Is the AI Trade Over? (EP. 439)

Summary

Animal Spirits Podcast—Episode 439

“Is the AI Trade Over?”

Date: November 19, 2025
Hosts: Michael Batnick and Ben Carlson (The Compound)

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Episode Overview

In this episode, Michael and Ben dive deep into current market dynamics with a focus on artificial intelligence (AI), speculation about the end (or not) of the AI trade, market skepticism, and what healthy corrections look like. They debate tech stock volatility, investor sentiment, comparisons to previous market manias, the psychology of bubbles and corrections, and key issues in private credit and household finances. Along the way, they punctuate insights with personal stories, notable charts, and their trademark humor.

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Key Discussion Points & Insights

1. Is the AI Bubble Over (or Was There Ever One)? (02:25–06:46)

• Ben: Opens with a take that “there’s no euphoria in this market. ...this is a joyless bull market” [02:25].
• Michael: Replies, “There was absolutely euphoria...when OpenAI was making announcements...Oracle stock jumped 25% in a day. That was absolutely euphoric behavior” [03:00].
• Ben: Maintains skepticism, saying, “I think the euphoria is in the tech CEOs, not the end investor” [03:38], and calls recent bubble action “weak” if it was the top [04:12].
• Both ultimately agree: Any hype is gone for now, and corrections feel healthy and necessary.
• Michael: “Corrections only look healthy in other people's stocks” [05:49].

2. Market Corrections and Skepticism (06:46–09:13)

• Comparison of meme and speculative stock drawdowns: roundhill meme ETF down 40%, with many names seeing 30–50% declines, but S&P only down about 3% [05:10].
• Discussion of media’s skeptical tone vs. the euphoric coverage during the dot-com era.
• Michael: Notes that much of today’s euphoria is among “hyperscaler CEOs” (e.g., Altman, Satya, Zuckerberg), while the public and politicians are growing wary of AI [07:15].
• Quote: “AI is becoming deeply unpopular in America. ...Republican Senators say they’re afraid to mention the words AI because their popularity ratings go down.” [07:45; attributed to Brad Gerstner via Michael]
• Ben: “All the skepticism we’ve had...do you think that’s stopping Mark Zuckerberg from investing more?” [08:47].

3. AI Skepticism, Macroeconomic Impact, and Company Fundamentals (12:16–14:55)

• Oracle’s wild swings: After an OpenAI announcement, Oracle stock pops 37% in a day—clear euphoria, later loses $60B in market cap [13:05, 13:33].
• AI’s effect on society: Public (esp. Main Street) worries about job losses and societal disruption. “Nobody’s rooting for it except Altman and Satya, who’s doing four podcasts.” [08:42, Michael]
• Discussion: Will Microsoft allow OpenAI to fail? “No way. Too much money on the line.” [14:17–14:23]

4. US Startups vs. Rest of World; Tech as the New ‘Villain’ Industry (14:23–16:09)

• Michael: “US startups are pulling ahead of their peers elsewhere, and not just because of AI...it’s about faster adoption of new technologies like AI, stablecoins, etc.” [14:55]
• Ben: “The tech industry is going to be the next financial industry… after this is all said and done, they’re going to be the villains.” [15:28]

5. Market Resets, Bear Markets, and Investor Psychology (16:09–20:48)

• Discussion of whether we need a long bear market or recession to reset complacency in markets.
• Ben: “I really do think the speed of these recoveries, this is just going to be the new normal. ...the speed of information, of technology means these recoveries and downturns will both happen faster than they did in the past.” [17:26]
• Recognition that 50%+ crashes (like 2000 or 2008) are rare, probably not needed, and nobody is truly better off from them.

6. Legendary Trades vs. Legendary Investors (21:25–24:39)

• Michael Burry closes his hedge fund. Ben: “There’s a difference between making a legendary trade and being a legendary investor. ...Buffett is the latter, Burry and Paulson made legendary trades.” [21:46]
• Caution not to follow “legendary” market calls, as even the best can be wrong repeatedly.

7. The 'Great Wealth & Stuff Transfer' (24:38–26:35)

• Conversation about the challenges of inheriting not just money but ‘too much stuff’ from boomers.
• Joke: “You have to invest in dumpster rentals… think about all the renovations and stuff people are going to be throwing away.” [25:18, Ben]

8. Young Consumers, Blame Games, and Conference Call Insights (26:35–32:26)

• Ben and Michael challenge companies (e.g., Chipotle, SoFi) blaming young people or consumer “weakness” for poor performance.
• Michael: Reveals the value of listening to earnings calls: “Are they being level with you?” and points out which executives seem honest vs. defensive or evasive [31:42].

9. Household Financial Health and Consumer Collections Data (32:26–33:44)

• Only about 5% of US population is in collection (historically low), though amounts owed are rising [32:59].

10. Inflation Feels Hotter Than the CPI—Why Perceived Inflation Is Different (34:39–36:44)

• Michael references the “Chartnay” blog’s attempt to measure everyday inflation, which shows prices for daily goods running 1–2% above official CPI [36:03, 36:28].
• Ben: “No one ever believes the inflation numbers” [36:44].

11. Is the AI Trade Just Getting Started? Bezos, OpenAI, and Market Fragility (38:41–41:24)

• Bezos launches Project Prometheus with $6.2B; market implications debated.
• Key Quote: “It hasn’t even started. We don’t even have the robots yet.” [39:08, Michael]
• Discussion: What would happen if OpenAI failed? Is the market resting entirely on AI’s promise?

12. Tech Valuations, Uncertainty, and Market Knowledge (42:01–42:58)

• Ben: “The market already knows everything...but sometimes the market is wildly off the mark, right?”
• Michael: “We’re all just guessing. We don’t know. That’s the point – nobody knows.” [42:25–42:54]

13. Tech Stock Volatility and Compounders That Stop Compounding (44:47–45:38)

• Many “compounder” stocks (Nike, Estee Lauder, Charter, etc.) rolling over. Insight: Competition erodes even long-term winners.
• James Dyson's Quote: “Everything changes all the time, so experience is of little use.” [46:51, Michael]

14. AQR (Cliff Asness) in Sports Betting—Will ‘Quants’ Ruin FanDuel/DraftKings? (47:37–48:52)

• Ben wonders if institutional quant trading will arbitrage away retail betting margins, possibly harming sportsbook profits.

15. Crypto: Bitcoin Volatility and Narrative Shifts (49:00–51:14)

• Bitcoin’s wild swings and the (lack of) catalysts post-ETF launches.
• Michael: “What is the next catalyst? ...all of the promise, all of the catalysts… have happened.” [49:56]

16. 50-Year Mortgages—A Solution or a Trap? (51:17–53:46)

• They run the numbers: A 50-year mortgage reduces monthly payments compared to a 30-year by only a few hundred dollars but means paying far more in interest, potentially harming lower-income buyers.
• Ben: “A 30-year fixed-rate mortgage is one of the greatest financial inventions…in this country.” [53:15]

17. Homebuying Ages—NAR Data May Be Misleading (53:46–54:27)

• Recent data puts the median first-time homebuyer age at 39, but survey flaws may have overstated this—“the data is faulty” [54:17].

18. Private Credit, BDCs, and Alternative Investments (55:38–57:20)

• Schwab acquires Forge Global; big predictions for capital flows into alternatives.
• Ben: “Private markets to financial advisors is like AI to people—some just don’t want it.” [56:07]

19. Market Structure Stories: Blue Owl, Private Credit, and Risks (58:44–60:55)

• Blue Owl and BDCs suffering in public markets, skepticism rampant about private credit structures and merger issues. Forced fund mergers are causing up to 20% realized investor losses. [60:28, Michael]

20. Societal & Cultural Trends (60:58–62:06)

• Marriage & Divorce: Fewer young people are marrying early, and divorce is in decline. Hosts see delayed maturity as positive. [60:58–62:18]

21. Retirement Contributions Update (62:22)

• 401k and IRA contribution limits are going up in 2026: new 401k max at $24,500.

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Notable Quotes & Memorable Moments

• Michael: “Corrections only look healthy in other people’s stocks.” [05:49]
• Brad Gerstner (via Michael): “AI is becoming deeply unpopular in America. ...Republican Senators say they're afraid to mention the words AI because their popularity ratings go down.” [07:45]
• Ben: “If that was it, that was the worst bubble ever.” [04:12]
• Michael: “A trillion dollars is so hard to wrap your head around. Tim Cook since he became CEO…$700 million a day in market cap added.” [10:28]
• Ben: “There's a difference between making a legendary trade and being a legendary investor.” [21:46]
• Michael: “All of the growth in the economy is happening because of the hyperscaler spending.” [40:24]
• James Dyson via Michael: “Everything changes all the time, so experience is of little use.” [46:51]
• Ben: “A 30-year fixed-rate mortgage is one of the greatest financial inventions…” [53:15]

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Timestamps for Important Segments

• 02:25 – Is the AI bubble over?
• 05:49 – Healthy corrections and personal anecdotes
• 07:45 – AI’s unpopularity and Main Street skepticism
• 13:05 – Oracle’s AI-driven volatility & market caps
• 17:26 – Speed of market cycles as the “new normal”
• 21:46 – Legendary trade vs. legendary investors
• 25:18 – The ‘great stuff transfer’ and practical advice
• 31:42 – Listening to conference calls: who to trust?
• 36:28 – Why inflation feels hotter than numbers show
• 40:24 – The economy’s reliance on hyperscaler tech
• 44:47 – When ‘compounders’ stop compounding
• 49:56 – What’s next for Bitcoin/crypto price action?
• 53:15 – 30- vs. 50-year mortgages: social impact
• 56:07 – Private credit adoption and market resistance
• 60:28 – Forced mergers and investor losses at Blue Owl
• 62:22 – Retirement savings limit increases

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Tone and Style

Michael and Ben’s style is conversational, analytical, and laced with wit and sarcasm. Their banter keeps the pace lively as they shift from serious macro debate to personal stories to industry inside baseball, all in a tone that balances skepticism and curiosity.

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Conclusion

This episode is a must-listen for anyone interested in the intersection of AI, market cycles, and societal issues, served with candor and humor. Michael and Ben offer timely context behind the numbers, question prevailing narratives, and remind listeners that market wisdom is ever-evolving—and often, nobody truly knows what’s next.

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Contact & Survey:
The hosts urge financial professionals to fill out their survey (see show notes) to help shape future content.

Next Up:
Look for an upcoming episode on the real age of first-time homebuyers, new market structure stories, and a dive into the media landscape.

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Note: Ads and non-content sections were omitted for clarity and brevity.

Transcript

[Michael Batnik]

This message is brought to you by Nuveen. What does it mean to Invest like the future is watching? As one of the largest global investment leaders managing $1.3 trillion in public and private assets, Nuvian is uniquely positioned to take on tomorrow today.

[Ben Carlson]

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[Michael Batnik]

That's why Y Charts released their new Great Wealth Transfer Deck, helping advisors bridge that gap with client ready visuals that make inheritance and next gen investing easy to explain. And on November 19, our very own Nick Magi is teaming up with Y Charts for a live webinar to show how top advisors are preparing for the shift and how you can too. Register for the webinar with a with the link in the show notes and get 20% off your initial Wide Charts professional subscription when you start your free Wide Charts trial through Animal Spirits New customers only.

[Ben Carlson]

Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnik and Ben Carlson as.

[Michael Batnik]

They talk about what they're reading, writing and watching. All opinions expressed by Michael and Ben are solely their own opinion and do.

[Ben Carlson]

Not reflect the opinion of Ritholtz Wealth Management.

[Michael Batnik]

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. We have one request of you, please. If you are a financial professional advisor, investment manager, Portfolio manager, analyst, we want you to take our survey. We put it out last week. We're gonna do one more Plug in the Show Notes, click on the Show Notes and wherever you listen to your podcast go to irrelevantinvestor.com or a wealthofcommonsense.com there'll be a survey. We wanna hear from more financial professionals.

[Michael Batnik]

And also anybody else who missed it the first time around. We'd love you.

[Ben Carlson]

All right, I got a take here. So the mark market is rolling over. The speculative stuff is getting dinged pretty good. I, I had this take here before this stuff all kind of started happening. There's no euphoria in this, this market. This is like a, kind of. It feels this year like a joyless bull market. And so it doesn't like the, for all the bubble talk and everything, like, this is going to be crazy. I don't think we ever got to a euphoric phase. So, like, hey, I disagree. Okay, let's hear it.

[Michael Batnik]

So there is obviously no euphoria today. However, over the summer and into the fall when OpenAI was making announcements with everybody and Oracle, for example, who stocked, jumped 25% on the day, there was absolutely euphoria. Now it's not here anymore, but one of the largest market caps in the stock market, adding several hundred billion dollars overnight or whatever it was. That was, that was absolutely euphoric behavior.

[Ben Carlson]

Do you feel like anyone wants a bubble? Like anyone is happy about it?

[Michael Batnik]

Wait, hang on. Do you disagree with what I just said or are you. Yeah, actually that was euphoria.

[Ben Carlson]

I guess that was like an overreaction. But again, I think the euphoria is in the tech CEOs, not the, not the end investor.

[Michael Batnik]

Well, certainly not anymore. It's over. Whatever, whatever euphoria we had is, is gone.

[Ben Carlson]

Listen, if, Listen, if that, let's say that was it, that was the height of the AI craziness. If that was it, that was a weak bubble, okay? That was nothing.

[Michael Batnik]

Okay, so let me, let me ask you this. What is it over?

[Ben Carlson]

No way. It can't be. There's no way. If that was it, that's.

[Michael Batnik]

No. I love it. I love it. I love it. Ben. Finally a take.

[Ben Carlson]

No, I'm saying if that was it, that would. Then this is. That was the worst bubble ever. Because we didn't. We never got the excite, exciting part. Like, like the really big blow off top. Come on. If that was it, that was weak. That was not a good. It was not a good bubble.

[Michael Batnik]

I agree.

[Ben Carlson]

Bubble ever.

[Michael Batnik]

I agree. I would say, I don't know, 75% confidence. That wasn't it.

[Ben Carlson]

I think whatever's whatever is healthy.

[Michael Batnik]

This is a very healthy reset. You need skepticism. You need the wall of worry. Unless it's time to worry, then you don't need it.

[Ben Carlson]

And you can't have these massive gains in these junky stocks forever. There's no way that could have continued.

[Michael Batnik]

Yeah, the difference is that the fear not difference, the fear seemed warranted. I'm not going to completely sweep them, sweep them under the rug. The fears are warranted, they're justified. The pullback is healthy. And also that wasn't the top.

[Ben Carlson]

How about this? I think the whole everyone there's so much skepticism about like, gosh, this is good. This is a bubble. Expectations are being pulled forward. I think that mindset is actually good for this whole thing.

[Michael Batnik]

Yeah, it's keeping a lid on the euphoria.

[Ben Carlson]

I really, I really do think it's actually like kind of. So who created the dj? Was that. Was that you and Josh? Okay.

[Michael Batnik]

Not me.

[Ben Carlson]

So Matt updated this for me through yesterday and this is like the biggest degenerate stocks you can think of. Quantum computing and the meme stocks and all this stuff. And so that this basket, I think he equal weighted them, is down 20%. The S&P is down 3. It's kind of funny. The S and p is down 3% in this whole thing. So obviously a much bigger drawdown. And if you look at through the individual names, it's way worse. The roundhill meme stock ETF is down from a high of 11 to 6.2. So that's 40% drawdown. Some of these stocks are getting absolutely.

[Michael Batnik]

Oh, yeah, there, there is. I've said this before, I'll quote myself again. A healthy. Corrections only look healthy in other people's stocks. If you own, if you own. A lot of these stocks started getting mauled and there's a lot of stocks that are down more than 30% like mega ones that Josh and I are going to talk about on. What are your thoughts tonight? It doesn't feel so healthy.

[Ben Carlson]

Yeah, we're talking like 30, 40, 50 declines in a lot of these names, but some of these stocks are still up like 100 on the year. So it's. I told you this. I heard a about someone who said, hey, my husband has been trading quantum computing stocks all year. He made like a million dollars. And it's like that. Come on, you can't have it be that easy in this junky stuff. So I think this is all a good thing.

[Michael Batnik]

You know what I think part of the overall story and why there's so much skepticism? Like the Economist has this pat on the COVID last week. How much.

[Ben Carlson]

This is my, this is my euphoria thing. The media is not trying to stoke on euphoria. That was, that's the biggest difference between now and the 90s. In the 90s, the media was all in on the euphoria. This is, this time it's not. It's so skeptical.

[Michael Batnik]

So Gavin Baker tweeted Sam Altman's manifestly ridiculous $1 trillion spend. The commitment shifted the investing landscape. The market is more skeptical now, ironically makes an IPO harder for them. Also likely ended any potential for a 1999 style melt up, which is healthy. I agree with the last part, which is healthy. I don't, I don't think the, I don't think the 1999 melt up is off the table. But Paul Graham, very much a Silicon Valley dude, said if you invested at the peak of the NASDAQ in March 2000, it would have been roughly 18 years before you were whole again, 15 years before the index reached the same point, plus another 3% for inflation. So I think that the, the euphoria is Amongst the hyperscaler CEOs, as you mentioned. They're, they're, they're not relenting and everybody else is skeptical. And I think part of the bigger, bigger picture story is, of course, overall skepticism of AI and IT taking people's jobs. Matter of fact, let me, let me, let me play this clip. This is, this is Gavin Baker, not Gavin Baker, I'm sorry, this is Brad Gerstner on the all in pod. One of the major concerns I have is that AI is becoming deeply unpopular in America. Silicon Valley is losing the battle around AI. Doomers are now scaring people about jobs. They think all these job cuts that are going on in America are the result of AI. And number two, they're seeing their electric bills go up and they think that's also the result of AI. I've talked with a lot of Republican Senator and House members who say they are afraid to mention the words AI because their popularity ratings go down. So there is skepticism everywhere. It is, as Brad mentioned, deeply unpopular. And it's part of this broader story of corporate America outpacing Main Street America. And people are sick and tired of all of the gains in the economy seemingly accruing to the Mag 7. People are just over it.

[Ben Carlson]

Imagine being in a blue collar job and thinking like, why should I, why should I want this technology to come here and take and make things worse.

[Michael Batnik]

Yeah, nobody, nobody's, nobody's rooting for it, except for Altman and Satya, who is doing four podcasts.

[Ben Carlson]

But the thing is, all the skepticism we've had, remember when the deep seek thing happened, it's like, oh my gosh, it's over. Every time one of these hiccups happens, and people say it's over. Do you think that's stopping Mark Zuckerberg from investing in this more now, people, the investors could continue to sell the stock and that would maybe slow him down a little bit. But it doesn't seem like these CEOs care about any of the skepticism.

[Michael Batnik]

Mark's not stopping. Look what he did with Reality Labs. Look how far he pushed that. What was that? Tens and tens of billions of dollars of losses.

[Ben Carlson]

All I'm saying, it's like, come on, if that was the end of the bubble, then that was. It doesn't really count.

[Michael Batnik]

That was weak.

[Ben Carlson]

All right, Healthy correction. That's where I stand. Stamp it. Healthy correction.

[Michael Batnik]

I agree. I tweeted this chart that I had Chart Kid create and I took this idea from Dan Wang's Breakneck, I believe. Or maybe it was Apple in China. Actually. Actually, I think it was Apple in China. The numbers here are so insane. So there was tratter over the weekend that Tim Cook's run may be coming to an end. The numbers here are so insane that they literally. It doesn't seem right. I had a lot of people fact checking me, like a lot of people. I'm not mad. It does. The numbers don't seem right. And I think what this does. We mentioned that there's no euphoria. Maybe the euphoria was in the market cap. Even though Nvidia, the forward PE kept going down because they were exceeding earnings expectations. $5 trillion is a lot of market cap. A trillion dollars is so hard to wrap your head around that Tim Cook, since he became CEO, added which was what, 2011. 2011. So every single day. Not every market day. Every single day. And I believe the market Cap was like $350 billion when he took over.

[Ben Carlson]

Yeah, it looks about right.

[Michael Batnik]

Was that about right? Okay.

[Ben Carlson]

Yeah.

[Michael Batnik]

$700 million a day, Ben. $700 million a day in market cap added.

[Ben Carlson]

So I don't think people remember at the time, but when Steve Jobs passed away, Apple had a little bit of a sell off. And everyone's going, oh my gosh, this company is done right? And contrarian guy catching the flying knife. I went in, I bought Apple then in 2011. Yeah, but I blame you. I sold it in 2015. When I came over to Ritholz, I moved all my money over and I said, I don't. I had. The only two stocks I owned were Apple and Google in 2015.

[Michael Batnik]

And I said 2015.

[Ben Carlson]

They were both overvalued, obviously, but I don't think people forget that People were so skeptical of Apple. Like, oh my God, if Steve Jobs is gone, how is this company ever going to perform? It's over.

[Michael Batnik]

He's, he's a manager. He's, he's, he's not an engineer. Like what does he know?

[Ben Carlson]

So wait, you, but you posted this on Twitter and then it went viral and Elon Musk's replied to it. So you're, you're, don't even look at your replies today.

[Michael Batnik]

Yeah, Elon said impressive. And it is, it's, it's a wild, it's, it's a wild, wild stat. All right, back to the AI hate. So this week from the Wall Street Journal. Wall street blows past bubble worries to supercharge AI spending frenzy. Also from the Wall Street Journal, when AI hype meets AI reality. A reckoning in six charts. There is, there is definitely skepticism all over the place and, and in, and not in like journalism news like let's look inside the market, what investors are actually doing. Lisa Abramowicz tweeted. Tech bonds are getting hit hard of late as debt traders start wondering if they're getting left with a bill for the stock market's enthusiasm. Oracle's 3.5 billion of 30 year debt issued in September has cratered by 8% from the October peak.

[Ben Carlson]

Okay, you can't say cratered when it's an 8% loss.

[Michael Batnik]

It's a bond. It's, that's a crater.

[Ben Carlson]

Cratered.

[Michael Batnik]

Come on.

[Ben Carlson]

Declined.

[Michael Batnik]

That's a crater. All right, on the, on the positive.

[Ben Carlson]

Fund, Oracle is the one of them that actually has taken out a lot of debt. Right.

[Michael Batnik]

On the positive, fundamental side.

[Ben Carlson]

Now listen, I think, I can't, I can't have Oracle crash because Larry Ellison has to fund me a new college football coach when Michigan fires Shiron Moore. So I can't have Oracle crashing.

[Michael Batnik]

I bought the crash. Hand up. I bought.

[Ben Carlson]

Who did you buy?

[Michael Batnik]

I bought Oracle. I, I, I sold Disney finally and I bought Oracle.

[Ben Carlson]

How much did they fall by?

[Michael Batnik]

30 something percent.

[Ben Carlson]

Oracle is down 30%.

[Michael Batnik]

Okay, well, how's this Another, another one from this morning. Where, where's this chart?

[Ben Carlson]

Yeah, you're right. Oracle's on 30. It's, it's crazy when you look at the, and we're going to look at this in a little bit, but when you look at the drawdown profiles for tech stocks or pretty much anything, all these had 30 or 40% crashes in April. Then they came roaring back and now they're down 30% again. It's, this year is a wild year in terms of volatility.

[Michael Batnik]

Where is this chart? Oh, here. Okay. Financial Times this morning the headline was like the AI Trade Oracle is now $60 billion negative or something like that. Look at this chart. It's a little bit lower in the deck. Oracle Market Cap September 10 Pre Market Oracle and OpenAI announced a $300 billion AI data center agreement deal. Shares close up at an all time high, up 37%. All right, that was a euphoria. Up 37% of the day. 37% for Oracle.

[Ben Carlson]

That was, that was, that was nuts. You're right, those numbers were insane.

[Michael Batnik]

Shares close 8.8% below their price pre the open a ide deal announcement. A loss equivalent to 60 billion in market cap.

[Ben Carlson]

Do you think part of the AI skepticism is not just the fear of job loss, but it's like we live. Everyone has seen what social media did to tear apart the fabric of society and they're like, do we really want to do this again? We want to introduce this technology that has the capabilities to tear apart society. But guess what are we really going to do? That's the thing. We can't slow it down. So you can sell these stocks all you want. These companies are still going to, it's not going to stop. That's the problem.

[Michael Batnik]

Does OpenAI get to 50, $100 billion in revenue? I mean, they have to for this to work.

[Ben Carlson]

Will Microsoft allow OpenAI to fail? No, wouldn't See, that's the thing.

[Michael Batnik]

If there's, there's too much money on the line, we'll get to that. As I put a pit in this because I have more of Microsoft OpenAI later in the doc. All right, Patrick Collison, founder and CEO of Stripe, said, an interesting trend we're noticing at Stripe, US startups are pulling ahead of their peers elsewhere. You see these charts, Ben? All right, look in the doc. Software Startup Revenue Index. These charts showed average revenue growth for the software startups in each location. US startups typically grow somewhat faster than those elsewhere. However, since mid 2023, US companies have accelerated a lot.

[Ben Carlson]

I guess I would have just assumed this was always the case, though it seems like US startups have always outperformed.

[Michael Batnik]

He says, interestingly, this is not just because of AI startups. If we strip those out, there's still a big divergence. So here's their hypothesis. These US startups, even those that aren't AI companies, are adopting new technologies, of course, AI, stablecoins, et cetera, faster than companies elsewhere. This pattern of faster adoption among US companies was also seen with the Internet itself. Whatever the cause, the pattern is striking. I think, I think you're going to see it in the fundamentals. Yeah. I don't think the story is over by a long shot.

[Ben Carlson]

Here's. This is not an original take, but the tech industry is going to be the next financial industry. Think about how hated bankers were after the 2008 financial crisis. That's the tech industry. Now they are at the top of the perch. They are going to be the most hated industry after this is all said and done. Yeah, and it's not even. I don't think you can debate that like technology. The industry is going to be hated. They're going to be the villains. All right, Spencer Jacob from the Wall Street Journal had a post. Why we could use a good long bear market. Stocks have only experienced brief downturns over the past 16 years, creating dangerous complacency. And I think there's a lot of people who have this now.

[Michael Batnik]

That's true, but I reject that idea.

[Ben Carlson]

All right, let me, let me go through some of his stats, then we'll, then we'll just talk this out. Okay. He said. Long bear markets accompanied by recession discredit the last boom's wildest themes and its cheerleaders. They also remind us of what capital markets are for, mostly matching good businesses with patient savers and S eggs. The average time to reach previous high when bear market was accompanied by recession was 81 months. It took just 21 months without a recession. Over the past 16 years, downturns have lasted less than eight months before the old high was reached. Hardly Anyone younger than 40 now even had a 401k during 2007-2009. Wipeout. Most Wall street pros hadn't graduated from college yet. Bear markets are educational, but the tuition is a doozy.

[Michael Batnik]

Why do we need a recession?

[Ben Carlson]

Well, there's a lot of people who think we need to just clear the decks.

[Michael Batnik]

Clear the decks. Right.

[Ben Carlson]

Right. We need to start over, wipe the slate clean. I don't necessarily agree with that, but I guess the point is we need to have a slap on the wrist. You need to touch the stove, the hot stove every once in a while to understand, like, whoa, I can't. You can't take this much risk. It's. It doesn't make sense to take this much risk. And, and it's gonna, there's gonna be a comeuppance. I think that's the idea a lot of people have. I.

[Michael Batnik]

We've had it. We've had.

[Ben Carlson]

I understand this times my other Thing is, don't quote me on this. I really do think this.

[Michael Batnik]

I'm quoting you bad. Whatever you're about to say, I can't wait. Cause I'm quoting it.

[Ben Carlson]

I really do think that the speed of these recoveries, this is just going to be the new normal. I don't think we're going to have these extended 81 month. This is going to last forever. I think that is, I think we're past that. I think the speed of, of financial markets, the speed of information, the speed of technology means that these recoveries and these downturns are both going to happen faster than they did in the past.

[Michael Batnik]

Ben, look at this chart. So I'm looking at the drawdowns of this.

[Ben Carlson]

That was impressive that you just pulled this up on Riverside like that. How did you.

[Michael Batnik]

Thank you. I'm very good at this.

[Ben Carlson]

You're like Tom Cru, Minority Report moving things around and.

[Michael Batnik]

Okay, so let me throw this in the dock so the boys can grab it to Spencer's point. And I, I like Spencer. So what I'm about to say is there's nothing against him.

[Ben Carlson]

Yeah, he's, he's good.

[Michael Batnik]

Don't like the, don't love the take. All right. We had big long bare markets accompanied by recessions, both in the aftermath of the dot com bubble bursting and after the GFC, of course. Right. Stocks fell 50% and 57% respectively. That's the S and P. And we haven't seen a long bear market accompanied by a recession. However, look at all of these sell offs over the last decade. There's 1, 2, 3, 4, 5, 6. I mean there's a lot of them now. Sure. Most of them outside of 2020, which was a man made recession in 2022, which, you know, you could quibble with that recession or not. I happen to think it was. Most of them were, were short lived.

[Ben Carlson]

But wait, you're a recession truther now in 2022. When did that happen? You don't remember? At the time we were arguing this is not a recession.

[Michael Batnik]

Oh really?

[Ben Carlson]

Oh yeah. You turned into recession. Here's the thing.

[Michael Batnik]

No, no, that, that in and of itself we could spend 20 minutes on that. I don't know. I don't know that I want to declare that it was reception.

[Ben Carlson]

You sound like one of the reply guys to me at my Twitter.

[Michael Batnik]

No, you're right.

[Ben Carlson]

Session.

[Michael Batnik]

There was a lot of nuance in there. There was, there was.

[Ben Carlson]

You can't have a recession with 3.5% unemployment.

[Michael Batnik]

You're right. Nope. I will see the point one that is accurate for sure. There were industries in recession, big ones. Technology.

[Ben Carlson]

There always will be, though.

[Michael Batnik]

Technology, no, but technology. Monster industry. Tons of layoffs. Real estate, housing, Iceberg recession. Iceberg recession, Deep ice recession and arctic recession.

[Ben Carlson]

Diversity.

[Michael Batnik]

Right. Was the economy session. I would see the point. You're right, it wasn't. But. But the point is investors need a reminder that risk. Risk exists. How many reminders do they need? They've. They touched the stove many times and got burned.

[Ben Carlson]

Here's the other thing here. Those 2000-2002 and 2007, 2009, those events are very rare.

[Michael Batnik]

Right.

[Ben Carlson]

They don't happen all the time. You don't. You don't get those once a decade.

[Michael Batnik]

Yeah, those.

[Ben Carlson]

Get those once every two to three decades.

[Michael Batnik]

Yeah. I don't think we need. I don't think we need those.

[Ben Carlson]

No, those, those like reset the system things. 2008 could, might, might be a once in a lifetime crash for us. It might be. Those things don't happen that often because think about 1990. This is on his chart right here where he talks about monster. Previously there was a recession in 1990. There was a savings and loan crisis. The real estate industry was very bad in the night. It wasn't. It's kind of a forgotten recession. The S And P fell 19%. It didn't fall. It didn't fall 50. It didn't fall 60. So there's these times when you can get a recession and not have the whole system crumble beneath your feet.

[Michael Batnik]

Yeah, I would, I would, I would suggest that we probably in our lifetime, I would say, like, I don't know. Minus 175. We'll see another 50% feel pretty strongly about that. Yeah, but do we need one? Like, is any. Is anybody going to be better off because of one? Absolutely not. We should avoid that like the plague.

[Ben Carlson]

I think there is. There is this feeling from some people that, listen, we need to re. Everyone needs to get a slap on the wrist and people need to experience pain. But not me. I'm not going to experience pain. I'll be fine. Right. People. I think a lot of people who want this, like, system, that they'll be okay.

[Michael Batnik]

They want, you know the scene in Jurassic park where Samuel L. Jackson says, hold on to your butts.

[Ben Carlson]

Yeah.

[Michael Batnik]

And he reboots the system. People, many people are rooting for that.

[Ben Carlson]

Yes.

[Michael Batnik]

And I guess what then Sam Jackson is left with just an arm. Just an arm.

[Ben Carlson]

Careful. Did he get his arm chewed off? Okay.

[Michael Batnik]

Remember Laura Dern? She's just holding his arm.

[Ben Carlson]

Oh, yeah, that's it.

[Michael Batnik]

You don't want to be just the arm guy.

[Ben Carlson]

All right, let's talk about Michael Burry. So he put out a note last week saying that he's closing down his hedge fund, which I didn't even realize is still open. And I want to make this point here. There is a difference between making a legendary trade and being a legendary investor. Warren Buffett is a legendary investor. Right. Julian Robertson, legendary investor. There's a lot of people I could name. Stanley Drucken, Michael Burry. And a lot of the people who came out of the 2008 crisis were made a legendary trade. Right. John Paulson made a legendary trade once in a lifetime.

[Michael Batnik]

Unreal.

[Ben Carlson]

Couldn't, couldn't. Couldn't do it again. Right. He did all these other things, and it didn't work. And honestly. So Michael Burry has been. He's. In 2021, he called for hyperinflation. In 2019, he called for an index bubble. He said to sell, like, a million times. I listened to. Michael Lewis has his podcast on. He's been doing this retrospective of the Big Short, and he pulled all the people from the book, and he's interviewing again, like Greg Lippman. He's. And he's interviewed all the guys who worked with Steve Eisman. I can't remember all their names. And he interviewed Steve Eisman. And it's funny, because when you hear these interviews, these people are almost nostalgic for that period. And I feel like Michael Lewis, in a way, feels nostalgic. Like the people who called that crisis.

[Michael Batnik]

Oh, they were gods.

[Ben Carlson]

Yeah. And they feel like they want it to come back. Like, they miss that period. And so Michael Burry last week tweeted out a picture of Christian Bale playing himself in the Big Short movie. How could you have that experience where you're the star of this bestselling book and then Christian Bale plays you in a movie? How could that not mess with your head?

[Michael Batnik]

Yeah.

[Ben Carlson]

And how could you not want to call the crash all the time after that?

[Michael Batnik]

Yeah. I mean, when you're on the top of the mountain, there's only down to go. Like, that's it.

[Ben Carlson]

How could that not screw with you? So, again, these people made legendary trades. That does not make them legendary investors. And it seems like Eisman is really the only one who pulled out of that vortex of the negative. Right. And kind of. But, you know, none of these people ended up, like, having. You don't know how their results have been since then. Because they probably haven't been very good. You'd hear about it if they were like compounding capital. 20 a year since the great financial crisis. Then it's like, oh, my gosh, these people are legendary investors. They shorted the housing market and then they turned around and made money on the other side too.

[Michael Batnik]

There's another takeaway. Don't listen, don't follow what these people say. Because I think I saw Science Performance tweeted recently and it was fine. Despite everything that he said that has been wrong publicly. It doesn't matter. They're not making an opinion and then sticking with it come hell or high water. Like, right. They're, they're trading, they're, they're, they're moving around. They're responding to the market.

[Mark Lipschultz]

Right.

[Ben Carlson]

So they say this is a bubble. They're not going to cash. And.

[Michael Batnik]

Right. So, so take what they say with a grain of salt. It doesn't matter who they are. Remember, in 2020, it was Druckenmiller. I can't remember who else was saying it. That, like, this is the worst.

[Ben Carlson]

Yeah.

[Michael Batnik]

Environment they've ever seen and it's going to get a lot worse. It was, it was all of the geniuses.

[Ben Carlson]

Yes. That's the point. Just nobody knows when these people make their predictions. Just. I. But yeah. So there's a difference between making and. I honestly think we're, we're gonna have more of this where people make legendary trades as opposed to being legendary investors. Like, we're never getting another person who has a track record as long as Warren Buffett.

[Michael Batnik]

No, that's impossible.

[Ben Carlson]

I can, I can say that'll never happen again.

[Michael Batnik]

Never. No, that will never happen again. All right. Boomers are passing down fortunes and way, way too much stuff. Bloomberg wrote an article about the great stuff transfer, as it's being called.

[Ben Carlson]

Great idea. Right? This, this is the, the idea of the story. Kudos to Bloomberg on this one.

[Michael Batnik]

Great idea. I remember when my grandfather died and he had no money, lived in a tiny apartment in Florida. Whatever. 1500 square feet, whatever it was, maybe even smaller. And I remember cleaning that out was a bear. Cleaning out three four bedroom houses is going to be a lot.

[Ben Carlson]

Yeah. So I think what you have to invest in in the coming years is dumpster rentals. How do you invest in dumpster rentals? Because think about all the stuff you're gonna be throwing. So they talk, they give all these stories about people throwing stuff away. Baseball cars in China and collections and hoarding stuff.

[Michael Batnik]

Cold wallets.

[Ben Carlson]

But think about all the Renovations that are gonna have to be done on these houses that people have lived in for 40 or 50 years. Like, honestly, like, I'm gonna start a dumpster rental company, you know? Cause when you do a renovation, they put the dumpster in your front, in your driveway, right? And then everyone in your street, all your neighbors have to ask, hey, what are you guys doing over there? Right? Everyone has to ask. So I put it. I put some pictures in here of my stuff. So my dad has all these baseball cards and football cards from like the 1950s and 1960s. Check some of these out. I found these pictures that I had last time I went there.

[Michael Batnik]

Mike Schmidt, classic mustache guy.

[Ben Carlson]

So we're talking, he's got Willie Mays, Pete Rose, Al Kaline, Roberto Clemente. Yeah, Mike Schmidt.

[Michael Batnik]

I feel like Mike Schmidt. Mike Schmidt drank a million beers. He was definitely a here comes trouble guy.

[Ben Carlson]

I think it's a Nolan Ryan rookie card. I. I put this into chat GPT and I said, hey, are any of these things worth anything? And they're like, listen, if the edges are frayed, probably not. They're probably worth a couple hundred bucks. But he's got some really good ones from like the 50s, 60s. So that. That's what I'm going to walk away with someday.

[Michael Batnik]

Great.

[Ben Carlson]

That's my stuff. But yeah, I say go long. Dumpster rentals for. For renovations too.

[Michael Batnik]

So Ben and I did a podcast with Derek Thompson on the topic of are young people screwed? And there's a lot of companies that are blaming the weakness in young people for their woes. A lot of the bull companies, Chipotle, Kava, they're not mentioning their over expansion. They're not mentioning how expensive.

[Ben Carlson]

Such a cop out, blaming young people.

[Michael Batnik]

Yeah, they're not mentioning how expensive their sloppies were. So who do you trust? And listen, there's. There's obviously lots of shades of gray here, but Chipotle or so far, so so far, who would. I would say probably cater. Not probably so far, definitely caters to that audience. Anthony Noto, CEO, said, we've seen very strong performance of credit, so we're really not seeing any deterioration in the consumer at all.

[Ben Carlson]

Right. So it's consumer choice. Not that they don't have any money.

[Michael Batnik]

Right.

[Ben Carlson]

And you were early to that train you got off Chipotle, like three years ago.

[Michael Batnik]

I really was.

[Ben Carlson]

Now you're coming back. See, you're.

[Michael Batnik]

No, no, no, no, I'm not coming back. And in fact, I have no interest in dumpster diving in the stock. I listen to the Current.

[Ben Carlson]

So how much is the stock down 50%.

[Michael Batnik]

Tons, tons, tons. I listened to the conference call. You know, I think, I think this is the quarter that I've listened to more conference calls than I ever have. And I'm not saying that there's necessarily like quantifiable edge here, but I, there.

[Ben Carlson]

Is definitely quantifiable insight 55 drawdown. This feels like a stock every time it falls 50%. Like it's a screaming buy.

[Michael Batnik]

Yeah, well, not this time. I'm not buying it. You know why? I don't, I don't trust the CEO at all. Not for a second.

[Ben Carlson]

That is true. They have the new like because their CEO left and went to Starbucks. Right.

[Michael Batnik]

Not for a second.

[Ben Carlson]

So I listen because of the fact that he is like pulling a sleight of hand and not being honest. You don't trust him? I don't trust him blaming young people.

[Michael Batnik]

Okay, no, that was in the opening remarks. And I, and the, and the Q and A. I just, I didn't like, I did not like what I heard. So last night on this topic, I listened to Apollo, legendary founder investor Mark Rowan and I listened to. And Apollo is one of the biggest private credit players in the market. And I listened to Blue Owl's Mark Lipschultz who was clapping back at Jamie Dimon. And Mark Rowan was asked about the opportunity in wealth management and the pushback, specifically with rates coming down. How attractive is private credit? Listen to this answer from Mark Rowan.

[Mark Lipschultz]

Private lending was a better business four years ago and three years ago and two years ago and last year, by the way, I wished I owned Nvidia four years ago and three years ago and two years ago and last year. This is fundamentally what people fail to understand. The rotation into private credit is a rotation out of equity. That is what investors are doing. That is what we observe. They are making a decision to take risk off because they perceive the ability to earn long run equity returns in first lien debt, top of the capital structure as an attractive opportunity. But I think we cannot as an industry deny that there was more value, just like there was more value in the equity market.

[Michael Batnik]

Okay, Right. The guy's big answer. The guy is telling the truth. That is a phenomenal answer. I don't have to repeat what he just said. You just heard it. He's telling you the truth. Okay, now contrast that with the, with Mark Lipschultz when he was asked a similar question about how investors should think about what's going on. And by the way, I think we have Blue Hour later than Doc. Not. Not pretty. What's going on in that stock? All right, so Mark Lipschultz, when he, he sounds defensive, he sounds antagonistic. All right, so an analyst asked a question about some of the publicly traded BDCs which are getting murdered. So tell me if this answer makes you feel better or worse as an investor, Ben.

[Mark Lipschultz]

So as to what investors don't understand, it's probably hard for us to, you know, to give you a comprehensive answer. You obviously talk to a lot of investors. We can offer some theories. I can certainly tell you what we're doing. We're doing two things that I think at the end of the day will solve this problem. One, we are executing, executing, executing. Business is good. Business is continuing to be good, and we're focused on continuing to deliver. We haven't seen an opportunity as good for investors and by extension for Blue Owl as the digital infrastructure investment cycle that we're in. And so we're just going to continue to deliver results for investors and continue to deliver.

[Michael Batnik]

Oh, you're just going to continue to deliver. To continue to deliver. And business is good. Really? If business is so good, why is the stock down 48%? Why is the BDC down? Whatever it's down. Why are you merging some of the funds? Why are you getting, I don't know if they're getting redemptions. Why are they limiting redemptions? So you, you listen to these people and it gives you some sort of insight as to who you want to put your money behind. I think it's incredibly valuable.

[Ben Carlson]

Listen, so someone, I think someone asked us that a few months ago, like, what do you actually get out of these earnings calls? That, and that, that's like, are they being level with you? And I, this was always the thing for me when, when we, when I used to be in a manager of managers business and I'm picking the managers to outperform or whatever. The ones that I appreciated the most would tell you straight up when they were underperforming. Listen, this isn't our cycle. We're out of style right now. Or listen, we missed it, we missed it. But whatever the trade was, we missed it. We're not in what's working right now. As opposed to the people who make excuses and say it's the Fed or we would have been right if only this would have happened. I always appreciated the people that would level with you and be honest with you, the people who BS you like that guy. You can't trust them to tell it to you straight. So how are you gonna trust them to run a company?

[Michael Batnik]

Okay, back to. Sorry for the tangent on the sofa thing, but back to what we were talking about. Here's a good chart from Apollo. About 5% of the U.S. population are experiencing third party collections. The blue line is the dollar amount and unfortunately the dollar amount is up and to the right as everything has gotten more expensive. No surprise there. But look at the, look at the proportion of consumers with collection, which is the green line, Ben. Now it is going up, but off. Historically, literally, historically low levels, way low.

[Ben Carlson]

That is pretty crazy. Okay, so it went from a high in the mid 2010s of 15% now down to like 5%. Okay, remember a couple weeks ago I said, hey, listen, when the stuff starts getting disrupted and the economy slows, they're going to take some of these tariffs off as a form of stimulus. It's already happening. Trump administration is preparing tariff rollbacks on goods from countries beyond those that have reached agreements with the US in an effort to lower prices. I think they're looking at coffee and food and some of these things. Do you think that the White House saw the, like, employment data and got a little freaked out or saw the, whatever data that we didn't get and said, all right, you know what, actually we're going to pull these off, but this makes sense that this would happen, right?

[Michael Batnik]

I don't know. I don't know their motivation. I do know that last week when I was in Washington, D.C. it was very eerie. It was an absolute ghost town. I had a great time, by the way. You know, I love to wake up early, walk around cities. I was listening to the Harry Truman book.

[Ben Carlson]

Man, what a wonderful walkable city D.C. is. Right?

[Michael Batnik]

Phenomenal. Harry Truman, who actually redid the White House, who was the first, like president to really invest in the White House and say, wait a minute, we had to up our game here. Did you know this is news to me because I don't follow politics like this during the shutdown because I have a friend who works for a congressman. The Congress people, the elected officials were getting paid.

[Ben Carlson]

Yeah, isn't that the worst thing?

[Michael Batnik]

And my friend hasn't had a paycheck in seven weeks.

[Ben Carlson]

People in TSA aren't getting paid. Weren't getting paid, but the politicians were. Isn't that awful?

[Michael Batnik]

I think everybody agrees it doesn't matter where you, where you are. Absolute horseshit.

[Ben Carlson]

The politicians should not be able to hold the country hostage because they can't come to an agreement.

[Michael Batnik]

Absolute garbage.

[Ben Carlson]

All right, what's the Chardonnay Price.

[Michael Batnik]

Okay, this is Ben. Once in a while you get a new blogger. It's rare these days. I feel like the heyday of bloggers is long over. Although sub stack, actually, maybe that's not true. Be that as it may, there's this guy who writes a blog post, a substack called Chart Nay. I believe that we referenced him a couple of months ago. So he has this incredible chart that looks at CPI which includes obviously a basket of goods. But. But what he did was he looked at, hey, let's take away some of the things that are not like everyday inflation. Let's take out used cars, let's take out some durable goods, washing machines. Now it's not that these don't matter, because they do. But he wanted to focus on like everyday inflation, the stuff people really think about. I mean, this chart is just magnificent on the eyes. So these are the TLDRs. So. So he said, television's gone, mattresses out, used cars get lost. So what was once 338 lines suddenly became about 40 lines of goods and services that show up in an everyday budget. Okay. Before the vaccine rollout, official inflation and my index were basically indistinguishable. Right? Same thing. Once inflation picked up, the official numbers started to come in much hotter than what my index showed. Likely because used cars were in red hot in 2021. In 2022.

[Ben Carlson]

Oh yeah, it's probably. Housing was probably a big part of it too.

[Michael Batnik]

Since then, I think that's an everyday type of expense. Since since then, the Chart Nay price index has been running about 1 to 2% hotter than the official CPI. Lately though, they've started to converge. And I think this is what people are talking about when they say CPI is not whatever percent it is. Like I feel it feels higher. And guess what? Yeah, it probably is.

[Ben Carlson]

Well, no it isn't. But it's. It's just the stuff you're buying feels higher.

[Michael Batnik]

Well, yes, that's the same thing, the.

[Ben Carlson]

Buying more often though.

[Michael Batnik]

But yeah, things that you buy every day are higher than.

[Ben Carlson]

No one ever feels like the aggregate economic data is them because their personal experience is true. No one. So no one, no one ever believes the inflation numbers.

[Michael Batnik]

True.

[Ben Carlson]

If you're, if you're, if you just bought a used car, you go, inflation is out of control. People on a television sheet, you go, oh my gosh, deflation.

[Michael Batnik]

I'm thinking a lot about my new car these days. Oh, forgot to mention this. I got into an accident.

[Ben Carlson]

Oh, what happened?

[Michael Batnik]

So I haven't been in an Accident since I was like, 19 years old. I'm in Dicks.

[Ben Carlson]

Whose fault?

[Michael Batnik]

When I was 19.

[Ben Carlson]

Oh, now.

[Michael Batnik]

Oh, you tell me whose fault it was.

[Ben Carlson]

Okay.

[Michael Batnik]

It was a one car accident.

[Ben Carlson]

You hit a light pole?

[Michael Batnik]

Yeah, I'm in the. I'm in the. I'm in the. The park. The parking lot in Roseville Field. Going to Dicks with Kobe and pole came out of nowhere. I honestly don't know what I was thinking. Like, I. I just didn't see it. And it was literally. It was.

[Ben Carlson]

You're backing up or you're going forward?

[Michael Batnik]

No, I was going straight. It was right in front of me. It was like a handicap hole. And I saw it. I slammed on the brace and Kobe's like, daddy. So I get out and not, like, not damaged, that I'm, like, taking to the body shop, but like, yeah, it looks. I mean, my car is definitely.

[Ben Carlson]

So you decided that your car wasn't underwater enough? You had to, like, make it even more underwater?

[Michael Batnik]

I. I just. I don't know. I was. I think. I. I don't know if what happened, but I went into. Went into a poll. So I've been. Anyway, I've been thinking about what car I'm going to get a lot as my car lease comes due. I think I might get a. A Jeep Grand Cherokee. Not a. Not a hybrid, just a straight up gasoline Jeep Grand Cherokee.

[Ben Carlson]

Okay. I feel like you've changed your mind on this, like, 13 times. From a Range Rover to a Toyota.

[Michael Batnik]

Yeah.

[Ben Carlson]

Now we're at a ch. Okay.

[Michael Batnik]

Right down the fairway. What do you think about that?

[Ben Carlson]

My mom used to have a Cherokee and I drive it all the time. I loved that car. Yeah, that's a great car, right?

[Michael Batnik]

It works A to B. Yeah.

[Ben Carlson]

All right, let's talk more AI stuff.

[Michael Batnik]

Yeah. So Bezos, Project Prometheus coming out of the gates with $6.2 billion in funding. I guess he's not going back to Amazon. I guess I could put that hot take to bed.

[Ben Carlson]

Duncan wants you to get a Lexus.

[Michael Batnik]

A Lexus?

[Ben Carlson]

Yeah.

[Michael Batnik]

Somebody did tell me to get the Lexus, the TX or the gx. I can't remember which one.

[Ben Carlson]

But let's say you're in a. You're a technology guy like Bezos been in your whole career, essentially. Like you're gonna let this opportunity pass you up and not get involved. Of course you got involved.

[Michael Batnik]

Yeah. So it's so over. Come on. It hasn't even started. We don't even have the robots yet.

[Ben Carlson]

All right, so I liked so Jerry Newman was on odd lots with Joe and Tracy. And I liked, he had, he had kind of a contrarian take. And I don't know if I buy it, but he said, what happens if OpenAI gets hit by a bus? Right? OpenAI goes under. Microsoft's not a bunch of money. A whole lot of big companies are out a bunch of money. I don't think much happens to the economy in the dot com bubble. People were spending money for their options before they liquid. It was a much different dynamic. So he's saying like, so what if one of these big AI come? And I said, you know, Microsoft is not going to let them go out. Like none of these companies. OpenAI cannot go out of business. Microsoft would just consider if open.

[Michael Batnik]

I love a contrarian take because everything is consensus these days, including everything that we're saying.

[Ben Carlson]

Yeah, it was very, it was very contrarian. That's what I liked about it.

[Michael Batnik]

If OpenAI and I like that guy, he's, he's, he's smart and entertaining. But if OpenAI gets hit by a bus, we're in deep, deep trouble because.

[Ben Carlson]

Like the economy is, well, the stock market's gonna crash.

[Michael Batnik]

And you would think that. Not you would think, let me not hedge that the stock market crashing will have a deep impact on the economy, obviously. So deep.

[Ben Carlson]

I don't know, I don't know about deep. Just from OpenAI. I don't.

[Michael Batnik]

It's not just open AI. The entire economy is resting on the shoulders of these hyperscalers.

[Ben Carlson]

No, it's not. Get out of here.

[Michael Batnik]

No, I think it is the entire economy.

[Ben Carlson]

Come on, man, get out of here.

[Michael Batnik]

I will not get out of here. All of the growth in the economy is happening because of the hyperscaler spending grok.

[Ben Carlson]

Is this true? Actually?

[Michael Batnik]

So, okay, so in terms of like what OpenAI is actually paying Microsoft, this is from the Financial Times. So the, the, the, the OpenAI quarterly inference cost at Azure. Now this is, this is only inference. It is not the more expensive part of the AI story. So they said. OpenAI appears to have spent more than $12.4 billion at Azure on inference compute alone in the last seven calendar quarters. So forget about the promises that have been made to Oracle and every other company on the street. Where do you think all of the beat from Nvidia is coming from? It's coming from the promise of these LLMs and what they're going to deliver. So the entire market rests on the shoulders of OpenAI not getting hit by a bus.

[Ben Carlson]

So speaking of Microsoft and CEOs are tell like it is. Satya Nadella was on the Dwarkesh podcast and it was so refreshing to hear a guy, he who just, like, told it like it is and told he was not a bullshitter. And like, that guy, that's a person I trust.

[Michael Batnik]

I trust Satya. I have terrible listening comprehension. I think when it comes to this tech stuff, I don't understand any of it. I listened to the entire podcast and there was like, not one part that I was able to, like, pull out and say, like, oh. But then I see people tweeting the clips and I'm like, oh, yeah, when I see the clip, it makes sense. But when I'm listening on my own, I'm like a child. Like, I have no idea what's happening.

[Ben Carlson]

It's hard to understand some of the AI stuff that they're. Because they're getting so technical about it. So here's, here's the thing. There's two things, two ways to look at this. One, the market already knows what's going on, right? Like, how could you think you're smarter than the market? This is like, for all the people who say, like, look at the depreciation expenses of these. All these Data centers and GPUs are going to be depreciated in three years and have to buy them again. Like, the market knows this.

[Michael Batnik]

Wait, can I just interject one thing? I think the opposite is true. The market doesn't know this. The market doesn't know anything. Which is why you're seeing such violent price swings. Because we're all just guessing. We don't know. That's the point. We don't know. Nobody knows.

[Ben Carlson]

But the thing is, the market is always smarter than everyone. The. The collective.

[Michael Batnik]

Of course, of course.

[Ben Carlson]

But two things can also be true. The other thing is sometimes the market is wildly off the mark, right? So how do you wrap your head around, like, listen, everything everyone's talking about with AI, everyone already knows it. We all know it.

[Michael Batnik]

But nobody knows.

[Ben Carlson]

It's not like this because everybody knows.

[Michael Batnik]

But nobody knows.

[Ben Carlson]

People think, well, yeah, no one knows. That's obviously the problem. By the way, I asked Chat to do some coding for me this week. I asked Nick Maggi, hey, how do I fix this thing on my blog to make it look bigger and fancier? And when people send it from my newsletter, I wanted to stick out, stand out more. Nick said, just put it in ChatGPT. And it gave me the code and allows me to copy the code. And I said, well, where do I've never coded anything before. Where do I put this in? And it was magical.

[Michael Batnik]

Did he say Ask chatgpt?

[Ben Carlson]

Yeah, well, he kind of showed me a little bit, but it's, it's, it's magical.

[Michael Batnik]

I did something similar. There was an arithmetic problem. And I, I'm not even kidding. It was, it was straight up arithmetic. Not like plus plus, plus. But I couldn't figure out for the life of me. I was staring. I'm like, wait a minute, I'm looking at a spreadsheet. It said, I don't understand. I don't understand what I'm doing wrong. And I said, hey, wait a minute. Boom. Yeah, two seconds.

[Ben Carlson]

But why do you think technology people are so excited about AI? They. Because they're the ones doing that.

[Michael Batnik]

How about this? The, the arithmetic, the set arithmetic. It might have even been calculus. I don't even know what type of math it was. There was, there was no scenario in which I got to the bottom of it. None. I could have stared at it for seven hours.

[Ben Carlson]

All right, we've been talking about stocks falling a bit, a lot in one day. And we had a guy email us in and give us an answer. He said, Ben raised a question. How many securities had 30 drops, he said, from March 31, 2020 to today. So just basically this decade for the S p, it's only 15 names. Russell 1053, Russell 2469. He also said, he responded, he said if you do 20 instead of 30, the numbers quadruple. Like. Yeah, to 60 names. 205 and 955. So actually, I guess fewer names have fallen 30% in the S and P than I would have thought, but a decent amount have fallen 20%.

[Michael Batnik]

Yeah. It's funny, Bespoke did something similar. They said 19 stocks have fallen 30% of their earnings reaction days this season. And the median market cap of those companies was less than $3 billion versus.

[Ben Carlson]

14 that have gained 30%. So this does happen.

[Michael Batnik]

No, but of course it does. But the, the median market cap was $3 billion. Right.

[Ben Carlson]

So it's small. Right? It happens all the time in the Russell 2000.

[Michael Batnik]

Yeah, all the time.

[Ben Carlson]

All right, this is a really good question from Hashtag or at longequity. Sometimes compounders stop compounding. What lesson do you take away from this? So he shows Nike and Fiserv and Charter Communications and Estee Lauder and like six of these companies that had these beautiful long term charts that have now come crashing down on the other side. Like these are compounders. And in the last year or Two. All these things have. Have come back down to earth. I'm trying to catch a falling knife in Nike. So I thought this is a good question. Like what do you, what do you take away from this?

[Michael Batnik]

So the, the, the answer, by the way, I don't like Nike's knife. I think you're going to cut your hand.

[Ben Carlson]

My whole thesis with Nike is I'm betting on Caitlin Clark. That's it.

[Michael Batnik]

Okay.

[Ben Carlson]

I'm betting on Caitlin Clark to like have her own shoe line. And as long as she stays healthy. That's my Nike thesis.

[Michael Batnik]

Okay, no offense, that sounds like my thesis when I was back in 2010 when I bought which. Which miner because of the Olympics. Oh, I bought like an Australian mining company. Was a BHP built in Billiton. Is that even the name of it? Because yeah. Anyway, don't love that thesis but hey, credit to you. So all right, Bucho Capital has the, has a great take on this take or the answer, like what's the takeaway? Buco said the actual answer is that this is the rule, not the exception. Great returns attract competition. That's the beauty of capitalism for the consumer. The more interesting question is what companies do to avoid this fate. I was. The new book that I'm listening to is. Is called Invention. The book. The audio. The audio. The autobiography of James Dyson. The guy. That of Dyson the vacuum cleaner.

[Ben Carlson]

Oh yeah, I have that book somewhere. I just never read it. I just bought a new Dyson this week.

[Michael Batnik]

The vacuum cleaner.

[Ben Carlson]

They're magical. They work so good.

[Michael Batnik]

So I don't know that I would necessarily recommend the book, although. Oh, there is a great quote that I wrote down. He said everything changes all the time, so experience is of little use. I feel like that's so applicable in.

[Ben Carlson]

The stock market to markets. Yeah, that's pretty good.

[Michael Batnik]

So. But anyway, my point was this. So when he was building the vacuum cleaner before the Dyson. I'm sure you had a Hoover vacuum cleaner growing up. I did. Right.

[Ben Carlson]

Yeah.

[Michael Batnik]

Like it was so 80s.

[Ben Carlson]

Do you remember the bags with the zippers on them and stuff?

[Michael Batnik]

Okay, so that. Yes, I do. So the point is, I think they made $500 million a year selling the bags. It was classic innovators dilemma. Like their entire business was the bags inside of the vacuum cleaner. So they just were going to printers and ink cartridges. They were just. That was their business model. They were never ever, ever going to do what Dyson did. And then guess what? Dyson killed them.

[Ben Carlson]

Right.

[Michael Batnik]

So that's it. That's business.

[Ben Carlson]

All Right. Cliff Azis was on aqr and he talked about how AQR is or. Sorry, he was on odd lots and he was talking about. AQR is thinking about making a push into sports betting. And I thought about this because I've heard a lot of people say, I wondered if this is good or bad for, like, draftkings/fanduel/polymarket/kelsey. All the ones that have the betting is this good or bad for them is to have the big whales come in. Because you'd think it'd be good because it would add a huge layer of liquidity, it'd be more volume. But is it bad if they're arbitraging away? Because I've heard stories from that, like FanDuel and DraftKings. If you're a really. If you're a whale of a gambler and you're really good at it, they will find you and they will kick you off the platform. I don't know if this is true.

[Michael Batnik]

Yeah, you know what? I'm the opposite of a whale. I get no incentives. They say, hey, look how much this asshole keeps losing. We're not even giving him any incentives. He just keeps losing.

[Ben Carlson]

But let's say AQR and Citadel get into. And they arbitrage away a lot of the parlay stuff, right? And they see there's massive mispricings because people who are betting on them, like you are idiots and don't know the. Don't know the odds. Okay, come in.

[Michael Batnik]

Am I. Am I an idiot? Because all the Bengals had to do was not literally let the Steelers get six points on defense in the final drive. Am I an idiot because that happened? Yes, I guess I am.

[Ben Carlson]

So do you think. Is this. Would this actually be a bad thing for these companies because they couldn't make these enormous spreads anymore?

[Michael Batnik]

Yeah, that's a good question.

[Ben Carlson]

Like, would they make it up on volume or is the spread. Is a spread the thing for them? Or they make all the money off of idiots who don't know what they're doing?

[Michael Batnik]

Very good question. I'm not sure. Is the answer? I don't know.

[Ben Carlson]

All right, so bitcoin is getting killed. I think it was under 90,000 last night. And is this one of those things where crypto is signaling more pain to come, or is this just like a risk off asset and like this is it, because I looked at this, so it's crazy. The volatility I mentioned before, this is IBIT was down almost 20% on the year through April. Then it was up 35% just a couple months ago and now it's like flat or down on the year. Like remember when people said the ETF is going to take volatility out of bitcoin? Yeah, but look at, look at the drawdown profile of bitcoin. It's almost exactly the same as meta. It follows it to a T. Like bitcoin is still acts like a tech.

[Michael Batnik]

Stock but it's not. But, but it's not following the queues at all.

[Ben Carlson]

Okay. Yeah, but I, my take is I think Mark, Mark Zuckerberg is actually Satoshi. What do you think?

[Michael Batnik]

So Balchunas tweeted IBIT is now Harvard's largest position and it's 13F and its biggest increase position increase in Q3. Pretty wild. Harvard. Here's my question about bitcoin. What is the next catalyst? Because all of the promise, all of the catalysts which was ETF adoption, institutional buying, it all happened. So what's next? Like what breaks the spell now? Maybe it's just the bull market resumes like the broader macro bull market comes back. But I don't know. So I don't know the answer to your question. I don't have a very strong.

[Ben Carlson]

I guess the catalyst would be money just keeps pouring in. People have it on autopilot now because of these.

[Michael Batnik]

Yeah, but, but that's advisors keep putting in. That's not a catalyst. If there's just like auto flows in.

[Ben Carlson]

I don't see why that's not a catalyst. If, if more money keeps pouring in, how is that not a good catalyst?

[Michael Batnik]

Because, because that to go up. Because that's literally what's been happening for the last year and it's gone nowhere. It's flat, it's down on the year.

[Ben Carlson]

Yeah, but it pulled forward so much, so many gains. Right. It's down on the year. But it, it's still up a lot from. I don't know. I. But do you, do you still think that it is a precursor of things to come and like okay, the stock market is going to roll over now or is it, is it not like that anymore?

[Michael Batnik]

I think it's different every time. Sometimes it is, sometimes it isn't.

[Ben Carlson]

I don't know. Yeah, that's fair.

[Michael Batnik]

All right, let's talk about. You wrote a good post on the 50 year mortgage. This is a very sensitive topic. I think people hate more government intervention, more fake money. I think they hate that people that would use the 50 year mortgage are people that who could least afford it. Because you're not really saving a lot of money. And you're just paying way more interest.

[Ben Carlson]

Yeah, you'd be, you'd be harming like the middle and lower class probably because.

[Michael Batnik]

The, you, you ran a, you ran a calculation on a 500. Was this a $500,000 mortgage, Ben?

[Ben Carlson]

Yeah.

[Michael Batnik]

So the 30 year mortgage monthly payment is $3,000. The 50 years, 26, 30 and change. So it's a difference of $366 a month, which is, which is definitely not trying to minimize that. That's not nothing. But you're looking at 80% interest in the beginning for a 30 year versus like 95% interest. It's all money. It's all money to the bank.

[Ben Carlson]

And here's the other thing. I looked at this using the same interest rate, I said 6%. A 50 year mortgage would definitely be a higher interest rate too. So it would take the monthly payment difference down even more because you assume the 50 years probably. Oh, 30 is at six.

[Michael Batnik]

Okay.

[Ben Carlson]

You should have 50 years probably at six and a half. So I didn't even do that. The monthly payment is even worse.

[Michael Batnik]

Got it. No, no, the monthly payment is less.

[Ben Carlson]

That's what I'm saying. You'd have less of a savings.

[Michael Batnik]

No, you're saying the, the 50 year interest would be less.

[Ben Carlson]

No, the 50 year, the 50 year interest rate would be higher.

[Michael Batnik]

Right, right, right. My bad.

[Ben Carlson]

So your month, your monthly payment difference would be even lower.

[Michael Batnik]

Allison Trager said, I think the 30 year fixed rate is a freak of financial nature. Something that requires tons of intervention and causes all sorts of distortions. But I'm not sure why a 50 year. So much worse.

[Ben Carlson]

That's fair. That's. Yeah. How many people actually, how many, how.

[Michael Batnik]

Many countries do floating rate mortgages?

[Ben Carlson]

Most of them.

[Michael Batnik]

Most of them. I know Canada does a lot of.

[Ben Carlson]

The US is, is kind of on its own island.

[Michael Batnik]

But so, but so what? But so what happens in inflationary periods when interest rates go up? It's like, oh, I can't afford my mortgage.

[Ben Carlson]

Yeah, your payment goes up. I think a 30 year fixed rate mortgage is one of the greatest financial inventions that we've ever done in this country. Some people hate it for whatever reason. I think it's amazing.

[Michael Batnik]

All right, we're going to talk about this. We're going to do an episode on, on Home Stuff with, with look, our friend Logan Motorshame. Because there's, we spoke about this with, with Derek. The median age of first time home buyers is now 39 years old, according to the national association of realtors no, 59. No, that's all buyers.

[Ben Carlson]

Yeah, all buyers. So.

[Michael Batnik]

So I said first time buyers.

[Ben Carlson]

It used to be.

[Michael Batnik]

It used to be 30, and now it's like 39.

[Ben Carlson]

Yeah. So I think they said 40 last week. Nar. And this Conor O' Brien puts out all the other surveys saying, wait a minute, is it really 40? If you look at these other surveys, it doesn't look it's increased at all. And so a lot of people are saying, wait a minute, the NAR data is bad. Their survey is bad. These other surveys. Right. So all this stuff that we've been saying, like the first time homebuyers now got to be 40 years old or something, that might be wrong. And honestly. And we've been using this data, everyone's.

[Michael Batnik]

Been using this data to support the case that millennials are screwed, housing is broke. Which, by the way, both. Both. Doesn't mean that it's not. But if the data that sounds like that argument is.

[Ben Carlson]

It sounds like the data is faulty. And Logan's gonna kind of set the record straight for us. So that'll be out hopefully soon. All right, There's a story in the Wall Street Journal or, sorry, New York Times. They rushed to buy homes during the pandemic. Now some feel trapped. And it talks about how Americans who bought their first houses when mortgage rates were low, now they're ready to move, but they feel locked in by the rates. I'm sorry. We can't feel sorry for everyone. Not everyone gets your sympathy. You.

[Michael Batnik]

What's the problem now?

[Ben Carlson]

They, they, they rushed, so they talk. They have all these stories about these people who rushed in to buy a house in, like, 20, 21 because rates were low and houses are going fast. And now they, like, their life has changed, so they want to move, but they can't because they're stuck in a 3% mortgage.

[Michael Batnik]

Sorry.

[Ben Carlson]

You know, not everyone gets your sympathy. Like, if you bought a house and it's up 50% and you have a 3% mortgage, but it would be expensive for you to move, you don't get any sympathy. The person who didn't get to buy and didn't get the 50% price appreciation and didn't get the 3% mortgage, they have my sympathy, not you. Yeah, not everyone deserves your sympathy. Okay. And I have, I have a thing coming later about my. I'm. It's going to seem like I'm looking for sympathy, but I'm not. Sometimes you just have bad luck.

[Michael Batnik]

All right, let's. We'll skip the Schwab Stuff.

[Ben Carlson]

If you. If you save something in the dock for two weeks in a row, delete it. It's never going to happen again. Come on, let's just. It's not going to happen. There's too much stuff that happens in a given week. How many.

[Michael Batnik]

You know what? No, we'll do this real quick. So Schwab announced that they're buying Forge Global. They project in their press release that private wealth capital allocated to alternatives is expected to reach 13 trillion by 2032, up from $4 trillion today. That's aggressive. I gotta be honest.

[Ben Carlson]

How about this? How about this for an analogy? Private markets to financial advisors is like AI to people. Like some. Some people just don't want it.

[Michael Batnik]

Yeah, right.

[Ben Carlson]

It's the same thing. Like you're gonna. We're gonna force down your throat, but a lot of people don't want it at all.

[Michael Batnik]

Hit the nail on the head. I gotta be honest. I had no idea that Forge was public. They went public in a SPAC at a stupid valuation. $6 billion, like everything else. Looks like they're getting bought at like 600 million, something like that.

[Ben Carlson]

O.

[Michael Batnik]

So here's my take. I think that the private market stuff is going to happen. I don't think that there's going to be a widespread revolt that sort of stops in this track and there's. I think it's. I think it's done. It's just a matter of degrees and what we get.

[Ben Carlson]

I think. I think they're just going to be disappointed in the flows into this stuff.

[Michael Batnik]

Yeah, I think that could be too. I think they. They could make a hard push and the flows don't. Don't reciprocate.

[Ben Carlson]

However, if we go into recession and interest rates go back to zero percent, which I think they will. I think you said it's never happened.

[Michael Batnik]

You really do.

[Ben Carlson]

Oh, yeah, definitely. If we get a recession in the next three years, interest rates are going to zero.

[Michael Batnik]

I love this.

[Ben Carlson]

Take market down.

[Michael Batnik]

All right, good for you. Finally a stand.

[Ben Carlson]

Okay, and when that happens, are people going to, like, look at privates again and go, oh, actually, private credit's eight and this is zero.

[Michael Batnik]

Well, yeah, so.

[Ben Carlson]

So that could happen.

[Michael Batnik]

So. All right, so my take on this is it is going to be a rocky transition between here and 20 years from now when this is all available. And I do think of that in 20 years from now, people are going to look back and be like, wait, seriously, There was a time where, like, people couldn't invest in this stuff. Why?

[Ben Carlson]

Yeah, you're right. There'll be better rappers and better. And there already are in a lot of ways.

[Michael Batnik]

But so Pitchbook and I don't know if I'm the only one that reads this stuff. I feel like I never see it being circulated, but they do like a weekly rundown that's like really, really, really super duper high quality. So I read it.

[Ben Carlson]

You got your ear to the ground of the private credit stuff, huh?

[Michael Batnik]

The credit pitch from Pitchbook. You damn right I do, Ben. They say while the 12 month run rate of interest income from payment in kind loans. Ben, to your point, I could hear people's eyes glazing over like, who gives a. Well, I give a shit. The payment in kind loans, which basically is like, all right, things aren't great right now. I'm not gonna pay you cash right now. Just. Just tack it on. It's an iou. To the end of the. To the end of the payment. Payment in kind loans. Payment in kind loans for the top 15 exchange traded BDCs remains a hefty $1 billion. It declined in the second quarter, which is the third straight quarterly dip, perhaps indicating that lenders have reached their threshold for non cash paying interest. So lenders are saying like, nope, been there, done that. You pay, you pay.

[Ben Carlson]

Fair enough.

[Michael Batnik]

Fair enough. All right, so this brings us to Blue Owl. So the Wall Street Journal had a report not long ago, Blue Owl Capital was an upstart investment firm that lent money to mid sized US companies such as Sarah Lee Frozen Bakery. I hate frozen bakery food. You?

[Ben Carlson]

I don't have an opinion.

[Michael Batnik]

Okay, Fair these days. Yeah. Ben's like, I'm over this. Can we just move on? These days the firm is financing massive data centers costing tens of billions of dollars for the likes of Meta and Oracle. A sign of just how quickly Wall street has become the enabler of America's artificial intelligence boom. So they showed a chart looking at the bond issuance by big tech AI companies. And it's more now than it has been the past several years combined. And this is before yesterday Amazon announced that they did a $12 billion offering. So like I mentioned earlier, the stock blew out, was getting killed. It is in the epicenter of two things where two places you don't want to be. Number one, BDCs are getting slaughtered. The liquid BDCs are getting slaughter. People don't believe it. They're scared of first first brands, tricolor, whatever they're selling, rightly or wrongly, they're selling.

[Ben Carlson]

This is another. It is. This is a lot like AI where it's like the skepticism has like the lid on a lot of this stuff.

[Michael Batnik]

Yes. So, by the way, I sold Blue. I was a stock that I own. Thank goodness I sold it a couple of months ago. I think you're selling it down here. You're a donkey. That's just my opinion. But. But then. And also. And also. So there's, there's the BTC side, there is the AI skepticism side. Hey, wait a minute. Like this deal with Meta, like they have an opt out, like, what's going on here? And then also there was a really gnarly article in the Financial Times. Blue Owl Credit, Blue Owl Private credit fund merger leave some investors facing a 20% hit. And I encourage you, if you're interested, to read the article. It's not great.

[Ben Carlson]

It's not. It's not great.

[Michael Batnik]

We're already going. We're already going. Logging this topic. But there's some forced mergers happening. I think there's pending shareholder votes, but. Votes. But it's not pretty.

[Ben Carlson]

So they did a picture of these guys when they went public or something. They rang the bell. Has anyone ever looked cool, like cheering the ringing of the bell? You can't look cool. It's like wearing Crocs. You can't look cool doing that. Okay. Yeah. But, yeah, this. No, you're a lot of this stuff I roll my eyes about with private credit. But like, this is a. I think this is a legitimate story worth paying attention to.

[Michael Batnik]

This is a story. Absolutely.

[Ben Carlson]

Yeah.

[Michael Batnik]

There was an article in Charter or a great survey visual and Charter showing many young Americans are jilting marriage. So you don't see that word jilting too often. The share of US households with married couples peaked at 79% in 1949 and is now down to 47%. I was talking to Josh the other day feeling divorce is like on the decline now. I'm sure there's data for that. But just anecdotally, I feel like divorce was so hot in the 90s. My parents got divorced. A lot of people's parents I know got divorced.

[Ben Carlson]

Think about how many movies dealt with divorce in the 90s.

[Michael Batnik]

Mrs. Doubtfire killed me.

[Ben Carlson]

Every family movie had a divorce.

[Michael Batnik]

What was my dad thinking taking me to see Mrs. Dadfire way, way too soon?

[Ben Carlson]

Anyway, Santa Claus, a Christmas movie, had a divorce in it.

[Michael Batnik]

This is all part of. That'd be a good list, top 10 divorce movies. This is all part of the bigger story of young people taking longer to do things that was once done earlier. Maybe not a popular take. I don't think you should be getting married in your 20s and buying a house. I think that's. In fact. I think the fact that people are.

[Ben Carlson]

Waiting longer, I think is a good thing. That's part of a lot of that makes you. It makes you more mature. And you're a parent as well. Like, I. I don't think it's a big deal.

[Michael Batnik]

You have no business having three kids in a house before you're 30. Now, I know people make it work, but in. But all of America, it's too much responsibility. I think this is like, this is more normal.

[Ben Carlson]

Yes. And. And they're asking the percentage of 12th graders saying they're most likely to get married in a long time.

[Michael Batnik]

I didn't even look at that.

[Ben Carlson]

I can't. I can't trust a survey of high school students. I'm sorry. They. They lie. All right, quick psa. This is from the Wall Street Journal, but a bunch of other places had it. The limits for your retirement accounts are going up in 20, 26. 24,500, up from 23,500 for a 401k, 7,500 up from 7 for your IRA. You get a bunch of extra money for 50 or older if you're 60 or older. We spend a lot of time focusing on the markets, right. And focusing on investments and stocks and private credit and all this stuff. If you max your 401k out, it almost doesn't matter what you invest in. Put it in something, anything with risk, and you're going to do better than most people.

[Michael Batnik]

I endorse this message. Let's get to it.

[Ben Carlson]

Ben, I got a story. You know, sometimes you have such a bad day that you don't even. You're not even mad. You don't swear. You just kind of do an angry laugh. That was my day yesterday. Let me tell you what happened to my day yesterday. I start off just a very bad Monday. My wife's car is flat tire, right? So I got to bring it into Bell tire to fix. There's a screw in it. I can hear it coming out. I have to take the tire off myself. I know how to change a tire now. You know, I can't wait till the robots come and do it for me. So I got to bring the tire in. So already it's 30 degrees out. My fingers hurt. I'm trying to, you know, I'm hitting my knuckles against the thing.

[Michael Batnik]

Oh, that hurts.

[Ben Carlson]

So flat tire in the morning. Sick kid. My daughter has an upset stomach, has to come home. I didn't have to deal with it. But that's another thing. Finally, we had. We did a bunch of home projects I've been talking about. We had new floors, we painted the walls, we painted the trim. Everything was nice. Then. The door is just all beat up from the kids over the years. And then all the work we had done, the door from the garage to the house is all beat up. So I said, you know what? I just want a new door. It'll look nice. It'll make everything look finished. So one of the two big home improvement places. There's two of them. I'm not going to say the name. It was one of them. I said, I just needed a new door. Can I just pop the pins out and put the new door? And they could say, no, no, no. What you do is because they might not fit. You have to get a whole new door. So it's the frame, and we'll put the bottom plate on, and it's new trim, and it's going to look so nice. Just do the whole thing. It's a little more expensive, but it'll look so finished. You know what? Yeah. I'm doing a project. Let's do it right. So the guy shows up yesterday, and my wife calls me and says, this does not look good. Just the look of it doesn't. You can just tell. So he walks in and he said, where. Where's the door? And she said, you. You're installing it. You should have the door. He said, I don't have it.

[Michael Batnik]

Oh.

[Ben Carlson]

So he had to go back to get it. Now this guy's installing the door. He takes the trim off, he puts the door on, and he's there for like three hours. At this point, already, he doesn't have the door on. It's just this open, and it's 30 degrees out and it's cold, and he's holding it. And he said, I need to call for. I hear him on the phone. He's calling. He's asking for help from someone. He said, like, basically, I don't know what I'm doing. This guy had literally never installed a door before. Now what do you do in this situation? So he has his buddy come.

[Michael Batnik]

I mean, I know what you do. Nothing.

[Ben Carlson]

So this guy. His. His other guy comes and he's helping him. This guy is walking through my guy. Fine. You know what? That was a little rocky at first. But this guy, he's got a helper now. This guy's gonna help him. This guy's saying how you have to be level and to shut the door. It's like there's all this stuff you have to do, right? So this guy's helping him. Like, this will be fine. This guy's here now. It'll. It'll be better. It's a bad start. This guy helps him a little bit, then he leaves. So this guy's finishing. This was, honest to God, the worst. It's comical how bad it was. There's everywhere. There's. He put holes in the wall. There's dents, there's dings. The door barely shuts. This is. I, like, I couldn't.

[Michael Batnik]

What, you let this happen? I mean, did he. What's the result?

[Ben Carlson]

This guy was not. He was there till 7pm last night. He got there at 2 and he find. He goes, all right, I'm done. And he leaves. He did not have anything to clean with. He asked us if he could borrow a broom and a dustpan to clean because he didn't have anything. So of course I called the place today, said, this is unbelievable. Like, our house is like, ruined. You've got to come back and fix this. So they're going to. But this was like, if I asked him to fix it, he was going to make it worse. It was a project from hell. So the guy finally leaves. We're like decorating for Christmas. And then it's time for bed. All right, kids go to bed. And George goes into the bathroom and proceeds to exorcism. His head turns around and throws up all over the wall, on the walls, on the walls, all over the toilet, on the floor. The worst smelling vomit I've ever smelled in my life. My Courtney had to leave because she was gagging, so I had to clean it up. I needed like a hazmat suit. So that was my day yesterday. Two sick kids, a flat tire, and the renovation from hell.

[Michael Batnik]

Wow.

[Ben Carlson]

But it's one of those times, you know what? I poured myself a big glass of red wine and said, let's rip the Bandit off and start new the next day.

[Michael Batnik]

How's your day today?

[Ben Carlson]

I'm doing good.

[Michael Batnik]

Everything good?

[Ben Carlson]

I'll survive.

[Michael Batnik]

That's a bad day.

[Ben Carlson]

That's a bad day. All right, some recommendations.

[Michael Batnik]

Did you watch Death by Lightning?

[Ben Carlson]

I loved it.

[Michael Batnik]

Oh, you did?

[Ben Carlson]

Did you watch it?

[Michael Batnik]

I did.

[Ben Carlson]

Okay. You okay. So I thought it was fantastic. It was four episodes. I thought Tom Wobbs gam as the crazy guy was.

[Michael Batnik]

He's unbelievable.

[Ben Carlson]

He's so good. But here's the thing. So I've heard of James Garfield before. I've heard of Chester A. Arthur. I've heard the names. I had never heard this story before that he was assassinated. I had no idea this happened. No clue.

[Michael Batnik]

So, okay, I felt like I was.

[Ben Carlson]

Learning as I was watching. It was. So it was four episodes. That was the best part. Four episodes.

[Michael Batnik]

So the book Destiny of the Republic is by my. One of my favorite authors, Candace Millard, highly recommend her books, if you are interested. So she wrote a book called Destiny of the Republic or Destiny of the Republic. And I don't know if you noticed this, you probably didn't. But the fourth episode was called Destiny of the Republic.

[Ben Carlson]

Okay.

[Michael Batnik]

So the cast was amazing. And I thought Wham's gam was amazing. Like totally amazing. And it was cool to see these characters brought to life.

[Ben Carlson]

Michael Shannon too. They kind of looked like the guys too.

[Michael Batnik]

They were great. And I did enjoy it, but it kind of felt like such a Netflix show. Like, what was the point of it?

[Ben Carlson]

See, I'm sorry, I thought I was going to say I've been complaining. Netflix has had low quality shows. I thought this was their highest quality show in a while. I thought it was fantastic. Okay, maybe because I just didn't know the story, but the.

[Michael Batnik]

I was learning the tone was interesting because it was like. It was sort of like. Like what genre was that show?

[Ben Carlson]

I thought it was because they had some humor involved. Like, I thought that. I don't know, I thought that was it. But the fact, the way that he became president with his speech and like, I thought that was just really well done.

[Michael Batnik]

Yeah, it was an accidental president, but Whams game. Where has he been? Because he is so good. He reminds me of like Brendan Fraser and the Mummy, but better.

[Ben Carlson]

Which they're bringing back, you know, with Brendan Fraser and Rachel Wise. It's coming back original people.

[Michael Batnik]

I. I love that movie.

[Ben Carlson]

Okay, so I've got. I've got an audible of the week. Okay. So at the end of his book, Andrew Ossorkin actually mentioned this book and said, I was trying to frame my 1929 book after this. So it's called, oh, is this the Titanic One Night to Remember by Walter Lord. And all it is is there's no preamble, there's no backstory, there's no like biography stuff. It's just this is what happened when the Titanic hit the iceberg. And this is what all the people did.

[Michael Batnik]

Okay.

[Ben Carlson]

And it's not that long on a two times. You can listen to it in two hours. It's really, really good. Just like what happened and all the people being like, wait, like, people getting out of the rooms at night and being like, what happened? We hit an iceberg. Go back to bed. Don't worry about it. And, like, all the stuff that people decided to bring and how. The fact that there weren't enough lifeboats and really, really good. I. I enjoy it.

[Michael Batnik]

Okay. Good work. All right. I watched the. The Eddie Murphy doc. Being Eddie Murphy, I assume that you are a huge Eddie Murphy fan. Obviously. Literally. Who wasn't?

[Ben Carlson]

Yes. Love Eddie Murphy.

[Michael Batnik]

Yeah, it's worth watching. Not the best doc I've ever seen, but it's worth watching. So at the end. And this is not a. Not a spoiler, really, but at the end. So at one point during the. During the doc, he's talking about how he ordered two dummies so he could be, like, a ventriloquist if he ever does stand up. And it's. It's. It's Bill Cosby and it's Richard Pryor. So at the end, of course, he hasn't done stand up because he got too famous since 1987, I guess. I don't know if. If. If Delirious was the last one. Oh, wait. Was raw 87. Can't remember which was which.

[Ben Carlson]

I used to own Delirious.

[Michael Batnik]

Ridiculous. I owned the DVD Funniest Thing Ever. So. But anyway, so at the end of the document, the puppets come, and he does, like, 30 seconds, and it's, like, the funniest thing Ever.

[Ben Carlson]

Okay. He. He was.

[Michael Batnik]

It's just like, come on, man. I. I know you're too famous, but, like, please.

[Ben Carlson]

He was one of those guys when he was on Comedians and Cars getting coffee with Seinfeld, he still had it in him a little bit, but he. He. He got too big, I think. But he. In one of his. I can't remember if it was Raw or Delirious, he had this bit where he talked about how all Italians thought that they could beat people up after Rocky.

[Michael Batnik]

Oh, my gosh.

[Ben Carlson]

It's. It's just. That's one of my favorite bits of all time.

[Michael Batnik]

Yeah.

[Ben Carlson]

So good.

[Michael Batnik]

Truly a one of one legend. All right. Lastly, speaking of comedy, I saw. I saw Louis at the beacon. So in 20, like, 14 or maybe 15. When was deflate Gate? I can't remember. But whenever that was, Josh and I were at Artie Lang's apartment. I don't think I ever told the story before. Have I on air? I don't think so. All right, so Artie Lang was my favorite character on Howard. I am a lifelong Howard Stern listener. And when Howard and Artie broke up when they had that fight. I remember I was in my bedroom, like, wait, why are mom and dad fighting? And so anyway, Artie was like, my guy, and we were in his apartment, and it was surreal, to say the least. It was Josh, one of Artie's friends, is a comedian who was a fan of Josh's. So Josh and I did Artie's podcast. Josh's friend was, like, a couple of hours late. So me, Josh, and Artie were hanging out in his apartment from, like, 11 to 2. We watched sports center when Cadell was talking about Deflategate. And then we watched my favorite documentary of all time. It was called the 7 5, I believe, about the. About the corrupt. Yeah, the 7 5. About the corrupt cops in New York City. And we were just. Just watching him. It was unbelievable. Really, a pinch me type of moment. Like, how did I get here? And so. So Artie's friend walks in, and he said, hey, you hear about Louie? And Artie's like, yeah, I heard some stuff. What did you hear? And so they, they, they.

[Ben Carlson]

That's a good impression.

[Michael Batnik]

So he tells him. I'm like, wait, what? Huh? Lou's my favorite comedian of all time. And it was what came out. I don't know if it was a couple months later, a year later, whatever it was, I sort of, like, kind of forgot about. I was like, wait, what? Then it came out. Anyway, so Louie, needless to say, did some bad things. He's been canceled forever. Canceled himself, disappear, whatever. All right, all that aside, it was so good. Like, it was. He's. For me, that is my type of comedian. Just belly laughter on. Unbelievable. I don't know if he. He doesn't do nothing. He does, like, his own thing, so probably be on his website in a couple months. It was such a good special.

[Ben Carlson]

Okay. Yeah, we saw him live before he got canceled, and it was one of the best shows ever been to.

[Michael Batnik]

I mean, it's rare to, like, get, like, multiple actual belly laughs right? Where, like, your face hurts.

[Ben Carlson]

Yeah. Smarter comedians.

[Michael Batnik]

All right, and then. You know what? We're gonna save this for next week. So Michael Semblist did a really good dive onto the media landscape. Netflix, YouTube. And he has his. He. He ranked his top films in the 21st century, so we're gonna talk about that. But next week.

[Ben Carlson]

He's a. He's a Ben guy. He's a Ben guy.

[Michael Batnik]

Same for next week. He's a huge bad guy. That was my first. That was my first observation. He is a bad guy. All right. Thank you very much.

[Ben Carlson]

Survey in the show notes please.

[Michael Batnik]

Survey in the show notes please. Thank you very much for listening. Thank you Duncan and the entire production team for doing what they do for us every week. Thank you for listening. Animal spirits at the compound. News.com we will see you next time.

[Mark Lipschultz]

Foreign.

[Ben Carlson]

Hey, Ryan Reynolds here wishing you a very happy half off holiday because right now Mint Mobile is offering you the gift of 50% off unlimited. To be clear, that's half price, not half the service. Mint is still premium unlimited wireless for a great price. So that means a half day.

[Michael Batnik]

Yeah. Give it a [e-mail] Switch upfront payment.

[Ben Carlson]

Of $45 for three month plan equivalent to $15 per month required new customer offer for first three months only.

[Michael Batnik]

Speed slow, 135 gigabytes of networks busy.

[Ben Carlson]

Taxes and fees extra.

[Michael Batnik]

Cmintmobile.com.