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Six takeaways from a wild week in AI · The Financial Exchange Show

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Speaker 1: heroes by visiting DAV five dot Boston and making a
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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike Armstrong.
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Speaker 2: Chuck, Mike and Tucker with you. And as we sit
1:11
Speaker 2: here right now, we're about thirteen hours from the potential
1:14
Speaker 2: imposition of tariffs on Canada and China. I leave out
1:19
Speaker 2: our neighbors to the south in Mexico, because about an
1:22
Speaker 2: hour or so ago, actually maybe half hour ago, Mexican
1:25
Speaker 2: President Klaudia Shinbaum announced that the tariffs on Mexico were
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Speaker 2: going to be delayed by one month after a negotiation
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Speaker 2: with the United States. The White House confirmed that, and
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Speaker 2: so Mexico at least four either the next twenty eight,
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Speaker 2: thirty or thirty one days, depending on how to define
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Speaker 2: a month, is not subject to tariffs. That's what we understand.
1:49
Speaker 2: Market reaction has been all over today.
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Speaker 3: As you can imagine in pre market trading, you had
1:53
Speaker 3: US equities last night down as much as two percent
1:56
Speaker 3: on the S and P five hundred opened up down
1:59
Speaker 3: in the one an hour half to one point six
2:01
Speaker 3: percent range, now cutting those losses in half. Markets are
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Speaker 3: still down S and P off, like I said, about
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Speaker 3: eight tenths of a percent at the moment. The interesting
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Speaker 3: thing's been in the bond market, Chuck, I know you
2:12
Speaker 3: were going there next, so you're talking about treasury markets
2:14
Speaker 3: and what we're seeing there.
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Speaker 2: So this morning, before the Mexico announcement, UH, the tenure
2:20
Speaker 2: treasury was down about six basis points. As we say
2:24
Speaker 2: here right now after the Mexico announcement hasn't budged, still
2:26
Speaker 2: down six basis points. And so my read, and again
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Speaker 2: this is it can be any one of a million things.
2:34
Speaker 2: Is look that the ten year is composed. There's two
2:37
Speaker 2: things that make a bond yields in any tenor UH.
2:40
Speaker 2: The first is what do you think growth expectations are
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Speaker 2: going to be? The second is what do you think
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Speaker 2: inflation expectations are going to be? And the tenure coming down,
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Speaker 2: you can look at it and say, okay, is this
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Speaker 2: because of inflation or growth? And you can actually break
2:55
Speaker 2: it down in the individual components. And what we are
2:59
Speaker 2: seeing here is that the inflation component is actually still
3:05
Speaker 2: picking up a little bit while the growth component is
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Speaker 2: being driven a little bit lower. And so markets are saying,
3:12
Speaker 2: and again, who knows if they're going to be right
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Speaker 2: or not. I'm not saying that the bond market is
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Speaker 2: always right. We've we've kind of poo pooed the bond
3:19
Speaker 2: market quite often in the last few years for being
3:22
Speaker 2: wrong on a lot of this. But the bond market
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Speaker 2: today is saying, hey, even if those tariffs aren't imposed, yeah,
3:27
Speaker 2: we know there's still two more that are floating out there.
3:31
Speaker 2: We're still not quite buying that the growth story is
3:33
Speaker 2: going to be what we thought it was last week. Now,
3:35
Speaker 2: this could all reverse itself by this afternoon or tomorrow,
3:38
Speaker 2: but this is just what it's saying to us at
3:41
Speaker 2: this very point in time. Other things that we are
3:44
Speaker 2: seeing moving right now, oil West textas Intermediate, after being
3:47
Speaker 2: up about two dollars a barrel earlier today on the
3:50
Speaker 2: tariff news, now flat for the day at seventy two
3:53
Speaker 2: to fifty three trip A national average for gas prices
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Speaker 2: is also flat overnight at three oh nine and eight
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Speaker 2: of a cent. And we've got gold today, with those
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Speaker 2: bond yields moving lower, gold moving up twenty dollars and
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Speaker 2: fifty cents an ounce to twenty eight to fifty five
4:10
Speaker 2: and fifty cents. Now. We've been talking tariffs all day,
4:16
Speaker 2: well at least for as much of the day as
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Speaker 2: we could, until they were, you know, not put into
4:21
Speaker 2: place on Mexico. It's hard to believe that just a
4:23
Speaker 2: week ago, everyone in their grandma was freaking out about
4:28
Speaker 2: Deep Seek, the new AI model from China. It feels
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Speaker 2: like that was like three months ago.
4:33
Speaker 1: Yeah.
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Speaker 3: I don't know if there's anything personal going on in
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Speaker 3: my life right now, but the last seven days seem
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Speaker 3: like a century.
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Speaker 2: It's wild, just like it feels like there's been so
4:43
Speaker 2: much happening each day. You know what it is.
4:45
Speaker 3: It's the amount of educating you and I have needed
4:48
Speaker 3: to do to feel even reasonably intelligent to speak about
4:52
Speaker 3: these things. Like I had to cram a lot of
4:53
Speaker 3: reading into the last seven days. So we got a
4:56
Speaker 3: piece in the wall streets, so they I did.
4:57
Speaker 2: I don't know. I don't know how Chuck comes up
4:59
Speaker 2: with this stuff. I don't know. I just I just
5:03
Speaker 2: sleep and it comes to me. He just pulls it.
5:05
Speaker 2: Will Ferrell from the old school, I blocked out what
5:07
Speaker 2: happened most of the time. So they have six takeaways
5:11
Speaker 2: from the last week for AIUH. Number one, Deep Seek
5:15
Speaker 2: is a coup for China and a new approach to AI. Yeah,
5:19
Speaker 2: I can buy that cool.
5:21
Speaker 3: I don't know about that word kup, but yeah, it's
5:23
Speaker 3: a very new approach to ai UH. And even if
5:27
Speaker 3: parts of it turn out to be untrue, it's still
5:29
Speaker 3: a pretty significant shake up.
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Speaker 2: Number two, Deep Seek's rise made investors skeptical of in Vidia.
5:35
Speaker 2: I would say it lost about a fifth of its
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Speaker 2: value in a week, and not just that even today
5:40
Speaker 2: with the you know, tariff news being you know kind
5:42
Speaker 2: of in flux. In video still down two percent, which is,
5:45
Speaker 2: you know, a bigger drop than the point you know,
5:48
Speaker 2: the two thirds of a percent that we're seeing in
5:49
Speaker 2: the S and prre the one percent on the Nasdaq.
5:52
Speaker 2: So in video, still with some questions that are out there. Uh,
5:55
Speaker 2: Next one, chip export controls on China aren't stopping its
5:59
Speaker 2: AI ascendants if you remember, the Biden administration put in
6:02
Speaker 2: place a number of export restrictions on AI chips specifically,
6:07
Speaker 2: and whether China was able to you know, secretly obtain
6:11
Speaker 2: them and train their models on this, or whether China
6:14
Speaker 2: just said no, we don't need these, they still figured
6:17
Speaker 2: out how to build a better mouse trap. Yeah, so
6:21
Speaker 2: I agree on all of that.
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Speaker 3: I think, you know, facts might not be an evidence
6:25
Speaker 3: that this will permanently allow China to continue its AI ascendance,
6:29
Speaker 3: but in this one instance, whether they were able to
6:32
Speaker 3: get around the export controls or train this AI on
6:36
Speaker 3: uh not best in class chips. In this one instance,
6:41
Speaker 3: they were able to succeed where other companies have not.
6:44
Speaker 3: I would say, jury still out on Hey, can you
6:47
Speaker 3: replicate this with the next generation of technology if we
6:50
Speaker 3: are more successful in those export controls.
6:53
Speaker 2: But yeah, to this point unclear. Let's see this next one.
6:58
Speaker 2: Deepseek maybe succeed by free riding on open ais work
7:03
Speaker 2: as been just by the way, like the funniest story
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Speaker 2: ever after open AI trained its model on you know,
7:10
Speaker 2: ripping off every journal, you know, every newspaper out there,
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Speaker 2: every social media platform out there without their consent and
7:19
Speaker 2: without paying for it.
7:20
Speaker 3: Now AI is you know, claiming the deep secrept off
7:23
Speaker 3: its own model.
7:24
Speaker 2: As Ben Stiller once said in Dodgeball, cram it up
7:28
Speaker 2: your cram hole the floor.
7:30
Speaker 3: Tough to have much pity for for Sam Altman in right,
7:33
Speaker 3: like AI.
7:34
Speaker 2: Oh, like you guys trained on our model. Dude, you
7:37
Speaker 2: trained like when you're CTO. Your chief technology officer at
7:41
Speaker 2: the time was asked, you know, have you trained these
7:45
Speaker 2: models on YouTube? As an example, this is have you
7:50
Speaker 2: seen the video of this mic? She kind of twisted
7:53
Speaker 2: her face as like, well, you know, I don't really know,
7:58
Speaker 2: I'm not sure. Maybe like guys like for you to
8:02
Speaker 2: be saying, hey, this is illegal. They trained their stuff
8:06
Speaker 2: on our stuff. Please come on. Yeah, you're gonna have
8:10
Speaker 2: a tough time winning no laws here, done that one.
8:12
Speaker 2: Good luck with that if in Chinese court by if
8:15
Speaker 2: that's really the case, yes, good luck with that too.
8:17
Speaker 2: The transitive property of theft is that shouldn't whoever open
8:22
Speaker 2: Ai stole from be the one suing Deep Seek. Yeah, yeah,
8:25
Speaker 2: I guess so. Any money is won by deep seek
8:27
Speaker 2: in there by Open Ai in Chinese courts should be
8:30
Speaker 2: immediately transferred to whoever actually trained open Ai. Let's see
8:35
Speaker 2: deep Seek strategy puts Silicon valleys at risk kind of does.
8:38
Speaker 2: The whole premise of AI in the United States, And
8:41
Speaker 2: this was first laid out in papers by open Ai
8:44
Speaker 2: a few years ago, was hey, if you want to
8:47
Speaker 2: improve models, you need to get you know, scale training,
8:50
Speaker 2: and and really the scale was the big thing. If
8:54
Speaker 2: it's true that you can actually build robust models without
8:59
Speaker 2: needing to scale the architecture the way that they are,
9:02
Speaker 2: then the real question is, hey, are all of these
9:06
Speaker 2: companies spending money that they don't need to, Right.
9:09
Speaker 3: I'm gonna summarize the information known about AI prior to
9:13
Speaker 3: Monday of last week, as only giant tech companies could
9:17
Speaker 3: succeed in this space.
9:19
Speaker 2: And would glad go out and compete against them?
9:21
Speaker 3: And guess what all the giant tech companies globally are us? Like,
9:26
Speaker 3: maybe you can call Alibabo, you know another giant tech company,
9:29
Speaker 3: but no, really I don't. Yeah, it's Microsoft, Google, Meta,
9:32
Speaker 3: and Nvidia. These were the companies that had the scale
9:35
Speaker 3: and money and expertise to succeed in AI.
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Speaker 2: And Monday flip that narrative. Finally, despite deep Seek's threat,
9:44
Speaker 2: SoftBank is making a huge bet on open AI. Yes,
9:46
Speaker 2: because Macioshi Son just loves to throw money at you know,
9:50
Speaker 2: different tech companies, and sometimes they work and sometimes he's
9:53
Speaker 2: like the the exact top of that market and you
9:55
Speaker 2: don't really know until after the fact. One other thing,
9:59
Speaker 2: just while talking AI, the whole premise of these AI
10:05
Speaker 2: races and why companies are spending so much money is
10:07
Speaker 2: to get to something that they call AGI artificial general intelligence,
10:11
Speaker 2: which is the idea that Hey, what we've seen to
10:14
Speaker 2: this point is even though it can be like multimodal
10:18
Speaker 2: in some respects, like hey, I can send a picture
10:20
Speaker 2: and it can describe it in text or vice versa. Sure,
10:24
Speaker 2: it still is limited. It's not really thinking, it's just
10:28
Speaker 2: pulling things together and responding from the prompt that I
10:30
Speaker 2: give it. The idea behind artificial general intelligence is, hey,
10:34
Speaker 2: you basically create like a cybernetic organism, just freaking wild
10:39
Speaker 2: and sci fi like. It's you know, like you're you're
10:43
Speaker 2: building the Terminator. I guess what I'm getting at is
10:48
Speaker 2: there's this whole idea that, Okay, you're gonna get to
10:50
Speaker 2: artificial general intelligence. I have one question that's been kind
10:54
Speaker 2: of bothering me about this. Okay, then what like what's
11:04
Speaker 2: the sci fi future that we're looking for? What? Okay,
11:07
Speaker 2: so you've got artificial general intelligence? What what? What? Then?
11:14
Speaker 2: I guess we don't need humans. I don't know where where?
11:19
Speaker 3: And does anybody want artificial general intelligence? The tech companies
11:23
Speaker 3: clearly does, but I guess, but do any of us?
11:25
Speaker 3: So what do consumers want to artificial general intelligence?
11:28
Speaker 2: What happens once we get there? Like, what's what's the
11:32
Speaker 2: point of it? What does it do? How does it act?
11:36
Speaker 2: We'll know when we get there, chuck.
11:39
Speaker 3: I guess that's just the I'd prefer to have a
11:41
Speaker 3: plan ahead of time, but we'll know when we get there.
11:42
Speaker 2: You would want to, in theory, have a better plan
11:45
Speaker 2: when meeting in intelligence with far greater recall and logical
11:49
Speaker 2: reasoning than the bulk of you know, than basically all
11:51
Speaker 2: of our population.
11:52
Speaker 3: For just example of other innovations in the past, they
11:56
Speaker 3: didn't plan to go to the moon and be like, oh.
11:58
Speaker 2: Well, we'll figure out what to do when we get there. Right,
12:00
Speaker 2: it was hey, like, we're gonna go to the moon
12:02
Speaker 2: and we're gonna bring back rocks and see if there's
12:04
Speaker 2: signs of water and light my area. You know. It's
12:07
Speaker 2: like Neil wasn't like stepping off like the ship being like, hey,
12:11
Speaker 2: let's go see what that hill is over there. What Jimmy,
12:14
Speaker 2: give me the give me the golf You packed the
12:16
Speaker 2: golf clubs. No, like they knew they were packing the
12:18
Speaker 2: golf clubs because they only had so much weight they
12:21
Speaker 2: could put on the ship. So this whole thing with
12:26
Speaker 2: artificial general intelligence, to me, it's like, Okay, so you
12:29
Speaker 2: built something that can think for itself. Now, what what
12:34
Speaker 2: do we do. Let's see if we can beat it
12:37
Speaker 2: in the war. What's what's what's the plan? Uh quick
12:40
Speaker 2: break here. When we come back, we've got trivia and
12:43
Speaker 2: then we're gonna be talking oil after this.
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Speaker 2: All right.
13:22
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14:16
Speaker 2: Uh in the Wall Street Journal, it's actually a Wall
14:18
Speaker 2: Street Journal exclusive. Trump's bid from more oil is a
14:22
Speaker 2: hard sell for allies in US and Saudi Arabia.
14:26
Speaker 3: So long as we're talking about oil, I think it's
14:28
Speaker 3: worth mentioning, by the way, that this morning oil prices
14:30
Speaker 3: were up I think two and a half percent. On
14:33
Speaker 3: tariff news they are now as my read here would be,
14:38
Speaker 3: oil traders are assuming no Canadian tariffs in place because
14:43
Speaker 3: oil oils flat.
14:44
Speaker 2: Now yeah, uh so you've got that this. I did
14:48
Speaker 2: get an update. Hold on, let me pull it up here.
14:50
Speaker 2: But uh, here we go from the New York Times
14:53
Speaker 2: Canada bureau chief, and we're gonna this person knows more
14:58
Speaker 2: about Canada than I do. That's about all I can say.
15:01
Speaker 2: I don't know if they're going to be right or not.
15:03
Speaker 2: Senior Canada government official tells me situation is in flux
15:06
Speaker 2: for Canada after Trump Trudeau call this morning and had
15:10
Speaker 2: a follow up call at three pm. But they are
15:12
Speaker 2: not optimistic that a real off ramp for tariff exists
15:15
Speaker 2: for Canada the way it materialized for Mexico. I think
15:18
Speaker 2: I can read that too.
15:19
Speaker 3: There wouldn't be much of a point to have the
15:24
Speaker 3: Royal mounted Canadian military sitting at the Canadian border because
15:28
Speaker 3: there's not a whole lot of illega, my irrigregation or
15:31
Speaker 3: fentan all coming over that border. No, so easy solutions
15:34
Speaker 3: are not quite there. So again, well we'll have to
15:38
Speaker 3: see how that all ends up playing out. But getting
15:40
Speaker 3: back to the oil piece here, So when you look
15:45
Speaker 3: at US oil producers, yes, they would love to have
15:49
Speaker 3: access to easier licenses in order to be able to
15:51
Speaker 3: drill and lower regulatory costs and things like that. Sure,
15:54
Speaker 3: whether those exist or not, the people that are running
15:58
Speaker 3: those companies right now all were in the energy industry
16:02
Speaker 3: back in twenty fifteen and twenty sixteen when the US
16:05
Speaker 3: energy industry was decimated by Russia turning on the spigots
16:09
Speaker 3: and saying, hey, here's as much oil as the world
16:12
Speaker 3: can handle, and oil prices went from in the nineties
16:16
Speaker 3: to in the twenties over about eighteen months. So let's
16:18
Speaker 3: put your put yourself in the shoes of an oil
16:21
Speaker 3: executive right now, who probably is going to face a
16:26
Speaker 3: situation where it is again less regulatory burden and more
16:31
Speaker 3: probably definitely definitely less regulatory board and burden, and probably
16:35
Speaker 3: a whole lot of area opening up for drilling that
16:37
Speaker 3: you might be able to do. That does bring down
16:39
Speaker 3: your overall costs and you might consider expanding there. On
16:43
Speaker 3: the other side of that equation, you have a president
16:47
Speaker 3: who is taking seriously the goal of de escalating Russia
16:52
Speaker 3: and Ukraine, and if that should happen, the possibility of
16:55
Speaker 3: Russian oil coming back onto markets in some meaningful way.
16:58
Speaker 3: Do you think that's a possibility, least under the Trump administration, Russian.
17:02
Speaker 2: Oil coming back onto markets. Yeah, this is from Russia's
17:05
Speaker 2: deputy Prime minister this morning. Current situation on global oil
17:08
Speaker 2: markets is stable. We will increase oil production from April.
17:11
Speaker 2: OPEC plus is a good instrument. So Russia this morning
17:15
Speaker 2: saying yeah, in a few months we're going to start
17:17
Speaker 2: increasing production.
17:18
Speaker 3: Is there anything that in the mind of a sitting
17:22
Speaker 3: oil executive would tell you, Hey, I am definitively able
17:25
Speaker 3: to make a whole bunch of profit because I'm thinking
17:28
Speaker 3: that oil prices are going up and so I need
17:30
Speaker 3: to drill. I just don't think there's any certainty there,
17:33
Speaker 3: and so therefore I don't know that deregulation gets more
17:37
Speaker 3: oil to market in the United States.
17:39
Speaker 2: Where I land is. I think you can have one
17:41
Speaker 2: of two things in the United States. You can have
17:44
Speaker 2: higher production, or you can have oil at forty five
17:48
Speaker 2: to fifty five a barrel. I don't think you can
17:51
Speaker 2: have both. And so if you end up with let's
17:57
Speaker 2: say that the US convinces the Saudis to you know,
18:01
Speaker 2: pull back on their production cuts, which I think the
18:03
Speaker 2: Saudi's are worthholding like three to four million barrels a
18:05
Speaker 2: day of spare capacity right now. Sure, okay, the Trump
18:08
Speaker 2: administration says, yeah, you guys start pumping more oil prices
18:12
Speaker 2: come down. That's not an environment where US producers just
18:15
Speaker 2: start jumping up and down saying yes, this is the
18:18
Speaker 2: time to drill like more holes in the ground. They're saying, no,
18:21
Speaker 2: we got burned by this back in twenty fifteen. We're
18:25
Speaker 2: not gonna do it again. So I think you can
18:29
Speaker 2: have one of two things, which is higher domestic production
18:33
Speaker 2: or lower prices. Getting both is probably pretty hard because
18:41
Speaker 2: the incentives are completely skewed. For a US producer. If
18:45
Speaker 2: your investment goes badly, you're at a business and out
18:47
Speaker 2: of a job, which happened in twenty fifteen to a
18:50
Speaker 2: ton of people in that business. Yep. If you are
18:53
Speaker 2: a Russian producer and you produce too much oil, okay,
18:57
Speaker 2: you're like you're owned by the state anyways, Like what
18:59
Speaker 2: get who cares? It's just okay, the state isn't making
19:03
Speaker 2: as much on a per barrel basis. Same with the Saudis.
19:07
Speaker 2: It's no one loses their job at Saudi or Ramco
19:11
Speaker 2: because they produce too much oil. Yeah.
19:13
Speaker 3: I think the one thing would be if you see
19:15
Speaker 3: an unexpected price shock to the upside, then maybe oil
19:20
Speaker 3: producers are better positioned to drill more and get that
19:22
Speaker 3: back down.
19:24
Speaker 2: Even there, like, how how long is that gonna last?
19:26
Speaker 2: Because you drill well today you're projecting profits for like
19:30
Speaker 2: five to seven years. Yeah, you know, quick break here.
19:34
Speaker 2: When we come back, we get the trivia answer, and
19:36
Speaker 2: then we're gonna preview this Friday's jobs report.
19:45
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20:17
Speaker 4: Trivia question today was who did the Patriots beat in
20:20
Speaker 4: the Super Bowl thirty six and fifty three. That would
20:24
Speaker 4: be the Rams in twenty excuse me in two thousand
20:27
Speaker 4: and two they beat the Rams twenty to seventeen, and
20:29
Speaker 4: beat the Rams again in twenty nineteen with the score
20:32
Speaker 4: of thirteen to three and one of the most boring
20:35
Speaker 4: games I've ever witnessed. Louis from Dudley, mass was our
20:38
Speaker 4: winner today, taking home a Financial Exchange Show t shirt.
20:42
Speaker 4: Congrats to Louis and we played trivia every day here
20:45
Speaker 4: on the Financial Exchange. See complete contest rules at Financial
20:49
Speaker 4: Exchange Show dot com.
20:51
Speaker 2: Mike, we got a job report kicking off this Friday.
20:53
Speaker 2: It's going to be the first one of twenty twenty five,
20:56
Speaker 2: or at least the first one for data in twenty
20:59
Speaker 2: twenty five. Expectations are for one hundred and seventy thousand,
21:02
Speaker 2: two hundred and five thousand jobs created, unemployment rates staying
21:05
Speaker 2: at four point one percent, and basically there have been
21:09
Speaker 2: no signs in any of like the shorter term higher
21:12
Speaker 2: frequency dataake weekly jobless claims to suggest that there's been
21:15
Speaker 2: any shift in US hiring during the month of January. Yeah,
21:19
Speaker 2: so we'll get this initial read.
21:21
Speaker 3: But I think it's important to go back to what
21:22
Speaker 3: seems to be the narrative right now, which is, whether
21:25
Speaker 3: you're talking to economists or investors, the recession seems to
21:29
Speaker 3: be the last thing on people's mind right now, which
21:31
Speaker 3: is oftentimes the worst, the worst narrative to have, because
21:34
Speaker 3: that's what it might sneak up on you. But the
21:37
Speaker 3: market itself does not seem concerned about job loss in
21:40
Speaker 3: recession and much more focused on the inflationary impact of
21:45
Speaker 3: the hiring market and what that could mean anything else
21:48
Speaker 3: that really Yeah, to touch on on this Friday's jobs report,
21:52
Speaker 3: I don't really think so. But it also follows a
21:54
Speaker 3: trend of more working age Americans, sorry, more retirement age
22:00
Speaker 3: Americans continuing to work, and the data on this is
22:04
Speaker 3: a bit mixed. I mean, certainly I think this is
22:07
Speaker 3: the case. If you were to compare Americans today to
22:10
Speaker 3: the nineteen sixties. Unfortunately, I don't really have great data
22:13
Speaker 3: on what portion of Americans in nineteen sixties were working
22:18
Speaker 3: past the age of sixty five. No, the data that
22:20
Speaker 3: I have for employment to population ratio goes back to
22:23
Speaker 3: eight right, and that's, you know, a pretty similar timeframe
22:27
Speaker 3: to today. But I do buy the idea that more
22:30
Speaker 3: Americans would be are working today, and I think I
22:35
Speaker 3: think mainly there's one reason, which is generally speaking, compared
22:40
Speaker 3: to fifty years ago, wages haven't kept pace with prices.
22:44
Speaker 3: And then there's also been some deterioration of things like
22:48
Speaker 3: pensions that previously supported Americans in retirement that just don't
22:53
Speaker 3: exist to the same extent these days. Like Social Security
22:56
Speaker 3: obviously still there quite robust and has even been expanded
22:59
Speaker 3: over those decades, but the pension system was a much
23:04
Speaker 3: easier system for people to adapt to. And so it's
23:07
Speaker 3: not that everyone's working longer. It's that some people not
23:11
Speaker 3: great at planning are needing to work in retirement to
23:15
Speaker 3: afford their lifestyle.
23:16
Speaker 2: So you think this is more a function of I
23:20
Speaker 2: need to work rather than I'm still healthy and want
23:23
Speaker 2: to work.
23:23
Speaker 3: I think there's plenty of that too, And you know, certainly,
23:27
Speaker 3: life expectancy is longer today than it was fifty years ago,
23:30
Speaker 3: and that plays a role in all of this. You know,
23:32
Speaker 3: Americans are healthier at sixty five than they were decades previously.
23:37
Speaker 3: And the nature of work that we do in this
23:39
Speaker 3: country too, right, You probably didn't have a lot of
23:43
Speaker 3: sixty seven year olds manufacturing cars. You might have some
23:47
Speaker 3: sixty seven year olds sitting behind a desk and working
23:49
Speaker 3: for you know, booking holdings for example, who has a
23:52
Speaker 3: bunch of benefits that favor older Americans. I think the
23:56
Speaker 3: main message that I take away, or you know, that
24:01
Speaker 3: I hear from working older adults, and also, you know
24:05
Speaker 3: is a key part of my message to them when
24:07
Speaker 3: I'm talking to them about retirement is there's a number
24:10
Speaker 3: of really good reasons to retire, But some of the
24:15
Speaker 3: worst reasons to retire are also some of the most
24:17
Speaker 3: common ones. I hear, Well, I'm turning sixty five, I'm
24:20
Speaker 3: Medicare eligible, I'm supposed to retire. You know, I'm just
24:23
Speaker 3: done with this job. I'm fed up. I want to
24:25
Speaker 3: be out. The best reasons that I hear to retire
24:29
Speaker 3: are consistently from people who say, I am really passionate
24:34
Speaker 3: about X, Y or Z. I don't have enough time
24:37
Speaker 3: to pursue that because of my job, and I want
24:40
Speaker 3: to retire to go spend more time doing that. That
24:44
Speaker 3: has nothing to do with money. You'll notice I didn't
24:46
Speaker 3: talk about pension or security or any of that during
24:49
Speaker 3: that conversation. It was purely a conversation of I want
24:52
Speaker 3: more time to be able to focus on this, and
24:54
Speaker 3: that's why I'm retiring. It's not to say you can't
24:57
Speaker 3: have a financially successful retirement by going the other route.
25:00
Speaker 3: Point would be merely I've watched a lot of people
25:02
Speaker 3: do it, and I've seen a lot of unhappy people
25:04
Speaker 3: or unsuccessful retirees. By unsuccessful, I mean blowing money on
25:08
Speaker 3: a bunch of things that they didn't plan for, not
25:10
Speaker 3: planning appropriately, or frankly thinking that they want to retire,
25:13
Speaker 3: and then going back to work in a different job
25:15
Speaker 3: because they realized, yeah, I'm actually not happy, uh, because
25:19
Speaker 3: I didn't have that thing that I was planning for.
25:23
Speaker 3: My message to folks, if you are closing in on
25:25
Speaker 3: one of those key dates or it's been going through
25:28
Speaker 3: your mind of hey, I want to be able to
25:30
Speaker 3: be moving towards retirement. One of the best things you
25:33
Speaker 3: can do for yourself is check the boxes on your
25:37
Speaker 3: financial security. I'm telling you firsthand that the relief that
25:41
Speaker 3: I see from people while they are even still working
25:46
Speaker 3: by doing the homework, understanding what their financial lives would
25:51
Speaker 3: look like and checking the box on yeah, I can't
25:53
Speaker 3: afford to retire at this point. Just the relief that
25:56
Speaker 3: people get and the happier they are in life once
25:59
Speaker 3: they got through all that and they can go into
26:01
Speaker 3: work saying hey, I'm here because I want to be,
26:04
Speaker 3: but not because I need to be financially, it does
26:07
Speaker 3: deliver a lot of clarity and distressing, I think, from
26:11
Speaker 3: people's work lives. If you are falling into that category
26:14
Speaker 3: of closing in on retirement, even if you are a
26:17
Speaker 3: decade away, let someone give you that peace of mind
26:20
Speaker 3: when it comes to your financial security. We had Armstrong
26:22
Speaker 3: Advisory Group advise our clients on this type of subject
26:25
Speaker 3: every single day, and if you could use some advice
26:29
Speaker 3: around it, please give us a ring at eight hundred
26:31
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26:34
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26:43
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:46
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26:48
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26:52
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26:54
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26:57
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26:59
Speaker 2: New Treasury Secretary Scott Bessen is at the Helm this
27:02
Speaker 2: week for his first quarterly refunding announcement. Basically, this is
27:07
Speaker 2: when the Treasury announces their plans for bond issuance for
27:10
Speaker 2: the upcoming quarter, and it doesn't usually get a ton
27:15
Speaker 2: of fanfare. It started to very briefly back in I
27:18
Speaker 2: think late twenty three, early twenty four, But honestly, like,
27:23
Speaker 2: don't waste your time looking through this. If you're just
27:25
Speaker 2: not if you're not trading interest rates on a daily basis,
27:29
Speaker 2: you probably don't need to pay attention to the quarterly
27:32
Speaker 2: refunding Again.
27:33
Speaker 3: So what was the criticism Levy at then Treasury Secretary
27:36
Speaker 3: Janet Yellen when it came to this, Because Besson played
27:38
Speaker 3: a role in that, I believe.
27:40
Speaker 2: Yeah, it was basically, hey, she was skewing the mix
27:43
Speaker 2: towards more shorter term debt in order to try to
27:46
Speaker 2: keep long term rates down and kind of goose the economy,
27:50
Speaker 2: and in doing so, was not necessarily running the treasury
27:55
Speaker 2: the way that would be best for the long.
27:57
Speaker 3: Term, because what that just means is more of the
28:01
Speaker 3: funding liabilities come up to renewal very short term.
28:05
Speaker 2: So it remains to be seen whether best makes any
28:08
Speaker 2: changes for this week's quarterly refunding announcement just because the
28:13
Speaker 2: guy was just confirmed. I think was last Thursday that
28:16
Speaker 2: he finally was confirmed. I don't think any of his
28:20
Speaker 2: main staffers, you know, the undersecretaries of the Treasury and
28:23
Speaker 2: so on and so forth, are confirmed yet, and so
28:26
Speaker 2: you've got a little bit of work to be done there.
28:28
Speaker 2: So maybe you start to see some incremental changes, but
28:31
Speaker 2: ultimately I think this is gonna be one where, Hey,
28:34
Speaker 2: Bestin's in a tough spot. He's got a you know,
28:38
Speaker 2: deficit on an annual basis that has been at or
28:41
Speaker 2: around six to seven percent the last couple of years. Uh,
28:44
Speaker 2: there is obviously a very large outstanding deficit as well,
28:48
Speaker 2: and you're trying to pass through tax cuts. So, hey,
28:51
Speaker 2: Treasury is the department of the government that make sure
28:55
Speaker 2: that the bills are paid, And how do you fund
28:57
Speaker 2: the government in the right way so that you're able
29:01
Speaker 2: to you know, keep funding costs stable, you know, keep
29:04
Speaker 2: your investor, keep basically investors in America happy, uh, and
29:08
Speaker 2: make sure all the bills get paid. He's got a
29:10
Speaker 2: tough job. But Besson is someone who we talked about
29:14
Speaker 2: this when he was nominated, really really smart dude, you know,
29:18
Speaker 2: like just qualified through the roof. And so if there's
29:23
Speaker 2: someone who you you know, would expect has the creativity,
29:28
Speaker 2: the knowledge, and the foresight to be able to say,
29:31
Speaker 2: this is how I need to handle things in all
29:33
Speaker 2: of these different situations, you would expect it to be
29:36
Speaker 2: him because he he knows his stuff, especially when it
29:40
Speaker 2: comes to currencies and foreign exchange. And that's exactly what
29:42
Speaker 2: you want from a Treasury secretary. So we'll see what
29:46
Speaker 2: happens is he starts to get up to speed. But yeah,
29:48
Speaker 2: he's going right into it this week with that refunding announcement.
29:53
Speaker 2: Quick break here. When we come back, it's time for
29:56
Speaker 2: stack Roulette.
29:57
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31:06
Speaker 2: What do you got for me, Michael?
31:08
Speaker 3: The so called Nil Rules opened up college athletics for
31:12
Speaker 3: all sorts of brand ambassadors, basically allowing college athletes to
31:16
Speaker 3: get paid for sponsorship deals and all sorts of things
31:19
Speaker 3: without affecting their eligibility. This is now moving a little
31:24
Speaker 3: bit further down market to high school students and specifically
31:29
Speaker 3: minors under eighteen now signing some sponsorship deals. And I
31:35
Speaker 3: think my first reaction to it was just kind of visceral, distasteful. Right,
31:41
Speaker 3: It just kind of made me feel a little bit dirty.
31:45
Speaker 3: I suppose, if I'm gonna take a further look at it,
31:49
Speaker 3: I have a difficult time feeling any worse about this
31:52
Speaker 3: than I do, say childhood actors, right, Like, you have
31:55
Speaker 3: plenty of seven year olds who got into acting at
31:58
Speaker 3: that stage and relied on their parents to negotiate contracts
32:01
Speaker 3: and all sorts of things on their behalf. I also
32:05
Speaker 3: find that oftentimes a little bit distasteful. But beyond that,
32:08
Speaker 3: I'm not sure I have much to critique here. Right,
32:10
Speaker 3: He's a seventeen year old star athlete, likely going to
32:13
Speaker 3: be going college. Parents legally or whoever his guardians are
32:17
Speaker 3: had to sign the contract on his behalf. And while
32:23
Speaker 3: I might find it slightly distasteful, and I'm not sure
32:26
Speaker 3: how I feel about a seventeen year old being a
32:27
Speaker 3: brand ambassador, I don't know that I find it any
32:31
Speaker 3: worse in other stuff that we do in regards to
32:33
Speaker 3: young kids in media.
32:36
Speaker 2: No, I mean, look, here's the thing, the difference, Like,
32:41
Speaker 2: if you're talking about like when you're gonna get paid.
32:43
Speaker 2: I've long been a proponent that college athletes should be
32:45
Speaker 2: able to get paid whatever the heck they can earn
32:47
Speaker 2: for whatever the heck they do, because it's the only
32:51
Speaker 2: placed in America where we're like, no, you're good at this.
32:55
Speaker 2: Not only can you not make money on your talent,
32:57
Speaker 2: you can't make money being recognized for your talent just
33:00
Speaker 2: seemed ludicrous. So if I'm gonna sit here and be like, hey,
33:03
Speaker 2: an eighteen year old should be able to make money
33:05
Speaker 2: off their talent and then say like a seventeen year
33:07
Speaker 2: old shouldn't, Like, no, that's not logically consistent.
33:10
Speaker 3: Now, and what about like a eight year old star
33:13
Speaker 3: hockey player that wants to endorse Bawer hockey sticks Shaman Bauer. Yeah, Like,
33:20
Speaker 3: I don't blame the kid, right, Like the kid's not
33:23
Speaker 3: old enough to even know what's going on. Yeah, I
33:25
Speaker 3: blame the company because quite honestly.
33:27
Speaker 2: Draw a line somewhere. Well, here's the thing. There are
33:29
Speaker 2: a few things to know. The first is Lebron James
33:35
Speaker 2: probably is the only athlete. Who's ever delivered on the
33:40
Speaker 2: hype from a young age. Yeah, maybe Sidney Crosby. Also,
33:46
Speaker 2: other than that, I really struggle to find someone where
33:48
Speaker 2: you're like that kid was identified at like ten years
33:51
Speaker 2: old and lived up to the hype. So generally, like you,
33:57
Speaker 2: you don't know at that age, who's going to be
34:00
Speaker 2: the latest and greatest. Do you guys know who Sean
34:03
Speaker 2: Burrows is?
34:04
Speaker 1: No?
34:06
Speaker 4: Yeah, I think baseball baseball player. Yesp played for the
34:11
Speaker 4: San Diego Potters.
34:11
Speaker 2: He was a third baseman. His Little League World Series
34:14
Speaker 2: team won the Little League World Series and he hit
34:16
Speaker 2: like four thousand home runs when he was twelve years old,
34:19
Speaker 2: and like basically would have been one of these kids
34:22
Speaker 2: that like you'd be like, oh, like that's you know,
34:23
Speaker 2: that's who I'm endorsing or who's gonna like have all
34:27
Speaker 2: these endorsements. He had like a short major league career.
34:31
Speaker 2: I think it was maybe like five or six years.
34:33
Speaker 2: He was fine, like maybe he made like one All
34:35
Speaker 2: Star Game even, but he wasn't like the guy. You know,
34:40
Speaker 2: tough to know what a thirteen year old is going
34:42
Speaker 2: to turn into. Mike, you're a hockey fan, you know
34:46
Speaker 2: who Grant Wallstrom is Yeah, he's on the Bruins right now. Yeah,
34:50
Speaker 2: third liner. Not great, Like I think he has like
34:52
Speaker 2: one goal in like fifteen games since being signed as
34:54
Speaker 2: a free agent. Ye. He was the kid who back
34:58
Speaker 2: like fifteen years ago he did the crazy like spin
35:01
Speaker 2: around lacrosse thing when he was like ten years old
35:03
Speaker 2: on guard nice and everyone's like, Oh, this guy's gonna
35:05
Speaker 2: be He's fine. He's playing in the NHL, but like,
35:09
Speaker 2: no one knows who Grant Wallstrom is My point on
35:12
Speaker 2: this is twofold ay, Like, if you're trying to like
35:17
Speaker 2: figure out, hey, how do we get like an eight
35:18
Speaker 2: year old to endorse our product, You're probably not gonna
35:20
Speaker 2: pick the right one to begin with. B If you're
35:23
Speaker 2: the parent of an eight year old, unless you actually
35:27
Speaker 2: have like real financial challenges and like I mean, like,
35:30
Speaker 2: can you not keep a roof over your head? I
35:33
Speaker 2: don't think you understand what it means to like have
35:36
Speaker 2: your eight year old taking on that kind of responsibility
35:39
Speaker 2: and how it can mess them up. Yah. At that
35:41
Speaker 2: kind of age, if you're talking about like sixteen seventeen
35:44
Speaker 2: year olds where hey, they're being talked about his number
35:47
Speaker 2: one picks in their you know, respective drafts in this
35:50
Speaker 2: totally different because those kids have already gone through the ringer,
35:53
Speaker 2: They've already had so much scrutiny on them for the
35:55
Speaker 2: last seven eight years as top prospects in their sports
35:59
Speaker 2: that if they are gonna go into those sports, they're
36:01
Speaker 2: only gonna have more of it. And so fine, you
36:03
Speaker 2: want to do that. There, I don't have an issue.
36:06
Speaker 2: I got a real problem with companies trying to target
36:09
Speaker 2: kids I would say probably below sixteen, and with parents
36:16
Speaker 2: basically using their kids to make money in any way,
36:19
Speaker 2: shape or form before they're the same age, unless they're
36:21
Speaker 2: like really struggling financially. Because and this is not just
36:26
Speaker 2: for sports. I see like the kids that have their
36:29
Speaker 2: own YouTube channels where they're making millions of dollars, like
36:32
Speaker 2: opening toys as nine year olds and stuff. Yeah, and
36:37
Speaker 2: it's it's really tough to.
36:38
Speaker 3: Not think the worst of those situations. You not assume
36:41
Speaker 3: the worst. That is what I mean there.
36:44
Speaker 2: I don't want to seem like anti money, but yo,
36:51
Speaker 2: what are we doing here? Yeah? Yeah, what are we
36:54
Speaker 2: doing here? Just from like the Elemon perspective, And this
36:59
Speaker 2: is before you even get into this stuff with you know,
37:03
Speaker 2: women under the age of sixteen, where it's like you
37:06
Speaker 2: got some real problems with how that ends up being
37:09
Speaker 2: marketed and some real sketchy stuff that can happen there.
37:13
Speaker 2: So yeah, that's the distaste. Yeah, I got to I
37:16
Speaker 2: got at my head around. It's one thing if you're this,
37:20
Speaker 2: you know, if you are being claimed to be the
37:22
Speaker 2: next Lebron James at like seventeen, yeah, like get your money.
37:27
Speaker 2: But if you're eight, nine, ten, eleven years old, I
37:30
Speaker 2: kind of say shame on the companies for even asking
37:33
Speaker 2: the parents. I guess, look, you probably don't know what
37:35
Speaker 2: you're getting into in a lot of cases, and the
37:37
Speaker 2: kids in a lot of situations. I just feel kind
37:39
Speaker 2: of bad for because you're losing a lot of your childhood,
37:41
Speaker 2: I think. But I'm kind of not even old fashioned
37:45
Speaker 2: on that stuff, so I don't know. Your mileage may vary.
37:47
Speaker 2: I want to talk about Meta They've now invested, uh
37:50
Speaker 2: or they're about to invest a total of one hundred
37:52
Speaker 2: billion dollars in the metaverse. Lots show for it. End
37:56
Speaker 2: of story. Great, that's all we got on. I don't
38:01
Speaker 2: know you could fit that much money down a toilet.
38:04
Speaker 2: It's a really big toilet, Michael. It's a metaversical toilet. Indeed,
38:09
Speaker 2: you can fit anything down that puppy. Let's take a
38:12
Speaker 2: quick break here for the rest of the day. The
38:14
Speaker 2: Dow is off forty points, SMP off forty points, NASDAC
38:17
Speaker 2: off two eleven. We'll see you tomorrow on the Financial
38:19
Speaker 2: Exchange