Latest / The Financial Exchange Show / Will Warsh Keep Markets Guessing at Jackson Hole?

Transcript

Will Warsh Keep Markets Guessing at Jackson Hole? · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:02
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:05
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:08
  Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:11
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:14
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:17
  Speaker 1: your own financial tax and estate planning advisors before making
• 0:20
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:23
  Speaker 1: this program do not endorse each other or their services.
• 0:25
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:28
  Speaker 1: for referrals and are not affiliated. This is The Financial
• 0:34
  Speaker 1: Exchange with Paul Lane and Mark Fandetti. Your exclusive look
• 0:39
  Speaker 1: at business and financial news affecting your day, your city,
• 0:42
  Speaker 1: your world. Stay informed and up to date about economic
• 0:46
  Speaker 1: and market trends. Plus. breaking business news every day. The
• 0:50
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:53
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:57
  Speaker 1: heroes by visiting dav5k. boston and making a donation today. This
• 1:03
  Speaker 1: is The Financial Exchange with Paul Lane and Mark Vandetti.
• 1:11
  Speaker 2: Markets are relatively flat, an hour and a half into
• 1:14
  Speaker 2: trading as we all eye Nvidia's earnings that are to
• 1:18
  Speaker 2: be reported. After the market closes today, Paul Lane, Mark Fendetti,
• 1:23
  Speaker 2: and Tucker Silva here with you. As I mentioned, the
• 1:25
  Speaker 2: S & P 500 only up three or four points,
• 1:28
  Speaker 2: and the Dow Jones is off 83 points today. So
• 1:31
  Speaker 2: really not a lot of market action, but we will
• 1:34
  Speaker 2: see if what we get from NVIDIA at the close
• 1:37
  Speaker 2: of the bell today will have any impact on tomorrow's trading.
• 1:41
  Speaker 2: It's largely anticipated that NVIDIA will come out With blowout numbers,
• 1:45
  Speaker 2: they're anticipating that revenue doubles from where it was last
• 1:48
  Speaker 2: year as well as net income. But the focus will
• 1:52
  Speaker 2: be if there is any forward-looking commentary, any sort of
• 1:57
  Speaker 2: insights that can be parsed through as to what the
• 1:59
  Speaker 2: hyperscalers are thinking from a capital expenditure perspective because NVIDIA
• 2:05
  Speaker 2: does sit at the epicenter of all of the AI
• 2:09
  Speaker 2: demand out there. So that will certainly be in focus.
• 2:13
  Speaker 2: And of course, the other big focus for the rest
• 2:16
  Speaker 2: of this week is Kevin Warsh. He will have an
• 2:18
  Speaker 2: opportunity to speak at the Jackson Hole Symposium on Friday.
• 2:23
  Speaker 2: at 10 a.m. So those become sort of the biggest
• 2:25
  Speaker 2: stories for this week. We'll have a full breakdown of
• 2:28
  Speaker 2: NVIDIA's earnings on tomorrow's show, but we'll kick off the
• 2:32
  Speaker 2: second hour of our program here talking a little bit
• 2:34
  Speaker 2: more about what we anticipate from Kevin Warsh on Friday
• 2:38
  Speaker 2: in Jackson Hole. And he sits at a point in
• 2:43
  Speaker 2: time where it seems as if, if you read the
• 2:46
  Speaker 2: Wall Street Journal and several other news publications, where they
• 2:49
  Speaker 2: are eager to hear more from him. His previous appearance
• 2:53
  Speaker 2: in the July Federal Reserve meeting was largely panned because
• 2:57
  Speaker 2: he offered little in the way of specifics. This is
• 2:59
  Speaker 2: something that is a intention of this new Federal Reserve chair.
• 3:05
  Speaker 3: Kevin Wurst doesn't.
• 3:05
  Speaker 2: Want to really provide a lot in the way of
• 3:08
  Speaker 2: forward guidance. However, the thing that he has spoke very
• 3:11
  Speaker 2: openly about is the need for the Federal Reserve to
• 3:15
  Speaker 2: get inflation back to 2%. It now sits at 3.7%.
• 3:20
  Speaker 2: There have been mixed indicators this year as to whether
• 3:24
  Speaker 2: or not the Federal Reserve should take steps to be
• 3:28
  Speaker 2: more restrictive. The labor market was initially a concern of
• 3:32
  Speaker 2: the Federal Reserve, and that led to some rate cuts,
• 3:36
  Speaker 2: very small rate cuts. But those concerns have largely been
• 3:40
  Speaker 2: sort of taken off the table for the time being
• 3:42
  Speaker 2: on the labor market side. However, the inflation risks still
• 3:46
  Speaker 2: loom quite large. And you can make arguments in one
• 3:49
  Speaker 2: direction or another. One camp may say these are temporary
• 3:52
  Speaker 2: shocks that we are dealing with from an inflation perspective.
• 3:56
  Speaker 2: Others may say that the economy is running hot and
• 3:59
  Speaker 2: demand is outstripping supply. So that really is what is
• 4:03
  Speaker 2: in focus for this meeting on Friday and it will
• 4:07
  Speaker 2: be interesting to see Mark what sort of stance that
• 4:10
  Speaker 2: he takes. Does he comment on anything that Treasury Secretary
• 4:13
  Speaker 2: Scott Besson has done with the Treasury markets? No. I'm
• 4:17
  Speaker 2: sure he won't touch that.
• 4:18
  Speaker 3: He's not going to take a different stance than he's taken.
• 4:20
  Speaker 3: Why should he?
• 4:21
  Speaker 4: The markets and whiners in the financial press need to
• 4:26
  Speaker 4: get used to, as he put it, a withdrawal of
• 4:29
  Speaker 4: the spoon feeding. This goes back to what we were
• 4:32
  Speaker 4: talking about in the last hour. fiscal in the case
• 4:36
  Speaker 4: of Besson or monetary in the case of Warsh. And
• 4:39
  Speaker 4: it's called monetary. We throw these terms around. It's called
• 4:41
  Speaker 4: monetary because the Fed controls the supply of money. Really,
• 4:45
  Speaker 4: that's how they influence interest rates. They really control short-term
• 4:48
  Speaker 4: interest rates and how they try to influence demand. You
• 4:51
  Speaker 4: mentioned demand outpacing demand in the aggregate. Overall, demand outpacing supply.
• 4:57
  Speaker 4: That pushes prices up. That's the type of inflation the
• 5:01
  Speaker 4: Fed can do something about. The question is, is the
• 5:05
  Speaker 4: elevated inflation of the last, say, year due to demand
• 5:09
  Speaker 4: pull or cost push, to put it in terms that
• 5:13
  Speaker 4: you might have heard in your first economics class, if
• 5:15
  Speaker 4: you ever took one. The Fed can do something about
• 5:19
  Speaker 4: the former by pairing, by moderating demand when it raises
• 5:25
  Speaker 4: interest rates. Can't do much about, say, rising oil prices,
• 5:29
  Speaker 4: but it can respond to expectations which may go up
• 5:33
  Speaker 4: in response to rising oil prices as you can tell
• 5:36
  Speaker 4: it gets sort of complicated but i wouldn't expect to
• 5:38
  Speaker 4: the chair based on what i know about his his
• 5:42
  Speaker 4: his economic philosophy if you will to give any ground
• 5:46
  Speaker 4: at all he's not going to suddenly start telling markets
• 5:49
  Speaker 4: where he expects fed funds to be two three four
• 5:53
  Speaker 4: quarters from now or what even might drive that decision
• 5:57
  Speaker 4: at the time And that disappoints financial journalists who are
• 6:00
  Speaker 4: used to writing about that. There's going to be less
• 6:02
  Speaker 4: to write about, first of all.
• 6:04
  Speaker 3: There just is. Because there's going to be less forthcoming.
• 6:07
  Speaker 4: And if you're not giving so-called forward guidance, which, by
• 6:11
  Speaker 4: the way, has limited use cases in theory. I have
• 6:13
  Speaker 4: no idea how it got to be used as a
• 6:15
  Speaker 4: regular tool. But anyway, there's less for them to write about.
• 6:21
  Speaker 4: So there's a lot of hue and cry from that corner. And,
• 6:23
  Speaker 4: of course, bond traders actually have to engage in price
• 6:25
  Speaker 4: discovery now, so they're whining.
• 6:27
  Speaker 2: You don't think that there is any need for a
• 6:30
  Speaker 2: Fed chair to kind of at least lay out the methodology,
• 6:33
  Speaker 2: if not sort of providing the scrutiny?
• 6:37
  Speaker 4: Let me answer that question by sort of posing a question.
• 6:40
  Speaker 4: If you followed what are sometimes called Taylor rule type
• 6:45
  Speaker 4: specifications for setting the real federal funds rate, or what
• 6:50
  Speaker 4: is called the stated federal funds rate, we don't have
• 6:51
  Speaker 4: to make that distinction. Would you tell people that I
• 6:55
  Speaker 4: put a– I'll just talk in researcher terms for a
• 6:58
  Speaker 4: second here. I put a coefficient on the output gap
• 7:00
  Speaker 4: of 0.5 and a coefficient on the inflation gap of 1.5.
• 7:04
  Speaker 4: That's a fancy way of saying if inflation outpaces my target,
• 7:07
  Speaker 4: I'm going to go more than one for one on
• 7:10
  Speaker 4: Fed funds. I'm going to raise it more than one
• 7:11
  Speaker 4: for one with the increase in inflation. And if unemployment
• 7:14
  Speaker 4: is– excuse me, if the output gap is one, I'm
• 7:17
  Speaker 4: going to lower Fed funds by 0.5. That's a reaction function.
• 7:21
  Speaker 3: Sometimes you hear that. term thrown around.
• 7:25
  Speaker 4: That could not have anticipated the right response to the
• 7:28
  Speaker 4: Great Recession. It could not have anticipated the right response
• 7:30
  Speaker 4: to COVID. Of what use is articulating a so-called reaction function?
• 7:35
  Speaker 4: In plain English, it's just a rule. It's like asking
• 7:38
  Speaker 4: you as a parent, if your kid came home today,
• 7:40
  Speaker 4: got a bad grade, and then mouthed off to you,
• 7:42
  Speaker 4: what would you do? And I asked you to just,
• 7:45
  Speaker 4: you get to write it down so it's formulaic, so
• 7:46
  Speaker 4: when I'm babysitting your kids, which no sane person would
• 7:49
  Speaker 4: ever have me do, I'm just going to follow your
• 7:51
  Speaker 4: formula for parenting, Paul, and I should get the same
• 7:54
  Speaker 4: results as you do.
• 7:55
  Speaker 3: You'd say, I'm sorry, it's not that simple. Yeah, that's
• 7:58
  Speaker 3: a good analogy.
• 7:58
  Speaker 4: You can't make formulaic something as complicated as, as parenting,
• 8:02
  Speaker 4: because there are way too many variables involved. The same
• 8:05
  Speaker 4: is true of monetary policy. I wish Warsh would put
• 8:07
  Speaker 4: it sort of that way and explain, no, no, I'm
• 8:10
  Speaker 4: not just being lazy. I'm not just busting your chops.
• 8:13
  Speaker 4: This is philosophical with me. And I suspect he's going
• 8:16
  Speaker 4: to get there.
• 8:16
  Speaker 2: Perhaps could he mention some of the variables, like in
• 8:19
  Speaker 2: this analogy that we're going to run with on the
• 8:21
  Speaker 2: parenting front, on the bad grade, I would say, okay,
• 8:23
  Speaker 2: some of the variables that I would consider in terms
• 8:25
  Speaker 2: of what dictates the punishment is, How much effort did
• 8:28
  Speaker 2: little Johnny put into preparing for this exam? Was he
• 8:32
  Speaker 2: loafing around the house at home or was he actually
• 8:34
  Speaker 2: looking at the books and giving a good effort? Same
• 8:36
  Speaker 2: analogy here. Can you mention some of the factors in his,
• 8:41
  Speaker 2: I'm saying not you, but Kevin Warsh, can he mention
• 8:43
  Speaker 2: some of the factors? Gee, we're looking at these particular factors.
• 8:46
  Speaker 4: They're in these so-called Taylor rules that people have a
• 8:50
  Speaker 4: fetish for and misunderstand.
• 8:52
  Speaker 3: Yeah, but they won't.
• 8:53
  Speaker 4: He's not going to tell you what his, again, you
• 8:55
  Speaker 4: hear in the Bloomberg, the financial press, what's his reaction function?
• 8:59
  Speaker 3: Stop.
• 9:00
  Speaker 4: He's not going to give up. He's not going to
• 9:03
  Speaker 4: give that up because he may not have one because
• 9:05
  Speaker 4: he realizes it's context specific. Many of these so-called rules,
• 9:09
  Speaker 4: they're useful for academic purposes, but not in real life.
• 9:14
  Speaker 4: Even the inventors of these, not the inventors, Taylor didn't
• 9:17
  Speaker 4: invent it as a prescription for monetary policy. He invented
• 9:21
  Speaker 4: it to describe, he didn't invent it, he estimated it.
• 9:24
  Speaker 4: He estimated it to describe how the Greenspan Fed was behaving.
• 9:29
  Speaker 4: This is how the Greenspan Fed reacted to a gap
• 9:33
  Speaker 4: between demand and supply, what you talked about earlier. This
• 9:35
  Speaker 4: is how the Greenspan Fed or the Volcker Fed prior
• 9:38
  Speaker 4: to that reacted to inflation exceeding a target, even though
• 9:43
  Speaker 4: they didn't articulate a target at the time. If you
• 9:46
  Speaker 4: assume a policymaker behaves in that fashion, which is a
• 9:50
  Speaker 4: big if, But if you assume that, because you have
• 9:53
  Speaker 4: to assume something, then you can estimate their reaction, their rule.
• 9:57
  Speaker 4: Does Warsh have a rule in his mind?
• 9:59
  Speaker 3: I suspect he does.
• 10:00
  Speaker 1: Does.
• 10:01
  Speaker 3: He knows.
• 10:03
  Speaker 4: The conditions under which he'd raise Fed funds, and we're
• 10:06
  Speaker 4: going to have to infer that rule from his actions
• 10:09
  Speaker 4: over time. He's not going to lay it out for you.
• 10:11
  Speaker 2: Unfortunately, that seems to be the case for all financial
• 10:15
  Speaker 2: journalists out there and for people who host radio shows,
• 10:19
  Speaker 2: that there is not much to glean.
• 10:21
  Speaker 3: But we'll see.
• 10:21
  Speaker 2: Maybe Friday will be different. But I anticipate that you're
• 10:25
  Speaker 2: probably on the right train of thought there, Mark, that
• 10:27
  Speaker 2: it will be more of the same, a pretty tight-lipped
• 10:31
  Speaker 2: Fed chair, Kevin Warsh. Taking a look at the September
• 10:34
  Speaker 2: meeting that we have coming up for the Federal Reserve
• 10:37
  Speaker 2: that will be on September 16th, Right now, looking at
• 10:39
  Speaker 2: the CME futures market, it seems as if we have
• 10:43
  Speaker 2: about a 62% probability that the Federal Reserve would hold
• 10:47
  Speaker 2: rates where they are, and about a 38% probability that
• 10:51
  Speaker 2: they may go with a quarter basis point hike. We'll
• 10:55
  Speaker 2: see how those ebb and flow over the next few
• 10:57
  Speaker 2: weeks here. We're going to take a quick break here
• 11:00
  Speaker 2: on the financial exchange, but when we come back, we're
• 11:03
  Speaker 2: going to be talking about The K-shaped economy, this is
• 11:06
  Speaker 2: a very popular term throughout 2025. Is it still a thing,
• 11:09
  Speaker 2: or do we have to change to another letter to
• 11:13
  Speaker 2: describe the way the economy is trending? We're going to
• 11:16
  Speaker 2: cover that and much more right after this break here
• 11:18
  Speaker 2: on The Financial Exchange. Is the K-shaped economy ending? Finance
• 11:44
  Speaker 2: pros weigh in. This is a piece here from CNBC.
• 11:48
  Speaker 2: So just to give a backdrop to listeners, one of
• 11:50
  Speaker 2: the most commonly discussed subjects in trying to frame the
• 11:55
  Speaker 2: economy is I think this mostly came about in 2025
• 11:59
  Speaker 2: was this K-shaped economy, meaning that there is this huge
• 12:03
  Speaker 2: disparity between the ultra wealthy, the high income earners versus
• 12:07
  Speaker 2: those on the lower income earner side. So think of.
• 12:11
  Speaker 2: the K with one end sort of going up and
• 12:14
  Speaker 2: the other end going down. There was this sort of
• 12:17
  Speaker 2: statistic that was thrown around. It stems from some analysis
• 12:20
  Speaker 2: done by Moody's in which the top 10% of income
• 12:25
  Speaker 2: earners were responsible for 50% of the spending throughout the country. Now,
• 12:31
  Speaker 2: I had done a lot of digging on the subject
• 12:33
  Speaker 2: because we did talk about it so frequently last year.
• 12:36
  Speaker 2: I was curious to try and just get multiple different
• 12:38
  Speaker 2: perspectives on this so-called phenomenon. And from all that I
• 12:42
  Speaker 2: could glean from multiple different sources, it was hard to
• 12:47
  Speaker 2: specifically pinpoint that this actually was the case. It just
• 12:50
  Speaker 2: sort of seemed like you looked at different analysis and
• 12:54
  Speaker 2: there was different conclusions that you could take away. But
• 12:57
  Speaker 2: this has been the common refrain that's come up quite frequently,
• 13:01
  Speaker 2: this case-shaped economy. Now there is a different slant to this,
• 13:05
  Speaker 2: and Mark, we're running into so many different letters here.
• 13:07
  Speaker 2: I don't even know how much I want to put
• 13:10
  Speaker 2: stock into some of these proposed letter changes. Now they're
• 13:13
  Speaker 2: suggesting that perhaps the economy is more like a C.
• 13:17
  Speaker 2: This actually comes from... Treasury Secretary Scott Besson, in which
• 13:22
  Speaker 2: the lower income earners are starting to make up some ground.
• 13:26
  Speaker 2: The common refrain was that these lower income earners had
• 13:29
  Speaker 2: been punished significantly by the 30% inflation that we've seen
• 13:33
  Speaker 2: over the course of the last seven years or so,
• 13:35
  Speaker 2: and their income hadn't kept pace. And there is numbers
• 13:38
  Speaker 2: to be clear that back that up, where the wage
• 13:40
  Speaker 2: increases haven't been commensurate with some of the inflation. Whereas
• 13:44
  Speaker 2: those higher income earners have had wage increases that have
• 13:47
  Speaker 2: kept pace with inflation. And typically those higher income earners
• 13:50
  Speaker 2: in that top 10%, they're often invested in equity markets.
• 13:54
  Speaker 2: And we know that the last seven years have been
• 13:57
  Speaker 2: quite strong from an equity perspective. So those portfolios of
• 14:01
  Speaker 2: those higher income earners have fared quite well. Recent numbers
• 14:05
  Speaker 2: have indicated that the lower income thresholds have seen their
• 14:09
  Speaker 2: household income increase 5.2% at an average pace for the
• 14:14
  Speaker 2: month of July. That's year over year. That was surpassing
• 14:18
  Speaker 2: the highest increases that we've seen in that sort of
• 14:22
  Speaker 2: threshold of income earners. Since December of 2024. But with
• 14:28
  Speaker 2: any of these, I'm just not really sure I'm willing
• 14:30
  Speaker 2: to lean into one or another in terms of the
• 14:33
  Speaker 2: shapes of the economy. It just seems hard to sort
• 14:37
  Speaker 2: of pin down at any given point in time.
• 14:39
  Speaker 4: I guess it's a catchy shorthand for the trends you described.
• 14:46
  Speaker 4: Higher income people will just say doing better. I mean,
• 14:49
  Speaker 4: you provided lots of data there, but that's sort.
• 14:51
  Speaker 3: Of the upshot.
• 14:52
  Speaker 4: That's been the case for like 40 years, though, with
• 14:55
  Speaker 4: a couple of exceptions. So if you believe that trends
• 15:01
  Speaker 4: are usually driven by larger forces, you probably believe that
• 15:04
  Speaker 4: there's something behind those that is not going to change
• 15:07
  Speaker 4: on a dime. I know I'm being very generic here, sorry,
• 15:10
  Speaker 4: but you gave so much great detail that I can't
• 15:13
  Speaker 4: improve on what you said. I'll just say, yeah, these
• 15:15
  Speaker 4: are long-term trends. They're influencing our politics. Look at the
• 15:18
  Speaker 4: hostility toward politics. Trade, for example, both parties. Trump's just
• 15:22
  Speaker 4: an extreme sort of version of whimsical, depending on what
• 15:26
  Speaker 4: side of the bed he got up on, tariffs.
• 15:28
  Speaker 3: Like, you don't know which way is up with this guy.
• 15:31
  Speaker 4: But if you're a manufacturer, I'm not speaking for myself.
• 15:34
  Speaker 4: I'm telling you what business people are saying in the press.
• 15:37
  Speaker 4: They're utterly confused and paralyzed by our tariff policy. He's
• 15:41
  Speaker 4: just an extreme example of it. Protectionism would have become
• 15:46
  Speaker 4: ascendant relative to the liberalization we saw in the 80s
• 15:49
  Speaker 4: and 90s either way. And that's in part a reaction
• 15:52
  Speaker 4: to the trends that you mentioned, declining real wages, declining
• 15:59
  Speaker 4: real wage growth, excuse me, and growth in asset prices,
• 16:04
  Speaker 4: including homes, favoring mainly people who already had money.
• 16:07
  Speaker 3: Absolutely.
• 16:07
  Speaker 2: We've seen homes, the average monthly home payment on mortgages
• 16:11
  Speaker 2: has gone up 57% in that same span of time.
• 16:15
  Speaker 2: Speaking of tariffs, the Canadian tariffs have been in the
• 16:19
  Speaker 2: news over the last few days or so. Canada announced
• 16:22
  Speaker 2: on Tuesday. tariffs on roughly $ 20 billion of U.S. goods
• 16:28
  Speaker 2: days after the U.S. escalated our trade tensions on them
• 16:33
  Speaker 2: for $ 20 billion of Canadian goods. This is just further
• 16:38
  Speaker 2: bitterness between the two countries. I could get into the
• 16:42
  Speaker 2: nitty-gritty of what the tariffs are being imposed on, but
• 16:47
  Speaker 2: we've seen this song and dance before. Mark and I
• 16:51
  Speaker 2: and others on the show have covered this long enough
• 16:53
  Speaker 2: to know that ultimately these are fickle and they move
• 16:58
  Speaker 2: quite quickly. So while the auto imports tariff sits at
• 17:02
  Speaker 2: 25% today, President Trump has threatened to double that tariff
• 17:07
  Speaker 2: to 50%. So For my sanity's sake, I'm just not
• 17:12
  Speaker 2: going to dive into the details. The bottom line is
• 17:15
  Speaker 2: we have enacted some new tariffs against Canada. They have
• 17:18
  Speaker 2: come back with some tariffs that have been levied against us.
• 17:23
  Speaker 4: Bigger picture, the trade deficit didn't improve last year. If
• 17:26
  Speaker 4: that's your objective, all the wild tariff gyrations did nothing.
• 17:32
  Speaker 4: If your objective was to decrease the trade deficit, you failed,
• 17:36
  Speaker 4: if that was the administration's objective last year.
• 17:39
  Speaker 3: I don't know.
• 17:39
  Speaker 4: Their stated objectives are all over the place on this, too.
• 17:42
  Speaker 4: He's mad at Doug Ford, so we're going to put
• 17:44
  Speaker 4: tariffs on Ontario. He's mad at Brazil because they're putting
• 17:47
  Speaker 4: his buddy in jail. We're going to put tariffs on them.
• 17:48
  Speaker 4: I don't know what the objectives are anymore, and I'd
• 17:50
  Speaker 4: define anybody to state them coherently because they're not coherent.
• 17:55
  Speaker 4: But the bottom line is tariffs don't change the balance
• 17:58
  Speaker 4: of payments, which is a little bit more broad than
• 18:00
  Speaker 4: the deficit in goods, because the deficit in goods is
• 18:04
  Speaker 4: a savings problem. at both the federal level and among people, us,
• 18:09
  Speaker 4: it is not an unfair trade problem. We have surpluses
• 18:13
  Speaker 4: with some countries. We have goods deficits with other countries.
• 18:16
  Speaker 4: There are countries that have very high tariffs and a
• 18:19
  Speaker 4: very big goods deficit. There are countries that have very
• 18:22
  Speaker 4: low tariffs and a very, so there's no correlation between
• 18:25
  Speaker 4: tariffs and balance of trade. It is entirely the wrong
• 18:29
  Speaker 4: way to go about fixing this problem. Once again, with
• 18:33
  Speaker 4: the current administration, much like with the fiscal issue we
• 18:36
  Speaker 4: were talking about in the last hour. You want to
• 18:38
  Speaker 4: get long-term interest rates down? Shrink the deficit. Same solution, conveniently,
• 18:42
  Speaker 4: for the trade deficit. You want to get the trade
• 18:44
  Speaker 4: deficit down? Increase national savings. They're not pulling the levers
• 18:47
  Speaker 4: they have control over in favor of theatrics and bluster,
• 18:51
  Speaker 4: and it's not helping anybody.
• 18:53
  Speaker 2: The tariff situation is ongoing, and we'll keep you apprised
• 18:57
  Speaker 2: of that. But like I said, again, some battling back
• 19:00
  Speaker 2: and forth between Canada and and the US. Taking a
• 19:03
  Speaker 2: look around at markets, a very flat day. The Dow
• 19:05
  Speaker 2: Jones is off about 115 points and the S &
• 19:08
  Speaker 2: P 500 basically flat. We're going to have much more
• 19:11
  Speaker 2: on the markets with Wall Street Watch right after this break.
• 19:13
  Speaker 3: Stick with us.
• 19:17
  Speaker 1: Bringing the latest financial news straight to your radio every day.
• 19:21
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
• 19:27
  Speaker 1: right now for wall street watch tracking the stocks the
• 19:30
  Speaker 1: data and the headlines driving markets so far today right
• 19:34
  Speaker 1: here on the financial exchange radio network.
• 19:37
  Speaker 5: Well it's officially nvidia earnings day and markets are mostly
• 19:41
  Speaker 5: quiet dipping into negative territory ahead of the chip and
• 19:45
  Speaker 5: ai giants earnings report due out after today's closing bell
• 19:49
  Speaker 5: right now the dows down about a quarter percent or
• 19:51
  Speaker 5: 144 points lower. S & P 500 down only five points,
• 19:56
  Speaker 5: mostly unchanged. NASDAQ down over a quarter percent or 72
• 20:00
  Speaker 5: points lower. Russell 2000 also off about a quarter percent.
• 20:04
  Speaker 5: 10-year Treasury yield is up one basis point at 4.65%.
• 20:06
  Speaker 1: And oil....
• 20:10
  Speaker 5: Dipping, trading at $ 82 a barrel. Breaking news from Meta
• 20:15
  Speaker 5: after it agreed to an $ 18 billion settlement with a
• 20:18
  Speaker 5: group of state attorneys general over social media's harm to teenagers.
• 20:22
  Speaker 5: With the settlement, Meta will implement a default two-hour daily
• 20:27
  Speaker 5: time limit on Facebook and Instagram for users under the
• 20:32
  Speaker 5: age of 18. Meta is up by 2%. Meanwhile, shares
• 20:36
  Speaker 5: in Intuit dropping 4% after its fiscal 2027 guidance disappointed.
• 20:41
  Speaker 5: The company plans to attract new TurboTax customers, potentially with
• 20:45
  Speaker 5: free offerings, despite a short-term hit to its do-it-yourself tax business. J.M.
• 20:51
  Speaker 5: Smucker is up by 2% after the owner of Jif
• 20:54
  Speaker 5: Peanut Butter and Folgers Coffee reported higher than expected adjusted
• 20:58
  Speaker 5: earnings and sales. And Zoom Communications is now down by
• 21:01
  Speaker 5: 7% after its current quarter guidance fell short. of street forecasts.
• 21:08
  Speaker 5: I'm Tucker Silva and that is Wall Street Watch.
• 21:13
  Speaker 2: Soaring diesel prices are helping oil companies but hurting consumers.
• 21:17
  Speaker 2: We now sit with the cost of diesel, according to
• 21:21
  Speaker 2: AAA Motor Club on Wednesday, at $ 5. 62 a gallon. That's
• 21:26
  Speaker 2: 53% higher than it was a year ago. This has
• 21:30
  Speaker 2: been from, you know, largely covered all the energy increases
• 21:35
  Speaker 2: in price that we've seen. Numerous factors contribute to this,
• 21:39
  Speaker 2: of course. The war between the U.S. and Iran has
• 21:42
  Speaker 2: seen the volume of crude that's being refined in the
• 21:45
  Speaker 2: Middle East shrink from 8 million barrels per day in
• 21:50
  Speaker 2: 2025 to 1.6 million barrels per day in 2026, according
• 21:55
  Speaker 2: to S & P Global Analyst Reports. Then you also
• 21:58
  Speaker 2: have another issue that is being dealt with in the
• 22:02
  Speaker 2: energy markets, the war between Russia and Ukraine. Ukraine has
• 22:05
  Speaker 2: had many drone attacks on Russian refineries that has impacted
• 22:11
  Speaker 2: their refining capacity in Russia, in which now they are
• 22:14
  Speaker 2: only doing about 3.9 million barrels per day, down from 5.3
• 22:20
  Speaker 2: million barrels. And this has had a significant impact, Mark,
• 22:24
  Speaker 2: year to date on some of the inflationary pressure that
• 22:26
  Speaker 2: we've seen. Of course, when the Federal Reserve looks at this,
• 22:29
  Speaker 2: they They strip out the impacts of energy, which tend
• 22:31
  Speaker 2: to be sort of one-time shocks in one direction or another.
• 22:34
  Speaker 2: But this certainly has a significant impact on businesses and
• 22:38
  Speaker 2: leading to higher prices for consumers.
• 22:40
  Speaker 4: Yeah, this is one of the ways in which the
• 22:42
  Speaker 4: oil price shock will propagate gradually throughout the economy. And
• 22:46
  Speaker 4: the Fed can't help but.
• 22:51
  Speaker 3: Sorry.
• 22:53
  Speaker 4: I'm having mic position issues today.
• 22:56
  Speaker 3: Am I a little off balance? What is it?
• 22:59
  Speaker 2: He's like in the batter's box, but he's got a
• 23:03
  Speaker 2: foot out.
• 23:05
  Speaker 4: Sorry for the inside radio here, everybody. What if I
• 23:08
  Speaker 4: turn it this way and I look at Paul this way?
• 23:11
  Speaker 3: See the microphone? Talk into it. Continue. Diesel, go. So
• 23:18
  Speaker 3: the Fed has to think about, even though... What, am
• 23:20
  Speaker 3: I still off? Go, go!
• 23:22
  Speaker 4: Talk!
• 23:23
  Speaker 3: No, now I don't want to. The Fed's got.
• 23:27
  Speaker 4: Look, the Fed can't... It's often said the Fed can't
• 23:29
  Speaker 4: pump more oil, etc.
• 23:31
  Speaker 3: etc.
• 23:32
  Speaker 4: That is an unhelpful, trite, frankly just dumb thing to say.
• 23:38
  Speaker 4: The point is not that the Fed can prevent supply shocks,
• 23:43
  Speaker 4: like an increase in the price of oil. And that's
• 23:44
  Speaker 4: a bad one. There are good ones, too, like when AI...
• 23:47
  Speaker 4: increases productivity, if not when.
• 23:50
  Speaker 3: If, most people think it's a when.
• 23:52
  Speaker 4: But the Fed can do something about how we respond
• 23:56
  Speaker 4: to those supply shocks. And if inflation expectations go up,
• 24:00
  Speaker 4: which they have, the Fed has to consider that people
• 24:03
  Speaker 4: may demand higher wages, companies may, in anticipation of increased costs,
• 24:09
  Speaker 4: pass through price increases so they can afford the higher
• 24:12
  Speaker 4: priced inventory and inputs. And this is how inflation becomes entrenched,
• 24:17
  Speaker 4: which is why the Fed can't afford to wait too
• 24:18
  Speaker 4: long in response.
• 24:20
  Speaker 3: To supply shocks.
• 24:21
  Speaker 4: We saw the detrimental effect of waiting too long in 2021, 2022,
• 24:26
  Speaker 4: when a good part, not all, and researchers disagree on
• 24:31
  Speaker 4: exactly how much, but at least part, probably most of
• 24:35
  Speaker 4: the inflation in that period was supply shock driven due
• 24:38
  Speaker 4: to COVID restrictions and supply chain malfunctioning and stuff like that.
• 24:45
  Speaker 2: Mark, I really loved your stance there. You're back in
• 24:48
  Speaker 2: the game, man. You're looking good.
• 24:50
  Speaker 3: I'm facing you, actually talking into the microphone.
• 24:53
  Speaker 2: Mark's having a rough day here, so retirement might be
• 24:56
  Speaker 2: something that he's kicking around as poor Tucker berates him
• 24:59
  Speaker 2: over the course of the show. But retirement isn't just
• 25:02
  Speaker 2: one stage of life. It changes over time. and your
• 25:05
  Speaker 2: home should change with it. This is Paul Lane from
• 25:08
  Speaker 2: the Armstrong Advisory Group. You may have heard of the
• 25:10
  Speaker 2: go-go years when you're traveling and enjoying the freedom you've
• 25:14
  Speaker 2: worked so hard to earn. Then come the slow-go years.
• 25:18
  Speaker 2: when convenience starts to matter more, and eventually the no-go years,
• 25:22
  Speaker 2: when safety and support take center stage. The question is,
• 25:26
  Speaker 2: will your home be ready for each of those changes?
• 25:29
  Speaker 2: Our new guide, Navigating Retirement Housing Choices, shows you how
• 25:34
  Speaker 2: different housing options can fit each stage of retirement, from
• 25:38
  Speaker 2: staying in your home to downsizing to exploring elder life communities.
• 25:43
  Speaker 2: You'll learn what questions to ask before you are forced
• 25:46
  Speaker 2: to make a decision. Get your free copy today by
• 25:49
  Speaker 2: calling us at 800-393-4001. Again, that's 800-393-4001. Or request the
• 25:59
  Speaker 2: guide at armstrongadvisory.com.
• 26:02
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 26:04
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 26:07
  Speaker 1: Armstrong guide is specific financial, legal, or tax advice. Consult
• 26:10
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 26:13
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 26:16
  Speaker 1: advisory services.
• 26:17
  Speaker 2: Really exciting development here from a company by the name
• 26:21
  Speaker 2: of Revolution Medicines. They had presented some of their results
• 26:25
  Speaker 2: on a pancreatic cancer drug last spring, and the results
• 26:29
  Speaker 2: were met with a one-minute standing ovation just in terms
• 26:33
  Speaker 2: of a tremendous breakthrough that they made. Now the FDA
• 26:36
  Speaker 2: has approved the drug for pancreatic cancer that Revolution Medicines
• 26:41
  Speaker 2: is behind. This is a huge milestone in pancreatic cancer treatments.
• 26:46
  Speaker 2: This drug was able to allow for those people with
• 26:51
  Speaker 2: pancreatic cancer to live more than 13 months, nearly twice
• 26:55
  Speaker 2: as long as what chemotherapy would provide alone. It does
• 27:00
  Speaker 2: have side effects associated with it, but this particular cancer,
• 27:04
  Speaker 2: pancreatic cancer, falls in a class of cancers that researchers
• 27:08
  Speaker 2: have been trying to target for pancreatic decades. Since the
• 27:12
  Speaker 2: early 1980s, there has been the small number of mutated
• 27:17
  Speaker 2: genes that have driven a lot of human cancers. This
• 27:20
  Speaker 2: is the first of its kind where a drug has
• 27:22
  Speaker 2: been able to go after the protein mutations that have
• 27:27
  Speaker 2: been really the cause of a lot of cancers and
• 27:30
  Speaker 2: probably a lot of loss of lives for many of
• 27:33
  Speaker 2: our loved ones out there. So certainly a great development
• 27:36
  Speaker 2: that we want to highlight by Revolution Medicines here in
• 27:39
  Speaker 2: getting that approval. So hopefully this will stimulate a lot
• 27:44
  Speaker 2: more drug discovery in this area and will enable for
• 27:48
  Speaker 2: cures in other spots. It seems like it's been a
• 27:51
  Speaker 2: real good couple of weeks here for the development of
• 27:54
  Speaker 2: cancer drugs, and we hope that momentum continues. Taking a
• 27:57
  Speaker 2: look around at markets again, it's been a very quiet
• 28:01
  Speaker 2: day here in early trading with the S & P
• 28:04
  Speaker 2: off only about a point or two here and the
• 28:06
  Speaker 2: Dow Jones off about 150 points. We will have NVIDIA
• 28:10
  Speaker 2: reporting earnings at the close of the bell today. So
• 28:13
  Speaker 2: we'll see what impact that may have on markets tomorrow,
• 28:17
  Speaker 2: but markets relatively quiet at the moment. We're going to
• 28:20
  Speaker 2: take a quick break here on the financial exchange. When
• 28:22
  Speaker 2: we come back, a little bit of stack roulette right
• 28:24
  Speaker 2: after this.
• 28:26
  Speaker 1: Stay informed and prepared for market changes and breaking business news.
• 28:30
  Speaker 1: The Financial Exchange is live every day on YouTube. Tune in, subscribe,
• 28:34
  Speaker 1: and keep up to date on all of our show's
• 28:36
  Speaker 1: content on a daily basis. This is the Financial Exchange
• 28:40
  Speaker 1: Radio Network.
• 28:46
  Speaker 5: The Financial Exchange is a proud partner of the Disabled
• 28:50
  Speaker 5: American Veterans Department of Massachusetts, and this year's 5K is
• 28:54
  Speaker 5: officially sold out. The race will take place on Saturday,
• 28:59
  Speaker 5: November 7th at Fort Independence on Castle Island, and we
• 29:02
  Speaker 5: hope you can take this opportunity to consider making a donation.
• 29:07
  Speaker 5: Your gifts help provide vital services like free transportation to
• 29:11
  Speaker 5: medical appointments and safe housing for single veterans alike. and
• 29:15
  Speaker 5: their families. Donate today at DAV5K. Boston. That's DAV5K. Boston.
• 29:21
  Speaker 2: All right, time for a little bit of Stack Roulette.
• 29:23
  Speaker 2: I will let Mr. Fandetti bat lead off. What do
• 29:26
  Speaker 2: you got for me, Mark?
• 29:27
  Speaker 4: Did you see the story about Bill Gates? This is
• 29:29
  Speaker 4: in the Financial Times. I don't know if it was
• 29:31
  Speaker 4: reported elsewhere, calling for human-reserved jobs to be protected from AI.
• 29:37
  Speaker 2: I did see that. He also proposed a tax on
• 29:40
  Speaker 2: on AI tokens to help fund a social safety net,
• 29:43
  Speaker 2: which doesn't really seem like the Bill Gates that I
• 29:46
  Speaker 2: knew over his time at Microsoft.
• 29:49
  Speaker 4: What are human-reserved jobs, and would anybody actually want them?
• 29:53
  Speaker 4: I mean, the examples he gives in health, for example,
• 29:57
  Speaker 4: Gates says... Imagine a robot giving you the awful news
• 30:00
  Speaker 4: that you have an incurable disease. Well, you haven't met
• 30:04
  Speaker 4: my GP, first of all. I'm not sure that would
• 30:06
  Speaker 4: be a downgrade.
• 30:08
  Speaker 1: No, just kidding.
• 30:09
  Speaker 2: There are some doctors out there that have very poor
• 30:12
  Speaker 2: bedside manners.
• 30:12
  Speaker 4: Their bedside manners are sort of stoic, which I respect,
• 30:15
  Speaker 4: but might not go over.
• 30:16
  Speaker 1: Well with a lot of people.
• 30:17
  Speaker 2: I can tell you, my wife during pregnancies did not
• 30:20
  Speaker 2: take to those approaches too well. That was not the
• 30:23
  Speaker 2: way to approach it.
• 30:24
  Speaker 3: The sort of clear-eyed factual.
• 30:26
  Speaker 2: Yeah, the clear-eyed factual or bringing up, you know, the
• 30:28
  Speaker 2: off chances of certain rare conditions developing.
• 30:31
  Speaker 3: Of course, they have to disclose that.
• 30:32
  Speaker 2: They have to do that, but there's a way to
• 30:35
  Speaker 2: deliver that, you know. more easily than others.
• 30:38
  Speaker 4: Yeah, don't bury the lead there. The lead there is
• 30:40
  Speaker 4: that the probability is like infinitesimal.
• 30:43
  Speaker 1: Exactly.
• 30:44
  Speaker 3: Not this is what could happen.
• 30:46
  Speaker 2: Yeah, there's some failures there. But anyway, doctors, they all
• 30:49
  Speaker 2: have a different style.
• 30:50
  Speaker 4: So, yeah, Gates kind of sounding the alarm about AI's
• 30:55
  Speaker 4: potential to displace the.
• 30:58
  Speaker 3: to displace.
• 30:58
  Speaker 4: Workers and that's true of any general-purpose technology or any
• 31:01
  Speaker 4: technology for that matter i guess the argument here is
• 31:05
  Speaker 4: that a i will do it more quickly because it's
• 31:07
  Speaker 4: advancing so rapidly and put a question mark at the
• 31:09
  Speaker 4: end of that because i is that is that there
• 31:12
  Speaker 4: is that this is different than uh.
• 31:15
  Speaker 4: I don't know the cotton gin or or electricity or
• 31:19
  Speaker 4: conscience not general purpose but you know what i mean
• 31:21
  Speaker 4: this is going to advance so fast because it can
• 31:23
  Speaker 4: improve itself that it has the potential to displace large
• 31:27
  Speaker 4: swaths of the workforce all at once?
• 31:30
  Speaker 3: Is that it?
• 31:31
  Speaker 2: Yeah, I mean, this is not a new suggestion by
• 31:34
  Speaker 2: a billionaire.
• 31:36
  Speaker 1: Oh, really?
• 31:36
  Speaker 4: Somebody suggested actually cordoning off certain parts of the labor force?
• 31:39
  Speaker 5: No, no, no.
• 31:40
  Speaker 3: Sorry, that is new. That's what struck me as weird. Yeah,
• 31:43
  Speaker 3: that is new.
• 31:44
  Speaker 2: You're right. The phenomenon of suggesting that there's going to
• 31:47
  Speaker 2: be job loss is more specifically what I was saying,
• 31:49
  Speaker 2: but I get what you're saying, that this is perhaps new.
• 31:51
  Speaker 4: Is there something different about AI that requires that we
• 31:56
  Speaker 4: actually say, No AI in healthcare jobs.
• 32:00
  Speaker 3: I'm just trying to get it.
• 32:02
  Speaker 2: What's his angle here? I mean, clearly he's been, I
• 32:05
  Speaker 2: don't want to get into this, but he's been dragged
• 32:07
  Speaker 2: around in the public a lot.
• 32:08
  Speaker 4: He's contemplating his mortality more and regretting some of the.
• 32:11
  Speaker 2: I feel like this is a little bit of that,
• 32:13
  Speaker 2: and we're not going to touch that other subject with
• 32:16
  Speaker 2: a 10-foot pole, but he hasn't been.
• 32:17
  Speaker 3: Oh, I wasn't even going there.
• 32:18
  Speaker 4: I was just going, you know, a life in business
• 32:20
  Speaker 4: and making tough decisions and feeling like.
• 32:23
  Speaker 2: His reputation has come under question over the course of
• 32:26
  Speaker 2: the last few years. And it seems like this is
• 32:28
  Speaker 2: perhaps a motivation to appeal to the general public and
• 32:32
  Speaker 2: sort of mortality may be part of this too, as
• 32:36
  Speaker 2: he's this white knight coming in to protect the general
• 32:39
  Speaker 2: populace from this very sophisticated technology.
• 32:41
  Speaker 3: So this is like a PR rescue mission, maybe?
• 32:44
  Speaker 2: Again, that's how I read it from my armchair here,
• 32:46
  Speaker 2: but you always have to think back to what is
• 32:49
  Speaker 2: the motivation?
• 32:49
  Speaker 3: Boy, you're cynical, Paul. What is his motivation to do this, ultimately?
• 32:55
  Speaker 3: What's the Pope's motivation?
• 32:57
  Speaker 4: I don't know.
• 32:57
  Speaker 3: A little PR job there? No, I'm kidding. Maybe you're right.
• 32:59
  Speaker 3: I don't know.
• 33:00
  Speaker 4: I just don't know how you insulate, how you air
• 33:05
  Speaker 4: gap a bunch of.
• 33:09
  Speaker 2: Wouldn't you argue his, the prevalence of all of Microsoft
• 33:13
  Speaker 2: software probably took a lot of jobs out as well?
• 33:15
  Speaker 1: Yeah.
• 33:16
  Speaker 3: Do you ever see, sometimes internally I show the chart
• 33:18
  Speaker 3: of typist jobs.
• 33:19
  Speaker 1: Right.
• 33:19
  Speaker 3: Went from a million to zero.
• 33:20
  Speaker 2: Yep.
• 33:21
  Speaker 4: Nobody really laments that. I'm sure a lot of older people,
• 33:24
  Speaker 4: especially who couldn't be retrained on... what we now call
• 33:27
  Speaker 4: MS Office, just a word processor, a computer-based word processor.
• 33:31
  Speaker 4: They were out of the labor force, but nobody laments it.
• 33:33
  Speaker 4: In fact, Microsoft Office or the equivalent is universally viewed
• 33:39
  Speaker 4: as like a miracle for those of us that worked
• 33:41
  Speaker 4: in the previous era.
• 33:43
  Speaker 2: Yeah, so it seems a little counter to what his
• 33:46
  Speaker 2: career was built upon. Maybe his argument is it's different
• 33:49
  Speaker 2: this time.
• 33:50
  Speaker 3: Yeah, I think that is the essence of it.
• 33:52
  Speaker 1: I guess.
• 33:53
  Speaker 3: No, you're right.
• 33:54
  Speaker 4: He's the biggest destroyer of jobs probably alive.
• 33:57
  Speaker 2: I would think so.
• 33:58
  Speaker 3: In a good way, though. It's creative. A lot of productivity.
• 34:01
  Speaker 3: It's salutary destruction, if that does it.
• 34:03
  Speaker 2: So it just seems like a bit of a pivot
• 34:05
  Speaker 2: from where he was.
• 34:06
  Speaker 3: I just thought it was weird before. No, I'm with you.
• 34:08
  Speaker 1: I'm glad that.
• 34:09
  Speaker 2: You pointed out I'm going to talk here about the
• 34:11
  Speaker 2: Mark Walter story because this sort of intersects many of
• 34:14
  Speaker 2: my interests. He has an ownership stake in he owns
• 34:19
  Speaker 2: the Los Angeles Lakers. That sale is now. in process,
• 34:23
  Speaker 2: I believe, at $ 12. 5 billion. So Mark Walter runs TWG Global,
• 34:30
  Speaker 2: which has two insurance companies under its umbrella. And there
• 34:34
  Speaker 2: has been all sorts of scrutiny on his business endeavors
• 34:38
  Speaker 2: and how it relates to those businesses funding some of
• 34:42
  Speaker 2: his investments in the most prominent franchises that you can
• 34:46
  Speaker 2: think of on the sports front, the Lakers being one
• 34:48
  Speaker 2: of them. And he's also the owner of the Dodgers
• 34:51
  Speaker 2: and has some ownership stakes in Chelsea football and some
• 34:53
  Speaker 2: other sports franchises as well. And what's been most scrutinized
• 34:58
  Speaker 2: is he owns these two insurance companies under his TWG
• 35:01
  Speaker 2: global umbrella. There are premiums that are paid in to
• 35:05
  Speaker 2: these insurers that. the insurers have the ability to go
• 35:09
  Speaker 2: out and invest the dollars that are overlaid by listeners
• 35:13
  Speaker 2: like you and others out there. And there's always been
• 35:17
  Speaker 2: a component that's been rising over the course of the
• 35:19
  Speaker 2: last decade or so of private investment exposure for those premiums. Walter, again,
• 35:26
  Speaker 2: all of this is alleged and needs to be sort
• 35:29
  Speaker 2: of bared out, but he at least misrepresented how much
• 35:34
  Speaker 2: of that money was being invested into these private investment endeavors.
• 35:38
  Speaker 2: And it's just been a fascinating story to follow. He
• 35:41
  Speaker 2: made about a 20% profit in a course of a
• 35:44
  Speaker 2: year on his Los Angeles Lakers ownership stake. The buses
• 35:48
  Speaker 2: had sold a majority stake to him just about a
• 35:50
  Speaker 2: year ago, but now Josh Kushner and Bob Iger are
• 35:55
  Speaker 2: buying the Lakers for at $ 12. 5 billion. And today, the
• 35:59
  Speaker 2: reason that it's in the news is that TW Global
• 36:02
  Speaker 2: has blasted the multi-pronged attacks against its holding company, saying
• 36:06
  Speaker 2: that despite what has been reported, there has been no
• 36:09
  Speaker 2: fraud in the company. So a story that I continue
• 36:14
  Speaker 2: to follow.
• 36:14
  Speaker 1: Yes.
• 36:15
  Speaker 3: No, no fraud.
• 36:16
  Speaker 4: Fraud is a legal term, so I'm not sure that's
• 36:18
  Speaker 4: going to satisfy you. I've not been following this closely.
• 36:21
  Speaker 4: I shouldn't have an opinion.
• 36:23
  Speaker 2: I have been following it very closely.
• 36:24
  Speaker 3: But when you use the word fraud, you use it advisedly.
• 36:27
  Speaker 2: I haven't said that.
• 36:29
  Speaker 3: No, not you. You were quoting somebody. Yes, this is
• 36:31
  Speaker 3: from T.W.
• 36:33
  Speaker 2: Goble.
• 36:33
  Speaker 3: Excuse me. He signed off on it. That has come
• 36:35
  Speaker 3: out with this statement.
• 36:36
  Speaker 4: I'm just saying, if somebody said to me, well, I
• 36:38
  Speaker 4: didn't defraud you, that's an awfully careful choice of words.
• 36:42
  Speaker 3: Very, very well put. That's sort of what I meant.
• 36:44
  Speaker 1: Exactly.
• 36:44
  Speaker 2: Yeah, I think it is a very well... It's a
• 36:47
  Speaker 2: specifically used phrase of fraud.
• 36:49
  Speaker 3: It has legal meaning.
• 36:50
  Speaker 4: They're using it, I suspect, because the statement was drafted
• 36:52
  Speaker 4: or at least reviewed by lawyers.
• 36:53
  Speaker 3: In the legal sense.
• 36:54
  Speaker 2: But certainly, they knew that they were skewing at least
• 37:00
  Speaker 2: regulatory requirements in terms of how investments should be set
• 37:04
  Speaker 2: up within the private space.
• 37:07
  Speaker 3: Mark is nodding. If you're explaining yourself on this, not you, them,
• 37:11
  Speaker 3: you're in trouble.
• 37:12
  Speaker 2: So we'll continue to follow that story. But TJB will
• 37:15
  Speaker 2: go punching back at the claims of fraud and Mark
• 37:19
  Speaker 2: Walters business practices. Taking a look around at markets, Dow
• 37:23
  Speaker 2: Jones off about 115 points. The S & P 500
• 37:27
  Speaker 2: off about five.
• 37:28
  Speaker 1: And the U.S.
• 37:28
  Speaker 2: 10-year Treasury is sitting up two base points at 4.66%.
• 37:31
  Speaker 2: NVIDIA is going to report earnings at the close of
• 37:35
  Speaker 2: the bell. We'll have that and much more on our
• 37:37
  Speaker 2: program first thing tomorrow morning. Thanks so much for joining us.