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Tesla and SpaceX Could Become Elon’s Mega Bet · The Financial Exchange Show

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  Speaker 1: and Mike Armstraw.
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  Speaker 2: Chuck, Mike and Tucker with you here on a Friday,
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  Speaker 2: and we've got markets kind of trying to find their direction,
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  Speaker 2: not doing a ton in either direction. Here, Dow Jones
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  Speaker 2: Industrial average up about two tents of a percent one
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  Speaker 2: hundred points SP five hundred up right now eleven points,
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  Speaker 2: so about point one five percent, and then as that
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  Speaker 2: can posit up a third of a percent eighty eight
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  Speaker 2: points in the greens. So some modest upward drift after
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  Speaker 2: a sharp upward move yesterday. Unfortunately, bond investors not feeling
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  Speaker 2: the warm and fuzzies in quite the same way. Ten
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  Speaker 2: year Treasury up another seven basis point state a four
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  Speaker 2: point seven three to three percent. Thirty year Treasury also
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  Speaker 2: up another five point six to five point two six
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  Speaker 2: four percent, So you've got bond yields continuing to.
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  Speaker 3: Move up on that front.
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  Speaker 2: When we take a look at the impact on the dollar,
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  Speaker 2: dollar moving up by zero point three to one percent
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  Speaker 2: right now to one hundred point zero three five. Gold
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  Speaker 2: falling in sympathy down fifty eight bucks nouns to forty
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  Speaker 2: one oh two. Gold's has been treading water for most
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  Speaker 2: of the summer hasn't really been able to get off
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  Speaker 2: the mat, but also hasn't broken down even as the.
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  Speaker 3: Dollar has moved up.
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  Speaker 2: Crude oil up another two ten a barrel to eighty
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  Speaker 2: five sixty nine, this on reports of renewed strikes in
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  Speaker 2: the Strait of Horn moves by Iranian forces. None of
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  Speaker 2: those reports officially confirmed at this point, but it's driven
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  Speaker 2: prices up nonetheless today, and so we'll see how things
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  Speaker 2: go there. Gas prices moving up just a touch. We're
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  Speaker 2: up eight tens of a cent to four ten and
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  Speaker 2: six tenths nationally. Diesel prices, though in the last week,
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  Speaker 2: have moved up eleven cents and another two cents overnight
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  Speaker 2: to five thirty five thirty, and so diesel kind of
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  Speaker 2: feeling the most pain right now for prices at the pump,
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  Speaker 2: even though gas prices are up, you know, very modestly
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  Speaker 2: in the last week, but diesel prices feeling a little
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  Speaker 2: bit more again. Upward pressure there, Mike, we got a
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  Speaker 2: Wall Street Journal exclusive that dropped late yesterday. I think
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  Speaker 2: this was maybe six or seven pm, not that late
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  Speaker 2: for most humans, but for me it's almost bedtime at
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  Speaker 2: that point. Headline Tesla Way's sale of China business to
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  Speaker 2: pave way for potential SpaceX merger. Unsurprising.
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  Speaker 4: Yeah, So here's my question though, So one Elon Musk
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  Speaker 4: needs to find some cash to make this happen.
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  Speaker 5: I get the sense that.
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  Speaker 4: He he himself, is confusing all of his businesses, not literally,
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  Speaker 4: but you know, the most recent earnings call, for example,
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  Speaker 4: one of the highlights he brought is how Tesla's are
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  Speaker 4: gonna be equipped with Starlink, and I think most people
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  Speaker 4: were left saying, well, isn't that a benefit to SpaceX
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  Speaker 4: not Tesla? So he won to see these two companies merged,
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  Speaker 4: even if he can't say it publicly. To Tesla's China
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  Speaker 4: business cannot be doing well with all of the competition in.
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  Speaker 5: Evs from there.
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  Speaker 4: But my question is is this a China story or
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  Speaker 4: is it a Tesla car story?
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  Speaker 5: Right?
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  Speaker 3: Like?
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  Speaker 4: Is this a story where Elon doesn't think he's got
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  Speaker 4: a future in China? Or is it that he doesn't
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  Speaker 4: think that vehicle sales are a driving force behind his
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  Speaker 4: companies anymore?
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  Speaker 2: What if my choice is neither? Okay, So here here's
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  Speaker 2: my view on it. Uh, Mike, do you know founded
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  Speaker 2: Tesla Motors? No, it's not Elon Musk.
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  Speaker 5: I remember it's not Elon, I know, but most.
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  Speaker 2: People don't realize that Elon was not the founder. Was
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  Speaker 2: founded back in two thousand and three by Martin Eberhart
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  Speaker 2: and Mark Tarpaning. Yeah, okay, h Elon didn't come on
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  Speaker 2: board until a Series A funding round about a year
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  Speaker 2: or so later, and then finally ended up taking an
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  Speaker 2: active role in the company. I want to say, like
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  Speaker 2: two thousand and five, two thousand and six. It was
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  Speaker 2: a couple of years later. So the upshot is that
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  Speaker 2: Elon doesn't have the same level of control over Tesla
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  Speaker 2: that he does over SpaceX. He still has quite a bit,
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  Speaker 2: but it's not as you know, ironclad and bulletproof is
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  Speaker 2: with SpaceX. I think the bigger part here, in my opinion,
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  Speaker 2: is that Elon wants to be able to have a
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  Speaker 2: higher level of control over Tesla number one. But also
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  Speaker 2: there are assets that Tesla might own that he wants
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  Speaker 2: to be able to use with SpaceX without having to
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  Speaker 2: you know, run through a whole bunch of different contracts
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  Speaker 2: in this and that, and so I think that's the
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  Speaker 2: bigger piece here that is a foot when it's all
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  Speaker 2: said and done.
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  Speaker 4: I gotta say, too, if you're going to be one
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  Speaker 4: of the largest if you're gonna try and combine this
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  Speaker 4: company with one of the largest defense contractors in the world,
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  Speaker 4: which space you can't have a chination, then you shouldn't
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  Speaker 4: have a China operation.
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  Speaker 3: Yet that you shouldn't You can't like it's it's it's
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  Speaker 3: not possible.
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  Speaker 2: So I think that's you know why the China peace
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  Speaker 2: needs to be spun off obviously is to be able
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  Speaker 2: to get regulatory approval the resulting company then, to be honest,
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  Speaker 2: do you know what it really reminds me of?
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  Speaker 5: No, what does it really remind you of?
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  Speaker 3: You ever heard the term Kai baal?
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  Speaker 5: Yeah?
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  Speaker 2: Kai balls are the large Korean industrial companies. Yeah, think
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  Speaker 2: of your LG's of the world, your Hyundai's of the world.
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  Speaker 2: You might only know them here for like one of
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  Speaker 2: the products they make, but like Hyundai just as an example,
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  Speaker 2: they make all kinds of heavy machinery. They do like shipbuilding,
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  Speaker 2: they do all kinds of stuff beyond just you know,
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  Speaker 2: selling cars. They got all these different businesses. This really
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  Speaker 2: gives you that vibe in that if you talk about SpaceX,
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  Speaker 2: even just right now before this merger, so SpaceX, you've
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  Speaker 2: got their launch business. You've got the starlink business, you've
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  Speaker 2: got their artificial intelligence business, you've got their social media
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  Speaker 2: platform business. And I'm trying to think if there's anything
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  Speaker 2: else under that umbrella right now. I think that's it.
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  Speaker 2: If you look at Tesla as of right now. Remember
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  Speaker 2: Tesla a few years back, they bought some other companies
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  Speaker 2: as well that Elon used to operate separately, specifically, what
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  Speaker 2: was it, Solar City. Yeah, it's a solar company. I
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  Speaker 2: don't know, is that what it was? I think it was, Yeah,
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  Speaker 2: Solar City back in twenty sixteen. They bought them. So
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  Speaker 2: Tesla has cars, they've got solar panels, they've got robots,
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  Speaker 2: they've got AI. So it's like you're you're matching all
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  Speaker 2: this stuff up.
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  Speaker 4: Is that is the battery ip over on Tesla side?
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  Speaker 4: I would think it is from Solar City.
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  Speaker 3: Yeah.
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  Speaker 2: Yeah, So I think that they are pros and cons
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  Speaker 2: depending on you know, can you realize you know, some
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  Speaker 2: efficiencies of operation through vertical integration. Maybe these are all
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  Speaker 2: you know, vastly different businesses with their own you know,
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  Speaker 2: operating life spans and in ways that they operate, so
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  Speaker 2: you can have some problems there. The piece that I
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  Speaker 2: do think is is just interesting to consider, is with
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  Speaker 2: both of these companies SpaceX and Tesla how we don't
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  Speaker 2: know for sure, but like how much of the valuation
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  Speaker 2: is tied up with the belief in Elon musk Well,
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  Speaker 2: I mean most of it.
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  Speaker 4: Tesla is the easier one to measure there because there's
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  Speaker 4: so many direct competitors to what they do.
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  Speaker 5: Space is a little different.
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  Speaker 3: Most of it.
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  Speaker 2: Yeah, Elon's fifty five. Now, I'm not saying he's gonna
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  Speaker 2: die tomorrow.
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  Speaker 3: He's not. Most likely.
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  Speaker 2: What I am saying is like, you get to a
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  Speaker 2: certain point and it's just Elon's not gonna be in
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  Speaker 2: the driver's seat for this pun intended like someone else
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  Speaker 2: is gonna take over, Mike. Is the solar panel business
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  Speaker 2: a high margin.
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  Speaker 3: Business these days?
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  Speaker 5: I would think not?
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  Speaker 3: What about the car business?
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  Speaker 5: Never was?
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  Speaker 3: What about the social media business as it relates to
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  Speaker 3: you know X For.
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  Speaker 4: People that are for companies that are good at social media,
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  Speaker 4: it's quite profitable.
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  Speaker 2: Well for one company, for Facebook, it is for everyone else.
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  Speaker 2: It's not like it's what it is. So I look
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  Speaker 2: at these businesses and I'm like, you're really just sticking
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  Speaker 2: a bunch of low margin businesses together and it works
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  Speaker 2: because of Elon musk Ye. At some point, Elon's not
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  Speaker 2: going to be driving the bus anymore.
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  Speaker 5: True, But Chuck, that could be two decades from now.
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  Speaker 2: It could be, but he could also get hit by
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  Speaker 2: a bus tomorrow. Like you never know with any of this,
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  Speaker 2: I mean, how many times do you just see random
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  Speaker 2: weird stuff happen?
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  Speaker 4: Yeah, where we can agree is there is no publicly
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  Speaker 4: traded company whose valuation is more reliant on one person
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  Speaker 4: than SpaceX and Tesla. No, and combining them makes it
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  Speaker 4: even more so.
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  Speaker 2: Let's take a quick break. When we come back, we
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  Speaker 6: Time for some Friday tribua here on the Financial Exchange
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  Speaker 6: and today is Jake rolling sixty first birthday. Rolling rose
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  Speaker 6: read that one and that was it. Rolling would go
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  Speaker 4: They changed the title of the book for American readers.
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  Speaker 4: You know, you know what the American title is? No,
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  Speaker 4: what Sorcerer's Stone instead of Philosophers? Oh yeah, okay, there
• 12:07
  Speaker 4: you have it. There's your next trivia question.
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  Speaker 3: Is that because we believe in magic philosophy?
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  Speaker 5: I think so?
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  Speaker 4: Yeah, folks, it is the last day of the month,
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  Speaker 3: Mike, how do you feel about big oil?
• 14:20
  Speaker 5: Like all of.
• 14:22
  Speaker 3: Big oil?
• 14:26
  Speaker 5: I like it because I need to drive a car.
• 14:28
  Speaker 3: I don't know. I feel that, But your car's electric.
• 14:31
  Speaker 3: I feel bad.
• 14:34
  Speaker 5: The electricity that comes from burning.
• 14:36
  Speaker 6: That's your opinion.
• 14:38
  Speaker 2: There's only one add that you can have, and it's bad.
• 14:40
  Speaker 2: So here here's the deal. Why because they making money? Yeah,
• 14:43
  Speaker 2: they're making money, So here here's the deal. Chevron reported
• 14:45
  Speaker 2: earnings of twelve point one billion dollars for Q two.
• 14:47
  Speaker 2: That was an almost fivefold increase from the same period
• 14:51
  Speaker 2: last year.
• 14:51
  Speaker 3: That's a lot, so naturally, you get.
• 14:53
  Speaker 2: Everyone out there being like, oh, they're greedy, they're profiteering
• 14:58
  Speaker 2: because of the wall, and it's like, well, yes, they
• 15:02
  Speaker 2: are greedy, Like I get that. Did they suddenly become
• 15:05
  Speaker 2: greedy this year?
• 15:07
  Speaker 3: No, that's not the point, man. They're greedy.
• 15:10
  Speaker 2: They're making too much money. Okay, So like, what do
• 15:13
  Speaker 2: you think we should do? We gotta take the profits. Okay,
• 15:17
  Speaker 2: so that's fine. So then when they lose money, do
• 15:19
  Speaker 2: you think that we should give the money?
• 15:21
  Speaker 3: No, that's not the same.
• 15:24
  Speaker 2: Eh, Like, this is the conversation that you have. And look,
• 15:28
  Speaker 2: I don't like high oil prices. But ultimately, if you
• 15:32
  Speaker 2: are of the opinion that oil companies are making too
• 15:35
  Speaker 2: much money right now, then number one, you are you
• 15:38
  Speaker 2: are obligated then to tell me what the right level
• 15:41
  Speaker 2: of profit for oil companies should be. And then, because
• 15:45
  Speaker 2: you want to take money from them when they're making
• 15:47
  Speaker 2: too much, by virtue of that, you say, hey, if
• 15:49
  Speaker 2: they're not making enough, does that mean we need to
• 15:51
  Speaker 2: give them more money?
• 15:54
  Speaker 3: Exactly crickets.
• 15:56
  Speaker 5: Yeah, these companies do swing to losses fairly red.
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  Speaker 3: Look at the twenty tens.
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  Speaker 2: Yeah, Like, look at the bankruptcies in the oil fields
• 16:04
  Speaker 2: back in the twenty tens.
• 16:05
  Speaker 4: Now, if you want to have a more interesting argument
• 16:08
  Speaker 4: about not being enough competition among giant oil companies, I'll
• 16:13
  Speaker 4: be willing to have that conversation.
• 16:14
  Speaker 5: I think there's something there that you know, basically.
• 16:17
  Speaker 4: Exon Mobile, Chevron, and VP run the world on oil,
• 16:23
  Speaker 4: and so hey we should break them up and cause
• 16:26
  Speaker 4: more competition.
• 16:27
  Speaker 5: I'd be open to that conversation.
• 16:29
  Speaker 4: But yeah, when there's oil scarcity, the biggest oil producers
• 16:34
  Speaker 4: in the world are going to make a boatload of money.
• 16:37
  Speaker 3: Yeah, it's just how it is.
• 16:39
  Speaker 2: And again, I don't like seeing gas prices here any
• 16:43
  Speaker 2: more than anyone else. But it's not because you know,
• 16:48
  Speaker 2: Billy Exxon suddenly woke up this year and said, hey,
• 16:52
  Speaker 2: I think we should raise the prices.
• 16:54
  Speaker 3: No, like it's just like last year.
• 16:57
  Speaker 2: Like they didn't suddenly wake up, like, you know what,
• 16:59
  Speaker 2: we're gonna be nice this year. We're gonna be nice.
• 17:03
  Speaker 2: We're not gonna be creedy, We're gonna be nice. Let's
• 17:05
  Speaker 2: cut the prices. No it in this business, sometimes you
• 17:09
  Speaker 2: make a boatload, sometimes you don't.
• 17:12
  Speaker 3: And if talk to.
• 17:13
  Speaker 2: Any energy investors from the twenty tens as to what
• 17:16
  Speaker 2: it felt like, that was not very good. In fact,
• 17:21
  Speaker 2: it was quite bad for many of them. So yeah,
• 17:25
  Speaker 2: you've got really high profits from these oil companies right now.
• 17:29
  Speaker 3: And that's kind of how it is. And the answer
• 17:33
  Speaker 3: is not, well, you.
• 17:34
  Speaker 2: Gotta take the profits, man, Okay, good luck with that.
• 17:41
  Speaker 2: Good luck was setting the right price of oil, just
• 17:43
  Speaker 2: like the right price of housing and the right price
• 17:45
  Speaker 2: of groceries and the right price.
• 17:47
  Speaker 3: Of I don't know, soccer balls.
• 17:51
  Speaker 2: I for one, believe that competition helps to set pricing
• 17:54
  Speaker 2: based on what the market says.
• 17:55
  Speaker 3: But you may feel differently.
• 18:00
  Speaker 2: See taking a look at markets as we head towards
• 18:02
  Speaker 2: the bottom of the hour, Mike, You remember when things
• 18:04
  Speaker 2: were green when we kicked this hour off.
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  Speaker 4: I remember when they were well into the green when
• 18:08
  Speaker 4: I woke up this morning too.
• 18:09
  Speaker 3: They were. Now they're red. Yeah, wump wump.
• 18:11
  Speaker 2: At least a couple of the indisses are the S
• 18:13
  Speaker 2: and P's down eleven points now nothing, Big Nasdaq's down
• 18:16
  Speaker 2: forty two nothing. Big DAL is still hanging out forty
• 18:19
  Speaker 2: five points in the green. So that's cool at least.
• 18:22
  Speaker 2: But the ten year Treasury continuing to rise now seven
• 18:25
  Speaker 2: point two basis points on the day to four point
• 18:28
  Speaker 2: seven three five percent based on where mortgage rates closed yesterday,
• 18:33
  Speaker 2: this is probably pushing the national thirty year fixed rate
• 18:36
  Speaker 2: mortgage into that six eight five to six nine range, yeah.
• 18:40
  Speaker 4: Which is about the highest we've seen in a year plus. So, yeah,
• 18:44
  Speaker 4: we are approaching that seven percent threshold on thirty year
• 18:49
  Speaker 4: fixed rate mortgages, which nobody wants to hear.
• 18:51
  Speaker 2: The good news it's after the spring housing season, true,
• 18:54
  Speaker 2: so like things are slower in the fall by to
• 18:57
  Speaker 2: the tune of you know, fifteen to twenty percent.
• 19:00
  Speaker 5: Being that there wasn't much of a spring housing season.
• 19:02
  Speaker 2: Yeah, the bad news being that the spring housing season
• 19:04
  Speaker 2: was not outstanding.
• 19:06
  Speaker 3: It was very map.
• 19:07
  Speaker 2: There were houses, There were houses, and there was a spring. Yes, uh,
• 19:13
  Speaker 2: there was a spring. There was a house.
• 19:15
  Speaker 5: It's not a lot of them for sale.
• 19:17
  Speaker 2: But not many yet turned over. So it just continues
• 19:20
  Speaker 2: to be a sluggish housing market. We're gonna take a
• 19:24
  Speaker 2: quick break. When we returned, we got the trivia answer
• 19:26
  Speaker 2: and then we're talking about goldilocks after this.
• 19:37
  Speaker 1: Bringing the latest financial news straight to your radio every day.
• 19:42
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio.
• 19:45
  Speaker 3: Network right now, full of Wall.
• 19:49
  Speaker 1: Street Watch, treking the stocks, the Dato and the headlines
• 19:52
  Speaker 1: driving markets so far today right here on the Financial
• 19:55
  Speaker 1: Exchange Radio network.
• 19:58
  Speaker 6: Market's a choppie on the final training day the month,
• 20:00
  Speaker 6: as Wallstree reacts to earnings from Amazon and Apple. Overseas,
• 20:04
  Speaker 6: South Korea's main index surge of whopping eighteen percent, led
• 20:08
  Speaker 6: by gains in chip stocks. Right now, the Dow is
• 20:11
  Speaker 6: up only twenty eight points, SMP five hundred down about
• 20:13
  Speaker 6: a quarter percent or fifteen points lower, Nasdaq down about
• 20:17
  Speaker 6: a quarter percent or sixty eight points. RUSS two thousand
• 20:20
  Speaker 6: is down three quarters of a percent. Ten You're Treasure
• 20:22
  Speaker 6: reeled up seven basis points now at four point seventy
• 20:25
  Speaker 6: three percent, in Oil up two and a half percent,
• 20:28
  Speaker 6: trading at eighty five dollars a barrel. Amazon jumping thirteen
• 20:32
  Speaker 6: percent after it said cloud computing revenue jump thirty seven
• 20:35
  Speaker 6: percent year on year in the previous quarter. Amazon also
• 20:39
  Speaker 6: forecasts its capex to hit two hundred and twenty billion
• 20:42
  Speaker 6: dollars this year. As for Apple, that stock is down
• 20:45
  Speaker 6: by nine percent despite its earnings, revenue and iPhone sales
• 20:49
  Speaker 6: climbing are coming in above expectations.
• 20:51
  Speaker 3: Wherever, the tech.
• 20:52
  Speaker 6: Giant issued weak guidance for the current quarter. Citing supply constraints. Meanwhile,
• 20:56
  Speaker 6: both Chevron and Exon Mobile reported solid second court of
• 21:00
  Speaker 6: profits due to rising oil prices amid the Iran War.
• 21:03
  Speaker 6: Chevron up by one percent, while Exxon shares are down
• 21:06
  Speaker 6: by two percent. And General Motors told CNBC plans to
• 21:10
  Speaker 6: launch its own in vehicle artificial intelligence system that is
• 21:15
  Speaker 6: better tailored for its customers later this year. With whatever
• 21:19
  Speaker 6: that means, GM is down by one percent. I'm Tucker
• 21:24
  Speaker 6: Silva and that is Wall Street Watch. And in the
• 21:26
  Speaker 6: previous segment, we asked you the trivia question what year
• 21:29
  Speaker 6: was the first Harry Potter book released. It'll be nineteen
• 21:32
  Speaker 6: ninety seven, and Steven Bill ricca Mass is our winner
• 21:36
  Speaker 6: today taking home the Financial Exchange Show t shirt. Congrats
• 21:38
  Speaker 6: to Steve. We played trivia every day here on the
• 21:42
  Speaker 6: Financial Exchange. See complete contest rules at Financial Exchange Show
• 21:46
  Speaker 6: dot com.
• 21:47
  Speaker 3: Mike, how do you feel about Goldilocks lover? Great? Right?
• 21:51
  Speaker 5: Yeah, top notcher.
• 21:52
  Speaker 2: Baby Bear kind of the uh, kind of gets the
• 21:55
  Speaker 2: bad end of the story. You know, all baby Bear
• 21:57
  Speaker 2: stuff is either broken or eaten. And we got this
• 22:00
  Speaker 2: piece here today from Bloomberg, the Goldilocks US inflation and
• 22:04
  Speaker 2: spending data are an illusion. They're an illusion. Just you know,
• 22:10
  Speaker 2: now you see it, now you don't. So here's the deal.
• 22:15
  Speaker 2: The data for the month of June was pretty fine.
• 22:20
  Speaker 5: Yeah, because oil prices cratered.
• 22:23
  Speaker 3: Oil prices came down.
• 22:25
  Speaker 2: There was a little soccer tournament called the World Cup happening,
• 22:29
  Speaker 2: so people were spending money, and so the June data.
• 22:33
  Speaker 3: Looked pretty good.
• 22:35
  Speaker 2: We haven't gotten any July data yet, but odds are
• 22:37
  Speaker 2: the inflation data is not going to be as good
• 22:39
  Speaker 2: because oil prices and gas prices have moved back up.
• 22:43
  Speaker 2: The World Cup was still going on, so there's probably
• 22:45
  Speaker 2: still some decent spending happening.
• 22:47
  Speaker 3: And here's how I look at it.
• 22:51
  Speaker 2: The first of all, I don't think that we have
• 22:54
  Speaker 2: like goldilocks data to begin with.
• 22:58
  Speaker 5: I think it's something there's always something that's not great.
• 23:01
  Speaker 3: There's always something that's wrong.
• 23:03
  Speaker 2: I mean, look, even if you say you've got like
• 23:05
  Speaker 2: one month of good inflation data, is is anyone out
• 23:08
  Speaker 2: there listening being like, you know what, the inflation picture's fine?
• 23:12
  Speaker 5: Yeah?
• 23:12
  Speaker 2: No, No, even people who are like excited about the
• 23:16
  Speaker 2: one month, they're like, yeah, it was one month, it
• 23:18
  Speaker 2: was better, but man, like, it doesn't feel good. Like
• 23:22
  Speaker 2: that's basically what everyone's saying. I think maybe I'm wrong,
• 23:26
  Speaker 2: but you know, it's kind of the vibe that I get.
• 23:28
  Speaker 2: So I look at this and on one hand, I'm like, okay,
• 23:32
  Speaker 2: like the data wasn't goldilocks to begin with, but the
• 23:34
  Speaker 2: other pieces will stop telling me that this is gonna
• 23:37
  Speaker 2: like be recession. And I've been saying this a lot
• 23:40
  Speaker 2: the last few years, where everyone continues to want to
• 23:44
  Speaker 2: be like, uh oh, there's a recession coming. And look, admittedly,
• 23:48
  Speaker 2: like we've had a couple of times, including last fall,
• 23:50
  Speaker 2: where we're like, hey, the employment data is not looking great.
• 23:54
  Speaker 2: We need to really watch this because if it keeps
• 23:57
  Speaker 2: going this way, we might end up in recession territory.
• 24:00
  Speaker 2: But the last couple of years, we've seen similar things
• 24:03
  Speaker 2: and they've leveled out and we haven't had one right
• 24:06
  Speaker 2: And sure enough, that's what happened again for a third
• 24:08
  Speaker 2: straight year, by the way, might I add, So it
• 24:13
  Speaker 2: just feels like everyone wants to call recession so quickly,
• 24:17
  Speaker 2: and I just find it kind of hard to call
• 24:18
  Speaker 2: recession when you've got like six percent deficits at the
• 24:25
  Speaker 2: government level, you've got hyperscalers spending like eight hundred billion
• 24:29
  Speaker 2: dollars on data centers this year. You got the World
• 24:32
  Speaker 2: Cup spending boost that's going on, and yeah, like, are
• 24:36
  Speaker 2: people like, you know, saving less money in order to
• 24:39
  Speaker 2: spend this? Sure of course there is that gonna like
• 24:41
  Speaker 2: end at some point. Yeah, it is. But can't you
• 24:45
  Speaker 2: just wait for the recession to happen before being like, well,
• 24:48
  Speaker 2: this means recession's coming, it's it'll get here when it
• 24:51
  Speaker 2: gets here. Stop being so excited for recession.
• 24:54
  Speaker 4: Jack, I want to talk like, I don't think we've
• 24:57
  Speaker 4: spent enough time on the show today talking about wildness
• 25:00
  Speaker 4: of this week. I know that by by a data
• 25:05
  Speaker 4: release standpoint, you know, it wasn't the craziest Uh, it
• 25:11
  Speaker 4: wasn't not the craziest week that we've seen in terms
• 25:14
  Speaker 4: of the scheduled release of stuff. But this, uh, this
• 25:20
  Speaker 4: week in terms of surprises was pretty darn wild. So
• 25:26
  Speaker 4: we had a FED meeting that surprised markets pretty dramatically.
• 25:32
  Speaker 4: We had a series of earnings calls that I mean, again,
• 25:39
  Speaker 4: you might just want to say that it's because markets
• 25:41
  Speaker 4: are being more volatile right now, but a clearly surprised
• 25:44
  Speaker 4: investors across the board on all four of these earnings
• 25:46
  Speaker 4: calls that really mattered for trillion plus companies.
• 25:49
  Speaker 5: I don't. And then we have this giant hedge fund
• 25:52
  Speaker 5: that we got.
• 25:53
  Speaker 2: Central Bank reveing in currencies like it's been wild this week, Michael.
• 25:57
  Speaker 5: It has been a pretty unparalleled week.
• 26:01
  Speaker 4: Again, We've had weeks where we came out and said
• 26:03
  Speaker 4: this is going to be the busiest week that we
• 26:05
  Speaker 4: will have for years, and that remains true because we've
• 26:08
  Speaker 4: had weeks where, you know, we had a FED meeting
• 26:10
  Speaker 4: with a jobs report, a CPI reading, and a bunch
• 26:12
  Speaker 4: of earnings, and we didn't have that this time. But
• 26:15
  Speaker 4: in terms of the surprisingness of surprisingness, we're gonna go
• 26:19
  Speaker 4: with that word sure, surprisality. Yeah, we're gonna go with
• 26:22
  Speaker 4: one of those two. I don't remember ever seeing surprises.
• 26:26
  Speaker 4: I don't remember seeing anyone like this.
• 26:28
  Speaker 3: Right.
• 26:29
  Speaker 4: We had all of a sudden, big questions about Kevin
• 26:32
  Speaker 4: Warsh's Uh, credibility. I don't know if it's credibility or
• 26:38
  Speaker 4: just competence. No credibility, yeah, credibility inflation.
• 26:41
  Speaker 1: Uh.
• 26:42
  Speaker 4: We have surprises all over the place on giant earnings
• 26:45
  Speaker 4: and what it means for the AI trade. This has
• 26:48
  Speaker 4: been a pretty darn compelling week. I'm not sure what.
• 26:53
  Speaker 4: I'm not sure if there's any one lesson you can
• 26:55
  Speaker 4: draw from it, but yeah, it's been a pretty darn
• 26:58
  Speaker 4: wild week.
• 26:59
  Speaker 3: Can we talk just while we're talking central banks?
• 27:02
  Speaker 2: This one was brought to me this morning, and I
• 27:06
  Speaker 2: wish that I had been older when this was happening,
• 27:08
  Speaker 2: because you know, everything's like still so buttoned up now.
• 27:12
  Speaker 2: We even you know, for you know, Warshawn, you know Wednesday,
• 27:15
  Speaker 2: like everyone's all like up and up in arms about
• 27:18
  Speaker 2: it and this and that. And I read about some
• 27:21
  Speaker 2: stuff that was like would happen in like the seventies,
• 27:23
  Speaker 2: eighties and nineties, and you're like, man, like, these were
• 27:25
  Speaker 2: the days of central banks.
• 27:27
  Speaker 5: So in.
• 27:30
  Speaker 3: You familiar with Helmets Lessinger? First of all, just great name,
• 27:33
  Speaker 3: Helmet Schlessinger. Yes, no, he.
• 27:37
  Speaker 2: Was the fifth president of the Bundesbank OKAY in Germany
• 27:41
  Speaker 2: from August of ninety one through September of ninety three.
• 27:44
  Speaker 4: It's probably not how you pronounced his first name would be,
• 27:46
  Speaker 4: my guess, Helmut fine. I like Helmet personally definitely too.
• 27:52
  Speaker 3: It's Helmet.
• 27:53
  Speaker 2: So in any case, at one point the British are like,
• 27:58
  Speaker 2: he's at this big conference and one of the guys
• 28:01
  Speaker 2: who runs the uh, the Bank of England is like, hey,
• 28:07
  Speaker 2: like this is this is kind of you know, your
• 28:09
  Speaker 2: currency's causing a problem for us. Can you like cut
• 28:12
  Speaker 2: rates because we're really not able to deal with it
• 28:16
  Speaker 2: here in you know, England, like the pounds taking a
• 28:19
  Speaker 2: beating because of it, And Slessinger gets upset and is
• 28:23
  Speaker 2: you know, finally eventually just like fine, yeah, yeah, whatever,
• 28:26
  Speaker 2: like go away, and they had no plans to do anything.
• 28:30
  Speaker 2: Immediately after the meeting, the English central banker holds a
• 28:34
  Speaker 2: press conference and says that he secured a firm commitment
• 28:38
  Speaker 2: from Schlessinger that the bund Bank would bring German rates down.
• 28:44
  Speaker 2: So again, now you just gotta like think of the
• 28:47
  Speaker 2: personalities and everything. Central bankers hate being told what to do,
• 28:51
  Speaker 2: like and more than that, like they don't being like
• 28:54
  Speaker 2: they like being misquoted. So Slessinger a couple of days
• 28:58
  Speaker 2: later gives an interview to German reporters, and he said
• 29:03
  Speaker 2: that European currency stability wouldn't return until certain currencies were devalued,
• 29:09
  Speaker 2: implying the British pound basically ends up tanking. The pound
• 29:15
  Speaker 2: and then a few days after that goes in stages
• 29:19
  Speaker 2: an intervention on the Franc in France in order to
• 29:23
  Speaker 2: keep the Franc from collapsing. Just like the pettiness that
• 29:27
  Speaker 2: you had going on. It's like, so you misquoted me
• 29:30
  Speaker 2: saying that I was gonna help you out. Well, now
• 29:32
  Speaker 2: not only am I not gonna help you out, I'm
• 29:34
  Speaker 2: gonna bail out the French who.
• 29:36
  Speaker 3: You really don't like. Typical helmet, classic helmet. But like,
• 29:43
  Speaker 3: imagine if that happened.
• 29:44
  Speaker 2: Today, you'd have like it'd be like, oh, this is
• 29:47
  Speaker 2: the biggest scandal. It's like, No, that was like a
• 29:49
  Speaker 2: Tuesday in nineteen ninety two. Yeah, I think it was fine.
• 29:54
  Speaker 2: Let's take a quick break here. When we come back,
• 29:57
  Speaker 2: we'll do a little bit of stack roulette here.
• 30:00
  Speaker 1: The Financial Exchange every day from eleven to noon non
• 30:03
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• 30:06
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• 30:09
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• 30:12
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• 30:16
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• 30:35
  Speaker 1: Ladies and Gentlemen the weekend.
• 30:41
  Speaker 6: If you missed any of our shows from this week,
• 30:44
  Speaker 6: you can go back and find them on.
• 30:46
  Speaker 3: Our YouTube page. We stream the.
• 30:48
  Speaker 6: Show live every day, but also archive every hour highlights
• 30:52
  Speaker 6: of the show and our most newsworthy interviews. All you
• 30:55
  Speaker 6: gotta do is go to YouTube, search the Financial Exchange
• 30:59
  Speaker 6: and hits that subscribe button.
• 31:03
  Speaker 3: Mike, do you mind if I kick things off?
• 31:04
  Speaker 5: Have had it check?
• 31:05
  Speaker 3: I got a quick one for you.
• 31:06
  Speaker 2: So earlier in the hour, we were talking about, uh,
• 31:11
  Speaker 2: the uh fact that oil companies made a bunch of profits.
• 31:17
  Speaker 2: Yeah we did, Yes, Yes we did. I've got two
• 31:19
  Speaker 2: things that I want to say on this first. Uh
• 31:22
  Speaker 2: Excellent Mobile CEO Darren Woods was on CNBC this morning
• 31:27
  Speaker 2: and was asked, Hey, when do you expect prices to
• 31:29
  Speaker 2: come down at the pump? His answer, I wouldn't hold
• 31:33
  Speaker 2: my breath.
• 31:34
  Speaker 3: Cool. You don't often get a CEO that's like that
• 31:37
  Speaker 3: direct about this.
• 31:38
  Speaker 4: Yeah, so the oil execs have been getting a lot
• 31:41
  Speaker 4: more direct recently. Was how was the other one from
• 31:44
  Speaker 4: the conference in New York? Oh, boy, there was like it.
• 31:49
  Speaker 2: Was like two or three months ago, and like it
• 31:51
  Speaker 2: was like late April or something like he just.
• 31:53
  Speaker 5: Laid the cards.
• 31:54
  Speaker 4: I was like, in like two weeks, there's just not
• 31:56
  Speaker 4: going to be enough oil to go around.
• 31:58
  Speaker 3: Right, And then the whole world was like what.
• 32:00
  Speaker 2: And then a week later the president was like, yeah,
• 32:02
  Speaker 2: like this is the real deal. Also, we got a
• 32:07
  Speaker 2: great text in here that I want to read. We
• 32:10
  Speaker 2: were talking about, okay, like if you want to cap
• 32:12
  Speaker 2: profits on the upside for oil companies, are you comfortable
• 32:15
  Speaker 2: like giving them money?
• 32:16
  Speaker 3: And the answer obviously is no. Chuck.
• 32:19
  Speaker 2: If the socialists took over and we had to take
• 32:20
  Speaker 2: profits in good years and give money back in bad years,
• 32:23
  Speaker 2: what do you think the oil companies would be saying
• 32:25
  Speaker 2: about the straight of hormones right now? It's my favorite
• 32:29
  Speaker 2: auto correct ever. Yeah, the straight of hormones. I am
• 32:32
  Speaker 2: absolutely calling at that for the rest of my life.
• 32:36
  Speaker 2: Where you go this weekend, Well, I might go to
• 32:38
  Speaker 2: the straight of hormones? You know, like you never know,
• 32:42
  Speaker 2: It's just fantastic.
• 32:45
  Speaker 4: It does seem like just a whole bunch of testosterone
• 32:47
  Speaker 4: flowing through that strait right now.
• 32:49
  Speaker 2: How are things in the straight of hormones. You're not
• 32:52
  Speaker 2: really sure about that one.
• 32:53
  Speaker 3: I don't don't go there, unpredictable.
• 32:55
  Speaker 5: I do love some auto correct.
• 32:58
  Speaker 3: No, when your kids turned thirteen.
• 33:02
  Speaker 2: Yeah, we're stuck in the strait of hormones at the moment,
• 33:05
  Speaker 2: hopefully out of here in about five years. Boy, it's
• 33:09
  Speaker 2: just great. It's just fantastic. So the strait of hormones is.
• 33:17
  Speaker 5: Of the day.
• 33:17
  Speaker 3: Yeah, it's my favorite autocorrect.
• 33:20
  Speaker 4: I've got a story from the Journal about drivers who
• 33:22
  Speaker 4: are taking extreme measures to avoid new car technology, which, oh,
• 33:27
  Speaker 4: I do hear this repeated by a lot of especially
• 33:32
  Speaker 4: especially older drivers when they get a new car. The
• 33:36
  Speaker 4: bells and whistles and the alerts they bother me sometimes
• 33:40
  Speaker 4: quite a bit. And I can only imagine, you know,
• 33:45
  Speaker 4: dealing with this new technology in my sixties will probably
• 33:48
  Speaker 4: be a disaster scenario. But those drivers are you know,
• 33:52
  Speaker 4: going quite the distance in order to you know, seek
• 33:55
  Speaker 4: out cars that are not attached with all these bells
• 33:58
  Speaker 4: and whistles, or buying cars that are sometimes twenty years
• 34:01
  Speaker 4: old and trying to maintain them in order to have
• 34:04
  Speaker 4: hand crank windows and an AC system that you know,
• 34:07
  Speaker 4: just has a one through five setting rather than tuning
• 34:10
  Speaker 4: the exact temperature control to the right auto temperature that
• 34:15
  Speaker 4: you want. The most of these features I personally actually
• 34:19
  Speaker 4: find after I learned how to use them, quite useful.
• 34:22
  Speaker 4: But I do have to say that on one of
• 34:25
  Speaker 4: my cars there is now this like auto breaking feature
• 34:31
  Speaker 4: that drives me absolutely insane. I was parallel parking the
• 34:35
  Speaker 4: other night and a car like pulled to the side
• 34:39
  Speaker 4: and tried to pass me while I was parallel parking,
• 34:41
  Speaker 4: and the car just threw on its own brakes as
• 34:43
  Speaker 4: I was in the middle of parking and shrieked at me,
• 34:46
  Speaker 4: started beeping as though I was going to crash into
• 34:48
  Speaker 4: the guy and was not going to happen. Generally, think though,
• 34:53
  Speaker 4: like these safety features are useful, They're just really really expensive,
• 34:57
  Speaker 4: is the downside as I see it, and more and
• 35:01
  Speaker 4: more people are like turning them off, which I don't
• 35:04
  Speaker 4: see is.
• 35:04
  Speaker 5: A great thing.
• 35:05
  Speaker 6: I've been backing out of the driveway and uh, there's
• 35:09
  Speaker 6: just been like this somewhat medium sized branch in the driveway,
• 35:12
  Speaker 6: like one I can easily drive over, Yeah, and then
• 35:15
  Speaker 6: the car will just like panic, it throws.
• 35:19
  Speaker 4: The auto breaking of me, like if I'm doing under
• 35:23
  Speaker 4: five miles an hour, I assure you, I don't need
• 35:26
  Speaker 4: you to break for me.
• 35:28
  Speaker 2: The one that I admittedly always turn off. My car
• 35:31
  Speaker 2: has one of.
• 35:32
  Speaker 6: Those the a circle thing where it shuts off and.
• 35:36
  Speaker 2: No, I'm fine that like it drives me bananas with
• 35:39
  Speaker 2: gas prices like this, I keep that on all the time.
• 35:42
  Speaker 2: Uh No, it's it's more the Uh it's got one
• 35:45
  Speaker 2: of the things that like looks at your eyes to
• 35:47
  Speaker 2: tell if your eyes are on the road, and I
• 35:50
  Speaker 2: drive with sunglasses most of the time.
• 35:52
  Speaker 3: When I have my.
• 35:52
  Speaker 2: Sunglasses on, the thing is like insane, Like it's always
• 35:57
  Speaker 2: like you're not looking at the road, You're not looking
• 35:59
  Speaker 2: at the road, and I'm like, I am looking at
• 36:02
  Speaker 2: the road.
• 36:02
  Speaker 3: I'm I'm looking right.
• 36:04
  Speaker 2: At I just yes, I happen to just be very
• 36:08
  Speaker 2: hip and hipper than your little sensor can read.
• 36:10
  Speaker 3: So sorry, we just turned out to.
• 36:14
  Speaker 4: The full self driving cars sooner than later. But I
• 36:17
  Speaker 4: guess the good news for these drivers is that we
• 36:20
  Speaker 4: are going to have Why can I never remember late
• 36:24
  Speaker 4: the slate truck coming out soon because it's a blank
• 36:26
  Speaker 4: slate literally get a stripped down car with almost nothing
• 36:30
  Speaker 4: in it, including no radio. So if you want to
• 36:33
  Speaker 4: go that route, then you're welcome to do so. And
• 36:35
  Speaker 4: I sometimes do long for the days of my first
• 36:38
  Speaker 4: car I ever drove, which was a manual Mazda three with.
• 36:42
  Speaker 5: Hand crank windows and no cruise control.
• 36:46
  Speaker 4: Like you know that that was a pretty awesome, nice
• 36:49
  Speaker 4: car to have, and Slate's can offer it to you
• 36:52
  Speaker 4: these days. I don't know if they'll have it in manual,
• 36:54
  Speaker 4: probably not, since it's isn't it electric?
• 36:56
  Speaker 3: I do love, yeah, it is. I do love some
• 36:58
  Speaker 3: of the stuff that's in here. Though.
• 37:00
  Speaker 2: Ron Berda eighty five recently bought a new Toyota RAV
• 37:03
  Speaker 2: four and can attest that he hates the driver assistance technology,
• 37:06
  Speaker 2: And then there's a caption ron Berda says he hates
• 37:09
  Speaker 2: the driver assistance technology. People need to learn how to drive,
• 37:13
  Speaker 2: as they have for one hundred years. Burder found the
• 37:15
  Speaker 2: digital speedometer hard to read compared with physical gauges. I
• 37:18
  Speaker 2: do admit sometimes like they're like not the sharpest picture.
• 37:24
  Speaker 2: While the car has an option to switch to an
• 37:26
  Speaker 2: analog style reading, took his dealership about a half hour
• 37:28
  Speaker 2: to figure it out. So even the dealers can't figure
• 37:30
  Speaker 2: this stuff out. But then here's my favorite part. He's
• 37:33
  Speaker 2: found a workaround for other annoyances. He sticks peep of
• 37:37
  Speaker 2: pieces of tape to the display so we can find
• 37:39
  Speaker 2: critical buttons by touching them instead of looking, which is
• 37:43
  Speaker 2: actually kind of genius because the big problem with touch
• 37:45
  Speaker 2: screens is, Okay, I gotta like look for it. If
• 37:49
  Speaker 2: you have some kind of tactile sensation, then you don't
• 37:52
  Speaker 2: need to look for it.
• 37:53
  Speaker 3: Yeah, so I thought that was, uh, that was nice.
• 37:57
  Speaker 2: I enjoyed that little bit there, but mostly I joy
• 38:00
  Speaker 2: with the caption, Ron Berda says he hates his car
• 38:03
  Speaker 2: his self driving features.
• 38:05
  Speaker 3: It's good. Good.
• 38:07
  Speaker 2: Let's take a quick break for the whole rest of
• 38:09
  Speaker 2: the weekend. Stocks are now modestly up, Bonds remain in
• 38:13
  Speaker 2: sell off mode. Hope you all have a great weekend
• 38:15
  Speaker 2: and we'll see you on Monday.