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What can reverse the job market slowdown in 2026? · The Financial Exchange Show

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Speaker 2: that has been taking place over the last couple of weeks,
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Speaker 2: up eighty two dollars an ounce to forty four sixty
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Speaker 2: nine and ninety cents. That is another new all time
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Speaker 2: high today, first all time high that we've had on
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Speaker 2: gold in about a month and a half, maybe two months.
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Speaker 2: And we've also got crude oil up a dollar fifteen
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Speaker 2: a barrel about two percent to fifty seven sixty seven
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Speaker 2: on West Texts Intermediate triple A National Averagur gas prices
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Speaker 2: sliding three tenths of ascent to two eighty five and
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Speaker 2: five tenths at the moment. Piece in the Wall Street
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Speaker 2: Journal the year the job market hit a Wall. I
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Speaker 2: got a problem with the headline before we even get
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Speaker 2: to the piece. Job market didn't hit a wall. When
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Speaker 2: I hear hitting a wall, I hear okay, like there
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Speaker 2: was a real problem, and like you saw it in
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Speaker 2: the job statistics. We've been seeing just a gradual cooling
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Speaker 2: in the job market since twenty twenty second half of
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Speaker 2: twenty two, so about three and a half years.
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Speaker 3: Yeah, wall would imply suddenness.
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Speaker 2: Something right, like you hit a wall and like things
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Speaker 2: suddenly got worse. This is has been a steady linear
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Speaker 2: degradation in the job market for three and a half years.
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Speaker 2: That now has gotten us to the point where we
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Speaker 2: have had some negative monthly job prints, but they didn't
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Speaker 2: come out of nowhere because we've been on this path
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Speaker 2: and we just have not moved from that path in
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Speaker 2: the last three and a half years.
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Speaker 3: Fair wrong analogy.
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Speaker 4: Job creation has been weak though in twenty twenty five
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Speaker 4: and yours been more of a steady decline. I don't
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Speaker 4: know what to expect for twenty twenty six other than
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Speaker 4: it's really tough to see these trends reversing, right, I mean,
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Speaker 4: if you take a look at the last I don't
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Speaker 4: have the stat right on me, but the average job
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Speaker 4: creation pace for the last three years, and it has
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Speaker 4: declined pretty much linearly. And so why would you see that,
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Speaker 4: you speak, why would you see that reverse? I really
3:51
Speaker 4: have a tough time envisioning it in the absence of
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Speaker 4: a big, substantial turnaround in and I think, I guess
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Speaker 4: some fantastic thing related to AI or government policy, and
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Speaker 4: I don't think government policy changes unless.
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Speaker 3: You do hit that wall.
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Speaker 4: Where again, if the if the employment picture hits a wall,
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Speaker 4: what that means is that the pace of layoffs and
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Speaker 4: the unemployment rate increases in the course of a year substantially.
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Speaker 4: We're talking, you know, three quarters of a percentage point.
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Speaker 4: That to me is the economy and the labor market
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Speaker 4: hitting a wall. And we're just we're not there. I mean, yes,
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Speaker 4: we saw an increase in the unemployment rate, but it's
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Speaker 4: been you know, a little bit more than half percent,
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Speaker 4: and it took most of the year to get there.
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Speaker 2: This year, on average, we have seen fifty five thousand
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Speaker 2: and four hundred and fifty jobs added on a monthly basis.
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Speaker 3: Okay, that's cord to the BLS data that we have.
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Speaker 2: If we go and take a look last year, last
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Speaker 2: year we saw one hundred and sixty seven thousand jobs
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Speaker 2: added on a monthly basis. If we go and look
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Speaker 2: at twenty twenty three, we saw two hundred and nineteen
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Speaker 2: thousand jobs added on a monthly basis. If we go
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Speaker 2: and look at twenty twenty two, we had three hundred
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Speaker 2: and seventy seven thousand jobs added on a monthly state line.
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Speaker 2: It's just been a consistent move down over that period.
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Speaker 2: And the question that you have to ask about labor
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Speaker 2: remember like historically and this is all we have to
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Speaker 2: go on because none of us have been to the future. Man,
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Speaker 2: we haven't say it that way. I know, we just
5:31
Speaker 2: haven't been there. Historically, consumption leads employment. If you look
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Speaker 2: at the labor market through that lens, what is going
5:47
Speaker 2: to improve consumption next year in the United States?
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Speaker 3: Tax refunds. That's that's one option YEP. Number two.
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Speaker 2: Other big beautiful bill provisions for improving corporate consumption capex yep,
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Speaker 2: you know, is there gonna be more of that? Those
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Speaker 2: are you two potential mechanisms for improvement on that side.
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Speaker 2: When you look at the ways that consumption could worsen again,
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Speaker 2: you get a couple of them. Number one is further
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Speaker 2: weakening in the labor market in housing particular, like housing
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Speaker 2: housing weakness leading to layoffs in construction and in fewer
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Speaker 2: hours in construction, less consumption. The other one, and this
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Speaker 2: is look, this is backwards admittedly because this isn't normally how.
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Speaker 3: It works well the fact reversal.
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Speaker 2: No, I wasn't gonna go there. I was going with,
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Speaker 2: does the labor market's weakening in and of itself lead
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Speaker 2: to less consumption? Combination of people saying, hey, I'm less
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Speaker 2: stable in my job, I'm not going to buy as much.
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Speaker 3: I don't buy that because we never see that.
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Speaker 4: The more likely one is something in something in equity
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Speaker 4: markets getting a and that piece leading to lower consumption.
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Speaker 2: I was going to go just towards Look, even in
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Speaker 2: the labor market, aggregate payroll growth slowing, that allows for
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Speaker 2: fewer dollars to be spent. That then, you know, kind
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Speaker 2: of triggers a cycle we've never seen it before. But Michael,
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Speaker 2: if you had a tape of all of the times
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Speaker 2: I've said in the last six years, we've never seen
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Speaker 2: this before.
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Speaker 3: Yeah, and it happened. We could fill an entire show.
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Speaker 2: Yeah, which would be fun, not for listeners but for us.
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Speaker 4: There have been a lot of firsts over the course
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Speaker 4: of the last five years, and so far be it
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Speaker 4: from me to doubt anything, but I mean to me,
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Speaker 4: we've talked a lot about the concentration of spending amongst
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Speaker 4: the wealthy, and so if you get a reversal of
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Speaker 4: that wealth effect, either from real estate depreciating seems unlikely
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Speaker 4: to me or equity markets devaluing, I think that those
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Speaker 4: could be enough to send us into that other direction.
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Speaker 4: But again the reverse is also equity markets hold up
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Speaker 4: and big tax refunds come.
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Speaker 3: Yeah, I could keep correct.
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Speaker 2: These are kind of what you're looking for next year.
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Speaker 2: So we don't know how they're going to play out,
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Speaker 2: but it's pretty much housing in labor weakness on one side,
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Speaker 2: you've got tax refunds and further capex expansion on the other,
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Speaker 2: and then you've got ais this wild card that could
8:27
Speaker 2: go either way.
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Speaker 3: Wild card wheat. I gotta be honest.
8:33
Speaker 2: I was playing games with my kids over the weekend
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Speaker 2: and one one of them involved wild cards, and I
8:38
Speaker 2: kept doing.
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Speaker 3: That and they were like, Daddy, why do you stop?
8:41
Speaker 3: Why do you keep saying it like that. I'm like, because, Charlie,
8:43
Speaker 3: day you'll you'll understand. One day you will.
8:47
Speaker 2: Let's take a quick break. When we come back. We're
8:49
Speaker 2: joined by Martha Gimble. She's the executive director and co
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Speaker 2: founder of the Budget Lab at Yale, and she's gonna
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Speaker 2: give us a little more information on what's going on
8:57
Speaker 2: with the labor market.
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Speaker 2: I'm still working on getting Martha Gimble on the line
10:04
Speaker 2: and hopefully have her shortly, but in the meantime piece
10:07
Speaker 2: from Bloomberg Opinion, Wall Street is bullish on twenty twenty six.
10:10
Speaker 2: Assume it's wrong, we just how about we just ignore
10:15
Speaker 2: it or it's not useful.
10:19
Speaker 4: Or just assume that Wall Street is an inanimate object
10:22
Speaker 4: without feelings would also be helpful. Like I recognize that
10:25
Speaker 4: Wall Street is comprised of different individuals and market participants
10:28
Speaker 4: that do have sentiment and humans raised by humans, But
10:33
Speaker 4: you know Wall Street itself is not and does not
10:37
Speaker 4: It's an inanimate.
10:40
Speaker 3: Either way, like year.
10:41
Speaker 2: In price targets are not functionally useful. If I don't
10:47
Speaker 2: think you should assume it's wrong. Who's useful to we
10:51
Speaker 2: went through this last week. If you are a short
10:54
Speaker 2: term trader, year in price targets don't matter to you, right.
10:58
Speaker 2: If you are a long term investor, you're in price
11:01
Speaker 2: targets don't matter to you, right, So I just don't
11:04
Speaker 2: know who's useful.
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Speaker 3: Agreed. We're joined now by Martha Gimble.
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Speaker 4: She's the executive director and co founder of the Budget
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Speaker 4: Lab at Yale and joins us now to talk about
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Speaker 4: what we've seen recently in the labor market and perhaps
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Speaker 4: what to expect come twenty twenty six.
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Speaker 3: Martha, thanks for joining us, appreciated.
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Speaker 4: Thank you so much for having me so during our
11:21
Speaker 4: last segment we were actually talking a bit about this,
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Speaker 4: and I think the one thing we can definitively say
11:25
Speaker 4: about the labor market is that the pace of hiring
11:29
Speaker 4: has very much slowed over the course of the last
11:32
Speaker 4: three years. But it's not as though it's hit some
11:34
Speaker 4: sort of wall in, at least in my opinion, It's
11:37
Speaker 4: just been a steady slowdown in the pace of hiring.
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Speaker 4: And the question that I guess that raises for me
11:43
Speaker 4: is what could possibly reverse.
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Speaker 3: That slowdown now that we've seen it kick off.
11:48
Speaker 6: I mean, this is sort of an unhelpful answer, which
11:51
Speaker 6: is who knows? You know, presumably, if you know, the
11:56
Speaker 6: inflation situation becomes steady enough that the federal oversor feels
12:01
Speaker 6: like they can safely really cut rates, that might help.
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Speaker 6: But one of the things that we've seen also is
12:07
Speaker 6: that we are just at it still, even given the
12:10
Speaker 6: rise a relatively low unemployment rate. And it may also
12:14
Speaker 6: just be that there aren't that many people around to
12:17
Speaker 6: hire Martha.
12:18
Speaker 3: Is the pal rule still relevant?
12:21
Speaker 4: I mean, I mean it broke down last year, the
12:24
Speaker 4: PSALM rule did not successfully predict a concurrent recession. In
12:29
Speaker 4: twenty twenty four, we are on the verge of crossing
12:33
Speaker 4: that threshold, perhaps again with the most recent read on unemployment.
12:37
Speaker 4: Is it still a useful indicator for us to be
12:39
Speaker 4: discussing come twenty twenty six?
12:41
Speaker 6: I mean, I still like to look at the SOAM role.
12:44
Speaker 6: I mean, another way to think about the SAM role
12:47
Speaker 6: is like should we be worried about the labor market?
12:50
Speaker 6: If you think about why Claudia first developed it, it
12:52
Speaker 6: was really about turning on automatic stabilizers like unemployment insurance
12:57
Speaker 6: and things like that. It wasn't so much meant to
12:59
Speaker 6: be like this is definitively a recession or not a recession.
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Speaker 6: And so if you think of it as a measure
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Speaker 6: of should we be worried about the labor market? It
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Speaker 6: was certainly the case that last year we should have
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Speaker 6: started to be worried about the labor market. And I
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Speaker 6: will say, you know, I find it totally plausible that
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Speaker 6: the some roll is about to trigger, and I am
13:17
Speaker 6: currently worried about the labor market. So that doesn't mean
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Speaker 6: we're going into a recession. That doesn't mean all hands
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Speaker 6: on deck. But should you be itchy a little bit?
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Speaker 3: Yeah?
13:29
Speaker 4: The government shutdown clearly certainly affected the timing of when
13:33
Speaker 4: we saw certain statistics on both the labor market and inflation.
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Speaker 4: In the case of the inflation report from last week,
13:38
Speaker 4: led to a lot of questions about I guess perhaps
13:41
Speaker 4: the accuracy of the data itself and the calculation methods.
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Speaker 4: Do you have any of those types of concerns regarding
13:49
Speaker 4: the shutdown effects on our reads on the labor market
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Speaker 4: right now, because we've got an incomplete report for October
13:55
Speaker 4: and then a November report that well showed some cons
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Speaker 4: earning signs on the unemployment rate at least.
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Speaker 6: Yeah, you know, I am concerned that the shutdown is
14:06
Speaker 6: still affecting the jobs report. You know, not just from
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Speaker 6: a timing perspective, they had to start gathering data a
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Speaker 6: little bit late, but also you still had people kind
14:16
Speaker 6: of coming back from the shutdown. So just as an example,
14:19
Speaker 6: the share of workers who were working part time for
14:22
Speaker 6: economic reasons really jumped, and it jumped in a way
14:27
Speaker 6: that if it had been a totally clean read, I
14:29
Speaker 6: would have been really stressed out about. But that's a
14:32
Speaker 6: number that in the past has tended to jump during shutdowns,
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Speaker 6: and so I find it very plausible that part of
14:39
Speaker 6: what we're seeing there is the continued effect of the shutdown,
14:42
Speaker 6: and the data not to be clear, if we get
14:44
Speaker 6: a clean read in December and that number, you know,
14:46
Speaker 6: that number doesn't reverse, then I'm going to start being
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Speaker 6: really itchy. But you know, frankly, for both the inflation
14:53
Speaker 6: report and the jobs report, it's still so affected by
14:58
Speaker 6: the shutdown, I'm not sure how much signal we can
15:00
Speaker 6: take from them.
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Speaker 4: Martha, I don't remember the exact statistic that FED Chair
15:05
Speaker 4: Powell cited during the last press conference, but he he
15:08
Speaker 4: throughout the theory that, you know, we're worried that the
15:11
Speaker 4: BLS maybe over counting the pace of job creation, even
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Speaker 4: as weak as that job creation has been this year.
15:17
Speaker 4: Do we have a sense for what the private payroll
15:19
Speaker 4: data might be telling us on that front.
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Speaker 6: So what Chair Powell said that was that he found
15:24
Speaker 6: it plausible that we were overcounting by about sixty thousand jobs.
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Speaker 6: What he's referring to there is the fact that the
15:31
Speaker 6: buer of libor statistics updates its data every year and
15:35
Speaker 6: benchmarks it against you know, data that comes directly administrative
15:40
Speaker 6: data as opposed to survey data, and people are expecting
15:43
Speaker 6: there to be revisions down. So I just I don't
15:45
Speaker 6: want people to think that there's something wrong with what
15:47
Speaker 6: BLS is doing. This is like a very standard procedure
15:50
Speaker 6: that's going on here. You know, the private sector data,
15:54
Speaker 6: the most reliable ones have been consistent with BLS data,
15:57
Speaker 6: which is slowing down, still adding jobs, but relatively few.
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Speaker 6: I think the real question for a lot of US
16:05
Speaker 6: right now is it is hard to figure out how
16:08
Speaker 6: many jobs the US really needs to be adding right
16:11
Speaker 6: now because we've had such big changes in immigration policy,
16:15
Speaker 6: And when you have big changes in immigration policy in
16:17
Speaker 6: either direction, it changes how many jobs you need to
16:21
Speaker 6: add to keep up with population. So I've seen some
16:24
Speaker 6: estimates from some economists that if we were adding zero
16:27
Speaker 6: jobs every month, that would actually be enough to keep
16:30
Speaker 6: up with the population growth. Now, I think that's low,
16:34
Speaker 6: right because we've still seen an uptick in the unemployment
16:37
Speaker 6: rate this year. But that's just to say, you know,
16:39
Speaker 6: if we get to a point where we're adding fifteen
16:42
Speaker 6: twenty thousand jobs a month, that's not necessarily a worrying
16:47
Speaker 6: sign for the labor market. We're still kind of trying
16:51
Speaker 6: to figure out what the right number is for us
16:53
Speaker 6: right now.
16:55
Speaker 3: Martha, the last question here.
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Speaker 4: You know, we've got these changing forces' got seeming a
17:01
Speaker 4: slowing economy, you've got the immigration changes, and then of
17:05
Speaker 4: course you have the technological boogeyman in AI. What work
17:09
Speaker 4: is the al Budget Lab doing to study the effects
17:11
Speaker 4: of AI and labor market? And how can we i
17:15
Speaker 4: guess track or estimate the impact it's starting to have.
17:19
Speaker 6: Yeah, so we've put together a tracker looking at whether
17:22
Speaker 6: or not jobs that are more exposed to AI, or
17:25
Speaker 6: have more usage of AI, or just whether the mix
17:28
Speaker 6: of jobs are changing relatively quickly. We're currently not seeing
17:33
Speaker 6: any sign that AI is at this moment materially impacting
17:38
Speaker 6: the labor market. That may sound surprising to people given
17:42
Speaker 6: how much stirm andtong there is out there about AI.
17:45
Speaker 6: You have to remember it's still really early days for
17:48
Speaker 6: this technology. It's barely been three years since chat GIBT
17:52
Speaker 6: was released. What AI can do today as opposed to
17:55
Speaker 6: what it can even do six months ago is a
17:58
Speaker 6: huge jump.
18:00
Speaker 7: You know.
18:00
Speaker 6: For listeners, just think of your company and how long
18:03
Speaker 6: it takes for your company to figure out new technology
18:05
Speaker 6: and to adjust. These are not instantaneous adaptations, and so
18:11
Speaker 6: it's just going to take time for companies to figure
18:13
Speaker 6: out what to do with it.
18:14
Speaker 4: Martha, thanks so much for joining us. We've got to
18:16
Speaker 4: run happy holidays. Thanks for joining us this week. That's
18:18
Speaker 4: Martha Gimble. She's the executive director and co founder of
18:21
Speaker 4: the Budget Lab at Yale.
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Speaker 5: that was up two hundred and fifty six points or
20:14
Speaker 5: over half a percent higher. SMP five hundred is up
20:17
Speaker 5: nearly six tenths of a percent, or thirty nine points higher.
20:20
Speaker 5: NASDAC up over half a percent as well or one
20:22
Speaker 5: hundred and thirty points. Rustly two thousands up one and
20:25
Speaker 5: a half percent, Tenure Treasure reeled up one basis point
20:28
Speaker 5: at four point one sixty three percent, and crude oil
20:32
Speaker 5: up two percent higher, trading a fifty six dollars and
20:35
Speaker 5: sixty six cents a barrel. Breaking news from Alphabet this
20:38
Speaker 5: hour after the Google parent agreed to buy clean energy
20:41
Speaker 5: developer Intersick Power for four points seventy five billion dollars
20:45
Speaker 5: in cash. The deal would give Alphabet access to more
20:49
Speaker 5: power generation for its data centers. Alphabet shares are up
20:53
Speaker 5: about half a percent. Meanwhile, we have another development in
20:56
Speaker 5: an ongoing story in the bidding more for Warner Brothers
20:58
Speaker 5: Discovery Paramount. It is now amended its offer for Warner Brothers,
21:03
Speaker 5: where Larry Errol Ellison agreed to personally guarantee forty point
21:06
Speaker 5: four billion dollars of equity financing for the deal. Paramount
21:10
Speaker 5: shares are.
21:11
Speaker 3: Up six percent.
21:13
Speaker 5: Elsewhere, workplace products maker Sentas has submitted another offer to
21:18
Speaker 5: acquire smaller uniform supplier Universe, after nearly four years of
21:22
Speaker 5: failing to complete a deal. This time, Sentas is bidding
21:25
Speaker 5: five point two billion dollars centas is up two percent,
21:29
Speaker 5: while Uniforse shares are rallying eighteen percent, and China's Baidu
21:34
Speaker 5: is teaming up with ride handling companies Uber and Lyft
21:37
Speaker 5: to begin trials of self driving vehicles in the UK.
21:40
Speaker 5: Shares in both Uber and Lyft are up about three percent.
21:46
Speaker 5: I'm Tucker Silva in that is Wall Street.
21:48
Speaker 7: Watch you gave your family around and tell them all
21:51
Speaker 7: the ways they have disappointed.
21:53
Speaker 6: You over the Masnada was born a Festives for arrest us.
21:58
Speaker 7: Oh yes, Now with time to air on economic grievances
22:03
Speaker 7: over the year, I got a lot.
22:05
Speaker 3: Of problems when.
22:13
Speaker 2: All right, so and gets me every time. Festivals is
22:17
Speaker 2: so good it is. Festivus officially begins tomorrow. I guess
22:21
Speaker 2: tonight at twelve oh one am, yep, and uh, just.
22:25
Speaker 3: To make sure that we were early. We figured we.
22:28
Speaker 2: Would get our economic grievances off our chest because we
22:34
Speaker 2: got a few problems with the economy.
22:37
Speaker 3: Now you're gonna hear about it. Would you like to begin, Michael?
22:40
Speaker 3: I will.
22:41
Speaker 4: This was one of the more entertaining ones, and I'm
22:44
Speaker 4: gonna I think it's appropriate that we kick off with
22:46
Speaker 4: an AI related story.
22:48
Speaker 3: So, Chuck and Tucker, do you remember Builder dot Ai? No?
22:51
Speaker 4: No, no, okay, Well Builder dot Ai had a one
22:54
Speaker 4: point five billion dollar valuation at one point.
22:58
Speaker 3: What were they?
22:58
Speaker 4: They were a new startup AI company that allowed you
23:02
Speaker 4: to build apps using.
23:05
Speaker 3: AI at a pretty good price.
23:07
Speaker 4: They started off at joining twenty sixteen, started to run
23:10
Speaker 4: into some concerning issues beginning this year, though, when their
23:14
Speaker 4: founder was removed as CEO in March, some whistleblowers alleged
23:19
Speaker 4: that some of the sales figures were maybe a little
23:21
Speaker 4: bit off. Oh and then there was at least one
23:24
Speaker 4: tweet alleging that instead of any sort of artificial intelligence systems,
23:28
Speaker 4: the company was actually just employing seven hundred Indian engineers,
23:33
Speaker 4: leading to accusations that AI actually stood for actually Indians.
23:38
Speaker 3: Which is a funny tweet, but.
23:41
Speaker 4: Not a great thing to do to your lenders, shareholders,
23:46
Speaker 4: and others who were betting on your company.
23:49
Speaker 3: So beware of AI companies that don't really have any
23:56
Speaker 3: meat behind them.
23:57
Speaker 2: I said, Anyahi, Yeah, I've got, thank you. I've got
24:02
Speaker 2: From January of this year, DraftKings. They rolled out a
24:06
Speaker 2: twenty dollars a month subscription service designed to give you
24:09
Speaker 2: better odds on parlays. Of course, they're giving you better
24:13
Speaker 2: odds on parlays because you're already paying them in order
24:16
Speaker 2: to get them, So you are losing money right off
24:18
Speaker 2: the bat, before even getting to the point that most
24:21
Speaker 2: of the time, and Tucker correct me if I'm wrong,
24:23
Speaker 2: because I don't know nearly enough about sports gambling because
24:26
Speaker 2: not really my thing. But generally you are much better
24:30
Speaker 2: off doing all the legs of a parlay as separate bets,
24:33
Speaker 2: because then you can at least partially win, as opposed
24:35
Speaker 2: to trying to get that seventeen hundred to one bet
24:37
Speaker 2: to pay off.
24:38
Speaker 3: Yeah. Correct, that is correct.
24:39
Speaker 5: If you do a five leg parlay, you hit on
24:41
Speaker 5: all four and you miss on one, well the entire
24:44
Speaker 5: bet loses.
24:45
Speaker 2: So in any case, DraftKings saying, hey, give us twenty
24:48
Speaker 2: bucks a month and we'll give you better odds, to
24:50
Speaker 2: which I say, that's because you're already giving them the money.
24:55
Speaker 4: I would like to best miracle focus on our good
24:59
Speaker 4: friends at Ford Motor Company. Just recently we covered a
25:02
Speaker 4: piece from The Wall Street Journal about Ford taking a
25:05
Speaker 4: nineteen and a half billion dollar charge to write down
25:08
Speaker 4: their ev investment. Quote from the CEO of Ford instead
25:12
Speaker 4: of plowing billions into the future knowing these large evs
25:16
Speaker 4: will never make money. We're pivoting for Chief executive Jim
25:19
Speaker 4: Farley said an interview. We now know enough about the
25:22
Speaker 4: US market where we have a lot more certainty in
25:25
Speaker 4: this second inning. How is it that you know so
25:28
Speaker 4: much more about this US market than you did just
25:31
Speaker 4: four years ago when you rolled out these plans and
25:33
Speaker 4: spent billions of dollars on developing your whole EV industry
25:39
Speaker 4: under pressure from people that just wanted you to be
25:41
Speaker 4: another Tesla. You were never going to be another Tesla.
25:44
Speaker 4: This was a massive misstep by not only Jim Farley
25:48
Speaker 4: and the folks over at Ford. There are plenty of
25:49
Speaker 4: others who jumped on this bandwagon, but in Ford's case,
25:52
Speaker 4: it was particularly pronounced and just seems like a massive
25:56
Speaker 4: misstep and misinterpretation of what their customers we're interested in.
26:00
Speaker 3: I got a lot of problems with your people.
26:04
Speaker 2: Speaking of another Tesla. The first name of Tesla actually Nicola,
26:09
Speaker 2: filed for bankruptcy this year after pushing a just this year.
26:13
Speaker 2: It was February nineteenth of this year, Yes, nearly five
26:17
Speaker 2: years after pushing a truck down a hill, saying that
26:20
Speaker 2: it was moving on battery power when it wasn't. Nicola
26:25
Speaker 2: filed for bankruptcy on February nineteenth of this year. The
26:28
Speaker 2: company was once valied at thirty billion dollars in public markets,
26:32
Speaker 2: proving that thirty billion dollars doesn't go quite as far.
26:36
Speaker 3: As it used to unless you're gone down hill.
26:41
Speaker 4: For us, I've got something to a bone to pick
26:44
Speaker 4: with Southwest.
26:46
Speaker 3: They've betrayed all of their loyal customers this year.
26:49
Speaker 4: All of them by basically becoming every other airline out there.
26:54
Speaker 4: There have been a bunch of activist investors who have
26:56
Speaker 4: been itching for some changes to occur at Southwest, and
27:00
Speaker 4: so they have done away with their free bags, they
27:02
Speaker 4: have done away with their boarding process. And while it
27:06
Speaker 4: may ultimately be better for the financials of this company,
27:10
Speaker 4: at least in the short term, it does seem to
27:13
Speaker 4: me that all they have done is turned Southwest into
27:16
Speaker 4: another Jet Blue, Delta, American or United. There is now
27:20
Speaker 4: no differentiation among the major airlines, and anyone who has
27:25
Speaker 4: tried to differentiate, such as Spirit or others, has found
27:28
Speaker 4: themselves in bankruptcy.
27:30
Speaker 3: Don't know. I want to talk a little bit about
27:33
Speaker 3: James Howells. Don't know.
27:35
Speaker 2: I know that's because he has a hard drive that
27:39
Speaker 2: has seven hundred million dollars in bitcoin on it that
27:41
Speaker 2: he accidentally threw out that is currently in a well
27:46
Speaker 2: landfill in South Wales, and so he's been attempting to
27:51
Speaker 2: buy the landfill in order to excavate it because he's
27:53
Speaker 2: been digging around by hand and is yet to be
27:55
Speaker 2: able to find it. But the key for his seven
27:59
Speaker 2: hundred million dollar dollars in bitcoin is somewhere in that landfill,
28:03
Speaker 2: if only.
28:04
Speaker 4: How much are you willing to lend this guy? Like,
28:08
Speaker 4: how do you I'm trying to evaluate the risk on
28:10
Speaker 4: this one.
28:11
Speaker 2: So there is most likely a ninety nine point nine
28:15
Speaker 2: percent chance that that hard drive is in the landfill.
28:18
Speaker 2: The only chance that there isn't is that someone else
28:20
Speaker 2: got wind of this and maybe scooped it first. In theory,
28:25
Speaker 2: the only other thing that could be a problem here
28:28
Speaker 2: is if the hard drive is damaged past being able
28:30
Speaker 2: to be read, which I don't know how you would
28:33
Speaker 2: accurately price. So my view would be if I had
28:37
Speaker 2: seven hundred million dollars to lend, I probably would want
28:42
Speaker 2: someone with the ability to pay twenty to thirty percent
28:45
Speaker 2: interest on it, because My assumption would be, you better
28:49
Speaker 2: find that thing in four years. Otherwise I'm getting my
28:50
Speaker 2: money back one way or another. Yeah, yeah, not a
28:53
Speaker 2: whole lot to recovery. Fun otherwise, Here, we're gonna take
28:57
Speaker 2: quick break. Here, quick break, and then we're going to
29:00
Speaker 2: continue our festivest tradition. Next on the Financial Exchange.
29:10
Speaker 1: Here the Financial Exchange every day from eleven to noon
29:13
Speaker 1: Non Serious XM's Business radio Channel one thirty two. Keep
29:17
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29:37
Speaker 7: Long.
29:38
Speaker 1: Face is the Financial Exchange Radio Network.
29:41
Speaker 3: You gavi you family around and tell.
29:43
Speaker 6: Them all the ways they have disappointed you over the
29:46
Speaker 6: best year.
29:47
Speaker 3: I know how today was born a festers for the
29:50
Speaker 3: rest of us.
29:51
Speaker 7: Oh yes, now it's time to air are economic reevances
29:56
Speaker 7: over the year.
29:57
Speaker 3: I got a lot of problems. When you'll pay up.
29:59
Speaker 5: Before we get back to the boys and their grievances,
30:02
Speaker 5: let's just pay off trivia. Real quick question was what
30:05
Speaker 5: film has the highest grossing Christmas Day release of all time?
30:09
Speaker 5: That would be Surelock Holmes Matton, Harwich, Mass is our
30:13
Speaker 5: winner today taking on the Financial Exchange Show t shirt
30:15
Speaker 5: and we play trivia every day here in the Financial
30:18
Speaker 5: Exchange See complete contest rules at Financial Exchange Show dot com.
30:22
Speaker 3: I believe it's my turn for festivals. For it, Michael,
30:25
Speaker 3: I only have eleven more to do.
30:27
Speaker 4: A pharmaceutical company, Ocavea Pharmaceuticals in San Francisco, plans to
30:31
Speaker 4: introduce a new clinical trial for a GLP one weight
30:35
Speaker 4: loss drug for dogs cats.
30:40
Speaker 3: They want your cats to slenda.
30:42
Speaker 4: They're going to inject them with one thousand dollars a
30:44
Speaker 4: month in jection. I don't know what it costs for cats,
30:46
Speaker 4: but that's what it costs for people. Maybe it's a
30:48
Speaker 4: little bit cheaper since it's you don't need the same
30:50
Speaker 4: dosagell dosage. But yeah, this is going to fix all
30:54
Speaker 4: of our fat cat problems.
30:55
Speaker 2: I want to talk about. Yeah, I want to talk
30:58
Speaker 2: about the Do you remember the humane an AI pin? No,
31:02
Speaker 2: you don't remember the humane ai pin.
31:04
Speaker 3: This was, Oh is this the thing you wore that
31:06
Speaker 3: was really bad at its job. Yes, I don't remember
31:08
Speaker 3: the name, but yes.
31:09
Speaker 2: And basically they tried to make it like the next
31:13
Speaker 2: hot thing in January. By February they had to sell
31:15
Speaker 2: the thing off and the buyer was HP because I'm
31:19
Speaker 2: sure they're going to do something great with.
31:21
Speaker 3: It based on their history of acquisitions.
31:24
Speaker 4: There's plenty of AI problems with your people, plenty of
31:28
Speaker 4: AI related grievances. A Groc earlier this year, among many
31:33
Speaker 4: other failures, that it had just a very high hallucination rate.
31:36
Speaker 4: I don't know how much better it's gotten, but at
31:38
Speaker 4: one point really went on a pretty deep anti semitism route.
31:43
Speaker 3: Its just died that users call it Mecha.
31:46
Speaker 4: Hitler hallucinations, which is probably not what you want out
31:53
Speaker 4: of your generative AI system and was a bit of
31:57
Speaker 4: an embarrassment for the folks at Groc, although they don't.
31:59
Speaker 3: Have fast of us.
32:01
Speaker 2: I've got two media related ones here, the first HBO
32:05
Speaker 2: Max getting renamed again because that's right. You know, you
32:10
Speaker 2: might as well just keep changing the name of that
32:12
Speaker 2: thing and maybe you'll finally, you know, find what works.
32:15
Speaker 2: Also media related, Microsoft earlier this year shut down Skype,
32:19
Speaker 2: proving that you can pay tens of billions of dollars
32:22
Speaker 2: for the only video chat platform in existence, and yet
32:25
Speaker 2: still somehow get out flanked by Zoom several years later
32:28
Speaker 2: when everyone in the world needs to use video chat.
32:31
Speaker 4: Good job Microsoft, a festivus for the rest of US.
32:35
Speaker 4: Cracker Barrel attempted to change their logo get out of
32:39
Speaker 4: the Old Man, very poorly. They had to pivot on
32:42
Speaker 4: that one almost immediately fire some people and bring the
32:47
Speaker 4: old Man back and not make really any of the
32:50
Speaker 4: changes that they were planning to do to their decades.
32:55
Speaker 4: How old is that company?
32:56
Speaker 3: Very old? And they tried to pivot their logo and
32:59
Speaker 3: it went very poorly for the It's a festive Us miracle.
33:03
Speaker 3: I've got two more AI related items.
33:05
Speaker 2: The first on October first, Meta announced Vibes, which was
33:08
Speaker 2: gonna be an AI only video feed because I sure
33:12
Speaker 2: know the only thing I want to do with my
33:14
Speaker 2: time is watch the videos you made of Gerbil skiing.
33:17
Speaker 2: That sounds like it's gonna be just a blast when
33:19
Speaker 2: I can do that. And then after that one, I
33:22
Speaker 2: can watch unicorns drinking tomato soup from a well because
33:26
Speaker 2: that just is what I need in my life. So
33:29
Speaker 2: good job, good effort, Meta. And then on October fifteenth,
33:32
Speaker 2: not to be outdone. Just three months after sam Altman
33:35
Speaker 2: said no, we're not going to get into erotica because
33:37
Speaker 2: we don't need to, sam Altman said, yeah, maybe we
33:40
Speaker 2: can have some more you know, adult themes in AI,
33:42
Speaker 2: because I definitely want to be sexting with a robot.
33:47
Speaker 3: I got a lot of problems with your people. I
33:49
Speaker 3: actually I would prefer not to a.
33:59
Speaker 4: I have a very local and personal to this show
34:03
Speaker 4: AI story for us to focus on here.
34:05
Speaker 3: Just last week, we were covering AI negatively.
34:08
Speaker 4: I don't remember the exact context of what we were saying,
34:11
Speaker 4: but a power surge struck the studio and the whole
34:14
Speaker 4: studio is just shut down for about thirty seconds while
34:16
Speaker 4: we were live on air Friday criticizing AI. It was Friday, Yeah,
34:20
Speaker 4: time is moving here. The only other thing we noticed
34:24
Speaker 4: was that the Christmas tree lights in our in our
34:26
Speaker 4: lobby went out at the same time. But I don't know.
34:29
Speaker 4: All signs seemed to point to assentient AI listening to
34:33
Speaker 4: what we are saying on Blive air and shutting us down.
34:36
Speaker 3: I'm still that Yeah, yeah, bizarre. It's only the great
34:41
Speaker 3: job Gemen. I love your work. Let's see.
34:44
Speaker 2: Last week, also, prosecutors charged Tricolor founder and CEO Daniel
34:50
Speaker 2: Chew and chief operating officer Daniel good Game Daniel good
34:55
Speaker 2: Game Daniel good Game with a series of nudulent schemes
35:00
Speaker 2: that led Tricolor to obtain billions of dollars from lenards
35:03
Speaker 2: and investors by misrepresenting the value of its loan collateral.
35:07
Speaker 2: Apparently they were pledging the same vehicles in multiple tranches
35:13
Speaker 2: of loans, which last time I checked, is illegal, and
35:17
Speaker 2: so they've been charged as such in one of the uh,
35:23
Speaker 2: just kind of wildest credit stories that we've seen in
35:27
Speaker 2: a while.
35:29
Speaker 4: For the rest of us, I don't really consider this
35:31
Speaker 4: much of a grievance personally, but I didn't feel like
35:34
Speaker 4: we could recap twenty twenty five without bringing up the
35:36
Speaker 4: astronomer kiss cam at.
35:38
Speaker 3: The Coldplay concert.
35:41
Speaker 4: I'm sure that the families of those do not find
35:44
Speaker 4: this as funny as I do, But yeah, you cannot
35:48
Speaker 4: have a festivus without the company astronomer and a couple
35:52
Speaker 4: of their executives who are both married to people that
35:56
Speaker 4: are not each other getting caught on the Cold Place
35:59
Speaker 4: kiss cam Jillette Stadium.
36:02
Speaker 3: I've got one more.
36:05
Speaker 2: I've got one more here, This from March twenty first,
36:09
Speaker 2: in a sign of just how bad the economy is
36:11
Speaker 2: for a lot of people, door Dash partnering with Karna
36:14
Speaker 2: to allow you to pay for your Chipotle burrito.
36:17
Speaker 3: In four increments. Not good.
36:20
Speaker 2: Not a great sign for the economy when you've got
36:23
Speaker 2: to be putting burritos on layaway. I'm just wondering when
36:27
Speaker 2: we start seeing burrito backed securities showing up, you know
36:31
Speaker 2: something that investors might be able to purchase.
36:35
Speaker 4: Any others from you, Michael, My last one, I'm gonna
36:37
Speaker 4: go after the New York Times here for their worst
36:39
Speaker 4: clickbait of the year. Their article is a global housing
36:43
Speaker 4: bubble about to burst clickbait of the year because the
36:47
Speaker 4: sub headline is it's unlikely ac course to a report
36:49
Speaker 4: by the Swiss Bank UBS, but some markets are more
36:52
Speaker 4: vulnerable than others.
36:53
Speaker 3: Thank you New York Times for the clickbait of the year. Okay,
37:02
Speaker 3: so now that we've gotten that out of the way,
37:06
Speaker 3: that's cathartic. I feel better.
37:07
Speaker 2: It was it was, and don't worry if you didn't
37:10
Speaker 2: like that. We'll do better next year, we promise. Let's
37:14
Speaker 2: see heading towards the top of the hour. Taking a
37:17
Speaker 2: look at markets here, the Dow Jones Industrial Average is
37:22
Speaker 2: up two hundred and thirty nine points about half percent,
37:25
Speaker 2: SP five hundred and forty one points point six percent.
37:28
Speaker 2: NASDAK Composite is up one hundred and thirty seven points
37:31
Speaker 2: about point six percent as well, So all three major
37:34
Speaker 2: US indices are.
37:35
Speaker 3: In the green.
37:36
Speaker 2: Cute little Russell two thousand hopping along too. It's up
37:38
Speaker 2: one point seven percent today, and so even those little
37:42
Speaker 2: small caps are getting into it, saying, hey, we want
37:45
Speaker 2: a party two to end the year. You know, Santa,
37:47
Speaker 2: don't forget us and leave us behind, because.
37:51
Speaker 3: Well we're We're here too.
37:53
Speaker 4: And if you thought it was gonna be a quiet week,
37:54
Speaker 4: I've got some good news for tomorrow's show, Alphabet announcing
37:58
Speaker 4: that they are making a major four and three quarter
38:00
Speaker 4: billion dollar acquisition in the AI space. Oh good, little
38:03
Speaker 4: fun stuff to chat about tomorrow on the Financial Exchange.
38:07
Speaker 3: We're done for the day. Hope you all have a
38:09
Speaker 3: great rest of the day.
38:10
Speaker 2: If you're traveling, hope you get where you're going safely,
38:12
Speaker 2: and we'll be back with you tomorrow on the show.