May 14, 2026 • 38 mins
The AI trade keeps getting bigger, faster, and more expensive — and some investors are starting to see uncomfortable similarities to the dot-com era.
Chuck Zodda and Mike Armstrong break down the explosive debut of Cerebras Systems and why surging semiconductor stocks are reigniting concerns that today’s AI spending frenzy may be creating the next major market bubble.
Also covered:
Chuck Zodda and Mike Armstrong break down the explosive debut of Cerebras Systems and why surging semiconductor stocks are reigniting concerns that today’s AI spending frenzy may be creating the next major market bubble.
Also covered:
- Why semiconductor stocks keep behaving like classic boom-bust cycles
- The key warning signs that today’s AI rally may be entering dangerous territory
- Kevin Warsh officially takes over as Fed Chair and what it could mean for policy
- Why markets are suddenly pricing in future rate hikes instead of rate cuts
- The surprising reason Americans continue feeling terrible about the economy
- How social media and nonstop headlines may be distorting economic sentiment
- Why restaurants are changing menus around GLP-1 trends
- The growing debate over whether AI is making students smarter or simply inflating grades
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Episode Transcript
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Speaker 1 (00:00):
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(00:20):
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(00:43):
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(01:03):
This is the Financial Exchange with Chuck Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker here and as we kick things off,
we got all major US indices in rally mode today.
It's been basically the case for the last month and
a half now. But the Dow Jones Industrial Average back
above fifty thousand, up four hundred and one points, about
(01:33):
three quarters of a percent. S and P five hundred
up fifty four points, three quarters of a percent as well.
The Nasdaq one hundred and nasdak can posite both up
about three quarters of percent. Even that cute little Russell
two thousand. Here, there you go, little boy here out Yeah,
there you go, good boy, have a little treat. That
is uh yeah, that's up about point six percent. So
(01:55):
you know, whether you're talking about your Great Danes or
your little Yorkies, all the dogs are getting fed today.
There you go. And especially when we talk about dogs
getting fed. Sarah Bras Systems a tech company that is
going to be that's ipoing as we speak right now.
(02:16):
They are raising about five and a half billion dollars
in an IPO today and they can that a little more.
They build computer chips for AI inference workflows, workloads, sorry,
and the ipo was originally going to go off at
about one hundred and ten to one hundred and fifteen
dollars a share. By the time they got through the
(02:39):
underwriting process, they up to tow one hundred and eighty
five And it still is not trading. But I'm seeing
again just from reports from people who follow this stuff,
that the initial trading may actually open somewhere north of
four hundred dollars a share. My god, which I gotta
tell you, this is the stuff that you saw back
in nineteen ninety nine. Now, it doesn't mean that this
(03:03):
can't continue. I'm not saying that it won't. But what
I am saying is hardware tech hardware IPOs that double
in their first day not really something we've seen for
the last twenty five years.
Speaker 3 (03:21):
Yeah, So again I I'm not justifying the price that
this is going off at. I will say that Sarah
Bras has revenue. They did have my positive net income
the first time as a conception.
Speaker 2 (03:38):
That like all of the IPOs in the tech bubble
had like no revenue and just like a web page
like agreed again, we covered Cisco is the ultimate face
of the tech bubble. Yeah, it became one of the
most valuable companies on the planet and then lost eighty
percent and didn't get back there for twenty six years.
Yeah again, I don't want it.
Speaker 3 (03:58):
I just don't want to call this one one of
the dot com uh fanatic companies that you know, hadn't
printed any revenue and went public based on users.
Speaker 1 (04:07):
Why not?
Speaker 2 (04:07):
Why were we all so offensive? Like why are we
so worried about offending people by saying that this is
like the tech bubble? Yes it is. It's like the
freaking tech bubble. It will burst at some point. It's
probably not today or tomorrow or next week or even
next month, but it's just like the tech bubble. I'm
sorry again, Like successful companies came out of that. Yeah,
(04:32):
a lot died, but successful ones still. Let's talk about Microsoft,
one of the most successful companies today. Microsoft, you go
back and take a look at how it was valued
in two thousand. It was fifty seven dollars a share.
It went down to twenty five and basically sat there
for fifteen years before finally recovering. Like, no one looks
(04:56):
at Microsoft and is like, well, they didn't have, you know,
no revenue, and so that means that good companies can
get caught up in bubbleish's valuations too. And I am
telling you this is just like the tech bubble. Yeah.
Speaker 3 (05:09):
So a company that is pricing their IPO again, like
you said a couple of weeks ago, it was supposed
to be one hundred and ten bucks a share IPOs
at one eighty five. And again, trading's not yet occurring,
it's halted at the moment. But if that goes off
at four hundred dollars per share on a company with
five hundred million dollars in revenue, wow, I.
Speaker 2 (05:34):
Mean, Mike, the the Philadelphia Semiconductor Index since March. Hold on,
let me get this date right, since March thirtieth month
and a half is up seventy three percent. You can't
do that every month. Yeah, And I'm not saying that
this is going to blow up tomorrow, because as I've
(05:56):
been saying for the last month, it's really clear that
the demand for inference in AI dramatically exceeds supply right now,
which is what Sarah Brass does. But I can also
tell you that we have never been through a tech
hardware CAPEX cycle that didn't end with tech tech hardware
(06:17):
investors in tears, washed like it's how it ends every
time and again that the runway might be a year,
it might be three years, it might be five, it
might be ten. I don't know what do you mean
by every time?
Speaker 1 (06:33):
Right?
Speaker 3 (06:33):
I mean obviously the tech bubble, but there are other
ones that are smaller too, Right, remember three D printing, Like.
Speaker 2 (06:43):
No, it didn't blow up the system. I'm talking about
semiconductors specifically, like semi. Here's the deal with semiconductors. Do
you remember back in twenty twenty two when the US
stock market fell twenty percent? Yeah, I think it was
more like twenty five, but yeah, the Philly Semiconductor index
was off fifty percent. Do you remember from July of
(07:03):
twenty twenty four through April of twenty five, when stocks
fell again about like twenty five percent, the Philly Semiconductor
index was off fifty again.
Speaker 1 (07:16):
Right.
Speaker 2 (07:19):
You go through these like even mini boom bust cycles,
and it's it's crazy, Like the volatility in this area
is just huge, and you know, you can look back
again through pretty much the whole thing. You know, back
during the h the actual tech bubble, you saw like
(07:39):
an eighty five percent draw down here, like semiconductor stocks,
the reason why typically, like if you look at them
from again two thousand through twenty twenty, we're talking about
a twenty year period where the sector was basically not
a creative and the reason why is that the margins
just get whittled way it becomes commoditized. Why do we
(08:03):
think that AI is any different? Do we think that
like AI semiconductors are not going to go through that?
Of course not, Chuck. There are you know, some differences
in terms of like the architectures are different, and sometimes
you can end up being locked into a certain ecosystem
and that helps, you know, someone maintain margin and things
like that. But I just I am not going to
(08:26):
believe that this is going to be like, hey, guess what,
we We've escaped and now semiconductors are going to be,
you know, more valuable than everything else combined. Yeah, I
don't believe that either, you know, like I just can't
get there. So I firmly again we talked earlier in
(08:48):
our show, you got to be able to hold two
thoughts in your head simultaneously, one of which is this
gonna end badly, the other being maybe not yet because
the demand growth is crazy right now now. The other
piece that can affect demand growth that I think is
interesting right now, a lot of if you talk to
anyone who's at a big tech company, they'll tell you
(09:11):
that a lot of these big tech companies have leader
boards for who uses the most computing capacity in a
single day, and like tech companies are trying to grade
people on that. Remember, compute capacity costs money. At some point,
tech companies and other companies are going to move from
hey we want using the most compute do we want
you producing the most per unit of compute? And when
(09:36):
that happens, that is the potential inflection point in my opinion,
because right now, like it's literally just a race to
be like, hey, who can use the most compute possible?
And as I've said before, if you dig a hole
and then fill it in, you're doing something. You're doing
a lot of work. Yeah, you're generating economic but it's
not productive work. At some point we're going to move
(09:59):
from digging virtual holes and filling them in actually needing
to do productive work. And that's where you know, the
potential inflection point is we're not there yet. Take a
quick break. When we come back, we've got trivia, and
then we're talking Kevin Warsh being confirmed as the new
FED chair right after.
Speaker 1 (10:18):
This, Market insight, retirement strategies, real talk about Wall Street
and economic trends, all live every day on our YouTube channel.
Go to YouTube dot com slash the Financial Exchange Show.
This he's the Financial Exchange. Markets move fast. Follow the
Financial Exchange live on x so you never miss a story. Dace,
(10:39):
He's the Financial Exchange Radio Network.
Speaker 2 (10:48):
Time for sure.
Speaker 4 (10:49):
Here on the Financial Exchange.
Speaker 2 (10:53):
On this day.
Speaker 4 (10:54):
In seventeen eighty seven, delegates gathered in Philadelphia to draw
up the Constitution.
Speaker 2 (11:00):
Of the United States.
Speaker 4 (11:02):
So our trivia question today, how many amendments are in
the Constitution?
Speaker 2 (11:07):
Once again?
Speaker 4 (11:08):
How many amendments are in the Constitution? Be the fourth
person to text us at six one seven three six
two thirteen eighty five with the correct answer, and you'll
win a Financial Exchange Show t shirt.
Speaker 2 (11:22):
Once again.
Speaker 4 (11:22):
The fourth correct response to text us to the number
six one seven three six two thirteen eighty five with
the correct answer along with the keyword trivia, we'll win
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (11:36):
Would you ever try to pass an amendment to the Constitution? Definitely? Yeah,
I don't know what I would do, but I feel
like it'd be kind of fun, you know. In any case,
Kevin wars Uh not in the Constitution, but now back
in the Federal Reserve, confirmed yesterday by a fifty four
to forty five Senate vote. I don't know who didn't vote,
(11:59):
because there are a hundred Senators, and one would think
that this would be a vote that you show up for,
but I don't know. Let's see, Oh, here we go.
Senator Kirsten Gilbrand didn't vote. Busy, Why why? Why take
the kids up? You're not going to vote on the
fed chair, have no opinion. You couldn't have, like any
(12:23):
other day, to do whatever it is you were doing.
I'm sorry. I know that this is like kind of
a minutia, but it just seems like kind of a
big deal to not miss this vote.
Speaker 3 (12:31):
She's got vacation plans. In any case, Congress. Members of
Congress are very busy during the summer.
Speaker 2 (12:37):
It's it's May thirteenth, yesterday, We're not even to Memorial
summer and packing. The weather's been crappy all week, Like,
what are we doing here? In any case, Kevin worsh
is now going to be the seventeenth chair of the
Federal Reserve, and so he will be taking over from
(12:58):
Jerome Powell in about a week and his first meeting
is going to be the meeting in thirty four days
concluding on June seventeenth, and so we're going to get
I would assume, our first Kevin Worrish press conference, and
I think it's going to be interesting to see how
(13:20):
he actually attempts to steer the FED now that he
is actually in the chair. I will say, it is
hard for me to think of a worse environment to
enter than the one we are in right now in
recent history, I guess, maybe for any FED chair, for
Kevin worsh specifically for any I mean, Mike, here's the deal.
(13:43):
You've got an inflation picture that is incredibly uncertain. You
have a jobs picture that because of you know, combination
of artificial intelligence and labor supply, is incredibly uncertain. And
you've got a on the fiscal side, a government running
six percent annual deficits, and you've got to figure out
(14:06):
how to make this all work without blowing it up.
Speaker 3 (14:09):
I'll throw in there another significant piece of this, which
is you've got the most significant threat to FED independence
that's probably happened since the Knicks and era. Probably Again
I'm I know, you pooh poo that, but I do
just because I want to see how Warsh actually handles things.
And the reason I bring this up is like Scott
(14:30):
Bessen was talking a whole bunch of stuff about, oh,
when I come in his treasury, I'm gonna do this,
and basically he kept doing the exact same stuff Janet
Yellen was doing because he got in he was like, oh,
if I push that button, things are going to go badly. Yeah,
I'm not so much talking about what Kevin Worsh has said,
rather what President Trump has said, and the President has
wanted his thumb on the scales of the Federal Reserve,
(14:50):
and that makes it challenging even were it's somebody who
hasn't run on a on a candidacy of appeasing the president.
Speaker 2 (14:59):
So again, I'm interested to see. I don't try to
I really try not to prejudge people in roles because
it's like, if we're gonna do that, then we might
as well just cancel the show, you know, like we
might as well just not do the show if we're
gonna say, well, they're gonna do a bad job. Like
I got no idea. We're gonna see how he's going
to do. And it's a challenging environment for him to
(15:21):
enter in into. And I think there are a lot
of cross currencies going to have to navigate successfully in
order to steer the ship over the you know, the
next four years of this term here. So again, his
first meeting is gonna be in thirty four days. Uh.
(15:41):
We may get some changes in communication policy. Like before Powell,
we did not have a press conference every meeting. Maybe
worse goes back to that. Uh, maybe there's some changes
in terms of the style of the readouts that we
get in things like that. Maybe the meeting minutes, you know,
change in terms of their format. He might do away
with the dot plot. The dot pot is not like
(16:02):
a required thing for the FED to do. And so
we'll have to just see what we get because I
don't know, quite honestly, and I try to keep an
open mind. And if he ends up sucking at his job,
well then we'll be able to, you know, Mark FANDETI
will be here to call him a failure. If he doesn't,
then we can call him a tremendous success. But I'm
(16:24):
going to see how the guy does, and I'm gonna
give him the full term as well, because again, there's
times in Powell's most recent term in twenty twenty two,
he and his entire group kind of sucked. Yeah, they
kind of screwed the pooch. I guess last three years
they've been really good.
Speaker 3 (16:42):
That's part of what I want to address, because worsh
is coming in and publicly stating that he wants to
shake up the FED, and I think what he means
by that is he wants to shake up the way
that the Federal Reserve Board thinks about their role and
where we are today and just how these things all
relate to each other. And I think he might get
(17:04):
some of that rope to rethink all that given the
failures of the FED over the course of the last
six years. I don't I don't know that his conclusions
will be right, but there have been some screw ups,
especially in the you know, late stages of COVID leading
into twenty twenty two at the Federal Reserve, and I
(17:25):
think part of that is the thinking of how they
dealt with inflation at that point in time.
Speaker 2 (17:29):
So again, I'm very much not going to you know,
I don't know what he's going to do. Like you
might have, you know, a great start to his tenure
and then the horrible finish. You might have a horrible
start and a great finish. He might be good or
bad for the whole thing. Like I don't know, but
I think it's clearly. Look, we haven't had a new
FED chair in eight years now, It's been a while.
(17:54):
If you go back and look at you know, the
most recent ones that we've had, I gotta be honest
and looking at Powell again, these are all personal views
on this. Sure, Alan Greenspan was handed a gift of
an economy and under his FED, the kind of changes
(18:15):
that happened, you can have a direct line to the
financial crisis because of the actions of the green Span
FED specifically kind of from ninety nine through two thousand
and four, all kinds of changes to like bank you know,
you know, collateral requirements and things like that, things that
you know, we don't think of when we think of
(18:37):
the FED, but all kinds of problems there. Ben Bernaki,
I think you can point to and say, you know,
manage the FED through the greatest financial crisis that we've
seen in our lifetimes, but in doing so ended up
taking a lot of you know, power, basically from Congress,
and I'm not sure you want that all concentrated in
the Fed. Janet Yellen didn't really have to do a
(18:58):
ton It was, you know, twenty five, fourteenth through twenty eighteen.
Speaker 3 (19:01):
Yeah, there wasn't much to be done there. All she
had to do is not buy in that it was
going to be inflationary, right, just she pretty successfully.
Speaker 2 (19:07):
Don't screw it up, and she basically didn't. Powell faced with,
you know, the first real inflationary challenge in forty years
failed during twenty two. But other than twenty twenty two,
I thought Powell was excellent. I think he handled two
thousand very well. I think he handled the last three
years very well. We'll see where worsh ends up landing
when it's all said and done. Quick break here when
(19:28):
we come back. We got the trivia answer, we got
Wall Street Watch and should you really feel so bad
about the economy?
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.
Tell you out full Wall Street Watch, treking the stocks,
the data and the headlines. Driving markets so far today
right here on the Financial Exchange, Radio netw.
Speaker 4 (20:00):
Work markets aren't rally mode, extending their gains by midday
on the heels of impressive earnings from Cisco. Investors are
also keeping a close eye in developments from the summit
between President Trump and Chinese President Jijing. Paying right now,
the Dow up eight tens of a percent, SMP five
hundred up nearly nine tenths of a percent, Nasdaq now
(20:20):
up one percent or two hundred and sixty three points,
RUSSED two thousands up three quarters of a percent. Ten
year Treasure reeled down two basis points at four point
four five one percent, in oil pulling back slightly, trading
right around one hundred dollars a barrel. Cisco rallying fifteen
percent after the tech firm announced it will cut fewer
(20:41):
than four thousand jobs this quarter, or about five percent
of its workforce, so it can allocate more resources into
high growth areas like AI infrastructure. Meanwhile, versant Media Group,
so It's revenue and profit fall in the second quarter
since being spun off from Comcast, but they were better
than expected. The company also reported revenue growth across its
(21:03):
content licensing and digital platforms that stock up over three percent. Elsewhere,
Biogen down over four percent despite the biopharmaceutical company announcing
its experimental Alzheimer's drug will advance into a Phase three trial.
Outdoor products company Yeti impressed with its quarterly results, sending
(21:24):
shares up by six percent, and ticket seller stub Hub
also beat expectation, sending shares surging by nineteen percent. Semiconductor
equipment maker Applied Materials will report after today's closing bell.
I'm Tucker Silvan. That is Wall Street Watch. In the
previous segment, we asked you the trivia question how many
amendments are in the Constitution? That would be twenty seven
(21:48):
and Bill from waltham amass is our trivia winner today,
taking home a Financial Exchange Show t shirt. Congrats to Bill,
and we play trivia every day here on the Financial
Exchange Complete contest rules at Financial Exchange Show dot com.
Speaker 2 (22:03):
The uh University of Michigan consumer sentiment data came out
last week. We covered it. The index came into reading
a forty eight point two, which is the worst it
has ever been. Which you get this piece from CNBC
being like Americans still feel bad about the economy when
(22:23):
will it get better never? And here's the thing. Two
things are true, and again you got to hold these
two views in your head simultaneously. Number One, the economy
is not the worst that it's ever been, very obviously,
Like I gotta be honest, I don't know who's filling
(22:45):
out these surveys, now.
Speaker 3 (22:47):
Don't you think you run into people though that are
that dramatic Every once in a while, I do.
Speaker 2 (22:53):
Yes, the economy is worse than it's ever been. So
hear that from people sometimes.
Speaker 3 (22:58):
This is what I think, and I asked them if
they even remember fifteen years ago.
Speaker 2 (23:04):
This is what I think, is that in the social
media age, we just the way that you actually your
brain ends up being rewired is to post the most
dramatic stuff you can because that gets the most engagement,
and that triggers your dopamine response. And then you're like, oh,
I gotta keep posting like that. That's getting the likes,
(23:24):
And so you just say all these outrageous things like
the moon is made of green cheese, and I'll never
you know, like lawns again because of the worms, and
like just all kinds of weird stuff that you end
up falling into. Man, your social media feed is really different.
I don't go on social media. I haven't been on
my Facebook account in six years. So all of you
(23:44):
listening who tried to friend request me, sorry, I can't
get into it anymore. I know that's to be fair.
I do ask my wife once a year. I'm like, Hey,
do you see anything weird on my Facebook? She's like, no, why,
I'm like, because I don't know how to get back in,
and I haven't been on it since August of twenty one,
and I just want to make sure nothing weird is
(24:06):
going on. So I check in with her once a
year on it. But I just think social media has
so warped our brains that surveys like this are broken.
Because I can tell you this. If you took one
hundred Americans from right now and put them into the
US economy in June of twenty ten, within five minutes,
(24:28):
they'd be like, take me back. They would just curl
up and start crying. Likewise, if you took them from
right now and put them into August of nineteen seventy three,
they'd be like, uh uh, nope, where's the undo button?
Not gonna do it.
Speaker 3 (24:43):
So I heard it put very well by a history
author who you know, was having somebody describe the world
to him as really tragic right now, and his response was,
you know, during the Great Depression, they shut down the zoos,
killed the animals, and distributed the meat. So you're gonna
have a tough time convincing me that the economy right
(25:04):
now is that bad.
Speaker 2 (25:07):
Pardon me why? Like, so you couple that with the
fact that, hey, the economy is tough for a lot
of people right now. Yep, it's been tough for the
last five or six years. There's been again since twenty twenty.
I've gone through this every year. It's just been one
thing after another, just a bludgeting. It's like, Okay, first
you got COVID, then you got you know, the supply shocks.
In twenty one, you got inflation. In twenty two, the
(25:29):
banks are failing. In twenty three, the job market's slow,
and in twenty four, AI is gonna eat our lunch.
In twenty five, oh no, tariff's in twenty five. Yeah,
twenty six is warn the Middle East in gas price
is going up like it's it's been something every year,
So I get it, Like we can feel exhausted, but
we can feel economically exhausted without saying this is the
(25:49):
worst economy ever. Yeah, I'll tell you.
Speaker 3 (25:53):
With the the news moving as quickly as it does,
in spite of the fact that you know, many portfolios
are reaching high watermarks that they've never seen before, I
do completely comprehend how it would be nerve wracking to
make a decision, a big financial life decision right now,
like retirement, buying a house, retiring. And you see some
(26:14):
of that in the data. You know, home purchases are
not moving. Your over year retirements are actually retirements based
on the labor force participation rate might still be happening.
But I can completely comprehend how this moment in time
might lead to some choice paralysis, especially when it comes
to retirement.
Speaker 2 (26:35):
Folks.
Speaker 3 (26:37):
I was speaking with somebody in their late fifties about
this just yesterday. You may go through the exercise and
determine that you still have to work another four or
five years. You might go through an exercise of planning
out you retirement and discover that, hey, I'm I could
pretty comfortably pull this off today. But having the answer
in your back pocket makes just going to work that
(26:59):
much more are tolerable and pleasant, like Hey, yep, I
know I've got a number in the back of my
mind that I need to reach before I can pull
the trigger, or I know I need to make it
through this many more days of work before my financial
plan is going to work. I think what is really
difficult is being in your late fifties early sixties, going
to work every day and not having any certainty that
you'll ever be able to stop. And I know there
(27:21):
are people that are in that position, and I cannot
tell you how many times we have had surprising conversations
with folks that hey, you might be able to pull
this off a lot earlier than you realize, and here's
the path to do that. If you want to try
and answer that question, you might need some help, and
if you'd like help from the Armstrong Advisory Group, we're
(27:43):
here to do so. The numbers eight hundred three nine
three four zero zero one don't work longer than you
have to unless you really want to again eight hundred
three nine three four zero zero one, or you can
check us out online Armstrong Advisory dot com.
Speaker 1 (27:58):
The proceeding was paid for by arms Strong 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. Text us at six one seven three
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questions about today's show and let us know what you
(28:20):
think about the stories we are covering. This is the
Financial Exchange Radio Network.
Speaker 2 (28:38):
Mike, what do you got for stacoulett?
Speaker 3 (28:40):
I want to talk about restaurants that are najor, adapt
their menus and struggling a little bit. In the days
of GLP one users. There's an estimated I believe, ten
million Americans, about twelve percent of the adult population who
have taken GLP one.
Speaker 2 (28:58):
Drugs ale unintended. Twelve percent of Americans seems high. I thought, oh,
I thought it seems low.
Speaker 3 (29:07):
What portion of Americans are obese? I don't know, I
know more than it's more than twelve percent. Maybe it's
just like my age demo and the people that I
run into.
Speaker 2 (29:15):
But I feel like I feel like, at least in
that you know, age thirty to fifty suburban demo, it
feels like it's close to like twenty five or things. Remember,
you have to be pretty wealthy to be on these things,
do you know.
Speaker 3 (29:29):
I thought they were all kinds of subsidies that came
in in the last like yes, and I mean it's
still I don't know the cost.
Speaker 2 (29:35):
But anyways, I in any case, restaurants are adapting their menus.
Speaker 3 (29:40):
They're focusing well, everyone and their mother is focusing on
higher protein items, smaller portions, and I don't know if
they're going to be successful or not.
Speaker 2 (29:48):
What I will say is, if the cost.
Speaker 3 (29:51):
Of lowering the rates of obesity and heart disease is
a few restaurants having smaller profits, like sign me up,
all on board. I will deal with that societal trade off.
But in the meantime, you are seeing even restaurants like
the Cheesecake Factory completely reshaping their menu with entire sections
devoted to GLP one users who just ain't as hungry
(30:12):
as they use.
Speaker 4 (30:12):
No Page seventy nine of their menu.
Speaker 3 (30:14):
Yeah, yeah, you do have to scroll through the index
of that thing for a while to find the right page,
but you will eventually get there.
Speaker 2 (30:19):
At the Cheesecake Factory, for that lower calorie menu, I'm
not buying this. You don't think it's nope, gonna be
the case. Well, no, I am buying that restaurants are
trying to shrink portions. I think they're trying to do
it because of inflation and it's the only way they
can keep their costs in line.
Speaker 3 (30:34):
Maybe the thing is, like most restaurants that I've seen
are not completely redoing their menu, They're just adding new
sections of lower.
Speaker 2 (30:43):
Like what restaurants you're doing on this? So, like, I
know you mentioned cheesecake Factory. I gotta be honest. I've
been to a lot of restaurants lately for various reasons,
I haven't seen a GLP one section on any.
Speaker 3 (30:54):
I've seen a few of them, and it's mainly chained restaurants.
But I know that, uh is there. No, it wasn't
too cheesy. It was Olive Garden has a has one,
Cheesecake Factory has one. So it's the it's the big
guys that are moving around first, I think, And yeah,
well we'll see if it's a bunch of nonsense. I
know people have been talking about like every time that
(31:16):
a food company reported bad earnings anytime over the last
two years, they've blamed it on weight loss. Drugs, and
so I'm with you there, I'm not sure that there's
actually a there there.
Speaker 2 (31:27):
I'm trying to I'm just pulling up the Olive Garden
menu just because again those of you who have listened
to the show know that you can. You can like
Olive Garden for what it is, which is a great
meeting place for like people of all kinds to like
come together. But I firmly believe it's not Italian food.
(31:48):
Having said that to America, I mean, yeah, I don't
know's Italian food in the same way that Panda expresses
Chinese food exactly. So I think in looking at this,
so you're talking about like this lighter portions menu. So
here's the deal. I'm looking at it right now, and
(32:09):
I've got the lasagna classico, a five hundred col version
for fifteen forty nine. If I were to let's see,
where's the actual where's the regular lasagna? Come on, family
style of Azagnia bundle. No, that's sixty seven hundred calories.
That's not the comp Here we go, here's the regular one.
(32:31):
Here's why I think that you're being scammed by this menu.
Scammed might be a strong word, but here's why I
think that you're being hosed by this menu because like
you are getting what you paid for. It's just you're
paying too much. The regular lasagna classico at Olive Garden
nineteen ninety nine for nine hundred and forty calories, the
one on the Lighter Portions menu fifteen ninety nine for
(32:51):
five hundred. Michael, if one really wanted to eat a
smaller portion, you are better off buying the Lasagnia classico,
splitting it and half and having the other half for
lunch tomorrow. You are, yeah, like, this is why. I
like they are trying. If they really were trying to
make it such that it was just, oh, we want
to offer smaller portions for you, it wouldn't be seventy
(33:14):
five percent of the cost for fifty percent of the calories. Chuck.
Speaker 3 (33:17):
I never said that any of this was designed to
be good for the consumer. I just said that they
are trying to appeal to a customer that is looking
for lower calorie options.
Speaker 2 (33:25):
And they think they can make money on it too.
And I am saying, Tucker put this on the prediction
board okay for twenty thirty, which is not as far
off as we think. The lasagna Classico at Olive Garden
will be one size only, and it will be the
five hundred col version for the nine hundred cal price.
Speaker 3 (33:47):
Say I think that, Chuck, you are vastly overestimating American's
math skills.
Speaker 2 (33:54):
I know I'm correctly estimating them, because what's going to
happen is the small is going to become the norm
and no one and they're gonna think no one can
pick up on it. Yeah, got it, that's what I
They're going to get rid of the big one and
then you're just gonna get left with the small one. Now,
could we all like stand to you know, drop a
pound to two, especially.
Speaker 3 (34:13):
After the Maybe I shouldn't be having a thousand sure
calorie piece of lasagna every night for dinner, I don't know.
Speaker 2 (34:18):
Or maybe I should get the family one at sixty
seven hundred cows and see if I can finish it
in a single serving, because that sounds like a nice
day to me. Yeah. Uh. Piece in the Wall Street
Journal A grades are now suddenly everywhere since the arrival
of chat GPT good. So I saw this piece and
was like, okay, like show me, like what you actually
(34:42):
have here, and here's the the crux of it, and
I quote the share of a's and college classes heavy
on writing and coding, in other words, work more prone
to AI use has grown more significantly than in other
classes since chat GPT's debut. According to a paper from
the University of California, Berkeley released on when Day, professors
teaching AIX post classes gave out thirty percent more a's
(35:04):
and fewer AS and B plus grades. The results suggest
that students have relied on generative AI do better in
their studies, not that these classes of students are learning more.
So this gets the age old question of like, hey,
do you need to be able to do your math
test without the calculator or can you use the calculator
to do it? And in the case of computer science,
(35:26):
quite honestly, I think that if you are not grading
your students on the use of AI for coding, you're
doing them a disservice because that's how it's going to
be done in the future, right, Yeah, Like you want
AI to be used in those courses for the coding
work because that's how they're doing it at the big
companies now.
Speaker 3 (35:41):
Right, Like you could hypothetically have your exam be in
person and block all of the AI systems from being
able to be used during these amp But what would
be the point.
Speaker 2 (35:51):
These people are.
Speaker 3 (35:53):
Only being hired because they have the AI skills to
do the coding correct on the writing stuff.
Speaker 2 (35:58):
The writing stuff I buy because here's the thing. Well,
actually no, I buy it, but I don't. Here here's
here's here are my two problems. Number one, if you
actually read a lot of AI related reasoning, it's hot,
garbage and repetitive. And if I were a professor and
I saw some of the telltale signs of AI writing
(36:19):
in a piece, I would know that you're writing it
using AI and'd be like, get out of here. So
what part don't you buy?
Speaker 3 (36:26):
I mean, the great inflation is pretty clearly happening from
this study, So which part don't you buy that?
Speaker 2 (36:31):
I think that any professor of history or English should
be able to pretty easily identify an AI written piece
and grade it appropriately. Yeah, And I think if you
want to allow AI assisted writing in those courses, that's fine,
and you can grade that as you see fits. But
from a personal perspective, as someone who believes that writing
(36:52):
and developing an argument are critical skills of thought that
you need to teach I would basically have I'd go
old school on it. Here's your blue book, sit down
at the desk and write your essay without any help or.
Speaker 3 (37:06):
Argue your point in person to me. I feel like
that skill is so under valid.
Speaker 2 (37:09):
Do one of your two talk. This is the other thing.
Like my favorite course in college was our financial markets course, which,
like let me hear, I guess two thirds of your
grade was all Socratic method from just the prof asking
questions during the course of the time, like your actual
tests were a really small portion, and like the homework
(37:30):
was not a big piece. It was. No I'm going
to grade you on talking about this stuff in class
because that's going to prove to me that you know it.
So I don't know, maybe we can do more of that.
That sounds fun and nice and wicked smart too. We're
gonna take a quick break for the rest of the day,
but tomorrow we're back and there's no exciting economic data,
(37:55):
so don't tune in for that, but tune in just
because you want to hang out with us for a
couple hours, and if we want to hang out with
you too, we'll see you then
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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(01:03):
This is the Financial Exchange with Chuck Zada and Mike Armstrong.
Speaker 2 (01:11):
Chuck, Mike and Tucker here and as we kick things off,
we got all major US indices in rally mode today.
It's been basically the case for the last month and
a half now. But the Dow Jones Industrial Average back
above fifty thousand, up four hundred and one points, about
(01:33):
three quarters of a percent. S and P five hundred
up fifty four points, three quarters of a percent as well.
The Nasdaq one hundred and nasdak can posite both up
about three quarters of percent. Even that cute little Russell
two thousand. Here, there you go, little boy here out Yeah,
there you go, good boy, have a little treat. That
is uh yeah, that's up about point six percent. So
(01:55):
you know, whether you're talking about your Great Danes or
your little Yorkies, all the dogs are getting fed today.
There you go. And especially when we talk about dogs
getting fed. Sarah Bras Systems a tech company that is
going to be that's ipoing as we speak right now.
(02:16):
They are raising about five and a half billion dollars
in an IPO today and they can that a little more.
They build computer chips for AI inference workflows, workloads, sorry,
and the ipo was originally going to go off at
about one hundred and ten to one hundred and fifteen
dollars a share. By the time they got through the
(02:39):
underwriting process, they up to tow one hundred and eighty
five And it still is not trading. But I'm seeing
again just from reports from people who follow this stuff,
that the initial trading may actually open somewhere north of
four hundred dollars a share. My god, which I gotta
tell you, this is the stuff that you saw back
in nineteen ninety nine. Now, it doesn't mean that this
(03:03):
can't continue. I'm not saying that it won't. But what
I am saying is hardware tech hardware IPOs that double
in their first day not really something we've seen for
the last twenty five years.
Speaker 3 (03:21):
Yeah, So again I I'm not justifying the price that
this is going off at. I will say that Sarah
Bras has revenue. They did have my positive net income
the first time as a conception.
Speaker 2 (03:38):
That like all of the IPOs in the tech bubble
had like no revenue and just like a web page
like agreed again, we covered Cisco is the ultimate face
of the tech bubble. Yeah, it became one of the
most valuable companies on the planet and then lost eighty
percent and didn't get back there for twenty six years.
Yeah again, I don't want it.
Speaker 3 (03:58):
I just don't want to call this one one of
the dot com uh fanatic companies that you know, hadn't
printed any revenue and went public based on users.
Speaker 1 (04:07):
Why not?
Speaker 2 (04:07):
Why were we all so offensive? Like why are we
so worried about offending people by saying that this is
like the tech bubble? Yes it is. It's like the
freaking tech bubble. It will burst at some point. It's
probably not today or tomorrow or next week or even
next month, but it's just like the tech bubble. I'm
sorry again, Like successful companies came out of that. Yeah,
(04:32):
a lot died, but successful ones still. Let's talk about Microsoft,
one of the most successful companies today. Microsoft, you go
back and take a look at how it was valued
in two thousand. It was fifty seven dollars a share.
It went down to twenty five and basically sat there
for fifteen years before finally recovering. Like, no one looks
(04:56):
at Microsoft and is like, well, they didn't have, you know,
no revenue, and so that means that good companies can
get caught up in bubbleish's valuations too. And I am
telling you this is just like the tech bubble. Yeah.
Speaker 3 (05:09):
So a company that is pricing their IPO again, like
you said a couple of weeks ago, it was supposed
to be one hundred and ten bucks a share IPOs
at one eighty five. And again, trading's not yet occurring,
it's halted at the moment. But if that goes off
at four hundred dollars per share on a company with
five hundred million dollars in revenue, wow, I.
Speaker 2 (05:34):
Mean, Mike, the the Philadelphia Semiconductor Index since March. Hold on,
let me get this date right, since March thirtieth month
and a half is up seventy three percent. You can't
do that every month. Yeah, And I'm not saying that
this is going to blow up tomorrow, because as I've
(05:56):
been saying for the last month, it's really clear that
the demand for inference in AI dramatically exceeds supply right now,
which is what Sarah Brass does. But I can also
tell you that we have never been through a tech
hardware CAPEX cycle that didn't end with tech tech hardware
(06:17):
investors in tears, washed like it's how it ends every
time and again that the runway might be a year,
it might be three years, it might be five, it
might be ten. I don't know what do you mean
by every time?
Speaker 1 (06:33):
Right?
Speaker 3 (06:33):
I mean obviously the tech bubble, but there are other
ones that are smaller too, Right, remember three D printing, Like.
Speaker 2 (06:43):
No, it didn't blow up the system. I'm talking about
semiconductors specifically, like semi. Here's the deal with semiconductors. Do
you remember back in twenty twenty two when the US
stock market fell twenty percent? Yeah, I think it was
more like twenty five, but yeah, the Philly Semiconductor index
was off fifty percent. Do you remember from July of
(07:03):
twenty twenty four through April of twenty five, when stocks
fell again about like twenty five percent, the Philly Semiconductor
index was off fifty again.
Speaker 1 (07:16):
Right.
Speaker 2 (07:19):
You go through these like even mini boom bust cycles,
and it's it's crazy, Like the volatility in this area
is just huge, and you know, you can look back
again through pretty much the whole thing. You know, back
during the h the actual tech bubble, you saw like
(07:39):
an eighty five percent draw down here, like semiconductor stocks,
the reason why typically, like if you look at them
from again two thousand through twenty twenty, we're talking about
a twenty year period where the sector was basically not
a creative and the reason why is that the margins
just get whittled way it becomes commoditized. Why do we
(08:03):
think that AI is any different? Do we think that
like AI semiconductors are not going to go through that?
Of course not, Chuck. There are you know, some differences
in terms of like the architectures are different, and sometimes
you can end up being locked into a certain ecosystem
and that helps, you know, someone maintain margin and things
like that. But I just I am not going to
(08:26):
believe that this is going to be like, hey, guess what,
we We've escaped and now semiconductors are going to be,
you know, more valuable than everything else combined. Yeah, I
don't believe that either, you know, like I just can't
get there. So I firmly again we talked earlier in
(08:48):
our show, you got to be able to hold two
thoughts in your head simultaneously, one of which is this
gonna end badly, the other being maybe not yet because
the demand growth is crazy right now now. The other
piece that can affect demand growth that I think is
interesting right now, a lot of if you talk to
anyone who's at a big tech company, they'll tell you
(09:11):
that a lot of these big tech companies have leader
boards for who uses the most computing capacity in a
single day, and like tech companies are trying to grade
people on that. Remember, compute capacity costs money. At some point,
tech companies and other companies are going to move from
hey we want using the most compute do we want
you producing the most per unit of compute? And when
(09:36):
that happens, that is the potential inflection point in my opinion,
because right now, like it's literally just a race to
be like, hey, who can use the most compute possible?
And as I've said before, if you dig a hole
and then fill it in, you're doing something. You're doing
a lot of work. Yeah, you're generating economic but it's
not productive work. At some point we're going to move
(09:59):
from digging virtual holes and filling them in actually needing
to do productive work. And that's where you know, the
potential inflection point is we're not there yet. Take a
quick break. When we come back, we've got trivia, and
then we're talking Kevin Warsh being confirmed as the new
FED chair right after.
Speaker 1 (10:18):
This, Market insight, retirement strategies, real talk about Wall Street
and economic trends, all live every day on our YouTube channel.
Go to YouTube dot com slash the Financial Exchange Show.
This he's the Financial Exchange. Markets move fast. Follow the
Financial Exchange live on x so you never miss a story. Dace,
(10:39):
He's the Financial Exchange Radio Network.
Speaker 2 (10:48):
Time for sure.
Speaker 4 (10:49):
Here on the Financial Exchange.
Speaker 2 (10:53):
On this day.
Speaker 4 (10:54):
In seventeen eighty seven, delegates gathered in Philadelphia to draw
up the Constitution.
Speaker 2 (11:00):
Of the United States.
Speaker 4 (11:02):
So our trivia question today, how many amendments are in
the Constitution?
Speaker 2 (11:07):
Once again?
Speaker 4 (11:08):
How many amendments are in the Constitution? Be the fourth
person to text us at six one seven three six
two thirteen eighty five with the correct answer, and you'll
win a Financial Exchange Show t shirt.
Speaker 2 (11:22):
Once again.
Speaker 4 (11:22):
The fourth correct response to text us to the number
six one seven three six two thirteen eighty five with
the correct answer along with the keyword trivia, we'll win
that T shirt. See complete contest rules at Financial Exchange
Show dot com.
Speaker 2 (11:36):
Would you ever try to pass an amendment to the Constitution? Definitely? Yeah,
I don't know what I would do, but I feel
like it'd be kind of fun, you know. In any case,
Kevin wars Uh not in the Constitution, but now back
in the Federal Reserve, confirmed yesterday by a fifty four
to forty five Senate vote. I don't know who didn't vote,
(11:59):
because there are a hundred Senators, and one would think
that this would be a vote that you show up for,
but I don't know. Let's see, Oh, here we go.
Senator Kirsten Gilbrand didn't vote. Busy, Why why? Why take
the kids up? You're not going to vote on the
fed chair, have no opinion. You couldn't have, like any
(12:23):
other day, to do whatever it is you were doing.
I'm sorry. I know that this is like kind of
a minutia, but it just seems like kind of a
big deal to not miss this vote.
Speaker 3 (12:31):
She's got vacation plans. In any case, Congress. Members of
Congress are very busy during the summer.
Speaker 2 (12:37):
It's it's May thirteenth, yesterday, We're not even to Memorial
summer and packing. The weather's been crappy all week, Like,
what are we doing here? In any case, Kevin worsh
is now going to be the seventeenth chair of the
Federal Reserve, and so he will be taking over from
(12:58):
Jerome Powell in about a week and his first meeting
is going to be the meeting in thirty four days
concluding on June seventeenth, and so we're going to get
I would assume, our first Kevin Worrish press conference, and
I think it's going to be interesting to see how
(13:20):
he actually attempts to steer the FED now that he
is actually in the chair. I will say, it is
hard for me to think of a worse environment to
enter than the one we are in right now in
recent history, I guess, maybe for any FED chair, for
Kevin worsh specifically for any I mean, Mike, here's the deal.
(13:43):
You've got an inflation picture that is incredibly uncertain. You
have a jobs picture that because of you know, combination
of artificial intelligence and labor supply, is incredibly uncertain. And
you've got a on the fiscal side, a government running
six percent annual deficits, and you've got to figure out
(14:06):
how to make this all work without blowing it up.
Speaker 3 (14:09):
I'll throw in there another significant piece of this, which
is you've got the most significant threat to FED independence
that's probably happened since the Knicks and era. Probably Again
I'm I know, you pooh poo that, but I do
just because I want to see how Warsh actually handles things.
And the reason I bring this up is like Scott
(14:30):
Bessen was talking a whole bunch of stuff about, oh,
when I come in his treasury, I'm gonna do this,
and basically he kept doing the exact same stuff Janet
Yellen was doing because he got in he was like, oh,
if I push that button, things are going to go badly. Yeah,
I'm not so much talking about what Kevin Worsh has said,
rather what President Trump has said, and the President has
wanted his thumb on the scales of the Federal Reserve,
(14:50):
and that makes it challenging even were it's somebody who
hasn't run on a on a candidacy of appeasing the president.
Speaker 2 (14:59):
So again, I'm interested to see. I don't try to
I really try not to prejudge people in roles because
it's like, if we're gonna do that, then we might
as well just cancel the show, you know, like we
might as well just not do the show if we're
gonna say, well, they're gonna do a bad job. Like
I got no idea. We're gonna see how he's going
to do. And it's a challenging environment for him to
(15:21):
enter in into. And I think there are a lot
of cross currencies going to have to navigate successfully in
order to steer the ship over the you know, the
next four years of this term here. So again, his
first meeting is gonna be in thirty four days. Uh.
(15:41):
We may get some changes in communication policy. Like before Powell,
we did not have a press conference every meeting. Maybe
worse goes back to that. Uh, maybe there's some changes
in terms of the style of the readouts that we
get in things like that. Maybe the meeting minutes, you know,
change in terms of their format. He might do away
with the dot plot. The dot pot is not like
(16:02):
a required thing for the FED to do. And so
we'll have to just see what we get because I
don't know, quite honestly, and I try to keep an
open mind. And if he ends up sucking at his job,
well then we'll be able to, you know, Mark FANDETI
will be here to call him a failure. If he doesn't,
then we can call him a tremendous success. But I'm
(16:24):
going to see how the guy does, and I'm gonna
give him the full term as well, because again, there's
times in Powell's most recent term in twenty twenty two,
he and his entire group kind of sucked. Yeah, they
kind of screwed the pooch. I guess last three years
they've been really good.
Speaker 3 (16:42):
That's part of what I want to address, because worsh
is coming in and publicly stating that he wants to
shake up the FED, and I think what he means
by that is he wants to shake up the way
that the Federal Reserve Board thinks about their role and
where we are today and just how these things all
relate to each other. And I think he might get
(17:04):
some of that rope to rethink all that given the
failures of the FED over the course of the last
six years. I don't I don't know that his conclusions
will be right, but there have been some screw ups,
especially in the you know, late stages of COVID leading
into twenty twenty two at the Federal Reserve, and I
(17:25):
think part of that is the thinking of how they
dealt with inflation at that point in time.
Speaker 2 (17:29):
So again, I'm very much not going to you know,
I don't know what he's going to do. Like you
might have, you know, a great start to his tenure
and then the horrible finish. You might have a horrible
start and a great finish. He might be good or
bad for the whole thing. Like I don't know, but
I think it's clearly. Look, we haven't had a new
FED chair in eight years now, It's been a while.
(17:54):
If you go back and look at you know, the
most recent ones that we've had, I gotta be honest
and looking at Powell again, these are all personal views
on this. Sure, Alan Greenspan was handed a gift of
an economy and under his FED, the kind of changes
(18:15):
that happened, you can have a direct line to the
financial crisis because of the actions of the green Span
FED specifically kind of from ninety nine through two thousand
and four, all kinds of changes to like bank you know,
you know, collateral requirements and things like that, things that
you know, we don't think of when we think of
(18:37):
the FED, but all kinds of problems there. Ben Bernaki,
I think you can point to and say, you know,
manage the FED through the greatest financial crisis that we've
seen in our lifetimes, but in doing so ended up
taking a lot of you know, power, basically from Congress,
and I'm not sure you want that all concentrated in
the Fed. Janet Yellen didn't really have to do a
(18:58):
ton It was, you know, twenty five, fourteenth through twenty eighteen.
Speaker 3 (19:01):
Yeah, there wasn't much to be done there. All she
had to do is not buy in that it was
going to be inflationary, right, just she pretty successfully.
Speaker 2 (19:07):
Don't screw it up, and she basically didn't. Powell faced with,
you know, the first real inflationary challenge in forty years
failed during twenty two. But other than twenty twenty two,
I thought Powell was excellent. I think he handled two
thousand very well. I think he handled the last three
years very well. We'll see where worsh ends up landing
when it's all said and done. Quick break here when
(19:28):
we come back. We got the trivia answer, we got
Wall Street Watch and should you really feel so bad
about the economy?
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.
Tell you out full Wall Street Watch, treking the stocks,
the data and the headlines. Driving markets so far today
right here on the Financial Exchange, Radio netw.
Speaker 4 (20:00):
Work markets aren't rally mode, extending their gains by midday
on the heels of impressive earnings from Cisco. Investors are
also keeping a close eye in developments from the summit
between President Trump and Chinese President Jijing. Paying right now,
the Dow up eight tens of a percent, SMP five
hundred up nearly nine tenths of a percent, Nasdaq now
(20:20):
up one percent or two hundred and sixty three points,
RUSSED two thousands up three quarters of a percent. Ten
year Treasure reeled down two basis points at four point
four five one percent, in oil pulling back slightly, trading
right around one hundred dollars a barrel. Cisco rallying fifteen
percent after the tech firm announced it will cut fewer
(20:41):
than four thousand jobs this quarter, or about five percent
of its workforce, so it can allocate more resources into
high growth areas like AI infrastructure. Meanwhile, versant Media Group,
so It's revenue and profit fall in the second quarter
since being spun off from Comcast, but they were better
than expected. The company also reported revenue growth across its
(21:03):
content licensing and digital platforms that stock up over three percent. Elsewhere,
Biogen down over four percent despite the biopharmaceutical company announcing
its experimental Alzheimer's drug will advance into a Phase three trial.
Outdoor products company Yeti impressed with its quarterly results, sending
(21:24):
shares up by six percent, and ticket seller stub Hub
also beat expectation, sending shares surging by nineteen percent. Semiconductor
equipment maker Applied Materials will report after today's closing bell.
I'm Tucker Silvan. That is Wall Street Watch. In the
previous segment, we asked you the trivia question how many
amendments are in the Constitution? That would be twenty seven
(21:48):
and Bill from waltham amass is our trivia winner today,
taking home a Financial Exchange Show t shirt. Congrats to Bill,
and we play trivia every day here on the Financial
Exchange Complete contest rules at Financial Exchange Show dot com.
Speaker 2 (22:03):
The uh University of Michigan consumer sentiment data came out
last week. We covered it. The index came into reading
a forty eight point two, which is the worst it
has ever been. Which you get this piece from CNBC
being like Americans still feel bad about the economy when
(22:23):
will it get better never? And here's the thing. Two
things are true, and again you got to hold these
two views in your head simultaneously. Number One, the economy
is not the worst that it's ever been, very obviously,
Like I gotta be honest, I don't know who's filling
(22:45):
out these surveys, now.
Speaker 3 (22:47):
Don't you think you run into people though that are
that dramatic Every once in a while, I do.
Speaker 2 (22:53):
Yes, the economy is worse than it's ever been. So
hear that from people sometimes.
Speaker 3 (22:58):
This is what I think, and I asked them if
they even remember fifteen years ago.
Speaker 2 (23:04):
This is what I think, is that in the social
media age, we just the way that you actually your
brain ends up being rewired is to post the most
dramatic stuff you can because that gets the most engagement,
and that triggers your dopamine response. And then you're like, oh,
I gotta keep posting like that. That's getting the likes,
(23:24):
And so you just say all these outrageous things like
the moon is made of green cheese, and I'll never
you know, like lawns again because of the worms, and
like just all kinds of weird stuff that you end
up falling into. Man, your social media feed is really different.
I don't go on social media. I haven't been on
my Facebook account in six years. So all of you
(23:44):
listening who tried to friend request me, sorry, I can't
get into it anymore. I know that's to be fair.
I do ask my wife once a year. I'm like, Hey,
do you see anything weird on my Facebook? She's like, no, why,
I'm like, because I don't know how to get back in,
and I haven't been on it since August of twenty one,
and I just want to make sure nothing weird is
(24:06):
going on. So I check in with her once a
year on it. But I just think social media has
so warped our brains that surveys like this are broken.
Because I can tell you this. If you took one
hundred Americans from right now and put them into the
US economy in June of twenty ten, within five minutes,
(24:28):
they'd be like, take me back. They would just curl
up and start crying. Likewise, if you took them from
right now and put them into August of nineteen seventy three,
they'd be like, uh uh, nope, where's the undo button?
Not gonna do it.
Speaker 3 (24:43):
So I heard it put very well by a history
author who you know, was having somebody describe the world
to him as really tragic right now, and his response was,
you know, during the Great Depression, they shut down the zoos,
killed the animals, and distributed the meat. So you're gonna
have a tough time convincing me that the economy right
(25:04):
now is that bad.
Speaker 2 (25:07):
Pardon me why? Like, so you couple that with the
fact that, hey, the economy is tough for a lot
of people right now. Yep, it's been tough for the
last five or six years. There's been again since twenty twenty.
I've gone through this every year. It's just been one
thing after another, just a bludgeting. It's like, Okay, first
you got COVID, then you got you know, the supply shocks.
In twenty one, you got inflation. In twenty two, the
(25:29):
banks are failing. In twenty three, the job market's slow,
and in twenty four, AI is gonna eat our lunch.
In twenty five, oh no, tariff's in twenty five. Yeah,
twenty six is warn the Middle East in gas price
is going up like it's it's been something every year,
So I get it, Like we can feel exhausted, but
we can feel economically exhausted without saying this is the
(25:49):
worst economy ever. Yeah, I'll tell you.
Speaker 3 (25:53):
With the the news moving as quickly as it does,
in spite of the fact that you know, many portfolios
are reaching high watermarks that they've never seen before, I
do completely comprehend how it would be nerve wracking to
make a decision, a big financial life decision right now,
like retirement, buying a house, retiring. And you see some
(26:14):
of that in the data. You know, home purchases are
not moving. Your over year retirements are actually retirements based
on the labor force participation rate might still be happening.
But I can completely comprehend how this moment in time
might lead to some choice paralysis, especially when it comes
to retirement.
Speaker 2 (26:35):
Folks.
Speaker 3 (26:37):
I was speaking with somebody in their late fifties about
this just yesterday. You may go through the exercise and
determine that you still have to work another four or
five years. You might go through an exercise of planning
out you retirement and discover that, hey, I'm I could
pretty comfortably pull this off today. But having the answer
in your back pocket makes just going to work that
(26:59):
much more are tolerable and pleasant, like Hey, yep, I
know I've got a number in the back of my
mind that I need to reach before I can pull
the trigger, or I know I need to make it
through this many more days of work before my financial
plan is going to work. I think what is really
difficult is being in your late fifties early sixties, going
to work every day and not having any certainty that
you'll ever be able to stop. And I know there
(27:21):
are people that are in that position, and I cannot
tell you how many times we have had surprising conversations
with folks that hey, you might be able to pull
this off a lot earlier than you realize, and here's
the path to do that. If you want to try
and answer that question, you might need some help, and
if you'd like help from the Armstrong Advisory Group, we're
(27:43):
here to do so. The numbers eight hundred three nine
three four zero zero one don't work longer than you
have to unless you really want to again eight hundred
three nine three four zero zero one, or you can
check us out online Armstrong Advisory dot com.
Speaker 1 (27:58):
The proceeding was paid for by arms Strong 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. Text us at six one seven three
six two one three eighty five with your comments and
questions about today's show and let us know what you
(28:20):
think about the stories we are covering. This is the
Financial Exchange Radio Network.
Speaker 2 (28:38):
Mike, what do you got for stacoulett?
Speaker 3 (28:40):
I want to talk about restaurants that are najor, adapt
their menus and struggling a little bit. In the days
of GLP one users. There's an estimated I believe, ten
million Americans, about twelve percent of the adult population who
have taken GLP one.
Speaker 2 (28:58):
Drugs ale unintended. Twelve percent of Americans seems high. I thought, oh,
I thought it seems low.
Speaker 3 (29:07):
What portion of Americans are obese? I don't know, I
know more than it's more than twelve percent. Maybe it's
just like my age demo and the people that I
run into.
Speaker 2 (29:15):
But I feel like I feel like, at least in
that you know, age thirty to fifty suburban demo, it
feels like it's close to like twenty five or things. Remember,
you have to be pretty wealthy to be on these things,
do you know.
Speaker 3 (29:29):
I thought they were all kinds of subsidies that came
in in the last like yes, and I mean it's
still I don't know the cost.
Speaker 2 (29:35):
But anyways, I in any case, restaurants are adapting their menus.
Speaker 3 (29:40):
They're focusing well, everyone and their mother is focusing on
higher protein items, smaller portions, and I don't know if
they're going to be successful or not.
Speaker 2 (29:48):
What I will say is, if the cost.
Speaker 3 (29:51):
Of lowering the rates of obesity and heart disease is
a few restaurants having smaller profits, like sign me up,
all on board. I will deal with that societal trade off.
But in the meantime, you are seeing even restaurants like
the Cheesecake Factory completely reshaping their menu with entire sections
devoted to GLP one users who just ain't as hungry
(30:12):
as they use.
Speaker 4 (30:12):
No Page seventy nine of their menu.
Speaker 3 (30:14):
Yeah, yeah, you do have to scroll through the index
of that thing for a while to find the right page,
but you will eventually get there.
Speaker 2 (30:19):
At the Cheesecake Factory, for that lower calorie menu, I'm
not buying this. You don't think it's nope, gonna be
the case. Well, no, I am buying that restaurants are
trying to shrink portions. I think they're trying to do
it because of inflation and it's the only way they
can keep their costs in line.
Speaker 3 (30:34):
Maybe the thing is, like most restaurants that I've seen
are not completely redoing their menu, They're just adding new
sections of lower.
Speaker 2 (30:43):
Like what restaurants you're doing on this? So, like, I
know you mentioned cheesecake Factory. I gotta be honest. I've
been to a lot of restaurants lately for various reasons,
I haven't seen a GLP one section on any.
Speaker 3 (30:54):
I've seen a few of them, and it's mainly chained restaurants.
But I know that, uh is there. No, it wasn't
too cheesy. It was Olive Garden has a has one,
Cheesecake Factory has one. So it's the it's the big
guys that are moving around first, I think, And yeah,
well we'll see if it's a bunch of nonsense. I
know people have been talking about like every time that
(31:16):
a food company reported bad earnings anytime over the last
two years, they've blamed it on weight loss. Drugs, and
so I'm with you there, I'm not sure that there's
actually a there there.
Speaker 2 (31:27):
I'm trying to I'm just pulling up the Olive Garden
menu just because again those of you who have listened
to the show know that you can. You can like
Olive Garden for what it is, which is a great
meeting place for like people of all kinds to like
come together. But I firmly believe it's not Italian food.
(31:48):
Having said that to America, I mean, yeah, I don't
know's Italian food in the same way that Panda expresses
Chinese food exactly. So I think in looking at this,
so you're talking about like this lighter portions menu. So
here's the deal. I'm looking at it right now, and
(32:09):
I've got the lasagna classico, a five hundred col version
for fifteen forty nine. If I were to let's see,
where's the actual where's the regular lasagna? Come on, family
style of Azagnia bundle. No, that's sixty seven hundred calories.
That's not the comp Here we go, here's the regular one.
(32:31):
Here's why I think that you're being scammed by this menu.
Scammed might be a strong word, but here's why I
think that you're being hosed by this menu because like
you are getting what you paid for. It's just you're
paying too much. The regular lasagna classico at Olive Garden
nineteen ninety nine for nine hundred and forty calories, the
one on the Lighter Portions menu fifteen ninety nine for
(32:51):
five hundred. Michael, if one really wanted to eat a
smaller portion, you are better off buying the Lasagnia classico,
splitting it and half and having the other half for
lunch tomorrow. You are, yeah, like, this is why. I
like they are trying. If they really were trying to
make it such that it was just, oh, we want
to offer smaller portions for you, it wouldn't be seventy
(33:14):
five percent of the cost for fifty percent of the calories. Chuck.
Speaker 3 (33:17):
I never said that any of this was designed to
be good for the consumer. I just said that they
are trying to appeal to a customer that is looking
for lower calorie options.
Speaker 2 (33:25):
And they think they can make money on it too.
And I am saying, Tucker put this on the prediction
board okay for twenty thirty, which is not as far
off as we think. The lasagna Classico at Olive Garden
will be one size only, and it will be the
five hundred col version for the nine hundred cal price.
Speaker 3 (33:47):
Say I think that, Chuck, you are vastly overestimating American's
math skills.
Speaker 2 (33:54):
I know I'm correctly estimating them, because what's going to
happen is the small is going to become the norm
and no one and they're gonna think no one can
pick up on it. Yeah, got it, that's what I
They're going to get rid of the big one and
then you're just gonna get left with the small one. Now,
could we all like stand to you know, drop a
pound to two, especially.
Speaker 3 (34:13):
After the Maybe I shouldn't be having a thousand sure
calorie piece of lasagna every night for dinner, I don't know.
Speaker 2 (34:18):
Or maybe I should get the family one at sixty
seven hundred cows and see if I can finish it
in a single serving, because that sounds like a nice
day to me. Yeah. Uh. Piece in the Wall Street
Journal A grades are now suddenly everywhere since the arrival
of chat GPT good. So I saw this piece and
was like, okay, like show me, like what you actually
(34:42):
have here, and here's the the crux of it, and
I quote the share of a's and college classes heavy
on writing and coding, in other words, work more prone
to AI use has grown more significantly than in other
classes since chat GPT's debut. According to a paper from
the University of California, Berkeley released on when Day, professors
teaching AIX post classes gave out thirty percent more a's
(35:04):
and fewer AS and B plus grades. The results suggest
that students have relied on generative AI do better in
their studies, not that these classes of students are learning more.
So this gets the age old question of like, hey,
do you need to be able to do your math
test without the calculator or can you use the calculator
to do it? And in the case of computer science,
(35:26):
quite honestly, I think that if you are not grading
your students on the use of AI for coding, you're
doing them a disservice because that's how it's going to
be done in the future, right, Yeah, Like you want
AI to be used in those courses for the coding
work because that's how they're doing it at the big
companies now.
Speaker 3 (35:41):
Right, Like you could hypothetically have your exam be in
person and block all of the AI systems from being
able to be used during these amp But what would
be the point.
Speaker 2 (35:51):
These people are.
Speaker 3 (35:53):
Only being hired because they have the AI skills to
do the coding correct on the writing stuff.
Speaker 2 (35:58):
The writing stuff I buy because here's the thing. Well,
actually no, I buy it, but I don't. Here here's
here's here are my two problems. Number one, if you
actually read a lot of AI related reasoning, it's hot,
garbage and repetitive. And if I were a professor and
I saw some of the telltale signs of AI writing
(36:19):
in a piece, I would know that you're writing it
using AI and'd be like, get out of here. So
what part don't you buy?
Speaker 3 (36:26):
I mean, the great inflation is pretty clearly happening from
this study, So which part don't you buy that?
Speaker 2 (36:31):
I think that any professor of history or English should
be able to pretty easily identify an AI written piece
and grade it appropriately. Yeah, And I think if you
want to allow AI assisted writing in those courses, that's fine,
and you can grade that as you see fits. But
from a personal perspective, as someone who believes that writing
(36:52):
and developing an argument are critical skills of thought that
you need to teach I would basically have I'd go
old school on it. Here's your blue book, sit down
at the desk and write your essay without any help or.
Speaker 3 (37:06):
Argue your point in person to me. I feel like
that skill is so under valid.
Speaker 2 (37:09):
Do one of your two talk. This is the other thing.
Like my favorite course in college was our financial markets course, which,
like let me hear, I guess two thirds of your
grade was all Socratic method from just the prof asking
questions during the course of the time, like your actual
tests were a really small portion, and like the homework
(37:30):
was not a big piece. It was. No I'm going
to grade you on talking about this stuff in class
because that's going to prove to me that you know it.
So I don't know, maybe we can do more of that.
That sounds fun and nice and wicked smart too. We're
gonna take a quick break for the rest of the day,
but tomorrow we're back and there's no exciting economic data,
(37:55):
so don't tune in for that, but tune in just
because you want to hang out with us for a
couple hours, and if we want to hang out with
you too, we'll see you then
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