December 9, 2024 • 39 mins
Chuck Zodda and Mike Armstrong discuss Assad's rule collapsing in Syria. Will this create another power vacuum in the middle east? Why Turkey is the country to watch during the Syrian government's transition. What are some of the most well-known B2B companies? Tik Tok creators are reacting to the potential ban on the app. Nvidia hit with China probe in global tech war escalation.
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Episode Transcript
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Speaker 1 (00:00):
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(01:05):
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Zada and Mike Armstrong.
Speaker 2 (01:17):
Jack, Mike N. Tucker with you, kicking off another week
here on the Financial Exchange, and our top story today
is going to be the events that unfolded in Syria
over the weekend, as the Syrian government led by bachelor
Ala Sad has effectively been toppled by rebel forces in
(01:39):
a span of two weeks. Now pretty pretty quick in
terms of the uh, the the you know, actual events
that led to this. And we touched on this a
little bit last week. It doesn't seem like something that
a lot of people have been talking about. I know,
it's not as sexy as talking about like the Department
of Government efficiency or uh, you know, talking about, hey,
(02:01):
what did we see from the Joltz report last week,
But ultimately something that I think is very important for
a number of different reasons. And I want to get
into quite a few of these because there's there's some
meat on this one here, and this has, you know,
(02:22):
the potential to be a watershed moment as far as
what it means in global geopolitics. So let's talk about
the state of play before the last two weeks. Back
in twenty eleven, as part of the Arab Spring movement,
you had a whole bunch of uprisings throughout the Middle East,
one of which was in Syria. The Syrian government, led
(02:44):
by Ala Sad and backed predominantly by Russia and Iran,
cracked down on the protests with pretty you know, violent
tactics and basically some of the worst human rights violations
that we've seen in modern history. Some of the stuff
that's coming out of the prisons that have been liberated
(03:05):
in the last forty eight hours is about as bad
as you'll see. And the state of play in Syria
basically devolved into a thirteen year civil war, the vast
majority of which you know, happened prior to twenty eighteen
twenty nineteen, and then the last three to four years
have kind of just been a steady state where you've
(03:25):
had these rebel groups that have been present predominantly in
the northern and eastern parts of the country, and by
and large, there hasn't been a whole lot going on,
aside from some occasional skirmishes, some occasional air strikes and
things like that, but not not too much that has
been of note, as kind of jaded as that is
(03:47):
to say.
Speaker 3 (03:48):
Yeah, and I think you know again, how much of
this do we pay attention to on a day to
day basis here in the United States?
Speaker 2 (03:55):
Very little?
Speaker 3 (03:55):
But probably what you've been seeing on the ground is
less influence from arond in Russia, especially recently given their
attention being drawn elsewhere, largely Ukraine and other borders with Israel.
Speaker 2 (04:08):
So if you try to put together a diagram of
all the different groups in Syria and who supports them
and who they're supporting and so on and so forth,
it's it's freaking messy because there are no clear lines
because the area has just been ravaged by war for
the last decade and a half, and so there are
(04:30):
no clear lines as far as hey, these are the
good guys and these are the bad guys, and here's
what you should want. So if if excuse me, if
you're looking for us to tell you, hey, like this
is good or bad and here's who you should like,
you can take that and shove it.
Speaker 1 (04:48):
Like.
Speaker 2 (04:48):
There's just no way to do that, because the area
has been quite honestly a wasteland for the last thirteen years,
and that's the main reason why you've had tens of
millions of people fleeing Syria into Europe. You can actually
look today, like you go through and look at the
social media reporting on what's going on right now. There
(05:08):
are lines of people waiting to get back into Syria
right now, right for the first time in a decade.
So you look at this, and who is ostensibly in
charge of the new regime that is in Syria, which in.
Speaker 3 (05:24):
Charge at this stage, let's county out that nine ways
from Sunday, Like, yeah, seemingly in charge, but who knows
what that will actually mean three weeks from now?
Speaker 2 (05:34):
Yeah, look again, ostensibly just like who has you know,
the keys to the kingdom at the moment? And it
is a group by the name of Hayat to Rear
al Sham And they're known by the acronym HTS, just
because that's what that shortens to. And there are elements
of HTS that are formed from the remnants of al
(05:55):
Qaeda in the Arabian Peninsula as well as from Isis.
So like, there are some bad dudes inside this group.
To be clear, the leader, Abdu Mohammad al Jawani, is
someone who has gone through a what's the right way
to phrase this a extreme an extreme makeover over the
(06:17):
last year or two, similar quite honestly to what you've
seen from the Taliban in a similar time period, trying
to put on a more polished front, be a little
bit more westernized in terms of communication methods and presentation,
and also quite honestly, making some overtures to persecuted minorities
(06:40):
throughout the Syrian region as well, whether they be Christians,
whether they be Kurds, Drus like you go through the list,
and by and large it seems like there's been some
pretty strong communication and negotiation going through behind the scenes
on this, which on its surf suggests the possibility that
(07:02):
HTS is less is Lomist than it used to be.
It doesn't prove that, and ultimately how they end up governing,
if they're able to govern, is going to be what
ends up proving this out one way or another. But
to this point, like just as an example, HTS, as
they went through Aleppa, one of the other major cities
(07:22):
in Syria, they put a Christian priest in charge of
the city, which is something that if you are a
true believer is Lomist, you just don't do. Even as
a nice thing. It's just kind of fundamentally not there.
So it's again hard to tell what's real and what
isn't about this extreme makeover that HTS has gone through
(07:46):
in the last year or two. I think that it
really is going to have to the proof's going to
be in the putting in terms of how they attempt
to govern. But as someone who again for the last
forty hours, really for the last like week or so,
I've been following this pretty closely, I have a couple
buddies who are pretty plugged into it just to you know,
(08:07):
again kind of know there's stuff about what's going on here,
and their view on it is basically, hey, HTS has
been doing all the necessary legwork to try to build
up a successful state in the event that they emerge
as you know, the leader of it, whether or not
it's for real or not, it's gonna take some time
to figure out what they actually are today and who
(08:30):
they claim and you know who they claim to be,
just because you don't have to look back that far
to be like, yeah, these were the people that were
going through and basically if you weren't a strict sallapist,
they were saying, yeah, off with your head quite literally,
and so it's it's hard to tell exactly where this
is going to go. But again it's I don't think
(08:52):
you can really look at anyone who has lived through
a thirteen year civil war and say that they're either
all good or all bad simply but because everyone living
through that would do good things, bad things, horrible things,
and everything in between, just because you're trying to survive.
So what the times called. Yeah, I'm not trying to
say these are good people or bad people. I'm just
trying to say, we don't know how this is actually
(09:15):
going to play out now that they have access to
the levers of power.
Speaker 3 (09:19):
So real quickly. Do you sense that this means much
of anything for Middle East energy? For I mean, it's
generating much in terms of oil production over the last
few years. It does speak to Russia's either lack of
interest or waning influence in the area. Any big takeaways
(09:42):
if you are sitting here in the United States pretty
removed from this.
Speaker 2 (09:46):
The two big ones in my mind, Number one, Russian
and Iran's influence is diminished significantly. I mean, Iran basically
over the last three decades built a wall of proxies
that could do it's fighting for it, one of which
was the Alisad government in Syria has a blood being,
another Hamasa being another the only one that's kind of left.
(10:07):
There's this situation going on in Yemen that still is
you know, civil war ish and pretty horrible, but by
and large, like Iran's proxies, they are all reduced in
terms of their ability to act as actual fighting forces. Now, yeah,
it's just not They're just not there. So I think
(10:28):
there is the very real possibility that you see further
action from Israel against Iran in the near future, and
how that reshapes the potential Middle East as far as
energy production and the geopolitics there, I think is pretty significant.
The other takeaway is specifically with regards to Russia. Russian
and Vladimir Putin in particular has a you know, premis
(10:51):
in a thought that he puts out there that look,
Russia does not abandon its allies. In the last week.
That's exactly what Russia did in Syria simply because the
situation wasn't tenable. They were pulling up whether you're talking planes, boats,
you know, whatever, it is away from the Syrian conflict
in kind of recognition that hey, this is not going
(11:12):
to go the way that we needed to go, and
we either can't or won't commit the resources to it
in order to further what we had started, you know,
ten to fifteen years ago. I think that's pretty notable
as well, given the ongoing conflict in Ukraine right now.
So ultimately, yeah, in terms of the actual economic impact
(11:35):
of this on the world stage, in and of itself,
it's not huge. Syria is not a major economy, largely
because it's been decimated by the last fifteen years of
civil war.
Speaker 3 (11:46):
You've got estimates of seventy to eighty percent of the
population living in poverty.
Speaker 2 (11:49):
This is not a and that's the ones who stayed, right,
that's not even counting all the ones who exited just
because they wanted nothing to do with the situation. But
the other place that I think is interesting to watch
on this is Turkey's influence and how it grows. Why
don't we take a quick break I want to touch
on that, and then what it means specifically for the
(12:10):
US when we come back.
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Speaker 2 (13:13):
Still talking a little bit about Siria just because two
other parties that I want to mention in this that
we haven't really gotten into. The first is Turkey and Turkey. Wow.
I mean, like where do I start and how do
I say this in a way that allows me to
actually say it on the air. So tie up Airdiwan,
who is the President of Turkey right now. He was
(13:34):
originally the Prime Minister of Turkey from I think twenty
three through twenty fourteen before he assumed the office of president.
And the thing about Airdiwan, well, there's two things. The
first is he's an a hole, uh like, just completely like.
The second is c number one and basically he has
(13:56):
an uncontrollable lust for power and trying to make himself
look bigger than he is and will do basically anything
necessary in order to do so. The first like ten
years that he was in power in Turkey as the
Prime minister, the whole premise of it was, Hey, I'm
like restoring democracy, I'm secularizing the nation, I'm trying to
(14:17):
make it more westernized, and he was hailed as like
this visionary who saw like where the where the puck
was going and was skating towards it. The last ten
years he's basically turned into an Islamist and has gone
the exact opposite way, including you know, basically basically trying
to needle everyone out there whenever possible, just to remind
(14:38):
them that he's there. And the only reason why he
even has any power at all is because Turkey occupies
such a central and important piece of land in the
world and other than that, no one would even care
or think about this.
Speaker 3 (14:50):
Guy because he's he's not maybe not nuts, No, he's
pretty much wacky policies.
Speaker 2 (14:55):
He's just a loser, like like, that's that's just the deal.
And look, I'm kind of you know, I'm a little
bit biased on this because Turkey basically all they do
on a regular basis. Oh, hey, it's been two weeks
since we bomb the Kurds. Let's go bomb some Kurds somewhere. Hey,
you know what, way back in the day we killed
a bunch of Armenians. Are we ever going to apologize
(15:15):
for that. No, we're not, even though maybe we should.
So I'm a little bit biased against Turkey, like in general,
just because Airdiwan is not a nice dude and generally
just tries to beat upon everyone smaller than himself in
order to make him look tall. Okay, so shares a
massive border with Syria. But here's the thing. Airdiwan has
(15:36):
been one of the prime supporters of HTS, who is
going into a leadership role in Syria right now, so
potentially a pivotal move for Turkey in terms of their
influence there. And remember Turkey's part of the EU they're
part of NATO, and so this stuff matters because ultimately
you're talking about how this ends up factoring into US geopolitics,
(16:02):
and the US and Turkey they don't really get along
well right now, and they haven't for the last eight
to ten years. Turkey. When the F thirty five program
was being developed, Turkey was one of I think either
five or six countries that was selected to be part
of the manufacturing process for the F thirty five they
were gonna make, I forget exactly, I forget if it
(16:22):
was the engines or whatever they were gonna be involved there.
Turkey back in the mid twenty tens signed to deal
with Russia for S four hundred anti air missile systems,
and the US basically goes, you kidding, bro, like you're
gonna do what because here's the problem for the US. Okay,
So you've got S four hundred missile systems that are
(16:45):
Russian and you're making American planes, specifically the most advanced ones. Hey,
you've got a whole bunch of data that can be
shared if those S four hundred start, you know, just
in practice or whatever, painting F thirty fives with their
radar in order to see what the radar signature looks like.
So the US kicked Turkey out of the F thirty
five program and it's pretty much been downhill since then.
(17:09):
But the US, for lack of a better word, has
an interest in Syria being stable, just because the instability
in Syria creates instability in the EU, which in turn
influences how the US behaves. So does the US try
to find some way to play nice because the US
(17:29):
is influencing other groups in Syria as well. Right now,
there is a group called the SDF that the US
has been heavily backing. There are I think still about
like eight hundred or one thousand troops in Syria that
are US troops that occasionally, when the Turks get a
little bit out of control and you know, going after
the Kurds, the US, you know, has a couple operations.
It's like, hey, we're still here, don't mess with us,
(17:50):
is the best way I can put it. So the
US has an interest in a stable Syria, but I
don't know how interested they are and having a HTS
be the leader of that stable Syria. And so there's
going to be some negotiations and things that go on
between the US and Turkey in terms of figuring out
how this all works.
Speaker 3 (18:11):
Yeah, I think in terms of that stability that the
United States wants, the last thing on the list they
want is a whole bunch of people again trying to flee.
Speaker 2 (18:22):
A war to one. Not that manymore that can flee, Like,
if you haven't left at this point, you're probably thirteen.
Speaker 3 (18:27):
Year a civil war. So yeah, it's tough to imagine
how it gets worse than it has been for the
thirteen years. But see Libya, Sea, I Racks Sea, Afghanistan
for you know, not so distant history in terms of
how it can get, if not worse, then I guess
similarly and differently ugly.
Speaker 2 (18:47):
Other things that we just still don't know right now.
It's unclear if Alasade is actually still alive. The Russian
government has claimed that he is in Moscow and has
claimed asylum there. But there was a I don't know
if it was a Russian or a Syrian transport plane
in Aisle seventy six that took off yesterday that basically
(19:09):
disappeared from radar after a quick drop, and no one
is entirely sure if he wasn't on that plane, because
he has not actually been seen in public during this time,
so it's unclear exactly whether he's alive or not, and
that has some implications as to how this goes from
here as well. Just take a quick break. That's enough
(19:30):
Syria talk for right now. When we come back, we're
gonna be talking TikTok and in video. We've also got
Wall Street watch after this.
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Speaker 4 (20:43):
Markets are seeing modest losses to begin the week, as
Wall Street readies for a CPI inflation reading on Wednesday morning,
followed by the Producer Price Index on Thursday morning. At
the moment, the Dow is off by only twenty three points,
SMP five hundred is down by three tenths of a
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(21:06):
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or sixteen points. Tenor treasureeled is up by three basis
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up nearly two and a half percent higher this morning,
trading just below sixty nine dollars a barrel. Some news
out of Chip and AI Giant and Video this morning,
(21:26):
where China opened an antitrust probe into the chip maker
a week after the US placed additional export controls on
China's access to high end semiconductors, and Video shares are
off by over two percent. Chuck and Michael will have
more on that item.
Speaker 1 (21:41):
Coming up.
Speaker 4 (21:42):
Breaking news out of the food industry as of a
half an hour ago, where Bloomberg is reporting that Mandolize
IgGs exploring an acquisition of iconic US chocolate maker Hershey
in a potential deal that would create a food giant
with combined sales of almost fifty billion dollars. Hershey shares
are jumping fourteen percent on the news, while Mandalie shares
(22:05):
are down by two percent. A huge merger deal to
was announced in the advertising space, where inter Public and
Omnicom agreed to merge in a deal that will create
the world's largest advertising firm by net revenue. Omniicom's stock
is down by six percent, while Interpublic shares are jumping
(22:25):
by ten percent and Macy's is up over three percent
Hire today after activist investors Barrington Capital called on the
retailer to change its capital allocation plan and create a
real estate unit to maximize the value of its owned assets.
I'm Tucker Silva and that's Wall Street Watch.
Speaker 2 (22:43):
I have a question for you both before we go
to TikTok. Yes, they're just talking about one of the names.
Speaker 3 (22:48):
The two public publicist companies or the advertising companies Intercomm.
Speaker 4 (22:52):
And Omnicom, and Interpublic.
Speaker 3 (22:54):
Right, okay, so great names generally speaking, business to business
companies if they're massive or not terribly well known. We've
talked about this for like in Vidia, Right, nobody actually
knew what Invidia was, and I blame that primarily because
they don't sell to individuals. They sell to they do businesses.
Does in Vidia sell to the.
Speaker 2 (23:12):
Brendan Butter was graphics cards before all this stuff?
Speaker 1 (23:15):
Yeah?
Speaker 2 (23:16):
So granted I was like a huge nerd in high school.
Speaker 3 (23:19):
So you know, other companies do the same thing. What
do you think is the best known company that only
really sells to other businesses?
Speaker 2 (23:28):
M best known company that only sell only sells to
other businesses.
Speaker 3 (23:33):
I guess I included Nvidia in there, and so I'm
going to go primarily only sells to businesses or drives,
like ninety plus percent of their revenue from businesses.
Speaker 2 (23:42):
US steel Yeah, okay, because of its history. How often
do you go and just order an ibeam?
Speaker 1 (23:49):
Right? No?
Speaker 2 (23:50):
Never? But household name.
Speaker 3 (23:52):
I was gonna say, Salesforce is up there for me
these days because they're so prevalent. I think even though
they only sell the businesses, there's so many individual us.
Speaker 2 (24:00):
I just I don't know.
Speaker 3 (24:01):
I thought I thought it was intriguing that, you know,
still people today don't really understand what it is that
Nvidia does. And there's lots of other companies like that
that these two advertising companies, right, they created Got Milk,
and I've never heard of them most well known.
Speaker 2 (24:17):
Yeah, I'm trying to go through and think of like
who else would fall into that category. And again the
ones where you look at you're like, oh, like yeah,
they're big, but yeah, no one, no one knows them.
And I wouldn't include something like an Exon mobile. Technically
they don't sell to you, right, but like that's a
but the brand still is kind of nitty gritty, like
(24:37):
when you go to an Exon station, Yeah, it's hey,
Exon Mobile has sold to that station and that station
has bought the branding. But it's basically a franchise model.
That'd be like saying McDonald's does. Yeah, I don't think
that holds up really. Yeah, I would go Steals. Yeah,
that's a fair one, only because it's history other ones
(24:59):
who sell own to like corporations, am Oracle. Yeah, that's
in the conversation. Yeap, that's in the conversation. I think yeah, Boeing.
Speaker 3 (25:13):
Yeah, sure, you know Boeing's up there, you knowing Boeing
beats out Salesforce most certainly, even though.
Speaker 2 (25:19):
Technically you can buy a Boeing jet.
Speaker 3 (25:22):
But it falls into the same categories in video, right
like ninety plus percent.
Speaker 2 (25:26):
Yeah, person's not going out and buying a Boeing jet, right,
It's true, It's true. Okay, Sorry, interesting thought exercise. We
can move on. I just I was compelled by that one.
It's funny because then you literally do just get into
all the defense contractors like Raytheon. Sure, but not.
Speaker 3 (25:39):
Again, Raytheon incredibly well known. Here does the average American
race that that is?
Speaker 1 (25:46):
No?
Speaker 2 (25:46):
Probably not? Okay, that was a good question, a good conversation.
Let's talk about TikTok. This is a company that everyone knows.
They are the social media company run by byte Dance,
who is a Chinese firm.
Speaker 3 (25:58):
With one hundred and seventy million users in the United States.
That's a compelling number.
Speaker 2 (26:02):
And because of Byteedance being based in China and the
Chinese having a national security law that requires byte Dance
to hand over any information that the Chinese government requests,
or any other company operating in China, Yes, not just excls.
Because of that, the US government earlier this year voted
to pass a bill, so this was legislated. This was
(26:24):
not an unelected judge making this decision. It wasn't an
unelected bureaucrat. It was not me, it was not Tucker.
This was the House of Representatives. And the US Senate
said we are going to ban TikTok from operating after
January nineteenth, twenty twenty five, unless it is sold to
a different buyer. That was affirmed by an appeals court
(26:49):
judge last week. And now this is the sad part
that you see, which is people have built legitimate businesses
on TikTok. I know, we like always rip on people
for being influencers and stuff like that, but the fact is,
look a lot of us are in businesses where if
you really looked at it, you'd be like, come on,
that can't be an actual business. Like, so I don't
(27:12):
bemoan anyone from getting their business off the ground on
social media or being an influencer or anything else. Like
it's listen, We're all just trying to make a few
bucks in order to try to you know, pay for
whatever it is that we're doing by the way they build.
Speaker 3 (27:24):
A past in Congress. Just so everyone's clear on this
when we talk about bipartisan past. This thing passed with
three hundred and sixty yes votes.
Speaker 2 (27:32):
You couldn't get that for you know, the sky is blue, right,
Actually you could, but it would be close. Yeah, it'd
be tight. So when you look at this, the sad
part on this is the people that have built platforms
on TikTok to be able to make a lot of
money and now just by virtue of hey, we built
(27:54):
our business in a company that quite honestly, if they
decide not to sell, it's evidence of two things. The
first is it's evidence that TikTok never really cared about
the money and that all they wanted was the intelligence collection.
Because if if bite Dad's actually cared about the value
of the asset, they sell it, they don't just say no,
we'll let this go dark on January nineteenth, right, or
(28:17):
or it's.
Speaker 3 (28:19):
You can't do that because you'll end up being disappeared
in China. I could buy that too, like not caring
about the money, or you do care about the money,
but you understand that if you do go and sell it,
then you will be disappeared in mainland China.
Speaker 2 (28:31):
Maybe sex one half does, Sex one does. I could
see that being a case. But the other thing is, look,
it's it's it's something where the parent of TikTok is
also very clearly here saying, hey, all those people who
built businesses on our platform, we don't care enough to
throw you a lifeline. Fair because they can get around this,
(28:52):
right All they have to do. All you have to
do is sell to a US company that's approved, right, Like,
that's it, And it does not seem like that's going
to be an effort that's made. So you get the
stories that are coming out about people who spent, you know,
the last five six years building these businesses on this platform.
And as someone who you know in the past has
spent a lot of time building up, you know, different
(29:14):
social media presences for different things, it takes a lot
of work. It takes a lot of time. It's a
real job. And and ultimately if it just goes away,
you kind of look at it and you're like, man, like,
why did I do that? And it's it's completely capricious,
where like the fact that you chose to build on
TikTok instead of snapchatter instead of on Twitter or wherever
(29:36):
you were saying, great, this is where the eyeballs are,
this is where I need to go. It's it's not
because you because you love the China business. We're like,
you know what, you know who really loves small business?
The Chinese Communist Party like that. That's not what anyone
starting a a TikTok channel is doing.
Speaker 3 (29:51):
And generally I feel for these creators too, because it's
not really within their purview or their job to assess
whether or not this is gonna shut down. It's a
national security threat, Like I don't really put that on
the arms of somebody who's building content on TikTok.
Speaker 2 (30:07):
But this is also why I say, look, in order
for people to be able to actually go and take risks,
you need a baseline level of stability and safety because
if if you are in a situation where, hey, if
you're in China and companies are being shut down left
and right for you know, random reasons that the Chinese
government wants to eventually just say, look, I'm not going
(30:27):
to do this because it's not worth it. And so
this is why you need to be able to catch
this stuff earlier than TikTok getting to one hundred and
seventy million users. You need a better you need a
better plan for enforcing actions against Chinese companies. Then wait
until it gets so big that everyone knows it, and
(30:48):
by then it's already a problem. You need something better
than that.
Speaker 1 (30:53):
You do.
Speaker 2 (30:53):
But that's a very quick game of whack a mole.
And I don't disagree.
Speaker 3 (30:58):
But think of the number of stuff that we import
into the United States. It's not just social media platforms,
it's everything else that's connected to the Internet, and trying
to shut it all down because it is a concern
that they can share the data. Welcome to every single
device that is connected to the Internet in your home.
Speaker 2 (31:17):
Yes, but I'm exaggerating, but that is important. I just
make this point. We all choose different jobs and different
roles in life. And for someone who's working at the
US government, whether they are representative, a senator, whether they
are in who's the group that handles the cybersecurity for
the US government, I can't remember the guy who used
(31:37):
to run. His name was Chris Krebs. I don't know
what the there's a group there that does this stuff.
And then you've also got was it Cephius the Council
for Investment in US Business. So you've got like US
government groups that their job is to not let stuff
like this get to the point where it has one
(31:59):
hundred and se any million US users. Guys, you chose
that job. We all chose our jobs. I have days
where I don't want to get up and talk on
the radio because I'm a little tired. But if I
wind and complained about that, what am I really doing?
Like you chose the job of assessing the risk of
foreign companies starting businesses in the US. You gotta deal
(32:24):
with it, yeah, like them's the breaks. We don't just
get to whine about it and say, oh, well it's hard,
like sorry, suck it up, buttercup. I don't know, Like
I don't have sympathy for someone who gets into a
business and then complain, or not even a business, gets
into a career and then just complains about the career
and how hard it is. Yeah, I'll put that mainly
(32:45):
on Congress. Either do a better job or get a
different career. But you don't just get to whind about
how hard it is, like, sorry, there's a reason why
I don't do that job, because I don't want to
wind about how hard it is. You know, let's take
a quick break. When we come back, let's talk about
the other side of this though, the potential for retaliation
from China and video in the news. This morning, I'll
(33:06):
tell you why.
Speaker 1 (33:08):
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Speaker 2 (33:42):
Last segment, we were talking a little bit about TikTok
and the upcoming TikTok band that'll start in I think
forty three days. The other side of this. Early this morning,
I wake up and I get a little biz on
my phone that says, hey, there's an update from CNBC,
The Wall Street, Bloomberg, everyone who picked it up all
at once. In Vidia reportedly being probed by China's State
(34:05):
Administration for Market Regulation for anti trust concerns and like,
hard to read it as anything other than the immediate. Really,
here's the thing. In China. You can have a monopoly
as long as the government says that you can. Yes,
we know this because in the number of industries they're
basically are monopolies of Chinese state owned enterprises. So the
(34:26):
fact that in video is being looked at here, I
have to believe is very much okay, Fine, you're going
to prevent our companies from operating easily in the US.
We're going to do the same for the biggest one
that you have here in China.
Speaker 3 (34:40):
Stock is down three percent this morning, by the way,
And you may be wondering, because it's been pretty public
that the Chinese and Chinese based companies don't really have
access to in Vidia's highest order, most technologically advanced AI chips.
The fact that matter, though, is they also produced a
whole bunch of them that are not that they produce
(35:02):
a lot of products that are sold across the globe
and in China in particular, that are not used for
developing the latest AI models or this, that or the other,
and that hit to that business. You know, the revenues
that they derive from those easier to manufacture and less
complicated chips fund a lot of the research and development
they do into these, you know, most important ones, and
(35:23):
so yes, a ban on chip you know production or rather,
you know chip consumption in the mainland China from even
these lower end chips would be pretty darn bad for Nvideo.
Speaker 2 (35:36):
So this is something where hey, if we are actually
going to try to bring about some kind of fairness
in trade with China, and you know, not just fairness
in trade, but also hey, realizing that we don't want
Chinese entities snooping around at the behest of the you know,
Chinese Communist Party. There's going to be some pain coming back.
(35:57):
This is not going to be free and easy. It's
gonna take a little bit of time and a little
bit of work.
Speaker 4 (36:02):
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Speaker 2 (36:57):
Mike, I want to go back to a topic that
we recover. I think it was a week ago, which
was the opening debuts of Wicked and Mawana too. How
they're doing not great? Really? Yes, well they're fine, Like
they're both gonna make a ton of money. Yeah, there's
there's no problem there. I noted last week. Hey, like,
based on the early returns that we're seeing, the week
(37:20):
over week drop off is pretty light on Wicked, and
so there's a chance this could be, you know, something
that runs for a while and ends up in a
pretty good spot. I got a bit an egg on
my face after this one? Can it dropped off? The
dailies that we are seeing right now are anywhere from
fifty eight to seventy one percent drop offs for this week. Actually, sorry,
forty eight to seventy one percent drop offs. Typical drop
(37:41):
off that you'd like to see is somewhere around thirty
five to forty, so they're coming in much much steeper. Granted,
some of this is you know, skewed because of the
Thanksgiving week, but it's clear that Thanksgiving week was also
propping things up a little bit. So, yes, Wicked is
going to make a boatload of money, but it's not
going to make two boatloads of money and be a
top ten movie all time in the US. Grossana too.
(38:04):
Similar story. Malana two is right in the same boat.
Actually some steeper ones. Mawana on Wednesday, which again Thanksgiving
Wednesday to this one like tough comp down ninety two steep.
Speaker 3 (38:18):
I'm just you know, finding myself as the parent of
three daughters between the ages of six and eight, shocked
that they have no interest in going to see Malwana too.
Speaker 2 (38:27):
That was played so many times in our house.
Speaker 4 (38:29):
My niece was all about it on day one but.
Speaker 2 (38:32):
Very interested in going to see Wicked.
Speaker 3 (38:33):
I think because one of their friends is you know,
big into. I think saw the Broadway play. I don't know,
can't make sense of it, but no big push to
get them tom Wana two, which I am relieved about.
Speaker 2 (38:45):
It does appear that is good, Mike, don't kid you
saw one was Yeah. The second one does not have
lin Manuel Miranda running the song, so oh, I've heard
that's a big drop off the boy. Let's take a
quick break. We got hour two coming up in a
little bit.
Speaker 1 (39:11):
Sh
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Zada and Mike Armstrong.
Speaker 2 (01:17):
Jack, Mike N. Tucker with you, kicking off another week
here on the Financial Exchange, and our top story today
is going to be the events that unfolded in Syria
over the weekend, as the Syrian government led by bachelor
Ala Sad has effectively been toppled by rebel forces in
(01:39):
a span of two weeks. Now pretty pretty quick in
terms of the uh, the the you know, actual events
that led to this. And we touched on this a
little bit last week. It doesn't seem like something that
a lot of people have been talking about. I know,
it's not as sexy as talking about like the Department
of Government efficiency or uh, you know, talking about, hey,
(02:01):
what did we see from the Joltz report last week,
But ultimately something that I think is very important for
a number of different reasons. And I want to get
into quite a few of these because there's there's some
meat on this one here, and this has, you know,
(02:22):
the potential to be a watershed moment as far as
what it means in global geopolitics. So let's talk about
the state of play before the last two weeks. Back
in twenty eleven, as part of the Arab Spring movement,
you had a whole bunch of uprisings throughout the Middle East,
one of which was in Syria. The Syrian government, led
(02:44):
by Ala Sad and backed predominantly by Russia and Iran,
cracked down on the protests with pretty you know, violent
tactics and basically some of the worst human rights violations
that we've seen in modern history. Some of the stuff
that's coming out of the prisons that have been liberated
(03:05):
in the last forty eight hours is about as bad
as you'll see. And the state of play in Syria
basically devolved into a thirteen year civil war, the vast
majority of which you know, happened prior to twenty eighteen
twenty nineteen, and then the last three to four years
have kind of just been a steady state where you've
(03:25):
had these rebel groups that have been present predominantly in
the northern and eastern parts of the country, and by
and large, there hasn't been a whole lot going on,
aside from some occasional skirmishes, some occasional air strikes and
things like that, but not not too much that has
been of note, as kind of jaded as that is
(03:47):
to say.
Speaker 3 (03:48):
Yeah, and I think you know again, how much of
this do we pay attention to on a day to
day basis here in the United States?
Speaker 2 (03:55):
Very little?
Speaker 3 (03:55):
But probably what you've been seeing on the ground is
less influence from arond in Russia, especially recently given their
attention being drawn elsewhere, largely Ukraine and other borders with Israel.
Speaker 2 (04:08):
So if you try to put together a diagram of
all the different groups in Syria and who supports them
and who they're supporting and so on and so forth,
it's it's freaking messy because there are no clear lines
because the area has just been ravaged by war for
the last decade and a half, and so there are
(04:30):
no clear lines as far as hey, these are the
good guys and these are the bad guys, and here's
what you should want. So if if excuse me, if
you're looking for us to tell you, hey, like this
is good or bad and here's who you should like,
you can take that and shove it.
Speaker 1 (04:48):
Like.
Speaker 2 (04:48):
There's just no way to do that, because the area
has been quite honestly a wasteland for the last thirteen years,
and that's the main reason why you've had tens of
millions of people fleeing Syria into Europe. You can actually
look today, like you go through and look at the
social media reporting on what's going on right now. There
(05:08):
are lines of people waiting to get back into Syria
right now, right for the first time in a decade.
So you look at this, and who is ostensibly in
charge of the new regime that is in Syria, which in.
Speaker 3 (05:24):
Charge at this stage, let's county out that nine ways
from Sunday, Like, yeah, seemingly in charge, but who knows
what that will actually mean three weeks from now?
Speaker 2 (05:34):
Yeah, look again, ostensibly just like who has you know,
the keys to the kingdom at the moment? And it
is a group by the name of Hayat to Rear
al Sham And they're known by the acronym HTS, just
because that's what that shortens to. And there are elements
of HTS that are formed from the remnants of al
(05:55):
Qaeda in the Arabian Peninsula as well as from Isis.
So like, there are some bad dudes inside this group.
To be clear, the leader, Abdu Mohammad al Jawani, is
someone who has gone through a what's the right way
to phrase this a extreme an extreme makeover over the
(06:17):
last year or two, similar quite honestly to what you've
seen from the Taliban in a similar time period, trying
to put on a more polished front, be a little
bit more westernized in terms of communication methods and presentation,
and also quite honestly, making some overtures to persecuted minorities
(06:40):
throughout the Syrian region as well, whether they be Christians,
whether they be Kurds, Drus like you go through the list,
and by and large it seems like there's been some
pretty strong communication and negotiation going through behind the scenes
on this, which on its surf suggests the possibility that
(07:02):
HTS is less is Lomist than it used to be.
It doesn't prove that, and ultimately how they end up governing,
if they're able to govern, is going to be what
ends up proving this out one way or another. But
to this point, like just as an example, HTS, as
they went through Aleppa, one of the other major cities
(07:22):
in Syria, they put a Christian priest in charge of
the city, which is something that if you are a
true believer is Lomist, you just don't do. Even as
a nice thing. It's just kind of fundamentally not there.
So it's again hard to tell what's real and what
isn't about this extreme makeover that HTS has gone through
(07:46):
in the last year or two. I think that it
really is going to have to the proof's going to
be in the putting in terms of how they attempt
to govern. But as someone who again for the last
forty hours, really for the last like week or so,
I've been following this pretty closely, I have a couple
buddies who are pretty plugged into it just to you know,
(08:07):
again kind of know there's stuff about what's going on here,
and their view on it is basically, hey, HTS has
been doing all the necessary legwork to try to build
up a successful state in the event that they emerge
as you know, the leader of it, whether or not
it's for real or not, it's gonna take some time
to figure out what they actually are today and who
(08:30):
they claim and you know who they claim to be,
just because you don't have to look back that far
to be like, yeah, these were the people that were
going through and basically if you weren't a strict sallapist,
they were saying, yeah, off with your head quite literally,
and so it's it's hard to tell exactly where this
is going to go. But again it's I don't think
(08:52):
you can really look at anyone who has lived through
a thirteen year civil war and say that they're either
all good or all bad simply but because everyone living
through that would do good things, bad things, horrible things,
and everything in between, just because you're trying to survive.
So what the times called. Yeah, I'm not trying to
say these are good people or bad people. I'm just
trying to say, we don't know how this is actually
(09:15):
going to play out now that they have access to
the levers of power.
Speaker 3 (09:19):
So real quickly. Do you sense that this means much
of anything for Middle East energy? For I mean, it's
generating much in terms of oil production over the last
few years. It does speak to Russia's either lack of
interest or waning influence in the area. Any big takeaways
(09:42):
if you are sitting here in the United States pretty
removed from this.
Speaker 2 (09:46):
The two big ones in my mind, Number one, Russian
and Iran's influence is diminished significantly. I mean, Iran basically
over the last three decades built a wall of proxies
that could do it's fighting for it, one of which
was the Alisad government in Syria has a blood being,
another Hamasa being another the only one that's kind of left.
(10:07):
There's this situation going on in Yemen that still is
you know, civil war ish and pretty horrible, but by
and large, like Iran's proxies, they are all reduced in
terms of their ability to act as actual fighting forces. Now, yeah,
it's just not They're just not there. So I think
(10:28):
there is the very real possibility that you see further
action from Israel against Iran in the near future, and
how that reshapes the potential Middle East as far as
energy production and the geopolitics there, I think is pretty significant.
The other takeaway is specifically with regards to Russia. Russian
and Vladimir Putin in particular has a you know, premis
(10:51):
in a thought that he puts out there that look,
Russia does not abandon its allies. In the last week.
That's exactly what Russia did in Syria simply because the
situation wasn't tenable. They were pulling up whether you're talking planes, boats,
you know, whatever, it is away from the Syrian conflict
in kind of recognition that hey, this is not going
(11:12):
to go the way that we needed to go, and
we either can't or won't commit the resources to it
in order to further what we had started, you know,
ten to fifteen years ago. I think that's pretty notable
as well, given the ongoing conflict in Ukraine right now.
So ultimately, yeah, in terms of the actual economic impact
(11:35):
of this on the world stage, in and of itself,
it's not huge. Syria is not a major economy, largely
because it's been decimated by the last fifteen years of
civil war.
Speaker 3 (11:46):
You've got estimates of seventy to eighty percent of the
population living in poverty.
Speaker 2 (11:49):
This is not a and that's the ones who stayed, right,
that's not even counting all the ones who exited just
because they wanted nothing to do with the situation. But
the other place that I think is interesting to watch
on this is Turkey's influence and how it grows. Why
don't we take a quick break I want to touch
on that, and then what it means specifically for the
(12:10):
US when we come back.
Speaker 1 (12:13):
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Speaker 4 (12:37):
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Speaker 2 (13:13):
Still talking a little bit about Siria just because two
other parties that I want to mention in this that
we haven't really gotten into. The first is Turkey and Turkey. Wow.
I mean, like where do I start and how do
I say this in a way that allows me to
actually say it on the air. So tie up Airdiwan,
who is the President of Turkey right now. He was
(13:34):
originally the Prime Minister of Turkey from I think twenty
three through twenty fourteen before he assumed the office of president.
And the thing about Airdiwan, well, there's two things. The
first is he's an a hole, uh like, just completely like.
The second is c number one and basically he has
(13:56):
an uncontrollable lust for power and trying to make himself
look bigger than he is and will do basically anything
necessary in order to do so. The first like ten
years that he was in power in Turkey as the
Prime minister, the whole premise of it was, Hey, I'm
like restoring democracy, I'm secularizing the nation, I'm trying to
(14:17):
make it more westernized, and he was hailed as like
this visionary who saw like where the where the puck
was going and was skating towards it. The last ten
years he's basically turned into an Islamist and has gone
the exact opposite way, including you know, basically basically trying
to needle everyone out there whenever possible, just to remind
(14:38):
them that he's there. And the only reason why he
even has any power at all is because Turkey occupies
such a central and important piece of land in the
world and other than that, no one would even care
or think about this.
Speaker 3 (14:50):
Guy because he's he's not maybe not nuts, No, he's
pretty much wacky policies.
Speaker 2 (14:55):
He's just a loser, like like, that's that's just the deal.
And look, I'm kind of you know, I'm a little
bit biased on this because Turkey basically all they do
on a regular basis. Oh, hey, it's been two weeks
since we bomb the Kurds. Let's go bomb some Kurds somewhere. Hey,
you know what, way back in the day we killed
a bunch of Armenians. Are we ever going to apologize
(15:15):
for that. No, we're not, even though maybe we should.
So I'm a little bit biased against Turkey, like in general,
just because Airdiwan is not a nice dude and generally
just tries to beat upon everyone smaller than himself in
order to make him look tall. Okay, so shares a
massive border with Syria. But here's the thing. Airdiwan has
(15:36):
been one of the prime supporters of HTS, who is
going into a leadership role in Syria right now, so
potentially a pivotal move for Turkey in terms of their
influence there. And remember Turkey's part of the EU they're
part of NATO, and so this stuff matters because ultimately
you're talking about how this ends up factoring into US geopolitics,
(16:02):
and the US and Turkey they don't really get along
well right now, and they haven't for the last eight
to ten years. Turkey. When the F thirty five program
was being developed, Turkey was one of I think either
five or six countries that was selected to be part
of the manufacturing process for the F thirty five they
were gonna make, I forget exactly, I forget if it
(16:22):
was the engines or whatever they were gonna be involved there.
Turkey back in the mid twenty tens signed to deal
with Russia for S four hundred anti air missile systems,
and the US basically goes, you kidding, bro, like you're
gonna do what because here's the problem for the US. Okay,
So you've got S four hundred missile systems that are
(16:45):
Russian and you're making American planes, specifically the most advanced ones. Hey,
you've got a whole bunch of data that can be
shared if those S four hundred start, you know, just
in practice or whatever, painting F thirty fives with their
radar in order to see what the radar signature looks like.
So the US kicked Turkey out of the F thirty
five program and it's pretty much been downhill since then.
(17:09):
But the US, for lack of a better word, has
an interest in Syria being stable, just because the instability
in Syria creates instability in the EU, which in turn
influences how the US behaves. So does the US try
to find some way to play nice because the US
(17:29):
is influencing other groups in Syria as well. Right now,
there is a group called the SDF that the US
has been heavily backing. There are I think still about
like eight hundred or one thousand troops in Syria that
are US troops that occasionally, when the Turks get a
little bit out of control and you know, going after
the Kurds, the US, you know, has a couple operations.
It's like, hey, we're still here, don't mess with us,
(17:50):
is the best way I can put it. So the
US has an interest in a stable Syria, but I
don't know how interested they are and having a HTS
be the leader of that stable Syria. And so there's
going to be some negotiations and things that go on
between the US and Turkey in terms of figuring out
how this all works.
Speaker 3 (18:11):
Yeah, I think in terms of that stability that the
United States wants, the last thing on the list they
want is a whole bunch of people again trying to flee.
Speaker 2 (18:22):
A war to one. Not that manymore that can flee, Like,
if you haven't left at this point, you're probably thirteen.
Speaker 3 (18:27):
Year a civil war. So yeah, it's tough to imagine
how it gets worse than it has been for the
thirteen years. But see Libya, Sea, I Racks Sea, Afghanistan
for you know, not so distant history in terms of
how it can get, if not worse, then I guess
similarly and differently ugly.
Speaker 2 (18:47):
Other things that we just still don't know right now.
It's unclear if Alasade is actually still alive. The Russian
government has claimed that he is in Moscow and has
claimed asylum there. But there was a I don't know
if it was a Russian or a Syrian transport plane
in Aisle seventy six that took off yesterday that basically
(19:09):
disappeared from radar after a quick drop, and no one
is entirely sure if he wasn't on that plane, because
he has not actually been seen in public during this time,
so it's unclear exactly whether he's alive or not, and
that has some implications as to how this goes from
here as well. Just take a quick break. That's enough
(19:30):
Syria talk for right now. When we come back, we're
gonna be talking TikTok and in video. We've also got
Wall Street watch after this.
Speaker 1 (19:42):
Like us on Facebook and follow us on Twitter at
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Speaker 5 (19:53):
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You'll move, protect your assets and avoid tax consequences by
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assets away from the nursing home 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 4 (20:43):
Markets are seeing modest losses to begin the week, as
Wall Street readies for a CPI inflation reading on Wednesday morning,
followed by the Producer Price Index on Thursday morning. At
the moment, the Dow is off by only twenty three points,
SMP five hundred is down by three tenths of a
percent or eighteen points, and the Nasdaq is off by
third of a percent or sixty six points. Russell two
(21:06):
thousand is up by over two thirds of a percent
or sixteen points. Tenor treasureeled is up by three basis
points at four point nine percent, and crude oil is
up nearly two and a half percent higher this morning,
trading just below sixty nine dollars a barrel. Some news
out of Chip and AI Giant and Video this morning,
(21:26):
where China opened an antitrust probe into the chip maker
a week after the US placed additional export controls on
China's access to high end semiconductors, and Video shares are
off by over two percent. Chuck and Michael will have
more on that item.
Speaker 1 (21:41):
Coming up.
Speaker 4 (21:42):
Breaking news out of the food industry as of a
half an hour ago, where Bloomberg is reporting that Mandolize
IgGs exploring an acquisition of iconic US chocolate maker Hershey
in a potential deal that would create a food giant
with combined sales of almost fifty billion dollars. Hershey shares
are jumping fourteen percent on the news, while Mandalie shares
(22:05):
are down by two percent. A huge merger deal to
was announced in the advertising space, where inter Public and
Omnicom agreed to merge in a deal that will create
the world's largest advertising firm by net revenue. Omniicom's stock
is down by six percent, while Interpublic shares are jumping
(22:25):
by ten percent and Macy's is up over three percent
Hire today after activist investors Barrington Capital called on the
retailer to change its capital allocation plan and create a
real estate unit to maximize the value of its owned assets.
I'm Tucker Silva and that's Wall Street Watch.
Speaker 2 (22:43):
I have a question for you both before we go
to TikTok. Yes, they're just talking about one of the names.
Speaker 3 (22:48):
The two public publicist companies or the advertising companies Intercomm.
Speaker 4 (22:52):
And Omnicom, and Interpublic.
Speaker 3 (22:54):
Right, okay, so great names generally speaking, business to business
companies if they're massive or not terribly well known. We've
talked about this for like in Vidia, Right, nobody actually
knew what Invidia was, and I blame that primarily because
they don't sell to individuals. They sell to they do businesses.
Does in Vidia sell to the.
Speaker 2 (23:12):
Brendan Butter was graphics cards before all this stuff?
Speaker 1 (23:15):
Yeah?
Speaker 2 (23:16):
So granted I was like a huge nerd in high school.
Speaker 3 (23:19):
So you know, other companies do the same thing. What
do you think is the best known company that only
really sells to other businesses?
Speaker 2 (23:28):
M best known company that only sell only sells to
other businesses.
Speaker 3 (23:33):
I guess I included Nvidia in there, and so I'm
going to go primarily only sells to businesses or drives,
like ninety plus percent of their revenue from businesses.
Speaker 2 (23:42):
US steel Yeah, okay, because of its history. How often
do you go and just order an ibeam?
Speaker 1 (23:49):
Right? No?
Speaker 2 (23:50):
Never? But household name.
Speaker 3 (23:52):
I was gonna say, Salesforce is up there for me
these days because they're so prevalent. I think even though
they only sell the businesses, there's so many individual us.
Speaker 2 (24:00):
I just I don't know.
Speaker 3 (24:01):
I thought I thought it was intriguing that, you know,
still people today don't really understand what it is that
Nvidia does. And there's lots of other companies like that
that these two advertising companies, right, they created Got Milk,
and I've never heard of them most well known.
Speaker 2 (24:17):
Yeah, I'm trying to go through and think of like
who else would fall into that category. And again the
ones where you look at you're like, oh, like yeah,
they're big, but yeah, no one, no one knows them.
And I wouldn't include something like an Exon mobile. Technically
they don't sell to you, right, but like that's a
but the brand still is kind of nitty gritty, like
(24:37):
when you go to an Exon station, Yeah, it's hey,
Exon Mobile has sold to that station and that station
has bought the branding. But it's basically a franchise model.
That'd be like saying McDonald's does. Yeah, I don't think
that holds up really. Yeah, I would go Steals. Yeah,
that's a fair one, only because it's history other ones
(24:59):
who sell own to like corporations, am Oracle. Yeah, that's
in the conversation. Yeap, that's in the conversation. I think yeah, Boeing.
Speaker 3 (25:13):
Yeah, sure, you know Boeing's up there, you knowing Boeing
beats out Salesforce most certainly, even though.
Speaker 2 (25:19):
Technically you can buy a Boeing jet.
Speaker 3 (25:22):
But it falls into the same categories in video, right
like ninety plus percent.
Speaker 2 (25:26):
Yeah, person's not going out and buying a Boeing jet, right,
It's true, It's true. Okay, Sorry, interesting thought exercise. We
can move on. I just I was compelled by that one.
It's funny because then you literally do just get into
all the defense contractors like Raytheon. Sure, but not.
Speaker 3 (25:39):
Again, Raytheon incredibly well known. Here does the average American
race that that is?
Speaker 1 (25:46):
No?
Speaker 2 (25:46):
Probably not? Okay, that was a good question, a good conversation.
Let's talk about TikTok. This is a company that everyone knows.
They are the social media company run by byte Dance,
who is a Chinese firm.
Speaker 3 (25:58):
With one hundred and seventy million users in the United States.
That's a compelling number.
Speaker 2 (26:02):
And because of Byteedance being based in China and the
Chinese having a national security law that requires byte Dance
to hand over any information that the Chinese government requests,
or any other company operating in China, Yes, not just excls.
Because of that, the US government earlier this year voted
to pass a bill, so this was legislated. This was
(26:24):
not an unelected judge making this decision. It wasn't an
unelected bureaucrat. It was not me, it was not Tucker.
This was the House of Representatives. And the US Senate
said we are going to ban TikTok from operating after
January nineteenth, twenty twenty five, unless it is sold to
a different buyer. That was affirmed by an appeals court
(26:49):
judge last week. And now this is the sad part
that you see, which is people have built legitimate businesses
on TikTok. I know, we like always rip on people
for being influencers and stuff like that, but the fact is,
look a lot of us are in businesses where if
you really looked at it, you'd be like, come on,
that can't be an actual business. Like, so I don't
(27:12):
bemoan anyone from getting their business off the ground on
social media or being an influencer or anything else. Like
it's listen, We're all just trying to make a few
bucks in order to try to you know, pay for
whatever it is that we're doing by the way they build.
Speaker 3 (27:24):
A past in Congress. Just so everyone's clear on this
when we talk about bipartisan past. This thing passed with
three hundred and sixty yes votes.
Speaker 2 (27:32):
You couldn't get that for you know, the sky is blue, right,
Actually you could, but it would be close. Yeah, it'd
be tight. So when you look at this, the sad
part on this is the people that have built platforms
on TikTok to be able to make a lot of
money and now just by virtue of hey, we built
(27:54):
our business in a company that quite honestly, if they
decide not to sell, it's evidence of two things. The
first is it's evidence that TikTok never really cared about
the money and that all they wanted was the intelligence collection.
Because if if bite Dad's actually cared about the value
of the asset, they sell it, they don't just say no,
we'll let this go dark on January nineteenth, right, or
(28:17):
or it's.
Speaker 3 (28:19):
You can't do that because you'll end up being disappeared
in China. I could buy that too, like not caring
about the money, or you do care about the money,
but you understand that if you do go and sell it,
then you will be disappeared in mainland China.
Speaker 2 (28:31):
Maybe sex one half does, Sex one does. I could
see that being a case. But the other thing is, look,
it's it's it's something where the parent of TikTok is
also very clearly here saying, hey, all those people who
built businesses on our platform, we don't care enough to
throw you a lifeline. Fair because they can get around this,
(28:52):
right All they have to do. All you have to
do is sell to a US company that's approved, right, Like,
that's it, And it does not seem like that's going
to be an effort that's made. So you get the
stories that are coming out about people who spent, you know,
the last five six years building these businesses on this platform.
And as someone who you know in the past has
spent a lot of time building up, you know, different
(29:14):
social media presences for different things, it takes a lot
of work. It takes a lot of time. It's a
real job. And and ultimately if it just goes away,
you kind of look at it and you're like, man, like,
why did I do that? And it's it's completely capricious,
where like the fact that you chose to build on
TikTok instead of snapchatter instead of on Twitter or wherever
(29:36):
you were saying, great, this is where the eyeballs are,
this is where I need to go. It's it's not
because you because you love the China business. We're like,
you know what, you know who really loves small business?
The Chinese Communist Party like that. That's not what anyone
starting a a TikTok channel is doing.
Speaker 3 (29:51):
And generally I feel for these creators too, because it's
not really within their purview or their job to assess
whether or not this is gonna shut down. It's a
national security threat, Like I don't really put that on
the arms of somebody who's building content on TikTok.
Speaker 2 (30:07):
But this is also why I say, look, in order
for people to be able to actually go and take risks,
you need a baseline level of stability and safety because
if if you are in a situation where, hey, if
you're in China and companies are being shut down left
and right for you know, random reasons that the Chinese
government wants to eventually just say, look, I'm not going
(30:27):
to do this because it's not worth it. And so
this is why you need to be able to catch
this stuff earlier than TikTok getting to one hundred and
seventy million users. You need a better you need a
better plan for enforcing actions against Chinese companies. Then wait
until it gets so big that everyone knows it, and
(30:48):
by then it's already a problem. You need something better
than that.
Speaker 1 (30:53):
You do.
Speaker 2 (30:53):
But that's a very quick game of whack a mole.
And I don't disagree.
Speaker 3 (30:58):
But think of the number of stuff that we import
into the United States. It's not just social media platforms,
it's everything else that's connected to the Internet, and trying
to shut it all down because it is a concern
that they can share the data. Welcome to every single
device that is connected to the Internet in your home.
Speaker 2 (31:17):
Yes, but I'm exaggerating, but that is important. I just
make this point. We all choose different jobs and different
roles in life. And for someone who's working at the
US government, whether they are representative, a senator, whether they
are in who's the group that handles the cybersecurity for
the US government, I can't remember the guy who used
(31:37):
to run. His name was Chris Krebs. I don't know
what the there's a group there that does this stuff.
And then you've also got was it Cephius the Council
for Investment in US Business. So you've got like US
government groups that their job is to not let stuff
like this get to the point where it has one
(31:59):
hundred and se any million US users. Guys, you chose
that job. We all chose our jobs. I have days
where I don't want to get up and talk on
the radio because I'm a little tired. But if I
wind and complained about that, what am I really doing?
Like you chose the job of assessing the risk of
foreign companies starting businesses in the US. You gotta deal
(32:24):
with it, yeah, like them's the breaks. We don't just
get to whine about it and say, oh, well it's hard,
like sorry, suck it up, buttercup. I don't know, Like
I don't have sympathy for someone who gets into a
business and then complain, or not even a business, gets
into a career and then just complains about the career
and how hard it is. Yeah, I'll put that mainly
(32:45):
on Congress. Either do a better job or get a
different career. But you don't just get to whind about
how hard it is, like, sorry, there's a reason why
I don't do that job, because I don't want to
wind about how hard it is. You know, let's take
a quick break. When we come back, let's talk about
the other side of this though, the potential for retaliation
from China and video in the news. This morning, I'll
(33:06):
tell you why.
Speaker 1 (33:08):
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all
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(33:30):
Financial Exchange Radio Network.
Speaker 2 (33:42):
Last segment, we were talking a little bit about TikTok
and the upcoming TikTok band that'll start in I think
forty three days. The other side of this. Early this morning,
I wake up and I get a little biz on
my phone that says, hey, there's an update from CNBC,
The Wall Street, Bloomberg, everyone who picked it up all
at once. In Vidia reportedly being probed by China's State
(34:05):
Administration for Market Regulation for anti trust concerns and like,
hard to read it as anything other than the immediate. Really,
here's the thing. In China. You can have a monopoly
as long as the government says that you can. Yes,
we know this because in the number of industries they're
basically are monopolies of Chinese state owned enterprises. So the
(34:26):
fact that in video is being looked at here, I
have to believe is very much okay, Fine, you're going
to prevent our companies from operating easily in the US.
We're going to do the same for the biggest one
that you have here in China.
Speaker 3 (34:40):
Stock is down three percent this morning, by the way,
And you may be wondering, because it's been pretty public
that the Chinese and Chinese based companies don't really have
access to in Vidia's highest order, most technologically advanced AI chips.
The fact that matter, though, is they also produced a
whole bunch of them that are not that they produce
(35:02):
a lot of products that are sold across the globe
and in China in particular, that are not used for
developing the latest AI models or this, that or the other,
and that hit to that business. You know, the revenues
that they derive from those easier to manufacture and less
complicated chips fund a lot of the research and development
they do into these, you know, most important ones, and
(35:23):
so yes, a ban on chip you know production or rather,
you know chip consumption in the mainland China from even
these lower end chips would be pretty darn bad for Nvideo.
Speaker 2 (35:36):
So this is something where hey, if we are actually
going to try to bring about some kind of fairness
in trade with China, and you know, not just fairness
in trade, but also hey, realizing that we don't want
Chinese entities snooping around at the behest of the you know,
Chinese Communist Party. There's going to be some pain coming back.
(35:57):
This is not going to be free and easy. It's
gonna take a little bit of time and a little
bit of work.
Speaker 4 (36:02):
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Speaker 2 (36:57):
Mike, I want to go back to a topic that
we recover. I think it was a week ago, which
was the opening debuts of Wicked and Mawana too. How
they're doing not great? Really? Yes, well they're fine, Like
they're both gonna make a ton of money. Yeah, there's
there's no problem there. I noted last week. Hey, like,
based on the early returns that we're seeing, the week
(37:20):
over week drop off is pretty light on Wicked, and
so there's a chance this could be, you know, something
that runs for a while and ends up in a
pretty good spot. I got a bit an egg on
my face after this one? Can it dropped off? The
dailies that we are seeing right now are anywhere from
fifty eight to seventy one percent drop offs for this week. Actually, sorry,
forty eight to seventy one percent drop offs. Typical drop
(37:41):
off that you'd like to see is somewhere around thirty
five to forty, so they're coming in much much steeper. Granted,
some of this is you know, skewed because of the
Thanksgiving week, but it's clear that Thanksgiving week was also
propping things up a little bit. So, yes, Wicked is
going to make a boatload of money, but it's not
going to make two boatloads of money and be a
top ten movie all time in the US. Grossana too.
(38:04):
Similar story. Malana two is right in the same boat.
Actually some steeper ones. Mawana on Wednesday, which again Thanksgiving
Wednesday to this one like tough comp down ninety two steep.
Speaker 3 (38:18):
I'm just you know, finding myself as the parent of
three daughters between the ages of six and eight, shocked
that they have no interest in going to see Malwana too.
Speaker 2 (38:27):
That was played so many times in our house.
Speaker 4 (38:29):
My niece was all about it on day one but.
Speaker 2 (38:32):
Very interested in going to see Wicked.
Speaker 3 (38:33):
I think because one of their friends is you know,
big into. I think saw the Broadway play. I don't know,
can't make sense of it, but no big push to
get them tom Wana two, which I am relieved about.
Speaker 2 (38:45):
It does appear that is good, Mike, don't kid you
saw one was Yeah. The second one does not have
lin Manuel Miranda running the song, so oh, I've heard
that's a big drop off the boy. Let's take a
quick break. We got hour two coming up in a
little bit.
Speaker 1 (39:11):
Sh
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