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The year of America's cranky consumer · The Financial Exchange Show

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  Speaker 2: I hope y'all had a great weekend. It's Chuck, Mike,
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  Speaker 2: and Tucker with you here, and we've got a busy week,
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  Speaker 2: my dudes.
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  Speaker 4: And do debts both. Yeah.
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  Speaker 2: Yeah, I mean, look, the centerpiece is Jay Powell and
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  Speaker 2: the Gang are going to be getting together on Wednesday,
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  Speaker 2: and they're going to be potentially changing interest rates, and
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  Speaker 2: they're also going to be giving their summary of economic projections,
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  Speaker 2: despite the fact that they don't have economic data that's
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  Speaker 2: going to be released a week later. I don't know
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  Speaker 2: why they don't just delay this meeting. The more that
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  Speaker 2: I sit here and stew about it, the dumber I
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  Speaker 2: think it is for a bunch of really smart people
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  Speaker 2: to just not push their meeting back by one week
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  Speaker 2: so they can have the economic data on which not
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  Speaker 2: only they're like decision making pens, but the summary of
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  Speaker 2: economic projections. They use data that they will receive next
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  Speaker 2: week in their models to help explain what they think
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  Speaker 2: is going to happen. And all they would need to
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  Speaker 2: do is be like, Hey, instead of having it on
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  Speaker 2: the tenth, we're gonna have it on the seventeenth. Yeah,
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  Speaker 2: But they're not going to do that. I've even gone
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  Speaker 2: so far as to suggests that J. Powell could push
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  Speaker 2: things back an additional week to get more data, in
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  Speaker 2: which case we could have the first ever Christmas Eve
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  Speaker 2: FED meeting.
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  Speaker 4: That sounds terrible for everybody, but I've.
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  Speaker 2: Been told, in no uncertain terms, no, they're not going to.
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  Speaker 4: Terrible for J. Powell and terrible for those who have
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  Speaker 4: to cover it.
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  Speaker 2: Listen, if the NBA can have games on Christmas, why
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  Speaker 2: can't the FED own Christmas Eve ratings?
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  Speaker 4: Yeah?
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  Speaker 2: Right, the FED would have great ratings? Or were you
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  Speaker 2: saying something else.
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  Speaker 1: Saying the FED would not have good ratings?
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  Speaker 2: You don't think so, No, L would. What if what
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  Speaker 2: if you had? Okay, let's go a step further. What
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  Speaker 2: if J. Powell did the halftime show at one of
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  Speaker 2: the NBA games on Christmas? I think he can juggle.
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  Speaker 2: This is pyrotechnics going off. Next show him at the
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  Speaker 2: house red and green tie wardrobe malfunction. It's it's only
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  Speaker 2: around purple fireworks and he's just talking normally. Yeah, well,
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  Speaker 2: we believe that the balance of risks has changed.
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  Speaker 5: There's about like one hundred and fifty Americans that would
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  Speaker 5: find that funny.
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  Speaker 2: And we're in there's there's three of us. It's a
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  Speaker 2: pretty narrow joke in any case. So we do have
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  Speaker 2: the FED this Wednesday, we get the job openings in
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  Speaker 2: the Labor Turnover Survey data. Tomorrow that's the Jolts report.
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  Speaker 2: Uh so that's kind of exciting. But this is the
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  Speaker 2: September one. I'm not clear. I think the October ones
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  Speaker 2: included here as well, but it's it's unclear exactly how
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  Speaker 2: they're going to split them up, if it's gonna just
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  Speaker 2: be one release or two. I just I just don't know.
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  Speaker 2: Thursday we got initial jobless claims, and so that's kind
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  Speaker 2: of what we've got on tap for the week from
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  Speaker 2: an economic data perspective. On the earning side of things,
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  Speaker 2: we got a couple movers and shakers as well. Oracle,
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  Speaker 2: who remember had that big, you know, forty percent jump
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  Speaker 2: after their last earnings report back three months ago. They've
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  Speaker 2: given up all those gains and then some. So I
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  Speaker 2: think the market's going to be watching pretty closely to
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  Speaker 2: be like, hey, is any of that three hundred billion
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  Speaker 2: dollars in potential revenue turning into real revenue. M that'll
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  Speaker 2: be you know, interesting for them to say. Thursday we've
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  Speaker 2: got Broadcom, who's all tied into that AI space. Broadcom, again,
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  Speaker 2: you might have been sleeping on this. There one point
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  Speaker 2: six trillion dollar company.
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  Speaker 4: I's gonna say, it's amazing how little we talk about.
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  Speaker 5: The sixth largest company in the world.
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  Speaker 4: Well, can we talk about why that is? Why we
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  Speaker 4: talk about them very little or why they're so big?
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  Speaker 2: Both in my opinion, because I think they're tied together
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  Speaker 2: quite honestly. The first is they're so big because they
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  Speaker 2: are really, you know, tied into the AI ecosystem. Sure,
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  Speaker 2: they're a mini in video, which is great. The problem
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  Speaker 2: is there a really mini in video? Because in Video
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  Speaker 2: is doing right now about two hundred billion dollars in
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  Speaker 2: revenue and they are growing their revenue sixty percent year
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  Speaker 2: over year. Broadcom, on the other hand, is doing sixty
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  Speaker 2: billion dollars in revenue and they are growing their revenue
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  Speaker 2: twenty two percent year over year. I'm just not sure
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  Speaker 2: that that's really a one point six trillion dollar company.
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  Speaker 5: Beyond all that, they also happen to report their earnings
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  Speaker 5: two to three weeks after in Vidia does, and so
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  Speaker 5: they're old news by the time they get to market.
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  Speaker 2: They're trading thirty two times sales one hundred and two
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  Speaker 2: times earnings, and again not saying they're not insanely profitable.
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  Speaker 2: They are. They made eighteen billion dollars on the fifty
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  Speaker 2: nine billion dollars in revenue that they've done. So like,
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  Speaker 2: it's I'm not I'm not saying like, you guys run
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  Speaker 2: a bad company. You don't like if there are any
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  Speaker 2: broad common employees listening, it's it's not like I'm not
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  Speaker 2: beating up on you. I'm kind of just looking at
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  Speaker 2: the market beating.
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  Speaker 4: Up on the stock investors who are.
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  Speaker 2: Well, it's I'm sorry, but it's just like when I
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  Speaker 2: think of trillion dollar companies, you gotta be doing at
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  Speaker 2: least one hundred billion dollars in sales. I'm sorry, Like
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  Speaker 2: I don't make the rules, but I just did. You did, Yeah,
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  Speaker 2: I did, And they don't quite get there, but they're
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  Speaker 2: still at one point six trillion dollar company, so they
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  Speaker 2: are important and so we're going to discuss them later
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  Speaker 2: this week.
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  Speaker 5: All right, So Wednesday FED meeting, Uh, probably the no,
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  Speaker 5: not probably definitely the event of the week, although we
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  Speaker 5: could see some fireworks out of the media space. What
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  Speaker 5: what are we looking for from this uninformed FED meeting. Again,
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  Speaker 5: we call it uninformed because they're getting a bunch of
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  Speaker 5: more current data on the state of the labor and
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  Speaker 5: inflation market the week after their Federal Reserve meeting due
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  Speaker 5: to the government shutdown. But what are we to anticipate here,
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  Speaker 5: because the expectations, to be very clear, have changed a
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  Speaker 5: lot over the course of the last I remember when
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  Speaker 5: the Williams speech was.
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  Speaker 4: But last thirty days, let's call it.
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  Speaker 2: Yeah. So where I think we are going here, uh,
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  Speaker 2: Is I think that we are going to get Jay
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  Speaker 2: Powell fufu.
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  Speaker 4: Like bunny.
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  Speaker 2: Yes, I think we're going to get a rate cut. Yeah,
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  Speaker 2: and then Jay Powell is going to hop along the
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  Speaker 2: forest and bop us on our heads and tell us
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  Speaker 2: I'm not necessarily cutting rates.
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  Speaker 5: In January, which is exactly what you did after the
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  Speaker 5: last meeting. And yet they're cutting rates.
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  Speaker 2: Yes, I think that's what we're going to get. It's
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  Speaker 2: going to be like it's going to be a hawkish
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  Speaker 2: rate cut. Is I think the the the expectation that
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  Speaker 2: I have, And so that's that's kind of where I
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  Speaker 2: think we're going with this is Yes. But Paul's going
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  Speaker 2: to come out. He's going to say, you know, the
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  Speaker 2: risks to the employment to continue to be present. As such,
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  Speaker 2: the committee is, you know, going to cut interest rates
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  Speaker 2: by a quarter percent, and I'm happy to take questions,
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  Speaker 2: and then someone's gonna ask him, so what is you know,
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  Speaker 2: what are you going to do in January? Well, we're
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  Speaker 2: still assessing, but January is not necessarily a full go
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  Speaker 2: and there very much is a situation where we could
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  Speaker 2: see not cutting rates in January. Okay, everybody listening, Why
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  Speaker 2: should they care? Quite honestly, I don't think they should.
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  Speaker 5: Yeah, I mean, best case scenario, Well, make a difference.
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  Speaker 4: It's not likely to bring down mortgage rates.
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  Speaker 5: We've seen that occur now quite frankly over the course
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  Speaker 5: of the last eighteen months, where FED cuts rates and
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  Speaker 5: mortgage rates either don't move or move upwards. If you've
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  Speaker 5: got those I keep talking to people with all this
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  Speaker 5: money and CDs that have been very excited over the
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  Speaker 5: last five years because for a decade they could earn
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  Speaker 5: nothing when going to the bank. That is continuing to deteriorate.
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  Speaker 4: Latest.
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  Speaker 5: I've seen you know, CD rates in the if you're
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  Speaker 5: lucky four percent range that's going to continue to come
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  Speaker 5: down after the next FED cut. We've also not seen
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  Speaker 5: credit card interest rates really move on the FED cutting cycle.
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  Speaker 5: Number of different reasons for that, but that hasn't really
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  Speaker 5: been a contribute. The main beneficiary I can think of
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  Speaker 5: this continued rate cutting cycle would be equity market investors.
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  Speaker 5: And again I don't expect to see any big movements
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  Speaker 5: and stocks the day of the announcement, but clearly lower
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  Speaker 5: interest rates interest rates benefiting that one cohort.
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  Speaker 2: And by the way, mortgage rates probably moving back up
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  Speaker 2: again today Tenure treasury selling off back up to four
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  Speaker 2: point one eight percent, and so that's probably going to
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  Speaker 2: push the national average for thirty or fixed rate mortgage
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  Speaker 2: backup above six'. Three so, YEAH i, mean, look The
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  Speaker 2: fed is cut interest rates the short Term fed funds
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  Speaker 2: rate but one and a half percent since Last. September despite,
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  Speaker 2: that mortgage rates are exactly where they were then.
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  Speaker 5: ANYTHING i, mean we are very close now to the
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  Speaker 5: end of J powell's, term, right we have let's see this.
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  Speaker 2: One, two three for four more meetings That Jay powell
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  Speaker 2: is going to preside. Over, yeah this one this week
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  Speaker 2: and three others in twenty twenty. Six does that shift
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  Speaker 2: anything around?
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  Speaker 3: It?
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  Speaker 4: Right?
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  Speaker 5: Like you, KNOW i know there's been immense pressure from
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  Speaker 5: The White house on interest. Rates my personal view would,
• 10:15
  Speaker 5: be if YOU'RE Ja, powell there is no pressure to
• 10:18
  Speaker 5: do anything from The White. House you're out anyway In,
• 10:20
  Speaker 5: may and The White house has made it pretty clear,
• 10:23
  Speaker 5: that you, know absence some pretty extreme, stuff they're not
• 10:26
  Speaker 5: going to attempt to remove.
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  Speaker 2: You, YEAH i, MEAN i THINK i Think jay is
• 10:31
  Speaker 2: gonna Be. Jay it's who he's always. BEEN i think
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  Speaker 2: the more interesting question to me BECAUSE i don't think there's,
• 10:40
  Speaker 2: like IF Ja powell were going to be swayed one
• 10:44
  Speaker 2: way or another by you, know threats of his, removal
• 10:48
  Speaker 2: he would have been swayed for a year. Ago he
• 10:50
  Speaker 2: would have BEEN i think the interesting question is J
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  Speaker 2: powell remains on The board Of governors Through january twenty.
• 10:59
  Speaker 2: Eighth does he want to remain on The board Of,
• 11:03
  Speaker 2: governors because remember The board Of governors cycles through THE
• 11:08
  Speaker 2: Fed Open Market. Committee does he want to continue to
• 11:12
  Speaker 2: vote on The Open Market committee after he's no longer. Chair,
• 11:16
  Speaker 2: yeah it's a hard maybe be an interesting. Dynamic my
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  Speaker 2: guess is he probably does not want. TO i Don't
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  Speaker 2: here's the thing seem in keeping WITH J, powell we
• 11:27
  Speaker 2: KNOW i think that he very much wants to finish
• 11:30
  Speaker 2: out his term AS fed chair BECAUSE i think he
• 11:32
  Speaker 2: sees that as. IMPORTANT i suspect he kind of just
• 11:37
  Speaker 2: wants to move on from THE fed at that point
• 11:40
  Speaker 2: and not have all of that hanging over.
• 11:44
  Speaker 4: Him he's got to make his speaking money.
• 11:46
  Speaker 2: And then he can go out and Make what do
• 11:48
  Speaker 2: you think the going rate is FOR J powell these?
• 11:50
  Speaker 2: DAYS i mean we've talked in.
• 11:52
  Speaker 4: The, past any FORMER fed. Chair, well Here's.
• 11:55
  Speaker 2: Bernanke ten years ago was getting two fifty a. Gig
• 11:57
  Speaker 2: so Is.
• 11:58
  Speaker 5: Yellen, okay So i'm guessing, yeah with, inflation you're you're
• 12:02
  Speaker 5: up to three one hundred and three. Fifty oh you
• 12:04
  Speaker 5: only do round numbers as A fed. Chair i'm guessing
• 12:07
  Speaker 5: it's kind of, like you know how when they do
• 12:09
  Speaker 5: the annual adjustments to four ONE k contributions that they
• 12:14
  Speaker 5: only go up in numbers of five hundred or one. Thousand,
• 12:17
  Speaker 5: yeah the question is This powe will get five hundred
• 12:20
  Speaker 5: k yet or.
• 12:20
  Speaker 2: Is he still a two to? Fifty good? Question you,
• 12:23
  Speaker 2: know that's that's kind of where it. Is five HUNDRED
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  Speaker 2: k for an hour's work not half. Bad makes me
• 12:30
  Speaker 2: want to BE fed. Chair let's take a quick break
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  Speaker 2: when we. RETURN i told you this one was gonna get.
• 12:36
  Speaker 2: Juicy we got the next leg in The Netflix Warner
• 12:41
  Speaker 2: Brothers Discovery Paramount, saga and it's a juicy. One right after.
• 12:46
  Speaker 3: This business and financial news affecting the markets and your.
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  Speaker 2: Boston all, Right so this MORNING i want to say
• 13:55
  Speaker 2: it was maybe like eight am or, so somewhere in that.
• 14:00
  Speaker 2: Range paramount launched a hostile takeover For Warner Brothers. Discovery
• 14:08
  Speaker 2: this comes several days After Warner Brothers discovery has reached
• 14:12
  Speaker 2: an agreement With netflix to be acquired by. Them, now
• 14:15
  Speaker 2: a hostile takeover is Not Hans gruber walking Into Nakatomy
• 14:20
  Speaker 2: plaza trying to get a bunch of bearer. Bonds it's
• 14:24
  Speaker 2: not that slightly. Different, okay what is a hostile, Takeover.
• 14:27
  Speaker 2: Michael it's when.
• 14:29
  Speaker 5: You go to offer to buy a, company and rather
• 14:34
  Speaker 5: than the traditional route of the board or the and
• 14:36
  Speaker 5: THE ceo accepting or denying your, offer you bypass them
• 14:41
  Speaker 5: and go straight to the.
• 14:42
  Speaker 4: Shareholders you say, Yes i'm going AND i am going.
• 14:45
  Speaker 5: To put this vote to the vote of your actual,
• 14:48
  Speaker 5: shareholders which you, know the board is not the majority
• 14:53
  Speaker 5: in most, cases and so, they you, know try and
• 14:56
  Speaker 5: actually stuff the deal down the throat of the. Board
• 15:00
  Speaker 5: the initial deal that was agreed to The netflix buyout
• 15:04
  Speaker 5: was agreed to buy THE ceo and the. Board it
• 15:06
  Speaker 5: was a little bit less than The paramount, deal but
• 15:10
  Speaker 5: was not for the same group of. Assets so The
• 15:12
  Speaker 5: netflix deal was mostly, cash but some stock OFFER yep
• 15:16
  Speaker 5: at twenty seven dollars seventy five cents per, share but
• 15:20
  Speaker 5: it was for everything but the cable network business Of, WarnerMedia.
• 15:26
  Speaker 2: Which you could make the case that maybe that doesn't
• 15:28
  Speaker 2: have any value or might have negative value depending on
• 15:31
  Speaker 2: how you view.
• 15:31
  Speaker 4: It no clue what it's. Worth.
• 15:33
  Speaker 5: Yeah The paramount, deal on the other, hand is the
• 15:35
  Speaker 5: entire company at a slightly higher. Price and when you
• 15:38
  Speaker 5: take into account that it's an all cash, offer they
• 15:41
  Speaker 5: point out, that, well you, know because it's all, cash
• 15:43
  Speaker 5: it's eighteen billion dollars more in cash to. SHAREHOLDERS i
• 15:47
  Speaker 5: would also think that if you're buying the entire, company
• 15:49
  Speaker 5: it happens a little bit faster than The netflix deal
• 15:53
  Speaker 5: where they first have to spin the company into two
• 15:55
  Speaker 5: and then complete the. Acquisition BUT i don't, know AND
• 15:59
  Speaker 5: i don't know how much more that is. Worth and
• 16:01
  Speaker 5: nonetheless they are going to try and take this to.
• 16:03
  Speaker 2: Shareholders so we now are going to have again just
• 16:10
  Speaker 2: what is probably going to be a pretty ugly public
• 16:15
  Speaker 2: battle between these two companies to try to Buy Warner Brothers.
• 16:20
  Speaker 5: Discovery you could see the offers get upped. Further paramounts
• 16:24
  Speaker 5: also pointing out that they think that they can get
• 16:27
  Speaker 5: a deal past legislative, concerns anti trust concerns better Than netflix,
• 16:32
  Speaker 5: can and there may be some truth to. That The
• 16:35
  Speaker 5: president has been pretty vocal about, this saying that he
• 16:38
  Speaker 5: has concerns about The netflix deal and has some pretty
• 16:41
  Speaker 5: close connections to The ellison family who Runs, paramount which
• 16:45
  Speaker 5: shouldn't be a, factor but pretty clearly.
• 16:47
  Speaker 2: Is the other thing that you could see here is
• 16:51
  Speaker 2: a proxy, battle which proxy battles. Are, again you don't
• 16:55
  Speaker 2: really see these that often, anymore like they happen, occasionally
• 16:59
  Speaker 2: but basically what you also like the fascinating. Thing paramount
• 17:03
  Speaker 2: could go To Warner. Bros discovery shareholders and be, like,
• 17:06
  Speaker 2: hey do you not like your? Board because we don't
• 17:10
  Speaker 2: like your, board why don't you vote to replace your
• 17:13
  Speaker 2: board and then get a friendly one that would then
• 17:16
  Speaker 2: accept The warner the offer From paramount in. There so
• 17:20
  Speaker 2: you've got a couple different things that you could do.
• 17:22
  Speaker 5: Here, it's by the, way some experts out there AND
• 17:28
  Speaker 5: i don't know how they run, this conclude That netflix
• 17:30
  Speaker 5: deal is worth closer to thirty one or thirty two
• 17:33
  Speaker 5: dollars per, share given that the existing shareholders would continue
• 17:36
  Speaker 5: to hold again a bit Of netflix plus the existing
• 17:42
  Speaker 5: bucket of assets that won't be part of that. Acquisition,
• 17:44
  Speaker 5: AGAIN i don't know how they come up with these,
• 17:46
  Speaker 5: numbers but that is the estimate run by Some.
• 17:50
  Speaker 2: And the thing that you are going to run into
• 17:53
  Speaker 2: pretty quickly is if these prices need to be up
• 17:58
  Speaker 2: to like if you, see you, know these companies trying
• 18:00
  Speaker 2: to one up each other on the pricing side as
• 18:02
  Speaker 2: part of, this there's not much room to. Maneuver and
• 18:08
  Speaker 2: WHAT i mean by that, is let's look At paramount
• 18:12
  Speaker 2: just as an, Example Paramount. Skuidance right, now if we
• 18:16
  Speaker 2: again just pull up like their financials did twenty eight
• 18:19
  Speaker 2: billion dollars in revenue for the last twelve, Months they've
• 18:22
  Speaker 2: got three billion dollars in. Cash they have to borrow
• 18:27
  Speaker 2: north of fifty billion dollars in order to make this
• 18:29
  Speaker 2: work as it, is they have fifty six billion dollars
• 18:32
  Speaker 2: in debt commitments that are lined up eventually like and,
• 18:36
  Speaker 2: again like you can bet in the media, World i'm
• 18:40
  Speaker 2: guessing that the debt that you, are you, know issuing
• 18:43
  Speaker 2: to do so is probably not at four percent for
• 18:46
  Speaker 2: the next ten. Years, now you're probably talking in this
• 18:49
  Speaker 2: environment high single low double digits for your interest. Rates
• 18:53
  Speaker 2: so let's call, it you, know ten percent to make
• 18:56
  Speaker 2: the math. Easy, now you've got five billion dollars in
• 18:59
  Speaker 2: interest ex pence that you are throwing at this each.
• 19:02
  Speaker 2: Year just like, That, netflix despite being a four hundred
• 19:08
  Speaker 2: billion dollar company again by market cap they're four hundred
• 19:13
  Speaker 2: and six billion dollar, company they only do forty three
• 19:16
  Speaker 2: billion dollars in revenue a. Year as, well they have
• 19:20
  Speaker 2: nine billion dollars in cash on. Hand these are not
• 19:24
  Speaker 2: companies that are Like apple And google with billions to
• 19:27
  Speaker 2: just throw, around and in the media landscape that can.
• 19:30
  Speaker 2: Change it could be dangerous if you pay too much
• 19:33
  Speaker 2: quick Break Wall street watches.
• 19:34
  Speaker 4: Next like us.
• 19:41
  Speaker 1: On facebook and follow us On twitter AT tfe.
• 19:44
  Speaker 3: Show breaking business news is always first right here on
• 19:48
  Speaker 3: The Financial Exchange Radio. Network time now For Wall Street
• 19:54
  Speaker 3: watch a complete look at what's moving markets so far
• 19:57
  Speaker 3: today right here on The Financial Exchange.
• 20:00
  Speaker 6: Network that meeting week is upon, us and markets today
• 20:04
  Speaker 6: are pretty. Quiet traders also rating for job openings data
• 20:08
  Speaker 6: due tomorrow, morning in addition to more tech earnings from
• 20:11
  Speaker 6: the likes Of oracle And. Broadcom right, now The dow
• 20:17
  Speaker 6: is down about a quarter percent or one hundred and nineteen.
• 20:20
  Speaker 6: POINTS smp five hundred is down a tenth of a
• 20:22
  Speaker 6: percent or ten. Points nasdaq is edging only two points.
• 20:27
  Speaker 6: Higher russell two thousand is up a third of a
• 20:30
  Speaker 6: percent Ten Your treasure reeled up four basis points at
• 20:33
  Speaker 6: four point one point eight eight. Percent in crude oil
• 20:36
  Speaker 6: down about one and a third, percent trading at fifty
• 20:38
  Speaker 6: nine dollars and twenty five cents a. Barrel in a
• 20:41
  Speaker 6: hostile takeover, Bid paramount is now offering an all, cash
• 20:45
  Speaker 6: thirty dollars per share deal for all Of Warner brothers
• 20:48
  Speaker 6: days After warner agreed to a deal With. Netflix paramount
• 20:52
  Speaker 6: argues its best offer is better for shareholders and more
• 20:55
  Speaker 6: likely to be approved by regulators than The netflix. Offer
• 20:59
  Speaker 6: paramounts To block is rising four, percent While netflix sharers
• 21:02
  Speaker 6: are retreating four. Percent, meanwhile we have some acquisition news
• 21:06
  Speaker 6: in the tech sector this, morning AFTER ibm announced it
• 21:09
  Speaker 6: is buying data streaming Platform confluent and a deal worth
• 21:13
  Speaker 6: eleven billion. DOLLARS ibm shares are up, modestly While confluence
• 21:17
  Speaker 6: stock is surging nearly twenty nine. Percent, elsewhere according to the,
• 21:22
  Speaker 6: Information microsoft was in talks of moving its Custom chips
• 21:26
  Speaker 6: business To broadcom From Marvel. Technology marvel stock is falling nine,
• 21:31
  Speaker 6: percent While broadcom shares are climbing over two percent. Higher
• 21:35
  Speaker 6: Berkshire hathaway announced the departure of Investment officer AND GUICO
• 21:38
  Speaker 6: Ceo Todd, combs who will be JOINING Jp Morgan. Chase
• 21:42
  Speaker 6: berkshire stock is down over one. PERCENT a manufacturer c
• 21:47
  Speaker 6: our hhvac, Company Comfort, systems and online car Retailer carvana
• 21:52
  Speaker 6: are all seeing gains on the day following news that
• 21:54
  Speaker 6: all three companies will join THE s AND p five
• 21:58
  Speaker 6: hundred On december twenty. Six, second Let'll Tucker slovaan that
• 22:02
  Speaker 6: Is wallstree watch.
• 22:03
  Speaker 2: The year Of america's cranky. Consumer it hasn't been a.
• 22:09
  Speaker 2: Year consumers have been pissed since twenty twenty. Two, well
• 22:15
  Speaker 2: let's let's. Discuss, Okay so if we're gonna look at,
• 22:21
  Speaker 2: This i'm guessing we're just gonna look purely at consumer
• 22:25
  Speaker 2: sentiment because that's what's referenced in, here.
• 22:26
  Speaker 5: RIGHT i don't know what else you would look at
• 22:28
  Speaker 5: to determine the crankiness of the Average american.
• 22:31
  Speaker 2: Consumer, Okay so consumer, sentiment as you, note has been
• 22:37
  Speaker 2: bad basically since early twenty twenty.
• 22:41
  Speaker 4: Two it's been a.
• 22:42
  Speaker 2: Dog, yeah it's been bad since. Then it had brief
• 22:46
  Speaker 2: moments of. Positivity the highest that we got was back
• 22:52
  Speaker 2: Last february And. MARCH i don't know why that's the.
• 22:56
  Speaker 2: CASE i don't look at like Last February march And i'm, like,
• 22:58
  Speaker 2: hey like that was like a shining bright spot economically like,
• 23:03
  Speaker 2: it you, know it's just kind of all been the.
• 23:05
  Speaker 2: Same so if we look at this consumer sentiment data,
• 23:11
  Speaker 2: normally which is again produced by The university Of, michigan
• 23:13
  Speaker 2: it comes out once a. Month, generally the times when
• 23:17
  Speaker 2: consumer sentiment has been bad have correlated to bad economies
• 23:22
  Speaker 2: mid nineteen, seventies early nineteen, eighties early nineteen, nineties two
• 23:28
  Speaker 2: thousand and, eight twenty. Eleven, like these were times where
• 23:33
  Speaker 2: AGAIN i was alive for most of, them not all of,
• 23:36
  Speaker 2: them but the ones where LIKE i was alive for
• 23:38
  Speaker 2: AND i, had you, know any semblance of what's going,
• 23:40
  Speaker 2: on or at least can relate back to. It i'm, like, oh,
• 23:42
  Speaker 2: yeah those were objectively bad economies for one reason or.
• 23:48
  Speaker 2: Another and so you look at the consumer sentiment data
• 23:52
  Speaker 2: that you have right, now and it's saying bad like
• 23:57
  Speaker 2: basically historically. Bad you're within sniffic distance of the worst
• 24:00
  Speaker 2: consumer sentiment readings that we've ever. Had, Yes and the
• 24:04
  Speaker 2: part that's challenging to understand is that unemployment is at
• 24:07
  Speaker 2: four and a half, percent which is low by historical.
• 24:10
  Speaker 2: Standards inflation right now is running at three, percent which
• 24:14
  Speaker 2: is elevated relative to you, know the two percent. Target
• 24:17
  Speaker 2: but inflation ran at three percent four you, know the
• 24:20
  Speaker 2: nineteen Ninety, like inflation's been close to three, before and
• 24:23
  Speaker 2: we haven't had. This and so the question THAT i
• 24:28
  Speaker 2: think is out there, Is, hey the economic data as
• 24:32
  Speaker 2: a whole doesn't look. Bad why Are american consumers being
• 24:40
  Speaker 2: cranky bit cranky? Pants and is it? JUSTIFIED i think
• 24:45
  Speaker 2: is the subtext of that as.
• 24:47
  Speaker 5: Well the only time in the data SERIES i can
• 24:49
  Speaker 5: find where consumer sentiment was worse and unemployment was lower
• 24:56
  Speaker 5: than it is today When junito, two.
• 25:01
  Speaker 4: And that's part of the current. Trend so, like this
• 25:04
  Speaker 4: is historically bad.
• 25:08
  Speaker 5: Voting on the economy at a time when unemployment is you,
• 25:14
  Speaker 5: know historically not so. Bad so ONE i think we
• 25:17
  Speaker 5: have to start with my guess that something's just not
• 25:22
  Speaker 5: quite right with the data collection in comparison to nineteen, Ninety,
• 25:28
  Speaker 5: RIGHT i think it's not quite measuring the same thing
• 25:31
  Speaker 5: as my guess, why because every objective measure that we
• 25:38
  Speaker 5: have of the reading on the economy is, different and
• 25:42
  Speaker 5: when you ask people subjective, questions they're giving vastly different
• 25:46
  Speaker 5: responses than they used.
• 25:47
  Speaker 2: To here's my. Counterpoints americans are just. Unhappier what if
• 25:52
  Speaker 2: we are? Different, yeah BECAUSE i think the general rule
• 25:57
  Speaker 2: of thumb THAT i have is that we are more
• 26:00
  Speaker 2: miserable human beings than we've ever. Been And i'm, Like
• 26:05
  Speaker 2: i'm gonna call a spade a space. View, No i'm
• 26:09
  Speaker 2: good with, That, yeah which means that every day you
• 26:12
  Speaker 2: see me is the worst day of my.
• 26:14
  Speaker 1: Life it is Only. Monday so.
• 26:19
  Speaker 2: Where i'm going with, this this is WHERE i think
• 26:20
  Speaker 2: you like we can be. Uplifting then, Yeah i'm. Sorry
• 26:24
  Speaker 2: i'm gonna draw a straight line back to social media
• 26:27
  Speaker 2: and the introduction of the, smartphone because pretty much every
• 26:30
  Speaker 2: measure of psychological, stability well, being and happiness has declined
• 26:36
  Speaker 2: in the last eighteen.
• 26:37
  Speaker 4: YEARS i don't, know, See, chuck you don't. Know you
• 26:41
  Speaker 4: don't know this. Reading have you met PEOPLE i know
• 26:44
  Speaker 4: that they are?
• 26:45
  Speaker 5: Miserable AND i do blame social, media but we all
• 26:49
  Speaker 5: Had facebook and smartphones in twenty seventeen and the data
• 26:53
  Speaker 5: didn't break UNTIL.
• 26:54
  Speaker 2: Covid because the, well the economy was fundamentally different Than
• 26:58
  Speaker 2: and this is the other piece THAT i will say
• 27:01
  Speaker 2: when when looking at the, economy what matters is rate of,
• 27:05
  Speaker 2: change not Level and like this is Something i've come
• 27:09
  Speaker 2: to believe, really really. Strongly the, reason like one of
• 27:13
  Speaker 2: the reasons people are rating the economy badly right now, Is,
• 27:16
  Speaker 2: yes unemployment's four and a, half but it's come up
• 27:19
  Speaker 2: from three point four. Percent is there anyone out there
• 27:22
  Speaker 2: today who sits there and says the job market is
• 27:25
  Speaker 2: objectively better for workers than it was three years.
• 27:29
  Speaker 4: Ago, no it's.
• 27:31
  Speaker 5: Worsened and, likewise with, inflation, it's you, know three, percent
• 27:36
  Speaker 5: but it was nine percent a couple of years. Ago
• 27:39
  Speaker 5: and so you've had cumulative inflation over the last five
• 27:41
  Speaker 5: years that's equal to what you saw for more than.
• 27:43
  Speaker 4: A decade in the twenty.
• 27:44
  Speaker 2: Tens it's like it's like with gas. Prices but, AGAIN
• 27:47
  Speaker 2: i don't THINK i blame that on social, media, no
• 27:50
  Speaker 2: BUT i think we generally just feel. Worse like all
• 27:53
  Speaker 2: of the data out there is that people are unhappier
• 27:56
  Speaker 2: now than they were. Before why would that unhappiness not
• 27:59
  Speaker 2: be reflected in economic. Surveys, also if you're asking someone
• 28:04
  Speaker 2: are you happy or? Unhappy and more people are saying,
• 28:06
  Speaker 2: unhappy and then you ask them are you happy with
• 28:09
  Speaker 2: the economy or unhappy with the? Economy do we really
• 28:12
  Speaker 2: think the average person is just gonna sit back and, go,
• 28:15
  Speaker 2: well you, Know i'm pretty unhappy BECAUSE i spend my
• 28:18
  Speaker 2: whole life just scrolling Through instagram looking at people who
• 28:20
  Speaker 2: have better lives than. Me but, OBJECTIVELY i know that
• 28:23
  Speaker 2: inflation is not that bad right, now and that unemployment
• 28:26
  Speaker 2: is relatively low by historical standards that my parents would
• 28:29
  Speaker 2: have been happy. With and so, Yes i'm going to
• 28:31
  Speaker 2: rate the economy.
• 28:32
  Speaker 4: Well in this?
• 28:33
  Speaker 5: Case can we go completely off script during the next?
• 28:35
  Speaker 5: Segment what else do we? DO i want to talk
• 28:39
  Speaker 5: About australia's plan when it comes to social.
• 28:41
  Speaker 2: Media are they going to put another shrimp on the?
• 28:44
  Speaker 2: Barbie they are gonna take away several shrimp off the?
• 28:47
  Speaker 2: Barbie will they have good? Days?
• 28:48
  Speaker 5: Mate let's take a quick break and can we talk
• 28:51
  Speaker 5: About can we talk about this? Next Because australia is
• 28:54
  Speaker 5: going full extreme when it comes to social media to
• 28:58
  Speaker 5: with their new, law AND.
• 29:00
  Speaker 4: I want to cover that next On The Financial.
• 29:01
  Speaker 1: Exchange text us.
• 29:02
  Speaker 3: Six one seven three six two one three eighty five
• 29:05
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• 30:13
  Speaker 2: Mike so we were talking last segment about why everyone
• 30:18
  Speaker 2: just in the aggregate is just more cranky than they've ever.
• 30:21
  Speaker 2: Been and the reason why we've been talking about this
• 30:25
  Speaker 2: is that consumer sentiment data is basically at or near
• 30:29
  Speaker 2: the worst ever recorded in The United, states despite the
• 30:33
  Speaker 2: fact that unemployment is still what we would consider low,
• 30:36
  Speaker 2: overall and, inflation though higher than, target still not crazy
• 30:43
  Speaker 2: high on an annualized basis right. Now and so the
• 30:46
  Speaker 2: two ipoths hypotheses THAT i put out, There, one it's
• 30:51
  Speaker 2: really about rates of, change not about, levels and unemployment's
• 30:54
  Speaker 2: been moving up and so that makes people. Upset and
• 30:57
  Speaker 2: prices have still been moving, up which makes people, upset
• 31:00
  Speaker 2: and so that's. One the other THAT i put out
• 31:03
  Speaker 2: there is, that, look if you look at basically happiness
• 31:05
  Speaker 2: measurements as a, whole they've pretty much all been declining
• 31:09
  Speaker 2: since the mid two, thousands largely in my, estimation because
• 31:12
  Speaker 2: of smartphones and social. Media and so if you think
• 31:16
  Speaker 2: people were more unhappy in, general they're going to be
• 31:18
  Speaker 2: more uhappy about the economy as.
• 31:19
  Speaker 5: Well, YEAH i think that's a reasonable assessment of, it
• 31:23
  Speaker 5: and so we're going to have a new guinea pig
• 31:25
  Speaker 5: out there for some parts of, this which Is australia
• 31:29
  Speaker 5: quite going forward with a full ban on social media for,
• 31:35
  Speaker 5: kids effectively making a law across the country where you
• 31:39
  Speaker 5: must be sixteen in order to use services such As, Facebook,
• 31:44
  Speaker 5: instagram Kick, Reddit, snapchat, threads, TikTok twitch x and. YouTube
• 31:49
  Speaker 5: others that are not directly social, media such as, Discord, Messenger, pinterest, roadblocks,
• 31:54
  Speaker 5: whatsappen YouTube kids are not part of this, band but
• 31:57
  Speaker 5: we're talking about hundreds of thousands of kids who currently
• 32:00
  Speaker 5: have social media accounts In australia that are going to
• 32:02
  Speaker 5: be kicked, off and hundreds of thousands of more who
• 32:04
  Speaker 5: would have signed up that are going to be blocked
• 32:06
  Speaker 5: from doing. So there's been a couple other countries that
• 32:11
  Speaker 5: have done. This denmark is one of.
• 32:13
  Speaker 4: Them.
• 32:14
  Speaker 5: Famously there are other places that, are you, know talking
• 32:19
  Speaker 5: about similar. Restrictions but a big number of questions THAT i,
• 32:23
  Speaker 5: have most of them center around will we ever do
• 32:26
  Speaker 5: something similar here in The United. States the answer is,
• 32:28
  Speaker 5: no which my answer is almost definitely, not but one
• 32:32
  Speaker 5: there's some big questions as to how these companies are
• 32:34
  Speaker 5: going to implement it because the law does not give
• 32:37
  Speaker 5: any real firm guidance on how they should implement a
• 32:42
  Speaker 5: under sixteen, Ban and so there's been talks of facial
• 32:46
  Speaker 5: identification for, yeah that will go, well, right which is
• 32:50
  Speaker 5: exactly what you. Want Is facebook storing images of your
• 32:54
  Speaker 5: fourteen year old. Permanently they claim they wouldn't do, that
• 32:57
  Speaker 5: but the other ones would be some form of. Ideasification
• 33:00
  Speaker 5: but we don't really do. THAT i don't know What australia.
• 33:04
  Speaker 5: DOES i Know denmark has like a form OF, id
• 33:08
  Speaker 5: but you, know if you live in The United states
• 33:10
  Speaker 5: and you don't have a, passport if you live In
• 33:11
  Speaker 5: australia and you're a kid and you don't have a,
• 33:13
  Speaker 5: passport there's no real GOVERNMENT id way of confirming your.
• 33:17
  Speaker 5: Age but, nonetheless they are threatening these companies with thirty
• 33:20
  Speaker 5: three million dollar fines for violations of the. Policies and,
• 33:26
  Speaker 5: honestly WHILE i am certain that this never gets off
• 33:28
  Speaker 5: the ground because of things like freedom of speech rights
• 33:31
  Speaker 5: in The United states that are tough to get over
• 33:33
  Speaker 5: when you have social.
• 33:34
  Speaker 2: Media well that's even before you get down to the
• 33:36
  Speaker 2: fact that we just bow down at the altar of
• 33:38
  Speaker 2: big tech row and think that these people are law
• 33:40
  Speaker 2: making despite being horribly you, know not great with their
• 33:44
  Speaker 2: ethical decision making has been proved out multiple. Times.
• 33:48
  Speaker 5: YEAH i, mean, look our lawmakers are bought and paid
• 33:49
  Speaker 5: for by these, people SO i think that's another reason
• 33:51
  Speaker 5: it's not going to. Happen BUT i actually think it's
• 33:53
  Speaker 5: one of those issues that would have a tremendous amount
• 33:55
  Speaker 5: of bipartisan support if our lawmakers weren't bought and paid
• 33:59
  Speaker 5: for because of.
• 33:59
  Speaker 2: It and if my mother had a wheel should be a.
• 34:01
  Speaker 2: BICYCLE i also.
• 34:04
  Speaker 5: Just wondering out loud if you know it took us
• 34:07
  Speaker 5: twenty years to realize when did The, yeah twenty years
• 34:11
  Speaker 5: to realize how damaging these platforms, are And australia is
• 34:14
  Speaker 5: going about banning them at the exact same time that
• 34:16
  Speaker 5: they should be focusing on artificial intelligence for children and
• 34:21
  Speaker 5: looking at bands on that stuff instead of just targeting
• 34:24
  Speaker 5: social media right. Now BUT i do applaud What australia is.
• 34:28
  Speaker 5: DOING i, mean it might fail in spectacular, fashion but
• 34:32
  Speaker 5: it's all the evidence points to the fact that this
• 34:35
  Speaker 5: is just terrible for. KIDS i don't AND i always
• 34:40
  Speaker 5: land on like parents should be doing a better job with,
• 34:42
  Speaker 5: This but that's pretty tough when you know there's for
• 34:46
  Speaker 5: every parent doing a good job of policing, it there's
• 34:48
  Speaker 5: ten parents that are doing a crap job and letting
• 34:51
  Speaker 5: their kids use.
• 34:51
  Speaker 4: It so.
• 34:54
  Speaker 2: Yes and no right is kind of WHERE i land.
• 34:59
  Speaker 2: There if you look at if you look at the
• 35:06
  Speaker 2: places where we've tried to make progress in the last
• 35:08
  Speaker 2: like forty or fifty years in terms of like restricting
• 35:11
  Speaker 2: harm to, Teenagers like there's three big. ONES i think
• 35:17
  Speaker 2: that you look at, alcohol, cigarettes and, Pregnancy, okay and
• 35:23
  Speaker 2: we've gotten like much better at all of these in
• 35:25
  Speaker 2: terms of like avoiding bad outcomes and so like if
• 35:31
  Speaker 2: you think, about you, know just like the framework for
• 35:34
  Speaker 2: how to do this, ultimately like everyone when you're fifteen years,
• 35:39
  Speaker 2: old every single one of us would know the one
• 35:43
  Speaker 2: person who was twenty one years old who could buy you, beer, Right, Like,
• 35:48
  Speaker 2: Sure like even if you couldn't do it, personally you
• 35:53
  Speaker 2: knew the one person who could get you. Beer, sure
• 35:56
  Speaker 2: when you were twenty years, old you probably had FAKE
• 36:00
  Speaker 2: id from someone who had given it down to you
• 36:03
  Speaker 2: and it's been you, know handed down through your friend
• 36:04
  Speaker 2: group and so on and so.
• 36:05
  Speaker 5: On, sure but do we call the changes to the
• 36:07
  Speaker 5: alcohol laws of failure because of?
• 36:09
  Speaker 2: That, No BUT i do we really think it's because
• 36:12
  Speaker 2: of alcohol laws that we saw changes in youth. DRINKING
• 36:18
  Speaker 2: i don't think, so, because like you could, still did
• 36:22
  Speaker 2: anyone actually have a hard time getting access to alcohol
• 36:27
  Speaker 2: if they wanted it before they were twenty? One had
• 36:31
  Speaker 2: my entire college like like call it what it was.
• 36:36
  Speaker 2: Like you could drink the second you step foot down
• 36:39
  Speaker 2: a college.
• 36:39
  Speaker 5: Campus but are you saying that the situation didn't get
• 36:42
  Speaker 5: better because there were like one hundreds of thousands OF
• 36:45
  Speaker 5: dui death prior to the twenty One i'm saying it
• 36:47
  Speaker 5: wasn't because of that restrict some societal.
• 36:51
  Speaker 2: Change like the point That i'll, make did we do
• 36:54
  Speaker 2: anything to ban teen? Pregnancy? No, No we educated people
• 37:01
  Speaker 2: and like gave them more information to make more informed.
• 37:04
  Speaker 2: Decisions when you look at what's going on now with
• 37:08
  Speaker 2: kids that, are you, know in their teens and even,
• 37:11
  Speaker 2: twenties and what's going on with drinking even after they're
• 37:13
  Speaker 2: of legal, age there are fewer people drinking now than
• 37:19
  Speaker 2: ever before on a percentage, Basis and So i'm not
• 37:24
  Speaker 2: sure that some top down commandment works for a number of.
• 37:30
  Speaker 2: Reasons this is before you even get into the privacy
• 37:32
  Speaker 2: concerns about how the heck do, you you, know make
• 37:35
  Speaker 2: sure that you're figuring out who someone is without them
• 37:38
  Speaker 2: tracking that person and what they're doing online all over the.
• 37:40
  Speaker 2: Place and SO i JUST i don't think when you
• 37:49
  Speaker 2: look at kids with, technology any roadblocks that you put
• 37:53
  Speaker 2: up to try to slow them, down they can get
• 37:56
  Speaker 2: around if they figure out how to talk to anyone
• 38:00
  Speaker 2: who has kids in that age like ten to fourteen
• 38:03
  Speaker 2: range right, now and they'll tell you that no matter
• 38:05
  Speaker 2: what blocks they put in place on smartphones and things like,
• 38:08
  Speaker 2: that the kids figure out how to get On instagram
• 38:10
  Speaker 2: even though they're not supposed to be on there before they're, Thirteen,
• 38:13
  Speaker 2: like this is stuff that just. Happens and SO i
• 38:18
  Speaker 2: don't think that just being able to, say, yeah we're,
• 38:21
  Speaker 2: gonna you, know ban users under this age is going to.
• 38:25
  Speaker 2: WORK i don't think that's the, case because if you
• 38:28
  Speaker 2: want access to those, things you're going to get, them
• 38:31
  Speaker 2: same as anything else that we ban below a certain.
• 38:33
  Speaker 2: Age what we need to do is figure out how
• 38:36
  Speaker 2: to create the right incentive structure and everything so that
• 38:40
  Speaker 2: kids are making better. Decisions AND i know that's, harder not,
• 38:44
  Speaker 2: sexier but it is what it is in my. Opinion,
• 38:48
  Speaker 2: SORRY i just blew up that whole. Segment let's take
• 38:51
  Speaker 2: a quick break and we got our two coming up
• 38:53
  Speaker 2: in a bit