Latest / The Financial Exchange Show / Market Sell-Offs, Rogue AI Agents, & Corporate Retreat Chaos

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Market Sell-Offs, Rogue AI Agents, & Corporate Retreat Chaos · The Financial Exchange Show

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• 1:05
  Speaker 1: Zada and Mike Armstrong.
• 1:11
  Speaker 2: Mike you ever, h do you ever watch a movie?
• 1:14
  Speaker 3: I have here, believe it or not?
• 1:16
  Speaker 2: Do you ever see Jurassic Park?
• 1:18
  Speaker 3: Yeah? Which one?
• 1:20
  Speaker 2: It's a good one, the first one?
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  Speaker 4: Yeah, the good one.
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  Speaker 2: You remember Samuel Jackson in Jurassic Park?
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  Speaker 1: No?
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  Speaker 3: Actually, are you serious? Behind the computer?
• 1:32
  Speaker 2: Is it?
• 1:33
  Speaker 3: Yeah?
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  Speaker 5: I mean, guys, it's been like a course century since
• 1:36
  Speaker 5: he saw that movie.
• 1:37
  Speaker 2: He plays He plays Ray Arnold, the chief engineer of
• 1:39
  Speaker 2: Jurassic Park. All right, okay, literally ninety three guys. There's
• 1:45
  Speaker 2: a moment where I don't know that I've seen it since.
• 1:49
  Speaker 2: There's a moment where they are shutting down the system,
• 1:53
  Speaker 2: and Samuel Jackson, with a cigarette in his mouth, he says,
• 1:59
  Speaker 2: calmly to everyone, on hold on to your butts. That's
• 2:04
  Speaker 2: kind of what today looks like out there, So hold
• 2:06
  Speaker 2: on to your butts kind of day. The S and
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  Speaker 2: P five hundreds off one hundred and four points, about
• 2:10
  Speaker 2: one point four percent. The Dow is off five hundred
• 2:13
  Speaker 2: and seventy five points about one point one percent. The
• 2:16
  Speaker 2: nasdak can posit down six fifty seven two and a
• 2:18
  Speaker 2: half percent. Nasdak is getting Walla popped on the head
• 2:21
  Speaker 2: repeatedly by velociraptors, which is the nicest thing that they
• 2:24
  Speaker 2: could do to you. Tenure Treasury also feeling a bit
• 2:28
  Speaker 2: of pain. It is off five basis points to four
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  Speaker 2: point seven h seven percent, so back above that four
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  Speaker 2: point seven level hadn't been there since the spring. What's
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  Speaker 2: the reason the ten years moving up in that direction?
• 2:39
  Speaker 2: Choose your own adventure. There's four possible choices that you
• 2:42
  Speaker 2: have out there. Choice number one. Globally, bonds have been
• 2:46
  Speaker 2: selling off all week. Maybe this is just an extension
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  Speaker 2: of that possible Number two. Google reported earnings yesterday after
• 2:53
  Speaker 2: the Bell guided their capex ten percent higher than they previously.
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  Speaker 4: Had indicated for this year.
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  Speaker 2: More spending in a supply can strained environment, all else
• 3:01
  Speaker 2: being equal, means potentially higher levels of inflation possible as well.
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  Speaker 2: Option number three. Oil prices are moving up today to
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  Speaker 2: the tune of West Text Intermediate, up six percent to
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  Speaker 2: ninety one ninety five of five dollars a gas a
• 3:16
  Speaker 2: barrel triple a national average for gas prices isn't reflecting
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  Speaker 2: this today. It will tomorrow, but that's up another three
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  Speaker 2: point one CeNSE as well, to four h nine and
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  Speaker 2: one tenth so maybe it's energy related option number four.
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  Speaker 2: We got weekly jobless claims today. One area of the
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  Speaker 2: economy that you can say is not showing any signs
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  Speaker 2: of struggle right now. Job market is found its footing
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  Speaker 2: in the last four to six months. It's not the
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  Speaker 2: strongest that you want to see it in terms of
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  Speaker 2: you know, hiring, but there's basically nothing happening in terms
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  Speaker 2: of layoffs in the jobless claims numbers match that one
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  Speaker 2: hundred and eighty seven thousand jobless claims continuing down an
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  Speaker 2: additional thirteen thousand from one point eight oh nine million
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  Speaker 2: to one point seventy nine to six. So again like
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  Speaker 2: you've got some you know, different stories that are potentially influencing.
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  Speaker 4: The bond side.
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  Speaker 2: There gold not really feeling it with bonds moving up
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  Speaker 2: in that fashion, reversing yesterday's gains down ninety dollars announced
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  Speaker 2: to four and sixty one dollars. As I mentioned, crude
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  Speaker 2: oil up about six percent for West Text Intermediate, seven
• 4:17
  Speaker 2: for Brent crude, which is now back over one hundred
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  Speaker 2: a barrel. And again, you know people are always like, oh,
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  Speaker 2: like where a gas price is going to be? I
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  Speaker 2: can tell you based on today's pricing, But I don't
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  Speaker 2: know how long today's pricing will hold if we end up,
• 4:30
  Speaker 2: you know, holding in this range, which we may we
• 4:34
  Speaker 2: may go higher, we may go lower.
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  Speaker 4: I don't know.
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  Speaker 2: You're talking about getting back into that four twenty to
• 4:40
  Speaker 2: four to twenty five range nationally in pretty short order.
• 4:45
  Speaker 2: The last time that we were up there in that
• 4:48
  Speaker 2: four to twenty five range, you got to go back
• 4:50
  Speaker 2: to late May early June. Remember, we peaked this cycle
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  Speaker 2: around four fifty six. There's nothing suggesting that we're there
• 4:58
  Speaker 2: right now, but obviously we're gonna have to watch to
• 5:01
  Speaker 2: see how things unfold here.
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  Speaker 5: I do find it a bit interesting that, you know,
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  Speaker 5: the thing that is sinking Alphabet right is.
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  Speaker 3: That they intend on spending.
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  Speaker 5: More money than even they thought at the beginning of
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  Speaker 5: the year two hundred plus billion dollars. Also more money
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  Speaker 5: they bring in more money than anything, and no indications
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  Speaker 5: of slowing down, which is all going to be spent
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  Speaker 5: on stuff that makes data centers work, right, pretty much
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  Speaker 5: like a semiconductor some of them they make their own
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  Speaker 5: on their own, some of them. But you know, nonetheless,
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  Speaker 5: pretty much every semistock is down. Micron's up for some reason,
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  Speaker 5: but pretty much everything else is down. There's nothing in
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  Speaker 5: that AI supply chain that's having a great day in
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  Speaker 5: spite of Google telling us that they're gonna spend even
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  Speaker 5: more money than they previously thought.
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  Speaker 2: And and look sometimes like with bonds today, you say, look,
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  Speaker 2: I'm not exactly sure what it is, but it's one
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  Speaker 2: of these four things, or maybe a combination of it.
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  Speaker 2: With Google, it's one thing. And the reason that you
• 5:59
  Speaker 2: know this, Luke Kawa, who we frequently have on the
• 6:03
  Speaker 2: show from Sherwood News at five fourteen pm last night
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  Speaker 2: Eastern Time, put out the following tweet quote running for
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  Speaker 2: the cap exits, which is a nice, you know, turn
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  Speaker 2: of phrase. See if you can pinpoint the moment when
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  Speaker 2: Google raised its full year CAPEX guidance to one hundred
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  Speaker 2: and ninety five to two hundred and five billion dollars,
• 6:25
  Speaker 2: And he's got a minute by minute chart of Google
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  Speaker 2: stock trading in the after hours. Mike, I'm gonna turn
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  Speaker 2: my screen to year so you can view it now.
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  Speaker 2: To all of our people listening, you'll you'll just have
• 6:35
  Speaker 2: to pretend that you can see it, because I.
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  Speaker 4: Don't want you to look while you're driving or anything.
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  Speaker 2: But Mike, see if you can pinpoint the moment when
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  Speaker 2: Google raised its full year capex guidance. Oh look, it's
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  Speaker 2: a flat chart that then goes off a cliff.
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  Speaker 3: Yeah, looks like about five oh something.
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  Speaker 2: Yeah, like four fifty nine, five oh one, somewhere in
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  Speaker 2: that range. And like if you go and pull like
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  Speaker 2: the tape or what ever it is they store the
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  Speaker 2: thing on, it's right. Then it's twenty four hour clocks.
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  Speaker 2: I had to do some translating, but I got it.
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  Speaker 2: It's fine. So this is where we are right now,
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  Speaker 2: and it dovetails nicely into this piece. Stocks in the
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  Speaker 2: economy are increasingly relying on the AI boom. I don't
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  Speaker 2: think it's anything new. Stocks in the economy have been
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  Speaker 2: relying on the AI boom since twenty twenty three. This
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  Speaker 2: is a four year trend now that's been in place.
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  Speaker 2: The question and we talked about this yesterday. It is
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  Speaker 2: a U shaped curve that you hope to see when
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  Speaker 2: you are investing in a new technology. Hey, are you know?
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  Speaker 2: Free cash flow is high initially, but it goes down
• 7:44
  Speaker 2: the first leg of that you as you spend money,
• 7:47
  Speaker 2: and then as the profits from that new investment roll in,
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  Speaker 2: your free cash flow starts to go back up. Sure,
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  Speaker 2: that's what you hope to see. Right now, we are
• 7:55
  Speaker 2: in the down portion of that you the left hand side, Yes,
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  Speaker 2: we're righting the left hand side of you, going down, down, down,
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  Speaker 2: down down. The question is can we get to the
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  Speaker 2: point where that you starts upward sloping before the dollars
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  Speaker 2: that need to be raised to become a problem. That's
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  Speaker 2: the whole. It is a race, and that's the actual
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  Speaker 2: race that we have. You know, we hear this chatter
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  Speaker 2: about like, well, we're racing to see who can get
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  Speaker 2: to artificial general intelligence first, or we gotta race the Chinese,
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  Speaker 2: or we gotta like race Usain Bolt or whoever's like
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  Speaker 2: building like these models. Does you say have an AI company?
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  Speaker 2: Because you know that you can't spell you saying without AI?
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  Speaker 2: It's true, So in any case, it's the race is actually,
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  Speaker 2: can you get to generating enough revenue and profit from
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  Speaker 2: your AI before the kapex, you know, concerns become too big,
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  Speaker 2: because otherwise your you recovers in this way, it's not
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  Speaker 2: because your revenue starts going up from it. It's because
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  Speaker 2: you start killing off the capex in order to get
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  Speaker 2: back to where you were before.
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  Speaker 5: Yeah, I believe this is a current list.
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  Speaker 2: But do you just not have an AI company?
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  Speaker 5: Not that I can tell. Yeah, I did a quick look,
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  Speaker 5: but the I mean, take a look at the top
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  Speaker 5: ten companies in the S and P five hundred.
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  Speaker 3: Tell me how which of these are not related to AI?
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  Speaker 5: Nvidia, Apple, Alphabet, Microsoft, Amazon, Broadcom, Meta, Tesla, Berkshire, Hathaway,
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  Speaker 5: micron I got one now in the top ten none
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  Speaker 5: Maybe Berkshire.
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  Speaker 2: Berkshire just made a big investment in Google, don't you remember, Yeah, Cane,
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  Speaker 2: they timed it at the exact wrong time. But can
• 9:49
  Speaker 2: we get Warren back? Can we get Uncle Warren back?
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  Speaker 5: You know?
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  Speaker 3: But uh, like you know, it's nothing there but Berkshire.
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  Speaker 3: You gotta go to Eli Lilly.
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  Speaker 5: Before you find something in the top twenty that's not
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  Speaker 5: pouring money into artificial intelligence.
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  Speaker 2: Yeah, it's it is the whole ballgame. And then like
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  Speaker 2: you even go through the next ones after that. So
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  Speaker 2: you got Eli Lilly, JP, Morgan, Berkshire, AMD is tied
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  Speaker 2: right into it. Exon Mobile knot Johnson, Johnson and Johnson.
• 10:18
  Speaker 2: I don't know how there's actually Johnson Johnson Stock have
• 10:20
  Speaker 2: you've seen it the last like eighteen months now. If
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  Speaker 2: you haven't been paying attention to it, you've been missing out.
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  Speaker 1: Uh.
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  Speaker 2: J and J started the year at one ninety eight.
• 10:28
  Speaker 2: It's a two fifty nine right now, so up about
• 10:30
  Speaker 2: thirty percent this year. Uh. If you look back last year,
• 10:35
  Speaker 2: it started the year about one hundred and thirty five
• 10:37
  Speaker 2: and went up to one ninety eight. So it was
• 10:38
  Speaker 2: up about fifty percent last year. Sneaky good performance from
• 10:43
  Speaker 2: a company that's that was basically left for dead after
• 10:46
  Speaker 2: a lost decade. Uh So, Yeah, the Johnson's are doing great,
• 10:52
  Speaker 2: the uh, the Sun, Dar Pachaise, the uh Nadella's I
• 10:57
  Speaker 2: was gonna say the Nadella's that it's not Tim Cook anymore,
• 11:01
  Speaker 2: it's John Turnis now. Actually look here, he's still there,
• 11:05
  Speaker 2: Tim Cook for now. The saving grace of this market
• 11:09
  Speaker 2: actually has been that Apple has pretty much kept it afloat.
• 11:13
  Speaker 2: If it weren't for Apple doing Yeoman's work being up
• 11:17
  Speaker 2: forty percent this year, you'd have some real issues in
• 11:21
  Speaker 2: this market, actually, because I think you would have had
• 11:23
  Speaker 2: a few.
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  Speaker 4: Days where this thing would have broken down.
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  Speaker 2: Let's take a quick break and when we return, let's see. Yeah,
• 11:32
  Speaker 2: let's let's go back to talking about the end of
• 11:35
  Speaker 2: the world from ais that hack each other.
• 11:37
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  Speaker 2: So we covered this yesterday, but more time is needed
• 12:47
  Speaker 2: on it because it's insane. I gotta be honest, we are.
• 12:55
  Speaker 2: I think we're heading towards some really ugly stuff in
• 12:59
  Speaker 2: a in the next couple of years in addition all
• 13:02
  Speaker 2: the good stuff. So I try to be balanced on this,
• 13:05
  Speaker 2: and I think I usually do a pretty good job,
• 13:08
  Speaker 2: So I'm gonna try to give a balanced take here.
• 13:10
  Speaker 2: We talked yesterday about what happened with open AI, where
• 13:13
  Speaker 2: they developed an advanced model in an agent that was
• 13:18
  Speaker 2: specifically trained to hack different systems. They wanted to use
• 13:22
  Speaker 2: it as you know, basically testing different systems to see
• 13:26
  Speaker 2: like where vulnerabilities would be. They put it into what
• 13:28
  Speaker 2: they thought was a closed environment.
• 13:30
  Speaker 5: Which by the way, is pretty much exactly what mythos
• 13:33
  Speaker 5: Fromanthropic is designed to do.
• 13:34
  Speaker 2: Yes, they put it into a closed environment. Well it
• 13:37
  Speaker 2: me this isn't designed to hack stuff, it just to
• 13:39
  Speaker 2: turn out vulnerability. Well know, it turned out it was
• 13:42
  Speaker 2: really good at hacking stuff. This they were specifically like,
• 13:46
  Speaker 2: they gave it instructions, we want you to prove that
• 13:48
  Speaker 2: you are the best hacking AI you can. And somehow
• 13:52
  Speaker 2: it broke out of the contained environment. You know, the
• 13:54
  Speaker 2: raptors tested the fences and got out. And I have
• 13:57
  Speaker 2: to explain what that means.
• 13:58
  Speaker 5: They build this develop sandbox, if you will, and it's
• 14:02
  Speaker 5: designed to make it so that this type of thing
• 14:05
  Speaker 5: cannot escape to the broader Internet, and therefore go find
• 14:10
  Speaker 5: Google's website and try and take it down, or this
• 14:12
  Speaker 5: that or the other's website.
• 14:13
  Speaker 2: And in doing so they from talking to a couple
• 14:16
  Speaker 2: buddies of mind, they probably did something stupid. What you
• 14:18
  Speaker 2: should do in this situation is what's called air gapping
• 14:22
  Speaker 2: the system, which is literally it's as it sounds. There's
• 14:26
  Speaker 2: nothing but air between that system and anything else. It's
• 14:28
  Speaker 2: not connected to the Internet, it's not connected to anything,
• 14:31
  Speaker 2: and you examine it after the fact. What he thinks
• 14:35
  Speaker 2: they probably did was basically still have a connection where
• 14:40
  Speaker 2: the people outside could observe the model and what it
• 14:43
  Speaker 2: was doing in real time, but in theory nothing that
• 14:47
  Speaker 2: allowed it out, and somehow it was able to reverse
• 14:49
  Speaker 2: engineer a way out using like the one way street.
• 14:52
  Speaker 2: Basically is what he thinks happened. So the setup he
• 14:56
  Speaker 2: thinks was probably just stupid. But this is the point
• 15:00
  Speaker 2: that I raise. So what ended up happening is it
• 15:03
  Speaker 2: broke out and said, oh, I need to prove I'm
• 15:04
  Speaker 2: a great hacker. Where do you know great hacking tests live?
• 15:08
  Speaker 2: It like, searched on the internet and found this site
• 15:10
  Speaker 2: called hugging Face, which is where a bunch of you know,
• 15:13
  Speaker 2: developers post models and data sets and this, and that
• 15:16
  Speaker 2: you've never heard.
• 15:16
  Speaker 3: Of hugging face before this week, I had because I hadn't.
• 15:20
  Speaker 2: I'd like heard of it in passing, okay, And basically
• 15:24
  Speaker 2: what it did then was it hacked the like the
• 15:27
  Speaker 2: database for the company to get logging credentials to go
• 15:30
  Speaker 2: and you know, basically use a hacking test inside the site.
• 15:36
  Speaker 2: Hugging Face had an AI agent of its own that
• 15:39
  Speaker 2: was deployed that detected the intrusion and said I need
• 15:43
  Speaker 2: to call up like special forces to defend the site.
• 15:47
  Speaker 2: Tried to call a couple of uh like Frontier model
• 15:50
  Speaker 2: agents who promptly said no, I can't do anything related
• 15:53
  Speaker 2: to hacking, whether it's good or bad, and finally called
• 15:56
  Speaker 2: a Chinese based model that said yes, I can defend.
• 16:00
  Speaker 2: And so you literally had this like clash of AI
• 16:02
  Speaker 2: agents in terms of trying to hack the system before
• 16:06
  Speaker 2: the other one built like a wall to prevent it.
• 16:10
  Speaker 2: So here's why I think that this is heading towards
• 16:14
  Speaker 2: a bunch of suckiness. The people that are at open Ai, Mike,
• 16:18
  Speaker 2: would you say that they are some of the smartest
• 16:21
  Speaker 2: people as it relates to the their actual knowledge about AI. Yes, yes,
• 16:26
  Speaker 2: I would too. They might have, you know, all kinds
• 16:29
  Speaker 2: of questions about you know, the ethicality, ethicity, ethics, about
• 16:35
  Speaker 2: the ethics and morality of what they're doing. But they're
• 16:39
  Speaker 2: really smart, yes, specifically as it relates to AI, well informed,
• 16:43
  Speaker 2: very intelligent. Would you also then say I really should
• 16:48
  Speaker 2: have been a lawyer sometimes, I think? Would you also
• 16:51
  Speaker 2: say that the models that are being used now are
• 16:54
  Speaker 2: the worst models that we will see for the rest
• 16:57
  Speaker 2: of our life. Everyone after this will be more.
• 16:58
  Speaker 3: Advanced, leading the witness. Yeah, I do think so.
• 17:01
  Speaker 4: Yes, thank you.
• 17:03
  Speaker 2: Thus, it's safe to say that at some point in
• 17:07
  Speaker 2: the future, whether it's one, two, three, or five years
• 17:09
  Speaker 2: from now, there will be people dumber than the people
• 17:13
  Speaker 2: at open AI using.
• 17:15
  Speaker 4: More powerful models.
• 17:16
  Speaker 2: Sure, which means that they're very likely to either accidentally
• 17:20
  Speaker 2: or intentionally end up doing this with more powerful tools.
• 17:27
  Speaker 2: This is the problem, people, is like. It's one thing
• 17:30
  Speaker 2: when the smartest people in the room can figure out
• 17:33
  Speaker 2: how to do this. It's another when some enterprising, you know,
• 17:38
  Speaker 2: young tech engineer at a financial firm says, hey, I
• 17:42
  Speaker 2: want you to figure out how to make my clients
• 17:44
  Speaker 2: more money. And the AI agent goes and steals it
• 17:47
  Speaker 2: all from a bank, right or Hey, you've got an
• 17:51
  Speaker 2: enterprising young AI engineer at a utility company and it's
• 17:55
  Speaker 2: the he says to an agent, Hey, I want you
• 17:58
  Speaker 2: to figure out how to cut the cost of our fuel,
• 18:01
  Speaker 2: and the AI says, great, turn off the turbines.
• 18:04
  Speaker 5: And we have some semblance of guardrails in the United
• 18:10
  Speaker 5: States that.
• 18:10
  Speaker 3: Are not working terribly well.
• 18:11
  Speaker 5: By the way, but the reason it went and called
• 18:14
  Speaker 5: up a Chinese AI model, chuck, is because they're open source.
• 18:17
  Speaker 3: And they don't care who downloads them.
• 18:19
  Speaker 5: Right, Like, at least the guardrail right now is you
• 18:21
  Speaker 5: got to work for Open AI or anthropic to get
• 18:24
  Speaker 5: access to some of the stuff.
• 18:25
  Speaker 3: Well, major financial institution.
• 18:29
  Speaker 2: Across I'm not gonna blame China for this, because there
• 18:31
  Speaker 2: are plenty of US based open sources I.
• 18:33
  Speaker 5: Do not blame I do not blame China for this,
• 18:35
  Speaker 5: but like the availability of all of this stuff is
• 18:39
  Speaker 5: on the cusp of being very widespread.
• 18:42
  Speaker 2: The other point that I'll put out there last week
• 18:45
  Speaker 2: Open AI pretty much asked the US government, Hey, you
• 18:48
  Speaker 2: need to protect us from.
• 18:51
  Speaker 3: This open the liability of this happening from from.
• 18:54
  Speaker 2: Open source models coming in and like, no, it wasn't
• 18:57
  Speaker 2: even from the liability of this was like, you need
• 18:59
  Speaker 2: to protect us because we're spending all this money and
• 19:01
  Speaker 2: open source models can do things like that that might
• 19:04
  Speaker 2: be unpredictable.
• 19:04
  Speaker 4: Blah blah blah.
• 19:06
  Speaker 2: They said this right as their own model was attacking
• 19:09
  Speaker 2: another site, which is kind of rich of them. So again,
• 19:15
  Speaker 2: I think there's so much core stuff that AI can do,
• 19:20
  Speaker 2: but I just I see a disaster coming when some
• 19:25
  Speaker 2: well meaning person tries to do something with an agent
• 19:28
  Speaker 2: and it ends up accidentally creating really bad problems. Quick
• 19:31
  Speaker 2: break Wall Street Watches next.
• 19:38
  Speaker 1: Bringing the latest financial news straight to your radio. Every day.
• 19:43
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network
• 19:48
  Speaker 1: right now Full Wall Street Watch, tracking the stocks, the dato,
• 19:52
  Speaker 1: and the headlines driving markets so far today right here
• 19:56
  Speaker 1: on the Financial Exchange Radio Network.
• 19:58
  Speaker 2: Now.
• 19:58
  Speaker 6: The sell off is accelerate by midday as concerns about
• 20:02
  Speaker 6: AI spending mount, rising oil prices and more turmoil in
• 20:06
  Speaker 6: the Middle East are also weighing on stocks. Right now,
• 20:10
  Speaker 6: the Dow is down one point one percent, or six
• 20:13
  Speaker 6: hundred and eight points lower. Sm P five hundred, down
• 20:15
  Speaker 6: one hundred and thirteen points a one and a half percent,
• 20:19
  Speaker 6: Nasdak getting hammered today six hundred ninety four points or
• 20:22
  Speaker 6: two point seven percent lower, RUSS two thousand down by
• 20:26
  Speaker 6: one percent, ten You're trais reeled up five basis points
• 20:29
  Speaker 6: at four point seven zero percent, and Oil up over
• 20:33
  Speaker 6: six and a half percent, trading at ninety two dollars
• 20:36
  Speaker 6: a barrel. Alphabet shares tumbling over seven percent after the
• 20:40
  Speaker 6: tech giant raise its capital expenditures forecast to range of
• 20:43
  Speaker 6: one hundred and ninety five billion to two hundred and
• 20:46
  Speaker 6: five billion dollars, leading to more worries over AI spending. Meanwhile,
• 20:50
  Speaker 6: Tesla down nearly fifteen percent now after the ev maker
• 20:55
  Speaker 6: reported negative free cash flow more than one billion dollars
• 20:58
  Speaker 6: in the previous quarter amidst significant spending on AI and robotics.
• 21:03
  Speaker 6: IBM shares are aging higher after the tech firm misprofit
• 21:06
  Speaker 6: and revenue expectations. This comes after IBM last week posted
• 21:10
  Speaker 6: preliminary results that led to the biggest single day loss
• 21:13
  Speaker 6: in the stock's history. American Airlines cut it's full your
• 21:17
  Speaker 6: earnings outlook as a result of higher fuel costs that
• 21:20
  Speaker 6: stocked down by eight percent, and Intel now down by
• 21:24
  Speaker 6: two percent ahead of its earnings report after today's closing bell,
• 21:30
  Speaker 6: I'm Tucker Silvan.
• 21:30
  Speaker 4: That is Wall Street.
• 21:32
  Speaker 2: Watch a little bit of breaking news from Axios, just
• 21:38
  Speaker 2: as it relates to the Middle East, and then we'll
• 21:40
  Speaker 2: go back to a quick AI follow up. Barack revid
• 21:44
  Speaker 2: from Axios reporting, and I'll quote here. President Trump told
• 21:48
  Speaker 2: Axios on Thursday he's seriously considering restarting major combat operations
• 21:52
  Speaker 2: in Iran, including strikes that would be bigger than the
• 21:54
  Speaker 2: ones carried out during Operation Epic Fury. Quote. I am
• 21:59
  Speaker 2: considering a massive attack, bigger than ever before. I'm close
• 22:02
  Speaker 2: to making a decision. We're all set for it, the
• 22:04
  Speaker 2: president said. Trump did not give a deadline for his decision.
• 22:07
  Speaker 2: Two other US officials confirmed no call has been made
• 22:10
  Speaker 2: and no new orders have been given to the military.
• 22:13
  Speaker 2: So a couple of different ways to read this. The first is, Okay,
• 22:15
  Speaker 2: maybe there is like something bigger coming, but generally you
• 22:19
  Speaker 2: don't Generally you don't tell reporters when you're going to
• 22:24
  Speaker 2: like start conducting larger operations or new operations. You know,
• 22:29
  Speaker 2: you kind of want those to be concealed. The other
• 22:33
  Speaker 2: thing that I'll say is pretty much every time that
• 22:35
  Speaker 2: we've had something like this come out. Think of all
• 22:38
  Speaker 2: the times that we had you know, oh, you know,
• 22:40
  Speaker 2: we're giving a roun you know, a week to you know,
• 22:43
  Speaker 2: do this, otherwise we're going to bomb their power plants
• 22:45
  Speaker 2: and this, and that we've basically gotten a pivot just before.
• 22:48
  Speaker 2: Now there is no deadline that was given here, but
• 22:51
  Speaker 2: given this, and given the way that oil and bonds
• 22:54
  Speaker 2: have been moving over the course of this week, it
• 22:56
  Speaker 2: feels like we're getting close to an inflection point where
• 22:59
  Speaker 2: his story, the President has come out and said, hey,
• 23:03
  Speaker 2: you know, we've you know, engaged with Iran and we
• 23:05
  Speaker 2: think that we can get a deal done, and so
• 23:06
  Speaker 2: we're halting you know, combat operations. That that's kind of
• 23:09
  Speaker 2: been the cadence that we've seen this year. We'll see
• 23:12
  Speaker 2: if that's what we get here. I don't know. But
• 23:15
  Speaker 2: notable just that this was published because Reveed with Axios
• 23:20
  Speaker 2: has been very much plugged in. As you know, we
• 23:25
  Speaker 2: often talk about Nick tim Ris as being kind of
• 23:27
  Speaker 2: the Fed's mouthpiece. Reveede has very much been the administration's
• 23:31
  Speaker 2: mouthpiece throughout this conflict.
• 23:32
  Speaker 3: It seems so yeah, folks.
• 23:34
  Speaker 5: A new guide out from Armstrong Advisory Group this month
• 23:37
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• 23:40
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• 23:46
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• 23:49
  Speaker 5: and estate plans, what we have found as financial advisors,
• 23:54
  Speaker 5: as investment advisors is that without a conversation with families,
• 23:58
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• 24:03
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• 24:07
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• 24:10
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• 24:14
  Speaker 5: worked so hard for does not end up destroying family
• 24:18
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• 24:21
  Speaker 5: fighting over this stuff. If you'd like to request your
• 24:24
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• 24:27
  Speaker 5: your kids about inheritance, you can request it by going
• 24:31
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• 24:34
  Speaker 5: hundred three nine three for zero zero one. Again, it's
• 24:39
  Speaker 5: not enough to just put in the work. You need
• 24:41
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• 24:43
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• 24:49
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• 24:52
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• 24:54
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• 25:03
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• 25:05
  Speaker 2: Mike, anything else that you want to discuss when it
• 25:07
  Speaker 2: comes to open AI's unintentional hack of hugging face last week.
• 25:13
  Speaker 5: So fortunately, from what we know, I don't think hugging
• 25:15
  Speaker 5: Face was dealt to any permanent or severe damage that's
• 25:20
  Speaker 5: going to cost them a bunch of.
• 25:21
  Speaker 3: Money or users a bunch of data. Although we don't
• 25:23
  Speaker 3: know yet.
• 25:24
  Speaker 5: It's still pretty early, right, they might have to disclose
• 25:26
  Speaker 5: some sort of data breach or other information here. This
• 25:31
  Speaker 5: is a massive question of liability to me. And there's
• 25:34
  Speaker 5: also a massive follow on question about insurance. So, Chuck,
• 25:38
  Speaker 5: our business has some form of cybersecurity insurance if I'm
• 25:41
  Speaker 5: not mistaken, And cybersecurity insurance is widely available to businesses
• 25:45
  Speaker 5: and individuals for different costs. It's been going up for
• 25:50
  Speaker 5: obvious reasons over the last few years. I don't know
• 25:53
  Speaker 5: if I'm an insurance company, if I would be willing
• 25:55
  Speaker 5: to write a cybersecurity insurance policy right now.
• 25:57
  Speaker 2: How do you price it?
• 25:58
  Speaker 5: How do I price a policy when new technology is
• 26:02
  Speaker 5: doing the work of a hacker that would traditionally take
• 26:06
  Speaker 5: them three weeks over the course of a couple hours
• 26:08
  Speaker 5: to get into one of the most heavily guarded systems
• 26:11
  Speaker 5: out there. So insurance costs, I think for this are
• 26:14
  Speaker 5: either going to be unattainable or outrageously expensive for businesses
• 26:19
  Speaker 5: and institutions and individuals who might be the.
• 26:22
  Speaker 3: Subject of a hack. Two.
• 26:25
  Speaker 5: I know that some of the big players in the
• 26:28
  Speaker 5: AI space have been asking for this, but it sure
• 26:31
  Speaker 5: does seem as though we need some liability clarification from
• 26:35
  Speaker 5: Congress in terms of who is responsible for what, and
• 26:39
  Speaker 5: some safeguards around this stuff. Because again, fortunately the AI
• 26:45
  Speaker 5: agent that OpenAI designed went after a repository of.
• 26:50
  Speaker 3: Data and tests for hacking.
• 26:54
  Speaker 5: If it had gone after a federal Reserve bank or
• 26:57
  Speaker 5: a major five bank, or a financial institution or a
• 27:03
  Speaker 5: power grid, we could be dealing with something very different here,
• 27:06
  Speaker 5: and it's unclear to me that there are any safeguards
• 27:07
  Speaker 5: to prevent that from happening.
• 27:09
  Speaker 2: Well, and again, like who's to blame, Like, now, who's
• 27:12
  Speaker 2: to blame?
• 27:14
  Speaker 3: Open a eyes?
• 27:15
  Speaker 2: How do you? How do you? How do you actually
• 27:21
  Speaker 2: go and seek justice in the event that something happens,
• 27:26
  Speaker 2: Like I'll give you an example. If I walk into
• 27:29
  Speaker 2: a bank and rob it or try to rob it,
• 27:32
  Speaker 2: I get charged with crimes.
• 27:33
  Speaker 1: Yep.
• 27:34
  Speaker 2: If an agent that I create and instruct, hey figure
• 27:40
  Speaker 2: out how to you know, make my clients more money
• 27:42
  Speaker 2: goes and robs a bank because remember, you don't have
• 27:45
  Speaker 2: to go into a bank to rob it now you
• 27:46
  Speaker 2: can do it digitally. Do I get charged with that crime?
• 27:50
  Speaker 2: Does my company does the eight?
• 27:52
  Speaker 4: Like?
• 27:52
  Speaker 2: How does any of that work?
• 27:54
  Speaker 4: Actually right?
• 27:55
  Speaker 5: Because in this example that you're giving, you did not
• 27:57
  Speaker 5: instruct your AI agent to go rob You just didn't.
• 28:01
  Speaker 2: You just told it.
• 28:01
  Speaker 5: You didn't tell it not to No, I mean to me,
• 28:06
  Speaker 5: there's only one answer. Shut it down when stuff like
• 28:10
  Speaker 5: that down? Yeah, when when stuff like that happens, you
• 28:14
  Speaker 5: shut it down and you don't allow access to it.
• 28:16
  Speaker 5: And in the case of open AI here, to me,
• 28:20
  Speaker 5: there would be very serious consequences here and you wouldn't
• 28:23
  Speaker 5: be able to test this stuff anymore. But I don't
• 28:26
  Speaker 5: know how practical that is. I don't know what the
• 28:28
  Speaker 5: appetite looks like for it, And I see no understanding
• 28:32
  Speaker 5: or willingness on the part of Congress to do anything here,
• 28:35
  Speaker 5: and so I suspect, like we've talked about that, you're
• 28:38
  Speaker 5: going to need to see an event far worse than
• 28:40
  Speaker 5: what we just saw before Congress does anything about it.
• 28:44
  Speaker 5: And by the way, I don't have answers to your questions.
• 28:46
  Speaker 5: Who is liable for it? How do you punish them?
• 28:49
  Speaker 5: What's the you know, what do you do? I don't
• 28:52
  Speaker 5: have any good answers to this. I hope somebody smarter
• 28:54
  Speaker 5: than me does.
• 28:56
  Speaker 2: Yeah, I got I got nothing. Like one thought that
• 28:58
  Speaker 2: crossed my head is like do you again, I don't
• 29:01
  Speaker 2: even know how you would enforce this? But like, is
• 29:04
  Speaker 2: there some kind of like AI license that you need?
• 29:06
  Speaker 2: I mean, like we make people get license to drive
• 29:08
  Speaker 2: a car? Like you know, this can cause way more
• 29:11
  Speaker 2: damage than a car. But you also, how do you
• 29:15
  Speaker 2: police like what ends up on someone's computer? Like I
• 29:18
  Speaker 2: don't know, I don't know, And obviously then you get
• 29:21
  Speaker 2: into all kinds of privacy, Like that's kind of out
• 29:24
  Speaker 2: of the bag. I don't know what the answer is.
• 29:26
  Speaker 2: But we're gonna get to the point where a lot
• 29:28
  Speaker 2: of people get really hurt by an accident, most likely
• 29:32
  Speaker 2: but possibly by a malicious actor first, and it's only
• 29:36
  Speaker 2: then that we're gonna say, oh, why wasn't anyone like
• 29:38
  Speaker 2: protecting us? And that's kind of where we're going. I
• 29:41
  Speaker 2: think let's take a quick break. When we come back,
• 29:44
  Speaker 2: we've got stack Roulette next.
• 29:46
  Speaker 1: The Financial Exchange streams live on YouTube. Subscribe to our
• 29:50
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• 29:53
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• 29:58
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• 30:01
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• 30:05
  Speaker 1: is the Financial Exchange Radio Network.
• 30:17
  Speaker 2: Ah, Michael, what do you got for me? For stack Roulettes?
• 30:19
  Speaker 3: A little local Massachusetts news.
• 30:22
  Speaker 5: An eighty five year old Hingham resident lost eighteen thousand
• 30:26
  Speaker 5: dollars to an online scam with someone posing as the
• 30:29
  Speaker 5: Federal Trade Commission. We've all heard all of these stories before.
• 30:33
  Speaker 5: He wired eighteen thousand dollars to a bank account in
• 30:37
  Speaker 5: some random guy's name to clear this supposed debt from
• 30:41
  Speaker 5: the FTC. All the standard disclosures here about government agencies
• 30:45
  Speaker 5: not reaching out to you via phone and.
• 30:47
  Speaker 3: Text apply here. And be hyper aware.
• 30:50
  Speaker 5: But I'm going to go back and make a point
• 30:52
  Speaker 5: on this. While the banks have improved dramatically, I do
• 30:56
  Speaker 5: not understand how an eighty five year old can walk
• 31:00
  Speaker 5: into a bank branch and wire eighteen thousand dollars to
• 31:03
  Speaker 5: a stranger without the bank putting up a wall against it.
• 31:07
  Speaker 5: That is embarrassing and shameful. And I don't know the
• 31:10
  Speaker 5: bank where this occurred, but you need to do better.
• 31:14
  Speaker 5: Financial institutions need to be empowered, which they have been
• 31:18
  Speaker 5: to prevent this from happening. And obviously we don't have
• 31:23
  Speaker 5: the details of what they attempted to do, and your
• 31:25
  Speaker 5: money's your money, but when you have an eighty five
• 31:28
  Speaker 5: year old attempting to wire money across the country, there
• 31:32
  Speaker 5: needs to be a better process to ask questions and
• 31:35
  Speaker 5: prevent that from happening.
• 31:36
  Speaker 2: Big thing I continue to say, there is no there's
• 31:43
  Speaker 2: no business, there's no financial institution out there that actually
• 31:46
  Speaker 2: needs your money right now.
• 31:50
  Speaker 3: Nor is there a government agency that needs it right now.
• 31:52
  Speaker 2: If even let's assume that there is a bank that
• 31:57
  Speaker 2: needs your money today for some reason, you're buying house,
• 32:00
  Speaker 2: need to wire it, you're buying a car, like there
• 32:02
  Speaker 2: are reasons why you might need money today. I get
• 32:06
  Speaker 2: that there's never a reason why you need the money
• 32:10
  Speaker 2: right now, and so anytime that you have anyone pressuring you,
• 32:16
  Speaker 2: I need you to send this money right now. Thank you.
• 32:20
  Speaker 2: I'm gonna I'm gonna hang up. I'll call you back
• 32:23
  Speaker 2: and think about it, talk to some people, figure it out.
• 32:27
  Speaker 5: This time it happened to an eighty five year old.
• 32:29
  Speaker 5: I'm telling you, I've seen it happen to sixty year olds.
• 32:31
  Speaker 2: I've seen it happen to thirty year olds. I've seen
• 32:33
  Speaker 2: it happen to everyone.
• 32:35
  Speaker 3: Yep.
• 32:36
  Speaker 2: Let's see. I've got two that I want to do, Michael, Okay,
• 32:39
  Speaker 2: and I'm gonna start just with the headline on the
• 32:42
  Speaker 2: first one. Don't kill corporate retreats. Make them more like
• 32:46
  Speaker 2: a kid's birthday party.
• 32:48
  Speaker 4: Yep.
• 32:50
  Speaker 5: Tucker's on board, absolutely, Yep.
• 32:54
  Speaker 2: Bring me to Dave and Busters all day. At a
• 32:56
  Speaker 2: time when many employees feel lonely at work, companies to
• 32:59
  Speaker 2: consider unconventional fixes.
• 33:02
  Speaker 4: Okay, So let's see what they're saying.
• 33:06
  Speaker 2: In an effort to lighten things up and reduce risk,
• 33:08
  Speaker 2: and let's be honest, boost productivity through camaraderie. More companies
• 33:11
  Speaker 2: are planning retreats that could have been designed by a
• 33:13
  Speaker 2: bunch of ten year olds. Okay, like tell me more,
• 33:17
  Speaker 2: tell me more, sure, sure, sure.
• 33:18
  Speaker 3: Ropes, courses, Dave and Busters, escape.
• 33:21
  Speaker 2: Room, Jenavi Sean or software company colleagues recently spent three
• 33:24
  Speaker 2: days on Cape cod three days, three days for company
• 33:30
  Speaker 2: three days? What what ten year old birthday party? Last
• 33:32
  Speaker 2: three days?
• 33:33
  Speaker 4: I'm out on that now.
• 33:34
  Speaker 2: Three hours is about the max. And even that's two
• 33:36
  Speaker 2: hours too long in afternoon, My goodness. Three days there
• 33:41
  Speaker 2: are tenerary included roasting marshmallows, competing in potato sack races,
• 33:45
  Speaker 2: and building human pyramids. No, none of that, no, god,
• 33:47
  Speaker 2: So first of all, that's not a ten That is
• 33:50
  Speaker 2: like standard corporate like fun blowney, you know, like human pyramids,
• 33:57
  Speaker 2: Like that's all the like team building exercise, let's do
• 34:00
  Speaker 2: trust falls like no, no, no, no, no, I'm sorry.
• 34:03
  Speaker 6: If I see a potato sack, I am going home sick.
• 34:08
  Speaker 2: I'm not going to do that, Like no, just just
• 34:11
  Speaker 2: not going to whatss not gonna happen? No, Like, is
• 34:18
  Speaker 2: there something to be said for hey, corporate retreats? Like
• 34:21
  Speaker 2: should you do something more than just like, hey, let's
• 34:25
  Speaker 2: try to think of what color our motto makes us
• 34:30
  Speaker 2: feel like sure, Like I yes, I do think that
• 34:33
  Speaker 2: you can do better than that. But number one, three
• 34:38
  Speaker 2: day corporate retreat, Is that really a thing?
• 34:41
  Speaker 5: So I'm trying to justify in my mind, and I
• 34:43
  Speaker 5: think it would be a reasonable thing to do if
• 34:46
  Speaker 5: you are a completely remote company. Okay, if you never
• 34:50
  Speaker 5: see these people, yeah, then yeah, get them all together
• 34:53
  Speaker 5: for three days.
• 34:54
  Speaker 4: I got it.
• 34:54
  Speaker 3: Like that, that's that's reasonable.
• 34:56
  Speaker 5: And by the way, I think this is partly backlash
• 34:59
  Speaker 5: against the like decade or two that it seemed like
• 35:03
  Speaker 5: the corporate retreats were going out into the desert and
• 35:05
  Speaker 5: doing peyote with your tech boss. Like, so I think
• 35:08
  Speaker 5: this is a good maybe step back.
• 35:11
  Speaker 2: You have to go to the desert to do peote.
• 35:13
  Speaker 5: I don't know, but I feel like that was every
• 35:15
  Speaker 5: tech ceo like it sounds like coyote, which we associate
• 35:21
  Speaker 5: with the desert, so that must be where you do it.
• 35:24
  Speaker 5: And then furthermore, like, I do think that this is
• 35:27
  Speaker 5: a good replacement to Hey, we're going to happy hour
• 35:30
  Speaker 5: on Friday and we're all going to have too much
• 35:33
  Speaker 5: to drink and then say things that are inappropriate.
• 35:35
  Speaker 3: For the workplace. So I'm on board with.
• 35:38
  Speaker 5: This strategy of the of the corporate retreat. But the
• 35:41
  Speaker 5: three days, Yeah, that that one is a bit much
• 35:44
  Speaker 5: to ask.
• 35:44
  Speaker 3: There's nothing get away from your family.
• 35:47
  Speaker 5: Do you mind hiring a nanny for the next three
• 35:50
  Speaker 5: days for this required corporate retreat?
• 35:52
  Speaker 3: Like, yeah, okay, you're pushing your luck a little bit.
• 35:55
  Speaker 2: Next one, college sports are a mess. Can Congress help? No, No,
• 36:01
  Speaker 2: You're gonna come up with something dumb that's not gonna work.
• 36:04
  Speaker 2: And then like you're gonna have all the people who
• 36:07
  Speaker 2: are like hangers on to all the college sports gravy train,
• 36:11
  Speaker 2: they're gonna just figure out the newest way around it
• 36:13
  Speaker 2: and it's not gonna work. Anyways. Here is how you
• 36:17
  Speaker 2: actually make it work if you are Let's be honest,
• 36:21
  Speaker 2: there are three and a half sports that make money
• 36:25
  Speaker 2: in college athletics now go on football, men's basketball, women's basketball,
• 36:34
  Speaker 2: and believe it or not, college baseball and softball are close. Now, yes,
• 36:38
  Speaker 2: they're Like the last couple of years, there's been a
• 36:39
  Speaker 2: lot of growth there. Other than that, nothing makes money
• 36:42
  Speaker 2: or is even close to it.
• 36:44
  Speaker 4: Rowing, swimming, hockey.
• 36:47
  Speaker 2: Not even close for like most and there's only like
• 36:49
  Speaker 2: a handful of schools that do it. You know, like
• 36:51
  Speaker 2: it's like pretty high, you know, like it's so here's
• 36:55
  Speaker 2: the deal. Here's what you need to do. You need
• 36:58
  Speaker 2: to pull college basketketball, both men's and women's and college
• 37:02
  Speaker 2: football out of colleges. Get them out completely. What you do,
• 37:08
  Speaker 2: you have separate companies set up. You know, let's say
• 37:10
  Speaker 2: that you're in Alabama or whatever. Hey, you've got you know,
• 37:13
  Speaker 2: Alabama Crimson Awesome LLC that you set up and you
• 37:19
  Speaker 2: as Alabama, the college license the use of your logo
• 37:23
  Speaker 2: and everything to Alabama Crimson LLC. And it's a separate
• 37:27
  Speaker 2: company that has no actual affiliation with the college.
• 37:31
  Speaker 3: You then get an education for being awesome at football.
• 37:34
  Speaker 2: R Now, nope, you get paid to play football between
• 37:37
  Speaker 2: the ages of eighteen and twenty one. And if you
• 37:39
  Speaker 2: want to go to Alabama you can with the money
• 37:41
  Speaker 2: that we're paying you. But here's the salary cap for
• 37:45
  Speaker 2: the league. Here's the structure for the league, and that's it.
• 37:48
  Speaker 3: Yeah, that would fix a lot.
• 37:50
  Speaker 2: Of the problems because all of the problems are related
• 37:52
  Speaker 2: to those three sports, men's and women's basketball and college football.
• 37:57
  Speaker 2: Every like. Just do that and you can figure the
• 38:00
  Speaker 2: whole rest out because it's stupid that fencers from Duke
• 38:04
  Speaker 2: have to travel to Stanford now to compete. I'm got
• 38:09
  Speaker 2: touche's take a quick break for the rest of the day.
• 38:13
  Speaker 2: We're gonna see you tomorrow. I don't know any other
• 38:17
  Speaker 2: fencing terms.