September 15, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss Elon Musk purchasing $1B worth of Tesla stock. Tesla's chair says only Musk can lead Tesla's next phase. 'Underwater' car trade-ins are at a 4-year high. More Americans are stuck with the jobs they can get, not the ones they want. How to build a million-dollar future for your kids.
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Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(00:42):
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(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you here, and stock's kicking
off the week with a strong start. We've got the
Dow Jones Industrial average up about a quarter percent eighty
five points, s and P five hundreds and a half
percent about thirty three points, and the nasdak Can posite
up one hundred and sixty seven points or three quarters
of a percent. Tenure US Treasury continuing to see yields
(01:34):
falling down two point six basis points to four point
h three four percent. And then as we head over
to commodity markets, Oil West Text Center Media getting a
little bit of a bump up seventy six cents a
barrel to sixty three forty five. And we've got gold
today up another fifteen dollars an ounce to thirty seven
oh one and twenty cents. So gold back above thirty
(01:58):
seven hundred for only the second time now, and we'll
see if it ends up holding the previous time that
it was there, which was I believe last Tuesday. It
was up there for about a minute and a half
and then went back below, So we'll see if it
holds up better this time. But gold about ten dollars
away from another all time high. At this point, let's
(02:22):
talk a little bit about the news out of Tesla today.
Elon Musk announced will not announced. He went and filed
with the sec A form to allow him to buy
a billion dollars worth of Tesla's stock. And so this
has Tesla's stock rising by more than a billion dollars,
(02:42):
in fact, rising by about six percent right now, so
several tens of billions of dollars as a result of
Musk's show of support in the company.
Speaker 3 (02:53):
Remember a couple of weeks.
Speaker 4 (02:54):
Ago I asked if Tesla's or if Elon still has
the power to move the stock he does.
Speaker 2 (02:59):
This tails nicely, Quite honestly, I don't know what else
to say about this exactly, but this is on the
heels of Musk's proposed new pay package that could be
again like trillions of dollars, yes, just completely crazy pants numbers. Potentially,
you know, a trillion dollars if all of it ends
up being satisfied, which I think is unlikely, but hey,
(03:22):
shoot for the moon, right, So I.
Speaker 4 (03:24):
Think most thought that his original pay package with the
share targets that were looked at were thought that were
unlikely so.
Speaker 2 (03:32):
Yeah, and so, the chairff Tesla's board, Robin Denhelm, gave
an interview on Friday on Bloomberg and I'm going to,
you know, read the quote here. He's a generational leader.
There aren't any other people out there like Elon who
can actually lead the company over the next decade or so.
I happen to agree with her. Now, I don't agree
(03:53):
with Elon Musk on a lot of you know, what
he has done in the last couple of years, as
far as like splitting his time and you know, maybe
spreading himself too thin, and certainly anytime that you get
involved in politics it makes things challenging from a business
perspective these days. But I think that when you look
at it, there's no one other than Elon Musk who
(04:13):
can actually run that company, because without Elon, the stock
doesn't trade anywhere near where it does today. Do I
think that Elon is you know, critical to actually like
developing the technologies that they're going to No, like anytime
that you're a big company. He never really was, like
maybe he had, but I think sometimes some people think
(04:34):
that like he might be like central to it, like
he's you know, Einstein in this genius. Who's you know,
single handedly doing it? I don't think that's him. I
think what he is exceptional at is not delivering products
on time, which he's horrible at. But I think what
Elon is exceptional at is identifying the lane that Tesla
needs to travel in pun intended, and then identifying what
(04:57):
needs to be done in order to to clear that
path as well as possible for him. And that can
mean that there are sometimes like the early twenty tens,
where Elon says, yeah, I'm going to push for as muy,
you know, I'm gonna align myself politically in such a
way that I can get as many subsidies as possible
for my cars and solar panels and everything that I
(05:20):
want to develop. And then hey, now that I need,
you know, to get into robotics and AI and stuff
like that. Great, I can pivot and figure out how
to make that work for me for a regular From
a regulatory perspective as well. I think he is really
good at doing that.
Speaker 1 (05:35):
Yeah.
Speaker 4 (05:35):
I was gonna ask the follow up then, which is, okay,
so what lane is he clearing for Tesla right now?
Speaker 3 (05:40):
It seems to be all about robotics.
Speaker 2 (05:42):
I don't think he wants to be a car company
anymore because it's a bad business. Like not Tesla, but
the car industry is an incredibly tough, demanding, capital intensive
business that is hard to operate in the best of times.
And I think it served a role for Elon and
(06:03):
for Tesla. If we view Tesla now as just a
car company but trying to do all these different things,
I think it got them to the point where they
have the capital to be able to do some of
the other things they want to do now. But I
don't think Elon. I mean, you listen to everything over
the last couple of weeks about you know, the new
master planned version of this and that, and it's pretty
(06:24):
clear that he's viewing Tesla's cars as being secondary to
the future of Tesla as anything related to robotics and
artificial intelligence, right.
Speaker 3 (06:35):
Yeah, it does. Yeah, And that's.
Speaker 4 (06:37):
Been where I've been kind of scratching my head, is
what is going to be the big breakthrough on that
front and is it going to genuinely drive quote eighty
percent of the company's long term value.
Speaker 2 (06:51):
And here's the thing that's gonna be challenging for must
that's different from what he's done with Tesla to this point, Mike,
was there any anyone else in the world when Elon
was trying to develop, you know, mass market evs in
the mid twenty tens, Was anyone else there really as
focused on it as he was? The big automakers like
(07:13):
didn't really care. They're like, okay, like here's a hybrid
or two, Like not really, here's the Nissan leaf like great,
it goes ninety miles. No one was really trying to
compete there. Yeah, the key difference right now, everyone in
their grandmother is trying to build robots and artificial intelligence programs,
(07:35):
and this is gonna be one where they're gonna have
to compete in real time to see who's the best
of the best. And that's a fundamental difference from Tesla ware.
They had a huge head start on everyone. So if
they can innovate faster and produce better products, okay, sure,
like you know, there's that future, but they're gonna have
(07:58):
to prove it because it's a different competitive and environment
than the one in which they developed Tesla's core products
over the last ten years.
Speaker 3 (08:05):
Yeah, I don't know.
Speaker 4 (08:07):
I'm also just struggling to connect a few dots, like
they want to excel in robotics, and specifically they want
to seemingly excel in a consumer facing robot. I mean,
at least that's what they are marketing and putting out there,
the kind of humanoid type robot.
Speaker 2 (08:25):
Which, by the way, that's where everyone's focusing now.
Speaker 4 (08:28):
Yeah, I mean we've talked about I mean, everybody's seen
the videos from what's the Boston I think the Boston
Post Dynamic Boston Dynamics, and there in their type robotics.
Maybe they can do that again where they can produce
a product that is familiar like Tesla's cars were, but
better than everything else on the market. But it's it's
(08:48):
a kind of a new class of product that nobody
has any experience with, so it is very fundamentally different
from what Elon has done previously with Tesla.
Speaker 2 (08:56):
And I do happen to believe that this is an
area that people are not giving enough appreciation there as
far as where it can go in the next three
to five years. And I think it's just because it's
so new, and to be honest, we're a little bit
freaked out by the idea of like humanoid robots running
(09:17):
around and stuff. I get it. It's it's kind of
creepy and freaky and scary. But here's the case for
a company. Just as an example is, Hey, even if
that robot requires human intervention twenty percent of the time,
if eighty percent of the time it does exactly what
(09:39):
it's told, then I can have one person run a
fleet of four to five robots and get all the
productivity gains from doing that. It's not necessarily that you
need fewer workers overall, but like, think about just all
the stuff that we need to do in the world, man,
Just all this stuff that we need to do, and
(10:02):
all the stuff that, by the way, no one really
wants to do unless you pay them really well because
they're just hard jobs and they're pain and it's challenging.
This is the stuff where you can say, hey, you're
still going to have the job overseeing the robots, but
they're gonna be able to do more than we could
do on our own, and it's going to give you
(10:23):
that additional power. It's no different from Hey, when you
had to go and you know, put all the screws
into the house by hand, hammer all the nails in
by hand. Man, it took a lot longer to build
a house than with a nail gun and some power tools.
But we didn't say, well, we can't do that because
we'll lose jobs. No, we just said, hey, this will
(10:44):
help us build more houses. Yep, so will robots. It'll
require different skill sets and different ways of managing it.
And I do believe one of the big threats here
is hey, a lot of and I'm guilty of this too,
saying hey, like, think about all these jobs that you
can't outsource, like plumbers and electricians, and I think more
(11:07):
of those jobs are unfortunately gonna be threatened by robots.
Then we want to admit now. And so it's not
just the office worker is gonna get, you know, their
job threatened by large language models and things.
Speaker 4 (11:18):
Like that, not just the Amazon warehouse worker who's getting
all of us.
Speaker 2 (11:22):
Like, I'm telling you that there are different forms of
AI and robotics that are gonna come for all of
our jobs, and we're all gonna have to reckon with this,
and it's it's gonna be hard because I have no
idea what the path is to managing it, but it's
it's coming for us. And Tesla's gonna compete on that
playing field because I think they rightly see that this
(11:42):
is the next frontier. Can they win on that one?
I don't know, but they're gonna compete. And I do
completely agree that there's no one but Elon that can
run that company because more than any allow anyone of
more than any other executive I've ever seen, even Steve
Jobs and Warren Buffett, the alignment between the brand and
(12:06):
the person is just at a different level.
Speaker 3 (12:10):
Yeah, right or wrong, that is definitely true.
Speaker 2 (12:13):
Let's take a quick break. When we return, We've got
some trivia.
Speaker 1 (12:20):
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Speaker 5 (12:57):
All right, Tom, sure you're in the financial shame. Today
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of King Charles and Princess Diana, Harry is in the
line of succession. However, he will likely never take the
throne trivia question today, Where is Prince Harry in the
(13:18):
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Speaker 2 (13:46):
Couple stats on the auto loan industry that just continue
to tell me that, man, we're not doing it right
when it comes to buying depreciating assets that are typically
either the most or second most expensive purchase that we
ever make in our lifetime.
Speaker 3 (14:03):
Yeah really, so.
Speaker 2 (14:05):
Here's the deal.
Speaker 3 (14:06):
Uh.
Speaker 2 (14:07):
Twenty six point six percent of trade ins towards new
car purchases in the second quarter had negative equity, meaning
they owed more than the car was worth, and specifically,
the average number was about sixty seven hundred dollars that
they owed relative to what the car was worth.
Speaker 4 (14:25):
That is a tremendous amount of negative equity. I'd like
to throw it out. That's a lot of money to
be underwater on your car and trading in. Not to
be underwater, right, but to be trading in. So and
here's how it happens.
Speaker 2 (14:39):
It's because people want to buy certain vehicles and they
can't afford them, and so they end up taking on
like seven or eight year auto loans.
Speaker 1 (14:48):
Uh.
Speaker 2 (14:48):
Seven year auto loans now are almost a quarter of
new loans that are out there. And here's here's what
I have to say about this. It's it's not necessarily
even don't buy the vehicle because look, here's the thing.
All of us do things that are not the best
financial decisions from time to time. I certainly do. I
(15:09):
do things where it's like, you know, if someone like
looked at my like my credit card was like you
spent what on what? I'd be like, Yeah, probably wasn't
you know, the best thing, But hey, like whatever.
Speaker 3 (15:19):
Interesting to see where this is going go on.
Speaker 2 (15:22):
Where I'm going on this is generally, if you're someone
who is taking out a seven year car loan and
then trading it in with a bunch of negative equity
usually means you're trading it in within the first two
to three years of that loan. If you know you're
someone who wants to have a new car every two
to three years, stop buying. You should be leasing, not buying.
Speaker 4 (15:41):
I gotta tell you if you are doing this, there
are I can think of the two scenarios in my
mind where this makes any sense at all, any sense
it all? Which ones your car is totaled and you
have no choice. Yeah, that's not happening a quarter of
the time. No, So, like there's your scenario number one,
my car got total I cannot drive it, or it's
so unreliable that I need a new mode of transportation
(16:04):
in order to continue working.
Speaker 2 (16:05):
Even there, Quite honestly, I don't know exactly how that
works between your auto loan and the insurance company, Like.
Speaker 4 (16:13):
Like, it's not technically not a trade in. Yeah, so
I don't think that actually fits this category. But that
was one of the circumstances I thought of, where like, Okay, yeah,
if your car is ruined, sure it can be underwater,
and I can understand totally get the other one.
Speaker 3 (16:25):
Would be I suppose if you're driving a sixty.
Speaker 4 (16:30):
Thousand dollars car and you finally have a come to
Jesus moment and you're like, yeah, I can really afford
it used Honda and I'm driving an Audi, and so
I am going to trade in my negative equity vehicle
and go buy a cheaper vehicle with a much smaller
payment and sure come out on top. Because of that,
even then, I've got a ton of questions. Every other
scenario out there is terrible person finance. If you need
(16:53):
a car that's new every two to three years.
Speaker 5 (16:56):
Tucker, you No, I just thought of another example. Just
a third kid. You need to upgrade and get a
bigger car, a third row. I know somebody had to
do that recently, and they had a previous car, I
think it was. It was a Wrangler and they only
had it for like a year and a half. Yeah,
and they had to get a bigger car because of
the third kid.
Speaker 4 (17:14):
Yeah, you know, that is another scenario that does fit
in there.
Speaker 3 (17:21):
And I guess I go back to by that.
Speaker 4 (17:23):
Yeah, I do too, I just because that's I want
to see more planning.
Speaker 2 (17:27):
It's a one time upgrade. Yeah, Yeah, and again like
when you say you want to see more planning, like, look,
we all have things that it's like, oh gee, I
wish I could have planned for that. Yeah, life happened.
Like what I'm saying, like, we all have times where
we don't make the best financial decision. But when twenty
six point six percent of trade ins have negative equity.
Speaker 4 (17:46):
It's not because all of them are being financially disciplined
by getting cheaper cars and suddenly had babies.
Speaker 3 (17:51):
That's not a right.
Speaker 2 (17:52):
Yeah, no, there's just not that many three family, three
kid households.
Speaker 4 (17:56):
That's not a quarter of households. Usually, what it is
is if you're a god enticed by that new commercial
for that brand new pickup that you just had to have,
I will feel so much.
Speaker 2 (18:11):
Man, Guys, I'm not gonna rip on the pickup owers.
It's it's not just I'm.
Speaker 4 (18:16):
Picking on them because it's the best selling vehicle out there,
and so that's where I'm honing in on.
Speaker 3 (18:23):
But you're right, it's it's everything else.
Speaker 2 (18:25):
If if you're someone who needs a new vehicle every
two to three years, and that's your thing, Like again,
we all have our thing, Yep, I go to a
lot of Boston Bruins hockey games immediately depreciating assets. Is
it the best financial decision? No, especially not this year
where they're gonna lose like seventy of their games. Probably okay, sneaky,
(18:51):
let's let's not go too far.
Speaker 4 (18:52):
So.
Speaker 2 (18:53):
In any case, we all have our things that we
spend money on that are not good financial decisions.
Speaker 4 (18:58):
But there are better ways to do it than right
tinuinely trading in underrep cars, like think about whether or
not a lease could make sense for you where hey,
your payment might actually be less and then you don't
owe a bunch of the end of three years and
you could just move into a new lease.
Speaker 2 (19:12):
Anyways, there are ways that you can structure these things
that are better.
Speaker 4 (19:17):
My signal would be that if you're underwater on the
car in the first place by sixty seven hundred dollars,
then going with the lease instead is still probably not
the financial decision.
Speaker 2 (19:26):
Maybe not, maybe not, but easy to judgement over here.
We just got to make better decisions on the cars.
Quick Break, Triva Answer and Wall Street Watching Next.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio. Every day,
It's the Financial Exchange on the Financial Exchange Radio Network
Time now for Wall Street watch a complete look at
what's moving markets so far today right here on the
Financial Exchange Radio network.
Speaker 5 (19:58):
And meeting week is here, and markets are currently in
mixed territory as Wall Street eagerly awaits the Central Bank's
likely twenty five basis point interest rate cut at the
conclusion of their meeting on Wednesday. Right now, the Dow
is dipping into negative territory. SMP five hundred is up
four tenths of one percent, or twenty eight points higher,
(20:21):
NASDAC up eight tenths of one percent or one hundred
and seventy seven points higher. Russell two thousand is up
about a half a percent, Tenure Treasure Reel down two
basis points at four point zero three six percent, and
crude oil up nearly one percent higher, trading just above
sixty three dollars a barrel. According to Treasury Secretary Scott Besson,
(20:41):
the US and China have reached a framework deal for
social media platform TikTok. Meanwhile, a new filing with the
SEC revealed Testa, the CEO, Elon Musk, purchased about one
billion dollars in the ev maker stock, marking his first
purchase of the stock in the open market. Since February
of twenty twenty test the stock is up over six percent.
Speaker 1 (21:02):
Now.
Speaker 5 (21:02):
Another major name and Nvidia, making headlines after China's antitrust
regulator said a preliminary investigation showed that chip maker violated
the country's anti monopoly law and would conduct a further investigation,
and Vidia stock is retreating about half a percent. Separately,
China said it had launch probes into certain US analog
chip imports Texas instruments down nearly three percent, while analog
(21:26):
devices in on semiconductor are seeing slightly or trading slightly lower.
Wall Street Journal reported that agriculture company Corteva is mulling
a breakup that would separate its seed and pesticide business
into two separate companies. That stock is down about three
percent and with its gains today now up about three percent,
(21:47):
Alphabet has officially surpassed three trillion dollars in market cap.
I'm Tucker Silva and that is Wall Street Watch. And
in the previous segment, we asked you the triviy question,
where is Prince Harry in the line of succession? That
would be fifth fifth on the list. Prince Harry's behind
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(22:11):
from Sutton mass Is our winners today, taking home a
Financial Exchange Show T shirt. Congrats to Bart and we
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Speaker 2 (22:24):
Mike, We're starting to see kind of an interesting set
of anecdotes popping up that I don't think we've really
heard in probably twelve thirteen years. It's the ones of, Hey,
I've got, you know, a college degree or an advanced degree,
you know, beyond that, and I can't figure out how
to get a job other than you know, hourly work
that I feel overqualified for. So there's this piece titled
(22:46):
more Americans are stuck with the jobs they can get,
not the ones they want. And the last time that
I feel like I really heard about this proliferating was
probably that post financial crisis period.
Speaker 3 (22:57):
Yeah.
Speaker 2 (22:57):
The part that makes this really interesting is that unemployment
right now is at four point three percent, and if
you look back at the post financial crisis period and
where the unemployment rate.
Speaker 3 (23:11):
Was, then wad peak twenty ten? Uh, yeah, you.
Speaker 2 (23:16):
Peaked in twenty ten at or just around ten percent,
so more than double the unemployment rate of now. But
it was high for a while. I mean, you didn't
get below six percent until you were out to like
twenty fourteen or so.
Speaker 3 (23:29):
So I guess what.
Speaker 2 (23:30):
I'm trying to reconcile is a few different things. We
know that the hiring picture for recent college grads is
not good because they now have a higher unemployment rate
than the rest of the country as a whole. Same
thing for recent high school grads. It's not a college
grad thing. It's just recent grads are struggling, So I
can reconcile that. But overall, the damage to the labor
(23:54):
market seems to be relatively contained, simply because combination of
demographics and deportations has reduced the available labor force. And
so if you if you had a job prior to
the last couple of years, you should generally be in
a pretty good spot because you're probably in the same
job that you've been in or have been able to
(24:15):
make a lateral move.
Speaker 4 (24:16):
So I guess what big difference is. It's not being
paired with the layoffs.
Speaker 2 (24:20):
No, So I guess what I'm trying to reconcile here is,
you know this this talks about, Hey, more Americans are
stuck with the jobs they can get, not the ones
they want. That still feels to me like it should
be a relatively small subset of the population, and yet
these stories are coming out. So I'm just trying to
make sense of this and what it means. I guess,
(24:41):
you know this. One of the people they interview in
here is a thirty six year old. Now granted she's
in you know it, which is you know, an area
that's being potentially changed by AI as well. But I
don't sit there and say, Wow, this must be a
really tough job market for mid thirties. It special, but
maybe it is. So I just feel like I don't
(25:03):
have a great handle on this labor market. I guess I.
Speaker 4 (25:07):
Do get the sense that it is a pretty tough.
When I talk to people that are of any age
demographic working in coding software development, it sales any of
those areas. Not all of them are unemployed. Don't get
me wrong. Sure a lot of them are either unemployed
or very nervous about their future employment.
Speaker 3 (25:30):
And I think a lot of that has to do
with a number of factors.
Speaker 4 (25:33):
But AI, especially the other area that I see it
and probably only because we operate in the Boston area.
Biotech anybody that's been working in the biotech space at
really any level, whether it's marketing, corporate consulting, there are
a lot of folks there who are saying, this is
(25:54):
not the market that was just two or three years ago.
But I'm with you, Chuck, I don't know what that
means for their broader economy. I don't think it's gonna
mean like you know, in twenty ten, it meant people
lose their houses, and it doesn't feel like that right now.
Speaker 3 (26:08):
Well, and I guess the.
Speaker 2 (26:09):
Other things are like when you look at a lot
of the broad based economic data out there, not even
from the federal government, talk about like what you see
from the banks and retailer is it. There's not really
anything out there that's pointing to like a broad based downturn.
Speaker 4 (26:25):
Now, the spending is still happening, but it's just the
uncertainty seems heavier, but everything else is still I guess
the answer is people seem dissatisfied but are generally making
ends meet.
Speaker 2 (26:40):
But this also then gets back to hey, so much
of the spending power is tied to the top twenty
percent of the workforce now that maybe it really is
just the vast majority of people are struggling, but they
don't make enough to have it, you know, impact the
broader spending distributions at this point.
Speaker 4 (26:58):
Yeah, it's either way, like it's not good, it's not
I keep going back to something chuck though.
Speaker 3 (27:06):
I do feel as.
Speaker 4 (27:08):
Though a lot of employers are really nervous about separating
from their existing employees and hiring new ones, and part
of that is a general concern about tariffs and the
economy part of it. I really genuinely believe that investors
right now are interested in efficiency. They want to see
efficiency at companies, and they want to see them be
able to point towards AI as the reason that they're
(27:30):
becoming more efficient, and that has to put pressure on
managers as to whether or not to hire. I really
think that that as an effect that is only kind
of attached to the AI story. I think the exuberance
around artificial intelligence is causing hiring managers to say, I
(27:51):
really got to put a cap on my spending here,
because we need to signal to investors that we are
benefiting from AI, whether or not we truly are.
Speaker 3 (27:58):
And so that could turn around.
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Speaker 2 (29:06):
Pace in the Wall Street Journal and unresponsive public is
undermining government economic data, not intentionally, but it's just Hey,
these are largely survey based results that we report on
on a monthly or quarterly basis in many cases, and
the survey response rates have been Here's what's interesting. The
(29:28):
initial month survey response rates are lower than they've been
at any point, but we are still collecting basically the
same level of response rates, just on a much delayed
schedule right now.
Speaker 3 (29:41):
Yep.
Speaker 2 (29:42):
And that's pretty much been the way things have trended
for the last five years.
Speaker 4 (29:46):
At this point, this should not be surprising at all.
I want to just let's rewind twenty years ago when
we found these data points to be a lot more reliable.
When your father needed a bunch of tools and some groceries,
he would drive to the local hardware store and then
the grocery store and pick up everything in his cart. Today,
(30:08):
I would guess that you chuck get half of those
items from Amazon delivered to you, and then subsequently, for
every individual order you get a survey request.
Speaker 3 (30:18):
Hey, what did you think of this purchase? You might
get three or four of them.
Speaker 4 (30:22):
Sure, you go book a flight and then you stay
at a hotel and rent a car for you.
Speaker 2 (30:26):
Tell us how we did.
Speaker 4 (30:27):
Please tell me how we did, how was the review,
how was your stay at the hotel that you stayed in,
every single thing that I ordered a salad for lunch,
I'm going to get a survey request.
Speaker 3 (30:42):
I'm not shocked. I haven't eaten it yet, but I'll
let you know.
Speaker 4 (30:47):
I'm not shocked that you know people are not responding
to these things. You have caller ID in a way
that you didn't previously and go talk to anybody by
the way that worked or works currently. In any sort
of business that requires people to pick up the phone
in order to do that business, well, nobody wants to do.
Speaker 3 (31:06):
For good reason, guys, I don't want to pick up
my phone.
Speaker 2 (31:08):
Let's be honest. When when someone called. When when the
phone rang thirty years ago, first of all, was in
your house because there were no cell phones, and you
knew that it was something legitimate. It might not be
someone who you liked like. It might be the telemarketer
calling at six pm right as you're sitting down to dinner,
(31:29):
might have been a politician asking for your vote, but
you knew that it was a real person in something legit.
The percentage of phone calls that I get now that
are scam versus legit. I'd say it's probably nine to
one the ratio I was going to put it in there. Now.
(31:49):
Part of this is just because I don't make many
phone calls.
Speaker 3 (31:53):
Yeah, it's all done via text.
Speaker 2 (31:54):
But the vast majority of calls that I get are
someone trying to scam me. A Hey, the irs is gonna,
you know, take your I don't know what, they're gonna
take your salad for lunch. And it's just like no
one picks up the phone or even on email. All
(32:15):
the unsolicited stuff that you get, how many of them
are like, not sure if this is a scam or not.
I'm just gonna delete it.
Speaker 4 (32:20):
And even if it's not a scam. Though, again I
keep going back to the example from thirty years ago,
you were not asked to review every product that you
put in your shopping cart. No, today you are. And
it's exhausting. And I don't really know how the government
improves upon this without just going and stop. You know,
(32:40):
there's a few things that I can think they could, like, hey,
we're just gonna take the data from actual employment sources
and use that to estimate it instead of doing these surveys.
But I can't really think of a different survey methodology
that's going to work better. Is texting people going to
work better? Is pushing it to social media going to
work better? And I don't think so. So I don't
(33:01):
really see a path for these statistics to get more accurate.
Speaker 2 (33:06):
You don't know if there's a national do not call list? Yeah,
I register for that doesn't work, doesn't do it first
of all, doesn't do anything.
Speaker 3 (33:12):
Nope.
Speaker 2 (33:13):
Okay, So now we can actually talk a little bit
about the real problem, which is that the telecom companies
have no incentive to crack down on any of this
and it basically leads to the proliferation of all of it. Yeah,
which gets me too. There should be a national do
not survey list? Yeah?
Speaker 3 (33:30):
Again, Is that gonna work any better?
Speaker 1 (33:31):
No?
Speaker 2 (33:32):
But I'm just saying I like the idea and concept.
Speaker 4 (33:34):
I mean I do too. But have you ever gotten
a legitimate survey from the US government?
Speaker 3 (33:39):
Because I haven't.
Speaker 2 (33:40):
No, Like, that's the other question. How do I get
on one of these lists? Like I'm one of the
six people that would actually respond. That'd be like, ooh,
the BLS reached out to me. Yes, I'm gonna tell
them if I'm employed. Like, I would get so excited
if I got a legit email record for a legit
survey from the BLS or like the Census Bureau.
Speaker 3 (34:00):
Yeah.
Speaker 4 (34:00):
The only survey requests that I get are for products
that I have purchased.
Speaker 3 (34:04):
It products or services that I have purchased.
Speaker 2 (34:07):
Right, Like, you give me a BLS survey, I'll be like, yes,
can you get me one for my neighbors too. We're
going to dedicate a segment to it on the Financial
Liks please, I'd love to. In any case, let's take
a quick break. When we come back, we'll do some
stack roulette.
Speaker 1 (34:23):
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Speaker 5 (34:56):
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Speaker 2 (35:31):
Mike, what do you got for stack Roulette?
Speaker 4 (35:32):
We've got this piece here, I don't even know who
this is from Financial Times, how to build a million
dollar future for your kids and it goes into these
inheritance strategies. But that's kind of reminded me of a
client conversation that I was happening just.
Speaker 3 (35:46):
The other day. It was with somebody who.
Speaker 4 (35:48):
Is a very high income earner, I would say, top
three percent in the nation in terms of income, and
they were talking about their finances they're spending, and it
was very much.
Speaker 3 (35:59):
A keeping up with the Joneses conversation, Like you know.
Speaker 4 (36:02):
Sure our friends that are of similar back similar backgrounds, Like,
you know, they're wearing this flashy jewelry and driving these
gorgeous cars, and I feel like, we don't do that stuff,
and yet I still don't quite feel sound in my retirement.
And I brought something up with them that hadn't even
crossed their mind, Like this was a person who you know,
generally put themselves through college and med school, had a
(36:25):
bunch of loans to pay off when they're done, And I.
Speaker 3 (36:28):
Just mentioned, like, did you consider the fact that.
Speaker 4 (36:30):
They might not have done it their own, Like these
people who are spending way more money than you seemingly
and I don't know, it's entirely possible that their financial
situations and actual wreck.
Speaker 2 (36:41):
Right you had some idea of what they look like
behind the curtain.
Speaker 4 (36:44):
It's also possible that their parents left them millions of
dollars that you're not aware of. Like, these are scenarios
that I don't feel like cross people's minds when they're
evaluating other people's finances. It's all, you know, what are
they doing right that I'm doing wrong? When in fact,
a lot of the time it is nothing like that.
And you really nobody likes talking about personal finances and
(37:07):
they I don't think they should. It doesn't make good
dinner conversation. But that keeping up with the Joneses mentality
is really dangerous because of what you don't know.
Speaker 2 (37:19):
Even more than that, the other thing that I always
come back to is, look, it doesn't matter what you do,
there's always someone with more money than you.
Speaker 3 (37:27):
Yeah, unless you are Elon Musk, there is always somebody
with more.
Speaker 2 (37:30):
There's there's always someone with more money than you.
Speaker 3 (37:32):
Yeah.
Speaker 2 (37:33):
And if you look at even just you know where
things are today in terms of like overall like income
percentiles and things like that, they're like over a million
households in the US with household incomes over seven hundred
thousand dollars a year. You're like a million households. Like
(37:55):
it's insane how much money there is out there. Like you,
you're just you're never gonna get.
Speaker 3 (38:00):
There, So don't compare.
Speaker 2 (38:02):
No, Like it's it's just not you. You're not gonna
get there. There's always gonna be someone with more money
than you. And so you got to run your own race.
Let's take a quick break for the entire rest of
the day. We'll see you tomorrow on the show.
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
registered investment advisor. All opinions expressed are solely those of
the hosts. Do not reflect the opinions of Armstrong Advisory
or anyone else. Investments can lose money. This program does
not offer any specific financial or investment advice. Please consult
your own financial, tax, and estate planning advisors before making
(00:20):
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Armstrong and Money Matters Radio do not compensate each other
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Exchange with Chuck Zada and Mike Armstrong, your exclusive look
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(00:42):
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heroes by visiting dav five K DOC Boston and making
a donation today. This is the Financial Exchange with Chuck
(01:05):
Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you here, and stock's kicking
off the week with a strong start. We've got the
Dow Jones Industrial average up about a quarter percent eighty
five points, s and P five hundreds and a half
percent about thirty three points, and the nasdak Can posite
up one hundred and sixty seven points or three quarters
of a percent. Tenure US Treasury continuing to see yields
(01:34):
falling down two point six basis points to four point
h three four percent. And then as we head over
to commodity markets, Oil West Text Center Media getting a
little bit of a bump up seventy six cents a
barrel to sixty three forty five. And we've got gold
today up another fifteen dollars an ounce to thirty seven
oh one and twenty cents. So gold back above thirty
(01:58):
seven hundred for only the second time now, and we'll
see if it ends up holding the previous time that
it was there, which was I believe last Tuesday. It
was up there for about a minute and a half
and then went back below, So we'll see if it
holds up better this time. But gold about ten dollars
away from another all time high. At this point, let's
(02:22):
talk a little bit about the news out of Tesla today.
Elon Musk announced will not announced. He went and filed
with the sec A form to allow him to buy
a billion dollars worth of Tesla's stock. And so this
has Tesla's stock rising by more than a billion dollars,
(02:42):
in fact, rising by about six percent right now, so
several tens of billions of dollars as a result of
Musk's show of support in the company.
Speaker 3 (02:53):
Remember a couple of weeks.
Speaker 4 (02:54):
Ago I asked if Tesla's or if Elon still has
the power to move the stock he does.
Speaker 2 (02:59):
This tails nicely, Quite honestly, I don't know what else
to say about this exactly, but this is on the
heels of Musk's proposed new pay package that could be
again like trillions of dollars, yes, just completely crazy pants numbers. Potentially,
you know, a trillion dollars if all of it ends
up being satisfied, which I think is unlikely, but hey,
(03:22):
shoot for the moon, right, So I.
Speaker 4 (03:24):
Think most thought that his original pay package with the
share targets that were looked at were thought that were
unlikely so.
Speaker 2 (03:32):
Yeah, and so, the chairff Tesla's board, Robin Denhelm, gave
an interview on Friday on Bloomberg and I'm going to,
you know, read the quote here. He's a generational leader.
There aren't any other people out there like Elon who
can actually lead the company over the next decade or so.
I happen to agree with her. Now, I don't agree
(03:53):
with Elon Musk on a lot of you know, what
he has done in the last couple of years, as
far as like splitting his time and you know, maybe
spreading himself too thin, and certainly anytime that you get
involved in politics it makes things challenging from a business
perspective these days. But I think that when you look
at it, there's no one other than Elon Musk who
(04:13):
can actually run that company, because without Elon, the stock
doesn't trade anywhere near where it does today. Do I
think that Elon is you know, critical to actually like
developing the technologies that they're going to No, like anytime
that you're a big company. He never really was, like
maybe he had, but I think sometimes some people think
(04:34):
that like he might be like central to it, like
he's you know, Einstein in this genius. Who's you know,
single handedly doing it? I don't think that's him. I
think what he is exceptional at is not delivering products
on time, which he's horrible at. But I think what
Elon is exceptional at is identifying the lane that Tesla
needs to travel in pun intended, and then identifying what
(04:57):
needs to be done in order to to clear that
path as well as possible for him. And that can
mean that there are sometimes like the early twenty tens,
where Elon says, yeah, I'm going to push for as muy,
you know, I'm gonna align myself politically in such a
way that I can get as many subsidies as possible
for my cars and solar panels and everything that I
(05:20):
want to develop. And then hey, now that I need,
you know, to get into robotics and AI and stuff
like that. Great, I can pivot and figure out how
to make that work for me for a regular From
a regulatory perspective as well. I think he is really
good at doing that.
Speaker 1 (05:35):
Yeah.
Speaker 4 (05:35):
I was gonna ask the follow up then, which is, okay,
so what lane is he clearing for Tesla right now?
Speaker 3 (05:40):
It seems to be all about robotics.
Speaker 2 (05:42):
I don't think he wants to be a car company
anymore because it's a bad business. Like not Tesla, but
the car industry is an incredibly tough, demanding, capital intensive
business that is hard to operate in the best of times.
And I think it served a role for Elon and
(06:03):
for Tesla. If we view Tesla now as just a
car company but trying to do all these different things,
I think it got them to the point where they
have the capital to be able to do some of
the other things they want to do now. But I
don't think Elon. I mean, you listen to everything over
the last couple of weeks about you know, the new
master planned version of this and that, and it's pretty
(06:24):
clear that he's viewing Tesla's cars as being secondary to
the future of Tesla as anything related to robotics and
artificial intelligence, right.
Speaker 3 (06:35):
Yeah, it does. Yeah, And that's.
Speaker 4 (06:37):
Been where I've been kind of scratching my head, is
what is going to be the big breakthrough on that
front and is it going to genuinely drive quote eighty
percent of the company's long term value.
Speaker 2 (06:51):
And here's the thing that's gonna be challenging for must
that's different from what he's done with Tesla to this point, Mike,
was there any anyone else in the world when Elon
was trying to develop, you know, mass market evs in
the mid twenty tens, Was anyone else there really as
focused on it as he was? The big automakers like
(07:13):
didn't really care. They're like, okay, like here's a hybrid
or two, Like not really, here's the Nissan leaf like great,
it goes ninety miles. No one was really trying to
compete there. Yeah, the key difference right now, everyone in
their grandmother is trying to build robots and artificial intelligence programs,
(07:35):
and this is gonna be one where they're gonna have
to compete in real time to see who's the best
of the best. And that's a fundamental difference from Tesla ware.
They had a huge head start on everyone. So if
they can innovate faster and produce better products, okay, sure,
like you know, there's that future, but they're gonna have
(07:58):
to prove it because it's a different competitive and environment
than the one in which they developed Tesla's core products
over the last ten years.
Speaker 3 (08:05):
Yeah, I don't know.
Speaker 4 (08:07):
I'm also just struggling to connect a few dots, like
they want to excel in robotics, and specifically they want
to seemingly excel in a consumer facing robot. I mean,
at least that's what they are marketing and putting out there,
the kind of humanoid type robot.
Speaker 2 (08:25):
Which, by the way, that's where everyone's focusing now.
Speaker 4 (08:28):
Yeah, I mean we've talked about I mean, everybody's seen
the videos from what's the Boston I think the Boston
Post Dynamic Boston Dynamics, and there in their type robotics.
Maybe they can do that again where they can produce
a product that is familiar like Tesla's cars were, but
better than everything else on the market. But it's it's
(08:48):
a kind of a new class of product that nobody
has any experience with, so it is very fundamentally different
from what Elon has done previously with Tesla.
Speaker 2 (08:56):
And I do happen to believe that this is an
area that people are not giving enough appreciation there as
far as where it can go in the next three
to five years. And I think it's just because it's
so new, and to be honest, we're a little bit
freaked out by the idea of like humanoid robots running
(09:17):
around and stuff. I get it. It's it's kind of
creepy and freaky and scary. But here's the case for
a company. Just as an example is, Hey, even if
that robot requires human intervention twenty percent of the time,
if eighty percent of the time it does exactly what
(09:39):
it's told, then I can have one person run a
fleet of four to five robots and get all the
productivity gains from doing that. It's not necessarily that you
need fewer workers overall, but like, think about just all
the stuff that we need to do in the world, man,
Just all this stuff that we need to do, and
(10:02):
all the stuff that, by the way, no one really
wants to do unless you pay them really well because
they're just hard jobs and they're pain and it's challenging.
This is the stuff where you can say, hey, you're
still going to have the job overseeing the robots, but
they're gonna be able to do more than we could
do on our own, and it's going to give you
(10:23):
that additional power. It's no different from Hey, when you
had to go and you know, put all the screws
into the house by hand, hammer all the nails in
by hand. Man, it took a lot longer to build
a house than with a nail gun and some power tools.
But we didn't say, well, we can't do that because
we'll lose jobs. No, we just said, hey, this will
(10:44):
help us build more houses. Yep, so will robots. It'll
require different skill sets and different ways of managing it.
And I do believe one of the big threats here
is hey, a lot of and I'm guilty of this too,
saying hey, like, think about all these jobs that you
can't outsource, like plumbers and electricians, and I think more
(11:07):
of those jobs are unfortunately gonna be threatened by robots.
Then we want to admit now. And so it's not
just the office worker is gonna get, you know, their
job threatened by large language models and things.
Speaker 4 (11:18):
Like that, not just the Amazon warehouse worker who's getting
all of us.
Speaker 2 (11:22):
Like, I'm telling you that there are different forms of
AI and robotics that are gonna come for all of
our jobs, and we're all gonna have to reckon with this,
and it's it's gonna be hard because I have no
idea what the path is to managing it, but it's
it's coming for us. And Tesla's gonna compete on that
playing field because I think they rightly see that this
(11:42):
is the next frontier. Can they win on that one?
I don't know, but they're gonna compete. And I do
completely agree that there's no one but Elon that can
run that company because more than any allow anyone of
more than any other executive I've ever seen, even Steve
Jobs and Warren Buffett, the alignment between the brand and
(12:06):
the person is just at a different level.
Speaker 3 (12:10):
Yeah, right or wrong, that is definitely true.
Speaker 2 (12:13):
Let's take a quick break. When we return, We've got
some trivia.
Speaker 1 (12:20):
The Financial Exchange is life on Series XM's Business Radio
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Speaker 5 (12:57):
All right, Tom, sure you're in the financial shame. Today
is Prince Harry's forty first birthday. As the younger son
of King Charles and Princess Diana, Harry is in the
line of succession. However, he will likely never take the
throne trivia question today, Where is Prince Harry in the
(13:18):
line of succession? Once again? Where is Prince Harry in
the line of succession? Be the third person today to
text us at six one seven three six two thirteen
eighty five with the correct answer you when a Financial
Exchange Show t shirt Once again, The third correct response
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(13:38):
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See complete contest rules at Financial Exchange Show dot com.
Speaker 2 (13:46):
Couple stats on the auto loan industry that just continue
to tell me that, man, we're not doing it right
when it comes to buying depreciating assets that are typically
either the most or second most expensive purchase that we
ever make in our lifetime.
Speaker 3 (14:03):
Yeah really, so.
Speaker 2 (14:05):
Here's the deal.
Speaker 3 (14:06):
Uh.
Speaker 2 (14:07):
Twenty six point six percent of trade ins towards new
car purchases in the second quarter had negative equity, meaning
they owed more than the car was worth, and specifically,
the average number was about sixty seven hundred dollars that
they owed relative to what the car was worth.
Speaker 4 (14:25):
That is a tremendous amount of negative equity. I'd like
to throw it out. That's a lot of money to
be underwater on your car and trading in. Not to
be underwater, right, but to be trading in. So and
here's how it happens.
Speaker 2 (14:39):
It's because people want to buy certain vehicles and they
can't afford them, and so they end up taking on
like seven or eight year auto loans.
Speaker 1 (14:48):
Uh.
Speaker 2 (14:48):
Seven year auto loans now are almost a quarter of
new loans that are out there. And here's here's what
I have to say about this. It's it's not necessarily
even don't buy the vehicle because look, here's the thing.
All of us do things that are not the best
financial decisions from time to time. I certainly do. I
(15:09):
do things where it's like, you know, if someone like
looked at my like my credit card was like you
spent what on what? I'd be like, Yeah, probably wasn't
you know, the best thing, But hey, like whatever.
Speaker 3 (15:19):
Interesting to see where this is going go on.
Speaker 2 (15:22):
Where I'm going on this is generally, if you're someone
who is taking out a seven year car loan and
then trading it in with a bunch of negative equity
usually means you're trading it in within the first two
to three years of that loan. If you know you're
someone who wants to have a new car every two
to three years, stop buying. You should be leasing, not buying.
Speaker 4 (15:41):
I gotta tell you if you are doing this, there
are I can think of the two scenarios in my
mind where this makes any sense at all, any sense
it all? Which ones your car is totaled and you
have no choice. Yeah, that's not happening a quarter of
the time. No, So, like there's your scenario number one,
my car got total I cannot drive it, or it's
so unreliable that I need a new mode of transportation
(16:04):
in order to continue working.
Speaker 2 (16:05):
Even there, Quite honestly, I don't know exactly how that
works between your auto loan and the insurance company, Like.
Speaker 4 (16:13):
Like, it's not technically not a trade in. Yeah, so
I don't think that actually fits this category. But that
was one of the circumstances I thought of, where like, Okay, yeah,
if your car is ruined, sure it can be underwater,
and I can understand totally get the other one.
Speaker 3 (16:25):
Would be I suppose if you're driving a sixty.
Speaker 4 (16:30):
Thousand dollars car and you finally have a come to
Jesus moment and you're like, yeah, I can really afford
it used Honda and I'm driving an Audi, and so
I am going to trade in my negative equity vehicle
and go buy a cheaper vehicle with a much smaller
payment and sure come out on top. Because of that,
even then, I've got a ton of questions. Every other
scenario out there is terrible person finance. If you need
(16:53):
a car that's new every two to three years.
Speaker 5 (16:56):
Tucker, you No, I just thought of another example. Just
a third kid. You need to upgrade and get a
bigger car, a third row. I know somebody had to
do that recently, and they had a previous car, I
think it was. It was a Wrangler and they only
had it for like a year and a half. Yeah,
and they had to get a bigger car because of
the third kid.
Speaker 4 (17:14):
Yeah, you know, that is another scenario that does fit
in there.
Speaker 3 (17:21):
And I guess I go back to by that.
Speaker 4 (17:23):
Yeah, I do too, I just because that's I want
to see more planning.
Speaker 2 (17:27):
It's a one time upgrade. Yeah, Yeah, and again like
when you say you want to see more planning, like, look,
we all have things that it's like, oh gee, I
wish I could have planned for that. Yeah, life happened.
Like what I'm saying, like, we all have times where
we don't make the best financial decision. But when twenty
six point six percent of trade ins have negative equity.
Speaker 4 (17:46):
It's not because all of them are being financially disciplined
by getting cheaper cars and suddenly had babies.
Speaker 3 (17:51):
That's not a right.
Speaker 2 (17:52):
Yeah, no, there's just not that many three family, three
kid households.
Speaker 4 (17:56):
That's not a quarter of households. Usually, what it is
is if you're a god enticed by that new commercial
for that brand new pickup that you just had to have,
I will feel so much.
Speaker 2 (18:11):
Man, Guys, I'm not gonna rip on the pickup owers.
It's it's not just I'm.
Speaker 4 (18:16):
Picking on them because it's the best selling vehicle out there,
and so that's where I'm honing in on.
Speaker 3 (18:23):
But you're right, it's it's everything else.
Speaker 2 (18:25):
If if you're someone who needs a new vehicle every
two to three years, and that's your thing, Like again,
we all have our thing, Yep, I go to a
lot of Boston Bruins hockey games immediately depreciating assets. Is
it the best financial decision? No, especially not this year
where they're gonna lose like seventy of their games. Probably okay, sneaky,
(18:51):
let's let's not go too far.
Speaker 4 (18:52):
So.
Speaker 2 (18:53):
In any case, we all have our things that we
spend money on that are not good financial decisions.
Speaker 4 (18:58):
But there are better ways to do it than right
tinuinely trading in underrep cars, like think about whether or
not a lease could make sense for you where hey,
your payment might actually be less and then you don't
owe a bunch of the end of three years and
you could just move into a new lease.
Speaker 2 (19:12):
Anyways, there are ways that you can structure these things
that are better.
Speaker 4 (19:17):
My signal would be that if you're underwater on the
car in the first place by sixty seven hundred dollars,
then going with the lease instead is still probably not
the financial decision.
Speaker 2 (19:26):
Maybe not, maybe not, but easy to judgement over here.
We just got to make better decisions on the cars.
Quick Break, Triva Answer and Wall Street Watching Next.
Speaker 1 (19:39):
Bringing the latest financial news straight to your radio. Every day,
It's the Financial Exchange on the Financial Exchange Radio Network
Time now for Wall Street watch a complete look at
what's moving markets so far today right here on the
Financial Exchange Radio network.
Speaker 5 (19:58):
And meeting week is here, and markets are currently in
mixed territory as Wall Street eagerly awaits the Central Bank's
likely twenty five basis point interest rate cut at the
conclusion of their meeting on Wednesday. Right now, the Dow
is dipping into negative territory. SMP five hundred is up
four tenths of one percent, or twenty eight points higher,
(20:21):
NASDAC up eight tenths of one percent or one hundred
and seventy seven points higher. Russell two thousand is up
about a half a percent, Tenure Treasure Reel down two
basis points at four point zero three six percent, and
crude oil up nearly one percent higher, trading just above
sixty three dollars a barrel. According to Treasury Secretary Scott Besson,
(20:41):
the US and China have reached a framework deal for
social media platform TikTok. Meanwhile, a new filing with the
SEC revealed Testa, the CEO, Elon Musk, purchased about one
billion dollars in the ev maker stock, marking his first
purchase of the stock in the open market. Since February
of twenty twenty test the stock is up over six percent.
Speaker 1 (21:02):
Now.
Speaker 5 (21:02):
Another major name and Nvidia, making headlines after China's antitrust
regulator said a preliminary investigation showed that chip maker violated
the country's anti monopoly law and would conduct a further investigation,
and Vidia stock is retreating about half a percent. Separately,
China said it had launch probes into certain US analog
chip imports Texas instruments down nearly three percent, while analog
(21:26):
devices in on semiconductor are seeing slightly or trading slightly lower.
Wall Street Journal reported that agriculture company Corteva is mulling
a breakup that would separate its seed and pesticide business
into two separate companies. That stock is down about three
percent and with its gains today now up about three percent,
(21:47):
Alphabet has officially surpassed three trillion dollars in market cap.
I'm Tucker Silva and that is Wall Street Watch. And
in the previous segment, we asked you the triviy question,
where is Prince Harry in the line of succession? That
would be fifth fifth on the list. Prince Harry's behind
Prince William and William's children, George, Charlotte and Lewis Bart
(22:11):
from Sutton mass Is our winners today, taking home a
Financial Exchange Show T shirt. Congrats to Bart and we
play trivia every day here in the Financial Exchange See
complete contest rules at Financial Exchange Show dot com.
Speaker 2 (22:24):
Mike, We're starting to see kind of an interesting set
of anecdotes popping up that I don't think we've really
heard in probably twelve thirteen years. It's the ones of, Hey,
I've got, you know, a college degree or an advanced degree,
you know, beyond that, and I can't figure out how
to get a job other than you know, hourly work
that I feel overqualified for. So there's this piece titled
(22:46):
more Americans are stuck with the jobs they can get,
not the ones they want. And the last time that
I feel like I really heard about this proliferating was
probably that post financial crisis period.
Speaker 3 (22:57):
Yeah.
Speaker 2 (22:57):
The part that makes this really interesting is that unemployment
right now is at four point three percent, and if
you look back at the post financial crisis period and
where the unemployment rate.
Speaker 3 (23:11):
Was, then wad peak twenty ten? Uh, yeah, you.
Speaker 2 (23:16):
Peaked in twenty ten at or just around ten percent,
so more than double the unemployment rate of now. But
it was high for a while. I mean, you didn't
get below six percent until you were out to like
twenty fourteen or so.
Speaker 3 (23:29):
So I guess what.
Speaker 2 (23:30):
I'm trying to reconcile is a few different things. We
know that the hiring picture for recent college grads is
not good because they now have a higher unemployment rate
than the rest of the country as a whole. Same
thing for recent high school grads. It's not a college
grad thing. It's just recent grads are struggling, So I
can reconcile that. But overall, the damage to the labor
(23:54):
market seems to be relatively contained, simply because combination of
demographics and deportations has reduced the available labor force. And
so if you if you had a job prior to
the last couple of years, you should generally be in
a pretty good spot because you're probably in the same
job that you've been in or have been able to
(24:15):
make a lateral move.
Speaker 4 (24:16):
So I guess what big difference is. It's not being
paired with the layoffs.
Speaker 2 (24:20):
No, So I guess what I'm trying to reconcile here is,
you know this this talks about, Hey, more Americans are
stuck with the jobs they can get, not the ones
they want. That still feels to me like it should
be a relatively small subset of the population, and yet
these stories are coming out. So I'm just trying to
make sense of this and what it means. I guess,
(24:41):
you know this. One of the people they interview in
here is a thirty six year old. Now granted she's
in you know it, which is you know, an area
that's being potentially changed by AI as well. But I
don't sit there and say, Wow, this must be a
really tough job market for mid thirties. It special, but
maybe it is. So I just feel like I don't
(25:03):
have a great handle on this labor market. I guess I.
Speaker 4 (25:07):
Do get the sense that it is a pretty tough.
When I talk to people that are of any age
demographic working in coding software development, it sales any of
those areas. Not all of them are unemployed. Don't get
me wrong. Sure a lot of them are either unemployed
or very nervous about their future employment.
Speaker 3 (25:30):
And I think a lot of that has to do
with a number of factors.
Speaker 4 (25:33):
But AI, especially the other area that I see it
and probably only because we operate in the Boston area.
Biotech anybody that's been working in the biotech space at
really any level, whether it's marketing, corporate consulting, there are
a lot of folks there who are saying, this is
(25:54):
not the market that was just two or three years ago.
But I'm with you, Chuck, I don't know what that
means for their broader economy. I don't think it's gonna
mean like you know, in twenty ten, it meant people
lose their houses, and it doesn't feel like that right now.
Speaker 3 (26:08):
Well, and I guess the.
Speaker 2 (26:09):
Other things are like when you look at a lot
of the broad based economic data out there, not even
from the federal government, talk about like what you see
from the banks and retailer is it. There's not really
anything out there that's pointing to like a broad based downturn.
Speaker 4 (26:25):
Now, the spending is still happening, but it's just the
uncertainty seems heavier, but everything else is still I guess
the answer is people seem dissatisfied but are generally making
ends meet.
Speaker 2 (26:40):
But this also then gets back to hey, so much
of the spending power is tied to the top twenty
percent of the workforce now that maybe it really is
just the vast majority of people are struggling, but they
don't make enough to have it, you know, impact the
broader spending distributions at this point.
Speaker 4 (26:58):
Yeah, it's either way, like it's not good, it's not
I keep going back to something chuck though.
Speaker 3 (27:06):
I do feel as.
Speaker 4 (27:08):
Though a lot of employers are really nervous about separating
from their existing employees and hiring new ones, and part
of that is a general concern about tariffs and the
economy part of it. I really genuinely believe that investors
right now are interested in efficiency. They want to see
efficiency at companies, and they want to see them be
able to point towards AI as the reason that they're
(27:30):
becoming more efficient, and that has to put pressure on
managers as to whether or not to hire. I really
think that that as an effect that is only kind
of attached to the AI story. I think the exuberance
around artificial intelligence is causing hiring managers to say, I
(27:51):
really got to put a cap on my spending here,
because we need to signal to investors that we are
benefiting from AI, whether or not we truly are.
Speaker 3 (27:58):
And so that could turn around.
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Speaker 2 (29:06):
Pace in the Wall Street Journal and unresponsive public is
undermining government economic data, not intentionally, but it's just Hey,
these are largely survey based results that we report on
on a monthly or quarterly basis in many cases, and
the survey response rates have been Here's what's interesting. The
(29:28):
initial month survey response rates are lower than they've been
at any point, but we are still collecting basically the
same level of response rates, just on a much delayed
schedule right now.
Speaker 3 (29:41):
Yep.
Speaker 2 (29:42):
And that's pretty much been the way things have trended
for the last five years.
Speaker 4 (29:46):
At this point, this should not be surprising at all.
I want to just let's rewind twenty years ago when
we found these data points to be a lot more reliable.
When your father needed a bunch of tools and some groceries,
he would drive to the local hardware store and then
the grocery store and pick up everything in his cart. Today,
(30:08):
I would guess that you chuck get half of those
items from Amazon delivered to you, and then subsequently, for
every individual order you get a survey request.
Speaker 3 (30:18):
Hey, what did you think of this purchase? You might
get three or four of them.
Speaker 4 (30:22):
Sure, you go book a flight and then you stay
at a hotel and rent a car for you.
Speaker 2 (30:26):
Tell us how we did.
Speaker 4 (30:27):
Please tell me how we did, how was the review,
how was your stay at the hotel that you stayed in,
every single thing that I ordered a salad for lunch,
I'm going to get a survey request.
Speaker 3 (30:42):
I'm not shocked. I haven't eaten it yet, but I'll
let you know.
Speaker 4 (30:47):
I'm not shocked that you know people are not responding
to these things. You have caller ID in a way
that you didn't previously and go talk to anybody by
the way that worked or works currently. In any sort
of business that requires people to pick up the phone
in order to do that business, well, nobody wants to do.
Speaker 3 (31:06):
For good reason, guys, I don't want to pick up
my phone.
Speaker 2 (31:08):
Let's be honest. When when someone called. When when the
phone rang thirty years ago, first of all, was in
your house because there were no cell phones, and you
knew that it was something legitimate. It might not be
someone who you liked like. It might be the telemarketer
calling at six pm right as you're sitting down to dinner,
(31:29):
might have been a politician asking for your vote, but
you knew that it was a real person in something legit.
The percentage of phone calls that I get now that
are scam versus legit. I'd say it's probably nine to
one the ratio I was going to put it in there. Now.
(31:49):
Part of this is just because I don't make many
phone calls.
Speaker 3 (31:53):
Yeah, it's all done via text.
Speaker 2 (31:54):
But the vast majority of calls that I get are
someone trying to scam me. A Hey, the irs is gonna,
you know, take your I don't know what, they're gonna
take your salad for lunch. And it's just like no
one picks up the phone or even on email. All
(32:15):
the unsolicited stuff that you get, how many of them
are like, not sure if this is a scam or not.
I'm just gonna delete it.
Speaker 4 (32:20):
And even if it's not a scam. Though, again I
keep going back to the example from thirty years ago,
you were not asked to review every product that you
put in your shopping cart. No, today you are. And
it's exhausting. And I don't really know how the government
improves upon this without just going and stop. You know,
(32:40):
there's a few things that I can think they could, like, hey,
we're just gonna take the data from actual employment sources
and use that to estimate it instead of doing these surveys.
But I can't really think of a different survey methodology
that's going to work better. Is texting people going to
work better? Is pushing it to social media going to
work better? And I don't think so. So I don't
(33:01):
really see a path for these statistics to get more accurate.
Speaker 2 (33:06):
You don't know if there's a national do not call list? Yeah,
I register for that doesn't work, doesn't do it first
of all, doesn't do anything.
Speaker 3 (33:12):
Nope.
Speaker 2 (33:13):
Okay, So now we can actually talk a little bit
about the real problem, which is that the telecom companies
have no incentive to crack down on any of this
and it basically leads to the proliferation of all of it. Yeah,
which gets me too. There should be a national do
not survey list? Yeah?
Speaker 3 (33:30):
Again, Is that gonna work any better?
Speaker 1 (33:31):
No?
Speaker 2 (33:32):
But I'm just saying I like the idea and concept.
Speaker 4 (33:34):
I mean I do too. But have you ever gotten
a legitimate survey from the US government?
Speaker 3 (33:39):
Because I haven't.
Speaker 2 (33:40):
No, Like, that's the other question. How do I get
on one of these lists? Like I'm one of the
six people that would actually respond. That'd be like, ooh,
the BLS reached out to me. Yes, I'm gonna tell
them if I'm employed. Like, I would get so excited
if I got a legit email record for a legit
survey from the BLS or like the Census Bureau.
Speaker 3 (34:00):
Yeah.
Speaker 4 (34:00):
The only survey requests that I get are for products
that I have purchased.
Speaker 3 (34:04):
It products or services that I have purchased.
Speaker 2 (34:07):
Right, Like, you give me a BLS survey, I'll be like, yes,
can you get me one for my neighbors too. We're
going to dedicate a segment to it on the Financial
Liks please, I'd love to. In any case, let's take
a quick break. When we come back, we'll do some
stack roulette.
Speaker 1 (34:23):
The Financial Exchange is now available every day from eleven
to noon non Serious XMS Business Radio Channel one thirty two.
Stay informed about the latest from Wall Street, fiscal policy,
and breaking business news every day. The Financial Exchange is
live on Serious XM's Business Radio Channel one thirty two.
Face is the Financial Exchange Radio Network. The Financial Exchange
(34:45):
streams live on YouTube. Subscribe to our page and stay
up to date on breaking business news all morning long.
Face is the Financial Exchange Radio Network.
Speaker 5 (34:56):
This year's DAV five K is less than three months away.
The slots aren't continuing to fill up fast, so if
you like to participate, now's the time to register. The
race is Saturday, November eighth at Castle Island and you
can visit dav fivek dot Boston to sign up or
join our team Team TFE. Your support helps fund free
(35:16):
rides to medical appointments for veterans in the nation's first
dav led housing initiative providing homes for single veterans and
veteran families. Go to dav five k dot Boston to
register today. That's dav five k dot Boston.
Speaker 2 (35:31):
Mike, what do you got for stack Roulette?
Speaker 4 (35:32):
We've got this piece here, I don't even know who
this is from Financial Times, how to build a million
dollar future for your kids and it goes into these
inheritance strategies. But that's kind of reminded me of a
client conversation that I was happening just.
Speaker 3 (35:46):
The other day. It was with somebody who.
Speaker 4 (35:48):
Is a very high income earner, I would say, top
three percent in the nation in terms of income, and
they were talking about their finances they're spending, and it
was very much.
Speaker 3 (35:59):
A keeping up with the Joneses conversation, Like you know.
Speaker 4 (36:02):
Sure our friends that are of similar back similar backgrounds, Like,
you know, they're wearing this flashy jewelry and driving these
gorgeous cars, and I feel like, we don't do that stuff,
and yet I still don't quite feel sound in my retirement.
And I brought something up with them that hadn't even
crossed their mind, Like this was a person who you know,
generally put themselves through college and med school, had a
(36:25):
bunch of loans to pay off when they're done, And I.
Speaker 3 (36:28):
Just mentioned, like, did you consider the fact that.
Speaker 4 (36:30):
They might not have done it their own, Like these
people who are spending way more money than you seemingly
and I don't know, it's entirely possible that their financial
situations and actual wreck.
Speaker 2 (36:41):
Right you had some idea of what they look like
behind the curtain.
Speaker 4 (36:44):
It's also possible that their parents left them millions of
dollars that you're not aware of. Like, these are scenarios
that I don't feel like cross people's minds when they're
evaluating other people's finances. It's all, you know, what are
they doing right that I'm doing wrong? When in fact,
a lot of the time it is nothing like that.
And you really nobody likes talking about personal finances and
(37:07):
they I don't think they should. It doesn't make good
dinner conversation. But that keeping up with the Joneses mentality
is really dangerous because of what you don't know.
Speaker 2 (37:19):
Even more than that, the other thing that I always
come back to is, look, it doesn't matter what you do,
there's always someone with more money than you.
Speaker 3 (37:27):
Yeah, unless you are Elon Musk, there is always somebody
with more.
Speaker 2 (37:30):
There's there's always someone with more money than you.
Speaker 3 (37:32):
Yeah.
Speaker 2 (37:33):
And if you look at even just you know where
things are today in terms of like overall like income
percentiles and things like that, they're like over a million
households in the US with household incomes over seven hundred
thousand dollars a year. You're like a million households. Like
(37:55):
it's insane how much money there is out there. Like you,
you're just you're never gonna get.
Speaker 3 (38:00):
There, So don't compare.
Speaker 2 (38:02):
No, Like it's it's just not you. You're not gonna
get there. There's always gonna be someone with more money
than you. And so you got to run your own race.
Let's take a quick break for the entire rest of
the day. We'll see you tomorrow on the show.
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