A National Housing Emergency (EP. 428)

Summary

Animal Spirits Podcast: “A National Housing Emergency” (EP. 428)

Date: September 3, 2025
Hosts: Michael Batnick & Ben Carlson
Theme: Exploring the housing crisis, inequality, market behavior, and reflections on markets and life in 2025.

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Episode Overview

This episode dives into America’s growing national housing emergency, the return of Gilded Age wealth and inequality, and how the stock market and consumer behavior seem remarkably detached from worries about economic headwinds. Michael and Ben also riff on market history, investing behavior, private equity, trends in personal finance, and the changing American dream. Throughout, their back-and-forth is peppered with notable stats, book and media recommendations, listener questions, and their irreverent sense of humor.

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Key Discussion Points & Insights

1. End of Summer, Reflections on Wealth & Old Money

• Michael shares a recent trip to Newport, RI, remarking on the overwhelming visible wealth—mega yachts, historic mansions, and “Gilded Age” vibes ([03:00]).
• Quote: “I was off on Friday…took the kids to Newport, Rhode Island. …There's just yachts all over the place…Old, old money there.” – Michael ([02:58])
• Discussion of Cornelius Vanderbilt, the vanishing of old fortunes, and whether we’ll see fortunes disappearing so quickly today. Michael suggests generational wealth now is more professionally managed; Ben notes “second or third generation can still screw it up, but not to that degree.” ([04:42])

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2. Inequality, Housing, and the Modern Gilded Age

• The episode sets up a theme of inequality, comparing today to the Gilded Age, and juxtaposing “yachts everywhere” against growing complaints of middle class distress.
• Stat: “When [Vanderbilt] died in 1877, if his estate was liquidated, he would have had one out of every $20 in the country.” ([03:55])
• Discussion of the top 1% historically holding “61% of all income” in NYC at the dawn of income tax ([05:30]).
• Pivot to today’s national housing emergency and the challenges of building enough new homes.

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3. Market Valuations, Bubbles & AI

• The WSJ claims “U.S. stocks are now pricier than they were in the dot com era” ([07:49]) — but Michael and Ben push back on the comparison. While price-to-sales ratios have hit dot-com levels, price-to-earnings are not as extreme, and today’s market leaders are actually highly profitable.
  • Quote: “This is not the dot com bubble…Back in the dot com bubble, [companies] did not make any money. These are mature businesses.” – Ben ([08:34])
  • Quote: “If you’re saying…there’s going to be a bust where The NASDAQ loses 80% of its value. Come on.” – Michael ([09:06])
• The ongoing “AI infrastructure” boom is priced in—highlighting Nvidia forecasting $3-4 trillion data center spend by decade’s end ([09:59]).

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4. Market Resilience & Investor Behavior

• Discussion of market “V-shaped” recoveries: “The S&P just rallied 25% over 100 trading days for the 12th time in 70 years…three months later, it was higher every time.” ([11:01])
• Ben notes, “The markets don’t care”—discretionary stocks are surging despite news of softening labor markets. Junk bonds are resilient, private credit is booming ([15:32], [16:28]).
• Speculator behavior is constant: listeners submit Reddit threads about massive options trading losses; Ben and Michael link this to stories of speculators from the 1800s ([18:55]), highlighting the eternal presence of “lighting money on fire.”

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5. The National Housing Emergency

• Key Segment ([38:14]):
  • Michael references reporting that the Trump campaign is considering declaring a national housing emergency.
    • Quote: “There is a housing emergency; what the solution is…can’t they buy mortgage bonds and just get the spreads down a little bit?” – Michael ([38:14])
  • Ben outlines what an effective solution would take: only by direct government intervention to cut through red tape and spur building—as was done post-WWII—could the shortage be addressed ([39:22]).
    • Quote: “They would have to say blanket, we’re going to make it easier for homebuilders to build…That’s what they did in the 50s.” – Ben ([39:22])
  • Lower rates might help with monthly payments, but wouldn’t solve the structural shortfall of 3-5 million homes.

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6. Market Structure, Index Funds, and Flows

• Record-breaking flows into the “Magnificent 10” (top S&P companies), with billions moved monthly via index funds and retirement accounts ([23:01]). These relentless flows do impact markets, but fundamentals still determine index composition over time.
  • Quote: “Index funds and retirement accounts are propping up every stock…Ultimately, fundamentals will drive which stocks are in the top 10.” – Michael ([23:53])
  • Ben points out, “In 10 years, three or four of these stocks will not be in the top 10 anymore.” ([23:37])

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7. The “Vibes” Recession — Perceptions of the Middle Class

• Surveys show a persistent sentiment among Americans, especially the middle class, that the chance of improving one’s standard of living is at historic lows—“the lowest it’s ever been, 25%…” ([27:12])
  • Ben attributes this to the “social media breaking sentiment readings forever.”
  • Michael and Ben acknowledge the contradiction: the US still leads the world in entrepreneurship and upward-mobility, but the “vibes” just don’t match the data ([30:01]).
    • Quote: “Maybe we haven’t spent enough time thinking about how many brains were just completely melted from the pandemic…” – Ben ([28:57])

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8. Private Equity Returns, Liquidity, and Endowment Models

• Ivy League endowments’ private equity allocations are delivering lower returns than the S&P over the past decade, with questions about self-reported data and lack of liquidity ([40:49]).
  • Ben: “I don’t ever really trust these private equity indexes because they’re usually self-reporting.” ([41:02])
  • S&P’s performance has outpaced private equity, and excessive illiquidity is catching up with some endowments ([41:02]–[41:53]).

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9. Market History, Time, and “This Time Is Different”

• Reflection on the length and nature of the post-2013 bull market ([44:57]):
  • Quote: “This period of time is in the history books. …For people that have been following the markets that are around our age…this is not so small a chapter in the history of the stock market that we just experienced.” – Michael ([44:57])
  • Ben notes we truly did live through a “this time is different” era, especially for mega-cap tech—something very few expected ([46:31]).

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10. Consumer Debt, Personal Finance, and Social Shifts

• Extended car loan terms (six to seven years) are now the norm—reflecting more on monthly payment psychology than on consumer distress, per Ben ([47:30]).
• Discussion of young workers’ employment and AI’s disruptive effect: “The entry level automated work” is where impact is felt most, not across all job types ([33:51]).

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11. Social Trends & Cultural Quick Hits

• “996” work/life culture among Bay Area youth (9am–9pm, six days a week) in sharp contrast to the drug/alcohol-fueled hedonism of generations prior ([54:47]–[55:58]).
• The housing crisis, the rise of index/investment products like ETFs, and the irrepressible American urge to start new businesses ([30:01]) are all positioned as markers of today’s unique socio-economic texture.

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Notable Quotes & Memorable Moments

• On Old Wealth:
  “If his estate was liquidated, he would have had one out of every $20 in the country.” – Michael ([03:55])

• On Market Valuations:
  “This is not the dot com bubble…Back in the dot com bubble, [companies] did not make any money. These are mature businesses.” – Ben ([08:34])

• On Housing Emergency Solutions:
  “They would have to say blanket, we’re going to make it easier for homebuilders to build…that’s what they did in the 50s.” – Ben ([39:22])

• On Market History:
  “There's been people…fighting this bull market since 2013…This period of time is in the history books.” – Michael ([44:57])

• On Youth Work Culture:
  “[In the Bay Area:] No drinking, no drugs. 996: Work from 9am to 9pm, six days a week, lift heavy, run far, marry early, track sleep, eat steak and eggs.” – Ben ([55:32])

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Important Timestamps (MM:SS)

• 03:00: Michael’s Newport trip and reflections on old money
• 07:49: Market valuations discussion (“pricier than dot com”)
• 11:01: S&P’s historic market rallies; V-shaped recoveries
• 15:32: How consumer stocks & junk bonds signal market optimism
• 18:55: Options trading blowups; “lighting money on fire”
• 23:01: Flows into the “Magnificent 10” (Nvidia, etc.)
• 27:12: Middle class vibes and social mobility worries
• 38:14: National housing emergency: potential policy responses
• 41:02: Private equity vs S&P returns for Ivy League endowments
• 44:57: Reflections on the bull market and market history
• 54:47: Gen Z/Zoomer work trends—Bay Area “996” culture

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Media & Book Recommendations

• Audiobook: Michael recommends “The First Tycoon” (Vanderbilt biography), “Tough Jews,” and advocates for audiobooks on accelerated speed ([63:19]).
• Movies: Both discuss “Once Upon a Time in America” (Michael gives a mixed review), and “Mission Impossible: Final Reckoning” (Ben found it unnecessary but enjoyable for action fans) ([61:53]).
• TV: “Platonic” (Michael: “thanks for the rec!”), anticipation for upcoming crime series, noting a “bear market for TV shows” in summer 2025 ([52:45]–[54:47]).
• Documentary: “Unknown Number: The High School Catfish” on Netflix—Michael calls the twist “one of the craziest things I’ve ever seen” ([66:50]).

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Tone and Takeaways

Michael and Ben remain conversational, lightly irreverent, and data-driven. The tone is pragmatic, sometimes skeptical (especially about media narratives of bubbles or sentiment), but also deeply appreciative of America’s unique economic dynamism—even while noting profound social and housing challenges.

Big Picture:
The U.S. is in a weird, contradictory period—historic wealth creation persists, but perceptions of opportunity are collapsing for many, and the housing shortage presents a genuine, “national emergency”-level challenge policymakers have yet to effectively address.

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For More From Animal Spirits

• Email: [e-mail]
• Website: The Compound
• Next episode: Live at Future Proof (conference details at episode’s end)

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Transcript

[A]

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[A]

All opinions expressed by Michael and Ben are solely their own opinion and do.

[B]

Not reflect the opinion of Ritholtz Wealth Management.

[A]

This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and with Ben. All right, so summer is officially over. I know we've been saying this for a couple weeks now, but at least it's officially over for me. My kids started school today. The beach is closed. We are closing the chapter of the summer. The last week for me felt like 15 days. I was thinking, like, what? Why? Well, it's not a. No mystery here. I was off on Friday, took the kids to Newport, Rhode Island. Never been there. One of the takeaways or one of the things that struck me in Rhode island. And this is true, I guess everywhere, or in a lot of cities, but especially maybe in Rhode Island. There's so much money in so many different places. There were. There's just yachts all over the place on Rhode Island. Just mega, gigantic yachts. And there's old, old money there.

[B]

Yeah, that was the Gilded Age place to go. Like, that was the place to be.

[A]

So we went for the, the. There a cliff walk. You see all the mansions.

[B]

The breakers still have the Vanderbilt house there.

[A]

The breakers is there. So, okay, Cornelius II built that house in 1896. He died a year later. And I guess there's still. There's still money there. Tons of money. I'm assuming it's not new money because who, who in the world can afford $51 million boat. The Vanderbilts, famously, their money disappeared. Was it the third generation where. It's gone to the fourth.

[B]

I think by the third generation. And he was like the richest person alive back then.

[A]

So I keep talking about audiobooks. I was listening to the Tycoon. The first tycoon. I'm sorry, which is the. One of the biographies about Vanderbilt. And when he died in. And so we'll get to the show in a sec. When he died in 1890. No, what year? 1877. He was. If his estate was liquidated, he would have had one out of every $20 in the country. So 5% of all money was in the family. And then it was gone three generations later. So I was thinking about this. Are we going to have these things where family money goes bust in three generations? I don't think so. I think people are much smarter. First of all, they don't have 10 kids, so there's that. I mean, just Nvidia that. That'll power you for generations to come.

[B]

I think the, like the second or third generation just can still screw it up, but not to that degree. It's just there. There's way too many smart advisors and strategies. And yes, it's very.

[A]

It's all professionally managed. You can't. You can't spend on. You can't like waste a $50 billion.

[B]

So I read the one, the Fortune's Children, which was about the fall of their house of Vanderbilt, and they talked about how the, the parties they used to have, they would, they would literally light dollar bills on fire for cigarettes. Like they, they just, they would. And they would spend like 2 to $500,000 on a party. And back then that, I mean, that's a lot of money. Now obviously back then it was an insane amount. So they like, they were literally letting money on fire. I don't. Yes, I agree. It's. It's hard to see that happening. If anything, the Vanderbilts would just be stronger, more powerful now these days.

[A]

There was one part of the book where they're talking about when they first put the income tax in and the top 1% in New York City had 61% of all income. And that was like even underreported. They estimated.

[B]

Wow.

[A]

So we're going to talk about inequality today. And. But yeah, capitalism.

[B]

So long story short, you got a house in Rhode Island.

[A]

Yes, of course. Anyway, just blown away by the amount of wealth in Rhode island. But also like it's, you know, every major city has yachts everywhere, everywhere you go. This is every coastal city, I should say. There's probably not yachts, no offense, in whatever. Idaho.

[B]

Okay, I thought you were going to make a Michigan joke there.

[A]

No, yachts are water vessels. And if there's no water, there's no yachts.

[B]

Still the greatest book title ever for investment book. Where are the Customers? Yachts.

[A]

Yeah, that's a good one.

[B]

All right, I'm ready for future proof. As you can tell, we head there on Saturday. Everyone else will come Sunday, I suppose. Our Live Animal Spirits is Tuesday, I think toward like the very end of the conference. So it'll go Live Animal Spirits into a happy hour that we're hosting.

[A]

Right into Bush.

[B]

Right into Bush and Blues Traveler. So that will be. That's going to be an awesome, awesome day. When is it? When is the compounded friends? What day is that?

[A]

Monday. So coming up from the beach yesterday, we were listening to. I was listening to Bush getting ready, getting the juices flowing. The Bush is flowing, if you will. And I keep saying, Rob, I was like, do you know this song? She's like, no. I was like, how? I don't understand. Are you not a child of the 90s? How do you not know this song? And she made a very fair point. So sixteen Stone, the album, which I remember very well. I was nine years old, she was eight years old. But she was the oldest child of two. It was her and her younger sister. So if you're 8 years old, you probably don't. You weren't listening to that album. I, on the other hand, youngest of three. I'm sure my brother and or my sister had that album, which is why I was familiar with it. But it was a fair rebuttal. She's like, I was 8 years old. I was listening to. Not Bush.

[B]

My introduction to them was the. They played a live show at the MTV beach house. Remember they used to do that for the summer. MTV would just move all their VJs to a beach house and they would do it. They play the songs from there.

[A]

VJs.

[B]

That was a thing. All right, let's get into the market. This is from the Wall Street Journal. U.S. stocks are now pricier than they were in the dot com era. Someone sent us this and said, hey, I'm up in arms about this. This is a clickbait headline and it probably is a little bit. But they show that the price to sales ratio for the last 12 months is actually now higher than it was in the, in the dot com bubble. Price to earnings ratio is not even close. It's funny, I don't, I don't know anyone who really subscribes to price to sales as like a metric to follow me maybe for some individual companies, but I don't think anyone follows it at the market level.

[A]

Well, in 2021 it was a decent proxy, although you could have used anything for how crazy things were. Whereas like the percentage of. Of stocks that are over 50 times price of sales, like that was a.

[B]

That's true. It, it does seem like it's more relevant. But I just, this is not the do as much as we keep talking about like oh, the potential for an AI bubble. This is not the dot com bubble. It. There are so many differences between now and then. Just the fact that there's companies that are leading the charge and have the high valuations, they make a ton of money. And the companies back in the dot com bubble did not make any money. They were still like forming businesses. These are more, these are mature businesses and they still. Their stocks can still get hammered if they overspend and it doesn't deliver. But this is, this is not like that.

[A]

I would say, yeah, price of sales without, without talking about the operations of the business and the margins. Come on, get out of here. But I think we would agree there are a lot of similarities and there are obviously a ton of differences. Right. Like in ways, in ways. It's not too, too, too dissimilar. But if you're saying like, like this is the dot com bubble and there's going to be a bust where The NASDAQ loses 80% of its value. Come on.

[B]

So there's a quote from the article that said at one point or another, valuations tend to matter and the expectations baked into those valuations matter. And those expectations are getting to be so dramatic it'll be very hard to meet them. That's a fair quote. And you could have said it anytime in the last seven years, probably. And that's why this stuff is so hard to time. Because what's priced into the market, I don't know.

[A]

Yeah, well, a lot. A lot. Nvidia on their call last week, Jensen was saying that they are estimating 3 to 4 trillion dollars in data center spend, AI infrastructure spend by the end of the decade. That's in the price, right? Like it's out there. That's in the price. Matt made this great chart showing that the surprises are coming down on revenue and earnings per share for the quarterly reports. Obviously, analysts were a million light years behind and they caught up. And the expectations for these stocks, like consensus EPS estimates and revenue estimates are insane. So there's a lot of. There's a lot baked in.

[B]

Yes, we're having the same conversation again.

[A]

Hey. Is what it is. Okay. This is a good, good stat. The from Bespoke, the S and p just rallied 25% over 100 trading days for the 12th time in the last 70 years. Ben.

[B]

So one of those had to be Covid, obviously. Yeah, yeah, that's on there.

[A]

Three months later, it was higher every time. To your point, I'm sure these are all coming out of bear markets. I mean, obviously. Yeah. 75, 80, 82, 86, 87. 91, 96. Yep. 99. 09, 20. All right, so three months later, it was higher every time. So sample size of 12. 100% hit rate. We will see. But as we point out all the time, when I'm using Bespoke's data like this or Ryan's data like this, behavior of the market. Like there's a reason why stocks were up this much. Right. Bad news, Overdone. Boom. See you later.

[B]

So great chart from exhibit A that kind of follows this. And it looked at the symmetry and declines and recoveries and it just showed that like the, the pace of the decline tends to match recovery. And then they show the one in April, which kind of. So this is like the Average path. Sorry, Excuse me. So this is the average path 12 months before and after a bear market lows. And it looks like a V, obviously, but it tends to be like the coming out of it looks like going down. No, it also looks like a V. Oh, nice. Yes.

[A]

Rocking a V neck for people that are listening.

[B]

All right, Remember like five years ago, that was your thing. All you wore was white V necks. That's all you did. That was your Steve Jobs undershirts.

[A]

I had to. I had to. I had to graduate those.

[B]

But this one is following that, that script kind of to a T. But also it looks like it's coming off a little faster than average. But remember the whole thing, that was like, well, what a V shaped rally? V shaped bottoms are just dead. But those, they've always kind of been alive, I guess.

[A]

Yeah, yeah. It's great stuff. I think it makes sense. All right, Ben, you have a little tickle in your throat. Let me tell you something.

[B]

We've. We've had sick kids for the past week.

[A]

So every time this year, at least it's happened once before. So I'll go with every time I. I get a little. I get a little sick. And I found this guy on Instagram. I guess he's a health fluencer. Dr. Mayo07. So I see this video, it's on my algorithm. Like this looks disgusting. I'm gonna try it. To get rid of. To clear your lungs. Because I have. I get like. Sometimes I get like a pre cold where you feel it and you get a little bit of mucus, but it never really blossoms. Maybe I have a strong immune system not to break. I don't know.

[B]

You're sick all the time, man. I don't know about that.

[A]

I am.

[B]

Yeah, you're sick all the time.

[A]

Maybe I am. Half an onion, two cloves of garlic powder, two chunks of ginger. Ginger.

[B]

This. This sounds like you're trying to fight.

[A]

Off vampires at a glass of water. It was heinous. But guess what?

[B]

It was awful.

[A]

I could breathe now fully without coughing.

[B]

That's a placebo effect.

[A]

I don't think so.

[B]

All right, that. Found it on. Found a guy on Instagram. It sounds like.

[A]

Hey, listen, don't argue with the results.

[B]

All right?

[A]

Another inside the market behavior of of stocks over news chart data from Sentiment Trader shows What happens after 17.5% of discretionary stocks record a 52 week high. Why 17.5%?

[B]

That's a very specific number.

[A]

It is because this works, but just go with it. You could ask him if you want. Why 17%? What does he say? Higher one year later. Every time but one.

[B]

So. But your point is that discretionary stocks are doing well. Which, so I guess some of my little theme here going through the dot this week is the markets don't care. Like people are worried about a lot of stuff, but not the markets. Like do you see any, any worry coming from the stock or bond market right now about anything?

[A]

Yeah, where, where is their worry in the 30 year. 30 year bonds around the globe are breaking out to multi decade highs. So that's where the Rory is.

[B]

Okay, but look at this, look at this story from the Wall Street Journal.

[A]

Wait, hold on.

[B]

Okay, hang on.

[A]

Just one, one more point about this discretionary stuff. It is specifically odd that we are getting a lot of news and anecdotes about the labor market slowing and the consumer pulling back a little bit and yet discretionary stocks are doing so well.

[B]

Yeah, it. The markets don't seem to care that much. So this one from the Wall Street Journal. Junk bonds are on a tear this summer. Investors are piling back into funds that buy junk rated corporate bonds and loans. And they're saying this is despite the fact that defaults are rising a little bit. But they show junk bond yields, which I didn't realize. Junk bond yields spiked to over 8% but have fallen in April and fallen ever since. They're back down to like six and a half percent. The spreads are really low. They also show the private credit stuff just up and to the right. The money managed by business development companies which make private loans to small and mid sized businesses. This is the private credit stuff jumped about 33% over the 12 months ending in June. Obviously that's to meet a lot of investor demand as well. But people aren't worried about credit. The bond market is not. So you say the 30 year. I still think, isn't the bond market just kind of normalizing, getting it like the yield curve is becoming uninverted or whatever the word is.

[A]

I don't know, I don't. How's this normalizing? If you look at the spread between the two and the 30 or the five and 30, whatever. It's been up into the right for a long time. But you have global 30 year bonds yields breaking out. I mean that's where the worry is.

[B]

Okay, but I mean, I don't know. I still see, I see the 10 year at 4.3%. Yeah, that doesn't seem to concern me. Wouldn't. It's weird that you see the 30 years breaking out. But not 10 years if inflation is that big of a worry. Is it? I don't know. I'm not a bond guy, but that doesn't seem to make sense to me.

[A]

All right.

[B]

Last week we talked about value being dead. Someone sent me a chart or sent me some figures and I looked them up. I think I sent this to you last week over the past five years. Now, maybe this is cherry picking because this goes to 2021, when, like the meme stock top. But whatever, it's five years. It's a long time in the markets. DFA International Small Cap Value and US Small Cap Value are both beating the Qs and the S and P over five years. Small Cap Value, us. And I think the international one is the one that surprises me the most. So an advisor sent this number, these numbers to me. Yeah, it's kind of wild, right?

[A]

Yeah.

[B]

Still work like undertaker.

[A]

All right.

[B]

Did you see the story from Bloomberg?

[A]

I did see the story from Bloomberg.

[B]

Okay. More ETFs and stocks. A lot of people said this is insane, but I thought Samro had the best take on this. Did you see his take on this? He said there's more recipes than food ingredients.

[A]

I like that.

[B]

Like this, this. It should be this way probably.

[A]

Yeah.

[B]

Even though there's a lot of stuff out there that should not exist like this, this shouldn't be a cause for concern. This is. There's. There's going to continue to be more and more ETFs.

[A]

There will never be be more stocks than there are ETFs for the rest of time. How's that? This, these lines will never deconverge.

[B]

Yes, That I agree with. I mean, single stock ETFs. And there's going to be way more stuff coming. All right, this is a good thread. Someone sent us kind of touching on this. We talk a lot about behavior getting better for investors. And we, we also asked about, like, how much of the options trading is like degenerates versus how much is people finding income or hedging. And I think the one thing that will never go away is people who like, light themselves on fire investing their money. That. Did you look at some of these?

[A]

No.

[B]

So this zoomer on Twitter did a post and it showed this guy who went from $40,000 down to 600 trading options, obviously. And this, they, they pulled these all from Reddit and they, they show Robinhood screenshots. So people actually are sharing this with Reddit. Like, hey, look what happened to me. I blew myself up. This person was down $120,000. Another person was down $60,000. And this is like all the money they had. Someone said, like, my life savings was $100,000. Went to zero. Trading options, obviously. I guess a good reminder that, like, this stuff is never completely going away, ever.

[A]

No, I mean, this happens obviously with, with sports betting all the time. Again, getting back to the tycoon book that I, that I was listening to, they were talking about speculators on Wall street in the 1860s.

[B]

Yeah. These people would have been in bucket shops back then, right?

[A]

Yeah.

[B]

You know, the funny thing is, whenever you read one of those books, an old Jesse Livermore book or stuff about the Roaring twenties, those bucket shops sounded really fun, didn't it? Sounds like going to a sports book at a casino.

[A]

Yeah.

[B]

Because that's basically what it was.

[A]

And imagine the characters that hung out there.

[B]

Oh, yeah, for sure. You would have loved it.

[A]

Oh, are you kidding me?

[B]

Yeah, me? No, I wouldn't have. Probably not. No.

[A]

I would have been smoking cigarettes with a fedora covering my bald head. Hey, you know what? Speaking of this, this, I was thinking about this in Rhode Island. Whenever a hat blows off a bald man, it's so much worse. It always looks like an emergency. And it looks like you're embarrassed about being bald when you're. I'm not embarrassed about being bald, but if a full headed hair person, if they're. If you're haplo off and you did the exact same thing that I did, nobody would think twice. It's like, oh, his haplo off, he's going to get it. When a bald man's hat flies off, he's like, oh, he's shamed.

[B]

Do you think the bald man scrambles faster for the hat as well?

[A]

No, but I think, I think. Well, perhaps, but it can appear that way to the naked observer. Like, to the outside observer. You're like, oh, look at that poor asshole.

[B]

You're like, oh, he's trying to change his hat.

[A]

But I was wearing my bucket hat and whoop flew right off. I had to run around.

[B]

Okay, see, that's even worse, the bucket hat flopping off.

[A]

Right. Because the bucket hat especially makes it look like you're hiding your baldness. Which I wasn't. I was just trying to protect my neck.

[B]

All right, you're gonna wear the, you have to. You have to wear the bucket hat to Oasis. I feel like 100% right. That's a bucket hat kind of thing.

[A]

By the way, future proof snuck up. It crept up on us. My sister Said, hey, do you guys want to go to the beach next weekend? Then I said, no, it's closed, but maybe come over, let's hang out. And then I was like, wait a minute, I'm going to go to California.

[B]

That's right.

[A]

You'll have to forgive my friend.

[B]

He's a little slow time, my friend. All right, what's this? Email.

[A]

Good email from a listener. Do you think you could tell if someone is a bull and bear after interacting with them for an hour? Context. I went back to school for a master's degree last year. We had a secret Santa party where 20 classmates showed up. It was only a one year program, so we didn't know each other very well at this point. At the end of the night, we went around trying to predict for each other classmate if their spirit animal was a dog or cat. This is getting weird. I think we guessed right for everyone, which we found amazing. Do you think you could do this same exercise for investors, stock market enthusiasts to figure out who was a bull and a bear? All right. We didn't need that context anyway.

[B]

Easily, easily. I could do this.

[A]

Think so?

[B]

Oh, yes. For just regular run of the mill normal people, civilians, if you will. I just, I remember at a wedding, a college friend I hadn't seen in a long time, this is probably 10 years ago, was asking me investment questions, the market questions, and I immediately picked up, oh yeah, this guy is like a zero hedge person.

[A]

Yeah, yeah, yeah, you're right. There's, there's only one question you need to ask to figure out if somebody's a bull or bear.

[B]

What's that?

[A]

I'm not gonna say it, but like you could say, like you said, like, do you like a name of person? Right? Like, are you a fan of this person, this online person? And if they say yes, then you, you probably know which way they lean.

[B]

Yeah, I think we could. Yeah. See that would be a good game show for cnbc. Like it would be like the, the dating show, you know, you have one person sitting on this side. I'm sitting over here. We have three, like bulls and bears. Like that was the Dating Game, you know, just like that. And you have to guess. And we match perma bears up together.

[A]

This is wild from T1 Alpha. Just remember, no matter what happens today, 70 million working Americans will still be buying a video every month whether they realize it or not. And he broke down the top 10 stocks and I guess he's estimating, I don't know where these numbers come from exactly, but the daily, weekly and Monthly flow into the top 10 names. So for example, daily flow for Nvidia, $95 million. Weekly flow, 475. Monthly flow, $1.9 billion.

[B]

This is impressive and it is true. But despite this fact, in 10 years, three or four of these stocks will not be in the top 10 anymore.

[A]

Sure.

[B]

That's the, that's the thing that like you think the index funds are propping these stocks up, but some of these stocks will be replaced and they will fall.

[A]

I mean, index funds and retirement accounts are propping up every stock to a certain extent. At least the index, the ones that are IND in indexes. How could, how could this not have an effect? That's not to say that you're, you're 100% right. Ultimately, fundamentals will drive which stocks are in the top 10. Of course. And also, and also these relentless flows into the market absolutely are having some impact. How could they not be? It's so much money.

[B]

If your point is there's a lot of money going into the stock market, so stocks are going up. That's not a clever point. Like duh. Of course, if a lot of money, more money goes into the stock market, that comes out. Stocks are probably going to go up.

[A]

Yeah. It's just wild. Like I've never seen a broken out this way. This was, this is good work.

[B]

It is interesting. Okay. Wall Street Journal had a story about the vibes. The middle class vibe has shifted from secure to squeezed. And they look at consumer sentiment by incomes. $100,000 or over 50 to 100 and under. 50 and under 50 has been relatively low for a while, but.

[A]

But stable.

[B]

Yeah, you're right. Relatively stable. This, this is why. So a lot of people are sharing this chart on social media. This is why I don't think this chart is that big of a deal because look at how uneven the 50 to 100 range is it. This year alone it dropped in April, then it spiked for two months, then it fell again.

[A]

That's noisy.

[B]

It's very noisy. Right. This isn't like a three year chart. This is a one year chart.

[A]

You know, I didn't even realize until you said it. I didn't realize that like this starts in November 2024.

[B]

Yeah.

[A]

So it's a very noisy chart. But I thought this, I thought this part was funny. So anyway, with all this stuff like it's, it's so dependent on where you live. Right. Middle class is not a national thing. It depends where you are. So these national numbers, middle class is 50 to $100,000. I think this is part of what like annoys people is these definitions. I thought Pew had a good research. Pew Research had a good definition for middle class. Those earning from 2/3 to double the median household income. Fine. All right. Anyway, this, this quote made me laugh a little bit. Not like haha, but like, of course it's a dumb quote. Folks that are low and moderate income, they don't have any extra money anymore. Bostic told an audience at a recent town hall meeting in Alabama.

[B]

Obviously you don't say, you don't say.

[A]

Is there like, there's like a weird amount of, of, I don't know. Virtue signaling is the right word, but an obsession about how little money lower class income, lower income people have. Obviously, and it's not to be insensitive, but this is not. You're not making a point by suggesting that folks that are low and moderate income, they don't have extra money anymore.

[B]

Or are going to struggle to. Yes. Wow.

[A]

You don't say.

[B]

Yeah, well, the article was full of stuff that kind of showed how this cohort is getting squeezed. This was the one. This is one of the examples that made the most sense. So unit airlines had premium cabin revenue in the most recent quarter increased 5.6% while the economy cabin was negative. So they're just saying again that the high end is still very willing to spend, the lower and middle ends are cutting back. And there was a lot of different examples in it. So that, that does seem to be a trend that we've been hitting on lately.

[A]

Yeah.

[B]

Okay, but this is another thing. The Wall Street Journal, there was a new poll. This is another reason why I think the sentiment ones are so hard to understand. So they look at the question is people like me have a good chance of improving our standard of living. Agree or disagree. And this goes back to like the 1980s. So this has been going on for a long time and for a while there it was 60 to 70% or so. And then the pandemic hit and it kind of started happening a little bit before the pandemic. But this thing has crashed in the past 10 years and now it's 20. I think they said it's the lowest it's ever been, 25%, which is record low dating back to 1987, think that people like me have a good chance improving our standard of living. And I think this, this is just a case of social media breaking sentiment readings forever. There is a before social media and an after social media and it's completely rendered sentiment and vibes impossible. To measure anymore.

[A]

But I think the pandemic broke it.

[B]

The pandemic helped. Well, this was already trending down. The pandemic broke it wide open.

[A]

Yeah.

[B]

And I just think that these figures are much, much harder. Like, I don't know how they did this, but they did an actual versus predicted consumer sentiment. This goes back to like 20 years. And the actual versus predicted, to your point, tracks pretty closely until the pandemic. And then coming out of the pandemic, the predicted, what the sentiment should be based on past readings is not like that at all. Maybe I think you mentioned this a couple weeks ago, how weird life seems since then. Maybe we haven't spent enough time thinking about how much, how much, how many brains were just completely melted from the pandemic and haven't recovered. It just, it was a period of time that we went through and it changed us forever. And some people haven't grappled with that.

[A]

Oh yeah, we spend a lot of time talking about how like a lot of these surveys are either broken or not real life or talk to people and it just doesn't feel this way. And it doesn't matter for the market, but it definitely does matter for, for politics, which obviously matters a whole lot because that's where the laws come from and people vote based on how they feel. So it definitely, it's definitely not nothing. Even if it's even yes, that that's.

[B]

Probably the place where the vibes matter the most.

[A]

100.

[B]

Right. Like because the economy, eventually the data wins. Like, you can think what you want about the economy, but it is what it is. But yes, also not, not to be.

[A]

Insensitive, but just to be objective here we spend a lot of time talking about how the lower income consumer does not move the stock market. They are responsible for less than 1% of the earnings of the overall market. But as a cohort, obviously their vote matters as much as everybody else's. And I don't know the, the how, like how it breaks down in terms of the number of votes, but that's where it shows up in a big way.

[B]

Right.

[A]

And of course, politics, local, national impact, national discourse.

[B]

And maybe that's why those sentiment numbers are so volatile. Right? Because people are changing their minds about this stuff all the time depending on what happened. All right. Roger Lowenstein had a great piece in the Wall Street Journal about why US capitalism is unlike any other. And this is the thing where that last sentiment reading from the Wall Street Journal doesn't make sense. People like me have a good chance of proving Our standard of living. He compares us to Europe, but he said American capitalism is especially pitched toward getting capital to entrepreneurs. Last year, the US registered a record 5.5 million applications for new businesses, one for every 24 households. And I don't know the exact number, but it's something like 60 to 80% of all small businesses don't make it right. They completely go out of business. So. But this is the, these are the people who think, like, yeah, my life is going to get better if I try to do something like this and I try to start something on my own. It's going to work for me. Like, that is.

[A]

Those are the balls.

[B]

Yeah. Right. And this is one of the things out of the pandemic that happened that was crazy. More people than ever decided to start their own businesses.

[A]

Yeah, like you never would have predicted.

[B]

That in a million years.

[A]

Take Dr. Mayo 07, for example.

[B]

Right?

[A]

He just said, hey, I'm going to fix Michael's cold anyway, like, and subscribe.

[B]

And if there's any werewolves or vampires in the neighborhood, they're going to be good too. This one was crazy to me. He says Europe is more equal, but also poorer. Per capita income in Arkansas, one of the poorest states, is greater than in Germany.

[A]

Huh?

[B]

Overall per capita income in the US is an astonishing 84% higher than in Europe. He said, obviously. And, but his. To his point, the, the lower income, he said, is way worse in America because there isn't as big of a safety net.

[A]

All right, this seems like a weird stat. Per capita income in Arkansas is greater than in Germany. Come on. He said.

[B]

You don't believe it?

[A]

No, he said overall per capita income in the US is in. The gap shrinks if one adjusts for purchasing power. But by any measure, I mean, yes, the point. That's a, it's a fair point. I just. That sounds, that sounds truly unbelievable.

[B]

Okay, Grok, is this true?

[A]

Okay, Ben, speaking of Grok, last week, I think. Tell me if I'm wrong here. I think when I mentioned what I was doing on McDonald's from on quarter for McDonald's, we were talking about quick service restaurants versus versus sit down and fast food and all sort of stuff. And I asked the AI in quarter to make me a chart of same store sales. And then it grabbed me. It like, it numbers the quotes so then you, you scroll over it and it takes you to, to the paragraph and question what they're talking about. So I was talking about that. And like with the. Through the lens of Fetsu, the reason why I Brought it up was just to demonstrate how fast AI is moving. And the email that we got a couple of weeks ago from the analyst who is being let go. All of this sort of stuff is truly breathtaking.

[B]

Yeah. By the way, sorry to cut in. I had a phone call with a guy who lost his job. He's getting interviews and he's moving on. He's going to, he's going to be okay.

[A]

That person.

[B]

Yeah, I talked to him.

[A]

Good. So somebody emailed this to us. A paper out of Stanford said canaries in the coal mine. Six facts about the recent employment effects of artificial intelligence I uploaded this to chat GBT because I'm not reading 57 pages. I asked for the most important points and literally Ben, maybe two seconds, I think it was closer to one second. It gave me this six key facts.

[B]

That is, that is the most impressive thing is just how quickly and if it, if it takes like 10 seconds to do it, you're like geez, this is taking forever. But most of the time it's like instantaneous. How, how it does it is, it is pretty fast.

[A]

So let's look at some six key facts. Employment decline for young workers in AI exposed jobs. So early career workers 22 to 25 in AI exposed role software developers Customer service have seen steep employment drops. Overall employment strong by young workers like we know that automation versus augmentation matters so declines are concentrated where AI automated tasks versus augmented tasks. Anyway, I don't need to read all six, but look at this chart from Ned Davis Research. So it shows unemployment rates by education less than a bachelor's degree. High school graduates, no college, no high school diploma. And look at the unemployment rate for college graduates. It's the only one that looks like this. Entry level jobs are in a world of pain. And I guess this is the big worry. Not that AI is going to replace every job or make sure that we're all out of work or anything like that, but the entry level automated work.

[B]

Here's the weird thing though with this chart that I maybe I'm not reading. So less than a bachelor's degree, high school graduate, no high school diploma. To your point though like less than a bachelor's degree is, is falling. These other ones are stable, haven't moved at all. I thought the big worry was like you know, call centers. And maybe those things just haven't happened yet. But shouldn't it, shouldn't these, this be the low hanging fruit? It's interesting that it's the college grads that would be impacted first. I don't understand why the people below college are not also seeing a big impact from this. Because you would think, well, those jobs can. Or is it because those are more in person physical labor type of jobs.

[A]

Also the immigration crackdown is probably why less than a bachelor's degree unemployment is falling. I guess.

[B]

Good point. Okay. All right. Last week we talked about the microstrategy and I thought that you gave a pretty. I thought you kind of gave a defense of Michael Sailor. You have been recently.

[A]

Well, hold on, hold on. Not a defense, not of the stock. I just think what, I think what he's doing is super interesting.

[B]

Yeah, you, you gave him credit for it, for pulling it off, essentially. It is funny though, anytime you talk about something like this, the, the crypto people will come in and be like, you guys still don't get it?

[A]

I do get it.

[B]

And I, and I. But someone sent me this article from Coindesk and it talked about what Jim Chanos is doing. I think I forgot to mention this. So he called it financial gibberish. So he, he obviously is not a believer. He, he just said the company offers nothing unique beyond owning bitcoin. And so Chanos strategy is, he's going short micro strategy, long bitcoin.

[A]

Well, if you look at a chart of micro strategy divided by ibit, it is, it is very much at like key potential support. It hasn't outperformed all year. Which is interesting.

[B]

I think that, that. So he's just saying listen, the premium is going to shrink. And to me that, yes. As opposed to like trying to short microstrategy. This, this is a way more reasonable strategy to me.

[A]

Yes.

[B]

If you really don't believe in that.

[A]

This is going to last if you short microstrategy outright. That's.

[B]

And he, he thinks, just, he thinks all the other firms doing this, he said a hundred other 40, 140 firms worldwide are doing this, these treasury strategies that will cause a premium to shrink. And that, that to me seems like a reasonable bet. I don't know.

[A]

Yeah, same.

[B]

But I was on CoinDesk and looking at this, this story and another story came up and it says rich bitcoiners are reportedly spending BTC on luxury holidays. Does this really make sense? So I guess there's a story in the Financial Times about how people are now allowed to spend crypto on private jets and, and taking yachts and these really nice hotels and people are spending their crypto. And this article was like, hey, hey, hey, is this the right thing to do? Remember the bitcoin pizza guy, he spent 10 Bitcoin on a pizza and, or however it was. And does it really make sense for these people to spend this money and.

[A]

If you have $50 million of Bitcoin, yeah, spend it. What the hell?

[B]

And it's like, well, we don't know for sure. If the bull market continues, then maybe not. It's like, guess what, if you have enough bitcoin and crypto to take private yachts and private planes and yes, it's okay to spend some and enjoy it.

[A]

What is wrong with people?

[B]

Yes. Counting your, your bitcoin is not going to make you happy.

[A]

I think there might be more to life than that, Ben.

[B]

Yes.

[A]

Wow. Okay. All right. So there was a report last night, Trump ways declaring national housing emergency. Bessant told the Washington examiner, quote, we're trying to figure out what we can do and we don't want to step into the business of states, counties and municipal governments. We may declare a national housing emergency in the fall. I mean there is, there is a housing emergency. I, I, what the solution is. Again, this is like out to my purview. Can they, can't, can't they buy mortgage bonds and just get the spreads down a little bit?

[B]

That's the thing though. What could they actually do that would fit? Because the whole point is depending on estimates, we're 3 to 5 million housing units short. That's what we've underbuilt in the past 10 or 15 years. So I guess, yeah, our solution to almost everything is just more debt and it would be okay, well lower rates. But would that really fix the housing emergency? Would that make it, I mean it would decrease the monthly payments but wouldn't.

[A]

It would unlock a lot the demand. It would unlock a lot of supply too. I'm not saying that would fix everything because you're right that we are under housed.

[B]

Prices would probably go up again though. That's that lowering mortgage rates alone is not going to fix the housing emergency if it really is. They, the thing is, he said they don't want to get into the business of states, counties and municipal governments. That's what they would have to do. They would have to say blanket, we're going to make it easier for house for homebuilders to build. Cut through all the red tape. If you do this, we'll give you a government backed loan to build houses. That's what they did in the 50s. That's how they got all those middle class houses from the people who came home from the war. The government literally backed the mortgages and they made, they took all the risk off the plate of the home builders. That's what they'd have to do. Short of that, I don't see how they could fix it. That's my thinking. Like, what would actually help? I don't know. All right. The Wall Street Journal had a piece on private equity returns and it says Yale's trendsetting private equity strategy is getting harder to pull off. We talked about this a little last week. They look at the annualized returns for the decade ending June 30th. Why June 30th? Because that's when most of these Ivy Leagues report and they look at the 10 year returns in 2025, 2015 and 2005. And private equity continues to go down. The S and P has kind of slaughtered private equity in the past 10 years. Now, here's the thing. These numbers for private equity are probably even worse than they look on here because I don't ever really trust these private equity indexes because they're usually self reporting. The returns for IRRs are not the same as compounded returns for like mutual funds and ETFs. So I would always take these numbers with a grain of salt.

[A]

Yeah, it's funny, I was going to say these numbers actually look good. Like, all right, yeah, the S and P did 13. Like whatever it is what it is. But 9% for private equity for 10 years, that doesn't sound bad at all. But you're telling me that it's. You don't even think it's 9%?

[B]

I don't. I never believe these private equity index numbers. I think because again, they're self reported. Like if you have a really terrible fund, you're not going to go, hey, here, take these, take these results, put them in there with the other ones. So I think they're always a little lower than they, than they look. But yeah, you're right, not. So they were 9%. But the thing is they talk about how all these Ivy Leagues are not following what David Stonson said. And his whole thing was you should always have at least 30% of your assets. This is for the Ivy Leagues in cash, bonds or hedge funds. And they said five out of the 10 Ivy League universities do not have that. So the liquidity crunch you mentioned a few weeks ago in Jason Zweig's article, that's why they just did not think through that calculus of having something.

[A]

No, it's weird about a private equity index too. It's obviously not investable and nobody gets this return.

[B]

Exactly. Yes, it's impossible to get. I mean, some, some people would say, well, if you invest in like the big private equity players, that's probably, essentially what you're getting is an index because they're so big. But yeah, it doesn't exist.

[A]

All right. I was listening to a firm's conference call because they had a blowout stock. Had a.

[B]

So is this another one? I think last week you said doordash is a stock you've been most wrong about. Don't you think the Collective royal. We was probably the most wrong about a firm as well.

[A]

I was a business. I was not. I was not.

[B]

No, I'm not saying you. This is a firm that people mocked relentlessly.

[A]

No. Well, in fairness. In fairness, I think people just lol. Mocked putting Chipotle on a buy now, pay later type of thing.

[B]

Yeah, but. But the whole thing of buy now, pay later, it's like, this is a fad. This is a flash in the pan.

[A]

Yeah, there's probably some of that.

[B]

I feel like there was a lot of that when this company first came out.

[A]

But I see a firm popping up way more when I'm buying stuff on my phone. Like it's, it's a button there next to Apple Pay and Venmo in a lot of cases.

[B]

That's true. I used it a few times early on, but now I'm like, what's the point? I, I don't.

[A]

I would use it on a big picket item if you can get 0% APR for, I don't know, a watch, for example. Right. And you could like, why would. I mean, that sounds appealing. Anyway, the gross merchandise volume up 43% year over year to $10.4 billion. Active consumers up 24%. Transactions per customer up 19%. They finally reported their first quarter of gap operating income. But this is the chart that I wanted to share if the consumer were under any duress. Now these are, these are what? Doesn't matter. Duration loans. I said these are short term loans. But it doesn't matter if, if the consumer were under duress. This is the place that you would expect to see it. Right? You would expect, like a younger cohort. I'm looking at delinquency performance 30 days plus. And they show it every year, 20, 21, 19, et cetera. Nothing here. Absolutely nothing here.

[B]

I had a friend this weekend, we're at the beach, and the Great Lakes are aptly named. I'll just say that beautiful day on the beach this weekend. But a friend there at the beach asked me, like, where are we like, do you think that we're going to get, like, could we get a recession in the next year? Like, when is this stuff going to, like the tariffs going to hurt? And it just, Anything could always happen. It just doesn't seem like, it seems like people are still waiting for something really bad to happen. And it just feels like we're going to keep waiting and waiting and waiting.

[A]

Well, not. I mean, come on, something bad will happen because that's the way it works. We don't know what it is. Something will happen.

[B]

Right. But I think, my point is, I think it has to be something bad to happen to force the hand of a recession. I don't know.

[A]

Yeah, yeah. No, no. There needs to be an event, a catalyst. Like, it doesn't. Yeah. We're not just gonna, we're not just gonna run out of money or just.

[B]

But that's what, that's what people thought, I think. Well, once the excess savings is gone.

[A]

Right, right.

[B]

That'll do it. But no, I know it's weird. It's gonna end.

[A]

We've been doing this for so long, not just a podcast, but talking about markets and this is in the record books. Like I was thinking about that. This, this period will never not have existed. I know that sounds really silly and dumb and obvious, but my point is this. For people that are, that have been following the markets that are around our age that came in, in the, I don't know, 07 is time frame coming out of that. In 2013, when we first hit new all time highs, there's been people that have been fighting this bull market since 2013 that have been waiting for the return of whatever value this, that, the way that things used to be. Guess what? This period of time, this bull market from 2013 to 2025, this is 12 years. It's not nothing now, it's not 30 years. But whatever happens from here, and maybe there's a bear market that takes it all away, we have a lost decade. This period of time is in the history books. We've read all the books from about the 60s and the 70s. And this, this is a chapter. This is like a not so small chapter in the history of the stock market that we just experienced.

[B]

All right, if this was a 1980s movie, I'd give you one of these. Slow clap, right? No, Yes, I agree. We just lived through one of this. Time was really different.

[A]

100%. It absolutely was.

[B]

Oh, remember, oh, if this time is different, people kept saying, oh, I guess this time is different.

[A]

Yeah, it was very.

[B]

It Literally was all the baselines for the, for how big stocks can get the growth rates they can have. It really was different. I remember Michael Mobison did this piece in the mid 2010s about like, if we just put a baseline on these tech stocks, they would have to have like some of the highest growth rates in history to justify these, these valuations. He wasn't saying like. And guess what? We did have that.

[A]

Right.

[B]

It is.

[A]

By the way, Mobison is. He was 100% right. Very few people could have forecasted this, that these giants would continue to grow and take market share and exp. And accelerate their margins. And if, if Mobison's piece said, I'm making this up, that there was a 3% just base rate, that this could have happened. It happened, right?

[B]

Yes. It's really wild. Okay, here's something people might be concerned about, but I think this is more of a personal. Duncan says we're jinxing the market right now.

[A]

Yeah, no, I stop. We do this every week. We've been doing this for years. Yeah, One time it'll stop.

[B]

So this is one of the. And I've talked about this a lot. I think I wrote a blog post about this. I got a question about it from someone. But Bloomberg has a piece that cars are getting so expensive that buyers need seven year loans. And it talked about how once rare, seven year car loans are fast becoming the norm. So average sales prices for cars is up 28% in the past five years. And seven year loans represented 22% of all new vehicle financing. Six year loans, once considered the upper end of the range, are now most common, 36%. So six years and up is more than half of all new loans, which is kind of nuts. So they interviewed a few people to ask them about this. I think this is more of a personal finance issue of people have in their head what their monthly car payment should be and they'll do whatever they can do to get their monthly payment to that level. Now, it's not a very smart personal finance decision unless you can borrow at, I don't know, 3% or something. 4%. And obviously it says like the 84 month loan versus a five year, you're paying on an average almost five grand more in interest over the life of that loan. But I think this is just people having this idea of what their monthly payment should be. I don't think this is a sign of like consumer distress or any means. I think this is just people keep wanting to keep their line item on their budget the same hundred percent.

[A]

I've got a new car coming up in April. I don't know when we did that. We'll talk about it when we get there, okay? Relax, Duncan. All right. But you know what? So I didn't put this in the doc. Cause I know.

[B]

Yes. We've been called toppy for like six years now. So eventually, sometime it's gonna happen.

[A]

September. Duncan's not wrong. September is not a great month for stocks, especially in the first year of a presidential cycle. Now, why is that the case specifically? Is it total noise? Maybe. I do think there was something about people returning, like to Wall Street. I don't know.

[B]

It is funny how that. That is always a thing of like, well, they're on the Wall street traders on Hamptons for the summer now. They come back, then things are going to really start to matter.

[A]

Yeah, I know it's. It's silly, but what other. What other reason would you ascribe to September not being a great month? It is bizarre. It does. I don't know. I do wonder if the first week after Labor Day is a seasonally weak. Ooh, a weak weak. And also, who cares?

[B]

But just like also, I said we. I said we needed a healthy correction. Maybe this is it.

[A]

We do need a healthy correction. Just 5% slap on the people hate when you say that, that we need a correction. You know why? Because it's like, oh, we want people to lose money. No, we don't. I think my. My point. When stocks get too expensive and go straight up, which by the way, they have it, we have cooled off. So any of the excess that was in the market, like the xxx, we blew that foam off the top. Right. We've gone sideways for a couple weeks. It's all good. But expensive stocks, you just have less margin of safety. Right? Like a stock that's trading at 10, 12 times earnings, if they miss by a penny, it's probably not going to go down 20% the next day. Stock trading 100 times earnings missed by a penny fall 30%. Ben, we got an email. Somebody was wondering, your friend who got cut off at 18, how'd they turn out?

[B]

Oh, good question. And it's funny, I looked it up because this is a friend that I kind of lost touch with. He moved away. So he went to massage therapy school out of high school. I think he wanted to become a chiropractor, but probably couldn't afford the schooling because he did it on his own. So he went to massage therapy school first, then decided to go to college much later on. I think he went down somewhere in North Carolina where he was. And I looked him up and now he's a chiropractor living in Texas.

[A]

It turned out well. Good for him.

[B]

Yeah, yeah, Good question. All right, so we had a bunch of work done in our house for like the last five or six weeks. And it was a giant pain in the ass. But now that it's done. But they did our flooring.

[A]

I love that you threw this at the dock.

[B]

Yeah, well, they put new wood flooring in and you know, there was a lot of sawdust. There was sawdust everywhere. Right. But they were doing all the cutting and stuff in our garage and after they're done, the guys would clean up and they just leave all their tools in the garage. And they did them in a nice neatly fashion over in the corner. You know, we put a spot for them, but they left their huge Milwaukee leaf blower thing because they blow the sawdust out. Right.

[A]

That's a good looking leaf blower.

[B]

So in the years past, I use a leaf blower a lot just to the wood chips for my dog and the kids. And I like to blow the garage out all the time because I like to keep a nice clean garage. And I got these cheapo, this cheapo Black and Decker one from Amazon, it was probably 80 bucks. Yeah, of course I would, but the thing stinks. It doesn't work very good. And I use. They. They had this Milwaukee blower and I used it a couple times because they left it there and I just thought, oh my gosh, this thing is 10 times more powerful than mine. And so I went on Amazon and it was probably, I don't know, triple the price of my Black and Decker. But it works 10 times better. Sometimes it makes sense to pay up for quality, not be a cheap ass.

[A]

That's a great looking leaf blower right there.

[B]

It is amazing. I mean, right? Look at that. It looks like it could power it powered jet or something. It's amazing.

[A]

All right, Ben, we've been in a. In a bare market for TV shows. Although thank you for the platonic wreck.

[B]

Oh, you liked it?

[A]

Well, I fall asleep every night. Robin watches and she's giggling. By the way, me falling asleep has nothing to do with the quality of that show.

[B]

Okay.

[A]

My bedtime has been getting earlier and earlier and earlier to an embarrassing level. I've been sleeping at nine o' clock the past couple of weeks.

[B]

What time do you get up in the morning? Early riser now?

[A]

Not really. 6:15, 6:30.

[B]

Okay.

[A]

But I wake up to A bunch of text messages. Every year I wake up to a bunch of text messages, and people like, why isn't he texting me back? It's like 9, 15, passed out.

[B]

Blame it on the sun. Okay, so what do we got coming?

[A]

All right, so. So, yeah, so what I was saying is that shows have been in a bear market big time.

[B]

I made the point on Twitter. This might have been the worst pop culture summer this century. No fantastic shows, no, like, groundbreaking movies, no huge sports moments. Like, the last two months, literally nothing has happened in pop culture besides the Royal Wedding.

[A]

Yeah, it was not a great summer for movies. I had fun, but it was definitely not great at all. Right.

[B]

There wasn't one movie. You go, oh, yes, classic weapons. All right. I can't put horror movies in a classic genre. That's just me.

[A]

If anybody watched Alien Earth, let me know how it is. I saw the first two episodes, and I haven't picked it back up. Not that I didn't like it. I just haven't. Haven't watched it yet.

[B]

All right, so didn't they, like, squeeze the juice dry on that yet? The alien stuff?

[A]

I. I didn't love the last one, Romulus, but I still. It's one of my favorite, favorite things. All right. Anyway, there's a new crime thriller from the mayor of East Town. The HBO original series follows an FBI agent, Mark Ruffalo, on a mission to end a string of violent robberies led by an unassuming family man, Tom Pelfrey. I don't know who that is. It's called Task, and I can't wait. Who's Tom Pelfrey?

[B]

Isn't he the guy from Ozark? I. There's also a new Ethan Hawk show coming to Hulu, so I'm. Yeah, you know.

[A]

Oh, was he the nephew? I don't recognize.

[B]

He's the brother. He's Laura Linney's brother, wasn't he? Yes, but more shows are coming. You know those.

[A]

Those help is on the way is what we're saying.

[B]

You know those articles that say, like, here's everything coming to these streaming networks this month, because every month it changes. I love those articles. I read those all the. And I come up with this. I want to watch that. I want that. All right. Jack Raines had this thing this morning on Young Money, and it talked about how young people aren't going to Burning man anymore. It's. It's only older people. And they say all the Bay Area zoomers have exchanged alcohol and ecstasy for lifting heavy and996 work schedules. So here's996. I'd never heard it before. So someone said the current vibe in San Francisco is for young people. No drinking, no drugs.996. Work from 9am to 9pm Six days a week, lift heavy, run far, marry early, track sleep, eat steak and eggs.

[A]

What is happening? I don't like this.

[B]

The996 thing is the biggest one that throws me is just if that's your whole life.

[A]

Wait, no. No drinking. No. What else?

[B]

Let's see. No drinking, no drugs, track your sleep, eat protein. I just think the optimization thing can be taken way, way too far. You still have to be a young person. Like, I feel like these young people are going to totally regret not living life.

[A]

This feels. Is this real? Is this real? I know, I'm sure this is happening in San Francisco. I believe it.

[B]

I mean, that's the thing. Maybe San Francisco isn't real life. And that's just. It's a. That's a place unto itself. But I do think young people, if they don't enjoy their lives, they're going to regret it someday when they have way more responsibilities.

[A]

All right, let me ask you this, Ben. In the year 2025, how come we can't get good self service? You know what I hear every time I'm on the phone or God forbid I try a video? Michael, Michael, Michael, you're breaking up. Michael, you're breaking up. And I'm like, I'm on the Cross Island Parkway. I'm in New York City.

[B]

That's in.

[A]

Why can't anybody hear me?

[B]

I don't know. Is it the AirPods or is it the cell service?

[A]

No, it's a cell service.

[B]

Okay, that's a good question.

[A]

I've been cleaning.

[B]

Shouldn't be a thing. Like, you know, in the old horror movies you used like your. You would try to start your car and it wouldn't turn over. But that doesn't exist anymore because cars just start.

[A]

By the way, turnover is a very old phrase. I was about to say that. I only learned what that meant when I started watching with closed captioning.

[B]

Right? Like you don't have to worry about that anymore. And that should be the thing with cell service now. Like that the whole you're breaking up should be a thing of the past.

[A]

Come on. How am I breaking up? It's 2025. Speaking of quality, Ben, paying out for quality. I'm paying out for quality quality socks. So thank you to somebody who emailed me.

[B]

You know, I saw this Email exchange in our inbox. And I wanted to. I should have roasted you on it. But it was the most middle aged thing I've ever seen. It was like this guy offering you socks, which socks you should get, and you writing them back and going, oh, my gosh, these socks are amazing. And I'm gonna. It was a whole email exchange about socks.

[A]

I immediately spent 300 on socks. Why I have no more socks. I threw out. As I'm prepping for the move, I threw out all my old socks and my socks. I have Under Armour slash Nike socks that are easily, I don't know, six years old. Like, there's no reason to be wearing socks that are six years old. Right.

[B]

Here's what I do. The thing I wouldn't. I don't spend up on like the, the really expensive socks because I feel like after two washes they don't feel expensive anymore. So it's new socks. So on Amazon I have a subscription every six months. I get a brand new pack of socks send to my mail. I throw the old ones out, I put the new ones in. New socks feel amazing.

[A]

Anyway, I wore a pair of socks, not like ankle socks, socks that go up to your calf or whatever. Not super high, but with a pair of shoes that have typically or historically graded on the back of my ankle. Guess what? Comfort. No blisters. Pay up for quality.

[B]

All right, well, that's good for future proof because there's a lot of walking that goes on there.

[A]

Yeah. So I feel very good.

[B]

You're not wearing your Jordans, I hope.

[A]

Very. I'm not bringing my Jordans. Very good about my new socks. What else, what else, what else? All right. This is very random and it's happens very rarely, but nevertheless, it always annoys me. Probably happens to me once every two months. You ever type and you look up and you've been in all caps for 30 seconds?

[B]

Yeah.

[A]

Is there, is, is there a way to just control Q uppercase select where you could just change it to lowercase.

[B]

It would be easy if it autocorrected for you. How do you. How weird do you think Walter Bloomberg is shouting in his own head as he's typing? Because everything he types is all uppercase.

[A]

But is he. I feel like he's pulling from someplace. Right? He's not actually typing.

[B]

I know he's not a real person. All right, so yesterday we were driving home, we tried to get one more day on the beach and then we had to drive home because my son had football practice. It was his first. I'M a very proud father. Because it was his first day they could hit each other in tackle football. Hearing the crunch of the pads.

[A]

He's not shy, right?

[B]

No, he's not shy, but it was funny. It's third and fourth grade and he's like one of the only third graders on the team. And I asked him, how did it go? He's like, oh, I totally trucked this kid. I'm like, well, how about you? He goes, oh, yeah, I got demolished. These guys were hitting me so hard. And I'm like, are you okay? You know. You didn't mind? Nah, it's fine. I got hit really hard. Okay, good. So we had to leave the beach and we had to drive him back to practice. So we had to go through the Burger King Drive through to get him some food before his practice. And we go into the Burger King drive through, there's a big van in front of us. And we pull up the pay and the van is in front of us waiting for their food. And the lady in the drive through window goes, I don't know if you want to pay for your food or not. We're like, what do you mean? She goes, the van ahead of you got $130 worth of food. It's like nine value meals. It's going to take a very long time to make. So you're going to sit here and wait forever. And we said, well, we're kind of in a time crunch. We have to get on the road. So we just left. Like, don't you think her response should have been, you know what, we're gonna sneak your meal in real quick here, give it to you and get. Let you get out of line.

[A]

Yeah.

[B]

Instead of telling us.

[A]

Yeah, right, yeah, do the right thing.

[B]

Thank you. Yeah, obviously I was gonna wait for that.

[A]

We did a ghost tour in Newport and I. I don't know why. In my head I thought it was like one of like these ghost walks where, like, you know, it's scary and people pop out at you like a Halloween spooked.

[B]

What was it? Old cemeteries?

[A]

It was just a girl telling stories about. I don't know, I wasn't listening. But it was nonsense. And she was like, if you take pictures, you might see like an orb or something like that. So, like, the boys were taking pictures like the whole time. Like, oh, I think I see somebody. Anyway, the point is this. There was three women on the tour. I'm gonna guess they were mid to upper 20s, 27 to 30 years old. Ish. And they were taking it seriously. And they were like, we better see something. And I wanted to. Like, I was so confused. I was like, what are you doing here? What are you actually doing? It was so bizarre.

[B]

But people will always fall for that. How many of those shows are there about ghost hunting?

[A]

I guess they were otherwise normal people. Like, they seemed like very normal people, but they were seriously looking for ghosts.

[B]

But there are people who totally believe.

[A]

In that stuff, I guess.

[B]

Okay. All right. Recommendations? I only got one this week.

[A]

Okay, go ahead.

[B]

So we rented Mission Impossible, Final Reckoning. Finally. We saw the previous one in the theater. And here's my take as the biggest Tom Cruise fan there is. I tell my son all the time, the best action star of all time. Obviously this movie didn't need to be made. Like, they could have ended it on a lot. The last one was great. I mean, there was good stunts in this, but it kind of felt like a farewell tour, I guess, for Tom Cruise, even though he might make another one. I guess the whole AI thing, being the bad guy, I feel like is gonna get so overdone in the next five to 10 years. And that just doesn't interest me at all. Having AI Right.

[A]

The story made no sense at all. Right. Like, it was hard to follow. I mean, there, I guess, like, it's. The storylines are sort of besides the point. But like in this one, it was so convoluted. I had no idea what was happening.

[B]

It just. It just to me felt like they kept extending the last movie when they could have just ended the movie easily at the end of the last one. It would have been a great send off. Like, listen, it was. It was entertaining and the stunts he does, obviously are amazing, but it is totally unnecessary. And I'm a Tom Cruise guy, as you know.

[A]

Yeah, agree. That's the right take. All right, I'm sorry in advance. I'm going to be annoying about audiobooks. I just am not going to like trying to convince you to listen, but I'm going to be talking about it, what I've listened to, because this is my podcast in Rhode island, because I'm an early riser. My kids sleep forever.

[B]

How late are we talking?

[A]

I came back to the hotel, so I don't know why. I woke up at like 5:30. So by 5:45 I'm out. And I especially, you know, I like to walk when I'm on, when I'm in new places. That's like my thing. So I walked out the hotel at about 550, got a Starbucks and I was just Walking and I got back to the hotel at 8:40 and they were still sleeping.

[B]

Wow.

[A]

My point is, I had a lovely morning. I'm walking for three hours. Listen to my audiobook. I had a great time. And because I am listening on 1.8 times speed, what's great about now, I have three different devices. Audible, Spotify and Libby. Spotify, you get 15 hours a month. Libby are free books. And Audible obviously is paid. So if Libby doesn't have something because you have to order it, and if I've used up all my Spotify, then I will buy books on audible. So with 1.8 times speed tycoon, for example, this is a giant book. I believe it's on my shelf. I never read it. It's 28 hours long, but at 1.8 times speed down to 15 hours. So guess what? I walked 3 hours on Saturday and Sunday. Whatever day it was, I'm almost done with the book.

[B]

See, you should be an Instagram influencer doing this. So Now I live three days and every one day. You just did.

[A]

Yeah, I 10x that shit. You're living one day a week. A day. I live four days a day. Anyway, all of these books that I've been meaning to get to, the power broker, the Lyndon Johnson stuff, that is.

[B]

True because some of those biographies, it's just you look at it and you go, oh my God.

[A]

You just say no. So there's an Eisenhower one that I want to read, a Truman one that I've been meaning to read. Guess what? Those all would have waited until my retirement. I never would have gotten to these books ever.

[B]

I've started probably like seven different biographies and made it through the first two chapters and just stopped them all.

[A]

So one of the books that I listened to and finished was a book called Tough Jews, which I guess popped up after I read the other one last week. And this was a book. Actually, somebody else bought me this book too. I never read it, never would read it, but it was great. It was a lot about like the early Jewish gangsters. And of course there was a lot of overlap with the Italian gangsters in the mafia. So in the book they mentioned the movie Once Upon a Time in America. And I said, you know what? I've tried to fire that movie up before. And I just, I watched him as, like, I'm not watching.

[B]

I don't even know what that is. What movie is that? I've never heard of it.

[A]

So Once Upon a Time in America, it's Sergio Leone. It's his last movie. Matter of fact, it's 1984 and it is once Upon a time. Listen to this cast. De Niro, James Wood. Joe Pesci has a small role. Jennifer Connelly, she was like 8 and she has a small role. Treat Williams. Who else is in here? Danny Aiello, William Forsythe, Burt Young. So the. The main stars are De Niro and James Wood.

[B]

I've never heard of this movie.

[A]

James Woods. You never heard of Once Upon a Time in America? You've definitely seen the poster where it's like the kids with the Manhattan Bridge in the back in the background that it's like the 1920s.

[B]

Okay, maybe I must have escaped me for some reason.

[A]

Okay, well, it's 3 hours and 47 minutes. And it is. It is a slog. I mean, there's whole parts that feel like it took me like, I don't know, five days to watch, but it felt like I watched a marathon. I felt like a sense of accomplishment at the end. But it is good. Good.

[B]

Not worth watching. Oh, it is. Okay.

[A]

No, it is good. Was it. Is it worth it? Yeah, probably not. I mean, three has a 47 minutes. My God. What else, what else, what else? All right, I believe that's it. Oh, wait. One. One last thing. There's a documentary on Netflix called Unknown Number the High School Catfish. Is this on your radar?

[B]

My wife watches all these. I don't really watch this stuff.

[A]

Ask. Ask her about this one.

[B]

Okay.

[A]

The reveal. I won't spoil anything. Is one of the craziest things I've ever seen. It is so mind bending. I can't stop thinking about it.

[B]

Is this more than one? One episode? More than one episode.

[A]

No, it's like. No, it's like an hour.

[B]

Okay, just. What's one thing?

[A]

It's one thing.

[B]

All right.

[A]

Anyway. All right, I think we're done. This felt like a long week. A great week. I had a great time. Got Sally's pizza on the way home. The New Haven, Connecticut pizza. Great stuff.

[B]

So you're saying that you have another time hack. You cut your audible time in half, but by going on vacation, you extended time, made time feel longer to you.

[A]

Yeah, it was time dilation. Totally.

[B]

Okay, everyone, come say hi to us at Future Proof.

[A]

Plus that, and I'm drinking onion juice with garlic cloves. Come on. I'm.

[B]

Yeah. I hope you have some gum. Chase it with a gum. Come say hi to us at Future Proof. We'll be around. Come to Live Animal Spirits. It'll be fun. See you then. And next week will be our live show. You'll be able to hear, right?

[A]

Yeah. Animal spirits@the compoundnews.com thanks for listening. I'll see you next time.

[B]

SA.