Latest / The Financial Exchange Show / Tesla’s Flying Roadster Raises a Bigger Question About SpaceX

Transcript

Tesla’s Flying Roadster Raises a Bigger Question About SpaceX · The Financial Exchange Show

• 0:01
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:03
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:06
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:09
  Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
• 0:12
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:15
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:18
  Speaker 1: your own financial tax and estate planning advisors before making
• 0:21
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:24
  Speaker 1: this program do not endorse each other or their services.
• 0:26
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:29
  Speaker 1: for referrals and are not affiliated. this is the financial
• 0:35
  Speaker 1: exchange with chuck zotta and mike armstrong your exclusive look
• 0:39
  Speaker 1: at business and financial news affecting your day your city
• 0:43
  Speaker 1: your world stay informed and up to date about economic
• 0:46
  Speaker 1: and market trends plus breaking business news every day The
• 0:51
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:54
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:58
  Speaker 1: heroes by visiting DAV5K. Boston and making a donation today. This
• 1:04
  Speaker 1: is The Financial Exchange with Chuck Zotta and Mike Armstrong.
• 1:10
  Speaker 2: Chuck, Mike, and Tucker here on a Friday. Friday. And,
• 1:17
  Speaker 2: you know, look, on any day, you have any number
• 1:20
  Speaker 2: of stories that you can talk about. And Tucker puts
• 1:23
  Speaker 2: together our stack. And honestly, Tucker, what's the percentage of
• 1:29
  Speaker 2: days where I'm like, no, we need to, like, make
• 1:32
  Speaker 2: meaningful changes?
• 1:36
  Speaker 3: Three and a half percent.
• 1:38
  Speaker 2: Not even that. Like, that's ten times a year. Okay.
• 1:40
  Speaker 2: So I'd say like twice a year, you know. Today,
• 1:45
  Speaker 2: I think we've got to make a meaningful change. Oh, okay. Okay.
• 1:49
  Speaker 2: Kevin Warsh gave a speech to the IMF.
• 1:51
  Speaker 1: Yeah.
• 1:52
  Speaker 2: Got to be honest, don't care. Yeah, he said nothing.
• 1:55
  Speaker 2: He didn't say anything.
• 1:56
  Speaker 1: Yeah.
• 1:57
  Speaker 2: So, like, we've covered it. So, actually, we're not changing it. Like,
• 2:00
  Speaker 2: was there anything of note in Kevin Warsh's speech? He
• 2:04
  Speaker 2: stuck to his M.O. I don't tell you anything.
• 2:07
  Speaker 3: Correct.
• 2:07
  Speaker 2: You shouldn't read into anything I say. Which is fine. Okay. So, again,
• 2:12
  Speaker 2: he doesn't want to say anything. Other guys, either with
• 2:16
  Speaker 2: his tacit approval or his grimacing disapproval, are talking about
• 2:23
  Speaker 2: forward guidance and what they want to do in subsequent
• 2:25
  Speaker 2: meetings and things like that. But Warsh is basically, no,
• 2:29
  Speaker 2: I'm not going to tell you anything. And that's fine. Again,
• 2:33
  Speaker 2: I fully agree. If you've heard our show for years...
• 2:39
  Speaker 2: One of the things that we've said is like, do
• 2:40
  Speaker 2: we really need like 14 Fed speakers this week? And
• 2:43
  Speaker 2: the answer is always a resounding no. So I'm fine
• 2:46
  Speaker 2: if Kevin Warsh wants to say nothing. The problem is
• 2:49
  Speaker 2: more like in the July meeting where it's like, hey,
• 2:53
  Speaker 2: I'm going to answer your questions badly as opposed to
• 2:56
  Speaker 2: saying nothing. If you just say nothing, like that's fine.
• 2:59
  Speaker 2: But if you give answers that are contradictory and people
• 3:01
  Speaker 2: don't know what to do with them, that's a problem.
• 3:03
  Speaker 2: And he did much better in his More recent press
• 3:06
  Speaker 2: conference really hasn't repeated that bad. And no, at this point,
• 3:11
  Speaker 2: it's a one off. Like his first press conference was fine.
• 3:13
  Speaker 2: His third was fine. The second one, not his best.
• 3:17
  Speaker 2: And maybe that's just the outlier. Like that's that's fine.
• 3:20
  Speaker 4: If the only group you're making angry with your press
• 3:24
  Speaker 4: conferences is the financial media, then I think you're doing
• 3:26
  Speaker 4: a fine job.
• 3:30
  Speaker 2: What are you trying to say? I'm just trying to understand.
• 3:33
  Speaker 4: So the only group that I think is consistently frustrated
• 3:36
  Speaker 4: by Warsh are the talking heads on Bloomberg and CNBC
• 3:38
  Speaker 4: because they don't have anything to talk about.
• 3:40
  Speaker 2: Yes. And that's fine.
• 3:42
  Speaker 1: Yes.
• 3:43
  Speaker 2: I think, well, they were upset after the July meeting
• 3:45
  Speaker 2: because it just didn't make sense. Yeah, but I think
• 3:47
  Speaker 2: they were upset after the first one, after the third one, and... Agreed.
• 3:51
  Speaker 4: More upset after the July meeting because it didn't make
• 3:53
  Speaker 4: any sense, but they've been consistently frustrated about a lack
• 3:56
  Speaker 4: of forward guidance.
• 3:57
  Speaker 2: Which means a lack of anything for them to talk about.
• 3:59
  Speaker 2: But here's the thing. I can't believe now we're spending
• 4:02
  Speaker 2: time talking about what the financial media should be doing. Well,
• 4:05
  Speaker 2: this is precisely my point. I feel like I'm on ESPN. Yeah,
• 4:07
  Speaker 2: I think this is a good thing. Well, so-and-so said
• 4:09
  Speaker 2: on his show that this happened. What do you think
• 4:12
  Speaker 2: about that? But now this is... This is what we're doing.
• 4:17
  Speaker 2: But here's the thing. There's still plenty for financial media
• 4:19
  Speaker 2: to talk about. Hey, Kevin Warsh isn't giving us forward guidance.
• 4:22
  Speaker 2: Here are some of the ways that they could approach things. Yeah. Like, okay,
• 4:27
  Speaker 2: you know, like, sorry that, you know, Josh McDaniels didn't
• 4:31
  Speaker 2: tell you the first 10 plays the Patriots were going
• 4:33
  Speaker 2: to call, but you still figured out how to ask
• 4:34
  Speaker 2: him questions. Maybe you can figure out how to ask
• 4:37
  Speaker 2: Kevin Warsh questions without being like, what are you going
• 4:40
  Speaker 2: to do next meeting? The press conferences are getting a
• 4:44
  Speaker 2: little bit funny. They are. They're so combative now. They are, yeah.
• 4:47
  Speaker 2: And look, I understand it on one level, but it's like, guys,
• 4:51
  Speaker 2: change your approach. And the other thing that I got
• 4:54
  Speaker 2: to say is, what's the phrase about attracting bees or
• 4:59
  Speaker 2: bears with honey instead of with something else? I have
• 5:02
  Speaker 2: no idea what you're talking about. It's like you get
• 5:04
  Speaker 2: a lot more like, if you're nice to people, you
• 5:07
  Speaker 2: get better results. If you're trying to do something special
• 5:11
  Speaker 2: and you're like, You get a lot further being like, hey,
• 5:14
  Speaker 2: I'm just really trying to figure out how to upgrade
• 5:18
  Speaker 2: my hotel room for the anniversary. My wife's having a birthday.
• 5:22
  Speaker 2: Is there anything you can do to make dinner extra special?
• 5:25
  Speaker 2: And the guy at McDonald's is like, yeah, I can
• 5:26
  Speaker 2: throw another burger on there. Perfect. Great. Love this. Again,
• 5:33
  Speaker 2: maybe the financial media just needs to take a different
• 5:35
  Speaker 2: approach on this. Instead of being combative, just, hey, Kevin,
• 5:40
  Speaker 2: how you doing? Get a good night's sleep last night.
• 5:45
  Speaker 2: How are you doing? You. Just change it up a
• 5:50
  Speaker 2: little bit, because clearly it's not working. So, what I
• 5:54
  Speaker 2: do want to do is move up, actually, a story
• 5:58
  Speaker 2: from Hour 2, Michael. Yeah, hit me. Don't hit me.
• 6:02
  Speaker 2: Tesla Roadster. Okay. Okay. So it's been, uh, been taken
• 6:08
  Speaker 2: deposits for a decade. It's been taken deposits for a
• 6:10
  Speaker 2: decade to the point where Sam Altman last year asked
• 6:12
  Speaker 2: for a refund on his, partly because he'd been waiting
• 6:15
  Speaker 2: seven and a half years and partly because he despises
• 6:17
  Speaker 2: Elon Musk. And also Elon Musk despises him too, and
• 6:20
  Speaker 2: probably wouldn't have delivered it anyways. Right.
• 6:22
  Speaker 1: Yeah.
• 6:23
  Speaker 2: You know, like it. It was just this standoff as
• 6:26
  Speaker 2: to who was going to cancel the order first, and
• 6:28
  Speaker 2: Sam blinked. Yeah. So yesterday, I think it was, what,
• 6:32
  Speaker 2: like 8 o'clock, maybe 9 o'clock, somewhere in that range.
• 6:35
  Speaker 2: I was asleep. I don't stay up that late anymore.
• 6:38
  Speaker 2: They debuted the model, the Roadster. The Roadster. And they
• 6:44
  Speaker 2: did a few things with it. The first is... Made
• 6:47
  Speaker 2: it fly.
• 6:47
  Speaker 1: Yes.
• 6:48
  Speaker 2: Again, they drove it up a ramp... inverted it while
• 6:58
  Speaker 2: still attached to the ramp, despite going slow.
• 7:00
  Speaker 1: Yeah.
• 7:01
  Speaker 2: And then had it jump off the ramp, do a
• 7:06
  Speaker 2: half barrel roll. Yeah. And then land softly on the
• 7:11
  Speaker 2: ground from an altitude of what looked like maybe 45
• 7:13
  Speaker 2: or 50 feet.
• 7:15
  Speaker 4: Which does sound impressive, but I gotta tell you, I
• 7:17
  Speaker 4: saw the exact same thing happen last year when I
• 7:20
  Speaker 4: went to go see Back to the Future on Broadway.
• 7:24
  Speaker 2: So, like, we'll see.
• 7:27
  Speaker 4: So. They did the exact same thing. I think there
• 7:30
  Speaker 4: were wires involved in that one, but maybe there were
• 7:32
  Speaker 4: with Tesla, too.
• 7:33
  Speaker 2: I don't know. A couple things on this. First, the
• 7:34
  Speaker 2: way that they ended up doing this, the engineering is
• 7:37
  Speaker 2: just really cool, and I'm going to get to why
• 7:39
  Speaker 2: I think this is actually an important top-of-hour story. Okay.
• 7:43
  Speaker 2: So to go up this ramp and go upside down,
• 7:47
  Speaker 2: they have a suction fan on the bottom of the
• 7:49
  Speaker 2: car to generate downforce.
• 7:51
  Speaker 3: Okay.
• 7:52
  Speaker 2: So it literally holds the car to the road, even
• 7:55
  Speaker 2: when upside down. Yep, got it. which is practically important
• 7:58
  Speaker 2: given all the roads that turn you upside down. Michael,
• 8:00
  Speaker 2: when you're driving inverted, this is a big deal. Of course. Okay?
• 8:05
  Speaker 1: Yep.
• 8:06
  Speaker 2: Again, I say this like tongue-in-cheek, but just hear me
• 8:09
  Speaker 2: out on this for a second. The other things they've done,
• 8:13
  Speaker 2: they put, so they have three different models, three different,
• 8:17
  Speaker 2: not models, but three different trims that you can reserve.
• 8:22
  Speaker 2: The base is the performance one. The next one is
• 8:25
  Speaker 2: the thrust model.
• 8:27
  Speaker 1: Line.
• 8:28
  Speaker 3: Yeah.
• 8:28
  Speaker 2: Which has four little cool air jets in the back
• 8:32
  Speaker 2: that help to propel it forward to go zero to
• 8:36
  Speaker 2: 60 in under a second.
• 8:37
  Speaker 1: Yeah.
• 8:38
  Speaker 2: Now questions I have, Hey, how much cold air can
• 8:41
  Speaker 2: you store in the car? Like, is this, I use
• 8:44
  Speaker 2: it once and then I've got to go into like
• 8:47
  Speaker 2: a Tesla dealer or whatever they're called a Tesla store
• 8:50
  Speaker 2: in order to get it pumped up again. I hope so.
• 8:53
  Speaker 2: I don't know. That'll be about four hours. Or can
• 8:57
  Speaker 2: I use it like a few times? Just because occasionally
• 9:01
  Speaker 2: I need to go zero to 60 in under one second.
• 9:03
  Speaker 2: That's a major need of mine as well. Go on
• 9:05
  Speaker 2: Vin Diesel, yes. The third trim line is called Rocket.
• 9:10
  Speaker 2: And this is the one that landed because it has jets,
• 9:14
  Speaker 2: these jets on the bottom that actually allow the car
• 9:18
  Speaker 2: to either perform, like, a landing or lift off and
• 9:21
  Speaker 2: levitate and turn a little bit in the air. A kickflip,
• 9:24
  Speaker 2: if you will.
• 9:24
  Speaker 1: Yeah.
• 9:25
  Speaker 2: So, again, like, all of this is functionally useless in
• 9:29
  Speaker 2: terms of everyday driving. True. If we're being honest.
• 9:34
  Speaker 4: Tucker has a lot of scenarios where he needs to
• 9:35
  Speaker 4: go from zero to 60 in under a second, apparently.
• 9:38
  Speaker 2: If we're being honest... How long can it hover in
• 9:39
  Speaker 2: the air? Because then I can just avoid traffic. Some
• 9:42
  Speaker 2: of this is kind of cool, and some of it's
• 9:44
  Speaker 2: a little try-hard. It's fine. Here's the point that I
• 9:48
  Speaker 2: will make. Is that the fact that they are actually
• 9:51
  Speaker 2: getting this into a car that's probably going to cost
• 9:54
  Speaker 2: like $ 2 or $ 3 million is my guess. The reservations
• 9:58
  Speaker 2: for the cheapest one are $ 50, 000. The deposit was a
• 10:00
  Speaker 2: quarter million. No, the Thrust one is the quarter million. Okay.
• 10:04
  Speaker 2: And the Rocket one you can't even buy. It's invite only.
• 10:08
  Speaker 2: So I'm guessing Sam Altman's not going to get one.
• 10:10
  Speaker 4: Right.
• 10:11
  Speaker 2: But the piece that is interesting to me is just
• 10:13
  Speaker 2: from an engineering perspective is that Tesla is very much
• 10:18
  Speaker 2: trying to blur the lines between Tesla and SpaceX. Obviously, yep.
• 10:25
  Speaker 2: And so why I think this is top of mind,
• 10:27
  Speaker 2: in my opinion, is because I think that this is
• 10:32
  Speaker 2: a trial balloon precursor to.
• 10:36
  Speaker 2: There's a Tesla-SpaceX merger coming at some point in the future,
• 10:40
  Speaker 2: if you had to pin me down.
• 10:41
  Speaker 4: Even if the product doesn't make any sense whatsoever because
• 10:44
  Speaker 4: we're not going to see flying cars anytime in the
• 10:46
  Speaker 4: next 50 years?
• 10:47
  Speaker 2: It feels like it's coming. And it feels like it's
• 10:53
  Speaker 2: inevitable just because there are some areas where when you
• 10:56
  Speaker 2: talk about compute power that Tesla has bought versus compute
• 10:59
  Speaker 2: power that XAI, which is owned by... SpaceX has bought, hey,
• 11:05
  Speaker 2: now you can commingle those assets for AI development for,
• 11:08
  Speaker 2: you know, whether it's self-driving vehicles or other things like
• 11:11
  Speaker 2: there's places where you can get there. And so I
• 11:14
  Speaker 2: think that this signal is incredibly important when it comes
• 11:18
  Speaker 2: to capital markets for the simple reason that when you
• 11:22
  Speaker 2: look at what this would mean, potentially, and again, this
• 11:27
  Speaker 2: is like a big one as far as, There's nothing
• 11:32
  Speaker 2: guaranteed here, but Tesla is in the S & P 500.
• 11:37
  Speaker 2: It currently makes up about 1.5% of the S &
• 11:39
  Speaker 2: P 500. with a $ 1. 5 trillion market cap.
• 11:45
  Speaker 4: SpaceX, on the other hand, whose market capitalization is approximately
• 11:49
  Speaker 4: $ 2 trillion, is not in.
• 11:51
  Speaker 2: The S & P 500. If these combined, be about
• 11:54
  Speaker 2: a $ 3. 5 trillion company, you would assume. And as such,
• 11:58
  Speaker 2: if S & P decided, okay, this now meets the
• 12:00
  Speaker 2: criteria for inclusion based on the acquisition of a company
• 12:04
  Speaker 2: that was already in here, and we'll use that track
• 12:06
  Speaker 2: record for previous years, Now you've got a company worth 3.5%
• 12:10
  Speaker 2: of the S & P 500, which matters to capital markets,
• 12:14
  Speaker 2: which I think is potentially... I mean, this would be
• 12:19
  Speaker 2: the biggest merger in history by literally an order of magnitude.
• 12:23
  Speaker 2: We've never seen anything like this. This makes AOL Time
• 12:27
  Speaker 2: Warner look like a joke, the Puppy Bowl. So let's
• 12:32
  Speaker 2: take a quick break here. When we return, let's talk
• 12:36
  Speaker 2: a little bit about what we are seeing in energy
• 12:38
  Speaker 2: markets and how that is impacting the Fed.
• 12:41
  Speaker 1: Put the Financial Exchange on your daily watch list. We're
• 12:45
  Speaker 1: live on YouTube with the latest from Wall Street, the
• 12:47
  Speaker 1: economy and the world of business. Watch the show and
• 12:51
  Speaker 1: join us in the live chat. This is the Financial
• 12:53
  Speaker 1: Exchange Media Network. Breaking business news, market moves, live analysis.
• 13:00
  Speaker 1: Find it all on X with the Financial Exchange. Follow
• 13:03
  Speaker 1: us and watch the show live every day. This is
• 13:06
  Speaker 1: the Financial Exchange Media Network.
• 13:21
  Speaker 2: Peace here in Bloomberg. Energy shock filtering through U.S. economy
• 13:25
  Speaker 2: complicates Fed's job. Sorry, guys. Like, you didn't have to
• 13:31
  Speaker 2: take a job as a Fed governor. Like, sorry that
• 13:33
  Speaker 2: it's complicated now.
• 13:35
  Speaker 4: So we got two inflation reports this week, Chuck, right?
• 13:37
  Speaker 4: We got the Consumer Price Index as well as the
• 13:39
  Speaker 4: Producer Price Index.
• 13:40
  Speaker 2: The Producer Price Index was... The way I describe them
• 13:45
  Speaker 2: is not good and not gooder.
• 13:47
  Speaker 4: Yeah, that's a perfect description. I think yesterday you described
• 13:50
  Speaker 4: it as muir in terms of an exaggeration of muir.
• 13:56
  Speaker 2: It was muir caliente. Ah, caliente, that's the word. Yeah,
• 13:59
  Speaker 2: muir caliente. I like that. Yes. And then you later
• 14:03
  Speaker 2: criticized me for a word that I made up. But yeah, nonetheless. Yes,
• 14:07
  Speaker 2: it's creativity for me and none for thee.
• 14:11
  Speaker 4: The producer price index, while less important to the average consumer...
• 14:15
  Speaker 4: I think was the more concerning of the two reports
• 14:18
  Speaker 4: because we've only had, what did we determine? Like four
• 14:22
  Speaker 4: or five hotter month to month over month readings on
• 14:25
  Speaker 4: PPI than what we got yesterday.
• 14:27
  Speaker 2: And it brought us like five, six years. Okay.
• 14:30
  Speaker 4: And it brought us back to decade, you know, year
• 14:33
  Speaker 4: over year numbers that we hadn't seen since December of
• 14:36
  Speaker 4: 2022 on the producer price index month over month numbers
• 14:39
  Speaker 4: we hadn't seen since March of 2022. And so, You
• 14:43
  Speaker 4: are left with a general feeling of discomfort, albeit not
• 14:47
  Speaker 4: a firm understanding of how much of that is going
• 14:49
  Speaker 4: to pass through.
• 14:49
  Speaker 2: To the consumer. And I think that this is an
• 14:51
  Speaker 2: important piece here, is that back in the worst of
• 14:55
  Speaker 2: the worst, in April of 2022, the producer price index
• 14:59
  Speaker 2: hit a high of almost 11.2%. The CPI peaked two
• 15:01
  Speaker 2: months later in June of 22 at 9%. So it
• 15:04
  Speaker 2: didn't pick up all of that. Uh, likewise core PPI, uh,
• 15:15
  Speaker 2: peaked at 9.7% in March of 22. And when we
• 15:20
  Speaker 2: look at core CPI, I just need to see which
• 15:22
  Speaker 2: color it is on my, uh, here we go. It's
• 15:24
  Speaker 2: the orange one. There we go. Core CPI peaked at 6.6%
• 15:28
  Speaker 2: in September of 22. So both on the core and
• 15:32
  Speaker 2: headline level, it's not like all of that was passed through.
• 15:35
  Speaker 2: It's not necessarily the case that that's how it always
• 15:39
  Speaker 2: happens though. Again, like we don't have this date, like,
• 15:41
  Speaker 2: Here's part of the problem. We don't have producer price
• 15:43
  Speaker 2: index data going back to World War II because the
• 15:46
  Speaker 2: producer price index didn't exist back in World War II.
• 15:50
  Speaker 2: So we don't have a long track record that we
• 15:52
  Speaker 2: can look at on a lot of this data because
• 15:56
  Speaker 2: it simply wasn't calculated back then. So based on the
• 16:02
  Speaker 2: recent inflation episode that we went through in 2021 and 22,
• 16:07
  Speaker 2: where things got really elevated and then never came back
• 16:10
  Speaker 2: down as low as we'd like, not all of it
• 16:14
  Speaker 2: passed through in general. I think you could say like
• 16:16
  Speaker 2: 60 to 80 percent of it did is kind of,
• 16:19
  Speaker 2: you know, a fair estimate. And the problem there is that, like,
• 16:23
  Speaker 2: let's take the midpoint of that just as an example.
• 16:25
  Speaker 2: You say, OK, like, let's say that 60, you know,
• 16:28
  Speaker 2: 70 percent of this passes through. Well, if you do
• 16:31
  Speaker 2: the math out, that means that headline CPI still needs
• 16:34
  Speaker 2: to move up another three quarters of a percent in
• 16:37
  Speaker 2: order to get there, which I think everybody would acknowledge
• 16:39
  Speaker 2: is immensely problematic for the Fed. Correct. And for society generally. Now,
• 16:44
  Speaker 2: energy is, you know, I think front and center in
• 16:48
  Speaker 2: terms of what is causing this move. But a secondary
• 16:54
  Speaker 2: piece that you absolutely have to account for is what's
• 16:57
  Speaker 2: going on with the AI build-out, because that is a big...
• 17:02
  Speaker 2: big piece as well. Just as an example, Mike, do
• 17:06
  Speaker 2: you happen to know how much computers, peripherals, and smart
• 17:08
  Speaker 2: home assistants have moved up in the past year? In pricing? Yes. 15%? 9.7%. Yeah.
• 17:17
  Speaker 2: Do you know how much computer software and accessories have
• 17:21
  Speaker 2: moved up? And again, small category, but still. Computer software
• 17:25
  Speaker 2: and accessories. I wouldn't have expected that much.
• 17:26
  Speaker 3: 28.4%.
• 17:26
  Speaker 2: I was going to say 24%. 28.4%. Why is software
• 17:31
  Speaker 2: an accessory? I don't know, Michael. I'm just reading from
• 17:36
  Speaker 2: the CPI.
• 17:37
  Speaker 4: I thought that they were the category that was going
• 17:38
  Speaker 4: to be killed by AI, not benefit in higher pricing,
• 17:41
  Speaker 4: but there you have it.
• 17:42
  Speaker 2: No, smartphone prices are down 10% year over year, which
• 17:45
  Speaker 2: also makes you wonder, like, what the heck is the
• 17:47
  Speaker 2: CPI looking at, given that Apple has raised prices? But
• 17:50
  Speaker 2: I digress. Smartphones actually also, they're not technically included as
• 17:56
  Speaker 2: a separate category. They don't have, like, their own weighting.
• 17:59
  Speaker 2: They're like a subcategory of telephone hardware, so... Again, I'd
• 18:03
  Speaker 2: have to see exactly what's causing that. But this is
• 18:06
  Speaker 2: something where, okay, computers, peripherals, and accessories, it's a small
• 18:12
  Speaker 2: overall portion of the CPI index because how often does
• 18:15
  Speaker 2: the average person buy a new computer? Not very often.
• 18:18
  Speaker 2: And again, this is the consumer price index. So it's
• 18:21
  Speaker 2: only weighted 0.3%. But then you say, okay, if it's
• 18:25
  Speaker 2: up 10% year over year, that causes 0.03% to be
• 18:30
  Speaker 2: added to the CPI year over year from one tiny
• 18:33
  Speaker 2: little category. And so you get several of those that
• 18:37
  Speaker 2: end up happening as a result. And it's like, oh, okay,
• 18:42
  Speaker 2: now I understand where some of this other stuff is
• 18:46
  Speaker 2: coming from. as you look at the inflation side of things.
• 18:51
  Speaker 4: Yeah, the PPI just proved out, I think, what we
• 18:53
  Speaker 4: already truly knew, which is diesel prices, by and large,
• 18:58
  Speaker 4: are driving up prices for suppliers of goods.
• 19:02
  Speaker 2: Yeah.
• 19:03
  Speaker 4: And that is being passed through at all different levels.
• 19:06
  Speaker 4: Go talk to anybody who burns diesel, whether it's a
• 19:09
  Speaker 4: concrete truck company or a FedEx, and they'll all tell
• 19:14
  Speaker 4: you what they are simply doing is charging fuel surcharges
• 19:18
  Speaker 4: to their customers, and their customers have no choice but
• 19:21
  Speaker 4: to either pay or stop buying the stuff.
• 19:24
  Speaker 2: Let's take a quick break here. When we return, we've
• 19:28
  Speaker 2: got Wall Street Watch, and then let's talk a little
• 19:31
  Speaker 2: bit about retired Americans who are putting off fun.
• 19:40
  Speaker 1: Like us on Facebook and follow us on Twitter at TFEShow.
• 19:44
  Speaker 1: Breaking business news is always first, right here on the
• 19:47
  Speaker 1: Financial Exchange Radio Network. Time now for Wall Street Watch.
• 19:53
  Speaker 1: Tracking the stocks, the data, and the headlines driving markets
• 19:57
  Speaker 1: so far today, right here on the Financial Exchange Radio Network.
• 20:00
  Speaker 3: Markets are mixed to wrap up a somewhat chaotic week
• 20:04
  Speaker 3: as a result of concerns about AI spending and hotter-than-expected
• 20:08
  Speaker 3: inflation readings. Right now, the Dow is up a third
• 20:11
  Speaker 3: of a percent or 180 points higher. S & P
• 20:14
  Speaker 3: 500 is down merely four points. NASDAQ is selling off
• 20:18
  Speaker 3: two thirds of a percent or 178 points lower. Russ
• 20:22
  Speaker 3: 2000 is down about a tenth of a percent. Ten-year
• 20:25
  Speaker 3: Treasury yield is at 5.087 percent. And crude oil down
• 20:30
  Speaker 3: three quarters of a percent, trading at $ 97 a barrel. Well,
• 20:34
  Speaker 3: Tesla stock is up about half a percent after it
• 20:36
  Speaker 3: finally unveiled its highly anticipated second-generation Roadster at an event
• 20:41
  Speaker 3: last night. The biggest surprise was the vehicle uses SpaceX-deployed
• 20:45
  Speaker 3: rocket-style thrusters and demonstrated aerial maneuvers. Production is expected to
• 20:50
  Speaker 3: begin in 2028. SpaceX shares, by the way, down by 30%. Meanwhile,
• 20:55
  Speaker 3: CoreWeave shares continue to come under pressure this week over
• 20:58
  Speaker 3: worries about how higher interest rates will impact the computing
• 21:02
  Speaker 3: provider's debts. After a modest rebound yesterday, shares today down
• 21:06
  Speaker 3: another 8%. Elsewhere, after announcing job cuts earlier this week,
• 21:10
  Speaker 3: Netflix added to its shakeup and announced the departure of
• 21:13
  Speaker 3: its chief content officer. The streaming giant continues to struggle
• 21:17
  Speaker 3: with slowing growth in customer engagement. Netflix shares down by
• 21:21
  Speaker 3: 2% in Alcoa. rallying over 7% after the aluminum producer
• 21:26
  Speaker 3: reported higher profit and revenue in the previous quarter. I'm
• 21:31
  Speaker 3: Tucker Sylvan. That is Wall Street Watch.
• 21:33
  Speaker 2: Aluminium. Aluminum. You know, when I first saw that Netflix
• 21:39
  Speaker 2: headline yesterday, you know, sometimes you read things and you
• 21:42
  Speaker 2: read them wrong. Mm-hmm. I'm like, they had a chief
• 21:45
  Speaker 2: content officer? Ha ha ha! And then I'm like, Chuck,
• 21:49
  Speaker 2: you dummy. No one's content. There are firms that have
• 21:53
  Speaker 2: had chief happiness officers, which you obviously find just ridiculous.
• 21:57
  Speaker 2: For like six months during COVID. But yes. But no,
• 22:02
  Speaker 2: I read it for the first time yesterday, and I'm like,
• 22:04
  Speaker 2: chief content officer? Which is such a middle-of-the-road aspiration.
• 22:10
  Speaker 1: Right.
• 22:11
  Speaker 4: I'm not happy, but I am content here.
• 22:13
  Speaker 2: Yeah. Chief Ambivalence Officer Chuck Zada has this to say
• 22:19
  Speaker 2: about not getting too high and not getting too low.
• 22:22
  Speaker 2: Let's talk about this piece from Bloomberg. Retired Americans are
• 22:25
  Speaker 2: putting off fun for fear of running out of money.
• 22:28
  Speaker 2: So there's something that you have to know about fun, Michael.
• 22:32
  Speaker 3: Okay.
• 22:33
  Speaker 2: It doesn't have a price tag. True.
• 22:36
  Speaker 4: I'll also say, like, this is read as a bad story.
• 22:39
  Speaker 4: Fear can actually be a pretty darn good motivator. And...
• 22:43
  Speaker 4: I can't honestly say that the majority of retired Americans
• 22:47
  Speaker 4: are looking real sound in their financial strategy and shouldn't
• 22:51
  Speaker 4: be worried about running out of money. Like fear can
• 22:53
  Speaker 4: be a decent motivator here.
• 22:56
  Speaker 2: So there are a few things to unpack when it,
• 22:59
  Speaker 2: when it comes to this. Uh, the first is, is
• 23:03
  Speaker 2: this purely a retiree phenomenon? And this is where I'm
• 23:07
  Speaker 2: going to say no. Okay. Okay. Uh, I just need
• 23:11
  Speaker 2: to pull up a chart just cause I, here it is. Okay. Uh,
• 23:14
  Speaker 2: Brent Donnelly, who's a, uh, a Forex trader that I
• 23:17
  Speaker 2: follow who again, like I just think is interesting. Like
• 23:19
  Speaker 2: I don't know the first thing about Forex trading because
• 23:22
  Speaker 2: I don't do it, but he just has like interesting
• 23:26
  Speaker 2: takes on like markets in general. And so like I
• 23:28
  Speaker 2: read some of his stuff and he sent out a
• 23:31
  Speaker 2: chart the other day, uh, that shows Americans changes in
• 23:35
  Speaker 2: social activity over the last 30 years.
• 23:37
  Speaker 1: Sure.
• 23:38
  Speaker 2: And as an example, the percentage of Americans who have
• 23:42
  Speaker 2: entertained people in their home in the past 12 months
• 23:46
  Speaker 2: dropped from 88% to 67% over the last 30 years. Now,
• 23:51
  Speaker 2: there's basically nothing cheaper to do for fun than entertaining
• 23:54
  Speaker 2: people in your own home. You don't have to buy anything. Like, yes,
• 23:57
  Speaker 2: you've got to cook a meal for a couple extra people, but... Like,
• 24:01
  Speaker 2: it doesn't have to be anything extravagant. Like, you're not
• 24:02
  Speaker 2: talking about anything crazy. And yet, only two-thirds of Americans
• 24:06
  Speaker 2: have done that in the last year compared to almost
• 24:09
  Speaker 2: 90% 30 years ago.
• 24:11
  Speaker 4: Which falls right in line with other trends we are
• 24:13
  Speaker 4: seeing about human interaction.
• 24:15
  Speaker 2: Mike, when it comes to going out for a meal,
• 24:19
  Speaker 2: what's the cheapest meal you can go out for? Mickey D's. No, like,
• 24:24
  Speaker 2: of the three meals per day.
• 24:26
  Speaker 3: Oh.
• 24:26
  Speaker 2: Breakfast. Breakfast. Right, exactly.
• 24:29
  Speaker 1: Sorry. Sorry.
• 24:30
  Speaker 2: It's fine. I'm curious what you're talking about here. I
• 24:33
  Speaker 2: probably could have tasted better. The answer still holds true.
• 24:36
  Speaker 2: The cheapest breakfast I can find is also at McDonald's.
• 24:40
  Speaker 2: The percentage of Americans who have gone out for breakfast
• 24:42
  Speaker 2: in the last year declined from 87% to 74%. The
• 24:47
  Speaker 2: percentage of Americans who have attended a church or place
• 24:51
  Speaker 2: of worship declined from 74% to 54%. Michael, if you
• 24:56
  Speaker 2: want to be stingy and not put anything in the collections...
• 24:59
  Speaker 2: You can still go to church. You can still go
• 25:01
  Speaker 2: to church. It doesn't cost you anything. How much does
• 25:04
  Speaker 2: a deck of cards cost, Tucker?
• 25:06
  Speaker 1: Oh, jeez.
• 25:07
  Speaker 2: $ 2.
• 25:07
  Speaker 1: 99.
• 25:07
  Speaker 2: $ 4. 99. I'm going to go $ 2. 99.
• 25:09
  Speaker 4: Yeah.
• 25:09
  Speaker 1: $ 2.
• 25:09
  Speaker 2: 99 feels about right.
• 25:10
  Speaker 4: I mean, not if you're buying it at the airport,
• 25:13
  Speaker 4: but yeah, I'm going $ 2.
• 25:14
  Speaker 2: 99. No, if you're buying it at the airport. Walmart, $ 3. 39.
• 25:16
  Speaker 1: $ 3. 39. On sale.
• 25:16
  Speaker 2: That was pretty close. Used to be $ 4.
• 25:19
  Speaker 3: 74.
• 25:19
  Speaker 2: Oh, look at that. Pretty close. You know, low price guarantee.
• 25:23
  Speaker 2: 72% of Americans in 1995 played cards in the past year.
• 25:27
  Speaker 2: 53% now, these are all fun things that are cheap
• 25:33
  Speaker 2: that Americans just aren't doing. Now the piece is talking about,
• 25:36
  Speaker 2: you know, more broadly, Oh, like they're afraid to, you know,
• 25:40
  Speaker 2: spend money on, you know, doing like larger things in
• 25:43
  Speaker 2: this now I go, do you need to take like
• 25:44
  Speaker 2: a big IRA distribution in order to, you know, do
• 25:48
  Speaker 2: this and that. But I got to tell you, I'm
• 25:52
  Speaker 2: starting to think And this is not just an American phenomenon, but, like,
• 25:56
  Speaker 2: something is just broken in the last decade. And I
• 26:00
  Speaker 2: keep coming back to, it's the phones, man. Yeah. Like,
• 26:03
  Speaker 2: I don't know if we're afraid to go out, if
• 26:05
  Speaker 2: we just don't know what to do when we go out.
• 26:08
  Speaker 2: I don't know what it is, but I am convinced that, like...
• 26:13
  Speaker 2: most of our problems can be solved if we just
• 26:15
  Speaker 2: went out and like hung out with other people instead
• 26:18
  Speaker 2: of sitting at home on our phones, scrolling through Instagram, Twitter.
• 26:22
  Speaker 1: Yeah.
• 26:22
  Speaker 4: Because then we think the only way to have fun
• 26:24
  Speaker 4: is to buy a first class ticket to the Amalfi coast.
• 26:27
  Speaker 2: And that's what it like. Yeah.
• 26:29
  Speaker 4: I I'm, I'm right there with you that that is
• 26:31
  Speaker 4: the problem. Um, the piece here in Bloomberg does have
• 26:35
  Speaker 4: a bunch of, uh, because you know what, Chuck, we
• 26:38
  Speaker 4: both have as, as it's just like ridiculous.
• 26:41
  Speaker 2: Like, 86% of retirees said that they would feel guilty
• 26:44
  Speaker 2: about a bucket list purchase like a beach house. Okay,
• 26:48
  Speaker 2: like most Americans don't buy beach houses anyway. So like,
• 26:51
  Speaker 2: what are we doing here?
• 26:52
  Speaker 4: Also, when interviewing Prudential, they had one piece of advice
• 26:56
  Speaker 4: for this. Can you guess what Prudential said that the
• 26:58
  Speaker 4: retiree should do to get more comfortable spending?
• 27:00
  Speaker 2: Take out insurance? Buy an annuity. Okay, got it. Thanks, guys.
• 27:06
  Speaker 2: Wonder what you sell.
• 27:07
  Speaker 4: But I think that there are some strategies that I
• 27:10
  Speaker 4: have employed with folks. who are wealthy enough to spend
• 27:15
  Speaker 4: more money but are not good at it because they
• 27:18
  Speaker 4: are psychologically in their heads about spending money. And so,
• 27:21
  Speaker 4: for instance, this seems kind of silly, but for the
• 27:24
  Speaker 4: person who, there's a number of reasons you might want
• 27:27
  Speaker 4: to spend your savings money before your IRA money. That's
• 27:31
  Speaker 4: oftentimes the advice of some financial people. And so the
• 27:36
  Speaker 4: problem becomes like, I just cannot psychologically touch my savings account.
• 27:40
  Speaker 2: I can't get over it.
• 27:41
  Speaker 4: And so what I've done for folks in the past
• 27:42
  Speaker 4: is say, okay, well, let's put that bucket here and
• 27:46
  Speaker 4: then just send yourself that money on a monthly basis
• 27:49
  Speaker 4: into your checking account. Because psychologically, there's something different about
• 27:53
  Speaker 4: it having this other bucket that you view differently and
• 27:56
  Speaker 4: creating that income stream. And so I think there are
• 28:00
  Speaker 4: a lot of people who, for a number of reasons,
• 28:03
  Speaker 4: don't feel comfortable spending money. And like I said, I
• 28:05
  Speaker 4: think that can be a really good thing. because a
• 28:09
  Speaker 4: lot of people might find themselves in financial difficulty down
• 28:12
  Speaker 4: the road. But the first step to any of this
• 28:15
  Speaker 4: is understanding what your financial plan actually can afford in
• 28:19
  Speaker 4: terms of the spending. Because I can see why buying
• 28:21
  Speaker 4: a beach house would be terrifying to 88% of Americans,
• 28:25
  Speaker 4: but maybe it should only be terrifying to 79% of Americans,
• 28:29
  Speaker 4: and you fall into that other demo. If you don't
• 28:31
  Speaker 4: do the work to understand it and have an advisor
• 28:34
  Speaker 4: who you can bounce these questions off of, then how
• 28:36
  Speaker 4: would you.
• 28:37
  Speaker 2: Know whether or not you can?
• 28:38
  Speaker 4: If you want to answer those questions, if you want
• 28:41
  Speaker 4: to have an expert that can work with you to say,
• 28:44
  Speaker 4: this is what's reasonable and affordable, this is what's not,
• 28:46
  Speaker 4: this is the type of lifestyle you can afford if
• 28:48
  Speaker 4: you retire at 62 versus 65, there are all these
• 28:54
  Speaker 4: different choices and trade-offs to make. Give us a call
• 28:57
  Speaker 4: at Armstrong Advisory Group so we can help you navigate
• 28:59
  Speaker 4: those choices. The number is 800-393-4001. You can book a
• 29:02
  Speaker 4: time for us to call you at armstrongadvisory.com. But that number,
• 29:09
  Speaker 4: once again, 800-393-4001.
• 29:10
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 29:15
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 29:17
  Speaker 1: Armstrong guide is specific financial, legal, or tax advice. Consult
• 29:20
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 29:23
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 29:26
  Speaker 1: advisory services.
• 29:27
  Speaker 2: Let's take a quick break. When we come back, we're
• 29:31
  Speaker 2: going to talk about Corweave, and then we're going to
• 29:34
  Speaker 2: ask the question, does math matter? Next.
• 29:39
  Speaker 1: Markets. money, business. The Financial Exchange brings it together every
• 29:44
  Speaker 1: day on YouTube. Watch live, join the live chat, or
• 29:47
  Speaker 1: catch up with video highlights and shorts at youtube.com slash
• 29:51
  Speaker 1: the Financial Exchange. This is the Financial Exchange Media Network.
• 29:56
  Speaker 1: Your daily dose of the Financial Exchange is on Instagram.
• 29:59
  Speaker 1: Follow us for show highlights, video clips, and quick takes
• 30:03
  Speaker 1: on the day's big business stories. This is the Financial
• 30:06
  Speaker 1: Exchange Media Network.
• 30:10
  Speaker 3: The 2026 DAV 5K Boston is sold out and the
• 30:15
  Speaker 3: race is set for Saturday, November 7th at Fort Independence
• 30:19
  Speaker 3: on Castle Island. But even if you can't participate, you
• 30:22
  Speaker 3: can still help our great American heroes by making a donation.
• 30:25
  Speaker 3: Your gift's Help fund free rides to medical appointments for veterans.
• 30:29
  Speaker 3: And the nation's first DAV-led housing initiative providing homes for
• 30:33
  Speaker 3: single veterans and veteran families. Go to DAV5K. Boston and make
• 30:38
  Speaker 3: your donation today. That's DAV5K. Boston.
• 30:44
  Speaker 2: Mike, so CoreWeave is having a week. Oh, yeah. You know,
• 30:48
  Speaker 2: like occasionally you just have one of those. So on
• 30:50
  Speaker 2: Friday of last week, CoreWeave stock closed.
• 30:53
  Speaker 3: At $ 82.
• 30:53
  Speaker 2: 08 per share. It opened on Monday at 80.33, so
• 31:00
  Speaker 2: down just a touch. By the close of Wednesday, it
• 31:05
  Speaker 2: was down to 65.78, so down about 20% in the
• 31:08
  Speaker 2: first three days of this week. And then yesterday, went
• 31:13
  Speaker 2: down another 10% before it ended up rallying 20% off
• 31:16
  Speaker 2: those lows almost, about 18% off the lows and closing up. Today,
• 31:22
  Speaker 2: it's back down 7.5%. And again, volatility in either direction
• 31:30
  Speaker 2: is never a good sign that investors have a handle
• 31:33
  Speaker 2: on what this thing is worth. And that's kind of
• 31:35
  Speaker 2: what we're seeing now is no one really knows what
• 31:38
  Speaker 2: to do with it at the moment.
• 31:40
  Speaker 4: I'll also mention that volatility is the name of the
• 31:42
  Speaker 4: game for this stock. I mean, it's had, I think,
• 31:44
  Speaker 4: four or five separate instances this year of the stock
• 31:48
  Speaker 4: falling either below... $ 70 a share or spiking over $ 100
• 31:54
  Speaker 4: a share. That's not necessarily normal for a mature company,
• 32:01
  Speaker 4: which this is not. We do have to back up, Chuck.
• 32:04
  Speaker 4: Nobody knows what CoreWeave is that doesn't look at.
• 32:07
  Speaker 2: This stuff frequently. They weave cores. They are a.
• 32:10
  Speaker 4: Neocloud company, which also doesn't tell you anything. They own
• 32:13
  Speaker 4: and operate data centers. they buy a bunch of the, uh,
• 32:18
  Speaker 4: chips needed to operate them. And then they basically lease
• 32:20
  Speaker 4: that out to whoever, uh, wants to be able.
• 32:24
  Speaker 2: To run complex models on their systems.
• 32:27
  Speaker 4: Uh, so they, they are, you know, right in the
• 32:30
  Speaker 4: AI business in a way that meta Oracle alphabet, Amazon
• 32:36
  Speaker 4: and Microsoft all want to be as well and already
• 32:38
  Speaker 4: are as well.
• 32:39
  Speaker 2: And they're competing with those folks.
• 32:41
  Speaker 4: Um, But they don't have any of the other revenue
• 32:44
  Speaker 4: streams to support themselves. Their only real business is renting
• 32:48
  Speaker 4: out these data centers.
• 32:49
  Speaker 2: This is actually kind of wild. CoreWeave this year, from
• 32:53
  Speaker 2: my count, has had 12 different 10% drawdowns, which is
• 32:58
  Speaker 2: more than one a month on average. That's a lot.
• 33:01
  Speaker 2: So it's, again, just highly volatile. And look, the question
• 33:06
  Speaker 2: that is being asked of CoreWeave is going to be
• 33:08
  Speaker 2: the same one that gets asked of a lot of
• 33:10
  Speaker 2: these AI companies, just that CoreWeave is, A, it's publicly
• 33:14
  Speaker 2: traded right now, like a lot of them aren't, like
• 33:16
  Speaker 2: the pure play ones. B, it's right in the center
• 33:20
  Speaker 2: of the ecosystem in terms of, as you mentioned, developing
• 33:23
  Speaker 2: data centers. And C, the math is what people are
• 33:27
  Speaker 2: having to figure out now, which is, okay, Your free
• 33:31
  Speaker 2: cash flow is negative $ 13 billion this year. That is
• 33:36
  Speaker 2: basically twice as bad as it was last year. Not twice,
• 33:39
  Speaker 2: but like 1.6 times as bad as last year. Your
• 33:42
  Speaker 2: net income is negative $ 2 billion. That's twice as bad
• 33:45
  Speaker 2: as last year. If this is really going to scale,
• 33:48
  Speaker 2: you're going to have to prove it at some point
• 33:50
  Speaker 2: because now you've got $ 50 billion in debt that is
• 33:53
  Speaker 2: 8% to 10%, call it 9%. So you've got $ 4. 5
• 33:55
  Speaker 2: billion in interest expense. Your revenue is $ 7. 5 billion.
• 34:02
  Speaker 4: And by the way, if you want to borrow any more,
• 34:04
  Speaker 4: it's not going to be at 8% to 10% right now.
• 34:06
  Speaker 4: It's going to be at 15% to 20%.
• 34:08
  Speaker 2: Correct. And so the question here is, look, prove to
• 34:12
  Speaker 2: us that you can actually turn into a viable business
• 34:16
  Speaker 2: because right now your revenue in the past year has
• 34:20
  Speaker 2: gone from $ 3. 5 billion to $ 7. 5 billion, and all it's
• 34:22
  Speaker 2: done is result in twice as many losses.
• 34:28
  Speaker 4: Kind of not what you want to see if you're
• 34:30
  Speaker 4: going to develop into a productive business at some point.
• 34:33
  Speaker 2: 2027, again, I'm telling you, I don't know which way
• 34:36
  Speaker 2: this is going to turn out. 2027 is the shakeout
• 34:40
  Speaker 2: year for the AI CapEx. It's going to either be, yep,
• 34:44
  Speaker 2: this can work and here's why, here are the unit
• 34:46
  Speaker 2: economics that are actually continuing to scale. Or it's going
• 34:50
  Speaker 2: to be, hey, there's, you know, basically what it'll boil
• 34:54
  Speaker 2: down to is there's not enough demand for this at
• 34:56
  Speaker 2: the prices we need to charge. And as such, there's
• 35:00
  Speaker 2: going to have to be companies that go under because
• 35:02
  Speaker 2: of this.
• 35:03
  Speaker 4: Right.
• 35:04
  Speaker 2: I don't know which one we're going to get.
• 35:05
  Speaker 3: Yeah.
• 35:05
  Speaker 2: But next year is when this... Next year is when
• 35:09
  Speaker 2: the math has to start mathing. Speaking of math, as
• 35:13
  Speaker 2: a lifetime... I would grade myself as, like, a B-minus
• 35:20
  Speaker 2: math person overall. Okay. Because, like, again, I know a
• 35:24
  Speaker 2: couple math PhDs and.
• 35:27
  Speaker 2: They're really smart, man. I went into college thinking I
• 35:30
  Speaker 2: was going to be a math major, and my freshman
• 35:35
  Speaker 2: fall disabused me of that notion in no short order.
• 35:40
  Speaker 2: The good news is that you can fail upward into
• 35:42
  Speaker 2: being an economics major, which I then also decided I
• 35:45
  Speaker 2: didn't want to do, and then said, let's actually fail
• 35:49
  Speaker 2: downwards into being a history major, and so that's the
• 35:52
  Speaker 2: path that I eventually chose, the one that didn't have
• 35:55
  Speaker 2: any math associated with it, but You've got all of
• 35:58
  Speaker 2: these AI platforms now that are taking on these unsolvable
• 36:05
  Speaker 2: math problems and solving them. OpenAI published, I think it
• 36:09
  Speaker 2: was a repository of, like, 770 of them last week,
• 36:14
  Speaker 2: I think it was. Yeah. And I texted one of
• 36:17
  Speaker 2: my math PhD friends about it. I'm like, hey, man, like,
• 36:20
  Speaker 2: what's going on? And, like, no joke, he responds.
• 36:24
  Speaker 1: Not much, you.
• 36:24
  Speaker 2: He's like... Not really sure my life has any meaning anymore.
• 36:28
  Speaker 1: Yeah.
• 36:29
  Speaker 4: I mean, so the types of math problems that we're
• 36:31
  Speaker 4: talking about here are, everyone likes to talk about the
• 36:34
  Speaker 4: goodwill hunting problem, which is not, you.
• 36:35
  Speaker 2: Know, realistically what's happening.
• 36:37
  Speaker 4: But these are the types of things that we are
• 36:39
  Speaker 4: talking about here. These age-old math problems that have existed
• 36:42
  Speaker 4: for centuries that you can either try and prove or disprove.
• 36:46
  Speaker 4: And this is, I don't know, from the sounds of it,
• 36:50
  Speaker 4: what mathematicians at the PhD level get passionate about. Pardon
• 36:55
  Speaker 4: for that little squeak, but they were very passionate about it.
• 36:59
  Speaker 2: Some of that came out when you were delivering.
• 37:01
  Speaker 4: From what I understand, these AI systems, while not.
• 37:07
  Speaker 2: Always creating the.
• 37:11
  Speaker 4: Beautiful solutions that a PhD mathematician is looking for, are
• 37:15
  Speaker 4: solving these math problems and leaving a lot of mathematicians pondering.
• 37:21
  Speaker 2: What am I doing here? The other part that is
• 37:23
  Speaker 2: apparently quite problematic is two things, actually. Number one, typically
• 37:29
  Speaker 2: in order to get a grant to work on something,
• 37:33
  Speaker 2: you have to say, okay, here's what I'm trying to
• 37:34
  Speaker 2: work on. And by virtue of doing that, you're then
• 37:37
  Speaker 2: telling AI, here's what you need to beat me to
• 37:41
  Speaker 2: in order to do this.
• 37:42
  Speaker 1: Mm-hmm.
• 37:43
  Speaker 2: Whereas ordinary humans can only work so fast. Which then
• 37:46
  Speaker 2: leads to the other piece, which is, okay, math has
• 37:49
  Speaker 2: always been kind of this collaborative thing where, okay, I
• 37:52
  Speaker 2: can't figure this out, but I know someone who works
• 37:54
  Speaker 2: on this, and maybe I'll get together with them and
• 37:56
  Speaker 2: we'll put our heads together and do this. This ruins that.
• 37:58
  Speaker 2: And apparently everyone is just withdrawing because they don't want
• 38:00
  Speaker 2: to share any ideas because they're afraid of getting scooped
• 38:03
  Speaker 2: by AI.
• 38:04
  Speaker 4: America's economy looks strong, so why is Wall Street worrying
• 38:08
  Speaker 4: about renters and younger borrowers?
• 38:10
  Speaker 2: Just me squeaking again? I added another squeak. That's good.
• 38:13
  Speaker 2: That's good. We've got Squeaky Mike here on the mic,
• 38:18
  Speaker 2: if you will. Let's take a quick break. We've got
• 38:20
  Speaker 2: hours coming up in just a little bit.