Latest / The Financial Exchange Show / Is the stock market overvalued?

Transcript

Is the stock market overvalued? · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:03
Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
0:05
Speaker 1: registered investment advisor. All opinions expressed are solely those of
0:09
Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
0:11
Speaker 1: or anyone else. Investments can lose money. This program does
0:14
Speaker 1: not offer any specific financial or investment advice. Please consult
0:17
Speaker 1: your own financial, tax, and estate planning advisors before making
0:20
Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
Speaker 1: this program do not endorse each other or their services.
0:26
Speaker 1: Armstrong and Money Matters Radio do not compensate each other
0:28
Speaker 1: for referrals and are not affiliated. This is the Financial
0:34
Speaker 1: Exchange with Mike Armstrong and Mark Vandetti. Your exclusive look
0:40
Speaker 1: at business and financial news affecting your day, your city,
0:43
Speaker 1: your world. Stay informed and up to date about economic
0:47
Speaker 1: and market trends, plus breaking business news every day. The
0:51
Speaker 1: Financial Exchange is a proud partner of the Disabled American
0:54
Speaker 1: Veterans Department of Massachusetts. Help us support our great American
0:58
Speaker 1: heroes by visiting das V five K dot Boston and
1:02
Speaker 1: making a donation Today. Face is the Financial Exchange with
1:06
Speaker 1: Mike Armstrong and Mark Vandetti.
1:10
Speaker 2: Good morning, Happy Tuesday, and welcome back to the Financial Exchange.
1:14
Speaker 2: We've got an interesting marketing market shaking out here in
1:18
Speaker 2: early training. The Nasdaq currently off by about a third
1:20
Speaker 2: of percent, whereas the Dow is up by what's that
1:23
Speaker 2: two thirds of percent? Of the S and P's flat.
1:26
Speaker 2: We've got some Nvidia news to cover today. We've got
1:30
Speaker 2: every FED official that can make it in front of
1:32
Speaker 2: a microphone speaking yesterday and today. So Powell will be
1:36
Speaker 2: talking today at twelve forty five, I believe it is.
1:38
Speaker 2: And Mark Vandetti's rolling his eyes. In terms of the Nasdaq,
1:43
Speaker 2: as I mentioned in videos, moving down, we've got some
1:46
Speaker 2: news to cover on them, and an investment in open Ai,
1:50
Speaker 2: owner of chat GPT. I was just looking at the
1:53
Speaker 2: Dow because you know, pretty easy to look at thirty
1:56
Speaker 2: stocks and figure out what might be moving. But Boeing
1:59
Speaker 2: had some news that broke three m moving up, Caterpillar, Chevron,
2:03
Speaker 2: bunch of stocks really moving up in that two percent
2:06
Speaker 2: range today, and not a whole lot of components in the.
2:09
Speaker 3: Negative, although you do have oh I forgot that is
2:14
Speaker 3: Nvidia a Dow component? Now?
2:15
Speaker 2: Yeah, I guess they are but not as much of
2:16
Speaker 2: a waiting as they would in the overall market, given
2:19
Speaker 2: that the Dow is a price weighted index rather than
2:22
Speaker 2: a market cap weighted index.
2:23
Speaker 4: So yeah, we'll be what do they do, like we
2:26
Speaker 4: were talking about this, should we my mind, I can't
2:29
Speaker 4: let go of this now. Very briefly, they add all
2:31
Speaker 4: the prices together and then it's just like if you
2:33
Speaker 4: have ten stocks, they're all trading at ten dollars a year,
2:36
Speaker 4: every stock gets weighted at ten percent, very straightforward, as
2:39
Speaker 4: opposed to market cap, which weaits based on the value
2:43
Speaker 4: of the shares in totally those sound like the same things,
2:46
Speaker 4: but they're they're different.
2:48
Speaker 3: They are very different.
2:49
Speaker 2: And uh yeah, it's why we tend to not really
2:52
Speaker 2: quote the Dow even though no, you know, it's it's
2:55
Speaker 2: just been such a long running index that everybody likes
2:58
Speaker 2: to look at.
2:58
Speaker 3: But it's important to.
2:59
Speaker 2: Wreckgnize that it really doesn't have a whole lot of
3:03
Speaker 2: actual representation of the US well because.
3:05
Speaker 4: It isn't investible the same way say the S and
3:08
Speaker 4: P is. Everybody in the world could buy a little
3:10
Speaker 4: slice of the S and P and our portfolios would
3:13
Speaker 4: all look the same. That's the beauty of a market
3:15
Speaker 4: cap weighted index. The same is not true of the
3:18
Speaker 4: DOO or other indices that depart from market cap weighted construction.
3:23
Speaker 4: It's a subtle point, but it's really the reason modern
3:25
Speaker 4: finance looks the way that it does, with the S
3:28
Speaker 4: and P or a Russell one thousand being the anchor
3:30
Speaker 4: of portfolios.
3:31
Speaker 2: It also makes it so that some companies that are
3:34
Speaker 2: too high in terms of share price either need to
3:37
Speaker 2: do a stock split to be considered to be included,
3:39
Speaker 2: or just can't be included because, oh, you know, Berkshire
3:42
Speaker 2: Halthaway's share prices are too expensive, so they can never
3:44
Speaker 2: be in there, for example. So anyway, it's just an
3:48
Speaker 2: interesting day. We don't frequently see NASDAC slightly up, Dow
3:52
Speaker 2: slightly NASAC slightly down, Dow slightly up, But that's what
3:55
Speaker 2: we are getting today anyway, speaking of of just where
4:01
Speaker 2: markets are and different components.
4:04
Speaker 3: The is this market watch that's asking if the market
4:07
Speaker 3: is overvalued?
4:08
Speaker 2: Barons Barons asks the question is the stock market overvalued?
4:13
Speaker 2: And then they seemingly answer the question with We're about
4:16
Speaker 2: to find out, And they then do not allude at
4:20
Speaker 2: all in the article as to why we would be
4:22
Speaker 2: about to find out, and I would debate the idea
4:24
Speaker 2: as to whether or not we're about to find out,
4:25
Speaker 2: But give me some fundamentals mark here, because everyone and
4:30
Speaker 2: their mother is comparison comparing this market to the dot
4:33
Speaker 2: com bubble right now, at least in terms of pricing,
4:36
Speaker 2: and I think that's a reasonable comparison point to make.
4:39
Speaker 3: So let's do it.
4:40
Speaker 2: Where do we stand in terms of priciness of this
4:43
Speaker 2: stock market in terms of you know, other markets that
4:47
Speaker 2: we've seen, or just against itself across the.
4:49
Speaker 4: When you're buying or selling a house, you can look
4:51
Speaker 4: at price per square foot. Everybody quotes it. It's an
4:54
Speaker 4: easy to calculate and relate to measure the The equivalent
5:01
Speaker 4: with stocks is probably the trailing twelve month price to
5:04
Speaker 4: earnings ratio, which is exactly what it sounds like. You
5:08
Speaker 4: take the current price and you divide it by the
5:10
Speaker 4: last twelve months earnings profits that is of the company
5:13
Speaker 4: in question.
5:14
Speaker 2: Easier to do on a single company, more complicated form
5:19
Speaker 2: to do on five hundred of them, but very easy.
5:21
Speaker 4: To do with modern with with computers.
5:24
Speaker 3: Since we're not using applicantses anymore, it's pretty easy.
5:26
Speaker 4: Yeah, Since the nineteen eighties, everybody's had this technology on
5:29
Speaker 4: their desktop, very easy to calculate, even easier to buy
5:33
Speaker 4: or get for free from many online services. So price
5:36
Speaker 4: to earnings is usually what people refer to when they
5:40
Speaker 4: are looking for a gauge of how expensive are stocks
5:42
Speaker 4: relative to each other, relative to themselves over time.
5:46
Speaker 3: Relative to other country stocks, relative to directors.
5:49
Speaker 4: And there are problems with those comparisons that make them inapt.
5:53
Speaker 4: They're not quite apples to apples because P to E
5:56
Speaker 4: should represent risks involved at the country level, political risk,
6:00
Speaker 4: institutional risk. Anyway, we can get into that at a
6:03
Speaker 4: different time. That's not really the point of this article.
6:06
Speaker 4: Point is, by any measure, let's just use price to earnings.
6:09
Speaker 4: Sure stocks are at near record price to earnings ratios
6:14
Speaker 4: one way to translate that, and by many measures of
6:17
Speaker 4: price to earnings. You could put a lot of different
6:20
Speaker 4: earnings calculations in that denominator that we were talking about, right, Mike,
6:23
Speaker 4: and you can get basically the same conclusion, get to
6:27
Speaker 4: the same conclusion, which is stocks are epically expensive. High
6:31
Speaker 4: PE equates to being expensive investors are willing to pay
6:35
Speaker 4: more today. That's the P and the P TOE for
6:39
Speaker 4: prospective earnings, because the P is known, the E is
6:43
Speaker 4: only known in the past. You're only paying for what
6:45
Speaker 4: a company can do, not for what it did. It's
6:48
Speaker 4: where that old expression great company, lousy stock price, Well,
6:52
Speaker 4: that's not quite the expression. I kind of made that up,
6:54
Speaker 4: but a lot of people have made that sentiment, and
6:58
Speaker 4: for good reason. So stocks are by any measure, historically
7:03
Speaker 4: eye poppingly epically expensive.
7:06
Speaker 2: What does that mean, depending on how you measure, we're
7:09
Speaker 2: in the ninety eighth percentime.
7:10
Speaker 3: Yeah, we do that.
7:11
Speaker 4: I run that every couple of weeks for the group
7:12
Speaker 4: internally ninety fifth on the so called chiller pe which
7:15
Speaker 4: takes the last ten years worth of runnings of justin
7:17
Speaker 4: for inflation and takes an average to smooth out business
7:20
Speaker 4: cycle effects.
7:21
Speaker 2: But yeah, yeah, So next question is obviously, when were
7:24
Speaker 2: they more pricey? And the answer is right before the
7:28
Speaker 2: dot com we were very excited about another emerging technology
7:31
Speaker 2: and how it was going to change the world in business,
7:34
Speaker 2: and everyone.
7:34
Speaker 4: Was changing the world to me. I know, I said
7:36
Speaker 4: this last time I was on But what made it
7:37
Speaker 4: different was to me, having lived through it, that was
7:41
Speaker 4: changing the world. Every eighteen months we all got a
7:43
Speaker 4: new laptop we all got. Our software was updating every
7:45
Speaker 4: six months. We went from working in the office all
7:48
Speaker 4: the time to being able to work remotely, from never
7:51
Speaker 4: seeing your clients to being able to video call them.
7:54
Speaker 4: It was really dramatic in the late night.
7:56
Speaker 2: And granted, Mark, you knows as you know, and I
7:58
Speaker 2: try and bring up frequently I am significantly younger than you.
8:01
Speaker 3: But to me, I think the I think that the.
8:07
Speaker 4: Hey, SCREWBOPI I.
8:08
Speaker 3: Actually have no idea how fifty three year I say
8:11
Speaker 3: it all the time.
8:11
Speaker 4: I was born in nineteen seventy two.
8:13
Speaker 2: But I think that those differentiations are a little bit
8:18
Speaker 2: tougher to tease out right, Like, is can you point
8:21
Speaker 2: to the internet as being way more, way more impactful
8:25
Speaker 2: than artificial intelligence is right now? I have a tougher
8:28
Speaker 2: time teasing that out. Then, I think you'd Oh.
8:31
Speaker 4: But we know what the productivity. We know what productivity
8:34
Speaker 4: was doing in nineteen ninety nine. We didn't know it
8:36
Speaker 4: in nineteen ninety nine, but we know now that it
8:38
Speaker 4: had doubled.
8:39
Speaker 3: That's kind of my point is we may not.
8:41
Speaker 2: Yeah, I could see a compelling argument where five years
8:45
Speaker 2: from now you look back on productivity and say, oh, Wow,
8:47
Speaker 2: it did dramatically increase as a result of artificial intelligence,
8:50
Speaker 2: and we won't know for a long time.
8:51
Speaker 4: But there were but it was tangible. Then I'm just
8:54
Speaker 4: I mean, I'm not dead yet. I still have my senses.
8:56
Speaker 4: I know how my life's changing or why are you snicker?
9:01
Speaker 4: I know I can see what people are you know,
9:03
Speaker 4: doing with technology, etc. And how it's changing their workflow.
9:07
Speaker 4: And I mean, have you seen it? You know, one
9:10
Speaker 4: of you guys.
9:11
Speaker 3: On the artificial yeah intelligence side.
9:13
Speaker 4: Do you use anything day to day dramatically more efficiently
9:16
Speaker 4: you think than you did. So some of the changes
9:19
Speaker 4: are subtle and gradual, so it's hard to say like
9:21
Speaker 4: searchers are quicker and stuff like that, But.
9:23
Speaker 2: I will say that on the search side of things, yes,
9:27
Speaker 2: I do think that my ability to gain answers to
9:31
Speaker 2: questions that are relatively accurate on a pretty quick basis
9:35
Speaker 2: compared to clicking through links has changed fairly dramatically just
9:38
Speaker 2: over the last twelve months.
9:40
Speaker 3: And I don't know.
9:42
Speaker 2: The more and more I see on the AI side,
9:44
Speaker 2: the more I see how it maybe more in my
9:48
Speaker 2: but and I think that would be the argument if
9:51
Speaker 2: I'm going to take the other side of this argument
9:53
Speaker 2: and justify a price earnings ratio that has only once
9:56
Speaker 2: been eclipped during the dot com bubble. It would be
9:59
Speaker 2: more mark, Mike, You're just on the very cusp of
10:03
Speaker 2: what artificial intelligence can do, and so therefore it is
10:06
Speaker 2: still being undervalued and it is going to I can't.
10:10
Speaker 4: Refute that it's a prospective argument. It starts to sound
10:13
Speaker 4: a lot like bitcoin to me. Though any day now
10:15
Speaker 4: bitcoin is going to have a compelling so called use case.
10:18
Speaker 4: We're still waiting.
10:19
Speaker 2: The flip side to all of this that we can
10:23
Speaker 2: tease that for longer. But I don't really think that
10:25
Speaker 2: anybody debates that the Internet was revolutionary in just about
10:29
Speaker 2: every single way. Revolutionized it was business and revolutionized how
10:33
Speaker 2: we went on vacation at revolutionized raid stocks.
10:36
Speaker 4: Everything went from telephones to online in two years or so.
10:41
Speaker 2: Even as revolutionary as that technology was, the stock market
10:46
Speaker 2: had to go through but didn't have to, but did
10:48
Speaker 2: go through a bubble and then a pop in order
10:50
Speaker 2: to get to where we are with modern technology that
10:52
Speaker 2: relies upon the Internet. And so I just don't The
10:56
Speaker 2: most common argument that I get is, Mike, you're missing
10:59
Speaker 2: the boat. You're missing the point on how significant artificial
11:02
Speaker 2: intelligence is it's going to revolutionize everything. And my counterpoint
11:05
Speaker 2: would be great, that doesn't mean the stock market isn't overvalued.
11:08
Speaker 4: More than electricity did. I mean it took decades. And
11:12
Speaker 4: if you're interested in this, the guy's name is Robert Gordon.
11:14
Speaker 4: He wrote a great book in which he summarized a
11:16
Speaker 4: bunch of his papers. The Rise and Fall of American
11:18
Speaker 4: Growth is the name of the book. If you're interested
11:20
Speaker 4: in how the industrial revolution, the steam revolution to electricity
11:26
Speaker 4: trickled into everyday life through air conditioning and all the
11:29
Speaker 4: other conveniences that we enjoy, how long it took, and
11:32
Speaker 4: how it didn't dramatically change the long term trend in
11:37
Speaker 4: GDP growth because it did take so long to permeate
11:40
Speaker 4: the economy. There are some useful lessons there. This could
11:43
Speaker 4: take decades to play out stock Some stock investors seem
11:46
Speaker 4: to think it's going to play out in the next
11:48
Speaker 4: three to five years. That would be unusual historically speaking.
11:51
Speaker 2: Let's take a quick break when we come back. As
11:53
Speaker 2: I mentioned, every Fed governor that can find a microphone
11:56
Speaker 2: has been chatting up their views on the economy will
11:59
Speaker 2: be and a few of them next year on the
12:01
Speaker 2: Financial Exchange.
12:03
Speaker 1: The Financial Exchange streams live on YouTube. Like our page
12:07
Speaker 1: and stay up to date on breaking business news. All
12:09
Speaker 1: morning Loan. This is the Financial Exchange Radio Network. Miss
12:14
Speaker 1: any of the show. The Financial Exchange Show podcast is
12:17
Speaker 1: available on Apple, Spotify, and iHeartRadio. Hit the subscribe button
12:22
Speaker 1: and leave us a five star review. This is the
12:25
Speaker 1: Financial Exchange Radio Network.
12:31
Speaker 5: Well, this year's DAV five k is officially sold out,
12:35
Speaker 5: but you can still help our great American heroes. The
12:38
Speaker 5: race is Saturday, November eighth at Castle Island, and you
12:42
Speaker 5: can visit DAB fivek dot Boston to make a donation
12:45
Speaker 5: of any amount to support our troops. Your gifts help
12:48
Speaker 5: fund free rides to medical appointments for veterans and the
12:52
Speaker 5: nation's first dav ledhousing initiative providing homes for single veterans
12:57
Speaker 5: and veteran families. Go to DAV fivek dot Boston and
13:01
Speaker 5: make your donation today.
13:03
Speaker 2: All right, Mark, Well, last week the Fed cut rates
13:06
Speaker 2: by a quarter of one percent. We are now sitting
13:09
Speaker 2: at a target rate on FED funds of between four
13:12
Speaker 2: and four and a quarter percent. I remain surprised by
13:15
Speaker 2: how certain investors seem to be that rates are going
13:18
Speaker 2: to continue to come down at this stage given announcements
13:21
Speaker 2: that we've heard, but we will see what FED governors
13:24
Speaker 2: say over the course of the next few weeks.
13:26
Speaker 3: Here.
13:26
Speaker 2: The next meeting is not until October twenty ninth, at
13:30
Speaker 2: which point the Schicygomercantyle Exchange is pricing in a ninety
13:35
Speaker 2: two percent likelihood of another twenty five basis point rate
13:38
Speaker 2: cut at that meeting. Following that, we'll have one more
13:41
Speaker 2: before year end on December tenth, and there's currently nearly
13:45
Speaker 2: a little bit more than a three quarters chance that
13:48
Speaker 2: rates our fifty basis points lower at that meeting. We
13:54
Speaker 2: can talk about the unlikelihood of that, because I think
13:58
Speaker 2: there's been a lot of governors who since the meeting
14:00
Speaker 2: have been coming out and saying we might not need
14:02
Speaker 2: any more rate cuts, and so I think there's a
14:04
Speaker 2: real potential for a supprise on the rate cutting cycle.
14:07
Speaker 2: But before we go there, Stephen Myron, the new FED appointee,
14:11
Speaker 2: was giving a speech yesterday and talking about his views
14:15
Speaker 2: on the economy, and look, Stephen Myron is the newest appointee.
14:20
Speaker 2: He is a member of the White House. He set
14:23
Speaker 2: on the he sits on the Economic Council, of Advisors
14:27
Speaker 2: for the White House and took a leave of absence
14:30
Speaker 2: for this role because his appointment as Fed Governor will
14:33
Speaker 2: expire at the.
14:34
Speaker 3: End of January. I believe it is if.
14:36
Speaker 2: He's reappointed, I would expect that he would resign, but
14:39
Speaker 2: who knows. But he has been He voted for a
14:41
Speaker 2: fifty basis point rate cut at the most recent meeting,
14:44
Speaker 2: and he's been fairly outspoken in agreeing with the President
14:47
Speaker 2: that rates need to be significantly lower. My problem with
14:52
Speaker 2: his viewpoints on all this. You know, he lays out
14:54
Speaker 2: a bunch of arguments. One of his arguments is, look,
14:56
Speaker 2: the policy from the Trump White House is one that
15:00
Speaker 2: is going to be less.
15:02
Speaker 3: Inflationary in the future.
15:04
Speaker 2: We are going to see, for instance, you know, the
15:07
Speaker 2: tariff revenue coming in is not going to raise prices
15:10
Speaker 2: on consumers significantly. And I think, regardless of your view
15:14
Speaker 2: on tariffs, you could make a compelling argument that the
15:16
Speaker 2: very leads the tariffs would be a one time price adjustment.
15:19
Speaker 3: Many have done so.
15:20
Speaker 2: I don't find the argument to be terribly compelling, but
15:22
Speaker 2: that is the argument. Another argument that deportations are going
15:26
Speaker 2: to reduce housing demand. If it does happen, we certainly
15:29
Speaker 2: haven't seen it yet, but okay, Like another argument for that.
15:34
Speaker 2: The problem that I take with his arguments is that
15:38
Speaker 2: he has very recently argued the opposite side on financial
15:45
Speaker 2: conditions and rates. So in twenty twenty four, less than
15:51
Speaker 2: eighteen months ago, here were his arguments for raising interest
15:55
Speaker 2: rates and being very suspicious of inflation. First, that globalization
16:02
Speaker 2: was going to reverse and there's going to be a
16:04
Speaker 2: new era of conflict emerging in its place. Is there
16:08
Speaker 2: anyone that would look around today and say that globalization
16:10
Speaker 2: seems to be increasing now compared to eighteen months ago,
16:15
Speaker 2: right or wrong? I don't think you know, we're talking
16:18
Speaker 2: about increased barriers to trade.
16:19
Speaker 3: We're talking about ten turns.
16:20
Speaker 4: Of dollar volume. It's going up, but yeah, barriers are
16:23
Speaker 4: being erected.
16:23
Speaker 3: Yeah.
16:25
Speaker 2: The other argument was, hey, eighteen months ago, Stephen Byron's
16:29
Speaker 2: argument was there's about to be a boom in capital
16:32
Speaker 2: intensive hardware spending to power the AI revolution. So he's right, like,
16:38
Speaker 2: we've seen a massive increase in spending, we've seen data
16:41
Speaker 2: center construction, investments in artificial intelligence. But again, eighteen months
16:45
Speaker 2: ago he argued that was going to be inflationary, and
16:47
Speaker 2: now is seemingly saying it's not important. Many US households
16:52
Speaker 2: enjoy fixed rate mortgages locked in around four percent, and
16:56
Speaker 2: therefore are going to be unwilling to sell their homes
16:59
Speaker 2: and will continue to have dollars to spend because of
17:01
Speaker 2: those fixed rate mortgages. That has also not changed. And
17:05
Speaker 2: so I guess where I lead to with Steven Myron
17:09
Speaker 2: is like I'll be the first to say, I really
17:12
Speaker 2: genuinely do not know if today the bigger risk is
17:15
Speaker 2: inflation or unemployment. I think both are looking at us
17:18
Speaker 2: right now as a potential threat. Hiring has been extremely
17:21
Speaker 2: weak over the last six months, Inflation has remained at
17:24
Speaker 2: three percent. My only point is, you know, after reading
17:28
Speaker 2: through Stephen Myron's arguments and listening to his speech yesterday,
17:32
Speaker 2: I really don't find any of his arguments for lowering
17:34
Speaker 2: rates to be compelling and much else other than finding
17:38
Speaker 2: excuses to do so.
17:39
Speaker 4: Yeah, I don't believe that he believes them the models
17:42
Speaker 4: he's using, and I haven't seen precisely what assumptions he's
17:46
Speaker 4: plugging in, but I know them generally. It's very difficult
17:49
Speaker 4: to get to the conclusions that he's reached using traditional
17:52
Speaker 4: economic or even somewhat aggressive assumptions in in traditional economic models.
17:58
Speaker 4: I think he's carrying water for the administration. That's why
18:01
Speaker 4: he was put there for I'm sorry, but he is.
18:02
Speaker 4: It's why he was put there. And I'm not, by
18:04
Speaker 4: the way, judging that. I you Trump, the President has
18:08
Speaker 4: said he wants lower interest rates. You may think that's great,
18:11
Speaker 4: you may think that will lead to higher inflation, but
18:12
Speaker 4: it just is. Let's just take that as a fact.
18:16
Speaker 4: Myron is now saying that he sees demand slowing. All
18:19
Speaker 4: those factors you ticked off early on would result in
18:23
Speaker 4: slower overall demand. That's something the Fed can do if
18:27
Speaker 4: you really believe that, and I don't believe that he does,
18:29
Speaker 4: nor do I think the White House does. Nobody's forecasting
18:31
Speaker 4: a recession in the White House, and they would reject
18:34
Speaker 4: that implication of these arguments, but it's behind them. The
18:39
Speaker 4: Fed can do something about slowing demand. It can print
18:41
Speaker 4: money to lower interest rates, which result in increased investment
18:45
Speaker 4: and consumption. That's what's making its way through the economy
18:48
Speaker 4: right now as a result of the recent series of
18:51
Speaker 4: rate cuts, and apparently there will be more of them.
18:53
Speaker 4: The danger, Mic, as you pointed out, is that if
18:55
Speaker 4: demand grows faster than the economy's productive capacity. More simply,
19:00
Speaker 4: if demand grows faster then supply, you get inflation. We
19:04
Speaker 4: experience that in twenty twenty one, twenty twenty two, when
19:07
Speaker 4: demand quickly outpaced supply.
19:09
Speaker 3: YEP.
19:10
Speaker 2: So look, as I pointed out, I think there's a
19:13
Speaker 2: compelling argument on either side that hey, we're headed for
19:17
Speaker 2: a period of higher unemployment or we're heading for a
19:19
Speaker 2: period of higher inflation. But the arguments that are being
19:23
Speaker 2: laid out by Meyern in particular, I just don't find compelling.
19:26
Speaker 3: Let's take a quick break.
19:27
Speaker 2: When we come back, Wall Street watches up next.
19:41
Speaker 1: Like us on Facebook and follow us on Twitter at
19:44
Speaker 1: TFE show breaking business news is always first right here
19:48
Speaker 1: on the Financial Exchange Radio Network. Time now for Wall Street.
19:54
Speaker 1: Watch a complete look at what's moving markets so far
19:57
Speaker 1: today right here on the Financial Exchange Radio Network.
20:01
Speaker 5: Well markets our mixed territory at the moment, after all
20:04
Speaker 5: three major averages recorded all time highs yesterday. Coming up
20:08
Speaker 5: early this afternoon, Wall Street will monitor Jerome poll speaking
20:12
Speaker 5: engagement in Rhode Island. Actually, right now, the Dow is
20:16
Speaker 5: up by four tenths of one percent, or one ninety
20:20
Speaker 5: eight points higher, SMP five hundred is dipping by only
20:24
Speaker 5: three points, Nasdaq is up, is down excuse made three
20:27
Speaker 5: tenths of one percent or sixty six points lower. Russell
20:30
Speaker 5: two thousand is actually up nine tenths of one percent.
20:33
Speaker 5: Tenure Treasure brailed is flat and currently at four point
20:36
Speaker 5: one four to three percent, and crude oil up nearly
20:40
Speaker 5: two percent higher Training at sixty three dollars in forty
20:43
Speaker 5: five cents a barrel. Some more big news from Nvidia
20:46
Speaker 5: emerged yesterday afternoon with the announcement that the AI in
20:50
Speaker 5: chip giant said it would invest one hundred billion dollars
20:53
Speaker 5: into open Ai, where open Ai will build in deploy
20:57
Speaker 5: systems using in videos graphics processing units. In Video stock
21:01
Speaker 5: jumped four percent yesterday on that news, but is giving
21:05
Speaker 5: back one and a half percent today. Meanwhile, Boeing shares
21:08
Speaker 5: a climbing three percent after Isbekistan Airways Airways excuse me,
21:15
Speaker 5: said it would buy fourteen seven eighty seven to nine
21:17
Speaker 5: Dreamliner jets, with options for eight more and a deal
21:21
Speaker 5: worth over eight billion dollars. Separately, Bloomberg Als reported that
21:25
Speaker 5: the US and China are in the final stages of
21:27
Speaker 5: negotiations for a huge Boeing aircraft order, according to US
21:33
Speaker 5: Ambassador to China David Purdue. Elsewhere, after its seven percent
21:39
Speaker 5: decline yesterday, Kenbyew shares a rebounding over four percent today.
21:43
Speaker 5: The Tailanal parent company is preparing for lawsuits after the
21:47
Speaker 5: Trump administration said prenatal exposure to Tailanol's active ingredient might
21:51
Speaker 5: cause autism. Auto owne down by about a third of
21:55
Speaker 5: a percent after the auto parts retailers saw its gross
21:58
Speaker 5: profits and earnings share fall below street expectations for its
22:03
Speaker 5: recent quarter despite an increase in same store sales, and
22:06
Speaker 5: after today's closing bell, we'll see earnings from Micron Technology.
22:11
Speaker 5: That stock is currently up over two percent. I'm Tucker Silvan.
22:15
Speaker 1: That is Wall Street.
22:16
Speaker 3: Watch, Tucky. You've ever flown on Huzbekistan Uzbekistan aras No?
22:20
Speaker 1: I can't say that.
22:21
Speaker 3: I have no.
22:22
Speaker 5: Yeah, I can say Jet Blue is my primary.
22:25
Speaker 3: Could you find it on a map?
22:27
Speaker 1: Probably not bike.
22:28
Speaker 3: I couldn't either, I just I just did. So they
22:32
Speaker 3: are unfortunately.
22:32
Speaker 2: Also, I was curious they are not part of any
22:35
Speaker 2: Alliance frequent flyer programs, So if you do fly on
22:38
Speaker 2: ZoZ Pakistan, you're not going to earn your American Airlines points.
22:43
Speaker 4: Darns shucks. They give you discount if if you're willing
22:47
Speaker 4: to sit next to a chicken.
22:47
Speaker 2: Though, I think, uh, China flooding the world.
22:55
Speaker 3: You're cheap exports after the tariff.
22:57
Speaker 2: So do we actually have any reliable numbers mark in
23:01
Speaker 2: terms of year of a year US imports from China
23:05
Speaker 2: dollar value or.
23:07
Speaker 4: I guess, has the trade deficit gone down?
23:09
Speaker 3: Yeah? I mean I don't really.
23:11
Speaker 2: I'm not so sure about the deathicsit, but just in
23:13
Speaker 2: terms of dollar value of imports, I don't know if
23:15
Speaker 2: we have any reliable data yet on twenty twenty five,
23:18
Speaker 2: since the announcement of terrorists.
23:19
Speaker 3: I'd imagine the answer is down.
23:22
Speaker 2: We're buying less stuff from China in twenty twenty five
23:25
Speaker 2: compared to twenty twenty four. But I get surprised by
23:29
Speaker 2: what seems like common sense frequently.
23:31
Speaker 4: Yeah, so they did contract pretty dramatic. The answer to
23:34
Speaker 4: your question is yes. The series is called Imports of
23:36
Speaker 4: Goods by Customs Basis from China. I'm just pulling this
23:39
Speaker 4: from our usual database. It fred in January the number
23:43
Speaker 4: was forty two billion dollars. That level that that bottom
23:49
Speaker 4: did about twenty so down by more than fifty percent
23:52
Speaker 4: as of June. But it's since tick back up, though
23:56
Speaker 4: not all the way, not even close to about twenty seven.
23:58
Speaker 4: So yeah, it did go down dramatically.
24:00
Speaker 2: So the United States obviously buying a fair bit less
24:03
Speaker 2: stuff from China, and in response, seemingly I don't know
24:08
Speaker 2: how intentional is on the part of China versus just
24:11
Speaker 2: naturally this is what happens. But China seems to be
24:14
Speaker 2: flooding the rest of the world with relatively cheap exports
24:17
Speaker 2: as a result of the United States not buying this stuff.
24:21
Speaker 2: Not surprising on that front. But at the same time,
24:26
Speaker 2: you have now a bunch of countries who are trying
24:28
Speaker 2: to figure out, Okay, what do we do about this?
24:30
Speaker 2: If suddenly China is going to begin dumping everything from
24:33
Speaker 2: steel cars and car parts to solar panels into our market,
24:40
Speaker 2: what do we do? Because you know, if you're Volks,
24:43
Speaker 2: if you're Germany, for example, I would imagine you have
24:46
Speaker 2: a pretty vested interest in making sure that you can
24:48
Speaker 2: still manufacture cars in your country, and a big threat
24:53
Speaker 2: of a bunch of Chinese made vehicles and solar panels
24:56
Speaker 2: and everything else is going to potentially threaten that industry.
24:59
Speaker 2: But I think at the same time, a lot of
25:01
Speaker 2: these countries are saying, can we really afford to negotiate
25:05
Speaker 2: with the United States on tariffs at the same time
25:07
Speaker 2: that we would need to fight with China on tariffs?
25:11
Speaker 2: And so so far you have seen very little action
25:14
Speaker 2: on this. Mexico was floating tariffs as high as fifty
25:17
Speaker 2: percent on Chinese made products, including cars, auto parts, and steel.
25:20
Speaker 3: Indian authorities have.
25:23
Speaker 2: Been receiving applications in recent weeks from companies doing business
25:26
Speaker 2: in India investigating into good.
25:29
Speaker 3: Goods stumping from China.
25:32
Speaker 2: I just when I look at this, I know this
25:35
Speaker 2: is largely bad news for some of these countries. I
25:37
Speaker 2: look at this and say, what an amazing opportunity the
25:40
Speaker 2: United States has to build something here?
25:42
Speaker 3: Right Like if most would agree, would you agree? Mark that?
25:46
Speaker 1: Like?
25:46
Speaker 2: The real problem child that we're trying to address with
25:49
Speaker 2: a lot of this stuff, at least historically, has been China.
25:52
Speaker 2: I don't know, I personally have a.
25:53
Speaker 4: Currency manipulator, yeah, which I think. Look, I think most
25:56
Speaker 4: Americans are willing to let China compete as long as
25:59
Speaker 4: the playing field is level, but when they're keeping their
26:02
Speaker 4: currency artificially low, that is, allowing their imports to be
26:06
Speaker 4: cheaper than they would be if the market was allowed
26:09
Speaker 4: to set currency rates. And we're going to get to
26:10
Speaker 4: this when we talk about Argentina two and the problems
26:12
Speaker 4: it's causing there. Then Yeah, Mike, I think getting them
26:16
Speaker 4: to stop manipulating their currency to give them an unfair
26:19
Speaker 4: to give them even more of an advantage.
26:20
Speaker 3: Yeah.
26:21
Speaker 2: My main two things real economic issues, currency manipulation and
26:26
Speaker 2: intellectual property theft. Oh that those two things, you know,
26:31
Speaker 2: amazing disrespect for those two kind of capitalism.
26:36
Speaker 4: A huge cultural difference there. I'm sorry, but there is.
26:38
Speaker 2: And so the way I look at this is, look,
26:41
Speaker 2: what an amazing opportunity if many how many countries I
26:44
Speaker 2: guess would say, yeah, we are willing to slap tariffs
26:49
Speaker 2: on Chinese made products, so long as it means free
26:52
Speaker 2: trade with the United States.
26:55
Speaker 4: I know we're not on the table and have to
26:57
Speaker 4: be se point three way we'd have to get involved.
27:00
Speaker 4: We'd have to offer and China is doing it right
27:02
Speaker 4: now with Europe and elsewhere.
27:04
Speaker 2: And that's my part, that's precisely my point is, yes,
27:07
Speaker 2: the United States would need to.
27:08
Speaker 3: Offer this sort of yeah, yeah, yeah, proactive trading partners.
27:12
Speaker 3: But I don't know.
27:13
Speaker 2: I would gladly, uh, you know, agree to a you know,
27:18
Speaker 2: free trade agreement with India and most of Europe and
27:22
Speaker 2: Canada and Mexico if it meant that they were all
27:24
Speaker 2: going to proactively look at China in the same way
27:29
Speaker 2: that we seem to be today. And and they're just
27:31
Speaker 2: they can't.
27:31
Speaker 4: Like there are terms of trade are so different, their
27:33
Speaker 4: comparative advantage relative to China relative to US is different.
27:37
Speaker 4: Wouldn't make sense to cut off what they buy from China.
27:39
Speaker 4: The reason they're buying it from China in the first
27:40
Speaker 4: place is that China can make it in a relative sense,
27:43
Speaker 4: not an absolute sense, more cheaply than they can. So
27:45
Speaker 4: they focus on what they're relatively better at. And similarly,
27:48
Speaker 4: they trade with the US for the same reason. It's
27:51
Speaker 4: not like you could swap out one trading partner.
27:53
Speaker 2: Agree for If you just simply cut off trade from China,
27:57
Speaker 2: then there will be a global recession on the scale
27:59
Speaker 2: of which we haven't seen.
28:00
Speaker 4: One of the reasons we're doing what we're doing with
28:01
Speaker 4: Argentina right now, we're offering a bail that I know
28:03
Speaker 4: we're going to get to the story later. But this
28:04
Speaker 4: is related, is because China is offering them support for
28:07
Speaker 4: their currency. We'll talk about the fundamentals that are driving
28:11
Speaker 4: people away from the Argentine pay so later, but we
28:14
Speaker 4: are trying to preempt, if you will, uh, China offering
28:18
Speaker 4: a helping hand there and further entrenching themselves in that region.
28:22
Speaker 3: Marcus chomping at the bit here.
28:24
Speaker 4: I know, no, no, no, but it's related.
28:26
Speaker 3: It is related. So let's take a quick break. When
28:28
Speaker 3: we come back.
28:29
Speaker 2: Want to talk about the pretty regular catastrophes that strike Argentina,
28:33
Speaker 2: but what seems to be happening right now and where
28:35
Speaker 2: the US may get involved in Argentina's fiscal situation.
28:39
Speaker 3: Next on the Financial Exchange.
28:41
Speaker 1: The Financial Exchange streams live on YouTube. Subscribe to our
28:45
Speaker 1: page and stay up to date on breaking business news.
28:48
Speaker 1: All morning, Long Face is the Financial Exchange Radio Network
28:53
Speaker 1: tekst US six one seven, three six two thirteen eighty five.
28:56
Speaker 1: With your comments and questions about today's show, and let
28:59
Speaker 1: us know what do you think about the stories we
29:01
Speaker 1: are covering. This is the Financial Exchange Radio Network.
29:10
Speaker 2: All right, well, I am going to break my promise here.
29:13
Speaker 2: We said we're gonna talk about Argentina, but we don't
29:15
Speaker 2: think we can do a justice in the time we have,
29:17
Speaker 2: So tune into our next segment in just a few minutes,
29:20
Speaker 2: where we talk a little bit about the Argentina crisis
29:23
Speaker 2: that is ongoing and where the US involvement might be.
29:26
Speaker 2: But before we get there, I do want to talk
29:28
Speaker 2: about in Nvidia. So stock is down a little bit today.
29:31
Speaker 2: Tucker mentioned during Wall Street Watch they announced that they're
29:34
Speaker 2: going to be investing one hundred up to one hundred
29:36
Speaker 2: billion dollars not necessarily one hundred billion, but up to
29:38
Speaker 2: one hundred billion dollars in open AI to support their
29:43
Speaker 2: data center and power capacity. Now, why would a company
29:46
Speaker 2: like in video want to do something like this. The
29:48
Speaker 2: answer seemingly is because in order to build that data
29:51
Speaker 2: center and power capacity and all the stuff, they are
29:54
Speaker 2: going to fill it to the brim with Nvidia chips.
29:58
Speaker 2: And this is the stuff to me that like, you know,
30:02
Speaker 2: on the surface, you look at it like, oh wow,
30:03
Speaker 2: they must be really confident in the technology that Chappy
30:06
Speaker 2: GPT is producing. When the answer is yeah, maybe or
30:11
Speaker 2: maybe the spiggott is running dry enough that the pre
30:17
Speaker 2: eminent company that people talk about in artificial intelligence is
30:21
Speaker 2: feeling as though they need to invest a whole bunch
30:26
Speaker 2: of money in one of their largest customers to keep
30:29
Speaker 2: the ball rolling.
30:30
Speaker 4: Yeah. This is like McDonald's investing in a company that
30:33
Speaker 4: makes statins for cholesterol, isn't it. Yeah, I'm only half kidding.
30:39
Speaker 4: They're going to stuff these centers with their chips. Yeah,
30:42
Speaker 4: I mean this little bit circular.
30:44
Speaker 3: It is very circular. Like, yes, I can.
30:47
Speaker 4: See yes, McDonald's, by the way, which I love. It's
30:50
Speaker 4: just the first example they came to mind.
30:51
Speaker 3: Sorry, they're with my kids every Sunday evening.
30:54
Speaker 2: The logic though on this it's it's just so easy
30:59
Speaker 2: to connect the dots on this one. Like hmm, okay,
31:02
Speaker 2: you know the main player in generative AI, which has
31:07
Speaker 2: grown the user base faster than any tech platform in history.
31:11
Speaker 2: By the way, they have reached I don't remember how
31:14
Speaker 2: many users they have now, but they have reached that
31:16
Speaker 2: user base faster than any tech company in world history. Yeah,
31:22
Speaker 2: and they can't find the cash to keep buying these chips.
31:28
Speaker 2: They're needing to go to their biggest supplier of the chips.
31:31
Speaker 2: It's it's not illegally. I have no concerns about any
31:34
Speaker 2: of that. I am pretty genuinely concerned about what it
31:37
Speaker 2: says exactly about the business model here that in Nvidia
31:42
Speaker 2: feels it is a good business decision to go invest
31:45
Speaker 2: this much money in if not their single largest than
31:49
Speaker 2: one of their largest customers out there.
31:51
Speaker 4: Yeah, shareholders apparently don't like it, at least those on
31:53
Speaker 4: the margin. The stocks down a couple percentage, right.
31:56
Speaker 2: I think it's again and you know sometimes we've seen
31:59
Speaker 2: these announcements come and go and with you know, AI companies,
32:02
Speaker 2: the stock movement is not terribly logical today.
32:04
Speaker 3: I think it is.
32:05
Speaker 2: You have a stock price moving down based on bigger
32:08
Speaker 2: best and it doesn't seem like a really great Yeah,
32:12
Speaker 2: this was the best use.
32:12
Speaker 4: Of their capital. Right on the margin, they had a
32:15
Speaker 4: bunch of ideas in front of them. This is the
32:16
Speaker 4: one they picked. What does that tell us?
32:18
Speaker 3: Yeah?
32:18
Speaker 2: Right, because I mean, you know, that's what businesses do,
32:21
Speaker 2: is they have a bunch of cash from sales that
32:23
Speaker 2: they're probably sitting on, uh, and they're saying, what is
32:26
Speaker 2: the best investment that we can make with this?
32:28
Speaker 3: Is it improving our product? Right?
32:31
Speaker 2: Is it making the next generation AI chip that's going
32:34
Speaker 2: to power these things even faster to keep pace with
32:36
Speaker 2: the competition from China.
32:39
Speaker 3: Is it buying back some of our own.
32:40
Speaker 2: Shares because we find the story so compelling with Nvidia
32:43
Speaker 2: that we're going to buy back our own shares. Is
32:45
Speaker 2: it paying a dividend out to our shareholders, Uh, in
32:49
Speaker 2: order to reward them for.
32:50
Speaker 4: Keeping the growth in line with street That's that's what
32:53
Speaker 4: you're going on.
32:54
Speaker 3: Yeah, I wasn't going there. That's that's precisely.
32:57
Speaker 4: They need to hit these growth targets to keep the
32:59
Speaker 4: share price.
33:00
Speaker 2: Investors rely on our projections on share prices, and the
33:04
Speaker 2: only way that we can keep our sales going. This
33:08
Speaker 2: is one of the arguments that in Video could be
33:10
Speaker 2: making at the CEO level, is to give the money
33:14
Speaker 2: to the biggest customer. Who's Yeah, I mean it was,
33:18
Speaker 2: by the way, by all accounts, probably vastly unprofitable.
33:21
Speaker 3: In video is not and video has a ton of profit.
33:23
Speaker 2: But I mean you take a look at open Ai,
33:26
Speaker 2: who is a privately held company, which is why this
33:28
Speaker 2: one hundred billion dollar investment is going the way it is. Yeah,
33:32
Speaker 2: to me, this rings I guess I don't want to
33:37
Speaker 2: say alarm bells. I'm not there.
33:39
Speaker 3: It's not ringing alarm bells, but you take a look
33:41
Speaker 3: at it and say.
33:42
Speaker 4: Hmm, it suggests peak growth maybe past us.
33:45
Speaker 3: It does suggest that that could be.
33:47
Speaker 4: It did just suggest it. There are many factors that
33:49
Speaker 4: perhaps point in the other direction. This is not my area, but.
33:52
Speaker 2: Yeah, it suggests something that is just yeah, definitely gives
33:55
Speaker 2: you pause and definitely makes you want to look at
33:57
Speaker 2: over the next few quarters to say, Okay, fine, but
34:02
Speaker 2: where's that next spurt of growth going to come from?
34:04
Speaker 5: In that case, every dollar you've saved in retirement accounts
34:09
Speaker 5: and life insurance tells a story, a story of hard work,
34:12
Speaker 5: smart choices, and the future you envision for your family.
34:16
Speaker 5: One way to help that story end well is to
34:19
Speaker 5: make a beneficiary choice that does more. This month's free
34:22
Speaker 5: guide from Cushing and Dolan is called IRA in Life
34:26
Speaker 5: Insurance Planning is state tax strategies in nursing home protection,
34:30
Speaker 5: and it explains how naming your estate as the beneficiary
34:33
Speaker 5: of your IRA or life insurance can add a layer
34:37
Speaker 5: of tax efficiency and nursing home protection while still allowing
34:43
Speaker 5: your spouse access When it matters, it's about keeping more
34:46
Speaker 5: of what you've built, working for your loved ones now
34:49
Speaker 5: and in the years to come. Get your free copy
34:52
Speaker 5: today by calling eight sixty six eight four eight five
34:55
Speaker 5: six nine nine. That's eight six six eight four eight five,
35:00
Speaker 5: or you can request it from their website legal exchange
35:04
Speaker 5: show dot com.
35:06
Speaker 1: The proceeding was paid for and the views expressed are
35:08
Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
35:10
Speaker 1: or Armstrong Advisory may contact you offering legal or investment services.
35:13
Speaker 1: Cushing and Armstrong did not endorse each other and are
35:15
Speaker 1: not affiliated.
35:18
Speaker 2: Spirit Airlines furlowing one third of their flight attendants cannot
35:24
Speaker 2: be a good story for their longevity in this world.
35:28
Speaker 2: So Spirit Airlines announced that they are furlowing these flight attendants.
35:31
Speaker 2: They've also been getting some voluntary furloughs here and there.
35:37
Speaker 2: I was debating this. I don't know if you were
35:39
Speaker 2: on the program, Mark, but we are looking at flights
35:43
Speaker 2: to or Lando next year in either one of the
35:48
Speaker 2: two winter school vacation I guess winter spring vacation weeks,
35:51
Speaker 2: and Spirit Airlines was an option for that February break,
35:55
Speaker 2: and we were doing the mental gymnastics of like, hmm, okay,
36:00
Speaker 2: so if I book with my credit card and they
36:02
Speaker 2: go bankrupt, I'm gonna get my money back. But what
36:05
Speaker 2: if they go bankrupt in January, now I have to
36:07
Speaker 2: book on Delta for I would I would assume would
36:11
Speaker 2: be like three x the cost of what I could
36:13
Speaker 2: pay right now. We even went through the mental gymnastics
36:16
Speaker 2: of like, hey, okay, do we buy fully refundable tickets
36:20
Speaker 2: on Delta also buy the Spirit Airlines ones and then
36:24
Speaker 2: cancel the Delta tickets if they don't go out of business.
36:27
Speaker 2: But hm, this this to me seems like a bit
36:30
Speaker 2: of a snowball effect here. Maybe I'm different, maybe other
36:33
Speaker 2: people aren't paying as close attention to this, but I
36:37
Speaker 2: would have a very difficult time booking myself on a
36:40
Speaker 2: flight for Spirit Airlines right now, unless it were in
36:44
Speaker 2: the next week.
36:45
Speaker 4: What's the pilot's going to be on monster dot com
36:47
Speaker 4: the whole time?
36:48
Speaker 3: Right? Yeah?
36:48
Speaker 4: You might on LinkedIn posting about his skills. Yeah, you
36:51
Speaker 4: don't want to be on the last planeload of an
36:54
Speaker 4: airline that's named after what happens to you when you die?
37:00
Speaker 4: I always work? Isn't that the stupidest?
37:03
Speaker 3: Oh?
37:06
Speaker 1: Stupid?
37:06
Speaker 4: Oh that's what McKenzie came up with for them, So
37:10
Speaker 4: I don't know if it was mackenzie.
37:12
Speaker 2: I'm gonna come at this from one other perspective, how
37:15
Speaker 2: was this company not allowed to merge with jet Blue? Like, honestly,
37:20
Speaker 2: they told you that they were going to go belly up.
37:22
Speaker 2: If they're not allowed to merge, they clearly don't have
37:24
Speaker 2: much of a business model. Jet Blue is struggling too,
37:27
Speaker 2: And so instead what we get is, hey, Google, you
37:31
Speaker 2: are totally allowed to still put your search engine on
37:34
Speaker 2: Apple's devices and pay them whatever you want to do
37:37
Speaker 2: so and run your search business. Don't split up anything.
37:40
Speaker 2: Because what about AI? It was the entire argument from
37:43
Speaker 2: the judges. I know you did a bunch of wrong
37:45
Speaker 2: stuff in the past, and I totally agree that it
37:47
Speaker 2: was wrong and you were acting like monopoly. But I'm
37:50
Speaker 2: not going to break you up because what if AI
37:52
Speaker 2: disrupts your business model a little bit? And I don't
37:54
Speaker 2: want to hurt Apple because you know they're not involved.
37:56
Speaker 3: In this case. And then at the same time, we
37:59
Speaker 3: can turn around and say Spirit and jet Blue merging together.
38:02
Speaker 3: That would be disastrous for the world. We cannot allow
38:05
Speaker 3: that to happen. Just seems like something that I can't
38:08
Speaker 3: fully understand.
38:09
Speaker 2: We gotta take a quick break, but a lot more
38:11
Speaker 2: to cover in the second hour, including h one B,
38:14
Speaker 2: Visus and the State of Argentina. That's next on the
38:17
Speaker 2: financial change