December 10, 2025 • 39 mins
Chuck Zodda and Paul Lane discuss China's access to powerful Nvidia chips comes at a 'critical moment.' China's DeepSeek uses banned Nvidia chips. Why the AI boom is not like the dot com boom. 53% of investors with RMDs for 2025 still haven't taken it. Instacart is finding themselves in hot water over same store pricing. Could SpaceX launch the highest IPO ever in 2026?
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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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the hosts, do not reflect the opinions of Armstrong Advisory
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(00:20):
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Armstrong and Money Matters Radio do not compensate each other
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Exchange with Chuck Zada and Paul Lane, your exclusive look
at business and financial news affecting your day, your city,
(00:43):
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donation today. This is the Financial Exchange with Chuck Zada
(01:06):
and Paul.
Speaker 2 (01:07):
Lane, Chuck, Paul Tucker with you kicking things off and
market it's not really doing a ton Prior to the
FED meeting. The S and P is down ten points,
about a tenth of a percent, A little bit less
than that, I'm sorry, a little more than that. Dal
(01:27):
Jones is up one hundred and three points, a little
less than a quarter percent. The Nasdaq is down about
half a percent, so you do have a little bit
of movement on that front, the vast majority of it. Again,
if you look kind of where it's coming from, Microsoft
off about three percent today, and video off about one
(01:48):
and a half and Broadcom off about one in a quarter.
So tech kind of dragging a little bit today. And
we're gonna be talking quite a bit about artificial intelligence
as uh. It'll actually be the first day that we've
ever talked about artificial intelligence on the Financial Exchange, so
that's kind of exciting for us. Tucker. We still do
(02:11):
not have any AI hosts for the show.
Speaker 1 (02:16):
We're working on it. Holidays are coming up, so.
Speaker 2 (02:18):
What do we do. We have names. I know Mark
Fandettai is one of the I.
Speaker 3 (02:25):
Don't know if you could do better than that. That's
that's a really good name, Chuck GPT. Yeahzi uh.
Speaker 2 (02:35):
Let's see what are the other major ones. We've got
perplexity out there? What about poulplexity? Yeah, I like poulplexity.
Speaker 1 (02:41):
Yep.
Speaker 2 (02:42):
Quote me on that, Mike Armstrong could be No, Mike
A I am Strong. No, that one sucks anyways, I
don't know. Yes, thank you, Mike, I Armstrong idiots. That's
that's about right. No, No, yeah, that's that's right, Mike.
(03:04):
I know. US tenure Treasury is down one point eight
basis points to four point one six eight percent. The
Dollar Index is down point one three percent to ninety
nine oh seven. Gold is off fourteen eighty announced to
forty two to twenty one and forty cents, and crude
oil West Text Intermediate down another forty eight cents a
barrel to fifty seven seventy seven, and the triple A
(03:28):
national average for gas prices continuing its little slide of
runey as well, that is off another half a cent
to two ninety four even, and so continuing to see
gas prices coming down, which is always fun, but in
particular heading into a busy period of driving that kicks
off in about you know, eight to ten days. So
(03:51):
it's nice let's talk a little bit about China. And
in video, we've got a couple different stories here. Yesterday
we cover the story that the Trump administration is authorizing
the export of in Vidia's H two hundred chip to China.
This had previously been not allowed. Still is not the
newest chips that they have, the Blackwell chips, but this
(04:14):
is the previous version the hoppers as they're referred to
in the biz. And so you got you know, full
powered hoppers that China can buy now. China basically came
out yesterday as again we're not really sure that we
want these anyways, which is why you get this news
failure where in videos down despite the announcements. But a
couple different stories that are out today, one from the
(04:36):
New York Times China's access to powerful in vidio chips
comes at a quote critical moment, and the other one
is China's deepseek uses banned in video chips for AI model,
according to a report from the Information So a couple
of things to talk about on this. The first is
that when we look at semiconductor export restrictions, the reason
(05:02):
why we've typically had them in place is because we
recognize that bad actors can use these chips in ways
that could be destructive for US national security concerns. I
think we all acknowledge this. I think we also acknowledge
that the Chinese government on occasion can be a bad actor. Sure,
(05:23):
so I think we understand why these you know, would
be in place. Historically. The issues that you run into
on the on the AI side of things specifically are
twofold in my opinion. The first is, even if you
do have these restrictions in place when it comes to China,
(05:43):
the fact that you've pretty much allowed the entire Middle
East to buy whatever they want from this side of
things means that there's a pretty clear conduit for these
things to get into China anyways. To ye, So, like
that's pretty obvious, just if you actually want to, like,
you know, track these things, and like doesn'vini just stick
like air tag on every chip they make to see
where it goes? No, they don't, So I don't think
(06:05):
that you really know exactly where your technology ends up.
The second piece that I was thinking of when I
read this Bloomberg piece reporting on the information I'll quote
here because it's like this is important Chinese artificial intelligence
startup Deep Seek has relied on in Vidia Corporation chips
that are banned in the country to develop an upcoming
(06:26):
AI model. In Vidio's Blackwell chips were smuggled into chinaviar
countries that permitted their sale, the report said, citing anonymous sources.
The report said that service containing the chips were dismantled
before arriving in China. A representative from deep Seek didn't
immediately respond to a request for comment. So what we're
talking about here is that deep Seek may have trained
(06:47):
their new models on the Blockwell chip. So the other
thing that I think is obvious to me now in
terms of also thinking about this, is it's not clear
that you need to even have these in China in
order for it to be a national security problem, not
(07:10):
that in order for deep Seek to train on them
in that Hey, all you're really doing is you're getting
a cluster of these chips and doing that you know
the training that you need to on them. Is there
anything that prevents deep Zeke from contracting with a company
in wherever and saying, hey, we want to use your
(07:30):
cloud for X number of hours at Y rate and
then you can train on them anyways. Sure, right, I
don't believe there's anything that says they can't do that. So,
like that's one piece. But the stuff that we're really
concerned about from a national security perspective is not Deep
Seek training its new AI models on in Vidio hardware.
(07:52):
It's the Chinese government, specifically the Chinese military getting its
hands on this stuff right and using it for whatever
purposes it wants to know, in order to enhance the
Chinese military's capabilities. Sure, so, basically, like where we are
right now, is it's unclear to me ay that there
(08:14):
really is any meaningful restriction that is in place on
the actual movement of chips to China just because they
can go through all of these other countries that are
authorized to buy them anyways.
Speaker 4 (08:27):
Yes, I would say that having the restriction in general,
is it full proof. No, it's probably like putting in
the drinking age being twenty one in this country. Yeah,
you can put the agent, but then there's also a
lot of ways that kids are going to work around
to be able to drink. There's also gonna be ways
that China worked around to get the chips that needed. However,
(08:48):
it does prevent some of the outflow of chips there,
there's no question about that. Yeah, deepseek might be able
to get their hands on them, but the access is
likely not as widespread because you have these restrictions in place.
I think they solve everything. No, not necessarily. It's an
interesting policy pivot where to be clear, it's not the
most sophisticated chips that they're now permitting to be sold
(09:09):
to China.
Speaker 2 (09:09):
It's the step down.
Speaker 4 (09:10):
Generation beyond, but still far it's far different from where
the Biden administration was previously, which is said, you know,
no export of chips or significantly more water down versions
were going to China previously, the age twenties were being sent.
As of August, I think that agreement had come into place,
but then you bound battle the counter forces of China
really not wanting to endorse the purchase of these chips.
(09:33):
So the sentiment I had on yesterday with Mike is
it's kind of it's noteworthy, but it's a whole lot
to do about nothing, I think in a sense, because
I just don't know how much this changes the trajectory
of what China is going to continue to do, which
is to deploy a lot of investment into building this
out and deep Seek's going to continue to grab the chips.
(09:55):
So and I don't think Nvidia is going to get
a ton of sales bumped from this.
Speaker 1 (09:59):
No.
Speaker 2 (10:00):
And look, the concern that the stages that we've gone
through on this this year and where I think we
are heading eventually is you know, the US government did
not allow China to buy many of these chips to
begin with. And we said, like Tucker pulled the taper,
Ben pulled the tape at one point, and we had said,
(10:21):
like in July or August, Gee, wouldn't the funny thing
be if the US authorized the export? And then China
said no, And it's kind of what they've done now.
And now the next place that this logically goes, just
based on how China historically operates, is they're going to
figure out how to replicate as much as possible of
the chip infrastructure. They're going to try to flood the
(10:42):
global market with it at cheaper prices, in turn putting
pressure on in Vidia. And this is another thing that
in video is gonna have to contend with over the
next several years, which is okay, right now, you have
been you know, the main game in town as competition
comes in, your margin's probably aren't going to stay you
know where they are, because that's never where margins for
(11:06):
computer hardware stay. Yep, we've seen this in every iteration forever,
that hardware manufacturers cannot continue to command a premium in
that space.
Speaker 4 (11:17):
Yeah, not only do they have to battle China, but
there's plenty of domestic competitors that we've talked about a
lot recently. Googled trainiums. Yeah, there's a bunch out there.
Speaker 2 (11:27):
So let's take a quick break and when we return,
we've got trivia next.
Speaker 1 (11:32):
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Speaker 3 (12:05):
This segment of the Financial Exchange is powered by circle
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Circle K. Thank you veterans for all you've done. Time
for trivia here on the Financial Exchange.
Speaker 2 (12:25):
If you listen.
Speaker 3 (12:26):
Closely to yesterday's show, you will know the answer to
today's trivia question.
Speaker 1 (12:32):
So question is.
Speaker 3 (12:34):
What year was Scrooge McDuck created by Disney? Once again,
what year was Scrooge McDuck created by Disney? Be the
third person today to text us at six one seven
three six two thirteen eighty five with the correct answer
along with the keyword trivia, and you win a Financial
(12:54):
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Speaker 2 (13:10):
Piece of the New York Times. Why the AI boom
is unlike the dot com boom? Tell me Paul why? Well.
Speaker 4 (13:17):
One of the big factors is the platform of the
Internet had not been built in the late nineties. The
whole sort of lead up and build up to that
bubble was all of the promise that it could bring,
but you had to really start from from scratch. There
were people who were not comfortable at all with buying
something online. Now Amazon reaches pretty much every household throughout
(13:41):
the country, or is really prevalent throughout the whole system. Now,
what they're talking about here with the Boom is that
with artificial intelligence, you're building on an existing platform. It's
going to be based on utilizing your computer or any
type of device that is connected to the Internet to
get some of the efficiencies provided from it. And it's
just it's a comparison that's been made. We've talked about
(14:02):
on the show, and it's been brought up quite frequently.
There are going to be companies that fail, of course,
in this technology wave, but there are certainly going to
be some that are extremely successful. Here and one story
this is a little bit outdated, but I had just
sort of caught up on this where Chuck, you and
I have talked about so often on the show, when
are we going to see concrete proof that artificial intelligence
(14:24):
is actually driving an increase in business and productivity? And
this comes from late October, but it's h Robinson, which
is a freight logistics company which back in twenty twenty
two started incorporating artificial intelligence.
Speaker 2 (14:37):
To what it does.
Speaker 4 (14:37):
It basically, it's a global freighter, so it takes trucking,
you know, ocean line freight just moves goods around the country.
They spike twenty percent on their end of October earnings
report because they were able to prove through the use
of this technology that they saw their operating margins jump
seven percent, they reduced their headcount of employees by ten percent,
(14:59):
and they saw that they were even in an environment
that has pretty soft freight demand and there's a lot
of global trade disruption out there, there was actually forty
percent productivity increase from the end of twenty two to two.
So that story that's older dating, that's late October, but
starting to see tricking out some impact of this. Does
this touch every business right away? No, a freight logistics
(15:21):
company is a great early adopter of it. You can
see why could be so helpful for what they do.
Does it touch every business right away? No, but it's
just an interesting subject to continue to fall and it
will be debated for the next year or two as
to where the impact lies.
Speaker 2 (15:38):
Howard Marx, who runs a oak Tree Capital, put something
out on this yesterday. He writes a handful of these
memos each year and I thought like his summary on
this is kind of where I am, but it's much
more elegant than I would ever say it, So I'm
going to just quote from him. Here here's my Howard
(16:00):
marx actual bottom line. There's a consistent history of transformational
technologies generating excessive enthusiasm and investment, resulting in more infrastructure
than is needed and acid prices that prove to have
been too high. The excesses accelerate the adoption of the
technology in a way that wouldn't occur in their absence,
and the common word for these excesses is bubbles. AI
(16:21):
has the potential to be one of the greatest transformational
technologies of all time. As I wrote above, AI is
certainly the subject of great enthusiasm, and if that enthusiasm
doesn't produce a bubble conforming to the historical pattern, it'll
be a first. So basically, look, it might not be
a bubble now, but it will be at some point,
because transformational technologies always produce bubbles. Bubbles creating this process
(16:45):
usually end in losses for those who fuel them. The
losses stem largely from the fact that the technology's newness
renders the extent and timing of its impact unpredictable, So
basically we don't know how big the impact is going
to be and exactly when it's going to be realized,
which I think is where we are. This in turn
makes it easy to judge companies too positively amid all
the enthusiasm, and difficult to know which will emerge as
(17:07):
winners when the dust settles. Sounds like he's been listening
to our show but writing better than we talk. Definitely,
there can be no way to participate fully in the
benefits from the new technology without being exposed to the
losses that will arise if the enthusiasm and thus investor's
behavior proved to have been excessive. The use of debt
in this process, which the high level of uncertainty usually
precluded in past technical technological revolutions, has the potential to
(17:30):
magnify all of the above this time. And basically his
final conclusion then is, since no one can say definitively
whether this is a bubble, I'd advise that no one
should go all in without acknowledging that they face the
risk of ruin if things go badly. But by the
same token, no one should stay all out in risk
missing out on one of the great technological steps forward,
(17:50):
which is a reasonable conclusion put all your eggs in
one basket, diversify. So I think that gets to, you know,
kind of what we've talked about, which is, look, there's
a bunch of money that's being spent right now. We
don't know exactly when or how it's going to pay off.
Usually when you see this kind of stuff, there's losses
that end up happening, and you don't know when and
(18:10):
how large they're going to be. But it's unlikely that
this is going to be the first technological leap forward
that doesn't result in an over investment right but then.
Speaker 4 (18:20):
Could lead to tremendous productivity gains down the road. The
question is like looking back to the internet.
Speaker 2 (18:26):
The internet, radio, airplanes, like railroads, all of these had
huge boom and bust cycles and yet they all positively
transformed the world in the end. But investors during that time, well,
they took big losses on the back end of that
that malinvestment once there was once it was realized that
there was too much money spent there. Two things can
be true at the same time, this is a transformational
(18:48):
technology and investors are going to lose a bunch of
money when they spend too much money supporting it initially,
I think that's completely reasonable.
Speaker 1 (18:57):
Uh.
Speaker 2 (18:58):
And to anyone who just you know, loves to post
all the dumb things that AI does, I can tell
you there are plenty of, you know, positive things that
it does as well, Just like you know what C. H.
Robinson is saying, Uh, you know, do I want AI
making my movies? Do I want AI you know, writing
the you know letter to you know, my kids for
(19:19):
me or something?
Speaker 1 (19:20):
No?
Speaker 2 (19:20):
Like, I think ultimately we have to be human beings too,
because otherwise what's the point of this whole thing? But
to deny its uses is short sighted as well. Quick
Break Wall Street watches.
Speaker 1 (19:32):
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Speaker 1 (20:21):
Time now for Wall Street. Watch a complete look at
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 3 (20:29):
FED meeting days finally upon US, and markets are all
expecting another twenty five basis point interest rate cut at
the conclusion of its meeting this afternoon. All eyes will
shift to FED Chairman Jerome Poll at two point thirty
for more insight to the Fed's decision. Right now, the
(20:50):
Dow is up about a half a percent, or two
hundred and forty three points. SMB five hundred is up
about a tenth of a percent, NASDAC down two tenth
of one percent of forty six points lower. Rust of
two thousand is up about a quarter percent. Tenure treasreeled
is down two basis points at four point one six
(21:10):
two percent, and crude oiled down about eight tenths of
a percent, trading at fifty seven dollars and seventy nine
cents a barrel. Game stock falling over four percent after
the video game retailer's quarterly revenue fell short of forecasts
as hardware, accessories and software sales declined. Meanwhile, ge Vernovas
(21:30):
stock is rallying thirteen percent now after the energy giants
said its twenty twenty five revenue was trending higher toward
the higher end of its guidance. The company also doubled
its quarterly dividend to fifty cents per share. Elsewhere, shares
and Cracker Barrel are flat after the restaurant chains quarterly
revenue missed expectations. However, the company cut its annual outlook
(21:55):
as controversy surrounding its new logo impacted sales. Online pet
food retailer Chewy is seeing gains of over one percent
after posting it's quarterly results In After Today's Clothes, We'll
see more tech earnings from Oracle and Adobe. I'm Tucker Silvan.
That is Wall Street Watch And in the previous segment,
(22:15):
we asked you the trivia question what year was Scrooge
McDuck created by Disney? It will be nineteen forty seven.
Gene In Haveril Mass is our winner today taking on
a financial exchange show T shirt congrats to Gene. We
play trivia every day here in the Financial eks Change.
See complete contest rules at financial liks chainshow dot com.
Speaker 2 (22:36):
According to data from Fidelity, fifty three percent of investors
with a required minimum distribution in RMD for this year
still have not taken it as of the end of November.
To be honest, I'm not entirely surprised, nor does this
worry me for most investors who need to take them,
(22:57):
simply because, based on my experience, a large number of
investors either take them all entirely in December or take
a portion each month, with the last portion coming out
in December, and so I'm not really surprised that this
is the case. I would have expected maybe like thirty
(23:17):
five to forty percent to be the number, but like
fifty three is totally reasonable. I don't think that half
of RMD payments are missed each year by investors, and
so I do think it's you know, worth saying, Hey,
if you are seventy three years or older this year
and you have retirement accounts, make sure you are taking
(23:39):
your RMD if you need to. There are some situations
where you may not need to, such as if you
are an active employee at a company with which you
have a four to one K plan. There that four
to one K plan does not have an RMD then
even if you're over seventy three, But those exceptions are
few and far between.
Speaker 4 (23:56):
If you don't twenty five percent penalty on the amount
that you should take out that used to be far
more punitive. That usually fifty percent come down significantly since then.
And then the biggest and this is from the straight
from the cnbcpiece, the biggest landmine out there is an
inherited IRA. The rules on those have changed since the
Secure Act, and now you have two different tranches of
(24:17):
inherited iras out there, one which is subject to a
ten year rule where it's if it's a non spouse
inheriting the IRA, the account has to be depleted after
ten years. And then you have some of the legacy
ones that were prior to twenty twenty which could be
taken out over the person's life expectancy. So important to
(24:37):
really keep on the different types of accounts that you
have and understand what do I need to take out
and when.
Speaker 2 (24:44):
Yeah, this stuff can get confusing, and so if you
do have questions about it, the Armstrong Advisory Group does
have advisors who can help to answer those questions. How
do you set up a time to meet with someone
called eight hundred three nine three four zero zero zero one.
Again that number is eight hundred three nine three for
(25:06):
zero zero one. Whether your questions are about required minimum distributions,
roth IRA conversions, or any other item related to financial planning,
and specifically making sure that you are maximizing the tax
efficiency of your investments. Hey call Armstrong Advisory Group eight
hundred three nine three for zero zero one. Again, that
(25:29):
number is eight hundred three nine three for zero zero one.
Speaker 1 (25:33):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
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any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (25:48):
I want to talk a little bit about insta suck.
Oh yeah, you did. I gotta tell you this sucks. Okay, Noah,
I'm really upset about this in case you can't tell.
So here's the deal. There were a bunch of people
in Washington, DC who got together and did a zoom
(26:12):
chat or something like that, and they wanted to test
a hypothesis that they had, and they all tried to
place instacart orders from the same store a safe way
in Washington, DC for the same brand of eggs, and
they all chose to pick it up at the store
rather than have it delivered. So basically all someone had
(26:32):
to do was like get the eggs ready for them,
the exact same kinds, so no transportation involk of you're
getting it, nothing else.
Speaker 1 (26:40):
Yep.
Speaker 2 (26:41):
The prices they were offered ranged from three ninety nine
to four seventy nine at the exact same time that
they were doing this. And this, to me is the
danger of algorithmic pricing, where stores and or marketplaces figure out, oh,
(27:01):
you've you know, historically like paid X for this, even
though the store is offering it at why we can
charge you more. And so it's basically stores and other
company's middlemen trying to goose their profit margins, not by
offering you an improved product, but by realizing, oh, you're
trying to order this from a wealthy area code, we
(27:22):
can charge you twenty percent more than the person over there,
and I gotta tell you it's it really speaks to
the lack of innovation in human minds these days that
just like you can't think of how do I make
my product better so more people will buy it? But
instead it's how can I algorithmically screw over as many
(27:44):
people as possible? And that's why instat sucks. Sucks. I
say this to someone who uses INSTACRT occasionally I do, yeah,
but like this sucks. This sucks so bad. I mean,
that is just that is the fear with the technology.
Speaker 4 (27:59):
And we had talked about the story before where they
would digitize prices in supermarkets, and this is the fear
that you would have. Is rather than that old fashioned
sticker that you could point to, something could change in
an instant based on a certain time or seasonal effect.
That's this is the fear that you would have. And
in the instance of being in a brick and mortar,
you're a little bit pocular in a sense, like you're
(28:21):
at the store. Theoretically you could go and walk out
to another store, but this is the concern that that
rings out. There's other examples cited in this piece, and
a target in North Canada, Ohio, some shoppers were charged
three fifty nine for a jar of Skippy peant butter
that others could get for to ninety nine, and it
goes on and on a safe way. In Seattle, three
(28:42):
ninety nine for a box of wheat things while others
were paying forty. You're talking about huge margins in grocery,
which is notoriously famous for tiny margins.
Speaker 2 (28:51):
What does this say for garlic pole? You know, it
was up to fifteen dollars an ounce for colic, But
I thought that was the out Listen to our show
and charge Paul twice what everyone else. But I thought
that was a fair price. So I'm with instacrat on that.
So I just like I gotta say, this is really
bothersome to me because it's it's not the company doing
(29:12):
any work to improve the product or the experience. It's just, hey,
how can we get a little bit more from this person? Okay,
Like fine, they accept that. Like I gotta tell you,
it really makes me just want to move to like
mountaintop hut somewhere and interact with no one.
Speaker 4 (29:37):
It's well established. I wouldn't survive there long. But I
support your a couple of I have.
Speaker 2 (29:43):
A a small set of skills that makes me marginally
useful in an apocalypse scenario. I would very much need
to hang out with at least name one set of
skills that would be good in an apocalypse.
Speaker 1 (29:55):
Skin.
Speaker 3 (29:56):
What are we dealing with here.
Speaker 2 (29:57):
Eagle scout. I can do any kind of outdoor project
I can do. You need me to garden? You need
me to move? Like that's helpful for food, sir, Stucker,
don't laugh. Just picture you just you know, flowers. You
know I can plant freaking tomatoes and lettuce and corn
(30:17):
and Okay, and category is that is farming gardening? What
do you think?
Speaker 3 (30:24):
I didn't say farming. I said gardening, Right, That's what
I'm saying. What you're saying is farming, not gardening. Gardening
is like, you know, continue on some what is lowess?
Speaker 2 (30:36):
Give my topper thumbs down. What I'm talking about is.
Speaker 3 (30:38):
Garden gardening, corn now and tomatoes gardening.
Speaker 2 (30:41):
I don't own a farm, Tucker. I'm not doing industrial scale.
It would be in a front to our actual farmers
listening if I said I was a farmer.
Speaker 3 (30:51):
If it's an apocalypse though it's to a larger scale,
well I have to graduate to that.
Speaker 2 (30:55):
I got to get a certificate Okay, you know, but
at this point it's gardening. But yeah, I can plant
some stuff. I know how to fertilize, I know how
to trim, I know how to prune, I know how
to you know, I can do the whole cycle. Basically,
I got my three crop rotations down.
Speaker 1 (31:13):
The thing.
Speaker 2 (31:13):
I could waite hedge clippers. I could be the mule
that just goes off to get wood and carry it back.
I'm not talking hedge clippers, Tucker. I'm talking. Hey, if
you've got blueberry bushes, do you know the best time
of year to trim them so that you get the
best harvest next year?
Speaker 1 (31:30):
November?
Speaker 2 (31:32):
There you go? Was it is that true?
Speaker 1 (31:33):
No?
Speaker 2 (31:34):
Uh, let's take it quick. Instacars down six percent. Trim
your bushes in the middle of winter when it's thirty
two degrees. Yes, right, let's take a quick break here,
and when we return, we're gonna do some stack roulette. Here.
Speaker 1 (31:47):
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Speaker 3 (32:26):
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Speaker 2 (33:02):
Paul, what do you got for stack Roulette? Chuck?
Speaker 4 (33:05):
SpaceX is potentially planning in IPO for twenty twenty six.
Speaker 2 (33:10):
Now I'm trying to determine here they take me to Moon.
Speaker 4 (33:14):
That's one of my calculations that I'm trying to determine,
but also what the valuation is going to be, because I
had seen some headlines pop across Bloomberg as we're in
studio here at one and a half trillion, but other things.
I'm reading an eight hundred billion from a tweet from
Elon Muss days ago. So I'm not really sure what
valuation they would be looking for a lot, maybe to
(33:35):
simplify for listeners, a very high valuation. And this is
only if they were to go public. It looks like
they're potentially trying to raise about thirty billion. Would put
Elon Musk from a wealth standpoint into a whole stratosphere
onto them.
Speaker 2 (33:48):
I see what you did there, Yeah, I like that. Yeah.
I mean I'm always interested to see, you know, what
comes down the road from an IPO perspective and SpaceX.
I mean, the thing that's you know, tough about them
is the cops are pretty few and far between. There
are a few companies in Europe in the commercial space
(34:12):
business that don't trade it anywhere near those kinds of multiples.
I mean, if you were talking one point five trillion,
that's one hundred times revenue, not earnings, but revenue. Ye,
and most of the other companies that do this stuff
not most like Again, there's a handful are like one
and a half to four x revenue, So that's a
(34:32):
pretty big you know, multiple especially given Look, I love
space as much as the next guy I do. I'm
I have a big space nerd. I got a freaking
telescope at home so I can look at the moon,
got it and other stuff. So you've seen the starlinks satellite. Oh,
you see all kinds of stuff. Man, Like you get
(34:53):
up like in the mountains in the summer, and it's
like you can you can see all kinds of cool stuff.
But I'm just you're not sure how much money there
is out there for like launching stuff into space. You know,
like how many customers do you really have? At a
certain point, you just run out of people who want
(35:13):
to launch stuff into space.
Speaker 4 (35:16):
I have heard some these are going to be kind
of crazy, crazy ideas of this idea of launching whether
it be data centers into space like all these but
these are really far reaching ideas, to be clear, I'm
not talking about this tomorrow. But there's been some mention
of like whether it be for pollution and for like
reducing emissions and launching data centers into space like other
(35:39):
ways to basically take advantage of the conditions in space
versus the conditions on our planet. To try and optimize
revenue for a company like this, that would be the play.
But it's a lot that goes into that.
Speaker 2 (35:52):
It's not something for tomorrow.
Speaker 1 (35:53):
It is.
Speaker 2 (35:54):
I mean, like, just to put this in perspective, the
payload capacity on modern rockets right now, depending on what
kind of orbit you're trying to launch stuff into, is
twenty to fifty pounds. That's a lot of launches to
put a whole data center into orbit that's supposed to
be ten times the size of a home depot. Yeah,
(36:16):
you know, like it's just we don't really have the
rockets that do that yet. No, So it's not to
say that this stuff won't happen eventually, like I hope
it does because I think it's incredibly cool, just to
be honest, But there are some real limitations. I mean,
right now, basically you're talking, Okay, you can launch like
(36:40):
three suburbans into orbit, and that's about as much weight
as you can get up there. Right you know, you're
kind of limited. How much data can you move through that?
I don't know? And this is before you even get
into Okay, how do I then package all of what
needs to go up in such a way that the
(37:01):
forces imparted on it through the launch don't damage it right, right,
because you got some g forces and stuff that you're
dealing with there that you're not if you're just putting
this stuff in a big warehouse and hard to get
the g GPUs the lined under that you know, like, uh, billy,
it came unplugged during the launch. We got to send
you up to go plug it in. Do a space walk.
(37:22):
Like there's two different paradigm CMI's out again.
Speaker 4 (37:27):
If there's two diferent paradigms here, it's the valuation you're
gonna pay for this company to participate in this IPO
is gonna be outrageous relative to what it does. I mean,
Tesla was kind of like that a little bit too
and all. But there's the cool factor of this is
a transformational company and it's fascinating to read about and understand.
But when your investor there, there's two different ways to
(37:49):
look at things. One is, hey, this is cool and
very interesting. The second though, is, man, I'm paying a
huge price for this and you're really kind of the
the last money in I mean, this has been venture
back for years. I mean, I twenty three. It was
two thousand and two was when it started. Wow, I
was gonna guess twenty ten. So it's there's been a
lot of fundraising ahead of you before a company going
(38:12):
public of this size and scale.
Speaker 2 (38:14):
But fascinating.
Speaker 4 (38:15):
Nonetheless, if it does IPO in twenty six, I'll be
really interesting.
Speaker 2 (38:19):
I'm rooting again. It's a profitable company. It's a growing company. Yeah,
But like what's realistic, I don't really know, but it's
it's it's really interesting. Says some crazy stuff. But man,
he's produced some big they're waunching some they're launching some rockets. Man,
Like I've never launched anything, you know. Like I can't
put my money where my mouth is. But you got
(38:41):
some farming skills. I'm a gardener. I'm a gardener. Take
a quick break for the rest of the day. When
recap the FED meeting tomorrow on the show
Speaker 1 (39:00):
F
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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(01:06):
and Paul.
Speaker 2 (01:07):
Lane, Chuck, Paul Tucker with you kicking things off and
market it's not really doing a ton Prior to the
FED meeting. The S and P is down ten points,
about a tenth of a percent, A little bit less
than that, I'm sorry, a little more than that. Dal
(01:27):
Jones is up one hundred and three points, a little
less than a quarter percent. The Nasdaq is down about
half a percent, so you do have a little bit
of movement on that front, the vast majority of it. Again,
if you look kind of where it's coming from, Microsoft
off about three percent today, and video off about one
(01:48):
and a half and Broadcom off about one in a quarter.
So tech kind of dragging a little bit today. And
we're gonna be talking quite a bit about artificial intelligence
as uh. It'll actually be the first day that we've
ever talked about artificial intelligence on the Financial Exchange, so
that's kind of exciting for us. Tucker. We still do
(02:11):
not have any AI hosts for the show.
Speaker 1 (02:16):
We're working on it. Holidays are coming up, so.
Speaker 2 (02:18):
What do we do. We have names. I know Mark
Fandettai is one of the I.
Speaker 3 (02:25):
Don't know if you could do better than that. That's
that's a really good name, Chuck GPT. Yeahzi uh.
Speaker 2 (02:35):
Let's see what are the other major ones. We've got
perplexity out there? What about poulplexity? Yeah, I like poulplexity.
Speaker 1 (02:41):
Yep.
Speaker 2 (02:42):
Quote me on that, Mike Armstrong could be No, Mike
A I am Strong. No, that one sucks anyways, I
don't know. Yes, thank you, Mike, I Armstrong idiots. That's
that's about right. No, No, yeah, that's that's right, Mike.
(03:04):
I know. US tenure Treasury is down one point eight
basis points to four point one six eight percent. The
Dollar Index is down point one three percent to ninety
nine oh seven. Gold is off fourteen eighty announced to
forty two to twenty one and forty cents, and crude
oil West Text Intermediate down another forty eight cents a
barrel to fifty seven seventy seven, and the triple A
(03:28):
national average for gas prices continuing its little slide of
runey as well, that is off another half a cent
to two ninety four even, and so continuing to see
gas prices coming down, which is always fun, but in
particular heading into a busy period of driving that kicks
off in about you know, eight to ten days. So
(03:51):
it's nice let's talk a little bit about China. And
in video, we've got a couple different stories here. Yesterday
we cover the story that the Trump administration is authorizing
the export of in Vidia's H two hundred chip to China.
This had previously been not allowed. Still is not the
newest chips that they have, the Blackwell chips, but this
(04:14):
is the previous version the hoppers as they're referred to
in the biz. And so you got you know, full
powered hoppers that China can buy now. China basically came
out yesterday as again we're not really sure that we
want these anyways, which is why you get this news
failure where in videos down despite the announcements. But a
couple different stories that are out today, one from the
(04:36):
New York Times China's access to powerful in vidio chips
comes at a quote critical moment, and the other one
is China's deepseek uses banned in video chips for AI model,
according to a report from the Information So a couple
of things to talk about on this. The first is
that when we look at semiconductor export restrictions, the reason
(05:02):
why we've typically had them in place is because we
recognize that bad actors can use these chips in ways
that could be destructive for US national security concerns. I
think we all acknowledge this. I think we also acknowledge
that the Chinese government on occasion can be a bad actor. Sure,
(05:23):
so I think we understand why these you know, would
be in place. Historically. The issues that you run into
on the on the AI side of things specifically are
twofold in my opinion. The first is, even if you
do have these restrictions in place when it comes to China,
(05:43):
the fact that you've pretty much allowed the entire Middle
East to buy whatever they want from this side of
things means that there's a pretty clear conduit for these
things to get into China anyways. To ye, So, like
that's pretty obvious, just if you actually want to, like,
you know, track these things, and like doesn'vini just stick
like air tag on every chip they make to see
where it goes? No, they don't, So I don't think
(06:05):
that you really know exactly where your technology ends up.
The second piece that I was thinking of when I
read this Bloomberg piece reporting on the information I'll quote
here because it's like this is important Chinese artificial intelligence
startup Deep Seek has relied on in Vidia Corporation chips
that are banned in the country to develop an upcoming
(06:26):
AI model. In Vidio's Blackwell chips were smuggled into chinaviar
countries that permitted their sale, the report said, citing anonymous sources.
The report said that service containing the chips were dismantled
before arriving in China. A representative from deep Seek didn't
immediately respond to a request for comment. So what we're
talking about here is that deep Seek may have trained
(06:47):
their new models on the Blockwell chip. So the other
thing that I think is obvious to me now in
terms of also thinking about this, is it's not clear
that you need to even have these in China in
order for it to be a national security problem, not
(07:10):
that in order for deep Seek to train on them
in that Hey, all you're really doing is you're getting
a cluster of these chips and doing that you know
the training that you need to on them. Is there
anything that prevents deep Zeke from contracting with a company
in wherever and saying, hey, we want to use your
(07:30):
cloud for X number of hours at Y rate and
then you can train on them anyways. Sure, right, I
don't believe there's anything that says they can't do that. So,
like that's one piece. But the stuff that we're really
concerned about from a national security perspective is not Deep
Seek training its new AI models on in Vidio hardware.
(07:52):
It's the Chinese government, specifically the Chinese military getting its
hands on this stuff right and using it for whatever
purposes it wants to know, in order to enhance the
Chinese military's capabilities. Sure, so, basically, like where we are
right now, is it's unclear to me ay that there
(08:14):
really is any meaningful restriction that is in place on
the actual movement of chips to China just because they
can go through all of these other countries that are
authorized to buy them anyways.
Speaker 4 (08:27):
Yes, I would say that having the restriction in general,
is it full proof. No, it's probably like putting in
the drinking age being twenty one in this country. Yeah,
you can put the agent, but then there's also a
lot of ways that kids are going to work around
to be able to drink. There's also gonna be ways
that China worked around to get the chips that needed. However,
(08:48):
it does prevent some of the outflow of chips there,
there's no question about that. Yeah, deepseek might be able
to get their hands on them, but the access is
likely not as widespread because you have these restrictions in place.
I think they solve everything. No, not necessarily. It's an
interesting policy pivot where to be clear, it's not the
most sophisticated chips that they're now permitting to be sold
(09:09):
to China.
Speaker 2 (09:09):
It's the step down.
Speaker 4 (09:10):
Generation beyond, but still far it's far different from where
the Biden administration was previously, which is said, you know,
no export of chips or significantly more water down versions
were going to China previously, the age twenties were being sent.
As of August, I think that agreement had come into place,
but then you bound battle the counter forces of China
really not wanting to endorse the purchase of these chips.
(09:33):
So the sentiment I had on yesterday with Mike is
it's kind of it's noteworthy, but it's a whole lot
to do about nothing, I think in a sense, because
I just don't know how much this changes the trajectory
of what China is going to continue to do, which
is to deploy a lot of investment into building this
out and deep Seek's going to continue to grab the chips.
(09:55):
So and I don't think Nvidia is going to get
a ton of sales bumped from this.
Speaker 1 (09:59):
No.
Speaker 2 (10:00):
And look, the concern that the stages that we've gone
through on this this year and where I think we
are heading eventually is you know, the US government did
not allow China to buy many of these chips to
begin with. And we said, like Tucker pulled the taper,
Ben pulled the tape at one point, and we had said,
(10:21):
like in July or August, Gee, wouldn't the funny thing
be if the US authorized the export? And then China
said no, And it's kind of what they've done now.
And now the next place that this logically goes, just
based on how China historically operates, is they're going to
figure out how to replicate as much as possible of
the chip infrastructure. They're going to try to flood the
(10:42):
global market with it at cheaper prices, in turn putting
pressure on in Vidia. And this is another thing that
in video is gonna have to contend with over the
next several years, which is okay, right now, you have
been you know, the main game in town as competition
comes in, your margin's probably aren't going to stay you
know where they are, because that's never where margins for
(11:06):
computer hardware stay. Yep, we've seen this in every iteration forever,
that hardware manufacturers cannot continue to command a premium in
that space.
Speaker 4 (11:17):
Yeah, not only do they have to battle China, but
there's plenty of domestic competitors that we've talked about a
lot recently. Googled trainiums. Yeah, there's a bunch out there.
Speaker 2 (11:27):
So let's take a quick break and when we return,
we've got trivia next.
Speaker 1 (11:32):
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(11:53):
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Speaker 3 (12:05):
This segment of the Financial Exchange is powered by circle
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Circle K. Thank you veterans for all you've done. Time
for trivia here on the Financial Exchange.
Speaker 2 (12:25):
If you listen.
Speaker 3 (12:26):
Closely to yesterday's show, you will know the answer to
today's trivia question.
Speaker 1 (12:32):
So question is.
Speaker 3 (12:34):
What year was Scrooge McDuck created by Disney? Once again,
what year was Scrooge McDuck created by Disney? Be the
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(12:54):
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Speaker 2 (13:10):
Piece of the New York Times. Why the AI boom
is unlike the dot com boom? Tell me Paul why? Well.
Speaker 4 (13:17):
One of the big factors is the platform of the
Internet had not been built in the late nineties. The
whole sort of lead up and build up to that
bubble was all of the promise that it could bring,
but you had to really start from from scratch. There
were people who were not comfortable at all with buying
something online. Now Amazon reaches pretty much every household throughout
(13:41):
the country, or is really prevalent throughout the whole system. Now,
what they're talking about here with the Boom is that
with artificial intelligence, you're building on an existing platform. It's
going to be based on utilizing your computer or any
type of device that is connected to the Internet to
get some of the efficiencies provided from it. And it's
just it's a comparison that's been made. We've talked about
(14:02):
on the show, and it's been brought up quite frequently.
There are going to be companies that fail, of course,
in this technology wave, but there are certainly going to
be some that are extremely successful. Here and one story
this is a little bit outdated, but I had just
sort of caught up on this where Chuck, you and
I have talked about so often on the show, when
are we going to see concrete proof that artificial intelligence
(14:24):
is actually driving an increase in business and productivity? And
this comes from late October, but it's h Robinson, which
is a freight logistics company which back in twenty twenty
two started incorporating artificial intelligence.
Speaker 2 (14:37):
To what it does.
Speaker 4 (14:37):
It basically, it's a global freighter, so it takes trucking,
you know, ocean line freight just moves goods around the country.
They spike twenty percent on their end of October earnings
report because they were able to prove through the use
of this technology that they saw their operating margins jump
seven percent, they reduced their headcount of employees by ten percent,
(14:59):
and they saw that they were even in an environment
that has pretty soft freight demand and there's a lot
of global trade disruption out there, there was actually forty
percent productivity increase from the end of twenty two to two.
So that story that's older dating, that's late October, but
starting to see tricking out some impact of this. Does
this touch every business right away? No, a freight logistics
(15:21):
company is a great early adopter of it. You can
see why could be so helpful for what they do.
Does it touch every business right away? No, but it's
just an interesting subject to continue to fall and it
will be debated for the next year or two as
to where the impact lies.
Speaker 2 (15:38):
Howard Marx, who runs a oak Tree Capital, put something
out on this yesterday. He writes a handful of these
memos each year and I thought like his summary on
this is kind of where I am, but it's much
more elegant than I would ever say it, So I'm
going to just quote from him. Here here's my Howard
(16:00):
marx actual bottom line. There's a consistent history of transformational
technologies generating excessive enthusiasm and investment, resulting in more infrastructure
than is needed and acid prices that prove to have
been too high. The excesses accelerate the adoption of the
technology in a way that wouldn't occur in their absence,
and the common word for these excesses is bubbles. AI
(16:21):
has the potential to be one of the greatest transformational
technologies of all time. As I wrote above, AI is
certainly the subject of great enthusiasm, and if that enthusiasm
doesn't produce a bubble conforming to the historical pattern, it'll
be a first. So basically, look, it might not be
a bubble now, but it will be at some point,
because transformational technologies always produce bubbles. Bubbles creating this process
(16:45):
usually end in losses for those who fuel them. The
losses stem largely from the fact that the technology's newness
renders the extent and timing of its impact unpredictable, So
basically we don't know how big the impact is going
to be and exactly when it's going to be realized,
which I think is where we are. This in turn
makes it easy to judge companies too positively amid all
the enthusiasm, and difficult to know which will emerge as
(17:07):
winners when the dust settles. Sounds like he's been listening
to our show but writing better than we talk. Definitely,
there can be no way to participate fully in the
benefits from the new technology without being exposed to the
losses that will arise if the enthusiasm and thus investor's
behavior proved to have been excessive. The use of debt
in this process, which the high level of uncertainty usually
precluded in past technical technological revolutions, has the potential to
(17:30):
magnify all of the above this time. And basically his
final conclusion then is, since no one can say definitively
whether this is a bubble, I'd advise that no one
should go all in without acknowledging that they face the
risk of ruin if things go badly. But by the
same token, no one should stay all out in risk
missing out on one of the great technological steps forward,
(17:50):
which is a reasonable conclusion put all your eggs in
one basket, diversify. So I think that gets to, you know,
kind of what we've talked about, which is, look, there's
a bunch of money that's being spent right now. We
don't know exactly when or how it's going to pay off.
Usually when you see this kind of stuff, there's losses
that end up happening, and you don't know when and
(18:10):
how large they're going to be. But it's unlikely that
this is going to be the first technological leap forward
that doesn't result in an over investment right but then.
Speaker 4 (18:20):
Could lead to tremendous productivity gains down the road. The
question is like looking back to the internet.
Speaker 2 (18:26):
The internet, radio, airplanes, like railroads, all of these had
huge boom and bust cycles and yet they all positively
transformed the world in the end. But investors during that time, well,
they took big losses on the back end of that
that malinvestment once there was once it was realized that
there was too much money spent there. Two things can
be true at the same time, this is a transformational
(18:48):
technology and investors are going to lose a bunch of
money when they spend too much money supporting it initially,
I think that's completely reasonable.
Speaker 1 (18:57):
Uh.
Speaker 2 (18:58):
And to anyone who just you know, loves to post
all the dumb things that AI does, I can tell
you there are plenty of, you know, positive things that
it does as well, Just like you know what C. H.
Robinson is saying, Uh, you know, do I want AI
making my movies? Do I want AI you know, writing
the you know letter to you know, my kids for
(19:19):
me or something?
Speaker 1 (19:20):
No?
Speaker 2 (19:20):
Like, I think ultimately we have to be human beings too,
because otherwise what's the point of this whole thing? But
to deny its uses is short sighted as well. Quick
Break Wall Street watches.
Speaker 1 (19:32):
Next, bringing the latest financial news straight to your radio
every day. It's the Financial Exchange on the Financial Exchange
Radio Network.
Speaker 2 (19:50):
We're proud to announce that circle K is now the official.
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Convenience store of the dav Department of Massachusetts. At circle K,
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Department of Massachusetts, and thank you veterans for all you've done.
Speaker 1 (20:21):
Time now for Wall Street. Watch a complete look at
what's moving markets so far today right here on the
Financial Exchange Radio Network.
Speaker 3 (20:29):
FED meeting days finally upon US, and markets are all
expecting another twenty five basis point interest rate cut at
the conclusion of its meeting this afternoon. All eyes will
shift to FED Chairman Jerome Poll at two point thirty
for more insight to the Fed's decision. Right now, the
(20:50):
Dow is up about a half a percent, or two
hundred and forty three points. SMB five hundred is up
about a tenth of a percent, NASDAC down two tenth
of one percent of forty six points lower. Rust of
two thousand is up about a quarter percent. Tenure treasreeled
is down two basis points at four point one six
(21:10):
two percent, and crude oiled down about eight tenths of
a percent, trading at fifty seven dollars and seventy nine
cents a barrel. Game stock falling over four percent after
the video game retailer's quarterly revenue fell short of forecasts
as hardware, accessories and software sales declined. Meanwhile, ge Vernovas
(21:30):
stock is rallying thirteen percent now after the energy giants
said its twenty twenty five revenue was trending higher toward
the higher end of its guidance. The company also doubled
its quarterly dividend to fifty cents per share. Elsewhere, shares
and Cracker Barrel are flat after the restaurant chains quarterly
revenue missed expectations. However, the company cut its annual outlook
(21:55):
as controversy surrounding its new logo impacted sales. Online pet
food retailer Chewy is seeing gains of over one percent
after posting it's quarterly results In After Today's Clothes, We'll
see more tech earnings from Oracle and Adobe. I'm Tucker Silvan.
That is Wall Street Watch And in the previous segment,
(22:15):
we asked you the trivia question what year was Scrooge
McDuck created by Disney? It will be nineteen forty seven.
Gene In Haveril Mass is our winner today taking on
a financial exchange show T shirt congrats to Gene. We
play trivia every day here in the Financial eks Change.
See complete contest rules at financial liks chainshow dot com.
Speaker 2 (22:36):
According to data from Fidelity, fifty three percent of investors
with a required minimum distribution in RMD for this year
still have not taken it as of the end of November.
To be honest, I'm not entirely surprised, nor does this
worry me for most investors who need to take them,
(22:57):
simply because, based on my experience, a large number of
investors either take them all entirely in December or take
a portion each month, with the last portion coming out
in December, and so I'm not really surprised that this
is the case. I would have expected maybe like thirty
(23:17):
five to forty percent to be the number, but like
fifty three is totally reasonable. I don't think that half
of RMD payments are missed each year by investors, and
so I do think it's you know, worth saying, Hey,
if you are seventy three years or older this year
and you have retirement accounts, make sure you are taking
(23:39):
your RMD if you need to. There are some situations
where you may not need to, such as if you
are an active employee at a company with which you
have a four to one K plan. There that four
to one K plan does not have an RMD then
even if you're over seventy three, But those exceptions are
few and far between.
Speaker 4 (23:56):
If you don't twenty five percent penalty on the amount
that you should take out that used to be far
more punitive. That usually fifty percent come down significantly since then.
And then the biggest and this is from the straight
from the cnbcpiece, the biggest landmine out there is an
inherited IRA. The rules on those have changed since the
Secure Act, and now you have two different tranches of
(24:17):
inherited iras out there, one which is subject to a
ten year rule where it's if it's a non spouse
inheriting the IRA, the account has to be depleted after
ten years. And then you have some of the legacy
ones that were prior to twenty twenty which could be
taken out over the person's life expectancy. So important to
(24:37):
really keep on the different types of accounts that you
have and understand what do I need to take out
and when.
Speaker 2 (24:44):
Yeah, this stuff can get confusing, and so if you
do have questions about it, the Armstrong Advisory Group does
have advisors who can help to answer those questions. How
do you set up a time to meet with someone
called eight hundred three nine three four zero zero zero one.
Again that number is eight hundred three nine three for
(25:06):
zero zero one. Whether your questions are about required minimum distributions,
roth IRA conversions, or any other item related to financial planning,
and specifically making sure that you are maximizing the tax
efficiency of your investments. Hey call Armstrong Advisory Group eight
hundred three nine three for zero zero one. Again, that
(25:29):
number is eight hundred three nine three for zero zero one.
Speaker 1 (25:33):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
Speaker 2 (25:48):
I want to talk a little bit about insta suck.
Oh yeah, you did. I gotta tell you this sucks. Okay, Noah,
I'm really upset about this in case you can't tell.
So here's the deal. There were a bunch of people
in Washington, DC who got together and did a zoom
(26:12):
chat or something like that, and they wanted to test
a hypothesis that they had, and they all tried to
place instacart orders from the same store a safe way
in Washington, DC for the same brand of eggs, and
they all chose to pick it up at the store
rather than have it delivered. So basically all someone had
(26:32):
to do was like get the eggs ready for them,
the exact same kinds, so no transportation involk of you're
getting it, nothing else.
Speaker 1 (26:40):
Yep.
Speaker 2 (26:41):
The prices they were offered ranged from three ninety nine
to four seventy nine at the exact same time that
they were doing this. And this, to me is the
danger of algorithmic pricing, where stores and or marketplaces figure out, oh,
(27:01):
you've you know, historically like paid X for this, even
though the store is offering it at why we can
charge you more. And so it's basically stores and other
company's middlemen trying to goose their profit margins, not by
offering you an improved product, but by realizing, oh, you're
trying to order this from a wealthy area code, we
(27:22):
can charge you twenty percent more than the person over there,
and I gotta tell you it's it really speaks to
the lack of innovation in human minds these days that
just like you can't think of how do I make
my product better so more people will buy it? But
instead it's how can I algorithmically screw over as many
(27:44):
people as possible? And that's why instat sucks. Sucks. I
say this to someone who uses INSTACRT occasionally I do, yeah,
but like this sucks. This sucks so bad. I mean,
that is just that is the fear with the technology.
Speaker 4 (27:59):
And we had talked about the story before where they
would digitize prices in supermarkets, and this is the fear
that you would have. Is rather than that old fashioned
sticker that you could point to, something could change in
an instant based on a certain time or seasonal effect.
That's this is the fear that you would have. And
in the instance of being in a brick and mortar,
you're a little bit pocular in a sense, like you're
(28:21):
at the store. Theoretically you could go and walk out
to another store, but this is the concern that that
rings out. There's other examples cited in this piece, and
a target in North Canada, Ohio, some shoppers were charged
three fifty nine for a jar of Skippy peant butter
that others could get for to ninety nine, and it
goes on and on a safe way. In Seattle, three
(28:42):
ninety nine for a box of wheat things while others
were paying forty. You're talking about huge margins in grocery,
which is notoriously famous for tiny margins.
Speaker 2 (28:51):
What does this say for garlic pole? You know, it
was up to fifteen dollars an ounce for colic, But
I thought that was the out Listen to our show
and charge Paul twice what everyone else. But I thought
that was a fair price. So I'm with instacrat on that.
So I just like I gotta say, this is really
bothersome to me because it's it's not the company doing
(29:12):
any work to improve the product or the experience. It's just, hey,
how can we get a little bit more from this person? Okay,
Like fine, they accept that. Like I gotta tell you,
it really makes me just want to move to like
mountaintop hut somewhere and interact with no one.
Speaker 4 (29:37):
It's well established. I wouldn't survive there long. But I
support your a couple of I have.
Speaker 2 (29:43):
A a small set of skills that makes me marginally
useful in an apocalypse scenario. I would very much need
to hang out with at least name one set of
skills that would be good in an apocalypse.
Speaker 1 (29:55):
Skin.
Speaker 3 (29:56):
What are we dealing with here.
Speaker 2 (29:57):
Eagle scout. I can do any kind of outdoor project
I can do. You need me to garden? You need
me to move? Like that's helpful for food, sir, Stucker,
don't laugh. Just picture you just you know, flowers. You
know I can plant freaking tomatoes and lettuce and corn
(30:17):
and Okay, and category is that is farming gardening? What
do you think?
Speaker 3 (30:24):
I didn't say farming. I said gardening, Right, That's what
I'm saying. What you're saying is farming, not gardening. Gardening
is like, you know, continue on some what is lowess?
Speaker 2 (30:36):
Give my topper thumbs down. What I'm talking about is.
Speaker 3 (30:38):
Garden gardening, corn now and tomatoes gardening.
Speaker 2 (30:41):
I don't own a farm, Tucker. I'm not doing industrial scale.
It would be in a front to our actual farmers
listening if I said I was a farmer.
Speaker 3 (30:51):
If it's an apocalypse though it's to a larger scale,
well I have to graduate to that.
Speaker 2 (30:55):
I got to get a certificate Okay, you know, but
at this point it's gardening. But yeah, I can plant
some stuff. I know how to fertilize, I know how
to trim, I know how to prune, I know how
to you know, I can do the whole cycle. Basically,
I got my three crop rotations down.
Speaker 1 (31:13):
The thing.
Speaker 2 (31:13):
I could waite hedge clippers. I could be the mule
that just goes off to get wood and carry it back.
I'm not talking hedge clippers, Tucker. I'm talking. Hey, if
you've got blueberry bushes, do you know the best time
of year to trim them so that you get the
best harvest next year?
Speaker 1 (31:30):
November?
Speaker 2 (31:32):
There you go? Was it is that true?
Speaker 1 (31:33):
No?
Speaker 2 (31:34):
Uh, let's take it quick. Instacars down six percent. Trim
your bushes in the middle of winter when it's thirty
two degrees. Yes, right, let's take a quick break here,
and when we return, we're gonna do some stack roulette. Here.
Speaker 1 (31:47):
The Financial Exchange every day from eleven to noon, Non
serious XM's Business radio channel one thirty two. Keep it
here for the latest business and financial news and the
drends on Wall Street. The Financial Exchange is now life
on Series XM's business radio channel one thirty two. Thanks.
He's the Financial Exchange Radio Network. Find daily interviews and
(32:08):
full shows of the Financial Exchange on how Are YouTube page.
Get cut up on anything and everything you might have missed.
This is the Financial Exchange Radio Network.
Speaker 3 (32:26):
The Financial Exchange is a proud partner of the Disabled
American Veterans Department of Massachusetts. Planning is well underway for
the twenty twenty six DAV five K, and if you
weren't able to attend this year's race, BOODS still like
to help our great American heroes. Please visit DAV fivek
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(32:48):
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Speaker 1 (33:00):
That's DAV five K Boston.
Speaker 2 (33:02):
Paul, what do you got for stack Roulette? Chuck?
Speaker 4 (33:05):
SpaceX is potentially planning in IPO for twenty twenty six.
Speaker 2 (33:10):
Now I'm trying to determine here they take me to Moon.
Speaker 4 (33:14):
That's one of my calculations that I'm trying to determine,
but also what the valuation is going to be, because I
had seen some headlines pop across Bloomberg as we're in
studio here at one and a half trillion, but other things.
I'm reading an eight hundred billion from a tweet from
Elon Muss days ago. So I'm not really sure what
valuation they would be looking for a lot, maybe to
(33:35):
simplify for listeners, a very high valuation. And this is
only if they were to go public. It looks like
they're potentially trying to raise about thirty billion. Would put
Elon Musk from a wealth standpoint into a whole stratosphere
onto them.
Speaker 2 (33:48):
I see what you did there, Yeah, I like that. Yeah.
I mean I'm always interested to see, you know, what
comes down the road from an IPO perspective and SpaceX.
I mean, the thing that's you know, tough about them
is the cops are pretty few and far between. There
are a few companies in Europe in the commercial space
(34:12):
business that don't trade it anywhere near those kinds of multiples.
I mean, if you were talking one point five trillion,
that's one hundred times revenue, not earnings, but revenue. Ye,
and most of the other companies that do this stuff
not most like Again, there's a handful are like one
and a half to four x revenue, So that's a
(34:32):
pretty big you know, multiple especially given Look, I love
space as much as the next guy I do. I'm
I have a big space nerd. I got a freaking
telescope at home so I can look at the moon,
got it and other stuff. So you've seen the starlinks satellite. Oh,
you see all kinds of stuff. Man, Like you get
(34:53):
up like in the mountains in the summer, and it's
like you can you can see all kinds of cool stuff.
But I'm just you're not sure how much money there
is out there for like launching stuff into space. You know,
like how many customers do you really have? At a
certain point, you just run out of people who want
(35:13):
to launch stuff into space.
Speaker 4 (35:16):
I have heard some these are going to be kind
of crazy, crazy ideas of this idea of launching whether
it be data centers into space like all these but
these are really far reaching ideas, to be clear, I'm
not talking about this tomorrow. But there's been some mention
of like whether it be for pollution and for like
reducing emissions and launching data centers into space like other
(35:39):
ways to basically take advantage of the conditions in space
versus the conditions on our planet. To try and optimize
revenue for a company like this, that would be the play.
But it's a lot that goes into that.
Speaker 2 (35:52):
It's not something for tomorrow.
Speaker 1 (35:53):
It is.
Speaker 2 (35:54):
I mean, like, just to put this in perspective, the
payload capacity on modern rockets right now, depending on what
kind of orbit you're trying to launch stuff into, is
twenty to fifty pounds. That's a lot of launches to
put a whole data center into orbit that's supposed to
be ten times the size of a home depot. Yeah,
(36:16):
you know, like it's just we don't really have the
rockets that do that yet. No, So it's not to
say that this stuff won't happen eventually, like I hope
it does because I think it's incredibly cool, just to
be honest, But there are some real limitations. I mean,
right now, basically you're talking, Okay, you can launch like
(36:40):
three suburbans into orbit, and that's about as much weight
as you can get up there. Right you know, you're
kind of limited. How much data can you move through that?
I don't know? And this is before you even get
into Okay, how do I then package all of what
needs to go up in such a way that the
(37:01):
forces imparted on it through the launch don't damage it right, right,
because you got some g forces and stuff that you're
dealing with there that you're not if you're just putting
this stuff in a big warehouse and hard to get
the g GPUs the lined under that you know, like, uh, billy,
it came unplugged during the launch. We got to send
you up to go plug it in. Do a space walk.
(37:22):
Like there's two different paradigm CMI's out again.
Speaker 4 (37:27):
If there's two diferent paradigms here, it's the valuation you're
gonna pay for this company to participate in this IPO
is gonna be outrageous relative to what it does. I mean,
Tesla was kind of like that a little bit too
and all. But there's the cool factor of this is
a transformational company and it's fascinating to read about and understand.
But when your investor there, there's two different ways to
(37:49):
look at things. One is, hey, this is cool and
very interesting. The second though, is, man, I'm paying a
huge price for this and you're really kind of the
the last money in I mean, this has been venture
back for years. I mean, I twenty three. It was
two thousand and two was when it started. Wow, I
was gonna guess twenty ten. So it's there's been a
lot of fundraising ahead of you before a company going
(38:12):
public of this size and scale.
Speaker 2 (38:14):
But fascinating.
Speaker 4 (38:15):
Nonetheless, if it does IPO in twenty six, I'll be
really interesting.
Speaker 2 (38:19):
I'm rooting again. It's a profitable company. It's a growing company. Yeah,
But like what's realistic, I don't really know, but it's
it's it's really interesting. Says some crazy stuff. But man,
he's produced some big they're waunching some they're launching some rockets. Man,
Like I've never launched anything, you know. Like I can't
put my money where my mouth is. But you got
(38:41):
some farming skills. I'm a gardener. I'm a gardener. Take
a quick break for the rest of the day. When
recap the FED meeting tomorrow on the show
Speaker 1 (39:00):
F
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