Latest / The Financial Exchange Show / Anthropic’s AI Block Raises New Questions for Big Tech

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Anthropic’s AI Block Raises New Questions for Big Tech · The Financial Exchange Show

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Speaker 1: a donation today. This is the Financial Exchange with Chuck
1:06
Speaker 1: Zada and Mike Armstrong.
1:11
Speaker 2: It's Chuck, Mike and Tucker with you. Hope you all
1:13
Speaker 2: had a great weekend. If you haven't managed to catch
1:18
Speaker 2: any of the World Cup on TV, you gotta tell
1:22
Speaker 2: her you've been missing out. If you've missed out on
1:23
Speaker 2: the World Cup on social media, you've been missing out
1:27
Speaker 2: as well. The World Cup is just having a Here's
1:32
Speaker 2: what I'm really enjoying about. International visitors to the US
1:36
Speaker 2: are realizing how much they love the United States, and
1:40
Speaker 2: likewise United States citizens are realizing how awesome it is
1:45
Speaker 2: to have like giant throngs of people who are like
1:49
Speaker 2: obsessed with soccer just coming to party in their cities.
1:52
Speaker 2: It's it's been quite fantastic, if I may say so myself.
1:56
Speaker 2: If you haven't watched our shows based in Boston, and
1:58
Speaker 2: if you haven't seen the videos of the Scots basically
2:01
Speaker 2: taking Boston over, you're really doing yourself a disservice.
2:06
Speaker 3: They saw photos of them standing on each other's shoulders
2:09
Speaker 3: getting a peek in through the window to watch a
2:12
Speaker 3: game on the TV, just all sorts.
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Speaker 2: Of I mean, like it looked like they almost sunk
2:17
Speaker 2: a boat in Boston Harbor, like trying to reenact the
2:19
Speaker 2: Boston tea party makes sense. Uh, like they're they're they're everywhere, right.
2:24
Speaker 2: And then of course I don't know if you catched
2:26
Speaker 2: any caught any of the videos of the Dutch fans
2:30
Speaker 2: in Dallas who are just like taking over streets. There
2:35
Speaker 2: there was a duck with a Mexico jersey on good
2:38
Speaker 2: walking somewhere. I don't know where, but I've duck. Yes,
2:43
Speaker 2: it was. It was a live duck wearing a Mexico
2:45
Speaker 2: It was like someone's pet that they were walking. So
2:48
Speaker 2: it's it's been great. And on the news of the
2:50
Speaker 2: World Cup stocks are rallying. They're actually rallying because of
2:54
Speaker 2: optimism surrounding, uh, maybe a potential normalization of the straight
2:59
Speaker 2: of hormones and things a little along those lines. Following
3:01
Speaker 2: a preliminary signing yesterday in advance of what's expected to
3:06
Speaker 2: be a signing of the Memorandum of Understanding between the
3:10
Speaker 2: US and Iran to open a sixty day negotiating period
3:14
Speaker 2: this Friday, we still are not really seeing much traffic
3:17
Speaker 2: through the straight ofform moves at the moment. A couple
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Speaker 2: ships here and there that have passed through. But just
3:21
Speaker 2: to give you a sense, of where things are. Marisk
3:24
Speaker 2: who's one of the three biggest shippers in the world,
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Speaker 2: effectively said they're not making any changes to their operations
3:32
Speaker 2: at the moment. They are waiting to see how things
3:35
Speaker 2: play out. But markets not waiting to see how things
3:37
Speaker 2: play out. Markets are saying, yep, we're all good to
3:40
Speaker 2: go on this, and hopefully that's the case. Hopefully we
3:43
Speaker 2: get things spooled up quickly enough to minimize any further
3:46
Speaker 2: damage as a result of it. Where we sit now,
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Speaker 2: the S and P's up one hundred and twenty six
3:52
Speaker 2: points about one point seven percent. Dow is up six
3:55
Speaker 2: hundred and three points about one point two percent, in
3:57
Speaker 2: the NASDAK composite is up six hundred eighty three points
4:00
Speaker 2: about two point six percent, So all major US in disease.
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Speaker 2: In the green tenure Treasury not moving a ton, down
4:07
Speaker 2: two point four basis points, was down as much as
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Speaker 2: five point five earlier, so ten you're not moving very much.
4:14
Speaker 2: Dollar Index is off point two nine percent to ninety
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Speaker 2: nine forty six. Gold is rallying strongly though, up four
4:21
Speaker 2: one hundred and forty one announced to forty three seventy nine.
4:24
Speaker 2: And you've got crude oil West text INERMDIA down four
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Speaker 2: to forty five a barrel to eighty forty three triple a.
4:30
Speaker 2: National avatur gas prices dipped another point nine cents overnight
4:35
Speaker 2: to four oh six and five tents. So well, everyone
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Speaker 2: was focused on, uh, you know, the the Middle East
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Speaker 2: and kind of what things looked like they're coming into
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Speaker 2: this week very uh sneaky. Big news story that came
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Speaker 2: out over the weekend Anthropic who's one of the two
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Speaker 2: biggest standalone AI plays in the world along with Open Ai. Yeah,
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Speaker 2: and I.
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Speaker 3: Most experts that I'm talking to are deeming them as
5:09
Speaker 3: the leader in the most advanced models.
5:11
Speaker 2: But like in terms of just like not just the
5:13
Speaker 2: most advanced, because like Beta Max was better than vhs,
5:16
Speaker 2: but they never sold any of them, yep, except in
5:18
Speaker 2: my dad who had a Beta Max Max. He did,
5:21
Speaker 2: he lost that one. He actually had really bad luck
5:24
Speaker 2: with av purchases.
5:25
Speaker 3: And they still talk about it and bemoan the fact
5:27
Speaker 3: that it was better than everything else.
5:29
Speaker 2: No. No, but like we also had a laser disc
5:32
Speaker 2: player growing up, and like those were gonna be the
5:35
Speaker 2: big things and in every eighth grade science teacher, and
5:39
Speaker 2: then the DVD player came around and you know, he
5:41
Speaker 2: ate its lunch, but it's it's fine. So Anthropic here's
5:45
Speaker 2: the deal. They have these models that they rolled out
5:48
Speaker 2: one of them publicly, the other one not publicly. Mythos
5:51
Speaker 2: was the one that they restricted the use of to
5:54
Speaker 2: just a handful of companies. And then last week they
5:57
Speaker 2: rolled out what they called the Fable five model to
6:01
Speaker 2: paying customers to basically try out for a couple of weeks,
6:05
Speaker 2: with the promise that as their compute capacity improved, they'd
6:09
Speaker 2: be able to roll it out more permanently. I'm gonna
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Speaker 2: quote here from Bloomberg just because again this is kind
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Speaker 2: of wild. Here, the extraordinary move by the US to
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Speaker 2: bar foreign access to Anthropic PBC's best AI models underscores
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Speaker 2: the Trump administration's newfound willingness to exert control over pivotal industry.
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Speaker 2: So basically, the US said, you can't have any foreign
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Speaker 2: nationals using this, which Anthropic then said, but we don't
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Speaker 2: know like that someone in the US isn't a foreign
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Speaker 2: national using it, so we have no doing. These models
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Speaker 2: aren't available anywhere. And there's a few different takeaways from this,
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Speaker 2: because this is this is a huge deal. Yes, this
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Speaker 2: is a huge deal because a few different things. Number One, anthropic.
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Speaker 2: Over the last I don't know, year to year and
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Speaker 2: a half, they have been the AI company that has
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Speaker 2: been most pronounced about, running around saying, hey, we're developing
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Speaker 2: this technology, but we think it could kill us all.
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Speaker 2: Like the CEO, Dario Amode, has been really outspoken like, hey,
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Speaker 2: I need more regulation in this industry because otherwise we're
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Speaker 2: all gonna die.
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Speaker 3: Yep, he's called for a pause and development. He's again,
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Speaker 3: whether genuine or not, I think, has been more publicly
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Speaker 3: cautious about the development of AI and more concerned about
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Speaker 3: the public impact.
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Speaker 2: So that's number one. And Dario after this came out,
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Speaker 2: was like, oh, I can't believe like this happened. It's like, dude,
7:40
Speaker 2: you can't go running around saying you need more regulation
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Speaker 2: and then when you get regulated, just not in the
7:45
Speaker 2: way that you like, be like no, that's not what
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Speaker 2: I meant.
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Speaker 3: Yeah, but it was pretty new at the job, so yeah, well, okay,
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Speaker 3: he might be new at the job, but like he's
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Speaker 3: new in terms of leading one of the most influential
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Speaker 3: companies in the world.
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Speaker 2: Anybody would be. But like that that you know, he's not.
8:05
Speaker 2: I mean, that's fine, but the guy's been in the
8:07
Speaker 2: tech industry for like fifteen years now, yep, and like
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Speaker 2: he's no dummy obviously. Sure, So that's part number one.
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Speaker 2: Part number two. I've never seen the US government look
8:23
Speaker 2: to regulate and control how a certain entity or group
8:28
Speaker 2: of entities operates the same way that I'm seeing with this.
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Speaker 3: I was trying to think of the comparison points here.
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Speaker 3: You know, it's a.
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Speaker 2: They must think that whatever is going, whatever they're actually seeing,
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Speaker 2: they have to be nervous about. It's akin to.
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Speaker 3: The types of restrictions we attempted to place on nuclear
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Speaker 3: technology and the forties, fifties, and sixties.
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Speaker 2: Whatever they're seeing they have to be nervous about. So, like,
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Speaker 2: this goes beyond just marketing from anthropic you know, because
9:01
Speaker 2: again they've been out there being like, oh, like mythos
9:03
Speaker 2: is like a real threat right here we've defended. Okay,
9:06
Speaker 2: like I've said all along, like, yes, part of that
9:08
Speaker 2: can be marketing. But when the US government is saying no,
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Speaker 2: you can't have any foreign nationals using this, I sit
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Speaker 2: there and go, Okay, it's not just hype. Like the
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Speaker 2: US government does not want to play into the hype
9:20
Speaker 2: right on this. The next piece that's really interesting to
9:25
Speaker 2: me is if you are a let me even go before.
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Speaker 2: The way the US government is trying to regulate this
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Speaker 2: is at the model layer. We're regulating the models you
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Speaker 2: can't use this model instead of you can't use this
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Speaker 2: model when applied to X, Y or z, I.
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Speaker 3: Meaning they have no means to apply it to X,
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Speaker 3: Y or Z for the moment.
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Speaker 2: But the downside to regulating it that way. Let's say
9:56
Speaker 2: that you're a company that's depending on these models to
9:58
Speaker 2: run your business. If the US government can come in
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Speaker 2: and just say that doesn't exist anymore, why am I
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Speaker 2: going to choose that model or suite of models for
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Speaker 2: my business knowing that at the snap of a finger
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Speaker 2: they can shut it down. It can be shut down
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Speaker 2: and I can no longer and I might no longer
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Speaker 2: have access to the tools needed to run my business.
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Speaker 3: Well, I'll also say I can't imagine this can last long.
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Speaker 3: Familiar with the idea of multiple discovery that independently across
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Speaker 3: the globe, when scientific breakthroughs happen at the same time,
10:34
Speaker 3: you know, even with people not coordinating with each other,
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Speaker 3: I'm pretty certain that there is another research lab somewhere
10:40
Speaker 3: in the world that is going to create something that
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Speaker 3: is ninety percent as powerful as anthropics mythos pretty soon.
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Speaker 2: And yes, I buy.
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Speaker 3: That the government, the US government has legitimate concerns that
10:53
Speaker 3: this could be used for very bad purposes. It can
10:56
Speaker 3: also be used to harden systems and you know, do
11:00
Speaker 3: good things with it for US users.
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Speaker 2: But that would be my.
11:04
Speaker 3: Point is you cannot delay this for a very long
11:07
Speaker 3: time because something else is going to come around that
11:09
Speaker 3: is going to be able to do a lot of
11:10
Speaker 3: the same things, and you don't want it to be,
11:13
Speaker 3: for instance, at the hands of a Chinese tech company.
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Speaker 2: So I do think that the question that's out there
11:19
Speaker 2: for any company now is okay, like the US government
11:25
Speaker 2: never regulated US from using excel, right, but they are
11:31
Speaker 2: willing to do so here because there's something that they
11:33
Speaker 2: see that is problematic. How do you build your business
11:41
Speaker 2: structure around a product they can be taken away at
11:46
Speaker 2: the drop of a hat, and in doing so, does
11:50
Speaker 2: that then jeopardize the AI buildout because companies will be
11:55
Speaker 2: hesitant to commit to it not knowing whether that tool
11:59
Speaker 2: will be available long term. It.
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Speaker 3: Yeah, I don't have an answer that question, Chuck. I
12:07
Speaker 3: don't as a business you might be willing to roll
12:09
Speaker 3: the dice on that it's a big because it's it's
12:12
Speaker 3: it is that.
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Speaker 2: Much more powerful.
12:13
Speaker 3: And you know, I think probably in the next few
12:16
Speaker 3: weeks the government will come out with assurances and hold
12:19
Speaker 3: harmlesses with anthropots to say okay, you can you can
12:22
Speaker 3: use it with these customers and here's how you verify.
12:26
Speaker 2: But you're right, there is going to be.
12:28
Speaker 3: Some clinging, uh, you know, in the back of your mind,
12:31
Speaker 3: concerned that hey, this could just disappear tomorrow.
12:33
Speaker 2: Just take a quick break. When we return.
12:36
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14:11
Speaker 2: By the way, we get a text when we were
14:13
Speaker 2: talking about the uh the anthropic products that have basically
14:19
Speaker 2: been shut down over the weekend because the US government
14:22
Speaker 2: has said, hey, we don't want any foreign nationals, you know,
14:25
Speaker 2: using these text or text in. Someone put fable five
14:28
Speaker 2: on GitHub. That's how locals use. If one is truly
14:31
Speaker 2: building with AI, local source is the only secure way.
14:34
Speaker 2: This has been proven countless times already with API access changes,
14:37
Speaker 2: et cetera. Correct. This is where you ultimately end up
14:41
Speaker 2: is you say, Okay, I need an open source model
14:45
Speaker 2: that I'm hosting locally in order to be able to
14:49
Speaker 2: have access to it. Rather than a centrally weighted model
14:54
Speaker 2: held by a company operated you know, off site. You
14:59
Speaker 2: don't know like what you're going to be able to
15:01
Speaker 2: do with that going forward. Locally hosted, open source, open
15:05
Speaker 2: weight models are where the business is going to go then,
15:09
Speaker 2: And here's the problem with that from a data center
15:11
Speaker 2: build out perspective. It doesn't work with the amount of
15:15
Speaker 2: money that we're spending on data centers.
15:20
Speaker 3: Oh man, this is who is the company that was
15:22
Speaker 3: building the chips for the It was a Dell that
15:25
Speaker 3: was building the chips for the AI laptops.
15:30
Speaker 2: Oh, I don't know, I don't remember, but yeah.
15:32
Speaker 3: I mean this does not work very well from a
15:36
Speaker 3: cost structure. I've been thinking about the data centerpiece of
15:39
Speaker 3: it all from a cybersecurity and and from a you know,
15:46
Speaker 3: data security standpoint, like you don't know what goes in
15:48
Speaker 3: and what comes out, which is all true, but if
15:50
Speaker 3: it's also from a actual ability to use the models piece,
15:54
Speaker 3: it's pretty problematic.
15:56
Speaker 2: Piece in the New York Times, Americans aren't money savvy,
15:59
Speaker 2: and they're only get worse. Well, I guess we should
16:01
Speaker 2: just give up then, So I'll quote here Americans already
16:10
Speaker 2: pour money savvy fell further this year worries, some trend
16:12
Speaker 2: researchers said, because people with weak understanding of basic finances
16:16
Speaker 2: often make poor financial decisions. Yeah, people with a with
16:20
Speaker 2: weak understanding of anything generally make bad decisions about that,
16:23
Speaker 2: like if you know, it's just how it is. On average,
16:28
Speaker 2: adults correctly answered only about half the twenty eight questions
16:31
Speaker 2: in the Personal Finance Index, a survey of financial knowledge.
16:34
Speaker 2: The average is never top fifty two percent. This year
16:37
Speaker 2: it was just forty seven percent, the lowest of the
16:39
Speaker 2: ten year history. Okay, so here's here's the real thing
16:42
Speaker 2: and why this doesn't matter, Mike, is there any real
16:46
Speaker 2: difference between a group of people answering a survey forty
16:50
Speaker 2: seven percent right and fifty two percent right now?
16:52
Speaker 3: Five percentage points? He's within the market because it's a
16:55
Speaker 3: twenty eight question test. Okay, and I did the math, Michael,
16:59
Speaker 3: Every question on that twenty eight question test is worth
17:02
Speaker 3: three and a half percent, which means there's probably like
17:06
Speaker 3: a one question like people this year are getting questions
17:09
Speaker 3: wrong one more time than the best we've ever done.
17:12
Speaker 4: Well.
17:13
Speaker 3: If you want to feel good or bad about yourself,
17:15
Speaker 3: you can go take a shortened version of this online
17:17
Speaker 3: where can I do? It's a shortened eight question I
17:21
Speaker 3: looked at it this morning. Personal Finance Index eight question
17:25
Speaker 3: test is available on the Global Financial Literacy Excellent Excellence Center.
17:35
Speaker 3: Just google search it, you'll find it and you can
17:37
Speaker 3: take the eight question test. It's the abridged version of
17:41
Speaker 3: this and test your own financial wellbeing knowledge.
17:44
Speaker 2: I've got Can can I do mine? Right now? Actually?
17:47
Speaker 3: No?
17:47
Speaker 2: Can we do it for all of our listeners?
17:48
Speaker 3: Like just give them all the questions and the answers,
17:50
Speaker 3: or what are we what are we looking at here?
17:52
Speaker 2: Well, we have a minute. Okay, let me just do
17:54
Speaker 2: one of them and we'll just we'll just see what
17:55
Speaker 2: they're like. Mark's salary has increased over the past two years.
17:59
Speaker 2: What's applause? Reason for this? Number One the number of
18:02
Speaker 2: workers with Mark skills increased where he lives and works.
18:06
Speaker 2: Number two, new technology reduced demand for workers with Mark skills.
18:11
Speaker 2: Three Mark completed several training courses at a local college
18:15
Speaker 2: or C. Don't know, don't know what do you mean?
18:21
Speaker 3: I'm just confused about why you would offer. Don't know
18:23
Speaker 3: is an answer, But okay.
18:24
Speaker 2: Because you don't know, maybe don't know his rights. Sometimes
18:28
Speaker 2: I would go with C. Personally three, I realized, I
18:32
Speaker 2: should we do another one? Sure, A household budget cannot
18:35
Speaker 2: be used for which of the following to track household
18:38
Speaker 2: financial assets, to plan for necessary household expenses, to plan
18:43
Speaker 2: household discretionary spending? Or don't know, don't know? Gonna go
18:47
Speaker 2: a Bob. I'm gonna go with a as well. Tucker
18:49
Speaker 2: went with don't know again. Ye I'm sorry, Tucker, you
18:51
Speaker 2: did know and you were knew wrong. So the the
18:57
Speaker 2: percentage of adults who got these right this year? The
19:01
Speaker 2: first one was fifty six percent, the second one was
19:03
Speaker 2: forty nine. Oh, can we do the one that only
19:04
Speaker 2: twenty seven percent of people got right? Sure? Actually, we
19:08
Speaker 2: got to go to a quick break. When we come back,
19:11
Speaker 2: we've got the trivia answer, We've got Wall Street Watch,
19:14
Speaker 2: and we're going to ask you the toughest question on
19:17
Speaker 2: the eight question financial literacy test.
19:21
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19:56
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19:59
Speaker 4: Market well into the Green. To begin the week after
20:02
Speaker 4: the US and Around agreed to an interim piece deal
20:05
Speaker 4: that would reopen the Straight of four MOUs, sending the
20:07
Speaker 4: price of oil lower. Wall Street's also radying for Kevin
20:11
Speaker 4: Worsh's first FED meeting this week. Right now, the Dow
20:14
Speaker 4: is up one and a quarter percent, SMP five hundred
20:18
Speaker 4: up one point seven percent or one hundred and twenty
20:21
Speaker 4: nine points higher. NASDAC now up two point seven percent
20:25
Speaker 4: or nearly seven hundred points higher, Russell two thousands up
20:29
Speaker 4: nine tenths of a percent. Ten Your treasureel is down
20:32
Speaker 4: two basis points at four point four to five percent.
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Speaker 4: In Oil down five percent, trading at eighty dollars a barrel.
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Speaker 2: As expected.
20:40
Speaker 4: Energy and travel stocks are seeing attention following the interim
20:43
Speaker 4: peace deal between the US and AROUND. Energy stocks including APA,
20:47
Speaker 4: Devon Energy, Chevron, and Exon Mobile seeing losses, United Delta,
20:52
Speaker 4: Carnival and Royal Caribbean are climbing due to lower fuel prices. Meanwhile,
20:57
Speaker 4: some breaking news in the media and streaming space this
20:59
Speaker 4: morning after Fox agreed to acquire Roku for about twenty
21:04
Speaker 4: two billion dollars. Roku is the largest streaming platform four
21:08
Speaker 4: connected TVs, with a twenty five percent market share reaching
21:12
Speaker 4: more than one hundred million households. Fox down by fifteen percent,
21:17
Speaker 4: while Roku stock is down nearly one percent, and after
21:21
Speaker 4: its history making IPO on Friday, SpaceX share is climbing
21:25
Speaker 4: another eight percent today. SpaceX jumped nineteen percent on Friday
21:31
Speaker 4: from its IPO price of one hundred and thirty five
21:34
Speaker 4: dollars share. I'm Tucker Silvan. That is Wall Street watching.
21:38
Speaker 4: On the previous segment, we asked you the trivia question
21:41
Speaker 4: which country was the first to pass a sweeping ban
21:44
Speaker 4: on social media for kids under sixteen? That would be
21:48
Speaker 4: Australia and Jack and Charlotte, North Carolina is our winner today,
21:52
Speaker 4: taking home the Financial Exchange Show t shirt. Congrats to
21:54
Speaker 4: Jack and we play trivia every day here on the
21:57
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22:02
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22:03
Speaker 2: All right, so we were covering the uh, the fact
22:08
Speaker 2: that Americans are basically doing about the same as they've
22:10
Speaker 2: always done on this global financial literacy test, but they
22:14
Speaker 2: did slightly worse last year, and so you get these
22:16
Speaker 2: headlines like Americans are idiots when it comes to finance
22:20
Speaker 2: and number we are, but we're consistently idiots. So I
22:24
Speaker 2: don't know that we are. I'm with you. If you
22:29
Speaker 2: ask these questions to a thousand people from every country,
22:34
Speaker 2: I'm not sure that like there's anywhere that does better
22:39
Speaker 2: or worse necessarily, you know, I'm just not so. In
22:45
Speaker 2: any case, We've got this eight question subset from the test,
22:49
Speaker 2: and I want to read you from the eight question.
22:53
Speaker 2: This is the one that.
22:54
Speaker 3: Gets the the least correct answers.
22:57
Speaker 2: This was the toughest one, okay, among US adults. Only
23:01
Speaker 2: twenty seven percent of adults got this one right. Mike, Okay,
23:05
Speaker 2: so I hope you all are listening and you can
23:06
Speaker 2: prove that you are smarter than seventy three percent of
23:10
Speaker 2: US adults if you get this one question right. It's
23:13
Speaker 2: right smarter, not just getting this question right, and it
23:16
Speaker 2: says something about you as a person. Catherine is a single,
23:20
Speaker 2: twenty five year old worker who's in good health. What
23:23
Speaker 2: type of insurance coverage is she most likely to need
23:25
Speaker 2: in the New Yar term? Is it a life insurance,
23:31
Speaker 2: B disability insurance or C long term care insurance or
23:35
Speaker 2: D don't know, I don't know.
23:41
Speaker 3: Canadian Mike making an appearance on this, I wonder how
23:44
Speaker 3: Canadian Mike would answer these questions.
23:45
Speaker 2: I don't know, he does not know any any thoughts, gentlemen.
23:50
Speaker 3: I'm gonna go with the the one that would be
23:53
Speaker 3: most likely to affect a twenty five year old, which
23:55
Speaker 3: would be disability insurance.
23:56
Speaker 2: Correct. Only twenty seven percent of Americans got that interesting
23:59
Speaker 2: the surprise to me, this question did not grade out
24:04
Speaker 2: nearly as challengingly challengingly. Yes, fine, that's the word. Jose
24:09
Speaker 2: Oh's one thousand dollars on a loan that has an
24:11
Speaker 2: interest rate of twenty percent compounded annually. If he makes
24:14
Speaker 2: no payments on the loan at this interest rate, how
24:16
Speaker 2: many years will it take for the amount to double?
24:19
Speaker 2: A less than five years? B five to ten? See
24:22
Speaker 2: more than ten. That is a more challenging question. I
24:24
Speaker 2: figured that would be tough.
24:26
Speaker 3: Like I'm not saying to know the rule of seventy
24:27
Speaker 3: two is there was there a d H D is
24:31
Speaker 3: I don't know?
24:32
Speaker 2: Thank you, Michael uh So. Yeah, that one I figured
24:36
Speaker 2: would be tougher, But no, like forty percent of Americans
24:40
Speaker 2: were able to get that one. Well, that's guys, we're
24:41
Speaker 2: helplessly in credit card debts. We've seen it happen. We
24:44
Speaker 2: are very good at credit card math. Because we were
24:48
Speaker 2: just used to it at this point. Let's see which
24:51
Speaker 2: was the easiest one. Oh, okay, here we go. Which
24:54
Speaker 2: statement about investing is correct? Michael, Investing in the stock
25:00
Speaker 2: of a single company is typically safer than investing in
25:02
Speaker 2: a mutual fund the whole shares of many companies in
25:04
Speaker 2: multiple industries. B. Investing in a mutual fund the whole
25:08
Speaker 2: shares of many companies and multiple industries is typically safer
25:10
Speaker 2: than investing in the stock of a single company. CE,
25:13
Speaker 2: investing in the stock of a single company and investing
25:15
Speaker 2: in a mutual fund that holds shares of many companies
25:17
Speaker 2: are equally safe or d. I don't know.
25:25
Speaker 3: So here's the problem. That was the best, that was
25:26
Speaker 3: the easiest question on the test.
25:29
Speaker 2: Yes, here, here's the thing. After almost twenty years of
25:32
Speaker 2: being in the investment industry, I look at these and
25:34
Speaker 2: I'm like, none of you say that. I'm like, none
25:36
Speaker 2: of these answers make sense to regulators. None of them
25:38
Speaker 2: are right, you know? But uh so, where can people
25:41
Speaker 2: go take this test? Uh So? I just I'm on
25:44
Speaker 2: the TIA website. TIA has it as well. They've got
25:48
Speaker 2: just like a PDF that's out there. I googled a
25:51
Speaker 2: rather duck duck Gode Personal Finance Index test. Yeah, and
25:55
Speaker 2: the one from Tia Kraf was the one that popped
25:59
Speaker 2: up for me.
25:59
Speaker 3: Yeah, So if you're interested, you can go test your
26:01
Speaker 3: own financial knowledge on this test and see if you
26:04
Speaker 3: can score better than about half, which is the average. Again,
26:07
Speaker 3: this isn't the exact test. They gave an abbreviated one
26:10
Speaker 3: out there. But when it comes to more complex questions
26:14
Speaker 3: like social Security and medicare, even fewer people seem to
26:17
Speaker 3: know the answers to these ones. And so arm Sortivice group,
26:21
Speaker 3: we're putting on a informational evening less than two weeks
26:25
Speaker 3: from now, about a week and a half from now, Thursday,
26:28
Speaker 3: June twenty fifth. It's going to be in Quincy, and
26:32
Speaker 3: we're going to be answering the most commonly asked questions
26:36
Speaker 3: that we get about social Security and Medicare, and we
26:39
Speaker 3: will be getting into all sorts of weeds on this
26:41
Speaker 3: because I've been to one of these before and there
26:44
Speaker 3: are just a lot of questions that come up from
26:46
Speaker 3: people with real life scenarios about how it's going to
26:49
Speaker 3: affect them personally, which honestly is what really matters with
26:53
Speaker 3: all of this, we'll be presenting on social security and medicare.
26:57
Speaker 3: When are you eligible, how do you file? What are
26:59
Speaker 3: the loopholes that are still available to take advantage of?
27:01
Speaker 3: What kind of insurance might you need based on your circumstances.
27:05
Speaker 3: If you have those types of questions, It's free to attend.
27:09
Speaker 3: June twenty fifth, five pm and Quincy. You go to
27:13
Speaker 3: Armstrong Advisory dot Com slash Events.
27:15
Speaker 2: You can call it eight.
27:16
Speaker 3: Hundred and three nine three four zero zero one. But
27:19
Speaker 3: while it's free to attend that, you do need to
27:20
Speaker 3: register in advance again Armstrong Advisory dot Com Slash Events.
27:25
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:28
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:30
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
27:33
Speaker 1: your own financial tax into state planning advisors before making
27:36
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
27:39
Speaker 1: advisory services.
27:41
Speaker 2: Piece in the Financial Times is titled AI is revolutionizing
27:45
Speaker 2: the stock market not necessarily for good.
27:48
Speaker 3: How they are making the point that we have before,
27:53
Speaker 3: which is that the major contributors to stock market growth
27:57
Speaker 3: over the last few years, which they count Alphabet, Microsoft,
28:00
Speaker 3: Meta and Amazon in that cohort. It's not that Apple
28:04
Speaker 3: and others didn't contribute or Nvidia didn't contribute, but these
28:08
Speaker 3: are the four that they are talking about. Alphabet, Microsoft,
28:12
Speaker 3: Meta combined generated free cash flow of over two hundred
28:16
Speaker 3: billion dollars, four times the level of a decade before.
28:19
Speaker 3: Amazon doesn't have quite the same free cash flow, but
28:22
Speaker 3: again tremendous free cashow thirty three billion dollars in twenty
28:26
Speaker 3: twenty four. And the point that they are making is
28:30
Speaker 3: that pretty much all four of them are spending most
28:34
Speaker 3: of that on a race to develop artificial intelligence, and
28:38
Speaker 3: so a big mechanism that existed in markets prior to
28:41
Speaker 3: all this, which was companies buying back their stock with
28:44
Speaker 3: their tremendous profits, is going to be more difficult to
28:47
Speaker 3: do in this day and age. They also point out
28:49
Speaker 3: a company, Apple, that is not doing this. They are,
28:53
Speaker 3: you know, again pretty similar profile, massively profitable, huge growth,
28:58
Speaker 3: and instead Apple kind of thinks that their consumer hardware
29:02
Speaker 3: services can just take advantage of AI without having to
29:05
Speaker 3: build it themselves, which is again interesting and makes it
29:11
Speaker 3: makes Apple very different from the other big tech companies
29:13
Speaker 3: in this moment.
29:14
Speaker 2: And we've talked about a number of times if you're
29:19
Speaker 2: wondering why the other big tech companies are going down
29:22
Speaker 2: this road. If someone says, hey, you can go out
29:28
Speaker 2: and spend half a trillion dollars the next three years,
29:33
Speaker 2: and you've got a chance to increase your revenue by
29:37
Speaker 2: five trillion as a result of it, I understand the
29:40
Speaker 2: incentives to do that. I think there's also a fear
29:43
Speaker 2: component here. It's also, oh, someone else could come around
29:46
Speaker 2: and do that, and then my business isn't worth what
29:48
Speaker 2: it used to be. So I understand the incentives to
29:51
Speaker 2: do that, just like how in two thousand and five
29:53
Speaker 2: and six, I I understood the incentives for banks to
29:57
Speaker 2: make as many mortgage loans as possible, sure, because you
30:01
Speaker 2: saw what the upside was. Now, obviously, just because you
30:06
Speaker 2: understand the incentives does not mean that those incentives work
30:09
Speaker 2: out in the long run. We saw how the concentration
30:13
Speaker 2: of those incentives in five and six led to the
30:15
Speaker 2: mortgage blow up. I'm not saying that we get that here,
30:18
Speaker 2: but one of the possibilities that comes out of this
30:20
Speaker 2: is there's too much debt, not enough cash flow, and
30:23
Speaker 2: the whole thing, you know, blows up in these companies' faces.
30:26
Speaker 2: It won't take the big ones down because they have
30:29
Speaker 2: diversified sources of revenue like Microsoft. I'm pretty sure it's
30:35
Speaker 2: not gonna go out of business if they spend too
30:36
Speaker 2: much on data centers. Agreed, some of the companies might
30:41
Speaker 2: the companies that don't have diversified sources of revenue, like
30:44
Speaker 2: if this doesn't work out for Anthropic or open AI,
30:48
Speaker 2: I could see that maybe they run into problems. Some
30:50
Speaker 2: of the smaller companies trying to play in this pool, Oracle,
30:53
Speaker 2: I could see some problems potentially there. So it seems
30:57
Speaker 2: to me that there is just an credible.
31:00
Speaker 3: Amount of execution risk in US equity markets right now.
31:04
Speaker 3: And I don't know how you compare that to other
31:06
Speaker 3: periods of time. There's always execution risk in business, but
31:11
Speaker 3: when you are taking the most profitable businesses in the
31:13
Speaker 3: world and they are all deprive pretty much universally, spending
31:19
Speaker 3: all of their profits on an unknown new technology, it
31:23
Speaker 3: sure seems like there's more execution risk to things going
31:26
Speaker 3: well in that space than has really ever existed before.
31:30
Speaker 2: Let's take a quick break. When we come back, we'll
31:32
Speaker 2: do a little bit of stack roulets.
31:34
Speaker 1: The Financial Exchange is now available every day from eleven
31:37
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31:41
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31:51
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31:54
Speaker 3: Points does make a fair bit of sense because I
31:58
Speaker 3: just think about work prior to COVID, right, like you
32:03
Speaker 3: worked for a big company. If you were sick that day,
32:07
Speaker 3: you stayed home and you did no work. And these days,
32:10
Speaker 3: like Chuck, you know, we do this quite frequently. If
32:15
Speaker 3: I'm not feeling well, I just stay at home, I
32:19
Speaker 3: work there and don't get everybody else sick, and I
32:23
Speaker 3: don't take a sick day and I.
32:24
Speaker 2: Just do some work.
32:26
Speaker 3: And that is the new equilibrium that I think companies
32:28
Speaker 3: are more and more comfortable with, even as they call
32:31
Speaker 3: employees back to the office on a more frequent basis,
32:34
Speaker 3: which does mean Again, it doesn't mean the death of cities.
32:38
Speaker 3: It does mean continue transformation of office space and the
32:42
Speaker 3: value that companies put on that stuff.
32:45
Speaker 2: What do we think about social media bands for kids?
32:50
Speaker 2: I think that.
32:53
Speaker 3: They aren't likely to be terribly successful, but I am,
32:58
Speaker 3: you know, on balance kind of alright, with them.
33:01
Speaker 2: I tend to land in the same place. And the
33:05
Speaker 2: interesting thing like, if you actually talk to kids, like
33:08
Speaker 2: high schoolers or middle schoolers, what you hear from them
33:12
Speaker 2: is like almost always the same. I wish I wasn't
33:16
Speaker 2: on my phone, but everyone else is, so I have
33:18
Speaker 2: to be like that's generally what you don't really get
33:21
Speaker 2: a whole lot of like wow, like I love my phone.
33:24
Speaker 2: This is the no, It's like, yeah, I like it,
33:28
Speaker 2: but I prefer not to do it.
33:30
Speaker 3: All else being equal, I look at it the same
33:32
Speaker 3: way as I do alcohol and tobacco age.
33:36
Speaker 2: Requirements, which are like on the margin. I think it's
33:38
Speaker 2: probably a good thing.
33:39
Speaker 3: I think we could probably be doing a better job
33:42
Speaker 3: of educating kids about the dangers of drinking.
33:46
Speaker 2: And we have a kind of binge.
33:48
Speaker 3: Alcohol culture in this country, so like I don't think
33:51
Speaker 3: any of those things are healthy, So could we do better? Yeah,
33:54
Speaker 3: but I see why lawmakers are coming to the conclusion
33:58
Speaker 3: that hey, this is the lowest fruit that we can do.
34:01
Speaker 2: Yeah, it's and by the way, like this is not
34:04
Speaker 2: just happening in like this is not something where it's
34:08
Speaker 2: like only happening in like really tightly controlled authoritarian you know,
34:12
Speaker 2: environments Australia and the United Kingdom. Well, I mean again,
34:15
Speaker 2: like there are different, very different views on free speech
34:19
Speaker 2: there than you know us, But like you go and
34:22
Speaker 2: like you look at some of the places that are
34:24
Speaker 2: doing this, and again like it's no surprise, like China's
34:28
Speaker 2: always had stuff like this, but Brazil, Like I don't
34:31
Speaker 2: really look at Brazil and consider Brazil like a bastion
34:36
Speaker 2: of authoritarianism generally, I look at Brazil. No, but you
34:40
Speaker 2: look at Brazil in the last like twenty thirty years,
34:42
Speaker 2: and you're like, yeah, there's not really any like central
34:45
Speaker 2: government control over much of anything. Like it's it's very messy.
34:49
Speaker 2: And they put in place, you know, a widespread ban
34:55
Speaker 2: of all kinds of different content for kids under the
34:58
Speaker 2: age of sixteen.
35:00
Speaker 3: And so what do you make of the argument that
35:02
Speaker 3: because I heard an interview with I think as a
35:05
Speaker 3: YouTube executive, and I'm not sure if YouTube would even
35:07
Speaker 3: fall into some of these categories, but it sounded like
35:09
Speaker 3: they would.
35:10
Speaker 2: In the United.
35:10
Speaker 3: Kingdom, they made an argument that I do find compelling,
35:14
Speaker 3: which is, we can put in certain guardrails to our platforms.
35:21
Speaker 3: If you push them all off of these platforms, they're
35:23
Speaker 3: going to find other social media outlets and they're going
35:26
Speaker 3: to be unregulated and more dangerous. I'm not sure I
35:30
Speaker 3: really buy the argument, but there's something to that.
35:33
Speaker 2: So as someone who grew up in the nineteen nineties
35:37
Speaker 2: as the Internet was emerging and like coming into mainstream consciousness, Look,
35:43
Speaker 2: there are always a million different places to go on
35:45
Speaker 2: the Internet. Yeah, some people are going to be drawn
35:49
Speaker 2: to places that are you know, worse. Some people are
35:50
Speaker 2: going to be drawn to places that are better. There
35:52
Speaker 2: are plenty of places on very large public sites run
35:58
Speaker 2: by publicly traded companies that have all kinds of problems
36:02
Speaker 2: with them. It's not like you look at like Facebook
36:05
Speaker 2: and you're like, oh, everything there is on the up
36:07
Speaker 2: and up, Like, no, there's all kinds of scams and
36:09
Speaker 2: this and that that go on. You talk about roadblocks
36:12
Speaker 2: as a platform, and there's all kinds of concern about
36:16
Speaker 2: kids being on the platform because of predatory adults. Like
36:20
Speaker 2: you can look at these big companies and they're not
36:23
Speaker 2: necessarily like these, you know, paragons of virtue either. We
36:28
Speaker 2: know this, take a quick break for the rest of
36:31
Speaker 2: the day. We're gonna be back tomorrow and we will,
36:34
Speaker 2: but we won't see you. But you'll listen to us
36:37
Speaker 2: then