself, wow, I can now that particular home. As to whether that house goes up in price, it's a different story. But all else equal, yeah, you say to yourself, wow, I can now buy that home. I can afford it. So that is helpful. But there's always the other side. It's like somebody else who's living off their savings. They're sitting there going, wow, I little need to pull my principal. Or take more risk.

Or take more risk, yeah. So there's a pro and con to everything. But I'd be interested to see. I mean, I think most people, most economists now expect them to continue to cut rates a little bit in here. And so I'm going to sit back and wait and see. Yeah, we'll see whether this was a one and done or if they get that. I mean, I think they will, but I'm not, again,

I'm not in the camp that they should. I mean, I've long been of the opinion that you look at the history of interest rate movement from the Federal Reserve, and it takes nine months to a year for the economy really to, I think, see the impact of an interest rate change. But that needs to trickle through the market. It's not an immediate thing to see the impact of an interest rate change. Because that needs to trickle through the market. It's not an immediate thing to see the impact. So I always wonder why they do a bunch in a row. Because I don't know, I feel like the track record is not stupendous on that. I always say that to me the economy is like a big barge. It's very hard to move any direction or make it stop, right?

It takes a long time, right? It's not a speedboat where you can turn it really quickly. And you're absolutely right. You move little by little, but, you know, it might take six, eight months. And before that, it's like, uh-oh, we went too far. And now we have to suffer the consequences. That's why I'm a little dubious on the no. I said, for sure, I think the Federal Reserve thinks they know more than Xavier.

Whether they actually do remains to be seen. Well, yeah. That's always whether they actually know more than the economy itself remains to be seen. Well, I think part of it is, listen, they have a lot more data than I have, and maybe sometimes having too much data is not necessarily good. Let's be honest. Sometimes the more you read and the more data you have,

the more confused you become. It's like, wait a minute, you've got 50% of people saying this, and they show me the data. 50% of people saying this and show me the data, so which one am I to believe? Exactly. Sometimes you've got to take a step back and say, let me just think about this for a while and not just look at that and say

yeah here's where it's going but we'll find out it's what makes our life interesting exactly, that's why we're able to have a finance topic otherwise we'd sit here and say it's all good, alright, see you next week but thanks for that

you're welcome always fun chatting with you same here thank you Rosalia De Rosalia Cordaro I've been watching from Miami hopefully it is nicer weather in Miami than it is here Miami is on the other side

of the storm for all we know they could be having nice sunny weather and have no clue that there is a hurricane on the other side. Hopefully they're enjoying it. Thank you for tuning in and taking some time out of

the Miami weather to join us. Thanks to everyone who tuned in today. It was wonderful. Thanks to Edward for coming on and teaching us a little bit about the sister cities in Charlottesville. Thank you all for tuning in and joining us this morning. Next week, we're going to have on Liz Nabi from Alight Flowers,

as well as Matthias from Matthias. We're going to be coming out. Maybe we'll talk a little. Next week, it'll be October. So maybe we'll do some Oktoberfest. We'll see what Matthias has in store for us. So be sure to come check that out. Thanks to you for joining me on the show today.

Always fun. It's always a pleasure. Always a pleasure. Thanks to Emergent Financial Services for presenting and our fantastic partners at Charlottesville Opera, Mattias, your own realty credit, Sirius Insurance, Forward Atalante. Thank you all for tuning in.

Do your best to stay dry this weekend. I know it will be a challenge, but hopefully by the time we see you next week, we will have dry and maybe some beautiful fall weather. But until that time, as we like to close it out on the show, hasta mañana. ¡Suscríbete al canal!