Animal Spirits Podcast: "Tax the Billionaires" (EP. 446) – JAN 7, 2026

Hosts: Michael Batnick & Ben Carlson
Podcast Theme:
Exploring recent market trends, economic predictions, the AI boom, wealth taxation, social media misinformation, and the intersection of personal life with markets and pop culture.

Episode Overview

This first episode of 2026 sees Michael Batnick and Ben Carlson in wide-ranging form, reflecting on recent market performance, forecasting the year ahead, discussing AI’s market and economic impact, lampooning social media misinformation, and diving into pop culture, vacations, and lifestyle. The show’s title nods to California’s proposed tax on billionaires—a launching pad for a nuanced take on tax policy and inequality. Market data, chart analysis, and entertaining personal stories round out a fast-moving, conversational episode.

Major Discussion Points & Insights

1. Personal Catch-Up & Being Sick [01:20–06:22]

• Michael recounts a recent bout of flu post-Disney trip, tying it to market metaphors:

  “I've been above my 200 day moving average for a long time. I was due for a correction and boy did I get a correction.” (A, 01:35)

• Humorous banter about his refusal to rest, lack of sympathy from his wife Robin, and binge-watching movies while bedridden.

2. 2026 Market Predictions & Economic Outlook [06:22–23:17]

• Gallup poll: 70% of Americans expect economic difficulty in 2026—public sentiment remains skeptical.
• Ben’s “safe” baseline predictions:
  • AI bubble doesn’t pop
  • Megacap/“Mag 7” stocks do “good, not great”
  • Housing market stays frozen
  • No recession, just pushed further out
  • Interest rates are "range-bound" (4–5%)
• Michael: If forced, would bet rates come down and the housing market reopens, but no conviction.

  “I think things don't change is a pretty safe bet.” (A, 07:47)

• Both agree market risks (geopolitical, valuation) are highly visible—making them, paradoxically, less likely to be THE risks to upend markets.

Notable Quote

“The people who have been the most wrong have been the valuation bears over the past 15 years.” (B, 13:13)

3. AI’s Market Impact & Profit Margins [09:00–17:25]

• Analysis of how AI/“Mag 7” drove S&P’s doubling since 2020, despite much higher rates.
• Discussion of new metrics: profit margins and revenue per employee at record highs. Ben points out potential for further productivity driven by AI and robotics.
• Both dispute easy narratives that “valuation doesn’t matter,” arguing context (such as higher sustained profit margins) matters most.

Notable Quote

"When you just look at the valuations and you’re not looking under the hood of what comprises the index, you miss the story completely." (A, 16:18)

4. International Equities’ Surprise Outperformance [17:25–19:33]

• International stocks trounced the S&P by 14% in 2025 (“biggest outperformance...since 1993”), surprising consensus.
• Michael: European banks outperformed NASDAQ 100 over last five years—a stat he finds “insane.”
• Underlying cause: mainly valuation mean reversion, not just currency shifts.

5. ETF Mania & Year-End Flows [19:33–20:31]

• December 2025 saw record inflows to equity ETFs.
• Hosts puzzled why December, not January, saw such a spike—wonder if it relates to bonuses or seasonality.

6. Odds-Making: Market Corrections & AI Stocks [20:31–23:17]

• Ben predicts another possible 20% gain for S&P in 2026 (~75% chance), but also allows ~25% chance of 10% loss.
• Double-digit corrections are the historical norm in two-thirds of years.
• Both see high chance of 20%+ drawdown in “AI names” at some point, but wouldn’t be surprised if they finish the year positive.

Notable Back-and-Forth

A: “Will there be a 20% correction in AI names?”
B: “That’d be a way higher percentage than the overall market for sure…they still finish the year up.” (22:12–22:43)

7. Narratives: Media, Social Media & Misinformation [23:17–29:02]

• Example: Viral (but false) tweet about Denny’s and Jack in the Box closures was traced to a Bangladeshian bot.

  “How much of the negativity is literally fake. Foreign agents farm.” (A, 25:23)

• Problem with AI-generated misinformation:

  “Deep fakes...are going to be completely indistinguishable, real from fake, and people are not gonna care...” (A, 26:04)

• Hope that the abundance of AI spam will drive kids away from relying on social for “news.”

8. Consumer Spending Trends [27:24–29:02]

• Government data show people continue to spend more (including on dining and drinking away from home); behavior hasn't shifted dramatically, despite inflationary complaints.

AI, Job Impact & Tech Disruption

9. Concerns About AI & Employment [29:02–33:01]

• Op-Ed: “When AI took my job, I bought a chainsaw.”
• Ben: AI as pop culture villain is here to stay; expects a “long tail” of both real and exaggerated impacts.
• Michael: Actual aggregate tech layoffs since ChatGPT’s launch are down; most initial AI disruption fears overstated.

  "Both of these numbers are down to the right." (A, 31:27)

• Both agree that new kinds of jobs will emerge, although the transition will be “difficult for millions.”

  “Think about new industries…DoorDash, Uber… jobs that came from technology that did not exist before. How many millions of people do them?” (B, 32:30)

Fun Moments & Show Dynamics

10. Quote Inception & “Stolen” Takes [33:05–34:51]

• Lighthearted recap of Ben being accused by Michael of “stealing” his take about AI’s differentiated impact:

  “The take was so good you incepted it into my brain.” (A, 34:20)

11. Disillusionment with AI Tools [34:52–38:22]

• Michael is canceling his $200/month ChatGPT subscription, citing too many “hallucination” errors.

• Both gripe about generative AI’s penchant for factual mistakes (e.g., getting sports stats and celebrity deaths wrong).

  “ChatGPT 5.2 is still 45% hallucination…It’s basically a coin toss if it’s going to get a factual answer right.” (A, 38:22)

Autonomous Vehicles: Tech Magic & Adoption [38:22–41:49]

• Ben describes a magical family experience riding Waymo self-driving cars in Phoenix (“Everywhere. It’s like being at Disney.”), marveling at the technology and predicting mainstream adoption within a decade.

  “I don’t know how you can be bearish on humanity…the fact that we created a car that can literally pick you up and drive itself.” (B, 40:12)

Life Updates & Consumer Choices

12. Luxury Car Shopping [41:49–44:47]

• Michael’s journey test-driving a Lexus GX and Range Rover; emotional discussion about celebrating personal success.

  “I'm embarrassed…It's a douchey car…But I'm doing this for me. I love how it looks. I drove it and I felt really good.” (A, 43:07)

• He plans to lease due to reliability concerns.

13. Disney Vacation Recap [44:47–50:32]

• Michael raves about the “magical” Disney experience with his kids (memorable Peter Pan moment), and reflects on the cost, value, and lasting memories—contrasting the criticism Disney often receives online.
• Both agree Disney remains a unique business juggernaut.
• Fascinating market stat: Despite the parks’ success, Disney stock has underperformed the S&P for 30 years (!).

  “It’s a phenomenally profitable business…But that the market doesn’t value that…It’s so easy to look at something and have the wrong impression on…the investment.” (A, 48:38)

Real Estate & Housing Market [51:15–53:54]

• Chart review: Home purchases by new buyers are unaffordable; those with existing low-rate mortgages are sitting tight.
• Ben suggests only significant government intervention (e.g., teaser rates) will thaw the frozen market.

Midwest Migration & Affordability [52:30–53:54]

• WSJ article: Americans increasingly moving to the Midwest for affordability—not just due to poor local economies, but also rising wages.

Taxing Billionaires: California’s Proposal [53:54–55:58]

• New York Times story: California proposes a retroactive wealth tax on billionaires—potential $1B+ per person.
• Michael critiques the proposal: such taxes are ineffective in practice because capital migrates.

  “It’s so stupid. First of all…the problem…the healthcare system is the problem.” (A, 55:37)

Streaming Wars & Pop Culture [55:58–58:48]

• Update on viewing trends: Longtime TV franchises (“NCIS”, “Grey’s Anatomy”) dominate streaming by minutes watched.
• Netflix still crushes rivals; discussion of Disney+’s challenge in growing viewing share.
• Riff on “Avatar” as the NCIS of movies—hugely popular but absent from cultural conversation.

Movie Recommendations & Lighthearted Stories [58:48–74:56]

• Michael’s in-bed flu movie marathon: includes “Train Dreams” (meh), “I Like Me” (John Candy doc), “Bonia”, “Influencers”, “Roofman”, “What Doesn’t Kill You”, “Sisu” (hard recommend for action fans), “Love Story” (1970).
• Ben’s recs:
  • “Good Fortune” (Aziz Ansari/Seth Rogen/Keanu Reeves)
  • “The Life of Chuck” (“creative…not a Michael movie”),
  • “Zootopia 2” (kids loved it).
• Notable segment: Michael raves about “Killer Joe” (2012, NC-17, Matthew McConaughey); warns about a notorious scene—“top five worst scene to walk in on, ever!” (A, 73:03)
• Lighthearted stories: Ben recounts being attacked by a cactus during an Arizona hike.

Notable Quotes & Moments (by Timestamp)

• On the value of health:

  “You don't understand how important being healthy is until you're unhealthy.” (B, 06:08)

• On AI bubble predictions:

  “I Love that the market is rejecting the bubble. For now.” (A, 12:59)

• On misinformation:

  “Deep fake stuff...is going to be completely indistinguishable...and people are not gonna care that it's [fake].” (A, 26:04)

• On Disney as a business vs. investment:

  "If Disney isn’t making money, this is an absolutely iconic global brand. What has stronger resonance?" (A, 49:14)

• On celebrating personal success:

  “I'm doing this for me…very proud of what I’ve been able to accomplish professionally.” (A, 44:02)

• On automated vehicles and optimism:

  "I don’t know how you can be bearish on humanity…the fact that we created a car that can literally pick you up and drive itself." (B, 40:12)

Key Segments & Timestamps

| Segment | Topic | Timestamp (MM:SS) | |----|---|---| | Personal Life, Sickness, Disney | 01:20–06:22 | | Market/Economic Predictions | 06:22–23:17 | | AI and Market Dynamics | 09:00–17:25 | | International Markets | 17:25–19:33 | | ETF Flows | 19:33–20:31 | | Corrections and Odds-Making | 20:31–23:17 | | Social Media & Misinformation | 23:17–29:02 | | AI & Employment | 29:02–33:01 | | AI Takes & Tech Cynicism | 33:05–38:22 | | Autonomous Vehicles | 38:22–41:49 | | Luxury Car Shopping | 41:49–44:47 | | Disney Memories & Stock | 44:47–50:32 | | Housing Market & Midwest | 51:15–53:54 | | Billionaire Taxes | 53:54–55:58 | | Streaming & Pop Culture | 55:58–58:48 | | Movie Recommendations | 58:48–74:56 |

Episode Tone & Style

Casual, irreverent, and fast-paced, the episode combines market expertise with pop culture, sarcastic banter, and honest introspection. Michael and Ben aren’t shy about revisiting their own past predictions, poking holes in consensus, or spotlighting their own life moments—making this episode a quintessential entry in the Animal Spirits catalog, ideal for listeners seeking both actionable context and relatable entertainment as 2026 begins.

Contact:
Questions/comments: animalspirits@thecompoundnews.com
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