Live From Miami

Summary

Animal Spirits Podcast – Episode Summary: "Live From Miami"

Release Date: March 19, 2025
Host: Michael Batnick and Ben Carlson
Location: Live from Miami at Future Proof Citywide Conference

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1. Introduction and Personal Anecdotes (00:00 – 03:00)

The episode kicks off with a brief advertisement for YCharts, highlighting their new AI tool designed to enhance efficiency for financial advisors. Ben Carlson emphasizes, “AI is just going to make us all more efficient” (00:16).

Following the promo, Michael and Ben delve into a personal recount of Michael’s 40th birthday celebration at Papi Steaks in Miami. Ben shares, “There was about 20 of us, and at one point, like, lights come on and loud music” (01:16), recounting the initial embarrassment Michael felt when he was mistakenly made the center of attention. The surprise was later revealed to be for another table, turning Michael’s discomfort into amusement.

2. Podcast Performance and Event Setting (03:00 – 05:20)

The hosts discuss their experience hosting the live podcast at an early 8:30 AM slot, which, contrary to initial fears, turned out to be a positive sign. Michael humorously grades their live show performance, initially rating it a “D” but uplifting it to a “B minus” after acknowledging the challenges faced due to limited preparation (03:36).

Ben adds, “I think the YouTube viewers are gonna like it better” (03:34), noting that visual elements like charts couldn’t be fully utilized on stage, contributing to the slower start. The duo candidly admits feeling underprepared but remains optimistic about engaging the live audience.

3. Market Outlook and Analysis (05:00 – 13:30)

Michael shares his bullish outlook on the market, stating, “I don't think we're gonna have a bear market” with a self-assigned probability of 74% (05:22). Ben acknowledges the confidence behind Michael’s stance but adds a note of humility, recognizing the unpredictability inherent in market movements.

The conversation transitions to a reflection on market reactions post-election. Ben references a tweet explaining the initial market surge followed by a reversal: “S&P 500 was up big... now foreign stocks are going crazy, gold is at all-time highs” (10:16), illustrating the volatility and rapid shifts in investor sentiment.

They discuss historical market corrections, with Ben noting, “the algorithms move faster” (11:49), suggesting that modern market structures contribute to quicker overreactions. The hosts examine charts illustrating swift market responses and debate whether traditional slow corrections have been replaced by rapid adjustments driven by technology and information dissemination.

4. Economic Sentiment and Consumer Behavior (13:30 – 20:00)

Michael and Ben delve into consumer sentiment, referencing surveys that indicate a significant drop in optimism about the economy. Ben observes, “only 20% of the people said the economy was good back then, and now it's 10%” (30:35), highlighting increasing pessimism among the public.

They analyze factors contributing to this sentiment, such as declining consumer spending plans and corporate capex reductions. Michael warns, “if corporate capex pulls back, we will get a recession” (19:43), emphasizing the interconnectedness of corporate investment and broader economic health.

Ben introduces insights from Neil Dutta at Redmac, who points out, “expected change in unemployment is the worst since 2008” (19:37), underscoring the potential for a self-fulfilling prophecy where negative expectations lead to reduced economic activity and job security.

5. Wealth Transfer and Gender Dynamics (20:00 – 24:34)

Switching gears, Ben discusses a Bank of America report projecting a significant wealth transfer to women, estimating $124 trillion by 2048, with 80% destined for women (23:11). The hosts explore the implications of this shift, questioning whether the wealth management industry is prepared to cater to female beneficiaries.

Michael muses, “you know what I'm going at here” (24:18), pondering the broader societal impacts, such as growth in women's sports, travel industries, and narrowing healthcare gaps. This segment underscores the evolving landscape of wealth distribution and its potential to reshape various sectors.

6. Email Etiquette Stories (24:00 – 30:08)

Injecting humor into the discussion, Michael shares anecdotes about poor email etiquette. He recounts an interaction where delayed communication led to frustration: “she was being very rude” (28:14). Ben likens Michael’s high standards in email correspondence to “the Jerry Seinfeld of email etiquette” (29:48), highlighting the challenges of maintaining professionalism in digital communications.

These stories serve as light-hearted interludes, illustrating the personal side of the hosts and their attention to detail in professional interactions.

7. Sentiment Surveys and Political Bias (30:00 – 33:13)

Returning to economic sentiment, the hosts critique recent CNBC polls showing polarized views on the economy. Ben cites shifting perceptions among Democrats, Republicans, and Independents, noting, “the independent now is down from 20% to 10%, saying the economy is in worse shape” (30:35). Michael dismisses these surveys as “complete garbage” due to their political biases, asserting, “It's all political” (31:20).

They argue that sentiment data is no longer a reliable indicator of economic health, given its susceptibility to rapid changes and political influences. Instead, they advocate for relying on concrete economic data rather than fluctuating survey results.

8. Movie Recommendations and Cultural Commentary (33:00 – 36:24)

Shifting to lighter topics, Michael and Ben discuss their favorite movies set in Miami, praising classics like Scarface and Miami Vice. Ben highlights, “Los Angeles is the best movie city,” but acknowledges Miami’s contributions to film with titles like Ace Ventura and Bad Boys (35:23).

Ben also shares his current reading: “the new Lorne Michaels book by Susan Morrison” (34:13), appreciating its insights into talent management and business strategies. This segment underscores the hosts’ diverse interests beyond finance, offering listeners a glimpse into their personal passions.

9. Closing Remarks (35:00 – 36:24)

As the episode wraps up, Michael thanks the Miami audience and recaps the day’s discussions. Ben mentions the challenges facing the real estate industry, questioning the sustainability of mortgage brokers celebrating in a sluggish market (25:23). Michael responds optimistically about the housing market’s resilience despite economic slowdowns.

The hosts conclude with a final nod to Miami’s cultural scene, reaffirming their appreciation for the city and its vibrant atmosphere. Michael humorously reflects on their preparedness for the live show, reaffirming their commitment to delivering insightful and engaging content despite logistical challenges.

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Notable Quotes:

• Ben Carlson (00:16): “AI is just going to make us all more efficient.”
• Michael Batnick (01:19): “I wanted to die.”
• Michael Batnick (05:22): “I don't think we're gonna have a bear market.”
• Ben Carlson (10:16): “is down 20% at its worst.”
• Michael Batnick (19:43): “if corporate capex pulls back, we will get a recession.”
• Ben Carlson (23:11): “women will control more money than ever before.”
• Michael Batnick (31:20): “It's all political. That's it.”

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Conclusion

In this lively episode of Animal Spirits Podcast, Michael Batnick and Ben Carlson offer a blend of personal stories, incisive market analysis, and cultural commentary. Despite initial challenges with the live format, the hosts provide valuable insights into market dynamics, economic sentiment, and societal shifts in wealth distribution. Their candid discussions and engaging banter make for an informative and entertaining listen, reflecting the multifaceted nature of finances, life, and investing.

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For more episodes and updates, visit Animal Spirits Podcast.

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Timestamp Reference:

• *00:00 – 36:24

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Transcript

[Michael Bat]

Today's episode, Live from Future Proof citywide, is brought to you by YCharts. Who else?

[Ben Carlson]

The new Y Charts AI tool is now live, and it's going to change the way you work as a financial advisor. It's not putting people out of jobs yet, but it's making you more efficient.

[Michael Bat]

What are some of the features?

[Ben Carlson]

So takes SEC filings, financial news, economic data, and just allows you to find them much quicker integrated into your presentations and your practice. So for advisors, that's talking quicker proposals, quicker feedback for clients. I think AI is just going to make us all more efficient. Right. So check the link in the show notes, try out the AI chat today. And when you sign up for wide charts, what do you get?

[Michael Bat]

20% off. New subscription only.

[Ben Carlson]

Welcome to Animal Spirits live from Future Proof citywide with Michael and Ben. We did one live show already today. Let's set the scene.

[Michael Bat]

Should we rewind?

[Ben Carlson]

Yes, let's rewind. So last night we celebrated your 40th birthday party, and Josh went out of his way to pick one of the cooler steakhouses in Miami. Papi.

[Michael Bat]

Papi.

[Ben Carlson]

Papi Steaks. And it was an experience.

[Michael Bat]

Yes.

[Ben Carlson]

What was your experience with it?

[Michael Bat]

So there was about 20 of us, and at one point, like, lights come on and loud music.

[Ben Carlson]

Dinner was over, and it was time for a cake. Right. And all the lights start flashing, the.

[Michael Bat]

Music picks up, and everybody starts looking at me and taking out their cameras, and I wanted to die.

[Ben Carlson]

So you initially, I think, were very embarrassed, Turned a little red.

[Michael Bat]

Well, it's just everybody looking at you. It was taking forever. And I'm just like. I grabbed you. I'm like, here, save me.

[Ben Carlson]

So I sat down. And not. It wasn't just our whole group of 20. The entire restaurant kind of stood up. People were filming, and there's sparklers going, and the people who work there are going crazy. And it's this whole big thing. And the music was bumping and the lights were flashing, and it's like, oh, there's smoke. And. And then the surprise. The reveal was that it was a stake for another table that was next to ours. It wasn't for you. So you went from embarrassed to actually, like, being the center of attention is kind of cool to. It's not for me, actually. And it went to some other table. And we kept thinking, like, what was they thinking? As we.

[Michael Bat]

Everyone. Why are they celebrating?

[Ben Carlson]

Yes, everyone thought it was coming to you. But then 10 minutes later, they did do a birthday thing, which it was kind of funny because at that point, we'd Already celebrated enough. And they did do the sparklers and the big sign that said Happy Birthday, Michael. It was cool.

[Michael Bat]

But remember, Mr. Deeds, we wasted the good surprise on you. It was sort of like that.

[Ben Carlson]

It was the yes, total rug pull for you. It was just. It was perfect.

[Michael Bat]

So we were moving a little slow this morning. We were lucky enough to draw the 8:30 slot at future Proof, which I'm told is actually a good thing. Cause it's not. You're a draw. You're get. We want people up and out early, so it's actually a compliment.

[Ben Carlson]

So we were the very first ones on stage. It was a little chilly. I'd say our brains were operating at 40% speed. 40? I was gonna say 60, but maybe 40. We were out.

[Michael Bat]

So how would you grade this podcast that our audience is about to listen to or turn off? Was it A? Like, okay, Real Talk? It was probably like a D. But I think we acknowledged it that it was a slow motion train wreck. So. Which elevated it to maybe a B minus. A B minus.

[Ben Carlson]

Strong C. I think the YouTube viewers are gonna like it better. Cause we did a lot of charts and we couldn't have them on the screen.

[Michael Bat]

That's true. That did slow us down. But the other thing is, it's interesting when you're in front of an audience and if I say a bad joke to you, we just move on. Right? Like, there's nothing like just blank stares. Especially if people in the audience don't know us and they're like, who are these assholes? Who gave them a mic? What's happening right now? So during the episode. So here's what happened. You know what? I'm gonna take the L on this one. My bad. We were a bit underprepared. Would you say the doc was light?

[Ben Carlson]

We've been busy for the past few days at the conference. So, yeah, we didn't have as much as we usually did.

[Michael Bat]

The document was light. So about 15 minutes into the show, I'm like, oh, we're almost done. We're almost done. Duncan texted us, do your 100 favorite movies on an airplane. So anyway, one thing that we didn't get to, I think because I was. I think I'm gonna. I'm gonna blame the 40% capacity thing, the 40% speed that we were operating on. We spoke very quickly about my feelings on the future of the market. And I said this on the show. I have opinions on where the market's gonna go. I think everybody has opinions. Like, I don't think I would like you know, they might happen, they might not. So I said, I don't think we're gonna have a bear market. Obviously, that might be wrong in a week. Who knows? But what I didn't say, which I want to say now, is that I'm definitely not like, stamping, calling a bottom, because I think that when you get a sharp rally off the lows like we had, not always there's V's, but it's pretty common to roll and retest the lows.

[Ben Carlson]

Right.

[Michael Bat]

So not a prediction, just a. More of a. Hey, this is Grand Rapids Hedge. That's what this is.

[Ben Carlson]

Put a probability on it, right?

[Michael Bat]

Probability on what?

[Ben Carlson]

No bear market. Because you like to do. You like to think in those terms.

[Michael Bat]

Yeah, yeah, yeah. So probably have a no bear market. Let's go. I really do believe no bear markets. I'm going to say 74%.

[Ben Carlson]

All right. That's pretty good.

[Michael Bat]

That's like. Right?

[Ben Carlson]

Yes. I just. I don't know how anyone can think that they have. Have this. This market handicap. Like, I know exactly what's going to happen. Okay, so enjoy our live show from Miami. Now it's time for us to get a Miami place. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Bat and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

[Michael Bat]

Thank you guys for showing up. I'm hungover, too.

[Ben Carlson]

Listen, anytime you can lock down the 8:30am time slot at a conference, the day after St. Patty's Day and the day after you celebrate Michael's 40th birthday, you have to do it.

[Michael Bat]

Yep. So Matt said you guys wanted the 8:30 spot, and we said, no, we need the 8:30 spot. We have to have it.

[Ben Carlson]

Let's start off with some banter. On the way here, we walked through the pool and I told you I want to talk about this today. And I pointed to the water with the cucumbers in it.

[Michael Bat]

Okay, do we start?

[Ben Carlson]

So I go for a run yesterday, not to brag. And I come back and I'm at the pool and I need some water. Cause it's very hot here in Miami, and the only thing I see is the water with the cucumbers in it. Who is this for?

[Michael Bat]

Me.

[Ben Carlson]

I Think it looks better than it. There's no purpose of putting fruit in the water. No one actually likes the water. If you put a regular water next to the cucumber water, which one gets drank more? The regular water?

[Michael Bat]

Nine times out of ten. I think you're right. It's. It's usually a charade just for show, but the water at Lowe's Hotel actually was delightful. There was, like, a mint and a pink tasting thing. So I'm gonna. I'm gonna take the other side of that one. A couple of weeks ago, Ben was on the podcast talking about how there should be a standard hotel room. I think you're onto something. And I forgot to mention this last week, but I was in. I was in Chicago at a hotel last week, and I couldn't find the light switch. Like, there was like. I'm looking around. There's no lights on the ceiling, but there's just, like, a fluorescent light coming out from, like, the wall area. And I'm looking around, and I just slept with the lights on. I was going to call to the hotel lobby, but I. A lot of blank stares. That's okay. A lot of blank stares. See, it's better when we're 101. Ben always laughs at my jokes.

[Ben Carlson]

Let's talk about the stock market.

[Michael Bat]

Whoa, whoa, whoa, whoa, whoa, whoa. I got one more travel thing. How many people are like, Josh Chronic Purell users?

[Ben Carlson]

That's actually me.

[Michael Bat]

Are you?

[Ben Carlson]

Well, since I had kids, because kids are just germ factories. So I use. Yeah, I'm constantly using that stuff on.

[Michael Bat]

My hands, I guess with germs, I'm like, what doesn't kill you makes you stronger type of guy. I'm not afraid of germs. Germs don't scare me. Until now. So I'm in the airport yesterday, and we're going to the baggage claim, and I see a guy. I'm walking into the bathroom. I see a guy running towards me. So he runs into the bathroom with me, and I'm thinking, all right, this guy's about to have diarrhea. He doesn't. He just pees up the urinal next to me, leaves without washing his hands, and then he runs back to the carousel to get his bag. This whole thing is bizarre. But I can't take my eyes off of him. And as the bags start to come out. Nope, that's not my bag. And I'm like, oh, PV hands. This guy is touching multiple. And he's touching, like, the handle. Like, nope. So now I think I'm Think I'm a pure all guy. All right, now let's talk about the stock market. What do you got, Ben?

[Ben Carlson]

Well, you were concerned that the market was going to be crashing this week as we're doing the podcast.

[Michael Bat]

No, no, I wasn't. I didn't. I didn't want that to happen. It's not like I thought it was going to happen. I was like, oh, guys, I'm telling you, it's good, but it would have sucked. Listen, we all serve our clients and it would have just been shitty to be here. We had that at the first year of future proof. It wasn't fun. We had that. Was it a 9% inflation print? Like one of the highs? And so I. Yes, I was not concerned, as in I thought it was going to happen, but I didn't. It would have been a bummer if we're here smiling, having a good time, and the market's just tanking. Who wants that?

[Ben Carlson]

Someone reminded me. So the day after the election, I said, here's what the market is doing. And it was. Remember, it was a big move. And I tweeted this and someone said, hey, Ben, I'm reminding of this. So the initial market move right after the election, S&P 500 was up big, small caps were up big. The dollar was up, foreign stocks got crushed, gold went down and rates went up and bonds went down.

[Michael Bat]

Wait, say that one more time. I'm just kidding.

[Ben Carlson]

And so I said something here is an overreaction. I'm just not quite sure yet. But it seems like everything was based on what happened. Now all of that reversed. The S and P is down, the small caps are getting crushed, the dollar is down, foreign stocks are going crazy, gold is at all time highs, and rates have come down for bonds. So literally everything that happened the day after the election was an overreaction. So the mag seven is down. Was down 20% at its worst. Severance is down 24% from season one to season two. I'm still holding out hope that it's going to come back. What's the Ryan Dietrich story here?

[Michael Bat]

All right, so we've got charts in the dock, not on the screen, so I'll walk you through them. Ryan tweeted one of the fastest corrections ever and he looked at what happens 1, 3, 6, 12 months after, and 3 and 6 months higher. 100% of the time. 12 months, 83% of time. Again, it's only happened five times. But, Ben, what's your. I feel like you've been banging this from for a while. That everything just happens quicker now. Are we ever going to get like a 10% correction that just sort of, you know, takes its time?

[Ben Carlson]

I don't. I think investors just. It's the structure of the market now. The information moves faster, the algorithms move faster. And I think if it's like people just want to take their medicine and get it over with and rip a.

[Michael Bat]

Band aid off, I think the market is biased to move higher in this current. I don't know what, last 15 years, just with the relentless bid and corporate earnings going higher. The market has a higher bid, it always does. But when something knocks it off its axis, it happens really quickly. And I think a lot of that has to do with structural issues. Josh and I were talking with Joe Taranova yesterday about the news. News. Greg Zuckerman wrote an article about the hedge funds Millennium Citadel blowing up a little bit and blowing up. They were down 1.1% for the month, but relatively speaking, for them, that was their worst month in, I think, six years. So the de risking, the degrossing, the. Whatever happens just really quickly.

[Ben Carlson]

Yeah, the leverage comes out. I looked at the every S&P 500 drawdown since 1950, and I got this cute little table here. Everyone in the audience should see it at some point. So there's 39 corrections, so that's one every two years or so. But the last time we had three bear markets in a decade was the 1960s. Before that, it happened in the 40s, it happened in the 30s, depending on how you count these things. But so people are saying, well, could we actually get our third bear market in five or six years in the 2000 and twenties? And because the speed of this stuff, it wouldn't shock me at all if we just again have a big overreaction. And I think that's the thing, is the pendulum is just swinging wider and wider these days. So this would be, like I said, this would be the first time we would have three bear markets since the 1960s. Not saying it's going to happen, but of course we're going to have one by the end of the decade for sure. Right.

[Michael Bat]

Are we using like rolling 10 years or what? Are we talking about fiscal decades?

[Ben Carlson]

Yeah, just the numbers.

[Michael Bat]

All right, so we got a bit of a snapback, which is nice for now. We'll take it. The xrt, which is the retail etf, equally weighted ish, has put together its two best day rally of the year. That's a Mike Zicardi. After the horrific umich and disappointing February retail sales report. We're talking about sentiment later in the show, but we also had a very nice bounce yesterday. Best day for the advanced decline line since December 2023. Any explanation for the bounce?

[Ben Carlson]

I mean, we just went down too quick and people had to come back.

[Michael Bat]

Right, There it is. European equities. Sorry we don't have this chart on the stage, but nothing but just relentless outflows for the last three years. Who's a chart from EPFR and Barclays Research. And investors are in fact piling in.

[Ben Carlson]

I think this has legs for the first time. I think for the first time, this. And this is another one of those. No one ever could have guessed this in a million years. Even after the election, no one said, oh, foreign stocks are going to go crazy. Everyone thought the opposite.

[Michael Bat]

So for the past 15 years it was US stocks go up, international stocks are either flat or go up less. And this idea that, like, what could, what could happen where US Stocks would go down and European stocks would go up. Could you give me a scenario? Genius? And it was completely unimaginable.

[Ben Carlson]

So one of the things that happens during almost every market correction is either the 6040 portfolio is dead, although right now it seems to be alive again because bonds are doing okay and buy and hold is dead. And so the Wall Street Journal has this article. The title is the Days of Set it and Forget it Investing just ended for many Americans. And to be fair, this article is about two Americans that this happened for. But they go through these two. One's an older gentleman and basically said, I'm getting out of everything.

[Michael Bat]

Hang on, don't paraphrase Yarm Ariely. So for people in the audience that are new to our show, this really tickles our funny bone whenever there is an article talking about like this. The days of Set it and forget investing just ended. They like they get two quotes from random people. So, for example, the foremost authority on investing, Yoram Ariella, hadn't touched most of his investments, preferring to ride the stock market ups and downs. And no offense to your last Tuesday, he decided he had had enough. The 82 year old unloaded almost half of his stock investments, fearful of the effect of President Trump's economic agenda and tariffs in particular. But get this, he may get rid of more still. He might not be done. He might not be done.

[Ben Carlson]

One of the times we knew we made it as a podcast is when we were making fun of one of these people in one of these articles and the guy actually emailed us and said, hey, that was me. I was the one they were talking about.

[Michael Bat]

But Ben, it's not just your Marielle, it's also Pat and Price. So Patton Price said he expected geopolitical chaos in Trump's second term back when equities were still flying high. So he sold all the stocks in his retirement accounts around the time of the presidential inauguration on January 20. And so let me just quote Patton because there's some gold in here. It's not like I have some fancy thesis and I think I know what's going to happen, said Price, a 46 year old musician and former political consultant. I just don't. I just don't think anybody knows what's going to happen. I couldn't, I could not have said it better myself.

[Ben Carlson]

So this is the worst part of it though. It says he doesn't know when he will get the money back into the market. And that's why market timing is so hard, because you go into it with no plan and you're. You're screwed.

[Michael Bat]

So unfortunately, Yoram and Patton say that set it and forget it is over. It died. We'll see.

[Ben Carlson]

Do you remember coming out of the 2010s crisis? I don't know what you're doing. Were you still a waiter back then? Insurance industry. Like coming out of the gst?

[Michael Bat]

Funny you should ask. Ben, what year are we talking here? 2008.

[Ben Carlson]

I'd say 2010, 2011 ish was the big push for there's going to be a double dip recession. Remember that was every everyone's parlay was.

[Michael Bat]

I was at the library studying for the cfa, emailing strangers and day trading the triple leveraged inverse financial ETF ticker faz shout to direction.

[Ben Carlson]

Okay, so you weren't really up on the European debt crisis at the time.

[Michael Bat]

What do you mean? I had my trading journal. I was all up on it.

[Ben Carlson]

So my take is right now we're positioning ourselves for a double dip vibe session. The economy's slowing a little bit, but it seems like all the charts just say the vibe session is back. So we have a bunch of charts from Torsten Slack who does a good job of this and he shows there's a sharp reversal in spending plans for capex by corporations. And consumers are getting more worried about their jobs being lost.

[Michael Bat]

To me, this is. I don't want to hand wave this away.

[Ben Carlson]

No, no, so I got a point here. Give me a sec, Let me cook. Consumer sentiment is falling. Jobs cuts have risen. So that's a real thing. This is the one that got me though. Record high share of consumers think business Conditions are worsening and this thing shot up like this is, this is like the stock market going crazy. I just think these sentiment overreactions are happening faster too. And that's where it's hard to know does this actually mean anything and are we going to see it in the data? We have to wait for the data still.

[Michael Bat]

Yeah, I completely agree with you. So we were waiting for retail sales on what day is it? Monday. Did Monday we got retail sales and we were like anxious that it was going to finally show up in the data. Now again like this just started. So it's early. But I totally agree with you that the sentiment shift and people's spending plans I think matters. But you got to the data has.

[Ben Carlson]

To confirm it because it didn't confirm in 2022. Everyone was so negative on the economy but they kept spending money. Is that going to happen this time around as well?

[Michael Bat]

We will find out. But to me that's, that's it. Like if people pull back, if corporate capex pulls back, we will get a recession.

[Ben Carlson]

So here's the difference. This is from Neil Dutta at redmac. He said expected change in unemployment is the worst since 2008. No one is asking for a raise in this environment and I think that's good for inflation unless it turns into deflation I guess. But people could ask for a raise in 2021 and 2022. The labor market was scorching hot. That's not the case anymore. And so I think that is where the self fulfilling prophecy thing starts to happen.

[Michael Bat]

So if we do go into a recession, Torsten Slack has another chart showing us household balance sheets are in excellent shape. A mild recession.

[Ben Carlson]

Yeah. It doesn't seem like we're setting ourselves up for a financial crisis. And the good news is a lot of the wounds right now are self inflicted. Right. One of the reasons for the slowdown is government policy and so can't they reverse it and help if need be?

[Michael Bat]

Who knows. But when I say mild recession, I guess what I'm talking about is all recessions suck. But when history looks back on whatever we're going to experience, I think it will have been if anything, a mild recession.

[Ben Carlson]

40% chance of a recession, always.

[Michael Bat]

Where are we going next, Ben?

[Ben Carlson]

All right. Oh, here's one. Mike Zaccardi. This is from Goldman sachs. Number of IPOs. So it was 140 in 2020, which is kind of bonkers to think about in 2020 that there was that many IPOs. 260 in 2021. And then just falls off of a cliff. And there was 50 last year. There's been a dozen so far this year. This seems like one of those things that for sure is a sign of never going to happen or not happening for a while.

[Michael Bat]

What do you mean?

[Ben Carlson]

That the IPO window is going to all of a sudden open and the floodgates are going to go crazy. Like in this environment, I can't imagine that IPOs are going to go crazy.

[Michael Bat]

Klarna just filed.

[Ben Carlson]

So we have a lot of private investment managers here. Does this ever trickle down to where the investors in these funds start getting worried? When am I going to get my money back?

[Michael Bat]

I don't know. Don't you think it's happening? I mean, there's been a lot of articles about end investors there. A lot more money has gone into private markets than has come out.

[Ben Carlson]

I guess there's just so much more money there these days that it doesn't matter until it does. I don't know.

[Michael Bat]

I got to be honest, Ben, I'm getting a little bit nervous. Not about the market, but about our. About this podcast here. Feel like we under prepared. The doc is a little bit light, ladies and gentlemen, so we're going to do our best to fill in the time. We're not done yet. We're not done just yet, but let's slow it down. We're on cruise control.

[Ben Carlson]

All right. Okay, so I think I put you on the spot.

[Michael Bat]

Here's one.

[Ben Carlson]

Okay, what do you got? No, but, like, we look back at this in five years and does this turn into a bear market or recession, or is this just the freak out du jour and we move on?

[Michael Bat]

I told you when this started that I don't think we're going to get a bear market. My opinion hasn't changed. But I'm also, like, really afraid to say that out loud in front of all you people, because I don't really think. I mean, I think that, but I don't believe it. You know what I mean? Like, I actually think that, but I don't really believe my own feelings.

[Ben Carlson]

I'm always wrong, take it literally, not seriously, or.

[Michael Bat]

Yeah, no, but no, I don't think that we're going to have a bear market. And I don't know. We'll find out.

[Ben Carlson]

All right, switching gears here, we've been talking a lot about the inheritance thing, and last week I made the point that millennials shouldn't count on the inheritance because they're not going to get it until they're like, 65 years old. People are just living longer and they're probably not going to get it when they need it to help them. Here's a new report from bank of America showing that women will be the big benefits of the wealth transfer. So this is. I feel like the estimated number is different every time you read it. They say 124 trillion by 2048, 80% of which is going to go to women.

[Michael Bat]

How do they figure that?

[Ben Carlson]

Because women live longer than men. So most of that money is going to trickle down to women. So they say that could drive growth in women's sports, refashion the travel industry and narrow long term gaps in health care provisions. This is from a Bank of America report saying women will control more money than ever before. Is this something that the wealth management industry is ready for, prepared for the wealth transfer? No, not the wealth transfer. Just the fact that women households are gonna be controlling more money. I'm saying from a relationship advice side of things, you know what I'm going at here.

[Michael Bat]

I don't know if I'm qualified to talk about. Is the wealth management industry handled equipped to handle the wealth transfer to that, Michael? Yeah, I think so. I don't see genders. I think we're equipped. I don't know.

[Ben Carlson]

Can we talk about your hat real quick, please? So I've told this joke already before, but my kids heard that we were coming to this event and they said, well, what are you doing? And I said, well, we're doing a live podcast and we're doing all this stuff and Monday night we're going out to celebrate Michael's birthday, which we did last night, which was a great family affair for everyone. And they said, how old is he? I said, He's 40. And they said, michael's older than you. When you put that hat on, you look like you're 80 years old, my friend. You look like you've already. I mean you might as well just go on the beach and get the leather tan and start looking for, get the metal detector on the beach. That's a retiree hat right there.

[Michael Bat]

I'll take it. Thank you. Okay, hang on.

[Ben Carlson]

I have a real estate thing.

[Michael Bat]

Okay.

[Ben Carlson]

So we were in the hotel bar yesterday having lunch, maybe sipping on Miami Vice as one is want to do in Miami. And there was a mortgage industry, the top 50 mortgage brokers in Miami, they all posed for a picture. And I was just kind of thinking, how is that even, how are they even celebrating in this environment? Like there's no activity, there's nothing to do. I talked to a friend recently who has been a realtor for a dozen years and said he finally just had to take a job in sales for something else because there's literally no activity anywhere going on in the industry. Does that actually if there's a slowdown and mortgage rates go from seven to five, does that help the real estate industry at all?

[Michael Bat]

Yes.

[Ben Carlson]

Don't you think there has to be a lot of pent up demand?

[Michael Bat]

Well, it's like a push and pull. So I guess what you're saying is if there's a recession that drags rates lower, is that also going to kill housing activity because people are not spending money afraid of losing their jobs? I don't think so. I think people, there's such a backlog of people, 35 to 30, whatever, 40 that need to get into a house. First time home buyers, there's still so many of them, so I don't think so.

[Ben Carlson]

So this is also where the sentiment piece comes in because my whole thesis has been there's $35 trillion in home equity just sitting there and people can't use all of that, obviously. But a big, I think the number is like 15 to 20 of it is money that people could take out and use for something if they wanted to for home equity line of credit or cash out, refinance. And will the sentiment of the environment allow that? If it's happening because of a slowdown, will people tap that equity and use it or not?

[Michael Bat]

Why wouldn't they? Because it'd be harder to pay back, I guess.

[Ben Carlson]

Yeah. Worried about taking on debt in a slowing economy?

[Michael Bat]

Yeah, I don't know. I don't know. Good question.

[Ben Carlson]

I do think that the consumer balance sheet and the potential for the real estate industry to be like the counterbalance actually is another reason why, to your point, if we got a recession, it would probably be mild one. Yeah.

[Michael Bat]

All right, I want to talk about email etiquette for a second. I haven't done this in a while on the show, but a couple of years ago I sent, and this is filler by the way, I sent an email. What happened? I sent an email to some. Oh, somebody, somebody sent me an email and I forgot to respond to them probably for about a week. And I apologized because I do the right thing. I said I'm sorry I dropped the ball on this. Would love to talk next Thursday, Friday at these times. This person responded a week later and said now it's my turn to drop the ball. Can you talk? Whatever, whatever. And there was a debate amongst our audience. I think you Were in the. Nothing wrong with that, right? She's just being funny, right?

[Ben Carlson]

Yeah.

[Michael Bat]

She was not being funny. She was being very rude. And my suspicion was confirmed because on the call, her body, it just. It didn't go well. She was being very rude. I did another run in with a weird email etiquette last week. Here it is. Okay. I documented this. 8:44. I get a LinkedIn message at 9:14. I promptly respond. That's how you do it. Less than 30 minutes. Come on. Sure. Shoot me an email. 11:22. Awesome. We'll have my assistant email you.

[Ben Carlson]

Ooh.

[Michael Bat]

11:33. So 10 minutes after that email sent. Check your inbox. I'm out, right? Right. You don't think so?

[Ben Carlson]

Wait, I'm. I'm missing something here. What are you so mad about?

[Michael Bat]

I'm not. I'm not mad. I'm just out. It's overly aggressive. This guy says, I'll have my assistant email you now. I'm not an assistant. Shame or fine. A lot of people have assistants. I do their email. But then she sent me an email. By the way, the email was absurd. I didn't grab her email, but it's completely absurd. Validating my. My suspicions here. But then 10 minutes later, he says, I don't confirm that the email was sent. Ten minutes after you tell me this could be sent. And. And how dare you tell me to check my inbox.

[Ben Carlson]

You're the Jerry Seinfeld of email etiquette. Because remember on Seinfeld you didn't watch much Seinfeld, but the running joke was always that his standards were always too high. He'd find something wrong with every girlfriend or person that he wanted to date with. That's you with email. You look for something that's wrong with these people.

[Michael Bat]

Nope. The exact opposite.

[Ben Carlson]

Standards are. It's a good thing you're not dating anymore. Your standards are way too high.

[Michael Bat]

The exact opposite is true. Could not be further from the truth. I answer so many emails that I know what's proper and what's not, and it's one in a thousand. I haven't had a bad email like that story in three years. This one got the flag.

[Ben Carlson]

All right, I feel like you need to write a blog post of Michael's 20 rules for emailing me. Just. All right, I got a survey of the week here. Okay, back to our sentiment stuff. This is from CNBC poll. Would you say the current state of the economy is excellent or good number of people, and they break it out by Democrats, Independents, and Republicans. And this is going from October 24 to March 2025.

[Michael Bat]

The only options are excellent or good.

[Ben Carlson]

Yes, the number of people that say the economy is excellent are good. So in October, right before the election, 50% of Democrats said it was good or excellent. Now that's down to 10%. For Republicans, it was like 3% before. Now it's up to 25%. But independents went down from 20% to 10%. And so I think that's the one that you look for, I guess. I think you throw out the two left or right, because that's obviously telling you nothing. It's just who's in office. But the independent now is down from 20% to 10%, saying the economy is in worse shape. I don't know. This is why the sentiment stuff, to me is just so hard to use as a gauge of anything anymore, because it changes so fast.

[Michael Bat]

I said yesterday with Josh and Joe that tune out the noise is like, the dumbest thing a financial professional could say to. Especially to their clients. I don't think many people do, but, like. But this is the noise. This survey stuff is the noise because it is 100% political, and it's really hard to unscramble it. But, like, I don't. I just. It's all political. That's it. So tune that out. Complete garbage. Tune out the surveys.

[Ben Carlson]

The thing to me is that only 20% of the people said the economy was good back then, and now it's 10%. Shouldn't that number have been higher or shouldn't be higher now? Like, that it's that low is just. Is the negativity of the world just that we're never going to be in a period where people are happy about the economy.

[Michael Bat]

We showed a bunch of charts from a survey that people, like, the opinions were so extreme that people thought that, like, the job market was worse in 2022 than it was in 2008. I think people are, like, more naive than ever. And it's not their fault. They're just overloaded with bullshit information at all times. So I just disregard all of it.

[Ben Carlson]

I think that's. That's kind of where I'm starting to get, is what you have to watch what they do now, what they say, and that's why we have to wait for the economic data to kind of prove this sentiment out.

[Michael Bat]

The algorithms that control the. The dialogue, they reward negativity. And so there's never going to be a period in time where everybody's, like, smiling and we feel like the mood is good. It will Never return that. To that. Now, I don't know if that was ever a thing that happened anyway or if we just make believe that it was. But that will never, ever happen. It will never not be like it is today, unfortunately. I think it'll ebb and flow, and sometimes it'll get, like, more loud and violent, but it's never going to be like Kumbaya.

[Ben Carlson]

But if you. But I feel like if you look at the responses to these surveys and how negative they are, and then you go and talk to actual people.

[Michael Bat]

Right.

[Ben Carlson]

It's. It's completely different.

[Michael Bat]

Right.

[Ben Carlson]

People. Are people at this conference in a pretty good mood? Yeah, they should be, obviously.

[Michael Bat]

Yeah.

[Ben Carlson]

But anyway.

[Michael Bat]

All right, so we're in Miami. Ben and I are big movie fans. We do some recommendations at the end of every show. We have different tastes, I would say. Would you say?

[Ben Carlson]

Yes. We have completely opposite movie tastes.

[Michael Bat]

So is Miami an underrated movie city? Because you think about, like. So you went to chatgpt for this. What are the best movies in New York? Chicago, Los Angeles, and Mile Long. But Miami, Not a bad city.

[Ben Carlson]

You were very excited when we saw the Something About Mary restaurant the other day.

[Michael Bat]

Oh, yeah, yeah. Right over there.

[Ben Carlson]

Yeah.

[Michael Bat]

All right, so Miami has produced Ace Ventura. Not bad, Scarface, Bad Boys, the Birdcage, There's Something About Mary, out of Sight, and Miami Vice. Not bad. Not a bad list. Okay, that's it. Okay, Ben, as we come to a close, what have you been reading, listening, and watching?

[Ben Carlson]

So the entertainment options on my flight were down, so I brought my Kindle with me, and I've been reading the new Lorne Michaels book by Susan Morrison. And I've always been a big SNL guy, And the structure of the book, it almost reads like a management book. So I think that there's a lot of business implications from the way Lorne Michaels manages. And they talk about how he manages talent, and he's dealing with very volatile talent, obviously people who want to be stars, but they all look to him. And so it's actually a pretty good business book for how he manages through the chaos of these big personalities and a lot of stuff going on and things never working out. And it's. It's really good book. I highly recommend it. It's just called Lorne.

[Michael Bat]

That's it.

[Ben Carlson]

That's it. That's all I got.

[Michael Bat]

Has anybody. I know we've been in the comments, but has anybody seen the newest episode of White Lotus? Show of hands. This guy. Okay. Couple. Amazing, right? All right, everybody else is in for a treat when they get to it. Daredevil. Nah, I won't say Daredevil. There's a new show on Apple tv. Dope thief. Here's the premise. Let me see. Head nods or just blank responses. We'll gauge this one out. Two guys, they pretend to be DEA agents, but they're not. They do some drug bus until they bust the wrong guys. What do we think? It's really good. Thumbs up, Big John. Thank you. All right.

[Ben Carlson]

Oh, wait. So you put this thing in here of the best movies in the. In the city. So what was. You asked me, what's the best movie city, and you never gave me an answer.

[Michael Bat]

Los Angeles.

[Ben Carlson]

Okay.

[Michael Bat]

Is that. Wait, hold on. What was that? Atlanta.

[Ben Carlson]

That's where they film a lot.

[Michael Bat]

No, no, no. It wasn't like. But what movies take place in the city of Atlanta that, like, you know, it's in Atlanta?

[Ben Carlson]

Well, no, the real answer is movies are better in Europe than they are in America because the car chases are better over there. The sights are better. Right. It's European.

[Michael Bat]

Better's a stretch, but shout out to Europe. Good movies. Okay, that's it for the show. Thank you, everybody, for coming to Miami and watching us. We appreciate it. 8:30. Showing up after St. Patty's Day. Let's go. Thank you, everybody. Animal spirits@the compoundnews.com personal emails, personal responses.