Latest / The Financial Exchange Show / Weak Retail Sales Do Not Mean a Weak Economy

Transcript

Weak Retail Sales Do Not Mean a Weak Economy · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:02
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:05
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:08
  Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:11
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:14
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:17
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 0:20
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:23
  Speaker 1: this program do not endorse each other or their services.
• 0:26
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:28
  Speaker 1: for referrals and are not affiliated. This is the Financial
• 0:34
  Speaker 1: Exchange with Chuck Zada and Mike Armstrong, Your exclusive look
• 0:38
  Speaker 1: at business and financial news affecting your day, your city,
• 0:42
  Speaker 1: your world. Stay informed and up to date about economic
• 0:46
  Speaker 1: and market trends plus breaking business news every day. The
• 0:50
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:53
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:57
  Speaker 1: heroes by visiting dav five K Boston and making a
• 1:01
  Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
• 1:06
  Speaker 1: and Mike Armstrong.
• 1:09
  Speaker 2: Chuck, Mike and Tucker with you here on a Friday.
• 1:13
  Speaker 2: And as we head into the weekend of what really
• 1:18
  Speaker 2: has been just a quiet summer Duldrum's kind of week,
• 1:24
  Speaker 2: you still get pieces like this from Yahoo Finance because look,
• 1:28
  Speaker 2: I actually this is from Reuter's originally, but Yaho Finance
• 1:31
  Speaker 2: picked it up, and you get sentences like this. Investors
• 1:38
  Speaker 2: head into next week weighing familiar concerns over interest rates, inflation,
• 1:42
  Speaker 2: and geopolitical tensions against another robust earning season that continues
• 1:47
  Speaker 2: to keep stock supported. So here's the thing, Like this week,
• 1:52
  Speaker 2: I told people heading into this week, like it's not
• 1:54
  Speaker 2: really worth getting out of bed for it. And by
• 1:56
  Speaker 2: the way, love to toot my own horn occasionally. Is right, Like,
• 2:01
  Speaker 2: there hasn't been anything interesting that's happened this week.
• 2:04
  Speaker 3: No surprises. I mean, data came out, but no surprises.
• 2:07
  Speaker 2: Yeah, it's been a forgettable week in markets, which is fine.
• 2:12
  Speaker 2: Like and quite honestly, if you look at the calendar
• 2:15
  Speaker 2: the next couple weeks, take the rest of the month off.
• 2:20
  Speaker 3: Take the rest of the month off.
• 2:22
  Speaker 2: I'm completely serious, Like, you look at what's coming next week.
• 2:26
  Speaker 2: Tell me if any of this gets you excited, Mike.
• 2:28
  Speaker 2: On Monday, New York Empire State Manufacturing Index.
• 2:31
  Speaker 4: Listen, Chuck, I'm going to have to speak about it
• 2:34
  Speaker 4: for a combined like ten hours.
• 2:37
  Speaker 3: So you know. No, no, I'm no.
• 2:40
  Speaker 2: You can't do that, Michael, because then when something important
• 2:43
  Speaker 2: actually happens, nothing can be important if everything's important.
• 2:47
  Speaker 3: I don't care about Empire statement. I tell people the truth.
• 2:49
  Speaker 2: Find something else to talk The NAHB Housing Market Index,
• 2:52
  Speaker 2: forget about it. Okay, building permits and housing starts.
• 2:56
  Speaker 5: What about retail sales this morning?
• 2:58
  Speaker 3: Uh? Even that forget like, we'll get to it.
• 3:01
  Speaker 2: It wasn't good data, but it also doesn't matter, is
• 3:05
  Speaker 2: the point that I'll make.
• 3:07
  Speaker 3: And should we discuss retail sales?
• 3:10
  Speaker 1: Yeah?
• 3:10
  Speaker 3: Okay, retail sales were bad? Uh?
• 3:13
  Speaker 2: It was again just not a good month for retail sales.
• 3:16
  Speaker 2: Four July, we saw the headline number UH come in
• 3:21
  Speaker 2: down point six percent versus consensus estimates of point one
• 3:24
  Speaker 2: to point three percent growth. X Autos down point three
• 3:28
  Speaker 2: percent compared to consensed estimate of point two percent growth.
• 3:32
  Speaker 2: X gas and X autos down two percent compared to
• 3:35
  Speaker 2: expectations of point three percent growth. So a bad retail
• 3:37
  Speaker 2: sales number, No matter which it. Here's why I say
• 3:40
  Speaker 2: it doesn't matter. Michael, what's happening to the Tenure Treasury today?
• 3:43
  Speaker 3: I don't know. Haven't looked. No, you should? You should?
• 3:48
  Speaker 3: Is it blown out? No, not blowing out, but I
• 3:50
  Speaker 3: want you to take a look at it.
• 3:52
  Speaker 4: Okay, at four point sixty six two, it's up slightly.
• 3:57
  Speaker 2: It's up slightly, Mike. Does the Tenure Treasury normally move
• 4:00
  Speaker 2: up when retail sales have a bad miss? H?
• 4:03
  Speaker 3: No.
• 4:03
  Speaker 4: Generally we are a consumer focused economy, and U investors
• 4:08
  Speaker 4: take a bad retail sales number as concerned about the consumer.
• 4:13
  Speaker 3: So again, it didn't matter.
• 4:15
  Speaker 2: Is like, that's the point I'm making, is the market
• 4:19
  Speaker 2: is whether you're talking about like the actual data that's
• 4:22
  Speaker 2: coming through, which again, most of the stuff just doesn't matter.
• 4:25
  Speaker 2: Next week, Like, is anyone going to get all excited
• 4:28
  Speaker 2: about FOMC minutes?
• 4:30
  Speaker 3: Yes? No, Well, actually there's been some drama.
• 4:33
  Speaker 4: I mean we've been talking about how it's you know,
• 4:36
  Speaker 4: keeping up with the what was the h didn't we
• 4:41
  Speaker 4: come up with a reality show name for the new
• 4:42
  Speaker 4: Federal Reserve?
• 4:44
  Speaker 3: Keeping up with the Burnikes? No, keeping up with the Chairman. Yeah,
• 4:49
  Speaker 3: I don't remember what we came up with.
• 4:51
  Speaker 4: But yeah, there's been some fireworks, so maybe get something
• 4:54
  Speaker 4: exciting there, but probably not, you.
• 4:55
  Speaker 2: Know, like and again like that is the most exciting
• 4:58
  Speaker 2: piece of data. Next week, there's just nothing on the
• 5:02
  Speaker 2: earning side. Next week we do get a couple companies
• 5:04
  Speaker 2: that are like, kind of interesting. You got home Depot's
• 5:08
  Speaker 2: gonna be reporting. You got lows TJX, so you're gonna
• 5:11
  Speaker 2: get some some retail color Walmartle tell us what's going on,
• 5:14
  Speaker 2: But again, not much usually happens in August once you
• 5:19
  Speaker 2: get past like the first couple of weeks. And I
• 5:23
  Speaker 2: checked the date today, it's it's August fourteenth, So.
• 5:26
  Speaker 3: Chuck, I have a question.
• 5:27
  Speaker 4: Then, yes, interest rates aren't moving down on a weaker
• 5:30
  Speaker 4: than anticipated retail sales report. As you mentioned, when economists
• 5:35
  Speaker 4: and investors get worried about the consumer, they tend to
• 5:39
  Speaker 4: get worried about the economy as a whole, because traditionally
• 5:42
  Speaker 4: we are an economy that relies heavily on consumer spending
• 5:45
  Speaker 4: to juice it over time.
• 5:49
  Speaker 3: Why not this time because the economy's fine.
• 5:54
  Speaker 2: I know, no one wants to hear that because everyone
• 5:56
  Speaker 2: wants to always like the smart thing is to be like,
• 5:59
  Speaker 2: you're the way to sound smartest, to be like, well,
• 6:01
  Speaker 2: I'm so concerned about this and about that.
• 6:04
  Speaker 3: Guys, here's the deal.
• 6:05
  Speaker 2: Inflation's high, consumers are stressed, and it still doesn't matter
• 6:09
  Speaker 2: to the economy.
• 6:11
  Speaker 4: I was going to say that this moment, unlike most
• 6:14
  Speaker 4: other since at least I've been doing this program, the
• 6:17
  Speaker 4: economy is not being defined by the consumer in the
• 6:19
  Speaker 4: same way, no being defined by capital expenditures on behalf
• 6:23
  Speaker 4: of giant corporations, which has really new.
• 6:27
  Speaker 2: It's it's something where well that plus again the deficits
• 6:31
  Speaker 2: that you have on the federal side, how do you
• 6:35
  Speaker 2: have a recession if you're running six percent federal deficits
• 6:41
  Speaker 2: in like a good economy while capex is ramping up
• 6:48
  Speaker 2: at the pace that it is right now, Like, I
• 6:51
  Speaker 2: don't know how you have a recession in that situation. Now,
• 6:56
  Speaker 2: if the capex situation changes, if we decide to suddenly
• 7:00
  Speaker 2: become you know, deficit hawks, Okay, Like, yeah, now we
• 7:04
  Speaker 2: can talk about recession. But people just love to think
• 7:09
  Speaker 2: that recession is always just around the corner. And don't
• 7:11
  Speaker 2: get me wrong, eventually it will be because we haven't
• 7:14
  Speaker 2: seen our last recession. But What matters is the directional
• 7:18
  Speaker 2: impulse from different types of spending. And if retail spending
• 7:21
  Speaker 2: is pulling back a bit, okay, like yeah, I'll you know,
• 7:24
  Speaker 2: at least note it in there, But it's going up
• 7:26
  Speaker 2: against this tidal wave of federal spending and AI based capex,
• 7:32
  Speaker 2: and the negative retail impulse has to be bigger than
• 7:35
  Speaker 2: just one month of bad numbers here. I think that's
• 7:39
  Speaker 2: the point that I'll make. So I'm not sitting here
• 7:42
  Speaker 2: trying to, you know, blow sunshine and tell you like
• 7:45
  Speaker 2: everything's perfect. What I'm telling you is that we have
• 7:48
  Speaker 2: these flaws in the economy. We do, but the amount
• 7:53
  Speaker 2: of spending that's going on is just enough to mask
• 7:55
  Speaker 2: it because we're not talking about getting more you know,
• 7:59
  Speaker 2: fit schooly hawkish. We got new tax plans being floated
• 8:03
  Speaker 2: this week that are talking about like raising the capital
• 8:05
  Speaker 2: gains exemption on personal residences to what like two million
• 8:08
  Speaker 2: dollars or something.
• 8:09
  Speaker 4: Yeah, uh so, yeah, we're not We're not gonna sell
• 8:12
  Speaker 4: then become deficit hawks. I'm also unconvinced in this moment
• 8:15
  Speaker 4: in time that a weakening consumer, even for the next
• 8:18
  Speaker 4: several months, would mean much of anything for state of
• 8:22
  Speaker 4: GDP or the stock market or anything else.
• 8:26
  Speaker 3: I don't know. It would depend on the magnitude.
• 8:28
  Speaker 2: Like, I'm not gonna sit here and tell you, like, hey,
• 8:30
  Speaker 2: if like the consumer gets way worse, everything's fine, of.
• 8:33
  Speaker 3: Course, but there's not really a path for that to happen.
• 8:36
  Speaker 4: And even if they weakened a little bit, what might
• 8:38
  Speaker 4: have been a bad signal in the past, I'm not
• 8:41
  Speaker 4: sure would give you the same signal in this economy.
• 8:44
  Speaker 2: Yeah, and look, the underlying data on consumers is that
• 8:47
  Speaker 2: incomes at the lower end of the wage spectrum are
• 8:49
  Speaker 2: now moving up in line with other workers.
• 8:53
  Speaker 3: See a later K shaped economy, Right, We're no longer
• 8:55
  Speaker 3: case shape.
• 8:56
  Speaker 2: Now we're like, uh, well if everyone now we're like
• 9:00
  Speaker 2: an M dash shaped economy.
• 9:02
  Speaker 3: What an M dash?
• 9:03
  Speaker 2: The long dash that everyone identifies with AI, Even though
• 9:07
  Speaker 2: it's actually one of the best writing tools that you
• 9:09
  Speaker 2: can use as someone who enjoys good grammar, you know,
• 9:13
  Speaker 2: it's one of my biggest regrets about AI is that.
• 9:17
  Speaker 3: It takes.
• 9:20
  Speaker 2: Useful and unique pieces of grammar and has commoditized and
• 9:25
  Speaker 2: ruined them.
• 9:28
  Speaker 4: Yeah, it's one of the easiest way to detect. Ways
• 9:30
  Speaker 4: to detect AI writing.
• 9:31
  Speaker 2: Is which the problem, Like I love using dashes like
• 9:34
  Speaker 2: it's it's something that I've enjoyed for a while. You
• 9:36
  Speaker 2: can go back and look at my writing from ten
• 9:38
  Speaker 2: years ago, and it was just, you know, they were proliferate,
• 9:41
  Speaker 2: like just proliferating pieces. They were everywhere, and probably too
• 9:45
  Speaker 2: much to a certain extent, but you know that. And
• 9:48
  Speaker 2: you know what punctuation mark is very underappreciated and underutilized.
• 9:55
  Speaker 3: The upside down exclamation point. Nope, nope, the semicolon.
• 10:01
  Speaker 2: I think that the semi colon is it's it's kind
• 10:05
  Speaker 2: of like the full back in football right where it's
• 10:08
  Speaker 2: fallen out of style, but still if you use it appropriately, well,
• 10:12
  Speaker 2: no one knows how to use it. It opens up
• 10:14
  Speaker 2: all kinds of possibilities. Full back, both of them, both
• 10:18
  Speaker 2: of them. No one knows how to use a full back.
• 10:20
  Speaker 2: Everyone like wants to be oh no, it can be
• 10:21
  Speaker 2: another pass catcher. No, like, you use that full back
• 10:25
  Speaker 2: to open up possibilities for the rest of the words
• 10:27
  Speaker 2: on your team.
• 10:28
  Speaker 5: Semi colon is like kind of a period, but it's
• 10:30
  Speaker 5: not and it might be.
• 10:32
  Speaker 2: It's not a coal and it's it's like it's half
• 10:34
  Speaker 2: a coalon. That's exactly right. It's the top half. It's
• 10:37
  Speaker 2: it's kind of like a centaur for punctuation. The top
• 10:40
  Speaker 2: half is a colon, the bottom is a comma.
• 10:44
  Speaker 3: Right.
• 10:45
  Speaker 5: I'm just gonna use it all the time.
• 10:46
  Speaker 3: Though.
• 10:49
  Speaker 2: In conclusion, retail sales this month don't really matter. Let's
• 10:53
  Speaker 2: take a quick break. When we return. Uh, let's talk
• 10:56
  Speaker 2: a little bit about what we're seeing in the bond
• 10:58
  Speaker 2: market in a little bit more deepis.
• 11:00
  Speaker 1: The latest news on inflation, the Fed, the economy, and
• 11:04
  Speaker 1: how the markets are reacting. Every morning right here on
• 11:07
  Speaker 1: the Financial Exchange Radio Network. The Financial Exchange Show podcast
• 11:12
  Speaker 1: drops every day on Apple, Spotify, and iHeartRadio. Hit that
• 11:16
  Speaker 1: subscribe button and leave us a five star review. You're
• 11:19
  Speaker 1: listening to the Financial Exchange Radio Network.
• 11:25
  Speaker 5: If you missed any of our shows from this week,
• 11:27
  Speaker 5: you can simply find them on our YouTube page. We
• 11:31
  Speaker 5: stream the show live every day, but also archive every
• 11:34
  Speaker 5: hour and highlights of the show. So all they have
• 11:37
  Speaker 5: to do go to YouTube, search for the Financial Exchange
• 11:41
  Speaker 5: Show and be sure to hit that subscribe button.
• 11:46
  Speaker 3: Peace in Bloomberg.
• 11:47
  Speaker 2: Here costly as US bond sales since two thousand and
• 11:50
  Speaker 2: one is investor warning to Bessen't so here's the deal.
• 11:55
  Speaker 2: Yesterday there was a twenty five billion dollars sale of
• 11:59
  Speaker 2: thirty years US bonds. They priced an interest rate of
• 12:03
  Speaker 2: five point two one six percent, which is the highest
• 12:05
  Speaker 2: interest rate on them since two thousand and one. And
• 12:10
  Speaker 2: basically it's saying, okay, like this is you know, causing
• 12:13
  Speaker 2: you know, it's what we're seeing now because yields have
• 12:16
  Speaker 2: gone up, it's influencing government borrowing costs, and it's taking
• 12:19
  Speaker 2: up more space on the budget, which then, in turn,
• 12:22
  Speaker 2: because we're not raising taxes and we're not cutting spending,
• 12:26
  Speaker 2: makes the deficit bigger as borrowing.
• 12:28
  Speaker 3: Costs go up.
• 12:29
  Speaker 2: So you get kind of this cycle that can happen
• 12:31
  Speaker 2: sometimes in certain countries, hasn't really happened in the United States.
• 12:36
  Speaker 2: And remember that ultimately long term bonds are determined basically
• 12:43
  Speaker 2: by what investors think the path of short term rates
• 12:46
  Speaker 2: are going to be during that time. You can do
• 12:48
  Speaker 2: a process called bootstrapping where you basically go out and
• 12:51
  Speaker 2: you know, figure out, okay, what is each year's interest
• 12:54
  Speaker 2: rate that's priced into the market going out for thirty years,
• 12:58
  Speaker 2: and that's how you eventually get to what the thirty
• 13:00
  Speaker 2: year yield is. So it is clear that the the
• 13:06
  Speaker 2: Trump administration and every administration before it, they pay attention
• 13:10
  Speaker 2: to what bond yields are like everyone in government does,
• 13:14
  Speaker 2: because it's something that does matter to a certain extent.
• 13:18
  Speaker 2: It hasn't mattered as much in the United States because
• 13:20
  Speaker 2: we are the world's reserve currency with the dollar and
• 13:24
  Speaker 2: so as that there's basically been an unlimited appetite for
• 13:28
  Speaker 2: US debt since World War Two pretty much. But it
• 13:33
  Speaker 2: is something where you know, we've talked about it. Hey,
• 13:36
  Speaker 2: at some point, maybe this becomes a problem that actually
• 13:40
  Speaker 2: starts to matter in different terms to the United States,
• 13:43
  Speaker 2: But right now it's more of a nuisance than any
• 13:47
  Speaker 2: meaningful problem that has really developed.
• 13:50
  Speaker 3: Chuck.
• 13:50
  Speaker 4: A few times in the last several years, rises in
• 13:54
  Speaker 4: interest rates have been or increases in interestrates have been
• 13:58
  Speaker 4: put on the doorstep or blamed on, you know, giant deficits,
• 14:05
  Speaker 4: and finally the deficit hawks coming into the bond market.
• 14:09
  Speaker 4: And we have seen an uptick in interest rates again
• 14:12
  Speaker 4: this time here. Since June, we've seen rates shoot up
• 14:15
  Speaker 4: from four point four to where we are now. Since
• 14:18
  Speaker 4: the beginning of the year, it's been more severe. It's
• 14:22
  Speaker 4: not that nobody's talking about deficits. But I don't think
• 14:24
  Speaker 4: I'm ready to jump to the idea that, oh, yeah,
• 14:27
  Speaker 4: interest rates are heading up right now because people are
• 14:29
  Speaker 4: concerned about deficits. There's a few other things going on
• 14:33
  Speaker 4: here that might be affecting this, one of which would
• 14:36
  Speaker 4: be the war in Iran. The second might be Kevin
• 14:40
  Speaker 4: Warsh in the Federal Reserve, and his actions are lack
• 14:43
  Speaker 4: thereof on inflation.
• 14:44
  Speaker 2: Sure, And so look the point that I'll make, Hey,
• 14:47
  Speaker 2: the thirty year treasury has gone from around four point
• 14:51
  Speaker 2: eight five percent at the end of June to five
• 14:54
  Speaker 2: point two four percent today. So if you're going to
• 14:56
  Speaker 2: tell me that that's all about deficits, then here's the
• 14:59
  Speaker 2: question that I'll ask you. From mid May until the
• 15:02
  Speaker 2: end of June, the thirty year treasury went from five
• 15:05
  Speaker 2: to one to nine down to four eight five. Mike,
• 15:08
  Speaker 2: did the deficit picture meaningfully improve during the latter part
• 15:12
  Speaker 2: of May and early part of June.
• 15:14
  Speaker 3: Not that I re call no, no, it didn't.
• 15:15
  Speaker 2: It continue to get worse, just as it has for
• 15:17
  Speaker 2: the last twenty five years.
• 15:18
  Speaker 3: Where are we running right now in terms of oh, Mike,
• 15:21
  Speaker 3: we're gonna cross forty trillion dollars in the next week.
• 15:23
  Speaker 2: Oh, that's forty trillions, right, justin what's what's a few
• 15:27
  Speaker 2: trillion amongst friends?
• 15:29
  Speaker 4: Man deficits to GDP for twenty twenty six, What are
• 15:32
  Speaker 4: the estimates now?
• 15:33
  Speaker 3: Hi?
• 15:34
  Speaker 2: Yeah, like in terms of like the annual one, Yeah,
• 15:37
  Speaker 2: I mean like five point eight to six point two percent.
• 15:41
  Speaker 3: So I just want to point this one out again.
• 15:44
  Speaker 4: No president has been serious about deficits and fiscal discipline
• 15:50
  Speaker 4: since the late nineties early two thousands. That's the last
• 15:54
  Speaker 4: time I think you can claim any sort of severity.
• 15:57
  Speaker 4: And it has gotten really significantly worse over the course
• 16:01
  Speaker 4: of the last decade. And so I was again sitting
• 16:04
  Speaker 4: with somebody who was yesterday complaining about the previous Biden administration,
• 16:08
  Speaker 4: and plenty there to complain about, but one of them
• 16:11
  Speaker 4: was and plus he was running those giant deficits, and
• 16:13
  Speaker 4: I did have to step in there to say that's true.
• 16:15
  Speaker 4: But that has not improved at all under President Trump.
• 16:18
  Speaker 3: No, here's the deal.
• 16:19
  Speaker 2: If you want to be serious about deficits, you have
• 16:23
  Speaker 2: to do one or a combination of three or four things.
• 16:28
  Speaker 2: Number One, you gotta cut solid security and medicare. There
• 16:33
  Speaker 2: are a lot of appetite for that not from what I've seen. No,
• 16:36
  Speaker 2: we what was it a year ago or two years ago?
• 16:39
  Speaker 2: We went the other direction.
• 16:40
  Speaker 3: Yeah, we bumped up.
• 16:42
  Speaker 2: Actually, you can make a case we've done a couple
• 16:44
  Speaker 2: of things on the social security and medicare side that
• 16:47
  Speaker 2: have made things worse in the last two to three years.
• 16:49
  Speaker 3: Yep.
• 16:50
  Speaker 2: Number two, Uh, you've got to reign in defense spending.
• 16:55
  Speaker 3: Do we get since that's happening quite the opposite, No,
• 16:58
  Speaker 3: we don't.
• 16:59
  Speaker 4: Yeah, by the way, that piece one of those actions
• 17:01
  Speaker 4: was by Biden, one of was one of them was
• 17:03
  Speaker 4: under Trump.
• 17:04
  Speaker 3: Yep.
• 17:04
  Speaker 2: It's again like this, It's not like in either close situation.
• 17:09
  Speaker 2: It's it's like just how it is now.
• 17:11
  Speaker 4: We claim to have all these big disagreements, but we
• 17:13
  Speaker 4: seem to do the same exact thing regardless of who
• 17:16
  Speaker 4: is in power.
• 17:16
  Speaker 3: Uh. Next one, Uh, higher taxes, we gonna do that?
• 17:20
  Speaker 3: Uh certainly, not from what I've seen. No.
• 17:22
  Speaker 2: Instead, what we did, we we did the whole you know,
• 17:25
  Speaker 2: doze dog and pony show that ended up cutting basically
• 17:27
  Speaker 2: nothing from the federal budget. And we're stuck now with
• 17:31
  Speaker 2: these six percent deficits because we're not going to address
• 17:33
  Speaker 2: the actual drivers, which are social security, Medicare, defense spending,
• 17:38
  Speaker 2: and the lack of additional tax revenue because we keep
• 17:41
  Speaker 2: cutting taxes instead. And so if we like, if we're
• 17:45
  Speaker 2: not going to be serious about either side of the ledger,
• 17:47
  Speaker 2: then it's not even worth the conversation.
• 17:50
  Speaker 3: Quite honest. Yeah, yeah, it's not you know, it's it's
• 17:54
  Speaker 3: it's that's not true.
• 17:55
  Speaker 4: It is worthy of the conversation because if we continue
• 17:59
  Speaker 4: to just let our elected officials do nothing about this,
• 18:03
  Speaker 4: than to your point, someday it's probably going to blow
• 18:05
  Speaker 4: up in our faces.
• 18:07
  Speaker 3: I have no idea when that will be, but it
• 18:08
  Speaker 3: probably will.
• 18:09
  Speaker 4: Maybe not during my lifetime, but I don't really want
• 18:12
  Speaker 4: to do that to my children.
• 18:13
  Speaker 2: Well, the good news is that the new class of
• 18:18
  Speaker 2: incoming senators who are elected this fall, they will be
• 18:22
  Speaker 2: the first members of Congress or the executive branch that
• 18:25
  Speaker 2: are guaranteed to have to deal with the social security problem. Yeah,
• 18:29
  Speaker 2: so good luck in those races.
• 18:32
  Speaker 3: It's on you. I guarantee it doesn't even come up
• 18:36
  Speaker 3: in debates. No, when's the.
• 18:37
  Speaker 2: Last time anyone talked about social security? This is the thing, Like, no.
• 18:41
  Speaker 4: One, Eve, You certainly didn't come up in price what's
• 18:43
  Speaker 4: gonna happen? Probably not gonna come up in the regular election.
• 18:46
  Speaker 2: We're gonna get to December of twenty thirty one, and
• 18:49
  Speaker 2: all the pieces are gonna start being published. Next year
• 18:52
  Speaker 2: is when social Security runs out of money. Okay, got it.
• 18:55
  Speaker 2: We're gonna do that whole thing through the through the spring,
• 18:59
  Speaker 2: and then like July fifth, right after fourth of July
• 19:03
  Speaker 2: and twenty thirty two, it's gonna be like, oh no,
• 19:06
  Speaker 2: we've got to actually do something before like the Senate's
• 19:08
  Speaker 2: August recess. And so the law that's gonna end up
• 19:12
  Speaker 2: getting passed is well, even if social Security runs out
• 19:16
  Speaker 2: of money, we can pay for it.
• 19:17
  Speaker 3: Of course, it is kick the can down there.
• 19:19
  Speaker 2: This is where we are going on this, Tucker, you
• 19:23
  Speaker 2: can put that on the sticky note.
• 19:25
  Speaker 3: Wall Let's take a quick break. When we come back.
• 19:27
  Speaker 3: We got Wall Street Watch.
• 19:38
  Speaker 1: Like us on Facebook and follow us on Twitter at
• 19:41
  Speaker 1: DFE show. Breaking business news is always first right here
• 19:45
  Speaker 1: on the Financial Exchange Radio Network. Time now full of
• 19:50
  Speaker 1: Wall Street Watch trecking the stocks, the data, and the
• 19:53
  Speaker 1: headlines driving markets so far today right here on the
• 19:56
  Speaker 1: Financial Exchange Radio Network.
• 19:58
  Speaker 5: Markets trading slight lower following weaker than expected retail sales
• 20:03
  Speaker 5: for the month of July, where sales pulled back zero
• 20:06
  Speaker 5: point six percent, the most since May of twenty twenty five,
• 20:09
  Speaker 5: as consumers pulled back on purchases at online stores in
• 20:13
  Speaker 5: auto dealers. Right now, the Dow is down about a
• 20:16
  Speaker 5: tenth of a percent or sixty eight points lower. SMP
• 20:19
  Speaker 5: five hundred also down a tenth of percent or eight
• 20:21
  Speaker 5: points lower, NASDAK down a quarter of a percent or
• 20:24
  Speaker 5: sixty nine points lower, RUSS two thousand up about a
• 20:28
  Speaker 5: third of a percent, a ten year Treasure reeled up
• 20:31
  Speaker 5: two basis points at four point six seven percent, and
• 20:36
  Speaker 5: Oil up about a third of a percent, rating at
• 20:38
  Speaker 5: eighty one dollars a barrel. Two years after its IPO
• 20:42
  Speaker 5: social media platform, Reddit is officially joining the SMP five hundred,
• 20:46
  Speaker 5: replacing avalon Bay communities on August eighteenth, Threddit jumping nearly
• 20:51
  Speaker 5: fourteen percent on that news. Meanwhile, Applied Materials posted higher
• 20:56
  Speaker 5: quarterly net income and increase revenue. However, sales within its
• 21:01
  Speaker 5: key semiconductor systems division only narrowly beat expectations, seemingly disappointing investors,
• 21:07
  Speaker 5: as shares are now down about five percent. Elsewhere, work
• 21:11
  Speaker 5: Day down five percent after it's eighteen percent rally yesterday
• 21:15
  Speaker 5: on the heels of report from Reuters that private equity
• 21:19
  Speaker 5: firm Silver Lake was in talks to buy the company,
• 21:22
  Speaker 5: and online furniture retailer Wayfair was upgraded by Bernstein, citing
• 21:26
  Speaker 5: its high single digit revenue growth and a stagnant furniture market.
• 21:30
  Speaker 5: Wayfair stock is up about three percent. I'm Tucker Silva,
• 21:35
  Speaker 5: and that is Wall Street Watch, Mike.
• 21:38
  Speaker 3: Do we want to talk Middle East or big Tech?
• 21:43
  Speaker 3: We can do Middle East really quickly.
• 21:45
  Speaker 4: The US is about to impose quote unprecedented economic isolation
• 21:48
  Speaker 4: on Iran. A lot of what we've said we are
• 21:51
  Speaker 4: going to do to RN is supposedly unprecedented and hasn't
• 21:55
  Speaker 4: worked yet, So I'll wait till I see some of
• 21:57
  Speaker 4: the details.
• 21:58
  Speaker 3: Yeah, we'll see what comes out. I mean, Iran has been.
• 22:02
  Speaker 2: Probably one of the two most heavily sanctioned and isolated
• 22:05
  Speaker 2: countries in the world over the last twenty years. So
• 22:08
  Speaker 2: it's unclear exactly what we can see that's, you know,
• 22:11
  Speaker 2: a further move towards more economic isolation, absent you know,
• 22:17
  Speaker 2: secondary sanctions on countries that buy Iranian oil and products,
• 22:21
  Speaker 2: which I just don't know if we're going to go there.
• 22:25
  Speaker 2: So we'll see what ends up coming out of this
• 22:26
  Speaker 2: and see what develops here. But again, it's not to
• 22:31
  Speaker 2: say that the Iranian economy is good. It's most likely
• 22:34
  Speaker 2: very very bad right now. The case that I think
• 22:37
  Speaker 2: I would make is it hasn't exactly been very good
• 22:40
  Speaker 2: for a while, started at a pretty bad point, you know,
• 22:43
  Speaker 2: like they're kind of used to running the country not
• 22:46
  Speaker 2: with a good economy. And we'll see, you know, exactly
• 22:51
  Speaker 2: what does on the table next week.
• 22:52
  Speaker 4: I'll make the point that if you do not go
• 22:55
  Speaker 4: and sanction foreign countries that buy Iranian oil, then the
• 23:00
  Speaker 4: quote unprecedented economic isolation plan that you have is not
• 23:05
  Speaker 4: an unprecedented economic isolation plants. It's fundamentally unserious unless you
• 23:08
  Speaker 4: go after those.
• 23:09
  Speaker 2: Yeah, because the oil is the only thing that matters
• 23:11
  Speaker 2: to the Iranian economy erect.
• 23:13
  Speaker 3: Yeah, what are you gonna do?
• 23:15
  Speaker 2: How big tech earnings are inflated by other tech companies.
• 23:18
  Speaker 2: So if you are a company called Amazon, you might
• 23:23
  Speaker 2: have bought a stake in another company called Anthropic, And
• 23:27
  Speaker 2: what that means is that based on being able to
• 23:30
  Speaker 2: mark that investment to market when you have you know,
• 23:33
  Speaker 2: different fundraising rounds and things like that it can show
• 23:36
  Speaker 2: up in your earnings as part of your profit, even
• 23:40
  Speaker 2: though it's not really money that you earned from your
• 23:43
  Speaker 2: core business. It's rather just an investment that you have
• 23:47
  Speaker 2: that has gone up in value while you continue to
• 23:49
  Speaker 2: hold it.
• 23:51
  Speaker 3: Yeah, so a lot's.
• 23:53
  Speaker 4: Been written about, you know, this most recent quarterly earnings
• 23:55
  Speaker 4: and some of if not the single best earnings that
• 23:59
  Speaker 4: we've ever seen in the s and P. Five hundred.
• 24:04
  Speaker 4: I don't think you necessarily need an asterisk next to that,
• 24:08
  Speaker 4: but I do acknowledge here that, Yeah, some big chunk
• 24:11
  Speaker 4: of this is the markup of privately held investments that
• 24:16
  Speaker 4: may or may not end up being worth what they
• 24:18
  Speaker 4: are being valued at today. And another huge chunk is
• 24:22
  Speaker 4: a whole bunch of new assets that these companies are
• 24:25
  Speaker 4: building or acquiring that will need to eventually be written
• 24:30
  Speaker 4: down with depreciation that we're all somewhat unclear on just
• 24:35
  Speaker 4: how much depreciation there will be under what time period.
• 24:38
  Speaker 3: Yeah.
• 24:39
  Speaker 4: Is that an appropriate summary, I guess, of the state
• 24:42
  Speaker 4: of tech earnings in the US right now.
• 24:43
  Speaker 3: I think.
• 24:43
  Speaker 2: So it's not to say that these aren't like this
• 24:47
  Speaker 2: Wall Street journal piece makes it seem like these aren't
• 24:49
  Speaker 2: real earnings and they are. It's just they're a different
• 24:53
  Speaker 2: type of earnings than you typically see from a tech company,
• 24:55
  Speaker 2: and they're not necessarily repeatable because they're not actually related
• 24:59
  Speaker 2: to the company's own performance in its core areas. But
• 25:04
  Speaker 2: it doesn't mean that it's not there. I think the
• 25:06
  Speaker 2: points that are raised here is, Look, there is no
• 25:10
  Speaker 2: set standard for valuation on these privately held investments, and
• 25:15
  Speaker 2: so it is something that is subject to, you know, change,
• 25:19
  Speaker 2: especially like if these companies end up like if anthropic
• 25:22
  Speaker 2: goals public or things like that. You know that that
• 25:24
  Speaker 2: can impact things. So yeah, it's something worth watching. But
• 25:31
  Speaker 2: it's also like, it is real, even if it's just
• 25:36
  Speaker 2: in a different format, and it doesn't mean that something
• 25:40
  Speaker 2: bad is inherently coming in the future because of that.
• 25:44
  Speaker 2: It means it might if the value of those things
• 25:46
  Speaker 2: go down, but if the value continues to go up, then.
• 25:52
  Speaker 3: That's fine too.
• 25:54
  Speaker 5: One day you're living in your own home, the next
• 25:57
  Speaker 5: you can't return home after rehab. Now you're faced with
• 26:02
  Speaker 5: a nursing home bill of more than fourteen thousand dollars
• 26:05
  Speaker 5: a month and wondering how you're going to pay for it.
• 26:09
  Speaker 5: These situations can occur without warning, but Cushing and Dolan
• 26:12
  Speaker 5: can help before you make any major financial decisions. Get
• 26:16
  Speaker 5: the facts. Cushing and Dolan's new guide, Last Minute Medicaid
• 26:20
  Speaker 5: Eligibility explains common misconceptions about Medicaid, what assets may or
• 26:26
  Speaker 5: may not be a risk, and why the first answer
• 26:29
  Speaker 5: you receive isn't always your only option. Call right now
• 26:32
  Speaker 5: at eight six six eight four eight five six nine nine.
• 26:37
  Speaker 5: That's eight six six eight four eight five six nine
• 26:40
  Speaker 5: nine to get your free copy, or you can request
• 26:43
  Speaker 5: the guide online at legal exchange show dot com.
• 26:49
  Speaker 1: The proceeding was paid for and the views expressed are
• 26:51
  Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
• 26:53
  Speaker 1: or Armstrong Advisory may contact you offering legal or investment services.
• 26:56
  Speaker 1: Cushing and Armstrong do not endorse each other and are
• 26:59
  Speaker 1: not affiliated.
• 27:00
  Speaker 4: Okay, I want to go back to this the one
• 27:02
  Speaker 4: time gains and the story of big tech companies and
• 27:05
  Speaker 4: their earnings for a moment here, because I found that
• 27:08
  Speaker 4: last statement that I made to be rather dissatisfying.
• 27:11
  Speaker 3: Like might be a problem, might not.
• 27:14
  Speaker 4: What you can say about giant tech companies today is
• 27:19
  Speaker 4: that they have inexorably tied themselves together, right, And I
• 27:24
  Speaker 4: don't know if that's in an unprecedented fashion. But you
• 27:27
  Speaker 4: think about all the stories we've covered recently about how
• 27:31
  Speaker 4: in Vidia is going to invest an x y Z
• 27:34
  Speaker 4: company in exchange for them buying their chips and Alphabet
• 27:37
  Speaker 4: owns all of these privately held companies, in Vidia wants
• 27:41
  Speaker 4: to create asset backed securities on I guess, semiconductors that are.
• 27:45
  Speaker 3: Running AI models.
• 27:47
  Speaker 4: The This happens plenty of times during you know, wild
• 27:55
  Speaker 4: market periods of time. But these companies, much like other
• 28:00
  Speaker 4: I guess I go back to the banks because that's
• 28:01
  Speaker 4: the major crisis that I've lived through. But these companies
• 28:05
  Speaker 4: have all tied themselves together in these sometimes tough to
• 28:08
  Speaker 4: understand ways for the average investor, and they are right
• 28:13
  Speaker 4: now benefiting from each other's successes. And should there be
• 28:19
  Speaker 4: some dramatic failures in the future, which let's be honest,
• 28:23
  Speaker 4: if there aren't, this would be the first period of
• 28:26
  Speaker 4: you know, technological boom that doesn't result in a bunch
• 28:29
  Speaker 4: of failures. Yeah, then they're going to bear the weight
• 28:34
  Speaker 4: of that too. It comes with both the good and
• 28:37
  Speaker 4: the bad when you tie your financial successes to other
• 28:40
  Speaker 4: companies and their growth plans.
• 28:43
  Speaker 2: Yeah, I again, look, maybe it's just like it's Friday,
• 28:47
  Speaker 2: and like I just want the weekend to start. But
• 28:50
  Speaker 2: I just can't get that excited about like, oh, this
• 28:52
  Speaker 2: bad thing might happen in the future.
• 28:55
  Speaker 3: Like yeah, I'm with you. I just I'm just I'm
• 28:57
  Speaker 3: tired of doing that.
• 28:59
  Speaker 4: Yeah, I don't want to, you know, create these doom scenarios.
• 29:05
  Speaker 3: That might happen.
• 29:06
  Speaker 4: I think everybody's mostly eyes wide open to it, Like no.
• 29:11
  Speaker 2: One's gonna be surprised at this point if something at
• 29:14
  Speaker 2: some point goes badly with the AI rollout, Like, oh, who.
• 29:18
  Speaker 3: Could have seen that coming? Like we we've talked about
• 29:20
  Speaker 3: it at nauseum. At this point, it's it's I.
• 29:25
  Speaker 2: Can't do an hour of AI, Like it's just like
• 29:28
  Speaker 2: there's nothing new that's happening. Oh, we built more data centers.
• 29:31
  Speaker 3: Great are they? Are they being used? Yes?
• 29:35
  Speaker 2: Okay, Like I don't know when it becomes a problem.
• 29:39
  Speaker 2: It will become a problem. But I'm just not sure
• 29:41
  Speaker 2: if there's any more like meat there right now other
• 29:45
  Speaker 2: than just people being upset about data centers. I do
• 29:47
  Speaker 2: think there's something interesting. I was reading a piece from
• 29:50
  Speaker 2: uh Dave Nata yesterday. He uh, he's a big like
• 29:54
  Speaker 2: ETF structure guy like he knows more about how ETFs
• 29:57
  Speaker 2: are actually built, like the underpinnings and the plumbing them,
• 30:00
  Speaker 2: than anyone I've met. And he went to uh this
• 30:04
  Speaker 2: UH investor retreat over the UH I think it was
• 30:07
  Speaker 2: last weekend or maybe last week and it set like
• 30:11
  Speaker 2: this camp in upstate New York or something, so it's
• 30:14
  Speaker 2: you know, all like disconnected blah blah blah, and I
• 30:18
  Speaker 2: forget who it was, but some you know, big hedge
• 30:20
  Speaker 2: fund manager got up and started a speech. He goes,
• 30:23
  Speaker 2: I want you all to know that, like I wrote
• 30:24
  Speaker 2: this myself, it's not AI. And everybody cheered, and he
• 30:28
  Speaker 2: made the point. He's like, isn't it really interesting that,
• 30:30
  Speaker 2: you know, in our businesses everyone's like focused on like
• 30:33
  Speaker 2: AI related growth, and you know, everyone's talking about data
• 30:37
  Speaker 2: centers this, and everyone you know, oh chat GPT's that
• 30:40
  Speaker 2: and claudes this. But then whenever you hear someone say, hey,
• 30:44
  Speaker 2: this is like my work and not AI, everyone gets
• 30:47
  Speaker 2: really happy because everyone freaking hates AI. Like you hear someone,
• 30:55
  Speaker 2: you hear someone say like I wrote this myself, and
• 30:57
  Speaker 2: immediately go, oh, now I'm interested because like we're just
• 31:02
  Speaker 2: we we we don't like it. And I don't know
• 31:05
  Speaker 2: why we don't like it, but we don't. And and
• 31:10
  Speaker 2: that's really interesting that you have such a popular technology,
• 31:13
  Speaker 2: just like social media that everyone hates, Like what's the
• 31:20
  Speaker 2: last like mass adoption technology that people actually liked where
• 31:29
  Speaker 2: they're like not just like using it because they have to,
• 31:33
  Speaker 2: but like, hey, I love this, Like this is great.
• 31:36
  Speaker 2: It's probably indoor plumbing. I like that, right, love that.
• 31:44
  Speaker 3: I'll give this a little bit of thought. And you know,
• 31:47
  Speaker 3: the dishwasher probably right up there as well. And linked
• 31:52
  Speaker 3: personal computer, yep, I'll put that up there. No, we
• 31:55
  Speaker 3: ended up hating that, do we? Why do we? Why
• 31:57
  Speaker 3: do we hate computers? I mean, how can you say
• 32:01
  Speaker 3: you hate that much? Like who hates their computer?
• 32:04
  Speaker 4: I guess, I guess, I guess I hate the email
• 32:07
  Speaker 4: that comes on the computer.
• 32:08
  Speaker 2: That's not the computer email. Yeah, that's that's the Internet.
• 32:11
  Speaker 2: That's a separate invention.
• 32:12
  Speaker 5: That's my mind sweeper.
• 32:14
  Speaker 3: Yeah, exactly, Thank you, Tucker. I appreciate you. MS doss solitaire.
• 32:20
  Speaker 3: You know what you're doing back there? Yeah?
• 32:28
  Speaker 5: He always seems so distracted back there, and then I
• 32:31
  Speaker 5: I got snowed over here.
• 32:32
  Speaker 3: You know, that's what we're doing back here.
• 32:35
  Speaker 2: That's why occasionally we got to go to break when
• 32:36
  Speaker 2: Tucker's down to the last mine.
• 32:38
  Speaker 3: Constant games of hearts going on.
• 32:43
  Speaker 2: Yeah yeah, Solitaire, the one where when you win the cards.
• 32:46
  Speaker 3: Yeah, they like celebrated goal.
• 32:48
  Speaker 2: Yeah.
• 32:48
  Speaker 1: Yeah.
• 32:49
  Speaker 3: It was always a great moment. That was good. Uh,
• 32:53
  Speaker 3: let's take a quick break.
• 32:54
  Speaker 2: When we come back, let's talk drones and how much
• 32:57
  Speaker 2: fun Boston was this.
• 32:58
  Speaker 1: Summer Business news as it happens only here on the
• 33:03
  Speaker 1: Financial Exchange Radio Network. Miss the show. You can find
• 33:08
  Speaker 1: them on our YouTube page. The show streams live every day,
• 33:11
  Speaker 1: but every hour is archived, including all of our most
• 33:14
  Speaker 1: newsworthy interviews. Go to YouTube and search for the Financial
• 33:17
  Speaker 1: Exchange Radio Show.
• 33:26
  Speaker 3: PC.
• 33:26
  Speaker 2: Here in the Wall Street Journal, President Trump announces drone
• 33:29
  Speaker 2: tarffs to bolster US supply chains and counter China. I'll
• 33:33
  Speaker 2: quote here in a statement of the White House said
• 33:34
  Speaker 2: the drone tariff program would protect the security of the
• 33:36
  Speaker 2: US and its defense and defense adjacent industrial base while
• 33:40
  Speaker 2: creating jobs. US drone production needs to be expanded rapidly
• 33:43
  Speaker 2: to ensure US national and economic security. I gotta tell
• 33:48
  Speaker 2: you I would go a step further than this, and
• 33:51
  Speaker 2: just look ban any Chinese drones from being imported, like
• 33:56
  Speaker 2: call to dead, Like, do you want Chinese drones to
• 33:58
  Speaker 2: be able to be imported into the United States? Michael,
• 34:01
  Speaker 2: I don't know. There's no good use case, there's no
• 34:05
  Speaker 2: good reason.
• 34:06
  Speaker 3: There's plenty of use cases.
• 34:07
  Speaker 2: There's no good reason to allow that given the risk
• 34:09
  Speaker 2: that exists.
• 34:14
  Speaker 3: Uh, I'm actually not sure I get there.
• 34:19
  Speaker 4: I mean, continue, the average drone, I don't think I
• 34:22
  Speaker 4: see as a danger. I see this as hey, let's
• 34:27
  Speaker 4: protect what is going to be clearly a military necessity
• 34:31
  Speaker 4: in the future in terms of bolstering the US drone capacity.
• 34:36
  Speaker 4: But the average drone that my neighbor uses to like
• 34:39
  Speaker 4: take pictures of the Charles River, Like, is that a
• 34:42
  Speaker 4: danger to us here in the United States?
• 34:44
  Speaker 3: Yes?
• 34:45
  Speaker 2: How what's going to be done with it? What do
• 34:47
  Speaker 2: you mean what's going to be done with it?
• 34:49
  Speaker 3: Yeah? What's the danger? Spell it out for me.
• 34:51
  Speaker 2: That any of the pictures and use data from that
• 34:54
  Speaker 2: could be going back to China.
• 34:58
  Speaker 3: How's that different from a camera that I can buy online,
• 35:01
  Speaker 3: a pan you know, like it doesn't fly. The camera
• 35:03
  Speaker 3: doesn't fly yet yet.
• 35:07
  Speaker 2: I don't I don't think you should allow Chinese made
• 35:09
  Speaker 2: drones in the United States.
• 35:11
  Speaker 3: Don't most of these drones operating systems just connect to
• 35:13
  Speaker 3: your phone. I have no idea. I don't own a drone.
• 35:16
  Speaker 4: Yeah I don't either, but I'm fairly certain that's all
• 35:18
  Speaker 4: they do, is they just literally connect to your phone
• 35:20
  Speaker 4: and send.
• 35:21
  Speaker 3: All all that doesn't make me feel good to your
• 35:23
  Speaker 3: onto your phone.
• 35:24
  Speaker 2: So now I've got a Chinese drone connecting into my
• 35:27
  Speaker 2: phone that's supposed to make me feel better.
• 35:29
  Speaker 1: Yeah.
• 35:29
  Speaker 3: Look, I'm.
• 35:32
  Speaker 4: Just kind of on this slippery slope argument that we've
• 35:35
  Speaker 4: had several times with any Chinese made technology, which is like, okay,
• 35:41
  Speaker 4: we've it's this, it's it's basically any technological product that
• 35:44
  Speaker 4: connect the that can connect to the Internet, then is
• 35:46
  Speaker 4: our problem.
• 35:47
  Speaker 3: Yes, okay, Like honestly, it's that's not a drone problem.
• 35:51
  Speaker 4: Like to be clear, this is I was just thinking, like, Okay,
• 35:54
  Speaker 4: they take them over and crash a sixteen ounce drone
• 35:58
  Speaker 4: into a building, You're not terribly concerning to me. But
• 36:02
  Speaker 4: if it's just, hey, any connected device that was manufactured
• 36:04
  Speaker 4: by China as a problem, then we've.
• 36:06
  Speaker 3: Got a lot of work.
• 36:07
  Speaker 2: And look, I understand that I'm using devices as I
• 36:11
  Speaker 2: sit here with my iPhone in my hand that are
• 36:13
  Speaker 2: made in China. Like, I get the hypocrisy there, but
• 36:18
  Speaker 2: it's like for something like a cell phone, you're kind
• 36:21
  Speaker 2: of limited in terms of what you can actually use
• 36:24
  Speaker 2: that actually does the stuff you need to do. For drones,
• 36:28
  Speaker 2: like does anyone need a drone? Like, who's the person
• 36:33
  Speaker 2: that needs a drone? The laptop that you're working on
• 36:37
  Speaker 2: right now, Chuck, what's the brand China? I know, I
• 36:41
  Speaker 2: get this. I'm not happy about it, but it's not
• 36:45
  Speaker 2: really my choice. My point is like, just because we've
• 36:49
  Speaker 2: made these compromises in some places, should we just continue
• 36:52
  Speaker 2: making them?
• 36:53
  Speaker 3: Yeah? No, I don't.
• 36:56
  Speaker 4: I don't really think so, but especially just trying to
• 36:59
  Speaker 4: lock in on the drone argument, if there was something
• 37:01
  Speaker 4: unique to that, and it appears.
• 37:03
  Speaker 2: Not drones I do think are Like I think it's
• 37:05
  Speaker 2: a bigger risk, Like from a national security perspective, have.
• 37:11
  Speaker 3: You seen how warfare is conducted these days?
• 37:13
  Speaker 4: Yes, yeah, obviously I have, And obviously I want a
• 37:17
  Speaker 4: robust drone industry in the United States. It's capable of
• 37:20
  Speaker 4: manufacturing these things.
• 37:23
  Speaker 3: So let's talk about something happier to finish the hour.
• 37:26
  Speaker 2: Oh god, no, again, it's been a pretty happy hour,
• 37:29
  Speaker 2: I think, Michael, my whole point is bad economic data
• 37:32
  Speaker 2: doesn't matter right now.
• 37:33
  Speaker 3: Yeah, so that's that's a pretty happy thought.
• 37:35
  Speaker 2: I think the FIFA World Cup giving a nice boost
• 37:40
  Speaker 2: to the city of Boston. Obviously, you know, the whole
• 37:43
  Speaker 2: country got a nice boost. But just in the second
• 37:47
  Speaker 2: half of June. This is from the Boston Globe. Boston
• 37:49
  Speaker 2: residents and visitors attending the World Cup related events spent
• 37:52
  Speaker 2: an estimated eighty three million dollars in the city and
• 37:55
  Speaker 2: generated extra one point five million dollars in local tax revenue,
• 37:58
  Speaker 2: according to preliminary data.
• 38:01
  Speaker 3: And so I think this is great.
• 38:03
  Speaker 2: And if you didn't have fun at the World Cup
• 38:06
  Speaker 2: or it's surrounding it, I'm sorry, because it was. It
• 38:10
  Speaker 2: was just great, and I maintained that this might be
• 38:14
  Speaker 2: it might be one of the best summers we've had
• 38:16
  Speaker 2: in recent memory. Let's take a quick break here, and
• 38:19
  Speaker 2: when we come back, we had hour two coming
• 38:21
  Speaker 3: Up in a bit.