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Is OpenAI trying to kill the iPhone? · The Financial Exchange Show

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Speaker 1: Chuck Zada and Mike Armstrong.
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Speaker 2: Our two here on the Financial Exchange. It is Chuck, Mike,
1:15
Speaker 2: and Tucker with you, and we've got stocks not really
1:20
Speaker 2: doing much of anything today, at least in the aggregate.
1:23
Speaker 2: We actually have a bunch of stocks down in the
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Speaker 2: S and P five, I've got two hundred and forty
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Speaker 2: three more losers than winners right now. But remind me
1:30
Speaker 2: if you've heard this story before. Nvidia is positive, Microsoft's positive,
1:34
Speaker 2: Amazon's positive, Tesla's positive, Google's positive, metas positive. And so
1:39
Speaker 2: as a result, the S and P is flat on
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Speaker 2: the day, quite literally, like it's not moving at all.
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Speaker 2: The Dow is off forty points to the NASDAC as
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Speaker 2: a result of being heavy in those tech names, is
1:49
Speaker 2: up eighty four. It's again kind of a mixed market,
1:52
Speaker 2: but no clear direction that we are seeing. Ten year
1:55
Speaker 2: after selling off a little bit earlier in the day
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Speaker 2: of the tenure treasury yield, it's actually seven tenths of
2:00
Speaker 2: a basis point to four point five eight nine. After
2:03
Speaker 2: running up a little bit yesterday, longer term thirty year
2:06
Speaker 2: bond selling off a little bit more, up another two
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Speaker 2: basis points to five point one one two percent. At
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Speaker 2: the moment, we've got Oil West Texas Intermediate hitting sixty
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Speaker 2: dollars ninety four cents day, it's down sixty three cents
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Speaker 2: on the day, and gold is down eleven dollars and
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Speaker 2: eighty cents to thirty three oh one and seventy cents.
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Speaker 2: Anything else catching your eye today.
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Speaker 3: Mike, No, those yield moves are pressuring mortgage rates. They're pressuring, uh,
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Speaker 3: you know, a lot of stuff to do with the
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Speaker 3: housing market, and I think, well, frankly, the coming weeks
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Speaker 3: while the Senate works through this tax bill are going
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Speaker 3: to be critical to keep an eye on that bond
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Speaker 3: market and see just whether or not there's any real
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Speaker 3: sustained pressure on lawmakers when it comes to the tax bill.
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Speaker 2: To take a look at this piece from Bloomberg, and
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Speaker 2: it's it's talking about yesterday we saw the announcement that
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Speaker 2: open ai was going to be acquiring what the heck's
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Speaker 2: the name of the company. I don't know. It's Jony
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Speaker 2: Ives Creative Company IO. I think it is is how
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Speaker 2: lowercase io. It's a six point five billion dollar deal
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Speaker 2: for open ai to acquire ives company Jony Ive.
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Speaker 3: If you're unfamiliar, worked at Apple for years helped Define,
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Speaker 3: helped design the iPhone, help design the ipatter, MacBook it work.
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Speaker 2: He design. He was Steve jobs right hand band when
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Speaker 2: it came to design. Tim Cook ran the business. I've
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Speaker 2: basically made everything look the way you're familiar with it.
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Speaker 2: So if you know anything about like how Apple stuff looks,
3:49
Speaker 2: that's I've at work. Basically he left. There was maybe
3:52
Speaker 2: six seven years ago now twenty sixteen, twenty seventeen, somewhere
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Speaker 2: in that ballpark. And here is the deal. This is
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Speaker 2: basically a deal to bring IV on board to open AI,
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Speaker 2: the actual company that he has. I don't know that
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Speaker 2: that there's too much meat there. Maybe there is, maybe
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Speaker 2: there isn't, but it seems now I'll quote here from
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Speaker 2: the Wall Street Journal in a Wall Street Journal exclusive,
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Speaker 2: Altman and I have offered few hints at the secret
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Speaker 2: project they've been working on. The product will be capable
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Speaker 2: of being fully aware of a user's surroundings in life,
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Speaker 2: and will be unobtrusive, able to rest in one's pocket
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Speaker 2: or on one's desk, and will be a third core
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Speaker 2: device a person would put on a desk after a
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Speaker 2: MacBook Pro and an iPhone.
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Speaker 3: So what do we know about what they're designing. They
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Speaker 3: don't want it to be a phone. They don't want
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Speaker 3: it to be a wearable. They don't want to have
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Speaker 3: a screen, So it's a speaker.
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Speaker 2: It sounds like a speaker, yeahbe a pocket speaker, a
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Speaker 2: pocket speaker, Okay, a poker or a peaker if you will, right,
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Speaker 2: or a spocket. So one.
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Speaker 3: The title from Bloomberg about the long shot bet to
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Speaker 3: kill the iPhone doesn't really seem likely, given that they
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Speaker 3: don't want to design a phone together.
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Speaker 2: No, they don't want to kill it, but they I
5:19
Speaker 2: don't think Steve Jobs wanted to kill the CD player either.
5:24
Speaker 2: I think it was just a consequence of the iPod
5:27
Speaker 2: and how it was designed. R Once music migrated to
5:31
Speaker 2: digital formats, it wasn't going back, And now we have
5:35
Speaker 2: new cars that don't have CD players in them.
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Speaker 3: It also informs us a bit about AIS or about
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Speaker 3: sorry open AI and chat GPT's kind of longer term aspirations,
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Speaker 3: which is, we don't just.
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Speaker 2: Want to be a software player. I think I disagree,
5:50
Speaker 2: do you? They want to be a software player, but
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Speaker 2: they're facing the same thing that Meta is facing, which
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Speaker 2: is they don't want to be beholden to a series
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Speaker 2: of the devices that forces them to operate the way
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Speaker 2: those devices want. The reason that meta is all about
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Speaker 2: the metaverse, or that what they were all about the
6:07
Speaker 2: metaverse isn't because Mark Zuckerberg has this infatuation with, you know,
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Speaker 2: getting away from reality. I'm not convincing that his reality
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Speaker 2: is pretty good. Yeah, Like, I'm sure he's pretty okay
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Speaker 2: with how things are. It's because they don't want to
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Speaker 2: be stuck on Apple devices playing by Apple's rules when
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Speaker 2: it comes to data collection and advertising in this and
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Speaker 2: that they want to own the device. And I think
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Speaker 2: this is the same thing. Yeah, open ai wants to
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Speaker 2: own the device that is collecting all of the data,
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Speaker 2: because then you have all of the data.
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Speaker 3: Because right now, if you're using chat GPT, you were
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Speaker 3: using it either on a PC, on an iPhone, or
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Speaker 3: on another device that you know governs how the data stored,
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Speaker 3: what they do with the user information, and what information
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Speaker 3: is shared back to open AIH.
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Speaker 2: Couple different ways to approach this. The first is to
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Speaker 2: be really skeptical and be like, hey, this is a
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Speaker 2: dumb idea and quite honestly, probably like a ninety chance
7:09
Speaker 2: that's the case.
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Speaker 3: Yep, As with any brand new big idea hardware problem.
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Speaker 2: Most of them fail. It's not to like bash these guys,
7:19
Speaker 2: it's just most of the time new tech hardware doesn't
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Speaker 2: take off. I mean, think about all the stuff we've
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Speaker 2: been pitched in the last twenty years, from the glasses,
7:30
Speaker 2: the Google Glass. Do you guys remember the mini disc player?
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Speaker 4: Sure that's skipped all the time, Google.
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Speaker 2: Glass, three D TV's freaking segues. I mean, like, the
7:44
Speaker 2: list is long in terms of tech hardware that just
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Speaker 2: never actually delivered. Do you remember, like the AI pins
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Speaker 2: that everyone was going to be wearing last year that
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Speaker 2: got those horrible reviews. There's there's lots of this stuff.
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Speaker 2: So the base and this is again not to poo
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Speaker 2: poo them, but just like, hey, probably this is gonna
8:03
Speaker 2: be a nothing burger. But you think about it and
8:06
Speaker 2: you say, okay, like, how could this be something that
8:12
Speaker 2: is interesting beyond just being a speaker.
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Speaker 4: Well, it's just hard to narrow down what it would
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Speaker 4: because they don't want it to be a screen, they
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Speaker 4: don't want it to be a wearable, so what the
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Speaker 4: hell is it?
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Speaker 3: It seems to be a Yeah, a personal assistant type
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Speaker 3: device would be my only guess. And so you don't
8:33
Speaker 3: need to create a phone to replace and replicate a
8:36
Speaker 3: whole bunch of the things that a phone can do.
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Speaker 3: And so yeah, I am kind of coming back to
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Speaker 3: a I guess, more usable and more compact version of
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Speaker 3: a home assistant device like an Alexa or like a
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Speaker 3: Google Home.
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Speaker 2: It's always listening to you. It knows your moods based
8:57
Speaker 2: on the way it talks to you. Maybe it has
8:59
Speaker 2: like you know, a thermometer and whatever measures how much
9:03
Speaker 2: waters in the air, so it can tell you the
9:05
Speaker 2: weather and stuff. And it's got GPS and knows where
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Speaker 2: you're going, so it can tell you where the traffic
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Speaker 2: is and hey, maybe you should wait a little longer.
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Speaker 4: But that's all AI. Like, I don't see the connection.
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Speaker 2: It's just collecting all the data to give you a
9:19
Speaker 2: better experience. Yeah, no, it is a AI tucker.
9:23
Speaker 3: But a lot of things that we use today that
9:26
Speaker 3: we weren't calling AI five years ago, were AI?
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Speaker 1: Right?
9:29
Speaker 3: When when Apple or Google predicts what you're going to
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Speaker 3: ask it and shows you the weather on your app
9:36
Speaker 3: before you know that, before you even asked for it,
9:39
Speaker 3: that's AI. When AI, it's not jenneral of AI, but
9:43
Speaker 3: it's it's AI. When I, you know, tell my phone
9:48
Speaker 3: that I wanted to call.
9:51
Speaker 2: This channel and it knows to call my wife. That's
9:54
Speaker 2: that's a I.
9:54
Speaker 3: And so there's a lot of things that I think
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Speaker 3: it could hypothetically do.
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Speaker 2: I mean, I don't know. It's it's tough to spitball
10:03
Speaker 2: on all this.
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Speaker 3: But could I imagine a device like this being really
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Speaker 3: really useful for seniors?
10:09
Speaker 2: Yeah?
10:09
Speaker 3: Absolutely, But there's plenty of those types of dream things
10:13
Speaker 3: that Apple's been trying to put together. And so yeah,
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Speaker 3: I think my base case is still that something like
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Speaker 3: this probably fails, but is there a potential market for it?
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Speaker 2: Sure? I also think if it is to survive, and
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Speaker 2: if it is to thrive, it does have to kill
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Speaker 2: the phone. People don't want to be carrying around two devices. No,
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Speaker 2: they don't. Like that's that's a step backwards, right, People
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Speaker 2: want one. The reason why smartphones are ubiquitous now and
10:45
Speaker 2: everyone has one except for like the dream is you know,
10:49
Speaker 2: to finally retire and get rid of your smartphones because
10:51
Speaker 2: you don't need it anymore. But the reason why even
10:53
Speaker 2: like retire is because it's everything in your pocket. Yep,
10:56
Speaker 2: it's everything that you want to do. So now it's well,
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Speaker 2: I got my phone. Oh, I got I gotta remember
11:02
Speaker 2: my open AI you know assistant, open thing that goes
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Speaker 2: in my pocket. I don't know.
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Speaker 3: I mean, I just it's a step back. It's one
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Speaker 3: more thing. Yeah, yeah, that's not what anybody wants. It's
11:18
Speaker 3: a step back. Talk to anybody that has a work
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Speaker 3: personal work smartphone and a personal smartphone.
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Speaker 2: Nobody's happy about it. If you want an AI assistant,
11:28
Speaker 2: it can't be something that I carry. It's got to
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Speaker 2: be like I swallow it and it just lives in
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Speaker 2: my stomach, collecting gastro intestinal data for the rest of
11:36
Speaker 2: my life, and then it burps it out. So it's
11:39
Speaker 2: not a wearable. It's a swallowable.
11:40
Speaker 3: It's a swallowable. Chuck just wants uh Sam Altman to
11:50
Speaker 3: buy his ideas for six and a half a billion dollars,
11:54
Speaker 3: And to.
11:54
Speaker 2: Be fair, I'm sorry. I'm just thinking of my stomach
11:57
Speaker 2: playing music, and I just I really want to get there.
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Speaker 2: So let's take a quick break and when we come back,
12:07
Speaker 2: we'll talk whether or not Apple is developing a swallowable.
12:10
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Speaker 3: Blues Brothers one of my top time all time favorite movies.
13:29
Speaker 3: I have an uncle out in Chicago who has two cats.
13:32
Speaker 3: Names are Jake and Lwood. Okay, solid cat names. I
13:36
Speaker 3: think it's great. Yeah, it's great, solid cat names. Thanks,
13:41
Speaker 3: you know, Tucker, I don't need this today.
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Speaker 2: Do they make swallowables? No? But neither is Apple.
13:50
Speaker 4: What's open?
13:51
Speaker 2: AI cat sits on your desk, so it just crawls
13:56
Speaker 2: across your keyboard whenever you're trying to do something.
13:59
Speaker 4: That's just a cat.
13:59
Speaker 2: Jony Apple desperately needs the AI help it's seeking. This
14:07
Speaker 2: is the piece from the Wall Street Journal. So I'm
14:11
Speaker 2: going back and forth. Hey, it's actually from Bloomberg whatever,
14:15
Speaker 2: who cares, it's from someone. I keep going back and
14:20
Speaker 2: forth on whether AI is going to actually mean something.
14:28
Speaker 2: And I struggle with this because I see all of
14:31
Speaker 2: this hype around you know, Google's announcements from earlier this week,
14:37
Speaker 2: and it's about, oh, like you can have an AI agent,
14:40
Speaker 2: you know, come up with you know, a travel itinerary
14:42
Speaker 2: for you and this and that and hey here's you know,
14:44
Speaker 2: you can do a prompt and have you know, live action,
14:47
Speaker 2: you know, photorealistic videos that are generated. And I guess
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Speaker 2: I'm just kind of looking at it going you know
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Speaker 2: what The problem is where I'm struggling with with this
15:03
Speaker 2: on on on the AI piece is the translation into
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Speaker 2: the physical world. And by that I mean, Mike, is
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Speaker 2: there really a problem with me having to go out
15:15
Speaker 2: and plan a vacation? Like is that something that costs
15:20
Speaker 2: me money aside from what I spend on the vacation.
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Speaker 2: The answer is no, because you know what I do.
15:27
Speaker 2: You know what I do is I sit there while
15:30
Speaker 2: I'm watching TV one night and my phone's in my
15:34
Speaker 2: hand and I'm looking at travel stuff. At the same time,
15:37
Speaker 2: I'm getting twice the ads that I would be otherwise.
15:41
Speaker 2: Is the AI agent actually going to get the ads delivered?
15:46
Speaker 2: Probably not? And if its like again like this is
15:51
Speaker 2: just I'm thinking through this, like how much value ends
15:53
Speaker 2: up being destroyed because you don't advertise to an AI agent? Right,
15:58
Speaker 2: Like that's just one part. But the other pieces, like
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Speaker 2: me looking for travel options or a restaurant to go to?
16:06
Speaker 2: Are there like productivity gains that are made by having
16:10
Speaker 2: an AI agent do that? I'm not sure.
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Speaker 3: You know the I guess The question is does a
16:18
Speaker 3: travel agent get ten x more productive and have the
16:23
Speaker 3: ability to lay off their staff and reduce costs because
16:27
Speaker 3: they're utilizing artificial intelligence? Does a coding firm have the
16:30
Speaker 3: ability to do that? Claiming that Apple is in desperate
16:35
Speaker 3: need of AI help.
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Speaker 2: I don't know. I struggle to get there today.
16:39
Speaker 3: I don't see what business it is that Apple is
16:43
Speaker 3: losing right because.
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Speaker 2: Business right now now. If you want to know the
16:49
Speaker 2: thing that's interesting to me on AI and where I
16:52
Speaker 2: think there could be some interesting meat, it is, hey,
16:58
Speaker 2: can we get AI to function using you know, real
17:04
Speaker 2: world technology? And what I mean by this is that
17:06
Speaker 2: fusion of AI and robotics YEP is interesting to me
17:11
Speaker 2: in that can it get to a place five ten
17:13
Speaker 2: years from now where it can actually do some of
17:17
Speaker 2: the stuff that is problematic, like, Hey, I've got two kids.
17:22
Speaker 2: I do a load of laundry every single day. Can
17:27
Speaker 2: I have a laundry robot?
17:31
Speaker 3: Yeah, that's the that's the I think I quoted this
17:34
Speaker 3: the other day, Chuck, when you weren't on the program,
17:37
Speaker 3: but I'll just bring it up again.
17:40
Speaker 2: This was from Twitter.
17:41
Speaker 3: The future was supposed to free up our time from
17:44
Speaker 3: work so we could spend it on higher pursuits. Instead,
17:46
Speaker 3: we created AI that makes art while all the rest
17:48
Speaker 3: of us do work. Yes, and that's not appealing to
17:52
Speaker 3: a lot of people right now. The other great cartoon
17:55
Speaker 3: that I've seen on this is. It's someone like sitting
17:58
Speaker 3: up like at a computer screen. It's like, oh, I
18:00
Speaker 3: got to write a twelve page report by tomorrow.
18:04
Speaker 2: Hey, AI, take these ten bullet points and make them
18:08
Speaker 2: into a twelve page report to send to my superior.
18:10
Speaker 2: And then the superior receives and goes, oh my goodness,
18:13
Speaker 2: it's twelve pages. Hey AI. Distill this down into ten
18:17
Speaker 2: bullet points so that I can easily explain it to
18:20
Speaker 2: my boss. And it's like, are we actually solving problems?
18:24
Speaker 2: Are we just moving stuff around and changing the problems
18:28
Speaker 2: that we're solving, but not really getting more time from this?
18:31
Speaker 2: And that's what I'm struggling with. And also, I just
18:35
Speaker 2: don't know that there's anyone in their daily life who's
18:39
Speaker 2: sitting there going I need more AI right now, and
18:42
Speaker 2: also has the wherewithal to make it work for them,
18:44
Speaker 2: because here's here's gonna be the problem. The reason why
18:47
Speaker 2: Apple has sold six quadrillian iPhones is because you turn
18:53
Speaker 2: it on and generally you understand how it works. They've
18:57
Speaker 2: made it really intuitive. Before we pass the way, my
19:00
Speaker 2: one hundred and two year old grandfather had an iPhone
19:03
Speaker 2: and he could FaceTime us and stuff, making AI work
19:08
Speaker 2: for you in the real world is not as seamless.
19:12
Speaker 2: There's a lot that goes into it in terms of
19:14
Speaker 2: making it work right now, and that I think is
19:16
Speaker 2: going to be the struggle. Let's take a quick break.
19:19
Speaker 2: When we come back, we get the trivia answer after this.
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Speaker 4: Trivia question today was how many movies have been made
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Speaker 2: Mike, we got a piece here from market Watch and
20:27
Speaker 2: it's titled four cases when a Roth conversion won't pay
20:31
Speaker 2: off for you. Before we get into it, just a
20:33
Speaker 2: reminder for our listeners. A roth conversion is when you
20:36
Speaker 2: take money from a traditional ira for which you have
20:39
Speaker 2: not yet paid the taxes on move it into a
20:42
Speaker 2: roth ira and have to pay the taxes in order
20:44
Speaker 2: to do so. But now you have that money in
20:47
Speaker 2: a tax free investment vehicle that you can let the
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Speaker 2: proceeds grow tax free until you decide to remove them.
20:53
Speaker 3: And between traditional roth conversions, backdoor roth conversions, megabackdoor roth
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Speaker 3: conversions for or when k roth conversions. I think there's
21:03
Speaker 3: not to say that. You know, financial planning is a
21:06
Speaker 3: terribly exciting area in the first place, but I don't
21:09
Speaker 3: think there's anything is I don't think there's anything more
21:11
Speaker 3: in fashion right now than talking about and conducting stuff
21:15
Speaker 3: when it comes to your roth ira. And there's a
21:18
Speaker 3: number of reasons that obsession is there. I think there's
21:20
Speaker 3: a general concern that, oh, look at the deficit. Tax
21:23
Speaker 3: rates are going to need to go up. Who was
21:25
Speaker 3: the big hedge fund manager who you know, did a
21:29
Speaker 3: bunch of raw stuff and has like a five billion
21:31
Speaker 3: dollar wroth iray, Oh, Peter Tiel, Peter Teel, Yeah, Peter
21:35
Speaker 3: Teal has a giant roth. And so I think there's
21:37
Speaker 3: become this fascination with the idea of the wroth because
21:41
Speaker 3: you will never have to pay taxes on it again.
21:44
Speaker 3: And for that reason, as many people as we're missing
21:49
Speaker 3: out on the opportunity a decade ago to contribute to
21:51
Speaker 3: a ROTH. I now see that having reversed, where too
21:54
Speaker 3: many people are contributing money to ROTH when they frankly
21:57
Speaker 3: should not be and are just doing it either because
22:01
Speaker 3: they've read some of these stories or it's available in
22:04
Speaker 3: there for one K and they just don't really know
22:07
Speaker 3: any better, you know, as to why it makes sense
22:10
Speaker 3: to do a WROTH versus a traditional The roadblocks that
22:14
Speaker 3: mark is it Barons.
22:15
Speaker 2: Or market Watch that put this together.
22:17
Speaker 3: Market the roadblocks that they put together are you know,
22:21
Speaker 3: unique to individuals and are as good as any other.
22:25
Speaker 3: But the big story when it comes to WROTH is
22:29
Speaker 3: that you contribute to one because you fundamentally believe that
22:33
Speaker 3: you are in a lower tax bracket now then you
22:36
Speaker 3: will be sometime in the future. And if you keep
22:39
Speaker 3: that in the background of your mind, as hey, this
22:42
Speaker 3: is the core fundamental of why you do something like this.
22:45
Speaker 3: And that can be because you think your income is
22:47
Speaker 3: going to grow, because you're going to have required minimum distributions,
22:50
Speaker 3: or because you believe tax rates are going to triple
22:52
Speaker 3: and you're going to face a much higher rate of
22:54
Speaker 3: taxation down the road. But that's the fundamental core belief
22:58
Speaker 3: when it comes to hey, why would I be contributing
23:01
Speaker 3: to roth or converting to roth or doing anything when
23:04
Speaker 3: it comes to that type of account. As I just mentioned,
23:08
Speaker 3: the narratives kind of flipped like a decade ago. When
23:10
Speaker 3: I was sitting down with people, it was like, Wow,
23:12
Speaker 3: you really missed an opportunity. You should have been doing
23:15
Speaker 3: this ahead of time. Now it's much more the other
23:18
Speaker 3: You are paying way too much in taxes right now
23:20
Speaker 3: because you are so obsessed with ROTH. If you've been
23:23
Speaker 3: trying to navigate this and you're just not entirely sure
23:28
Speaker 3: why you're contributing to one type of account versus another.
23:31
Speaker 3: If you've been told what a great opportunity is to
23:34
Speaker 3: convert money into roth, and you want to learn more
23:36
Speaker 3: about how to do it, please give the folks at
23:38
Speaker 3: Armstrong Advisory Group a call. As you can tell from
23:41
Speaker 3: my tone, there's just a lot of mistakes that come
23:44
Speaker 3: from people misunderstanding how the tax code works and how
23:48
Speaker 3: it's likely to affect them in the future. If you
23:51
Speaker 3: have questions like that, please give us a ring at
23:53
Speaker 3: eight hundred three nine three four zero zero one. We
23:56
Speaker 3: work with our clients day and day out on ensuring
24:00
Speaker 3: that their tax plan works with their financial strategy, which
24:04
Speaker 3: works with their investment plan. And if you're not feeling
24:07
Speaker 3: like you've got a real clear view on all that,
24:09
Speaker 3: then number once again is eight hundred three nine three
24:12
Speaker 3: four zero zero one.
24:14
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
24:17
Speaker 1: registered investment advisor. Nothing in the ad or in any
24:19
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
24:22
Speaker 1: your own financial, tax, and estate planning advisors before making
24:25
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
24:28
Speaker 1: advisory services.
24:30
Speaker 2: Mike, do you want to talk about evs in China?
24:33
Speaker 2: Building on federal land or best and final job? Offers
24:36
Speaker 2: m Let's called federal land, Okay, what about it?
24:42
Speaker 3: So there's been, you know, mutterings of the idea that hey,
24:46
Speaker 3: we desperately need to build more housing across the country,
24:50
Speaker 3: and wow, look at all this federal land that we have.
24:54
Speaker 3: There's there's two hundred and forty five million acres of
24:56
Speaker 3: land alone owned by the Bureau and administered by the
25:00
Speaker 3: Bureau of Land Management. Yes, it's called Nevada. Yeah, it's Nevada,
25:04
Speaker 3: parts of Utah, parts of.
25:07
Speaker 2: Nevada. Yeah.
25:09
Speaker 3: And it points the fact like, hey, you know, just
25:11
Speaker 3: a fraction of that eight hundred and fifty square miles
25:13
Speaker 3: half million acres could support three million homes, which is
25:17
Speaker 3: technically true, but doesn't address the actual concerns about housing
25:23
Speaker 3: demand in this country. No, this is basically, hey, let's
25:28
Speaker 3: build them and they will come. Let's build a new
25:31
Speaker 3: city here and see what happens, which China tried that.
25:35
Speaker 2: A few dozen times. Like, here's the thing about how
25:38
Speaker 2: cities have historically developed. They are generally two reasons why
25:43
Speaker 2: they do. Number one, they're near water. Number two, they're
25:47
Speaker 2: near resources. Sometimes they're near both. Other than that, you
25:52
Speaker 2: generally don't really get cities developing like they People don't
25:58
Speaker 2: just go to the middle of nowhere by a bunch
25:59
Speaker 2: of land and start a new city because it is
26:04
Speaker 2: completely not feasible to do so.
26:08
Speaker 3: Now, is it true that there are some plots of land,
26:11
Speaker 3: probably near Reno, near Las Vegas, that are owned by
26:16
Speaker 3: the federal government that would fit well into a development
26:20
Speaker 3: plan for demand for housing in some of those areas.
26:23
Speaker 3: I'm sure there are, but The problem with supply and
26:26
Speaker 3: demand of housing is not one of Wow, we just
26:29
Speaker 3: cannot afford to build more houses in Las Vegas. It's
26:32
Speaker 3: much more, Dear God, there are no homes for sale
26:35
Speaker 3: in the state of Connecticut.
26:36
Speaker 2: What do we do?
26:37
Speaker 3: And freeing up federal land in Connecticut is not going
26:40
Speaker 3: to fix that. No, unless you're well there. I just
26:45
Speaker 3: don't know where the federal land is.
26:46
Speaker 2: I don't even know if there is any federal land
26:47
Speaker 2: in Connecticut. I don't think so. If it's like on
26:51
Speaker 2: a submarine base and that's all you got, right, I'm
26:54
Speaker 2: just not sure what's there. I mean, look, if you
26:57
Speaker 2: look at most of the land, the Bureau of Land
26:59
Speaker 2: Management is the biggest one that people will look at.
27:02
Speaker 2: It's basically deserts in Nevada. Yeah, and to.
27:08
Speaker 3: A lesser extent Utah. There's some other stuff scattered around,
27:10
Speaker 3: but like, those are the big ones. Here's what it
27:13
Speaker 3: comes back down to for me. Everyone is still looking
27:16
Speaker 3: for this magic silver bullet to fix the housing issue
27:19
Speaker 3: in this country and just ignoring the fact that if
27:22
Speaker 3: you want to fix the housing affordability crisis in this country,
27:26
Speaker 3: you have to allow for more homes to be built
27:29
Speaker 3: in places where people want to live. Right, It's really
27:33
Speaker 3: really easy. It's not about building subsidized housing. It's not
27:37
Speaker 3: about offering tax cuts for mortgages, it's not about any.
27:40
Speaker 2: Of these other things.
27:41
Speaker 3: It is you have to go very much to the
27:44
Speaker 3: local level and say that, at the local level, we
27:47
Speaker 3: are going to allow for more and denser homes to
27:50
Speaker 3: be built. And guess what, time after time, voters in
27:54
Speaker 3: those local levels say hell, no, we don't want it.
27:57
Speaker 2: The places where they've said we're okay with this, you've
28:01
Speaker 2: actually seen home prices moderate, yep, but that's not happening
28:06
Speaker 2: in many places, and so you've got you know, problems obviously.
28:11
Speaker 2: So I think look again, as Mike said, everyone's trying
28:16
Speaker 2: to come up with, well, we could do just build more,
28:19
Speaker 2: find ways to build.
28:20
Speaker 3: More, and if and if partitioning off a little bit
28:23
Speaker 3: of federal land helps with that, then sure I can
28:26
Speaker 3: be convinced of it. But it's not going to be
28:29
Speaker 3: that's our one solution to fixing the house in crisis.
28:32
Speaker 2: And it doesn't mean that you need to like completely
28:34
Speaker 2: change the character or tenor of your local area.
28:39
Speaker 3: Although it gets framed that way. Having lived living in
28:42
Speaker 3: a town that just went through this very heated debate.
28:45
Speaker 3: It was framed as either vote this down or this
28:49
Speaker 3: town is going to be completely unrecognizable and it's going
28:52
Speaker 3: to look like downtown Boston.
28:53
Speaker 2: And that was not the truth of it. But that's
28:55
Speaker 2: how the conversations get. Well, here's here's the other truth,
28:59
Speaker 2: and this is a tough one for people to swallow,
29:02
Speaker 2: which is your town shouldn't look the exact same as
29:05
Speaker 2: when you grew up. Like, if if you're seventy five
29:09
Speaker 2: years old and your town still looks the exact same,
29:11
Speaker 2: it's probably not doing a very terrible town. It's probably
29:14
Speaker 2: not doing very well. I mean economically it hasn't do No,
29:18
Speaker 2: it's it's it's probably not doing very well then. And
29:22
Speaker 2: you know, like I can go through a whole laundry
29:24
Speaker 2: list of New England towns that you know, I've spent
29:27
Speaker 2: time in where you know, you can tell like the
29:29
Speaker 2: town is just not doing well and the population's kind
29:33
Speaker 2: of feeling down about it, and the town looks the
29:35
Speaker 2: same as it did sixty years ago. But that's not
29:38
Speaker 2: necessarily a good thing. It doesn't mean that you have
29:41
Speaker 2: to go and immediately say, hey, let's start building sixty
29:45
Speaker 2: story buildings or even you know, four story condos and
29:48
Speaker 2: stuff like that. The stuff that you're talking about can
29:50
Speaker 2: be as simple as, hey, let's allow for duplexes and
29:53
Speaker 2: triplexes to be constructed, and now we're getting two or
29:56
Speaker 2: three units of housing on each parcel instead of just one.
30:00
Speaker 2: It can be stuff like that that still makes a
30:03
Speaker 2: big difference. And like if we just say, hey, like
30:08
Speaker 2: we if we just say we don't want more people
30:11
Speaker 2: and we don't want more traffic, I don't know that
30:14
Speaker 2: you're actually gonna like the results of that, because usually
30:18
Speaker 2: towns don't just stay the same. They either grow or
30:20
Speaker 2: they shrink. You don't usually just like stay the same.
30:25
Speaker 2: And so people are going to go and businesses are
30:28
Speaker 2: going to go where the growth is. And if you
30:30
Speaker 2: don't remain committed to that growth, your school assists can suffer.
30:37
Speaker 2: It's not good. It's not a great it's not good.
30:40
Speaker 2: Let's take a quick break here. When we come back,
30:42
Speaker 2: we'll do a little bit of stack roulette.
30:45
Speaker 1: If you missed any of today's show, catch up whenever
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30:52
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31:35
Speaker 2: Mike, what do you got for stack roulettes?
31:37
Speaker 3: I've got Elon Musk making promises that I don't think
31:40
Speaker 3: he's going to be able to wiggle out of this time.
31:42
Speaker 3: In an interview with CNBC's David Faber on Tuesday, he promised,
31:48
Speaker 3: among other things, that he would be bringing Tesla robotaxis
31:53
Speaker 3: to Austin, Texas in June. It sounds like they actually are, yeah,
31:59
Speaker 3: so he said, He's already off with only ten vehicles
32:01
Speaker 3: in Austin to test out this robo taxi service. But
32:05
Speaker 3: you know, instead of him promising things that are like
32:08
Speaker 3: seven years out at this stage, he's actually saying, no,
32:11
Speaker 3: we're going to start with something next month in Austin, Texas.
32:15
Speaker 3: So I think I believe him this time that they
32:17
Speaker 3: are going to move forward with this. He claims that
32:20
Speaker 3: the goal is to rapidly expand that to San Francisco
32:23
Speaker 3: in other areas, basically copying what Weimo has been able
32:25
Speaker 3: to do on their own self driving taxi service. And again,
32:31
Speaker 3: you know, this has been a promise from Tesla for
32:34
Speaker 3: years now that hey, this self driving skills that you
32:37
Speaker 3: have developed over the years are going to eventually lead
32:39
Speaker 3: to fully autonomous vehicles. They have not fulfilled that promise
32:42
Speaker 3: thus far, but maybe this is actually a step in
32:47
Speaker 3: that direction for once.
32:49
Speaker 2: It's going to be put up percent of time. We'll
32:51
Speaker 2: know by the end of the year how things are
32:52
Speaker 2: going with their rollout. I don't have any expectations good
32:58
Speaker 2: or bad, and we'll see what happens with it.
33:01
Speaker 3: Speaking of self driving taxes, Tucker's father just reminded us
33:05
Speaker 3: that Waimo is in the city of Boston. Now, so
33:09
Speaker 3: if you see a weird looking white Jaguar with a
33:13
Speaker 3: bunch of cameras mounted.
33:14
Speaker 2: To the top of it. That's that's a self driving
33:16
Speaker 2: car that has a driver. Why can't they just name
33:19
Speaker 2: companies good anymore? Like, actually, just call it good, Yes,
33:25
Speaker 2: just call it good, you know, like Weaimo. I hate Waymo. Well,
33:29
Speaker 2: I hate the name Waimo. It doesn't mean anything. Like
33:33
Speaker 2: you said, who said jaguar. You said Jaguar, Jaguar. It
33:37
Speaker 2: immediately like invokes something. Yeah, you know Waimo. Well, what
33:42
Speaker 2: if I wanted to weigh less? You know, Like I
33:45
Speaker 2: don't know. It's just kind of it's it's it's Venmo,
33:48
Speaker 2: Like what does that mean?
33:49
Speaker 4: Did you say there were no drivers?
33:51
Speaker 2: I don't know. Name it after all? The Waymo's in
33:53
Speaker 2: Boston are have drivers on them, Like name it after yourself,
33:56
Speaker 2: like Jim Google did or Tim Apple?
33:58
Speaker 4: Right, I mean it's not the thing. No, it's not
34:00
Speaker 4: the best photo slash video he took but doesn't look
34:04
Speaker 4: like a driver. I don't see a driver. Maybe he's
34:08
Speaker 4: like reclined all the way back.
34:09
Speaker 3: But again, can someone can someone remind Tucker's father to
34:12
Speaker 3: stop taking pictures.
34:16
Speaker 2: That was bumper to bumper because he crashed into the
34:19
Speaker 2: guy's bumper in front of him.
34:21
Speaker 3: Tucker's father's pulled over on the side of the road
34:23
Speaker 3: because he caused an accident, and now he's taking pictures
34:25
Speaker 3: of all the cars go by. Sorry, Tucker's father, I
34:29
Speaker 3: know that's not the.
34:29
Speaker 2: Truth from Wall Street Journal. You can still negotiate a
34:33
Speaker 2: best and final job offer. Good luck, So here's the thing.
34:40
Speaker 2: You can always ask for more. There's also a chance
34:44
Speaker 2: that the company might say peace out if you try
34:47
Speaker 2: to negotiate a best and final job offer. Typically, when
34:51
Speaker 2: you get to like the stage where a company's saying
34:54
Speaker 2: that they're you know they they usually mean it. You
34:56
Speaker 2: do have a thing now where apparently some companies are
34:58
Speaker 2: saying that they where first offer is their best and final,
35:04
Speaker 2: which in that case I would say, okay, yeah you can,
35:07
Speaker 2: you can go back to them. But beyond that, hey,
35:11
Speaker 2: once someone says this is our best and final offer,
35:14
Speaker 2: I really wouldn't expect anything from them, And in fact,
35:17
Speaker 2: you might. You know, it's not twenty twenty one. You
35:20
Speaker 2: might end up in a spot that you don't like
35:22
Speaker 2: if you try to negotiate it, because they do have
35:24
Speaker 2: other candidates these days.
35:26
Speaker 3: Yeah, yeah, the job market situation has changed dramatically here
35:31
Speaker 3: across the country, and for most people, that negotiating power
35:36
Speaker 3: has disappeared. The idea of signing bonuses for a large
35:40
Speaker 3: portion of roles and big annual up increases is just
35:45
Speaker 3: not really on the table outside of some very niche
35:48
Speaker 3: industries that are not generally in the white collar space
35:53
Speaker 3: that the Wall Street Journal is probably or is this
35:55
Speaker 3: Wall Street Journal?
35:56
Speaker 2: Yeah, yeah, this is talking about someone trying to negotiate
35:58
Speaker 2: a two hundred and fifty thousand dollars job offer. I
36:01
Speaker 2: don't think that's the average person. No, No, it might
36:06
Speaker 2: be the average Wall Street Journal reader. The data indicates
36:09
Speaker 2: it's not, so I don't know. I'm a believer. You
36:15
Speaker 2: got to read the room, and the room right now
36:17
Speaker 2: is saying take the jobs. It's not a job seekers market.
36:22
Speaker 3: I want to talk about mortgage rates in reaction to
36:25
Speaker 3: the move up in yields. According to Mortgage News Daily,
36:28
Speaker 3: you now have the thirty year fixed rate mortgage going
36:30
Speaker 3: for nearly seven point one percent on average. That comes
36:34
Speaker 3: alongside the CNBC report on existing home sales or sorry,
36:40
Speaker 3: just the existing home sales data that came out earlier,
36:42
Speaker 3: which indicated that home sales in the month of April
36:46
Speaker 3: were the worst we've seen since April of two thousand
36:48
Speaker 3: and nine. So worst month of April we've seen since
36:52
Speaker 3: two thousand and nine, I guess, is the answer. We
36:53
Speaker 3: did see some indications that that ticked back up in
36:56
Speaker 3: May from what Chuck was mentioning, but overall, really tough
37:00
Speaker 3: to see any sort of home price or sorry own
37:04
Speaker 3: any sort of home volume movement happening in this environment
37:08
Speaker 3: where mortgage rates are just so high and so many
37:10
Speaker 3: people are mortgage locked.
37:12
Speaker 2: Yeah, it's it's just a very messy housing market right now.
37:19
Speaker 2: And the housing market is one place that I do
37:22
Speaker 2: think if you asked me to describe it in a
37:24
Speaker 2: single word, I would use the word stagflationary. I see
37:29
Speaker 2: the stag, and I see the flation. Prices are still
37:34
Speaker 2: high in much of the country. Prices are still going up,
37:38
Speaker 2: and it's really slow. It's a stagflationary housing market right now.
37:44
Speaker 2: I'll say that the rest of the economy, I have
37:47
Speaker 2: yet to see the stag. Yet to see the stag,
37:51
Speaker 2: and inflation is moderating. Quick break here for the entire
37:55
Speaker 2: rest of the day. We'll see it tomorrow. On the
37:56
Speaker 2: Financial Exchange