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Economic Anxiety Rises as Oil and AI Risks Shake Markets · The Financial Exchange Show

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Speaker 1: This is the Financial Exchange with Mike Armstrong and Paul Lane.
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Speaker 1: Mike Armstrong and Paul Lane.
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Speaker 2: Good morning, and welcome back to the Financial Exchange. It's Mike,
0:44
Speaker 2: Paul and Tucker with you on a Monday where markets
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Speaker 2: are unsure of what to.
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Speaker 3: Do with themselves.
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Speaker 2: They were in the red this morning during pre market trading.
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Speaker 2: They opened up positive after some progress was announced with Iran,
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Speaker 2: the Iranians confirming, but on Sunday the Irrinonians announced they
1:02
Speaker 2: were closing the straight of horror moves again and really
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Speaker 2: unclear at this stage just what traffic volume is going
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Speaker 2: to look like over the coming weeks as we attempt
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Speaker 2: to reopen the global economy for oil and see things
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Speaker 2: progress there. If you missed it, you know talks were
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Speaker 2: progressing over the weekend through delegates.
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Speaker 3: The Iranians announced that.
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Speaker 2: They were closing the straight on Sunday, after some ships
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Speaker 2: seem to have gotten through, maybe an average of twenty
1:37
Speaker 2: ships on Thursday, Friday and Saturday navigating through the Straight
1:40
Speaker 2: of horror moves according to some sources before almost nothing
1:44
Speaker 2: happening on Sunday, and unclear if anything has been happening
1:47
Speaker 2: in terms of traffic transitting today. But nonetheless, we do
1:53
Speaker 2: still have oil prices which were coming down to the
1:57
Speaker 2: tune of two and a half percent this morning, lighting
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Speaker 2: up a little bit. We're sitting at seventy five bucks
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Speaker 2: a barrel on that West Texas crude and equity markets
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Speaker 2: that so far as I can tail, no real reason
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Speaker 2: behind it, have started to sell off here. The SMP
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Speaker 2: now off four ten percent and the NASDAC off a
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Speaker 2: little bit more than one. We will continue to get
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Speaker 2: news about IPOs over the course of the next few weeks.
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Speaker 2: I believe that both Anthropic and Open AI are going
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Speaker 2: to be targeting in IPO and SpaceX, which conducted theirs
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Speaker 2: was it now two fridays ago? Tucker two fridays ago,
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Speaker 2: So a little bit over a week of trade or yeah,
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Speaker 2: just about a week of trading now sitting around where
2:43
Speaker 2: they opened that where they ended up closing that day
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Speaker 2: of the IPO. Their stock is sitting at one hundred
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Speaker 2: and sixty eight dollars per share now down nine percent today.
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Speaker 2: This thing has been extraordinarily volatile. Actually, no, not extraordinarily.
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Speaker 2: Extraordinarily would mean atypical, typically volatile for a large IPO
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Speaker 2: of this sort. Anything else catching your eye in markets
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Speaker 2: this morning, Paul?
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Speaker 4: Now, I think you hit on the major themes that
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Speaker 4: we're looking at.
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Speaker 2: Here as we heat up towards what many are calling
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Speaker 2: the affordability election this midterm season. There's a piece from
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Speaker 2: the Journal about American's economic anxieties. And we've heard pretty
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Speaker 2: consistently about people's views on the economy souring over the course,
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Speaker 2: especially of the last six years since COVID.
3:30
Speaker 3: The views on the economy have been.
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Speaker 2: Really abysmal, according to most surveys, according to some surveys,
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Speaker 2: worse than they have ever been.
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Speaker 3: And this one finds from the Journal.
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Speaker 2: Again, you know, some interesting information here, some less interesting information.
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Speaker 2: But one tidbit I thought was actually useful was when
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Speaker 2: they did this same survey of people who call themselves
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Speaker 2: upper class or upper middle class. Some eighty six percent
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Speaker 2: of that group said that they lack confidence that the
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Speaker 2: life for their children will be better than theirs had been,
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Speaker 2: and that's up from sixty four percent back in twenty nineteen.
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Speaker 2: So whenever we talk about these surveys, I always pooh
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Speaker 2: pooh them if there isn't historical context, and here is
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Speaker 2: one area where in fact, we do have some of
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Speaker 2: that historical context.
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Speaker 3: And by the way, this.
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Speaker 2: Permeates pretty much across the board of different classes of
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Speaker 2: wealth holders, but increasingly even those in the very high
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Speaker 2: end are saying that they're not optimistic about the future.
4:28
Speaker 2: And I guess I'm interested in your take on that,
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Speaker 2: because I don't think it's inflation realated.
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Speaker 5: No, it just seems like polling in general, from an
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Speaker 5: economic polling perspective in general, has just really been decimated
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Speaker 5: post COVID with the inflation run up that we saw
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Speaker 5: in twenty twenty two. Every single time like we cover,
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Speaker 5: whether it's consumer sentiment that is tracked by University of Michigan,
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Speaker 5: there has just been the greatest chasm between the financial
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Speaker 5: conditions of the moment versus the way people feel about
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Speaker 5: the economy. At a given point in time. And I'm
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Speaker 5: sure AI in this particular survey is one of the
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Speaker 5: culprits where you would imagine that many of the upper
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Speaker 5: income class people in this country are white collar workers
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Speaker 5: to some degree. And I do think that just anecdotally,
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Speaker 5: when you have conversations with a lot of people in
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Speaker 5: your orbit, or at least in mind, that AI looms
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Speaker 5: as a concern for people who do that type of work.
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Speaker 5: Is that going to replace going forward? Maybe that's what's
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Speaker 5: leading to some of the pessimism here that you have
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Speaker 5: in the polling. I think college degrees and the faith
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Speaker 5: behind that, that's another example of an area where people
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Speaker 5: are starting to more and more scrutinize whether or not
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Speaker 5: it's worth it. One third of middle class respondse said
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Speaker 5: a degree was worth the costs, with fifty six percent
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Speaker 5: saying it wasn't worth it. So I think those are
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Speaker 5: sort of the factors. I don't want to pin at
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Speaker 5: all on AI, but it seems like that's one of
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Speaker 5: the culprits as well as inflationary pressure too, is the
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Speaker 5: other one that seems to be kind of leading to
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Speaker 5: this pessimism, even though it's not reflected in the hiring numbers,
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Speaker 5: the consumer spending or anything else.
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Speaker 2: What's bothersome to me, too, is the increasing group of
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Speaker 2: people who just feel like the system is unjustly stacked
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Speaker 2: against them. And that was one piece that just I
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Speaker 2: can't really understand of this one. Some sixty five percent
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Speaker 2: of people in the most affluent classes say that America's
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Speaker 2: political and economic systems are stacked against people like me.
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Speaker 3: And look, I can kind of get that.
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Speaker 2: Statement if you've been you know, generation after generation in
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Speaker 2: the lower income threshold and you know, a young person
6:33
Speaker 2: unable to afford housing today. But if you are in
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Speaker 2: your fifties or sixties and you know, to be classified
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Speaker 2: as one of the more affluent groups here, I think
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Speaker 2: you've got to be earning more than six hundred thousand dollars.
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Speaker 2: I really have a tough time understanding how two thirds
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Speaker 2: of those people are telling me that the system stacked
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Speaker 2: against you. I mean, you know, maybe you you know,
6:55
Speaker 2: live in one of those very high income tax states
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Speaker 2: that have gone after millionaires or billions over the last
7:00
Speaker 2: few years. California feels like it's targeting billionaires. Massachusetts, New York,
7:05
Speaker 2: Rhode Island, all seemingly building tax laws to go after millionaires.
7:10
Speaker 2: But I mean federal tax rates are on the lower
7:15
Speaker 2: end of where they have been for the last thirty years, right,
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Speaker 2: wealth building among that group. You know, real estate prices
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Speaker 2: up extraordinarily over the last ten years. Stock stock prices
7:27
Speaker 2: up extraordinarily over the last ten years, And so, you know,
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Speaker 2: I can see how if you don't own stocks and
7:32
Speaker 2: don't own real estate, you might feel like the system
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Speaker 2: stacked against you.
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Speaker 3: If you're earning a million dollars a year.
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Speaker 2: In responding to the survey and telling me that the
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Speaker 2: system stacked against you, I don't know, man, I have
7:44
Speaker 2: a tough time buy in that one.
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Speaker 5: And the spending trends aren't reflecting that negative sentiment where
7:49
Speaker 5: we've talked about the one, or.
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Speaker 3: Maybe they are. Maybe it's, hey, the world's so screwed up,
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Speaker 3: I'm just going to.
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Speaker 4: Spend it now. Yeah, I guess so.
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Speaker 5: But you would think that when the actions that are
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Speaker 5: being backed by their wallet moving, it's like this spending
8:01
Speaker 5: has continued to be there. It's been extremely resilient during
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Speaker 5: this period time, which seems to run in the face
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Speaker 5: of all this pessimism. But maybe that is that they're
8:09
Speaker 5: just taking advantage of where they sit.
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Speaker 2: Now, let's take a quick break when we come back.
8:13
Speaker 2: We're playing a little bit of trivia when we return.
8:15
Speaker 2: And then home ownership costs, why are they quite as
8:19
Speaker 2: high as.
8:20
Speaker 3: We are seeing right now? In what are lawmakers talking
8:22
Speaker 3: about doing about it? That's next.
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9:48
Speaker 2: If you're browsing the Internet or social media today and
9:51
Speaker 2: see an advertised piece about why home ownership costs are
9:54
Speaker 2: so high, don't click it because it doesn't give you
9:56
Speaker 2: the answer.
9:57
Speaker 3: To the question.
9:58
Speaker 2: But Axios does lay out the question for you and
10:01
Speaker 2: gives you a bunch of context. They cover why it
10:03
Speaker 2: matters that homeownership costs are so high. They give you
10:05
Speaker 2: the big picture of how high those costs are. They
10:09
Speaker 2: zoom in on individual demos of where different homeownership costs are.
10:14
Speaker 2: They zoom back out for an overall national picture. They
10:18
Speaker 2: give the context of housing demand, but they don't actually
10:22
Speaker 2: answer why housing costs are so high. I mean, there
10:24
Speaker 2: are about a dozen different reasons that housing costs are
10:27
Speaker 2: so high.
10:28
Speaker 3: One of which is we didn't build any houses.
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Speaker 4: I think that's the thing. Almost the end all be on.
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Speaker 2: Pretty much the entire decade after the Great Financial Crisis
10:36
Speaker 2: because of a culmination of different reasons scarring from the
10:40
Speaker 2: Great Procession. You could argue that zoning rules and regulatory
10:45
Speaker 2: burdens are too high, that interest rates are too highly,
10:48
Speaker 2: all of those are contributing to housing affordability. One interesting
10:53
Speaker 2: piece of the article that I was reminded of is
10:55
Speaker 2: that there is a housing bill that may get voted
10:59
Speaker 2: on this week. Actually, the twenty first Century Road to
11:03
Speaker 2: Housing Act, which is it kind of came from the
11:07
Speaker 2: president's push to ban institutional investors from housing, and so
11:14
Speaker 2: that is included in this bill. There's some fifty odd
11:17
Speaker 2: measures that are going to be put into this bill.
11:20
Speaker 2: It's co sponsored by Elizabeth Warren and Tim Scott. I
11:23
Speaker 2: no insight as to whether or not it's going to pass,
11:25
Speaker 2: but again, big pieces in here. The institutional ban. It
11:31
Speaker 2: would restrict large institutional investors, which are defined as entities
11:35
Speaker 2: owning three hundred and fifty or more single family properties,
11:39
Speaker 2: from buying up additional family homes. It also took out
11:42
Speaker 2: some of the most burdensome stuff. I think it would
11:44
Speaker 2: have required them to sell those homes within seven years
11:47
Speaker 2: after building them. I think it took that piece out.
11:49
Speaker 2: They're talking about cutting some bureaucratic red tape, which I
11:52
Speaker 2: would be in favor of. They're talking about some changes
11:55
Speaker 2: to zoning and just how homes are made. They're talking
11:59
Speaker 2: about removing the dual staircase requirement, for instance, in multi
12:02
Speaker 2: family properties that is currently out there nationally. They're going
12:05
Speaker 2: to standardize some language on manufactured homes to treat them
12:09
Speaker 2: more like regular, you know, modular and built on site homes.
12:15
Speaker 2: And then there's some boosts to lending programs for smaller
12:19
Speaker 2: mortgages and low income projects and things like that. So
12:22
Speaker 2: we will see if this goes anywhere. I do not
12:25
Speaker 2: believe that the bill in and of itself is going
12:27
Speaker 2: to do anything to dramatically reshape housing affordability in the
12:31
Speaker 2: short term, because this is not a problem that can
12:34
Speaker 2: really be fixed in the short term. We have an
12:36
Speaker 2: undersupply of housing, right, you fix that by building more housing,
12:40
Speaker 2: and you can build my or housing over the long term.
12:43
Speaker 2: If you create the conditions for builders to profit from
12:46
Speaker 2: building more housing, that's really it, and everything else.
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Speaker 3: To me is a distraction.
12:51
Speaker 4: Right.
12:51
Speaker 2: I know, here in Boston we're talking about this fight
12:54
Speaker 2: looming over rent control, in New York, Mamdani is facing
12:58
Speaker 2: the same types of He wants more rent control. The
13:01
Speaker 2: owners of the properties are saying that sounds good, we
13:04
Speaker 2: can't fix anything on the existing ones, So he's trying
13:06
Speaker 2: to It's such a silly system, right, like, hey, rent control,
13:09
Speaker 2: we have it now. All the homeowners who owned those
13:12
Speaker 2: properties that under rent control are coming forward and saying
13:14
Speaker 2: we don't have enough rent. So he's talking about funding
13:17
Speaker 2: a pool of money to lend money to those rent
13:20
Speaker 2: control departments because they don't make enough profit full stop here,
13:26
Speaker 2: and that's not the only idea that's out there. He's
13:28
Speaker 2: also in negotiations with the Trump White House to build
13:31
Speaker 2: some pretty serious housing in Manhattan.
13:34
Speaker 3: But overall, the problem that we have with housing is
13:37
Speaker 3: that there's not enough of them.
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Speaker 5: How do you create conditions that would incentivize builders to
13:43
Speaker 5: make more of it? Is always what it comes back to,
13:45
Speaker 5: just skimming through the twenty first century Road to Housing Act.
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Speaker 5: I don't think there's enoughing here that really shakes that
13:53
Speaker 5: fundamental issue and the institutional investor restriction I've always scratched
13:57
Speaker 5: my head on. The ownership is just not nearly significant
14:00
Speaker 5: as people would think. When you look at it's a
14:02
Speaker 5: feel good measure, yeah, it is. It's a boogeyman measure.
14:06
Speaker 2: It's hey, we can point the blame on those guys, and.
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Speaker 4: Even though they're not a big part of the market.
14:12
Speaker 2: Shareeah, exactly, it's a populus measure that will get some cheers,
14:18
Speaker 2: but it's not going to be impactful.
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Speaker 3: It's not going to do anything.
14:22
Speaker 2: And they stripped out the most damning piece of it,
14:23
Speaker 2: which would have been pretty problematic in my mind, of
14:26
Speaker 2: requiring these institutional investors to actually divest of houses.
14:30
Speaker 3: Once they build them.
14:31
Speaker 2: So I'm glad they did away with that, but overall
14:34
Speaker 2: not impactful. But yeah, I mean, look, we have a
14:36
Speaker 2: big affordability problem with housing in this country. Part of
14:40
Speaker 2: it is due to the scarring of the Great Financial Crisis,
14:46
Speaker 2: but a lot of it is just the same mentality
14:49
Speaker 2: that we're seeing with everything else, which is I don't
14:51
Speaker 2: want it in my backyard. I don't want dense housing.
14:54
Speaker 2: We see it consistently voted down pretty much everywhere you look. Locally.
15:00
Speaker 2: Plenty of towns in Massachusetts where we broadcast the show
15:03
Speaker 2: from have rejected any sort of additional dense housing in
15:07
Speaker 2: their neighborhoods and so I think you can have that view, right,
15:13
Speaker 2: Like you can have the view that, hey, I don't
15:15
Speaker 2: want my community to have denser housing, I don't want
15:18
Speaker 2: more people around here, I don't want more multifamily.
15:21
Speaker 3: That's fine.
15:22
Speaker 2: Just you can't also complain about the high cost of
15:25
Speaker 2: housing if you're going to have that viewpoint, right, Like,
15:28
Speaker 2: I hear too much of the same people that are
15:30
Speaker 2: voting down denser housing voting in favor of rent control.
15:34
Speaker 2: And those are two viewpoints that if you hold in
15:37
Speaker 2: your head together, just don't make any sense together. And
15:39
Speaker 2: so yeah, we will see where that goes. But the
15:43
Speaker 2: other the other problem with all this backlash with nimbiism
15:48
Speaker 2: data centers. Nobody wants them in their backyards. So one
15:51
Speaker 2: company is talking about literally building in your backyards, which
15:56
Speaker 2: interesting approach here and again I've been talking a lot
15:59
Speaker 2: about the financial constructs of all this, right, Like, if
16:03
Speaker 2: you want to build a data center, you're gonna have
16:06
Speaker 2: to reward the community who allows for that big, ugly
16:12
Speaker 2: energy and water sucking vacuum into your community. And so
16:17
Speaker 2: one little company is talking about putting them mini data
16:20
Speaker 2: centers in everybody's backyard, which I checked out through the
16:22
Speaker 2: web over there. I checked out the website, Like, I'm
16:27
Speaker 2: all on board. If you pay me enough money, I
16:29
Speaker 2: will definitely add one next to my AC unit.
16:33
Speaker 3: Chuck.
16:33
Speaker 2: Chuck was very not in favor. No said he'll build
16:37
Speaker 2: a nuclear power in his backyard. He will not allow
16:39
Speaker 2: a data center his backyard.
16:41
Speaker 1: Wow.
16:41
Speaker 2: Not sure what Yeah, pretty interesting take. But I don't
16:47
Speaker 2: think this is actually going to work. I'll just I'll
16:50
Speaker 2: just put it out there. Like, No, I don't know
16:52
Speaker 2: enough about computing capacity and the efficiencies that are gained
16:57
Speaker 2: by putting it all in one place, But I tend
17:01
Speaker 2: to think there's probably some efficiencies by building a giant
17:06
Speaker 2: data center the size of Manhattan and doing it all
17:09
Speaker 2: in one place, rather than building three thousand data centers
17:13
Speaker 2: across different developments in the country and plugging in there.
17:17
Speaker 2: But the argument they're making is, Hey, one of the
17:20
Speaker 2: real big roadblocks we're getting here is taking up new
17:26
Speaker 2: real estate, taking up new infrastructure, and you know, getting
17:30
Speaker 2: capacity on the grid. So if we just you know,
17:35
Speaker 2: pay people to build them in their backyards, a little
17:38
Speaker 2: modular data center. And I think I saw some of these,
17:40
Speaker 2: weren't they the size of like an AC unit or so,
17:43
Speaker 2: did you see them, Tucker.
17:44
Speaker 6: I'm looking at it right now.
17:46
Speaker 3: Yeah, pretty flat. Actually.
17:48
Speaker 2: So the idea here is, hey, we plug into your
17:51
Speaker 2: existing infrastructure. You've already got high speed internet, you've already
17:54
Speaker 2: got an electricity hookup, and by the way, you don't
17:57
Speaker 2: use the peak electricity that your home could support, and
18:00
Speaker 2: so we're going to take advantage of that with a
18:02
Speaker 2: tiny little data center. Again, somebody who's probably better at
18:05
Speaker 2: electrical engineering and computing can tell me why this actually
18:09
Speaker 2: makes sense. But I don't know that it's actually going
18:12
Speaker 2: to go anywhere. But yeah, sign me up. If you
18:15
Speaker 2: pay my you know, half of my electricity bill and
18:19
Speaker 2: my full internet bill, I will put one of your
18:21
Speaker 2: data centers in my backyard, and you know, I will
18:25
Speaker 2: gladly move on from that one.
18:26
Speaker 3: But I don't know.
18:28
Speaker 5: It's a real innovative approach. But it's that's hard to
18:31
Speaker 5: scale up. I mean, give them all the credit of
18:32
Speaker 5: the world for trying to look at this from a
18:34
Speaker 5: different prison, but not easy to kind of get the
18:37
Speaker 5: boots on the ground and get that incorporated all across
18:39
Speaker 5: the country.
18:40
Speaker 4: Yeah.
18:40
Speaker 2: Nonetheless, Yeah, we are seeing a lot of pushback against
18:44
Speaker 2: building these data centers, which you know, if.
18:47
Speaker 3: You'd really believe this is an arms race between US
18:49
Speaker 3: and China.
18:50
Speaker 2: Puts US at a disadvantage because they are not going
18:52
Speaker 2: to have any of those problems.
18:54
Speaker 3: Building data centers.
18:55
Speaker 2: Markets remain in mixed territory. We'll have a full recap
18:58
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19:36
Speaker 6: within two months. Right now, the Dow is up a
19:39
Speaker 6: third of a percent, SMP five hundred down about a
19:42
Speaker 6: third of percent, Nasdaq selling off by one percent. We'rerussell
19:46
Speaker 6: two thousand is up over half a percent, Tenure treasure
19:49
Speaker 6: yield up four basis points at four point four to
19:52
Speaker 6: nine percent, and oil is down over two and a
19:56
Speaker 6: half percent, rating at seventy four dollars a barrel. Some
20:01
Speaker 6: acquisition news this morning after ABVI confirmed it will acquire
20:04
Speaker 6: biotech firm Apog Therapeutics and a ten point nine billion
20:09
Speaker 6: dollar deal in an effort to accelerate abvi's presence in
20:12
Speaker 6: the respiratory space. ABV up by six percent, while APOG
20:16
Speaker 6: shares are surging forty six percent. Meanwhile, SpaceX is on
20:20
Speaker 6: pace to decline for its third straight session, down eight
20:25
Speaker 6: percent today. Elsewhere, Getty Images is seeing its stock rocket
20:29
Speaker 6: one hundred and twenty eight percent after the company announced
20:33
Speaker 6: an agreement with OpenAI. Mic Run Technology is up by
20:36
Speaker 6: four percent after this semiconductor company received two price target
20:41
Speaker 6: hikes from Bernstein and Need Them. And former Federal Reserve
20:46
Speaker 6: Chairman Alan Greenspan has died at the age of one hundred.
20:51
Speaker 6: I'm Tucker Silva and that is Wall Street. Watching the
20:53
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20:56
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21:15
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21:26
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21:30
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22:46
Speaker 3: Where do you want to go next?
22:47
Speaker 2: Paul, I don't know anyone that's stressing out over whether
22:50
Speaker 2: or not their index fund has SpaceX, so I'm not
22:53
Speaker 2: sure I'm willing to talk about it. Do you know
22:55
Speaker 2: anybody stressing out about whether or not there index fund
22:58
Speaker 2: contains no sex.
23:00
Speaker 5: I think it's only an interest for people who own
23:02
Speaker 5: SpaceX that are hoping that that would be an additional
23:05
Speaker 5: catalyst for more shares to be bought, and the S
23:07
Speaker 5: and P five hundred, it is at least worth noting
23:09
Speaker 5: for listeners out there. Did come out and say that
23:12
Speaker 5: they are not going to add SpaceX into the S
23:14
Speaker 5: and P five hundred until at least considering until least
23:17
Speaker 5: twenty twenty seven. There was some rumors percolating that they
23:20
Speaker 5: perhaps may relax their guidance because typically the SMP standards,
23:24
Speaker 5: it takes a year before they're willing to incorporate a
23:26
Speaker 5: newly public company. There has to be a certain amount
23:29
Speaker 5: of shares available, as well as some profitability measures that
23:33
Speaker 5: none of which SpaceX would hit, so they're not going
23:36
Speaker 5: to be included there. So that's the only thing of
23:38
Speaker 5: note to touch on with space.
23:40
Speaker 2: Which is again, as Paul mentioned, that is how it's
23:42
Speaker 2: generally done by indices as they consider new inclusions, they
23:46
Speaker 2: have a bunch of requirements. They have to be trading
23:48
Speaker 2: for this long, they have to be profitable for this long.
23:50
Speaker 2: They have to be a certain amount of float, meaning
23:52
Speaker 2: a certain portion of their shares actually up for sale.
23:55
Speaker 2: A number of indices did away with those standards for SpaceX,
23:58
Speaker 2: specifically Global did not, so it is a little bit
24:03
Speaker 2: tricky now when you look at different large cap us
24:06
Speaker 2: DOC funds, some might include it, some may not. Nonetheless
24:10
Speaker 2: don't I don't know of a lot of people that
24:12
Speaker 2: are losing their sleep.
24:13
Speaker 3: Over that one.
24:14
Speaker 5: Given its size, it would be a big part of
24:15
Speaker 5: the S and P five hundred, but those concerns are
24:18
Speaker 5: not something to be worried about it.
24:19
Speaker 2: What would also be interesting is if they end up
24:21
Speaker 2: merging with Tesla, which has been rumored for quite some time.
24:24
Speaker 3: Then does it get included? Does it not an entirely
24:27
Speaker 3: new entity that would be an even more massive portion
24:31
Speaker 3: of the overall index? This next one I did have
24:35
Speaker 3: to cover.
24:35
Speaker 2: So we've talked a lot about the wild West of
24:38
Speaker 2: futures markets recently, and polymarket is one of those key players.
24:43
Speaker 2: Even though they've been banned from letting US users trade
24:47
Speaker 2: on their website since twenty twenty two. Still, I mean, heck,
24:51
Speaker 2: I cite Polymarket odds sometimes on the program. They are
24:55
Speaker 2: prominent and they're being accused of some very deceptive market
25:00
Speaker 2: which it's again from the reference of our own industry Pall.
25:04
Speaker 2: I just find a bit shocking because when it comes
25:07
Speaker 2: to advertising for financial products, there are such strict rules
25:11
Speaker 2: that are out there, right, there's this requirement, especially for
25:14
Speaker 2: firms that are regulated by the SEC, to provide fair
25:18
Speaker 2: and balanced marketing.
25:19
Speaker 3: And I even think of there's a rule out there.
25:23
Speaker 2: For example, if you're a financial advisor and you want
25:25
Speaker 2: to have reviews of your business, you have to come
25:30
Speaker 2: up with this complex methodology that ensures that you ask
25:33
Speaker 2: every client for a review, not just the ones that
25:35
Speaker 2: you know are going to give you a good review
25:38
Speaker 2: like you get from the apps on your smartphone. Right
25:41
Speaker 2: when you use an app on your smartphone, what happens.
25:43
Speaker 2: It pops up and says, hey, are you enjoying this thing?
25:46
Speaker 2: And if you click yes, it says great, leave us
25:47
Speaker 2: a review, And if you click no, it says, oh,
25:49
Speaker 2: could you tell us a little bit about why you're
25:51
Speaker 2: not experiencing it. We don't want you to review us,
25:52
Speaker 2: We want you to tell us. In the case of
25:55
Speaker 2: poly Market, they're going well beyond that.
25:58
Speaker 1: Right.
25:59
Speaker 3: So, the whilst your journal reviewed more than eleven hundred.
26:03
Speaker 2: Videos made by ten of poly markets more than one
26:06
Speaker 2: hundred creators. In seventy percent of the videos, creators appeared
26:13
Speaker 2: to place a bet on websites that looked identical to
26:16
Speaker 2: Polymarket but were actually dummy sites that the company used
26:19
Speaker 2: to film fake traits. Yikes like that is so incredibly deceptive.
26:28
Speaker 2: Many of the creators didn't disclose that they were being
26:30
Speaker 2: paid by poly Market until the journal reached out. About
26:33
Speaker 2: ten percent of the videos went further than that, adding
26:35
Speaker 2: outdated footage or fake headlines to imply that they won
26:39
Speaker 2: their bets. Those same videos depicted creators winning almost nine
26:43
Speaker 2: hundred thousand dollars. Like, this is the type of stuff
26:47
Speaker 2: where while I'm generally in favor of deregulation, this is
26:52
Speaker 2: clearly getting to a point where it is highly deceptive
26:57
Speaker 2: and just playing into people's you know, addictions, their psychological addictions.
27:02
Speaker 2: And you know, we don't see this happening from betting,
27:06
Speaker 2: you know, sports betting websites, they're not doing this sort
27:09
Speaker 2: of thing. But instead you have these wild West futures
27:14
Speaker 2: markets that are just not really regulated by anybody and
27:17
Speaker 2: are I don't remember if it was Polymarket or Calshi,
27:21
Speaker 2: but one of them also aired an ad recently, and
27:24
Speaker 2: by recently I mean within the last couple of years,
27:27
Speaker 2: with the message being somebody who can't afford to pay
27:30
Speaker 2: their rent placing a bet on one of these sites
27:32
Speaker 2: in order to be able to pay their rent. Ooh, Like,
27:35
Speaker 2: that is not a great message that I think regulators
27:39
Speaker 2: or the general public should put up with.
27:41
Speaker 5: Yeah, it always seems like technology outpaces regulation, and it
27:45
Speaker 5: feels like for the last few years that these companies
27:48
Speaker 5: have embodied that, where they've taken advantage of their ability
27:51
Speaker 5: to utilize the futures market. But it seems like the
27:56
Speaker 5: futures market or the oversight around it has been asleep
27:58
Speaker 5: at the switch or slow to act to come out
28:00
Speaker 5: and go after them. Now it seems like there's momentum
28:04
Speaker 5: rising towards that sort of moment of reckoning. But some
28:07
Speaker 5: of these practices, as much as I'm in favor of
28:10
Speaker 5: deregulation too, do scream that perhaps there should be a
28:14
Speaker 5: little bit more regulation there. You had some of the
28:15
Speaker 5: stories of presidential not president political candidates betting on themselves
28:19
Speaker 5: to run in an election, and the inside of training
28:21
Speaker 5: instances and manipulation. To me, as someone who sits in
28:26
Speaker 5: a job that we are heavily overseen in terms of
28:28
Speaker 5: any trades that we make on a much smaller level.
28:31
Speaker 2: And by the way, I think that's appropriate, right, Like,
28:33
Speaker 2: when you are in charge of handling somebody's money, the
28:36
Speaker 2: rules should be pretty steep.
28:38
Speaker 3: Yeah, the penalty should be pretty steep, right, Like, that's
28:41
Speaker 3: pretty reasonable in my mind.
28:42
Speaker 2: You should be treated differently than an app provider, You
28:46
Speaker 2: should be different treated differently than a car dealership.
28:49
Speaker 3: Like those are reasonable scales here that.
28:52
Speaker 2: Yeah, when you're in charge of somebody's entire financial future,
28:55
Speaker 2: you should be held to a pretty high standard. And
28:57
Speaker 2: more and more sites like this are are at least
29:01
Speaker 2: trying to convey that they are of that scale, and
29:05
Speaker 2: they're doing so with some.
29:08
Speaker 3: Seemingly false advertising, which is concerned.
29:11
Speaker 5: They're just trying to get big enough to a point
29:12
Speaker 5: where they are going to break some rules along the way.
29:16
Speaker 4: But it just seems like they're throwing.
29:18
Speaker 3: All row fast break stuff and then you'll have enough
29:21
Speaker 3: money to fight.
29:21
Speaker 4: The yees actually borosity, yep, yep.
29:23
Speaker 3: Let's take quick break when we come back. Stack Roulette
29:26
Speaker 3: is next.
29:27
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30:11
Speaker 3: Time for a bit of stackerw Let hear Paul, what
30:15
Speaker 3: do you have to kick things off for us?
30:17
Speaker 4: Today, Mike.
30:18
Speaker 5: Apparently gen Z would rather not date at all than
30:22
Speaker 5: pay two hundred and fifty dollars for dinner and drinks.
30:26
Speaker 5: This comes from Bloomberg where I don't know why Bank
30:29
Speaker 5: of America is doing a survey on this, but they
30:32
Speaker 5: are doing a survey that found that fifty one percent
30:35
Speaker 5: of Americans between the ages of eighteen and twenty nine
30:38
Speaker 5: reported spending zero dollars on dates in a month during
30:43
Speaker 5: the year twenty twenty six. One of the participants interviewed here,
30:48
Speaker 5: a Brett Gaffney, stated that when money is too tight,
30:52
Speaker 5: they want to go on He wants to go on
30:54
Speaker 5: fewer dates. It's not because he can't, it's rather, it's
30:58
Speaker 5: because he can't buy things that he needs for his
31:00
Speaker 5: day to day life.
31:02
Speaker 4: Scratch him a head a little bit here.
31:05
Speaker 3: I'm all for I can't appreciate broke twenty somethings.
31:08
Speaker 5: I can appreciate that, But I find that claiming that
31:12
Speaker 5: gas prices and some of these other factors of price
31:16
Speaker 5: increases are limiting them from being involved in the dating pool,
31:19
Speaker 5: to me, seems a little far fetched. Two hundred and
31:22
Speaker 5: fifty dollars for a date. I know this guy lives
31:25
Speaker 5: in the La area. Brett Gaffney, he estimates that's what
31:28
Speaker 5: it costs.
31:28
Speaker 3: So you got to rent a Lamborghini for the night.
31:31
Speaker 3: That's not cheap.
31:32
Speaker 4: I just feel like if you just.
31:34
Speaker 5: Did drinks, whether it's at a coffee shop or a
31:38
Speaker 5: local bar, that you could do less than two fifty.
31:42
Speaker 3: But clearly been out of the dating scene for a while,
31:44
Speaker 3: Paul I have.
31:45
Speaker 5: But Brett apparently says Brett Gaffney that it's two hundred
31:49
Speaker 5: and fifty bucks. I guess that's a dinner date. But Brett,
31:52
Speaker 5: there's these other dates that you could have that may
31:55
Speaker 5: cost less than that to keep your romantic left.
31:57
Speaker 2: You know. This reminds me remember nineteen ninety eight Half Baked. Yes,
32:02
Speaker 2: and I remember Half Baked Chappelle's date with the woman
32:07
Speaker 2: who's got like eight bucks to his name. They walk
32:09
Speaker 2: like eleven mile across New York City because he's got
32:13
Speaker 2: no money to his name. Yeah, I would imagine there
32:17
Speaker 2: is some way to have a cheaper than two hundred
32:19
Speaker 2: and fifty dollars date. Maybe Breath's just trying to impress
32:22
Speaker 2: the ladies a little bit too much. I think there's
32:24
Speaker 2: ways to pull it off at not quite two hundred
32:28
Speaker 2: and fifty.
32:28
Speaker 4: With the nicer weather.
32:29
Speaker 5: Outdoor activities usually don't have the same kind of costs.
32:33
Speaker 5: You know, go to the beach if you're in the
32:35
Speaker 5: LA area.
32:35
Speaker 2: Or dating advice from three guys who've been married for
32:40
Speaker 2: me over a decade and haven't been dating in quite
32:43
Speaker 2: some time. So, yeah, don't I don't know how to
32:45
Speaker 2: do it for less than two hundred and fifty dollars.
32:47
Speaker 3: But I assure you have to be there.
32:49
Speaker 5: There are ways to do and if it goes up
32:51
Speaker 5: to two fifty, then it probably means you had a
32:53
Speaker 5: good date.
32:53
Speaker 3: Wasn't this the whole promise of online dating, the whole
32:56
Speaker 3: purpose right right? I don't need any money. I could
32:59
Speaker 3: just do it for free on these crappy services that
33:04
Speaker 3: seem to make everybody pair up.
33:07
Speaker 2: I would like to talk about this piece from the
33:11
Speaker 2: bloomy Berg about Amazon and their upcoming Prime Day. So
33:15
Speaker 2: Prime Day is coming up? When tomorrow? Yeah, it's tomorrow? Yes, Wow,
33:21
Speaker 2: nobody cares about Prime Day.
33:22
Speaker 4: It's it's luster.
33:23
Speaker 3: I feel like, yeah, most certainly has lost its. My
33:26
Speaker 3: wife still sends.
33:27
Speaker 4: Three days, it's longer.
33:30
Speaker 3: June twenty six.
33:31
Speaker 2: My wife always sends me dozens of things that we
33:33
Speaker 2: need to purchase on Amazon on Prime Day week, and like,
33:36
Speaker 2: none of them seem relevant to me, but we always
33:38
Speaker 2: do talk about it. And the author here is making
33:42
Speaker 2: an argument that Amazon should share all this information they
33:46
Speaker 2: get from Prime Day, and I really looked through it
33:50
Speaker 2: and did not come up with one compelling reason that
33:52
Speaker 2: Amazon should share any of that. I mean, she points
33:55
Speaker 2: to some arguments like, oh, we could learn so much
33:57
Speaker 2: more about the consumer and their state of mind and
34:01
Speaker 2: all of that. I'm like, how does any of that
34:03
Speaker 2: benefit Amazon? Right, Like, it's Amazon's proprietary data. They are
34:08
Speaker 2: a for profit corporation. Last time I checked, they are
34:12
Speaker 2: not in the mission. Their state of mission is not
34:14
Speaker 2: to benefit the Federal Reserve or economic societies. And even
34:18
Speaker 2: if you did get a release of Amazon's proprietary data
34:23
Speaker 2: on how sales had changed year over year and what
34:26
Speaker 2: people were shopping for, I don't know what you, as
34:29
Speaker 2: an economist would do with that information.
34:32
Speaker 4: No, that's what the public.
34:33
Speaker 5: You know, data reserves are meant for retail sales and
34:36
Speaker 5: all these other items that try to capture some of
34:38
Speaker 5: this information. If you're a business, now your ultimate advantage
34:42
Speaker 5: is your data. Like that's becoming more and more of
34:44
Speaker 5: the case. So the fact that give it away for.
34:46
Speaker 4: Free, yeah, it's just it's absolute pie in the sky.
34:50
Speaker 2: So the last time that Amazon tried to become more
34:53
Speaker 2: transparent was about a year ago, a year ago, a
34:55
Speaker 2: little bit more than a year ago. What they tried
34:57
Speaker 2: to do was start putting the terrific impact on individual
35:01
Speaker 2: tickets and showing you, hey, when I'm shopping for that
35:04
Speaker 2: beach ball, what portion of this five dollars price is
35:07
Speaker 2: going to be going towards tariffs?
35:10
Speaker 3: And you know what happened? Nothing good.
35:13
Speaker 2: They immediately drew the hour of the president in the
35:15
Speaker 2: White House. They had to backtrack, Bezos had to get
35:18
Speaker 2: back involved as chairman of the board and tell the
35:20
Speaker 2: CEO to yank that idea quicker than you could possibly imagine.
35:24
Speaker 2: And so if you start reporting in detail about your sales,
35:27
Speaker 2: one of the things that's going to come up is
35:29
Speaker 2: the tariff impact and how much prices are up here
35:31
Speaker 2: over year.
35:32
Speaker 3: And guess who's not going to like that very much?
35:34
Speaker 2: The sitting administration is not going to want to hear
35:38
Speaker 2: about how one company is drising prices on consumers.
35:40
Speaker 4: Like, was that transparency or scapegoating a little bit. I
35:44
Speaker 4: feel like there's plenty of both.
35:45
Speaker 3: Plenty of both.
35:46
Speaker 2: Yeah, like, hey, prices, we're going to be raising prices
35:49
Speaker 2: to you know, the living hell, and so let's go
35:52
Speaker 2: blame it on tariffs.
35:54
Speaker 3: Absolutely, that was a bit of scapegoating.
35:56
Speaker 2: But it was also just that terrible idea, like across
36:00
Speaker 2: the board, a bad idea that you absolutely should have
36:04
Speaker 2: known was going to draw the ire of the White
36:06
Speaker 2: House and caused you to immediately change course, no question.
36:10
Speaker 5: A quick piece that I'm going to throw in here
36:12
Speaker 5: on Stacuroulette is where has all the cottage She's gone?
36:15
Speaker 5: This was a piece here from the New York Times.
36:17
Speaker 5: And the only reason that I bring it up is
36:19
Speaker 5: that my wife came home from the grocery store one day.
36:22
Speaker 4: And ask you that question. No more or less.
36:25
Speaker 3: She goes, Paul, just covered in.
36:28
Speaker 5: Chunky cheese verbatim, said I got some good culture at
36:33
Speaker 5: the grocery store.
36:34
Speaker 4: I'm I'm so happy.
36:35
Speaker 3: And I said, some good culture at the That's how
36:38
Speaker 3: the kids are talking these days, Paul.
36:40
Speaker 4: No, No, that's the name of the cottage cheese brand.
36:41
Speaker 3: Oh good culture.
36:42
Speaker 5: Yes, But I sat and have the reaction you did.
36:45
Speaker 5: I said, what are you talking about. So she goes,
36:49
Speaker 5: it's the cottage cheese that I've been looking for. They
36:51
Speaker 5: are the newcomer based out of Texas. They've seen their
36:54
Speaker 5: sales quadruple in the past three years, reaching two hundred
36:57
Speaker 5: million in retail sales. And it piggybacks the story in
37:00
Speaker 5: the New York Times where cottage cheese through TikTok and
37:03
Speaker 5: other meats has exploded wildfire everyone because of the protein
37:07
Speaker 5: associated with it. I guess my wife included, has been
37:10
Speaker 5: suckered in on the cottage cheese train, which has become
37:13
Speaker 5: incredibly popular, and there's shortages all over the country.
37:16
Speaker 2: I mean, I could be wrong about this, but I
37:18
Speaker 2: don't think I've ever consumed anything other than Daisy brand
37:22
Speaker 2: cottage cheese or sour cream for that matter.
37:24
Speaker 3: So apparently watched hours on the way. Did it taste good?
37:28
Speaker 4: I don't need no, I don't. I barely go to
37:30
Speaker 4: the terrace.
37:32
Speaker 3: That milk's still going for fifteen bucks a gallon as
37:34
Speaker 3: far as it goes.
37:36
Speaker 2: Quick break for the rest of the day, but we
37:37
Speaker 2: will be back in twenty two hours here on the
37:40
Speaker 2: Financial Exchange.
37:41
Speaker 3: Have a great rest of afternoon. Everybody