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Boomers vs. Millennials, Bank Warnings, and a Slowing Job Market · The Financial Exchange Show

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  Speaker 1: and Paul Lane.
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  Speaker 2: Good morning, Welcome back to the Financial Exchange as we
• 1:13
  Speaker 2: kick off earning season, kickoff the week here, and kick
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  Speaker 2: off the blockade of the Strait of Horror moonies by
• 1:20
  Speaker 2: the United States Navy oil prices topping one hundred dollars
• 1:24
  Speaker 2: a barrel as that as I mentioned, blockade or partial
• 1:27
  Speaker 2: blockade depending on who you ask, kicked off about an
• 1:31
  Speaker 2: hour ago. West Texas crewed for May contracts sitting at
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  Speaker 2: one hundred and two dollars a barrel, up five point
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  Speaker 2: six percent this morning. In bonds, we've got yields moving
• 1:42
  Speaker 2: up slightly, not substantially, to four point three two nine
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  Speaker 2: percent on the US Tenure Treasury, and we've got a
• 1:49
  Speaker 2: mixed market out there, Goldman Sacks bringing the Dow down
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  Speaker 2: with it, which is off. Let's take a look at
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  Speaker 2: Goldman's Sacks just a moment here, down three percent in
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  Speaker 2: early trading, bringing the Dow down about half of a percent.
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  Speaker 2: SMP is flat for the day, NASDAC up a quarter
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  Speaker 2: of percent. Those Goldman earnings that were released just this
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  Speaker 2: morning indicated that the company was taking substantial loan loss provisions,
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  Speaker 2: meaning they have to account for what could go bad
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  Speaker 2: on the lending side of things, and it was the
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  Speaker 2: biggest year over year increase in those provisions since twenty twenty,
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  Speaker 2: So some reading into that as some negative outlook for
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  Speaker 2: its own business. We will see you again. They did
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  Speaker 2: this in twenty twenty and then there weren't really any
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  Speaker 2: loan losses to speak of. So it doesn't mean that
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  Speaker 2: something will come true, but you know, in indication of
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  Speaker 2: some negativity from the executive team there in terms of
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  Speaker 2: what they are looking at. Taking a look here, do
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  Speaker 2: want to check in on mortgage rates and gas prices
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  Speaker 2: as we continue to see the surge taking off here
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  Speaker 2: in oil prices. On gasoline front, we continue to see
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  Speaker 2: the climb there, national average for a gallon of gas
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  Speaker 2: sitting at four dollars twelve cents. That's as of as
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  Speaker 2: of today according to Triple A. And then over to
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  Speaker 2: mortgage rates, where we had started to see a bit
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  Speaker 2: of relief last week, we're sitting now at six point
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  Speaker 2: four percent on that fixed rate thirty year mortgage on average,
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  Speaker 2: which again has come down from the six to sixth
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  Speaker 2: range where we were just a few weeks ago, but
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  Speaker 2: still substantially higher than prior to the events in Iran. Paul,
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  Speaker 2: anything else catching your eye in terms of markets today.
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  Speaker 3: No, I think you hit on the major ones, Mike.
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  Speaker 4: So the big.
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  Speaker 2: News for the rest of this week other than the
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  Speaker 2: Middle East, which will pretty much override anything else that
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  Speaker 2: happens here domestically if something does happen, but bank earnings
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  Speaker 2: are on, you know, on this week we've got JP Morgan, Chase, Wells,
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  Speaker 2: Fargo City Bank, Black Rock, Bank of America. Did I
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  Speaker 2: fail to mention any bank names. I don't think so.
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  Speaker 2: I'm sure there are others that are reporting that I
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  Speaker 2: don't care about quite as much. We will be hearing
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  Speaker 2: from Netflix later this week, and then the following week
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  Speaker 2: we kick off even bigger companies with a few defense
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  Speaker 2: companies reporting earnings. We'll have Tesla reporting. So a lot
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  Speaker 2: going on over the next few weeks, just besides the
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  Speaker 2: constant news flow out of the Middle East and what
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  Speaker 2: might be happening next there. Paul Peace from the Wall
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  Speaker 2: Street Journal, economy is growing, jobs are not, And we've
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  Speaker 2: had this conversation a few times. But the journal or
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  Speaker 2: the authors there make the case that maybe that's all right,
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  Speaker 2: Maybe that's not the end of the world. If we
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  Speaker 2: are at a place where job growth is not happening.
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  Speaker 2: What's the main compelling case that they have.
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  Speaker 3: Basically, there's two lovers that you can kind of use
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  Speaker 3: to grow the economy mic and job growth is one
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  Speaker 3: of the biggest ones that usually is the most easy
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  Speaker 3: and reliant for us to lean on. However, the other
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  Speaker 3: one is productivity as the other level. If you are
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  Speaker 3: more productive per employee and you're able to generate more
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  Speaker 3: goods and services than you were previously, that can lead
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  Speaker 3: to keeping costs down and it's another way to sort
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  Speaker 3: of keep the economy on track and keep it moving.
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  Speaker 3: There is some skepticism that should be levied on this
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  Speaker 3: idea that productivity can make up for the fact that
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  Speaker 3: we know the labor dynamics that we sit at in
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  Speaker 3: this moment where baby boomers are retiring in droves. There's
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  Speaker 3: less immigration, so the labor supply has been constrained. So
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  Speaker 3: this addition of hundreds of thousands of jobs on a
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  Speaker 3: monthly basis, we just haven't really been seeing it. The
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  Speaker 3: counter to that is that, hey, because we have a
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  Speaker 3: plateauing labor market, we don't need to add as many
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  Speaker 3: new jobs as we did back in the seventies, where
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  Speaker 3: these baby boomers were starting their work career, we needed
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  Speaker 3: about one hundred and eighty five thousand jobs a month
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  Speaker 3: to be added. We now sit in a period of
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  Speaker 3: time where we could only need anywhere from ten to
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  Speaker 3: twenty thousand new jobs on a monthly basis, a really
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  Speaker 3: low hurdle to clear. You'd make up with some of
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  Speaker 3: those gains by being more productive. However, when you're talking
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  Speaker 3: about productivity, we have seen output per hour rise to
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  Speaker 3: about two percent over the last year. That's far higher
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  Speaker 3: than where we saw between seven and twenty nineteen, where
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  Speaker 3: it's sat at one and a half percent. But when
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  Speaker 3: ever you look at productivity gains, it's really spotty. It's cyclical.
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  Speaker 3: It's not something that is a guarantee year to year.
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  Speaker 3: Of course, artificial intelligence is probably in most people's minds
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  Speaker 3: as I go through this explanation, but it's too early
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  Speaker 3: to really get a sense for how much productivity gains
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  Speaker 3: we're seeing from AI. There's some arguments that have been
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  Speaker 3: made that we are seeing some, but it's not something
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  Speaker 3: that you can really count on. You need to train
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  Speaker 3: a workforce. There's a lot of reorganizing that needs to
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  Speaker 3: go on before you see these huge upticks and productivity,
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  Speaker 3: and they can fall off very quickly. So that is
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  Speaker 3: the counterpoint that's made is that, hey, it might we
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  Speaker 3: might be okay because productivity may make up for this,
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  Speaker 3: but if you study history, it's hard to do that
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  Speaker 3: over a sustained period of time, productivity gains.
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  Speaker 2: That is also point out a couple of things about
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  Speaker 2: all this. So yeah, the math can kind of work
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  Speaker 2: where you don't need to grow the labor force and
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  Speaker 2: can still have a productive, well functioning economy.
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  Speaker 4: Go look at Japan, right, Like.
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  Speaker 2: You can't say anything positive about the Japanese stock market,
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  Speaker 2: but you also can't look at Japan and say that
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  Speaker 2: the quality of life there is abysmal, right, generating high
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  Speaker 2: quality of life, long life expectancy. You know, average income
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  Speaker 2: by the average wealth that is quite healthy, and so
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  Speaker 2: you know a lot of things that can be drawn
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  Speaker 2: there that don't make it a complete disaster scenario. A
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  Speaker 2: few things concerned me. One, our financial systems in the
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  Speaker 2: United States are not designed for a labor pool that
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  Speaker 2: stops growing, so we already have massive problems with social
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  Speaker 2: security and Medicare funding. You will need to completely revamp
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  Speaker 2: that formula. If the assumption is that the labor market
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  Speaker 2: doesn't grow over the long term because we do not
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  Speaker 2: have an increasing population. So point number one, they're like, yeah,
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  Speaker 2: you cut social Security by thirty percent, and all of
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  Speaker 2: those things I said about a stable economy go away.
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  Speaker 4: That's not the actual cut.
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  Speaker 2: What is it, twenty percent cut to social security benefits
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  Speaker 2: if this all fails, you know, seven years from now. Yeah,
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  Speaker 2: so you know, any degree of cut to social security
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  Speaker 2: or lack of ability to reorganize how it's funded, and
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  Speaker 2: all bets are off. The other piece that I don't
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  Speaker 2: think can be ignored is there's you know, a lot
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  Speaker 2: being said about entry level employment and the difficulties.
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  Speaker 4: New college grads have finding work.
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  Speaker 2: And I don't think we're seeing something that's as bad
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  Speaker 2: as we've seen in other parts of time, you know,
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  Speaker 2: twenty ten post Great Recession included.
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  Speaker 4: But what I will say is when societies.
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  Speaker 2: Don't find gainful employment for their youngest members of their society, things.
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  Speaker 4: Don't go well.
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  Speaker 2: And I'm like, you know, on the very violent side
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  Speaker 2: of things, we can talk about the Arab Spring and
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  Speaker 2: the undercurrents there and what happened there, but even just domestically,
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  Speaker 2: like think about Occupy Wall Street. I know, There are
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  Speaker 2: a lot of high minded ideas about why that was occurring,
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  Speaker 2: but in my opinion, why it occurred is because there
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  Speaker 2: were a whole bunch of eighteen to twenty five year
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  Speaker 2: olds who.
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  Speaker 4: Couldn't find a job.
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  Speaker 2: Right, you don't generally have political unrest when unemployment is
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  Speaker 2: well under five percent, And so that is just one
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  Speaker 2: area that I want to you know, focus on. I'm
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  Speaker 2: not saying that there'll be riots in the street if
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  Speaker 2: we get the unemployment rate for young people too high,
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  Speaker 2: but you go take a look at a lot of
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  Speaker 2: different events throughout history, and a lot of them involve
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  Speaker 2: protests among young people, and they all oftentimes happen to
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  Speaker 2: coincide during real times of economic unrest for those same
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  Speaker 2: young people. And so yeah, you got to be aware
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  Speaker 2: of that.
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  Speaker 3: And the end it's really can delay household formation too,
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  Speaker 3: where if you don't get that entry level job, it
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  Speaker 3: delays is your career progression. And we already have a
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  Speaker 3: population that is dwindling or not growing as fast as
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  Speaker 3: it used to, and so now you put these potential
• 10:08
  Speaker 3: new entrants into the workforce in a more difficult economic
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  Speaker 3: bind that delays that big you know, first time home
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  Speaker 3: purchase and all of the household formation factors that are
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  Speaker 3: critical to keep the economy going.
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  Speaker 4: Let's take quick break.
• 10:20
  Speaker 2: When we come back, we're playing a little trivia, and
• 10:23
  Speaker 2: then we are going to solve the age old debate
• 10:27
  Speaker 2: of who had it harder, Millennials or boomers. So if
• 10:30
  Speaker 2: you want to voice your opinion, you can text the
• 10:32
  Speaker 2: show at six one seven three six two thirteen eighty five.
• 10:35
  Speaker 2: But the Wall Street Journal apparently already answered the question,
• 10:37
  Speaker 2: so we're going to tackle that next here on the
• 10:39
  Speaker 2: Financial Exchange.
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  Speaker 4: All right.
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  Speaker 5: Time for trivia here on the Financial Exchange. Today's Thomas
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  Speaker 5: Jefferson's birthday, the third US president at a long term
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• 12:06
  Speaker 2: All right, the age old question, Paul, did Millennials or
• 12:09
  Speaker 2: boomers have it harder? And I'm going to start by
• 12:11
  Speaker 2: saying this is a preposterous question, And obviously baby boomers
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  Speaker 2: had it harder, And we can talk about the Wall
• 12:19
  Speaker 2: Street Journal's piece here, but the entire premise of society
• 12:23
  Speaker 2: developing is that the next generation has it easier than
• 12:27
  Speaker 2: the previous one. Millennials definitely had it easier than Boomers,
• 12:31
  Speaker 2: who had it easier than the greatest generation, who had
• 12:34
  Speaker 2: it a hell of a lot easier than all those
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  Speaker 2: poor SAPs that fought in the Civil War. That's the
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  Speaker 2: idea of a society improving and it shouldn't even be debated.
• 12:44
  Speaker 2: But I'll just define it with one statistic. I don't
• 12:46
  Speaker 2: think we even need to go much further than this,
• 12:50
  Speaker 2: four percent of millennials served in the military or are
• 12:55
  Speaker 2: currently serving. Millennial men specifically, would either of you care
• 12:59
  Speaker 2: to get what percentage of baby boomer men served in
• 13:02
  Speaker 2: the military twenty five forty wow, ten times more via
• 13:09
  Speaker 2: the draft during the Vietnam War, that statistics according to
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  Speaker 2: The New York Times. I'd like, what do we even
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  Speaker 2: have to compare to here?
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  Speaker 4: Right?
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  Speaker 2: Like, this is not even close to a judgment call.
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  Speaker 2: We can talk about the economic disparities, and there is
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  Speaker 2: certainly something to be said economically about how you know,
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  Speaker 2: baby boomers happened to come into a labor market and
• 13:33
  Speaker 2: a time of age that was more beneficial for buying
• 13:36
  Speaker 2: a home, and you know, the stock market growth during
• 13:39
  Speaker 2: the thirty year period that defined their key working years
• 13:43
  Speaker 2: was you know, really transformative. But I don't know, man,
• 13:47
  Speaker 2: I have a really tough time saying that my generation
• 13:51
  Speaker 2: had it harder than Baby boomers when four percent of
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  Speaker 2: us served in the military compared to forty percent of
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  Speaker 2: baby boomers, Like, really tough for me to make that argument.
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  Speaker 4: We got a counter argument for me, Paul.
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  Speaker 3: No, I don't have a counter argument. I don't want
• 14:06
  Speaker 3: the pitchforks and torches to come out against me. So
• 14:10
  Speaker 3: I'm not going to argue against you there. And I'm
• 14:13
  Speaker 3: on board with you. And you go back to World
• 14:15
  Speaker 3: War two generation, like you said, the greatest generation, it's
• 14:18
  Speaker 3: a whole different ballgame. The argument has to be on
• 14:20
  Speaker 3: the playing field mic of economic conditions, right, because you're right,
• 14:23
  Speaker 3: you know, from societal standpoint of course, that was far
• 14:26
  Speaker 3: more challenging and you have to.
• 14:28
  Speaker 4: Deal with the AIDS epidemic exact.
• 14:30
  Speaker 3: But let's if we look at the numbers of inflation
• 14:34
  Speaker 3: and what are the costs of different things. And I'm
• 14:36
  Speaker 3: not saying that there's a clear winner one way or another.
• 14:38
  Speaker 3: I think it's interesting what the Wall Street Journal lined
• 14:40
  Speaker 3: out here. One big loser of millennials are where they
• 14:43
  Speaker 3: have a bigger hill to stand on in terms of
• 14:46
  Speaker 3: the difficulty as calluse tuition fees. But I guess you
• 14:49
  Speaker 3: could make the argument that their parents were some of
• 14:51
  Speaker 3: the ones who buried a lot of that burn. But
• 14:53
  Speaker 3: of course millennials did two infirms of student loan debt,
• 14:57
  Speaker 3: the cost of things that we've seen for daycare and
• 15:00
  Speaker 3: school that's gone up pretty substantially, as well, new vehicles,
• 15:03
  Speaker 3: stuff like that. Some of the inflationary impacts the housing market, too,
• 15:07
  Speaker 3: is where they would have some more leg to stand on.
• 15:09
  Speaker 3: Now listeners might be saying, wait a minute, Paul, what
• 15:11
  Speaker 3: are you talking about. We had mortgage rates that peaked
• 15:13
  Speaker 3: at eighteen percent. You've got a lot of these newer
• 15:15
  Speaker 3: buyers sitting at a cozy five, six, seven percent. But
• 15:18
  Speaker 3: the price increases that we sell over the last five years,
• 15:21
  Speaker 3: where houses went up fifty percent from twenty twenty to
• 15:24
  Speaker 3: twenty twenty five, that has outweighed the impact from interest
• 15:28
  Speaker 3: rates back in the nineteen eighties. So again, I don't
• 15:31
  Speaker 3: know if there's a slam dunk winner one way or another,
• 15:33
  Speaker 3: but there are some factors that you could point to
• 15:36
  Speaker 3: in the millennial camp. There are some factors that you
• 15:38
  Speaker 3: could point to on the baby boomer side of things too,
• 15:41
  Speaker 3: with a better labor market, and I.
• 15:42
  Speaker 2: Think the easiest thing you can point to would be
• 15:45
  Speaker 2: to say that to get a job that pays a
• 15:49
  Speaker 2: similar inflation adjusted wage today, you need a higher degree
• 15:55
  Speaker 2: of education than you did fifty years ago. Right, That's
• 15:59
  Speaker 2: the most compelling case I can come up with is, Yeah,
• 16:02
  Speaker 2: if I want to, you know, earn a middle class living,
• 16:07
  Speaker 2: it is tougher to do today, to do without some
• 16:10
  Speaker 2: degree of higher education or trade skills than it was
• 16:14
  Speaker 2: fifty years ago, when there were still you know, a
• 16:17
  Speaker 2: good number of union manufacturing jobs that didn't require a
• 16:21
  Speaker 2: ton of extra work. But then you know, again thinking
• 16:23
  Speaker 2: about the other side, they're like, Okay, then I worked
• 16:25
  Speaker 2: on a factory floor and you know, also had a
• 16:30
  Speaker 2: pretty tough go of things at different stages of life.
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  Speaker 2: So yeah, I generally am of the opinion that each
• 16:39
  Speaker 2: generation has it a little bit easier than the previous generation.
• 16:43
  Speaker 2: And if you don't want that to happen, like and
• 16:46
  Speaker 2: if you're poop pooing that or if you're cheering for
• 16:48
  Speaker 2: that to not be the case, you're pretty much cheering
• 16:52
  Speaker 2: for like the demise of American productivity.
• 16:56
  Speaker 4: You don't want that to happen.
• 16:58
  Speaker 3: The US to come you lies on that. And if
• 17:00
  Speaker 3: you're an investor in the stock market, you want to
• 17:02
  Speaker 3: see continued productivity growth because that keeps companies moving forward,
• 17:06
  Speaker 3: growing their earnings, and as a result, your share in
• 17:09
  Speaker 3: them growing. That's what we need to keep things moving.
• 17:13
  Speaker 4: So Boomers, you won this time. That's uh, we'll be back. Yeah.
• 17:17
  Speaker 5: Text out of the nine to seven eight area code
• 17:20
  Speaker 5: to the number texting A six one seven eighty five says, is.
• 17:24
  Speaker 4: This even a question?
• 17:25
  Speaker 5: Millennials in their debt load take the cake?
• 17:28
  Speaker 2: Ooh, Okays in their debtload, taking the cake?
• 17:31
  Speaker 4: Okay again, no draft.
• 17:35
  Speaker 3: But economic let's just keep it economic financial exchange, right, yeah,
• 17:40
  Speaker 3: Wall Street Journal.
• 17:44
  Speaker 2: I don't know, it's even tough there for me to
• 17:46
  Speaker 2: come up with a real compelling argument. Yes, you do
• 17:49
  Speaker 2: do have a massive additional debt load that that baby
• 17:54
  Speaker 2: boomers did not get faced with, and so that is
• 17:58
  Speaker 2: an extreme challenge. You know, let's think of some of
• 18:02
  Speaker 2: the biggest little financial CRISI events in our lives.
• 18:05
  Speaker 4: Though.
• 18:05
  Speaker 2: Was the Great Recession more impactful on boomers or millennials?
• 18:10
  Speaker 4: I'm going boomers.
• 18:11
  Speaker 3: Boomers? Yeah, some of us were hiding in school.
• 18:14
  Speaker 4: Right, like you know, yeah, I just I don't know.
• 18:17
  Speaker 2: I stack all this stuff up, and there is a
• 18:19
  Speaker 2: very compelling argument that today and for millennials, you were
• 18:25
  Speaker 2: in many ways encouraged and would have otherwise been challenged
• 18:30
  Speaker 2: had you not pursued a higher level of education than
• 18:33
  Speaker 2: the previous group, and the costs for that education have
• 18:36
  Speaker 2: gotten absolutely ludicrous.
• 18:39
  Speaker 4: But I just don't feel that addresses.
• 18:41
  Speaker 2: The necessity choices that had to be made, right, Like
• 18:46
  Speaker 2: you didn't you chose to go to school. You chose
• 18:48
  Speaker 2: to go to that school specifically and take out all
• 18:50
  Speaker 2: those loans. And same goes for the mortgage piece. Like
• 18:54
  Speaker 2: a lot of these are quality of life decisions rather
• 18:58
  Speaker 2: than Oh, I got drafted and I'm going to Vietnam.
• 19:01
  Speaker 3: You keep coming back to the You're never gonna love
• 19:03
  Speaker 3: on that.
• 19:04
  Speaker 2: But no, like I, But I just don't think any
• 19:08
  Speaker 2: of these other arguments hold any water when compared to
• 19:11
  Speaker 2: that one. You know it went through economically, You went
• 19:14
  Speaker 2: through the seventies and eighties, high interest rates, slow economy,
• 19:18
  Speaker 2: high inflation.
• 19:19
  Speaker 4: I don't think.
• 19:20
  Speaker 2: Even any of the real defining economic moments for millennials
• 19:24
  Speaker 2: compared to the ones that boomers went through. So there's
• 19:27
  Speaker 2: there's the end of my argument. Sorry to cut everybuddy off.
• 19:29
  Speaker 2: If you want a text into the show, you can
• 19:31
  Speaker 2: do so as well. Trivia Answer and Wall Street Watch
• 19:33
  Speaker 2: coming up.
• 19:34
  Speaker 1: Next, bringing the latest financial news straight to your radio
• 19:45
  Speaker 1: every day. It's the Financial Exchange on the Financial Exchange
• 19:48
  Speaker 1: Radio Network telling out full wool Street Watch, tracking the
• 19:54
  Speaker 1: stocks fandato in the headlines driving markets so far today
• 19:58
  Speaker 1: right here on the Financial Exchange Radio Network.
• 20:00
  Speaker 5: Well after peace stocks with Iran came up short over
• 20:03
  Speaker 5: the weekend, Markets today are mixed after President Trump order
• 20:06
  Speaker 5: at a blockhead of the straight up for moves that
• 20:08
  Speaker 5: took effect at ten o'clock this morning, sending oil prices higher.
• 20:13
  Speaker 5: Wall Street's also sifting through the first batch of banker
• 20:15
  Speaker 5: iningks from Goldman Sachs this morning to kick off first
• 20:18
  Speaker 5: quarter earning season. Right now, the Dow is down nearly
• 20:22
  Speaker 5: six tenths of a percent, or two hundred and seventy
• 20:25
  Speaker 5: seven points, SMP five hundred is flat, NASDAC up by
• 20:29
  Speaker 5: about a quarter percent, Russell two thousand up by about
• 20:32
  Speaker 5: a third of a percent, tenyure Treasure reeled up one
• 20:35
  Speaker 5: basis point at four point three three three percent, and
• 20:39
  Speaker 5: oil up six percent higher, trading at one hundred and
• 20:42
  Speaker 5: two dollars a barrel. Goldman Sacks shares dropping over three
• 20:45
  Speaker 5: percent after the bank reported a nineteen percent increase in
• 20:49
  Speaker 5: first quarter profit driven by record banking in market revenue.
• 20:53
  Speaker 5: More banker innings will follow tomorrow morning from JP Morgan, Chase, Wells,
• 20:57
  Speaker 5: Fargo's City Group, and black Rock. Meanwhile, after sliding more
• 21:02
  Speaker 5: than twelve percent last week over fears that it will
• 21:04
  Speaker 5: lose out to newer AI competitors, Pallanteer stock rebounding nearly
• 21:09
  Speaker 5: four percent today. Elsewhere, Williams Sonoma upgraded by Goldman Sachs,
• 21:14
  Speaker 5: sending shares up by one percent, and Goldman Sachs also
• 21:17
  Speaker 5: downgraded best Buy, citing risk two sales posts first quarter
• 21:22
  Speaker 5: as higher memory costs worked their way into the price
• 21:25
  Speaker 5: of computers. Best Buy stock is falling over three percent
• 21:29
  Speaker 5: on Matt downgrade. I'm Tucker Silvaan that is Wall Street Watch,
• 21:33
  Speaker 5: And in the previous segment we asked you the trivia
• 21:36
  Speaker 5: question which US president died on the same day as
• 21:39
  Speaker 5: Thomas Jefferson. It will be John Adams in Earl from Brunswick,
• 21:44
  Speaker 5: Maine is our winner today, taking them a Financial Exchange
• 21:47
  Speaker 5: Show t shirt. Congrats to Earl. We play trivia every
• 21:50
  Speaker 5: day here in the Financial Exchange. See complete contest rules
• 21:54
  Speaker 5: at Financial Exchange Show dot com.
• 21:56
  Speaker 2: So, Tucker, did I stoke any anger from our listeners?
• 22:00
  Speaker 2: On our millennial versus boomer's debate, or is that the
• 22:03
  Speaker 2: only text.
• 22:06
  Speaker 5: Debt is voluntary? Conditions in the markets, such as rates
• 22:09
  Speaker 5: and inflation are subjective. The debt argument is invalid.
• 22:15
  Speaker 4: Good fire and shots against each other, not against me.
• 22:17
  Speaker 4: That's good.
• 22:18
  Speaker 5: Yeah, it's Millennials were on their parents' health insurance until
• 22:22
  Speaker 5: twenty six. Gen xers were on their own at eighteen
• 22:25
  Speaker 5: and had already been working since their early teens.
• 22:30
  Speaker 2: Again, every generation has a little bit easier than the
• 22:33
  Speaker 2: previous one.
• 22:34
  Speaker 5: Boomers just had to compete with the c student.
• 22:36
  Speaker 2: Except for whatever generation has to deal with our nation's
• 22:39
  Speaker 2: ballooning debt.
• 22:41
  Speaker 4: That one's trouble.
• 22:44
  Speaker 2: Little audible here, Paul, I want to talk about gen
• 22:47
  Speaker 2: Z adults. So gen Z adults, those between age eighteen
• 22:51
  Speaker 2: and twenty eight, say that they're well sorry. The parents
• 22:55
  Speaker 2: of those kids say that their kids are still relying
• 22:57
  Speaker 2: on them substantially for money, housing, other support, according to
• 23:01
  Speaker 2: a twenty twenty six Wells Fargo money study. First of all,
• 23:06
  Speaker 2: does this surprise you at all based on your work
• 23:09
  Speaker 2: with parents of eighteen to twenty eight year olds? And
• 23:12
  Speaker 2: is it any substantially different from previous generations of eighteen
• 23:17
  Speaker 2: to twenty eight year olds, because I'm not really sure
• 23:20
  Speaker 2: that it is.
• 23:21
  Speaker 3: I mean, no, you know who had the hardest Gen
• 23:23
  Speaker 3: Z they beat millennial and baby boomers. This is the
• 23:26
  Speaker 3: one that they have at the worst. No, I think
• 23:30
  Speaker 3: that it's symptomatic of the age range, is Mike to
• 23:34
  Speaker 3: a degree. Now, maybe you can make the argument and
• 23:37
  Speaker 3: this kind of dovetails back to what we were talking
• 23:39
  Speaker 3: about before at the housing market, that housing costs have
• 23:42
  Speaker 3: gotten so out of control. Maybe they're more reliant upon
• 23:45
  Speaker 3: their parents than we may have been when we were
• 23:47
  Speaker 3: looking for our first apartment rental. But I think in general,
• 23:51
  Speaker 3: eighteen to twenty is a period that for at least
• 23:53
  Speaker 3: most kids out there, from eighteen to twenty two to
• 23:56
  Speaker 3: twenty three, you're pretty reliant upon your parents for a
• 24:00
  Speaker 3: bit of help. And maybe that has ticked up a
• 24:03
  Speaker 3: little bit. But I'm not willing to fully say that
• 24:06
  Speaker 3: this is far different than what it was before. I
• 24:10
  Speaker 3: feel like kids in this age range have always been
• 24:12
  Speaker 3: reaching their hand out to parents asking for help. Now,
• 24:15
  Speaker 3: maybe baby boomers would say differently that they had to
• 24:17
  Speaker 3: jump into the workforce far far faster than their more
• 24:21
  Speaker 3: recent counterparts.
• 24:22
  Speaker 2: Yeah, I mean that's undoubtedly true, and they also had
• 24:24
  Speaker 2: to you know, walk three miles uphill.
• 24:26
  Speaker 4: Both ways in the snow and get to school. So
• 24:28
  Speaker 4: it's a different story. But I.
• 24:32
  Speaker 2: Think every person's experience a little bit different on this front.
• 24:35
  Speaker 2: The relevant question to me, though, is how many of
• 24:38
  Speaker 2: these families that are supporting their eighteen to twenty eight
• 24:40
  Speaker 2: year olds can actually afford to do so, because that's
• 24:44
  Speaker 2: the piece that I see actually pretty frequently, and we
• 24:48
  Speaker 2: all know. I think most parents admit, you know, when
• 24:52
  Speaker 2: push comes to shove, when their kid is in really
• 24:54
  Speaker 2: dire straits, they you know, they open up the wallet and.
• 24:58
  Speaker 4: Plan the checkbook.
• 24:59
  Speaker 2: But I think I think it's one of those under
• 25:03
  Speaker 2: under talked about areas, especially when it comes to financial planning.
• 25:07
  Speaker 2: Rarely do I have a new client come in and say,
• 25:10
  Speaker 2: and yeah, by the way, I need to budget twenty
• 25:13
  Speaker 2: five hundred dollars a year, because realistically, that's how much
• 25:16
  Speaker 2: I throw into support for my twenty five year old
• 25:20
  Speaker 2: every year when I shell out gifts for birthdays and Christmas,
• 25:23
  Speaker 2: and you know, I'm going to almost certainly help them
• 25:26
  Speaker 2: out when they get a divorce thirty years from or
• 25:29
  Speaker 2: twenty years from now, and you know, the question is
• 25:33
  Speaker 2: how do you prepare yourself for these things and put
• 25:36
  Speaker 2: guardrails around the degree of support. The divorce of a
• 25:39
  Speaker 2: kid is one that I have seen really firsthand, when
• 25:44
  Speaker 2: parents are shelling out tens of thousands of dollars to
• 25:48
  Speaker 2: help somebody through a really trumsaif event, and in some
• 25:53
  Speaker 2: cases it can really throw off your own retirement. How
• 25:56
  Speaker 2: do you, I guess, how do you address these sensitive
• 25:59
  Speaker 2: subjects with client clience, like is it just about putting
• 26:01
  Speaker 2: those guardrails.
• 26:02
  Speaker 4: Up, Mike?
• 26:03
  Speaker 3: For us, it's about having the uncomfortable conversation. And I
• 26:06
  Speaker 3: can think of a couple examples off the top of
• 26:08
  Speaker 3: my head where a parent who has a child that
• 26:10
  Speaker 3: took on a lot of student loan debt, but then
• 26:12
  Speaker 3: pursued a career that wasn't going to pay a lot
• 26:15
  Speaker 3: that was kind of going to be a state employed
• 26:18
  Speaker 3: a government worker where there raises were not going to
• 26:20
  Speaker 3: be that significant, And I had to have the candid
• 26:22
  Speaker 3: conversation that you, in your retirement position, the parent cannot
• 26:26
  Speaker 3: afford to subsidize this child more than this next year.
• 26:30
  Speaker 3: This really can't continue because then you're going to thwart
• 26:32
  Speaker 3: your retirement that you've worked so hard for. Ultimately, all
• 26:36
  Speaker 3: we can do is bring up the subject. Our job
• 26:38
  Speaker 3: as planners is to point out something that could be
• 26:41
  Speaker 3: problematic to the client or the parent in this case.
• 26:44
  Speaker 3: But I understand having kids in my own and you
• 26:46
  Speaker 3: probably do too, that I probably would go to the
• 26:49
  Speaker 3: end of their to really help them. But at some
• 26:51
  Speaker 3: point you're doing them a disservice. It's our job as
• 26:54
  Speaker 3: advisors and planners to mention that this is going to
• 26:57
  Speaker 3: thwart your financial plan if you don't deviate from the
• 26:59
  Speaker 3: course that you're on. But ultimately, all we can do
• 27:02
  Speaker 3: is lead the horse to water. You can't make them drink, right.
• 27:04
  Speaker 3: I'm not going to tell someone to stop. All you
• 27:07
  Speaker 3: can do is advise them these are the consequences of
• 27:09
  Speaker 3: your actions from a financial standpoint.
• 27:11
  Speaker 2: Well, there's always several levers to pull, and that's that's
• 27:13
  Speaker 2: what I always go back to, is Okay, you know
• 27:15
  Speaker 2: if it is going to be the degree of support.
• 27:17
  Speaker 4: Are you prepared to work another year?
• 27:18
  Speaker 2: Are you're prepared to live a different lifestyle than you
• 27:21
  Speaker 2: were planning on in order to focus on this other
• 27:25
  Speaker 2: priority instead. The most important thing with all of this
• 27:28
  Speaker 2: is just the fore knowledge that you know This is
• 27:31
  Speaker 2: the risk you are playing into if you're spending on X,
• 27:34
  Speaker 2: Y or Z. If you have those types of questions,
• 27:36
  Speaker 2: you're trying to figure out what can I actually afford
• 27:40
  Speaker 2: to do while not jeopardizing my own financial future? Give
• 27:43
  Speaker 2: us a call it Armstrong Advisory Group these types of things,
• 27:46
  Speaker 2: Believe it or not, this is what we work with
• 27:47
  Speaker 2: our clients on on a day to day basis.
• 27:50
  Speaker 4: The numbers eight hundred three nine three four, zero zero one.
• 27:53
  Speaker 2: I know it's not fun stuff to talk about, but
• 27:56
  Speaker 2: it is absolutely a necessity eight hundred three nine three
• 27:59
  Speaker 2: four or zero zero one.
• 28:01
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 28:04
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 28:06
  Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
• 28:09
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 28:12
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 28:15
  Speaker 1: advisory services.
• 28:17
  Speaker 2: Great news for those who work for Meta. If you
• 28:21
  Speaker 2: were worried that you had you know, too much oversight
• 28:25
  Speaker 2: from your boss, they have great news because they have
• 28:28
  Speaker 2: now created a second boss. Meta has built an AI
• 28:32
  Speaker 2: version of Mark Zuckerberg to interact with the staff, and
• 28:36
  Speaker 2: I cannot imagine the meeting that people went to where
• 28:41
  Speaker 2: they said, oh, yeah, this is a good idea. We
• 28:43
  Speaker 2: should give everybody an AI version of the founder of
• 28:46
  Speaker 2: our company so that you can oversee them and ask
• 28:49
  Speaker 2: them questions.
• 28:49
  Speaker 4: Or I guess the other way around.
• 28:52
  Speaker 3: What what are they doing?
• 28:54
  Speaker 4: What like God?
• 28:55
  Speaker 2: Like you know, debacle? Do you have to have in
• 28:59
  Speaker 2: your mind to say that this is a good idea?
• 29:02
  Speaker 3: The metaverse now this, I mean they just continue to
• 29:04
  Speaker 3: come up with ideas that make you scratch your head.
• 29:08
  Speaker 3: What benefit does this possibly serve? And why would you
• 29:11
  Speaker 3: want to attribute to yourself? I mean imagine as a
• 29:14
  Speaker 3: boss replicating yourself in AI form, Like one of you
• 29:18
  Speaker 3: is enough, I.
• 29:19
  Speaker 4: Think we can Hubris, Yeah, Hubris.
• 29:22
  Speaker 3: And when you're wor this company needs?
• 29:24
  Speaker 2: Do you know what this company needs is an investment
• 29:27
  Speaker 2: of a few billion dollars to turn me into an
• 29:30
  Speaker 2: AI version of myself because I'm so incredible that my
• 29:33
  Speaker 2: staff needs to be able to interact with me on
• 29:35
  Speaker 2: an hourly basis.
• 29:37
  Speaker 3: One of you is not good enough. Let's put out
• 29:39
  Speaker 3: hundreds of thousands.
• 29:40
  Speaker 2: Yeah, this is a This is a bad idea. Good
• 29:45
  Speaker 2: use of AI, bad use of AI. This is going
• 29:47
  Speaker 2: into the bad use Bucket. I liked continuing to hear
• 29:51
  Speaker 2: stories like this that we can categorize as good or
• 29:53
  Speaker 2: bad uses of AI. And this is very firmly in
• 29:57
  Speaker 2: the bad. Let's take a quick break. When we come back,
• 30:00
  Speaker 2: little bit of stacker Roulette is next on The Financial Exchange.
• 30:03
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• 30:06
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• 30:10
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• 30:13
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• 30:19
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• 30:22
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• 30:40
  Speaker 2: Time for a bit of stack Roulette here, Paul and
• 30:42
  Speaker 2: I'm going to kick things off with more AI discussion
• 30:46
  Speaker 2: and just the supply chains and shortages that we are
• 30:50
  Speaker 2: already seeing play out in AI. Now. We all know
• 30:53
  Speaker 2: the cost of semiconductors and memory and all sorts of
• 30:57
  Speaker 2: different equipment have been skyrocketing. But there is a market
• 31:01
  Speaker 2: for computing power that I did not know until today existed,
• 31:06
  Speaker 2: which is the spot market prices for access to in
• 31:10
  Speaker 2: Vidia's highest end GPUs.
• 31:12
  Speaker 4: So of course this does exist.
• 31:15
  Speaker 2: I knew that you could access in Nvidia cloud computing power,
• 31:21
  Speaker 2: but there's you know, inefficient market for it, where you
• 31:25
  Speaker 2: can basically rent computing power from Nvidia's Blackwell generation chips.
• 31:31
  Speaker 2: The cost to do so for an hour is four
• 31:34
  Speaker 2: dollars and eight cents, which, frankly, I just don't know
• 31:38
  Speaker 2: the return there, so I have no idea how to
• 31:41
  Speaker 2: judge this, But what I do know is that it's
• 31:44
  Speaker 2: up forty eight percent from two months ago. The cost
• 31:48
  Speaker 2: to rent the GPOs for one hour is up from
• 31:51
  Speaker 2: two dollars and seventy five cents two months ago. The
• 31:55
  Speaker 2: pace at which this continues to just blow pass expectations
• 32:00
  Speaker 2: in terms of both demand for the technology and then
• 32:04
  Speaker 2: also what companies are now putting out is just fascinating
• 32:08
  Speaker 2: to me. And I don't know six to nine months ago,
• 32:14
  Speaker 2: the thought process going through my mind is, Wow, these
• 32:17
  Speaker 2: companies have been bid up to the point they're so expensive.
• 32:19
  Speaker 2: How is it possibly going to justify the share price
• 32:24
  Speaker 2: to the point where It's not that I'm unconcerned about that,
• 32:27
  Speaker 2: but the greater concern seems to be, now, if demand
• 32:31
  Speaker 2: is really this high and this technology continues to evolve
• 32:34
  Speaker 2: at such an incredible pace, what industries are going to
• 32:38
  Speaker 2: be wiped out and what shortages are going to be
• 32:41
  Speaker 2: out there in the market based on just a lack
• 32:43
  Speaker 2: of ability availability of power generation and computing power to
• 32:47
  Speaker 2: accomplish all these things that these companies want.
• 32:50
  Speaker 3: No. I think one of the things that we had
• 32:51
  Speaker 3: a fear on previously is that when are we going
• 32:53
  Speaker 3: to see significant impacts from this technology? That those have
• 32:57
  Speaker 3: been sort of assuaged as we've headed into twenty twenty six.
• 33:00
  Speaker 3: We have seen the release of tools from Claude and
• 33:03
  Speaker 3: others that really point to the fact that this technology
• 33:06
  Speaker 3: is going to make a significant impact and disrupt industries.
• 33:09
  Speaker 3: But on the other end of it, as much as
• 33:11
  Speaker 3: we've seen the promise of that, I have the fears
• 33:14
  Speaker 3: of sort of just the general picks and shovels that
• 33:16
  Speaker 3: are required to build out the infrastructure to keep up
• 33:19
  Speaker 3: with the demand for this technology is not going to
• 33:22
  Speaker 3: keep pace, and as a result, the US is going
• 33:25
  Speaker 3: to find itself in a difficult spot. Where we've talked
• 33:27
  Speaker 3: about Mike on the show, data centers and just sort
• 33:30
  Speaker 3: of the leariness that now states and municipalities are having
• 33:33
  Speaker 3: on building out computing capacity in their backyards that flies
• 33:38
  Speaker 3: right in the face of trying to get a gentic
• 33:43
  Speaker 3: users within a system developed or just building out any
• 33:46
  Speaker 3: of these models in general, when you're competing against China
• 33:50
  Speaker 3: and other areas of the global economy to keep pace,
• 33:53
  Speaker 3: it's something that is going to be a huge bottleneck
• 33:55
  Speaker 3: and continues to rear its head when you read an
• 33:58
  Speaker 3: article like this that, hey, the de manned is far
• 34:00
  Speaker 3: outpacing the supply. I'm sure there will be a reverse
• 34:03
  Speaker 3: phenomenon where maybe there's a glut of too much supply.
• 34:07
  Speaker 3: We saw the broadband back in the you know, late nineties,
• 34:10
  Speaker 3: early two thousands, But for now we're in the supply
• 34:12
  Speaker 3: crunch cycle for sure, and you can tell by the
• 34:16
  Speaker 3: renting costs on that end of things.
• 34:17
  Speaker 2: Yeah, I will say for a moment that the history
• 34:21
  Speaker 2: of US capitalism is that we get infatuated with the
• 34:24
  Speaker 2: new technology way over build the heck out of it,
• 34:27
  Speaker 2: and then are left with and oversupply of that technology,
• 34:30
  Speaker 2: whether that's you know, TV, radio, railroads, or the Internet.
• 34:35
  Speaker 2: But right now we are in the we are in
• 34:38
  Speaker 2: the crunch time moment. And yeah, the question, well, there's
• 34:43
  Speaker 2: a lot of questions, but one of the looming ones
• 34:45
  Speaker 2: to me is what matters more. The latest and greatest
• 34:49
  Speaker 2: generation of semiconductor, which we have the advantage of or
• 34:53
  Speaker 2: the ability to generate massive amounts of electricity, which China
• 34:57
  Speaker 2: has the advantage on it.
• 34:58
  Speaker 3: Steamroll citizens House is to build to build the news
• 35:02
  Speaker 3: supply right, without a doubt. Three men are arrested in
• 35:05
  Speaker 3: a one million dollar Lego theft in California. Mike, not
• 35:09
  Speaker 3: sure if you heard this breaking news over the weekend.
• 35:12
  Speaker 4: But were they nerds or were they geeks?
• 35:15
  Speaker 3: Their opportunction, They're opportunists. And what I didn't realize about
• 35:20
  Speaker 3: Legos is they've almost kind of created their own alternative
• 35:24
  Speaker 3: investment class where if you invest in unopened Lego sets,
• 35:28
  Speaker 3: there's data out there that shows you've generated returns of
• 35:31
  Speaker 3: eleven to fifteen percent over This is from nineteen eighty
• 35:35
  Speaker 3: seven through twenty twenty three. Other studies have found that it's,
• 35:38
  Speaker 3: you know, somewhere around the low double digit returns. I
• 35:42
  Speaker 3: did not realize until the last year or so where
• 35:45
  Speaker 3: a family member mine send me an article as a joke, Hey,
• 35:48
  Speaker 3: are you guys considering Legos and your client and investment portfolio.
• 35:51
  Speaker 3: They are something that have been really resilient and a
• 35:55
  Speaker 3: good way to make money, and that's why you have
• 35:58
  Speaker 3: this attempted theft which is isn't the first of its kind.
• 36:01
  Speaker 3: There has been other instances where people have gone out there.
• 36:04
  Speaker 3: In October, for example, police said they discovered tens of
• 36:07
  Speaker 3: thousands of Lego pieces out of California home and arrested
• 36:11
  Speaker 3: a man who trafficked the stolen collectibles. So, yes, listeners,
• 36:15
  Speaker 3: out there there is a stolen collectibles market for Legos.
• 36:18
  Speaker 3: There's no way to track them when you resell them
• 36:20
  Speaker 3: unless you step on bits.
• 36:24
  Speaker 5: Yeah, you find they really they really follow.
• 36:27
  Speaker 4: The screen guy.
• 36:30
  Speaker 3: But there is a market for stolen Legos to be
• 36:34
  Speaker 3: listed on other sites and to get a profit on
• 36:37
  Speaker 3: And uh, Mike, We've learned time and town again Americans
• 36:40
  Speaker 3: and will stop at nothing short to make a profit,
• 36:43
  Speaker 3: whether it's legos, anything you can imagine, we will. We
• 36:47
  Speaker 3: will sell it and try to make money on it.
• 36:49
  Speaker 4: I'll tell you about that.
• 36:50
  Speaker 2: This heist, just you know, practically speaking, makes so much
• 36:54
  Speaker 2: more sense to me than the taunting thieves that sold
• 36:57
  Speaker 2: that stole the lobster pounds of lobster like at least
• 37:02
  Speaker 2: this one. I can hide it out in a warehouse
• 37:04
  Speaker 2: for a few months and.
• 37:05
  Speaker 4: See a build aware.
• 37:08
  Speaker 2: I am genuinely impressed by you know, whoever managed to
• 37:11
  Speaker 2: steal the lobster meat and then work it right back
• 37:13
  Speaker 2: into the system.
• 37:15
  Speaker 4: I shouldn't be impressed. Impressed is the wrong word here.
• 37:18
  Speaker 4: You can use impressed. I don't condone, you know, tip
• 37:21
  Speaker 4: their cap.
• 37:22
  Speaker 2: Stealing forty thousand pounds of lobster meat valued at four
• 37:25
  Speaker 2: hundred thousand dollars. But again, I was just floored by
• 37:28
  Speaker 2: the ability for them to work it into the market.
• 37:31
  Speaker 2: And then a bunch of people texted like, you're so naive.
• 37:34
  Speaker 2: You've clearly never been close to the mafia.
• 37:38
  Speaker 4: So there you have it.
• 37:41
  Speaker 2: That is all the time we have on the financial exchange.
• 37:44
  Speaker 2: As we close in on the noon hour, stocks not
• 37:47
  Speaker 2: doing much differently than they did when they opened. The
• 37:50
  Speaker 2: SMP is as flat as flat can get, the Dow
• 37:52
  Speaker 2: Jones Industrial Average off by two hundred and forty points
• 37:56
  Speaker 2: or one half of a percent, and the NASDAK hanging
• 37:59
  Speaker 2: on to gains of at a quarter of a percent.
• 38:01
  Speaker 2: As we close out the show here, we will continue
• 38:03
  Speaker 2: to have big earnings reports for the rest of this week,
• 38:06
  Speaker 2: so stay tuned.
• 38:07
  Speaker 4: We'll be back tomorrow and have a great rest of
• 38:09
  Speaker 4: your day.