September 11, 2025 • 38 mins
Chuck Zodda and Mike Armstrong discuss incomes rose and poverty fell last year. So why do so many Americans feel trapped? Homeowners dash to refinance as mortgage rates dive. Fewer people think that retirement will take a miracle. But inflation worries persist. Bond yields are falling. Where can retirees still find 5% yeilds? FTC opens probe into Alphabet, Meta, OpenAI, xAI, and Snap over chatbot safety for kids.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Financial Exchange is produced by Money Matters Radio and
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(00:20):
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(00:43):
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(01:06):
and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you, and we've got another
broad based rally taking place today, taking stocks to new
all time highs. On the S and P five hundred,
which currently sits at sixty five seventy seven, up another.
Speaker 3 (01:26):
Forty five points today.
Speaker 2 (01:28):
Uh. The NASDAK also finally notching another all time high.
It had been unable to even with the at least
on an intra day basis, it had been unable to
over the last couple of days, but finally has gotten
there now. And so the NASDAK up point six percent
one hundred and thirty one points. And last, but certainly
not least, the Dow Jones Industrial Average is up five
(01:51):
hundred and thirty seven points about one point two percent.
So again all three major US indices moving on up
despite a hotter than antiseiy've paided headline inflation report and
inline core inflation data, you've actually got bonds moving down
for yield's day, the Tenure Treasury right now down one
point three basis points to four point h one nine percent.
(02:13):
This because we got a worse than expected weekly jobbless
claims report for initial jobbles claims, which moved up to
two hundred and sixty three thousand from two hundred and
thirty six thousand in the prior week, and so markets
acting a little bit nervous and skittish on that side
of things right now. When we take a look at commodities,
(02:37):
we've got oil down a dollar fifteen a barrel to
sixty two to fifty two, and we've got gold down
fourteen sixty one ounce to thirty six sixty seven. And
those are the major moves taking place inside US markets.
State Mike, anything you want to add there, I.
Speaker 3 (02:54):
Just wanted to contextualize one thing that we've It's been
getting a fair bit of price press coverage, not price coverage,
which is where the S and P sits in terms
of its valuation, and it is true that from a
number of different metrics, it is the highest that it
has ever been. Specifically, the one that people have been
(03:16):
looking at is that price to sales ratio, which looks at, hey,
what is the price of the S and P five hundred
compared to the gross sales of the businesses that comprise it.
The piece that has not hit those same all times
highs is the price to earnings ratio that is still
pretty well below where we were in the peaks of
the dot com bubble and really speaks to one main
(03:40):
piece of information here, which is that the companies today
that are getting bid up are far more profitable than
they were than those that were during the dot com bubble.
It does not mean that there weren't companies that were.
There are plenty of companies that were very profitable back
in the late nineties that we're also seeing their stock
prices go high, but they were far larger number of
(04:00):
those that were very unprofitable, very little revenue that we're
seeing their stock prices being bid up, and so a
key difference there, but still worth noting that, Yeah, when
you look at the price you're paying for stocks compared
to the total revenue that those companies are generating, while
that revenue is far more profitable, it is an all
time high piece.
Speaker 2 (04:20):
From market Watch. Incomes rose and poverty fell last year.
So why do so many Americans feel tapped out? This
on a new look from the Census bure They do
an annual study on Americans incomes each year. It usually
comes out right around this time. It's called Income in
the United States. I mean, great title obviously twenty twenty
(04:41):
four is the part that I left off there. But Mike,
when asking this question, I don't think it's very hard
to get there in terms of Okay, median income went up,
and I went through the whole report, which it's not
too long. It's fifty eight pay but it's not like
(05:01):
overly dense. There's a lot of charts and things like
that there. And I think that the things that I
take away on this, median income went up by one
point three percent, which is fine. The pace of inflation
was steep in the last not steep steep, but you
know again, inflation was running too and a half three
(05:22):
percent somewhere in that ballpark, and in particular for those
that are lower income earners. When you look at you know,
lower income households, Hey, if you were struggling before, it's
not like there was anything last year that suddenly gave
you a huge leg up. Right, you still are, you know,
struggling pretty significantly. And this is all assuming that we're
(05:44):
actually you know, getting accurate reads on inflation and things
like that, which does not affect every group the same way.
You have you know, lower income groups. Hey, we just
saw food prices take a jump last month, A bigger
portion of you know, lower income households spent and goes
to food than if you're making you know, one hundred
and fifty thousand dollars a year. And so I don't
(06:05):
think it's surprising that a lot of people are saying
they're tapped out, even though incomes did go up a
little bit last year.
Speaker 3 (06:11):
Yeah, and it goes back to really a theme that
we've been covering now for a good three years, which
is those with high incomes and the typically own big assets,
whether it's their home, their four oh one K, or
you know, other types of similar assets, and those ASSEID
prices have gone way up over the course of the
last two and a half years. If you don't own assets,
(06:36):
if you rent, and you make below the median national income,
you're seeing prices you know, continue to go up, your
wages just barely covering the increases and not seeing any
of the benefit of home values in four oh one
K values going up. And so, yeah, I guess I'm
with you, Chuck. I'm not terribly surprised that when you
(06:58):
pull Americans about how they're feeling about things, it's not
overly optimistic.
Speaker 2 (07:02):
Other things like if you look at groups that are
not doing well, and the Census Bureau does a great
job of breaking this out with the different demographic breakdowns
that they give here. So here's some different groups that
aren't doing well last year. And again these are I
just want to clarify, all of these are in inflation
adjusted terms. So's it's all in twenty twenty four dollars,
(07:24):
it's already been adjusted in terms of inflation. If you
look at households where a black household member is the
primary household member, their incomes last year fell by three
point three percent. Kind of hard to say that you're
doing well if that's the case.
Speaker 3 (07:39):
Correct.
Speaker 2 (07:40):
Yeah, If you look at households where the primary household
member is age fifty five to sixty four, which is
twenty three million households, their incomes fell by one point
five percent. If you look at households in the Midwest,
twenty eight million households, and look, there's overlap in this.
So I don't want you to think that this is
(08:00):
gonna end up being everyone, but Midwest saw incomes fall
by one point one percent. If you look at residences
that are outside metropolitan statistical areas, so rural residents, their
incomes fell by point six percent. If you look at
folks with no high school diploma, about nine to a
(08:21):
half million households have a head of household that fits
that category, their incomes fell by one point eight percent.
So you can very easily get to a point where
you say, hey, they're probably somewhere in the range when
you include overlap in this and that. Out of one
hundred and thirty two million households, there's probably a quarter
to a third of them that still saw their incomes
(08:43):
fall relative to the year prior. Right That's why a
lot like right there, like that group is saying, yeah,
things aren't good. There's another group that is in there saying, hey,
my income barely changed, and so they just they might
just feel worse because I made more, but it all
to paying for the same stuff anyways. And so I
don't think it's surprising that you get, you know, forty
(09:06):
to fifty percent of people saying, yeah, like this is
really hard right now.
Speaker 3 (09:10):
It's because it is. Yeah. They again, these these numbers,
at least they used median here when looking at these details.
But even when you look at that, it is tough
for a large portion of people especially over the course
of you know, when you look at this over the
course of four years, with the disastrous inflation of twenty
(09:31):
twenty two, you put together a pretty compelling story of
American family struggling, which is all is especially concerning because
it's happening in a time with four point three percent unemployment.
You imagine where that goes if we're sitting at five
percent unemployment instead, and then you have a really tough
series of problems, which is why the FED is so
(09:51):
focused on it.
Speaker 2 (09:52):
Correct exactly. So let's take a quick break here. When
we return, I want to touch on what is going
on in the housing market as mortgage rates have come down,
and we also do a little bit of trivia right
after this.
Speaker 1 (10:09):
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Speaker 4 (10:48):
All right, time for trivia. You're in the Financial Exchange
on this day. Back in nineteen seventy seven, the Atari
twenty six hundred was released in North America, revolutionizing video
game industry. Atari sold thirty million units of the twenty
six hundred, which was a record until the Nintendo Entertainment
(11:10):
System came onto the scene in the mid nineteen eighties.
So our trivia question today is simply, what is the
best selling video game system of all time? Once again?
What is the best selling video game system of all time?
Speaker 3 (11:28):
Be the fourth.
Speaker 4 (11:29):
Person today to text us at six one seven three
six to two thirteen eighty five with the correct answer
you do want a Financial Exchange Show T shirt?
Speaker 3 (11:38):
Once again.
Speaker 4 (11:38):
The fourth correct response to text us to the number
six one seven three six to two thirteen eighty five
will win that T shirt. C complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (11:51):
Mike, what we've seen in the last several weeks is
the national average for a thirty year fixed rate mortgage
has gone from you know, throughout most of August hanging
out around six point five six point six percent, now
down to around six and a quarter percent six point
twenty nine is where we currently stand today. And if
(12:13):
you go back just a little bit earlier in the summer,
you know, mortgage rates were kicking around, you know, anywhere
in the six seven to five range for much of
June July, and so you got you know, anywhere depending
on when you were looking, from a quarter percent to
a half percent improvement in mortgage rates. And so unsurprisingly,
what we saw yesterday was the NBA Mortgage Applications Index
(12:38):
was up nine point two percent for the week. Most
of this uh concentrated in refinance activity, but a jump
in purchases as well that we saw, and so I
think that when you look at this, it clearly is
having some impact on the margins here. The question is
is it big enough and where are those you know,
(12:59):
marginal sales and applications taking place, simply because we are
in an environment where home prices have been sliding over
the course of the summer, and does this do.
Speaker 3 (13:09):
Enough to stem the tide?
Speaker 2 (13:10):
There The other question for the you know, to continue
this incredibly long run on sentence is one of the
things we've seen in the last couple of weeks has
been a bunch of sellers pulling properties off market because
they can't get the prices that they want, rather than
moving through with price cuts. Do lower rates draw some
(13:32):
of that inventory back out, and does that extra inventory
then put more downward pressure on prices as it.
Speaker 3 (13:38):
Returns to the market. Yeah, all interesting questions. I mean,
the refinance activity is going to be real, and I
believe that will trend upwards.
Speaker 2 (13:46):
And it's good, it's great for the economy.
Speaker 3 (13:48):
It's it's good for the economy. It's not. It's not
a purchase, right, Let's separate the two. Like, yes, it
frees up some cash flow for the homeowner. They can
can spend some of that discretionary income elsewhere. But obviously,
when you talk about somebody buying a new condo in Florida,
the amount of economic activity that occurs from something like
(14:09):
that compared to the refi are very different, and the
not a problem. But the problem with the timing here
really is we're heading into a very short housing season here. Basically,
if you don't have your home sold by Thanksgiving, then
it ain't gonna sell until next spring in a lot
of cases, and so you know, do we have time
(14:30):
to see any sort of uptick in sales new buyers
re entering the market with these mortgage rates. It is
a pretty serious drop in rates here, and you know,
increases buying power. But will it stick around until next spring?
That's if we're going to see an uptick in activity,
That's when I would expect it to come.
Speaker 2 (14:48):
Yeah, So it's I think that ultimately it's can rates
stay in this range or can they get back to
this range you know, five six months from now right right?
Like that's that it doesn't really matter a ton If
interest rates are low Christmas week, no one buys a house,
(15:11):
then you know, it's like the volume of sales is
less than half of what it is during the peak
spring period. So can you get rates in this range
somewhere in you know, starting Super Bowl first week in February,
get them in this range first week in February through
(15:31):
July fourth, You got the potential to cook a little bit.
There still is a lot of inventory that needs to
burn off, and there could be more that comes on
next year as well. So these are things that you know,
just just that I think about as we look at
where the housing market could be. But lower rates obviously
going to provide some support to home prices and so
(15:52):
potentially good news for sellers and buyers to being able
to match up a little bit more easily. Then yeah, yeah,
let's see we want to talk about reverse stock splits,
not particularly do you, No, let's skip that one. Do
We want to think about how many people think retirement
will take a miracle.
Speaker 3 (16:11):
Fewer apparently think that will take a marri miracle. So
is this the least surprising story of twenty twenty five? Hey,
stock market's an all time high, Therefore fewer people think
they're going to be devastated in retirement.
Speaker 2 (16:23):
Yes, stocks have done north of twenty percent the last
two years and more than you know, north of ten
percent so far this year, and so yeah, it's not
surprising that if you have a few good years of returns,
people are gonna feel more optimistic about their ability to retire.
Speaker 3 (16:41):
That said, the interesting thing that you mentioned earlier, Chuck,
during the last segment on the labor market that what
did you say, fifty five to sixty four cohort in
terms of their incomes moving downwards. Yeah, that's well, one
something that I think everyone has seen and experienced, right,
how many people know somebody, a family, men member, a
friend who has lost their job at that stage of
(17:04):
the game, and I had had a very difficult time
finding new employment because of agism like that. That is
something that I see very very frequently, So not entirely surprising,
but I guess effect it would certainly affect my comfortability
with retirement going well, if I lost my job at
(17:24):
fifty seven years old and had been planning on several
more years of employment.
Speaker 2 (17:28):
Sure, especially because it's two sided coin there. It's you
lose the income, but you also have more expenses because
now you've got to cover things like health insurance.
Speaker 3 (17:36):
And stuff like that while you're out of work.
Speaker 2 (17:38):
So it's yeah, these are some of the things that
are challenging, you know, kind of as you look at
at that question, there other things, just other pieces from
this survey from the Texas Americans overall expect to retire
at sixty four. Was there a survey that we covered
a couple of weeks ago that said Americans thought they
could retire at sixty two or am I making that up?
Speaker 3 (18:00):
I think the survey was that most said they wanted
to retire at sixty two, not that they thought they
would be able to financially retire at sixty two. Got it.
Speaker 2 (18:10):
Baby boomers who have not yet retired but plan to
do so at seventy. I'm just looking at the demo
for baby boomers and the oldest ones I'm sorry, the
youngest ones I believe go through nineteen sixty four, which
means they're sixty one right now. And so basically the
(18:31):
ones that are left or you know, the average age
is probably sixty five, sixty six, you know below, they're
not retired. And so yeah, they're basically saying like, yeah,
three four more years on average. Kind of gets you,
you know, into that range that that clicks, and that
kind of meshes with what we're seeing. Overall, all generations
expect their retirement to last an average of twenty two years.
(18:53):
So retire at sixty four, lived to eighty six. Life
expectancies aren't quite that good, No, they are not. Even
though I wonder what life expectancy at age sixty four is.
I'm pulling it up right now because remember it changes.
Speaker 3 (19:11):
In the US.
Speaker 2 (19:12):
It looks like men can live on average eighteen point
two more years women twenty point seven, So twenty two
is not too far off. Actually, yeah, that's not crazy
when you look at it. Just take a quick break.
When we return, we've got the trivia answer, We've got
Wall Street Watch, and we're talking bond yields.
Speaker 1 (19:40):
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 and
what's moving market so far today right here on the
Financial Exchange Radio Network.
Speaker 4 (20:01):
Well, markets are in rally mode as Walls Creed digests
a key inflation measure posted earlier this morning with a
consumer price index increase two point nine percent on an
annual basis, in line with expectations, yet hotter than July's
gain of two point seven percent. Jobless claims also came
in slightly above estimates. At the moment, the Dow is
(20:26):
up by one point three percent, or five hundred and
ninety two points, SMP five hundred is jumping eight tenths
of one percent higher of fifty three points, and the
Nasdaq is up seven tenths of one percent to one
hundred and fifty points higher. Russell two thousand is also
up one point three percent. Ten year Treasure reeled down
one basis point and is now at four point zero
(20:49):
one seven percent. In crude oil down nearly two percent,
lower training as sixty two dollars in fifty five cents
a barrel, well after its best day since nineteen ninety
two on the heels of its optimistic AI revenue projections.
Oracle shares are slightly retreating from yesterday's thirty six percent surge,
down just over two percent today. Separately, Wall Street Journal
(21:11):
reported is struck a three hundred billion dollar cloud deal
with open Ai. Meanwhile, recent memestock open Door is now
soaring sixty four percent after the online housing platform named
a top Shopify executive as its next CEO. Elsewhere after
its three percent pullback yesterday following its underwhelming product event.
(21:31):
Apple shares are up about eight tenths of one percent
today after a successful IPO yesterday where shares jumped fourteen
percent in its debut. Shares in buy now, pay later
platform Klarna are now down about half a percent today.
Kroger up about two percent after the grocery store chain
posted mixed quarterly results where it beat earnings expectations but
(21:55):
fell short of revenue estimates and Chewy up two percent
today following its sixteen percent plunge yesterday after the online
pet products retailer reported a steep year over year drop
in earnings. Deutsche Bank, however, upgraded the stock, saying the
company continues to drive meaningful industry share gains and season
acceleration in revenue growth next year. I'm Tucker Silva and
(22:19):
that is Wall Street Watch. And in the previous segment,
we asked you the trivia question, what is the best
selling video game system of all time? That would be
PlayStation two. Sony sold over one hundred and sixty million
PS twos, a record that stands twenty five years later.
Mark from Haveral Mass is our winner today, taking home
(22:40):
a Financial Exchange Show T shirt. Congrats to Mark, and
we played trivia every day here on the Financial Exchange.
See complete contest rules at Financial Exchange Show dot com.
Speaker 3 (22:49):
I had to look up what that thing looked like.
I remember owning one. I remember that. Yeah.
Speaker 2 (22:53):
I had to go exactly what it looks like and
I didn't even own one. Yeah, yeah, Okay, do you
know what the best selling game for the PS two was?
Speaker 4 (23:01):
I would have to guess a resident Evil or Metal
Gift Solid something like that.
Speaker 3 (23:07):
Mental Gear Solid two is number four one of the
Grand theft Autos correct any idea which one? Vice? City No?
Speaker 2 (23:16):
Three three four San Andreas, San Andreas, San Andres seventeen
point three three million units sold of that for the
PS two. The next two are going to surprise you,
quite honestly, just because this isn't the world we live
in anymore. The next two biggest selling games for the
PS two were Grand Tarismo three and four.
Speaker 4 (23:38):
Oh those are sneaky big for Sony.
Speaker 3 (23:40):
Yeah they were.
Speaker 2 (23:41):
But when's the last time a racing game has been
that big?
Speaker 3 (23:44):
Yeah?
Speaker 2 (23:44):
Like it feels like it's it's been a while, right, Yeah,
so that's beyond interesting.
Speaker 3 (23:50):
We're all a decade removed from the gaming systems lifestyle,
so I don't know what's cool. I miss it dearly.
Speaker 2 (24:00):
It might be nice, honestly, the last the last gaming
console I bought was in college, So like we're talking
like twenty five years. Yeah, you know, it's it's it's
been a while. Yeah, but what are you gonna do? Yeah,
time March is on quarter century. You mean, don't say that.
I like measuring things that way. Don't say that let's
(24:20):
talk a little bit about this piece from Barons. Bond
yields are falling where retirees can still find five percent yields,
And then it's got a picture of a suitcase with
a whole bunch of international stickers on at Michael, So.
Speaker 3 (24:32):
Are they saying buy Brazilian bonds? To do that? Carry
cash into suitcase?
Speaker 2 (24:38):
I don't like. What what does one do when you
can't find five percent yields anymore?
Speaker 3 (24:43):
Yeah? Well, I'll tell you historically what people do, and
sometimes to somewhat disastrous results, is they tend to go
down the credit scale when searching for higher yields in
a lower interest rate environment. For a lot of the
twenty tens, I haven't seen as much of it recently,
(25:04):
but I distinctly remember meeting with somebody, don't remember exactly
what year, but somewhere in the twenty tens, and they
were kind of unaware that the entirety of their portfolio
was invested in junk rated individual bonds and what sort
of risks those actually represented to them. But that is
(25:24):
very often times when you see narrowing spreads and the
inability to go get that four or five percent CD anymore.
A lot of folks do start searching around in terms
of what those alternatives are, and very often, at least
in my experience, owning things without fully understanding what it
is that they are owning.
Speaker 2 (25:43):
Yeah, even things that might seem you know, stable. You
might be like, oh, like I found a bond for
my local utility company, but you don't realize that the
covenants have it being tied to you know, a certain
plant being open and that plant is in the process
of closing, or.
Speaker 3 (26:00):
Very frequently you know those same bonds being callable by
the company or the municipality or the government agency if
interest rates moved down, and that there's a lot of
that that's happened recently too. You go get this six
percent bond and then three months later they call it
back from you, and you're in a pretty rough spot.
The more complicated stuff that I see, though, Chuck, like
(26:23):
what I get worried about. They've covered how there are
now more ETFs than individual stocks out there. There are many, many,
many different types of funds that are purely dedicated to
generating a very high not necessarily interest rate, but dividend
or interest rate, and they oftentimes employ very complex strategies
(26:45):
sometimes using leverage and options that I hate to say,
you have to do your homework and actually read the
disclosure packets that they send on these things. But you
do have to do that if you're going to try
and search around for this type of thing. So yeah,
just word of warning. If we do see rates come
down and people start shopping around for those other types
(27:07):
of things, they are complicated.
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Speaker 2 (28:15):
We also got a little bit of breaking news. The
FTC announced a probe into OpenAI, alphabet, Meta Xai, and
Snap to understand how their AI chatbots potentially negatively affect
children and teenagers. This comes on the back of a
couple of stories that we've covered about the lax controls
(28:37):
and rules for what kind of content AI chatbots can
provide to children, and so this is something that I think,
quite honestly is it's tough to say long overdue, because
like these platforms haven't been around for that long, but
I think it is good to see the FTC taking
(28:58):
an interest in Gee, you know, meta chatbots be having
sexually explicit conversations with thirteen year olds. No, they shouldn't,
and maybe we should look into this al.
Speaker 3 (29:09):
Yeah, it seems like one that we can universally agree upon.
There Chuck to me. This though, does come back to like,
I would very much welcome some rules and regulations for
AI and how it interacts with children. To me, this
all falls into one big question which goes back to
the same What is the regulation that Facebook, Google, all
(29:31):
these companies have relied upon in terms of protecting themselves
from lawsuits. It's do you have any idea what I'm
referring to the it's the piece that basically provides them
indemnity from somebody posts Section two thirty two. Yeah, Section
two thirty two, which effectively makes them not responsible for me.
Realize you were looking for a legislation.
Speaker 2 (29:51):
I thought you were just gonna say, like, oh, they're
big and they throw their weight around.
Speaker 3 (29:54):
Now the section two thirty two specifically, I'm curious does
that apply to AI?
Speaker 2 (29:59):
Actually thirty two that's a section related to tariffs. Hang on,
it's it's something. I mean, I'll keep talking, I'll find it.
There's a lot of sections out there.
Speaker 3 (30:08):
So effectively, what it provides, though, is if somebody posts
something vile and dangerous on Facebook, Facebook's not responsible for
policing it. They oftentimes do because they want to not
freak people out, and you know, make section two thirty
section thirty two. Thank you, but they're not legally liable
for it. My question is does the same thing apply
(30:29):
to an AI chatbot that you create. Uh, the answer
should be no, it should be, but they're certainly behaving
as though it does.
Speaker 2 (30:37):
And if it isn't, no, then the law needs to
be amended because like someone created, you can't just be like, oh,
like it's it's this chatbot.
Speaker 3 (30:46):
Well who built the chatbot? Well, we did. Who hosts
the chatbot? We did? Then who's responsible? Not us? Yeah?
That that is my question. And they will make the
argument that, well, the content was created by the user.
We just created the device that they can use to
create the content. It's no different than somebody. But that
to me is an incredibly important important question to answer
(31:06):
it and I would agree with you if if it
is not adequate to find them liable for this sort
of thing, that it needs to be changed because this
is not the same as Facebook's, you know, lack of
liability for something else.
Speaker 2 (31:19):
Just take a quick break here. When we return, we'll
do a little bit of stack root left.
Speaker 1 (31:24):
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Speaker 3 (32:33):
Mike, what do you got for me for stack Roulette
online travel platforms? Getting afraid of artificial intelligence? And this
one doesn't make a ton of sense to me, But
I think maybe I use these platforms differently than other
people do. Here's the concern Booking, dot Com, Expeedy, Kayak,
all of these companies that are probably all owned by
the same company, I'm guessing, but they all rely upon
(32:57):
you searching on their platforms in order to generate effectively
commissions from the airlines and hotel companies when you book
through their sites. Sure, if you can quickly tap into
chat GPT that you want flights on these specific dates
and a hotel on these specific dates as well, and
it pulls it all up and makes it easy for
(33:19):
you to click through and book directly, then they're worried
about their business model. I don't know that that's how
younger generations book their traveled though. I mean for me personally,
I don't know how you do it, Chuck. I will
go search the flight on something like Google Flights, and
then I will oftentimes try to book it on something
like Expedia because they provide rewards points that I can
(33:41):
then use on other things. But otherwise I don't use
any of these third party places to begin with as
a starting point for my search. I suppose on hotels
it's a little bit different. I do use it there,
but I'm just not I guess I'm not convinced that
AI agents are agen you in threat to this business
(34:01):
model entirely, but maybe everybody else is using it differently
than me.
Speaker 2 (34:04):
No, And I guess even on the agent side of things,
would you really enable it to go and say yes,
I just wanted to like go and book stuff or
does it kind of do the legwork that you did,
which is, hey, find me, you know, selections because I
want to do X, Y and Z and fly to
this place and stay you know for this many days
(34:25):
in this location, and then you go and you book
the stuff yourself.
Speaker 3 (34:29):
Anyways, right, But I guess here here's where it does
dramatically reshape their businesses. If it does point you directly
to the airline and directly to the hotel instead, then yeah,
those business models are those business models are out and they're
gonna have to find something else that makes it compelling
for me. Again, I have a credit card through one
of these companies. I get rewards points. I what's the
(34:52):
credit card number? Yeah, hold on, I'll give me my
Social two six.
Speaker 4 (34:55):
When does it expire.
Speaker 3 (34:58):
On the back here' zip code? Please, Mike? But yeah,
I mean if it does cut through that, then just
like search it is a genuine threat to the business.
I'm just I don't know, I'm a little bit uncertain
that that's going to be the case. And by the way,
using having used AI to plan parts of my most
recent vacation, made a lot of mistakes, especially when trying
(35:21):
to suggest hiking ideas. Where did it want to hike? Well,
we were doing hikes, but it just kind of invented
trails that didn't really exist, Like, oh, you can get
from here to here, but if you actually go, you know,
take a look at that, like, oh, yeah, they just
want me to ascend over a mountain that doesn't have
a trail, So that's probably not going to work terribly.
Speaker 2 (35:42):
Well, you didn't bring your crampons and ice picks.
Speaker 3 (35:45):
No, we did not pack our ice picks. Sorry to
hear that. Yeah, what kind of vacation was this? Yeah, yeah,
slacker vacation.
Speaker 2 (35:54):
Seriously, I want to talk about SEPTA good because if
you're not familiar with them.
Speaker 3 (36:01):
It's not actually related.
Speaker 2 (36:03):
Doesn't step to sound like it should be like the
sewer agency for a city.
Speaker 3 (36:07):
Yeah.
Speaker 2 (36:09):
In fact, it is the Southern Pennsylvania Transportation Authority, the
fifth largest transit agency in the US.
Speaker 3 (36:15):
It is basically.
Speaker 2 (36:16):
Phillis version of you know whatever your city runs for buses, trains,
and subways. And apparently they had a funding crunch and
so they cut one of the lines that goes to
the Eagles stadium. FanDuel stepped in and said, Hey, we're
gonna pay eighty thousand dollars to restore service on game
days so Eagles fans can get to and from the
(36:38):
stadium using public.
Speaker 3 (36:39):
Transit seems like some cheap advertising. It sure does.
Speaker 2 (36:45):
And I'm trying to think of the different ways that
this is problematic.
Speaker 3 (36:54):
Oh, this is to me the least problematic thing that
gambling companies are doing these days.
Speaker 2 (36:58):
No, it is, but it's like, it's the idea that, hey,
we've so devalued public transportation now that the only way
to run the lines we want are for a gambling
company that is sucking money away from the people on
that train on a daily basis that they come in
and they fund the thing.
Speaker 3 (37:19):
So I know that this is a different scale, chuck,
But that's been the premise of the Massachusetts state lottery
and every other state lottery for forty some odd years now,
and this is just and we can talk about the
problems that you have with those too. Yeah. I mean
Massachusetts has the worst or the highest average lottery money
(37:42):
spent for any state in the country. We got to
spend money to make money, which is problem. Not what
that means, but yeah, I just see this as a
continuation of that. But I would agree with you that
it is a much bigger problem than it was thirty
years ago. You know.
Speaker 2 (37:56):
And I'm not saying that you need to have like
the only like advertise think you should allow our sponsorships
to be like wholesome, like with all of our things.
But it's just like, man, the only reason this line
is running is because we allow for you to place
a bunch of bets on your phone. Now, yep, I
felt better about things in my life. Let's take a
quick break here for the entire rest of the day.
(38:18):
Back at 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
or anyone else. Investments can lose money. This program does
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donation today. This is the Financial Exchange with Chuck Zada
(01:06):
and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker with you, and we've got another
broad based rally taking place today, taking stocks to new
all time highs. On the S and P five hundred,
which currently sits at sixty five seventy seven, up another.
Speaker 3 (01:26):
Forty five points today.
Speaker 2 (01:28):
Uh. The NASDAK also finally notching another all time high.
It had been unable to even with the at least
on an intra day basis, it had been unable to
over the last couple of days, but finally has gotten
there now. And so the NASDAK up point six percent
one hundred and thirty one points. And last, but certainly
not least, the Dow Jones Industrial Average is up five
(01:51):
hundred and thirty seven points about one point two percent.
So again all three major US indices moving on up
despite a hotter than antiseiy've paided headline inflation report and
inline core inflation data, you've actually got bonds moving down
for yield's day, the Tenure Treasury right now down one
point three basis points to four point h one nine percent.
(02:13):
This because we got a worse than expected weekly jobbless
claims report for initial jobbles claims, which moved up to
two hundred and sixty three thousand from two hundred and
thirty six thousand in the prior week, and so markets
acting a little bit nervous and skittish on that side
of things right now. When we take a look at commodities,
(02:37):
we've got oil down a dollar fifteen a barrel to
sixty two to fifty two, and we've got gold down
fourteen sixty one ounce to thirty six sixty seven. And
those are the major moves taking place inside US markets.
State Mike, anything you want to add there, I.
Speaker 3 (02:54):
Just wanted to contextualize one thing that we've It's been
getting a fair bit of price press coverage, not price coverage,
which is where the S and P sits in terms
of its valuation, and it is true that from a
number of different metrics, it is the highest that it
has ever been. Specifically, the one that people have been
(03:16):
looking at is that price to sales ratio, which looks at, hey,
what is the price of the S and P five hundred
compared to the gross sales of the businesses that comprise it.
The piece that has not hit those same all times
highs is the price to earnings ratio that is still
pretty well below where we were in the peaks of
the dot com bubble and really speaks to one main
(03:40):
piece of information here, which is that the companies today
that are getting bid up are far more profitable than
they were than those that were during the dot com bubble.
It does not mean that there weren't companies that were.
There are plenty of companies that were very profitable back
in the late nineties that we're also seeing their stock
prices go high, but they were far larger number of
(04:00):
those that were very unprofitable, very little revenue that we're
seeing their stock prices being bid up, and so a
key difference there, but still worth noting that, Yeah, when
you look at the price you're paying for stocks compared
to the total revenue that those companies are generating, while
that revenue is far more profitable, it is an all
time high piece.
Speaker 2 (04:20):
From market Watch. Incomes rose and poverty fell last year.
So why do so many Americans feel tapped out? This
on a new look from the Census bure They do
an annual study on Americans incomes each year. It usually
comes out right around this time. It's called Income in
the United States. I mean, great title obviously twenty twenty
(04:41):
four is the part that I left off there. But Mike,
when asking this question, I don't think it's very hard
to get there in terms of Okay, median income went up,
and I went through the whole report, which it's not
too long. It's fifty eight pay but it's not like
(05:01):
overly dense. There's a lot of charts and things like
that there. And I think that the things that I
take away on this, median income went up by one
point three percent, which is fine. The pace of inflation
was steep in the last not steep steep, but you
know again, inflation was running too and a half three
(05:22):
percent somewhere in that ballpark, and in particular for those
that are lower income earners. When you look at you know,
lower income households, Hey, if you were struggling before, it's
not like there was anything last year that suddenly gave
you a huge leg up. Right, you still are, you know,
struggling pretty significantly. And this is all assuming that we're
(05:44):
actually you know, getting accurate reads on inflation and things
like that, which does not affect every group the same way.
You have you know, lower income groups. Hey, we just
saw food prices take a jump last month, A bigger
portion of you know, lower income households spent and goes
to food than if you're making you know, one hundred
and fifty thousand dollars a year. And so I don't
(06:05):
think it's surprising that a lot of people are saying
they're tapped out, even though incomes did go up a
little bit last year.
Speaker 3 (06:11):
Yeah, and it goes back to really a theme that
we've been covering now for a good three years, which
is those with high incomes and the typically own big assets,
whether it's their home, their four oh one K, or
you know, other types of similar assets, and those ASSEID
prices have gone way up over the course of the
last two and a half years. If you don't own assets,
(06:36):
if you rent, and you make below the median national income,
you're seeing prices you know, continue to go up, your
wages just barely covering the increases and not seeing any
of the benefit of home values in four oh one
K values going up. And so, yeah, I guess I'm
with you, Chuck. I'm not terribly surprised that when you
(06:58):
pull Americans about how they're feeling about things, it's not
overly optimistic.
Speaker 2 (07:02):
Other things like if you look at groups that are
not doing well, and the Census Bureau does a great
job of breaking this out with the different demographic breakdowns
that they give here. So here's some different groups that
aren't doing well last year. And again these are I
just want to clarify, all of these are in inflation
adjusted terms. So's it's all in twenty twenty four dollars,
(07:24):
it's already been adjusted in terms of inflation. If you
look at households where a black household member is the
primary household member, their incomes last year fell by three
point three percent. Kind of hard to say that you're
doing well if that's the case.
Speaker 3 (07:39):
Correct.
Speaker 2 (07:40):
Yeah, If you look at households where the primary household
member is age fifty five to sixty four, which is
twenty three million households, their incomes fell by one point
five percent. If you look at households in the Midwest,
twenty eight million households, and look, there's overlap in this.
So I don't want you to think that this is
(08:00):
gonna end up being everyone, but Midwest saw incomes fall
by one point one percent. If you look at residences
that are outside metropolitan statistical areas, so rural residents, their
incomes fell by point six percent. If you look at
folks with no high school diploma, about nine to a
(08:21):
half million households have a head of household that fits
that category, their incomes fell by one point eight percent.
So you can very easily get to a point where
you say, hey, they're probably somewhere in the range when
you include overlap in this and that. Out of one
hundred and thirty two million households, there's probably a quarter
to a third of them that still saw their incomes
(08:43):
fall relative to the year prior. Right That's why a
lot like right there, like that group is saying, yeah,
things aren't good. There's another group that is in there saying, hey,
my income barely changed, and so they just they might
just feel worse because I made more, but it all
to paying for the same stuff anyways. And so I
don't think it's surprising that you get, you know, forty
(09:06):
to fifty percent of people saying, yeah, like this is
really hard right now.
Speaker 3 (09:10):
It's because it is. Yeah. They again, these these numbers,
at least they used median here when looking at these details.
But even when you look at that, it is tough
for a large portion of people especially over the course
of you know, when you look at this over the
course of four years, with the disastrous inflation of twenty
(09:31):
twenty two, you put together a pretty compelling story of
American family struggling, which is all is especially concerning because
it's happening in a time with four point three percent unemployment.
You imagine where that goes if we're sitting at five
percent unemployment instead, and then you have a really tough
series of problems, which is why the FED is so
(09:51):
focused on it.
Speaker 2 (09:52):
Correct exactly. So let's take a quick break here. When
we return, I want to touch on what is going
on in the housing market as mortgage rates have come down,
and we also do a little bit of trivia right
after this.
Speaker 1 (10:09):
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Speaker 4 (10:48):
All right, time for trivia. You're in the Financial Exchange
on this day. Back in nineteen seventy seven, the Atari
twenty six hundred was released in North America, revolutionizing video
game industry. Atari sold thirty million units of the twenty
six hundred, which was a record until the Nintendo Entertainment
(11:10):
System came onto the scene in the mid nineteen eighties.
So our trivia question today is simply, what is the
best selling video game system of all time? Once again?
What is the best selling video game system of all time?
Speaker 3 (11:28):
Be the fourth.
Speaker 4 (11:29):
Person today to text us at six one seven three
six to two thirteen eighty five with the correct answer
you do want a Financial Exchange Show T shirt?
Speaker 3 (11:38):
Once again.
Speaker 4 (11:38):
The fourth correct response to text us to the number
six one seven three six to two thirteen eighty five
will win that T shirt. C complete contest rules at
Financial Exchange Show dot com.
Speaker 2 (11:51):
Mike, what we've seen in the last several weeks is
the national average for a thirty year fixed rate mortgage
has gone from you know, throughout most of August hanging
out around six point five six point six percent, now
down to around six and a quarter percent six point
twenty nine is where we currently stand today. And if
(12:13):
you go back just a little bit earlier in the summer,
you know, mortgage rates were kicking around, you know, anywhere
in the six seven to five range for much of
June July, and so you got you know, anywhere depending
on when you were looking, from a quarter percent to
a half percent improvement in mortgage rates. And so unsurprisingly,
what we saw yesterday was the NBA Mortgage Applications Index
(12:38):
was up nine point two percent for the week. Most
of this uh concentrated in refinance activity, but a jump
in purchases as well that we saw, and so I
think that when you look at this, it clearly is
having some impact on the margins here. The question is
is it big enough and where are those you know,
(12:59):
marginal sales and applications taking place, simply because we are
in an environment where home prices have been sliding over
the course of the summer, and does this do.
Speaker 3 (13:09):
Enough to stem the tide?
Speaker 2 (13:10):
There The other question for the you know, to continue
this incredibly long run on sentence is one of the
things we've seen in the last couple of weeks has
been a bunch of sellers pulling properties off market because
they can't get the prices that they want, rather than
moving through with price cuts. Do lower rates draw some
(13:32):
of that inventory back out, and does that extra inventory
then put more downward pressure on prices as it.
Speaker 3 (13:38):
Returns to the market. Yeah, all interesting questions. I mean,
the refinance activity is going to be real, and I
believe that will trend upwards.
Speaker 2 (13:46):
And it's good, it's great for the economy.
Speaker 3 (13:48):
It's it's good for the economy. It's not. It's not
a purchase, right, Let's separate the two. Like, yes, it
frees up some cash flow for the homeowner. They can
can spend some of that discretionary income elsewhere. But obviously,
when you talk about somebody buying a new condo in Florida,
the amount of economic activity that occurs from something like
(14:09):
that compared to the refi are very different, and the
not a problem. But the problem with the timing here
really is we're heading into a very short housing season here. Basically,
if you don't have your home sold by Thanksgiving, then
it ain't gonna sell until next spring in a lot
of cases, and so you know, do we have time
(14:30):
to see any sort of uptick in sales new buyers
re entering the market with these mortgage rates. It is
a pretty serious drop in rates here, and you know,
increases buying power. But will it stick around until next spring?
That's if we're going to see an uptick in activity,
That's when I would expect it to come.
Speaker 2 (14:48):
Yeah, So it's I think that ultimately it's can rates
stay in this range or can they get back to
this range you know, five six months from now right right?
Like that's that it doesn't really matter a ton If
interest rates are low Christmas week, no one buys a house,
(15:11):
then you know, it's like the volume of sales is
less than half of what it is during the peak
spring period. So can you get rates in this range
somewhere in you know, starting Super Bowl first week in February,
get them in this range first week in February through
(15:31):
July fourth, You got the potential to cook a little bit.
There still is a lot of inventory that needs to
burn off, and there could be more that comes on
next year as well. So these are things that you know,
just just that I think about as we look at
where the housing market could be. But lower rates obviously
going to provide some support to home prices and so
(15:52):
potentially good news for sellers and buyers to being able
to match up a little bit more easily. Then yeah, yeah,
let's see we want to talk about reverse stock splits,
not particularly do you, No, let's skip that one. Do
We want to think about how many people think retirement
will take a miracle.
Speaker 3 (16:11):
Fewer apparently think that will take a marri miracle. So
is this the least surprising story of twenty twenty five? Hey,
stock market's an all time high, Therefore fewer people think
they're going to be devastated in retirement.
Speaker 2 (16:23):
Yes, stocks have done north of twenty percent the last
two years and more than you know, north of ten
percent so far this year, and so yeah, it's not
surprising that if you have a few good years of returns,
people are gonna feel more optimistic about their ability to retire.
Speaker 3 (16:41):
That said, the interesting thing that you mentioned earlier, Chuck,
during the last segment on the labor market that what
did you say, fifty five to sixty four cohort in
terms of their incomes moving downwards. Yeah, that's well, one
something that I think everyone has seen and experienced, right,
how many people know somebody, a family, men member, a
friend who has lost their job at that stage of
(17:04):
the game, and I had had a very difficult time
finding new employment because of agism like that. That is
something that I see very very frequently, So not entirely surprising,
but I guess effect it would certainly affect my comfortability
with retirement going well, if I lost my job at
(17:24):
fifty seven years old and had been planning on several
more years of employment.
Speaker 2 (17:28):
Sure, especially because it's two sided coin there. It's you
lose the income, but you also have more expenses because
now you've got to cover things like health insurance.
Speaker 3 (17:36):
And stuff like that while you're out of work.
Speaker 2 (17:38):
So it's yeah, these are some of the things that
are challenging, you know, kind of as you look at
at that question, there other things, just other pieces from
this survey from the Texas Americans overall expect to retire
at sixty four. Was there a survey that we covered
a couple of weeks ago that said Americans thought they
could retire at sixty two or am I making that up?
Speaker 3 (18:00):
I think the survey was that most said they wanted
to retire at sixty two, not that they thought they
would be able to financially retire at sixty two. Got it.
Speaker 2 (18:10):
Baby boomers who have not yet retired but plan to
do so at seventy. I'm just looking at the demo
for baby boomers and the oldest ones I'm sorry, the
youngest ones I believe go through nineteen sixty four, which
means they're sixty one right now. And so basically the
(18:31):
ones that are left or you know, the average age
is probably sixty five, sixty six, you know below, they're
not retired. And so yeah, they're basically saying like, yeah,
three four more years on average. Kind of gets you,
you know, into that range that that clicks, and that
kind of meshes with what we're seeing. Overall, all generations
expect their retirement to last an average of twenty two years.
(18:53):
So retire at sixty four, lived to eighty six. Life
expectancies aren't quite that good, No, they are not. Even
though I wonder what life expectancy at age sixty four is.
I'm pulling it up right now because remember it changes.
Speaker 3 (19:11):
In the US.
Speaker 2 (19:12):
It looks like men can live on average eighteen point
two more years women twenty point seven, So twenty two
is not too far off. Actually, yeah, that's not crazy
when you look at it. Just take a quick break.
When we return, we've got the trivia answer, We've got
Wall Street Watch, and we're talking bond yields.
Speaker 1 (19:40):
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 and
what's moving market so far today right here on the
Financial Exchange Radio Network.
Speaker 4 (20:01):
Well, markets are in rally mode as Walls Creed digests
a key inflation measure posted earlier this morning with a
consumer price index increase two point nine percent on an
annual basis, in line with expectations, yet hotter than July's
gain of two point seven percent. Jobless claims also came
in slightly above estimates. At the moment, the Dow is
(20:26):
up by one point three percent, or five hundred and
ninety two points, SMP five hundred is jumping eight tenths
of one percent higher of fifty three points, and the
Nasdaq is up seven tenths of one percent to one
hundred and fifty points higher. Russell two thousand is also
up one point three percent. Ten year Treasure reeled down
one basis point and is now at four point zero
(20:49):
one seven percent. In crude oil down nearly two percent,
lower training as sixty two dollars in fifty five cents
a barrel, well after its best day since nineteen ninety
two on the heels of its optimistic AI revenue projections.
Oracle shares are slightly retreating from yesterday's thirty six percent surge,
down just over two percent today. Separately, Wall Street Journal
(21:11):
reported is struck a three hundred billion dollar cloud deal
with open Ai. Meanwhile, recent memestock open Door is now
soaring sixty four percent after the online housing platform named
a top Shopify executive as its next CEO. Elsewhere after
its three percent pullback yesterday following its underwhelming product event.
(21:31):
Apple shares are up about eight tenths of one percent
today after a successful IPO yesterday where shares jumped fourteen
percent in its debut. Shares in buy now, pay later
platform Klarna are now down about half a percent today.
Kroger up about two percent after the grocery store chain
posted mixed quarterly results where it beat earnings expectations but
(21:55):
fell short of revenue estimates and Chewy up two percent
today following its sixteen percent plunge yesterday after the online
pet products retailer reported a steep year over year drop
in earnings. Deutsche Bank, however, upgraded the stock, saying the
company continues to drive meaningful industry share gains and season
acceleration in revenue growth next year. I'm Tucker Silva and
(22:19):
that is Wall Street Watch. And in the previous segment,
we asked you the trivia question, what is the best
selling video game system of all time? That would be
PlayStation two. Sony sold over one hundred and sixty million
PS twos, a record that stands twenty five years later.
Mark from Haveral Mass is our winner today, taking home
(22:40):
a Financial Exchange Show T shirt. Congrats to Mark, and
we played trivia every day here on the Financial Exchange.
See complete contest rules at Financial Exchange Show dot com.
Speaker 3 (22:49):
I had to look up what that thing looked like.
I remember owning one. I remember that. Yeah.
Speaker 2 (22:53):
I had to go exactly what it looks like and
I didn't even own one. Yeah, yeah, Okay, do you
know what the best selling game for the PS two was?
Speaker 4 (23:01):
I would have to guess a resident Evil or Metal
Gift Solid something like that.
Speaker 3 (23:07):
Mental Gear Solid two is number four one of the
Grand theft Autos correct any idea which one? Vice? City No?
Speaker 2 (23:16):
Three three four San Andreas, San Andreas, San Andres seventeen
point three three million units sold of that for the
PS two. The next two are going to surprise you,
quite honestly, just because this isn't the world we live
in anymore. The next two biggest selling games for the
PS two were Grand Tarismo three and four.
Speaker 4 (23:38):
Oh those are sneaky big for Sony.
Speaker 3 (23:40):
Yeah they were.
Speaker 2 (23:41):
But when's the last time a racing game has been
that big?
Speaker 3 (23:44):
Yeah?
Speaker 2 (23:44):
Like it feels like it's it's been a while, right, Yeah,
so that's beyond interesting.
Speaker 3 (23:50):
We're all a decade removed from the gaming systems lifestyle,
so I don't know what's cool. I miss it dearly.
Speaker 2 (24:00):
It might be nice, honestly, the last the last gaming
console I bought was in college, So like we're talking
like twenty five years. Yeah, you know, it's it's it's
been a while. Yeah, but what are you gonna do? Yeah,
time March is on quarter century. You mean, don't say that.
I like measuring things that way. Don't say that let's
(24:20):
talk a little bit about this piece from Barons. Bond
yields are falling where retirees can still find five percent yields,
And then it's got a picture of a suitcase with
a whole bunch of international stickers on at Michael, So.
Speaker 3 (24:32):
Are they saying buy Brazilian bonds? To do that? Carry
cash into suitcase?
Speaker 2 (24:38):
I don't like. What what does one do when you
can't find five percent yields anymore?
Speaker 3 (24:43):
Yeah? Well, I'll tell you historically what people do, and
sometimes to somewhat disastrous results, is they tend to go
down the credit scale when searching for higher yields in
a lower interest rate environment. For a lot of the
twenty tens, I haven't seen as much of it recently,
(25:04):
but I distinctly remember meeting with somebody, don't remember exactly
what year, but somewhere in the twenty tens, and they
were kind of unaware that the entirety of their portfolio
was invested in junk rated individual bonds and what sort
of risks those actually represented to them. But that is
(25:24):
very often times when you see narrowing spreads and the
inability to go get that four or five percent CD anymore.
A lot of folks do start searching around in terms
of what those alternatives are, and very often, at least
in my experience, owning things without fully understanding what it
is that they are owning.
Speaker 2 (25:43):
Yeah, even things that might seem you know, stable. You
might be like, oh, like I found a bond for
my local utility company, but you don't realize that the
covenants have it being tied to you know, a certain
plant being open and that plant is in the process
of closing, or.
Speaker 3 (26:00):
Very frequently you know those same bonds being callable by
the company or the municipality or the government agency if
interest rates moved down, and that there's a lot of
that that's happened recently too. You go get this six
percent bond and then three months later they call it
back from you, and you're in a pretty rough spot.
The more complicated stuff that I see, though, Chuck, like
(26:23):
what I get worried about. They've covered how there are
now more ETFs than individual stocks out there. There are many, many,
many different types of funds that are purely dedicated to
generating a very high not necessarily interest rate, but dividend
or interest rate, and they oftentimes employ very complex strategies
(26:45):
sometimes using leverage and options that I hate to say,
you have to do your homework and actually read the
disclosure packets that they send on these things. But you
do have to do that if you're going to try
and search around for this type of thing. So yeah,
just word of warning. If we do see rates come
down and people start shopping around for those other types
(27:07):
of things, they are complicated.
Speaker 4 (27:11):
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(27:32):
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(27:55):
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at visit USVII dot com. That's visit USVI dot com, Mike.
Speaker 2 (28:15):
We also got a little bit of breaking news. The
FTC announced a probe into OpenAI, alphabet, Meta Xai, and
Snap to understand how their AI chatbots potentially negatively affect
children and teenagers. This comes on the back of a
couple of stories that we've covered about the lax controls
(28:37):
and rules for what kind of content AI chatbots can
provide to children, and so this is something that I think,
quite honestly is it's tough to say long overdue, because
like these platforms haven't been around for that long, but
I think it is good to see the FTC taking
(28:58):
an interest in Gee, you know, meta chatbots be having
sexually explicit conversations with thirteen year olds. No, they shouldn't,
and maybe we should look into this al.
Speaker 3 (29:09):
Yeah, it seems like one that we can universally agree upon.
There Chuck to me. This though, does come back to like,
I would very much welcome some rules and regulations for
AI and how it interacts with children. To me, this
all falls into one big question which goes back to
the same What is the regulation that Facebook, Google, all
(29:31):
these companies have relied upon in terms of protecting themselves
from lawsuits. It's do you have any idea what I'm
referring to the it's the piece that basically provides them
indemnity from somebody posts Section two thirty two. Yeah, Section
two thirty two, which effectively makes them not responsible for me.
Realize you were looking for a legislation.
Speaker 2 (29:51):
I thought you were just gonna say, like, oh, they're
big and they throw their weight around.
Speaker 3 (29:54):
Now the section two thirty two specifically, I'm curious does
that apply to AI?
Speaker 2 (29:59):
Actually thirty two that's a section related to tariffs. Hang on,
it's it's something. I mean, I'll keep talking, I'll find it.
There's a lot of sections out there.
Speaker 3 (30:08):
So effectively, what it provides, though, is if somebody posts
something vile and dangerous on Facebook, Facebook's not responsible for
policing it. They oftentimes do because they want to not
freak people out, and you know, make section two thirty
section thirty two. Thank you, but they're not legally liable
for it. My question is does the same thing apply
(30:29):
to an AI chatbot that you create. Uh, the answer
should be no, it should be, but they're certainly behaving
as though it does.
Speaker 2 (30:37):
And if it isn't, no, then the law needs to
be amended because like someone created, you can't just be like, oh,
like it's it's this chatbot.
Speaker 3 (30:46):
Well who built the chatbot? Well, we did. Who hosts
the chatbot? We did? Then who's responsible? Not us? Yeah?
That that is my question. And they will make the
argument that, well, the content was created by the user.
We just created the device that they can use to
create the content. It's no different than somebody. But that
to me is an incredibly important important question to answer
(31:06):
it and I would agree with you if if it
is not adequate to find them liable for this sort
of thing, that it needs to be changed because this
is not the same as Facebook's, you know, lack of
liability for something else.
Speaker 2 (31:19):
Just take a quick break here. When we return, we'll
do a little bit of stack root left.
Speaker 1 (31:24):
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Stay informed about the latest from Wall Street, fiscal policy,
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(31:46):
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Face is the Financial Exchange Radio Network.
Speaker 4 (31:59):
This year's d V five k's less than three months
away and slaughts are filling up fast, so if you'd
like to participate, now's the time to register. The race
is Saturday, November eighth, that Castle Island and you can
visit DAV five k dot Boston to sign up or
join our team Team TFE. Your support helps fund free
(32:20):
rides to medical appointments for veterans in the nation's first
dav ledhousing initiative, providing homes for single veterans and veteran families.
Go to DAV five k dot Boston and register today.
Speaker 3 (32:33):
Mike, what do you got for me for stack Roulette
online travel platforms? Getting afraid of artificial intelligence? And this
one doesn't make a ton of sense to me, But
I think maybe I use these platforms differently than other
people do. Here's the concern Booking, dot Com, Expeedy, Kayak,
all of these companies that are probably all owned by
the same company, I'm guessing, but they all rely upon
(32:57):
you searching on their platforms in order to generate effectively
commissions from the airlines and hotel companies when you book
through their sites. Sure, if you can quickly tap into
chat GPT that you want flights on these specific dates
and a hotel on these specific dates as well, and
it pulls it all up and makes it easy for
(33:19):
you to click through and book directly, then they're worried
about their business model. I don't know that that's how
younger generations book their traveled though. I mean for me personally,
I don't know how you do it, Chuck. I will
go search the flight on something like Google Flights, and
then I will oftentimes try to book it on something
like Expedia because they provide rewards points that I can
(33:41):
then use on other things. But otherwise I don't use
any of these third party places to begin with as
a starting point for my search. I suppose on hotels
it's a little bit different. I do use it there,
but I'm just not I guess I'm not convinced that
AI agents are agen you in threat to this business
(34:01):
model entirely, but maybe everybody else is using it differently
than me.
Speaker 2 (34:04):
No, And I guess even on the agent side of things,
would you really enable it to go and say yes,
I just wanted to like go and book stuff or
does it kind of do the legwork that you did,
which is, hey, find me, you know, selections because I
want to do X, Y and Z and fly to
this place and stay you know for this many days
(34:25):
in this location, and then you go and you book
the stuff yourself.
Speaker 3 (34:29):
Anyways, right, But I guess here here's where it does
dramatically reshape their businesses. If it does point you directly
to the airline and directly to the hotel instead, then yeah,
those business models are those business models are out and they're
gonna have to find something else that makes it compelling
for me. Again, I have a credit card through one
of these companies. I get rewards points. I what's the
(34:52):
credit card number? Yeah, hold on, I'll give me my
Social two six.
Speaker 4 (34:55):
When does it expire.
Speaker 3 (34:58):
On the back here' zip code? Please, Mike? But yeah,
I mean if it does cut through that, then just
like search it is a genuine threat to the business.
I'm just I don't know, I'm a little bit uncertain
that that's going to be the case. And by the way,
using having used AI to plan parts of my most
recent vacation, made a lot of mistakes, especially when trying
(35:21):
to suggest hiking ideas. Where did it want to hike? Well,
we were doing hikes, but it just kind of invented
trails that didn't really exist, Like, oh, you can get
from here to here, but if you actually go, you know,
take a look at that, like, oh, yeah, they just
want me to ascend over a mountain that doesn't have
a trail, So that's probably not going to work terribly.
Speaker 2 (35:42):
Well, you didn't bring your crampons and ice picks.
Speaker 3 (35:45):
No, we did not pack our ice picks. Sorry to
hear that. Yeah, what kind of vacation was this? Yeah, yeah,
slacker vacation.
Speaker 2 (35:54):
Seriously, I want to talk about SEPTA good because if
you're not familiar with them.
Speaker 3 (36:01):
It's not actually related.
Speaker 2 (36:03):
Doesn't step to sound like it should be like the
sewer agency for a city.
Speaker 3 (36:07):
Yeah.
Speaker 2 (36:09):
In fact, it is the Southern Pennsylvania Transportation Authority, the
fifth largest transit agency in the US.
Speaker 3 (36:15):
It is basically.
Speaker 2 (36:16):
Phillis version of you know whatever your city runs for buses, trains,
and subways. And apparently they had a funding crunch and
so they cut one of the lines that goes to
the Eagles stadium. FanDuel stepped in and said, Hey, we're
gonna pay eighty thousand dollars to restore service on game
days so Eagles fans can get to and from the
(36:38):
stadium using public.
Speaker 3 (36:39):
Transit seems like some cheap advertising. It sure does.
Speaker 2 (36:45):
And I'm trying to think of the different ways that
this is problematic.
Speaker 3 (36:54):
Oh, this is to me the least problematic thing that
gambling companies are doing these days.
Speaker 2 (36:58):
No, it is, but it's like, it's the idea that, hey,
we've so devalued public transportation now that the only way
to run the lines we want are for a gambling
company that is sucking money away from the people on
that train on a daily basis that they come in
and they fund the thing.
Speaker 3 (37:19):
So I know that this is a different scale, chuck,
But that's been the premise of the Massachusetts state lottery
and every other state lottery for forty some odd years now,
and this is just and we can talk about the
problems that you have with those too. Yeah. I mean
Massachusetts has the worst or the highest average lottery money
(37:42):
spent for any state in the country. We got to
spend money to make money, which is problem. Not what
that means, but yeah, I just see this as a
continuation of that. But I would agree with you that
it is a much bigger problem than it was thirty
years ago. You know.
Speaker 2 (37:56):
And I'm not saying that you need to have like
the only like advertise think you should allow our sponsorships
to be like wholesome, like with all of our things.
But it's just like, man, the only reason this line
is running is because we allow for you to place
a bunch of bets on your phone. Now, yep, I
felt better about things in my life. Let's take a
quick break here for the entire rest of the day.
(38:18):
Back at tomorrow to finish up the week.
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