Latest / The Financial Exchange Show / Meta’s AI Pivot Raises New Questions About the Boom

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Meta’s AI Pivot Raises New Questions About the Boom · The Financial Exchange Show

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• 1:12
  Speaker 2: Good morning.
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  Speaker 3: As we head into the eleven o'clock hour of the
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  Speaker 3: Financial Exchange, markets have taken a bit of a turn
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  Speaker 3: for the worst. NASDAC now off about six tenths percent.
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  Speaker 3: The SMP just dipped negative in the Dow Jones, holding
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  Speaker 3: on to its gains about three quarters of a percent,
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  Speaker 3: adding to pressure that we've seen this week on memory
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  Speaker 3: chip stocks and the tech sector generally. It's Mike, Mark
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  Speaker 3: and Ben with you here on a Thursday ahead of
• 1:38
  Speaker 3: the two fiftieth July fourth holiday. Markets closed tomorrow, as
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  Speaker 3: is the Financial Exchange. Won't be live tomorrow on the program,
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  Speaker 3: but this morning at eight thirty am, we did receive
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  Speaker 3: a monthly jobs report for the month of June indicated
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  Speaker 3: a just a bit of a slowdown in terms of
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  Speaker 3: the pace of high So to summarize last year was
• 2:02
  Speaker 3: a big slow down in the pace of hiring, barely
• 2:06
  Speaker 3: barely flat in terms of total job creation for calendar
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  Speaker 3: year twenty twenty five, I think we averaged maybe five
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  Speaker 3: or ten thousand jobs per month, not a lot, not
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  Speaker 3: enough to keep the unemployment from rate from rising. We
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  Speaker 3: hit four point five percent towards the end of last
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  Speaker 3: year since the beginning of the year.
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  Speaker 2: Call it what you want.
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  Speaker 3: Could be concerns about terriffs being behind us, It could
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  Speaker 3: be the AI boom, it could be any number of things.
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  Speaker 2: Pace of job creation ticked up.
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  Speaker 3: We were running one hundred plus thousand jobs a month,
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  Speaker 3: even with the revisions that we got this morning, still
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  Speaker 3: running around ninety thousand jobs created per month, which I
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  Speaker 3: don't know. Most economists that you see cited say, you know,
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  Speaker 3: neutral rate of job creation somewhere in that range. Are
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  Speaker 3: we above neutral in terms of keeping the unemployment rate steady?
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  Speaker 4: Yeah, So you're asking how many jobs need to be
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  Speaker 4: added from payrolls to keep unemployment. Yeah, it's tough because
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  Speaker 4: they do come from different surveys. But people estimated statistically,
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  Speaker 4: depending on the assumptions you want to make, anywhere between
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  Speaker 4: eighty and one to twenty.
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  Speaker 2: And you said, we're like right right in the little
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  Speaker 2: smack dab in the middle of that.
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  Speaker 3: But the jobs report this morning, which was expected to
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  Speaker 3: show another one hundred and fifteen ish thousand jobs created,
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  Speaker 3: instead came in with fifty seven thousand, well below expectations. Furthermore,
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  Speaker 3: they put in revisions that resulted in our understanding of
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  Speaker 3: how many jobs were created in April and May at
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  Speaker 3: about seventy four thousand fewer, So a pretty dramatic revision
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  Speaker 3: for April and May. We'll see how June gets revised
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  Speaker 3: as well, because they do these revisions regularly. And the
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  Speaker 3: unemployment rate ticked down a little bit down to four
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  Speaker 3: point two percent, but the surveys indicated that that was
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  Speaker 3: mainly because of people leaving the labor force rather than
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  Speaker 3: getting new jobs over the course of June. So I
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  Speaker 3: think you can look at this job's report and say
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  Speaker 3: not had astrophic by any stretch, but I'd probably give
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  Speaker 3: it something like a C. It's not a top notch
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  Speaker 3: jobs report. It kind of is a big change from
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  Speaker 3: our expectations previously.
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  Speaker 2: It does give the Fed some wiggle.
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  Speaker 3: Room here because it's not indicating immense pressure from the
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  Speaker 3: labor market on wages and inflation. But other than that,
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  Speaker 3: I don't think there's much positive to say about it.
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  Speaker 4: Yeah, if some slack is opening up, but that's a
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  Speaker 4: big if, big time because this is one report. And
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  Speaker 4: although they did revise the previous two months worth of
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  Speaker 4: new pay rolls down as you put it out, but
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  Speaker 4: if the job market is softening, that might reduce pressure
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  Speaker 4: on inflation. I say might because it didn't say, for example,
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  Speaker 4: in the nineteen seventies. The dynamics were different then, circumstances
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  Speaker 4: were different then. But there's no iron law that says
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  Speaker 4: rising on employment has to reduce inflation.
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  Speaker 5: It should, but it's not a sure thing.
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  Speaker 3: Well, it's unclear to me that the most recent bount
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  Speaker 3: of inflation that we've seen over the course of the
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  Speaker 3: last let's call it the last year, came from the
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  Speaker 3: labor market.
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  Speaker 5: The first came from demand.
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  Speaker 2: Yeah, if it's supply.
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  Speaker 5: Yeah.
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  Speaker 4: The most recent surge obviously has nothing to do with
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  Speaker 4: excess demand.
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  Speaker 2: But inflation was running hot prior to.
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  Speaker 4: That elevated, Yeah, elevated because the economy was arguably until
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  Speaker 4: last year, the economy didn't run hot. Growth rate was
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  Speaker 4: two point one I think percent, right around trend, So
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  Speaker 4: it slowed down a lot from twenty twenty three and
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  Speaker 4: twenty twenty four. It's hard to say the Obviously, the
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  Speaker 4: market's impression and probably the FEDS is that this takes
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  Speaker 4: a little bit of pressure off the FED, but it
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  Speaker 4: also in some ways makes the Fed's job trickier at
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  Speaker 4: the same time, because if inflation expectations have remained elevated.
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  Speaker 5: They went up a lot, obviously with the oil price surge.
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  Speaker 4: Worsh pointed out yesterday that they'll probably come down, but
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  Speaker 4: we haven't seen that in the data yet, right, Yeah.
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  Speaker 3: So, speaking of which, So Worsh, the new chairperson of
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  Speaker 3: the Federal Reserve, who took over recently for J. Powell,
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  Speaker 3: was in Portugal at a conference alongside for Encounterparts and
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  Speaker 3: was asked, of course, about inflation and where things stand
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  Speaker 3: right now, and continued his goal of saying as little
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  Speaker 3: as possible around there, but did give some commentary, and
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  Speaker 3: I'll quote here, expectations of future inflation over the last
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  Speaker 3: four weeks have come down. Inflation risks have come down.
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  Speaker 3: I think that seems obvious.
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  Speaker 5: I don't know what he's talking about there.
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  Speaker 4: I don't know what survey he means, maybe something internal
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  Speaker 4: because we haven't gotten any data.
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  Speaker 3: I think if you're continuing to talk about what was
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  Speaker 3: causing the inflation.
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  Speaker 4: No, I know what he's I don't know which survey
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  Speaker 4: he's referring to. Fair Like, I haven't seen any inflation expectation.
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  Speaker 4: It should He's right, very highly correlated with gas prices, right,
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  Speaker 4: but not clear that it's actually happening.
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  Speaker 3: But he continued to say, I think the most important thing,
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  Speaker 3: which was that anyone expecting the Fed would tolerate inflation
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  Speaker 3: running above two percent would be disappointed in his comments.
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  Speaker 3: So he continues to stick with the overall message, which
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  Speaker 3: is inflation's too hot and we are going to see
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  Speaker 3: it come down. He's applauding some expectations changes that he
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  Speaker 3: has determined when it comes to inflation, but overall this
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  Speaker 3: may be contributing a little bit to expectations around future
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  Speaker 3: interest rates as well, as we saw according to CMME group,
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  Speaker 3: you know, likelihood of a rate hike at the next
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  Speaker 3: meeting coming down. Over the course the last two days
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  Speaker 3: between this Job's report and this commentary from Wash, anything
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  Speaker 3: else catch your eye in terms of his commentary out
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  Speaker 3: of Portugal.
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  Speaker 4: Now, I like the fact that he continues to hammer
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  Speaker 4: on price stability. He's going to convince us, all of
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  Speaker 4: us people listening to you and me, that he's hell
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  Speaker 4: bent on subduing inflation. And I he said whatever he
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  Speaker 4: needed to say to Trump to get the job, and
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  Speaker 4: he obviously convinced Trump that he would be accommodating of
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  Speaker 4: Trump's wishes for if possible, if there's any thread that
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  Speaker 4: you can grab onto to justify lower interest rates. He
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  Speaker 4: seemed to convince the President that he would grab that
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  Speaker 4: thread and run with it. But at heart, I think
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  Speaker 4: he's a hard money man, which is an old expression.
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  Speaker 4: It means exactly yeah, yeah, it comes from not a
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  Speaker 4: fan of paper.
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  Speaker 5: It comes from that era. Obviously.
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  Speaker 4: He prefers low inflation to slightly lower unemployment, if you
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  Speaker 4: if you got him to be honest about it and
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  Speaker 4: seemingly never testify to that effect.
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  Speaker 3: Prefers less interference from the Fed than more big proponents
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  Speaker 3: of stepping away from and everything else.
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  Speaker 4: If you asked him. The Fed's job is to grow
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  Speaker 4: the money supply at a rate that doesn't overstimulate the
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  Speaker 4: economy full stop like and by that I mean keeps
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  Speaker 4: overall demand and balance with overall supply. Because when the
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  Speaker 4: Fed errs, it errs by creating too much demand. It
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  Speaker 4: eases monetary policy by printing money, lowering interest rates, stimulating demand.
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  Speaker 4: The economy runs an excess of its speed limit. That's
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  Speaker 4: one way to get inflation. There's the supply that's like,
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  Speaker 4: that's demand pull inflation, if you want to use that terminology.
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  Speaker 5: It may have run into.
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  Speaker 4: As opposed to cost push push excuse me to continue
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  Speaker 4: with this sort of framework, which can come from supply
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  Speaker 4: shocks like oil going up, worsh gets all this. So
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  Speaker 4: I'm pleased with his discipline. I think he's largely hitting
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  Speaker 4: exactly the right note at least that a skeptic like me,
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  Speaker 4: he's saying things that a skeptic like me needed to hear.
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  Speaker 3: I just like that he's pissing off the media and
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  Speaker 3: not talking a lot. That's the most undertakings to me,
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  Speaker 3: is just that the frustration that you hear from those
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  Speaker 3: who are asking him questions and him basically just saying,
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  Speaker 3: you know, I'm not really going to comment on that
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  Speaker 3: for now.
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  Speaker 2: Love it.
• 9:56
  Speaker 3: Let's take a quick break. When we come back, Trivia
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  Speaker 2: Munsey it was a gar Gary Indiana.
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  Speaker 3: Ah, sorry to rip On Munsey and Gary Indiana. That's
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  Speaker 3: not fair, Sorry to Oliver Indiana listeners. A new threat
• 12:02
  Speaker 3: to Meta's AI clouds soft bank is crashing into this
• 12:05
  Speaker 3: crowded party. So if you missed it, MetaStock got a
• 12:08
  Speaker 3: big lift this week. Stocks up about eight percent this week.
• 12:11
  Speaker 3: It's down four today, so it was up a fair
• 12:14
  Speaker 3: bit more yesterday. But Meta announced that they are going
• 12:19
  Speaker 3: to be pivoting some of their AI plans. And I'll
• 12:24
  Speaker 3: tell you this only means one thing to me unless
• 12:26
  Speaker 3: I'm completely misinterpreting it here. But Meta wants to build
• 12:31
  Speaker 3: a cloud business to sell excess artificial intelligence computing power,
• 12:37
  Speaker 3: which they don't have right now. Meta doesn't currently have
• 12:40
  Speaker 3: any spare capacity to sell, and they've been unable to
• 12:44
  Speaker 3: purchase the capacity from Google that it needed in order
• 12:47
  Speaker 3: to build their superintelligence and AI apps, So presumably they
• 12:53
  Speaker 3: need to shut that stuff down to some degree in
• 12:56
  Speaker 3: order to sell the capacity that they currently have to
• 13:00
  Speaker 3: high bidders like Anthropic.
• 13:01
  Speaker 2: Now this end and of itself.
• 13:03
  Speaker 3: You know, if you do have spare capacity like SpaceX
• 13:06
  Speaker 3: does at the moment. They've made a killing on selling
• 13:08
  Speaker 3: their compute power to other big AI customers who actually
• 13:12
  Speaker 3: have a desirable app. But as we did with SpaceX,
• 13:16
  Speaker 3: the criticism here is you only have this capacity because
• 13:19
  Speaker 3: your own AI apps don't do anything cool XAI. You know,
• 13:23
  Speaker 3: Grock was useless and so people stopped using it, and
• 13:26
  Speaker 3: so SpaceX had a bunch of AI capacity to sell.
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  Speaker 2: It.
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  Speaker 3: All reads to me is an admission that Meta has
• 13:33
  Speaker 3: no idea what to do with AI and while they
• 13:35
  Speaker 3: may have been able to use it to I don't know,
• 13:40
  Speaker 3: create some compelling videos on Facebook and Instagram and sell
• 13:44
  Speaker 3: ads to a closer demographic of people, I don't think
• 13:47
  Speaker 3: they know what to do with all this compute power.
• 13:49
  Speaker 3: So my guess is they're admitting here that hey, we
• 13:52
  Speaker 3: don't know what to do with this compute power, so
• 13:55
  Speaker 3: we're going to sell it to the highest bidder, which
• 13:57
  Speaker 3: is fine, But then you have to ask yourself if
• 14:00
  Speaker 3: Meta is going to be any good at that. Like
• 14:03
  Speaker 3: they've made their bread on butter on, you know, selling ads,
• 14:08
  Speaker 3: and they haven't really been good at anything else. They're
• 14:12
  Speaker 3: not an infrastructure company that has a history of selling
• 14:15
  Speaker 3: business to business. They are not a AI design company.
• 14:19
  Speaker 3: They didn't successfully create any hardware or successfully roll out
• 14:24
  Speaker 3: the metaverse. So I'm just not convinced that Meta is
• 14:28
  Speaker 3: going to be the best at executing data center buildouts
• 14:33
  Speaker 3: and sales of compute power to these institutional customers. But
• 14:38
  Speaker 3: that seems to be a path that they want to
• 14:39
  Speaker 3: go down.
• 14:41
  Speaker 5: They have nothing better to do with their capital.
• 14:43
  Speaker 2: Yeah, that was my read. That was my read.
• 14:45
  Speaker 4: Yeah, which, like, if it doesn't make sense, excuse me.
• 14:48
  Speaker 4: I'm not judging it by the way. I'm just saying
• 14:50
  Speaker 4: as it could be the.
• 14:51
  Speaker 2: Most profitable business unit in the world.
• 14:54
  Speaker 4: I'm not saying it doesn't make sense. I'm just saying
• 14:56
  Speaker 4: self evidently, they have nothing more productive in their estimation
• 14:59
  Speaker 4: to do with their capit.
• 15:00
  Speaker 3: But I look at that approach as opposed to the
• 15:02
  Speaker 3: Apple approach. Apple doesn't seem to know what to do
• 15:04
  Speaker 3: with AI right now either, So what have they done.
• 15:07
  Speaker 3: They've just stored away their profits and said, hey, you know,
• 15:11
  Speaker 3: we're not going to buy into this right now. We'll
• 15:13
  Speaker 3: continue to develop our best selling products, and when we
• 15:17
  Speaker 3: see a good case for the best AI applications out
• 15:21
  Speaker 3: there to be built into our own systems, we'll fold
• 15:25
  Speaker 3: them in and pay the price and go about it
• 15:27
  Speaker 3: that way, and just very different approaches to artificial intelligence
• 15:33
  Speaker 3: right now. The other piece that I will mention part
• 15:35
  Speaker 3: of the reason that that MetaStock is sinking today is
• 15:39
  Speaker 3: because at the same moment that Meta announced it, SoftBank
• 15:44
  Speaker 3: SB Neo will launch Neo cloud services that provide major
• 15:48
  Speaker 3: US enterprises, including hyperscalers, with the computing resources needed for
• 15:52
  Speaker 3: large scale AI model training and inference. SoftBank said, by
• 15:55
  Speaker 3: the way, I don't think SoftBank has any better experience
• 15:59
  Speaker 3: in building AI data centers and compute power than Meta,
• 16:02
  Speaker 3: but I will just bring up that SoftBank has a
• 16:06
  Speaker 3: great history of investing in things at seemingly or divesting
• 16:10
  Speaker 3: of things as seemingly the worst possible time. In early
• 16:14
  Speaker 3: twenty nineteen, for example, following a temporary slump in tech stocks,
• 16:19
  Speaker 3: SoftBank grew nervous and they completely liquidated their nearly five
• 16:23
  Speaker 3: percent stake in Nvidia for roughly three point six billion.
• 16:26
  Speaker 3: Having done the calculation on what that would have been
• 16:28
  Speaker 3: worth today, but presumably a lot more. They bought into
• 16:32
  Speaker 3: we Work, pouring ten billion dollars into we Work between
• 16:35
  Speaker 3: twenty seventeen and twenty nineteen, giving a forty seven billion
• 16:40
  Speaker 3: dollar valuation before the thing basically turned useless a few
• 16:44
  Speaker 3: years later after its IPO, they poured some seven point
• 16:49
  Speaker 3: seven billion dollars into Uber back in twenty eighteen, and
• 16:53
  Speaker 3: then you know, followed it into an IPO that completely flops.
• 16:58
  Speaker 2: And so.
• 17:00
  Speaker 3: It's not to say that the investors over at soft
• 17:03
  Speaker 3: bank are bad investors.
• 17:04
  Speaker 2: They have made plenty of money for plenty.
• 17:06
  Speaker 3: Investors, but they've also had some very public misses on
• 17:13
  Speaker 3: you know, big topics of the day that they invested
• 17:18
  Speaker 3: at the exact wrong time. And so I just did
• 17:21
  Speaker 3: find this one a little bit funny, like, huh, soft Bank,
• 17:25
  Speaker 3: Huh they're jumping in right now? What should that tell
• 17:29
  Speaker 3: us about the market for compute power and artificial intelligence?
• 17:32
  Speaker 3: And my concern would be nothing good, But we will
• 17:35
  Speaker 3: we'll have to wait and see in the meantime. MetaStock,
• 17:37
  Speaker 3: as I mentioned, trading down in early markets so far
• 17:41
  Speaker 3: by about four percent this morning on the combined news
• 17:47
  Speaker 3: soft Bank's entrants into the same market that Meta wants
• 17:49
  Speaker 3: to play in. And but again, the Meta story here
• 17:52
  Speaker 3: to me just reads, we built this stuff, we don't
• 17:56
  Speaker 3: know what to do with it. We don't have any customers.
• 17:58
  Speaker 3: We can't build anything that people but want so sell
• 18:02
  Speaker 3: our supply.
• 18:04
  Speaker 2: Is the read that I'm doing.
• 18:05
  Speaker 5: What else could you conclude?
• 18:07
  Speaker 3: Yeah, I don't know, Like, I don't know how you
• 18:10
  Speaker 3: could come into another conclusion. If they're saying, hey, we
• 18:12
  Speaker 3: want to sell the compute capacity that we don't really
• 18:15
  Speaker 3: have without shutting down these programs, seems to me like you're.
• 18:18
  Speaker 2: Talking about shutting down your programs.
• 18:21
  Speaker 3: In other AI news, though, SpaceX showed investor prototype of
• 18:26
  Speaker 3: Elon Musk's new AI device, which.
• 18:30
  Speaker 2: We don't know what it does.
• 18:31
  Speaker 3: It's sleeker and slimmer than an iPhone. It's going to
• 18:35
  Speaker 3: host a bunch of everything apps. He's talked a lot
• 18:37
  Speaker 3: about concepts like these super apps in China that offer
• 18:41
  Speaker 3: all sorts of chatting and payment options. But from all accounts,
• 18:47
  Speaker 3: it looks like a cell phone.
• 18:49
  Speaker 5: It is a phone too, right, I don't know.
• 18:52
  Speaker 3: It's a prototype for all I know. It could be
• 18:54
  Speaker 3: a woodblock painted sleek black. It's very possible anybody could
• 19:00
  Speaker 3: sell that.
• 19:01
  Speaker 2: It would be ms that's true.
• 19:03
  Speaker 3: Yeah, if anybody could sell a you know, shredded up
• 19:07
  Speaker 3: piece of two by four cut into a really narrow
• 19:09
  Speaker 3: slice and then painted black.
• 19:11
  Speaker 2: It would probably be elon musk.
• 19:13
  Speaker 3: You can sell flamethrowers, tequila, what other Tesla products as
• 19:18
  Speaker 3: he rolled out over the years.
• 19:19
  Speaker 2: So we will see if we ever get.
• 19:20
  Speaker 3: Any more on the SpaceX ai device that was debuted
• 19:25
  Speaker 3: yesterday with very little news.
• 19:27
  Speaker 2: Quick Break, Wall Street Watch Trivia answer when we come.
• 19:30
  Speaker 7: Back, bringing the latest financial news straight to your radio.
• 19:39
  Speaker 7: Every day. It's the Financial Exchange on the Financial Exchange
• 19:43
  Speaker 7: Radio Network.
• 19:46
  Speaker 1: Tell you now full wool Street Watch, treking, the stocks, potato,
• 19:50
  Speaker 1: and the headlines driving markets so far today right here
• 19:53
  Speaker 1: on the Financial Exchange Radio Network.
• 19:56
  Speaker 2: Now.
• 19:56
  Speaker 6: Stocks are mixed right now. The Dow jones still up
• 19:59
  Speaker 6: just just under four hundred points. The SMP five hundred
• 20:03
  Speaker 6: has been kind of going back and forth between positive
• 20:06
  Speaker 6: and negative. Right now, it's up five points or point
• 20:09
  Speaker 6: zero eight percent. The NASZAC, on the other hands, down
• 20:11
  Speaker 6: one hundred and twenty six points or about a half percent.
• 20:15
  Speaker 6: Oil right now is down one point two eight percent
• 20:18
  Speaker 6: after Qatar says US and Iran made progress during talks.
• 20:23
  Speaker 6: Looking elsewhere on the market, Alphabet has dropped one percent
• 20:26
  Speaker 6: this morning after the subsidiary lost a European anti trust
• 20:29
  Speaker 6: case where a court upheld Google's fine of four point
• 20:32
  Speaker 6: sixty seven billion dollars. The find comes from a twenty
• 20:35
  Speaker 6: eighteen decision by the European Commission to punish Google for
• 20:38
  Speaker 6: what it saws anti competitive practices by the company through
• 20:41
  Speaker 6: giving its own applications unfair advantages in Android products. Shares
• 20:46
  Speaker 6: of the Italian technology company Bending Spoons are off nine
• 20:49
  Speaker 6: point seven percent after its public market debut. Yesterday, The
• 20:53
  Speaker 6: sockets soared almost forty percent from its IPO level. Pallenteer
• 20:58
  Speaker 6: shares jump more than two and a half percent after
• 21:00
  Speaker 6: a DA Davidson upgrade to buy from neutral. Analyst at
• 21:03
  Speaker 6: the firm also said they view the stocks valuation as
• 21:06
  Speaker 6: the most attractive in some time. And finally, defense technology
• 21:10
  Speaker 6: aero Vironment rose twelve percent after it won a five
• 21:13
  Speaker 6: hundred million dollar contract with the US Army. The contract
• 21:16
  Speaker 6: is to develop counter drone capabilities to the military. I
• 21:21
  Speaker 6: am ben Kitchen and that was Wall Street Watch. Time
• 21:24
  Speaker 6: to pay off a little bit of trivia here on
• 21:26
  Speaker 6: the show. The question today was which city hosted the
• 21:29
  Speaker 6: first official Independence Day celebration back in seventeen seventy seven. Well,
• 21:34
  Speaker 6: that would be Philadelphia. Our winner today is Paul from
• 21:37
  Speaker 6: Ocean City, Maine. He has won a Financial Exchange Show
• 21:40
  Speaker 6: T shirt. We played trivia every day here on the
• 21:43
  Speaker 6: Financial Exchange. See complete contest rules at Financial Exchange Show
• 21:46
  Speaker 6: dot com.
• 21:47
  Speaker 3: You know what famous nineties movie the company is named after, right,
• 21:50
  Speaker 3: Benning Spoons?
• 21:53
  Speaker 5: No is it named after a movie.
• 21:58
  Speaker 2: It's named after a moment in a movie. What the matrix?
• 22:03
  Speaker 1: Is it?
• 22:03
  Speaker 2: Really? Oh? All right?
• 22:05
  Speaker 5: I thought you were coming with a weird joke.
• 22:07
  Speaker 2: There is no spoon.
• 22:08
  Speaker 4: There's a famous mentalist, isn't the right word? A guy
• 22:13
  Speaker 4: who claimed to have telekinetic powers, who bent spoons on
• 22:16
  Speaker 4: or forks some flatware on Carson Uri Geller.
• 22:20
  Speaker 5: I think, what was it? That's that? Is that right?
• 22:23
  Speaker 4: It was a little bit before my time, but he
• 22:24
  Speaker 4: was like a performer. He didn't I don't think he
• 22:28
  Speaker 4: really claimed that he had superpowers. Well, I thought that's
• 22:30
  Speaker 4: what it referred to.
• 22:31
  Speaker 3: The New York Times reports that the company, which I
• 22:35
  Speaker 3: don't know how they're going to go about reviving AOL,
• 22:38
  Speaker 3: but the company's founders apparently named it after that scene
• 22:42
  Speaker 3: in the Matrix.
• 22:42
  Speaker 5: So no, no, I had no idea.
• 22:46
  Speaker 4: I just it was a stupid I had never gonna
• 22:51
  Speaker 4: give any thought to Again.
• 22:52
  Speaker 6: Well, why do we keep naming our companies after things
• 22:55
  Speaker 6: from movies or books that are seventy five years old?
• 22:58
  Speaker 6: We have no creativity left palent Year, Andro bending Spoons.
• 23:03
  Speaker 5: Really as opposed to what Ford?
• 23:06
  Speaker 2: Yeah, name it after yourself? Okay, yeah, I like that
• 23:09
  Speaker 2: better clearly, Westing.
• 23:12
  Speaker 6: Armstrong Armstrong Advisor.
• 23:14
  Speaker 5: Edison, No, I don't know.
• 23:20
  Speaker 3: A a In a less funny topic, divorce rates, while
• 23:26
  Speaker 3: actually have come way down over the course of the
• 23:29
  Speaker 3: last forty years as a society.
• 23:32
  Speaker 2: So the overall divorce rate.
• 23:33
  Speaker 3: In America peaked at twenty two point six divorces per
• 23:39
  Speaker 3: one thousand married women back in nineteen eighty, so that's
• 23:42
  Speaker 3: the annual rate of divorce was twenty two point six
• 23:44
  Speaker 3: per thousand. Generally declined since then to where we were
• 23:49
  Speaker 3: in twenty twenty four, which was fourteen point two.
• 23:52
  Speaker 2: So that's a pretty substantial decline.
• 23:54
  Speaker 3: The divorce rate, like that's that of you know, every
• 23:57
  Speaker 3: other marriage results in divorce, which I always counter with.
• 24:01
  Speaker 3: You know, that also means that you know, the other
• 24:04
  Speaker 3: half end in death. So I'm not sure which one's better,
• 24:07
  Speaker 3: but the statistic has gotten better. However, the rate of
• 24:15
  Speaker 3: divorce for people over the age of fifty has doubled
• 24:20
  Speaker 3: since nineteen ninety and tripled for those over the age
• 24:24
  Speaker 3: of sixty five, which to some degree I guess is
• 24:27
  Speaker 3: logical if you are living a longer life, the timeline
• 24:31
  Speaker 3: where you can get divorced over the age of fifty
• 24:33
  Speaker 3: or sixty five makes more sense. If your expectation is
• 24:36
  Speaker 3: to maybe live until ninety and you genuinely don't like
• 24:39
  Speaker 3: the person that you're with, then I suppose that that
• 24:42
  Speaker 3: might be more of an incentive to get divorced later
• 24:44
  Speaker 3: in life. But that is pretty pretty shocking that the
• 24:48
  Speaker 3: pace of divorce for over the age of sixty five
• 24:50
  Speaker 3: has tripled over the course of three decades, and I
• 24:54
  Speaker 3: don't again, I don't know what to attribute that to
• 24:56
  Speaker 3: other than life expectancies, and you know that pretty much
• 25:00
  Speaker 3: being it, there's a huge financial difference though, in getting
• 25:04
  Speaker 3: divorced at sixty something than thirty something, in a lot
• 25:07
  Speaker 3: of ways less complicated, I suppose, right, you know, when
• 25:10
  Speaker 3: you don't have minor children that are going through a divorce,
• 25:13
  Speaker 3: and you don't need to figure out child support, and
• 25:17
  Speaker 3: you know you have the assets to maybe split up
• 25:22
  Speaker 3: the family home and still be able to buy another
• 25:24
  Speaker 3: home without massive financial difficulty. That could be part of
• 25:28
  Speaker 3: it too, actually, leading to you know, it can be
• 25:31
  Speaker 3: just financially tremendously difficult to get divorced earlier in life,
• 25:35
  Speaker 3: and so maybe that is part of this as well,
• 25:37
  Speaker 3: is hey, we couldn't afford to get divorced at forty,
• 25:40
  Speaker 3: but we can't afford to get divorced at fifty. That
• 25:45
  Speaker 3: haven't been said. It sure does complicate things from a
• 25:50
  Speaker 3: inheritance perspective, and that is certainly not the thing that
• 25:53
  Speaker 3: people have in mind when they're going through a divorce.
• 25:56
  Speaker 3: But you know, when you end up going through a divorce,
• 26:01
  Speaker 3: and especially if there is a new marriage in place,
• 26:04
  Speaker 3: all of a sudden, you have this immensely complicated financial
• 26:07
  Speaker 3: situation that has to be mapped out and addressed. So,
• 26:11
  Speaker 3: for instance, right you get divorced at fifty remarried at sixty.
• 26:15
  Speaker 3: You both, you know, in that new marriage, both have
• 26:17
  Speaker 3: kids from other families, and you're living together in a
• 26:21
  Speaker 3: home that whatever the wife had in her family. Let's
• 26:26
  Speaker 3: assume the wife passes away first, is the husband allowed
• 26:29
  Speaker 3: to stay there? Who gets the home? If it's a
• 26:31
  Speaker 3: family home, Is it going to the wife's kids? Do
• 26:34
  Speaker 3: your kids get a piece of it too. How long
• 26:36
  Speaker 3: can you stay in that home? Do you have to
• 26:38
  Speaker 3: pay you to stay in that home? There are these very,
• 26:41
  Speaker 3: very complicated questions. The other one that we see all
• 26:45
  Speaker 3: the time, right, Hey, I want my assets to go
• 26:48
  Speaker 3: to my kids and my new husband's assets to go
• 26:50
  Speaker 3: to his kids.
• 26:51
  Speaker 2: We don't we want to split this stuff up.
• 26:54
  Speaker 3: But can that surviving person survive on just there half
• 27:00
  Speaker 3: of the assets or do they need access to yours
• 27:02
  Speaker 3: in order to just ensure that they can continue to
• 27:04
  Speaker 3: live comfortably during that period of time. And so when
• 27:08
  Speaker 3: we are seeing these paces of divorces tripling for those
• 27:14
  Speaker 3: over the age of sixty five, I can assure you
• 27:16
  Speaker 3: that older marriages are taking place too, and it presents
• 27:20
  Speaker 3: a unique set of planning challenges. We actually have a
• 27:24
  Speaker 3: new guide out this month from the Armstrong Advisor Group
• 27:27
  Speaker 3: for the month of July, not specifically about divorce and
• 27:30
  Speaker 3: the financial plan, but talking to family members about inheritance
• 27:35
  Speaker 3: because we have unfortunately seen far too many times firsthand
• 27:42
  Speaker 3: where a lack of discussion ahead of time leads to
• 27:46
  Speaker 3: some very messy situations after the fact. I cannot tell
• 27:49
  Speaker 3: you how many times I have seen siblings step siblings
• 27:52
  Speaker 3: siblings from different marriages sue each other over inheritances that
• 27:57
  Speaker 3: could have been made very clear ahead of time with
• 28:00
  Speaker 3: just a conversation, or if there's not good terms, then
• 28:04
  Speaker 3: a handwritten note or a legal note that's put together.
• 28:07
  Speaker 3: But I can assure you that addressing this stuff ahead
• 28:10
  Speaker 3: of time, while you're of sound mind, while you know,
• 28:13
  Speaker 3: while your kids are in a good place to receive it,
• 28:17
  Speaker 3: can be incredibly important, especially if there are complex family situations,
• 28:23
  Speaker 3: kids that don't get along, kids from different marriages. Addressing
• 28:27
  Speaker 3: the how and why of an inheritance ahead of time
• 28:32
  Speaker 3: can be very, very valuable to ensuring that it goes
• 28:37
  Speaker 3: the way you would want to, rather than to a
• 28:39
  Speaker 3: bunch of attorneys. If you'd like a brand new copy
• 28:41
  Speaker 3: of our guide Talking to your Kids about Inheritance, you
• 28:44
  Speaker 3: can request it at Armstrong Advisory dot com or you
• 28:47
  Speaker 3: can call us at eight hundred three nine three four
• 28:50
  Speaker 3: zero zero one. A brand new guide from Armstrong available
• 28:53
  Speaker 3: just in the month of July, so brand new here.
• 28:56
  Speaker 3: It's available for free by calling eight hundred three nine
• 28:59
  Speaker 3: three four or zero zero one or Armstrong Advisory dot com.
• 29:02
  Speaker 1: The proceeding was paid for by Armstrong Advisory group a
• 29:05
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 29:07
  Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
• 29:11
  Speaker 1: your own financial, tax, into state planning advisors before making
• 29:13
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 29:16
  Speaker 1: advisory services.
• 29:18
  Speaker 3: We've got markets in mixed territory here NASDAK off half
• 29:22
  Speaker 3: of percent, SMP basically flat for the day. Dow Jones
• 29:25
  Speaker 3: Industrial Average up four hundred points or three quarters.
• 29:28
  Speaker 2: Of a percent. We're going to take a quick break.
• 29:30
  Speaker 3: When we return, a bit of stack Roulette is coming
• 29:33
  Speaker 3: up next.
• 29:35
  Speaker 1: Remember you can watch the show live every day on
• 29:38
  Speaker 1: our YouTube page. We've got market updates and breaking business
• 29:41
  Speaker 1: news all morning long, plus a full archive of all
• 29:45
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  Speaker 1: a button at YouTube dot com. Slash The Financial Exchange Show,
• 29:52
  Speaker 1: breaking business and financial news first throughout the day, only
• 29:56
  Speaker 1: here on the Financial Exchange Radio Network. Ladies and Gentlemen
• 30:02
  Speaker 1: the Weekend.
• 30:14
  Speaker 3: Joining us now is Paul Lamonica talking to us a
• 30:17
  Speaker 3: little bit about a big I PO that went off
• 30:20
  Speaker 3: yesterday of a is this right.
• 30:22
  Speaker 2: An Italian tech company? Paul I didn't.
• 30:24
  Speaker 3: I didn't realize there were any Italian tech companies left.
• 30:28
  Speaker 3: What does Bending Spoons do that you know, created a
• 30:33
  Speaker 3: forty percent surge in markets yesterday?
• 30:35
  Speaker 5: Exactly?
• 30:36
  Speaker 8: No Italian soccer teams in the World Cup, but Italian
• 30:40
  Speaker 8: media company is alive and well. Bending Spoons owns now AOL,
• 30:46
  Speaker 8: among other digital media brands that you know, people may
• 30:51
  Speaker 8: be familiar with, such as Vimeo, event Right, bright Cove.
• 30:58
  Speaker 8: So what's really fat is that AOL, of course, was
• 31:04
  Speaker 8: famously public in the early stages of the nineties Internet
• 31:09
  Speaker 8: boom bought Time Warner, not that didn't turn out all
• 31:12
  Speaker 8: that well, and AOL has been sold several times since
• 31:17
  Speaker 8: Time Warner dumped it, changing hands. You know, was part
• 31:21
  Speaker 8: of the Verizon with Yahoo for a bit, you know,
• 31:25
  Speaker 8: then sold to Apollo. Apollo has now sold it to
• 31:28
  Speaker 8: this company, Bending Spoons, which went public yesterday in the US.
• 31:34
  Speaker 8: Shares were up more about forty percent. Stocks down today,
• 31:37
  Speaker 8: but I think investors are hopeful that this company will
• 31:42
  Speaker 8: be able to get a decent amount of profit from
• 31:48
  Speaker 8: AOL as a you know, a cost cutting play, you know,
• 31:53
  Speaker 8: and maybe trying to turn things around. I mean, AOL
• 31:56
  Speaker 8: obviously a shell of its former self. But the CEO
• 31:59
  Speaker 8: of Bending reminded me that they still have about thirty
• 32:02
  Speaker 8: million users worldwide and he thinks that with some changes
• 32:08
  Speaker 8: to you know, to the platform, that they can generate
• 32:12
  Speaker 8: more profits from the business.
• 32:14
  Speaker 2: So I mean bad news signal.
• 32:17
  Speaker 3: My sixty five year old mother finally got rid of
• 32:20
  Speaker 3: her Aol dot com email account a couple of years ago.
• 32:24
  Speaker 3: I don't intend on starting up my Aol instant messenger
• 32:27
  Speaker 3: account anytime soon.
• 32:29
  Speaker 2: Where are these.
• 32:30
  Speaker 3: Users coming from? Are they are they is Aol producing
• 32:32
  Speaker 3: news still? What is their user base that they are
• 32:35
  Speaker 3: so infatuated or that they are bragging about right now?
• 32:39
  Speaker 2: Yeah, I mean, what's the opportunity?
• 32:42
  Speaker 8: I think that there are you know, as they just
• 32:44
  Speaker 8: point out thirty million people. So some you know diehards
• 32:49
  Speaker 8: are sticking with their old Aol dot com email address,
• 32:55
  Speaker 8: even though you know kind of people laugh when you
• 32:58
  Speaker 8: hear that someone has that a well email address. There
• 33:04
  Speaker 8: is the digital content as well. I think they are
• 33:07
  Speaker 8: trying to position themselves as more of a media play
• 33:13
  Speaker 8: as opposed to the access point to the Internet that
• 33:18
  Speaker 8: they used to be. But again, Aol is not the
• 33:22
  Speaker 8: only part of the Bending Spoons business. The CEO told
• 33:26
  Speaker 8: me that what they're trying to do isn't necessarily to
• 33:31
  Speaker 8: have synergy between all of the different businesses. They're not
• 33:35
  Speaker 8: really trying to say, convince an AOL user to start
• 33:39
  Speaker 8: using Vimeo video. They want to just cut costs in
• 33:44
  Speaker 8: the various businesses that they are buying and streamline them
• 33:48
  Speaker 8: to generate more profits. And now that they have the
• 33:52
  Speaker 8: stock as currency to do more deals, they might be
• 33:55
  Speaker 8: able to purchase even more digital media companies without having
• 33:59
  Speaker 8: to add to debt, which is a problem for Bending spoons.
• 34:03
  Speaker 8: They are highly leveraged because their acquisition strategy. That could
• 34:07
  Speaker 8: be an issue if interest rates climb higher with you
• 34:11
  Speaker 8: know a lot of people wondering if the FED is
• 34:13
  Speaker 8: going to be racing interest rates later in this year, that's.
• 34:15
  Speaker 2: A clear possible risk.
• 34:16
  Speaker 3: Speaking of the other assets, So the Vimeo product, I
• 34:19
  Speaker 3: feel like most people that have browse the internet have
• 34:22
  Speaker 3: seen Vimeo out there. What space does that company occupy
• 34:26
  Speaker 3: when competing with the you know, fifty trillion pound gorilla
• 34:32
  Speaker 3: in the room, which would be Google in their YouTube product.
• 34:35
  Speaker 8: Yeah, Vimeo obviously a much smaller video hosting site than YouTube.
• 34:43
  Speaker 8: It was owned by Barry Dealer's ie IAC Excuse Me,
• 34:47
  Speaker 8: which is rebranded as people that's you know, they spun
• 34:51
  Speaker 8: that off and you know, now it's obviously part of
• 34:54
  Speaker 8: the Bending Spoons conglomerate.
• 34:56
  Speaker 1: But you combine that with.
• 34:57
  Speaker 8: You know, bright Cove, and I think what you know,
• 35:00
  Speaker 8: those two video platforms they might be catering more to
• 35:04
  Speaker 8: a you know, professional video audience opposed to the casual
• 35:11
  Speaker 8: you know YouTube streamer.
• 35:14
  Speaker 6: You know.
• 35:14
  Speaker 8: So that's something that I think that Benning Spoons is
• 35:17
  Speaker 8: hoping to be able to generate more ad revenue and
• 35:22
  Speaker 8: subscription revenue as well from those two video platforms.
• 35:26
  Speaker 2: It's Paul la Monica.
• 35:27
  Speaker 3: Paul, thanks so much for joining us, and by the way,
• 35:30
  Speaker 3: just always appreciate how much detailed knowledge you have about
• 35:33
  Speaker 3: these things that we discussed on the program.
• 35:35
  Speaker 2: Yeah, thank you. I appreciating up.
• 35:37
  Speaker 3: You know what, what's the story of Vimeo and you know,
• 35:40
  Speaker 3: you know where it changed hands from and all.
• 35:42
  Speaker 2: The details in there.
• 35:43
  Speaker 3: So PAULA Monica from Baron's joining us ahead of the
• 35:46
  Speaker 3: July fourth holiday to talk about the IPO that went
• 35:48
  Speaker 3: off quite successfully yesterday for Benning Spoons.
• 35:51
  Speaker 2: Have a great fourth Paul, we will catch.
• 35:52
  Speaker 6: Up you too.
• 35:53
  Speaker 8: Have a go one guys.
• 35:56
  Speaker 2: I would like to.
• 35:56
  Speaker 3: Talk now about the final answer of what came first,
• 36:01
  Speaker 3: mark the chicken or the egg, because we now know that,
• 36:05
  Speaker 3: at least, at least when it comes to companies colluding
• 36:09
  Speaker 3: on driving up higher prices, the chicken came before the egg.
• 36:13
  Speaker 3: Because back in twenty sixteen, Perdue and a whole bunch
• 36:16
  Speaker 3: of other companies were charged with criminal collusion jacking up
• 36:20
  Speaker 3: chicken prices and colluding on price and lo and behold
• 36:25
  Speaker 3: when a nice little avian flu problem came about. In
• 36:29
  Speaker 3: December twenty twenty four, the US government, the US Justice Department,
• 36:33
  Speaker 3: alleges that executives at several of the biggest egg producers
• 36:38
  Speaker 3: across the country colluded to shoot prices higher. So Calmaine
• 36:44
  Speaker 3: Food's former chief executive sent a morning text to the
• 36:47
  Speaker 3: head of a rival producer. Let it rip, he said,
• 36:50
  Speaker 3: according to the allegations, a little more than a few
• 36:54
  Speaker 3: weeks after, according to prosecutors, a Kalmane executive text of
• 36:57
  Speaker 3: the chief executive of rival Hickman's egg branch, we are
• 37:00
  Speaker 3: bidding up. Let's hold it today. In at least what
• 37:04
  Speaker 3: seems to me to be a very obvious case of
• 37:08
  Speaker 3: criminal collusion to bring prices higher at the time of
• 37:14
  Speaker 3: a pretty catastrophic avian bird flu problem like this is
• 37:21
  Speaker 3: is this not I guess it's not quite a kin,
• 37:24
  Speaker 3: but it is at least like a cousin to a
• 37:29
  Speaker 3: seven to eleven owner. Jacking up the price of water
• 37:33
  Speaker 3: bottles during a hurricane like this is pretty bad stuff.
• 37:37
  Speaker 2: If it proves to be true in my personal opinion.
• 37:41
  Speaker 3: Like maybe not as life threatening as water prices being
• 37:44
  Speaker 3: brought up, but like you have a massive shortage of
• 37:47
  Speaker 3: eggs and you are texting the CEO of your primary
• 37:52
  Speaker 3: competition in a not terribly competitive market to say, we're
• 37:55
  Speaker 3: gonna let prices go high.
• 37:56
  Speaker 5: Yeah, and what an idiot he put it in?
• 37:58
  Speaker 2: Right? Put a'm moron firstly?
• 38:00
  Speaker 4: Yeah, I mean the act I guess is despicable, like
• 38:03
  Speaker 4: morally but also not very smart.
• 38:06
  Speaker 3: Agreed, bat all around. We'll see where it goes. Have
• 38:10
  Speaker 3: a great Fourth of July, everybody, stay cool. We will
• 38:13
  Speaker 3: be back at it next week and have a great
• 38:15
  Speaker 3: July fourth