The Liquidity Event Podcast: Episode 91

 

Episode 91: Speed Dating the Banking Meltdown

Welcome to the Liquidity Event Podcast, where we cover the latest and craziest finance headlines. From Apple's AI-powered health coaching to a $3.4 billion crypto heist, we've got you covered. Join us as we discuss why more female executives don't play golf, the EPA's new rules for electric vehicles, to SeatGeek’s confidential S-1 filing. Plus, we'll share our thoughts on EY's plans to cut jobs and 3M's ongoing struggles.

Read the Full Transcript:

Presenter:

This podcast is for informational purposes only and should not be considered tax or investment advice. Welcome to the Liquidity Event, a show about all things personal finance with a laser focus on equity compensation hosted by AJ and Shane of Brooklyn Fi. Each episode will take you through the week's news on FinTech, IPOs, SPACs founder wins and fails crypto, and whatever else these nerds think is interesting. Learn more and subscribe today at brooklynfi.com.

Shane:

Hello, hello, hello and welcome to Episode 91, the Liquidity Event. We are your hosts, Shane Mason.

John:

And John Owens, [inaudible 00:00:42] for AJ Ayers this week.

Shane:

That's right, baby. We've got the director of financial planning at Brooklyn Fi. The men in the hot seat. Welcome back, John.

John:

Glad to be here, Shane, you're outside right now. I want to point that out. This is not a fake background.

Shane:

Ah, yes. For those of you watching the YouTube stream of this and not listening, of which there are thousands of you.

John:

Millions probably.

Shane:

Millions probably. You're going to see my background and no, it's not AI generated, I'm traveling. It's the summer conference travel season, we're post-tax season. I'll be bouncing around a lot. AJ's in Japan right now, that's why John's here. So it's going to be exciting summer, a lot of time to listen to podcasts. Time to record them, a little bit harder to find. So also, while my audio is a little subpar, we're recording on April 26th, 2023. This will be airing on April 28th, 2023. What we've got for you today is we've got a lot of updates in Apple's land.

The flywheel on rich people apparently is deeper than we thought. We got a lot of bank stuff, a lot of FTT, a lot of FTX, a lot of First Republic Bank, a lot of that. We're going to get into layoffs [inaudible 00:01:47]. We might touch on Johnson & Johnson's IPO, we'll probably save that for next week. And then we got a lot of AI updates of course, because it's 2023 and you have to hear about AI every 16 seconds, okay? So getting into it, John, how are you personally? You just went through tax season as a financial planner. What did you have, 200 clients this year? How you doing?

John:

Yeah, I had quite a few clients to take through tax season, but I'm doing all right. I don't know, Shane, you've had more tax seasons [inaudible 00:02:11]. We've both been through several tax seasons. Do you feel the post-tax season depression? And the best thing I can relate it to is as a runner, I'll run a race, I'll run a half marathon, I've run a marathon, I've run several halves and afterwards you kind of come down off this high and if you feel a little funky for a few days, and I feel the same way after tax season, I think it's because the last couple weeks of tax season, you get this adrenaline rush that powers you through and you have long days and you just muscle through it and then you're coming back down to reality. So I go to the beach to resolve my tax season depression. That's what I did last weekend and it really helped. But yeah, how are you doing? Do you feel something like that or is it just me?

Shane:

I get it every year, buddy. You got it, nail in the head. Exact same thing. There's this big buildup. You're no longer, also, your friends talk about you a lot. They're like, "Where is he?" And you're like, "Oh, he's got tax season going on." So you're just a topic of conversation. You're the man of the month or whatever.

John:

That's usually.

Shane:

Some people call it tax week. So I heard Planet Money. I love when they do that-

John:

Tax week, give me a break.

Shane:

... they come on April 10th and they're like, "Well, it is tax week people. So we got this podcast all about tax evasion for poor people" and you're like, "Y'all it's like a three month situation here", at least for the professionals. But yeah, there is that, the date comes and goes and then you just feel like, you want it to be over with for months and then it is over with and you're like, "Huh, well I guess it's just not as exciting." It's like prom, you know? It's exactly like prom, John. That's the best analogy I could come up with at 36 years old as of Wednesday, I am-

John:

Happy belated birthday, by the way.

Shane:

... true. Yes, yes. I was born on April 19th, so right after tax season so apparently I was born to tax baby in [inaudible 00:03:57].

John:

Let me be the first to tell you. Don't look at day past 40, Shane, before we jump in here. You don't look a day past 40.

Shane:

Well good. I got four years of capacity to grow into here. Okay. All right. So we've got some, we're going to start with some fun articles this week. We have a lot of articles. So your boy's going to do a little rapid fire this week, just like get a tit for tat. We did take last week off because it was the tax deadline. We did our AI piece. So we're going to end on AI since our audience has already heard enough about that. So right off the rip John, super important to our listeners. Apparently chartreuse quality and quantity has come down because the monks over in Europe don't feel like they give a shit anymore. Your thoughts? Okay. No. So here's the deal.

John:

Can you explain this to me and a reason why I might care?

Shane:

Yes, yes, yes, yes. So sorry, listeners know the way that we get articles is that anyone at Brooklyn Fi can throw an article into the podcast channel and if they want to hear about it, it gets talked about it okay? So it turns out that the monks that create green chartreuse, which is really important for some certain cocktails, they just don't give a damn about producing it anymore. They say it's getting into the way of their studies. So they've just cut down on production 'cause they have enough damn money to run their monastery over in the French Alps.

So the only reason this article is in here, and we left it in here, is because the last word, as a former cocktail bartender, if you're into cocktails, you need to make yourself The Last Word, okay? That's the best cocktail from the 1800s that they revived in the 1950s. All right, moving on. So we have another article here from AJ surprisingly enough about why female executives don't play golf and why that's a problem. John, do you think there's a problem for female executives that are not playing golf? What do you think?

John:

Well, I mean, I think there's this whole factor of inclusivity, right? And golf has become a sport that was tradition, has become... was a sport that was traditionally dominated by what, white working men for the most part. But I feel like more and more women are playing golf and I think that's great, right? Because I feel like that was potentially part of the glass ceiling that we saw of, oh, well the men are going to go play golf and I'm assuming it's more of a historical issue. But you had a chance to dig into this one a little bit more. And AJ, AJ on our team plays golf, right? Kind of sticking with the financing. I don't play golf. Do you play golf? How do you remember?

Shane:

My dad, I was fortunate enough, he tried to get me to learn, so I've got like a natural, I have all the fundamentals of it. I've got like a sportsman's... Yeah, I can play golf. I'll be playing golf tomorrow, actually, weird enough.

John:

Okay.

Shane:

This is like a golf... I just rode here from a guy that played golf since he was in high school being obsessed with, he flew his golf clubs here from Colorado to Arizona. I'm not that type of person. I don't own clubs or anything. But yeah, interesting take. So I guess the takeaway is that if they spent more time networking on the golf course, they could come up, they could build their careers because you have that five hours of one-on-one time with other professionals that are, have less of a heterogeneous, you're meeting new people and getting to know them really well, which should help with business. Yeah, it's a hobby. I don't know. Hot take, having kids is a hobby. Oh, they also mentioned that women are usually the caretakers, and that's the downside of being a woman. If you're the only one taking care of all the burden of raising the family, you just don't have five hours on a Saturday to go off playing golf.

John:

Playing golf, yeah.

Shane:

[inaudible 00:07:23]. Yeah.

John:

I don't know, I feel like we're, as a society, we're moving forward, becoming more progressive and I think family dynamics are changing and we're seeing the stay at home dad and the woman executive who does play golf and the husband who doesn't and those sorts of things and I mean, I think that's good, right? More inclusivity, more changes here. But yeah, I do think... I don't know if I love the whole headline of why more women executives don't play golf and why that's a problem. Why don't we talk about all the great things that women executives are doing and why we're stuck in our kind of old school mentality of you need to play golf to be successful. That sort of thing. I don't know.

Shane:

Great headline from The Wall Street Journal if you want to get clicks, which we did. So speaking of clicks, Apple's a computer company, you click on it a lot. Apple plans on an AI-powered health coaching service, the mood tracker and iPad have a new health app. Got an article here from Bloomberg on Apple expanding its flywheel into getting deeper into fitness and healthcare. Your thoughts?

John:

Well, yeah. And then we got another article coming up here on banking and Apple wants to be involved in everything. And I think, Shane, I go back and forth with this, I've mixed feelings. I have a Garmin watch, it's right here, it's not, not wearing it right now. I wear it all the time though and I use it to track my workouts. I don't wear it all the time, not wearing it right now, but I use to track my workouts. I use it to track my exercise, do all that sort of thing. It doesn't give me a ton of health insights.

I feel like the Apple products do a little bit more, but balance between being healthier, using tech to do that and how much information... Take your pick, Apple, Google, whoever it might be, have about us and our privacy and does privacy really exist anymore with all this? Because Apple knows when you get up, when you go to bed, how much money you have in your bank account here potentially soon, and all these other health facts and does that make us healthier and how do they use that data? I'm always a little bit suss. What about you?

Shane:

Yeah, well, I mean it's kind of, my thoughts on this when I first read that these two articles about two different sectors that they're getting into, they're also getting into buy now, pay later. So we've got lending or we've got savings accounts here and now we've got fitness data, mood tracking and sleep tracking and subscriptions around fitness and it's like, and healthcare, essentially it's going to be tracking our mood. Apparently their intent is for our ability to input how we're feeling during the day so that we can keep track of things that are impacting our emotional health.

John:

Okay.

Shane:

So we're kind of getting into mental health here as well with-

John:

Yeah.

Shane:

... and it's like, wow, they're really, really expanding the flywheel. I mean, who has a lot of cash? Who can afford mental health? Who can afford hardware? Like the most expensive hardware in the world, and it's like Apple's doubling down on the one billion richest people on the planet that can afford an iPhone-

John:

Yeah.

Shane:

... and all those other devices and I was just thinking, why are they going into these big spaces? And you have to wonder a company of this size, where... What additional sectors are they going to target? And they're going to be sectors that are fat, right? Sectors that have a lot of margin that don't have a ton of competition, aka healthcare and banking, especially post banking meltdown that we're seeing here where we have all these-

John:

Yeah.

Shane:

... regional people getting deleted and there's just one four big contenders that are globally important. And it's because they're... I had to look at their market cap too, John and I did some research and apparently their market cap's around 2.7 billion or trillion of course and I had to wonder how big are they compared to the entire US S&P market cap? And it's like, it's around 40 trillion so you're looking at a company that's about 10% of the public value.

John:

Yeah.

Shane:

So to go from 10% to say 15% of... They have to eat giant other companies that are making up 5% of the market cap of the US stock market, et cetera so they have to look at banking, they have to look at, they're not going to get into tiny sectors that don't have the scale, like a company this size needs to deploy things at scale.

John:

They need deploy the scale to the customers that they have already, to the clientele that they've already got in their pocket. And it's like, great, you're on your iPhone, you can open up a bank account and we can now track your mood. And damn it, I don't need an app to tell me what my mood is, but no, I know that I'm intolerant at times. But think about other companies that have done this in the past. You think about Proctor & Gamble, you think about General Electric, right? Used to be these companies that do everything, they're in every sector and they become these big behemoths.

Shane:

Conglomerates, yeah.

John:

And it happens. And then they, and then think they get in trouble and then they realize that they're not experts in everything and that they've gone into the wrong space and it hurts them. And so I think there's this balancing act between you're already a $2.7 trillion company, that's what their market cap is. You just need to grow, but you've got some stuff you do really well. And then I also think about the whole antitrust piece of it, and that Apple needs to be in every single thing as we get bigger and bigger.

And so I'm not saying this is a good thing or a bad thing. I mean, I think I'm concerned more so about Apple getting into the banking space with the high yield savings account here, the 4.15% they're offering, because I worry about they're taking money out of smaller banks, causing more consolidation in the banking space. Everything becoming too big to fail and what that all means. And I think one of the articles I read, I think Goldman does the Apple credit card and I think they're going to do this, and their Marcus product doesn't pay as much as the Apple thing. So they're fighting, they're competing with themselves, and a bunch of money's probably going to leave Marcus and flow into this. And so it's almost like cannibalization going on. And I think it'll also be not only the smaller banks that are impacted, but some of the bigger banks 'cause Apple has that brand loyalty and that brand awareness as well.

Shane:

Yeah, I think the way it works is that you have to have a Apple credit card, which is I think being handled by Visa, Mastercard, and then Goldman is handling the actual savings element of it-

John:

Yeah.

Shane:

... via Marcus so yeah, even my niece texted me about this. It's getting around social media. I think teenagers love Apple. I think it's one of the first aspirational brands that they encounter when it comes to differentiating themselves socioeconomically from their peers in middle-

John:

Yeah.

Shane:

... school and high school. It's like...

John:

You don't really get jazzed as a teenager about Delta.

Shane:

Yeah, exactly. You want to wear Abercrombie or whatever it is that separates you, like Polo, like the clothing and then devices, your textbooks in your uniform. I don't know. So I think Apple is one of those companies that lets people differentiate themselves. It's the first bit of conspicuous consumption and then you get into the vehicles that you get junior, senior year and all that fun stuff. So yeah, I think Apple's going to pick up a lot of market share from kids as well.

John:

Yeah.

Shane:

[inaudible 00:14:22].

John:

But you can't have an Apple credit card if you're a kid, right? So that's going to limit the people who-

Shane:

Not a teenager.

John:

... who could, as a teenager, yeah. So that might limit the folks who would be eligible for this.

Shane:

But the cost to acquire an Apple, it might, at 18 years old, be showing that sweet spot where you want as much Apple stuff as you can to display to other people. You're not going to get an Amex Black Card as an 18 year old, but the cost to acquire an Apple credit card is $0-

John:

Yeah.

Shane:

... right? Just like the soft credit check so I would not be surprised if it's a super popular product for 18, 19 year olds.

John:

And they're the people who pay with their phone for everything too, which I don't, you know what I mean? But the younger folks pay for everything with their phone now.

Shane:

Yep, yep. If you're 19, are you more just jacked about walking into a Chase bank or signing up on the iPhone that you already... that you've had since you were 13 years old for the credit card on the savings account? And speaking of the savings account, we got to talk about the impact it'll have on the deposits beta aka how much the savings rates will be impacted by the Fed fund's target rate. Notoriously Chase Bank and other big banks do not increase the savings rate you get when the Fed raises interest rates until much later. I think this will have a large impact on the speed at which most banks only raise their savings rates when they have to, to keep-

John:

Yeah.

Shane:

... customers from fleeing to other high-paying savings accounts. Customers are quite sticky when it comes to opening savings accounts. It's very hard. It's very annoying to open up a checking account, savings account. So they just tend to be like, "Ah, what's the difference? It's only paying 2% anyway. I don't care." But I think that this will, I think it'll have an impact. I think we're going to see some more competition and savings rates move faster when the Fed changes them due to this new contender. What do you think?

John:

Absolutely. I think that will help, right and I don't think you want to see those outflows, but the other thing is the big banks, the Wells Fargo, the Chases of the world, the Bank of Americas saw huge inflows last month with Silicon Valley Bank failing with the First Republic scare that we're going to talk about here in a second. And they can afford to lose billions and billions of dollars in deposits and still be fine because they had a ridiculous amount of inflows over the last few months that they weren't anticipating. The interesting thing is that they're not going to be losing those deposits to smaller banks, they're going to be losing them potentially to the Apple savings account here. But anything that actually helps people who have conservative assets get a better yield on them and a better interest rate on these safe deposits, not safe deposit boxes, but your safer deposits in cash in the bank, is a good thing, right? Because it hasn't paid squat for the last 15 years to have cash in the bank.

Shane:

Yeah, speaking of squat banks, First Republic has lost 95% of its market value over the past year. Your thoughts?

John:

Yeah. I mean, First Republic has been impacted by Silicon Valley Bank and so the latest headline earlier today, and by the time this airs on Friday, who knows where First Republic will be. They dropped 50% yesterday, they dropped another 20% as of this recording here on Wednesday, who knows where it'll land. They're going to cut 20, 25% of their workforce. They saw, was it a $100 billion in outflows? But now we're at a point where bankers are pitching, I think, with some coaxing from the Federal government, other banks to continue to step in to prop up First Republic and one of the strategies will go like this. They want these other banks to purchase bonds from First Republic at above market prices and take a loss on them because it'll be cheaper for the bigger banks to do that. And to take maybe a billion dollar loss, a $2 billion loss across a bunch of these bigger banks than it will be for them to pay $30 billion in FDIC fees to reimburse the deposit fund if First Republic actually fails.

And so it's kind of... I got a degree in economics, game theory, imagining all the super, what is it all? I'm Superman. No, I'm Superman, or I'm Spider, whatever it is. That meme, they're all pointing at each other, like who's the right one? And it's this question of like who's going to give up on First Republic first? Is somebody going to come in and be like, you know what? I'm done, we're not billing you out anymore. This is your problem. But thinking about it, if you're a bank and you've got these shareholders that you're responsible to, well, it's like, hey, I'm Chase. This is going to cost me $15 billion to reimburse the deposit insurance fund, or it's going to cost me $2 billion to mark down these bonds immediately after I buy them.

The thing is this, when does the chaos stop? And when do they cut their losses, right? At some point, this is, they've already deposited $30 billion in the First Republic. Okay, now they're going to buy potentially premium priced bonds and then what is it, a month from now, if the run on deposits continues and with where the stock price is? And so First Republic's balance sheet remains impaired. When you mark to market, it doesn't look good and so, yeah, I don't know what's going to happen here, but it's not a great time for them, that's for sure.

Shane:

Yeah. I'm imagining First Republic on its back bloodied and bruised, holding a grenade and the pin, it's like, if I'm going out, you boys are coming with me.

John:

Yeah, and the issue's contagion. What happens next? If First Republic does fail, where they'll get acquired by somebody, but then that's more consolidation and then who is next? Who has the next dirtiest balance sheet 'cause that's just where the people are going to look to next and so what they're trying to stem off, is that, right? And I'm sure there are other banks that have really good looking balance sheets out there.

Shane:

Cool. A couple rapid fire articles we have here. FTX's FTT token apparently has surged 70% after lawyers say the exchange could restart. I'm not wasting time on this article.

John:

Are you kidding me? Are you kidding me? The exchange is going to reopen and people are going to trade on it. Are you joking?

Shane:

Do not. Stay away. Twitter Inc has changed its name to X Corp and has moved to Nevada. Okay.

John:

Good for you, Elon. Congratulations.

Shane:

Yeah, that's right. We can't spend too much time on these silly, this silliness. EPA lays out rules to turbocharge sales of electric cars and trucks.

John:

You read this-

Shane:

I'm not trying to hear anything about.

John:

... what's this all about? What's going on here? 'Cause you're talking about power lines crisscrossing the prairie farmland and I don't know where you stand on this.

Shane:

Yeah, no, I mean I'm all for obviously greening up the American grid, and I think that it's one of the most American things that we can do is go independent from foreign Russia and OPEC on energy but if you really know the issue, if you really drill down into the biggest issue with greening our grid, the most difficult thing is redistribution of electricity because you can't put electricity into, the problem is batteries.

John:

Yeah, you can't store electricity. Not easily.

Shane:

You can put oil on the back of a tanker and take it out to the middle of Arizona and it can sit there for a year and a half until a car pulls up. If you really want to green our grid, you have to build all these power lines across private land to distribute the electricity. So if we're not... We're going to get a bunch of nimbyism from farmers that don't want, and all types of people that don't want the grid crisscrossing through their property lines. And until we see that happen, we're fucked when it comes to re-greening our grid so that's all I'm trying to say there. SEC Labels, Algorand and five other tokens of securities and a Bittrex lawsuit. I don't care. Do I know on that?

John:

I don't know what any of that means.

Shane:

Yeah, crypto stuff. Who's putting this crypto stuff in here? The US cracked a... Actually, I do have a fun crypto thing here. The US cracked a three and a half billion dollar crypto heist and Bitcoin's anonymity is not quite anonymous as we thought that it was.

John:

Really? On the blockchain. Who would've thought.

Shane:

Did you read this article? It's amazing. This guy was like 22 and he deposited some money into Open Seat. Wait, what was, the Silk Road before it was shut down?

John:

Oh, okay, yeah.

Shane:

So he put some money in, double clicks the withdrawal button and twice as much money comes out. So he does that about-

John:

Oh my goodness.

Shane:

... it's that simple and he does it like enough times to get enough. He got like $600,000 worth of Bitcoin 10 years ago, and then now it was worth three and a half billion. Chain Analysis company comes along and the FBI, like it turns out, we all thought Bitcoin, one of the use cases that it would provide anonymity. It turns out it's the exact fucking opposite. Everything is recorded forever on the blockchain so-

John:

Yeah.

Shane:

... Chain Analysis says that if there's one thing that blockchain does well, it preserves evidence of crimes forever. Forever.

John:

Yeah. Forever.

Shane:

Forever. So this dude had $3.3 billion worth of crypto in a Cheetos canister in his house when they knocked on his door and served him a warrant, he was [inaudible 00:23:11].

John:

Put it in a cold storage, basically on a thumb drive and shoved it in a Cheetos can?

Shane:

Kept in his house. Kept it in his house. Dude, if I had $3 billion in a key on a microchip, you think it would be in my fucking house?

John:

Do you think you'd be sitting in the United States or do you think you'd be in some country with an extradition, with no extradition-

Shane:

God.

John:

... treaty, right?

Shane:

I'm out of here. Out of here.

John:

I mean...

Shane:

So anyway, everything's recorded on the blockchain. It's like robbing a bank in the snow, they just follow your ass out into the woods. Sorry everybody, that it was. Moving on. We have a blog post about this next article, actually. SeatGeek has filed confidentially for IPO, so this is cool. SeatGeek is a ticketing company. They have filed confidentially, I had to look this up actually. You would think we would know what filing confidentially means, but apparently it just means that they've filed with the SEC and they just didn't tell anyone and someone has leaked that to the information. So the information is-

John:

I feel like we always find out when somebody files confidentially.

Shane:

Yeah, Airbnb did it. Uber and Lyft, Slack did it. It's like pretty common. It gives people the ability to put stuff in front of the SEC but not disclose things to competitors so it is a good sign for the IPO market that we might, we're getting some confidential S1s for some big tech companies. This is a unicorn as of their series E funding round, about eight months ago, valued them almost exactly at a billion dollars. So technically a unicorn. So big ops to SeatGeek, and I hope their employees and shareholders get an opportunity to see a liquidity event in an unfrozen IPO market later this year.

John:

And they're coming after Ticketmaster and stuff like that. Maybe the Swifties will be big proponents of SeatGeek right after the whole Ticketmaster fiasco for the, was it the Eras tour? Whatever the new tour is for Taylor. I'm not a big, I'm a Swifty like AJ.

Shane:

Yeah, I've traded a Swifty out for... Definitely not a Swifty here.

John:

Yeah, yeah. I'm more of Ska guy. Did you see that post they sent the other day? It's not a spa day, it's a Ska day. Here's your trumpet. Let's go.

Shane:

Here's your trumpet. Let's go. I'm always...

John:

[inaudible 00:25:20] original Ska day.

Shane:

As a big Sublime head. I'm always down for a Ska day. So we have this article here about how baby boomers are actually more narcissistic than millennials.

John:

There wasn't a lot of meat on the bone here.

Shane:

[inaudible 00:25:34].

John:

Well, it made me sound like more sensitive than millennials, and this made sense to me because I haven't gotten into many shouting matches in my life, but I've gotten into more shouting matches with baby boomers than I ever have with millennials or have been, yeah, I feel like they're more temperamental and they're more sensitive. I don't know. That's my gut. What do you think?

Shane:

Ah, long time listener.

John:

I don't want to alienate our baby boomer listeners, by the way. They're all lovely.

Shane:

The baby boomers that we work with and hang out with are not the ones that I'm going to be complaining about and long-term listeners of the podcast will know. We listen to like... I like to hang out with self-aware. And by the way, painting a broad stroke against a whole generation is insane but-

John:

Yeah.

Shane:

... yeah, I mean, the article's about how people respond to, I think that they rated people for stubbornness and defensiveness and certain other aspects of narcissism across a generation, and they just discovered, they found there was a small difference between maybe of that generation and millennials.

John:

Makes sense.

Shane:

And yeah, I mean, we could all, we all change as a generation as well. We could develop those traits here in about 20 years so we'll see.

John:

Here we go. Can't wait.

Shane:

Here you will see. All right. We got layoffs in the news again. We got to keep our listeners up to date on both finance and tech and just general layoffs. So we have, EY is cutting, and it's Ernst and Young for those of you who don't know, which is a big, one of the big four firms that work in the consulting and the audit, tax, and advisory space, they had a big plan to cut their company in half and create a really cool, that's the one of the first or the big four to try to do this where they would split out the consulting arm from the audit arm. And that's really good for independence because the auditors always sold consulting to their own clients, and it was like a big conflict of interest, but apparently it failed. And almost immediately after it failed, they've decided to lay off 3000 people. John, your thoughts?

John:

Yeah, 5% of the US workforce, they're going to let go. I'm struggling with the juxtaposition here. All we've heard for the last what, few years is that there are not enough accountants. There's not enough accountants. We've got a shortage Now it's we have too many, we're going to kick them on out. And so it's like you have the accounting field where it's been played by long hours, it's stressful, 150 credits to become a CPA, all this other stuff, these barriers to entry. You work these people to the bone and then you kick them in the teeth and lay them off? So thought it was kind of an interesting move on their part but yeah, it's certainly not surprising. I think those accountants that they want to stay in accounting will probably, those 3000 accountants will likely be employed very quickly should they want to be.

Shane:

Right on. Right on. Cool. So yeah, Johnson & Johnson we will be talking about next week. 3M is also laying off 6,000 people in California struggling to meet its tax. It's tax treasuries are being depleted thanks to the tech layoffs, makes a large proportion of California's economy. It's cutting into their tax revenue. So Mr. Gavin Newsom's going to have to navigate that.

John:

They also have the issue of the fact that the Disaster Declaration has pushed out the payment deadline for many people. So they're not getting the tax revenues that they thought they'd be getting in California either.

Shane:

Let me eliminate 30% of our clients. It rained really hard.

John:

Okay. All right. On that note, that's liquidityevent@brooklynfi.com if you have feedback on that comment.

Shane:

Yeah, no, I was actually there for that and it did rain super hard [inaudible 00:29:17].

John:

Oh was it was crazy.

Shane:

[inaudible 00:29:18]. Yeah. Yeah. All right, I have a 45 second ChatGPT update and then we're going to have to call it for today. Apparently ChatGPT has passed the bar exam and has passed the law exam but it cannot pass an accounting class. It got a 47% after being fed 27,000 pieces of data about accounting. So it's not good at math, y'all. So that means that accountants will be relevant for at least another two months.

John:

I also got a 47% in accounting class, so-

Shane:

There he is.

John:

... we got that in common.

Shane:

You're not supposed to tell our clients that, John, we had an agreement. Apparently. ChatGPT can also decode federal speak and it could predict stock moves from headlines. It was fed a bunch of 2013 or 14 details from public Fed meetings and it accurately predicted movements of Federal Reserve basis point adjustments. So that's not scary at all. All right, I think that's all we've got on ChatGPT this week. This has been Episode 91 of the Liquidity Event. Big shout out to Mr. John Owens, our director of financial planning, our outstanding guest-host today. Thank you John.

John:

Glad to be here, Shane. Enjoy your time in the sunshine.

Shane:

All right, we will see you guys next week. Thanks for listening.

Presenter:

Thanks for listening to the Liquidity Event, hosted by AJ and Shane of Brooklyn Fi. Head on over to brooklynfi.com where you can subscribe to the podcast or YouTube channel, or if you want to learn about their full service, financial planning, tax, and investment firm specializing in tech professionals and creatives on the path to financial independence. We'll see you next time on the Liquidity Event.