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Is Wall Street Watching the AI Boom Collapse? · The Financial Exchange Show

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Speaker 1: is The Financial Exchange with Chuck Zotta and Mike Armstrong.
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Speaker 2: Chuck, Mike, and Tucker with you here today. And we've
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Speaker 2: got an ugly one developing on Wall Street today. As
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Speaker 2: it sits right now, the Dow Jones Industrial Average off
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Speaker 2: about 1,200, no, 1,300 points, down 2.4%. S & P
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Speaker 2: 500 down 3.5%, 268 points down, zapped away there. And
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Speaker 2: the Nasdaq Composite down 5.1%, 1,300 point loss there. And
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Speaker 2: Nasdaq is ground zero for what is occurring here. If
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Speaker 2: you take a look, just as an example, the.
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Speaker 2: Semiconductor stocks as a whole are off about 12% today.
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Speaker 2: That is what we are seeing, which can be read
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Speaker 2: only one way. Markets are starting to price in the
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Speaker 2: end of the AI CapEx boom. That's what you're seeing here.
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Speaker 2: Everything else is getting caught in the wash.
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Speaker 3: I say everything. It's not really everything.
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Speaker 2: You do have three out of eight S & P
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Speaker 2: 500 sectors that are up today, including cute little consumer
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Speaker 2: staples making a run of it up 1.4%. utilities are
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Speaker 2: up a third, and energy's up one just because of
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Speaker 2: renewed concerns about what might happen in the Middle East.
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Speaker 2: Healthcare's basically flat, so you do have some that are
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Speaker 2: holding up okay, but tech's off like 7.5% as a whole.
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Speaker 2: Consumer discretionary's down four. And everything else, every other sector,
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Speaker 2: here's what I will say, nine out of 11 sectors
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Speaker 2: are beating the S & P 500 today. So most
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Speaker 2: stocks are doing better. The problem is a lot of
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Speaker 2: investors are just really heavy in tech And this is
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Speaker 2: where it's just gross on, like, an individual stock level. Like,
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Speaker 2: SanDisk is down 20% today. Do you know what SanDisk's
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Speaker 2: 52-week high is, Mike? I do, because it's in front
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Speaker 2: of me.
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Speaker 3: It's 2354. Do you know what it's at today?
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Speaker 4: 830.
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Speaker 1: Oh, man.
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Speaker 3: It's off 65% from its peak. Yeah. AMD peaked at 658.
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Speaker 2: It's down 16% today. It's at 409, down about 40%
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Speaker 2: from its peak. Micron peaked at $ 12.
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Speaker 3: 55.
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Speaker 2: It's at $ 6. 72, basically a 50% drawdown. Corweave, everyone remember them?
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Speaker 3: Oh, yeah. Peaked at $ 1. 38.
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Speaker 2: It's at $ 41, down more than 70%. It's down 15% today.
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Speaker 2: These are big disorderly moves that in not most of
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Speaker 2: these companies, but a company like Corweave, especially if you
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Speaker 2: look at what's going on in debt markets today where
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Speaker 2: high-yield debt's getting hit as well, Got to be honest,
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Speaker 2: Elon Musk a couple weeks ago said that a lot
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Speaker 2: of these neoclouds are going to die, face guppy-level extinction.
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Speaker 2: These are the kinds of days that start to get
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Speaker 2: you there. Because CoreWeave, they've got to be able to
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Speaker 2: fundraise in order to build. They don't have money just
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Speaker 2: sitting around. If your equity's not worth much and no
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Speaker 2: one wants to lend to you at acceptable prices, that's
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Speaker 2: the ballgame.
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Speaker 5: Bond markets are behaving as I would kind of expect.
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Speaker 5: We've got people bidding up treasury bonds. The yield in
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Speaker 5: the 10-year treasury is down to 4.837%. That's going to
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Speaker 5: filter through to mortgage rates and everywhere else in the economy.
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Speaker 5: So again, risk-off day, plain and simple here. You've got
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Speaker 5: stocks down, bonds up, and investors digesting just what election
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Speaker 5: day really meant for Frankly, the only real driver of
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Speaker 5: stock market growth over the last three years.
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Speaker 3: Gold's up $ 17 an ounce.
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Speaker 2: It was up around $ 60 at one point, but in
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Speaker 2: a sell-off, hey, even investors say, okay, this has been
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Speaker 2: working for me. Let me sell that instead of the
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Speaker 2: stuff that's really down to start off. So gold is
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Speaker 2: up 17 now. Crude oil catching a bit as well
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Speaker 2: after two days of falling. Back up $ 2 a barrel
4:57
Speaker 2: to 90.14 on West Texas Intermediate. AAA national average for
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Speaker 2: gas prices, though, fell 2 cents overnight to 4.10. Diesel
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Speaker 2: also off 2 cents overnight to 6.25. So we'll see
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Speaker 2: how this all shakes out. I have no idea what
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Speaker 2: is going to happen on the energy side of things.
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Speaker 2: I know the last couple days have had some optimism
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Speaker 2: that things are going to draw to a close in
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Speaker 2: the Middle East.
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Speaker 3: But I have no idea.
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Speaker 2: You can envision a narrative and you can spin it
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Speaker 2: either way you want in terms of how things progress
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Speaker 2: over the coming days and weeks. And I don't think
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Speaker 2: it's better than a coin flip personally in terms of
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Speaker 2: how I could realistically assess the possibilities there. When we
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Speaker 2: look at this market right now, again, as of this
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Speaker 2: very moment, the S & P is off 3.2%.
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Speaker 3: That would put this in.
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Speaker 2: You're talking like basically the first percentile for S &
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Speaker 2: P 500 daily returns historically. The NASDAQ is in a
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Speaker 2: worse situation, you know, being down about 5%. That is
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Speaker 2: one of the 40 worst days.
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Speaker 3: All time for the NASDAQ.
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Speaker 2: So, like, if you get the sense that we're talking
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Speaker 2: about this a little differently from a normal sell-off, it's
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Speaker 2: because the magnitude, at least like the worst that we've
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Speaker 2: seen today.
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Speaker 3: Is bigger. If we see markets rally in the afternoon,
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Speaker 3: which I have no idea. It's possible. I don't know
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Speaker 3: what they're going to do.
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Speaker 2: But if markets rally off of here, then you can say, okay,
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Speaker 2: they found their bottom and they dug through this. But
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Speaker 2: we're seeing some stuff, or at least I'm seeing some
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Speaker 2: stuff out there that I got to admit is not
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Speaker 2: stuff you normally see.
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Speaker 3: Yep. It's pretty gnarly out there.
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Speaker 2: Mike, what's the text line if anyone's got questions for us?
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Speaker 6: 617-362-1385. Tucker, people can email the show as well.
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Speaker 4: Yep, tfeshow at gmail.com, or they can jump on our
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Speaker 4: YouTube page on the Financial Exchange on YouTube and participate
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Speaker 4: in the live chat.
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Speaker 2: Yeah, so if you've got questions as to what's going on,
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Speaker 2: Reach out any of those ways.
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Speaker 6: You can woof us.
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Speaker 2: Yeah, you can woof us. We can't answer any personal questions.
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Speaker 2: If you're like, oh, I own this stock. What should
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Speaker 2: I do with it? Sorry, we can't help with that.
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Speaker 2: But if you're just like, hey, I'm seeing this in markets.
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Speaker 2: What does this mean? Or what's going on with this? Yeah,
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Speaker 2: reach out. We can get through all this because days
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Speaker 2: like this are not ones that we see all the time.
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Speaker 3: And, again, like, you know us.
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Speaker 2: A lot of times we poo-poo, like, when markets are
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Speaker 2: down 1% and we're like, oh, like, you know, everyone's
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Speaker 2: freaking out. This is not one to freak out on,
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Speaker 2: but this is one where, like, it's a bigger move
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Speaker 2: that you don't see every day. And let's talk about it.
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Speaker 2: The piece that I will still put out there that
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Speaker 2: I do think is worth noting on this right now
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Speaker 2: is even with the move that we have seen here, Mike,
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Speaker 2: the S & P 500 is still not off 5%
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Speaker 2: from its highs.
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Speaker 1: Right.
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Speaker 2: So I just want to contextualize this because, man, yes,
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Speaker 2: today is like a day of days, but we've seen
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Speaker 2: some stuff that's been way worse than this. I mean, again,
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Speaker 2: you go back to Liberation Day. What did we see?
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Speaker 2: It was 20% in... I'm trying to remember what it
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Speaker 2: was exactly then.
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Speaker 3: It was.
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Speaker 2: No, sorry. It was 20% in three weeks. That's some stuff. This, okay,
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Speaker 2: this is a meaningful day. Who knows what it develops into,
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Speaker 2: but it's one day and we're still less than 5%
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Speaker 2: off of all-time highs.
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Speaker 3: So let's also contextualize.
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Speaker 2: But look, if you're someone who's been heavy in tech
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Speaker 2: and your portfolio's down 50%, I feel for you. I
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Speaker 2: get it because those days are hard. And there's no
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Speaker 2: easy way to reckon with it other than, hey, the
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Speaker 2: only way out is through in terms of assessing what
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Speaker 2: you have, figuring out how to navigate it. And that's
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Speaker 2: something that you have to do based on your risk
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Speaker 2: tolerance and how much money you're willing to lose from here.
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Speaker 2: Because the thing I do always say, how does a
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Speaker 2: stock lose 75%? It loses 50% and then 50% again.
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Speaker 2: And so I don't know where things are going for tech.
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Speaker 2: Maybe this is the bottom. Maybe it's not. But if
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Speaker 2: you're nervous about what's going on today, It's normal. You're
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Speaker 2: not alone. This can be stressful to see days like this.
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Speaker 2: And so text us, email us, hop on the YouTube
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Speaker 2: stream and, you know, pop a question there. We'll talk
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Speaker 2: through some of these things and we're here to help
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Speaker 2: give you some guidance as to, again, not your specific situation,
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Speaker 2: but what's going on in markets. Well, we're happy to
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Speaker 2: talk about that all day. Let's take a quick break, Chuck.
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Speaker 2: When we return, Lindsay Owens is the president and CEO
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Speaker 2: of Groundwork Collaborative. She's also the author of Gouged. I
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Speaker 2: think everyone's referring to the most recent election as an election.
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Speaker 2: on affordability and cost of living. Her book talks a
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Speaker 2: lot about the interesting dynamics that corporations are using these
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Speaker 2: days to find the price that you're willing to pay.
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Speaker 6: All that's next here on the Financial Exchange.
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10:46
Speaker 6: Joining us now is Lindsay Owen.
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Speaker 5: She's the president and CEO of Groundwork Collaborative, the author
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Speaker 5: of Gouge, the end of a fair price and what
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Speaker 5: that means for your wallet.
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Speaker 6: And really excited to talk to her on the program. Lindsay,
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Speaker 6: thank you so much for joining us.
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Speaker 7: Thanks for having me.
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Speaker 6: So, Lindsay, read through the book and have seen a
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Speaker 6: couple of your interviews.
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Speaker 5: You start in the book talking about decades ago, the
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Speaker 5: CEO of Coca-Cola wanting to put in a new pricing
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Speaker 5: structure for bottles of Coke and then getting just flooded
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Speaker 5: with bad feedback on this. Can you talk about how
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Speaker 5: even far before the internet and things like that, CEOs
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Speaker 5: have been looking for ways to charge a higher price?
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Speaker 7: Yeah, look, the impulse to squeeze as much as you
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Speaker 7: can out of consumers is not new. My book just
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Speaker 7: details the host of new technology's that make it a
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Speaker 7: little easier for CEOs to do that. But yeah, in 1999,
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Speaker 7: Doug I. Vester, the CEO of Coke at the time,
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Speaker 7: gave an interview to a Brazilian news outlet where he
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Speaker 7: let slip that they were piloting an experiment to put
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Speaker 7: thermometers in their vending machines. And he said what the
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Speaker 7: plan was. The plan was to be able to automate
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Speaker 7: a system to charge more for Coke, dial up the
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Speaker 7: price of Coke in the vending machine on a hot day.
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Speaker 7: And the American public went berserk, you know, even before
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Speaker 7: the age of viral memes on the internet. This was
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Speaker 7: the shot heard around the world. It was on the
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Speaker 7: cover of newspapers from Honolulu, you know, to the Wall
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Speaker 7: Street Journal, right? Everywhere, every nook and cranny. And he
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Speaker 7: immediately backtracked. By the way, Pepsi seized on the PR
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Speaker 7: gaffe and said, you know, we're in the business of
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Speaker 7: quenching thirst, not exploiting thirst, right?
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Speaker 1: Yeah.
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Speaker 7: So yes, this is not a new impulse, but I
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Speaker 7: think what's new is the technology that allows companies to
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Speaker 7: do this. And frankly, the ways they do it without
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Speaker 7: our knowledge, precisely because it's not a good look for
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Speaker 7: a company to be doing this kind of thing, exploiting thirst,
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Speaker 7: for example, as a business strategy.
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Speaker 5: Well, obviously the way in which we shop for things
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Speaker 5: has changed dramatically over the course, well, since 1999, most certainly.
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Speaker 5: I think we're kind of used to companies exploiting the
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Speaker 5: consumer for the highest price when it comes to things
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Speaker 5: like airfares, or when I go and shop for a car,
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Speaker 5: I know it's going to be a negotiation. But can
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Speaker 5: you tell us about what you found in the grocery segment?
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Speaker 5: Because that is one area where I think most people
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Speaker 5: have the expectation that when they shop for groceries, they're
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Speaker 5: going to face the same price that their neighbor does.
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Speaker 5: And your work found that that's not Not necessarily the case,
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Speaker 5: depending on how you're shopping for those groceries.
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Speaker 7: Yeah, I'll give you three examples. First, my organization exposed
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Speaker 7: that Instacart, the grocery delivery company, had purchased an AI
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Speaker 7: pricing tech company called Eversight in 2022 to start running
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Speaker 7: experiments on shoppers to see how much they could get
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Speaker 7: away with charging us for every item in our grocery cart.
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Speaker 7: What we found is some shoppers were charged 23% more
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Speaker 7: for the exact same item at the exact same time
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Speaker 7: from the exact same store. That is totally anathema to
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Speaker 7: what we expect. You and I are standing in line.
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Speaker 7: We have the same gallon of milk from the same store.
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Speaker 7: We expect to pay the same price. So that was Instacart.
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Speaker 7: Second example, Walmart has a patent for their Scan &
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Speaker 7: Go technology, which allows you to scan the grocery items
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Speaker 7: as you put them in your cart at Walmart and
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Speaker 7: at Sam's Club. They filed a patent to use the
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Speaker 7: Scan & Go technology to charge you more for items
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Speaker 7: based on what was already in your cart. The example
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Speaker 7: they used in their patent, you put a can of
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Speaker 7: tuna in your cart, they're going to change the price
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Speaker 7: of the mayonnaise. So that's the second example. Now, look,
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Speaker 7: Walmart has said they filed the patent. They received the patent.
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Speaker 7: They're not actually planning to use this in the store. But,
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Speaker 7: you know, it speaks to intent.
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Speaker 8: Yeah.
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Speaker 7: I mean, it's a little hard to believe. They've also
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Speaker 7: said that they won't renew the patent, which is... you know,
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Speaker 7: a sort of paltry concession given that the patent doesn't
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Speaker 7: actually expire until 2039. So I'm not really convinced, but
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Speaker 7: that's what they're saying. Final example is electronic shelf labels
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Speaker 7: are in grocery stores across the country now. Electronic shelf
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Speaker 7: labels will be in every single Walmart store by the
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Speaker 7: end of this year. But Kroger and a lot of
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Speaker 7: grocers are using electronic shelf labels. Electronic shelf labels just
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Speaker 7: make it a lot easier to to do dynamic pricing
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Speaker 7: for groceries, right? To raise the price of a can
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Speaker 7: of soup when a snowstorm is imminent, for example. So
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Speaker 7: I think the technology that is moving into brick and
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Speaker 7: mortar stores, whether electronic shelf labels or things like Scan
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Speaker 7: and Go technology that sort of bring the e-commerce experience
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Speaker 7: to the brick and mortar store, give me a lot
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Speaker 7: of pause about the future of grocery shopping in this country.
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Speaker 5: Lindsay, the one area I don't see is a lot
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Speaker 5: of outrage on behalf of consumers about this.
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Speaker 6: Maybe it's because they don't know.
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Speaker 5: Maybe it's because we don't compare, you know, when I'm
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Speaker 5: putting an item in my Instacart basket compared to what
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Speaker 5: my brother is paying for the same item. But one
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Speaker 5: area where there has been some legislative pushback is on
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Speaker 5: rent coordination. Can you talk to us about what landlords
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Speaker 5: are using in terms of this technology to try and
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Speaker 5: price their rent?
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Speaker 3: Yeah, so.
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Speaker 7: You know, it used to be that if you wanted
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Speaker 7: to run a price fixing cartel, you need to get
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Speaker 7: all the other big boys in the industry together in
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Speaker 7: a room and hatch a plan, right? Because, you know,
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Speaker 7: price fixing doesn't really work unless everybody goes in on
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Speaker 7: it together and you've got to coordinate everyone. You can't
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Speaker 7: have any defectors because then they charge a lower price
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Speaker 7: and you lose customers to the competition. These days, you
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Speaker 7: don't have to get in a smoke-filled room. There's an
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Speaker 7: algorithm for that. Landlords across a major metropolitan area can
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Speaker 7: share competitively sensitive price information about the units, about the
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Speaker 7: rent prices, about the amenities, about the lease terms, the
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Speaker 7: lease duration in an app built by a Texas-based company
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Speaker 7: called RealPage, and even use the algorithm to help them
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Speaker 7: decide how much to charge each of us for our rent.
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Speaker 7: And the Department of Justice under the Biden administration rated
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Speaker 7: Cortland Management, one of the big landlords using RealPage, the
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Speaker 7: FBI actually raided them as part of an investigation into
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Speaker 7: a high-tech price-fixing conspiracy. But it's not just real estate.
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Speaker 7: There's a class action lawsuit in California right now against
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Speaker 7: a company called Calibrate that alleges that that tech company
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Speaker 7: helped 1,700 gas station retailers align on price, maybe costing
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Speaker 7: consumers as much as 30 cents a gallon more than
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Speaker 7: it should have in a competitive market. So Algorithmic price
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Speaker 7: fixing is on the rise. It's a serious concern and
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Speaker 7: really a scourge for all of us.
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Speaker 5: Lindsay, I've only got about 30 seconds to a minute here,
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Speaker 5: but do you have three quick tips, especially when shopping online,
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Speaker 5: that consumers can use to combat this, fight back a
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Speaker 5: little bit?
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Speaker 7: Yeah. Tip number one, it shouldn't be our job to
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Speaker 7: duck and dodge and bob and weave and beat the machine.
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Speaker 7: Just want to say that. Tip number two, for real,
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Speaker 7: expand how you comparison shop. It's not enough to look
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Speaker 7: at the same product across brands. Sometimes the price now
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Speaker 7: varies between the brick and mortar store, the website, and
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Speaker 7: even the app. When you're logged into the app, you
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Speaker 7: might be paying a different price based on a whole
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Speaker 7: host of information they get from your in-app purchases. Expand
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Speaker 7: how you comparison shop. Finally, turn the experiment back around
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Speaker 7: on these companies. Buddy's leaving a game, football game this weekend,
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Speaker 7: headed to a bar afterwards. Everybody get out the Uber
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Speaker 7: app and look at the price. Good chance they're running
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Speaker 7: a pricing experiment on you. One of you will be
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Speaker 7: the lucky ones who gets the lower price. turn the
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Speaker 7: experiment back on them, take the lower priced ride.
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Speaker 5: Lindsay Owens, author of Gouged, the end of a fair
18:57
Speaker 5: price and what that means for your wallet. Join us
18:59
Speaker 5: today to talk about the book and their work. Really
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Speaker 5: appreciate it, Lindsay.
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Speaker 6: Thanks so much. Really interesting stuff and appreciate having you on.
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Speaker 7: Thanks for having me.
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Speaker 5: We are going to take a quick break here, but
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Speaker 5: when we return, markets, they've been ugly all day.
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Speaker 6: They've gotten slightly better.
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Speaker 5: I hesitate to even say slightly better when you've got
19:19
Speaker 5: a market that's down 1,000-plus points on the Dow, but
19:23
Speaker 5: we'll have a full recap for you next on The
19:26
Speaker 5: Financial Exchange.
19:39
Speaker 1: Bringing the latest financial news straight to your radio every day.
19:44
Speaker 1: It's The Financial Exchange on The Financial Exchange Radio Network.
19:50
Speaker 1: Time now for Wall Street Watch. Tracking the stocks, the data,
19:54
Speaker 1: and the headlines driving markets so far today. Right here
19:57
Speaker 1: on the Financial Exchange Radio Network.
19:59
Speaker 4: After yesterday's post-election rally, markets have drastically turned negative and
20:03
Speaker 4: are getting pummeled today, driven by significant losses in the
20:07
Speaker 4: AI and chip space. Right now, the Dow is down 2.25%,
20:10
Speaker 4: over 1,100 points lower. S & P 500 down nearly
20:11
Speaker 4: 3% or 225 points lower. NASDAQ down over 4%, over 1,000
20:13
Speaker 4: points lower. It is worth noting, though, that the NASDAQ
20:15
Speaker 4: was down over 5.5% about an hour ago. Russell 2000
20:16
Speaker 4: down by 3%. 10-year Treasury yield down 4 basis points
20:17
Speaker 4: at 4.843%. Crude oil down over 2% at $ 90 a barrel,
20:19
Speaker 4: while Brent down 1%. or excuse me, is up over
20:41
Speaker 4: 2% at $ 90 a barrel, while Brent is up 2%
20:44
Speaker 4: as well at $ 96 a barrel. Qualcomm down nearly 12%
20:48
Speaker 4: after the chipmaker reported lower revenue in the previous quarter
20:51
Speaker 4: as a sharp rise in automotive chip sales was offset
20:54
Speaker 4: by declining handset revenue. Other notable tech names to run
20:58
Speaker 4: through here today during the sell-off, Tesla down by 9%, SpaceX.
21:02
Speaker 3: Is off by 7%.
21:03
Speaker 4: Nvidia stock is falling over 6%. SanDisk plunging 15%. Micron
21:09
Speaker 4: Technology down nearly 11%. And CoreWeave shares are off by
21:14
Speaker 4: over 9%. I'm Tucker Sullivan. That is Wall Street Watch.
21:19
Speaker 2: Mike, what do you want to get to? You want
21:21
Speaker 2: to talk jobs? You want to talk housing? You want
21:23
Speaker 2: to talk AI?
21:26
Speaker 5: Before we go anywhere else, I had a prediction that
21:29
Speaker 5: paid off. I don't think it got onto the board,
21:31
Speaker 5: but I predicted.
21:31
Speaker 3: Well, it's not a real prediction then.
21:34
Speaker 5: I predicted that the vote in Massachusetts on making cannabis
21:39
Speaker 5: illegal again would fail by 80%. It failed by 75%.
21:43
Speaker 5: So I was wrong there. Also, Dover, Massachusetts, the only
21:48
Speaker 5: town in the entire state where the majority of residents
21:51
Speaker 5: voted to.
21:54
Speaker 6: Pass that proposition.
21:56
Speaker 2: I got to tell you, got to do something about
22:00
Speaker 2: the number of ballot questions.
22:02
Speaker 3: Not just a Massachusetts thing.
22:04
Speaker 4: Also, the ballot itself was like a cheesecake menu.
22:09
Speaker 2: First of all, it was huge. It was giant and confusing.
22:13
Speaker 2: Give me some bullet points. Here's the thing. Let's talk
22:18
Speaker 2: ballot questions for a second. Massachusetts, just as an example.
22:22
Speaker 2: They had one to establish like a nature conservation fund.
22:26
Speaker 2: I forget the exact language, but it was something along
22:28
Speaker 2: those lines, right?
22:28
Speaker 3: It was, yep. Mike, do you like nature?
22:31
Speaker 8: Sure.
22:31
Speaker 3: Tucker, do you like nature?
22:33
Speaker 1: Yeah.
22:34
Speaker 3: You think it's okay? Yeah. It's fine. I like nature.
22:37
Speaker 3: I think it's great.
22:38
Speaker 2: But here's the thing. When it comes to determining line
22:44
Speaker 2: items on the budget each year, that's not my job.
22:49
Speaker 7: Right.
22:49
Speaker 2: There's a reason why we have a legislature. And so
22:54
Speaker 2: that is their job to do that stuff and to
22:57
Speaker 2: figure these things out.
22:58
Speaker 3: Like, we don't go out and.
23:01
Speaker 2: Ask every Massachusettsan or every Vermonter or the one that
23:06
Speaker 2: I've heard actually lately that I really like. Have you
23:08
Speaker 2: heard of Michiganders?
23:10
Speaker 6: Michiganders.
23:11
Speaker 3: Michiganders. Yeah. What is that? Is a male a Michigus?
23:16
Speaker 1: Yes.
23:17
Speaker 3: You know, like, what are we doing here? But I digress.
23:20
Speaker 6: You sure do.
23:22
Speaker 2: In any case, here's the thing. Like when it comes
23:26
Speaker 2: up to like, hey, how much should we budget for this?
23:28
Speaker 2: We don't ask all Massachusetts or all Californians or all Floridians.
23:33
Speaker 6: Yeah, I don't like this format of things.
23:35
Speaker 5: I do think there are certain items such as, you know,
23:38
Speaker 5: the public records access thing that was on the ballot. Like, OK,
23:41
Speaker 5: our elected officials keep voting to hide public records.
23:45
Speaker 6: Let's let's have a ballot initiative on that.
23:48
Speaker 3: Sure, sure.
23:49
Speaker 5: But yeah, when it comes to ballot initiatives on things
23:52
Speaker 5: like what should the tax rate be, this, that, or
23:55
Speaker 5: the other, I.
23:57
Speaker 6: Don't know.
23:58
Speaker 2: That's not how it should be done. That's not it.
24:02
Speaker 2: So what's the solution, though? The solution is to make
24:05
Speaker 2: it harder for stuff to get on the ballot. Right
24:08
Speaker 2: now it requires, I forget how many signatures, it's like 70,000
24:11
Speaker 2: or something like that.
24:13
Speaker 3: Double it. If that doesn't work, triple it. I'm sorry, like.
24:18
Speaker 2: It can't be something where 1% of people in your
24:21
Speaker 2: state want something on the ballot.
24:23
Speaker 3: It gets on the ballot.
24:24
Speaker 1: Yeah.
24:24
Speaker 3: That's just not great.
24:26
Speaker 6: It's just a huge waste of resources, if nothing else.
24:29
Speaker 3: Well, it is.
24:31
Speaker 2: Again, the de-legalize, or I guess illegalize.
24:38
Speaker 6: De-legalize. I like that.
24:39
Speaker 3: De-legalize.
24:41
Speaker 2: If you're trying to de-legal-fy marijuana- You don't do it
24:45
Speaker 2: on the ballot after it's already been legal.
24:48
Speaker 3: I'm sorry.
24:49
Speaker 2: That's just not how you do it. It should have
24:51
Speaker 2: been on the ballot to begin with, like the other way.
24:53
Speaker 2: Because that's how it happened originally, right? Yeah.
24:56
Speaker 3: Like, the legislature should deal with it.
25:00
Speaker 2: And here's the thing. If they don't vote the way
25:03
Speaker 2: that you want on the item, then.
25:05
Speaker 6: Vote them out.
25:05
Speaker 2: Then vote the legislature out and put new people in
25:09
Speaker 2: that vote for your stuff.
25:10
Speaker 1: Yeah.
25:11
Speaker 3: It's not that complicated. So that's what I have to
25:16
Speaker 3: say about that.
25:17
Speaker 4: Leaving your assets to your spouse may seem like the
25:19
Speaker 4: simplest way to handle your estate, but without the right planning,
25:23
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25:26
Speaker 4: Cushing & Dolan wants you to understand how a joint
25:28
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25:55
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25:57
Speaker 3: That number again, 866-848-5699.
25:58
Speaker 4: Or you can request the guide from their website, LegalExchangeShow.com.
26:10
Speaker 1: The proceeding was paid for and the views expressed are
26:12
Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
26:14
Speaker 1: or Armstrong Advisory may contact you offering legal or investment services.
26:17
Speaker 1: Cushing and Armstrong do not endorse each other and are
26:19
Speaker 1: not affiliated.
26:21
Speaker 2: Mike, we got the Nasdaq stabilizing a little bit here.
26:23
Speaker 2: It was down almost 6% at one point, now down
26:26
Speaker 2: about 4%. So maybe finding some stability. This has raised
26:31
Speaker 2: an interesting question over the last month now, and in
26:34
Speaker 2: particular today. what does this do to the anthropic IPO?
26:39
Speaker 3: Like you're going to IPO into this. Sure. You know,
26:44
Speaker 3: like how are you going to price that?
26:47
Speaker 2: Where, where, who's really like, who's the core weave shareholder
26:51
Speaker 2: or the SpaceX shareholder after the last week or two?
26:54
Speaker 3: Who's like, yeah, give me that next one.
26:57
Speaker 6: Yeah.
26:57
Speaker 5: I mean, especially we reported last or no, Tuesday, I think, uh,
27:02
Speaker 5: They've already been kind of marking it away from that
27:05
Speaker 5: $ 2 trillion figure, closer to $ 1. 5 trillion. You do have
27:09
Speaker 5: to wonder if this is even possible. And remember, they
27:13
Speaker 5: do not have the rest of the year to figure
27:16
Speaker 5: this out.
27:16
Speaker 3: They've got two weeks.
27:17
Speaker 6: Yeah, two weeks.
27:18
Speaker 3: They've got two weeks from today, basically.
27:21
Speaker 5: Well, if you're looking for one thing that could turn
27:23
Speaker 5: this around, it would be their ability to get that
27:26
Speaker 5: thing off the ground.
27:28
Speaker 2: I mean, the other thing, everyone's trying to sandbag them.
27:32
Speaker 2: Everyone else is doing a capital raise. OpenAI just did one.
27:36
Speaker 2: They had to take, what was it, 60% less than
27:38
Speaker 2: they wanted?
27:39
Speaker 5: I don't know.
27:40
Speaker 2: Meta did theirs. Apple's doing a dead offering today. Apple's
27:43
Speaker 2: not even in the AI business. And they're just like, eh,
27:48
Speaker 2: let's take some money while we can. Everyone's trying to
27:52
Speaker 2: sandbag these guys right now.
27:54
Speaker 3: It feels like.
27:54
Speaker 2: Let's take a quick break. When we return, we're joined
27:58
Speaker 2: by Paul LaMonica. We won't be sandbagging him. He comes
28:01
Speaker 2: right after this.
28:02
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28:09
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28:37
Speaker 4: This segment of the Financial Exchange is brought to you
28:40
Speaker 4: by Circle K, a proud partner of the Disabled American
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Speaker 4: Veterans Department of Massachusetts. and the official convenience store of
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Speaker 4: the DAV5K.
28:52
Speaker 2: As promised, we're now joined by the one and only
28:54
Speaker 2: Paul LaMonica from Barron's today.
28:56
Speaker 3: Paul, how are you?
28:58
Speaker 8: Yeah, it's been a whiplash after yesterday, seeing what's going
29:02
Speaker 8: on today in the markets.
29:04
Speaker 2: Yeah, it's totally healthy price action, just exactly what you
29:09
Speaker 2: love to see. Let's talk a little bit about Circle today.
29:13
Speaker 2: They are caught up in this. They're down about 11% today,
29:16
Speaker 2: I believe, in this sell-off that's taking place. But you've
29:20
Speaker 2: got a piece that you put out yesterday titled, Circle
29:22
Speaker 2: Earnings Show Stablecoins Have Arrived, A Crypto Payoff Could Take Longer.
29:26
Speaker 3: Talk to our listeners about the company.
29:28
Speaker 2: I don't know how many of them are actually familiar
29:30
Speaker 2: with who Circle is and what they do.
29:32
Speaker 8: Yeah. So Circle Internet is one of the leading providers
29:36
Speaker 8: of stable coins, cryptocurrencies that are pegged to an asset
29:42
Speaker 8: that is stable, in this case, US dollar. So Circles
29:46
Speaker 8: USDC competes with USDT from Tether. That's the other very
29:53
Speaker 8: well-known primary stablecoin. Cryptocurrencies and stablecoins are becoming more popular
30:01
Speaker 8: as a means of payment and transferring money with large
30:05
Speaker 8: financial institutions, and Circle has benefited from that. But this
30:10
Speaker 8: is a company that I think investors are still skeptical,
30:14
Speaker 8: particularly in light of what happened with the midterm election results.
30:18
Speaker 8: There could be more of a regulatory scrutiny and crackdown
30:23
Speaker 8: on the crypto landscape with the Democrats taking control of
30:26
Speaker 8: both the House and the Senate.
30:28
Speaker 2: Paul, what about beyond that? Just within the last week,
30:31
Speaker 2: we had the big hack of Binance. And the obvious
30:36
Speaker 2: implications for crypto world are, hey, like how secure, you know,
30:40
Speaker 2: is everything as it relates to crypto? How does a
30:43
Speaker 2: company like Circle fit into those concerns? And are there
30:46
Speaker 2: differences between them and someone like Binance that can put
30:51
Speaker 2: those concerns to bed?
30:52
Speaker 3: Or are they still like a potential problem?
30:55
Speaker 8: I think that there will always be worries about crypto.
31:01
Speaker 8: how fragile in some respects the blockchain can be. And
31:06
Speaker 8: there is that potential for hacking and what that might mean.
31:11
Speaker 8: And what's interesting is that one analyst who has a
31:15
Speaker 8: cell on Circle, his rationale behind that is that If
31:22
Speaker 8: you look at the rise of agentic AI, things like Muse,
31:28
Speaker 8: you ask Muse, for example, what people should do with
31:31
Speaker 8: their money if they're looking to kind of park cash.
31:34
Speaker 8: And Muse, in many respects, mentions FDIC bank accounts because
31:40
Speaker 8: those are insured by the government. If more people are
31:44
Speaker 8: using things like Muse, potentially that could be, this analyst thinks,
31:50
Speaker 8: negative for a company like Circle because people would be
31:53
Speaker 8: less inclined to say, hey, I have this money that
31:55
Speaker 8: I want to park in a, you know, interest account.
31:59
Speaker 8: I'll just do it in a crypto way through a USDC,
32:03
Speaker 8: you know, Circle medium, you know, so that could be
32:07
Speaker 8: a potential problem going forward.
32:10
Speaker 2: How does a company like Circle actually make money? Like,
32:13
Speaker 2: I know, I understand that, you know, okay, they, you know,
32:16
Speaker 2: pay out less interest than they get on what they're receiving.
32:19
Speaker 2: But Like, what are the upsides to the model they
32:21
Speaker 2: have versus just conventional banks? And why can't banks just
32:24
Speaker 2: end up putting them out of business at their own
32:26
Speaker 2: game because of the scale they already have?
32:29
Speaker 8: Yeah, it's a it's a great question. There have always been,
32:31
Speaker 8: you know, wonder your questions whether or not financial institutions
32:36
Speaker 8: would take. cryptos and stablecoins more seriously, which could be
32:41
Speaker 8: a problem for a company like Circle going forward. I
32:45
Speaker 8: think that this is a reason why Circle is trying
32:49
Speaker 8: to diversify as well. They just launched ARK, a new
32:55
Speaker 8: blockchain network that they are actually partnering with companies like
33:00
Speaker 8: Visa and MasterCard and many other big financial institutions. So
33:05
Speaker 8: that could be a way for them to generate more
33:08
Speaker 8: revenue beyond just the money that they make from having
33:14
Speaker 8: these reserve assets. So I think that is a worry
33:17
Speaker 8: for some longer-term investors. But as more and more money
33:23
Speaker 8: goes digitally, that should benefit Circle, although the question now is,
33:28
Speaker 8: how much is that going to change in the regulatory
33:30
Speaker 8: landscape in light of the midterm results?
33:33
Speaker 2: Paul, is there anyone else who's gone public in the
33:34
Speaker 2: last couple of years that does what Circle does?
33:38
Speaker 8: Not really. I mean, Circle's main rival is Tether, which
33:41
Speaker 8: is not a publicly traded company. There have been a
33:45
Speaker 8: lot of crypto-related IPOs, though, a company, Bullish, that's in
33:51
Speaker 8: the exchange place. exchange-based Gemini, Galaxy Digital, obviously, Coinbase is
33:57
Speaker 8: publicly traded, Robinhood making a lot more inroads into crypto,
34:03
Speaker 8: it's publicly traded. So there's not an apples to apples
34:05
Speaker 8: company comparison to Circle because Circle really dominates its area,
34:11
Speaker 8: its niche along with Tether. And there are really no
34:14
Speaker 8: indications that Tether is looking to go public anytime soon.
34:17
Speaker 3: Very good.
34:18
Speaker 2: Paul, appreciate you joining us today. Hope you have a
34:21
Speaker 2: great rest of the week, and we'll catch up with
34:22
Speaker 2: you soon.
34:23
Speaker 8: Great. Thanks a lot. Have a good one, guys.
34:25
Speaker 2: That is Paul and Monica from Barron's talking about Circle
34:29
Speaker 2: Internet Group. Mike, what else you got for me that
34:32
Speaker 2: we haven't covered yet?
34:34
Speaker 5: Probably the most exciting news of the day, which is
34:38
Speaker 5: that dinosaur blood was found in fossils for the first time, which...
34:43
Speaker 5: I mean, this really feels as though we might have
34:47
Speaker 5: Jurassic Park in my lifetime now. But yeah, for the
34:49
Speaker 5: first time ever, the molecules were discovered in 115 million
34:54
Speaker 5: year old bones from Brazil. Don't grab the 115 million
35:02
Speaker 5: year old bones from Brazil and do what you're thinking
35:05
Speaker 5: about doing, scientists. We've seen how this plays out.
35:08
Speaker 2: Mike, what's the species of dinosaur called?
35:12
Speaker 6: Oh, I didn't read the article. Just the headline. What page?
35:16
Speaker 3: It's on the fourth paragraph.
35:18
Speaker 5: Oh, yes.
35:19
Speaker 6: Good. Hold on. Just a moment. I'll get it out
35:21
Speaker 6: for you.
35:22
Speaker 5: It is the Aratosaurus Musunakionale.
35:30
Speaker 3: One of my favorite dinosaurs.
35:31
Speaker 8: Yeah.
35:32
Speaker 3: Especially when it's pronounced like that. It's even better.
35:36
Speaker 2: Look, I got to tell you. Question for both of you.
35:39
Speaker 2: If Jurassic Park were possible.
35:42
Speaker 3: You going?
35:43
Speaker 4: No.
35:44
Speaker 6: Not until I'm 80.
35:46
Speaker 5: Why? Me. You know, I want to, you know, make
35:49
Speaker 5: sure that I raise my children and get them into
35:51
Speaker 5: a good place and then, you know, get to see
35:54
Speaker 5: my grandkids.
35:55
Speaker 6: And then, you know, if I get to 80.
35:58
Speaker 3: Here's the thing.
35:59
Speaker 2: Again, like, I'm going tomorrow for the simple reason that
36:04
Speaker 2: we've made Jurassic Park movies.
36:06
Speaker 3: We know what the problems are.
36:08
Speaker 7: Hmm.
36:08
Speaker 2: We understand don't turn off the electrified fences. We understand
36:13
Speaker 2: don't let Dennis Nedry sneak off with the embryos. We understand,
36:18
Speaker 2: you know, hey, the raptors are going to come from
36:21
Speaker 2: the side, not from the front. So knowing all of this,
36:25
Speaker 2: I don't really see the risk. I think it'll be
36:28
Speaker 2: just fine.
36:29
Speaker 3: Yeah.
36:29
Speaker 6: Famous last words, Chuck.
36:31
Speaker 3: Got to be honest.
36:32
Speaker 5: And honestly, if you're wrong, Chuck Zada eaten by Velociraptor.
36:37
Speaker 3: What a way to go.
36:38
Speaker 6: Like, what a headline.
36:40
Speaker 3: You know?
36:41
Speaker 6: If I have to speak at that wake, then, you know.
36:46
Speaker 3: Mike, here's the thing.
36:47
Speaker 2: If in my life I get eaten by a raptor,
36:50
Speaker 2: you are giving the eulogy.
36:53
Speaker 6: Oh, well, I'm honored.
36:54
Speaker 3: Okay. If it's a T-Rex, it's Tucker. But, no, like,
36:59
Speaker 3: here's the thing. If you, like, honestly, completely serious.
37:03
Speaker 2: Would I rather have drone delivery of packages or Jurassic Park?
37:08
Speaker 1: No, stop.
37:08
Speaker 3: Jurassic Park. Not even close. Not even close. Yeah.
37:15
Speaker 6: One step closer, folks.
37:17
Speaker 2: So, yeah, this is exciting to me. And they even found, supposedly, okay,
37:27
Speaker 2: signs of the protein that helps maintain the hemoglobin inside
37:31
Speaker 2: the dinosaur blood.
37:32
Speaker 1: Mm-hmm.
37:33
Speaker 2: Which is like, got to be honest, if you can
37:36
Speaker 2: actually make that, just imagine like what billionaires would pay
37:39
Speaker 2: for like a dinosaur blood transfusion.
37:41
Speaker 3: Oh, you're right.
37:42
Speaker 6: Yeah.
37:42
Speaker 5: I mean, they also already pay through the roof for,
37:45
Speaker 5: you know, elephant tusk.
37:47
Speaker 6: Imagine this.
37:49
Speaker 3: Well, I mean, who is it?
37:50
Speaker 2: It's Ken Griffin that has all the dinosaur skeletons. Hey,
37:54
Speaker 2: a day like this, I bet he could buy some
37:56
Speaker 2: dinosaur blood with the money he's making today.
37:58
Speaker 5: Yeah.
37:59
Speaker 2: Let's take a quick break for the rest of the day.
38:01
Speaker 2: We're going to be back tomorrow. We've got the DAV
38:04
Speaker 2: Radiothon that's going to be going on then. It's always
38:06
Speaker 2: one of my favorite days of the year. Make sure
38:09
Speaker 2: you tune in. We will see you tomorrow. We've also
38:11
Speaker 2: got a jobs report as well.
38:13
Speaker 3: We'll see you then.