December 22, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss the year the job market hit the wall. Martha Gimbel (Yale Budget Lab - Executive Director) joins the show to chat about how the labor market slowdown can be reversed in 2026. It's time for Financial Festivus! Chuck and Mike reveal the list of the most annoying economic stories of the year.
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Speaker 1 (00:00):
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(00:42):
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(01:06):
Zada and Mike Armstrong, Chuck.
Speaker 2 (01:11):
Mike and Tucker with you here, and in a holiday
shortened trading week, we do have things off to a
good start in equity markets. The S and P five
hundred up thirty four points about half a percent, the
Dow Jones Industrial average up two hundred and twenty five
points about half a percent, and the nasdak can possit
up one hundred and fourteen points about half a percent,
(01:32):
So a nice little half percent rally taking place throughout
equity markets today. Tenure US Treasury selling off very, very modestly,
just a wee little bit, down one point six basis
points to four point one six seven percent. We've got
the dollar index down point three three percent to ninety
seven point nine to two five. Gold continuing another rally
(01:56):
that has been taking place over the last couple of weeks,
up eighty two dollars an ounce to forty four sixty
nine and ninety cents. That is another new all time
high today, first all time high that we've had on
gold in about a month and a half, maybe two months.
And we've also got crude oil up a dollar fifteen
a barrel about two percent to fifty seven sixty seven
(02:17):
on West Texts Intermediate triple A National Averagur gas prices
sliding three tenths of ascent to two eighty five and
five tenths at the moment. Piece in the Wall Street
Journal the year the job market hit a Wall. I
got a problem with the headline before we even get
to the piece. Job market didn't hit a wall. When
(02:38):
I hear hitting a wall, I hear okay, like there
was a real problem, and like you saw it in
the job statistics. We've been seeing just a gradual cooling
in the job market since twenty twenty second half of
twenty two, so about three and a half years.
Speaker 3 (02:54):
Yeah, wall would imply suddenness.
Speaker 2 (02:56):
Something right, like you hit a wall and like things
suddenly got worse. This is has been a steady linear
degradation in the job market for three and a half years.
That now has gotten us to the point where we
have had some negative monthly job prints, but they didn't
come out of nowhere because we've been on this path
and we just have not moved from that path in
the last three and a half years.
Speaker 3 (03:16):
Fair wrong analogy.
Speaker 4 (03:17):
Job creation has been weak though in twenty twenty five
and yours been more of a steady decline. I don't
know what to expect for twenty twenty six other than
it's really tough to see these trends reversing, right, I mean,
if you take a look at the last I don't
have the stat right on me, but the average job
(03:39):
creation pace for the last three years, and it has
declined pretty much linearly. And so why would you see that,
you speak, why would you see that reverse? I really
have a tough time envisioning it in the absence of
a big, substantial turnaround in and I think, I guess
(04:02):
some fantastic thing related to AI or government policy, and
I don't think government policy changes unless.
Speaker 3 (04:08):
You do hit that wall.
Speaker 4 (04:10):
Where again, if the if the employment picture hits a wall,
what that means is that the pace of layoffs and
the unemployment rate increases in the course of a year substantially.
We're talking, you know, three quarters of a percentage point.
That to me is the economy and the labor market
hitting a wall. And we're just we're not there. I mean, yes,
(04:32):
we saw an increase in the unemployment rate, but it's
been you know, a little bit more than half percent,
and it took most of the year to get there.
Speaker 2 (04:39):
This year, on average, we have seen fifty five thousand
and four hundred and fifty jobs added on a monthly basis.
Speaker 3 (04:46):
Okay, that's cord to the BLS data that we have.
Speaker 2 (04:49):
If we go and take a look last year, last
year we saw one hundred and sixty seven thousand jobs
added on a monthly basis. If we go and look
at twenty twenty three, we saw two hundred and nineteen
thousand jobs added on a monthly basis. If we go
and look at twenty twenty two, we had three hundred
and seventy seven thousand jobs added on a monthly state line.
(05:12):
It's just been a consistent move down over that period.
And the question that you have to ask about labor
remember like historically and this is all we have to
go on because none of us have been to the future. Man,
we haven't say it that way. I know, we just
haven't been there. Historically, consumption leads employment. If you look
(05:41):
at the labor market through that lens, what is going
to improve consumption next year in the United States?
Speaker 3 (05:51):
Tax refunds. That's that's one option YEP. Number two.
Speaker 2 (05:56):
Other big beautiful bill provisions for improving corporate consumption capex yep,
you know, is there gonna be more of that? Those
are you two potential mechanisms for improvement on that side.
When you look at the ways that consumption could worsen again,
you get a couple of them. Number one is further
(06:18):
weakening in the labor market in housing particular, like housing
housing weakness leading to layoffs in construction and in fewer
hours in construction, less consumption. The other one, and this
is look, this is backwards admittedly because this isn't normally how.
Speaker 3 (06:34):
It works well the fact reversal.
Speaker 2 (06:37):
No, I wasn't gonna go there. I was going with,
does the labor market's weakening in and of itself lead
to less consumption? Combination of people saying, hey, I'm less
stable in my job, I'm not going to buy as much.
Speaker 3 (06:53):
I don't buy that because we never see that.
Speaker 4 (06:54):
The more likely one is something in something in equity
markets getting a and that piece leading to lower consumption.
Speaker 2 (07:03):
I was going to go just towards Look, even in
the labor market, aggregate payroll growth slowing, that allows for
fewer dollars to be spent. That then, you know, kind
of triggers a cycle we've never seen it before. But Michael,
if you had a tape of all of the times
I've said in the last six years, we've never seen
this before.
Speaker 3 (07:23):
Yeah, and it happened. We could fill an entire show.
Speaker 2 (07:27):
Yeah, which would be fun, not for listeners but for us.
Speaker 4 (07:33):
There have been a lot of firsts over the course
of the last five years, and so far be it
from me to doubt anything, but I mean to me,
we've talked a lot about the concentration of spending amongst
the wealthy, and so if you get a reversal of
that wealth effect, either from real estate depreciating seems unlikely
to me or equity markets devaluing, I think that those
(07:54):
could be enough to send us into that other direction.
But again the reverse is also equity markets hold up
and big tax refunds come.
Speaker 3 (08:04):
Yeah, I could keep correct.
Speaker 2 (08:06):
These are kind of what you're looking for next year.
So we don't know how they're going to play out,
but it's pretty much housing in labor weakness on one side,
you've got tax refunds and further capex expansion on the other,
and then you've got ais this wild card that could
(08:27):
go either way.
Speaker 3 (08:28):
Wild card wheat. I gotta be honest.
Speaker 2 (08:33):
I was playing games with my kids over the weekend
and one one of them involved wild cards, and I
kept doing.
Speaker 3 (08:38):
That and they were like, Daddy, why do you stop?
Why do you keep saying it like that. I'm like, because, Charlie,
day you'll you'll understand. One day you will.
Speaker 2 (08:47):
Let's take a quick break. When we come back. We're
joined by Martha Gimble. She's the executive director and co
founder of the Budget Lab at Yale, and she's gonna
give us a little more information on what's going on
with the labor market.
Speaker 1 (08:58):
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(09:18):
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Speaker 3 (09:41):
Oh bye, gosh, bye golly, It's time for Missile.
Speaker 5 (09:46):
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Speaker 2 (10:01):
I'm still working on getting Martha Gimble on the line
and hopefully have her shortly, but in the meantime piece
from Bloomberg Opinion, Wall Street is bullish on twenty twenty six.
Assume it's wrong, we just how about we just ignore
it or it's not useful.
Speaker 4 (10:19):
Or just assume that Wall Street is an inanimate object
without feelings would also be helpful. Like I recognize that
Wall Street is comprised of different individuals and market participants
that do have sentiment and humans raised by humans, But
you know Wall Street itself is not and does not
It's an inanimate.
Speaker 3 (10:40):
Either way, like year.
Speaker 2 (10:41):
In price targets are not functionally useful. If I don't
think you should assume it's wrong. Who's useful to we
went through this last week. If you are a short
term trader, year in price targets don't matter to you, right.
If you are a long term investor, you're in price
targets don't matter to you, right, So I just don't
(11:04):
know who's useful.
Speaker 3 (11:04):
Agreed. We're joined now by Martha Gimble.
Speaker 4 (11:06):
She's the executive director and co founder of the Budget
Lab at Yale and joins us now to talk about
what we've seen recently in the labor market and perhaps
what to expect come twenty twenty six.
Speaker 3 (11:16):
Martha, thanks for joining us, appreciated.
Speaker 4 (11:19):
Thank you so much for having me so during our
last segment we were actually talking a bit about this,
and I think the one thing we can definitively say
about the labor market is that the pace of hiring
has very much slowed over the course of the last
three years. But it's not as though it's hit some
sort of wall in, at least in my opinion, It's
just been a steady slowdown in the pace of hiring.
(11:41):
And the question that I guess that raises for me
is what could possibly reverse.
Speaker 3 (11:45):
That slowdown now that we've seen it kick off.
Speaker 6 (11:48):
I mean, this is sort of an unhelpful answer, which
is who knows? You know, presumably, if you know, the
inflation situation becomes steady enough that the federal oversor feels
like they can safely really cut rates, that might help.
But one of the things that we've seen also is
that we are just at it still, even given the
(12:10):
rise a relatively low unemployment rate. And it may also
just be that there aren't that many people around to
hire Martha.
Speaker 3 (12:18):
Is the pal rule still relevant?
Speaker 4 (12:21):
I mean, I mean it broke down last year, the
PSALM rule did not successfully predict a concurrent recession. In
twenty twenty four, we are on the verge of crossing
that threshold, perhaps again with the most recent read on unemployment.
Is it still a useful indicator for us to be
discussing come twenty twenty six?
Speaker 6 (12:41):
I mean, I still like to look at the SOAM role.
I mean, another way to think about the SAM role
is like should we be worried about the labor market?
If you think about why Claudia first developed it, it
was really about turning on automatic stabilizers like unemployment insurance
and things like that. It wasn't so much meant to
be like this is definitively a recession or not a recession.
(13:02):
And so if you think of it as a measure
of should we be worried about the labor market? It
was certainly the case that last year we should have
started to be worried about the labor market. And I
will say, you know, I find it totally plausible that
the some roll is about to trigger, and I am
currently worried about the labor market. So that doesn't mean
we're going into a recession. That doesn't mean all hands
(13:24):
on deck. But should you be itchy a little bit?
Speaker 3 (13:27):
Yeah?
Speaker 4 (13:29):
The government shutdown clearly certainly affected the timing of when
we saw certain statistics on both the labor market and inflation.
In the case of the inflation report from last week,
led to a lot of questions about I guess perhaps
the accuracy of the data itself and the calculation methods.
Do you have any of those types of concerns regarding
(13:49):
the shutdown effects on our reads on the labor market
right now, because we've got an incomplete report for October
and then a November report that well showed some cons
earning signs on the unemployment rate at least.
Speaker 6 (14:03):
Yeah, you know, I am concerned that the shutdown is
still affecting the jobs report. You know, not just from
a timing perspective, they had to start gathering data a
little bit late, but also you still had people kind
of coming back from the shutdown. So just as an example,
the share of workers who were working part time for
economic reasons really jumped, and it jumped in a way
(14:27):
that if it had been a totally clean read, I
would have been really stressed out about. But that's a
number that in the past has tended to jump during shutdowns,
and so I find it very plausible that part of
what we're seeing there is the continued effect of the shutdown,
and the data not to be clear, if we get
a clean read in December and that number, you know,
that number doesn't reverse, then I'm going to start being
(14:50):
really itchy. But you know, frankly, for both the inflation
report and the jobs report, it's still so affected by
the shutdown, I'm not sure how much signal we can
take from them.
Speaker 4 (15:01):
Martha, I don't remember the exact statistic that FED Chair
Powell cited during the last press conference, but he he
throughout the theory that, you know, we're worried that the
BLS maybe over counting the pace of job creation, even
as weak as that job creation has been this year.
Do we have a sense for what the private payroll
data might be telling us on that front.
Speaker 6 (15:22):
So what Chair Powell said that was that he found
it plausible that we were overcounting by about sixty thousand jobs.
What he's referring to there is the fact that the
buer of libor statistics updates its data every year and
benchmarks it against you know, data that comes directly administrative
data as opposed to survey data, and people are expecting
(15:43):
there to be revisions down. So I just I don't
want people to think that there's something wrong with what
BLS is doing. This is like a very standard procedure
that's going on here. You know, the private sector data,
the most reliable ones have been consistent with BLS data,
which is slowing down, still adding jobs, but relatively few.
I think the real question for a lot of US
(16:05):
right now is it is hard to figure out how
many jobs the US really needs to be adding right
now because we've had such big changes in immigration policy,
And when you have big changes in immigration policy in
either direction, it changes how many jobs you need to
add to keep up with population. So I've seen some
estimates from some economists that if we were adding zero
(16:27):
jobs every month, that would actually be enough to keep
up with the population growth. Now, I think that's low,
right because we've still seen an uptick in the unemployment
rate this year. But that's just to say, you know,
if we get to a point where we're adding fifteen
twenty thousand jobs a month, that's not necessarily a worrying
(16:47):
sign for the labor market. We're still kind of trying
to figure out what the right number is for us
right now.
Speaker 3 (16:55):
Martha, the last question here.
Speaker 4 (16:57):
You know, we've got these changing forces' got seeming a
slowing economy, you've got the immigration changes, and then of
course you have the technological boogeyman in AI. What work
is the al Budget Lab doing to study the effects
of AI and labor market? And how can we i
guess track or estimate the impact it's starting to have.
Speaker 6 (17:19):
Yeah, so we've put together a tracker looking at whether
or not jobs that are more exposed to AI, or
have more usage of AI, or just whether the mix
of jobs are changing relatively quickly. We're currently not seeing
any sign that AI is at this moment materially impacting
the labor market. That may sound surprising to people given
(17:42):
how much stirm andtong there is out there about AI.
You have to remember it's still really early days for
this technology. It's barely been three years since chat GIBT
was released. What AI can do today as opposed to
what it can even do six months ago is a
huge jump.
Speaker 7 (18:00):
You know.
Speaker 6 (18:00):
For listeners, just think of your company and how long
it takes for your company to figure out new technology
and to adjust. These are not instantaneous adaptations, and so
it's just going to take time for companies to figure
out what to do with it.
Speaker 4 (18:14):
Martha, thanks so much for joining us. We've got to
run happy holidays. Thanks for joining us this week. That's
Martha Gimble. She's the executive director and co founder of
the Budget Lab at Yale.
Speaker 5 (18:24):
All right, time for trivia here on the Financial Exchange,
and we're going to continue our Christmas movie trivia here
and film studios. I've been releasing movies on Christmas Day
for decades. The highest grossing movie released on Christmas Days
a two thousand and nine film starring Robert Downey Junior
and Jude Law and it made nearly twenty five million
dollars on Christmas Day that year. So trivia question today,
(18:45):
what film was the highest grossing Christmas Day release of
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(19:06):
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Speaker 2 (19:12):
Take a quick break here as we head towards the
bottom of the hour. When we come back a little
bit more on what Netflix might be doing to try. Okay,
we can do Festivus. We'll do Festivus when we come
back after this.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio. Every day,
it's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street. Watch a complete look at
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 5 (19:58):
Market's beginning and holiday a week in positive territory as
investors a wait more economic data points throughout this week,
including durable goods, consumer confidence, and third quarter GDP Right now,
that was up two hundred and fifty six points or
over half a percent higher. SMP five hundred is up
nearly six tenths of a percent, or thirty nine points higher.
(20:20):
NASDAC up over half a percent as well or one
hundred and thirty points. Rustly two thousands up one and
a half percent, Tenure Treasure reeled up one basis point
at four point one sixty three percent, and crude oil
up two percent higher, trading a fifty six dollars and
sixty six cents a barrel. Breaking news from Alphabet this
hour after the Google parent agreed to buy clean energy
(20:41):
developer Intersick Power for four points seventy five billion dollars
in cash. The deal would give Alphabet access to more
power generation for its data centers. Alphabet shares are up
about half a percent. Meanwhile, we have another development in
an ongoing story in the bidding more for Warner Brothers
Discovery Paramount. It is now amended its offer for Warner Brothers,
(21:03):
where Larry Errol Ellison agreed to personally guarantee forty point
four billion dollars of equity financing for the deal. Paramount
shares are.
Speaker 3 (21:11):
Up six percent.
Speaker 5 (21:13):
Elsewhere, workplace products maker Sentas has submitted another offer to
acquire smaller uniform supplier Universe, after nearly four years of
failing to complete a deal. This time, Sentas is bidding
five point two billion dollars centas is up two percent,
while Uniforse shares are rallying eighteen percent, and China's Baidu
(21:34):
is teaming up with ride handling companies Uber and Lyft
to begin trials of self driving vehicles in the UK.
Shares in both Uber and Lyft are up about three percent.
I'm Tucker Silva in that is Wall Street.
Speaker 7 (21:48):
Watch you gave your family around and tell them all
the ways they have disappointed.
Speaker 6 (21:53):
You over the Masnada was born a Festives for arrest us.
Speaker 7 (21:58):
Oh yes, Now with time to air on economic grievances
over the year, I got a lot.
Speaker 3 (22:05):
Of problems when.
Speaker 2 (22:13):
All right, so and gets me every time. Festivals is
so good it is. Festivus officially begins tomorrow. I guess
tonight at twelve oh one am, yep, and uh, just.
Speaker 3 (22:25):
To make sure that we were early. We figured we.
Speaker 2 (22:28):
Would get our economic grievances off our chest because we
got a few problems with the economy.
Speaker 3 (22:37):
Now you're gonna hear about it. Would you like to begin, Michael?
I will.
Speaker 4 (22:41):
This was one of the more entertaining ones, and I'm
gonna I think it's appropriate that we kick off with
an AI related story.
Speaker 3 (22:48):
So, Chuck and Tucker, do you remember Builder dot Ai? No?
Speaker 4 (22:51):
No, no, okay, Well Builder dot Ai had a one
point five billion dollar valuation at one point.
Speaker 3 (22:58):
What were they?
Speaker 4 (22:58):
They were a new startup AI company that allowed you
to build apps using.
Speaker 3 (23:05):
AI at a pretty good price.
Speaker 4 (23:07):
They started off at joining twenty sixteen, started to run
into some concerning issues beginning this year, though, when their
founder was removed as CEO in March, some whistleblowers alleged
that some of the sales figures were maybe a little
bit off. Oh and then there was at least one
tweet alleging that instead of any sort of artificial intelligence systems,
(23:28):
the company was actually just employing seven hundred Indian engineers,
leading to accusations that AI actually stood for actually Indians.
Speaker 3 (23:38):
Which is a funny tweet, but.
Speaker 4 (23:41):
Not a great thing to do to your lenders, shareholders,
and others who were betting on your company.
Speaker 3 (23:49):
So beware of AI companies that don't really have any
meat behind them.
Speaker 2 (23:57):
I said, Anyahi, Yeah, I've got, thank you. I've got
From January of this year, DraftKings. They rolled out a
twenty dollars a month subscription service designed to give you
better odds on parlays. Of course, they're giving you better
odds on parlays because you're already paying them in order
to get them, So you are losing money right off
(24:18):
the bat, before even getting to the point that most
of the time, and Tucker correct me if I'm wrong,
because I don't know nearly enough about sports gambling because
not really my thing. But generally you are much better
off doing all the legs of a parlay as separate bets,
because then you can at least partially win, as opposed
to trying to get that seventeen hundred to one bet
to pay off.
Speaker 3 (24:38):
Yeah. Correct, that is correct.
Speaker 5 (24:39):
If you do a five leg parlay, you hit on
all four and you miss on one, well the entire
bet loses.
Speaker 2 (24:45):
So in any case, DraftKings saying, hey, give us twenty
bucks a month and we'll give you better odds, to
which I say, that's because you're already giving them the money.
Speaker 4 (24:55):
I would like to best miracle focus on our good
friends at Ford Motor Company. Just recently we covered a
piece from The Wall Street Journal about Ford taking a
nineteen and a half billion dollar charge to write down
their ev investment. Quote from the CEO of Ford instead
of plowing billions into the future knowing these large evs
(25:16):
will never make money. We're pivoting for Chief executive Jim
Farley said an interview. We now know enough about the
US market where we have a lot more certainty in
this second inning. How is it that you know so
much more about this US market than you did just
four years ago when you rolled out these plans and
spent billions of dollars on developing your whole EV industry
(25:39):
under pressure from people that just wanted you to be
another Tesla. You were never going to be another Tesla.
This was a massive misstep by not only Jim Farley
and the folks over at Ford. There are plenty of
others who jumped on this bandwagon, but in Ford's case,
it was particularly pronounced and just seems like a massive
misstep and misinterpretation of what their customers we're interested in.
Speaker 3 (26:00):
I got a lot of problems with your people.
Speaker 2 (26:04):
Speaking of another Tesla. The first name of Tesla actually Nicola,
filed for bankruptcy this year after pushing a just this year.
It was February nineteenth of this year, Yes, nearly five
years after pushing a truck down a hill, saying that
it was moving on battery power when it wasn't. Nicola
(26:25):
filed for bankruptcy on February nineteenth of this year. The
company was once valied at thirty billion dollars in public markets,
proving that thirty billion dollars doesn't go quite as far.
Speaker 3 (26:36):
As it used to unless you're gone down hill.
Speaker 4 (26:41):
For us, I've got something to a bone to pick
with Southwest.
Speaker 3 (26:46):
They've betrayed all of their loyal customers this year.
Speaker 4 (26:49):
All of them by basically becoming every other airline out there.
There have been a bunch of activist investors who have
been itching for some changes to occur at Southwest, and
so they have done away with their free bags, they
have done away with their boarding process. And while it
may ultimately be better for the financials of this company,
(27:10):
at least in the short term, it does seem to
me that all they have done is turned Southwest into
another Jet Blue, Delta, American or United. There is now
no differentiation among the major airlines, and anyone who has
tried to differentiate, such as Spirit or others, has found
themselves in bankruptcy.
Speaker 3 (27:30):
Don't know. I want to talk a little bit about
James Howells. Don't know.
Speaker 2 (27:35):
I know that's because he has a hard drive that
has seven hundred million dollars in bitcoin on it that
he accidentally threw out that is currently in a well
landfill in South Wales, and so he's been attempting to
buy the landfill in order to excavate it because he's
been digging around by hand and is yet to be
able to find it. But the key for his seven
(27:59):
hundred million dollar dollars in bitcoin is somewhere in that landfill,
if only.
Speaker 4 (28:04):
How much are you willing to lend this guy? Like,
how do you I'm trying to evaluate the risk on
this one.
Speaker 2 (28:11):
So there is most likely a ninety nine point nine
percent chance that that hard drive is in the landfill.
The only chance that there isn't is that someone else
got wind of this and maybe scooped it first. In theory,
the only other thing that could be a problem here
is if the hard drive is damaged past being able
to be read, which I don't know how you would
(28:33):
accurately price. So my view would be if I had
seven hundred million dollars to lend, I probably would want
someone with the ability to pay twenty to thirty percent
interest on it, because My assumption would be, you better
find that thing in four years. Otherwise I'm getting my
money back one way or another. Yeah, yeah, not a
whole lot to recovery. Fun otherwise, Here, we're gonna take
(28:57):
quick break. Here, quick break, and then we're going to
continue our festivest tradition. Next on the Financial Exchange.
Speaker 1 (29:10):
Here the Financial Exchange every day from eleven to noon
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(29:32):
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Speaker 7 (29:37):
Long.
Speaker 1 (29:38):
Face is the Financial Exchange Radio Network.
Speaker 3 (29:41):
You gavi you family around and tell.
Speaker 6 (29:43):
Them all the ways they have disappointed you over the
best year.
Speaker 3 (29:47):
I know how today was born a festers for the
rest of us.
Speaker 7 (29:51):
Oh yes, now it's time to air are economic reevances
over the year.
Speaker 3 (29:57):
I got a lot of problems. When you'll pay up.
Speaker 5 (29:59):
Before we get back to the boys and their grievances,
let's just pay off trivia. Real quick question was what
film has the highest grossing Christmas Day release of all time?
That would be Surelock Holmes Matton, Harwich, Mass is our
winner today taking on the Financial Exchange Show t shirt
and we play trivia every day here in the Financial
Exchange See complete contest rules at Financial Exchange Show dot com.
Speaker 3 (30:22):
I believe it's my turn for festivals. For it, Michael,
I only have eleven more to do.
Speaker 4 (30:27):
A pharmaceutical company, Ocavea Pharmaceuticals in San Francisco, plans to
introduce a new clinical trial for a GLP one weight
loss drug for dogs cats.
Speaker 3 (30:40):
They want your cats to slenda.
Speaker 4 (30:42):
They're going to inject them with one thousand dollars a
month in jection. I don't know what it costs for cats,
but that's what it costs for people. Maybe it's a
little bit cheaper since it's you don't need the same
dosagell dosage. But yeah, this is going to fix all
of our fat cat problems.
Speaker 2 (30:55):
I want to talk about. Yeah, I want to talk
about the Do you remember the humane an AI pin? No,
you don't remember the humane ai pin.
Speaker 3 (31:04):
This was, Oh is this the thing you wore that
was really bad at its job. Yes, I don't remember
the name, but yes.
Speaker 2 (31:09):
And basically they tried to make it like the next
hot thing in January. By February they had to sell
the thing off and the buyer was HP because I'm
sure they're going to do something great with.
Speaker 3 (31:21):
It based on their history of acquisitions.
Speaker 4 (31:24):
There's plenty of AI problems with your people, plenty of
AI related grievances. A Groc earlier this year, among many
other failures, that it had just a very high hallucination rate.
I don't know how much better it's gotten, but at
one point really went on a pretty deep anti semitism route.
Speaker 3 (31:43):
Its just died that users call it Mecha.
Speaker 4 (31:46):
Hitler hallucinations, which is probably not what you want out
of your generative AI system and was a bit of
an embarrassment for the folks at Groc, although they don't.
Speaker 3 (31:59):
Have fast of us.
Speaker 2 (32:01):
I've got two media related ones here, the first HBO
Max getting renamed again because that's right. You know, you
might as well just keep changing the name of that
thing and maybe you'll finally, you know, find what works.
Also media related, Microsoft earlier this year shut down Skype,
proving that you can pay tens of billions of dollars
(32:22):
for the only video chat platform in existence, and yet
still somehow get out flanked by Zoom several years later
when everyone in the world needs to use video chat.
Speaker 4 (32:31):
Good job Microsoft, a festivus for the rest of US.
Cracker Barrel attempted to change their logo get out of
the Old Man, very poorly. They had to pivot on
that one almost immediately fire some people and bring the
old Man back and not make really any of the
changes that they were planning to do to their decades.
(32:55):
How old is that company?
Speaker 3 (32:56):
Very old? And they tried to pivot their logo and
it went very poorly for the It's a festive Us miracle.
I've got two more AI related items.
Speaker 2 (33:05):
The first on October first, Meta announced Vibes, which was
gonna be an AI only video feed because I sure
know the only thing I want to do with my
time is watch the videos you made of Gerbil skiing.
That sounds like it's gonna be just a blast when
I can do that. And then after that one, I
can watch unicorns drinking tomato soup from a well because
(33:26):
that just is what I need in my life. So
good job, good effort, Meta. And then on October fifteenth,
not to be outdone. Just three months after sam Altman
said no, we're not going to get into erotica because
we don't need to, sam Altman said, yeah, maybe we
can have some more you know, adult themes in AI,
because I definitely want to be sexting with a robot.
Speaker 3 (33:47):
I got a lot of problems with your people. I
actually I would prefer not to a.
Speaker 4 (33:59):
I have a very local and personal to this show
AI story for us to focus on here.
Speaker 3 (34:05):
Just last week, we were covering AI negatively.
Speaker 4 (34:08):
I don't remember the exact context of what we were saying,
but a power surge struck the studio and the whole
studio is just shut down for about thirty seconds while
we were live on air Friday criticizing AI. It was Friday, Yeah,
time is moving here. The only other thing we noticed
was that the Christmas tree lights in our in our
lobby went out at the same time. But I don't know.
(34:29):
All signs seemed to point to assentient AI listening to
what we are saying on Blive air and shutting us down.
Speaker 3 (34:36):
I'm still that Yeah, yeah, bizarre. It's only the great
job Gemen. I love your work. Let's see.
Speaker 2 (34:44):
Last week, also, prosecutors charged Tricolor founder and CEO Daniel
Chew and chief operating officer Daniel good Game Daniel good
Game Daniel good Game with a series of nudulent schemes
that led Tricolor to obtain billions of dollars from lenards
and investors by misrepresenting the value of its loan collateral.
(35:07):
Apparently they were pledging the same vehicles in multiple tranches
of loans, which last time I checked, is illegal, and
so they've been charged as such in one of the uh,
just kind of wildest credit stories that we've seen in
a while.
Speaker 4 (35:29):
For the rest of us, I don't really consider this
much of a grievance personally, but I didn't feel like
we could recap twenty twenty five without bringing up the
astronomer kiss cam at.
Speaker 3 (35:38):
The Coldplay concert.
Speaker 4 (35:41):
I'm sure that the families of those do not find
this as funny as I do, But yeah, you cannot
have a festivus without the company astronomer and a couple
of their executives who are both married to people that
are not each other getting caught on the Cold Place
kiss cam Jillette Stadium.
Speaker 3 (36:02):
I've got one more.
Speaker 2 (36:05):
I've got one more here, This from March twenty first,
in a sign of just how bad the economy is
for a lot of people, door Dash partnering with Karna
to allow you to pay for your Chipotle burrito.
Speaker 3 (36:17):
In four increments. Not good.
Speaker 2 (36:20):
Not a great sign for the economy when you've got
to be putting burritos on layaway. I'm just wondering when
we start seeing burrito backed securities showing up, you know
something that investors might be able to purchase.
Speaker 4 (36:35):
Any others from you, Michael, My last one, I'm gonna
go after the New York Times here for their worst
clickbait of the year. Their article is a global housing
bubble about to burst clickbait of the year because the
sub headline is it's unlikely ac course to a report
by the Swiss Bank UBS, but some markets are more
vulnerable than others.
Speaker 3 (36:53):
Thank you New York Times for the clickbait of the year. Okay,
so now that we've gotten that out of the way,
that's cathartic. I feel better.
Speaker 2 (37:07):
It was it was, and don't worry if you didn't
like that. We'll do better next year, we promise. Let's
see heading towards the top of the hour. Taking a
look at markets here, the Dow Jones Industrial Average is
up two hundred and thirty nine points about half percent,
SP five hundred and forty one points point six percent.
(37:28):
NASDAK Composite is up one hundred and thirty seven points
about point six percent as well, So all three major
US indices are.
Speaker 3 (37:35):
In the green.
Speaker 2 (37:36):
Cute little Russell two thousand hopping along too. It's up
one point seven percent today, and so even those little
small caps are getting into it, saying, hey, we want
a party two to end the year. You know, Santa,
don't forget us and leave us behind, because.
Speaker 3 (37:51):
Well we're We're here too.
Speaker 4 (37:53):
And if you thought it was gonna be a quiet week,
I've got some good news for tomorrow's show, Alphabet announcing
that they are making a major four and three quarter
billion dollar acquisition in the AI space. Oh good, little
fun stuff to chat about tomorrow on the Financial Exchange.
Speaker 3 (38:07):
We're done for the day. Hope you all have a
great rest of the day.
Speaker 2 (38:10):
If you're traveling, hope you get where you're going safely,
and we'll be back with you tomorrow on the show.
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(01:06):
Zada and Mike Armstrong, Chuck.
Speaker 2 (01:11):
Mike and Tucker with you here, and in a holiday
shortened trading week, we do have things off to a
good start in equity markets. The S and P five
hundred up thirty four points about half a percent, the
Dow Jones Industrial average up two hundred and twenty five
points about half a percent, and the nasdak can possit
up one hundred and fourteen points about half a percent,
(01:32):
So a nice little half percent rally taking place throughout
equity markets today. Tenure US Treasury selling off very, very modestly,
just a wee little bit, down one point six basis
points to four point one six seven percent. We've got
the dollar index down point three three percent to ninety
seven point nine to two five. Gold continuing another rally
(01:56):
that has been taking place over the last couple of weeks,
up eighty two dollars an ounce to forty four sixty
nine and ninety cents. That is another new all time
high today, first all time high that we've had on
gold in about a month and a half, maybe two months.
And we've also got crude oil up a dollar fifteen
a barrel about two percent to fifty seven sixty seven
(02:17):
on West Texts Intermediate triple A National Averagur gas prices
sliding three tenths of ascent to two eighty five and
five tenths at the moment. Piece in the Wall Street
Journal the year the job market hit a Wall. I
got a problem with the headline before we even get
to the piece. Job market didn't hit a wall. When
(02:38):
I hear hitting a wall, I hear okay, like there
was a real problem, and like you saw it in
the job statistics. We've been seeing just a gradual cooling
in the job market since twenty twenty second half of
twenty two, so about three and a half years.
Speaker 3 (02:54):
Yeah, wall would imply suddenness.
Speaker 2 (02:56):
Something right, like you hit a wall and like things
suddenly got worse. This is has been a steady linear
degradation in the job market for three and a half years.
That now has gotten us to the point where we
have had some negative monthly job prints, but they didn't
come out of nowhere because we've been on this path
and we just have not moved from that path in
the last three and a half years.
Speaker 3 (03:16):
Fair wrong analogy.
Speaker 4 (03:17):
Job creation has been weak though in twenty twenty five
and yours been more of a steady decline. I don't
know what to expect for twenty twenty six other than
it's really tough to see these trends reversing, right, I mean,
if you take a look at the last I don't
have the stat right on me, but the average job
(03:39):
creation pace for the last three years, and it has
declined pretty much linearly. And so why would you see that,
you speak, why would you see that reverse? I really
have a tough time envisioning it in the absence of
a big, substantial turnaround in and I think, I guess
(04:02):
some fantastic thing related to AI or government policy, and
I don't think government policy changes unless.
Speaker 3 (04:08):
You do hit that wall.
Speaker 4 (04:10):
Where again, if the if the employment picture hits a wall,
what that means is that the pace of layoffs and
the unemployment rate increases in the course of a year substantially.
We're talking, you know, three quarters of a percentage point.
That to me is the economy and the labor market
hitting a wall. And we're just we're not there. I mean, yes,
(04:32):
we saw an increase in the unemployment rate, but it's
been you know, a little bit more than half percent,
and it took most of the year to get there.
Speaker 2 (04:39):
This year, on average, we have seen fifty five thousand
and four hundred and fifty jobs added on a monthly basis.
Speaker 3 (04:46):
Okay, that's cord to the BLS data that we have.
Speaker 2 (04:49):
If we go and take a look last year, last
year we saw one hundred and sixty seven thousand jobs
added on a monthly basis. If we go and look
at twenty twenty three, we saw two hundred and nineteen
thousand jobs added on a monthly basis. If we go
and look at twenty twenty two, we had three hundred
and seventy seven thousand jobs added on a monthly state line.
(05:12):
It's just been a consistent move down over that period.
And the question that you have to ask about labor
remember like historically and this is all we have to
go on because none of us have been to the future. Man,
we haven't say it that way. I know, we just
haven't been there. Historically, consumption leads employment. If you look
(05:41):
at the labor market through that lens, what is going
to improve consumption next year in the United States?
Speaker 3 (05:51):
Tax refunds. That's that's one option YEP. Number two.
Speaker 2 (05:56):
Other big beautiful bill provisions for improving corporate consumption capex yep,
you know, is there gonna be more of that? Those
are you two potential mechanisms for improvement on that side.
When you look at the ways that consumption could worsen again,
you get a couple of them. Number one is further
(06:18):
weakening in the labor market in housing particular, like housing
housing weakness leading to layoffs in construction and in fewer
hours in construction, less consumption. The other one, and this
is look, this is backwards admittedly because this isn't normally how.
Speaker 3 (06:34):
It works well the fact reversal.
Speaker 2 (06:37):
No, I wasn't gonna go there. I was going with,
does the labor market's weakening in and of itself lead
to less consumption? Combination of people saying, hey, I'm less
stable in my job, I'm not going to buy as much.
Speaker 3 (06:53):
I don't buy that because we never see that.
Speaker 4 (06:54):
The more likely one is something in something in equity
markets getting a and that piece leading to lower consumption.
Speaker 2 (07:03):
I was going to go just towards Look, even in
the labor market, aggregate payroll growth slowing, that allows for
fewer dollars to be spent. That then, you know, kind
of triggers a cycle we've never seen it before. But Michael,
if you had a tape of all of the times
I've said in the last six years, we've never seen
this before.
Speaker 3 (07:23):
Yeah, and it happened. We could fill an entire show.
Speaker 2 (07:27):
Yeah, which would be fun, not for listeners but for us.
Speaker 4 (07:33):
There have been a lot of firsts over the course
of the last five years, and so far be it
from me to doubt anything, but I mean to me,
we've talked a lot about the concentration of spending amongst
the wealthy, and so if you get a reversal of
that wealth effect, either from real estate depreciating seems unlikely
to me or equity markets devaluing, I think that those
(07:54):
could be enough to send us into that other direction.
But again the reverse is also equity markets hold up
and big tax refunds come.
Speaker 3 (08:04):
Yeah, I could keep correct.
Speaker 2 (08:06):
These are kind of what you're looking for next year.
So we don't know how they're going to play out,
but it's pretty much housing in labor weakness on one side,
you've got tax refunds and further capex expansion on the other,
and then you've got ais this wild card that could
(08:27):
go either way.
Speaker 3 (08:28):
Wild card wheat. I gotta be honest.
Speaker 2 (08:33):
I was playing games with my kids over the weekend
and one one of them involved wild cards, and I
kept doing.
Speaker 3 (08:38):
That and they were like, Daddy, why do you stop?
Why do you keep saying it like that. I'm like, because, Charlie,
day you'll you'll understand. One day you will.
Speaker 2 (08:47):
Let's take a quick break. When we come back. We're
joined by Martha Gimble. She's the executive director and co
founder of the Budget Lab at Yale, and she's gonna
give us a little more information on what's going on
with the labor market.
Speaker 1 (08:58):
Next text us X one, seven, three, six, two, thirteen
eighty five with your comments and questions about today's show,
and let us know what you think about the stories
we are covering. This is the Financial Exchange Radio Network.
The Financial Exchange is now available every day from eleven
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(09:18):
Stay informed about the latest from Wall Street, fiscal policy,
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This is the Financial Exchange Radio Network.
Speaker 3 (09:41):
Oh bye, gosh, bye golly, It's time for Missile.
Speaker 5 (09:46):
This segment of the Financial Exchange is powered by circle
K Convenience Stores. Circle K is now the official convenience
store of the dav Department of Massachusetts on behalf of
circle K. Thank you veterans for all you us.
Speaker 2 (10:01):
I'm still working on getting Martha Gimble on the line
and hopefully have her shortly, but in the meantime piece
from Bloomberg Opinion, Wall Street is bullish on twenty twenty six.
Assume it's wrong, we just how about we just ignore
it or it's not useful.
Speaker 4 (10:19):
Or just assume that Wall Street is an inanimate object
without feelings would also be helpful. Like I recognize that
Wall Street is comprised of different individuals and market participants
that do have sentiment and humans raised by humans, But
you know Wall Street itself is not and does not
It's an inanimate.
Speaker 3 (10:40):
Either way, like year.
Speaker 2 (10:41):
In price targets are not functionally useful. If I don't
think you should assume it's wrong. Who's useful to we
went through this last week. If you are a short
term trader, year in price targets don't matter to you, right.
If you are a long term investor, you're in price
targets don't matter to you, right, So I just don't
(11:04):
know who's useful.
Speaker 3 (11:04):
Agreed. We're joined now by Martha Gimble.
Speaker 4 (11:06):
She's the executive director and co founder of the Budget
Lab at Yale and joins us now to talk about
what we've seen recently in the labor market and perhaps
what to expect come twenty twenty six.
Speaker 3 (11:16):
Martha, thanks for joining us, appreciated.
Speaker 4 (11:19):
Thank you so much for having me so during our
last segment we were actually talking a bit about this,
and I think the one thing we can definitively say
about the labor market is that the pace of hiring
has very much slowed over the course of the last
three years. But it's not as though it's hit some
sort of wall in, at least in my opinion, It's
just been a steady slowdown in the pace of hiring.
(11:41):
And the question that I guess that raises for me
is what could possibly reverse.
Speaker 3 (11:45):
That slowdown now that we've seen it kick off.
Speaker 6 (11:48):
I mean, this is sort of an unhelpful answer, which
is who knows? You know, presumably, if you know, the
inflation situation becomes steady enough that the federal oversor feels
like they can safely really cut rates, that might help.
But one of the things that we've seen also is
that we are just at it still, even given the
(12:10):
rise a relatively low unemployment rate. And it may also
just be that there aren't that many people around to
hire Martha.
Speaker 3 (12:18):
Is the pal rule still relevant?
Speaker 4 (12:21):
I mean, I mean it broke down last year, the
PSALM rule did not successfully predict a concurrent recession. In
twenty twenty four, we are on the verge of crossing
that threshold, perhaps again with the most recent read on unemployment.
Is it still a useful indicator for us to be
discussing come twenty twenty six?
Speaker 6 (12:41):
I mean, I still like to look at the SOAM role.
I mean, another way to think about the SAM role
is like should we be worried about the labor market?
If you think about why Claudia first developed it, it
was really about turning on automatic stabilizers like unemployment insurance
and things like that. It wasn't so much meant to
be like this is definitively a recession or not a recession.
(13:02):
And so if you think of it as a measure
of should we be worried about the labor market? It
was certainly the case that last year we should have
started to be worried about the labor market. And I
will say, you know, I find it totally plausible that
the some roll is about to trigger, and I am
currently worried about the labor market. So that doesn't mean
we're going into a recession. That doesn't mean all hands
(13:24):
on deck. But should you be itchy a little bit?
Speaker 3 (13:27):
Yeah?
Speaker 4 (13:29):
The government shutdown clearly certainly affected the timing of when
we saw certain statistics on both the labor market and inflation.
In the case of the inflation report from last week,
led to a lot of questions about I guess perhaps
the accuracy of the data itself and the calculation methods.
Do you have any of those types of concerns regarding
(13:49):
the shutdown effects on our reads on the labor market
right now, because we've got an incomplete report for October
and then a November report that well showed some cons
earning signs on the unemployment rate at least.
Speaker 6 (14:03):
Yeah, you know, I am concerned that the shutdown is
still affecting the jobs report. You know, not just from
a timing perspective, they had to start gathering data a
little bit late, but also you still had people kind
of coming back from the shutdown. So just as an example,
the share of workers who were working part time for
economic reasons really jumped, and it jumped in a way
(14:27):
that if it had been a totally clean read, I
would have been really stressed out about. But that's a
number that in the past has tended to jump during shutdowns,
and so I find it very plausible that part of
what we're seeing there is the continued effect of the shutdown,
and the data not to be clear, if we get
a clean read in December and that number, you know,
that number doesn't reverse, then I'm going to start being
(14:50):
really itchy. But you know, frankly, for both the inflation
report and the jobs report, it's still so affected by
the shutdown, I'm not sure how much signal we can
take from them.
Speaker 4 (15:01):
Martha, I don't remember the exact statistic that FED Chair
Powell cited during the last press conference, but he he
throughout the theory that, you know, we're worried that the
BLS maybe over counting the pace of job creation, even
as weak as that job creation has been this year.
Do we have a sense for what the private payroll
data might be telling us on that front.
Speaker 6 (15:22):
So what Chair Powell said that was that he found
it plausible that we were overcounting by about sixty thousand jobs.
What he's referring to there is the fact that the
buer of libor statistics updates its data every year and
benchmarks it against you know, data that comes directly administrative
data as opposed to survey data, and people are expecting
(15:43):
there to be revisions down. So I just I don't
want people to think that there's something wrong with what
BLS is doing. This is like a very standard procedure
that's going on here. You know, the private sector data,
the most reliable ones have been consistent with BLS data,
which is slowing down, still adding jobs, but relatively few.
I think the real question for a lot of US
(16:05):
right now is it is hard to figure out how
many jobs the US really needs to be adding right
now because we've had such big changes in immigration policy,
And when you have big changes in immigration policy in
either direction, it changes how many jobs you need to
add to keep up with population. So I've seen some
estimates from some economists that if we were adding zero
(16:27):
jobs every month, that would actually be enough to keep
up with the population growth. Now, I think that's low,
right because we've still seen an uptick in the unemployment
rate this year. But that's just to say, you know,
if we get to a point where we're adding fifteen
twenty thousand jobs a month, that's not necessarily a worrying
(16:47):
sign for the labor market. We're still kind of trying
to figure out what the right number is for us
right now.
Speaker 3 (16:55):
Martha, the last question here.
Speaker 4 (16:57):
You know, we've got these changing forces' got seeming a
slowing economy, you've got the immigration changes, and then of
course you have the technological boogeyman in AI. What work
is the al Budget Lab doing to study the effects
of AI and labor market? And how can we i
guess track or estimate the impact it's starting to have.
Speaker 6 (17:19):
Yeah, so we've put together a tracker looking at whether
or not jobs that are more exposed to AI, or
have more usage of AI, or just whether the mix
of jobs are changing relatively quickly. We're currently not seeing
any sign that AI is at this moment materially impacting
the labor market. That may sound surprising to people given
(17:42):
how much stirm andtong there is out there about AI.
You have to remember it's still really early days for
this technology. It's barely been three years since chat GIBT
was released. What AI can do today as opposed to
what it can even do six months ago is a
huge jump.
Speaker 7 (18:00):
You know.
Speaker 6 (18:00):
For listeners, just think of your company and how long
it takes for your company to figure out new technology
and to adjust. These are not instantaneous adaptations, and so
it's just going to take time for companies to figure
out what to do with it.
Speaker 4 (18:14):
Martha, thanks so much for joining us. We've got to
run happy holidays. Thanks for joining us this week. That's
Martha Gimble. She's the executive director and co founder of
the Budget Lab at Yale.
Speaker 5 (18:24):
All right, time for trivia here on the Financial Exchange,
and we're going to continue our Christmas movie trivia here
and film studios. I've been releasing movies on Christmas Day
for decades. The highest grossing movie released on Christmas Days
a two thousand and nine film starring Robert Downey Junior
and Jude Law and it made nearly twenty five million
dollars on Christmas Day that year. So trivia question today,
(18:45):
what film was the highest grossing Christmas Day release of
all time? Be the fifth person today to text us
at six one, seven, three, six, two thirteen eighty five
along with the keyword trivia, and you win a Financial
Exchange Show T shirt. Once again, the fifth correct response
to textas to the number six one, seven, three, six
two thirteen eighty five with the correct answer along with
(19:06):
the keyword trivia, we'll win that T shirt. See complete
contest rules at Financial Exchange Show dot com.
Speaker 2 (19:12):
Take a quick break here as we head towards the
bottom of the hour. When we come back a little
bit more on what Netflix might be doing to try. Okay,
we can do Festivus. We'll do Festivus when we come
back after this.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio. Every day,
it's the Financial Exchange on the Financial Exchange Radio Network.
Time now for Wall Street. Watch a complete look at
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 5 (19:58):
Market's beginning and holiday a week in positive territory as
investors a wait more economic data points throughout this week,
including durable goods, consumer confidence, and third quarter GDP Right now,
that was up two hundred and fifty six points or
over half a percent higher. SMP five hundred is up
nearly six tenths of a percent, or thirty nine points higher.
(20:20):
NASDAC up over half a percent as well or one
hundred and thirty points. Rustly two thousands up one and
a half percent, Tenure Treasure reeled up one basis point
at four point one sixty three percent, and crude oil
up two percent higher, trading a fifty six dollars and
sixty six cents a barrel. Breaking news from Alphabet this
hour after the Google parent agreed to buy clean energy
(20:41):
developer Intersick Power for four points seventy five billion dollars
in cash. The deal would give Alphabet access to more
power generation for its data centers. Alphabet shares are up
about half a percent. Meanwhile, we have another development in
an ongoing story in the bidding more for Warner Brothers
Discovery Paramount. It is now amended its offer for Warner Brothers,
(21:03):
where Larry Errol Ellison agreed to personally guarantee forty point
four billion dollars of equity financing for the deal. Paramount
shares are.
Speaker 3 (21:11):
Up six percent.
Speaker 5 (21:13):
Elsewhere, workplace products maker Sentas has submitted another offer to
acquire smaller uniform supplier Universe, after nearly four years of
failing to complete a deal. This time, Sentas is bidding
five point two billion dollars centas is up two percent,
while Uniforse shares are rallying eighteen percent, and China's Baidu
(21:34):
is teaming up with ride handling companies Uber and Lyft
to begin trials of self driving vehicles in the UK.
Shares in both Uber and Lyft are up about three percent.
I'm Tucker Silva in that is Wall Street.
Speaker 7 (21:48):
Watch you gave your family around and tell them all
the ways they have disappointed.
Speaker 6 (21:53):
You over the Masnada was born a Festives for arrest us.
Speaker 7 (21:58):
Oh yes, Now with time to air on economic grievances
over the year, I got a lot.
Speaker 3 (22:05):
Of problems when.
Speaker 2 (22:13):
All right, so and gets me every time. Festivals is
so good it is. Festivus officially begins tomorrow. I guess
tonight at twelve oh one am, yep, and uh, just.
Speaker 3 (22:25):
To make sure that we were early. We figured we.
Speaker 2 (22:28):
Would get our economic grievances off our chest because we
got a few problems with the economy.
Speaker 3 (22:37):
Now you're gonna hear about it. Would you like to begin, Michael?
I will.
Speaker 4 (22:41):
This was one of the more entertaining ones, and I'm
gonna I think it's appropriate that we kick off with
an AI related story.
Speaker 3 (22:48):
So, Chuck and Tucker, do you remember Builder dot Ai? No?
Speaker 4 (22:51):
No, no, okay, Well Builder dot Ai had a one
point five billion dollar valuation at one point.
Speaker 3 (22:58):
What were they?
Speaker 4 (22:58):
They were a new startup AI company that allowed you
to build apps using.
Speaker 3 (23:05):
AI at a pretty good price.
Speaker 4 (23:07):
They started off at joining twenty sixteen, started to run
into some concerning issues beginning this year, though, when their
founder was removed as CEO in March, some whistleblowers alleged
that some of the sales figures were maybe a little
bit off. Oh and then there was at least one
tweet alleging that instead of any sort of artificial intelligence systems,
(23:28):
the company was actually just employing seven hundred Indian engineers,
leading to accusations that AI actually stood for actually Indians.
Speaker 3 (23:38):
Which is a funny tweet, but.
Speaker 4 (23:41):
Not a great thing to do to your lenders, shareholders,
and others who were betting on your company.
Speaker 3 (23:49):
So beware of AI companies that don't really have any
meat behind them.
Speaker 2 (23:57):
I said, Anyahi, Yeah, I've got, thank you. I've got
From January of this year, DraftKings. They rolled out a
twenty dollars a month subscription service designed to give you
better odds on parlays. Of course, they're giving you better
odds on parlays because you're already paying them in order
to get them, So you are losing money right off
(24:18):
the bat, before even getting to the point that most
of the time, and Tucker correct me if I'm wrong,
because I don't know nearly enough about sports gambling because
not really my thing. But generally you are much better
off doing all the legs of a parlay as separate bets,
because then you can at least partially win, as opposed
to trying to get that seventeen hundred to one bet
to pay off.
Speaker 3 (24:38):
Yeah. Correct, that is correct.
Speaker 5 (24:39):
If you do a five leg parlay, you hit on
all four and you miss on one, well the entire
bet loses.
Speaker 2 (24:45):
So in any case, DraftKings saying, hey, give us twenty
bucks a month and we'll give you better odds, to
which I say, that's because you're already giving them the money.
Speaker 4 (24:55):
I would like to best miracle focus on our good
friends at Ford Motor Company. Just recently we covered a
piece from The Wall Street Journal about Ford taking a
nineteen and a half billion dollar charge to write down
their ev investment. Quote from the CEO of Ford instead
of plowing billions into the future knowing these large evs
(25:16):
will never make money. We're pivoting for Chief executive Jim
Farley said an interview. We now know enough about the
US market where we have a lot more certainty in
this second inning. How is it that you know so
much more about this US market than you did just
four years ago when you rolled out these plans and
spent billions of dollars on developing your whole EV industry
(25:39):
under pressure from people that just wanted you to be
another Tesla. You were never going to be another Tesla.
This was a massive misstep by not only Jim Farley
and the folks over at Ford. There are plenty of
others who jumped on this bandwagon, but in Ford's case,
it was particularly pronounced and just seems like a massive
misstep and misinterpretation of what their customers we're interested in.
Speaker 3 (26:00):
I got a lot of problems with your people.
Speaker 2 (26:04):
Speaking of another Tesla. The first name of Tesla actually Nicola,
filed for bankruptcy this year after pushing a just this year.
It was February nineteenth of this year, Yes, nearly five
years after pushing a truck down a hill, saying that
it was moving on battery power when it wasn't. Nicola
(26:25):
filed for bankruptcy on February nineteenth of this year. The
company was once valied at thirty billion dollars in public markets,
proving that thirty billion dollars doesn't go quite as far.
Speaker 3 (26:36):
As it used to unless you're gone down hill.
Speaker 4 (26:41):
For us, I've got something to a bone to pick
with Southwest.
Speaker 3 (26:46):
They've betrayed all of their loyal customers this year.
Speaker 4 (26:49):
All of them by basically becoming every other airline out there.
There have been a bunch of activist investors who have
been itching for some changes to occur at Southwest, and
so they have done away with their free bags, they
have done away with their boarding process. And while it
may ultimately be better for the financials of this company,
(27:10):
at least in the short term, it does seem to
me that all they have done is turned Southwest into
another Jet Blue, Delta, American or United. There is now
no differentiation among the major airlines, and anyone who has
tried to differentiate, such as Spirit or others, has found
themselves in bankruptcy.
Speaker 3 (27:30):
Don't know. I want to talk a little bit about
James Howells. Don't know.
Speaker 2 (27:35):
I know that's because he has a hard drive that
has seven hundred million dollars in bitcoin on it that
he accidentally threw out that is currently in a well
landfill in South Wales, and so he's been attempting to
buy the landfill in order to excavate it because he's
been digging around by hand and is yet to be
able to find it. But the key for his seven
(27:59):
hundred million dollar dollars in bitcoin is somewhere in that landfill,
if only.
Speaker 4 (28:04):
How much are you willing to lend this guy? Like,
how do you I'm trying to evaluate the risk on
this one.
Speaker 2 (28:11):
So there is most likely a ninety nine point nine
percent chance that that hard drive is in the landfill.
The only chance that there isn't is that someone else
got wind of this and maybe scooped it first. In theory,
the only other thing that could be a problem here
is if the hard drive is damaged past being able
to be read, which I don't know how you would
(28:33):
accurately price. So my view would be if I had
seven hundred million dollars to lend, I probably would want
someone with the ability to pay twenty to thirty percent
interest on it, because My assumption would be, you better
find that thing in four years. Otherwise I'm getting my
money back one way or another. Yeah, yeah, not a
whole lot to recovery. Fun otherwise, Here, we're gonna take
(28:57):
quick break. Here, quick break, and then we're going to
continue our festivest tradition. Next on the Financial Exchange.
Speaker 1 (29:10):
Here the Financial Exchange every day from eleven to noon
Non Serious XM's Business radio Channel one thirty two. Keep
it here for the latest business and financial news and
the trends on Wall Street. The Financial Exchange is now
life on Serious XM's Business Radio channel one thirty two.
Faces the Financial Exchange Radio Network. The Financial Exchange streams
(29:32):
live on YouTube. Subscribe to our page and stay up
to date on breaking business news all morning.
Speaker 7 (29:37):
Long.
Speaker 1 (29:38):
Face is the Financial Exchange Radio Network.
Speaker 3 (29:41):
You gavi you family around and tell.
Speaker 6 (29:43):
Them all the ways they have disappointed you over the
best year.
Speaker 3 (29:47):
I know how today was born a festers for the
rest of us.
Speaker 7 (29:51):
Oh yes, now it's time to air are economic reevances
over the year.
Speaker 3 (29:57):
I got a lot of problems. When you'll pay up.
Speaker 5 (29:59):
Before we get back to the boys and their grievances,
let's just pay off trivia. Real quick question was what
film has the highest grossing Christmas Day release of all time?
That would be Surelock Holmes Matton, Harwich, Mass is our
winner today taking on the Financial Exchange Show t shirt
and we play trivia every day here in the Financial
Exchange See complete contest rules at Financial Exchange Show dot com.
Speaker 3 (30:22):
I believe it's my turn for festivals. For it, Michael,
I only have eleven more to do.
Speaker 4 (30:27):
A pharmaceutical company, Ocavea Pharmaceuticals in San Francisco, plans to
introduce a new clinical trial for a GLP one weight
loss drug for dogs cats.
Speaker 3 (30:40):
They want your cats to slenda.
Speaker 4 (30:42):
They're going to inject them with one thousand dollars a
month in jection. I don't know what it costs for cats,
but that's what it costs for people. Maybe it's a
little bit cheaper since it's you don't need the same
dosagell dosage. But yeah, this is going to fix all
of our fat cat problems.
Speaker 2 (30:55):
I want to talk about. Yeah, I want to talk
about the Do you remember the humane an AI pin? No,
you don't remember the humane ai pin.
Speaker 3 (31:04):
This was, Oh is this the thing you wore that
was really bad at its job. Yes, I don't remember
the name, but yes.
Speaker 2 (31:09):
And basically they tried to make it like the next
hot thing in January. By February they had to sell
the thing off and the buyer was HP because I'm
sure they're going to do something great with.
Speaker 3 (31:21):
It based on their history of acquisitions.
Speaker 4 (31:24):
There's plenty of AI problems with your people, plenty of
AI related grievances. A Groc earlier this year, among many
other failures, that it had just a very high hallucination rate.
I don't know how much better it's gotten, but at
one point really went on a pretty deep anti semitism route.
Speaker 3 (31:43):
Its just died that users call it Mecha.
Speaker 4 (31:46):
Hitler hallucinations, which is probably not what you want out
of your generative AI system and was a bit of
an embarrassment for the folks at Groc, although they don't.
Speaker 3 (31:59):
Have fast of us.
Speaker 2 (32:01):
I've got two media related ones here, the first HBO
Max getting renamed again because that's right. You know, you
might as well just keep changing the name of that
thing and maybe you'll finally, you know, find what works.
Also media related, Microsoft earlier this year shut down Skype,
proving that you can pay tens of billions of dollars
(32:22):
for the only video chat platform in existence, and yet
still somehow get out flanked by Zoom several years later
when everyone in the world needs to use video chat.
Speaker 4 (32:31):
Good job Microsoft, a festivus for the rest of US.
Cracker Barrel attempted to change their logo get out of
the Old Man, very poorly. They had to pivot on
that one almost immediately fire some people and bring the
old Man back and not make really any of the
changes that they were planning to do to their decades.
(32:55):
How old is that company?
Speaker 3 (32:56):
Very old? And they tried to pivot their logo and
it went very poorly for the It's a festive Us miracle.
I've got two more AI related items.
Speaker 2 (33:05):
The first on October first, Meta announced Vibes, which was
gonna be an AI only video feed because I sure
know the only thing I want to do with my
time is watch the videos you made of Gerbil skiing.
That sounds like it's gonna be just a blast when
I can do that. And then after that one, I
can watch unicorns drinking tomato soup from a well because
(33:26):
that just is what I need in my life. So
good job, good effort, Meta. And then on October fifteenth,
not to be outdone. Just three months after sam Altman
said no, we're not going to get into erotica because
we don't need to, sam Altman said, yeah, maybe we
can have some more you know, adult themes in AI,
because I definitely want to be sexting with a robot.
Speaker 3 (33:47):
I got a lot of problems with your people. I
actually I would prefer not to a.
Speaker 4 (33:59):
I have a very local and personal to this show
AI story for us to focus on here.
Speaker 3 (34:05):
Just last week, we were covering AI negatively.
Speaker 4 (34:08):
I don't remember the exact context of what we were saying,
but a power surge struck the studio and the whole
studio is just shut down for about thirty seconds while
we were live on air Friday criticizing AI. It was Friday, Yeah,
time is moving here. The only other thing we noticed
was that the Christmas tree lights in our in our
lobby went out at the same time. But I don't know.
(34:29):
All signs seemed to point to assentient AI listening to
what we are saying on Blive air and shutting us down.
Speaker 3 (34:36):
I'm still that Yeah, yeah, bizarre. It's only the great
job Gemen. I love your work. Let's see.
Speaker 2 (34:44):
Last week, also, prosecutors charged Tricolor founder and CEO Daniel
Chew and chief operating officer Daniel good Game Daniel good
Game Daniel good Game with a series of nudulent schemes
that led Tricolor to obtain billions of dollars from lenards
and investors by misrepresenting the value of its loan collateral.
(35:07):
Apparently they were pledging the same vehicles in multiple tranches
of loans, which last time I checked, is illegal, and
so they've been charged as such in one of the uh,
just kind of wildest credit stories that we've seen in
a while.
Speaker 4 (35:29):
For the rest of us, I don't really consider this
much of a grievance personally, but I didn't feel like
we could recap twenty twenty five without bringing up the
astronomer kiss cam at.
Speaker 3 (35:38):
The Coldplay concert.
Speaker 4 (35:41):
I'm sure that the families of those do not find
this as funny as I do, But yeah, you cannot
have a festivus without the company astronomer and a couple
of their executives who are both married to people that
are not each other getting caught on the Cold Place
kiss cam Jillette Stadium.
Speaker 3 (36:02):
I've got one more.
Speaker 2 (36:05):
I've got one more here, This from March twenty first,
in a sign of just how bad the economy is
for a lot of people, door Dash partnering with Karna
to allow you to pay for your Chipotle burrito.
Speaker 3 (36:17):
In four increments. Not good.
Speaker 2 (36:20):
Not a great sign for the economy when you've got
to be putting burritos on layaway. I'm just wondering when
we start seeing burrito backed securities showing up, you know
something that investors might be able to purchase.
Speaker 4 (36:35):
Any others from you, Michael, My last one, I'm gonna
go after the New York Times here for their worst
clickbait of the year. Their article is a global housing
bubble about to burst clickbait of the year because the
sub headline is it's unlikely ac course to a report
by the Swiss Bank UBS, but some markets are more
vulnerable than others.
Speaker 3 (36:53):
Thank you New York Times for the clickbait of the year. Okay,
so now that we've gotten that out of the way,
that's cathartic. I feel better.
Speaker 2 (37:07):
It was it was, and don't worry if you didn't
like that. We'll do better next year, we promise. Let's
see heading towards the top of the hour. Taking a
look at markets here, the Dow Jones Industrial Average is
up two hundred and thirty nine points about half percent,
SP five hundred and forty one points point six percent.
(37:28):
NASDAK Composite is up one hundred and thirty seven points
about point six percent as well, So all three major
US indices are.
Speaker 3 (37:35):
In the green.
Speaker 2 (37:36):
Cute little Russell two thousand hopping along too. It's up
one point seven percent today, and so even those little
small caps are getting into it, saying, hey, we want
a party two to end the year. You know, Santa,
don't forget us and leave us behind, because.
Speaker 3 (37:51):
Well we're We're here too.
Speaker 4 (37:53):
And if you thought it was gonna be a quiet week,
I've got some good news for tomorrow's show, Alphabet announcing
that they are making a major four and three quarter
billion dollar acquisition in the AI space. Oh good, little
fun stuff to chat about tomorrow on the Financial Exchange.
Speaker 3 (38:07):
We're done for the day. Hope you all have a
great rest of the day.
Speaker 2 (38:10):
If you're traveling, hope you get where you're going safely,
and we'll be back with you tomorrow on the show.
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