October 6, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss OpenAI and AMD announce massive computing deal. Did OpenAI just stab Nvidia in the back? More Americans are warming up to the idea of nuclear power in their community. Why delaying your Social Security benefits may not make sense. 80% of workers say they're making little or no progress saving for retirement. Are we in a recession? Yes, if you live in one of these states. Will 2026 be the year of the used EV?
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Transcript
Episode Transcript
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Speaker 1 (00:00):
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(00:20):
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(00:43):
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a donation today. This is the Financial Exchange with Chuck
(01:06):
Zutta and Mike Armstrong.
Speaker 2 (01:12):
Chuck, Mike and Tucker with you here. And it's a Monday.
Government's still closed, government's still closed. Earning season hasn't started,
and so honestly, go out and enjoy the last real,
you know, warm weather that we're gonna have for six months.
Speaker 3 (01:30):
Maybe. I mean, I didn't think we're gonna get eighty
five in October on a Sunday, So.
Speaker 2 (01:35):
You know what, You're not gonna get it in November. Yeah,
I can tell you that much. You can put that
one on the board, Tucker, No. Eighty five degree Sunday
in November in New England. All right, So I'm glad
we got that out of the way. So what do
we have this week? We got a government shutdown that's
going on, which means that we're not going to be
assuming that it continues. We're not going to be getting
(01:57):
Balance of Trade data tomorrow. We are not going to
be getting initial or continuing jobless claims on Thursday, and
quite honestly, that was all that was scheduled from the
federal government. So there's not much there. What are we
going to be getting this week? That's interesting. I guess
we'll get all hyped up for you know, FED minutes
on Wednesday, but honestly, I don't care because it's not
(02:23):
gonna tell us anything we don't already know. Can I
get excited about consumer sentiment data on Friday? Not really,
since I've poo pooed the index basically saying hey, since
they changed their methodology, the readings have gotten more extreme
and not really correlated to what's going on in the
broader economy. From an earnings perspective, I guess on Thursday,
(02:44):
I've got Pepsi Progressive in delta, so I can learn
a little bit about what's going on from them. There's
a company on Wednesday called AS that's coming out with earnings.
I don't know what they do, but AS reports earnings
on Wednesday. So ultimately, I think this is gonna be
(03:07):
a pretty quiet week as far as economic data and earnings.
That much is clear. The question is do we get
something that is unexpected? And this is why, Gosh, I'm
just so happy to be alive today, because we always
get something unexpected. And today, Michael, we've got another another
(03:30):
snake in the Ora Boro's chain that we can you know, yeah,
because the snake eating its tail is the and so
what we have today, ladies and gentlemen, is nothing short
of just fantastic in terms of just pure, quite honestly grift.
Speaker 3 (03:54):
I don't know if yeah, it partly comes across as
Game of Thrones, stab in the back, it partly comes
across as eating oneself, perhaps as collusion on the part
of Nvidia, and just all sorts of intrigue here.
Speaker 2 (04:11):
A couple of weeks ago, in Vidia and open Ai
came to an agreement where in Vidia was going to
invest one hundred billion dollars in open Ai so that
open Ai could invest one hundred billion dollars in in
Vidia AI chips. Not explicitly, but yeah, but yes, it was, Yeah,
we're going to give you money so that you can
buy our product. Historically this has been called vendor financing,
(04:34):
and back in the dot com bubble, it marked the
end of the dot com bubble because it was indicative of, Hey,
we need more people to buy our stuff. We'll give
them our money to do so, and that'll keep the
plates spinning for a little bit longer. So we looked
at this, and we noted this at the time, and
we were like, it's not really a great sign, but Okay,
everybody's doing it, YadA, YadA whatever. It's not fine, but
(04:57):
it's fine to day. This morning, it's seven fifteen am.
Birds are chirping, Squirrels are getting you know, run over
by cars as they try to get the last nuts
you know, stored away for the winter. Yea, and open
ai announces, Hey, we've reached a deal with AMD, and
for what, We're gonna buy billions of dollars of AMD
(05:22):
chips and in turn, AMD is gonna give us some
basically free stock.
Speaker 3 (05:29):
And to be clear, AMD and Nvidia directly compete in
this space. Obviously, yes, open ai is one purchasing, but
AMD and Nvidia compete explicitly and directly in the AI
semi connector space as well as the gaming industry, like
everywhere in their businesses, they compete.
Speaker 2 (05:48):
Yes, But now now, obviously open ai has said that
they will you know, buy these these chips, but it's
basically coming at the cost of the equity that open
ai is receiving in the event that they meet certain
milestones for purchase. So once again this is now we're
not even funding the purchase with real dollars, We're giving
(06:11):
you future equity maybe in order to buy these chips.
Because here's the thing, AMD, unlike in Vidio, doesn't just
have money floating around like this to do this, so
they have to get creative and say, well, we can
give you one hundred and sixty million AMD shares if
you meet these milestones, which also means that basically what
(06:38):
ended up happening here is open Ai took in Vidia's
money and said let's go buy some AMD stuff with it.
Speaker 3 (06:46):
Right, So the stab in the back part was in
Nvidia funding open Ai, who turned around and specifically bought
products from their direct competitor. They're really only major competitor
in this space. I guess Broadcom too, but really they're
major competitors in this space using in videos cash. So
(07:07):
there's the stab in the back part. The snake eating
itself part is most of this is not being actually
financed with cash. It's just all it's just all slashing
back and forth, shares going back and forth, and no
new value creation out of any of it. So that
part is concerning the part that I meant about collusion
(07:27):
and what's really going on here. I think this is
probably a little bit too conspiracy theory, so I shouldn't
really Yeah, I'll voice it anyway in video would never
be able to buy AMD. No, no way they would
get blocked. That would be too much of a monopoly concern.
Speaker 2 (07:44):
Yeah, but no, Google has done all kinds of stuff
and all they got was, hey, don't do it again.
Speaker 3 (07:49):
True, So what might be a roundabout way of doing so, Well,
let's buy one of our biggest customers and then maybe
they will take a stake in our large just competitor here.
It's not going to put them out of business, but
at least we have some We have some equity in
our biggest competitor here. Now, I don't really think that
(08:09):
was a big part of this story, but it is.
It's just who knows about the timing of any of this, right?
Who knows if this is you know, maybe we're right
on the cusp of artificial general intelligence and we're about
to see the breakthrough of all these profitable enterprises that
(08:29):
really increase productivity. But I will tell you the comparisons
to the dot com bubble have never been easier to
make than right now, never.
Speaker 2 (08:41):
No, And I gotta be honest, like it's kind of
getting into silly season on this stuff, and I say,
this is someone who. I think you can believe two
things at the same time, even three things if you want.
Number one. Years from now, there are going to be
(09:01):
way more people using artificial intelligence and way more people
paying to use artificial intelligence than there are today. Despite that,
I think that the level of malinvestment that is out
there is going to be crippling for a lot of
the players in this space. And it certainly does appear
(09:24):
that this is going to be pretty close to winner
takes all. And the problem there is, Okay, everyone else
is pouring all this money in, and when large language
models are commoditized and the costs come down and you've
still spent all this money because you've got to spend
the money on the chips, there's gonna be a lot
of pain felt when when that happens.
Speaker 3 (09:44):
By the way, AMD today up twenty five percent of
this news, and on this news, and by the way, Nvidia,
who got at least on the surface screwed on this deal,
it's only down one percent.
Speaker 2 (09:58):
Keep in mind, in market capture, that's the same as
true AMD being up twenty five percent. Yeah, you know,
AMD's a four trillion dollar company. They was one percent.
They lose forty billion dollars. If you are AMD, they
are a two hundred billion dollar company, you go up
twenty five percent. You made fifty billions. So on a
market cap basis, it's saying, yeah, this is pretty much neutral,
but somehow a creative I don't whatever, what's ten billion
(10:22):
dollars amongst friends?
Speaker 1 (10:23):
You know.
Speaker 2 (10:24):
The third thing I was going to say about AI,
we may end up reaching artificial general intelligence, it will
not be through large language models. That technology is just
about maxed out, quite honestly from what I have seen.
And my evidence for that is a all of the additional
(10:47):
money that's pouring in is generating like very incremental improvements
at this point at tremendous additional costs, so you can't
get through that hump. And you're also now getting to
the point where you're seeing much cheaper models coming out,
but they can do like ninety five percent of it,
and it's like, Okay, you're not gonna be able to
make any money off of this because it's gonna just
become commoditized and no one's gonna make any money selling
(11:09):
a commodity because no one ever makes any money selling
a commodity. Like if you don't want to own a
copper minor like and operate it, right, then you probably
don't want to own and operate a large language model
because they're gonna get it's gonna be the same thing.
Like words from a large language model are gonna be
unrefined copper ore for the Internet. How's that for, you know,
(11:33):
a comparison. So where we stand right now, we're kind
of getting into silly season on some of the AI stuff,
and this is all also happening across a backdrop of
an American economy that really, for I think a larger
number of people feels like it's not working for them,
and so I think there's a lot of people right
now that are just like, hey, what gives here? Man?
Speaker 3 (11:57):
I know you're excited about this tool that's to replace me,
but I don't have a job, and I haven't for
quite some time.
Speaker 2 (12:04):
But you know, to quote Monty Python, I'm not dead yet.
Let's take a quick break when we return. Let's see
that's enough AI talk for now. I want to talk
nuclear power though, because this is something that I do
think is a great topic. So let's do that when
we come back.
Speaker 1 (12:23):
Thanks to US six one, seven, three, six, two thirteen
eighty five with your comments and questions about today's show,
and let us know what you think about the stories
we are covering. This is the Financial Exchange Radio Network,
breaking business and financial news first throughout the day, only
here on the Financial Exchange Radio Network.
Speaker 4 (12:54):
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Speaker 2 (13:28):
Nuclear in my backyard more of America, and the market
seems okay with it. This piece published yesterday on CMBC.
Speaker 3 (13:37):
I mean your literal backyard or in my general vicinity.
Speaker 2 (13:41):
I've said before, if you wanted to pay me in
a like an exorbitant amount of money, to put a
small nuclear reactor in my basement. Yeah, like one of
the ones they have on the submarines. Uh huh, you know,
like you could power I don't know, like my street,
my town, something like, you know, nothing huge, Just like, again,
a small nuclear reactor. I would be happy to have
(14:04):
it in my basement.
Speaker 3 (14:05):
I have a stream or water source for cooling in
your general property well water yeah, okay, yeah.
Speaker 2 (14:12):
You know, we'd probably have to expand the well, I
would imagine. I don't know that we get quite the
gallons permitted that you need to operate a nuclear reactor.
No wrre do I know what you do with the
water afterwards.
Speaker 3 (14:23):
I'm right on a river. I might just look into this, okay,
out of garden. But what is being talked about is,
you know, slightly larger nuclear power plants.
Speaker 2 (14:31):
They're still called small modular reactors. Yeah, small as relative
in that they're about a third of the size of
conventional nuclear power plants. Yes, in terms of generation and footprint.
Speaker 3 (14:41):
Quite honestly, so, haven't been to your house, but probably
not fitting in your.
Speaker 2 (14:44):
Basement, Probably not fitting there. It's something where there's still
you know, you're talking three hundred megawatt units instead of
you know, one gigawatt units. But these are things that
you are starting to see, you know, some real push
towards for a couple of reasons. The first be, hey, look,
with all this data center build out that we've talked about,
you need heavy capacity, high base load. And yes, you're
(15:08):
seeing a lot of that done initially right now with
new net gas facilities that are being built. But the
problem that you have there is, hey, if oil prices
remain low, you have less fracking that goes on in
the US, and that gas prices go up, just became
a whole lot more expensive to provide electricity, either to
your data center or to everyone else.
Speaker 3 (15:27):
So I'm going to oversimplify this a little bit, but
what's the attractiveness of these things. It's similar to what
you would get from a modular home. You can manufacture
it in one centralized place, have a team of experts
that are building them out, shipping, ship them to location,
finish on site, rather than a custom built solution for
each nuclear power plant that you manufacture supposed to be faster, cheaper,
(15:49):
And that's all you really care about right now when
you're talking about nukes. Well, now, also safeas cheap safe
would be good.
Speaker 2 (15:59):
Now, the question on this is going to be, hey,
when the rubber meets the road, can you actually get
them built? Because that's long been the problem in the US.
Speaker 3 (16:10):
And I think that encompasses two things, right, Like one,
can you actually physically build them safely, cost effectively? But
then there is yes. I think I think the answer
is pretty clearly yes. But can you actually get the
approval and site locations approved to do it? That has
historically been the number one problem with these and so
(16:30):
therein lies my question. Yeah, great, if you can build them, excellent,
if you can ship them to location. But if we
want one built, pick your location, you know, along one
of the rivers in Vermont. Are they actually going to vote,
you know, give it the thumbs up and say yes,
(16:51):
we are comfortable with this being built in our town,
in our county and our general area here to power
these homes.
Speaker 2 (16:59):
Yeah, Bass, it seems like a hard maybe. And I
think there's a uh, there's a great quote in here, uh,
you know, talking about just kind of why we're even
you know, talking about new quite honestly, we should have
been talking about nuclear for a while. It's just we
got scared off of it for a number of different reasons.
(17:20):
But there's a great quote here from UH. I don't
know who this guy is. It doesn't specify who is
Morris in this piece. It never gave a first name
or any information about Morris. I just trust him anyways,
Morris I interviewed for this. I looked through all the
pages and I couldn't find it. Maybe just got cut
off in the print. I love him, UH. To illustrate
(17:44):
how much of the world of power generation has been
up at it in short order, Morris offered a stark comparison.
Five years ago, we were worried about how we were
going to put up with demand from a twenty megawatt
marijuana farm. Hell, yeah, that's a fraction of what the
data centers are asking for. Yes, you've got you know,
open AI saying hey, we want to build a six
gigawatts of capacity with AMD. It's a little bit more
than a small marijuana point.
Speaker 3 (18:05):
Tucker, you weren't joking. His name's actually Zach Morris.
Speaker 2 (18:08):
Yeah, also known from U Saved by the Bell.
Speaker 3 (18:10):
He's the director of market Ie, a local association of
business and government leaders that promotes economic growth and cass
in Van Buren Countony's Counties, Michigan.
Speaker 2 (18:18):
There you go. In any case, I think that if
you are serious about solving America's energy problem, you need
to be talking about nuclear as a portion of that,
not all of it. And I think that the fact
that we're at least having these conversations now is great.
But when push comes to shove, will communities actually allow
(18:39):
for them to be placed near them?
Speaker 3 (18:41):
Well, if you want to, you need to put together
very clear economic benefits for that area. Like I don't
think that there is a good name.
Speaker 2 (18:52):
If I'm a nuclear power plant, I'll be like anyone
who lives within five miles you get free power for life.
Speaker 3 (18:57):
Or like like property taxes permanently cut in half, Like
whatever you want to do, Yes, but like make it
really clear to those who are allowing it to be
built in their area what the benefit's going to be. Yes,
because it's going to hurt property values at least in
the short term. Yes, So make it really obvious this
is what you're going to benefit from this. We don't
know how much downside is. Yeah, this is hellister is
(19:20):
going to be. That's what you need to do to
get these things built. It's got to be compelling.
Speaker 2 (19:24):
Quick break here. Wall Street Watch is next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch. A complete look at what's moving markets so
far today right here on the Financial You'll Exchange Radio Network.
Speaker 4 (20:01):
Investors have turned the page to a new week as
the government shut down drags on. However, the big news
of the day surrounds a massive computing deal between open
ai and AMD. Right now, markets are mixed. The Dow
is down by third of a percent, or one hundred
and fifty three points. Sm P five hundred is up
(20:21):
two tenths of one percent, or fourteen points higher, Nasdaq
is up three tenths of one percent or eighty points higher.
RUSS two thousands up four tenths of one percent, Tenure
Treasure reeled up two basis points at four point one
four eight percent, and crude oil up one in a
quarter percent, rating at sixty one dollars and sixty four
(20:42):
cents a barrel. Open AI and AMD agreed to a
multi billion dollar partnership to collaborate on AI data centers
that will run on AMD processors, AMD surging twenty seven percent,
while competitor in Vidia seeing its stock fall one percent.
Traders will continue to watch for more developments from open
(21:04):
Ai this afternoon during its annual Dev Day event, which
will feature announcements, keynotes from executives in a chat between
CEO Sam Altman and longtime Apple designer Jony Ive. Meanwhile,
Pallinteer shares rebounding nearly four percent after its stumble on Friday,
the data analysis company pushed back against the Reuters report
(21:26):
about security flaws and a communications platform designed for the
US Army. Elsewhere, Fifth Third ban Corp. Announced a ten
point nine billion dollar all stock deal to buy regional
Bank America. Fifth third shares are down by one percent,
while k America stock is jumping fourteen percent and Tesla
shares up over three percent after the electric car maker
(21:48):
teased a product launch announcement on X with tomorrow's date,
leading to increasing speculation about the release of a new car.
I'm Tucker Silva, and that is Wall Street watch.
Speaker 2 (22:00):
Mike, what do we think Tesla's gonna come out with tomorrow?
Speaker 3 (22:04):
What you're gonna start with dancing robots?
Speaker 2 (22:07):
You have to give one real answer and one fake
answer that might end up being the real answer. Here's
my real answer. Guess the low cost model. Why you know,
the bargain basement version that they think they can maybe
get to like thirty five thousand or thirty three thousand.
Speaker 3 (22:26):
I think it's seem to be even less exciting. I
think it's gonna be a revamped version of self driving.
Speaker 2 (22:32):
Okay, and now what about your joke prediction that still
might actually be something they announced tomorrow?
Speaker 3 (22:38):
Uh, robots driving the self driving cars.
Speaker 2 (22:43):
Helicopters or drones like, so, you know, some kind of
flying car type thing. We'll see what we get a
piece here in the bloomy Berg or nope, it's in
the Wall Street journal Berg. Why delaying your Social Security
benefits may not make sense? So a lot of people
talk about, hey, I want to delay as long as
(23:03):
possible to maximize that benefit, which, again, if you have
you know, good longevity and YadA YadA like that can
obviously make sense. The place where it stops making sense
is where you actively harm other parts of your retirement
plan in order to basically make this happen. Where okay,
(23:24):
you could be you know, pulling from other assets that
might rise at a rate that's faster than what soil
security rises at. Maybe when you look at the inflation
assumptions that you're using for Social Security, you're not looking
at them accurately, and so there are cases where waiting
till age seventy may not make the most sense. It
may actually hurt your retirement planning. Yeah.
Speaker 3 (23:45):
I mean the easiest one that I think most people
know about is if you're have some health conditions this
if you die, you get nothing, nothing soial security or
a tiny little check for your spouse. But you know,
there's all sorts of other considerations. I was working with
somebody recently who, for instance, has a minor child and
will have a minor child while he's on Social Security.
There's a whole bunch of extra benefits you get for
(24:07):
your minor child in terms of cash payments to you
for having a minor child while on Social Security. Like,
why would you want to delay your Social Security in
that case? The piece that Wall Street Journal makes is,
you know, oftentimes people make these decisions in a vacuum,
and that is a fair point, Like, oh, I'm comparing
the increase on my Social Security to my buying power today. Yep, Well,
(24:31):
four years from now, your cash that you have today
is not going to buy you as much stuff. And so, yes,
you need to assume the increases on social security, but
you also need to assume the increases on the basket
of goods that you are purchasing. Okay, but frankly, if
somebody's doing all the math on soci security, I think
they're probably factoring that piece in would be my guess.
I think the point that you made earlier is a
(24:53):
good one, Chuck, Like, if I don't have Social Security,
how am I going to pay my bills?
Speaker 1 (25:02):
Like?
Speaker 3 (25:02):
Do I have to take a loan to pay my
bills if I'm not on so security? Probably a good
reason to pull so security at that stage. There's other
stuff too. I mean, ultimately, the decision on social security,
I say this over and over again, like you have
to make it within the confines of your overall plan.
And so if one of your key goals, for example,
is to wash as much money out of your IRA
(25:24):
and get into a roth as possible because you're terrified
about your personal tax rate going up, then you know
that should play into account on your social security strategy,
because that can help pay your bills while you wash
those taxes out. There's a lot that goes into all
of this. I think would be my main point when
it comes to that social security discussion. You have anything
else to add on it? Chuck, No, I think that's
(25:45):
kind of the big too often people look at it
as this like holy grail, like, so security is just
another asset for you, right, exactly right? And just how
do I use it? If I have a pension, if
I have social Security, if I have a four to
oh one K I have all these assets, what's the
best one for me to tap at what point in time?
Speaker 2 (26:01):
Yeah, it has its pros and cons, just like anything else.
For a lot of people, it is their only source
of retirement income. I think we're still around a third
of people. That's the only thing that they have when
they get to retirement. But you still have to figure
out what makes the most sense and what works for
you best along these lines. According to a Baron's piece,
(26:24):
eighty percent of workers say they're making little or no
progress saving for retirement. So this was a survey that
was done by Goldman Sachs and they surveyed thirty five
hundred and eighty eight workers in fifteen hundred and fourteen retirees,
so about five thousand people. And I guess, like I'm
(26:46):
just trying to understand, like this is where we get
into some of the terminology here and trying to understand
what it means. So it says forty percent of working
Americans are now living paycheck to paycheck according to the report,
which quite honestly doesn't match up with some of the
other data that we get where it says that like
eighty percent of Americans have at least four hundred dollars
(27:07):
saved up for an emergency, which means you're not living
paycheck to paycheck.
Speaker 3 (27:10):
Right, people. I think we've talked about that at length,
that people miscategorize whether or not they are living paycheck
to paycheck. If you are living paycheck to paycheck, it
means that you are not saving anything into your four
h one K or any other You're not saving any
money on a monthly basis, and in all likelihood you
are also running up some debt. If that is the case,
then you are probably living paycheck to paycheck correct.
Speaker 2 (27:32):
Which I still think is probably like and again this
is god feel so like I've pulled no one. So
it's probably worse than useless. I bet it's probably about
a quarter of Americans are truly in that situation. So
as an additional two fifth say they aren't making meaningful
progress on their retirement goals, what does meaningful progress mean?
(27:56):
How does one define what is meaningful versus not meaningful progress?
Because the data that we do get from the big
retirement providers show that account balances continue to grow at
a pretty you know good clip obviously helped buy markets,
and so I think I struggle with this piece because
(28:16):
I think I can hold two thoughts in my heads
at the same time. The first is there is a
large portion of America where the economy is not working
for them right now, but the surrounding data is often
very conflictatory, if not downright, you know, pointing in completely
opposite directions. And so I kind of struggle to understand
(28:41):
where the biggest pain is other than I think certainly
we see young people right now just struggling to even
get into the workforce in a way that we haven't
in quite some time. I think we see a situation
where for people close to retirement, because of a number
(29:01):
of different situations, people are still having to work longer
in order to get to retirement. But I don't really know.
I don't have a great handle on kind of that
middle age demographic and what we're seeing there, other than
it's probably pretty uncomfortable for you know, a number of them,
just because they're taking care of kids and taking care
of parents who now you know, might be dealing with
(29:22):
health problems.
Speaker 3 (29:23):
Yeah, and I can look, this story does fit very
well into others that we've covered about the economy, which
is a vast number of people feeling like they're falling behind.
What it actually leads to in terms of economic growth
and stock market moves. We've talked about this at length,
but I just I hate to say this, but I
(29:44):
don't know how much it matters. I think at some
point it does, Right, when when you get to a
certain point where a large group of people in your
society are struggling to keep pace and feel as though
they're falling behind, it can lead to all sorts of
really ugly stuff. But when that breaking point hits and
what the impact is on markets to the economy, I
(30:05):
don't know.
Speaker 2 (30:07):
And this is no and this is before we even
get to know all of the chatter about hey, how
could AI impact employment prospects and wages over the next decade.
Right once again, don't know quick break here. When we
come back, we're gonna be talking about why twenty twenty
six will be the year of the used ev.
Speaker 1 (30:27):
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(30:48):
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Speaker 2 (31:10):
Peace for market Watch. Are we in recession? Yes if
you live in one of these twenty two states, so
obviously you can't really have in my opinion, how small
you're gonna go on this. If you're gonna say that
you have a state level recession, well then can you
have a city level? Can I personally be recessing while
Mike is, you know, obsessing, like you know, it's just
(31:31):
at a certain point it gets too granular and it
doesn't mean anything.
Speaker 3 (31:34):
I agree, Well, I will say that if you are
listening to this show on terrestrial radio, then you probably
live in a place that's in you know, their definition
of recession right now, which is compelling, right, Like, pretty
much all of New England meets this category at the moment. Yes, Now,
(31:55):
I know I'm excluding a few of our listeners out
in I'm gonna fail to name the city, so I'm
just gonna not do it. But Portland, like you know,
there's a few places where that's not the case. But yeah,
there is a significant portion. And we've talked about this
how unemployment rates, for example, in Massachusetts have climbed substantially
faster than the national average.
Speaker 2 (32:17):
Now what I would love to see is show me
this chart and how it evolves, you know, kind of
over time. Yeah, because what I can tell you is
this doesn't mean anything good. Sure, Like this is not
so as much as I believe, Yes, Like, I don't
think that you can have a state level recession because
(32:38):
that's just not what that word means.
Speaker 1 (32:41):
Right.
Speaker 3 (32:41):
We have a pretty strict definition of recession in this I.
Speaker 2 (32:44):
Do think you can say, hey, if you're hitting these
metrics in a certain you know, in a growing number
of states, it doesn't necessarily mean anything good. So that's
I think where where I kind of end up landing
on this, you know, when it's all said and done.
The big thing is that when you are talking about,
(33:05):
you know, the states that are seeing these problems right now,
it's predominantly the northeast and northwest, and then kind of
a smattering of Midwest states. And in the southeast you
basically have Texas and Arkansas that I'm sorry at Texas
in Alabama.
Speaker 3 (33:23):
That fit the bill. I'm coming around to agree with
you that this doesn't matter, Chuck. If you have twenty
two states in recession, but none of them are New York, Florida, Texas,
or California, then it doesn't matter.
Speaker 2 (33:33):
Right, it doesn't matter. I say this with all the
love in the world for the state of Vermont, which
I believe is the second smallest in the Union. It's
just don't have a big enough impact economically. It's just
not Likewise, if Texas, you know, goes into a quote
unquote recession, man like that, that's a whole lot of
(33:57):
economy that you got to figure out how to turn around.
Speaker 3 (34:01):
And it's not as though we're looking at a map
here that says, oh, yeah, these twenty two states are
in recession, and then most of the rest are just
barely keeping along. Like no, Texas and Florida and Louisiana
and big parts of the country Arizona are actively expanding place.
Speaker 2 (34:16):
Data center growth and things like that. And yes, even
though we talk about Texas and Florida in the real
estate markets there and like, hey, it's really bad from
a real estate perspective, at.
Speaker 3 (34:24):
Least they were building real estate of the last few years.
And also real estate is not everything. There's other stuff
going on there.
Speaker 2 (34:31):
So I think that overall, yes, this has some concerning signs.
It's not what you want to see, but just counting
states without noting the magnitude of those states does a
disservice to what this means.
Speaker 3 (34:44):
It is a good transition, though, and a good reason
to attend one of our up to upcoming events. We
have won this Thursday, and there are a few still
a few spots left. It's at the Margaritaville Resort in
Cape Cod October ninth. This Thursday, We're gonna be doing
a live broadcast this hy show, followed by a presentation.
Chuck and myself will be hosting lunch is free. The
(35:04):
whole seminar, the whole live broadcast is free. We're gonna
be talking about the state of this economy right now,
what it means for young people trying to enter the
labor market, what it means for folks that are on
the cusp of retirement, this infatuation that every investor seems
to have with artificial intelligence. We're covering all of it
at this live broadcast and live post broadcast event. We
(35:26):
would love for you to join us, so you can
check it out at Armstrong Advisory dot com. In addition
to the one this Thursday, we have one next Thursday
as well, and again a few spots left at both
Showcase super Lucks and Chestnut Hill on October sixteenth, Margaritaville
Resort in Cape Cod October ninth. You can register at
Armstrong Advisory dot com, but again space is limited and
(35:46):
they are coming up quick. Eight hundred three nine three
four zero zero one really fun events. We've done them
in the past. They're always a good time. You can
come sit with us and you know, join us for
part all of it. But please do join us and
call or go online to register eight hundred three nine
three four zero zero one or Armstrong Advisory dot Com.
Speaker 1 (36:07):
The proceeding was paid for by Armstrong Advisory Group, a
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Armstrong guide a specific financial, legal, or tax advice. Consult
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Speaker 2 (36:23):
Twenty twenty six will be the year of the used EV.
Analyst says here's why, and basically what they are saying is, hey,
in a lot of cases, you're starting to get closer
and closer to cost parity between evs and gas cars.
There still is a price premium for used EV's relative
to used vehicles of about nine hundred dollars, so there
(36:46):
is still something there. The piece that I struggle with
on this though, is that when you look at new vehicles,
it's a wider gap, which means if you're buying a
new EV, you're expecting much more rapid depreciation on your car,
which then leads to the question why would I ever
buy a new one if I could just buy a
used one, which then starts to push the price of
(37:09):
used ones up because all the people looking at new
ones say, I'm gonna look at the used ones, which
then in turn makes this not look as attractive.
Speaker 3 (37:15):
Yeah, I guess part of the weird economics of EVS
is just the battery degradation fear.
Speaker 2 (37:23):
I think it's much more spear. It's a real thing.
Speaker 3 (37:25):
It's a real thing. But I think it's also a
very new and unknown formula that people have to account for. Like,
you know, when you're buying an internal combustion engine, you
kind of have a sense, right, Okay, it's three years old,
it's got twenty thousand miles, it's this brand. What can
I generally expect based on my experience. You just don't
have that with EVS, And so I think that there's
some extra discount built in there. And then the least
(37:47):
factor here too, right, Like over the last few years,
a ton of these vehicles have been leased rather than
purchased for a few reasons. One would be some of
the tax incentives that are available for leased cars. Two
would just be the I'm not sure about ev I
want to test it out in the least rather than
an ownership plan. And so those are going to be
hitting the market over the course of the next few
years as well.
Speaker 2 (38:07):
Take a quick break for just a little bit here,
but when we come back, we got some housing market chatter.
We're talking Amazon's new Prime event, and then we're gonna
be talking about some air travel data as well. Stick around,
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(01:06):
Zutta and Mike Armstrong.
Speaker 2 (01:12):
Chuck, Mike and Tucker with you here. And it's a Monday.
Government's still closed, government's still closed. Earning season hasn't started,
and so honestly, go out and enjoy the last real,
you know, warm weather that we're gonna have for six months.
Speaker 3 (01:30):
Maybe. I mean, I didn't think we're gonna get eighty
five in October on a Sunday, So.
Speaker 2 (01:35):
You know what, You're not gonna get it in November. Yeah,
I can tell you that much. You can put that
one on the board, Tucker, No. Eighty five degree Sunday
in November in New England. All right, So I'm glad
we got that out of the way. So what do
we have this week? We got a government shutdown that's
going on, which means that we're not going to be
assuming that it continues. We're not going to be getting
(01:57):
Balance of Trade data tomorrow. We are not going to
be getting initial or continuing jobless claims on Thursday, and
quite honestly, that was all that was scheduled from the
federal government. So there's not much there. What are we
going to be getting this week? That's interesting. I guess
we'll get all hyped up for you know, FED minutes
on Wednesday, but honestly, I don't care because it's not
(02:23):
gonna tell us anything we don't already know. Can I
get excited about consumer sentiment data on Friday? Not really,
since I've poo pooed the index basically saying hey, since
they changed their methodology, the readings have gotten more extreme
and not really correlated to what's going on in the
broader economy. From an earnings perspective, I guess on Thursday,
(02:44):
I've got Pepsi Progressive in delta, so I can learn
a little bit about what's going on from them. There's
a company on Wednesday called AS that's coming out with earnings.
I don't know what they do, but AS reports earnings
on Wednesday. So ultimately, I think this is gonna be
(03:07):
a pretty quiet week as far as economic data and earnings.
That much is clear. The question is do we get
something that is unexpected? And this is why, Gosh, I'm
just so happy to be alive today, because we always
get something unexpected. And today, Michael, we've got another another
(03:30):
snake in the Ora Boro's chain that we can you know, yeah,
because the snake eating its tail is the and so
what we have today, ladies and gentlemen, is nothing short
of just fantastic in terms of just pure, quite honestly grift.
Speaker 3 (03:54):
I don't know if yeah, it partly comes across as
Game of Thrones, stab in the back, it partly comes
across as eating oneself, perhaps as collusion on the part
of Nvidia, and just all sorts of intrigue here.
Speaker 2 (04:11):
A couple of weeks ago, in Vidia and open Ai
came to an agreement where in Vidia was going to
invest one hundred billion dollars in open Ai so that
open Ai could invest one hundred billion dollars in in
Vidia AI chips. Not explicitly, but yeah, but yes, it was, Yeah,
we're going to give you money so that you can
buy our product. Historically this has been called vendor financing,
(04:34):
and back in the dot com bubble, it marked the
end of the dot com bubble because it was indicative of, Hey,
we need more people to buy our stuff. We'll give
them our money to do so, and that'll keep the
plates spinning for a little bit longer. So we looked
at this, and we noted this at the time, and
we were like, it's not really a great sign, but Okay,
everybody's doing it, YadA, YadA whatever. It's not fine, but
(04:57):
it's fine to day. This morning, it's seven fifteen am.
Birds are chirping, Squirrels are getting you know, run over
by cars as they try to get the last nuts
you know, stored away for the winter. Yea, and open
ai announces, Hey, we've reached a deal with AMD, and
for what, We're gonna buy billions of dollars of AMD
(05:22):
chips and in turn, AMD is gonna give us some
basically free stock.
Speaker 3 (05:29):
And to be clear, AMD and Nvidia directly compete in
this space. Obviously, yes, open ai is one purchasing, but
AMD and Nvidia compete explicitly and directly in the AI
semi connector space as well as the gaming industry, like
everywhere in their businesses, they compete.
Speaker 2 (05:48):
Yes, But now now, obviously open ai has said that
they will you know, buy these these chips, but it's
basically coming at the cost of the equity that open
ai is receiving in the event that they meet certain
milestones for purchase. So once again this is now we're
not even funding the purchase with real dollars, We're giving
(06:11):
you future equity maybe in order to buy these chips.
Because here's the thing, AMD, unlike in Vidio, doesn't just
have money floating around like this to do this, so
they have to get creative and say, well, we can
give you one hundred and sixty million AMD shares if
you meet these milestones, which also means that basically what
(06:38):
ended up happening here is open Ai took in Vidia's
money and said let's go buy some AMD stuff with it.
Speaker 3 (06:46):
Right, So the stab in the back part was in
Nvidia funding open Ai, who turned around and specifically bought
products from their direct competitor. They're really only major competitor
in this space. I guess Broadcom too, but really they're
major competitors in this space using in videos cash. So
(07:07):
there's the stab in the back part. The snake eating
itself part is most of this is not being actually
financed with cash. It's just all it's just all slashing
back and forth, shares going back and forth, and no
new value creation out of any of it. So that
part is concerning the part that I meant about collusion
(07:27):
and what's really going on here. I think this is
probably a little bit too conspiracy theory, so I shouldn't
really Yeah, I'll voice it anyway in video would never
be able to buy AMD. No, no way they would
get blocked. That would be too much of a monopoly concern.
Speaker 2 (07:44):
Yeah, but no, Google has done all kinds of stuff
and all they got was, hey, don't do it again.
Speaker 3 (07:49):
True, So what might be a roundabout way of doing so, Well,
let's buy one of our biggest customers and then maybe
they will take a stake in our large just competitor here.
It's not going to put them out of business, but
at least we have some We have some equity in
our biggest competitor here. Now, I don't really think that
(08:09):
was a big part of this story, but it is.
It's just who knows about the timing of any of this, right?
Who knows if this is you know, maybe we're right
on the cusp of artificial general intelligence and we're about
to see the breakthrough of all these profitable enterprises that
(08:29):
really increase productivity. But I will tell you the comparisons
to the dot com bubble have never been easier to
make than right now, never.
Speaker 2 (08:41):
No, And I gotta be honest, like it's kind of
getting into silly season on this stuff, and I say,
this is someone who. I think you can believe two
things at the same time, even three things if you want.
Number one. Years from now, there are going to be
(09:01):
way more people using artificial intelligence and way more people
paying to use artificial intelligence than there are today. Despite that,
I think that the level of malinvestment that is out
there is going to be crippling for a lot of
the players in this space. And it certainly does appear
(09:24):
that this is going to be pretty close to winner
takes all. And the problem there is, Okay, everyone else
is pouring all this money in, and when large language
models are commoditized and the costs come down and you've
still spent all this money because you've got to spend
the money on the chips, there's gonna be a lot
of pain felt when when that happens.
Speaker 3 (09:44):
By the way, AMD today up twenty five percent of
this news, and on this news, and by the way, Nvidia,
who got at least on the surface screwed on this deal,
it's only down one percent.
Speaker 2 (09:58):
Keep in mind, in market capture, that's the same as
true AMD being up twenty five percent. Yeah, you know,
AMD's a four trillion dollar company. They was one percent.
They lose forty billion dollars. If you are AMD, they
are a two hundred billion dollar company, you go up
twenty five percent. You made fifty billions. So on a
market cap basis, it's saying, yeah, this is pretty much neutral,
but somehow a creative I don't whatever, what's ten billion
(10:22):
dollars amongst friends?
Speaker 1 (10:23):
You know.
Speaker 2 (10:24):
The third thing I was going to say about AI,
we may end up reaching artificial general intelligence, it will
not be through large language models. That technology is just
about maxed out, quite honestly from what I have seen.
And my evidence for that is a all of the additional
(10:47):
money that's pouring in is generating like very incremental improvements
at this point at tremendous additional costs, so you can't
get through that hump. And you're also now getting to
the point where you're seeing much cheaper models coming out,
but they can do like ninety five percent of it,
and it's like, Okay, you're not gonna be able to
make any money off of this because it's gonna just
become commoditized and no one's gonna make any money selling
(11:09):
a commodity because no one ever makes any money selling
a commodity. Like if you don't want to own a
copper minor like and operate it, right, then you probably
don't want to own and operate a large language model
because they're gonna get it's gonna be the same thing.
Like words from a large language model are gonna be
unrefined copper ore for the Internet. How's that for, you know,
(11:33):
a comparison. So where we stand right now, we're kind
of getting into silly season on some of the AI stuff,
and this is all also happening across a backdrop of
an American economy that really, for I think a larger
number of people feels like it's not working for them,
and so I think there's a lot of people right
now that are just like, hey, what gives here? Man?
Speaker 3 (11:57):
I know you're excited about this tool that's to replace me,
but I don't have a job, and I haven't for
quite some time.
Speaker 2 (12:04):
But you know, to quote Monty Python, I'm not dead yet.
Let's take a quick break when we return. Let's see
that's enough AI talk for now. I want to talk
nuclear power though, because this is something that I do
think is a great topic. So let's do that when
we come back.
Speaker 1 (12:23):
Thanks to US six one, seven, three, six, two thirteen
eighty five with your comments and questions about today's show,
and let us know what you think about the stories
we are covering. This is the Financial Exchange Radio Network,
breaking business and financial news first throughout the day, only
here on the Financial Exchange Radio Network.
Speaker 4 (12:54):
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Speaker 2 (13:28):
Nuclear in my backyard more of America, and the market
seems okay with it. This piece published yesterday on CMBC.
Speaker 3 (13:37):
I mean your literal backyard or in my general vicinity.
Speaker 2 (13:41):
I've said before, if you wanted to pay me in
a like an exorbitant amount of money, to put a
small nuclear reactor in my basement. Yeah, like one of
the ones they have on the submarines. Uh huh, you know,
like you could power I don't know, like my street,
my town, something like, you know, nothing huge, Just like, again,
a small nuclear reactor. I would be happy to have
(14:04):
it in my basement.
Speaker 3 (14:05):
I have a stream or water source for cooling in
your general property well water yeah, okay, yeah.
Speaker 2 (14:12):
You know, we'd probably have to expand the well, I
would imagine. I don't know that we get quite the
gallons permitted that you need to operate a nuclear reactor.
No wrre do I know what you do with the
water afterwards.
Speaker 3 (14:23):
I'm right on a river. I might just look into this, okay,
out of garden. But what is being talked about is,
you know, slightly larger nuclear power plants.
Speaker 2 (14:31):
They're still called small modular reactors. Yeah, small as relative
in that they're about a third of the size of
conventional nuclear power plants. Yes, in terms of generation and footprint.
Speaker 3 (14:41):
Quite honestly, so, haven't been to your house, but probably
not fitting in your.
Speaker 2 (14:44):
Basement, Probably not fitting there. It's something where there's still
you know, you're talking three hundred megawatt units instead of
you know, one gigawatt units. But these are things that
you are starting to see, you know, some real push
towards for a couple of reasons. The first be, hey, look,
with all this data center build out that we've talked about,
you need heavy capacity, high base load. And yes, you're
(15:08):
seeing a lot of that done initially right now with
new net gas facilities that are being built. But the
problem that you have there is, hey, if oil prices
remain low, you have less fracking that goes on in
the US, and that gas prices go up, just became
a whole lot more expensive to provide electricity, either to
your data center or to everyone else.
Speaker 3 (15:27):
So I'm going to oversimplify this a little bit, but
what's the attractiveness of these things. It's similar to what
you would get from a modular home. You can manufacture
it in one centralized place, have a team of experts
that are building them out, shipping, ship them to location,
finish on site, rather than a custom built solution for
each nuclear power plant that you manufacture supposed to be faster, cheaper,
(15:49):
And that's all you really care about right now when
you're talking about nukes. Well, now, also safeas cheap safe
would be good.
Speaker 2 (15:59):
Now, the question on this is going to be, hey,
when the rubber meets the road, can you actually get
them built? Because that's long been the problem in the US.
Speaker 3 (16:10):
And I think that encompasses two things, right, Like one,
can you actually physically build them safely, cost effectively? But
then there is yes. I think I think the answer
is pretty clearly yes. But can you actually get the
approval and site locations approved to do it? That has
historically been the number one problem with these and so
(16:30):
therein lies my question. Yeah, great, if you can build them, excellent,
if you can ship them to location. But if we
want one built, pick your location, you know, along one
of the rivers in Vermont. Are they actually going to vote,
you know, give it the thumbs up and say yes,
(16:51):
we are comfortable with this being built in our town,
in our county and our general area here to power
these homes.
Speaker 2 (16:59):
Yeah, Bass, it seems like a hard maybe. And I
think there's a uh, there's a great quote in here, uh,
you know, talking about just kind of why we're even
you know, talking about new quite honestly, we should have
been talking about nuclear for a while. It's just we
got scared off of it for a number of different reasons.
(17:20):
But there's a great quote here from UH. I don't
know who this guy is. It doesn't specify who is
Morris in this piece. It never gave a first name
or any information about Morris. I just trust him anyways,
Morris I interviewed for this. I looked through all the
pages and I couldn't find it. Maybe just got cut
off in the print. I love him, UH. To illustrate
(17:44):
how much of the world of power generation has been
up at it in short order, Morris offered a stark comparison.
Five years ago, we were worried about how we were
going to put up with demand from a twenty megawatt
marijuana farm. Hell, yeah, that's a fraction of what the
data centers are asking for. Yes, you've got you know,
open AI saying hey, we want to build a six
gigawatts of capacity with AMD. It's a little bit more
than a small marijuana point.
Speaker 3 (18:05):
Tucker, you weren't joking. His name's actually Zach Morris.
Speaker 2 (18:08):
Yeah, also known from U Saved by the Bell.
Speaker 3 (18:10):
He's the director of market Ie, a local association of
business and government leaders that promotes economic growth and cass
in Van Buren Countony's Counties, Michigan.
Speaker 2 (18:18):
There you go. In any case, I think that if
you are serious about solving America's energy problem, you need
to be talking about nuclear as a portion of that,
not all of it. And I think that the fact
that we're at least having these conversations now is great.
But when push comes to shove, will communities actually allow
(18:39):
for them to be placed near them?
Speaker 3 (18:41):
Well, if you want to, you need to put together
very clear economic benefits for that area. Like I don't
think that there is a good name.
Speaker 2 (18:52):
If I'm a nuclear power plant, I'll be like anyone
who lives within five miles you get free power for life.
Speaker 3 (18:57):
Or like like property taxes permanently cut in half, Like
whatever you want to do, Yes, but like make it
really clear to those who are allowing it to be
built in their area what the benefit's going to be. Yes,
because it's going to hurt property values at least in
the short term. Yes, So make it really obvious this
is what you're going to benefit from this. We don't
know how much downside is. Yeah, this is hellister is
(19:20):
going to be. That's what you need to do to
get these things built. It's got to be compelling.
Speaker 2 (19:24):
Quick break here. Wall Street Watch is next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch. A complete look at what's moving markets so
far today right here on the Financial You'll Exchange Radio Network.
Speaker 4 (20:01):
Investors have turned the page to a new week as
the government shut down drags on. However, the big news
of the day surrounds a massive computing deal between open
ai and AMD. Right now, markets are mixed. The Dow
is down by third of a percent, or one hundred
and fifty three points. Sm P five hundred is up
(20:21):
two tenths of one percent, or fourteen points higher, Nasdaq
is up three tenths of one percent or eighty points higher.
RUSS two thousands up four tenths of one percent, Tenure
Treasure reeled up two basis points at four point one
four eight percent, and crude oil up one in a
quarter percent, rating at sixty one dollars and sixty four
(20:42):
cents a barrel. Open AI and AMD agreed to a
multi billion dollar partnership to collaborate on AI data centers
that will run on AMD processors, AMD surging twenty seven percent,
while competitor in Vidia seeing its stock fall one percent.
Traders will continue to watch for more developments from open
(21:04):
Ai this afternoon during its annual Dev Day event, which
will feature announcements, keynotes from executives in a chat between
CEO Sam Altman and longtime Apple designer Jony Ive. Meanwhile,
Pallinteer shares rebounding nearly four percent after its stumble on Friday,
the data analysis company pushed back against the Reuters report
(21:26):
about security flaws and a communications platform designed for the
US Army. Elsewhere, Fifth Third ban Corp. Announced a ten
point nine billion dollar all stock deal to buy regional
Bank America. Fifth third shares are down by one percent,
while k America stock is jumping fourteen percent and Tesla
shares up over three percent after the electric car maker
(21:48):
teased a product launch announcement on X with tomorrow's date,
leading to increasing speculation about the release of a new car.
I'm Tucker Silva, and that is Wall Street watch.
Speaker 2 (22:00):
Mike, what do we think Tesla's gonna come out with tomorrow?
Speaker 3 (22:04):
What you're gonna start with dancing robots?
Speaker 2 (22:07):
You have to give one real answer and one fake
answer that might end up being the real answer. Here's
my real answer. Guess the low cost model. Why you know,
the bargain basement version that they think they can maybe
get to like thirty five thousand or thirty three thousand.
Speaker 3 (22:26):
I think it's seem to be even less exciting. I
think it's gonna be a revamped version of self driving.
Speaker 2 (22:32):
Okay, and now what about your joke prediction that still
might actually be something they announced tomorrow?
Speaker 3 (22:38):
Uh, robots driving the self driving cars.
Speaker 2 (22:43):
Helicopters or drones like, so, you know, some kind of
flying car type thing. We'll see what we get a
piece here in the bloomy Berg or nope, it's in
the Wall Street journal Berg. Why delaying your Social Security
benefits may not make sense? So a lot of people
talk about, hey, I want to delay as long as
(23:03):
possible to maximize that benefit, which, again, if you have
you know, good longevity and YadA YadA like that can
obviously make sense. The place where it stops making sense
is where you actively harm other parts of your retirement
plan in order to basically make this happen. Where okay,
(23:24):
you could be you know, pulling from other assets that
might rise at a rate that's faster than what soil
security rises at. Maybe when you look at the inflation
assumptions that you're using for Social Security, you're not looking
at them accurately, and so there are cases where waiting
till age seventy may not make the most sense. It
may actually hurt your retirement planning. Yeah.
Speaker 3 (23:45):
I mean the easiest one that I think most people
know about is if you're have some health conditions this
if you die, you get nothing, nothing soial security or
a tiny little check for your spouse. But you know,
there's all sorts of other considerations. I was working with
somebody recently who, for instance, has a minor child and
will have a minor child while he's on Social Security.
There's a whole bunch of extra benefits you get for
(24:07):
your minor child in terms of cash payments to you
for having a minor child while on Social Security. Like,
why would you want to delay your Social Security in
that case? The piece that Wall Street Journal makes is,
you know, oftentimes people make these decisions in a vacuum,
and that is a fair point, Like, oh, I'm comparing
the increase on my Social Security to my buying power today. Yep, Well,
(24:31):
four years from now, your cash that you have today
is not going to buy you as much stuff. And so, yes,
you need to assume the increases on social security, but
you also need to assume the increases on the basket
of goods that you are purchasing. Okay, but frankly, if
somebody's doing all the math on soci security, I think
they're probably factoring that piece in would be my guess.
I think the point that you made earlier is a
(24:53):
good one, Chuck, Like, if I don't have Social Security,
how am I going to pay my bills?
Speaker 1 (25:02):
Like?
Speaker 3 (25:02):
Do I have to take a loan to pay my
bills if I'm not on so security? Probably a good
reason to pull so security at that stage. There's other
stuff too. I mean, ultimately, the decision on social security,
I say this over and over again, like you have
to make it within the confines of your overall plan.
And so if one of your key goals, for example,
is to wash as much money out of your IRA
(25:24):
and get into a roth as possible because you're terrified
about your personal tax rate going up, then you know
that should play into account on your social security strategy,
because that can help pay your bills while you wash
those taxes out. There's a lot that goes into all
of this. I think would be my main point when
it comes to that social security discussion. You have anything
else to add on it? Chuck, No, I think that's
(25:45):
kind of the big too often people look at it
as this like holy grail, like, so security is just
another asset for you, right, exactly right? And just how
do I use it? If I have a pension, if
I have social Security, if I have a four to
oh one K I have all these assets, what's the
best one for me to tap at what point in time?
Speaker 2 (26:01):
Yeah, it has its pros and cons, just like anything else.
For a lot of people, it is their only source
of retirement income. I think we're still around a third
of people. That's the only thing that they have when
they get to retirement. But you still have to figure
out what makes the most sense and what works for
you best along these lines. According to a Baron's piece,
(26:24):
eighty percent of workers say they're making little or no
progress saving for retirement. So this was a survey that
was done by Goldman Sachs and they surveyed thirty five
hundred and eighty eight workers in fifteen hundred and fourteen retirees,
so about five thousand people. And I guess, like I'm
(26:46):
just trying to understand, like this is where we get
into some of the terminology here and trying to understand
what it means. So it says forty percent of working
Americans are now living paycheck to paycheck according to the report,
which quite honestly doesn't match up with some of the
other data that we get where it says that like
eighty percent of Americans have at least four hundred dollars
(27:07):
saved up for an emergency, which means you're not living
paycheck to paycheck.
Speaker 3 (27:10):
Right, people. I think we've talked about that at length,
that people miscategorize whether or not they are living paycheck
to paycheck. If you are living paycheck to paycheck, it
means that you are not saving anything into your four
h one K or any other You're not saving any
money on a monthly basis, and in all likelihood you
are also running up some debt. If that is the case,
then you are probably living paycheck to paycheck correct.
Speaker 2 (27:32):
Which I still think is probably like and again this
is god feel so like I've pulled no one. So
it's probably worse than useless. I bet it's probably about
a quarter of Americans are truly in that situation. So
as an additional two fifth say they aren't making meaningful
progress on their retirement goals, what does meaningful progress mean?
(27:56):
How does one define what is meaningful versus not meaningful progress?
Because the data that we do get from the big
retirement providers show that account balances continue to grow at
a pretty you know good clip obviously helped buy markets,
and so I think I struggle with this piece because
(28:16):
I think I can hold two thoughts in my heads
at the same time. The first is there is a
large portion of America where the economy is not working
for them right now, but the surrounding data is often
very conflictatory, if not downright, you know, pointing in completely
opposite directions. And so I kind of struggle to understand
(28:41):
where the biggest pain is other than I think certainly
we see young people right now just struggling to even
get into the workforce in a way that we haven't
in quite some time. I think we see a situation
where for people close to retirement, because of a number
(29:01):
of different situations, people are still having to work longer
in order to get to retirement. But I don't really know.
I don't have a great handle on kind of that
middle age demographic and what we're seeing there, other than
it's probably pretty uncomfortable for you know, a number of them,
just because they're taking care of kids and taking care
of parents who now you know, might be dealing with
(29:22):
health problems.
Speaker 3 (29:23):
Yeah, and I can look, this story does fit very
well into others that we've covered about the economy, which
is a vast number of people feeling like they're falling behind.
What it actually leads to in terms of economic growth
and stock market moves. We've talked about this at length,
but I just I hate to say this, but I
(29:44):
don't know how much it matters. I think at some
point it does, Right, when when you get to a
certain point where a large group of people in your
society are struggling to keep pace and feel as though
they're falling behind, it can lead to all sorts of
really ugly stuff. But when that breaking point hits and
what the impact is on markets to the economy, I
(30:05):
don't know.
Speaker 2 (30:07):
And this is no and this is before we even
get to know all of the chatter about hey, how
could AI impact employment prospects and wages over the next decade.
Right once again, don't know quick break here. When we
come back, we're gonna be talking about why twenty twenty
six will be the year of the used ev.
Speaker 1 (30:27):
Right after this, miss any of the show. Catch up
at your convenience by visiting Financial Exchange Show dot com
and clicking the on demand icon, where you'll find all
of our interviews in full shows. This is your home
for the latest business and financial news in New England
and around the country. This is the Financial Exchange Radio Network.
(30:48):
The Financial Exchange streams live on YouTube. Like our page
and stay up to date on breaking business news all
morning long. This is the Financial Exchange Radio Network.
Speaker 2 (31:10):
Peace for market Watch. Are we in recession? Yes if
you live in one of these twenty two states, so
obviously you can't really have in my opinion, how small
you're gonna go on this. If you're gonna say that
you have a state level recession, well then can you
have a city level? Can I personally be recessing while
Mike is, you know, obsessing, like you know, it's just
(31:31):
at a certain point it gets too granular and it
doesn't mean anything.
Speaker 3 (31:34):
I agree, Well, I will say that if you are
listening to this show on terrestrial radio, then you probably
live in a place that's in you know, their definition
of recession right now, which is compelling, right, Like, pretty
much all of New England meets this category at the moment. Yes, Now,
(31:55):
I know I'm excluding a few of our listeners out
in I'm gonna fail to name the city, so I'm
just gonna not do it. But Portland, like you know,
there's a few places where that's not the case. But yeah,
there is a significant portion. And we've talked about this
how unemployment rates, for example, in Massachusetts have climbed substantially
faster than the national average.
Speaker 2 (32:17):
Now what I would love to see is show me
this chart and how it evolves, you know, kind of
over time. Yeah, because what I can tell you is
this doesn't mean anything good. Sure, Like this is not
so as much as I believe, Yes, Like, I don't
think that you can have a state level recession because
(32:38):
that's just not what that word means.
Speaker 1 (32:41):
Right.
Speaker 3 (32:41):
We have a pretty strict definition of recession in this I.
Speaker 2 (32:44):
Do think you can say, hey, if you're hitting these
metrics in a certain you know, in a growing number
of states, it doesn't necessarily mean anything good. So that's
I think where where I kind of end up landing
on this, you know, when it's all said and done.
The big thing is that when you are talking about,
(33:05):
you know, the states that are seeing these problems right now,
it's predominantly the northeast and northwest, and then kind of
a smattering of Midwest states. And in the southeast you
basically have Texas and Arkansas that I'm sorry at Texas
in Alabama.
Speaker 3 (33:23):
That fit the bill. I'm coming around to agree with
you that this doesn't matter, Chuck. If you have twenty
two states in recession, but none of them are New York, Florida, Texas,
or California, then it doesn't matter.
Speaker 2 (33:33):
Right, it doesn't matter. I say this with all the
love in the world for the state of Vermont, which
I believe is the second smallest in the Union. It's
just don't have a big enough impact economically. It's just
not Likewise, if Texas, you know, goes into a quote
unquote recession, man like that, that's a whole lot of
(33:57):
economy that you got to figure out how to turn around.
Speaker 3 (34:01):
And it's not as though we're looking at a map
here that says, oh, yeah, these twenty two states are
in recession, and then most of the rest are just
barely keeping along. Like no, Texas and Florida and Louisiana
and big parts of the country Arizona are actively expanding place.
Speaker 2 (34:16):
Data center growth and things like that. And yes, even
though we talk about Texas and Florida in the real
estate markets there and like, hey, it's really bad from
a real estate perspective, at.
Speaker 3 (34:24):
Least they were building real estate of the last few years.
And also real estate is not everything. There's other stuff
going on there.
Speaker 2 (34:31):
So I think that overall, yes, this has some concerning signs.
It's not what you want to see, but just counting
states without noting the magnitude of those states does a
disservice to what this means.
Speaker 3 (34:44):
It is a good transition, though, and a good reason
to attend one of our up to upcoming events. We
have won this Thursday, and there are a few still
a few spots left. It's at the Margaritaville Resort in
Cape Cod October ninth. This Thursday, We're gonna be doing
a live broadcast this hy show, followed by a presentation.
Chuck and myself will be hosting lunch is free. The
(35:04):
whole seminar, the whole live broadcast is free. We're gonna
be talking about the state of this economy right now,
what it means for young people trying to enter the
labor market, what it means for folks that are on
the cusp of retirement, this infatuation that every investor seems
to have with artificial intelligence. We're covering all of it
at this live broadcast and live post broadcast event. We
(35:26):
would love for you to join us, so you can
check it out at Armstrong Advisory dot com. In addition
to the one this Thursday, we have one next Thursday
as well, and again a few spots left at both
Showcase super Lucks and Chestnut Hill on October sixteenth, Margaritaville
Resort in Cape Cod October ninth. You can register at
Armstrong Advisory dot com, but again space is limited and
(35:46):
they are coming up quick. Eight hundred three nine three
four zero zero one really fun events. We've done them
in the past. They're always a good time. You can
come sit with us and you know, join us for
part all of it. But please do join us and
call or go online to register eight hundred three nine
three four zero zero one or Armstrong Advisory dot Com.
Speaker 1 (36:07):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (36:23):
Twenty twenty six will be the year of the used EV.
Analyst says here's why, and basically what they are saying is, hey,
in a lot of cases, you're starting to get closer
and closer to cost parity between evs and gas cars.
There still is a price premium for used EV's relative
to used vehicles of about nine hundred dollars, so there
(36:46):
is still something there. The piece that I struggle with
on this though, is that when you look at new vehicles,
it's a wider gap, which means if you're buying a
new EV, you're expecting much more rapid depreciation on your car,
which then leads to the question why would I ever
buy a new one if I could just buy a
used one, which then starts to push the price of
(37:09):
used ones up because all the people looking at new
ones say, I'm gonna look at the used ones, which
then in turn makes this not look as attractive.
Speaker 3 (37:15):
Yeah, I guess part of the weird economics of EVS
is just the battery degradation fear.
Speaker 2 (37:23):
I think it's much more spear. It's a real thing.
Speaker 3 (37:25):
It's a real thing. But I think it's also a
very new and unknown formula that people have to account for. Like,
you know, when you're buying an internal combustion engine, you
kind of have a sense, right, Okay, it's three years old,
it's got twenty thousand miles, it's this brand. What can
I generally expect based on my experience. You just don't
have that with EVS, And so I think that there's
some extra discount built in there. And then the least
(37:47):
factor here too, right, Like over the last few years,
a ton of these vehicles have been leased rather than
purchased for a few reasons. One would be some of
the tax incentives that are available for leased cars. Two
would just be the I'm not sure about ev I
want to test it out in the least rather than
an ownership plan. And so those are going to be
hitting the market over the course of the next few
years as well.
Speaker 2 (38:07):
Take a quick break for just a little bit here,
but when we come back, we got some housing market chatter.
We're talking Amazon's new Prime event, and then we're gonna
be talking about some air travel data as well. Stick around,
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