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Diesel Prices Near Record Highs as Energy Risks Build · The Financial Exchange Show

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Speaker 1: is the Financial Exchange with Chuck Zotta and Mike Armstrong.
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Speaker 3: Well, it is Chuck and Mike. It's both of us.
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Speaker 3: Tucker's here, too. And we're going to kick things off
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Speaker 3: looking at what's going on in markets today, where the
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Speaker 3: S & P 500 is up 55 point a roon.
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Speaker 3: He's at 77.22. So that's awesome. Dow Jones Industrial Average
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Speaker 3: up 487 points, also awesome. And the NASDAQ Composite up
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Speaker 3: 264 points, also awesome. So you get a nice little
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Speaker 3: rally that's taking place in the major indices. Russell 2000
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Speaker 3: is being left behind as it's basically flat today. So sorry, Russell,
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Speaker 3: but just not your day. 10-year Treasury yields off their
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Speaker 3: highs now down 4.2 basis points to 4.754%. We've got
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Speaker 3: the dollar index down 0.55% to 99. This largely on
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Speaker 3: the back of the yen strengthening 2% against the dollar index.
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Speaker 3: I'm guessing there is some kind of intervention that's happening
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Speaker 3: or will happen shortly that we'll hear about because the
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Speaker 3: yen got back up to 160 in the last couple
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Speaker 3: days and now has promptly fallen about five points. So
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Speaker 3: we'll see what's going on there. Crude oil. West Texas
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Speaker 3: Intermediate is up $ 1. 19 a barrel to $ 92. 20. AAA national
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Speaker 3: average for gas prices up another $ 0. 02 overnight to $ 4.
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Speaker 2: 14.
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Speaker 3: The big news, though, diesel is up $ 0. 10 overnight to $ 5. 78,
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Speaker 3: now just $ 0. 03 away from the all-time high. Barring crazy
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Speaker 3: developments in the next six hours, diesel is going to
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Speaker 3: take out the all-time high tomorrow.
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Speaker 2: Yeah, I just got my oil tank filled last week,
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Speaker 2: and I'm feeling pretty happy that they came on by.
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Speaker 3: Yeah, I got to tell you, the distillate inventories... particularly
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Speaker 3: in the East Coast, are problematic right now. And based
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Speaker 3: on what we've seen in wholesale diesel prices, there's a
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Speaker 3: pretty good chance we clear $ 6 a gallon next week
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Speaker 3: on diesel. Gasoline has its own issues, maybe coming like
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Speaker 3: four to six weeks out. We're not there yet. But
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Speaker 3: the diesel side of things is really problematic right now.
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Speaker 3: And the proximate cause, there are three things that can
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Speaker 3: fix this. The biggest thing that can fix it is
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Speaker 3: if Russia and Ukraine somehow ceasefire. Then you get Russia
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Speaker 3: being able to resume refinery operations that have been disrupted
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Speaker 3: for most of the last four or five months that
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Speaker 3: have caused them to go from a net exporter of
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Speaker 3: diesel to a net importer of diesel. That would be
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Speaker 3: number one in terms of turning this around. Even then,
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Speaker 3: it's still going to be dodgy for probably four to
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Speaker 3: six weeks just because of transport times and things like that.
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Speaker 3: Number two, China's got a bunch of refinery capacity that
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Speaker 3: for some reason, even though they keep looking like they're
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Speaker 3: going to spool it up, they just haven't yet. So
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Speaker 3: if China spools up its refineries, it can help the
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Speaker 3: global picture. Third, remember, the issue that we're dealing with is...
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Speaker 3: It's more a refined product shortage than crude at this point.
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Speaker 3: One can lead to another, but if you get more
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Speaker 3: heavier oils coming out of the Persian Gulf, as well
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Speaker 3: as if refineries there can spool back up, that can
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Speaker 3: give you some relief as well. But I got to
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Speaker 3: tell you, you take a look at the East Coast
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Speaker 3: distillate inventories right now, and I pulled the chart overnight
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Speaker 3: just because I... This is what Chuck does. Literally, no joke,
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Speaker 3: I woke up at 3.45 this morning, and I'm like...
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Speaker 3: I need to check the East Coast diesel inventory.
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Speaker 2: It wasn't a normal time. Nobody was expecting, like, yeah,
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Speaker 2: around 3.30 p.m. yesterday, I decided to go research this. No,
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Speaker 2: everybody that heard this was like, yeah, all right. So
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Speaker 2: Chuck was up sweating in the middle of the night.
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Speaker 2: I wasn't sweating. East Coast diesel.
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Speaker 4: See, I get up in the middle of the night
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Speaker 4: to let our... 13-year-old dog out because she can't make
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Speaker 4: it through the night to pee, while Chuck at that
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Speaker 4: time is checking out the charts.
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Speaker 3: Legitimately had a dream that I was... This is how
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Speaker 3: it happens. I had a dream that I was playing
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Speaker 3: in a men's league softball game. And at the men's
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Speaker 3: league softball game, I got an alert on my phone
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Speaker 3: about East Coast Diesel. And I woke up, not a
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Speaker 3: cold sweat. It was actually, I was quite comfortable, but
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Speaker 3: I woke up and I said, Yeah, I need to
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Speaker 3: take a look at that based on what we had
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Speaker 3: seen yesterday and the last couple days in pricing. And
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Speaker 3: here's the deal. Normally at this time of year, if
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Speaker 3: you look at the five-year average for East Coast distillate inventories,
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Speaker 3: you were running around 32 million barrels. Right now you're
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Speaker 3: just under 20 million, so you're running like 35% below
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Speaker 3: the norm. The more concerning thing, Normally, you're still building
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Speaker 3: distillate inventories for the next two weeks heading into the
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Speaker 3: busy season for fall shipping and harvesting and all that stuff.
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Speaker 3: We've been drawing in the East Coast for the last
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Speaker 3: four weeks. So we've gone from 25 million barrels down
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Speaker 3: to around 20. I don't know where tank bottoms are
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Speaker 3: for East Coast distillates. That is beyond my level of expertise.
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Speaker 3: But what I can tell you based on what I
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Speaker 3: see in general, you probably don't have runway for another
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Speaker 3: 10 weeks of draws, which is what we normally see
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Speaker 3: at this time of year. And so I'm really a
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Speaker 3: little bit nervous for where diesel prices and home heating
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Speaker 3: oil prices can go in the next six to 10 weeks.
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Speaker 3: Hope I'm wrong, but the inventories are at levels that
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Speaker 3: you just don't see this time of year and that
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Speaker 3: are pretty problematic as a result of that.
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Speaker 2: Could we talk, maybe we can talk to like, I
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Speaker 2: know GasBuddy has a bunch of energy analysts, somebody that
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Speaker 2: can talk a little bit more about what we are
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Speaker 2: facing right now, because again, it's September. You're going to
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Speaker 2: be filling those fuel tanks in your basement pretty darn
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Speaker 2: soon around here. And, yeah, it could be pretty shocking
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Speaker 2: for folks.
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Speaker 3: I got a dude who runs a blog.
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Speaker 1: Oh, yeah?
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Speaker 3: These are ideas. Enough credentials for me. To be fair,
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Speaker 3: I played that up a little bit. He works, like,
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Speaker 3: in the energy industry. Like, his blog is literally on, like,
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Speaker 3: oil inventories and stuff. It's free, by the way, if
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Speaker 3: anyone wants to see it. His name's Tim Dollinger, and
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Speaker 3: he runs a weekly, like, update. A weekly blog on the, basically,
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Speaker 3: oil inventory levels. He's been doing it for, like, five
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Speaker 3: or six years.
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Speaker 2: Yeah, we'll have him on.
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Speaker 3: And... I don't know. He'd be a good guy to
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Speaker 3: reach out to, though. His name's Tim Dollinger.
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Speaker 1: Dollinger.
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Speaker 2: All I know is I've got two cords of wood
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Speaker 2: being dumped in my driveway in a few weeks because
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Speaker 2: I plan on burning a lot of wood this winter.
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Speaker 3: Thought you were going to build a house.
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Speaker 4: No.
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Speaker 2: No.
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Speaker 1: No.
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Speaker 2: Don't know how to do that. I do know how
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Speaker 2: to put sticks into a wood-burning stove, though. Got that much.
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Speaker 2: And then lighting it on fire. That sounds good. That's
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Speaker 2: about where my skill set ends.
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Speaker 3: This dovetails nicely into a piece from the Wall Street Journal.
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Speaker 3: Why Trump's Venezuela oil grab is no quick fix for
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Speaker 3: gas prices. The big thing is that the increased production
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Speaker 3: is not going to happen right away.
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Speaker 2: And that's that's it.
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Speaker 1: Yeah.
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Speaker 2: Furthermore, Venezuela is not a massive source for refinery capacity
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Speaker 2: and their infrastructure is a bit of a mess.
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Speaker 1: Yeah.
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Speaker 2: So this could be very impactful a decade from now.
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Speaker 3: Yeah, there's the possibility that over the next 10 years,
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Speaker 3: you could see a significant uptick in oil that's exported
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Speaker 3: from Venezuela, most likely towards the United States and other
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Speaker 3: parts of the Americas. But it's going to be slow
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Speaker 3: progress just because the infrastructure is so dilapidated. The oil,
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Speaker 3: by the way, that is in Venezuela is largely heavy,
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Speaker 3: sludgy stuff, much like the Canadian oil sands. You can't
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Speaker 3: get that stuff into the Strategic Petroleum Reserve generally. Most
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Speaker 3: of the oil engineers that have talked publicly about this
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Speaker 3: basically say it's just too sludgy to be able to
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Speaker 3: pump in and out of those salt caverns, and so
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Speaker 3: it's not really feasible for it to go in there
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Speaker 3: as part of the SPR either. So we'll see what
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Speaker 3: develops over kind of a more extended period of time,
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Speaker 3: but if you've ever worked in the oil industry, you
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Speaker 3: know that it's not just, hey, we're going to go
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Speaker 3: down to Venezuela and the oil is going to be flowing. No,
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Speaker 3: it takes a little time, especially in Venezuela which is
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Speaker 3: not exactly a state that has strong historical controls and
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Speaker 3: protections for private enterprise doing business there is the nice way.
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Speaker 2: Of putting it way to put that delicately it's.
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Speaker 3: The nice way of putting it yeah That couldn't have
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Speaker 3: possibly offended a single Venezuelan. The not nice way is, hey,
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Speaker 3: the Venezuelan government has generally expropriated any kind of private
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Speaker 3: entity whenever threatened with any kind of financial problems. Okay,
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Speaker 3: it's ours now. Let's take a quick break. When we return,
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Speaker 3: we're going to talk big tech next.
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Speaker 3: All right, so the New York Times has a piece.
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Speaker 3: It's titled, Why the Courts Struggle to Tame Big Tech. Subheader,
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Speaker 3: After finding antitrust violations, federal courts have been reluctant to
10:44
Speaker 3: impose harsh sanctions. They fear meddling in markets where technology
10:47
Speaker 3: is racing ahead.
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Speaker 2: That's a stupid reason.
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Speaker 3: Well, then get off the bench. Like, this is the
10:53
Speaker 3: business you've chosen. Like, we all, in every job, I
10:57
Speaker 3: use that quote a lot, because in every job, There's
11:00
Speaker 3: a part of it where you go, like, I can't
11:05
Speaker 3: believe I have to do this. Like, there's parts of
11:08
Speaker 3: every job that you don't like, that are challenging, that
11:12
Speaker 3: are hard, that scare you, that whatever. But ultimately, you
11:16
Speaker 3: get paid for those parts of the job. You don't
11:18
Speaker 3: get paid for the easy parts that you like to do.
11:21
Speaker 3: You get paid to show up and make the hard decisions.
11:24
Speaker 3: And just being like, well, we found wrongdoing here, but
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Speaker 3: I'm just not sure that I'm the person to punish them,
11:32
Speaker 3: then get out.
11:35
Speaker 2: Is that what they're saying? Because I don't think that's
11:37
Speaker 2: what they're saying. What are they saying? I think what
11:39
Speaker 2: they are saying is that This company, while we agree,
11:44
Speaker 2: was guilty of monopolistic behavior in the past. Their power
11:48
Speaker 2: has been weakened by the pace of change in technology,
11:51
Speaker 2: so we don't think there's a punishment. I don't think
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Speaker 2: that's the right conclusion. I don't think that's what they're saying.
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Speaker 2: You think it's just wimpiness?
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Speaker 3: Yes, I think it's wimpiness. Institutionalized wimpiness. What else could
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Speaker 3: it be? I mean, you find wrongdoing in antitrust cases,
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Speaker 3: and then you say, well, we're not really going to
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Speaker 3: impose anything.
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Speaker 2: What are we doing?
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Speaker 3: Why do we have the trial then? If the case
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Speaker 3: is you found the wrongdoing that the prosecutors brought as
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Speaker 3: a possibility. Mm-hmm. and you say, yes, this was wrong,
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Speaker 3: but we're not going to do anything, then what's the
12:27
Speaker 3: point of having the trial?
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Speaker 2: Look, I'm immensely frustrated by it. I'm immensely frustrated by
12:32
Speaker 2: the conclusions that they draw. I don't really see it
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Speaker 2: as my job to second-guess a judge in their conclusions,
12:38
Speaker 2: but time after time.
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Speaker 3: That's exactly what we do on this show. We second-guess everyone.
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Speaker 2: Time after time, cases have been brought against big tech companies.
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Speaker 2: They've been found guilty in those cases. Nobody really has
12:52
Speaker 2: any doubt that their behavior was inappropriate and in most
12:57
Speaker 2: cases illegal. And then judges fail to seemingly do anything
13:03
Speaker 2: about it. And I find that immensely disappointing. And it
13:06
Speaker 2: just makes me question, like, is the problem with the judges?
13:08
Speaker 2: Is the problem with the laws on the books?
13:10
Speaker 3: Maybe it's with the laws.
13:12
Speaker 2: What is the problem here? Because everyone seems to hate
13:15
Speaker 2: these companies, hate what they've done to society, agree that
13:18
Speaker 2: they abuse our laws, and... We just buy their way into,
13:26
Speaker 2: you know, not guilty for or even when they do
13:30
Speaker 2: get found guilty by their ways into no punishments.
13:32
Speaker 3: Because I guess what I get to is like you
13:35
Speaker 3: think about antitrust recently and the only two cases that
13:39
Speaker 3: I can remember where and these were merger cases. These
13:42
Speaker 3: weren't after the fact. These were in advance. Like, we
13:45
Speaker 3: talk about, you know, oh, OpenAI or NVIDIA's buying Hugging Face,
13:50
Speaker 3: which you take that headline and give it to, like,
13:52
Speaker 3: someone back in 2002, and they're like, what's a Hugging Face?
13:55
Speaker 3: You know, like, forget that. But no one even blinks twice.
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Speaker 3: SpaceX is buying Cursor for $ 60 billion. No one even blinks.
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Speaker 3: But you know what? You tell, you know, Spirit Airlines
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Speaker 3: that either Frontier or JetBlue wants to buy them, Oh,
14:13
Speaker 3: we can't have that. There's going to be too much consolidation. Well,
14:16
Speaker 3: was there too much consolidation when Delta bought Northwest? Was
14:19
Speaker 3: there too much consolidation when United bought Continental? Was there
14:23
Speaker 3: too much consolidation when American bought US Air?
14:26
Speaker 2: No, there wasn't.
14:27
Speaker 3: So what's changed? Well, like, oh, well, okay. So now
14:31
Speaker 3: the attorneys for Spirit are going to argue, hey, if
14:34
Speaker 3: you don't let us merge, we're going to be out
14:36
Speaker 3: of business shortly. Okay, and the judge doesn't buy it,
14:39
Speaker 3: and then Spirit goes out of business. So, like, we
14:42
Speaker 3: shoot that one down.
14:43
Speaker 2: What's the Paramount merger right now?
14:46
Speaker 3: They're buying... Warner Brothers Discovery. Warner Brothers Discovery.
14:49
Speaker 2: So, like, I might not like it, but do I really...
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Speaker 2: You think that that's a bigger problem than these tech
14:55
Speaker 2: companies expanding uncontrollably?
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Speaker 3: You've allowed all this other stuff, okay? And then the
15:00
Speaker 3: other one that really, like, grinds my gears and is, like, really,
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Speaker 3: you know, getting me even, like, 10 years later.
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Speaker 2: It was longer than that. How long ago was this?
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Speaker 1: 10 years.
15:10
Speaker 2: Staples Office Depot?
15:11
Speaker 1: 10 years.
15:11
Speaker 2: I knew where you were going. Yeah.
15:12
Speaker 3: 10 years ago. I think it was 2016. It might
15:14
Speaker 3: have been 2017.
15:15
Speaker 4: Maybe 2015.
15:15
Speaker 2: So maybe 11 years. Yeah, May 2016, it was abandoned.
15:21
Speaker 3: Ten years. So Staples tries to buy Office Depot. And
15:25
Speaker 3: the FTC is like, well, where are you going to
15:27
Speaker 3: be able to get the paperclips if you got a
15:30
Speaker 3: monopoly on them? It's like my dudes. There's this little
15:34
Speaker 3: company out of Washington called Amazon. And they sell paperclips
15:39
Speaker 3: and everything else because they're called the Everything Store. And
15:44
Speaker 3: you're worried about little Staples and Office Depot, which are
15:47
Speaker 3: like billion-dollar companies at best.
15:49
Speaker 2: Merging.
15:50
Speaker 3: There was another one, a publishing case. I can't remember
15:52
Speaker 3: who that was. Was it like Simon Schuster and someone
15:55
Speaker 3: like whoever it was?
15:57
Speaker 2: I remember what you're talking about.
15:58
Speaker 3: Right around the same time, like maybe 2016, 2018. It
16:00
Speaker 3: was like, well, you get one. Was that what it was?
16:04
Speaker 3: Maybe Penguin and like Random House and Penguin are already
16:06
Speaker 3: under the same umbrella, but it was someone in that sphere.
16:10
Speaker 3: And they were like, it's going to be too hard
16:12
Speaker 3: to publish books. It's like, well, what does that even mean?
16:17
Speaker 4: By the way, like.
16:19
Speaker 2: I don't necessarily debate that those companies shouldn't be allowed
16:22
Speaker 2: to merge. I'm mainly looking at this in the context of,
16:25
Speaker 2: you're telling me that you can't break apart Google's advertising business?
16:29
Speaker 1: Yes.
16:30
Speaker 2: In the context of refusing to let Staples and Office
16:33
Speaker 2: Depot or Spirit and JetBlue to merge? That is preposterous.
16:37
Speaker 3: And this is the part that's most vile about this.
16:42
Speaker 3: I use that word carefully, and I choose it carefully.
16:46
Speaker 3: Because as part of Google's purchase of DoubleClick, who was
16:51
Speaker 3: a big ad marketplace company back in the 2010s, they
16:55
Speaker 3: signed something with the FTC that literally said, literally said,
17:00
Speaker 3: we cannot integrate this with our system. And we will
17:04
Speaker 3: not be able to. And two years later, they integrated it.
17:07
Speaker 3: They lied to the FTC. And there's no punishment for it.
17:11
Speaker 3: It's just continue operating it. You guys are Google. You
17:15
Speaker 3: got like AI and stuff. So you're fine.
17:18
Speaker 2: And so the the supposed argument from the judges in
17:22
Speaker 2: this case are effectively. Google's behavior in the past was monopolistic,
17:27
Speaker 2: but because of oncoming threats from artificial intelligence, we don't
17:31
Speaker 2: think that a breakup is necessary because their influence is
17:34
Speaker 2: already going to be waned, which is preposterous because you
17:36
Speaker 2: can't possibly know that. Right.
17:38
Speaker 3: How can you project into the future what's going to happen?
17:40
Speaker 3: What if Google ends up being the biggest AI company
17:43
Speaker 3: because of what you allow them to continue doing?
17:45
Speaker 2: But furthermore, if your argument for not pushing for a
17:49
Speaker 2: breakup is, hey, this company's already waning influence... because of
17:54
Speaker 2: a new technology, there's no risk of Google going out
17:59
Speaker 2: of business if you break them up, right? I don't
18:02
Speaker 2: think any judge has said, well, we're pretty worried here
18:05
Speaker 2: that if we allow this breakup to go forward, then
18:08
Speaker 2: Google's going to cease to exist. You did in fact,
18:11
Speaker 2: not you specifically, but judges did in fact block mergers
18:16
Speaker 2: that then resulted in the bankruptcy and dissolvement of companies.
18:20
Speaker 1: Yes.
18:20
Speaker 2: That wanted to merge together to rescue themselves. And at
18:25
Speaker 2: the same time that that's happening, you're saying, no, we
18:27
Speaker 2: can't possibly break something up because yada, yada, yada. Perhaps
18:32
Speaker 2: the problem or part of the problem is that we
18:35
Speaker 2: need to apply the same standard to breakups that we
18:39
Speaker 2: do to mergers, and it doesn't seem like the same
18:41
Speaker 2: standards are being applied. Judges are seemingly having a much
18:45
Speaker 2: tougher time after the fact saying this needs to be
18:47
Speaker 2: broken apart than they have a problem saying, You need
18:51
Speaker 2: to continue to operate separately. But in either case, it
18:55
Speaker 2: just seems preposterous.
18:55
Speaker 3: I mean, look, I know that you can't build a
18:59
Speaker 3: system of law on this. But generally, if I'm a
19:05
Speaker 3: judge and the company that's in front of me has
19:08
Speaker 3: lied to judges about deals before, I'm sorry. I'm not
19:13
Speaker 3: going to trust you. I'm not going to take you
19:14
Speaker 3: on your word now. Why should I? Like, you straight
19:21
Speaker 3: up lied. So, I don't know. I find this stuff
19:26
Speaker 3: just infuriating. And it just seems like we're not going
19:31
Speaker 3: to do anything about it, even though no one likes
19:32
Speaker 3: this stuff. Quick break here. Wall Street Watch is next.
19:40
Speaker 1: Bringing the latest financial news straight to your radio every day.
19:44
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:50
Speaker 1: Time now for Wall Street Watch. Tracking the stocks, the data,
19:54
Speaker 1: and the headlines driving markets so far today. Right here
19:57
Speaker 1: on the Financial Exchange Radio Network.
19:59
Speaker 4: Markets have now accelerated in our rally mode. With treasury
20:04
Speaker 4: yields steadying today, right now the Dow is up 1.25%
20:07
Speaker 4: or 667 points higher. S & P 500 up 1%,
20:08
Speaker 4: 78 points up. NASDAQ up 1.3% or 358 points higher.
20:10
Speaker 4: Russell 2000 is up about a third of a percent.
20:13
Speaker 4: Ten-year treasury yield now down five basis points at 4.742%.
20:29
Speaker 4: and oil up about 1.5%, trading at $ 92 a barrel.
20:33
Speaker 4: Broadcom more than tripled its profit and nearly doubled its
20:36
Speaker 4: revenue in the previous quarter, saying demand for its custom
20:38
Speaker 4: chips should continue growing over the next two years. However,
20:42
Speaker 4: the stock is down by 5%. Meanwhile, NVIDIA officially agreed
20:47
Speaker 4: to acquire open-source AI platform Hugging Face for about $ 13 billion.
20:52
Speaker 4: NVIDIA is up by about 1%. Elsewhere, Snowflake is rallying
20:58
Speaker 4: 19% after it reported a narrower quarterly loss, saying AI
21:03
Speaker 4: drove its business. Campbell down by 10% after the food
21:08
Speaker 4: and beverage company offered earnings guidance that disappointed. And shares
21:13
Speaker 4: in Tyson Foods are down about 7% after the meat
21:17
Speaker 4: producer lowered its revenue growth guidance, citing pressure on volatile
21:21
Speaker 4: cattle prices. I'm Tucker Silva and that is Wall Street Watch.
21:27
Speaker 3: Peace in the Bloomberg. America's population of 401k millionaires keeps growing,
21:31
Speaker 3: buoyed by markets.
21:34
Speaker 2: It's good. Yeah, I don't think you can qualify it
21:37
Speaker 2: as anything but good. It's great.
21:39
Speaker 3: I want more millionaires.
21:40
Speaker 2: Yeah. You know, ideally, like a few fewer billionaires. They
21:45
Speaker 2: don't seem to be that much.
21:46
Speaker 3: Fewer billionaires, more millionaires.
21:49
Speaker 2: In any case, we are seeing... Record numbers of 401k millionaires,
21:53
Speaker 2: those with more than a million bucks in their 401k,
21:56
Speaker 2: record 769,000 people at Fidelity alone. The number of them
22:01
Speaker 2: rose 19% over, I'm guessing, the last 12 months. It
22:07
Speaker 2: doesn't say. Sorry, just between the first and second quarter, actually,
22:12
Speaker 2: it rose some 19%.
22:14
Speaker 3: To be fair, at the end of the first quarter
22:16
Speaker 3: was where stocks bottomed.
22:17
Speaker 2: Of course, yeah. So this makes perfect sense. It aligns
22:20
Speaker 2: with everything else we know about markets and how 401k
22:23
Speaker 2: investors invest. Chuck, we've got a guide this month from
22:28
Speaker 2: Armstrong about how saving too much for retirement can actually
22:32
Speaker 2: be a problem. How could this be seen as a
22:35
Speaker 2: bad news story? Because on the surface, I don't think
22:37
Speaker 2: there's any way to paint it as a bad news story.
22:39
Speaker 2: But can you actually save money? Too much for retirement.
22:43
Speaker 2: I guess it depends on what your definition is.
22:46
Speaker 3: Yeah, the biggest one, the number one that I see
22:51
Speaker 3: is people that work too long because they've already saved
22:54
Speaker 3: what they need to save for retirement, but they're not
22:56
Speaker 3: sure they have. And so they keep working and they
22:58
Speaker 3: give up years of retirement, sticking in a job that
23:01
Speaker 3: they don't like. That's the biggest one. The other one
23:04
Speaker 3: that you see, and this does relate to retirement accounts, hey,
23:08
Speaker 3: once you hit age 73, you've got required distributions from
23:11
Speaker 3: those retirement accounts. You're oftentimes most likely on Medicare at
23:15
Speaker 3: that point. And if you've saved too much into retirement
23:19
Speaker 3: accounts as opposed to other types of accounts, it could
23:22
Speaker 3: potentially kick you up into other tax brackets. or higher
23:26
Speaker 3: Medicare brackets also.
23:27
Speaker 2: So you got to be careful here because quite honestly,
23:31
Speaker 2: what we've seen in markets for the last few years
23:33
Speaker 2: that has driven the growth in 401k millionaires is pretty
23:38
Speaker 2: outsized returns in equity markets compared to pretty much any
23:42
Speaker 2: time period that we've ever looked at. There are very
23:44
Speaker 2: few three or even 10 year windows that stock returns
23:49
Speaker 2: look as juicy as they have for the last few years.
23:52
Speaker 2: And so probably won't repeat itself all that frequently in
23:55
Speaker 2: the future. So I think you can fall victim to,
23:59
Speaker 2: you know, thinking that the most recent performance is going
24:01
Speaker 2: to drive what's going on next. But to your point, Chuck,
24:06
Speaker 2: we've all heard the story. We've all known the person
24:09
Speaker 2: who works their butts off, retires and doesn't live long.
24:14
Speaker 2: And those are the most devastating stories, more than anything else, right?
24:19
Speaker 2: You know, saving your whole life for that moment to
24:21
Speaker 2: be able to pull back from work, spend more time
24:24
Speaker 2: with family and friends, and then not be able to
24:26
Speaker 2: live that retirement that you were hoping for is just devastating.
24:30
Speaker 2: And we do frequently see people who have saved enough
24:36
Speaker 2: for retirement and just don't know. They just don't know.
24:41
Speaker 2: They don't know how the math works. They're not sure.
24:43
Speaker 2: And one thing they do know is, hey, Every year
24:47
Speaker 2: I keep working, I'll keep adding to that 401k and
24:49
Speaker 2: it's another year that I won't have to draw out
24:50
Speaker 2: of the 401k. And they're right about that. But if
24:53
Speaker 2: you are facing that question and you're trying to understand like, hey,
24:58
Speaker 2: do I have enough to retire? Can I do it
25:01
Speaker 2: before 65 when Medicare comes up? I'm pushing full retirement
25:04
Speaker 2: age on Social Security. Do I actually have enough to
25:07
Speaker 2: live off of and make sure that my own and
25:10
Speaker 2: my spouse's future is taken care of? And maybe my
25:12
Speaker 2: kids too, if that's important to me. Give the folks
25:16
Speaker 2: at Armstrong Advisory Group a call. A plan is the
25:19
Speaker 2: only way you can answer that question. It's diving into
25:21
Speaker 2: your spending, diving into your goals, understanding your risk factors,
25:25
Speaker 2: and building a strategy for your future. You can get
25:29
Speaker 2: a copy of our free guide that I just mentioned
25:31
Speaker 2: by calling 800-393-4001, but you can also talk to a
25:36
Speaker 2: real-life human being about your financial future. Again, go to armstrongadvisory.com.
25:42
Speaker 2: or call us at 800-393-4001.
25:43
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:48
Speaker 1: registered investment advisor. Nothing in the ad or in any
25:51
Speaker 1: Armstrong guide is specific financial, legal, or tax advice. Consult
25:54
Speaker 1: your own financial, tax, and estate planning advisors before making
25:57
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
26:00
Speaker 1: advisory services.
26:01
Speaker 3: I want to cover this piece from Bloomberg Opinion. It's titled,
26:05
Speaker 3: Joyful Spending is America's Guilty Pleasure. And it Kind of
26:10
Speaker 3: is like the other side of the coin from what
26:11
Speaker 3: we were just talking about a little bit.
26:14
Speaker 2: In that....
26:18
Speaker 3: Americans really... Three quarters of Americans, according to a survey
26:22
Speaker 3: from Ally Bank, feel guilty when they spend money on
26:24
Speaker 3: something that brings them joy. Instead of putting that money
26:27
Speaker 3: towards a financial goal. And... I'm trying to reconcile this
26:33
Speaker 3: with what we know about Americans' finances and things along
26:36
Speaker 3: those lines.
26:38
Speaker 2: And....
26:40
Speaker 3: I think the place that I get to is this
26:42
Speaker 3: is not a financial thing, in my opinion. I got
26:46
Speaker 3: to be honest. I think Americans actually have trouble with joy.
26:50
Speaker 3: I think we really do. I think the two things
26:57
Speaker 3: that we struggle with quite a bit are joy and
27:00
Speaker 3: death and that we don't ever actually embrace the fact
27:03
Speaker 3: that these are like real parts of life. I know
27:06
Speaker 3: this is getting a little heavy right now. Just stick
27:08
Speaker 3: with me for a bit. I don't think we allow
27:12
Speaker 3: ourselves to really feel happy very often. It's part of
27:18
Speaker 3: the culture that makes America great to a certain extent
27:20
Speaker 3: and that we're always pushing for more. But I think
27:24
Speaker 3: we have a hard time feeling happy. And even when
27:27
Speaker 3: something good happens, I don't think we often appreciate it fully.
27:32
Speaker 3: Or even when we're responsible for something good. How often
27:35
Speaker 3: does someone give you a compliment and you're like, well,
27:37
Speaker 3: you know, instead of being able to accept that compliment.
27:40
Speaker 2: Is that a regional, you know, cheap Yankee thing? It
27:46
Speaker 2: could be. Is that something that you and I are
27:48
Speaker 2: experiencing and elsewhere it's not the case or is that
27:52
Speaker 2: an American feature slash bug?
27:56
Speaker 4: Stronger in New England, I'd say.
27:58
Speaker 3: It might be stronger here, but like, again, from having
28:01
Speaker 3: traveled around.
28:02
Speaker 2: I do think New Englanders, generally speaking, have a tough
28:05
Speaker 2: time taking a compliment.
28:07
Speaker 3: We do. We do. We do.
28:10
Speaker 2: Thank you. Don't say that about me.
28:13
Speaker 3: Thank you.
28:13
Speaker 2: I gotta go now.
28:15
Speaker 3: But, like, I wonder how much of this is, like,
28:17
Speaker 3: a financial thing versus just... Like, if you had to
28:21
Speaker 3: describe Americans in, like, three adjectives, I don't think joyful
28:25
Speaker 3: would be one of them.
28:28
Speaker 2: I think friendly might be. Different from joyful. But joyful
28:31
Speaker 2: is different, yeah.
28:32
Speaker 3: You know, different from joyful.
28:34
Speaker 2: Hmm.
28:36
Speaker 3: And so, like, I wonder how much of this is
28:38
Speaker 3: financially related, I guess, versus just... hey, we're not necessarily
28:43
Speaker 3: the most joyful culture.
28:46
Speaker 2: Yeah, I'm willing to be open to that point. I'll
28:50
Speaker 2: also say that.
28:51
Speaker 3: Even when we're happy, it's not joy. Think of some
28:55
Speaker 3: of the fun stuff from this summer. I'm not a
28:58
Speaker 3: huge baseball fan anymore. I used to be. But have
29:01
Speaker 3: you guys been following this whole tarps off thing that's
29:03
Speaker 3: going on?
29:04
Speaker 4: Yeah, it came from.
29:06
Speaker 3: It's basically like a section of a stadium that will
29:10
Speaker 3: decide to try to get the team fired up by
29:11
Speaker 3: taking their shirts off and swinging them around. Even that,
29:14
Speaker 3: I don't think it's joy. It's like excitement and kind
29:19
Speaker 3: of like the edginess of a whole section being shirtless
29:23
Speaker 3: all at once. It's different from joy, which the World Cup,
29:27
Speaker 3: on the other hand, I think that there were parts
29:30
Speaker 3: of that that were more joyful, but that was not
29:32
Speaker 3: the uniquely American thing about it.
29:36
Speaker 2: I guess it's not really a counterpoint, but if we
29:40
Speaker 2: want to give credit to Americans being nervous about their
29:44
Speaker 2: personal finances and feeling guilty, we do, as a nation,
29:49
Speaker 2: have one of, if not the lowest savings rate as
29:52
Speaker 2: a country in the developed world.
29:54
Speaker 3: So we're all so bad at personal finance. This is,
29:57
Speaker 3: once again, do as I say, not as I do.
30:02
Speaker 3: I can't accept the joy of spending this money, but
30:05
Speaker 3: I'm going to spend it anyways, is kind of our ethos.
30:10
Speaker 2: So it's probably both. We suck at personal finance, and
30:14
Speaker 2: we're just not a joyful country. It's depressing.
30:17
Speaker 3: It's not depressing. Mike, I'm not doing this to, like,
30:20
Speaker 3: poo-poo Americans, but, like, joy is not one of our
30:24
Speaker 3: defining features. We're hardworking. We're resourceful. We're tough. We, you know,
30:30
Speaker 3: we help our neighbors out. Except millennials. Well, no, of course,
30:34
Speaker 3: all of us are lazy. But, like, there's plenty of, like,
30:37
Speaker 3: great things about Americans. The amount of joy that we
30:40
Speaker 3: carry I just don't think is one of them. Mm-hmm.
30:42
Speaker 3: And that's fine. Like, you can only be so much. Like,
30:44
Speaker 3: there's only so much that you can do as a person. Well,
30:47
Speaker 3: screw you, Chuck. Screw you, too. We'll be back after
30:52
Speaker 3: this for Stack Roulette. We hope you stick around for
30:54
Speaker 3: more insults. Or not.
30:56
Speaker 1: From markets to money to business and financial news, watch
30:59
Speaker 1: The Financial Exchange every day on YouTube. Hit that subscribe
31:03
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31:05
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31:14
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31:17
Speaker 1: is The Financial Exchange Radio Network.
31:20
Speaker 5: All right, Mike, what do you got for me for
31:30
Speaker 5: Stack Roulette?
31:31
Speaker 2: I've got this piece from CNN. Appalling AI menu pictures
31:34
Speaker 2: keep going viral. So the pictures are not like, oh,
31:43
Speaker 2: this is completely screwed up and the meal has six
31:47
Speaker 2: fingers like the garbage AI pictures.
31:49
Speaker 3: Of a few years ago. Honestly, some of them are
31:50
Speaker 3: kind of screwed up. Like, have you seen the shrimp?
31:53
Speaker 1: No.
31:54
Speaker 2: Scroll down. Show me the shrimp.
31:56
Speaker 3: Scroll. Keep going.
31:57
Speaker 2: Right there.
31:58
Speaker 3: The shrimp stood up. The shrimp are just like.
31:59
Speaker 2: The shrimp are just a circle.
32:01
Speaker 3: They look like maggots.
32:02
Speaker 1: Yeah.
32:02
Speaker 4: Yeah.
32:03
Speaker 2: So there are certainly... some exceptions to my rule, but
32:08
Speaker 2: I think my general conclusion is once again, that this
32:11
Speaker 2: is the most hated technological revolution that we've ever seen.
32:16
Speaker 2: Let me, let me quote the chef, uh, talking about
32:19
Speaker 2: food and wine magazine. I would rather see a photo
32:22
Speaker 2: of a sheet of notebook paper, messily scrawled with the
32:25
Speaker 2: day's specials in the chef's own hand. Then feel the
32:27
Speaker 2: queasy upset as my eyes and brain tried to meet
32:30
Speaker 2: across the uncanny Valley of a dish. I know cannot
32:33
Speaker 2: be real.
32:35
Speaker 3: Um, These shrimp make me want to throw up.
32:38
Speaker 2: Yeah, they are pretty disgusting looking now that I scrolled
32:41
Speaker 2: down and take a look at it. But once again,
32:44
Speaker 2: I mean, the AI is clearly pretty easy to detect.
32:49
Speaker 2: And I think mostly people are just reacting to the
32:52
Speaker 2: fact that they know it's AI and they hate it.
32:54
Speaker 3: Now, I do think that there are some places... It
33:00
Speaker 3: is interesting. Like, we don't like AI pictures. We don't
33:05
Speaker 3: like AI writing. I think AI in grand total now
33:11
Speaker 3: has maybe made like one meme that lasted for like
33:14
Speaker 3: a day. And other than that, there's been nothing that's
33:16
Speaker 3: come out of it. And it's because ultimately the reason
33:19
Speaker 3: why we write and draw and cook and do any
33:23
Speaker 3: of these things is is because we want to connect
33:27
Speaker 3: with other people. And there's something fundamentally dishonest when you
33:33
Speaker 3: are not doing that. I think there are plenty of
33:37
Speaker 3: uses for AI that don't involve those things, by the way.
33:40
Speaker 3: As an example, if you've got a big set of
33:42
Speaker 3: data that you need to sort through and have it,
33:44
Speaker 3: you know, presented a certain way and do this and that,
33:47
Speaker 3: I don't think there's any problem with having AI do
33:49
Speaker 3: that instead of you tooling around in Excel trying to
33:52
Speaker 3: figure out how to do a VLOOKUP because it's been
33:54
Speaker 3: years since you've done the last one. And who cares?
33:58
Speaker 2: I recently had a water test done on our well.
34:01
Speaker 5: Yes.
34:02
Speaker 2: Gives you a bunch of readings that mean absolutely nothing
34:03
Speaker 2: to me. And you're like, what does this mean? Great
34:06
Speaker 2: use of AI. It might be wrong, by the way.
34:08
Speaker 2: I acknowledge that, and I go into that knowing, like, oh,
34:10
Speaker 2: this could be completely wrong. But at least it gives
34:12
Speaker 2: me a list of questions to ask somebody that knows
34:13
Speaker 2: what the heck they're talking about.
34:14
Speaker 5: Yes.
34:15
Speaker 3: And by the way, like.
34:16
Speaker 2: Medical. Like, same story. You know, I got this test result.
34:19
Speaker 2: What the heck does it mean? What should I be
34:20
Speaker 2: asking about?
34:21
Speaker 3: But the other stuff, I got to be honest. Like,
34:24
Speaker 3: the reason why memes resonate and why they're things, again... Mike,
34:32
Speaker 3: I know you're not a huge World Cup fan.
34:34
Speaker 4: No.
34:35
Speaker 3: I'm sure at this point you've seen the one of
34:38
Speaker 3: Messi from this year making the like, oh, you're going
34:41
Speaker 3: to do that to me? Because we see ourselves in
34:45
Speaker 3: that other person and somehow our souls recognize that there's
34:49
Speaker 3: another soul outside of us and we're like, I can
34:53
Speaker 3: relate to that. The reason why AI doesn't produce any
34:57
Speaker 3: memorable memes or pieces or drawings or anything is is
35:01
Speaker 3: because it has accidentally proven that there's some part of
35:06
Speaker 3: us that is a soul that can recognize it in
35:09
Speaker 3: another person or life form. And AI fundamentally isn't that.
35:15
Speaker 3: It doesn't have that. And so the quicker we get
35:20
Speaker 3: away from trying to use AI to communicate with each
35:24
Speaker 3: other and instead use it to do... the hard work
35:29
Speaker 3: that goes into preparing a number of different things or
35:33
Speaker 3: figuring different things out, the better we're going to be.
35:36
Speaker 3: Because I get that the communication was the first thing
35:39
Speaker 3: that was developed, but it's also the thing that people
35:42
Speaker 3: hate the most.
35:42
Speaker 2: Yeah, we really don't like it.
35:44
Speaker 3: I'll give you another example. Last week, the Stanley Druckenmiller
35:48
Speaker 3: op-ed in the Wall Street Journal, where people were like, hey,
35:51
Speaker 3: this is AI. And he's like, of course it's AI.
35:53
Speaker 3: And then the Wall Street Journal publisher was like, yeah,
35:55
Speaker 3: we can allow AI in here. The reason why people
35:58
Speaker 3: don't like that is because when you write an op-ed,
36:01
Speaker 3: you're fundamentally saying, this is my opinion on something. This
36:06
Speaker 3: is what I believe. And by the way, it wasn't
36:08
Speaker 3: even just like AI. It was like garbage AI. And
36:11
Speaker 3: Druckenmiller would be the first to tell you that. Again,
36:13
Speaker 3: he didn't try to hide it or anything. By the way,
36:15
Speaker 3: he's smarter than me. He's made more money than me
36:17
Speaker 3: in his career, so he can do whatever he wants
36:20
Speaker 3: to do. It's fine. It's no problem. But when you
36:24
Speaker 3: write an op-ed... The fundamental premise is, I'm writing this
36:29
Speaker 3: because I have an idea that I want to convince
36:31
Speaker 3: you of. And not only was this idea unconvincing, but
36:34
Speaker 3: it also was from AI and not yours. And that's
36:39
Speaker 3: the part that I think we're trying to reckon with
36:41
Speaker 3: on all of this, which is, hey, what's okay to
36:46
Speaker 3: do with AI and what's not? And I think we're
36:49
Speaker 3: getting to the point where there are some things where
36:51
Speaker 3: it's like, No, you can't use it for this, and
36:53
Speaker 3: people are going to reject you if you do.
36:55
Speaker 2: I just compare this to the internet, right? And don't
36:59
Speaker 2: get me wrong, I loathe what the internet has done
37:03
Speaker 2: to us as a society. But I didn't in 1997,
37:08
Speaker 2: and I don't think a lot of people did.
37:09
Speaker 3: Part of this is also because the companies that are
37:11
Speaker 3: developing AI are the very ones that ruin the internet.
37:13
Speaker 2: Yeah, that's fair. Yeah, there might be some. well-deserved suspicion
37:18
Speaker 2: about those who are developing.
37:20
Speaker 3: You know, we used to be a proper country where
37:23
Speaker 3: you didn't have to Google something. You could ask Jeeves
37:25
Speaker 3: for it and a nice internet butler would deliver the
37:28
Speaker 3: answer to you on a platter. And now, now you
37:33
Speaker 3: get maggot shrimp with a side of looks like gummy
37:37
Speaker 3: worms on a steak.
37:39
Speaker 1: Yeah.
37:41
Speaker 3: And I got to tell you, I don't like gummy
37:44
Speaker 3: worms on my steak. I'm more of a Snickers fan myself.
37:49
Speaker 2: On your steaks.
37:50
Speaker 1: Yeah.
37:50
Speaker 2: Yep. Makes sense. Got that caramel.
37:52
Speaker 3: Taking a look at markets, they're stretching their legs topside.
37:55
Speaker 3: All major indices now up over 1% on the day,
37:58
Speaker 3: so we got a nice little rally going on that
38:01
Speaker 3: is taking place here. Ten-year treasury down 5.2 basis points
38:04
Speaker 3: as well, so yields coming in a little bit despite
38:07
Speaker 3: all of the hype about higher yields recently. Quick break
38:11
Speaker 3: here for the rest.
38:12
Speaker 2: Of the day.
38:12
Speaker 3: Hope you all enjoy it, and we're going to be
38:15
Speaker 3: back tomorrow. We got a jobs report. Make sure you
38:17
Speaker 3: tune in.