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Why the AI Job Apocalypse Still Isn’t Happening · The Financial Exchange Show

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Speaker 1: making a donation today. This is the Financial Exchange with
1:05
Speaker 1: Chuck Zadith and Mike Armstrong.
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Speaker 2: Chuck, Mike, and soccer with you, and as we kick
1:15
Speaker 2: things off here, we've got stocks drifting modestly upward on
1:18
Speaker 2: a couple of the major indices. But the Dow is
1:21
Speaker 2: off twenty two points right now, while the S and
1:23
Speaker 2: P's up twelve nas that can posite up one hundred
1:26
Speaker 2: and thirty one. We've got the US ten year treasury
1:30
Speaker 2: basically flat, down eight tenths of a basis point today
1:32
Speaker 2: to four point three four six percent. Taking a look
1:37
Speaker 2: at mortgage rates, they've come back in his rates have
1:39
Speaker 2: come down in the last couple of days, back down
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Speaker 2: to six point four to four percent after being north
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Speaker 2: of six and a half for you know, the beginning
1:46
Speaker 2: part of the week.
1:48
Speaker 3: Uh.
1:48
Speaker 2: Taking a look through other markets, Dollar Index down point
1:52
Speaker 2: one seven percent to ninety seven to seven oh five,
1:55
Speaker 2: and gold up another seventy six point thirty trying to
1:57
Speaker 2: make a rally after just choppy trading the last couple months,
2:01
Speaker 2: but back up to forty seven to seventy one right now.
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Speaker 4: And crude oil.
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Speaker 2: West Text Intermediate down another three ninety nine a barrel
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Speaker 2: to ninety one oh nine trip a national average for
2:13
Speaker 2: gas prices is up another let's see we get up
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Speaker 2: another half, sorry, up another two point two cents to
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Speaker 2: four fifty five and eight tenths. If you're wondering on
2:23
Speaker 2: the divergence, there a couple things. The first is there
2:26
Speaker 2: is always a little.
2:27
Speaker 4: Bit of a delay.
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Speaker 2: Remember those oil prices just started falling yesterday. But also
2:32
Speaker 2: those oil prices are oil futures. For in the case
2:36
Speaker 2: of West Text Intermediate, you are looking at the June contract.
2:41
Speaker 4: If someone is getting.
2:42
Speaker 2: A barrel delivered today, it is a different price for
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Speaker 2: either crude or finished product than what you were seeing.
2:50
Speaker 2: And remember finished product also includes, you know, additional costs.
2:53
Speaker 2: There is a spread that refiners make and what you
2:57
Speaker 2: are seeing on those what they're called is cracks. Those
3:00
Speaker 2: crack spreads are running, you know, two or three times
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Speaker 2: what they normally are because of demand for finished product
3:08
Speaker 2: in the market. So it wouldn't be entirely unexpected here
3:12
Speaker 2: if you saw a little bit of a divergence build
3:14
Speaker 2: between crude futures pricing and gas pricing right now based
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Speaker 2: on combination that's spread and you know, other factors related
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Speaker 2: to gas futures also diverging a little bit from crude.
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Speaker 2: So You've got some different pieces that are moving here,
3:31
Speaker 2: but ultimately we could see maybe a ten to fifteen
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Speaker 2: cent relief on prices at the pump if prices were
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Speaker 2: to hold here in the coming four to five days.
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Speaker 2: We'll see where we go.
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Speaker 4: Anything else catching your eye, Mike.
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Speaker 3: No, mortgage rates obviously remaining elevated in that six and
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Speaker 3: a half percent range, and we're seeing it reflected in
3:55
Speaker 3: the housing market so far this year with just activity
3:58
Speaker 3: being a little bit lackluster.
4:00
Speaker 2: Let's talk about this piece in the Wall Street Journal.
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Speaker 2: Corporate layoffs are down ten percent this year, but the
4:05
Speaker 2: AI reckoning has come for tech, And I gotta be honest,
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Speaker 2: this is kind of a garbage piece.
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Speaker 3: So my favorite part of it, though, Chuck, is when
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Speaker 3: they talk about these corporate layoffs being down ten percent,
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Speaker 3: but the AI reckoning has come for tech. They've got
4:21
Speaker 3: this beautiful visual of a bunch of circles indicating how
4:27
Speaker 3: big the layoffs have been, and two of them include
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Speaker 3: UPS and Heineken, Well and Dows.
4:33
Speaker 2: In here like Dow Chemicals in here, Morgan Stanley's another one.
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Speaker 3: Yeah, they're all in the list, but even the graphical image,
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Speaker 3: they included UPS and heine when talking about the tech
4:44
Speaker 3: are in the graphic too, they are okay, yeah, yeah.
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Speaker 2: Like they're all in there, So these are not tech
4:48
Speaker 2: layoffs that are in there. And I gotta be honest,
4:52
Speaker 2: this doesn't Okay, here's the deal. If you actually take
4:57
Speaker 2: a look at what we are seeing from and this
5:01
Speaker 2: is from indeed, so it's again private data that we
5:05
Speaker 2: are seeing here. Software development job postings are now up
5:10
Speaker 2: fourteen percent year over year. Did you know that, Michael No?
5:15
Speaker 4: I did not.
5:16
Speaker 2: I didn't either until a good friend, well not really
5:20
Speaker 2: a good friend, but I follow him on social media.
5:24
Speaker 2: Gey Berger had he goes through all of the data
5:28
Speaker 2: on a regular basis and he's like, yeah, software was
5:30
Speaker 2: basically in the wilderness until a few months ago, and
5:34
Speaker 2: now you've had a bunch of software positions that have
5:36
Speaker 2: opened recently, and so year over year you've got you know,
5:40
Speaker 2: software developer job opening growth. And remember openings typically lead hiring.
5:46
Speaker 2: What's going on in big tech, Mike. The companies that
5:49
Speaker 2: are laying off tons of people they over hired during
5:53
Speaker 2: the pandemic and now they're trying to get back to
5:56
Speaker 2: their you know, appropriate size headcount. In my opinion, Yeah,
6:00
Speaker 2: by the way.
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Speaker 3: If they can do it at the same time as
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Speaker 3: you know, AI washing it by saying that their employees
6:08
Speaker 3: are far more efficient, then their stop price gets rewarded too,
6:11
Speaker 3: So you've got this double incentive to do all of this.
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Speaker 2: So I'll make the case right now from what we've
6:18
Speaker 2: seen so far. Again, we got a jobs report tomorrow,
6:21
Speaker 2: but based on the aggregate data that we've seen for
6:25
Speaker 2: the first three and a quarter months of the year,
6:28
Speaker 2: because again we just don't have a ton from April yet,
6:32
Speaker 2: the job market has not worsened any further, and might,
6:38
Speaker 2: actually I'll even go past might, there are parts of
6:42
Speaker 2: the job market that are showing green shoots now for
6:44
Speaker 2: renewed growth as we enter into the spring. I'll like,
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Speaker 2: I think that if you are looking at the job
6:53
Speaker 2: market honestly, and I try to, because for the second
6:56
Speaker 2: half of last year I said, guys, we've got a problem,
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Speaker 2: like something is really you know, trending in.
7:01
Speaker 4: The wrong direction in the job market.
7:04
Speaker 2: Got to be honest, the last three to four months
7:06
Speaker 2: you have absolutely seen a turn that at the very
7:09
Speaker 2: least indicate that that downward momentum is stopped, and in
7:13
Speaker 2: a number of places are indicating that you've got some
7:15
Speaker 2: positive momentum that's beginning.
7:19
Speaker 5: So what is this again?
7:22
Speaker 3: This piece, I think is just buying into the the
7:29
Speaker 3: overdone fear that AI is coming for the labor market
7:33
Speaker 3: in twenty twenty six. And it's not to say that
7:35
Speaker 3: it won't ever. I think there is this risk it
7:38
Speaker 3: won't in twenty six. Yeah, I think there is that far.
7:41
Speaker 3: There's this risk out there in my view, where there's
7:46
Speaker 3: kind of two extreme paths that I can look at
7:48
Speaker 3: with AI. One would be where this technology continues to
7:52
Speaker 3: develop at such a fast pace like it has over
7:55
Speaker 3: the last couple of years that it does eventually disrupt
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Speaker 3: a whole bunch of jobs, and because it developed so fast,
8:02
Speaker 3: there's not new jobs coming to replace that immediately. It
8:05
Speaker 3: takes a few years for the labor market to kind
8:07
Speaker 3: of recover itself.
8:08
Speaker 5: In that case.
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Speaker 3: The other path, which is another extreme, is it kind
8:13
Speaker 3: of follows the path of the Internet, where big gains
8:15
Speaker 3: were made right up front, and then those gains slowed
8:19
Speaker 3: down considerably and what you were left with was a
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Speaker 3: bunch of companies trying to figure out how to monetize
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Speaker 3: the new technology, a bunch of companies that had overspent
8:29
Speaker 3: on developing the technology, and you ended up not with
8:33
Speaker 3: a labor market problem due to the Internet, but rather
8:35
Speaker 3: a stock market problem because everybody was betting that it
8:38
Speaker 3: was going to be bigger than it wound up being.
8:41
Speaker 3: So yeah, it's not to say that there can't be
8:44
Speaker 3: problems from for the labor market from AI, and it's
8:48
Speaker 3: not to say that specific jobs are already being disrupted
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Speaker 3: by AI, but the idea that it's leading to higher
8:54
Speaker 3: unemployment and layoffs in twenty twenty six is there's just.
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Speaker 2: No evidence beyond that. I'll put one other thing on
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Speaker 2: the table, is why you're not going to see it
9:05
Speaker 2: become a meaningful problem in twenty twenty six. Mike, what's
9:08
Speaker 2: the biggest problem with artificial intelligence as it relates to
9:13
Speaker 2: its use in the workplace right now?
9:15
Speaker 5: Privacy and security? No, No, that.
9:19
Speaker 4: Might be in our industry, but in general, just live
9:21
Speaker 4: it too much.
9:21
Speaker 5: I don't know.
9:23
Speaker 2: There's not enough capacity, Yeah, Mike, how are you going
9:26
Speaker 2: to displace jobs if you are being rate limited in
9:30
Speaker 2: terms of how much you can actually do with AI?
9:32
Speaker 4: Right now?
9:33
Speaker 5: Yeah, it's fair.
9:34
Speaker 3: You got to pay an immense amount of money if
9:36
Speaker 3: you actually want the capacity to do something impressive with it.
9:39
Speaker 2: So I think that you absolutely don't have enough compute
9:42
Speaker 2: capacity for it to displace any meaningful number of jobs
9:46
Speaker 2: this year and change the trajectory of the labor force
9:49
Speaker 2: as a result of it. It's not to say that
9:51
Speaker 2: we won't get to a point in the future where
9:53
Speaker 2: that becomes the case, but this year. Talk to anyone
9:56
Speaker 2: who uses you know, COUD, which is now seen. I
9:58
Speaker 2: think it's seen in I believe eightyfold increases what their
10:02
Speaker 2: CEO said in activity over the last five months.
10:06
Speaker 4: They can't use enough.
10:08
Speaker 2: They keep getting like booted out of the system because
10:10
Speaker 2: they've used too much of their compute capacity. They're rationing
10:14
Speaker 2: the compute that's available. That's not really a recipe for
10:17
Speaker 2: being like, oh, yeah, we can get rid of this employee.
10:20
Speaker 2: What if you get rid of this employee and then
10:22
Speaker 2: you get rationed in terms of your compute capacity for
10:25
Speaker 2: replacing them.
10:26
Speaker 5: I'm sure you know.
10:28
Speaker 3: There are absolutely going to be stories of silly tech
10:31
Speaker 3: companies that go and lay off critical parts of their
10:33
Speaker 3: workforce and then realize that AI cannot do what they
10:35
Speaker 3: thought it could at the price that they thought they
10:37
Speaker 3: would be able to do it, And those stories will
10:39
Speaker 3: be funny, not funny.
10:40
Speaker 5: For the laid off.
10:41
Speaker 3: People, but funny for the idiot CEOs that go and
10:44
Speaker 3: do that. But yeah, this is all part of why
10:47
Speaker 3: it is not disrupting the labor market and the aggregate.
10:50
Speaker 3: And by the way, we'll get a report on that
10:52
Speaker 3: tomorrow morning at eight thirty and I expect it to
10:54
Speaker 3: confirm our predictions.
10:57
Speaker 5: On all this.
10:58
Speaker 2: Let's take a quick break here and when we return,
11:05
Speaker 2: do we want to stick with like the chat gptification
11:08
Speaker 2: of American business. That's a good piece from the Wall
11:10
Speaker 2: Street Journal. Let's talk about that and we've got trivia next.
11:14
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Speaker 6: Time now for Trivia on the Financial Exchange. Yesterday Ted
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Speaker 6: Turner passed away at the age of eighty seven. Turner
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Speaker 6: Turner launched? Which was the first cable network Ted Turner launched?
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Speaker 5: It was in the mid seventies.
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12:47
Speaker 2: Mike, we got a piece in the Wall Street Journal.
12:49
Speaker 2: It's titled the Chat gpt ification of American Business. What
12:53
Speaker 2: exactly is it talking about here?
12:55
Speaker 3: So, what brands are realizing is that while businesses may
13:00
Speaker 3: not be latching heavily onto Chat GPT, it remains the
13:03
Speaker 3: most popular large language model AI platform for retail users.
13:09
Speaker 3: And so what they are doing is creating new applications that,
13:13
Speaker 3: rather than living on Android or iOS. They are living
13:17
Speaker 3: in chat GPT itself. It's a way of effectively having
13:24
Speaker 3: people within chat GPT ask questions about what was One
13:29
Speaker 3: of the examples Starbucks, Little Caesar's, Wyndham Hotels, for example,
13:36
Speaker 3: apparently allowing you to engage directly in there with you know,
13:40
Speaker 3: an AI about the brand and have it make suggestions
13:45
Speaker 3: to you based on you know, whatever they put into
13:49
Speaker 3: these apps. But it does not look like many of
13:51
Speaker 3: them are moving from there to okay, now place your
13:54
Speaker 3: mobile order here. Instead it's saying, okay, great, now open
13:58
Speaker 3: up the Starbucks app to go place your order. I
14:00
Speaker 3: gotta say, I don't. I don't really comprehend why you
14:04
Speaker 3: would want this.
14:06
Speaker 2: It's so here's here's my view, mic is it's nineteen
14:12
Speaker 2: ninety six, and you need a website because everyone needs
14:15
Speaker 2: a website.
14:16
Speaker 3: That's kind of where I'm landing, right, But that's fine, Like, yeah,
14:19
Speaker 3: the first websites sucked. Yeah, they like you can do
14:23
Speaker 3: like you would go to you know whatever, like let's
14:27
Speaker 3: say like McDonald's dot com, you know, back in the day,
14:30
Speaker 3: and I bet it was just a picture of like
14:32
Speaker 3: a big mac. Yeah, and you know maybe the entas.
14:36
Speaker 2: Yeah, it was it was useless, but that doesn't mean
14:40
Speaker 2: it can't be an important part.
14:41
Speaker 4: Of where you're going.
14:42
Speaker 2: Sure, and figuring out how to crawl before you walk
14:47
Speaker 2: before you run is an important piece of this. So
14:49
Speaker 2: I'm not gonna, you know, disparage a brand for being like, hey,
14:53
Speaker 2: AI is getting used a lot more. There's gonna be
14:55
Speaker 2: a lot more AI usage in the future. We need
14:58
Speaker 2: to start figuring this out. Like I'm not gonna eat
15:00
Speaker 2: them up for trying something new because quite honestly, I
15:04
Speaker 2: like to beat companies up when they're lazy and they
15:06
Speaker 2: don't try new things. So just like, oh, we can
15:08
Speaker 2: you know, rest on our laurels or you know, hey, well,
15:11
Speaker 2: you know, lobby a few politicians for legislation that benefits us.
15:15
Speaker 4: Like, no, that's the stuff that bothers me.
15:17
Speaker 2: If you want to hire some people to figure out,
15:20
Speaker 2: you know, how you can generate more sales using AI. Sure,
15:24
Speaker 2: like your your first few things, They're going to suck
15:26
Speaker 2: like this is how it is with any new technology.
15:29
Speaker 2: And I'm not gonna beat them up because they have
15:32
Speaker 2: like a sucky product on chat GPT right now. I'm
15:35
Speaker 2: at least happy that they're trying to figure out Hey,
15:38
Speaker 2: there's new technology.
15:39
Speaker 4: Can we make it work for us?
15:41
Speaker 2: And if ultimately the answer is no, then they'll figure
15:44
Speaker 2: that out and move on.
15:45
Speaker 5: And you do need to be aware of them.
15:47
Speaker 3: You need to be where your customer is, and the
15:49
Speaker 3: customer right now is on chat GPT by and large.
15:52
Speaker 5: Yeah, right, Like that part is true.
15:54
Speaker 3: What I've just been struggling with is I don't fundamentally
15:57
Speaker 3: understand what Starbucks app on chat GPT can tell me
16:02
Speaker 3: about Starbucks that chatchipt can't already, because presumably it can
16:05
Speaker 3: scrape the Internet and look for store locations and products
16:09
Speaker 3: and everything else about it. So that piece I'm just
16:11
Speaker 3: struggling to comprehend. But I'm with you insofar as, yeah,
16:17
Speaker 3: right now everybody's on chat GPT, at least in terms
16:19
Speaker 3: of the free unpaid users, and so yeah, retail brands
16:24
Speaker 3: that appeal to that group should be there and doing
16:27
Speaker 3: what they can to figure it out. Can I talk
16:29
Speaker 3: to you about I was just talking to Ben the
16:31
Speaker 3: line about this. So you know, I famously do not
16:34
Speaker 3: have an iPhone, and I instead have a Google phone
16:39
Speaker 3: that has Gemini built into it, and so I've been
16:43
Speaker 3: engaging with that in different ways recently because you've named it, No,
16:48
Speaker 3: I just call it Gemini. I don't want to get
16:51
Speaker 3: that close to my AI. But a year ago, when driving,
16:55
Speaker 3: it was basically the Google Assistant was built in there
16:58
Speaker 3: to just exclusively answer driving related questions. So for example,
17:02
Speaker 3: if I, you know, asked Google, I don't know what
17:06
Speaker 3: year was Wendy's founded, it wouldn't tell me. It would
17:09
Speaker 3: just navigate to the closest Wendy's, which is not terribly useful. Today,
17:14
Speaker 3: I can have a full on conversation with Gemini while driving,
17:17
Speaker 3: which might be distracting and maybe something that I shouldn't
17:21
Speaker 3: be doing. But you know, if I want to have
17:23
Speaker 3: a conversation about Jane Goodall and have it tell me,
17:27
Speaker 3: you know, her experience and her education and how she
17:32
Speaker 3: came to do what she did, it'll have a fifteen
17:34
Speaker 3: minute conversation with me about that and prompt in a
17:37
Speaker 3: whole bunch of different ways. If I want to learn
17:39
Speaker 3: about the demographics of people that take the commuter rail
17:44
Speaker 3: in Boston, it will pull up stats and tell me
17:47
Speaker 3: about these different subjects and we can have a lengthy
17:50
Speaker 3: conversation about it, which is I'm sure ultimately going to
17:55
Speaker 3: lead to me being misinformed about something at some point
17:58
Speaker 3: down the road, but very interesting and actually like pretty
18:03
Speaker 3: useful compared to what I do currently, which is, you know,
18:08
Speaker 3: listen to a few podcasts about subjects that I want
18:10
Speaker 3: to learn about when driving during my once a week
18:14
Speaker 3: hour and a half each way commute that I do.
18:17
Speaker 5: Mike, goohd.
18:19
Speaker 2: Sorry to digress back to a previous topic. Ben sent
18:23
Speaker 2: me from the Web Design Museum McDonald's original website in
18:27
Speaker 2: nineteen ninety six. Oh yes, there's not even a home
18:31
Speaker 2: button on it. Yeah, it's all It looks like it's
18:34
Speaker 2: just like drawn using Microsoft paint, basically. Sure, and like
18:40
Speaker 2: the menu at the top is the eight items McDonald's
18:43
Speaker 2: system now showing our food, fun stuff, community around the globe, careers,
18:49
Speaker 2: and mixed sports, which I don't know what mixed sports is.
18:54
Speaker 4: I mean I I I.
18:57
Speaker 2: When I was an intern in New York, I participated
19:01
Speaker 2: in a chicken nugget eating competition.
19:03
Speaker 5: That's what it is.
19:04
Speaker 4: Yeah, that's that's the mixed sportsport.
19:06
Speaker 5: Yeah.
19:07
Speaker 2: But uh yeah, it's again it's exactly like, there's nothing
19:11
Speaker 2: useful that you could do here.
19:13
Speaker 3: Yeah, so presumably these apps are garbage today and we
19:16
Speaker 3: will laugh at them ten years from now exactly.
19:18
Speaker 2: And that's that's totally fine because again I think, you know,
19:24
Speaker 2: maybe we'll look back at them and say, oh, like
19:25
Speaker 2: these are quaint just like nineteen ninety six. Well, we'll
19:29
Speaker 2: just have to see kind of where things go. Let's
19:31
Speaker 2: take a quick break here. Trivia Answers next.
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Speaker 1: right here on the Financial Exchange Radio.
19:58
Speaker 6: Network eleven thirty four, and we have some mixed markets
20:05
Speaker 6: out here to Dow Jones is off just over a
20:07
Speaker 6: tenth a percent, or fifty eight points. The S and
20:10
Speaker 6: P five hundred is up two tenths of a percent,
20:13
Speaker 6: The Nasdaq is up a little over half percent. Meanwhile,
20:16
Speaker 6: gold is up just under a percent and a half,
20:19
Speaker 6: while silver is up just over six percent. Shake Shack
20:24
Speaker 6: shares are off by thirty percent after the burger chain's
20:28
Speaker 6: first quarter results fell short of expectations and reported an
20:31
Speaker 6: operating loss of two point six million dollars. Shake Shack's
20:35
Speaker 6: earnings per share broke even versus earnings of twelve cents
20:38
Speaker 6: a share expected from analyst. Revenue came in at three
20:41
Speaker 6: hundred and sixty six point seven million dollars versus the
20:44
Speaker 6: three hundred and seventy two million dollar consensus estimate. McDonald's
20:49
Speaker 6: posted a beat on both the top and bottom line.
20:51
Speaker 6: Unfortunately for McDonald's, shares are down four tenths of a percent.
20:55
Speaker 6: Adjusted earnings came in at two dollars and eighty three
20:57
Speaker 6: cents per share versus the two dollars and seventy four
20:59
Speaker 6: sense of share expected from analysts. Revenue was six point
21:02
Speaker 6: five two billion dollars compared to the six point four
21:05
Speaker 6: to seven billion consensus. Door Dash shares are off seven
21:10
Speaker 6: seven tenths of a percent after the food delivery giant
21:13
Speaker 6: issued a Rosie guidance for orders in the second quarter.
21:16
Speaker 6: DoorDash sees marketplace gross order value ranging from thirty two
21:21
Speaker 6: point four billion dollars to thirty three point four billion dollars.
21:24
Speaker 6: I on Q shares are off sixtensive percent. The Quantum
21:29
Speaker 6: Computing Company said that adjusted losses before interest, taxes, depreciate, depreciation,
21:35
Speaker 6: and amortization, it came in at ninety six point eight
21:38
Speaker 6: million dollars in the first quarter. That's wider than the
21:41
Speaker 6: loss of eighty point four million dollars. Analyst Pold had
21:45
Speaker 6: sought I am Ben Kitchen and that was Wall Street Watch.
21:51
Speaker 6: Our trivia question today was which was the first cable
21:56
Speaker 6: network Ted Turner launched. Your answer was w t BS.
22:00
Speaker 6: Today's winner is Steve In with West Yarmouth. You will
22:04
Speaker 6: be taking home a Financial Exchange Show t shirt. We
22:07
Speaker 6: play trivia every day here on the Financial Exchange. See
22:10
Speaker 6: complete contest rules at Financial Exchange Show dot com.
22:13
Speaker 5: Chuck and Ben before we move on.
22:15
Speaker 3: I know we pride ourselves on this program about being
22:19
Speaker 3: in touch with the younger generation. And Boston Globes reporting
22:22
Speaker 3: it today. I heard it over the weekend from a
22:25
Speaker 3: high school teacher of mine.
22:28
Speaker 5: Do you know what sport is sweeping the nation in
22:32
Speaker 5: high schools?
22:33
Speaker 4: Pick a ball?
22:36
Speaker 3: The sport that is sweeping the nation right now is
22:38
Speaker 3: hacky sack. You cannot find a hacky sack in stores
22:43
Speaker 3: anywhere in the state right now.
22:45
Speaker 6: It's nineteen ninety four.
22:46
Speaker 5: Yeah, they are taking out from gen xers.
22:49
Speaker 3: And well, you know what, there's an miaa Hockey Hackeysack
22:53
Speaker 3: league where you can get ranked and I agree it's
22:57
Speaker 3: not a sport. But nonetheless, Hackey sack, which I have
23:00
Speaker 3: not seen since like ninety two, is apparently dominating schools
23:05
Speaker 3: all across the country right now and actually leading to
23:08
Speaker 3: difficulty and physically finding Hackey.
23:10
Speaker 6: Sa These kids all wearing Jenco jeans and airwalks.
23:13
Speaker 5: Sneakers and sideways hats.
23:14
Speaker 2: Yes, yeah, I'm sorry. Look, you can love Hackey sack,
23:18
Speaker 2: there's nothing wrong with that. Calling it a sport's not okay,
23:21
Speaker 2: it's it's not a sport. Doing that fundamentally devalues what
23:24
Speaker 2: Hackey sack is supposed to be, which is the ability
23:27
Speaker 2: to participate in something that's not connected to winning or losing.
23:32
Speaker 5: Yeah, that's fair.
23:33
Speaker 3: You know, it's the Boston Globe did not call it
23:35
Speaker 3: a sport, so maybe I misspoke.
23:37
Speaker 5: They look at it a game.
23:38
Speaker 3: Yeah, but I think that's fair. I was shocked to
23:41
Speaker 3: hear this. It came out of nowhere for me. And yeah,
23:45
Speaker 3: I was at my former high school over the weekend
23:48
Speaker 3: and my former high school math coach or math teacher
23:51
Speaker 3: informed me that hacky sack is the new thing sweeping
23:55
Speaker 3: the nation.
23:56
Speaker 6: Next it's going to be devil sticks.
23:57
Speaker 4: So that the joke that I made actually.
24:02
Speaker 2: Like, this is what you are seeing right now is
24:05
Speaker 2: the same thing we saw in the nineteen nineties for
24:09
Speaker 2: the baby boomers. The boomers in the nineties had everything
24:13
Speaker 2: marketed to them because they were the biggest generation and
24:16
Speaker 2: they were, you know, on the come up and had
24:18
Speaker 2: you know, the buying power.
24:20
Speaker 4: It's the same thing. Now.
24:22
Speaker 2: Look at any commercial and how many songs are from
24:24
Speaker 2: the late nineties and early two thousands. There's a reason
24:28
Speaker 2: why this is happening, and it's not in accidents, because
24:33
Speaker 2: the marketers want parents in their thirties and forties to
24:38
Speaker 2: be like, oh, I want to buy the stuff from
24:41
Speaker 2: my kid that I had when I was a kid.
24:43
Speaker 2: Like it's it's not an accident. So yes, I do think, uh,
24:48
Speaker 2: you know, Jinko jeans will be back soon, not even kidding.
24:53
Speaker 6: They already are actually are they? Yes, And unfortunately my
24:57
Speaker 6: wife is into him.
24:59
Speaker 4: There you go.
25:00
Speaker 3: Just to be clear though, to reiterate here in the
25:02
Speaker 3: Boston Globe article, there is a link to the twenty
25:06
Speaker 3: twenty sixth Division one Boys Hacky Sack Power rankings that
25:10
Speaker 3: ranks the top thirty two teams by town and East
25:12
Speaker 3: Bridgewater's taking the number one seed right now.
25:14
Speaker 5: It's a team sport. Just reporting what I see here, Jock.
25:19
Speaker 3: I apparently is this like figure skating where you can
25:22
Speaker 3: have like the individual competition and then the team. I'll
25:26
Speaker 3: do some research and get back to you, because I'm
25:28
Speaker 3: not honestly sure right now.
25:30
Speaker 5: But yeah, hacky Sack is back.
25:34
Speaker 4: What do you are You called a hacker?
25:36
Speaker 5: No, that's a different thing. They don't want to confuse
25:39
Speaker 5: those two.
25:41
Speaker 4: A sacker.
25:43
Speaker 5: Yeah, that's better.
25:44
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27:58
Speaker 4: He's the Boston Globes.
28:00
Speaker 2: If the starter home, some buyers are going straight to
28:02
Speaker 2: cape vacation houses. And basically what this is talking about
28:06
Speaker 2: is that you've got people who are saying, Hey, I
28:10
Speaker 2: see the rental market in vacation towns is so hot
28:13
Speaker 2: right now that I'm gonna buy that place and rent
28:16
Speaker 2: it out weekly on Airbnb or Verbo or something like that,
28:20
Speaker 2: and then continue renting where I live. It's an interesting
28:24
Speaker 2: strategy as long as the economy remains good. I know
28:28
Speaker 2: a number of people that you know we're doing this
28:31
Speaker 2: strategy in two thousand and five to two thousand and seven,
28:34
Speaker 2: how they were aspiling aspiring real estate moguls. And I
28:39
Speaker 2: got to tell you when the visitor numbers drop and
28:42
Speaker 2: you can't rent your place out but still have the mortgage.
28:46
Speaker 4: You learn very quickly.
28:48
Speaker 2: That this becomes you know, pretty dangerous pretty fast.
28:54
Speaker 4: Yeah.
28:54
Speaker 3: Look, I think the number of people that can actually
28:57
Speaker 3: pull this off is pretty limit blim. You know, they
29:00
Speaker 3: interview a couple in New York who doesn't have any kids,
29:03
Speaker 3: and yeah, buying a place in Brooklyn or Manhattan is
29:06
Speaker 3: not quite feasible. But they could instead forward one on
29:08
Speaker 3: the cape that needed some renovations, which is an interesting story.
29:12
Speaker 3: It's yeah, pretty slim, pretty rare. Most people with young children,
29:17
Speaker 3: for example, want the stability of owning their home and
29:19
Speaker 3: being in the same school district while they raise them,
29:21
Speaker 3: so that leads to some impracticalities. But I have always
29:25
Speaker 3: found it a fascinating phenomenon of the idea of Hey,
29:28
Speaker 3: you know, we all think about building wealth through home ownership,
29:31
Speaker 3: and that is a way to do it. But there's
29:33
Speaker 3: been plenty written on if people are disciplined enough to
29:37
Speaker 3: rent and then reinvest what they would be putting into
29:40
Speaker 3: home ownership into a different asset class, and in this
29:42
Speaker 3: case it's a rental property. You can be as well
29:45
Speaker 3: or better off by doing so. If you execute on
29:48
Speaker 3: it properly. I think the problem is it takes a
29:50
Speaker 3: lot of discipline.
29:52
Speaker 5: Right.
29:52
Speaker 3: The temptation when you're renting is, oh, look at this
29:54
Speaker 3: extra money I have. I'm going to go spend that
29:56
Speaker 3: on vacations and dining out and all the other things
29:59
Speaker 3: that appeal to me.
30:01
Speaker 2: Yeah, it's like anything else, look at it. As you mentioned,
30:05
Speaker 2: it all comes down to the execution.
30:07
Speaker 4: Uh.
30:07
Speaker 2: There are ways that you can you know, execute well
30:11
Speaker 2: with leverage.
30:12
Speaker 4: When I start hearing about people.
30:14
Speaker 2: You know, who don't own a home that are trying
30:18
Speaker 2: to buy a short term rental place in a vacation town,
30:23
Speaker 2: it it makes me a little bit nervous to hear
30:26
Speaker 2: that because those are very much boombustuh cycles that you
30:31
Speaker 2: go through in terms of the type of rental. Like
30:33
Speaker 2: it's again even just within residential real like rental real estate,
30:38
Speaker 2: there's something entirely different from being like, Hey, I'm gonna
30:42
Speaker 2: you know, buy a cheap long term rental in you
30:45
Speaker 2: know city X that's you know, nearby to where people
30:48
Speaker 2: need to commute, versus yeah, let's go, you know, buy
30:53
Speaker 2: the place on the beach and then rent it out.
30:55
Speaker 2: Those things can change, you know. One of these is
30:58
Speaker 2: not like the other. Yeah, is basically where I'm going.
31:00
Speaker 3: I did learn recently about a fascinating though tax loophole
31:04
Speaker 3: involved in owning and managing a short term rental that
31:07
Speaker 3: is not really available to other types of rental property,
31:10
Speaker 3: which is interesting to me. I'm no CP, I'm no
31:14
Speaker 3: tax experts, so other people need to research it. But
31:16
Speaker 3: it's specific to just being an active manager in a
31:22
Speaker 3: short term rental compared to say leasing out to a
31:25
Speaker 3: one year tenant.
31:26
Speaker 5: So interesting stuff that is actually available out there.
31:30
Speaker 2: Just take a quick break. When we come back, we'll
31:32
Speaker 2: do a little bit of stack roulettes.
31:35
Speaker 1: Okay, Real time financial insight as news breaks. The Financial
31:39
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32:00
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32:09
Speaker 4: All right, let's do a little bit of stack though
32:11
Speaker 4: out here. Mike, what do you got for me?
32:13
Speaker 3: I've got the smugness of ev drivers out there, because
32:17
Speaker 3: I genuinely don't believe that there is anyone who is
32:21
Speaker 3: more smug than somebody who drives an electric vehicle when
32:24
Speaker 3: gas prices are over four dollars per gallon. Market Watch
32:28
Speaker 3: has a piece exploring just all the cost savings that
32:30
Speaker 3: people are talking about. But when you combine the EV
32:35
Speaker 3: license plates, you know, they insist on getting the license
32:38
Speaker 3: plate that says EV right on there. So in case
32:41
Speaker 3: you mistook that Tesla for an F one fifty, they.
32:45
Speaker 5: Would correct you on it.
32:47
Speaker 3: Plus the you know, there are genuine cost savings, especially
32:50
Speaker 3: right now to plugging in at home and charging instead
32:53
Speaker 3: of filling up the gas tank. There's just a lot
32:56
Speaker 3: of EV drivers out there who are just an extreme
32:59
Speaker 3: amount of smug. In twenty twenty six, one thing I
33:03
Speaker 3: didn't know that this article pointed out there are several
33:07
Speaker 3: states and utility companies that will actually provide additional incentives
33:13
Speaker 3: for people who drive evs to charge at night during
33:17
Speaker 3: specific hours. So Ever, Source locally has one of these
33:20
Speaker 3: programs depending on your charger and your electric vehicle, where
33:23
Speaker 3: they'll pay up to eighty bucks a year to have
33:27
Speaker 3: a monitoring system in place to ensure that you are
33:29
Speaker 3: charging between the hours of like nine pm and I
33:32
Speaker 3: think five am for example, which you know is an
33:36
Speaker 3: additional costings that's out there that I just you know,
33:39
Speaker 3: wasn't previously aware of to you know, keep grid demand down.
33:44
Speaker 3: So I don't have a perspective on any of this
33:48
Speaker 3: other than just EV drivers are very smug when gas
33:51
Speaker 3: prices are high, and it's kind of.
33:52
Speaker 5: Annoying, shouldn't they be? Yeah?
33:55
Speaker 3: I mean I now own an EV and it is
33:58
Speaker 3: rather nice right now to be able to drive that
34:00
Speaker 3: thing around instead of filling.
34:01
Speaker 4: Up my Are you smug right now?
34:05
Speaker 5: Yes?
34:06
Speaker 3: But I don't go around bragging about it other than
34:10
Speaker 3: this segment right now.
34:13
Speaker 2: Mike, if it feels like you could use someone to
34:15
Speaker 2: talk to about this, yeah, yeah.
34:19
Speaker 4: It seems like there's a lot going on. Let's see.
34:21
Speaker 2: I want to talk about this piece here that was
34:25
Speaker 2: kind of interesting yesterday. Yesterday Anthropic announced in agreement to
34:30
Speaker 2: use all of the compute capacity at SpaceX SpaceX's coloss
34:35
Speaker 2: Is One Data center, Tennessee, to which you have to
34:39
Speaker 2: ask a couple things here. If there's one thing that
34:43
Speaker 2: Anthropic seems to be not great at, it's building compute capacity.
34:50
Speaker 2: If there's one thing that they seem to be really
34:51
Speaker 2: good at. It's building models.
34:53
Speaker 5: Yeah.
34:54
Speaker 2: If there's one thing that XAI now inside of SpaceX
34:58
Speaker 2: seems to be good at, it's building compute capacity. If
35:03
Speaker 2: there's one thing that they don't seem to be good at.
35:06
Speaker 4: It's building models.
35:08
Speaker 2: And so the interesting piece on this to me is
35:12
Speaker 2: it's kind of it's two enemies getting together to try
35:18
Speaker 2: to screw over Sam Altman. It does seem a bit
35:21
Speaker 2: like that, you know, very recently Elon Musk cannot stand
35:25
Speaker 2: Sam Altman, Like they got this trial going on right now.
35:28
Speaker 4: They do not like.
35:29
Speaker 2: Each other at all, and so I think part of
35:32
Speaker 2: this is Elon just being like, screw Sam. I don't
35:36
Speaker 2: want them to win. It's fine if someone else does.
35:38
Speaker 4: But whatever.
35:39
Speaker 2: The other piece is, Hey, it's pretty clear that Elon
35:41
Speaker 2: spent a bunch of money building out this giant data
35:44
Speaker 2: center with two hundred and twenty thousand GPUs, and they
35:48
Speaker 2: don't have anyone who wants to use their product in
35:50
Speaker 2: large enough numbers for it to be justified right now.
35:53
Speaker 3: Yeah, it does seem like a nail in the coffin
35:55
Speaker 3: for Grock their AI tool. I also do kind of
36:00
Speaker 3: just find it, you know, consistent with Elon's personality of
36:04
Speaker 3: having called Anthropic quote from a post earlier this year,
36:09
Speaker 3: misanthropic and evil, but has since changed his tune. And
36:13
Speaker 3: my answer is, well, of course he changed his tune
36:15
Speaker 3: once they started paying.
36:16
Speaker 2: Him, and once he realized that the data center that
36:20
Speaker 2: they were building and have built didn't have any use
36:23
Speaker 2: and was gonna lose a boatload of money.
36:25
Speaker 3: Right, Yeah, they were evil until they paid me. So
36:29
Speaker 3: that's pretty consistent with Elon's view on the world.
36:32
Speaker 2: But yeah, this was kind of interesting to me, and
36:35
Speaker 2: it potentially clears like the major bottleneck in the short term,
36:38
Speaker 2: at least for Anthropic. Again, who knows how much you know,
36:41
Speaker 2: additional compute capacity they need. But this is one where
36:46
Speaker 2: like Anthropic couldn't do anything else. It's like having a kid.
36:49
Speaker 2: If you want to have a kid today, well you
36:50
Speaker 2: got to start nine months ago. It's the same thing
36:52
Speaker 2: with a data center. You want to have a data
36:54
Speaker 2: center today, you got to start a year ago, you know.
36:57
Speaker 2: And so Anthropic clearly didn't understand how much demand was
37:01
Speaker 2: going to be there for their product, and so this
37:04
Speaker 2: is the only way that they could solve it. Unfortunately,
37:08
Speaker 2: Xai had so little demand for their product that they
37:11
Speaker 2: were able to basically say, yep, you can buy all
37:14
Speaker 2: the compute capacity that you want at our Colossus data center.
37:18
Speaker 5: Yeah.
37:18
Speaker 4: So that's kind of just an interesting little marriage that
37:21
Speaker 4: you have there. What else you got for me?
37:24
Speaker 3: The MarketWatch laid out a consumer choice award for car brands,
37:28
Speaker 3: and Honda pretty much took them all, to which I say,
37:32
Speaker 3: I don't care about a consumer choice award. The consumer
37:35
Speaker 3: choice award is how many vehicles did you sell? And
37:37
Speaker 3: once again, the Ford F series truck sold eight hundred
37:41
Speaker 3: and twenty nine thousand units in twenty twenty five, which
37:46
Speaker 3: beat out the next best selling vehicle, which was the Silverado,
37:49
Speaker 3: by over two hundred and fifty thousand units. So you
37:55
Speaker 3: can tell me that Honda's winning over and over again
37:58
Speaker 3: in terms of loyalty, but they weren't on the list
38:01
Speaker 3: until number four.
38:02
Speaker 5: In terms of units sold.
38:03
Speaker 3: Here in the US, pickup trucks dominate Ford F Series
38:06
Speaker 3: in particular.
38:07
Speaker 4: We're done for the day. Back at it tomorrow.
38:09
Speaker 2: We got a big job support to talk about, and
38:11
Speaker 2: we will see you then