S4-15: JetBlue Blocked by Antitrust Laws, Soft Landings and Savings Rates

Meghan, also known as the Family Finance Mom, discussed the implications of antitrust law, particularly in the context of the blocked merger between JetBlue and Spirit. They explained that a Federal judge had blocked the merger on anti-trust grounds, emphasizing that antitrust law aims to protect consumers from anti-competitive practices.

Meghan clarified that the decision to block the transaction was based on potential negative impacts on consumers, such as price increases on specific routes. They also mentioned the possibility of the companies appealing the decision, divesting certain assets, and predicted an increase in corporate merger activity due to economic conditions. Towards the end, they announced their intention to gather questions about antitrust law for a future blog post.

Meghan discussed the implications of a 'soft landing' versus a recession in the context of Fed discussions. They explained that a recession is defined as a decline in GDP, while a soft landing could mean a decrease in inflation and a slowdown or muted growth level, without a decline in GDP. Meghan also elaborated on the drivers of inflation, including demand and supply side issues, and how a combination of both had contributed to inflation over the past two years.

They suggested that a soft landing does not necessarily mean a decrease in unemployment, as there could still be layoffs even in this scenario. Meghan also cautioned that the current economic trajectory, marked by anemic growth, is not typical or a good sign. Meghan discussed the market's expectations of interest rate cuts and how the latest Consumer Price Index (CPI) report, which showed an increase in inflation, might affect these projections.

They also explained the concept of savings rate, describing it as the percentage of income saved out of total earnings. Furthermore, Meghan clarified the calculation of interest rates on savings accounts, detailing how they are quoted as annual percentage rates (APRs) and how they are compounded monthly or daily based on the account's average balance. They concluded the discussion by opening up the floor for questions.

Meghan discussed the importance of teaching young children about money. They emphasized the need for children to understand basic mathematical concepts such as numbers and value before they can comprehend more abstract financial ideas. Meghan highlighted that children should understand that money is earned and has value. They suggested that parents can model saving and matching money to teach children about interest.

Meghan recommended starting these conversations when children are around three years old and stressed the importance of establishing good money habits by the age of seven. Meghan also promised to link a blog post that provides more detailed information on the subject.

Book Recommendation: Make Your Kid a Money Genius (Even if You're Not) by Beth Kobliner

Related Post: 4 Simple Money Lessons All Kids Should Know

Meghan discussed the Family Finance Mom book club's choice, "The Two Parent Privilege," an economics professor's research on the impact of marriage and family structure on economic outcomes. They highlighted the author's data-driven approach to showcasing the decline of two-parent households, particularly among those with less education, and the potential solutions proposed to reverse this trend.

Meghan also emphasized the importance of upcoming economic data releases, including December retail sales, weekly jobless claims, and the University of Michigan's consumer sentiment survey. They stressed the impact these numbers can have on people's spending habits and the overall economic implications. Meghan also noted the start of earnings season and the importance of corporate earnings and interest rates in stock market performance.