November 20, 2025 • 39 mins
Chuck Zodda and Mike Armstrong discuss the strongest buyer's housing market in over a decade. The American middle class is shrinking. Is that such a bad thing? Blue Owl money machine sputters in face of private credit cracks. Buffett's Alphabet blessing puts valuation paradox in focus. Teens seek mental-health help from Chatbots. Yikes!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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 (01:09):
Chuck Mike Tucker with you here on a Thursday and
Busy one. At eight thirty this morning, we received the
jobs report for the month of September, delayed about a
month and a half due to the government shutdown. But
what we saw was a pretty good report, quite honestly,
one hundred and nineteen thousand jobs created, but the unemployment
(01:31):
rate did rise to four point four percent. A lot
of the supplemental under the hood things did show some stability.
So I think this is a nice bounce back report
after several months of weakness. Whether this becomes the start
of a new trend or just an outlier, we don't
know yet. We're gonna have to watch the next couple
months to see, but it was I would probably grade this, Mike,
what do you say, like B BB plus somewhere in
(01:54):
that range.
Speaker 3 (01:57):
I don't know that I go B plus on it.
Given the unemployment, right, Chie.
Speaker 4 (02:00):
Let's call it a B even call it B mine.
Speaker 2 (02:04):
Some of these other ones we've talked about have been,
you know, in the seed to D range recently, and
so this is it's an improvement. Nonetheless, Also, we received
in video earnings after the Bell yesterday they were very
quite good, and the market is rewarding them, though not
as much as in the after hours period. They're about
two and a half percent now after being up about
five after hours yesterday. But in Vidia continuing to say, hey,
(02:29):
you want chips, we got chips.
Speaker 4 (02:33):
That's I believe.
Speaker 2 (02:34):
The great philosopher Jensen Huang said that several days yesterday
yes other things that we saw Walmart continuing to sell
other kinds of chips to anyone who wants them. Walmart
with a fantastic quarter of the stock up about six
percent as a result, in particular indicating they're seeing more
penetration in high income areas, which does raise the question
(02:58):
of okay, is that high income people train down and
how does that affect the overall economy. The answer so
far has been, well, it hasn't really. But ultimately another
good quarter for Walmart. Grocery store sales continuing to remain strong,
unlike Target which saw some weakness there, and Walmart seeing
much better on the discretionary purchase side of things than
what Target reported, and so you continue to see a
(03:20):
big divergence between where those two companies are going, as
well as far as the overall markets, Dow is up
five hundred and thirty four points right now. S and
P's up eighty eight, both you know, good numbers. The NASDAC,
by the way, about three hundred and seventy points, all good,
but all these also down about two thirds of a
percent from their morning high. So could just more. I mean, look,
(03:44):
I have no idea where markets are gonna go like
five hours from now, but this could be a little
bit of a wobble, or it could just you know,
be something where you know, it's you know, stocks starting
to give up gains after the initial burst of optimism.
Speaker 4 (03:58):
I have absolutely no clue in either case.
Speaker 5 (04:00):
It's a reversal of what we saw towards the end
of last week, in the first few days of this
week in terms of market action, which had been you know,
largely negative, not dramatically, you know, not five percent in
a day down, but you know, strong push downward on
overall indices over the course of the last week or so.
Speaker 3 (04:18):
And this is reversing it so far this morning.
Speaker 2 (04:20):
You want to know what is kind of interesting to
be looking at that equildly markets, Mike, So you get
a good day like this, right at least a good,
you know, couple hours like this, and typically this serves
to kind of bob the VIX on its head pretty good,
it has to a certain extent. We're up over you know,
twenty three, closing in on twenty four yesterday, but you're
(04:42):
sitting here today. The S and P's up you know,
one to quarter percent, and the VIX is still hanging
out in near twenty one.
Speaker 5 (04:49):
Yeah, that doesn't feel great, and it has been for
the last few weeks.
Speaker 3 (04:52):
Right.
Speaker 2 (04:53):
He continues to have that vibe of like somebody knows
something out there and doesn't want to move on, and
I can't reconcile, like what's happening here because a VIX
over twenty like for the like in this environment, you know,
for the last five six years generally tells you like
something's getting dodgy. And usually it's say, once you get
(05:14):
to twenty five, you either like have something break and
you go higher into the thirties or things resolve and
you get back down into the teams pretty quickly. The
fact that we're still hitting here sitting here, We've cleared
Nvidio earnings, we've cleared that September job support, we've cleared
the backlog on jobless claims on top of which, by
the way, next week is Thanksgiving, which means you have
(05:34):
a day and a half where there's no trading, which
normally depresses the VIX anyway, since those days will fall
in the thirty calendar day window, and the fact that
you're still hit sitting here right now with VIX at
twenty one kind of has me like, you know, like
just scrache. I'm feeling something in my belly that I
don't know what to do with, and it doesn't feel great,
(05:59):
is what I'm saying. Let's talk about the housing market.
If you are a buyer for homes specifically, take the
map of the United States and make an l like
my two year old likes to where it's kind of
a short, little vertical thing and then a big, long,
horizontal one. And that's the part of the country where
(06:22):
there's great buyers markets right now. You go from Washington
through California, down through Arizona, and then across the southeast
and southwest. That is where it is a huge buyer's
market at the moment in general, and.
Speaker 5 (06:35):
So according to excuse me, Redfinn, this is the strongest
buyer's market, meaning portion of home sellers versus buyers since
twenty thirteen. I don't know that that's the best way
to look at it, But I also measure that. I
mean like traffic volume, my website volume.
Speaker 3 (06:52):
I don't know.
Speaker 5 (06:53):
I'm not sure how useful of a data point that
truly is, but I it's like.
Speaker 2 (06:58):
When stocks go down and people are like, well, it's
more sellers than buyers, and I remind them, no, it's
just the sellers and buyers matched up at a lower
price point. You can't have more sellers than buyers.
Speaker 5 (07:08):
So in either case, I think we can both admit, right, like,
the housing market has weakened significantly, but.
Speaker 3 (07:16):
It hasn't become a lot more affordable.
Speaker 5 (07:18):
And so I was interested in these data points, right,
So like housing market today versus twenty thirteen.
Speaker 3 (07:23):
So I ran some numbers.
Speaker 5 (07:25):
Median home price for most recent data we have in
the US Q two of twenty twenty five came in
at just shy at four hundred eleven thousand, same time
period twenty thirteen, we were talking about two hundred and
sixty eight thousand, No huge surprise there. We were still
off of the Great recession. Mortgage rates now six point
four percent back then three point seven percent. I ran
(07:48):
out the mortgage for these median homes in twenty thirteen
versus now, and.
Speaker 3 (07:53):
Your mortgage payment for now over two thousand bucks per month,
whereas back then just under one thousand dollars a month.
Seems like a huge dramatic shift.
Speaker 5 (08:03):
But I also point out that folks hashold income today
or at least in twenty twenty four was about eighty
four thousand, back then was fifty four thousand. So your
percentage of your income going to your annual mortgage payment
today is pushing thirty percent, which is a huge number.
Back in twenty thirteen it was twenty two percent. Though
I expected that margin to be different, to be bigger,
(08:26):
given how much home prices have risen and given how
much mortgage rates have risen. But we are again in
this area here where I think the affordability piece is
going to slowly get better over the course of the
next couple of years.
Speaker 2 (08:40):
Right the path in my opinion, and this is one
one that's shared by Connorsen from Bloomberg, is I don't
think you necessarily see a housing crash that resolves this,
but it's much more just that. Okay, if you have
a couple years, like three four years where incomes can
(09:00):
outpace home price growth by two to three percent. It
gets you where you need to be. Does that happen
or do we see a problem in the housing market? First, again,
when we when I say a problem in the housing market,
there's nothing out there in housing that looks like two
thousand and eight. No, there's nothing that. I mean, people
have been trying. Everyone's been publishing the headlines for like
(09:23):
the last couple of years, like oh for closers or
rising in this It's like, yeah, they're rising off historic lows.
There's still like well below twenty nineteen levels. There's there's
nothing in housing to me that looks like it's going
to cause any kind of broad based financial stress in
the system. The only place you could maybe point to
in housing that could be a problem is construction layoffs
(09:44):
if new construction for housing remains this light. But that's
not something that causes systemic issues for the whole you know,
for everyone in the country.
Speaker 3 (09:53):
Right.
Speaker 2 (09:54):
So housing, like again it's I look at and I go,
I don't I think it's really gonna help the economy
much in the next couple of years.
Speaker 4 (10:04):
But I don't really see a path where it hurts
the economy a ton either.
Speaker 5 (10:08):
Yeah, and for those that are hunting for a deal,
there are areas finally where you can find one, Yeah,
just nowhere near around.
Speaker 4 (10:17):
Here, yes, around here being New England.
Speaker 2 (10:20):
Where like if you want the worst places to buy
a house from an affordability perspective right now, Yeah, Connecticut
is kind of like right at the forefront. The rest
of New England, most in New York and Pennsylvania through Illinois,
even into like Minnesota, La. That whole belt there not great.
You get out of that region and things start to
(10:41):
look better in lots of the country, but the Northeast
and Upper Midwest pretty dodgy still if you are a
buyer to find anything affordable.
Speaker 4 (10:50):
Let's take a quick break.
Speaker 2 (10:51):
When we come back, we've got trivia, and then we'll
talk about the shrinking American middle class.
Speaker 1 (10:58):
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
livee on Serious XM's Business Radio Channel one thirty two.
Face He's the Financial Exchange Radio Network. The Financial Exchange
(11:19):
streams live on YouTube. Subscribe to our page and stay
up to date on breaking business news all morning. Long face,
He's the Financial Exchange Radio Network.
Speaker 6 (11:34):
Hey, if you missed any of our shows this week,
you can find them on our YouTube page. We stream
the show live every day, but also archive every hour
and all of our most noteworthy interviews.
Speaker 4 (11:47):
Go to YouTube.
Speaker 6 (11:48):
Search for the Financial Exchange in that search bar and
hit that subscribe button again. Financial Exchange Show on YouTube.
Hit the subscribe button.
Speaker 4 (11:59):
Time for sure.
Speaker 6 (11:59):
Here the Financial Exchange and on this day in nineteen
eighty five, Microsoft release Windows one point zero. Windows is
the most popular desktop operating system in the world, with
the seventy two percent market share as of October twenty
twenty five, and the second most popular operating system overall,
behind Android. So Trivir question today what version of Windows
(12:22):
was released by Microsoft earlier this year? Once again, what
version of Windows was released by Microsoft earlier this year?
Speaker 4 (12:31):
Be the third.
Speaker 6 (12:32):
Person today to text us at six one seven three
six two thirteen eighty five with the correct answer, and
you win a Financial Exchange Show t shirt once again.
The third 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 2 (12:52):
Mike piece in Bloomberg Opinion, the American middle class is shrinking,
and that's okay, gosh, that's not a sentiment that we
hear often. But why is this piece saying it's fine?
Speaker 5 (13:02):
So again, you write the article, not the headline. So
I'm wondering if she did both here. But here's a
brief summary of things in numbers. In nineteen sixty seven,
slightly more than five percent of Americans earned or received
more than one hundred and fifty thousand dollars in today's.
Speaker 3 (13:19):
Dollars currently adjusted for adjusted for inflation.
Speaker 4 (13:23):
Yep.
Speaker 5 (13:24):
Yes, now more than thirty percent of people do so.
Her point first is, hey, a larger portion of Americans
make a large sum of money. In nineteen sixty seven,
more than thirty eight percent earned or received less than
fifty thousand dollars today, that's twenty one percent, So across
the spectrum, she's saying, Hey, the middle class is shrinking
(13:48):
in a few different ways, but not from the perspective
of everyone's getting worse off. The bad part of it
that she points out, is that the wealth inequality today
compared to where it was in the sixties is almost unrecognizable.
The very rich, the top five percent, you know, really
(14:10):
bring in way more of the income than they did
in nineteen sixty seven and represent a much bigger share. So, yes,
more people are falling on the ends of those curves
towards the upside, but the very top of the crop,
the top one percent, are bringing in a lot more
of the total share.
Speaker 3 (14:26):
Of income than they were back in the sixties.
Speaker 5 (14:28):
And so, I mean, again the subject of the article says,
it's not a big deal. I would point to this
one effect as one of the main causes of you know,
what we're seeing in terms of populism and you know,
global shifts and how people view the fairness of the economy,
how people view capitalism, all sorts of changes that we've
been seeing over the last sixty years, I think are
(14:49):
primarily attributable to this effect.
Speaker 2 (14:52):
What do we do about this IW Like, let's let's
start number one. Is there something it should be done about.
Speaker 5 (15:02):
This, about the wealth effect, about the wealth inequality effect?
Speaker 2 (15:07):
Well, let's what is the actual problem that you're saying exists,
is that that top five percent is just so skewed
in terms of what they earn, and it allows them
to accumulate vast amounts of wealth, which then magnifies that
through compounding. Is that a fair assessment of the problem.
Speaker 5 (15:27):
Yeah, and again I think plenty of people would debate
me as to whether or not that is a problem.
But that is a truth today that the magnitude of
wealth accumulated the top five percent is far higher than
we've seen in the last at least the last seventy
five years.
Speaker 3 (15:44):
I don't, you know, go back to the nineteen twenties.
I'm not sure what it looked like.
Speaker 2 (15:49):
I have a very simple and elegant framework that I
think could deal with this. If we think it's a problem. Okay,
it's two parts, and I guarantee that, like everyone listening
is going to hate one of the two parts, which
is good. Like that's how you know it's a good
idea is when no one likes it. Number one, get
rid of the federal estate tax completely. Number two, get
(16:15):
rid of these step up in cost basis that occurs
when someone dies. That basically removes capital gains that have recruit.
Speaker 4 (16:22):
Over the course of their lifetime.
Speaker 2 (16:24):
They Like, if you think about it, there's no reason
why your heirs, if they decide to sell something that
you bought, should not pay any Like why do you
just get out of paying capital gains tax because you die?
Speaker 3 (16:37):
Yeah?
Speaker 2 (16:40):
You know, Like let's say that I, as an example,
I bought, you know, one of the I was one
of the first people that you know invested in Microsoft.
Speaker 4 (16:49):
Back before I was born.
Speaker 2 (16:51):
And you know, the the one hundred dollars that I
took there is now you know, a million. And I say,
I can't sell this because I'm gonna have to pay
like two hundred thousand dollars in capital gains toxes. So
how can if I die and my daughters inherit it,
why do they not have to pay any capital gains taxes?
Speaker 4 (17:07):
Just because I died?
Speaker 2 (17:10):
They're grieving Chuck, Okay, they don't have to sell it
right away, like no one's making them sell it.
Speaker 3 (17:16):
Yeah again, I think along with that.
Speaker 2 (17:19):
The other piece, here's the third piece that that completes
the puzzle. Every single individual should have a one million
dollar in lifetime capital gains exemption. Ye before, because we
want more people to be millionaires. I want more millionaires.
I want every person in the country to have a
chance to say, hey, I made it. You know, I
(17:40):
made a million dollars and you know in selling this
business or buying this stock or doing this, and I
get to keep that. But once you've done that, then
capital games should be taxed the same way that ordinary
income is, because it's something where you want to give
everyone a chance to make that that million, so they have,
you know, that that that capital that they can and then.
Speaker 4 (18:00):
Use for life. But after that, let's treat everyone the same.
Speaker 5 (18:04):
I would say a huge contributor to this effect has
been our policies over the last fifty years.
Speaker 3 (18:13):
When it comes to monopolies.
Speaker 5 (18:15):
We have been, for whatever reason, just worse at breaking
up big companies than we were in previous decades. And
I think that is a huge contributing factor to this effect.
Speaker 4 (18:28):
Yeah, I think that's fair.
Speaker 5 (18:30):
The Amazons, the Googles, the facebooks, and by the way,
you know two of those three companies just one antitrust
lawsuits about breaking them up. So I don't think this
is about to shift anytime soon. But I think we
are doing a disservice to the general public by letting
these companies get so big and dominant. That they control
huge aspects.
Speaker 3 (18:49):
Of our lives.
Speaker 2 (18:49):
Anytime that you want to talk about, you know, more
effective anti trust enforcement.
Speaker 4 (18:53):
I'm always all ears. Yeah.
Speaker 2 (18:55):
It's one of my great flaws is that when I
hear someone talking about, hey, company have gotten too big,
I'll basically always agree with you.
Speaker 6 (19:04):
You know.
Speaker 2 (19:05):
It's just kind of how I'm wired at this at
this point.
Speaker 5 (19:08):
But again, I think when you see surprising election results
like you just did in New York City, or results
that surprise some people anyway, I look at this as
being a big contributing factor too, because people are doubting
the system that has worked in the United States for
a couple hundred years.
Speaker 4 (19:24):
Quick Break when we come back, we get the trivia
answer at Wall Street.
Speaker 1 (19:27):
Watch, bringing the latest financial news straight to your radio
every day. It's the Financial Exchange on the Financial Exchange
Radio Network.
Speaker 7 (19:49):
We're proud to announce that circle K is now the
official convenience store of the dav Department of Massachusetts. At
circle K, supporting those who bravely served our country isn't
just a commitment, it's a hard mission. Circle K is
honored to stand with the dav Department of Massachusetts to
ensure that veterans receive the care and recognition they deserve.
If you'd like to do your part, please visit DAVMA
(20:11):
dot org. Thank you for standing with circle K and
the dav Department of Massachusetts, and thank you veterans for
all you've done.
Speaker 1 (20:19):
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 6 (20:28):
Well after a strong rally in early trading, markets now
giving back some of their gains as traders react to
strong earnings in revenue forecasts from Nvidia and Walmart. The
delayed September jobs report also came in this morning above
forecasts where one hundred and nineteen thousand jobs were added
in September, higher than estimates of fifty one thousand. Right now,
(20:52):
the Dow is up six tenths of a percent. Ers
two hundred and seventy four points. SMP five hundred also
up about six tenths of a percent, cent of forty
three points higher. NASDAC up eight tenths of one percent.
It was up over two percent higher earlier, now up
one hundred and seventy nine points. RUSSED two thousand is
up over one percent. Ten your treasureeled down two basis
(21:12):
points at four point one zero two percent, and crude
oil up about six tens of a percent, trading just
below sixty dollars a barrel. And video shares are up
nearly two percent after the AI chip maker saw its
revenue searched sixty two percent year on year and issued
stronger than expected fourth quarter sales guidance. Meanwhile, the country's
biggest retailer and Walmart, posted solid quarterly results and raised
(21:36):
its outlook. Walmart also reported a four and a half
percent increasing comparable sales in the US during the quarter,
driven by consumers seeking value. Walmart is up over six
percent Elsewhere Verizon and Now so We'll cut more than
thirteen thousand jobs and its largest single layoff as it
works to reduce costs and restructure operations. Shares are up
(21:57):
modestly and shares in bath and body work are sinking
twenty three percent after the self care and home products
retailer posted third quarter results that underwhelmed, where it posted
a drop in quarterly net sales and income. The company
also slashed its annual forecast. I'm Tucker Silva and that
is Wall Street Watch and in the previous segment, we
(22:18):
asked you the question what version of Windows was released
by Microsoft earlier this year? That would be Windows eleven.
Pete from Wooster is our winner today taking on a
Financial Looks Change Show t shirt and we played trivia
every day here in the Financial Looks Change. See complete
contest rules at Financial Looks chainshow dot Com.
Speaker 4 (22:39):
I think they should rebrand Windows.
Speaker 3 (22:42):
Now.
Speaker 4 (22:43):
I don't true, It's fine.
Speaker 3 (22:47):
It's been a few decades now, pretty so solid brand.
Speaker 2 (22:50):
Stick with it no matter what they call it. People
are gonna be stuck with it.
Speaker 3 (22:54):
Windows plus Doors.
Speaker 4 (22:59):
Thank you. Mike.
Speaker 2 (23:00):
By the way, have you noticed that the S and
P is now ninety points off it's intra day high?
Speaker 3 (23:04):
I have noticed that.
Speaker 5 (23:05):
Yeah, Nasdaq was up over two percent, it's now up
two thirds of a percent.
Speaker 4 (23:09):
Yeah. I don't know what to make of this, but.
Speaker 3 (23:13):
Speaks that vix you're seeing earlier.
Speaker 2 (23:14):
I mean, Oracle's down two percent on the day now, Yeah,
AMD's down one and a half. Netflix in video, which
Tucker just mentioned, just fell half a percent in the
last minute.
Speaker 4 (23:25):
Yeah, what's going on? I don't know. I don't know.
Speaker 2 (23:28):
I can't make catcher tails out of it, but I
can't get past this nagging feeling that for whatever reason,
the bitcoin tail is wagging the dog in tech markets
right now, because every time it gets hammered, tech follows
in pretty short order. And I don't know what to
make of this, but it's kind of nasty out there.
(23:49):
I was talking about Blue Owl piece in Bloomberg Blue
Owl money machine sputters in face of private credit cracks. Michael,
where do I get a money machine?
Speaker 5 (23:58):
This has been pretty ugly for Blue Eye, just in
terms of I mean again, for a company that nobody
talked about until a year ago, the kind of pr
that they've been getting over the last couple of weeks
has been fascinating. So again, if you are just tuning
into this program, you may not have heard of Blue Owl.
They are a major player in the private credit lending space.
(24:21):
They make all sorts of loans all sorts of businesses,
and then package those loans into investable products. Some are
privately held, some are publicly traded. One of the privately
held ones. Some were redemptions than they were prepared to handle,
and so they paused all redemptions on this fund.
Speaker 2 (24:37):
By the way, their business has exploded in a positive
use of the term in the last several years. In
March of twenty one, their trailing twelve month revenue was
about three hundred million. As of their most recent quarter
that ended in September, they were at two point seventy
five billion, so nine x revenue growth in the last
four years.
Speaker 5 (24:57):
So what happened over the course of the last week
or so was that they tried to take this private
fund merger with a publicly traded fund that would have
resulted in a haircut for investors in that fund, but
give them access to liquidity, and markets kind of revolted
on the stock itself and everything along with it. What
(25:18):
I keep going back to, though, Chuck, is there's been
a bunch of blow ups in the private credit space.
Speaker 3 (25:23):
Has Blue Owl been named in any of them?
Speaker 4 (25:27):
No?
Speaker 5 (25:28):
Right, Like me, it's not to say that they don't
have problems of their own. They're a massive player here.
But when I think about the blowups that we've been
talking about, none of them have really concerned Blue Owl
or their space in this overall market right now.
Speaker 2 (25:43):
No, I mean it's been a small number to this point. True,
And again the concern is that, like my personal concern,
I'm not saying this will or won't happen. But in
spring and summer of two thousand and seven, you started
seeing like some sporadic issues with subprime in the housing market.
(26:04):
And it wasn't like no one was like, oh, like,
this is affecting everyone. It was just, oh, it must
just be like this product or this one. And within
a year it was like, no, like it's kind of everywhere.
And then six months after that it was hey, bailouts.
Speaker 3 (26:19):
Yeah.
Speaker 2 (26:20):
And so the concern that you have on this is
kind of threefold. The first is, no one knows how
big the private credit industry actually is. It's private, that's
the very nature of it. These are not loans that
are traded, you know, on publicly traded in disease. No
one knows how big this actually is. Number two, no
(26:42):
one knows how widespread the problems that are starting to
pop up are. We don't know if this is point
zero zero one percent of loans that have these issues
point one percent or one percent, and there's a big
difference between those orders of magnitude. And the third piece,
then is the combination, which is okay, depending on how
big the overall private credit market is and what percentage
(27:05):
of loans have problems. You get to a place where
it could be very problematic for the overall US economy
or it could mean nothing, and no one knows right now.
Speaker 3 (27:15):
Yeah, it's pretty opique.
Speaker 2 (27:17):
It's it's and quite honestly, this is because we've pushed
so much of this lending into these areas and away
from banks and public markets that we can't see it.
This whole non bank lending thing is going to come
back to bite us. And this might be it. I
don't know, but it might be. Like it's whenever you
take stuff out of you know, the public eye, you're
(27:41):
you're taking risks that are you know, the visibility into
this stuff is a real problem when you're trying to
navigate it and it doesn't feel great.
Speaker 6 (27:53):
The US Virgin Islands isn't just a postcard. It's alive
with rhythm, culture and celebration. This December through early January,
Saint Croix lights up with the Crucian Christmas Festival. I
heard his carnival tradition dating back to the eighteen hundreds.
There are incredible parades through Frederick Stead as the festival
village buzzes with live music, reggae and soca and local
(28:14):
island beats, as well as streets filled with the scent
of authentic Caribbean flavors. Beyond the festival, there's Saint Thomas,
fresh with cruise hub energy, duty free shopping and panoramic views.
At Megan's Bay, Saint John is quiet, wild and pure,
where every trail in beach is its own adventure. Explore
one island or all three each offer something unique, all
(28:37):
with warm hospitality in that easy island vibe. Travel from
New England could not be easier. There's no passpord needed
and no money to exchange. This holiday season, plane your
escape and fall naturally in rhythm with the heartbeat of
the islands. Visit USVII dot com and book your trip today.
That's visit USVII dot com.
Speaker 4 (28:58):
Mike, We've got peace in Bloomberg.
Speaker 2 (29:00):
Buffett's alphabet blessing puts valuation paradox back in focus. Uh
and basically paradox.
Speaker 3 (29:08):
Or is it just the fact that google stock is
really expensive?
Speaker 2 (29:12):
Google Stock's really expensive, and Buffet's not running the show
at Berkshire anymore, And so I think those two things
can be just fine.
Speaker 5 (29:20):
Yeah, I mean, look for anybody that missed it, I
know that Alphabet hasn't been the number one company mentioned
when we're talking about the AI trade, but they have
been the number one beneficiary of the AI trade. And
you look at how they're positioned. They are starting to
make their own chips, they have their own competing AI tool,
and then they also have correct me if I'm wrong, Chuck,
the most profitable business in history.
Speaker 2 (29:42):
Yeah, we got to talk a little bit about their
naming of these products.
Speaker 3 (29:49):
Did you see the image generator of that?
Speaker 4 (29:51):
I did Nana Banana Pro.
Speaker 3 (29:52):
I think it's no Banana Pro.
Speaker 2 (29:55):
Yeah, oh, the original the original thing that came across
my ticker was Nana Banana Pro.
Speaker 3 (30:00):
I'm like, oh, like your grandma, right.
Speaker 2 (30:04):
And then their developer tool kit is now Gemini Anti Gravity.
Speaker 4 (30:09):
I don't know what these things mean.
Speaker 3 (30:11):
Yeah, I don't know why Banana's in there.
Speaker 4 (30:14):
Nano Banana Pro.
Speaker 2 (30:15):
Yeah, I'd prefer Nano Banana amateur personally. Mmm, you know,
I don't think I'm skilled enough to use the professional
tools of graphic design, but uh.
Speaker 4 (30:25):
Yeah, look, I think.
Speaker 3 (30:28):
Google.
Speaker 2 (30:28):
The big thing that I will say about them is
they do appear to be doing some innovative things on
the AI side right now. Sure, their core business, while unexciting,
continues to deliver. And even though I've been pretty critical
of Google for the last like five or six years,
being like, hey, what are you guys doing that's interesting?
Speaker 4 (30:46):
I think the ai stuff is interesting.
Speaker 2 (30:48):
Enough now that you know, there might be a lot
of people after this really saying that open ai is
kind of left behind, quite honestly, which is interesting to me.
And these are people that I trust on this, and
some people saying it's like, look, it might be like
Gemini anthropic and then open ai and now everyone's tethered
to open Ai, which is kind of like not great.
(31:08):
But the other thing with Google that I do think
you have to come back to that people forget about.
They are the leaders in the driverless taxi market right now.
Speaker 3 (31:15):
Yeah with way Moo. If that ends up being a
real thing, then they are the leaders.
Speaker 2 (31:19):
They announced a big expansion to a bunch of other
cities next year a couple days ago. So yeah, maybe
I'm the worm is turning in my talk. Yeah, yeah,
let's take a quick break when we come back, Let's
do a little bit of stack roulette.
Speaker 1 (31:36):
Finding 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 have missed.
This is the Financial Exchange Radio Network. The Financial Exchange
is life on Series XM's Business radio channel one thirty
two week days from eleven to noon. Get the latest
(31:58):
business and financial news from across the country and around
the world, and keep up to date on how it
might affect your wallet. That's the Financial Exchange weekdays from
eleven to noon on Series XM's Business radio channel one
thirty two. Face He's the Financial Exchange Radio Network.
Speaker 6 (32:19):
This segment of the Financial Exchange is powered by circle
K Convenience Stores. Circle K is now the official convenience
store of the Davy Department of Massachusetts. On behalf of
circle K, Thank you veterans for all you've done.
Speaker 4 (32:34):
Mike, what do you got for me for stack Roulette?
Speaker 5 (32:37):
I've got the Wall Street Journal reporting that teens are
seeking mental health help from AI chatbots. Experts say that
that's dangerous, which no kidding.
Speaker 4 (32:49):
But tis dangerous.
Speaker 5 (32:52):
Everybody says that that's a stupid idea, I think, but
I'm not surprised either.
Speaker 3 (32:57):
I think I talked about this back in September.
Speaker 5 (33:01):
I had been at a conference and talking to a
few people who had kids that are older than mine
and them speaking to the fact that, yeah, like our
kids wake up open chat GPT and asking questions that
I feel like they shouldn't be asking, like what should.
Speaker 3 (33:15):
I do with my day?
Speaker 5 (33:17):
Like questions that chat GPT should have no context for
how to answer, and are engaging with it in ways
that I just find completely confusing. And so I can't
be surprised that they're now engaging it for when they
feel bad about themselves or have questions about.
Speaker 3 (33:38):
Their lives.
Speaker 5 (33:39):
And the only thing that I can think of that
would be dumber would be asking, like a Facebook group
about how you look.
Speaker 4 (33:48):
Right.
Speaker 5 (33:48):
I just think about how bad social media is, and
this as a general idea seems more damaging to young
people than engaging with social media.
Speaker 2 (34:01):
Yeah, I mean, I would say, I'd say there's like
a five percent chunk of me that thinks that we
should just find the off switch for the Internet and
hit it.
Speaker 4 (34:14):
I'm at fifteen percent, Like it's I'm just not convinced
that we can handle it.
Speaker 2 (34:20):
Anxiety, No, not ready, you know, it just seems like
something where it's like, hey, come back in another thousand years,
and give.
Speaker 4 (34:27):
It a go thousand years.
Speaker 2 (34:29):
Yeah, you know, I'm just not sure that we're good
at interneting. Nope, And it's the evidence is piling up
that we're pretty bad at it. Yeah, it's just it's
it's I don't think that we are capable of wielding
these tools successfully.
Speaker 3 (34:50):
Yeah.
Speaker 5 (34:51):
The uh, the concerns again, who knows what the reaction
you know, the results to young people are going to
be twenty years from now. But like we have study
after study of what happened to young people when they
engaged thoroughly with social media when their brains were still developing,
(35:13):
and the answers were really bad, And so I just
ask parents, like the goodness.
Speaker 2 (35:18):
We're using less of it now. True, the data is
starting to show that turn, especially with young users.
Speaker 5 (35:23):
Yes, because they're instead spending all their time on AI
chatbots maybe.
Speaker 2 (35:28):
And like this also then gets us to a probably
the scariest AI report that I saw that came out
yesterday from four or four media that there is a
u in ai image creation platform and erotic roleplay chatbot
that apparently was hacked or somehow left like a bunch
(35:50):
of stuff unprotected in its database. And basically what they
found out was that everyone was taking like pictures of
people in there, like in their personal lives and getting
this to generate AI images of them like naked and stuff.
Speaker 5 (36:07):
With probably no safeguards around, no age or any other
thing like.
Speaker 2 (36:11):
No, and like it was basically anyone from like public
figures to people in their own lives and pretty much like.
Speaker 4 (36:19):
This should not be allowed to exist.
Speaker 2 (36:21):
Like most of the time, I'm like, okay, like find
a way that you should like regulate it so that
it can be used like safely. Quite honestly, this should
not be allowed to exist.
Speaker 4 (36:32):
There is no using artificial for doing this.
Speaker 5 (36:37):
Using artificial intelligence for this purpose should just be.
Speaker 3 (36:41):
Banned and straightforward and no question about it.
Speaker 2 (36:44):
Like the laws on the book should basically be like, hey,
if you are caught doing this, the penalties are significant
because you know what, he.
Speaker 3 (36:54):
Has a problem.
Speaker 5 (36:56):
And don't get me wrong, I I you can absolutely
see the little teenage boy who is going to do
this out of a relatively innocent place and not ruin
somebody's ruin somebody's life.
Speaker 2 (37:15):
Yes, And I'm not saying like send that boy to
jail forever, but I'm saying that the companies that try
to offer.
Speaker 4 (37:22):
These services should not be allowed to exist. The downside
is far greater than the upside.
Speaker 5 (37:30):
Yeah, yeah, how much advertising revenue can you really pull
off of something like this?
Speaker 3 (37:34):
Good God?
Speaker 4 (37:36):
So yeah, it's good luck of parents again.
Speaker 3 (37:38):
This is why good luck grandparents.
Speaker 4 (37:40):
This is why the portion of.
Speaker 2 (37:41):
Me that continues to think the Internet might just have
to like go away is growing.
Speaker 5 (37:46):
Chuck, we would usually just spend the last ten seconds
of the show talking about markets. We need to spend
the last forty seconds negative.
Speaker 3 (37:54):
Holy cow, the NASDAK is now down.
Speaker 4 (37:56):
It takes down half a percent.
Speaker 6 (37:58):
What the hell happened?
Speaker 5 (38:01):
Yeah, this market just took a massive swing on in
video earnings that were fantastic, and we started the day
up two percent. NASDAC now down nearly a quarter of
a percent two hours later.
Speaker 4 (38:17):
This is wild.
Speaker 5 (38:18):
This is a very big swing for markets in video
earnings were fantastic, they were apparently not enough.
Speaker 4 (38:25):
Like this is a two percent intra day swing on
the S and P.
Speaker 3 (38:28):
It's a big, big move.
Speaker 2 (38:31):
Well, I guess we're gonna have something to talk about
yesterday tomorrow, which is in.
Speaker 3 (38:36):
Video stock now off half percent.
Speaker 2 (38:38):
What happens in the next four hours of trading because
I have no idea where we are going. Let's take
a quick break for the rest of the day. Tomorrow
we'll try to finish.
Speaker 4 (38:47):
Up the week. Well, we will finish up the week
Speaker 2 (38:49):
And we hope you're along for the ride.
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 (01:09):
Chuck Mike Tucker with you here on a Thursday and
Busy one. At eight thirty this morning, we received the
jobs report for the month of September, delayed about a
month and a half due to the government shutdown. But
what we saw was a pretty good report, quite honestly,
one hundred and nineteen thousand jobs created, but the unemployment
(01:31):
rate did rise to four point four percent. A lot
of the supplemental under the hood things did show some stability.
So I think this is a nice bounce back report
after several months of weakness. Whether this becomes the start
of a new trend or just an outlier, we don't
know yet. We're gonna have to watch the next couple
months to see, but it was I would probably grade this, Mike,
what do you say, like B BB plus somewhere in
(01:54):
that range.
Speaker 3 (01:57):
I don't know that I go B plus on it.
Given the unemployment, right, Chie.
Speaker 4 (02:00):
Let's call it a B even call it B mine.
Speaker 2 (02:04):
Some of these other ones we've talked about have been,
you know, in the seed to D range recently, and
so this is it's an improvement. Nonetheless, Also, we received
in video earnings after the Bell yesterday they were very
quite good, and the market is rewarding them, though not
as much as in the after hours period. They're about
two and a half percent now after being up about
five after hours yesterday. But in Vidia continuing to say, hey,
(02:29):
you want chips, we got chips.
Speaker 4 (02:33):
That's I believe.
Speaker 2 (02:34):
The great philosopher Jensen Huang said that several days yesterday
yes other things that we saw Walmart continuing to sell
other kinds of chips to anyone who wants them. Walmart
with a fantastic quarter of the stock up about six
percent as a result, in particular indicating they're seeing more
penetration in high income areas, which does raise the question
(02:58):
of okay, is that high income people train down and
how does that affect the overall economy. The answer so
far has been, well, it hasn't really. But ultimately another
good quarter for Walmart. Grocery store sales continuing to remain strong,
unlike Target which saw some weakness there, and Walmart seeing
much better on the discretionary purchase side of things than
what Target reported, and so you continue to see a
(03:20):
big divergence between where those two companies are going, as
well as far as the overall markets, Dow is up
five hundred and thirty four points right now. S and
P's up eighty eight, both you know, good numbers. The NASDAC,
by the way, about three hundred and seventy points, all good,
but all these also down about two thirds of a
percent from their morning high. So could just more. I mean, look,
(03:44):
I have no idea where markets are gonna go like
five hours from now, but this could be a little
bit of a wobble, or it could just you know,
be something where you know, it's you know, stocks starting
to give up gains after the initial burst of optimism.
Speaker 4 (03:58):
I have absolutely no clue in either case.
Speaker 5 (04:00):
It's a reversal of what we saw towards the end
of last week, in the first few days of this
week in terms of market action, which had been you know,
largely negative, not dramatically, you know, not five percent in
a day down, but you know, strong push downward on
overall indices over the course of the last week or so.
Speaker 3 (04:18):
And this is reversing it so far this morning.
Speaker 2 (04:20):
You want to know what is kind of interesting to
be looking at that equildly markets, Mike, So you get
a good day like this, right at least a good,
you know, couple hours like this, and typically this serves
to kind of bob the VIX on its head pretty good,
it has to a certain extent. We're up over you know,
twenty three, closing in on twenty four yesterday, but you're
(04:42):
sitting here today. The S and P's up you know,
one to quarter percent, and the VIX is still hanging
out in near twenty one.
Speaker 5 (04:49):
Yeah, that doesn't feel great, and it has been for
the last few weeks.
Speaker 3 (04:52):
Right.
Speaker 2 (04:53):
He continues to have that vibe of like somebody knows
something out there and doesn't want to move on, and
I can't reconcile, like what's happening here because a VIX
over twenty like for the like in this environment, you know,
for the last five six years generally tells you like
something's getting dodgy. And usually it's say, once you get
(05:14):
to twenty five, you either like have something break and
you go higher into the thirties or things resolve and
you get back down into the teams pretty quickly. The
fact that we're still hitting here sitting here, We've cleared
Nvidio earnings, we've cleared that September job support, we've cleared
the backlog on jobless claims on top of which, by
the way, next week is Thanksgiving, which means you have
(05:34):
a day and a half where there's no trading, which
normally depresses the VIX anyway, since those days will fall
in the thirty calendar day window, and the fact that
you're still hit sitting here right now with VIX at
twenty one kind of has me like, you know, like
just scrache. I'm feeling something in my belly that I
don't know what to do with, and it doesn't feel great,
(05:59):
is what I'm saying. Let's talk about the housing market.
If you are a buyer for homes specifically, take the
map of the United States and make an l like
my two year old likes to where it's kind of
a short, little vertical thing and then a big, long,
horizontal one. And that's the part of the country where
(06:22):
there's great buyers markets right now. You go from Washington
through California, down through Arizona, and then across the southeast
and southwest. That is where it is a huge buyer's
market at the moment in general, and.
Speaker 5 (06:35):
So according to excuse me, Redfinn, this is the strongest
buyer's market, meaning portion of home sellers versus buyers since
twenty thirteen. I don't know that that's the best way
to look at it, But I also measure that. I
mean like traffic volume, my website volume.
Speaker 3 (06:52):
I don't know.
Speaker 5 (06:53):
I'm not sure how useful of a data point that
truly is, but I it's like.
Speaker 2 (06:58):
When stocks go down and people are like, well, it's
more sellers than buyers, and I remind them, no, it's
just the sellers and buyers matched up at a lower
price point. You can't have more sellers than buyers.
Speaker 5 (07:08):
So in either case, I think we can both admit, right, like,
the housing market has weakened significantly, but.
Speaker 3 (07:16):
It hasn't become a lot more affordable.
Speaker 5 (07:18):
And so I was interested in these data points, right,
So like housing market today versus twenty thirteen.
Speaker 3 (07:23):
So I ran some numbers.
Speaker 5 (07:25):
Median home price for most recent data we have in
the US Q two of twenty twenty five came in
at just shy at four hundred eleven thousand, same time
period twenty thirteen, we were talking about two hundred and
sixty eight thousand, No huge surprise there. We were still
off of the Great recession. Mortgage rates now six point
four percent back then three point seven percent. I ran
(07:48):
out the mortgage for these median homes in twenty thirteen
versus now, and.
Speaker 3 (07:53):
Your mortgage payment for now over two thousand bucks per month,
whereas back then just under one thousand dollars a month.
Seems like a huge dramatic shift.
Speaker 5 (08:03):
But I also point out that folks hashold income today
or at least in twenty twenty four was about eighty
four thousand, back then was fifty four thousand. So your
percentage of your income going to your annual mortgage payment
today is pushing thirty percent, which is a huge number.
Back in twenty thirteen it was twenty two percent. Though
I expected that margin to be different, to be bigger,
(08:26):
given how much home prices have risen and given how
much mortgage rates have risen. But we are again in
this area here where I think the affordability piece is
going to slowly get better over the course of the
next couple of years.
Speaker 2 (08:40):
Right the path in my opinion, and this is one
one that's shared by Connorsen from Bloomberg, is I don't
think you necessarily see a housing crash that resolves this,
but it's much more just that. Okay, if you have
a couple years, like three four years where incomes can
(09:00):
outpace home price growth by two to three percent. It
gets you where you need to be. Does that happen
or do we see a problem in the housing market? First, again,
when we when I say a problem in the housing market,
there's nothing out there in housing that looks like two
thousand and eight. No, there's nothing that. I mean, people
have been trying. Everyone's been publishing the headlines for like
(09:23):
the last couple of years, like oh for closers or
rising in this It's like, yeah, they're rising off historic lows.
There's still like well below twenty nineteen levels. There's there's
nothing in housing to me that looks like it's going
to cause any kind of broad based financial stress in
the system. The only place you could maybe point to
in housing that could be a problem is construction layoffs
(09:44):
if new construction for housing remains this light. But that's
not something that causes systemic issues for the whole you know,
for everyone in the country.
Speaker 3 (09:53):
Right.
Speaker 2 (09:54):
So housing, like again it's I look at and I go,
I don't I think it's really gonna help the economy
much in the next couple of years.
Speaker 4 (10:04):
But I don't really see a path where it hurts
the economy a ton either.
Speaker 5 (10:08):
Yeah, and for those that are hunting for a deal,
there are areas finally where you can find one, Yeah,
just nowhere near around.
Speaker 4 (10:17):
Here, yes, around here being New England.
Speaker 2 (10:20):
Where like if you want the worst places to buy
a house from an affordability perspective right now, Yeah, Connecticut
is kind of like right at the forefront. The rest
of New England, most in New York and Pennsylvania through Illinois,
even into like Minnesota, La. That whole belt there not great.
You get out of that region and things start to
(10:41):
look better in lots of the country, but the Northeast
and Upper Midwest pretty dodgy still if you are a
buyer to find anything affordable.
Speaker 4 (10:50):
Let's take a quick break.
Speaker 2 (10:51):
When we come back, we've got trivia, and then we'll
talk about the shrinking American middle class.
Speaker 1 (10:58):
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
livee on Serious XM's Business Radio Channel one thirty two.
Face He's the Financial Exchange Radio Network. The Financial Exchange
(11:19):
streams live on YouTube. Subscribe to our page and stay
up to date on breaking business news all morning. Long face,
He's the Financial Exchange Radio Network.
Speaker 6 (11:34):
Hey, if you missed any of our shows this week,
you can find them on our YouTube page. We stream
the show live every day, but also archive every hour
and all of our most noteworthy interviews.
Speaker 4 (11:47):
Go to YouTube.
Speaker 6 (11:48):
Search for the Financial Exchange in that search bar and
hit that subscribe button again. Financial Exchange Show on YouTube.
Hit the subscribe button.
Speaker 4 (11:59):
Time for sure.
Speaker 6 (11:59):
Here the Financial Exchange and on this day in nineteen
eighty five, Microsoft release Windows one point zero. Windows is
the most popular desktop operating system in the world, with
the seventy two percent market share as of October twenty
twenty five, and the second most popular operating system overall,
behind Android. So Trivir question today what version of Windows
(12:22):
was released by Microsoft earlier this year? Once again, what
version of Windows was released by Microsoft earlier this year?
Speaker 4 (12:31):
Be the third.
Speaker 6 (12:32):
Person today to text us at six one seven three
six two thirteen eighty five with the correct answer, and
you win a Financial Exchange Show t shirt once again.
The third 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 2 (12:52):
Mike piece in Bloomberg Opinion, the American middle class is shrinking,
and that's okay, gosh, that's not a sentiment that we
hear often. But why is this piece saying it's fine?
Speaker 5 (13:02):
So again, you write the article, not the headline. So
I'm wondering if she did both here. But here's a
brief summary of things in numbers. In nineteen sixty seven,
slightly more than five percent of Americans earned or received
more than one hundred and fifty thousand dollars in today's.
Speaker 3 (13:19):
Dollars currently adjusted for adjusted for inflation.
Speaker 4 (13:23):
Yep.
Speaker 5 (13:24):
Yes, now more than thirty percent of people do so.
Her point first is, hey, a larger portion of Americans
make a large sum of money. In nineteen sixty seven,
more than thirty eight percent earned or received less than
fifty thousand dollars today, that's twenty one percent, So across
the spectrum, she's saying, Hey, the middle class is shrinking
(13:48):
in a few different ways, but not from the perspective
of everyone's getting worse off. The bad part of it
that she points out, is that the wealth inequality today
compared to where it was in the sixties is almost unrecognizable.
The very rich, the top five percent, you know, really
(14:10):
bring in way more of the income than they did
in nineteen sixty seven and represent a much bigger share. So, yes,
more people are falling on the ends of those curves
towards the upside, but the very top of the crop,
the top one percent, are bringing in a lot more
of the total share.
Speaker 3 (14:26):
Of income than they were back in the sixties.
Speaker 5 (14:28):
And so, I mean, again the subject of the article says,
it's not a big deal. I would point to this
one effect as one of the main causes of you know,
what we're seeing in terms of populism and you know,
global shifts and how people view the fairness of the economy,
how people view capitalism, all sorts of changes that we've
been seeing over the last sixty years, I think are
(14:49):
primarily attributable to this effect.
Speaker 2 (14:52):
What do we do about this IW Like, let's let's
start number one. Is there something it should be done about.
Speaker 5 (15:02):
This, about the wealth effect, about the wealth inequality effect?
Speaker 2 (15:07):
Well, let's what is the actual problem that you're saying exists,
is that that top five percent is just so skewed
in terms of what they earn, and it allows them
to accumulate vast amounts of wealth, which then magnifies that
through compounding. Is that a fair assessment of the problem.
Speaker 5 (15:27):
Yeah, and again I think plenty of people would debate
me as to whether or not that is a problem.
But that is a truth today that the magnitude of
wealth accumulated the top five percent is far higher than
we've seen in the last at least the last seventy
five years.
Speaker 3 (15:44):
I don't, you know, go back to the nineteen twenties.
I'm not sure what it looked like.
Speaker 2 (15:49):
I have a very simple and elegant framework that I
think could deal with this. If we think it's a problem. Okay,
it's two parts, and I guarantee that, like everyone listening
is going to hate one of the two parts, which
is good. Like that's how you know it's a good
idea is when no one likes it. Number one, get
rid of the federal estate tax completely. Number two, get
(16:15):
rid of these step up in cost basis that occurs
when someone dies. That basically removes capital gains that have recruit.
Speaker 4 (16:22):
Over the course of their lifetime.
Speaker 2 (16:24):
They Like, if you think about it, there's no reason
why your heirs, if they decide to sell something that
you bought, should not pay any Like why do you
just get out of paying capital gains tax because you die?
Speaker 3 (16:37):
Yeah?
Speaker 2 (16:40):
You know, Like let's say that I, as an example,
I bought, you know, one of the I was one
of the first people that you know invested in Microsoft.
Speaker 4 (16:49):
Back before I was born.
Speaker 2 (16:51):
And you know, the the one hundred dollars that I
took there is now you know, a million. And I say,
I can't sell this because I'm gonna have to pay
like two hundred thousand dollars in capital gains toxes. So
how can if I die and my daughters inherit it,
why do they not have to pay any capital gains taxes?
Speaker 4 (17:07):
Just because I died?
Speaker 2 (17:10):
They're grieving Chuck, Okay, they don't have to sell it
right away, like no one's making them sell it.
Speaker 3 (17:16):
Yeah again, I think along with that.
Speaker 2 (17:19):
The other piece, here's the third piece that that completes
the puzzle. Every single individual should have a one million
dollar in lifetime capital gains exemption. Ye before, because we
want more people to be millionaires. I want more millionaires.
I want every person in the country to have a
chance to say, hey, I made it. You know, I
(17:40):
made a million dollars and you know in selling this
business or buying this stock or doing this, and I
get to keep that. But once you've done that, then
capital games should be taxed the same way that ordinary
income is, because it's something where you want to give
everyone a chance to make that that million, so they have,
you know, that that that capital that they can and then.
Speaker 4 (18:00):
Use for life. But after that, let's treat everyone the same.
Speaker 5 (18:04):
I would say a huge contributor to this effect has
been our policies over the last fifty years.
Speaker 3 (18:13):
When it comes to monopolies.
Speaker 5 (18:15):
We have been, for whatever reason, just worse at breaking
up big companies than we were in previous decades. And
I think that is a huge contributing factor to this effect.
Speaker 4 (18:28):
Yeah, I think that's fair.
Speaker 5 (18:30):
The Amazons, the Googles, the facebooks, and by the way,
you know two of those three companies just one antitrust
lawsuits about breaking them up. So I don't think this
is about to shift anytime soon. But I think we
are doing a disservice to the general public by letting
these companies get so big and dominant. That they control
huge aspects.
Speaker 3 (18:49):
Of our lives.
Speaker 2 (18:49):
Anytime that you want to talk about, you know, more
effective anti trust enforcement.
Speaker 4 (18:53):
I'm always all ears. Yeah.
Speaker 2 (18:55):
It's one of my great flaws is that when I
hear someone talking about, hey, company have gotten too big,
I'll basically always agree with you.
Speaker 6 (19:04):
You know.
Speaker 2 (19:05):
It's just kind of how I'm wired at this at
this point.
Speaker 5 (19:08):
But again, I think when you see surprising election results
like you just did in New York City, or results
that surprise some people anyway, I look at this as
being a big contributing factor too, because people are doubting
the system that has worked in the United States for
a couple hundred years.
Speaker 4 (19:24):
Quick Break when we come back, we get the trivia
answer at Wall Street.
Speaker 1 (19:27):
Watch, bringing the latest financial news straight to your radio
every day. It's the Financial Exchange on the Financial Exchange
Radio Network.
Speaker 7 (19:49):
We're proud to announce that circle K is now the
official convenience store of the dav Department of Massachusetts. At
circle K, supporting those who bravely served our country isn't
just a commitment, it's a hard mission. Circle K is
honored to stand with the dav Department of Massachusetts to
ensure that veterans receive the care and recognition they deserve.
If you'd like to do your part, please visit DAVMA
(20:11):
dot org. Thank you for standing with circle K and
the dav Department of Massachusetts, and thank you veterans for
all you've done.
Speaker 1 (20:19):
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 6 (20:28):
Well after a strong rally in early trading, markets now
giving back some of their gains as traders react to
strong earnings in revenue forecasts from Nvidia and Walmart. The
delayed September jobs report also came in this morning above
forecasts where one hundred and nineteen thousand jobs were added
in September, higher than estimates of fifty one thousand. Right now,
(20:52):
the Dow is up six tenths of a percent. Ers
two hundred and seventy four points. SMP five hundred also
up about six tenths of a percent, cent of forty
three points higher. NASDAC up eight tenths of one percent.
It was up over two percent higher earlier, now up
one hundred and seventy nine points. RUSSED two thousand is
up over one percent. Ten your treasureeled down two basis
(21:12):
points at four point one zero two percent, and crude
oil up about six tens of a percent, trading just
below sixty dollars a barrel. And video shares are up
nearly two percent after the AI chip maker saw its
revenue searched sixty two percent year on year and issued
stronger than expected fourth quarter sales guidance. Meanwhile, the country's
biggest retailer and Walmart, posted solid quarterly results and raised
(21:36):
its outlook. Walmart also reported a four and a half
percent increasing comparable sales in the US during the quarter,
driven by consumers seeking value. Walmart is up over six
percent Elsewhere Verizon and Now so We'll cut more than
thirteen thousand jobs and its largest single layoff as it
works to reduce costs and restructure operations. Shares are up
(21:57):
modestly and shares in bath and body work are sinking
twenty three percent after the self care and home products
retailer posted third quarter results that underwhelmed, where it posted
a drop in quarterly net sales and income. The company
also slashed its annual forecast. I'm Tucker Silva and that
is Wall Street Watch and in the previous segment, we
(22:18):
asked you the question what version of Windows was released
by Microsoft earlier this year? That would be Windows eleven.
Pete from Wooster is our winner today taking on a
Financial Looks Change Show t shirt and we played trivia
every day here in the Financial Looks Change. See complete
contest rules at Financial Looks chainshow dot Com.
Speaker 4 (22:39):
I think they should rebrand Windows.
Speaker 3 (22:42):
Now.
Speaker 4 (22:43):
I don't true, It's fine.
Speaker 3 (22:47):
It's been a few decades now, pretty so solid brand.
Speaker 2 (22:50):
Stick with it no matter what they call it. People
are gonna be stuck with it.
Speaker 3 (22:54):
Windows plus Doors.
Speaker 4 (22:59):
Thank you. Mike.
Speaker 2 (23:00):
By the way, have you noticed that the S and
P is now ninety points off it's intra day high?
Speaker 3 (23:04):
I have noticed that.
Speaker 5 (23:05):
Yeah, Nasdaq was up over two percent, it's now up
two thirds of a percent.
Speaker 4 (23:09):
Yeah. I don't know what to make of this, but.
Speaker 3 (23:13):
Speaks that vix you're seeing earlier.
Speaker 2 (23:14):
I mean, Oracle's down two percent on the day now, Yeah,
AMD's down one and a half. Netflix in video, which
Tucker just mentioned, just fell half a percent in the
last minute.
Speaker 4 (23:25):
Yeah, what's going on? I don't know. I don't know.
Speaker 2 (23:28):
I can't make catcher tails out of it, but I
can't get past this nagging feeling that for whatever reason,
the bitcoin tail is wagging the dog in tech markets
right now, because every time it gets hammered, tech follows
in pretty short order. And I don't know what to
make of this, but it's kind of nasty out there.
(23:49):
I was talking about Blue Owl piece in Bloomberg Blue
Owl money machine sputters in face of private credit cracks. Michael,
where do I get a money machine?
Speaker 5 (23:58):
This has been pretty ugly for Blue Eye, just in
terms of I mean again, for a company that nobody
talked about until a year ago, the kind of pr
that they've been getting over the last couple of weeks
has been fascinating. So again, if you are just tuning
into this program, you may not have heard of Blue Owl.
They are a major player in the private credit lending space.
(24:21):
They make all sorts of loans all sorts of businesses,
and then package those loans into investable products. Some are
privately held, some are publicly traded. One of the privately
held ones. Some were redemptions than they were prepared to handle,
and so they paused all redemptions on this fund.
Speaker 2 (24:37):
By the way, their business has exploded in a positive
use of the term in the last several years. In
March of twenty one, their trailing twelve month revenue was
about three hundred million. As of their most recent quarter
that ended in September, they were at two point seventy
five billion, so nine x revenue growth in the last
four years.
Speaker 5 (24:57):
So what happened over the course of the last week
or so was that they tried to take this private
fund merger with a publicly traded fund that would have
resulted in a haircut for investors in that fund, but
give them access to liquidity, and markets kind of revolted
on the stock itself and everything along with it. What
(25:18):
I keep going back to, though, Chuck, is there's been
a bunch of blow ups in the private credit space.
Speaker 3 (25:23):
Has Blue Owl been named in any of them?
Speaker 4 (25:27):
No?
Speaker 5 (25:28):
Right, Like me, it's not to say that they don't
have problems of their own. They're a massive player here.
But when I think about the blowups that we've been
talking about, none of them have really concerned Blue Owl
or their space in this overall market right now.
Speaker 2 (25:43):
No, I mean it's been a small number to this point. True,
And again the concern is that, like my personal concern,
I'm not saying this will or won't happen. But in
spring and summer of two thousand and seven, you started
seeing like some sporadic issues with subprime in the housing market.
(26:04):
And it wasn't like no one was like, oh, like,
this is affecting everyone. It was just, oh, it must
just be like this product or this one. And within
a year it was like, no, like it's kind of everywhere.
And then six months after that it was hey, bailouts.
Speaker 3 (26:19):
Yeah.
Speaker 2 (26:20):
And so the concern that you have on this is
kind of threefold. The first is, no one knows how
big the private credit industry actually is. It's private, that's
the very nature of it. These are not loans that
are traded, you know, on publicly traded in disease. No
one knows how big this actually is. Number two, no
(26:42):
one knows how widespread the problems that are starting to
pop up are. We don't know if this is point
zero zero one percent of loans that have these issues
point one percent or one percent, and there's a big
difference between those orders of magnitude. And the third piece,
then is the combination, which is okay, depending on how
big the overall private credit market is and what percentage
(27:05):
of loans have problems. You get to a place where
it could be very problematic for the overall US economy
or it could mean nothing, and no one knows right now.
Speaker 3 (27:15):
Yeah, it's pretty opique.
Speaker 2 (27:17):
It's it's and quite honestly, this is because we've pushed
so much of this lending into these areas and away
from banks and public markets that we can't see it.
This whole non bank lending thing is going to come
back to bite us. And this might be it. I
don't know, but it might be. Like it's whenever you
take stuff out of you know, the public eye, you're
(27:41):
you're taking risks that are you know, the visibility into
this stuff is a real problem when you're trying to
navigate it and it doesn't feel great.
Speaker 6 (27:53):
The US Virgin Islands isn't just a postcard. It's alive
with rhythm, culture and celebration. This December through early January,
Saint Croix lights up with the Crucian Christmas Festival. I
heard his carnival tradition dating back to the eighteen hundreds.
There are incredible parades through Frederick Stead as the festival
village buzzes with live music, reggae and soca and local
(28:14):
island beats, as well as streets filled with the scent
of authentic Caribbean flavors. Beyond the festival, there's Saint Thomas,
fresh with cruise hub energy, duty free shopping and panoramic views.
At Megan's Bay, Saint John is quiet, wild and pure,
where every trail in beach is its own adventure. Explore
one island or all three each offer something unique, all
(28:37):
with warm hospitality in that easy island vibe. Travel from
New England could not be easier. There's no passpord needed
and no money to exchange. This holiday season, plane your
escape and fall naturally in rhythm with the heartbeat of
the islands. Visit USVII dot com and book your trip today.
That's visit USVII dot com.
Speaker 4 (28:58):
Mike, We've got peace in Bloomberg.
Speaker 2 (29:00):
Buffett's alphabet blessing puts valuation paradox back in focus. Uh
and basically paradox.
Speaker 3 (29:08):
Or is it just the fact that google stock is
really expensive?
Speaker 2 (29:12):
Google Stock's really expensive, and Buffet's not running the show
at Berkshire anymore, And so I think those two things
can be just fine.
Speaker 5 (29:20):
Yeah, I mean, look for anybody that missed it, I
know that Alphabet hasn't been the number one company mentioned
when we're talking about the AI trade, but they have
been the number one beneficiary of the AI trade. And
you look at how they're positioned. They are starting to
make their own chips, they have their own competing AI tool,
and then they also have correct me if I'm wrong, Chuck,
the most profitable business in history.
Speaker 2 (29:42):
Yeah, we got to talk a little bit about their
naming of these products.
Speaker 3 (29:49):
Did you see the image generator of that?
Speaker 4 (29:51):
I did Nana Banana Pro.
Speaker 3 (29:52):
I think it's no Banana Pro.
Speaker 2 (29:55):
Yeah, oh, the original the original thing that came across
my ticker was Nana Banana Pro.
Speaker 3 (30:00):
I'm like, oh, like your grandma, right.
Speaker 2 (30:04):
And then their developer tool kit is now Gemini Anti Gravity.
Speaker 4 (30:09):
I don't know what these things mean.
Speaker 3 (30:11):
Yeah, I don't know why Banana's in there.
Speaker 4 (30:14):
Nano Banana Pro.
Speaker 2 (30:15):
Yeah, I'd prefer Nano Banana amateur personally. Mmm, you know,
I don't think I'm skilled enough to use the professional
tools of graphic design, but uh.
Speaker 4 (30:25):
Yeah, look, I think.
Speaker 3 (30:28):
Google.
Speaker 2 (30:28):
The big thing that I will say about them is
they do appear to be doing some innovative things on
the AI side right now. Sure, their core business, while unexciting,
continues to deliver. And even though I've been pretty critical
of Google for the last like five or six years,
being like, hey, what are you guys doing that's interesting?
Speaker 4 (30:46):
I think the ai stuff is interesting.
Speaker 2 (30:48):
Enough now that you know, there might be a lot
of people after this really saying that open ai is
kind of left behind, quite honestly, which is interesting to me.
And these are people that I trust on this, and
some people saying it's like, look, it might be like
Gemini anthropic and then open ai and now everyone's tethered
to open Ai, which is kind of like not great.
(31:08):
But the other thing with Google that I do think
you have to come back to that people forget about.
They are the leaders in the driverless taxi market right now.
Speaker 3 (31:15):
Yeah with way Moo. If that ends up being a
real thing, then they are the leaders.
Speaker 2 (31:19):
They announced a big expansion to a bunch of other
cities next year a couple days ago. So yeah, maybe
I'm the worm is turning in my talk. Yeah, yeah,
let's take a quick break when we come back, Let's
do a little bit of stack roulette.
Speaker 1 (31:36):
Finding 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 have missed.
This is the Financial Exchange Radio Network. The Financial Exchange
is life on Series XM's Business radio channel one thirty
two week days from eleven to noon. Get the latest
(31:58):
business and financial news from across the country and around
the world, and keep up to date on how it
might affect your wallet. That's the Financial Exchange weekdays from
eleven to noon on Series XM's Business radio channel one
thirty two. Face He's the Financial Exchange Radio Network.
Speaker 6 (32:19):
This segment of the Financial Exchange is powered by circle
K Convenience Stores. Circle K is now the official convenience
store of the Davy Department of Massachusetts. On behalf of
circle K, Thank you veterans for all you've done.
Speaker 4 (32:34):
Mike, what do you got for me for stack Roulette?
Speaker 5 (32:37):
I've got the Wall Street Journal reporting that teens are
seeking mental health help from AI chatbots. Experts say that
that's dangerous, which no kidding.
Speaker 4 (32:49):
But tis dangerous.
Speaker 5 (32:52):
Everybody says that that's a stupid idea, I think, but
I'm not surprised either.
Speaker 3 (32:57):
I think I talked about this back in September.
Speaker 5 (33:01):
I had been at a conference and talking to a
few people who had kids that are older than mine
and them speaking to the fact that, yeah, like our
kids wake up open chat GPT and asking questions that
I feel like they shouldn't be asking, like what should.
Speaker 3 (33:15):
I do with my day?
Speaker 5 (33:17):
Like questions that chat GPT should have no context for
how to answer, and are engaging with it in ways
that I just find completely confusing. And so I can't
be surprised that they're now engaging it for when they
feel bad about themselves or have questions about.
Speaker 3 (33:38):
Their lives.
Speaker 5 (33:39):
And the only thing that I can think of that
would be dumber would be asking, like a Facebook group
about how you look.
Speaker 4 (33:48):
Right.
Speaker 5 (33:48):
I just think about how bad social media is, and
this as a general idea seems more damaging to young
people than engaging with social media.
Speaker 2 (34:01):
Yeah, I mean, I would say, I'd say there's like
a five percent chunk of me that thinks that we
should just find the off switch for the Internet and
hit it.
Speaker 4 (34:14):
I'm at fifteen percent, Like it's I'm just not convinced
that we can handle it.
Speaker 2 (34:20):
Anxiety, No, not ready, you know, it just seems like
something where it's like, hey, come back in another thousand years,
and give.
Speaker 4 (34:27):
It a go thousand years.
Speaker 2 (34:29):
Yeah, you know, I'm just not sure that we're good
at interneting. Nope, And it's the evidence is piling up
that we're pretty bad at it. Yeah, it's just it's
it's I don't think that we are capable of wielding
these tools successfully.
Speaker 3 (34:50):
Yeah.
Speaker 5 (34:51):
The uh, the concerns again, who knows what the reaction
you know, the results to young people are going to
be twenty years from now. But like we have study
after study of what happened to young people when they
engaged thoroughly with social media when their brains were still developing,
(35:13):
and the answers were really bad, And so I just
ask parents, like the goodness.
Speaker 2 (35:18):
We're using less of it now. True, the data is
starting to show that turn, especially with young users.
Speaker 5 (35:23):
Yes, because they're instead spending all their time on AI
chatbots maybe.
Speaker 2 (35:28):
And like this also then gets us to a probably
the scariest AI report that I saw that came out
yesterday from four or four media that there is a
u in ai image creation platform and erotic roleplay chatbot
that apparently was hacked or somehow left like a bunch
(35:50):
of stuff unprotected in its database. And basically what they
found out was that everyone was taking like pictures of
people in there, like in their personal lives and getting
this to generate AI images of them like naked and stuff.
Speaker 5 (36:07):
With probably no safeguards around, no age or any other
thing like.
Speaker 2 (36:11):
No, and like it was basically anyone from like public
figures to people in their own lives and pretty much like.
Speaker 4 (36:19):
This should not be allowed to exist.
Speaker 2 (36:21):
Like most of the time, I'm like, okay, like find
a way that you should like regulate it so that
it can be used like safely. Quite honestly, this should
not be allowed to exist.
Speaker 4 (36:32):
There is no using artificial for doing this.
Speaker 5 (36:37):
Using artificial intelligence for this purpose should just be.
Speaker 3 (36:41):
Banned and straightforward and no question about it.
Speaker 2 (36:44):
Like the laws on the book should basically be like, hey,
if you are caught doing this, the penalties are significant
because you know what, he.
Speaker 3 (36:54):
Has a problem.
Speaker 5 (36:56):
And don't get me wrong, I I you can absolutely
see the little teenage boy who is going to do
this out of a relatively innocent place and not ruin
somebody's ruin somebody's life.
Speaker 2 (37:15):
Yes, And I'm not saying like send that boy to
jail forever, but I'm saying that the companies that try
to offer.
Speaker 4 (37:22):
These services should not be allowed to exist. The downside
is far greater than the upside.
Speaker 5 (37:30):
Yeah, yeah, how much advertising revenue can you really pull
off of something like this?
Speaker 3 (37:34):
Good God?
Speaker 4 (37:36):
So yeah, it's good luck of parents again.
Speaker 3 (37:38):
This is why good luck grandparents.
Speaker 4 (37:40):
This is why the portion of.
Speaker 2 (37:41):
Me that continues to think the Internet might just have
to like go away is growing.
Speaker 5 (37:46):
Chuck, we would usually just spend the last ten seconds
of the show talking about markets. We need to spend
the last forty seconds negative.
Speaker 3 (37:54):
Holy cow, the NASDAK is now down.
Speaker 4 (37:56):
It takes down half a percent.
Speaker 6 (37:58):
What the hell happened?
Speaker 5 (38:01):
Yeah, this market just took a massive swing on in
video earnings that were fantastic, and we started the day
up two percent. NASDAC now down nearly a quarter of
a percent two hours later.
Speaker 4 (38:17):
This is wild.
Speaker 5 (38:18):
This is a very big swing for markets in video
earnings were fantastic, they were apparently not enough.
Speaker 4 (38:25):
Like this is a two percent intra day swing on
the S and P.
Speaker 3 (38:28):
It's a big, big move.
Speaker 2 (38:31):
Well, I guess we're gonna have something to talk about
yesterday tomorrow, which is in.
Speaker 3 (38:36):
Video stock now off half percent.
Speaker 2 (38:38):
What happens in the next four hours of trading because
I have no idea where we are going. Let's take
a quick break for the rest of the day. Tomorrow
we'll try to finish.
Speaker 4 (38:47):
Up the week. Well, we will finish up the week
Speaker 2 (38:49):
And we hope you're along for the ride.
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.