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Elon Musk steps down the Trump administration · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike armstraw.
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Speaker 2: Our two on the Financial Exchange, Chuck, Mike and Tucker
1:15
Speaker 2: with you, and markets not doing a ton actually, I mean,
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Speaker 2: I gotta tell you. You have in video reporting earnings
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Speaker 2: yesterday and in video is still up five percent. You
1:29
Speaker 2: had a whole bunch of tariffs struck down by the
1:32
Speaker 2: US Court of International Trade after hours, and all the
1:38
Speaker 2: S and P five hundred can manage is twenty seven points.
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Speaker 3: Yes, okay, I'm glad that we we got that out
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Speaker 3: of the way.
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Speaker 2: The Dow is up ten points, and the Nasdaq, which
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Speaker 2: is obviously heavier in tech and has you know, in video,
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Speaker 2: and it is up at one hundred and fifty nine
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Speaker 2: points almost one percent. So this market today looks an
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Speaker 2: awful lot like twenty twenty two and twenty I'm sorry
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Speaker 2: twenty three twenty four, where tech was leading and everything
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Speaker 2: else was kind of like, hey.
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Speaker 3: What do we do?
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Speaker 2: So that's what we've got going on in markets right now.
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Speaker 2: The Russell two thousands still negative. Actually, so all you
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Speaker 2: small cap fans out there not today bonds. We've got
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Speaker 2: the ten year Treasury moving down a touch in terms
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Speaker 2: of yield, down to four point four to four percent
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Speaker 2: off about four basis points. I'll touch on a couple
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Speaker 2: of data points we got this morning. Shortly. We got
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Speaker 2: Oil West Text Intermediate reversing its earlier gains, now down
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Speaker 2: sixty five cents of barrel after being up a dollar
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Speaker 2: twenty five in overnight trading. And we've got Gold reversing
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Speaker 2: its earlier losses, now up fifteen announce after being down
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Speaker 2: about forty dollars announce last night, it's at thirty three
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Speaker 2: to nine and ninety cents. Before we go further, we
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Speaker 2: do have some big news of our own to announce
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Speaker 2: for financial exchange. Specifically, starting next month, June second, the
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Speaker 2: eleven o'clock hour of our show is going to be
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Speaker 2: airing nationally on Serious XM channel one thirty two, their
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Speaker 2: business radio channel. Yeah, baby, Yeah, that's what I'm talking about.
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Speaker 3: Got that Serious in the new minivan. Let me tuning in.
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Speaker 2: You're doing a trip, you know, all across the country. Yeah,
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Speaker 2: you got us one thirty two on Serious XM, and
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Speaker 2: that's gonna be from eleven to noon, effective next Monday.
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Speaker 2: So we're pretty excited about that, and we'll try to
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Speaker 2: not let it go to our heads.
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Speaker 3: Not possible, but it's.
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Speaker 2: Gonna go to our heads if we're being honest about this,
3:41
Speaker 2: so we're gonna be even more insufferable than we already are,
3:45
Speaker 2: and you gotta deal with that. I do want to
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Speaker 2: talk a little bit about some of the economic data
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Speaker 2: that we got this morning, specifically one piece, because I
3:56
Speaker 2: don't care about how much the natural gas stock in
4:00
Speaker 2: the United States changed last week. I don't even know
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Speaker 2: what to do with the fact that they went up
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Speaker 2: by one hundred and one billion cubic feet. Don't know
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Speaker 2: if they even know that's how we measure it. Don't
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Speaker 2: know if that's a lot, a little, or whatever. What
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Speaker 2: I do want to talk about is what we saw
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Speaker 2: from weekly jobless claims and couple pieces here. The first
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Speaker 2: is initial jobless claims moved up from two hundred and
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Speaker 2: twenty six thousand up to two hundred and forty thousand,
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Speaker 2: and in and of itself, one week is not anything big.
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Speaker 2: We saw one week spike into this range back in April.
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Speaker 2: Turned out that it was just a bunch of New
4:34
Speaker 2: York school bus drivers that filed for unemployment all at once,
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Speaker 2: and then it reversed the week after this. I went
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Speaker 2: through the state level data and there's nothing that stands
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Speaker 2: out in that fashion.
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Speaker 3: So this does seem based increase something that's broader. What
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Speaker 3: I will say, we're entering.
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Speaker 2: The point in time where for the last two years
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Speaker 2: something has seemed off about the seasonal adjustment factors, and
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Speaker 2: we've seen these mid year rises in the seasonally adjusted
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Speaker 2: jobless claims that have not been explainable by anything other
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Speaker 2: than hey, they're not doing a good job with the
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Speaker 2: seasonal adjustments. This is happening a couple weeks earlier then
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Speaker 2: that's happened. So again, I don't know that this is
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Speaker 2: anything this is I'm not sitting here being like, oh,
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Speaker 2: it's the first line of a recession. No, Like, I'm
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Speaker 2: not doing that, But I am saying, Okay, we need
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Speaker 2: to watch this because if this number, you know, moves
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Speaker 2: beyond kind of that two hundred and sixty thousand range,
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Speaker 2: that would indicate to me that it's it's a little
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Speaker 2: bit different from what we've been seeing the last couple
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Speaker 2: of years.
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Speaker 3: Yeah, if we get up to.
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Speaker 2: Like two fifty five and then it rolls over in
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Speaker 2: mid to late July, it's the same exact thing that
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Speaker 2: we've seen the last couple of years. So just something
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Speaker 2: to watch and I don't know if it's worth being
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Speaker 2: excited about or concerned about yet, but it's there and
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Speaker 2: we'll see. The part of this that is a little
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Speaker 2: bit concerning is continuing jobless claims, which moved up to
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Speaker 2: one million, nine hundred and nineteen thousand. That was a
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Speaker 2: jump of around thirty thousand from the prior week. And
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Speaker 2: it's not just that it's a jump from the prior week,
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Speaker 2: but the pace of the pace of gains relative to
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Speaker 2: last year is increasing.
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Speaker 3: We've kind of been in this range for.
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Speaker 2: You know, a while now, where continuing jobbles claims have
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Speaker 2: been going up like three to five percent year over year,
6:29
Speaker 2: right right, This moves us up into the range where
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Speaker 2: we're seeing continuing jobbles claims moving up about seven percent
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Speaker 2: year over year. And the potential for that acceleration is
6:40
Speaker 2: we're kind of a dangerous point in the labor market
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Speaker 2: with what's known as the beverage curve, which basically is
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Speaker 2: job openings compared to unemployment, and when the opening's rate
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Speaker 2: gets below a certain point, it starts to potentially trigger
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Speaker 2: a more rapid rise in unemployment. And so the thing
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Speaker 2: to watch and one of the first signs that you
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Speaker 2: can have a slowing labor market isn't a jump in
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Speaker 2: unemployment claims because companies don't lay their people off unless
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Speaker 2: they have to. Like if if you have people working
7:08
Speaker 2: for you that know your business, you cling to them,
7:12
Speaker 2: you grab them metaphorically, buy the shirt and say I'm
7:17
Speaker 2: not letting you go anywhere. You don't actually do that
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Speaker 2: in reality, because you EH sued, you know HR and
7:24
Speaker 2: it would be bad. But the first place that you
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Speaker 2: see signs of a weakening labor market is continuing claims rising,
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Speaker 2: because that's companies saying we're holding onto our people, but
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Speaker 2: we're not gonna hire the same way, And so people
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Speaker 2: spend more time out of a job and kind of
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Speaker 2: treading water waiting for what comes next.
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Speaker 3: There are a few groups of people that don't appear
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Speaker 3: anywhere in these numbers too, that will eventually show up
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Speaker 3: in the unemployment numbers or sorry, yeah, the the overall
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Speaker 3: unemployment rate. One would be new graduates that are entering
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Speaker 3: the labor market can't file for uemployment. They haven't worked
8:01
Speaker 3: in the labor force, correct, so they can't file for unemployment. Correct.
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Speaker 3: If they're not finding a job after graduating college, too bad,
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Speaker 3: you're not getting paid. The other piece would be government
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Speaker 3: workers don't show up in these data points. That's been
8:12
Speaker 3: a still small number overall, but not showing up in
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Speaker 3: these weekly job as claims because they have their own
8:17
Speaker 3: system to file under. And so you know, just two
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Speaker 3: buckets of people there that are likely experiencing higher unemployment
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Speaker 3: at the moment that are not being reflected.
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Speaker 2: So I think this is stuff that bears watching. It
8:29
Speaker 2: is not a five alarm fire. It is something where
8:33
Speaker 2: you say, Okay, here's the data point. Let's see where
8:36
Speaker 2: this goes over the month of June, where we're gonna
8:38
Speaker 2: get four more of these, and if there's any continued
8:41
Speaker 2: trend upward in these, okay, like maybe maybe there's you know,
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Speaker 2: a problem that's building here. There's a decent chance that
8:49
Speaker 2: this is just statistical noise and we're just gonna have
8:51
Speaker 2: to wait for more data to show up over the
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Speaker 2: next several weeks here before we know that. Anything else
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Speaker 2: to add on this, No, Okay, let's take a quick break.
9:02
Speaker 2: Then when we return, we've got trivia, and then we'll
9:06
Speaker 2: talk about Elon Musk stepping down from the Trump administration.
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Speaker 2: In a post on x yesterday, Elon Musk said, and
11:10
Speaker 2: I quote, as my scheduled time as a special government
11:13
Speaker 2: employee comes to an end, I would like to thank
11:15
Speaker 2: President Donald Trump for the opportunity to reduce wasteful spending,
11:19
Speaker 2: and he is now departing the Department of Government Efficiency.
11:24
Speaker 2: And I think the big thing is, if you actually
11:27
Speaker 2: look at the spending data coming out of the US Treasury,
11:32
Speaker 2: we haven't really seen any meaningful inflection from last year. No,
11:35
Speaker 2: it's basically still moving the exact same pace. Musk was
11:40
Speaker 2: originally talking about trying to find two trillion dollars annually
11:44
Speaker 2: in savings. It's unclear if they've even found one hundred
11:48
Speaker 2: billion dollars annually in savings. I think that this is
11:53
Speaker 2: an important marker when coupled with what Scott Besson said
11:58
Speaker 2: over I think it was over the weekend and talking
12:03
Speaker 2: about hey, like, you know, how do you deal with
12:07
Speaker 2: the US deficit the way that it is, and the
12:11
Speaker 2: messaging for the first four months of this Trump term,
12:17
Speaker 2: as well as kind of the three months after the election,
12:21
Speaker 2: we're all about, Hey, we're gonna get that deficit down.
12:24
Speaker 2: We're gonna take some pain, and then we're gonna be
12:26
Speaker 2: able to just grow, grow, grow once we once we
12:28
Speaker 2: get through that. The messaging that's coming from Bessett right
12:33
Speaker 2: now is pretty much, hey, we need to, you know,
12:36
Speaker 2: grow our way out of this by increasing total GDP faster,
12:40
Speaker 2: and that's the way that we're gonna deal with the
12:42
Speaker 2: deficit rather than trying to cut spending in a meaningful
12:47
Speaker 2: way like these are best in its own words saying this, And.
12:52
Speaker 3: Look, I think everyone expressed a fair bit of doubt
12:56
Speaker 3: about Elon Musk's ability to do anything meaningful on the
12:59
Speaker 3: government spending. So but he's you know, most recently also
13:03
Speaker 3: been lobbing criticisms at the tax bill. His quote the
13:06
Speaker 3: other day was he's disappointed to see the massive spending bill, frankly,
13:09
Speaker 3: which increases the budget deficit, not just decreases it, and
13:12
Speaker 3: undermines the work that the Doge team is doing. Yeah,
13:17
Speaker 3: it is a I think admission on the part of
13:23
Speaker 3: members of the White House that, look, the cutting spending
13:26
Speaker 3: is pretty darn challenging without Congress taking action.
13:29
Speaker 2: I think the the marker that's out there now is, hey,
13:36
Speaker 2: six percent to eight percent US deficits annually, they're here
13:40
Speaker 2: to stay. I'm not saying this is good or bad, yep.
13:45
Speaker 2: But when the Secretary of the Treasury is saying, hey,
13:50
Speaker 2: the way out of this is to grow our way
13:53
Speaker 2: out as opposed to we're gonna, you know, cut spending,
13:59
Speaker 2: that's telling me because that is a very different environment
14:04
Speaker 2: from an economic and market standpoint that you have to
14:08
Speaker 2: deal with from hey, we're going to cut spending as
14:12
Speaker 2: the primary mechanism to try to deal with the deficit.
14:15
Speaker 3: Well, and to me, this all ties back into the
14:17
Speaker 3: court ruling yesterday evening about the tariffs, and as we
14:21
Speaker 3: talked about, I think the Trump administration does have paths
14:24
Speaker 3: by which they can reimpose these and still see the
14:27
Speaker 3: revenue come into the treasury that they were planning on
14:30
Speaker 3: as part of this. But we Chuck, you and I
14:32
Speaker 3: have talked about over the course of the last few
14:34
Speaker 3: weeks that while early on the tariffs were pretty unclear
14:38
Speaker 3: what the end goal was with them. Was it to
14:41
Speaker 3: bring manufacturing back, Was it to punish China, punish Europe,
14:44
Speaker 3: punish others and get them to change behavior. Was it
14:47
Speaker 3: to raise revenue? The seeming conclusion we were coming to,
14:51
Speaker 3: especially after that trip to sad to the Middle East,
14:54
Speaker 3: was yeah, revenue raising seems to be a key goal here.
14:59
Speaker 3: If that's no longer possible, or if it's at least
15:03
Speaker 3: hindered in some meaningful way by the courts, then yeah, yeah,
15:08
Speaker 3: you might be closer to that eight percent side on
15:10
Speaker 3: debt on deficit spending this year than the six And
15:15
Speaker 3: that's been the one thing that I think could prevent
15:17
Speaker 3: this tax bill from actually happening.
15:18
Speaker 4: Now.
15:19
Speaker 3: Now members of Congress have not really cited the tariff revenue,
15:22
Speaker 3: or at least they have not pushed it as Hey,
15:24
Speaker 3: this is why we're passing this is because tariffs are
15:26
Speaker 3: going to offset all of this, because plenty of members
15:28
Speaker 3: of the Republican Party are opposed to tariffs too. But
15:32
Speaker 3: if the deficit hawks actually come out to play this time,
15:35
Speaker 3: that'd be the only thing that I think could derail
15:37
Speaker 3: this entire plan for the Trump administration would be yields
15:41
Speaker 3: moving up again.
15:42
Speaker 2: Well, let's let's even forget about the like the the
15:47
Speaker 2: bill in particular, and let's look at a world in
15:51
Speaker 2: which you've got persistent six percent deficits in the United States.
16:00
Speaker 2: What does that mean? For two different pieces. The first
16:06
Speaker 2: is what does it mean for someone who's lending money,
16:10
Speaker 2: either to the federal government or to an individual.
16:14
Speaker 3: Or corporation.
16:16
Speaker 2: If you've got persistent six percent deficits, meaning, hey, each year,
16:21
Speaker 2: the United States government has to go and borrow six
16:24
Speaker 2: percent of GDP in order to pay its bills.
16:30
Speaker 3: And then a lot more if it goes to war
16:32
Speaker 3: or has a recession.
16:33
Speaker 2: Right, you have a recession that immediately goes to somewhere
16:36
Speaker 2: between eight and ten. You toss a war on top
16:38
Speaker 2: of that, you're going up, you know, twelve fifteen percent
16:41
Speaker 2: deficits in a hurry, yep, What does that mean about
16:45
Speaker 2: the rate of return than an individual or a business
16:50
Speaker 2: aside from a forced buyer like a life insurance company
16:55
Speaker 2: or a pension fund that needs to buy, you know,
16:57
Speaker 2: a certain amount of treasury in order to meet its obligations.
17:01
Speaker 2: What does that mean for the demand of that marginal
17:04
Speaker 2: buyer in a world where, hey, deficits are going to
17:08
Speaker 2: be going up, you know, six percent of GDP each year?
17:12
Speaker 2: Are you going to be comfortable buying a US treasury
17:15
Speaker 2: at four four and a half percent?
17:17
Speaker 3: I don't know. I don't know either. I don't think
17:19
Speaker 3: anyone knows. The other thing that you know, obviously, we're
17:22
Speaker 3: in uncharted territory, is the point that I'm making, completely uncharted,
17:26
Speaker 3: And the answer that question is also heavily influenced by
17:31
Speaker 3: what's going on in the rest of the world. And
17:33
Speaker 3: what's going on in the rest of the world right
17:35
Speaker 3: now at least is the same thing. Germany's talking about
17:38
Speaker 3: big deficits, the UK is talking about big deficits, Japan's
17:41
Speaker 3: talking about big depths, China is talking about China is
17:43
Speaker 3: talking about him. And so what we have experienced over
17:46
Speaker 3: the last twenty some odd years has been foreign buyers
17:50
Speaker 3: of US government debts subsidizing our cost to borrow and
17:54
Speaker 3: accepting these deficits new world. Does it Does it change?
18:00
Speaker 3: Because if it does, and yields have to move higher,
18:03
Speaker 3: meaning there's just not enough buyers out there to entice
18:06
Speaker 3: at four and a half percent on the ten year,
18:08
Speaker 3: five percent on the thirty year, then it means those
18:11
Speaker 3: seven percent mortgage rates were all still frustrated with and
18:14
Speaker 3: not used to potentially moving higher, go higher, and stay
18:17
Speaker 3: there for longer. Which then you talk about how there's
18:20
Speaker 3: no solution to that. By the way, for the Trump administration,
18:22
Speaker 3: there is no easy fix to that other than saying, Okay,
18:25
Speaker 3: we finally will curtail spending.
18:27
Speaker 2: No, and by the way, you don't want any administration
18:32
Speaker 2: to be able to directly set the cost of money
18:35
Speaker 2: for mortgages?
18:36
Speaker 3: Yeah, of course. You know.
18:37
Speaker 2: I always say, think of the person that you think
18:41
Speaker 2: is least qualified to run the federal government and think
18:45
Speaker 2: about what they would do if they were in that
18:47
Speaker 2: seat with that power. Would you want them to be
18:50
Speaker 2: able to, you know, control exactly where mortgage ritten.
18:53
Speaker 3: No, because you know what.
18:55
Speaker 2: I would do if I were president, Mike zero percent mortgages.
19:00
Speaker 3: Whoo, man, people would love me.
19:02
Speaker 2: They would like you a lot. Yeah, when I'm out
19:04
Speaker 2: of office. They wouldn't like me anymore because eventually you
19:07
Speaker 2: got to pay the piper. But while I'm in office, man,
19:09
Speaker 2: they would love me. Gotta tell you, let's take a
19:12
Speaker 2: quick break here. When we come back, we've got the
19:15
Speaker 2: answer to our trivia question, and then we'll talk a
19:19
Speaker 2: little bit about artificial intelligence because yeah, and then we'll
19:25
Speaker 2: also talk about bonds because.
19:29
Speaker 3: Well yeah, right after this.
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Speaker 2: Business Radio Channel one thirty two. So we're going nationwide,
20:51
Speaker 2: and whether you're renting a car somewhere, whether you're driving
20:54
Speaker 2: in your own car with a little serious XM.
20:56
Speaker 3: We had already hit both the coasts but we had
20:59
Speaker 3: a really big gap in the middle there about three
21:02
Speaker 3: thousand miles. Yeah, yeah, we're filling that gap.
21:05
Speaker 2: We're filling the gap, so that that's nice. And thank
21:08
Speaker 2: you to the people that texted us congratulating us. We
21:11
Speaker 2: are very do we have some names.
21:13
Speaker 3: Excited people to text us congratulations and congrats appear to
21:17
Speaker 3: be their names.
21:18
Speaker 2: All right, fair enough, so thank you to congratulations and congrats.
21:22
Speaker 2: Peace today from Barons.
21:27
Speaker 4: Tucker, let me confirm what's the headline.
21:30
Speaker 2: Retirees often feel guilty spending money? Yeah, barons? Okay, Peace
21:35
Speaker 2: Day from Barons. Retirees often feel guilty spending money. Here's
21:38
Speaker 2: how they can get over that.
21:39
Speaker 3: We don't talk about this one a lot because it
21:41
Speaker 3: is a little bit more fun to talk about the
21:44
Speaker 3: ones that spend recklessly and irresponsibly. You know, it's just
21:48
Speaker 3: a more entertaining story of the guy that bought the
21:50
Speaker 3: boat and then you know, sunk his life savings into
21:53
Speaker 3: the boat and sad.
21:55
Speaker 2: But a couple that bought the house on Long Island
21:57
Speaker 2: for their dog, you remember that one.
21:58
Speaker 3: Yeah, yeah, So you know these are entertaining stories to catch.
22:01
Speaker 3: But I have to say I see this one probably
22:04
Speaker 3: more often than the former, which is some of that
22:08
Speaker 3: good old Yankee guilt when it comes to spending, and
22:11
Speaker 3: sometimes it manifests and guilt. Other times I see it
22:14
Speaker 3: in fear of spending or fear of pulling from savings.
22:20
Speaker 2: I don't believe in guilt. Oh well, that's except in
22:23
Speaker 2: like verdicts of a trial. But otherwise I think guilt
22:27
Speaker 2: is a useless emotion.
22:28
Speaker 3: To pretty narcissistic.
22:29
Speaker 2: What do you mean, I don't think so. No, guilt
22:32
Speaker 2: is not shame shame. I believe shame versus guilty guilt.
22:35
Speaker 3: I do not believe in shame.
22:36
Speaker 2: I think is a something we need more of because
22:39
Speaker 2: I don't think there's enough shame in society.
22:40
Speaker 3: If he stays guilty.
22:41
Speaker 2: Feeling guilty is basically saying, hey, something good happened to
22:44
Speaker 2: me and I'm not entitled to it, which is the
22:46
Speaker 2: opposite side of oh, how could this bad thing be
22:49
Speaker 2: happening to me? Ultimately, whether something's good or bad, it happened.
22:53
Speaker 2: And so if you happen to be blessed with a
22:55
Speaker 2: level of wealth that you never dreamed you could imagine,
22:59
Speaker 2: I don't think you should feel guilty or necessarily fearful
23:01
Speaker 2: about using that to improve your life and the lives
23:04
Speaker 2: of people around you.
23:06
Speaker 3: So the worst case scenarios that I've seen play out from
23:08
Speaker 3: this guilt and fear have been really just devastating. I mean,
23:13
Speaker 3: both you and I have both known people personally who
23:17
Speaker 3: work their butts off, work longer than they have to,
23:21
Speaker 3: don't love the work they do, don't love the work
23:23
Speaker 3: they do, It's stressful, it hurts their health, and then
23:26
Speaker 3: I've personally seen them in their sixties retire and drop dead.
23:30
Speaker 3: That's like the worst case outcome from this type of
23:33
Speaker 3: scenario is that version of it, and it is devastatingly
23:39
Speaker 3: sad to see that less extreme versions of this, though
23:42
Speaker 3: I saw it just the other day. People are worried
23:47
Speaker 3: about touching their savings, and so they will make financial
23:50
Speaker 3: decisions sometimes that don't make a ton of sense. For example,
23:54
Speaker 3: I don't want to touch my savings I've spent so
23:56
Speaker 3: much my time putting money into that four one K.
23:58
Speaker 3: I'm pulling my social security instead. I'm pulling it earlier
24:01
Speaker 3: than I would otherwise need it and would otherwise be recommended,
24:05
Speaker 3: because I because I just don't want to touch this.
24:07
Speaker 3: I'm pulling the pension. I'm doing this, that or the
24:09
Speaker 3: other because I'm worried about touching this bucket of money.
24:12
Speaker 3: And I view another bucket differently, the social security that's
24:15
Speaker 3: the government's money. I'm going to take that instead of
24:17
Speaker 3: touching my own money and foregoing all the growth that
24:19
Speaker 3: it would have in order to do so. And so
24:24
Speaker 3: a lot of this comes from fear, sometimes guilt. A
24:27
Speaker 3: lot of the other stuff comes from lack of understanding, Yeah,
24:32
Speaker 3: how much can I take YEP? Is it sustainable? Will
24:35
Speaker 3: I be able to? Which order should I take it in?
24:38
Speaker 3: Should I be looking at my social security versus my
24:40
Speaker 3: IRA versus my wroth what's the right bucket to pull
24:43
Speaker 3: it from? And oftentimes it leads to paralysis sometimes that
24:46
Speaker 3: manifest and working longer than you have to. Sometimes it
24:49
Speaker 3: manifests and making other bad financial decisions because of it.
24:53
Speaker 3: And I do see it really frequently, and if you're
24:56
Speaker 3: facing down those types of decisions.
24:59
Speaker 5: A B.
25:01
Speaker 3: Get some help from a professional like the folks at
25:04
Speaker 3: Armstrong Advisory Groups who can help guide you through the
25:07
Speaker 3: tax benefits and drawbacks of one strategy versus another, and
25:10
Speaker 3: really plan out for the long term. Hey, over the
25:13
Speaker 3: next twenty five years, what's going to be the right
25:15
Speaker 3: decision for me? When it comes to these really important
25:17
Speaker 3: ones that get hyper concentrated from ages fifty five to
25:21
Speaker 3: seventy five. There are so many more important decisions around
25:25
Speaker 3: that time period than really any others when it comes
25:29
Speaker 3: to your retirement. If you have questions like that, give
25:32
Speaker 3: us a ring. Eight hundred three nine three for zero
25:35
Speaker 3: zero one is for the Armstrong Advisory Group. You can
25:38
Speaker 3: check us out online at Armstrong Advisory dot com and
25:41
Speaker 3: book a callback right there, but the phone number eight
25:43
Speaker 3: hundred three nine three for zero zero one.
25:46
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:49
Speaker 1: registered investment advisor. Nothing in the ad or in any
25:52
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
25:55
Speaker 1: your own financial tax into state planning advisors before making
25:57
Speaker 1: any investment decisions. Armstrong may content you do offer investment
26:01
Speaker 1: advisory services.
26:03
Speaker 2: One other item just on that topic, It's okay if
26:10
Speaker 2: you make stupid decisions with your money.
26:13
Speaker 3: What do you mean by that?
26:16
Speaker 2: Not everything has to be the optimal financial decision, like
26:19
Speaker 2: the big ones like around social security and like how
26:22
Speaker 2: to withdraw money from your portfolio. Yes, like you want
26:25
Speaker 2: to have like good frameworks there, but occasionally it's okay
26:29
Speaker 2: to just be like, hey, I'm doing something that's fun,
26:32
Speaker 2: and it's okay if this isn't the best financial decision
26:34
Speaker 2: as long as you're going in eyes open.
26:36
Speaker 3: Oh and I actually mentioned that when it comes to
26:39
Speaker 3: social security even too, like, hey, is this decision just
26:43
Speaker 3: going to allow you to live a more comfortable life
26:45
Speaker 3: and be more confident? Then yeah, do it, like you
26:49
Speaker 3: can afford to do it, do you want to do it?
26:51
Speaker 3: Go do it right. But the informed piece is really important.
26:55
Speaker 2: It is you want to know the consequences of everything
26:58
Speaker 2: so that you can then appropriately say, yeah, this is
27:01
Speaker 2: gonna cost me x hundred dollars over this time.
27:05
Speaker 3: Period, and I think it's worth it.
27:07
Speaker 2: I'm okay with that, and I can deal with that
27:10
Speaker 2: because it's gonna be fun and I can take my
27:14
Speaker 2: grandchild on a trip where I can go and you know,
27:19
Speaker 2: join the chess club. I've always wanted to join.
27:21
Speaker 3: I don't know if those are expensive or not, but
27:23
Speaker 3: I saw in a local group that somebody was trying
27:26
Speaker 3: to start up a fountain pen club. So, you know,
27:28
Speaker 3: a fountain pen club. Maybe having more time to do that,
27:32
Speaker 3: Like you collects unclear, you write with them, you can
27:36
Speaker 3: pay unclear. What's the I love that stuff? Like, I
27:42
Speaker 3: just love here's the thing.
27:43
Speaker 2: We've all got, like this stuff that gets us excited,
27:46
Speaker 2: and some of it's probably not just you know, oh
27:49
Speaker 2: like how about those Red Sox. Like don't don't get
27:51
Speaker 2: me wrong, I used to love the Red Sox when
27:52
Speaker 2: I was a kid.
27:53
Speaker 3: Now that you know, I have.
27:55
Speaker 2: Kick, No, it's not even the suck. It's just like,
27:59
Speaker 2: now that I have a family in my I own't
28:00
Speaker 2: one hundred and sixty two games just too many for
28:02
Speaker 2: me to watch. Can't do it, man, So instead I
28:05
Speaker 2: watched none. But in any case, I just everyone has those,
28:09
Speaker 2: you know, kind of weird little idiosyncrasies that they like,
28:12
Speaker 2: idiosyn whatever the word is.
28:15
Speaker 5: I don't know.
28:15
Speaker 2: You want to start a fountain pen club. Great here, Hey,
28:18
Speaker 2: you're joining the Daffodil Appreciation Club.
28:21
Speaker 3: Even better? Can we talk about one that is in
28:24
Speaker 3: our stack today that yes, I have kind of relentlessly
28:28
Speaker 3: mocked Disney adults in the past. Oh no, I haven't.
28:31
Speaker 3: I know you haven't I have, And so this one
28:35
Speaker 3: actually has me excited. Disney is going to be opening
28:39
Speaker 3: their theme parks or already has with a theme called
28:42
Speaker 3: Disney After Hours, which allows you into the parks on
28:45
Speaker 3: limited days from ten pm to one am for a
28:49
Speaker 3: hefty price, which is generally more than the you know,
28:52
Speaker 3: general full day price. But the promise is basically no lines,
28:56
Speaker 3: unlimited food, and get to walk around the park at
29:00
Speaker 3: night and not experience all the crowds and screaming kids.
29:03
Speaker 2: But it's not adults only.
29:04
Speaker 3: It's not you can bring your kids there, but it's
29:08
Speaker 3: ten pm to one am. So I just know personally,
29:11
Speaker 3: if I let my kids stay up till one am,
29:13
Speaker 3: I would have a horrible rest of my week. So
29:15
Speaker 3: I don't expect to see a lot of eight year
29:16
Speaker 3: olds there. But you could love the idea, But you
29:20
Speaker 3: could love the idea of this gets me excited about Disney.
29:23
Speaker 3: I'm not a Disney enthusiast. Does sound good? Yeah, let's
29:27
Speaker 3: take a quick break.
29:28
Speaker 2: When we come back We're gonna be joined by paul
29:30
Speaker 2: A Monica from Barons right after this.
29:33
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29:56
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30:05
Speaker 2: As promised, we are now joined by Paul Monica from Barons.
30:10
Speaker 2: We're gonna be talking in video here. Paul, how are
30:13
Speaker 2: you today?
30:14
Speaker 5: I'm good? Thanks, how you doing? Thanks for me on
30:16
Speaker 5: this Thursday.
30:17
Speaker 2: Absolutely great to have you a day early. And let's
30:20
Speaker 2: talk a little bit about in Video's earnings last night.
30:24
Speaker 5: What was notable, I mean, just very solid results despite
30:30
Speaker 5: the obvious concerns about Trump's tariffs and what it means
30:36
Speaker 5: for China sales in particular, I mean the data center
30:40
Speaker 5: revenue grew I think was seventy three percent year over year.
30:45
Speaker 5: Really does show that AI chip demand remained strong despite
30:51
Speaker 5: concerns not just about tariffs but the threat from cheaper
30:55
Speaker 5: AI technology. Remember, I mean in video stock got rocked
30:59
Speaker 5: earlier this year because of the revelation of deep seeking,
31:02
Speaker 5: the Chinese technology that was offering AI services at a
31:08
Speaker 5: lower cost. I think a lot of those big quote
31:11
Speaker 5: unquote hyperscalers, Microsoft, Meta, Amazon, Alphabet, they're still spending very
31:18
Speaker 5: aggressively to roll out AI technology, and usually they're using
31:24
Speaker 5: in Vidia AI chips like Blackwell and H twenty.
31:28
Speaker 2: When I look at Nvidia, the thing that stands out
31:30
Speaker 2: to me is that their profit margins are just massive.
31:35
Speaker 2: Is it really a case where there's no one else
31:37
Speaker 2: who can, you know, compete with them on the quality
31:42
Speaker 2: or the capability of the processors, because otherwise it seems
31:45
Speaker 2: to be an area that's kind of ripe for competition.
31:48
Speaker 2: Where you're sitting there and you're like, man, like, the
31:50
Speaker 2: profit margins are like fifty sixty percent, there's got to
31:53
Speaker 2: be someone who wants to eat into that.
31:55
Speaker 5: Yeah, I mean, it's a great question there. I think
31:58
Speaker 5: were some concerns about a m D potentially gaining some
32:03
Speaker 5: ground Intel, which is obviously struggled mightily to gain a
32:08
Speaker 5: foothold in the AI chip and data center space so far, though,
32:14
Speaker 5: you know, Jensen wog and in Nvidia has had this
32:16
Speaker 5: market largely to itself, and it seems to be the
32:22
Speaker 5: type of environment where companies realize that they have to
32:27
Speaker 5: have these you know, AI features, and if they are
32:31
Speaker 5: going to do it, they need to do it within
32:34
Speaker 5: video because they are the best quality chips. Until you know,
32:38
Speaker 5: you start to see some legitimate competition from lower priced
32:43
Speaker 5: semiconductor manufacturers offering, you know, a pretty good product. I think,
32:48
Speaker 5: you know, in Vidia's margins are going to remain pretty high,
32:52
Speaker 5: but that is the risk. But you know, in Videa's
32:55
Speaker 5: valuation has come down from its peak, so I think
32:58
Speaker 5: investors are pricing in a little bit of potential margin erosion.
33:02
Speaker 5: At some point.
33:04
Speaker 2: Explain to me how this is either similar or different
33:10
Speaker 2: from what we saw with Intel back in the late
33:15
Speaker 2: nineties early two thousands, because I look back there and
33:18
Speaker 2: I was poking around on this earlier today and Intel
33:22
Speaker 2: had fat margins forty fifty percent. Everyone was buying PCs.
33:28
Speaker 2: That was what you needed to have. And then they
33:30
Speaker 2: go through you know, three or four different Capex cycles
33:32
Speaker 2: and we're sitting here, you know, twenty five years later,
33:35
Speaker 2: going okay, like, maybe that wasn't you know where technology ended.
33:41
Speaker 2: I'm not saying fast forward twenty five years because I
33:43
Speaker 2: don't think that's realistic. But is it right or wrong
33:46
Speaker 2: to see parallels between Intel in the tech bubble and
33:49
Speaker 2: Nvidia today?
33:51
Speaker 5: Yeah, Intel, you could say Cisco, Well, you know, I
33:55
Speaker 5: think that you're right that in Vidia is going to
33:59
Speaker 5: have to continue to innovate. They won't be able to
34:05
Speaker 5: command such pricing power indefinitely if they aren't producing whatever
34:11
Speaker 5: products are needed by their end customers. That is the question. Though.
34:17
Speaker 5: I think that right now we are still in such
34:20
Speaker 5: the early stages of generative AI. For all of the
34:25
Speaker 5: hype about chat, shept and deep seek, I think that
34:30
Speaker 5: it still is something that gets a lot more talk
34:35
Speaker 5: than is being used practically practically, particularly by the average consumer.
34:42
Speaker 5: And you know, businesses are going to use AI a
34:44
Speaker 5: lot more aggressively as well to cut costs. So to
34:47
Speaker 5: your point, it is impossible to say will and Nvidia
34:52
Speaker 5: in twenty fifty look like Cisco and Intel now. I
34:58
Speaker 5: don't know if we can go that far ahead. Who knows,
35:02
Speaker 5: you know, who's going to be leading in Vidia in
35:04
Speaker 5: twenty fifty. I mean it could be Jensen Wong. I'm
35:06
Speaker 5: guessing that twenty five years from now he might be retired.
35:10
Speaker 5: But it is definitely a gamble always with technology stocks
35:17
Speaker 5: to bet on the future that a company that is
35:20
Speaker 5: currently in the lead will be able to adapt. But
35:23
Speaker 5: I mean, look at companies like Microsoft and IBM that
35:26
Speaker 5: have actually had some momentum lately. They are quote unquote
35:29
Speaker 5: old tech stocks that have found religion in the cloud
35:34
Speaker 5: in AI and have been able to emerge as current
35:38
Speaker 5: leaders as well. So you you have to hope that
35:40
Speaker 5: in video will stay on top of the trends, whatever
35:43
Speaker 5: they may be, even when it may no longer be
35:45
Speaker 5: generative AI. It's whatever the next flashy new thing is
35:50
Speaker 5: very good.
35:50
Speaker 2: Paul, appreciate you joining us today. Have a fantastic weekend.
35:54
Speaker 2: We'll catch up with you soon.
35:56
Speaker 5: Thanks lot, guys, appreciate it.
35:57
Speaker 2: It's Paul Monica from Baron's talking about in I'd like
36:01
Speaker 2: to talk about focusing on perhaps the wrong things in
36:04
Speaker 2: retirement for a moment here.
36:06
Speaker 3: What are the wrong things? Well, sometimes we get obsessed
36:09
Speaker 3: with cost of living and travel and Leisure has a
36:12
Speaker 3: piece today about one of the most popular retirement places
36:16
Speaker 3: in the United States for low taxes and good weather,
36:19
Speaker 3: and they identify the city of rio Verde, Arizona, as
36:25
Speaker 3: the number one destination across Arizona and Florida to retire,
36:29
Speaker 3: and they look at cost of living. They also just
36:31
Speaker 3: looked at, hey, how many people are over the age
36:34
Speaker 3: of sixty five living in this community. It's a high concentration.
36:36
Speaker 3: There's a lot of retire reasons that considered good or bad.
36:40
Speaker 3: I don't know. I guess it's your opinion. And you know,
36:43
Speaker 3: because there's some people who.
36:44
Speaker 2: Retire and are like, I want to be in a
36:45
Speaker 2: community that has kids and families, and other people are like, no,
36:49
Speaker 2: just give me a bunch of people my aids.
36:50
Speaker 3: So the article goes on to talk about rio Verde
36:52
Speaker 3: and the cost of living and general affordability across Arizona.
36:55
Speaker 3: But the name was ringing a bell to me, and
36:57
Speaker 3: so I went and looked at it, and oh yeah,
36:59
Speaker 3: rio Verde just happened to be that town back in
37:02
Speaker 3: twenty twenty three that completely lost access to water in
37:07
Speaker 3: Arizona because there was no water in the new developments
37:10
Speaker 3: that they were putting. Do you happen to remember this
37:11
Speaker 3: story where they were literally there was an entire town,
37:14
Speaker 3: the rio Verde Foothills that lost access to water on
37:18
Speaker 3: January first of twenty three after Scottsdale ended their water
37:22
Speaker 3: hauling service to the area and cut them off and
37:25
Speaker 3: for six months until the governor signed a bill giving
37:28
Speaker 3: them access to water. Again, the town did not have
37:31
Speaker 3: water and they were shipping to do you ship it
37:34
Speaker 3: in via big truck. So again, there are a lot
37:39
Speaker 3: of things that go into where you retire, and for me,
37:42
Speaker 3: one of the top concerns I would have no matter
37:45
Speaker 3: where I live would be water. Can I turn the
37:46
Speaker 3: faucet on and get water? Yeah? And that was apparently
37:49
Speaker 3: not the case for a period of time in the
37:51
Speaker 3: Rio Verde Foothills, So I don't know, be careful about
37:54
Speaker 3: your focus on cost of living.
37:56
Speaker 2: I'm currently watching a video of a bunch of people
37:59
Speaker 2: in Cow now onesiees dancing at the bitcoin conference.
38:03
Speaker 3: This is it Bitcoin's weird man.
38:08
Speaker 2: I don't really know what to make of it, but
38:11
Speaker 2: there's a bunch of people in Cow Onesies dancing at
38:14
Speaker 2: a bitcoin conference. Things you don't see at the bottom.
38:20
Speaker 2: Let's take a quick break here. When we come back tomorrow.
38:23
Speaker 2: We got more financial exchange