May 20, 2024 • 36 mins
Chuck Zodda and Mike Armstrong explain why the 'godfather of AI' believes the adoption of AI will create a serious need for universal basic income. Social Security's 'biggest myth' leads people to claim early. Why that is a mistake. When to treat your 401(k) as a bank. And when to keep it locked up. Some consumers are punting big purchases like pools and mattresses. Why are grocery prices rising so much faster in Massachusetts?
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Financial Exchange with Chuck Zatta and MikeArmstrong a little bit after eleven here,
and markets continue to rally. We'vegot the Dow up another forty points to
forty thousand and forty nine. It'sexciting. S and P five hundred hitting
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a new intra day all time highat fifty three twenty one, up eighteen
points, and the NASDA C upninety nine points to sixteen seven eighty five
tenure US Treasury up two basis pointsto four point four to four percent.
We've got oil down eight cents toseventy nine ninety eight on West Texas Intermediate
tripa national averagur gas prices down onetenth of ascent, Ladies and gentlemen,
(01:49):
nice, three point fifty nine evenfeels good to get that tenth of ascent,
you know down. It's a bigone for me right ahead the World
Day weekend, and I know,I know, very exciting. And we've
got go up nine dollars anounced totwenty four to twenty six and twenty cents.
Mike, are you referred to asthe godfather of anything? No?
(02:09):
Oh wait, yes, I amof What a niece there? You go,
let me other than a human being. Now, are you referred to
as the godfather of a now,Tucker you, No, I'm not either,
I am. But in this piecefrom the BBC, there is a
computer scientist who's regarded as the godfatherof artificial intelligence, and his name is
(02:35):
Professor Jeffrey Hinton. And I'll justgive a couple quotes here. He said,
I was consulted by the people inDowning Street, Downing Street being the
seat of the Prime Minister of theUK, and he said, I was
consulted by the people in Downing Streetand I advised them that universal basic income
was a good idea as it relatedto AI. He felt that while AI
(02:57):
would increase productivity and wealth, themoney would go to the rich and not
to the people whose jobs get lost, and that's going to be very bad
for society. So fascinating topic.Actually, if you had a world in
which one person could wake up everymorning and push a button and everything gets
done, how do you make surethat you are having resources distributed the way
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they should be and what is whatthey should be like? These are some
of the big existential questions that wedon't really get to tackle very often because
I think his point is that underour current form, which is, you
know, basically across the Western worldquasi capitalism, that yeah, if it's
going the way that Professor Hinton thinksit will, that the majority of the
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benefits would go to let's say,Soonder Pachai and shareholders in Microsoft, and
that might not be the best thingfor incommonwealth distribution across the world. I
don't know tough to prove a negativethere, but I would hypothetically, I
would hypothetically buy that. Where Ipush back is that artificial intelligence alone is
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going to be the piece that causesthat. I mean, we've been seeing
continued wealth and income distribution now foracross the Western world for the last I
think thirty or forty years is aboutwhat we have seen there, and so
the question would be does AI bringus to a breaking point on that and
what is the appropriate solution to it? But maybe I guess more than other
(04:34):
technologies that can see how AI wouldwould cause further wealth distribution. Now,
he also has some other interesting thoughts. I want to just set the table
with all this here. He alsosaid that my guess has been in between
five and twenty years from now,there's a probability of fifty percent that will
have to confront the problem of AItrying to take over. That could lead
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to an extinction extension extinction level eventfor humans because we have created a form
of intelligence that is just better thanbiological intelligence, and that's very worrisome for
us. What I'm most concerned aboutis when these can autonomously make the decision
to kill people. And one ofthe things that the DoD has been testing
that they publicized actually is hey,give an AI a list of potential,
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you know, military targets, andhave it suggest which ones should be hit.
Yeah, So there are a fewdifferent things wrapped up in here.
The first is, let's say thatyou do have Let's say that we get
to a point where autonomous systems cando ninety nine percent of the work that
(05:41):
we do today. I'm not sayingthat we're there, but let's ninety nine
is extreme. Can we start atlike twenty Okay, fine, let's say
that they can do twenty percent ofthe work that we do today, which
twenty percent of the work is goingto get done first, the easiest twenty
yes, probably the lowest paying twentyyep. Also, you know it's it's
going to be a much bigger leapof faith for us to say, yep,
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my next you know, bypass surgery, I'm handing off to the AI.
We're gonna say no, make myhappy meal with the AI, because
like there's just less at stake,that's all it is. So you're talking
about, you know that that lowesttwenty percent of wage earners in many cases,
or you know even probably just youknow, a smattering across kind of
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bottom fifty percent of wage earners youcall it, call it almost half of
them being displaced from their jobs.That is a group that very likely,
because of again how easy it isto replace with AI, likely does not
have these skills in many cases tomove up to simply you know, get
a new job doing something else.So what do we do in that situation?
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I don't know, I know whatwe've done historically. I mean,
this is a very different situation.But that exact thing that we're describing is
kind of what happened with American manufacturingtalent, and fair to say that we
did a pretty bad job dealing withthat because we ended up with a bunch
of hollowed out communities yea that havebeen you know, ravaged in many cases
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by you know, addiction problems andstuff from you know, just jobs that
have been lost and you know,centers of activity that have been lost.
So go, yeah, you know, core American manufacturing towns, Core American
coal mining towns, like not longsad stories of how we haven't done anything
to help those communities. Wasn't reallytechnology driven, but similar overall impact.
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Right, jobs disappeared, they weregood paying job or reasonably good paying jobs,
but by a group of people whodid not have broad education to be
able to go back and reinvest ina different type of different type of work.
And we did very little too tohelp them. Agreed, And those
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towns are just hollow out, verysad places in a number of cases now,
and this has the potential to besomething that's coming for us. More
broadly, so, when we talkabout this idea of universal basic income,
if you've been living under a rock, basic premise of it is, hey,
regardless of whether or not you havea job, we are going to
pay you X dollars per month inorder to live in this scenario, I'm
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not saying, like broadly, inthis scenario, good idea, bad idea,
or ugly idea maybe better than doingnothing has a lot of potential pitfalls.
Are what are other ideas that wecan kick around here, Like,
what are the other options that wehave? You know, people suggest,
oh like job retraining. Well,okay, here's the problem with job retraining.
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We're not very good at that.Let's be honest. We're not very
good at simply teaching large groups ofpeople new skills to move into a new
job. For two reasons. Thefirst is finding large groups, so people
that are motivated to learn exactly whatyou're trying to teach them. Yeah,
like they might not all want togo and do whatever you're trying to teach.
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Second piece is identifying what you shouldbe teaching them. If you're teaching
them something that you know is basedon well, you know, we have
the knowledge and ability to do this, and this is what was popular two
years ago, it might not bewhere the jobs are in the future.
Yeah. The piece we covered beforeabout the number of computer science grads graduating
right now with you know, computerscience graduates have increased some forty percent over
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the last decade, and they're graduatinginto a labor market that might not need
them in the same way that peoplepreviously thought that they would. And so
yeah, guessing what type of skillsare going to be needed, I agree,
is challenging. I've got plenty ofother bad ideas, right, Like
we could just try and recap thetechnology to not allow it to take over
these jobs that won't be successful itpitfalls to and ultimately we we want This
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is going to sound really messed upif first, but I promise I'll make
it not sound quite as messed up. We want technology to do more so
there are fewer humans that have todo these things, because ultimately, the
biggest input for any company is thecost of its labor. And the question
then becomes, okay, if wecan improve this such that we are cutting
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that cost and improving productivity, Likethat's how you generate more wealth in a
society is by doing more with less. The problem we need to solve for
is, well, how if youeventually get to the point where one person
can push the button and run thefactory for the day, what do you
do with everyone that you fired?How do you make sure they can eat?
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And I don't have the answer forthat, and I don't think any
of us do. Nope, andI think it's fine for us to admit
that we don't know what we don'tknow, and that we need to spend
some time talking about this, becausethis is not a problem of hey all
these like this is not like everyone'slazy and no one wants to work?
Is no people want to work,and we have technology that's just going to
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do it better potentially, and youwon't have that job anymore. I'm with
you on many of these parts,but I will also just echo something and
again I'm willing to buy that AIis different this time. But this is
the exact same argument that was madeabout the printing press, the cotton gin,
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the Internet, and pretty much everypiece of new emerging technology over the
last since the beginning of time twothousand totalers. So the question remains,
is artificial intelligence different this time?And do we need a different set of
tools to deal with it? AndI also don't have the answer that question.
You don't want to listen to Godfather, I'll listen. This is all
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we have to do. Again,I don't think any of us know exactly
where this is going to go.And most of the time, by the
way, as Mike said, yes, we have this technological progress, and
as I like to point out oftenwhen the printing press was invented, the
stone tablet carvers Union was probably allup in arms they said, Yo,
(12:11):
Gutenberg, you better chill with this. Indeed they did. That's it was
written on the stone tablets. Wesaw it actually. But ultimately you want
this kind of progress, it's howdo we figure out how everything fits after
is something we have to deal with. And the other thing that I will
say, Mike, when we talkabout a lot of those, you know,
(12:33):
inventions that we've seen, it's easyfor us to kind of gloss over
and be like, oh, well, everything turned out fine. Yeah,
but it's bad it necessarily for thepeople who were affected directly by it,
and that's something that we have tolive through when it comes to AI.
Here the latest news on inflation,the FED, the economy and how the
markets are reacting every morning right hereon the Financial Exchange Radio Network. Miss
(12:58):
any of the show, catch upand your cannions by visiting Financial Exchange Show
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news in New England and around thecountry. This is the Financial Exchange Radio
Network, Mike, just before weget to this social Security piece, I
(13:18):
did want to let you know that. Well, actually, I'll pose this
in the form of a question.Oh, how many FED speakers are scheduled
to speak this week? Do Ipose my answer in the form of a
question. Yes, I'm going Idid count this recently, so I'm kind
of cheating, but I think it'seleven. Tucker eight, sixteen, sixteen.
(13:41):
There's already been five today. There'stwo more before the end of the
day. Are you counting Jerome Powell'scommencement address yesterday that is not in here
because the week begins on Monday tofinance markets. Okay, I am counting.
There's number of commencement addresses. There'sa number of interviews on Bloomberg and
or CNBC, so I include those, But sixteen already today Bostick was on
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Bloomberg, and then he gave welcomeremarks to a group. Bar is giving
a keynote speech today, Waller isgiving remarks today, Jefferson is speaking on
the economy and housing, Mesters onBloomberg. They got two Bloombergs today.
Mester's on two PM, and thenBostick's on again, moderating a keynote speech
later on. Bostick's got three thingstoday. That's silly. Can't y'all go
(14:28):
do some work? Says the persontalking on the radio. Yah, says
the present talking for the next twohours. Yeah, here you go.
Social Security the biggest myth that leadspeople to claim early what is it,
Mike, that Social Security is gonnaget cut and run out because it's gonna
run out of money? And whatdid we say now? Twelve years?
(14:48):
Uh? No? Ten? No? I think they extended to twenty six.
I don't think so. No.Now was the latest. That was
the big thing that we covered liketwo weeks ago, was the Social Cit
administration's most recent projections. But maybeyou're right that it's just extended. I
got thirty five, so eleven years. Okay, yeah, better than expected.
(15:09):
But yeah, the trust fund,the bucket of money that has been
paid into by previous generations that isnow being used to pay out benefits that
are more than is being collected,is going to run dry sometime in twenty
thirty five and twenty thirty six.And if Congress did nothing, the way
that the Social Security laws are writtenright now would be that everybody takes about
(15:33):
a nineteen percent here, I thinkI've seen projections between seventeen and twenty percent
in terms of a haircut to theirSocial Security benefits, because that's what the
real states is. We've set upthis trust fund. If the trust fund
runs dry, then that's presumably whathappens. So, Micha, let's suppose
that I turn sixty five and twentythirty and I collect Social Security. Then
indeed, when I five years later, I'm aged seventy, how likely is
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it that I'm going to have totake a seventeen twenty percent haircut at that
point. Well, I have noway to measure that statistically or probability wise,
But if you want my personal opinionon how likely that is, I
think about the same likelihood of you, maybe slightly more likely than you get
instruck by lightning. And here's why. It's not because the trust fund won't
(16:18):
run out of money if we donothing, No, certainly it will.
It's because, ultimately, there isone demographic, and one demographic only that
loves to vote more than everyone else, and that's retirees. And the worst
thing that you can do if youare the party in power heading into twenty
thirty five is just say, well, we tried, good luck, because
(16:44):
those people will never vote for youagain for the rest of their lives.
Probably not. And so even ifthe fix is, hey, you know
what, We're not going to impactyour so security at all. But those
people who are in their forties andfifties are going to have to pay more
taxes, and we're going to reducebenefits for those in their twenties and thirties
when they finally collect out like that, there's some solution that ends up getting
(17:07):
Can we talk about the most likelysolution, which is also probably the dumbest
one in the short term at least, which one's that Congress just says,
screw the trust fund, We're stillgonna pay you. They can do that.
They can do that, They canjust write a lot. It says,
yeah, I know, we don'thave any more money than trust fund,
but print that stuff Treasury and givethem the money. They can do
that. Again, I'm not encouragingthis. I think it's a really dumb
(17:29):
idea. I think we should performthe program to make sure that it actually
has money in it. But inthe absence of that, does anybody look
at the actions of Congress over thelast three decades and think that anything other
than just print the money and giveit to them will be the answer.
Also, sixty two percent of beneficiaries, according to a study from Schroeders,
claimed before their full retirement age.They took Social Security before their full retirement
(17:51):
age, which is between sixty fiveand sixty seven depending on how old you
are. The top reason that peopleclaimed early was not because they needed the
money. They were worried that thetrust fund was going to run out of
money. Again possible, but youreally got to think about that one a
little bit. If you claim early, you are guaranteeing yourself a lower payment
than if you waited. True,it's a big bet to make. Bringing
(18:21):
the latest financial news straight to yourradio every day. It's the Financial Exchange
on the Financial Exchange Radio Network.Find daily interviews and full shows of the
Financial Exchange on our YouTube page.Like us on YouTube and get caught up
on anything and everything you might havemissed. This is the Financial Exchange Radio
Network, mich Let's talk a littlebit about four to one k loans and
(18:47):
there's a piece in the Wall StreetJournal that says, when to treat your
four to one K like a bankand when to keep it locked up.
And I think it's a topic thatdoesn't get discussed enough about how they actually
work. Yeah, and those aretwo Those are not opposites of each other.
Like I would say, never treatyour four oh one K as a
bank, but it can on occasionsmake sense to take a four oh one
K loan. I was actually surprisedthirteen percent of people with four oh one
(19:11):
K accounts had loans against those retirementsavings accounts at the end of last year.
If you're not familiar with how thisworks, you can generally take a
loan of I think it's a maxof fifty thousand dollars from your four oh
one K. When you do so, the money doesn't get invested anymore.
You have to pay yourself back interest. And why that becomes a particularly bad
deal ultimately is yes, you arepaying your self interest, but you're taking
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the money out and then you're havingto basically take money that you've paid taxes
on. Right, So think aboutit. Sure, you get paid your
salary and you've got this loan onyour four oh one K. That means
you have to take your net incomeafter taxes and pay money back into a
four oh one K that you willbe eventually taxed on again when the money
comes back out. Yeah, soit can be quite troublesome. The other
(19:56):
piece that I think in terms ofpitfalls here this four to one K is
most often times the loan on thefour to one K is contingent upon you
being employed by the company. That'snot like any other type of debt out
there. I mean, you mightnot be able to pay your debt out
there, but nobody's gonna call yourloan necessarily just because you get terminated from
(20:18):
your job or quit your job witha four to one K loan most often,
yeah, between thirty and ninety daysto pay that back, and most
often in my in my experience,is the way it ends up getting paid
back if you get fired is youhave to take a pre fifty nine and
a half withdrawal off of the fourto one K balance to pay off the
loan. You're gonna face a penalty, you're gonna face tax, You're gonna
(20:40):
face a whole mess if you endup having to do that. So there
are a bunch of pitfalls I think, is what I'm trying to get across
here. In this interest rate environment, there actually can be some intelligent places
where it can make sense to touchthis thing, which I'm very hesitant to
even acknowledge as as a financial advisor. But you know, if you've got
(21:02):
a giant credit card bill at twentypercent interest, it'd be really tough for
me to say, yeah, youshould never use that four oh one K.
I think the problem that I faceis, even with the mathematical sense
it can make to use a fouroh one K loan as a solution to
a lot of these things, theproblem that I would have would just be,
what's the likelihood of someone landing rightback in this same situation right six,
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nine, twelve months from now?That would be the very first step
before you're going to talk about refinancingany sort of debt or tapping into your
four oh one K, is isthis going to actually help solve the problem
or just kick the can back downthe road? Right like? That would
be phase one for me, isif I'm going to look at tapping my
four oh one K, what lifestylechoices am I going to have to make
(21:47):
to make sure that I never getin this position again? Because you're just
robbing from yourself you're borrowing from yourselfyour own financial future to be able to
do so. If you're facing aproblem like this, if someone you know
is trying to decide, Hey,what debt do I pay down fastest?
Which one do I focus on?Should I be focusing on saving for retirement
or paying off a loan of onesort or another. These are the types
(22:11):
of questions that financial advisors assist withevery day, and quite honestly, while
there may be some people on radioTV that are willing to just dole out
that advice willy nilly without any specializationor without any specificity to your situation,
that's not the right thing to do. You do need to actually get into
the weeds and understand what type ofsituation you're in before assessing this situation.
(22:37):
You may be considering a four toone K loan or have one out if
you are trying to figure out wherethat goes next and how to best utilize
it and how to best assess thedebts that are out there for you.
Give the folks at Armstrong Advisory Groupa call number here is eight hundred three
nine three four zero zero. Onewill sit down with you to develop an
overall financial strategy that focuses on youreventual retirement. Again, that number is
(23:00):
eight hundred three nine three four zerozero one. The proceeding was paid for
by Armstrong Advisory Group, a registeredinvestment advisor. Nothing in the ad or
in any Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax and to stateplanning advisors before making any investment decisions.
Armstrong may contact you to offer investmentadvisory services. Piece from CNBC. Some
(23:22):
consumers are punting big purchases like poolsand mattresses. So the cover image on
this piece is a guy working oninstalling an in ground pool, and I'm
sitting there, I'm going those thingsaren't really equal in terms of the scale.
You're talking what does it cost toput an in ground pool in?
Right? I mean at least atleast seventy five mattresses. I can answer
(23:45):
that question for you. Okay,what do you got? I have a
buddy of mine who last last yearwent around and got quotes. He was
buying a new place and wanted toget a pool put in and wasn't looking
for anything. You know, crazyfancy, no water slides, water falls,
dipsy do whatever you know, justa pandared rectangular pool and this is
(24:06):
in the New England area. Sure, you know, normal size maybe like
I don't know, thirty feet long, fifteen twenty feet wide, something like
that. And the quotes that hegot for an inground pool, you know,
gunn eight sides and stuff like that. I guess, yes, buck
fifty. The cheapest was one twentyfive, the most expensive was two hundred.
Yeah, and you know you thousand, by the way, because then
(24:29):
you do realize that, by theway, do you know that Sam's Club
right now does sell an above groundpool eighteen feet wide for four hundred dollars.
That's as cheap as a mattress.Yep, Okay, So maybe that's
the pools they're talking about. There'sother ones that I'm looking on. You
can get Amazon a sixteen by fiftyI'm sorry, sixteen by thirty two to
fifty two inch deep above ground poolfor two thousand dollars. So, like
(24:51):
I can understand comparing that to amattress. Yeah, not an inground pool,
which is way way more. Butthis is a real thing that we
are seeing here where. And Iget it that if you put off the
decision on what to do with yourhome over the last few years, because
you might not want to live therefor a long term, or you might
be looking to upgrade, or anynumber of different situations. I can see
(25:11):
how this is starting to weigh onsome of these sectors. I think,
generally speaking, pool installers are prettybusy, but you're starting to see it
in some of these areas. Andthe good news on that front is I
don't think it lasts very long,because I do think that home purchases are
going to start going through soon.I do think that people are either going
(25:32):
to kind of put up or shutup. Right. It's like, Okay,
do I go and improve my homenow and just commit to staying here
for the next decade, or canI do I think I can find a
better deal elsewhere. Can we talkmattresses for a second, because this is
something I do find fascinating, Okay, not like on your choice of mattress.
I could care less. Actually Icouldn't care less. Okay. I
always bothers me when people say Icould care less. No, you couldn't.
(25:56):
The sleep number CEO Shelly Iboch theyinterview, is that a this is
one of those names. I don'tknow if it's a him or herchel.
It can go either way. I'mgonna say her. The consumers purchasing power
is limited. As a result,consumers tend to scrutinize their spending and make
near terms I was right, correct, great, uh, and make near
term decisions based primarily on need,price, and perceived value, and they
(26:19):
are deferring higher ticket, durable purchases. The mattress industry is in a historic
recession. So this is something Ididn't have on my bingo card, quite
honestly, and I'm trying to makesense out of it in terms of the
timeline for buying these. Because whilewe talked about people moving into you know,
new homes and stuff like that,or renovating generally, I was under
(26:41):
the assumption that when you move toa new place, you're usually keeping your
mattress, or if you're doing arenovation, you're usually keep Like a mattress
is not something that you replace duringa renovation most of the time. Not
for me, no, So Imean, when when we moved, we
opted to get a new mattress.Huh, it's interesting. I could have
(27:03):
guess how old you're mattresses at yourold place or whatever. Yeah, they
are pain to move. Take upa lot of that, you know,
try to Now. The other questionthat I have on this is our mattresses,
the new men's underwear index. Iforget who was it? Peter Lynch,
you, you know, kind ofcoined the term. I forget who
it was. I don't know.The private is that one of the best
recession indicators is men's underwear because whenthings get bad, they just say,
(27:27):
you know what, it's got holesin it. I'll tough it out.
It's fine. When things get better, yep, time to buy the new
ondies, like we got to loadup. I don't think. Do mattresses
function the same way? I don'tthink. And that's why I'm confused about
this mattress recession, because when yourmattress gets to a point where it's like,
can't sleep on this anymore, Ithink you kind of just greenspan by
(27:51):
the way, green span, Okay, there you go. It just feels
like an item where I think maybethe mattress industry has just way overdone it,
Like how many shipped to you mattresscompanies are there out there? And
then why when I go into anyreasonably populated area, are there as many
(28:12):
mattress stores as there are banks.It's true. Maybe just over there is
an explanation for that, but Ican't remember it. Yeah, there was
the conspiracy theory going around Reddit fora while that one. What were they?
It was? What was it?It was? It was drugs?
Was drugs? Yeah, Mexican cartel. Yeah, which obviously like is not
(28:36):
the case, Like why are thosestores empty? Man? So money laundering,
It's it's not that. No,probably not sure about that. If
it's on Reddit, it's Reddit.I'm pretty sure about it. I'm pretty
sure about it. But uh,let's take a quick break here and when
we come back, we'll do somestack roulette. Text us six on seven
(29:00):
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let us know what you think aboutthe stories we are covering. This is
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(29:26):
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passport required, all money to exchange. Go to visit USVII dot com and
(29:48):
book your trip today. That's visitUSVII dot com. Mike, what do
you have for me for the ruleOtte of the Stack? Grocery prices in
Massachusetts, specifically the Greater Boston areaare rising faster than and in most of
the country. I thought we werekind of done with this because nationally you
are seeing grocery prices stabilized, butin Massachusetts it's not the case. And
(30:08):
I don't buy the reason that theBoston Globe is arguing that this is occurring
is that we have to bring ourgroceries in through the liquefied grocery transport system
in Boston Harbor. No, they'resaying that the reason is that the metro
area is home to a plethora oflocal, regional, and national chains,
each controlling only a relatively modest pieceof consumers grocery dollars. So what they
(30:30):
are saying is more competition and alack of a big prominent player like Kroger
in the New England market is leadingto higher grocery prices, and I just
don't buy it. I think thatthere are plenty of take I'll give them
(30:51):
that. Yeah, So I meanthe argument is, hey, you know,
if you don't have a Kroger inthe market, then there's not enough
size and market power to reduce pricesand pressure your suppliers. And I just
I'm not even close to buying thisone. So if you want my explanation,
we have among the lowest unemployment ratein the country, we have some
of the highest low minimum or veryhigh minimum wage, we have high labor
(31:15):
costs in general in the Creator areaarea. And I will also I have
no evidence to support this one,but the lack of wine and beer sales
at the majority of grocery stores Ihave to think causes these stores to run
it at a lower operating margin thannationally in comparison, because I know that
(31:37):
liquor stores, for example, generallyoperate with like a twenty to forty percent
margin, whereas a grocery stores atlike five. And so if you can't
sell beer wine and liquor. ThenI would imagine you're trying to make your
full margin on the grocery items,and that could be more challenging. You
know, the solution is to thissell liquor and grocery stores soup tubes.
No, that's not going to fixthe problem. Soub Yeah, that seems
(32:00):
like a big infrastructure project. Iwant to talk about skipping coffee because there's
a piece in the Wall Street Journalit says skipping coffee is the latest humble
brag. Now, those of youwho have listened to the show for a
while, you know that I don'tdrink coffee, and I'm not humble about
it. I brag about it quiteoften that I have more energy than Mike
despite not drinking any coffee. Butthis piece is kind of embarrassing for some
(32:22):
of the people in it. I'mlike, just in terms of the things
that they talk about doing, theseare not things that human beings like do
or that we know anything about.So Brian Johnson, who is the founder
of venmo the full name is BraintreeVenmo, even though they're not based in
Braintree, Massachusetts, I believe heis trying to figure out how to reverse
(32:43):
age himself. He says, newsocial norms are emerging, So instead of
turning to caffeine when dealing with jetlag, he just did a three minute
cryotherapy appointment. Yeah obviously, Yeah, just like normal humans do a little
out of touch, really, Brian, Like, okay, I'm just trying
to picture how this would work forthe morning rush, Like, okay,
(33:04):
everyone's trying to get up and youpull into like a former car wash that
is now just spraying ice into yourvehicle. Yeah, how do you?
You can't cryotherapy your way out ofthis? For furthermore, we just don't
know if it works, well,Chuck. We do lots of stupid things
to make ourselves look younger that mightnot work. Okay, sootherapy isn't the
(33:28):
first one to come about. That'sanother one here. Supermodeled Giselle starts her
mornings with room temperature water with abit of lemon and Celtic salt. Celtic.
Yeah, Celtic Is that a thing? Yea Celtic salt is a thing.
Yeah, she's not getting like,you know, Boston Celtic's themes.
I thought I thought it was likeit turned the water green. I didn't
(33:50):
know what kind of what do youdo with this salt? I have no
idea. Is it different from regularsalt? Or is this like the Himalayan
pink salt that's actually the exact same. It doesn't taste any different. Probably
that. So what is with this? Like the skipping coffee is the next
in line from you know, everybodymonitoring their sleep and going to bed at
(34:13):
seven thirty pm and bragging about howmuch they slept. I don't really,
I don't know. In my circle, it's mainly bragging about, uh,
you know, like Tucker comes inand tells us how he slept like two
and a half hours last night andis existing only on coffee for the last
two days. Like that's the bragthat I want to hear about, Not
Oh I slept nine hours and Idon't need coffee anymore. No, not
(34:37):
buying it? Here's the thing?Does It makes for an interesting conversation.
I'm not a coffee guy, mostlybecause, as Mike says, he's kind
of nervous what I would be likeon coffee. I am too. I
just I don't think I need thatin my life. But if all we're
trying to reduce do is like reduceour lives to the most boring things possible
(34:58):
in order to live longer. That'snot a life worth living. Like on
Saturday night, had a couple peopleover, We had a few bottles of
wine and had a great time.Yeah, and that's not good for my
life. Expectancy might die a littlebit earlier, but I'm better off having
had a little bit of fun.And you know, like it's just we
(35:20):
can't become the artificial intelligence that we'retrying to prevent from us creating. If
all we want to do is bea robot who lives a long time,
it's a horrible life in my opinion. And it's yeah, that's where I
feel like we're trending with everyone like, oh I want to live longer.
No, I want to live afuller and better life. You know,
(35:42):
like if yes, I don't wantto skydive every day and die at you
know, thirty nine, because thatwould just be kind of like you can
go too far as what I'm sayingas well, But there's a bet I
don't want to follow the Tom Bradydiet just to be Mike, who's not
an athlete. I'm not going tobe a professional anything other than what I
already do. So let's just livesome life, listen to some music a
(36:05):
little bit too loud, occasionally,have a drink too many, get an
uber, so we don't drink anddrive and call it a day. Chuck's
out of encouraging binge drinking here atthe Financial Exchange. Thanks, I know
what I'm having for lunch. Alcohol. Let's take a break for the rest
of the day so we can havesome fun and we'll see tomorrow on the Financial Exchange
The Financial Exchanges produced by Money MattersRadio and is hosted by employees of the
Armstrong Advisory Group, a registered investmentadvisor that provides investment advisory services. All
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Armstrong Advisory or anyone else, anddo not guarantee profit. Investments can lose
money. This program does not offerany specific financial or investment advice. Please
(00:21):
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(01:02):
The DAV five K Boston is presentedby Veterans Development Corporation. This is the
Financial Exchange with Chuck Zatta and MikeArmstrong a little bit after eleven here,
and markets continue to rally. We'vegot the Dow up another forty points to
forty thousand and forty nine. It'sexciting. S and P five hundred hitting
(01:25):
a new intra day all time highat fifty three twenty one, up eighteen
points, and the NASDA C upninety nine points to sixteen seven eighty five
tenure US Treasury up two basis pointsto four point four to four percent.
We've got oil down eight cents toseventy nine ninety eight on West Texas Intermediate
tripa national averagur gas prices down onetenth of ascent, Ladies and gentlemen,
(01:49):
nice, three point fifty nine evenfeels good to get that tenth of ascent,
you know down. It's a bigone for me right ahead the World
Day weekend, and I know,I know, very exciting. And we've
got go up nine dollars anounced totwenty four to twenty six and twenty cents.
Mike, are you referred to asthe godfather of anything? No?
(02:09):
Oh wait, yes, I amof What a niece there? You go,
let me other than a human being. Now, are you referred to
as the godfather of a now,Tucker you, No, I'm not either,
I am. But in this piecefrom the BBC, there is a
computer scientist who's regarded as the godfatherof artificial intelligence, and his name is
(02:35):
Professor Jeffrey Hinton. And I'll justgive a couple quotes here. He said,
I was consulted by the people inDowning Street, Downing Street being the
seat of the Prime Minister of theUK, and he said, I was
consulted by the people in Downing Streetand I advised them that universal basic income
was a good idea as it relatedto AI. He felt that while AI
(02:57):
would increase productivity and wealth, themoney would go to the rich and not
to the people whose jobs get lost, and that's going to be very bad
for society. So fascinating topic.Actually, if you had a world in
which one person could wake up everymorning and push a button and everything gets
done, how do you make surethat you are having resources distributed the way
(03:23):
they should be and what is whatthey should be like? These are some
of the big existential questions that wedon't really get to tackle very often because
I think his point is that underour current form, which is, you
know, basically across the Western worldquasi capitalism, that yeah, if it's
going the way that Professor Hinton thinksit will, that the majority of the
(03:46):
benefits would go to let's say,Soonder Pachai and shareholders in Microsoft, and
that might not be the best thingfor incommonwealth distribution across the world. I
don't know tough to prove a negativethere, but I would hypothetically, I
would hypothetically buy that. Where Ipush back is that artificial intelligence alone is
(04:11):
going to be the piece that causesthat. I mean, we've been seeing
continued wealth and income distribution now foracross the Western world for the last I
think thirty or forty years is aboutwhat we have seen there, and so
the question would be does AI bringus to a breaking point on that and
what is the appropriate solution to it? But maybe I guess more than other
(04:34):
technologies that can see how AI wouldwould cause further wealth distribution. Now,
he also has some other interesting thoughts. I want to just set the table
with all this here. He alsosaid that my guess has been in between
five and twenty years from now,there's a probability of fifty percent that will
have to confront the problem of AItrying to take over. That could lead
(04:56):
to an extinction extension extinction level eventfor humans because we have created a form
of intelligence that is just better thanbiological intelligence, and that's very worrisome for
us. What I'm most concerned aboutis when these can autonomously make the decision
to kill people. And one ofthe things that the DoD has been testing
that they publicized actually is hey,give an AI a list of potential,
(05:19):
you know, military targets, andhave it suggest which ones should be hit.
Yeah, So there are a fewdifferent things wrapped up in here.
The first is, let's say thatyou do have Let's say that we get
to a point where autonomous systems cando ninety nine percent of the work that
(05:41):
we do today. I'm not sayingthat we're there, but let's ninety nine
is extreme. Can we start atlike twenty Okay, fine, let's say
that they can do twenty percent ofthe work that we do today, which
twenty percent of the work is goingto get done first, the easiest twenty
yes, probably the lowest paying twentyyep. Also, you know it's it's
going to be a much bigger leapof faith for us to say, yep,
(06:03):
my next you know, bypass surgery, I'm handing off to the AI.
We're gonna say no, make myhappy meal with the AI, because
like there's just less at stake,that's all it is. So you're talking
about, you know that that lowesttwenty percent of wage earners in many cases,
or you know even probably just youknow, a smattering across kind of
(06:26):
bottom fifty percent of wage earners youcall it, call it almost half of
them being displaced from their jobs.That is a group that very likely,
because of again how easy it isto replace with AI, likely does not
have these skills in many cases tomove up to simply you know, get
a new job doing something else.So what do we do in that situation?
(06:54):
I don't know, I know whatwe've done historically. I mean,
this is a very different situation.But that exact thing that we're describing is
kind of what happened with American manufacturingtalent, and fair to say that we
did a pretty bad job dealing withthat because we ended up with a bunch
of hollowed out communities yea that havebeen you know, ravaged in many cases
(07:15):
by you know, addiction problems andstuff from you know, just jobs that
have been lost and you know,centers of activity that have been lost.
So go, yeah, you know, core American manufacturing towns, Core American
coal mining towns, like not longsad stories of how we haven't done anything
to help those communities. Wasn't reallytechnology driven, but similar overall impact.
(07:36):
Right, jobs disappeared, they weregood paying job or reasonably good paying jobs,
but by a group of people whodid not have broad education to be
able to go back and reinvest ina different type of different type of work.
And we did very little too tohelp them. Agreed, And those
(07:58):
towns are just hollow out, verysad places in a number of cases now,
and this has the potential to besomething that's coming for us. More
broadly, so, when we talkabout this idea of universal basic income,
if you've been living under a rock, basic premise of it is, hey,
regardless of whether or not you havea job, we are going to
pay you X dollars per month inorder to live in this scenario, I'm
(08:24):
not saying, like broadly, inthis scenario, good idea, bad idea,
or ugly idea maybe better than doingnothing has a lot of potential pitfalls.
Are what are other ideas that wecan kick around here, Like,
what are the other options that wehave? You know, people suggest,
oh like job retraining. Well,okay, here's the problem with job retraining.
(08:46):
We're not very good at that.Let's be honest. We're not very
good at simply teaching large groups ofpeople new skills to move into a new
job. For two reasons. Thefirst is finding large groups, so people
that are motivated to learn exactly whatyou're trying to teach them. Yeah,
like they might not all want togo and do whatever you're trying to teach.
(09:07):
Second piece is identifying what you shouldbe teaching them. If you're teaching
them something that you know is basedon well, you know, we have
the knowledge and ability to do this, and this is what was popular two
years ago, it might not bewhere the jobs are in the future.
Yeah. The piece we covered beforeabout the number of computer science grads graduating
right now with you know, computerscience graduates have increased some forty percent over
(09:30):
the last decade, and they're graduatinginto a labor market that might not need
them in the same way that peoplepreviously thought that they would. And so
yeah, guessing what type of skillsare going to be needed, I agree,
is challenging. I've got plenty ofother bad ideas, right, Like
we could just try and recap thetechnology to not allow it to take over
these jobs that won't be successful itpitfalls to and ultimately we we want This
(09:58):
is going to sound really messed upif first, but I promise I'll make
it not sound quite as messed up. We want technology to do more so
there are fewer humans that have todo these things, because ultimately, the
biggest input for any company is thecost of its labor. And the question
then becomes, okay, if wecan improve this such that we are cutting
(10:20):
that cost and improving productivity, Likethat's how you generate more wealth in a
society is by doing more with less. The problem we need to solve for
is, well, how if youeventually get to the point where one person
can push the button and run thefactory for the day, what do you
do with everyone that you fired?How do you make sure they can eat?
(10:43):
And I don't have the answer forthat, and I don't think any
of us do. Nope, andI think it's fine for us to admit
that we don't know what we don'tknow, and that we need to spend
some time talking about this, becausethis is not a problem of hey all
these like this is not like everyone'slazy and no one wants to work?
Is no people want to work,and we have technology that's just going to
(11:05):
do it better potentially, and youwon't have that job anymore. I'm with
you on many of these parts,but I will also just echo something and
again I'm willing to buy that AIis different this time. But this is
the exact same argument that was madeabout the printing press, the cotton gin,
(11:26):
the Internet, and pretty much everypiece of new emerging technology over the
last since the beginning of time twothousand totalers. So the question remains,
is artificial intelligence different this time?And do we need a different set of
tools to deal with it? AndI also don't have the answer that question.
You don't want to listen to Godfather, I'll listen. This is all
(11:50):
we have to do. Again,I don't think any of us know exactly
where this is going to go.And most of the time, by the
way, as Mike said, yes, we have this technological progress, and
as I like to point out oftenwhen the printing press was invented, the
stone tablet carvers Union was probably allup in arms they said, Yo,
(12:11):
Gutenberg, you better chill with this. Indeed they did. That's it was
written on the stone tablets. Wesaw it actually. But ultimately you want
this kind of progress, it's howdo we figure out how everything fits after
is something we have to deal with. And the other thing that I will
say, Mike, when we talkabout a lot of those, you know,
(12:33):
inventions that we've seen, it's easyfor us to kind of gloss over
and be like, oh, well, everything turned out fine. Yeah,
but it's bad it necessarily for thepeople who were affected directly by it,
and that's something that we have tolive through when it comes to AI.
Here the latest news on inflation,the FED, the economy and how the
markets are reacting every morning right hereon the Financial Exchange Radio Network. Miss
(12:58):
any of the show, catch upand your cannions by visiting Financial Exchange Show
dot com and clicking the on demandicon, where you'll find all of our
interviews in full showers. This isyour home for the latest business and financial
news in New England and around thecountry. This is the Financial Exchange Radio
Network, Mike, just before weget to this social Security piece, I
(13:18):
did want to let you know that. Well, actually, I'll pose this
in the form of a question.Oh, how many FED speakers are scheduled
to speak this week? Do Ipose my answer in the form of a
question. Yes, I'm going Idid count this recently, so I'm kind
of cheating, but I think it'seleven. Tucker eight, sixteen, sixteen.
(13:41):
There's already been five today. There'stwo more before the end of the
day. Are you counting Jerome Powell'scommencement address yesterday that is not in here
because the week begins on Monday tofinance markets. Okay, I am counting.
There's number of commencement addresses. There'sa number of interviews on Bloomberg and
or CNBC, so I include those, But sixteen already today Bostick was on
(14:03):
Bloomberg, and then he gave welcomeremarks to a group. Bar is giving
a keynote speech today, Waller isgiving remarks today, Jefferson is speaking on
the economy and housing, Mesters onBloomberg. They got two Bloombergs today.
Mester's on two PM, and thenBostick's on again, moderating a keynote speech
later on. Bostick's got three thingstoday. That's silly. Can't y'all go
(14:28):
do some work? Says the persontalking on the radio. Yah, says
the present talking for the next twohours. Yeah, here you go.
Social Security the biggest myth that leadspeople to claim early what is it,
Mike, that Social Security is gonnaget cut and run out because it's gonna
run out of money? And whatdid we say now? Twelve years?
(14:48):
Uh? No? Ten? No? I think they extended to twenty six.
I don't think so. No.Now was the latest. That was
the big thing that we covered liketwo weeks ago, was the Social Cit
administration's most recent projections. But maybeyou're right that it's just extended. I
got thirty five, so eleven years. Okay, yeah, better than expected.
(15:09):
But yeah, the trust fund,the bucket of money that has been
paid into by previous generations that isnow being used to pay out benefits that
are more than is being collected,is going to run dry sometime in twenty
thirty five and twenty thirty six.And if Congress did nothing, the way
that the Social Security laws are writtenright now would be that everybody takes about
(15:33):
a nineteen percent here, I thinkI've seen projections between seventeen and twenty percent
in terms of a haircut to theirSocial Security benefits, because that's what the
real states is. We've set upthis trust fund. If the trust fund
runs dry, then that's presumably whathappens. So, Micha, let's suppose
that I turn sixty five and twentythirty and I collect Social Security. Then
indeed, when I five years later, I'm aged seventy, how likely is
(15:58):
it that I'm going to have totake a seventeen twenty percent haircut at that
point. Well, I have noway to measure that statistically or probability wise,
But if you want my personal opinionon how likely that is, I
think about the same likelihood of you, maybe slightly more likely than you get
instruck by lightning. And here's why. It's not because the trust fund won't
(16:18):
run out of money if we donothing, No, certainly it will.
It's because, ultimately, there isone demographic, and one demographic only that
loves to vote more than everyone else, and that's retirees. And the worst
thing that you can do if youare the party in power heading into twenty
thirty five is just say, well, we tried, good luck, because
(16:44):
those people will never vote for youagain for the rest of their lives.
Probably not. And so even ifthe fix is, hey, you know
what, We're not going to impactyour so security at all. But those
people who are in their forties andfifties are going to have to pay more
taxes, and we're going to reducebenefits for those in their twenties and thirties
when they finally collect out like that, there's some solution that ends up getting
(17:07):
Can we talk about the most likelysolution, which is also probably the dumbest
one in the short term at least, which one's that Congress just says,
screw the trust fund, We're stillgonna pay you. They can do that.
They can do that, They canjust write a lot. It says,
yeah, I know, we don'thave any more money than trust fund,
but print that stuff Treasury and givethem the money. They can do
that. Again, I'm not encouragingthis. I think it's a really dumb
(17:29):
idea. I think we should performthe program to make sure that it actually
has money in it. But inthe absence of that, does anybody look
at the actions of Congress over thelast three decades and think that anything other
than just print the money and giveit to them will be the answer.
Also, sixty two percent of beneficiaries, according to a study from Schroeders,
claimed before their full retirement age.They took Social Security before their full retirement
(17:51):
age, which is between sixty fiveand sixty seven depending on how old you
are. The top reason that peopleclaimed early was not because they needed the
money. They were worried that thetrust fund was going to run out of
money. Again possible, but youreally got to think about that one a
little bit. If you claim early, you are guaranteeing yourself a lower payment
than if you waited. True,it's a big bet to make. Bringing
(18:21):
the latest financial news straight to yourradio every day. It's the Financial Exchange
on the Financial Exchange Radio Network.Find daily interviews and full shows of the
Financial Exchange on our YouTube page.Like us on YouTube and get caught up
on anything and everything you might havemissed. This is the Financial Exchange Radio
Network, mich Let's talk a littlebit about four to one k loans and
(18:47):
there's a piece in the Wall StreetJournal that says, when to treat your
four to one K like a bankand when to keep it locked up.
And I think it's a topic thatdoesn't get discussed enough about how they actually
work. Yeah, and those aretwo Those are not opposites of each other.
Like I would say, never treatyour four oh one K as a
bank, but it can on occasionsmake sense to take a four oh one
K loan. I was actually surprisedthirteen percent of people with four oh one
(19:11):
K accounts had loans against those retirementsavings accounts at the end of last year.
If you're not familiar with how thisworks, you can generally take a
loan of I think it's a maxof fifty thousand dollars from your four oh
one K. When you do so, the money doesn't get invested anymore.
You have to pay yourself back interest. And why that becomes a particularly bad
deal ultimately is yes, you arepaying your self interest, but you're taking
(19:34):
the money out and then you're havingto basically take money that you've paid taxes
on. Right, So think aboutit. Sure, you get paid your
salary and you've got this loan onyour four oh one K. That means
you have to take your net incomeafter taxes and pay money back into a
four oh one K that you willbe eventually taxed on again when the money
comes back out. Yeah, soit can be quite troublesome. The other
(19:56):
piece that I think in terms ofpitfalls here this four to one K is
most often times the loan on thefour to one K is contingent upon you
being employed by the company. That'snot like any other type of debt out
there. I mean, you mightnot be able to pay your debt out
there, but nobody's gonna call yourloan necessarily just because you get terminated from
(20:18):
your job or quit your job witha four to one K loan most often,
yeah, between thirty and ninety daysto pay that back, and most
often in my in my experience,is the way it ends up getting paid
back if you get fired is youhave to take a pre fifty nine and
a half withdrawal off of the fourto one K balance to pay off the
loan. You're gonna face a penalty, you're gonna face tax, You're gonna
(20:40):
face a whole mess if you endup having to do that. So there
are a bunch of pitfalls I think, is what I'm trying to get across
here. In this interest rate environment, there actually can be some intelligent places
where it can make sense to touchthis thing, which I'm very hesitant to
even acknowledge as as a financial advisor. But you know, if you've got
(21:02):
a giant credit card bill at twentypercent interest, it'd be really tough for
me to say, yeah, youshould never use that four oh one K.
I think the problem that I faceis, even with the mathematical sense
it can make to use a fouroh one K loan as a solution to
a lot of these things, theproblem that I would have would just be,
what's the likelihood of someone landing rightback in this same situation right six,
(21:26):
nine, twelve months from now?That would be the very first step
before you're going to talk about refinancingany sort of debt or tapping into your
four oh one K, is isthis going to actually help solve the problem
or just kick the can back downthe road? Right like? That would
be phase one for me, isif I'm going to look at tapping my
four oh one K, what lifestylechoices am I going to have to make
(21:47):
to make sure that I never getin this position again? Because you're just
robbing from yourself you're borrowing from yourselfyour own financial future to be able to
do so. If you're facing aproblem like this, if someone you know
is trying to decide, Hey,what debt do I pay down fastest?
Which one do I focus on?Should I be focusing on saving for retirement
or paying off a loan of onesort or another. These are the types
(22:11):
of questions that financial advisors assist withevery day, and quite honestly, while
there may be some people on radioTV that are willing to just dole out
that advice willy nilly without any specializationor without any specificity to your situation,
that's not the right thing to do. You do need to actually get into
the weeds and understand what type ofsituation you're in before assessing this situation.
(22:37):
You may be considering a four toone K loan or have one out if
you are trying to figure out wherethat goes next and how to best utilize
it and how to best assess thedebts that are out there for you.
Give the folks at Armstrong Advisory Groupa call number here is eight hundred three
nine three four zero zero. Onewill sit down with you to develop an
overall financial strategy that focuses on youreventual retirement. Again, that number is
(23:00):
eight hundred three nine three four zerozero one. The proceeding was paid for
by Armstrong Advisory Group, a registeredinvestment advisor. Nothing in the ad or
in any Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial tax and to stateplanning advisors before making any investment decisions.
Armstrong may contact you to offer investmentadvisory services. Piece from CNBC. Some
(23:22):
consumers are punting big purchases like poolsand mattresses. So the cover image on
this piece is a guy working oninstalling an in ground pool, and I'm
sitting there, I'm going those thingsaren't really equal in terms of the scale.
You're talking what does it cost toput an in ground pool in?
Right? I mean at least atleast seventy five mattresses. I can answer
(23:45):
that question for you. Okay,what do you got? I have a
buddy of mine who last last yearwent around and got quotes. He was
buying a new place and wanted toget a pool put in and wasn't looking
for anything. You know, crazyfancy, no water slides, water falls,
dipsy do whatever you know, justa pandared rectangular pool and this is
(24:06):
in the New England area. Sure, you know, normal size maybe like
I don't know, thirty feet long, fifteen twenty feet wide, something like
that. And the quotes that hegot for an inground pool, you know,
gunn eight sides and stuff like that. I guess, yes, buck
fifty. The cheapest was one twentyfive, the most expensive was two hundred.
Yeah, and you know you thousand, by the way, because then
(24:29):
you do realize that, by theway, do you know that Sam's Club
right now does sell an above groundpool eighteen feet wide for four hundred dollars.
That's as cheap as a mattress.Yep, Okay, So maybe that's
the pools they're talking about. There'sother ones that I'm looking on. You
can get Amazon a sixteen by fiftyI'm sorry, sixteen by thirty two to
fifty two inch deep above ground poolfor two thousand dollars. So, like
(24:51):
I can understand comparing that to amattress. Yeah, not an inground pool,
which is way way more. Butthis is a real thing that we
are seeing here where. And Iget it that if you put off the
decision on what to do with yourhome over the last few years, because
you might not want to live therefor a long term, or you might
be looking to upgrade, or anynumber of different situations. I can see
(25:11):
how this is starting to weigh onsome of these sectors. I think,
generally speaking, pool installers are prettybusy, but you're starting to see it
in some of these areas. Andthe good news on that front is I
don't think it lasts very long,because I do think that home purchases are
going to start going through soon.I do think that people are either going
(25:32):
to kind of put up or shutup. Right. It's like, Okay,
do I go and improve my homenow and just commit to staying here
for the next decade, or canI do I think I can find a
better deal elsewhere. Can we talkmattresses for a second, because this is
something I do find fascinating, Okay, not like on your choice of mattress.
I could care less. Actually Icouldn't care less. Okay. I
always bothers me when people say Icould care less. No, you couldn't.
(25:56):
The sleep number CEO Shelly Iboch theyinterview, is that a this is
one of those names. I don'tknow if it's a him or herchel.
It can go either way. I'mgonna say her. The consumers purchasing power
is limited. As a result,consumers tend to scrutinize their spending and make
near terms I was right, correct, great, uh, and make near
term decisions based primarily on need,price, and perceived value, and they
(26:19):
are deferring higher ticket, durable purchases. The mattress industry is in a historic
recession. So this is something Ididn't have on my bingo card, quite
honestly, and I'm trying to makesense out of it in terms of the
timeline for buying these. Because whilewe talked about people moving into you know,
new homes and stuff like that,or renovating generally, I was under
(26:41):
the assumption that when you move toa new place, you're usually keeping your
mattress, or if you're doing arenovation, you're usually keep Like a mattress
is not something that you replace duringa renovation most of the time. Not
for me, no, So Imean, when when we moved, we
opted to get a new mattress.Huh, it's interesting. I could have
(27:03):
guess how old you're mattresses at yourold place or whatever. Yeah, they
are pain to move. Take upa lot of that, you know,
try to Now. The other questionthat I have on this is our mattresses,
the new men's underwear index. Iforget who was it? Peter Lynch,
you, you know, kind ofcoined the term. I forget who
it was. I don't know.The private is that one of the best
recession indicators is men's underwear because whenthings get bad, they just say,
(27:27):
you know what, it's got holesin it. I'll tough it out.
It's fine. When things get better, yep, time to buy the new
ondies, like we got to loadup. I don't think. Do mattresses
function the same way? I don'tthink. And that's why I'm confused about
this mattress recession, because when yourmattress gets to a point where it's like,
can't sleep on this anymore, Ithink you kind of just greenspan by
(27:51):
the way, green span, Okay, there you go. It just feels
like an item where I think maybethe mattress industry has just way overdone it,
Like how many shipped to you mattresscompanies are there out there? And
then why when I go into anyreasonably populated area, are there as many
(28:12):
mattress stores as there are banks.It's true. Maybe just over there is
an explanation for that, but Ican't remember it. Yeah, there was
the conspiracy theory going around Reddit fora while that one. What were they?
It was? What was it?It was? It was drugs?
Was drugs? Yeah, Mexican cartel. Yeah, which obviously like is not
(28:36):
the case, Like why are thosestores empty? Man? So money laundering,
It's it's not that. No,probably not sure about that. If
it's on Reddit, it's Reddit.I'm pretty sure about it. I'm pretty
sure about it. But uh,let's take a quick break here and when
we come back, we'll do somestack roulette. Text us six on seven
(29:00):
three six two thirteen eighty five withyour comments and questions about today's show and
let us know what you think aboutthe stories we are covering. This is
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(29:26):
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book your trip today. That's visitUSVII dot com. Mike, what do
you have for me for the ruleOtte of the Stack? Grocery prices in
Massachusetts, specifically the Greater Boston areaare rising faster than and in most of
the country. I thought we werekind of done with this because nationally you
are seeing grocery prices stabilized, butin Massachusetts it's not the case. And
(30:08):
I don't buy the reason that theBoston Globe is arguing that this is occurring
is that we have to bring ourgroceries in through the liquefied grocery transport system
in Boston Harbor. No, they'resaying that the reason is that the metro
area is home to a plethora oflocal, regional, and national chains,
each controlling only a relatively modest pieceof consumers grocery dollars. So what they
(30:30):
are saying is more competition and alack of a big prominent player like Kroger
in the New England market is leadingto higher grocery prices, and I just
don't buy it. I think thatthere are plenty of take I'll give them
(30:51):
that. Yeah, So I meanthe argument is, hey, you know,
if you don't have a Kroger inthe market, then there's not enough
size and market power to reduce pricesand pressure your suppliers. And I just
I'm not even close to buying thisone. So if you want my explanation,
we have among the lowest unemployment ratein the country, we have some
of the highest low minimum or veryhigh minimum wage, we have high labor
(31:15):
costs in general in the Creator areaarea. And I will also I have
no evidence to support this one,but the lack of wine and beer sales
at the majority of grocery stores Ihave to think causes these stores to run
it at a lower operating margin thannationally in comparison, because I know that
(31:37):
liquor stores, for example, generallyoperate with like a twenty to forty percent
margin, whereas a grocery stores atlike five. And so if you can't
sell beer wine and liquor. ThenI would imagine you're trying to make your
full margin on the grocery items,and that could be more challenging. You
know, the solution is to thissell liquor and grocery stores soup tubes.
No, that's not going to fixthe problem. Soub Yeah, that seems
(32:00):
like a big infrastructure project. Iwant to talk about skipping coffee because there's
a piece in the Wall Street Journalit says skipping coffee is the latest humble
brag. Now, those of youwho have listened to the show for a
while, you know that I don'tdrink coffee, and I'm not humble about
it. I brag about it quiteoften that I have more energy than Mike
despite not drinking any coffee. Butthis piece is kind of embarrassing for some
(32:22):
of the people in it. I'mlike, just in terms of the things
that they talk about doing, theseare not things that human beings like do
or that we know anything about.So Brian Johnson, who is the founder
of venmo the full name is BraintreeVenmo, even though they're not based in
Braintree, Massachusetts, I believe heis trying to figure out how to reverse
(32:43):
age himself. He says, newsocial norms are emerging, So instead of
turning to caffeine when dealing with jetlag, he just did a three minute
cryotherapy appointment. Yeah obviously, Yeah, just like normal humans do a little
out of touch, really, Brian, Like, okay, I'm just trying
to picture how this would work forthe morning rush, Like, okay,
(33:04):
everyone's trying to get up and youpull into like a former car wash that
is now just spraying ice into yourvehicle. Yeah, how do you?
You can't cryotherapy your way out ofthis? For furthermore, we just don't
know if it works, well,Chuck. We do lots of stupid things
to make ourselves look younger that mightnot work. Okay, sootherapy isn't the
(33:28):
first one to come about. That'sanother one here. Supermodeled Giselle starts her
mornings with room temperature water with abit of lemon and Celtic salt. Celtic.
Yeah, Celtic Is that a thing? Yea Celtic salt is a thing.
Yeah, she's not getting like,you know, Boston Celtic's themes.
I thought I thought it was likeit turned the water green. I didn't
(33:50):
know what kind of what do youdo with this salt? I have no
idea. Is it different from regularsalt? Or is this like the Himalayan
pink salt that's actually the exact same. It doesn't taste any different. Probably
that. So what is with this? Like the skipping coffee is the next
in line from you know, everybodymonitoring their sleep and going to bed at
(34:13):
seven thirty pm and bragging about howmuch they slept. I don't really,
I don't know. In my circle, it's mainly bragging about, uh,
you know, like Tucker comes inand tells us how he slept like two
and a half hours last night andis existing only on coffee for the last
two days. Like that's the bragthat I want to hear about, Not
Oh I slept nine hours and Idon't need coffee anymore. No, not
(34:37):
buying it? Here's the thing?Does It makes for an interesting conversation.
I'm not a coffee guy, mostlybecause, as Mike says, he's kind
of nervous what I would be likeon coffee. I am too. I
just I don't think I need thatin my life. But if all we're
trying to reduce do is like reduceour lives to the most boring things possible
(34:58):
in order to live longer. That'snot a life worth living. Like on
Saturday night, had a couple peopleover, We had a few bottles of
wine and had a great time.Yeah, and that's not good for my
life. Expectancy might die a littlebit earlier, but I'm better off having
had a little bit of fun.And you know, like it's just we
(35:20):
can't become the artificial intelligence that we'retrying to prevent from us creating. If
all we want to do is bea robot who lives a long time,
it's a horrible life in my opinion. And it's yeah, that's where I
feel like we're trending with everyone like, oh I want to live longer.
No, I want to live afuller and better life. You know,
(35:42):
like if yes, I don't wantto skydive every day and die at you
know, thirty nine, because thatwould just be kind of like you can
go too far as what I'm sayingas well, But there's a bet I
don't want to follow the Tom Bradydiet just to be Mike, who's not
an athlete. I'm not going tobe a professional anything other than what I
already do. So let's just livesome life, listen to some music a
(36:05):
little bit too loud, occasionally,have a drink too many, get an
uber, so we don't drink anddrive and call it a day. Chuck's
out of encouraging binge drinking here atthe Financial Exchange. Thanks, I know
what I'm having for lunch. Alcohol. Let's take a break for the rest
of the day so we can havesome fun and we'll see tomorrow on the Financial Exchange
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