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Why the AI Boom Is Starting to Look Like 1999 Again · The Financial Exchange Show

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1:03
Speaker 1: This is the Financial Exchange with Chuck Zada and Mike Armstrong.
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Speaker 2: Chuck, Mike and Tucker here and as we kick things off,
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Speaker 2: we got all major US indices in rally mode today.
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Speaker 2: It's been basically the case for the last month and
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Speaker 2: a half now. But the Dow Jones Industrial Average back
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Speaker 2: above fifty thousand, up four hundred and one points, about
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Speaker 2: three quarters of a percent. S and P five hundred
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Speaker 2: up fifty four points, three quarters of a percent as well.
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Speaker 2: The Nasdaq one hundred and nasdak can posite both up
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Speaker 2: about three quarters of percent. Even that cute little Russell
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Speaker 2: two thousand. Here, there you go, little boy here out Yeah,
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Speaker 2: there you go, good boy, have a little treat. That
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Speaker 2: is uh yeah, that's up about point six percent. So
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Speaker 2: you know, whether you're talking about your Great Danes or
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Speaker 2: your little Yorkies, all the dogs are getting fed today.
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Speaker 2: There you go. And especially when we talk about dogs
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Speaker 2: getting fed. Sarah Bras Systems a tech company that is
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Speaker 2: going to be that's ipoing as we speak right now.
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Speaker 2: They are raising about five and a half billion dollars
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Speaker 2: in an IPO today and they can that a little more.
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Speaker 2: They build computer chips for AI inference workflows, workloads, sorry,
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Speaker 2: and the ipo was originally going to go off at
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Speaker 2: about one hundred and ten to one hundred and fifteen
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Speaker 2: dollars a share. By the time they got through the
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Speaker 2: underwriting process, they up to tow one hundred and eighty
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Speaker 2: five And it still is not trading. But I'm seeing
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Speaker 2: again just from reports from people who follow this stuff,
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Speaker 2: that the initial trading may actually open somewhere north of
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Speaker 2: four hundred dollars a share. My god, which I gotta
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Speaker 2: tell you, this is the stuff that you saw back
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Speaker 2: in nineteen ninety nine. Now, it doesn't mean that this
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Speaker 2: can't continue. I'm not saying that it won't. But what
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Speaker 2: I am saying is hardware tech hardware IPOs that double
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Speaker 2: in their first day not really something we've seen for
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Speaker 2: the last twenty five years.
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Speaker 3: Yeah, So again I I'm not justifying the price that
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Speaker 3: this is going off at. I will say that Sarah
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Speaker 3: Bras has revenue. They did have my positive net income
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Speaker 3: the first time as a conception.
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Speaker 2: That like all of the IPOs in the tech bubble
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Speaker 2: had like no revenue and just like a web page
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Speaker 2: like agreed again, we covered Cisco is the ultimate face
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Speaker 2: of the tech bubble. Yeah, it became one of the
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Speaker 2: most valuable companies on the planet and then lost eighty
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Speaker 2: percent and didn't get back there for twenty six years.
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Speaker 2: Yeah again, I don't want it.
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Speaker 3: I just don't want to call this one one of
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Speaker 3: the dot com uh fanatic companies that you know, hadn't
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Speaker 3: printed any revenue and went public based on users.
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Speaker 1: Why not?
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Speaker 2: Why were we all so offensive? Like why are we
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Speaker 2: so worried about offending people by saying that this is
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Speaker 2: like the tech bubble? Yes it is. It's like the
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Speaker 2: freaking tech bubble. It will burst at some point. It's
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Speaker 2: probably not today or tomorrow or next week or even
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Speaker 2: next month, but it's just like the tech bubble. I'm
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Speaker 2: sorry again, Like successful companies came out of that. Yeah,
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Speaker 2: a lot died, but successful ones still. Let's talk about Microsoft,
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Speaker 2: one of the most successful companies today. Microsoft, you go
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Speaker 2: back and take a look at how it was valued
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Speaker 2: in two thousand. It was fifty seven dollars a share.
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Speaker 2: It went down to twenty five and basically sat there
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Speaker 2: for fifteen years before finally recovering. Like, no one looks
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Speaker 2: at Microsoft and is like, well, they didn't have, you know,
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Speaker 2: no revenue, and so that means that good companies can
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Speaker 2: get caught up in bubbleish's valuations too. And I am
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Speaker 2: telling you this is just like the tech bubble. Yeah.
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Speaker 3: So a company that is pricing their IPO again, like
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Speaker 3: you said a couple of weeks ago, it was supposed
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Speaker 3: to be one hundred and ten bucks a share IPOs
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Speaker 3: at one eighty five. And again, trading's not yet occurring,
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Speaker 3: it's halted at the moment. But if that goes off
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Speaker 3: at four hundred dollars per share on a company with
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Speaker 3: five hundred million dollars in revenue, wow, I.
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Speaker 2: Mean, Mike, the the Philadelphia Semiconductor Index since March. Hold on,
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Speaker 2: let me get this date right, since March thirtieth month
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Speaker 2: and a half is up seventy three percent. You can't
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Speaker 2: do that every month. Yeah, And I'm not saying that
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Speaker 2: this is going to blow up tomorrow, because as I've
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Speaker 2: been saying for the last month, it's really clear that
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Speaker 2: the demand for inference in AI dramatically exceeds supply right now,
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Speaker 2: which is what Sarah Brass does. But I can also
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Speaker 2: tell you that we have never been through a tech
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Speaker 2: hardware CAPEX cycle that didn't end with tech tech hardware
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Speaker 2: investors in tears, washed like it's how it ends every
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Speaker 2: time and again that the runway might be a year,
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Speaker 2: it might be three years, it might be five, it
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Speaker 2: might be ten. I don't know what do you mean
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Speaker 2: by every time?
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Speaker 1: Right?
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Speaker 3: I mean obviously the tech bubble, but there are other
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Speaker 3: ones that are smaller too, Right, remember three D printing, Like.
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Speaker 2: No, it didn't blow up the system. I'm talking about
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Speaker 2: semiconductors specifically, like semi. Here's the deal with semiconductors. Do
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Speaker 2: you remember back in twenty twenty two when the US
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Speaker 2: stock market fell twenty percent? Yeah, I think it was
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Speaker 2: more like twenty five, but yeah, the Philly Semiconductor index
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Speaker 2: was off fifty percent. Do you remember from July of
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Speaker 2: twenty twenty four through April of twenty five, when stocks
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Speaker 2: fell again about like twenty five percent, the Philly Semiconductor
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Speaker 2: index was off fifty again.
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Speaker 1: Right.
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Speaker 2: You go through these like even mini boom bust cycles,
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Speaker 2: and it's it's crazy, Like the volatility in this area
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Speaker 2: is just huge, and you know, you can look back
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Speaker 2: again through pretty much the whole thing. You know, back
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Speaker 2: during the h the actual tech bubble, you saw like
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Speaker 2: an eighty five percent draw down here, like semiconductor stocks,
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Speaker 2: the reason why typically, like if you look at them
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Speaker 2: from again two thousand through twenty twenty, we're talking about
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Speaker 2: a twenty year period where the sector was basically not
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Speaker 2: a creative and the reason why is that the margins
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Speaker 2: just get whittled way it becomes commoditized. Why do we
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Speaker 2: think that AI is any different? Do we think that
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Speaker 2: like AI semiconductors are not going to go through that?
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Speaker 2: Of course not, Chuck. There are you know, some differences
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Speaker 2: in terms of like the architectures are different, and sometimes
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Speaker 2: you can end up being locked into a certain ecosystem
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Speaker 2: and that helps, you know, someone maintain margin and things
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Speaker 2: like that. But I just I am not going to
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Speaker 2: believe that this is going to be like, hey, guess what,
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Speaker 2: we We've escaped and now semiconductors are going to be,
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Speaker 2: you know, more valuable than everything else combined. Yeah, I
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Speaker 2: don't believe that either, you know, like I just can't
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Speaker 2: get there. So I firmly again we talked earlier in
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Speaker 2: our show, you got to be able to hold two
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Speaker 2: thoughts in your head simultaneously, one of which is this
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Speaker 2: gonna end badly, the other being maybe not yet because
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Speaker 2: the demand growth is crazy right now now. The other
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Speaker 2: piece that can affect demand growth that I think is
9:06
Speaker 2: interesting right now, a lot of if you talk to
9:08
Speaker 2: anyone who's at a big tech company, they'll tell you
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Speaker 2: that a lot of these big tech companies have leader
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Speaker 2: boards for who uses the most computing capacity in a
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Speaker 2: single day, and like tech companies are trying to grade
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Speaker 2: people on that. Remember, compute capacity costs money. At some point,
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Speaker 2: tech companies and other companies are going to move from
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Speaker 2: hey we want using the most compute do we want
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Speaker 2: you producing the most per unit of compute? And when
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Speaker 2: that happens, that is the potential inflection point in my opinion,
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Speaker 2: because right now, like it's literally just a race to
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Speaker 2: be like, hey, who can use the most compute possible?
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Speaker 2: And as I've said before, if you dig a hole
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Speaker 2: and then fill it in, you're doing something. You're doing
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Speaker 2: a lot of work. Yeah, you're generating economic but it's
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Speaker 2: not productive work. At some point we're going to move
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Speaker 2: from digging virtual holes and filling them in actually needing
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Speaker 2: to do productive work. And that's where you know, the
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Speaker 2: potential inflection point is we're not there yet. Take a
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Speaker 2: quick break. When we come back, we've got trivia, and
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Speaker 2: then we're talking Kevin Warsh being confirmed as the new
10:17
Speaker 2: FED chair right after.
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Speaker 2: On this day.
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Speaker 4: In seventeen eighty seven, delegates gathered in Philadelphia to draw
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Speaker 2: Of the United States.
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Speaker 4: So our trivia question today, how many amendments are in
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Speaker 2: Once again?
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Speaker 4: How many amendments are in the Constitution? Be the fourth
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Speaker 2: Would you ever try to pass an amendment to the Constitution? Definitely? Yeah,
11:41
Speaker 2: I don't know what I would do, but I feel
11:43
Speaker 2: like it'd be kind of fun, you know. In any case,
11:47
Speaker 2: Kevin wars Uh not in the Constitution, but now back
11:52
Speaker 2: in the Federal Reserve, confirmed yesterday by a fifty four
11:55
Speaker 2: to forty five Senate vote. I don't know who didn't vote,
11:59
Speaker 2: because there are a hundred Senators, and one would think
12:02
Speaker 2: that this would be a vote that you show up for,
12:04
Speaker 2: but I don't know. Let's see, Oh, here we go.
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Speaker 2: Senator Kirsten Gilbrand didn't vote. Busy, Why why? Why take
12:17
Speaker 2: the kids up? You're not going to vote on the
12:19
Speaker 2: fed chair, have no opinion. You couldn't have, like any
12:23
Speaker 2: other day, to do whatever it is you were doing.
12:25
Speaker 2: I'm sorry. I know that this is like kind of
12:27
Speaker 2: a minutia, but it just seems like kind of a
12:29
Speaker 2: big deal to not miss this vote.
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Speaker 3: She's got vacation plans. In any case, Congress. Members of
12:34
Speaker 3: Congress are very busy during the summer.
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Speaker 2: It's it's May thirteenth, yesterday, We're not even to Memorial
12:42
Speaker 2: summer and packing. The weather's been crappy all week, Like,
12:47
Speaker 2: what are we doing here? In any case, Kevin worsh
12:51
Speaker 2: is now going to be the seventeenth chair of the
12:54
Speaker 2: Federal Reserve, and so he will be taking over from
12:58
Speaker 2: Jerome Powell in about a week and his first meeting
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Speaker 2: is going to be the meeting in thirty four days
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Speaker 2: concluding on June seventeenth, and so we're going to get
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Speaker 2: I would assume, our first Kevin Worrish press conference, and
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Speaker 2: I think it's going to be interesting to see how
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Speaker 2: he actually attempts to steer the FED now that he
13:23
Speaker 2: is actually in the chair. I will say, it is
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Speaker 2: hard for me to think of a worse environment to
13:32
Speaker 2: enter than the one we are in right now in
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Speaker 2: recent history, I guess, maybe for any FED chair, for
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Speaker 2: Kevin worsh specifically for any I mean, Mike, here's the deal.
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Speaker 2: You've got an inflation picture that is incredibly uncertain. You
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Speaker 2: have a jobs picture that because of you know, combination
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Speaker 2: of artificial intelligence and labor supply, is incredibly uncertain. And
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Speaker 2: you've got a on the fiscal side, a government running
14:02
Speaker 2: six percent annual deficits, and you've got to figure out
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Speaker 2: how to make this all work without blowing it up.
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Speaker 3: I'll throw in there another significant piece of this, which
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Speaker 3: is you've got the most significant threat to FED independence
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Speaker 3: that's probably happened since the Knicks and era. Probably Again
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Speaker 3: I'm I know, you pooh poo that, but I do
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Speaker 3: just because I want to see how Warsh actually handles things.
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Speaker 3: And the reason I bring this up is like Scott
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Speaker 3: Bessen was talking a whole bunch of stuff about, oh,
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Speaker 3: when I come in his treasury, I'm gonna do this,
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Speaker 3: and basically he kept doing the exact same stuff Janet
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Speaker 3: Yellen was doing because he got in he was like, oh,
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Speaker 3: if I push that button, things are going to go badly. Yeah,
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Speaker 3: I'm not so much talking about what Kevin Worsh has said,
14:45
Speaker 3: rather what President Trump has said, and the President has
14:48
Speaker 3: wanted his thumb on the scales of the Federal Reserve,
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Speaker 3: and that makes it challenging even were it's somebody who
14:54
Speaker 3: hasn't run on a on a candidacy of appeasing the president.
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Speaker 2: So again, I'm interested to see. I don't try to
15:03
Speaker 2: I really try not to prejudge people in roles because
15:06
Speaker 2: it's like, if we're gonna do that, then we might
15:08
Speaker 2: as well just cancel the show, you know, like we
15:10
Speaker 2: might as well just not do the show if we're
15:12
Speaker 2: gonna say, well, they're gonna do a bad job. Like
15:14
Speaker 2: I got no idea. We're gonna see how he's going
15:17
Speaker 2: to do. And it's a challenging environment for him to
15:21
Speaker 2: enter in into. And I think there are a lot
15:26
Speaker 2: of cross currencies going to have to navigate successfully in
15:30
Speaker 2: order to steer the ship over the you know, the
15:34
Speaker 2: next four years of this term here. So again, his
15:38
Speaker 2: first meeting is gonna be in thirty four days. Uh.
15:41
Speaker 2: We may get some changes in communication policy. Like before Powell,
15:45
Speaker 2: we did not have a press conference every meeting. Maybe
15:48
Speaker 2: worse goes back to that. Uh, maybe there's some changes
15:52
Speaker 2: in terms of the style of the readouts that we
15:55
Speaker 2: get in things like that. Maybe the meeting minutes, you know,
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Speaker 2: change in terms of their format. He might do away
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Speaker 2: with the dot plot. The dot pot is not like
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Speaker 2: a required thing for the FED to do. And so
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Speaker 2: we'll have to just see what we get because I
16:08
Speaker 2: don't know, quite honestly, and I try to keep an
16:11
Speaker 2: open mind. And if he ends up sucking at his job,
16:16
Speaker 2: well then we'll be able to, you know, Mark FANDETI
16:18
Speaker 2: will be here to call him a failure. If he doesn't,
16:22
Speaker 2: then we can call him a tremendous success. But I'm
16:24
Speaker 2: going to see how the guy does, and I'm gonna
16:27
Speaker 2: give him the full term as well, because again, there's
16:30
Speaker 2: times in Powell's most recent term in twenty twenty two,
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Speaker 2: he and his entire group kind of sucked. Yeah, they
16:38
Speaker 2: kind of screwed the pooch. I guess last three years
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Speaker 2: they've been really good.
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Speaker 3: That's part of what I want to address, because worsh
16:45
Speaker 3: is coming in and publicly stating that he wants to
16:49
Speaker 3: shake up the FED, and I think what he means
16:51
Speaker 3: by that is he wants to shake up the way
16:54
Speaker 3: that the Federal Reserve Board thinks about their role and
16:58
Speaker 3: where we are today and just how these things all
17:01
Speaker 3: relate to each other. And I think he might get
17:04
Speaker 3: some of that rope to rethink all that given the
17:08
Speaker 3: failures of the FED over the course of the last
17:10
Speaker 3: six years. I don't I don't know that his conclusions
17:12
Speaker 3: will be right, but there have been some screw ups,
17:15
Speaker 3: especially in the you know, late stages of COVID leading
17:20
Speaker 3: into twenty twenty two at the Federal Reserve, and I
17:25
Speaker 3: think part of that is the thinking of how they
17:27
Speaker 3: dealt with inflation at that point in time.
17:29
Speaker 2: So again, I'm very much not going to you know,
17:34
Speaker 2: I don't know what he's going to do. Like you
17:36
Speaker 2: might have, you know, a great start to his tenure
17:38
Speaker 2: and then the horrible finish. You might have a horrible
17:40
Speaker 2: start and a great finish. He might be good or
17:42
Speaker 2: bad for the whole thing. Like I don't know, but
17:46
Speaker 2: I think it's clearly. Look, we haven't had a new
17:49
Speaker 2: FED chair in eight years now, It's been a while.
17:54
Speaker 2: If you go back and look at you know, the
17:57
Speaker 2: most recent ones that we've had, I gotta be honest
18:02
Speaker 2: and looking at Powell again, these are all personal views
18:08
Speaker 2: on this. Sure, Alan Greenspan was handed a gift of
18:12
Speaker 2: an economy and under his FED, the kind of changes
18:15
Speaker 2: that happened, you can have a direct line to the
18:20
Speaker 2: financial crisis because of the actions of the green Span
18:25
Speaker 2: FED specifically kind of from ninety nine through two thousand
18:29
Speaker 2: and four, all kinds of changes to like bank you know,
18:33
Speaker 2: you know, collateral requirements and things like that, things that
18:35
Speaker 2: you know, we don't think of when we think of
18:37
Speaker 2: the FED, but all kinds of problems there. Ben Bernaki,
18:41
Speaker 2: I think you can point to and say, you know,
18:44
Speaker 2: manage the FED through the greatest financial crisis that we've
18:47
Speaker 2: seen in our lifetimes, but in doing so ended up
18:50
Speaker 2: taking a lot of you know, power, basically from Congress,
18:53
Speaker 2: and I'm not sure you want that all concentrated in
18:55
Speaker 2: the Fed. Janet Yellen didn't really have to do a
18:58
Speaker 2: ton It was, you know, twenty five, fourteenth through twenty eighteen.
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Speaker 3: Yeah, there wasn't much to be done there. All she
19:03
Speaker 3: had to do is not buy in that it was
19:04
Speaker 3: going to be inflationary, right, just she pretty successfully.
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Speaker 2: Don't screw it up, and she basically didn't. Powell faced with,
19:11
Speaker 2: you know, the first real inflationary challenge in forty years
19:14
Speaker 2: failed during twenty two. But other than twenty twenty two,
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Speaker 2: I thought Powell was excellent. I think he handled two
19:19
Speaker 2: thousand very well. I think he handled the last three
19:22
Speaker 2: years very well. We'll see where worsh ends up landing
19:25
Speaker 2: when it's all said and done. Quick break here when
19:28
Speaker 2: we come back. We got the trivia answer, we got
19:31
Speaker 2: Wall Street Watch and should you really feel so bad
19:34
Speaker 2: about the economy?
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Speaker 4: so It's revenue and profit fall in the second quarter
20:55
Speaker 4: since being spun off from Comcast, but they were better
20:58
Speaker 4: than expected. The company also reported revenue growth across its
21:03
Speaker 4: content licensing and digital platforms that stock up over three percent. Elsewhere,
21:08
Speaker 4: Biogen down over four percent despite the biopharmaceutical company announcing
21:14
Speaker 4: its experimental Alzheimer's drug will advance into a Phase three trial.
21:19
Speaker 4: Outdoor products company Yeti impressed with its quarterly results, sending
21:24
Speaker 4: shares up by six percent, and ticket seller stub Hub
21:28
Speaker 4: also beat expectation, sending shares surging by nineteen percent. Semiconductor
21:33
Speaker 4: equipment maker Applied Materials will report after today's closing bell.
21:38
Speaker 4: I'm Tucker Silvan. That is Wall Street Watch. In the
21:41
Speaker 4: previous segment, we asked you the trivia question how many
21:43
Speaker 4: amendments are in the Constitution? That would be twenty seven
21:48
Speaker 4: and Bill from waltham amass is our trivia winner today,
21:52
Speaker 4: taking home a Financial Exchange Show t shirt. Congrats to Bill,
21:55
Speaker 4: and we play trivia every day here on the Financial
21:58
Speaker 4: Exchange Complete contest rules at Financial Exchange Show dot com.
22:03
Speaker 2: The uh University of Michigan consumer sentiment data came out
22:07
Speaker 2: last week. We covered it. The index came into reading
22:12
Speaker 2: a forty eight point two, which is the worst it
22:15
Speaker 2: has ever been. Which you get this piece from CNBC
22:21
Speaker 2: being like Americans still feel bad about the economy when
22:23
Speaker 2: will it get better never? And here's the thing. Two
22:28
Speaker 2: things are true, and again you got to hold these
22:30
Speaker 2: two views in your head simultaneously. Number One, the economy
22:36
Speaker 2: is not the worst that it's ever been, very obviously,
22:41
Speaker 2: Like I gotta be honest, I don't know who's filling
22:45
Speaker 2: out these surveys, now.
22:47
Speaker 3: Don't you think you run into people though that are
22:49
Speaker 3: that dramatic Every once in a while, I do.
22:53
Speaker 2: Yes, the economy is worse than it's ever been. So
22:56
Speaker 2: hear that from people sometimes.
22:58
Speaker 3: This is what I think, and I asked them if
22:59
Speaker 3: they even remember fifteen years ago.
23:04
Speaker 2: This is what I think, is that in the social
23:06
Speaker 2: media age, we just the way that you actually your
23:11
Speaker 2: brain ends up being rewired is to post the most
23:14
Speaker 2: dramatic stuff you can because that gets the most engagement,
23:17
Speaker 2: and that triggers your dopamine response. And then you're like, oh,
23:20
Speaker 2: I gotta keep posting like that. That's getting the likes,
23:24
Speaker 2: And so you just say all these outrageous things like
23:26
Speaker 2: the moon is made of green cheese, and I'll never
23:30
Speaker 2: you know, like lawns again because of the worms, and
23:34
Speaker 2: like just all kinds of weird stuff that you end
23:36
Speaker 2: up falling into. Man, your social media feed is really different.
23:40
Speaker 2: I don't go on social media. I haven't been on
23:42
Speaker 2: my Facebook account in six years. So all of you
23:44
Speaker 2: listening who tried to friend request me, sorry, I can't
23:47
Speaker 2: get into it anymore. I know that's to be fair.
23:54
Speaker 2: I do ask my wife once a year. I'm like, Hey,
23:57
Speaker 2: do you see anything weird on my Facebook? She's like, no, why,
24:00
Speaker 2: I'm like, because I don't know how to get back in,
24:02
Speaker 2: and I haven't been on it since August of twenty one,
24:04
Speaker 2: and I just want to make sure nothing weird is
24:06
Speaker 2: going on. So I check in with her once a
24:09
Speaker 2: year on it. But I just think social media has
24:12
Speaker 2: so warped our brains that surveys like this are broken.
24:16
Speaker 2: Because I can tell you this. If you took one
24:19
Speaker 2: hundred Americans from right now and put them into the
24:23
Speaker 2: US economy in June of twenty ten, within five minutes,
24:28
Speaker 2: they'd be like, take me back. They would just curl
24:31
Speaker 2: up and start crying. Likewise, if you took them from
24:34
Speaker 2: right now and put them into August of nineteen seventy three,
24:38
Speaker 2: they'd be like, uh uh, nope, where's the undo button?
24:42
Speaker 2: Not gonna do it.
24:43
Speaker 3: So I heard it put very well by a history
24:47
Speaker 3: author who you know, was having somebody describe the world
24:50
Speaker 3: to him as really tragic right now, and his response was,
24:54
Speaker 3: you know, during the Great Depression, they shut down the zoos,
24:58
Speaker 3: killed the animals, and distributed the meat. So you're gonna
25:01
Speaker 3: have a tough time convincing me that the economy right
25:04
Speaker 3: now is that bad.
25:07
Speaker 2: Pardon me why? Like, so you couple that with the
25:10
Speaker 2: fact that, hey, the economy is tough for a lot
25:13
Speaker 2: of people right now. Yep, it's been tough for the
25:15
Speaker 2: last five or six years. There's been again since twenty twenty.
25:18
Speaker 2: I've gone through this every year. It's just been one
25:21
Speaker 2: thing after another, just a bludgeting. It's like, Okay, first
25:23
Speaker 2: you got COVID, then you got you know, the supply shocks.
25:26
Speaker 2: In twenty one, you got inflation. In twenty two, the
25:29
Speaker 2: banks are failing. In twenty three, the job market's slow,
25:31
Speaker 2: and in twenty four, AI is gonna eat our lunch.
25:34
Speaker 2: In twenty five, oh no, tariff's in twenty five. Yeah,
25:37
Speaker 2: twenty six is warn the Middle East in gas price
25:40
Speaker 2: is going up like it's it's been something every year,
25:43
Speaker 2: So I get it, Like we can feel exhausted, but
25:46
Speaker 2: we can feel economically exhausted without saying this is the
25:49
Speaker 2: worst economy ever. Yeah, I'll tell you.
25:53
Speaker 3: With the the news moving as quickly as it does,
25:55
Speaker 3: in spite of the fact that you know, many portfolios
25:58
Speaker 3: are reaching high watermarks that they've never seen before, I
26:02
Speaker 3: do completely comprehend how it would be nerve wracking to
26:06
Speaker 3: make a decision, a big financial life decision right now,
26:10
Speaker 3: like retirement, buying a house, retiring. And you see some
26:14
Speaker 3: of that in the data. You know, home purchases are
26:18
Speaker 3: not moving. Your over year retirements are actually retirements based
26:23
Speaker 3: on the labor force participation rate might still be happening.
26:26
Speaker 3: But I can completely comprehend how this moment in time
26:31
Speaker 3: might lead to some choice paralysis, especially when it comes
26:34
Speaker 3: to retirement.
26:35
Speaker 2: Folks.
26:37
Speaker 3: I was speaking with somebody in their late fifties about
26:39
Speaker 3: this just yesterday. You may go through the exercise and
26:43
Speaker 3: determine that you still have to work another four or
26:45
Speaker 3: five years. You might go through an exercise of planning
26:48
Speaker 3: out you retirement and discover that, hey, I'm I could
26:51
Speaker 3: pretty comfortably pull this off today. But having the answer
26:55
Speaker 3: in your back pocket makes just going to work that
26:59
Speaker 3: much more are tolerable and pleasant, like Hey, yep, I
27:03
Speaker 3: know I've got a number in the back of my
27:05
Speaker 3: mind that I need to reach before I can pull
27:06
Speaker 3: the trigger, or I know I need to make it
27:08
Speaker 3: through this many more days of work before my financial
27:11
Speaker 3: plan is going to work. I think what is really
27:13
Speaker 3: difficult is being in your late fifties early sixties, going
27:16
Speaker 3: to work every day and not having any certainty that
27:19
Speaker 3: you'll ever be able to stop. And I know there
27:21
Speaker 3: are people that are in that position, and I cannot
27:25
Speaker 3: tell you how many times we have had surprising conversations
27:28
Speaker 3: with folks that hey, you might be able to pull
27:30
Speaker 3: this off a lot earlier than you realize, and here's
27:33
Speaker 3: the path to do that. If you want to try
27:37
Speaker 3: and answer that question, you might need some help, and
27:41
Speaker 3: if you'd like help from the Armstrong Advisory Group, we're
27:43
Speaker 3: here to do so. The numbers eight hundred three nine
27:46
Speaker 3: three four zero zero one don't work longer than you
27:49
Speaker 3: have to unless you really want to again eight hundred
27:53
Speaker 3: three nine three four zero zero one, or you can
27:56
Speaker 3: check us out online Armstrong Advisory dot com.
27:58
Speaker 1: The proceeding was paid for by arms Strong Advisory Group,
28:01
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28:03
Speaker 1: any Armstrong guide a specific financial, legal, or tax advice.
28:06
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28:09
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28:12
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28:18
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28:20
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28:23
Speaker 1: Financial Exchange Radio Network.
28:38
Speaker 2: Mike, what do you got for stacoulett?
28:40
Speaker 3: I want to talk about restaurants that are najor, adapt
28:45
Speaker 3: their menus and struggling a little bit. In the days
28:49
Speaker 3: of GLP one users. There's an estimated I believe, ten
28:52
Speaker 3: million Americans, about twelve percent of the adult population who
28:57
Speaker 3: have taken GLP one.
28:58
Speaker 2: Drugs ale unintended. Twelve percent of Americans seems high. I thought, oh,
29:05
Speaker 2: I thought it seems low.
29:07
Speaker 3: What portion of Americans are obese? I don't know, I
29:10
Speaker 3: know more than it's more than twelve percent. Maybe it's
29:12
Speaker 3: just like my age demo and the people that I
29:15
Speaker 3: run into.
29:15
Speaker 2: But I feel like I feel like, at least in
29:20
Speaker 2: that you know, age thirty to fifty suburban demo, it
29:24
Speaker 2: feels like it's close to like twenty five or things. Remember,
29:27
Speaker 2: you have to be pretty wealthy to be on these things,
29:29
Speaker 2: do you know.
29:29
Speaker 3: I thought they were all kinds of subsidies that came
29:31
Speaker 3: in in the last like yes, and I mean it's
29:34
Speaker 3: still I don't know the cost.
29:35
Speaker 2: But anyways, I in any case, restaurants are adapting their menus.
29:40
Speaker 3: They're focusing well, everyone and their mother is focusing on
29:43
Speaker 3: higher protein items, smaller portions, and I don't know if
29:47
Speaker 3: they're going to be successful or not.
29:48
Speaker 2: What I will say is, if the cost.
29:51
Speaker 3: Of lowering the rates of obesity and heart disease is
29:54
Speaker 3: a few restaurants having smaller profits, like sign me up,
29:58
Speaker 3: all on board. I will deal with that societal trade off.
30:01
Speaker 3: But in the meantime, you are seeing even restaurants like
30:04
Speaker 3: the Cheesecake Factory completely reshaping their menu with entire sections
30:08
Speaker 3: devoted to GLP one users who just ain't as hungry
30:12
Speaker 3: as they use.
30:12
Speaker 4: No Page seventy nine of their menu.
30:14
Speaker 3: Yeah, yeah, you do have to scroll through the index
30:16
Speaker 3: of that thing for a while to find the right page,
30:18
Speaker 3: but you will eventually get there.
30:19
Speaker 2: At the Cheesecake Factory, for that lower calorie menu, I'm
30:22
Speaker 2: not buying this. You don't think it's nope, gonna be
30:25
Speaker 2: the case. Well, no, I am buying that restaurants are
30:27
Speaker 2: trying to shrink portions. I think they're trying to do
30:30
Speaker 2: it because of inflation and it's the only way they
30:32
Speaker 2: can keep their costs in line.
30:34
Speaker 3: Maybe the thing is, like most restaurants that I've seen
30:37
Speaker 3: are not completely redoing their menu, They're just adding new
30:40
Speaker 3: sections of lower.
30:43
Speaker 2: Like what restaurants you're doing on this? So, like, I
30:45
Speaker 2: know you mentioned cheesecake Factory. I gotta be honest. I've
30:47
Speaker 2: been to a lot of restaurants lately for various reasons,
30:51
Speaker 2: I haven't seen a GLP one section on any.
30:54
Speaker 3: I've seen a few of them, and it's mainly chained restaurants.
30:57
Speaker 3: But I know that, uh is there. No, it wasn't
31:01
Speaker 3: too cheesy. It was Olive Garden has a has one,
31:04
Speaker 3: Cheesecake Factory has one. So it's the it's the big
31:07
Speaker 3: guys that are moving around first, I think, And yeah,
31:12
Speaker 3: well we'll see if it's a bunch of nonsense. I
31:13
Speaker 3: know people have been talking about like every time that
31:16
Speaker 3: a food company reported bad earnings anytime over the last
31:20
Speaker 3: two years, they've blamed it on weight loss. Drugs, and
31:23
Speaker 3: so I'm with you there, I'm not sure that there's
31:26
Speaker 3: actually a there there.
31:27
Speaker 2: I'm trying to I'm just pulling up the Olive Garden
31:30
Speaker 2: menu just because again those of you who have listened
31:34
Speaker 2: to the show know that you can. You can like
31:37
Speaker 2: Olive Garden for what it is, which is a great
31:39
Speaker 2: meeting place for like people of all kinds to like
31:42
Speaker 2: come together. But I firmly believe it's not Italian food.
31:48
Speaker 2: Having said that to America, I mean, yeah, I don't
31:52
Speaker 2: know's Italian food in the same way that Panda expresses
31:56
Speaker 2: Chinese food exactly. So I think in looking at this,
32:02
Speaker 2: so you're talking about like this lighter portions menu. So
32:06
Speaker 2: here's the deal. I'm looking at it right now, and
32:09
Speaker 2: I've got the lasagna classico, a five hundred col version
32:12
Speaker 2: for fifteen forty nine. If I were to let's see,
32:18
Speaker 2: where's the actual where's the regular lasagna? Come on, family
32:25
Speaker 2: style of Azagnia bundle. No, that's sixty seven hundred calories.
32:27
Speaker 2: That's not the comp Here we go, here's the regular one.
32:31
Speaker 2: Here's why I think that you're being scammed by this menu.
32:34
Speaker 2: Scammed might be a strong word, but here's why I
32:36
Speaker 2: think that you're being hosed by this menu because like
32:39
Speaker 2: you are getting what you paid for. It's just you're
32:41
Speaker 2: paying too much. The regular lasagna classico at Olive Garden
32:45
Speaker 2: nineteen ninety nine for nine hundred and forty calories, the
32:48
Speaker 2: one on the Lighter Portions menu fifteen ninety nine for
32:51
Speaker 2: five hundred. Michael, if one really wanted to eat a
32:56
Speaker 2: smaller portion, you are better off buying the Lasagnia classico,
32:59
Speaker 2: splitting it and half and having the other half for
33:01
Speaker 2: lunch tomorrow. You are, yeah, like, this is why. I
33:05
Speaker 2: like they are trying. If they really were trying to
33:09
Speaker 2: make it such that it was just, oh, we want
33:10
Speaker 2: to offer smaller portions for you, it wouldn't be seventy
33:14
Speaker 2: five percent of the cost for fifty percent of the calories. Chuck.
33:17
Speaker 3: I never said that any of this was designed to
33:19
Speaker 3: be good for the consumer. I just said that they
33:21
Speaker 3: are trying to appeal to a customer that is looking
33:24
Speaker 3: for lower calorie options.
33:25
Speaker 2: And they think they can make money on it too.
33:27
Speaker 2: And I am saying, Tucker put this on the prediction
33:31
Speaker 2: board okay for twenty thirty, which is not as far
33:36
Speaker 2: off as we think. The lasagna Classico at Olive Garden
33:41
Speaker 2: will be one size only, and it will be the
33:44
Speaker 2: five hundred col version for the nine hundred cal price.
33:47
Speaker 3: Say I think that, Chuck, you are vastly overestimating American's
33:52
Speaker 3: math skills.
33:54
Speaker 2: I know I'm correctly estimating them, because what's going to
33:57
Speaker 2: happen is the small is going to become the norm
34:01
Speaker 2: and no one and they're gonna think no one can
34:03
Speaker 2: pick up on it. Yeah, got it, that's what I
34:05
Speaker 2: They're going to get rid of the big one and
34:07
Speaker 2: then you're just gonna get left with the small one. Now,
34:11
Speaker 2: could we all like stand to you know, drop a
34:13
Speaker 2: pound to two, especially.
34:13
Speaker 3: After the Maybe I shouldn't be having a thousand sure
34:16
Speaker 3: calorie piece of lasagna every night for dinner, I don't know.
34:18
Speaker 2: Or maybe I should get the family one at sixty
34:20
Speaker 2: seven hundred cows and see if I can finish it
34:22
Speaker 2: in a single serving, because that sounds like a nice
34:25
Speaker 2: day to me. Yeah. Uh. Piece in the Wall Street
34:29
Speaker 2: Journal A grades are now suddenly everywhere since the arrival
34:32
Speaker 2: of chat GPT good. So I saw this piece and
34:38
Speaker 2: was like, okay, like show me, like what you actually
34:42
Speaker 2: have here, and here's the the crux of it, and
34:46
Speaker 2: I quote the share of a's and college classes heavy
34:49
Speaker 2: on writing and coding, in other words, work more prone
34:51
Speaker 2: to AI use has grown more significantly than in other
34:54
Speaker 2: classes since chat GPT's debut. According to a paper from
34:57
Speaker 2: the University of California, Berkeley released on when Day, professors
35:01
Speaker 2: teaching AIX post classes gave out thirty percent more a's
35:04
Speaker 2: and fewer AS and B plus grades. The results suggest
35:08
Speaker 2: that students have relied on generative AI do better in
35:10
Speaker 2: their studies, not that these classes of students are learning more.
35:14
Speaker 2: So this gets the age old question of like, hey,
35:17
Speaker 2: do you need to be able to do your math
35:19
Speaker 2: test without the calculator or can you use the calculator
35:22
Speaker 2: to do it? And in the case of computer science,
35:26
Speaker 2: quite honestly, I think that if you are not grading
35:29
Speaker 2: your students on the use of AI for coding, you're
35:31
Speaker 2: doing them a disservice because that's how it's going to
35:33
Speaker 2: be done in the future, right, Yeah, Like you want
35:36
Speaker 2: AI to be used in those courses for the coding
35:38
Speaker 2: work because that's how they're doing it at the big
35:40
Speaker 2: companies now.
35:41
Speaker 3: Right, Like you could hypothetically have your exam be in
35:45
Speaker 3: person and block all of the AI systems from being
35:49
Speaker 3: able to be used during these amp But what would
35:51
Speaker 3: be the point.
35:51
Speaker 2: These people are.
35:53
Speaker 3: Only being hired because they have the AI skills to
35:55
Speaker 3: do the coding correct on the writing stuff.
35:58
Speaker 2: The writing stuff I buy because here's the thing. Well,
36:02
Speaker 2: actually no, I buy it, but I don't. Here here's
36:04
Speaker 2: here's here are my two problems. Number one, if you
36:08
Speaker 2: actually read a lot of AI related reasoning, it's hot,
36:14
Speaker 2: garbage and repetitive. And if I were a professor and
36:16
Speaker 2: I saw some of the telltale signs of AI writing
36:19
Speaker 2: in a piece, I would know that you're writing it
36:21
Speaker 2: using AI and'd be like, get out of here. So
36:24
Speaker 2: what part don't you buy?
36:26
Speaker 3: I mean, the great inflation is pretty clearly happening from
36:28
Speaker 3: this study, So which part don't you buy that?
36:31
Speaker 2: I think that any professor of history or English should
36:34
Speaker 2: be able to pretty easily identify an AI written piece
36:38
Speaker 2: and grade it appropriately. Yeah, And I think if you
36:41
Speaker 2: want to allow AI assisted writing in those courses, that's fine,
36:46
Speaker 2: and you can grade that as you see fits. But
36:48
Speaker 2: from a personal perspective, as someone who believes that writing
36:52
Speaker 2: and developing an argument are critical skills of thought that
36:55
Speaker 2: you need to teach I would basically have I'd go
37:00
Speaker 2: old school on it. Here's your blue book, sit down
37:02
Speaker 2: at the desk and write your essay without any help or.
37:06
Speaker 3: Argue your point in person to me. I feel like
37:08
Speaker 3: that skill is so under valid.
37:09
Speaker 2: Do one of your two talk. This is the other thing.
37:12
Speaker 2: Like my favorite course in college was our financial markets course, which,
37:17
Speaker 2: like let me hear, I guess two thirds of your
37:20
Speaker 2: grade was all Socratic method from just the prof asking
37:23
Speaker 2: questions during the course of the time, like your actual
37:27
Speaker 2: tests were a really small portion, and like the homework
37:30
Speaker 2: was not a big piece. It was. No I'm going
37:33
Speaker 2: to grade you on talking about this stuff in class
37:35
Speaker 2: because that's going to prove to me that you know it.
37:38
Speaker 2: So I don't know, maybe we can do more of that.
37:41
Speaker 2: That sounds fun and nice and wicked smart too. We're
37:48
Speaker 2: gonna take a quick break for the rest of the day,
37:49
Speaker 2: but tomorrow we're back and there's no exciting economic data,
37:55
Speaker 2: so don't tune in for that, but tune in just
37:57
Speaker 2: because you want to hang out with us for a
37:58
Speaker 2: couple hours, and if we want to hang out with
38:01
Speaker 2: you too, we'll see you then