December 8, 2025 • 39 mins
Chuck Zodda and Mike Armstrong discuss what to expect in markets this week, from Fed rate decision to Oracle and Broadcom earnings. Paramount Skydance launches hostile big for Warner Brothers. The year of America's cranky consumer. Will Australia's 16-under social media ban come to the US?
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Episode Transcript
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Speaker 1 (00:00):
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(00:43):
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Speaker 2 (00:56):
Help us support our.
Speaker 3 (00:57):
Great American heroes by visiting dav five Dog Boston and
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Chuck Zada, and Mike Armstrong.
Speaker 2 (01:10):
I hope y'all had a great weekend. It's Chuck, Mike,
and Tucker with you here, and we've got a busy week,
my dudes.
Speaker 4 (01:22):
And do debts both. Yeah.
Speaker 2 (01:26):
Yeah, I mean, look, the centerpiece is Jay Powell and
the Gang are going to be getting together on Wednesday,
and they're going to be potentially changing interest rates, and
they're also going to be giving their summary of economic projections,
despite the fact that they don't have economic data that's
going to be released a week later. I don't know
why they don't just delay this meeting. The more that
I sit here and stew about it, the dumber I
(01:49):
think it is for a bunch of really smart people
to just not push their meeting back by one week
so they can have the economic data on which not
only they're like decision making pens, but the summary of
economic projections. They use data that they will receive next
week in their models to help explain what they think
is going to happen. And all they would need to
(02:11):
do is be like, Hey, instead of having it on
the tenth, we're gonna have it on the seventeenth. Yeah,
But they're not going to do that. I've even gone
so far as to suggests that J. Powell could push
things back an additional week to get more data, in
which case we could have the first ever Christmas Eve
FED meeting.
Speaker 4 (02:29):
That sounds terrible for everybody, but I've.
Speaker 2 (02:31):
Been told, in no uncertain terms, no, they're not going to.
Speaker 4 (02:34):
Terrible for J. Powell and terrible for those who have
to cover it.
Speaker 2 (02:38):
Listen, if the NBA can have games on Christmas, why
can't the FED own Christmas Eve ratings?
Speaker 4 (02:44):
Yeah?
Speaker 2 (02:45):
Right, the FED would have great ratings? Or were you
saying something else.
Speaker 1 (02:50):
Saying the FED would not have good ratings?
Speaker 2 (02:52):
You don't think so, No, L would. What if what
if you had? Okay, let's go a step further. What
if J. Powell did the halftime show at one of
the NBA games on Christmas? I think he can juggle.
This is pyrotechnics going off. Next show him at the
(03:14):
house red and green tie wardrobe malfunction. It's it's only
around purple fireworks and he's just talking normally. Yeah, well,
we believe that the balance of risks has changed.
Speaker 5 (03:27):
There's about like one hundred and fifty Americans that would
find that funny.
Speaker 2 (03:31):
And we're in there's there's three of us. It's a
pretty narrow joke in any case. So we do have
the FED this Wednesday, we get the job openings in
the Labor Turnover Survey data. Tomorrow that's the Jolts report.
Uh so that's kind of exciting. But this is the
September one. I'm not clear. I think the October ones
(03:52):
included here as well, but it's it's unclear exactly how
they're going to split them up, if it's gonna just
be one release or two. I just I just don't know.
Thursday we got initial jobless claims, and so that's kind
of what we've got on tap for the week from
an economic data perspective. On the earning side of things,
(04:12):
we got a couple movers and shakers as well. Oracle,
who remember had that big, you know, forty percent jump
after their last earnings report back three months ago. They've
given up all those gains and then some. So I
think the market's going to be watching pretty closely to
be like, hey, is any of that three hundred billion
dollars in potential revenue turning into real revenue. M that'll
(04:35):
be you know, interesting for them to say. Thursday we've
got Broadcom, who's all tied into that AI space. Broadcom, again,
you might have been sleeping on this. There one point
six trillion dollar company.
Speaker 4 (04:46):
I's gonna say, it's amazing how little we talk about.
Speaker 5 (04:49):
The sixth largest company in the world.
Speaker 4 (04:52):
Well, can we talk about why that is? Why we
talk about them very little or why they're so big?
Speaker 2 (04:59):
Both in my opinion, because I think they're tied together
quite honestly. The first is they're so big because they
are really, you know, tied into the AI ecosystem. Sure,
they're a mini in video, which is great. The problem
is there a really mini in video? Because in Video
is doing right now about two hundred billion dollars in
(05:20):
revenue and they are growing their revenue sixty percent year
over year. Broadcom, on the other hand, is doing sixty
billion dollars in revenue and they are growing their revenue
twenty two percent year over year. I'm just not sure
that that's really a one point six trillion dollar company.
Speaker 5 (05:36):
Beyond all that, they also happen to report their earnings
two to three weeks after in Vidia does, and so
they're old news by the time they get to market.
Speaker 2 (05:44):
They're trading thirty two times sales one hundred and two
times earnings, and again not saying they're not insanely profitable.
They are. They made eighteen billion dollars on the fifty
nine billion dollars in revenue that they've done. So like,
it's I'm not I'm not saying like, you guys run
a bad company. You don't like if there are any
broad common employees listening, it's it's not like I'm not
beating up on you. I'm kind of just looking at
(06:05):
the market beating.
Speaker 4 (06:06):
Up on the stock investors who are.
Speaker 2 (06:08):
Well, it's I'm sorry, but it's just like when I
think of trillion dollar companies, you gotta be doing at
least one hundred billion dollars in sales. I'm sorry, Like
I don't make the rules, but I just did. You did, Yeah,
I did, And they don't quite get there, but they're
still at one point six trillion dollar company, so they
are important and so we're going to discuss them later
(06:32):
this week.
Speaker 5 (06:32):
All right, So Wednesday FED meeting, Uh, probably the no,
not probably definitely the event of the week, although we
could see some fireworks out of the media space. What
what are we looking for from this uninformed FED meeting. Again,
we call it uninformed because they're getting a bunch of
more current data on the state of the labor and
inflation market the week after their Federal Reserve meeting due
(06:55):
to the government shutdown. But what are we to anticipate here,
because the expectations, to be very clear, have changed a
lot over the course of the last I remember when
the Williams speech was.
Speaker 4 (07:07):
But last thirty days, let's call it.
Speaker 2 (07:09):
Yeah. So where I think we are going here, uh,
Is I think that we are going to get Jay
Powell fufu.
Speaker 4 (07:22):
Like bunny.
Speaker 2 (07:23):
Yes, I think we're going to get a rate cut. Yeah,
and then Jay Powell is going to hop along the
forest and bop us on our heads and tell us
I'm not necessarily cutting rates.
Speaker 5 (07:33):
In January, which is exactly what you did after the
last meeting. And yet they're cutting rates.
Speaker 2 (07:36):
Yes, I think that's what we're going to get. It's
going to be like it's going to be a hawkish
rate cut. Is I think the the the expectation that
I have, And so that's that's kind of where I
think we're going with this is Yes. But Paul's going
to come out. He's going to say, you know, the
risks to the employment to continue to be present. As such,
(07:58):
the committee is, you know, going to cut interest rates
by a quarter percent, and I'm happy to take questions,
and then someone's gonna ask him, so what is you know,
what are you going to do in January? Well, we're
still assessing, but January is not necessarily a full go
and there very much is a situation where we could
see not cutting rates in January. Okay, everybody listening, Why
(08:20):
should they care? Quite honestly, I don't think they should.
Speaker 5 (08:23):
Yeah, I mean, best case scenario, Well, make a difference.
Speaker 4 (08:28):
It's not likely to bring down mortgage rates.
Speaker 5 (08:31):
We've seen that occur now quite frankly over the course
of the last eighteen months, where FED cuts rates and
mortgage rates either don't move or move upwards. If you've
got those I keep talking to people with all this
money and CDs that have been very excited over the
last five years because for a decade they could earn
nothing when going to the bank. That is continuing to deteriorate.
Speaker 4 (08:54):
Latest.
Speaker 5 (08:54):
I've seen you know, CD rates in the if you're
lucky four percent range that's going to continue to come
down after the next FED cut. We've also not seen
credit card interest rates really move on the FED cutting cycle.
Number of different reasons for that, but that hasn't really
been a contribute. The main beneficiary I can think of
this continued rate cutting cycle would be equity market investors.
(09:15):
And again I don't expect to see any big movements
and stocks the day of the announcement, but clearly lower
interest rates interest rates benefiting that one cohort.
Speaker 2 (09:26):
And by the way, mortgage rates probably moving back up
again today Tenure treasury selling off back up to four
point one eight percent, and so that's probably going to
push the national average for thirty or fixed rate mortgage
backup above six'. Three so, YEAH i, mean, look The
fed is cut interest rates the short Term fed funds
rate but one and a half percent since Last. September despite,
(09:48):
that mortgage rates are exactly where they were then.
Speaker 5 (09:52):
ANYTHING i, mean we are very close now to the
end of J powell's, term, right we have let's see this.
Speaker 2 (09:58):
One, two three for four more meetings That Jay powell
is going to preside. Over, yeah this one this week
and three others in twenty twenty. Six does that shift
anything around?
Speaker 3 (10:09):
It?
Speaker 4 (10:09):
Right?
Speaker 5 (10:09):
Like you, KNOW i know there's been immense pressure from
The White house on interest. Rates my personal view would,
be if YOU'RE Ja, powell there is no pressure to
do anything from The White. House you're out anyway In,
may and The White house has made it pretty clear,
that you, know absence some pretty extreme, stuff they're not
going to attempt to remove.
Speaker 2 (10:27):
You, YEAH i, MEAN i THINK i Think jay is
gonna Be. Jay it's who he's always. BEEN i think
the more interesting question to me BECAUSE i don't think there's,
like IF Ja powell were going to be swayed one
way or another by you, know threats of his, removal
(10:48):
he would have been swayed for a year. Ago he
would have BEEN i think the interesting question is J
powell remains on The board Of governors Through january twenty.
Eighth does he want to remain on The board Of,
governors because remember The board Of governors cycles through THE
(11:08):
Fed Open Market. Committee does he want to continue to
vote on The Open Market committee after he's no longer. Chair,
yeah it's a hard maybe be an interesting. Dynamic my
guess is he probably does not want. TO i Don't
here's the thing seem in keeping WITH J, powell we
KNOW i think that he very much wants to finish
(11:30):
out his term AS fed chair BECAUSE i think he
sees that as. IMPORTANT i suspect he kind of just
wants to move on from THE fed at that point
and not have all of that hanging over.
Speaker 4 (11:44):
Him he's got to make his speaking money.
Speaker 2 (11:46):
And then he can go out and Make what do
you think the going rate is FOR J powell these?
DAYS i mean we've talked in.
Speaker 4 (11:52):
The, past any FORMER fed. Chair, well Here's.
Speaker 2 (11:55):
Bernanke ten years ago was getting two fifty a. Gig
so Is.
Speaker 5 (11:58):
Yellen, okay So i'm guessing, yeah with, inflation you're you're
up to three one hundred and three. Fifty oh you
only do round numbers as A fed. Chair i'm guessing
it's kind of, like you know how when they do
the annual adjustments to four ONE k contributions that they
only go up in numbers of five hundred or one. Thousand,
yeah the question is This powe will get five hundred
(12:20):
k yet or.
Speaker 2 (12:20):
Is he still a two to? Fifty good? Question you,
know that's that's kind of where it. Is five HUNDRED
k for an hour's work not half. Bad makes me
want to BE fed. Chair let's take a quick break
when we. RETURN i told you this one was gonna get.
Juicy we got the next leg in The Netflix Warner
(12:41):
Brothers Discovery Paramount, saga and it's a juicy. One right after.
Speaker 3 (12:46):
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Speaker 2 (13:50):
Boston all, Right so this MORNING i want to say
it was maybe like eight am or, so somewhere in that.
Range paramount launched a hostile takeover For Warner Brothers. Discovery
this comes several days After Warner Brothers discovery has reached
(14:12):
an agreement With netflix to be acquired by. Them, now
a hostile takeover is Not Hans gruber walking Into Nakatomy
plaza trying to get a bunch of bearer. Bonds it's
not that slightly. Different, okay what is a hostile, Takeover.
Michael it's when.
Speaker 5 (14:29):
You go to offer to buy a, company and rather
than the traditional route of the board or the and
THE ceo accepting or denying your, offer you bypass them
and go straight to the.
Speaker 4 (14:42):
Shareholders you say, Yes i'm going AND i am going.
Speaker 5 (14:45):
To put this vote to the vote of your actual,
shareholders which you, know the board is not the majority
in most, cases and so, they you, know try and
actually stuff the deal down the throat of the. Board
the initial deal that was agreed to The netflix buyout
was agreed to buy THE ceo and the. Board it
(15:06):
was a little bit less than The paramount, deal but
was not for the same group of. Assets so The
netflix deal was mostly, cash but some stock OFFER yep
at twenty seven dollars seventy five cents per, share but
it was for everything but the cable network business Of, WarnerMedia.
Speaker 2 (15:26):
Which you could make the case that maybe that doesn't
have any value or might have negative value depending on
how you view.
Speaker 4 (15:31):
It no clue what it's. Worth.
Speaker 5 (15:33):
Yeah The paramount, deal on the other, hand is the
entire company at a slightly higher. Price and when you
take into account that it's an all cash, offer they
point out, that, well you, know because it's all, cash
it's eighteen billion dollars more in cash to. SHAREHOLDERS i
would also think that if you're buying the entire, company
it happens a little bit faster than The netflix deal
(15:53):
where they first have to spin the company into two
and then complete the. Acquisition BUT i don't, know AND
i don't know how much more that is. Worth and
nonetheless they are going to try and take this to.
Speaker 2 (16:03):
Shareholders so we now are going to have again just
what is probably going to be a pretty ugly public
battle between these two companies to try to Buy Warner Brothers.
Speaker 5 (16:20):
Discovery you could see the offers get upped. Further paramounts
also pointing out that they think that they can get
a deal past legislative, concerns anti trust concerns better Than netflix,
can and there may be some truth to. That The
president has been pretty vocal about, this saying that he
has concerns about The netflix deal and has some pretty
(16:41):
close connections to The ellison family who Runs, paramount which
shouldn't be a, factor but pretty clearly.
Speaker 2 (16:47):
Is the other thing that you could see here is
a proxy, battle which proxy battles. Are, again you don't
really see these that often, anymore like they happen, occasionally
but basically what you also like the fascinating. Thing paramount
could go To Warner. Bros discovery shareholders and be, like,
hey do you not like your? Board because we don't
(17:10):
like your, board why don't you vote to replace your
board and then get a friendly one that would then
accept The warner the offer From paramount in. There so
you've got a couple different things that you could do.
Speaker 5 (17:22):
Here, it's by the, way some experts out there AND
i don't know how they run, this conclude That netflix
deal is worth closer to thirty one or thirty two
dollars per, share given that the existing shareholders would continue
to hold again a bit Of netflix plus the existing
bucket of assets that won't be part of that. Acquisition,
(17:44):
AGAIN i don't know how they come up with these,
numbers but that is the estimate run by Some.
Speaker 2 (17:50):
And the thing that you are going to run into
pretty quickly is if these prices need to be up
to like if you, see you, know these companies trying
to one up each other on the pricing side as
part of, this there's not much room to. Maneuver and
WHAT i mean by that, is let's look At paramount
(18:12):
just as an, Example Paramount. Skuidance right, now if we
again just pull up like their financials did twenty eight
billion dollars in revenue for the last twelve, Months they've
got three billion dollars in. Cash they have to borrow
north of fifty billion dollars in order to make this
work as it, is they have fifty six billion dollars
(18:32):
in debt commitments that are lined up eventually like and,
again like you can bet in the media, World i'm
guessing that the debt that you, are you, know issuing
to do so is probably not at four percent for
the next ten. Years, now you're probably talking in this
environment high single low double digits for your interest. Rates
(18:53):
so let's call, it you, know ten percent to make
the math. Easy, now you've got five billion dollars in
interest ex pence that you are throwing at this each.
Year just like, That, netflix despite being a four hundred
billion dollar company again by market cap they're four hundred
and six billion dollar, company they only do forty three
(19:16):
billion dollars in revenue a. Year as, well they have
nine billion dollars in cash on. Hand these are not
companies that are Like apple And google with billions to
just throw, around and in the media landscape that can.
Change it could be dangerous if you pay too much
quick Break Wall street watches.
Speaker 4 (19:34):
Next like us.
Speaker 1 (19:41):
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Speaker 3 (19:44):
Show breaking business news is always first right here on
The Financial Exchange Radio. Network time now For Wall Street
watch a complete look at what's moving markets so far
today right here on The Financial Exchange.
Speaker 6 (20:00):
Network that meeting week is upon, us and markets today
are pretty. Quiet traders also rating for job openings data
due tomorrow, morning in addition to more tech earnings from
the likes Of oracle And. Broadcom right, now The dow
is down about a quarter percent or one hundred and nineteen.
POINTS smp five hundred is down a tenth of a
(20:22):
percent or ten. Points nasdaq is edging only two points.
Higher russell two thousand is up a third of a
percent Ten Your treasure reeled up four basis points at
four point one point eight eight. Percent in crude oil
down about one and a third, percent trading at fifty
nine dollars and twenty five cents a. Barrel in a
hostile takeover, Bid paramount is now offering an all, cash
(20:45):
thirty dollars per share deal for all Of Warner brothers
days After warner agreed to a deal With. Netflix paramount
argues its best offer is better for shareholders and more
likely to be approved by regulators than The netflix. Offer
paramounts To block is rising four, percent While netflix sharers
are retreating four. Percent, meanwhile we have some acquisition news
(21:06):
in the tech sector this, morning AFTER ibm announced it
is buying data streaming Platform confluent and a deal worth
eleven billion. DOLLARS ibm shares are up, modestly While confluence
stock is surging nearly twenty nine. Percent, elsewhere according to the,
Information microsoft was in talks of moving its Custom chips
business To broadcom From Marvel. Technology marvel stock is falling nine,
(21:31):
percent While broadcom shares are climbing over two percent. Higher
Berkshire hathaway announced the departure of Investment officer AND GUICO
Ceo Todd, combs who will be JOINING Jp Morgan. Chase
berkshire stock is down over one. PERCENT a manufacturer c
our hhvac, Company Comfort, systems and online car Retailer carvana
(21:52):
are all seeing gains on the day following news that
all three companies will join THE s AND p five
hundred On december twenty. Six, second Let'll Tucker slovaan that
Is wallstree watch.
Speaker 2 (22:03):
The year Of america's cranky. Consumer it hasn't been a.
Year consumers have been pissed since twenty twenty. Two, well
let's let's. Discuss, Okay so if we're gonna look at,
This i'm guessing we're just gonna look purely at consumer
(22:25):
sentiment because that's what's referenced in, here.
Speaker 5 (22:26):
RIGHT i don't know what else you would look at
to determine the crankiness of the Average american.
Speaker 2 (22:31):
Consumer, Okay so consumer, sentiment as you, note has been
bad basically since early twenty twenty.
Speaker 4 (22:41):
Two it's been a.
Speaker 2 (22:42):
Dog, yeah it's been bad since. Then it had brief
moments of. Positivity the highest that we got was back
Last february And. MARCH i don't know why that's the.
CASE i don't look at like Last February march And i'm, like,
hey like that was like a shining bright spot economically like,
(23:03):
it you, know it's just kind of all been the.
Same so if we look at this consumer sentiment data,
normally which is again produced by The university Of, michigan
it comes out once a. Month, generally the times when
consumer sentiment has been bad have correlated to bad economies
mid nineteen, seventies early nineteen, eighties early nineteen, nineties two
(23:28):
thousand and, eight twenty. Eleven, like these were times where
AGAIN i was alive for most of, them not all of,
them but the ones where LIKE i was alive for
AND i, had you, know any semblance of what's going,
on or at least can relate back to. It i'm, like, oh,
yeah those were objectively bad economies for one reason or.
Another and so you look at the consumer sentiment data
(23:52):
that you have right, now and it's saying bad like
basically historically. Bad you're within sniffic distance of the worst
consumer sentiment readings that we've ever. Had, Yes and the
part that's challenging to understand is that unemployment is at
four and a half, percent which is low by historical.
Standards inflation right now is running at three, percent which
(24:14):
is elevated relative to you, know the two percent. Target
but inflation ran at three percent four you, know the
nineteen Ninety, like inflation's been close to three, before and
we haven't had. This and so the question THAT i
think is out there, Is, hey the economic data as
a whole doesn't look. Bad why Are american consumers being
(24:40):
cranky bit cranky? Pants and is it? JUSTIFIED i think
is the subtext of that as.
Speaker 5 (24:47):
Well the only time in the data SERIES i can
find where consumer sentiment was worse and unemployment was lower
than it is today When junito, two.
Speaker 4 (25:01):
And that's part of the current. Trend so, like this
is historically bad.
Speaker 5 (25:08):
Voting on the economy at a time when unemployment is you,
know historically not so. Bad so ONE i think we
have to start with my guess that something's just not
quite right with the data collection in comparison to nineteen, Ninety,
RIGHT i think it's not quite measuring the same thing
(25:31):
as my guess, why because every objective measure that we
have of the reading on the economy is, different and
when you ask people subjective, questions they're giving vastly different
responses than they used.
Speaker 2 (25:47):
To here's my. Counterpoints americans are just. Unhappier what if
we are? Different, yeah BECAUSE i think the general rule
of thumb THAT i have is that we are more
miserable human beings than we've ever. Been And i'm, Like
i'm gonna call a spade a space. View, No i'm
(26:09):
good with, That, yeah which means that every day you
see me is the worst day of my.
Speaker 1 (26:14):
Life it is Only. Monday so.
Speaker 2 (26:19):
Where i'm going with, this this is WHERE i think
you like we can be. Uplifting then, Yeah i'm. Sorry
i'm gonna draw a straight line back to social media
and the introduction of the, smartphone because pretty much every
measure of psychological, stability well, being and happiness has declined
in the last eighteen.
Speaker 4 (26:37):
YEARS i don't, know, See, chuck you don't. Know you
don't know this. Reading have you met PEOPLE i know
that they are?
Speaker 5 (26:45):
Miserable AND i do blame social, media but we all
Had facebook and smartphones in twenty seventeen and the data
didn't break UNTIL.
Speaker 2 (26:54):
Covid because the, well the economy was fundamentally different Than
and this is the other piece THAT i will say
when when looking at the, economy what matters is rate of,
change not Level and like this is Something i've come
to believe, really really. Strongly the, reason like one of
the reasons people are rating the economy badly right now, Is,
(27:16):
yes unemployment's four and a, half but it's come up
from three point four. Percent is there anyone out there
today who sits there and says the job market is
objectively better for workers than it was three years.
Speaker 4 (27:29):
Ago, no it's.
Speaker 5 (27:31):
Worsened and, likewise with, inflation, it's you, know three, percent
but it was nine percent a couple of years. Ago
and so you've had cumulative inflation over the last five
years that's equal to what you saw for more than.
Speaker 4 (27:43):
A decade in the twenty.
Speaker 2 (27:44):
Tens it's like it's like with gas. Prices but, AGAIN
i don't THINK i blame that on social, media, no
BUT i think we generally just feel. Worse like all
of the data out there is that people are unhappier
now than they were. Before why would that unhappiness not
be reflected in economic. Surveys, also if you're asking someone
are you happy or? Unhappy and more people are saying,
(28:06):
unhappy and then you ask them are you happy with
the economy or unhappy with the? Economy do we really
think the average person is just gonna sit back and, go,
well you, Know i'm pretty unhappy BECAUSE i spend my
whole life just scrolling Through instagram looking at people who
have better lives than. Me but, OBJECTIVELY i know that
inflation is not that bad right, now and that unemployment
(28:26):
is relatively low by historical standards that my parents would
have been happy. With and so, Yes i'm going to
rate the economy.
Speaker 4 (28:32):
Well in this?
Speaker 5 (28:33):
Case can we go completely off script during the next?
Segment what else do we? DO i want to talk
About australia's plan when it comes to social.
Speaker 2 (28:41):
Media are they going to put another shrimp on the?
Barbie they are gonna take away several shrimp off the?
Barbie will they have good? Days?
Speaker 5 (28:48):
Mate let's take a quick break and can we talk
About can we talk about this? Next Because australia is
going full extreme when it comes to social media to
with their new, law AND.
Speaker 4 (29:00):
I want to cover that next On The Financial.
Speaker 1 (29:01):
Exchange text us.
Speaker 3 (29:02):
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Speaker 2 (30:13):
Mike so we were talking last segment about why everyone
just in the aggregate is just more cranky than they've ever.
Been and the reason why we've been talking about this
is that consumer sentiment data is basically at or near
the worst ever recorded in The United, states despite the
fact that unemployment is still what we would consider low,
(30:36):
overall and, inflation though higher than, target still not crazy
high on an annualized basis right. Now and so the
two ipoths hypotheses THAT i put out, There, one it's
really about rates of, change not about, levels and unemployment's
been moving up and so that makes people. Upset and
(30:57):
prices have still been moving, up which makes people, upset
and so that's. One the other THAT i put out
there is, that, look if you look at basically happiness
measurements as a, whole they've pretty much all been declining
since the mid two, thousands largely in my, estimation because
of smartphones and social. Media and so if you think
people were more unhappy in, general they're going to be
(31:18):
more uhappy about the economy as.
Speaker 5 (31:19):
Well, YEAH i think that's a reasonable assessment of, it
and so we're going to have a new guinea pig
out there for some parts of, this which Is australia
quite going forward with a full ban on social media for,
kids effectively making a law across the country where you
(31:39):
must be sixteen in order to use services such As, Facebook,
instagram Kick, Reddit, snapchat, threads, TikTok twitch x and. YouTube
others that are not directly social, media such as, Discord, Messenger, pinterest, roadblocks,
whatsappen YouTube kids are not part of this, band but
we're talking about hundreds of thousands of kids who currently
(32:00):
have social media accounts In australia that are going to
be kicked, off and hundreds of thousands of more who
would have signed up that are going to be blocked
from doing. So there's been a couple other countries that
have done. This denmark is one of.
Speaker 4 (32:13):
Them.
Speaker 5 (32:14):
Famously there are other places that, are you, know talking
about similar. Restrictions but a big number of questions THAT i,
have most of them center around will we ever do
something similar here in The United. States the answer is,
no which my answer is almost definitely, not but one
there's some big questions as to how these companies are
(32:34):
going to implement it because the law does not give
any real firm guidance on how they should implement a
under sixteen, Ban and so there's been talks of facial
identification for, yeah that will go, well, right which is
exactly what you. Want Is facebook storing images of your
fourteen year old. Permanently they claim they wouldn't do, that
(32:57):
but the other ones would be some form of. Ideasification
but we don't really do. THAT i don't know What australia.
DOES i Know denmark has like a form OF, id
but you, know if you live in The United states
and you don't have a, passport if you live In
australia and you're a kid and you don't have a,
passport there's no real GOVERNMENT id way of confirming your.
Age but, nonetheless they are threatening these companies with thirty
(33:20):
three million dollar fines for violations of the. Policies and,
honestly WHILE i am certain that this never gets off
the ground because of things like freedom of speech rights
in The United states that are tough to get over
when you have social.
Speaker 2 (33:34):
Media well that's even before you get down to the
fact that we just bow down at the altar of
big tech row and think that these people are law
making despite being horribly you, know not great with their
ethical decision making has been proved out multiple. Times.
Speaker 5 (33:48):
YEAH i, mean, look our lawmakers are bought and paid
for by these, people SO i think that's another reason
it's not going to. Happen BUT i actually think it's
one of those issues that would have a tremendous amount
of bipartisan support if our lawmakers weren't bought and paid
for because of.
Speaker 2 (33:59):
It and if my mother had a wheel should be a.
BICYCLE i also.
Speaker 5 (34:04):
Just wondering out loud if you know it took us
twenty years to realize when did The, yeah twenty years
to realize how damaging these platforms, are And australia is
going about banning them at the exact same time that
they should be focusing on artificial intelligence for children and
looking at bands on that stuff instead of just targeting
social media right. Now BUT i do applaud What australia is.
(34:28):
DOING i, mean it might fail in spectacular, fashion but
it's all the evidence points to the fact that this
is just terrible for. KIDS i don't AND i always
land on like parents should be doing a better job with,
This but that's pretty tough when you know there's for
every parent doing a good job of policing, it there's
ten parents that are doing a crap job and letting
(34:51):
their kids use.
Speaker 4 (34:51):
It so.
Speaker 2 (34:54):
Yes and no right is kind of WHERE i land.
There if you look at if you look at the
places where we've tried to make progress in the last
like forty or fifty years in terms of like restricting
harm to, Teenagers like there's three big. ONES i think
(35:17):
that you look at, alcohol, cigarettes and, Pregnancy, okay and
we've gotten like much better at all of these in
terms of like avoiding bad outcomes and so like if
you think, about you, know just like the framework for
how to do this, ultimately like everyone when you're fifteen years,
(35:39):
old every single one of us would know the one
person who was twenty one years old who could buy you, beer, Right, Like,
Sure like even if you couldn't do it, personally you
knew the one person who could get you. Beer, sure
when you were twenty years, old you probably had FAKE
(36:00):
id from someone who had given it down to you
and it's been you, know handed down through your friend
group and so on and so.
Speaker 5 (36:05):
On, sure but do we call the changes to the
alcohol laws of failure because of?
Speaker 2 (36:09):
That, No BUT i do we really think it's because
of alcohol laws that we saw changes in youth. DRINKING
i don't think, so, because like you could, still did
anyone actually have a hard time getting access to alcohol
if they wanted it before they were twenty? One had
(36:31):
my entire college like like call it what it was.
Like you could drink the second you step foot down
a college.
Speaker 5 (36:39):
Campus but are you saying that the situation didn't get
better because there were like one hundreds of thousands OF
dui death prior to the twenty One i'm saying it
wasn't because of that restrict some societal.
Speaker 2 (36:51):
Change like the point That i'll, make did we do
anything to ban teen? Pregnancy? No, No we educated people
and like gave them more information to make more informed.
Decisions when you look at what's going on now with
kids that, are you, know in their teens and even,
twenties and what's going on with drinking even after they're
(37:13):
of legal, age there are fewer people drinking now than
ever before on a percentage, Basis and So i'm not
sure that some top down commandment works for a number of.
Reasons this is before you even get into the privacy
concerns about how the heck do, you you, know make
(37:35):
sure that you're figuring out who someone is without them
tracking that person and what they're doing online all over the.
Place and SO i JUST i don't think when you
look at kids with, technology any roadblocks that you put
up to try to slow them, down they can get
(37:56):
around if they figure out how to talk to anyone
who has kids in that age like ten to fourteen
range right, now and they'll tell you that no matter
what blocks they put in place on smartphones and things like,
that the kids figure out how to get On instagram
even though they're not supposed to be on there before they're, Thirteen,
like this is stuff that just. Happens and SO i
(38:18):
don't think that just being able to, say, yeah we're,
gonna you, know ban users under this age is going to.
WORK i don't think that's the, case because if you
want access to those, things you're going to get, them
same as anything else that we ban below a certain.
Age what we need to do is figure out how
to create the right incentive structure and everything so that
(38:40):
kids are making better. Decisions AND i know that's, harder not,
sexier but it is what it is in my. Opinion,
SORRY i just blew up that whole. Segment let's take
a quick break and we got our two coming up
in a bit
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Speaker 2 (01:10):
I hope y'all had a great weekend. It's Chuck, Mike,
and Tucker with you here, and we've got a busy week,
my dudes.
Speaker 4 (01:22):
And do debts both. Yeah.
Speaker 2 (01:26):
Yeah, I mean, look, the centerpiece is Jay Powell and
the Gang are going to be getting together on Wednesday,
and they're going to be potentially changing interest rates, and
they're also going to be giving their summary of economic projections,
despite the fact that they don't have economic data that's
going to be released a week later. I don't know
why they don't just delay this meeting. The more that
I sit here and stew about it, the dumber I
(01:49):
think it is for a bunch of really smart people
to just not push their meeting back by one week
so they can have the economic data on which not
only they're like decision making pens, but the summary of
economic projections. They use data that they will receive next
week in their models to help explain what they think
is going to happen. And all they would need to
(02:11):
do is be like, Hey, instead of having it on
the tenth, we're gonna have it on the seventeenth. Yeah,
But they're not going to do that. I've even gone
so far as to suggests that J. Powell could push
things back an additional week to get more data, in
which case we could have the first ever Christmas Eve
FED meeting.
Speaker 4 (02:29):
That sounds terrible for everybody, but I've.
Speaker 2 (02:31):
Been told, in no uncertain terms, no, they're not going to.
Speaker 4 (02:34):
Terrible for J. Powell and terrible for those who have
to cover it.
Speaker 2 (02:38):
Listen, if the NBA can have games on Christmas, why
can't the FED own Christmas Eve ratings?
Speaker 4 (02:44):
Yeah?
Speaker 2 (02:45):
Right, the FED would have great ratings? Or were you
saying something else.
Speaker 1 (02:50):
Saying the FED would not have good ratings?
Speaker 2 (02:52):
You don't think so, No, L would. What if what
if you had? Okay, let's go a step further. What
if J. Powell did the halftime show at one of
the NBA games on Christmas? I think he can juggle.
This is pyrotechnics going off. Next show him at the
(03:14):
house red and green tie wardrobe malfunction. It's it's only
around purple fireworks and he's just talking normally. Yeah, well,
we believe that the balance of risks has changed.
Speaker 5 (03:27):
There's about like one hundred and fifty Americans that would
find that funny.
Speaker 2 (03:31):
And we're in there's there's three of us. It's a
pretty narrow joke in any case. So we do have
the FED this Wednesday, we get the job openings in
the Labor Turnover Survey data. Tomorrow that's the Jolts report.
Uh so that's kind of exciting. But this is the
September one. I'm not clear. I think the October ones
(03:52):
included here as well, but it's it's unclear exactly how
they're going to split them up, if it's gonna just
be one release or two. I just I just don't know.
Thursday we got initial jobless claims, and so that's kind
of what we've got on tap for the week from
an economic data perspective. On the earning side of things,
(04:12):
we got a couple movers and shakers as well. Oracle,
who remember had that big, you know, forty percent jump
after their last earnings report back three months ago. They've
given up all those gains and then some. So I
think the market's going to be watching pretty closely to
be like, hey, is any of that three hundred billion
dollars in potential revenue turning into real revenue. M that'll
(04:35):
be you know, interesting for them to say. Thursday we've
got Broadcom, who's all tied into that AI space. Broadcom, again,
you might have been sleeping on this. There one point
six trillion dollar company.
Speaker 4 (04:46):
I's gonna say, it's amazing how little we talk about.
Speaker 5 (04:49):
The sixth largest company in the world.
Speaker 4 (04:52):
Well, can we talk about why that is? Why we
talk about them very little or why they're so big?
Speaker 2 (04:59):
Both in my opinion, because I think they're tied together
quite honestly. The first is they're so big because they
are really, you know, tied into the AI ecosystem. Sure,
they're a mini in video, which is great. The problem
is there a really mini in video? Because in Video
is doing right now about two hundred billion dollars in
(05:20):
revenue and they are growing their revenue sixty percent year
over year. Broadcom, on the other hand, is doing sixty
billion dollars in revenue and they are growing their revenue
twenty two percent year over year. I'm just not sure
that that's really a one point six trillion dollar company.
Speaker 5 (05:36):
Beyond all that, they also happen to report their earnings
two to three weeks after in Vidia does, and so
they're old news by the time they get to market.
Speaker 2 (05:44):
They're trading thirty two times sales one hundred and two
times earnings, and again not saying they're not insanely profitable.
They are. They made eighteen billion dollars on the fifty
nine billion dollars in revenue that they've done. So like,
it's I'm not I'm not saying like, you guys run
a bad company. You don't like if there are any
broad common employees listening, it's it's not like I'm not
beating up on you. I'm kind of just looking at
(06:05):
the market beating.
Speaker 4 (06:06):
Up on the stock investors who are.
Speaker 2 (06:08):
Well, it's I'm sorry, but it's just like when I
think of trillion dollar companies, you gotta be doing at
least one hundred billion dollars in sales. I'm sorry, Like
I don't make the rules, but I just did. You did, Yeah,
I did, And they don't quite get there, but they're
still at one point six trillion dollar company, so they
are important and so we're going to discuss them later
(06:32):
this week.
Speaker 5 (06:32):
All right, So Wednesday FED meeting, Uh, probably the no,
not probably definitely the event of the week, although we
could see some fireworks out of the media space. What
what are we looking for from this uninformed FED meeting. Again,
we call it uninformed because they're getting a bunch of
more current data on the state of the labor and
inflation market the week after their Federal Reserve meeting due
(06:55):
to the government shutdown. But what are we to anticipate here,
because the expectations, to be very clear, have changed a
lot over the course of the last I remember when
the Williams speech was.
Speaker 4 (07:07):
But last thirty days, let's call it.
Speaker 2 (07:09):
Yeah. So where I think we are going here, uh,
Is I think that we are going to get Jay
Powell fufu.
Speaker 4 (07:22):
Like bunny.
Speaker 2 (07:23):
Yes, I think we're going to get a rate cut. Yeah,
and then Jay Powell is going to hop along the
forest and bop us on our heads and tell us
I'm not necessarily cutting rates.
Speaker 5 (07:33):
In January, which is exactly what you did after the
last meeting. And yet they're cutting rates.
Speaker 2 (07:36):
Yes, I think that's what we're going to get. It's
going to be like it's going to be a hawkish
rate cut. Is I think the the the expectation that
I have, And so that's that's kind of where I
think we're going with this is Yes. But Paul's going
to come out. He's going to say, you know, the
risks to the employment to continue to be present. As such,
(07:58):
the committee is, you know, going to cut interest rates
by a quarter percent, and I'm happy to take questions,
and then someone's gonna ask him, so what is you know,
what are you going to do in January? Well, we're
still assessing, but January is not necessarily a full go
and there very much is a situation where we could
see not cutting rates in January. Okay, everybody listening, Why
(08:20):
should they care? Quite honestly, I don't think they should.
Speaker 5 (08:23):
Yeah, I mean, best case scenario, Well, make a difference.
Speaker 4 (08:28):
It's not likely to bring down mortgage rates.
Speaker 5 (08:31):
We've seen that occur now quite frankly over the course
of the last eighteen months, where FED cuts rates and
mortgage rates either don't move or move upwards. If you've
got those I keep talking to people with all this
money and CDs that have been very excited over the
last five years because for a decade they could earn
nothing when going to the bank. That is continuing to deteriorate.
Speaker 4 (08:54):
Latest.
Speaker 5 (08:54):
I've seen you know, CD rates in the if you're
lucky four percent range that's going to continue to come
down after the next FED cut. We've also not seen
credit card interest rates really move on the FED cutting cycle.
Number of different reasons for that, but that hasn't really
been a contribute. The main beneficiary I can think of
this continued rate cutting cycle would be equity market investors.
(09:15):
And again I don't expect to see any big movements
and stocks the day of the announcement, but clearly lower
interest rates interest rates benefiting that one cohort.
Speaker 2 (09:26):
And by the way, mortgage rates probably moving back up
again today Tenure treasury selling off back up to four
point one eight percent, and so that's probably going to
push the national average for thirty or fixed rate mortgage
backup above six'. Three so, YEAH i, mean, look The
fed is cut interest rates the short Term fed funds
rate but one and a half percent since Last. September despite,
(09:48):
that mortgage rates are exactly where they were then.
Speaker 5 (09:52):
ANYTHING i, mean we are very close now to the
end of J powell's, term, right we have let's see this.
Speaker 2 (09:58):
One, two three for four more meetings That Jay powell
is going to preside. Over, yeah this one this week
and three others in twenty twenty. Six does that shift
anything around?
Speaker 3 (10:09):
It?
Speaker 4 (10:09):
Right?
Speaker 5 (10:09):
Like you, KNOW i know there's been immense pressure from
The White house on interest. Rates my personal view would,
be if YOU'RE Ja, powell there is no pressure to
do anything from The White. House you're out anyway In,
may and The White house has made it pretty clear,
that you, know absence some pretty extreme, stuff they're not
going to attempt to remove.
Speaker 2 (10:27):
You, YEAH i, MEAN i THINK i Think jay is
gonna Be. Jay it's who he's always. BEEN i think
the more interesting question to me BECAUSE i don't think there's,
like IF Ja powell were going to be swayed one
way or another by you, know threats of his, removal
(10:48):
he would have been swayed for a year. Ago he
would have BEEN i think the interesting question is J
powell remains on The board Of governors Through january twenty.
Eighth does he want to remain on The board Of,
governors because remember The board Of governors cycles through THE
(11:08):
Fed Open Market. Committee does he want to continue to
vote on The Open Market committee after he's no longer. Chair,
yeah it's a hard maybe be an interesting. Dynamic my
guess is he probably does not want. TO i Don't
here's the thing seem in keeping WITH J, powell we
KNOW i think that he very much wants to finish
(11:30):
out his term AS fed chair BECAUSE i think he
sees that as. IMPORTANT i suspect he kind of just
wants to move on from THE fed at that point
and not have all of that hanging over.
Speaker 4 (11:44):
Him he's got to make his speaking money.
Speaker 2 (11:46):
And then he can go out and Make what do
you think the going rate is FOR J powell these?
DAYS i mean we've talked in.
Speaker 4 (11:52):
The, past any FORMER fed. Chair, well Here's.
Speaker 2 (11:55):
Bernanke ten years ago was getting two fifty a. Gig
so Is.
Speaker 5 (11:58):
Yellen, okay So i'm guessing, yeah with, inflation you're you're
up to three one hundred and three. Fifty oh you
only do round numbers as A fed. Chair i'm guessing
it's kind of, like you know how when they do
the annual adjustments to four ONE k contributions that they
only go up in numbers of five hundred or one. Thousand,
yeah the question is This powe will get five hundred
(12:20):
k yet or.
Speaker 2 (12:20):
Is he still a two to? Fifty good? Question you,
know that's that's kind of where it. Is five HUNDRED
k for an hour's work not half. Bad makes me
want to BE fed. Chair let's take a quick break
when we. RETURN i told you this one was gonna get.
Juicy we got the next leg in The Netflix Warner
(12:41):
Brothers Discovery Paramount, saga and it's a juicy. One right after.
Speaker 3 (12:46):
This business and financial news affecting the markets and your.
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(13:06):
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Speaker 6 (13:08):
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Speaker 2 (13:50):
Boston all, Right so this MORNING i want to say
it was maybe like eight am or, so somewhere in that.
Range paramount launched a hostile takeover For Warner Brothers. Discovery
this comes several days After Warner Brothers discovery has reached
(14:12):
an agreement With netflix to be acquired by. Them, now
a hostile takeover is Not Hans gruber walking Into Nakatomy
plaza trying to get a bunch of bearer. Bonds it's
not that slightly. Different, okay what is a hostile, Takeover.
Michael it's when.
Speaker 5 (14:29):
You go to offer to buy a, company and rather
than the traditional route of the board or the and
THE ceo accepting or denying your, offer you bypass them
and go straight to the.
Speaker 4 (14:42):
Shareholders you say, Yes i'm going AND i am going.
Speaker 5 (14:45):
To put this vote to the vote of your actual,
shareholders which you, know the board is not the majority
in most, cases and so, they you, know try and
actually stuff the deal down the throat of the. Board
the initial deal that was agreed to The netflix buyout
was agreed to buy THE ceo and the. Board it
(15:06):
was a little bit less than The paramount, deal but
was not for the same group of. Assets so The
netflix deal was mostly, cash but some stock OFFER yep
at twenty seven dollars seventy five cents per, share but
it was for everything but the cable network business Of, WarnerMedia.
Speaker 2 (15:26):
Which you could make the case that maybe that doesn't
have any value or might have negative value depending on
how you view.
Speaker 4 (15:31):
It no clue what it's. Worth.
Speaker 5 (15:33):
Yeah The paramount, deal on the other, hand is the
entire company at a slightly higher. Price and when you
take into account that it's an all cash, offer they
point out, that, well you, know because it's all, cash
it's eighteen billion dollars more in cash to. SHAREHOLDERS i
would also think that if you're buying the entire, company
it happens a little bit faster than The netflix deal
(15:53):
where they first have to spin the company into two
and then complete the. Acquisition BUT i don't, know AND
i don't know how much more that is. Worth and
nonetheless they are going to try and take this to.
Speaker 2 (16:03):
Shareholders so we now are going to have again just
what is probably going to be a pretty ugly public
battle between these two companies to try to Buy Warner Brothers.
Speaker 5 (16:20):
Discovery you could see the offers get upped. Further paramounts
also pointing out that they think that they can get
a deal past legislative, concerns anti trust concerns better Than netflix,
can and there may be some truth to. That The
president has been pretty vocal about, this saying that he
has concerns about The netflix deal and has some pretty
(16:41):
close connections to The ellison family who Runs, paramount which
shouldn't be a, factor but pretty clearly.
Speaker 2 (16:47):
Is the other thing that you could see here is
a proxy, battle which proxy battles. Are, again you don't
really see these that often, anymore like they happen, occasionally
but basically what you also like the fascinating. Thing paramount
could go To Warner. Bros discovery shareholders and be, like,
hey do you not like your? Board because we don't
(17:10):
like your, board why don't you vote to replace your
board and then get a friendly one that would then
accept The warner the offer From paramount in. There so
you've got a couple different things that you could do.
Speaker 5 (17:22):
Here, it's by the, way some experts out there AND
i don't know how they run, this conclude That netflix
deal is worth closer to thirty one or thirty two
dollars per, share given that the existing shareholders would continue
to hold again a bit Of netflix plus the existing
bucket of assets that won't be part of that. Acquisition,
(17:44):
AGAIN i don't know how they come up with these,
numbers but that is the estimate run by Some.
Speaker 2 (17:50):
And the thing that you are going to run into
pretty quickly is if these prices need to be up
to like if you, see you, know these companies trying
to one up each other on the pricing side as
part of, this there's not much room to. Maneuver and
WHAT i mean by that, is let's look At paramount
(18:12):
just as an, Example Paramount. Skuidance right, now if we
again just pull up like their financials did twenty eight
billion dollars in revenue for the last twelve, Months they've
got three billion dollars in. Cash they have to borrow
north of fifty billion dollars in order to make this
work as it, is they have fifty six billion dollars
(18:32):
in debt commitments that are lined up eventually like and,
again like you can bet in the media, World i'm
guessing that the debt that you, are you, know issuing
to do so is probably not at four percent for
the next ten. Years, now you're probably talking in this
environment high single low double digits for your interest. Rates
(18:53):
so let's call, it you, know ten percent to make
the math. Easy, now you've got five billion dollars in
interest ex pence that you are throwing at this each.
Year just like, That, netflix despite being a four hundred
billion dollar company again by market cap they're four hundred
and six billion dollar, company they only do forty three
(19:16):
billion dollars in revenue a. Year as, well they have
nine billion dollars in cash on. Hand these are not
companies that are Like apple And google with billions to
just throw, around and in the media landscape that can.
Change it could be dangerous if you pay too much
quick Break Wall street watches.
Speaker 4 (19:34):
Next like us.
Speaker 1 (19:41):
On facebook and follow us On twitter AT tfe.
Speaker 3 (19:44):
Show breaking business news is always first right here on
The Financial Exchange Radio. Network time now For Wall Street
watch a complete look at what's moving markets so far
today right here on The Financial Exchange.
Speaker 6 (20:00):
Network that meeting week is upon, us and markets today
are pretty. Quiet traders also rating for job openings data
due tomorrow, morning in addition to more tech earnings from
the likes Of oracle And. Broadcom right, now The dow
is down about a quarter percent or one hundred and nineteen.
POINTS smp five hundred is down a tenth of a
(20:22):
percent or ten. Points nasdaq is edging only two points.
Higher russell two thousand is up a third of a
percent Ten Your treasure reeled up four basis points at
four point one point eight eight. Percent in crude oil
down about one and a third, percent trading at fifty
nine dollars and twenty five cents a. Barrel in a
hostile takeover, Bid paramount is now offering an all, cash
(20:45):
thirty dollars per share deal for all Of Warner brothers
days After warner agreed to a deal With. Netflix paramount
argues its best offer is better for shareholders and more
likely to be approved by regulators than The netflix. Offer
paramounts To block is rising four, percent While netflix sharers
are retreating four. Percent, meanwhile we have some acquisition news
(21:06):
in the tech sector this, morning AFTER ibm announced it
is buying data streaming Platform confluent and a deal worth
eleven billion. DOLLARS ibm shares are up, modestly While confluence
stock is surging nearly twenty nine. Percent, elsewhere according to the,
Information microsoft was in talks of moving its Custom chips
business To broadcom From Marvel. Technology marvel stock is falling nine,
(21:31):
percent While broadcom shares are climbing over two percent. Higher
Berkshire hathaway announced the departure of Investment officer AND GUICO
Ceo Todd, combs who will be JOINING Jp Morgan. Chase
berkshire stock is down over one. PERCENT a manufacturer c
our hhvac, Company Comfort, systems and online car Retailer carvana
(21:52):
are all seeing gains on the day following news that
all three companies will join THE s AND p five
hundred On december twenty. Six, second Let'll Tucker slovaan that
Is wallstree watch.
Speaker 2 (22:03):
The year Of america's cranky. Consumer it hasn't been a.
Year consumers have been pissed since twenty twenty. Two, well
let's let's. Discuss, Okay so if we're gonna look at,
This i'm guessing we're just gonna look purely at consumer
(22:25):
sentiment because that's what's referenced in, here.
Speaker 5 (22:26):
RIGHT i don't know what else you would look at
to determine the crankiness of the Average american.
Speaker 2 (22:31):
Consumer, Okay so consumer, sentiment as you, note has been
bad basically since early twenty twenty.
Speaker 4 (22:41):
Two it's been a.
Speaker 2 (22:42):
Dog, yeah it's been bad since. Then it had brief
moments of. Positivity the highest that we got was back
Last february And. MARCH i don't know why that's the.
CASE i don't look at like Last February march And i'm, like,
hey like that was like a shining bright spot economically like,
(23:03):
it you, know it's just kind of all been the.
Same so if we look at this consumer sentiment data,
normally which is again produced by The university Of, michigan
it comes out once a. Month, generally the times when
consumer sentiment has been bad have correlated to bad economies
mid nineteen, seventies early nineteen, eighties early nineteen, nineties two
(23:28):
thousand and, eight twenty. Eleven, like these were times where
AGAIN i was alive for most of, them not all of,
them but the ones where LIKE i was alive for
AND i, had you, know any semblance of what's going,
on or at least can relate back to. It i'm, like, oh,
yeah those were objectively bad economies for one reason or.
Another and so you look at the consumer sentiment data
(23:52):
that you have right, now and it's saying bad like
basically historically. Bad you're within sniffic distance of the worst
consumer sentiment readings that we've ever. Had, Yes and the
part that's challenging to understand is that unemployment is at
four and a half, percent which is low by historical.
Standards inflation right now is running at three, percent which
(24:14):
is elevated relative to you, know the two percent. Target
but inflation ran at three percent four you, know the
nineteen Ninety, like inflation's been close to three, before and
we haven't had. This and so the question THAT i
think is out there, Is, hey the economic data as
a whole doesn't look. Bad why Are american consumers being
(24:40):
cranky bit cranky? Pants and is it? JUSTIFIED i think
is the subtext of that as.
Speaker 5 (24:47):
Well the only time in the data SERIES i can
find where consumer sentiment was worse and unemployment was lower
than it is today When junito, two.
Speaker 4 (25:01):
And that's part of the current. Trend so, like this
is historically bad.
Speaker 5 (25:08):
Voting on the economy at a time when unemployment is you,
know historically not so. Bad so ONE i think we
have to start with my guess that something's just not
quite right with the data collection in comparison to nineteen, Ninety,
RIGHT i think it's not quite measuring the same thing
(25:31):
as my guess, why because every objective measure that we
have of the reading on the economy is, different and
when you ask people subjective, questions they're giving vastly different
responses than they used.
Speaker 2 (25:47):
To here's my. Counterpoints americans are just. Unhappier what if
we are? Different, yeah BECAUSE i think the general rule
of thumb THAT i have is that we are more
miserable human beings than we've ever. Been And i'm, Like
i'm gonna call a spade a space. View, No i'm
(26:09):
good with, That, yeah which means that every day you
see me is the worst day of my.
Speaker 1 (26:14):
Life it is Only. Monday so.
Speaker 2 (26:19):
Where i'm going with, this this is WHERE i think
you like we can be. Uplifting then, Yeah i'm. Sorry
i'm gonna draw a straight line back to social media
and the introduction of the, smartphone because pretty much every
measure of psychological, stability well, being and happiness has declined
in the last eighteen.
Speaker 4 (26:37):
YEARS i don't, know, See, chuck you don't. Know you
don't know this. Reading have you met PEOPLE i know
that they are?
Speaker 5 (26:45):
Miserable AND i do blame social, media but we all
Had facebook and smartphones in twenty seventeen and the data
didn't break UNTIL.
Speaker 2 (26:54):
Covid because the, well the economy was fundamentally different Than
and this is the other piece THAT i will say
when when looking at the, economy what matters is rate of,
change not Level and like this is Something i've come
to believe, really really. Strongly the, reason like one of
the reasons people are rating the economy badly right now, Is,
(27:16):
yes unemployment's four and a, half but it's come up
from three point four. Percent is there anyone out there
today who sits there and says the job market is
objectively better for workers than it was three years.
Speaker 4 (27:29):
Ago, no it's.
Speaker 5 (27:31):
Worsened and, likewise with, inflation, it's you, know three, percent
but it was nine percent a couple of years. Ago
and so you've had cumulative inflation over the last five
years that's equal to what you saw for more than.
Speaker 4 (27:43):
A decade in the twenty.
Speaker 2 (27:44):
Tens it's like it's like with gas. Prices but, AGAIN
i don't THINK i blame that on social, media, no
BUT i think we generally just feel. Worse like all
of the data out there is that people are unhappier
now than they were. Before why would that unhappiness not
be reflected in economic. Surveys, also if you're asking someone
are you happy or? Unhappy and more people are saying,
(28:06):
unhappy and then you ask them are you happy with
the economy or unhappy with the? Economy do we really
think the average person is just gonna sit back and, go,
well you, Know i'm pretty unhappy BECAUSE i spend my
whole life just scrolling Through instagram looking at people who
have better lives than. Me but, OBJECTIVELY i know that
inflation is not that bad right, now and that unemployment
(28:26):
is relatively low by historical standards that my parents would
have been happy. With and so, Yes i'm going to
rate the economy.
Speaker 4 (28:32):
Well in this?
Speaker 5 (28:33):
Case can we go completely off script during the next?
Segment what else do we? DO i want to talk
About australia's plan when it comes to social.
Speaker 2 (28:41):
Media are they going to put another shrimp on the?
Barbie they are gonna take away several shrimp off the?
Barbie will they have good? Days?
Speaker 5 (28:48):
Mate let's take a quick break and can we talk
About can we talk about this? Next Because australia is
going full extreme when it comes to social media to
with their new, law AND.
Speaker 4 (29:00):
I want to cover that next On The Financial.
Speaker 1 (29:01):
Exchange text us.
Speaker 3 (29:02):
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Speaker 2 (30:13):
Mike so we were talking last segment about why everyone
just in the aggregate is just more cranky than they've ever.
Been and the reason why we've been talking about this
is that consumer sentiment data is basically at or near
the worst ever recorded in The United, states despite the
fact that unemployment is still what we would consider low,
(30:36):
overall and, inflation though higher than, target still not crazy
high on an annualized basis right. Now and so the
two ipoths hypotheses THAT i put out, There, one it's
really about rates of, change not about, levels and unemployment's
been moving up and so that makes people. Upset and
(30:57):
prices have still been moving, up which makes people, upset
and so that's. One the other THAT i put out
there is, that, look if you look at basically happiness
measurements as a, whole they've pretty much all been declining
since the mid two, thousands largely in my, estimation because
of smartphones and social. Media and so if you think
people were more unhappy in, general they're going to be
(31:18):
more uhappy about the economy as.
Speaker 5 (31:19):
Well, YEAH i think that's a reasonable assessment of, it
and so we're going to have a new guinea pig
out there for some parts of, this which Is australia
quite going forward with a full ban on social media for,
kids effectively making a law across the country where you
(31:39):
must be sixteen in order to use services such As, Facebook,
instagram Kick, Reddit, snapchat, threads, TikTok twitch x and. YouTube
others that are not directly social, media such as, Discord, Messenger, pinterest, roadblocks,
whatsappen YouTube kids are not part of this, band but
we're talking about hundreds of thousands of kids who currently
(32:00):
have social media accounts In australia that are going to
be kicked, off and hundreds of thousands of more who
would have signed up that are going to be blocked
from doing. So there's been a couple other countries that
have done. This denmark is one of.
Speaker 4 (32:13):
Them.
Speaker 5 (32:14):
Famously there are other places that, are you, know talking
about similar. Restrictions but a big number of questions THAT i,
have most of them center around will we ever do
something similar here in The United. States the answer is,
no which my answer is almost definitely, not but one
there's some big questions as to how these companies are
(32:34):
going to implement it because the law does not give
any real firm guidance on how they should implement a
under sixteen, Ban and so there's been talks of facial
identification for, yeah that will go, well, right which is
exactly what you. Want Is facebook storing images of your
fourteen year old. Permanently they claim they wouldn't do, that
(32:57):
but the other ones would be some form of. Ideasification
but we don't really do. THAT i don't know What australia.
DOES i Know denmark has like a form OF, id
but you, know if you live in The United states
and you don't have a, passport if you live In
australia and you're a kid and you don't have a,
passport there's no real GOVERNMENT id way of confirming your.
Age but, nonetheless they are threatening these companies with thirty
(33:20):
three million dollar fines for violations of the. Policies and,
honestly WHILE i am certain that this never gets off
the ground because of things like freedom of speech rights
in The United states that are tough to get over
when you have social.
Speaker 2 (33:34):
Media well that's even before you get down to the
fact that we just bow down at the altar of
big tech row and think that these people are law
making despite being horribly you, know not great with their
ethical decision making has been proved out multiple. Times.
Speaker 5 (33:48):
YEAH i, mean, look our lawmakers are bought and paid
for by these, people SO i think that's another reason
it's not going to. Happen BUT i actually think it's
one of those issues that would have a tremendous amount
of bipartisan support if our lawmakers weren't bought and paid
for because of.
Speaker 2 (33:59):
It and if my mother had a wheel should be a.
BICYCLE i also.
Speaker 5 (34:04):
Just wondering out loud if you know it took us
twenty years to realize when did The, yeah twenty years
to realize how damaging these platforms, are And australia is
going about banning them at the exact same time that
they should be focusing on artificial intelligence for children and
looking at bands on that stuff instead of just targeting
social media right. Now BUT i do applaud What australia is.
(34:28):
DOING i, mean it might fail in spectacular, fashion but
it's all the evidence points to the fact that this
is just terrible for. KIDS i don't AND i always
land on like parents should be doing a better job with,
This but that's pretty tough when you know there's for
every parent doing a good job of policing, it there's
ten parents that are doing a crap job and letting
(34:51):
their kids use.
Speaker 4 (34:51):
It so.
Speaker 2 (34:54):
Yes and no right is kind of WHERE i land.
There if you look at if you look at the
places where we've tried to make progress in the last
like forty or fifty years in terms of like restricting
harm to, Teenagers like there's three big. ONES i think
(35:17):
that you look at, alcohol, cigarettes and, Pregnancy, okay and
we've gotten like much better at all of these in
terms of like avoiding bad outcomes and so like if
you think, about you, know just like the framework for
how to do this, ultimately like everyone when you're fifteen years,
(35:39):
old every single one of us would know the one
person who was twenty one years old who could buy you, beer, Right, Like,
Sure like even if you couldn't do it, personally you
knew the one person who could get you. Beer, sure
when you were twenty years, old you probably had FAKE
(36:00):
id from someone who had given it down to you
and it's been you, know handed down through your friend
group and so on and so.
Speaker 5 (36:05):
On, sure but do we call the changes to the
alcohol laws of failure because of?
Speaker 2 (36:09):
That, No BUT i do we really think it's because
of alcohol laws that we saw changes in youth. DRINKING
i don't think, so, because like you could, still did
anyone actually have a hard time getting access to alcohol
if they wanted it before they were twenty? One had
(36:31):
my entire college like like call it what it was.
Like you could drink the second you step foot down
a college.
Speaker 5 (36:39):
Campus but are you saying that the situation didn't get
better because there were like one hundreds of thousands OF
dui death prior to the twenty One i'm saying it
wasn't because of that restrict some societal.
Speaker 2 (36:51):
Change like the point That i'll, make did we do
anything to ban teen? Pregnancy? No, No we educated people
and like gave them more information to make more informed.
Decisions when you look at what's going on now with
kids that, are you, know in their teens and even,
twenties and what's going on with drinking even after they're
(37:13):
of legal, age there are fewer people drinking now than
ever before on a percentage, Basis and So i'm not
sure that some top down commandment works for a number of.
Reasons this is before you even get into the privacy
concerns about how the heck do, you you, know make
(37:35):
sure that you're figuring out who someone is without them
tracking that person and what they're doing online all over the.
Place and SO i JUST i don't think when you
look at kids with, technology any roadblocks that you put
up to try to slow them, down they can get
(37:56):
around if they figure out how to talk to anyone
who has kids in that age like ten to fourteen
range right, now and they'll tell you that no matter
what blocks they put in place on smartphones and things like,
that the kids figure out how to get On instagram
even though they're not supposed to be on there before they're, Thirteen,
like this is stuff that just. Happens and SO i
(38:18):
don't think that just being able to, say, yeah we're,
gonna you, know ban users under this age is going to.
WORK i don't think that's the, case because if you
want access to those, things you're going to get, them
same as anything else that we ban below a certain.
Age what we need to do is figure out how
to create the right incentive structure and everything so that
(38:40):
kids are making better. Decisions AND i know that's, harder not,
sexier but it is what it is in my. Opinion,
SORRY i just blew up that whole. Segment let's take
a quick break and we got our two coming up
in a bit
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