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Can Nvidia save GM? · The Financial Exchange Show

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1:03
Speaker 1: This is the Financial Exchange with Chuck Zada and Mike Armstraw.
1:10
Speaker 2: Our two of the Financial Exchange. We got stocks continuing
1:15
Speaker 2: to embark upon a modest rally as we continue through
1:20
Speaker 2: the morning. The Dow Jones Industrial Average up half a
1:23
Speaker 2: percent two hundred and twenty five points, SP five hundred
1:26
Speaker 2: up point four percent or twenty two points, and the
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Speaker 2: Nasdaq up half percent as well, about eighty seven points.
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Speaker 2: So some continued green as we continue to digest what
1:38
Speaker 2: we saw from the Federal Reserve yesterday, where they held
1:42
Speaker 2: rates stable. The one change they did announce their runoff
1:45
Speaker 2: of their balance sheet. They did slow on the Treasury
1:48
Speaker 2: built a treasury bond side of the equation down to
1:51
Speaker 2: a five billion dollar a month runoff, which given the
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Speaker 2: overall size of the treasury market at you know, north
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Speaker 2: of thirty trillion dollars five bill a month, is nothing
2:01
Speaker 2: like They basically almost stopped it.
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Speaker 3: Give it to us in English what they run off
2:06
Speaker 3: of their treasury portfolio means.
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Speaker 2: Basically, what it means is that rather than them continuing
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Speaker 2: to put an additional I think they were at thirty
2:16
Speaker 2: five billion that they were spinning off. Rather than that
2:18
Speaker 2: additional supply coming out into the market each month, there's
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Speaker 2: only going to be an additional five billion in supply
2:23
Speaker 2: from the FED that they are not reabsorbing through future purchases.
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Speaker 3: So basically bonds mature and they're not buying new ones.
2:30
Speaker 3: They are buying No, they are buying more buying new ones.
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Speaker 2: Yep. So again I don't know that it makes a
2:36
Speaker 2: huge difference. But whatever your mileage may vary, We've got
2:40
Speaker 2: the ten year US treasury down four point two basis
2:43
Speaker 2: points to four point two one four percent. Oil West
2:46
Speaker 2: Texas Intermediate ninety six cents a barrel to sixty eight
2:49
Speaker 2: and twelve cents triple a national average.
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Speaker 1: Four.
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Speaker 2: Gas prices continuing to rise as we see the change
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Speaker 2: over to the summer blend of gasoline that now is
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Speaker 2: up to three twelve and one tenth of a cent,
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Speaker 2: So that has gone up about five cents over the
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Speaker 2: last week or so. Nothing else at play aside from that,
3:09
Speaker 2: and you know you typically see this as you get
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Speaker 2: into the spring. It is something that is completely normal
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Speaker 2: and not really related to broader oil price moves. Gold
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Speaker 2: up another seven dollars and twenty cents an ounce to
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Speaker 2: a new all time high three thousand, forty eight dollars
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Speaker 2: and forty cents, so continuing to see some upward momentum
3:29
Speaker 2: on that front, and that's what we have moving in
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Speaker 2: markets today. Jensen Wang, the CEO of in Vidia, says
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Speaker 2: they are going to all quota from the Financial Times
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Speaker 2: and Video will spend hundreds of billions of dollars on
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Speaker 2: chips and other electronics manufactured in the US over the
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Speaker 2: next four years as the company tilts its supply chain
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Speaker 2: back from Asia in the face of Donald Trump's tariff threats.
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Speaker 3: Your thoughts, Mike, hard to say how real it will
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Speaker 3: end up being, hard to say how much of this
3:57
Speaker 3: was already planned investment in the United States and how
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Speaker 3: much of it will actually come to fruition. And Eve,
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Speaker 3: it would be good to it'll mean more jobs for
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Speaker 3: the United States.
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Speaker 4: But I think the.
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Speaker 3: Problem with chip jobs and semiconductor manufacturing in the United
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Speaker 3: States is not today an issue of companies being unwilling
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Speaker 3: to do so. It is an issue of capacity in
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Speaker 3: the United States and our skill set when it comes
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Speaker 3: to manufacturing semiconductors and all of the other parts along
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Speaker 3: that supply chain.
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Speaker 4: And so don't expect this to be rapid.
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Speaker 1: Right.
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Speaker 3: We've been talking about the development of semiconductor manufacturing facilities,
4:31
Speaker 3: for instance, out in Arizona.
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Speaker 4: I bring that one up because every time.
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Speaker 3: I go out there, I go for a hike and
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Speaker 3: I can see the sprawling campus of how big I
4:40
Speaker 3: don't even know how big does it look? Would just
4:44
Speaker 3: tell me, like, you see it all several football fields?
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Speaker 3: You see it, and are you like, wow, that's huge. Yeah,
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Speaker 3: especially because previously, like five seven years ago, when I
4:53
Speaker 3: would go for a hike in the same place, you
4:55
Speaker 3: would crest over the mountain and you would see cactus,
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Speaker 3: cacked eye cacti, several cactuses and desert and that's it.
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Speaker 3: And now it's a sprawling city and so is the
5:07
Speaker 3: housing out there. So it is pretty shocking to go
5:10
Speaker 3: to go and see up there in North Phoenix. But that,
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Speaker 3: to me is the biggest problem with manufacturing of you know,
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Speaker 3: all sorts of supply chains related to the semiconductor space.
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Speaker 3: It's it's the time it's going to take to get
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Speaker 3: those types of jobs up and running here in the
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Speaker 3: United States. Not a lack of demand on the behalf
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Speaker 3: of companies.
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Speaker 2: No, speaking of that demand. Uh. The there's a piece
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Speaker 2: today in tech Crunch with GM they are I'll read
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Speaker 2: the quote from Jensen Huang. We're looking forward to building
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Speaker 2: building with GM AI in all three areas, talking about factories, robots,
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Speaker 2: and self driving cars. I don't know why car companies
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Speaker 2: think they're going to start building robots all of a sudden.
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Speaker 4: I was gonna say, does anyone know what that means?
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Speaker 3: GM teaming up with the video to bring AI to robots, factories,
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Speaker 3: and self factories. I guess I can figure that one
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Speaker 3: out well enough.
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Speaker 2: Quite honestly, I can't, so I I I'm sorry. I
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Speaker 2: was yelling at Paul yesterday and it wasn't his fault
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Speaker 2: because we were talking about how Taco Bell said that
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Speaker 2: they were teaming up with in Nvidia to try to
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Speaker 2: bring AI to like their order improvement process or this
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Speaker 2: and that. And I guess what I'm struggling with on
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Speaker 2: this is the whole reason for like the hype around
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Speaker 2: AI now is that it's generative. It's like, oh, it
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Speaker 2: can write, it can do stuff, and this and that,
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Speaker 2: and this to me is more like, hey, we're just
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Speaker 2: gonna be like analyzing our processes better. That was the
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Speaker 2: Taco Bell thing, and I'm like, well, AI's been doing
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Speaker 2: that for a while. It's just not generative. AI. So
6:35
Speaker 2: then I see this thing here about hey, we're gonna
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Speaker 2: bring AI to our factories, and I just don't know
6:41
Speaker 2: what that means, quite honestly, because I showed Paul. So
6:46
Speaker 2: I showed Paul something that I was working on the
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Speaker 2: other day where I had like a real problem and
6:54
Speaker 2: this was through chat GPT one of the things that
6:56
Speaker 2: I was working on. I was like, okay, like, show me,
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Speaker 2: like a comparison of cost of living between Massachusetts and Florida,
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Speaker 2: and walk me through an analysis of how I can
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Speaker 2: make a decision on you know what, what someone would
7:10
Speaker 2: do there. And I was using there. It's there. I
7:14
Speaker 2: was using their four to zero engine, which is again
7:17
Speaker 2: like it says, you know, great for most questions. It's
7:20
Speaker 2: not like their most advanced reasoning thing, but okay, it
7:22
Speaker 2: should be fine. Like I'm asking it, like to figure
7:25
Speaker 2: out cost of living type stuff, and I'm gonna quote here.
7:29
Speaker 2: Farida generally generally has lower heating cost than Massachusetts, but
7:33
Speaker 2: a person will pay more for air conditioning there in
7:35
Speaker 2: the summer, while groceries and transportation costs may be slightly lower.
7:40
Speaker 2: Farida's higher sales tax at six percent versus Massachusetts six
7:44
Speaker 2: point two five percent could impact overall expenses. And I
7:48
Speaker 2: looked at it and I go, I don't know much math,
7:50
Speaker 2: but I do know that six percent is actually lower
7:52
Speaker 2: than six and a quarter. And so when I have
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Speaker 2: AI failing to differentiate between six and six and a
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Speaker 2: quarter correctly, I don't really know how you're gonna get
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Speaker 2: AI on your factory floor with power tools doing all
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Speaker 2: kinds of crap in any kind of productive way anytime soon.
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Speaker 3: Maybe General Motors workers on the floor are just a
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Speaker 3: bit lonely and need an AI to talk to.
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Speaker 2: Furthermore. And I did just say furthermore, Michael, And you
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Speaker 2: know when I say furthermore and Michael in a sentence, Yeah,
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Speaker 2: I'm really feeling something. We're ramping up for something here, Mike.
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Speaker 2: Do you know what General Motors revenue was last year? No,
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Speaker 2: one hundred and eighty seven billion dollars. Do you know
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Speaker 2: what their profit was? About ten percent of that? Less?
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Speaker 2: It was about three percent of that six billion? Okay?
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Speaker 2: Does General Motors have a lot of money to spend
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Speaker 2: on AI chips?
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Speaker 4: Doesn't sound like it.
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Speaker 2: No, they really don't like they You talk about like
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Speaker 2: these orders from you know, Microsoft and everything where they're
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Speaker 2: talking about like eighty billion in capex next year and
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Speaker 2: most of that's going towards AI and same for Meta,
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Speaker 2: and you know, all these companies General Motors might be like, yeah,
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Speaker 2: we'll take three chips. You know, they don't It could
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Speaker 2: be more than three, obviously, but they don't have tens
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Speaker 2: of billions of dollars to move. And so this gets
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Speaker 2: to the other thing that I'm wondering about because for
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Speaker 2: the last two years, Mike did Jensen Wang have to
9:11
Speaker 2: go in like court business nop. And now we're getting
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Speaker 2: these announcements. We've had two in the last two days
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Speaker 2: now that like Taco Bell and General Motors are gonna
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Speaker 2: start using in Vidio chips. Yeah, does it kind of
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Speaker 2: like I'm not saying they're desperate, because they're making a
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Speaker 2: boatload of money, But if you're trying to, like fuel,
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Speaker 2: if you don't need to do this when you're seeing
9:38
Speaker 2: two annual revenue.
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Speaker 3: Growth, Yeah, I can't tell if it's an in Nvidia
9:43
Speaker 3: desperation or if it's in other business desperation, because either one,
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Speaker 3: it sounds to me like AI washing.
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Speaker 4: It does.
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Speaker 3: And if that term isn't familiar to you, think of
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Speaker 3: the days of greenwashing or DEI washing, whatever whatever you
10:00
Speaker 3: want to You know, there are several different examples of this,
10:03
Speaker 3: but it's the idea that a business is going to
10:06
Speaker 3: say or do something that's not very impactful to be
10:10
Speaker 3: able to claim that they are environmentally friendly, for example,
10:14
Speaker 3: or care about diversity, equity and inclusion for an example,
10:17
Speaker 3: when in reality there's not a whole.
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Speaker 4: Lot going on there.
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Speaker 3: And I do get the sense that we're hearing the
10:24
Speaker 3: same thing from businesses right now in their approach to
10:27
Speaker 3: artificial intelligence. And we saw a lot of that over
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Speaker 3: the course the last few years. It went quiet for
10:31
Speaker 3: a little bit, and we're seeing a lot more of
10:32
Speaker 3: it just over the last few days.
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Speaker 2: Here, like a quote here from this tech Crunch piece.
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Speaker 2: GM will use Nvidia Omniverse with Cosmos to train AI
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Speaker 2: manufacturing models to help it build next generation factories.
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Speaker 4: You either in video nor GM actually know what that means.
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Speaker 2: Using Omniverse, GM will be able to build a digital
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Speaker 2: twin of its factories, even assembly lines, to virtually test
10:53
Speaker 2: new production processes without disrupting existing vehicle production. Omniverse, right,
10:59
Speaker 2: you guys, like think about how you would try to
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Speaker 2: build factories before you built them previously, Like I don't
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Speaker 2: know it. Maybe there's like some huge thing here and
11:10
Speaker 2: I'm missing it, but gosh, it just feels like there's
11:14
Speaker 2: not much there there. I don't know. It's again and again,
11:21
Speaker 2: it's not like GM has this huge amount of money
11:23
Speaker 2: to spend on this stuff.
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Speaker 3: So and it's also not like in Vidia is the
11:28
Speaker 3: one that is out there developing models for most companies. Yeah,
11:33
Speaker 3: I don't know, Like, yeah, they don't have the experience
11:36
Speaker 3: of building a complex model to evaluate your manufacturing. That's
11:40
Speaker 3: what open ai and what other AI companies do utilizing
11:43
Speaker 3: the infrastructure of Nvidia.
11:46
Speaker 2: Well, so here's one thing that I will say is interesting.
11:49
Speaker 2: And maybe this is in Vidia trying to skate where
11:51
Speaker 2: the puck is going if they're starting to see their
11:55
Speaker 2: hardware revenue plateauing. Yeah, getting into consulting arrangements with companies
11:59
Speaker 2: for how to best use their platform and software. Sure, okay,
12:04
Speaker 2: Like I'm I buy that is, how can we generate
12:07
Speaker 2: revenue once the kapex boom is off? And maybe that's
12:10
Speaker 2: what they're trying to do, And I think that's a
12:12
Speaker 2: smart plan.
12:13
Speaker 4: Yeah, you don't want to become a commoditized business.
12:15
Speaker 2: No, Like I do understand. I understand that, like they
12:19
Speaker 2: they don't want to just become the backbone. They want
12:21
Speaker 2: to become someone who's indispensable and has recurring revenue. Like
12:24
Speaker 2: I get that, but how much of it? How much
12:27
Speaker 2: of it are you going to get from? You need
12:29
Speaker 2: to build a very different organization than than the one
12:31
Speaker 2: you've built so far, which they might be great at doing,
12:34
Speaker 2: like I don't know, like they might be really good
12:36
Speaker 2: at that too. Let's take a quick break here. When
12:39
Speaker 2: we come back, we'll do a little bit of trivia
12:43
Speaker 2: and then we'll talk about what the National Association of
12:46
Speaker 2: home Builders says about where home sales, mortgage rates, and
12:50
Speaker 2: tariff impacts could be going. Right after this.
12:54
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15:02
Speaker 2: Mike, we got a piece in Barons that is an
15:04
Speaker 2: interview with his name, Robert Deetz, the chief economist at
15:09
Speaker 2: the National Association of Homebuilders, and goes through a lot
15:13
Speaker 2: of different topics with him. And obviously, look, no one
15:17
Speaker 2: knows exactly what's gonna happen with housing this year. But generally,
15:20
Speaker 2: when you're you know, the chief economist at the National
15:23
Speaker 2: Association of Homebuilders, you probably know better than we do.
15:26
Speaker 3: Yeah, I would say that's reasonably fair. So highlights from
15:31
Speaker 3: his own forecasts and the interview. He had previously forecasts
15:36
Speaker 3: that home building in the single family area would be
15:39
Speaker 3: flat in twenty twenty five, and I think we're hearing
15:41
Speaker 3: that echoed all over the place that you know, in
15:43
Speaker 3: the places that home builders typically like to build Texas,
15:46
Speaker 3: Florida to name a few areas, there's not well, there's
15:51
Speaker 3: a lot of supply and not quite as much rising demand,
15:54
Speaker 3: and so home builders have been slowing down on those
15:57
Speaker 3: fronts and are also a little bit worried about tariffs.
15:59
Speaker 3: I would also, I would not discount the effect of
16:04
Speaker 3: tariffs on the price of a home, but I think
16:06
Speaker 3: it might be getting overstated in terms of, you know,
16:09
Speaker 3: frustration or difficulty for the home builder. They now have
16:13
Speaker 3: a fair bit of experience in dealing with price uncertainty
16:16
Speaker 3: when it comes to things that go into a home
16:18
Speaker 3: see COVID. And so I think home builders, if demand
16:22
Speaker 3: is there, are more than prepared to say, yeah, we'll
16:25
Speaker 3: build that home, and here where we're going to have
16:27
Speaker 3: escalators in certain areas of construction, like lumber, like appliances,
16:31
Speaker 3: if we have to face higher costs on these than
16:34
Speaker 3: we are currently anticipating. So I think there's again there's
16:38
Speaker 3: tariff concern, there is price concern, but I don't think
16:41
Speaker 3: that that would prohibit building in any meaningful way. If
16:46
Speaker 3: there was actually strong, robust demand in the place that
16:48
Speaker 3: home builders wanted to build.
16:49
Speaker 2: And I think the two questions that I think are
16:52
Speaker 2: out there that are that are meaningful. Again, I think
16:54
Speaker 2: you give you a good summary of how they can address,
16:57
Speaker 2: you know, the price side, and even a dress some
17:00
Speaker 2: of the supply issues potentially, But the demand side is
17:04
Speaker 2: a big one, and specifically demand in the markets where
17:08
Speaker 2: home building has typically been a big thing. Mike, we
17:11
Speaker 2: don't build very many homes here in the Northeast, We
17:14
Speaker 2: just don't. The vast majority of homes in the United
17:17
Speaker 2: States are built in the southeast and the southwestern part
17:20
Speaker 2: of the country. That accounts for you know, the biggest
17:23
Speaker 2: chunk out there. And so if you have questions about
17:28
Speaker 2: being able to build in Florida because of insurance costs
17:31
Speaker 2: and how easily are going to be able to sell
17:33
Speaker 2: those homes, do builders say, Look, this is something that
17:37
Speaker 2: we're not sure of, and we're not sure you know,
17:39
Speaker 2: what the demand's going to be like, because you know,
17:42
Speaker 2: we're seeing pricing pressure in those areas already. Okay, is
17:46
Speaker 2: that something that we pull back on, you know, that's
17:48
Speaker 2: a demand problem. The other piece that's noted in here
17:53
Speaker 2: is they ask, I'll read the question. Deportation of undocumented
17:57
Speaker 2: immigrants has also been a Trump administration priority. Will that
18:00
Speaker 2: affect home building? The response is data from the American
18:03
Speaker 2: Community Serve indicate that about a third of construction workers
18:06
Speaker 2: aren't born in the US. It doesn't tell us whether
18:09
Speaker 2: someone is here legally or not, but it suggests there
18:12
Speaker 2: is a potential risk to the construction labor force when
18:15
Speaker 2: we already have a persistent shortage in skilled labor. So
18:20
Speaker 2: being able to complete projects on time depending on the
18:25
Speaker 2: availability of your labor is a huge question that I
18:28
Speaker 2: don't think they have an answer to correct.
18:30
Speaker 3: Yeah, and I'll take this a step beyond you know,
18:34
Speaker 3: illegal versus legal immigration and the people working in the industry,
18:38
Speaker 3: because there's been estimates of you know, what portion of
18:40
Speaker 3: that labor force is not in the country legally. But
18:43
Speaker 3: even for those who are, as it just mentioned, a
18:45
Speaker 3: third of the workers in this industry were born somewhere else.
18:50
Speaker 3: And so while you might have a valid green card,
18:52
Speaker 3: you likely or quite possibly have family that does not.
18:56
Speaker 3: And if your family is facing deportation or legal ramification
19:00
Speaker 3: for being in the United States, then you might pack
19:02
Speaker 3: up your pack up your tools and go elsewhere as
19:04
Speaker 3: well if your family's you know, facing that type of threat.
19:07
Speaker 3: And so, yeah, that is one area that hasn't to
19:10
Speaker 3: this point become a real issue. But you know, I
19:13
Speaker 3: think it's certainly on the minds of well clearly the
19:15
Speaker 3: chief economist of uh one of the well one of
19:19
Speaker 3: the chief economists of the National Association of home Builders.
19:21
Speaker 3: So I don't think you would answer that way unless
19:23
Speaker 3: it was a genuine concern.
19:25
Speaker 2: Markets are made modestly positive with about a half percent
19:27
Speaker 2: rise across major indices. Quick break and then we've got
19:30
Speaker 2: the trivia answer when we return.
19:42
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19:46
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20:05
Speaker 5: Trivia question today was which university has won the most
20:10
Speaker 5: men's NCAA basketball tournaments. That would be UCLA. They've won
20:16
Speaker 5: eleven the most all time. In Kentucky is in second place.
20:20
Speaker 2: With eight wins there.
20:24
Speaker 5: Winner today was Jeremy from Vineyard Haven, mass taking on
20:28
Speaker 5: that brand new Financial Exchange Show T shirt. Congrats there,
20:32
Speaker 5: and we played trivia every day here on the Financial Exchange.
20:36
Speaker 5: See complete contest rules at Financial Exchange Show dot com
20:40
Speaker 5: by Great.
20:40
Speaker 2: A piece in the Wall Street Journal talking about how
20:43
Speaker 2: Florida is considering trying to figure out how to get
20:48
Speaker 2: rid of their property tax system, and I'll read the
20:53
Speaker 2: quotes here, killing property tax. We believe the state more
20:56
Speaker 2: reliant on its sales tax and strip local governments of
20:58
Speaker 2: revenue to fund everything from schools to services. A full
21:01
Speaker 2: repeal is unlikely soon, but the idea is gaining political traction,
21:06
Speaker 2: reflecting the strain homeowners are under. So here, here's what
21:10
Speaker 2: I know about taxes, and everyone wants them lower, No
21:15
Speaker 2: one wants them higher. Everyone wants them lower. And regardless
21:19
Speaker 2: of where the money comes from, ultimately you're still trying
21:25
Speaker 2: to provide the same services that people expect sanitation, sewers, schools, police, firefighters,
21:34
Speaker 2: you know, things that people expect in a functioning city, state, county, whatever,
21:41
Speaker 2: you know, whatever dividing division you want to look at.
21:46
Speaker 3: And one final point on all that it is fundamentally
21:49
Speaker 3: different from what you're able to do in the federal government,
21:53
Speaker 3: where you have a printing press. It's a zero sum
21:56
Speaker 3: game in the state of Florida, just like it is
21:57
Speaker 3: in mass Chase's New Hampshire and all the other states.
22:00
Speaker 3: You have bills you need to pay, You need to
22:03
Speaker 3: raise the money from somewhere, and your options are taxes
22:07
Speaker 3: or debt.
22:08
Speaker 2: And so here's here's what I know is that you
22:15
Speaker 2: can't just get rid of that vast amount of revenue
22:19
Speaker 2: because look, if the amount of revenue they're raising is
22:21
Speaker 2: so high that people are complaining about it and you're
22:23
Speaker 2: talking about getting rid of it, then you can't just
22:25
Speaker 2: get rid of it and say, well, we'll figure it
22:28
Speaker 2: out through you know, reducing you know, waste and excessive
22:32
Speaker 2: local government spending.
22:35
Speaker 3: Yeah, in fact, there's not enough there. Florida is pretty
22:38
Speaker 3: famous about running a pretty lean government.
22:40
Speaker 2: It's pretty lean. So I'm just trying to figure you know,
22:45
Speaker 2: the risk doesn't leave the system. And look, I'm not
22:50
Speaker 2: saying like, hey, raise taxes like that. That's not where
22:52
Speaker 2: I'm going here, but it's much more. Hey, as you move,
22:56
Speaker 2: you know, through these different things, you eventually get to
23:00
Speaker 2: a point where you're like, Okay, where is the money
23:02
Speaker 2: going to come from to maintain the level of services
23:05
Speaker 2: that we need.
23:06
Speaker 3: And the only answer for Florida, by the way, because
23:08
Speaker 3: they don't have an income tax, would be sales correct,
23:12
Speaker 3: And maybe that's again so.
23:15
Speaker 2: They've ruled in I'll quote here in a state of
23:18
Speaker 2: the State speech, DeSantis ruled out raising any other state
23:20
Speaker 2: taxes to replace property taxes.
23:23
Speaker 3: So, you know, I think one that is a huge
23:27
Speaker 3: problem because you have to go somewhere. But for a
23:30
Speaker 3: state like Florida, I can see the desire to say, hey,
23:33
Speaker 3: we're going to push this on sales taxes because I
23:36
Speaker 3: haven't looked at any numbers, but I would imagine in
23:39
Speaker 3: terms of states that receive, you know, visitors from out
23:43
Speaker 3: of state per capital, Florida's got to be up there
23:45
Speaker 3: in terms of you know, vacationing state, Chuck, you were
23:48
Speaker 3: just there, like they've got massive theme parks, And so
23:53
Speaker 3: I can see as a resident how you would say, yeah,
23:55
Speaker 3: I'd like to rely on that revenue funding more of
23:57
Speaker 3: my government than.
23:59
Speaker 4: My property taxes.
24:00
Speaker 3: But I think they're probably underestimating how much that would
24:04
Speaker 3: need to change.
24:05
Speaker 4: That's kind of my guess.
24:07
Speaker 2: Yeah, I mean, I don't know. I was trying this
24:10
Speaker 2: morning to find, you know, how many houses like not
24:13
Speaker 2: even single family. But just like how many residentss exist
24:15
Speaker 2: in Florida and I was unable to find it. But
24:19
Speaker 2: here's what I do know is if you look at
24:22
Speaker 2: the population of Florida, it is twenty called twenty four
24:26
Speaker 2: million people, Mike, Is it a fair assessment based on
24:29
Speaker 2: what we see nationally? Like two point two people per
24:32
Speaker 2: household is a good place to sure to call it
24:36
Speaker 2: a day. So, whether it's you know, an apartment or
24:39
Speaker 2: whether it's you know, a property that's owned by someone,
24:42
Speaker 2: there are property taxes that are paid on it. So
24:46
Speaker 2: let's say that we've got eleven million units in Florida.
24:51
Speaker 2: I'm just spitballing. I don't know, got it. What I
24:54
Speaker 2: do know is the average property taxes in Florida, which
24:56
Speaker 2: came out to about twenty five hundred dollars last year,
24:59
Speaker 2: the average. Obviously it's higher in coastal communities, lower in
25:01
Speaker 2: the middle of the state. But that is twenty seven
25:04
Speaker 2: billion dollars in revenue. Now, I again, like, twenty seven
25:10
Speaker 2: billion dollars is a big chunk of change. I don't
25:13
Speaker 2: know how you can just get rid of that and
25:14
Speaker 2: say everything's gonna work like the same way that it used.
25:16
Speaker 3: To yeah, you have to raise elsewhere. That's just the
25:21
Speaker 3: reality of the math. It's it again. I'm just trying
25:25
Speaker 3: to sort through this, but it seems challenging. Hey, if
25:30
Speaker 3: they can pull it off and make it work, great,
25:32
Speaker 3: But I don't think you just get rid of twenty
25:34
Speaker 3: seven billion dollars in municipal revenue and say well, it'll be.
25:38
Speaker 2: Fine, right, Chuck.
25:40
Speaker 3: It actually reminds me of a conversation I was having
25:42
Speaker 3: with a client just yesterday. It wasn't about Florida, but
25:44
Speaker 3: they're looking at a relocation from New England down to
25:48
Speaker 3: South or North Carolina, and we were kind of trying
25:50
Speaker 3: to talk through that process and the answer was that
25:54
Speaker 3: they really had no great idea of what their cost
25:57
Speaker 3: of living was going to look like there. But we
25:59
Speaker 3: were able to folks on, hey, these are the properties
26:02
Speaker 3: that we've looked at, and really what a lot of
26:04
Speaker 3: the conversation came down to is, Hey, if we're going
26:06
Speaker 3: to make a move like this, what are the tax implications?
26:10
Speaker 3: What if I need to be able to offer cash
26:12
Speaker 3: on my next property because of how competitive the market is. Interestingly,
26:17
Speaker 3: they were going from a highly competitive market where they're
26:19
Speaker 3: selling in New Hampshire to one that's considerably less so
26:22
Speaker 3: in South and North Carolina, they're looking at about ninety
26:25
Speaker 3: percent of pre COVID inventories back on the market there.
26:29
Speaker 3: But it was a really common question that we get.
26:33
Speaker 3: I know that you've dealt with this with your own
26:35
Speaker 3: clients too, whether it's completely relocating. In this case, they
26:39
Speaker 3: had a daughter who was potentially thinking about doing the same,
26:44
Speaker 3: whether it's buying a second home in some of these markets,
26:46
Speaker 3: or renting to spend part of the year down there.
26:48
Speaker 3: It's a complex series of decisions to go through that
26:52
Speaker 3: affect everything from a state planning all the way through
26:55
Speaker 3: your tax and financial scenarios and borrowing, which we all
26:58
Speaker 3: know those costs are exceedingly high compared to a few
27:02
Speaker 3: years ago. If you're facing that type of decision right now,
27:05
Speaker 3: and I'll be honest right there are some pockets of
27:08
Speaker 3: Florida and other typical places that people like to retire
27:11
Speaker 3: to that are looking a lot more attractive than they
27:13
Speaker 3: did over the last few years. We'd love to talk
27:16
Speaker 3: to you about that process and that idea of relocating
27:19
Speaker 3: or spending time elsewhere, and just how much focus in
27:23
Speaker 3: planning needs to go into it. We talk with our
27:25
Speaker 3: clients about it at the Armstrong Advisor Group frequently. It's
27:28
Speaker 3: one of those features of the relationship with the financial
27:30
Speaker 3: advisor that goes beyond the investments and if you have
27:33
Speaker 3: questions like that, we, like I said'd love to talk
27:35
Speaker 3: to you. The numbers eight hundred three nine three four
27:38
Speaker 3: zero zero one. We offer free consultations in person throughout
27:42
Speaker 3: New England. The number once again for the Armstrong Advisory
27:45
Speaker 3: Group eight hundred three to nine three four zero zero one.
27:49
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:51
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:54
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
27:57
Speaker 1: your own financial, tax, and estate planning advisors before making
28:00
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
28:03
Speaker 1: advisory services.
28:05
Speaker 2: Why uncertainty makes the stock market go haywire? It's the
28:09
Speaker 2: headline in CMBC and look it's it's ultimately it's two things.
28:15
Speaker 2: The first is that if you know we reference you know,
28:19
Speaker 2: good old friend Larry Kudlow, profits are the mother's milk
28:22
Speaker 2: of stocks. Hey, if you have uncertainty about how likely
28:27
Speaker 2: you are to reach certain levels of profit, that obviously
28:31
Speaker 2: gets you know, discounted into the market, and so that hurts.
28:33
Speaker 2: The second piece is, hey, then if you see you know,
28:36
Speaker 2: falling prices of stocks, and you know you're reading stories
28:40
Speaker 2: in this and that, there's a motion that feeds into that,
28:42
Speaker 2: and so there's a feedback loop that happens. And so
28:44
Speaker 2: ultimately it is it's basically, Hey, the math plus emotion
28:52
Speaker 2: makes things get a little bit wobbly.
28:54
Speaker 3: Yeah, it's it's not that much more complex than that.
28:57
Speaker 3: I mean, on one hand, uncertainty is always there in markets,
29:02
Speaker 3: and I think you have to acknowledge that, like people
29:04
Speaker 3: tend to ignore that, Like, No, there's always uncertainty. We
29:08
Speaker 3: never know what in video's earnings are going to look
29:10
Speaker 3: like next week. But when you add in a higher
29:14
Speaker 3: degree of that uncertainty around, hey, I don't know where
29:18
Speaker 3: tax rates or tariff rates are going to look like
29:20
Speaker 3: over what they are going to look like, And I
29:22
Speaker 3: don't know what government spending is going to look like
29:23
Speaker 3: over the course the next few years, and there's an
29:25
Speaker 3: off chance it could look dramatically different than it has previously.
29:30
Speaker 3: That's where uncertainty starts to play into all of this.
29:33
Speaker 2: Just take a quick break here when we come back.
29:35
Speaker 2: We'll do a little bit of stack root left.
29:39
Speaker 1: There's only one show that follows Wall Street's continued volatility.
29:43
Speaker 1: Keep it here all morning long on the Financial Exchange
29:46
Speaker 1: Radio Network. Find daily interviews and full shows of the
29:49
Speaker 1: Financial Exchange on our YouTube page. Like us on YouTube
29:53
Speaker 1: and get caught up on anything and everything you might
29:56
Speaker 1: have missed. This is the Financial Exchange Radio Network.
30:06
Speaker 2: Mike, what you got for me? For stack Rolette?
30:08
Speaker 4: Some Logan Airport news.
30:10
Speaker 3: Mass Port is upping the fee for ride share companies
30:13
Speaker 3: to drop off and pick up passengers at Logan Airport.
30:16
Speaker 3: They'll be bumping that up to five dollars and fifty
30:19
Speaker 3: cents each way. I think it was around three dollars
30:22
Speaker 3: or thereabouts previously. I generally don't really have much of
30:27
Speaker 3: an issue with this. It is not convenient to get
30:29
Speaker 3: to Logan Airport via train, which is problematic, but there
30:33
Speaker 3: are other methods to get there. There's plenty of shuttles
30:36
Speaker 3: and other options to get there. And if they can
30:38
Speaker 3: improve those services to get cars out of those bridges,
30:41
Speaker 3: out of those tunnels and make it faster to get
30:43
Speaker 3: to and from there, I'm kind of all on board.
30:47
Speaker 3: The one issue that I do have with it. That
30:49
Speaker 3: just doesn't make any sense to me. Is the fee
30:52
Speaker 3: now for taxi cabs to pick up and deliver passengers
30:57
Speaker 3: is going to be a full two dollars cheaper than
30:59
Speaker 3: ride share apps? And I just don't see the difference, Like,
31:03
Speaker 3: you don't think that's big enough difference. No, I think
31:05
Speaker 3: they should be the exact same.
31:07
Speaker 2: Oh gotcha.
31:08
Speaker 3: I don't see why it would be significantly cheaper for
31:11
Speaker 3: a taxicab to pick up a passenger and deliver them
31:15
Speaker 3: back to their home that it would be a ride share.
31:17
Speaker 2: There should be no reason.
31:18
Speaker 3: Yeah, And I'm sure it's purely because negotiating with the
31:23
Speaker 3: taxicab using cors in industry is a little bit more
31:26
Speaker 3: difficult to do than the ride sharing industry. But it
31:28
Speaker 3: is a substantial difference. It's five fifty each way under
31:33
Speaker 3: a ride share. On the taxicab side of things, I
31:35
Speaker 3: think it's only three dollars and twenty five cents, and
31:38
Speaker 3: it's only when dropping off a passenger, not when picking
31:40
Speaker 3: one up.
31:42
Speaker 2: I want to talk a little bit about March Madness,
31:44
Speaker 2: which kicks off in Is it twenty five minutes, Tucker,
31:48
Speaker 2: twenty five minutes to go until the first game kicks off,
31:52
Speaker 2: and there's a piece here titled does college basketball have
31:55
Speaker 2: a gambling problem? It should be retitled college basketball has
32:00
Speaker 2: a gambling problem. And by the way, it's not just
32:03
Speaker 2: college basketball, it is all of American sports, including if
32:08
Speaker 2: you want to hear the most disturbing thing, it's down
32:11
Speaker 2: to like the high school and in some cases the
32:12
Speaker 2: middle school level. Uh. And this is like, it's I
32:17
Speaker 2: gotta I gotta say.
32:18
Speaker 5: What do you mean middle school?
32:20
Speaker 2: There are like cases that have come out of illegal
32:24
Speaker 2: gambling on middle school basketball games and football games and
32:27
Speaker 2: stuffes exist, Tucker, I don't either. I'll pull some of
32:32
Speaker 2: the story. I'll see if I can, I said illegal Tucker. Oh,
32:36
Speaker 2: I'll see if I can pull some of the stories
32:38
Speaker 2: on it. But like it's it's popped up at this
32:40
Speaker 2: point just because honestly, how long has sports gambling been
32:44
Speaker 2: legalized in the US?
32:46
Speaker 5: Oh, five years, somewhere in that range, sure, anywhere between
32:51
Speaker 5: like four and seven years.
32:53
Speaker 2: I got to admit, the further we've gone on, I'm
32:56
Speaker 2: not sure we're ready for it. I'm not sure we are.
33:00
Speaker 2: And it's not like I'm not trying to be paternalistic,
33:03
Speaker 2: because honestly, it's your money, whether you lose it gambling
33:06
Speaker 2: or spend it on a boat, it's not your money anymore.
33:09
Speaker 2: Like you've you've spent it. Like that's that's fine. Like
33:12
Speaker 2: we all do, you know, kind of silly things in
33:14
Speaker 2: the fore and you know, for entertainment and for me
33:16
Speaker 2: to like have some you know, holier than thou attitude
33:18
Speaker 2: that like thou shalt not gamble. Like no, like it's
33:22
Speaker 2: not that, it's it's much more that I think it's
33:28
Speaker 2: actually starting to like create a further strain on the
33:32
Speaker 2: fabric of society. And this piece like has one thing
33:35
Speaker 2: that I'll say here. NCAA President Charlie Baker for Massachusetts
33:39
Speaker 2: governor says college athletes have told him they have been
33:42
Speaker 2: pressured by classmates or family members to manipulate their performance,
33:45
Speaker 2: including from a new Shai, such as not taking the
33:47
Speaker 2: first shot or missing a couple of free throws. That's crazy, guys.
33:52
Speaker 2: When you are telling a human being to change what
33:56
Speaker 2: they are doing so you can make more money on
34:00
Speaker 2: a gambling app, you're doing it wrong.
34:04
Speaker 3: Well, also, like that's illegal and you should forget forget
34:09
Speaker 3: the legality of it.
34:10
Speaker 4: It's wrong.
34:11
Speaker 2: This is tearing at the social fabric of what actually
34:15
Speaker 2: allows people to have like commonality and build trust amongst
34:18
Speaker 2: each other. Yeah, and I'm just not sure that we
34:23
Speaker 2: can handle this. And quite honestly, where we're going with
34:26
Speaker 2: so many different places in society right now is just
34:29
Speaker 2: whatever gives me the biggest dopamine rush is what I'm
34:32
Speaker 2: going to flock to, which is why you're seeing, you know,
34:36
Speaker 2: just it's just this gambling impulse, not just on sports,
34:39
Speaker 2: but it's you see it in financial markets, you see
34:41
Speaker 2: it in all different places that are basically like building
34:44
Speaker 2: this into how they are operating now. And I think
34:48
Speaker 2: we're broken. I think we are very, very broken, and
34:52
Speaker 2: I'm not sure that we can handle this.
34:54
Speaker 5: Well, what's the one constant in all uh us?
34:58
Speaker 4: Young men?
34:59
Speaker 2: The fuck you?
35:00
Speaker 1: No, it's the phone.
35:01
Speaker 2: The phone and young men. But those are the two things.
35:03
Speaker 2: Like if you talk to like talk to any Gamblers
35:06
Speaker 2: Help Association, it's like it's ninety nine percent men.
35:10
Speaker 4: Yeah, it's uh.
35:13
Speaker 2: You know, And I don't know how we are going
35:17
Speaker 2: to fix this. The easiest way would be fine, you
35:22
Speaker 2: can have legalized sports gambling, you can't do it on
35:24
Speaker 2: the phone.
35:26
Speaker 3: The one area that I have seen it start creeping
35:29
Speaker 3: into that does concern me that you mentioned Chuck is
35:32
Speaker 3: financial Markets, and I think that there was a platform.
35:36
Speaker 3: It might have even been Robin Hood, but don't quote
35:38
Speaker 3: me on that. That was talking about allowing you to
35:42
Speaker 3: basically gamble on sports within an investment account. And while
35:48
Speaker 3: I can understand how that seems convenient, that is very
35:52
Speaker 3: very dangerous and I think gets into a group of
35:57
Speaker 3: people who are coming up right now who will not
36:00
Speaker 3: be able to tell the difference between an investment and gambling.
36:07
Speaker 3: If you allowed those things to comingle, then you have
36:11
Speaker 3: a very serious future problem here where you know, there
36:14
Speaker 3: are plenty of people listening right now who have a
36:17
Speaker 3: lot of faith in the idea that the US doc
36:19
Speaker 3: market over ten twenty thirty year time periods will appreciate.
36:24
Speaker 3: If that gets mixed up with how gambling performs over
36:28
Speaker 3: a ten twenty and thirty year time period, then we
36:31
Speaker 3: have a real problem with kind of how society functions
36:34
Speaker 3: in the United States, how capitalism functions in the United States.
36:37
Speaker 2: So I think we've got a real issue.
36:41
Speaker 4: He and my problem is that i'm i'm.
36:44
Speaker 3: When it comes to all sorts of stuff like this,
36:46
Speaker 3: like physically addictive stuff like gambling, or psychologically addicting stuff
36:50
Speaker 3: like gambling or drugs. I've always been very much of
36:53
Speaker 3: the opinion that legalize attacks it and let people do
36:56
Speaker 3: what they want. And I'm with you, we're starting to
37:00
Speaker 3: see some of the effects of that.
37:02
Speaker 2: We're kind of broken on the gambling stuff. And again
37:05
Speaker 2: I'm not of the opinion like get rid of it,
37:09
Speaker 2: but we have to figure out how to be able
37:12
Speaker 2: to live with it otherwise I don't know what you do.
37:16
Speaker 2: Like if if you are telling someone who's a college
37:20
Speaker 2: basketball player, hey, can you miss a shot for me tonight? Like,
37:24
Speaker 2: how little do you respect their life?
37:28
Speaker 1: Like?
37:29
Speaker 2: Yeah, sacrifice, sacrifice your performance so that I can do better?
37:34
Speaker 2: Like what are we talking about here? How awful is that?
37:39
Speaker 4: I guess it's better than do that or I'm going
37:41
Speaker 4: to break your kneecaps?
37:43
Speaker 2: Were there lots of stories in that when like sports
37:45
Speaker 2: betting was illegal. No, No, like there weren't. Right, I'm
37:50
Speaker 2: setting a pretty low bar. I don't know where to
37:53
Speaker 2: go with this, but this is bad and it's not bad.
37:58
Speaker 2: It's not because the financial aspect, That's what I'm trying
38:00
Speaker 2: to say, Like the financial aspect, whether you spend your
38:02
Speaker 2: money gambling or on you know, a couple of beers
38:06
Speaker 2: watching a game whatever, but the societal piece and how
38:11
Speaker 2: it's tearing at some of those threads. Ugh, does not
38:16
Speaker 2: feel good to me. Markets remain modestly positive and we'll
38:21
Speaker 2: see where we go the rest of the day. We'll
38:22
Speaker 2: finish up the week tomorrow on the Financial Exchange