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Are the impacts from AI on the economy exaggerated? · 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 2: Chuck Paul Tucker with you here on the financial exchange.
1:14
Speaker 2: We got stocks making a broad based rally today, not
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Speaker 2: really on any news. I haven't seen anything that's been notable,
1:22
Speaker 2: but you've got a rally that's happening. Nonetheless, with the
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Speaker 2: Dow Jones Industrial Average about two hundred and seventy two
1:28
Speaker 2: points a little more than half a percent. The S
1:31
Speaker 2: and P five hundred index is up sixty four points
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Speaker 2: about one percent, and the nasdak can Posite up two
1:37
Speaker 2: hundred and eighty seven points about one to quarter percent.
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Speaker 2: So again, all three major US indices are in the
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Speaker 2: green in a broad based rally that is taking place.
1:49
Speaker 2: When we take a look through other markets that we
1:52
Speaker 2: have had, there are the things that we typically are watching.
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Speaker 2: We got the ten year US Treasury down three tenths
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Speaker 2: of a basis point to four point one to nine percent,
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Speaker 2: kind of been stuck in a range over the last
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Speaker 2: week or so, no major movement, and quite honestly, probably
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Speaker 2: has something to do with the fact we haven't really
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Speaker 2: been getting much economic data.
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Speaker 3: You know.
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Speaker 2: It's if you're not getting that data, what are you
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Speaker 2: going to trade bonds on? If you're not getting inflation
2:16
Speaker 2: or growth data. There's just not much out there that
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Speaker 2: we're seeing. Gold continuing its remarkable run up another forty
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Speaker 2: six dollars and forty cents, downs to forty two oh
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Speaker 2: nine and forty cents, its first time ever over for
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Speaker 2: forty two hundred dollars per ounce. We've got oil West
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Speaker 2: Text Intermediate up nine cents a barrel to fifty eight
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Speaker 2: seventy nine right now, but still below sixty. You're seeing this,
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Speaker 2: by the way, trickling into gas prices, which are down
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Speaker 2: another nine tenths of ascent overnight to three h six
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Speaker 2: and seven tenths of ascent. So we've now conclusively kind
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Speaker 2: of broken out of that three ten to three twenty
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Speaker 2: range that we were in, and quite honestly, with oil
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Speaker 2: prices where they are, pretty good chance, we're heading for
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Speaker 2: somewhere in the high twos per gallon on a national
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Speaker 2: average over the next week or so, so I think
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Speaker 2: that we're probably gonna break some lower ground there, which
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Speaker 2: is obviously good news for those of us who don't
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Speaker 2: live in oil country. If you happen to be listening
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Speaker 2: from you know, Houston, Texas, or well really most of Texas.
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Speaker 2: Quite honestly, Colorado, Western Pennsylvania. You might be sitting there saying, yeah,
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Speaker 2: it's kind of not great for us from you know,
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Speaker 2: a business perspective, since energy companies make up a lot
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Speaker 2: of those local economies. But in the aggregate, it's probably
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Speaker 2: net neutral. When we look at oil prices at this point,
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Speaker 2: with how much oil the US produces at this point
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Speaker 2: and exports, higher oil prices aren't the drag they used
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Speaker 2: to be, and lower oil prices aren't the boon they
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Speaker 2: used to be. It's kind of, hey, it helps some
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Speaker 2: parts of the country, hurts others, and overall probably nets
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Speaker 2: out the somewhere around neutral. Even though personally, with me
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Speaker 2: not being in the oil industry, I like the lower
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Speaker 2: oil prices, but I can understand why those of you
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Speaker 2: you know that might be employed in that industry are saying,
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Speaker 2: and it's not really great for us. Right now, let's
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Speaker 2: talk a little bit about artificial intelligence. We don't try
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Speaker 2: to talk about it for fifteen minutes a day on
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Speaker 2: the show. We just seem to because it's one of
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Speaker 2: the major topics driving the economy and markets right now.
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Speaker 2: And Ernie Tedesky, who we have had on the show
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Speaker 2: a couple times, I think and also used to be,
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Speaker 2: you know, previously on the Council of Economic Advisors. So
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Speaker 2: Ernie's you know, way smarter than all of us. And
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Speaker 2: he currently works at the Yale Budget Lab and they
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Speaker 2: did an analysis on artificial intelligence and its impact on
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Speaker 2: the US economy, and basically what they've found is, yeah,
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Speaker 2: there's definitely some investment that's happening here, and there's definitely
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Speaker 2: more use of AI that's happening right now, but overall
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Speaker 2: the difference is to the US GDP are very much
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Speaker 2: on the margins and not some huge wave that is
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Speaker 2: driving the overall economy. Is the point that he'll make,
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Speaker 2: even though it is driving markets, that is different from
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Speaker 2: driving the economy.
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Speaker 4: Yeah, this one is tough because he framed his argument
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Speaker 4: based on GDP growth, which I get it, that's fair.
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Speaker 4: That's where you try to assess how the economy is
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Speaker 4: growing and what it's generating in terms of products and services.
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Speaker 4: And the tricky thing with the equation is so much
5:29
Speaker 4: of the technology we end up importing its end products.
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Speaker 4: So in Vidia, for example, designs a chip that's ultimately
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Speaker 4: manufactured in Taiwan that's probably imported back here to service
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Speaker 4: data centers, so it kind of comes up in the
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Speaker 4: ledger as an import rather than though they created some
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Speaker 4: of the design value domestically. That's what's kind of fudging
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Speaker 4: the numbers a little bit. So that's that's one side
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Speaker 4: of the equation. The other is I don't think we're
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Speaker 4: seeing the full scale on the investment part of GDP.
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Speaker 4: So GDP to break it down two thirds of its
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Speaker 4: consumer spending, maybe a little bit more. Then the other
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Speaker 4: components are investment and and that can take all shapes
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Speaker 4: and forms government spending and the net between imports and
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Speaker 4: exports and so on the investment side. With all this
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Speaker 4: data center commitment, I think what we're at four hundred
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Speaker 4: billion for twenty twenty six and projected commitment for capital,
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Speaker 4: I feel like we're not perhaps seeing some of that
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Speaker 4: trickle through to some of this data that he's looking at.
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Speaker 4: Is that a fair rebuttal to make?
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Speaker 2: Yeah, I think in some respects. I mean, ultimately, look,
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Speaker 2: when we talk about the places where AI can be
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Speaker 2: influencing the economy right now, the data center construction and
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Speaker 2: things like that is something that we've obviously covered. The
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Speaker 2: place where I think we still don't have anything conclusively
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Speaker 2: showing that it's causing an impact is an employment yeah,
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Speaker 2: where yes, you get these anecdotes that have popped up
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Speaker 2: predominantly in the tech industry, but even in some other
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Speaker 2: places you're starting to see him now, which does make
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Speaker 2: me think that, yeah, it's it's likely over the next
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Speaker 2: three to five years that you start to see AI
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Speaker 2: having a negative impact unemployment as more companies figure out
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Speaker 2: how to use it to replace in particular kind of
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Speaker 2: entry level job functions and things along those lines. So
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Speaker 2: I think that you could see that becoming you know,
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Speaker 2: more of a thing. And I guess where where I
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Speaker 2: get to is the same place that I've been, which is, yeah,
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Speaker 2: I know that there are you know, eight hundred million
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Speaker 2: people with chat, GPT you know user names now or
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Speaker 2: you know whatever you like, weekly users, weekly users, So
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Speaker 2: I know there's you know, almost a billion people world
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Speaker 2: wide that are using it. I know that you're seeing
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Speaker 2: more and more people using AI on a daily basis,
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Speaker 2: but ultimately it's not clear to me that it's generating
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Speaker 2: any kind of meaningful revenue at the moment. I mean,
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Speaker 2: open AI for all of the hype and everything, thirteen
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Speaker 2: Pace do like thirteen billion dollars in revenue on an
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Speaker 2: annual basis. So you kind of look at this and
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Speaker 2: you say, yeah, I get to the same place I've
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Speaker 2: been for a while. Now we're all gonna be using
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Speaker 2: AI way more. Five years from now, there's gonna be
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Speaker 2: a lot more spending on AI as a result of that.
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Speaker 2: It's unclear to me exactly who ends up being, you know,
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Speaker 2: the overall beneficiaries. But right now, both the producers of
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Speaker 2: the equipment, the producers of the technology, and the users
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Speaker 2: of the technology are being priced in as winners, and the.
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Speaker 4: Energy providers to again some PROTHI neiss.
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Speaker 2: And we're not all gonna be winners. No, like someone
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Speaker 2: always loses with new technologies. When when the internal combustion
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Speaker 2: engine was invented, the horse and buggy dudes were like,
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Speaker 2: oh crap, we're done. Like we're done.
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Speaker 4: We better learn this.
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Speaker 2: When the telephone was invented, the people that you know
8:45
Speaker 2: delivered telegrams, you know, they were you know, out of business.
8:50
Speaker 2: When when the stone tablet makers saw the printing press,
8:52
Speaker 2: they said, oh no, what are we gonna do. We're
8:57
Speaker 2: not No one's gonna want us carve in anything anymore.
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Speaker 2: They started making statues and stuff. Instead, they turned into artists.
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Speaker 2: It's not actually how it happened, but you know, one
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Speaker 2: can one can discuss. But this also then gets us to, hey,
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Speaker 2: is AI actually, like, are our companies and people actually
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Speaker 2: is interested at spending money on AI as the AI
9:25
Speaker 2: companies want you to believe they are. And I want
9:29
Speaker 2: to take a quick break, and then I want to
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Speaker 2: answer that question next, because all you hear from open
9:34
Speaker 2: AI and Microsoft and this and that is oh like
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Speaker 2: these are you know, life changing, you know, company changing
9:40
Speaker 2: technologies and everyone's gonna need them, and this and that,
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Speaker 2: And I've got my latest piece of evidence that maybe
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Speaker 2: that's not the case. Quick break, we'll discuss that. And
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Speaker 2: So every AI company out there is telling you about
11:45
Speaker 2: the amazing things that you can do with AI. It's
11:48
Speaker 2: gonna revolutionize coding. Man. Oh no, it's it's not just
11:54
Speaker 2: gonna revolutionize coding. It's gonna you're gonna be able to
11:57
Speaker 2: fire half your workforce and replace them with computers. Oh
12:02
Speaker 2: like okay, Like you know, and CEOs are leaning in
12:05
Speaker 2: like yes, tell me more, like tell me and so
12:10
Speaker 2: like you're kind of going down this path. And you
12:12
Speaker 2: see this, you know all these news stories about it,
12:14
Speaker 2: and it's like, AI is gonna do things we could
12:16
Speaker 2: never dream of. AI is gonna do you know, these
12:19
Speaker 2: amazing things. It's gonna make the world change. It's gonna
12:22
Speaker 2: be totally different. And then Sam Altman comes out with
12:25
Speaker 2: an ex post yesterday at twelve oh two pm. Hey,
12:28
Speaker 2: we're gonna make some AI porn about time?
12:34
Speaker 1: What could go wrong?
12:35
Speaker 2: Chuck quote We made chat GPT pretty restrictive to make
12:38
Speaker 2: sure we were being careful with mental health issues. Unquote.
12:43
Speaker 2: Jerry's still out on that even think that you're sure
12:46
Speaker 2: those facts are in evidence, Sam, But let's continue. We
12:49
Speaker 2: realized this made it less useful enjoyable to many users
12:52
Speaker 2: who had no mental health problems, but given the seriousness
12:56
Speaker 2: of the issue, we wanted to get this right. I'm
12:57
Speaker 2: sure you've gotten it right, Samuel. Now that we've been
13:00
Speaker 2: able to mitigate the serious mental health issues and have
13:03
Speaker 2: new tools, okay, we're gonna be able to safely relax
13:07
Speaker 2: the restrictions in most cases in December, as we roll
13:11
Speaker 2: out age gating more fully, and as part of our
13:13
Speaker 2: treat adult users like adults principle, we will allow even
13:16
Speaker 2: more like erotica for verified adults. So, couple things that
13:23
Speaker 2: I know about business. When your core business isn't making.
13:27
Speaker 4: It be what I know about erotica, it's like, oh God,
13:31
Speaker 4: I hope we don't go there.
13:33
Speaker 1: Now.
13:33
Speaker 2: A couple things that I know about business. The only
13:36
Speaker 2: way that you decide that you need to keep people
13:38
Speaker 2: enticed to coming back because of sex is when your
13:42
Speaker 2: core business isn't doing what you want it to do. Okay,
13:47
Speaker 2: people don't realize like everyone everyone knows about like OnlyFans, now, yeah,
13:52
Speaker 2: OnlyFans didn't start out with like a bunch of like
13:55
Speaker 2: erotic you know, performers that were like show. It was
13:58
Speaker 2: supposed to be like something if you were like a
14:00
Speaker 2: fan of whatever, and then it turned out, hey, people
14:03
Speaker 2: just really wanted to like pay to talk to naked people.
14:06
Speaker 4: Like a play on cameo bas like yeah, okay.
14:09
Speaker 2: Basically, or like hey, here's a way that you can
14:11
Speaker 2: like pay people that you like, really like so that
14:13
Speaker 2: you can talk to Like, yes, it'll be like you
14:16
Speaker 2: could have like real conversations. If you were a fan
14:18
Speaker 2: of the Red Sox, Yeah, it'd be like, hey, like
14:22
Speaker 2: you know, Saydan Rafaela is gonna you know, show up
14:25
Speaker 2: and have you know, a twenty minute conversation with fans
14:27
Speaker 2: or something like that. So when Sam Altman's like, yeah,
14:31
Speaker 2: we're gonna start making a push into erotica in two months,
14:36
Speaker 2: it tells me they don't think they don't actually have
14:39
Speaker 2: the products they think they do.
14:41
Speaker 4: I interpreted a little bit differently, where what you've heard
14:45
Speaker 4: over the course of the last few weeks is they
14:47
Speaker 4: have committed hundreds of billions of dollars into investment through
14:51
Speaker 4: all these deals that I can barely keep track of.
14:53
Speaker 4: I have to keep reading about him to figure out
14:55
Speaker 4: how many arrangements they've made. It's this big circular loop
14:57
Speaker 4: or the spider Man meme, where like all these big
14:59
Speaker 4: tech come me user's pointing at each other, spending a
15:02
Speaker 4: ton of money building out all these data centers, but ultimately,
15:05
Speaker 4: as a result of that huge investment, they are put
15:07
Speaker 4: in all their chips in the middle, and this needs
15:10
Speaker 4: to work, and it needs to work really fast. And
15:12
Speaker 4: what I think they're doing by this move is maybe
15:15
Speaker 4: you're right. Maybe they're concerned that at some point there's
15:18
Speaker 4: gonna be a lot of skepticism as to how much
15:21
Speaker 4: revenue are you generating versus how much you're spending. And
15:24
Speaker 4: all this investment, I think they're just open up the
15:27
Speaker 4: doors to anything that they can get their hands on
15:29
Speaker 4: to try and get further and further adoption in all
15:33
Speaker 4: areas and crevices of the world to justify how transformational
15:38
Speaker 4: their technology is. I view it more that way. I
15:41
Speaker 4: guess there's some desperation in that too. It's like it's
15:45
Speaker 4: really him ignitting. We need to make this work, and
15:47
Speaker 4: we need to make it work really fast. So what
15:50
Speaker 4: I see as a big concern is they're gonna put
15:53
Speaker 4: a lot of these guardrails down really damn quick because
15:56
Speaker 4: they need to get everything work in hyper speed to
16:00
Speaker 4: justify the amount of money they're spending.
16:01
Speaker 2: Does that maybe, I guess The other thing that makes
16:06
Speaker 2: me really question this is it was only a couple
16:08
Speaker 2: months ago in July when Altman was like, hey, we
16:14
Speaker 2: quote haven't put a sex spot avatar in chat GPT
16:17
Speaker 2: yet as a positive when comparing it to SO, I like,
16:22
Speaker 2: I look at this and to me, honestly, I think
16:28
Speaker 2: that you lose any high ground in talking about like,
16:30
Speaker 2: oh AI is going to do all these interesting things
16:33
Speaker 2: when now you're just like, we want to make AI
16:37
Speaker 2: able to you know, have sex chats with the you know,
16:41
Speaker 2: it's just kind of like, what are we actually doing here?
16:44
Speaker 2: Is AI actually this transformative technology or are we just
16:48
Speaker 2: a bunch of horn dogs that you're going to try
16:50
Speaker 2: to make money off of? You know, like this this
16:55
Speaker 2: is where I this, This is where I'm at right now.
17:00
Speaker 2: So I gotta tell you, especially given the fact that
17:06
Speaker 2: the stuff that it has come out in the last
17:08
Speaker 2: month or two about how little control there is over
17:11
Speaker 2: what chad GPT will tell you if you really push it. Man,
17:16
Speaker 2: this doesn't feel good. And this is before you even
17:18
Speaker 2: get to Hey, they just rolled out their second version
17:20
Speaker 2: of SORA, which is the AI Video Generator, and boy,
17:26
Speaker 2: do you believe there are gonna be some really nasty
17:29
Speaker 2: things that happen there if you start allowing for you know,
17:32
Speaker 2: erotic content generation, uh with you know whatever users like I,
17:38
Speaker 2: I can't tell you how I knew we were heading
17:42
Speaker 2: in this direction because like this is always where it goes. Yeah,
17:46
Speaker 2: but man, if they're like, I wouldn't trust Sam Altman's
17:52
Speaker 2: company to like, I wouldn't trust them to do I
17:58
Speaker 2: wouldn't trust them to like operate a lemon aid stand
18:00
Speaker 2: quite honestly on their own. And now you're like, hey,
18:03
Speaker 2: users can like in December januate erotic content of their choosing.
18:09
Speaker 2: Oh yeah, that's gonna end really well.
18:11
Speaker 4: But Chuck, they're a nonprofit.
18:15
Speaker 2: That's just because they can't make a profit, you know,
18:17
Speaker 2: to be fair, that doesn't mean no profit. Usually that
18:21
Speaker 2: just means no, we're not gonna keep it all jokes aside.
18:23
Speaker 2: I think two things can be true.
18:25
Speaker 4: Where probably a lot of this stuff we're gonna reach,
18:28
Speaker 4: you know, frothy valuations, bubble territory. But I do think
18:32
Speaker 4: that the technology not next year, but five or ten
18:35
Speaker 4: years from now. You can make the argument that there
18:38
Speaker 4: are the seedings of it being transformative.
18:41
Speaker 2: I still am going to believe that just I want to.
18:47
Speaker 2: But Paul, they're pivoting to porn that that's never a
18:52
Speaker 2: good thing like that. That's never like, yes, like we
18:56
Speaker 2: have a business model that's reliable, you know, like Apple
19:00
Speaker 2: never had to be like, well people aren't buying iPhones.
19:05
Speaker 2: Let's you know, like what, I don't even.
19:07
Speaker 4: Know how you would like your Google really didn't have
19:09
Speaker 4: to go that way if you think about because that's
19:11
Speaker 4: like a similar comparison and surge of use, right, because
19:13
Speaker 4: that's how Google made all already, is being the front
19:15
Speaker 4: door of the Internet everyone logging and searching and they
19:18
Speaker 4: could kind of hold their ground to in YouTube and
19:21
Speaker 4: other is not really incorporate.
19:22
Speaker 2: That these guys haven't even made it three years.
19:25
Speaker 4: Well yeah, since they searched onto the scene.
19:27
Speaker 2: Let's take a quick break and when we come back,
19:29
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Speaker 1: Financial Exchange Radio Network.
19:57
Speaker 3: Market's in positive territory despite the bat back and forth
20:00
Speaker 3: trade threats between the US and China, as investors are
20:04
Speaker 3: encouraged by a new batch of strong third quarter bank earnings.
20:08
Speaker 3: Right now, the Dow is up about a half a percent,
20:11
Speaker 3: or two hundred and nine points, SMP five hundred is
20:14
Speaker 3: up three quarters of a percent, or forty nine points higher,
20:18
Speaker 3: Nasdaq up one percent or two hundred and twelve points,
20:21
Speaker 3: Russell two thousand and up over one percent. Ten year
20:24
Speaker 3: Treasure reeled down one basis point at four point zero
20:28
Speaker 3: one one percent, and crude oil down about a half
20:32
Speaker 3: a percent, trading at fifty eight dollars in thirty six
20:34
Speaker 3: cents a barrel. Similar to its peers, Bank of America
20:38
Speaker 3: had a solid third quarter, driven by stronger than expected
20:41
Speaker 3: investment banking revenue. The bank said its profit climb twenty
20:45
Speaker 3: three percent from a year ago to eight and a
20:47
Speaker 3: half billion dollars. Bank of America shares are up five percent.
20:51
Speaker 3: Morgan Stanley also impressed what with its third quarter results,
20:55
Speaker 3: posting earnings that exceeded expectations by the largest margin in
21:00
Speaker 3: nearly five years. The bank saw its profit jump forty
21:04
Speaker 3: five percent from a year ago to four point six
21:06
Speaker 3: billion dollars. Morgan Stanley shares are up six percent. Meanwhile,
21:11
Speaker 3: PNC Financial that stock is down four percent, despite the
21:15
Speaker 3: lender logging higher profit and revenue in the previous quarter
21:18
Speaker 3: as it continued adding customers elsewhere. Apple announced new MacBook Pro,
21:24
Speaker 3: iPad Pro, and Vision Pro models with an updated M
21:28
Speaker 3: five chip that allows them to run faster than previous versions.
21:32
Speaker 3: The devices are available available for pre order now in
21:36
Speaker 3: most markets and go on sale October twenty second. Apple
21:39
Speaker 3: shares are up nearly one percent. According to Reuter's Apollo
21:43
Speaker 3: Global Management has offered a new bid to take Papa
21:46
Speaker 3: John's private at sixty four dollars a share. The pizza
21:49
Speaker 3: chain stock is jumping about eight percent on that news,
21:53
Speaker 3: and after today's closing bell, United Airlines will post their
21:57
Speaker 3: third quarter results. I'm Tucker Silva and that is Wall
22:01
Speaker 3: Street Watch And in the previous segment we asked the
22:04
Speaker 3: trivia question, who is Fox's first choice to host their
22:08
Speaker 3: late night talk show in nineteen ninety three? That would
22:12
Speaker 3: be Dolly Parton. Sebastian from Carver, Mass is our winner
22:15
Speaker 3: today taking on the Financial Shane Show T shirt and
22:18
Speaker 3: we play trivia every day here in the Financial Exchange.
22:21
Speaker 3: See complete contest rules at Financial Exchange show dot com.
22:25
Speaker 2: Piece in the Wall Street Journal, the rest of the
22:26
Speaker 2: world is following America's retreat on EV's, and I gotta
22:32
Speaker 2: say I'm not entirely surprised. We've talked for the last
22:34
Speaker 2: several years about Hey, even if you have positive thoughts
22:37
Speaker 2: about EV's, I don't think that you can or should
22:40
Speaker 2: be convinced that, you know, everyone wants to switch to
22:44
Speaker 2: them over the next you know, seven to eight years
22:47
Speaker 2: and lo and behold, that's kind of what we're seeing
22:49
Speaker 2: playing out. This is before you even get to the
22:51
Speaker 2: questions of, hey, how are you gonna build the power
22:54
Speaker 2: generation and transmission capacity to actually charge all those vehicles,
22:58
Speaker 2: which is something that we've noted for the last several
23:00
Speaker 2: years as well.
23:01
Speaker 4: Yeah, you have several things working against the electric vehicle market.
23:05
Speaker 4: All the investment that went into the space was sort
23:08
Speaker 4: of with the prior administration, So you have political landscape changes,
23:13
Speaker 4: the sunsetting of the federal tax credit domestically here, you
23:18
Speaker 4: also have, like you mentioned, the infrastructure build out that
23:21
Speaker 4: was always an area of concern, and I don't know
23:23
Speaker 4: how that all works with now some more demand for
23:27
Speaker 4: AI electricity build out, Like how you balance that with evs.
23:30
Speaker 4: It's just multiple different things where there was clearly overinvestment
23:34
Speaker 4: in twenty twenty one and now it's coming to roosts
23:36
Speaker 4: that there just isn't the requisite demand to back up
23:40
Speaker 4: that over investment. In twenty one plus, you have, like
23:43
Speaker 4: I said, just not the same political landscape behind some
23:48
Speaker 4: of the demand for these vehicles. And then you have
23:51
Speaker 4: China too, is another piece where they're just kind of
23:54
Speaker 4: flooding the European and Central America and South America areas
23:59
Speaker 4: with a lot of supply sort of leading to lessening
24:03
Speaker 4: demand there.
24:04
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25:11
Speaker 2: From the Boston Globe today Recession Washington Post, Washington Post.
25:16
Speaker 2: It's the same thing. Not it has the same font
25:20
Speaker 2: as the Globe. No, this is the Globe.
25:22
Speaker 3: It's the Washington Post, it says twenty twenty five Boston
25:24
Speaker 3: Globe Media Partners. What's the headline, it says twenty twenty
25:29
Speaker 3: five Boston Globe Media Partner. No, No, what's the headline?
25:33
Speaker 2: Oh, it says the Washington Post. Remember when I said that? Yeah,
25:37
Speaker 2: I remember that ago. Okay. But here's the way my
25:40
Speaker 2: brain works is I see something in the stack, and
25:43
Speaker 2: I recognize the font and say, this is where it's
25:45
Speaker 2: from chet GPT under I underlined Washington Post. How often
25:50
Speaker 2: does the Globe pull something from the Post? Often do they?
25:53
Speaker 4: Oh?
25:54
Speaker 3: Same as the New York Times.
25:55
Speaker 2: Okay, coming to you, you know, live from wherever uht
26:00
Speaker 2: warning signs to watch goodbye lipstick, Hello Hamburger Helper. So
26:04
Speaker 2: it's all these different things that you know may or
26:06
Speaker 2: may not point towards a coming recession. Quite honestly, if
26:12
Speaker 2: you're not, like, if you're not someone who has like
26:17
Speaker 2: an accurate way to trade macroeconomic forecast, if you're not
26:21
Speaker 2: a CEO, I don't know that there's much that you
26:25
Speaker 2: need to make of these Like does the average person
26:27
Speaker 2: need to pay attention on a regular basis to how
26:30
Speaker 2: many you know, Class eight trucks are being sold in
26:33
Speaker 2: the US on a yearly basis? No?
26:36
Speaker 1: No.
26:37
Speaker 4: And also I feel like a lot of these predictors
26:40
Speaker 4: that they mentioned here in this article, you're probably already
26:45
Speaker 4: in recession when you're getting some of this stuff. You'll know,
26:47
Speaker 4: like the purchases of Hamburger helper. I guess you know
26:50
Speaker 4: they're saying that sales have ticked up there and thrifting
26:54
Speaker 4: like all these things that would imply that consumers are
26:57
Speaker 4: being a little bit more cost conscious. But but ultimately,
27:00
Speaker 4: if you see these indicators, and I don't think these
27:03
Speaker 4: indicators are clear this instance, like you're gonna know you're
27:06
Speaker 4: in it, and it's you're already gonna kind of miss
27:08
Speaker 4: the warning signs, Like I don't think these are the
27:10
Speaker 4: ones that tell you, okay, we are in it right now.
27:13
Speaker 4: These are going to be after effects when a bigger
27:16
Speaker 4: shock occurs in the economy. It's not these small, more
27:20
Speaker 4: nuanced subjects of Hamburger, helper or thrift shopping that's gonna
27:23
Speaker 4: be the indicator to tell you what's going on.
27:26
Speaker 2: Yeah, the one that I always enjoyed was the men's
27:29
Speaker 2: Underwear Index, which Alan Greenspan was the big nan there.
27:35
Speaker 2: And the whole thing is, hey, look, men by underwear
27:41
Speaker 2: basically like they view them as a necessity during normal
27:44
Speaker 2: economic times, but in a downturn and are like, it's
27:48
Speaker 2: got a couple holes in it, it'll be fine. And
27:51
Speaker 2: so green Span love the underwear indicator just as an example. Now,
27:56
Speaker 2: first of all, I don't think that there's any like
27:58
Speaker 2: publicly available information to like weekly sales of men's underwear,
28:03
Speaker 2: So I don't think you can find this stuff just
28:05
Speaker 2: you know, floating out there in the wild. But you
28:07
Speaker 2: get like some interesting things. I think this stuff's interesting
28:09
Speaker 2: to think about. But I also do keep coming back
28:12
Speaker 2: to hey, if you're always on the lookout for recession,
28:15
Speaker 2: there's always gonna be one indicator that's telling you something
28:18
Speaker 2: bad's coming. And what you're really looking for, not just
28:21
Speaker 2: in recession, but like in anything in life, is not
28:24
Speaker 2: just like one thing that's going on. It's you want
28:26
Speaker 2: clusterings of things, and that tells you what's going on.
28:29
Speaker 2: So if you have a friend or family member that
28:31
Speaker 2: gets laid off, doesn't really tell you anything. If your brother, sister,
28:36
Speaker 2: and uncle have all gotten laid off in the last
28:38
Speaker 2: six months, yeah, that might tell you a little more
28:40
Speaker 2: about what's going on, provided that the three of you
28:42
Speaker 2: don't all work you know, the same factory or something
28:45
Speaker 2: you know. But I'm a big fan of look for clustering.
28:49
Speaker 2: Don't pay attention to any one particular thing with anything
28:52
Speaker 2: in life. You want to look for where you have
28:54
Speaker 2: that clustering happening, because that's when you can spot pivot
28:57
Speaker 2: points and turns and things along those lines. So yeah,
29:02
Speaker 2: that's that's kind of where I am. I think to
29:06
Speaker 2: always be on the lookout for recession, you're gonna be
29:09
Speaker 2: first of all, if you're always looking for it and
29:10
Speaker 2: you're gonna be disappointed nine years out of ten because
29:13
Speaker 2: most of the time there's not a recession.
29:15
Speaker 4: Oh yeah, my dad's been calling for one since twenty twelve.
29:17
Speaker 2: I know people that have been calling for one since
29:19
Speaker 2: two thousand and five. They still don't believe two thousand
29:21
Speaker 2: and eight happen. They're like, no, it's gonna be worse.
29:23
Speaker 2: It's like, okay, well, like you know that there is
29:26
Speaker 2: an incentive for businesses in the government to not have
29:28
Speaker 2: you know, us, go back to the Stone Age. No,
29:31
Speaker 2: like it's gonna happen. Well, okay, you know, if you
29:34
Speaker 2: really believe that, that's fine. But for the rest of us,
29:38
Speaker 2: the recession did happen in two thousand and eight, and
29:40
Speaker 2: it kind of sucked. So let's take a quick break
29:43
Speaker 2: when we return stack Roulette.
29:47
Speaker 1: Here the Financial Exchange every day from eleven to noon,
29:50
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29:53
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30:27
Speaker 3: This year's DAV five k is sold out, but you
30:30
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30:37
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30:41
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30:59
Speaker 4: Paul, what do you got for stack? Rolex check? I
31:01
Speaker 4: want to talk a little bit about podcasts. This is
31:04
Speaker 4: a piece here from the New York Times where Netflix
31:08
Speaker 4: is jumping into podcasts with a Spotify deal. Netflix will
31:12
Speaker 4: now show video versions of sixteen podcasts on sports, culture, entertainment,
31:17
Speaker 4: and true crime. And this is in a deal with
31:21
Speaker 4: Spotify Studios and the Ringer website, which Bill Simmons had
31:25
Speaker 4: started and was acquired by Spotify and twenty twenty. And
31:27
Speaker 4: the reason why I bring up this subject is some trend,
31:31
Speaker 4: this trend that I don't seem to understand is this
31:33
Speaker 4: shift in podcasting to video podcasting where I was always
31:38
Speaker 4: on the impression that pivot to video, that I consume podcasts.
31:43
Speaker 4: I drive around a lot for our job, to different offices,
31:45
Speaker 4: and I'm constantly consuming podcasts. Absolutely love them. It's a
31:48
Speaker 4: great way to kill time in the car. But I
31:50
Speaker 4: was under the impression that everyone else was like me,
31:53
Speaker 4: that you're doing these where I don't have the ability
31:55
Speaker 4: to look at the video when I'm driving because I'm
31:58
Speaker 4: driving a car and the same.
31:59
Speaker 2: Thing up, you can do that I could, but it
32:02
Speaker 2: just wouldn't be the best. It's the cause of like
32:04
Speaker 2: every backup when I'm driving home, it's like, oh, like
32:07
Speaker 2: you rear ended someone in a straightaway, stop watching video
32:10
Speaker 2: in the.
32:10
Speaker 4: Car or forget like me like just driving around like oh,
32:12
Speaker 4: you're working out and uh, you know you have something
32:15
Speaker 4: on to listen to while you're on the treadmill. Whatever
32:17
Speaker 4: the case may be. But it just seems like with
32:19
Speaker 4: this investment in the shift in general, that podcasting is
32:23
Speaker 4: really focusing a lot more on video, And I just wonder,
32:28
Speaker 4: who is you know, so drawn to the video consumption.
32:33
Speaker 4: But I say that and my wife does listen to podcasts.
32:37
Speaker 4: I think the video version on the treadmill, so like
32:40
Speaker 4: she does have the physical presence there to watch. I
32:43
Speaker 4: guess I'm becoming more and more in the minority there
32:46
Speaker 4: with that.
32:47
Speaker 2: So here's the other thing that I think about this,
32:49
Speaker 2: And look, this is the classic. You know, back in
32:52
Speaker 2: twenty fourteen and fifteen, every news organization said, Okay, we
32:57
Speaker 2: got a pivot to video because that's where you know
32:59
Speaker 2: things are going, and it didn't work for them. Ultimately,
33:03
Speaker 2: what I think this is more about is if you
33:07
Speaker 2: look at the dominant form of content consumption by gen z,
33:13
Speaker 2: it is short form real videos, right, TikTok? Facebook, I
33:17
Speaker 2: don't even know what the like is Instagram, reach reels, yep,
33:21
Speaker 2: what's the one on YouTube? What do they call it? Shorts?
33:24
Speaker 2: That is how content is being consumed. Yeah, that's true.
33:28
Speaker 2: Like I am basically a baby boomer at this point
33:31
Speaker 2: in that it's like, oh, like, how cute, Chuck, You're
33:34
Speaker 2: reading tweets like what a loser? Like? Okay, yeah, like
33:38
Speaker 2: I get user. I'm not hip and cool anymore, but
33:42
Speaker 2: that's still how I consume content is through letters and
33:46
Speaker 2: words and numbers. Because I believe that's important. And by
33:50
Speaker 2: the way, you still can't beat the information density of
33:53
Speaker 2: the written word. It's just it's mind blowing how much
33:56
Speaker 2: you can get into a small space that way. But
34:00
Speaker 2: the way that eighteen and twenty five year olds and
34:03
Speaker 2: thirty year olds are consuming content now is through thirty
34:08
Speaker 2: second to ninety second video, right, And I think the
34:11
Speaker 2: podcast are not saying that they want everyone to watch
34:14
Speaker 2: their podcast.
34:14
Speaker 4: They just want the cutouts.
34:15
Speaker 2: Hey, we're making the content anyways. Great. We can take
34:18
Speaker 2: this minute clip and throw it on a reel or
34:20
Speaker 2: something and boom, there you.
34:21
Speaker 4: Go, and it looks esthetically better because they build out
34:24
Speaker 4: a studio that makes the production value look good. Helps
34:26
Speaker 4: with the algorithm. Yeah, I get all that. We had
34:29
Speaker 4: a babysitter over who's in high school who just didn't
34:32
Speaker 4: even turn on the TV the whole night, like after
34:35
Speaker 4: the kids went to bed. It was just on to
34:36
Speaker 4: your point, just on her phone the whole time, scrolling, scrolling,
34:40
Speaker 4: rather than what we would have done, or like my
34:43
Speaker 4: wife would have done, would be, you know, you queue
34:45
Speaker 4: up some sort of TV show. But it was just
34:47
Speaker 4: it's not necessary anymore. And that probably speaks to your
34:49
Speaker 4: point that that's how everyone is consuming media now it's
34:53
Speaker 4: thirty or sixty second clips that might be long, it's
34:55
Speaker 4: probably like five or ten seconds. The attention spend now.
34:58
Speaker 2: Peace from the Wall Street Journal. Chinese criminals. It was
35:00
Speaker 2: made more than a billion dollars from those annoying texts. Uh.
35:04
Speaker 2: And you know this is whether you're talking about like
35:06
Speaker 2: the highway toll payment scams.
35:09
Speaker 4: You know what's driving me insane? Someone from lending some
35:12
Speaker 4: lending company keeps texting me about a personal loan.
35:16
Speaker 2: Why don't you pay it all? I get the voicemail.
35:19
Speaker 4: No, they're asking you if like to further up my
35:21
Speaker 4: interest on personal loan and I do that. You know,
35:23
Speaker 4: delete and report junk in your iPhone doesn't do anything.
35:26
Speaker 4: They keep coming back every single time. I've never asked
35:29
Speaker 4: about a personal loan ever. Yeah, I keep getting this text. Hey,
35:31
Speaker 4: it's Amy just falling up on your personal loan. Bequs
35:33
Speaker 4: want to chat about some more. And I was ready
35:36
Speaker 4: to respond last night. I was so mad. It was
35:37
Speaker 4: the fifth one that I've got. I was close, but
35:40
Speaker 4: I didn't tuck her. But I was scurious.
35:43
Speaker 2: No, no, no, I got a longer story.
35:44
Speaker 1: No.
35:44
Speaker 3: I was just gonna say that I'm fine, because I
35:46
Speaker 3: get like three to four of these scam calls a day,
35:49
Speaker 3: or spam calls a day, phone calls, phone calls that
35:51
Speaker 3: leave a voicemail. Sometimes my phone doesn't even doesn't even ring.
35:55
Speaker 3: It just says, hey, you got a voicemail. It's you know,
35:57
Speaker 3: Lauren from the personal Loan program whatever, you know, And
36:02
Speaker 3: they want you to press nine and call back because
36:05
Speaker 3: then they'll know that your phone number is still active.
36:07
Speaker 3: So don't do anything. They're testing to see if your
36:11
Speaker 3: number is still Yeah.
36:12
Speaker 2: I mean, look, I've been told I can't tell you
36:16
Speaker 2: how many times that my Comcast service is about to
36:18
Speaker 2: be shut off, and I don't even have Comcasts. But
36:20
Speaker 2: look the way they do this is they just throw
36:22
Speaker 2: this out to everyone and hey, if you know, you
36:25
Speaker 2: callarge numbers, now what I do have? That's I think
36:29
Speaker 2: a kind of funny story. And this finally came full circle.
36:32
Speaker 2: I think in the last year. I have a buddy
36:34
Speaker 2: of mine who wasn't on this exact stuff, but he
36:38
Speaker 2: was getting calls from debt collectors on debt that was
36:40
Speaker 2: not his kind of this whole phantom debt thing, where
36:44
Speaker 2: basically he started like calling back and being like, who
36:48
Speaker 2: put my name on your list, like getting like really aggressive.
36:52
Speaker 2: Don't long story short, he was so good at this
36:56
Speaker 2: the I don't know if like the DOJ ended up
36:58
Speaker 2: getting a conviction on the guy who masterminded this whole
37:02
Speaker 2: thing basically because he like tracked it up and then
37:06
Speaker 2: brought all this information to the DOJ and was like
37:09
Speaker 2: this is what you need to do in order to
37:11
Speaker 2: go after these people. Wow. But he basically dedicated three
37:15
Speaker 2: or four years of his life to tracking down these scammers.
37:19
Speaker 2: He lost his job for me, and it ended up
37:23
Speaker 2: it ended up working out. It turned out that like
37:25
Speaker 2: these phantom debt companies, they would just buy these lists
37:28
Speaker 2: of like manipulated fake numbers and everything with the hope
37:31
Speaker 2: that they get something out of it. And it was
37:34
Speaker 2: just this whole scam of you know, frauds on frauds
37:37
Speaker 2: on frauds. And he basically threw a combination of just
37:40
Speaker 2: being like an absolute dog about it and you know,
37:44
Speaker 2: occasionally like being nice to people, being like, hey, I
37:47
Speaker 2: know that you don't really want your life to be
37:49
Speaker 2: like this, like helped me out and like tell me
37:51
Speaker 2: where he got these and like he ended up getting
37:55
Speaker 2: the DOJ to get a conviction because of all the
37:58
Speaker 2: information that he ended up bringing them. When it was
38:01
Speaker 2: all said and done.
38:02
Speaker 4: We could use more of those convictions.
38:03
Speaker 2: I thought that was kind of cool, but again, who
38:05
Speaker 2: wants to dedicate four years of their life to doing
38:08
Speaker 2: that quick break for the rest of the day. We're
38:10
Speaker 2: back tomorrow, more financial exchange. We're gonna be live from
38:14
Speaker 2: the showcase, super Lux and Chestnut Hill. Make sure you
38:17
Speaker 2: tune in.