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Is the US dollar losing safehaven status? · The Financial Exchange Show

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Speaker 1: and Mark Vandebbi.
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Speaker 2: Chuck Mark and sucker with you, and as we kick
1:19
Speaker 2: things off here, the Dow Jones Industrial Average is down
1:22
Speaker 2: twenty points, was previously down about two hundred. This morning,
1:26
Speaker 2: sp is now down four it was down about thirty,
1:28
Speaker 2: and the Nasdaq actually down just seven points. It was
1:32
Speaker 2: down about one hundred and fifty at one points, so
1:35
Speaker 2: all in disease off their lows, but still down for
1:38
Speaker 2: the day thus far. Tenure US Treasury is seeing its
1:43
Speaker 2: yield moving down as well as money flows into it.
1:48
Speaker 2: Right now, we've got the ten year US Treasury at
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Speaker 2: four point one percent. That's down three point eight basis
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Speaker 2: points from where it was yesterday. And so overall, not
2:01
Speaker 2: a ton of movement in equities, but you do have
2:03
Speaker 2: that movement in bonds, and we'll talk about why bonds
2:06
Speaker 2: started to move around eight fifteen this morning, and just
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Speaker 2: a little bit other movements. We've got oil down fifty
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Speaker 2: three cents of barrel to sixty one point eighty four
2:15
Speaker 2: on West Texas Intermediate. We've got gold up twenty three
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Speaker 2: sixty announced to thirty eight ninety six for another all
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Speaker 2: time high on gold, which by the way, has just
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Speaker 2: been absolutely ripping since mid August, up about five hundred sorry,
2:32
Speaker 2: up about six hundred dollars in the past six weeks now,
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Speaker 2: and so that's about a fifteen percent gain on gold
2:41
Speaker 2: during that time period. So just a monster move after
2:45
Speaker 2: a summer of consolidation there. I do want to talk
2:49
Speaker 2: about what's going on in bonds just because basically this
2:52
Speaker 2: move in bonds happened right around eight fifteen AM when
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Speaker 2: the ADP employment data was released. Now here's the thing
3:00
Speaker 2: about the ADP data. Generally no one really cares about it.
3:06
Speaker 2: But with the federal government having been shut down since
3:08
Speaker 2: twelve oh one am Eastern, you are not going to
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Speaker 2: get a job support this Friday if the federal government
3:15
Speaker 2: remains shut down through that time period. So we have
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Speaker 2: to look at alternate measures of employment. Now, the reason
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Speaker 2: that people generally don't care that much about ADP, it's
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Speaker 2: a narrower subset of data that they tend to look at,
3:29
Speaker 2: and it doesn't correlate month to month tremendously well with
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Speaker 2: the jobs data. It does have a really strong correlation
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Speaker 2: in the last few years, in particular with a multi
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Speaker 2: month trend. So if you look at like the three
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Speaker 2: month P and compare it to the three month trend
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Speaker 2: on the BLS data, they're really close. Especially this year,
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Speaker 2: they've been almost in lockstep on a rolling three month basis.
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Speaker 2: So at eight fifteen this morning, ADP came out and said, hey,
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Speaker 2: US economy lost thirty two thousand jobs for the month.
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Speaker 2: That compared to expectations of a forty to fifty thousand
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Speaker 2: job gain. Normally we'd say, okay, we'll wait until you
4:08
Speaker 2: know Friday for you know, the BLS jobs report, because
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Speaker 2: that's what people pay attention to. But since we might
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Speaker 2: not get that, you start looking to try to build
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Speaker 2: a picture with alternate data sets. And you have this
4:19
Speaker 2: number that came out that was poor, other ones that
4:21
Speaker 2: we've seen in the labor market that are not great.
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Speaker 2: Over the last week or so. Paychecks runs a small
4:27
Speaker 2: business Jobs index, and what we see there is that
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Speaker 2: for the month of September, they're reporting a point three
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Speaker 2: to one percent decline in jobs for the month in
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Speaker 2: that index. Uh and so that obviously is a shift.
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Speaker 2: The three month trend, now, by the way, has gone
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Speaker 2: from a point one to seven percent gain in July
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Speaker 2: to point zero one percent gain in August and out
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Speaker 2: negative point three to one in September, So there is
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Speaker 2: a declining trend that's in place there as well, So
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Speaker 2: that's something that you look at. We also have updated
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Speaker 2: day data from INDEED on job openings which continue to decline.
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Speaker 1: There.
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Speaker 2: The reason why this matters is the INDEED data does
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Speaker 2: correlate pretty darn strongly with the JOLTS data that the
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Speaker 2: government tends to release, not tends to that the government
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Speaker 2: releases as long as it's open, and so the INDEED
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Speaker 2: Postings index is a pretty good leading indicator of where
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Speaker 2: JOLTS is going to be. And so overall, if you
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Speaker 2: look at, you know, kind of the data in the aggregate.
5:27
Speaker 2: The one piece that's not really pointing towards a worsening
5:30
Speaker 2: in the labor market is the weekly jobless claim series.
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Speaker 2: That hasn't really shown us much of anything. It's just
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Speaker 2: kind of, hey, the labor market is in the same
5:40
Speaker 2: spot that it's been low, higher, low, fire like that.
5:44
Speaker 2: That's kind of the same thing there. These other data
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Speaker 2: series are getting worse in the last month or two,
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Speaker 2: and if they continue to it's going to be pretty
5:53
Speaker 2: hard to ignore. If we're sitting here in November with
5:57
Speaker 2: a similar decline compared to we've just seen.
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Speaker 3: Yeah, the challenge for the FED here is ascertaining why
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Speaker 3: the labor market is softening. The FED can influence overall
6:09
Speaker 3: demand in the economy. They do it by printing money.
6:12
Speaker 3: I'm oversimplifying a little bit and hitting their short term
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Speaker 3: interest rate targets. So when you hear the FED has
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Speaker 3: lowered interest rates, what really goes on buying the scenes
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Speaker 3: is they credit the New York Fed, which does the
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Speaker 3: buying and selling of treasuries with reserves with money. New
6:26
Speaker 3: York Fed goes out and spreads that around the banking system.
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Speaker 3: I'm really oversimplifying, but it's an important distinction. They control
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Speaker 3: the money supply. They target shorterm interest rates that in
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Speaker 3: turn allows them to throttle up or pair demand in
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Speaker 3: the economy. So what if this labor market softening is
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Speaker 3: due to supply factors not demand factors. So things like
6:48
Speaker 3: tariffs and the uncertainty associated with tariffs, things like deportation policy.
6:52
Speaker 3: You may think all these policies are great, by the way,
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Speaker 3: I'm not. I'm not passing judgment on them. I'm saying
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Speaker 3: simply they are a form of so called supply shocks.
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Speaker 3: They reduce the economy's productive capacity. The FED really can't
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Speaker 3: do anything about that, so it might be overstimulating demand.
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Speaker 3: As silly, as counterintuitive as that sounds, she said, Well,
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Speaker 3: the labor market's along, the Fed's got a lower interest rates, right,
7:15
Speaker 3: Well maybe not. Maybe the level of unemployment or the
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Speaker 3: rate of unemployment associated with stable inflation is higher than
7:28
Speaker 3: it used to be because of these changes to the
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Speaker 3: labor market that are taking place. This is all interesting stuff,
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Speaker 3: at least to some of us, to talk about. We
7:36
Speaker 3: can't really answer these questions now. We won't know for
7:39
Speaker 3: a year or two whether the FED has done the
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Speaker 3: right thing or they overshot or undershot. But this is
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Speaker 3: why the decision is not a straightforward one and why
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Speaker 3: honest people can disagree about the right monetary stance. Also
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Speaker 3: why gold might be ripping. Investors might be losing confidence
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Speaker 3: in the fed's hold on or commitment to very low inflation.
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Speaker 3: That is implications for the US dollar YEP, which in
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Speaker 3: turn has implications for other currencies. And you can think
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Speaker 3: of gold as an alternative currency.
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Speaker 2: And here is the interesting thing that I do come
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Speaker 2: back to is the story that gold is telling us
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Speaker 2: is a currency related story, but it's not a US
8:20
Speaker 2: dollar related story. And what I mean by that is
8:24
Speaker 2: if you go and you look at gold denominated in
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Speaker 2: a whole bunch of different currencies. I mean you can
8:31
Speaker 2: go out and you can look at it in yen terms,
8:34
Speaker 2: you can go out and look at it in euro terms,
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Speaker 2: in Australian dollar terms. Like, you can go across the
8:42
Speaker 2: board pretty much and say, hey, how is gold moving
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Speaker 2: relative to all of these currencies. And what we are
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Speaker 2: seeing is not something that is exclusive to the US
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Speaker 2: where gold is only appreciating in US dollar terms. You're
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Speaker 2: seeing it appreciating across the board compared to a large
9:01
Speaker 2: number of major currencies. I pulled up the chart here.
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Speaker 2: The one that I have is only through this is
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Speaker 2: only through late August, so I don't have the most
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Speaker 2: recent move just because I haven't pulled it. But if
9:15
Speaker 2: you look at the run up in gold in the
9:16
Speaker 2: first half of the year, gold went up in Australian dollars,
9:20
Speaker 2: in US dollars, in euros, in yen, in rupees, in yuwan,
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Speaker 2: this was across the board the move that you were seeing.
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Speaker 2: And so what that says is it's not investors looking
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Speaker 2: for a replacement for the US dollars specifically or you know,
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Speaker 2: a hedge against the US dollar. That's telling you, hey,
9:40
Speaker 2: investors are kind of looking at the whole you know,
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Speaker 2: pot of fiat currencies and just being like, do youw
9:47
Speaker 2: he wants me to eat that? We can't eat rupees,
9:51
Speaker 2: we can't eat US dollars. Yeah.
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Speaker 3: I think that's a fair assessment. It's too bad that
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Speaker 3: the dollar is not serving as the safe haven asset
10:00
Speaker 3: that in US treasuries moreover or not.
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Speaker 2: All those treasuries, you can make the case are getting
10:05
Speaker 2: the bid that you would expect in a safe haven move.
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Speaker 3: In a rel I was thinking, some people have written
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Speaker 3: about relative changes in the long end of the treasury
10:15
Speaker 3: yield curve, and I've not thought too deeply about this,
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Speaker 3: and I don't claim to be an expert, but they've
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Speaker 3: pointed out there there, well you know whether yeah, forget
10:24
Speaker 3: forget it the lark. I don't. I haven't thought enough
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Speaker 3: about it to explain it coherently, so just forget it.
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Speaker 3: It's interesting to me that this and is certainly not
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Speaker 3: coincidental that gold is Gold's allure is increasing at the
10:40
Speaker 3: same time that debts and deficits across the developed world
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Speaker 3: show no signs of improving. And underling.
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Speaker 2: Look what everyone's doing. Yeah, the US passed a bill
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Speaker 2: middle of this year that did nothing to rain in deficits.
10:57
Speaker 2: Europe said, hey, we're going to raise an extra five
11:00
Speaker 2: hundred billion dollars for defense spending, and we're just gonna
11:04
Speaker 2: figure out how to pay for it. Japan is seeing
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Speaker 2: renewed inflation for the first time in thirty five years,
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Speaker 2: and the boj can't figure out what to do with
11:12
Speaker 2: it because they're like, well, if we start raising interest rates,
11:16
Speaker 2: this is gonna make the end pretty strong, and that
11:18
Speaker 2: has some really bad implications for US. China is raising
11:22
Speaker 2: all kinds of debt to try to paper over other
11:25
Speaker 2: debt that they already have that appears to be going bad.
11:28
Speaker 2: It's not surprising that all of these currencies are getting
11:32
Speaker 2: trounced in gold terms because you sit there and you
11:36
Speaker 2: loo again and you're like, okay, no one's got any
11:38
Speaker 2: fiscal discipline. If that's the case, why do I want
11:43
Speaker 2: to just sit there and own the currency when I
11:45
Speaker 2: could own a hard asset. If this is going to
11:48
Speaker 2: be the policy for you know, the foreseeable future. Now,
11:51
Speaker 2: if it turns, obviously you've got problems there. But otherwise
11:55
Speaker 2: you kind of look at that and you're like, Yeah,
11:56
Speaker 2: I'm not surprised that they're selling rupees to buy gold.
11:59
Speaker 2: I'm not surprise they're selling euros to buy gold. I'm
12:02
Speaker 2: not surprised they're selling dollars to buy gold. It makes
12:05
Speaker 2: intuitive sense when you look at it in the context
12:08
Speaker 2: of no one's being fiscally responsible right now.
12:13
Speaker 3: Yeah. I didn't get that case for gold because I
12:17
Speaker 3: was trained traditionally like a lot of researchers are, and
12:19
Speaker 3: gold is not generative. It's very hard to calculate its
12:23
Speaker 3: present value. It has no cash flows to bring back
12:25
Speaker 3: to today. You have to think about it in terms
12:29
Speaker 3: of trust and the erosion of trust and traditional institutions
12:33
Speaker 3: and arrangements.
12:34
Speaker 2: To take a quick break. When we come back, we
12:36
Speaker 2: got a bunch of AI stories to get to and
12:39
Speaker 2: we'll get to them right after this.
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14:22
Speaker 2: There's a piece here from the Financial Times. It's titled
14:27
Speaker 2: how in videos Jensen Huang became AI's global salesman, and
14:31
Speaker 2: it's a great piece actually talking about how in the
14:34
Speaker 2: last year and a half he's basically started, you know,
14:37
Speaker 2: traveling the world, like pushing the idea of like, hey,
14:41
Speaker 2: it's not just about a few companies building out AI.
14:44
Speaker 2: It's got to be every country needs to have its
14:47
Speaker 2: own quote, you know, sovereign AI in order to you know,
14:51
Speaker 2: own its intelligence data and YadA, YadA, YadA, and and
14:54
Speaker 2: this whole thing. And look, it's two things can be true.
14:58
Speaker 2: It's probably accurate that you don't want to have artificial
15:02
Speaker 2: intelligence models that you're running that are in the hands
15:05
Speaker 2: of other countries that might not share your worldview. But
15:10
Speaker 2: it's also also incredibly self serving that hey, you need
15:13
Speaker 2: to do this, and I've got the product just for you.
15:16
Speaker 2: Both of those things can be true. The piece the
15:20
Speaker 2: whole thing that got interesting to me though, and again
15:23
Speaker 2: I have no idea how any of this is going
15:25
Speaker 2: to end up, but I do well, I know some
15:30
Speaker 2: of it's going to end up. And here's the part
15:32
Speaker 2: that I do know, how it's going to end up
15:34
Speaker 2: because it's already ending up there. I'm gonna quote this
15:37
Speaker 2: right here, the oil rich states of the Golf for
15:40
Speaker 2: trying to position themselves as hubs for AI and its infrastructure.
15:45
Speaker 2: The scale is staggering. Sponsors say the UAES Stargate AI
15:50
Speaker 2: data center will require five gigawatts of power, roughly the
15:54
Speaker 2: same as the entire city of New York. So here's
15:58
Speaker 2: the thing that's all well and good in the UAE.
16:05
Speaker 2: If they want to build five gigawatts of data center,
16:08
Speaker 2: they can do it. And if they want to build
16:11
Speaker 2: five gigawatts of power plants to power SAT data center,
16:15
Speaker 2: they can do it. There's no problem there. The limiting
16:20
Speaker 2: factor in the United States is not going to be
16:22
Speaker 2: data center build out. It's going to be power build out,
16:25
Speaker 2: and specifically the cost of power generation, which we are
16:29
Speaker 2: already seeing as a problem as utility companies are raising
16:34
Speaker 2: costs in order to deal with all of the additional
16:36
Speaker 2: data center demand. This is just a reminder. Last year,
16:41
Speaker 2: data centers used about four percent of all power generation
16:45
Speaker 2: in the United States. By twenty twenty eight, largely on
16:48
Speaker 2: the back of this, they're expected to use up to
16:50
Speaker 2: twelve percent we are not going to grow power generation
16:54
Speaker 2: capacity fast enough to match that. And we know that,
16:58
Speaker 2: by the way, because these plants for these data centers
17:02
Speaker 2: have only started to come out in the last year
17:05
Speaker 2: or two. To anyone listening who works in the electricity
17:09
Speaker 2: business and in any part of it, you're gonna just
17:12
Speaker 2: nod along as I say this. If you're talking about
17:14
Speaker 2: trying to build a new power plant, whether it is
17:16
Speaker 2: a new net gas plant, a new god forbid, nuclear plant,
17:21
Speaker 2: a new solar plant, whatever it might be, the simple
17:26
Speaker 2: ones are going to take you ten to fifteen years.
17:28
Speaker 2: A nuclear plant. The reason I said, God forbid, it's
17:30
Speaker 2: gonna take you thirty years to get a new nuclear
17:31
Speaker 2: plant built in the United States. We know that because
17:35
Speaker 2: the only nuclear plant that came online in the last
17:37
Speaker 2: thirty years is in Georgia, and it took about thirty
17:40
Speaker 2: years to actually get from start to finish. So I
17:45
Speaker 2: think overall, when when we look at this, the problem
17:49
Speaker 2: in the limiting factor in the United States is going
17:52
Speaker 2: to be the ability to build power generation and transmission
17:58
Speaker 2: infrastructure to cover all of the needs of these data centers.
18:04
Speaker 2: Because we don't build power plants in the US quickly.
18:07
Speaker 2: We build really really really really slowly, about as slowly
18:10
Speaker 2: as you can. And I'm not saying that's good or bad.
18:13
Speaker 2: I'm just saying that it is. It actually is bad
18:15
Speaker 2: that we don't build power plants quickly enough. I understand
18:19
Speaker 2: no one wants to live next to one of them,
18:21
Speaker 2: but ultimately we have to build these things and we
18:25
Speaker 2: just don't. Whether you're talking about the generation, the distribution,
18:29
Speaker 2: transmission like, none of it. We don't really do a
18:31
Speaker 2: good job with any of it. And it's because all
18:34
Speaker 2: of us want to keep the stuff out of our backyard,
18:37
Speaker 2: and instead it ends up in no one's backyard, and
18:39
Speaker 2: electricity prices go through the roof, and that's gonna be
18:41
Speaker 2: the limiting factor is the political upheaval because of this,
18:47
Speaker 2: when electricity prices are rising ten fifteen, twenty percent a
18:51
Speaker 2: year so Mark Zuckerberg can make AI slop videos on
18:55
Speaker 2: his new AI slop site, Okay, great, what do I
18:59
Speaker 2: get for that? A higher bill because someone wanted to
19:02
Speaker 2: make a cat riding a unicorn through a field of
19:06
Speaker 2: you know, flowers shaped like turnips. Wonderful? Can't wait, Zuck?
19:13
Speaker 2: How much did that cost me on my electric bill?
19:15
Speaker 2: One hundred and thirty six dollars.
19:16
Speaker 4: Can you actually make that in the break?
19:19
Speaker 1: Probably?
19:20
Speaker 2: I don't know how to do that though, Yeah, plug
19:22
Speaker 2: it in. I've never done video.
19:24
Speaker 3: Oh video, I thought you meant picture.
19:25
Speaker 2: No, we're talking video that you didn't hear about this,
19:28
Speaker 2: no zucks video slop site. We'll cover that next on
19:30
Speaker 2: the Financial Exchange.
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19:49
Speaker 1: Time now for Wall Street. Watch a complete look at
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19:58
Speaker 4: Despite the government shutdown being a f underway, markets are
20:02
Speaker 4: mostly quiet and mixed at the moment. Right now, the
20:06
Speaker 4: Dow is up by nearly two tenths of one percent,
20:09
Speaker 4: or eighty two points higher. SMP five hundred is edging
20:13
Speaker 4: three points, hire Nasdaq is up merely one point. Russell
20:17
Speaker 4: two thousand is down one tenth of one percent. A
20:22
Speaker 4: ten year treasure reeled down two basis points at four
20:25
Speaker 4: point one two seven percent, and crude oiled down three
20:28
Speaker 4: quarters of a percent, rating just below sixty.
20:31
Speaker 3: Two dollars a barrel.
20:32
Speaker 4: Nike stock climbing over five percent after the athletic retailer
20:36
Speaker 4: posted a surprise sales increased for the previous quarter, but
20:39
Speaker 4: raised its tariff cost forecast to one and a half
20:43
Speaker 4: billion dollars this fiscal year. Nike also warned that sales
20:47
Speaker 4: could slide this holiday season. Meanwhile, shares in Lithium Americas
20:52
Speaker 4: soaring twenty two percent after the Department of Energy said
20:55
Speaker 4: it would take a five percent stake in both the
20:57
Speaker 4: Canadian company and its Nava up mining project. Elsewhere As
21:02
Speaker 4: shares surging fifteen percent after The Financial Times reported that
21:07
Speaker 4: Blackrock owned Global Infrastructure Partners is in late stage talks
21:11
Speaker 4: to acquire the renewable and thermal power producer. According to
21:16
Speaker 4: The Wall Street Journal, Warren Buffett's Berkshire Hathaways in talks
21:19
Speaker 4: to buy Occidental Petroleum's petrochemical business for about ten billion dollars.
21:25
Speaker 4: In Amazon recently announced it has expanded its private label
21:28
Speaker 4: grocery lineup with the launch of a new brand aimed
21:31
Speaker 4: at price conscious shoppers, with most products priced under five dollars.
21:37
Speaker 4: The brand will be called Amazon Grocery. It includes more
21:40
Speaker 4: than one thousand items. I'm Tucker, Silva, and that is
21:44
Speaker 4: Wall Street Watch. In the previous segment, we asked the
21:46
Speaker 4: trivia question what was the name of Ford's first automobile.
21:51
Speaker 4: That would be the model A Leon. Dina is our
21:55
Speaker 4: winner today, taking home a Financial Exchange Show t shirt
21:58
Speaker 4: from Dennis. By the way, congrats. We play trivia every
22:01
Speaker 4: day here in the Financial look Change. See complete contest
22:03
Speaker 4: rules at Financial looks Changshow dot com.
22:06
Speaker 2: So this was about a week ago. Was on September
22:10
Speaker 2: twenty fifth, and this is direct from the meta website
22:16
Speaker 2: introducing Vibes, a new way to discover and create AI videos.
22:22
Speaker 2: Today we're rolling out the next iteration of the Meta
22:25
Speaker 2: AI app, including an early preview of vibes new feed.
22:28
Speaker 2: In the Meta AI app, we can create and share
22:30
Speaker 2: short form AI generated videos. I noticed the metaverse voices
22:35
Speaker 2: officially bad. Oh it's because this sucks so much. No, like,
22:38
Speaker 2: this is just a whole new way to suck. Vibes
22:42
Speaker 2: are designed to make it easier to find creative inspiration
22:45
Speaker 2: and experiment with Meta AIS media tools. As you browse,
22:49
Speaker 2: you'll see a range of AI generated videos, like some
22:52
Speaker 2: weird orange furry dude riding a motorcycle that I see
22:55
Speaker 2: below here feet. It will come more personalized over time,
22:59
Speaker 2: and if something catches your eye, you can create your
23:01
Speaker 2: own video, remix what you see and shot it with
23:04
Speaker 2: friends and followers with vibes. You can start from scratch
23:09
Speaker 2: where with content you already have or read. It's a
23:12
Speaker 2: video to make it your own, a new visuals, layers
23:15
Speaker 2: and music, and it just styles to match your taste. Okay,
23:20
Speaker 2: So it's it's a literally it's a whole AI video
23:23
Speaker 2: feed that they don't allow for anything in it that's
23:25
Speaker 2: not AI. And the samples they have, they've got literally
23:29
Speaker 2: it looks like, you know the Philly fanatic, No, not
23:34
Speaker 2: that one. Who's the Who's the Flyers mascot? Gritty? Oh?
23:38
Speaker 3: Yeah?
23:38
Speaker 4: They guy with the bulging eyes they got They got.
23:40
Speaker 2: Like a naked version of him riding a motorcycle. Okay,
23:44
Speaker 2: it's just him wearing a tie. Then you've got a
23:47
Speaker 2: moose jumping on a trampoline and a cat at a spa. Okay,
23:54
Speaker 2: a lot of questions that I have. The first one
23:56
Speaker 2: is why, Like the second is who? And by that
24:03
Speaker 2: I mean who actually wants to just scroll through a
24:05
Speaker 2: feed of AI video slop all day? And the point
24:10
Speaker 2: that I'll make on this is artificial intelligence generative Artificial
24:15
Speaker 2: intelligence has been around for almost three years right now
24:18
Speaker 2: was November of twenty two when the first chat GPT
24:21
Speaker 2: popped out. Is there a single meme that has come
24:26
Speaker 2: out of an AI generated video or picture? The answer
24:31
Speaker 2: is no, and the reason why is e. They're just
24:33
Speaker 2: really easy to make. So it's like everyone can do
24:35
Speaker 2: the same thing. But b AI has accidentally proven that
24:39
Speaker 2: humans have a soul because the thing that makes a
24:42
Speaker 2: meme a meme is being able to recognize yourself in
24:45
Speaker 2: the picture that you're seeing. Tucker, if I show you
24:48
Speaker 2: a picture of angry Jack Nicholson in a military uniform
24:53
Speaker 2: in a courtroom, you immediately know that on that I'm
24:57
Speaker 2: going to put You want the truth, you can't handle
25:00
Speaker 2: the truth. You know that because we all see it.
25:04
Speaker 2: We all have like those feelings at some point or another.
25:07
Speaker 2: If I put up the picture from say anything, of
25:11
Speaker 2: John Cusack holding the boombox over his head, we all
25:14
Speaker 2: know exactly what I'm talking about right now and exactly
25:17
Speaker 2: how to feel, because we all recognize ourselves in John
25:20
Speaker 2: Cusack in one way or another. When I see a
25:23
Speaker 2: moose jumping on a trampoline, I'm like, WTF, mate, Like
25:27
Speaker 2: what's going on?
25:28
Speaker 1: Like?
25:28
Speaker 2: What are we doing here? This is stupid. It's it's
25:33
Speaker 2: just stupid at this point, and the fact that meta
25:37
Speaker 2: is like trying to make AI video feeds happen, is dumb.
25:44
Speaker 2: Now they'll go on to make billions of dollars off this,
25:46
Speaker 2: I'm sure, so you know I'm gonna be the dummy.
25:49
Speaker 2: But they didn't on you know, the whole metaverse, because again,
25:54
Speaker 2: it was kind of the same thing. It's just like
25:57
Speaker 2: Mark Zuckerberg, for all of his success, sometimes has trouble
26:01
Speaker 2: recognizing what makes a human a human. And this is
26:04
Speaker 2: one of those examples.
26:06
Speaker 3: You know what it comes back to for me, and
26:07
Speaker 3: this won't surprise you. My usual rant, which is financial
26:11
Speaker 3: conditions might be too loose. It's way too easy to raise, right.
26:15
Speaker 3: I blame the FED. Fed's got a high I blame
26:18
Speaker 3: the FED financial conditions, which they almost certainly target failure
26:24
Speaker 3: and exert a lot of influence over. They're too accommodating.
26:27
Speaker 3: It's way too easy to raise and waste capital. I
26:32
Speaker 3: think the same thing when I look at the number
26:34
Speaker 3: of shows on Netflix or other publicly traded streaming providers.
26:38
Speaker 3: There's too much excess.
26:40
Speaker 2: So there's that. So anyways, I saw that, and then
26:43
Speaker 2: it was also topped off by this piece from yesterday.
26:46
Speaker 2: Oh no, this is this morning. Meta Platform said on
26:49
Speaker 2: Wednesday it would begin using people's interactions with its generative
26:52
Speaker 2: AI tools to personalize content and advertising across its apps.
26:57
Speaker 2: So what you're typing into Meta's AI assistant, you're gonna
27:01
Speaker 2: get back in terms of ads. That's you know, all
27:05
Speaker 2: all I gotta say about that. So if you thought like, oh, like,
27:08
Speaker 2: I'm having this great conversation with this AI, Yeah, and
27:11
Speaker 2: Mark Zuckerberg's gonna know what you're talking about too. So
27:15
Speaker 2: there's that. Folks want to talk to you a little
27:19
Speaker 2: bit about the seminars that Armstrong Advisory Group is gonna
27:23
Speaker 2: be doing over the next couple weeks. We got two
27:25
Speaker 2: of them lined up. The first one is a week
27:28
Speaker 2: from tomorrow. It's at Margaritaville Resort, Cape cod on October ninth.
27:32
Speaker 2: The second one Showcase super Lucks in Chestnut Hill on
27:36
Speaker 2: October sixteenth. It's gonna be a live broadcast of the
27:39
Speaker 2: Financial Exchange show You Got Food, And then we're gonna
27:43
Speaker 2: be talking about the economy, markets, inflation, shut down, you
27:47
Speaker 2: name it. We got all of that that we're gonna
27:49
Speaker 2: be discussing there. So again, it's Margaritaville Resort, Cape cod
27:53
Speaker 2: on October ninth and showcase super Lucks in Chestnut Hill
27:57
Speaker 2: on October sixteenth. Call eight hundred three nine three four
28:01
Speaker 2: zero zero one to reserve your spot. Space is limited
28:05
Speaker 2: and they're starting to fill up at this point, so
28:07
Speaker 2: again eight hundred three nine three for zero zero one
28:12
Speaker 2: to reserve your spot. Or you can also sign up
28:15
Speaker 2: at Armstrong Advisory dot com.
28:18
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
28:20
Speaker 1: registered investment advisor. Nothing in the ad or in any
28:23
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
28:26
Speaker 1: your own financial, tax into state planning advisors before making
28:29
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
28:32
Speaker 1: advisory services.
28:34
Speaker 2: Taiwan pushing back on the idea of shifting more chip
28:36
Speaker 2: production to the US. Obviously, when your economy is heavily
28:39
Speaker 2: dependent on one particular export, you might say, yes, I'd
28:43
Speaker 2: love to help you build more chip factories in the US,
28:45
Speaker 2: but not at the cost of, you know, my population
28:49
Speaker 2: being able to make a bunch of money.
28:50
Speaker 3: What are we gonna do?
28:52
Speaker 2: Not entirely surprising. There also another AI adjacent story. AI
28:57
Speaker 2: is not killing jobs fines new US study. Well, thank
29:00
Speaker 2: goodness for that. I'm glad we got that squared away.
29:02
Speaker 3: It's certainly making work for researchers, it.
29:05
Speaker 2: Is, And this was actually the interesting thing on this,
29:07
Speaker 2: So again not to poop poo it. This was a
29:09
Speaker 2: study from the Yale Budget Lab and the Brookings Institution,
29:13
Speaker 2: and again like both areas that have a bunch of
29:15
Speaker 2: really smart people working there. But I also think here's
29:20
Speaker 2: the place where I struggle with any definitive conclusions about
29:25
Speaker 2: AI helping or hurting in the workforce right now. Is
29:28
Speaker 2: all the data that we have on it is backward looking,
29:31
Speaker 2: and the way AI is evolving and maybe used in
29:34
Speaker 2: the future is dramatically different from how it's been used
29:36
Speaker 2: in the past. So I don't think what happened six
29:39
Speaker 2: months ago can be indicative of what will be happening
29:41
Speaker 2: six months from now. I say this despite poop pooing
29:44
Speaker 2: you know Meta's AI video slop for the last ten minutes,
29:47
Speaker 2: because that's not a jobs thing or not. That's just
29:50
Speaker 2: something I think is dumb. But there absolutely are companies
29:53
Speaker 2: that are using AI right now to transform how their
29:56
Speaker 2: workers operate, and in some cases that could result in
30:00
Speaker 2: less hiring, more hiring, or no change, and we just
30:03
Speaker 2: need to see how it evolves. I think before we
30:04
Speaker 2: can definitively say anything.
30:06
Speaker 3: Nobody doubts that the changes will be dramatic. What are
30:10
Speaker 3: probably what's probably overly optimistic is the time frame that
30:13
Speaker 3: people are expecting these changes to be made with. Then,
30:16
Speaker 3: if you look at past big convulsions, they haven't been
30:21
Speaker 3: big bang type events electrification or earlier industrialization and electrification
30:27
Speaker 3: in doing all they knock on, Yeah, they took time
30:31
Speaker 3: to work their way through the economy and to show
30:33
Speaker 3: up in the productivity and economic growth statistics. It's not
30:37
Speaker 3: clear to me why AI would not. I'm not saying
30:40
Speaker 3: this won't be different, but if history is your guide here,
30:44
Speaker 3: it's going to take time for AI to work its
30:47
Speaker 3: way through the real economy and influence how productively we
30:53
Speaker 3: do things. People have been writing about AI for twenty
30:56
Speaker 3: plus years. You can read academic papers on growth. They
30:59
Speaker 3: all mention AI, those written in the last twenty five years,
31:03
Speaker 3: but we've yet to see it result in a change
31:05
Speaker 3: in the trend. I'm not saying it won't. I think
31:07
Speaker 3: it will, but it'll probably be a gradual and that'll
31:11
Speaker 3: be a good thing for those who are displaced by AI.
31:15
Speaker 2: AI's been writing about AI for three years.
31:17
Speaker 3: Also, you do wonder about that, You know.
31:20
Speaker 2: You have to just take a quick break and when
31:23
Speaker 2: we return, we'll do a little bit of stack Roulette
31:26
Speaker 2: with real humans, not Ai.
31:29
Speaker 1: Here the Financial Exchange every day from eleven to noon
31:32
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31:36
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32:14
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32:46
Speaker 2: Mark what do you got for stack roulettes?
32:48
Speaker 3: Good news? I think for the independence of the Federal Reserve.
32:52
Speaker 3: It's not something that's on everybody's daily radar, but it
32:55
Speaker 3: is important for stable inflation over time. So as so
33:00
Speaker 3: have concluded anyone who's looked at this issue. The White
33:04
Speaker 3: House wants to fire and battled Fed Governor Lisa Cook,
33:08
Speaker 3: and they may be able to eventually, but they have
33:10
Speaker 3: to make their case that she did something wrong first,
33:13
Speaker 3: so they can't sort of summarily terminator. So the staring
33:16
Speaker 3: Court ruled today. There was a little bit of anxiety
33:18
Speaker 3: maybe in fixed income markets over this issue, so this
33:21
Speaker 3: has this has to play out, and.
33:24
Speaker 2: I believe they set oral arguments for January.
33:29
Speaker 3: I think it was according to the Financial Times.
33:31
Speaker 2: So it's going to be at least a few months
33:32
Speaker 2: before we hear anything more on that front. Boeing is
33:37
Speaker 2: looking for a seven thirty seven replacement Gosh, and it
33:41
Speaker 2: it seems like they just came out with the seven
33:43
Speaker 2: thirty seven Max. But here's the thing. The seven thirty
33:46
Speaker 2: seven Max, the reason that it had those problems with
33:50
Speaker 2: the MCAST system was because that system was needed because
33:54
Speaker 2: they changed the weight distribution and the thrust distribution in
33:56
Speaker 2: an old plane, and so they had to build a
33:59
Speaker 2: system to correct for that, which ended up, unfortunately resulting
34:03
Speaker 2: in two crashes and several hundred people killed. So they
34:07
Speaker 2: are now apparently in the early stages of developing a
34:10
Speaker 2: new aircraft to replace the seven thirty seven Max. According
34:13
Speaker 2: to the Wall Street Journal, don't think that you're going
34:15
Speaker 2: to see this anytime soon. Typically airliner design is something
34:20
Speaker 2: that takes anywhere from ten to fifteen years, so this
34:23
Speaker 2: is most likely a twenty thirty five to twenty forty
34:29
Speaker 2: takeoff that you will see for.
34:30
Speaker 3: This plane, god willing.
34:32
Speaker 2: But obviously it's something that is you know, Boeing starting
34:37
Speaker 2: the legwork on this, and it does seem according to
34:40
Speaker 2: the reporting, this is going to be a clean sheet
34:42
Speaker 2: design and not just a revamp of the seven thirty seven,
34:46
Speaker 2: So that obviously gives them a whole bunch of you know,
34:49
Speaker 2: additional you know leeway in terms of how they design
34:53
Speaker 2: it such that you don't have the problems that plague
34:55
Speaker 2: the seven thirty seven. You know, my favorite little design
34:58
Speaker 2: wrinkle is on the seven thirty s Evan, No what sorry,
35:03
Speaker 2: I'm kind of like an aviation like I like this
35:05
Speaker 2: you're thing you have like the engines on a seven
35:08
Speaker 2: thirty seven all the time. I know me too. So
35:13
Speaker 2: the engines on most airplanes, the frame surrounding them is
35:17
Speaker 2: round because the engine is round, like, you don't have
35:20
Speaker 2: oval shaped engines the air The engines on the seven
35:25
Speaker 2: thirty seven, at least on the last couple generations, the
35:29
Speaker 2: nacelle is not round. It's what's known as a hamster
35:33
Speaker 2: pouch is the phrasing that they use for it. The
35:36
Speaker 2: bottom is kind of flattened off, and the reason why,
35:39
Speaker 2: in order to get bigger engines onto the wings, they
35:43
Speaker 2: had to taper the bottom of the nacelle so that
35:45
Speaker 2: it doesn't hit the ground during takeoffs and landings, and
35:49
Speaker 2: so they had to flatten the bottom of the nacelle
35:52
Speaker 2: out a little bit. So even though the actual part
35:55
Speaker 2: that spins the turbine is round, the nacelle casing is not.
35:59
Speaker 3: They call the cylinder, the whole thing around.
36:02
Speaker 2: Yeah, the whole thing. And so basically what you end
36:05
Speaker 2: up with is this thing that's round for about three
36:08
Speaker 2: quarters of it and then flattens out on the bottom.
36:10
Speaker 3: I just thought that was a mistake.
36:11
Speaker 2: It's the only way they could get bigger engines onto
36:14
Speaker 2: the plane compared to the earlier versions. And this is
36:17
Speaker 2: like one of the limitations, is hey, because of the
36:20
Speaker 2: landing gear and how they need to fit. They had
36:23
Speaker 2: to be very short landing gear, and so you don't
36:25
Speaker 2: have a ton of room for the engine. And this
36:26
Speaker 2: is how they worked around.
36:27
Speaker 3: I thought it was more stylish.
36:29
Speaker 2: Might be stylish. I want to know another little engine thing.
36:31
Speaker 2: If you look at the new ones.
36:33
Speaker 3: Yes, please tell me, yes, absolutely.
36:36
Speaker 2: You also see this on the seven eight seven. The
36:38
Speaker 2: back of them are scalloped, so they have these little
36:41
Speaker 2: curves that are cut out of them and that and
36:44
Speaker 2: that helps reduce engine noise.
36:47
Speaker 3: All tuck iron with seafood.
36:49
Speaker 2: He's ready to go, get them a slop bowl of scallops.
36:52
Speaker 3: How did you How did you pick up on that?
36:54
Speaker 3: You rarely see the plane from behind.
36:56
Speaker 2: This is from the side, you see it?
36:57
Speaker 1: Oh?
36:58
Speaker 3: Oh, even from the side, it's pretty well, I guess.
37:00
Speaker 2: Your I'm the guy who like when when my one
37:04
Speaker 2: friend who was like, hey, like come out like in
37:06
Speaker 2: a little boat in Boston Harbor with me, I'm like,
37:08
Speaker 2: can we just go sit under the runways at Logan
37:10
Speaker 2: so that we can watch Like it's I could talk
37:15
Speaker 2: about airplanes all day, most of it'll be right. Occasionally
37:18
Speaker 2: a pilot text in and be like, hey, you were
37:21
Speaker 2: completely off base on that, but no, it's those are
37:23
Speaker 2: two help reduce. My vision is horrible at least in
37:29
Speaker 2: one of my eyes. Oh I didn't know that, but
37:31
Speaker 2: you so my right eye, my vision is fantastic. My
37:33
Speaker 2: left eye it is quite bad.
37:35
Speaker 4: Do you have a contact then or no?
37:37
Speaker 2: Oh, I'm right recommend that. So apparently I'm right eye
37:40
Speaker 2: dominant enough such that, like I can see everything very clearly.
37:44
Speaker 2: But if you ever asked me to like cover this,
37:45
Speaker 2: I can't read that sign right there?
37:48
Speaker 3: Huh?
37:50
Speaker 2: The five days of housing, divorced, downsizing, diapers, diamonds and
37:53
Speaker 2: death right and near sighted this huh.
37:57
Speaker 3: There you go.
37:58
Speaker 2: So there's that, So no combination of a Look. Now
38:01
Speaker 2: that I have kids pilot's license, I don't think that's
38:04
Speaker 2: the time to train to get a pilot's license. I
38:07
Speaker 2: think that's the time to have already had one. Let's
38:09
Speaker 2: take a quick break for the next twenty four hours,
38:11
Speaker 2: but we're gonna be back tomorrow. A whole lot more
38:14
Speaker 2: coming up, and we'll see you then