July 10, 2025 • 38 mins
Chuck Zodda and Marc Fandetti discuss inflation eating away at the labor market because gains might just be a mirage. Ted Rossman, Bankrate, joins the show to share the results of a recent side hustle survey. How Volkswagen's electric bus went from American flagship to flop. Tech platforms are struggling to indentify AI generated pictures.
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Episode Transcript
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Speaker 1 (00:00):
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(00:43):
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donation today. This is the Financial Exchange with Chuck Zada,
(01:06):
and Mark Vandetti.
Speaker 2 (01:11):
Chuck, Mark and Tucker with you. We got equity markets mixed.
As we kick things off here, the Dow is up
two hundred and twenty two points, about half a percent,
The SMP is up ten points, a little less than
a quarter percent, but the nasdak about a quarter percent
down with a forty three point loss thus far on
the day. Bond's a tenure, Treasury selling off a touch,
(01:31):
reversing some of yesterday's gains, up two basis points to
four point three six two percent. We've got oil down
a dollar thirty seven a barrel to sixty seven oh one,
and we've got gold up to twenty an ounce to
thirty three, twenty three and twenty cents. Right now, uh
top store for this hour comes from Barons and the
(01:53):
headline is one that I saw it, and I go, okay,
what's what's this all about? Says inflation is eating labor.
Market games are a mirage. Now, Mark, this comes on
the back of inflation right now. I checked just because
I wanted to make sure that I had all of
the data that I could. For the last twelve months,
(02:13):
CPI is running two three five core. CPI is two
seven seven, PCE is two three four, Core PCE is
two six eight, and PPI is two six to two,
with core PPI at three oh three. So help me
make sense of why this article states alleges infers that
(02:35):
inflation is eating the labor mine.
Speaker 3 (02:37):
I tell you, Chuck, I'm not gonna There are twenty
five paragraphs in this article, no charts, no data, So
I kind of my eyes gloss over about a third
of the way into it. I don't there's not much
of a Real wages have sputtered. We know that your
wage growth has picked up over the Let me just
state the facts as most I'm not a labor economist,
(02:59):
but these facts are pretty well known among anyone paying
attention to this. Like we have to real wages stat
I really, I mean inflation adjusted, which are a good
measure of what you can actually afford your standard of living.
Real wages stagnated in the first couple of years coming
out of the COVID expansion. That's why that, among other reasons,
is why people were really upset. Since then, real wage
(03:20):
growth has picked up, but overall it's been pretty sluggish
overall since twenty twenty. Real wage growth is measured by
the change in average hourly earnings is I think a
little over two percent. That's easy enough to verify. But
I think I'm in the ballpark there, which by historical
standards is terrible. This is kind of related to the
(03:41):
article on hiring. I think that we might be covering
employers over hired coming out of COVID bedtime. So one
way to adjust gradually your labor force is to let
real wages fall to hold your payroll costs and check.
I should say it doesn't really adjust the labor force. Sure,
(04:02):
it doesn't change how many people you have working for you,
but let real wages fall while your profits rise. That's
one way to compensate for your over hiring, if you will.
I'm probably overgeneralizing there, but that's what it seems. That's
that situation where we appear to be in. There's one
way to compensate for that is to let real wages fall.
That's probably partly what's happening here.
Speaker 2 (04:24):
And when we talk about where wage growth is right now,
I often try to look at a few different indicators,
just because they're all surveys of different kinds. None of
them are, you know, perfect, We don't actually know anything
for certain, so it's just okay, like tell me what's
you know, what's what's happening here? And when we look
(04:44):
at it a couple different ways that you can. You
can look at this. The first each jobs report, we
get an average weekly earnings number. The hourly one matters,
but if you're working, you know, a fewer hours each week,
that plays into it as well. So for the most
recent month, average weekly earnings for workers was twelve hundred
and forty one dollars and forty six cents. A year
ago it was twelve hundred dollars and fifty cents, So
(05:07):
that tells you based on that number, wage growth over
the last twelve months, if you believe the government jobs
report was three point four percent. The Atlanta Fed also
conducts a survey that they do. They follow specific individuals,
so it's a longitudinal survey, which I think is nice
because like you're interviewing the same people over and over,
so it's a different methodology, different group of people. And
(05:28):
they are showing four point two percent wage growth over
the last twelve months, so a little bit higher than
that three four but similar ballpark uh paychecks who is
a again payroll processor, so they're pulling this from their
own data, and this is specifically small business wage data.
Their twelve month hourly earnings growth is two point seventy
(05:52):
nine percent, So the range is like two eight to
four to two the middle ones three to four. So again,
we've wage growth over the last twelve months is probably
somewhere in the range of three and a quarter to
three and a half percent. Is that a fair statement? Mark, like,
just to kind of put an easy number.
Speaker 3 (06:11):
On it, h doesn't sound unreasonable. I can get you
a more rigorous answer. Go ahead, I'll look it up.
Speaker 2 (06:17):
You rigorize while I'm doing some other stuff. So we've
got wage growth running somewhere in the ballpark of three
and a quarter to three and a half percent. Now,
remember yeah, CPI and PP and PCE are running at
about two point three two point four over that time,
So that tells you that real wages over the last
year or so are up one percent. So I think
(06:41):
that what this is getting at here, what it's trying
to get at, is that hiring is slowing as companies
try to navigate potential higher input costs and things along
those lines. Because the way that companies typically try to
manage margins is through headcount. And the interesting thing so
far is that we're not really seeing anything as far
(07:02):
as higher layoffs. But I almost wonder are companies just
getting better at managing the number of people they need
to bring in so that they don't need to be
doing layoffs down the road. Is this kind of the
effect of that over hiring from twenty one to twenty two,
where companies now are more hesitant to hire and so
they don't need to be conducting as many layoffs. But
(07:22):
also the other piece is how many companies are pushing
these return to work mandates right now, and that's just
causing people to leave look for and look for remote work,
and so you don't need to see layoffs necessarily. It's
just people leaving voluntarily because they don't want to be
in person in white collar jobs. I throw a lot
out here, Yeah, I think I think.
Speaker 3 (07:41):
My answer is yes. I think. Well, the whole economy
has become less volatile really over the past seventy or
so years, as we've shifted from manufacturing to services. That
change is so conspicuous and was so substantial that economists
gave it a name called the Great moderation Everything. The
volatility of everything has declined since the end of the
(08:03):
Second World War, GDP fluctuations and employment fluctuations and consumption
fluctuations in inventory. You name it a macro economic so
to speak, fancy way of saying that the whole economy
a series variable over time, and it's volatility. It's the
amount by which it moves up and down around its
(08:24):
mean over time has come down. So yeah, I think
that it's what you're describing is consistent with better headcount
management that's accompanied better management of inventory and other things
over the course of the past however, many decades.
Speaker 2 (08:40):
The piece that I think is going to be interesting
to me is what happens with the overall job growth numbers,
because one of the things that I've been seeing a
bunch of different pieces on this over the last few
weeks now, job growth is clearly slowing at the moment.
But the interesting thing, and Mark, I'm curious if you've
any literature on this, we're also seeing signs that labor
(09:03):
force growth is slowing or in some cases there's some
theories that it may even be shrinking, partly because of
the crackdown on illegal immigrants, partly because of demographic trends
with more boomers retiring, and so what you're seeing now is, hey,
if you looked a couple of years ago, you needed
one hundred and fifty thousand to two hundred job two
(09:24):
hundred thousand jobs a month created in order to actually
it's little hype about one hundred twenty five to one
hundred and fifty thousand jobs created to break even and
not have unemployment rise. Some of the estimates that I've
been seeing now are that we might only need sixty
to ninety thousand jobs added a month in order to
not see unemployment rise because the demographic trends and you know,
(09:46):
deportations are having that kind of impact on the labor force.
Speaker 3 (09:51):
Your thoughts, Yeah, so you brought up a couple different
points there too, the number of jobs that you know,
it's just a little tricky because we're talking about two
different surveys here. You can just statistically try to answer
the question what rate of payroll growth historically? And historically
is a weasily termed because I could be looking at
twenty twenty to present, two thousand to present. It depends
(10:14):
has been what rate of change in the payroll survey
the new jobs that we report every month. One hundred
and forty seven thousand somewhere in that ballpark I think
it was last month. What rate of increase is consistent
with no change in the unemployment rate. That's a statistical question,
and that's easy to do. If I start in two thousand,
the answer is ninety three point two ninety three thousand
(10:37):
new jobs must be created to keep the unemployer rate
employment rate constant. If I start in twenty twenty, you
could tell I was doing this exercise last week with
Mike Armstrong because I have the code written and I
can run it quickly. Here the number since twenty twenty.
Let me do twenty twenty one instead, because twenty twenty
was Haywire. The numbers two hundred and sixty five. If
I and I'm gonna, I promise this will be the
(10:58):
last number I'll throw at you. If I do it.
Since twenty twenty four not a big sample. The number
is one hundred and thirty thousand. That's the number of
new jobs associated with no change in the unemployment rate.
The calculation you mentioned, Chuck's a little bit more sophisticated,
and I don't have a good answer for it, which is,
how does the reduction in labor force. Additions to labor
(11:19):
force that come from stricter enforcement of our immigration laws
affect that will surely it must push it down, right,
But that's an all lseqal answer, and I don't know
the best way to account for what else needs to
be held equal there.
Speaker 2 (11:33):
You're talking about the overall growth rate of the US economy.
Speaker 3 (11:36):
I'm talking with people who the way I just did it,
the estimation technique I just used is just fine assuming
no structural changes in the labor force. I'm very comfortable
with saying the statistical answer is one hundred and thirty
thousand jobs to keep unemployment okay, constant. But you're asking,
and Mike asked last week, but what if the labor
force is changing because of stricter enforcement of immigration laws,
(11:57):
or what if it's changing because of some demographic shift
more stay at home spouses entering the workforce or something.
It's difficult to adjust the simple calculation I did for
those more sophisticated questions.
Speaker 2 (12:11):
It also gets I think the question then of inflation
versus growth over kind of the next ten years. Where okay,
so if you have fewer people coming into the labor
force and a smaller population to sell to. But you
also still need people in certain jobs in order to
(12:31):
do certain things, you know, think about construction and so
on and so forth. Could you see a scenario where
wages need to go up in order to fill those
jobs because of a lack of workers, but there's less
stuff being built? And does that give a more stagflationary
tilt to the economy. I don't know, but it's just
something that rattles around in my head from time to time.
Speaker 3 (12:49):
I'm sorry to hear that.
Speaker 2 (12:50):
And now it's in your head too. So let's take
a quick break. When we return, we're gonna be joined
by Ted Rossman from bank Rate talking about their side
hustle survey. Right after this.
Speaker 1 (13:02):
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Speaker 2 (14:00):
Ted Rossman from Bank Right Now joins us to talk
a little bit about their recent side hustle survey they
conducted Ted how are you.
Speaker 5 (14:07):
I'm doing well, Thanks for having.
Speaker 2 (14:08):
Me absolutely Ted. When you look at the overall numbers,
what percentage of Americans have a side hustle today, and
how does that compare to the last several years.
Speaker 5 (14:18):
Twenty seven percent of US adults have a side hustle.
That's the lowest since twenty seventeen. It's actually down nine
percentage points from a year ago. It's down twelve percentage
points from two years ago. Really, what's happening here is
that fewer people are needing to side hustle as wage
growth catches up with inflation. We've had three years now
(14:39):
where wage growth is outpaced inflation. I know that things
still feel expensive, but we should also point out that
the job market's been solid. A lot of people feel
like they're catching up a bit. Side hustling is declining.
I don't think the trend is dead. I do think
that side hustling will pick up again in the future,
but at least for now, it's taking a bit of
(15:00):
a pause.
Speaker 2 (15:01):
What about Demographically, is there a certain age band or
certain type of person that tends to participate in side
hustles more than others?
Speaker 5 (15:10):
Young adults stand out. About a third of Gen z
ers and millennials have side hustles, versus a little under
a quarter of Gen X and boomers. Some of this
reflects changes in the workforce. It's not fifty years and
a gold watch and a pension anymore. A lot of
young people are side hustling out of necessity, but also
because they want to. There's this kind of passion project
(15:32):
idea that maybe you're trying something out. In my twenties,
I wrote part time for a fantasy sports website, and
I always thought maybe I'd want to go down that
career path I decided not to. But still, while it lasted,
it was fun. I made some extra money, had a
line on my resume if I chose to explore that further.
Speaker 2 (15:50):
I would urge.
Speaker 5 (15:51):
People to follow their passion when it comes to side hustling.
Maybe you love pets, or maybe you love photography, or
you know, whatever it is, there are a lot of
things you can do to make some extra money that
maybe freeze up room in your budget. Maybe it helps
you pay off debt or save or invest more. Side
hustling can be a very good thing.
Speaker 2 (16:11):
When you look at how much people are earning from
these side hustles, would you find it's.
Speaker 5 (16:16):
Not that much. To be honest, the median is two
hundred dollars a month. I mean, hey, not to sneeze
at an extra twenty four hundred dollars a year. That
could help with vacation expenses or breathing room in the budget,
or maybe that can pay off some credit card debt
or something like that, but it's certainly not enough to
live on. The average is a bit higher. The average
side hustler is making about nine hundred dollars a month.
(16:38):
That's driven up by some higher earners. Sometimes, though, a
side hustle means that you get back what you put
in in terms of a lot of these are more
hourly kind of things that if you're ride sharing or
doing food delivery, I mean, the more hours you put in,
the more you're going to get out of it. But
for many people it's kind of a smaller supplement. It's
(16:59):
not you know, enough to live on by any means.
Speaker 2 (17:02):
Fantastic, Ted, appreciate you joining us today. Thanks so much
for the time, of course, thank you all right.
Speaker 4 (17:08):
Sign for trivia here on the Financial Exchange, And on
this day. In nineteen seventy three, the Bahamas declared their
independence and adopted their own constitution. So trivia question today
which country did the Bahamas declare their independence from? Once again,
which country did the Bahamas declare their independence from? Be
the third person today to text us at six one
(17:31):
seven three six two thirteen eighty five with the correct answer,
and you win a Financial Exchange showed T shirt.
Speaker 2 (17:38):
Once again.
Speaker 4 (17:38):
The third correct response to text us to the number
six one seven three six two thirteen eighty five, we'll
win that T shirt. See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (17:49):
Mark, do you want to talk about housing or autos?
You pick? No, you pick? You love.
Speaker 3 (17:58):
You always have interesting things to say about housing. Let's
do housing first.
Speaker 2 (18:01):
I do like this housing piece, so it's in Bloomberg Opinion.
It's titled the Key to more profitable home Building Cheaper Land,
and I'm gonna read something here. Something has to give.
Builders need relief on the cost front to keep breaking
new ground if prices are falling. That relief is unlikely
to come from construction costs, which last year climbed to
sixty four point four percent of the final price, up
from fifty six percent twenty seventeen. Land is the other
(18:24):
big cost, at thirteen point seven percent in twenty twenty four.
With home builders set to exhaust the cheap blots they
acquired prior to the run up in land prices, they
can't afford to keep paying up for land in an
environment of sluggish demand and profitability. So what this is
talking about is that this year, the big thing that
we're seeing is home builders are scaling back their production
numbers because they can't sell the homes that they want
(18:46):
to at the prices they need to in order to
be profitable and construction costs they don't really have, you know,
much control over, just because it's gonna be basically set
by the market whenever you know they're buying. But if
people are willing to unload the land more cheaply, it
potentially gives them those extra percentage points in margin to
be able to build homes, which we still are not
(19:08):
building enough of so to this point we're not really
seeing any signs of that. But this gets at kind
of the problem that we're facing, which is, look, home
prices are starting to fall nationwide in a number of
markets because people can't afford them. How do you build
in a market where people can't afford the prices that
are already out there? Becomes pretty challenging. Quick break here.
(19:32):
When we come back, we got the trivia answer in
Wall Street Watch.
Speaker 1 (19:41):
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 4 (20:00):
REIFF News for Wall Street. After President Trump announced to
fifty percent teriff on Brazilian goods and also said the
fifty percent tariff on imported copper will take effect on
August first. Right now, mixed territory for markets. The Dow
is up by six tenths of one percent, or two
hundred and sixty five points. S and P five hundred
(20:21):
is up two tenths of one percent or twelve points
in the Nasdaq, retreating by one tenth of a percent.
Ten year Treasury yield is up two basis points at
four point three six percent. Crude oil is down nearly
two percent lower, trading just above sixty eight dollars a barrel,
and I skipped the Russell two thousand there that is
(20:42):
up by half a percent or twelve points higher. Big
news in packaged foods this morning after the Italian candy
maker behind Ferrero agreed to buy cereal giant w K
Kellogg for about three point one billion dollars. Wk Kellogg
is known for making childhood staples, including fruit loops and
frosted flakes that stock. Today, wk Kellogg is surging by
(21:04):
thirty percent. Meanwhile, the Defense Department will become the largest
shareholder in rare Earth minor MP materials after agreeing to
buy four hundred million dollars of its preferred stock shares
in MP Materials jumping over forty percent. Delta Airlines reported
earnings ahead of the open this morning that beat analysts expectations,
(21:24):
where it's quarterly profit was up sixty three percent from
a year ago. Delta also reinstated its twenty twenty five
profit outlook. Delta up by twelve percent, while other airlines
are seeing games as well, including United Airlines, also up
by over twelve percent. AMD up over four percent after
the chip maker was upgraded to a buy at HSBC,
(21:46):
where it's higher than expected pricing for its newest AI
chip could add significant upside. Two revenue and shares in
Canagara brands down by two percent after the maker of
slimgym and Swiss miss Hot chocolate posted disappointed quarterly results
in an annual outlook that missed expectations. I'm Tucker Silva
(22:06):
and that is Wall Street Watch, and I'm gonna get
my old trivia here. Left it on the desk to
the right. There, there we go. We got it. A
trivia question we asked was which country did the Bahamas
declare their independence from? That would be the UK. K
from Osterville is our winner today. Taking on the Financial
(22:27):
Exchange show t shirt and we play trivia every day
here on the Financial Exchange. See complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (22:36):
If you're not sure, isn't the answer to the best
answer to give always the UK? Give you, like, you know,
given how much they controlled at one point in history.
If you're not sure what country they rebelled against, it's
probably the.
Speaker 4 (22:50):
UK, right, probably, Yeah, that makes sense.
Speaker 2 (22:52):
That'd be my guess at least. Let's see. I want
to talk about this piece from the Wall Street Journal.
It's near and dear to my heart. Actually, I'm not
how Volkswagen's electric bus went from American flagship to flop.
So back when they announced this, which was Tucker, When
did they first put this out? Was it like twenty nineteen, twenty.
Speaker 4 (23:11):
Twenty, somewhere in that range, And you were extremely excited
for it?
Speaker 2 (23:15):
Well, because I love the overall design of it, Like
it's big, it's airy, it feels kind of surfy, even
though I don't surf. It's like okay, like I feel
like I could get into this, and I was really
excited about it.
Speaker 4 (23:26):
Yeah, and they spent like significant money in marketing, like
they had a Super Bowl ad I believe, right, they
did a ton on the Californians.
Speaker 2 (23:34):
Yeah, yeah, and then they released it. I think it
was either earlier this year, maybe late last year, I
can't remember exactly when. And I looked at it online
and I go, this is not great. It only gets
two hundred and fifty miles a charge in perfect conditions,
which for those of us who live, you know, in
(23:54):
the New England region where we broadcast our show out
of New england's not really known for great conditions all
the time. Twinter tends to get a little dodgy.
Speaker 4 (24:03):
Here and there, or summer apparently today.
Speaker 2 (24:05):
Yeah, summer. Occasionally you get you know, some flash floods
and things like that, like it's it's not really you know,
southern California. So there's that the range was bad. On
top of that, the thing was incredibly not was is
incredibly expensive for what you get. So if you wanted
(24:27):
to look right now, and I'm just I pulled up
the inventory page just to see, you know, what was
what was out there, and what you find is the
cheapest version that it offered right now. You know, like
if you're going through and kind of shorting in that direction,
you're out the door for around sixty thousand dollars and
you're very easily getting close to the mid seventies. Yeah, pass,
(24:50):
And it's just like it doesn't work for that car
for what you get. And the thing that's surprising to
me about this is Vita has some other electric vehicles
that are out there. They've got their ID four, which
again different vehicle, YadA, Yeah, like I understand that, but
that's priced in the mid forties generally, and yeah, like
(25:14):
still not you know, a cheap car by any means,
and you can get up into the high fifties if
you're going for like the top you know, heavy heavy
duty models, but you kind of figured this would be
an improvement on it. Instead, it's less range, twenty to
thirty percent more cost. And on top of that, this
is before you even get into the fact that, Okay,
they made the thing with a back seat that was
too big for the number of seat belts that they have,
(25:37):
and so they had to retrofit it and take space
out of the back seat in order to make it
work in the American market. And this not their fault.
They're making the thing in Germany, which means it's subject
to the twenty five percent auto tariff that the Trump
administration is imposed. But they've only sold like five hundred
of these things to this point, and I think it's because,
(26:00):
quite honestly, at that price point, it's not competitive with
the other evs that are out there, and it seems
just like a huge swing and a miss for them
because it's too expensive and doesn't have enough stuff smart.
Speaker 3 (26:13):
Yeah, they weren't expecting I'd drive a VW. I saw
one of these when I went in for service eighteen
months ago, twenty four months ago when they first came
on the lot, and the take of the sales guy
I was talking to is that they're not intended to
be a mass market vehicle offering, rather a sort of
a novelty thing to keep the brand conspicuous. That made
(26:36):
sense to I thought the price was appalling, and I
was disappointed in the appearance the rain.
Speaker 2 (26:41):
It doesn't look as good in person.
Speaker 3 (26:43):
It looks it looks, it looks, it looks kind of weird.
The are but some people, you know, VW has a
reputation for appealing to quirky people. Maybe I qualify. I
don't know, but I'm not that quirky. It's more of
a conversation piece was the consensus at the dealership that day.
Then it is something that's practical, and particularly the economy
(27:07):
is slowing, the idea that something like that could catch
on was probably a bit of wishful thinking. I was disappointed.
As a consumer.
Speaker 2 (27:16):
I was too. I thought this would be really interesting,
and instead I came away just really disappointed by the
whole thing. So it's kind of a sad one.
Speaker 3 (27:26):
Yeah, Like, not all publicity is good publicity when you're
selling a durable good Americans, particularly maybe here in New England,
where you see a lot of cars that have a
reputation for just being afford good value for money and reliable.
But there are a lot of BW drivers here proportionately
more than in other parts of the country, maybe with
the exception of California. Just just a big, big missfire.
Speaker 2 (27:50):
Really is, really is.
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Speaker 2 (28:59):
Mark. I want to talk a little bit about one
of these AI pieces because I think it's gonna be
something we're dealing with. Unfortunately for a while. It's it's
from the Wall Street Journal. It's titled was that amazing
video in your Feed? Real? Or AI? Tech platforms are
struggling to let you know, and look, this is gonna
be a real problem. And I think where we're heading
with this is people are just gonna trust the Internet
(29:20):
even less because up until this point it's kind of
been you know, picture it didn't happen, And now it's
possible that the pics didn't happen just because photorealistic AI
pictures and video are here, and I don't know. I mean,
I know why they're here, because look, if you have
seven billion people on the planet, like one of them
is gonna build the tool to do this. I think
(29:40):
it's kind of dumb just because we don't need it.
But that's neither here nor there. There's plenty of dumb
things that we don't need this one. I think it's
gonna further eroad trust and basically everything that we see online.
And I kind of wonder if the Internet's just gonna die,
Like it's kind of where I'm going, just because it
feels like we're getting to the point where you just
(30:01):
don't really know if you can trust anything online. And
I wonder if we're just gonna kind of end up
killing it as a means of communication and sharing stuff.
And instead it becomes, you know, something for more productive
uses like it was originally intended, just because I don't
know what to trust online at this point quite honestly.
Speaker 4 (30:22):
I mean, whenever I'm browsing social media, whether it's Instagram
or x, I'm always on high alert to look out
for fake information or fake videos. And even I who
going with there's awareness get fooled once in a while
by some once a week. Yeah, I'm like, oh, oh
(30:44):
this is this isn't real at all. This is AI.
So for somebody who has this high awareness for spotting
that I'll still get fooled by, it.
Speaker 3 (30:53):
Could be easy to fool that too.
Speaker 4 (30:55):
That very well could be a possible.
Speaker 2 (30:56):
No, I've don't tuck her a while. That's not one
of his attributes.
Speaker 4 (30:59):
Yeah. Also, are you seeing more and more commercials come
out with AI? Did you see the Liquid Death commercial?
Do you know Liquid death the water commercial mark? Have
you seen this liquid death thing?
Speaker 3 (31:11):
No? I haven't.
Speaker 4 (31:12):
It's a big can with the skull on it.
Speaker 2 (31:14):
It's literally just.
Speaker 3 (31:15):
What I'm aware of the product. I haven't. Are you
referring to some sort.
Speaker 4 (31:18):
Of hooks, No, it's it's a commercial completely generated by
AI and It could have been actors for all I know,
but it was amazing.
Speaker 2 (31:28):
It's yeah, it's it's really kind of a problem at
this point. And I think the big thing that I
struggle with is just a we're going to continue to
lose confidence that what we're seeing is real, and b
like knowing some people that work like just talking about
the video side things, Knowing some people that work in
the film industry not gonna be good for them.
Speaker 3 (31:51):
Yeah, well, these are these are growing pains. I think
every industry, every new technology gets contaminated at some point
by bad actors. People modify their behavior, They go only
to trusted sources, for example banks. We think of banks
as on par with like the government in terms of trustworthy.
(32:11):
I don't mean trustworthiness is and we trust politicians. I
just mean, for example, US treasuries are always viewed as
money good, that type of stuff. Most people aren't suspicious
of banks these days. But it took a while to
get to this point. It was the wild West for
a long time. You had to learn how to separate
the not just the week from the chaff, but those
people who were good actors from those who just wanted
(32:32):
to steal your money. At some point, we'll only trust
a few sources, is the point I'm trying to make
to wrap up here. We'll only trust a few sources
for information. Maybe they'll be associated with the major news networks.
I don't know who will earn that good housekeeping seal
of approval so as to earn our trust, and we'll
just filter out all the other stuff. Right now, we're
still in the wild West stage of social media.
Speaker 2 (32:55):
It's wild, it really is. Let's take a quick break here.
When we come back, we'll do little bit of stack rules.
Speaker 1 (33:02):
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Speaker 2 (33:41):
Mark what you got for me for stack Roulette.
Speaker 3 (33:44):
Chuck and tuck here for a few quick coffee facts.
Speaker 2 (33:47):
Coffee might be.
Speaker 3 (33:48):
Getting more mister coffee. Yeah right, I think that name's taken.
But us is the second. This comes from USDA. They've
got some awesome facts about all the commodities that we
can consume. I'll just give you a few that surprised
me a little bit. Second leading importer of coffee. I
might have guessed, I don't know, to Turkey. Their population
is small, and that's not a great example. But I
(34:09):
was a little surprised by that both. I'm not okay, okay.
Speaker 2 (34:13):
I always think that you can tell an awful lot
about a culture by the drugs they choose to use. Hell, yeah, yeah,
we are America is coffee in the morning, alcohol in
the evening. Now transitioning a little bit to cannabis. But
America likes to get up and move and then just
pass out.
Speaker 3 (34:32):
In twenty twenty three, about eighty percent of US roasted
coffee imports came from Latin America. That's five billion dollars
worth principally from and this is the point of sharing
this with you, principally from Brazil about forty percent, the
rest from Colombia and elsewhere. So the economic impact of
(34:54):
these tariffs chuck sort of like you were talking about
that at the end of the first hour. That took
me several minutes to absorb. If no other price is
changed and the price of coffee goes up food and
thus headline inflation will rise, if only temporarily.
Speaker 2 (35:12):
I got a fun one here. Have either of you
heard of Varda Space Industries?
Speaker 1 (35:18):
No?
Speaker 3 (35:18):
Yeah, just right now, there's some dude on Bloomberg talking
about it.
Speaker 2 (35:21):
How about that? Look at look at that. This is
you know, it's us in Bloomberg. So they are a
company that just raised about two hundred million dollars in
capital and their goal. What they do is they build
little space ships, like I don't know if they build
the rockets or just the capsules that go up on them,
but they build them for the purpose of making drugs
(35:45):
in space. So I looked at this at first, and
I'm like, okay, like is this just something that's kind
of dumb, Like what's the point of this? And the
big reason why they're trying to do this is because
in the zero gravity environment and in different pressure situations,
the medicines crystallize differently, which has the potential to allow
(36:09):
them to make drugs that they can't make with full
gravity on Earth, which I think is really cool. That
it's like, Hey, you've got these ideas that you think
would work for drugs, but we can't make them here
because of gravity. Great, let's make them in space. Wow,
which I think is kind of cool. I don't know
if it's actually going to work or not, but I
(36:29):
found the idea really interesting that gravity might be one
of the things that's keeping us from making life saving
medicines in certain situations.
Speaker 3 (36:38):
I assume they stay intact when you bring them back
into an environment with more intense gravity.
Speaker 2 (36:43):
I would imagine after the lapse. Look, I'm not a
chemical engineer. I'm not excited to spot, but from what
I know, you know, once you're in solid form, bonds
tend to be pretty stable unless there's an outside catalyst.
Is gravity is strong enough catalyst in order to uh?
Speaker 3 (37:01):
I don't think so, no do anything. So I wouldn't
think so.
Speaker 2 (37:04):
You never know.
Speaker 3 (37:05):
Now it would just be a bummer if you had
to go into space to take the medicine, is all
I'm saying. Hey, great, we've got a cure, a wonderful
thanks Doc. Bad news is you've got to fly one
of SpaceX's Ricketty rockets to get up there?
Speaker 2 (37:20):
Have you? Uh? Mark? Are you? Are you? Are you
pro space or anti space? For yourself?
Speaker 1 (37:26):
Like?
Speaker 3 (37:26):
Do I want to be shot? Do I want my
ass you shot into space? What I like to see?
Speaker 2 (37:29):
Would you, ever, while alive, want to go to space?
Speaker 3 (37:31):
If there was an urgent need tourism?
Speaker 2 (37:33):
Mark?
Speaker 3 (37:33):
Like, is there is there a business opportunity?
Speaker 2 (37:35):
Would you take the bezos blaster up into space?
Speaker 3 (37:38):
Wouldn't any curious person?
Speaker 2 (37:41):
Wait? Hold on? Is it? Hold on? And what?
Speaker 3 (37:44):
At what cost?
Speaker 2 (37:46):
Bag of chips?
Speaker 3 (37:48):
Yeah? Sure?
Speaker 2 (37:48):
Yeah? Five bucks and you get to go to space?
Speaker 3 (37:51):
Yeah? I want to get my affairs in order first.
Speaker 2 (37:53):
You're anti space?
Speaker 4 (37:54):
Yah, I'm good. I'm good. Yeah, I'll see it from
down here.
Speaker 2 (37:58):
You know what am I gonna do? Why?
Speaker 3 (38:00):
Tucker, there's no Wi Fi. You're afraid you're worried about
the risk of malfunction. I'm good on scheduled disassembly.
Speaker 2 (38:07):
Extream Netflix up there.
Speaker 3 (38:09):
I need to sit on that enough enough pot on
the moon?
Speaker 2 (38:13):
The hell? The bandwidth is week?
Speaker 3 (38:15):
I'm sorry, Tucker.
Speaker 2 (38:17):
All right, anyways, We're going to take a quick break
for the rest of the day and we will see
you tomorrow to finish up the week,
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
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(01:06):
and Mark Vandetti.
Speaker 2 (01:11):
Chuck, Mark and Tucker with you. We got equity markets mixed.
As we kick things off here, the Dow is up
two hundred and twenty two points, about half a percent,
The SMP is up ten points, a little less than
a quarter percent, but the nasdak about a quarter percent
down with a forty three point loss thus far on
the day. Bond's a tenure, Treasury selling off a touch,
(01:31):
reversing some of yesterday's gains, up two basis points to
four point three six two percent. We've got oil down
a dollar thirty seven a barrel to sixty seven oh one,
and we've got gold up to twenty an ounce to
thirty three, twenty three and twenty cents. Right now, uh
top store for this hour comes from Barons and the
(01:53):
headline is one that I saw it, and I go, okay,
what's what's this all about? Says inflation is eating labor.
Market games are a mirage. Now, Mark, this comes on
the back of inflation right now. I checked just because
I wanted to make sure that I had all of
the data that I could. For the last twelve months,
(02:13):
CPI is running two three five core. CPI is two
seven seven, PCE is two three four, Core PCE is
two six eight, and PPI is two six to two,
with core PPI at three oh three. So help me
make sense of why this article states alleges infers that
(02:35):
inflation is eating the labor mine.
Speaker 3 (02:37):
I tell you, Chuck, I'm not gonna There are twenty
five paragraphs in this article, no charts, no data, So
I kind of my eyes gloss over about a third
of the way into it. I don't there's not much
of a Real wages have sputtered. We know that your
wage growth has picked up over the Let me just
state the facts as most I'm not a labor economist,
(02:59):
but these facts are pretty well known among anyone paying
attention to this. Like we have to real wages stat
I really, I mean inflation adjusted, which are a good
measure of what you can actually afford your standard of living.
Real wages stagnated in the first couple of years coming
out of the COVID expansion. That's why that, among other reasons,
is why people were really upset. Since then, real wage
(03:20):
growth has picked up, but overall it's been pretty sluggish
overall since twenty twenty. Real wage growth is measured by
the change in average hourly earnings is I think a
little over two percent. That's easy enough to verify. But
I think I'm in the ballpark there, which by historical
standards is terrible. This is kind of related to the
(03:41):
article on hiring. I think that we might be covering
employers over hired coming out of COVID bedtime. So one
way to adjust gradually your labor force is to let
real wages fall to hold your payroll costs and check.
I should say it doesn't really adjust the labor force. Sure,
(04:02):
it doesn't change how many people you have working for you,
but let real wages fall while your profits rise. That's
one way to compensate for your over hiring, if you will.
I'm probably overgeneralizing there, but that's what it seems. That's
that situation where we appear to be in. There's one
way to compensate for that is to let real wages fall.
That's probably partly what's happening here.
Speaker 2 (04:24):
And when we talk about where wage growth is right now,
I often try to look at a few different indicators,
just because they're all surveys of different kinds. None of
them are, you know, perfect, We don't actually know anything
for certain, so it's just okay, like tell me what's
you know, what's what's happening here? And when we look
(04:44):
at it a couple different ways that you can. You
can look at this. The first each jobs report, we
get an average weekly earnings number. The hourly one matters,
but if you're working, you know, a fewer hours each week,
that plays into it as well. So for the most
recent month, average weekly earnings for workers was twelve hundred
and forty one dollars and forty six cents. A year
ago it was twelve hundred dollars and fifty cents, So
(05:07):
that tells you based on that number, wage growth over
the last twelve months, if you believe the government jobs
report was three point four percent. The Atlanta Fed also
conducts a survey that they do. They follow specific individuals,
so it's a longitudinal survey, which I think is nice
because like you're interviewing the same people over and over,
so it's a different methodology, different group of people. And
(05:28):
they are showing four point two percent wage growth over
the last twelve months, so a little bit higher than
that three four but similar ballpark uh paychecks who is
a again payroll processor, so they're pulling this from their
own data, and this is specifically small business wage data.
Their twelve month hourly earnings growth is two point seventy
(05:52):
nine percent, So the range is like two eight to
four to two the middle ones three to four. So again,
we've wage growth over the last twelve months is probably
somewhere in the range of three and a quarter to
three and a half percent. Is that a fair statement? Mark, like,
just to kind of put an easy number.
Speaker 3 (06:11):
On it, h doesn't sound unreasonable. I can get you
a more rigorous answer. Go ahead, I'll look it up.
Speaker 2 (06:17):
You rigorize while I'm doing some other stuff. So we've
got wage growth running somewhere in the ballpark of three
and a quarter to three and a half percent. Now,
remember yeah, CPI and PP and PCE are running at
about two point three two point four over that time,
So that tells you that real wages over the last
year or so are up one percent. So I think
(06:41):
that what this is getting at here, what it's trying
to get at, is that hiring is slowing as companies
try to navigate potential higher input costs and things along
those lines. Because the way that companies typically try to
manage margins is through headcount. And the interesting thing so
far is that we're not really seeing anything as far
(07:02):
as higher layoffs. But I almost wonder are companies just
getting better at managing the number of people they need
to bring in so that they don't need to be
doing layoffs down the road. Is this kind of the
effect of that over hiring from twenty one to twenty two,
where companies now are more hesitant to hire and so
they don't need to be conducting as many layoffs. But
(07:22):
also the other piece is how many companies are pushing
these return to work mandates right now, and that's just
causing people to leave look for and look for remote work,
and so you don't need to see layoffs necessarily. It's
just people leaving voluntarily because they don't want to be
in person in white collar jobs. I throw a lot
out here, Yeah, I think I think.
Speaker 3 (07:41):
My answer is yes. I think. Well, the whole economy
has become less volatile really over the past seventy or
so years, as we've shifted from manufacturing to services. That
change is so conspicuous and was so substantial that economists
gave it a name called the Great moderation Everything. The
volatility of everything has declined since the end of the
(08:03):
Second World War, GDP fluctuations and employment fluctuations and consumption
fluctuations in inventory. You name it a macro economic so
to speak, fancy way of saying that the whole economy
a series variable over time, and it's volatility. It's the
amount by which it moves up and down around its
(08:24):
mean over time has come down. So yeah, I think
that it's what you're describing is consistent with better headcount
management that's accompanied better management of inventory and other things
over the course of the past however, many decades.
Speaker 2 (08:40):
The piece that I think is going to be interesting
to me is what happens with the overall job growth numbers,
because one of the things that I've been seeing a
bunch of different pieces on this over the last few
weeks now, job growth is clearly slowing at the moment.
But the interesting thing, and Mark, I'm curious if you've
any literature on this, we're also seeing signs that labor
(09:03):
force growth is slowing or in some cases there's some
theories that it may even be shrinking, partly because of
the crackdown on illegal immigrants, partly because of demographic trends
with more boomers retiring, and so what you're seeing now is, hey,
if you looked a couple of years ago, you needed
one hundred and fifty thousand to two hundred job two
(09:24):
hundred thousand jobs a month created in order to actually
it's little hype about one hundred twenty five to one
hundred and fifty thousand jobs created to break even and
not have unemployment rise. Some of the estimates that I've
been seeing now are that we might only need sixty
to ninety thousand jobs added a month in order to
not see unemployment rise because the demographic trends and you know,
(09:46):
deportations are having that kind of impact on the labor force.
Speaker 3 (09:51):
Your thoughts, Yeah, so you brought up a couple different
points there too, the number of jobs that you know,
it's just a little tricky because we're talking about two
different surveys here. You can just statistically try to answer
the question what rate of payroll growth historically? And historically
is a weasily termed because I could be looking at
twenty twenty to present, two thousand to present. It depends
(10:14):
has been what rate of change in the payroll survey
the new jobs that we report every month. One hundred
and forty seven thousand somewhere in that ballpark I think
it was last month. What rate of increase is consistent
with no change in the unemployment rate. That's a statistical question,
and that's easy to do. If I start in two thousand,
the answer is ninety three point two ninety three thousand
(10:37):
new jobs must be created to keep the unemployer rate
employment rate constant. If I start in twenty twenty, you
could tell I was doing this exercise last week with
Mike Armstrong because I have the code written and I
can run it quickly. Here the number since twenty twenty.
Let me do twenty twenty one instead, because twenty twenty
was Haywire. The numbers two hundred and sixty five. If
I and I'm gonna, I promise this will be the
(10:58):
last number I'll throw at you. If I do it.
Since twenty twenty four not a big sample. The number
is one hundred and thirty thousand. That's the number of
new jobs associated with no change in the unemployment rate.
The calculation you mentioned, Chuck's a little bit more sophisticated,
and I don't have a good answer for it, which is,
how does the reduction in labor force. Additions to labor
(11:19):
force that come from stricter enforcement of our immigration laws
affect that will surely it must push it down, right,
But that's an all lseqal answer, and I don't know
the best way to account for what else needs to
be held equal there.
Speaker 2 (11:33):
You're talking about the overall growth rate of the US economy.
Speaker 3 (11:36):
I'm talking with people who the way I just did it,
the estimation technique I just used is just fine assuming
no structural changes in the labor force. I'm very comfortable
with saying the statistical answer is one hundred and thirty
thousand jobs to keep unemployment okay, constant. But you're asking,
and Mike asked last week, but what if the labor
force is changing because of stricter enforcement of immigration laws,
(11:57):
or what if it's changing because of some demographic shift
more stay at home spouses entering the workforce or something.
It's difficult to adjust the simple calculation I did for
those more sophisticated questions.
Speaker 2 (12:11):
It also gets I think the question then of inflation
versus growth over kind of the next ten years. Where okay,
so if you have fewer people coming into the labor
force and a smaller population to sell to. But you
also still need people in certain jobs in order to
(12:31):
do certain things, you know, think about construction and so
on and so forth. Could you see a scenario where
wages need to go up in order to fill those
jobs because of a lack of workers, but there's less
stuff being built? And does that give a more stagflationary
tilt to the economy. I don't know, but it's just
something that rattles around in my head from time to time.
Speaker 3 (12:49):
I'm sorry to hear that.
Speaker 2 (12:50):
And now it's in your head too. So let's take
a quick break. When we return, we're gonna be joined
by Ted Rossman from bank Rate talking about their side
hustle survey. Right after this.
Speaker 1 (13:02):
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Speaker 2 (14:00):
Ted Rossman from Bank Right Now joins us to talk
a little bit about their recent side hustle survey they
conducted Ted how are you.
Speaker 5 (14:07):
I'm doing well, Thanks for having.
Speaker 2 (14:08):
Me absolutely Ted. When you look at the overall numbers,
what percentage of Americans have a side hustle today, and
how does that compare to the last several years.
Speaker 5 (14:18):
Twenty seven percent of US adults have a side hustle.
That's the lowest since twenty seventeen. It's actually down nine
percentage points from a year ago. It's down twelve percentage
points from two years ago. Really, what's happening here is
that fewer people are needing to side hustle as wage
growth catches up with inflation. We've had three years now
(14:39):
where wage growth is outpaced inflation. I know that things
still feel expensive, but we should also point out that
the job market's been solid. A lot of people feel
like they're catching up a bit. Side hustling is declining.
I don't think the trend is dead. I do think
that side hustling will pick up again in the future,
but at least for now, it's taking a bit of
(15:00):
a pause.
Speaker 2 (15:01):
What about Demographically, is there a certain age band or
certain type of person that tends to participate in side
hustles more than others?
Speaker 5 (15:10):
Young adults stand out. About a third of Gen z
ers and millennials have side hustles, versus a little under
a quarter of Gen X and boomers. Some of this
reflects changes in the workforce. It's not fifty years and
a gold watch and a pension anymore. A lot of
young people are side hustling out of necessity, but also
because they want to. There's this kind of passion project
(15:32):
idea that maybe you're trying something out. In my twenties,
I wrote part time for a fantasy sports website, and
I always thought maybe I'd want to go down that
career path I decided not to. But still, while it lasted,
it was fun. I made some extra money, had a
line on my resume if I chose to explore that further.
Speaker 2 (15:50):
I would urge.
Speaker 5 (15:51):
People to follow their passion when it comes to side hustling.
Maybe you love pets, or maybe you love photography, or
you know, whatever it is, there are a lot of
things you can do to make some extra money that
maybe freeze up room in your budget. Maybe it helps
you pay off debt or save or invest more. Side
hustling can be a very good thing.
Speaker 2 (16:11):
When you look at how much people are earning from
these side hustles, would you find it's.
Speaker 5 (16:16):
Not that much. To be honest, the median is two
hundred dollars a month. I mean, hey, not to sneeze
at an extra twenty four hundred dollars a year. That
could help with vacation expenses or breathing room in the budget,
or maybe that can pay off some credit card debt
or something like that, but it's certainly not enough to
live on. The average is a bit higher. The average
side hustler is making about nine hundred dollars a month.
(16:38):
That's driven up by some higher earners. Sometimes, though, a
side hustle means that you get back what you put
in in terms of a lot of these are more
hourly kind of things that if you're ride sharing or
doing food delivery, I mean, the more hours you put in,
the more you're going to get out of it. But
for many people it's kind of a smaller supplement. It's
(16:59):
not you know, enough to live on by any means.
Speaker 2 (17:02):
Fantastic, Ted, appreciate you joining us today. Thanks so much
for the time, of course, thank you all right.
Speaker 4 (17:08):
Sign for trivia here on the Financial Exchange, And on
this day. In nineteen seventy three, the Bahamas declared their
independence and adopted their own constitution. So trivia question today
which country did the Bahamas declare their independence from? Once again,
which country did the Bahamas declare their independence from? Be
the third person today to text us at six one
(17:31):
seven three six two thirteen eighty five with the correct answer,
and you win a Financial Exchange showed T shirt.
Speaker 2 (17:38):
Once again.
Speaker 4 (17:38):
The third correct response to text us to the number
six one seven three six two thirteen eighty five, we'll
win that T shirt. See complete contest rules at Financial
Exchange Show dot com.
Speaker 2 (17:49):
Mark, do you want to talk about housing or autos?
You pick? No, you pick? You love.
Speaker 3 (17:58):
You always have interesting things to say about housing. Let's
do housing first.
Speaker 2 (18:01):
I do like this housing piece, so it's in Bloomberg Opinion.
It's titled the Key to more profitable home Building Cheaper Land,
and I'm gonna read something here. Something has to give.
Builders need relief on the cost front to keep breaking
new ground if prices are falling. That relief is unlikely
to come from construction costs, which last year climbed to
sixty four point four percent of the final price, up
from fifty six percent twenty seventeen. Land is the other
(18:24):
big cost, at thirteen point seven percent in twenty twenty four.
With home builders set to exhaust the cheap blots they
acquired prior to the run up in land prices, they
can't afford to keep paying up for land in an
environment of sluggish demand and profitability. So what this is
talking about is that this year, the big thing that
we're seeing is home builders are scaling back their production
numbers because they can't sell the homes that they want
(18:46):
to at the prices they need to in order to
be profitable and construction costs they don't really have, you know,
much control over, just because it's gonna be basically set
by the market whenever you know they're buying. But if
people are willing to unload the land more cheaply, it
potentially gives them those extra percentage points in margin to
be able to build homes, which we still are not
(19:08):
building enough of so to this point we're not really
seeing any signs of that. But this gets at kind
of the problem that we're facing, which is, look, home
prices are starting to fall nationwide in a number of
markets because people can't afford them. How do you build
in a market where people can't afford the prices that
are already out there? Becomes pretty challenging. Quick break here.
(19:32):
When we come back, we got the trivia answer in
Wall Street Watch.
Speaker 1 (19:41):
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 4 (20:00):
REIFF News for Wall Street. After President Trump announced to
fifty percent teriff on Brazilian goods and also said the
fifty percent tariff on imported copper will take effect on
August first. Right now, mixed territory for markets. The Dow
is up by six tenths of one percent, or two
hundred and sixty five points. S and P five hundred
(20:21):
is up two tenths of one percent or twelve points
in the Nasdaq, retreating by one tenth of a percent.
Ten year Treasury yield is up two basis points at
four point three six percent. Crude oil is down nearly
two percent lower, trading just above sixty eight dollars a barrel,
and I skipped the Russell two thousand there that is
(20:42):
up by half a percent or twelve points higher. Big
news in packaged foods this morning after the Italian candy
maker behind Ferrero agreed to buy cereal giant w K
Kellogg for about three point one billion dollars. Wk Kellogg
is known for making childhood staples, including fruit loops and
frosted flakes that stock. Today, wk Kellogg is surging by
(21:04):
thirty percent. Meanwhile, the Defense Department will become the largest
shareholder in rare Earth minor MP materials after agreeing to
buy four hundred million dollars of its preferred stock shares
in MP Materials jumping over forty percent. Delta Airlines reported
earnings ahead of the open this morning that beat analysts expectations,
(21:24):
where it's quarterly profit was up sixty three percent from
a year ago. Delta also reinstated its twenty twenty five
profit outlook. Delta up by twelve percent, while other airlines
are seeing games as well, including United Airlines, also up
by over twelve percent. AMD up over four percent after
the chip maker was upgraded to a buy at HSBC,
(21:46):
where it's higher than expected pricing for its newest AI
chip could add significant upside. Two revenue and shares in
Canagara brands down by two percent after the maker of
slimgym and Swiss miss Hot chocolate posted disappointed quarterly results
in an annual outlook that missed expectations. I'm Tucker Silva
(22:06):
and that is Wall Street Watch, and I'm gonna get
my old trivia here. Left it on the desk to
the right. There, there we go. We got it. A
trivia question we asked was which country did the Bahamas
declare their independence from? That would be the UK. K
from Osterville is our winner today. Taking on the Financial
(22:27):
Exchange show t shirt and we play trivia every day
here on the Financial Exchange. See complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (22:36):
If you're not sure, isn't the answer to the best
answer to give always the UK? Give you, like, you know,
given how much they controlled at one point in history.
If you're not sure what country they rebelled against, it's
probably the.
Speaker 4 (22:50):
UK, right, probably, Yeah, that makes sense.
Speaker 2 (22:52):
That'd be my guess at least. Let's see. I want
to talk about this piece from the Wall Street Journal.
It's near and dear to my heart. Actually, I'm not
how Volkswagen's electric bus went from American flagship to flop.
So back when they announced this, which was Tucker, When
did they first put this out? Was it like twenty nineteen, twenty.
Speaker 4 (23:11):
Twenty, somewhere in that range, And you were extremely excited
for it?
Speaker 2 (23:15):
Well, because I love the overall design of it, Like
it's big, it's airy, it feels kind of surfy, even
though I don't surf. It's like okay, like I feel
like I could get into this, and I was really
excited about it.
Speaker 4 (23:26):
Yeah, and they spent like significant money in marketing, like
they had a Super Bowl ad I believe, right, they
did a ton on the Californians.
Speaker 2 (23:34):
Yeah, yeah, and then they released it. I think it
was either earlier this year, maybe late last year, I
can't remember exactly when. And I looked at it online
and I go, this is not great. It only gets
two hundred and fifty miles a charge in perfect conditions,
which for those of us who live, you know, in
(23:54):
the New England region where we broadcast our show out
of New england's not really known for great conditions all
the time. Twinter tends to get a little dodgy.
Speaker 4 (24:03):
Here and there, or summer apparently today.
Speaker 2 (24:05):
Yeah, summer. Occasionally you get you know, some flash floods
and things like that, like it's it's not really you know,
southern California. So there's that the range was bad. On
top of that, the thing was incredibly not was is
incredibly expensive for what you get. So if you wanted
(24:27):
to look right now, and I'm just I pulled up
the inventory page just to see, you know, what was
what was out there, and what you find is the
cheapest version that it offered right now. You know, like
if you're going through and kind of shorting in that direction,
you're out the door for around sixty thousand dollars and
you're very easily getting close to the mid seventies. Yeah, pass,
(24:50):
And it's just like it doesn't work for that car
for what you get. And the thing that's surprising to
me about this is Vita has some other electric vehicles
that are out there. They've got their ID four, which
again different vehicle, YadA, Yeah, like I understand that, but
that's priced in the mid forties generally, and yeah, like
(25:14):
still not you know, a cheap car by any means,
and you can get up into the high fifties if
you're going for like the top you know, heavy heavy
duty models, but you kind of figured this would be
an improvement on it. Instead, it's less range, twenty to
thirty percent more cost. And on top of that, this
is before you even get into the fact that, Okay,
they made the thing with a back seat that was
too big for the number of seat belts that they have,
(25:37):
and so they had to retrofit it and take space
out of the back seat in order to make it
work in the American market. And this not their fault.
They're making the thing in Germany, which means it's subject
to the twenty five percent auto tariff that the Trump
administration is imposed. But they've only sold like five hundred
of these things to this point, and I think it's because,
(26:00):
quite honestly, at that price point, it's not competitive with
the other evs that are out there, and it seems
just like a huge swing and a miss for them
because it's too expensive and doesn't have enough stuff smart.
Speaker 3 (26:13):
Yeah, they weren't expecting I'd drive a VW. I saw
one of these when I went in for service eighteen
months ago, twenty four months ago when they first came
on the lot, and the take of the sales guy
I was talking to is that they're not intended to
be a mass market vehicle offering, rather a sort of
a novelty thing to keep the brand conspicuous. That made
(26:36):
sense to I thought the price was appalling, and I
was disappointed in the appearance the rain.
Speaker 2 (26:41):
It doesn't look as good in person.
Speaker 3 (26:43):
It looks it looks, it looks, it looks kind of weird.
The are but some people, you know, VW has a
reputation for appealing to quirky people. Maybe I qualify. I
don't know, but I'm not that quirky. It's more of
a conversation piece was the consensus at the dealership that day.
Then it is something that's practical, and particularly the economy
(27:07):
is slowing, the idea that something like that could catch
on was probably a bit of wishful thinking. I was disappointed.
As a consumer.
Speaker 2 (27:16):
I was too. I thought this would be really interesting,
and instead I came away just really disappointed by the
whole thing. So it's kind of a sad one.
Speaker 3 (27:26):
Yeah, Like, not all publicity is good publicity when you're
selling a durable good Americans, particularly maybe here in New England,
where you see a lot of cars that have a
reputation for just being afford good value for money and reliable.
But there are a lot of BW drivers here proportionately
more than in other parts of the country, maybe with
the exception of California. Just just a big, big missfire.
Speaker 2 (27:50):
Really is, really is.
Speaker 4 (27:51):
Changes to Medicaid occur almost every year, and if you're
not informed, your assets could be at risk, especially if
you or your spouse need nursing home care.
Speaker 2 (28:00):
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Speaker 4 (28:01):
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(28:42):
or you can request it from their website Legal exchange
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Speaker 1 (28:47):
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (28:59):
Mark. I want to talk a little bit about one
of these AI pieces because I think it's gonna be
something we're dealing with. Unfortunately for a while. It's it's
from the Wall Street Journal. It's titled was that amazing
video in your Feed? Real? Or AI? Tech platforms are
struggling to let you know, and look, this is gonna
be a real problem. And I think where we're heading
with this is people are just gonna trust the Internet
(29:20):
even less because up until this point it's kind of
been you know, picture it didn't happen, And now it's
possible that the pics didn't happen just because photorealistic AI
pictures and video are here, and I don't know. I mean,
I know why they're here, because look, if you have
seven billion people on the planet, like one of them
is gonna build the tool to do this. I think
(29:40):
it's kind of dumb just because we don't need it.
But that's neither here nor there. There's plenty of dumb
things that we don't need this one. I think it's
gonna further eroad trust and basically everything that we see online.
And I kind of wonder if the Internet's just gonna die,
Like it's kind of where I'm going, just because it
feels like we're getting to the point where you just
(30:01):
don't really know if you can trust anything online. And
I wonder if we're just gonna kind of end up
killing it as a means of communication and sharing stuff.
And instead it becomes, you know, something for more productive
uses like it was originally intended, just because I don't
know what to trust online at this point quite honestly.
Speaker 4 (30:22):
I mean, whenever I'm browsing social media, whether it's Instagram
or x, I'm always on high alert to look out
for fake information or fake videos. And even I who
going with there's awareness get fooled once in a while
by some once a week. Yeah, I'm like, oh, oh
(30:44):
this is this isn't real at all. This is AI.
So for somebody who has this high awareness for spotting
that I'll still get fooled by, it.
Speaker 3 (30:53):
Could be easy to fool that too.
Speaker 4 (30:55):
That very well could be a possible.
Speaker 2 (30:56):
No, I've don't tuck her a while. That's not one
of his attributes.
Speaker 4 (30:59):
Yeah. Also, are you seeing more and more commercials come
out with AI? Did you see the Liquid Death commercial?
Do you know Liquid death the water commercial mark? Have
you seen this liquid death thing?
Speaker 3 (31:11):
No? I haven't.
Speaker 4 (31:12):
It's a big can with the skull on it.
Speaker 2 (31:14):
It's literally just.
Speaker 3 (31:15):
What I'm aware of the product. I haven't. Are you
referring to some sort.
Speaker 4 (31:18):
Of hooks, No, it's it's a commercial completely generated by
AI and It could have been actors for all I know,
but it was amazing.
Speaker 2 (31:28):
It's yeah, it's it's really kind of a problem at
this point. And I think the big thing that I
struggle with is just a we're going to continue to
lose confidence that what we're seeing is real, and b
like knowing some people that work like just talking about
the video side things, Knowing some people that work in
the film industry not gonna be good for them.
Speaker 3 (31:51):
Yeah, well, these are these are growing pains. I think
every industry, every new technology gets contaminated at some point
by bad actors. People modify their behavior, They go only
to trusted sources, for example banks. We think of banks
as on par with like the government in terms of trustworthy.
(32:11):
I don't mean trustworthiness is and we trust politicians. I
just mean, for example, US treasuries are always viewed as
money good, that type of stuff. Most people aren't suspicious
of banks these days. But it took a while to
get to this point. It was the wild West for
a long time. You had to learn how to separate
the not just the week from the chaff, but those
people who were good actors from those who just wanted
(32:32):
to steal your money. At some point, we'll only trust
a few sources, is the point I'm trying to make
to wrap up here. We'll only trust a few sources
for information. Maybe they'll be associated with the major news networks.
I don't know who will earn that good housekeeping seal
of approval so as to earn our trust, and we'll
just filter out all the other stuff. Right now, we're
still in the wild West stage of social media.
Speaker 2 (32:55):
It's wild, it really is. Let's take a quick break here.
When we come back, we'll do little bit of stack rules.
Speaker 1 (33:02):
The Financial Exchange is now available every day from eleven
to noon non Serious XM's 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
life on Serious XM's Business Radio Channel one thirty two.
This is the Financial Exchange Radio Network. Find daily interviews
(33:24):
and full shows of the Financial Exchange on our YouTube page.
Subscribe to our page and get caught up on anything
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Exchange Radio Network.
Speaker 2 (33:41):
Mark what you got for me for stack Roulette.
Speaker 3 (33:44):
Chuck and tuck here for a few quick coffee facts.
Speaker 2 (33:47):
Coffee might be.
Speaker 3 (33:48):
Getting more mister coffee. Yeah right, I think that name's taken.
But us is the second. This comes from USDA. They've
got some awesome facts about all the commodities that we
can consume. I'll just give you a few that surprised
me a little bit. Second leading importer of coffee. I
might have guessed, I don't know, to Turkey. Their population
is small, and that's not a great example. But I
(34:09):
was a little surprised by that both. I'm not okay, okay.
Speaker 2 (34:13):
I always think that you can tell an awful lot
about a culture by the drugs they choose to use. Hell, yeah, yeah,
we are America is coffee in the morning, alcohol in
the evening. Now transitioning a little bit to cannabis. But
America likes to get up and move and then just
pass out.
Speaker 3 (34:32):
In twenty twenty three, about eighty percent of US roasted
coffee imports came from Latin America. That's five billion dollars
worth principally from and this is the point of sharing
this with you, principally from Brazil about forty percent, the
rest from Colombia and elsewhere. So the economic impact of
(34:54):
these tariffs chuck sort of like you were talking about
that at the end of the first hour. That took
me several minutes to absorb. If no other price is
changed and the price of coffee goes up food and
thus headline inflation will rise, if only temporarily.
Speaker 2 (35:12):
I got a fun one here. Have either of you
heard of Varda Space Industries?
Speaker 1 (35:18):
No?
Speaker 3 (35:18):
Yeah, just right now, there's some dude on Bloomberg talking
about it.
Speaker 2 (35:21):
How about that? Look at look at that. This is
you know, it's us in Bloomberg. So they are a
company that just raised about two hundred million dollars in
capital and their goal. What they do is they build
little space ships, like I don't know if they build
the rockets or just the capsules that go up on them,
but they build them for the purpose of making drugs
(35:45):
in space. So I looked at this at first, and
I'm like, okay, like is this just something that's kind
of dumb, Like what's the point of this? And the
big reason why they're trying to do this is because
in the zero gravity environment and in different pressure situations,
the medicines crystallize differently, which has the potential to allow
(36:09):
them to make drugs that they can't make with full
gravity on Earth, which I think is really cool. That
it's like, Hey, you've got these ideas that you think
would work for drugs, but we can't make them here
because of gravity. Great, let's make them in space. Wow,
which I think is kind of cool. I don't know
if it's actually going to work or not, but I
(36:29):
found the idea really interesting that gravity might be one
of the things that's keeping us from making life saving
medicines in certain situations.
Speaker 3 (36:38):
I assume they stay intact when you bring them back
into an environment with more intense gravity.
Speaker 2 (36:43):
I would imagine after the lapse. Look, I'm not a
chemical engineer. I'm not excited to spot, but from what
I know, you know, once you're in solid form, bonds
tend to be pretty stable unless there's an outside catalyst.
Is gravity is strong enough catalyst in order to uh?
Speaker 3 (37:01):
I don't think so, no do anything. So I wouldn't
think so.
Speaker 2 (37:04):
You never know.
Speaker 3 (37:05):
Now it would just be a bummer if you had
to go into space to take the medicine, is all
I'm saying. Hey, great, we've got a cure, a wonderful
thanks Doc. Bad news is you've got to fly one
of SpaceX's Ricketty rockets to get up there?
Speaker 2 (37:20):
Have you? Uh? Mark? Are you? Are you? Are you
pro space or anti space? For yourself?
Speaker 1 (37:26):
Like?
Speaker 3 (37:26):
Do I want to be shot? Do I want my
ass you shot into space? What I like to see?
Speaker 2 (37:29):
Would you, ever, while alive, want to go to space?
Speaker 3 (37:31):
If there was an urgent need tourism?
Speaker 2 (37:33):
Mark?
Speaker 3 (37:33):
Like, is there is there a business opportunity?
Speaker 2 (37:35):
Would you take the bezos blaster up into space?
Speaker 3 (37:38):
Wouldn't any curious person?
Speaker 2 (37:41):
Wait? Hold on? Is it? Hold on? And what?
Speaker 3 (37:44):
At what cost?
Speaker 2 (37:46):
Bag of chips?
Speaker 3 (37:48):
Yeah? Sure?
Speaker 2 (37:48):
Yeah? Five bucks and you get to go to space?
Speaker 3 (37:51):
Yeah? I want to get my affairs in order first.
Speaker 2 (37:53):
You're anti space?
Speaker 4 (37:54):
Yah, I'm good. I'm good. Yeah, I'll see it from
down here.
Speaker 2 (37:58):
You know what am I gonna do? Why?
Speaker 3 (38:00):
Tucker, there's no Wi Fi. You're afraid you're worried about
the risk of malfunction. I'm good on scheduled disassembly.
Speaker 2 (38:07):
Extream Netflix up there.
Speaker 3 (38:09):
I need to sit on that enough enough pot on
the moon?
Speaker 2 (38:13):
The hell? The bandwidth is week?
Speaker 3 (38:15):
I'm sorry, Tucker.
Speaker 2 (38:17):
All right, anyways, We're going to take a quick break
for the rest of the day and we will see
you tomorrow to finish up the week,
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