Animal Spirits Podcast – The Age of Discontentment (EP. 441)

Date: December 3, 2025
Hosts: Michael Batnick & Ben Carlson
Podcast by: The Compound

Episode Overview

This episode dives into the paradox of widespread discontent despite rising wealth in America—and globally. Michael and Ben dissect why people feel the economy “isn’t working for them” amid robust investment returns, prosperous stock and bond markets, and an ever-growing upper middle class. Beyond market commentary, they explore societal perception shifts, generational changes in expectations, challenges in housing affordability, crypto volatility, and how technology (from Robinhood to AI to Netflix) continues changing the economic and social fabric.

Main Discussion Points & Insights

1. Market Recap: Healthy Corrections and ‘Plain Vanilla’ Investing

• Stock/Bond Performance:
  • As of early December, S&P 500 is up ~17% YTD with only a 1% drawdown.
  • Developed international stocks (IFA) +30%.
  • Aggregate bond market up ~7–10%.
• Healthy Corrections:
  • “Every time we get a 5% correction, people are going to think, this is it, this is the crash.” (Ben, 03:14)
  • Michael: The recent overreactions are not unwarranted due to legitimate economic concerns (AI, hyperscaler spending, Nvidia, etc.).
• Revenge of Boring Portfolios:
  • “If you just had this boring three-fund Vanguard portfolio of U.S., international, bonds—you’re having a fantastic year.” (Ben, 05:23)

2. Strategist Forecasts & Financial Asset Valuations

• Wall Street Price Targets:
  • Analysts predicting continued gains (4–17% range), but Ben suggests a strategist could stand out by predicting a down year (06:10).
• ‘Everything Is Overvalued’ Myth:
  • Referencing Jeff Gundlach and Robert Shiller’s warnings, both hosts argue it’s nearly impossible for “everything” to be overvalued at once due to capital flows.
  • “I don’t think it’s possible for every financial asset to be overvalued simultaneously.” (Ben, 08:19)
  • Michael notes that stimulus-fueled wealth, post-COVID, may lead to most asset classes feeling expensive, inflating perceptions of inequality (09:10).

3. The Age of Discontentment: Wealth, Inequality, and “Bad Vibes”

• Too Many Rich People?
  • Michael’s provocative take: “Maybe the root of the problem is there are too many people with too much money…what’s causing the consternation is there’s too many people with too much money.” (Michael, 09:53)
  • Examples include high-end watches, trading cards, and stocks—all inflated due to this “too much money” effect.
• Comparative Wealth and Social Media:
  • Ben: "It's one of the trappings of wealth. Everyone is wealthier, but when you see other people wealthier, it’s really hard." (11:58)
  • The feeling of being left behind is amplified by social media and shifting expectations: “When you see rich people on social media telling middle-class people that they are actually poor…” (Ben, 12:17)
• Historical Perspective:
  • The hosts share stories from their own families about rising expectations—kids' activities, vacations, holiday gifts—as proxies for societal progress and higher baselines. (Ben, 25:26; Michael, 26:50)
• The ‘K-Shaped’ Economy and Persistent Discontent:
  • Even as median and average incomes rise, outliers (the ultra-rich getting richer) amplify the perception of a zero-sum game, making relative deprivation more acute (Michael, 24:22).

Notable Quote

“Some of it is legitimate affordability issues. Health care, education and housing do cost much more, even if they are much higher quality than they used to be.”
— Michael, quoting Allison Schrager, 25:04

4. Investor Behavior & Technology Changes

• Mutual Fund vs. ETF Ownership:
  • Despite the hype, mutual funds still far outnumber ETFs (54% vs 15% of Americans) due to inertia and 401k structures. (Ben, 15:14)
• Robinhood & Platform Interface Psychology:
  • Robinhood remains the stickiest platform for active users, but competitors are catching up.
  • “I think I look at the market 474 times a day.” (Michael, 17:35)
  • Ben notes moving to Schwab means he checks his portfolio less, acknowledging how UI design affects investor psychology (18:49).
• Rise of Young Investors:
  • More teens and young adults are investing—helped by zero commission trading and smartphone apps (21:44).
  • Story of a young woman investing to improve her family’s fortunes, learning from her immigrant parents’ struggles (22:07).

5. Housing Affordability Crisis & Societal Impacts

• Housing’s Role in Risk Appetite:
  • A new study shows young adults without realistic prospects of homeownership demonstrate “reduced work effort and increased risky asset investments” (Ben, 41:50).
  • Even so, forgoing a house means bigger brokerage balances, just not the psychic benefit of owning a home (Ben, 42:59).
• International Perspective:
  • Housing affordability is even worse in London, Australia, and parts of Europe, where house price/income ratios are way higher than in the U.S. (Ben, 43:12).

Additional Key Segments

6. AI & Economic Boons

• AI Revenue Acceleration:
  • AI revenues up 9x in two years (from $7B to $60B); could reach $650B by 2029 if the pace continues (Ben, 34:02).
• Construction Boom Linked to Data Centers:
  • Trades like electricians and project managers see 25–30% wage inflation due to demand from data center construction (Ben, 35:04).
• Education Concerns & AI Tutoring:
  • Global test scores, especially mathematics, are plummeting, exacerbated by COVID—but Ben believes AI tutors will soon reverse this (Ben, 28:17).

7. Crypto Update

• Bitcoin and Strategy:
  • Despite volatility, Ben is incrementally buying crypto: “Every time it crashes, it comes back.” (37:09)
  • $6B was pulled from global crypto funds in November, the worst month ever (37:11).
  • On Michael Saylor's strategy: “If this is not the local bottom for [the company], holy cow, this company is in so much trouble.” (Michael, 39:50)
  • Discussing conspiracy theories: quantum computing as a risk to Bitcoin (Ben, 38:19).

8. Streaming, Media, and the Future of Content

• Legacy Media’s Decline:
  • Cable/broadcast TV’s share of viewing fell from 58% to 42% in 18 months (Michael, 53:49).
• Netflix, YouTube Premium, Consolidation:
  • Netflix leads in net income against peers hemorrhaging money (Michael, 52:57).
  • YouTube Premium has 125M subscribers @ $14/mo = $21B annual revenue (Michael, 51:14).
  • Anxiety over Netflix potentially buying Warner Bros and the future role of theaters.

Highly Notable Quotes & Memorable Moments

➤ “Investors never underreact. They always overreact.”

— Michael Batnick (03:24)

➤ “It’s the trappings of wealth: Everyone is wealthier, but the minute you see others doing better, it feels worse.”

— Ben Carlson (11:58)

➤ “Maybe the diagnosis isn’t just that it’s expensive to live now; maybe the root of the problem is there are too many people with too much money.”

— Michael Batnick (09:46)

➤ “This is the best labor market for construction workers they’re ever going to have. They’ll be talking about this forever.”

— Ben Carlson (35:55)

➤ “I don’t think it’s possible for every financial asset to be overvalued at once. Money has to go somewhere.”

— Ben Carlson (08:19)

Timestamps for Key Segments

| Timestamp | Topic | |---------------|------------------------------------------------------------------| | 02:27 | Markets year-to-date & corrections | | 04:43 | “Plain vanilla” portfolios outperform predictions | | 06:08 | Wall Street strategists’ price targets & media incentives | | 08:28 | “Everything is overvalued”—debunking the claim | | 09:53 | Too many rich people? “The real problem is...” | | 14:27 | Record foreign capital inflows into U.S. equities | | 15:14 | Mutual funds vs. ETFs—perplexing adoption gap | | 17:07 | Robinhood’s lead among active users; gamification of investing | | 21:44 | Young people embracing investing | | 25:04 | Allison Schrager: The “age of discontent” | | 26:50 | Family stories on past vs. present expectations | | 28:17 | Global test-score decline & future promise of AI tutoring | | 34:02 | AI industry revenue boom | | 35:04 | Construction worker wage inflation due to AI/data center boom | | 37:11 | Crypto market update—record outflows & investor psychology | | 41:50 | Housing unaffordability’s societal fallout | | 52:14 | YouTube Premium’s business model & media disruption | | 53:49 | Decline of legacy TV; Streaming ascendant | | 54:34 | Netflix, box office, and the fate of theatrical releases |

Pop Culture & Listener Fun

• Disney Parks: Ben offers lightning lane recommendations; Star Wars rides “overrated” sparks minor debate (47:03, 48:20).
• Streaming UX: Robinhood vs. Schwab compared to Netflix vs. Disney/Hulu for user experience (19:13, 20:37).
• Book Recommendations:
  • Tom Freston’s memoir (MTV)
  • James Stewart’s "Unscripted" and "Disney War" (63:09)
• Show Recaps: “The Beast in Me”; “Slow Horses” continues to impress.

Conclusion

This episode captured the essence of 2025’s “age of discontentment”—an era defined as much by material progress as by mounting dissatisfaction and the anxieties of comparative wealth. Yet, the data shows more prosperity, more opportunity, and faster-moving markets than at any point in decades. Michael and Ben encourage listeners to recognize both the real economic stressors (housing, services) and the social-psychological roots of malaise, all while advocating for practical steps: invest young, use boring portfolios, and focus on what you can control—however much the world seems upside down.

For contact and listener questions:
animalspirits@compoundnews.com