Agentic Commerce and Contextual Intelligence for Wholesale Distributors & Manufacturers

Foreign.

Welcome to around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by Lead Smart Technologies. Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents, and the global wholesale supply chain. Whether It's M&A SaaS and cloud computing, B2B, E commerce, or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most.

How you holding up down there in the cold? I keep thinking of you. It's so cold. It's like you must be dressed up in your, you know, arctic winter gear.

I was out last night. Darlene and I go to a Bible study on Thursday nights and I usually dress quite nice for that. So I had a suit on with a sweater vest over that and the, and over that was, it was raining pretty hard when we left and so had a raincoat overcoat for that. And I walked in and I felt like I was a Midwesterner or an Easterner the way I was dressed because most of us in California just don't, you know, because of my work travel, you know, I have, I guess I would say I have more of a business and, or dressy cold weather wardrobe than most Southern Californians have. So I was prepared. But yeah, you're right because I was the wimp all week at the office about being cold because I think that's, I think your reference is that point. Right.

Yeah, I just, it's just been cold here and I just, you know, it's like, okay, he must be really got his, his winter down gear on.

That's right. That's right. Exactly. The, the, the wimp. The wimp that wants to have a second home in the mountains.

Right?

That's funny. The. I did pop into one of our offices yesterday down the hall for me and there was somebody in there with, with. Well, one person was wearing a down jacket and the other person had a, a jacket on and a, and a blanket on their lap. So probably need to check on the temperature at the office.

The air, the, the heating. H Vac does not work in that room. So yeah, it's, it's, it's either, it's whatever is going on outside. It has nothing to do with. Yeah. The air conditioning or the heating. But anyway, that's another discussion.

This is an interesting topic for a live show, huh? Who cares?

We need a distributor that can come in and really do a good job of putting in some good H vac stuff there.

Well, and you know what's? Funny, I saw last night a good great friend of mine who is no Daniel's exact title, but he's a senior leader on a national level with carrier and the H Vac products and his son, who's I think 20 now, just got all of his certifications to be an H Vac tech and went to work for one of the local contractors here. So maybe we need to get those, get those guys to come out and check things out for the offices. So it's good to see our friend Scott with a leaf with us this morning. Got a call with Scott later today. Looking forward to that. Appreciate him being with us. So Tom, we're going to talk about all kinds of stuff today, right? We're going to talk about the economy, the supply chain. You're going to actually share some things with us about how cryptocurrency is impacting some of the craziness going on in the markets right now, which I'm looking forward to. But we're going to talk about some HR issues, we're going to talk about some M and A. We're going to talk about the looking to the future of all kinds of things related to sales, marketing, AI technology, robotics. I'm trying to figure out, Tom, as a side note, there's so much happening in robotics, I don't know if we need a second, you know, humanoid robotics and manufacturing robotics and just couple of videos I saw this week about, you know, humanoid robots being able to one one in particular being able that all they're doing is building it out with its technology and its functionality is for use in the home. It's not about, you know, multifunction. It's about, you know, the stuff I've been talking about. I don't know, we either want to, I want to either want to start sharing more articles or maybe we even just do a separate around the horn 2.0 show about what's happening in robotics. I've been saving a lot of the video clips and so forth because it's just, I think this is, I don't want to say I'm going to be right about my 18 to 24 month prediction about being able to have a good functioning humanoid robot in your home. It might be a touch longer, but it's astounding to me how fast things are moving.

So I have a prediction market for you.

Okay.

Okay. What will we become, what will we see more mainstream? Will we see robots in our house or self driving cars? What will be, what will become more mainstream first? I mean and I mainstream may be too strong, but yeah, sort of more, more commonly seen and, and yeah, utilized.

So I love that you asked that question. If you would have asked me this three weeks or a month ago, I would have said no ifs, ands or buts. Self driving cars. Now I think there is a whole lot less. I mean, how would you legislate a me having a robot in my home to help clean it, kid? I mean, let me rephrase that. There's no reasonable thing that I could think of of why anybody would want to legislate that other than safety factors. But we already have safety factors for electronics and machinery, you know, for, for our home ul and all of the things that go with that. So I do, I think in the self driving car, right. It's from what, as I understand it, most Teslas or the newer Teslas are just ready for them to flip a switch on the software for them to be ready to do that as well. Exactly right. You've got waymos. Right. And so I, I think the technology is already there. It's, I think your question was about adoption or what will seem more mainstream. I think your word was mainstream.

Yeah, adoption is correct. Yeah.

I think this is a good thing for us to check in on like once a month going forward. I'm going to say they're going to happen at the same time. And if I, as of today, I would say it's a reasonable likelihood that we could have easily available to us a robot in our home before self driving cars are mainstream.

Okay, so would you put that at 60% probability, 70% probability?

I'm going to say 55% robot. I'm going to say 51% robot. 49%. How's that for vacillating?

Yeah. All right, no bet. It's called coin flip. It's called a coin flip. All right, fair enough.

But the reason I say that is, and it's, I think the important factor of this Tom, is, and it's an interesting, intriguing question is like I just said, I'm almost saying if you would ask me two weeks ago, I would have had very straightforward self driving car. My, my caution about self driving cars is I think the value of self driving cars is that when all cars have the capabilities and collision avoidance and all of that stuff. Right. You so, because right now you could go buy a Tesla and I could drive my SUV that has no, I mean my car has what is it, collision avoidance or self correcting stuff for you know, lane changing or whatever. The seat vibrates and Steering wheel vibrates and lights come on. But until every car has the same capabilities, when I describe that best for collision avoidance, I think you've got risks that go, go with that.

Well, no, you have risks. But even today the safety records of self driving cars are miles better, no pun intended than the, than, you know, obviously passenger driven car, person driven cars. But the, it's so out of the box for people still. Right. To be sitting there. I mean, you know that the Tesla Robo taxis or whatever, they have no steering wheel, they have no brake. You basically get in the front seat and you sit in the front seat just like you'd be in the back seat. Right. That's really, I think hard for people to accept that change and that lack of control over things. Right. So, so yeah, I mean could you.

Would you, how would you feel right now if on San Francisco Avenue in Ventura, California, if a driverless car pulled up in front of your house that has no steering wheel, no brakes and wants to drive you to our office in Orange County? You. How do you feel about that?

I would do it. Yeah, I would have probably some trepidation, but I would do it. I would be. Because I think it would make it. I might find it might go a little slow. It might be conservative or anything. In fact, if anything I'd be more thinking it would be more conservative in its driving capabilities, but I would do it. You know what I think I've driven the Tesla with it with the self driving mode and in the rain, it was pouring rain and it worked really, really well. A little conservative of times, but really well. So yeah, yeah, I don't know. So.

Okay, now we're 11 minutes in, we haven't even started our show. But that's pretty funny.

But the prediction market.

No, no, let's stay on this for a second because what's your take on, on your question to me? Mainstream humanoid robots.

I think car cars will be, I think self driving cars will become more prevalent faster than robots, than home robots just because I think they're a little bit ahead of production and so forth and, and things and. But I, I do agree it's kind of a coin flip. I, I certainly wouldn't put a lot of weight one way or the other. Yeah, the interested if people are listening. Hey, good morning to Dan and Bob. But yeah, interesting. If you know what other people's thoughts are. Will we see self driving cars more mainstream or home robots more mainstream first?

So let me ask you the question differently real quick. Let's. Because mainstream is a is a key component of what you said. So mainstream would suggest day to day, most people do it. It's just part of life.

Yeah. Not, not quite there. But I, I think I, I think, you know, prevalent. Let's just call it that way. Right.

Yeah.

You know, it's beyond sort of the, maybe it's still in the early adopter phase, but it's prevalent. Yeah. And you know, I would love some self driving cars even here in town that you could just get and hey, I want to go downtown, go have dinner, get in a car and you know, jump in the thing and come back and not have to drive or do any of those kinds of things. That would be great. And I would, and I would think twice about when I would use my car. I wouldn't always use my car for every transportation.

And I think the interesting component of what you're saying with that, Tom, is, is, is key that I like to drive. I enjoy driving.

Yeah.

I don't enjoy driving in traffic and things like that. I think what's interesting is Bob made a comment here. He says scarier will be when flying cars become a thing. Too many people can't drive as is. Can you imagine them trying to fly? Yeah, but I think that what that triggered for me was, I think, and it's just, you know, one guy's thoughts here is I think in that setting I would probably be more comfortable getting, you know, going down to the, the empty lot at the parking lot at the grocery store that's been segmented for a flying, you know, whatever it is, an electric helicopter that can take me somewhere. I think I would have less concern about that than I would about getting in a box that has no steering wheel and, and, and going to your house. Because you know what I get on 450 mile an hour, you know, aluminum or metal tubes consistently where I put my life in someone that I've never met, hands that might have been at the bar till 3am and got on my plane to fly it with me and 300 other people or whatever. I do that monthly if, you know, if not more so the idea of getting in a flying device that is out of my control. I already do that all the time.

Sure. My concern with the flying device is you look how hard it is the air traffic control systems and how, how do you air traffic control those flying devices? Right. Whereas planes, at least you have, you have a lot of people, a lot of attention on the plane right through the air traffic control system as well as well as the pilots and so forth. Here, I don't know, that's a whole different thing. But I won't.

So I do, I do agree with you. And Bob made an interesting comment. He says I miss manual transmissions. I was driving home the other night and I saw probably like a 1980 BMW 3.0 CSI which is kind of a longer nose touring car that they made. It's always a car that I've loved and I was like, you know what? If we ever live in a house that has a garage that I'm allowed to choose what goes in it, which I don't live in that house right now. I could see myself having something like that or you know, a 70s Porsche with a manual transmission.

So I think there's. Look, there's always going to be a time and a place for driving. Yeah, right.

And maybe, but maybe not.

Well, but if you want to drive, you should drive. It's no different than somebody getting in a race car doing something because they want to drive of the. Of the thing.

But the thinking is, is that the ideal scenario is that all cars are that are on the road are self correcting anti collision. I would be cautioned to think that we could be heading to a place where you can't drive your 1972 Volkswagen bus anymore on the roads or maybe.

Not on the freeways or there's certain roads where you can and where you can't. Yeah, right.

Yep.

That's. I could totally see being like a highway that is designated for, you know, just like a ski area. Right. You can put snowboards in some places and some places you can't. You know, designated for self driving or.

So you can only drive your car at Deer Valley.

A Deer Valley. Yeah, that's right.

That's funny. What's interesting, Scott says he has a client that has Tesla coming out to spec robots into their operation next week. So I'm gonna, I've got a call later today with Scott. I'm gonna ask him a little bit more about that. So see, look at Dan.

He's all ready to go with a self driving car.

Dan has a brand new BMW.

He says his wife would never ride with me.

The but Dan has a brand new BMW. I heard. So we're not self driving. I don't think so.

Okay.

I guarantee you it's a nice car though because one of one of his guys at Net plus told me about that. So. Okay, that's out of the bag, Zach. So. But you know what if whatever Dan Judge says I'm probably going to go with that because all Right. He's not going to steer you wrong. We're going to talk about their newsletter later, so. Hey, you know what?

Funny. Steer you wrong. That's pretty good.

Yeah. Pun intended.

So you wanted, you wanted to kind of move things along faster this morning. Well, here we are.

Why don't we just talk for three more minutes about robots and self driving cars and then we'll start our show 20 minutes into it.

Okay.

All right, we'll do the quick one. I, I'm guessing I'm gonna know who.

We are by now. We don't need to go into that.

Yeah, I think. Well, I think John Taylor, our editor and producer of the show, that when he gets his hands on this later, I'm guessing I'm going to hear from him. So really quickly for those of you who may be tuning in first time, I'm Kevin Brown, this is my lifelong friend and business partner, Tom Burton. We get together on Friday mornings and we talk about the news of the week with the economy, supply chain, AI obviously robotics and self driving cars. We do this on a consistent basis every Friday. We're joined by guests off and on. We've got, in fact I was doing some messaging on LinkedIn, starting to do some preparation for our January show. That would be our third, third show of doing that with Ian Heller from the Distribution Strategy Group and Mike Marks from Indian River Consulting and Dirk Beveridge who probably doesn't even need to be told who he is. Dirk is doing some wonderful work about, within, possibly within wholesale distribution, manufacturing related to not forgetting the human component of our workplaces which I think we can tend to do with all the technology that around us. So we're gonna try and get that band back together for our third event of looking back at the prior year and looking forward and maybe create some of our. Tom, have you built the Poly Market, the Tom Burton version of Polymarket yet? You're gonna vibe code that I would like to. Yeah, I think that would be really fun for, for that upcoming show that we'll do in January, but we're looking forward to doing that. And so we have some great guests, as I just mentioned, some thought leaders and industry leaders there and we do this again every week. We discuss a newsletter that we're going to show in just a moment here. But if you're listening in on the podcast version where you're not seeing these two handsome faces this morning, then you are missing out on seeing that newsletter. But that's what we'll be discussing moving forward today. That's called around the Horn in wholesale distribution and manufacturing. If you don't get that newsletter and would like to join the 10,000 or so people that get that each week, we would love to add you to that list. You can just do one of three simple things. You can send us an email@helloadsmartech.com you could go to the LinkedIn page for the podcast and that is around the Horn in wholesale distribution. You could also get access to that on the lead Smart Technologies LinkedIn page. And then finally, simply the easy way to do it as well is we have a website for the podcast. It's called around the.

Sorry.

Aroundthehornpod.com www.aroundthehornpod.com and you can sign up for the newsletter there. You can see past episodes and you could also reference us on twitter or x athpod. I guess not.com just ath pod and we'd be happy to get the newsletter out to you. So we appreciate you being with us. We couldn't do this show if we weren't sponsored by the company that Tom and I work for, which is Lead Smart Technologies. We've developed a product called Channel Cloud. And Channel Cloud is an AI enabled CRM and customer intelligence platform where we bring siloed data from around your business, from your erp, your marketing automation, e commerce and other data sources that you have. It might be other AI tools and other things. We bring all that together in one single platform and we use artificial intelligence and other tools against that data to bring insights into your business to help accelerate growth and get deeper insights into your customers, your teams and your overall business. So if your company is digitally transforming, trying to figure out with what you're going to do as next steps to start using AI in your business and so forth, we'd love to chat with you and you can reach out to us anytime through our website or as well as on LinkedIn or wherever else you might want to find us at. So Tom, why don't you take it away and get us started?

Well, we have economy and supply Chain. Which of the articles do you want to go with?

Well, you know, first we talk regularly about tariffs and so forth and there's no huge news about tariffs. Although I was going to share something from a meeting I was in earlier this week I forgot to tell you about, but we've had some lifting of tariffs on select goods from four Latin American countries, El Salvador, Guatemala, Ecuador and Argentina. And that is really tied to that kind of relief, I guess I'll say from some of the tariffs is tied to food prices in this country and the administration's goal to reduce the those tariffs so that we can get some. Some prices down. So I guess that's some good news on that front.

Was that predominantly for produce or what was it that they.

Coffee. It was. Let me just look at the articles here and so forth. In fact, the picture in the article is coffee beans, but there was quite a few different things, mostly related to food sources. Yeah. So the, you know, you can't do anything in Washington without the two sides arguing with each other on that.

Right.

So they talk about a number of items that they just seem. But it's mostly in the setting related to food, so easing the pressure in the groceries. So coffee beans, bananas and other fruits to drive down into the article here.

Apple comes from down there. Yeah.

Administration talks about to drive down the cost of living for Americans. It said Secretary of State Marco Rubio and Brazil's foreign minister discussed a framework for US Brazil trade relationship as well in those meetings. So it says Brazil is the world's largest coffee producer and exporter, but it exports. The US face a crushing 50% duty imposed by US President Donald Trump in the administration. So there, that's where they're balancing out for that. So. Okay, you know, go ahead. I'm sorry, Tom.

No, it's okay. Just saying. Okay.

No, I think the issue that, you know, my mind to think about that goes with that is really tied to the, you know, and this is, I guess I just look at it as, it's an important factor to remember of this administration. Love it, hate it. On the fence between. It doesn't matter. This, this administration has said, you know, they want to make America better, not the world better. And most administrations have a balancing act of the great things they want to do for the world. So I think this is an interesting thing, right. If the tariffs are based to get equitable commerce right. And equitable trading with countries around the world, then the shift is very reasonable to say, well, you know what the balancing act for us is. We want access to bananas and pineapples and coffee, and our people are paying too much, so we'll adjust some of the tariffs with that and balance it out a little bit. So.

But are those countries taking any more exports from us?

Doesn't say @ this point. I think this was.

Is it, you know, just cutting cost or is it actually balancing?

Well, the article says, as I mentioned multiple times, this was about the cost of things in the store.

Understand?

So, you know, it's funny, I. It was just Certainly I. Not something I do a comparison of, but we have. I can't drive home from our new office without going by Whole Foods. And that's also now. And I probably need to stop doing that. Is that's also the spot where it's easy to do an Amazon Return and I probably need to go back to doing Amazon returns. Probably the best thing to do would be stop buying from Amazon or so much, but from Amazon returns. There's a UPS store just the other direction from our house. But I've been popping into Whole Foods here and there to, you know, just, oh, I'll just pick this up. Well, then that turns into, oh, we could use some more of this. And next thing I know, my shopping list. If I made a comparison, my guess is 10 or 15% higher than if I went to the, you know, Albertsons or, you know, that's Kroger for other parts.

Being that Whole Foods are. The acquisition of Whole Foods by Amazon is paying off, right?

And they're crazy efficient. It's just in white. When you walk in the door, take a left turn, there's three people there. The line. If even if there can be 10 people in line and you're still done in three minutes, it's fantastic. But anyways, on the tariff front, it's interesting. One of the things I was going to share with you, though, was I was in a meeting earlier this week and there was a gentleman, a Chinese gentleman in the meeting. We were talking about some. They're representing a large manufacturing company that we were meeting with and we actually were talking about they make some industrial equipment and we were talking about their distribution model and so forth and how much product they're bringing into the US and where their warehousing is and so forth. And we started talking about tariffs a little bit. And this was a younger gentleman representing a company that his family is invested in, and they're invested in multiple robotics companies as well as industrial equipment manufacturing as well. So he's pretty tied into what's going on in the manufacturing side of things there. We started talking about tariffs and I had asked him if they had been looking into using any of the free trade zone warehouses. And he said that they did a little bit, but the prices were so outrageous for the lower amount of quantities that they need right now is that they've bypassed that. So I asked him what his thoughts were on tariffs and what he thought might come out of it, and I was astounded. His response. His response was not necessarily across China, but in the business circles that he and his family work in, in the manufacturing space in China is they have a belief that there is a hand, handshake or verbal deal already, that it's just going to settle at 50% for at least a year.

5, 050. That's higher than you would think.

It doesn't shock me. You know, I mean, if you think about that and you know, if the, this goes back to how you balance your, your pricing on things. Right. If you're, if you're a manufacturer in the U.S. you know, and you're taking this company's OEM components to help you build something and they make things that go into large manufacturing equipment. They make stuff that goes into 3D printers and so forth. If you think about that, if in that setting is if, if they ate 15, 20% of that at the factory in China's level. Right. And you know what I didn't get into because I didn't. It wasn't appropriate for the meeting I was in because it would have put them in a bad spot. But if you start seeing if that were the case, and let's say for Chinese manufacturing companies, the government backstops them with some unique credits or whatever they might get that may be on there, and that takes it down to 30%. They tend to manufacture. The OEM partner in the US eats 10% and there's only 10% passed on to distribution and end users. You know, so there's a lot of ways to look at that.

Yeah.

But 50, you know, is, is an interesting number and it certainly does become more manageable.

Well, but that's quite a bit higher than I think the 30 or 35. That is.

The threats are. The threats are at 100 and 150. Right. So. And there's some stuff that. That's what's in place.

So anyways, you have a. Do you have an idea of when that would be kind of solidified?

Didn't go that far. Was the. My question was probably inappropriate for the meeting I was in. The certainly wasn't something that we were going to continue on because it had really no relevance to what the meeting was about. This was about. Can I get some insight for the. The show.

Okay, good. Oh, nice job.

Yeah. So anyway, so jobless claims fell this week. Right.

November 15th, jobless came. So. But there was actually a employment report that came out yesterday. I wanted to share some of that because it's. It wasn't, you know, it wasn't the usual Friday, so everybody didn't know when it was gonna come out. Yep. Share some data from that. So the September employment report came out yesterday. We will never have an October report per them.

That's what they said. Yep.

In the December report, which is supposed to come out like the. Normally on the 5th or something of December will only be out on the 16th, which of course will be after the Fed meeting. So this is the last job report that the feds will have prior to their meeting on December 10th. Connect all those dots. Yep. So anyway, the. There were 119000 jobs supposedly created in September, which was higher than the 50,000 jobs that were expected from that report. So at that beat expectations. However the job growth were revised is not shocking for previous months.

Wait, they adjusted it? They revised it?

They did.

No way.

They revised, you know, by quite a bit actually. See if I can find the numbers here. And the. But unemployment rates went up. Unemployment went up from 4.3% in August, which is the last report we had, to 4.4% in September, which is the highest unemployment rate we've had in four years. In about four years, which certainly is still very high. But it's higher than what it. What it was there. Right, so. So there were jobs added, you know, across the board and. Well, not across the board certainly in certain industries that more jobs are added than others, predominantly in healthcare and food service, where the largest areas the biggest loss of jobs were in transportation, warehousing and federal government. Again per the report that was here, which is part.

Which is part of the administration's goal of trimming some of the fat in Washington.

Right? Yep. They said there was about. Federal government is down about 97000 jobs from its peak in January. So I mean it's. Which is really probably nothing in the scope of things, but still a lot of people. Right? It's 97,000 people is still 97, 000 people. So anyway, the market was. Oh, by the way so August revision, just the August revision was reduced from 22000 jobs to minus 4000 and the July revision was from 79,000 to 72,000. So it was 33,000 lower than expected or lower than they had previously reported along the way there. So the market was supposedly spooked a bit by the increase in jobs compared to 50 to 119,000 compared to what they were expecting. But the. They were quote unquote pleased if you want to call it that, with a 4.4% unemployment rate because maybe this will still not cause the, you know, be enough of a. A job boost for. To avoid cutting rates In December. Yeah. So this isn't too much of a red flag to. To stay on. Stay on longer. One thing they said is, you know, if you look at all of the data here, it appears to be kind of fitting this narrative that we're hearing, which is no hire, no fire. Right. So we're not necessarily getting rid of people, but we're not hiring people. Things are just kind of sluggish overall. That was kind of the. The bottom line takeaway.

Well, and you. You see that, right? And then we have another article there about. That's the Associated Builders and Contractors analysis said that in September, construction added 19,000 jobs. So we just got this. I think that ties to your point, right, of no hire, no fire.

Yeah, it's just.

Right. It's. There's some stability.

There's industries that are adding jobs, there's industries that are not, and there's industries that are reducing jobs.

Well, I think this would be a great, a great data point of this if somebody did all the work on this, which I'm certainly not willing to do, but would be if you removed just the federal job cuts that have come. Right. Because we know that the administration that was part of the shutdown. Right. Is wanting to make some adjustments and shifts. There is. We have a bloated federal government and we should move our company to Washington, D.C. because there's some really great office space there with some beautiful views of the Potomac and all of the city and so forth. That would probably be very inexpensive because of the government jobs that are. That are there or not there anymore. So it's funny to digress for a second. I was in Washington, D.C. for, I guess, three times in the last year, and it's pretty funny talking to Uber drivers is that there are specific days of the week where people are required to be in the office and in D.C. and government jobs, and then the other days they're not. So it's kind of like our company, right. Fridays, work, work from home, work from vacation, work from wherever you're at, work in the office if you want, but you've got options on Fridays is.

The.

Streets are just literally from one day to the next when you're right in the heart of it all, you know, in the. In the letter or the Alphabet. Streets. I guess they say in D.C. it's like one day you can move freely and there's no issues, and the next day it's gridlock. So it's something. But yeah, obviously with fewer government jobs, there's going to be plenty of space.

I Think there was a needed to get everybody back in the office too.

There has been. Yeah. Yep. So I'll, I'm going to be back in D.C. at the end of December for the new executive summit. So that, that will be I'll tell you what those, which, which days that are and what it looks like because I'll be there for I think four days in late December. So looking forward to that. So anyways, let's move it, move ahead here a little bit. Factory orders rebounded as expected. There's good article from Reuters about that. New orders for U.S. factory goods rose 1.4% in August after a July drop. Funny how these, you know, it takes forever to get some of these reports out and then I don't think on the factory orders and things like that that's, you know, those are pretty specific in how those are managed and run. So you don't see those being adjusted like you do jobs and so forth. So I think that's a plus on that standpoint. Next article is again from Reuters. Talks about US Trade deficit narrows sharply in August in a boost to third quarter gdp. Any thoughts on that one?

No. I mean it says that imports tumbled. Right. So there were a lot fewer tariffs, which means we took in more than we. But I guess that's not surprising. We've talked about that before with some of the tariffs and so forth that things had reduced. So I don't know that that, you know, tells us anything in particular other than just a sign of the times.

Well, they said this was an economist that says the good news about good news for trade in the US Economy is that tariffs, he says, are working. The bad news for US Trade and US Economy is the tariffs are working markets and Federal Reserve officials will scramble to find out which is true. But maybe both are. He said that talks about trade gaps and so forth. He said the trade gap contracted 23.8% to 59.6 billion according to the Commerce Department's analysis and the Census Bureau. But economists polled by Reuters had a forecast, had forecast the trade deficit would ease to 61 billion. So there's just this variance up and down. There's a good chart in here about this. So I think there's a lot to be seen about what's going to come out of the tariff component.

Yeah, I think you'll see this level out though, more and more. I think it's a roller coaster of imports and, and yeah, well, well, there.

Is a, you know, the, the interesting thing is when we get data on, you know, obviously you know, here we are, it's Friday, November 21st. You know, Christmas items are in the stores now and holiday items are in the stores. It'll be interesting to see when we get the data on the impact that the tariffs had on, you know, the boost in shipments that we have coming in that we had a few months ago for holiday items at Costco.

The holiday items were in like right after January, 4th of July practically, it seems about.

Yeah, you're right, you're right.

Barbecues move away and here come the Christmas trees.

Let's cut them some slack and say end of August.

Okay, all right. Yeah, but I mean, stuff that was starting to show up at 4th of.

July, I was in T shirts and shorts and flip flops when there was skeletons at Costco. Yeah, you're right about that. You know, Tom, one of the things we bypassed as we were starting to talk about tariffs a little bit was and it kind of ties into what's going on with the Fed meeting that's coming up in December. So we've got another meeting coming up. There was an article that was out this morning in cnbc. It talks about one Fed official may have saved market from another route. So we've had some pretty hiccup days the last this week in the stock market. I was just looking right now, NASDAQ's.

Up.

Bitcoin's up, NYSE is up, S&P 500 is up this morning. So things are looking positive there. But we've had kind of a down week. You had some thoughts on some of this and kind of how some of these things are triggered. And I had made a comment in our pre show discussion about, you know, rate, interest rate in December maybe being baked in. And you pushed back on that and said, well, wait a minute, there's some, some challenges that go with it. So you want to unpack that a little bit because you had some interesting thoughts and feedback on some of the impact of cryptocurrency on that as well. That I was.

Before we get into that, if you look at the poly market for this Fed decision.

Yep.

Right. Today it went up 32 points from 30%, 30% probability of a reduction in December to a 30 a 61% probability.

Right.

Mainly because the. Was it John Williams, the Fed governor, came out today and said, yeah, I think it's still very appropriate to be cutting. Right. So which again, the market yesterday had a. Well, at least what the narrative is, the market had a bit of a temper tantrum because of the job report and the fact that, oh, maybe we're not going to get a rate cut. So we had a big drop yesterday and then a big recovery today. I still believe we will be getting a rate cut. We talked about this last week. I think we will be getting a rate cut. Remember, we only have to have seven of the 12 governors vote for it.

Simple, simple majority for the FOMC couple.

Or maybe even more than a couple that are against it. But I still think it will come through.

Yeah, you know, it's a simple majority is what's important with that in that setting. No filibuster, right? No filibuster on that. So I think that's important. You know, and the article talks about that. I pulled up an article, I was listening about that this morning, and it said Williams intervention came after several other Fed speakers indicated reservations about December, but drew back from categorical statements, perhaps indicated they recognized the December struggle was turning into a crisis of governance at the Fed and they need to give Powell space to make the call. So it looks like maybe somebody got their hand slapped for speaking out a little bit too much. But you know, again, back to this just takes, you know, seven of the 12 to get a simple majority for that. I think, you know, part of what I think about that ties for me with this is that there is, we don't know the impact enough on tariffs yet. But we don't. We, what we do know so far is that we're, you know, what would it be? May, June, July, August, September, October. We're almost seven months into tariffs and it's, there's no crisis going on related to it. You know, the comment I made earlier of quoting that economist was, you know, the good news is tariffs are working. The bad news is tariffs are working. So we don't know what that impact is. And now we've got, that's so you don't have anything to blame things on. And then all the traditional statistics that the Fed is really looking at are kind of vacillating a little bit. Right. As well. They're, you know, they're like a heart that's in ventricular fibrillation that's fluttering and there's nothing there. So it's like, well, why wouldn't we drop? Because the risk is we can keep slow things down. If we drop another quarter, quarter point, we can put some stimulus into the economy. You know, I would love to see interest rates drop. You know, the really unique thing is something I haven't had a chance to do any type of research on is the Fact that we've, we're seeing, you know, multiple drops and we're going to see another one. Which would be the third one this year, correct? Yep.

Yes, I guess so.

Yeah. So December would be third. Is it, there's not really a significant impact on, on mortgage rates and that, you know, typically, you know, it's almost, you know, you, in theory you should be seeing a very narrow margin on the. Because right now what's the fed rate at? 4 and a quarter to 4 and a half. Is that what it is? And mortgage rates are still at 6 plus percent. I mean that, I don't think if we went back and looked when rates were really low that there was that much of a spread between the Fed rate and if you look at when.

It was the 0% area. Right. Mortgage rates were still 3%. Three and a half. Yeah.

Two twos to three.

So they're still about the same. Yeah.

So it's probably about the same spready. I think you're right.

You know, Bob mentioned here that somebody from Fox yesterday was saying that the Fed is not going to change the rates this year, but they'll be on the hook for a half point drop next year. I don't know why they would do that. That would be, I would agree. But I think they would be better served doing a quarter in December and then another quarter point in the first quarter. But you know, hey.

So I, I think that's probably what's tied to this is what, what Bob's talking about is that, that, that Fed governor saying that is that could response this morning could be them getting together and going whoa, whoa, whoa, whoa, whoa. Let's, let's cool your jets. Let's get in and really talk about what this means. Right. I think that could really be a component of that. So anyways, let's, let's go over to.

The stock market for a minute because it's been a rough month for the stock market.

Yep.

And you know, the chatter has been oh well there's been the AI bubble. People got nervous about the AI bubble quote unquote. And you know, valuations were way too high and so people ran for cover and took money off the table. And then of course again what we just been talking about the is there going to be a rate cut in December and, and things like that.

Yeah.

And it's been, you know, it was kind of, I mean as you remember in a previous life. Right. I was a partner in a hedge fund and I, and we built, you know, computer training programs for, for a Investment funding, I don't know. I've gotten to kind of, you can kind of look at the charts and you can look at things and things don't seem to make sense. So I was trying to do a little homework. I saw some stuff on cnbc. And you know, the market today is controlled by the large institutional computer trading. The algorithms. Yes, right. So the algorithm and the algorithms of the market are based on momentum. So when you have momentum in a direction up, direction obviously tends to go up. And if there's momentum and the algorithms look for changes in momentum and so they try and time that momentum so they know when they should be going long or where they should be going short based on the moment. And this is overly simplistic of what I'm explaining here, but that's basically that the premise and what there seems to be is crypto. The drop in bitcoin started actually a little bit at the end of, at the middle of October. And there's been progressively a larger and larger drop in bitcoin and some other crypto, mainly because some big, big holders, big whales that have held these cryptocurrencies have sold well. As it turns out, a lot of these algorithms that are controlling, you know, large sums of funds use. Bitcoin and crypto is kind of the canary in the coal mine. So they look to see is the momentum of bitcoin and crypto positive. And they use that as a gauge to drive the momentum of where they think the market is going to go. Mainly because bitcoin and crypto are considered to be sort of the higher risk assets. You know, like the, have you ever been to a vineyard and they plant roses around the vineyard?

And the reason I've been, I've been to vineyards.

Yeah, you've been to vineyards. Yeah. But you probably didn't see the roses or smell.

I'm very. Yeah, go tell the story about roses in vineyards.

Roses right around the vineyards. Because if there's any sort of bugs or parasites or whatever, they'll eat the roses first before they, they'll see, they'll.

They'll see it come to that first. Right.

And so kind of that concept here with bitcoin is a lot of these algorithms are saying, well, if we're seeing momentum shifts in crypto and bitcoin, then that must mean the risk appetite of the market is changing, the momentum is changing, therefore our algorithms are changing. So if you went, and this was an interesting article on cnbc, they went and looked at the correlation of the drops over the last month the drops and the, and the velocity of the drops that have there has been almost directly correlated to the movement of bitcoin.

Right.

Up or down. So even this morning, right. I think the market's up. But if you look at, if you were to look at the correlation, you would see that there was a bit of an up move on bitcoin which has then resulted in a bit of an up, upcoin up tick in the general market.

So you look at the chart on bitcoin, man, if I just look for the last year to date, we were as high as we were 125 in October. 125, 722. And it's at 87,000 today. So how much are you buying?

You know, there's still some consolidation, I believe, taking place in the crypto area. I don't, I don't think we're at a bottom yet.

Where's the bottom for bitcoin?

Yeah, I think around 75.

Wow.

Yeah, but that's, but that's still, I mean that's still. If you compare it to what it was even a year ago, I think that's basically where it was a year ago, roughly 52 weeks ago somewhere.

Let's see, last December, its December high was, tell you December high was 102, 103. Okay, that was its December high.

I think 102, 103 on it is somewhere around 74. The last, in the last 52 weeks.

April, in April, it was beginning of April 78.

Okay. Anyway, yeah, so it, it did drop, but nonetheless, I don't, I don't think we're going to see a gigantic drop from where we are, but could easily get another 10%, 10 to 15%. But anyway, my point on all of this is, you know, just take a look at it right as you start to see these market moves. And if you look at yesterday, the market was up 500 points in the first couple of hours and then it had a pretty, I think a 500 point drop in the next. And if you look at that and you look at the correlation, you will see bitcoin was up and then it started to drop and then that triggered, and that triggered the, the other piece there.

I'm with Bob, I'm with Bob on his comment. You want to show Bob's comment?

Yeah, I agree with him too. Says the advent of pro programmatic trading has taken all the fun out of the market. But then, you know, the journalists and stuff have to have a reason for this, right? The reason is the AI Bubble. And, you know, you had Nvidia come out yesterday and go, there's no way I. Bubble. We're just, we're just getting started, you know, or Wednesday or whatever it was.

What else would they say?

Well, but it's true, right? Their numbers backed it up. Yeah, right. Their earnings number backed it up.

I, I think back to this, and with this. We were talking about this, you know, 51 minutes ago, from what I can see on the clock here, was that what we were talking about was this is the. What is a Gartner hype cycle? It's the trough of. What is it? Yeah, trough of disillusionment. I think we're going to. You can tie it to that. You can tie it to the Internet bubble and so forth. I think where we're at is a place where people are needing and it's companies like us that need to help them with this is instead of just showing me Chat GPT and I can ask chatgpt questions and get some amazing answers. What is the. What is the quantifiable value that really comes into my business without being disruptive or being risky? And so I think we, you know, whether, whether you call it a bubble, whether you call it a dip, whatever it is, I think we're going to be at this place where we're going to have to see some. And I just think about the market. Right. That we're talking about. Yeah, there's some great people that are, you know, whether it's. You're looking at some of our customers who have testimonials about how some of our tools like Genius Feed, are helping them get insights into their business, or somebody else might be helping them use AI to, you know, read a sheet of drywall that has order requirements on it. Those are great. I think what people are really seeing is we need something, though, that's broader across our place, you know, life. I mean, even the ideas of agents. Right. How many, how many people out there really, truly have agents working autonomously, Right. That are doing things for them in their life? Listen, I'm the CEO of a company that uses AI and I'm partnered with, you know, one of my dearest friends who is building these types of things. And I still don't have any true autonomous agents doing major things. I have agents or helper agents that we talk about that are saving me boatloads of times and helping me make bigger decisions. But I think that's what people are kind of looking for is where is this big shift going to happen?

Well, I Don't want to get. Look, we could go down a whole rabbit hole on that. But I just look at.

Well, it's not like we don't do that all the time, right.

Yeah, I guess. So just another day at the office.

Just another. Just another around the horn and wholesale distribution show. We go down rabbit holes.

But I look at the. Just. I'll just take it for myself. Right. The things that I am able to do with the help of AI are literally superhuman compared to what I could have done a year ago.

Oh.

And so let's say I wanted to attempt to do some of the things that I'm doing now. I would have had to hire two to three people, probably.

Yes.

To support me on that.

Okay.

So look at the productivity that is coming out of a single person. Right. And the. And the things that wouldn't even have been done because I wouldn't have hired the people. Right.

You wouldn't have undertaken the project.

Right. I wouldn't even attempted to try and do some of these superhuman.

That's a. That's a big shift for me, is I'm. I'm doing things I wouldn't have ever got to.

So I, I agree with you that the agents and the autonomous agents and all of that are still getting sorted out for sure. But some of the ways that we're just using the most fundamental. You know, and you talk about coding and all of that stuff.

Sure.

Is massively, massively different.

Yeah.

In the last year, I mean, you look at even some of the stuff that you do with the. With, you know, and so forth, you'd have to hire a consultant or you would have had to hire an accountant, 100. Hire a lawyer or whatever.

To look at the helper agent I built last night and sent. Sent to you and. And Stephanie. Client success.

Right.

You know, just the magnitude of the things that we're able to do.

So I, I think that there's. Anyway, if you. And the whole. And maybe I'll do some homework on this. But to me, comparing what is happening now versus 2000 and the Internet thing is like, just stupid. It's like it's apples and oranges. Yes. There was a bubble in 2000 and. Yes. But, you know, you had pets dot com. I mean, look at all the companies that were public or were going public that basically had no revenue and no profits and all of that. We don't have that situation right now.

Oh, we do too.

Not going public.

Not going public. Oh, yeah. Okay, good point. Yeah. But I mean, I just, you know, I Saw an announcement this morning about, you know, another company that's got large Silicon Valley funding that is coming into the, the. I mean, we should probably go out.

The adventure capital bubble. But that's not right. That's not the public markets, Right?

Correct.

Correct.

Yeah. No, I think if you differentiated that a little bit. Yeah, no, I was just, what I was going to say is we've got, you know, lots and it just makes me laugh. It's like maybe we should have sponsors on this show because there's just a flood of Silicon Valley money coming. And I said, you know, two announcements this week of, of new Silicon Valley funded startups that want to do things in the wholesale distribution market and they, they're flooding that into advertising right now. And I don't know, maybe we should rethink that. Take some of those dollars.

Yeah. Maybe we can get a $10 million contract for around the Horn. Yeah.

And get some good hosts.

That's right. Yeah. Then we could level up a bit.

Yeah. All right. Manufacturing, distribution predictions for manufacturers in 2026. Quick look at that. Some good stuff that came out of that. This is from industrytoday.com they said as manufacturers approach 2026, they'll need to balance agility with precision to overcome the many challenges including tariffs and legal issues that lie ahead. So they talk about agility related to tariffs, which we pretty much anytime we talk about tariffs and how manufacturers and distributors are managing those is agility is really key, is understanding the impact. It talks about customer expectations demand a new approach. It talks about the rapid, rapid development AI comes changes customer expectations. Man, it's almost like we've talked about this on the show too, right. Talks about manufacturers risk appearing outdated if they cannot live up to expected increased speed and quality of getting correctly configured in price quotations. Customers prospects and customers expect the ability to interact with natural language through chatter, voice interfaces. It's coming. Right. It ties back to what we were just talking about. Compliance will become thornier. Regulation is highly fraught topic in this industry and organizations doing business across different geographies. Our industries are finding themselves grappling with compliance requirements. For instance, the European Union they're working on packaging waste regulations next year and there's many others in different marketplaces. And they talk about the differentiation for people is digitalization. Digital transformation says digital transformation day driven large larger by AI shows no signs of slowing. Organizations can't afford to stay rooted in slow legacy operations and overly complex manual processes. Just makes me think about all the people that we talk to that are running not just their sales organization but their company on spreadsheets and email. Right.

So I mean to me this flies right in the face of what we just talked about.

Yes, exactly. Right, right.

Look at where the money is going right now in the quote AI world is going to the build out of the infrastructure.

But the question, I think the question about the bubble, Tom, that we, the component of that that we didn't talk about is probably more tied to the fact of, you know, is, and this is, this goes back to even the like the big data center discussions we've been having so much, many discussions about. Right. And the build out of those is if we don, it doesn't mean that there's this, anything in this article is wrong. It doesn't mean that AI isn't going to do the things that we do. But if it doesn't do it and doesn't have the wide adoption at the level that they're anticipating and expecting is then we have issues with what the spendings that's been done on the chips that have been bought and all of the things that go into that. Right. So we don't, it's the, I guess the bigger component of, and let's not call it a bubble just of an impact on the speed of where we could be and is if we don't get the adoption right and look at the market that we work in and the people we talk to every day. I was talking to a candidate yesterday for a marketing role that we have open and they were asking about our deal cycle and size and I just kind of laughed and I said we're as an enterprise software company, we have deals that take a few months and we have people that we talk to for a few months and they don't pull the trigger for a year. Right. Because it's, they're not moving quick as quickly as they can and should on this technology. So if we see that across many industries then you could see that the need for the amount of data centers, the need for the chips could slow, right?

No, so the argument is right, the we build out too fast, right. And even the depreciation on the chips and so forth, you know, they never really get used and all that kind of stuff. That all said the Google CEO yesterday, who was also ranting about a bubble a week ago said told the Google team that we have to double our capacity every two years to keep up.

With the main capacity of, of their.

Infrastructure, for their AI infrastructure to keep up with demand. So a lot of. And look, obviously every industry will be different industries that are are going to have, you know, different. The demand cycle will be different with, with different industries and so forth. But you know, the demand certainly is continuing to grow. We've really barely, to your point, touched the the surface of agents and even some of the things that they're talking about here in this article.

Right. Hey, can I can I digress for a second? Just because it's what I do. I was reading an article this morning and actually downloaded the app because I didn't even know it was available for Google. You were talking about Google for. And the reason I say this is as you're talking about Google and capacity, the quick thing that came to my mind is Gemini's use in Chrome and I think Chrome is probably the most adopted adopted browser. Right? So now it doesn't matter really if you're and I bet I would love to see based upon this discussion the how would I put that the amount of capacity that that Sundar was talking about in that setting.