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Is the data starting to show the impacts from tariffs? · The Financial Exchange Show

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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 not Tucker with you. And as we
1:14
Speaker 2: kick things off today, top story is going to be
1:16
Speaker 2: the economic data that we received this morning. Let's start
1:20
Speaker 2: with the good side of things. Weekly jobless claims continue
1:23
Speaker 2: to be in a pretty darn comfortable area, coming in
1:27
Speaker 2: at two hundred and twenty four thousand for the week.
1:29
Speaker 2: That is down slightly from two hundred and twenty seven
1:32
Speaker 2: thousand last week. When we look at the continuing claims
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Speaker 2: numbers came in also at a decline from last week,
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Speaker 2: going from one point nine to six eight million to
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Speaker 2: one point nine to five to three. That is a
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Speaker 2: five point four percent increase year over year, which is
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Speaker 2: right in the range that we've been in for the
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Speaker 2: last several weeks, so that the trend continues to be
1:55
Speaker 2: a modest uptick in continuing claims relative to last year.
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Speaker 2: But generally, if you've seen claims moving up, you know,
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Speaker 2: at a four to six percent range annually. Historically, that
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Speaker 2: has not been enough to cause any kind of major
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Speaker 2: problem as it relates to unemployment or a reduction in
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Speaker 2: consumer spending. The place where you tend to get into
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Speaker 2: trouble is when you get closer to a ten percent
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Speaker 2: rise in continuing claims year over year. There were some
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Speaker 2: signs that we might have been heading there in late
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Speaker 2: May early June that is subsequently reversed, and this report
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Speaker 2: continues to paint a picture of a labor market that,
2:33
Speaker 2: while there may be some concerns on the hiring side
2:36
Speaker 2: of things, we still don't really have any uptick in
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Speaker 2: new claims and that's helping to keep somewhat of a
2:44
Speaker 2: lid on continuing claims.
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Speaker 3: Yeah, so it continues this story of kind of a
2:50
Speaker 3: stale and stuck labor market where there's not a ton
2:53
Speaker 3: of turnover. And I think that leads into something that
2:55
Speaker 3: we were talking about the last couple of days, which
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Speaker 3: is the wage side of things. There's been a fair
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Speaker 3: bit of focus over the last week of that wage
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Speaker 3: growth that was occurring for the last few years on
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Speaker 3: the lower income spectrum ticking up right. You had wage
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Speaker 3: growth for the bottom quartile outperforming the top quartile of
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Speaker 3: earners for a few years.
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Speaker 4: And what most.
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Speaker 3: People will tell you is, if you're talking about really
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Speaker 3: strong wage growth, it doesn't come from getting a raise
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Speaker 3: in your current job, comes from going to a new job.
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Speaker 3: It comes from switching and we're not seeing any switching
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Speaker 3: right now, which I think is probably what's contributing most
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Speaker 3: to the stagnant wage gains that we're seeing, especially for
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Speaker 3: those lower income individuals. And so if there's a stagnant
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Speaker 3: labor market, it means not a lot of turnover, not
3:42
Speaker 3: a lot of churn, not a terrible thing from employers,
3:45
Speaker 3: but for employees, it means stagnant wages that you know,
3:49
Speaker 3: if we're pushing three percent inflation, might have a challenge
3:52
Speaker 3: keeping pace. Yeah, the catchy way that I've heard this
3:56
Speaker 3: job market referred to, what word did we come up with?
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Speaker 2: Okay, a word, it's a phrase. I'm going to make
4:01
Speaker 2: it into a word. Then it's the slow higher no
4:05
Speaker 2: fire job market, the slow higher no fire or the
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Speaker 2: job market. So it's kind of if you ask an
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Speaker 2: HR manager how they're doing, they go, I've had Yeah,
4:19
Speaker 2: you know, that's that's that's what we're seeing right now.
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Speaker 4: It's a slow higher no.
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Speaker 2: Fire job market is generally the tenor of things at
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Speaker 2: the moment. So all in all, not a bad weekly
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Speaker 2: jobless claims number here, right, And look, we had the
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Speaker 2: the bad jobs print at the beginning of this month,
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Speaker 2: which really continues to be suggestive of a labor market
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Speaker 2: that is not seeing much hiring, because there's not really
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Speaker 2: much on the firing side that's contributing to this, and
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Speaker 2: I think that ultimately it's something where there's still concerns
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Speaker 2: about the labor market, because hey, if hiring is slowing
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Speaker 2: the way that a lot of the other indicators are pointing,
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Speaker 2: it's kind of problematic. But we're still not seeing anything
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Speaker 2: suggestive of a major uptick in unemployment or a major
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Speaker 2: uptick in firings, and I think that can be interpreted
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Speaker 2: as only good news when it comes to the labor
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Speaker 2: market on that side, at least when you look at
5:21
Speaker 2: some of the other data that is out there, other
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Speaker 2: promising signs that you might be seeing in the labor
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Speaker 2: market that maybe you're starting to turn a corner and
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Speaker 2: maybe see some improvement. Job postings on indeed are now
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Speaker 2: up half a percent week over week. There's still down
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Speaker 2: six point seven percent year over year, but you've got
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Speaker 2: a little bit of an uptick here. We've seen some
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Speaker 2: of these previously that ultimately have not altered the overall trend,
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Speaker 2: but at least you're seeing a little bit more in
5:51
Speaker 2: terms of job postings, whether that turns into actual hiring.
5:54
Speaker 2: We don't know, but if you're looking for green shoots,
5:56
Speaker 2: that's the place that you can see it. On the
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Speaker 2: other side of things, if you're looking at wages, the
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Speaker 2: annual percentage change in advertised wages on indeed, and this
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Speaker 2: is not data that's as close or as recent month
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Speaker 2: over month down point one percent for the month of June,
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Speaker 2: we still don't have the July data there and year
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Speaker 2: over year down point two percent, So it is something
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Speaker 2: where again, the newer data that we've gotten on job
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Speaker 2: postings is suggesting a little bit of an uptick there,
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Speaker 2: and so I think the big thing that I'll be
6:31
Speaker 2: interested to see do we see a similar move on wages,
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Speaker 2: But it's going to be a couple months until we
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Speaker 2: get that data, just because Indeed does not release it
6:40
Speaker 2: right away. If you're looking for other confirmation and other
6:43
Speaker 2: thoughts on this, Paychecks puts out a small business jobs
6:48
Speaker 2: index as well.
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Speaker 4: Likewise, May and June both.
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Speaker 2: Had declines, but when you and the twelve month number
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Speaker 2: is a decline of point zero five percent as well,
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Speaker 2: So a very modest decline in jobs at small businesses
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Speaker 2: in the last twelve months. But the July number was
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Speaker 2: up point one seven percent, So again kind of a
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Speaker 2: modest uptick. There is this an outlier, or maybe are
7:10
Speaker 2: things starting to strengthen in the labor market.
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Speaker 4: Could be again that.
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Speaker 2: The job was claims picture has improved at the same
7:17
Speaker 2: time that some of this other data is And so
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Speaker 2: I think maybe there's a case that there could be
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Speaker 2: an interesting case that the data in April, May and
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Speaker 2: June hey really weakenedo the labor market because companies weren't
7:31
Speaker 2: sure exactly how they wanted to proceed, And maybe some
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Speaker 2: of the data that we're seeing now is okay. Now
7:36
Speaker 2: that companies have digested and understood what their business look
7:40
Speaker 2: like looks like, maybe they're starting to get a little
7:42
Speaker 2: bit more comfortable in hiring.
7:44
Speaker 3: But it's a pretty plausible narrative. Like, you know, I
7:47
Speaker 3: was faced with all these surprise tariffs in April, so
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Speaker 3: I paused all my hiring for or three months. I'm
7:54
Speaker 3: finally at a place now where like it or dislike it.
7:58
Speaker 3: I know what the tariffs are, I've been paying them
8:00
Speaker 3: for a few months, and I can figure out my
8:04
Speaker 3: business model. I've got a new tax bill that's in
8:06
Speaker 3: place now, so I know my tax rates. I know
8:08
Speaker 3: there's some special deductions for research and development now, and
8:12
Speaker 3: so I can move forward with maybe completely changed hiring plans,
8:16
Speaker 3: but hiring plans that we're just put on ice for
8:18
Speaker 3: three months.
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Speaker 4: So possible, maybe not. Maybe it's what we're seeing again.
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Speaker 2: This is you know, one month or in some cases
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Speaker 2: you know, single weeks of data, and so I think
8:27
Speaker 2: we have to see how things develop over the course
8:31
Speaker 2: of the August September and even into the early October data.
8:34
Speaker 2: So it's the listen, the third quarter is going to
8:38
Speaker 2: be media in terms of, hey, show us how this
8:41
Speaker 2: stuff is actually playing out here and thus far. When
8:45
Speaker 2: it comes to the labor data, yes, the monthly jobs
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Speaker 2: report not good by any means, but some of the
8:53
Speaker 2: other stuff, the underlying stuff in surrounding data sets, is
8:57
Speaker 2: starting to show some signs of life for the first
9:00
Speaker 2: time in six to nine months, and so maybe there's
9:03
Speaker 2: a little bit of movement on that side of things.
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Speaker 4: Let's take a quick break.
9:08
Speaker 2: When we come back, we'll talk about the other data
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Speaker 2: set that we got this morning, the Producer Price Index
9:13
Speaker 2: unfortunately not quite as good, but we got to talk
9:17
Speaker 2: about it, so we'll do that when we return.
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10:12
Speaker 4: So this morning.
10:12
Speaker 2: The other data set that we received was the Producer
10:16
Speaker 2: Price Index, or the PPI as it is more commonly
10:22
Speaker 2: referred to. It's actually not that commonly referred to because,
10:25
Speaker 2: for being one hundred percent honest, no one really understands
10:29
Speaker 2: the PPI very well and it's not as interesting as
10:34
Speaker 2: the CPI, and so it kind of gets paid attention to,
10:38
Speaker 2: but no one really cares unless something interesting happens in it.
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Speaker 3: So survey of businesses rather than well, it's still a
10:45
Speaker 3: survey that's done on prices, but it's specifically what are
10:49
Speaker 3: those prices that are being charged to businesses rather than
10:51
Speaker 3: the prices that are being charged to consumers.
10:53
Speaker 2: Kind of right, because here's the other thing about the
10:56
Speaker 2: producer price index, every other price index, every other major
11:01
Speaker 2: price index that we look at, and I'm telling you
11:03
Speaker 2: this information so you can understand what it's actually saying
11:06
Speaker 2: and why it may or may not matter. Every other
11:09
Speaker 2: price index that we look at or care about is
11:11
Speaker 2: measured from the perspective of the buyer. The consumer price
11:15
Speaker 2: index is what did people pay for X during this month?
11:20
Speaker 2: How much did you pay for airfare? How much did
11:22
Speaker 2: you pay for bananas? How much did you pay for shelter.
11:27
Speaker 2: That's what is being asked. Instead, the PPI is backwards.
11:35
Speaker 2: It is focusing on prices received by a seller rather
11:41
Speaker 2: than prices paid by a buyer. And so you have
11:46
Speaker 2: to kind of sit back and be like, WHOA, the
11:49
Speaker 2: universe is different from how I thought it was, man,
11:53
Speaker 2: Because that's what the PPI forces you to do. It
11:55
Speaker 2: turns you into a surfer bro. And so ultimately, the
12:00
Speaker 2: way to think about this is, hey, when I am
12:04
Speaker 2: what I am looking at here is a measure of
12:06
Speaker 2: what wholesalers are receiving for intermediate goods paid by final
12:16
Speaker 2: retailers who are then selling out into.
12:19
Speaker 3: Restaurants, hotels, airlines. I have an example.
12:24
Speaker 2: Let's just look at an example, because it's again even
12:27
Speaker 2: like saying this, it's like, Chuck, what the heck are
12:29
Speaker 2: you talking about? You're an idiot? Just like makes some sense,
12:31
Speaker 2: I get it, I understand. Let's say that you look
12:34
Speaker 2: at the PPI for cereal, just as an example. What
12:39
Speaker 2: you are actually measuring there is the price received by
12:43
Speaker 2: Kellogg's or General Mills from whole foods or stop and
12:48
Speaker 2: shop or publics in order to buy their goods. Sure,
12:53
Speaker 2: so that is what the PPI is measuring, and I
12:58
Speaker 2: think that that's like, that's the easy way to understand it.
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Speaker 3: And so logically, if we're taking this survey for what
13:05
Speaker 3: it is, one would anticipate that if those prices that
13:10
Speaker 3: suppliers are receiving are going up and doing so in
13:13
Speaker 3: dramatic fashion, that eventually it bleeds through to the consumer
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Speaker 3: price index, the personal consumption expenditures, all these different ways
13:21
Speaker 3: that we have of measuring what you and I pay
13:24
Speaker 3: for when we buy the cereal from the whole foods.
13:27
Speaker 2: There are two ways that you can look at. The
13:28
Speaker 2: first is it's either going to bleed through. The second
13:30
Speaker 2: is that it could be absorbed as margin compression. Either
13:34
Speaker 2: one is, you know, has its own problems that we've discussed.
13:38
Speaker 2: So this is all a fancy way of saying PPI.
13:41
Speaker 2: This month, both headline and core moved up at a
13:45
Speaker 2: rate ofero point nine percent, which pushed headline PPI to
13:49
Speaker 2: three point three percent annually and Core PPI to three
13:52
Speaker 2: point seven Both of these were much hotter than expectations
13:55
Speaker 2: for point two percent prints on each of them. The
14:00
Speaker 2: interesting thing here to me is when you actually dig
14:02
Speaker 2: in and look under the surface, a lot of the
14:05
Speaker 2: extra increase in the PPI was due to items in
14:10
Speaker 2: the financial services sector.
14:14
Speaker 4: You're welcome basically some of the things that stick out.
14:19
Speaker 2: Investment advice saw prices up three point three percent month
14:23
Speaker 2: over month, insurance up five point seven percent, portfolio management
14:27
Speaker 2: up five point four So this stuff, the portfolio management piece.
14:31
Speaker 2: Why this all matters is some of the PPI stuff
14:33
Speaker 2: does filter into PCE and core PCE, which is why
14:37
Speaker 2: people pay attention to it, And so with portfolio management
14:41
Speaker 2: being one of the things that does factor into PCE,
14:44
Speaker 2: it does put some upward pressure on PCE estimates. The
14:48
Speaker 2: ones that I've seen now are suggesting it's most likely
14:51
Speaker 2: somewhere in the point three to point four percent for
14:54
Speaker 2: core PCE, which would be an acceleration in a hotter
14:58
Speaker 2: number than you'd.
14:58
Speaker 4: Like to see.
15:00
Speaker 2: But so as you it's also it's also not something
15:04
Speaker 2: that is going to be replicated month over month. Those
15:07
Speaker 2: costs are not going to move up in that fashion
15:10
Speaker 2: each month in those categories. So here here's kind of
15:13
Speaker 2: the weird place that I've landed on. This is despite
15:18
Speaker 2: this probably pushing up PCE and core PCE for the
15:21
Speaker 2: month of July, I'm not really sure there's that much
15:26
Speaker 2: meat on this bone when it comes to this PPI report.
15:30
Speaker 2: So it's kind of, Hey, headline report is hot, but
15:34
Speaker 2: the underlying causes doesn't really look that bad quite honestly,
15:40
Speaker 2: which this strange thing is CPI on Wednesday. Hey, the
15:45
Speaker 2: headline number looked okay, but the underlying looked kind of gross.
15:49
Speaker 2: And yet markets rallied one percent on that It's kind
15:52
Speaker 2: of funny that this is the opposite where, hey, the
15:54
Speaker 2: headline looks gross, but I'm not sure this report is
15:57
Speaker 2: actually that bad when you dig into the details, and
16:01
Speaker 2: markets are, you know, having not not a sell off,
16:03
Speaker 2: but markets are down very, very modestly in response. So
16:08
Speaker 2: I just find that kind of interesting because if there's
16:11
Speaker 2: one of these two reports that I would have been
16:12
Speaker 2: more concerned about, it was actually the CPI from a
16:15
Speaker 2: couple of days ago. This one, even with the really
16:18
Speaker 2: hot headline number, I kind of look at it under
16:20
Speaker 2: the surface and go, eh, I'm not really sure there's
16:23
Speaker 2: that much there that's that's gonna be a long term
16:25
Speaker 2: sticking problem. But we'll have to see how future ones
16:29
Speaker 2: develop on this.
16:30
Speaker 3: The I guess interesting thing to me is that it
16:33
Speaker 3: continues the narrative and continues the trend that we've seen,
16:36
Speaker 3: which is we're not really getting inflation from goods.
16:39
Speaker 2: No, And this is the problematic piece if you want
16:42
Speaker 2: to look at like that CPI report, which is okay,
16:45
Speaker 2: inflation is starting to broaden from goods and showing up
16:49
Speaker 2: in some other places, and if it ever does hit,
16:51
Speaker 2: you know, more heavily in goods that you've got a
16:54
Speaker 2: problem there.
16:55
Speaker 4: So I think I think that given.
17:00
Speaker 2: All of this, because the only reason why you know
17:03
Speaker 2: this specific printer, that specific print matters right now is
17:07
Speaker 2: because of what the Fed is going to do.
17:08
Speaker 4: Like no one, no one can reliably.
17:12
Speaker 2: Measure their own inflation month to month, you know, like
17:15
Speaker 2: you don't go and buy a new insurance policy for
17:18
Speaker 2: your house every month. You don't go buy a new
17:20
Speaker 2: car every month. It doesn't really matter what inflation does
17:23
Speaker 2: month over month. We experience it over you know, six
17:26
Speaker 2: months or a year, over longer time periods. But why
17:31
Speaker 2: this matters is because of what the Fed may or
17:33
Speaker 2: may not do. What this certainly does. There was chatter
17:36
Speaker 2: yesterday of you know, oh hey, maybe the Fed's gonna
17:38
Speaker 2: go half a percent in September. Let's pump the brakes
17:41
Speaker 2: on that, you know, like I think that that that
17:44
Speaker 2: this kind of says that if the market was cool
17:47
Speaker 2: doing a quarter percent after Tuesday CPI report, it's still
17:52
Speaker 2: gonna be cool with doing a quarter percent after this one.
17:55
Speaker 2: The interesting thing to me is if the jobless claims
17:59
Speaker 2: numbers continue to be good, and let's say we get
18:01
Speaker 2: a bounce back jobs report in early September.
18:04
Speaker 3: That's what I asked the other day on Tuesday, I
18:07
Speaker 3: think I asked Marth this, like, how low does unemployment
18:09
Speaker 3: have to go for the FED to have to the
18:12
Speaker 3: FED to not cut.
18:13
Speaker 4: Like, let's just play out a hypothetical here.
18:15
Speaker 2: Let's say that the next jobs report is one hundred
18:18
Speaker 2: and seventy thousand jobs created and upward revisions of eighty
18:22
Speaker 2: thousand to the previous two months, so net gain of
18:25
Speaker 2: like two hundred and fifty thousand relative to where we
18:28
Speaker 2: thought we were. The FED cutting into that with inflation,
18:33
Speaker 2: with core inflation north of three percent.
18:35
Speaker 4: I think they might. I don't know that they should.
18:37
Speaker 2: I think they might too, but like at that point
18:39
Speaker 2: you'd kind of look at it and go, gee, I
18:41
Speaker 2: don't know.
18:42
Speaker 3: I think what's more important is what the unemployment rate
18:44
Speaker 3: does then it is.
18:46
Speaker 2: And look, given the trends that we've seen on the
18:48
Speaker 2: unemployment rate, like there's a convincing case that unemployment in
18:52
Speaker 2: that scenario could drop from four to one to four.
18:55
Speaker 2: How do you cut when unemployment is flat or falling
18:58
Speaker 2: and core PC is rising?
19:01
Speaker 3: Yeah, I would I don't know the answer to it,
19:05
Speaker 3: but I would love to see the debate that heats
19:07
Speaker 3: up in there because you've had a few governors who
19:09
Speaker 3: are saying, nope, we're on board with the cut, and
19:11
Speaker 3: they're also running for that next candidate. If you get
19:14
Speaker 3: that type of print, you just have no, you don't
19:17
Speaker 3: have much ground to stand up.
19:18
Speaker 2: Wouldn't the wild thing be? And again, I have no
19:21
Speaker 2: idea what's gonna happen. Wouldn't the wild thing be if
19:23
Speaker 2: they end up doing nothing? But they have descents to
19:25
Speaker 2: both the hawkish and Ovis side. Yeah, I don't know
19:28
Speaker 2: when the lie, don't know if that's happened.
19:31
Speaker 4: Let's take a quick break here. When we come back,
19:32
Speaker 4: we got Wall Street Watch.
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Speaker 4: Markets are mixed.
20:01
Speaker 5: Right now at ten thirty four, the Dow Jones is
20:04
Speaker 5: down ninety seven points, or just over two tents of percent.
20:08
Speaker 5: SMP five hundred is just barely down one point five
20:11
Speaker 5: to four points or point zero two percent. The Nasdaq,
20:15
Speaker 5: on the other hand, is up seventeen and a half
20:17
Speaker 5: points er point zero eight percent as traders continue to
20:21
Speaker 5: digest this morning's PPI data and the jobless claims data.
20:25
Speaker 4: Coach New York.
20:26
Speaker 5: And Kate Spade parent Tapestry is down fifteen percent after
20:30
Speaker 5: its full year outlook missed analyst estimates. Tapestry forecast full
20:35
Speaker 5: year earnings of five dollars and thirty cents two five
20:38
Speaker 5: dollars and forty five cents per share, while analysts polled
20:41
Speaker 5: we're looking for five dollars and forty nine cents. Farm
20:45
Speaker 5: equipment maker Deer is down seven percent after Deer trim
20:48
Speaker 5: the top end of its full year outlook. The Moleen,
20:51
Speaker 5: Illinois based manufacturer forecast net income of four point seventy
20:55
Speaker 5: five billion to five point twenty five billion, versus a
20:58
Speaker 5: previous forecast of four point seventy five billion two five
21:01
Speaker 5: point five billion. Bullish shares are up twenty two percent.
21:06
Speaker 5: The stock soared more than eighty three percent yesterday, its
21:09
Speaker 5: first day as a public company. And finally, Kratos Defense
21:13
Speaker 5: and Security Solutions Shared shares are up three point seven
21:17
Speaker 5: percent after BTIG upgraded the defense stock to buy on Thursday.
21:22
Speaker 5: Analysts said the company could be a key beneficiary of
21:25
Speaker 5: wider defense budgets. I am ben Kitchen and that was
21:28
Speaker 5: Wall Street Watch.
21:29
Speaker 4: Peace in the Wall Street Journal.
21:32
Speaker 2: Blues states hunt for ways to bring more taxes from
21:35
Speaker 2: the wealthy, including a Taylor's Swift.
21:38
Speaker 3: Tax that is gonna be so popular. I kind of
21:43
Speaker 3: love the idea of just naming unpopular things after popular celebrities.
21:48
Speaker 2: So like, okay, what what's a Beyonce tax gonna be in?
21:54
Speaker 4: Hey? This one? Hey, we're gonna do a fred of
21:56
Speaker 4: Stare tax, you know, like if you.
22:01
Speaker 3: Can, we do it after dead, dead famous people. Sure
22:04
Speaker 3: why they can't object the Robin Williams tax. Here we go,
22:07
Speaker 3: you know, just beloved, beloved. Example, here's the Charlet Maine tax.
22:12
Speaker 3: You know, like, so let's talk about what's happening here.
22:15
Speaker 3: Massachusetts implemented a few years ago the millionaire's tax, the.
22:20
Speaker 2: Napoleon tax paid by short people to long to tall people.
22:27
Speaker 3: Do you like that one? So the Masschusets Millionaire's tax
22:31
Speaker 3: went into effect. What was that twenty three to twenty four?
22:34
Speaker 2: Twenty twenty two was when it was approved. Twenty three
22:36
Speaker 2: was the first year of collection. Yeah, and you know,
22:39
Speaker 2: estimates were for that to raise.
22:41
Speaker 3: At least initial projections that I'm seeing were that it
22:43
Speaker 3: would generate about a billion dollars annually. In twenty twenty four,
22:47
Speaker 3: the thing generated two point two. We've talked about on
22:50
Speaker 3: this program in the most recent year, now, the twenty
22:52
Speaker 3: twenty five year, reaching towards three. Right, he got two
22:55
Speaker 3: point nine versus estimates of one point three billion. Right. So,
22:59
Speaker 3: I think a lot of states are a you know,
23:01
Speaker 3: kind of salivating over what's happened in Massachusetts, be losing
23:05
Speaker 3: out on some federal revenue from things like Medicaid cuts,
23:08
Speaker 3: and wondering what to do about it all. You know,
23:10
Speaker 3: We've talked about the Massachusetts case, and I'm sure we'll
23:13
Speaker 3: get back to it. The point that I made at
23:17
Speaker 3: the time is, look, you can get to any other
23:19
Speaker 3: state within forty five minutes. This is not something that
23:23
Speaker 3: will be terribly successful over the long term, but in
23:27
Speaker 3: the short term, yeah, I mean, you're not about to
23:29
Speaker 3: tear your business out of the state of Massachusetts overnight
23:32
Speaker 3: and try and relocate it elsewhere. And so yeah, I
23:35
Speaker 3: think that this has been, in the eyes of lawmakers,
23:38
Speaker 3: in fact, considerably more successful than initially anticipated, and other
23:42
Speaker 3: states are looking longingly I think so. I think the.
23:48
Speaker 2: Other piece on this that is that we're just gonna need, unfortunately,
23:53
Speaker 2: like five or so years of information in order to
23:57
Speaker 2: make judgments on you mentioned, Okay, someone might not you know,
24:01
Speaker 2: uproot their lives or business right away, but maybe over
24:03
Speaker 2: longer time spans they do.
24:05
Speaker 4: That's one possibility.
24:06
Speaker 2: Another possibility is, hey, there were a bunch of people
24:08
Speaker 2: that took off from the Northeast and headed to Florida
24:12
Speaker 2: and Texas and you know, parts unknown back in twenty
24:16
Speaker 2: twenty one and twenty two. We've started to see, you know,
24:19
Speaker 2: just from a housing data perspective, signs that that migration
24:23
Speaker 2: has abated and may in some cases be reversing on
24:27
Speaker 2: the margins as well. And so I guess part of
24:31
Speaker 2: my question is also, you know, a lot of these
24:33
Speaker 2: other states that saw these big influxes of people were
24:37
Speaker 2: hailed as being you know, hugely successful during that time.
24:41
Speaker 2: Given what we're seeing now, I think we just need
24:43
Speaker 2: more time to see if that was a short term
24:45
Speaker 2: trend or something that's you know, longer term. And so
24:49
Speaker 2: I guess where I'm going on this is.
24:53
Speaker 4: We need more.
24:54
Speaker 2: Time because just because things haven't happened yet, don't mean
24:59
Speaker 2: that they're not going to in the future.
25:01
Speaker 1: Right.
25:01
Speaker 2: The case in point is look at Florida, just as
25:04
Speaker 2: an example, in twenty to one and twenty two, when
25:06
Speaker 2: we saw all of the migration data with you know,
25:08
Speaker 2: Florida and Texas being huge net beneficiaries, everyone was saying, oh,
25:13
Speaker 2: this is the model, this is what you have to
25:14
Speaker 2: do now, and today it doesn't quite feel that way
25:18
Speaker 2: with what we're seeing as far as housing inventories in Florida,
25:21
Speaker 2: cost of insurance and property taxes and things like that
25:24
Speaker 2: that have moved up, right, We're not really seeing the
25:27
Speaker 2: same thing now. So I think it's easy in the
25:31
Speaker 2: case of Massachusetts to take a victory lap here and say, hey,
25:34
Speaker 2: it's been two years and this is doing so much,
25:37
Speaker 2: you know, creating so much additional revenue for the state
25:39
Speaker 2: beyond what we thought.
25:41
Speaker 4: Of course, this is the model, this is what all.
25:43
Speaker 2: States should be doing. But how do we know that
25:45
Speaker 2: this isn't going to be a short term thing just
25:48
Speaker 2: like we saw from those other states, and two years
25:51
Speaker 2: from now it's oh, gee, the millionaire's actually moved and
25:54
Speaker 2: maybe this isn't now. I'm not saying that will or won't.
25:57
Speaker 2: I'm just saying to definitive say hey, after you know
26:01
Speaker 2: a year or two, well this works, we should do
26:03
Speaker 2: It isn't really enough time. I know in today's world,
26:07
Speaker 2: like a year or two can feel like forever because
26:09
Speaker 2: with social media, that's like seven thousand news cycles that
26:13
Speaker 2: you go through, Right, But a year or two is
26:15
Speaker 2: a really short period of time to say that a
26:19
Speaker 2: public policy works or doesn't work.
26:22
Speaker 3: Yeah, I remember this is going back a number of years,
26:25
Speaker 3: and I don't remember specifically what New Jersey did, but
26:28
Speaker 3: I remember a number of years ago New Jersey implemented
26:31
Speaker 3: a new tax one taxpayer moved out of the state,
26:35
Speaker 3: and it resulted in like a giant hole in their
26:38
Speaker 3: overall budget. And so yeah, it can take a little
26:41
Speaker 3: while for these things to play out. And I just
26:44
Speaker 3: keep going back. Right, if you're in Massachusetts earning ten
26:47
Speaker 3: million dollars a year, which I know is not a
26:50
Speaker 3: lot of people, but clearly it's enough people to raise
26:53
Speaker 3: a lot of revenue for the commonwealth, the math really
26:57
Speaker 3: starts to work against you when you consider that versus
27:00
Speaker 3: New Hampshire. Just like you know, you're talking about a
27:05
Speaker 3: lot of money when you're talking about those two and
27:08
Speaker 3: you know at those net words. You don't care quite
27:12
Speaker 3: as much about the public school system, you don't care
27:15
Speaker 3: quite as much about the services that you might get
27:17
Speaker 3: because you're not utilizing many of them. When you're talking
27:20
Speaker 3: about ten million dollars a year in income.
27:22
Speaker 4: Sure I could see that.
27:24
Speaker 3: So we will see. I mean, across the country they're
27:26
Speaker 3: talking about all sorts of different things, Connecticuts floating a
27:28
Speaker 3: new tax on those earning more than half a million dollars.
27:31
Speaker 3: Maryland is considering something new, Rhode Island with their Taylor
27:35
Speaker 3: Swift taxes, talking about you know, expensive vacation properties that
27:39
Speaker 3: might be taxed. There's there's a lot of different questions
27:43
Speaker 3: that are out there, but I think the trend in
27:46
Speaker 3: the short term is going to be in those blue states.
27:49
Speaker 3: At least, Hey, we're missing out on federal funding. Where
27:52
Speaker 3: can we raise taxes? And the trend at least recently
27:56
Speaker 3: has been go after the wealthiest residents.
28:00
Speaker 2: Take a quick break here when we return Big Pharma
28:04
Speaker 2: and Mattresses, the mashup you never.
28:07
Speaker 4: Knew you wanted. Right after this, Mike.
28:11
Speaker 2: I've been told that we need to continue talking about
28:13
Speaker 2: Big Pharma and the mattresses.
28:15
Speaker 3: Yeah, we're having some computer problems.
28:18
Speaker 4: So the AI is fighting back.
28:21
Speaker 3: We're not actually talking about selling the two together, I
28:25
Speaker 3: don't think. But the business model of mattresses, the big
28:30
Speaker 3: farmers want to go and mimic it.
28:34
Speaker 2: So here's the point that's being made here is mattress
28:37
Speaker 2: companies in recent years have taken to selling direct to consumer.
28:42
Speaker 2: A whole bunch of different brands out there that advertise
28:44
Speaker 2: now and you get a mattress ship to you, and
28:46
Speaker 2: you get a thirty day free trial and hey, if
28:48
Speaker 2: you can get it back in that box, you can
28:50
Speaker 2: return it, no problems, no questions asked.
28:52
Speaker 3: Used to buy it at Sears. Now you buy it
28:54
Speaker 3: directly from Purple or Yeah, there's a bunch of them
28:57
Speaker 3: out there.
28:58
Speaker 2: Purple Avocado was one for a little bit. I don't
29:01
Speaker 2: know how they name these things, but you know, it
29:03
Speaker 2: is what it is. And big farmers talking about doing
29:07
Speaker 2: this as a way to get costs down. And I
29:13
Speaker 2: got a lot of questions. I've got some questions too
29:16
Speaker 2: on this because here's the thing about buying a mattress
29:22
Speaker 2: is you buy a mattress and you like you don't
29:25
Speaker 2: have to ask permission to buy the mattress or anything
29:28
Speaker 2: where it's typically like you need a prescription and a
29:29
Speaker 2: whole processing you know, center and grant that you can
29:32
Speaker 2: set these up. Like there are plenty of companies that
29:34
Speaker 2: have you know, done that. The big one that's out
29:36
Speaker 2: there right now is Hymns and Hers Health.
29:40
Speaker 3: But you know, I mean the details of that. I
29:43
Speaker 3: want to say. The way it works is you get
29:45
Speaker 3: a medical consultation from Hymns and HER's Health, who prescribes
29:48
Speaker 3: medicine to you.
29:49
Speaker 2: You're correct, Which is different from setting up a system
29:52
Speaker 2: to receive prescriptions from a vast network of doctors nationwide.
29:57
Speaker 3: Right, And I mean just think about a massive conflict
30:01
Speaker 3: of interest there. Right, I work as an employee for
30:06
Speaker 3: a company who makes money selling drugs, and my job
30:10
Speaker 3: is to determine whether or not you are going to
30:12
Speaker 3: benefit from those drugs.
30:14
Speaker 2: Well, and beyond that, there's also some questions just about
30:19
Speaker 2: basically what they're actually selling is compounded versions of other
30:23
Speaker 2: drugs in most cases, and so how long does the
30:27
Speaker 2: FDA or even in some case you could look at
30:30
Speaker 2: like the FTC from a patent infringement perspective, allow for
30:33
Speaker 2: that to happen.
30:34
Speaker 4: And there are some questions there.
30:35
Speaker 3: But I mean different for Eli Lilly, Right, they own
30:38
Speaker 3: these drugs. They could do this too, but man, I
30:42
Speaker 3: just wouldn't trust them too well.
30:44
Speaker 2: And here's the other piece is and I'll quote here
30:46
Speaker 2: from is this barons.
30:48
Speaker 4: I think so, Eli, Lilly and.
30:50
Speaker 2: Novo Nordisk are already selling their obesity injections straight to
30:53
Speaker 2: consumers at prices well below list price, though still above
30:57
Speaker 2: what inshored patients would pay at the pharmacy counter. Right,
31:02
Speaker 2: So what's the incentive for me to do that? Kind
31:06
Speaker 2: of tough. Obviously, it could potentially bring the overall costs
31:10
Speaker 2: down the cost structure in the US, but it doesn't
31:13
Speaker 2: change the fact that you personally are paying more. So
31:16
Speaker 2: it's kind of like, why would I do that?
31:18
Speaker 3: I guess if I don't want to have health insurance anymore,
31:21
Speaker 3: which seems like a pretty narrow which if I'm on
31:23
Speaker 3: obese drugs, I would think I would want toeah, But
31:26
Speaker 3: that's just me. Let's take a quick break.
31:28
Speaker 2: When we come back, we're talking Google and Chrome after
31:31
Speaker 2: this mis.
31:32
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31:40
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Speaker 1: Wall Street. This is the Financial Exchange Radio Network.
32:09
Speaker 2: Piece in CMBC talking about Google and its Chrome browser
32:16
Speaker 2: and basically, look, Google has been going through a couple
32:21
Speaker 2: of different anti trust trials. That one of them, I'm
32:28
Speaker 2: trying to remember when it finished.
32:29
Speaker 4: It was earlier this year, late last year.
32:31
Speaker 3: I couldn't tell you.
32:32
Speaker 2: But basically they're awaiting a judge's decision in one of
32:35
Speaker 2: the trials as to whether they have to start divesting
32:38
Speaker 2: portions of the company. And you know, clearly the stuff
32:43
Speaker 2: that's being you know that everyone wants to speculate on
32:45
Speaker 2: is are they going to have to you know, sell
32:47
Speaker 2: off YouTube or are they going to have to you know,
32:49
Speaker 2: split their search and ad business.
32:51
Speaker 4: And meanwhile, Perplexity, who is.
32:53
Speaker 2: An artificial intelligence company with revenues in the millions, might
32:57
Speaker 2: I add not billions? Perplexity come along earlier this week
33:01
Speaker 2: and decides, ye, shooter's gonna shoot and makes a thirty
33:04
Speaker 2: four and a half billion dollar bid that, by the way,
33:07
Speaker 2: they do have lines of credit and stuff that could
33:10
Speaker 2: you know, get there, and you know, some equity financing
33:12
Speaker 2: that they could figure out in theory.
33:14
Speaker 3: So Perplexity just for those listening AI AI generation company
33:22
Speaker 3: similar to the likes of GPT.
33:26
Speaker 4: Yeah kind of.
33:27
Speaker 2: I mean there's so it's it's more a they've really
33:31
Speaker 2: built it to try to be a search engine specifically,
33:34
Speaker 2: and so it's it's really focused on trying to replace
33:39
Speaker 2: search more than you know, conversational chatbots and things along
33:42
Speaker 2: those lines.
33:43
Speaker 3: So one could see how owning the most popular browser
33:46
Speaker 3: in the world would be beneficial to them.
33:49
Speaker 2: Sure obviously, Like you think about the amount of information
33:51
Speaker 2: and data that you could gather from that browser and
33:54
Speaker 2: use and you say, okay, like I get this, and
33:58
Speaker 2: you know, Perplexity is just trying to be opportunistic. I
34:01
Speaker 2: don't think Google's going to take them up on this
34:04
Speaker 2: just because.
34:05
Speaker 3: No, but it's evidence that the judge might now need
34:07
Speaker 3: to consider, like one of these things worth on their own.
34:12
Speaker 3: Is it reasonable to cause a breakup? I don't know,
34:14
Speaker 3: I'm I'm not a judge. I've never presided of or anything.
34:18
Speaker 3: But this is, you know, a private company putting a
34:21
Speaker 3: price tag on one of the things you might force
34:23
Speaker 3: them to sell.
34:24
Speaker 2: And the big thing is Chrome is just a huge
34:30
Speaker 2: if you will get browser market share and kind of
34:34
Speaker 2: where things stand right now, and this is according to
34:37
Speaker 2: data from cloud Flare, who's a big back end provider
34:42
Speaker 2: for basically like DNS systems and internet services for companies,
34:50
Speaker 2: if you will get browsershare right now, Chrome is far
34:52
Speaker 2: and away in q one the largest browser in the country.
34:57
Speaker 2: It's got sixty three percent of the browser market, next
35:01
Speaker 2: to Safari at seventeen. So while you Apple fans out there,
35:05
Speaker 2: that's you, Microsoft Edge is a distant third at seven
35:08
Speaker 2: percent and.
35:10
Speaker 3: Can't get anyone to use their breast.
35:11
Speaker 2: And then who's using Firefox still about four percent of users.
35:15
Speaker 2: There's something called Samsung Internet that gets two percent of users.
35:20
Speaker 2: And then you've got people that are still on Opera
35:22
Speaker 2: for some reason, and then you just get into stuff
35:24
Speaker 2: that I've never heard of. Quite honestly, I don't know
35:27
Speaker 2: what the Yandex browser is. I don't know what the
35:29
Speaker 2: QQ browser is, the Vivo browser, UC browser, ME browser,
35:35
Speaker 2: something that's just called whale is out there, you know,
35:39
Speaker 2: And so yeah, getting Chrome would.
35:43
Speaker 4: Obviously be a big coup, But.
35:48
Speaker 2: I don't even know if this is a viable bit
35:49
Speaker 2: just from a dollar value perspective given how much market
35:52
Speaker 2: share it has.
35:53
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36:45
Speaker 2: Mike, it looks like, according to this piece from the
36:49
Speaker 2: Financial Times, Italy is going through the same thing that
36:54
Speaker 2: the US has gone through recently. Which here's the headline,
36:57
Speaker 2: how dogs replace children in Italy? You got grand dogs
37:01
Speaker 2: that are being born in Italy too, not just in
37:03
Speaker 2: the US.
37:05
Speaker 3: All right, So I don't have any problem with pet ownership.
37:07
Speaker 3: I own two pets myself. I just that's what I want.
37:14
Speaker 4: Came down and saw you picking up all their droppings.
37:17
Speaker 3: They would think I'm pretty strange.
37:18
Speaker 4: Yeah, who's really in charge here?
37:20
Speaker 3: Prime Minister Giorgio Maloney's government has begun allocating two hundred
37:24
Speaker 3: and fifty thousand euro a year for an animal bonus
37:27
Speaker 3: to help elderly pet owners with limited incomes cover some
37:30
Speaker 3: of their veterinary expenses.
37:34
Speaker 4: What why would we do that? Italy?
37:38
Speaker 3: You have a massive demographics problem of people not having
37:41
Speaker 3: enough kids, and instead of allocating resources to figuring out
37:44
Speaker 3: that one, you're giving money to people to make sure
37:46
Speaker 3: they can afford to keep their pets up to date
37:50
Speaker 3: on their shots.
37:53
Speaker 4: Gonna be honest, I'm kind of okay with it.
37:56
Speaker 3: Fine, spend your money how you want.
37:58
Speaker 4: It's clear that like trying to incentives childbirth through.
38:02
Speaker 5: It.
38:03
Speaker 4: Don't have a dog, man, bet man's best friend.
38:07
Speaker 2: Get a cat if you want it to, No problem,
38:09
Speaker 2: quick break here, I were two coming up in a
38:11
Speaker 2: bit