Is Debt Fueling the Rally? (EP. 471)

Summary

Animal Spirits Podcast — Episode 471: "Is Debt Fueling the Rally?"

Date: July 1, 2026
Hosts: Michael Batnick & Ben Carlson

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Episode Overview

In this lively episode, Michael and Ben dive deep into the current state of markets with a central focus: is rising leverage and debt fueling the 2026 stock market rally? They discuss global margin debt trends, concerns about leverage-induced volatility, distinctions between today's market expansion and past asset bubbles, and what broader participation means for the health of the bull market. They also touch on the resilience of the consumer, wealth inequality, the evolution of AI’s and crypto’s real-world impact, and various personal finance and lifestyle topics.

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Key Discussion Points and Insights

1. Opening Banter: Miami Vice and Summer Vibes

• The episode opens with an amusing discussion about how to properly drink a Miami Vice beach cocktail.
  • Ben: "I go just straw in whatever. I play the field as it lies, like Shooter McGavin said." (03:21)
  • Michael: "It looks prettier if you don't stir it. So that's the thing. It's all about the looks. And you gotta have a pineapple on top." (03:34)

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2. Leverage and Debt in the Stock Market

• Discussion triggered by recent stories about Taiwanese and South Korean investors using extreme leverage to participate in massive stock rallies.
  • Michael shares a quote from Jesse Livermore: "Nothing is new in the stock market. Everything that has happened before will happen again." (04:13)
• Margin debt’s relationship to market highs: It's rising in tandem with the market, not necessarily leading it.
  • Michael: "If you look at the history of the margin debt stuff, it just kind of follows the market…they're concurrent indicators, they're not leading indicators." (05:05)
• Historical context:
  • Margin debt up 54% YoY, compared to a 42% increase in the market. Margin debt has spiked like this only four times since 1997: 2000, 2007, 2021, and now 2026. (07:13)
• Concerns:
  • Ben: “I am concerned about leveraging the system…to like not at least be aware of what's going on is burying your head in the sand.” (06:57)
  • Both agree the risk isn’t an imminent crash, but "air pockets" and amplified single-stock volatility—e.g., 10-20% daily swings in names like Micron, TSMC.
  • Michael: "This is why those South Korean stocks and Taiwanese Taiwan semiconductor, they can be down 10% in a day, easily 20%...because of all this leverage." (08:18)
• New types of leverage: Options, futures, swaps, and other synthetic forms now augment traditional margin loans, making the actual leverage picture even murkier.
  • Ben: “FINRA margin debt is boomer margin debt...There are all sorts of instruments that do not show up in this chart.” (08:34)
• Interest rates haven’t stopped the leveraging trend:
  • Michael: "Interest rates matter way less than people think because rates have been going higher and people are still borrowing money." (09:46)
  • Ben: “Nobody cares about the annualized interest expense when you're trying to make 20% in a day, who cares?” (10:08)

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3. Market Breadth and Participation

• The rally is broadening: 67% of Russell 2000 stocks up YTD, with 900 names up 20% or more. (11:52)
  • Michael: “This is a big time widening out of the market...pretty good news for a bull market.”
  • Ben: “I would agree.”
• Not a narrow rally anymore; small caps, transports, banks, and industrials are joining in.
  • Ben: "This is an everything rally x mag 7." (19:00)
  • Michael: “If you just look inside the market...holy shit, is this bullish?” (19:03)

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4. Single-Stock Volatility and Sector Rotations

• Apple’s price reaction to rising memory costs and earnings divergence; huge cap swings between tech giants and memory suppliers on the same day. (13:13-14:38)
  • Ben: “Apple’s raising prices...I would have thought the demand...is inelastic.”
  • Michael: “Doesn’t it show that maybe Apple doesn’t have as much power as people thought?” (13:28)
• Questions about “hyperscalers” like Meta, Microsoft, Amazon investing heavily and seeing their free cash flows evaporate—how long can they stick to this strategy before investor or employee pressure forces a change? (14:43)

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5. Momentum Investing: Hard, but Rational

• Michael confesses he can't personally hold individual momentum stocks without a rules-based strategy:
  • "As long as it's rules based I can stick with it better. ... I would never be able to put my own money into these individual stocks and stick with them." (16:51)
• Ben: “Micron's earnings since January 2025 are up 1400%. The stock is up 1400%. It's rational.” (17:23)

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6. Bubble Talk: Are We in One?

• The hosts push back on the "bubble" narrative:
  • Ben’s bubble test: “The way that I think about a bubble is...there has to be...multiples that investors are putting on stocks...there is no universe in which the stocks can go into the fundamental the valuations...they fall short.” (20:17)
  • Michael: “Definition was no reasonable future outcome can justify current prices. That's a bubble.” (21:28)
• Both agree: current valuations, even for AI/memory stocks, appear justified by earnings (Nvidia trading at 24x fwd earnings). Not a 1929/Dotcom-type bubble yet. (21:52-22:44)

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7. The Dollar, Global Debt, and Market Concentration

• Debunking the “end of the dollar” narrative: No currency is positioned to replace the dollar in global reserves—89% of FX volume is still in dollars. (23:49)
  • Michael: “You may have your problems with the debt and the deficits in this country. I get it. It's just as bad everywhere else.” (24:08)
• Market concentration: The U.S. market is less concentrated than most peers—and the risk has been overstated for a decade.
  • Ben: “If you're still worried about it, you just have to...play the field as it lies. This is what it is.” (25:12)
• Breadth indicators often misunderstood or irrelevant now due to structural shifts and the rise of mega-caps. Many historical breadth relationships no longer apply. (27:40)

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8. AI and Crypto: Economic Impact & Hype vs. Reality

• AI is generating significant revenue ($110BN last year, $175BN annualized), but it’s tough to contextualize if that’s sufficient ROI. (44:27)
• Firms that adopt AI have grown headcount 10% faster—evidence that, at least so far, AI is a job creator, not destroyer. (45:34)
  • Michael: “I think this, this is a positive sign for what I think is going to happen, that it's going to. AI is going to lead to more work.” (46:27)
• Crypto update:
  • Real-world asset tokenization hits $32BN and is growing rapidly. (51:22)
  • Michael: “Oh, the fact that $2 trillion was created from thin air is unbelievable.” (52:15)
  • Both agree: the sector is both overhyped and a genuinely new asset class.

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9. Personal Finance, Wealth, and Lifestyle

• Wealth inequality: UHNWI (ultra high net worth individuals) population soars, exacerbating wealth gaps; Michael predicts a greater than 50% chance of a socialist president in 10 years. (40:06)
• Middle/lower income households: Surprisingly, lower-income consumer spending and savings are rising in 2026, bucking the usual K-shaped narrative. (35:12-36:36)
  • Ben: “It is what it is. It's good stuff.” (37:41)
• Judging financial decisions: On buying a new house at a higher rate or leasing vs. buying a car—sometimes conventional wisdom and behavioral studies don't fit individual circumstances.
  • Ben: “I did this for my family and for my life…Honestly, if it's going to make your life better, do it.” (53:55)
• Vacation vs. Investing: Mocking the idea that skipping vacations for higher retirement balances is wise—focus on enjoying life and making memories. (55:19)
• Working from home: Reflections on how WFH changes family dynamics and the parent-child relationship.
  • Ben: “I feel like I am giving my kids, like, I don't know, 8% of my attention because I'm with them literally all day every day now.” (70:11)
  • Michael: “The way that we parent our kids is totally different from the way our parents parented us…but their parents did it different to them too, so it changes.” (71:41)

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10. Miscellaneous and Recommendations

• Recurring themes:
  • “Remember when” is not always a useless conversation. Revisiting stories about loved ones, especially those lost, is cathartic and valuable. (61:17)
  • Leasing vs. buying cars: New car features and safety improvements make leasing more compelling in the modern era. (57:52)
  • Market share of pizzas is down; more food delivery options (e.g., DoorDash) are impacting Domino's and pizza generally. (59:43)
• Entertainment Picks:
  • The Rewatchables podcast (63:47)
  • HotD (House of the Dragon) and Alien movie marathons (65:05)
  • The Bear on FX ("like The Hangover—can't recreate lightning in a bottle") (68:34)

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Notable Quotes (with Timestamps)

• On Leverage:

  • Michael: "There is nothing new under the sun." (04:17)
  • Ben: "I am concerned about leveraging the system. ... I'm not concerned to the point that I think like oh no, go to cash. But I think to not at least be aware is burying your head in the sand." (06:57)

• On Bubble Worries:

  • Ben: "The market is acting very rationally as insane as it seems..." (17:19)
  • Michael: "Definition was no reasonable future outcome can justify current prices. That's a bubble." (21:28)

• On Market Breadth:

  • Michael: "This is an everything rally x mag 7." (19:00)
  • Ben: "If you step aside from the circus, push the leverage conversation to the back burner for a second...you would say, holy shit, is this bullish?" (19:03)

• On AI Adoption:

  • Michael: "AI is going to lead to more work." (46:17)

• On Personal Finance Decisions:

  • Ben: "If it doesn't make financial sense to the point where...you're underwater on your mortgage payments, that's a [problem]...but if it makes you and your family happier, that's fine." (53:43)

• On Changing Parenting Styles:

  • Ben: "I feel like I am giving my kids, like, I don't know, 8% of my attention because I'm with them literally all day every day now." (70:11)
  • Michael: "The way that we parent our kids is totally different from the way our parents parented us." (71:41)

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Key Timestamps for Important Segments

| Time | Segment | |------|----------------------------------------------------------------------------------| | 03:48–10:44 | Leverage, Margin Debt, and Market Risk Discussion | | 11:52–13:54 | Market Breadth & Rally Broadening | | 13:54–16:27 | Tech Sector Volatility & Hyperscaler Spending | | 19:36–22:56 | Is This a Bubble? Debating Classic Signs | | 23:06–26:46 | De-Dollarization & Market Concentration Myths | | 30:27–34:46 | Gold, Inflation & Labor Market Sentiment | | 35:12–38:17 | Consumer Data: Surprising Strength for Lower-Income Households | | 40:06–41:24 | Wealth Inequality, Socialism, and Advisor Anecdotes | | 44:27–46:46 | AI Economic Impact, Job Creation, and Company Performance | | 51:22–52:30 | Crypto: Tokenization, Real-World Impact, and Asset Class Evolution | | 53:01–54:16 | House/Mortgage Trade-offs & Personal Finance Psychology | | 55:19–56:27 | Vacations vs. Investing: Satirical Takes | | 57:19–58:59 | Leasing vs. Buying Cars: Modern Justifications | | 59:43–61:15 | Pizza Market Share Decline & Food Delivery Trends | | 61:17–62:40 | “Remember When” — Grief, Reminiscence, and Value of Nostalgia | | 63:47–69:10 | Media & Entertainment Recommendations | | 69:10–71:49 | WFH, Family Dynamics, and Parenting Reflections |

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Tone & Style

• Conversational, humorous, and accessible—Michael and Ben regularly slip in jokes, pop culture, and personal anecdotes while breaking down complex market concepts.
• Willingness to revisit their own biases and past predictions, open to being proven wrong, and often self-deprecating.

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Summary for New Listeners

If you missed this episode, you’ll come away with a nuanced understanding of why today’s market isn’t necessarily a bubble, the unique kind of volatility leverage brings, and why breadth and participation matter. The hosts push back on doom narratives about dollar decline and wealth concentration fears, encourage evidence-based thinking (with some skepticism of market myths), and share fresh data showing surprising consumer and lower-income resilience. There are detours into personal finance, lifestyle debates, and media picks—always delivered with relatable candor and wit.

Transcript

[Michael Batnik]

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[Ben Carlson]

Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky and let's be real. Lots of firms throw a couple fleshy funds your way and call it a day. But not Vanguard. Lots of firms love to highlight their star portfolio managers like it's all about that one brilliant mind making the magic happen. Vanguard's philosophy is different. They believe the best active strategies shouldn't be locked away with one person, they should be shared across the team. That way, every client benefits from the collective brain power, not just one individual's take. So if you're looking to give your clients consistent results year in and year out, go see the record for [e-mail] audio that's vanguard.com audio all investing is subject to risk. Vanguard Marketing Corporation Distributor.

[Podcast Narrator]

Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. 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.

[Ben Carlson]

Welcome to Animal Spirits with Michael and Ben. Got an email subject line Miami Vice Drinking technique and I want to open the show as we head into the warm summer peak Miami Vice season. Somebody wrote hey there, I'm at the shore on vacation. I think to myself, what's a proper beach drink? I of course think Back to the many podcasts where Ben is enthusiastically pushing the Miami Vice. They bring me a drink that has the colada on the top, on the bottom, and the daiquiri on the top. So what is the proper way to drink this thing? Am I supposed to stir and mix it all together, use a straw to go deep and suck the colada, then rise up and drink the daiquiri? No straw. Ben, what say you?

[Michael Batnik]

That's great, because I read this one and I thought, man, I have to think really deeply about this because there's one place in Marco island that does a side by side. I don't know. I don't know if they put a little cardboard divider in there and they do the peony clod on one side.

[Ben Carlson]

And it's got to be a side by side machine, though, that poison both at the same time.

[Michael Batnik]

Oh, there you go. That's. That make more sense. I don't stir.

[Ben Carlson]

They thought they put a piece of cardboard in every drink.

[Michael Batnik]

Your way probably makes more sense. I don't really stir. I just. I drink as it is. And the best people know how to do a swirl or something to kind of blend them the right way. Anyone that's made a Slurpee with multiple flavors knows how to do that.

[Ben Carlson]

I go just straw in whatever. I play the field as it lies, like Shooter McGavin said. But it's usually the one than the other. Although I'm not mad if somebody wants to stir it up like that. Probably works just as well.

[Michael Batnik]

Yeah, I've never done that, but it probably would make sense. But it looks prettier if you don't stir it. So that's the thing. It's all about the looks. And you gotta have a pineapple on top. And obviously the floater.

[Ben Carlson]

The floater.

[Michael Batnik]

All right, we have a ton to get to today. I'm excited about the show today. We have a million things to talk about.

[Ben Carlson]

48 pages in the dock.

[Michael Batnik]

Is it all right? This is gonna be a Tarantino movie, essentially. All right, let's talk about leverage. This was a story in Bloomberg. FOMO really got me. Taiwanese go deep into debt to amp 100% stock rally. So there's all these stories about South Korea and Taiwan. And this is the Jesse Livermore quote. I'm going to butcher it. But he says nothing is new in the stock market. Everything that has happened before will happen again. And what he means is, he means there is nothing.

[Ben Carlson]

There is nothing new under the sun.

[Michael Batnik]

Right.

[Ben Carlson]

I believe was a quote.

[Michael Batnik]

Andy Chang is 26, unemployed, and with the help of a little borrowed money. The proud owner of $60,000 worth of Taiwanese tech stocks. And in many ways he speaks for the entire island of 23 million people when he doles out the following advice. Buy any stock and you will make money. Okay, look at this chart they have in here of stock leverage in Taiwan that has just gone absolutely vertical. Right. Many of the island's brokerages have hit their internal limits on certain types of loans, forcing them to demand more collateral and bump up their rates, according to people familiar with the matter. The brokerages are saying, okay, this is getting a little scary here. Similar in South Korea and Taiwan is now the fifth largest stock market in the world. Bigger than India, bigger than Canada, bigger than the uk which is just mind boggling. I'm sure you could do a, have Claude do some sort of. This is the population, this is the land mass, this is the, all that stuff. So that's in Taiwan and South Korea I think is doing something similar. Then yesterday in the Wall Street Journal, the trillion dollar borrowing binge lifting the stock market to risky heights. And they highlight the fact that there's a ton more money in leveraged ETFs, which we've talked about before, that just keeps going up and up and up because now you have single stock ETFs, double, triple, every new thematic has to have a leveraged version. Now my original thing, we talked about this in the Research Channel yesterday, we had a lively debate and I said, listen, if you look at the history of the margin debt stuff, it just kind of follows the market. Jake, he used to write, he used to actually blog at economic. I don't think he does anymore. Early days of financial blogosphere, he said, look it, if you put a chart of margin debt in the stock market, they're concurrent indicators, they're not leading indicators. And if you do it as a percentage of the index, it's kind of similar over time.

[Ben Carlson]

This is from 2015. We're not in Kansas anymore, 2015.

[Michael Batnik]

But the point was those relationships still hold. So I updated the data. The market goes higher, margin debt goes higher. Right. And as a percentage of the market cap, it's still very similar. You said, I'm actually kind of worried about this.

[Ben Carlson]

Yeah, I think this is a dated indicator. So in 2015 people were, Jake wrote this because it was like non stop margin debt stuff. And I agree at the time it made a lot of sense to normalize things because at that time in 2015, which is a million stock market years ago, margin debt, traditional margin debt, was the way that people levered up their exposure.

[Michael Batnik]

Well the point was when the market hit its all time high, so does margin debt. So people saw margin debt hits new highs and people go oh no, what does that mean?

[Ben Carlson]

I am concerned about leveraging the system. I'm not concerned to the point that I think like oh no, go to cash. But I think to like not at least be aware of what's going on is put burying your head in the sand. So I had chart, can make a chart showing what is the, what is the year over year FINRA margin debt change and it's up 54% year over year. Which to Ben's point, well yeah, the stock market's up 42% over year. Like it makes sense directionally that they move together and they do. The thing is the last one, this is now the fourth time that margin debt since 1997 has risen by 50% or more year over year. And let me tell you the other previous times. 2000-2007-2021-2026.

[Michael Batnik]

All right, we need to have the COVID the thumbnail for this YouTube video be fire behind us because that is. Yeah, here's the, here's where my worry would be. My worry would not be like oh gosh, this is a generational top because of all this debt. My worry would be there's going to be air pockets in the market.

[Ben Carlson]

You saw them, you saw them last week and even yesterday. I think Micron closed down 8%, ended up the day 1%. You're seeing a lot of. Yeah, you're see I think Micron has been up or down 5% or more on the day for the last seven sessions in a row. The tail is starting to wag the dog. This is 100% being pushed around by leverage.

[Michael Batnik]

This is why those South Korean stocks and Taiwanese Taiwan semiconductor, they can be down 10% in a day, easily 20% in a day potentially because of all this leverage. That's the worry is that you're going to get an air pocket and then selling begets selling. That's what, that's what happens.

[Ben Carlson]

So FINRA margin debt is boomer margin debt. That doesn't show. No, seriously, that, that, that is the way that people used to lever up their portfolios back in the day. And there are all sorts of instruments that do not show up in this chart. So swaps for example, that's how Archegos blew up. Nobody knew because it's like there's no record of this. Options, options and futures, these. So I think a lot of These double things run out. Swaps. That's not in the system. Now, we saw the chart. What is it, $200 billion worth of money in there. That's. That's not nothing. Box spreads and other synthetic lending is not in here. Now, obviously that impacts a lot of wealth management clients. It's a little bit sort of. It's a different type of leverage because, yes, people are levering up their portfolios, but it's not to buy more stocks.

[Michael Batnik]

That's the thing. Not all. Not all leverage is being used. Sometimes it's used for a house down payment, sometimes it's used for renovation. It doesn't always have to go back into the market.

[Ben Carlson]

But. Yes, but to be very clear, let's like, not mince words. There is a lot of demand for leverage. There is a lot of borrowing in the system. And yes, it does have my intention. I am a little bit worried about it.

[Michael Batnik]

This is one of the reasons, though, that I've always said on this show, and this doesn't cover. It's not a blanket statement, but interest rates matter way less than people think because rates have been going higher and people are still borrowing money. So from this stuff. So that. That's surprising to me, that rates keep going up and people don't care. And this is what happens, though, in a bull market.

[Ben Carlson]

Well, yeah.

[Michael Batnik]

Who's taking more and more and more risk?

[Ben Carlson]

Nobody cares. Nobody cares about the annualized interest expense when you're trying to make 20% in a day, who cares? So there is so much demand for borrowing that then the brokers only have so much money that they're willing to loan out. And there is a cost to this capital. And right now, costs are skyrocketing.

[Michael Batnik]

But there's this idea that the Fed can control people's behaviors through interest rates. And I just don't believe it. Behavior matters more than rates. Until rates get to a certain point.

[Ben Carlson]

Rates matter in the sense that they slow down the economy, they slow down growth, which eventually, not overnight, but definitely hits.

[Michael Batnik]

Yeah. Obviously going from 0 to 5. That had a huge impact, but not as much. But here's the thing. I would be more surprised if people weren't levering up right now, given where. Given that the way this cycle is playing out, of course this is happening. This is a boom, a huge boom. Of course it's happening.

[Ben Carlson]

Of course it's happening. Right. I don't think. I don't think anybody's surprised. Like, why are people taking out leverage? Well, because these stocks are going all papers up every day. Yeah, of course it makes sense. All right. Corey Hofstein tweeted this chart from. Who made this chart? I don't know. It says Bloomberg as compiled by Citadel Securities. Okay. The combination of concentrated positioning, growing buy side leverage demand and constrained balance sheet capacity has begun to tighten funding markets pushing a one month equity financing spreads to as high as 138 basis points above SOFR. Prime brokerage like hedge fund leverage does not show up as far as I know in finra margin debt. The chart that we were mentioning. So yeah, people are speculating their assholes off and can this, will this cause more volatility? You know, a micron coming down 27% in three days.

[Michael Batnik]

Single name volatility to me would be, it's, it's the risk of that is way bigger. It's been, it's just, it's growing. All right, so that, that's kind of, that's obviously something to worry about. It's not a, again, it's not a 1929 situation by any means, but it's, you're right, it's gotta be concerning at some point that we could see big air pockets from that. How about this for good news? Small caps this year, Russell 2000 as of the close on Monday was up 22.3% S&P up 7 and a half percent. This is a huge huge read. So I took all of the Russell 2000 stocks, downloaded them from Y charts, uploaded that to Claude. I said what's going on here? Why? What's going on with the, the stocks in the Russell 2000. Breadth, not concentration. 67% of the names are up year to date. Median return is over 15%. 900 stocks in the Russell 2000 are up 20% or more this year. So this is not just a handful of names and obviously with a, with an index that big. So this is, this is like, this is a big time widening out of the market. Again, I think pretty good news for a bull market.

[Ben Carlson]

I would agree. I would agree.

[Michael Batnik]

All right, look at, look at this chart from Luke Kawa. He did this last week. The day Apple announced in the morning on Bloomberg there was a story saying, hey, Apple's raising the prices of everything. Macs, iPads, iPhones, because memory is too expensive now.

[Ben Carlson]

So the reason I'm shocked that Apple fell 6% on the day because of that. Yeah, it's a big ass move. Why I would have thought that people think that the demand for these products is inelastic and who cares what the price is? It's not going to Impact sales.

[Michael Batnik]

Well, doesn't it show that maybe Apple doesn't have as much power as people thought? I don't know. But so he shows on this day last week, the memory producers SanDisk and Western Digital and SK Hynix and Samsung gained almost $500 billion in market cap. The same day, Apple, Microsoft, Meta, Amazon and Google lost $500 billion in microcap. It looks like a very clean transfer. This is a beautiful chart that he created here.

[Ben Carlson]

It's a great chart. Hold on a not so subtle. I mean this is not a footnote to that story. That was the same day that Micron reported earnings, right?

[Michael Batnik]

Micron was up 16% and the Apple

[Ben Carlson]

it would have been up 16% regardless of the Apple announcement.

[Michael Batnik]

But why did Micron have such good earnings? Because of the capex from the hyperscalers. My question is how long can they let this keep happening?

[Ben Carlson]

Who's they?

[Michael Batnik]

The hyperscalers saying we're going to lose and you're going to win and we're basically powering your win.

[Ben Carlson]

This is like the Portis five forces type stuff. These suppliers have all of the pricing power right now. What's Apple going to do? Make their own memory stuff slow their capex eventually.

[Michael Batnik]

Are they going to all live with 30% declines or 40% declines?

[Ben Carlson]

Apple's not even the ones spending the money.

[Michael Batnik]

I know it's. So this other Tracy Alloway chart went viral from Nomura showing that the hyperscaler free cash flow projections is essentially going from, I don't know, 700 billion to effectively zero over the next 12 months. And this is Amazon, Microsoft, Google, Mata and Oracle. I just think we're getting to the point where we're testing the mettle of the intestinal fortitude of these CEOs to stick with this. They keep saying no, we don't care. The bigger risk is backing down. I just think it's really interesting. If we're going to power these memory producers higher and our stock price is going to fall, how long can they handle that for? From a human perspective, don't you think the employees start going hey, what our stocks down 40%. This stinks. Now on the other hand, you being a stock guy, what would you rather have right now? If you're buying stocks today for the next, call it three years, would you rather own Meta, Netflix and Microsoft or SanDisk, Western Digital Micron, what would you buy today?

[Ben Carlson]

It's not even close. The hyperscalers.

[Michael Batnik]

That would be the the way that I'm sure most people.

[Ben Carlson]

Micron's up 1,500% in the last year and a half. Justified. Microsoft has underperformed the S and P since 2019 and it's down 35% from the highs. Yeah. This is not a hard question now for the next three months, six months. Yeah, probably. Probably the memory stocks and this, this

[Michael Batnik]

is why owning a momentum portfolio is so hard. Because the momentum answer would be no. You double down on these stocks that are continuing to go up. That's why it's hard to do. It's probably why it works too. For release of time. I bought Microsoft yesterday as a guy who keeps retiring from. I bought Microsoft and Netflix and I said I'm going to close my eyes and look at it again in five years.

[Ben Carlson]

We own, we own SanDisk. We own a lot of these stocks in our Porterhouse Momentum strategy.

[Michael Batnik]

Yeah. Western Digital.

[Ben Carlson]

We bought SanDisk at like 300 bucks and then a few months later we bought more at 625. And I was like what in the what? And. But that's part of the reason why momentum works. It does what the humans can never. I would never do that. Are you kidding me? If I bought SanDisk at 300, I'm selling it at 370 if I'm lucky.

[Michael Batnik]

Right. That's why to me I have to. A few people have asked questions about the strategy like why do you do this if you're like a boglehead person? I will never buy these stocks in my life. I need to have rules based. As long as it's rules based I can stick with it better. Here's the thing. I would never be able to put my own money into these individual stocks and stick with them. But if it's a rules based thing and it's a process based and it's the factory you're investing in, not necessarily the companies that like that to me is emotionally easier to invest in.

[Ben Carlson]

Yeah. 100%.

[Michael Batnik]

Some people can handle the individual stocks. I can't.

[Ben Carlson]

So I think that, I think that the market is acting very rationally as insane as it seems with the memory stocks. Micron's earnings since January 2025 are up 1400%. The stock is up 1400%. It's rational. The free cash flow projections for these hyperscalers going to zero. The companies are getting re rated and now traded a forward pe the same as the market. Rational everything.

[Michael Batnik]

The idea when this started was these hyperscalers are spending money and they're just going to be the biggest monopoly in history.

[Ben Carlson]

Yeah.

[Michael Batnik]

And it's not working out like that. That is A surprising outcome.

[Ben Carlson]

It's so awesome to see the narratives changing over the years, because prior to the AI era, the question was, what can unseat Google? Like, there's not going to be another search engine.

[Michael Batnik]

Yeah, there's not Google. Did they unseat themselves? Maybe.

[Ben Carlson]

But yeah, like we were thinking, like, what's. Which one of these stocks would not be in the Mag 7. And in no world could we have foreseen a Universe where they're $300 billion worth of free cash flow goes to zero. Nobody could have predicted that. So here we are in 2026, where everything is outperforming the Mag 7. Look at this chart that, that Matt made. We're looking at small value, small growth, mid growth, mid value. Everything really divided by the Mag 7. And everything is outperforming it. To me, this is such a healthy bull market.

[Michael Batnik]

This is an everything rally x mag 7.

[Ben Carlson]

And it's everything you want to see. So if you step aside from the circus, push the leverage conversation to the. To the back burner for a second, and you say, well, what's rallying? Transports, industrials, small caps, regional banks. If you are purely a technician and you don't know anything about the fundamental story of what's happening, forget everything. Just look inside the market. You would say, holy shit, is this bullish?

[Michael Batnik]

Right? It's crazy.

[Ben Carlson]

All right. We were. We were on Derek Thompson's podcast.

[Michael Batnik]

Yeah. Derek does a good job of synthesizing a lot of the stuff that we're talking about, the biggest stories. And then we talk about it, and he holds our feet to the fire a little bit. And he said at the end, like, listen, stop doing the both sides thing. What do you think right now? Is this a bubble? And we both had the same answer.

[Ben Carlson]

We both said, no. Here's. Here's why I didn't say this to Derek, but I've said it before, and I'll say it again. Can memory stocks fall 50%? Yes. Will they? Yeah, probably. They probably will at some point in time. Will that have proven it's a bubble? No. The way that I think about a bubble is there is. It's a cocktail of things. You need to have all these things, speculation being the first obvious one. Is there speculation? Duh. Yes, of course there is. But to me, it's about the fundamental valuations. Like, there has to be. That is the underpinning of a bubble in which the multiples that investors are putting on stocks. There is no. There is no universe in which the stocks can go into the fundamental the valuations, like, you roll the dice a thousand times and a thousand times they fall short. When Nvidia is training at 24 times forward earnings. Is that expensive? Yeah, fine. I don't. Whatever. But is it at a bubble? Is the market in a bubble? Look what the market is doing to hype the hyperscalers. It's deboubling them. It's saying, no, you're, we don't like this. We're gonna, we're gonna re, we're gonna re. Rate you lower. So I don't, I think that this, we, we, we can get to a bubble. You know, like, we can debate about whether we will enter a bubble, but are we in a bubble today that's going to burst and fall 80% to take everything down with it? I don't really see it. Even though, even though I'm not blind, I see a lot.

[Michael Batnik]

Definition was no reasonable future outcome can justify current prices. That's a bubble. I would think it would have to. Like, could we.

[Ben Carlson]

That's the door. That's the dorky academic way of saying what I just said.

[Michael Batnik]

It is, yeah. Yes. But, so my definition is, will the NASDAQ 100 fall 50% or more? To me, that would prove this was a bubble. And I don't think that the market is going to allow that kind of buying opportunity with these stocks and this opportunity. That's why I think this is not a bubble.

[Ben Carlson]

Well, then that's going to fall 50%.

[Michael Batnik]

Yes. I think if that happens, that, yes, this was a bubble. If the Nasdaq falls 30%, we get a bear market. I don't think that constitutes a bubble. No. What about 40 40s, gray area? I think it's got to be 50 for it to be a really, like all the bubbles that people are putting this in the same classes, the dot com, the railroad, all these things. This has to be 50% if that's going to be in that class of bubble.

[Ben Carlson]

And 50 is like light, like the

[Michael Batnik]

dot com was 80.

[Ben Carlson]

Fell 80. Yeah.

[Michael Batnik]

Yes.

[Ben Carlson]

So if, if, if it falls 80%, the world will look a lot different than it does today.

[Michael Batnik]

I just keep seeing. I know, I know. You could say, hey, listen, these earnings numbers are just, they're, they're going to go away because all it is is the, the hyperscalers taking all that free cash flow and it's, and it's going into earnings of other companies. That's a. I think that could be a fair argument if you wanted to make it.

[Ben Carlson]

Yeah, but they're all saying the Same thing. And I know they, I guess they can all change their mind together. But even on Micron's call they said, we thought that this was going to go through the end of 2026. Now we see it going through the end of 2027.

[Michael Batnik]

Right. The demand, are they all wrong?

[Ben Carlson]

Like are these hyperscalers going to rug the entire stock market? I don't think so.

[Michael Batnik]

I don't either. I'm just saying it could happen.

[Ben Carlson]

Anything could happen.

[Michael Batnik]

Right? Okay, so remember the whole debasement idea and the end of the dollar. We talked about this Bloomberg story a little bit with Alex Morris. He's from FM Investment is going to come on soon. But Michael Semblas and his latest piece had all these charts and it's funny because people keep saying that the dollar's ending and no one wants to invest in the US anymore. And he's saying, look at all the government debt data. Places like China are worse than us. So if you think that the, the dollar is going away, give me a good something that's going to step in. Guess what? It's not crypto. It's not the renminbi. It's not one of these other currencies. What else is going to replace the dollar? If the dollar is going to fall from its status, reserve status.

[Ben Carlson]

That's the thing.

[Michael Batnik]

There's nothing. There's no replacement. He says it's 89% of FX transaction volume right now. 89%. You may have your problems with the debt and the deficits in this country. I get it. It's just as bad everywhere else. That's the problem. Governments around the world are like the hyperscalers. They all went in this together. This decade, everyone increased their debt by an insane amount.

[Ben Carlson]

This was the mic drop, this piece.

[Michael Batnik]

Right. Sorry, it's not happening. You can scare people with all your debasement stuff and dollars and deficits and this is the end of the world and Roma's falling. It's a great story. It's not happening. Sorry. Try again next time. Oh, he had this really good chart in here too of how the US is at the lower end of concentration by country. So the only stock markets that have lower concentration in their top 10 companies than the US is Japan and India. Everywhere else has much higher concentration. Canada, the uk, France, like these, their stock markets are all more highly concentrated than the us. I think this whole concentration worry for the last really 10 years or so, it really started like 10 years ago. I wrote my first blog post in 2017 about people worried about stock Market concentration. I really think it's been one of the dumbest worries about risks that we've had. This is just the way the stock market is.

[Ben Carlson]

I understood the risk and the, the worry. I think that if you're still worried about it, you just have to. I'm gonna another happy the play the field as it lies. This is what it is. I forget where I pulled this chart but the I think this from John Authors actually Bloomberg it's global as we've said a million times. They show the average market cap of the top 20 stocks in the MSCI All Country World Index. It's now 60 times bigger than the average stock of the remaining 2500 stocks. And this doesn't, this doesn't look like a cyclical or a, this is like a structural change in the index in the world. Right. We, we all know like the, the balance accrues to the winners. I so I asked chart kid to recreate something similar. For the past five years we've been looking at the MAG7 as a percentage of the market cap. And by the way I saw a chart. You know. You know Goldman Sachs is a chart mag 7 percentage of earnings, percentage of market cap. And they've of course they've gone up into the right together. The market cap has outstripped the earnings a little bit. That gap is now completely closed. So there are 38 whatever percent of the the index and they're 38 of the earnings. All right. Anyway so if we zoom out because now there are a lot of, of gigantic stocks. Micron is a trillion doll stock Broadcrome like there are a lot of gigantic stocks. It's no longer the max seven. So I asked Matt to look at the top 25%. I'm sorry the top 25 stocks.

[Michael Batnik]

Right. Broaden the universe out a little bit.

[Ben Carlson]

So look past the MAG7. Let's go to the top 25. In 2017 for example, the top 25 stocks were roughly 40% of the market. They're now 54%.

[Michael Batnik]

And I'm guessing there, there's five of them that are the same maybe since 2007.

[Ben Carlson]

If this were to return to 40% I would think it would have to be because they're falling. Not because the rest of the world not because the, the 475 is like growing that much.

[Michael Batnik]

Right. The concentration usually goes down in a big bare market. Right. All right.

[Ben Carlson]

So because of the concentration all of the breadth data is now is, is permanently busted. There are, there is weird things happening inside the market where this data Point like oh, this has never happened since.

[Michael Batnik]

Blah blah, blah. Explain breadth for the, the civilians out

[Ben Carlson]

there does not matter anymore. So The S&P 500 was up 97 basis points. Only 140 stocks were up. That would be weak breadth. It's you, it's being led by fewer, fewer stocks. You want broad participation.

[Michael Batnik]

People look at a ratio of advancing stocks to declining stocks to know what you want.

[Ben Carlson]

You want the advanced decline line to keep going up to confirm the rally. All right, so for. So Kevin Gordon tweeted the third straight day with the S&P 500 declining, yet the advanced decline spread remaining positive. Bespoke has a couple of charts in this showing the rolling number of days with price and breadth in opposite direction. So price is up and more than half of the index is down.

[Michael Batnik]

So that means that the Mag 7 is down but the rest of the stocks are up essentially.

[Ben Carlson]

Basically. Or, or at this point it's not just that. It could just be like the software names because the software names are now big enough where they could power the index higher with negative breath and vice versa.

[Michael Batnik]

Right, so you're a lot of these historical charts, they're busted. They're going to need a lot of context.

[Ben Carlson]

They're busted, they're just busted. So they show the, they show rolling 50 day periods, 120 day periods and 200 day periods. And we've never seen anything like what is happening now. So any like historical data on this just is completely useless. Another chart that to me really epitomizes what sort of weird market environment we're in. Negative beta. This is from UBS. They have a chart that shows the largest 1000 US companies by market cap and the number of stocks with a negative beta to the S P500. I don't know if this is like 30 day periods or whatever they're using. Oh, here it is. 252 day. So a negative beta means that stocks tend to go down when the index goes up. That is bizarre. And prior to 2025 the line, there was no line. It like happened like a few times where 10 stocks would have this like 10 and now it's 108. All right, so the previous record looked to be about 10. I'm just eyeballing it, maybe even less. And now it's 108. Now that is a combination of the energy stocks and the war in Iran when there was peace talks and crude oil fell 9% and energy stocks fell and the index went up. So there's that baked into it. And of course there's all of the semiconductor trades, all of the AI stuff, all of the hyperscaler stuff. So the market and breadth dynamics look very, very.

[Michael Batnik]

The 2020s have broken a lot of historical relationships in terms of economic data, economic charts, stock market data.

[Ben Carlson]

It's a brave new world. We, we, we, we should have covered this chart earlier when we were talking about the debasement trade. But this is my favorite chart that SESS made. We've seen a lot of charts showing central banks gold allocation as a percent of their total cash reserves.

[Michael Batnik]

Right. People have been saying that's the reason gold has been going up for so many years. Because of central banks buying it.

[Ben Carlson]

Exactly. And is that part of the story? I, I suppose. But looking at this chart and I don't know if there's like a, a start date that's, that's moving this, but Michael shows the actual gold shares of world FX reserves again up into the Right. But he makes the astute observation it's a price thing. Yeah. When gold goes from 2000 to 5500, of course it's gonna be a bigger size of the pie. But are they actually buying gold to the extent that these charts suggest? No. So he shows if you assume the actual holdings and no change in gold prices March 2009, they have less than they did in 2009.

[Michael Batnik]

Interesting. So gold right now is in a 25% drawdown. So that means that that percentage has obviously gone down because the price has gone down. Silver is down 50% from the total from the high.

[Ben Carlson]

Pretty wild unwind. Last thing on the on the market stuff and then we'll move on a couple of good charts from torson Slack. He's showing earnings growth converging between the Max 7 and the S&P 493. So in 2023, the Mag 7 grew 34. The S, the 493 was down 3%. Of course, that was well documented. Right. Like that's all we were talking about in 2023 because it was the reality that the entire mark was being led by the 490, by the, by the Max 7. That persisted in 2025, 23 and 11. But in 2027, analysts are expecting 19% growth for the Mag 7 and 15% for the 493, which would be a wonderful development.

[Michael Batnik]

So this would be, that would be three years in a row of double digit earnings growth for the 493. Yeah, that's pretty good.

[Ben Carlson]

Pretty good. All right. One final thing on Nvidia is cheap and I'm going to use air quotes on Nvidia's cheap. If somebody is listening and they were yelling through the screen, michael, stop saying Nvidia is cheap. I don't care that it's trading at 24 times forward earnings because we've actually. We did this a couple of months ago, a couple weeks ago. It can have a premium multiple because it's too big. It wouldn't make sense. It would swallow the market. That's fair. I would accept that rebuttal. So Nvidia has a larger market cap than Canada, than the UK Then France, than Germany, and then Italy. So maybe we're just bumping up against the laws of how big a company can.

[Michael Batnik]

Can realistically get anyone in your life who doesn't know how to pronounce Nvidia. Everyone has that person in their life.

[Ben Carlson]

Yeah. A lot of people say Nvidia.

[Michael Batnik]

Yes.

[Ben Carlson]

Why don't market professionals say Nvidia? Right.

[Michael Batnik]

It's like someone who says in such a bolt way, everyone has that person in their life. They just can't get the pronunciation. I have those words too.

[Ben Carlson]

Yeah, you say. We all have them. You say dram.

[Michael Batnik]

Oh, oh, it's dram.

[Ben Carlson]

It's dram. Okay, but we all have those things.

[Michael Batnik]

That's a specific use case. But yeah.

[Podcast Narrator]

Yeah.

[Ben Carlson]

All right. Okay. Paychecks reported last week. I would think that paychecks is a pretty good read on the state of the labor market. Would you agree? Yeah, this is from the CEO. I would say the macro environment, despite all the potential challenges that we have going on globally around us, has been stable. No signs of recession. In fact, if you look at our index, the last several reports have actually shown an increase in index under 50. We continue to see good growth. Lowe's, our core customer, is a homeowner.

[Michael Batnik]

Wait, there's another one. My mother, she says Lowell's.

[Ben Carlson]

What? Oh, like, like lol. Lolz.

[Michael Batnik]

Lolz? Yeah, Lolz instead of Lowe's. She can't. She can never get Lowe's.

[Ben Carlson]

Oh, Lowe's. I thought you meant lows.

[Michael Batnik]

My mom is very bad at knowing name, so she thinks it's Lowell's. Anyway.

[Ben Carlson]

All right, so LS says that their cost. Their core customer is a homeowner with an average annual. With an average household income north of $100,000. They have gainful employment. They receive wage increases. They have record equity in their home. They have money in the bank. Overall, we describe it as a consumer with a really strong personal balance sheet. And this consumer is resilient.

[Michael Batnik]

Yep, you could say that. Every year for the last five years. It's funny, the word gainful. Sorry to keep picking it here. That's a word you only hear for employment. In front of employment. You never use the word gainful for anything else besides, you're gainfully employed.

[Ben Carlson]

Correct.

[Michael Batnik]

All right, the next thing here, you and I both put this in the doc, and so I must match together. Yes, this was a viral thread by, I think, Matt LeBlanc's brother, Brian LeBlanc from PNC.

[Ben Carlson]

Who's Matt LeBlanc? Was that an actor?

[Michael Batnik]

Yeah, he's from Friends.

[Ben Carlson]

Oh.

[Michael Batnik]

So he's from pnc. And he says they track the debit and credit spending trends of 4 million households. And he says, long story short, lower income spending balance sheets trends have been on a tear in 2026. This is a, this is a narrative, narrative buster. Why don't you go through some of these?

[Ben Carlson]

Okay, so he breaks out the lower income, middle income and upper income. The year over year change in card spending X gasoline. Right. So is there some inflation stuff going on in here? Of course there is, but the shape of the lines is what's interesting because upper and middle income is dipping a little bit and lower income is straight up into the right.

[Michael Batnik]

And it had dipped for years heading into like 2025, and now it's gone vertical.

[Ben Carlson]

So he plots, he plots the gap between the upper income and the lower income. And that peaked in what, 2025 or so, and it's gone, it's collapsed pretty dramatically from four and a half percent spread down to one and a half percent. He said, where does this leave us? I'm encouraged by it. Bigger tax refunds, lower withholding taxes, improving job growth, and people monetizing wealth gains by bringing more cash into their checking accounts from their brokerages have been more than enough to keep spending stable in 2026.

[Michael Batnik]

I got to be honest, this, the data he provided here was very surprising to me.

[Ben Carlson]

And then he concludes with this. Me too. He said, here's where it gets interesting. We're also not seeing any evidence that lower income households are dipping into their savings to maintain spending patterns. If anything, lower income balance sheets may have improved through the war with Iran. Iran. This is wild to me. So he's looking at the cash savings buffer days for lower income households. And he says it shows the median number of days a lower income household than our data set can maintain their spending trends if their income suddenly stopped. And it's still abrupt pre pandemic levels. He said, that being said, lower income households are burning through Their tax receipts, their tax refunds more rapidly than last year. Not sure. I mean this is just the data. He's not, he's not doing like commentary or anything like that. But yeah, surprising.

[Michael Batnik]

The thing is, I think some people assume, when you think about the K shaped economy or whatever, people assume that these trends are going to be in place forever. And the economy is dynamic. It's never the same, it's constantly changing.

[Ben Carlson]

It feels like a weird position. Nobody wants to hear that the lower shape of the K is doing well because almost by definition, how can they be right? And Obviously the bottom 10% is never doing well by definition. But this is, you know, this is encouraging. It is what it is. It's good stuff.

[Michael Batnik]

I think one of the big reasons is I've showed on this show time and again that bottom 50%, their, their increase in equities this decade. It's like a 300% increase in ownership of equities. I think that helps. It's like wealth effect for the, for the bottom half that they've never had before, really.

[Ben Carlson]

So part of, part of this next chart shows the cash held by households and it followed a trend of 4.8% or followed a pretty good trend line from 2010 to 2020. And then the pandemic broke it obviously with fiscal policy. And I think everybody assumed that this gap was going to close, that the cash held by households would revert back to trend. So part of the story here is on the other end of the spectrum, the number of ultra wealthy individuals. We're talking about people with a net worth of $30 million. So the Journal wrote a piece on this, jumped by 14.4% last year. Obviously the stock market drove all of that. There's 556,850 people worldwide by the end of 2025. Fastest pace of growth since 2017. Again, it's a stock market story. 60,000 people, the top 0.001% of people are each worth at least $254 million. The population that can foot fit in a football stadium own three times more, more wealth than half of humanity combined. Holy. So one of the, one of the one. I mean, obviously, obviously. I think most American listeners us would agree that capitalism is awesome. Wealth creation is awesome. A rising tide lifts a lot of boats to varying degrees, obviously. But one of the, one of the really gnarly side effects of capitalism baked with social media is a really nasty cocktail of disgusting wealth inequality. And I don't think anybody would hear what we just said and think like yeah, that sounds good. I'm for that. It sucks.

[Michael Batnik]

I keep saying it. I think there's a greater than 50% chance we're gonna have a socialist present in the next 10 years. Mark it down. I think, I think that's a real. Because this wealth is. Again, AI is going to make it even worse.

[Ben Carlson]

I'm just, I just planning, not knowing anything about. I don't know anything about how politics works other than the fact that, like, putting somebody in office is very expensive. And, you know, people that want socialist. Socialism don't have a lot of money, so.

[Michael Batnik]

Well, people don't always agree with what they do with their money. One thing. So I had lunch with a local financial advisor yesterday and we both talked about this. And I said. And we kind of talked about how are things going in the business? And I made the comment like, I can't believe the number of wealthy people that there are that we come into contact with. And he said, same with me. He's like, there is just so much wealth sloshing around right now from everything that's happened in this past 15 years or whatever. It's.

[Ben Carlson]

There's money, not weird. I understand it. There is like a fantasy of a cohort of the population that wants us all to come crashing down. And I, you know, I understand the sentiment. A bare market in equities, a 50% crash will certainly fix a lot of the inequality. It'll make life terrible for everybody. But.

[Michael Batnik]

Yeah, but it would be worse for people on the lower end. Of course.

[Ben Carlson]

Of course. Well, all right. Somebody sent this to us a while ago when we spoke about some, some tax stuff and whatever. I had it on my screen. So I thought this is an appropriate time to include this. So in 2025, according to the latest Tax Policy center estimates, 40% of households. This surprised me. I didn't realize. I didn't. Did not know this.

[Michael Batnik]

Or.

[Ben Carlson]

About 76 million tax units will pay no federal individual income tax.

[Michael Batnik]

That's a lot. That, that isn't this just Jeff Bezos thing where he wants to.

[Ben Carlson]

Yeah. So this is also not awesome. There was something in here about like, so 70% of those people earn less than $75,000. So the Bezos thing, I guess a lot of, you know, a lot of that is happening already.

[Michael Batnik]

That's why the tax refunds are getting bigger. Right.

[Ben Carlson]

I don't know this like this.

[Michael Batnik]

I'm out of my quick comment on this story from the Wall Street Journal. Someone sent this to us. Forget work. Passive income is a new American dream. And they Go through all these people who've decided, like, I'm going to start a business. I'm going to have a side hustle. I'm going to create a product, I'm going to create a service. AI is going to help me. And I'm sick of the 9 to 5 job. And I just want to stand up for the 9 to 5 job. The 9 to 5 job is okay. Passive income is really, really difficult. It's way more work. And I think that's. That's honestly where the story comes down. Like, if you do really want to. It's. It's not as. It's. The word passive shouldn't be in there anywhere. It's active income, Very active. It's really hard to do something on the side. Like, there's nothing wrong with. With slowly but surely building wealth through a 9 to 5 job.

[Ben Carlson]

Do you know anybody that has a side hustle?

[Michael Batnik]

Well, that's a good question. I'm sure I do. I mean, you and I, everything we've done has been started as a side hustle.

[Ben Carlson]

Not to brag.

[Michael Batnik]

Yeah. But guess what? It's a lot of work. That's my point. Not easy to do something on the side. It's just more work on top of your job. You already have.

[Ben Carlson]

You're wearing polka dots. You know the scene in. You probably don't know this scene in Wayne's World where Garth says it's like, people do things just because they get paid. And that's, like, really sad. And he's wearing, like. He's wearing, like, a Reebok jumpsuit and he's drinking Pepsi and it's just coming

[Michael Batnik]

from the guy who was wearing an IMAX hat.

[Ben Carlson]

Yeah, yeah.

[Michael Batnik]

No, that's. Yeah, it's true. Easily your most quoted movie on the show. You've quoted Wayne's World more than any movie that we've.

[Ben Carlson]

Right, Without a doubt. All right.

[Michael Batnik]

Artificial intelligence. Does this happen? We talked about this with Derek a little bit. There's this subset called the exponential view. And they looked at Aziz Zahar, looked at the Gen AI economy. He said it's generated $110 billion in sales over the past 12 months. On an annualized basis, that run rate exceeds 175 billion. And he's got a great chart in here. It just keeps going up. And this is like, how much money is actually being created from all the AI spend. And it's going up at a pretty fast rate. It's funny because numbers don't mean anything to me anymore. I look at this number.

[Ben Carlson]

And I go, that's why you have to normalize it to the moon and back.

[Michael Batnik]

Right? It's. I'm like, I don't. Is 175 billion a good return on all that capital? I don't know. But I think, I think as long as the chart keeps going up, then you say, okay, this is, something's happening here. He, he was saying, like, this is, this is great news. Like, is finally happening.

[Ben Carlson]

Getting back to the conversation earlier in the show about the cash flow going to zero for these companies. Do we think that it's more likely that we look back in two to three years and say, can you believe we didn't think that this was going to work? Like, these guys were just like completely asleep at the wheel. They had no idea they just drove their business off the cliff? Or is it more likely that, yeah, they actually had a plan and trading at a market multiple made no sense and was a generational buying opportunity.

[Michael Batnik]

That was my point to Derek, that these are the biggest, best run companies in the world and it could be one of the, this could be the biggest folly of all time. And we have egg on our face. You're like, you idiots. They didn't know what they're doing. Come on. I don't believe that possible.

[Ben Carlson]

It's possible that Sundar Pichai and Satya and all these people, it's possible that they're all complete morons. But how dumb do you have to be for that to be your base case?

[Michael Batnik]

Yes. I don't believe that. All right, From Ramp Economics Lab. I love this. Subsack. Ara Kharazian, who we've had on the show before, actually, he says, is AI actually a job maker. Firms that adopt AI grew a headcount at 10.2% percent faster over two years following adoption. Entry level headcount grew even faster at 12%. And he's got this chart here that shows firms with high AI adoption are seeing growth in their number of employees. This is a head scratcher to me now. You could say, and you've said before, wow, this is still early. Come on. I think this, this is a positive sign for what I think is going to happen, that it's going to. AI is going to lead to more work.

[Ben Carlson]

You could also make the case that this, this is still early and the companies that are most aggressively leaning in are best positioned to take these sort of risks.

[Michael Batnik]

Fair.

[Ben Carlson]

You think that AI is going to.

[Michael Batnik]

It's a, I'm just saying it's possible.

[Ben Carlson]

I don't know.

[Michael Batnik]

Early positive sign We. We haven't seen any really huge negative signs of AI yet. Is what I'm saying correct? Not like, not a huge one. That, like, oh, my gosh, yes, this is the end. We haven't seen that yet.

[Ben Carlson]

Correct.

[Michael Batnik]

That anecdote hasn't happened yet. Even earn the data especially.

[Podcast Narrator]

All right.

[Ben Carlson]

I don't know. I'm sure there's been work done on this. When a company puts our name on a stadium, it's usually not a great sign of capital discipline. So Kurt Badenhausen tweeted the warriors signed a New Jersey patch deal. Oh, it's just a jersey patch. All right. Never mind. With AI Cloud from iRen, but nevertheless costing more than $50 million a year.

[Michael Batnik]

That's a lot. I don't know how to calculate a lot of cash recognition. It is. Okay, someone. I said last week they need better names for AI. They all have to use a name. And someone says, in Tokyo, the nickname for Chad GPT is Chappy. Okay, that's not bad. Not good, but it's not bad. All right, what's the mode here for prediction markets? I said this last week, like, where's the moat for calcium polymarket. New York Times says Mark Zuckerberg directed Meta to create a prediction markets app.

[Ben Carlson]

What's the. Well, we discussed this last week. I'm on record that there are a lot of examples of companies where you would say, well, what's the moat? And they've gone on to do incredibly well. Now, maybe I have one example, but still, one is one, is it not? It's more than zero.

[Michael Batnik]

But degenerate gamblers worker wherever they're treated best.

[Ben Carlson]

And well, why would they be treated better anywhere else? The odds are the odds. Once you have the customers, why would they go somewhere else? Maybe better sign up bonuses. But like. All right, that's.

[Michael Batnik]

I just. What was the moat for Fan. Here's the moat and drafting here's or whatever.

[Ben Carlson]

Well, first of all, why is that the criteria for anything? But I'll tell you what the mode

[Michael Batnik]

is because the reason all the growth is happening for Kelsey and polymarket is just because of sports betting. That's it.

[Ben Carlson]

Sports betting. So I'll tell you what the motives for. For these companies. For me, I have a FanDuel account and I've dabbled in with fanatics and draftkings, but I've bet whatever. I've bet on FanDuel. That's my personal record. So I want to know what my track record is. And I had a pretty good run on the NBA playoffs. Not the brag. So I am back down to only 7 cents of losses per every dollar spent. So that's the moat, at least for me. That's why I'm not leaving fanduel.

[Michael Batnik]

I just. When it comes to sports betting, I just don't see any, any moat at all. And I feel like these are fly by night companies. There's going to be 12 more of them. Maybe I'm wrong.

[Ben Carlson]

Well, yeah, maybe you're wrong. I don't know. I don't really have a strong opinion here. All right. Michael Saylor tweeted volatility tests. Every capital structure strategy remains focused on Bitcoin, disciplined capital allocation, credit quality and long term value creation. This is not the Onion. He actually tweeted this. We appreciate our investors and we'll continue to execute with transparency and resolve.

[Michael Batnik]

So you and I saw him speak at a conference like two years ago and Bob Pisani was interviewing him.

[Ben Carlson]

And, and Bob's entire body language was, and he didn't say this out loud, was. I feel like I'm taking crazy pills. Yeah, he was like apoplectic. So I'm going to get into this tonight with Josh what he thoughts. I want to say too much. Other than the fact that strategy is in a 30 with 50%, whatever it is, strategy is getting killed.

[Michael Batnik]

It's down 82%. It is 82%. Yes. Okay.

[Ben Carlson]

30, 80. Okay. They issued a preferred security that was supposed to trade at par. It's now in a 18 drawdown. Not awesome.

[Michael Batnik]

They're selling yields higher.

[Ben Carlson]

But what is interesting, I keep saying this like there are things happening with blockchain stuff despite the crashes in these companies. And by the way, a couple of weeks ago when you told me Visa was in a 12 drawdown, when I mentioned these names, MasterCard was in. Was at a 52 week low.

[Michael Batnik]

Okay.

[Ben Carlson]

So I think these companies are being,

[Michael Batnik]

I think strategy getting blown out of bitcoin is the best thing that can happen for bitcoin.

[Ben Carlson]

Yeah, I would agree. I would agree. So Ton Slack tweeted, the tokenized real world asset market has grown to nearly $32 billion, highlighting increased institutional adoption of blockchain based infrastructure. $32 billion is not like 20 million. That's a real number. So he breaks it down by U.S. treasury debt. That's like $15 billion worth of tokenized assets, private credit, commodities, stocks and others. This is going to be $100 billion.

[Michael Batnik]

I guess I'm just thinking of the way that how could, how AI could save crypto somehow and really use the blockchain There's, There has to be a way. But I don't know. You said 170 billion for AI is not that big. With 35 billion for crypto is big.

[Ben Carlson]

What? I said 170 billion. I didn't say it's not that big.

[Michael Batnik]

Yeah, okay. All right. I still just think that with all the fanfare that we heard about all the things that crypto is going to do, if stable coins are the thing that's going to be a really boring outcome from all the things that this could fix this, and it could fix this.

[Ben Carlson]

And what if tokenized real, real world assets are 100 billion? Is that, that's not nothing. Huh?

[Michael Batnik]

All right. It's not. I don't know.

[Ben Carlson]

No, listen, two things can be true. The hype was ridiculous.

[Michael Batnik]

Yes.

[Ben Carlson]

And we've paid way too much attention to it. But it was also a new asset class, a new vehicle. Like, it was exciting.

[Michael Batnik]

Oh, the fact that $2 trillion was created from thin air is unbelievable.

[Ben Carlson]

Is that nothing? Like, is that a fail? They invented a new asset class that people institutional investors allocated to overhyped. Short, but not, you know.

[Michael Batnik]

All right, so we talked last week on Ask the Compound. Someone asked, hey, I live in North Carolina. I've got a 2.9% mortgage, but the house is too small for my family. The kids are growing. Moving into a new one would be a 6.5% mortgage. And someone. And I said, you know what? If it's going to make your life better, do it. And someone in the comments said, sorry, but trading a 2.9% mortgage for a 6.5% one on a much higher loan balance is an idiotic move. Quality of life is defined by the people you're spending your time with, not how big of a house you're spending that time in. There are numerous academic studies that conclude include upsizing your home doesn't lead to higher overall life satisfaction.

[Ben Carlson]

Well, I'm a perfect, I am a perfect counter example.

[Michael Batnik]

Yes. I, I, this is why I think sometimes behavioral studies are just flat out wrong. So you did this, and I'm sure you're much happier.

[Ben Carlson]

I did this. My mortgage is when I went from 2.9% to where am I now? 5. 5. I think my mortgage payment is way higher than it was in my old house. Like an uncomfortable amount higher. But I did this for my family and for my life and to be on the water and to make lifelong memories with my kids. Now, obviously, obviously, there's like a line like, if you can't do it, there's

[Michael Batnik]

diminishing returns at some point. And there's.

[Ben Carlson]

Right. But I'm just saying, like, if it doesn't make financial sense to the point where, like, if this, if this blew up my life, where I wasn't able to do things because I was underwater on my mortgage payments, obviously that's in, That's a.

[Michael Batnik]

This person in the question said, listen, I can't afford it. I just don't know if I want to.

[Ben Carlson]

Fine, do what you want. Right. Is this, this is like personal.

[Michael Batnik]

But I, I said, I said do it because the house is honestly something that will make you happier. It will put you in a much better mood if you're in a much happier house situation. I totally agree with that. I think the behavioral studies on this are wrong.

[Ben Carlson]

I would say it's. It depends, but I generally agree with you.

[Michael Batnik]

Diminishing returns. Anyway, I agree.

[Ben Carlson]

We've been talking about this. The fact that the economy continues to be as resilient as it is with the housing market in a depression is remarkable.

[Michael Batnik]

Right. There was this idea that there's a line that housing is the economy. Guess what? Nope.

[Ben Carlson]

Kevin Gordon tweeted new home sales fell sharply in May, down 7.3%, and are getting closer to their cycle lows. And Tom Smith said it is still completely insane. Now GDP has been above trend the cycle, while the housing sector, typically responsible for up to 20% of commercial activity, has been effectively frozen. Now it's not like a mystery, like, well, what's happening? Well, yeah, so it's all AI. So Warren Price is a chart showing residential fixed investment in raw dollars versus information, equipment and software. And it's just the lines have just

[Michael Batnik]

gone, whoops, guess what. Yeah, most people would prefer if we built more houses than more data centers, but that's not where the incentives are right now.

[Ben Carlson]

Somebody sent this article to us. There was an article, an opinion piece in the ft. Your summer holiday is a retirement killer. And basically, like, if you were to invest the money instead of spending it on X, Y and Z. And I think this was satire, but I can't. I'm not 100 positive. I think this was like very dry British humor. Did you read the article?

[Michael Batnik]

Okay, I, I did kind of skim it. I didn't. I guess I didn't get that. So the whole idea was, yeah, if you just take the $10,000 you're gonna spend on vacation and mult and grow it over 30 years, this is how much you're giving up. Right?

[Ben Carlson]

Yeah. Now I'm like 65% sure, I'm not. You know, I don't know. I don't know who this person is. But I think we would all agree that if you are putting an 8% return on your vacation and depriving your family of these memories, because it could be worth whatever.

[Michael Batnik]

Yes, this is. Yes, this is satire. And the thing is, some people probably would look at this as being real. He's like, that $10 a day you're spending on ice cream for your kids could be $2,000 by the time they retire.

[Ben Carlson]

The Wall Street Journal had an article, no hair transplants, pills, or toupees. Meet the men embracing baldness. I've been bald maxing for years, and I wasn't asked to opine.

[Michael Batnik]

We got a lot of this. Yeah. Someone said Michael should have definitely been interviewed for this. I mean, if these solutions are coming. I mean, if you're a bald person and you grow your hair back, I'm not gonna look down on you. I think you should. If you can do it. I think you. I don't. More power to you. I don't care.

[Ben Carlson]

But Josh is regrowing his hair somehow. He's injecting himself.

[Michael Batnik]

Well, I heard Josh did a speech for a group of advisors in Turkey, and then he came back. I don't know what happened.

[Ben Carlson]

It does look pretty good.

[Michael Batnik]

One more personal finance thing. So it is funny because a lot of what we've been talking about in the last five or 10 minutes is just judging people on their financial decisions. And I think I'm not one of those persons that says, don't judge people on their financial decisions. I love judging people in their financial decisions. Oh, it's great internally, right? It's fun.

[Ben Carlson]

Yeah.

[Michael Batnik]

We don't publicly shame, but we always get people. We've talked a lot on this show before about the benefits of leasing versus buying. We've run the numbers, we've gone through the posts. We've looked at it, and a lot of people, every time we talk about the fact that you and I lease cars, someone will comment that we're idiots. Right. I get it. It's like, it's not the greatest financial decision in the world, but I think there is a huge benefit of leasing a car today. Way more than there was in the past. So I got my new Telluride, and it's funny. You got a Range Rover or Land Rover. I never know the difference.

[Ben Carlson]

Range.

[Michael Batnik]

What's the difference between a Range Rover and a Land Rover?

[Ben Carlson]

Yeah, different cars.

[Michael Batnik]

Okay. And I drive, like, a Kia Telluride or whatever. And someone's like, hey, I have a few people say, hey, it looks like a Range Rover. I told you. It's kind of. I'm a homeless man's Range Rover. But the biggest benefit of leasing today is all the new features you get in these cars. I feel like the features are multiplying in terms of the cameras and the safety and the alerts and the sensors and these self driving capabilities. Driving a new car is just way safer for you.

[Ben Carlson]

It's also making it like impossible to fix.

[Michael Batnik]

Oh yeah.

[Ben Carlson]

My dad got in a fender bender and it's $6,000.

[Michael Batnik]

Oh yeah, that, that's out of me before because all the sensors. It was $12,000 for a bumper car insurance. I guess that makes sense why it's going higher. But you go on the the highway and it's not like Tesla self driving, but it's like adaptive cruise where it, it keeps you in the lane and it steers for you and it slows down if the car in front of you slows down and it speeds up. If it speeds up. And I just think that the amount of features that happen in two to three years is kind of insane these days. The technology is getting so much better in cars.

[Ben Carlson]

Yeah.

[Michael Batnik]

That's how I justify my terrible financial decision to lease.

[Ben Carlson]

It's not a terrible financial decision.

[Michael Batnik]

How about.

[Ben Carlson]

What about this? It's fun to get a new car every three years.

[Michael Batnik]

It really honestly, for a week my kids were talking about the new car. Smell is so good. My kids were just going and sitting in the car in the garage sometimes because they like the smell so much.

[Ben Carlson]

When's the last time you had Domino's pizza?

[Michael Batnik]

Last night. My son gets it every Monday night. It's his favorite pizza in the world. We have a Domino's, right? It's the closest pizza by our house every Monday from him. I will now get it in the summer. I'll get a text. Hey, when are you coming home from work? Can you go get a Domino's on the way home? It's his favorite pizza, but we had a birthday party for him and his sister and all their friends came over. What kind of pizza we get dominoes.

[Ben Carlson]

Well, turns out that George is alone on this one because pizza slice keeps shrinking. The Journal had a post showing that Mexican is going up a little bit. This is the market share of like these, these restaurants. Pizza is crashing. If you look at domino stock, it looks horrible. Stock that I owned in the past looks horrendous. I think the CFO just resigned or I can't remember what's happening, but really bad chicken. Chicken is going up and to the right one from 10.5% in 2019 up to 13 and a half percent.

[Michael Batnik]

Okay. This chart is a little bit of a truncated chart crime. This is like a misdemeanor of a chart crime because it's. It's a very small axis, 9.5 to 14. But you're right.

[Ben Carlson]

The trend change we had. I had a party for Robin's 40th birthday. Never had a party in my old house. We had a bunch of friends over. It was very nice. At the end of the night, Robin and I had been drinking and I said, you know what? Let's get Domino's. Been a while. It was terrible, really. And I. I hate to. I really hate to be like the food snob guy because I grew up eating Domino's and I thought I liked it. Or maybe, maybe, maybe it was just. It was too late. And we got like, you know, because

[Michael Batnik]

one of the reasons the stock did so well for so many years is because they improved their quality. 44% draw down. But one of the reasons that pizza is losing share is just because there are so many better options out there today. People got more pizza in the past because there wasn't. There wasn't good options for eating. And pizza was the only one that had delivery. Now you can deliver doordash and you can get other stuff. So that's why that's happening. This is a doordash phenomenon.

[Ben Carlson]

All right, go ahead.

[Michael Batnik]

Okay. Okay. So there's the Tony Soprano idea that remember when is the lowest form of conversation.

[Ben Carlson]

We've done this before. And we make fun of Chris because he's the biggest remember guy.

[Michael Batnik]

Yeah, yeah. But I reject this premise. Tony Soprano was one of the least happy people alive. He had to go to therapist. Cause he was so unhappy. I think there are times when, remember, when is the best. There are certain people who do it way too much. Of course. Right. One of the people we work with is one of them. But I think there are times when it is useful. So this past weekend, my parents have a cabin in the middle of the woods on a river. It's like the. There's no cell Service. There's no TVs, there's no technology, there's no Internet. There's no nothing. It's like in the backwoods, middle of nowhere. Two track road, right on the river. And you go there and you play yard games and you do a campfire and you go kayaking on the river. And so I went there with a bunch of my brother's friends. Kind of like everyone wants to keep get together, remember my brother. And all we did all weekend was drink beer, go kayaking, do campfire, play yard games, bocce ball, that kind of stuff, and tell stories about my brother. And I had to best remember one day of my life. It was so fun telling stories, but that's the kind of stuff we'll remember when is good for you.

[Ben Carlson]

Huge.

[Michael Batnik]

Remember when Guy I love was actually very cathartic for me and good to have it and got it out of the system. And all we did was tell stories all weekend. And it was so much fun, I laughed all day.

[Ben Carlson]

That's what life's all about. Remembering the good times, right?

[Michael Batnik]

Yes, exactly. Recommendations?

[Ben Carlson]

I want to talk about why Rewatchables is, for me, unequivocally the best podcast of all time. So they're going through Hell month, which is 90s nostalgia. So what is from hell, and why am I talking about this? Because it's my podcast. The Tenant from Hell. Pacific Heights. The Roommate from Hell, Single White Female. The Nanny from Hell. The hell is that? Oh, the Hand that Rocks a Cradle. Stepdad from Hell, Domestic Disturbance. All right, so Bill Simmons on the Rewatchables goes to all these movies, watched all of them. And I watched Domestic Disturbance, which I had, I did see when that came out. That was with Vince Vaugh and Travala.

[Michael Batnik]

Terrible movie, terrible movie.

[Ben Carlson]

So I watched a movie, rewatch it. So bad. So, so bad. And then I listened to the podcast and it was amazing. I mean, obviously it's an intentionally bad movie, or they did because it was intense. You know, it was horrendous. But those guys. It's a very good podcast.

[Michael Batnik]

It gives me ideas of movies to rewatch as well that I would have never thought to rewatch.

[Ben Carlson]

So I don't know that I saw. I, I, I, I know I've seen parts of Single White Female, because I do remember it was probably on TBS and TNT all the time seeing Bridget Fonda and Jennifer Jason Lee with the same haircut. Yeah, but Pacific Heights, I never saw that one. Matthew Modine and Melanie Griffith isn't a

[Michael Batnik]

Michael Keaton movie as well.

[Ben Carlson]

Michael Keaton, of course. What am I saying? Yeah.

[Michael Batnik]

Okay. So should I watch someone? I think I've never seen it.

[Ben Carlson]

Yes, yes.

[Michael Batnik]

All right.

[Ben Carlson]

Yeah, it was good. Really enjoyable. Terrible movies for the most part, but man, great podcasting. All right. A couple of, A couple of. I don't know, last month, the other month, I forgot to mention that I watched what I thought was a very good doc. You ever see the Dark wizard on Max? The Dark wizard is about, like, one of the pioneers of rock wall climbing. What's that thing where you. Oh, free soloing. Yeah, like, just without a rope. And then he got into hang gliding, like, where you just. You put, like, the bat wings on. And spoiler. He didn't make it. But it was a. It was very good.

[Michael Batnik]

Oh, okay. Those guys are nuts. Absolutely nuts.

[Ben Carlson]

Do you watch. Do you watch Hot Day, House of the Dragon?

[Michael Batnik]

Oh, yeah. Here's the thing. I was going to talk about this. So my wife's like, do you want to watch? She's like, I. She watches all the TikTok videos to know what's going on. And, like, this person is this. And she's like, do you want to watch the. The review of last season? Like, the recap? And so I watch. It was like 10 minutes long. And then 20 minutes into the first episode, I'm like, wait, who's that person? Wait, are they good or bad? Is that. But that's why I love Game of Thrones, because I can turn my brain off and just be entertained. And I don't have to be one of those nerds that knows, like, oh, this is the House of Baratheon. This is that. Like, I don't care about any of that stuff. I just like being entertained.

[Ben Carlson]

But I'm constantly confused because I watched the recap. First episode was fantastic. So was the second, but I saw the recap, too, and I was like, wait, that happened? I don't, like, remember any of this. And even 30 minutes through episode one, I have no idea what's happening. Honestly, I. I couldn't tell you which family sometimes, but, like, which kid belongs to which mom, and blah, blah, blah, blah, blah. I love it. Can't tell you anything. I have no idea what's happening, but it's great.

[Michael Batnik]

All right. So my son has been really big into Alien movies. I think it was because of Project Hill Mary. So he's, dad, give me more Alien. We watch a bunch of Alien movies. And finally, I let him watch the Alien movie. Alien. Okay, Sigourney Weaver. And so he watched that and absolutely loved it. And he goes, are there more? And when, you know, he watches it on Amazon, it shows the rest of them. He's like, how many of these are there? So I pulled it up on Chat GPT. We got them in order, right? And so we watched Alien, Aliens, Alien 3, Alien Resurrection, Prometheus, Covenant, and Romulus. We Watched them all and I looked at. Like, I didn't. I never thought of, like, where do these movies rank? Where? When did they happen? Right. I never thought. I knew Prometheus was the prequel. That's about all I knew. And he loved every single one of these movies. But it's kind of funny because as they got further along, you got the. The technology got better. Right. Because the first One was in 1979. The technology gets better and better and better and the action sequences get better, but none of them come close to touching the first movie. Not even close.

[Ben Carlson]

No, Aliens is. Aliens is the best.

[Michael Batnik]

Alien.

[Ben Carlson]

No, Aliens, the James Cameron movie is

[Michael Batnik]

by far the second one.

[Ben Carlson]

Yes.

[Michael Batnik]

You think the second one is the best? No, the first one is by far the best.

[Ben Carlson]

No, I like Alien was great. So this is. This is.

[Michael Batnik]

Alien was more of a suspense theory. Aliens was a better action movie.

[Ben Carlson]

Yes. They were very different movies yous're right. Alien was like a slow burn.

[Michael Batnik]

I think none of them even like the fact that they didn't have the technology back then made it so you had. But you would never make the movie Alien today because it's so James Cameron

[Ben Carlson]

do the original and Ridley Scott did the second.

[Michael Batnik]

No, Ridley Scott did the first one. Okay, I forgot that there was seven of these movies. Yeah, my son ate them all up.

[Ben Carlson]

This. This is my favorite movie franchise of all time. Do you know that?

[Michael Batnik]

I think you've mentioned that before. So, yeah, we watched them all and.

[Ben Carlson]

But wait, hold on. I'm surprised because the second one is quite scary. When Newt's parents are like stuck in the wall and they're like white as a ghost. He wasn't scared.

[Michael Batnik]

So my son has the same thing as me. He does not get scared by these movies. They don't scare him at all. He finds them entertaining. Like it doesn't impact him at all to see all this stuff. He also watched the two Alien vs. Predator movies, which are complete garbage.

[Ben Carlson]

AVP2 is the worst movie. So I love the first one when they're going down the garbage. The second one is avp. Was it Requiem?

[Michael Batnik]

Yeah, it just worst movie of all time.

[Ben Carlson]

I watched that with Robin back in the day. Like 2006. We were in my bedroom and I'm watching it on bootleg and she's like, what in the hell is this garbage? Terrible movie.

[Michael Batnik]

I got one more. The bear on FX is like the Hangover. I don't know why I'm still watching it. It's on season five now. Sometimes you have lightning in a bottle and you Cannot recreate it like the Hangover 2 and a Hangover 3. It was the same characters and they tried to recreate the magic and it just. It never happened. And you almost wish they didn't make them the Bears. Season 1 and 2 is like one of my favorite two television seasons of all time. In season 3, 4 and 5 just got progressively worse where they obviously ran out of ideas and did a complete money grab. And the show is almost unwatchable now. Why am I watching it? Sunk, cost, fallacy. I don't know.

[Ben Carlson]

I have. I have one thing before we go. So Ben and I. Well, actually, you don't work from home. I work from home. And I still. It still feels weird that I work from home. I mean, I'm in the city once a week. I go to Belmore here and there, but I really. Primarily I'm in my house. And it still is very bizarre. It's not new, but it still feels new. And it still feels like I'm like cheating or something.

[Michael Batnik]

Feels like it's weird because you feel like you're on an island sometimes.

[Ben Carlson]

It's bizarre. It's a bizarre thing. And obviously, like, I feel blessed out of my mind that I'm able to. To do this right. I not. I've not everybody so lucky. A lot of people have to go to the office and they have jobs where they can't work from home. So that's just a little bit throat clearing. I feel extremely lucky to do this. But it is, it does do something weird to, for me for like the father, son or kid relationship. So Kobe went to sleepaway camp on Saturday and the night before and like, I was just like, all right, yeah, I'll see you in seven weeks. And he loves camp and like, whatever. It's all, it's all great stuff. But I feel like my sort of like, whatever about it or just like just in general with being with him all the time. When, when our parents came home now, I guess my dad didn't come home because my parents were divorced. But for, for non broken households, back in the day when your parents came home, like work was done, right? Like they left work and they came home and they gave their kids all the attention. I feel like I am giving my kids, like, I don't know, 8% of my attention because I'm with them literally all day every day now. Like, you know, they don't. They're not homeschooled, so but like, I'm just, I'm around all of the time and it's like A trade off. Like, so I'm not suggesting that, like, it's better when our parents went to work and came home and were with the kids. Right. Because then they missed a lot. They missed, like, sports and whatever. They just weren't able to be around. But it is like, it is doing some. Some stuff that I don't love, that I do feel like I'm, like, sort of not present, taking it for granted because I'm with him all the time.

[Michael Batnik]

It's a completely different. It's. It changes the relationship in a lot of ways. I totally agree. My dad never once brought work home with him. But parents didn't spend as much time with their kids back then. No parents did. It was just kind of known that, like, you weren't spending as much time with your parents. You were kind of on your own.

[Ben Carlson]

Yeah, it's. It's just. It's weird. Like, I feel, like, disconnected. But even though I'm with him all the time, I don't know, it's just.

[Podcast Narrator]

It's.

[Ben Carlson]

It's interesting.

[Michael Batnik]

I get it. Okay. Glad you got that off your chest.

[Ben Carlson]

Just something I've been thinking about.

[Michael Batnik]

I see what you're saying. The way that we parent our kids is totally different from the way our parents parented us. But their parents did it different to them too, so it changes.

[Ben Carlson]

Yeah. I'm not saying, like, it's. It's all bad or it's all good. It's just, you know, it's different. All right, whatever. Whatever. As Ben likes to say, Edible spirits at the compound. News, uh, hope everybody is enjoying their summer.

[Michael Batnik]

Happy fourth of July.

[Ben Carlson]

You know what I'm trying to do? I'm trying to remind myself, getting back to Kobe that he'll be home in 47 days. Leave a reprieve. I love him. He's having a great time. It's all good. But summer goes so fast. I'm trying to enjoy every day.

[Michael Batnik]

You're going to be saying, can you believe it's fall already, Ben?

[Ben Carlson]

I know. Before you know it, I am. I will not apologize for being a. Can you believe it's that time back.

[Michael Batnik]

Happy 4th of July to everyone.

[Ben Carlson]

Hell, yeah. Great holiday

[Michael Batnik]

behind Christmas is my second favorite holiday. I love the 4th of July. Can't wait. Sun, water. Let's do it.

[Podcast Narrator]

All right.

[Michael Batnik]

See you next time.