AI is Taking Jobs — Here’s How to Stay Indispensable

Transcript

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Speaker 10 Today's number 80. That's the percentage of NVIDIA employees who are now millionaires.

Speaker 10 Her name was Melanie, and she was this lovely woman. And I don't know if you know this or would find it even believable, but I didn't get off to a really fast start professionally.

Speaker 10 And I remember saying to her, I love you, and I realize I don't have as much money as my friend Jack, but I'm a good boyfriend, and we have a wonderful future together.

Speaker 10 To which she literally broke down in tears and wrapped her arms around me and said, I love you. And if you really love me, you'd introduce me to Jack.

Speaker 10 That actually kind of happened, Ed. That kind of happened.

Speaker 11 Yeah, it was quite a long and winding joke. It sounded rooted in experience.

Speaker 11 So was his name Jack? What was his real name?

Speaker 10 I I have changed the names to protect the innocent.

Speaker 10 Yeah.

Speaker 11 Who was it?

Speaker 10 No.

Speaker 10 I'm not going there. I'm not going there.

Speaker 10 How are you doing, Scott? I'm so excited. I'm here in New York.
I'm ready for Halloween. I'm super excited.
I love being here.

Speaker 11 And you're going with Deadpool, right?

Speaker 10 100%. I just did.

Speaker 11 Round three, round four?

Speaker 10 A second, round two. Only thing about it.
You can wear an outfit twice. I used to go with Starship Commander Jean-Luc Picard.
Huge crowd pleaser. Huge.
Live long and prosper.

Speaker 10 Literally, every dork would come up to me. Every girl that it was,

Speaker 10 every guy that was still a virgin in Manhattan would come up to me and give that weird hand symbol, go, live long and prosper. I'm like, yeah, okay.

Speaker 10 Okay.

Speaker 11 Love the audience I wanted.

Speaker 10 Okay, there's a U-porn super user.

Speaker 10 And here I have a Halloween story.

Speaker 10 I moved back to New York, and even though you you don't need a car, I was raised in California where it was all about the car.

Speaker 10 And so I bought a seven series, thinking that would make me seem more interesting to other guys and more attractive to women.

Speaker 10 And I bought it from BMW of Southampton, and they gave me one key, and I'm like, it's supposed to have two keys. And they said, yeah, we can't find the other one.

Speaker 10 And I'm like, well, when you find it, please send it to me. Anyway, so I'm out partying Halloween, come home totally fucked up.
I was at Lotus. I remember this.

Speaker 10 Came home in my Starship Commander outfit, and I was in the back of my loft that faces the street, and I hear my car start up. I'm like, what? And I look down and my car's lights are on.

Speaker 10 Someone's in my car. So I go running down.
My car is being stolen. So I chase the car to the 6th Avenue and 15th Street.
I'm running after it with my phaser drawn. True story.

Speaker 10 And I catch up to the guy. He hits a red light and I catch up to him.
And I look in the car. And he looks at me like, what the fuck is this Star Trek person chasing me for?

Speaker 10 And my, I was still young and dumb. I was not your age, but a little bit older.
And I still had a, I still had decent levels of testosterone.

Speaker 10 And so I looked and I saw in the corner, you know, your idiot male masculinity, weirdness, violence hits in. I'm like, oh no, steal my car, must die.

Speaker 10 And so I pick up, I started to pick up, you know, those big wired steel trash containers on the corners in New York? Yep.

Speaker 10 I literally thought, I'm like, okay, I'm going to put this through the window and try and pull him out.

Speaker 10 And

Speaker 10 the car, the light hasn't turned green yet. And so, and then I was at that age in my life where I was just starting to get smart, just starting.

Speaker 10 And my light turned green and I put the trash can down and he just drove away into the night. And so there's a couple lessons here.
Why didn't you do it?

Speaker 11 Why didn't you do it?

Speaker 10 Because I didn't want to get fucking shot, Ed.

Speaker 11 Okay, so you came to your senses.

Speaker 10 Yeah, I didn't. I mean, any guy, any guy who's willing to steal your car may have a gun on him.

Speaker 10 So anyways, a couple of lessons here. BMW of Southampton, you're clearly engaging in organized crime.

Speaker 10 And then they found the car like six months later.

Speaker 10 And they called me and said, did you lose your car? And I got in a big argument with BMW. I'm like, you guys clearly are engaging in organized crime.
I'm not going to continue to pay the payments.

Speaker 10 And anyways, it was a big cluster fuck. So you got it back.
Yeah, but it had the GPS pulled out of it. I guess the first thing they do is pull the GPS so you can't track it.
This is like 20 years ago.

Speaker 10 But anyways, the moral of the story was it happened Halloween night and I was chasing after a car, a Starship Commander, Jean-Luc Picard.

Speaker 11 That is a good moral to this story.

Speaker 11 You're like Aesop.

Speaker 11 There's a Scott Galloway fable.

Speaker 10 There you go.

Speaker 11 Many lessons to be learned.

Speaker 10 There you go. What's going on with you? Let's see.

Speaker 11 I'm not going out tonight. I'm got a birthday dinner for my friend.
So we'll just have dinner and I won't be out partying. I assume you're going to be out late into the night.

Speaker 10 I am, except I'm going on, it's such a bummer. I'm going on Fried Zakaria tomorrow morning, so I can't get fucked up.

Speaker 11 You like being hungover for the media appearances?

Speaker 10 I never like being hungover. I like my voice.
I didn't drink last night, so my voice sounds like yours. It sounds kind of weak and feeble.

Speaker 10 But when I drink a lot the next day, I sound like, you know,

Speaker 10 Luke, I am your father.

Speaker 10 Scan your emotions. You know this to be true.

Speaker 10 That's my one invitation.

Speaker 10 You want to hear my other great impersonation or invitation? Please. This is Dr.
Evil.

Speaker 10 How about no?

Speaker 10 That's good.

Speaker 10 That's good. And by the way, I am so sick of people saying they like you more than me.
I am definitely funnier than Ed. I am definitely funnier.

Speaker 10 Anyways, get to the fucking headlines.

Speaker 10 Stop dicking around here. Yeah, that's my bad.
That's really my bad. Okay.

Speaker 10 New York.

Speaker 11 I got a lock in, huh?

Speaker 12 Now is the time to buy.

Speaker 12 I hope you have plenty of the wherewithal.

Speaker 11 Most of the magnificent seven reported earnings last week. Overall, it was a strong quarter with Microsoft, Alphabet, Amazon, and Apple all beating expectations on the top and bottom line.

Speaker 11 So big week. Scott, let's just go through these companies one by one.
We'll start with Alphabet.

Speaker 11 Let's see here. Beat on the top and bottom lines.
Revenue up 16% to $102 billion. Crushed it on YouTube revenue.
Crushed it on search revenue, which actually accelerated. Cloud revenue up 34%.

Speaker 11 The stock rose. 8%.
It's up 48% year to date. Best performing big tech stock of the year so far, just as predicted.
Your reactions?

Speaker 10 The Google Cloud is emerging as the preferred platform for AI workloads. So essentially, the Google Cloud is becoming known as sort of the AI cloud.

Speaker 10 And

Speaker 10 over 70% of existing cloud customers now use Google AI products. And the company, I mean,

Speaker 10 their Google Cloud backlog hit $155 billion. That's up 46%, not year on year, quarter on quarter.
It was up 82%

Speaker 10 year on year. Just nothing short of extraordinary here.
These are companies well positioned who's made forward-leaning investments, who have outstanding management.

Speaker 10 The interesting thing that the team pulled together is they're saying that these firms are flipping from asset-light to asset heavy. Essentially, they're becoming utilities of the information age.

Speaker 10 I used to say they're a toll booth. I guess I'm a kinder way to say it's their utilities.

Speaker 10 Meta, Microsoft, and Alphabet are each allocating a larger share of revenue to CapEx than the average global utility.

Speaker 10 And historically, these kind of CapEx supercycles have signaled lower returns on capital. We'll see.
But, you know, the CapEx growth of Microsoft year on year is up 74%, Google, 83%, Meta 128%,

Speaker 10 because the market is rewarding these forward-leaning investments, believing that similar to the cloud, the more you invest early, the better the leverage and the revenues

Speaker 10 later on. Look, there's just nothing.

Speaker 10 It's like you can't, even the naysayers and the people that are glass half empty like me are having trouble finding anything that isn't outstanding about these earnings.

Speaker 11 I just want to keep going down through the list here. We also saw Amazon, which also beat on the top and bottom lines.

Speaker 11 Revenue rose 13%.

Speaker 11 AWS grew 20%, beat expectations. They added almost four gigawatts of new power capacity.
Ad revenue grew 24%.

Speaker 11 Shares rose more than 10%.

Speaker 10 So

Speaker 11 Amazon was another big winner in these tech earnings. I know that you are bullish on Amazon at the moment.
I am too, trading at 31 times earnings right now.

Speaker 11 The five-year average for for Amazon is 59 times earnings. So trading at a historically

Speaker 11 low multiple, considering its history. Quick reactions to Amazon.

Speaker 10 The little thing in here that stood out to me was the Tranium 2, that's Amazon's in-house AI chip.

Speaker 10 I didn't even know they had a fucking in-house AI chip, has become a multi-billion dollar business growing 150% quarter on quarter.

Speaker 10 It's just and they too have also raised their capex dramatically as the market responds to these forward-leaning investments.

Speaker 10 Essentially, these companies are sort of replacing or supplanting government's big bets that typically were sequestered only to government. And now that the government's spending all of its money on

Speaker 10 interest rate payments and making sure our seniors are taken care of, they don't have the capital to make these forward-leaning investments. And these companies do, which in some ways is really great.

Speaker 10 It's good for the economy. The question is, are they the type of technologies that leak out into the general public, right?

Speaker 10 When the government makes investments in vaccines and communications technology like DARPA or GPS for weapons, it melts into the private sector into a variety of companies, medium and small business, whereas these investments will ⁇ the return on these investments will be sequestered again to a small number of companies.

Speaker 10 But I just,

Speaker 10 even Apple, I have the new iPhone. I'm not that enthralled with it.
Their iPhone sales are up 6%,

Speaker 10 which isn't great,

Speaker 10 but they guided to double-digit iPhone growth next quarter, meaning the numbers look really good. And their gross margin expanded to 47.2%.

Speaker 10 And I'd just like to remind people that Apple, which until recently was the most valuable company in the world, has pulled off the impossible.

Speaker 10 And that is you either have a niche product with high margins or a mass-produced, you know, kind of mass-market product with lower margins.

Speaker 10 Essentially, what Apple has done is they have the production volumes of Toyota with the margins of Ferrari. I mean, it's just extraordinary.

Speaker 10 The iPhone is the most profitable product in the history of mankind. It's an actual physical thing.

Speaker 11 Yeah, Apple, it was a good quarter, beat on top and bottom. Gross margin expanded.
Shares initially fell, but then they actually popped back up.

Speaker 11 The only thing I would highlight, you know, iPhone sales growth, which as we covered in one of the daily episodes, everyone was super excited about because of this third-party research about how well the iPhone 17 was doing.

Speaker 11 iPhone sales actually underperformed in terms of their growth. It was up 6%.

Speaker 10 That was below expectations.

Speaker 11 The thing that people that investors were really excited about was the guidance that Tim Cook offered. He said that we were going to see 12% overall growth, sales growth next quarter.

Speaker 11 So that's why the stock rose, but still the worst performing big tech stock so far this year, up 8% year to date, trading at 36 times earnings, which is significantly higher than, say, Meta.

Speaker 11 It's also still higher than Google. So again, I'm not super bullish on the stock right now, but let's just keep going through here.
Microsoft, also an incredible beat.

Speaker 11 Azure revenue, that's their cloud business, up 39%.

Speaker 11 The stock dropped, which was interesting, I think, mostly because they were spending a lot of money on this CapEx. They said that the most recent quarter would be $30 billion in CapEx.

Speaker 11 It was $35 billion. So investors were surprised by that.
But what we are seeing across the board here is massive AI spending. And then the most interesting was probably Meta,

Speaker 11 beat on revenue, did miss on earnings, but it was kind of a one-time tax thing, as we often see. But revenue crushed 26%

Speaker 11 year-over-year growth.

Speaker 11 People are spending 30% more time on Instagram year-over-year. Everything about that business is killing.
But again, the trouble is that investors are worried about CapEx.

Speaker 11 CapEx is now 38% of revenue, up from 20% just a year ago. There are concerns that they're getting too into the whole AI infrastructure thing.
And so the stock fell around 10%.

Speaker 10 And now they're down

Speaker 11 29 times earnings. So they are trading at the lowest multiple of any big tech company right now.

Speaker 11 If I had to, I mean, there are two clearly undervalued stocks right now, Amazon, as you've discussed, and also, I think, Meta. And the big, the big stat for me is, again, the time spent on Instagram.

Speaker 11 You look at Instagram Reels now making $50 billion a year. By comparison, the entire US TV ad industry makes $65 billion.
So give it a couple of years.

Speaker 11 Instagram Reels is going to be bigger than the entire ad industry in the US for television. That's crazy.
So

Speaker 11 very interesting. But certainly all these companies are crushing.
The question is, how does Wall Street feel about them?

Speaker 11 And I think the theme here is if you're spending more than Wall Street would like on your AI infrastructure, then that makes investors nervous.

Speaker 10 The only

Speaker 10 I mean, the company looks overvalued here is Apple, which is growing 8%, which isn't, you know, good growth for a TSMP company. It's not great growth for big tech.

Speaker 10 And yet they trade, they have the highest multiple with the exception of Microsoft at 36, Microsoft's at 37.

Speaker 10 I also love the data that you guys have been pulling. Look at their five-year average PE versus the PE multiple today.

Speaker 10 And every company is trading at a higher multiple than their average over the last five years because of the historic run-up of the markets, except for Amazon.

Speaker 10 Traditionally, the five-year average PE has been 59, and today it's trading at 31.

Speaker 10 So, you know, when people say, when you talk to young people, they will say, I like this company, and they they list the reasons why they like it. I get it.

Speaker 10 You always have to set that against the valuation, right? At some point, any stock is overvalued. And at some point, every stock, unless it's going to zero, is undervalued.
So

Speaker 10 the thing that retail investors don't spend enough time talking about is, okay, all of what you said, good or bad, fine, but now you have to spend as much time doing the work and thinking about the relative valuation.

Speaker 10 And is Amazon poised

Speaker 10 most strategically, you know, is the strongest positioning relative to these other firms? Maybe, maybe not.

Speaker 10 But it looks right now to be less expensive than the others when you look at its growth and when you look at historical trading multiples. So anyways, we're bullish on Amazon.

Speaker 10 As you mentioned last year, of all these firms, we picked Alphabet. And Alphabet, as of today, is up 62% year-round.

Speaker 11 We'll be right back after the break. And if you're enjoying the show, send it to a friend.
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Speaker 11 We're back with Profit Markets. For the past year, the leading narrative around AI has been: don't worry, it's not coming for your job.

Speaker 11 And maybe that will be true in the long run, but right now, it appears companies are telling a different story. UPS has cut 48,000 jobs this year, a shift that it says is driven by automation.

Speaker 11 Chegg is cutting 45% of its workforce, with its CEO citing, quote, the new realities of AI. YouTube is offering employees voluntary exit packages as part of a larger AI reorganization.

Speaker 11 And Amazon plans to cut up to 30,000 jobs as Andy Jassy admitted that greater use of AI tools will mean fewer corporate roles.

Speaker 11 Overall, the company plans to replace more than half a million jobs with robots and eventually automate up to 75%

Speaker 11 of its operations. So,

Speaker 11 Scott, there has been this big debate

Speaker 11 as AI has come onto the scene, which is, is AI going to take your job? And we've heard many opinions. We've discussed this a little bit before,

Speaker 11 but the tech community seems to have developed kind of unanimity on this idea that

Speaker 11 it's not going to take your job. Or at least maybe it'll shave off some jobs here and there, but the value creation is going to be so great that ultimately it doesn't matter.

Speaker 11 And it seems that there is this ethos at least among discussions about AI that AI is not not going to take jobs and I'm just going to play you quick clip of different leaders making this point I think as in the past what generally tends to happen is new jobs are created that are actually better that utilize these tools or new technologies what happened with the internet is what happened with mobile I think it'll be assistive to people in doing their jobs.

Speaker 16 You're not going to lose your job to AI. You're going to lose your job to somebody who uses AI.

Speaker 11 So these are all, you know, fair arguments, but I think it's probably a little difficult to appreciate those arguments if at the same time, we're seeing thousands of jobs being cut across the board and all of these CEOs and all of these leaders are saying, yeah, it's because of AI.

Speaker 11 We don't need these jobs anymore. So this is a pretty large debate, but...
I'll stop there and get your reactions.

Speaker 10 So honest question. Did I steal that quote from Jensen Huang or did he steal it from me?

Speaker 10 That's exactly what I said. I'm trying to think, did he take that from me or did I take it from him?

Speaker 11 Well, he told you he listens to you, right? So maybe Jensen is, Jensen's taking from you.

Speaker 10 Look, I've been saying that for a while, that AI won't take your job. Someone who understands AI will take a job.

Speaker 10 And my, and Greg Schof, who runs my company section or company I founded, that's trying to help companies in what he refers to as the adoption layer, how to actually implement AI.

Speaker 10 He called me the next day and he's like, you're full of shit. It is taking jobs.
He's like, be clear. He's like, this is going to take jobs.

Speaker 10 And there's the narrative, if you're the CEO of a company, you can't get up there and say, oh, yeah, we're going to absolutely recognize a ton of efficiencies.

Speaker 10 It just doesn't make for an inspiring all-hands to say, I got good news.

Speaker 10 Our revenue growth was 20%. I've got great news.
Next quarter, I think I can lay off a quarter of you.

Speaker 10 They also don't want to raise the antennae of legislators and regulators and Elizabeth Warren and Bernie Sanders who will come in and say, you know,

Speaker 10 the oligarchs have to pay the fair share. You know,

Speaker 10 they just don't need that shit right now.

Speaker 11 Stick to Dr. Evil, I think.

Speaker 10 How about no?

Speaker 10 Anyway,

Speaker 10 I have said for a long time, and I think it's playing out, that this is AI's corporate Ozempic. And that is,

Speaker 10 if you're on a board, the CEO presents the plan in Q3 for the next year, and he or she comes in and says, here's the plan. We're going to grow our revenues 12%.

Speaker 10 And these are the resources I need to grow the company 12%. Do we need to raise capital? Do we not? What's our capex?

Speaker 10 And we expect to hire 6% to 8% more employees, which should take our earnings up hopefully 8% to 15%.

Speaker 10 It was just a given that

Speaker 10 if you were reducing revenues or increasing revenues, you were going to reduce employment or increase employment.

Speaker 10 And just the same way that we have been taught that if you want to live and if you have the opportunity because there's a scarcity of salty sugary and fatty foods if the food is available you just eat until you're you know you can't eat anymore and then GLP1 turns off the switch that I don't necessarily need to eat

Speaker 10 and what's happened here is AI has for the first time broken the cycle and the kind of the conventional wisdom that if I'm growing I need more employees it said no you may not need more employees and the stat you read the other day on profiting market that that just blew my mind was that I think in the retail unit of Amazon, they're projecting that they can double the revenues by 2032 with the same number of people.

Speaker 10 I mean, that just spells an explosion in earnings, right?

Speaker 10 It has some

Speaker 10 societal implications we've got to deal with, but that's just striking to think about.

Speaker 10 I think everybody's trying to be meta right now when they announced that they had grown their revenues 23% with 20% fewer employees. Now, the interesting question is who's next?

Speaker 10 There's been a lot of companies that have announced layoffs.

Speaker 10 And I asked Mia to do some analysis and say, who are some information age companies who have hired dramatically through the pandemic, seem to have probably

Speaker 10 kind of eaten a lot, if you will, have consumed a lot of young capital or managers. I remember at one point, Amazon was, and Google and Meta were hiring 40% of my MBA class.

Speaker 10 They were just literally hoovering up people.

Speaker 10 And I also try to find companies that have avoided, haven't had a big layoff yet. So these are the companies that Mia came up with that seem vulnerable right now.

Speaker 10 And our prediction is that they'll probably announce some pretty significant layoffs in the next three or six months. Etsy, Pinterest, Airbnb, PayPal, and HubSpot.
But those are the companies.

Speaker 10 that Mia came up with. What are your thoughts, Ed?

Speaker 11 It's tough because

Speaker 11 this whole argument about whether AI is going to take your job has been front and center. And in many cases, the arguments that we heard from those tech leaders are actually correct.

Speaker 11 It's going to create a lot of value.

Speaker 11 It's going to probably create new jobs in interesting places that didn't exist before. And that's always been true of any big new technology.

Speaker 11 What seems to be lacking from the conversation is a recognition of the short term.

Speaker 11 We all, I think, agree, I agree, I think you agree that over the medium and long term, you're going to see value creation and therefore job creation.

Speaker 11 We seem to all be unwilling to acknowledge the elephant in the room, which is the short term job destruction, which is what we are now seeing this week and what we have been seeing for several weeks.

Speaker 11 The fact that Amazon is cutting 30,000 corporate jobs, 10% of the white-collar workforce. The fact that Intel is cutting 24,000 jobs, Microsoft cutting 7,000 jobs.

Speaker 11 And all of them, when you get down to it, are doing it because of AI.

Speaker 11 And it's not just white collar, it's also blue collar, because as we just learned from the New York Times, this report, looking at Amazon's internal documents, they're planning to automate 75% of their operations, which is going to wipe out more than half a million jobs.

Speaker 11 They're the second largest employer in America. And if Amazon does it, look at Walmart as an example, they employ 2 million people.
Do we really think Walmart's not going to follow suit?

Speaker 11 So I think what is missing from the conversation is a recognition that actually some people should be very worried about their jobs. And some people are going to get laid off.

Speaker 11 And we can look through history and see this happen time and time again. When you had the computing revolution of the 80s and the 90s, there were entire swaths of occupations that were just deleted.

Speaker 11 Typists, file clerks, bookkeepers, et cetera. Those aren't interesting or important to us now, but back then it was quite painful.

Speaker 11 And there are studies that show that, you know, some people were able to retool, but the older people actually weren't. Many of them actually just had to retire early.

Speaker 11 So we saw significantly higher retirement rates and then also dramatically lower earnings among those people. And so

Speaker 11 We can look at this stuff long term and we can say, yes, we're going to see lots of jobs 30 or 40 years from now and at a societal level great but on a personal level that's a really long time so i think what what is what is important

Speaker 11 and what we will get into in this conversation is okay a recognition actually some of you some of us should be worried And we can talk in sort of broad generalizations about the future and how society is going to prosper.

Speaker 11 But yes, there will be individuals who get burned because of the AI revolution.

Speaker 11 And it is worth addressing those concerns and thinking about who's going to get burned exactly and also what they can do about it.

Speaker 10 I don't think it's a bad idea to always be a little bit worried that you're going to lose your job. You don't want it to be create anxiety.
You don't want to be debilitating. But

Speaker 10 it's never a bad idea to just think, okay, how can I be indispensable? How do I increase my currency in the workplace? And also just to do an assessment, if you've figured out a way to kind of

Speaker 10 have a great remote gig where you don't maybe work four or six hours a day, not the full eight, you add enough value, but you're not really driving value. Just know

Speaker 10 you may fool your corporation for a year, two years, three years. Eventually they figure it out.

Speaker 10 And AI is creating all sorts of tools now where they can absorb all sorts of data from the frequency of your emails, the content of your emails,

Speaker 10 your logins, your time on the computer, the type of activity on your computer, which they all track. It's scary, but yeah, we are living in sort of an information age, Das East Germany.

Speaker 10 And then AI will say,

Speaker 10 these 300 people don't appear to really be working very much.

Speaker 10 And so I don't think it's a bad idea to assume there's total transparency into what you're doing. And okay, so what does that mean?

Speaker 10 Quite frankly, if you're not adding that much value, not working that hard, eventually they're going to figure it out. Maybe you don't care, maybe willing to lose the job, it's worth the risk.

Speaker 10 But one, one, assume they can see everything.

Speaker 10 And then if you're doing a lot of good work, also at that point, assume maybe they don't see everything and make sure that people around you and your manager and your reviews kind of know the work, the good work you're doing.

Speaker 10 I just think

Speaker 10 when people are drawing up these lists, I hate to say it, it's somewhat rigorous, but it's somewhat not.

Speaker 10 And that is, you're going to see a disproportionate, I believe, amount of layoffs in remote workers

Speaker 10 because they

Speaker 10 have

Speaker 10 weaker emotional bonds with the people making these decisions because relationships are a function of proximity.

Speaker 10 But also, if you are able to go into your boss or present on how AI is going to impact your group and show three, four, five dozen actionable steps for more productivity and how you think it can really improve your group's performance, that impression is probably a good impression for them to have or any other technology,

Speaker 10 a good impression of your brand before they drop that list.

Speaker 10 Yeah, so play offense, not defense. I think trying to hide during layoffs, thinking they're not going to notice you is the worst thing possible.
Terrible idea.

Speaker 10 It's the invisible people that get laid off first. It's because they don't know you, they don't care about you,

Speaker 10 they don't know what you do.

Speaker 10 The other thing is, just emotionally, two things. One,

Speaker 10 recognize a lot of your success and a lot of your failure is not your fault. And you shouldn't take a lot of your success and a lot of your failure personally.

Speaker 10 And that is these layoffs are pretty indiscriminate.

Speaker 10 And they're going to, sure, the superstars, someone evangelizing for them will try and save their job and probably will, or they'll find something else for them within the company.

Speaker 10 But a lot of people get laid off. There are very few people.

Speaker 10 The wealthiest man in New York, Michael Bloomberg, I think he's the wealthiest man. He got laid off from Solomon Brothers.

Speaker 10 There's just, There's this very, I think I've been fired from every job I ever had.

Speaker 10 There's just, it just happens. And you should recognize that it's not an indictment on you.
It doesn't mean you're not going to be really successful.

Speaker 10 It's just a natural part of the corporate life cycle. Don't be afraid to ask people for help.
Yeah, I just got laid off. I'm looking for a new gig.
Also,

Speaker 10 this is such a cliche, but maybe think of it as an opportunity to really, really reevaluate where your human capital would be best served. So I think it's an interesting time to sit down.

Speaker 10 clear your head, go speak to a couple of people or a few people, say, this is what I'm good at. This is what I like.

Speaker 10 these are kind of my financial needs, what's important to me, and brainstorm potentially about an entirely new career, starting a business.

Speaker 10 Maybe it's sticking in the same industry and just going doing the exact same thing for a competitor. Maybe it's going back to graduate school.

Speaker 10 And the other one thing I would say is maybe take a couple days to mourn, but immediately get on to the next thing, whatever that is. Immediately start interviewing.
Immediately start networking.

Speaker 10 Be really social. Go out a lot.
Meet friends.

Speaker 10 You know, I think, I think if you want to help your career, the best thing you can do over the long term is to be more social. But also, just to be honest, there is going to be a lot of layoffs here.

Speaker 10 And my fear is that young people, I remember I've had several young people break down and cry when I've laid them off.

Speaker 10 And I just wanted to figure out a way to say, you got to trust me on this. This isn't that big a deal.

Speaker 10 You're going to look back on this and you're going to be more upset at how upset you were than what happened here.

Speaker 10 And also, if it's not working for you here, you don't want to be here. This isn't good for you.

Speaker 10 If, if for whatever reason, fairly or unfairly, the people here in the organization doesn't value your work, you don't want to be here. You want to go somewhere else.

Speaker 11 I first just want to clarify like who should actually be worried.

Speaker 10 Like,

Speaker 11 there is no question, AI is taking jobs, but it might not be taking your job, or it might be taking your job. So I think the question you have to ask is like, okay, who is actually at risk here?

Speaker 11 Who should be worried?

Speaker 11 So Microsoft had this AI report where they basically did this giant study and looked at all of the jobs that are most at risk of being replaced or having the tasks done by AI.

Speaker 11 And I just want to go through a few of these jobs because it's important if you have one of these jobs, the point being, you should probably be worried and you should probably be listening and thinking about ways that you can protect yourself.

Speaker 11 So just going to go through the list here.

Speaker 11 Sales representatives, customer service representatives, ticket agents and travel clerks, telemarketers, public relations specialists, management analysts, here are my favorites, news analysts and also market research analysts.

Speaker 11 So in a lot of ways, me.

Speaker 11 There are many other jobs that they have in this report, but they are kind of smaller jobs, jobs that, you know, don't really have high employment.

Speaker 11 But the jobs that I just outlined there, these are very, very common jobs in our society today. There are more than 1 million sales representative jobs in America today.

Speaker 11 There are more than 2 million customer service representative jobs in America today. So these are big,

Speaker 11 big occupations. They employ a lot of people.
And according to Microsoft, and I agree with the report, they are most at risk of being replaced.

Speaker 11 So those are the people who I think you should, if that describes you, I think you have real reason to be worried. We'll come back to what you do about it.

Speaker 11 Now I just want to go over the jobs that are actually not at risk and which I think are going to be rewarded in the future. So some of the jobs that are described in the report.

Speaker 11 water treatment plant and system operators, roofers, industrial truck operators, tractor operators. So a lot of jobs that are that are vocational and that honestly require use of your hands.

Speaker 11 Things where you have to be getting in there physically and have some technical and physical expertise. And then the other side is there's a lot of human care work that is not at risk of AI.

Speaker 11 So nursing assistants, housekeepers, phlebotomists, massage therapists, those are the kinds of jobs that are least at risk of AI.

Speaker 11 So when we think about this, you want to think about who are the AI winners and it's construction, it's physical maintenance, it's healthcare, it's surgery, you know, human care work, vocational, physical, technical work.

Speaker 11 And then the AI losers, it's all of the sort of,

Speaker 11 I mean, just think it through logically,

Speaker 11 it's the jobs that AI can do. Sales, administrative support, data analytics, computer science, mathematics, those are all the jobs that are most at risk.

Speaker 11 So I think the question then is, what do you do about it? And if you are an AI loser, I will just go through some of my recommendations that I think are very similar to yours.

Speaker 11 So the first thing that I would recommend, if you're about to see layoffs,

Speaker 11 you want to be the person who is close to the guy who decides the layoffs.

Speaker 11 So what you've got to do is you have to identify the decision maker at the company and you have to establish a personal relationship. I mean, Scott, you said it.
Don't hide.

Speaker 11 If you're invisible, then it's very easy to cut you off. Second thing I have on my list here, try to become the AI person.
That might mean you adopt some fluency with AI tools. You start using them.

Speaker 11 It makes your work more productive, more efficient. But also, quite importantly, you want to brand yourself as the AI person.

Speaker 11 You want to communicate to your peers, I'm the guy who knows about this stuff.

Speaker 11 And that might mean you start writing blog posts or you talk about it on LinkedIn or you send podcasts to people about AI. You want to show to the decision maker,

Speaker 11 I understand this stuff. So if you're cutting people, you don't want to cut me because I'm the one who's going to help turbocharge your business with AI.
I have two more.

Speaker 11 Have an opinion.

Speaker 11 AI is very good at analytics, but it's very bad at having an opinion.

Speaker 11 So if you can figure out a way to develop a position on issues, if you can weigh both sides of the argument and then ultimately take a side, because AI is bad at doing that.

Speaker 11 All it says is, here are all the different things that are going on.

Speaker 11 But if you can be the person that says, yeah, I know all the different paths that we can take as a company, but I believe that this is the one that we should take because this is my opinion on the issue.

Speaker 11 That's alpha. That's something that AI can't do.
And the final thing here, and it goes back to what you said. And I think it fits with also your career.

Speaker 11 I think you need to be willing to reinvent yourself. And I don't think you should be ashamed of reinvention.

Speaker 11 That's what a lot of people are going to have to do here.

Speaker 11 If you're being laid off at many of these tech companies, you're kind of being faced with this decision of like, do I go out into the market as the same thing that I was that got fired?

Speaker 11 Or do I rebrand and do I reinvent? And I think there's a lot of shame in reinventing, but I just want to highlight that many of the most successful people in history completely reinvented themselves.

Speaker 11 Just some great examples here. Vera Wang, who is the legendary designer, she was a figure skater before she got into design.
Martha Stewart was a stockbroker before she became the media mogul.

Speaker 11 Reed Hastings was a math teacher and then he founded Netflix. Ray Kroc was a door-to-door equipment salesman before he built McDonald's.

Speaker 11 My favorite reinventor is Arnold Schwarzenegger, who was a bodybuilder, who then decided he wanted to be an actor, and then he decided he wanted to be the governor of California, and he was able to do all of it.

Speaker 11 I think my point being, there are many people who were incredibly successful, who reinvented themselves and who leaned into it, and who were not afraid or ashamed to say, I used to be this and now I'm this.

Speaker 11 And as I say it,

Speaker 11 I think you're a good example of that too.

Speaker 11 I mean, you were an analyst and then you said, okay, I'm going to go to business school and I'm going to try something completely different. You started companies.

Speaker 11 And then after you started your company, you said, now I'm going to be a professor. And then after you were a professor, you said, now I'm going to be a podcaster.

Speaker 11 So I think a lot of this is also about reinvention.

Speaker 11 AI might take your job. And let's just acknowledge that.
But as you say, take stock of your talents and your abilities and don't be afraid to reshape them, to rebrand them and to reinvent yourself.

Speaker 10 I think that's right. I think that the cautionary tale is that my friends, I have a lot of friends in

Speaker 10 the hedge fund business or the finance business. And in the aughts, it was sort of the golden age.

Speaker 10 I think like 95 to 2010, I think people look back and say, maybe with the exception of this era in technology or AI, never have so few people made so much fucking money with so little talent than hedge fund managers from 95 to 2010.

Speaker 10 And that's not to say that they weren't talented, but if you were a really talented lawyer, accountant, you know, actor, whatever, a journalist, you made X.

Speaker 10 If you were a reasonably talented hedge fund manager from 95 to 2010, I'm not exaggerating, you made 50X.

Speaker 10 And there are a lot of people, especially white men, who if they get the right certification,

Speaker 10 For the first 10, 5, 10, 20 years of their career post-college, it's just up into the right.

Speaker 10 And I'm not exaggerating. When it goes flat or they get laid off or they can't raise their fund or whatever it is, they literally fucking freak out.
And I don't mean freak out in an extroverted way.

Speaker 10 I mean they become paralyzed.

Speaker 10 And what I would suggest is you have to, if you have to take a pay cut, switch industries, whatever it is, your emotional resilience and not feeling sorry for yourself and not,

Speaker 10 you know, acknowledging everybody anchors off. They look at the year they made the most money and they think, that's my fair market value.
And the next year's fair market value should be 12%

Speaker 10 more.

Speaker 10 And right now, you could argue every person in AI is wildly overpaid. None of them think they're overpaid.
Nobody, I've never had anyone after a job review and a bonus go, thanks very much.

Speaker 10 Let's be honest, I'm overpaid. I've never heard anyone say that.
It's either like, well, okay, I'm fucking amazing.

Speaker 10 Thank you for paying me this ridiculous amount of money at a ridiculously young age, but I'm the fucking bomb. Is there a subtweet? Or,

Speaker 10 or

Speaker 10 what? This is an outrage.

Speaker 10 It's never like, wow, look, the company's doing great. The economy's strong.
We're making a ton of money. And I'm probably making more.

Speaker 10 You know, my comps probably, but I've never heard anything resembling that. People anchor off the top, and that's okay, fine.

Speaker 10 But emotionally recognize in your career, you're going to have ups and downs. And the winners are the ones that, quite quite frankly, endure the downs.
They use it as motivation. They get out there.

Speaker 10 They use it as an opportunity to rethink what they want to do next. And they're resilient.
And that's what I worry most about your generation, Ed.

Speaker 10 If you're 35, you've never known anything but a bull economy. The other thing about these people being laid off,

Speaker 10 These are some of the most remarkably credentialed people in the world.

Speaker 10 I mean, you got to keep in mind that the 30,000 people are about to go to whatever it is, the 14,000 or 30,000 people from corporate and Amazon, 99.9% of the world's population would kill to be the person who just got laid off from Amazon.

Speaker 10 Why? It means you likely went to an elite university. You're obviously very good or you never wouldn't have got a job at Amazon.
You have Amazon on your resume.

Speaker 10 You're now like pissed off because you're not going to make 300 grand a year. You might have to take a job at 220.

Speaker 10 99.9% of the world would kill to be one of those people that just got laid off from Amazon.

Speaker 11 I mean, I see what you're saying, but I slightly take issue with it because,

Speaker 11 I mean, 30,000 of those jobs that are being cut, I don't think the majority of them are making $300,000 a year. Plus, it's not just limited to white-collar work and high-end white-collar work.

Speaker 11 We are seeing it kind of across the board. We're seeing it with entry-level jobs.

Speaker 11 And we're also seeing it, we're going to see it down the road with blue-collar work too, which is why this report from the New York Times is so important.

Speaker 11 The fact that 600,000 jobs are going to be lost.

Speaker 11 And these are blue-collar jobs. The fact that they're going to basically replace humans with robots.

Speaker 10 So

Speaker 11 I think

Speaker 11 the question for people,

Speaker 11 that individual you described, if someone who was just laid off, who was sold this story about how AI isn't going to take their job. And then they wake up one day and actually AI did take my job.

Speaker 11 And now I'm resentful. I'm angry, and I feel that I was lied to.

Speaker 11 There are going to be not hundreds or thousands of people, but hundreds of thousands of people who are in that position over the next few years. And I think the question is:

Speaker 11 what do you want to do about that? Do you want to be the person who does flatline? And many of them will. Do you want to be the person who is grieving about the lie of AI

Speaker 11 and

Speaker 11 is never unstuck from that position.

Speaker 10 The danger is this flat line. And the flat line can come from different places.
I've never,

Speaker 10 what's interesting is what sidelined me, and I never would have thought about it. When I lost my mom, it like sidelined, and I wouldn't have thought that that would do it.

Speaker 10 I would have thought I was so focused on money, I would have thought, okay,

Speaker 10 a business or going out of business or the market's going down. You know, the dot-com implosion hurt, but it didn't take me off track.

Speaker 10 And the great financial recession scared the shit out of me because I just had a kid.

Speaker 10 The thing where I should have reached out for help sooner because it almost took me down and I didn't expect it was losing my mom. And the reality is, all of us are going to face tragedy.

Speaker 10 It's the only thing I know for certain is that everyone will have joy in their life and everyone will have tragedy.

Speaker 10 And how you respond to the tragedy is really probably the biggest indicator of your success. Because some people just never recover.
They just never,

Speaker 10 they never manage to get back on their feet. They never, they lose their sense of.
Winston Churchill summarized it perfectly.

Speaker 10 Success is the ability to move through failure without losing your sense of enthusiasm.

Speaker 10 This was a guy that made the military decision to sacrifice thousands of young Australian men with a total fucking military disaster called Gallipoli.

Speaker 10 He was responsible for terrible decisions that killed a ton of teenage and early 20s young men.

Speaker 10 And yet he managed to, he, I mean, that would just must have been devastating. Maybe it's even a little bit psychopathic, you know, sociopathic, not psychopathic.

Speaker 10 But he managed to believe I can add value. And I think there's a practice around meditation, maybe seeking therapy if you feel like you're stuck.
And also just repeating over to yourself.

Speaker 10 I remember thinking to myself, I know I'm a great entrepreneur. This company went out of business, but I'm hardworking.
I'm willing to take risks. I know

Speaker 10 I got hurt very much a couple of times when I was younger because I had had women break up with me that I was madly, at least in love with.

Speaker 10 And of course, as an insecure young man, the moment they broke up with me, I decided that that was the one that like I would never recover.

Speaker 10 And being able to look in the mirror and go,

Speaker 10 I know I can add value to someone's life. I know I'll be a wonderful boyfriend.
And also to say, you know, you can add value to a company.

Speaker 10 You know, I think it's really important to just tell yourself that over and over and start manifesting it until you start believing it. And also every day to just one foot in front of the other.
Also,

Speaker 10 this is sounding a very, I don't know like a bad version of Mel Robbins with a Gen Z and an old man who drinks too much.

Speaker 10 Use it as an excuse to get really fucking fit.

Speaker 10 Try and take an hour, two hours a day. Try and limit your alcohol and your THC consumption and use it as a means to get really fit.
Because I find just being strong is really good for you emotionally.

Speaker 10 Try and catch up on some stuff, maybe spend some time.

Speaker 10 I just, I think try and look at it as, all right, I'm not going to wait around. I'm going to get right on it.
But also, you will have at least a couple hours free a day.

Speaker 10 Try and channel that into important activities as opposed to just sleeping in or feeling sorry for yourself or becoming, you know, really getting really into that new porn site.

Speaker 11 I can imagine and just sort of hear the retorts from people, say from someone who just got laid off, who would say,

Speaker 11 oh, so the solution is chin up, be resilient, you know, work out and look in the mirror and and tell me I like me. To which I'd say, actually, yes, that is the solution.

Speaker 11 Like these soft things that people often kind of poo-poo as like, oh, you're just offering some wishy-washy advice as to how, when it's like, this is a structural problem.

Speaker 10 It's like, well,

Speaker 11 give me an alternative.

Speaker 11 If you really want to improve your life,

Speaker 11 what are you going to do about it?

Speaker 11 And I agree. I think my generation,

Speaker 11 I don't know, maybe we, I think we, perhaps we underestimate this generation. So I think we'll see.

Speaker 11 We'll see what happens and how we react when AI inevitably wipes out a ton of entry-level jobs as we are seeing today.

Speaker 11 My hope is that we will be very creative and resilient. And I think I'm actually somewhat optimistic that we will be.

Speaker 11 But that is the question. for young people.
AI is going to take your job potentially, depending on what job you have. How are you going to respond to that?

Speaker 10 We'll be right back.

Speaker 11 And for even more markets content, be sure to sign up for our newsletter at profgmarkets.com/slash subscribe.

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Speaker 11 That's cmk.co slash access Last week, President Trump and Xi Jinping met face to face in South Korea. It was their first in-person meeting since Trump's second term began.

Speaker 11 The result was a trade truce. China agreed to pause its export controls on rare earth elements for a year.

Speaker 11 And in return, Trump cut tariffs on China-related fentanyl products to 10%, bringing the overall tariff rate on Chinese goods down to about 47%.

Speaker 11 But there's still a lot that we don't know, like whether this truce will affect NVIDIA's chip exports or TikTok's future in the US. So, Scott, Trump and Xi, they met.

Speaker 11 The overall takeaway is the fentanyl tariff has been reduced from 20% to 10%. So the overall tariff on China is now down from 57 to 47%.

Speaker 11 America is also going to suspend these port fees that we saw. China is going to end its boycott of the soybeans, which Trump and the farmers were very upset about.

Speaker 11 China is also suspending these new export controls on rare earth minerals. They said they're going to step up their control on the chemicals that are used to make fentanyl.
We'll see.

Speaker 10 But

Speaker 11 that's the long and short of it. Your reactions to this meeting?

Speaker 10 My reaction is this is a lesson in really poor strategic thinking, and that is the key to one of the keys to strategy when you're negotiating is to really have an accurate assessment of your leverage and their leverage.

Speaker 10 And I feel this is one of Trump's many Achilles heels, and that is he plays, he thinks he's playing with a stronger hand than he is.

Speaker 10 He thinks he's the biggest customer of China and just muscle them around. We're actually the third largest trading partner with China.

Speaker 10 The biggest is ASEANA, the Association of Southeast Asian Nations. Number two is the EU.
The EU is more important to China than the U.S. And he acts as if he's their only customer.

Speaker 10 He's the only member of a club, if you will. So he's never really appreciated that he's playing with cards that he doesn't have.

Speaker 10 And two,

Speaker 10 I don't think anyone really game theoried out what is their bazooka. And unfortunately, they've learned what it is or they figured it out and they're willing to use it.

Speaker 10 And that is rare earth materials. I mean, these things,

Speaker 10 you know, a single submarine can require 8,000 pounds of rare earths. The F-35 jet requires 900 pounds.
It's literally a security issue for us.

Speaker 10 And they threaten to not only reduce exports to us, but to put controls on any product. that has rare earths such that it can't get to a Western nation,

Speaker 10 which it didn't take people very long to say, this could end the war in Ukraine in a way we don't want to end it. If the all of a sudden the U.S.

Speaker 10 has an inability to produce many weapons as they thought, because we did not stockpile these rare earth materials, on the marginal side, we would cut armed shipments to Ukraine.

Speaker 10 So they pulled out this weapon.

Speaker 10 And if you'll notice what they've agreed to, again, I hate this word framework, meaning we want to pretend this was a productive meeting, but we don't actually know what's going to happen.

Speaker 10 And the thing that really struck out to me is that it's a one-year,

Speaker 10 they've suspended rare rare export curbs for one year.

Speaker 10 That's nothing. That means that, okay, China got some stuff back.

Speaker 10 They lowered the

Speaker 10 tariffs. They seem to have come to some sort of like, it feels like they're just kicking the can down the road.

Speaker 10 Meanwhile, their bazooka, I mean, it's not, they've put the safety switch back on, but they're still pointing that gun at us.

Speaker 10 In six or nine months, it's going to be, okay, what if we do if we don't find, what if they decide to cut this off?

Speaker 10 They basically said, when you say I'm only suspending this critical technology or this critical mineral used in your weapons, your cars, and if you don't, if you don't do it, you know, if we can't figure out a way to get along, we're going to use it.

Speaker 10 This is nothing but

Speaker 10 this feels like a very

Speaker 10 tenuous ceasefire to me.

Speaker 10 My sense is there hasn't been,

Speaker 10 and quite frankly, until Trump's out of office,

Speaker 10 I don't think we're going to have a sustainable, enduring relationship with China.

Speaker 10 And I'd like to say, well, what about Xi? She's probably there for the next 10 or 20 years. She's consolidated power.
So

Speaker 10 I don't know if

Speaker 10 this feels like we've avoided an all-out economic war at a time where we didn't want to right now.

Speaker 10 But

Speaker 10 I don't feel we came away from a lot of this here.

Speaker 10 Bazooka is still aimed at us. We put it off.
They've agreed not to fire it for for 12 months, which just means in six months, we got to start freaking out about it again.

Speaker 11 Or we'll start freaking out about it in a month because they'll just abandon it, as we have seen over and over again.

Speaker 11 I mean, I think that's the problem with these framework agreements and these handshake deals and this press release economy or press release politics is what we have found is that it's very easy to just break these agreements.

Speaker 11 We keep on seeing this because they don't really put it in writing. Signatures are not put to pens are not put down to paper.
We don't see signatures.

Speaker 11 We don't see contracts signed and people going over the language and understanding what the language actually means.

Speaker 11 All we see are press releases, which means that the cost of abandoning or doing a 180 on your quote-unquote agreement is not that high, which is why we keep seeing it over and over again.

Speaker 10 The tariffs go up, the tariffs come down.

Speaker 11 They're on, they're off. We have a truce, we don't have a truce.
They say, oh, we're going to have these, we're going to loosen the export restrictions, but then they're going to tighten them again.

Speaker 11 Now they say they're going to loosen them again. I think the point being, saying the words, we're going to suspend these export restrictions for a year is not a powerful or binding statement.

Speaker 11 And so I think what we could probably expect is that it will not last.

Speaker 11 And so

Speaker 11 This is definitely still a problem, the rare earth issue. And I think all that this has done is highlighted China's leverage

Speaker 11 on the US. I mean, none of us really knew what rare earth minerals were like a year or two ago.
I certainly didn't.

Speaker 11 Or at least I knew conceptually what they were, but I didn't know their significance. And I certainly didn't know that China was a major player in that industry.

Speaker 11 And now we all know China has big time leverage over us. I mean, we didn't even realize how important these things were, but need these minerals for missiles and for cars and to create chips.

Speaker 11 I mean, because of those export restrictions, we saw a ton of stoppages, a ton of closures because there was this shortage in rare earth magnets.

Speaker 11 I mean, Ford had to close down an entire factory in Chicago because they didn't have enough magnets to build the cars because China

Speaker 11 shut them down. And we all learned now, China controls 60% of the rare earth mining, 80% of the rare earth processing in the world.

Speaker 11 None of us knew that before, and now we do because they flexed their muscles and it has shown, okay, China does have a one-up on America.

Speaker 10 So I like what Josh Brown says, and that is you have to always ask what could go right.

Speaker 10 And just as China figured out workarounds for when they, when we embargoed our highest quality AI chips, and they came up with their own LLMs and chips that required less energy, I don't, I think there's actually what could go right here is that we figure out different supply sources for rare earths.

Speaker 10 A good friend of mine, who has been in private equity his whole career, just took a job with the Defense Department. And his job is to find and invest in companies who

Speaker 10 reduce our reliance on Chinese rare earth and other critical components that weaken our defense posture. So to the administration's credit, they've been thinking about this.

Speaker 11 Retroactively, after they realized, oh, oh, oh, fuck, we're screwed.

Speaker 10 You could argue they probably should have figured this out sooner that we were so dependent upon these things for critical.

Speaker 11 Right, before you launch a trade war, maybe make sure that you have the leverage.

Speaker 10 You're sounding more and more like me.

Speaker 10 But

Speaker 10 under the auspices of, again, asking yourself what could go right, potentially, potentially we find different

Speaker 10 supply chain here, different sources here.

Speaker 10 I don't know enough about them, but the investment opportunity, which we would like to come down to, I would love to go further downstream and see, okay, what company, if you're some shitty little company that's in Latin America or wherever, that's been ⁇ that does have the ability to produce these things and these, I guess, these magnets, you got to think that company is getting a lot of attention right now.

Speaker 10 And it's going to have

Speaker 10 a lot of suppliers would love to do business with them because they'll think of them as being more, not being tainted by geopolitical concerns.

Speaker 10 But this is

Speaker 10 Look, I've said that I thought that at the end of the day, by the time Trump leaves office, we're going to end up with largely trade agreements that largely reflect where they were before he came into office with some higher tariffs, but we will have wrecked alliances, created unnecessary tension, unnecessary risk.

Speaker 10 And this is all just a massive, it feels like a massive distraction that kind of gets us,

Speaker 10 I don't want to say it gets us nowhere. I think it gets us backwards.
And just

Speaker 10 don't get the strategy here, what they're hoping to get out of this. I do think his instincts around China were right.

Speaker 10 I do think we had an asymmetric trade relationship there where they were taking advantage of our open markets and theirs weren't open.

Speaker 10 But they have

Speaker 10 kind of, I had never heard the term rare earth materials till about a year ago. And all of a sudden you find out that like we can't produce fighter jets or submarines without them.

Speaker 10 And our biggest, arguably our biggest adversary or our most powerful adversary controls all of the market. Right.

Speaker 11 And by the way, the big question is, did Trump even know what that was before he launched this attack on China? Was he aware of rare earth minerals and critical minerals?

Speaker 11 And was he aware that we need them for our defense industry and to manufacture missiles and tanks? Did he know any of that? Or is he only just realizing this now?

Speaker 10 The team of the best players wins. And there's a couple of things we're not focused on, and so is the boring shit underneath the surface that really fucks you.

Speaker 10 Two-thirds of researchers are now saying they're open to moving abroad. So we're about to lose our intellectual capital, which people don't appreciate.

Speaker 10 And these guys don't appreciate because the effects pop up. You don't even miss the fact that you didn't come up with a new way of pricing derivatives that

Speaker 10 makes a U.S. bank much more competitive than internationally.

Speaker 10 You don't miss, okay, we're no longer producing the best CT scanners in the world, right?

Speaker 10 You just, someone else does it. It's now coming out of Siemens because the world's top researchers and

Speaker 10 mammography or whatever it is end up at the University of Cologne because they're like, I'm sick of this shit.

Speaker 10 So

Speaker 10 when you look at the, generally speaking, if you look at how incompetent some of the higher profile hires have been in the Trump administration, you got to think it infects at every level.

Speaker 10 And I just wouldn't be surprised if no one even brought up rare earths

Speaker 10 until they showed up and said, oh, we're embarrassing your rare earths.

Speaker 11 Certainly what it looks like.

Speaker 10 Well, if you want to see how good a baseball team is or how good an organization is, you look at how clean the dressing room is.

Speaker 10 You look at the quality of, you know, you look at how well run the cafeteria is because it's a general approach and a culture to hiring outstanding people and making sure they feel appreciated and putting in place the right compensation, the right incentives.

Speaker 10 And if his senior level hires, ranging from a guy who's a vaccine denier to a former TV Fox host,

Speaker 10 fat-shaming people, as any indication, or a former head of a wrestling federation, is now in charge of the Department of Education and didn't know what AI was, did you believe that?

Speaker 10 I mean, she was grilled about AI.

Speaker 10 She called it A1.

Speaker 10 She didn't know what AI was. I forgot about that.
So what do you think the number two, three, and 4,000 at the Department of Education who've been hired by Trump are like? And they just hired this.

Speaker 10 I mean, anyways, I'm ranting here, but

Speaker 10 would it surprise me if no one, when they showed up and said,

Speaker 10 we're going to block shipments and exports of rare earth, and someone said, what's rare earth?

Speaker 11 And it shows in the way they have negotiated. They launched the attack.
They say, we're going to flex our muscles. China flexes their muscles right back.
And then suddenly Trump's off in Asia

Speaker 11 meeting with Xi Jinping saying, hey, man, please, please stop. Stop doing what you're doing.

Speaker 11 Like, you're putting forward a thesis that a lot of people would say, like, oh, you're just being, you know, Trump derangement syndrome. It's like, just look at the way events unfolded.
That is simply

Speaker 11 what appears to have happened. They didn't realize that China could do what they did.
And so then they suddenly started panicking.

Speaker 10 It just reflects poorly on us and our competence.

Speaker 10 And I don't think, I think Americans have taken for granted for a long time just the quality and depth of talent we have working for us in our government.

Speaker 10 And there's a general like, oh, you know, it'll be fun to see what it's like to not have air traffic controllers or all these people, all these employees.

Speaker 10 You don't realize there's a lot of talented people trying to figure out a way to get your grandfather's prescriptions mailed to him in a rural area.

Speaker 10 You forget how hard it is to do physical rehabilitation for our veterans. You forget how important it is to have tax laws enforced such that we actually have a treasury.

Speaker 10 You forget how hard it is to actually guide a plane when there's 11,000 planes in the sky concurrently. You know,

Speaker 10 these people are good at what they do. And a lot of people who have a lot of opportunities to go into other industries decide they want to work for the government

Speaker 10 because they find purpose in it. And we've just taken for granted these folks.
Their competence, their commitment, the fact that most of them, a lot of them are working below market.

Speaker 10 Some are probably working above market. But many of them are working for below market fees.

Speaker 10 And I think we're finding out painfully what it means to have a cacistocracy, which means a society run by fucking idiots. And anyways, I'm not

Speaker 10 back to China. I think we've just kicked Can down the road here.
I think she knows he's playing with a stronger hand.

Speaker 10 And Trump has made a rookie mistake in strategy, and that is believing he has assets he doesn't have.

Speaker 10 All right.

Speaker 11 Let's take a look at the week ahead.

Speaker 11 We'll see earnings from Palantir, AMD, Uber, Pfizer, novo nordisk spotify and airbnb we'll also see the results of the new york city mayoral election and the supreme court is set to begin hearing oral arguments on the tariff case on wednesday scott any predictions mandami is going to win uh and my prediction though is that you're not going to see an exodus from the city uh i think There's actually one of the most unfortunate things about the city, I think, right now is it's become so expensive.

Speaker 10 There's been so much inflation that the scrappers,

Speaker 10 really talented, hardworking people in a variety of industries who want to come here and just kind of make it on raw talent and dancing between the raindrops.

Speaker 10 I think we've lost those people, which will hurt the economy over the medium and long term. That has nothing to do with Momdame.

Speaker 10 He's going to win. But all these people threatening to leave and corporations threatening to leave, I just don't think that's going to happen.

Speaker 10 One, I don't think that the structural he has actually, I don't think he has the authority to make many of the changes that these corporate leaders are worried about.

Speaker 10 And I just, I've always found that, quote unquote, whenever people are threatening to leave, that's not when they leave.

Speaker 10 You know, everyone was going to leave California. And as someone who's in New York

Speaker 10 a lot, the reason why there's the highest taxes in the world here is because it's worth it.

Speaker 10 And if you have the money, which these corporations do and these rich people do, I'm not, and I don't think these, it's sort of a mood, a false argument because I don't think he's going to be able to raise taxes.

Speaker 10 I don't know if he's going to to be able to do it. I think if you look at his actual power, I'm not sure he has the power to do these things.

Speaker 10 That's one small prediction, but the other prediction just goes back to what we were talking about before, and that is I think we're going to see significant layoffs.

Speaker 10 And Mia did this work at a variety of other information age companies. And our picks were Etsy, Pinterest, Airbnb, PayPal, and HubSpot.

Speaker 11 This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producers Adam Weiss.
Mia Silverio is our research lead.

Speaker 11 Our research associates are Isabella Kinsel, Dan Shalon, and Kristen O'Donoghue. Drew Burrows is our technical director, and Catherine Dillon is our executive producer.

Speaker 11 Thank you for listening to Property Markets from Property Media. Tune in tomorrow for a fresh take on the markets.

Speaker 11 in kind

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