October 9, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss the ongoing government shutdown and how air travel disruptions are adding pressure. AI can transform the economy and still be a bubble. What are the downsides of a 30-year mortgage? Even Tesla fans are slamming the EV makers cheaper models. Startups are staying private longer thanks to alternative capital. Jamie Dimon says there’s a 30% chance of a correction: ‘I’m far more worried than others’
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Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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(00:20):
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Exchange with Chuck Zada and Mike Armstrong, your exclusive look
at business and financial news affecting your day, your city,
(00:42):
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heroes by visiting dav five K Dog Boston and making
a donation today. This is the Financial Exchange with Chuck
(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike and talker with you here.
Speaker 3 (01:12):
We are broadcasting live from the Margaritaville Resort, Cape Cod
in Hyannis. Fantastic spot. We've We're having a great time here.
Mike and I are already a couple of Margarita's deep
so uh, it's.
Speaker 4 (01:25):
Gonna get interesting, yeah things.
Speaker 5 (01:27):
That was my only concern is they had coffee for us,
but no actual Margarita's here at eleven am.
Speaker 2 (01:32):
I had one. Oh okay, well it's fine. Yeah. In
any case, we're having a great time here.
Speaker 3 (01:38):
It's a great spot, absolutely beautiful being down the cape,
especially this time of year, just absolutely perfect. So big
thank you to the folks at Margaritaville Resort for having us,
and to everyone who's here with us. We appreciate you
joining us as well. And we're having a great time
and hope you are too. Markets not really having a
great time, not having a horrible time. But yes, PE's
(02:00):
down about a quarter percent fifteen points, Dow is off
one hundred and fifty six points, about a third of
a percent, and the NASDAK down about seventy five points,
also a third of a percent. When we take a
look at the bond market, tenure US Treasury is up
nine tenths of a basis point to four point one four.
We just have not had any real movement in rates
(02:22):
over the last week or so now, kind of settled
into this spot since October started. When we take a
look at commodities, gold right now down thirty dollars and
twenty cents an ounce to four thousand and forty dollars
and thirty cents, I guess it had to take a
break sometime because it's just been ripping for the last
month and a half. And we've got crude oil West
(02:44):
Texas Intermediate down twenty three cents a barrel to sixty
two to thirty two, and that is what is moving
in marketsday. So again taking a little bit of a
pause here, but I mean it's you know, I keep
looking the charts for this year and it's it's kind
of wild just you look at the charts of the
(03:04):
S and P this year, because you know, the first
month or two was just kind of flat. Then it
was basically straight down for two months, and now it's
been straight up for six months. I mean, the biggest
dip that we've seen is around a four percent dip
in the market since mid April, and there's just been
very very low volatility, and you've had these like little
(03:27):
dips where a couple times I've been like, oh, this
could be on the verge of like getting a little
bit dodgy, and it's just it's never materialized. So we
continue to see stocks floating, you know, within sniffing distance
of all time highs basically on a daily basis since
mid to late June. That's kind of been the case
as far as what we have seen, Mike. We've got
(03:50):
this government shutdown that is currently in place. We're in
day nine of it. The online betting markets now think
this thing is gonna take twenty seven days to settle.
It's kind of the opposite of like how an option
price deteriorates as you get closer. Instead, in this case,
the longer the shutdown goes on, the more likely it
is that it goes on longer, so it keeps getting
(04:11):
bid up further and further. The big way that the
twenty eighteen shutdown came to an end, you started having
a bunch of air traffic controllers and TSA agents not
showing up, and so when people started missing their flights. Ultimately,
it became very public facing in a way that it's
not today. Now you've had some delays here and there,
some sporadic things, but it's not widespread. And so the
(04:35):
question is, hey, your first miss pay period for TSA
agents and air traffic controllers would be a week from
last from this Tuesday, so in about five days, that's
where you might start to see things starting to build up. Which,
of course, my wife has a trip to the West
Coast scheduled for next weekend, so I'm sitting there going,
(04:55):
oh boy, this is this is not gonna drop off.
We're gonna We're gonna get there on Thursday for her
Friday flight, I think is what we're gonna do at
this point. So I think that ultimately this is what
probably ends up resolving it as well. But it's still
is just kind of a mess as we try to
get through. You know what the potential impacts are. Generally,
(05:18):
government shutdowns don't really impact the US economy much because
most of them lasts less than seven days.
Speaker 2 (05:24):
This one's already longer than that.
Speaker 3 (05:27):
The estimates that are out there maybe a point one
percent GDP hit on a weekly basis.
Speaker 5 (05:31):
What was Morgan Stanley's review of previous ones in the
stock market, or something like on average, I think equity
markets had moved up four percent during government shutdowns or
something along those lines.
Speaker 2 (05:42):
I didn't see that. I'll have to take a look.
Speaker 4 (05:44):
I can pull it up.
Speaker 3 (05:45):
The data I had seen was more mixed, basically saying, hey,
it's not really conclusive either way.
Speaker 5 (05:49):
But I always warn people that whenever you take a
look at any study of what did stocks do during
this type of time period that doesn't seem to have
much to do with the stock market, like a government shutdown,
is stocks usually move up.
Speaker 2 (06:00):
It's true, they.
Speaker 5 (06:01):
Do usually move Yeah, one hundred and thirty years here
of stocks typically moving one hundred and fifty years. However,
long in the market's been open, of stocks typically moving up,
And so you would expect stocks to move up during
any prolonged period of time, and a government shutdown is
not any real exception.
Speaker 3 (06:17):
The no, most government shutdowns are also like one to
three days in the length, right, So this is this
is a little bit different here, So we'll see if
we get any progress on that side. But air travel disruptions,
those are the things that you want to watch over
the next week or two, because that's the place that
you typically see some real pressure starting to be put
on things. Let's talk about this piece from.
Speaker 2 (06:39):
Bill Dudley in Bloomberg.
Speaker 3 (06:42):
Bill Dudley is the former president of the Federal Reserve
Bank of New York.
Speaker 2 (06:46):
So he's awfully smart.
Speaker 3 (06:48):
And pretty well connected, you know, being the former president
of the New York Fed. And he's got a piece
talking about AI, which always makes me nervous because quite honestly, look,
Bill Dudley again is smarter than me, probably by quite
a bit. He also knows more about the economy, like
he knows more things that are going on in the
economy than I do. I don't think Bill Dudley has
(07:10):
any unique insight on artificial intelligence because he's never actually
worked on it on a technical level.
Speaker 5 (07:17):
It's it's reminiscent of the commentary that I saw by
Peter Lynch. Anyone unfamiliar with Peter Lynch ran the Magellan
Fund for over a decade, one of the more famous
investors out there, and he was asked why he doesn't
invest in he doesn't really run anything now, but why
he doesn't invest in artificial intelligence companies today? And his
answer was I couldn't pronounce Nvidia until about nine months ago.
What business do I have investing in it? He has
(07:41):
a very specific perspective on investing, But yeah, I don't
know that Dudley has a ton of insight when it
comes to how AI is going to transform our economy.
Speaker 3 (07:52):
Now, the title of the piece like is obviously true,
but also kind of you know how Miller Lite had
that slogan for a while, like great taste, less filling. Yeah,
this is kind of like mediocre taste and still not filling.
A I can transform the economy and still be a bubble. Okay, well,
(08:13):
like I could grow some hair, but still not enough.
Like that's fine, but it doesn't actually tell us anything
meaningful about what like.
Speaker 5 (08:22):
This is not an investible thesis. No, it is not
an investible thesis. But it is a point that I
think I've made to remind people, And if you've listened
to this program enough, you've heard us reminded this several times,
which is, there are technologies that can completely transform the
way that you do everything. The Internet was one of them.
It doesn't mean that just because it changes the world
(08:45):
in a very unique and transformative way that it can't
also be attached to a stock market bubble at the
same time. And you don't have to go back very
far to see that.
Speaker 2 (08:55):
Well, and here's the.
Speaker 3 (08:56):
Big thing that's really challenging right now is if you
ask the market who is being priced to benefit from
artificial intelligence, it's anyone who produces the stuff needed to
make it, anyone who actually makes artificial intelligence products, and
anyone who actually uses artificial intelligence products. Yeah, okay, everyone
(09:19):
is being projected to benefit. And we know from the
tech bubble that that wasn't the case. There are absolutely
companies that came out of the tech bubble that we
still use today. If if you've ever heard of a
little bookseller named Amazon, Great, they survived the tech bubble,
They went through a ninety eight percent draw down coming
out of it in their stock price, in their stock price,
(09:40):
and they're still here.
Speaker 2 (09:42):
But they're one of them.
Speaker 3 (09:43):
If you ever googled anything great like, you got one
of those tech bubble companies too. But like the sheer
number of companies that probably had really good products and
really good businesses but still didn't come out of it,
the laundry list is he And right now we're at
a time where It's just like three years ago with
(10:04):
the word blockchain. You can attach the word AI to
anything and people are like, ooh, I'm interested.
Speaker 2 (10:09):
Yeah, it does.
Speaker 5 (10:11):
Somebody brought this up to me yesterday when we were
making this comparison. This person was very had their own
crypto portfolio and was very intrigued by that sector, and
he was pointing out the similarities of all these companies
that had nothing to do with cryptocurrency who are saying, hey,
we're gonna put crypto in our treasury. Their stock price
would go up twenty percent the next day. Yep, they
(10:31):
didn't even do it yet, they just announced that they
were thinking about maybe doing it in the future. You know,
you could make catheters and say that you're going to
put blockchain into your treasury portfolio and boom, your stock
price went through the roof.
Speaker 4 (10:44):
And it just didn't make a ton of sense. And
we're seeing some of.
Speaker 5 (10:48):
That now with the AI stuff, where if you even
mention that your business is benefiting from the effects of AI,
then yeah, your stock price is getting a nice little bit.
Speaker 3 (10:58):
I mean, Mike, our show that we'readcasting today benefits from
the Internet.
Speaker 5 (11:03):
We are.
Speaker 3 (11:05):
Looking at all of these stories on computers that are
most likely being supplied with the Internet by fiber that
was laid thirty years ago. Okay, the companies that laid
that fiber aren't in business anymore. They're gone, They went
out of business. And so I think the place that
(11:25):
I get to is five years from now, you me,
Ben Tucker, all the people sitting here in the room
with us, we'll be using more artificial intelligence than we
do today, no doubt. But the companies that got us
to that point, they're not all going to be here.
Speaker 4 (11:44):
Yeah.
Speaker 5 (11:44):
I mean, how confident are you if you're big on
investing in AI? How confident are you that you own
the Facebook.
Speaker 3 (11:51):
Of How do you know that you own Google and
not Yahoo? How do you know that you own Amazon
and not pets dot com? How do you know that
you own Cisco and not Global Crossing? You don't, like,
I have no conviction at all about like the ones
that aren't pure plays Like Look, is Microsoft going to
(12:11):
like go out of business? No, because you and I
pay who knows how much for Microsoft Word every month.
Speaker 5 (12:16):
Sure we got a type we're not talking about necessarily
them going at it. The company's going into business again.
Microsoft stock, what did it do. During the dot com bust.
Speaker 3 (12:25):
It went way down and didn't get back to that
level until like twenty sixteen.
Speaker 5 (12:29):
So these are the cautions that need to be put
out there when it comes to this right now. And
I think with that one statement Dudley, I think hits
the nail on the head, which is this probably will
transform our lives, but be prepared for the fact that
the stock market could be overvaluing it.
Speaker 2 (12:49):
Take a quick break here.
Speaker 3 (12:51):
When we come back, we'll do a little bit of
trivia and then Michael, we're talking about rising foreclosures and
whether or not it's problem for the US economy.
Speaker 1 (13:02):
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Speaker 2 (13:37):
One thirty two.
Speaker 1 (13:38):
This is the Financial Exchange Radio network.
Speaker 6 (13:45):
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on the Financial Exchange. And today is John Lennon's eighty
(14:27):
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radio stations around the world played one of his most
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(14:47):
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Be the fifth person today to text us at six
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Speaker 2 (15:01):
Once again.
Speaker 6 (15:02):
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Show dot com.
Speaker 3 (15:13):
Peace on Realtor dot com. For closers continue to rise
across the US. These ten metros are hardest hit. And
him around here, chuck, No, okay, well here we're We're
in the northeast. It's mostly Florida, Carolinas, California, Nevada, and
one unlucky community in Ohio.
Speaker 2 (15:33):
Uh. But here's the thing.
Speaker 3 (15:36):
When we look at the numbers, like, I'm sorry, but
these pieces just do a really bad job of explaining
the actual situation. The first sentence, for closure rates have
surged across the country and are up almost twenty percent
from this time last year. Oh my goodness, Michael, how
are we gonna survive? Like for closures? This is a
two thousand and eight Again. No, here's the thing. If
(15:58):
you look at the overall levels of foreclosures right now,
they are about forty percent of what they were in
twenty nineteen.
Speaker 5 (16:06):
Forty percent of what they were in twenty nineteen, forty
percent of what they were in twenty nineteen. Do you
remember twenty nineteen being a real rough economy where there
are a lot of home foreclosures happening.
Speaker 3 (16:17):
There were some, but the economy was pretty good, and
so was the real estate market. In fact, if you
look right now, Mike, relative to the peak of the
foreclosure you know cycle in twenty ten, we're running it
about ten.
Speaker 2 (16:32):
Percent of that level of foreclosures.
Speaker 5 (16:34):
Got it so likely to find me any deals on
foreclosed homes like I was finding in Cambridge, Massachusetts in
twenty eleven.
Speaker 4 (16:43):
No, I bought my first ever.
Speaker 3 (16:45):
And this is this is the thing is Yes, it's
true that foreclosures are up about twenty percent over the
last year. They're coming off a historically low level where
if you took out like the last three years and
just looked at this number, the closest that we are,
we're still the lowest that we were before. This was
(17:08):
back in two thousand and five, before there started being
you know, problems in the housing bubble, and we're still
fifty percent.
Speaker 4 (17:14):
Of that level, so probably not an issue. Yes, we can.
Speaker 3 (17:18):
Talk about, you know, problems in the housing market with
affordability and this, and that there is no problem in
the housing market with foreclosures or wide scale widespread defaults
on mortgages.
Speaker 5 (17:30):
Can we get to our crazy housing story of the day.
Then there's another one after this, a piece from Patrick Brenner.
Speaker 2 (17:38):
Yes, this is.
Speaker 3 (17:38):
Patrick Brenner who says that the thirty year fixed rate
mortgage is ruining the real estate market. Not just that, Michael,
I'm gonna use Patrick's own words. It's the scam of
the century alone, so exploitative it required a federal law
to disguise its true nature. And basically he makes the
point that, hey, when you take out a thirty year
(17:58):
mortgage for the first you know, ten years or so
of the mortgage, you're paying mostly interest on that, okay,
and you don't know how much interest you're paying. Actually,
like when you take out a loan now, they tell
you how much interest you're paying in total. It's on
a big one sheet that you get and you have
to actually sign I think it's the HUD one that
shows this, and you you know, have to sign it
and be like, yes, like, I understand that I'm gonna
(18:19):
have to pay this much interest over the life of
the loan.
Speaker 5 (18:22):
I would make the argument that for consumers, maybe not
for backs, but for consumers, there is no better deal
out there than the thirty year fixed rate mortgage.
Speaker 4 (18:31):
Mike. When I was a one way option.
Speaker 3 (18:33):
When I was twenty seven years old, I personally like
bought My first property was in Somerville, again, like a
bunch of cheap real estate in Somerville at the time,
and someone decided, Hey, you're twenty seven years old, and
I'm gonna lend you a couple hundred thousand dollars at
(18:54):
like four and a half percent for thirty years.
Speaker 2 (18:57):
And I'm like, where do I sign up? Can I
get too? It's like, how do I do this?
Speaker 4 (19:02):
Best deal you can get?
Speaker 5 (19:04):
If mortgage rates go down, you can refinance it and
get a lower interest. If they go up, then you
are locked into a thirty year mortgage and you can
go nowhere.
Speaker 3 (19:12):
Actually my first one was an adjustable. I had to
refly out of it, but I did.
Speaker 4 (19:16):
The thirty year mortgage.
Speaker 5 (19:18):
Generally, I don't know I can make the case for
how it might drive up real estate prices because it
is such a good deal, but by any stretch, I
think one of the best deals out there for the
American consumer.
Speaker 3 (19:30):
Not a loan so exploited if it required a federal
law to discigner.
Speaker 2 (19:33):
I don't true nature.
Speaker 3 (19:34):
Just take a quick break, and when we come back,
we'll reveal our true nature next.
Speaker 1 (19:40):
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 and
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 6 (19:58):
Well, markets are pulling back from recent record highs on
day nine of the government shutdown, as Wallstreet reacts to
third quarter earnings from Pepsi and Delta posted earlier this morning.
Right now, the Dow is down by four tenths of
one percent or one hundred and ninety six points lower,
SMP five hundred down over a third of a percent
or twenty four points lower, Nasdaq down by four tenths
(20:21):
of one percent. Russell two thousand is down about a
third of one percent. Tenyure treasreel flat currently at four
point one four percent, and crude oil down about four
tenths of one percent. Trating its sixty two dollars and
thirty one cents a barrel. Delta reported stronger than expected
third quarter results, where the airline issued strong guidance, saying
(20:41):
it expects a resurgence in travel demand to continue in
the holiday season. Delta stock is up nearly five percent. Meanwhile,
Pepsi stock is rising over two percent now after the
snacks and beverage Giant also impressed for its third quarter results,
beating on earnings and revenue. Elsewhere, shares in luxurit car
our maker Ferrari skating thirteen percent after the company trimmed
(21:03):
its electrification targets. Ferrari said it expects its twenty thirty
sports car model lineup to be made up of only
twenty percent fully electric vehicles, down from its prior target
of forty percent EV sales by the end of the decade.
Mp Materials up over seven percent after BMO Capital Markets
reinstated coverage at a market perform rating, calling the rare
(21:26):
earth metals producer a rare earth champion following its partnership
with the Department of Defense. Separately, China said it tightened
rare earth export controls ahead of a potential meeting between
President Trump and Chinese President Ji Chimping and Open AI's
short form AI video app, Sora hit one million downloads
(21:46):
in less than five days after its launch in late September.
That according to an executive. I'm Tucker Silva and that
is Wall Street Watch. And in the previous segment, we
asked you the trivia question, what song did one hundred
of radio stations play on John Lennon's fiftieth birthday? That
would be imagine. Jay from centraral Mass is our winner
(22:08):
today taking on the Financial Exchange Show, t shirt. Congrats
to Jay, and we played trivia every day here in
the Financial Exchange See complete contest rules at Financial Exchange
Show dot com.
Speaker 3 (22:19):
Did Tucker say that Sora had was that a million downloads?
Tucker correct, that's correct.
Speaker 2 (22:25):
Daddy's correct.
Speaker 3 (22:27):
So you're tell me that humans are spending I don't know,
five hundred billion dollars a year building out these AI
dedit data centers. What'd you use them for? Did they
like design drugs to help cure diseases? Did they you know,
help us, you know, make nuclear fusion possible? No, we
made videos of penguins sliding down like ice luges.
Speaker 5 (22:48):
Okay, I used it to write a silly poem to
my daughter the other day.
Speaker 2 (22:54):
Was it good?
Speaker 4 (22:55):
No?
Speaker 1 (22:55):
No?
Speaker 4 (22:56):
You know what else? I couldn't have done better myself?
But I'm not much.
Speaker 3 (23:01):
You know what else people are saying isn't good? The
new stripped down Tesla model. Why is shocking Inside EV's
This is the headline from them, quote model trash. Even
Tesla fans are slamming its hyped up, cheaper revs. So
I actually have some sympathy for Tesla on this, quite honestly.
And the reason why is there's no other automaker where
when you release a new model, it immediately gets like scrutinized,
(23:25):
like hey, is the cup holder like this or this
or that. I mean, we covered the story about the
VW Bus, which, if you remember, I was pretty interested
when they said they were gonna re release that. I'm like,
that's gonna be my new car. And then it turned
out it was horribly overpriced, had no range. Oh and
by the way, some guy in Volkswagen didn't even do
the proper regulatory research and so they had to mail
(23:46):
everyone these like seat reduce sizor things because they made
the rear seat too big. To only have two seat
belts and they had to artificial shrink it after they
sold the car, and and that didn't get like giant
publications writing about it or anything. But with Tesla, hey
(24:06):
you get rid of like a USB sport, and people
are like, oh, how could you do that? You got
rid of a USB port and so so here's.
Speaker 5 (24:14):
The real problem for Tesla is that their customer base
is pegged to this idea that there's someday going to
get a Tesla for twenty five thousand dollars.
Speaker 4 (24:21):
And I'm here to say it's never going to happen.
Speaker 2 (24:23):
Yes, I agree.
Speaker 5 (24:25):
One, that promise was made like seven years ago when
it was maybe feasible to do. So today there's no
way you can it for an electric vehicle, just with inflation.
Speaker 3 (24:34):
Twenty five thousand dollars when that promise was made is
probably around thirty three thousand today.
Speaker 5 (24:39):
Ok So you're getting still not there, but closer with
this new model. Why And yeah, I mean, look, I
get why folks are Here's why I'm disappointed. This is
in no way innovative from what they were doing previous.
Speaker 3 (24:55):
No, they stripped a bunch of stuff out and said, okay,
here's a car that's five cheaper, and I guess people
are like upset that it's only five thousand dollars cheaper
and not more for what they stripped out of it.
Speaker 5 (25:10):
Yeah, okay, Like, here's my solution for you. Don't buy it? Like, no,
it's more fun to complain about it on that, Chuck.
Speaker 3 (25:18):
I'm just tired of people complaining over like dumb stuff
about like, oh, there's not enough USB ports. Well buy
a different car, get a USB splitter, or do something
other than like write a tweet about it.
Speaker 5 (25:29):
Just to be clear, is this the guy who was
complaining to me yesterday about his daughter eating too many blueberries? No, Chuck,
I was having a good conversation yesterday with somebody about
four to one case in the complexity specifically around retirement
accounts and rmds, And here was her situation.
Speaker 2 (25:48):
We were there.
Speaker 5 (25:50):
I was meeting with a daughter and her mother. Her
mother is ninety years old, and we were talking through
what happens if she.
Speaker 4 (25:56):
Dies with an IRA.
Speaker 5 (25:58):
And this woman, the daughter had actually lost her husband
recently and so she had inherited an IRA from there,
and she was confused about the R and D rules.
And I said well, that's understandable because three different sets
of rules apply to you in these three different circumstances. One,
you have your own retirement account where you are going
to face requirementimum distributions. Two, you may have your mother's
(26:19):
retirement account, where a fully different set of rules applies
to you because you are her daughter. And then three,
your husband passed away and left you were a retirement account,
and a different set of rules applies to that one
than the one you're going to get from your mother.
And I was left almost not fully understanding.
Speaker 4 (26:34):
It all myself. We were able to get there, we're
able to explain it all.
Speaker 5 (26:37):
But these rules are immensely complex, I joked to her,
which wasn't much of a joke, because it's kind of
true that Congress is giving me a financial advisor and
your CPA permanent job security by how complicated they are
making these rules, which is just lovely for those that
charge for doing this sort of thing. But I am
(26:57):
here to say that if you're not familiar with how
these rules work, and specifically how they have changed over
the course of the last few years, it is immensely
important to learn about it. If you are going to
have an ira have one now or will inherit one
in the future. I then brought up a completely different
situation because my own mother in law was in the
(27:18):
situation where she lost a loved one who was her
not married partner, who was younger than her, and a
different set of rules applied to her on that one
than the woman who's going to hear it from her mother.
It is incredibly complicated how all of this works. It
depends who is leaving you the retirement account, what type
of retirement account you have, whether it's sponsored by your
(27:40):
employer versus one that you funded on your own. And
we have a brand new guide about the subject for
the month of October. It updates with all the new rules.
It's from the Armstrong Advisor Group. It's called Understanding Required
Minimum Distributions. It's also well timed because you have three
months left to figure this out before the end of
the year. If you'd like your copy, you can call
the Armstrong Advice Group at eight hundred three nine three
(28:02):
four zero zero one and request of your copy.
Speaker 4 (28:04):
It is free. You can also request it online at
Armstrong Advisory dot com, but that phone number is eight
hundred three nine three four zero zero one.
Speaker 1 (28:17):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 3 (28:33):
Mike, you had a piece near about startup staying private longer.
It's basically, hey, they have more access to capital, so
they don't have to go public until later on, and
thus you don't get to buy Amazon when it's one
hundred million dollar company. You have to wait until you
can buy maybe eventually open Ai when it's like a
five hundred billion dollar company.
Speaker 4 (28:52):
I mean, they're already half a billion dollar company now.
Speaker 5 (28:54):
Yeah, So I let's skip it and make fun of
Jamie Diamond and said, Okay, Jamie Diamond said there's a
thirty percent chance of a correction, which he's pretty much.
Speaker 4 (29:04):
Said every time right over the last seven years.
Speaker 3 (29:06):
Jamie's like basically been permanently stuck at thirty percent, which
which makes you wonder, like why does this keep getting
written about?
Speaker 2 (29:14):
Is if it actually means something?
Speaker 5 (29:16):
Also, if you think there's a thirty percent chance of
a correction. That means there's a seventy percent chance that
there is no correction.
Speaker 2 (29:21):
Right, Why isn't it written that way?
Speaker 5 (29:23):
Seventy percent likelihood that stocks go down less than twenty
percent and over one periods ten percent. Okay, so stocks
stay where they are or go down by less than
ten percent, is what Jamie is saying, or go up.
Speaker 4 (29:36):
Does anyone we've got a.
Speaker 5 (29:37):
Group full of people here because we're broadcasting from the
margaritea the resort. No offense to Jamie Diamond. He runs
probably the best run bank in the world. Does anyone
find that to be useful investing thesis that markets are
he's worried that there's a thirty percent chance of a correction.
Anybody finding that terribly useful information? I I'm not particularly so.
(29:57):
I don't know what anyone else is supposed to do
with that information. And it goes along with every other
comment he's made over the last several years where he
thinks that there was an economic Was it.
Speaker 2 (30:07):
A hurricane that was coming to a hurricane?
Speaker 4 (30:11):
I don't know.
Speaker 5 (30:11):
I think that Jamie Diamond runs a really good bank
and is not putting together a whole lot of useful
information when it comes about his concerns regarding the stock
market or the economy.
Speaker 3 (30:22):
Sloral Exotica, Who's the biggest eyewear company in the world.
They own like all the ray Bands and Oakley's and
basically have a major brand of eyewear they own. They
are reportedly going to be expanding their smart glasses production
to ten million annual units by the end of the
year because they think this is going to be the
next smartphone.
Speaker 4 (30:44):
No, it's not.
Speaker 3 (30:45):
Has anyone in this room seen anyone wearing smart glasses? Okay,
I don't know if that's gonna work out well for them.
Let's take a quick break. When we return, let's do
a little bit of stack rue.
Speaker 1 (30:58):
Let's do the Financial Exchange every day from eleven to
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Keep it here for the latest business and financial news
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This segment of the Financial Exchange is brought to you
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Speaker 4 (32:10):
MIKE.
Speaker 3 (32:10):
The Center for Democracy and Technology WHO'S, a nonprofit group,
conducts an annual survey of middle schoolers, high schoolers, teachers,
and parents and found the vast majority of people across
those demographics had used artificial intelligence in the last school year.
Speaker 4 (32:31):
Fine not surprising.
Speaker 3 (32:32):
They also found that nearly one in five high schoolers
say they or someone they know has had a romantic
relationship with artificial intelligence one and what one in five wow,
and forty two percent of student surveys say they or
someone they know have used AI for companionship, and I
gotta say, this is a problem, and it's going to
(32:58):
get worse if we don't do something thing about it.
There's no doubt in my mind that people are lonely.
Like basically every study shows out there that people are
lonelier now than they've ever been. We don't see enough people,
we don't hang out with enough people. I mentioned like
in passing yesterday, like just kind of jokingly but kind
of not. Like maybe the problem is now that we're
(33:18):
not drinking enough alcohol anymore. That was Tuesday, Okay, Yeah,
Like we got to just like get out and like
hang out and drink with each other and run around
and listen to music and whatever, because otherwise we're gonna
end up talking to computers that aren't real people and
are just gonna tell us whatever we want to hear. Now, granted,
there's some people that you'll meet that will tell you
(33:40):
whatever you want to hear, too true, but you usually
know that they're full of it and you move on.
Speaker 2 (33:45):
Yeah.
Speaker 5 (33:46):
I was speaking with some other people about this with
kids older than mine. My kids are not my oldest
ones aren't even ten years old yet. And we fortunately
have prevented them from using social media or AI.
Speaker 4 (33:57):
Or even a cell phone.
Speaker 5 (33:58):
But for those with teenage kids, they certainly get a
lot of exposure to AI, and they are clearly using
it a lot for school work, which I don't think
is actually necessarily a bad thing, so long as it's
detectable and the teachers are able to teach with it.
The scary things that I was hearing was how frequently
there were children were using AI to make everyday life
(34:20):
decisions like where should I get lunch?
Speaker 2 (34:25):
I just you got to build that muscle yourself.
Speaker 5 (34:27):
Yeah, I mean, if you can't decide on your own
where you should have lunch today, or you know, what
color shoes you should wear, and you're relying on a technology,
I have no idea what that means for development. It
probably means really good things for the AI companies that
develop these things. But like we saw with social media
(34:48):
and adoption from I guess gen Z was really the
first generation to come of age with social media being
a prevalent role in their everyday life.
Speaker 4 (35:00):
Yeah, not exactly.
Speaker 5 (35:02):
A good thing. And by the way, that piece of
you know, relationship with AI. We've talked at length about
how these companies have done a part of my language,
piss poor job of managing themselves and having policies in
place to prevent this sort of thing. What was the
Facebook written policy on this subject prior to it getting
(35:23):
disclosed in a paper?
Speaker 3 (35:24):
It allowed for sexually explicit conversations with thirteen year olds.
Speaker 4 (35:30):
Which is not really good.
Speaker 5 (35:32):
Again, this isn't like, oh, this accidentally happened. This is
it was written for. Facebook created a policy saying this
is what's okay, and this is not what's not okay.
It's not some AI that created this policy. It was
an explicit policy that created So like what no, no,
you finished, then I'll go Like with any technology, as
we've talked about, there are going to be many horror
(35:53):
stories from artificial intelligence, just as there were with the internet, right,
like changed our everyday lives and a lot of really
negative things have occurred because of it. Okay, so you
said it's not like AI wrote this like that policy.
Speaker 4 (36:06):
Well maybe it did.
Speaker 3 (36:07):
So I'm not generally a big conspiracy guy. It's not
usually where my head lives. But isn't the most plausible
explanation to all of this that the AI has already
achieved sentience and is making us do this in order
to exterminate us.
Speaker 2 (36:24):
No, Michael, Mike, I do.
Speaker 5 (36:28):
Believed policy and no human then read it, Mike, use
up all your resources, building data centers, take all your
electricity and give it to me, like screw up your
kids through like these artificial relationships.
Speaker 2 (36:42):
Like isn't this exactly what a I would do if
it wanted to take over.
Speaker 4 (36:46):
Your hold on your your tinfoil Hat's not fit.
Speaker 2 (36:49):
I'm telling you, Michael, do you leave it under the
table here?
Speaker 3 (36:52):
I'm just saying, like the thoughts crossed my mind from
Ante and it's never fully left.
Speaker 5 (36:57):
Important story of the day that we haven't covered yet.
China has dramatically expanded their rare earth export controls today,
adding five new elements and extra scrutiny for semiconductor users
as they tighten the control over the sector, right ahead
of the talks between President Trump and Shijing Ping. Not
surprising the timing on this. If there is one lever
(37:19):
that China controls in negotiations with the United States and
the rest of the world, quite frankly, it is on
the subject of rare earth because they are the only
country in the world that produces a whole bunch of
them that go into everything from semiconductors to fighter crafts.
So not surprising that they are restricting this once again.
(37:39):
They will most certainly want to use it as a
lever in negotiations, but important to mention because it is
literally what makes the world work.
Speaker 3 (37:50):
Right now, taking a look at markets as we head
towards the top of the eye of the s Andps
down fifteen points, Dows off one hundred and forty two,
Nasdaq is off sixty six.
Speaker 2 (37:59):
We are done for the day.
Speaker 3 (38:02):
But don't be sad. We'll be back tomorrow. Right, Tomorrow's Friday,
it is.
Speaker 2 (38:06):
It is.
Speaker 3 (38:07):
Yeah, we'll go to b still no government economic data,
but we get to talk about Michigan consumer sentiment and.
Speaker 2 (38:12):
Whether it means anything.
Speaker 4 (38:15):
Find out tomorrow.
Speaker 2 (38:16):
Yeah, you can find out tomorrow on the Financial Exchange.
We'll see you then,
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
any investment decisions. Armstrong Advisory and the advertisers heard on
this program do not endorse each other or their services.
Armstrong and Money Matters Radio do not compensate each other
for referrals and are not affiliated. This is the Financial
Exchange with Chuck Zada and Mike Armstrong, your exclusive look
at business and financial news affecting your day, your city,
(00:42):
your world. Stay informed and up to date about economic
and market trends plus breaking business news every day. The
Financial Exchange is a proud partner of the Disabled American
Veterans Department of Massachusetts. Help us support our great American
heroes by visiting dav five K Dog Boston and making
a donation today. This is the Financial Exchange with Chuck
(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike and talker with you here.
Speaker 3 (01:12):
We are broadcasting live from the Margaritaville Resort, Cape Cod
in Hyannis. Fantastic spot. We've We're having a great time here.
Mike and I are already a couple of Margarita's deep
so uh, it's.
Speaker 4 (01:25):
Gonna get interesting, yeah things.
Speaker 5 (01:27):
That was my only concern is they had coffee for us,
but no actual Margarita's here at eleven am.
Speaker 2 (01:32):
I had one. Oh okay, well it's fine. Yeah. In
any case, we're having a great time here.
Speaker 3 (01:38):
It's a great spot, absolutely beautiful being down the cape,
especially this time of year, just absolutely perfect. So big
thank you to the folks at Margaritaville Resort for having us,
and to everyone who's here with us. We appreciate you
joining us as well. And we're having a great time
and hope you are too. Markets not really having a
great time, not having a horrible time. But yes, PE's
(02:00):
down about a quarter percent fifteen points, Dow is off
one hundred and fifty six points, about a third of
a percent, and the NASDAK down about seventy five points,
also a third of a percent. When we take a
look at the bond market, tenure US Treasury is up
nine tenths of a basis point to four point one four.
We just have not had any real movement in rates
(02:22):
over the last week or so now, kind of settled
into this spot since October started. When we take a
look at commodities, gold right now down thirty dollars and
twenty cents an ounce to four thousand and forty dollars
and thirty cents, I guess it had to take a
break sometime because it's just been ripping for the last
month and a half. And we've got crude oil West
(02:44):
Texas Intermediate down twenty three cents a barrel to sixty
two to thirty two, and that is what is moving
in marketsday. So again taking a little bit of a
pause here, but I mean it's you know, I keep
looking the charts for this year and it's it's kind
of wild just you look at the charts of the
(03:04):
S and P this year, because you know, the first
month or two was just kind of flat. Then it
was basically straight down for two months, and now it's
been straight up for six months. I mean, the biggest
dip that we've seen is around a four percent dip
in the market since mid April, and there's just been
very very low volatility, and you've had these like little
(03:27):
dips where a couple times I've been like, oh, this
could be on the verge of like getting a little
bit dodgy, and it's just it's never materialized. So we
continue to see stocks floating, you know, within sniffing distance
of all time highs basically on a daily basis since
mid to late June. That's kind of been the case
as far as what we have seen, Mike. We've got
(03:50):
this government shutdown that is currently in place. We're in
day nine of it. The online betting markets now think
this thing is gonna take twenty seven days to settle.
It's kind of the opposite of like how an option
price deteriorates as you get closer. Instead, in this case,
the longer the shutdown goes on, the more likely it
is that it goes on longer, so it keeps getting
(04:11):
bid up further and further. The big way that the
twenty eighteen shutdown came to an end, you started having
a bunch of air traffic controllers and TSA agents not
showing up, and so when people started missing their flights. Ultimately,
it became very public facing in a way that it's
not today. Now you've had some delays here and there,
some sporadic things, but it's not widespread. And so the
(04:35):
question is, hey, your first miss pay period for TSA
agents and air traffic controllers would be a week from
last from this Tuesday, so in about five days, that's
where you might start to see things starting to build up. Which,
of course, my wife has a trip to the West
Coast scheduled for next weekend, so I'm sitting there going,
(04:55):
oh boy, this is this is not gonna drop off.
We're gonna We're gonna get there on Thursday for her
Friday flight, I think is what we're gonna do at
this point. So I think that ultimately this is what
probably ends up resolving it as well. But it's still
is just kind of a mess as we try to
get through. You know what the potential impacts are. Generally,
(05:18):
government shutdowns don't really impact the US economy much because
most of them lasts less than seven days.
Speaker 2 (05:24):
This one's already longer than that.
Speaker 3 (05:27):
The estimates that are out there maybe a point one
percent GDP hit on a weekly basis.
Speaker 5 (05:31):
What was Morgan Stanley's review of previous ones in the
stock market, or something like on average, I think equity
markets had moved up four percent during government shutdowns or
something along those lines.
Speaker 2 (05:42):
I didn't see that. I'll have to take a look.
Speaker 4 (05:44):
I can pull it up.
Speaker 3 (05:45):
The data I had seen was more mixed, basically saying, hey,
it's not really conclusive either way.
Speaker 5 (05:49):
But I always warn people that whenever you take a
look at any study of what did stocks do during
this type of time period that doesn't seem to have
much to do with the stock market, like a government shutdown,
is stocks usually move up.
Speaker 2 (06:00):
It's true, they.
Speaker 5 (06:01):
Do usually move Yeah, one hundred and thirty years here
of stocks typically moving one hundred and fifty years. However,
long in the market's been open, of stocks typically moving up,
And so you would expect stocks to move up during
any prolonged period of time, and a government shutdown is
not any real exception.
Speaker 3 (06:17):
The no, most government shutdowns are also like one to
three days in the length, right, So this is this
is a little bit different here, So we'll see if
we get any progress on that side. But air travel disruptions,
those are the things that you want to watch over
the next week or two, because that's the place that
you typically see some real pressure starting to be put
on things. Let's talk about this piece from.
Speaker 2 (06:39):
Bill Dudley in Bloomberg.
Speaker 3 (06:42):
Bill Dudley is the former president of the Federal Reserve
Bank of New York.
Speaker 2 (06:46):
So he's awfully smart.
Speaker 3 (06:48):
And pretty well connected, you know, being the former president
of the New York Fed. And he's got a piece
talking about AI, which always makes me nervous because quite honestly, look,
Bill Dudley again is smarter than me, probably by quite
a bit. He also knows more about the economy, like
he knows more things that are going on in the
economy than I do. I don't think Bill Dudley has
(07:10):
any unique insight on artificial intelligence because he's never actually
worked on it on a technical level.
Speaker 5 (07:17):
It's it's reminiscent of the commentary that I saw by
Peter Lynch. Anyone unfamiliar with Peter Lynch ran the Magellan
Fund for over a decade, one of the more famous
investors out there, and he was asked why he doesn't
invest in he doesn't really run anything now, but why
he doesn't invest in artificial intelligence companies today? And his
answer was I couldn't pronounce Nvidia until about nine months ago.
What business do I have investing in it? He has
(07:41):
a very specific perspective on investing, But yeah, I don't
know that Dudley has a ton of insight when it
comes to how AI is going to transform our economy.
Speaker 3 (07:52):
Now, the title of the piece like is obviously true,
but also kind of you know how Miller Lite had
that slogan for a while, like great taste, less filling. Yeah,
this is kind of like mediocre taste and still not filling.
A I can transform the economy and still be a bubble. Okay, well,
(08:13):
like I could grow some hair, but still not enough.
Like that's fine, but it doesn't actually tell us anything
meaningful about what like.
Speaker 5 (08:22):
This is not an investible thesis. No, it is not
an investible thesis. But it is a point that I
think I've made to remind people, And if you've listened
to this program enough, you've heard us reminded this several times,
which is, there are technologies that can completely transform the
way that you do everything. The Internet was one of them.
It doesn't mean that just because it changes the world
(08:45):
in a very unique and transformative way that it can't
also be attached to a stock market bubble at the
same time. And you don't have to go back very
far to see that.
Speaker 2 (08:55):
Well, and here's the.
Speaker 3 (08:56):
Big thing that's really challenging right now is if you
ask the market who is being priced to benefit from
artificial intelligence, it's anyone who produces the stuff needed to
make it, anyone who actually makes artificial intelligence products, and
anyone who actually uses artificial intelligence products. Yeah, okay, everyone
(09:19):
is being projected to benefit. And we know from the
tech bubble that that wasn't the case. There are absolutely
companies that came out of the tech bubble that we
still use today. If if you've ever heard of a
little bookseller named Amazon, Great, they survived the tech bubble,
They went through a ninety eight percent draw down coming
out of it in their stock price, in their stock price,
(09:40):
and they're still here.
Speaker 2 (09:42):
But they're one of them.
Speaker 3 (09:43):
If you ever googled anything great like, you got one
of those tech bubble companies too. But like the sheer
number of companies that probably had really good products and
really good businesses but still didn't come out of it,
the laundry list is he And right now we're at
a time where It's just like three years ago with
(10:04):
the word blockchain. You can attach the word AI to
anything and people are like, ooh, I'm interested.
Speaker 2 (10:09):
Yeah, it does.
Speaker 5 (10:11):
Somebody brought this up to me yesterday when we were
making this comparison. This person was very had their own
crypto portfolio and was very intrigued by that sector, and
he was pointing out the similarities of all these companies
that had nothing to do with cryptocurrency who are saying, hey,
we're gonna put crypto in our treasury. Their stock price
would go up twenty percent the next day. Yep, they
(10:31):
didn't even do it yet, they just announced that they
were thinking about maybe doing it in the future. You know,
you could make catheters and say that you're going to
put blockchain into your treasury portfolio and boom, your stock
price went through the roof.
Speaker 4 (10:44):
And it just didn't make a ton of sense. And
we're seeing some of.
Speaker 5 (10:48):
That now with the AI stuff, where if you even
mention that your business is benefiting from the effects of AI,
then yeah, your stock price is getting a nice little bit.
Speaker 3 (10:58):
I mean, Mike, our show that we'readcasting today benefits from
the Internet.
Speaker 5 (11:03):
We are.
Speaker 3 (11:05):
Looking at all of these stories on computers that are
most likely being supplied with the Internet by fiber that
was laid thirty years ago. Okay, the companies that laid
that fiber aren't in business anymore. They're gone, They went
out of business. And so I think the place that
(11:25):
I get to is five years from now, you me,
Ben Tucker, all the people sitting here in the room
with us, we'll be using more artificial intelligence than we
do today, no doubt. But the companies that got us
to that point, they're not all going to be here.
Speaker 4 (11:44):
Yeah.
Speaker 5 (11:44):
I mean, how confident are you if you're big on
investing in AI? How confident are you that you own
the Facebook.
Speaker 3 (11:51):
Of How do you know that you own Google and
not Yahoo? How do you know that you own Amazon
and not pets dot com? How do you know that
you own Cisco and not Global Crossing? You don't, like,
I have no conviction at all about like the ones
that aren't pure plays Like Look, is Microsoft going to
(12:11):
like go out of business? No, because you and I
pay who knows how much for Microsoft Word every month.
Speaker 5 (12:16):
Sure we got a type we're not talking about necessarily
them going at it. The company's going into business again.
Microsoft stock, what did it do. During the dot com bust.
Speaker 3 (12:25):
It went way down and didn't get back to that
level until like twenty sixteen.
Speaker 5 (12:29):
So these are the cautions that need to be put
out there when it comes to this right now. And
I think with that one statement Dudley, I think hits
the nail on the head, which is this probably will
transform our lives, but be prepared for the fact that
the stock market could be overvaluing it.
Speaker 2 (12:49):
Take a quick break here.
Speaker 3 (12:51):
When we come back, we'll do a little bit of
trivia and then Michael, we're talking about rising foreclosures and
whether or not it's problem for the US economy.
Speaker 1 (13:02):
After this, find daily interviews and full shows of The
Financial Exchange on our YouTube page. Subscribe to our page
and get caught up on anything and everything you might
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Financial Exchange is Life on Series XM's Business radio channel
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(13:25):
latest business and financial news from across the country and
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Speaker 2 (13:37):
One thirty two.
Speaker 1 (13:38):
This is the Financial Exchange Radio network.
Speaker 6 (13:45):
The Financial Exchange is a proud partner of the Disabled
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That's DAV five k dot Boston. Sign for trivia here
on the Financial Exchange. And today is John Lennon's eighty
(14:27):
fifth birthday. On John Lennon's fiftieth birthday in nineteen ninety,
radio stations around the world played one of his most
famous songs to honor the fallen Beatle. So our trivia
question today, what song did hundreds of radio stations play
on John Lennon's fiftieth birthday? Once again, what song did
(14:47):
hundreds of radio stations play on John Lennon's fiftieth birthday.
Be the fifth person today to text us at six
one seven three six two thirteen eighty five with correct answer,
and you win a Finance Exchange Show T shirt.
Speaker 2 (15:01):
Once again.
Speaker 6 (15:02):
The fifth correct response to Texas to the number six
one seven three six two thirteen eighty five will win
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 3 (15:13):
Peace on Realtor dot com. For closers continue to rise
across the US. These ten metros are hardest hit. And
him around here, chuck, No, okay, well here we're We're
in the northeast. It's mostly Florida, Carolinas, California, Nevada, and
one unlucky community in Ohio.
Speaker 2 (15:33):
Uh. But here's the thing.
Speaker 3 (15:36):
When we look at the numbers, like, I'm sorry, but
these pieces just do a really bad job of explaining
the actual situation. The first sentence, for closure rates have
surged across the country and are up almost twenty percent
from this time last year. Oh my goodness, Michael, how
are we gonna survive? Like for closures? This is a
two thousand and eight Again. No, here's the thing. If
(15:58):
you look at the overall levels of foreclosures right now,
they are about forty percent of what they were in
twenty nineteen.
Speaker 5 (16:06):
Forty percent of what they were in twenty nineteen, forty
percent of what they were in twenty nineteen. Do you
remember twenty nineteen being a real rough economy where there
are a lot of home foreclosures happening.
Speaker 3 (16:17):
There were some, but the economy was pretty good, and
so was the real estate market. In fact, if you
look right now, Mike, relative to the peak of the
foreclosure you know cycle in twenty ten, we're running it
about ten.
Speaker 2 (16:32):
Percent of that level of foreclosures.
Speaker 5 (16:34):
Got it so likely to find me any deals on
foreclosed homes like I was finding in Cambridge, Massachusetts in
twenty eleven.
Speaker 4 (16:43):
No, I bought my first ever.
Speaker 3 (16:45):
And this is this is the thing is Yes, it's
true that foreclosures are up about twenty percent over the
last year. They're coming off a historically low level where
if you took out like the last three years and
just looked at this number, the closest that we are,
we're still the lowest that we were before. This was
(17:08):
back in two thousand and five, before there started being
you know, problems in the housing bubble, and we're still
fifty percent.
Speaker 4 (17:14):
Of that level, so probably not an issue. Yes, we can.
Speaker 3 (17:18):
Talk about, you know, problems in the housing market with
affordability and this, and that there is no problem in
the housing market with foreclosures or wide scale widespread defaults
on mortgages.
Speaker 5 (17:30):
Can we get to our crazy housing story of the day.
Then there's another one after this, a piece from Patrick Brenner.
Speaker 2 (17:38):
Yes, this is.
Speaker 3 (17:38):
Patrick Brenner who says that the thirty year fixed rate
mortgage is ruining the real estate market. Not just that, Michael,
I'm gonna use Patrick's own words. It's the scam of
the century alone, so exploitative it required a federal law
to disguise its true nature. And basically he makes the
point that, hey, when you take out a thirty year
(17:58):
mortgage for the first you know, ten years or so
of the mortgage, you're paying mostly interest on that, okay,
and you don't know how much interest you're paying. Actually,
like when you take out a loan now, they tell
you how much interest you're paying in total. It's on
a big one sheet that you get and you have
to actually sign I think it's the HUD one that
shows this, and you you know, have to sign it
and be like, yes, like, I understand that I'm gonna
(18:19):
have to pay this much interest over the life of
the loan.
Speaker 5 (18:22):
I would make the argument that for consumers, maybe not
for backs, but for consumers, there is no better deal
out there than the thirty year fixed rate mortgage.
Speaker 4 (18:31):
Mike. When I was a one way option.
Speaker 3 (18:33):
When I was twenty seven years old, I personally like
bought My first property was in Somerville, again, like a
bunch of cheap real estate in Somerville at the time,
and someone decided, Hey, you're twenty seven years old, and
I'm gonna lend you a couple hundred thousand dollars at
(18:54):
like four and a half percent for thirty years.
Speaker 2 (18:57):
And I'm like, where do I sign up? Can I
get too? It's like, how do I do this?
Speaker 4 (19:02):
Best deal you can get?
Speaker 5 (19:04):
If mortgage rates go down, you can refinance it and
get a lower interest. If they go up, then you
are locked into a thirty year mortgage and you can
go nowhere.
Speaker 3 (19:12):
Actually my first one was an adjustable. I had to
refly out of it, but I did.
Speaker 4 (19:16):
The thirty year mortgage.
Speaker 5 (19:18):
Generally, I don't know I can make the case for
how it might drive up real estate prices because it
is such a good deal, but by any stretch, I
think one of the best deals out there for the
American consumer.
Speaker 3 (19:30):
Not a loan so exploited if it required a federal
law to discigner.
Speaker 2 (19:33):
I don't true nature.
Speaker 3 (19:34):
Just take a quick break, and when we come back,
we'll reveal our true nature next.
Speaker 1 (19:40):
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 and
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 6 (19:58):
Well, markets are pulling back from recent record highs on
day nine of the government shutdown, as Wallstreet reacts to
third quarter earnings from Pepsi and Delta posted earlier this morning.
Right now, the Dow is down by four tenths of
one percent or one hundred and ninety six points lower,
SMP five hundred down over a third of a percent
or twenty four points lower, Nasdaq down by four tenths
(20:21):
of one percent. Russell two thousand is down about a
third of one percent. Tenyure treasreel flat currently at four
point one four percent, and crude oil down about four
tenths of one percent. Trating its sixty two dollars and
thirty one cents a barrel. Delta reported stronger than expected
third quarter results, where the airline issued strong guidance, saying
(20:41):
it expects a resurgence in travel demand to continue in
the holiday season. Delta stock is up nearly five percent. Meanwhile,
Pepsi stock is rising over two percent now after the
snacks and beverage Giant also impressed for its third quarter results,
beating on earnings and revenue. Elsewhere, shares in luxurit car
our maker Ferrari skating thirteen percent after the company trimmed
(21:03):
its electrification targets. Ferrari said it expects its twenty thirty
sports car model lineup to be made up of only
twenty percent fully electric vehicles, down from its prior target
of forty percent EV sales by the end of the decade.
Mp Materials up over seven percent after BMO Capital Markets
reinstated coverage at a market perform rating, calling the rare
(21:26):
earth metals producer a rare earth champion following its partnership
with the Department of Defense. Separately, China said it tightened
rare earth export controls ahead of a potential meeting between
President Trump and Chinese President Ji Chimping and Open AI's
short form AI video app, Sora hit one million downloads
(21:46):
in less than five days after its launch in late September.
That according to an executive. I'm Tucker Silva and that
is Wall Street Watch. And in the previous segment, we
asked you the trivia question, what song did one hundred
of radio stations play on John Lennon's fiftieth birthday? That
would be imagine. Jay from centraral Mass is our winner
(22:08):
today taking on the Financial Exchange Show, t shirt. Congrats
to Jay, and we played trivia every day here in
the Financial Exchange See complete contest rules at Financial Exchange
Show dot com.
Speaker 3 (22:19):
Did Tucker say that Sora had was that a million downloads?
Tucker correct, that's correct.
Speaker 2 (22:25):
Daddy's correct.
Speaker 3 (22:27):
So you're tell me that humans are spending I don't know,
five hundred billion dollars a year building out these AI
dedit data centers. What'd you use them for? Did they
like design drugs to help cure diseases? Did they you know,
help us, you know, make nuclear fusion possible? No, we
made videos of penguins sliding down like ice luges.
Speaker 5 (22:48):
Okay, I used it to write a silly poem to
my daughter the other day.
Speaker 2 (22:54):
Was it good?
Speaker 4 (22:55):
No?
Speaker 1 (22:55):
No?
Speaker 4 (22:56):
You know what else? I couldn't have done better myself?
But I'm not much.
Speaker 3 (23:01):
You know what else people are saying isn't good? The
new stripped down Tesla model. Why is shocking Inside EV's
This is the headline from them, quote model trash. Even
Tesla fans are slamming its hyped up, cheaper revs. So
I actually have some sympathy for Tesla on this, quite honestly.
And the reason why is there's no other automaker where
when you release a new model, it immediately gets like scrutinized,
(23:25):
like hey, is the cup holder like this or this
or that. I mean, we covered the story about the
VW Bus, which, if you remember, I was pretty interested
when they said they were gonna re release that. I'm like,
that's gonna be my new car. And then it turned
out it was horribly overpriced, had no range. Oh and
by the way, some guy in Volkswagen didn't even do
the proper regulatory research and so they had to mail
(23:46):
everyone these like seat reduce sizor things because they made
the rear seat too big. To only have two seat
belts and they had to artificial shrink it after they
sold the car, and and that didn't get like giant
publications writing about it or anything. But with Tesla, hey
(24:06):
you get rid of like a USB sport, and people
are like, oh, how could you do that? You got
rid of a USB port and so so here's.
Speaker 5 (24:14):
The real problem for Tesla is that their customer base
is pegged to this idea that there's someday going to
get a Tesla for twenty five thousand dollars.
Speaker 4 (24:21):
And I'm here to say it's never going to happen.
Speaker 2 (24:23):
Yes, I agree.
Speaker 5 (24:25):
One, that promise was made like seven years ago when
it was maybe feasible to do. So today there's no
way you can it for an electric vehicle, just with inflation.
Speaker 3 (24:34):
Twenty five thousand dollars when that promise was made is
probably around thirty three thousand today.
Speaker 5 (24:39):
Ok So you're getting still not there, but closer with
this new model. Why And yeah, I mean, look, I
get why folks are Here's why I'm disappointed. This is
in no way innovative from what they were doing previous.
Speaker 3 (24:55):
No, they stripped a bunch of stuff out and said, okay,
here's a car that's five cheaper, and I guess people
are like upset that it's only five thousand dollars cheaper
and not more for what they stripped out of it.
Speaker 5 (25:10):
Yeah, okay, Like, here's my solution for you. Don't buy it? Like, no,
it's more fun to complain about it on that, Chuck.
Speaker 3 (25:18):
I'm just tired of people complaining over like dumb stuff
about like, oh, there's not enough USB ports. Well buy
a different car, get a USB splitter, or do something
other than like write a tweet about it.
Speaker 5 (25:29):
Just to be clear, is this the guy who was
complaining to me yesterday about his daughter eating too many blueberries? No, Chuck,
I was having a good conversation yesterday with somebody about
four to one case in the complexity specifically around retirement
accounts and rmds, And here was her situation.
Speaker 2 (25:48):
We were there.
Speaker 5 (25:50):
I was meeting with a daughter and her mother. Her
mother is ninety years old, and we were talking through
what happens if she.
Speaker 4 (25:56):
Dies with an IRA.
Speaker 5 (25:58):
And this woman, the daughter had actually lost her husband
recently and so she had inherited an IRA from there,
and she was confused about the R and D rules.
And I said well, that's understandable because three different sets
of rules apply to you in these three different circumstances. One,
you have your own retirement account where you are going
to face requirementimum distributions. Two, you may have your mother's
(26:19):
retirement account, where a fully different set of rules applies
to you because you are her daughter. And then three,
your husband passed away and left you were a retirement account,
and a different set of rules applies to that one
than the one you're going to get from your mother.
And I was left almost not fully understanding.
Speaker 4 (26:34):
It all myself. We were able to get there, we're
able to explain it all.
Speaker 5 (26:37):
But these rules are immensely complex, I joked to her,
which wasn't much of a joke, because it's kind of
true that Congress is giving me a financial advisor and
your CPA permanent job security by how complicated they are
making these rules, which is just lovely for those that
charge for doing this sort of thing. But I am
(26:57):
here to say that if you're not familiar with how
these rules work, and specifically how they have changed over
the course of the last few years, it is immensely
important to learn about it. If you are going to
have an ira have one now or will inherit one
in the future. I then brought up a completely different
situation because my own mother in law was in the
(27:18):
situation where she lost a loved one who was her
not married partner, who was younger than her, and a
different set of rules applied to her on that one
than the woman who's going to hear it from her mother.
It is incredibly complicated how all of this works. It
depends who is leaving you the retirement account, what type
of retirement account you have, whether it's sponsored by your
(27:40):
employer versus one that you funded on your own. And
we have a brand new guide about the subject for
the month of October. It updates with all the new rules.
It's from the Armstrong Advisor Group. It's called Understanding Required
Minimum Distributions. It's also well timed because you have three
months left to figure this out before the end of
the year. If you'd like your copy, you can call
the Armstrong Advice Group at eight hundred three nine three
(28:02):
four zero zero one and request of your copy.
Speaker 4 (28:04):
It is free. You can also request it online at
Armstrong Advisory dot com, but that phone number is eight
hundred three nine three four zero zero one.
Speaker 1 (28:17):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.
Speaker 3 (28:33):
Mike, you had a piece near about startup staying private longer.
It's basically, hey, they have more access to capital, so
they don't have to go public until later on, and
thus you don't get to buy Amazon when it's one
hundred million dollar company. You have to wait until you
can buy maybe eventually open Ai when it's like a
five hundred billion dollar company.
Speaker 4 (28:52):
I mean, they're already half a billion dollar company now.
Speaker 5 (28:54):
Yeah, So I let's skip it and make fun of
Jamie Diamond and said, Okay, Jamie Diamond said there's a
thirty percent chance of a correction, which he's pretty much.
Speaker 4 (29:04):
Said every time right over the last seven years.
Speaker 3 (29:06):
Jamie's like basically been permanently stuck at thirty percent, which
which makes you wonder, like why does this keep getting
written about?
Speaker 2 (29:14):
Is if it actually means something?
Speaker 5 (29:16):
Also, if you think there's a thirty percent chance of
a correction. That means there's a seventy percent chance that
there is no correction.
Speaker 2 (29:21):
Right, Why isn't it written that way?
Speaker 5 (29:23):
Seventy percent likelihood that stocks go down less than twenty
percent and over one periods ten percent. Okay, so stocks
stay where they are or go down by less than
ten percent, is what Jamie is saying, or go up.
Speaker 4 (29:36):
Does anyone we've got a.
Speaker 5 (29:37):
Group full of people here because we're broadcasting from the
margaritea the resort. No offense to Jamie Diamond. He runs
probably the best run bank in the world. Does anyone
find that to be useful investing thesis that markets are
he's worried that there's a thirty percent chance of a correction.
Anybody finding that terribly useful information? I I'm not particularly so.
(29:57):
I don't know what anyone else is supposed to do
with that information. And it goes along with every other
comment he's made over the last several years where he
thinks that there was an economic Was it.
Speaker 2 (30:07):
A hurricane that was coming to a hurricane?
Speaker 4 (30:11):
I don't know.
Speaker 5 (30:11):
I think that Jamie Diamond runs a really good bank
and is not putting together a whole lot of useful
information when it comes about his concerns regarding the stock
market or the economy.
Speaker 3 (30:22):
Sloral Exotica, Who's the biggest eyewear company in the world.
They own like all the ray Bands and Oakley's and
basically have a major brand of eyewear they own. They
are reportedly going to be expanding their smart glasses production
to ten million annual units by the end of the
year because they think this is going to be the
next smartphone.
Speaker 4 (30:44):
No, it's not.
Speaker 3 (30:45):
Has anyone in this room seen anyone wearing smart glasses? Okay,
I don't know if that's gonna work out well for them.
Let's take a quick break. When we return, let's do
a little bit of stack rue.
Speaker 1 (30:58):
Let's do 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 livee on Serious XM's Business Radio channel one thirty
two faces the Financial Exchange Radio Network. The Financial Exchange
(31:20):
streams live on YouTube. Like our page and stay up
to date on breaking business news all morning long. This
is the Financial Exchange Radio Network.
Speaker 6 (31:36):
This segment of the Financial Exchange is brought to you
by the US Virgin Islands Department of Tourism.
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(32:03):
Playing your falloscape now at visit USBI dot com. That's
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Speaker 4 (32:10):
MIKE.
Speaker 3 (32:10):
The Center for Democracy and Technology WHO'S, a nonprofit group,
conducts an annual survey of middle schoolers, high schoolers, teachers,
and parents and found the vast majority of people across
those demographics had used artificial intelligence in the last school year.
Speaker 4 (32:31):
Fine not surprising.
Speaker 3 (32:32):
They also found that nearly one in five high schoolers
say they or someone they know has had a romantic
relationship with artificial intelligence one and what one in five wow,
and forty two percent of student surveys say they or
someone they know have used AI for companionship, and I
gotta say, this is a problem, and it's going to
(32:58):
get worse if we don't do something thing about it.
There's no doubt in my mind that people are lonely.
Like basically every study shows out there that people are
lonelier now than they've ever been. We don't see enough people,
we don't hang out with enough people. I mentioned like
in passing yesterday, like just kind of jokingly but kind
of not. Like maybe the problem is now that we're
(33:18):
not drinking enough alcohol anymore. That was Tuesday, Okay, Yeah,
Like we got to just like get out and like
hang out and drink with each other and run around
and listen to music and whatever, because otherwise we're gonna
end up talking to computers that aren't real people and
are just gonna tell us whatever we want to hear. Now, granted,
there's some people that you'll meet that will tell you
(33:40):
whatever you want to hear, too true, but you usually
know that they're full of it and you move on.
Speaker 2 (33:45):
Yeah.
Speaker 5 (33:46):
I was speaking with some other people about this with
kids older than mine. My kids are not my oldest
ones aren't even ten years old yet. And we fortunately
have prevented them from using social media or AI.
Speaker 4 (33:57):
Or even a cell phone.
Speaker 5 (33:58):
But for those with teenage kids, they certainly get a
lot of exposure to AI, and they are clearly using
it a lot for school work, which I don't think
is actually necessarily a bad thing, so long as it's
detectable and the teachers are able to teach with it.
The scary things that I was hearing was how frequently
there were children were using AI to make everyday life
(34:20):
decisions like where should I get lunch?
Speaker 2 (34:25):
I just you got to build that muscle yourself.
Speaker 5 (34:27):
Yeah, I mean, if you can't decide on your own
where you should have lunch today, or you know, what
color shoes you should wear, and you're relying on a technology,
I have no idea what that means for development. It
probably means really good things for the AI companies that
develop these things. But like we saw with social media
(34:48):
and adoption from I guess gen Z was really the
first generation to come of age with social media being
a prevalent role in their everyday life.
Speaker 4 (35:00):
Yeah, not exactly.
Speaker 5 (35:02):
A good thing. And by the way, that piece of
you know, relationship with AI. We've talked at length about
how these companies have done a part of my language,
piss poor job of managing themselves and having policies in
place to prevent this sort of thing. What was the
Facebook written policy on this subject prior to it getting
(35:23):
disclosed in a paper?
Speaker 3 (35:24):
It allowed for sexually explicit conversations with thirteen year olds.
Speaker 4 (35:30):
Which is not really good.
Speaker 5 (35:32):
Again, this isn't like, oh, this accidentally happened. This is
it was written for. Facebook created a policy saying this
is what's okay, and this is not what's not okay.
It's not some AI that created this policy. It was
an explicit policy that created So like what no, no,
you finished, then I'll go Like with any technology, as
we've talked about, there are going to be many horror
(35:53):
stories from artificial intelligence, just as there were with the internet, right,
like changed our everyday lives and a lot of really
negative things have occurred because of it. Okay, so you
said it's not like AI wrote this like that policy.
Speaker 4 (36:06):
Well maybe it did.
Speaker 3 (36:07):
So I'm not generally a big conspiracy guy. It's not
usually where my head lives. But isn't the most plausible
explanation to all of this that the AI has already
achieved sentience and is making us do this in order
to exterminate us.
Speaker 2 (36:24):
No, Michael, Mike, I do.
Speaker 5 (36:28):
Believed policy and no human then read it, Mike, use
up all your resources, building data centers, take all your
electricity and give it to me, like screw up your
kids through like these artificial relationships.
Speaker 2 (36:42):
Like isn't this exactly what a I would do if
it wanted to take over.
Speaker 4 (36:46):
Your hold on your your tinfoil Hat's not fit.
Speaker 2 (36:49):
I'm telling you, Michael, do you leave it under the
table here?
Speaker 3 (36:52):
I'm just saying, like the thoughts crossed my mind from
Ante and it's never fully left.
Speaker 5 (36:57):
Important story of the day that we haven't covered yet.
China has dramatically expanded their rare earth export controls today,
adding five new elements and extra scrutiny for semiconductor users
as they tighten the control over the sector, right ahead
of the talks between President Trump and Shijing Ping. Not
surprising the timing on this. If there is one lever
(37:19):
that China controls in negotiations with the United States and
the rest of the world, quite frankly, it is on
the subject of rare earth because they are the only
country in the world that produces a whole bunch of
them that go into everything from semiconductors to fighter crafts.
So not surprising that they are restricting this once again.
(37:39):
They will most certainly want to use it as a
lever in negotiations, but important to mention because it is
literally what makes the world work.
Speaker 3 (37:50):
Right now, taking a look at markets as we head
towards the top of the eye of the s Andps
down fifteen points, Dows off one hundred and forty two,
Nasdaq is off sixty six.
Speaker 2 (37:59):
We are done for the day.
Speaker 3 (38:02):
But don't be sad. We'll be back tomorrow. Right, Tomorrow's Friday,
it is.
Speaker 2 (38:06):
It is.
Speaker 3 (38:07):
Yeah, we'll go to b still no government economic data,
but we get to talk about Michigan consumer sentiment and.
Speaker 2 (38:12):
Whether it means anything.
Speaker 4 (38:15):
Find out tomorrow.
Speaker 2 (38:16):
Yeah, you can find out tomorrow on the Financial Exchange.
We'll see you then,
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