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Will ChatGPT upend the labor market? · The Financial Exchange Show

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Speaker 1: and Mark Vandetti.
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Speaker 2: Our two here on the financial exchange. And the trend
1:13
Speaker 2: that started on Monday and Tuesday has continued today where
1:16
Speaker 2: stocks opened quite negatively, the S and P five hundred
1:20
Speaker 2: down more than one percent at the bottom today, and
1:24
Speaker 2: yet we sit here at the moment with the S
1:25
Speaker 2: and P up eight points, the Dow is up eighty
1:27
Speaker 2: three points, in the Nasdaq up fifteen points, so all
1:31
Speaker 2: three major US indices, the Russell two thousand even joining
1:33
Speaker 2: the party, So all four major US indices in positive territory.
1:38
Speaker 2: And this has been the story for this entire week
1:41
Speaker 2: so far, which is some nervousness at the open each day,
1:45
Speaker 2: and then by kind of midday or the early afternoon,
1:49
Speaker 2: it's been overcome and we've moved into positive territories. So
1:52
Speaker 2: at least at this point, the market's saying, hey, maybe
1:56
Speaker 2: we've done enough worrying and we'll, you know, kind of
1:58
Speaker 2: go from there based on what we get from the
2:01
Speaker 2: tariff rollout. At four pm today, tenure US Treasury is
2:08
Speaker 2: up one basis point to four point one six six percent.
2:12
Speaker 2: Oil West Texts Intermediate up fifteen cents barrel to seventy
2:15
Speaker 2: one thirty five Right now, Tripaa National Avagur gas price
2:19
Speaker 2: is moving up rapidly overnight. This appears to be again
2:25
Speaker 2: you always try to stort through like what is causing this?
2:28
Speaker 2: And you know, what's going on. Is it you know,
2:30
Speaker 2: the whole country that we're seeing, or is it you know,
2:34
Speaker 2: limited to one particular area. And there seems to be
2:38
Speaker 2: some kind of price cycle in particular going on in
2:40
Speaker 2: the Midwest. Just as an example, Ohio gasoline went from
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Speaker 2: three thirteen to three nineteen a gallon overnight. I don't
2:48
Speaker 2: know exactly why, but you've got something going on there.
2:51
Speaker 2: The rest of the country moving up as well, but
2:54
Speaker 2: there's something in the Midwest that's happening. But you've got
2:56
Speaker 2: gas prices now at three twenty three and eight tenths
2:59
Speaker 2: of ascent, up about three point seven cents overnight and
3:04
Speaker 2: now up about fourteen cents in the last month. We've
3:09
Speaker 2: got gold today moving up seventeen dollars and fifty cents
3:12
Speaker 2: announced to thirty one sixty three and fifty cents. So
3:15
Speaker 2: gold continuing to have itself heck of a year, just
3:19
Speaker 2: continue to make new all time high seemingly day after day.
3:23
Speaker 2: And that's what we've got moving in markets. Obviously, all
3:25
Speaker 2: eyes focused on the tariff announcement that's expected at four
3:31
Speaker 2: pm in the Rose Garden. But again, I know a
3:34
Speaker 2: lot of people are looking at this as like, Okay,
3:36
Speaker 2: this is you know, kind of the end of this
3:39
Speaker 2: you know, news cycle. And granted it might be like
3:42
Speaker 2: when we finally get clarity about what the initial tariff
3:46
Speaker 2: situation looks like. But what really matters in all of
3:49
Speaker 2: this is how it affects the US economy and those
3:50
Speaker 2: are going to be things that are felt over the
3:52
Speaker 2: next three, six and twelve months. And so not to
3:56
Speaker 2: get all sentimental on everyone, I view this is more
3:59
Speaker 2: of a beginning than it ends. It's a beginning. It's
4:05
Speaker 2: the beginning of like, yeah, hey, how is this actually
4:07
Speaker 2: going to play out? Like that's that's what it is.
4:09
Speaker 3: You know, we are potentially embarking on a series of
4:12
Speaker 3: long changes to the structure. It just I'll just try
4:14
Speaker 3: to step back and think about this as a researcher,
4:18
Speaker 3: as a forecast or an analyst, whatever you want to
4:22
Speaker 3: call it. The new leadership in this country said we
4:27
Speaker 3: want to change the structure of the US economy. We
4:29
Speaker 3: don't think it's working. That means we're going to be
4:33
Speaker 3: on a new trend at some point. Again, I'm just
4:36
Speaker 3: going to be very sort of clinical about this and
4:39
Speaker 3: a little bit dry. So will that new trend be higher?
4:42
Speaker 3: Will the growth rate be? Will it be steeper? Is
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Speaker 3: more maybe a more accurate way to put it, with
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Speaker 3: a growth rate be faster or slower? Will it be
4:49
Speaker 3: more volatile? Imposing tariffs moving manufacturing here? If indeed that
4:54
Speaker 3: does happen, if these tariffs stick, and this is a
4:56
Speaker 3: huge if, But let's say they follow through, and it's
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Speaker 3: this regime or the next regime, which could be from
5:03
Speaker 3: a different party. And I use regime here just generically
5:05
Speaker 3: to mean group of people.
5:07
Speaker 2: You couldn't use the word administration and it avoid you know,
5:11
Speaker 2: but it's bigger.
5:11
Speaker 3: Than it's bigger than adminit. Yeah, you're right, it's bigger
5:14
Speaker 3: than the administration, bigger than administration Trump administration. Yeah, but
5:18
Speaker 3: there's people in Congress too, and there's this whole Congress
5:21
Speaker 3: is the spirit of But at some point they're going
5:25
Speaker 3: to weigh in, probably whether it's under the current administration
5:29
Speaker 3: next okay.
5:30
Speaker 2: The administration congressorship.
5:32
Speaker 3: But to me, it's a little bit broader.
5:34
Speaker 2: But okay, not Congress isn't imposing it. Congress isn't anything.
5:38
Speaker 3: Yeah, okay, okay. So whether it's this administration or the
5:41
Speaker 3: next or the last kept the tariffs from the previous administration,
5:46
Speaker 3: Trump Trump won. The trend is clearly in favor of
5:51
Speaker 3: restrictions on trade. Sure, and that's not happening everywhere, as
5:54
Speaker 3: we'll talk about a little later in the so called
5:56
Speaker 3: stack today. So the economy will get more volatile. Probably
6:01
Speaker 3: manufacturing is more volatile than services. That means GDP is
6:04
Speaker 3: going to jump around more. That will probably translate into
6:07
Speaker 3: more volatility in capital markets too. Historically higher volatility and
6:14
Speaker 3: economic aggregates as they call these time series. I don't
6:17
Speaker 3: know if actually neither one of those terms is very clear.
6:19
Speaker 3: But variables maybe that's not clear either.
6:22
Speaker 2: I don't know.
6:23
Speaker 3: It's been associated with lower, not higher growth. So I
6:26
Speaker 3: guess what I'm getting out here is chuck. No matter
6:27
Speaker 3: what the outcome today and whether or not it sticks,
6:31
Speaker 3: I think we have to brace for a bumpier ride
6:34
Speaker 3: over the next several years, maybe longer, maybe the next generation.
6:37
Speaker 3: Maybe these trends have real staying power and probably lower everything.
6:41
Speaker 3: I hope that means inflation too.
6:45
Speaker 2: I think the big thing that I come back to
6:48
Speaker 2: on a lot of this is what the Trump administration
6:52
Speaker 2: is proposing, and you outlined a lot of this. It's
6:55
Speaker 2: an ambitious shift from where things were previously, and we
7:01
Speaker 2: haven't seen anything like this in several generations, Like you've
7:04
Speaker 2: got to go back to the early nineteen hundreds to
7:06
Speaker 2: the last time that you've seen this type of thing proposed.
7:11
Speaker 2: And obviously the world is very different now from what
7:14
Speaker 2: it was in you know, nineteen oh five, nineteen ten leg.
7:16
Speaker 3: And trade regime specifically specifically as it relates to trade.
7:19
Speaker 3: You know, like it's a very different world today, and
7:24
Speaker 3: there's no one alive who a has been through anything
7:29
Speaker 3: like this as it relates to the United States, And
7:32
Speaker 3: we don't know what, you know, the exact specifics in
7:36
Speaker 3: terms of both kind of the short term you know,
7:38
Speaker 3: next six to nine months, the intermediate term next two
7:41
Speaker 3: to three years, and the long term plan beyond that
7:43
Speaker 3: that the Trump administration has for exactly how they want
7:47
Speaker 3: this to play out. So I think I've looked at this,
7:52
Speaker 3: and again my personal views are not really relevant on this,
7:57
Speaker 3: Like I'm not in a position of you know, deciding
8:00
Speaker 3: what happens or not. But ultimately it's something where I
8:03
Speaker 3: listen to what the Trump administration has said, what they
8:07
Speaker 3: have written, and what they have disseminated out into the world,
8:11
Speaker 3: and by and large it's some variation of hey, this
8:14
Speaker 3: is gonna hurt at first. Like they're not shining away
8:18
Speaker 3: from this. They're saying it very clearly. This is going
8:22
Speaker 3: to hurt it first, it will be better later. I
8:26
Speaker 3: think the former is something that we should take one
8:29
Speaker 3: hundred with one hundred percent confidence. When's the last time
8:31
Speaker 3: you ever had a president or members of his administration say, yeah,
8:36
Speaker 3: we might not be able to avoid recession.
8:39
Speaker 2: I've never heard it.
8:40
Speaker 3: And there's a reason because that's questionable.
8:43
Speaker 2: It ruins confidence, Like it's besides that. But here's the thing.
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Speaker 3: No, I'm making a technical point though, and I'm making
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Speaker 3: a political point.
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Speaker 2: I'm sorry, No, no, I know you're making the technical
8:54
Speaker 2: point on it. It's like, it's it's not good for
8:57
Speaker 2: confidence when the leader says, hey, think like we may
8:59
Speaker 2: go into the way we're.
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Speaker 3: So than confidence. Is that the structure of the economy
9:03
Speaker 3: and the institutions that underpin the growth that we've experienced,
9:05
Speaker 3: and it's been miraculous since the Second World War in particular,
9:08
Speaker 3: and there was a regime trade regime break in the
9:11
Speaker 3: nineteen forties. It's where the General Agreement on Tariffs and Trade,
9:14
Speaker 3: now known as the WTA gap came from the old
9:16
Speaker 3: GAT which is now WTO. We decided, when we were
9:20
Speaker 3: the only manufacturing power left standing after the end of
9:23
Speaker 3: the World War, we decided we were going to take
9:25
Speaker 3: measures to lower trade barriers all over the world because
9:27
Speaker 3: it benefited us, because we were nice. So there was
9:30
Speaker 3: a break in the trade regime. Then it went from
9:32
Speaker 3: protection to slash what you might call mercantilist, which is
9:36
Speaker 3: really our chic and has to do with accumulating gold
9:39
Speaker 3: and stuff like that. We don't need to get into
9:40
Speaker 3: that because I don't think we're going back to it. It
9:42
Speaker 3: just not yet. But there was a trade regime break,
9:45
Speaker 3: and growth followed, tremendous growth, unprecedented growth, and stability of
9:51
Speaker 3: growth too. Now we're going to undo that is what
9:55
Speaker 3: is a researcher's best I know we were not in power.
9:57
Speaker 3: We don't know what's going to happen. But if you
9:59
Speaker 3: had to answer this question on an exam, on an
10:01
Speaker 3: international ECON exam, you would say, what is your best
10:03
Speaker 3: guess undoing that regime, unraveling it becoming more insular, you
10:07
Speaker 3: would say, more volatility and lower growth. That can't be
10:11
Speaker 3: good in the long term for equities. It just can't.
10:15
Speaker 2: And well, I think it raised the question of, hey
10:16
Speaker 2: is this when I say, look, we have questions about
10:19
Speaker 2: what the short term, intermediate and long term plans look like.
10:23
Speaker 2: Maybe they view this as a transitional step where it's
10:26
Speaker 2: in place for a year or two, and then after
10:29
Speaker 2: you know, said imbalances have been corrected or at least
10:31
Speaker 2: they're starting to trend in the right direction, they move
10:34
Speaker 2: away from it. So I don't know, but it's a
10:38
Speaker 2: long way of saying, look, this is a big change
10:40
Speaker 2: that is being attempted here. It could end up working
10:45
Speaker 2: out swimmingly as they expect it to, or as they
10:48
Speaker 2: hope it will. It could end up going badly.
10:51
Speaker 3: I don't I don't think you have to present those
10:53
Speaker 3: as fifty to fifty though I think I'm not presenting
10:54
Speaker 3: the weight of I know you're not. I don't think
10:56
Speaker 3: we need to talk about them in fifty to fifty terms.
10:58
Speaker 3: It's like saying an experiment experimental medical treatment could work,
11:05
Speaker 3: or you could go with the conventional tried and true,
11:08
Speaker 3: which we'll work with eighty percent probability. What they're doing
11:11
Speaker 3: is incredible. They're putting everything we've worked for in the
11:15
Speaker 3: post war era on the line here. Sure, it seems
11:19
Speaker 3: to be out of resentment. Europe's ripping us off, this
11:21
Speaker 3: country's ripping us off, that country's ripping us off. Ohio
11:24
Speaker 3: has fallen behind. Sure, that's probably not a great motivation,
11:28
Speaker 3: and there's no evidence at any time from any country
11:32
Speaker 3: in the modern era that these policies have worked to
11:35
Speaker 3: foster durable growth. This is an enormous risk that they're taking,
11:40
Speaker 3: and the way of the evidence suggests it will not succeed.
11:43
Speaker 2: So this is where we stand heading into tonight. We
11:46
Speaker 2: don't know exactly what's going to be announced. We don't
11:48
Speaker 2: know exactly you know, what we're going to see, but
11:53
Speaker 2: we'll know by the end of the day exactly what
11:55
Speaker 2: is out there as far as you know, the initial
11:58
Speaker 2: wave of implemented tariffs that begin tomorrow, and then we're
12:02
Speaker 2: gonna see how countries, companies, individuals all react to it.
12:07
Speaker 2: And that's gonna that's ultimately what's gonna determine how this goes.
12:10
Speaker 2: It's it's not gonna be what the announcement is today
12:12
Speaker 2: in the immediate market reaction after Like what happens in
12:16
Speaker 2: the five hours afterwards doesn't matter whether markets rally, I know,
12:21
Speaker 2: I know it's after you know, markets are closed, but
12:22
Speaker 2: you'll still have, you know, the after hour session in
12:25
Speaker 2: futures that start trading at six and so on and
12:27
Speaker 2: so forth. What happens tonight doesn't matter. It's going to
12:32
Speaker 2: be how does the next year play out as far
12:35
Speaker 2: as individuals and their decision making for themselves, their companies,
12:39
Speaker 2: and their countries. That that's what's gonna determine where this
12:41
Speaker 2: ends up going. So let's take a quick break. When
12:45
Speaker 2: we come back, talk a little bit about the shape
12:48
Speaker 2: of tax legislation that is trying to make its way
12:51
Speaker 2: through Congress. I say that like it's you know, self
12:53
Speaker 2: aware and can you know, navigate Congress. But we'll talk
12:56
Speaker 2: a little bit about what is going on there as
13:00
Speaker 2: Congress tries to pass an extension of the Trump tax cuts.
13:06
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13:30
Speaker 4: Right time for trivia here on the Financial Exchange in
13:33
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13:37
Speaker 4: at the age of sixty five. Kilmer made his movie
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14:27
Speaker 2: So we've got uh tax legislation trying to make its
14:30
Speaker 2: way through Congress and likely going to have to go
14:34
Speaker 2: through the path of reconciliation due to the fact that
14:38
Speaker 2: any you know, straight up extension of the Trump tax
14:41
Speaker 2: cuts probably not getting the votes that it needs in
14:44
Speaker 2: the Senate in order to be able to pass. Remember,
14:47
Speaker 2: in the Senate, you needs sixty votes in order to
14:49
Speaker 2: pass legislation not using the reconciliation process, whereas using reconciliation
14:54
Speaker 2: you can only do you can you can make do
14:56
Speaker 2: with just fifty votes. So we're starting to get some
14:59
Speaker 2: details that are peaking out, and one of the things
15:03
Speaker 2: of particular interest to I think a lot of people
15:06
Speaker 2: in high cost of living states, whether you're talking New England, California,
15:12
Speaker 2: the Pacific Northwest, anywhere else that would qualify as a
15:16
Speaker 2: high cost of living state. That's most of it, right,
15:19
Speaker 2: the northeast coast and the west coast, you get it.
15:22
Speaker 2: That's the bulk of it. I would imagine you could
15:24
Speaker 2: probably include like parts of Texas and parts of Florida.
15:28
Speaker 3: Yeah, if you want to start counting things like home insurance. Yeah.
15:30
Speaker 2: Yeah. Anyways, so the legislation appears at this point to
15:35
Speaker 2: be considering a twenty five thousand dollars cap on state
15:39
Speaker 2: and local, state, and local taxes that can be deducted
15:43
Speaker 2: as opposed to the current twenty five thousand I'm sorry,
15:46
Speaker 2: the current ten thousand dollars limits. So let me say
15:48
Speaker 2: that again without batching it in a couple different places.
15:52
Speaker 2: The new legislation is talking about raising the salt cap
15:54
Speaker 2: from ten thousand to twenty five thousand. Obviously, if you
15:58
Speaker 2: are allowing individuals to deduct more on their taxes, it
16:03
Speaker 2: stands to reason that you will have less tax revenue collected.
16:06
Speaker 2: So it raises the question of, hey, do you try
16:08
Speaker 2: to make that up somewhere else or do you say, no,
16:12
Speaker 2: it's just gonna be a larger deficit than we initially expected.
16:16
Speaker 2: We don't know yet, because it's still you can.
16:19
Speaker 3: Say A and B. These guys aren't getting cut spending.
16:21
Speaker 2: So I'm not saying cut spending. Here's the piece that's in.
16:24
Speaker 3: Raising taxes elsewhere.
16:25
Speaker 2: No, that the piece that's interesting. You are seeing a
16:28
Speaker 2: few pieces talking about Republican leadership raising taxes in certain areas. Great,
16:35
Speaker 2: and I don't know if it's actually going to make
16:39
Speaker 2: it into the final legislation, just like we don't know
16:41
Speaker 2: if this will. But you do have pieces that are
16:44
Speaker 2: out there. Read two of them this morning actually on
16:46
Speaker 2: that very topic where you know they're they're talking about, Hey,
16:50
Speaker 2: do we create you know, an extra top bracket beyond
16:53
Speaker 2: what's there right now, you know, like five million dollars
16:56
Speaker 2: of income and that's higher. Do we you know, do
17:00
Speaker 2: something on the corporate tax side as far as changing
17:03
Speaker 2: some of the ways that things are expensed in things
17:06
Speaker 2: like that. So it's it's being discussed. In general. My
17:12
Speaker 2: view on taxation and spending is really colored by the
17:16
Speaker 2: last twenty years, which is, regardless of party, Bush two,
17:22
Speaker 2: Obama Trump one, Biden Trump two, the trend has generally
17:27
Speaker 2: been towards larger deficits in each successive administration. This is
17:34
Speaker 2: in contrast to what we saw during the nineteen eighties
17:36
Speaker 2: and nineteen nineties, which, again kind of regardless of party,
17:39
Speaker 2: larger deficits initially and then not. You know, people always
17:43
Speaker 2: forget that Reagan raised taxes towards the end.
17:45
Speaker 3: Yeah, but the deficits were still like five percent of
17:48
Speaker 3: I don't think they were. But I'd vote for him
17:50
Speaker 3: even though he's no longer alive. Don't get me wrong.
17:52
Speaker 2: The point I'm making is Reagan raised taxes, Bush raised taxes,
17:56
Speaker 2: cut in, raise taxes. All three of them did, regardless
17:58
Speaker 2: of party, and regardless of.
17:59
Speaker 3: The eighty six Act, was more there were. I don't
18:02
Speaker 3: know if the wealthy ended up paying more under the
18:03
Speaker 3: eighty six Act. Loopholes were closed, but marginal rates came
18:07
Speaker 3: way down. Sure again, I yeah, I just don't think
18:10
Speaker 3: of that as a big tax hike. I think of
18:12
Speaker 3: it as more apprehensive reform.
18:13
Speaker 2: I just find it interesting that, Hey, back in the
18:16
Speaker 2: eighties and nineties.
18:17
Speaker 3: Politicians could do that, right, Like, you.
18:20
Speaker 2: Had a lot of room to operate within the confines
18:23
Speaker 2: of Congress. Today, you don't, you know.
18:26
Speaker 3: I think part of that was probably the very high
18:28
Speaker 3: nominal and elevated real interest rates of the period. We're
18:31
Speaker 3: all products of the of the most traumatic experience of
18:35
Speaker 3: our recent or longer term lives, and politicians were much
18:39
Speaker 3: more aware of the deleterious effect of high rates, and
18:43
Speaker 3: there was a real worry that even though the debt
18:46
Speaker 3: was absurdly small as a percentage of GDP relative to
18:49
Speaker 3: today we're at about one hundred percent, then it was
18:51
Speaker 3: in the twenties or thirties percentage of economic output. Politicians
18:55
Speaker 3: were keenly aware of how harmful high interest rates could be,
18:59
Speaker 3: and as a result, they were much more focused on
19:03
Speaker 3: keeping the deficit and the debt low, and Clinton was
19:06
Speaker 3: obsessed with it. Even Reagan paid Reagan understood it. He
19:10
Speaker 3: had bigger problems. Of course, we had to win the
19:12
Speaker 3: Cold War and get the economy back on its feet,
19:14
Speaker 3: so I'll give him a pass, as I tend to do.
19:18
Speaker 3: But they were just much more aware, Chuck, I think
19:20
Speaker 3: because of the experience of the seventies and early nineteen eighties,
19:23
Speaker 3: we haven't been punished yet by the expression bond vigilantes
19:29
Speaker 3: was coined in the very early nineteen eighties.
19:30
Speaker 2: Let's take a quick break when we come back. We
19:32
Speaker 2: got the trivia answer right after this.
19:41
Speaker 1: Bringing the latest financial news straight to your radio every day.
19:45
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19:51
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19:57
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20:11
Speaker 2: All right.
20:13
Speaker 4: Trivia question today was what is the highest grossing movie
20:19
Speaker 4: of Val Kilmer's career. That would be Top Gun Maverick,
20:23
Speaker 4: which grossed over one and a half billion dollars at
20:27
Speaker 4: the global box Office winner today of the new Financial
20:32
Speaker 4: Exchange Show T shirt was David from Braintree, Mass.
20:35
Speaker 1: Congrats to David, and.
20:36
Speaker 4: We play trivia every day here on the Financial Exchange.
20:40
Speaker 4: See complete contest rules at Financial Exchange Show dot com.
20:45
Speaker 2: Peace from Bloomberg US families are packing more generations under
20:49
Speaker 2: one roof to save money. And basically what we're seeing
20:53
Speaker 2: is that a record seventeen percent of home purchases last
20:56
Speaker 2: year were multi generational properties, up from eleven percent dating
21:01
Speaker 2: back to twenty twelve. So again you're seeing, you know,
21:06
Speaker 2: this shift towards multi generational living amongst buyers of all ages.
21:10
Speaker 2: I'm just quoting here from Bloomberg. Thirty six percent in
21:13
Speaker 2: cost savings was the top reason for purchasing a multi
21:16
Speaker 2: generational home, according to the National Association of Realtors, and
21:21
Speaker 2: members of jen X age forty five to fifty nine
21:24
Speaker 2: were the most likely to make such a purchase, citing
21:27
Speaker 2: the need to take care of aging parents and because
21:30
Speaker 2: their adult children never left home or both. Yeah, that
21:34
Speaker 2: sandwich generation is how you know.
21:35
Speaker 3: The way to avoid that is to talk about things
21:39
Speaker 3: your parents. In my case, my mom, my dad passed,
21:42
Speaker 3: don't like so I'll talk about tariffs a lot. My
21:45
Speaker 3: mom's sick of it. She doesn't want to hear it
21:48
Speaker 3: in order.
21:48
Speaker 2: To keep them from moving in, is what you're saying.
21:50
Speaker 3: So she doesn't want to live. Yeah, never happen, Just
21:52
Speaker 3: won't happen. Yes, Now, in all seriousness, it's cheaper to
21:57
Speaker 3: move your parent in than it is to put them
21:59
Speaker 3: in assisted living facility for several.
22:01
Speaker 2: Thousands, not even close.
22:02
Speaker 3: Yeah, not even close. So this is this is strictly
22:06
Speaker 3: uh economic, though as I mentioned, there are methods to
22:09
Speaker 3: reverting it.
22:10
Speaker 2: The outcome, if so, mostly your yours is mostly talking
22:13
Speaker 2: about things that they don't.
22:15
Speaker 3: Like, generally economic issue. Just droning on endlessly about economic issues.
22:19
Speaker 2: You also make food they don't like.
22:21
Speaker 3: No, no, no, I can't. It doesn't I could add,
22:24
Speaker 3: you could add that to the quiver, you know, if
22:26
Speaker 3: if tariffs aren't your thing.
22:28
Speaker 2: Smells that they don't enjoy in the house, bad things
22:31
Speaker 2: like that.
22:32
Speaker 3: Fairly expert at that, I was thinking, like, you.
22:33
Speaker 2: Know, Brussels sprouts, you know, killed two birds with one stone.
22:36
Speaker 2: The smell and the food that.
22:37
Speaker 4: They taco like, taco meat smells, yeah, taco meat, that's
22:40
Speaker 4: a popular one.
22:41
Speaker 2: You think that's you think that's like, I love it.
22:44
Speaker 4: I know it's not offensive, but it just gives off
22:47
Speaker 4: a smell. Oh it does, specifically turkey if you're opting
22:50
Speaker 4: for that road.
22:51
Speaker 2: Yep, that is true. That is true. I'm trying to
22:53
Speaker 2: think of what else kind of falls into that category.
22:55
Speaker 3: There's a few to live with. Yeah, look, there's leave
23:00
Speaker 3: the seat up or yeah.
23:03
Speaker 2: Okay, I gotta tell you. So my yesterday was April
23:07
Speaker 2: fools Day, right.
23:08
Speaker 4: And yeah, Mike made us sware of that.
23:11
Speaker 2: What did you hear?
23:12
Speaker 4: He just kept talking about it.
23:14
Speaker 3: I think it was his first, like like it was
23:15
Speaker 3: his first one.
23:16
Speaker 2: So my daughter thinks that April my older daughter thinks
23:20
Speaker 2: that April fools Day is just hilarious. Like I came
23:22
Speaker 2: home yesterday and it was just like there was like
23:25
Speaker 2: a box of pasta in my pillow, like when I
23:28
Speaker 2: went to lay down for like like it was just
23:31
Speaker 2: like my all of my shoes were like in the sink.
23:35
Speaker 2: It was just like complete disasters.
23:37
Speaker 4: I hid said the Masters was canceled, and I said,
23:40
Speaker 4: good one, no good no, no, they weren't good one.
23:43
Speaker 2: But here here's the other thing that she does that
23:45
Speaker 2: I find really funny, just on random days. You'll be
23:48
Speaker 2: looking for somebody to be like, hey, have you seen
23:49
Speaker 2: like my running shoes? Or you know, hey have you
23:52
Speaker 2: seen you know, my belt? And you know, my wife
23:55
Speaker 2: and I'll be looking for it. And then I asked
23:58
Speaker 2: Kurr and I'm like, hey, have you seen, like, you know,
24:00
Speaker 2: my running shoes. She's like, oh, yeah, follow me and
24:03
Speaker 2: she takes me over to the refrigerator and they're like
24:04
Speaker 2: the vegetable drawer and she's just like put him in
24:07
Speaker 2: there just to like mess with me. Yeah, And I'm like,
24:10
Speaker 2: I'm like, you're you're four and a half, Like what
24:13
Speaker 2: what's this going to be like in five years? You know?
24:16
Speaker 2: We're oh like, hey, where's my belt? I need to
24:18
Speaker 2: wear it to work? Oh, come with me. And it's
24:21
Speaker 2: in like the tub in the guest bathroom and I'm like,
24:25
Speaker 2: what is going on here? Like how I'm impressive for that? Is?
24:28
Speaker 2: How am I going to be able to find anything
24:30
Speaker 2: in a few years? So I get a kick out
24:33
Speaker 2: of it. I find it quite enjoyable.
24:35
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25:43
Speaker 2: Uh Chuck GPT a couple days ago rolled out a
25:47
Speaker 2: new image generation function that they have there that quite honestly,
25:54
Speaker 2: I tested it out and it can do all kinds
25:56
Speaker 2: of you know, pretty cool stuff. It does everything from
25:59
Speaker 2: you know, hyperrealistic photos to you can have you know,
26:04
Speaker 2: images that are you know, themed in a certain artist's
26:06
Speaker 2: style that it, you know, is familiar with. So there's
26:09
Speaker 2: some pretty impressive stuff that it can do. As a result,
26:12
Speaker 2: it gained a million users in one hour on Monday
26:18
Speaker 2: when they rolled this out, And again, the stuff that
26:22
Speaker 2: it can do is impressive. I wonder how much of this,
26:24
Speaker 2: like the impulse fades on it, but also the piece
26:28
Speaker 2: that I continued now to think, like the more advanced
26:31
Speaker 2: this stuff gets, Like the stuff that it can produce
26:35
Speaker 2: is so photorealistic that you have no idea if it's
26:37
Speaker 2: fake or not in looking at it. Sure you could,
26:39
Speaker 2: you know, force it to make a mistake or something
26:42
Speaker 2: like that. But let's say that I asked it to
26:47
Speaker 2: generate me an image of two people from the financial
26:52
Speaker 2: services industry conducting a radio show about money, the in
27:00
Speaker 2: front of a picture of the Boston Skyline photo realistically.
27:07
Speaker 2: So you're describing us, Yeah, I'm describing us. One is bald,
27:12
Speaker 2: both are Italian.
27:15
Speaker 3: And Neigi's gonna.
27:18
Speaker 2: Do not Mario and Luigi?
27:22
Speaker 1: Please?
27:22
Speaker 2: Is what I take?
27:23
Speaker 3: A couple of plumbers, a mason and a plumber.
27:26
Speaker 2: Okay, apparently open up here we go? Is it? Is
27:28
Speaker 2: it running now? It just deleted my prompt?
27:31
Speaker 3: Okay, so that racially racially insensitive requests.
27:35
Speaker 2: I thought that was fantastic. We were gonna do this
27:37
Speaker 2: in real time here and it was gonna be great,
27:38
Speaker 2: and it just deleted my Oh it's it's having an outage.
27:41
Speaker 2: So this is one of the things that they've been getting,
27:43
Speaker 2: I guess, is so much demand that it's it's not working.
27:47
Speaker 3: But also, by the way, you just use as much
27:49
Speaker 3: electricity as a third world family in a month. Yeah,
27:56
Speaker 3: bored Americans conjuring up pictures, sucking up the world for so.
28:00
Speaker 2: Says exactly, Well, here's the thing. They're not making any
28:03
Speaker 2: Every time I ask them to do this, they lose money.
28:08
Speaker 2: Really well, there's a reason that they limited I think
28:11
Speaker 2: it's the free user tier to three of these a day.
28:13
Speaker 2: I think it is, or maybe it's three an hours.
28:15
Speaker 4: What's a cost if you wanted access full access.
28:19
Speaker 2: The paid versions? Twenty bucks a month? Oh wow?
28:22
Speaker 1: Jeez?
28:23
Speaker 2: So again, who knows you know where this all ends
28:27
Speaker 2: up going. But this stuff is not going to make
28:31
Speaker 2: the money. This is going to cost them.
28:32
Speaker 3: Money, right, This stuff is a loss leader, sorry.
28:34
Speaker 2: For I have to imagine that it is the stuff
28:37
Speaker 2: that's going to make the money is when businesses can say, hey,
28:42
Speaker 2: we've got you know, three heads that we're paying sixty
28:45
Speaker 2: thousand dollars a year doing data entry open AI. Can
28:49
Speaker 2: you do the same data entry for thirty thousand a
28:52
Speaker 2: head so that we can get rid of these employees.
28:55
Speaker 2: Like that's that's what these AI companies actually want, Like
29:00
Speaker 2: that's where the money's going to be. And it also
29:02
Speaker 2: then raises the question of okay, like can you First
29:05
Speaker 2: it's you know, can you actually do that? Second is
29:07
Speaker 2: what do you do with all the people that are displaced?
29:10
Speaker 2: The can you actually do it? Is still a very
29:12
Speaker 2: much an open question. I've been seeing lots of stuff
29:15
Speaker 2: from big tech companies about you know, hey, are we
29:19
Speaker 2: you know, building our own demise because you know, you've
29:24
Speaker 2: got workers that are now using these tools to write
29:26
Speaker 2: code and stuff, and maybe they can do that. But
29:30
Speaker 2: I don't know. I don't know if that's just such
29:34
Speaker 2: a specialized niche that hey, you can't do that everywhere.
29:36
Speaker 2: If they get better at doing this stuff over time,
29:38
Speaker 2: I don't know. It's there still are a ton of
29:42
Speaker 2: unanswered questions. But everyone loves to make images, and so
29:46
Speaker 2: you know when they roll this out, you got a
29:47
Speaker 2: lot of hype behind you.
29:49
Speaker 3: I think one of the questions for the sorry, do
29:51
Speaker 3: we need to go somewhere, Tucker, Well, can I make right?
29:53
Speaker 3: Because I frequently yeah, Okay, guys. One question is is
30:02
Speaker 3: it going to be a discrete or abrupt sort of
30:04
Speaker 3: change when everybody just adopts it and it's quite disruptive
30:08
Speaker 3: to say, the job market and the economy general, the
30:11
Speaker 3: economy in a good way or the job market in
30:13
Speaker 3: a bad way, those two things aren't necessarily exclusive. Or
30:17
Speaker 3: will it just occur kind of gradually the way that
30:22
Speaker 3: the introduction of it tools. Even though there were big leaps,
30:26
Speaker 3: say in the nineteen nineties, there weren't big portions of
30:29
Speaker 3: the workforce that were displaced. There were workforce displacements, but
30:32
Speaker 3: they were for other reasons. There was a gap building
30:34
Speaker 3: between skilled and unskilled, but that's a long term trend.
30:38
Speaker 3: It wasn't a big, discrete or abrupt break. That's what
30:42
Speaker 3: I'm curious about. Is everybody going to finally decide how
30:45
Speaker 3: to make chat GBT or integrate AI, I should say
30:47
Speaker 3: more generally, and to say the Microsoft suite, so we
30:50
Speaker 3: don't have to spend hours and hours doing tedious things,
30:52
Speaker 3: or we don't need to hire junior people to do
30:55
Speaker 3: as you said, data entry. Is everybody going to figure
30:57
Speaker 3: that out all at once or is it going to
30:59
Speaker 3: be gradual? I kind of hope it's the latter. It'll
31:01
Speaker 3: be less disruptive and thus less harmful to people, but
31:08
Speaker 3: it's an open question.
31:09
Speaker 2: I guess let's take a quick break. When we come back.
31:10
Speaker 2: We got stack Roulette after this.
31:13
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32:25
Speaker 2: Mark what do you got for me for stack Roulette?
32:27
Speaker 3: Something I hadn't thought about. The headline from Bloomberg is
32:30
Speaker 3: Corporate America hoards cash for tariffs over buying backstock. I
32:36
Speaker 3: paused in the wrong place there. Basically, they're not paying out.
32:39
Speaker 3: Companies can pay out their earnings after they invest whatever
32:43
Speaker 3: they need to and pay the people they need to.
32:45
Speaker 3: They can pay them out as a dividend, or they
32:47
Speaker 3: can reinvest or they can buy back shares. In the
32:50
Speaker 3: past thirty forty years, share buybacks have become a critical
32:53
Speaker 3: part of the returns that equity investors have realized. Sorry,
32:57
Speaker 3: I sound like I'm reading, but I'm not sure anyway,
33:01
Speaker 3: So a change in that trend, and I don't know
33:04
Speaker 3: how long term this is. Let me let me just
33:06
Speaker 3: read the first couple of sentences from Bloomberg if that's okay. So,
33:09
Speaker 3: US companies announced last month the fewest buybacks and dollar
33:12
Speaker 3: terms since the COVID pandemic and an early sign of
33:15
Speaker 3: cash hoarding. The value of buybacks in the US reached
33:18
Speaker 3: thirty nine point one billion in March, lowest since twenty twenty.
33:22
Speaker 3: And if you look at a chart which they provide here,
33:25
Speaker 3: it's a pretty dramatic drop off after a pretty steep
33:28
Speaker 3: ascent over the past several years. I'm not suggesting this
33:32
Speaker 3: will continue, because, as you've said many times this morning,
33:34
Speaker 3: we don't know what's going to happen with taruffs. Even
33:36
Speaker 3: if we get some clarity today, things could reverse later
33:39
Speaker 3: in the week depending on how our trading partners respond
33:42
Speaker 3: and stuff. But increased uncertainty leads to volatility in the
33:46
Speaker 3: real economy in many ways. I tried to get at
33:49
Speaker 3: that earlier, and this is evidence because lower buybacks mean
33:54
Speaker 3: lower returns to shareholders. They're not paying these their cash
33:59
Speaker 3: stock pile is to the same extent, they were not
34:02
Speaker 3: paying out part of their cash stockpile, nor were they
34:04
Speaker 3: investing it because they're uncertain. There are growth implications. Their
34:08
Speaker 3: return to equity implications. None of them are good. This
34:11
Speaker 3: is just a little bit more hard evidence of how
34:13
Speaker 3: the tariff talk gyrations are affecting the real economy.
34:18
Speaker 2: We go from that to talking about people throwing up
34:20
Speaker 2: on a cruise ship. The New York Times reported that
34:23
Speaker 2: more than two hundred and thirty people infected with norovirus
34:27
Speaker 2: are sick on the Queen Mary two, traveling from England
34:32
Speaker 2: to the Caribbean on a twenty nine day round trip
34:39
Speaker 2: luxury cruise. Now, I don't know many things for certain
34:43
Speaker 2: in life, but I know that if there were twenty
34:48
Speaker 2: five hundred passengers on board and two hundred and twenty
34:51
Speaker 2: four of them were sick and the boat was, you know,
34:57
Speaker 2: at sea for almost a month, hard to imagine a
35:01
Speaker 2: worse scenario for me.
35:03
Speaker 3: Yeah, that's a nightmare.
35:04
Speaker 2: Hard to imagine a worse one. Maybe on a spaceship
35:06
Speaker 2: where you actually like can't even you know, stop anywhere
35:11
Speaker 2: to get off and you know, escape, that would be worse.
35:14
Speaker 2: But other than that, being stuck on a boat with
35:18
Speaker 2: two thousand people, a tenth of whom are throwing up
35:22
Speaker 2: sounds bad.
35:23
Speaker 3: Bring me a dinghy.
35:26
Speaker 2: I think there's a famous quote along those lines. There's
35:29
Speaker 2: an old Flemish saying, actually that a rescue dinghy on
35:33
Speaker 2: board a cruise ship does not a successful voyage. Make yeah,
35:40
Speaker 2: it is. It is also on the other side of
35:42
Speaker 2: the equation. Apparently, we're starting to see professional sports teams
35:47
Speaker 2: getting the memo that the price of food and drinks
35:53
Speaker 2: at the stadium is just too high. And so what
35:57
Speaker 2: you are seeing here is a number of different venues
36:01
Speaker 2: that are starting to offer, particularly a Major League Baseball
36:05
Speaker 2: some cheaper concessions. Now, the Baltimore Orioles just unveiled what
36:09
Speaker 2: they're calling their Birdland Value Menu. It's got eleven different
36:12
Speaker 2: items that are priced at five dollars and under, including
36:15
Speaker 2: hot dogs for four dollars, popcorn for three fifty, and
36:18
Speaker 2: peanuts for two fifty and a beer for five dollars
36:21
Speaker 2: instead of you know, fifteen to twenty. Milwaukee Brewers have
36:25
Speaker 2: what they're calling their four to one four value menu.
36:27
Speaker 2: It's got four different items for four dollars each, including
36:30
Speaker 2: a junior size hot dog and junior sized nachos. And look,
36:35
Speaker 2: this is something that I think is going to expand
36:39
Speaker 2: to you know a number of different areas as teams
36:42
Speaker 2: try to find that balance between how do we get
36:44
Speaker 2: the margins we want from concessions, but how do we
36:47
Speaker 2: make the prices not so high that people aren't buying
36:50
Speaker 2: the concessions? Unfortunately, I'm not sure that it really spreads
36:53
Speaker 2: to the Northeast, just because cost of living is already high,
36:57
Speaker 2: and you know, it's not really I won't say not necessary,
37:02
Speaker 2: but I don't know that, you know, local teams are
37:04
Speaker 2: gonna view it the same way necessarily, But uh, this
37:08
Speaker 2: is something that is starting to catch on in some
37:10
Speaker 2: different areas.
37:11
Speaker 4: At least that's some breaking news before the show wraps
37:14
Speaker 4: up here, Chuck. Oh yeah, Amazon is putting in a
37:16
Speaker 4: last minute bid to acquire all of TikTok, and the
37:19
Speaker 4: New York Times is reporting that Amazon.
37:22
Speaker 2: Mm hmm, how do you feel about that? Well, from
37:29
Speaker 2: what perspective, I mean, on one hand, I don't think
37:31
Speaker 2: Amazon should be allowed to buy any other major company
37:34
Speaker 2: because I think they're too close to the monopoly to
37:36
Speaker 2: begin with. For Amazon, hey, I can see it being
37:41
Speaker 2: hugely valuable that Okay, you got all these TikTok influencers
37:45
Speaker 2: on there, here's the look to the link to click
37:48
Speaker 2: in order to buy the stuff right on Amazon. Gosh,
37:51
Speaker 2: gollogy whiz, that sounds like a real win for them
37:54
Speaker 2: for the Trump administration. It's a clean sell to an
37:57
Speaker 2: American company, so it makes sense there. If it's true,
38:02
Speaker 2: it's hard to see there being anyone who says no
38:06
Speaker 2: to this. Actually, that's kind of wild. Just get it done,
38:11
Speaker 2: that's kind of wild.
38:13
Speaker 4: More than that tomorrow.
38:14
Speaker 2: More than that tomorrow on the Financial Exchange along with
38:17
Speaker 2: we'll detail all of the tariff announcements from later today.
38:21
Speaker 2: Busy show planned for tomorrow on the Financial Exchange