Latest / The Financial Exchange Show / Stock Market Selloff, Rising Oil Prices, and the Future of Big Tech Regulation

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Stock Market Selloff, Rising Oil Prices, and the Future of Big Tech Regulation · The Financial Exchange Show

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  Speaker 1: and Mike Armstrong.
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  Speaker 2: Chuck, Mike and Ben with you here.
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  Speaker 3: And as we get things fired up, we got stock
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  Speaker 3: selling off again, but off their lows. We'll talk a
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  Speaker 3: little bit about what's moving between different asset classes here,
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  Speaker 3: because we got the S and P five hundred down
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  Speaker 3: about forty four points right now, the Dow Jones Industrial
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  Speaker 3: Average down two ninety six, and the Nasdaq Composite down
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  Speaker 3: two thirty nine. So anyway, from about a two thirds
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  Speaker 3: of a percent to a one point one percent slide
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  Speaker 3: in equities, Tenure Treasury is up one point four basis
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  Speaker 3: points to four point four to three percent. That has
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  Speaker 3: come in, though earlier today that tenure was touching four
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  Speaker 3: point four eight four uh, so it was up almost
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  Speaker 3: eight basis points. Uh And that tenure coming in, I
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  Speaker 3: think is kind of what is propelled stocks off their lows.
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  Speaker 3: Even as energy prices have continued to move up. Crude
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  Speaker 3: oil West Text Intermedia up three to sixty five barreled
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  Speaker 3: in ninety eight thirteen. We've got Brent crude up two
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  Speaker 3: eighty three a barrel to one ten eighty four. So
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  Speaker 3: again things moving back up over the course of this
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  Speaker 3: week after coming down earlier in the week there. On
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  Speaker 3: energy prices, we've got the dollar index a point zero
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  Speaker 3: five percent to ninety nine seventy six, and gold up
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  Speaker 3: one hundred and twenty four bucks an ounce to forty
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  Speaker 3: five oh one.
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  Speaker 2: Gold has been all over the.
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  Speaker 3: Place this week with these big two to three percent
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  Speaker 3: swings on a daily basis. So that's what we've got
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  Speaker 3: moving in markets. Triple a national averagur gas prices no
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  Speaker 3: movement overnight, still hugging holding just under four dollars a gallon.
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  Speaker 3: With these latest moves the last couple days, we'll probably
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  Speaker 3: get over four dollars a gallon nationally within the next
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  Speaker 3: day or two, but for now we're at three ninety
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  Speaker 3: seven and eight tenths. Though diesel did move up another
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  Speaker 3: half cent to five already eight diesel still about forty
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  Speaker 3: three cents below the all time high from June of
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  Speaker 3: twenty twenty two.
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  Speaker 4: In terms of where stocks are, I feel like contextualizing
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  Speaker 4: a little bit right. We're seeing stock prices on the
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  Speaker 4: S and P five hundred we last saw in about
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  Speaker 4: September of last year. On the interest rate side of things,
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  Speaker 4: interest rates on the ten year about where they were
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  Speaker 4: last summer, so again just contextualizing the reversal that we've
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  Speaker 4: been seeing here, and that interest rate reversal is a
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  Speaker 4: significant one. Right.
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  Speaker 2: It's do you know where the thirty year mortgages today?
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  Speaker 4: I was guessing like five six you mean six? Sorry?
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  Speaker 4: Sixty six yeah, sixty six to two?
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  Speaker 5: Yeah. Yeah, So you know a few things that are
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  Speaker 5: important there.
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  Speaker 4: One, you know, obviously, heading right into the spring housing market,
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  Speaker 4: we are now seeing interest rates that are still a
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  Speaker 4: little bit lower than where they were last spring, but
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  Speaker 4: not by much, and a lot higher than was anticipated.
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  Speaker 4: And those expectations I think are part of a significant
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  Speaker 4: piece of what matters. The very clear expectation for twenty
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  Speaker 4: twenty six was that interest rates would continue down, maybe
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  Speaker 4: not at you know, really compelling pace, but certainly that
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  Speaker 4: they would not go up. And that entire expectation tree
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  Speaker 4: has shifted right even at the April meeting for the Fed.
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  Speaker 4: It's not going to happen, but there is a five
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  Speaker 4: to ten percent chance of a rate hike being priced
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  Speaker 4: into that April meeting now, whereas previously it was all
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  Speaker 4: keep flatter, stay with rate cuts.
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  Speaker 2: Yeah.
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  Speaker 3: So that's where things stand in markets at the moment.
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  Speaker 3: We got a piece here from Bloomberg. Yesterday we talked
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  Speaker 3: a little bit about these rulings against Meta and Alphabet
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  Speaker 3: and this piece of titled Meta and Alphabet's courtroom losses
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  Speaker 3: may not last, and it goes into a little bit
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  Speaker 3: more detail about what we covered yesterday. Yeah, so two
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  Speaker 3: big court cases. One the biggest one was a New
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  Speaker 3: Mexico case that awarded three hundred and seventy five million
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  Speaker 3: dollars against Meta for harm that its products alleged caused
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  Speaker 3: to children and teens. On Wednesday, then you had a
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  Speaker 3: California jury handing down a six million dollars against Meta
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  Speaker 3: and Alphabet's Google for similar things, social media addiction, which
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  Speaker 3: turned into broader mental health challenges. And both of them
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  Speaker 3: are being studied because for years, for decades.
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  Speaker 4: Now, these types of companies have been protected by a
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  Speaker 4: piece of law that was put in place back in
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  Speaker 4: nineteen ninety six called Section two thirty of the Communications
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  Speaker 4: Decency Act. We've talked about it at length in this program,
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  Speaker 4: but effectively, what it protects you against is if you
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  Speaker 4: operate a website of any sort I am not. Let's
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  Speaker 4: say I operate a newspaper that's got an online subscription
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  Speaker 4: and someone posts something truly vile and illegal in the
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  Speaker 4: comments section. Maybe they post a video of something illegal,
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  Speaker 4: maybe they say something truly harmful. I, the owner of
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  Speaker 4: the newspaper, am not responsible for the commentary put into
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  Speaker 4: the comments section. Likewise, Facebook and YouTube are not responsible
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  Speaker 4: if a member of isis posts a video to their
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  Speaker 4: YouTube page of a beheading. Facebook is not responsible if
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  Speaker 4: somebody posts something that leads to, you know, endangering a
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  Speaker 4: child on Facebook. These cases seemingly found a way around that.
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  Speaker 4: And the question is will it be able to stand
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  Speaker 4: in any meaningful way.
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  Speaker 3: And I suspect, not knowing anything about not being an
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  Speaker 3: actual lawyer, I suspect they're going to have a tough
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  Speaker 3: time standing on those merits.
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  Speaker 5: History would be yeah, history would would agree with you.
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  Speaker 3: And here's the thing, because look, when we talk about
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  Speaker 3: section two thirty, there are really good reasons for it
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  Speaker 3: to exist shortly, you know, again, like you talk about
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  Speaker 3: the potential chilling effect that you have on the overall
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  Speaker 3: development of the Internet, and it could be significant if
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  Speaker 3: you did not have that in place to begin with.
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  Speaker 2: On the other hand, to be able to like.
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  Speaker 3: Use it, just as you know, to broadly say, well,
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  Speaker 3: like we can't do anything about this and there's no
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  Speaker 3: you know, liability to us as a result of it.
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  Speaker 3: When you start getting some really gnarly stuff again, you
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  Speaker 3: know when you talk about like some of the really
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  Speaker 3: bad stuff that's out there.
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  Speaker 4: And by the way, you know they have but they've
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  Speaker 4: primarily done it. They have policed themselves YouTube and Facebook
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  Speaker 4: to some degree out of a concern for advertising.
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  Speaker 3: Right.
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  Speaker 4: You know, Procter and Gamble does not want the barely
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  Speaker 4: done it agreed, but like Tide doesn't want to appear
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  Speaker 4: next to an isis video is the big example that
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  Speaker 4: I can remember. But yeah, they've barely done anything. And
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  Speaker 4: the question is can these There's two things that I
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  Speaker 4: think they need to prove. One would be that the
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  Speaker 4: sites themselves are in some way addictive and that the
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  Speaker 4: creators of the sites knew about it and took steps
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  Speaker 4: to bury that evidence.
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  Speaker 5: And not only.
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  Speaker 4: That they're addictive, but they then cause long term harm
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  Speaker 4: that you can somehow put monetary damages onto.
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  Speaker 3: And that's going to be the part that I still
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  Speaker 3: think is tough to get to because again, when we
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  Speaker 3: look at the cigarette issue that we talked about yesterday,
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  Speaker 3: you had a very clear comp Hey, show me lung
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  Speaker 3: cancer rates in smokers versus non smokers and death rates
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  Speaker 3: from lung cancer and boom, here's like your claim, like
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  Speaker 3: you can very easily you could put a monetary value
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  Speaker 3: on that.
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  Speaker 2: With this, it's.
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  Speaker 3: More complicated simply because mental health diagnoses can change and
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  Speaker 3: evolve over time. You basically can never point to one
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  Speaker 3: clear cause when it comes to them.
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  Speaker 5: And what's the control group?
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  Speaker 3: How many people don't use social media at all in
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  Speaker 3: today's day and age.
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  Speaker 4: So we're gonna look at mental health issues amongst Mennonites
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  Speaker 4: versus the general population or something like you know, Yeah,
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  Speaker 4: there's not a lot of people that didn't have access
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  Speaker 4: to this stuff in their teens.
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  Speaker 3: So this is where we stand with those trials. We'll
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  Speaker 3: see where things go. And again it's i'm I'm I
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  Speaker 3: wish that there could be more done against these companies
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  Speaker 3: because I truly just don't enjoy them.
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  Speaker 4: The social media companies. Yes, yeah, by the way, I
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  Speaker 4: had no offense. I have no idea if Menonites use
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  Speaker 4: social media or the internet. Sorry for just throwing them
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  Speaker 4: out there.
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  Speaker 2: Yeah, wait to throw them under.
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  Speaker 6: The bus every day. We have to apologize them.
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  Speaker 2: Not every day, but at least a couple of days
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  Speaker 2: a week. Let's take a quick break here.
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  Speaker 3: When we come back, we've got trivia and then we'll
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  Speaker 3: talk private credit right after.
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  Speaker 6: Time for trivia here on the Financial Exchange. On this
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  Speaker 6: day in nineteen eighty, Mount Saint Helens became active for
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  Speaker 6: the first time in one hundred and twenty three years.
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  Speaker 6: On May eighteenth, nineteen eighty, Mount Saint Helens erupted.
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  Speaker 2: There are one.
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  Speaker 6: the most of any country in the world. Today's question
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• 11:17
  Speaker 3: It's not Florida, right, No, no, okay, just make it sure.
• 11:23
  Speaker 3: Let's talk a little bit about private credit from the
• 11:26
  Speaker 3: Wall Street Journal. The private credit industry's trouble, surging redemptions,
• 11:30
  Speaker 3: slower fundraising, and ultimately this matters. Well, we don't know
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  Speaker 3: how much it matters right now. The risk is that
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  Speaker 3: two things potentially happen as a result of it. Uh.
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  Speaker 2: Number one.
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  Speaker 3: Uh, The more direct risk is that some of the
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  Speaker 3: companies that hold a lot of this private credit might
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  Speaker 3: end up finding that there's stuff, the stuff that they're
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  Speaker 3: left holding isn't worth very much, and you end up with,
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  Speaker 3: you know, some big negative impacts in their balance sheets
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  Speaker 3: by holding it, you.
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  Speaker 5: Mean having bought it as an investment.
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  Speaker 2: Yeah.
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  Speaker 3: The second piece, the one that would be more concerning
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  Speaker 3: to me, is the one that we've touched on previously,
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  Speaker 3: which is, Hey, the reason that private credit exists is
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  Speaker 3: because there are a lot of you know, mid size
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  Speaker 3: firms out there that need a one hundred million dollar
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  Speaker 3: loan that a bank isn't necessarily going to make to them.
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  Speaker 3: They're too small to do a bond offering, and so
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  Speaker 3: they can go to a private credit fund who gives
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  Speaker 3: them the money and they can grow.
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  Speaker 2: Their business using it.
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  Speaker 3: If that supply dries up to a certain extent, doesn't
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  Speaker 3: have a measurable impact on the growth of the US economy,
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  Speaker 3: maybe we don't know because we don't know how big
• 12:52
  Speaker 3: the private credit market is. We don't know how quickly
• 12:54
  Speaker 3: it's been growing each year, and we don't know how
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  Speaker 3: much US growth is financed directly through that that couldn't
• 13:01
  Speaker 3: be financed somewhere else. Because one of the options on
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  Speaker 3: this might be, Hey, we couldn't get the rate we
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  Speaker 3: wanted through a bank, so we went to private credit.
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  Speaker 3: And now if we go to a bank, we just
• 13:12
  Speaker 3: have to pay an extra one or two percent in interest.
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  Speaker 3: We'll still do that, and so we can we can grow,
• 13:17
  Speaker 3: but we just have to adjust our pricing in order
• 13:19
  Speaker 3: to cover those higher rates. So that there are all
• 13:22
  Speaker 3: kinds of permutations of how this can unfold, But it
• 13:25
  Speaker 3: continues to get us to a place where we say, hey,
• 13:28
  Speaker 3: things don't look good in the private credit space, but
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  Speaker 3: we don't know how big the problem is yet. But
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  Speaker 3: none of it really fills.
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  Speaker 2: Me with the warm and fuzzies.
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  Speaker 4: If I'm being honest, you know what, I don't think
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  Speaker 4: I realize again, this stuff is so far removed from
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  Speaker 4: the everyday investor. Apparently a large portion of private credit
• 13:46
  Speaker 4: is actually reviewed and rated by ratings agencies.
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  Speaker 5: What portion I.
• 13:54
  Speaker 4: I'm just kind of looking through this here and seeing
• 13:56
  Speaker 4: that yeah S and p Moodies, Fitch facilitate the things
• 14:00
  Speaker 4: and put ratings on them, and I'm just curious as
• 14:05
  Speaker 4: to how they go about doing so. One, because of
• 14:08
  Speaker 4: the private nature of all this stuff and the privately
• 14:10
  Speaker 4: held companies that they are lending to, and whether or
• 14:13
  Speaker 4: not they are any good at rating something that is
• 14:17
  Speaker 4: pretty uniquely new over the course of the last fifteen
• 14:21
  Speaker 4: years or so. And then finally, how much the buyers
• 14:23
  Speaker 4: of this stuff are relying on those ratings to justify it.
• 14:26
  Speaker 3: Because if there's one thing that we know, it's that
• 14:28
  Speaker 3: the rating agencies are always on top of it when
• 14:32
  Speaker 3: it comes to rating new products that are packaged up
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  Speaker 3: for investors to hold for higher than expected, you know,
• 14:39
  Speaker 3: higher than normal rates of return.
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  Speaker 5: Yeah.
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  Speaker 4: So again, why some of this matters is there are
• 14:44
  Speaker 4: certain organizations that can't buy investments without a certain rating
• 14:49
  Speaker 4: on them from one of these major agencies.
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  Speaker 5: It is why a whole bunch of the banks had a.
• 14:54
  Speaker 4: Whole boatload of really garbage mortgage bonds on their books
• 15:00
  Speaker 4: ahead of the Great Financial Crisis. And yeah, I would
• 15:03
  Speaker 4: find it likely that those those same companies now or
• 15:07
  Speaker 4: different companies now are buying this stuff, at least in
• 15:09
  Speaker 4: part based on the ratings agencies. It's not their recommendation,
• 15:13
  Speaker 4: it is their review and you know, printing of a
• 15:17
  Speaker 4: score on them.
• 15:19
  Speaker 3: Let's talk a little bit about SpaceX, which is expected
• 15:22
  Speaker 3: to go through an IPO at some point in the
• 15:26
  Speaker 3: coming months. Supposedly. Again, we'll probably be getting more details
• 15:31
  Speaker 3: on this in the next couple of weeks, but the
• 15:35
  Speaker 3: chatter out there is that you may see this IPO
• 15:40
  Speaker 3: before the fourth of July, and the expectations are that
• 15:44
  Speaker 3: it's going to raise somewhere between forty and eighty billion
• 15:46
  Speaker 3: dollars in the deal. So it's again you're talking about
• 15:50
  Speaker 3: just a huge deal here. There's been all kinds of
• 15:53
  Speaker 3: you know, conversations between SpaceX and indicies to see if
• 15:58
  Speaker 3: they can get included in them.
• 15:59
  Speaker 5: Earlier.
• 16:00
  Speaker 3: Also chatter that up to thirty percent of the IPO
• 16:05
  Speaker 3: can be floated to retail investors, which is very unusual normally,
• 16:09
  Speaker 3: that's a much smaller sliver.
• 16:11
  Speaker 4: Yeah, the idea that he wants to throw out there
• 16:14
  Speaker 4: is giving preferential treatment to those who have invested in
• 16:16
  Speaker 4: his other companies, such as Tesla or some of the
• 16:19
  Speaker 4: institutional backers of his takeover of Twitter back in twenty
• 16:23
  Speaker 4: twenty two. We will see if they can pull that off.
• 16:27
  Speaker 4: Didn't Meta do it? Didn't Facebook do this when they
• 16:29
  Speaker 4: went public? Tried to set aside a bunch of it
• 16:31
  Speaker 4: for retail investors, and it just was a complete I
• 16:34
  Speaker 4: know their IPO was very messy.
• 16:36
  Speaker 5: I don't remember what was the cause behind it, but.
• 16:39
  Speaker 4: I feel as though, look as much as I hate
• 16:42
  Speaker 4: the idea that, yeah, you have to be a Goldman
• 16:44
  Speaker 4: or a Morgan Stanley customer to get access to this stuff,
• 16:49
  Speaker 4: it's in part for a reason because it tends to
• 16:51
  Speaker 4: go off a lot smoother when they do it that way.
• 16:54
  Speaker 2: Yeah, it's funny.
• 16:55
  Speaker 3: I still remember watching the Meta IPO or Facebook IPO
• 16:59
  Speaker 3: at the time ye go off because basically what ended
• 17:04
  Speaker 3: up happening is the thing didn't trade for like two
• 17:07
  Speaker 3: hours until like du just sat there and no one
• 17:09
  Speaker 3: could figure out what was going on, there were some
• 17:11
  Speaker 3: problems with the order books, and then the funny thing
• 17:15
  Speaker 3: about Meta is that so the IPO finally went.
• 17:19
  Speaker 5: Off thirty eight bucks IPO price.
• 17:22
  Speaker 3: Yep, So the IPO finally went off, and everyone's like,
• 17:25
  Speaker 3: oh great, you know like this this this should be fun.
• 17:28
  Speaker 3: And what ended up happening was that over the next
• 17:34
  Speaker 3: six months or so, the stock got more than cut
• 17:37
  Speaker 3: in half, down to seventeen bucks a share. Which you
• 17:40
  Speaker 3: think about it now, imagine it was mid twenty twelve.
• 17:44
  Speaker 5: Imagine not holding onto Facebook through twenty.
• 17:46
  Speaker 3: You're like, but look, there were some investors who probably
• 17:50
  Speaker 3: couldn't because they see a fifty percent drawn out of here,
• 17:52
  Speaker 3: like oh, why am I in this thing? And the
• 17:57
  Speaker 3: funny thing about Meta is that's not even close to
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  Speaker 3: the worst draw down it's gone through in the last
• 18:01
  Speaker 3: fifteen years since an iPod in from.
• 18:04
  Speaker 2: The peak that the prior peak that it.
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  Speaker 3: Got to in twenty twenty one through its bottom in
• 18:09
  Speaker 3: late twenty two, it had an over seventy five percent
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  Speaker 3: draw down. It went from three to eighty one a
• 18:16
  Speaker 3: share down to eighty seven during that time.
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  Speaker 4: You know, it sounds really quaint. What around the time
• 18:22
  Speaker 4: of the IPO, they had to make a disclosure to
• 18:24
  Speaker 4: their investors that they had concerns about mobile monetization because
• 18:30
  Speaker 4: their users were moving so fast to mobile devices that
• 18:33
  Speaker 4: they couldn't monetize them fast enough in the same way
• 18:36
  Speaker 4: that they could their web based platform.
• 18:38
  Speaker 5: Doesn't that seem so quaint? Turned out?
• 18:42
  Speaker 4: Turned out, turned out monetizing mobile device users was way
• 18:46
  Speaker 4: easier than web device users.
• 18:48
  Speaker 5: Yeah, and was way more monetizable.
• 18:50
  Speaker 1: Yeah.
• 18:50
  Speaker 4: Throw some ads up there, like we can figure it out.
• 18:52
  Speaker 4: Throw some ads up there. How about I have a
• 18:55
  Speaker 4: device that sits in your pocket.
• 18:56
  Speaker 5: At all times, I.
• 18:57
  Speaker 3: Know where you are, I know I can you know,
• 19:00
  Speaker 3: I have access to other apps that you're you know, accessing,
• 19:03
  Speaker 3: and I know what you're interested in. Yeah, it's uh,
• 19:05
  Speaker 3: it's worked out pretty well for them. Let's see, let's
• 19:09
  Speaker 3: take a break here. As we head towards the bottom
• 19:11
  Speaker 3: of the hour, stocks still down, Dow off about three
• 19:14
  Speaker 3: hundred and fifty points, SMP off forty five, Nasdaq off
• 19:18
  Speaker 3: about two hundred and thirty four, so still about three
• 19:20
  Speaker 3: quarters to one point one percent draw down. Inequity markets, tenure,
• 19:23
  Speaker 3: Treasury back to flat on the day, So good news
• 19:26
  Speaker 3: for bond investors at least with that coming in, let's
• 19:28
  Speaker 3: take a quick break and when we return to get
• 19:31
  Speaker 3: the Trivia Answer and Wall Street Watch and the Money
• 19:34
  Speaker 3: Matters mail Bag.
• 19:41
  Speaker 1: Bringing the latest financial news straight to your radio. Every day,
• 19:45
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
• 19:51
  Speaker 1: Tell you out full Wall Street Watch tracking the stocks,
• 19:55
  Speaker 1: the data, and the headlines driving markets so far today
• 19:58
  Speaker 1: right here on the Financial Exchange Radio Network.
• 20:02
  Speaker 6: There's a lot of reds still on the board, but
• 20:04
  Speaker 6: over the last hour it's been heading in the right direction.
• 20:07
  Speaker 6: The Dow Jones is now off just under six tenths
• 20:10
  Speaker 6: of a percent, or two hundred and sixty eight points.
• 20:12
  Speaker 6: The S and P five hundreds off just over half
• 20:14
  Speaker 6: a percent or thirty four points. In the NASDAC is
• 20:17
  Speaker 6: off just under nine tenths of a percent, or one
• 20:19
  Speaker 6: hundred and eighty six points. Pharma giant Astrozenica is up
• 20:23
  Speaker 6: three and a half percent after its experimental drug tozoric
• 20:28
  Speaker 6: kamab was found to meaningfully reduce flare ups in cases
• 20:32
  Speaker 6: of chronic obstructive pulmonary disease. The drug delivered the results
• 20:36
  Speaker 6: in two late stage trials, and the company said full
• 20:39
  Speaker 6: results will be delivered at an upcoming medical meeting. Travel
• 20:43
  Speaker 6: booking website Trip Advisors up three point seven percent following
• 20:46
  Speaker 6: an upgrade to buy from neutral at Bank of America,
• 20:49
  Speaker 6: citing accelerating activist engagement and rising strategic optionality Across the portfolio.
• 20:56
  Speaker 6: Shares of the companies that were Wall Street's favor play
• 20:58
  Speaker 6: to start twenty to twenty five are clawing back some
• 21:01
  Speaker 6: of the recent hits they've been taking. Micron is up
• 21:03
  Speaker 6: three point three percent, getting some relief after it closed
• 21:07
  Speaker 6: on Thursday down twenty two percent in just six trading sessions.
• 21:10
  Speaker 6: Sand Disk is up more than four and a half percent,
• 21:13
  Speaker 6: while Western Digital and LAMB Research are both up one percent, respectively.
• 21:18
  Speaker 6: And as oil prices have risen this morning, that is
• 21:21
  Speaker 6: bringing some of the energy names with it. Eog Resources,
• 21:24
  Speaker 6: Phillips sixty six, and Devn Energy are all up nearly
• 21:28
  Speaker 6: one percent. I am been kitchen and that was Wall Street.
• 21:32
  Speaker 6: Watch back to the trivia question we had earlier.
• 21:36
  Speaker 3: Uh.
• 21:36
  Speaker 6: The question was how many active volcanoes are or which
• 21:41
  Speaker 6: state has the most active volcanoes in the United States,
• 21:44
  Speaker 6: and that would be Alaska. Steve from Middleton, New Hampshire
• 21:48
  Speaker 6: is our winner. He'll be taking home a financial Exchange
• 21:51
  Speaker 6: Show t shirt.
• 22:00
  Speaker 2: Makes big one the way down where that comes.
• 22:02
  Speaker 5: I want the whale Man.
• 22:05
  Speaker 1: You've got questions, We've got answers. It's time for the
• 22:09
  Speaker 1: Money Matters mailback. We are tackling your calls and emails
• 22:12
  Speaker 1: on everything from economic policy to global markets and everything
• 22:16
  Speaker 1: in between. Leave us a voicemail at three three nine
• 22:19
  Speaker 1: three nine nine four three three three and you might
• 22:21
  Speaker 1: hear it on the show. You can also email your
• 22:24
  Speaker 1: question to TFV Show at gmail dot com. No, it's
• 22:28
  Speaker 1: time for the Money Matters mail bag.
• 22:33
  Speaker 5: Then, you know how much I like to be surprised?
• 22:35
  Speaker 5: Was that Peter Griffin?
• 22:36
  Speaker 2: That was Peter Griff?
• 22:37
  Speaker 5: That was Peter Griffin. Okay, gotta keep it.
• 22:39
  Speaker 6: Local here, you know. All right, let's start off with
• 22:41
  Speaker 6: our first question here. It comes from Matt in Plymouth, mass.
• 22:45
  Speaker 6: He says, why does it seem like restaurants aren't reducing prices?
• 22:48
  Speaker 6: Many claim that they're struggling due to a pullback and drinking,
• 22:51
  Speaker 6: younger crowds not going out, et cetera. But if they
• 22:53
  Speaker 6: just lowered prices by fifteen to thirty percent, wouldn't that
• 22:56
  Speaker 6: bring in more customers that can afford going out?
• 23:00
  Speaker 3: So the answer is yes, it would bring in more
• 23:03
  Speaker 3: customers that could afford going out. The problem that we
• 23:06
  Speaker 3: run into there if you talked to any anyone who's
• 23:09
  Speaker 3: in the restaurant business, most restaurants don't have a fifteen
• 23:12
  Speaker 3: to thirty percent extra margin that they can give away.
• 23:15
  Speaker 4: And pretty much it's McDonald's and they can't make it
• 23:18
  Speaker 4: up on volume. Is McDonald's can. McDonald's is about the
• 23:22
  Speaker 4: only one that can. They've been testing this out of
• 23:24
  Speaker 4: the course of the last year or two. I think
• 23:26
  Speaker 4: they've had some success with it. But yeah, if you
• 23:28
  Speaker 4: are that local independent restaurant, Frankly, people I think get
• 23:35
  Speaker 4: the inflation scenario a little bit incorrect. Every once in
• 23:38
  Speaker 4: a while, prices are never coming back down. No, yeah,
• 23:41
  Speaker 4: like egg prices could stake. Prices might, But if you're
• 23:44
  Speaker 4: anticipating that restaurant prices at your local watering hole food
• 23:49
  Speaker 4: prices are going to come down, it's just not likely
• 23:52
  Speaker 4: to happen. And especially now with this price pressure on
• 23:57
  Speaker 4: or the profit pressure on alcohol sales. That we talked
• 24:00
  Speaker 4: about was that this week or last week, if anything,
• 24:04
  Speaker 4: they're probably looking at, hey, can we can we squeeze
• 24:06
  Speaker 4: little bit more out of our food menu?
• 24:07
  Speaker 2: Yeah.
• 24:08
  Speaker 3: So the unfortunate thing is prices rarely come down in
• 24:12
  Speaker 3: the aggregate. You might see individual things like egg prices
• 24:15
  Speaker 3: that you know came down over the last year, but
• 24:18
  Speaker 3: they're offset by beef prices that have gone up in
• 24:20
  Speaker 3: the last year. And so this is what you unfortunately
• 24:23
  Speaker 3: end up seeing, is that prices tend to move in
• 24:27
  Speaker 3: one direction. The only time they tend to move down
• 24:30
  Speaker 3: all together is usually when something very bad is happening
• 24:34
  Speaker 3: in the economy, typically a recession.
• 24:36
  Speaker 2: What else you got?
• 24:37
  Speaker 6: Ben Glenn in Phoenix, Arizona, listening on Serious XEM channel
• 24:40
  Speaker 6: one pint thirty two says I'm sixty two years old
• 24:43
  Speaker 6: and have a split in my retirement portfolio of stocks
• 24:46
  Speaker 6: to bonds. At what age should I consider modifying that?
• 24:49
  Speaker 6: Or can I maintain that mix throughout my life?
• 24:52
  Speaker 5: I'll bet first say it doesn't have anything to do
• 24:54
  Speaker 5: with age.
• 24:54
  Speaker 3: Yeah, so this is this is a great question. And look,
• 24:57
  Speaker 3: it's not one that we can definitively answer just because
• 25:01
  Speaker 3: we don't know the specifics. But here are some of
• 25:03
  Speaker 3: the considerations. Uh, again, like why do you have the
• 25:08
  Speaker 3: certain mix that you do in terms of is it
• 25:11
  Speaker 3: because of risk tolerance? Is it because of expenses that
• 25:14
  Speaker 3: you have in a given year. Is it because of
• 25:18
  Speaker 3: you know, just general thoughts about Hey, here's how old
• 25:20
  Speaker 3: I am and here's what I think I should be doing. Ultimately,
• 25:24
  Speaker 3: when you talk about asset allocation, it boils down to
• 25:28
  Speaker 3: two things. When do I need the money and what
• 25:31
  Speaker 3: level of risk am I willing to take with that
• 25:33
  Speaker 3: asset before I need that money?
• 25:35
  Speaker 4: Yeah, the way I think about it is, you know
• 25:37
  Speaker 4: your needs from the portfolio, how much you're going to
• 25:39
  Speaker 4: pull out of that thing over the course of the
• 25:41
  Speaker 4: next decade. That sets the guardrails or the speed limit,
• 25:45
  Speaker 4: or you know, whatever you want to think about it.
• 25:47
  Speaker 4: But it's not a speed limit because it's a minimum
• 25:49
  Speaker 4: and maximum speed. Sure, so it gives you the guardrails
• 25:53
  Speaker 4: there based on Okay, this is my projected withdrawals from here,
• 25:57
  Speaker 4: and then once you have those guardrails, then you can
• 26:00
  Speaker 4: hone in on this is what I'm most comfortable with.
• 26:03
  Speaker 4: But yeah, to Chuck's point, without knowing not only how
• 26:07
  Speaker 4: old you are, but how much longer you plan to
• 26:09
  Speaker 4: work if you're retired or not, what your fixed incomes
• 26:12
  Speaker 4: look like in retirements, such as your pension incomes, so
• 26:14
  Speaker 4: security income and then what your budget looks like. Those
• 26:18
  Speaker 4: are the things that should drive the guardrails, and then
• 26:22
  Speaker 4: your experience and reaction to previous market downturns is what
• 26:27
  Speaker 4: should drive the tolerance piece.
• 26:29
  Speaker 3: Yeah, because quite honestly, I've seen eighty year olds who
• 26:34
  Speaker 3: you can be who have no problem being like, I'm
• 26:38
  Speaker 3: ninety five percent in stocks and that's how I like it,
• 26:40
  Speaker 3: Joseph Baby.
• 26:41
  Speaker 7: Yeah.
• 26:41
  Speaker 3: I've also seen forty year olds who are like, can't
• 26:45
  Speaker 3: go anywhere near the stock market because it makes me
• 26:47
  Speaker 3: too nervous. And both those are fine, because ultimately, the
• 26:50
  Speaker 3: best investment strategy is the one that you're able to
• 26:54
  Speaker 3: see through from start to finish. It's the one that
• 26:56
  Speaker 3: you don't abandon when it gets tough or chase returns
• 27:00
  Speaker 3: when it you know, when things look great. It's it's
• 27:03
  Speaker 3: the one where you say, you know what, I can
• 27:06
  Speaker 3: accept this in both the good times and bad and
• 27:08
  Speaker 3: see it through.
• 27:09
  Speaker 5: Sounds like a marriage.
• 27:11
  Speaker 3: I mean, listen, it's it basically is you know, it's
• 27:16
  Speaker 3: it basically is. That's that's how you want it in
• 27:19
  Speaker 3: a perfect war is you don't want to be trying
• 27:23
  Speaker 3: to jump from one strategy to the next, you know,
• 27:25
  Speaker 3: just because something seems greater seems bad.
• 27:28
  Speaker 2: You want more consistency.
• 27:31
  Speaker 6: All right, final question here, and that answer is gonna
• 27:33
  Speaker 6: actually kind of tie into this question as well. Jen
• 27:35
  Speaker 6: in Springfield, Mass says, Lately, I've been realizing the hardest
• 27:38
  Speaker 6: part of managing money isn't just earning more, it's staying
• 27:41
  Speaker 6: calm enough to make good decisions. A few months ago,
• 27:44
  Speaker 6: my overly emotional thinking was affecting me more than I
• 27:46
  Speaker 6: wanted to admit, not just with trades, but with savings
• 27:48
  Speaker 6: and everyday money decisions too. I was constantly second guessing myself,
• 27:52
  Speaker 6: like one wrong move would put me behind. So the
• 27:54
  Speaker 6: question is, how can I get better at separating financial
• 27:57
  Speaker 6: decisions from fear and urgency?
• 28:00
  Speaker 3: A little bit of financial psychology, It's it's a great question,
• 28:03
  Speaker 3: And the answer is you're never going to completely Uh.
• 28:07
  Speaker 3: I can't tell you how many times, you know, I'll
• 28:09
  Speaker 3: be driving home for you know, the day and I'm thinking, gee, like,
• 28:14
  Speaker 3: is it okay for me to spend X? Or you know, hey,
• 28:18
  Speaker 3: should I be saving more? And then the other side
• 28:21
  Speaker 3: of that is, hey, maybe I'm maybe I'm you know,
• 28:23
  Speaker 3: saving too aggressively on this.
• 28:25
  Speaker 2: Maybe I should go out and do you know, more
• 28:27
  Speaker 2: fun things.
• 28:28
  Speaker 3: And I don't think you ever actually know what the
• 28:31
  Speaker 3: right answer is on that, because quite honestly, it comes
• 28:35
  Speaker 3: with just you know, whatever experience you're going through in life.
• 28:38
  Speaker 3: It's like, listen, every time that I have like someone
• 28:43
  Speaker 3: who's you know, a family member or whatever, who you know,
• 28:45
  Speaker 3: passes away or gets sick, immediately you go through the
• 28:48
  Speaker 3: thought of it's like, man, I really got to go
• 28:50
  Speaker 3: and like take a trip because who knows when it
• 28:52
  Speaker 3: when it's going to be me.
• 28:54
  Speaker 4: And then I've got one strategy on the spending side
• 28:56
  Speaker 4: that I've been working on with my own daughters. Sure,
• 28:58
  Speaker 4: so you know, they don't have an allowance, but they
• 29:01
  Speaker 4: have piggybanks, they have savings, they have cash that they
• 29:04
  Speaker 4: like to bring everywhere they go so that they can
• 29:06
  Speaker 4: buy random things at the gas station or the target
• 29:08
  Speaker 4: that they walk into. And so the new strategy I've
• 29:10
  Speaker 4: been working on with them is, Okay, you really want
• 29:13
  Speaker 4: this thing that seems really important to you right now.
• 29:15
  Speaker 5: Yeah, we're gonna take a picture of it.
• 29:17
  Speaker 4: It's gonna have the price tag on it, and you know,
• 29:21
  Speaker 4: we can come back a week from now.
• 29:22
  Speaker 5: But I want you to go home sleep on it.
• 29:25
  Speaker 4: And think about whether or not that you know, seven
• 29:27
  Speaker 4: dollars stuffed animal that you saw in the checkout line
• 29:30
  Speaker 4: of Target is actually worthwhile to you because it's ceremoney.
• 29:33
  Speaker 5: You can spend it if you want, but I want
• 29:35
  Speaker 5: you to actually think about it.
• 29:36
  Speaker 4: And that is That is a you know, strategy that
• 29:40
  Speaker 4: I'm working on with my seven year old, but it
• 29:42
  Speaker 4: does apply to larger life too when it comes to
• 29:45
  Speaker 4: big purchases.
• 29:46
  Speaker 3: I do it with myself like I try to do
• 29:48
  Speaker 3: like a twenty four hour gap where it's, hey, I
• 29:50
  Speaker 3: really want this, wait twenty four hours Do I still
• 29:54
  Speaker 3: if Most of the time the answers no, Yeah, there's
• 29:58
  Speaker 3: certain things that I need. It's different, you know, But
• 30:01
  Speaker 3: those are the ones where it's like, okay, like yes,
• 30:03
  Speaker 3: like have to have it. But how many times do
• 30:06
  Speaker 3: you know I see, oh, ge, like that shirt looks cool,
• 30:11
  Speaker 3: and then I think about it. It's like, would my
• 30:12
  Speaker 3: life actually be materially better if I have it?
• 30:15
  Speaker 5: Also, just because it looks cool on that model doesn't
• 30:17
  Speaker 5: mean that Mike's gonna make it cool.
• 30:20
  Speaker 2: In fact, usually it doesn't. Let's take a quick break.
• 30:24
  Speaker 2: When we come back.
• 30:24
  Speaker 3: Paul A Monica from Barons joins us. We're talking Draft
• 30:27
  Speaker 3: Kings and Fludder.
• 30:29
  Speaker 1: After this daily financial content in your feed when you
• 30:33
  Speaker 1: want it. Follow the Financial Exchange on Instagram. Face is
• 30:37
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• 30:42
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• 30:45
  Speaker 1: eleven to noon. Get the latest business and financial news
• 30:48
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• 30:51
  Speaker 1: up to date on how it might affect your wallet.
• 30:54
  Speaker 1: That's the Financial Exchange weekdays from eleven to noon on
• 30:57
  Speaker 1: Series XM's Business Radio Channel one thirty two. Face He's
• 31:01
  Speaker 1: the Financial Exchange Radio Network.
• 31:03
  Speaker 7: Ladies and gentlemen. The weekend, as.
• 31:16
  Speaker 3: Promised, we're now joined by Paul A Monica from Barons
• 31:20
  Speaker 3: here to talk a little bit about Draftking and Flutter.
• 31:24
  Speaker 3: For those listening, if you're not familiar with Flutter, they're
• 31:27
  Speaker 3: the ones that own FanDuel as a part of a
• 31:31
  Speaker 3: conglomerate of gambling platforms.
• 31:34
  Speaker 2: Paul, appreciate you joining us today.
• 31:36
  Speaker 8: Thank you very much. Appreciate it be in here.
• 31:38
  Speaker 2: So what's the deal with these guys?
• 31:40
  Speaker 3: Is the UH is the landscape you know, cleared out
• 31:43
  Speaker 3: for them? Are they facing more competition from prediction markets?
• 31:46
  Speaker 3: Are they dominating you know the market.
• 31:48
  Speaker 2: What do things look like for these guys.
• 31:51
  Speaker 8: Yeah, you kind of nailed it right there. I think
• 31:53
  Speaker 8: the big concern right now is the rise of Polymarket,
• 32:00
  Speaker 8: which Disclosure Dad Jones has a relationship with to supply
• 32:05
  Speaker 8: data for predictions markets, as well as Kolchi. These are
• 32:09
  Speaker 8: the two gigantic prediction markets companies. We're seeing a lot
• 32:15
  Speaker 8: of consumers, investors, gamblers, if you will, flocking to these sites,
• 32:21
  Speaker 8: and there's a lot of controversy because they're regulated as
• 32:25
  Speaker 8: financial exchanges and not bedding sites. So as a result,
• 32:31
  Speaker 8: they're legal in all fifty states, which includes obviously a
• 32:35
  Speaker 8: lot of states where DraftKings and fan Duel and some
• 32:40
  Speaker 8: of the casino companies are not allowed to have sports
• 32:43
  Speaker 8: books because sports books need to be legalized on a
• 32:47
  Speaker 8: state by state basis. So that's one of the reasons
• 32:51
  Speaker 8: why DraftKings and Flutter have struggled and why they've been
• 32:55
  Speaker 8: trying to get in on the predictions market business as well.
• 32:58
  Speaker 3: What's been thet come of their their efforts to do so, Like,
• 33:03
  Speaker 3: how are they in that space? I don't even know
• 33:05
  Speaker 3: if they are officially.
• 33:06
  Speaker 8: They both set up predictions markets, but now there's the
• 33:11
  Speaker 8: catch twenty two of you will is that there are
• 33:14
  Speaker 8: concerns about you know, the Senate and you know others
• 33:17
  Speaker 8: in Washington maybe cracking down on predictions markets. So that
• 33:23
  Speaker 8: would obviously hurt the likes of Kyle Sham poly Market,
• 33:27
  Speaker 8: but it could be a problem now for DraftKings and
• 33:31
  Speaker 8: Flutter FanDuel because of some of the new businesses that
• 33:34
  Speaker 8: they have operated there. But you know, I think, you know,
• 33:37
  Speaker 8: a bigger issue is just that you know, sports betting,
• 33:42
  Speaker 8: you know, right now, obviously it's you know, of the
• 33:45
  Speaker 8: moment because of the March Madness tournament. I think a
• 33:49
  Speaker 8: lot of people are probably wagering legally on college basketball games.
• 33:55
  Speaker 8: But you know, football season was kind of soft for
• 34:00
  Speaker 8: DraftKings and Flutter a particular, and that's one of the
• 34:02
  Speaker 8: reasons also why their stocks went down. So, you know
• 34:06
  Speaker 8: it maybe the bloom is off the roads, so to speak.
• 34:10
  Speaker 8: You know, now that sports betting has been legal in
• 34:12
  Speaker 8: many states for for several years, there's no longer novelty.
• 34:17
  Speaker 8: I think a lot of you know, consumers are probably
• 34:21
  Speaker 8: trying to do a better job of limiting how much
• 34:24
  Speaker 8: they are wagering so that they don't lose prohibitive amounts
• 34:27
  Speaker 8: you know. You know, that is a big problem of
• 34:29
  Speaker 8: course for these companies as well, the societal impact of
• 34:33
  Speaker 8: you know, people betting money that they probably shouldn't end
• 34:37
  Speaker 8: losing it.
• 34:37
  Speaker 3: Well, I was going to ask you that I talked
• 34:39
  Speaker 3: to you know, basically any man in his you know,
• 34:43
  Speaker 3: twenties and late teens, and they'll tell you that, Hey,
• 34:47
  Speaker 3: they like most of my friends have problems with gambling,
• 34:49
  Speaker 3: is what you hear. And I'm just wondering, are we
• 34:52
  Speaker 3: starting to get any pushback from any you know, jurisdictions
• 34:56
  Speaker 3: that have legalized sports betting to start to you know,
• 35:00
  Speaker 3: add additional restrictions in or is that not something that's
• 35:03
  Speaker 3: showing up yet.
• 35:05
  Speaker 8: I think it is starting to show up a little bit.
• 35:06
  Speaker 8: And I think the companies are you know doing in
• 35:11
  Speaker 8: some of their marketing messages trying to stress that you know,
• 35:15
  Speaker 8: this is a very risky thing for any consumer to
• 35:20
  Speaker 8: be doing. You have no guarantee of you know, making
• 35:24
  Speaker 8: money by betting on sports. You know, it's it's very unpredictable.
• 35:30
  Speaker 8: They are obviously now some of the scandals that we've
• 35:33
  Speaker 8: seen with various athletes and sports leagues regarding gambling as well.
• 35:40
  Speaker 8: So I think as some of these scandals, you know,
• 35:44
  Speaker 8: potentially proliferate, you're going to see an even greater crackdown,
• 35:48
  Speaker 8: you know, as people worry about the integrity of the game,
• 35:50
  Speaker 8: not just people losing money on sports betting, but you know,
• 35:54
  Speaker 8: whether or not any of these games might be fixed.
• 35:57
  Speaker 3: Very good, Paul, appreciate you joining us today. I have
• 36:00
  Speaker 3: a great weekend and we'll catch up.
• 36:03
  Speaker 2: With you soon.
• 36:04
  Speaker 8: Thank you very much. Have a go on, guys.
• 36:06
  Speaker 3: That is paul A Monica from Barons. Mike, what do
• 36:09
  Speaker 3: you got for me that we haven't covered yet?
• 36:13
  Speaker 5: There we go.
• 36:14
  Speaker 4: It a little bit reminds me of the cannabis industry.
• 36:18
  Speaker 4: I mean, we're not there, and it's a very different
• 36:20
  Speaker 4: type of thing, but right illegal for for decades, legalized
• 36:25
  Speaker 4: and now go talk to any cannabis operator in the
• 36:27
  Speaker 4: States where it's legalized, and it's incredibly difficult to make
• 36:30
  Speaker 4: a profit.
• 36:30
  Speaker 3: They're like, yep, we're oversupplied now and yes, like you
• 36:34
  Speaker 3: can smell it on every street corner, but it turns
• 36:36
  Speaker 3: out that one hundred percent.
• 36:38
  Speaker 2: Of people do not want to smoke cannabis.
• 36:40
  Speaker 4: And so now, in my opinion, gambling a heck of
• 36:43
  Speaker 4: a lot more addictive than smoking cannabis. So you know,
• 36:45
  Speaker 4: maybe it's different and it is different regulatory environment too, but.
• 36:49
  Speaker 2: You can make a case more expensive. Also.
• 36:51
  Speaker 3: Yeah, yeah, you can only smoke so much, but you
• 36:53
  Speaker 3: can gamble until you're out of money.
• 36:55
  Speaker 5: Yeah.
• 36:56
  Speaker 4: There's a company where driving the wrong car to work
• 36:58
  Speaker 4: and can get you a tick. That's at the Stilantis
• 37:01
  Speaker 4: headquarters because if you park in the wrong spot at
• 37:05
  Speaker 4: Stalantis headquarters, i e. If you do not own a
• 37:09
  Speaker 4: Stalanta's vehicle and park in their preferred spots, then they
• 37:12
  Speaker 4: will ticket you and maybe even tell you, which is
• 37:17
  Speaker 4: a little bit funny. I also jogged a memory of mine.
• 37:21
  Speaker 4: A friend of mine right out of college was working
• 37:24
  Speaker 4: for an insurance company, and I don't remember which car company,
• 37:28
  Speaker 4: but I remember he drove a Hyundai and they were
• 37:31
  Speaker 4: having a bunch of insurance executives from a sorry, they
• 37:34
  Speaker 4: were having a bunch of vehicle executives from one of
• 37:37
  Speaker 4: the major US automakers in and they put out a
• 37:39
  Speaker 4: note to all employees like, if you do not drive
• 37:42
  Speaker 4: it was either GM or Ford, then you park in
• 37:44
  Speaker 4: the like lot three and walk your butt to work
• 37:47
  Speaker 4: tomorrow because only people with this type of vehicle may
• 37:51
  Speaker 4: park close to the building, putting their best foot forward
• 37:54
  Speaker 4: for that big customers wild.
• 37:56
  Speaker 3: Taking a look at markets, stocks remain in negative territory.
• 38:00
  Speaker 3: I was off three thirty seven s and P off
• 38:01
  Speaker 3: forty four. Nasdak can posit off to twenty one.
• 38:04
  Speaker 2: We'll see where.
• 38:05
  Speaker 3: Things finish up today, and uh hey, we'll be back
• 38:08
  Speaker 3: on Monday.
• 38:09
  Speaker 2: Hope y'all have a great weekend.
• 38:12
  Speaker 3: And uh yeah, we'll see you Monday, and we'll have
• 38:15
  Speaker 3: a great week next week. Shortened trading week because of
• 38:18
  Speaker 3: Good Friday, but we'll be in and telling you what's
• 38:21
  Speaker 3: going on then