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How long until Nvidia buys Intel outright? · The Financial Exchange Show

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1:05
Speaker 1: with Chuck Zadath and Mike Armstrow, Chuck.
1:10
Speaker 2: Mike Kentucker with you here. Day after the FED meeting
1:12
Speaker 2: in which the Federal Reserve cut the short term FED
1:15
Speaker 2: funds rate by a quarter percent, we've got a broad
1:19
Speaker 2: rally taking place in equity markets. All three major US
1:23
Speaker 2: indices are in the green. The Dow Jones Industrial Average
1:26
Speaker 2: up one hundred and one points about a quarter percent,
1:29
Speaker 2: SP five hundred about thirty seven points or half a percent,
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Speaker 2: and the Nasdaq is currently up two hundred and forty
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Speaker 2: points about one percent. So remind me if you've heard
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Speaker 2: this story before. Tech is kind of leading the way
1:42
Speaker 2: for the stock market, and thank you for you know,
1:45
Speaker 2: your time and attention. It's just it's it's what we're
1:48
Speaker 2: seeing with this market. It just continues to be a
1:52
Speaker 2: tech driven market right now today, coming out of the
1:56
Speaker 2: semiconductor space, which was not in a good spot yesterday
1:59
Speaker 2: on some negative news for Nvidia. But we've got some
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Speaker 2: other Invidia related news that we're gonna get to in
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Speaker 2: just a second once we finished going through markets. Ten
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Speaker 2: year treasury selling off very modestly, up four point six
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Speaker 2: basis points to four point one to two percent. We've
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Speaker 2: got oil today, let's see oil's basically flat, up twelve
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Speaker 2: cents a barrel on West Texas Intermediate to sixty four seventeen.
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Speaker 2: And we've got gold today selling off on some renewed
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Speaker 2: dollar strength. This has gold currently down forty four to
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Speaker 2: thirty and ounce to thirty six seventy three and fifty cents.
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Speaker 2: Gold obviously has been on a tear the last few weeks,
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Speaker 2: so little consolidation not entirely unexpected, and we'll see where
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Speaker 2: it goes from here. Also one other interesting data point,
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Speaker 2: Mike on the the weekly jobless claim stuff. Please, so
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Speaker 2: the initial claims came in back in line with where
2:56
Speaker 2: you want to see. They dropped from two hundred and
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Speaker 2: sixty four thousand to two hundred and thirty as we
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Speaker 2: kind of suspected they would come down because of a
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Speaker 2: couple reporting anomalies last week. We've got a new reporting
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Speaker 2: anomaly this week, though, Michael, oh good, it's not on
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Speaker 2: the initial claim side, it's on the continuing claim side.
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Speaker 2: And we're gonna hop on the old covered wagon and
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Speaker 2: travel down to North Carolina. I don't know why you
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Speaker 2: do that. It's more kind of going out.
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Speaker 3: West that's pretty directly south.
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Speaker 2: Yeah, well, we can hop on, you know, a nice
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Speaker 2: little plane and head down to North Carolina. How's that
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Speaker 2: seem more twenty first century? Thank you? That does seem better.
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Speaker 2: If we were going to Oregon, we would hop in
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Speaker 2: the covered wagon. Yeah, correct, Yeah, no, we can't agree there.
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Speaker 2: So North Carolina last week they reported twenty thousand, five
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Speaker 2: hundred and thirty five continuing unemployment claims. This week, two hundred.
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Speaker 3: And five seems off.
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Speaker 2: The lowest they've ever had prior to this was around
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Speaker 2: twelve thousand, so it's pretty unlikely that they have just
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Speaker 2: two hundred people on continuing claims. So the continuing claims
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Speaker 2: data for next week is likely to be revised up
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Speaker 2: pretty significantly, just because I don't think North Carolinas suddenly
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Speaker 2: had ninety nine percent of the people on unemployment go
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Speaker 2: off unemployment. It's never happened before in a single week.
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Speaker 3: So does that look at this stuff before that?
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Speaker 2: No idea. Do you think someone from the BLS would
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Speaker 2: just call North Carolina like whoever you know set this
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Speaker 2: in and be like George, Billy, Billy, did your claims
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Speaker 2: really decrease by ninety nine percent this week? Oh? No,
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Speaker 2: they did it? Okay, y, why don't you send us
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Speaker 2: your new claims then and we'll get this processed. You know,
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Speaker 2: it just seems to me like maybe there should be
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Speaker 2: a little communication there. Yeah, but hey, who, I don't
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Speaker 2: I to say that, maybe you know, you would give
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Speaker 2: it a critical eye and be like, maybe that didn't happen.
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Speaker 2: Let's talk about something that did happen though. Uh, Intel
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Speaker 2: is getting five billion dollars from in Video. I'll quote
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Speaker 2: here from Bloomberg and Video agreed to invest five billion
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Speaker 2: in Intel Corporation, and so the two will co develop
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Speaker 2: chips for PCs and data Center's a surprise move to
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Speaker 2: help prop up an ailing arts rival that sent Intel
5:07
Speaker 2: shares soaring.
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Speaker 3: What do you think, Chuck, vote of confidence or tagging
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Speaker 3: along with the US government here? Remember that the US
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Speaker 3: government just made an investment in Intel, what a month
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Speaker 3: and a half ago?
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Speaker 2: Can it be both? Yeah?
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Speaker 3: You know, I don't know that I would represent a
5:25
Speaker 3: whole bunch of confidence out of this investment, though it seems.
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Speaker 2: I don't know.
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Speaker 3: It's hard to read into it. I suppose you don't
5:31
Speaker 3: just throw money away. But if you're looking to get
5:35
Speaker 3: on the government's good side, I can see why you
5:37
Speaker 3: might want to do this as in video.
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Speaker 2: Well, here's the thing. In video. It's pretty clear to
5:42
Speaker 2: me that in Video CEO Jensen Wang as a pretty
5:44
Speaker 2: close relationship with President Trump. Seems like it they've been
5:48
Speaker 2: in pretty close contact since late spring, and so I
5:52
Speaker 2: think that there's a pretty close relationship there. It's hard
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Speaker 2: for me to imagine a that this deal doesn't happen.
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Speaker 2: That's some communication with the executive branch. But b it's
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Speaker 2: also clear to me that in Vidio doesn't just throw
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Speaker 2: five billion dollars around for no reason. You know, they
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Speaker 2: must think there's something there that they can get as well. Now,
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Speaker 2: exactly how this is going to take shape is still
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Speaker 2: an open question because basically what's being outlined here and
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Speaker 2: Video's gonna buy shares an Intel stock in order to
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Speaker 2: you know, process the investment, and Intel will then use
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Speaker 2: in Video's graphics technology and up upcoming PC chips and
6:33
Speaker 2: also provide its processors for data centers built around in
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Speaker 2: video hardware. I don't know why that is a market, Like,
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Speaker 2: is anyone building data centers right now being like, hey,
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Speaker 2: this would be much better if we bought some Intel
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Speaker 2: chips to It would seem to me if they thought
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Speaker 2: that they would already be doing it. They didn't offer
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Speaker 2: a timeline for when these first parts would go on sale,
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Speaker 2: and says that the announcement doesn't affect their individual future plans.
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Speaker 2: So I'll tell you the place that my head did
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Speaker 2: go to immediately after seeing this. How long do you
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Speaker 2: think it is until Nvidia buys out Intel entirely?
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Speaker 3: I don't, okay, So, I mean it's only one hundred
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Speaker 3: and forty six billion dollar company now, even with the
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Speaker 3: giant jump that they've seen, the stock is up by
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Speaker 3: fifty six percent right now. Yes, I take your point,
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Speaker 3: But does anyone does in video really want to manufacture chips?
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Speaker 3: This is exactly how Intel got to where they are
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Speaker 3: in the first place.
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Speaker 2: Here's just hear me out on this. Because my wheels
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Speaker 2: got turning as soon as I saw this. I'm like, okay,
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Speaker 2: Like in Video is gonna want the whole thing at
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Speaker 2: some point. This is like an entry into where they're going.
7:50
Speaker 2: If in Video were able to make their own chips,
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Speaker 2: they need a couple things. There's a couple of things
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Speaker 2: that need to happen. Obviously. The first is they need
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Speaker 2: someone with know how to make chips. Intel for all
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Speaker 2: of its flaws and foibles and this, and that they
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Speaker 2: can make chips, they might not be the best ones
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Speaker 2: right now, SIPs.
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Speaker 3: They can technically do so, but have failed to make
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Speaker 3: anything that people want to buy for the lays and
8:14
Speaker 3: grace technology now for the better part of a decade
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Speaker 3: a while.
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Speaker 2: But maybe this partnership starts to get them on track
8:21
Speaker 2: in terms of just you know, hey, here's what we're
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Speaker 2: trying to design. Can you help us, you know, with
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Speaker 2: manufacturing this and that? I don't know. The other piece is,
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Speaker 2: if there's one major risk that Nvidia has right now,
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Speaker 2: it's they are dependent on one supplier, Taiwan Semiconductor, who
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Speaker 2: the stuff that they're buying from them is manufactured entirely
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Speaker 2: outside of the United States in Taiwan, in an area
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Speaker 2: that's directly threatened by the Chinese government.
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Speaker 3: All true.
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Speaker 2: So if one is nervous about China doing two things,
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Speaker 2: a kind of crack down on anything semiconductor related that's
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Speaker 2: being purchased from the US, which it seems like they're
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Speaker 2: starting to, and be the potential for any Chinese military
9:09
Speaker 2: action towards Taiwan. If you can have facilities in the
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Speaker 2: United States that can make your chips it's if you're
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Speaker 2: a five trillion dollar company or a four trillion dollar company.
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Speaker 3: Nice to have an insurance policy.
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Speaker 2: One hundred billion dollar insurance policy for having some production
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Speaker 2: capacity out of the US might be worth it.
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Speaker 3: All agreed, But I am also no semiconductor manufacturing expert.
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Speaker 3: Let's see this thing front of it. So are you
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Speaker 3: a decade before they have that capability?
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Speaker 2: More? Like, I genuinely don't know if you start telling
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Speaker 2: me it's a day less than a decade?
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Speaker 3: Yeah, yeah, you.
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Speaker 2: Know, like it's it's every day counts. Is I guess
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Speaker 2: the point that I'm making And I don't know. I
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Speaker 2: I just think there's some like that, there's something there
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Speaker 2: in my my opinion, and I just wonder if if
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Speaker 2: in Nvidia is seeing the same thing. I don't know. Yeah,
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Speaker 2: I'm just it's probably easier and cheaper to do it
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Speaker 2: this way than for Nvidia to start from scratch on
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Speaker 2: their own, I guess, is what I'm getting at.
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Speaker 3: Yeah, I'm not sure if that means they need to
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Speaker 3: own Intel, but we'll see.
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Speaker 2: I don't know. This could be one that's like completely
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Speaker 2: off the board, Tucker, can you put this on the
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Speaker 2: board for call it? By end? Of twenty seven. Give
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Speaker 2: me a two year window.
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Speaker 4: On this end of twenty seven.
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Speaker 2: Yeah, what kind of odds am I getting on that?
10:35
Speaker 2: Well check predicted. Okay, uh yeah, let's put that on
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Speaker 2: the board for end of twenty seven. But I don't
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Speaker 2: know that. Like I saw it, and I'm like, ooh,
10:45
Speaker 2: this is a first step, like it's it felt that
10:49
Speaker 2: way to me at least. Yeah.
10:51
Speaker 3: I like our way of promoting gambling versus the NFLS
10:56
Speaker 3: and I don't actually bet any money on it. We
10:58
Speaker 3: don't actually bet any money on it. And the things
10:59
Speaker 3: that we bet on only you and I are interested in.
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Speaker 2: There's no market for this, Like we'll will in video
11:06
Speaker 2: bye Intel by the end of twenty seven. Yeah, we've
11:09
Speaker 2: got one person who's wagering nothing. His name's Chuck.
11:12
Speaker 4: Tune in two years.
11:13
Speaker 2: Yeah, when we get to the January first, twenty eighth show,
11:18
Speaker 2: it's gonna be straight fire. Let's take a quick break here.
11:22
Speaker 2: When we come back, we'll do a little bit of trivia.
11:25
Speaker 2: Do we want to talk Huawei, Michael, Yeah, we do. Okay,
11:29
Speaker 2: let's do a little bit of Huawei when we return.
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Speaker 2: Time for trivia.
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Speaker 3: Tour de France. Yeah, Tour de France.
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Speaker 2: Tour de France Listen Armstrong is one of those titles
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Speaker 2: when I actually watched the thing, you know, I mean,
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Speaker 2: I like, back then, I thought it was like really cool.
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Speaker 2: It probably still is, but I gotta admit he was
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Speaker 2: the only reason that I was watching him back then. Sure,
13:50
Speaker 2: let's talk a little bit about uh Huawei, so uh
13:53
Speaker 2: Bloomberg report here, Huawei unveils ai chip roadmap to challenge
13:57
Speaker 2: in Nvidia's lead. We talked about this little bit yesterday,
14:00
Speaker 2: so earlier this summer we correctly called it, and we're
14:05
Speaker 2: proud to toot our own horn on this that, Hey,
14:08
Speaker 2: the most interesting thing would be the US grants export
14:12
Speaker 2: licenses to Nvidia to send their chips to China, and
14:14
Speaker 2: China says we're not interested, which is exactly what they
14:17
Speaker 2: said yesterday. The thing we then speculated about yesterday is, hey,
14:21
Speaker 2: what if, you know, China tries to do what they
14:23
Speaker 2: always try to do, which is, hey, you know what,
14:27
Speaker 2: let's just make so much of this stuff at such
14:29
Speaker 2: a cheap cost that we can then sell it everywhere
14:32
Speaker 2: and put competitors out of business because we can just
14:34
Speaker 2: do it cheaper than everyone else.
14:36
Speaker 3: They've done with solar panels, they're trying to do it
14:38
Speaker 3: with cars, and this sure is a pretty good roadmap.
14:41
Speaker 2: For it, and this year seems like they're trying to
14:42
Speaker 2: do it now. These are going to be models that
14:44
Speaker 2: are rolled out in twenty twenty eight, and I'm sorry's
14:46
Speaker 2: twenty seven and twenty eight, so there's you know, a
14:48
Speaker 2: year and a half to two years before these are
14:50
Speaker 2: coming out. But the question that I posed yesterday that
14:54
Speaker 2: i'll continue to pose today is Okay, you have a
15:00
Speaker 2: pretty convincing case for me at least that domestically Microsoft
15:04
Speaker 2: and open AI and Meta and Google probably not going
15:08
Speaker 2: to be interested in these chips. Is that a fair assessment, Mic?
15:12
Speaker 2: I think so. In Europe, I think it's going to
15:16
Speaker 2: be more of a question. But Europe is successfully fended
15:20
Speaker 2: off Huawei inside of telecom systems previously, and so I
15:24
Speaker 2: think that they could do so here, even though their
15:26
Speaker 2: track record is bad at best. Just look at you know,
15:29
Speaker 2: Chinese evs overrunning European manufacturers right now. Right The one
15:34
Speaker 2: that really interests me is what happens with the you know,
15:39
Speaker 2: the Gulf States and and and basically any OPEC country
15:43
Speaker 2: that has committed to buy a lot of Nvidia chips
15:45
Speaker 2: right now, because it's pretty clear to me that the
15:49
Speaker 2: trade that you know, these countries see if you're you know,
15:53
Speaker 2: the UAE, just as an example, you say, okay, we'll
15:56
Speaker 2: buy you know, all this stuff instead up a big
15:58
Speaker 2: data center here and we can run it in. That'll
16:00
Speaker 2: be great in and of itself, but obviously they also
16:02
Speaker 2: want you know, defense contracts and things like that. They
16:05
Speaker 2: want US weapons clearly, like we've seen how the deals
16:10
Speaker 2: have unfolded so the question for me is if China
16:14
Speaker 2: were to go to the UAE and you know who,
16:18
Speaker 2: like whoever they want to go to and say, hey, look,
16:22
Speaker 2: I know you're supposed to buy you know, X billion
16:24
Speaker 2: dollars of in Nvidia chips. We'll give you the same
16:27
Speaker 2: performance at twenty percent of the cost, and we'll buy
16:32
Speaker 2: even more oil from you, because the US can't commit
16:35
Speaker 2: to buying more oil right now, Like the US is
16:37
Speaker 2: like we're you know, we're not buying more. We're not
16:40
Speaker 2: the future customer for the Gulf States. And so I
16:46
Speaker 2: think that's the interesting thing that I think I'll watch
16:49
Speaker 2: over the next year or so, is hey, what do
16:52
Speaker 2: we see in terms of potential chip commitments from those
16:56
Speaker 2: countries saying yeah, we're okay doing that and being China's
17:00
Speaker 2: ecosystem on this stuff. I'm just curious to see if
17:03
Speaker 2: it plays out that way, because this is not a
17:07
Speaker 2: case where here's the thing, like China can't go to
17:10
Speaker 2: a lot of other countries. There aren't many countries that
17:12
Speaker 2: actually have enough money to buy these and like sizeable
17:15
Speaker 2: quantities like you can't go to It's not gonna be
17:19
Speaker 2: like the Belton Road initiative. China can't go to Cameroon
17:22
Speaker 2: and be like, hey, do you want to buy billions
17:24
Speaker 2: of dollars of our chips, because Cameroon's gonna be like,
17:25
Speaker 2: what do we use these for? Here? Yeah, it's like
17:28
Speaker 2: we're not gonna be a big data center hub. Like,
17:30
Speaker 2: it's just not what we're set up to do.
17:32
Speaker 3: Europe Middle East. So the question then about these I
17:37
Speaker 3: think clearly China probably has the capability to manufacture a
17:43
Speaker 3: ton of them. The questions aren't they any good?
17:46
Speaker 2: Right?
17:47
Speaker 3: Because like the entire theory that we've been running on
17:49
Speaker 3: here Chuck is, yeah, maybe they will just produce chips
17:53
Speaker 3: that aren't that good. But because they have such incredible
17:56
Speaker 3: power generation capability in China, then it won't matter because
18:00
Speaker 3: they can they can just build more and more of them,
18:02
Speaker 3: and they'll be able to get around the fact that
18:04
Speaker 3: they're not terribly efficient. That's not the case in Germany,
18:07
Speaker 3: it's not the case in Spain. If you want to
18:10
Speaker 3: start up a data center in Spain and run your
18:12
Speaker 3: AI models on Chinese chips, good luck finding the power,
18:15
Speaker 3: good luck finding electricity for it. And so that's the
18:18
Speaker 3: question is are they good enough to sell to customers
18:21
Speaker 3: outside of China, where yeah, you can just you know,
18:24
Speaker 3: wipe out an entire city and put up a nuclear
18:26
Speaker 3: power plant, because who's going to question you?
18:29
Speaker 2: Piece from Bloomberg, opinion from the full editorial board. Congress
18:33
Speaker 2: has no good excuse to keep trading.
18:35
Speaker 3: Stocks, nor have they for the last thirty years, but
18:37
Speaker 3: hasn't stopped them. No, they once again make a compelling
18:42
Speaker 3: argument that congress people senators should not be able to
18:46
Speaker 3: trade stocks, and once again it'll be completely ignored and
18:50
Speaker 3: they will continue to insider trade without having to call
18:53
Speaker 3: it insider trading.
18:54
Speaker 2: Yeah, it's this should be one of the simplest things
18:57
Speaker 2: to do. But obviously Congress is kind of failing to
19:00
Speaker 2: self police on the issue. And that's why you have
19:04
Speaker 2: two different exchange traded funds that are now tracking the
19:08
Speaker 2: trades of Nancy Pelosi and Ted Cruz. Yeah, so.
19:14
Speaker 3: I guess we'll just continue to tolerate this. We shouldn't.
19:19
Speaker 3: Everyone should be upset about this, because both Democrats and
19:21
Speaker 3: Republicans do it over and over again.
19:25
Speaker 2: Disgusting. Let's take a quick break here. Stocks remain broadly
19:29
Speaker 2: positive as we head towards the bottom of the hour.
19:31
Speaker 2: We got the trivia answer and Wall Street.
19:33
Speaker 1: Watch next, bringing the latest financial news straight.
19:41
Speaker 2: To your radio.
19:42
Speaker 1: Every day. It's the Financial Exchange on the Financial Exchange
19:46
Speaker 1: Radio Network. Time now for Wall Street Watch. A complete
19:52
Speaker 1: look at what's moving markets so far today right here
19:55
Speaker 1: on the Financial Exchange Radio Network.
19:57
Speaker 4: Markets in rally mode after the FED reduced interest rates
20:00
Speaker 4: by a quarter of a percent at the conclusion of
20:03
Speaker 4: their meeting yesterday afternoon. AI and Chip gin Nvidia also
20:07
Speaker 4: remains in the spotlight with more news around them at
20:10
Speaker 4: the moment. The Dow is up three tenths of one percent,
20:14
Speaker 4: or one hundred and fifty four points higher, SMP five
20:17
Speaker 4: hundred is up seven tenths of one percent or forty
20:20
Speaker 4: six points, Nasdaq up one point two percent or two
20:23
Speaker 4: hundred and sixty five points, Russell two thousand up nearly
20:27
Speaker 4: one and a half percent, Tenure Treas reeled up three
20:30
Speaker 4: basis points and is now at four point one point
20:32
Speaker 4: one four percent, and crude oil down seven tens of
20:37
Speaker 4: one percent, rating its sixty three dollars and sixty one cents.
20:41
Speaker 4: A barrel of the big tech news on the day
20:43
Speaker 4: revolves around in Vidia and Intel after in Video said
20:47
Speaker 4: it would invest five billion dollars in struggling chip maker
20:50
Speaker 4: Intel to co develop data center and PC products. After
20:54
Speaker 4: shedding three percent yesterday in video, stock is rebounding three
20:58
Speaker 4: percent today, while Intel shares are surging twenty eight percent. Meanwhile,
21:04
Speaker 4: some breaking news this hour we where the FTC and
21:08
Speaker 4: seven States sued Live Nation and Ticketmaster for failing to
21:12
Speaker 4: enforce its own purchase limits, which allowed resellers to buy
21:16
Speaker 4: up large numbers of passes for popular events. Live Nation
21:21
Speaker 4: shares are down by two percent on that news. Elsewhere
21:24
Speaker 4: shares and Nova nor Disk jumping six percent after the
21:28
Speaker 4: drug maker said late stage trial of its once daily
21:32
Speaker 4: obesity pill showed significant weight reduction in line with its
21:37
Speaker 4: we Go Vi injectable weight loss drug. PayPal and Alphabet
21:41
Speaker 4: announced it with team up on online shopping, laying out
21:44
Speaker 4: plans to combine PayPal's payment infrastructure with the Google's AI expertise.
21:50
Speaker 4: Both PayPal and Alphabet are up about one percent. Darden
21:54
Speaker 4: down by seven excuse me, nine percent after the olive
21:57
Speaker 4: garden owner raised its annual outlook but hosted adjusting earnings
22:02
Speaker 4: below forecasts. And after today's closing bell, we'll see earnings
22:06
Speaker 4: from FedEx and Lenar. I'm Tucker Silva and that is
22:10
Speaker 4: Wall Street Watch. And in the previous segment, we asked
22:13
Speaker 4: you the trivia question, how many Tour de France titles
22:19
Speaker 4: does Lance Armstrong currently have? That would be zero, yeah.
22:23
Speaker 2: Zero.
22:23
Speaker 4: While Armstrong did win seven Tour de France races, he
22:28
Speaker 4: was stripped of all his titles due to the use
22:31
Speaker 4: of performance enhancing drugs. Edward from Bill Recer Mass is
22:35
Speaker 4: our winner today, taking home a Financial Exchange Show t shirt.
22:38
Speaker 4: Congrats to ed and we play trivia every day here
22:41
Speaker 4: in the Financial Exchange See complete contest rules at Financial
22:44
Speaker 4: Exchange Show dot com.
22:45
Speaker 3: I feel like our trivia is slowly switching to riddles.
22:49
Speaker 3: I think it's Tour de France.
22:51
Speaker 2: Shut up.
22:55
Speaker 3: From Tucker on this one.
22:57
Speaker 2: Fantastic, Mike. Do you want to talk about what other
23:00
Speaker 2: gen zers should include social Security in their retirement planning
23:04
Speaker 2: or how to start practicing retirement?
23:07
Speaker 3: I like the idea of practicing retirement. Can I practice retirement?
23:10
Speaker 2: Yeah? Why don't you just go right now?
23:11
Speaker 3: Yeah, I'll talk to you guys later. So realistically, no,
23:16
Speaker 3: really realistically for a moment here, Chuck, have you, I'm
23:21
Speaker 3: sure you have. I do frequently see people retire and
23:26
Speaker 3: then just utterly fail at that retirement. It's usually not
23:30
Speaker 3: because of their overall planning or lack thereof, but I
23:34
Speaker 3: think people just have this oftentimes wrong view of what
23:40
Speaker 3: retirement's going to be, Like, how do you see it?
23:44
Speaker 3: Most often when I see people screw it up? Like,
23:47
Speaker 3: let me be clear, like eight times out of ten,
23:49
Speaker 3: I think people do it really well. They you know,
23:52
Speaker 3: find a lot of enjoyment and retirement. They are doing
23:56
Speaker 3: things that they didn't have time to do, They're restarting
23:59
Speaker 3: passions that had previously. But when I see people screwed up,
24:03
Speaker 3: it's usually because they end a job, either involuntarily or
24:09
Speaker 3: because they just hated the job, and then they have
24:13
Speaker 3: no idea what to do with themselves.
24:15
Speaker 2: Yeah. Yeah, it's a lot of times, I would say
24:20
Speaker 2: amost all the time when people talk about planning for retirement,
24:23
Speaker 2: they're so focused on can I that they don't really
24:26
Speaker 2: focus on, well, how do I actually do it? And
24:29
Speaker 2: should I? Yes? And so what does this get at
24:33
Speaker 2: in terms of the idea of practicing retire Like what
24:36
Speaker 2: do we mean by practice retirements?
24:38
Speaker 3: Well, the case that they lay out, which is a
24:41
Speaker 3: compelling one, but most employers won't let you do it,
24:44
Speaker 3: is try and kind of slowly practice your retirement activities
24:49
Speaker 3: before you get there. Like most of us that are
24:50
Speaker 3: heading towards retirement don't have young kids at home anymore,
24:54
Speaker 3: and so hey, I really want to get into I'm
24:58
Speaker 3: gonna go with the most unique one. I No client
25:01
Speaker 3: of mine really want to retire and spend more of
25:03
Speaker 3: his time building bird houses. Love it awesome activity? Uh,
25:08
Speaker 3: try it out.
25:09
Speaker 2: Have you watched Listers? By the way, do.
25:11
Speaker 3: It for five hours on a weekend and see if
25:13
Speaker 3: you actually enjoy it would be the answer. No, I
25:15
Speaker 3: haven't watched Listers. What's Listers?
25:17
Speaker 2: It's a like two hour documentary on these guys who
25:20
Speaker 2: decided to go on an extreme bird watching tour for
25:23
Speaker 2: a year. Extreme like doing like nutty things to go
25:26
Speaker 2: watch birds. Okay, I know you'd be like extreme bird watching.
25:30
Speaker 2: What's that? If you watch it, you'll get it. And
25:33
Speaker 2: then they wrote a book basically about all the birds
25:36
Speaker 2: that they saw, but it's it's a bird watching book
25:38
Speaker 2: for late people got it so that the reviews that
25:40
Speaker 2: you see on Amazon are like, not the book I
25:43
Speaker 2: would pick in order to find birds, but entertaining nonetheless.
25:47
Speaker 3: So the you know, awesome result, the result that I've
25:51
Speaker 3: seen people really get the best out of is when
25:53
Speaker 3: an employer actually allows you to cut back your hours,
25:58
Speaker 3: right like, hey, yeah, I'm going to three week and
26:01
Speaker 3: I'm phasing into retirement.
26:02
Speaker 2: Now.
26:03
Speaker 3: Again, that's a pretty unique situation. I will fully admit
26:05
Speaker 3: that most employers aren't terribly okay with it. But like,
26:09
Speaker 3: you know, if you can drive a compelling argument, hey
26:11
Speaker 3: I'm going to drop my health insurance and you can
26:14
Speaker 3: cut my wages, but I want to try out this
26:16
Speaker 3: retirement thing and go to three days a week, Like
26:19
Speaker 3: what a perfect solution for figuring out what it is
26:21
Speaker 3: that you're going to do. So that's the idea of
26:23
Speaker 3: practicing retirement. And if it doesn't really work in that
26:28
Speaker 3: specific way, then there's other ways to do it, such
26:30
Speaker 3: as dedicating you know, I guess the most important thing
26:34
Speaker 3: is actually having a reason to get up in the
26:37
Speaker 3: morning and do retirement every day, right, Like, what is
26:40
Speaker 3: it that I'm going to fill my time with? But
26:44
Speaker 3: in look to have the luxury of practicing that, to
26:48
Speaker 3: have the luxury of knowing that, hey, I can step
26:51
Speaker 3: out and drop my health insurance and move back to
26:53
Speaker 3: a few days a week, you do have to start
26:56
Speaker 3: with the financial side of planning for retirement as well,
27:00
Speaker 3: and if you would like to learn a little bit
27:01
Speaker 3: more about how Armstrong Advisory Group thinks about those stages
27:06
Speaker 3: of planning for retirement, we'd encourage you to come to
27:09
Speaker 3: one of our live seminars happening next month. I've talked
27:14
Speaker 3: to you a little bit about these before, but it's
27:15
Speaker 3: gonna be a combination of both a live broadcast of
27:18
Speaker 3: this show, the Financial Exchange, followed by meet and greet
27:22
Speaker 3: and seminar with the Armstrong Advisor Group. We're gonna buy
27:24
Speaker 3: you lunch and meet you at either the Showcase Super
27:27
Speaker 3: Lucks and Chestnut Hill on October sixteenth or the Margaritaville
27:32
Speaker 3: Resort on Cape Cod on October ninth, so two separate
27:35
Speaker 3: events that you can sign up for. Space is always
27:38
Speaker 3: limited for these folks and we do sell out, so
27:41
Speaker 3: we need you to call and book your appointment before
27:43
Speaker 3: you show up. Once again, the first one live broadcast
27:47
Speaker 3: of The Financial Exchange, followed by lunch with aag October
27:51
Speaker 3: ninth on the Margaritaville Resort on Cape Cod and then
27:55
Speaker 3: follow by that we're gonna be doing the Showcase Super
27:57
Speaker 3: Lucks Chestnut Hill on October sixteenth and sign up at
28:01
Speaker 3: Armstrong Advisory dot com or by just calling us at
28:04
Speaker 3: eight hundred three nine three four zero zero one. It's
28:08
Speaker 3: a really good time. You get to see the actual show,
28:10
Speaker 3: meet that guy Tucker. Will you be there in person
28:13
Speaker 3: or do you have to stay here to be determined?
28:14
Speaker 3: To be determined whether or not you get to meet
28:16
Speaker 3: Tucker at these events, but we would love to have you.
28:20
Speaker 3: It's always a really fun time and I think a
28:21
Speaker 3: lot of people get a lot out of it. So
28:23
Speaker 3: join us. October ninth, October sixteenth, Armstrong Advisory dot com.
28:27
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
28:30
Speaker 1: registered investment advisor. Nothing in the ad or in any
28:32
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
28:35
Speaker 1: your own financial, tax into state planning advisors before making
28:38
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
28:41
Speaker 1: advisory services.
28:43
Speaker 2: Mike, we got to talk about this home insurance piece. Yeah,
28:46
Speaker 2: it's title, and this is something we've been harping on
28:48
Speaker 2: for the last year, and again I still don't think
28:51
Speaker 2: people are quite prepared for this. And the title says
28:54
Speaker 2: that home insurance, as you know it is doomed, you're
28:56
Speaker 2: not ready and I know that that, Mike. How often
29:00
Speaker 2: do we are we like, you know, doomers on the
29:02
Speaker 2: show where we're like, the world's gonna end, everything's gonna
29:05
Speaker 2: be bad.
29:05
Speaker 3: Like, no, we don't say that, but we criticize the
29:08
Speaker 3: articles that do say it.
29:10
Speaker 2: This one's underplaying it in my opinion.
29:12
Speaker 3: When you have the CEO of the largest reinsurer out there,
29:17
Speaker 3: reinsurance companies are insurance companies that ensure insurance companies coming
29:22
Speaker 3: out and saying we are starting to reach the limits
29:25
Speaker 3: of traditional insurance.
29:28
Speaker 2: Yes, that's like, that's a shot across the bow. Correct.
29:32
Speaker 2: So just as like the data that we have here,
29:35
Speaker 2: home insurance costs in the United States have risen twenty
29:38
Speaker 2: percent in the past two years. They're set for another
29:41
Speaker 2: eight percent gain nationally this year. And when you look
29:46
Speaker 2: at it, the states that have high home insurance rates,
29:48
Speaker 2: they are the exact ones that you'd expect Florida, Louisiana, Oklahoma, Colorado, Texas.
29:53
Speaker 2: They're ones with lots of natural disasters because that's usually
29:56
Speaker 2: what causes the most widespread damage. It's you know home
30:00
Speaker 2: you know, fires and things like that. Sure that happens,
30:02
Speaker 2: but it's kind of predictable. You know, there's a fairly
30:05
Speaker 2: fixed rate of those across the country. You don't have
30:08
Speaker 2: hurricanes in Vermont, same way that you don't have you know,
30:12
Speaker 2: earthquakes in North Carolina that cause you know, any meaningful
30:15
Speaker 2: widespread damage, So you can kind of predict where the
30:18
Speaker 2: damage is going to be. So Louisiana as an example,
30:23
Speaker 2: right now, this year, the average home insurance costs there
30:26
Speaker 2: is eleven thousand dollars a year. That's expected to rise
30:30
Speaker 2: by another three thousand this year. So you're talking a
30:32
Speaker 2: twenty five percent premium bump for Louisiana this year. And
30:36
Speaker 2: as someone who spent last weekend in Louisiana, I can
30:40
Speaker 2: tell you it's a really low and flat state and
30:43
Speaker 2: I understand exactly why this is happening.
30:46
Speaker 3: It's also a relatively poor state where people are not
30:48
Speaker 3: going to be able to ensure these things.
30:50
Speaker 2: And this is the problem is what this is going
30:53
Speaker 2: to mean is that even in a world in which
30:56
Speaker 2: interest rates may come down, insurance costs, property taxes, and
31:03
Speaker 2: utilities are going to be a major headwind against the
31:07
Speaker 2: housing market for the foreseeable future.
31:09
Speaker 3: Here's my biggest problem with this overall situation is we
31:14
Speaker 3: are not doing anything at the state or federal level
31:17
Speaker 3: to address this head on, and so what everyone should
31:20
Speaker 3: be listening to and what can you do? I well,
31:24
Speaker 3: I worry about what will be done, which seems to
31:28
Speaker 3: be really like, here's how I see this playing out,
31:31
Speaker 3: Chuck is, more and more insurance companies try to raise prices,
31:36
Speaker 3: more and more states prevent them from doing so. More
31:38
Speaker 3: and more states go and set up the Florida and
31:40
Speaker 3: California model, which is, if your insurance company drops you,
31:44
Speaker 3: the state will ensure you again. And where I think
31:48
Speaker 3: we will ultimately lead to is someday one of those
31:52
Speaker 3: companies will go belly up, and then we at the
31:54
Speaker 3: federal level, we you know, all taxpayers will have to decide, Okay,
31:58
Speaker 3: are we bailing out state insurance? Is that made bad decisions?
32:01
Speaker 2: Yep?
32:02
Speaker 3: That's like I don't have an answer for how you
32:04
Speaker 3: deal with this at the insurance company level other than
32:07
Speaker 3: raising premiums.
32:08
Speaker 2: I don't think you can stop that.
32:10
Speaker 3: What I worry about is that we in Massachusetts, we
32:13
Speaker 3: in Vermont, in Maine, you know, across the country are
32:16
Speaker 3: gonna be left hold in the bag for when Florida's
32:18
Speaker 3: state insure finally goes belly up based on a huge
32:20
Speaker 3: hurricane sure and that's that's how it involves all of us.
32:24
Speaker 2: Yeah, the FARTA insurance market does appear to be stabilized somewhat. Yeah,
32:28
Speaker 2: and that does.
32:29
Speaker 3: Insurances are coming back. They finally got rid of some
32:31
Speaker 3: of the fraud. They've allowed premium increases. You have people
32:35
Speaker 3: dropping off the state run insurance. So I'm seeing signs
32:38
Speaker 3: of encouragement.
32:39
Speaker 2: But it's stabilizing at an average cost of like fifteen
32:43
Speaker 2: fifteen five hundred a year, which is up from you know,
32:47
Speaker 2: seven thousand a year a few years back. Yeah, so
32:50
Speaker 2: that like this is unfortunately the stuff that you need
32:52
Speaker 2: to do in order to stabilize these things is the
32:55
Speaker 2: insurance costs likely have to go up. I mean Louisiana
32:59
Speaker 2: just as an example, the average cost of a home
33:02
Speaker 2: in Louisiana, not that different from the broader US, is
33:05
Speaker 2: about five hundred thousand for homes that were sold this year.
33:09
Speaker 2: If you're paying fourteen thousand for insurance, you're talking about
33:11
Speaker 2: almost three percent of the homes cost in any given
33:15
Speaker 2: year is going to the insurance policy. And that has
33:19
Speaker 2: an impact because hey, one thousand dollars a month being
33:23
Speaker 2: added to your monthly mortgage payment. It's probably increasing your
33:27
Speaker 2: monthly payment by fifty percent. It's a huge thing that
33:30
Speaker 2: you got to account for, and it's going to happen
33:32
Speaker 2: in more and more states because this is this is
33:34
Speaker 2: a widespread issue that is going to continue to grow.
33:38
Speaker 2: Quick break here when we come back Stack Roulette.
33:41
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34:01
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34:04
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Speaker 1: Series XM's Business Radio Channel one thirty two. Thanks, he's
34:11
Speaker 1: the Financial Exchange Radio Network, Mike.
34:19
Speaker 2: What do you got for me? For stock Ruler, Chuck?
34:21
Speaker 3: It is h apple picking season and New England has
34:25
Speaker 3: taken home some accolades for the best orchards and corn
34:29
Speaker 3: mazes out there. In fact, according to USA Today, they
34:32
Speaker 3: went and ranked for me the top ten apple orchards
34:35
Speaker 3: in the country, along with the top ten corn mazes,
34:38
Speaker 3: which I love a little bit of each of those
34:40
Speaker 3: this time of year. Number one corn maze up in Maine,
34:44
Speaker 3: Levant Levint, Maine, Levant, Maine. I don't know how you
34:46
Speaker 3: pronounce it. Tree Wargi Family Orchards taken home the number
34:51
Speaker 3: one spot there. The corn maze covers over four acres. Oh,
34:55
Speaker 3: it's a whale. Yeah it's a whale. And then Baby
35:00
Speaker 3: Wheel Lineman Orchards in Middlefield, Connecticut, taking home the number
35:04
Speaker 3: one orchard across the country according to USA Today. And
35:08
Speaker 3: then you know several other New England orchards rounding out
35:11
Speaker 3: the top ten on there.
35:12
Speaker 2: So good job.
35:13
Speaker 3: And quite honestly, Midwest, what are you doing not having
35:16
Speaker 3: the top number one corn maze in the country, Like
35:21
Speaker 3: you know, I'm not even really seeing. Kentucky is like
35:26
Speaker 3: number five, honestly.
35:28
Speaker 2: Not a corn maze fan. Too creepy for me, oh
35:33
Speaker 2: to like, it's I just I it creeps me out.
35:38
Speaker 3: Yeah, I'm not with you there, But I can understand
35:41
Speaker 3: why you would say that.
35:42
Speaker 2: It'll be being my height and everything that corn is
35:44
Speaker 2: awfully intimidating. Yep, yep. So I want to talk a
35:48
Speaker 2: little bit about Meta's announcement yesterday of these new smart glasses,
35:52
Speaker 2: they really will. Yeah, when when you can't get the
35:55
Speaker 2: product to work during your demo, Gosh, it sure seems
35:59
Speaker 2: really intuitive for us all to be wearing these. So
36:02
Speaker 2: the best description that I saw yesterday was congrats to
36:05
Speaker 2: Meta on you know, pushing everyone to use the Apple
36:08
Speaker 2: eyeglasses three years from now. And this is like the
36:12
Speaker 2: thread is, hey, even if this becomes a thing, which
36:16
Speaker 2: you know, Zuckerberg's trying to talk about, Hey, like everyone's
36:19
Speaker 2: gonna be wearing these because I get it. They want
36:22
Speaker 2: to control the hardware so they don't get bopped on
36:25
Speaker 2: the head like Apple did to them a few years ago.
36:28
Speaker 2: But ultimately, there are a few different problems that Meta has.
36:32
Speaker 2: The first is, no one wants to buy their hardware
36:34
Speaker 2: in any form factor. Let's be honest. They've tried a
36:37
Speaker 2: lot of different things. They've tried glasses before, they've tried
36:43
Speaker 2: artificial you know, virtual reality stuff. They've tried the home
36:47
Speaker 2: pod type device, things like that, the in home devices
36:50
Speaker 2: and things like that. I don't think there's any evidence
36:53
Speaker 2: that people want to buy Meta hardware. They're just really
36:55
Speaker 2: hooked on the social media aspect of it. The second
36:59
Speaker 2: piece is. I think a lot of users, particularly Apple users,
37:06
Speaker 2: like continuity within the ecosystem, meaning, hey, even if wearable
37:10
Speaker 2: glasses become a big thing wearable glasses. All glasses are wearable,
37:14
Speaker 2: aren't they, even if you know were technology. Even if
37:19
Speaker 2: smart glasses become a thing, the Apple consumer is likely
37:23
Speaker 2: to opt for the Apple product even if it's not
37:26
Speaker 2: the best thing out there, because that's what Apple consumers do.
37:30
Speaker 2: I say this as a proud Apple consumer. I keep
37:33
Speaker 2: buying new iPhones why because it's already there now. I
37:36
Speaker 2: stretch them out as long as possible, like five years
37:39
Speaker 2: or so if I can, But I don't want to
37:42
Speaker 2: like reinvent myself at this point. So yeah, Zuck's trying
37:47
Speaker 2: to sell these things. I also don't know how much
37:49
Speaker 2: of a market there is for smart glasses. At eight
37:51
Speaker 2: hundred dollars, it's a pretty high price point.
37:55
Speaker 3: The only market for any of this type of stuff
37:57
Speaker 3: is in the gaming industry, and I am just shocked
38:00
Speaker 3: that we do not have a good gaming VR headset
38:04
Speaker 3: that people are mass buying and producing right now.
38:07
Speaker 2: So it's yeah, I thought this was interesting. Let's take
38:12
Speaker 2: a quick break for the rest of the day. Back
38:15
Speaker 2: at it tomorrow that we're gonna finish off the week
38:17
Speaker 2: on the Financial Exchange